Registration No. 33-6614
File No. 811-4712
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
PRE-EFFECTIVE AMENDMENT NO. / /
POST-EFFECTIVE AMENDMENT NO. 15 / X /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X /
Amendment No. 14 / X /
OPPENHEIMER MORTGAGE INCOME FUND
(Exact Name of Registrant as Specified in Charter)
Two World Trade Center, New York, New York 10048-0203
(Address of Principal Executive Offices)
212-323-0200
(Registrant's Telephone Number)
ANDREW J. DONOHUE, ESQ.
Oppenheimer Management Corporation
Two World Trade Center, New York, New York 10048-0203
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate
box):
/ / Immediately upon filing pursuant to paragraph (b)
/ X / On January 24, 1995, pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/ / On ________________, pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph (a)(2)
/ / On ________________, pursuant to paragraph (a)(2) of Rule
485
The Registrant has registered an indefinite number of shares under the
Securities Act of 1933 pursuant to Rule 24f-2 promulgated under the
Investment Company Act of 1940. A Rule 24f-2 Notice for the Registrant's
fiscal year ending September 30, 1994 was filed on November 29, 1994.
<PAGE>
FORM N-1A
OPPENHEIMER MORTGAGE INCOME FUND
Cross Reference Sheet
Part A of
Form N-1A
Item No. Prospectus Heading
1 Front Cover Page
2 Expenses; Overview of the Fund
3 Financial Highlights; Performance of the Fund
4 Front Cover Page; How the Fund is Managed -- Organization and History;
Investment Objective and Policies;
5 How the Fund is Managed; Expenses; Back Cover
5A Performance of the Fund
6 How the Fund is Managed - Organization and History; The Transfer Agent;
Dividends, Capital Gains and Taxes; Investment Objective and Policies -
Portfolio Turnover
7 Shareholder Account Rules and Policies; How to Buy Shares; How to
Exchange Shares; Special Investor Services; Service Plan for Class A
Shares; Distribution and Service Plan for Class B Shares; How to Sell
Shares
8 How to Sell Shares; Special Investor Services
9 *
Part B of
Form N-1A
Item No. Heading in Statement of Additional Information
10 Cover Page
11 Cover Page
12 *
13 Investment Objective and Policies; Other Investment Techniques
and Strategies; Additional Investment Restrictions
14 How the Fund is Managed - Trustees and Officers of the Fund
15 How the Fund is Managed - Major Shareholders
16 How the Fund is Managed; Distribution and Service Plans;
17 Brokerage Policies of the Fund
18 Additional Information - About the Fund
19 Your Investment Account - How to Buy Shares; How to Sell Shares;
How to Exchange Shares;
20 Dividends, Capital Gains and Taxes
21 How the Fund is Managed; Brokerage Policies of the Fund
22 Performance of the Fund
23 Financial Statements
_______________
*Not applicable or negative answer
<PAGE>
Oppenheimer Mortgage Income Fund
Prospectus dated January 24, 1995
Oppenheimer Mortgage Income Fund (the "Fund") is a mutual fund with
the investment objective of seeking high current income, preservation of
capital and maintenance of liquidity through investment in mortgage-backed
securities, whether or not issued or guaranteed by the U.S. Government,
its agencies or instrumentalities, and investment in income producing
securities not secured by mortgages on real estate, including asset-backed
securities. The securities the Fund invests in are described more
completely in "Investment Objective and Policies." That section of the
Prospectus also explains some of the risks of those investments.
The Fund offers two classes of shares: (1) Class A shares, which
are sold at a public offering price that includes a front-end sales
charge, and (2) Class B shares, which are sold without a front-end sales
charge, although you may pay a sales charge when you redeem your shares,
depending on how long you hold them. Class B shares are also subject to
an annual "asset-based sales charge." Each class of shares bears
different expenses. In deciding which class of shares to buy, you should
consider how much you plan to purchase, how long you plan to keep your
shares, and other factors discussed in "How to Buy Shares" starting on
page 17.
This Prospectus explains concisely what you should know before
investing in the Fund. Please read this Prospectus carefully and keep it
for future reference. You can find more detailed information about the
Fund in the January 24, 1995 Statement of Additional Information. For a
free copy, call Oppenheimer Shareholder Services, the Fund's Transfer
Agent, at 1-800-525-7048, or write to the Transfer Agent at the address
on the back cover. The Statement of Additional Information has been filed
with the Securities and Exchange Commission and is incorporated into this
Prospectus by reference (which means that it is legally part of this
Prospectus).
Shares of the Fund are not deposits or obligations of any bank, are not
guaranteed by any bank, and are not insured by the F.D.I.C. or any other
agency, and involve investment risks, including the possible loss of the
principal amount invested.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
Contents
Page
About the Fund
Expenses
Overview of the Fund
Financial Highlights
Investment Objective and Policies
How the Fund is Managed
Performance of the Fund
About Your Account
How to Buy Shares
Class A Shares
Class B Shares
Special Investor Services
AccountLink
Automatic Withdrawal and Exchange Plans
Reinvestment Privilege
Retirement Plans
How to Sell Shares
By Mail
By Telephone
By Wire
By Checkwriting
How to Exchange Shares
Shareholder Account Rules and Policies
Dividends, Capital Gains and Taxes
<PAGE>
ABOUT THE FUND
Expenses
The Fund pays a variety of expenses directly for management of
its assets, administration, distribution of its shares and other services,
and those expenses are subtracted from the Fund's assets to calculate the
Fund's net asset value per share. All shareholders therefore pay those
expenses indirectly. Shareholders pay other expenses directly, such as
sales charges and account transaction charges. The following tables are
provided to help you understand your direct expenses of investing in the
Fund and your share of the Fund's business operating expenses that you
will bear indirectly. The numbers below are based on the Fund's expenses
during its last fiscal year ended September 30, 1994.
- Shareholder Transaction Expenses are charges you pay when you
buy or sell shares of the Fund. Please refer to "About Your Account,"
from pages 17 through 27, for an explanation of how and when these charges
apply.
Class A Shares Class B Shares
Maximum Sales Charge on Purchases
(as a % of offering price) 4.75% None
Sales Charge on Reinvested Dividends None None
Deferred Sales Charge
(as a % of the lower of the original
purchase price or redemption proceeds) None(1) 5% in the first
year, declining to
1% in the sixth year
and eliminated
thereafter
Redemption Fee None (2) None (2)
Exchange Fee $5.00(3) $5.00(3)
(1) If you invest more than $1 million in Class A shares, you may have
to pay a sales charge of up to 1% if you sell your shares within 18
calendar months from the end of the calendar month during which you
purchased those shares. See "How to Buy Shares - Class A Shares,"
below.
(2) There is a $15 transaction fee for redemptions paid by Federal
Funds wire, but not for redemption proceeds wired by Automated
Clearing House ("ACH") funds or paid by check. See "How to Sell
Shares."
(3) Fee is waived for automated exchanges, as described in "How to
Exchange Shares."
- Annual Fund Operating Expenses are paid out of the Fund's assets
and represent the Fund's expenses in operating its business. For example,
the Fund pays management fees to its investment adviser, Oppenheimer
Management Corporation (which is referred to in this Prospectus as the
"Manager"). The rates of the Manager's fees are set forth in "How the
Fund is Managed," below. The Fund has other regular expenses for
services, such as transfer agent fees, custodial fees paid to the bank
that holds its portfolio securities, audit fees and legal expenses. Those
expenses are detailed in the Fund's Financial Statements in the Statement
of Additional Information.
The numbers in the table below are projections of the Fund's
business expenses based on the Fund's expenses in its last fiscal year.
These amounts are shown as a percentage of the average net assets of each
class of the Fund's shares for that year. The "Management Fees" shown in
the table below have been restated to reflect a voluntary reduction in the
Fund's management fees. The fee was reduced by .05% effective January 1,
1994, and by an additional .05% effective July 1, 1994. Without such a
reduction, the Fund's management fees would have been .75% and .75% for
Class A and Class B shares, respectively, and "Total Fund Operating
Expenses" would have been 1.27% and 1.98% for Class A and Class B shares,
respectively. See "How the Fund Is Managed" for additional information.
The 12b-1 Distribution Plan Fees for Class A shares are service fees. For
Class B shares the 12b-1 Distribution Plan Fees are service fees and
asset-based sales charges. The service fee for each class is a maximum
of 0.25% of average annual net assets of the class and the asset-based
sales charge for Class B shares is 0.75%. These plans are described in
greater detail in "How to Buy Shares."
The actual expenses for each class of shares in future years may be
more or less than the numbers in the table, depending on a number of
factors, including the actual value of the Fund's assets represented by
each class of shares.
Class A Shares Class B Shares
Management Fees (Restated) .70% .70%
12b-1 Distribution Plan Fees .25% 1.00%
Other Expenses .27% .23%
Total Fund Operating Expenses (Restated) 1.22% 1.93%
- Examples. To try to show the effect of these expenses on an
investment over time, we have created the hypothetical examples shown
below. Assume that you make a $1,000 investment in each class of shares
of the Fund, and the Fund's annual return is 5%, and that its operating
expenses for each class are the ones shown in the Annual Fund Operating
Expenses table above. If you were to redeem your shares at the end of
each period shown below, your investment would incur the following
expenses by the end of 1, 3, 5 and 10 years:
1 year 3 years 5 years 10 years*
Class A Shares $59 $84 $111 $188
Class B Shares $70 $91 $124 $190
If you did not redeem your investment, it would incur the following
expenses:
Class A Shares $59 $84 $111 $188
Class B Shares $20 $61 $104 $190
*The Class B expenses in years 7 through 10 are based on the Class A
expenses shown above, because the Fund automatically converts your Class
B shares into Class A shares after 6 years. Long term Class B
shareholders could pay the economic equivalent of more than the maximum
front-end sales charge allowed under applicable regulations, because of
the effect of the asset-based sales charge and contingent deferred sales
charge. The automatic conversion of Class B shares to Class A Shares is
designed to minimize the likelihood that this will occur. Please refer
to "How to Buy Shares - Class B Shares" for more information.
These examples show the effect of the current level of expenses on
an investment attaining a hypothetical return, but are not meant to state
or predict actual or expected expenses or investment returns of the Fund,
all of which will vary.
A Brief Overview of the Fund
Some of the important facts about the Fund are summarized below,
with references to the section of this Prospectus where more complete
information can be found. You should carefully read the entire Prospectus
before making a decision about investing. Keep the Prospectus for
reference after you invest, particularly for information about your
account, such as how to sell or exchange shares.
- What Is The Fund's Investment Objective? The Fund's investment
objective is to seek high current income, preservation of capital and
maintenance of liquidity.
- What Does the Fund Invest In? In seeking its objective, the Fund
primarily invests in mortgage-backed securities, whether or not issued by
the U.S. Government, its agencies or instrumentalities. The Fund can also
invest in income producing securities not secured by mortgages on real
estate, including asset-backed securities and participation interests and
government debt obligations. The Fund may also write covered calls and use
derivative investments to enhance income, and may use hedging instruments,
including derivative investments, to try to manage investment risks.
These investments are more fully explained in "Investment Objective and
Policies," starting on page 7.
- Who Manages the Fund? The Fund's investment adviser is
Oppenheimer Management Corporation, which (including a subsidiary) advises
investment company portfolios having over $28 billion in assets. The
Fund's portfolio manager, who is an officer of the Manager and primarily
responsible for the selection of the Fund's securities, is Eva Zeff. The
Manager is paid an advisory fee by the Fund, based on its assets. The
Fund's Board of Trustees, elected by shareholders, oversees the investment
adviser. Please refer to "How the Fund is Managed," starting on page 13
for more information about the Manager and its fees.
- How Risky is the Fund? All investments carry risks to some
degree. The Fund's investments in mortgage-backed securities and other
income producing securities are subject to changes in their value from a
number of factors such as changes in general bond market movements,
unscheduled or early payment of principal and interest on the underlying
mortgages, or changes in interest rates that can affect bond prices.
These changes affect the value of the Fund's investments and its price per
share. In the OppenheimerFunds spectrum, the Fund is generally more
conservative than aggressive growth funds, but more aggressive than money
market funds. While the Manager tries to reduce risks by diversifying
investments, by carefully researching securities before they are purchased
for the portfolio, and in some cases by using hedging techniques, there
is no guarantee of success in achieving the Fund's objective and your
shares may be worth more or less than their original cost when you redeem
them. Please refer to "Investment Objective and Policies" starting on
page 7 for a more complete discussion.
- How Can I Buy Shares? You can buy shares through your dealer or
financial institution, or you can purchase shares directly through the
Distributor by completing an Application or by using an Automatic
Investment Plan under AccountLink. Please refer to "How To Buy Shares"
on page 17 for more details.
- Will I Pay a Sales Charge to Buy Shares? The Fund has two
classes of shares. Class A shares are offered with a front-end sales
charge, starting at 4.75%, and reduced for larger purchases. Class B
shares are offered without a front-end sales charge, but may be subject
to a contingent deferred sales charge (starting at 5% and declining as
shares are held longer) if redeemed within 6 years of purchase. There is
also an annual asset-based sales charge on Class B shares. Please review
"How To Buy Shares" starting on page 17 for more details, including a
discussion about which class may be appropriate for you.
- How Can I Sell My Shares? Shares can be redeemed by mail or by
telephone call to the Transfer Agent on any business day, or through your
dealer or by writing a check against your Fund account, or by wire to a
previously designated bank account. Please refer to "How To Sell Shares"
on page 25.
- How Has the Fund Performed? The Fund measures its performance
by quoting its "standardized" yield, total return, and average annual
total return which measure historical performance. The yield and returns
of the fund can be compared to the yields and returns (over similar
periods) of other funds. Of course, other funds may have different
objectives, investments, and levels of risk. The Fund's performance can
also be compared to broad market indices, which we have done on page 16.
Please remember that past performance does not guarantee future
results.
<PAGE>
Financial Highlights
The table on this page presents selected financial information about
the Fund, including per share data and expense ratios and other data based
on the Fund's average net assets. This information has been audited by
KPMG Peat Marwick LLP, the Fund's independent auditors, whose report on
the Fund's financial statements for the fiscal year ended September 30,
1994 is included in the Statement of Additional Information.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------------------
YEAR ENDED
SEPTEMBER 30,
1994 1993 1992 1991 1990 1989 1988 1987 1986(2)
========================================================
========================================================
====
<S> <C> <C> <C> <C> <C> <C> <C> <C>
<C>
PER SHARE OPERATING DATA:
Net asset value, beginning
of period $14.20 $14.14 $13.70 $13.18 $13.24 $13.41 $13.14 $14.39 $14.29
Income (loss) from
investment operations:
Net investment income .94 .92 .97 1.11 1.22 1.23 1.33 1.29 .07
Net realized and
unrealized gain
(loss) on investments (1.04) .07 .45 .52 (.05) (.20) .21 (1.16) .03
------ ------ ------ ------ ------ ------ ------ ------ ------
Total income (loss) from
investment operations (.10) .99 1.42 1.63 1.17 1.03 1.54 .13 .10
- --------------------------------------------------------------------------------------------------------------------
Dividends and distributions
to shareholders:
Dividends from net
investment income (.95) (.93) (.98) (1.11) (1.23) (1.20) (1.27) (1.38) --
Dividends in excess of net
investment income (.01) -- -- -- -- -- -- -- --
Tax return of capital
distribution (.04) -- -- -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------
Total dividends and
distributions to
shareholders (1.00) (.93) (.98) (1.11) (1.23) (1.20) (1.27) (1.38) --
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end
of period $13.10 $14.20 $14.14 $13.70 $13.18 $13.24 $13.41 $13.14 $14.39
====== ====== ====== ====== ====== ======
====== ====== ======
========================================================
========================================================
====
TOTAL RETURN, AT NET ASSET
VALUE(3) (.80)% 7.29% 10.69% 12.85% 9.21% 8.12% 12.09% .87% .70%
========================================================
========================================================
====
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $78,602 $93,893 $99,579 $91,052 $67,234 $55,483 $59,835 $55,085 $2,746
- --------------------------------------------------------------------------------------------------------------------
Average net assets
(in thousands) $85,181 $96,817 $97,712 $80,208 $60,699 $57,162 $58,892 $45,099 $2,135
- --------------------------------------------------------------------------------------------------------------------
Number of shares
outstanding
at end of period
(in thousands) 5,999 6,610 7,042 6,648 5,102 4,191 4,462 4,191 191
- --------------------------------------------------------------------------------------------------------------------
Ratios to average net
assets:
Net investment income 7.21% 6.49% 6.92% 8.22% 9.12% 9.24% 8.93% 9.81%
11.16%(4)
Expenses 1.22% 1.39% 1.40% 1.29% 1.22% 1.38% 1.12% .26% --%(4)
- --------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 78.4% 142.7% 144.6% 103.7% 47.9% 82.2% 96.0% 184.4% 0.0%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
-----------------
YEAR ENDED
SEPTEMBER 30,
1994 1993(1)
================================================
<S> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning
of period $14.21 $14.14
- ------------------------------------------------
Income (loss) from
investment operations:
Net investment income .90 .28
Net realized and
unrealized gain
(loss) on investments (1.12) .11
------ ------
Total income (loss) from
investment operations (.22) .39
- ------------------------------------------------
Dividends and distributions
to shareholders:
Dividends from net
investment income (.84) (.32)
Dividends in excess of net
investment income (.01) --
Tax return of capital
distribution (.04) --
------ ------
Total dividends and
distributions to
shareholders (.89) (.32)
- ------------------------------------------------
Net asset value, end
of period $13.10 $14.21
====== ======
================================================
TOTAL RETURN, AT NET ASSET
VALUE(3) (1.62)% 2.96%
================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $2,721 $1,176
- ------------------------------------------------
Average net assets
(in thousands) $1,951 $463
- ------------------------------------------------
Number of shares
outstanding
at end of period
(in thousands) 208 83
- ------------------------------------------------
Ratios to average net
assets:
Net investment income 6.60% 5.29%(4)
Expenses 1.93% 2.53%(4)
- ------------------------------------------------
Portfolio turnover rate(5) 78.4% 142.7%(4)
</TABLE>
(1) For the period from May 17, 1993 (inception of offering) to September
30,1993.
(2) For the period from September 11, 1986 (commencement of operations)
to September 30, 1986.
(3) Assumes a hypothetical initial investment on the business day before
the first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption
at the net asset value calculated on the last business day of the fiscal
period. Sales charges are not reflected in the total returns.
(4) Annualized.
(5) The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation. Purchases and sales of investment securities (excluding
short-term securities) for the year ended September 30, 1994 were
$70,145,100 and $74,034,285, respectively.
<PAGE>
Investment Objective and Policies
Objective. The Fund invests its assets to seek high current income,
preservation of capital and maintenance of liquidity.
Investment Policies and Strategies. The Fund seeks its objective by
investing primarily in mortgage-related securities. These mortgage-
related securities may or may not be issued or guaranteed by the U.S.
Government, its agencies or instrumentalities. The Fund may also invest
in securities not secured by mortgages on real estate, including asset-
backed securities, participation interests, and government debt
obligations. The Fund is neither insured nor guaranteed by the U.S.
Government, its agencies or instrumentalities, and its net asset value may
fluctuate in light of changing market conditions.
Under normal market conditions (when the Manager believes that the
securities market is not in a volatile or unstable period) the Fund will
invest at least 65% of its total assets in mortgage-related securities,
including whole loans and participation mortgages, and securities
collateralized by mortgages on real estate. Mortgage-backed securities
for purposes of the 65% limitation will include privately issued or
guaranteed (and non-guaranteed) mortgage pass-through securities and
participation interests, including multi-class pass-through securities,
private label collateralized mortgage obligations ("CMO's"), and private-
label derivative mortgage-backed securities.
The Fund may invest up to 35% of its total assets in income
producing securities not secured by mortgages on real estate, including
asset-backed securities, and participation interests and government debt
obligations.
While it is not a fundamental policy of the Fund, the Fund expects
that it will invest no more than 35% of its total assets in debt
securities rated below "BBB" by Standard & Poor's Corporation ("Standard
& Poor's") or below "Baa" by Moody's Investors Service, Inc. ("Moody's")
or, if unrated, determined by the Fund's investment adviser, Oppenheimer
Management Corporation (the "Manager"), to be of comparable quality to
debt securities rated below "BBB" by Standard & Poor's or below "Baa" by
Moody's. Debt securities rated "BBB"/"Baa" or better are referred to as
"investment grade."
The Fund may try to hedge against losses in the value of its
portfolio of securities by using hedging strategies and derivative
investments described below. The Fund's portfolio manager may employ
special investment techniques in selecting securities for the Fund. These
are also described below. Additional information may be found about them
under the same headings in the Statement of Additional Information.
- Can the Fund's Investment Objective and Policies Change? The
Fund has an investment objective, described above, as well as investment
policies it follows to try to achieve its objective. Additionally, the
Fund uses certain investment techniques and strategies in carrying out
those investment policies. The Fund's investment policies and techniques
are not "fundamental" unless this Prospectus or the Statement of
Additional Information says that a particular policy is "fundamental."
The Fund's investment objective is a fundamental policy.
The Fund's Board of Trustees may change non-fundamental policies
without shareholder approval, although significant changes will be
described in amendments to this Prospectus. Fundamental policies are those
that cannot be changed without the approval of a "majority" of the Fund's
outstanding voting shares. The term "majority" is defined in the
Investment Company Act to be a particular percentage of outstanding voting
shares (and this term is explained in the Statement of Additional
Information).
- Interest Rate Risks. In addition to credit risks, described
below, debt securities are subject to changes in their value due to
changes in prevailing interest rates. When prevailing interest rates
fall, the value of already-issued debt securities generally rise. When
interest rates rise, the value of already-issued debt securities generally
decline. The magnitude of these fluctuations will often be greater for
longer-term debt securities than shorter-term debt securities. Changes
in the value of securities held by the Fund mean that the Fund's share
prices can go up or down when interest rates change because of the effect
of the change on the value of the Fund's portfolio of debt securities.
- Special Risks of Lower-Rated Securities. High yield, lower-grade
securities, whether rated or unrated, often have speculative
characteristics. Lower-grade securities have special risks that make them
riskier investments than investment grade securities. They may be subject
to greater market fluctuations and risk of loss of income and principal
than lower yielding, investment grade securities. There may be less of
a market for them and therefore they may be harder to sell at an
acceptable price. There is a relatively greater possibility that the
issuer's earnings may be insufficient to make the payments of interest due
on the bonds. The issuer's low creditworthiness may increase the
potential for its insolvency.
These risks mean that the Fund may not achieve the expected income
from lower-grade securities, and that the Fund's net asset value per share
may be affected by declines in value of these securities. However, the
Fund's limitations on investments in these types of securities may reduce
some of the risk, as will the Fund's policy of diversifying its
investments. The Fund is not obligated to dispose of a bond subsequently
downgraded below investment grade. However, if as a result of subsequent
downgrades more than 35% of the Fund's total assets were invested in non-
investment grade debt securities, the Fund would consider whether,
consistent with its investment objective, certain of such investments
should be sold.
- Mortgage-Backed Securities and CMOs. Mortgage-backed securities
are issued by lenders such as mortgage bankers, commercial banks, and
savings and loan associations. Such securities differ from conventional
debt securities which provide for periodic payment of interest in fixed
amounts (usually semi-annually) with principal payments at maturity or
specified call dates. Mortgage-backed securities provide monthly payments
which are, in effect, a "pass-through" of the monthly interest and
principal payments (including any prepayments) made by the individual
borrowers on the pooled mortgage loans. Principal prepayments result from
the sale of the underlying property or the refinancing or foreclosure of
underlying mortgages.
The effective maturity of a mortgage-backed security may be
shortened by unscheduled or early payment of principal and interest on the
underlying mortgages, which may affect their effective yield. The
principal returned may be invested in instruments having a higher or lower
yield than the prepaid instruments. Such securities therefore may be less
effective as a means of "locking in" attractive long-term interest rates
and may have less potential for appreciation during periods of declining
interest rates than conventional bonds with comparable similar maturities
during periods of declining interest rates. If the Fund buys mortgage-
backed securities at a premium, prepayments of principal and foreclosures
of mortgages may result in some loss of the Fund's principal investment
to the extent of the premium paid. As mentioned above, the value of
mortgage-backed securities will tend to rise when interest rates fall and
to fall when interest rates rise. The magnitude of those fluctuations
generally will be greater when the average maturity of the Fund's
portfolio securities is longer. Their value may also be affected by
changes in the market's perception of the creditworthiness of the entity
issuing or guaranteeing them or by changes in government regulations and
tax policies. Due to these factors, the Fund's share value and yield are
not guaranteed and will fluctuate, and there can be no assurance that the
Fund's objective will be achieved.
Private-label pass-through securities may be structured similarly
to mortgage-backed securities guaranteed by the Government National
Mortgage Association ("GNMA"), popularly known as "Ginnie Mae's", which
are direct obligations of the U.S. Government, or to those which are
guaranteed as to timely or ultimate collection of interest and principal
by the Federal National Mortgage Association, a federally-chartered and
privately-owned corporation ("FNMA"), or by the Federal Home Loan Mortgage
Corporation, a corporate instrumentality of the United States ("FHLMC").
Alternatively, private-label CMO's may be issued by a single purpose
corporation or other entity with no or limited assets beyond the mortgage
pool itself. Such bonds generally are secured by an assignment to a
trustee (under the indenture pursuant to which the bonds are issued) of
collateral consisting of a pool of mortgages. Derivative or stripped
CMO's are structured so that classes of varying maturities may be secured
by the same pool of mortgages, the payments on which are used to pay
interest on each class and to retire successive maturities (known as
"tranches") in sequence. The principal value of certain CMO tranches may
be more volatile than other types of mortgage-related securities, because
of the possibility that the principal value of the CMO may be prepaid
earlier than the maturity of the CMO as a result of prepayments of the
underlying mortgage loans by the borrowers.
Private-label mortgage-backed securities bear a degree of credit
risk, as they are primarily dependent for the timing and certainty of
payment upon the attributes of the mortgages in the pool and any
additional credit support offered by the issuer or third parties. To
compensate for such credit risk they generally offer higher yields than
comparable mortgage-backed securities. If the borrower of any of the
underlying mortgages has difficulty making scheduled interest or principal
payments because of the failure to receive underlying payments or
otherwise, the Fund could experience a reduction in its income and might
experience a decline in the net asset value of its shares.
As privately issued pass-through type mortgage-backed securities are
not guaranteed by a government associated entity such as the GNMA, FNMA
or FHLMC, they are commonly offered with certain types of credit
enhancements. Credit support may be external or internal. External
credit support includes corporate guarantees, pool insurance, bond
insurance and letters of credit. External credit support will generally
guarantee payment of all losses up to a certain dollar amount or
percentage of the pool. Internal credit support includes any equity
investment in the issuer not subject to claims of other creditors and any
subordinated classes of the mortgage pools. The subordinated class may
often absorb all losses before the senior class is at risk. The
subordinated class would generally carry a lower rating and offer a higher
yield than the senior class. The Fund may invest in subordinated classes
rather than senior classes and may invest in securities without credit
support or enhancement.
The Fund may invest in CMOs that are "stripped"; that is, the
security is divided into two parts, one which receives some or all of the
principal payments and the other which receives some or all of the
interest. Stripped securities that receive interest only are subject to
increased volatility in price due to interest rate changes, and have the
additional risk that if the principal underlying the CMO is prepaid, which
is more likely to happen if interest rates fall, the Fund will lose the
anticipated cash flow from the interest on the mortgages that were
prepaid. See "Mortgage-Backed Securities" in the Statement of Additional
Information for more details.
Prepayments tend to increase during periods of falling interest
rates, while during periods of rising interest rates prepayments will most
likely decline. When prevailing interest rates rise, the value of pass-
through securities may decrease, as do the value of other debt securities,
but when prevailing interest rates decline, the values of pass-through
securities may not be as likely to rise to the same degree as the values
of other debt securities because of the pre-payment feature of pass-
through securities.
- Asset-Backed Securities. Asset-backed securities are fractional
interests in pools of consumer loans and other trade receivables, similar
to mortgage-backed securities described above. They are issued by trusts
and special purpose corporations. They are backed by a pool of assets,
such as credit card or auto loan receivables, which are the obligations
of a number of different parties. The income from the underlying pool is
passed through to holders, such as the Fund. These securities are
frequently supported by a credit enhancement, such as a letter of credit,
a guarantee or a preference right. However, the extent of the credit
enhancement may be different for different securities and generally
applies to only a fraction of the security's value. These securities
present special risks. For example, in the case of credit card
receivables, the issuer of the security may have no security interest in
the related collateral.
- Whole Loan and Participation Mortgages. Unlike mortgage-backed
securities, whole loan and participation mortgages generally are not
backed by any government guarantee or private credit enhancement.
Therefore the adequacy of the underlying collateral as to the value and
the priority of the lien as against third party claimants is of greater
importance. Neither the Fund nor the Manager expects to participate in
the negotiation of the terms of the mortgage with any borrower and,
consequently, the Fund is dependent upon third parties to create valid,
enforceable loans and mortgages and to establish and maintain the
anticipated priority and perfection of the applicable security interests.
- Participation Interests. The Fund may acquire participation
interests in loans that are made to U.S. or foreign companies (the
"borrower"). They may be interests in, or assignments of, the loan, and
are acquired from the banks or brokers that have made the loan or are
members of the lending syndicate. No more than 5% of the Fund's net
assets can be invested in participation interests of the same issues. The
Manager has set certain creditworthiness standards for issuers of loan
participations, and monitors their creditworthiness. The value of loan
participation interest primarily depends upon the creditworthiness of the
borrower, and its ability to pay interest and principal. Borrowers may
have difficulty making payments. If a borrower fails to make scheduled
interest or principal payments, the Fund could experience a decline in the
net asset value of its shares. Some borrowers may have senior securities
rated as low as "C" by Moody's or "D" by Standard & Poor's, but may be
deemed acceptable credit risks.The Fund's investments in whole loan and
participation mortgages, participation interests and stripped mortgage-
backed securities are subject to the Fund's limitation on investment in
illiquid securities. See "Illiquid and Restricted Securities."
- General. Investments such as whole loan and participation
mortgages and certain derivative mortgage-backed securities often have
original issue discount or market discount for Federal income tax
purposes, and are purchased at a discount. Each year, the Fund would be
required to accrue with respect to such securities a portion of the
original issue discount or the market discount, which is considered
investment company taxable income in that year under the Internal Revenue
Code of 1986, as amended (the "Internal Revenue Code"), even though there
has been no corresponding distribution of cash to the Fund. In order for
the Fund to satisfy income distribution requirements each year under the
Internal Revenue Code, the Fund might be forced to liquidate a portion of
its portfolio when it would otherwise not do so.
- Portfolio Turnover. Securities may be purchased or sold without
regard to the length of time they have been held, to attempt to take
advantage of short-term differentials in yields, with the objective of
seeking income while conserving capital. While short-term trading
increases portfolio turnover, the Fund incurs little or no brokerage
costs. If the Fund derives 30% or more of its gross income from the sale
of securities held less than three months, the Fund may fail to qualify
under the Internal Revenue Code as a regulated investment company and
would lose certain beneficial tax treatment of its income (see "Dividends,
Capital Gains and Taxes").
Other Investment Techniques and Strategies. The Fund may use the
following special investment methods when their use appears appropriate
to the Manager. Since certain of these investment methods are
speculative, they may subject an investment in the Fund to relatively
greater risks and costs than would be the case with an investment in a
fund that does not use such methods.
- Repurchase Agreements. The Fund may enter into repurchase
agreements. In a repurchase transaction, the Fund buys a security and
simultaneously sells it to the vendor for delivery at a future date.
Repurchase agreements must be fully collateralized. However, if the
vendor of the securities fails to pay the resale price on the delivery
date, the Fund may incur costs in disposing of the collateral and may
experience losses if there is any delay in its ability to do so. The Fund
will not enter into a repurchase agreement that causes more than 10% of
the Fund's net assets to be subject to repurchase agreements having a
maturity beyond seven days. There is no limit on the amount of the Fund's
net assets that may be subject to repurchase agreements of seven days or
less.
- "When-Issued" and Delayed Delivery Transactions. The Fund may
purchase securities on a "when-issued" basis, and may purchase or sell
securities on a "delayed delivery" basis. These terms refer to securities
that have been created and for which a market exists, but which are not
available for immediate delivery. There may be a risk of loss to the Fund
if the value of the security declines prior to the settlement date.
Although the Fund is subject to the risk of adverse market fluctuation
during the period, the Manager does not believe that the Fund's net asset
value or income will be significantly adversely affected by its purchase
of mortgage-backed securities on a "when-issued" or "delayed delivery"
basis.
- Loans of Portfolio Securities. To attempt to increase its
income, the Fund may lend its portfolio securities (other than in
repurchase transactions) to qualified borrowers, dealers and other
financial institutions. These loans are limited to not more than 25% of
the Fund's net assets and are subject to other conditions described in the
Statement of Additional Information. The Fund presently does not intend
to lend its portfolio securities, but if it does, the value of securities
loaned is not expected to exceed 5% of the value of its total assets.
- Hedging. As described below, the Fund may purchase and sell
certain kinds of futures contracts, put and call options, and options on
futures or enter into interest rate swap agreements. These are all
referred to as "hedging instruments." The Fund does not use hedging
instruments for speculative purposes, and has limits on the use of them,
described below. The hedging instruments the Fund may use are described
below and in greater detail in "Other Investment Techniques and
Strategies" in the Statement of Additional Information.
The Fund may buy and sell options, and futures for a number of
purposes. It may do so to try to manage its exposure to the possibility
that the prices of its portfolio securities may decline, or to establish
a position in the securities market as a temporary substitute for
purchasing individual securities. It may do so to try to manage its
exposure to changing interest rates. Some of these strategies, such as
selling futures, buying puts and writing covered calls, hedge the Fund's
portfolio against price fluctuations.
Other hedging strategies, such as buying futures and call options,
tend to increase the Fund's exposure to the securities market. Writing
covered call options may also provide income to the Fund for liquidity
purposes or to raise cash to distribute to shareholders.
Futures. The Fund may buy and sell futures contracts that relate to
interest rates (these are referred to as Interest Rate Futures). This
type of Future is described in "Hedging With Options and Futures
Contracts" in the Statement of Additional Information.
Put and Call Options. The Fund may buy and sell certain kinds of put
options (puts) and call options (calls).
The Fund may buy calls only on debt securities, and Interest Rate
Futures, or to terminate its obligation on a call the Fund previously
wrote. The Fund may write (that is, sell) covered call options. When the
Fund writes a call, it receives cash (called a premium). The call gives
the buyer the ability to buy the investment on which the call was written
from the Fund at the call price during the period in which the call may
be exercised. If the value of the investment does not rise above the call
price, it is likely that the call will lapse without being exercised,
while the Fund keeps the cash premium (and the investment). The Fund may
write calls on up to 100% of its total assets under certain conditions
described below. The Fund may write calls in the "over-the-counter"
market on debt securities on up to 10% of its total investments.
The Fund may purchase put options. Buying a put on an investment
gives the Fund the right to sell the investment at a set price to a seller
of a put on that investment. The Fund can buy only those puts that relate
to (1) debt securities (whether or not it holds such securities in its
portfolio ) or (2) Interest Rate Futures. The Fund may sell puts on debt
securities covered by segregated liquid assets and may sell a put that it
previously purchased.
The Fund may buy and sell puts and calls on if certain conditions
are met: (1) Calls the Fund buys or sells must be listed on a securities
or commodities exchange, or quoted on the Automated Quotation System of
the National Association of Securities Dealers, Inc. (NASDAQ) or, in the
use of debt securities, traded in the over-the-counter market; (2) each
call the Fund writes must be "covered" while it is outstanding: that
means the Fund must own the investment on which the call was written or
it must own other securities that are acceptable for the escrow
arrangements required for calls; (3) the Fund may write calls on Futures
contracts it owns, but these calls must be covered by securities or other
liquid assets the Fund owns and segregates to enable it to satisfy its
obligations if the call is exercised; (4) not more than 50% of the Fund's
assets may be subject to puts; and (5) a call or put option may not be
purchased if the value of all of the Fund's put and call options would
exceed 5% of the Fund's total assets.
Interest Rate Swaps. In an interest rate swap, the Fund and another
party exchange their right to receive or their obligation to pay interest
on a security. For example, they may swap a right to receive floating
rate payments for fixed rate payments. The Fund enters into swaps only
on securities it owns. The Fund may not enter into swaps with respect to
more than 25% of its total assets. Also, the Fund will segregate liquid
assets (such as cash or U.S. Government securities) to cover any amounts
it could owe under swaps that exceed the amounts it is entitled to
receive, and it will adjust that amount daily, as needed.
Hedging instruments can be volatile investments and may involve
special risks. The use of hedging instruments requires special skills and
knowledge of investment techniques that are different than those required
for normal portfolio management. If the Manager uses a hedging instrument
at the wrong time or judges market conditions incorrectly, hedging
strategies may reduce the Fund's return. The Fund could also experience
losses if the prices of its futures and options positions were not
correlated with its other investments or if it could not close out a
position because of an illiquid market for the future or option.
Options trading involves the payment of premiums and has special tax
effects on the Fund. There are also special risks in particular hedging
strategies. There are certain risks in writing calls. If a covered call
written by the Fund on an investment has increased in value, the Fund will
be required to sell the investment at the call price and will not be able
to realize any profit if the investment has increased in value above the
call price. In addition, the Fund could experience capital losses that
might cause previously distributed short-term capital gains to be re-
characterized as non-taxable return of capital to shareholders. In
writing puts, there is the risk that the Fund may be required to buy the
underlying security at a disadvantageous price. The principal risks
relating to the use of Futures are: (a) possible imperfect correlation
between the prices of the Futures and the market value of the debt
securities in the Fund's portfolio; (b) possible lack of a liquid
secondary market for closing out a Futures position; (c) the need for
additional skills and techniques beyond those required for normal
portfolio management; and (d) losses on Futures resulting from market
movements not anticipated by the Manager. Interest rate swaps are subject
to credit risks (if the other party fails to meet its obligations) and
also to interest rate risks. The Fund could be obligated to pay more
under its swap agreements than it receives under them, as a result of
interest rate changes. These risks are described in greater detail in the
Statement of Additional Information.
- Illiquid and Restricted Securities. Under the policies and
procedures established by the Fund's Board of Trustees, the Manager
determines the liquidity of certain of the Fund's investments. Investments
may be illiquid because of the absence of an active trading market, making
it difficult to value them or dispose of them promptly at an acceptable
price. A restricted security is one that has a contractual restriction on
its resale or which cannot be sold publicly until it is registered under
the Securities Act of 1933. The Fund will not invest more than 10% of its
net assets in illiquid or restricted securities. The Fund's percentage
limitation on these investments does not apply to certain restricted
securities that are eligible for resale to qualified institutional
purchasers.
- Derivative Investments. The Fund can invest in a number of
different kinds of "derivative investments." The Fund may use some types
of derivatives for hedging purposes, and may invest in others because they
offer the potential for increased income and principal value. In general,
a "derivative investment" is a specially-designed investment whose
performance is linked to the performance of another investment or
security, such as an option or future. In the broadest sense, derivative
investments include exchange-traded options and futures contracts (please
refer to "Writing Covered Calls" and "Hedging with Options and Futures
Contracts").
One risk of investing in derivative investments is that the company
issuing the instrument might not pay the amount due on the maturity of the
instrument. There is also the risk that the underlying investment or
security might not perform the way the Manager expected it to perform.
The performance of derivative investments may also be influenced by
interest rate changes in the U.S. and abroad. All of these risks can mean
that the Fund will realize less income than expected from its investments,
or that it can lose part of the value of its investments, which will
affect the Fund's share price. Certain derivative investments held by the
Fund may trade in the over-the-counter markets and may be illiquid. If
that is the case, the Fund's investment in them will be limited, as
discussed in "Illiquid and Restricted Securities".
Other Investment Restrictions. The Fund has certain investment
restrictions that are fundamental policies. Under these fundamental
policies, the Fund cannot do any of the following: (1) invest in
securities (except those of the U.S. Government or any of its agencies or
instrumentalities) of any issuer if immediately thereafter, either (a)
more than 5% of the Fund's total assets would be invested in securities
of that issuer, or (b) the Fund would then own more than 10% of that
issuer's voting securities; (2) make loans, except through the purchase
of portfolio securities subject to repurchase agreements or as described
above under "Loans of Portfolio Securities"; (3) borrow money in excess
of 10% of the value of its total assets (and then only as a temporary
measure for emergency purposes) or make any investment at a time during
which such borrowing exceeds 5% of the value of its assets; (4) pledge,
mortgage or hypothecate any of its assets to secure a debt; such
prohibition does not bar the Fund from escrow arrangements for options
trading or collateral or margin arrangements in connection with hedging
instruments approved by the Board; (5) invest more than 10% of its assets
in securities subject to repurchase agreements maturing in more than seven
days, securities which are restricted as to resale, illiquid securities
(those not readily convertible to cash) and securities for which market
quotations are not readily available; or (6) concentrate investments to
the extent of 25% of its assets in any industry; there is no limitation
on obligations issued by the U.S. Government and its agencies or
instrumentalities.
All of the percentage limitations described above and elsewhere in
this Prospectus apply only at the time the Fund purchases a security, and
the Fund need not dispose of a security merely because the size of the
Fund's assets has changed or the security has increased in value relative
to the size of the Fund. There are other fundamental policies discussed
in the Statement of Additional Information.
How the Fund is Managed
Organization and History. The Fund was organized in 1986 as a
Massachusetts business trust. The Fund is an open-end, diversified
management investment company, with an unlimited number of authorized
shares of beneficial interest.
The Fund is governed by a Board of Trustees, which is responsible
under Massachusetts law for protecting the interests of shareholders. The
Trustees meet periodically throughout the year to oversee the Fund's
activities, review its performance, and review the actions of the Manager.
"Trustees and Officers of the Fund" in the Statement of Additional
Information names the Trustees and provides more information about them
and the officers of the Fund. Although the Fund is not required by law
to hold annual meetings, it may hold shareholder meetings from time to
time on important matters, and shareholders have the right to call a
meeting to remove a Trustee or to take other action described in the
Fund's Declaration of Trust.
The Board of Trustees has the power, without shareholder approval,
to divide unissued shares of the Fund into two or more classes. The Board
has done so, and the Fund currently has two classes of shares, Class A and
Class B. Each class has its own dividends and distributions and pays
certain expenses which may be different for the different classes. Each
class may have a different net asset value. Each share has one vote at
shareholder meetings, with fractional shares voting proportionally. Only
shares of a particular class vote together on matters that affect that
class alone. Shares are freely transferrable.
The Manager and Its Affiliates. The Fund is managed by the Manager,
Oppenheimer Management Corporation, which is responsible for selecting the
Fund's investments and handles its day-to-day business. The Manager
carries out its duties, subject to the policies established by the Board
of Trustees, under an Investment Advisory Agreement which states the
Manager's responsibilities. The Agreement sets forth the fees paid by the
Fund to the Manager and describes the expenses that the Fund is
responsible to pay to conduct its business.
The Manager has operated as an investment adviser since 1959. The
Manager and its affiliates currently manage investment companies,
including other OppenheimerFunds, with assets of more than $29 billion as
of December 31, 1994, and with more than 1.8 million shareholder accounts.
The Manager is owned by Oppenheimer Acquisition Corp., a holding company
that is owned in part by senior officers of the Manager and controlled by
Massachusetts Mutual Life Insurance Company, a mutual life insurance
company.
- Portfolio Manager. The Portfolio Manager of the Fund is Eva A.
Zeff. She is an Assistant Vice President of the Manager. She has been the
person principally responsible for the day-to-day management of the Fund's
portfolio since April 1992. During the past five years, Ms. Zeff has also
served as an officer and portfolio manager for other OppenheimerFunds,
prior to which she was a Securities Analyst for the Manager and an
Assistant Portfolio Manager for National Securities and Research Corp.,
an investment adviser.
- Fees and Expenses. Under the Investment Advisory Agreement, the
Fund pays the Manager the following annual fees, which decline on
additional assets as the Fund grows: 0.75% of the first $200 million of
aggregate net assets, 0.70% of the next $200 million, 0.65% of the next
$400 million, and 0.60% of net assets in excess of $800 million. The
Manager has voluntarily reduced the management fee by reducing the rate
at each breakpoint by 0.10%. The Fund's management fee for its last
fiscal year was 0.70% of average annual net assets for both its Class A
and Class B shares, which may be higher than the rate paid by some other
mutual funds.
The Fund pays expenses related to its daily operations, such as
custodian fees, Trustees' fees, transfer agency fees, legal and auditing
costs. Those expenses are paid out of the Fund's assets and are not paid
directly by shareholders. However, those expenses reduce the net asset
value of shares, and therefore are indirectly borne by shareholders
through their investment. More information about the investment advisory
agreement and the other expenses paid by the Fund is contained in the
Statement of Additional Information.
There is also information about the Fund's brokerage policies and
practices in "Brokerage Policies of the Fund" in the Statement of
Additional Information. That section discusses how brokers and dealers are
selected for the Fund's portfolio transactions. When deciding which
brokers to use, the Manager is permitted by the investment advisory
agreement to consider whether brokers have sold shares of the Fund or any
other funds for which the Manager serves as investment adviser.
- The Distributor. The Fund's shares are sold through dealers and
brokers that have a sales agreement with Oppenheimer Funds Distributor,
Inc., a subsidiary of the Manager that acts as the Fund's Distributor.
The Distributor also distributes the shares of other mutual funds managed
by the Manager (the "OppenheimerFunds") and is sub-distributor for funds
managed by a subsidiary of the Manager.
- The Transfer Agent. The Fund's transfer agent is Oppenheimer
Shareholder Services, a division of the Manager, which acts as the
shareholder servicing agent for the Fund and the other OppenheimerFunds
on an "at-cost" basis. Shareholders should direct inquiries about their
accounts to the Transfer Agent at the address and toll-free number shown
below in this Prospectus and on the back cover.
Performance of the Fund
Explanation of Performance Terminology. The Fund uses the terms
"standardized yield," "total return" and "average annual total return" to
illustrate its performance. The performance of each class of shares is
shown separately, because the performance of each class will usually be
different as a result of the different kinds of expenses each class bears.
This performance information may be useful to help you see how well your
investment has done and to compare it to other funds or market indices,
as we have done below.
It is important to understand that the Fund's yields and total
returns represent past performance and should not be considered to be
predictions of future returns or performance. This performance data is
described below, but more detailed information about how total returns are
calculated is contained in the Statement of Additional Information, which
also contains information about other ways to measure and compare the
Fund's performance. The Fund's investment performance will vary over time,
depending on market conditions, the composition of the portfolio, expenses
and which class of shares you purchase.
- Yield. Each Class of shares calculates its yield by dividing the
annualized net investment income per share on the portfolio during a
30-day period by the maximum offering price on the last day of the period.
The yield of each Class will differ because of the different expenses of
each Class of shares. The yield data represents a hypothetical investment
return on the portfolio, and does not measure an investment return based
on dividends actually paid to shareholders. To show that return, a
dividend yield may be calculated. Dividend yield is calculated by
dividing the dividends of a Class derived from net investment income
during a stated period by the maximum offering price on the last day of
the period. Yields and dividend yields for Class A shares reflect the
deduction of the maximum initial sales charge, but may also be shown based
on the Fund's net asset value per share. Yields and dividend yields for
Class B shares do not reflect the deduction of the contingent deferred
sales charge.
- Total Returns. There are different types of total returns used
to measure the Fund's performance. Total return is the change in value
of a hypothetical investment in the Fund over a given period, assuming
that all dividends and capital gains distributions are reinvested in
additional shares. The cumulative total return measures the change in
value over the entire period (for example, ten years). An average annual
total return shows the average rate of return for each year in a period
that would produce the cumulative total return over the entire period.
However, average annual total returns do not show the Fund's actual year-
by-year performance.
When total returns are quoted for Class A shares, they reflect the
payment of the current maximum initial sales charge. When total returns
are shown for Class B shares, they reflect the effect of the contingent
deferred sales charge that applies to the period for which total return
is shown. Total returns may also be quoted "at net asset value," without
considering the effect of the sales charge, and those returns would be
reduced if sales charges were deducted.
How Has the Fund Performed? Below is a discussion by the Manager of the
Fund's performance during its last fiscal year ended September 30, 1994,
followed by a graphical comparison of the Fund's performance to an
appropriate broad-based market index.
- Management's Discussion of Performance. During the past fiscal
year, the Fund's performance was affected by the Federal Reserve's
aggressive moves to raise short-term interest rates. As interest rates
rose, the bond markets declined. The impact on the Fund, however, was
tempered by two factors. First, as interest rates rose, mortgage
prepayments slowed substantially, causing the values of mortgage-backed
securities to stabilize. Second, the Manager emphasized investment in
private label mortgage-backed issues. These securities provide high
yields and are less sensitive to changing interest rates than other types
of mortgage-backed securities. Finally, the Manager decreased the Fund's
"duration", a technical measure of sensitivity to interest rate changes,
which helped limit the impact of higher rates on the Fund.
- Comparing the Fund's Performance to the Market. The chart below
shows the performance of a hypothetical $10,000 investment in each Class
of shares of the Fund held until September 30, 1994. In the case of Class
A shares, performance is measured since the commencement of the Fund's
operations on September 11, 1986, and in the case of Class B shares, since
the public offering of the Class on May 17, 1993. In both cases, all
dividends and capital gains distributions were reinvested in additional
shares. The graph reflects the deduction of the 4.75% current maximum
initial sales charge on Class A shares and the maximum 5% contingent
deferred sales charge on Class B shares.
The Fund's performance is compared to the performance of The Lehman
Aggregate Bond Index and the Lehman Mortgage-Backed Securities Index. The
Lehman Aggregate Bond Index is an unmanaged index of investment grade bond
issues and mortgage-backed securities, and is widely regarded as a measure
of the performance of the general fixed-rate investment grade debt market.
The Lehman Mortgage-Backed Securities Index is an unmanaged index of
fixed-rate securities backed by mortgage pools of the GNMA, FHLMC and a
FNMA and is widely recognized as a measure of the performance of the
mortgage-backed securities market, the market in which the Fund
principally invests. Each index includes a factor for the reinvestment
of interest but does not reflect expenses or taxes. The Fund's return
reflects the deduction of the current maximum sales charge of 4.75% and
includes reinvestment of all dividends and capital gains distributions,
but does not consider taxes.
<PAGE>
Oppenheimer Mortgage Income Fund
Comparison of Change in Value
of a $10,000 Hypothetical Investment to The
Lehman Aggregate Bond Index and
The Lehman Mortgage-Backed Securities Index
(Graph)
Past performance is not predictive of future performance.
Average Annual Total Returns Cumulative Total Return
of the Fund at 9/30/94 of the Fund at 9/30/94
A Shares 1-Year 5-Year Life B Shares 1 Year Life :
(5.51)% 6.70% 6.83% (6.23)% (1.77)%
_____________________
ABOUT YOUR ACCOUNT
How to Buy Shares
Classes of Shares. The Fund offers investors two different classes of
shares. The different classes of shares represent investments in the same
portfolio of securities but are subject to different expenses and will
likely have different share prices.
- Class A Shares. If you buy Class A shares, you pay an initial
sales charge (on investments up to $1 million). If you purchase Class A
shares as part of an investment of at least $1 million in shares of one
or more OppenheimerFunds, you will not pay an initial sales charge but if
you sell any of those shares within 18 months after your purchase, you may
pay a contingent deferred sales charge, which will vary depending on the
amount you invested. Sales charges are described below.
- Class B Shares. If you buy Class B shares, you pay no sales
charge at the time of purchase, but if you sell your shares within six
years, you will normally pay a contingent deferred sales charge that
varies depending on how long you own your shares. It is described
below.
Which Class of Shares Should You Choose? Once you decide that the Fund
is an appropriate investment for you, the decision as to which class of
shares is better suited to your needs depends on a number of factors which
you should discuss with your financial advisor. The Fund's operating
costs that apply to a class of shares and the effect of the different
types of sales charges on your investment will vary your investment
results over time. The most important factors are how much you plan to
invest, how long you plan to hold your investment, and whether you
anticipate exchanging your shares for shares of other OppenheimerFunds
(not all of which currently offer Class B shares). If your goals and
objectives change over time and you plan to purchase additional shares,
you should re-evaluate those factors to see if you should consider another
class of shares.
In the following discussion, to help provide you and your financial
advisor with a framework in which to choose a class, we have made some
assumptions using a hypothetical investment in the Fund. We used the
sales charge rates that apply to Class A and B, considering the effect of
the annual asset-based sales charge on Class B expenses (which, like all
expenses, will affect your investment return). For the sake of
comparison, we have assumed that there is a 10% rate of appreciation in
the investment each year. Of course, the actual performance of your
investment cannot be predicted and will vary, based on the Fund's actual
investment returns and the operating expenses borne by each class of
shares, and which class you invest in. The factors discussed below are
not intended to be investment advice or recommendations, because each
investor's financial considerations are different.
- How Long Do You Expect to Hold Your Investment? The Fund is
designed for long-term investment. While future financial needs cannot
be predicted with certainty, knowing how long you expect to hold your
investment will assist you in selecting the appropriate class of shares.
The effect of the sales charge over time, using our assumptions, will
generally depend on the amount invested. Because of the effect of class-
based expenses, your choice will also depend on how much you invest.
- How Much Do You Plan to Invest? If you plan to invest a
substantial amount over the long term, the reduced sales charges available
for larger purchases of Class A shares may offset the effect of paying an
initial sales charge on your investment (which reduces the amount of your
investment dollars used to buy shares for your account), compared to the
effect over time of higher expenses on Class B, for which no initial sales
charge is paid. Additionally, dividends payable to Class B shareholders
will be reduced by the additional expenses borne solely by Class B, such
as the asset-based sales charge described below.
In general, if you plan to invest less than $100,000, Class B shares
may be more advantageous than Class A shares, using the assumptions in our
hypothetical example. However, if you plan to invest more than $100,000
(not only in the Fund, but possibly in other OppenheimerFunds as well),
then Class A shares generally will be more advantageous than Class B,
because of the effect of the reduction of initial sales charges on larger
purchases of Class A shares (described in "Reduced Sales Charges for Class
A Share Purchases," below). That is also the case because the annual
asset-based sales charge on Class B shares will have a greater impact on
larger investments than the initial sales charge on Class A shares because
of the reductions of initial sales charge available for larger
purchases.
For investors who invest $1 million or more, in most cases Class A
shares will be the most advantageous choice, no matter how long you intend
to hold your shares. For that reason, the Distributor normally will not
accept purchase orders of $1 million or more of Class B shares from a
single investor.
Of course, these examples are based on approximations of the effect
of current sales charges and expenses on a hypothetical investment over
time, using the assumptions stated above. Therefore, these examples
should not be relied on as rigid guidelines.
- Are There Differences in Account Features That Matter to You?
Because some account features may not be available to Class B shareholders
(such as Checkwriting), or other features (such as Automatic Withdrawal
Plans) might not be advisable (because of the effect of the contingent
deferred sales charge) in non-retirement accounts for Class B
shareholders, you should carefully review how you plan to use your
investment account before deciding which class of shares to buy. Also,
because not all OppenheimerFunds currently offer Class B shares, and
because exchanges are permitted only to the same class of shares in other
OppenheimerFunds, you should consider how important the exchange privilege
is likely to be for you.
- How Does It Affect Payments to My Broker? A salesperson, such
as a broker, or any other person who is entitled to receive compensation
for selling Fund shares may receive different compensation for selling one
class than another class. It is important that investors understand that
the purpose of the Class B contingent deferred sales charge and asset-
based sales charge is the same as the purpose of the front-end sales
charge on sales of Class A shares, that is, to compensate the Distributor
for commissions it pays to dealers and financial institutions for selling
shares.
How Much Must You Invest? You can open a Fund account with a minimum
initial investment of $1,000 and make additional investments at any time
with as little as $25. There are reduced minimum investments under special
investment plans:
With Asset Builder Plans, Automatic Exchange Plans, 403(b)(7)
custodial plans and military allotment plans, you can make initial and
subsequent investments of as little as $25; and subsequent purchases of
at least $25 can be made by telephone through AccountLink.
Under pension and profit-sharing plans and Individual Retirement
Accounts (IRAs), you can make an initial investment of as little as $250
(if your IRA is established under an Asset Builder Plan, the $25 minimum
applies), and subsequent investments may be as little as $25.
There is no minimum investment requirement if you are buying
shares by reinvesting dividends from the Fund or other OppenheimerFunds
(a list of them appears in the Statement of Additional Information, or you
can ask your dealer or call the Transfer Agent), or by reinvesting
distributions from unit investment trusts that have made arrangements with
the Distributor.
- How Are Shares Purchased? You can buy shares several ways --
through any dealer, broker or financial institution that has a sales
agreement with the Distributor, or directly through the Distributor, or
automatically through an Asset Builder Plan under the OppenheimerFunds
AccountLink service. When you buy shares, be sure to specify Class A or
Class B shares. If you do not choose, your investment will be made in
Class A shares.
- Buying Shares Through Your Dealer. Your dealer will place your
order with the Distributor on your behalf.
- Buying Shares Through the Distributor. Complete an
OppenheimerFunds New Account Application and return it with a check
payable to "Oppenheimer Funds Distributor, Inc." Mail it to P.O. Box 5270,
Denver, Colorado 80217. If you don't list a dealer on the application,
the Distributor will act as your agent in buying the shares. However, we
recommend that you discuss your investment first with a financial advisor,
to be sure it is appropriate for you.
- Payment by Federal Funds Wire. Shares may be purchased by
Federal Funds wire. The minimum investment is $2,500. You must first
call the Distributor's Wire Department at 1-800-525-7041 to notify the
Distributor of the wire, and to receive further instructions.
- Buying Shares Through OppenheimerFunds AccountLink. You can use
AccountLink to link your Fund account with an account at a U.S. bank or
other financial institution that is an Automated Clearing House (ACH)
member. You can then transmit funds electronically to purchase shares,
to send redemption proceeds, and to transmit dividends and distributions.
Shares are purchased for your account on AccountLink on the regular
business day the Distributor is instructed by you to initiate the ACH
transfer to buy shares. Dividends will begin to accrue on such shares on
the day the Fund receives Federal Funds for such purchase through the ACH
system before the close of The New York Stock Exchange which is normally
three days after the ACH transfer is initiated. If such Federal Funds are
received after that time, dividends will begin to accrue on the next
business day after such Federal Funds are received. You can provide those
instructions automatically, under an Asset Builder Plan, described below,
or by telephone instructions using OppenheimerFunds PhoneLink, also
described below. You should request AccountLink privileges on the
application or dealer settlement instructions used to establish your
account. Please refer to "AccountLink" below for more details.
- Asset Builder Plans. You may purchase shares of the Fund (and up
to four other OppenheimerFunds) automatically each month from your account
at a bank or other financial institution under an Asset Builder Plan with
AccountLink. Details are on the Application and in the Statement of
Additional Information.
- At What Price Are Shares Sold? Shares are sold at the public
offering price based on the net asset value (and any initial sales charge
that applies) that is next determined after the Distributor receives the
purchase order in Denver. In most cases, to enable you to receive that
day's offering price, the Distributor must receive your order by the time
of day The New York Stock Exchange closes, which is normally 4:00 P.M.,
New York time, but may be earlier on some days (all references to time in
this Prospectus mean "New York time"). The net asset value of each class
of shares is determined as of that time on each day The New York Stock
Exchange is open (which is a "regular business day").
If you buy shares through a dealer, the dealer must receive your
order by the close of The New York Stock Exchange, on a regular business
day and transmit it to the Distributor so that it is received before the
Distributor's close of business that day, which is normally 5:00 P.M. The
Distributor may reject any purchase order for the Fund's shares, in its
sole discretion.
Class A Shares. Class A shares are sold at their offering price, which
is normally net asset value plus an initial sales charge. However, in
some cases, described below, purchases are not subject to an initial sales
charge, and the offering price will be the net asset value. In some cases,
reduced sales charges may be available, as described below. Out of the
amount you invest, the Fund receives the net asset value to invest for
your account. The sales charge varies depending on the amount of your
purchase. A portion of the sales charge may be retained by the
Distributor and allocated to your dealer as commission. The current sales
charge rates and commissions paid to dealers and brokers
are as follows:
<PAGE>
Front-End Sales Charge Commission as
As a Percentage of: Percentage of
Amount of Purchase Offering Price Amount Invested Offering Price
_______________________________________________________________________
Less than $50,000 4.75% 4.98% 4.00%
$50,000 or more but
less than $100,000 4.50% 4.71% 3.75%
$100,000 or more but
less than $250,000 3.50% 3.63% 2.75%
$250,000 or more but
less than $500,000 2.50% 2.56% 2.00%
$500,000 or more but
less than $1 million 2.00% 2.04% 1.60%
The Distributor reserves the right to reallow the entire commission to
dealers. If that occurs, the dealer may be considered an "underwriter"
under Federal securities laws.
- Class A Contingent Deferred Sales Charge. There is no initial
sales charge on purchases of Class A shares of any one or more
OppenheimerFunds aggregating $1 million or more. However, the Distributor
pays dealers of record commissions on such purchases in an amount equal
to the sum of 1.0% of the first $2.5 million, plus 0.50% of the next $2.5
million, plus 0.25% of share purchases over $5 million. That commission
will be paid only on the amount of those purchases in excess of $1 million
that were not previously subject to a front-end sales charge and dealer
commission.
If you redeem any of those shares within 18 months of the end of the
calendar month of their purchase, a contingent deferred sales charge
(called the "Class A contingent deferred sales charge") will be deducted
from the redemption proceeds. That sales charge will be equal to 1.0% of
the aggregate net asset value of either (1) the redeemed shares (not
including shares purchased by reinvestment of dividends or capital gain
distributions) or (2) the original cost of the shares, whichever is less.
However, the Class A contingent deferred sales charge will not exceed the
aggregate amount of the commissions the Distributor paid to your dealer
on all Class A shares of all OppenheimerFunds you purchased subject to
the Class A contingent deferred sales charge.
In determining whether a contingent deferred sales charge is
payable, the Fund will first redeem shares that are not subject to the
sales charge, including shares purchased by reinvestment of dividends and
capital gains, and then will redeem other shares in the order that you
purchased them. The Class A contingent deferred sales charge is waived
in certain cases described in "Waivers of Class A Sales Charges" below.
No Class A contingent deferred sales charge is charged on exchanges
of shares under the Fund's Exchange Privilege (described below). However,
if the shares acquired by exchange are redeemed within 18 months of the
end of the calendar month of the purchase of the exchanged shares, the
sales charge will apply.
- Special Arrangements With Dealers. The Distributor may advance
up to 13 months' commissions to dealers that have established special
arrangements with the Distributor for Asset Builder Plans for their
clients. Dealers whose sales of Class A shares of OppenheimerFunds (other
than money market funds) under OppenheimerFunds-sponsored 403(b)(7)
custodial plans exceed $5 million per year (calculated per quarter), will
receive monthly one-half of the Distributor's retained commissions on
those sales, and if those sales exceed $10 million per year, those dealers
will receive the Distributor's entire retained commission on those sales.
Reduced Sales Charges for Class A Share Purchases. You may be eligible
to buy Class A shares at reduced sales charge rates in one or more of the
following ways:
- Right of Accumulation. To qualify for the lower sales charge
rates that apply to larger purchases of Class A shares, you and your
spouse can add together Class A shares you purchase for your individual
accounts, or jointly, or on behalf of your children who are minors, under
trust or custodial accounts. A fiduciary can count all shares purchased
for a trust, estate or other fiduciary account (including one or more
employee benefit plans of the same employer) that has multiple accounts.
Additionally, you can add together current purchases of Class A
shares of the Fund and other OppenheimerFunds. You can also include Class
A shares of OppenheimerFunds you previously purchased subject to a sales
charge, provided that you still hold your investment in one of the
OppenheimerFunds. The value of those shares will be based on the greater
of the amount you paid for the shares or their current value (at offering
price). The OppenheimerFunds are listed in "Reduced Sales Charges" in the
Statement of Additional Information, or a list can be obtained from the
Transfer Agent. The reduced sales charge will apply only to current
purchases and must be requested when you buy your shares.
- Letter of Intent. Under a Letter of Intent, you may purchase
Class A shares of the Fund and other OppenheimerFunds during a 13-month
period at the reduced sales charge rate that applies to the total amount
of the intended purchases. This can include purchases made up to 90 days
before the date of the Letter. More information is contained in the
Application and in "Reduced Sales Charges" in the Statement of Additional
Information.
- Waivers of Class A Sales Charges. No sales charge is imposed on
sales of Class A shares to the following investors: (1) the Manager or its
affiliates; (2) present or former officers, directors, trustees and
employees (and their "immediate families" as defined in "Reduced Sales
Charges" in the Statement of Additional Information) of the Fund, the
Manager and its affiliates, and retirement plans established by them for
their employees; (3) registered management investment companies, or
separate accounts of insurance companies having an agreement with the
Manager or the Distributor for that purpose; (4) dealers or brokers that
have a sales agreement with the Distributor, if they purchase shares for
their own accounts or for retirement plans for their employees; (5)
employees and registered representatives (and their spouses) of dealers
or brokers described above or financial institutions that have entered
into sales arrangements with such dealers or brokers (and are identified
to the Distributor) or with the Distributor; the purchaser must certify
to the Distributor at the time of purchase that the purchase is for the
purchaser's own account (or for the benefit of such employee's spouse or
minor children); (6) dealers, brokers or registered investment advisers
that have entered into an agreement with the Distributor providing
specifically for the use of shares of the Fund in particular investment
products made available to their clients; and (7) dealers, brokers or
registered investment advisers that have entered into an agreement with
the Distributor to sell shares of defined contribution employee retirement
plans for which the dealer, broker or investment adviser provides
administration services.
Additionally, no sales charge is imposed on shares that are (a)
issued in plans of reorganization, such as mergers, asset acquisitions and
exchange offers, to which the Fund is a party, or (b) purchased by the
reinvestment of loan repayments by a participant in a retirement plan for
which the Manager or its affiliates acts as sponsor, (c) purchased by the
reinvestment of dividends or other distributions reinvested from the Fund
or other OppenheimerFunds (other than Oppenheimer Cash Reserves) or unit
investment trusts for which reinvestment arrangements have been made with
the Distributor, or (d) purchased and paid for with the redemption
proceeds of shares of a mutual fund other than a money market fund or
another fund managed by the Manager or any of its affiliates (this waiver
must be requested when you or your dealer places the order for your
shares, and the Distributor may require evidence of qualification for this
waiver). There is a further discussion of this policy in "Reduced Sales
Charges" in the Statement of Additional Information.
The contingent deferred sales charge does not apply to purchases of
Class A shares at net asset value described above and is also waived if
shares are redeemed in the following cases: (1) retirement distributions
or loans to participants or beneficiaries from qualified retirement plans,
deferred compensation plans or other employee benefit plans ("Retirement
Plans"), (2) returns of excess contributions made to Retirement Plans, (3)
Automatic Withdrawal Plan payments that are limited to no more than 12%
of the original account value annually, (4) involuntary redemptions of
shares by operation of law or under the procedures set forth in the Fund's
Declaration of Trust or adopted by the Board of Trustees, and (5) if, at
the time an order is placed for Class A shares that would otherwise be
subject to the Class A contingent deferred sales charge, the dealer in
writing agrees to accept the dealer's portion of the commission payable
on the sale in installments of 1/18th of the commission per month (with
no further commission payable if the shares are redeemed within 18 months
of purchase).
- Service Plan for Class A Shares. The Fund has adopted a Service
Plan for Class A shares to reimburse the Distributor for a portion of its
costs incurred in connection with the personal service and maintenance of
accounts that hold Class A shares. Reimbursement is made quarterly at an
annual rate that may not exceed 0.25% of the average annual net assets of
Class A shares of the Fund. The Distributor uses all of those fees to
compensate dealers, brokers, banks and other financial institutions
quarterly for providing personal service and maintenance of accounts of
their customers that hold Class A shares and to reimburse itself (if the
Fund's Board of Trustees authorizes such reimbursements, which it has not
yet done) for its other expenditures under the Plan.
Services to be provided include, among others, answering customer
inquiries about the Fund, assisting in establishing and maintaining
accounts in the Fund, making the Fund's investment plans available and
providing other services at the request of the Fund or the Distributor.
Payments are made by the Distributor quarterly at an annual rate not to
exceed 0.25% of the average annual net assets of Class A shares held in
accounts of the dealer or its customers.
The Class A Plan has the effect of increasing annual expenses of
Class A shares of the Fund by up to 0.25% of the class's average annual
net assets from what the expenses would otherwise be.
Class B Shares. Class B shares are sold at net asset value per share
without an initial sales charge. However, if Class B shares are redeemed
within 6 years of their purchase, a contingent deferred sales charge will
be deducted from the redemption proceeds. That sales charge will not
apply to shares purchased by the reinvestment of dividends or capital
gains distributions. The charge will be assessed on the lesser of the net
asset value of the shares at the time of redemption or the original
purchase price. The contingent deferred sales charge is not imposed on the
amount of your account value represented by the increase in net asset
value over the initial purchase price (including increases due to the
reinvestment of dividends and capital gains distributions). The Class B
contingent deferred sales charge is paid to the Distributor to reimburse
its expenses of providing distribution-related services to the Fund in
connection with the sale of Class B shares.
To determine whether the contingent deferred sales charge applies
to a redemption, the Fund redeems shares in the following order: (1)
shares acquired by reinvestment of dividends and capital gains
distributions, (2) shares held for over 6 years, and (3) shares held the
longest during the 6-year period.
The amount of the contingent deferred sales charge will depend on
the number of years since you invested and the dollar amount being
redeemed, according to the following schedule:
Contingent Deferred Sales Charge
Years Since Beginning of Month In on Redemptions in that Year
Which Purchase Order Was Accepted (As % of Amount Subject to Charge)
0 - 1 5.0%
1 - 2 4.0%
2 - 3 3.0%
3 - 4 3.0%
4 - 5 2.0%
5 - 6 1.0%
6 and following None
In the table, a "year" is a 12-month period. All purchases are
considered to have been made on the first regular business day of the
month in which the purchase was made.
- Waivers of Class B Sales Charge. The Class B contingent deferred
sales charge will be waived if the shareholder requests it for any of the
following redemptions: (1) distributions to participants or beneficiaries
from Retirement Plans, if the distributions are made (a) under an
Automatic Withdrawal Plan after the participant reaches age 59-1/2, as
long as the payments are no more than 10% of the account value annually
(measured from the date the Transfer Agent receives the request), or (b)
following the death or disability (as defined in the Internal Revenue
Code) of the participant or beneficiary; (2) redemptions from accounts
other than Retirement Plans following the death or disability of the
shareholder (the death or disability must have occurred after the account
was established, and for disability you must provide evidence of a
determination of disability by the Social Security Administration), (3)
returns of excess contributions to Retirement Plans, and (4) distributions
from IRAs (including SEP-IRAs and SAR/SEP accounts) before the participant
is age 591/2, and distributions from 403(b)(7) custodial plans or pension
or profit sharing plans before the participant is age 591/2 but only after
the participant has separated from service, if the distributions are made
in substantially equal periodic payments over the life (or life
expectancy) of the participant or the joint lives (or joint life and last
survivor expectancy) of the participant and the participant's designated
beneficiary (and the distributions must comply with other requirements for
such distributions under the Internal Revenue Code and may not exceed 10%
of the account value annually, measured from the date the Transfer Agent
receives the request).
The contingent deferred sales charge is also waived on Class B
shares in the following cases: (i) shares sold to the Manager or its
affiliates; (ii) shares sold to registered management investment companies
or separate accounts of insurance companies having an agreement with the
Manager or the Distributor for that purpose; (iii) shares issued in plans
of reorganization to which the Fund is a party; and (iv) shares redeemed
in involuntary redemptions as described below. Further details about this
policy are contained in "Reduced Sales Charges" in the Statement of
Additional Information.
- Automatic Conversion of Class B Shares. 72 months after you
purchase Class B shares, those shares will automatically convert to Class
A shares. This conversion feature relieves Class B shareholders of the
asset-based sales charge that applies to Class B shares under the Class
B Distribution and Service Plan, described below. The conversion is based
on the relative net asset value of the two classes, and no sales load or
other charge is imposed. When Class B shares convert, any other Class B
shares that were acquired by the reinvestment of dividends and
distributions on the converted shares will also convert to Class A shares.
The conversion feature is subject to the continued availability of a tax
ruling described in "Alternative Sales Arrangements - Class A and Class
B Shares" in the Statement of Additional Information.
- Distribution and Service Plan for Class B Shares. The Fund has
adopted a Distribution and Service Plan for Class B shares to compensate
the Distributor for its services and costs in distributing Class B shares
and servicing accounts. Under the Plan, the Fund pays the Distributor an
annual "asset-based sales charge" of 0.75% per year on Class B shares that
are outstanding for 6 years or less. The Distributor also receives a
service fee of 0.25% per year. Both fees are computed on the average
annual net assets of Class B shares, determined as of the close of each
regular business day. The asset-based sales charge allows investors to buy
Class B shares without a front-end sales charge while allowing the
Distributor to compensate dealers that sell Class B shares.
The Distributor uses the service fee to compensate dealers for
providing personal services for accounts that hold Class B shares. Those
services are similar to those provided under the Class A Service Plan,
described above. The asset-based sales charge and service fees increase
Class B expenses by up to 1.00% of average net assets per year.
The Distributor pays the 0.25% service fee to dealers in advance
for the first year after Class B shares have been sold by the dealer.
After the shares have been held for a year, the Distributor pays the fee
on a quarterly basis. The Distributor pays sales commissions of 3.75% of
the purchase price to dealers from its own resources at the time of sale.
The Distributor retains the asset-based sales charge to recoup the sales
commissions it pays, the advances of service fee payments it makes, and
its financing costs.
The Distributor's actual expenses in selling Class B shares may be
more than the payments it receives from contingent deferred sales charges
collected on redeemed shares and from the Fund under the Distribution and
Service Plan for Class B shares. Therefore, those expenses may be carried
over and paid in future years. At September 30, 1994, the end of the Plan
year, the Distributor had incurred unreimbursed expenses under the Plan
of $136,845 (equal to 5.03% of the Fund's net assets represented by Class
B shares on that date), which have been carried over into the present Plan
year. If the Plan is terminated by the Fund, the Board of Trustees may
allow the Fund to continue payments of the asset-based sales charge to the
Distributor for expenses it incurred before the Plan was terminated.
Special Investor Services
AccountLink. OppenheimerFunds AccountLink links your Fund account to
your account at your bank or other financial institution to enable you to
send money electronically between those accounts to perform a number of
types of account transactions. These include purchases of shares by
telephone (either through a service representative or by PhoneLink,
described below), automatic investments under Asset Builder Plans, and
sending dividends and distributions or Automatic Withdrawal Plan payments
directly to your bank account. Please refer to the Application for details
or call the Transfer Agent for more information.
AccountLink privileges must be requested on the Application you use
to buy shares, or on your dealer's settlement instructions if you buy your
shares through your dealer. After your account is established, you can
request AccountLink privileges by sending signature-guaranteed
instructions to the Transfer Agent. AccountLink privileges will apply to
each shareholder listed in the registration on your account as well as to
your dealer representative of record unless and until the Transfer Agent
receives written instructions terminating or changing those privileges.
After you establish AccountLink for your account, any change of bank
account information must be made by signature-guaranteed instructions to
the Transfer Agent signed by all shareholders who own the account.
- Using AccountLink to Buy Shares. Purchases may be made by
telephone only after your account has been established. To purchase shares
in amounts up to $250,000 through a telephone representative, call the
Distributor at 1-800-852-8457. The purchase payment will be debited from
your bank account.
- PhoneLink. PhoneLink is the OppenheimerFunds automated telephone
system that enables shareholders to perform a number of account
transactions automatically using a touch-tone phone. PhoneLink may be used
on already-established Fund accounts after you obtain a Personal
Identification Number (PIN), by calling the special PhoneLink number: 1-
800-533-3310.
- Purchasing Shares. You may purchase shares in amounts up to
$100,000 by phone, by calling 1-800-533-3310. You must have established
AccountLink privileges to link your bank account with the Fund, to pay for
these purchases.
- Exchanging Shares. With the OppenheimerFunds Exchange Privilege,
described below, you can exchange shares automatically by phone from your
Fund account to another OppenheimerFunds account you have already
established by calling the special PhoneLink number. Please refer to "How
to Exchange Shares," below, for details.
- Selling Shares. You can redeem shares by telephone automatically
by calling the PhoneLink number and the Fund will send the proceeds
directly to your AccountLink bank account. Please refer to "How to Sell
Shares," below, for details.
Automatic Withdrawal and Exchange Plans. The Fund has several plans
that enable you to sell shares automatically or exchange them to another
OppenheimerFunds account on a regular basis:
- Automatic Withdrawal Plans. If your Fund account is worth $5,000
or more, you can establish an Automatic Withdrawal Plan to receive
payments of at least $50 on a monthly, quarterly, semi-annual or annual
basis. The checks may be sent to you or sent automatically to your bank
account on AccountLink. You may even set up certain types of withdrawals
of up to $1,500 per month by telephone. You should consult the
Application and Statement of Additional Information for more details.
- Automatic Exchange Plans. You can authorize the Transfer Agent
automatically to exchange an amount you establish in advance for shares
of up to five other OppenheimerFunds on a monthly, quarterly, semi-annual
or annual basis under an Automatic Exchange Plan. The minimum purchase
for each OppenheimerFunds account is $25. These exchanges are subject to
the terms of the Exchange Privilege, described below.
Reinvestment Privilege. If you redeem some or all of your Fund shares,
you have up to 6 months to reinvest all or part of the redemption proceeds
in Class A shares of the Fund or other OppenheimerFunds without paying a
sales charge. This privilege applies to Fund shares that you purchased
with an initial sales charge. It also applies to shares on which you paid
a contingent deferred sales charge when you redeemed them. You must be
sure to ask the Distributor for this privilege when you send your payment.
Please consult the Statement of Additional Information for more
details.
Retirement Plans. Fund shares are available as an investment for your
retirement plans. If you participate in a plan sponsored by your employer,
the plan trustee or administrator must make the purchase of shares for
your retirement plan account. The Distributor offers a number of different
retirement plans that can be used by individuals and employers:
- Individual Retirement Accounts including rollover IRAs, for
individuals and their spouses
- 403(b)(7) Custodial Plans for employees of eligible tax-exempt
organizations, such as schools, hospitals and charitable organizations
- SEP-IRAs (Simplified Employee Pension Plans) for small
business owners or people with income from self-employment, including
SAR/SEP-IRAs
- Pension and Profit-Sharing Plans for self-employed persons and
other employers
Please call the Distributor for the OppenheimerFunds plan documents,
which contain important information and applications.
<PAGE>
How to Sell Shares
You can arrange to take money out of your account on any regular
business day by selling (redeeming) some or all of your shares. Your
shares will be sold at the next net asset value calculated after your
order is received and accepted by the Transfer Agent. The Fund offers you
a number of ways to sell your shares: in writing, by using the Fund's
checkwriting privilege, by wire or by telephone. You can also set up
Automatic Withdrawal Plans to redeem shares on a regular basis, as
described above. If you have questions about any of these procedures, and
especially if you are redeeming shares in a special situation, such as due
to the death of the owner, or from a retirement plan, please call the
Transfer Agent first, at 1-800-525-7048, for assistance.
- Retirement Accounts. To sell shares in an OppenheimerFunds
retirement account in your name, call the Transfer Agent for a
distribution request form. There are special income tax withholding
requirements for distributions from retirement plans and you must submit
a withholding form with your request to avoid delay. If your retirement
plan account is held for you by your employer, you must arrange for the
distribution request to be sent by the plan administrator or trustee.
There are additional details in the Statement of Additional
Information.
- Certain Requests Require a Signature Guarantee. To protect you
and the Fund from fraud, certain redemption requests must be in writing
and must include a signature guarantee in the following situations (there
may be other situations also requiring a signature guarantee):
- You wish to redeem more than $50,000 worth of shares and receive
a check
- A redemption check is not payable to all shareholders listed
on the account statement
- A redemption check is not sent to the address of record on
your statement
- Shares are being transferred to a Fund account with a
different owner or name
- Shares are redeemed by someone other than the owners (such as
an Executor)
- Where Can I Have My Signature Guaranteed? The Transfer Agent
will accept a guarantee of your signature by a number of financial
institutions, including: a U.S. bank, trust company, credit union or
savings association, or by a foreign bank that has a U.S. correspondent
bank, or by a U.S. registered dealer or broker in securities, municipal
securities or government securities, or by a U.S. national securities
exchange, a registered securities association or a clearing agency. If you
are signing on behalf of a corporation, partnership or other business, or
as a fiduciary, you must also include your title in the signature.
Selling Shares by Mail. Write a "letter of instructions" that
includes:
- Your name
- The Fund's name
- Your Fund account number (from your statement)
- The dollar amount or number of shares to be redeemed
- Any special payment instructions
- Any share certificates for the shares you are selling, and
- Any special requirements or documents requested by the
Transfer Agent to assure proper authorization of the person
asking to sell shares.
Use the following address for requests by mail:
Send courier or Express Mail requests to:
Oppenheimer Shareholder Services Oppenheimer Shareholder Services
P.O. Box 5270, Denver, Colorado 80217 10200 E. Girard Avenue, Building D
Denver, Colorado 80231
Selling Shares by Telephone. You and your dealer representative of
record may also sell your shares by telephone. To receive the redemption
price on a regular business day, your call must be received by the
Transfer Agent by the close of The New York Stock Exchange that day, which
is normally 4:00 P.M., but may be earlier on some days. You may not
redeem shares held in an OppenheimerFunds retirement plan or under a share
certificate by telephone.
- To redeem shares through a service representative, call 1-800-
852-8457
- To redeem shares automatically on PhoneLink, call 1-800-533-3310
Whichever method you use, you may have a check sent to the address
on the account statement, or, if you have linked your Fund account to your
bank account on AccountLink, you may have the proceeds wired to that bank
account.
- Telephone Redemptions Paid by Check. Up to $50,000 may be
redeemed by telephone, once in any 7-day period. The check must be
payable to all owners of record of the shares and must be sent to the
address on the account statement. This service is not available within
30 days of changing the address on an account.
- Telephone Redemptions Through AccountLink. There are no dollar
limits on telephone redemption proceeds sent to a bank account designated
when you establish AccountLink. Normally the ACH wire to your bank is
initiated on the business day after the redemption. You do not receive
dividends on the proceeds of the shares you redeemed while they are
waiting to be wired.
Selling Shares Through Your Dealer. The Distributor has made
arrangements to repurchase Fund shares from dealers and brokers on behalf
of their customers. Brokers or dealers may charge for that service.
Please refer to "Special Arrangements for Repurchase of Shares from
Dealers and Brokers" in the Statement of Additional Information for more
details.
Selling Shares by Wire. You may request that redemption proceeds of
$2,500 or more be wired to a previously designated account at a commercial
bank that is a member of the Federal Reserve wire system. The wire will
normally be transmitted on the next bank business day after the redemption
of shares. To place a wire redemption request, call the Transfer Agent
at 1-800-525-7048. There is a $15 fee for each wire.
Checkwriting. To be able to write checks against your Fund account,
you may request that privilege on your account Application or you can
contact the Transfer Agent for signature cards, which must be signed (with
a signature guarantee) by all owners of the account and returned to the
Transfer Agent so that checks can be sent to you to use. Shareholders with
joint accounts can elect in writing to have checks paid over the signature
of one owner.
- Checks can be written to the order of whomever you wish, but may
not be cashed at the Fund's bank or custodian.
- Checkwriting privileges are not available for accounts holding
Class B shares or Class A shares that are subject to a contingent deferred
sales charge.
- Checks must be written for at least $100.
- Checks cannot be paid if they are written for more than your
account value.
Remember: your shares fluctuate in value and you should not write
a check close to the total account value.
- You may not write a check that would require the Fund to redeem
shares that were purchased by check or Asset Builder Plan payments within
the prior 10 days.
- Don't use your checks if you changed your Fund account number.
The Fund will charge a $10 fee for any check that is not paid
because (1) the owners of the account told the Fund not to pay the check,
or (2) the check was for more than the account balance, or (3) the check
did not have the proper signatures, or (4) the check was written for less
than $100.
How to Exchange Shares
Shares of the Fund may be exchanged for shares of certain
OppenheimerFunds at net asset value per share at the time of exchange,
without sales charge. A $5 service fee will be deducted from the fund
account you are exchanging into to help defray administrative costs. That
charge is waived for automated exchanges made by brokers on Fund/SERV and
for automated exchanges between already established accounts on PhoneLink
described below. To exchange shares, you must meet several conditions:
- Shares of the fund selected for exchange must be available for
sale in your state of residence
- The prospectuses of this Fund and the fund whose shares you want
to buy must offer the exchange privilege
- You must hold the shares you buy when you establish your account
for at least 7 days before you can exchange them; after the account is
open 7 days, you can exchange shares every regular business day
- You must meet the minimum purchase requirements for the fund you
purchase by exchange
- Before exchanging into a fund, you should obtain and read its
prospectus
Shares of a particular class may be exchanged only for shares of the
same class in the other OppenheimerFunds. For example, you can exchange
Class A shares of this Fund only for Class A shares of another fund. At
present, not all of the OppenheimerFunds offer the same classes of shares.
If a fund has only one class of shares that does not have a class
designation, they are "Class A" shares for exchange purposes. Certain
OppenheimerFunds offer Class A shares and Class B or Class C shares, and
a list can be obtained by calling the Distributor at 1-800-525-7048. In
some cases, sales charges may be imposed on exchange transactions. Please
refer to "How to Exchange Shares" in the Statement of Additional
Information for more details.
Exchanges may be requested in writing or by telephone:
- Written Exchange Requests. Submit an OppenheimerFunds Exchange
Request form, signed by all owners of the account. Send it to the
Transfer Agent at the addresses listed in "How to Sell Shares."
- Telephone Exchange Requests. Telephone exchange requests may be
made either by calling a service representative at 1-800-852-8457 or by
using PhoneLink for automated exchanges, by calling 1-800-533-3310.
Telephone exchanges may be made only between accounts that are registered
with the same name(s) and address. Shares held under certificates may not
be exchanged by telephone.
You can find a list of OppenheimerFunds currently available for
exchanges in the Statement of Additional Information or obtain one by
calling a service representative at 1-800-525-7048. Exchanges of shares
involve a redemption of the shares of the fund you own and a purchase of
shares of the other fund.
There are certain exchange policies you should be aware of:
- Shares are normally redeemed from one fund and purchased from the
other fund in the exchange transaction on the same regular business day
on which the Transfer Agent receives an exchange request that is in proper
form by the close of The New York Stock Exchange that day, which is
normally 4:00 P.M. but may be earlier on some days. However, either fund
may delay the purchase of shares of the fund you are exchanging into if
it determines it would be disadvantaged by a same-day transfer of the
proceeds to buy shares. For example, the receipt of multiple exchange
requests from a dealer in a "market-timing" strategy might require the
disposition of portfolio securities at a time or price disadvantageous to
the Fund.
- Because excessive trading can hurt fund performance and harm
shareholders, the Fund reserves the right to refuse any exchange request
that will disadvantage it, or to refuse multiple exchange requests
submitted by a shareholder or dealer.
- The Fund may amend, suspend or terminate the exchange privilege
at any time. Although the Fund will attempt to provide you notice
whenever it is reasonably able to do so, it may impose these changes at
any time.
- If the Transfer Agent cannot exchange all the shares you request
because of a restriction cited above, only the shares eligible for
exchange will be exchanged.
Shareholder Account Rules and Policies
- Net Asset Value Per Share is determined for each class of shares
as of the close of The New York Stock Exchange on each regular business
day by dividing the value of the Fund's net assets attributable to a class
by the number of shares of that class that are outstanding. The Fund's
Board of Trustees has established procedures to value the Fund's
securities to determine net asset value. In general, securities values
are based on market value. There are special procedures for valuing
illiquid and restricted securities, obligations for which market values
cannot be readily obtained, and call options and hedging instruments.
These procedures are described more completely in the Statement of
Additional Information.
- The offering of shares may be suspended during any period in
which the determination of net asset value is suspended, and the offering
may be suspended by the Board of Trustees at any time the Board believes
it is in the Fund's best interest to do so.
- Telephone Transaction Privileges for purchases, redemptions or
exchanges may be modified, suspended or terminated by the Fund at any
time. If an account has more than one owner, the Fund and the Transfer
Agent may rely on the instructions of any one owner. Telephone privileges
apply to each owner of the account and the dealer representative of record
for the account unless and until the Transfer Agent receives cancellation
instructions from an owner of the account.
- The Transfer Agent will record any telephone calls to verify data
concerning transactions and has adopted other procedures to confirm that
telephone instructions are genuine, by requiring callers to provide tax
identification numbers and other account data or by using PINs, and by
confirming such transactions in writing. If the Transfer Agent does not
use reasonable procedures, it may be liable for losses due to unauthorized
transactions, but otherwise neither the Transfer Agent nor the Fund will
not be liable for losses or expenses arising out of telephone instructions
reasonably believed to be genuine. If you are unable to reach the
Transfer Agent during periods of unusual market activity, you may not be
able to complete a telephone transaction and should consider placing your
order by mail.
- Redemption or transfer requests will not be honored until the
Transfer Agent receives all required documents in proper form. From time
to time, the Transfer Agent in its discretion may waive certain of the
requirements for redemptions stated in this Prospectus.
- Dealers that can perform account transactions for their clients
by participating in NETWORKING through the National Securities Clearing
Corporation are responsible for obtaining their clients' permission to
perform those transactions and are responsible to their clients who are
shareholders of the Fund if the dealer performs any transaction
erroneously or improperly.
- The redemption price for shares will vary from day to day because
the value of the securities in the Fund's portfolio fluctuates, and the
redemption price, which is the net asset value per share, will normally
be different for Class A and Class B shares. Therefore, the redemption
value of your shares may be more or less than their original cost.
- Payment for redeemed shares is made ordinarily in cash and
forwarded by check or through AccountLink (as elected by the shareholder
under the redemption procedures described above) within 7 days after the
Transfer Agent receives redemption instructions in proper form, except
under unusual circumstances determined by the Securities and Exchange
Commission delaying or suspending such payments. The Transfer Agent may
delay forwarding a check or processing a payment via AccountLink for
recently purchased shares, but only until the purchase payment has
cleared. That delay may be as much as 10 days from the date the shares
were purchased. That delay may be avoided if you purchase shares by
certified check or arrange with your bank to provide telephone or written
assurance to the Transfer Agent that your purchase payment has
cleared.
- Involuntary redemptions of small accounts may be made by the Fund
if the account value has fallen below $200 for reasons other than the fact
that the market value of shares has dropped, and in some cases involuntary
redemptions may be made to repay the Distributor for losses from the
cancellation of share purchase orders.
- Under unusual circumstances, shares of the Fund may be redeemed
"in kind," which means that the redemption proceeds will be paid with
securities from the Fund's portfolio. Please refer to "How to Sell
Shares" in the Statement of Additional Information for more details.
- "Backup Withholding" of Federal income tax may be applied at the
rate of 31% from dividends, distributions and redemption proceeds
(including exchanges) if you fail to furnish the Fund a certified Social
Security or Employer Identification Number when you sign your application,
or if you violate Internal Revenue Service regulations on tax reporting
of income.
- The Fund does not charge a redemption fee, but if your dealer or
broker handles your redemption, they may charge a fee. That fee can be
avoided by redeeming your Fund shares directly through the Transfer Agent.
Under the circumstances described in "How To Buy Shares," you may be
subject to a contingent deferred sales charges when redeeming certain
Class A and Class B shares.
- To avoid sending duplicate copies of materials to households, the
Fund will mail only one copy of each annual and semi-annual report to
shareholders having the same surname and address on the Fund's records.
However, each shareholder may call the Transfer Agent at 1-800-525-7048
to ask that copies of those materials be sent personally to that
shareholder.
Dividends, Capital Gains and Taxes
Dividends. The Fund declares dividends separately for Class A and Class
B shares from net investment income, if any, on each regular business day.
Daily dividends accrued since the prior dividend payment will normally be
paid to shareholders on or about the last business day of the month (or
such other day as the Board may determine). It is expected that
distributions paid with respect to Class A shares will generally be higher
than for Class B shares because expenses allocable to Class B shares will
generally be higher.
The Fund's dividends and distributions may also be subject to state
and local taxes. Interest from securities issued by the U.S. Government
may be exempt from income taxation by some state and local governments,
although interest from obligations which are merely guaranteed by the U.S.
Government or one of its agencies (such as Ginnie Mae) may not be entitled
to this exclusion, and will therefore be separately identified when tax
information is made available by the Fund. Further information is
contained in the Statement of Additional Information.
Capital Gains. The Fund may make distributions annually in December out
of any net short-term or long-term capital gains, and the Fund may make
supplemental distributions of dividends and capital gains following the
end of its fiscal year. Long-term capital gains will be separately
identified in the tax information the Fund sends you after the end of the
year. Short-term capital gains are treated as dividends for tax purposes.
There can be no assurance that the Fund will pay any capital gains
distributions in a particular year.
Distribution Options. When you open your account, specify on your
application how you want to receive your distributions. For
OppenheimerFunds retirement accounts, all distributions are reinvested.
For other accounts, you have four options:
- Reinvest All Distributions in the Fund. You can elect to reinvest
all dividends and long-term capital gains distributions in additional
shares of the Fund.
- Reinvest Long-Term Capital Gains Only. You can elect to reinvest
long-term capital gains in the Fund while receiving dividends by check or
sent to your bank account on AccountLink.
- Receive All Distributions in Cash. You can elect to receive a
check for all dividends and long-term capital gains distributions or have
them sent to your bank on AccountLink.
- Reinvest Your Distributions in Another OppenheimerFunds Account.
You can reinvest all distributions in another OppenheimerFunds account you
have established.
Taxes. If your account is not a tax-deferred retirement account, you
should be aware of the following tax implications of investing in the
Fund. Long-term capital gains are taxable as long-term capital gains when
distributed to shareholders. It does not matter how long you held your
shares. Dividends paid from short-term capital gains and net investment
income are taxable as ordinary income. Distributions are subject to
federal income tax and may be subject to state or local taxes. Since the
Fund's income is expected to be derived from interest rather than
dividends, dividends paid by the Fund are not expected to be eligible for
the dividends-received deduction for corporations. Your distributions are
taxable when paid, whether you reinvest them in additional shares or take
them in cash. Every year the Fund will send you and the IRS a statement
showing the amount of each taxable distribution you received in the
previous year.
- "Buying a Dividend": When a fund goes ex-dividend, its share
price is reduced by the amount of the distribution. If you buy shares on
or just before the ex-dividend date, or just before the Fund declares a
capital gains distribution, you will pay the full price for the shares and
then receive a portion of the price back as a taxable dividend or capital
gain.
- Taxes on Transactions: Share redemptions, including redemptions
for exchanges, are subject to capital gains tax. A capital gain or loss
is the difference between the price you paid for the shares and the price
you received when you sold them.
- Returns of Capital: In certain cases distributions made by the
Fund may be considered a non-taxable return of capital to shareholders.
If that occurs, it will be identified in notices to shareholders. A non-
taxable return of capital may reduce your tax basis in your Fund
shares.
This information is only a summary of certain federal tax
information about your investment. More information is contained in the
Statement of Additional Information, and in addition you should consult
with your tax adviser about the effect of an investment in the Fund on
your particular tax situation.
<PAGE>
APPENDIX TO PROSPECTUS OF
OPPENHEIMER MORTGAGE INCOME FUND
Graphic material included in Prospectus of Oppenheimer Mortgage
Income Fund: "Comparison of Total Return of Oppenheimer Mortgage Income
Fund with The Lehman Aggregate Bond Index and The Lehman Mortgage-Backed
Securities Index - Change in Value of a $10,000 Hypothetical
Investment"
A linear graph will be included in the Prospectus of Oppenheimer
Mortgage Income Fund (the "Fund") depicting the initial account value and
subsequent account value of a hypothetical $10,000 investment in (i) Class
A shares of the Fund during each of the Fund's fiscal years since the
commencement of the Fund's operations (September 11, 1986) and (ii) Class
B shares of the Fund since the first public offering of Class B shares on
May 17, 1993 to September 30, 1994, in each case comparing such values
with the same investments over the same time periods with The Lehman
Aggregate Bond Index and The Lehman Mortgage-Backed Securities Index. Set
forth below are the relevant data points that will appear on the linear
graph. Additional information with respect to the foregoing, including
a description of The Lehman Aggregate Bond Index and The Lehman Mortgage-
Backed Securities Index, is set forth in the Prospectus under "How has the
Fund Performed- Management's Discussion of Performance."
Class A shares
Fiscal Year Oppenheimer Lehman Aggregate Lehman Mortgage-
(Period) Ended Mortgage Income Bond Index Backed Securities
Fund Index
09/11/86* $ 9,525 $10,000 $10,000
09/30/86 $ 9,592(1) $10,006 $ 9,901
09/30/87 $ 9,675 $10,033 $10,144
09/30/88 $10,844 $11,367 $11,631
09/30/89 $11,725 $12,647 $12,923
09/30/90 $12,806 $13,604 $14,175
09/30/91 $14,451 $15,779 $16,487
09/30/92 $15,996 $17,759 $18,289
09/30/93 $17,161 $19,531 $19,504
09/30/94 $17,024 $18,902 $19,282
Class B shares
Fiscal Oppenheimer Lehman Aggregate Lehman Mortgage-
Period Ended Mortgage Income Bond Index Backed Securities
Fund Index
5/17/93 $10,000 $10,000 $10,000
9/30/93 $10,247(2) $10,447 $10,173
09/30/94 $9,758 $10,111 $10,057
_____________________________
* The Fund commenced operations on September 11, 1986.
(1) From commencement of operations (9/11/86) to 9/30/86.
(2) From commencement of first public offering of Class B shares
(5/17/93) to 9/30/93.
<PAGE>
Oppenheimer Mortgage Income Fund
Two World Trade Center
New York, New York 10048-0203
1-800-525-7048
Investment Advisor
Oppenheimer Management Corporation
Two World Trade Center
New York, New York 10048-0203
Distributor
Oppenheimer Funds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203 OPPENHEIMER
Mortgage Income Fund
Transfer Agent
Oppenheimer Shareholder Services
P.O. Box 5270
Denver, Colorado 80217 Prospectus and New
1-800-525-7048 Account Application
Effective January 24,1995
Custodian of Portfolio Securities
Citibank, N.A.
399 Park Avenue
New York, New York 10043
Independent Auditors
KPMG Peat Marwick LLP
707 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Gordon Altman Butowsky
Weitzen Shalov & Wein
114 West 47th Street
New York, New York 10036
No dealer, broker, salesperson or any other person has been authorized to
give any information or to make any representations other than those
contained in this Prospectus or the Statement of Additional Information,
and if given or made, such information and representations must not be
relied upon as having been authorized by the Fund, Oppenheimer Management
Corporation, Oppenheimer Funds Distributor, Inc. or any affiliate thereof.
This Prospectus does not constitute an offer to sell or a solicitation of
an offer to buy any of the securities offered hereby in any state to any
person to whom it is unlawful to make such an offer in such state.
PR491 (1/95) * Printed on Recycled Paper OppenheimerFunds Logo
<PAGE>
Oppenheimer Mortgage Income Fund
Two World Trade Center
New York, New York 10048-0203
1-800-525-7048
Investment Advisor
Oppenheimer Management Corporation
Two World Trade Center
New York, New York 10048-0203
Distributor
Oppenheimer Funds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203 OPPENHEIMER
Mortgage Income Fund
Transfer Agent
Oppenheimer Shareholder Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048 Prospectus
Effective January 24, 1995
Custodian of Portfolio Securities
Citibank, N.A.
399 Park Avenue
New York, New York 10043
Independent Auditors
KPMG Peat Marwick LLP
707 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Gordon Altman Butowsky
Weitzen Shalov & Wein
114 West 47th Street
New York, New York 10036
No dealer, broker, salesperson or any other person has been authorized to
give any information or to make any representations other than those
contained in this Prospectus or the Statement of Additional Information,
and if given or made, such information and representations must not be
relied upon as having been authorized by the Fund, Oppenheimer Management
Corporation, Oppenheimer Funds Distributor, Inc. or any affiliate thereof.
This Prospectus does not constitute an offer to sell or a solicitation of
an offer to buy any of the securities offered hereby in any state to any
person to whom it is unlawful to make such an offer in such state.
PR491 (1/95) * Printed on Recycled Paper OppenheimerFunds Logo
<PAGE>
Oppenheimer Mortgage Income Fund
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
Statement Of Additional Information dated January 24, 1995
This Statement of Additional Information is not a Prospectus. This
document contains additional information about the Fund and supplements
information in the Prospectus dated January 24, 1995. It should be read
together with the Prospectus which may be obtained by writing to the
Fund's Transfer Agent, Oppenheimer Shareholder Services, at P.O. Box 5270,
Denver, Colorado 80217 or by calling the Transfer Agent at the toll-free
number shown above.
TABLE OF CONTENTS
Page
About the Fund
Investment Objective and Policies 2
Other Investment Techniques and Strategies 4
Other Investment Restrictions 12
How the Fund is Managed 13
Organization and History 13
Trustees and Officers of the Fund 13
The Manager and Its Affiliates 18
Brokerage Policies of the Fund 19
Performance of the Fund 20
Distribution and Service Plans 24
About Your Account 26
How to Buy Shares 26
How to Sell Shares 32
How to Exchange Shares 36
Dividends, Capital Gains and Taxes 39
Additional Information About the Fund 39
Financial Information About the Fund 40
Independent Auditors' Report 40
Financial Statements 41
Appendix A A-1
<PAGE>
ABOUT THE FUND
Investment Objective And Policies
Investment Policies and Strategies. The investment objective and policies
of the Fund are described in the Prospectus. Supplemental information
about those policies is set forth below. Certain capitalized terms used
in this Additional Statement and not otherwise defined herein are defined
in the Prospectus.
- Asset Backed Securities. The value of an asset-backed security is
affected by changes in the market's perception of the asset backing the
security, the creditworthiness of the servicing agent for the loan pool,
the originator of the loans, or the financial institution providing any
credit enhancement, and is also affected if any credit enhancement has
been exhausted. The risks of investing in asset-backed securities are
ultimately dependent upon payment of consumer loans by the individuals.
As a purchaser of an asset-backed security, the Fund would generally have
no recourse to the entity that originated the loans in the event of
default by a borrower. The underlying loans are subject to prepayments,
which shorten the weighted average life of asset-backed securities and may
lower their return in the same manner as described below for prepayments
of a pool of mortgage loans underlying mortgage-backed securities.
- Mortgage-Backed Securities. These securities represent
participation interests in pools of residential mortgage loans which may
or may not be guaranteed by agencies or instrumentalities of the U.S.
Government. Such securities differ from conventional debt securities
which generally provide for periodic payment of interest in fixed or
determinable amounts (usually semi-annually) with principal payments at
maturity or specified call dates. The mortgage-backed securities in which
the Fund may invest may be backed by the full faith and credit of the U.S.
Treasury (e.g., direct pass-through certificates of Government National
Mortgage Association); some are supported by the right of the issuer to
borrow from the U.S. Government (e.g., obligations of Federal Home Loan
Mortgage Corporation); and some are backed by only the credit of the
issuer itself. Those guarantees do not extend to the value of or yield
of the mortgage-backed securities themselves or to the net asset value of
the Fund's shares. Any of those government agencies may also issue
collateralized mortgage-backed obligations ("CMO's"), discussed below.
The yield on mortgage-backed securities is based on the average
expected life of the underlying pool of mortgage loans. The actual life
of any particular pool will be shortened by any unscheduled or early
payments of principal and interest. Principal prepayments generally
result from the sale of the underlying property or the refinancing or
foreclosure of underlying mortgages. The occurrence of prepayments is
affected by a wide range of economic, demographic and social factors and,
accordingly, it is not possible to predict accurately the average life of
a particular pool. Yield on such pools is usually computed by using the
historical record of prepayments for that pool, or, in the case of newly-
issued mortgages, the prepayment history of similar pools. The actual
prepayment experience of a pool of mortgage loans may cause the yield
realized by the Fund to differ from the yield calculated on the basis of
the expected average life of the pool.
Prepayments tend to increase during periods of falling interest rates,
while during periods of rising interest rates prepayments will most likely
decline. When prevailing interest rates rise, the value of a pass-through
security may decrease as do the values of other debt securities, but, when
prevailing interest rates decline, the value of a pass-through security
may not be as likely to rise to the extent that the values of other debt
securities rise, because of the prepayment feature of pass-through
securities. The Fund's reinvestment of scheduled principal payments and
unscheduled prepayments it receives may occur at times when available
investments offer higher or lower rates than the original investment, thus
affecting the yield of the Fund. Monthly interest payments received by
the Fund have a compounding effect which may increase the yield to the
Fund more than debt obligations that pay interest semi-annually. Because
of those factors, mortgage-backed securities may be less effective than
Treasury bonds of similar maturity at maintaining yields during periods
of declining interest rates. The Fund may purchase mortgage-backed
securities at par or at a premium or a discount. Accelerated prepayments
adversely affect yields for pass-through securities purchased at a premium
(i.e., at a price in excess of their principal amount) and may involve
additional risk of loss of principal because the premium may not have been
fully amortized at the time the obligation is repaid. The opposite is
true for pass-through securities purchased at a discount.
The Fund may invest in "stripped" mortgage backed securities, in which
the principal and interest portions of the security are separated and
sold. Stripped mortgage-backed securities usually have at least two
classes each of which receives different proportions of interest and
principal distributions on the underlying pool of mortgage assets. One
common variety of stripped mortgage-backed security has one class that
receives some of the interest and most of the principal, while the other
class receives most of the interest and remainder of the principal. In
some cases, one class will receive all of the interest (the "interest-
only" or "IO" class), while the other class will receive all of the
principal (the "principal-only" or "PO" class). Interest only securities
are extremely sensitive to interest rate changes, and prepayments of
principal on the underlying mortgage assets. An increase in principal
payments or prepayments will reduce the income available to the IO
security. In other types of CMOs, the underlying principal payments may
apply to various classes in a particular order, and therefore the value
of certain classes or "tranches" of such securities may be more volatile
than the value of the pool as a whole, and losses may be more severe than
on other classes.
- Collateralized Mortgage-Backed Obligations ("CMOs"). CMOs are
fully-collateralized bonds that are the general obligations of the issuer
thereof, either the U.S. Government, a U.S. Government instrumentality,
or a private issuer. Such bonds generally are secured by an assignment
to a trustee (under the indenture pursuant to which the bonds are issued)
of collateral consisting of a pool of mortgages. Payments with respect
to the underlying mortgages generally are made to the trustee under the
indenture. Payments of principal and interest on the underlying mortgages
are not passed through to the holders of the CMOs as such (i.e., the
character of payments of principal and interest is not passed through, and
therefore payments to holders of CMOs attributable to interest paid and
principal repaid on the underlying mortgages do not necessarily constitute
income and return of capital, respectively, to such holders), but such
payments are dedicated to payment of interest on and repayment of
principal of the CMOs. CMOs often are issued in two or more classes with
different characteristics such as varying maturities and stated rates of
interest. Because interest and principal payments on the underlying
mortgages are not passed through to holders of CMOs, CMOs of varying
maturities may be secured by the same pool of mortgages, the payments on
which are used to pay interest on each class and to retire successive
maturities in sequence. Unlike other mortgage-backed securities
(discussed above), CMOs are designed to be retired as the underlying
mortgages are repaid. In the event of prepayment on such mortgages, the
class of CMO first to mature generally will be paid down. Therefore,
although in most cases the issuer of CMOs will not supply additional
collateral in the event of such prepayment, there will be sufficient
collateral to secure CMOs that remain outstanding.
- Whole Loan and Participation Mortgages. Title to whole loan and
participation mortgages in which the Fund may invest may be held in the
name of, and enforcement rights may be assigned to, third parties, such
as trustees or lead lenders. The Fund cannot assure the adequacy of such
third parties to protect the Fund's interests, nor that claims may not be
asserted against any such parties that might interfere with enforcement
of the Fund's rights. In addition, claims, such as environmental claims,
may be assessed against the Fund on account of its position as mortgage
holder. Costs and delays may be involved in the effectuation of a
foreclosure, and the proceeds after payment of expenses may not satisfy
the entire outstanding balance of principal and interest. As a result,
while whole loan and participation mortgages generally will have a higher
yield than mortgage-backed securities, holders of such interests may bear
a greater risk of loss arising from a default on the part of the borrower
of the underlying loans than do holders of mortgage-backed securities.
The Fund may also invest in adjustable rate mortgage-related securities
("ARMS"), including classes of derivative CMO's, the rate of interest
payable under which varies with a designated rate or index. Because ARM's
are frequently issued subject to maximum adjustments during a particular
period or during the life of the loan, the mortgage holder may not realize
all of the benefit of any particularly rapid or steep increase in interest
rates that occurs while the loan is outstanding.
- Loan Participation Interests. The Fund may invest in participation
interests, subject to the limitation, described in "Illiquid and
Restricted Securities" in the Prospectus, on investments by the Fund in
illiquid investments. Participation interests represent an undivided
interest in or assignment of a loan made by the issuing financial
institution. No more than 5% of the Fund's net assets can be invested in
participation interests of the same issuing bank. Participation interests
are primarily dependent upon the financial strength of the borrowing
entity, which is obligated to make payments of principal and interest on
the loan, and there is a risk that such borrowers may have difficulty
making payments. Such borrowers may have senior securities rated as low
as "C" by Moody's or "D" by Standard & Poor's. In the event the borrower
fails to pay scheduled interest or principal payments, the Fund could
experience a reduction in its income and might experience a decline in the
net asset value of its shares. In the event of a failure by the financial
institution to perform its obligation in connection with the participation
agreement, the Fund might incur certain costs and delays in realizing
payment or may suffer a loss of principal and/or interest. The Manager
has set certain creditworthiness standards for issuers of loan
participations and monitors their creditworthiness.
Other Investment Techniques and Strategies.
- Repurchase Agreements. The Fund may acquire securities subject to
repurchase agreements for liquidity purposes to meet anticipated
redemptions, or pending the investment of the proceeds from sales of Fund
shares, or pending the settlement of purchases of portfolio
securities.
In a repurchase transaction, the Fund acquires a security from, and
simultaneously resells it to, an approved vendor. An "approved vendor"
is a U.S. commercial bank or the U.S. branch of a foreign bank or a
broker-dealer which has been designated a primary dealer in government
securities, which must meet credit requirements set by the Fund's Board
of Trustees from time to time. The resale price exceeds the purchase
price by an amount that reflects an agreed-upon interest rate effective
for the period during which the repurchase agreement is in effect. The
majority of these transactions run from day to day, and delivery pursuant
to the resale typically will occur within one to five days of the
purchase. Repurchase agreements are considered "loans" under the
Investment Company Act of 1940, collateralized by the underlying security.
The Fund's repurchase agreements require that at all times while the
repurchase agreement is in effect, the value of the collateral must equal
or exceed the repurchase price to fully collateralize the repayment
obligation. Additionally, the Management will impose creditworthiness
requirements to confirm that the vendor is financially sound and will
continuously monitor the collateral's value.
- "When-Issued" and Delayed Delivery Transactions. The Fund may
purchase securities on a "when-issued" basis, and may purchase or sell
such securities on a "delayed delivery" basis. Although the Fund will
enter into such transactions for the purpose of acquiring securities for
its portfolio or for delivery pursuant to options contracts it has entered
into, the Fund may dispose of a commitment prior to settlement. "When-
issued" or "delayed delivery" refers to securities whose terms and
indenture are available and for which a market exists, but which are not
available for immediate delivery. When such transactions are negotiated
the price (which is generally expressed in yield terms) is fixed at the
time the commitment is made, but delivery and payment for the securities
take place at a later date. The Fund does not intend to make such
purchases for speculative purposes. The commitment to purchase a security
for which payment will be made on a future date may be deemed a separate
security and involve a risk of loss if the value of the security declines
prior to the settlement date. During the period between commitment by the
Fund and settlement (generally within two months but not to exceed 120
days), no payment is made for the securities purchased by the purchaser,
and no interest accrues to the purchaser from the transaction. Such
securities are subject to market fluctuation; the value at delivery may
be less than the purchase price. The Fund will maintain a segregated
account with its Custodian, consisting of cash, U.S. Government securities
or other high grade debt obligations at least equal to the value of
purchase commitments until payment is made.
The Fund will engage in when-issued transactions in order to secure
what is considered to be an advantageous price and yield at the time of
entering into the obligation. When the Fund engages in when-issued or
delayed delivery transactions, it relies on the buyer or seller, as the
case may be, to consummate the transaction. Failure of the buyer or
seller to do so may result in the Fund losing the opportunity to obtain
a price and yield considered to be advantageous. At the time the Fund
makes a commitment to purchase or sell a security on a when-issued or
forward commitment basis, it records the transaction and reflects the
value of the securities purchased, or if a sale, the proceeds to be
received, in determining its net asset value. If the Fund chooses to (i)
dispose of the right to acquire a when-issued security prior to its
acquisition or (ii) dispose of its right to deliver or receive payment
against a forward commitment, it may incur a gain or loss.
To the extent the Fund engages in when-issued and delayed delivery
transactions, it will do so for the purpose of acquiring or selling
securities consistent with its investment objective and policies and not
for the purposes of investment leverage. The Fund enters into such
transactions only with the intention of actually receiving or delivering
the securities, although (as noted above), when-issued securities and
forward commitments may be sold prior to settlement date. In addition,
changes in interest rates in a direction other than that expected by the
Manager before settlement will affect the value of such securities and may
cause loss to the Fund.
When-issued transactions and forward commitments allow the Fund a
technique to use against anticipated changes in interest rates and prices.
For instance, in periods of rising interest rates and falling prices, the
Fund might sell securities in its portfolio on a forward commitment basis
to attempt to limit its exposure to anticipated falling prices. In
periods of falling interest rates and rising prices, the Fund might sell
portfolio securities and purchase the same or similar securities on a
when-issued or forward commitment basis, thereby obtaining the benefit of
currently higher cash yields.
- Restricted and Illiquid Securities. To enable the Fund to sell
restricted securities not registered under the Securities Act of 1933, the
Fund may have to cause those securities to be registered. The expenses
of registration of restricted securities may be negotiated by the Fund
with the issuer at the time such securities are purchased by the Fund,
if such registration is required before such securities may be sold
publicly. When registration must be arranged because the Fund wishes to
sell the security, a considerable period may elapse between the time the
decision is made to sell the securities and the time the Fund would be
permitted to sell them. The Fund would bear the risks of any downward
price fluctuation during that period. The Fund may also acquire, through
private placements, securities having contractual restrictions on their
resale, which might limit the Fund's ability to dispose of such securities
and might lower the amount realizable upon the sale of such securities.
The Fund has percentage limitations that apply to purchases of
restricted securities, as stated in the Prospectus. Those percentage
restrictions do not limit purchases of restricted securities that are
eligible for sale to qualified institutional purchasers pursuant to Rule
144A under the Securities Act of 1933, provided that those securities have
been determined to be liquid by the Board of Trustees of the Fund or by
the Manager under Board-approved guidelines. Those guidelines take into
account the trading activity for such securities and the availability of
reliable pricing information, among other factors. If there is a lack of
trading interest in a particular Rule 144A security, the Fund's holding
of that security may be deemed to be illiquid.
- Loans of Portfolio Securities. The Fund may lend its portfolio
securities subject to the restrictions stated in the Prospectus. Under
applicable regulatory requirements (which are subject to change), the loan
collateral on each business day must, at least equal the market value of
the loaned securities and must consist of cash, bank letters of credit or
securities of the U.S. Government (or its agencies or instrumentalities).
To be acceptable as collateral, letters of credit must obligate a bank to
pay amounts demanded by the Fund if the demand meets the terms of the
letter. Such terms of the letter and the issuing bank must be
satisfactory to the Fund. When it lends securities, the Fund receives
amounts equal to the interest paid or the dividends declared on the loaned
securities and also receives one or more of (a) negotiated loan fees, (b)
interest on securities used as collateral, and (c) interest on short-term
debt securities purchased with such loan collateral. Either type of
interest may be shared with the borrower. The Fund may also pay
reasonable finders', custodian or administrative fees. The terms of the
Fund's loans must meet applicable tests under the Internal Revenue Code
and permit the Fund to reacquire loaned securities on five business days'
notice or in time to vote on any important matter.
- Writing Covered Calls. As described in the Prospectus, the Fund may
write covered calls. When the Fund writes a call on an investment, it
receives a premium and agrees to sell the callable investment to a
purchaser of a corresponding call during the call period (usually not more
than 9 months) at a fixed exercise price (which may differ from the market
price of the underlying investment) regardless of market price changes
during the call period. To terminate its obligation on a call it has
written, the Fund may purchase a corresponding call in a "closing
purchase transaction." A profit or loss will be realized, depending upon
whether the net of the amount of option transaction costs and the premium
received on the call the Fund has written is more or less than the price
of the call the Fund subsequently purchased. A profit may also be
realized if the call lapses unexercised, because the Fund retains the
underlying investment and the premium received. Those profits are
considered short-term capital gains for Federal income tax purposes, as
are premiums on lapsed calls, and when distributed by the Fund are taxable
as ordinary income. If the Fund could not effect a closing purchase
transaction due to the lack of a market, it would have to hold the
callable investment until the call lapsed or was exercised.
The Fund may also write calls on Interest Rate Futures without owning
a futures contract or deliverable securities, provided that at the time
the call is written, the Fund covers the call by segregating in escrow an
equivalent dollar value of deliverable securities or liquid assets. The
Fund will segregate additional liquid assets if the value of the escrowed
assets drops below 100% of the current value of the Interest Rate Futures.
In no circumstances would an exercise notice require the Fund to deliver
a futures contract; it would simply put the Fund in a short futures
position, which is permitted by the Fund's hedging policies.
The Fund's Custodian, or a securities depository acting for the
Custodian, will act as the Fund's escrow agent, through the facilities of
the Options Clearing Corporation ("OCC"), as to the investments on which
the Fund has written options that are traded on exchanges, or as to other
acceptable escrow securities, so that no margin will be required from the
Fund for such option transactions. OCC will release the securities
covering a call on the expiration of the call or when the Fund enters into
a closing purchase transaction. Call writing affects the Fund's turnover
rate and the brokerage commissions it pays. Commissions, normally higher
than on general securities transactions, are payable on writing or
purchasing a call.
- Hedging With Options and Futures Contracts. The Fund may use hedging
instruments for the purposes described in the Prospectus. When hedging to
attempt to protect against declines in the market value of the Fund's
portfolio, or to permit the Fund to retain unrealized gains in the value
of portfolio securities which have appreciated, or to facilitate selling
securities for investment reasons, the Fund may: (i) sell Interest Rate
Futures, (ii) buy puts or such Futures or debt securities, or (iii) write
covered calls on debt securities or on Interest Rate Futures. When
hedging to attempt to protect against the possibility that the portfolio
securities are not fully included in a rise in value of the bond market,
the Fund may: (i) buy Interest Rate Futures, or (ii) buy calls on such
Futures or debt securities held by it.
The Fund's strategy of hedging with Futures and options on Futures
will be incidental to the Fund's investment activities in the underlying
cash market. In the future, the Fund may employ hedging instruments and
strategies that are not presently contemplated but which may be developed,
to the extent such investment methods are consistent with the Fund's
investment objective, and are legally permissible and disclosed in the
Prospectus. Additional information about the hedging instruments the Fund
may use is provided below.
- Interest Rate Futures. The Fund may buy Futures relating to debt
securities ("Interest Rate Futures"). An Interest Rate Future obligates
the seller to deliver and the purchaser to take a specific type of debt
security at a specific future date for a fixed price to settle the futures
transaction, or to enter into an offsetting contract. No monetary amount
is paid or received by the Fund on the purchase of an Interest Rate
Future.
Upon entering into a Futures transaction, the Fund will be required
to deposit an initial margin payment, in cash or U.S. Treasury bills, with
the futures commission merchant (the "futures broker"). Initial margin
payments will be deposited with the Fund's Custodian in an account
registered in the futures broker's name; however, the futures broker can
gain access to that account only under certain specified conditions. As
the Future is marked to market (that is, its value on the Fund's books is
changed) to reflect changes in its market value, subsequent margin
payments, called variation margin, will be paid to or by the futures
broker on a daily basis.
At any time prior to the expiration of the Future, the Fund may elect
to close out its position by taking an opposite position, at which time
a final determination of variation margin is made and additional cash is
required to be paid by or released to the Fund. Any gain or loss is then
realized by the Fund on the Future for tax purposes. Although Interest
Rate Futures call for the delivery of a specific debt security, in most
cases the settlement obligation is fulfilled without such delivery by
entering into an offsetting transaction. All Futures transactions are
effected through a clearing house associated with the exchange on which
the contracts are traded.
- Purchasing Puts and Calls. The Fund may purchase calls to protect
against the possibility that the Fund's portfolio will not participate in
an anticipated rise in the securities market. When the Fund purchases a
call, it pays a premium (other than in a closing purchase transaction)
and, except as to calls on stock indices, has the right to buy the
underlying investment from a seller of a corresponding call on the same
investment during the call period at a fixed exercise price. In
purchasing a call, the Fund benefits only if the call is sold at a profit
or if, during the call period, the market price of the underlying
investment is above the sum of the call price, transaction costs, and the
premium paid, and the call is exercised. If the call is not exercised or
sold (whether or not at a profit), it will become worthless at its
expiration date and the Fund will lose its premium payment and the right
to purchase the underlying investment.
When the Fund purchases a put, it pays a premium and has the right to
sell the underlying investment to a seller of a corresponding put on the
same investment during the put period at a fixed exercise price. Buying
a put on an investment the Fund owns (a "protective put") enables the Fund
to attempt to protect itself during the put period against a decline in
the value of the underlying investment below the exercise price by selling
the underlying investment at the exercise price to a seller of a
corresponding put. If the market price of the underlying investment is
equal to or above the exercise price and as a result the put is not
exercised or resold, the put will become worthless at its expiration and
the Fund will lose the premium payment and the right to sell the
underlying investment. However, the put may be sold prior to expiration
(whether or not at a profit).
Purchasing either a put on Interest Rate Futures or on debt securities
it does not own permits the Fund either to resell the put or to buy the
underlying investment and sell it at the exercise price. The resale price
of the put will vary inversely with the price of the underlying
investment. If the market price of the underlying investment is above the
exercise price, and as a result the put is not exercised, the put will
become worthless on the expiration date. In the event of a decline in
price of the underlying investment, the Fund could exercise or sell the
put at a profit to attempt to offset some or all of its loss on its
portfolio securities. When the Fund purchases a put on an Interest rate
Future or debt security not held by it, the put protects the Fund to the
extent that the prices of the underlying Future or debt securities move
in a similar pattern of the debt securities in the Fund's portfolio.
The Fund's option activities may affect its portfolio turnover rate
and brokerage commissions. The exercise of calls written by the Fund may
cause the Fund to sell related portfolio securities, thus increasing its
turnover rate. The exercise by the Fund of puts on securities will cause
the sale of underlying investments, increasing portfolio turnover.
Although the decision whether to exercise a put it holds is within the
Fund's control, holding a put might cause the Fund to sell the related
investments for reasons that would not exist in the absence of the put.
The Fund will pay a brokerage commission each time it buys or sells a
call, put or an underlying investment in connection with the exercise of
a put or call. Those commissions may be higher than the commissions for
direct purchases or sales of the underlying investments.
Premiums paid for options are small in relation to the market value
of the underlying investments and, consequently, put and call options
offer large amounts of leverage. The leverage offered by trading in
options could result in the Fund's net asset value being more sensitive
to changes in the value of the underlying investments.
- Writing Put Options. The Fund may write put options on debt
securities. A put option gives the purchaser the right to sell, and the
writer the obligation to buy, the underlying investment at the exercise
price during the option period. Writing a put covered by segregated
liquid assets equal to the exercise price of the put has the same economic
effect to the Fund as writing a covered call. The premium the Fund
receives from writing a put option represents a profit, as long as the
price of the underlying investment remains above the exercise price.
However, the Fund has also assumed the obligation during the option period
to buy the underlying investment from the buyer of the put at the exercise
price, even though the value of the investment may fall below the exercise
price. If the put expires unexercised, the Fund (as the writer) realizes
a gain in the amount of the premium. If the put is exercised, the Fund
must fulfill its obligation to purchase the underlying investment at the
exercise price, which will usually exceed the market value of the
investment at that time. In that case, the Fund may incur a loss, equal
to the sum of the sale price of the underlying investment and the premium
received minus the sum of the exercise price and any transaction costs
incurred.
When writing put options, to secure its obligation to pay for the
underlying security, the Fund will deposit in escrow liquid assets with
a value equal to or greater than the exercise price of the underlying
securities. The Fund therefore forgoes the opportunity of investing the
segregated assets or writing calls against those assets. As long as the
obligation of the Fund as the put writer continues, it may be assigned an
exercise notice by the broker-dealer through whom such option was sold,
requiring the Fund to take delivery of the underlying investment against
payment of the exercise price. The Fund has no control over when it may
be required to purchase the underlying investment, since it may be
assigned an exercise notice at any time prior to the termination of its
obligation as the writer of the put. This obligation terminates upon
expiration of the put, or such earlier time at which the Fund effects a
closing purchase transaction by purchasing a put of the same series as
that previously sold. Once the Fund has been assigned an exercise notice,
it is thereafter not allowed to effect a closing purchase transaction.
The Fund may effect a closing purchase transaction to realize a profit
on an outstanding put option it has written or to prevent an underlying
security from being put. Furthermore, effecting such a closing purchase
transaction will permit the Fund to write another put option to the extent
that the exercise price thereof is secured by the deposited assets, or to
utilize the proceeds from the sale of such assets for other investments
by the Fund. The Fund will realize a profit or loss from a closing
purchase transaction if the cost of the transaction is less or more than
the premium received from writing the option. As above for writing
covered calls, any and all such profits described herein from writing puts
are considered short-term gains for Federal tax purposes, and when
distributed by the Fund, are taxable as ordinary income.
- Interest Rate Swap Transactions. Swap agreements entail both
interest rate risk and credit risk. There is a risk that, based on
movements of interest rates in the future, the payments made by the Fund
under a swap agreement will have been greater than those received by it.
Credit risk arises from the possibility that the counterparty will
default. If the counterparty to an interest rate swap defaults, the
Fund's loss will consist of the net amount of contractual interest
payments that the Fund has not yet received. The Manager will monitor the
creditworthiness of counterparties to the Fund's interest rate swap
transactions on an ongoing basis. The Fund will enter into swap
transactions with appropriate counterparties pursuant to master netting
agreements.
A master netting agreement provides that all swaps done between the
Fund and that counterparty under the master agreement shall be regarded
as parts of an integral agreement. If on any date amounts are payable in
the same currency in respect of one or more swap transactions, the net
amount payable on that date in that currency shall be paid. In addition,
the master netting agreement may provide that if one party defaults
generally or on one swap, the counterparty may terminate the swaps with
that party. Under such agreements, if there is a default resulting in a
loss to one part, the measure of that part's damages is calculated by
reference to the average cost of a replacement swap with respect to each
swap (i.e., the mark-to-market value at the time of the termination of
each swap). The gains and losses on all swaps are then netted, and the
result is the counterparty's gain or loss on termination. The termination
of all swaps and the netting of gains and losses on termination is
generally referred to as "aggregation." The Fund will not invest more
than 25% of its assets in interest rate swap transactions.
- Regulatory Aspects of Hedging Instruments. The Fund is required to
operate within certain guidelines and restrictions with respect to its use
of Futures and options on Futures established by the Commodity Futures
Trading Commission ("CFTC"). In particular the Fund is exempted from
registration with the CFTC as a "commodity pool operator" if the Fund
complies with the requirements of Rule 4.5 adopted by the CFTC. The Rule
does not limit the percentage of the Fund's assets that may be used for
Futures margin and related options premiums for a bona fide hedging
position. However, under the Rule the Fund must limit its aggregate
initial futures margin and related option premiums to no more than 5% of
the Fund's net assets for hedging strategies that are not considered bona
fide hedging strategies under the Rule. Under the Rule, the Fund also
must use short Futures and Futures options positions solely for "bona fide
hedging purposes" within the meaning and intent of the applicable
provisions of the Commodity Exchange Act.
Transactions in options by the Fund are subject to limitations
established by option exchanges governing the maximum number of options
that may be written or held by a single investor or group of investors
acting in concert, regardless of whether the options were written or
purchased on the same or different exchanges or are held in one or more
accounts or through one or more different exchanges or through one or more
brokers. Thus the number of options which the Fund may write or hold may
be affected by options written or held by other entities, including other
investment companies having the same adviser as the Fund (or an adviser
that is an affiliate of the Fund's adviser). The exchanges also impose
position limits on Futures transactions. An exchange may order the
liquidation of positions found to be in violation of those limits and may
impose certain other sanctions.
Due to requirements under the Investment Company Act, when the Fund
purchases a Future, the Fund will maintain, in a segregated account or
accounts with its Custodian, cash or readily-marketable, short-term
(maturing in one year or less) debt instruments in an amount equal to the
market value of the securities underlying such Future, less the margin
deposit applicable to it.
- Tax Aspects of Covered Calls and Hedging Instruments. The Fund
intends to qualify as a "regulated investment company" under the Internal
Revenue Code (although it reserves the right not to qualify). That
qualification enables the Fund to "pass through" its income and realized
capital gains to shareholders without having to pay tax on them. This
avoids a "double tax" on that income and capital gains, since shareholders
normally will be taxed on the dividends and capital gains they receive
from the Fund (unless the Fund's shares are held in a retirement account
or the shareholder is otherwise exempt from tax). One of the tests for
the Fund's qualification as a regulated investment company is that less
than 30% of its gross income must be derived from gains realized on the
sale of securities held for less than three months. To comply with this
30% cap, the Fund will limit the extent to which it engages in the
following activities, but will not be precluded from them: (i) selling
investments, including Interest Rate Futures, held for less than three
months, whether or not they were purchased on the exercise of a call held
by the Fund; (ii) purchasing options which expire in less than three
months; (iii) effecting closing transactions with respect to calls or puts
written or purchased less than three months previously; (iv) exercising
puts or calls held by the Fund for less than three months; or (v) writing
calls on investments held less than three months.
- Risks of Hedging With Options and Futures. An option position may
be closed out only on a market that provides secondary trading for options
of the same series, and there is no assurance that a liquid secondary
market will exist for any particular option. In addition to the risks
associated with hedging that are discussed in the Prospectus and above,
there is a risk in using short hedging by selling Interest Rate Futures
to attempt to protect against declines in the value of the Fund's
portfolio securities (due to an increase in interest rates) that the
prices of Interest Rate Futures will correlate imperfectly with the
behavior of cash (i.e. market value) price of the Fund's securities. The
ordinary spreads between prices in the cash and futures markets are
subject to distortions, due to differences in the natures of those
markets. First, all participants in the futures markets are subject to
margin deposit and maintenance requirements. Rather than meeting
additional margin deposit requirements, investors may close out futures
contracts through offsetting transactions which could distort the normal
relationship between the cash and futures markets. Second, the liquidity
of the futures markets depends on participants entering into offsetting
transactions rather than making or taking delivery. To the extent
participants decide to make or take delivery, liquidity in the futures
markets could be reduced, thus producing distortion. Third, from the
point of view of speculators, the deposit requirements in the futures
markets are less onerous than margin requirements in the securities
markets. Therefore, increased participation by speculators in the futures
markets may cause temporary price distortions.
If the Fund uses hedging instruments to establish a position in the
debt securities markets as a temporary substitute for the purchase of
individual debt securities (long hedging) by buying Interest Rate Futures
and/or calls on such Futures or on debt securities, it is possible that
the market may decline. If the Fund then concludes not to invest in such
securities at that time because of concerns as to a possible further
market decline or for other reasons, the Fund will realize a loss on the
hedging instruments that is not offset by a reduction in the price of the
equity securities purchased.
Other Investment Restrictions
The Fund's significant investment restrictions are described in the
Prospectus. There are additional investment restrictions that the Fund
must follow which are also fundamental policies. Fundamental policies and
the Fund's investment objective cannot be changed without the vote of a
"majority" of the Fund's outstanding voting securities. Under the
Investment Company Act, such a "majority" vote is defined as the vote of
the holders of the lesser of: (i) 67% or more of the shares present or
represented by proxy at a shareholder meeting, if the holders of more than
50% of the outstanding shares are present, or (ii) more than 50% of the
outstanding shares.
Under these additional restrictions, the Fund cannot: (1) invest in
commodities or commodity contracts or invest in interests in oil, gas, or
other mineral exploration or development programs; however, the Fund may
use Hedging Instruments approved by the Board whether or not such Hedging
Instruments are considered commodities or commodity contracts; (2) invest
in real estate or in interests in real estate, but may purchase readily-
marketable securities of issuers holding real estate or interests therein;
(3) purchase securities on margin or make short sales of securities;
however, the Fund may make margin deposits in connection with its use of
Hedging Instruments approved by the Board; (4) underwrite securities of
other companies, except insofar as it might be deemed to be an underwriter
for purposes of the Securities Act in the resale of any securities held
in its own portfolio; or (5) invest or hold securities of any issuer if
those officers, trustees and directors of the Fund and its investment
adviser owning individually more than .5% of the securities of such issuer
together own more than 5% of the securities of such issuer.
The Fund has undertaken, in connection with the qualification for sale
of its shares in certain states, (i) with respect to investment
restriction (1) above, not to invest in oil, gas or mineral leases, (ii)
with respect to investment restriction (2) above, not to invest in real
property, including real estate limited partnerships interests, and (iii)
not to invest more than 5% of its net assets in warrants; no more than 2%
of the Fund's net assets may be invested in warrants not listed on the New
York Stock Exchange or the American Stock Exchange. Should its shares no
longer be offered in such states, the Fund would not be subject to the
foregoing undertakings.
For purposes of the Fund's policy not to concentrate described under
investment restriction number 6 of the Prospectus, the Fund has adopted
the Industry Classifications set forth in Appendix A to this Statement of
Additional Information.
How the Fund Is Managed
Organization and History. As a Massachusetts business trust, the Fund
is not required to hold, and does not plan to hold, regular annual
meetings of shareholders. The Fund will hold meetings when required to do
so by the Investment Company Act or other applicable law, or when a
shareholder meeting is called by the Trustees or upon proper request of
the shareholders. Shareholders have the right, upon the declaration in
writing or vote of two-thirds of the outstanding shares of the Fund, to
remove a Trustee. The Trustees will call a meeting of shareholders to
vote on the removal of a Trustee upon the written request of the record
holders of 10% of its outstanding shares. In addition, if the Trustees
receive a request from at least 10 shareholders (who have been
shareholders for at least six months) holding shares of the Fund valued
at $25,000 or more or holding at least 1% of the Fund's outstanding
shares, whichever is less, stating that they wish to communicate with
other shareholders to request a meeting to remove a Trustee, the Trustees
will then either make the Fund's shareholder list available to the
applicants or mail their communication to all other shareholders at the
applicants' expense, or the Trustees may take such other action as set
forth under Section 16(c) of the Investment Company Act.
The Fund's Declaration of Trust contains an express disclaimer of
shareholder or Trustee liability for the Fund's obligations, and provides
for indemnification and reimbursement of expenses out of its property for
any shareholder held personally liable for its obligations. The
Declaration of Trust also provides that the Fund shall, upon request,
assume the defense of any claim made against any shareholder for any act
or obligation of the Fund and satisfy any judgment thereon. Thus, while
Massachusetts law permits a shareholder of a business trust (such as the
Fund) to be held personally liable as a "partner" under certain
circumstances, the risk of a Fund shareholder incurring financial loss on
account of shareholder liability is limited to the relatively remote
circumstances in which the Fund would be unable to meet its obligations
described above. Any person doing business with the Trust, and any
shareholder of the Trust, agrees under the Trust's Declaration of Trust
to look solely to the assets of the Trust for satisfaction of any claim
or demand which may arise out of any dealings with the Trust, and the
Trustees shall have no personal liability to any such person, to the
extent permitted by law.
Trustees and Officers of the Fund. The Fund's Trustees and officers and
their principal occupations and business affiliations during the past five
years are listed below. The address of each Trustee and officer is Two
World Trade Center, New York, New York 10048-0203, unless another address
is listed below. All of the Trustees are also trustees of Oppenheimer
Fund, Oppenheimer Global Fund, Oppenheimer Time Fund, Oppenheimer Growth
Fund, Oppenheimer Target Fund, Oppenheimer Discovery Fund, Oppenheimer
Global Growth & Income Fund, Oppenheimer Global Emerging Growth Fund,
Oppenheimer Gold & Special Minerals Fund, Oppenheimer Tax-Free Bond Fund,
Oppenheimer New York Tax-Exempt Fund, Oppenheimer California Tax-Exempt
Fund, Oppenheimer Multi-State Tax-Exempt Trust, Oppenheimer Asset
Allocation Fund, Oppenheimer U.S. Government Trust, Oppenheimer Multi-
Sector Income Trust and Oppenheimer Multi-Government Trust (the "New York-
based OppenheimerFunds"). Messrs. Spiro, Bishop, Bowen, Donohue, Farrar
and Zack respectively hold the same offices with the other New York-based
OppenheimerFunds as with the Fund. As of December 30, 1994, the Trustees
and officers of the Fund as a group owned of record or beneficially less
than 1% of each class of shares of the Fund. The foregoing does not
include shares held of record by an employee benefit plan for employees
of the Manager (for which plan one of the officers listed above, Mr.
Donohue, is a trustee), other than the shares beneficially owned under
that plan by the officers of the Fund listed above.
Leon Levy, Chairman of the Board of Trustees; Age 64.
General Partner of Odyssey Partners, L.P. (investment partnership)
and Chairman of Avatar Holdings, Inc. (real estate development).
Leo Cherne, Trustee; Age 82.
122 East 42nd Street, New York, New York 10168
Chairman Emeritus of the International Rescue Committee
(philanthropic organization); formerly Executive Director of The
Research Institute of America.
Robert G. Galli, Trustee; Age 61.*
Vice Chairman of the Manager and Vice President and Counsel of
Oppenheimer Acquisition Corp., the Manager's parent holding company;
formerly he held the following positions: a director of the Manager
and Oppenheimer Funds Distributor, Inc. (the "Distributor"), Vice
President and a director of HarbourView Asset Management Corporation
("HarbourView") and Centennial Asset Management Corporation
("Centennial"), investment advisory subsidiaries of the Manager, a
director of Shareholder Financial Services, Inc. ("SFSI") and
Shareholder Services, Inc. ("SSI"), transfer agent subsidiaries of
the Manager, an officer of other OppenheimerFunds and Executive Vice
President and General Counsel of the Manager and the Distributor.
Benjamin Lipstein, Trustee; Age 71.
591 Breezy Hill Road, Hillsdale, New York 12529
Professor Emeritus of Marketing, Stern Graduate School of Business
Administration, New York University; Director of Sussex Publishers,
Inc. (Publishers of Psychology Today and Mother Earth News) and
Director of Spy Magazine, L.P.
Elizabeth B. Moynihan, Trustee; Age 65.
801 Pennsylvania Avenue, N.W., Washington, DC 20004
Author and architectural historian; a trustee of the Freer Gallery of
Art (Smithsonian Institution), the Institute of Fine Arts (New York
University), National Building Museum; a member of the Trustees
Council, Preservation League of New York State; a member of the Indo-
U.S. Sub-Commission on Education and Culture.
Kenneth A. Randall, Trustee; Age. 67.
6 Whittaker's Mill, Williamsburg, Virginia 23185
A director of Dominion Resources, Inc. (electric utility holding
company), Dominion Energy, Inc. (electric power and oil & gas
producer), Enron-Dominion Cogen Corp. (cogeneration company), Kemper
Corporation (insurance and financial services company), Fidelity Life
Association (mutual life insurance company); formerly Chairman of the
Board of ICL, Inc. (information systems), and President and Chief
Executive Officer of The Conference Board, Inc. (international
economic and business research).
Edward V. Regan, Trustee; Age 64.
40 Park Avenue, New York, New York 10016
President of Jerome Levy Economics Institute; a member of the U.S.
Competitiveness Policy Council; a director or GranCare, Inc.
(healthcare provider); formerly New York State Comptroller and a
trustee, New York State and Local Retirement Fund.
Russell S. Reynolds, Jr., Trustee; Age 63.
200 Park Avenue, New York, New York 10166
Founder Chairman of Russell Reynolds Associates, Inc. (executive
recruiting); Chairman of Directors Publication, Inc. (consulting and
publishing); a trustee of Mystic Seaport Museum, International House,
Greenwich Hospital and the Greenwich Historical Society.
Sidney M. Robbins, Trustee; Age 82.
50 Overlook Road, Ossining, New York 10562
Chase Manhattan Professor Emeritus of Financial Institutions,
Graduate School of Business, Columbia University; Visiting Professor
of Finance, University of Hawaii; a director of The Korea Fund, Inc.
and The Malaysia Fund, Inc. (closed-end investment companies); a
member of the Board of Advisors, Olympus Private Placement Fund,
L.P.; Professor Emeritus of Finance, Adelphi University.
Donald W. Spiro, President and Trustee; Age 69.*
Chairman Emeritus and a director of the Manager; formerly Chairman of
the Manager and the Distributor.
Pauline Trigere, Trustee; Age 82.
257 West 39th Street, New York, New York 10081
Chairman and Chief Executive Officer of Trigere, Inc. (design and
sale of women's fashions).
Clayton K. Yeutter, Trustee; Age 64.
1325 Merrie Ridge Road, McLean, Virginia 22101
Of Counsel to Hogan & Hartson (a law firm); a director of B.A.T.
Industries, Ltd. (tobacco and financial services), Caterpillar, Inc.
(machinery), ConAgra, Inc. (food and agricultural products), FMC
Corp. (chemicals and machinery), Lindsay Manufacturing Co.
(irrigation equipment), Texas Instruments, Inc. (electronics) and The
Vigoro Corporation (fertilizer manufacturer); formerly (in descending
chronological order) Counsellor to the President (Bush) for Domestic
Policy, Chairman of the Republican National Committee, Secretary of
the U.S. Department of Agriculture, and U.S. Trade
Representative.
Eva A. Zeff, Vice President and Portfolio Manager; Age 31.
Assistant Vice President of the Manager; an officer of other
OppenheimerFunds; previously a Securities Analyst for the Manager,
prior to which she was an Assistant Portfolio Manager for National
Securities & Research Corp., an Investment Adviser.
Andrew J. Donohue, Secretary; Age 44.
Executive Vice President and General Counsel of the Manager and the
Distributor; an officer of other OppenheimerFunds; formerly Senior
Vice President and Associate General Counsel of the Manager and the
Distributor, prior to which he was a partner in Kraft & McManimon (a
law firm), an officer of First Investors Corporation (a broker-
dealer) and First Investors Management Company, Inc. (broker-dealer
and investment adviser), and a director and an officer of First
Investors Family of Funds and First Investors Life Insurance Company.
George C. Bowen, Treasurer; Age 58.
3410 South Galena Street, Denver, Colorado 80231
Senior Vice President and Treasurer of the Manager; Vice President
and Treasurer of the Distributor and HarbourView; Senior Vice
President, Treasurer, Assistant Secretary and a director of
Centennial; Vice President, Treasurer and Secretary of SSI and SFSI;
an officer of other OppenheimerFunds.
Robert G. Zack, Assistant Secretary; Age 46.
Senior Vice President and Associate General Counsel of the Manager;
Assistant Secretary of SSI and SFSI; an officer of other
OppenheimerFunds.
Robert Bishop, Assistant Treasurer; Age 36.
3410 South Galena Street, Denver, Colorado 80231
Assistant Vice President of the Manager/Mutual Fund Accounting; an
officer of other OppenheimerFunds; previously a Fund Controller for
the Manager, prior to which he was an Accountant for Resolution Trust
Corporation and previously an Accountant and Commissions Supervisor
for Stuart James Company Inc., a broker-dealer.
Scott Farrar, Assistant Treasurer; Age 29.
3410 South Galena Street, Denver, Colorado 80231
Assistant Vice President of the Manager/Mutual Fund Accounting; an
officer of other OppenheimerFunds; previously a Fund Controller for
the Manager, prior to which he was an International Mutual Fund
Supervisor for Brown Brothers Harriman & Co., a bank, and previously
a Senior Fund Accountant for State Street Bank & Trust Company.
[FN]
_____________________________________
* A Trustee who is an "interested person" of the Fund as defined in
the Investment Company Act.
-Remuneration of Trustees. The officers of the Fund are affiliated
with the Manager; they and the Trustees of the Fund who are affiliated
with the Manager (Messrs. Galli and Spiro; Mr. Spiro is also an officer)
receive no salary or fee from the Fund. The Trustees of the Fund
(including Mr. Delaney, a former Trustee, but excluding Messrs. Galli and
Spiro) received the total amounts shown below from all 19 of the New York-
based OppenheimerFunds (including the Fund) listed in the first paragraph
of this section (and from Oppenheimer Global Environment Fund, a former
New York-based OppenheimerFund), for services in the positions shown:
Total Compensation From All
Name Position New York-based
OppenheimerFunds1
Leon Levy Chairman and Trustee $141,000.00
Leo Cherne Audit Committee Member and $ 68,800.00
Trustee
Edmund T. Delaney Study Committee Member and $ 86,200.00
Trustee2
Benjamin Lipstein Study Committee Member and $ 86,200.00
Trustee
Elizabeth B. Moynihan Study Committee Member3 and $ 60,625.00
Trustee
Kenneth A. Randall Audit Committee Member and $ 78,400.00
Trustee
Edward V. Regan Audit Committee Member3 and $ 56,275.00
Trustee
Russell S. Reynolds, Jr. Trustee $ 52,100.00
Sidney M. Robbins Study Committee Chairman, $122,100.00
Audit Committee Vice-Chairman
and Trustee
Pauline Trigere Trustee $ 52,100.00
Clayton K. Yuetter Trustee $ 52,100.00
______________________
1 For the 1994 calendar year.
2 Board and committee positions held during a portion of the period
shown.
3 Committee position held during a portion of the period shown.
The Fund has adopted a retirement plan that provides for payment to
a retired Trustee of up to 80% of the average compensation paid during
that Trustee's five years of service in which the highest compensation was
received. A Trustee must serve in that capacity for any of the New York-
based OppenheimerFunds for at least 15 years to be eligible for the
maximum payment. Mr. Delaney, a former trustee retired in October of
1994. The accumulated liability for the Fund's projected benefit
obligations under the plan was $27,432 as of September 30, 1994.
- Major Shareholders. As of December 30, 1994, no person owned
of record or was known by the Fund to own beneficially 5% or more of the
Fund's outstanding shares.
The Manager and Its Affiliates. The Manager is wholly-owned by
Oppenheimer Acquisition Corp. ("OAC"), a holding company controlled by
Massachusetts Mutual Life Insurance Company. OAC is also owned in part
by certain of the Manager's directors and officers, some of whom also
serve as officers of the Fund, and two of whom (Messrs. Galli and Spiro)
serve as Trustees of the Fund.
- The Investment Advisory Agreement. The investment advisory
agreement between the Manager and the Fund requires the Manager, at its
expense, to provide the Fund with adequate office space, facilities and
equipment, and to provide and supervise the activities of all
administrative and clerical personnel required to provide effective
corporate administration for the Fund, including the compilation and
maintenance of records with respect to its operations, the preparation and
filing of specified reports, and composition of proxy materials and
registration statements for continuous public sale of shares of the Fund.
Expenses not expressly assumed by the Manager under the advisory
agreement or by the Distributor under the General Distributors Agreement
are paid by the Fund. The advisory agreement lists examples of expenses
paid by the Fund, the major categories of which relate to interest, taxes,
brokerage commissions, fees to certain Trustees, legal and audit expenses,
custodian and transfer agent expenses, share issuance costs, certain
printing and registration costs and non-recurring expenses, including
litigation costs. During the Fund's fiscal year ended September 30, 1992,
the management fee paid by the Fund to the Manager under the prior
Investment Advisory Agreement between the Fund and the Manager was
$732,555. For the Fund's fiscal years ended September 30, 1993, and 1994,
the management fees paid by the Fund to the Manager were $727,679, and
$611,316, respectively.
The advisory agreement contains no provision limiting the Fund's
expenses. However, independently of the advisory agreement, the Manager
has undertaken that the total expenses of the Fund in any fiscal year
(including the management fee but excluding taxes, interest, brokerage
commissions, distribution assistance payments and extraordinary expenses
such as litigation costs) shall not exceed the most stringent expense
limitation imposed under state law applicable to the Fund. Pursuant to the
undertaking, the Manager's fee will be reduced at the end of a month so
that there will not be any accrued but unpaid liability under this
undertaking. Currently, the most stringent state expense limitation is
imposed by California, and limits the Fund's expenses (with specified
exclusions) to 2.5% of the first $30 million of average annual net assets,
2% of the next $70 million of average annual net assets, and 1.5% of
average annual net assets in excess of $100 million. In addition, the
Manager has voluntarily reduced the management fee it collects from the
Fund by .10%. The Manager reserves the right to terminate or amend these
undertakings at any time. Any assumption of the Fund's expenses under
this limitation would lower the Fund's overall expense ratio and increase
its total return during any period in which expenses are limited
The advisory agreement provides that in the absence of willful
misfeasance, bad faith, gross negligence in the performance of its duties,
or reckless disregard for its obligations thereunder, the Manager shall
not be liable for any loss sustained in connection with matters to which
the Agreement relates. The Agreement permits the Manager to act as
investment adviser for any other person, firm or corporation and to use
the name "Oppenheimer" in connection with its other activities. If the
Manager shall no longer act as investment adviser to the Fund, the right
of the Fund to use the name "Oppenheimer" as part of its name may be
withdrawn.
- The Distributor. Under its General Distributor's Agreement with
the Fund, the Distributor acts as the Fund's principal underwriter in the
continuous public offering of shares but is not obligated to sell a
specific number of shares. Expenses normally attributable to sales,
(other than those expenses paid under the Distribution Plan, but including
advertising and the cost of printing and mailing prospectuses, other than
those furnished to existing shareholders), are borne by the Distributor.
During the Fund's fiscal years ended September 30, 1992, 1993, and 1994,
the aggregate sales charges on sales of the Fund's Class A shares were
$564,700, $401,435, and $237,418 respectively, of which the Distributor
and an affiliated broker-dealer retained in the aggregate $191,265,
$132,961, and $75,572 in those respective years. During the Fund's fiscal
year ended September 30, 1994, the Distributor retained $2,348 as
reimbursement for Class B sales commissions and service fee advances, as
well as financing costs. For additional information about distribution
of the Fund's shares and the expenses connected with such activities,
please refer to "Service Plan," below.
- The Transfer Agent. Oppenheimer Shareholder Services, the Fund's
Transfer Agent, is responsible for maintaining the Fund's shareholder
registry and shareholder accounting records, and for shareholder servicing
and administrative functions.
Brokerage Policies of the Fund
Brokerage Provisions of the Investment Advisory Agreement. One of the
duties of the Manager under the advisory agreement is to arrange the
portfolio transactions of the Fund. The advisory agreement contains
provisions relating to the employment of broker-dealers ("brokers") to
effect the Fund's portfolio transactions. In doing so, the Manager is
authorized by the advisory agreement to employ broker-dealers, including
"affiliated" brokers, as that term is defined in the Investment Company
Act, as may, in its best judgment based on all relevant factors, implement
the policy of the Fund to obtain, at reasonable expense, the "best
execution" (prompt and reliable execution at the most favorable price
obtainable) of such transactions. The Manager need not seek competitive
commission bidding, but is expected to minimize the commissions paid to
the extent consistent with the interests and policies of the Fund as
established by the Board of Directors.
Under the advisory agreement, the Manager is authorized to select
brokers other than affiliates that provide brokerage and/or research
services for the Fund and/or the other accounts over which the Manager or
its affiliates have investment discretion. The commissions paid to such
brokers may be higher than another qualified broker would have charged if
a good faith determination is made by the Manager that the commission is
fair and reasonable in relation to the services provided. Subject to the
foregoing considerations, the Manager may also consider sales of shares
of the Fund and other investment companies managed by the Manager and its
affiliates as a factor in the selection of brokers for the Fund's
portfolio transactions.
Description of Brokerage Practices Followed by the Manager. Subject
to the provisions of the advisory agreement, the procedures and rules
described above, allocations of brokerage are generally made by the
Manager's portfolio traders based upon recommendations from the Manager's
portfolio managers. In certain instances, portfolio managers may directly
place trades and allocate brokerage, also subject to the provisions of the
advisory agreement and the procedures described above. Regardless,
brokerage is allocated under the supervision of the Manager's executive
orders. As most purchases made by the Fund are principal transactions at
net prices, the Fund incurs little or no brokerage costs. The Fund
usually deals directly with the selling or purchasing principal or market
makers without incurring charges for the services of a broker on its
behalf unless it is determined that better price or execution can be
obtained by utilizing the services of a broker. Purchases of securities
from underwriters include a commission or concession paid by the issuer
to the underwriter, and purchases from dealers include a spread between
the bid and asked price. The Fund seeks to obtain prompt execution of
orders at the most favorable net price. When possible, concurrent orders
to purchase or sell the same security by more than one of the accounts
managed by the Manager or it affiliates are combined. Transactions
effected pursuant to such combined orders are averaged as to price and
allocated in accordance with the purchase or sale orders actually placed
for each account. Option commissions may be relatively higher than those
which would apply to direct purchases and sales of portfolio
securities.
The research services provided by a particular broker may be useful
only to one or more of the advisory accounts of the Manager and its
affiliates, and investment research received for the commissions of those
other accounts may be useful both to the Fund and one or more of such
other accounts. Such research, which may be supplied by a third party at
the instance of a broker, includes information and analyses on particular
companies and industries as well as market or economic trends and
portfolio strategy, receipt of market quotations for portfolio
evaluations, information systems, computer hardware and similar products
and services. If a research service also assists the Manager in a non-
research capacity (such as bookkeeping or other administrative functions),
then only the percentage or component that provides assistance to the
Manager in the investment decision-making process may be paid for in
commission dollars. The Board of Trustees has permitted the Manager to
use concessions on fixed-price offerings to obtain research, in the same
manner as is permitted for agency transactions.
The research services provided by brokers broaden the scope and
supplement the research activities of the Manager, by making available
additional views for consideration and comparisons, and enabling the
Manager to obtain market information for the valuation of securities held
in the Fund's portfolios or being considered for purchase. The Board,
including the "Independent Trustees" (those Trustees who are not
"interested persons" as defined in the Investment Company Act, and who
have no direct or indirect financial interest in the operation of the
advisory agreement or the Distribution Plans described below) annually
reviews information furnished by the Manager as to the commissions paid
to brokers furnishing such services so that the Board may ascertain
whether the amount of such commissions was reasonably related to the value
or the benefit of such services.
Performance of the Fund
Yield and Total Return Information. As described in the Prospectus,
from time to time the "standardized yield," "dividend yield," "average
annual total return," "cumulative total return" and "total return at net
asset value" of an investment in a class of shares of the Fund may be
advertised. An explanation of how these total returns are calculated for
each class and the components of those calculations is set forth below.
The Fund's advertisements of its performance data must, under
applicable rules of the Securities and Exchange Commission, include the
average annual total returns for each class of shares of the Fund for the
1, 5, and 10-year periods (or the life of the class, if less) ending as
of the most recently-ended calendar quarter prior to the publication of
the advertisement. This enables an investor to compare the Fund's
performance to the performance of other funds for the same periods.
However, a number of factors should be considered before using such
information as a basis for comparison with other investments. An
investment in the Fund is not insured; its returns and share prices are
not guaranteed and normally will fluctuate on a daily basis. When
redeemed, an investor's shares may be worth more or less than their
original cost. Returns for any given past period are not a prediction or
representation by the Fund of future returns. The returns of Class A and
Class B shares of the Fund are affected by portfolio quality, the type of
investments the Fund holds and its operating expenses allocated to the
particular class.
- Standardized Yields
- Yield. The Fund's "yield" (referred to as "standardized yield")
for a given 30-day period for a class of shares is calculated using the
following formula set forth in rules adopted by the Securities and
Exchange Commission that apply to all funds that quote yields:
a-b 6
Standardized Yield = 2 [(------ + 1) - 1]
cd
The symbols above represent the following factors:
a = dividends and interest earned during the 30-day period.
b = expenses accrued for the period (net of any expense
reimbursements).
c = the average daily number of shares of that class outstanding
during the 30-day period that were entitled to receive
dividends.
d = the maximum offering price per share of that class on the last
day of the period, adjusted for undistributed net investment
income.
The standardized yield of a class of shares for a 30-day period may
differ from its yield for any other period. The SEC formula assumes that
the standardized yield for a 30-day period occurs at a constant rate for
a six-month period and is annualized at the end of the six-month period.
This standardized yield is not based on actual distributions paid by the
Fund to shareholders in the 30-day period, but is a hypothetical yield
based upon the net investment income from the Fund's portfolio investments
calculated for that period. The standardized yield may differ from the
"dividend yield" of that class, described below. Additionally, because
each class of shares is subject to different expenses, it is likely that
the standardized yields of the Fund's classes of shares will differ. For
the 30-day period ended September 30, 1994, the standardized yields for
the Fund's Class A and Class B shares were 7.00% and 6.59%,
respectively.
- Dividend Yield and Distribution Return. From time to time the Fund
may quote a "dividend yield" or a "distribution return" for each class.
Dividend yield is based on the Class A or Class B share dividends derived
from net investment income during a stated period. Distribution return
includes dividends derived from net investment income and from realized
capital gains declared during a stated period. Under those calculations,
the dividends and/or distributions for that class declared during a stated
period of one year or less (for example, 30 days) are added together, and
the sum is divided by the maximum offering price per share of that class
on the last day of the period. When the result is annualized for a period
of less than one year, the "dividend yield" is calculated as follows:
Dividend Yield of the Class =
Dividends of the Class
- ---------------------------------------------------- +
Max Offering Price of the Class (last day of period)
Number of days (accrual period) x 365
The maximum offering price for Class A shares includes the maximum
front-end sales charge. For Class B shares, the maximum offering price
is the net asset value per share, without considering the effect of
contingent deferred sales charges.
From time to time similar yield or distribution return calculations
may also be made using the Class A net asset value (instead of its
respective maximum offering price) at the end of the period. The dividend
yields on Class A shares for the 30-day period ended September 30, 1994,
were 7.83% and 8.22% when calculated at maximum offering price and at net
asset value, respectively. The dividend yield on Class B shares for the
30-day period ended September 30, 1994, was 7.48% when calculated at net
asset value.
- Total Return Information
- Average Annual Total Returns. The "average annual total return"
of each class is an average annual compounded rate of return for each year
in a specified number of years. It is the rate of return based on the
change in value of a hypothetical initial investment of $1,000 ("P" in the
formula below) held for a number of years ("n") to achieve an Ending
Redeemable Value ("ERV") of that investment, according to the following
formula:
( ERV ) 1/n
(-----) -1 = Average Annual Total Return
( P )
- Cumulative Total Returns. The cumulative "total return"
calculation measures the change in value of a hypothetical investment of
$1,000 over an entire period of years. Its calculation uses some of the
same factors as average annual total return, but it does not average the
rate of return on an annual basis. Cumulative total return is determined
as follows:
ERV - P
- ------- = Total Return
P
In calculating total returns for Class A shares, the current maximum
sales charge of 4.75% (as a percentage of the offering price) is deducted
from the initial investment ("P") (unless the return is shown at net asset
value, as described below). For Class B shares, payment of contingent
deferred sales charge of 5.0% for the first year, 4.0% for the second
year, 3.0% for the third and fourth years, 2.0% in the fifth year, 1.0%
in the sixth year and none thereafter is applied, as described in the
Prospectus. Total returns also assume that all dividends and capital
gains distributions during the period are reinvested to buy additional
shares at net asset value per share, and that the investment is redeemed
at the end of the period. The "average annual total returns" on an
investment in Class A shares of the Fund for the one, five and ten year
periods ended September 30, 1994 were (5.51)%, 6.70% and 6.83%,
respectively. The "average annual total returns" on an investment in
Class B shares of the Fund for the fiscal year ended September 30, 1994
and for the period from May 17, 1993 (inception of the Class) through
September 30, 1994 were (6.23)% and (1.77)%, respectively. The cumulative
"total return" on Class A shares for the ten year period ended September
30, 1994 was 70.24%. During a portion of the periods for which total
returns are shown for Class A shares, the Fund's maximum initial sales
charge rate was higher; as a result, performance returns on actual
investments during those periods may be lower than the results shown. The
cumulative total returns on Class B shares for the fiscal year ended
September 30, 1994 and for the period from May 17, 1993 through September
30, 1994 were (6.23)%and (2.42)%, respectively.
- Total Returns at Net Asset Value. From time to time the Fund may
also quote an average annual total return at net asset value or a
cumulative total return at net asset value for Class A or Class B shares.
Each is based on the difference in net asset value per share at the
beginning and the end of the period for a hypothetical investment in that
class of shares (without considering front-end or contingent deferred
sales charges) and takes into consideration the reinvestment of dividends
and capital gains distributions. The Fund's total return at net asset
value of Class A shares for the one-year period ended September 30, 1994
was (0.80)%. The Fund's total return at net asset value on Class B shares
for the fiscal year ended September 30, 1994 was (1.62)%.
Other Performance Comparisons. From time to time the Fund may publish
the ranking of its Class A or Class B shares by Lipper Analytical
Services, Inc. ("Lipper"), a widely-recognized independent service. Lipper
monitors the performance of regulated investment companies, including the
Fund, and ranks their performance for various periods based on categories
relating to investment objectives. The performance of the Fund is ranked
against (i) all other funds, (ii) all other U.S. mortgage funds, and (iii)
all other U.S. mortgage funds in a specific size category. The Lipper
performance rankings are based on total returns that include the
reinvestment of capital gain distributions and income dividends but do not
take sales charges or taxes into consideration.
From time to time the Fund may publish the ranking of the performance
of its Class A or Class B shares by Morningstar, Inc., an independent
mutual fund monitoring service that ranks mutual funds, including the
Fund, monthly in broad investment categories (equity, taxable bond,
municipal bond and hybrid) based on risk-adjusted investment return.
Investment return measures a fund's three, five and ten-year average
annual total returns (when available) in excess of 90-day U.S. Treasury
bill returns after considering sales charges and expenses. Risk reflects
fund performance below 90-day U.S. Treasury bill monthly returns. Risk
and return are combined to produce star rankings reflecting performance
relative to the average fund in a fund's category. Five stars is the
"highest" ranking (top 10%), four stars is "above average" (next 22.5%),
three stars is "average" (next 35%), two stars is "below average" (next
22.5%) and one star is "lowest" (bottom 10%). Morningstar ranks the Class
A and Class B shares of the Fund in relation to other corporate bond
funds. Rankings are subject to change.
The total return on an investment in the Fund's Class A or Class B
shares may be compared with performance for the same period of the Lehman
Aggregate Bond Index and the Lehman Mortgage-Backed Securities Index. The
Lehman Aggregate Bond Index is an unmanaged index of investment grade debt
securities with a maturity of at least one year, consisting of treasury
issues, agency issues, corporate bond issues and mortgage-backed
securities, and is widely regarded as a measure of the performance of the
general fixed-rate investment grade debt market. The Lehman Mortgage-
Backed Securities Index is an unmanaged index of fixed-rate securities
backed by mortgage pools of the GNMA, FHLMC and FNMA and is widely
recognized as a measure of the performance of the mortgage-backed
securities market, the market in which the Fund principally invests. Each
Index includes a factor for the reinvestment of interest but does not
reflect expenses or taxes. The Fund's return for Class A shares reflects
the deduction of the current maximum sales charge of 4.75% and includes
reinvestment of all dividends and capital gains distributions, but does
not consider taxes.
Yields and total return information may be useful to investors in
reviewing the Fund's performance. The yield and total return of a class'
shares are affected by portfolio quality, portfolio maturity, type of
investments held and operating expenses. The Fund's returns and share
price are not guaranteed by the FDIC or any other agency and will
fluctuate daily, while bank depository obligations may be insured by the
FDIC and may provide fixed rates of return.
Distribution and Service Plans
The Fund has adopted a Service Plan for Class A shares and a
Distribution and Service Plan for Class B shares under Rule 12b-1 of the
Investment Company Act pursuant to which the Fund will reimburse the
Distributor quarterly for all or a portion of its costs incurred in
connection with the distribution and/or servicing of the shares of that
class, as described in the Prospectus. Each Plan has been approved by a
vote of (i) the Board of Trustees of the Fund, including a majority of the
Independent Trustees, cast in person at a meeting called for the purpose
of voting on that Plan, and (ii) the holders of a "majority" (as defined
in the Investment Company Act) of the shares of each class. For the
Distribution and Service Plan for Class B shares, that vote was cast by
the Manager as the sole initial holder of Class B shares of the Fund.
In addition, under the Plans the Manager and the Distributor, in
their sole discretion, from time to time may use their own resources
(which, in the case of the Manager, may include profits from the advisory
fee it receives from the Fund) to make payments to brokers, dealers or
other financial institutions (each is referred to as a "Recipient" under
the Plans) for distribution and administrative services they perform. The
Distributor and the Manager may, in their sole discretion, increase or
decrease the amount of payments they make from their own resources to
Recipients.
Unless terminated as described below, each Plan continues in effect
from year to year but only as long as its continuance is specifically
approved at least annually by the Fund's Board of Trustees and its
Independent Trustees by a vote cast in person at a meeting called for the
purpose of voting on such continuance. Either Plan may be terminated at
any time by the vote of a majority of the Independent Trustees or by the
vote of the holders of a "majority" (as defined in the Investment Company
Act) of the outstanding shares of that class. Neither Plan may be amended
to increase materially the amount of payments to be made unless such
amendment is approved by shareholders of the class affected by the
amendment. All material amendments must be approved by the Independent
Trustees.
While the Plans are in effect, the Treasurer of the Fund shall
provide separate written reports to the Fund's Board of Trustees at least
quarterly on the amount of all payments made pursuant to each Plan, the
purpose for which each payment was made and the identity of each Recipient
that received any payment. The report for the Class B Plan shall also
include the distribution costs for that quarter, and such costs for
previous fiscal periods that have been carried forward, as explained in
the Prospectus and below. Those reports, including the allocations on
which they are based, will be subject to the review and approval of the
Independent Trustees in the exercise of their fiduciary duty. Each Plan
further provides that while it is in effect, the selection and nomination
of those Trustees of the Fund who are not "interested persons" of the Fund
is committed to the discretion of the Independent Trustees. This does not
prevent the involvement of others in such selection and nomination if the
final decision on selection or nomination is approved by a majority of the
Independent Trustees.
Under the Plans, no payment will be made to any Recipient in any
quarter if the aggregate net asset value of all Fund shares held by the
Recipient for itself and its customers, did not exceed a minimum amount,
if any, that may be determined from time to time by a majority of the
Fund's Independent Trustees. Initially, the Board of Trustees has set the
fees at the maximum rate and set no requirement for a minimum amount of
the assets.
For the fiscal year ended September 30, 1994, payments under the
Class A Plan totalled $206,668, all of which was paid by the Distributor
to Recipients, including $13,423 paid to MML Investor Services, Inc., an
affiliate of the Distributor. Any unreimbursed expenses incurred by the
Distributor with respect to Class A shares for any fiscal year may not be
recovered in subsequent years. Payments received by the Distributor under
the Plan for Class A shares will not be used to pay any interest expense,
carrying charge, or other financial costs, or allocation of overhead by
the Distributor.
The Class B Plan allows the service fee payment to be paid by the
Distributor to Recipients in advance for the first year Class B shares are
outstanding, and thereafter on a quarterly basis, as described in the
Prospectus. Service fee payments by the Distributor to Recipients will
be made (i) in advance for the first year Class B shares are outstanding,
following the purchase of shares, in an amount equal to 0.25% of the net
asset value of the shares purchased by the Recipient or its customers and
(ii) thereafter, on a quarterly basis, computed as of the close of
business each day at an annual rate of .25% of the average daily net asset
value of Class B shares held in accounts of the Recipient or its
customers. An exchange of shares does not entitle the Recipient to an
advance service fee payment. In the event Class B shares are redeemed
during the first year that the shares are outstanding, the Recipient will
be obligated to repay a pro rata portion of the advance payment for those
shares to the Distributor. Payments made under the Class B Plan during the
fiscal year ended September 30, 1994 totalled $19,481, of which the
Distributor retained $19,061, and $39 was paid to a dealer affiliated with
the Distributor and the remainder was paid to unaffiliated dealers.
Although the Class B Plan permits the Distributor to retain both the
asset-based sales charges and the service fee on Class B shares, or to pay
Recipients the service fee on a quarterly basis, without payment in
advance, the Distributor intends to pay the service fee to Recipients in
the manner described above. A minimum holding period may be established
from time to time under the Class B Plan by the Board. Initially, the
Board has set no minimum holding period. All payments under the Class B
Plan are subject to the limitations imposed by the Rules of Fair Practice
of the National Association of Securities Dealers, Inc. on payments of
asset-based sales charges and service fees. The Distributor anticipates
that it will take a number of years for it to recoup (from the Fund's
payments to the Distributor under the Class B Plan and recoveries of the
contingent deferred sales charge) the sales commissions paid to authorized
brokers or dealers.
Asset-based sales charge payments are designed to permit an investor
to purchase shares of the Fund without the assessment of a front-end sales
load and at the same time permit the Distributor to compensate brokers and
dealers in connection with the sale of Class B shares of the Fund. The
Distributor's actual distribution expenses for any given year may exceed
the aggregate of payments received pursuant to the Class B Plan and from
contingent deferred sales charges, and such expenses will be carried
forward and paid in future years. The Fund will be charged only for
interest expenses, carrying charges or other financial costs that are
directly related to the carry-forward of actual distribution expenses.
For example, if the Distributor incurred distribution expenses of $4
million in a given fiscal year, of which $2,000,000 was recovered in the
form of contingent deferred sales charges paid by investors and $1,600,000
was reimbursed in the form of payments made by the Fund to the Distributor
under the Class B Plan, the balance of $400,000 (plus interest) would be
subject to recovery in future fiscal years from such sources.
The Class B Plan allows for the carry-forward of distribution
expenses, to be recovered from asset-based sales charges in subsequent
fiscal periods, as described in the Prospectus. The asset-based sales
charge paid to the Distributor by the Fund under the Class B Plan is
intended to allow the Distributor to recoup the cost of sales commissions
paid to authorized brokers and dealers at the time of sale, plus financing
costs, as described in the Prospectus. Such payments may also be used to
pay for the following expenses in connection with the distribution of
Class B shares: (i) financing the advance of the service fee payment to
Recipients under the Class B Plan, (ii) compensation and expenses of
personnel employed by the Distributor to support distribution of Class B
shares, and (iii) costs of sales literature, advertising and prospectuses
(other than those furnished to current shareholders) and state "blue sky"
registration fees.
ABOUT YOUR ACCOUNT
How To Buy Shares
Alternative Sales Arrangements - Class A and Class B Shares. The
availability of two classes of shares permits an investor to choose the
method of purchasing shares that is more beneficial to the investor
depending on the amount of the purchase, the length of time the investor
expects to hold shares and other relevant circumstances. Investors should
understand that the purpose and function of the deferred sales charge and
asset-based sales charge with respect to Class B shares are the same as
those of the initial sales charge with respect to Class A shares. Any
salesperson or other person entitled to receive compensation for selling
Fund shares may receive different compensation with respect to one class
of shares than the other. The Distributor normally will not accept any
order for $1 million or more of Class B shares on behalf of a single
investor (not including dealer "street name" or omnibus accounts) because
generally it will be more advantageous for that investor to purchase Class
A shares of the Fund instead.
The two classes of shares each represent an interest in the same
portfolio investments of the Fund. However, each class has different
shareholder privileges and features. The net income attributable to Class
B shares and the dividends payable on Class B shares will be reduced by
incremental expenses borne solely by that class, including the asset-based
sales charge to which Class B shares are subject.
The conversion of Class B shares to Class A shares after six years
is subject to the continuing availability of a private letter ruling from
the Internal Revenue Service, or an opinion of counsel or tax adviser, to
the effect that the conversion of B shares does not constitute a taxable
event for the holder under Federal income tax law. If such a revenue
ruling or opinion is no longer available, the automatic conversion feature
may be suspended, in which event no further conversions of Class B shares
would occur while such suspension remained in effect. Although Class B
shares could then be exchanged for Class A shares on the basis of relative
net asset value of the two classes, without the imposition of a sales
charge or fee, such exchange could constitute a taxable event for the
holder, and absent such exchange, Class B shares might continue to be
subject to the asset-based sales charge for longer than six years.
The methodology for calculating the net asset value, dividends and
distributions of the Fund's Class A and Class B shares recognizes two
types of expenses. General expenses that do not pertain specifically to
either class are allocated pro rata to the shares of each class, based on
the percentage of the net assets of such class to the Fund's total assets,
and then equally to each outstanding share within a given class. Such
general expenses include (i) management fees, (ii) legal, bookkeeping and
audit fees, (iii) printing and mailing costs of shareholder reports,
Prospectuses, Statements of Additional Information and other materials for
current shareholders, (iv) fees to Independent Trustees, (v) custodian
expenses, (vi) share issuance costs, (vii) organization and start-up
costs, (viii) interest, taxes and brokerage commissions, and (ix) non-
recurring expenses, such as litigation costs. Other expenses that are
directly attributable to a class are allocated equally to each outstanding
share within that class. Such expenses include (i) Distribution Plan
fees, (ii) incremental transfer and shareholder servicing agent fees and
expenses, (iii) registration fees and (iv) shareholder meeting expenses,
to the extent that such expenses pertain to a specific class rather than
to the Fund as a whole.
Determination of Net Asset Values Per Share. The net asset values per
share of Class A and Class B shares of the Fund are determined each day
The New York Stock Exchange (the "NYSE") is open, as of the close of the
NYSE that day, by dividing the value of the Fund's net assets attributable
to that class by the number of shares of that class outstanding. The
NYSE's most recent annual announcement (which is subject to change) states
that it will close on New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas
Day. It may also close on other days. The Fund may invest a substantial
portion of its assets in foreign securities primarily listed on foreign
exchanges which may trade on Saturdays or customary U.S. business holidays
on which the NYSE is closed. Because the Fund's net asset value will not
be calculated on those days, the Fund's net asset values per share may be
significantly affected on such days when shareholders may not purchase or
redeem shares.
The Fund's Board of Trustees has established procedures for the
valuation of the Fund's securities, generally as follows: (i) long-term
debt securities, and short-term debt securities having a maturity in
excess of 60 days are valued at the mean between the bid and asked prices
determined by a portfolio pricing service approved by the Board or
obtained from active market makers on the basis of reasonable inquiry;
(ii) short-term debt securities having a remaining maturity of 60 days or
less are valued at cost, adjusted for amortization of premiums and
accretion of discounts; and (iii) securities (including restricted
securities) not having readily-available market quotations are valued at
fair value under the Board's procedures. In the case of U.S. Government
Securities, and all mortgage-backed securities, such pricing procedures
may include "matrix" comparisons to the prices for comparable instruments
on the basis of yield, maturity, and other special factors involved. With
the approval of the Board, the Manager may employ a pricing service, bank
or broker-dealer experienced in such matters to perform any of the above
described functions. Trustees will monitor the accuracy of such pricing
services by comparing prices used for portfolio evaluation to actual sales
prices of selected securities.
Puts, calls and Interest Rate Futures held by the Fund are valued at
the last sales price on the principal exchange on which they are traded
or, if there are no sales on the principal exchange, the last sale on any
exchange is used. When the Fund writes an option, an amount equal to the
premium received by the Fund is included in the Fund's Statement of Assets
and Liabilities as an asset, and an equivalent deferred credit is included
in the liability section. The deferred credit is "marked-to-market" to
reflect the current market value of the option. In determining the Fund's
gain on investments, if a call written by the Fund is exercised, the
proceeds are increased by the premium received. If a call or put written
by the Fund expires, the Fund has a gain in the amount of the premium; if
the Fund enters into a closing purchase transaction, it will have a gain
or loss depending on whether the premium received was more or less than
the cost of the closing transaction. If the Fund exercises a put it
holds, the amount the Fund receives on its sale of the underlying
investment is reduced by the amount of premium paid by the Fund.
AccountLink. When shares are purchased through AccountLink, each
purchase must be at least $25.00. Shares will be purchased on the regular
business day the Distributor is instructed to initiate the Automated
Clearing House transfer to buy the shares. Dividends will begin to accrue
on such shares on the day the Fund receives Federal Funds for such
purchase through the ACH system before 4:00 P.M., which is normally 3 days
after the ACH transfer is initiated. The Distributor and the Fund are not
responsible for any delays. If the Federal Funds are received after 4:00
P.M., dividends will begin to accrue on the next regular business day
after such Federal Funds are received.
Reduced Sales Charges. As discussed in the Prospectus, a reduced sales
charge rate may be obtained for Class A shares under Right of Accumulation
and Letters of Intent because of the economies of sales efforts and
reduction in expenses realized by the Distributor, dealers and brokers
making such sales. No sales charge is imposed in certain other
circumstances described in the Prospectus because the Distributor incurs
little or no selling expenses. The term "immediate family" refers to
one's spouse, children, grandchildren, grandparents, parents, parents-in-
law, brothers and sisters, sons- and daughters-in-law, a sibling's spouse
and a spouse's siblings.
- The OppenheimerFunds. The OppenheimerFunds are those mutual funds
for which the Distributor acts as the distributor or the sub-distributor
and include the following:
Oppenheimer Tax-Free Bond Fund
Oppenheimer New York Tax-Exempt Fund
Oppenheimer California Tax-Exempt Fund
Oppenheimer Intermediate Tax-Exempt Bond Fund
Oppenheimer Insured Tax-Exempt Bond Fund
Oppenheimer Main Street California Tax-Exempt Fund
Oppenheimer Florida Tax-Exempt Fund
Oppenheimer Pennsylvania Tax-Exempt Fund
Oppenheimer New Jersey Tax-Exempt Fund Oppenheimer Fund
Oppenheimer Discovery Fund
Oppenheimer Time Fund
Oppenheimer Target Fund
Oppenheimer Growth Fund
Oppenheimer Equity Income Fund
Oppenheimer Value Stock Fund
Oppenheimer Asset Allocation Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Main Street Income & Growth Fund
Oppenheimer High Yield Fund
Oppenheimer Champion High Yield Fund
Oppenheimer Investment Grade Bond Fund
Oppenheimer U.S. Government Trust
Oppenheimer Limited-Term Government Fund
Oppenheimer Mortgage Income Fund
Oppenheimer Global Fund
Oppenheimer Global Emerging Growth Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Strategic Income Fund
Oppenheimer Strategic Investment Grade Bond Fund
Oppenheimer Strategic Short-Term Income Fund
Oppenheimer Strategic Income & Growth Fund
Oppenheimer Strategic Diversified Income Fund
and the following "Money Market Funds":
Oppenheimer Money Market Fund, Inc.
Oppenheimer Cash Reserves
Centennial Money Market Trust
Centennial Tax Exempt Trust
Centennial Government Trust
Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust
Centennial America Fund, L.P.
Daily Cash Accumulation Fund, Inc.
There is an initial sales charge on the purchase of Class A shares
of each of the OppenheimerFunds except Money Market Funds (under certain
circumstances described herein, redemption proceeds of Money Market Fund
shares may be subject to a contingent deferred sales charge).
- Letters of Intent. A Letter of Intent ("Letter") is the
investor's statement of intention to purchase Class A shares of the Fund
(and other eligible OppenheimerFunds) sold with a front-end sales charge
during the 13-month period from the investor's first purchase pursuant to
the Letter (the "Letter of Intent period"), which may, at the investor's
request, include purchases made up to 90 days prior to the date of the
Letter. The Letter states the investor's intention to make the aggregate
amount of purchases (excluding any purchases made by reinvestments of
dividends or distributions or purchases made at net asset value without
sales charge), which together with the investor's holdings of such funds
(calculated at their respective public offering prices calculated on the
date of the Letter) will equal or exceed the amount specified in the
Letter. This enables the investor to obtain the reduced sales charge rate
(as set forth in the Prospectus) applicable to purchases of shares in that
amount (the "intended purchase amount"). Each purchase under the Letter
will be made at the public offering price applicable to a single lump-sum
purchase of shares in the intended purchase amount, as described in the
Prospectus.
In submitting a Letter, the investor makes no commitment to purchase
shares, but if the investor's purchases of shares within the Letter of
Intent period, when added to the value (at offering price) of the
investor's holdings of shares on the last day of that period, do not equal
or exceed the intended purchase amount, the investor agrees to pay the
additional amount of sales charge applicable to such purchases, as set
forth in "Terms of Escrow," below (as those terms may be amended from time
to time). The investor agrees that shares equal in value to 5% of the
intended purchase amount will be held in escrow by the Transfer Agent
subject to the Terms of Escrow. Also, the investor agrees to be bound by
the terms of the Prospectus, this Statement of Additional Information and
the Application used for such Letter of Intent, and if such terms are
amended, as they may be from time to time by the Fund, that those
amendments will apply automatically to existing Letters of Intent.
If the total eligible purchases made during the Letter of Intent
period do not equal or exceed the intended purchase amount, the
commissions previously paid to the dealer of record for the account and
the amount of sales charge retained by the Distributor will be adjusted
to the rates applicable to actual purchases. If total eligible purchases
during the Letter of Intent period exceed the intended purchase amount and
exceed the amount needed to qualify for the next sales charge rate
reduction set forth in the applicable prospectus, the sales charges paid
will be adjusted to the lower rate, but only if and when the dealer
returns to the Distributor the excess of the amount of commissions allowed
or paid to the dealer over the amount of commissions that apply to the
actual amount of purchases. The excess commissions returned to the
Distributor will be used to purchase additional shares for the investor's
account at the net asset value per share in effect on the date of such
purchase, promptly after the Distributor's receipt thereof.
In determining the total amount of purchases made under a Letter,
shares redeemed by the investor prior to the termination of the Letter of
Intent period will be deducted. It is the responsibility of the dealer
of record and/or the investor to advise the Distributor about the Letter
in placing any purchase orders for the investor during the Letter of
Intent period. All of such purchases must be made through the
Distributor.
- Terms of Escrow That Apply to Letters of Intent.
1. Out of the initial purchase (or subsequent purchases if necessary)
made pursuant to a Letter, shares of the Fund equal in value to 5% of the
intended purchase amount specified in the Letter shall be held in escrow
by the Transfer Agent. For example, if the intended purchase amount is
$50,000, the escrow shall be shares valued in the amount of $2,500
(computed at the public offering price adjusted for a $50,000 purchase).
Any dividends and capital gains distributions on the escrowed shares will
be credited to the investor's account.
2. If the intended purchase amount specified under the Letter is
completed within the thirteen-month Letter of Intent period, the escrowed
shares will be promptly released to the investor.
3. If, at the end of the thirteen-month Letter of Intent period the
total purchases pursuant to the Letter are less than the intended purchase
amount specified in the Letter, the investor must remit to the Distributor
an amount equal to the difference between the dollar amount of sales
charges actually paid and the amount of sales charges which would have
been paid if the total amount purchased had been made at a single time.
Such sales charge adjustment will apply to any shares redeemed prior to
the completion of the Letter. If such difference in sales charges is not
paid within twenty days after a request from the Distributor or the
dealer, the Distributor will, within sixty days of the expiration of the
Letter, redeem the number of escrowed shares necessary to realize such
difference in sales charges. Full and fractional shares remaining after
such redemption will be released from escrow. If a request is received
to redeem escrowed shares prior to the payment of such additional sales
charge, the sales charge will be withheld from the redemption proceeds.
4. By signing the Letter, the investor irrevocably constitutes and
appoints the Transfer Agent as attorney-in-fact to surrender for
redemption any or all escrowed shares.
5. The shares eligible for purchase under the Letter (or the holding
of which may be counted toward completion of the Letter) do not include
any shares sold without a front-end sales charge or without being subject
to a Class A contingent deferred sales charge unless (for the purpose of
determining completion of the obligation to purchase shares under the
Letter) the shares were acquired in exchange for shares of one of the
OppenheimerFunds whose shares were acquired by payment of a sales
charge.
6. Shares held in escrow hereunder will automatically be exchanged
for shares of another fund to which an exchange is requested, as described
in the section of the Prospectus entitled "Exchange Privilege," and the
escrow will be transferred to that other fund.
Asset Builder Plans. To establish an Asset Builder Plan from a bank
account, a check (minimum $25) for the initial purchase must accompany the
application. Shares purchased by Asset Builder Plan payments from bank
accounts are subject to the redemption restrictions for recent purchases
described in "How To Sell Shares," in the Prospectus. Asset Builder Plans
also enable shareholders of Oppenheimer Cash Reserves to use those
accounts for monthly automatic purchases of shares of up to four other
OppenheimerFunds.
There is a front-end sales charge on the purchase of certain
OppenheimerFunds, or a contingent deferred sales charge may apply to
shares purchased by Asset Builder payments. An application should be
obtained from the Distributor, completed and returned, and a prospectus
of the selected fund(s) should be obtained from the Distributor or your
financial advisor before initiating Asset Builder payments. The amount
of the Asset Builder investment may be changed or the automatic
investments may be terminated at any time by writing to the Transfer
Agent. A reasonable period (approximately 15 days) is required after the
Transfer Agent's receipt of such instructions to implement them. The Fund
reserves the right to amend, suspend, or discontinue offering such plans
at any time without prior notice.
Cancellation of Purchase Orders. Cancellation of purchase orders for
the Fund's shares (for example, when a purchase check is returned to the
Fund unpaid) causes a loss to be incurred when the net asset value of the
Fund's shares on the cancellation date is less than on the purchase date.
That loss is equal to the amount of the decline in the net asset value per
share multiplied by the number of shares in the purchase order. The
investor is responsible for that loss. If the investor fails to
compensate the Fund for the loss, the Distributor will do so. The Fund
may reimburse the Distributor for that amount by redeeming shares from any
account registered in that investor's name, or the Fund or the Distributor
may seek other redress.
- Checkwriting. When a check is presented to the Bank for
clearance, the Bank will ask the Fund to redeem a sufficient number of
full and fractional shares in the shareholder's account to cover the
amount of the check. This enables the shareholder to continue receiving
dividends on those shares until the check is presented to the Fund.
Checks may not be presented for payment at the offices of the Bank or the
Fund's Custodian. This limitation does not affect the use of checks for
the payment of bills or to obtain cash at other banks. The Fund reserves
the right to amend, suspend or discontinue offering checkwriting
privileges at any time without prior notice.
- Selling Shares by Wire. The wire of redemptions proceeds may be
delayed if the Fund's custodian bank is not open for business on a day
when the Fund would normally authorize the wire to be made, which is
usually the Fund's next regular business day following the redemption. In
those circumstances, the wire will not be transmitted until the next bank
business day on which the Fund is open for business. No dividends will
be paid on the proceeds of redeemed shares awaiting transfer by wire.
How to Sell Shares
Information on how to sell shares of the Fund is stated in the
Prospectus. The information below supplements the terms and conditions for
redemptions set forth in the Prospectus.
- Involuntary Redemptions. The Fund's Board of Trustees has the
right to cause the involuntary redemption of the shares held in any
account if the aggregate net asset value of those shares is less than $200
or such lesser amount as the Board may fix. The Board of Trustees will
not cause the involuntary redemption of shares in an account if the
aggregate net asset value of the shares has fallen below the stated
minimum solely as a result of market fluctuations. Should the Board elect
to exercise this right, it may also fix, in accordance with the Investment
Company Act, the requirements for any notice to be given to the
shareholders in question (not less than 30 days), or the Board may set
requirements for granting permission to the Shareholder to increase the
investment, and set other terms and conditions so that the shares would
not be involuntarily redeemed.
Reinvestment Privilege. Within six months of a redemption, a
shareholder may reinvest all or part of the redemption proceeds of (i)
Class A shares, or (ii) Class B shares that were subject to the Class B
contingent deferred sales charge when redeemed. The reinvestment may be
made without sales charge only in Class A shares of the Fund or any of the
other OppenheimerFunds into which shares of the Fund are exchangeable as
described below, at the net asset value next computed after the Transfer
Agent receives the reinvestment order. The shareholder must ask the
Distributor for that privilege at the time of reinvestment. Any capital
gain that was realized when the shares were redeemed is taxable, and
reinvestment will not alter any capital gains tax payable on that gain.
If there has been a capital loss on the redemption, some or all of the
loss may not be tax deductible, depending on the timing and amount of the
reinvestment. Under the Internal Revenue Code, if the redemption proceeds
of Fund shares on which a sales charge was paid are reinvested in shares
of the Fund or another of the OppenheimerFunds within 90 days of payment
of the sales charge, the shareholder's basis in the shares of the Fund
that were redeemed may not include the amount of the sales charge paid.
That would reduce the loss or increase the gain recognized from the
redemption. However, in that case the sales charge would be added to the
basis of the shares acquired by the reinvestment of the redemption
proceeds. The Fund may amend, suspend or cease offering this reinvestment
privilege at any time as to shares redeemed after the date of such
amendment, suspension or cessation.
Transfers of Shares. Shares are not subject to the payment of a
contingent deferred sales charge of either class at the time of transfer
to the name of another person or entity (whether the transfer occurs by
absolute assignment, gift or bequest, not involving, directly or
indirectly, a public sale). The transferred shares will remain subject
to the contingent deferred sales charge, calculated as if the transferee
shareholder had acquired the transferred shares in the same manner and at
the same time as the transferring shareholder. If less than all shares
held in an account are transferred, and some but not all shares in the
account would be subject to a contingent deferred sales charge if redeemed
at the time of transfer, the priorities described in the Prospectus under
"How to Buy Shares" for the imposition of the Class B contingent deferred
sales charge will be followed in determining the order in which shares are
transferred.
Distributions From Retirement Plans. Requests for distributions from
OppenheimerFunds-sponsored IRAs, 403(b)(7) custodial plans, or pension or
profit-sharing plans should be addressed to "Trustee, OppenheimerFunds
Retirement Plans," c/o the Transfer Agent at its address listed in "How
To Sell Shares" in the Prospectus or on the back cover of this Statement
of Additional Information. The request must: (i) state the reason for the
distribution; (ii) state the owner's awareness of tax penalties if the
distribution is premature; and (iii) conform to the requirements of the
plan and the Fund's other redemption requirements. Participants (other
than self-employed persons) in OppenheimerFunds-sponsored pension or
profit-sharing plans may not directly request redemption of their
accounts. The employer or plan administrator must sign the request.
Distributions from pension and profit sharing plans are subject to special
requirements under the Internal Revenue Code and certain documents
(available from the Transfer Agent) must be completed before the
distribution may be made. Distributions from retirement plans are subject
to withholding requirements under the Internal Revenue Code, and IRS Form
W-4P (available from the Transfer Agent) must be submitted to the Transfer
Agent with the distribution request, or the distribution may be delayed.
Unless the shareholder has provided the Transfer Agent with a certified
tax identification number, the Internal Revenue Code requires that tax be
withheld from any distribution even if the shareholder elects not to have
tax withheld. The Fund, the Manager, the Distributor, the Trustee and the
Transfer Agent assume no responsibility to determine whether a
distribution satisfies the conditions of applicable tax laws and will not
be responsible for any tax penalties assessed in connection with a
distribution.
Special Arrangements for Repurchase of Shares from Dealers and Brokers.
The Distributor is the Fund's agent to repurchase its shares from
authorized dealers or brokers. The repurchase price will be the net asset
value next computed after the receipt of an order placed by such dealer
or broker, except that orders received from dealers or brokers after the
close of the NYSE on a regular business day will be processed at that
day's net asset value if such orders were received by the dealer or broker
from its customers prior to the close of the NYSE and were transmitted to
and received by the Distributor prior to its close of business that day
(normally 5:00 P.M.). Payment ordinarily will be made within seven days
after the Distributor's receipt of the required redemption documents, with
signature(s) guaranteed as described in the Prospectus.
Automatic Withdrawal and Exchange Plans. Investors owning shares of
the Fund valued at $5,000 or more can authorize the Transfer Agent to
redeem shares (minimum $50) automatically on a monthly, quarterly, semi-
annual or annual basis under an Automatic Withdrawal Plan. Shares will
be redeemed three business days prior to the date requested by the
shareholder for receipt of the payment. Automatic withdrawals of up to
$1,500 per month may be requested by telephone if payments are to be made
by check payable to all shareholders of record and sent to the address of
record for the account (and if the address has not been changed within the
prior 30 days). Required minimum distributions from OppenheimerFunds-
sponsored retirement plans may not be arranged on this basis. Payments
are normally made by check, but shareholders having AccountLink privileges
(see "How To Buy Shares") may arrange to have Automatic Withdrawal Plan
payments transferred to the bank account designated on the
OppenheimerFunds New Account Application or signature-guaranteed
instructions. The Fund cannot guarantee receipt of a payment on the date
requested and reserves the right to amend, suspend or discontinue offering
such plans at any time without prior notice. Because of the sales charge
assessed on Class A share purchases, shareholders should not make regular
additional Class A share purchases while participating in an Automatic
Withdrawal Plan. Class B shareholders should not establish withdrawal
plans that would require the redemption of shares purchased subject to a
contingent deferred sales charge and held less than 6 years, because of
the imposition of the Class B contingent deferred sales charge on such
withdrawals (except where the Class B contingent deferred sales charge is
waived as described in the Prospectus under "Class B Contingent Deferred
Sales Charge").
By requesting an Automatic Withdrawal or Exchange Plan, the
shareholder agrees to the terms and conditions applicable to such plans,
as stated below and in the provisions of the OppenheimerFunds Application
relating to such Plans, as well as the Prospectus. These provisions may
be amended from time to time by the Fund and/or the Distributor. When
adopted, such amendments will automatically apply to existing Plans.
- Automatic Exchange Plans. Shareholders can authorize the
Transfer Agent (on the OppenheimerFunds Application or signature-
guaranteed instructions) to exchange a pre-determined amount of shares of
the Fund for shares (of the same class) of other OppenheimerFunds
automatically on a monthly, quarterly, semi-annual or annual basis under
an Automatic Exchange Plan. The minimum amount that may be exchanged to
each other fund account is $25. Exchanges made under these plans are
subject to the restrictions that apply to exchanges as set forth in "How
to Exchange Shares" in the Prospectus and below in this Statement of
Additional Information.
- Automatic Withdrawal Plans. Fund shares will be redeemed as
necessary to meet withdrawal payments. Shares acquired without a sales
charge will be redeemed first and shares acquired with reinvested
dividends and capital gains distributions will be redeemed next, followed
by shares acquired with a sales charge, to the extent necessary to make
withdrawal payments. Depending upon the amount withdrawn, the investor's
principal may be depleted. Payments made under withdrawal plans should
not be considered as a yield or income on your investment.
The Transfer Agent will administer the investor's Automatic
Withdrawal Plan (the "Plan") as agent for the investor (the "Planholder")
who executed the Plan authorization and application submitted to the
Transfer Agent. The Transfer Agent shall incur no liability to the
Planholder for any action taken or omitted by the Transfer Agent in good
faith to administer the Plan. Certificates will not be issued for shares
of the Fund purchased for and held under the Plan, but the Transfer Agent
will credit all such shares to the account of the Planholder on the
records of the Fund. Any share certificates held by a Planholder may be
surrendered unendorsed to the Transfer Agent with the Plan application so
that the shares represented by the certificate may be held under the
Plan.
For accounts subject to Automatic Withdrawal Plans, distributions of
capital gains must be reinvested in shares of the Fund, which will be done
at net asset value without a sales charge. Dividends on shares held in
the account may be paid in cash or reinvested.
Redemptions of shares needed to make withdrawal payments will be made
at the net asset value per share determined on the redemption date.
Checks or AccountLink payments of the proceeds of Plan withdrawals will
normally be transmitted three business days prior to the date selected for
receipt of the payment (receipt of payment on the date selected cannot be
guaranteed), according to the choice specified in writing by the
Planholder.
The amount and the interval of disbursement payments and the address
to which checks are to be mailed or AccountLink payments are to be sent
may be changed at any time by the Planholder by writing to the Transfer
Agent. The Planholder should allow at least two weeks' time in mailing
such notification for the requested change to be put in effect. The
Planholder may, at any time, instruct the Transfer Agent by written notice
(in proper form in accordance with the requirements of the then-current
Prospectus of the Fund) to redeem all, or any part of, the shares held
under the Plan. In that case, the Transfer Agent will redeem the number
of shares requested at the net asset value per share in effect in
accordance with the Fund's usual redemption procedures and will mail a
check for the proceeds to the Planholder.
The Plan may be terminated at any time by the Planholder by writing
to the Transfer Agent. A Plan may also be terminated at any time by the
Transfer Agent upon receiving directions to that effect from the Fund.
The Transfer Agent will also terminate a Plan upon receipt of evidence
satisfactory to it of the death or legal incapacity of the Planholder.
Upon termination of a Plan by the Transfer Agent or the Fund, shares that
have not been redeemed from the account will be held in uncertificated
form in the name of the Planholder, and the account will continue as a
dividend-reinvestment, uncertificated account unless and until proper
instructions are received from the Planholder or his or her executor or
guardian, or other authorized person.
To use Class A shares held under the Plan as collateral for a debt,
the Planholder may request issuance of a portion of the shares in
certificated form. Some certificates are not issued for Class B shares.
Upon written request from the Planholder, the Transfer Agent will
determine the number of Class A shares for which a certificate may be
issued without causing the withdrawal checks to stop because of exhaustion
of uncertificated shares needed to continue payments. However, should
such uncertificated shares become exhausted, Plan withdrawals will
terminate.
If the Transfer Agent ceases to act as transfer agent for the Fund,
the Planholder will be deemed to have appointed any successor transfer
agent to act as agent in administering the Plan.
How To Exchange Shares
As stated in the Prospectus, shares of a particular class of
OppenheimerFunds having more than one class of shares may be exchanged
only for shares of the same class of other OppenheimerFunds. Shares of
the OppenheimerFunds that have a single class without a class designation
are deemed "Class A" shares for this purpose. All OppenheimerFunds offer
Class A shares (except for Oppenheimer Strategic Diversified Income Fund),
but only the following other OppenheimerFunds currently offer Class B
shares:
Oppenheimer Main Street Income & Growth Fund
Oppenheimer Strategic Income Fund
Oppenheimer Strategic Income & Growth Fund
Oppenheimer Strategic Investment Grade Bond Fund
Oppenheimer Strategic Short-Term Income Fund
Oppenheimer New York Tax-Exempt Fund
Oppenheimer Tax-Free Bond Fund
Oppenheimer California Tax-Exempt Fund
Oppenheimer Pennsylvania Tax-Exempt Fund
Oppenheimer Florida Tax-Exempt Fund
Oppenheimer New Jersey Tax-Exempt Fund
Oppenheimer Insured Tax-Exempt Bond Fund
Oppenheimer Main Street California Tax-Exempt Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Investment Grade Bond Fund
Oppenheimer Value Stock Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer High Yield Fund
Oppenheimer Equity Income Fund
Oppenheimer Cash Reserves (Class B shares are only
available by exchange)
Oppenheimer Growth Fund
Oppenheimer Global Fund
Oppenheimer Discovery Fund
Class A shares of OppenheimerFunds may be exchanged at net asset
value for shares of any Money Market Fund. Shares of any Money Market
Fund purchased without a sales charge may be exchanged for shares of
OppenheimerFunds offered with a sales charge upon payment of the sales
charge (or, if applicable, may be used to purchase shares of
OppenheimerFunds subject to a contingent deferred sales charge). Shares
of this Fund acquired by reinvestment of dividends or distributions from
any other of the OppenheimerFunds or from any unit investment trust for
which reinvestment arrangements have been made with the Distributor may
be exchanged at net asset value for shares of any of the OppenheimerFunds.
No contingent deferred sales charge is imposed on exchanges of shares of
either class purchased subject to a contingent deferred sales charge.
However, when Class A shares acquired by exchange of Class A shares of
other OppenheimerFunds purchased subject to a Class A contingent deferred
sales charge are redeemed within 18 months of the end of the calendar
month of the initial purchase of the exchanged Class A shares, the Class
A contingent deferred sales charge is imposed on the redeemed shares (see
"Class A Contingent Deferred Sales Charge" in the Prospectus). The Class
B contingent deferred sales charge is imposed on Class B shares acquired
by exchange if they are redeemed within 6 years of the initial purchase
of the exchanged Class B shares.
When Class B shares are redeemed to effect an exchange, the
priorities described in "How To Buy Shares" in the Prospectus for the
imposition of the Class B contingent deferred sales charge will be
followed in determining the order in which the shares are exchanged.
Shareholders should take into account the effect of any exchange on the
applicability and rate of any contingent deferred sales charge that might
be imposed in the subsequent redemption of remaining shares. Shareholders
owning shares of both classes must specify whether they intend to exchange
Class A or Class B shares.
The Fund reserves the right to reject telephone or written exchange
requests submitted in bulk by anyone on behalf of 10 or more accounts. The
Fund may accept requests for exchanges of up to 50 accounts per day from
representatives of authorized dealers that qualify for this privilege. In
connection with any exchange request, the number of shares exchanged may
be less than the number requested if the exchange or the number requested
would include shares subject to a restriction cited in the Prospectus or
this Statement of Additional Information or would include shares covered
by a share certificate that is not tendered with the request. In those
cases, only the shares available for exchange without restriction will be
exchanged.
When exchanging shares by telephone, a shareholder must either have
an existing account in, or obtain and acknowledge receipt of a prospectus
of, the fund to which the exchange is to be made. For full or partial
exchanges of an account made by telephone, any special account features
such as Asset Builder Plans, Automatic Withdrawal Plans and retirement
plan contributions will be switched to the new account unless the Transfer
Agent is instructed otherwise. If all telephone lines are busy (which
might occur, for example, during periods of substantial market
fluctuations), shareholders might not be able to request exchanges by
telephone and would have to submit written exchange requests.
Shares to be exchanged are redeemed on the regular business day the
Transfer Agent receives an exchange request in proper form (the
"Redemption Date"). Normally, shares of the fund to be acquired are
purchased on the Redemption Date, but such purchases may be delayed by
either fund up to five business days if it determines that it would be
disadvantaged by an immediate transfer of the redemption proceeds. The
Fund reserves the right, in its discretion, to refuse any exchange request
that may disadvantage it (for example, if the receipt of multiple exchange
requests from a dealer might require the disposition of portfolio
securities at a time or at a price that might be disadvantageous to the
Fund).
The different OppenheimerFunds available for exchange have different
investment objectives, policies and risks, and a shareholder should assure
that the Fund selected is appropriate for his or her investment and should
be aware of the tax consequences of an exchange. For federal income tax
purposes, an exchange transaction is treated as a redemption of shares of
one fund and a purchase of shares of another. "Reinvestment Privilege,"
above, discusses some of the tax consequences of reinvestment of
redemption proceeds in such cases. The Fund, the Distributor, and the
Transfer Agent are unable to provide investment, tax or legal advice to
a shareholder in connection with an exchange request or any other
investment transaction.
Dividends, Capital Gains and Taxes
Tax Status of the Fund's Dividends and Distributions. The Federal tax
treatment of the Fund's dividends and capital gains distributions is
explained in the Prospectus under the caption "Dividends, Capital Gains
and Taxes." Dividends paid by the Fund derived from net investment income
or net short-term capital gains are taxable to shareholders as ordinary
income, whether received in cash or reinvested in additional shares.
Since the Fund's income is expected to be derived from interest rather
than dividends, dividends paid by the Fund are not expected to be eligible
for the dividends-received deduction for corporations. Long-term capital
gains distributions, if any, are taxable as long-term capital gains,
whether received in cash or reinvested and regardless of how long Fund
shares have been held. A shareholder purchasing Fund shares immediately
prior to the declaration of a dividend or capital gain distribution will
receive a distribution subject to income tax, and the distribution will
have the effect of reducing the Fund's net asset value per share by the
amount of the distribution. For information as to "backup" withholding
on dividends, see "Shareholder Account Rules and Policies - Back-Up
Withholding" in the Fund's Prospectus.
Dividends, distributions and proceeds of the redemptions of Fund
Shares represented by checks returned to the Transfer Agent by the Postal
Service as undeliverable will be invested in shares of Oppenheimer Money
Market Fund, Inc., as promptly as possible after the return of such checks
to the Transfer Agent, to enable the investor to earn a return on
otherwise idle funds.
Under the Internal Revenue Code, by December 31 each year, the Fund
must distribute 98% of its taxable investment income earned from January
1 through December 31 of that year and 98% of its capital gains realized
in the period from November 1 of the prior year through October 31 of the
current year, or else the Fund must pay an excise tax on the amounts not
distributed. While it is presently anticipated that the Fund will meet
those requirements, the Fund's Board of Trustees and the Manager might
determine in a particular year that it would be in the best interest of
shareholders for the Fund not to make such distributions at the required
levels and to pay the excise tax on the undistributed amounts. That would
reduce the amount of income or capital gains available for distribution
to shareholders.
Dividend Reinvestment in Another Fund. Shareholders of the Fund may
elect to reinvest all dividends and/or capital gains distributions in
shares of the same class of any of the other OppenheimerFunds listed in
"Reduced Sales Charges," above, at net asset value without sales charge.
Class B shareholders should be aware that as of the date of this Statement
of Additional Information, not all of the OppenheimerFunds offer Class B
shares. To elect this option, a shareholder must notify the Transfer
Agent in writing and either have an existing account in the fund selected
for reinvestment or must obtain a prospectus for that fund and an
application from the Distributor to establish an account. The investment
will be made at the net asset value per share in effect at the close of
business on the payable date of the dividend or distribution. Dividends
and/or distributions from shares of other OppenheimerFunds may be invested
in shares of this Fund on the same basis.
Additional Information About the Fund
The Custodian. Citibank, N.A. is the Custodian of the Fund's assets.
The Custodian's responsibilities include safeguarding and controlling the
Fund's portfolio securities, collecting income on the portfolio securities
and handling the delivery of such securities to and from the Fund. The
Manager has represented to the Fund that the banking relationships between
the Manager and the Custodian have been and will continue to be unrelated
to and unaffected by the relationship between the Fund and the Custodian.
It will be the practice of the Fund to deal with the Custodian in a manner
uninfluenced by any banking relationship the Custodian may have with the
Manager and its affiliates.
Independent Auditors. The independent auditors of the Fund audit the
Fund's financial statements and perform other related audit services.
They also act as auditors for certain other funds advised by the Manager
and its affiliates.
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders of Oppenheimer Mortgage Income
Fund:
We have audited the accompanying statements of investments and assets and
liabilities of Oppenheimer Mortgage Income Fund as of September 30, 1994,
andthe related statement of operations for the year then ended, the
statements ofchanges in net assets for each of the years in the two-year
period then endedand the financial highlights for each of the years in the
eight-year periodthen ended and the period from September 11, 1986
(commencement of operations)to September 30, 1986. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements and financial highlights. Our
procedures included confirmation of securities owned as of September 30,
1994, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Oppenheimer Mortgage Income Fund as of September 30, 1994, the
results of its operations for the year then ended, the changes in its net
assets for each of the years in the two-year period then ended, and the
financial highlights for each of the years in the eight-year period then
ended and the period from September 11, 1986 (commencement of operations)
to September 30, 1986, in conformity with generally accepted accounting
principles.
KPMG PEAT MARWICK LLP
_____________________
/s/ KPMG Peat Marwick LLP
Denver, Colorado
October 21, 1994
<PAGE>
STATEMENT OF INVESTMENTS September 30, 1994
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
==========================================================
==========================================================
==============
<S> <C> <C>
MORTGAGE/ASSET-BACKED OBLIGATIONS--79.8%
- ----------------------------------------------------------------------------------------------------------------------------------
AGENCY: FULL FAITH Government National Mortgage Assn.:
AND CREDIT--26.4% 10.50%, 9/15/17 $ 165,102 $ 180,067
9.50%, 7/15/18 784,126 828,383
10.50%, 11/15/18 87,801 95,782
10%, 5/15/19 1,114,199 1,199,324
10.50%, 7/15/19 735,462 802,490
9.50%, 12/15/19 1,008,601 1,065,920
9.50%, 1/15/20 481,064 508,595
10.50%, 12/15/20 172,977 188,779
10.50%, 2/15/21 113,613 124,016
10.50%, 4/15/21 61,539 66,742
9%, 7/15/21 1,312,021 1,359,897
9%, 8/15/21 5,108,409 5,294,815
7.50%, 9/15/22 3,163,666 2,986,944
8%, 1/15/23 6,904,379 6,718,858
-----------
21,420,612
- ----------------------------------------------------------------------------------------------------------------------------------
AGENCY: GOVERNMENT Federal Home Loan Mortgage Corp., 7%, Series 1548, Cl. C, 4/15/21 3,000,000
2,625,930
SPONSORED--3.2%
- ----------------------------------------------------------------------------------------------------------------------------------
PRIVATE MORTGAGE--50.2% Countrywide Funding Corp.:
6.25%, Series 1993-11, Cl. B1, 1/25/09 1,449,161 1,191,935
6.25%, Series 1993-11, Cl. B3, 2/25/09(2) 845,347 317,005
---------------------------------------------------------------------------------------------------------
First Boston Corp.:
Mtg. Securities, 7.04%, Series 1993-AFC-1, 10/25/02 3,458,335 3,187,072
Pass-Through Interest-Only Certificates, Series 94-M1:
.52%, Cl. AX, 2/15/02(3) 88,100,000 798,406
.61%, Cl. BX, 2/15/02(3) 19,300,000 180,938
.66%, Cl. CX, 2/15/02(3) 15,400,000 149,188
.82%, Cl. DX, 2/15/02(3) 2,968,000 29,680
Pass-Through Certificates, 11%, Series 94-M1, Cl. E, 2/15/14(2) 3,000,000 2,925,312
---------------------------------------------------------------------------------------------------------
Prudential Agricultural Credit, Inc. Farmer Mac Agricultural
Real Estate Trust Sr. Sub. Mtg. Pass-Through Certificates:
9.18%, Series 1992-2, Cl. B2, 1/15/03(1)(2) 936,432 712,505
9.47%, Series 1992-2, Cl. B3, 4/15/09(1)(2) 2,345,442 1,783,452
---------------------------------------------------------------------------------------------------------
Multi-Family Capital Access One, Inc., 10.6715%, Series 1, Cl. D, 1/15/24 3,576,803 3,384,550
---------------------------------------------------------------------------------------------------------
Residential Funding Corp. Mtg. Pass-Through Certificates:
8.50%, Series 1993-S10, Cl. A9, 2/25/23 2,985,123 2,957,511
7.785%, Series 1993-6, Cl. B5, 6/15/23(2) 1,973,570 1,458,592
7.97%, Series 1993-J2, Cl. B1, 6/15/23(2) 1,979,984 1,488,082
---------------------------------------------------------------------------------------------------------
Resolution Trust Corp. Commercial Mtg. Pass-Through Certificates:
9%, Series 1991-M5, Cl. A, 3/25/17 1,493,579 1,500,581
8.25%, Series 1992-CHF, Cl. C, 12/25/20 2,911,225 2,829,348
10.6403%, Series 1992-16, Cl. B3, 5/25/24(1) 4,400,000 4,457,750
9.50%, Series 1993-C1, Cl. E, 5/25/24 2,518,771 2,495,945
8.50%, Series 1993-C2, Cl. E, 3/25/25 3,072,109 3,013,068
8%, Series 1994-C1, Cl. E, 6/25/26 2,000,000 1,512,500
---------------------------------------------------------------------------------------------------------
Ryland Mortgage Securities Corp. Sub. Bonds, 6.7125%,
Series 1993-3, Cl. B2, 8/25/08(2) 1,405,405 1,051,419
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PRIVATE MORTGAGE
(CONTINUED) SE Commercial Mortgage Pass-Through Certificates, 6.65%, Series 93-01,
Cl. A1, 11/28/13 $ 2,645,823 $ 2,453,181
---------------------------------------------------------------------------------------------------------
SKW Real Estate Limited Partnership, 9.05%, Secured Note, Cl. D, 4/15/04(2) 1,000,000 952,500
-----------
40,830,520
-----------
Total Mortgage/Asset-Backed Obligations (Cost $67,707,463) 64,877,062
==========================================================
==========================================================
==============
TREASURY--20.2%
- ----------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bond, 11.50%, 11/15/95 10,000,000 10,590,619
---------------------------------------------------------------------------------------------------------
U.S. Treasury Nts., 7.25%, 5/15/04 6,000,000 5,851,871
-----------
Total Treasury (Cost $16,989,063) 16,442,490
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $84,696,526) 100.0%
81,319,552
- ----------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES -- 3,658
----------- -----------
NET ASSETS 100.0% $81,323,210
===========
===========
</TABLE>
(1) Represents the current interest rate for a variable rate security.
(2) Restricted security--See Note 5 of Notes to Financial Statements.
(3) Interest-Only Strips represent the right to receive the monthly interest
payments on an underlying pool of mortgage loans. These securities typically
decline in price as interest rates decline. Most other fixed-income securities
increase in price when interest rates decline. The principal amount of the
underlying pool represents the notional amount on which current interest is
calculated. The price of these securities is typically more sensitive to
changes in prepayment rates than traditional mortgage-backed securities (for
example, GNMA pass-throughs).
See accompanying Notes to Financial Statements.
<PAGE> 6
STATEMENT OF ASSETS AND LIABILITIES September 30, 1994
<TABLE>
<S> <C> <C>
==========================================================
==========================================================
============
ASSETS Investments, at value (cost $84,696,526)--see accompanying statement $81,319,552
--------------------------------------------------------------------------------------------------
Receivables:
Interest and principal paydowns 1,338,662
Shares of beneficial interest sold 975,620
--------------------------------------------------------------------------------------------------
Other 6,251
-----------
Total assets 83,640,085
==========================================================
==========================================================
============
LIABILITIES Bank overdraft 1,110,347
--------------------------------------------------------------------------------------------------
Payables and other liabilities:
Shares of beneficial interest redeemed 1,054,260
Distribution and service plan fees--Note 4 50,646
Other 101,622
-----------
Total liabilities 2,316,875
==========================================================
==========================================================
============
NET ASSETS $81,323,210
===========
==========================================================
==========================================================
============
COMPOSITION OF Paid-in capital $86,869,346
--------------------------------------------------------------------------------------------------
NET ASSETS Overdistributed net investment income (390,141)
--------------------------------------------------------------------------------------------------
Accumulated net realized loss from investment transactions (1,779,021)
--------------------------------------------------------------------------------------------------
Net unrealized depreciation on investments--Note 3 (3,376,974)
-----------
Net Assets $81,323,210
===========
==========================================================
==========================================================
============
NET ASSET VALUE Class A Shares:
PER SHARE Net asset value and redemption price per share (based on net assets
of $78,601,769 and 5,998,960 shares of beneficial interest outstanding) $13.10
Maximum offering price per share (net asset value plus sales
charge of 4.75% of offering price) $13.75
--------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share
(based on net assets of $2,721,441 and 207,809 shares of beneficial
interest outstanding) $13.10
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE> 7
STATEMENT OF OPERATIONS For the Year Ended September 30, 1994
<TABLE>
<S> <C>
==========================================================
==========================================================
============
INVESTMENT INCOME Interest $7,353,904
==========================================================
==========================================================
============
EXPENSES Management fees--Note 4 611,316
--------------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A--Note 4 206,668
Class B--Note 4 19,481
--------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 103,841
--------------------------------------------------------------------------------------------------
Shareholder reports 77,840
--------------------------------------------------------------------------------------------------
Custodian fees and expenses 25,244
--------------------------------------------------------------------------------------------------
Trustees' fees and expenses 17,060
--------------------------------------------------------------------------------------------------
Legal and auditing fees 16,922
--------------------------------------------------------------------------------------------------
Registration and filing fees--Class B 717
--------------------------------------------------------------------------------------------------
Other 598
----------
Total expenses 1,079,687
==========================================================
==========================================================
============
NET INVESTMENT INCOME 6,274,217
==========================================================
==========================================================
============
REALIZED AND UNREALIZED Net realized loss on investments (1,327,293)
LOSS ON INVESTMENTS
--------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments (5,744,870)
----------
Net realized and unrealized loss on investments (7,072,163)
==========================================================
==========================================================
============
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
$ (797,946)
==========
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE> 8
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
1994 1993
==========================================================
==========================================================
===========
<S> <C> <C> <C>
OPERATIONS Net investment income $ 6,274,217 $ 6,292,543
-------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments (1,327,293) 1,723,648
-------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments (5,744,870) (1,161,447)
----------- -----------
Net increase (decrease) in net assets resulting from operations (797,946) 6,854,744
==========================================================
==========================================================
===========
EQUALIZATION Net change (385,171) (908)
==========================================================
==========================================================
===========
DIVIDENDS AND Dividends from net investment income:
DISTRIBUTIONS TO Class A ($.947 and $.933 per share, respectively) (5,801,295) (6,389,654)
SHAREHOLDERS Class B ($.842 and $.315 per share, respectively) (118,798) (12,229)
-------------------------------------------------------------------------------------------------
Dividends in excess of net investment income:
Class A ($.005 per share) (30,088) --
Class B ($.005 per share) (1,042) --
-------------------------------------------------------------------------------------------------
Tax return of capital distribution:
Class A ($.038 per share) (229,563) --
Class B ($.038 per share) (7,948) --
==========================================================
==========================================================
===========
BENEFICIAL INTEREST Net decrease in net assets resulting from Class A
TRANSACTIONS beneficial interest transactions--Note 2 (7,865,844) (6,139,469)
-------------------------------------------------------------------------------------------------
Net increase in net assets resulting from Class B
beneficial interest transactions--Note 2 1,492,178 1,177,488
==========================================================
==========================================================
===========
NET ASSETS Total decrease (13,745,517) (4,510,028)
-------------------------------------------------------------------------------------------------
Beginning of year 95,068,727 99,578,755
----------- -----------
End of year [including overdistributed net investment
income of ($390,141) and ($17,162), respectively] $81,323,210 $95,068,727
===========
===========
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE> 9
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------------------
YEAR ENDED
SEPTEMBER 30,
1994 1993 1992 1991 1990 1989 1988 1987 1986(2)
==========================================================
==========================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
<C>
PER SHARE OPERATING DATA:
Net asset value, beginning
of period $14.20 $14.14 $13.70 $13.18 $13.24 $13.41 $13.14 $14.39 $14.29
Income (loss) from
investment operations:
Net investment income .94 .92 .97 1.11 1.22 1.23 1.33 1.29 .07
Net realized and
unrealized gain
(loss) on investments (1.04) .07 .45 .52 (.05) (.20) .21 (1.16) .03
------ ------ ------ ------ ------ ------ ------ ------ ------
Total income (loss) from
investment operations (.10) .99 1.42 1.63 1.17 1.03 1.54 .13 .10
- --------------------------------------------------------------------------------------------------------------------
Dividends and distributions
to shareholders:
Dividends from net
investment income (.95) (.93) (.98) (1.11) (1.23) (1.20) (1.27) (1.38) --
Dividends in excess of net
investment income (.01) -- -- -- -- -- -- -- --
Tax return of capital
distribution (.04) -- -- -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------
Total dividends and
distributions to
shareholders (1.00) (.93) (.98) (1.11) (1.23) (1.20) (1.27) (1.38) --
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end
of period $13.10 $14.20 $14.14 $13.70 $13.18 $13.24 $13.41 $13.14 $14.39
====== ====== ====== ====== ====== ======
====== ====== ======
==========================================================
==========================================================
TOTAL RETURN, AT NET ASSET
VALUE(3) (.80)% 7.29% 10.69% 12.85% 9.21% 8.12% 12.09% .87% .70%
==========================================================
==========================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $78,602 $93,893 $99,579 $91,052 $67,234 $55,483 $59,835 $55,085 $2,746
- --------------------------------------------------------------------------------------------------------------------
Average net assets
(in thousands) $85,181 $96,817 $97,712 $80,208 $60,699 $57,162 $58,892 $45,099 $2,135
- --------------------------------------------------------------------------------------------------------------------
Number of shares
outstanding
at end of period
(in thousands) 5,999 6,610 7,042 6,648 5,102 4,191 4,462 4,191 191
- --------------------------------------------------------------------------------------------------------------------
Ratios to average net
assets:
Net investment income 7.21% 6.49% 6.92% 8.22% 9.12% 9.24% 8.93% 9.81% 11.16%(4)
Expenses 1.22% 1.39% 1.40% 1.29% 1.22% 1.38% 1.12% .26% --%(4)
- --------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 78.4% 142.7% 144.6% 103.7% 47.9% 82.2% 96.0% 184.4% 0.0%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
-----------------
YEAR ENDED
SEPTEMBER 30,
1994 1993(1)
================================================
<S> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning
of period $14.21 $14.14
- ------------------------------------------------
Income (loss) from
investment operations:
Net investment income .90 .28
Net realized and
unrealized gain
(loss) on investments (1.12) .11
------ ------
Total income (loss) from
investment operations (.22) .39
- ------------------------------------------------
Dividends and distributions
to shareholders:
Dividends from net
investment income (.84) (.32)
Dividends in excess of net
investment income (.01) --
Tax return of capital
distribution (.04) --
------ ------
Total dividends and
distributions to
shareholders (.89) (.32)
- ------------------------------------------------
Net asset value, end
of period $13.10 $14.21
====== ======
================================================
TOTAL RETURN, AT NET ASSET
VALUE(3) (1.62)% 2.96%
================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $2,721 $1,176
- ------------------------------------------------
Average net assets
(in thousands) $1,951 $463
- ------------------------------------------------
Number of shares
outstanding
at end of period
(in thousands) 208 83
- ------------------------------------------------
Ratios to average net
assets:
Net investment income 6.60% 5.29%(4)
Expenses 1.93% 2.53%(4)
- ------------------------------------------------
Portfolio turnover rate(5) 78.4% 142.7%(4)
</TABLE>
(1) For the period from May 17, 1993 (inception of offering) to September 30,
1993.
(2) For the period from September 11, 1986 (commencement of operations) to
September 30, 1986.
(3) Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions reinvested
in additional shares on the reinvestment date, and redemption at the net asset
value calculated on the last business day of the fiscal period. Sales charges
are not reflected in the total returns.
(4) Annualized.
(5) The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.
Purchases and sales of investment securities (excluding short-term securities)
for the year ended September 30, 1994 were $70,145,100 and $74,034,285,
respectively.
See accompanying Notes to Financial Statements.
<PAGE> 10
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<S> <C>
==========================================================
==========================================================
===============
1. SIGNIFICANT Oppenheimer Mortgage Income Fund (the Fund), is registered under the Investment Company
Act of 1940,
ACCOUNTING POLICIES as amended, as a diversified, open-end management investment company. The Fund's
investment advisor is
Oppenheimer Management Corporation (the Manager). The Fund offers both Class A and Class B shares.
Class A shares are sold with a front-end sales charge. Class B shares may be subject to a contingent
deferred sales charge. Both classes of shares have identical rights to earnings, assets and voting
privileges, except that each class has its own distribution and/or service plan, expenses directly
attributable to a particular class and exclusive voting rights with respect to matters affecting a
single class. Class B shares will automatically convert to Class A shares six years after the date of
purchase. The following is a summary of significant accounting policies consistently followed by the
Fund.
-----------------------------------------------------------------------------------------------------
INVESTMENT VALUATION. Portfolio securities are valued at 4:00 p.m. (New York time) on each
trading
day. Long-term debt securities are valued by a portfolio pricing service approved by the Board of
Trustees. Long-term debt securities which cannot be valued by the approved portfolio pricing service
are valued by averaging the mean between the bid and asked prices obtained from two active market
makers in such securities. Short-term debt securities having a remaining maturity of 60 days or less
are valued at cost (or last determined market value) adjusted for amortization to maturity of any
premium or discount. Securities for which market quotes are not readily available are valued under
procedures established by the Board of Trustees to determine fair value in good faith.
-----------------------------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES AND GAINS AND LOSSES. Income, expenses (other than
those attributable
to a specific class) and gains and losses are allocated daily to each class of shares based upon the
relative proportion of net assets represented by such class. Operating expenses directly attributable
to a specific class are charged against the operations of that class.
-----------------------------------------------------------------------------------------------------
FEDERAL INCOME TAXES. The Fund intends to continue to comply with provisions of the Internal
Revenue
Code applicable to regulated investment companies and to distribute all of its taxable income,
including any net realized gain on investments not offset by loss carryovers, to shareholders.
Therefore, no federal income tax provision is required. At September 30, 1994, the Fund had available
for federal income tax purposes an unused capital loss carryover of approximately $731,000, $85,000
of
which will expire in 1997 and $646,000 in 1998.
-----------------------------------------------------------------------------------------------------
TRUSTEES' FEES AND EXPENSES. The Fund has adopted a nonfunded retirement plan for the Fund's
independent trustees. Benefits are based on years of service and fees paid to each trustee during the
years of service. The accumulated liability for the Fund's projected benefit obligations was $27,432
at September 30, 1994. No payments have been made under the plan.
-----------------------------------------------------------------------------------------------------
EQUALIZATION. Prior to September 30, 1993, the Fund followed the accounting practice of
equalization,
by which a portion of the proceeds from sales and costs of redemption of Fund shares equivalent on a
per share basis to the amount of undistributed net investment income was credited or charged to
undistributed income. Effective October 1, 1993, the Fund discontinued equalization accounting in
conjunction with the adoption of a daily dividend declaration policy. The cumulative effect of the
change in accounting practice resulted in a reclassification of $385,171 from undistributed net
investment income to paid-in capital.
-----------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. The Fund intends to declare dividends separately for Class
A and Class
B shares from net investment income each day the New York Stock Exchange is open for business and
pay
such dividends monthly. Distributions from net realized gains on investments, if any, will be declared
at least once each year. Prior to October 1, 1993, dividends and distributions to shareholders were
recorded on the ex-dividend date.
-----------------------------------------------------------------------------------------------------
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective October 1,
1993, the Fund adopted
Statement of Position 93-2: Determination, Disclosure, and Financial Statement Presentation of
Income, Capital Gain, and Return of Capital Distributions by Investment Companies. As a result, the
Fund changed the classification of distributions to shareholders to better disclose the differences
between financial statement amounts and distributions determined in accordance with income tax
regulations. Accordingly, subsequent to September 30, 1993, amounts have been reclassified to reflect
a decrease in paid-in capital of $50, and an increase in undistributed net investment income of $50.
During the year ended September 30, 1994, in accordance with Statement of Position 93-2, undistributed
net investment income was decreased by $73,341, undistributed capital loss was decreased by $310,852,
and paid-in capital was decreased by $237,511.
</TABLE>
<PAGE> 11
<TABLE>
<S> <C>
==========================================================
==========================================================
===============
1. SIGNIFICANT ACCOUNTING OTHER. Investment transactions are accounted for on the date the investments are
purchased or sold
POLICIES (CONTINUED) (trade date). Discount on securities purchased is amortized over the life of the respective
securities, in accordance with federal income tax requirements. Realized gains and losses on
investments and unrealized appreciation and depreciation are determined on an identified cost basis,
which is the same basis used for federal income tax purposes.
==========================================================
==========================================================
===============
2. SHARES OF The Fund has authorized an unlimited number of no par value shares of beneficial interest of each
BENEFICIAL INTEREST class. Transactions in shares of beneficial interest were as follows:
<CAPTION>
YEAR ENDED SEPTEMBER 30, 1994 YEAR ENDED SEPTEMBER
30, 1993(1)
----------------------------- --------------------------------
SHARES AMOUNT SHARES AMOUNT
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 5,291,328 $71,615,758 5,333,620 $74,887,227
Dividends reinvested 250,875 4,502,560 338,074 4,736,584
Redeemed (6,153,140) (83,984,162) (6,104,228) (85,763,280)
--------- ----------- --------- -----------
Net decrease (610,937) $(7,865,844) (432,534) $(6,139,469)
========= =========== =========
===========
---------------------------------------------------------------------------------------------------
Class B:
Sold 165,304 $ 2,352,715 100,656 $ 1,432,224
Dividends reinvested 14,319 96,532 718 10,184
Redeemed (54,560) (957,069) (18,628) (264,920)
--------- ----------- --------- -----------
Net increase 125,063 $ 1,492,178 82,746 $ 1,177,488
========= =========== =========
===========
</TABLE>
(1) For the year ended September 30, 1993 for
Class A shares and for the period from May 17,
1993 (inception of offering) to September 30,
1993 for Class B shares.
<TABLE>
<S> <C>
==========================================================
==========================================================
===============
3. UNREALIZED GAINS AND At September 30, 1994, net unrealized depreciation on investments of $3,376,974 was
composed of gross
LOSSES ON INVESTMENTS appreciation of $446,954, and gross depreciation of $3,823,928.
==========================================================
==========================================================
===============
4. MANAGEMENT FEES Management fees paid to the Manager were in accordance with the investment advisory
agreement with the
AND OTHER TRANSACTIONS Fund, which provides for an annual fee of .65% on the first $200 million of net assets,
.60% on the
WITH AFFILIATES next $200 million, .55% on the next $400 million and .50% on net assets in excess of $800
million. The
Manager voluntarily agreed to reduce its fees by .05% at each net asset level effective January 1,
1994, with a further decrease of .05% at each net asset level on July 1, 1994. The Manager has agreed
to reimburse the Fund if aggregate expenses (with specified exceptions) exceed the most stringent
applicable regulatory limit on Fund expenses.
For the year ended September 30, 1994, commissions (sales charges paid by
investors) on sales of Class A shares totaled $237,418, of which $75,572 was retained by Oppenheimer
Funds Distributor, Inc. (OFDI), a subsidiary of the Manager, as general distributor, and by an
affiliated broker/dealer. During the year ended September 30, 1994, OFDI received contingent
deferred sales charges of $2,348 upon redemption of Class B shares as reimbursement for sales
commissions advanced by OFDI at the time of sale of such shares.
Oppenheimer Shareholder Services (OSS), a division of the Manager, is the
transfer and shareholder servicing agent for the Fund, and for other registered investment
companies. OSS's total costs of providing such services are allocated ratably to these companies.
Under separate approved plans, each class may expend up to .25% of its net
assets annually to reimburse OFDI for costs incurred in connection with the personal service and
maintenance of accounts that hold shares of the Fund, including amounts paid to brokers, dealers,
banks and other financial institutions. In addition, Class B shares are subject to an asset-based
sales charge of .75% of net assets annually, to reimburse OFDI for sales commissions paid from its
own resources at the time of sale and associated financing costs. In the event of termination or
discontinuance of the Class B plan, the Board of Trustees may allow the Fund to continue payment of
the asset-based sales charge to OFDI for distribution expenses incurred on Class B shares sold prior
to termination or discontinuance of the plan. During the period ended September 30, 1994, OFDI paid
$13,423 and $39, respectively, to an affiliated broker/dealer as reimbursement for Class A and
Class B personal service and maintenance expenses and retained $19,061 as reimbursement for Class
B
sales commissions and service fee advances, as well as financing costs.
</TABLE>
<PAGE> 12
NOTES TO FINANCIAL STATEMENTS (Continued)
<TABLE>
==========================================================
==========================================================
=======
<S> <C>
5. RESTRICTED The Fund owns securities purchased in private placement transactions, without registration under the
SECURITIES Securities Act of 1933 (the Act). The securities are valued under methods approved by the Board of
Trustees as reflecting fair value. The Fund intends to invest no more than 10% of its net assets
(determined at the time of purchase) in restricted and illiquid securities, excluding securities
eligible for resale pursuant to Rule 144A of the Act that are determined to be liquid by the Board of
Trustees or by the Manager under Board-approved guidelines. Restricted and illiquid securities,
excluding securities eligible for resale pursuant to Rule 144A of the Act amount to $2,812,962, or
3.5% of the Fund's net assets, at September 30, 1994. Illiquid and/or restricted securities, including
those restricted securities that are transferable under Rule 144A of the Act, are listed below.
</TABLE>
<TABLE>
<CAPTION>
VALUATION
PER UNIT AS OF
SECURITY ACQUISITION DATE COST PER UNIT SEPTEMBER
30, 1994
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
First Boston Mortgage Securities Corp. Pass-Through
Certificates, 11%, Series 1994-M1, Cl. E, 2/15/14(1) 5/17/94 $98.85 $97.51
-----------------------------------------------------------------------------------------------------------
Countrywide Funding Corp., 6.25%, Series 1993-11,
Cl. B3, 2/25/09 12/27/93 $50.63 $37.50
-----------------------------------------------------------------------------------------------------------
Prudential Agricultural Credit, Inc. Farmer Mac Agricultural
Real Estate Trust Sr. Sub. Mtg. Pass-Through Certificates:
9.18%, Series 1992-2, Cl. B2, 1/15/03 5/26/93 $76.13 $76.09
9.47%, Series 1992-2, Cl. B3, 4/15/09 5/26/93 $72.13 $76.09
-----------------------------------------------------------------------------------------------------------
Residential Funding Corp. Mtg. Pass-Through Certificates:
7.785%, Series 1993-6, Cl. B5, 6/15/23(1) 6/10/93 $82.11 $73.91
7.97%, Series 1993-J2, Cl. B1, 6/15/23(1) 6/29/93 $83.97 $75.16
-----------------------------------------------------------------------------------------------------------
Ryland Mortgage Securities Corp. Sub. Bonds,
6.7125%, Series 1993-3, Cl. B2, 8/25/08(1) 6/9/93 $80.78 $74.81
-----------------------------------------------------------------------------------------------------------
SKW Real Estate Limited Partnership, 9.05%
Secured Note, Cl. E, 4/15/04(1) 4/29/94 $99.96 $95.25
</TABLE>
(1) Transferable under Rule 144A of the Act.
<PAGE>
<PAGE>
Appendix A
Industry Classifications
Aerospace/Defense
Air Transportation
Auto Parts Distribution
Automotive
Bank Holding Companies
Banks
Beverages
Broadcasting
Broker-Dealers
Building Materials
Cable Television
Chemicals
Commercial Finance
Computer Hardware
Computer Software
Conglomerates
Consumer Finance
Containers
Convenience Stores
Department Stores
Diversified Financial
Diversified Media
Drug Stores
Drug Wholesalers
Durable Household Goods
Education
Electric Utilities
Electrical Equipment
Electronics
Energy Services & Producers
Entertainment/Film
Environmental
Food
Gas Utilities
Gold
Health Care/Drugs
Health Care/Supplies & Services
Homebuilders/Real Estate
Hotel/Gaming
Industrial Services
Insurance
Leasing & Factoring
Leisure
Manufacturing
Metals/Mining
Nondurable Household Goods
Oil - Integrated
Paper
Publishing/Printing
Railroads
Restaurants
Savings & Loans
Shipping
Special Purpose Financial
Specialty Retailing
Steel
Supermarkets
Telecommunications - Technology
Telephone - Utility
Textile/Apparel
Tobacco
Toys
Trucking
<PAGE>
Investment Adviser
Oppenheimer Management Corporation
Two World Trade Center
New York, New York 10048-0203
Distributor
Oppenheimer Funds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer Agent and Shareholder Servicing Agent
Oppenheimer Shareholder Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048
Custodian of Portfolio Securities
Citibank, N.A.
399 Park Avenue
New York, New York 10043
Independent Auditors
KPMG Peat Marwick LLP
707 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Gordon Altman Butowsky Weitzen
Shalov & Wein
114 West 47th Street
New York, New York 10036
<PAGE>
OPPENHEIMER MORTGAGE INCOME FUND
FORM N-1A
PART C
OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits
(a) Financial Statements
1. Financial Highlights - (see Part A Prospectus): Filed
herewith.
2. Report of Independent Auditors - (see Part B, Statement of
Additional Information): Filed herewith.
3. Statement of Investments - (see Part B, Statement of
Additional Information): Filed herewith.
4. Statement of Assets and Liabilities - (see Part B, Statement
of Additional Information): Filed herewith.
5. Statement of Operations - (see Part B, Statement of
Additional Information): Filed herewith.
6. Statement of Changes in Net Assets - (see Part B, Statement
of Additional Information): Filed herewith.
7. Notes to Financial Statements - (see Part B, Statement of
Additional Information): Filed herewith.
8. Consent of Independent Auditors: Filed herewith.
(b) Exhibits
Exhibit
Number Description
1. Declaration of Trust of Registrant dated as of May 7, 1993:
Previously filed with Registrant's Post-Effective Amendment
No. 12, 11/22/93, and incorporated herein by reference.
2. By-Laws of Registrant Amended as of August 6, 1987:
Previously filed with Registrant's Post-Effective Amendment
No. 3, 1/27/88, and refiled herewith pursuant to Item 102 of
Regulation S-T and incorporated herein by reference.
3. Not applicable.
4. (i)Specimen Share Certificate for Class A Shares: Previously
filed with Registrant's Post-Effective Amendment No. 12,
11/22/93, and incorporated herein by reference.
(ii) Specimen Share Certificate for Class B Shares:
Previously filed with Registrant's Post-Effective Amendment
No. 12, 11/22/93, and incorporated herein by reference.
5. Investment Advisory Agreement dated 5/15/92: Previously
filed with Registrant's Post-Effective Amendment No. 11,
1/28/93, and refiled herewith pursuant to Item 102 of
Regulation S-T and incorporated herein by reference.
6. (i) General Distributor's Agreement dated 12/10/92:
Previously filed with Registrant's Post-Effective Amendment
No. 11, 1/28/93, and refiled herewith pursuant to Item 102
of Regulation S-T and incorporated herein by reference.
(ii) Form of Oppenheimer Funds Distributor, Inc. Dealer
Agreement: Filed with Post-Effective Amendment No. 14 to
the Registration Statement of Oppenheimer Main Street Funds,
Inc. (Reg. No. 33-17850), 9/30/94, and incorporated herein
by reference.
(iii) Form of Oppenheimer Funds Distributor Inc. Broker
Agreement: Filed with Post-Effective Amendment No. 14 to the
Registration Statement of Oppenheimer Main Street Funds,
Inc. (Reg. No. 33-17850), 9/30/94, and incorporated herein
by reference.
(iv) Broker Agreement between Oppenheimer Fund Management,
Inc. and Newbridge Securities dated October 1, 1986:
Previously filed with Post-Effective Amendment No. 25 to the
Registration Statement of Oppenheimer Growth Fund (Reg. No.
2-45272), 11/1/86, and refiled with Post-Effective Amendment
No. 45 to the Registration Statement of Oppenheimer Growth
Fund (Reg. No. 2-45272), 8/22/94, pursuant to Item 102 of
Regulation S-T, and incorporated herein by reference.
(v) Form of Oppenheimer Funds Distributor Inc. Agency
Agreement: Filed with Post-Effective Amendment No. 14 to
the Registration Statement of Oppenheimer Main Street Funds,
Inc. (Reg. No. 33-17850), 9/30/94 and incorporated herein by
reference.
7. Retirement Plan for Non-Interested Trustees or Directors
(adopted by Registrant on 6/7/90): Previously filed with
Post-Effective Amendment No. 97 to the Registration
Statement of Oppenheimer Fund (Reg. No. 2-14586), 8/30/90,
refiled with Post-Effective Amendment No. 45 to the
Registration Statement of Oppenheimer Growth Fund (Reg. No.
2-45272), 8/22/94, pursuant to Item 102 of Regulation S-T,
and incorporated herein by reference.
8. Custodian Agreement dated as of 9/10/86: Previously filed
with Registrant's Post-Effective Amendment No. 9, 1/29/92,
and refiled herewith pursuant to Item 102 of Regulation S-T
and incorporated herein by reference.
9. Not applicable.
10. Opinion and Consent of Counsel dated August 27, 1986:
Previously filed with Registrant's Pre-Effective
Amendment No. 1, 9/2/86, and refiled herewith pursuant
to Item 102 of Regulation S-T and incorporated herein by
reference.
11. Not applicable.
12. Not applicable.
13. Investment Letter dated August 15, 1986 from Oppenheimer
Management Corporation to Oppenheimer GNMA Fund:
Previously filed with Registrant's Pre-Effective
Amendment No. 1, 9/2/86 and incorporated herein by
reference.
14.(i) Form of prototype Standardized and Non-Standardized
Profit Sharing Plan and Money Purchase Pension Plan for
self-employed persons and corporations: Filed
herewith.
(ii) Form of Individual Retirement Account Trust Agreement:
Filed with Post-Effective Amendment No. 21 to the
Registration Statement of Oppenheimer U.S. Government Trust
(Reg. No. 2-76645), 8/25/93, and incorporated herein by
reference.
(iii) Form of Tax Sheltered Retirement Plan and Custody
Agreement for employees of public schools and tax-exempt
organizations: Filed with Post-Effective Amendment No. 47
to the Registration Statement of Oppenheimer Growth Fund
(Reg. No. 2-45272), 10/21/94, and incorporated herein by
reference.
(iv) Form of Simplified Employee Pension IRA: Previously
filed with Post-Effective Amendment No. 42 to the
Registration Statement of Oppenheimer Equity Income Fund
(Reg. No. 2-33043), 10/28/94, and incorporated herein by
reference.
(v) Form of SAR-SEP Simplified Employee Pension IRA: Filed
herewith.
15.(i) Amended Service Plan and Agreement for Class A Shares
dated 6/10/93 under Rule 12b-1 of the Investment Company Act
of 1940: Filed with Post-Effective Amendment No. 13 to
Registrant's Registration Statement, 1/19/94, and
incorporated herein by reference.
(ii) Distribution and Service Plan and Agreement for Class
B Shares dated 2/10/94 under Rule 12b-1 of the Investment
Company Act of 1940: Filed herewith.
16. Performance Data Computation Schedule: Filed herewith.
17.(a) Financial Data Schedule for Class A Shares: Filed
herewith.
(b) Financial Data Schedule for Class B Shares: Filed
herewith.
-- Powers of Attorney (including certified Board resolutions):
Previously filed withRegistrant's Post-Effective Amendment
No. 12, 11/22/93, and incorporated herein by reference.
-- Resignation of Edmund T. Delaney - Filed herewith.
ITEM 25. Persons Controlled by or Under Common Control with Registrant
None.
ITEM 26. Number of Holders of Securities
Number of Record
Holders as of
Title of Class December 30, 1994
Class A Shares of Beneficial Interest 5,725
Class B Shares of Beneficial Interest 229
ITEM 27. Indemnification
Reference is made to paragraphs (c) through (g) of Section 7(c) of
Article SEVENTH of Registrant's Declaration of Trust filed as Exhibit
24(b)(1) to this Registration Statement.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers and
controlling persons of Registrant pursuant to the foregoing provisions or
otherwise, Registrant has been advised that in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by Registrant of expenses incurred or
paid by a trustee, officer or controlling person of Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
trustee, officer or controlling person, Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed
in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser
(a) Oppenheimer Management Corporation is the investment adviser
of the Registrant; it and certain subsidiaries and affiliates act in the
same capacity to other registered investment companies as described in
Parts A and B hereof and listed in Item 28(b) below.
(b)There is set forth below information as to any other business,
profession, vocation or employment of a substantial nature in which each
officer and director of Oppenheimer Management Corporation is, or at any
time during the past two fiscal years has been, engaged for his/her own
account or in the capacity of director, officer, employee, partner or
trustee.
<TABLE>
<CAPTION>
Name & Current Position
with Oppenheimer Other Business and Connections
Management Corporation During the Past Two Years
- ----------------------- ------------------------------
<S> <C>
Lawrence Apolito, None.
Vice President
James C. Ayer, Jr., Vice President and Portfolio Manager of
Assistant Vice President Oppenheimer Gold & Special Minerals Fund and
Oppenheimer Global Emerging Growth Fund.
Victor Babin, None.
Senior Vice President
Robert J. Bishop Assistant Treasurer of the OppenheimerFunds
Assistant Vice President (listed below); previously a Fund Controller
for Oppenheimer Management Corporation (the
"Manager").
Christopher O. Blunt, Vice President of Oppenheimer Funds
Vice President Distributor, Inc. Formerly a Vice President
of CIC/DISC Subsidiary.
George Bowen Treasurer of the New York-based
Senior Vice President OppenheimerFunds; Vice President, Secretary
and Treasurer and Treasurer of the Denver-based
OppenheimerFunds. Vice President and
Treasurer of Oppenheimer Funds Distributor,
Inc. (the "Distributor") and HarbourView
Asset Management Corporation
("HarbourView"), an investment adviser
subsidiary of OMC; Senior Vice President,
Treasurer, Assistant Secretary and a
director of Centennial Asset Management
Corporation ("Centennial"), an investment
adviser subsidiary of the Manager; Vice
President, Treasurer and Secretary of
Shareholder Services, Inc. ("SSI") and
Shareholder Financial Services, Inc.
("SFSI"), transfer agent subsidiaries of
OMC; President, Treasurer and Director of
Centennial Capital Corporation; Vice
President and Treasurer of Main Street
Advisers; formerly Senior Vice President/
Comptroller and Secretary of Oppenheimer
Asset Management Corporation ("OAMC"), an
investment adviser which was a subsidiary of
the OMC.
Michael A. Carbuto, Vice President and Portfolio Manager of
Vice President Oppenheimer Tax-Exempt Cash Reserves,
Centennial California Tax Exempt Trust,
Centennial New York Tax Exempt Trust and
Centennial Tax Exempt Trust; Vice President
of Centennial.
William Colbourne, Formerly, Director of Alternative Staffing
Assistant Vice President Resources, and Vice President of Human
Resources, American Cancer Society.
Lynn Coluccy, Vice President Formerly Vice President\Director of Internal
Audit of the Manager.
O. Leonard Darling, Formerly Co-Director of Fixed Income for
Executive Vice President State Street Research & Management Co.
Robert A. Densen, None.
Vice President
Robert Doll, Jr., Vice President and Portfolio Manager of
Executive Vice President Oppenheimer Growth Fund and Oppenheimer
Target Fund; Senior Vice President and
Portfolio Manager of Strategic Income &
Growth Fund.
John Doney, Vice President Vice President and Portfolio Manager of
Oppenheimer Equity Income Fund.
Andrew J. Donohue, Secretary of the New York-based
Executive Vice President OppenheimerFunds; Vice President of the
& General Counsel Denver-based OppenheimerFunds; Executive
Vice President, Director and General Counsel
of the Distributor; formerly Senior Vice
President and Associate General Counsel of
the Manager and the Distributor.
Kenneth C. Eich, Treasurer of Oppenheimer Acquisition
Executive Vice President/ Corporation
Chief Financial Officer
George Evans, Vice President Vice President and Portfolio Manager of
Oppenheimer Global Securities Fund.
Scott Farrar, Assistant Treasurer of the OppenheimerFunds;
Assistant Vice President previously a Fund Controller for the
Manager.
Katherine P.Feld Vice President and Secretary of Oppenheimer
Vice President and Funds Distributor, Inc.; Secretary of
Secretary HarbourView, Main Street Advisers, Inc. and
Centennial; Secretary, Vice President and
Director of Centennial Capital Corp.
Jon S. Fossel, President and director of Oppenheimer
Chairman of the Board, Acquisition Corp. ("OAC"), the Manager's
Chief Executive Officer parent holding company; President, CEO and
and Director a director of HarbourView; a director of SSI
and SFSI; President, Director, Trustee, and
Managing General Partner of the Denver-based
OppenheimerFunds; formerly President of the
Manager. President and Chairman of the Board
of Main Street Advisers, Inc.
Robert G. Galli, Trustee of the New York-based
Vice Chairman OppenheimerFunds; Vice President and Counsel
of OAC; formerly he held the following
positions: a director of the Distributor,
Vice President and a director of HarbourView
and Centennial, a director of SFSI and SSI,
an officer of other OppenheimerFunds and
Executive Vice President & General Counsel
of the Manager and the Distributor.
Linda Gardner, None.
Assistant Vice President
Ginger Gonzalez, Formerly 1st Vice President/Director of
Vice President Creative Services for Shearson Lehman
Brothers.
Dorothy Grunwager, None.
Assistant Vice President
Caryn Halbrecht, Vice President and Portfolio Manager of
Vice President Oppenheimer Insured Tax-Exempt Bond Fund and
Oppenheimer Intermediate Tax Exempt Bond
Fund; an officer of other OppenheimerFunds;
formerly Vice President of Fixed Income
Portfolio Management at Bankers Trust.
Barbara Hennigar, President and Director of Shareholder
President and Chief Financial Service, Inc.
Executive Officer of
Oppenheimer Shareholder
Services, a division of OMC.
Alan Hoden, Vice President None.
Merryl Hoffman, None.
Vice President
Scott T. Huebl, None.
Assistant Vice President
Jane Ingalls, Formerly a Senior Associate with Robinson,
Assistant Vice President Lake/Sawyer Miller.
Stephen Jobe, None.
Vice President
Avram Kornberg, Formerly a Vice President with Bankers
Vice President Trust.
Paul LaRocco, Portfolio Manager of Oppenheimer Capital
Assistant Vice President Appreciation Fund; Associate Portfolio
Manager of Oppenheimer Discovery Fund and
Oppenheimer Time Fund. Formerly a
Securities Analyst for Columbus Circle
Investors.
Mitchell J. Lindauer, None.
Vice President
Loretta McCarthy, None.
Senior Vice President
Bridget Macaskill, Director of HarbourView; Director of Main
President and Director Street Advisers, Inc.; and Chairman of
Shareholder Services, Inc.
Sally Marzouk, None.
Vice President
Denis R. Molleur, None.
Vice President
Kenneth Nadler, None.
Vice President
David Negri, Vice President and Portfolio Manager of
Vice President Oppenheimer Strategic Bond Fund, Oppenheimer
Multiple Strategies Fund, Oppenheimer
Strategic Investment Grade Bond Fund,
Oppenheimer Asset Allocation Fund,
Oppenheimer Strategic Diversified Income
Fund, Oppenheimer Strategic Income Fund,
Oppenheimer Strategic Income & Growth Fund,
Oppenheimer Strategic Short-Term Income
Fund, Oppenheimer High Income Fund and
Oppenheimer Bond Fund; an officer of other
OppenheimerFunds.
Barbara Niederbrach, None.
Assistant Vice President
Stuart Novek, Formerly a Director Account Supervisor for
Vice President J. Walter Thompson.
Robert A. Nowaczyk, None.
Vice President
Julia O'Neal, None.
Assistant Vice President
Robert E. Patterson, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Main Street California Tax-
Exempt Fund, Oppenheimer Insured Tax-Exempt
Bond Fund, Oppenheimer Intermediate Tax-
Exempt Bond Fund, Oppenheimer Florida Tax-
Exempt Fund, Oppenheimer New Jersey Tax-
Exempt Fund, Oppenheimer Pennsylvania Tax-
Exempt Fund, Oppenheimer California Tax-
Exempt Fund, Oppenheimer New York Tax-Exempt
Fund and Oppenheimer Tax-Free Bond Fund;
Vice President of the New York Tax-Exempt
Income Fund, Inc.; Vice President of
Oppenheimer Multi-Sector Income Trust.
Tilghman G. Pitts III, Chairman and Director of the Distributor.
Executive Vice President
and Director
Jane Putnam, Associate Portfolio Manager of Oppenheimer
Assistant Vice President Growth Fund and Oppenheimer Target Fund and
Portfolio Manager for Oppenheimer Variable
Account Funds-Growth Fund; Senior Investment
Officer and Portfolio Manager with Chemical
Bank.
Russell Read, Formerly an International Finance Consultant
Assistant Vice President for Dow Chemical.
Thomas Reedy, Vice President of Oppenheimer Multi-Sector
Vice President Income Trust and Oppenheimer Multi-
Government Trust; an officer of other
OppenheimerFunds; formerly a Securities
Analyst for the Manager.
David Rosenberg, Vice President and Portfolio Manager of
Vice President Oppenheimer Limited-Term Government Fund and
Oppenheimer U.S. Government Trust. Formerly
Vice President and Senior Portfolio Manager
for Delaware Investment Advisors.
Richard H. Rubinstein, Vice President and Portfolio Manager of
Vice President Oppenheimer Asset Allocation Fund,
Oppenheimer Fund and Oppenheimer Multiple
Strategies Fund; an officer of other
OppenheimerFunds; formerly Vice President
and Portfolio Manager/Security Analyst for
Oppenheimer Capital Corp., an investment
adviser.
Lawrence Rudnick, Formerly Vice President of Dollar Dry Dock
Assistant Vice President Bank.
Ellen Schoenfeld, None.
Assistant Vice President
Nancy Sperte, None.
Senior Vice President
Donald W. Spiro, President and Trustee of the New York-based
Chairman Emeritus OppenheimerFunds; formerly Chairman of the
and Director Manager and the Distributor.
Arthur Steinmetz, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Strategic Diversified Income
Fund, Oppenheimer Strategic Income Fund,
Oppenheimer Strategic Income & Growth Fund,
Oppenheimer Strategic Investment Grade Bond
Fund, Oppenheimer Strategic Short-Term
Income Fund; an officer of other
OppenheimerFunds.
Ralph Stellmacher, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Champion High Yield Fund and
Oppenheimer High Yield Fund; an officer of
other OppenheimerFunds.
John Stoma, Vice President Formerly Vice President of Pension Marketing
with Manulife Financial.
James C. Swain, Chairman, CEO and Trustee, Director or
Vice Chairman of the Managing Partner of the Denver-based
Board of Directors OppenheimerFunds; President and a Director
and Director of Centennial; formerly President and
Director of OAMC, and Chairman of the Board
of SSI.
James Tobin, Vice President None.
Jay Tracey, Vice President Vice President of the Manager; Vice
President and Portfolio Manager of
Oppenheimer Time Fund and Oppenheimer
Discovery Fund. Formerly Managing Director
of Buckingham Capital Management.
Gary Tyc, Vice President, Assistant Treasurer of the Distributor and
Assistant Secretary SFSI.
and Assistant Treasurer
Ashwin Vasan, Vice President of Oppenheimer Multi-Sector
Vice President Income Trust and Oppenheimer Multi-
Government Trust: an officer of other
OppenheimerFunds.
Valerie Victorson, None.
Vice President
John Wallace, Vice President and Portfolio Manager of
Vice President Oppenheimer Total Return Fund, and
Oppenheimer Main Street Income and Growth
Fund; an officer of other OppenheimerFunds;
formerly a Securities Analyst and Assistant
Portfolio Manager for the Manager.
Dorothy Warmack, Vice President and Portfolio Manager of
Vice President Daily Cash Accumulation Fund, Inc.,
Oppenheimer Cash Reserves, Centennial
America Fund, L.P., Centennial Government
Trust and Centennial Money Market Trust;
Vice President of Centennial.
Christine Wells, None.
Vice President
William L. Wilby, Vice President and Portfolio Manager of
Senior Vice President Oppenheimer Global Fund and Oppenheimer
Global Growth & Income Fund; Vice President
of HarbourView; an officer of other
OppenheimerFunds.
Carol Wolf, Vice President and Portfolio Manager of
Vice President Oppenheimer Money Market Fund, Inc.,
Centennial America Fund, L.P., Centennial
Government Trust, Centennial Money Market
Trust and Daily Cash Accumulation Fund,
Inc.; Vice President of Oppenheimer Multi-
Sector Income Trust; Vice President of
Centennial.
Robert G. Zack, Associate General Counsel of the Manager;
Senior Vice President Assistant Secretary of the OppenheimerFunds;
and Assistant Secretary Assistant Secretary of SSI, SFSI; an officer
of other OppenheimerFunds.
Eva A. Zeff, Vice President and Portfolio Manager of
Assistant Vice President Oppenheimer Mortgage Income Fund; an officer
of other OppenheimerFunds; formerly a
Securities Analyst for the Manager.
Arthur J. Zimmer, Vice President and Portfolio Manager of
Vice President Centennial America Fund, L.P., Oppenheimer
Money Fund, Centennial Government Trust,
Centennial Money Market Trust and Daily Cash
Accumulation Fund, Inc.; Vice President of
Oppenheimer Multi-Sector Income Trust; Vice
President of Centennial; an officer of other
OppenheimerFunds.
</TABLE>
The OppenheimerFunds include the New York-based OppenheimerFunds
and the Denver-based OppenheimerFunds set forth below:
New York-based OppenheimerFunds
Oppenheimer Asset Allocation Fund
Oppenheimer California Tax-Exempt Fund
Oppenheimer Discovery Fund
Oppenheimer Global Emerging Growth Fund
Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer Money Market Fund, Inc.
Oppenheimer Mortgage Income Fund
Oppenheimer Multi-Government Trust
Oppenheimer Multi-Sector Income Trust
Oppenheimer Multi-State Tax-Exempt Trust
Oppenheimer New York Tax-Exempt Trust
Oppenheimer Fund
Oppenheimer Target Fund
Oppenheimer Tax-Free Bond Fund
Oppenheimer Time Fund
Oppenheimer U.S. Government Trust
Denver-based OppenheimerFunds
Oppenheimer Cash Reserves
Centennial America Fund, L.P.
Centennial California Tax Exempt Trust
Centennial Government Trust
Centennial Money Market Trust
Centennial New York Tax Exempt Trust
Centennial Tax Exempt Trust
Daily Cash Accumulation Fund, Inc.
The New York Tax-Exempt Income Fund, Inc.
Oppenheimer Champion High Yield Fund
Oppenheimer Equity Income Fund
Oppenheimer High Yield Fund
Oppenheimer Integrity Funds
Oppenheimer Limited-Term Government Fund
Oppenheimer Main Street Funds, Inc.
Oppenheimer Strategic Funds Trust
Oppenheimer Strategic Income & Growth Fund
Oppenheimer Strategic Investment Grade Bond Fund
Oppenheimer Strategic Short-Term Income Fund
Oppenheimer Tax-Exempt Bond Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Variable Account Funds
The address of Oppenheimer Management Corporation, the New York-
based OppenheimerFunds, Oppenheimer Funds Distributor, Inc., Harbourview
Asset Management Corp., Oppenheimer Partnership Holdings, Inc., and
Oppenheimer Acquisition Corp. is Two World Trade Center, New York, New
York 10048-0203.
The address of the Denver-based OppenheimerFunds, Shareholder
Financial Services, Inc., Shareholder Services, Inc., Oppenheimer
Shareholder Services, Centennial Asset Management Corporation, Centennial
Capital Corp., and Main Street Advisers, Inc. is 3410 South Galena Street,
Denver, Colorado 80231.
Item 29. Principal Underwriter
(a) Oppenheimer Funds Distributor, Inc. is the Distributor of
Registrant's shares. It is also the Distributor of each of the other
registered open-end investment companies for which Oppenheimer Management
Corporation is the investment adviser, as described in Part A and B of
this Registration Statement and listed in Item 28(b) above.
(b) The directors and officers of the Registrant's principal
underwriter are:
<TABLE>
<CAPTION>
Positions and
Name & Principal Positions & Offices Offices with
Business Address with Underwriter Registrant
- ---------------- ------------------- -------------
<S> <C> <C>
George Clarence Bowen+ Vice President & Treasurer Treasurer
Christopher Blunt Vice President None
6 Baker Avenue
Westport, CT 06880
Julie Bowers Vice President None
21 Dreamwold Road
Scituate, MA 02066
Peter W. Brennan Vice President None
1940 Cotswold Drive
Orlando, FL 32825
Mary Ann Bruce* Senior Vice President - None
Financial Institution Div.
Robert Coli Vice President None
12 Whitetail Lane
Bedminster, NJ 07921
Ronald T. Collins Vice President None
710-3 E. Ponce DeLeon Ave.
Decatur, GA 30030
Ronald Corlew Vice President None
1020 Montecito Drive
Los Angeles, CA 90031
Mary Crooks+ Vice President None
Paul Della Bovi
750 West Broadway
Apt. 5M
Long Beach, NY 11561
Andrew John Donohue* Executive Vice Secretary
President & Director
Wendy H. Ehrlich Vice President None
4 Craig Street
Jericho, NY 11753
Kent Elwell Vice President None
41 Craig Place
Cranford, NJ 07016
John Ewalt Vice President None
2301 Overview Dr. NE
Tacoma, WA 98422
Gregory Farley Vice President - None
1116 Westbury Circle Financial Institution Div.
Eagan, MN 55123
Katherine P. Feld* Vice President & Secretary None
Mark Ferro Vice President None
43 Market Street
Breezy Point, NY 11697
Wendy Fishler* Vice President - None
Financial Institution Div.
Wayne Flanagan Vice President - None
36 West Hill Road Financial Institution Div.
Brookline, NH 03033
Ronald R. Foster Vice President - None
11339 Avant Lane Eastern Division Manager
Cincinnati, OH 45249
Patricia Gadecki Vice President None
6026 First Ave. South,
Apt. 10
St. Petersburg, FL 33707
Luiggino Galleto Vice President None
10239 Rougemont Lane
Charlotte, NC 28277
Mark Giles Vice President - None
5506 Bryn Mawr Financial Institution Div.
Dallas, TX 75209
Ralph Grant* Vice President/National None
Sales Manager - Financial
Institution Div.
Sharon Hamilton Vice President None
720 N. Juanita Ave. - #1
Redondo Beach, CA 90277
Carla Jiminez Vice President None
609 Chimney Bluff Drive
Mt. Pleasant, SC 29464
Terry Lee Kelley Vice President - None
1431 Woodview Lane Financial Institution Div.
Commerce Township, MI 48382
Michael Keogh* Vice President None
Richard Klein Vice President None
4011 Queen Avenue South
Minneapolis, NM 55410
Hans Klehmet II Vice President None
26542 Love Lane
Ramona, CA 92065
Ilene Kutno* Assistant Vice President None
Wayne A. LeBlang Vice President - None
23 Fox Trail Director Eastern Div.
Lincolnshire, IL 60069
Dawn Lind Vice President - None
7 Maize Court Financial Institution Div.
Melville, NY 11747
James Loehle Vice President None
30 John Street
Cranford, NJ 07016
Laura Mulhall* Vice President - None
Director of Key Accounts
Gina Munson Vice President None
120 Fisherville Road
Apt. 136
Concord, NH 03301
Charles Murray Vice President None
50 Deerwood Drive
Littleton, CO 80127
Patrick Palmer Vice President None
958 Blue Mountain Cr.
West Lake Village, CA 91362
Randall Payne Vice President - None
1307 Wandering Way Dr. Financial Institution Div.
Charlotte, NC 28226
Gayle Pereira Vice President None
2707 Via Arboleda
San Clemente, CA 92672
Charles K. Pettit Vice President None
1900 Eight Avenue
San Francisco, CA 94116
Tilghman G. Pitts, III* Chairman & Director None
Elaine Puleo* Vice President - None
Financial Institution Div.
Minnie Ra Vice President - None
109 Peach Street Financial Institution Div.
Avenel, NJ 07001
David Robertson Vice President None
9 Hawks View
Hoeoye Falls, NY 14472
Ian Robertson Vice President None
4204 Summit Wa
Marietta, GA 30066
Robert Romano Vice President None
1512 Fallingbrook Drive
Fishers, IN 46038
James Ruff* President None
Timothy Schoeffler Vice President None
3118 N. Military Road
Arlington, VA 22207
Mark Schon Vice President None
10483 E. Corrine Dr.
Scottsdale, AZ 85259
Michael Sciortino Vice President None
785 Beau Chene Dr.
Mandeville, LA 70448
James A. Shaw Vice President - None
5155 West Fair Place Financial Institution Div.
Littleton, CO 80123
Robert Shore Vice President - None
26 Baroness Lane Financial Institution Div.
Laguna Niguel, CA 92677
Peggy Spilker Vice President - None
2017 N. Cleveland, #2 Financial Institution Div.
Chicago, IL 60614
Michael Stenger Vice President None
C/O America Building
30 East Central Pkwy
Suite 1008
Cincinnati, OH 45202
Paul Stickney Vice President None
1314 Log Cabin Lane
St. Louis, MO 63124
George Sweeney Vice President None
1855 O'Hara Lane
Middletown, PA 17057
Philip St. John Trimble Vice President None
2213 West Homer
Chicago, IL 60647
Gary Paul Tyc+ Assistant Treasurer None
Mark Stephen Vandehey+ Vice President None
Gregory K. Wilson Vice President None
2 Side Hill Road
Westport, CT 06880
Bernard J. Wolocko Vice President None
33915 Grand River
Farmington, MI 48335
William Harvey Young+ Vice President None
* Two World Trade Center, New York, NY 10048-0203
+ 3410 South Galena St., Denver, CO 80231
</TABLE>
(c) Not applicable.
Item 30. Location of Accounts and Records
The accounts, books and other documents required to be maintained by
Registrant pursuant to Section 31(a) of the Investment Company Act of 1940
and rules promulgated thereunder are in the possession of Oppenheimer
Management Corporation at its offices at 3410 South Galena Street, Denver,
Colorado 80231.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and/or the
Investment Company Act of 1940, the Registrant certifies that it meets all
the requirements for effectiveness of this Registration Statement pursuant
to Rule 485(b) under the Securities Act of 1933 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of New York
on the 13th day of January, 1995.
OPPENHEIMER MORTGAGE INCOME FUND
By: /s/ Donald W. Spiro*
----------------------------------------
Donald W. Spiro, President
Attest:
/s/ Andrew J. Donohue*
_ _ _ _ _ _ _ _ _ _ _ _
Andrew J. Donohue, Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities on the dates indicated:
Signatures Title Date
- ---------- ----- ----
/s/ Leon Levy* Chairman of the
- -------------- Board of Trustees January 13, 1995
Leon Levy
/s/ Donald W. Spiro* President, Principal
- -------------------- Executive Officer
Donald W. Spiro and Trustee January 13, 1995
/s/ George Bowen* Treasurer and
- ----------------- Principal Financial
George Bowen and Accounting
Officer January 13, 1995
/s/ Leo Cherne* Trustee January 13, 1995
- ---------------
Leo Cherne
/s/ Robert G. Galli* Trustee January 13, 1995
- -------------------
Robert G. Galli
/s/ Benjamin Lipstein* Trustee January 13, 1995
- ----------------------
Benjamin Lipstein
/s/ Elizabeth B. Moynihan* Trustee January 13, 1995
- --------------------------
Elizabeth B. Moynihan
/s/ Kenneth A. Randall* Trustee January 13, 1995
- -----------------------
Kenneth A. Randall
/s/ Edward V. Regan* Trustee January 13, 1995
- --------------------
Edward V. Regan
/s/ Russell S. Reynolds, Jr.* Trustee Janaury 13, 1995
- -----------------------------
Russell S. Reynolds, Jr.
/s/ Sidney M. Robbins* Trustee January 13, 1995
- ----------------------
Sidney M. Robbins
/s/ Pauline Trigere* Trustee January 13, 1995
- --------------------
Pauline Trigere
/s/ Clayton K. Yeutter* Trustee January 13, 1995
- -----------------------
Clayton K. Yeutter
*By: /s/ Robert G. Zack
- --------------------------------
Robert G. Zack, Attorney-in-Fact
<PAGE>
OPPENHEIMER MORTGAGE INCOME FUND
FORM N-1A
EXHIBIT INDEX
-------------
Item No. Description
- -------- -----------
24(a)8 Consent of Independent Auditors
24(b)2 By-Laws of Registrant Amended as of
August 6, 1987
24(b)5 Investment Advisory Agreement dated
May 15, 1992
24(b)6(i) General Distributor's Agreement dated
December 10, 1992
24(b)8 Custodian Agreement dated as of
9/10/86
24(b)10 Opinion and Consent of Counsel dated
August 27, 1986
24(b)14(i) Form of prototype Standardized and
Non-Standardized Profit Sharing Plans
and Money Purchase Pension Plans for
self-employed
24(b)14(v) Form of SAR-SEP Simplified Employee
Pension IRA
24(b)15(ii) Distribution and Service Plan and
Agreement for Class B Shares dated
2/10/94
24(b)16 Performance Data Computation Schedule
24(b)17(a) Financial Data Schedule for Class A Shares
24(b)17(b) Financial Data Schedule for Class B Shares
- -- Resignation of Edmund T. Delaney
INDEPENDENT AUDITOR'S CONSENT
The Board of Trustees
Oppenheimer Mortgage Income Fund:
We consent to the use of our report dated October 21, 1994 included herein
and to the reference to our firm under the heading "Financial Highlights"
in the Prospectus.
/s/ KPMG Peat Marwick LLP
-------------------------
KPMG Peat Marwick LLP
Denver, Colorado
January 10, 1995
PROSP\490CON
OPPENHEIMER GNMA FUND
BY-LAWS
(amended as of 8/6/87)
ARTICLE I
SHAREHOLDERS
Section 1. Place of Meeting. All meetings of the Shareholders
(which terms as used herein shall, together with all other terms defined
in the Declaration of Trust, have the same meaning as in the Declaration
of Trust) shall be held at the principal office of the Fund or at such
other place as may from time to time be designated by the Board of
Trustees and stated in the notice of meeting.
Section 2. Shareholder Meetings. Meetings of the Shareholders for
any purpose or purposes may be called by the Chairman of the Board of
Trustees, if any, or by the President or by the Board of Trustees and
shall be called by the Secretary upon receipt of the request in writing
signed by Shareholders holding not less than one third in amount of the
entire number of Shares issued and outstanding and entitled to vote
thereat. Such request shall state the purpose or purposes of the proposed
meeting. In addition, meetings of the Shareholders shall be called by the
Board of Trustees upon receipt of the request in writing signed by
Shareholders that hold not less than ten percent in amount of the entire
number of Shares issued and outstanding and entitled to vote thereat,
stating that the purpose of the proposed meeting is the removal of a
Trustee.
Section 3. Notice of Meetings of Shareholders. Not less than ten
days' and not more than 120 days' written or printed notice of every
meeting of Shareholders, stating the time and place thereof (and the
general nature of the business proposed to be transacted at any special
or extraordinary meeting), shall be given to each Shareholder entitled to
vote thereat by leaving the same with him or at his residence or usual
place of business or by mailing it, postage prepaid and addressed to him
at his address as it appears upon the books of the Fund.
No notice of the time, place or purpose of any meeting of
Shareholders need be given to any Shareholder who attends in person or by
proxy or to any Shareholder who, in writing executed and filed with the
records of the meeting, either before or after the holding thereof, waives
such notice.
Section 4. Record Dates. The Board of Trustees may fix, in
advance, a date, not exceeding 120 days and not less than ten days
preceding the date of any meeting of Shareholders, and not exceeding 120
days preceding any dividend payment date or any date and entitled to
receive such dividends or rights for the allotment of rights, as a record
date for the determination of the Shareholders entitled to receive such
dividend or rights, as the case may be; and only Shareholder of record on
such date and entitled to receive such dividends or rights shall be
entitled to notice of and to vote at such meeting or to receive such
dividends or rights, as the case may be.
Section 5. Access to Shareholder List. The Board of Trustees
shall make available a list of the names and addresses of all shareholders
as recorded on the books of the Fund, upon receipt of the request in
writing signed by not less than ten Shareholders (who have been such for
at least six months) holding Shares of the Fund valued at $25,000 or more
at current offering price (as defined in the Fund's Prospectus), or
holding not less than one percent in amount of the entire number of shares
of the Fund issued and outstanding; such request must state that such
Shareholders wish to communicate with other Shareholders with a view to
obtaining signatures to a request for a meeting pursuant to Section 2 of
Article II of these By-Laws and accompanied by a form of communication to
the Shareholders. The Board of Trustees may, in its discretion, satisfy
its obligation under this Section 5 by either making available the
Shareholder List to such Shareholders at the principal offices of the
Fund, or at the offices of the Fund's transfer agents, during regular
business hours, or by mailing a copy of such Shareholders' proposed
communication and form of request, at their expense, to all other
Shareholders.
Section 6. Quorum, Adjournment of Meetings. The presence in
person or by proxy of the holders of record of more than 50% of the Shares
of the stock of the Fund issued and outstanding and entitled to vote
thereat, shall constitute a quorum at all meetings of the Shareholders.
If at any meeting of the Shareholders there shall be less than a quorum
present, the Shareholders present at such meeting may, without further
notice, adjourn the same from time to time until a quorum shall attend,
but no business shall be transacted at any such adjourned meeting except
as might have been lawfully transacted had the meeting not been adjourned.
Section 7. Voting and Inspectors. At all meetings of
Shareholders, every Shareholder or record entitled to vote thereat shall
be entitled to vote at such meeting either in person or by proxy appointed
by instrument in writing subscribed by such Shareholder or his duly
authorized attorney-in-fact.
All elections of Trustees shall be had by a plurality of the votes
cast and all questions shall be decided by a majority of the votes cast,
in each case at a duly constituted meeting, except as otherwise provided
in the Declaration of Trust or in these By-Laws or by specific statutory
provision superseding the restrictions and limitations contained in the
Declaration of Trust or in these By-Laws.
At any election of Trustees, the Board of Trustees prior thereto may,
or, if they have not so acted, the Chairman of the meeting may, and upon
the request of the holders of ten percent (10%) of the Shares entitled to
vote at such election shall, appoint two inspectors of election who shall
first subscribe an oath or affirmation to execute faithfully the duties
of inspectors at such election with strict impartiality and according to
the best of their ability, and shall after the election make a certificate
of the result of the vote taken. No candidate for the office of Trustee
shall be appointed such Inspector.
The Chairman of the meeting may cause a vote by ballot to be taken
upon any election of the matter, and such vote shall be taken upon the
request of the holders of ten percent (10%) of the Shares entitled to vote
on such election or matter.
Section 8. Conduct of Shareholders' Meetings. The meetings of the
Shareholders shall be presided over by the Chairman of the Board of
Trustees, if any, or if he shall not be present, by the President, or if
he shall not be present, by a Vice-President, or if neither the Chairman
of the Board of Trustees, the President nor any Vice-President is present,
by a chairman to be elected at the meeting. The Secretary of the Fund,
if present, shall act as Secretary of such meetings, or if he is not
present, an Assistant Secretary shall so act, or if neither the Secretary
nor an Assistant Secretary is present, then the meeting shall elect its
secretary.
Section 9. Concerning Validity of Proxies, Ballots, Etc. At every
meeting of the Shareholders, all proxies shall be received and taken in
charge of and all ballots shall be received and canvassed by the secretary
of the meeting, who shall decide all questions touching the qualification
of voters, the validity of the proxies, and the acceptance or rejection
of votes, unless inspectors of election shall have been appointed as
provided in Section 7, in which event such inspectors of election shall
decide all such questions.
ARTICLE II
BOARD OF TRUSTEES
Section 1. Number and Tenure of Office. The business and property
of the Fund shall be conducted and managed by a Board of Trustees
consisting of the number of initial Trustees, which number may be
increased or decreased as provided in Section 2 of this Article. Each
Trustee shall, except as otherwise provided herein, hold office until the
meeting of Shareholders of the Fund next succeeding his election or until
his successor is duly elected and qualifies. Trustees need not be
Shareholders.
Section 2. Increase or Decrease in Number of Trustees; Removal. The
Board of Trustees, by the vote of a majority of the entire Board, may
increase the number of Trustees to a number not exceeding fifteen, and may
elect Trustees to fill the vacancies occurring for any reason, including
vacancies created by any such increase in the number of Trustees until the
next annual meeting or until their successors are duly elected and
qualify; the Board of Trustees, by the vote of a majority of the entire
Board, may likewise decrease the number of Trustees to a number not less
than three but the tenure of office of any Trustee shall not be affected
by any such decrease. In the event that after the proxy material has been
printed for a meeting of Shareholders at which Trustees are to be elected
and any one or more nominees named in such proxy material dies or becomes
incapacitated, the authorized number of Trustees shall be automatically
reduced by the number of such nominees, unless the Board of Trustees prior
to the meeting shall otherwise determine.
A Trustee at any time may be removed either with or without cause by
resolution duly adopted by the affirmative votes of the holders of two-
thirds of the outstanding Shares of the Fund, present in person or by
proxy at any meeting of Shareholders at which such vote may be taken,
provided that a quorum is present. Any Trustee at any time may be removed
for cause by resolution duly adopted at any meeting of the Board of
Trustees provided that notice thereof is contained in the notice of such
meeting and that such resolution is adopted by the vote of at least two-
thirds of the Trustees whose removal is not proposed. As used herein,
"for cause" shall mean any cause which under Massachusetts law would
permit the removal of a Trustee of a business trust.
Section 3. Place of Meeting. The Trustees may hold their meetings,
have one or more offices, and keep the books of the Fund outside
Massachusetts, at any office or offices of the Fund or at any other place
as they may from time to time by resolution determine, or, in the case of
meetings, as they may from time to time by resolution determine or as
shall be specified or fixed in the respective notices or waivers of notice
thereof.
Section 4. Regular Meetings. Regular meetings of the Board of
Trustees shall be held at such time and on such notice, if any, as the
Trustees may from time to time determine. One such regular meeting during
each fiscal year of the Fund shall be designated an annual meeting of the
Board of Trustees.
Section 5. Special Meetings. Special meetings of the Board of
Trustees may be held from time to time upon call of the Chairman of the
Board of Trustees, if any, the President or two or more of the Trustees,
by oral, telegraphic or written notice duly served on or sent or mailed
to each Trustee not less than one day before such meeting. No notice need
be given to any Trustee who attends in person or to any Trustee who in
writing executed and filed with the records of the meeting either before
or after the holding thereof, waives such notice. Such notice or waiver
of notice need not state the purpose or purposes of such meeting.
Section 6. Quorum. One-third of the Trustees then in office shall
constitute a quorum for the transaction of business, provided that a
quorum shall in no case be less than two Trustees. If at any meeting of
the Board there shall be less than a quorum present (in person or by open
telephone line, to the extent permitted by the Investment Company Act of
1940 (the "1940 Act")), a majority of those present may adjourn the
meeting from time to time until a quorum shall have been obtained. The
act of the majority of the Trustees present at any meeting at which there
is a quorum shall be the act of the Board, except as may be otherwise
specifically provided by statute, by the Declaration of Trust or by these
By-Laws.
Section 7. Executive Committee. The Board of Trustees may, by the
affirmative vote of a majority of the entire Board, elect from the
Trustees an Executive Committee to consist of such number of Trustees as
the Board may from time to time determine. The Board of Trustees by such
affirmative vote shall have power at any time to change the members of
such Committee and may fill vacancies in the Committee by election from
the Trustees. When the Board of Trustees is not in session, the Executive
Committee shall have and may exercise any or all of the powers of the
Board of Trustees in the management of the business and affairs of the
Fund (including the power to authorize the seal of the Fund to be affixed
to all papers which may require it) except as provided by law and except
the power to increase or decrease the size of, or fill vacancies on, the
Board. The Executive Committee may fix its own rules of procedure, and
may meet, when and as provided by such rules or by resolution of the
Board of Trustees, but in every case the presence of a majority shall be
necessary to constitute a quorum. In the absence of any member of the
Executive Committee, the members thereof present at any meeting, whether
or not they constitute a quorum, may appoint a member of the Board of
Trustees to act in the place of such absent member.
Section 8. Other Committees. The Board of Trustees, by the
affirmative vote of a majority of the entire Board, may appoint other
committees which shall in each case consist of such number of members (not
less than two) and shall have and may exercise such powers as the Board
may determine in the resolution appointing them. A majority of all
members of any such committee may determine its action, and fix the time
and place of its meetings, unless the Board of Trustees shall otherwise
provide. The Board of Trustees shall have power at any time to change the
members and powers of any such committee, to fill vacancies, and to
discharge any such committee.
Section 9. Informal Action by and Telephone Meetings of Trustees and
Committees. Any action required or permitted to be taken at any meeting
of the Board of Trustees or any committee thereof may be taken without a
meeting, if a written consent to such action is signed by all members of
the Board, or of such committee, as the case may be. Trustees or members
of a committee of the Board of Trustees may participate in a meeting by
means of a conference telephone or similar communications equipment; such
participation shall, except as otherwise required by the 1940 Act, have
the same effect as presence in person.
Section 10. Compensation of Trustees. Trustees shall be entitled
to receive such compensation from the Fund for their services as may from
time to time be voted by the Board of Trustees.
Section 11. Dividends. Dividends or distributions payable on the
Shares of any Series of the Fund may, but need not be, declared by
specific resolution of the Board as to each dividend or distribution; in
lieu of such specific resolutions, the Board may, by general resolution,
determine the method of computation thereof, the method of determining the
Shareholders of the Series to which they are payable and the methods of
determining whether and to which Shareholders they are to be paid in cash
or in additional Shares.
ARTICLE III
OFFICERS
Section 1. Executive Officers. The executive officers of the Fund
may include a Chairman of the Board of Trustees, and shall include a
President, one or more Vice-Presidents (the number thereof to be
determined by the Board of Trustees), a Secretary and a Treasurer. The
Chairman of the Board of Trustees, if any, and the President shall be
selected from among the Trustees. The Board of Trustees may also in its
discretion appoint Assistant Secretaries, Assistant Treasurers, and other
officers, agents and employees, who shall have authority and perform such
duties as the Board or the Executive Committee may determine. The Board
of Trustees may fill any vacancy which may occur in any office. Any two
offices, except those of President and Vice-President, may be held by the
same person, but no officer shall execute, acknowledge or verify any
instrument in more than one capacity, if such instrument is required by
law or these By-Laws to be executed, acknowledged or verified by two or
more officers.
Section 2. Term of Office. The term of office of all officers shall
be until their respective successors are chosen and qualify; however, any
officer may be removed from office at any time with or without cause by
the vote of a majority of the entire Board of Trustees.
Section 3. Powers and Duties. The officers of the Fund shall have
such powers and duties as generally pertain to their respective offices,
as well as such powers and duties as may from time to time be conferred
by the Board of Trustees or the Executive Committee.
ARTICLE IV
SHARES
Section 1. Share Certificates. Each Shareholder of any Series of
the Fund may be issued a certificate or certificates for his Shares of
that Series, in such form as the Board of Trustees may from time to time
prescribe, but only if and to the extent and on the conditions described
by the Board.
Section 2. Transfer of Shares. Shares of any Series shall be
transferable on the books of the Fund by the holder thereof in person or
by his duly authorized attorney or legal representative, upon surrender
and cancellation of certificates, if any, for the same number of Shares
of that Series, duly endorsed or accompanied by proper instruments of
assignment and transfer, with such proof of the authenticity of the
signature as the Fund or its agent may reasonably require; in the case of
shares not represented by certificates, the same or similar requirements
may be imposed by the Board of Trustees.
Section 3. Share_Ledgers. The share ledgers of the Fund, containing
the name and address of the Shareholders of each Series of the Fund and
the number of shares of that Series, held by them respectively, shall be
kept at the principal offices of the Fund or, if the Fund employs a
transfer agent, at the offices of the transfer agent of the Fund.
Section 4. Lost, Stolen or Destroyed Certificates. The Board of
Trustees may determine the conditions upon which a new certificate may be
issued in place of a certificate which is alleged to have been lost,
stolen or destroyed; and may, in their discretion, require the owner of
such certificate or his legal representative to give bond, with sufficient
surety to the Fund and the transfer agent, if any, to indemnify it and
such transfer agent against any and all loss or claims which may arise by
reason of the issue of a new certificate in the place of the one so lost,
stolen or destroyed.
ARTICLE V
SEAL
The Board of Trustees shall provide a suitable seal of the Fund, in
such form and bearing such inscriptions as it may determine.
ARTICLE VI
FISCAL YEAR
The fiscal year of the Fund shall be fixed by the Board of Trustees.
ARTICLE VII
AMENDMENT OF BY-LAWS
The By-Laws of the Fund may be altered, amended, added to or repealed
by the Shareholders or by majority vote of the entire Board of Trustees,
but any such alteration, amendment, addition or repeal of the By-Laws by
action of the Board of Trustees may be altered or repealed by the
Shareholders.
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of the 15th day of May, 1992, by and between
OPPENHEIMER GNMA FUND (hereinafter referred to as the "Fund"), and
OPPENHEIMER MANAGEMENT CORPORATION (hereinafter referred to as "OMC").
WHEREAS, the Fund is an open-end, diversified investment company
registered as such with the Securities and Exchange Commission (the
"Commission") pursuant to the Investment Company Act of 1940 (the
"Investment Company Act"), and OMC is a registered investment adviser;
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, it is agreed by and between the parties, as
follows:
1. General Provision.
The Fund hereby employs OMC and OMC hereby undertakes to act as the
investment adviser of the Fund and to perform for the Fund such other
duties and functions as are hereinafter set forth. OMC shall, in all
matters, give to the Fund and its Board of Trustees the benefit of its
best judgment, effort, advice and recommendations and shall, at all times
conform to, and use its best efforts to enable the Fund to conform to: (i)
the provisions of the Investment Company Act and any rules or regulations
thereunder; (ii) any other applicable provisions of state or federal law;
(iii) the provisions of the Declaration of Trust and By-Laws of the Fund
as amended from time to time; (iv) policies and determinations of the
Board of Trustees of the Fund; (v) the fundamental policies and investment
restrictions of the Fund as reflected in its registration statement under
the Investment Company Act or as such policies may, from time to time,
be amended by the Fund's shareholders; and (vi) the Prospectus and
Statement of Additional Information of the Fund in effect from time to
time. The appropriate officers and employees of OMC shall be available
upon reasonable notice for consultation with any of the Trustees and
officers of the Fund with respect to any matters dealing with the business
and affairs of the Fund including the valuation of any of the Fund's
portfolio securities which are either not registered for public sale or
not being traded on any securities market.
2. Investment Management.
(a) OMC shall, subject to the direction and control by the Fund's
Board of Trustees, (i) regularly provide investment advice and
recommendations to the Fund with respect to its investments, investment
policies and the purchase and sale of securities; (ii) supervise
continuously the investment program of the Fund and the composition of its
portfolio and determine what securities shall be purchased or sold by the
Fund; and (iii) arrange, subject to the provisions of paragraph "7"
hereof, for the purchase of securities and other investments for the Fund
and the sale of securities and other investments held in the portfolio of
the Fund.
(b) Provided that the Fund shall not be required to pay any
compensation other than as provided by the terms of this Agreement and
subject to the provisions of paragraph "7" hereof, OMC may obtain
investment information, research or assistance from any other person, firm
or corporation to supplement, update or otherwise improve its investment
management services.
(c) So long as it shall have acted with due care and in good faith,
OMC shall not be liable for any loss sustained by reason of any
investment, the adoption of any investment policy, or the purchase, sale
or retention of any security irrespective of whether the determinations
of OMC relative thereto shall have been based, wholly or partly, upon the
investigation or research of any other individual, firm or corporation
believed by it to be reliable. Nothing herein contained shall, however,
be construed to protect OMC against any liability to the Fund or its
security holders by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of its reckless
disregard of its obligations and duties under this Agreement.
(d) Nothing in this Agreement shall prevent OMC or any officer
thereof from acting, as investment adviser for any other person, firm or
corporation and shall not in any way limit or restrict OMC or any of its
directors, officers, stockholders or employees from buying, selling or
trading any securities for its or their own account or for the account of
others for whom it or they may be acting, provided that such activities
will not adversely affect or otherwise impair the performance by OMC of
its duties and obligations under this Agreement.
3. Other Duties of OMC.
OMC shall, at its own expense, provide and supervise the activities
of all administrative and clerical personnel as shall be required to
provide effective administration for the Fund, including the compilation
and maintenance of such records with respect to its operations as may
reasonably be required; the preparation and filing of such reports with
respect thereto as shall be required by the Commission; composition of
periodic reports with respect to its operations for the shareholders of
the Fund; composition of proxy materials for meetings of the Fund's
shareholders to be held when required by the provisions of the Fund's
Declaration of Trust, the Investment Company Act of 1940, or any other
applicable law; and composition of such registration statements as may be
required by federal securities laws for continuous public sale of shares
of the Fund. OMC shall, at its own cost and expense, also provide the Fund
with adequate office space, facilities and equipment.
4. Allocation of Expenses.
All other costs and expenses not expressly assumed by OMC under this
Agreement, or to be paid by the General Distributor of the shares of the
Fund, shall be paid by the Fund, including, but not limited to (i)
interest and taxes; (ii) brokerage commissions; (iii) insurance premiums
for fidelity and other coverage requisite to its operations; (iv)
compensation and expenses of its Trustees other than those associated or
affiliated with OMC; (v) legal and audit expenses; (vi) custodian and
transfer agent fees and expenses; (vii) expenses incident to the
redemption of its shares; (viii) expenses incident to the issuance of its
shares against payment therefor by or on behalf of the subscribers
thereto; (ix) fees and expenses, other than as hereinabove provided,
incident to the registration under federal securities laws of shares of
the Fund for public sale; (x) expenses of printing and mailing reports,
notices and proxy materials to shareholders of the Fund; (xi) except as
noted above, all other expenses incidental to holding meetings of the
Fund's shareholders; and (xii) such extraordinary non-recurring expenses
as may arise, including litigation, affecting the Fund and the legal
obligation which the Fund may have to indemnify its officers and Trustees
with respect thereto. Any officers or employees of OMC or any entity
controlling, controlled by or under common control with OMC, who may also
serve as officers, Trustees or employees of the Fund shall not receive any
compensation by the Fund for their services.
5. Compensation of OMC.
The Fund agrees to pay OMC and OMC agrees to accept as full
compensation for the performance of all functions and duties on its part
to be performed pursuant to the provisions hereof, a fee computed on the
net asset value of the Fund as of the close of each business day and
payable monthly at the following annual rates:
.75% of the first $200 million of net assets;
.70% of the next $200 million;
.65% of the next $400 million; and
.60% of net assets in excess of $800 million.
6. Use of Name "Oppenheimer."
OMC hereby grants to the Fund a royalty-free, non-exclusive license
to use the name "Oppenheimer" in the name of the Fund for the duration of
this Agreement and any extensions or renewals thereof. To the extent
necessary to protect OMC's rights to the name "Oppenheimer" under
applicable law, such license shall allow OMC to inspect and, subject to
control by the Fund's Board, control the nature and quality of services
offered by the Fund under such name. Such license may, upon termination
of this Agreement, be terminated by OMC, in which event the Fund shall
promptly take whatever action may be necessary to change its name and
discontinue any further use of the name "Oppenheimer" in the name of the
Fund or otherwise. The name "Oppenheimer" may be used by OMC in connection
with any of its activities, or licensed by OMC to any other party.
7. Portfolio Transactions and Brokerage.
(a) OMC is authorized, in arranging the purchase and sale of the
Fund's portfolio securities, to employ or deal with such members of
securities exchanges, brokers or dealers (hereinafter "broker-dealers")
including "affiliated" broker-dealers, as that term is defined in the
Investment Company Act, as may, in its best judgment, implement the policy
of the Fund to obtain, at reasonable expense, the "best execution" (prompt
and reliable execution at the most favorable security price obtainable)
of the Fund's portfolio transactions as well as to obtain, consistent with
the provisions of subparagraph "(c)" of this paragraph "7," the benefit
of such investment information or research as will be of significant
assistance to the performance by OMC of its investment management
functions.
(b) OMC shall select broker-dealers to effect the Fund's portfolio
transactions on the basis of its estimate of their ability to obtain best
execution of particular and related portfolio transactions. The abilities
of a broker-dealer to obtain best execution of particular portfolio
transaction(s) will be judged by OMC on the basis of all relevant factors
and considerations including, insofar as feasible, the execution
capabilities required by the transaction or transactions; the ability and
willingness of the broker-dealer to facilitate the Fund's portfolio
transactions by participating therein for its own account; the importance
to the Fund of speed, efficiency or confidentiality; the broker-dealer's
apparent familiarity with sources from or to whom particular securities
might be purchased or sold; as well as any other matters relevant to the
selection of a broker-dealer for particular and related transactions of
the Fund.
(c) OMC shall have discretion, in the interests of the Fund, to
allocate brokerage on the Fund's portfolio transactions to broker-dealers,
other than affiliated broker-dealers, qualified to obtain best execution
of such transactions who provide brokerage and/or research services (as
such services are defined in Section 23(e)(3) of the Securities Exchange
Act of 1934) for the Fund and/or other accounts for which OMC exercises
"investment discretion" (as that term is defined in Section 3(a)(35) of
the Securities Exchange Act of 1934) and to cause the Fund to pay
such broker-dealers a commission for effecting a portfolio transaction for
the Fund that is in excess of the amount of commission another broker-
dealer adequately qualified to effect such transaction would have charged
for effecting that transaction, if OMC determines, in good faith, that
such commission is reasonable in relation to the value of the brokerage
and/or research services provided by such broker-dealer, viewed in terms
of either that particular transaction or OMC's overall responsibilities
with respect to the accounts as to which it exercises investment
discretion. In reaching such determination, OMC will not be required to
place or attempt to place a specific dollar value on the brokerage and/or
research services provided or being provided by such broker-dealer. In
demonstrating that such determinations were made in good faith, OMC shall
be prepared to show that all commissions were allocated for purposes
contemplated by this Agreement and that the total commissions paid by the
Fund over a representative period selected by the Fund's Trustees were
reasonable in relation to the benefits to the Fund.
(d) OMC shall have no duty or obligation to seek advance competitive
bidding for the most favorable commission rate applicable to any
particular portfolio transactions or to select any broker-dealer on the
basis of its purported or "posted" commission rate but will, to the best
of its ability, endeavor to be aware of the current level of the charges
of eligible broker-dealers and to minimize the expense incurred by the
Fund for effecting its portfolio transactions to the extent consistent
with the interests and policies of the Fund as established by the
determinations of its Board of Trustees and the provisions of this
paragraph "7."
(e) Subject to the foregoing provisions of this paragraph "7," OMC
may also consider sales of shares of the Fund and the other funds managed
by OMC and its affiliates as a factor in the selection of broker-dealers
for its portfolio transactions.
8. Duration.
This Agreement will take effect on the date first set forth above and
replaces the Investment Advisory Agreement between the Fund and
Oppenheimer Management Corporation dated October 22, 1990. This Agreement
will continue in effect until December 31, 1992, and thereafter, from year
to year, so long as such continuance shall be approved at least annually
by the Fund's Board of Trustees, including the vote of the majority of the
Trustees of the Fund who are not parties to this Agreement or "interested
persons" (as defined in the Investment Company Act) of any such party,
cast in person at a meeting called for the purpose of voting on such
approval, or by the holders of a "majority" (as defined in the Investment
Company Act) of the outstanding voting securities of the Fund and by such
a vote of the Fund's Board of Trustees.
9. Termination.
This Agreement may be terminated (i) by OMC at any time without
penalty upon giving the Fund sixty days' written notice (which notice may
be waived by the Fund); or (ii) by the Fund at any time without penalty
upon sixty days' written notice to OMC (which notice may be waived by OMC)
provided that such termination by the Fund shall be directed or approved
by the vote of a majority of all of the Trustees of the Fund then in
office or by the vote of the holders of a majority of the outstanding
voting securities of the Fund.
10. Assignment or Amendment.
This Agreement may not be amended or the rights of OMC hereunder
sold, transferred, pledged or otherwise in any manner encumbered without
the affirmative vote or written consent of the holders of the majority of
the outstanding voting securities of the Fund; this Agreement shall
automatically and immediately terminate in the event of its "assignment,"
as defined as stated below.
11. Disclaimer of Shareholder Liability.
OMC understands that the obligations of the Fund under this Agreement
are not binding upon any Trustee or shareholder of the Fund personally,
but bind only the Fund and the Fund's property. OMC represents that it has
notice of the provisions of the Declaration of Trust of the Fund
disclaiming shareholder liability for acts or obligations of the Fund.
12. Definitions.
The terms and provisions of this Agreement shall be interpreted and
defined in a manner consistent with the provisions and definitions of the
Investment Company Act.
OPPENHEIMER GNMA FUND
By: /s/ Robert G. Galli
_ _ _ _ _ _ _ _ _ _ _ _
Robert G. Galli
Attest:
/s/ Sara L. Badler
_ _ _ _ _ _ _ _ _ _
Sara L. Badler
OPPENHEIMER MANAGEMENT CORPORATION
By: /s/ Robert G. Zack
_ _ _ _ _ _ _ _ _ _
Robert G. Zack
Attest:
/s/ Sara L. Badler
_ _ _ _ _ _ _ _ _ __
Sara L. Badler
ADVISORY/490
GENERAL DISTRIBUTOR'S AGREEMENT
BETWEEN
OPPENHEIMER GNMA FUND
AND
OPPENHEIMER FUND MANAGEMENT, INC.
Date: December 10, 1992
OPPENHEIMER FUND MANAGEMENT, INC.
Two World Trade Center, Suite 3400
New York, NY 10048
Dear Sirs:
OPPENHEIMER GNMA FUND, a Massachusetts business trust (the "Fund"),
is registered as an investment company under the Investment Company Act
of 1940 (the "1940 Act"), and an indefinite number of one or more classes
of its shares of beneficial interest ("Shares") have been registered under
the Securities Act of 1933 (the "1933 Act") to be offered for sale to the
public in a continuous public offering in accordance with the terms and
conditions set forth in the Prospectus and Statement of Additional
Information ("SAI") included in the Fund's Registration Statement as it
may be amended from time to time (the "current Prospectus and/or SAI").
In this connection, the Fund desires that your firm (the "General
Distributor") act in a principal capacity as General Distributor for the
sale and distribution of Shares which have been registered as described
above and of any additional Shares which may become registered during the
term of this Agreement. You have advised the Fund that you are willing
to act as such General Distributor, and it is accordingly agreed by and
between us as follows:
1. Appointment of the Distributor. The Fund hereby appoints you as
the sole General Distributor, pursuant to the aforesaid continuous public
offering of its Shares, and the Fund further agrees from and after the
date of this Agreement, that it will not, without your consent, sell or
agree to sell any Shares otherwise than through you, except (a) the Fund
may itself sell shares without sales charge as an investment to the
officers, trustees or directors and bona fide present and former full-time
employees of the Fund, the Fund's Investment Adviser and affiliates
thereof, and to other investors who are identified in the current
Prospectus and/or SAI as having the privilege to buy Shares at net asset
value; (b) the Fund may issue shares in connection with a merger,
consolidation or acquisition of assets on such basis as may be authorized
or permitted under the 1940 Act; (c) the Fund may issue shares for the
reinvestment of dividends and other distributions of the Fund or of any
other Fund if permitted by the current Prospectus and/or SAI; and (d) the
Fund may issue shares as underlying securities of a unit investment trust
if such unit investment trust has elected to use Shares as an underlying
investment; provided that in no event as to any of the foregoing
exceptions shall Shares be issued and sold at less than the then-existing
net asset value.
2. Sale of Shares. You hereby accept such appointment and agree to
use your best efforts to sell Shares, provided, however, that when
requested by the Fund at any time because of market or other economic
considerations or abnormal circumstances of any kind, or when agreed to
by mutual consent of the Fund and the General Distributor, you will
suspend such efforts. The Fund may also withdraw the offering of Shares
at any time when required by the provisions of any statute, order, rule
or regulation of any governmental body having jurisdiction. It is
understood that you do not undertake to sell all or any specific number
of Shares.
3. Sales Charge. Shares shall be sold by you at net asset value
plus a front-end sales charge not in excess of 8.5% of the offering price,
but which front-end sales charge shall be proportionately reduced or
eliminated for larger sales and under other circumstances, in each case
on the basis set forth in the current Prospectus and/or SAI. The
redemption proceeds of shares offered and sold at net asset value with or
without a front-end sales charge may be subject to a contingent deferred
sales charge ("CDSC") under the circumstances described in the current
Prospectus and\or SAI. You may reallow such portion of the front-end
sales charge to dealers or cause payment (which may exceed the front-end
sales charge, if any) of commissions to brokers through which sales are
made, as you may determine, and you may pay such amounts to dealers and
brokers on sales of shares from your own resources (such dealers and
brokers shall collectively include all domestic or foreign institutions
eligible to offer and sell the Shares), and in the event the Fund has more
than one class of Shares outstanding, then you may impose a front-end
sales charge and/or a CDSC on Shares of one class that is different from
the charges imposed on Shares of the Fund's other class(es), in each case
as set forth in the current Prospectus and/or SAI, provided the front-end
sales charge and CDSC to the ultimate purchaser do not exceed the
respective levels set forth for such category of purchaser in the current
Prospectus and/or SAI.
4. Purchase of Shares.
(a) As General Distributor, you shall have the right to accept or reject
orders for the purchase of Shares at your discretion. Any
consideration which you may receive in connection with a rejected
purchase order will be returned promptly.
(b) You agree promptly to issue or to cause the duly appointed transfer
or shareholder servicing agent of the Fund to issue as your agent
confirmations of all accepted purchase orders and to transmit a copy
of such confirmations to the Fund. The net asset value of all Shares
which are the subject of such confirmations, computed in accordance
with the applicable rules under the 1940 Act, shall be a liability
of the General Distributor to the Fund to be paid promptly after
receipt of payment from the originating dealer or broker (or
investor, in the case of direct purchases) and not later than eleven
business days after such confirmation even if you have not actually
received payment from the originating dealer or broker, or investor.
In no event shall the General Distributor make payment to the Fund
later than permitted by applicable rules of the National Association
of Securities Dealers, Inc.
(c) If the originating dealer or broker shall fail to make timely
settlement of its purchase order in accordance with applicable rules
of the National Association of Securities Dealers, Inc., or if a
direct purchaser shall fail to make good payment for shares in a
timely manner, you shall have the right to cancel such purchase order
and, at your account and risk, to hold responsible the originating
dealer or broker, or investor. You agree promptly to reimburse the
Fund for losses suffered by it that are attributable to any such
cancellation, or to errors on your part in relation to the effective
date of accepted purchase orders, limited to the amount that such
losses exceed contemporaneous gains realized by the Fund for either
of such reasons with respect to other purchase orders.
(d) In the case of a canceled purchase for the account of a directly
purchasing shareholder, the Fund agrees that if such investor fails
to make you whole for any loss you pay to the Fund on such canceled
purchase order, the Fund will reimburse you for such loss to the
extent of the aggregate redemption proceeds of any other shares of
the Fund owned by such investor, on your demand that the Fund
exercise its right to claim such redemption proceeds. The Fund shall
register or cause to be registered all Shares sold to you pursuant
to the provisions hereof in such names and amounts as you may request
from time to time and the Fund shall issue or cause to be issued
certificates evidencing such Shares for delivery to you or pursuant
to your direction if and to the extent that the shareholder account
in question contemplates the issuance of such certificates. All
Shares, when so issued and paid for, shall be fully paid and non-
assessable by the Fund (which shall not prevent the imposition of any
CDSC that may apply) to the extent set forth in the current
Prospectus and/or SAI.
5. Repurchase of Shares.
(a) In connection with the repurchase of Shares, you are appointed and
shall act as Agent of the Fund. You are authorized, for so long as
you act as General Distributor of the Fund, to repurchase, from
authorized dealers, certificated or uncertificated shares of the Fund
("Shares") on the basis of orders received from each dealer
("authorized dealer") with which you have a dealer agreement for the
sale of Shares and permitting resales of Shares to you, provided that
such authorized dealer, at the time of placing such resale order,
shall represent (i) if such Shares are represented by certificate(s),
that certificate(s) for the Shares to be repurchased have been
delivered to it by the registered owner with a request for the
redemption of such Shares executed in the manner and with the
signature guarantee required by the then-currently effective
prospectus of the Fund, or (ii) if such Shares are uncertificated,
that the registered owner(s) has delivered to the dealer a request
for the redemption of such Shares executed in the manner and with the
signature guarantee required by the then-currently effective
prospectus of the Fund.
(b) You shall (a) have the right in your discretion to accept or reject
orders for the repurchase of Shares; (b) promptly transmit
confirmations of all accepted repurchase orders; and (c) transmit
a copy of such confirmation to the Fund, or, if so directed, to any
duly appointed transfer or shareholder servicing agent of the Fund.
In your discretion, you may accept repurchase requests made by a
financially responsible dealer which provides you with
indemnification in form satisfactory to you in consideration of your
acceptance of such dealer's request in lieu of the written redemption
request of the owner of the account; you agree that the Fund shall
be a third party beneficiary of such indemnification.
(c) Upon receipt by the Fund or its duly appointed transfer or
shareholder servicing agent of any certificate(s) (if any has been
issued) for repurchased Shares and a written redemption request of
the registered owner(s) of such Shares executed in the manner and
bearing the signature guarantee required by the then-currently
effective Prospectus or SAI of the Fund, the Fund will pay or cause
its duly appointed transfer or shareholder servicing agent promptly
to pay to the originating authorized dealer the redemption price of
the repurchased Shares (other than repurchased Shares subject to the
provisions of part (d) of Section 5 of this Agreement) next
determined after your receipt of the dealer's repurchase order.
(d) Notwithstanding the provisions of part (c) of Section 5 of this
Agreement, repurchase orders received from an authorized dealer after
the determination of the Fund's redemption price on a regular
business day will receive that day's redemption price if the request
to the dealer by its customer to arrange such repurchase prior to the
determination of the Fund's redemption price that day complies with
the requirements governing such requests as stated in the current
Prospectus and/or SAI.
(e) You will make every reasonable effort and take all reasonably
available measures to assure the accurate performance of all services
to be performed by you hereunder within the requirements of any
statute, rule or regulation pertaining to the redemption of shares
of a regulated investment company and any requirements set forth in
the then-current Prospectus and/or SAI of the Fund. You shall
correct any error or omission made by you in the performance of your
duties hereunder of which you shall have received notice in writing
and any necessary substantiating data; and you shall hold the Fund
harmless from the effect of any errors or omissions which might cause
an over- or under-redemption of the Fund's Shares and/or an excess
or non-payment of dividends, capital gains distributions, or other
distributions.
(f) In the event an authorized dealer initiating a repurchase order shall
fail to make delivery or otherwise settle such order in accordance
with the rules of the National Association of Securities Dealers,
Inc., you shall have the right to cancel such repurchase order and,
at your account and risk, to hold responsible the originating dealer.
In the event that any cancellation of a Share repurchase order or any
error in the timing of the acceptance of a Share repurchase order
shall result in a gain or loss to the Fund, you agree promptly to
reimburse the Fund for any amount by which any losses shall exceed
then-existing gains so arising.
6. 1933 Act Registration. The Fund has delivered to you a copy of
its current Prospectus and SAI. The Fund agrees that it will use its best
efforts to continue the effectiveness of the Registration Statement under
the 1933 Act. The Fund further agrees to prepare and file any amendments
to its Registration Statement as may be necessary and any supplemental
data in order to comply with the 1933 Act. The Fund will furnish you at
your expense with a reasonable number of copies of the Prospectus and SAI
and any amendments thereto for use in connection with the sale of Shares.
7. 1940 Act Registration. The Fund has already registered under
the 1940 Act as an investment company, and it will use its best efforts
to maintain such registration and to comply with the requirements of the
1940 Act.
8. State Blue Sky Qualification. At your request, the Fund will
take such steps as may be necessary and feasible to qualify Shares for
sale in states, territories or dependencies of the United States, the
District of Columbia, the Commonwealth of Puerto Rico and in foreign
countries, in accordance with the laws thereof, and to renew or extend any
such qualification; provided, however, that the Fund shall not be required
to qualify shares or to maintain the qualification of shares in any
jurisdiction where it shall deem such qualification disadvantageous to the
Fund.
9. Duties of Distributor. You agree that:
(a) Neither you nor any of your officers will take any long or short
position in the Shares, but this provision shall not prevent you or
your officers from acquiring Shares for investment purposes only;
(b) You shall furnish to the Fund any pertinent information required to
be inserted with respect to you as General Distributor within the
purview of the Securities Act of 1933 in any reports or registration
required to be filed with any governmental authority; and
(c) You will not make any representations inconsistent with the
information contained in the current Prospectus and/or SAI.
(d) You shall maintain such records as may be reasonably required for the
Fund or its transfer or shareholder servicing agent to respond to
shareholder requests or complaints, and to permit the Fund to
maintain proper accounting records, and you shall make such records
available to the Fund and its transfer agent or shareholder servicing
agent upon request.
(e) In performing under this Agreement, you shall comply with all
requirements of the Fund's current Prospectus and/or SAI and all
applicable laws, rules and regulations with respect to the purchase,
sale and distribution of Shares.
10. Allocation of Costs. The Fund shall pay the cost of composition
and printing of sufficient copies of its Prospectus and SAI as shall be
required for periodic distribution to its shareholders and the expense of
registering Shares for sale under federal securities laws. You shall pay
the expenses normally attributable to the sale of Shares, other than as
paid under the Fund's Distribution Plan under Rule 12b-1 of the 1940 Act,
including the cost of printing and mailing of the Prospectus (other than
those furnished to existing shareholders) and any sales literature used
by you in the public sale of the Shares and for registering such shares
under state blue sky laws pursuant to paragraph 8.
11. Duration. This Agreement shall take effect on the date first
written above, and shall supersede any and all prior General Distributor's
Agreements by and among the Fund and you. Unless earlier terminated
pursuant to paragraph 12 hereof, this Agreement shall remain in effect
until September 30, 1994. This Agreement shall continue in effect from
year to year thereafter, provided that such continuance shall be
specifically approved at least annually: (a) by the Fund's Board of
Trustees or by vote of a majority of the voting securities of the Fund;
and (b) by the vote of a majority of the Trustees, who are not parties to
this Agreement or "interested persons" (as defined in the 1940 Act) of any
such person, cast in person at a meeting called for the purpose of voting
on such approval.
12. Termination. This Agreement may be terminated (a) by the
General Distributor at any time without penalty by giving sixty days'
written notice (which notice may be waived by the Fund); (b) by the Fund
at any time without penalty upon sixty days' written notice to the General
Distributor (which notice may be waived by the General Distributor); or
(c) by mutual consent of the Fund and the General Distributor, provided
that such termination by the Fund shall be directed or approved by the
Board of Trustees of the Fund or by the vote of the holders of a majority
of the outstanding voting securities of the Fund. In the event this
Agreement is terminated by the Fund, the General Distributor shall be
entitled to be paid the CDSC under paragraph 3 hereof on the redemption
proceeds of Shares sold prior to the effective date of such termination.
13. Assignment. This Agreement may not be amended or changed except
in writing and shall be binding upon and shall enure to the benefit of the
parties hereto and their respective successors; however, this Agreement
shall not be assigned by either party and shall automatically terminate
upon assignment.
14. Disclaimer of Shareholder Liability. The General Distributor
understands and agrees that the obligations of the Fund under this
Agreement are not binding upon any Trustee or shareholder of the Fund
personally, but bind only the Fund and the Fund's property; the General
Distributor represents that it has notice of the provisions of the
Declaration of Trust of the Fund disclaiming shareholder liability for
acts or obligations of the Fund.
15. Section Headings. The headings of each section is for
descriptive purposes only, and such headings are not to be construed or
interpreted as part of this Agreement.
If the foregoing is in accordance with your understanding, so
indicate by signing in the space provided below.
OPPENHEIMER GNMA FUND
By: ____________________________________
Robert G. Galli, Secretary
Accepted:
OPPENHEIMER FUND MANAGEMENT, INC.
By: _______________________________________
Andrew J. Donohue, Senior Vice President
OFMI\4901A
CUSTODIAN CONTRACT
Between
OPPENHEIMER GNMA FUND
STATE STREET BANK AND TRUST COMPANY
TABLE OF CONTENTS
Page
1. Employment of Custodian and Property to be
Held by It 1
2. Duties of the Custodian with Respect to Domestic
Securities 3
2.1 Holding Securities 3
2.2 Delivery of Securities 3
2.3 Registration of Securities 8
2.4 Bank Accounts 9
2.5 Availability of Federal Funds 10
2.6 Collection of Income 10
2.7 Payment of Fund Monies 11
2.8 Liability for Payment in Advance of
Receipt of Securities Purchased 14
2.9 Appointment of Agents 14
2.10 Deposit of Securities in Securities System 15
2.10A Fund Assets Held in the Custodian's Direct
Paper System 18
2.11 Segregated Account 20
2.12 Ownership Certificates for Tax Purposes 21
2.13 Proxies 21
2.14 Communications Relating to Fund Assets 22
2.15 Reports to Fund by Independent Public
Accountants 23
3. Duties of the Custodian With Respect to Property of
the Fund Held Outside of the United State 23
3.1 Appointment of Foreign Sub-Custodians 23
3.2 Assets to be Held 24
3.3 Foreign Securities Depositories 24
3.4 Segregation of Securities 24
3.5 Agreements with Foreign Banking Institutions 25
3.6 Access of Independent Accountants of the Fund 25
3.7 Reports by Custodian 26
3.8 Transactions in Foreign Custody Account 26
3.9 Liability of Foreign Sub-Custodians 27
3.10 Liability of Custodian 28
3.11 Reimbursement for Advances 29
3.12 Monitoring Responsibilities 29
3.13 Branches of U.S. Banks 30
4. Payments for Repurchases or Redemptions and Sales
of Shares of the Fund 31
5. Proper Instructions 31
6. Actions Permitted Without Express Authority 33
7. Evidence of Authority 33
8. Duties of Custodian with Respect to the Books of
Account 34
9. Records 35
10. Opinion of Fund's Independent Accountant 35
10A. Reports to Fund by Custodian's Independent Accountant 36
11. Compensation of Custodian 36
12. Responsibility of Custodian 36
13. Effective Period, Termination and Amendment 38
14. Successor Custodian 40
15. Interpretive and Additional Provisions 42
16. Massachusetts Law to Apply 42
17. Prior Contracts 42
18. Disclaimer of Shareholder Liability 42
CUSTODIAN CONTRACT
This Contract is made between Oppenheimer GNMA Fund, a business trust
organized and existing under the laws of Massachusetts, having its
principal place of business at Two Broadway, New York, New York 10005,
hereinafter called the "Fund", and State Street Bank and Trust Company,
a Massachusetts trust company, having its principal place of business at
225 Franklin Street, Boston, Massachusetts, 02110, hereinafter called the
"Custodian",
WITNESSETH: That in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
The Fund hereby employs the Custodian as the custodian of its assets,
including without limitation securities it desires to be held in places
within the United States ("domestic securities") and securities it desires
to be held outside the United States ("foreign securities"), including
within the definition of "securities" in either instance bonds,
debentures, shares, securities, notes, mortgages, option contracts,
commodity futures contracts, other obligations, certificates, receipts,
warrants, or other financial instruments, cash or other property or assets
(all of the foregoing being referred to as "Fund Assets"), pursuant to the
provisions of the Fund's Declaration of Trust. The Fund agrees to deliver
or cause to be delivered to the Custodian all Fund Assets and all payments
of income, payments of principal or capital distributions received by it
with respect to Fund Assets from time to time, and the cash consideration
received by it for shares of capital stock of the Fund ("Shares") as may
be issued or sold from time to time. The Custodian shall not be
responsible for any Fund Assets held or received by the Fund and not
delivered to the Custodian or to the Custodian's control.
Fund Assets held in a "Securities System" or the Direct Paper System
of the Custodian (as such terms are defined in Section 2.1 below) shall
be deemed "delivered" to the Custodian hereunder upon the Custodian's
receipt of a book-entry report or other notice or receipt of such Fund
Assets by such Securities System. The Custodian shall from time to time
employ one or more sub-custodians located in the United States, but only
upon receipt of "Proper Instructions" (as such term is defined in Article
5) that reflect that such appointment has been approved by a vote by the
Board of Trustees of the Fund, and provided that the Custodian shall have
no more or less responsibility or liability to the Fund on account of any
actions or omissions of any sub-custodian so employed than any such sub-
custodian has to the Custodian, provided, however, that any agreement
between the Custodian and any domestic sub-custodian appointed hereunder
shall impose on such sub-custodian a standard of care equal to that of the
Custodian to the Fund hereunder, unless otherwise so directed by the Fund.
The Custodian may employ as sub-custodians for Fund Assets the foreign
banking institutions and foreign securities depositories designated in
Schedule "A" hereto but only in accordance with the provisions of Article
3.
2. Duties of the Custodian with Respect to Domestic Securities
Securities
2.1 Holding Securities. The Custodian shall hold and physically
segregate for the account of the Fund all non-cash property, to be held
by it in the United States including all domestic securities owned by the
Fund, other than (a) securities which are maintained by the Custodian
pursuant to Section 2.10 in a clearing agency which acts as a securities
depository or in a book-entry system authorized by the U.S. Department of
the Treasury, collectively referred to herein as "Securities System" and
(b) commercial paper of an issuer for which State Street Bank and Trust
Company acts as issuing and paying agent ("Direct Paper") which is
deposited and/or maintained in the Direct Paper System of the Custodian
pursuant to Section 2.10A.
2.2 Delivery of Securities. The Custodian shall release and deliver
domestic securities owned by the Fund and held by the Custodian or in a
Securities System account of the Custodian or in the Custodian's Direct
Paper book-entry system account ("Direct Paper System Account") only upon
receipt of Proper Instructions, which may be continuing instructions when
use of continuing instructions is deemed appropriate by the parties, and
where such delivery is to be made against receipt of payment as set forth
below, such payment shall be in the form of a check certified or issued
by a bank, trust company or member of the New York Stock Exchange or in
same-day funds or such other form of payment as Proper Instructions may
specify and only in the following cases:
1) Upon sale of such securities for the account of the Fund and
receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Fund;
3) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section 2.10 hereof;
4) To the depository agent in connection with tender or other
similar offers for securities owned by the Fund;
5) To the issuer thereof or its designated agent when such
securities are called, redeemed, retired or otherwise become
payable; provided that, in any such case, the cash or other
consideration to which the Fund is thereby entitled is to be
delivered to the Custodian;
6) To the issuer thereof, or its designated agent, for transfer
into the name of the Fund or into the name of any nominee or
nominees of the Custodian or into the name or nominee name of
any agent appointed pursuant to Section 2.9 or into the name or
nominee name of any sub-custodian appointed pursuant to Article
1; or for exchange for a different number of bonds, certificates
or other evidence of ownership representing the same aggregate
face amount or number of units; provided that, in any such case,
the new securities are to be delivered to the Custodian;
7) Upon the sale of such securities for the account of the Fund,
to the broker or its clearing agent, against a receipt, for
examination in accordance with "street delivery" custom;
provided that in any such case, the Custodian shall have no
responsibility or liability for any loss arising from the
delivery of such securities to such broker or clearing agent
prior to receiving payment for such securities except as may
arise from the Custodian's own negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment
of the securities of the issuer of such securities, or pursuant
to provisions for conversion contained in such securities, or
pursuant to any deposit agreement; provided that, in any such
case, the new securities and cash, if any, are to be delivered
to the Custodian;
9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities; provided that,
in any such case, the new securities and cash, if any, are to
be delivered to the Custodian;
10) For delivery in connection with any loans of securities made by
the Fund, but only against receipt of adequate collateral as
identified by the Fund, which may be in the form of cash or
obligations issued by the United States government, its agencies
or instrumentalities, except that in connection with any loans
for which collateral is to be credited to the Custodian's
account in the book-entry system authorized by the U.S.
Department of the Treasury, the Custodian will not be held
liable or responsible for the delivery of securities owned by
the Fund prior to the receipt of such collateral;
11) For delivery as collateral security in connection with any
borrowings by the Fund requiring a pledge of assets by the Fund,
but only against receipt of amounts borrowed;
12) For delivery in accordance with the provisions of any agreement
amount the Fund, the Custodian and a broker-dealer which is
registered under the Securities Exchange Act of 1934 (the
"Exchange Act") and is a member of the National Association of
Securities Dealers, Inc. ("NASD"), relating to compliance with
the rules of The Options Clearing Corporation and of any
registered national securities exchange, or of any similar
organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Fund;
13) For delivery in accordance with the provisions of any agreement
among the Fund, the Custodian, and a Futures Commission Merchant
registered under the Commodity Exchange Act, relating to
compliance with the rules of the Commodity Futures Trading
Commission and/or any Contract Market, or any similar
organization or organizations, and the Investment Company Act
of 1940, as amended (the "Investment Company Act") and any
regulations promulgated thereunder, regarding account deposits
in connection with transactions by the Fund;
14) Upon receipt of instructions from the transfer agent ("Transfer
Agent") for the Fund, for delivery to such Transfer Agent or to
the holders of shares in connection with distributions in kind,
as may be described from time to time in the Fund's currently
effective prospectus and Statement of Additional Information
("prospectus"), in satisfaction of requests by holders of Shares
for repurchase or redemption; and
15) For any other proper Fund purpose, but only upon receipt of, in
addition to Proper Instructions, a certified copy of a
resolution of the Board of Trustees signed by an officer of the
Fund and certified by the Secretary or an Assistant Secretary,
specifying the securities to be delivered, setting forth the
purpose for which such delivery is to be made, and naming the
person or persons to whom delivery of such securities shall be
made.
2.3 Registration of Securities. Domestic securities held by the
Custodian (other than bearer securities) shall be registered in the name
of the Fund or in the name of any nominee of the Fund or of any nominee
of the Custodian which nominee shall be assigned exclusively to the Fund,
unless the Fund has authorized in writing the appointment of a nominee to
be used in common with other registered investment companies having the
same investment adviser as the Fund, or in the name or nominee name of any
agent appointed pursuant to Section 2.9 or in the name or nominee name of
any sub-custodian appointed pursuant to Article 1, each of which nominee
names shall be assigned exclusively to the Fund. All securities accepted
by the Custodian on behalf of the Fund under the terms of this Contract
shall be in "street name" or other form consonant with generally accepted
industry practices as to "good delivery."
2.4 Bank Accounts. The Custodian shall open and maintain a separate bank
account or accounts in the United States in the name of the Fund, subject
only to draft or order by the Custodian acting pursuant to the terms of
this Contract, and shall hold in such account or accounts, subject to the
provisions hereof, all cash received by it from or for the account of the
Fund, other than cash maintained by the Fund in a bank account established
and used in accordance with Rule 17f-3 under the Investment Company Act.
Funds held by the Custodian for the Fund may be deposited by it to its
credit as Custodian in the Banking Department of the Custodian or in such
other banks or trust companies as it may in its discretion deem necessary
or desirable; provided, however, that every such bank or trust company
shall be qualified to act as a custodian under the Investment Company Act
and that each such bank or trust company and the funds to be deposited
with each such bank or trust company shall be approved by vote of a
majority of the Board of Trustees of the Fund. Such funds shall be
deposited by the Custodian in its capacity as Custodian and shall be
withdrawable by the Custodian only in that capacity.
2.5 Availability of Federal Funds. Upon mutual agreement between the
Fund and the Custodian, the Custodian shall, upon the receipt of Proper
Instructions, make Federal Funds available to the Fund as of specified
times agreed upon from time to time by the Fund and the Custodian in the
amount of checks received in payment for Shares of the Fund which are
deposited into the Fund's account.
2.6 Collection of Income. Without being required to obtain Proper
Instructions, or by virtue of continuing Proper Instructions, the
Custodian shall collect on a timely basis all income and other payments
with respect to securities held by the Custodian hereunder to which the
Fund shall be entitled either by law or pursuant to custom in the
securities business, and shall collect on a timely basis all income and
other payments with respect to bearer securities held by the Custodian
hereunder if, on the date of payment by the issuer, such securities are
held by the Custodian or its agent, and shall credit such income, as
collected, to the Fund's custodian account. Without limiting the
generality of the foregoing, the Custodian shall detach and present for
payment all coupons and other income items requiring presentation as and
when they become due and shall collect interest when due on securities
held hereunder. Unless the Custodian has agreed to act as the Fund's
agent in connection with a securities loan pursuant to Section 2.2 (10),
income due the Fund on United States securities loaned pursuant to the
provisions of each such section shall be the responsibility of the Fund,
and the Custodian will have no duty or responsibility in connection
therewith, other than to provide the Fund with such information or data
as may be necessary to assist the Fund in arranging for the timely
delivery to the Custodian of the income to which the Fund is properly
entitled.
2.7 Payment of Fund Monies. Upon receipt of Proper Instructions, which
may be continuing instructions when use of continuing instructions
is deemed appropriate by the parties, the Custodian shall pay out
monies of the Fund in the following cases only:
1) Upon the purchase of domestically traded securities, options,
futures contracts or options on futures contracts for the
account of the Fund but only (a) against the delivery of such
securities, or evidence of title to such options, futures
contracts or options on futures contracts, to the Custodian (or
any bank, banking firm or trust company doing business in the
United States or abroad which is qualified under the Investment
Company Act to act as a custodian and has been designated by the
Custodian as its agent for this purpose) registered in the name
of the Fund or in the name of a nominee of the Custodian
referred to in Section 2.3 hereof or in proper form for
transfer; (b) in the case of a purchase effected through a
Securities System, in accordance with the conditions set forth
in Section 2.10 hereof; (c) in the case of a purchase involving
the Direct Paper System, in accordance with the conditions set
forth in Section 2.10A: (d) in the case of repurchase agreements
entered into between the Fund and any other party, (i) against
delivery of the collateral securities either in certificate from
or through an entry crediting the Custodian's account at the
Federal Reserve Bank with such securities, or (ii) against
delivery of the receipt evidencing purchase by the Fund of
securities owned by the Custodian along with written evidence
of the agreement by the Custodian to repurchase such securities
form the Fund or (e) for transfer to a time deposit account of
the Fund in any bank selected by the Fund, whether domestic or
foreign; such transfer may be effected prior to receipt of a
confirmation from a broker and/or the applicable bank pursuant
to Proper Instructions from the Fund as defined in Article 5;
2) In connection with conversion, exchange or surrender of
securities owned by the Fund as set forth in Section 2.2 hereof;
3) For the redemption or repurchase of Shares issued by the Fund
as set forth in Article 4 hereof;
4) For the payment of any expense or liability incurred by the
Fund, including but not limited to the following payments for
the account of the Fund: interest; taxes; management,
accounting, transfer agent and legal fees, and operating
expenses of the Fund whether or not such expenses are to be in
whole or part capitalized or treated as deferred expenses;
5) For the payment of any dividends declares pursuant to the
governing documents of the Fund;
6) For payment of the amount of dividends received in respect of
securities sold short;
7) For any other proper purpose, but only upon receipt of, in
addition to Proper Instructions, a certified copy of a
resolution of the Board of Trustees of the Fund signed by an
officer of the Fund and certified by its Secretary or an
Assistant Secretary, specifying the amount of such payment,
setting forth the purpose for which such payment is to be made,
and naming the person or persons to whom such payment is to be
made.
2.8 Liability for Payment in Advance of Receipt of Securities Purchased.
Except as specifically stated otherwise in this Contract, in any and every
case where payment for purchase of domestic securities for the account of
the Fund is made by the Custodian in advance of receipt of the securities
purchased in the absence of specific written instructions from the Fund
to so pay in advance, the Custodian shall be absolutely liable to the Fund
for such securities to the same extent as if the securities had been
received by the Custodian.
2.9 Appointment of Agents. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the Investment Company Act to act
as a custodian, as its agent to carry out such of the provisions of this
Article 2 as the Custodian may from time to time direct; provided, however
that the appointment of any agent shall not relieve the Custodian of its
responsibilities or liabilities hereunder.
2.10 Deposit of Securities in Securities Systems. The Custodian may
deposit and/or maintain domestic securities owned by the Fund in a
clearing agency registered with the Securities and Exchange Commission
under Section 17A of the Exchange Act, which clearing agency acts as a
securities depository, or in the book-entry system authorized by the U.S.
Department of the Treasury and certain federal agencies, (such securities
depositories and book-entry system being collectively referred to herein
as "Securities Systems") in accordance with applicable Federal Reserve
Board and/or Securities and Exchange Commission rules and regulations, if
any, and subject to the following provisions:
1) The Custodian may keep domestic securities of the Fund in a
Securities System provided that such securities are represented
in an account ("Account") of the Custodian in the Securities
System which shall not include any assets of the Custodian other
than assets held as a fiduciary, custodian or otherwise for its
customers;
2) The Custodian shall keep and maintain records with respect to
domestic securities of the Fund which are maintained in a
Securities System, which records shall identify by book-entry
those securities belonging to the Fund;
3) The Custodian shall pay for domestic securities purchased for
the account of the Fund upon (i) receipt of advice from the
Securities System that such securities have been transferred to
the Account, (ii) the verification by the Fund to the Custodian
that such trade is correct, by agreed upon means, and (iii) the
making of an entry on the records of the Custodian to reflect
such transfer and payment for the account of the Fund. Copies
of all advices from the Securities System of transfers of
domestic securities for the account of the Fund shall identify
the Fund, be maintained for the Fund by the Custodian and be
provided to the Fund each day, on the next business day after
each transaction. The Custodian shall furnish the Fund
confirmation of each transfer to or from the account of the Fund
in the form of a written advice or notice and shall furnish to
the Fund copies of daily transaction sheets reflecting each
day's transactions in the Securities System for the account of
the Fund.
4) The Custodian shall provide the Fund with any report obtained
by the Custodian on the Securities System's accounting system,
internal accounting control and procedures for safeguarding
domestic securities deposited in the Securities System;
5) The Custodian shall have received the initial or annual
certificate, or other designation herein, as the case may be,
required by Article 13 hereof;
6) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage to
the Fund resulting from use of the Securities System by reason
of any negligence, misfeasance or misconduct of the Custodian
or any of its agents or of any of its or their respective
employees or from failure of the Custodian or any such agent to
enforce effectively such rights as it may have against the
Securities System; at the election of the Fund, it shall be
entitled to be subrogated to the rights of the Custodian with
respect to any claim which the Custodian may have against the
Securities System or any other person as a consequence of any
such loss or damage if and to the extent that the Fund has not
been made whole for any such loss or damage;
7) This authorization may be terminated on written notice to the
Custodian by the Fund, and, except as expressly agreed to
herein, shall not make the Fund responsible or liable for the
charges and expenses of the deposit of Fund Assets with any
Securities System. With respect to the acceptance or rejection
of securities transactions through the Institutional Delivery
System of the Depository Trust Company ("DTC"), in which the
Custodian is a participant, the Custodian shall be responsible
for issuing timely instructions to DTC with respect to such
transactions, upon the Custodian's receipt of Proper
Instructions from the Fund.
2.10A Fund Assets Held in the Custodian's Direct Paper System
The Custodian may deposit and/or maintain securities owned by
the Fund in the Direct Paper System of the Custodian subject to
the following provisions:
1) No transaction relating to securities in the Direct Paper
System will be effected in the absence of Proper
Instructions and unless the Custodian shall have received
the initial or annual certificate required by Article 13
hereof;
2) The custodian may keep securities of the Fund in the
Direct Papery System only if such securities are
represented in an account ("Account") of the Custodian in
the Direct Paper System which shall not include any assets
of the Custodian other than assets held as a fiduciary,
custodian or otherwise for its customers;
3) The Custodian shall keep and maintain with respect to
securities of the Fund which are maintained in the Direct
Papery System, which records shall identify by book-entry
those securities belonging to the Fund;
4) The Custodian shall pay for securities purchased for the
account of the Fund upon the making of an entry on the
records of the Custodian to reflect such payment and
transfer of securities to the account of the Fund. The
Custodian shall transfer securities sold for the account
of the Fund upon the making of an entry on the records of
the Custodian to reflect such transfer and receipt of
payment for the account of the Fund;
5) The Custodian shall furnish the Fund confirmation of each
transfer to or from the account of the Fund, in the form
of a written advice or notice, of Direct Paper on the next
business day following such transfer and shall furnish to
the Fund copies of daily transaction sheets reflecting
each day's transaction in the Securities System for the
account of the Fund;
6) The Custodian shall provide the Fund with any report on
its system of internal accounting control as the Fund may
reasonably request from time to time.
2.11 Segregated Account. The Custodian shall upon receipt of Proper
Instructions establish and maintain a segregated account or accounts for
and on behalf of the Fund, into which account or accounts may be
transferred cash and/or securities, including securities maintained in an
account by the Custodian pursuant to Section 2.10 hereof, (i) in
accordance with the provisions of any agreement among the Fund, the
Custodian and a broker-dealer registered under the Exchange Act and a
member of the NASD (or any futures commission merchant registered under
the Commodity Exchange Act), relating to compliance with the rules of The
Options Clearing Corporation and of any registered national securities
exchange (or the Commodity Futures Trading Commission or any registered
contract market), or of any similar organization or organizations,
regarding escrow or other arrangements in connection with transactions by
the Fund, which escrow account may be in the name of the broker or
clearing organization for such financial futures contracts, (ii) for
purposes of segregating cash or government securities in connection with
options purchased, sold or written by the Fund or commodity futures
contracts or options thereon purchased or sold by the Fund, (iii) for the
purposes of compliance by the Fund with the procedures required by
Investment Company Act Release No. 10666, or any subsequent release or
releases of the Securities and Exchange Commission relating to the
maintenance of segregated accounts by registered investment companies, and
(iv) for other proper corporate purposes, but only, in the case of clause
(iv), upon receipt of, in addition to Proper Instructions, a certified
copy of a resolution of the Board of Trustees signed by an officer of the
Fund and certified by the Secretary or an Assistant Secretary, and setting
forth the purpose or purposes of such segregated account.
2.12 Ownership Certificates for Tax Purposes. The Custodian shall execute
ownership and other certificates and affidavits for all federal and state
tax purposes in connection with receipt of income or other payments with
respect to Fund Assets held by it and in connection with transfers of such
securities.
2.13 Proxies. The Custodian shall, with respect to the Fund Assets held
hereunder, cause to be promptly executed by the registered holder of such
securities, if the securities are registered otherwise than in the name
of the Fund or a nominee of the Fund, all proxies, without indication of
the manner in which such proxies are to be voted, and shall promptly
deliver to the Fund such proxies, all proxy soliciting materials and all
notices relating to such securities.
2.14 Communications Relating to Fund Assets. The Custodian shall transmit
promptly to the Fund all written information (including, without
limitation, pendency of calls and maturities of domestic securities and
expirations of rights in connection therewith and notices of exercise of
call and put options written by the Fund and the maturity of futures
contracts purchased or sold by the Fund) received by the Custodian from
issuers of the domestic securities being held for the Fund. With respect
to tender or exchange offers, the Custodian shall transmit promptly to the
Fund all written information received by the Custodian from issuers of the
domestic securities whose tender or exchange is sought and from the party
(or his agents) making the tender or exchange offer. If the Fund desires
to take action with respect to any tender offer, exchange offer or any
other similar transaction, and the Custodian has promptly notified the
Fund, the Fund shall notify the Custodian at least three business days
prior to the date on which the Custodian is to take such action.
2.15 Reports to the Fund by Independent Public Accountants
The Custodian shall provide the Fund, at such times as the Fund may
reasonably require, with reports by independent public accountants on the
accounting system, internal accounting control and procedures for
safeguarding securities, futures contracts and options on futures
contract, including domestic securities deposited and/or maintained in a
Securities System, relating to the services provided by the Custodian
under this contract; such reports shall be of sufficient scope and in
sufficient detail, as may reasonably be required by the Fund to provide
reasonable assurance that any material inadequacies would be disclosed by
such examination, and, if there are no such inadequacies, the reports
shall so state.
3. Duties of the Custodian with Respect to Property of the Fund Held
outside of the United States
3.1 Appointment of Foreign Sub-Custodians
The Fund hereby authorizes and instructs the Custodian to employ as
sub-custodians for the Fund's securities and other assets maintained
outside the United States the foreign banking institutions and foreign
securities depositories designated on Schedule A hereto ("foreign sub-
custodians"). Upon the Custodian's receipt of "Proper Instructions,"
together with a certified resolution of the Fund's Board of Trustees, the
Custodian and the Fund may agree to amend Schedule A hereto from time to
time to designate additional foreign banking institutions and foreign
securities depositories to act as sub-custodians. Upon receipt of Proper
Instructions, the Fund may instruct the Custodian to cease the employment
of any one or more such sub-custodians for maintaining custody of the
Fund's assets.
3.2 Assets to be Held. The Custodian shall limit the securities and
other assets maintained in the custody of the foreign sub-custodians to:
(a) "foreign securities," as defined in Article 1 of this Contract and in
paragraph (c)(1) of Rule 17f-5 under the Investment Company Act, and (b)
cash and cash equivalents in such amounts as the Custodian or the Fund may
determine to be reasonably necessary to effect the Fund's foreign
securities transactions.
3.3 Foreign Securities Depositories. Except as may otherwise be agreed
upon in writing by the Custodian and the Fund, assets of the Fund shall
be maintained in foreign securities depositories only through arrangements
implemented by the foreign banking institutions serving as sub-custodians
pursuant to the terms hereof. Where possible, such arrangements shall
include entry into agreements containing the provisions set forth in
Section 3.5 hereof.
3.4 Segregation of Securities. The Custodian shall identify on its books
as belonging to the Fund, the foreign securities of the Fund held by each
foreign sub-custodian. Each agreement pursuant to which the Custodian
employs a foreign banking institution shall require that such institution
establish a custody account for the Custodian on behalf of the Fund and
physically segregate in that account, securities and other assets of the
Fund, and, in the event that such institution deposits the Fund's
securities in a foreign securities depository, that such depository shall
identify on its books as belonging to the Custodian, as agent for the
Fund, the securities so deposited.
3.5 Agreements with Foreign Banking Institutions. Each agreement with
a foreign banking institution shall be substantially in the form set forth
in Exhibit 1 hereto and shall provide that: (a) the Fund's assets will
not be subject to any right, charge, security interest, lien or claim of
any kind in favor of the foreign banking institution or its creditors or
agents, except a claim of payment for their safe custody or
administration; (b) beneficial ownership of the Fund's Assets will be
freely transferable without the payment of money or value other than for
custody or administration; (c) adequate records will be maintained
identifying the assets as belonging to the Fund; (d) officers of or
auditors employed by, or other representatives of the Custodian, including
to the extent permitted under applicable law the independent public
accountants for the Fund, will be given access to the books and records
of the foreign banking institution relating to its actions under its
agreement with the Custodian; and (e) assets of the Fund held by the
foreign sub-custodian will be subject only to the instructions of the
Custodian or its agents.
3.6 Access of Independent Accountants of the Fund. Upon the request of
the Fund, the Custodian will use its best efforts to arrange for the
independent accountants of the Fund to be afforded access to the books and
records of any foreign banking institution employed as a foreign sub-
custodian insofar as such books and records relate to the performance of
such foreign banking institution under its agreement with the Custodian.
3.7 Reports by Custodian. The Custodian will supply to the Fund from
time to time, as mutually agreed upon, statements in respect of the
securities and other assets of the Fund held by foreign sub-custodians,
including but not limited to an identification of entities having
possession of the Fund's securities and other assets and advices or
notifications of any transfers of securities to or from each custodial
account maintained by a foreign banking institution for the Custodian on
behalf of the Fund indicating, as to securities acquired for the Fund, the
identity of the entity having physical possession of such securities.
3.8 Transactions in Foreign Custody Account.
(a) Except as other provided in paragraph (b) of this Section 3.8,
the provisions of Section 2.2 and 27 of this Contract shall apply, mutatis
mutandis to the foreign securities of the Fund held outside the United
States by foreign sub-custodians.
(b) Not withstanding any provision of this Contract to the contrary,
settlement and payment for securities received for the account of the Fund
and delivery of securities maintained for the account of the Fund may be
effected in accordance with the customary established securities trading
or securities processing practices and procedures in the jurisdiction or
market in which the transaction occurs, including, without limitation,
delivering securities to the purchaser thereof or to a dealer therefor (or
an agent for such purchaser or dealer) against a receipt with the
expectation of receiving later payment for such securities from such
purchaser or dealer.
(c) Securities maintained in the custody of a foreign sub-custodian
may be maintained in the name of such entity's nominee to the same extent
as set forth in Section 2.3 of this Contract, and the Fund agrees to hold
any such nominee harmless form any liability as a holder of record of such
securities.
3.9 Liability of Foreign Sub-Custodians. Each agreement pursuant to
which the Custodian employs a foreign banking institution as a foreign
sub-custodian shall require the institution to exercise reasonable care
in the performance of its duties and to indemnify, and hold harmless, the
Custodian and the Fund from and against any loss, damage, cost, expense,
liability or claim arising out of or in connection with the institution's
performance of such obligations. At the election of the Fund, it shall
be entitled to be subrogated to the rights of the Custodian with respect
to any claims against a foreign banking institution as a consequence of
any such loss, damage, cost, expense, liability or claim if and to the
extent that the Fund has not been made whole for any such loss, damage,
cost, expense, liability or claim.
3.10 Liability of Custodian. The Custodian shall be liable for the acts
or omissions of a foreign banking institution to the same extent as set
forth with respect to sub-custodians generally in this Contract and,
regardless of whether assets are maintained in the custody of a foreign
banking institution, a foreign securities depository or a branch of a U.S.
bank as contemplated by paragraph 3.13 hereof, the Custodian shall not be
liable for any loss, damage, cost, expense, liability or claim resulting
from nationalization, expropriation, currency restrictions, or acts of war
or terrorism or any loss where the sub-custodian has otherwise exercised
reasonable care. Notwithstanding the foregoing provisions of this
paragraph 3.10, in delegating custody duties to State Street London Ltd.,
the Custodian shall not be relieved of any responsibility to the Fund for
any loss due to such delegation, except such loss as may result from (a)
political risk (including, but not limited to, exchange control
restrictions, confiscation, expropriation, nationalization, insurrection,
civil strife or armed hostilities) or (b) other losses (excluding a
bankruptcy or insolvency of State Street London Ltd. not caused by
political risk) due to Acts of God, nuclear incident or other losses under
circumstances where the Custodian and State Street London Ltd. have
exercised reasonable care.
3.11 Reimbursement for Advances. If the Fund requires the Custodian to
advance cash or securities for any purpose including the purchase or sale
of foreign exchange or of contracts for foreign exchange, or in the event
that the Custodian or its nominee shall incur or to be assessed any taxes
(other than taxes on its income), charges, expenses, assessments, claims
or liability in connection with the performance of this Contract, except
such as may arise from its or its nominee's own negligent action,
negligent failure to act, violation of law, or willful misconduct, any
property at any time held for the account of the Fund shall be security
therefor and should the Fund fail to repay the Custodian promptly, the
Custodian shall be entitled to utilize available cash and to dispose of
the Fund assets to the extent necessary to obtain reimbursement.
3.12 Monitoring Responsibilities. The Custodian shall furnish annually
to the Fund, during the month of June, information concerning the foreign
sub-custodians employed by the Custodian. Such information shall be of
a kind to enable the Fund's Board of Trustees to comply with the
provisions of Rule 17f-5 under the Investment Company Act. In addition,
the Custodian will promptly inform the Fund in the event that the
Custodian learns of a material adverse change in the financial condition
of a foreign sub-custodian or any material loss of the assets of the Fund
or in the case of any foreign sub-custodian not the subject of an
exemptive order from the Securities and Exchange Commission is notified
by such foreign sub-custodian that there appears to be a substantial
likelihood that its shareholders' equity will decline below $200 million
(U.S. dollars or the equivalent thereof) or that its shareholders' equity
has declined below $200 million (in each case computed in accordance with
generally accepted U.S. accounting principles).
3.13 Branches of U.S. Banks
(a) Except as otherwise set forth in this Contract, the provisions
hereof shall not apply where the custody of the Fund assets are maintained
in a foreign branch of a banking institution which is a "bank" as defined
by Section 2(a)(5) of the Investment Company Act meeting the qualification
set forth in Section 26(a) of said Act. The appointment of any such
branch as a sub-custodian shall be governed by Article 1 of this Contract.
(b) Cash held for the Fund in the United Kingdom shall be maintained in
an interest bearing account established for the Fund with the Custodian's
London branch, which account shall be subject to the direction of the
Custodian, State Street London Ltd. or both.
4. Payments for Repurchases or Redemptions and Sales of Shares of the
Fund
From such funds as may be available for the purpose but subject to
the limitations of the Fund's Declaration of Trust and any applicable
votes of the Board of Trustees of the Fund pursuant thereto, the Custodian
shall, upon receipt of instructions from duly authorized personnel of the
Transfer Agent, make funds available for payment to holders of Shares who
have delivered to the Transfer Agent a request for redemption or
repurchase of their Shares. In connection with the redemption or
repurchase of Shares of the Fund, the Custodian is authorized upon receipt
of instructions from duly authorized personnel of the Transfer Agent to
wire funds to or through a commercial bank designated by the redeeming
shareholders, or to a commercial bank account designated by and for the
Fund.
The Custodian shall receive from the distributor for the Fund's
Shares or from the Transfer Agent of the Fund, as agent for the Fund's
distributor, and shall deposit into the Fund's account such payments as
are received for Shares of the Fund issued or sold from time to time by
the Fund. The Custodian will provide timely notification to the Fund and
the Transfer Agent of any receipt by it of payments for Shares of the
Fund.
5. Proper Instructions
"Proper Instructions," as used herein, means any one of (a) an
original writing signed by one or more persons as the Fund's Board of
Trustees shall have from time to time authorized, with written notice to
the Custodian, (b) oral instructions given by one or more persons as the
Fund's Board of Trustees shall have from time to time authorized, with
written notice to the Custodian, if the Custodian reasonably believes such
oral instructions to have been given by a duly authorized person, (c)
instructions transmitted by facsimile sending device signed by one or more
persons as the Fund's Board of Trustees shall have from time to time
authorized, with written notice to the Custodian, and (d) communications
effected by means of electronic or electro-magnetic communications media
using a password and instructions agreed upon by the Custodian and the
Fund from time to time for security reasons; the Custodian will maintain
for at least five years and produce for the Fund upon its request copies
of such instructions in machine readable or human readable form. The Fund
shall cause all oral instructions to be confirmed in writing. For
purposes of this Section, Proper Instructions shall include instructions
received by the Custodian from a broker or clearing organization which is
a party to any three-party agreement which requires a segregated asset
escrow account in accordance with Section 2.11; provided, however, the
Custodian shall not make payment or transfer from any such escrow account
except to the named broker or clearing organization upon receipt of
written notice from such broker or clearing organization representing that
the Fund is in default of a specified obligation for which the escrow was
established and setting forth the amount due to such broker or clearing
organization.
6. Actions Permitted without Express Authority
The Custodian may in its discretion, without Proper Instructions or
other express authority from the Fund:
1) make payments to itself or others for minor expenses of
handling securities or other similar items relating to its duties under
this Contract, provided that all such payments shall be accounted for to
the Fund;
2) surrender securities in temporary form for securities in
definitive form:
3) endorse for collection, in the name of the Fund, checks,
drafts and other negotiable instruments; and
4) in general, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase, transfer and
other dealings with Fund Assets except as otherwise directed by the Board
of Trustees of the Fund.
7. Evidence of Authority
In acting under this Contract, the Custodian shall be protected in
acting upon any instructions, notice, request, consent, certificate or
other instrument or paper reasonably believed by it to be genuine and to
have been properly executed by or on behalf of the Fund or the person or
persons whose authorization is required under the terms of this Contract.
The Custodian may receive and accept a certified copy of a resolution of
the Board of Trustees of the Fund as conclusive evidence (a) of the
authority of any person to act in accordance with such resolution or (b)
of any determination or of any action by the Board of Trustees pursuant
to the Fund's Declaration of Trust as described in such resolution, and
such resolution may be considered as in full force and effect until
receipt by the Custodian of written notice to the contrary.
8. Duties of Custodian with Respect to the Books of Account
8.1 The Custodian shall cooperate with and supply necessary information
to the entity or entities appointed by the Board of Trustees of the Fund
to keep the books of account of the Fund and/or compute the net asset
value per share of the outstanding shares of the Fund.
8.2 The Custodian shall furnish the Fund with the following reports: (1)
one each business day, a statement summarizing all transactions for the
Fund's account (including, without limitation, descriptions of purchases
and sales of portfolio securities, dividends on such securities, net
amounts invested, liquidations and expenses), and (2) within 3 days of the
close of a calendar month a listing of all Fund Assets held by the
Custodian and if requested by the Fund such report will identify those
securities in the possession of the Custodian, those in the possession of
a sub-custodian or Securities System and those in transit. Such
statements and listings shall be certified by a duly authorized officer
of the Custodian, and shall include only such information as may be
reasonably obtained by the Custodian at the time of such reports.
9. Records
The Custodian shall create and maintain all records relating to its
activities and obligations under this Contract in such manner as will meet
the obligations of the Fund under the Investment Company Act, with
particular attention to Section 3l thereof and Rules 31a-1 and 31a-2
thereunder, applicable federal and state tax laws and any other law or
administrative rules or procedures which may be applicable to the Fund.
All such records shall be the property of the Fund and shall at all times
during the regular business hours of the Custodian be open for inspection
by duly authorized officers, employees or agents of the Fund and employees
and agents of the Securities and Exchange Commission. The Custodian
shall, at the Fund's request, supply the Fund with a tabulation of
securities owned by the Fund and held by the Custodian, include
certificate numbers in such tabulations.
10. Opinion of Fund's Independent Account
The Custodian shall take all reasonable action, as the Fund may from
time to time request, to obtain from year to year favorable opinions from
the Fund's independent accountants with respect to its activities
hereunder in connection with the preparation of amendments to the Fund's
Form N-1A, and Form N-SAR or other reports to the Securities and Exchange
Commission and with respect to any other requirements of such Commission.
10A. Reports to Fund by Custodian's Independent Accountant
The Custodian shall provide the Fund, at such times as the Fund may
reasonably require, with reports of the Custodian's independent public
accountants on the accounting system, internal accounting control and
procedures for safeguarding securities, futures contracts and options on
futures contracts, including securities deposited and/or maintained in a
Securities System, relating to the services provided by the Custodian
under this Agreement; such reports shall be of sufficient scope and in
sufficient detail as may reasonably be required by the Fund to provide
reasonable assurance that any material inadequacies would be disclosed by
such examination, and, if there are no such inadequacies, the reports
shall so state.
11. Compensation of Custodian
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon in writing from time
to time between the Fund and the Custodian.
12. Responsibility of Custodian
So long as and to the extent that it has exercised reasonable care
and diligence, the Custodian shall not be responsible for the title,
validity or genuineness of any property or evidence of title hereto
received by it or delivered by it pursuant to this Contract and shall be
held harmless in acting upon any notice, request, consent, certificate or
other instrument reasonably believed by it to be genuine and to be signed
by the proper party or parties, including any futures commission merchant
acting pursuant to the terms of a three-party futures or options
agreement. The Custodian shall be held to the exercise of reasonable care
and diligence in carrying out the provisions of this Contract, but shall
be kept indemnified by and shall be without liability to the Fund for any
action taken or omitted by it in good faith without fraud, willful
misfeasance or negligence. The Custodian shall be entitled to rely on and
may act upon advice of legal counsel (who may be legal counsel for the
Fund) on any matters of law involved in any action to be taken by or
omitted by the Custodian under this Contract, and shall be without
liability for any action reasonably taken or omitted pursuant to such
advice.
The Custodian shall be liable for the acts or omissions of a foreign
banking institution appointed pursuant to the provisions of Article 3 to
the same extent as set forth in Article 1 hereof with respect to sub-
custodians located in the United States and, regardless of whether assets
are maintained in the custody of a foreign banking institution, a foreign
securities depository or a branch of a U.S. bank as contemplated by
paragraph 3.11 hereof, the Custodian shall not be liable for any loss,
damage, cost, expense, liability of claim resulting from, or caused by,
the direction of or authorization by the Fund to maintain custody or any
securities or cash of the Fund in a foreign country including, but not
limited to, losses resulting from nationalization, expropriation, currency
restrictions, or acts of war or terrorism.
If the Fund requires the Custodian to take any action with respect
to securities, which action involves the payment of money or which action
may, in the opinion of the Custodian, result in the Custodian or its
nominee assigned to the Fund being liable for the payment of money or
incurring liability of some other form, the Fund, at the request of the
Custodian and as a prerequisite to requiring the Custodian to take such
action, shall provide indemnity to the Custodian in an appropriate amount
and form reasonably satisfactory to it.
If the Fund requires the Custodian to advance cash or securities for
any purpose or in the event that the Custodian or its nominee shall incur
or to be assessed any taxes, charges, expenses, assessments, claims or
liability in connection with the performance of this Contract for which
it is entitled to be indemnified by the Fund and provided the Custodian
shall have promptly notified the Fund of such occurrence and afforded the
Fund any feasible opportunity to contest the same, except such as may
arise from its or its nominee's own negligent action, negligent failure
to act or willful misconduct.
13. Effective Period, Termination and Amendment
This Contract shall become effective as of the date appearing below
in the final paragraph hereof and shall continue in full force and effect
until terminated as hereinafter provided; may be amended at any time by
mutual agreement of the parties hereto; and may be terminated by either
party by an instrument in writing delivered or mailed, postage prepaid to
the other party, such termination to take effect not sooner than thirty
days after the date of such delivery or mailing; provided, however, to the
extent not stated herein, that the Custodian shall not act under Section
2.10 hereof, in the absence of receipt of an initial certificate of the
Secretary or an Assistant Secretary that the Board of Trustees of the Fund
has approved in the initial use of a particular Securities System selected
by the Fund and the receipt of an annual certificate of the Secretary or
an Assistant Secretary that the Board of Trustees has reviewed the use by
the Fund of such Securities System, as required in each case by Rule 17f-4
under the Investment Company Act, and that the Custodian shall not act
under Section 2.10A hereof in the absence of receipt of an initial
certificate of the Secretary or an Assistant Secretary that the Board of
Trustees has approved in the initial use of the Direct Paper System and
the receipt of an annual certificate of the Secretary or an Assistant
Secretary that the Board of Trustees has reviewed the use by the Fund of
the Direct Paper System; provided further, however, that the Fund shall
not amend or terminate this Contract in contravention of any applicable
federal or state regulations, or any provision of the Fund's Declaration
of Trust, and further provided, that the Fund may at any time by action
of its Board of Trustees (i) substitute another bank or trust company for
the Custodian by giving notice as described above to the Custodian, or
(ii) immediately terminate this Contract in the event of the appointment
of a conservator or receiver for the Custodian by the Comptroller of the
Currency or upon the happening of a like event at the direction of an
appropriate regulatory agency or court of competent jurisdiction. The
Fund's Board of Trustees has approved the use of the Depository Trust
Company ("DTC") and the Federal Reserve Treasury Department Book-Entry
System as Securities Systems for the deposit of Fund assets (the foregoing
statement being in lieu of the initial certificate called for by this
subparagraph.
Upon termination of this Contract, the Fund shall pay to the
Custodian such compensation as may be due as of the date of such
termination and shall likewise reimburse the Custodian for its costs,
expenses and disbursements.
14. Successor Custodian
If a successor custodian shall be appointed by the Board of Trustees
of the Fund, the Custodian shall, upon termination of its appointment
hereunder, deliver to such successor custodian at the office of the
Custodian, duly endorsed and in the form for transfer, all securities,
funds and other Fund Assets then held by it hereunder and shall transfer
to an account of the successor custodian off of the Fund's securities held
in a Securities System.
If no such successor custodian shall be appointed, the Custodian
shall, in like manner, upon receipt of a certified copy of the
resolution(s) of the Board of Trustees of the Fund, deliver at the office
of the Custodian and transfer such Fund Assets in accordance with such
vote.
In the event that no written order designating a successor custodian
or certified copy of a resolution of the Board of Trustees hall have been
delivered to the Custodian on or before the date when such termination
shall become effective, then the Custodian shall have the right to deliver
to a bank or trust company of its own selection, which (i) is a "bank" as
defined in the Investment Company Act, having an aggregate capital,
surplus, and undivided profits, as shown by its last published report, of
not less than $25,000,000, and (ii) the Custodian shall use its best
effort to cause such successor custodian to continue the terms of this
Contract, all Fund Assets held by the Custodian and all instruments held
by the Custodian relative thereto and all other property held by it under
this Contract and to transfer to an account of such successor custodian
all of the Fund's securities held in any Securities System. Thereafter,
such bank or trust company shall be the successor of the Custodian under
this Contract.
In an event that Fund Assets remain in the possession of the
Custodian after the date of termination hereof owing to (i) failure of the
Fund to procure the certified copy of the resolution referred to or (ii)
failure of the Board of Trustees to appoint a successor custodian, the
Custodian shall be entitled to fair compensation for its services during
such period as the Custodian retains possession of such Fund Assets and
the provisions of this Contract relating to the duties and obligations of
the Custodian shall be entitled to fair compensation for its services
during such period as the Custodian retains possession of such Fund Assets
and the provisions of this Contract relating to the duties and obligations
of the Custodian shall remain in full force and effect.
15. Interpretive and Additional Provisions
In connection with the operation of this Contract, the Custodian and
the Fund may from time to time agree on such provisions interpretive of
or in addition to the provisions of this Contract as may in their joint
opinion be consistent with the general tenor of this Contract. Any such
interpretive or additional provisions shall be in a writing signed by both
parties and shall be annexed hereto, provided that no such interpretive
or additional provisions shall contravene any applicable federal or state
regulations or any provision of the Declaration of Trust of the Fund. No
interpretive or additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this Contract.
16. Massachusetts Law to Apply
This Contract shall be construed and the provisions thereof
interpreted under and in accordance with laws of the Commonwealth of
Massachusetts.
17. Prior Contracts
This Contract supersedes and terminates, as of the date hereof, all
prior contracts between the Fund and the Custodian relating to the custody
of the Fund's assets; shall be binding upon the successor of any of the
parties; and shall not be modified or amended except by a writing signed
by a duly authorized representative of each party.
18. Disclaimer of Shareholder Liability
The Custodian understand and agrees that the obligations of the Fund
under this Contract are not binding upon any shareholder of the Fund
personally, but bind only the Fund and the Fund's property; the Custodian
represents that it has notice of the provisions of the Fund's Declaration
of Trust disclaiming shareholder liability for acts or obligations of the
Fund.
IN WITNESS WHEREOF, each of the parties has caused this instrument
to be executed in its name and behalf by its duly authorized
representative and its seal to be hereunder affixed as of the 10th day of
September, 1986.
ATTEST OPPENHEIMER GNMA FUND
/s/ Robert G. Zack BY /s/ Robert G. Galli
ATTEST STATE STREET BANK AND TRUST COMPANY
/s/ E.D. Hawkins, Jr.
Assistant Secretary Vice President
Schedule A
The following foreign banking institutions and foreign securities
depositories have been approved by the Board of Trustees of Oppenheimer
GNMA Fund for use as sub-custodians for the Fund's securities and other
assets:
(Insert banks and securities depositories)
COLE & DEITZ
COUNSELORS AT LAW
175 WATER STREET
NEW YORK, N.Y. 10037-4924
August 27, 1986
Oppenheimer GNMA Fund
Two Broadway
New York, N.Y. 10004
Dear Sirs:
We have examined the Restated Declaration of Trust of Oppenheimer
GNMA Fund (the "Fund") dated August 6, 1986, as filed by the Secretary of
State of Massachusetts together with such other records and documents as
we deemed necessary for the purpose of this opinion.
It is our opinion that the Fund is a business trust duly organized
and validly existing under the laws of the Commonwealth of Massachusetts
and that an indefinite number of shares of the Fund covered by its
Registration Statement on Form N-1A when issued and paid for in accordance
with the terms of the offering, as set forth in the Prospectus and
Statement of Additional Information forming a part of the Registration
Statement, will be, when such Registration Statement shall have become
effective, legally issued, fully paid and non-assessable by the Fund to
the extent set forth in such Registration Statement.
We hereby consent to the filing of this opinion as an Exhibit to such
Registration Statement and to the reference to us in such Prospectus
and/or Statement of Additional Information. We also consent to the filing
of this opinion with the authorities administering the "Blue Sky" or
securities law of any jurisdiction in connection with the registration or
qualification under such law of the Fund's shares.
Very truly yours,
Cole & Dietz
APPLICATION AND ADOPTION AGREEMENT DOCUMENT 1
OPPENHEIMERFUNDS STANDARDIZED MONEY PURCHASE PENSION PLAN
This application offers a number of choices regarding the features of your
Money Purchase Pension Plan. Notes are included in the left-hand margin
to help you complete the application.
/ / Check this box if this an amendment to an existing plan.
Note: Failure to properly fill out this Adoption Agreement may result in
disqualification of the Plan. The Employer should, therefore, consult a
tax advisor concerning execution of this Adoption Agreement. This
Adoption Agreement must be used only in conjunction with the
OppenheimerFunds Retirement Plan Basic Plan Document (No. 01).
[at left-hand margin]
Mail this form to:
Oppenheimer Shareholder Services
Retirement Plans Administration
P.O. Box 173694
Denver, CO 80217-3694
If you do not have an Employer Federal Tax I.D. Number, obtain one by
filing a Form SS-4 at your local IRS district office.
[end]
1. EMPLOYER INFORMATION.
A. Employer's Name:
B. Employer's Business Address:
If mail pertaining to Participants' Accounts will be sent to a
different address, then also provide such address:
C. Employer's Federal Tax I.D.:
Type of Business:
D. / / Sole Proprietor
/ / Partnership
/ / Corporation
E. Employer's Taxable Year (Plan Year) for Federal Income Tax
purposes:
/ / Calendar Year, or
/ / Other year beginning with the first day of (month) each
year
[at left-hand margin]
If you are selecting more than one fund or have more than one participant,
use the Retirement Plan Contribution Form on Page 15.
Use the first day of your fiscal year unless you are transferring or
amending your current plan.
[end]
2. PLAN INFORMATION.
A. (For non-insured portion of the Plan.) Dollar Amount of Initial
Employer Contributions:
(For insured portion of the Plan: Send the insurance premium,
if any, for the insured portion of the Plan to the insurance
company [see Item 8].)
B. Initial Mutual Fund Investment (insert name of fund):
C. Plan Number (e.g., 001, 002):
(Paired plans should each have a separate number, such as 001
for the profit sharing plan and 002 for the money purchase
pension plan.)
D. Effective Date:
(For a plan in existence, the Effective Date is the date the
plan was adopted by the Employer. For a new plan, the Effective
Date is the first day of the Plan Year in which the plan is
adopted.)
[at left-hand margin]
You can specify any period of up to two years including full and
fractional years, which employees must complete before they can
participate in the plan. You can also specify no service requirement.
[end]
3. PARTICIPATION.
A. Number of years of service necessary for participation (not
greater than 2 years):
Any individual who works 1,000 or more hours in a consecutive
twelve-month period, computed with reference to the date the
individual's employment commenced, shall be credited with a Year
of Service.
If the Years of Services selected is or includes a fractional
year, an Employee will not be required to complete any specified
number of hours of employment to receive credit for such
fractional year.
B. The Plan / / shall / / shall not exclude Employees covered by
a collective bargaining agreement.
4. COMPENSATION.
For any Participant, Compensation means Compensation as defined in
the Plan. Also, effective for Plan Years beginning on or after
January 1, 1990, choose A or B below:
A. / / Compensation shall include; or B. / / Compensation shall not
include any amount which is contributed by the Employer pursuant to
a salary reduction agreement and which is not includable in the gross
income of the Employee pursuant to Sections 125, 402(a)(8), 402(h)
or 403(b) of the Code.
[at left-hand margin]
An integrated formula allows you to coordinate the retirement benefits
provided by the Social Security Administration. If you want a relatively
simple plan, choose item A. If you wish to integrate your plan with Social
Security, choose item B and consult your tax advisor.
[end]
5. CONTRIBUTIONS (see Note on next page for self-employed contribution
calculation).
A. / / Plan shall not be integrated with Social Security.
The Employer will contribution [%] of Compensation (not in excess of
$200,000) for each Participant for the Plan Year (not to exceed 25%).
B. / / Plan shall be integrated with Social Security (complete (1)
and (2)):
The Employer shall contribute for each Plan Year:
(1) [%] (the "Base Contribution Percentage," which shall not be less
than 3%) of the Compensation of each Participant for the then-current
Plan Year, and
(2) [%] of the Compensation of each Participant in excess of the
Social Security Taxable Wage Base for the then-current Plan Year.
However, the percentage chosen under this paragraph (2) shall not
exceed the lesser of the Base Contribution Percentage above, or 5.7%.
Employer contributions on behalf of each Participant shall not exceed
the lesser of $30,000 or 25% of the Participant's Compensation for
the Plan Year. For purposes of the foregoing allocation formulas,
not more than $200,000 of each Participant's Compensation shall be
taken into account. Subject to Item 7 of this Adoption Agreement,
for Plan Years beginning before January 1, 1989, the Employer's
contribution will be allocated under an integrated or non-integrated
formula to the Account of each Participant who has completed at least
1,000 Hours of Service during the Plan Year and is an Employee on the
last day of such Plan Year. For Plan years beginning on or after
January 1, 1989, a Participant shall receive an allocation of such
Employer Contribution for the Plan Year if the Participant either (i)
has completed more than 500 Hours of Service for the Employer during
a Plan Year, regardless of whether the Participant is employed on the
last day of the Plan Year, or (ii) is employed on the last day of the
Plan Year.
Note: In calculating amounts which may be contributed for Self-
Employed Individuals, you must deduct contributions made to this Plan
and all other qualified self-employed retirement plans. The total
of all such contributions cannot exceed 25% of Earned Income as
defined in the Plan, or 20% of Net Profits for a Self-Employed
Individual before making such contributions.
[at left hand-margin]
Most employers choose age 65 as their retirement age. If you wish, you may
choose another age subject to the restrictions outlined here.
[end]
6. NORMAL RETIREMENT AGE.
Normal Retirement Age is age / / (not to exceed age 65) or the /
/ (not to exceed 5th) anniversary of the participation commencement
date, which date is the first day of the month in which the
Participant commenced participation. The Normal Retirement Age
chosen above may not be higher than the age that has previously been
effect under the Plan for a current Participant. For example, if the
Normal Retirement Age has been Age 62 or the 3rd anniversary of
participation, the Normal Retirement Age must be no higher than
either of those dates for current Participants. However, in no event
may the Normal Retirement Age chosen above be higher than 65 or
exceed the 5th anniversary of the participation.
[at left-hand margin]
If your plan is deemed to be Top-Heavy under IRS rules, you will be
required to make certain minimum contributions for your "non-key"
employees. (See the Plan Document for the definition of "key employee".)
Complete item B if you want to make these contributions to another non-
Oppenheimer sponsored plan.
[end]
7. MINIMUM TOP-HEAVY CONTRIBUTIONS (for Non-integrated Plans).
A. Notwithstanding the contribution formula selected in Item 5
above, for purposes of the minimum top-heavy contributions
required to be made under the Plan, the Employer contributions
shall be allocated under this paragraph A unless the Employer
checks and completes paragraph B below. The Employer
contribution allocated under this paragraph A shall be allocated
on behalf of each Participant who is not a Key Employee in an
amount that shall not be less than the lesser of (1) or (2):
(1) 3% of such Participant's Compensation for such Plan Year (or
5% of such Participant's Compensation for such Plan Year if the
Employer maintains a defined benefit plan), or
(2) In the case where the Employer has no defined benefit plan
which uses this Plan to satisfy the requirements of Section 401
of the Code, the highest percentage of Employer contributions
allocated on behalf of any Key Employee (expressed as a
percentage of the first $200,000 of such Key Employee's
Compensation for such Plan Year).
B. / / For each Plan Year in which the Employer maintains another
plan in addition to this Plan, the minimum allocation required
for any non-Key Employee shall be made by the Employer in
accordance with Section 415 of the Code under the following plan
or plans:
----------------------------------------------------------------
----------------------------------------------------------------
-------------------------------------------(enter plan name)
If this paragraph B is completed the Employer may not rely on
the opinion letter issued by the Internal Revenue Service to the
Sponsor to evidence that this Plan is qualified under Section
401 of the Internal Revenue Code. If the Employer has completed
this section and wants to determine that his plan(s) is
qualified, an application should be made to the appropriate Key
District Director of Internal Revenue.
Important Note: Choosing this paragraph B may cause this Plan
to fail to satisfy the design-based safe harbor of the proposed
regulations under Code Section 401(a)(4) as of the first day of
the first Plan Year beginning after 1991, even though all other
requirements of the safe harbor are met.
[at left-hand margin]
You and your plan participants may use a portion of the plan's assets to
buy life insurance contracts, subject to the restrictions outlined here.
[end]
8. INSURANCE.
If Insurance coverage is utilized:
A. The amount to be invested in ordinary life insurance contracts
for any Participant shall be less than 50% of the aggregate
Employer contributions allocated to his account. If term
insurance is selected, the premium shall be less than 25% of the
aggregate Employer contributions allocated to his Account.
B. If both ordinary life and term insurance are purchased on the
life of a Participant, the sum of the term insurance premium
plus one-half of the ordinary life premiums may not exceed 25%
of the Employer contributions made on behalf of such
Participant.
C. Employer contributions in excess of the insurance premium shall
be invested in shares of any fund managed by Oppenheimer
Management Corporation, or any parent, subsidiary or affiliate
thereof, or in Systematic Capital Accumulation Plans or Variable
Annuities for the accumulation of shares of one of these funds.
D. It is understood that the portion of the insurance premium that
is allocated to the current cost of the insurance protection
(term cost) is not tax deductible to the Self-Employed
Individual and is taxable income to Participant's who are
Employees. The insurance company may supply each insured
Participant with a statement of the dollar amount of the non-
deductible or taxable portion of the premium.
[at left-hand margin]
Complete this section only if you maintain any other qualified plans
besides an OppenheimerFunds Profit Sharing Plan. If you do maintain other
plans, their qualification may be adversely affected if you do not
complete this section.
[end]
9. ALLOCATION LIMITS.
If the Employer maintains or has ever maintained another qualified
plan (other than the OppenheimerFunds Profit Sharing Plan
(Standardized Plan) which is a paired plan with this Plan) in which
any Participant is (or was) a participant or could possibly become
a participant, the Employer must complete this Item 9. The Employer
must also complete this Item 9 if it maintains a welfare benefit
fund, as defined in Section 419(e) of the Code, or an individual
medical account, as defined in Section 415(1)(2) of the Code, under
which amounts are treated as Annual Additions under the Plan with
respect to any Participant in this Plan.
A. If the Participant is covered under another qualified defined
contribution plan maintained by the Employer, other than a
Master or Prototype Plan:
/ / The provisions of Sections 11.2(a) through 11.2(f) of
Article XI will apply, as if the other plan was a Master or
Prototype Plan.
/ / Employer should provide the method under which the plans
involved will limit total Annual Additions to the Maximum
Permissible Amount, and will properly reduce any Excess Amounts,
in a manner that precludes Employer discretion -- attach
separate sheet if necessary.
B. If the Participant is or has ever been a Participant in a
defined benefit plan maintained by the Employer, the Employer
should attach an explanation of the method under which the plans
involved will satisfy the 1.0 combined limitation of Section
11.4 of the Plan, which method shall preclude Employer
discretion.
10. MISCELLANEOUS.
A. A copy of the current prospectus of the fund(s), and the
variable annuity prospectus (if chosen) has been received by
each Participant named. Each new Participant will receive a
copy of the then current prospectus.
B. The Sponsor shall inform the Employer of any amendments made to
the Plan or of the discontinuance or abandonment of the Plan.
C. Information concerning the Sponsor:
Oppenheimer Funds Distributor, Inc.
Two World Trade Center
New York, NY 10048-0203
1-212-323-0200
[at left-hand margin]
Please sign in the appropriate space only after having read all the
materials and completing this Application.
[end]
11. SIGNATURES.
Under penalties of perjury, the undersigned Employer, or duly
authorized officer or employee thereof, hereby certifies (i) that the
taxpayer identification number set forth on the front of this
Application and Adoption Agreement is the Employer's correct taxpayer
identification number and (ii) currently the Employer is not under
IRS notification as being subject to backup withholding (line out
(ii) if under notification). If no such number is shown, the
undersigned further certifies, under penalties of perjury, that no
such number has been issued, and a number has been or soon will be
applied for; if a number is not provided to you within sixty days,
the undersigned understands that all payments (including redemptions)
are subject to 20% withholding under Federal tax law, until a number
is provided.
---------------------------- ----------------------------
Please Print Business Name (Date)
By: -------------------------
Sole Proprietor, Partner
or Corporate Officer
(signature)
Note: An Employer who has ever maintained or who later adopts any
plan (including a welfare benefit fund, as defined in section 419(e)
of the Code, which provides post-retirement medical benefits
allocated to separate accounts for Key Employees, as defined in
Section 419A(d)(3) of the Code, or an individual medical account, as
defined in Section 415(1)(2) of the Code) in addition to this Plan
(other than the OppenheimerFunds Profit Sharing Plan (Standardized
Plan) that is a paired plan with this Plan) may not rely on the
opinion letter issued by the National Office of the Internal Revenue
Service as evidence that this Plan is qualified under Section 401 of
the Code. 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.
12. DEALER INFORMATION.
--------------------------------------------------------------
Dealer Name
--------------------------------------------------------------
Dealer Head Office Address: No. and Street
--------------------------------------------------------------
City State Zip Code
--------------------------------------------------------------
Oppenheimer Dealer Number
--------------------------------------------------------------
Representative's Last Name First Name MI
--------------------------------------------------------------
Representative's Branch Office Address: No. and Street
--------------------------------------------------------------
City State Zip Code
--------------------------------------------------------------
Rep's Office Telephone Number Rep's A.E. Number
APPLICATION AND ADOPTION AGREEMENT DOCUMENT 2
OPPENHEIMERFUNDS STANDARDIZED PROFIT SHARING PLAN
This application offers a number of choices regarding the features of your
Profit Sharing Plan. Notes are included in the left-hand margin to help
you complete the application.
/ / Check this box if this is an amendment to an existing plan.
Note: Failure to properly fill out this Adoption Agreement may result in
disqualification of the Plan. The Employer should, therefore, consult a
tax advisor concerning execution of this Adoption Agreement. This
Adoption Agreement must be used only in conjunction with the
OppenheimerFunds Retirement Plan Basic Plan Document (No. 01).
[at left-hand margin]
Mail this form to:
Oppenheimer Shareholder Services
Retirement Plans Administration
P.O. Box 173694
Denver, CO 80217-3694
If you do not have an Employer Federal Tax I.D. Number, obtain one by
filing a Form SS-4 at your local IRS district office.
[end]
1. EMPLOYER INFORMATION.
A. Employer's Name:
B. Employer's Business Address:
If mail pertaining to Participants' Accounts will be sent to
a different address, then also provide such address:
C. Employer's Federal Tax I.D.:
Type of Business:
D. / / Sole Proprietor
/ / Partnership
/ / Corporation
E. Employer's Taxable Year (Plan Year) for Federal Income Tax
purposes:
/ / Calendar Year, or
/ / Other year beginning with the first day of (month) each
year
[at left-hand margin]
If you are selecting more than one fund or have more than one participant,
use the Retirement Plan Contribution Form on Page 15.
Use the first day of your fiscal year unless you are transferring or
amending your current plan.
[end]
2. PLAN INFORMATION.
A. (For non-insured portion of the Plan.) Dollar Amount of Initial
Employer Contributions:
(For insured portion of the Plan: Send the insurance premium,
if any, for the insured portion of the Plan to the insurance
company [see Item 8].)
B. Initial Mutual Fund Investment (insert name of fund):
C. Plan Number (e.g., 001, 002):
(Paired plans should each have a separate number, such as 001
for the profit sharing plan and 002 for the money purchase
pension plan.)
D. Effective Date:
(For a plan in existence, the Effective Date is the date the
plan was adopted by the Employer. For a new plan, the Effective
Date is the first day of the Plan Year in which the plan is
adopted.)
[at left-hand margin]
You can specify any period of up to two years including full and
fractional years, which employees must complete before they can
participate in the plan. You can also specify no service requirement.
[end]
3. PARTICIPATION.
A. Number of years of service necessary for participation (not
greater than 2 years):
Any individual who works 1,000 or more hours in a consecutive
twelve-month period, computed with reference to the date the
individual's employment commenced, shall be credited with a Year
of Service.
If the Years of Services selected is or includes a fractional
year, an Employee will not be required to complete any specified
number of hours of employment to receive credit for such
fractional year.
B. The Plan / / shall / / shall not exclude Employees covered by
a collective bargaining agreement.
4. COMPENSATION.
For any Participant, Compensation means Compensation as defined in
the Plan. Also, effective for Plan Years beginning on or after
January 1, 1990, choose A or B below:
A. / / Compensation shall include; or B. / / Compensation shall not
include any amount which is contributed by the Employer pursuant to
a salary reduction agreement and which is not includable in the gross
income of the Employee pursuant to Sections 125, 402(a)(8), 402(h)
or 403(b) of the Code.
[at left-hand margin]
You may make a profit-sharing contribution which exceeds your earnings or
profits, if any, for the year. Check this option if you wish to do so.
An integrated formula allows you to coordinate the retirement benefits
provided by the Social Security Administration. If you want a relatively
simple plan, choose item B. If you wish to integrate your plan with Social
Security, choose item C and consult your tax advisor.
[end]
5. CONTRIBUTIONS (see Note on next page for self-employed contribution
calculation).
A. Under the profit-sharing plan contribution formula the amount
of Employer contributions for each year is not fixed and may
vary from year to year. Contributions may be made only from the
Net Income of the Employer for the Plan Year unless the Employer
elects to disregard Net Income below.
Check this option if you wish it to apply to your Plan:
/ / Effective for Plan Years beginning on or after (date) (fill
in the first day of the Plan Year in which this Adoption
Agreement is executed for a subsequent anniversary of such
date), notwithstanding any other provision of the Plan, the
Employer contributions shall be made to the Plan without regard
to current or accumulated earnings and profits for the taxable
year or years ending with or within such Plan Year.
The Employer must also check B or C below:
B. / / Plan shall be not integrated with Social Security.
The Employer shall contribute an amount to be determined by the
Employer each Plan Year. Such contributions shall be allocated
as a uniform percentage of each Participant's Compensation (not
in excess of $200,000) up to 15% of Compensation.
C. / / Plan shall be integrated with Social Security.
Effective for the Plan Years beginning on or after January 1,
1989, the Employer shall contribute an amount to be determined
by the Employer each Plan Year, which amount shall be allocated
to the Accounts of Participants as follows:
(1) First, contributions made by the Employer shall be allocated
to each Participant's Account in the ratio that each
Participant's total Compensation bears to all Participants'
total compensation, but not in excess of 3% of each
Participant's Compensation;
(2) next, any contributions remaining after the allocation in
subparagraph (1) shall be allocated to each Participant's
Account in the ratio that each Participant's Excess Compensation
(see Section 1.1 of the Plan) for the Plan Year bears to the
Excess Compensation of all Participants, but not in excess of
3%;
(3) Any contributions remaining after the allocation in
subparagraph (2) shall be allocated to each Participant's
Account in the ratio that the sum of each Participant's total
Compensation plus Excess Compensation bears to the sum of all
Participant's total Compensation plus Excess Compensation, but
not in excess of 2.7%; and
(4) Next, any remaining Employer contributions shall be
allocated to all Participants in the ratio that each
Participant's Compensation for the Plan Year bears to all the
Participants' Compensation for that year. Employer contributions
on behalf of each Participant shall not exceed the lesser of
$30,000 or 15% of the Participant's Compensation for the Plan
Year. For purposes of the foregoing allocation formulas, not
more than $200,000 of each Participant's Compensation shall be
taken into account. Subject to Item 7 of this Adoption
Agreement, for Plan Years beginning before January 1, 1989, the
Employer's contribution will be allocated under an integrated
or non-integrated formula to the Account of each Participant who
has completed at least 1,000 Hours of Service during the Plan
Year and is an Employee on the last day of such Plan Year. For
Plan Years beginning on or after January 1, 1989, a Participant
shall receive an allocation of such Employer Contributions for
the Plan Year if the Participant either (i) has completed more
than 500 Hours of Service for the Employer during a Plan Year,
regardless of whether the Participant is employed on the last
day of the Plan Year, or (ii) is employed on the last day of the
Plan Year.
Note: In calculating amounts which may be contributed for Self-
Employed Individuals, you must deduct contributions made to this
Plan and all other qualified self-employed retirement plans.
The maximum profit sharing plan deductible contribution for a
Self-Employed Individual is, therefore, 13.04348% of Net Profits
before making such contribution.
[at left hand-margin]
Most employers choose age 65 as their retirement age. If you wish, you may
choose another age subject to the restrictions outlined here.
[end]
6. NORMAL RETIREMENT AGE.
Normal Retirement Age is age / / (not to exceed age 65) or the /
/ (not to exceed 5th) anniversary of the participation commencement
date, which date is the first day of the month in which the
Participant commenced participation. The Normal Retirement Age
chosen above may not be higher than the age that has previously been
effect under the Plan for a current Participant. For example, if the
Normal Retirement Age has been Age 62 or the 3rd anniversary of
participation, the Normal Retirement Age must be no higher than
either of those dates for current Participants. However, in no event
may the Normal Retirement Age chosen above be higher than 65 or
exceed the 5th anniversary of the participation.
[at left-hand margin]
If your plan is deemed to be Top-Heavy under IRS rules, you will be
required to make certain minimum contributions for your "non-key"
employees. (See the Plan Document for the definition of "key employee".)
Choose item B if you want to make these contributions from your
OppenheimerFunds Money Purchase Pension Plan. Complete item C if you want
to make them from another, non-Oppenheimer sponsored plan. In either case,
consult your tax advisor.
[end]
7. MINIMUM TOP-HEAVY CONTRIBUTIONS (for Non-integrated Plans).
A. Notwithstanding the contribution formula selected in Item 5
above, for purposes of the minimum top-heavy contributions
required to be made under the Plan, the Employer contributions
shall be allocated under this paragraph A unless the Employer
checks and completes paragraph B or C below. The Employer
contribution allocated under this paragraph A shall be allocated
on behalf of each Participant who is not a Key Employee in an
amount that shall not be less than the lesser of (1) or (2):
(1) 3% of such Participant's Compensation for such Plan Year (or
5% of such Participant's Compensation for such Plan Year if the
Employer maintains a defined benefit plan), or
(2) In the case where the Employer has no defined benefit plan
which uses this Plan to satisfy the requirements of Section 401
of the Code, the highest percentage of Employer contributions
allocated on behalf of any Key Employee (expressed as a
percentage of the first $200,000 of such Key Employee's
Compensation for such Plan Year).
B. / / If the Employer also maintains the Oppenheimer Money
Purchase Pension Plan (Standardized Plan) (the "Money Purchase
Plan") that is a paired plan with this Plan, the minimum
contribution for Participants who are eligible to receive an
allocation thereof shall be made under the Money Purchase Plan.
This paragraph B shall apply only if the eligibility and
coverage requirements of the Money Purchase Plan are to be
identical to the corresponding provisions of this Plan.
C. / / For each Plan Year in which the Employer maintains another
plan in addition to this Plan, the minimum allocation required
for any non-Key Employee shall be made by the Employer in
accordance with Section 415 of the Code under the following plan
or plans:
----------------------------------------------------------------
----------------------------------------------------------------
-------------------------------------------(enter plan name)
If this paragraph C is completed the Employer may not rely on
the opinion letter issued by the Internal Revenue Service to the
Sponsor to evidence that this Plan is qualified under Section
401 of the Internal Revenue Code. If the Employer has completed
this section and wants to determine that his plan(s) is
qualified, an application should be made to the appropriate Key
District Director of Internal Revenue.
Important Note: Choosing this paragraph C may cause this Plan
to fail to satisfy the design-based safe harbor of the proposed
regulations under Code Section 401(a)(4) as of the first day of
the first Plan Year beginning after 1991, even though all other
requirements of the safe harbor are met.
[at left-hand margin]
You and your plan participants may use a portion of the plan's assets to
buy life insurance contracts, subject to the restrictions outlined here.
[end]
8. INSURANCE.
If Insurance coverage is utilized:
A. The amount to be invested in ordinary life insurance contracts
for any Participant shall be less than 50% of the aggregate
Employer contributions allocated to his account. If term
insurance is selected, the premium shall be less than 25% of the
aggregate Employer contributions allocated to his Account.
B. If both ordinary life and term insurance are purchased on the
life of a Participant, the sum of the term insurance premium
plus one-half of the ordinary life premiums may not exceed 25%
of the Employer contributions made on behalf of such
Participant.
C. Employer contributions in excess of the insurance premium shall
be invested in shares of any fund managed by Oppenheimer
Management Corporation, or any parent, subsidiary or affiliate
thereof, or in Systematic Capital Accumulation Plans or Variable
Annuities for the accumulation of shares of one of these funds.
D. It is understood that the portion of the insurance premium that
is allocated to the current cost of the insurance protection
(term cost) is not tax deductible to the Self-Employed
Individual and is taxable income to Participant's who are
Employees. The insurance company may supply each insured
Participant with a statement of the dollar amount of the non-
deductible or taxable portion of the premium.
[at left-hand margin]
Complete this section only if you maintain any other qualified plans
besides an OppenheimerFunds Money Purchase Pension Plan. If you do
maintain other plans, their qualification may be adversely affected if you
do not complete this section.
[end]
9. ALLOCATION LIMITS.
If the Employer maintains or has ever maintained another qualified
plan (other than the OppenheimerFunds Money Purchase Pension Plan
(Standardized Plan) which is a paired plan with this Plan) in which
any Participant is (or was) a participant or could possibly become
a participant, the Employer must complete this Item 9. The Employer
must also complete this Item 9 if it maintains a welfare benefit
fund, as defined in Section 419(e) of the Code, or an individual
medical account, as defined in Section 415(1)(2) of the Code, under
which amounts are treated as Annual Additions under the Plan with
respect to any Participant in this Plan.
A. If the Participant is covered under another qualified defined
contribution plan maintained by the Employer, other than a
Master or Prototype Plan:
/ / The provisions of Sections 11.2(a) through 11.2(f) of
Article XI will apply, as if the other plan was a Master or
Prototype Plan.
/ / Employer should provide the method under which the plans
involved will limit total Annual Additions to the Maximum
Permissible Amount, and will properly reduce any Excess Amounts,
in a manner that precludes Employer discretion -- attach
separate sheet if necessary.
B. If the Participant is or has ever been a Participant in a
defined benefit plan maintained by the Employer, the Employer
should attached an explanation of the method under which the
plans involved will satisfy the 1.0 combined limitation of
Section 11.4 of the Plan, which method shall preclude Employer
discretion.
10. MISCELLANEOUS.
A. A copy of the current prospectus of the fund(s), and the
variable annuity prospectus (if chosen) has been received by
each Participant named. Each new Participant will receive a
copy of the then current prospectus.
B. The Sponsor shall inform the Employer of any amendments made to
the Plan of the discontinuance or abandonment of the Plan.
C. Information concerning the Sponsor:
Oppenheimer Funds Distributor, Inc.
Two World Trade Center
New York, NY 10048-0203
1-212-323-0200
[at left-hand margin]
Please sign in the appropriate space only after having read all the
materials and completing this Application.
[end]
11. SIGNATURES.
Under penalties of perjury, the undersigned Employer, or duly
authorized officer or employee thereof, hereby certifies (i) that the
taxpayer identification number set forth on the front of this
Application and Adoption Agreement is the Employer's correct taxpayer
identification number and (ii) currently the Employer is not under
IRS notification as being subject to backup withholding (line out
(ii) if under notification). If no such number is shown, the
undersigned further certifies, under penalties of perjury, that no
such number has been issued, and a number has been or soon will be
applied for; if a number is not provided to you within sixty days,
the undersigned understands that all payments (including redemptions)
are subject to 20% withholding under Federal tax law, until a number
is provided.
---------------------------- ----------------------------
Please Print Business Name (Date)
By: -------------------------
Sole Proprietor, Partner
or Corporate Officer
(signature)
Note: An Employer who has ever maintained or who later adopts any
plan (including a welfare benefit fund, as defined in section 419(e)
of the Code, which provides post-retirement medical benefits
allocated to separate accounts for Key Employees, as defined in
Section 419A(d)(3) of the Code, or an individual medical account, as
defined in Section 415(1)(2) of the Code) in addition to this Plan
(other than the OppenheimerFunds Money Purchase Pension Plan
(Standardized Plan) that is a paired plan with this Plan) may not
rely on the opinion letter issued by the National Office of the
Internal Revenue Service as evidence that this Plan is qualified
under Section 401 of the Code. 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.
12. DEALER INFORMATION.
--------------------------------------------------------------
Dealer Name
--------------------------------------------------------------
Dealer Head Office Address: No. and Street
--------------------------------------------------------------
City State Zip Code
--------------------------------------------------------------
Oppenheimer Dealer Number
--------------------------------------------------------------
Representative's Last Name First Name MI
--------------------------------------------------------------
Representative's Branch Office Address: No. and Street
--------------------------------------------------------------
City State Zip Code
--------------------------------------------------------------
Rep's Office Telephone Number Rep's A.E. Number
<PAGE>
OppenheimerFunds
Retirement Plan Contribution Form
Name of Employer/Business:
Name of Plan Administrator:
Address of Employer/Business:
Phone #:
Employer Tax I.D. No.:
Enclosed with this form are contributions to the following
OppenheimerFunds Retirement Plan adopted by the Employer (use a separate
form for each type of plan if employer has adopted both plans):
/ / Profit Sharing Plan / / Money Purchase Pension Plan
1. Choose your desired account setup:
Choose one of the following:
/ / Establish separate accounts for each participant.
/ / Establish a pooled account for all participants (plan
administrator is responsible for allocating on its books the
appropriate amount to each participant).
Choose one of the Following:
/ / Establish all accounts using the Employer's address set forth
in the Application/Adoption Agreement.
/ / Establish all accounts using the participants' home addresses.
(Cannot be used if you choose a pooled account. The Address
Column on the reverse side must be completed.)
2. List participant information on the reverse side for each account to
be established. List Employer and Employee contributions separately.
Indicate Employer contributions in the column labeled "Account Type"
as "ER", and Employee contributions in that column as "EE". If
additional space is needed, photocopy the form and staple all pages
together.
3. Attach all contributions. Checks should be made payable to the
Trustee for the OppenheimerFunds Retirement Plans ($250 minimum
initial purchase, $25 minimum subsequent purchases).
Mail to: Oppenheimer Shareholder Services
Retirement Plans Administration
P.O. Box 173694
Denver, CO 80217-3694
Note: All contributions are subject to the terms and conditions of the
governing plan documents for the OppenheimerFunds Retirement Plan.
Failure to follow the terms of the Plan can adversely affect the tax
qualification of your OppenheimerFunds Retirement Plan.
Is this a
Participant new or
Name, Date of Participant's Name of existing
Birth, SSN Address Contribution Fund Participant?
- ------------- ------------- ------------ ------- ------------
- -------------------------------------------------------------------
- -------------------------------------------------------------------
- -------------------------------------------------------------------
- -------------------------------------------------------------------
- -------------------------------------------------------------------
- -------------------------------------------------------------------
- -------------------------------------------------------------------
- -------------------------------------------------------------------
$------------
Total
Contributions
<PAGE>
BASIC PLAN DOCUMENT (NO. 01)* OPPENHEIMERFUNDS RETIREMENT PLAN
ARTICLE I - DEFINITIONS
ACCOUNT means the aggregate of the individual bookkeeping accounts
established for each Participant in accordance with Section 4.3.
ADOPTION AGREEMENT means the written agreement by which the Employer
establishes this Plan. The information set forth in the Adoption
Agreement executed by the Employer shall be deemed to be a part of this
Plan as if set forth in full herein.
AFFILIATED EMPLOYERS means the Employer and any corporation which is a
member of a controlled group of corporations (as defined in Section 414(b)
of the Code) which includes the Employer, any trade or business (whether
or not incorporated) which is under common control (as defined in Section
414(c) of the Code) with the Employer, any service organization (whether
or not incorporated) which is a member of an affiliated service group (as
defined in Section 414(m) of the Code) which includes the Employer, or any
other entity required to be aggregated with the Employer pursuant to
Section 414(o) of the Code.
BENEFICIARY means the beneficiary or beneficiaries so designated by a
Participant pursuant to Section 6.7, in accordance with Section 401(a)(9)
of the Code and applicable regulations thereunder.
BUSINESS means the business or profession engaged in by the Employer.
CODE means the Internal Revenue Code of 1986, as amended.
COMPENSATION means Compensation as that term is defined in Section 11.5(b)
of the Plan. For any Self-Employed Individual covered under the Plan,
Compensation means Earned Income.
(1) Notwithstanding the above, if elected by the Employer in the Adoption
Agreement, Compensation shall include any amount which is contributed
by the Employer pursuant to a salary reduction agreement and which
is not includable in the gross income of the Employee under Sections
125, 402(a)(8), 402(h) or 403(b) of the Code. This paragraph is
effective for Plan Years beginning on or after January 1, 1990.
___________________
*Provisions are common to both money purchase pension plan and profit
sharing plan unless otherwise stated.
(2) For years beginning after December 31, 1988, the annual compensation
of each Participant taken into account under the Plan for any year
shall not exceed $200,000, as 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 a Plan determines
compensation on a period of time that contains fewer than 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.
In determining the Compensation of a Participant for purposes of this
limitation, the rules of Section 414(q)(6) of the Code shall apply,
except 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 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 Taxable Wage Base
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 definition prior
to the application of this limitation. For purposes of this limit:
(i) all plans maintained by the same Employer shall be
treated as a single plan;
(ii) all plans maintained with respect to one or more
trades or businesses which are under common control,
within the meaning of Sections 401(d)(9) and (10) or
414(c) of the Code, shall be treated as a single plan; and
(iii) all plans in which any person participates as a
Self-Employed Individual shall be treated as a single plan
with respect to such Self-Employed Individual.
DISABILITY means inability to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to be of long-
continued and indefinite duration. This definition shall be interpreted
to be identical with that contained in Section 72(m)(7) of the Code.
EARNED INCOME means, except as otherwise required by Section 401(c) of the
Code and the regulations thereunder, net earnings from self-employment to
the extent such net earnings are derived from the Business during the Plan
Year while such person is a Participant, but only if personal services of
such Participant are a material income-producing factor in the Business.
In computing such net earnings, a deduction will be made for contributions
under the Plan made on behalf of Participants in the Plan to the extent
deductible under Section 404 of the Code. Net earnings shall be determined
with regard to the deduction allowed the Employer by Section 164(f) of the
Code for taxable years beginning after December 31, 1989.
EFFECTIVE DATE means the first day of the Plan year during which the Plan
is adopted.
EMPLOYEE means any person, including a Self-Employed Individual, who is
employed by any Affiliated Employer and shall include any Leased Employee
considered an Employee of the Employer under Section 414(n) or (o) of the
Code.
EMPLOYER means the sole proprietor, partnership, corporation or entity
taxable as a corporation which adopts the Plan by execution of an Adoption
Agreement, and shall also include a predecessor or successor entity which
engages in or has engaged in the Business with respect to which the Plan
is established.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended.
EXCESS COMPENSATION means, with respect to any Plan Year, the amount of
a Participant's Compensation which exceeds the Taxable Wage Base in effect
on the first day of the Plan Year.
5-PERCENT OWNER means, if the Employer is a corporation, any person who
owns or is considered as owning (within the meaning of Section 318 of the
Code) more than 5 percent of the outstanding stock of the corporation or
stock possessing more than 5 percent of the total combined voting power
of all stock of the corporation, or, if the Employer is not a corporation,
any person who owns more than 5 percent of the capital or profits interest
in the Employer.
HIGHLY COMPENSATED EMPLOYEE means an Employee within the meaning of
Section 414(q) of the Code.
HOUR OF SERVICE shall mean:
(1) Each hour for which an individual is paid, or entitled to payment,
for the performance of duties for the Employer. These hours shall
be credited to the individual for the computation period in which the
duties are performed; and
(2) Each hour for which an individual is paid, or entitled to payment,
by the Employer on account of a period of time 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. No more than 501 hours of service shall be credited under
this paragraph for any single continuous period (whether or not such
period occurs in a single computation period). Hours under this
paragraph shall be calculated and credited pursuant to Section
2530.200b-2 of the Department of Labor Regulations which are
incorporated herein by reference; and
(3) Each hour for which back pay, irrespective of mitigation of damages,
is either awarded or agreed to by the Employer. The same Hours of
Service shall not be credited both under paragraph (1) or paragraph
(2), as the case may be, and under this paragraph (3). These hours
shall be credited to the individual for the computation period or
periods to which the award or agreement pertains rather than the
computation period in which the award, agreement or payment is made.
INSURER means any insurance company which shall issue non-transferable
annuity or life insurance policies under Section 4.2 of this Plan.
KEY EMPLOYEE means any Employee or former Employee (and the beneficiaries
of such Employee) who at any time during the determination period was (1)
an officer of the Employer if such individual's annual compensation
exceeds 50 percent of the dollar limitation under Section 415(b)(1)(A) of
the Code, (2) an owner (or considered an owner under Section 318 of the
Code) of one of the ten largest interests in the Employer if such
individual's compensation exceeds 100 percent of the dollar limitation
under Section 415(c)(1)(A) of the Code, (3) a 5-percent owner of the
Employer, or (4) a 1-percent owner of the Employer who has an annual
compensation of more than $150,000. For purposes of this definition,
annual compensation means 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 an Employee's gross
income under Sections 125, 402(a)(8), 402(h) or 403(b) of the Code. The
determination period is the Plan Year containing the determination date
and the four preceding Plan Years. The determination of who is a Key
Employee will be made in accordance with Section 416(i)(1) of the Code and
the regulations thereunder.
LEASED EMPLOYEE means any person (other than an Employee of the recipient)
who, pursuant to an agreement between any of the recipient Affiliated
Employers and any other person ("leasing organization"), has performed
service for any of the recipient Affiliated Employers (or for any of the
recipient Affiliated Employers 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 year and such services are of a
type historically performed by employees in the recipient Employer's
business field. The determination of whether a person is a Leased
Employee will be made pursuant to Section 414(n) of the Code. A Leased
Employee shall not be considered an Employee of the recipient Employer if
(1) such employee is covered by a money purchase pension plan providing:
(i) a non-integrated employer contribution rate of at least 10% of
Compensation, as defined in Section 11.5(b) of the Plan, but including
amounts contributed pursuant to a salary reduction agreement which are
excludable from the employee's gross income under Sections 125, 402(a)(8),
402(h) or 403(b) of the Code, (ii) immediate participation, and (iii) full
vesting; and (2) Leased Employees do not constitute more than 20 percent
of the recipient Employer's non-highly compensated workforce.
NET PROFITS means the net income of the Employer before deduction for
income taxes and contributions made hereunder.
NORMAL RETIREMENT AGE means the age selected by the Employer in the
Adoption Agreement.
OWNER-EMPLOYEE means the sole proprietor or a partner, in a partnership,
who owns more than l0% of either the capital interest or the profits
interest in such partnership.
PARTICIPANT means any person who participates in the Plan as provided in
ARTICLE II hereof.
PLAN means this Retirement Plan, including the accompanying Trust
Agreement and the Adoption Agreement.
PLAN ADMINISTRATOR means the Employer.
PLAN YEAR means the Employer's taxable year for federal income tax
purposes.
SELF-EMPLOYED INDIVIDUAL means an individual who has Earned Income for the
taxable year from the trade or business with respect to which the Plan was
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.
SPONSOR means OppenheimerFunds Distributor,Inc.
TAXABLE WAGE BASE means the contribution and benefit base in effect under
Section 230 of the Social Security Act at the beginning of the Plan Year.
TOP-HEAVY PLAN means this Plan and any other plan maintained by the
Employer which is deemed to be a top-heavy plan pursuant to the Code.
TRUSTEE means the Trustee under the accompanying Trust Agreement.
TRUST AGREEMENT means the accompanying Declaration of Trust, which is a
part of this Plan.
TRUST ACCOUNT means an account maintained by the Trustee under the Trust
Agreement for all contributions except the portion, if any, allocated
pursuant to Section 4.2.
VALUATION DATE for the Plan means the latest day of the taxable year of
the Employer. Valuation Date for an Account in the Plan means, in
addition, any date a distribution is made from that Account. Assets of
an Account, or if applicable the Plan, must be valued at fair market value
on each Valuation Date.
ARTICLE II - PARTICIPATION
Section 2.1 - Participation
(a) Every Employee who shall have completed two (2) Years of Service (as
hereinafter defined), whether or not consecutive, with the Employer,
or such shorter period of service with the Employer specified in the
Adoption Agreement, shall become a Participant under the Plan. If
such service shall have been completed on the Effective Date of the
Plan, participation shall begin as of that date; if such service
shall be completed subsequently, participation shall begin on the
first day of the month coincident or preceding completion of such
service.
(b) The participation of a Participant in the Plan will continue until
he terminates his service with the Employer for any reason, including
retirement, disability or death. If a Participant who has terminated
his service with the Employer is re-employed by the Employer, he will
become a Participant on the date of his re-employment. If an
Employee's service with the Employer is terminated prior to his
becoming a Participant hereunder and he again becomes an Employee,
his prior period of service shall be restored upon his again becoming
an Employee.
Section 2.2 - Controlled Business
(a) Except as provided in Article XI, all Employees of the Employer or
any Affiliated Employer will be treated as employed by a single
employer.
(b) If the 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 such other trades or businesses must, when
looked at as a single plan, satisfy Sections 401(a) and (d) of the
Code for the Employees of this and all such other trades or
businesses.
(c) 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 such other trades or businesses must be included in a
plan which satisfies Sections 401(a) and (d) of the Code and which
provides contributions and benefits not less favorable than provided
for Owner-Employees under this Plan.
(d) 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.
(e) For purposes of paragraphs (b), (c) and (d), 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:
(1) own the entire interest in an unincorporated trade or business,
or
(2) 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 an 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.
Section 2.3 - Year of Service
For purposes of this ARTICLE II, a "Year of Service" shall mean a twelve
consecutive-month period during which the Employee completes at least
1,000 Hours of Service, computed with reference to the date the Employee
first performs an Hour of Service for the Employer and each anniversary
thereof. In any case in which the Employer maintains the plan of a
predecessor Employer, service for such predecessor shall be treated as
service with the Employer.
Section 2.4 - Bargaining Unit Employees
For purposes of Section 2.1, the term "Employee" does not include, if so
elected by the Employer in the Adoption Agreement, any Employee who is
included in a unit of Employees covered by a collective-bargaining
agreement between the Employer and Employee representatives where (i)
retirement benefits were subject to good-faith bargaining, and (ii) if 2%
or less of the Employees of the Employer who are covered by that agreement
are professionals as defined in Proposed Treasury Regulation Section
1.410(b)-9(g) or any successor provision. Solely for these purposes, 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.
ARTICLE III - CONTRIBUTIONS
Section 3.1 - Employer Contributions
For Money Purchase Pension Plans only:
(a) Each Plan Year the Employer may contribute on behalf of each
Participant such amount as the Employer shall determine in the
Adoption Agreement, but in no event to exceed the lesser of $30,000
(or such larger amount as may be permitted under the Code) or 25% of
such Participant's Compensation, as defined in ARTICLE I of this
Plan.
For Profit Sharing Plans only:
(a) Each Plan Year the Employer may contribute on behalf of each
Participant such amount as the Employer shall determine in the
Adoption Agreement, but in no event to exceed the lesser of $30,000
(or such larger amount as may be permitted under the Code) or 15% of
such Participant's Compensation.
The remainder of Article III applies to both Money Purchase Pension
Plan and Profit Sharing Plan versions.
The above limitations for a money purchase pension plan or a profit
sharing plan, as the case may be, apply in the aggregate where any
Owner-Employee is covered as a Self-Employed Individual under more
than one self-employed retirement plan established with respect to
other trades or businesses. In the event the above limitations would
otherwise be exceeded, the amount which may be contributed with
respect to each trade or business shall be limited to that amount
which bears the same ratio to the aggregate amount deductible with
respect to all trades or businesses as the Earned Income derived from
each such trade or business bears to the Earned Income derived from
all the trades or businesses with respect to which plans are
established.
(b) A Participant must share in the Employer's contributions if the
Participant either (i) has completed more than 500 Hours of Service
for the Employer during a Plan Year, regardless of whether the
Participant is employed on the last day of the Plan Year, or (ii) is
employed on the last day of the Plan Year.
Section 3.2 - Non-deductible Employee Contributions
This Plan will not accept non-deductible Employee contributions for Plan
Years beginning after the Plan Year in which this Plan is adopted by the
Employer. Employee contributions for Plan Years beginning after December
31, 1986 will be limited so as to meet the non-discrimination test of
Section 401(m) of the Code. A Separate Account shall be established under
the Plan for each Participant's voluntary contributions and earnings.
Section 3.3 - Deductible Employee Contributions
(a) The Plan Administrator will not accept deductible Employee
contributions which are made for a taxable year beginning after
December 31, 1986. Deductible employee contributions prior to that
time 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 Accounts maintained for
other contributions to the Plan. No part of the deductible employee
contribution Account will be used to purchase life insurance.
(b) The Plan will accept accumulated deductible employee contributions
(as defined in section 72(o)(5) of the Code) that were distributed
from a qualified retirement plan and rolled over pursuant to Section
402(a)(5), 402(a)(7), 403(a)(4) or 408(d)(3) of the Code. The rolled
over amount will be added to the deductible employee contributions
Account but will not be taken into account in applying the
limitations on deductible contributions to this Plan. The Plan will
not accept rollovers of accumulated deductible employee contributions
from a simplified employee pension plan nor from a plan under which
the Employee was covered as a self-employed individual as described
in Section 401(c)(1) of the Code.
(c) The Participant may withdraw any part of the deductible employee
contributions Account by making a written application to the Plan
Administrator. However, if at the time the distribution is received
the Participant has not attained age 59 1/2 and is not disabled, the
Participant will be subject to a federal income tax penalty, unless
the distribution is rolled over to a qualified plan or individual
retirement plan within 60 days of the date of distribution.
Section 3.4 - Minimum Contribution
For Non-integrated Plans only:
(a) If the Employer or any Affiliated Employer does not maintain any
qualified defined benefit plan, except as provided in (b), (c) and
(d) below, Employer contributions on behalf of any Participant who
is not a Key Employee shall not be less than the lesser of three
percent (3%) of such Participant's Compensation or the largest
percentage of Employer contributions, as a percentage of the Key
Employee's Compensation up to $200,000, allocated on behalf of any
Key Employee for the Plan Year. This minimum contribution shall be
made even though, under other Plan provisions, the Participant would
not otherwise be entitled to receive a contribution, or would have
received a lesser contribution for the year, because of the
Participant's failure to complete 1,000 Hours of Service.
(b) In the event the Employer or any Affiliated Employer maintains any
qualified defined benefit plan in addition to this Plan, the Employer
will provide a minimum allocation equal to five percent (5%) of
Compensation to each non-Key Employee entitled under (a) above to
receive a minimum contribution.
(c) The provisions of (a) and (b) above shall not apply to any
Participant who was not employed by the Employer or an Affiliated
Employer on the last day of the Plan Year.
(d) The provision in (a) above shall not apply to any Participant to the
extent the Participant is covered under any other plan or plans of
the Employer and the Employer has provided in the Money Purchase
Pension Plan or the Profit Sharing Plan Adoption Agreement that the
minimum contribution requirement applicable to top-heavy plans will
be met in another plan or other plans.
Section 3.5 - Vesting
All contributions made by or on behalf of each Participant and all
investments made with such contributions and the earnings thereon shall
immediately become and at all times remain fully vested and non-
forfeitable. Within one hundred and eighty (180) days after the close of
each Plan Year, the Employer shall furnish each Participant a statement
of the amounts credited to his Account during such Plan Year.
Section 3.6 - Remittance to Trustee
All contributions except the portion, if any, allocated to premiums on
non-transferable policies pursuant to Section 4.2 shall be transmitted to
the Trustee by the Employer and shall be accompanied by written
instructions from the Employer specifying the Participants to whose
Accounts they are to be credited, which are amounts contributed by the
Employer and which are amounts of voluntary employee contributions or
deductible employee contributions contributed by each Participant and any
other relevant information required by the Trustee. Contributions of the
Employer and the Participants shall be remitted to the Trustee by the
Employer at such times as the Employer may determine.
Section 3.7 - Return of Contributions
Any contribution made by the Employer because of a mistake of fact may be
returned to the Employer within one year of such contribution. Any
contribution made by the Employer which is conditional upon the Plan's
initial qualification under the Code may be returned to the Employer
within one year after the date such initial qualification is denied, but
only if the application for qualification is made by the time prescribed
by law for filing the Employer's return for the taxable year in which the
Plan is adopted, or such later date as the Secretary of the Treasury may
prescribe. Any contribution made by the Employer which is conditioned on
the deductibility of such amount under Section 404 of the Code may be
returned to the Employer, to the extent of the amount disallowed, within
one year after the disallowance of the deduction.
ARTICLE IV - INVESTMENT AND ALLOCATIONS
Section 4.1 - Investments
All contributions made hereunder except the portion, if any, allocated to
premiums on non-transferable policies pursuant to Section 4.2 shall be
invested as directed in a uniform, consistent and non-discriminatory
manner by the Employer, in one or more investment companies registered
under the Investment Company Act of 1940 as provided under the
accompanying Trust Agreement.
Section 4.2 - Insurance
All or any portion of the contributions made by the Employer for a
Participant pursuant to Section 3.1, may, if elected by the Employer, in
a uniform and non-discriminatory manner, be used to pay premiums on
annuities (including variable annuities where the underlying investments
are made in one or more of the mutual funds managed by Oppenheimer
Management Corporation or any parent, subsidiary, or affiliate thereof)
or ordinary or term life insurance, provided that the maximum aggregate
amount which may be used to pay the premiums for term insurance shall be
less than 25% of the aggregate contributions allocated to any
Participant's Account and the maximum aggregate premiums paid for his
Account for ordinary or whole life insurance shall be less than 50% of the
aggregate contributions allocated to his Account. If both ordinary life
and term insurance are purchased on the life of any Participant, the sum
of the term insurance premium plus one-half of the ordinary life premiums
may not exceed 25% of the Employer contributions allocated to such
Participant. The insurance may be issued by any insurance company in the
name of the Participant and shall be owned by the Plan Administrator or
may be issued in connection with a systematic capital accumulation
program. A restriction to the following effect shall be made a part of
the policy: "This policy is not transferable and may not be sold,
assigned, discounted or pledged as collateral for a loan or as security
or for any other purpose to any person other than the Insurance Company.
This policy is issued in conjunction with a plan established under Section
401 of the Internal Revenue Code and constitutes part of the non-trusteed
annuity portion of the plan." Dividends on any such policy shall be
applied to reduce future premiums or purchase additional insurance. The
Employer shall substitute a bank as trustee or custodian of the insurance
contracts if the Employer is notified by the Internal Revenue Service that
such substitution is required because the holder of the contracts is not
keeping such records, or making such returns, or rendering such statements
as are required by law.
Section 4.3 - Separate Accounts
All contributions made by or on behalf of each Participant, and all
investments made with such contributions and the earnings thereon, shall
be credited to a separate Account or separate Accounts maintained for him
under the Plan, the assets of which shall be valued on the Valuation Date.
On such Valuation Date, the earnings and losses of the Trust Account shall
be allocated to each Participant's Account in the ratio that such Account
balance bears to Account balances.
Section 4.4 - Allocation of Contributions
(a) All money purchase pension contributions made by the Employer for a
given Plan Year shall be allocated as provided in the Adoption
Agreement to the Account of the Participant for whom such
contribution was made.
(b) All profit-sharing contributions shall be allocated to the Account
of each Participant in the ratio that such Participant's Compensation
bears to the Compensation of all Participants. However, if the
profit-sharing formula selected in the Adoption Agreement is
integrated with Social Security, profit-sharing contributions for the
Plan Year will be allocated, effective for Plan Years beginning on
or after January 1, 1989, and subject to Section 3.4, to
Participants' Accounts as follows:
(1) First, the profit sharing contributions made by the
Employer shall be allocated in the ratio that the sum of
(i) each Participant's Compensation for the Plan Year plus
(ii) Excess Compensation bears to the sum of all
Participants' total Compensation and Participants' Excess
Compensation, but not in excess of 5.7% of the sum of such
Compensation plus such Excess Compensation taken into
account under this paragraph; and
(2) Next, any remaining profit-sharing contributions made by
the Employer shall be allocated to all Participants in the
ratio that each Participant's Compensation for the Plan
Year bears to all the Participants' Compensation for that
year.
Section 4.5 - Coordination of Social Security Integration
If the Employer maintains plans involving integration with Social Security
other than this Plan, and if any Participant is eligible to participate
in more than one of such plans, all such plans will be considered to be
integrated if the extent of the integration of all such plans does not
exceed 100 percent. For purposes of the preceding sentence, the extent of
integration of a plan is the ratio (expressed as a percentage) which the
actual benefits, benefit-rate, offset rate, or Employer contribution rate
under the plan bears to the integration limitation applicable to such
plan. If the Employer enters into both the money purchase pension
Adoption Agreement and the profit-sharing Adoption Agreement under this
Plan, integration with Social Security may only be selected in one
Adoption Agreement.
Section 4.6 - Trustee Authority; Recordkeeping
The Trustee is authorized to hold and invest amounts transferred to the
Plan from any other plans, and the restrictions contained in this Plan
shall apply as of the date originally contributed to the predecessor plan.
The Employer shall keep all necessary records to determine the character
of such amounts.
Section 4.7 - Borrowing Not Permitted
No Participant under this Plan may borrow against the cash surrender value
of any policies purchased on his behalf.
Section 4.8 - Distribution of Policies
Subject to the joint and survivor annuity rules of ARTICLE VI, at or
before retirement any contract on the life of a Participant shall be
either distributed to the Participant or converted to cash to provide
retirement income for the Participant. Benefits resulting from such
distribution or conversion shall be paid in accordance with the Plan.
Only insurance contracts that conform to the terms of the Plan will be
issued.
ARTICLE V - PAYMENT OF BENEFITS UNDER THE PLAN
Section 5.1 - General
All distributions made under this Article shall be subject to the
requirements of Code Section 401(a)(9) and Treasury Regulations
thereunder, including the minimum distribution incidental benefit
requirements of Section 1.401(a)(9)-2 of the Proposed Regulations. The
distribution rules contained in this ARTICLE are subject to the
requirements of ARTICLE VI.
Section 5.2 - Commencement of Benefits
(a) If the value of the Participant's Account balance derived from
Employer and Employee contributions exceeds (or at the time of any
prior distribution exceeded) $3,500, and the Account balance is
distributable prior to the later of the Participant's Normal
Retirement Age or his attainment of age 62, the Participant and the
Participant's Spouse (or the survivor) must consent to any
distribution of such Account balance. The consent of the Participant
and the Participant's Spouse shall be obtained in writing within the
90-day period prior to the date benefits commence. The Employer
shall notify the Participant and the Participant's Spouse of the
right to defer any distribution until the later of the Participant's
Normal Retirement Age or his attainment of age 62. 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 date
benefits commence.
Notwithstanding the foregoing, only the Participant need consent to
the commencement of a distribution in the form of a Qualified Joint
and Survivor Annuity (as hereinafter defined) which can be
distributed prior to the later of the Participant's Normal Retirement
Age or his attainment of age 62. (Furthermore, if payment in the
form of a Qualified Joint and Survivor Annuity is not required with
respect to the Participant pursuant to Section 6.5 of the Plan, only
the Participant need consent to the distribution of an Account
balance which can be distributed prior to the later of the
Participant's Normal Retirement Age or his attainment of age 62).
The consent of neither 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 this 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 as the Employer 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 may, 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 any 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.
(b) Unless the Participant elects otherwise, distribution of benefits
will begin no later than the 60th day after the latest of the close
of the Plan Year in which occurs:
(1) The Participant attains age 65 (or Normal Retirement Age, if
earlier);
(2) The 10th anniversary of the year in which the Participant
commenced participation in the Plan; or
(3) The Participant's termination of service with the Employer.
The failure of a Participant and Spouse to consent to a distribution while
a benefit is distributable, prior to the later of the Participant's Normal
Retirement Age or age 62 in accordance with Section 5.2(a) hereof, shall
be deemed to be an election to defer commencement of payment of any
benefit until the time provided in this Section 5.2(b).
Section 5.3 - Required Minimum Distribution; Transitional Rule
(a) Notwithstanding any other provision of the Plan to the contrary
(other than the transitional rules of this Section 5.3), the Account
balance of a Participant must be distributed, or must begin to be
distributed no later than the April 1 of the calendar year following
the calendar year in which the Participant attains age 70 1/2 (the
"Required Beginning Date").
(b) The Required Beginning Date of a Participant who attains age 70 1/2
before January 1, 1988, shall be determined in accordance with (1)
or (2) below:
(1) 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.
(2) 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:
(i) the calendar year in which the Participant attains age 70
1/2, or
(ii) 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.
(c) 5-percent owner. A Participant is treated as a 5-percent owner for
purposes of Section 5.3(b) 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.
(d) 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.
Section 5.4 - Form of Distribution
Except as otherwise provided in ARTICLE VI, distribution of a
Participant's benefits may be made in cash or kind in any one or more of
the following methods:
(1) In a lump sum.
(2) In substantially equal periodic installments payable at least
annually over a period certain not in excess of the life expectancy
of the Participant or the joint life and last survivor expectancy of
the Participant and his Beneficiary, as applicable.
(3) By the conversion of any policy purchased pursuant to Section 4.2 of
this Plan into an annuity for the life of the Participant and his
Beneficiary (including any period certain not extending beyond the
life expectancy of the Participant or the joint life and last
survivor expectancy of the Participant and his Beneficiary.
Section 5.5 - Amount to be Distributed
If a Participant's Account balance is to be distributed in other than a
lump sum, then the following minimum distribution rules shall apply on or
after the Required Distribution Date:
(a) If a Participant's benefit is to be distributed over (1) a period not
extending beyond the Life Expectancy of the Participant or the joint
life and last survivor expectancy of the Participant and the
Participant's Beneficiary or (2) a period not extending beyond the
Life Expectancy of the Beneficiary, the amount required to be
distributed for each calendar year, beginning with distributions for
the first Distribution Calendar Year (as hereinafter defined), must
at least equal the quotient obtained by dividing the Participant's
benefit (as determined under subsection (e) below) by the Applicable
Life Expectancy (as hereinafter defined).
(b) 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 50% of the present
value of the amount available for distribution is paid within the
life expectancy of the Participant.
(c) 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 (as hereinafter defined) or (2) if the
Participant's Spouse is not the designated Beneficiary, the
applicable divisor 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 hereinafter defined) in subsection
5.5(a) above as the relevant divisor without regard to Proposed
Regulations Section 1.401(a)(9)-2.
(d) The minimum distribution required for the Participant's first
Distribution Calendar Year must be made on or before the
Participant's Required Beginning Date. The minimum distribution for
other calendar years, including the minimum distribution for the
Distribution Calendar Year in which the Employee's Required
Distribution Date occurs, must be made on or before December 31 of
that Distribution Calendar Year.
(e) For purposes of this Section 5.5, the "Participant's benefit" means
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 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. 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 Distribution 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.
Section 5.6 - Immediate Distributions
Notwithstanding the provisions of this ARTICLE V, if the Account balance
derived from Employer and Employee contributions of a Participant on the
date of his termination of service, the date he becomes permanently and
totally disabled, or the date of his death does not exceed $3,500, such
amount shall be paid to him, his Spouse or his Beneficiary (whichever is
applicable under ARTICLE VI) in a lump sum as soon as practicable after
such date. For purposes of this Section 5.6, if the value of a
Participant's Account is zero, the Participant shall be deemed to have
received a distribution of such entire Account balance.
Section 5.7 - Death Benefits
(a) If the Participant dies after distribution of his or her interest has
begun, the remaining portion of such interest will continue to be
distributed at least as rapidly as under the method of distribution
being used prior to the Participant's death.
(b) If the Participant dies before distribution of his or her interest
begins, distribution of the Participant's entire interest shall be
completed by December 31 of the calendar year containing the fifth
anniversary of the Participant's death except to the extent that an
election is made to receive distributions in accordance with (1) or
(2) below:
(1) if any portion of the Participant's interest is payable to a
designated Beneficiary, distributions may be made over the life
or over a period certain not greater than the life expectancy
of the designated Beneficiary commencing on or before December
31 of the calendar year immediately following the calendar year
in which the Participant died;
(2) if the designated Beneficiary is the Participant's surviving
Spouse, the date distributions are required to begin in
accordance with (i) above shall not be earlier than the later
of (1) December 31 of the calendar year immediately following
the calendar year in which the Participant died and (2) December
31 of the calendar year in which the Participant would have
attained age 70 1/2.
If the Participant has not made an election pursuant to this
Section 5.7 by the time of his or her death, the Participant's
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 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.
(c) For purposes of subsection (b) of this Section 5.7, if the Surviving
Spouse dies after the Participant, but before payments to such Spouse
begin, the provisions of such subsection (b), with the exception of
paragraph (ii) therein, shall be applied as if the Surviving Spouse
were the Participant.
(d) For purposes of this Section 5.7, any amount paid to a child of the
Participant will be treated as if it has been paid to the Surviving
Spouse if the amount becomes payable to the Surviving Spouse when the
child reaches the age of majority.
(e) For purposes of this Section 5.7, distribution of a Participant's
interest is considered to begin on the Participant's Required
Beginning Date (or, if subsection (c) of this Section 5.7 is
applicable, the date distribution is required to begin to the
Surviving Spouse pursuant to subsection (b) of this Section 5.7).
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.
Section 5.8 - ARTICLE V Definitions
For purposes of Sections 5.1 to 5.7 of this Plan, the following
definitions shall apply in determining the date for distributions, the
form of distributions and the amount of distributions under the Plan:
(a) "Applicable Life Expectancy": The life expectancy (or joint and last
survivor expectancy) calculated using the attained age of the
Participant (or Beneficiary) as of the Participant's (or
Beneficiary's) birthday in the applicable calendar year reduced by
one for each calendar year which has elapsed since the date life
expectancy was first calculated. If life expectancy is being
recalculated, the Applicable Life Expectancy shall be the life
expectancy as so recalculated. The applicable calendar year shall
be the first Distribution Calendar Year, and if life expectancy is
being recalculated, such succeeding calendar year.
(b) "Life expectancy": Life expectancy and joint and last survivor
expectancy as computed by use of the expected return multiples in
Tables V and VI of section 1.72-9 of the income tax regulations.
Unless otherwise elected by the Participant (or Spouse, in the case
of distributions described in Section 5.07(b)(2)) by the time
distributions are required to begin, Life Expectancies shall be
recalculated annually. Such election shall be irrevocable as to the
Participant (or Spouse) and shall apply to all subsequent years. The
Life Expectancy of a nonspouse beneficiary may not be recalculated.
(c) "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 pursuant to Section 5.7 above.
Section 5.9 - Transitional Rule
(a) Notwithstanding the other requirements of this ARTICLE V, a
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):
(1) The distribution by the trust is one which would not have
disqualified such trust under Section 401(a)(9) of the Code as
in effect prior to amendment by the Deficit Reduction Act of
1984.
(2) The distribution is in accordance with a method of distribution
designated by the Employee whose interest in the trust is being
distributed or, if the Employee is deceased, by a Beneficiary
of such Employee.
(3) Such designation was in writing, was signed by the Employee or
the Beneficiary, and was made before January 1, 1984.
(4) The Employee had accrued a benefit under the Plan as of December
31, 1983.
(5) The method of distribution designated by the Employee or the
Beneficiary specifies the time at which distribution will
commence, the period over which distributions will be made, and
in the case of any distribution upon the Employee's death, the
Beneficiaries of the Employee listed in order of priority.
(b) A distribution upon death will not be covered by this transitional
rule unless the information in the designation contains the required
information described above with respect to the distributions to be
made upon the death of the Employee.
(c) For any distribution which commences before January 1, 1984, but
continues after December 31, 1983, the Employee, or the Beneficiary,
to whom such distribution is being made, will be presumed to have
designated the method of distribution under which the distribution
is being made if the method of distribution was specified in writing
and the distribution satisfies the requirements in Section 5.9(a)(1)
and (5) hereof.
(d) If a designation is revoked, any subsequent distribution must satisfy
the requirements of Section 401(a)(9) of the Code and proposed
regulations thereunder. If a designation is revoked subsequent to
the date distributions are required to begin, the trust must
distribute by the end of the calendar year following the calendar
year in which the revocation occurs the total amount not yet
distributed which would have been required to be distributed to
satisfy Section 401(a)(9) of the Code and regulations thereunder, but
for the Section 242(b) election. For calendar years beginning after
December 31, 1988, such distributions must meet the minimum
distribution incidental benefit requirements in Proposed Regulations
Section 1.401(a)(9)-2. Any changes in the designation will be
considered to be a revocation of the designation. However, the mere
substitution or addition of another Beneficiary (one not named in the
designation) under the designation will not be considered to be a
revocation of the designation, so long as such substitution or
addition does not alter the period over which distributions are to
be made under the designation, directly or indirectly (for example,
by altering the relevant measuring life). In the case in which an
amount is transferred or rolled over from one plan to another plan,
the rules in Q&A J-2 and J-3 shall apply.
ARTICLE VI - JOINT AND SURVIVOR ANNUITY AND PRE-RETIREMENT
SURVIVOR ANNUITY
Section 6.1 - General
Except as provided with respect to certain profit sharing plans in Section
6.5, the provisions of this ARTICLE VI shall apply to any Participant who
is credited with at least one hour of service with the Employer on or
after August 23, 1984, and such other Participants as provided in Section
6.6 hereof.
Section 6.2 - Joint and Survivor and Pre-retirement Survivor Annuity
(a) Unless an optional form of benefit is selected pursuant to a
Qualified Election within the 90-day period ending on the date
benefit payments would commence, a married Participant's vested
Account balance will be paid in the form of a Qualified Joint and
Survivor Annuity and an unmarried Participant's vested account
balance will be paid in the form of a life annuity.
(b) Unless an optional form of benefit has been selected within the
election period pursuant to a Qualified Election (as hereinafter
defined), if a Participant dies before benefits have commenced then
the Participant's vested Account balance shall be applied toward the
purchase of an annuity for the life of the surviving Spouse (a
"Qualified Pre-retirement Survivor Annuity"). The surviving Spouse
may elect to have such annuity distributed immediately or may elect
another manner of distribution.
Section 6.3 - ARTICLE VI Definitions
For purposes of this ARTICLE VI, the following definitions shall apply:
(a) "Election period": The period which begins on the first day of the
Plan Year in which the Participant attains age 35 and ends on the
date of the Participant's death. If a Participant separates from
service prior to the first day of the Plan Year in which age 35 is
attained, with respect to the Account balance as of the date of
separation, the election period shall begin on the date of
separation.
(b) "Pre-Age 35 Waiver": 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 Qualified Pre-retirement 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 Qualified Pre-retirement Survivor
Annuity in such terms as are comparable to the explanation required
under Section 6.4. Qualified Pre-retirement 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 ARTICLE
VI.
(c) "Qualified Election": A waiver of a Qualified Joint and Survivor
Annuity or a Qualified Pre-retirement Survivor Annuity and the
election of an optional form of benefit described in Section 5.4.
The waiver shall not be effective unless: (a) it is in writing and
it is consented to by the Participant's Spouse; (b) the Spouse's
consent is witnessed by a notary public; (c) the election is limited
to a specific alternate Beneficiary, including any class of
Beneficiaries or any contingent Beneficiaries (or the Spouse
expressly permits designations by the Participant without any further
spousal consent); (d) the election designates a form of benefit
payment which may not be changed without the Spouse's consent (or the
Spouse expressly permits designations by the Participant without any
further consent of the Spouse); and (e) the Spouse's consent
acknowledges the effect of the election. Notwithstanding this
consent requirement, if the Participant establishes to the
satisfaction of the Employer that such written consent may not be
obtained because there is no Spouse or the Spouse cannot be located,
a waiver will be deemed a Qualified Election.
Any consent necessary under this provision (or the establishment that
the consent of the Spouse may not be obtained) will not be valid with
respect to any other 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. Additionally, 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. Any new waiver or change
of Beneficiary will require a new spousal consent. No consent
pursuant to the provisions herein shall be valid unless the
Participant has received notice pursuant to Section 6.4.
(d) "Earliest Retirement Age": The earliest date on which, under the
Plan, the Participant could elect to receive retirement benefits.
(e) "Qualified 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 one-half 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 balance.
(f) "Spouse (Surviving Spouse)": The spouse or surviving spouse of the
Participant, provided that a former spouse will 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.
Section 6.4 - Notice Requirements
(a) In the case of a Qualified Joint and Survivor Annuity as described
in Section 6.3 hereof, the Plan Administrator shall, no less than 30
days and no more than 90 days prior to the annuity starting date,
provide each Participant with a written explanation of (i) the terms
and conditions of a Qualified Joint and Survivor Annuity; (ii) the
Participant's right to make and the effect of an election to waive
the Qualified Joint and Survivor Annuity form of benefit; (iii) the
rights of a Participant's Spouse; and (iv) the right to make, and the
effect of, a revocation of a previous election to waive the Qualified
Joint and Survivor Annuity.
(b) In the case of a Qualified Pre-retirement Survivor Annuity as
described in Section 6.3 hereof, the Employer shall provide each
Participant within the Applicable Period for such Participant a
written explanation of the Qualified Pre-retirement Survivor Annuity
in such manner as would be comparable to the explanation provided for
meeting the requirements of Section 6.3 applicable to a Qualified
Joint and Survivor Annuity. The Applicable Period for a Participant
is whichever of the following periods in (1), (2)(a), (2)(b) or
(2)(c) below ends last:
(1) the period beginning with the first day of the Plan Year in
which the Participant attains age 32 and ending with the close
of the Plan Year preceding the Plan Year in which the
Participant attains age 35;
(2) the period beginning 1 year before and ending 1 year after (a)
the individual becomes a Participant; (b) the Qualified Pre-
retirement Survivor Annuity is no longer fully subsidized within
the meaning of the Code and regulations thereunder; or (c) this
ARTICLE VI first applies to such Participant.
Notwithstanding the foregoing, in the case of a Participant who separates
from service before attaining age 35, notice must be provided within the
period beginning 1 year before and ending 1 year after such separation.
If such Participant thereafter returns to employment with the Employer,
the Applicable Period shall be redetermined.
Section 6.5 - Special Rule for Profit Sharing Plans
This Article VI applies to (1) a profit sharing plan, and (2) to any
distribution, made on or after the first day of the first Plan Year
beginning after December 31, 1988, from or under a separate account
attributable solely to accumulated deductible employee contributions (as
defined in Code Section 72(o)(5)(B)), and maintained on behalf of a
Participant in a money purchase pension plan, if, in the case of (1) or
(2), the following two conditions are met: (i) the Participant cannot or
does not elect payments in the form of a life annuity, and (ii) on the
death of the Participant, the Participant's vested Account balance will
be paid to the Participant's Surviving Spouse, but if there is no
Surviving Spouse, or, if the Surviving Spouse has already consented in a
manner conforming to a Qualified Election, then to the Participant's
designated Beneficiary. However, this Section 6.5 shall not be operative
with respect to a Participant in a profit sharing plan if it is determined
that such plan is a direct or indirect transferee of a defined benefit
plan, money purchase pension plan (including a target benefit 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. In
addition, this Section shall not apply unless the Participant's Spouse is
the beneficiary of any insurance on the Participant's life purchased by
Employer contributions or forfeitures allocated to the Participant's
Account. If this Section is operative, then except to the extent
otherwise provided in Section 6.6 hereof, the other provisions of this
ARTICLE VI shall be inoperative.
Section 6.6 - Transitional Rules
(a) Any living Participant not receiving benefits on August 23, 1984, who
would otherwise not receive the benefits prescribed by this ARTICLE
VI must be given the opportunity to elect to have this ARTICLE VI
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 had at
least 10 years of vesting service when he or she separated from
service.
(b) 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 6.6(d).
(c) The respective opportunities to elect (as described in Section 6.6(a)
and (b) 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.
(d) Any Participant who has elected pursuant to Section 6.6(b) hereof and
any Participant who does not elect under Section 6.6(a) hereof or who
meets the requirements of Section 6.6(a) hereof except that such
Participant does not have at least 10 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:
(1) Automatic joint and survivor annuity. If benefits in the form
of a life annuity become payable to a married Participant who:
(i) begins to receive payments under the Plan on or after Normal
Retirement Age; or
(ii) dies on or after Normal Retirement Age while still working
for the Employer; or
(iii) begins to receive payments on or after the Qualified Early
Retirement Age; or
(iv) 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 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.
(2) 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 last of (i) the 90th day before the Participant
attains the Qualified Early Retirement Age, or (ii) the date on
which participation begins, and ends on the date the Participant
terminates employment.
(3) For purposes of this Section 6.6(d), Qualified Early Retirement
Age is the latest of:
(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.
Section 6.7 - Beneficiary
Subject to the Surviving Spouses's rights under this ARTICLE VI, each
Participant shall have the right, by written notice to the Employer, to
designate one or more Beneficiaries to receive any benefit to which such
Participant may be entitled in the event of his death prior to the
complete distribution of such benefit. Any such selection may be revoked
by a Participant at any time prior to his death by written notification
to the Employer of such revocation. If no such election is in effect on
a Participant's death, his Beneficiary shall be deemed to be his Surviving
Spouse or, if none, the Participant's estate.
Section 6.8 - Withdrawals
Any Participant may, upon thirty days written notice filed with the
Employer, have paid to him an amount equal to the then present value of
all or any portion of any nondeductible voluntary contributions that were
made by such Participant on behalf of himself pursuant to the Plan, less
prior withdrawals, but not including any earnings thereon. Such
withdrawal is subject to spousal consent if the rules described in this
ARTICLE VI apply.
Section 6.9 - Annuity Contracts
Annuity contracts must be non-transferable when distributed from the
Trust.
ARTICLE VII - TRUST ACCOUNT
Section 7.1 - Trust Agreement
All contributions except the portion, if any, allocated to premiums on
non-transferable policies pursuant to Section 4.2 under the Plan shall be
paid over to a Trust to be maintained by the Employer with the Trustee to
be held in accordance with the accompanying Trust Agreement, which is part
of this Plan.
ARTICLE VIII - AMENDMENT AND TERMINATION
Section 8.1 - Amendment by Employer and Sponsor
The Employer reserves the right to amend the Plan in whole or in part
(including retroactive amendments), and the Employer delegates to the
Sponsor the right to amend the terms and conditions of the Plan, and the
Employer will be deemed to have consented to such amendment. The Sponsor
shall, upon making any such amendment, mail a copy of such amendment to
each participating Employer.
Section 8.2 - Amendment by Employer
The Employer will not cease participation in this prototype plan if the
Employer amends the Plan (1) to change the choice of options in the
Adoption Agreement, (2) to add amending 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 (3) to add
certain model amendments published by the Internal Revenue Service which
specifically provide that their adoption will 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, will no longer participate in this
prototype plan and will be considered to have an individually designed
plan.
No amendment to the Plan shall be effective to the extent that it has the
effect of decreasing a Participant's Account balance. For purposes of
this Section 8.2, a Plan 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 will
be treated as reducing an accrued benefit. Furthermore, if the vesting
schedule of the Plan is amended, in the case of an Employee who is a
Participant as of the later of the date such amendment is adopted or the
date it becomes effective, the nonforfeitable percentage (determined as
of such date) of such Employee's right to his employer-derived accrued
benefit will not be less than his percentage computed under the Plan
without regard to such amendment. If the Plan's vesting schedule is
amended, or the Plan is amended in any way that directly or indirectly
affects the computation of a Participant's nonforfeitable percentage, each
Participant with at least 3 Years of Service (5 Years of Service for
Participants without 1 Hour of Service in any Plan Year beginning after
December 31, 1988) with the Employer may elect, within a reasonable period
after the adoption of the amendment or change, to have the nonforfeitable
percentage computed under the Plan 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:
(1) 60 days after the amendment is adopted;
(2) 60 days after the amendment becomes effective; or
(3) 60 days after the Participant is issued written notice of the
amendment by the Employer.
Section 8.3 - Termination
(a) An Employer may terminate his Plan at any time by delivering to the
Trustee and insurer, if any, a written notice of such termination.
(b) The Plan shall terminate (1) upon the death of the Employer, if he
is a sole proprietor, or otherwise upon the dissolution, merger,
consolidation or reorganization of the Employer, unless provision is
made by a successor to the Business for the continuation of the Plan,
and such continuation is approved by the Trustee, or (2) if the
Employer is judicially declared insolvent.
Section 8.4 - Action Upon Termination
Upon termination of the Plan by the Employer pursuant to Section 8.3
hereof, no further contributions shall be made and the Trustee shall
continue to administer the Trust and distribute benefits in accordance
with the instructions of the Employer and the provisions of the Plan.
Section 8.5 - Transfer of Assets
The Employer is authorized to direct the Trustee, upon 60 days written
notice, to transfer the assets to a successor trustee or custodian under
the Plan or any other plan which is qualified under Section 401(a) and
Section 401(d) of the Code and which provides substantially equivalent
benefits. Such a transfer may constitute an amendment of this Plan or the
adoption of a new Plan and the termination of this Plan, as the case may
be, but in either case, upon making such transfer the Trustee shall be
discharged from any and all liability hereunder, except with respect to
acts committed, or acts not taken, as the case may be, prior to such
transfer. The Trustee in making such transfer may withhold sufficient
assets to pay any of its accrued but unpaid fees.
Section 8.6 - Benefits Upon Merger, Consolidation or Transfer of Plan
Assets
In the event of any merger or consolidation with, or transfer of assets
to, any other plan, it shall be a condition of such merger, consolidation
with, or transfer of assets that each Participant hereunder would (if the
Plan were to terminate then) receive a benefit immediately after such
merger, consolidation, or transfer which is equal to or greater than the
benefit he would have been entitled to receive immediately before the
merger, consolidation, or transfer (if the Plan were to have terminated
then).
ARTICLE IX - NAMED FIDUCIARY AND ADMINISTRATOR
Section 9.1 - Administration
The Employer shall be responsible for the administration and operation of
the Plan in accordance with its terms and applicable laws and shall have
the sole authority to enforce the provisions of the Plan, except as
otherwise provided by Federal law. The Employer shall determine all
matters concerning the Plan, including but not limited to questions
arising out of the administration, interpretation and application of the
Plan, which determination shall be conclusive and binding on all persons.
Section 9.2 - Trustee Liability
The Employer shall indemnify and hold harmless the Trustee against all and
any liabilities which may be imposed on the Trustee, and the Employer
shall be responsible for the defense of any actions brought against the
Trustee except for acts of willful dishonesty or gross negligence, and
except as otherwise required by law.
Section 9.3 - Rights Against Trust Assets; Employment
Neither the establishment of the Plan and the Trust nor any modification
thereof, nor the creation of any fund or account, nor the payment of any
benefits, shall be construed as giving to any Participant or other person
any legal or equitable right against the assets of the Trust, the Trustee,
or the Employer, except as herein provided and as provided by Federal law;
and in no event shall the terms of employment of any Employee or
Participant be modified or in any way be affected hereby.
Section 9.4 - Named Fiduciary; Plan Administrator
(a) The Employer shall be the "Named Fiduciary" with respect to
administration, interpretation and application of the Plan. The
Employer shall also be the "Plan Administrator" with respect to the
Plan. The Plan Administrator shall be responsible for complying with
all reporting and disclosure requirements under the Code and ERISA.
(b) The Employer shall be the Named Fiduciary with respect to both
administration and investment of the Plan assets, and the Trustee
shall be subject to direction of the Employer as provided herein, and
is directed to follow the instructions of the Employer.
ARTICLE X - MISCELLANEOUS
Section 10.1 - Qualified Status
The Plan is established with the intent that it will be a qualified plan
under Section 401(a) of the Code. The Employer will notify the Trustee
in writing of any determination made with respect to the qualified status
or change in the qualified status of the Plan.
Section 10.2 - Alienation of Benefits
No benefit or interest available hereunder will be subject to assignment
or alienation, either voluntarily or involuntarily. The preceding
sentence 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.
Section 10.3 - Governing Law
This Plan shall be construed, administered and enforced according to the
laws of the State where the Employer maintains its principal place of
business, except where Federal law is pre-emptive.
Section 10.4 - Trustee Actions
The Trustee shall have the right to design forms to be used for direction
of investments, designation of Beneficiary, selection of retirement
benefits, and other notices to the Trustee. If such form has been
designed and made available to the Employer, the Trustee shall be under
no duty to act with instructions of the Employer unless provided on the
form prescribed.
Section 10.5 - Loss of Qualification
If a Plan of a participating Employer either fails to attain initial
qualified status or fails to retain its qualified status, such Plan shall
not participate in this prototype plan and shall be considered an
individually designed plan.
Section 10.6 - Contributions; Exclusive Benefit Contributions are
made conditioned upon the initial and continuing qualification of the Plan
under Section 401(a) of the Code and the deductibility of such
contributions under Section 404(a) of the Code. The assets of the Plan
will not be used for or diverted to any purpose whatsoever other than the
payment of the expenses of administering the Plan and the exclusive
benefit of the Participants and their Beneficiaries.
ARTICLE XI - LIMITATIONS ON ALLOCATIONS
Section 11.1 - Employers Who Do Not Maintain Other Qualified Plans
(a) If the Participant does not participate in, and has never
participated in, another qualified plan, 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 as defined in Section 11.5 hereof, the amount of Annual
Additions (as defined below) which may be credited to the
Participant's account for any Limitation Year (as defined below) will
not exceed the lesser of the Maximum Permissible Amount (as defined
below) or any other limitation contained in this Plan. 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 will be reduced so that
the Annual Additions for the Limitation Year will equal the Maximum
Permissible Amount.
(b) Prior to determining the Participant's actual Compensation (as
defined below) for the Limitation Year, the Employer may determine
the Maximum Permissible Amount for a Participant on the basis of a
reasonable estimation of the Participant's Compensation for the
Limitation Year uniformly determined for all Participants similarly
situated.
(c) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the Limitation
Year will be determined on the basis of the Participant's actual
Compensation for the Limitation Year.
(d) If pursuant to Section 11.1(c) hereof or the allocation of
forfeitures there is an Excess Amount (as defined below), the excess
will be disposed of as follows:
(i) Any nondeductible voluntary employee contributions, to the extent
they would reduce the Excess Amount, will be returned to the
Participant.
(ii) If after the application of paragraph (i) 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 will
be used to reduce Employer contributions for such Participant in the
next Limitation Year and each succeeding Limitation Year if
necessary.
(iii) If after the application of paragraphs (i) or (ii) an Excess
Amount still exists, and the Participant is not covered by the Plan
at the end of the Limitation Year, the Excess Amount will be held
unallocated in a suspense account. The suspense account will be
applied to reduce future Employer contributions for all remaining
Participants in the next Limitation Year, and each succeeding
Limitation Year if necessary.
(iv) If a suspense account is in existence at any time during a
Limitation Year pursuant to this Section, it will not participate in
the allocation of the Trust Account's investment gains and losses.
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 Participant.
Section 11.2 - Employers Who Maintain Other Qualified Master or Prototype
Defined Contribution Plans
(a) This Section applies if, in addition to this Plan, the Participant
is covered under another qualified Master or 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 as defined in Section 11.5 hereof, during any
Limitation Year. The Annual Additions which may be credited to a
Participant's account under this Plan for any such Limitation Year
will not exceed the Maximum Permissible Amount reduced by the Annual
Additions credited to a Participant's account under the other plans
and welfare benefit funds for the same Limitation Year. If the
Annual Additions with respect to the Participant under other defined
contribution Plans and welfare benefit funds maintained by the
Employer are less than the Maximum Permissible Amount and the
Employer contribution that would otherwise be contributed or
allocated to the Participant's account under this Plan would cause
the Annual Additions for the Limitation Year to exceed this
limitation, the amount contributed or allocated will be reduced so
that the Annual Additions under all such plans and funds for the
Limitation Year will 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.
(b) 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
11.1(b) hereof.
(c) As soon as is administratively feasible after the end of the
Limitation Year the Maximum Permissible Amount for the Limitation
Year will be determined on the basis of the Participant's actual
Compensation for the Limitation Year.
(d) If, pursuant to subsection 11.2(c) or as a result of the allocation
of forfeitures, 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 will 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.
(e) If an 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 (a) the Annual Additions allocated to the
Participant for the Limitation Year as of such date under this Plan
to (b) the total Annual Additions allocated to the Participant for
the Limitation Year as of such date under this and all other
qualified Master or Prototype defined contribution plans.
(f) Any Excess Amount attributed to this Plan will be disposed in the
manner described in subsection 11.1(d) hereof.
Section 11.3 - Employers Who Maintain Other Defined Contribution Plans
Which Are Not Master or Prototype Plans
If the Participant is covered under another qualified defined contribution
plan maintained by the Employer which is not a Master or Prototype plan,
Annual Additions which may be credited to the Participant's account under
this Plan for any Limitation Year will be limited in accordance with
subsections 11.2(a) through 11.2(f) as though the other plan was a Master
or Prototype plan unless the Employer provides other limitations in the
Profit Sharing Plan Adoption Agreement and/or the Money Purchase Pension
Plan Adoption Agreement.
Section 11.4 - Employers Who Maintain a Defined Benefit Plan
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 will be limited in accordance with the Profit Sharing Plan
Adoption Agreement and/or the Money Purchase Pension Plan Adoption
Agreement.
Section 11.5 Definitions
(a) Annual Additions: The sum of the following amounts credited to a
Participant's account for the Limitation Year:
(1) Employer contributions;
(2) Employee Contributions; and
(3) forfeitures.
For this purpose, any Excess Amount applied under subsections 11.1(d)
or 11.2(f) in the Limitation Year to reduce Employer contributions
will be considered Annual Additions for such Limitation Year.
Amounts 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, are treated
as Annual Additions to a defined contribution plan. Also, amounts
derived from contributions paid or accrued after December 31, 1985,
in taxable years ending after such date, which are attributable to
post-retirement medical benefits allocated to the separate account
of a Key Employee, as defined in Section 419A(d)(3) of the Code,
under a welfare benefit fund, as defined in Section 419(e) of the
Code, maintained by the Employer, are treated as Annual Additions to
a defined contribution plan.
(b) Compensation: A Participant's earned income, 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 with the
Employer maintaining the Plan to the extent that the amounts are
includable in gross income (including, but not limited to,
commissions paid to salesmen, compensation for services on the basis
of a percentage of profits, commissions on insurance premiums, tips,
bonuses, fringe benefits, reimbursements and expense allowances), and
excluding the following:
(1) Employer contributions to a plan of deferred compensation which
are not includable 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;
(2) Amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by the
Employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
(3) Amounts realized from the sale, exchange or other disposition
of stock acquired under a qualified stock option; and
(4) 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
described in Section 403(b) of the Code (whether or not the
amounts are actually excludable from the gross income of the
Employee).
For purposes of applying the limitations of this Article,
Compensation for a Limitation Year is the Compensation actually
paid or includable in gross income during such year.
Notwithstanding the preceding sentence, compensation for a
Participant in a defined contribution plan who is permanently
and totally disabled (as defined in section 105(d)(4) of the
Code) is the Compensation such Participant would have received
for the Limitation Year if the Participant was 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 (as defined in Section
414(q) of the Code), and contributions made on behalf of such
Participant are nonforfeitable when made.
(c) Defined Benefit Fraction: A fraction, the numerator of which
is the sum of the Participant's Projected Annual Benefits under
all the defined benefit plans (whether or not terminated)
maintained by the Employer, and the denominator of which is the
lesser of 125 percent of the dollar limitation determined for
the Limitation Year under Sections 415(b) and (d) of the Code
or 140 percent of the Highest Average Compensation, 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, was a Participant in one or more defined
benefit plans maintained by the Employer which were in existence
on May 6, 1986, the denominator of this fraction will not be
less than 125 percent of the sum of the annual benefits under
such plans which the Participant had accrued as of the close of
the last Limitation Year beginning before January 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.
(d) Defined Contribution Dollar Limitation: $30,000 or if greater,
one-fourth of the defined benefit dollar limitation set forth
in Section 415(b)(1) of the Code, as in effect for the
Limitation Year.
(e) Defined Contribution Fraction: A fraction, the numerator of
which is the sum of the Annual Additions to the Participant's
account under all the defined contribution plans (whether or not
terminated) maintained by the Employer for the current and all
prior Limitation Years (including the Annual Additions
attributable to the Participant's nondeductible Employee
contributions to this and all other defined benefit plans,
whether or not terminated, maintained by the Employer and the
annual additions attributable to all welfare benefit funds, as
defined in Section 419(e) of the Code, and individual medical
accounts, as defined in Section 415(l)(2) of the Code,
maintained by the Employer, and the denominator of which is the
sum of the Maximum Aggregate Amounts for the current and all
prior Limitation Years of service with the Employer (regardless
of whether a defined contribution plan was maintained by the
Employer). The Maximum Aggregate Amount in any Limitation Year
is the lesser of 125 percent of the dollar limitation determined
under Section 415(b) and (d) of the Code in effect under Section
415(c)(1)(A) of the Code or 35 percent of the Participant's
Compensation for such year.
If the Employee was a Participant as of the end of the first day
of the first Limitation Year beginning after December 31, 1986,
in one or more defined contribution plans maintained by the
Employer which were in existence on May 6, 1986, the numerator
of this fraction will be adjusted if the sum of this fraction
and the Defined Benefit Fraction would otherwise exceed 1.0
under the terms of this Plan. Under the adjustment, an amount
equal to the product of (1) the excess of the sum of the
fractions over 1.0 times (2) the denominator of this fraction,
will be permanently subtracted from the numerator of this
fraction.
The adjustment is calculated using the fractions as they would
be computed as of the end of the last Limitation Year beginning
before January 1, 1987, and disregarding any changes in the
terms and conditions of the Plan made after May 5, 1986, but
using the 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.
(f) Employer: For purposes of this ARTICLE, the Employer that
adopts this Plan, and all members of a controlled group of
corporations (as defined in Section 414(b) of the Code as
modified by Section 415(h)), all commonly controlled trades or
businesses (as defined in Section 414(c) as modified by Section
415(h)) or affiliated service groups (as defined in Section
414(m)) of which the adopting Employer is a part, and any other
entity required to be aggregated with the Employer pursuant to
regulations under Section 414(o) of the Code.
(g) Excess Amount: The excess of the Participant's Annual Additions
for the Limitation Year over the Maximum Permissible Amount.
(h) Limitation Year: A calendar year, or the 12-consecutive month
period elected by the Employer in a resolution attached to the
Adoption Agreement. All qualified plans maintained by the
Employer must use the same Limitation Year. If the Limitation
Year is amended to a different 12-consecutive-month period, the
new Limitation Year must begin on a date within the Limitation
Year in which the amendment is made.
(i) Master or Prototype Plan: A Plan the form of which is the
subject of a favorable opinion letter from the Internal Revenue
Service.
(j) Maximum Permissible Amount: The maximum Annual Addition that
may be contributed or allocated to a Participant's Account under
the Plan for any Limitation Year, which shall not exceed the
lesser of (a) the defined contribution dollar limitation, or (b)
25 percent of the Participant's Compensation for the Limitation
Year. The Compensation Limitation referred to in (b) shall not
apply to any contribution for medical benefits (within the
meaning of Sections 401(h) or 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 a short Limitation Year is created because of an amendment
changing the Limitation Year to a different 12-consecutive-month
period, the Maximum Permissible Amount will not exceed the
Defined Contribution Dollar Limitation multiplied by the
following fraction:
number of months in the short Limitation Year
---------------------------------------------
12
(j) Projected Annual Benefit: 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:
(1) the Participant will continue employment until Normal
Retirement Age under the Plan (or current age, if later),
and
(2) the Participant's Compensation for the current Limitation
Year and all other relevant factors used to determine
benefits under the Plan will remain constant for all
future Limitation Years.
- ------------------------------ -------------------------
(Employer's Signature) (Date)
AMENDMENT NO. 1
TO THE OPPENHEIMER-SPONSORED
RETIREMENT PLAN BASIC PLAN DOCUMENT (No. 01)
The Basic Plan Document (No. 01) is hereby amended by the word-
for-word adoption of the model language contained in Revenue Procedure
93-12, for distributions made on or after January 1, 1993, as follows:
Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a Distributee's election under this provision, 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.
Definitions
(a) 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
(10) years or more; any distribution to the extent such distribution is
required under Section 401(a)(9) of the Code; and the portion of any
distribution that is not includable in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to
employer securities).
(b) Eligible Retirement Plan. An Eligible Retirement Plan is an
individual retirement account described in Section 408(a) of the Code,
an individual retirement annuity described in Section 408(b) of the
Code, an annuity plan described in Section 403(a) of the Code, or a
qualified trust described in Section 401(a) of the Code, that accepts
the Distributee's Eligible Rollover Distribution. However, in the case
of an Eligible Rollover Distribution to the surviving spouse, an
Eligible Retirement Plan is an individual retirement account or
individual retirement annuity.
(c) Distributee. A Distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's surviving
spouse and the Employee's or former Employee's spouse or former spouse
who is the alternate payee under a qualified domestic relations order,
as defined in Section 414(p) of the Code, are Distributees with regard
to the interest of the spouse or former spouse.
(d) Direct Rollover. A Direct Rollover is a payment by the Plan
to the Eligible Retirement Plan specified by the Distributee.
SECOND
The Basic Plan Document (No. 01) is hereby amended by the word-
for-word adoption of the model language contained in Revenue Procedure
94-13 as follows:
In addition to other applicable limitations set forth in the plan,
and notwithstanding any other provision of the plan to the contrary,
for plan years beginning on or after January 1, 1994, the annual
compensation of each employee taken into account under the plan shall
not exceed the Omnibus Budget Reconciliation Act of 1993 ("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 consists of fewer than 12 months, the OBRA
'93 annual compensation limit will be multiplied by a fraction, the
numerator of which is the number of months in the determination period,
and the denominator of which is 12.
For plan years beginning on or after January 1, 1994, any
reference in this plan to the limitation under Section 401(a)(17) of
the Code shall mean the OBRA '93 annual compensation limit set forth in
this provision.
If compensation for any prior determination period is taken into
account in determining an employee's benefits accruing in the current
plan year, the compensation for that prior determination period is
subject to the OBRA '93 annual compensation limit in effect for that
prior determination period. For this purpose, for determination
periods beginning before the first day of the first plan year beginning
on or after January 1, 1994, the OBRA '93 annual compensation limit is
$150,000.
<PAGE>
DECLARATION OF TRUST
OppenheimerFunds Retirement Plan
Profit Sharing Plan - I.R.S. Serial No. D259770A
Pension Plan - I.R.S. Serial No. D259771A
The Employer has established a Retirement Plan (the "Plan") for the
benefit of the participants therein (the "Participants"). As part of
the Plan the Employer has requested The Bank of Boston (the "Trustee"),
to establish a Trust Account for the investment of contributions under
the Plan in shares or plans for the accumulation of shares of certain
Funds, upon the terms and conditions set forth in this Declaration of
Trust.
Section 1. Establishment of Trust and Participant's Accounts
The Trustee shall open and maintain a Trust Account and, as part
thereof, Participant's accounts for such individuals as the Employer
shall from time to time certify to it as Participants in the Plan. The
Participants as of the date of this Declaration of Trust are set forth
in the Retirement Plan Contribution Form.
Section 2. Receipt of Contributions
The Trustee shall accept and hold in the Trust Account such
contributions of money on behalf of the Employer and Participants as it
may receive from time to time from the Employer. All such
contributions shall be accompanied by written instructions from the
Employer specifying the Participant's Accounts to which they are to be
credited. Any reasonable number of accounts may be established for a
Participant provided that each such account meets the appropriate
investment minimums currently required under the prospectus of the
mutual fund in which the account is invested. If a contribution for a
participant is, by virtue of the contributions limits set forth in the
Plan, insufficient to meet a minimum amount of investment required by a
mutual fund prospectus, the contribution may nevertheless be invested,
at the direction of the Employer, in one of the mutual funds described
in Section 3 hereof. The selection of the number of accounts and of
the investment shall be made by the Employer, in one of the mutual
funds described in Section 3 hereof. The selection of the number of
accounts and of the investment shall be made by the Employer, but in
the event that all contributions are not to be invested in the same
manner the Employer shall act on instructions from the Participants.
Section 3. Investment of Account Assets
The amount of each contribution credited to a Participant's account,
except the portion, if any, allocated pursuant to Section 4.2 of the
Plan Document shall be applied to purchase full and fractional shares
of any Fund managed by Oppenheimer Management Corporation, or any
affiliate in any of the manners in which such shares are being publicly
offered. More than one account may be opened for a Participant.
All dividends and capital gains distributions received on the shares of
any Fund held in each Participant's Account shall (unless received in
additional shares of the Fund) be reinvested in such shares which shall
be credited to such account. If any distribution of the Fund may be
received at the election of the shareholder in additional shares or in
cash or other property, the Trustee shall elect to receive it in
additional shares.
Sales charges attributable to the acquisition of shares shall be
charged to the Account for which such shares are acquired.
The functions of the Trustee under this Trust are custodial only, and
the Trustee does not have investment discretion. Amounts received
without Employer direction as to the investment shall be held in cash
until the Employer sends written directions to the Trustee with respect
to such amounts.
Section 4. Distributions from the Trust Account
On receipt of a written request from the Employer certifying that a
Participant's benefit is payable to the Plan, the Trustee shall
distribute the shares in his account (together with any cash credited
to him) to the Participant or his designated beneficiary, provided,
however, that if any request for payment of a benefit so directs, the
Trustee shall pay the same by redeeming all shares credited to such
Participant's accounts (or such lesser number as the Employer may so
request), and distribute the redemption proceeds (together with any
cash credited to his account) to such Participant or his designated
beneficiary under the plan.
Section 5. Voting and Other Action
The Fund shall deliver, or cause to be delivered, to the Employer all
notices, prospectuses, financial statements, proxies and proxy
soliciting materials relating to such shares. The Trustee shall not
vote any of the shares of the Fund held hereunder except in accordance
with the written instructions of the Employer.
Section 6. Report of the Trustee and Employer
The Employer shall keep accurate and detailed records of all receipts,
investments, disbursements and other transactions. After receipt of an
investment the Trustee will transmit the amount of the investment to
the underwriter with a copy of the confirmation statement of the Fund
in order to enable the Employer to keep all proper accounts.
The Employer shall furnish to the Trustee, and the Trustee shall
furnish to the Employer such information relating to the Plan and Trust
Account as may be required under the Employee Retirement Income
Security Act of 1974 or the Internal Revenue Code and regulations
thereunder.
Section 7. Trustee's Fee and Expenses of the Account
Any income or other taxes of any kind whatsoever (other than penalty
taxes for excess contributions or premature distributions) that may be
levied or assessed upon or in respect to the Trust Account, any
transfer taxes, charges or fees incurred in connection with the
investment and reinvestment of the assets of the Trust Account,
administrative expenses incurred by the Trustee in the performance of
its duties including fees for legal services rendered to the Trustee,
and the compensation to the Trustee that may be agreed upon in writing
from time to time between the Trustee and the Employer, shall be paid
from the assets of the Accounts and shall, unless allocable to the
accounts of specific Participants, be charged proportionately to their
respective accounts.
Penalty taxes imposed by the Code for excess contributions or premature
distributions shall not be paid by the Trust, but by the person making
the excess contribution or receiving the premature distribution. To
the extent any such tax is nevertheless levied upon the Trust Account,
it shall be allocated to the account of the Participant who has made
the excess contribution or received the premature distribution.
Section 8. Concerning the Trustee
The Trustee shall not be responsible in any way for the collection of
contributions provided for under the Plan, the purpose or propriety of
any distribution made pursuant to Section 4 hereof, or for any other
action taken at the Employer's request. The Trustee shall not be
responsible for the administration of the Plan, its validity or effect
or for the qualification of the Plan or this Trust Agreement under the
provisions of the Internal Revenue Code. The Employer shall at all
times fully indemnify and save harmless the Trustee, its successors and
assigns, from any liability arising from distributions so made or
actions so taken and from any and all other liability whatsoever which
may arise in connection with this Agreement. The Trustee shall be
under no duty to take any action other than as herein specified with
respect to the Trust Account unless the Employer shall furnish the
Trustee with instructions in proper form to which instruction the
Trustee shall have specifically agreed in writing; or to defend or
engage in any suit with respect to the Trust Account unless the Trustee
shall have first agreed in writing to do so and shall have been fully
indemnified to its satisfaction The Trustee shall be protected in
acting upon any written order from the Employer or any other notice,
request, consent, certificate or other instrument or paper believed by
it to be genuine and to have been properly executed, so long as it acts
in good faith, in taking or omitting to take any action.
Section 9. Resignation or Removal of Trustee
The Trustee may resign at any time upon forty-five (45) days notice in
writing to the Employer, and may be removed by the Employer at any time
upon forty-five (45) days notice in writing to the Trustee. Upon such
resignation or removal, the Sponsor or the Employer shall appoint a
successor Trustee. Upon receipt by the Trustee of written acceptance
of such appointment by the successor Trustee, the Trustee shall
transfer and pay over to such successor the assets of the Trust Account
and all records pertaining thereto. The Trustee is authorized,
however, to reserve such sum of money as it may deem advisable for
payment of all its fees, compensation, costs and expenses, or for
payment of any other liability constituting a charge in or against the
assets of the Trust or on or against the Trustee, with any balance of
such reserve remaining after the payment of all such items to be paid
over to the successor Trustee. The successor Trustee shall hold the
assets paid over to it under terms similar to those of this Declaration
of Trust that qualify under Section 401 of the Internal Revenue Code.
If within thirty (30) days after its resignation or removal pursuant to
Section 9 hereof the Employer has not appointed a successor Trustee
which has accepted such appointment, the Trustee shall, unless it
elects to terminate the Trust Agreement pursuant to Section 10 hereof,
appoint such successor itself.
Section 10. Termination and Amendment of Account
The Trustee may elect to terminate the Trust Account if within thirty
(30) days after its resignation or removal pursuant to Section 9 hereof
the Employer has not appointed a successor Trustee which has accepted
such appointment. The Trustee may terminate the Account upon receiving
notice of the Employer's death, if the Employer of a sole proprietor,
or upon receiving notice of the termination of the partnership if the
Employer is a partnership unless in either case provision is made by a
successor to the business of the Employer for the continuation of the
Plan and this Agreement upon terms satisfactory to the Trustee.
Termination of the Trust Account shall be effected by distributing all
assets thereof to the Participants and their designated beneficiaries
pursuant to the terms of the Plan as if the Plan were terminated. Upon
the completion of such distribution, the Trustee shall be relieved from
all further liability with respect to all amounts so paid.
Amendments prepared by the sponsor shall be effective as to Employers
adopting the Plan after the date of the amendment upon consent by the
Trustee to the amendment, and shall become effective as to existing
Employers upon their consent, expressed or implied. Amendments
prepared by the sponsor which merely change the Trust to conform to
legal requirements shall be effective immediately with respect to all
adopting Employers, upon consent by the Trustee.
Section 11. Miscellaneous
At no time shall it be possible for any part of the assets of the Trust
Account to be used for or diverted to purposes other than for the
exclusive benefit of Participants and their beneficiaries.
Any notice from the Trustee to the Employer provided for in this
Agreement shall be effective if sent by first class mail to him at his
last address of record.
This Agreement shall be construed in accordance with the laws of the
State wherein the Trustee maintains its principal place of business.
This Agreement shall bind and inure to the benefit of the personal
representatives, successors and assigns of the Employer and the
Trustee.
Trustee:
The Bank of Boston
<PAGE>
Document No. 1
PROFIT-SHARING PLAN ADOPTION AGREEMENT
FOR A PROTOTYPE NON-STANDARDIZED DEFINED CONTRIBUTION PLAN
SPONSORED BY OPPENHEIMER FUNDS DISTRIBUTOR, INC.
Adoption Agreement #001
This is the Adoption Agreement for defined contribution plan #001 of
basic plan document #02, which is a combined prototype sharing/money
purchase pension plan. This Adoption Agreement may be adopted either
singly or in combination with defined contribution plan #002, a
prototype money purchase pension plan.
NOTE: Failure to properly fill out this Adoption Agreement may result
in disqualification of the Plan. Before executing this Adoption
Agreement, the Employer should consult with a tax advisor or attorney.
- -------------------------------------------------------------------
The Employer hereby establishes a Profit-Sharing Plan and a trust upon
the respective terms and conditions contained in the prototype defined
contribution plan (the "Plan") and the Trust Agreement annexed hereto
and appoints as Trustee of such trust the person(s) who have executed
this Adoption Agreement evidencing their acceptance of such
appointment. The Plan, the Trust Agreement, and the Custody Agreement,
if applicable, shall be supplemented and modified by the terms and
conditions contained in this Adoption Agreement and shall be effective
on the Effective Date.
The Sponsor will inform the Employer of any amendments to the Plan or
the discontinuance or abandonment of the Plan.
- -------------------------------------------------------------------
1. EMPLOYER DATA
A. ---------------------------------------------
Name of Employer
B. ---------------------------------------------
Address
( )
C. ---------------------------------------------
Telephone Number
D. ---------------------------------------------
Employer's Taxable Year End
E. ---------------------------------------------
Plan Year End
F. The Employer is:
( ) a corporate entity
( ) a non-corporate entity
( ) a corporation electing to be taxed under Subchapter S
G. ---------------------------------------------
Effective Date (Should be the first day of a Plan Year)
H. If this is an Amendment of an existing plan, complete the
following:
---------------------------------------------
Effective Date of Amendment (Should be the first day of a
Plan Year)
---------------------------------------------
Name of Prior Plan
---------------------------------------------
Effective Date of Prior Plan
---------------------------------------------
I. Limitation Year, if different from E. above.
II. ELIGIBILITY
A. Employees shall be eligible to participate in the Plan upon
completion of the eligibility requirements (Complete 1 and 2)
(Plan Section 3.1.):
1. Years of Service. The Employer must complete (check one
box)
( ) One Year of Service.
( ) [ ] Years of Service. (You can require less
than or more than one Year of Service, but not more
than two (2). If you select more than one Year of
Service, the Employee must be 100 percent vested
once he become eligible, and you must select
vesting schedule Number 2 in Section IX of this
Adoption Agreement. If the Year of Service is or
includes a fractional year, an Employee will not be
required to complete any specified number of Hours
of Service (Section III, A of this Adoption
Agreement) to receive credit for such fractional
year.
2. Age. The Employer has attained age [ ] (not greater
than age 21).
B. All Employees will be eligible to participate in the Plan
with the exception of the following (Plan Section 3.1):
( ) Union Employees. Employees included in a unit covered by a
collective bargaining agreement between the Employee and
Employer representatives (as defined in Section 3.1(b)(i) of
the Plan), if retirement benefits were the subject of good
faith bargaining and the requirements of Section 3.1(b)(i) of
the Plan are satisfied.
( ) Non-resident Aliens. Employees who are nonresident aliens and
who receive no earned income from the Employer which
constitutes income from sources within the United States.
For purposes of this Section II, the term "Employee" includes
all employees of this Employer or any employer aggregated
with this Employer under Sections 414(b),(c),(m), or (o) or
the Code and individuals who are Leased Employees required to
be considered Employees of such employer under Section 414(n)
or (o) of the Code.
III. CREDITED SERVICE
A. The plan provides that a Year of Service requires at least
1,000 hours during any Plan Year. If a lower number of hours
is desired, state the number here:
_ _ _ _ (Plan Section 2.49)
B. The Plan permits Hours of Service to be determined by the use
of service equivalencies under one of the methods selected
below (choose one method) (Plan Section 2.21):
1. ( ) On the basis of actual hours for which an Employee is
paid or entitled to payment.
2. ( ) On the basis of days worked. An Employee will be
credited with ten (10) Hours of Service if under Section 2.21 of
the Plan such Employee would be credited with at least one (1)
Hour of Service during the day.
3. ( ) On the basis of weeks worked. An Employee will
be credited with forty-five (45) Hours of Service if under Section
2.21 of the Plan such Employee would be credited with at least one
(1) Hour of Service during the week.
4. ( ) On the basis of semi-monthly payroll periods. An
Employee will be credited with ninety-five (95) Hours of Service
if under Section 2.21 of the Plan such Employee would be credited
with a least one (1) Hour of Service during the semi-monthly
payroll period.
-or-
5. ( ) On the basis of months worked. An Employee will
be credited with one hundred ninety (190) Hours of Service if
under Section 2.21 of the Plan such Employee would be credited
with at least one (1) Hours of Service during the month.
C. Service with predecessor employer (choose 1 or 2) (Plan
Sections 3.3 and 8.5):
1. ( ) No credit will be given for service with
predecessor employer.
2. ( ) Credit will be given for service with the following
predecessor employer(s):
---------------------------------------------
---------------------------------------------
Note: The Plan provides that if this is a continuation of a
predecessor plan, service under the predecessor plan must be
counted.
IV. COMPENSATION
A. For purposes of the Plan, Compensation means of all of each
Participant's (check one):
( ) Section 3401(a) Wages: Wages as defined in Code Section
3401(a) for purposes of income tax withholding at the
source, but determined without regard to any rules that
limit the remuneration included in wages that are based
on the nature and location of the employment or the
services performed.
( ) 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 with the Employer maintaining
the Plan to the extent that the amounts are includable
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,
reimbursements, and expense allowances), and excluding
the following:
(1) Employer contributions to a Plan deferred
compensation which are not includable 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;
(2) Amounts realized from the exercise of a non-
qualified stock option, or when restricted stock (or
property) held by the Employee either becomes freely
transferable or is no longer subject to a substantial
risk of forfeiture;
(3) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
(4) 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 described in Section 403(b) of the Code
(whether or not the amounts are actually excludable from
the gross income of the Employee).
For any self-employed individual Compensation will mean
earned income.
B. Effective [ ], Compensation:
( ) shall include
( ) shall not include
Employer Contributions made pursuant to a salary reduction
agreement which are not includable in the gross income of the
Employee under Sections 125, 402(a)(8), 402(h) or 403(b) of
the Code. (The effective date of the election in this
paragraph shall not be earlier than the first day of the
first Plan Year beginning after 1986.)
V. CONTRIBUTIONS
A. Profit Sharing Plan Formulas (Choose 1 or 2) (Plan Section
4.1(b))
1. ( ) Discretionary pursuant to Employer resolution. If
not resolution is adopted, then [ ]% of Participants'
Compensation.
-or-
2. ( ) [ ]% of Participants' Compensation, plus
discretionary amount, if any, by Employer resolution, not to
exceed current and accumulated Net Profits.
Note: Each of these formulas is subject to maximum
limitations on contributions as provided in the Plan and the
Internal Revenue Code. In no event may the Employer
contribution exceed 15% of the aggregate compensation of all
Participants for the year, plus up to 10% credit carryover in
certain circumstances. Additional limitations are included
in the Plan where the Employer also has another qualified
retirement plan. An Individual Participant's limit on
contributions and forfeitures, per year is generally the
lesser of 15% of compensation of $30,000.
B. Contribution Eligibility (Choose 1 or 2) Plan Section 4.1(c).
1. ( ) The Plan provides that a Participant will share in
Employer Contributions for the Plan Year only if he (i)
retires, dies, or becomes totally and permanently disabled,
or (ii) completes 501 Hours of Service and is employed on the
last day in such year. If a lesser number of hours is
desired, state the number here: [ ].
2. ( ) A Participant will share in Employer Contributions
for the Plan Year in which he terminates employment prior to
the end of such year if he completes 501 Hours of Service in
such year. If a lesser number of hours is desired, state the
number here: [ ].
C. Contributions may only be made from the Net Income of the
Employer for the Plan Year unless the Employer elects to
disregard Net Income below.
(Check the option below if you wish it to apply to your
plan.)
( ) Effective for Plan Years beginning on or after [ ]
(fill in the first day of the Plan Year in which this
Adoption Agreement is executed or a subsequent
anniversary of such date), not withstanding any other
provision of the Plan, the Employer Contributions shall
be made to the Plan without regard to current or
accumulated earnings and profits for the taxable year or
years ending with or within such Plan Year.
VI. ALLOCATION OF EMPLOYER CONTRIBUTIONS
A. Formula -- Choose 1 or 2
NOTE: If you provide for hardship withdrawals you must use
Formula 1.
1. ( ) Non-Integrated Plan -- Employer contributions shall be
allocated to the accounts of all eligible Participants
prorated upon compensation.
2. ( ) Integrated Plan -- Employer contributions and
forfeitures shall be integrated with Social Security and
allocated in accordance with the provisions of Plan Section
5.3(b)(i),(ii),(iii) and (iv).
(a) The Integration Level is:
( ) Taxable Wage Base
( ) [$ ] (a dollar amount less than Taxable Wage Base)
( ) [ % ] of the Taxable Wage Base (not to exceed 100%)
Note: If you maintain any other plan in addition to this
Plan, only one plan may be integrated with Social Security.
VII. DISTRIBUTIONS
A. Normal Retirement Age is (Choose 1 and/or 2) (Plan Section
2.27):
1. ( ) The date a Participant reach age [ ] (not more than
65 or less than 55). If no age is indicated, normal
retirement age shall be 65.
-or-
2. ( ) The late of age [ ] (not more than 65) or the [ ]
(not more than 5th) anniversary of the day the Participant
commenced participation in the Plan. The participation
commencement date is the first day of the first Plan Year in
which the Participant commenced participation in the Plan.
NOTE: If, for Plan Years beginning before January 1, 1988,
Normal Retirement Age was determined with reference to the
anniversary date (more than 5 but not to exceed 10 years),
the anniversary date for Participants who first commenced
participation under the Plan before the first Plan Year
beginning on or after January 1, 1988, shall be the earlier
of (A) the 10th anniversary of the date the Participant
commenced participation in the Plan (or such anniversary as
had been elected by the Employer, if less than 10), or (B)
the 5th anniversary of the first day of the first Plan Year
beginning on or after January 1, 1988.
B. Early Retirement (Choose 1 or 2) (Plan Section 9.1, 10.4)
1. ( ) Early Retirement Date is the first day of the month
coincident with or next following the date upon which a
Participant reaches age [ ] (not less than 55) and
completes [ ] years of service not more than 15).
-or-
2. ( ) Early Retirement will not be permitted under the
plan.
VIII. OPTIONAL FEATURES
A. Hardship Withdrawal (Choose 1 or 2)(Plan Section 12.2):
1. ( ) The Plan permits a hardship withdrawal
-or-
2. ( ) The Plan does not permit a hardship withdrawal.
Note: The Plan may not provide hardship withdrawals if
integration with Social Security is elected in Section
VI.
B. Loans (Choose 1 or 2)(Plan Article 13).
1. ( ) The Plan permits Loans to Participants.
-or-
2. ( ) The Plan does not permit loans to Participants.
Note: The Plan may not permit loans to Owner-Employees
of non-corporate entities or to Shareholder-Employees of
Subchapter S corporations. If Plan loans are permitted,
the Trustee designated in Section XV of this Adoption
Agreement may not be the Sponsor's designated Trustee.
C. Insurance (Choose 1 or 2)(Plan Article 14).
1. ( ) The Plan permits Participants to designate a
portion of their Account to purchase life insurance
contracts. (MUST NOT be selected if Sponsor's
designated Trustee is appointed as Trustee).
The percentage of the Employer Contributions which may
be applied to purchase life insurance contracts shall be
equal to [ ]%.
-or-
2. ( ) The Plan does not permit Participants to
designate a portion of their Account to purchase life
insurance contracts.
Note: Section 14.5 of the Plan provides certain limits
on the amount of Employer Contributions that can be
applied to purchase life insurance contracts.
IX. VESTING
A. Employer contributions will become vested if the Participant
terminates employment for any reasons other than retirement,
death, or disability pursuant to the following schedule
(Choose 1, 2, 3, or 4). (Plan Section 8.3):
1. ( )
Years of
Service Vested Percentage
1 year 0%
2 years 20%
3 years 40%
4 years 60%
5 years 80%
6 or more years 100%
-or-
2. ( ) 100 percent vesting immediately after satisfaction of
the eligibility requirements.
Note: If a service requirement greater than 1 year is chosen
for eligibility in Section II.A.1 of this Adoption Agreement,
vesting schedule Number 2 must be chosen.
3. ( ) 100 percent vesting after [ ] (not to exceed 3
Years of Service).
4. ( )
Years of Vested
Service Percentage
1 year [ ]%
2 years [ ]% (not less than 20)
3 years [ ]% (not less than 40)
4 years [ ]% (not less than 60)
5 years [ ]% (not less than 80)
6 years [ ]% (not less than 100)
X. INVESTMENT CHOICES
A. ( ) Investment of Trust assets may be selected only from
Shares or other investment offered by the Sponsor.
B. ( ) [ ]% (not less than 25%) of the Trust assets must be
invested in Shares or other investment offered by the
Sponsor with the remainder in such other investments as
may be acceptable within the discretion of the Trustee.
C. ( ) 50% of the Trust assets must be invested in Shares or
investments offered by the Sponsor with the remainder of
such other investments as may be acceptable within the
discretion of the Trustee.
D. ( ) 25% of the Trust assets must be invested in Shares or
investments offered by the Sponsor with the remainder of
such other investments as may be acceptable within the
discretion of the Trustee.
The Sponsor may impose additional limitations relating
to the type of permissible investments in the Trust
(Plan Section 7.3).
XI. INVESTMENT AUTHORITY
Contributions to the Plan shall be invested by the Trustee in
accordance with instructions of the Employer or Plan
Administrator except that (Choose A, B, or C)(Plan Section 7.2):
A. ( ) No Exceptions; the Employer or Plan Administrator shall
make all investment selections.
-or-
B. ( ) The Employer delegates all investment responsibility to
the Trustee. (MUST NOT be selected is Sponsor's
designated Trustee is appointed as Trustee).
-or-
C. ( ) Each Participant ( ) may, ( ) shall direct that
( ) (1) amounts voluntarily contributed by such
Participant pursuant to Section 4.3 of the
Plan, and rollover contributions and trustee
transfers pursuant to Section 4.4 of the Plan,
if any,
-and/or-
( ) (2) Employer Contributions on the Participant's
behalf, shall be invested in specified
investments offered by the Sponsor.
Participants may make or change such
directions by giving written notice to the
Plan Administrator. Reasonable restrictions
may be imposed on this privilege by the Plan
Administrator or the Sponsor for purposes of
administrative convenience.
XII. TOP-HEAVY PROVISIONS
A. Participant who are eligible to receive the minimum
allocation provided by Section 5.2 of the Plan shall receive
a minimum allocation of contributions and forfeitures under
this Plan equal to 3% of compensation, or if lesser, the
largest percentage of compensation allocated on behalf of any
Key Employee for the Plan Year.
Note: If the Participant also participates in the defined
contribution plan sponsored by Oppenheimer which is a money
purchase pension plan, the required minimum contribution must
be made under that money purchase pension plan.
B. For purposes of establishing Present Value (Plan Section
2.35) to compute the Top-Heavy Ratio (Plan Section 2.42), any
benefit under a defined benefit plan shall be discounted only
for mortality and interest based on the following (does not
need to be completed if Employer does not now and has never
maintained a defined benefit plan in addition to this Plan):
Interest rate [ ]%
Mortality Table [ ]
XIII.ALLOCATION LIMITATIONS
COMPLETE THIS SECTION ONLY IF YOU MAINTAIN OR EVER MAINTAINED
ANOTHER QUALIFIED PLAN IN WHICH ANY PARTICIPANT IN THIS PLAN
IS (OR WAS) A PARTICIPANT OR COULD BECOME A PARTICIPANT.
THIS SECTION MUST ALSO BE COMPLETED IF THE EMPLOYER MAINTAINS
A WELFARE BENEFIT FUND, AS DEFINED IN SECTION 419(e) OF THE
CODE, OR AN INDIVIDUAL MEDICAL ACCOUNT, AS DEFINED IN SECTION
415(1)(2) OF THE CODE, UNDER WHICH AMOUNTS ARE TREATED AS
ANNUAL ADDITIONS WITH RESPECT TO ANY PARTICIPANT IN THIS
PLAN. IF YOU MAINTAIN OTHER PLANS, FAILURE TO COMPLETE THIS
SECTION MAY ADVERSELY AFFECT THE QUALIFICATION OF THE PLANS
YOU MAINTAIN.
A. If the Participant is covered under another qualified defined
contribution plan maintained by the Employer, other than a
master or prototype plan (choose either 1 or 2) (Plan Section
6.3).
1. ( ) The provisions of Section 6.2 will apply as if the
other plan were a master or prototype plan.
-or-
2. ( ) (In the space below or on an attachment, provide the
method under which the plans will limit total annual
additions to the maximum permissible amount, and will
properly reduce any excess months, in a manner that precludes
Employer discretion.)
B. If the Participant is or has ever been a participant in a
defined benefit plan maintained by the Employer state below
or attach an explanation of the method under which the plan
involved will satisfy the 1.0 limitation in a manner that
precludes Employer discretion.
XIV. ADMINISTRATION
A. The Plan Administrator of the Plan will be (choose 1,2,3, or
4)(Plan Sections 2.33 and 15.4):
1. ( ) The Trustee
-or-
2. ( ) The Employer
NOTE: If the Trustee designated in Section XV of the
Adoption Agreement is the Sponsor's designated Trustee, it
may not be appointed as Plan Administrator.
-or-
3. ( ) An individual Plan Administrator designated by the
Employer:
Name
---------------------------------------------
Address
---------------------------------------------
4. ( ) A committee of two or more Employees designated by the
Employer:
Name
---------------------------------------------
Title
---------------------------------------------
Signature
---------------------------------------------
Name
---------------------------------------------
Title
---------------------------------------------
Signature
---------------------------------------------
Name
---------------------------------------------
Title
---------------------------------------------
Signature
---------------------------------------------
Note: If no Plan Administrator has been designated or is
serving at any time, the Employer will be deemed the Plan
Administrator. (Plan Section 15.4).
B. The Plan Administrator (including all members of a committee,
if a committee is named) is a Named Fiduciary for the Plan.
If other persons are also to be Named Fiduciaries, their
names and addresses are:
Name Address
---------------------------------------------
---------------------------------------------
---------------------------------------------
C. The Named Fiduciaries have all of the powers set forth in the
Plan. If any powers or duties are to be allocated among
them, or delegated to third parties, indicate below what the
powers or duties are and to whom they are to be delegated
(Plan Section 15.3):
--------------------------------------
--------------------------------------
--------------------------------------
XV. THE TRUSTEE
The Employer hereby appoints the following to serve as Trustee(s)
(Plan Section 2.46):
-------------------------
Name
------------------------- -------------------------
Date Address
------------------------- -------------------------
Witness Signature
-------------------------
Name
------------------------- -------------------------
Date Address
------------------------- -------------------------
Witness Signature
-------------------------
Name
------------------------- -------------------------
Date Address
------------------------- -------------------------
Witness Signature
XVI. SPONSOR DATA
A. Oppenheimer Funds Distributor, Inc.
-----------------------------------
Name of Sponsor
B. 2 World Trade Center, 34th Floor
New York, New York 10048-0023
-----------------------------------
Address
C. 212-323-0200
-----------------------------------
Telphone Number
XVII. EMPLOYER SIGNATURE
The Employer acknowledges receipt of the current prospectus
of the investment companies designated by the Employer for
its initial investments under the Plan and represents that it
has delivered a copy thereof to each Participant in the Plan,
and that it will deliver to each Participant making
contributions and each new Participant, a copy of the then
current prospectuses of such investment companies. The
Employer further represents that the information in this
Adoption Agreement shall become effective only when approved
and countersigned by the Trustee. The right to reject this
Adoption Agreement for any reason is reserved. This Adoption
Agreement must be used only in conjunction with basic plan
document #02. The undersigned Employer, or duly authorized
officer or employee, hereby certifies that the taxpayer
identification number set forth below is the Employer's
correct taxpayer identification number.
Note: If the Employer who adopts this Plan wishes to obtain
reliance that the Plan is qualified under Section 401 of the
Internal Revenue Code, application for a determination letter
should be made to the appropriate Key District Director of
Internal Revenue.
---------------------------------------------
Date Employer
---------------------------------------------
(Corporate Seal) Employer Tax I.D. No.
---------------------------------------------
By: Name Title
---------------------------------------------
Signature
---------------------------------------------
Attest Signature
<PAGE>
INVESTMENT DEALER INFORMATION
(to be completed by dealer.)
- -------------------- ------------------------------------------
Dealers Name Rep.'s Last Name First Name Middle Initial
- -------------------- ------------------------------------------
Dealer Head Office Rep.s' Brand Office Address: No. and Street
Address: No. and Street
- --------------------- ------------------------------------------
City State Zip Code City State Zip Code
- -------------------- ------------------------------------------
Oppenheimer Dealer No. Reps. Office Telephone # Rep's A.E. No.
<PAGE>
Document No. 2
MONEY PURCHASE PENSION PLAN
ADOPTION AGREEMENT
FOR A PROTOTYPE NON-STANDARDIZED DEFINED CONTRIBUTION PLAN
SPONSORED BY OPPENHEIMER FUNDS DISTRIBUTOR, INC.
Adoption Agreement #002
This is the Adoption Agreement for defined contribution plan #002 of
basic plan document #02, which is a combined prototype profit
sharing/money purchase pension plan. This Adoption Agreement may be
adopted either singly or in combination with defined contribution plan
#001, prototype profit sharing plan.
NOTE: Failure to properly fill out this Adoption Agreement may
result in disqualification of the Plan. Before executing
this Adoption Agreement, the Employer should consult with a
tax advisor or attorney.
- ------------------------------------------------------------
The Employer hereby establishes a Money Purchase Pension Plan and a
trust upon the respective terms and conditions contained in the
prototype defined contribution plan (the "Plan") and the Trust
Agreement annexed hereto and appoints as Trustee of such trust the
person(s) who have executed this Adoption Agreement evidencing their
acceptance of such appoint. The Plan, the Trust Agreement, and the
Custody Agreement if applicable, shall be supplemented and modified by
the terms and conditions contained in this Adoption Agreement and shall
be effective on the Effective Date.
The Sponsor will inform the Employer of any amendments to the Plan or
the discontinuance or abandonment of the Plan.
I. EMPLOYER DATA
A. ---------------------------------------------
Name of Employer
B. ---------------------------------------------
Address
C. ---------------------------------------------
Telephone Number
D. ---------------------------------------------
Employer's Taxable Year End
E. ---------------------------------------------
Plan Year End
F. The Employer is:
( ) a corporate entity
( ) a non-corporate entity
( ) a corporation electing to be taxed under Subchapter S
G. -------------------------------------------------------
Effective Date (Should be the first day of a Plan Year)
H. If this is an Amendment of an existing plan, complete the
following:
-------------------------------------------------------
Effective Date of Amendment
(Should be first day of Plan Year)
-------------------------------------------------------
Name of Prior Plan
-------------------------------------------------------
Effective Date of Prior Plan
I. -------------------------------------------------------
Limitation Year, if different from E. above.
II. ELIGIBILITY
A. Employees shall be eligible to participate in the Plan upon
completion of the eligibility requirements (Complete 1 and
2)(Plan Section 3.1):
Years of Service. The Employer must complete (check one box)
( ) One Year of Service.
( ) [ ] Years of Service. (You can require less than or
more than one Year of Service, but not more than two
(2). If you select more than one Year of Service, the
Employee must be 100 percent vested once he becomes
eligible, and you must select vesting schedule Number 2
in Section VIII of this Adoption Agreement. If the Year
of Service is or includes a fractional year, an Employee
will not be required to complete any specified number of
Hours of Service (Section III, A of this Adoption
Agreement) to received credit for such fractional year.
B. Age. The Employee has attained age [ ] (not greater than age
21). All Employees will be eligible to participate in the
Plan with the exception of the following (Plan Section 3.1):
( ) Union Employees. Employees included in a unit covered by
a collective bargaining agreement between the Employer
and Employee representatives (as defined in Section
3.1(b)(i) of the Plan), if retirement benefits were the
subject of good faith bargaining and the requirements of
Section 3.1(b)(i) of the Plan are satisfied.
( ) Non-resident Aliens. Employees who are non-resident
aliens and who receive no earned income from the
Employer which constitutes income from sources within
the United States.
For purposes of this Section II, the term "Employee" includes
all employees of this Employer or any employer aggregated
with this Employer under Sections 414(b), (c), (m), or (o) of
the Code and individuals who are Leased Employees required to
be considered Employees of any such employer under Section
414(n) or (o) of the Code.
III. CREDITED SERVICE
A. The Plan provides that a Year of Service requires at least
1,000 hours during any Plan Year. If a lower number of hours
is desired, state the number here:
[ ] (Plan Section 2.49)
B. The Plan permits Hours of Service to be determined by the use
of service equivalencies under one of the methods selected
below (choose one method) (Plan Section 2.21):
1. ( ) On the basis of actual hours for which an Employee
is paid or entitled to payment.
2. ( ) On the basis of days worked. An Employee will be
credited with ten (10) Hours of Service if under
Section 2.21 of the Plan such Employee would be
credited with at least one (1) Hour of Service
during the day.
3. ( ) On the basis of weeks worked. An Employee will be
credited with forty-five (45) Hours of Service if
under Section 2.21 of the Plan such Employee would
be credited with a least one (1) Hour of Service
during the week.
4. ( ) On the basis of semi-monthly payroll periods. An
Employee will be credited with ninety-five (95)
Hours of Service if under Section 2.21 of the Plan
such Employee would be credited with a least one
(1) Hour of Service during the semi-monthly payroll
period.
- or-
5. ( ) On the basis of months worked. An Employee will be
credited with one hundred ninety (190) Hours of
Service if under Section 2.21 of the Plan such
Employee would be credited with at least one (1)
Hour of Service during the month.
C. Service with predecessor employer (choose 1 or 2) (Plan
Sections 3.3 and 8.5):
1. ( ) No credit will be given for service with
predecessor employer.
2. ( ) Credit will be given for service with the following
predecessor employer(s):
------------------------------
------------------------------
Note: The Plan provides that if this is a continuation of
a predecessor plan, service under the predecessor
plan must be counted.
IV. COMPENSATION
A. For purposes of the Plan, Compensation means all of each
Participant's (check one):
( ) Section 3401(a) Wages: Wages as defined in Code Section
3401(a) for purposes of income tax withholding at the
source, but determined without regard to any rules that
limit the remuneration included in wages that are based
on the nature and location of the employment or the
services performed.
( ) 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 with the Employer maintaining
the Plan to the extent that the amounts are includable
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,
reimbursements, and expense allowances), and excluding
the following:
(1) Employer contributions to a Plan of deferred
compensation which are not includable 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 Employer, or any distributions from a
Plan of deferred compensation;
(2) Amounts realized from the exercise of a non-
qualified stock option, or when restricted stock (or
property) held by the Employee either becomes freely
transferable or is no longer subject to a substantial
risk of forfeiture;
(3) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
(4) 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 described in Section 403(b) of the Code
(whether or not the amounts are actually excludable form
the gross income of the Employee).
For any self-employed individual, compensation will mean
earned income.
B. Effective [ ], Compensation:
( ) shall include
( ) shall not include
Employer Contributions made pursuant to a salary reduction
agreement which are not includable in the gross income of the
Employee under Sections 125, 402(a)(8), 402(h) or 403(b) of
the Code. (The effective date of the election in this
paragraph shall not be earlier than the first day of the
first Plan Year beginning after 1986.)
V. CONTRIBUTIONS
A. Formulas (Choose 1 or 2)(Plan Section 4.1(a))
1. ( ) Plan not integrated with Social Security.
The Employer will contribute [ ]% of compensation for
each Participant (not to exceed 25%).
2. ( ) Plan integrated with Social Security (complete (a)
and (b))
(a) The Employer shall contribute [ ]% (the "Base
Contribution Percentage") of the Compensation of each
Participant up to the Integration Level, but not less
than 3%, and
(b) [ ]%, which shall be not less than 3% and shall not
exceed the Base Contribution Percentage by more than the
lesser of (1) the Base Contribution Percentage, or money
purchase maximum disparity rate, of such Participant's
Compensation in excess of the integration Level,
provided, that the contribution on behalf of each
Participant shall not exceed the lesser of $30,000 or
25% of the Participant's Compensation for the Plan Year.
B. The Integration Level is equal to:
( ) Taxable Wage base
( ) $[ ] (a dollar amount less than the Taxable Wage
Base)
( ) [ ]% of Taxable Wage Base (not to exceed 100%).
C. The money purchase maximum disparity rate is equal to the
lesser of:
1. 5.7%
2. The applicable percentage determined in accordance with
the following table:
If the integration level:
the applicable
is more than but not more than percentage is:
$0 X* 5.7%
X* 0f TWB 80% of TWB 4.3%
80% of TWB Y** 5.4%
*X = the greater of $10,000 or 20 percent of TWB
**Y = any amount more than 80% of the TWB but less than
100% of the TWB
TWB = Taxable Wage Base
If the integration level used is equal to the Taxable Wage
Base, the applicable percentage is 5.7%.
If you maintain any other plan in addition to this Plan, only
one plan may be integrated with Social Security.
C. Contribution Eligibility (Choose 1 or 2)(Plan Section
4.1(c)).
1. ( ) The plan provides that a Participant will share in
Employer Contributions for the Plan Year only is he
(i) retires, dies, or becomes totally and
permanently disabled, or (ii) completes 501 Hours
of Service and is employed on the last day in such
year. If a lesser number of hours is desired,
state the number here:[ ]
-or-
2. ( ) A Participant will share in Employer Contributions
for the Plan Year in which he terminates employment
prior to the end of such year if he completes 501
Hours of Service in such year. If a lesser number
of hours is desired, state the number here:
[ ].
VI. DISTRIBUTIONS
A. Normal Retirement Age is (choose 1 and/or 2)(Plan Section
2.27):
1. ( ) The date a Participant reaches age [ ] (Not more
than 65 or less than 55). If no age is indicated,
normal retirement age shall be 65.
-or-
2. ( ) The later of age [ ] (not more than 65) or the [
](not more than 5th) anniversary of the day the
Participant commenced participation in the Plan.
The participation commencement date is the first
day of the first plan year in which the Participant
commenced participation in the Plan.
NOTE: If, for Plan Years beginning before January
1, 1988, Normal Retirement Age was determined with
reference to the anniversary date (more than 5 but
not to exceed 10 years), the anniversary date for
Participants who first commenced participation
under the Plan before the first Plan Year beginning
on or after January 1, 1988, shall be the earlier
of (A) the 10th anniversary of the date the
Participant commenced participation in the Plan (or
such anniversary as had been elected by the
Employer, if less than 10), or (B) the 5th
anniversary of the first day of the first Plan Year
beginning on or after January 1, 1988.
B. Early Retirement (choose 1 or 2)(Plan Section 9.1, 10.4)
1. ( ) Early Retirement Date is the first day of the month
coincident with or next following the date upon
which a Participant reaches age [ ] (not less than
55) and completes [ ] years of service (not more
than 15).
-or-
2. ( ) Early Retirement will not be permitted under the
plan.
VII. OPTIONAL FEATURES
A. Loans (Choose 1 or 2)(Plan Article 13).
1. ( ) The Plan permits loans to Participants.
-or-
2. ( ) The Plan does not permit loans to Participants.
Note: The Plan may not permit loans to Owner-Employees of
non-corporate entities or to Shareholder-Employees
of Subchapter S corporations. If Plan loans are
permitted, the Trustee designated in Section XIV of
this Adoption Agreement may not be the Sponsor's
designated Trustee.
B. Insurance (Choose 1 or 2)(Plan Article 14).
1. ( ) The Plan permits Participants to designate a
portion of their Account to purchase life insurance
contracts. (MUST NOT be selected if Sponsor's
designated Trustee is appointed as Trustee).
The percentage of the Employer Contributions which may be
applied to purchase life insurance contracts shall be equal
to [ %].
2. ( ) The Plan does not permit Participants to designate
a portion of their Account to purchase life
insurance contracts.
Note: Section 14.5 of the Plan provides certain limits on
the amount of Employer Contributions that can be
applied to purchase life insurance contracts.
C. Annuities (Plan Section 11.9(a)(iv), Article 9).
The Plan permits benefits to be distributed in the form of a
non-transferable annuity contract. In addition, if a
Participant is married, the Plan must provide a qualified
joint and survivor annuity and a pre-retirement survivor
annuity. Under any of these options, the survivor annuity
will be [ ]% (not less than 50 nor greater than 100) of the
amount of the annuity payable during the joint lives of the
Participant and the spouse. If no amount is designated, the
survivor annuity will be 50%.
VII. VESTING
A. Employer contributions will become vested if the Participant
terminates employment for any reasons other than retirement,
death, or disability pursuant to the following schedule
(Choose 1, 2, 3 or 4)(Plan Section 8.3):
1. ( )
Years of Vested
Service Percentage
1 year 0%
2 years 20%
3 years 40%
4 years 60%
5 years 80%
6 or more years 100%
-or-
2. ( ) 100 percent vesting immediately after satisfaction
of the eligibility requirements.
Note: If a service requirement greater than 1 year is
chosen for eligibility in Section II.A.1 of this
Adoption Agreement, vesting schedule Number 2 must
be chosen.
3. ( ) 100 percent vesting after [ ] (not to exceed 3)
Years of Service.
4. ( )
Years of Vested
Service Percentage
1 year [ ]%
2 years [ ]% (not less than 20)
3 years [ ]% (not less than 40)
4 years [ ]% (not less than 60)
5 years [ ]% (not less than 80)
6 years [ ]% (not less than 100)
Note: If vesting schedule Number 3 is chosen, the
vesting percentages inserted must be at least
as rapid as one of the above vesting schedule
at all points in time.
IX. INVESTMENT CHOICES
A. ( ) Investment of Trust assets may be selected only from
Shares or other investment offered by the Sponsor.
B. ( ) [ ]% (not less than 25%) of the Trust assets must be
invested in Shares or other investments offered by the
Sponsor with the remainder in such other investments as
may be acceptable within the discretion of the Trustee.
C. ( ) 50% of the Trust assets must be invested in Shares or
investments offered by the Sponsor with the remainder in
such other investments as may be acceptable within the
discretion of the Trustee.
D. ( ) 25% of the Trust assets must be invested in Shares or
investments offered by the Sponsor with the remainder of
such other investments as may be acceptable within the
discretion of the Trustee.
The Sponsor may impose additional limitations relating
to the type of permissible investments in the Trust
(Plan section 7.3).
X. INVESTMENT AUTHORITY
Contributions to the Plan shall be invested by the Trustee in
accordance with instructions of the Employer or Plan Administrator
except that (Choose A, B, or C)(Plan Section 7.2):
A. ( ) No exceptions; the Employer or Plan Administrator shall
make all investment selections.
-or-
B. ( ) The Employer delegates all investment responsibility to
the Trustee. (MUST NOT be selected if Sponsor's
designated trustee is appointed as Trustee).
C. ( ) Each Participant ( ) may, ( ) shall direct that
( ) (1) amounts voluntarily contributed by such Participant
pursuant to Section 4.3 of the Plan, and rollover
contributions and trustee transfers pursuant to Section 4.4
of the Plan, if any,
-and/or-
( ) (2) Employer Contributions on the Participant's behalf,
shall be invested in specified investments offered by the
Sponsor. Participants may make or change such directions by
giving written notice to the Plan Administrator. Reasonable
restrictions may be imposed on this privilege by the plan
Administrator of the Sponsor for purposes of administrative
convenience.
XI. TOP-HEAVY PROVISIONS
A. Participants who are eligible to receive the minimum
allocation provided by Section 5.2 of the Plan shall receive
a minimum allocation of contributions and forfeitures under
this Plan equal to 3% of compensation, or if lesser, the
largest percentage of compensation allocated on behalf of any
Key Employee for the Plan Year.
Note: If the Participant also participates in the defined
contribution plan sponsored by Oppenheimer which is a
profit sharing plan, the required minimum contribution
must be made under this Plan.
B. For purposes of establishing Present Value (Plan Section
2.35) to compute the Top-Heavy Ratio (Plan Section 2.42), any
benefit under a defined benefit plan shall be discounted only
for mortality and interest based on the following (does not
need to be completed if Employer does not now and has never
maintained a defined benefit plan in addition to this Plan):
Interest rate [ ]%
Mortality Table [ ]
XII. ALLOCATION LIMITATIONS
COMPLETE THIS SECTION ONLY IF YOU MAINTAIN OR EVER MAINTAINED
ANOTHER QUALIFIED PLAN IN WHICH ANY PARTICIPANT IN THIS PLAN
IS (OR WAS) A PARTICIPANT OR COULD BECOME A PARTICIPANT.
THIS SECTION MUST ALSO BE COMPLETED IF THE EMPLOYER MAINTAINS
A WELFARE BENEFIT FUND, AS DEFINED IN SECTION 419(e) OF THE
CODE, OR AN INDIVIDUAL MEDICAL ACCOUNT, AS DEFINED IN SECTION
415(l)(2) OF THE CODE, UNDER WHICH AMOUNTS ARE TREATED AS
ANNUAL ADDITIONS WITH RESPECT TO ANY PARTICIPANT IN THIS
PLAN. IF YOU MAINTAIN OTHER PLANS, FAILURE TO COMPLETE THIS
SECTION MAY ADVERSELY AFFECT THE QUALIFICATION OF THE PLANS
YOU MAINTAIN.
A. If the Participant is covered under another qualified defined
contribution plan maintained by the Employer, other than a
master or prototype plan (choose either 1 or 2)(Plan Section
6.3):
1. ( ) The provisions of Section 6.2 will apply as if the
other plan were a master or prototype plan.
-or-
2. ( ) (In the space below or on an attachment, provide
the method under which the plans will limit total
annual additions to the maximum permissible amount,
and will properly reduce an excess amounts in a
manner that precludes Employer discretion.)
B. If the participant is or has ever been a participant in a
defined benefit plan maintained by the Employer, state below
or attach an explanation of the method under which the plan
involved will satisfy the 1.0 limitation in a manner that
precludes Employer discretion.
C. For allocation purposes, a Limitation Year shall be the 12
calendar month period ending on [ ]; if no year is chosen
the Limitation Year shall be the Plan Year.
XIII.ADMINISTRATION
A. The Plan Administrator of the Plan will be (choose 1, 2, 3 or
4)(Plan Sections 2.33 and 15.4):
1. ( ) The Trustee
-or-
2. ( ) The Employer
NOTE: If the Trustee designated in Section XIV of the Adoption
Agreement is the Sponsor's designated Trustee, it may not be
appointed as Plan Administrator.
-or-
3. ( ) An individual Plan Administrator designated by the
Employer:
Name---------------------------------------------
--------------------------------------------------
Address-------------------------------------------
--------------------------------------------------
-or-
4. ( ) A committee or two or more Employees designated by the
Employer:
Name
--------------------------------------------------
Title
--------------------------------------------------
Signature
--------------------------------------------------
Name
--------------------------------------------------
Title
--------------------------------------------------
Signature
--------------------------------------------------
Name
--------------------------------------------------
Title
--------------------------------------------------
Signature
--------------------------------------------------
Note: If no Plan Administrator has been designated or is
serving at any time, the Employer will be deemed the
Plan Administrator. (Plan Section 15.4).
B. The Plan Administrator (including all members of a committee,
if a committee is named) is a Named Fiduciary for the Plan.
If other persons are also to be Named Fiduciaries, their
names and addresses are:
Name
----------------------------------------
Address
----------------------------------------
Name
----------------------------------------
Address
----------------------------------------
Name
----------------------------------------
Address
----------------------------------------
C. The named Fiduciaries have all of the powers set forth in the
Plan. If any powers or duties are to be allocated among
them, or delegated to third parties, indicate below what the
powers or duties are and to whom they are to be delegated
(Plan Section 15.3):
----------------------------------------
----------------------------------------
XIV. THE TRUSTEE
A. The Employer hereby appoints the following to serve as
Trustee(s)(Plan Section 2.46):
-----------------------------
Name
- ----------------------------- -----------------------------
Date Address
- ----------------------------- -----------------------------
Witness Signature
-----------------------------
Name
- ----------------------------- -----------------------------
Date Address
- ----------------------------- -----------------------------
Witness Signature
XV. SPONSOR DATA
A. Oppenheimer Funds Distributor, Inc.
-----------------------------------
Name of Sponsor
B. 2 World Trade Center, 34th Floor
New York, New York 10048-0023
-----------------------------------
Address
C. 212-323-0200
-----------------------------------
Telephone Number
XVI. EMPLOYER SIGNATURE
The Employer acknowledges receipt of the current prospectus of the
investment companies designated by the Employer for its initial
investments under the Plan and represents that it has delivered a
copy thereof to each Participant in the plan, and that it will
deliver to each Participant making contributions and each new
Participant, a copy of the then current prospectuses of such
investment companies. The Employer further represents that the
information in this Adoption Agreement shall become effective only
when approved and countersigned by the Trustee. The right to
reject this Adoption Agreement for any reason is reserved. This
Adoption Agreement must be used only in conjunction with basic
plan document #02. The undersigned Employer, or duly authorized
officer or employee, hereby certifies that the taxpayer
identification number set forth below is the Employer's correct
taxpayer identification number.
Note: If the Employer who adopts this Plan wishes to obtain
reliance that the plan is qualified under Section 401 of the
internal Revenue Code, application for a determination letter
should be made to the appropriate Key District Director of
Internal Revenue.
---------------------------------------------
Date Employer
---------------------------------------------
(Corporate Seal) Employer Tax I.D. No.
---------------------------------------------
By: Name Title
---------------------------------------------
Signature
---------------------------------------------
Attest Signature
INVESTMENT DEALER INFORMATION
(to be completed by Dealer.)
- ------------------------------ ------------------------------
Dealers Name Rep's Last Name First Name M.I.
- ------------------------------ ------------------------------Dealer
Head Office Add.No&Street Rep's Branch Off.Add.No &Street
- ------------------------------ ------------------------------
City State Zip Code City State Zip Code
- ------------------------------ ------------------------------
Oppenheimer Dealer No. Rep's Off.Tel.No. Rep's AE No.
<PAGE>
BASIC PLAN DOCUMENT (No. 02)
(Non-Standardized)
ARTICLE 1
GENERAL
1.1 Purpose. The Employer hereby establishes this Plan to provide
retirement, death and disability benefits for eligible employees and their
beneficiaries. This Plan is a nonstandardized prototype defined
contribution plan and is designed to permit adoption of profit-sharing
provisions, money purchase pension provisions, or both. The provisions
herein and the selections made by the Employer by execution of the money
purchase pension or profit-sharing Adoption Agreement or Agreements, shall
constitute the Plan. It is intended that the Plan and Trust qualify
under, and meet the applicable requirements of, Sections 401 and 501 of
the Internal Revenue Code of 1986, as amended, as well as the provisions
of the Employee Retirement Income Security Act of 1974, as amended.
1.2 Trust. The Employer has simultaneously adopted a Trust to
receive, invest, and distribute funds in accordance with the Plan.
ARTICLE 2
DEFINITIONS
2.1 Account. The aggregate of the individual bookkeeping
subaccounts established for each Participant, as provided in Section 5.1.
2.2 Adoption Agreement. The written agreement or agreements of the
Employer and the Trustee by which the Employer establishes this Plan and
adopts the Trust Agreement forming a part hereof, as the same may be
amended from time to time. The Adoption Agreement contains all the
options that may be selected by the Employer. The information set forth
in the Adoption Agreement executed by the Employer shall be deemed to be
a part of this Plan as if set forth in full herein.
2.3 Affiliated Employers. The Employer and any corporation which
is a member of a controlled group of corporations (as defined in Section
414(b) of the Code) which includes the Employer, any trade or business
(whether or not incorporated) which is under common control (as defined
in Section 414(c) of the Code) with the Employer, any service organization
(whether or not incorporated) which is a member of an affiliated service
group (as defined in Section 414(m) of the Code) which includes the
Employer or any other employer required to be aggregated with such
Employer under Section 414(m) or 414(o) of the Code.
2.4 Beneficiary. The person or persons (natural or otherwise)
designated by a Participant in accordance with Section 11.6 to receive any
undistributed amounts credited to the Participant's Account under the Plan
at the time of the Participant's death.
2.5 Break in Service. An Eligibility Computation Period or Vesting
Computation Period in which an Employee fails to complete more than 500
Hours of Service with the Affiliated Employers.
2.6 Code. The Internal Revenue Code of 1986, as amended from time
to time, or any successor statute.
2.7 Compensation. Compensation shall be as elected by the Employer
in the Adoption Agreement. In the case of a Self-Employed Individual,
Compensation includes the Individual's Earned Income from Affiliated
Employers. For Plan Years beginning after December 31, 1988, annual
Compensation taken into account under the Plan for any Plan Year shall not
exceed $200,000. This limitation shall be adjusted 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 Plan Years beginning in such calendar year and the first adjustment
to the $200,000 limitation takes effect on January 1, 1990. If a Plan
determines Compensation on a period of time that contains fewer than 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.
In determining the Compensation of a Participant for purposes
of this limitation, the rules of Section 414(q)(6) of the Code shall
apply, except 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 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 Integration Level if the 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.
Notwithstanding the above, if elected by the Employer in the
Adoption Agreement, Compensation shall include any amount which is
contributed by the Employer pursuant to a salary reduction agreement and
which is not includible in the gross income of the Employee under Sections
125, 402(a)(8), 402(h) or 403 (b) of the Code.
2.8 Custodian. The custodian, if any, designated in the Adoption
Agreement.
2.9 Determination Date. With respect to 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 Plan Year.
2.10 Early Retirement Date. The first day of the month coincident
with or next following the date upon which the Participant satisfies the
early retirement age and service requirements in the Adoption Agreement;
provided, however, such requirements may not be less than age 55, nor more
than 15 Years of Service.
2.11 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 individual are a material income-producing
factor. Net earnings will be determined without regard to items not
included in gross income and the deductions allocable to such items. Net
earnings are reduced by contributions to a qualified plan to the extent
deductible under Section 404 of the Code. Net earnings shall be
determined with regard to the deduction allowed to the Employer by Section
164(f) of the Code for taxable years beginning after December 31, 1989.
2.12 Effective Date. The first day of the first Plan Year for which
the Plan is effective as specified in the Adoption Agreement.
2.13 Eligibility Computation Period. For purposes of determining
Years of Service and Breaks in Service for eligibility to participate, the
initial Eligibility Computation Period shall be the twelve (12)
consecutive month period beginning with the day the Employee first
performs an Hour of Service. The succeeding Eligibility Computation
Periods commence with the first Plan Year which commences after the first
day of the Employee's initial Eligibility Computation Period regardless
of whether the employee is entitled to be credited with a Year of Service
during the initial Eligibility Computation Period. An Employee who is
credited with a Year of Service in both the initial Eligibility
Computation Period and the first Plan Year which commences after the first
day of the Employee's initial eligibility computation period will be
credited with two Years of Service for purposes of eligibility to
participate.
2.14 Employee. Any person, including a Self-Employed Individual,
who is employed by any Affiliated Employers. Any Leased Employee shall
be treated as an Employee. However, contributions or benefits provided
by the leasing organization which are attributable to services performed
for the Employer shall be treated as provided by the Employer.
Notwithstanding the above, a Leased Employee will not be considered an
Employee if: (i) such Leased Employee is covered by a money purchase
pension plan providing: (1) a non-integrated Employer contribution rate
of at least ten percent (10%) of Compensation, as defined in Section 2.7
of the Plan, but including amounts contributed 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, (2) immediate participation, and (3) full and immediate vesting
and (ii) leased Employees do not constitute more than twenty percent (20%)
of the recipient's non-highly compensated workforce.
2.15 Employer. The corporation, proprietorship, partnership or
other organization which adopts the Plan by execution of an Adoption
Agreement.
2.16 Employer Contributions. The contribution of the Employer to
the Plan and Trust as set forth in Article IV and the Adoption Agreement.
2.17 Entry Dates. The Effective Date shall be the first Entry Date.
Thereafter the Entry Dates shall be the first day of each Plan Year and
the first day of the seventh month of each Plan Year.
2.18 ERISA. The Employee Retirement Income Security Act of 1974,
as amended.
2.19 Excess Compensation. With respect to any Plan Year, the amount
of the Participant's Compensation which exceeds the Integration Level.
2.20 Highly Compensated Employee. An Employee described in Section
414(q) of the Code.
2.21 Hour of Service.
(a) Each hour for which an Employee is paid, or entitled to
payment for the performance of duties for the Employer. These hours shall
be credited to the Employee only for the computation period or periods in
which the duties are performed.
(b) Each hour for which an Employee is paid, or entitled to
payment, by the Employer on account of a period of time 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. No
more than 501 Hours of Service shall be credited under this paragraph to
an Employee on account of any single, continuous period during which the
Employee performs no duties (whether or not such period occurs in a single
computation period) and no credit shall be given for hours for which no
duties are performed but for which payment by the Employer is made or due
under a plan maintained solely for the purpose of complying with
applicable workmen's compensation, unemployment compensation, or
disability insurance laws or where payment solely reimburses an Employee
for medical or medically related expenses incurred by the Employee. Hours
under this paragraph will be calculated and credited pursuant to Section
2530.200b-2 of the Department of Labor Regulations which are incorporated
herein by this reference.
(c) Each hour for which back pay, irrespective of mitigation
of damages, is either awarded or agreed to by the Employer. The same
Hours of Service shall not be credited both under paragraph (a) or
paragraph (b), as the case may be, and under this paragraph (c). These
hours shall be credited to the Employee for the computation period or
periods to which the award or agreement pertains rather than the
computation period in which the award, agreement, or payment is made.
(d) Solely for purposes of determining whether an employee has
a Break in Service, Hour of Service shall also include an uncompensated
authorized leave of absence not in excess of two (2) years, or military
leave while the Employee's reemployment rights are protected by law or
such additional or other periods as granted by the Employer as military
leave (credited on the basis of forty (40) Hours of Service per each week
or either (8) Hours of Service per working day), provided the Employee
returns to employment at the end of his leave of absence or within ninety
(90) days of the end of his military leave, whichever is applicable.
(e) Hours of Service will be credited for employment with any
of the Affiliated Employers. Hours of Service will also be credited for
services rendered to the Affiliated Employers by any individual considered
an Employee for purposes of this Plan under Section 414(n) or (o) of the
Code.
(f) Solely for purposes of determining whether an Employee has
a Break in Service, Hours of Service shall also include absence from work
for maternity or paternity reasons if the absence begins on or after the
first day of the first Plan Year beginning after 1984. During this
absence, the Employee shall be credited with the Hours of Service which
would have been credited but for the absence, or, if such hours cannot be
determined, with eight hours per day. An absence from work for maternity
or paternity reasons means an absence:
(i) by reason of the pregnancy of an Employee,
(ii) by reason of the birth of a child of the Employee,
(iii) by reason of the placement of a child with the Employee
in connection with adoption or
(iv) for purposes of caring for such a child for a period
immediately following such birth or placement.
These Hours of Service shall be credited in the computation period
following the computation period in which the absence begins, except as
necessary to prevent a Break in Service in the computation period in which
the absence begins. However, no more than 501 Hours of Service will be
credited for purposes of any such maternity or paternity absence from
work.
(g) The Employer may elect to compute Hours of Service by the
use of one of the service equivalencies in the Adoption Agreement. Only
one method may be selected. If selected, the service equivalency must be
applied to all Employees covered under the Plan.
(h) If the Employer amends the method of crediting service from
the elapsed time method described in 1.410(a)-7 of the Treasury
Regulations to the Hours of Service computation method by the adoption of
this Plan, or an Employee transfers from a plan under which service is
determined on the basis of elapsed time, the following rules shall apply
for purposes of determining the Employee's service under this Plan up to
the time of amendment or transfer:
(i) the Employee shall receive credit, as of the date of
amendment or transfer, for a number of Years of Service equal to the
number of one-year periods of service credited to the Employee as of the
date of the amendment or transfer, and
(ii) the Employee shall receive credit in the applicable
computation period which includes the date of amendment or transfer, for
a number of Hours of Service determined by applying the weekly service
equivalency specified in paragraph (g) to any fractional part of a year
credited to the Employee under this paragraph (h) as of the date of
amendment or transfer. The use of the weekly service equivalency shall
apply to all Employees who formerly were credited with service under the
elapsed time method.
2.22 Integration Level. The Taxable Wage Base or such lesser amount
elected by the Employer in the Adoption Agreement, which level shall be
the amount of Compensation at which Employer Contributions begin to be
integrated with Social Security.
2.23 Key Employee. Any Employee, former Employee, or Beneficiary
who, at any time during the determination period, is or was:
(a) An Officer of any of the Affiliated Employers if such
Officer has total annual compensation from the affiliated Employers in
excess of fifty percent (50%) of the dollar limitation under Section
415(b)(1)(A) of the Code; or
(b) An Employee or Beneficiary owning (or considered as owning
within the meaning of Section 318 of the Code) one of the ten largest
interests in any of the Affiliated Employers if such individual's
Compensation exceeds one hundred percent (100%) of the dollar limitation
under Section 415(c)(1)(A) of the Code; or
(c) A five percent (5%) shareholder or owner of the Affiliated
Employers; or
(d) A one percent (1%) shareholder or owner of any of the
Affiliated Employers, if such Employee has total annual compensation from
the Affiliated Employers of more than $150,000.
The determination of who is a Key Employee shall be made in
accordance with the rules and regulations under Section 416(i)(1) of the
Code. The determination period for purposes of this Section 2.23 is the
Plan Year containing the determination date and the four preceding Plan
Years.
Annual compensation for purposes of this Section shall mean
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.
2.24 Leased Employee. Any person (other than an Employee of any of
the Affiliated Employers) who, pursuant to an agreement between any of the
Affiliated Employers and any other person ("leasing organization"), has
performed service for any of the Affiliated Employers (or for any of the
Affiliated Employers 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 year and such services are of a type historically
performed by employees in the Employer's business field. The
determination of whether a person is a Leased Employee will be made
pursuant to Section 414(n) of the Code.
2.25 Net Profits. Current and accumulated earnings of the Employer,
before federal and state taxes and contributions to this Plan and any
other qualified plan, as computed by the Employer's accountants, in
accordance with generally accepted accounting principles.
2.26 Non-Key Employee. Any Employee or former Employee who is not
a Key Employee. In addition, any Beneficiary of a Non-Key Employee shall
be treated as a Non-Key Employee.
2.27 Normal Retirement Age. The age selected in the Adoption
Agreement, but not less than age 55. If the Employer enforces a mandatory
retirement age, the Normal Retirement Age is the lesser of that mandatory
age or the age specified in the Adoption Agreement.
2.28 Normal Retirement Date. The first day of the month coincident
with or next following the date upon which a Participant attains Normal
Retirement Age.
2.29 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 a partnership.
2.30 Participant. A person who has met the eligibility requirements
of Section 3.1 and whose Account hereunder has been neither completely
forfeited nor completely distributed.
2.31 Permissive Aggregation Group. The Required Aggregation Group
of plans plus any other plan or plans of the Affiliated Employers which,
when considered as a group with the Required Aggregation Group, would
continue to satisfy the requirements of Sections 401(a)(4) and 410 of the
Code.
2.32 Plan. The prototype defined contribution profit sharing and
money purchase pension plan provided under this basic plan document.
References to the Plan shall refer to the profit sharing provisions, the
money purchase pension provisions, or both, as the context may require.
2.33 Plan Administrator. The person, persons, or entity appointed
by the Employer pursuant to Article 15 to manage and administer the Plan.
2.34 Plan Year. The twelve (12) consecutive month period designated
by the Employer in the Adoption Agreement.
2.35 Present Value. The discounted value of the accrued benefit
under a defined benefit plan used to determine Top-Heavy Plan status.
Present Value shall be based only on the interest and mortality rates
specified in the Adoption Agreement.
2.36 Required Aggregation Group.
(a) 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), and
(b) any other qualified plan of the Employer which enables a
plan described in (a) to meet the requirements of Sections 401(a)(4) or
410 of the Code.
2.37 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 an individual who would have had earned income for the
taxable year but for the fact that the trade or business had no Net
Profits for the taxable year.
2.38 Shares. Shares of stock in any regulated investment company
registered under the Investment Company Act of 1940 which is made
available for investment purposes as an investment option under this Plan.
2.39 Sponsor. Oppenheimer Funds Distributor, Inc. (formerly known
as Oppenheimer Fund Management, Inc.)
2.40 Taxable Wage Base. The maximum amount of earnings which may
be considered wages for such year under Section 3121(a)(1) of the Code in
effect as of the beginning of the Plan Year.
2.41 Top-Heavy Plan. For any Plan Year beginning after December 31,
1983, this Plan is Top-Heavy if any of the following conditions exist:
(a) If the Top-Heavy Ratio for this Plan exceeds 60 percent and
this Plan is not part of any Required Aggregation Group or Permissive
Aggregation Group of plans.
(b) If this Plan is 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 (60%).
(c) If this 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 (60%).
2.42 Top-Heavy Ratio.
(a) If the Affiliated Employers maintain one or more defined
contribution plans (including any Simplified Employee Pension Plan) and
have never maintained any defined benefit plan which during the five (5)
year period ending on the Determination Date has or had account 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 (including any part of any Account balance distributed
in the five (5) year period ending on the Determination Date), and the
denominator of which is the sum of all Account balances (including any
part of any Account balance distributed in the five (5) year period ending
on the Determination Date) of all Participants as of the Determination
Date 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 regulations
thereunder. Both the numerator and the denominator shall be computed in
accordance with Section 416 of the Code and the regulations thereunder.
(b) If the Affiliated Employers maintain one or more defined
contribution plans (including any Simplified Employee Pension Plan) and
maintain or have maintained one or more defined benefit plans which during
the five (5) year period ending on the Determination Date has or has had
any accrued benefits, the Top-Heavy Ratio for any Required or Permissive
Aggregation Group is a fraction, the numerator of which is the sum of
Account balances under the defined contribution plans for all Key
Employees determined in accordance with paragraph (a) above, and the
Present Value of accrued benefits under the defined benefit plans for all
Key Employees as of the Determination Date, and the denominator of which
is the sum of the account balances under the aggregated defined
contribution plans for all Participants as of the Determination Date and
the Present Value of accrued benefits under the defined benefit plans for
all Participants as of the Determination Date, all determined in
accordance with Section 416 of the Code and the regulations thereunder.
The accrued benefit in a defined benefit plan with respect to both the
numerator and the denominator of the Top-Heavy Ratio are increased for any
distribution of an Account balance or an accrued benefit made in the five
(5) year period ending on the Determination Date, and shall be adjusted
for any contribution due but unpaid as of the Determination Date.
(c) For the purposes of (a) and (b) 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
twelve (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 who is not a Key Employee
but who was a Key Employee in a prior year 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. For
Plan Years beginning after 1984, both the numerator and denominator of the
Top-Heavy Ratio shall be adjusted to exclude the account balance or
accrued benefit of any individual who has not been credited with at least
one Hour of Service with any Affiliated Employer in the 5-year period
ending on the Determination Date.
The accrued benefit of a Participant other than a Key Employee
shall be determined under (i) the method, if any, that uniformly applies
for accrual purposes under all defined benefit plans maintained by the
Employer, or (ii) 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.
2.43 Total and Permanent Disability. The inability of the
Participant to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment, which condition, in
the opinion of a physician chosen by the Plan Administrator, can be
expected to result in death or which has lasted or can be expected to last
for a continuous period of not less than twelve (12) months.
2.44 Trust. The fund maintained by the Trustee for the investment
of Plan assets in accordance with the terms and conditions of the Trust
Agreement.
2.45 Trust Agreement. The agreement between the Employer and the
Trustee under which the assets of the Plan are held, administered, and
managed. The provisions of the Trust Agreement shall be considered an
integral part of this Plan as if set forth fully herein.
2.46 Trustee. The individual or corporate Trustee or Trustees under
the Trust Agreement as they may be constituted from time to time.
2.47 Valuation Date. The last day of each Plan Year and such other
dates, as provided in Section 5.6, for valuing the Trust assets.
2.48 Vesting Computation Period. The Plan Year.
2.49 Year of Service. An Eligibility Computation Period, Vesting
Computation Period, or Plan Year, whichever is applicable, during which
an Employee of the Affiliated Employers has completed at least one
thousand (1,000) Hours of Service (whether or not continuous) with the
Affiliated Employers. The Employer may, in the Adoption Agreement,
specify a lesser number of hours.
ARTICLE 3
ELIGIBILITY AND YEARS OF SERVICE
3.1 Eligibility Requirements.
(a) Each Employee of the Affiliated Employers shall become a
Participant in the plan as of the first Entry Date after the date on which
the Employee has satisfied the minimum age and service requirements
specified in the Adoption Agreement.
(b) The Employer may elect in the Adoption Agreement to exclude
from participation:
(i) Employees included in a unit of employees covered by
a collective bargaining agreement, between the Employer and Employee
representatives if retirement benefits were the subject of good faith
bargaining and if less than 2% of the Employees of the Employer who are
covered pursuant to that agreement are professionals as defined in Section
1.410(b)-9(g) of the proposed Treasury regulations or comparable final
Treasury regulations. 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, and
(ii) non-resident aliens who receive no earned income from
the Employer which constitutes income from sources within the United
States.
3.2 Participation and Service Upon Reemployment. Upon the
reemployment of any Employee, the following rules shall determine his
eligibility to participate in the Plan and his credit for prior service.
(a) Participation. If the reemployed Employee was a
Participant in the Plan during his prior period of employment with the
Employer, he shall be eligible upon reemployment to resume participation
in the Plan. If the reemployed Employee was not a Participant in the
Plan, he shall be considered a new Employee and required to meet the
requirements of Section 3.1 in order to be eligible to participate in the
Plan, subject to the possible reinstatement of credit for prior service
under paragraph (b) below.
(b) Credit for Prior Service. In the case of any Employee who
is reemployed before or after incurring a Break in Service, any Hour of
Service and Year of Service credited to the Employee at the end of his
prior period of employment shall be reinstated as of the date of his
reemployment.
3.3 Predecessor Employers. If specified in the Adoption Agreement,
Years of Service with a predecessor employer will be treated as service
for the Employer for eligibility purposes; provided, however, if the
Employer maintains the plan of a predecessor employer, Years of Service
with such employer will be treated as Service with the Employer without
regard to any election.
ARTICLE 4
CONTRIBUTIONS
4.1 Employer Contributions.
(a) Money Purchase Pension Contributions. For each Plan Year,
the Employer shall contribute to the Trust an amount equal to such uniform
percentage of Compensation of each eligible Participant as may be
determined by the Employer in accordance with the money purchase pension
contribution formula specified in the Adoption Agreement. Subject to the
limitations of Section 5.4, the money purchase pension contribution
formula may be integrated with Social Security by providing for additional
Employer Contributions for each Participant not to exceed the amount
permitted to be allocated on account of the Participant's Excess
Compensation.
(b) Profit-Sharing Contribution. For each Plan Year, the
Employer shall contribute to the Trust an amount as may be determined by
the Employer in accordance with the profit-sharing formula set forth in
the Adoption Agreement.
(c) Eligible Participants. Subject to the Minimum Allocation
rules of Section 5.2, Participants who (i) died, retired, or became
Totally and Permanently Disabled during the Plan Year, or (ii) are
employed on the last day of the Plan Year and who completed the number of
Hours of Service specified by the Employer in the Adoption Agreement in
such Plan Year shall be eligible to share in the Employer Contribution.
An Employer may elect in the Adoption Agreement to allocate a contribution
on behalf of a Participant who completes the number of Hours of Service
specified by the Employer in the Adoption Agreement but terminates
employment before the end of the Plan Year. If the Employer fails to
specify in the Adoption Agreement the number of Hours of Service required
to share in the Employer Contribution, the number shall be 501 Hours of
Service.
(d) Contribution Limitation. In no event shall any Employer
contribution exceed the maximum amount deductible from the Employer's
income under Section 404 of the Code, or the maximum limitations under
Section 415 of the Code provided in Article 6.
4.2 Payment. All Employer Contributions to the Trust for any Plan
Year shall be made either in one lump sum or in installments in U.S.
currency or by check within the time prescribed by law, including
extensions granted by the Internal Revenue Service, for filing the
Employer's federal income tax return for the taxable year with or within
which such Plan Year ends. All Employer Contributions to the Trust for
a money purchase pension plan for any Plan Year shall be made within the
time prescribed by regulations under Section 412(c)(10) of the Code.
4.3 Nondeductible Voluntary Contributions by Participants.
(a) This Plan will not accept nondeductible Employee
contributions and matching contributions for Plan Years beginning after
the Plan Year in which this Plan is adopted by the Employer. Employee
contributions for Plan Years beginning after December 31, 1986 will be
limited so as to meet the nondiscrimination test of Section 401(m).
(b) A separate account shall be maintained by the Trustee for
the nondeductible Employee contributions of each Participant.
(c) Employee contributions and earnings thereon will be
nonforfeitable at all times.
4.4 Rollovers and Other Transfers.
(a) Subject to the approval of the Plan Administrator, the
Trustee may, in its discretion, accept a direct transfer of assets from
the trustee of any other qualified plan described in Section 401(a) of the
Code or from a qualified annuity plan described in Section 403(a) of the
Code to be held for the benefit of any Participant to the full extent
permitted by the Code.
(b) Subject to the approval of the Plan Administrator, a
Participant who has participated in any other qualified plan described in
Section 401(a) of the Code or in a qualified annuity plan described in
Section 403(a) of the Code shall be permitted to make a rollover
contribution to the Trust of an amount received by the Participant that
is attributable to participation in such other plan (reduced by any
nondeductible voluntary contributions he made to the Plan), provided that
no part of the rollover contribution is attributable to participation in
a plan under which the Participant was covered as a Key Employee in a Top-
Heavy Plan at the time contributions were made on his behalf, and provided
further that the rollover contribution complies with all requirements of
Section 402(a)(5), Section 403(a)(4), Section 408(d)(3)(A)(ii) or Section
409(b)(3)(C) of the Code, whichever is applicable.
(c) Before approving such a trustee transfer or Participant
rollover, the Plan Administrator may request from the Participant or the
Employer any documents which the Plan Administrator, in its discretion,
deems necessary for such trustee transfer or rollover.
(d) Any trustee transfer or Participant rollover contribution
to the Trust shall be credited to the Participant's trustee transfer or
rollover subaccount established under Section 5.1 and separately accounted
for.
ARTICLE 5
ALLOCATIONS
5.1 Individual Accounts. The Plan Administrator shall establish and
maintain an Account in the name of each Participant. The Account shall
contain the following subaccounts:
(a) A money purchase pension contribution subaccount to which
shall be credited each such Participant's share of (i) Employer
Contributions under Section 4.1(a), (ii) the net earnings or net losses
on the investment of the assets of the Trust, (iii) distributions, and
(iv) dividends, capital gain distributions and other earnings received on
any Shares credited to the Participant's subaccount;
(b) A profit-sharing contribution subaccount to which shall be
credited each such Participant's share of (i) Employer Contributions under
Section 4.1(b), (ii) forfeitures, (iii) the net earnings or net losses on
the investment of the assets of the trust, (iv) distributions, and (v)
dividends, capital gain distributions and other earnings received on any
Shares credited to the Participant's subaccount;
(c) A nondeductible voluntary contribution subaccount to which
shall be credited nondeductible voluntary contributions by the Participant
under Section 4.3 to the extent such nondeductible voluntary contributions
were permitted and made under the Plan, and the earnings, losses and
expenses attributable thereto, including any dividends, capital gain
distributions and other earnings received on any Shares credited to the
Participant's subaccount;
(d) A trustee transfer subaccount to which shall be credited
contributions to the Trust accepted under Section 4.4(a) and the earnings,
losses and expenses attributable thereto, including any dividends, capital
gain distributions and other earnings received on any Shares credited to
the Participant's subaccount;
(e) A rollover subaccount to which shall be credited
contributions to the Trust accepted under Section 4.4(b) and the earnings,
losses and expenses attributable thereto, including any dividends, capital
gain distributions and other earnings received on any Shares credited to
the Participant's subaccount.
5.2 Minimum Allocation.
(a) Except as provided in (b) and (c) below, the Employer
Contributions and forfeitures allocated on behalf of any Participant who
is a Non-Key Employee shall not be less than the lesser of three percent
(3%) of such Participant's compensation (as defined in Section 6.5) 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 Key
Employee's compensation (as defined in Section 6.5), excluding amounts in
excess of $200,000, 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 the Participant's failure to complete 1,000 Hours of
Service (or such lesser amount as may be specified in the Adoption
Agreement for a Year of Service) or because of compensation less than a
stated amount. The minimum allocation required (to the extent required
to be nonforfeitable under Section 416(b) of the Code) may not be
forfeited under Section 411(a)(3)(B) or 411(a)(3)(D) of the Code.
(b) The provisions in (a) above shall not apply to any
Participant who was not employed by the Affiliated Employers on the last
day of the Plan Year.
(c) If the Employer enters into both the money purchase pension
Adoption Agreement and the profit-sharing Adoption Agreement under this
Plan, to avoid a duplication of the minimum allocation under this Section
5.2, the money purchase pension Adoption Agreement shall provide for
contributions that are sufficient to satisfy the minimum allocation
requirements of this Section 5.2.
5.3 Allocation of Employer Contributions and Forfeitures.
(a) All money purchase pension contributions for a given Plan
Year shall be allocated to the Account of the Participant for whom such
contribution was made in accordance with the contribution formula
specified by the Employer in the Adoption Agreement. Any forfeiture from
a Participant's money purchase pension contribution subaccount arising
under the Plan for a given Plan Year shall be applied to reduce the
Employer Contribution in that Plan Year, or if in excess of the Employer
Contribution for such Plan Year, the amounts shall be used to reduce the
Employer Contribution in the next succeeding Plan Year or Years.
(b) All profit-sharing contributions to and forfeitures from
a Participant's profit-sharing contribution subaccount will be allocated
to the Account of each Participant in the ratio that such Participant's
Compensation bears to the Compensation of all Participants. However, if
the profit-sharing contribution formula selected in the Adoption Agreement
is integrated with Social Security, profit-sharing contributions for the
Plan Year plus any forfeitures will be allocated to Participants' Accounts
as follows:
(i) First, contributions and forfeitures shall be
allocated to each Participant's Account in the ratio that each
Participant's total Compensation bears to all Participant's total
Compensation, but not in excess of 3% of each Participant's Compensation;
(ii) Next, any contributions and forfeitures remaining
after the allocation in (i) shall be allocated to each Participant's
Account in the ratio that each Participant's Excess Compensation bears to
the Excess Compensation of all Participants, but not in excess of 3%.
(iii) Next, any contributions and forfeiture remaining
after the allocation in (ii) shall be allocated to each Participant's
Account in the ratio that the sum of each Participant's total Compensation
and Excess Compensation bears to the sum of all Participants' total
Compensation and Excess Compensation, but not in excess of the profit-
sharing maximum disparity rate;
(iv) Next, any remaining Employer Contributions or
forfeitures shall be allocated to each Participant's Account in the ratio
that each Participant's total Compensation for the Plan Year bears to all
Participant's total Compensation for that year.
The profit-sharing maximum disparity rate is equal to the lesser of (A)
2.7% or (B) the applicable percentage determined in accordance with the
table below:
If the Integration Level
the applicable
is more than but not more than percentage is:
$0 X* 2.7%
X* of TWB 80% of TWB 1.3%
80% of TWB Y** 2.4%
*X = the greater of $10,000 or 20 percent of the TWB
**Y = any amount more than 80% of the TWB but less than 100% of the
TWB.
TWB = Taxable Wage Base
If the Integration Level used is equal to the Taxable Wage Base, the
applicable percentage is 2.7%.
(c) Notwithstanding anything in (a) or (b) above to the
contrary, forfeitures arising under a Participant's money purchase pension
contribution subaccount will only be used to reduce the contributions of
the Participant's Employer who adopted this Plan, and forfeitures arising
under a Participant's profit-sharing subaccount will be reallocated only
for the benefit of Employees of the
Participant's Employer who adopted this Plan.
5.4 Coordination of Social Security Integration. If the Employer
maintains plans involving integration with Social Security other than this
Plan, and if any Participant is eligible to participate in more than one
of such plans, all such plans will be considered to be integrated if the
extent of the integration of all such plans does not exceed 100 percent.
For purposes of the preceding sentence, the extent of integration of a
plan is the ratio (expressed as a percentage) which the actual benefits,
benefit rate, offset rate, or Employer Contribution rate under the plan
bears to the integration limitation applicable to such plan. If the
Employer enters into both the money purchase pension Adoption Agreement
and the profit-sharing Adoption Agreement under this Plan, integration
with Social Security may only be selected in one Adoption Agreement.
5.5 Withdrawals and Distributions. Any distribution to a
Participant or his Beneficiary, any amount transferred from a
Participant's Account directly to the Trustee of any other qualified plan
described in Section 401(a) of the Code or from a qualified annuity plan
described in Section 403(a) of the Code, or any withdrawal by a
Participant shall be charged to the appropriate subaccount(s) of the
Participant as of the date of the distribution or the withdrawal.
Distributions are subject to spousal consent if the joint and survivor
rules of Article 9 apply.
5.6 Determination of Value of Trust Fund and of Net Earnings or
Losses. As of each Valuation Date the Trustee shall determine for the
period then ended the sum of the net earnings or losses of the Trust
(excluding with respect to Shares and other assets specifically allocated
to a specific Participant's subaccount, (i) dividends and capital gain
distributions from Shares, (ii) receipts or income attributable to
insurance policies, (iii) income gains and/or losses attributable to a
Participant's loans made pursuant to Article 13 or to any other assets)
which shall reflect accrued but unpaid interest, dividends, gains, or
losses realized from the sale, exchange or collection of assets, other
income received, appreciation in the fair market value of assets,
depreciation in the fair market value of assets, administration expenses,
and taxes and other expenses paid. Gains or losses realized and
adjustments for appreciation or depreciation in fair market value shall
be computed with respect to the difference between such value as of the
preceding Valuation Date or date of purchase, whichever is applicable, and
the value as of the date of disposition of the current Valuation Date,
whichever is applicable.
5.7 Allocation of Net Earnings or Losses.
(a) As of each Valuation Date the net earnings or losses of the
Trust (excluding with respect to Shares and other assets specifically
allocated to a specific Participant's subaccount, (i) dividends and
capital gain distributions from Shares, (ii) dividends or credits
attributable to insurance policies, (iii) income gains and/or losses
attributable to a Participant's loans made pursuant to Article 11 or to
any other assets, all of which shall be allocated to such Participant's
subaccount) for the Valuation Period then ending shall be allocated to the
Accounts of all Participants (or Beneficiaries) having credits in the Fund
both on such date and at the beginning of such Valuation Period. Such
allocation shall be made by the application of a fraction, the numerator
of which is the value of the Account of a specific Participant (or
Beneficiary) as of the immediately preceding Valuation Date, reduced by
any distributions therefrom since such preceding Valuation Date, and the
denominator of which is the total value of all such Accounts as of that
preceding Valuation Date, reduced by any distributions therefrom since
such preceding Valuation Date.
(b) To the extent that Shares and other assets are specifically
allocated to a specific Participant's subaccount:
(i) dividends and capital gain distributions from Shares,
(ii) dividends or credits attributable to insurance
policies,
(iii) income gains and/or losses attributable to a
Participant's loans made pursuant to Article 13 or to any
other assets, all shall be allocated to such Participant's
subaccount.
5.8 Responsibilities of the Plan Administrator. The Plan
Administrator shall maintain accurate records with respect to the
contributions made by or on behalf of Participants under the Plan, and
shall furnish the Trustee with written instructions directing the Trustee
to allocate all Plan contributions to the Trust among the separate
Accounts of Participants in accordance with Section 5.1 above. In making
any such allocation, the Trustee shall be fully entitled to rely on the
instructions furnished by the Plan Administrator, and shall be under no
duty to make any inquiry or investigation with respect thereto.
ARTICLE 6
LIMITATIONS ON ALLOCATIONS
6.1 Employers Who Do Not Maintain Other Qualified Plans.
(a) If the Participant does not participate in, and has never
participated in another qualified plan or a welfare benefit fund, as
defined in Section 419(e) of the Code maintained by the employer (as
defined in Section 6.5), or an individual medical account, as defined in
Section 415(l)(2) of the Code, maintained by the employer, which provides
an annual addition as defined in Section 6.5(a), the amount of annual
additions which may be credited to the Participant's Account for any
limitation year will not exceed the lesser of the maximum permissible
amount or any other limitation contained in this Plan. 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 will be reduced so that the annual additions for the limitation
year will equal the maximum permissible amount.
(b) Prior to determining the Participant's actual compensation
for the limitation year, the employer may determine the maximum
permissible amount for a Participant on the basis of a reasonable
estimation of the Participant's compensation for the limitation year,
uniformly determined for all Participants similarly situated.
(c) As soon as is administratively feasible after the end of
the limitation year, the maximum permissible amount for the limitation
year will be determined on the basis of the Participant's actual
compensation for the limitation year.
(d) If, pursuant to Section 6.1(c) or as a result of
forfeitures, there is an excess amount the excess will be disposed of as
follows:
(i) any nondeductible voluntary contributions, to the
extent they would reduce the excess amount, will be returned to the
Participant;
(ii) if after the application of paragraph (i) 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
will 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;
(iii) if after the application of paragraph (i) an excess
amount still exists, and the Participant is not covered by the Plan at the
end of the limitation year, the excess amount will be held unallocated in
a suspense account. The suspense account will be applied to reduce future
Employer Contributions (including allocation of any forfeitures) for all
remaining Participants in the next limitation year, and each succeeding
limitation year if necessary; and
(iv) if a suspense account is in existence at any time
during the limitation year pursuant to this Section, it will not
participate in the allocation of the Trust's investment gains and losses.
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 Employee
contributions may be made to the Plan for that limitation year. Excess
amounts may not be distributed to Participants or former Participants.
6.2 Employers Who Maintain Other Qualified Master or Prototype
Defined Contribution Plans.
(a) This Section applies if, in addition to this Plan, the
Participant is covered under another qualified master or prototype defined
contribution 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 as
defined in Section 6.5(a), during any limitation year. The annual
additions which may be credited to a Participant's Account under this Plan
for any such limitation year will not exceed the maximum permissible
amount reduced by the annual additions credited to a Participant's Account
under the other plans and welfare benefit funds for the same limitation
year. If the annual additions with respect to the Participant under other
defined contribution plans and welfare benefit funds maintained by the
employer are less than the maximum permissible amount and the Employer
Contribution that would otherwise be contributed or allocated to the
Participant's Account under this Plan would cause the annual additions for
the limitation year to exceed this limitation, the amount contributed or
allocated will be reduced so that the annual additions under all such
plans and funds for the limitation year will 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.
(b) 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 Section
6.1(b).
(c) As soon as is administratively feasible after the end of
the limitation year, the maximum permissible amount for the limitation
year will be determined on the basis of the Participant's actual
compensation for the limitation year.
(d) If, pursuant to Section 6.2(c) or as a result of the
allocation of forfeitures, 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 will 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.
(e) If an 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 (1) the annual additions allocated to the
Participant for the limitation year as of such date under this
Plan to (2) the total annual additions allocated to the
Participant for the limitation year as of such date under this
and all the other qualified master or prototype defined
contribution plans.
(f) Any excess amount attributed to this Plan will be disposed
in the manner described in Section 6.1(d).
6.3 Employers Who, In Addition to this Plan, Maintain Other
Qualified Plans Which Are Defined Contribution Plans Other than Master or
Prototype Plans. If the Participant is covered under another qualified
defined contribution plan maintained by the employer which is not a master
or prototype plan, annual additions which may be credited to the
Participant's Account under this Plan for any limitation year will be
limited in accordance with Section 6.2 as though the other plan were a
master or prototype plan unless the employer provides other limitations
in the Adoption Agreement.
6.4 Employers Who, In Addition to this Plan, Maintain a Qualified
Defined Benefit Plan. 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 will be limited in
accordance with the Adoption Agreement.
6.5 Definitions. For purposes of this Article 6 the following
definitions and rules of interpretation shall apply:
(a) "annual additions" -- The sum of the following amounts
credited to a Participant's Account for the limitation year:
(i) Employer contributions;
(ii) Employee contributions; and
(iii) Forfeitures.
For this purpose, any excess amount applied under Section 6.1(d)
or 6.2(f) in the limitation year to reduce employer contributions will be
considered annual additions for such limitation year. Amounts 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, are treated as annual additions to a defined
contribution plan. Also, amounts derived from contributions paid or
accrued after December 31, 1985, in taxable years ending after such date,
which are attributable to post-retirement medical benefits allocated to
the separate account of a Key Employee, as defined in Section 419A(d)(3)
of the Code, under a welfare benefit fund, as defined in Section 419(e)
of the Code, maintained by the employer, are treated as annual additions
to a defined contribution plan.
(b) "compensation" -- A Participant's earned income, wages,
salaries, and fees for professional services and other amounts received
(without regard to whether or not paid in cash) for personal services
actually rendered in the course of employment with the employer
maintaining the Plan to the extent that amounts are includable 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,
reimbursements and expense allowances), and excluding the following:
(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 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
either becomes freely transferable or is no longer subject to a
substantial risk of forfeiture;
(iii) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified 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 described in
Section 403(b) of the Code (whether or not the amounts are actually
excludable from the gross income of the Employee).
For purposes of applying the limitations of this Article,
compensation for a limitation year is the compensation actually paid or
includible in gross income during such year.
Notwithstanding the preceding sentence, compensation for a
Participant in a defined contribution plan 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.
(c) "defined benefit fraction" -- A fraction, the numerator of
which is the sum of the Participant's projected annual benefits under all
the defined benefit plans (whether or not terminated) maintained by the
employer, and the denominator of which is the lesser of 100 percent of the
dollar limitation determined for the limitation year under Section 415(b)
and (d) of the Code or 140 percent of highest average compensation,
including any adjustment 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
will not be less than 100 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 of the Code for all
limitation years beginning before January 1, 1987.
(d) "defined contribution dollar limitation" -- $30,000 or, if
greater, one-fourth of the defined benefit dollar limitation set forth in
Section 415(b)(1) of the Code as in effect for the limitation year.
(e) "defined contribution fraction" -- A fraction, the
numerator of which is the sum of the annual additions to the Participant's
account under all the defined contribution plans (whether or not
terminated) maintained by the employer for the current and all prior
limitation years (including the annual additions attributable to the
Participant's nondeductible voluntary contributions to all defined benefit
plans, whether or not terminated, maintained by the employer and the
annual additions attributable to all welfare benefit funds, as defined,
in Section 419(e) of the Code, and individual medical accounts, as defined
in Section 415(l)(2) of the Code, maintained by the employer), and the
denominator of which is the sum of the maximum aggregate amounts for the
current and all prior limitation years of service with the employer
(regardless of whether a defined contribution plan was maintained by the
employer). The maximum aggregate amount in any limitation year is the
lesser of 125 percent of the dollar limitation determined under Sections
415(b) and (d) of the Code in effect under Section 415(c)(1)(A) of the
Code or 35 percent of the Participant's compensation for such year.
If the Participant was a Participant as of the end of the first
day of the first limitation year beginning after December 31, 1986, in one
or more defined contribution plans maintained by the employer which were
in existence on May 6, 1986, the numerator of this fraction will be
adjusted if the sum of this fraction and the defined benefit fraction
would otherwise exceed 1.0 under the terms of this Plan. Under the
adjustment, an amount equal to the product of (1) the excess of the sum
of the fractions over 1.0 times (2) the denominator of this fraction, will
be permanently subtracted from the numerator of this fraction. The
adjustment is calculated using the fractions as they would be computed as
of the end of the last limitation year beginning before January 1, 1987,
and disregarding any changes in the terms and conditions of the Plan made
after May 5, 1986, but using the 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.
(f) "employer" -- For purposes of this Article, the Employer
that adopts this plan, and all members of a controlled group of
corporations (as defined in Section 414(b) of the Code as modified by
Section 415(h) of the Code), all commonly controlled trades or businesses
(as defined in Section 414(c) of the Code as modified by Section 415(h)
of the Code), or affiliated service groups (as defined in Section 414(m)
of the Code) of which the adopting Employer is a part, and any other
entity required to be aggregated with the Employer under Section 414(o)
of the Code.
(g) "excess amount" -- The excess of the Participant's annual
addition for the limitation year over the maximum permissible amount.
(h) "highest average compensation" -- The average compensation
for the three consecutive years of service with the employer that produces
the highest average.
(i) "limitation year" -- A Plan Year, or the 12-consecutive
month period elected by the employer in a resolution. All qualified plans
maintained by the employer must use the same limitation year. If the
limitation year is amended to a different 12-consecutive month period, the
new limitation year must begin on a date within the limitation year in
which the amendment is made.
(j) "master or prototype plan" -- A plan the form of which is
the subject of a favorable opinion letter from the Internal Revenue
Service.
(k) "maximum permissible amount" -- The maximum annual addition
that may be contributed to a Participant's account under the Plan for any
limitation year shall not exceed the lesser of:
(i) the defined contribution dollar limitation, or
(ii) 25 percent of the Participant's compensation for the
limitation year.
The compensation limitation referred to in (ii) 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 Section 415(l)(1) or Section 419A(d)(2) of the
Code.
If a short limitation year is created because of an amendment
changing the limitation year to a different 12-consecutive month period,
the maximum permissible amount will not exceed the defined contribution
dollar limitation multiplied by the following fraction:
Number of months in the short limitation year
12
(l) "projected annual benefit" -- 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:
(i) the Participant will continue employment until normal
retirement age under the plan (or current age, if later), and
(ii) the Participant's compensation for the current
limitation year and all other relevant factors used to determine benefits
under the plan will remain constant for all future limitation years.
ARTICLE 7
TRUST FUND
7.1 Receipt of Contributions by Trustee. All contributions to the
Trust that are received by the Trustee, together with any earnings
thereon, shall be held, managed and administered by the Trustee named in
the Adoption Agreement in accordance with the terms and conditions of the
Trust Agreement and the Plan. The Trustee may use a Custodian designated
by the Sponsor to perform recordkeeping and custodial functions. The
Trustee shall be subject to the proper directions of the Employer or the
Plan Administrator made in accordance with the terms of the Plan and
ERISA.
7.2 Investment Responsibility.
(a) If the Employer elects in the Adoption Agreement to
exercise investment authority and responsibility, the selection of the
investments in which assets of the Trust are invested shall be the
responsibility of the Plan Administrator and each Participant will have
a ratable interest in all assets of the Trust.
(b) If the Adoption Agreement so provides and the Employer
elects to permit each Participant or Beneficiary to select the investments
in his Account, no person, including the Trustee and the Plan
Administrator, shall be liable for any loss or for any breach of fiduciary
duty which results from such Participant's or Beneficiary's exercise of
control.
(c) If the Adoption Agreement so provides and the Employer
elects to permit each Participant or Beneficiary to select the investments
in his Account, the Employer or the Plan Administrator must complete a
schedule of Participant designations.
(d) The Plan Administrator may at any time change the
selection of investments in which the assets of the Trust are invested,
or subject to such reasonable restrictions as may be imposed by the
Sponsor for administrative convenience, may submit an amended schedule of
Participant designations. Such amended documents may provide for a
variance in the percentages of contributions to any particular investment
or a request that Shares in the Trust be reinvested in whole or in part
in other Shares.
7.3 Investment Limitations. The Sponsor may impose reasonable
investment limitations on the Employer and the Plan Administrator relating
to the type of permissible investments in the Trust or the minimum
percentage of Trust assets to be invested in Shares.
ARTICLE 8
VESTING
8.1 Nondeductible Voluntary Contributions and Earnings. The
Participant's nondeductible voluntary contribution subaccount shall be
fully vested and nonforfeitable at all times and no forfeitures will occur
as a result of an Employee's withdrawal of nondeductible voluntary
contributions.
8.2 Rollovers, Transfers and Earnings. The Participant's rollover
subaccount shall be fully vested and nonforfeitable at all times.
8.3 Employer Contributions and Earnings. The Participant's money
purchase pension contribution subaccount and profit-sharing contribution
subaccount shall be fully vested and nonforfeitable upon the Participant's
death, disability, attainment of Normal Retirement Age, or, if the
Adoption Agreement provides for an Early Retirement Date, attainment of
the required age and completion of the required service. In the absence
of any of the preceding events, the Participant's money purchase
contribution subaccount and his profit-sharing contribution subaccount
shall vest in accordance with a minimum vesting schedule specified in the
Adoption Agreement. The schedule must be at least as favorable to
Participants as either schedule (a) or (b) below.
(a) Graduated vesting according to the following schedule:
Years of Service Percent Vested
Less than 2 0
2 20
3 40
4 60
5 80
6 or more 100
(b) Full (100 percent) vesting after three (3) Years of
Service.
8.4 Amendments to Vesting Schedule.
(a) No amendment to the Plan shall be effective to the extent
that it has the effect of decreasing a Participant's accrued benefit.
Notwithstanding the preceding sentence, a Participant's account balance
may be reduced to the extent permitted under Section 412(c)(8) of the
Code. For purposes of this paragraph, a Plan amendment which has the
effect of decreasing a Participant's account balance or eliminating an
optional form of a benefit, with respect to benefits attributable to
service before the amendment shall be treated as reducing an accrued
benefit. Furthermore, if the vesting schedule of the Plan is amended, in
the case of an Employee who is a Participant as of the later of the date
such amendment is adopted or the date it becomes effective, the
nonforfeitable percentage (determined as of such date) of such Employee's
right to his Employer-derived accrued benefit will not be less than his
percentage computed under the Plan without regard to such amendment.
(b) If the Plan's vesting schedule is amended, or the Plan is
amended in any way that directly or indirectly affects the computation of
a 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 with at least three (3) Years of Service with the
Employer may elect, within a reasonable period after the adoption of the
amendment, to have the nonforfeitable percentage computed under the Plan
without regard to such amendment. For Participants who do not have at
least one (1) Hour of Service in any Plan Year beginning after December
31, 1988, the preceding sentence shall be applied by substituting "five
(5) Years of Service" for "three (3) Years of Service" where such
language appears. The Participant's election may be made at any time
during the period ending on the latest of:
(i) 60 days after the amendment is adopted;
(ii) 60 days after the amendment becomes effective; or
(iii)60 days after the Participant is issued written notice of
the amendment by the Employer or the Plan Administrator.
8.5 Determination of Years of Service. For purposes of determining
the vested and nonforfeitable percentage of the Participant's Employer
Contribution subaccounts, all of the Participant's Years of Service with
the Employer or an Affiliated Employer shall be taken into account. If
specified in the Adoption Agreement, Years of Service with a predecessor
employer will be treated as service for the Employer; provided, however,
if the Employer maintains the plan of a predecessor employer, Years of
Service with such employer will be treated as service with the Employer
without regard to any election.
8.6 Forfeiture of Non-Vested Amounts.
(a) For Plan Years beginning before 1985, any portion of a
Participant's Account that is not vested shall be forfeited by him as of
the last day of the Plan Year in which a Break in Service occurs. For
Plan Years beginning after 1984, any portion of a Participant's Account
that is not vested shall be forfeited by him as of the last day of the
Plan Year in which his fifth consecutive Break in Service occurs. Any
amounts thus forfeited shall be reallocated as provided in Article 5.
(b) If a distribution is made at a time when a Participant has
a vested right to less than 100 percent of the value of the Participant's
Account attributable to Employer Contributions and forfeitures, as
determined in accordance with the provisions of Section 8.3 above, and the
nonvested portion of the Participant's Account has not yet been forfeited
in accordance with paragraph (a) above:
(i) a separate remainder subaccount shall be established
for the Participant's interest in the Plan as of the time of the
distribution, and
(ii) at any relevant time the Participant's vested portion
of the separate remainder subaccount shall be equal to 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; 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.
ARTICLE 9
JOINT AND SURVIVOR ANNUITY REQUIREMENTS
9.1 General. The provisions of this Article shall apply to any
Participant who is credited with at least one (1) Hour of Service with the
Employer on or after August 23, 1984, and such other Participants as
provided in Section 9.6.
9.2 Qualified Joint and Survivor Annuity. Unless an optional form
of benefit is selected pursuant to a Qualified Election within the ninety
(90) day period ending on the Annuity Starting Date, a married
Participant's Vested Account Balance will be paid in the form of a
Qualified Joint and Survivor Annuity and an unmarried Participant's Vested
Account Balance will be paid in the form of a life annuity. The
Participant may elect to have such annuity distributed upon attainment of
the Earliest Retirement Age under the Plan.
9.3 Qualified Preretirement Survivor 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 an annuity for the life of the Surviving Spouse.
The Surviving Spouse may elect to have such annuity distributed within a
reasonable period after the Participant's death.
9.4 Definitions.
(a) (i) Election Period. 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. If a Participant
separates from service prior to the first day of the Plan Year in which
age thirty-five (35) is attained, with respect to the Account balance as
of the date of separation, the Election Period shall begin on the date of
separation.
(ii) A Participant who has not yet attained age thirty-five
(35) as of the end of any current Plan Year may make a special Qualified
Election to waive the qualified 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 thirty-five
(35). Such election shall not be valid unless the Participant receives
a written explanation of the qualified preretirement survivor annuity in
such terms as are comparable to the explanation required under Section
9.5. Qualified preretirement survivor annuity coverage will be
automatically reinstated as of the first day of the Plan Year in which the
Participant attains age thirty-five (35). Any new waiver on or after such
date shall be subject to the full requirements of this Article.
(b) Earliest Retirement Age. The earliest date on which, under
the Plan, the Participant could elect to receive retirement benefits.
(c) Qualified Election.
(i) A waiver of a Qualified Joint and Survivor Annuity or
a qualified preretirement survivor annuity. Any waiver of a Qualified
Joint and Survivor Annuity or a qualified preretirement survivor annuity
shall not be effective unless: (1) the Participant's Spouse consents in
writing to the election; (2) the election designates a specific
Beneficiary, including any class of Beneficiaries or any contingent
Beneficiaries, which may not be changed without spousal consent (or the
Spouse expressly permits designations by the Participant without any
further spousal consent); (3) the Spouse's consent acknowledges the effect
of the election; and (4) the Spouse's consent is witnessed by a Plan
representative or notary public. Additionally, a Participant's waiver of
the Qualified Joint and Survivor Annuity shall not be effective unless the
election designates a form of benefit payment which may not be changed
without spousal consent (or the Spouse expressly permits designations by
the Participant without any further spousal consent). If it is
established to the satisfaction of a Plan representative that there is no
Spouse or that the Spouse cannot be located, a waiver will be deemed a
Qualified Election.
(ii) 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 Section 9.5.
(d) Qualified Joint and Survivor Annuity. An immediate annuity
for the life of the Participant with a survivor annuity for the life of
the Spouse which equals fifty percent (50%) 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 Balance.
(e) Spouse (Surviving Spouse). The Spouse or Surviving Spouse
of the Participant, provided that a former spouse will 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) Annuity Starting Date. The first day of the first period
for which an amount is paid as an annuity or any other form.
(g) Vested Account Balance. 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 of this Article 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.
9.5 Notice Requirements
(a) In the case of a Qualified Joint and Survivor Annuity, the
Plan Administrator shall no less than thirty (30) days and no more than
ninety (90) days prior to the Annuity Starting Date, provide each
Participant with a written explanation of: (i) the terms and conditions
of a Qualified Joint and Survivor Annuity; (ii) the Participant's right
to make and the effect of an election to waive the Qualified Joint and
Survivor Annuity form of benefit; (iii) the rights of a Participant's
Spouse; and (iv) the right to make, and the effect of, a revocation of a
previous election to waive the Qualified Joint and Survivor Annuity.
(b) (i) In the case of a qualified preretirement survivor
annuity as described in Section 9.3, the Plan Administrator shall provide
each Participant within the applicable period for such Participant a
written explanation of the qualified preretirement survivor annuity in
such terms and in such manner as would be comparable to the explanation
provided for meeting the requirements of subsection (a) applicable to a
Qualified Joint and Survivor Annuity.
(ii) The applicable period for a Participant is whichever
of the following periods ends last: (i) 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; (ii) a reasonable period ending after the
individual becomes a Participant; (iii) a reasonable period ending after
Section 9.5(c) ceases to apply to the Participant; (iv) a reasonable
period ending after this Article first applies to the Participant.
Notwithstanding the foregoing, notice must be provided within a reasonable
period ending after separation from service in the case of a Participant
who separates from service before attaining age 35.
For purposes of applying the preceding paragraph, a reasonable
period ending after the enumerated events described in (ii), (iii) and
(iv) 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 one year prior to separation and ending one year
after separation. If such a Participant thereafter returns to employment
with the Employer, the applicable period for such Participant shall be
redetermined.
(c) Notwithstanding the other requirements of this Section 9.5,
the respective notices prescribed by this Section need not be given to a
Participant if (1) the plan "fully subsidizes" the costs of a Qualified
Joint and Survivor Annuity or qualified preretirement survivor annuity,
and (2) the plan does not allow the Participant to waive the Qualified
Joint and Survivor Annuity or qualified preretirement survivor annuity and
does not allow a married Participant to designate a nonspouse beneficiary.
For purposes of this subsection, a plan fully subsidizes the costs of a
benefit if no increase in cost, or decrease in benefits to the Participant
may result from the Participant's failure to elect another benefit.
9.6 Safe Harbor Rules.
(a) This section shall apply to a Participant in a profit
sharing plan, and to any distribution, made on or after the first day of
the first Plan year beginning after December 31, 1988, from or under a
separate account attributable solely to accumulated deductible Employee
contributions, as defined in Section 72(o)(5)(B) of the Code, and
maintained on behalf of a Participant in a money purchase pension plan
(including a target benefit plan) if the following conditions are
satisfied: (i) the Participant does not or cannot elect payments in the
form of a life annuity; and (ii) on the death of a Participant, the
Participant's Vested Account Balance will be paid to the Participant's
Surviving Spouse, but if there is no Surviving Spouse, or if the Surviving
Spouse has consented in a manner conforming to a Qualified Election, then
to the Participant's designated Beneficiary. The Surviving Spouse may
elect to have distribution of the Vested Account Balance commence within
the ninety (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. This Section shall not be operative with respect to a
Participant in a profit sharing plan if the plan is a direct or indirect
transferee of a defined benefit plan, money purchase plan, a target
benefit plan, stock bonus, or profit sharing plan which is subject to the
survivor annuity requirements of Sections 401(a)(11) and 417 of the Code.
If this Section is operative, then the provisions of this Article 9, other
than Section 9.7, shall be inoperative.
(b) The Participant may waive the spousal death benefit
described in this Section at any time provided that no such waiver shall
be effective unless it satisfies the conditions of Section 9.4(c) (other
than the notification requirement referred to therein) that would apply
to the Participant's waiver of the qualified preretirement survivor
annuity.
(c) For purposes of this section, Vested Account Balance shall
mean, in the case of a money purchase pension plan or a target benefit
plan, the Participant's separate Account balance attributable solely to
accumulated deductible Employee contributions within the meaning of
Section 72(o)(5)(B) of the Code. In the case of a profit sharing plan,
Vested Account Balance shall have the same meaning as provided in Section
9.4(g).
9.7 Transitional Rules.
(a) Any living Participant not receiving benefits on August 23,
1984, who would otherwise not receive the benefits prescribed by the
previous sections of this 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 (1) Hour of Service under this Plan or a
predecessor plan in a Plan Year beginning on or after January 1, 1976, and
such Participant had at least ten (10) years of vesting service when he
or she separated from service.
(b) Any living Participant not receiving benefits on August 23,
1984, who was credited with at least one (1) 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 9.6(d) of this Article.
(c) The respective opportunities to elect (as described in
subsections (a) and (b) 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.
(d) Any Participant who has elected pursuant to subsection (b)
and any Participant who does not elect under subsection (a) or who meets
the requirements of subsection (a) of this Section 9.7 except that such
Participant does not have at least ten (10) 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 of 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 six (6)
months before the Participant attains qualified early
retirement age and end not more than ninety (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.
(e) The following terms shall have the meanings specified
herein:
(i) Qualified Early Retirement Age. The latest of:
(1) the earliest date, under the Plan, on which the
Participant may elect to receive retirement
benefits;
(2) the first day of the 120th month beginning
before the Participant reaches Normal Retirement
Age; or
(3) the date the Participant begins participation.
(ii) Qualified Joint and Survivor Annuity. An annuity for
the life of the Participant with a survivor annuity for
the life of the Spouse as described in Section 9.4(d).
ARTICLE 10
DISTRIBUTION PROVISIONS
10.1 Distribution Upon Retirement, Disability or Termination.
Subject to Articles 9, 10 and 11, a Participant shall be entitled to
receive the entire amount credited to his Account under the Plan upon his
retirement at or after Normal Retirement Age, at his Early Retirement Date
if the Adoption Agreement provides for an Early Retirement Date or in the
event of the Participant's Total and Permanent Disability. Subject to
Articles 9, 10 and 11, a Participant shall be entitled to receive the
vested portion of his Account upon termination of employment with the
Employer for any reason.
10.2 Restrictions on Immediate Distributions.
(a) If the value of a Participant's Vested Account Balance
derived from Employer and the Employee contributions exceeds (or at the
time of any prior distribution exceeded) three thousand five hundred
dollars ($3,500) and the Account balance is immediately distributable, the
Participant and the Participant's Spouse (or where either the Participant
or the Spouse has died, the survivor) must consent to any distribution of
such Account balance. The consent of the Participant and the
Participant's Spouse shall be obtained in writing within the ninety (90)
day period ending on the Annuity Starting Date. The Annuity Starting Date
is the first day of the first period for which an amount is paid as an
annuity or any other form. 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 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 thirty (30) days and no more
than ninety (90) days prior to the Annuity Starting Date.
(b) Notwithstanding the provisions of subsection (a), only the
Participant need consent to the commencement of a distribution in the form
of a Qualified Joint and Survivor Annuity while the Account balance 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 Section 9.5 of the Plan, only the Participant need
consent to the distribution of an Account balance that is immediately
distributable). 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 this 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 as the Employer 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 may, 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 shall be
transferred, without the Participant's consent, to the other plan if the
Participant does not consent to an immediate distribution.
(c) An Account balance is immediately distributable if any part
of the 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 Normal Retirement Age or age sixty-two (62).
(d) For purposes of determining the applicability of the
foregoing consent requirements to distributions made before the first day
of the first Plan Year beginning after December 31, 1988, the
Participant's Vested Account Balance shall not include amounts
attributable to accumulated deductible Employee contributions within the
meaning of Section 72(o)(5)(B) of the Code.
10.3 Commencement of Benefits.
(a) Unless the Participant elects otherwise, distribution of
benefits will begin no later than the 60th day after the latest of the
close of the Plan Year in which:
(i) the Participant attains age sixty-five (65) (or
Normal Retirement Age, if earlier);
(ii) the 10th anniversary of the year in which the
Participant commenced participation in the Plan
occurs; or
(iii)the Participant terminates service with the Employer.
(b) 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 10.2 of the Plan, shall be
deemed to be an election to defer commencement of payment of any benefit
sufficient to satisfy this Section.
10.4 Early Retirement With Age and Service Requirement. If a
Participant separates from service before satisfying the age requirement
for early retirement, but has satisfied the service requirement, the
Participant will be entitled to elect an early retirement benefit upon
satisfaction of such age requirement.
10.5 Nontransferability of Annuities. Any annuity contract
distributed herefrom must be nontransferable.
l0.6 Conflicts With Annuity Contracts. The terms of any annuity
contract purchased and distributed by the Plan to a Participant or Spouse
shall comply with the requirements of this Plan.
ARTICLE 11
TIMING AND MODES OF DISTRIBUTION
11.1 General Rules.
(a) Except as otherwise provided in Article 9, the requirements
of this Article shall apply to any distribution of a Participant's
interest and will take precedence over any inconsistent provisions of this
Plan. Unless otherwise specified, the provisions of this Article apply
to calendar years beginning after December 31, 1984.
(b) All distributions required under this Article shall be
determined and made in accordance with the income tax regulations under
Section 401(a)(9), including the minimum distribution incidental benefit
requirement of Section 1.401(a)(9)-2 of the regulations.
11.2 Required Beginning Date. The entire interest of a Participant
must be distributed or begin to be distributed no later than the
Participant's required beginning date.
11.3 Limits on Distribution Periods. As of the first distribution
calendar year, distributions, if not made in a single-sum, may only be
made over one of the following periods (or a combination thereof):
(a) the life of the Participant;
(b) the life of the Participant and a designated Beneficiary;
(c) a period certain not extending beyond the life expectancy
of the Participant; or
(d) a period certain not extending beyond the joint and last
survivor expectancy of the Participant and a designated Beneficiary.
11.4 Determination of Amounts to be Distributed Each Year.
(a) Individual Account.
(i) If a Participant's benefit is to be distributed over
(1) a period not extending beyond the life expectancy of the Participant
or the joint life and last survivor expectancy of the Participant and the
Participant's designated Beneficiary or (2) a period not extending beyond
the life expectancy of the designated Beneficiary, 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.
(ii) 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 percent (50%) of
the present value of the amount available for distribution is paid within
the life expectancy of the Participant.
(iii) 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 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 in subsection (a)(i) above as the
relevant divisor without regard to Proposed Regulations Section
1.401(a)(9)-2.
(iv) The minimum distribution required for the
Participant's first distribution calendar year must be made on or before
the Participant's required beginning date. The minimum distribution for
other calendar years, including the minimum distribution for the
distribution calendar year in which the Employee's required beginning date
occurs, must be made on or before December 31 of that distribution
calendar year.
(b) Other Forms. 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 regulations thereunder.
11.5 Death Distribution Provisions.
(a) Distribution Beginning Before Death. If the Participant
dies after distribution of his or her interest has begun, the remaining
portion of such interest will continue to be distributed at least as
rapidly as under the method of distribution being used prior to the
Participant's death.
(b) Distribution Beginning After Death. If the Participant dies
before distribution of his or her interest begins, distribution of the
Participant's entire interest shall be completed by December 31 of the
calendar year containing the fifth anniversary of the Participant's death
except to the extent that an election is made to receive distributions in
accordance with (i) or (ii) below:
(i) if any portion of the Participant's interest is payable
to a designated Beneficiary, distributions may be made over the life or
over a period certain not greater than the life expectancy of the
designated Beneficiary commencing on or before December 31 of the calendar
year immediately following the calendar year in which the Participant
died;
(ii) if the designated Beneficiary is the Participant's
surviving Spouse, the date distributions are required to begin in
accordance with (i) above shall not be earlier than the later of (1)
December 31 of the calendar year immediately following the calendar year
in which the Participant died and (2) December 31 of the calendar year in
which the Participant would have attained age seventy and one-half (70-
l/2).
(c) If the Participant has not made an election pursuant to this
Section 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.
(d) For purposes of subsection (b) above, if the surviving
Spouse dies after the Participant, but before payments to such Spouse
begin, the provisions of subsection (b), with the exception of paragraph
(ii) therein, shall be applied as if the surviving Spouse were the
Participant.
(e) For purposes of this Section, any amount paid to a child of
the Participant will be treated as if it had been paid to the surviving
Spouse if the amount becomes payable to the surviving Spouse when the
child reaches the age of majority.
(f) For the purposes of this Section, distribution of a
Participant's interest is considered to begin on the Participant's
required beginning date (or, if subsection (d) above is applicable, the
date distribution is required to begin to the surviving Spouse pursuant
to subsection (b) above). If distribution in the form of an annuity
described in Section 11.4(b) above irrevocably commences to the
Participant before the required beginning date, the date distribution is
considered to begin is the date distribution actually commences.
11.6 Designation of Beneficiary. Subject to the rules of Article
9, a Participant (or former Participant) may designate from time to time
any person or persons (who may be designated contingently or successively
and may be an entity other than a natural person) as his Beneficiary who
will be entitled to receive any undistributed amounts credited to the
Participant's separate Account under the Plan at the time of the
Participant's death. Any such Beneficiary designation by a Participant
shall be made in writing in the manner prescribed by the Plan
Administrator, and shall be effective only when filed with the Plan
Administrator during the Participant's lifetime. A Participant may change
or revoke his Beneficiary designation at any time in the manner prescribed
by the Plan Administrator. If any portion of the Participant's Account
is invested in insurance pursuant to Article 14, the Beneficiary of the
benefits under the insurance policy shall be the person or persons
designated under the policy. If the designated Beneficiary (or each of
the designated Beneficiaries) predeceases the Participant, the
Participant's Beneficiary designation shall be ineffective. If no
Beneficiary designation is in effect at the time of the Participant's
death, his Beneficiary shall be his estate.
11.7 Definitions.
(a) 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 (1) for each calendar year which has elapsed since the date life
expectancy was first calculated. If life expectancy is being
recalculated, the applicable life expectancy shall be the life expectancy
as so recalculated. The applicable calendar year shall be the first
distribution calendar year, and if life expectancy is being recalculated
such succeeding calendar year. If annuity payments commence in accordance
with Section 11.4(b) before the required beginning date, the applicable
calendar year is the year such payments commence. If distribution is in
the form of an immediate annuity purchased after the Participant's death
with the Participant's remaining interest, the applicable calendar year
is the year of purchase.
(b) Designated Beneficiary. The individual who is designated
as the Beneficiary under the Plan in accordance with Section 401(a)(9) and
the regulations thereunder.
(c) 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 pursuant to
Section 11.5 above.
(d) Life Expectancy.
(i) Life expectancy and joint and last survivor expectancy
are computed by use of the expected return multiples in Tables V and VI
of Section 1.72-9 of the income tax regulations.
(ii) Unless otherwise elected by the Participant (or
Spouse, in the case of distributions described in Section 11.5(b)(ii)
above) by the time distributions are required to begin, life expectancies
shall be recalculated annually. 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.
(e) 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) For purposes of subsection (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.
(f) 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 seventy and one-half
(70-1/2).
(ii) Transitional Rules. The required beginning date of
a Participant who attains age seventy and one-half (70-1/2) before January
1, 1988, shall be determined in accordance with (1) or (2) below:
(1) Non-Five Percent Owners. The required beginning
date of a Participant who is not a five percent (5%) 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 seventy and one-half (70 l/2)
occurs.
(2) Five Percent Owners. The required beginning date
of a Participant who is a five percent (5%) 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 seventy and one-half (70 l/2); or
(B) the earlier of the calendar year with or within
which ends the Plan Year in which the Participant becomes a five percent
(5%) owner, or the calendar year in which the Participant retires.
The required beginning date of a Participant who is not a five percent
(5%) owner who attains age seventy and one-half (70 l/2) during l988 and
who has not retired as of January l, 1989, is April l, 1990.
(iii) Five Percent Owner. A Participant is treated as a
five percent (5%) owner for purposes of this Section if such Participant
is a five percent (5%) owner as defined in Section 416(i) of the Code
(determined in accordance with Section 4l6 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 sixty-six and
one-half (66 l/2) or any subsequent year.
(iv) Once distributions have begun to a five percent (5%)
owner under this Section, they must continue to be distributed, even if
the Participant ceases to be a five percent (5%) owner in a subsequent
year.
11.8 Transitional Rule.
(a) Notwithstanding the other requirements of this Article and
subject to the requirements of Article 9, distribution on behalf of any
Employee, including a five percent (5%) owner, may be made in accordance
with all of the following requirements (regardless of when such
distribution commences):
(i) 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.
(ii) The distribution is in accordance with a method of
distribution designated by the Employee whose interest in the Trust is
being distributed or, if the Employee is deceased, by a Beneficiary of
such Employee.
(iii) Such designation was in writing, was signed by the
Employee or the Beneficiary, and was made before January l, 1984.
(iv) The Employee had accrued a benefit under the Plan as
of December 31, 1983.
(v) The method of distribution designated by the Employee
or the Beneficiary specifies the time at which distributions will be made
and in the case of any distribution upon the Employee's death, the
Beneficiaries of the Employee listed in order of priority.
(b) A distribution upon death will not be covered by this
transitional rule unless the information in the designation contains the
required information described above with respect to the distributions to
be made upon the death of the Employee.
(c) For any distribution which commences before January 1, 1984,
but continues after December 31, 1983, the Employee, or the Beneficiary,
to whom such distribution is being made, will be presumed to have
designated the method of distribution under which the distribution is
being made if the method of distribution was specified in writing and the
distribution satisfies the requirements in subsections (a)(i) and (a)(v).
(d) If a designation is revoked, any subsequent distribution
must satisfy the requirements of Section 401(a)(9) of the Code and the
regulations thereunder. If a designation is revoked subsequent to the
date distributions are required to begin, the Trust must distribute by the
end of the calendar year following the calendar year in which the
revocation occurs the total amount not yet distributed which would have
been required to have been distributed to satisfy Section 40l(a)(9) of the
Code and the regulations thereunder but for the Section 242(b)(2)
election. For calendar years beginning after December 31, 1988, such
distributions must meet the minimum distribution incidental benefit
requirements in Section l.401(a)(9)-2 of the income tax regulations. Any
changes in the designation will be considered to be a revocation of the
designation. However, the mere substitution or addition of another
beneficiary (one not named in the designation) under the designation will
not be considered to be a revocation of the designation, so long as such
substitution or addition does not alter the period over which
distributions are to be made under the designation, directly or indirectly
(for example, by altering the relevant measuring life). In the case in
which an amount is transferred or rolled over from one plan to another
plan, the rules in Q&A J-2 and Q&A J-3 shall apply.
11.9 Optional Forms of Benefit.
(a) Except to the extent benefits are required to be paid in the
form of an automatic joint and survivor annuity under Article 9, any
amount which a Participant shall be entitled to receive under the Plan
shall be distributed in one or a combination of the following ways:
(i) in a lump-sum payment of cash, the amount of which
shall be determined by redeeming all Shares credited to the Participant's
Account under the Plan as of the date of distribution;
(ii) in a lump-sum payment including a distribution in kind
of all Shares credited to the Participant's Account under the Plan as of
the date of distribution;
(iii) in substantially equal monthly, quarterly, or annual
installment payments of cash, or the distribution of Shares in kind, over
a period certain not to exceed the life expectancy of the Participant or
the joint and last survivor life expectancy of the Participant and his
Beneficiary, determined in each case as of the earlier of: (l) the end of
the Plan Year in which occurs the event entitling the Participant to a
distribution of benefits, or (2) the date such installments commence;
(iv) if permitted by the Sponsor, in monthly, quarterly,
or annual installment payments of cash, or the distribution of Shares in
kind, so that the amount distributed in each Plan Year equals the quotient
obtained by dividing the Participant's Account at the beginning of that
Plan Year by the joint and last survivor life expectancy of the
Participant and the Beneficiary for that Plan year. The life expectancy
will be computed using the recomputation method described in Section
II.7(d). Unless the Spouse of the retired Participant is the Beneficiary,
the actuarial present value of all expected payments to the retired
Participant must be more than fifty percent (50%) of the actuarial present
value of payments to the retired Participant and the Beneficiary;
(v) by application of the Participant's vested Account to
the purchase of a nontransferable immediate or deferred annuity contract,
on an individual or group basis. Unless the Spouse of the retired
Participant is the Beneficiary, the actuarial present value of all
expected payments to the retired Participant must be more than fifty
percent (50%) of the actuarial present value of payments to the retired
Participant and the Beneficiary.
(b) Notwithstanding any other provision of this Plan to the
contrary, if the Participant's Vested Account Balance exceeds three
thousand five hundred dollars ($3,500) the Plan Administrator may make an
immediate distribution of the Participant's Account during Plan Years
beginning after 1984 only if the Participant (or if married, the
Participant and Spouse, or where the Participant has died, the surviving
Spouse) consents in writing to distribution.
(c) If the Participant fails to select a method of distribution,
except as may be required by Article 9, all amounts which he is entitled
to receive under the Plan shall be distributed to him in a lump-sum
payment.
ARTICLE 12
WITHDRAWALS
12.1 Withdrawal of Nondeductible Voluntary Contributions. Subject
to the qualified election requirements of the survivor annuity rules of
Article 9 and also subject to Section 12.3, any Participant who has made
nondeductible voluntary contributions may, upon thirty (30) days notice
in writing filed with the plan Administrator, have paid to him all or any
portion of the fair market value of his nondeductible voluntary
contribution subaccount.
12.2 Hardship Withdrawals. If the Adoption Agreement so provides
and the Employer elects, this Section applies only to the profit sharing
contribution subaccount and only if the profit sharing allocation formula
selected in the Adoption Agreement is not integrated with Social Security.
(a) Demonstration of Need. Subject to the qualified election
requirements of the survivor annuity rules of Article 9 and also subject
to Section 12.3, if a Participant establishes an immediate and heavy
financial need for funds because of a hardship resulting from the purchase
or renovation of a primary residence, the education of the Participant or
a member of his immediate family (including special education), the
medical or personal expenses of the Participant or a member of his
immediate family, or other demonstrable emergency as determined by the
Plan Administrator on a uniform and nondiscriminatory basis, the
Participant shall be permitted, subject to the limitations of subsection
(b) below, to make a hardship withdrawal of an amount credited to his
profit-sharing contribution subaccount under the Plan.
(b) Amount of Hardship Withdrawal. The amount of any hardship
withdrawal by a Participant under subsection (a) above shall not exceed
the amount required to meet the immediate financial need created by the
hardship and not reasonably available from other resources of the
Participant.
(c) Prior Withdrawal of Nondeductible Voluntary Participant
Contributions. A Participant shall not be permitted to make a hardship
withdrawal under subsection (a) above unless he has already withdrawn, in
accordance with Section 12.l, any amount credited to his nondeductible
voluntary contributions subaccount.
l2.3 Manner of Making Withdrawals. Any withdrawal by a Participant
under the Plan shall be made only after the Participant files a written
request with the Plan Administrator specifying the nature of the
withdrawal (and the reasons therefor, if a hardship withdrawal), and the
amount of funds requested to be withdrawn. Upon approving any withdrawal,
the Plan Administrator shall furnish the Trustee with written instructions
directing the Trustee to make the withdrawal in a lump sum payment of cash
to the Participant. In making any withdrawal payment, the Trustee shall
be fully entitled to rely on the instructions furnished by the Plan
Administrator, and shall be under no duty to make any inquiry or
investigation with respect thereto. If the Participant is married, his
spouse must consent to the withdrawal pursuant to a qualified election (as
defined in Section 9.4(c)) within the 90-day period ending on the date of
withdrawal.
12.4 Limitations on Withdrawals. The Plan Administrator may
prescribe uniform and nondiscriminatory rules and procedures limiting the
number of times a Participant may make a withdrawal under the Plan during
any Plan Year, and the minimum amount a Participant may withdraw on any
single occasion.
ARTICLE 13
LOANS
13.1 Amount of Loan.
(a) If the Adoption Agreement so provides and the Employer
elects to allocate or permits Participants to allocate a portion of their
Accounts to Participant loans, such loans shall be made available to all
Participants and Beneficiaries on a reasonably equivalent basis. Loans
shall be made only upon receipt of a written request from the Participant
in accordance with the provisions of this Article 13. Unless the
provisions of Section 9.6 apply, such request must be accompanied by a
written consent of the Participant's spouse, if any. Spousal consent
shall be obtained no earlier than the beginning of the 90-day period that
ends on the date on which the Participant's Account is pledged as security
for the loan. The consent must be in writing, must acknowledge the effect
of the loan, and must be witnessed by a Plan representative or notary
public. Such consent shall thereafter be binding with respect to the
consenting spouse or any subsequent spouse with respect to that loan. A
new consent shall be required if the Participant's Account balance is used
for renegotiation, extension, renewal, or other revision of the loan. If
a valid spousal consent has been obtained, then, notwithstanding any other
provision of this 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 100% of the Participant's vested Account balance
(determined without regard to the preceding sentence) is payable to the
Surviving Spouse, then 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. Notwithstanding any other provision of this Article 13,
no loan will be made to any Owner-Employee or to any shareholder-employee.
For purposes of this requirement, a shareholder- employee means an
employee or officer of an electing small business (Subchapter S)
corporation who owns (or is considered as owning within the meaning of
Section 318(a)(i) of the Code, on any day during the taxable year of such
corporation), more than five percent of the outstanding stock of the
corporation. Loans shall not be made to Highly Compensated Employees in
an amount greater than the amount made available to other Employees.
(b) No loan to any Participant or Beneficiary can be made to the
extent that such loan when added to the outstanding balance of all other
loans to the Participant or Beneficiary would exceed the lesser of (a)
$50,000 reduced by the excess (if any) of the highest outstanding balance
of loans during the one year period ending on the day before the loan is
made, over the outstanding balance of loans from the Plan on the date the
loan is made, or (b) one-half the present value of the nonforfeitable
Accrued benefit of the Participant. An assignment or pledge of any
portion of the Participant's interest in the Plan and a loan, pledge or
assignment with respect to any insurance contract purchased under the
Plan, will be treated as a loan under this paragraph. For purposes of the
above limitation, all loans from plans of the Affiliated Employers shall
be aggregated.
13.2 Manner of Making Loans. A request by a Participant for a loan
shall be made in writing to the Plan Administrator and shall specify the
amount of the loan, and the subaccount(s) or Shares of the Participant
from which the loan should be made. The terms and conditions on which the
Plan Administrator shall approve loans under the Plan shall be applied on
a uniform and nondiscriminatory basis with respect to all Participants.
If a Participant's request for a loan is approved by the Plan
Administrator, the Plan Administrator shall furnish the Trustee with
written instructions directing the Trustee to make the loan in a lump sum
payment of cash to the Participant. In making any loan payment under this
Article 13, the Trustee shall be fully entitled to rely on the
instructions furnished by the Plan Administrator, and shall be under no
duty to make any inquiry or investigation with respect thereto.
13.3 Terms of Loan. Loans shall be made on such terms and subject
to such limitations as the Plan Administrator may prescribe provided that
any such loan shall be evidenced by a written note, shall bear a
reasonable rate of interest on the unpaid principal thereof, shall be
adequately secured, and shall be repaid (both principal and interest), not
less frequently than quarterly, by the Participant over a period not to
exceed five (5) years, unless such loan is solely for the purpose of
acquiring a dwelling unit which, within a reasonable time (determined when
the loan is made) will be used as the principal residence of the
Participant. The rate of interest to be charged shall not violate any
applicable usury law, and shall be a rate determined by the Employer in
accordance with the rates quoted by representative financial institutions
in the local area for similar loans.
13.4 Security for Loan. Any loan to a Participant under the Plan
shall be secured by the pledge of all the Participant's right, title, and
interest in the Trust. Such pledge shall be evidenced by the execution
of a promissory note by the Participant which shall provide that, in the
event of any default by the Participant on a loan repayment, the Plan
Administrator shall be authorized (to the extent permitted by law) to
deduct the amount of the loan outstanding and any unpaid interest due
thereon from the Participant's wages or salary to be thereafter paid by
the Employer, and to take any and all other actions necessary and
appropriate to enforce collection of the unpaid loan. In the event the
value of the Participant's vested Account at any time is less than 125
percent of the outstanding loan balance, the Plan Administrator may
request additional collateral of sufficient value to adequately secure the
repayment of the loan. Failure to provide such additional collateral upon
a request of the Plan Administrator shall constitute an event of default.
13.5 Segregated Investment. Loans shall be considered a Participant
directed investment and for the limited purposes of allocating earnings
and losses pursuant to Article 5 shall not be considered a part of the
common fund under the Trust.
13.6 Repayment of Loan. The Plan Administrator shall have the sole
responsibility for ensuring that a Participant timely makes all loan
repayments, and for notifying the Trustee in the event of any default by
the Participant on the loan. Each loan repayment shall be paid to the
Trustee, and shall be accompanied by written instructions from the Plan
Administrator that identify the Participant on whose behalf the loan
repayment is being made.
13.7 Default on Loan. In the event of a termination of the
Participant's employment with the Affiliated Employers or a default by a
Participant on a loan repayment, all remaining payments on the loan shall
be immediately due and payable. The Employer shall, upon the direction
of the Plan Administrator, to the extent permitted by law, deduct the
total amount of the loan outstanding and any unpaid interest due thereon
from the wages or salaries payable to the Participant by the Employer in
accordance with the Participant's promissory note. In addition, the Plan
Administrator shall take any and all other actions necessary and
appropriate to enforce collection of the unpaid loan. However, attachment
of the Participant's Account pledged as security will not occur until a
distributable event occurs under the Plan.
13.8 Unpaid Amounts. Upon the occurrence of a Participant's
retirement or death, or upon a Participant's fifth Break in Service or
earlier distribution, the unpaid balance of any loan, including any unpaid
interest, shall be deducted from any payment or distribution from the
Trust to which such Participant or his Beneficiary may be entitled and his
vested interest in his Account shall be reduced. If after charging the
Participant's Account with the unpaid balance of the loan, including any
unpaid interest, there still remains an unpaid balance of any such loan
and interest, then the remaining unpaid balance of such loan and interest
shall be charged against any property pledged as security with respect to
such loan.
ARTICLE 14
INSURANCE
14.1 Insurance. If the Adoption Agreement so provides and the
Employer elects to allocate or permit Participants to allocate a portion
of their Accounts to purchase life insurance, the ensuing subsections of
this Article shall apply.
14.2 Policies. The Plan Administrator shall instruct the Trustee
to procure one or more life insurance policies on the Participant's life,
the terms of which shall conform to the requirements of the Plan and the
Code. The policies and the companies which write them shall be subject
to the approval of the Plan Administrator and the Trustee. The Trustee
shall procure and hold such policies in its name or the name of a nominee
who shall act solely as agent for the Trustee and pursuant to the
directions of the Trustee. The Trustee shall be the sole owner of all
contracts purchased hereunder, and it shall be so designated in each
policy and application therefor.
14.3 Beneficiary. The Participant shall have the right to name the
Beneficiary and to choose the benefit option under the policy for the
Beneficiary. Notwithstanding the foregoing, a Participant's spouse shall
be the designated beneficiary of the proceeds in all circumstances unless
a Qualified Election has been made in accordance with Section 9.4(c), if
applicable. The Trustee shall designate the Beneficiary of all such
policies in accordance with the written directions of the Plan
Administrator and the policy terms. Such designation may be outlined in
the original application as forwarded to the issuing company. However,
the Plan Administrator shall have available and shall furnish the
Participant with the necessary forms for any Beneficiary designation or
change of Beneficiary and it will keep a copy of all executed designations
as a part of its records.
Upon a Participant's death, the Plan Administrator will promptly furnish
the Trustee a copy of the last designation and shall authorize the Trustee
to complete such forms as the insurance company may require in order to
effect the benefit option. Under no circumstances shall the Trust retain
any part of the insurance proceeds.
14.4 Payment of Premiums. Subject to the provisions of Sections 7.3
and 14.5, premium payments to the insurer may be made only by the Trustee
with respect to any insurance policy purchased on behalf of a Participant
and shall constitute first an investment of a portion of the funds of the
Participant's Employer Contribution subaccounts up to the maximum amount
of such subaccounts permitted to be applied toward such premium payments,
as provided in Section 14.5 hereof. If a Participant's subaccounts lack
sufficient assets to pay premiums on a life insurance policy due on his
behalf, the Trustee, at the direction of the Plan Administrator, acting
upon the request of the Participant, shall borrow under the policy loan
provisions, if any, the amount necessary to pay such premiums, using the
cash value of the insurance as security, or the Trustee may liquidate
assets held in the Participant's Account, in the same order, of sufficient
value to pay such premiums. Any loans shall be repaid by the application
of earnings, contributions, or forfeitures to the Account of the
Participant insured by such policy. In the absence of the Plan
Administrator's direction to borrow or to liquidate assets to pay
premiums, the life insurance policy shall be put on a paid-up basis or,
if it has no cash value, cancelled.
14.5 Limitation on Insurance Premiums. The Trustee shall not pay,
nor shall anyone on behalf of the Trustee pay, any life insurance premium
for any Participant out of the Participant's Employer Contribution
subaccounts unless the amount of such payment, plus all premiums
previously so paid on behalf of the Participant, is less than fifty
percent (50%) of the Employer Contributions and forfeitures allocated to
the Participant's Employer Contribution subaccounts as determined on the
date such premium is paid with respect to reserve life insurance policies
and shall be less than twenty-five percent (25%) thereof with respect to
non-reserve (term) policies, universal life insurance contracts, and all
other life insurance contracts which are not reserve life insurance
contracts or, if both reserve life and non-reserve insurance are purchased
on the life of any Participant, the sum of the term insurance premium plus
one-half of the reserve life premiums may not exceed twenty-five percent
(25%) of the Employer Contributions made on behalf of such Participant.
For purposes of these incidental insurance provisions, reserve life
insurance contracts are contracts with both nondecreasing death benefits
and nonincreasing premiums. Dividends received on life insurance policies
shall be considered a reduction of premiums paid in such computations.
If payment of premiums on a Participant's life insurance policy
is prohibited because of the limitation, the Trustee, as directed by the
Plan Administrator, shall permit the Participant to maintain that part of
the coverage made available by the prohibited premiums, either by payment
of the amount of the prohibited premium by the Participant from sources
other than the Trust or by distributing the policy to the extent of the
Participant's vested interest to the Participant and eliminating it from
the Trust.
Nothing contained in the foregoing provisions of Section 14.4
and this Section 14.5 shall be deemed to authorize the payment of any
premium or premiums for any Participant which would result in a failure
to maintain any mandatory investment in Shares required by the Sponsor in
the Account or subaccounts of any such Participant.
14.6 Insurance Company. No insurance company which may issue any
policies for the purposes of this Plan shall be required to take or permit
any action contrary to the provisions of said policies, nor shall such
insurance company be deemed to be a party to, or responsible for the
validity of, this Plan for any purpose. No such insurance company shall
be required to look into the terms of this Plan or question any action of
the Trustee hereunder, nor be responsible to see that any action of the
Trustee is authorized by the terms of this Plan. Any such issuing
insurance company shall be fully discharged from any and all liability for
any amount paid to the Trustee or paid in accordance with the direction
of the Trustee, as the case may be, or for any change made or action taken
by such insurance company upon such direction; and no such insurance
company shall be obliged to see the distribution or further application
of any monies paid by it. The certificate of the Trustee signed by one
of its trust officers, assistant secretary, or other authorized
representative thereof may be received by any insurance company as
conclusive evidence of any of the matters mentioned in this Plan, and any
insurance company shall be fully protected in taking or permitting any
action on the faith thereof and shall incur no liability or responsibility
for so doing.
14.7 Distribution of Policies. Upon a Participant's death, the
Trustee, upon direction of the Administrator, shall procure the payment
of the proceeds of any policy held by the Participant in accordance with
its terms and this Plan. The Trustee shall be required to pay over all
the proceeds of any policy to the Participant's designated Beneficiary in
accordance with the distribution provisions of this Plan. A Participant's
spouse will be the designated beneficiary unless a qualified election has
been made in accordance with Section 9.4(c) of the Plan. Under no
circumstances shall the Trust retain any part of the proceeds. Subject
to the joint and survivor annuity requirements of Article 9, the policies
shall be converted or distributed upon commencement of benefits in
accordance with the provisions of this Section 14.7. Upon a Participant's
retirement at or after his Normal Retirement Date, unless there is a
single sum distribution in which case any policy shall be distributed, any
such policy shall be converted to a paid-up contract and delivered to the
Participant but the Administrator may, with the Participant's consent,
direct that a portion or all of such cash value of the policy be converted
to provide retirement income as permitted within the terms of the policy
and this Plan. Upon a Participant's retirement due to Total and Permanent
Disability, any such policy shall be held for his account and assigned or
delivered to the Participant in addition to any other benefits provided
by this Plan. Upon a Participant's termination of employment for reasons
other than death, Total and Permanent Disability, or retirement as stated
above, to the extent of life insurance purchased by Employer
contributions, he shall be entitled to a vested interest in any policy
held for his account as his interest is vested in the remainder of his
Employer Contribution subaccounts (exclusive of any such policy).
Whenever the Participant is entitled to one-hundred percent (100%)
vesting, then such policy shall be assigned and delivered to the
Participant in accordance with its terms and the terms of the Plan.
Whenever the Participant is entitled to a vesting of less than one-hundred
percent (100%), then the Participant shall be entitled to a vested
interest of the cash surrender value of any such policy equal to his
percentage vested interest in his Employer Contribution subaccounts,
exclusive of the policy, and one of the following distribution procedures
shall apply:
(a) If the nonvested portion of the cash surrender value of all
policies held for the Participant's Account is less than the amount of his
vested termination benefit exclusive of the policies, then, such policy
shall be assigned to the Participant and the remainder of the
Participant's vested interest in the Participant's Employer Contribution
subaccounts shall be reduced by the cash surrender value of the nonvested
portion of all policies, after which it shall be paid or distributed to
the Participant in accordance with the terms of the Plan; or
(b) If the nonvested portion of the cash surrender value of all
policies held for the Participant's Account exceeds the Participant's
vested interest in the Employer Contribution subaccount exclusive of such
policies, the Participant shall be given the opportunity to purchase such
policies by paying to the Trustee the amount of such excess within thirty
(30) days after notice to him of the amount to be paid. Upon receipt of
such payment said policy shall be assigned and delivered to the
Participant to the full satisfaction of all termination benefits under
this Plan. Any such policy not so purchased shall be surrendered by the
Trustee for its cash value and the proceeds thereof deposited in the Trust
for reallocation pursuant to Article 5.
It is the intention hereof that the total termination benefit
of a Participant whose interest is not fully vested shall be equal to the
sum of the vested percentage of his Employer Contribution subaccounts
exclusive of all such policies and the same percentage of the cash value
of all such policies held for his Account. To the extent possible under
the foregoing provisions such total termination benefits shall be
satisfied by the transfer and delivery to the Participant of one or more
such policies with the balance, if any, to be paid in cash or in kind.
14.8 Policy Features. The Trustee shall arrange, where possible,
that all policies purchased for the benefit of a Participant shall have
the same dividend option which shall be on the premium reduction plan, and
as nearly as may be possible all policies issued under the Plan shall have
the same anniversary date. To the extent any dividends or credits earned
on insurance policies are not applied toward the next premiums due, they
shall be allocated to the Participant's Employer Contribution subaccount
in the same manner as a Participant directed investment.
14.9 Changed Conditions. From time to time because of changed
conditions, the Trustee, acting at the direction of the Plan Administrator
upon the election of the Participant concerned, shall obtain an additional
contract or policy or make such change in the contracts or policies
maintained by the Trustee on the life of the Participant as may be
required by such changed conditions, within the limits permitted by the
insurance company which issued or is requested to issue a contract and the
limits established by this Plan.
14.10 Conflicts. In the event of any conflict between the terms of
the Plan and the provisions of any contract issued hereunder, the terms
of the Plan shall control.
ARTICLE 15
ADMINISTRATION
15.1 Duties and Responsibilities of Fiduciaries; Allocation of
Fiduciary Responsibility. A fiduciary to the Plan shall have only those
specific powers, duties, responsibilities, and obligations as are
explicitly given him under the Plan and Trust Agreement. In general, the
Employer shall have the sole responsibility for making contributions to
the Plan required under Article 4; appointing the Trustee and the Plan
Administrator; and determining the funds available for investment under
the Plan. The Plan Administrator shall have the sole responsibility for
the administration of the Plan, as more fully described in Section 15.2.
It is intended that each fiduciary shall be responsible only for the
proper exercise of his own powers, duties, responsibilities, and
obligations under the Plan and Trust Agreement, and shall not be
responsible for any act or failure to act of another fiduciary. A
fiduciary may serve in more than one fiduciary capacity with respect to
the Plan.
15.2 Powers and Responsibilities of the Plan Administrator.
(a) Administration of the Plan. The Plan Administrator shall
have all powers necessary to administer the Plan, including the power to
construe and interpret the Plan documents; to decide all questions
relating to an individual's eligibility to participate in the Plan; to
approve and insure the repayment of any loan to a Participant under the
Plan; to resolve any claim for benefits in accordance with Section 15.6;
and to appoint or employ advisors, including legal counsel, to render
advice with respect to any of the Plan Administrator's responsibilities
under the Plan. Any construction, interpretation, or application of the
Plan by the Plan Administrator shall be final, conclusive, and binding.
All actions by the Plan Administrator shall be taken pursuant to uniform
standards applied to all persons similarly situated. The Plan
Administrator shall have no power to add to, subtract from, or modify any
of the terms of the Plan, or to change or add to any benefits provided by
the Plan, or to waive or fail to apply any requirements of eligibility for
a benefit under the Plan.
(b) Records and Reports. The Plan Administrator shall be
responsible for maintaining sufficient records to reflect the eligibility
computation periods in which an Employee is credited with one or more
Years of Service for purposes of determining his eligibility to
participate in the Plan, and the Compensation of each Participant for
purposes of determining the amount of contributions that may be made by
or on behalf of the Participant under the Plan. The Plan Administrator
shall be responsible for submitting all required reports and notifications
relating to the Plan to Participants or their Beneficiaries, the Internal
Revenue Service and the Department of Labor.
(c) Furnishing Trustee with Instructions. The Plan
Administrator shall be responsible for furnishing the Trustee with written
instructions regarding all contributions to the Trust, all distributions
to Participants in accordance with Article 10, all withdrawals by
Participants in accordance with Article 12, all loans to Participants in
accordance with Article 13, and all purchases of life insurance in
accordance with Article 14. In addition, the Plan Administrator shall be
responsible for furnishing the Trustee with any further information
respecting the Plan which the Trustee may request for the performance of
its duties or for the purpose of making any returns to the Internal
Revenue Service or Department of Labor as may be required of the Trustee.
(d) Rules and Decisions. The Plan Administrator may adopt such
rules as it deems necessary, desirable, or appropriate in the
administration of the Plan. All rules and decisions of the Plan
Administrator shall be applied uniformly and consistently to all
Participants in similar circumstances. When making a determination or
calculation, the Plan Administrator shall be entitled to rely upon
information furnished by a Participant or Beneficiary, the Employer, the
legal counsel of the Employer, or the Trustee.
(e) Application and Forms for Benefits. The Plan Administrator
may require a Participant or Beneficiary to complete and file with it an
application for a benefit, and to furnish all pertinent information
requested by it. The Plan Administrator may rely upon all such
information so furnished to it, including the Participant's or
Beneficiary's current mailing address.
(f) Facility of Payment. Whenever, in the Plan Administrator's
opinion, a person entitled to receive a payment of a benefit or
installment thereof is under a legal disability or is incapacitated in any
way so as to be unable to manage his financial affairs, it may direct the
Trustee to make payments to the legal representative or court appointed
guardian of such person.
15.3 Allocation of Duties and Responsibilities. The Plan
Administrator may by written instrument allocate among its members or
employees any of its duties and responsibilities not already allocated
under the Plan or may designate persons other than members or employees
to carry out any of the Plan Administrator's duties and responsibilities
under the Plan. Any such duties or responsibilities thus allocated must
be described in the written instrument. If a person other than an
Employee of the Employer is so designated, such person must acknowledge
in writing his acceptance of the duties and responsibilities allocated to
him.
15.4 Appointment of the Plan Administrator. The Employer shall
designate in the Adoption Agreement the Plan Administrator who shall
administer the Employer's Plan. Such Plan Administrator may consist of
an individual, a committee of two or more individuals, whether or not, in
either such case, the individual or any of such individuals are Employees
of the Employer, a consulting firm or other independent agent, the Trustee
(with its consent), or the Employer itself. The Plan Administrator shall
be charged with the full power and the responsibility for administering
the Plan in all its details. If no Plan Administrator has been appointed
by the Employer, or if the person designated as Plan Administrator by the
Employer is not serving as such for any reason, the Employer shall be
deemed to be the Plan Administrator of the Plan. The Plan Administrator
may be removed by the Employer, or may resign by giving notice in writing
to the Employer, and in the event of the removal, resignation, or death,
or other termination of service by the Plan Administrator, the Employer
shall, as soon as practicable, appoint a successor Plan Administrator,
such successor thereafter to have all of the rights, privileges, duties,
and obligations of the predecessor Plan Administrator.
15.5 Expenses. The Employer shall pay all expenses authorized and
incurred by the Plan Administrator in the administration of the Plan
except to the extent such expenses are paid from the Trust.
15.6 Liabilities. The Plan Administrator and each person to whom
duties and responsibilities have been allocated pursuant to Section 15.3
may be indemnified and held harmless by the Employer with respect to any
alleged breach of responsibilities performed or to be performed hereunder.
The Employer and each Affiliated Employer shall indemnify and hold
harmless the Sponsor against all claims, liabilities, fines, and
penalties, and all expenses reasonably incurred by or imposed upon him
(including, but not limited to, reasonable attorney's fees) which arise
as a result of actions or failure to act in connection with the operation
and administration of the Plan.
15.7 Claims Procedure.
(a) Filing a Claim. Any Participant or Beneficiary under the
Plan may file a written claim for a Plan benefit with the Plan
Administrator or with a person named by the Plan Administrator to receive
claims under the Plan.
(b) Notice of Denial of Claim. In the event of a denial or
limitation of any benefit or payment due to or requested by any
Participant or Beneficiary under the Plan ("claimant"), claimant shall be
given a written notification containing specific reasons for the denial
or limitation of his benefit. The written notification shall contain
specific reference to the pertinent Plan provisions on which the denial
or limitation of his benefit is based. In addition, it shall contain a
description of any other material or information necessary for the
claimant to perfect a claim, and an explanation of why such material or
information is necessary. The notification shall further provide
appropriate information as to the steps to be taken if the claimant wishes
to submit his claim for review. This written notification shall be given
to a claimant within 90 days after receipt of his claim by the Plan
Administrator unless special circumstances require an extension of time
for processing the claim. If such an extension of time for processing is
required, written notice of the extension shall be furnished to the
claimant prior to the termination of said 90-day period, and such notice
shall indicate the special circumstances which make the postponement
appropriate.
(c) Right of Review. In the event of a denial or limitation
of his benefit, the claimant or his duly authorized representative shall
be permitted to review pertinent documents and to submit to the Plan
Administrator issues and comments in writing. In addition, the claimant
or his duly authorized representative may make a written request for a
full and fair review of his claim and its denial by the Plan
Administrator; provided, however, that such written request must be
received by the Plan Administrator (or its delegate to receive such
requests) within 60 days
after receipt by the claimant of written notification of the denial or
limitation of the claim. The 60-day requirement may be waived by the Plan
Administrator in appropriate cases.
(d) Decision on Review. A decision shall be rendered by the
Plan Administrator within 60 days after the receipt of the request for
review, provided that where special circumstances require an extension
of time for processing the decision, it may be postponed on written notice
to the claimant (prior to the expiration of the initial 60-day period) for
an additional 60 days, but in no event shall the decision be rendered more
than 120 days after the receipt of such request for review. Any decision
by the Plan Administrator shall be furnished to the claimant in writing
and shall set forth the specific reasons for the decision and the specific
plan provisions on which the decision is based.
(e) Court Action. No Participant or Beneficiary shall have the
right to seek judicial review of a denial of benefits, or to bring any
action in any court to enforce a claim for benefits prior to filing a
claim for benefits or exhausting his rights to review under this Section
13.7.
ARTICLE 16
AMENDMENT, TERMINATION, AND MERGER
16.1 Amendments.
(a) The Employer hereby irrevocably delegates (except as
provided in (b) below), to the Sponsor the right and power to amend the
Plan and the Trust Agreement at any time and from time to time, and the
Employer by adopting the Plan and entering into the Trust Agreement, shall
be deemed to have consented to any such amendment. The Sponsor shall
notify the Employer of any amendment to the Plan and the Trust Agreement.
(b) The Employer reserves the right at any time to amend or
discontinue the Plan or the Trust Agreement or give notice of termination
by delivering to the Trustee a written copy of such change signed by the
Employer; provided that, if any such amendment by the Employer is not an
amendment permitted under the Adoption Agreement or under paragraph (c)
below, the Plan shall no longer be deemed part of this prototype Plan.
In the event of such an amendment not described in paragraph (c), the
Employer must obtain a separate determination letter from the Internal
Revenue Service to continue reliance on the Plan's qualified status. No
such amendment may:
(i) violate the exclusive benefit limitations of Section
15.1;
(ii) violate the anti-cutback rules of Section 8.4;
(iii) vest in the Employer any interest or control over any
assets of the Trust;
or
(iv) change any of the rights, duties and powers of the
Trustee without the Trustee's written consent.
(c) The Employer may from time to time make any amendment to
the Plan (1) to change the choice of options in the Adoption Agreement,
(2) to add overriding language in the Adoption Agreement when such
language is necessary to satisfy Section 415 or Section 416 of the Code
because of the required aggregation of multiple plans, and (3) to add
certain model amendments published by the Internal Revenue Service which
specifically provide that their adoption will not cause the Plan to be
treated as individually designed.
(d) An Employer that amends the Plan for any reason other than
as specified in paragraph (c) above, including an amendment with respect
to a waiver of the minimum funding requirement 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.
16.2 Plan Termination; Discontinuance of Employer Contributions.
(a) The Employer may terminate the Plan at any time in whole
or in part. In the event of the dissolution, merger, consolidation, or
reorganization of the Employer, the Plan shall automatically terminate and
the Trust shall be liquidated unless the Plan is continued by a successor
employer in accordance with Section 16.3.
(b) Upon the complete or partial termination of the Plan or the
complete discontinuance of Employer Contributions under the Plan, the
separate Account of all Participants affected thereby shall become fully
vested and nonforfeitable, and the Plan Administrator shall direct the
Trustee to distribute assets remaining in the Trust, after payment of any
expenses properly chargeable thereto, to Participants or their
Beneficiaries unless directed by the Employer to continue the Trust and
distribute Participant's accounts at such other time and in such other
nondiscriminatory manner as the Employer shall designate, provided that
such distribution shall be in accordance with the provisions of Articles
9 and 10. Upon the completion of such distribution, the Trustee shall be
relieved of all further liability with respect to the assets so
distributed.
16.3 Successor Employer. In the event of the dissolution, merger,
consolidation, or reorganization of the Employer, provision may be made
by which the Plan and Trust shall be continued by the successor employer,
in which case such successor employer shall be substituted for the
Employer under the Plan. The substitution of the successor employer shall
constitute an assumption of Plan liabilities by the successor employer,
and the successor employer shall have all powers, duties, and
responsibilities of the Employer under the Plan.
16.4 Merger, Consolidation, or Transfer. There shall be no merger
or consolidation of the Plan with, or transfer of assets or liabilities
of the Plan to, any other plan of deferred compensation maintained or to
be established for the benefit of all or some of the Participants of the
Plan, unless each Participant would (if either this Plan or such other
plan then terminated) receive a benefit immediately after the merger,
consolidation or transfer which is equal to or greater than the benefit
the Participant would have been entitled to receive immediately before the
merger, consolidation, or transfer (if this Plan had then terminated).
ARTICLE 17
MISCELLANEOUS
17.1 Exclusive Benefit of Participants and Beneficiaries.
(a) All assets of the Trust shall be retained for the exclusive
benefit of Participants and their Beneficiaries, and shall be used only
to pay benefits to such persons or to pay the fees and expenses of the
Trust. The assets of the Trust shall not revert to the benefit of the
Employer, except as otherwise specifically provided in Section 17.1(b).
(b) To the extent permitted or required by ERISA and the Code,
contributions to the Trust under this Plan are subject to the following
conditions:
(i) If a contribution or any part thereof is made to the
Trust by the Employer under a mistake of fact, such contribution or part
thereof shall be returned to the Employer within one year after the date
the contribution is made;
(ii) Contributions to the Trust are specifically
conditioned on the initial qualification of the Plan under Section 401 of
the Code, and in the event the Plan is determined not to meet the initial
qualification requirements of Section 401 of the Code, contributions made
in respect of any period for which such requirements are not met shall be
returned to the Employer within one year after the Plan is determined not
to meet such requirements, but only if application for qualification is
made by the time prescribed by law for filing the Employer's return for
the taxable year for which the Plan is adopted, or such later date as the
Secretary of the Treasury may prescribe; and
(iii) Contributions to the Trust are specifically
conditioned on their deductibility under the Code and, to the extent a
deduction is disallowed for any such contribution, such amount shall be
returned to the Employer within one year after the date of the
disallowance of the deduction.
17.2 Nonguarantee of Employment. Nothing contained in this Plan
shall be construed as a contract of employment between the Employer and
any Employee, or as a right of any Employee to be continued in the
employment of the Employer, or as a limitation of the right of the
Employer to discharge any of its Employees, with or without cause.
17.3 Rights to Trust Assets. No Employee, Participant, or
Beneficiary shall have any right to, or interest in, any assets of the
Trust upon termination of employment or otherwise, except as provided
under the Plan. All payments of benefits under the Plan shall be made
solely out of the assets of the Trust.
17.4 Nonalienation of Benefits. Except as provided under Article
13 with respect to Plan loans, benefits payable under the Plan shall not
be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, garnishment, execution, or levy
of any kind, voluntary or involuntary; provided, however, that the Trustee
shall not be hereby precluded from complying with a qualified domestic
relations order described in Section 414(p) of the Code, or any domestic
relations order entered before January 1, 1985, requiring deduction from
distributions to a recipient in pay status for alimony or support
payments. Any attempt to anticipate, alienate, sell, transfer, assign,
pledge, encumber, charge, or otherwise dispose of any right to benefits
payable hereunder shall be void. The Trust shall not in any manner be
liable for, or subject to, the debts, contracts, liabilities, engagements,
or torts of any person entitled to benefit hereunder.
17.5 Aggregation Rules.
(a) Except as provided in Article 6, all employees of the
Employer or any Affiliated Employer will be treated as employed by a
single employer.
(b) 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.
(c) 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.
(d) 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, than 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.
(e) For purposes of paragraphs (b), (c) and (d), 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:
(i) own the entire interest in an unincorporated trade or
business, or
(ii) 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 an 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.
17.6 Failure of Qualification. If this Plan or any part of it fails
to attain or retain qualification, such plan will no longer participate
in this prototype paired defined contribution plan and will be considered
an individually designed plan.
17.7 Applicable Law. Except to the extent otherwise required by
ERISA, as amended, this Plan shall be construed and enforced in accordance
with the laws of the state in which the Employer's principal place of
business is located, as specified in the Adoption Agreement.
-------------------------------
(Name of Employer)
By: -------------------------------
(Name and Title)
-------------------------------
(Date)
<PAGE>
TRUST AGREEMENT
The Employer has established a Plan for the benefit of Participants
therein pursuant to Section 401 of the Internal Revenue Code of 1954. As
part of the Plan the Employer has requested such person or persons
(individual, corporate, or other entity), as may be designated in the
Adoption Agreement, to serve as Trustee pursuant to the Trust established
for the investment of contributions under the Plan upon the terms and
conditions set forth in this Agreement.
Unless the context of this Trust Agreement clearly indicates
otherwise, the terms defined in Article 2 of the Plan entered into by the
Employer, of which this Trust Agreement forms a part, shall, when used
herein, have the same meaning as in the Plan.
ARTICLE I - ACCOUNTS
1.1 Establishing Accounts. The Trustee shall open and maintain a
Trust account for the Plan and, as part thereof, Participants' Accounts
for such individuals as the Plan Administrator shall, from time to time,
give written notice to the Trustee as being Participants in the Plan. The
Trustee shall also open and maintain such other subaccounts as may be
appropriate or desirable to aid in the administration of the Plan.
Separate subaccounts shall be maintained for each Participant and shall
be credited with the contributions made by the Employer and with
forfeitures allocated to each such Participant pursuant to the Plan (and
all earnings thereon). If nondeductible voluntary contributions by
Participants are permitted by the Plan, the Trustee shall open and
maintain as a part of the Trust a separate subaccount for each Participant
who makes such nondeductible voluntary contributions, each such subaccount
to be credited with the Participant's voluntary contributions (and all
earnings attributable to such contributions). If trustee transfers or
rollover contributions from another qualified plan are received, the
Trustee shall open and maintain a separate rollover subaccount for each
Participant, each such subaccount to be credited with the Participant's
trustee transfers or rollover contributions (and all earnings attributable
to such contributions).
1.2 Charges Against Accounts. Upon receipt of written instructions
from the Administrator, the Trustee shall charge the appropriate
subaccount of the Participant for any withdrawals or distributions made
under the Plan and any forfeiture, which may be required under the Plan,
of unvested interests attributable to Employer Contributions. The Plan
Administrator will give written instructions to the Trustee specifying the
manner in which Employer Contributions and any forfeiture of the nonvested
portion of Accounts, as allocated by the Plan Administrator in accordance
with the provisions of the Plan, are to be credited to the various
Accounts maintained for Participants.
1.3 Prospectus to be Provided. The Plan Administrator shall ensure
that a Participant who makes a nondeductible voluntary contribution has
previously received or receives a copy of the then current prospectus
relating to the Shares. Delivery of such a nondeductible voluntary
contribution, pursuant to the provisions of the Plan by the Plan
Administrator to the Trustee shall entitle the Trustee to assume that the
Participant has received such a prospectus.
ARTICLE II - RECEIPT OF CONTRIBUTIONS
The Trustee shall accept and hold in the Trust contributions made by
the Employer and Participants under the Plan. The Administrator shall
give written instructions to the Trustee specifying the Participants'
Accounts to which contributions are to be credited, the amount of each
such credit which is attributable to Employer Contributions, and the
amount, if any, which is attributable to the Participant's nondeductible
voluntary contributions. If written instructions are not received by the
Trustee, or if such instructions are received but are deemed by the
Trustee to be unclear, upon notice to the Employer, the Trustee may elect
to hold all or part of any such contribution in cash, without liability
for rising security prices or distributions made, pending receipt by it
from the Plan Administrator of written instructions or other
clarification, or the Trustee may return the contribution to the Employer.
If any contributions or earnings are less than any minimum which the then
current prospectus for the Shares requires, the Trustee may hold the
specified portion of contributions or earnings in cash, without interest,
until such time as the proper amount has been contributed or earned so
that the investment in the Shares required under the Plan may be made.
ARTICLE III - INVESTMENT POWERS OF THE TRUSTEE
3.1 Investment of Account Assets. The Trustee shall invest the
amount of each contribution made hereunder and all earnings on the Trust
in full and fractional Shares in accordance with the current prospectus
for such Shares, in such amounts and proportions as shall from time to
time be designated by the Plan Administrator on forms provided by the
Sponsor, and shall credit such Shares to the Accounts of each Participant
on whose behalf or by whom the contributions are made and any forfeitures
are allocated. All dividends and capital gain distributions received on
the Shares held by the Trustee in each Account, shall, if received in
cash, be reinvested in such Shares in accordance with the current
prospectus for such Shares and shall in any event be credited to such
account. If any distribution on Shares may be received at the election
of the shareholder in additional Shares, the Trustee shall so elect. The
Trustee shall deliver, or cause to be executed and delivered, to the Plan
Administrator all notices, prospectuses, financial statements, proxies,
and proxy soliciting materials relating to Shares held hereunder. The
Trustee shall not vote any of the Shares held hereunder, except in
accordance with the written instructions of the Plan Administrator. If
no such written instructions are received, such Shares shall not be voted.
The obligations of the Trustee hereunder may be delegated by it as
provided in Sections 9.1 and 9.2.
The Trustee shall sell Shares and purchase Shares to accomplish any
change in investments desired by the Employer as indicated on any amended
Adoption Agreement or other instruction in accordance with the terms of
the Plan.
Notwithstanding the above, if periodic payments are being made to a
Participant pursuant to Article IV hereof, any dividends received on
Shares held in such Participant's Account, which dividends are invested
at an offering price which includes a sales charge, need not be invested
in additional Shares but may be held for distribution to the Participant
in periodic payments. In such instances, the Trustee may make any
election necessary to receive any such dividends in cash.
3.2 Directed Investments. When so instructed by the Plan
Administrator, the Trustee shall invest all or any portion of the
individual Account of any Participant in accordance with the direction of
the Employer or such Participant in lieu of participation in the general
assets of the Trust. Such directed investments shall be accounted for
separately for each Participant. Except as otherwise provided herein, the
Trustee shall not have any discretion, with respect to such directed
investments. Each Participant who directs the investment of his Account
shall be solely and absolutely responsible for the investment or
reinvestment of all directed investment assets held on his behalf in
Trust, and, except as otherwise provided herein, the Trustee shall not
question any such direction, review any securities or other such assets,
or make suggestions with respect to the investment, retention or
disposition of any such assets; provided that
(a) If any contributions are transmitted to or otherwise
received or held as a directed investment asset without
investment directions from the Participant, the Trustee may
retain such amounts in a noninterest-bearing savings account in
a federally insured institution for the benefit of the
Participant;
(b) The Trustee may establish such reasonable rules and
regulations, applied on a uniform basis to all Participants,
with respect to the requirements for, and the form and manner
of, effectuating any transaction with respect to directed
investment assets including, without limitation, minimum
amounts, rules applicable to conversion of directed investments
into general assets of the Trust, and appropriate adjustments
(based on fair market values) to Accounts in order to reflect
any such conversion, as the Trustee shall determine to be
consistent with the purposes of the Plan. Any such rules and
regulations shall be binding upon all persons interested in the
Trust;
(c) The Trustee may establish a procedure for the periodic
review of directed investment assets to determine, in light of
the facts and circumstances reasonably known to the Trustee,
whether any actual or proposed investment of such assets
constitutes or would constitute a prohibited transaction as that
term is defined in sections 406-408 of ERISA and the
corresponding provisions of the Code. If the Trustee determines
that any investment constitutes or would constitute a prohibited
transaction, the Trustee shall promptly communicate this
determination to the Plan Administrator, and shall recommend
that the investment be prevented or disposed of, as the case may
be, and may recommend any other action authorized or required
by law, to prevent or remedy the transaction;
(d) In accordance with and pursuant to uniform and
nondiscriminatory rules established under and in accordance with
the Plan, the Trustee may deny the Plan Administrator's
application to allow a directed investment proposed by a
Participant; and
(e) Notwithstanding anything herein to the contrary, in no
event shall the Trustee engage in any transaction that would be
prohibited under ERISA.
3.3 General Investment Powers. Subject to any investment
limitations or minimum requirements for investment instructions given by
the Employer, the Trustee shall be authorized and empowered to invest and
reinvest all or any part of the Trust in any property, real or personal
or mixed, including, but not being limited to, capital or common stock
(whether voting or nonvoting and whether or not currently paying a
dividend), preferred or preference stock (whether voting or nonvoting or
whether or not currently paying a dividend), shares of regulated
investment companies, convertible securities, corporate and governmental
obligations, leaseholds, ground rents, mortgages, and other interests in
realty, trust, and participation certificates, oil, mineral, or gas
properties, royalty interests or rights, including equipment pertaining
thereto, notes, and other evidences of indebtedness or ownership, secured
or unsecured, contracts, choses in action, and warrants, and other
instruments entitling the owner thereof to subscribe to or purchase any
of the aforesaid. Subject to any investment limitations or requirements
imposed by the Sponsor relating to the type of permissible investments in
the Trust or the minimum percentage of Trust assets to be invested in
Shares, and subject to the provisions of Article VIII hereof, in making
and retaining such investments and reinvestments pursuant hereto, the
Trustee shall not be bound as to the character of any investments by any
statute, rule of court, or custom governing the investment of Trust funds.
3.4 Investment in Combined Funds. If the Trustee is a banking
institution, subject to any investment limitations or minimum requirements
for investment in Shares imposed by the Sponsor, and subject to investment
instructions given by the Employer, it may, subject to the election of the
Sponsor or the Employer, cause funds of this Trust to be invested in its
commingled funds for qualified employee benefit plan trusts and such
commingled funds are hereby adopted and made a part of the Plan of which
this Trust is a part, and any funds of this Trust invested in any such
commingled funds shall be subject to all the provisions thereof, as the
same may be amended from time to time.
3.5 Other Powers of the Trustee. The Trustee is authorized and
empowered with respect to the Trust:
(a) Subject to any investment limitations or minimum
requirements for investment in Shares imposed by the Sponsor,
and subject to investment instructions given by the Employer,
to sell, exchange, convey, transfer, or otherwise dispose of,
either at public or private sale, any property, real or personal
or mixed, at any time held by it, for such consideration and on
such terms and conditions as to credit or otherwise as the
Trustee may deem best;
(b) Subject to the provisions of Section 3.1, to vote in person
or by proxy any stocks, bonds, or other securities held by it;
to exercise any options appurtenant to any stocks, bonds, or
other securities, or to exercise any rights to subscribe for
additional stocks, bonds, or other securities, and to make any
and all necessary payments therefor; to join in, or to dissent
from, and to oppose, the reorganization, consolidation,
liquidation, sale, or merger of corporations, or properties in
which it may be interested as Trustee, upon such terms and
conditions as it may deem wise;
(c) 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;
(d) To register any investment held in the Trust in the name
of the Trust 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;
(e) To employ suitable agents and counsel (who may also be
agents and/or counsel for the Employer or the Sponsor) and to
pay their reasonable expenses and compensation;
(f) To borrow or raise monies for the purpose of the Trust from
any source and, for any sum so borrowed to issue its promissory
note as Trustee and to secure the repayment thereof by pledging
all or any part of the Trust Fund, but nothing herein contained
shall obligate the Trustee to render itself liable individually
for the amount of any such borrowing; and no person loaning
money to the Trustee shall be bound to see to the application
of money loaned or to inquire into the validity or propriety of
any such borrowing.
Each and all of the foregoing powers may be exercised without a court
order or approval. No one dealing with the Trustee need inquire
concerning the validity or propriety of anything that is done or need see
to the application of any money paid or property transferred to or upon
the order of the Trustee.
3.6 General Powers. The Trustee shall have all of the powers
necessary or desirable to do all acts, take all such proceedings, and
exercise all such rights and privileges, whether or not expressly
authorized herein, which it may deem necessary or proper for the
administration and protection of the property of the Trust and to
accomplish any action provided for in the Plan.
ARTICLE IV - DISTRIBUTIONS FROM A PARTICIPANT'S ACCOUNT
Distributions from the Trust shall be made by the Trustee in
accordance with proper written directions of the Plan Administrator in
accordance with the provisions of Section 15.2 of the Plan, and the Plan
Administrator shall have the sole responsibility for determining that the
directions given conform to provisions of the Plan and applicable law,
including (without limitation) responsibility for calculating the amounts
payable to a Participant pursuant to Article 10 of the Plan, and for
determining the proper person to whom benefits are payable under the Plan.
ARTICLE V - REPORTS OF THE TRUSTEE AND THE PLAN ADMINISTRATOR
The Trustee shall keep accurate and detailed records of all receipts,
investments, disbursements, and other transactions required to be
performed hereunder with respect to the Trust. The Trustee shall file
with the Plan Administrator a written report or reports reflecting the
receipts, disbursements, and other transactions effected by it with
respect to the Trust during such Plan Year and the assets and liabilities
of the Trust at the close of the Plan Year. Such report or reports shall
be open to inspection by any Participant for a period of one-hundred
eighty (180) days immediately following the date on which it is filed with
the Plan Administrator. Except as otherwise prescribed by ERISA, upon the
expiration of such one-hundred eighty (180) day period, the Trustee shall
be forever released and discharged from all liability and accountability
to anyone with respect to its acts, transactions, duties, obligations, or
responsibilities as shown in or reflected by such report, except with
respect to any such acts or transactions as to which the Plan
Administrator shall have filed written objections with the Trustee within
one-hundred eighty (180) day period, and except for willful misconduct or
lack of good faith on the part of the Trustee.
ARTICLE VI - TRUSTEE'S FEES AND EXPENSES OF THE TRUST
The Trustee's fees for performing its duties hereunder shall be such
reasonable amounts as shall be respectively established by them from time
to time. The Trustee shall furnish the Employer with its current schedule
of fees and shall give written notice to the Employer whenever its fees
are changed or revised. Such fees, any taxes of any kind whatsoever which
may be levied or assessed upon or in respect of the Trust, to the extent
incurred by the Trustee, and any and all expenses incurred by the Trustee
in the performance of its duties, including fees for legal services
rendered to the Trustee, shall, unless paid by the Employer, be paid from
the Trust in the manner provided in the Plan.
Unless paid by the Employer, all fees of the Trustee and taxes and
other expenses charged to a Participant's Account may be collected by the
Trustee from the amount of any contribution to be credited or distribution
to be charged to such Account or may be paid by redeeming or selling
assets credited to such Account.
ARTICLE VII - DUTIES OF THE EMPLOYER AND THE PLAN ADMINISTRATOR
7.1 Information and Data to be Furnished the Trustee. In addition
to making the contributions called for in Article II hereof, the Employer,
through the Plan Administrator, agrees to furnish the Trustee with such
information and data relative to the Plan as is necessary for the proper
administration of the Trust established hereunder.
7.2 Limitation of Duties. Neither the Employer nor any of its
officers, directors, or partners, nor the Plan Administrator shall have
any duties or obligations with respect to this Trust Agreement, except
those expressly set forth herein and in the Plan.
ARTICLE VIII - LIABILITY OF THE TRUST
8.1 Trustee's Liability.
(a) The Employer shall indemnify and save the Trustee
(including its affiliates, representatives and agents) harmless
from and against any liability, cost or other expense,
including, but not limited to, the payment of attorneys' fees
that the Trustee may incur in connection with this Agreement or
the Plan unless such liability, cost or other expense (whether
direct or indirect) arises from the Trustee's own willful
misconduct or gross negligence. The Employer recognizes that
a burden of litigation may be imposed upon the Trustee as a
result of some act or transaction for which it has no
responsibility or over which it has no control under this
Agreement. Therefore, the Employer agrees to indemnify and hold
harmless and, if requested, defend the Trustee (including its
affiliates, representatives and agents) from any expenses
(including counsel fees, liabilities, claims, damages, actions,
suits or other charges) incurred by the Trustee in prosecuting
or defending against any such litigation.
(b) The Trustee shall not be liable for, and the Employer will
indemnify and hold harmless the Trustee (including its
affiliates, representatives and agents) from and against all
liability or expense (including counsel fees) because of (i) any
investment action taken or omitted by the Trustee in accordance
with any direction of the Employer or a Participant, or
investment inaction in the absence of directions from the
Employer or a Participant or (ii) any investment action taken
by the Trustee pursuant to an order to purchase or sell
securities placed by the Employer or a Participant directly with
a broker, dealer or issuer. It is understood that although,
when the Trustee is subject to the direction of the Employer or
a Participant the Trustee will perform certain ministerial
duties with respect to the portion of the Fund subject to such
direction (the "Directed Fund"), such duties do not involve the
exercise of any discretionary authority or other authority to
manage and control assets of the Directed Fund and will be
performed in the normal course of business by officers and
employees of the Trustee or its affiliates, representatives or
agents who may be unfamiliar with investment management. It is
agreed that the Trustee is not undertaking any duty or
obligation, express or implied, to review, and will not be
deemed to have any knowledge of or responsibility with respect
to, any transaction involving the investment of the Directed
Fund as a result of the performance of its ministerial duties.
Therefore, in the event that "knowledge" of the Trustee shall
be a prerequisite to imposing a duty upon or determining
liability of the Trustee under the Plan or this Trust or any law
or regulation regulating the conduct of the Trustee, with
respect to the Directed Fund, as a result of any act or omission
of the Employer or any Participant, or as a result of any
transaction engaged in by any of them, then the receipt and
processing of investment orders and other documents relating to
Plan assets by an officer or other employee of the Trustee or
its affiliates, representatives or agents engaged in the
performance of purely ministerial functions shall not constitute
"knowledge" of the Trustee.
(c) Notwithstanding the foregoing provisions of this Trust
Agreement, the Trustee shall discharge its duties hereunder 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. Any
investments selected by the Trustee without specific direction
from the Employer shall be selected to diversify the investments
of the Trust Fund so as to minimize the risk of large losses,
unless in the circumstances it is clearly prudent not to do so.
The Trustee shall perform its duties in accordance with this
Trust Agreement insofar as this Trust Agreement is consistent
with the provisions of ERISA. To the extent not prohibited by
ERISA, the Trustee shall not be responsible in any way for any
action or omission of the Employer or the Plan Administrator
with respect to the performance of their duties and obligations
set forth in the Plan. To the extent not prohibited by ERISA,
the Trustee shall not be responsible for any action or omission
of any of its agents, or with respect to reliance upon advice
of its counsel (whether or not such counsel is also counsel to
the Employer or to the Plan Administrator), provided that such
agents or counsel were prudently chosen by the Trustee and that
the Trustee relied in good faith upon the action of such agent
or the advice of such counsel. The Trustee shall be indemnified
and held harmless by the Employer against liability or losses
occurring by reason of any act or omission of the Trustee under
this Trust Agreement, unless such act or omission is due to its
own willful nonfeasance, malfeasance, or misfeasance or other
breach of duty under ERISA, to the extent that such
indemnification does not violate ERISA or any other Federal or
state laws.
ARTICLE IX - DELEGATION OF POWERS
9.1 Delegation by the Trustee. With respect to Shares held by the
Plan, the Trustee hereby delegates to the Custodian designated by the
Sponsor the functions designated in (a) through (d) hereunder, other than
the investment, management, or control of the Trust assets. With respect
to assets other than Shares, the Trustee may delegate in writing pursuant
to a procedure permitted and established by the Sponsor, to a person
(individual, corporate, or other entity) designated by the Sponsor as an
agent or custodian, any of the powers or functions of the Trustee
hereunder other than the investment, management or control of the Trust
assets, including (without limitation):
(a) Custodianship of all or any part of the assets of the
Trust;
(b) Maintaining and accounting for the Trust and for
Participants and other Accounts as a part thereof;
(c) Distribution of benefits as directed by the Plan
Administrator; and
(d) Preparation of the annual report on the status of the
Trust.
The agent or custodian so appointed may act as agent for the Trustee,
without investment responsibility, for fees to be mutually agreed upon by
the Employer and the agent or custodian and paid in the same manner as
Trustee's fees. The Trustee shall not be responsible for any act or
omission of the agent or custodian arising from any such delegation,
except to the extent provided in Section 8.1.
9.2 Delegation with Employer Approval. The Trustee (whether or not
a bank or trust company) and the Employer may, by mutual agreement,
arrange for the delegation by the Trustee to the Plan Administrator or any
agent of the Employer of any powers or functions of the Trustee hereunder
other than the investment and custody of the Trust assets. The Trustee
shall not be responsible for any act or omission of such person or persons
arising from any such delegation, except to the extent provided in Article
VIII.
ARTICLE X - AMENDMENT
As provided in Section 16.1 of the Plan, and subject to the
limitations set forth therein, the prototype Adoption Agreement, Plan, and
Trust Agreement may be amended at any time, in whole or in part, by the
Sponsor. The Trustee hereby delegates authority to the Sponsor, and to
any successor Sponsor, to so amend the prototype Adoption Agreement, Plan,
and Trust Agreement and the Trustee hereby agrees that it shall be deemed
to have consented to any amendment so made which does not increase the
duties of the Trustee without its consent.
ARTICLE XI - RESIGNATION OR REMOVAL OF TRUSTEE
The Trustee may resign at any time upon thirty (30) days notice in
writing to the Employer, and may be removed by the Employer at any time
upon thirty (30) days notice in writing to the Trustee. Upon such
resignation or removal, the Employer shall appoint a successor Trustee or
Trustees. Upon receipt by the Trustee of written acceptance of such
appointment by the successor Trustee, the Trustee shall transfer and pay
over to such successor the assets of the Trust and all records pertaining
thereto, provided that any successor Trustee shall agree not to dispose
of any such records without the Trustee's consent. The successor Trustee
shall be entitled to rely on all accounts, records, and other documents
received by it from the Trustee, and shall not incur any liability
whatsoever for such reliance. The Trustee is authorized, however, to
reserve such sum of money or property as it may deem advisable for payment
of all its fees, compensation, costs, and expenses, or for payment of any
other liabilities constituting a charge on or against the assets of the
Trust or on or against the Trustee, with any balance of such reserve
remaining after the payment of all such items to be paid over to the
successor Trustee. Upon the assignment, transfer, and payment over of the
assets of the Trust, and obtaining a receipt thereof from the successor
Trustee, the Trustee shall be released and discharged for any and all
claims, demands, duties, and obligations arising out of the Trust and its
management thereof, excepting only claims based upon the Trustee's willful
misconduct or lack of good faith. The successor Trustee shall hold the
assets paid over to it under terms similar to those of this Agreement that
it qualify under Section 401 of the Code. If within (30) days after the
Trustee's resignation or removal, the Employer has not appointed a
successor Trustee which has accepted such appointment, the Trustee shall,
unless it elects to terminate the Trust pursuant to Article XII, appoint
such successor itself.
ARTICLE XII - TERMINATION OF THE TRUST
12.1 Term of the Trust. This Trust shall continue as to the
Employer so long as the Plan is in full force and effect. If the Plan
ceases to be in full force and effect, this Trust shall thereupon
terminate unless expressly extended by the Employer.
12.2 Termination by the Trustee. The Trustee may elect to terminate
the Trust if within thirty (30) days after its resignation or removal
pursuant to Article XI the Employer has not appointed a successor Trustee
which has accepted such appointment. Termination of the Trust shall be
effected by distributing all assets thereof to the Participants or other
persons entitled thereto pursuant to the direction of the Plan
Administrator (or in the absence of such direction, as determined by the
Trustee) as provided in Section 16.2 of the Plan, subject to the Trustee's
right to reserve funds as provided in Article XI hereof. Upon the
completion of such distribution, the Trustee shall be relieved from all
further liability with respect to all amounts so paid, other than any
liability arising out of the Trustee's willful misconduct or lack of good
faith.
ARTICLE XIII - MISCELLANEOUS
13.1 No Diversion of Assets. At no time shall it be possible for
any part of the assets of the Trust to be used for or diverted to purposes
other than for the exclusive benefit of Participants and their
beneficiaries or revert to the Employer, except as specifically provided
in the Plan or this Agreement.
13.2 Notices. Any notice from the Trustee to the Employer or from
the Employer to the Trustee provided for in the Plan and Trust shall be
effective if sent by first class mail at their respective last address of
record.
13.3 Multiple Trustees. In the event that there shall be two (2)
or more Trustees serving hereunder, the trustees shall act by majority
vote, but any action taken or decision made by any one of such Trustees
may be relied upon as if taken or made by a majority of them with the same
effect as if all had joined therein, if there be more than two (2), or
unanimously if there be two (2).
13.4 Conflict with Plan. In the event of any conflict between the
provisions of the Plan and those of this Agreement, the former shall
prevail.
13.5 Applicable Law. Except to the extent otherwise required by
ERISA, as amended, this Agreement shall be construed in accordance with
the laws of the state where the Trustee has its principal place of
business, as specified in the Adoption Agreement.
AMENDMENT NO. 1
TO THE OPPENHEIMERFUNDS
RETIREMENT PLAN BASIC PLAN DOCUMENT (No. 02)
The Basic Plan Document (No. 02) is hereby amended by the word-for-
word adoption of the model language contained in Revenue Procedure 93-12,
for distributions made on or after January 1, 1993, as follows:
Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a Distributee's election under this provision, 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.
Definitions
(a) 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
(10) years or more; any distribution to the extent such distribution is
required under Section 401(a)(9) of the Code; and the portion of any
distribution that is not includable in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to
employer securities).
(b) Eligible Retirement Plan. An Eligible Retirement Plan is an
individual retirement account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of the Code, or a qualified trust
described in Section 401(a) of the Code, that accepts the Distributee's
Eligible Rollover Distribution. However, in the case of an Eligible
Rollover Distribution to the surviving spouse, an Eligible Retirement Plan
is an individual retirement account or individual retirement annuity.
(c) Distributee. A Distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's surviving
spouse and the Employee's or former Employee's spouse or former spouse who
is the alternate payee under a qualified domestic relations order, as
defined in Section 414(p) of the Code, are Distributees with regard to the
interest of the spouse or former spouse.
(d) Direct Rollover. A Direct Rollover is a payment by the Plan to
the Eligible Retirement Plan specified by the Distributee.
SECOND
The Basic Plan Document (No. 02) is hereby amended by the word-for-
word adoption of the model language contained in Revenue Procedure 94-13
as follows:
In addition to other applicable limitations set forth in the plan,
and notwithstanding any other provision of the plan to the contrary, for
plan years beginning on or after January 1, 1994, the annual compensation
of each employee taken into account under the plan shall not exceed the
Omnibus Budget Reconciliation Act of 1993 ("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
consists of fewer than 12 months, the OBRA '93 annual compensation limit
will be multiplied by a fraction, the numerator of which is the number of
months in the determination period, and the denominator of which is 12.
For plan years beginning on or after January 1, 1994, any reference
in this plan to the limitation under Section 401(a)(17) of the Code shall
mean the OBRA '93 annual compensation limit set forth in this provision.
If compensation for any prior determination period is taken into
account in determining an employee's benefits accruing in the current plan
year, the compensation for that prior determination period is subject to
the OBRA '93 annual compensation limit in effect for that prior
determination period. For this purpose, for determination periods
beginning before the first day of the first plan year beginning on or
after January 1, 1994, the OBRA '93 annual compensation limit is $150,000.
APPLICATION AND ADOPTION AGREEMENT DOCUMENT 1
OPPENHEIMERFUNDS STANDARDIZED MONEY PURCHASE PENSION PLAN
This application offers a number of choices regarding the features of your
Money Purchase Pension Plan. Notes are included in the left-hand margin
to help you complete the application.
/ / Check this box if this an amendment to an existing plan.
Note: Failure to properly fill out this Adoption Agreement may result in
disqualification of the Plan. The Employer should, therefore, consult a
tax advisor concerning execution of this Adoption Agreement. This
Adoption Agreement must be used only in conjunction with the
OppenheimerFunds Retirement Plan Basic Plan Document (No. 01).
[at left-hand margin]
Mail this form to:
Oppenheimer Shareholder Services
Retirement Plans Administration
P.O. Box 173694
Denver, CO 80217-3694
If you do not have an Employer Federal Tax I.D. Number, obtain one by
filing a Form SS-4 at your local IRS district office.
[end]
1. EMPLOYER INFORMATION.
A. Employer's Name:
B. Employer's Business Address:
If mail pertaining to Participants' Accounts will be sent to a
different address, then also provide such address:
C. Employer's Federal Tax I.D.:
Type of Business:
D. / / Sole Proprietor
/ / Partnership
/ / Corporation
E. Employer's Taxable Year (Plan Year) for Federal Income Tax
purposes:
/ / Calendar Year, or
/ / Other year beginning with the first day of (month) each
year
[at left-hand margin]
If you are selecting more than one fund or have more than one participant,
use the Retirement Plan Contribution Form on Page 15.
Use the first day of your fiscal year unless you are transferring or
amending your current plan.
[end]
2. PLAN INFORMATION.
A. (For non-insured portion of the Plan.) Dollar Amount of Initial
Employer Contributions:
(For insured portion of the Plan: Send the insurance premium,
if any, for the insured portion of the Plan to the insurance
company [see Item 8].)
B. Initial Mutual Fund Investment (insert name of fund):
C. Plan Number (e.g., 001, 002):
(Paired plans should each have a separate number, such as 001
for the profit sharing plan and 002 for the money purchase
pension plan.)
D. Effective Date:
(For a plan in existence, the Effective Date is the date the
plan was adopted by the Employer. For a new plan, the Effective
Date is the first day of the Plan Year in which the plan is
adopted.)
[at left-hand margin]
You can specify any period of up to two years including full and
fractional years, which employees must complete before they can
participate in the plan. You can also specify no service requirement.
[end]
3. PARTICIPATION.
A. Number of years of service necessary for participation (not
greater than 2 years):
Any individual who works 1,000 or more hours in a consecutive
twelve-month period, computed with reference to the date the
individual's employment commenced, shall be credited with a Year
of Service.
If the Years of Services selected is or includes a fractional
year, an Employee will not be required to complete any specified
number of hours of employment to receive credit for such
fractional year.
B. The Plan / / shall / / shall not exclude Employees covered by
a collective bargaining agreement.
4. COMPENSATION.
For any Participant, Compensation means Compensation as defined in
the Plan. Also, effective for Plan Years beginning on or after
January 1, 1990, choose A or B below:
A. / / Compensation shall include; or B. / / Compensation shall not
include any amount which is contributed by the Employer pursuant to
a salary reduction agreement and which is not includable in the gross
income of the Employee pursuant to Sections 125, 402(a)(8), 402(h)
or 403(b) of the Code.
[at left-hand margin]
An integrated formula allows you to coordinate the retirement benefits
provided by the Social Security Administration. If you want a relatively
simple plan, choose item A. If you wish to integrate your plan with Social
Security, choose item B and consult your tax advisor.
[end]
5. CONTRIBUTIONS (see Note on next page for self-employed contribution
calculation).
A. / / Plan shall not be integrated with Social Security.
The Employer will contribution [%] of Compensation (not in excess of
$200,000) for each Participant for the Plan Year (not to exceed 25%).
B. / / Plan shall be integrated with Social Security (complete (1)
and (2)):
The Employer shall contribute for each Plan Year:
(1) [%] (the "Base Contribution Percentage," which shall not be less
than 3%) of the Compensation of each Participant for the then-current
Plan Year, and
(2) [%] of the Compensation of each Participant in excess of the
Social Security Taxable Wage Base for the then-current Plan Year.
However, the percentage chosen under this paragraph (2) shall not
exceed the lesser of the Base Contribution Percentage above, or 5.7%.
Employer contributions on behalf of each Participant shall not exceed
the lesser of $30,000 or 25% of the Participant's Compensation for
the Plan Year. For purposes of the foregoing allocation formulas,
not more than $200,000 of each Participant's Compensation shall be
taken into account. Subject to Item 7 of this Adoption Agreement,
for Plan Years beginning before January 1, 1989, the Employer's
contribution will be allocated under an integrated or non-integrated
formula to the Account of each Participant who has completed at least
1,000 Hours of Service during the Plan Year and is an Employee on the
last day of such Plan Year. For Plan years beginning on or after
January 1, 1989, a Participant shall receive an allocation of such
Employer Contribution for the Plan Year if the Participant either (i)
has completed more than 500 Hours of Service for the Employer during
a Plan Year, regardless of whether the Participant is employed on the
last day of the Plan Year, or (ii) is employed on the last day of the
Plan Year.
Note: In calculating amounts which may be contributed for Self-
Employed Individuals, you must deduct contributions made to this Plan
and all other qualified self-employed retirement plans. The total
of all such contributions cannot exceed 25% of Earned Income as
defined in the Plan, or 20% of Net Profits for a Self-Employed
Individual before making such contributions.
[at left hand-margin]
Most employers choose age 65 as their retirement age. If you wish, you may
choose another age subject to the restrictions outlined here.
[end]
6. NORMAL RETIREMENT AGE.
Normal Retirement Age is age / / (not to exceed age 65) or the /
/ (not to exceed 5th) anniversary of the participation commencement
date, which date is the first day of the month in which the
Participant commenced participation. The Normal Retirement Age
chosen above may not be higher than the age that has previously been
effect under the Plan for a current Participant. For example, if the
Normal Retirement Age has been Age 62 or the 3rd anniversary of
participation, the Normal Retirement Age must be no higher than
either of those dates for current Participants. However, in no event
may the Normal Retirement Age chosen above be higher than 65 or
exceed the 5th anniversary of the participation.
[at left-hand margin]
If your plan is deemed to be Top-Heavy under IRS rules, you will be
required to make certain minimum contributions for your "non-key"
employees. (See the Plan Document for the definition of "key employee".)
Complete item B if you want to make these contributions to another non-
Oppenheimer sponsored plan.
[end]
7. MINIMUM TOP-HEAVY CONTRIBUTIONS (for Non-integrated Plans).
A. Notwithstanding the contribution formula selected in Item 5
above, for purposes of the minimum top-heavy contributions
required to be made under the Plan, the Employer contributions
shall be allocated under this paragraph A unless the Employer
checks and completes paragraph B below. The Employer
contribution allocated under this paragraph A shall be allocated
on behalf of each Participant who is not a Key Employee in an
amount that shall not be less than the lesser of (1) or (2):
(1) 3% of such Participant's Compensation for such Plan Year (or
5% of such Participant's Compensation for such Plan Year if the
Employer maintains a defined benefit plan), or
(2) In the case where the Employer has no defined benefit plan
which uses this Plan to satisfy the requirements of Section 401
of the Code, the highest percentage of Employer contributions
allocated on behalf of any Key Employee (expressed as a
percentage of the first $200,000 of such Key Employee's
Compensation for such Plan Year).
B. / / For each Plan Year in which the Employer maintains another
plan in addition to this Plan, the minimum allocation required
for any non-Key Employee shall be made by the Employer in
accordance with Section 415 of the Code under the following plan
or plans:
----------------------------------------------------------------
----------------------------------------------------------------
-------------------------------------------(enter plan name)
If this paragraph B is completed the Employer may not rely on
the opinion letter issued by the Internal Revenue Service to the
Sponsor to evidence that this Plan is qualified under Section
401 of the Internal Revenue Code. If the Employer has completed
this section and wants to determine that his plan(s) is
qualified, an application should be made to the appropriate Key
District Director of Internal Revenue.
Important Note: Choosing this paragraph B may cause this Plan
to fail to satisfy the design-based safe harbor of the proposed
regulations under Code Section 401(a)(4) as of the first day of
the first Plan Year beginning after 1991, even though all other
requirements of the safe harbor are met.
[at left-hand margin]
You and your plan participants may use a portion of the plan's assets to
buy life insurance contracts, subject to the restrictions outlined here.
[end]
8. INSURANCE.
If Insurance coverage is utilized:
A. The amount to be invested in ordinary life insurance contracts
for any Participant shall be less than 50% of the aggregate
Employer contributions allocated to his account. If term
insurance is selected, the premium shall be less than 25% of the
aggregate Employer contributions allocated to his Account.
B. If both ordinary life and term insurance are purchased on the
life of a Participant, the sum of the term insurance premium
plus one-half of the ordinary life premiums may not exceed 25%
of the Employer contributions made on behalf of such
Participant.
C. Employer contributions in excess of the insurance premium shall
be invested in shares of any fund managed by Oppenheimer
Management Corporation, or any parent, subsidiary or affiliate
thereof, or in Systematic Capital Accumulation Plans or Variable
Annuities for the accumulation of shares of one of these funds.
D. It is understood that the portion of the insurance premium that
is allocated to the current cost of the insurance protection
(term cost) is not tax deductible to the Self-Employed
Individual and is taxable income to Participant's who are
Employees. The insurance company may supply each insured
Participant with a statement of the dollar amount of the non-
deductible or taxable portion of the premium.
[at left-hand margin]
Complete this section only if you maintain any other qualified plans
besides an OppenheimerFunds Profit Sharing Plan. If you do maintain other
plans, their qualification may be adversely affected if you do not
complete this section.
[end]
9. ALLOCATION LIMITS.
If the Employer maintains or has ever maintained another qualified
plan (other than the OppenheimerFunds Profit Sharing Plan
(Standardized Plan) which is a paired plan with this Plan) in which
any Participant is (or was) a participant or could possibly become
a participant, the Employer must complete this Item 9. The Employer
must also complete this Item 9 if it maintains a welfare benefit
fund, as defined in Section 419(e) of the Code, or an individual
medical account, as defined in Section 415(1)(2) of the Code, under
which amounts are treated as Annual Additions under the Plan with
respect to any Participant in this Plan.
A. If the Participant is covered under another qualified defined
contribution plan maintained by the Employer, other than a
Master or Prototype Plan:
/ / The provisions of Sections 11.2(a) through 11.2(f) of
Article XI will apply, as if the other plan was a Master or
Prototype Plan.
/ / Employer should provide the method under which the plans
involved will limit total Annual Additions to the Maximum
Permissible Amount, and will properly reduce any Excess Amounts,
in a manner that precludes Employer discretion -- attach
separate sheet if necessary.
B. If the Participant is or has ever been a Participant in a
defined benefit plan maintained by the Employer, the Employer
should attach an explanation of the method under which the plans
involved will satisfy the 1.0 combined limitation of Section
11.4 of the Plan, which method shall preclude Employer
discretion.
10. MISCELLANEOUS.
A. A copy of the current prospectus of the fund(s), and the
variable annuity prospectus (if chosen) has been received by
each Participant named. Each new Participant will receive a
copy of the then current prospectus.
B. The Sponsor shall inform the Employer of any amendments made to
the Plan or of the discontinuance or abandonment of the Plan.
C. Information concerning the Sponsor:
Oppenheimer Funds Distributor, Inc.
Two World Trade Center
New York, NY 10048-0203
1-212-323-0200
[at left-hand margin]
Please sign in the appropriate space only after having read all the
materials and completing this Application.
[end]
11. SIGNATURES.
Under penalties of perjury, the undersigned Employer, or duly
authorized officer or employee thereof, hereby certifies (i) that the
taxpayer identification number set forth on the front of this
Application and Adoption Agreement is the Employer's correct taxpayer
identification number and (ii) currently the Employer is not under
IRS notification as being subject to backup withholding (line out
(ii) if under notification). If no such number is shown, the
undersigned further certifies, under penalties of perjury, that no
such number has been issued, and a number has been or soon will be
applied for; if a number is not provided to you within sixty days,
the undersigned understands that all payments (including redemptions)
are subject to 20% withholding under Federal tax law, until a number
is provided.
---------------------------- ----------------------------
Please Print Business Name (Date)
By: -------------------------
Sole Proprietor, Partner
or Corporate Officer
(signature)
Note: An Employer who has ever maintained or who later adopts any
plan (including a welfare benefit fund, as defined in section 419(e)
of the Code, which provides post-retirement medical benefits
allocated to separate accounts for Key Employees, as defined in
Section 419A(d)(3) of the Code, or an individual medical account, as
defined in Section 415(1)(2) of the Code) in addition to this Plan
(other than the OppenheimerFunds Profit Sharing Plan (Standardized
Plan) that is a paired plan with this Plan) may not rely on the
opinion letter issued by the National Office of the Internal Revenue
Service as evidence that this Plan is qualified under Section 401 of
the Code. 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.
12. DEALER INFORMATION.
--------------------------------------------------------------
Dealer Name
--------------------------------------------------------------
Dealer Head Office Address: No. and Street
--------------------------------------------------------------
City State Zip Code
--------------------------------------------------------------
Oppenheimer Dealer Number
--------------------------------------------------------------
Representative's Last Name First Name MI
--------------------------------------------------------------
Representative's Branch Office Address: No. and Street
--------------------------------------------------------------
City State Zip Code
--------------------------------------------------------------
Rep's Office Telephone Number Rep's A.E. Number
APPLICATION AND ADOPTION AGREEMENT DOCUMENT 2
OPPENHEIMERFUNDS STANDARDIZED PROFIT SHARING PLAN
This application offers a number of choices regarding the features of your
Profit Sharing Plan. Notes are included in the left-hand margin to help
you complete the application.
/ / Check this box if this is an amendment to an existing plan.
Note: Failure to properly fill out this Adoption Agreement may result in
disqualification of the Plan. The Employer should, therefore, consult a
tax advisor concerning execution of this Adoption Agreement. This
Adoption Agreement must be used only in conjunction with the
OppenheimerFunds Retirement Plan Basic Plan Document (No. 01).
[at left-hand margin]
Mail this form to:
Oppenheimer Shareholder Services
Retirement Plans Administration
P.O. Box 173694
Denver, CO 80217-3694
If you do not have an Employer Federal Tax I.D. Number, obtain one by
filing a Form SS-4 at your local IRS district office.
[end]
1. EMPLOYER INFORMATION.
A. Employer's Name:
B. Employer's Business Address:
If mail pertaining to Participants' Accounts will be sent to
a different address, then also provide such address:
C. Employer's Federal Tax I.D.:
Type of Business:
D. / / Sole Proprietor
/ / Partnership
/ / Corporation
E. Employer's Taxable Year (Plan Year) for Federal Income Tax
purposes:
/ / Calendar Year, or
/ / Other year beginning with the first day of (month) each
year
[at left-hand margin]
If you are selecting more than one fund or have more than one participant,
use the Retirement Plan Contribution Form on Page 15.
Use the first day of your fiscal year unless you are transferring or
amending your current plan.
[end]
2. PLAN INFORMATION.
A. (For non-insured portion of the Plan.) Dollar Amount of Initial
Employer Contributions:
(For insured portion of the Plan: Send the insurance premium,
if any, for the insured portion of the Plan to the insurance
company [see Item 8].)
B. Initial Mutual Fund Investment (insert name of fund):
C. Plan Number (e.g., 001, 002):
(Paired plans should each have a separate number, such as 001
for the profit sharing plan and 002 for the money purchase
pension plan.)
D. Effective Date:
(For a plan in existence, the Effective Date is the date the
plan was adopted by the Employer. For a new plan, the Effective
Date is the first day of the Plan Year in which the plan is
adopted.)
[at left-hand margin]
You can specify any period of up to two years including full and
fractional years, which employees must complete before they can
participate in the plan. You can also specify no service requirement.
[end]
3. PARTICIPATION.
A. Number of years of service necessary for participation (not
greater than 2 years):
Any individual who works 1,000 or more hours in a consecutive
twelve-month period, computed with reference to the date the
individual's employment commenced, shall be credited with a Year
of Service.
If the Years of Services selected is or includes a fractional
year, an Employee will not be required to complete any specified
number of hours of employment to receive credit for such
fractional year.
B. The Plan / / shall / / shall not exclude Employees covered by
a collective bargaining agreement.
4. COMPENSATION.
For any Participant, Compensation means Compensation as defined in
the Plan. Also, effective for Plan Years beginning on or after
January 1, 1990, choose A or B below:
A. / / Compensation shall include; or B. / / Compensation shall not
include any amount which is contributed by the Employer pursuant to
a salary reduction agreement and which is not includable in the gross
income of the Employee pursuant to Sections 125, 402(a)(8), 402(h)
or 403(b) of the Code.
[at left-hand margin]
You may make a profit-sharing contribution which exceeds your earnings or
profits, if any, for the year. Check this option if you wish to do so.
An integrated formula allows you to coordinate the retirement benefits
provided by the Social Security Administration. If you want a relatively
simple plan, choose item B. If you wish to integrate your plan with Social
Security, choose item C and consult your tax advisor.
[end]
5. CONTRIBUTIONS (see Note on next page for self-employed contribution
calculation).
A. Under the profit-sharing plan contribution formula the amount
of Employer contributions for each year is not fixed and may
vary from year to year. Contributions may be made only from the
Net Income of the Employer for the Plan Year unless the Employer
elects to disregard Net Income below.
Check this option if you wish it to apply to your Plan:
/ / Effective for Plan Years beginning on or after (date) (fill
in the first day of the Plan Year in which this Adoption
Agreement is executed for a subsequent anniversary of such
date), notwithstanding any other provision of the Plan, the
Employer contributions shall be made to the Plan without regard
to current or accumulated earnings and profits for the taxable
year or years ending with or within such Plan Year.
The Employer must also check B or C below:
B. / / Plan shall be not integrated with Social Security.
The Employer shall contribute an amount to be determined by the
Employer each Plan Year. Such contributions shall be allocated
as a uniform percentage of each Participant's Compensation (not
in excess of $200,000) up to 15% of Compensation.
C. / / Plan shall be integrated with Social Security.
Effective for the Plan Years beginning on or after January 1,
1989, the Employer shall contribute an amount to be determined
by the Employer each Plan Year, which amount shall be allocated
to the Accounts of Participants as follows:
(1) First, contributions made by the Employer shall be allocated
to each Participant's Account in the ratio that each
Participant's total Compensation bears to all Participants'
total compensation, but not in excess of 3% of each
Participant's Compensation;
(2) next, any contributions remaining after the allocation in
subparagraph (1) shall be allocated to each Participant's
Account in the ratio that each Participant's Excess Compensation
(see Section 1.1 of the Plan) for the Plan Year bears to the
Excess Compensation of all Participants, but not in excess of
3%;
(3) Any contributions remaining after the allocation in
subparagraph (2) shall be allocated to each Participant's
Account in the ratio that the sum of each Participant's total
Compensation plus Excess Compensation bears to the sum of all
Participant's total Compensation plus Excess Compensation, but
not in excess of 2.7%; and
(4) Next, any remaining Employer contributions shall be
allocated to all Participants in the ratio that each
Participant's Compensation for the Plan Year bears to all the
Participants' Compensation for that year. Employer contributions
on behalf of each Participant shall not exceed the lesser of
$30,000 or 15% of the Participant's Compensation for the Plan
Year. For purposes of the foregoing allocation formulas, not
more than $200,000 of each Participant's Compensation shall be
taken into account. Subject to Item 7 of this Adoption
Agreement, for Plan Years beginning before January 1, 1989, the
Employer's contribution will be allocated under an integrated
or non-integrated formula to the Account of each Participant who
has completed at least 1,000 Hours of Service during the Plan
Year and is an Employee on the last day of such Plan Year. For
Plan Years beginning on or after January 1, 1989, a Participant
shall receive an allocation of such Employer Contributions for
the Plan Year if the Participant either (i) has completed more
than 500 Hours of Service for the Employer during a Plan Year,
regardless of whether the Participant is employed on the last
day of the Plan Year, or (ii) is employed on the last day of the
Plan Year.
Note: In calculating amounts which may be contributed for Self-
Employed Individuals, you must deduct contributions made to this
Plan and all other qualified self-employed retirement plans.
The maximum profit sharing plan deductible contribution for a
Self-Employed Individual is, therefore, 13.04348% of Net Profits
before making such contribution.
[at left hand-margin]
Most employers choose age 65 as their retirement age. If you wish, you may
choose another age subject to the restrictions outlined here.
[end]
6. NORMAL RETIREMENT AGE.
Normal Retirement Age is age / / (not to exceed age 65) or the /
/ (not to exceed 5th) anniversary of the participation commencement
date, which date is the first day of the month in which the
Participant commenced participation. The Normal Retirement Age
chosen above may not be higher than the age that has previously been
effect under the Plan for a current Participant. For example, if the
Normal Retirement Age has been Age 62 or the 3rd anniversary of
participation, the Normal Retirement Age must be no higher than
either of those dates for current Participants. However, in no event
may the Normal Retirement Age chosen above be higher than 65 or
exceed the 5th anniversary of the participation.
[at left-hand margin]
If your plan is deemed to be Top-Heavy under IRS rules, you will be
required to make certain minimum contributions for your "non-key"
employees. (See the Plan Document for the definition of "key employee".)
Choose item B if you want to make these contributions from your
OppenheimerFunds Money Purchase Pension Plan. Complete item C if you want
to make them from another, non-Oppenheimer sponsored plan. In either case,
consult your tax advisor.
[end]
7. MINIMUM TOP-HEAVY CONTRIBUTIONS (for Non-integrated Plans).
A. Notwithstanding the contribution formula selected in Item 5
above, for purposes of the minimum top-heavy contributions
required to be made under the Plan, the Employer contributions
shall be allocated under this paragraph A unless the Employer
checks and completes paragraph B or C below. The Employer
contribution allocated under this paragraph A shall be allocated
on behalf of each Participant who is not a Key Employee in an
amount that shall not be less than the lesser of (1) or (2):
(1) 3% of such Participant's Compensation for such Plan Year (or
5% of such Participant's Compensation for such Plan Year if the
Employer maintains a defined benefit plan), or
(2) In the case where the Employer has no defined benefit plan
which uses this Plan to satisfy the requirements of Section 401
of the Code, the highest percentage of Employer contributions
allocated on behalf of any Key Employee (expressed as a
percentage of the first $200,000 of such Key Employee's
Compensation for such Plan Year).
B. / / If the Employer also maintains the Oppenheimer Money
Purchase Pension Plan (Standardized Plan) (the "Money Purchase
Plan") that is a paired plan with this Plan, the minimum
contribution for Participants who are eligible to receive an
allocation thereof shall be made under the Money Purchase Plan.
This paragraph B shall apply only if the eligibility and
coverage requirements of the Money Purchase Plan are to be
identical to the corresponding provisions of this Plan.
C. / / For each Plan Year in which the Employer maintains another
plan in addition to this Plan, the minimum allocation required
for any non-Key Employee shall be made by the Employer in
accordance with Section 415 of the Code under the following plan
or plans:
----------------------------------------------------------------
----------------------------------------------------------------
-------------------------------------------(enter plan name)
If this paragraph C is completed the Employer may not rely on
the opinion letter issued by the Internal Revenue Service to the
Sponsor to evidence that this Plan is qualified under Section
401 of the Internal Revenue Code. If the Employer has completed
this section and wants to determine that his plan(s) is
qualified, an application should be made to the appropriate Key
District Director of Internal Revenue.
Important Note: Choosing this paragraph C may cause this Plan
to fail to satisfy the design-based safe harbor of the proposed
regulations under Code Section 401(a)(4) as of the first day of
the first Plan Year beginning after 1991, even though all other
requirements of the safe harbor are met.
[at left-hand margin]
You and your plan participants may use a portion of the plan's assets to
buy life insurance contracts, subject to the restrictions outlined here.
[end]
8. INSURANCE.
If Insurance coverage is utilized:
A. The amount to be invested in ordinary life insurance contracts
for any Participant shall be less than 50% of the aggregate
Employer contributions allocated to his account. If term
insurance is selected, the premium shall be less than 25% of the
aggregate Employer contributions allocated to his Account.
B. If both ordinary life and term insurance are purchased on the
life of a Participant, the sum of the term insurance premium
plus one-half of the ordinary life premiums may not exceed 25%
of the Employer contributions made on behalf of such
Participant.
C. Employer contributions in excess of the insurance premium shall
be invested in shares of any fund managed by Oppenheimer
Management Corporation, or any parent, subsidiary or affiliate
thereof, or in Systematic Capital Accumulation Plans or Variable
Annuities for the accumulation of shares of one of these funds.
D. It is understood that the portion of the insurance premium that
is allocated to the current cost of the insurance protection
(term cost) is not tax deductible to the Self-Employed
Individual and is taxable income to Participant's who are
Employees. The insurance company may supply each insured
Participant with a statement of the dollar amount of the non-
deductible or taxable portion of the premium.
[at left-hand margin]
Complete this section only if you maintain any other qualified plans
besides an OppenheimerFunds Money Purchase Pension Plan. If you do
maintain other plans, their qualification may be adversely affected if you
do not complete this section.
[end]
9. ALLOCATION LIMITS.
If the Employer maintains or has ever maintained another qualified
plan (other than the OppenheimerFunds Money Purchase Pension Plan
(Standardized Plan) which is a paired plan with this Plan) in which
any Participant is (or was) a participant or could possibly become
a participant, the Employer must complete this Item 9. The Employer
must also complete this Item 9 if it maintains a welfare benefit
fund, as defined in Section 419(e) of the Code, or an individual
medical account, as defined in Section 415(1)(2) of the Code, under
which amounts are treated as Annual Additions under the Plan with
respect to any Participant in this Plan.
A. If the Participant is covered under another qualified defined
contribution plan maintained by the Employer, other than a
Master or Prototype Plan:
/ / The provisions of Sections 11.2(a) through 11.2(f) of
Article XI will apply, as if the other plan was a Master or
Prototype Plan.
/ / Employer should provide the method under which the plans
involved will limit total Annual Additions to the Maximum
Permissible Amount, and will properly reduce any Excess Amounts,
in a manner that precludes Employer discretion -- attach
separate sheet if necessary.
B. If the Participant is or has ever been a Participant in a
defined benefit plan maintained by the Employer, the Employer
should attached an explanation of the method under which the
plans involved will satisfy the 1.0 combined limitation of
Section 11.4 of the Plan, which method shall preclude Employer
discretion.
10. MISCELLANEOUS.
A. A copy of the current prospectus of the fund(s), and the
variable annuity prospectus (if chosen) has been received by
each Participant named. Each new Participant will receive a
copy of the then current prospectus.
B. The Sponsor shall inform the Employer of any amendments made to
the Plan of the discontinuance or abandonment of the Plan.
C. Information concerning the Sponsor:
Oppenheimer Funds Distributor, Inc.
Two World Trade Center
New York, NY 10048-0203
1-212-323-0200
[at left-hand margin]
Please sign in the appropriate space only after having read all the
materials and completing this Application.
[end]
11. SIGNATURES.
Under penalties of perjury, the undersigned Employer, or duly
authorized officer or employee thereof, hereby certifies (i) that the
taxpayer identification number set forth on the front of this
Application and Adoption Agreement is the Employer's correct taxpayer
identification number and (ii) currently the Employer is not under
IRS notification as being subject to backup withholding (line out
(ii) if under notification). If no such number is shown, the
undersigned further certifies, under penalties of perjury, that no
such number has been issued, and a number has been or soon will be
applied for; if a number is not provided to you within sixty days,
the undersigned understands that all payments (including redemptions)
are subject to 20% withholding under Federal tax law, until a number
is provided.
---------------------------- ----------------------------
Please Print Business Name (Date)
By: -------------------------
Sole Proprietor, Partner
or Corporate Officer
(signature)
Note: An Employer who has ever maintained or who later adopts any
plan (including a welfare benefit fund, as defined in section 419(e)
of the Code, which provides post-retirement medical benefits
allocated to separate accounts for Key Employees, as defined in
Section 419A(d)(3) of the Code, or an individual medical account, as
defined in Section 415(1)(2) of the Code) in addition to this Plan
(other than the OppenheimerFunds Money Purchase Pension Plan
(Standardized Plan) that is a paired plan with this Plan) may not
rely on the opinion letter issued by the National Office of the
Internal Revenue Service as evidence that this Plan is qualified
under Section 401 of the Code. 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.
12. DEALER INFORMATION.
--------------------------------------------------------------
Dealer Name
--------------------------------------------------------------
Dealer Head Office Address: No. and Street
--------------------------------------------------------------
City State Zip Code
--------------------------------------------------------------
Oppenheimer Dealer Number
--------------------------------------------------------------
Representative's Last Name First Name MI
--------------------------------------------------------------
Representative's Branch Office Address: No. and Street
--------------------------------------------------------------
City State Zip Code
--------------------------------------------------------------
Rep's Office Telephone Number Rep's A.E. Number
<PAGE>
OppenheimerFunds
Retirement Plan Contribution Form
Name of Employer/Business:
Name of Plan Administrator:
Address of Employer/Business:
Phone #:
Employer Tax I.D. No.:
Enclosed with this form are contributions to the following
OppenheimerFunds Retirement Plan adopted by the Employer (use a separate
form for each type of plan if employer has adopted both plans):
/ / Profit Sharing Plan / / Money Purchase Pension Plan
1. Choose your desired account setup:
Choose one of the following:
/ / Establish separate accounts for each participant.
/ / Establish a pooled account for all participants (plan
administrator is responsible for allocating on its books the
appropriate amount to each participant).
Choose one of the Following:
/ / Establish all accounts using the Employer's address set forth
in the Application/Adoption Agreement.
/ / Establish all accounts using the participants' home addresses.
(Cannot be used if you choose a pooled account. The Address
Column on the reverse side must be completed.)
2. List participant information on the reverse side for each account to
be established. List Employer and Employee contributions separately.
Indicate Employer contributions in the column labeled "Account Type"
as "ER", and Employee contributions in that column as "EE". If
additional space is needed, photocopy the form and staple all pages
together.
3. Attach all contributions. Checks should be made payable to the
Trustee for the OppenheimerFunds Retirement Plans ($250 minimum
initial purchase, $25 minimum subsequent purchases).
Mail to: Oppenheimer Shareholder Services
Retirement Plans Administration
P.O. Box 173694
Denver, CO 80217-3694
Note: All contributions are subject to the terms and conditions of the
governing plan documents for the OppenheimerFunds Retirement Plan.
Failure to follow the terms of the Plan can adversely affect the tax
qualification of your OppenheimerFunds Retirement Plan.
Is this a
Participant new or
Name, Date of Participant's Name of existing
Birth, SSN Address Contribution Fund Participant?
- ------------- ------------- ------------ ------- ------------
- -------------------------------------------------------------------
- -------------------------------------------------------------------
- -------------------------------------------------------------------
- -------------------------------------------------------------------
- -------------------------------------------------------------------
- -------------------------------------------------------------------
- -------------------------------------------------------------------
- -------------------------------------------------------------------
$------------
Total
Contributions
<PAGE>
BASIC PLAN DOCUMENT (NO. 01)* OPPENHEIMERFUNDS RETIREMENT PLAN
ARTICLE I - DEFINITIONS
ACCOUNT means the aggregate of the individual bookkeeping accounts
established for each Participant in accordance with Section 4.3.
ADOPTION AGREEMENT means the written agreement by which the Employer
establishes this Plan. The information set forth in the Adoption
Agreement executed by the Employer shall be deemed to be a part of this
Plan as if set forth in full herein.
AFFILIATED EMPLOYERS means the Employer and any corporation which is a
member of a controlled group of corporations (as defined in Section 414(b)
of the Code) which includes the Employer, any trade or business (whether
or not incorporated) which is under common control (as defined in Section
414(c) of the Code) with the Employer, any service organization (whether
or not incorporated) which is a member of an affiliated service group (as
defined in Section 414(m) of the Code) which includes the Employer, or any
other entity required to be aggregated with the Employer pursuant to
Section 414(o) of the Code.
BENEFICIARY means the beneficiary or beneficiaries so designated by a
Participant pursuant to Section 6.7, in accordance with Section 401(a)(9)
of the Code and applicable regulations thereunder.
BUSINESS means the business or profession engaged in by the Employer.
CODE means the Internal Revenue Code of 1986, as amended.
COMPENSATION means Compensation as that term is defined in Section 11.5(b)
of the Plan. For any Self-Employed Individual covered under the Plan,
Compensation means Earned Income.
(1) Notwithstanding the above, if elected by the Employer in the Adoption
Agreement, Compensation shall include any amount which is contributed
by the Employer pursuant to a salary reduction agreement and which
is not includable in the gross income of the Employee under Sections
125, 402(a)(8), 402(h) or 403(b) of the Code. This paragraph is
effective for Plan Years beginning on or after January 1, 1990.
___________________
*Provisions are common to both money purchase pension plan and profit
sharing plan unless otherwise stated.
(2) For years beginning after December 31, 1988, the annual compensation
of each Participant taken into account under the Plan for any year
shall not exceed $200,000, as 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 a Plan determines
compensation on a period of time that contains fewer than 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.
In determining the Compensation of a Participant for purposes of this
limitation, the rules of Section 414(q)(6) of the Code shall apply,
except 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 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 Taxable Wage Base
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 definition prior
to the application of this limitation. For purposes of this limit:
(i) all plans maintained by the same Employer shall be
treated as a single plan;
(ii) all plans maintained with respect to one or more
trades or businesses which are under common control,
within the meaning of Sections 401(d)(9) and (10) or
414(c) of the Code, shall be treated as a single plan; and
(iii) all plans in which any person participates as a
Self-Employed Individual shall be treated as a single plan
with respect to such Self-Employed Individual.
DISABILITY means inability to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to be of long-
continued and indefinite duration. This definition shall be interpreted
to be identical with that contained in Section 72(m)(7) of the Code.
EARNED INCOME means, except as otherwise required by Section 401(c) of the
Code and the regulations thereunder, net earnings from self-employment to
the extent such net earnings are derived from the Business during the Plan
Year while such person is a Participant, but only if personal services of
such Participant are a material income-producing factor in the Business.
In computing such net earnings, a deduction will be made for contributions
under the Plan made on behalf of Participants in the Plan to the extent
deductible under Section 404 of the Code. Net earnings shall be determined
with regard to the deduction allowed the Employer by Section 164(f) of the
Code for taxable years beginning after December 31, 1989.
EFFECTIVE DATE means the first day of the Plan year during which the Plan
is adopted.
EMPLOYEE means any person, including a Self-Employed Individual, who is
employed by any Affiliated Employer and shall include any Leased Employee
considered an Employee of the Employer under Section 414(n) or (o) of the
Code.
EMPLOYER means the sole proprietor, partnership, corporation or entity
taxable as a corporation which adopts the Plan by execution of an Adoption
Agreement, and shall also include a predecessor or successor entity which
engages in or has engaged in the Business with respect to which the Plan
is established.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended.
EXCESS COMPENSATION means, with respect to any Plan Year, the amount of
a Participant's Compensation which exceeds the Taxable Wage Base in effect
on the first day of the Plan Year.
5-PERCENT OWNER means, if the Employer is a corporation, any person who
owns or is considered as owning (within the meaning of Section 318 of the
Code) more than 5 percent of the outstanding stock of the corporation or
stock possessing more than 5 percent of the total combined voting power
of all stock of the corporation, or, if the Employer is not a corporation,
any person who owns more than 5 percent of the capital or profits interest
in the Employer.
HIGHLY COMPENSATED EMPLOYEE means an Employee within the meaning of
Section 414(q) of the Code.
HOUR OF SERVICE shall mean:
(1) Each hour for which an individual is paid, or entitled to payment,
for the performance of duties for the Employer. These hours shall
be credited to the individual for the computation period in which the
duties are performed; and
(2) Each hour for which an individual is paid, or entitled to payment,
by the Employer on account of a period of time 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. No more than 501 hours of service shall be credited under
this paragraph for any single continuous period (whether or not such
period occurs in a single computation period). Hours under this
paragraph shall be calculated and credited pursuant to Section
2530.200b-2 of the Department of Labor Regulations which are
incorporated herein by reference; and
(3) Each hour for which back pay, irrespective of mitigation of damages,
is either awarded or agreed to by the Employer. The same Hours of
Service shall not be credited both under paragraph (1) or paragraph
(2), as the case may be, and under this paragraph (3). These hours
shall be credited to the individual for the computation period or
periods to which the award or agreement pertains rather than the
computation period in which the award, agreement or payment is made.
INSURER means any insurance company which shall issue non-transferable
annuity or life insurance policies under Section 4.2 of this Plan.
KEY EMPLOYEE means any Employee or former Employee (and the beneficiaries
of such Employee) who at any time during the determination period was (1)
an officer of the Employer if such individual's annual compensation
exceeds 50 percent of the dollar limitation under Section 415(b)(1)(A) of
the Code, (2) an owner (or considered an owner under Section 318 of the
Code) of one of the ten largest interests in the Employer if such
individual's compensation exceeds 100 percent of the dollar limitation
under Section 415(c)(1)(A) of the Code, (3) a 5-percent owner of the
Employer, or (4) a 1-percent owner of the Employer who has an annual
compensation of more than $150,000. For purposes of this definition,
annual compensation means 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 an Employee's gross
income under Sections 125, 402(a)(8), 402(h) or 403(b) of the Code. The
determination period is the Plan Year containing the determination date
and the four preceding Plan Years. The determination of who is a Key
Employee will be made in accordance with Section 416(i)(1) of the Code and
the regulations thereunder.
LEASED EMPLOYEE means any person (other than an Employee of the recipient)
who, pursuant to an agreement between any of the recipient Affiliated
Employers and any other person ("leasing organization"), has performed
service for any of the recipient Affiliated Employers (or for any of the
recipient Affiliated Employers 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 year and such services are of a
type historically performed by employees in the recipient Employer's
business field. The determination of whether a person is a Leased
Employee will be made pursuant to Section 414(n) of the Code. A Leased
Employee shall not be considered an Employee of the recipient Employer if
(1) such employee is covered by a money purchase pension plan providing:
(i) a non-integrated employer contribution rate of at least 10% of
Compensation, as defined in Section 11.5(b) of the Plan, but including
amounts contributed pursuant to a salary reduction agreement which are
excludable from the employee's gross income under Sections 125, 402(a)(8),
402(h) or 403(b) of the Code, (ii) immediate participation, and (iii) full
vesting; and (2) Leased Employees do not constitute more than 20 percent
of the recipient Employer's non-highly compensated workforce.
NET PROFITS means the net income of the Employer before deduction for
income taxes and contributions made hereunder.
NORMAL RETIREMENT AGE means the age selected by the Employer in the
Adoption Agreement.
OWNER-EMPLOYEE means the sole proprietor or a partner, in a partnership,
who owns more than l0% of either the capital interest or the profits
interest in such partnership.
PARTICIPANT means any person who participates in the Plan as provided in
ARTICLE II hereof.
PLAN means this Retirement Plan, including the accompanying Trust
Agreement and the Adoption Agreement.
PLAN ADMINISTRATOR means the Employer.
PLAN YEAR means the Employer's taxable year for federal income tax
purposes.
SELF-EMPLOYED INDIVIDUAL means an individual who has Earned Income for the
taxable year from the trade or business with respect to which the Plan was
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.
SPONSOR means OppenheimerFunds Distributor,Inc.
TAXABLE WAGE BASE means the contribution and benefit base in effect under
Section 230 of the Social Security Act at the beginning of the Plan Year.
TOP-HEAVY PLAN means this Plan and any other plan maintained by the
Employer which is deemed to be a top-heavy plan pursuant to the Code.
TRUSTEE means the Trustee under the accompanying Trust Agreement.
TRUST AGREEMENT means the accompanying Declaration of Trust, which is a
part of this Plan.
TRUST ACCOUNT means an account maintained by the Trustee under the Trust
Agreement for all contributions except the portion, if any, allocated
pursuant to Section 4.2.
VALUATION DATE for the Plan means the latest day of the taxable year of
the Employer. Valuation Date for an Account in the Plan means, in
addition, any date a distribution is made from that Account. Assets of
an Account, or if applicable the Plan, must be valued at fair market value
on each Valuation Date.
ARTICLE II - PARTICIPATION
Section 2.1 - Participation
(a) Every Employee who shall have completed two (2) Years of Service (as
hereinafter defined), whether or not consecutive, with the Employer,
or such shorter period of service with the Employer specified in the
Adoption Agreement, shall become a Participant under the Plan. If
such service shall have been completed on the Effective Date of the
Plan, participation shall begin as of that date; if such service
shall be completed subsequently, participation shall begin on the
first day of the month coincident or preceding completion of such
service.
(b) The participation of a Participant in the Plan will continue until
he terminates his service with the Employer for any reason, including
retirement, disability or death. If a Participant who has terminated
his service with the Employer is re-employed by the Employer, he will
become a Participant on the date of his re-employment. If an
Employee's service with the Employer is terminated prior to his
becoming a Participant hereunder and he again becomes an Employee,
his prior period of service shall be restored upon his again becoming
an Employee.
Section 2.2 - Controlled Business
(a) Except as provided in Article XI, all Employees of the Employer or
any Affiliated Employer will be treated as employed by a single
employer.
(b) If the 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 such other trades or businesses must, when
looked at as a single plan, satisfy Sections 401(a) and (d) of the
Code for the Employees of this and all such other trades or
businesses.
(c) 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 such other trades or businesses must be included in a
plan which satisfies Sections 401(a) and (d) of the Code and which
provides contributions and benefits not less favorable than provided
for Owner-Employees under this Plan.
(d) 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.
(e) For purposes of paragraphs (b), (c) and (d), 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:
(1) own the entire interest in an unincorporated trade or business,
or
(2) 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 an 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.
Section 2.3 - Year of Service
For purposes of this ARTICLE II, a "Year of Service" shall mean a twelve
consecutive-month period during which the Employee completes at least
1,000 Hours of Service, computed with reference to the date the Employee
first performs an Hour of Service for the Employer and each anniversary
thereof. In any case in which the Employer maintains the plan of a
predecessor Employer, service for such predecessor shall be treated as
service with the Employer.
Section 2.4 - Bargaining Unit Employees
For purposes of Section 2.1, the term "Employee" does not include, if so
elected by the Employer in the Adoption Agreement, any Employee who is
included in a unit of Employees covered by a collective-bargaining
agreement between the Employer and Employee representatives where (i)
retirement benefits were subject to good-faith bargaining, and (ii) if 2%
or less of the Employees of the Employer who are covered by that agreement
are professionals as defined in Proposed Treasury Regulation Section
1.410(b)-9(g) or any successor provision. Solely for these purposes, 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.
ARTICLE III - CONTRIBUTIONS
Section 3.1 - Employer Contributions
For Money Purchase Pension Plans only:
(a) Each Plan Year the Employer may contribute on behalf of each
Participant such amount as the Employer shall determine in the
Adoption Agreement, but in no event to exceed the lesser of $30,000
(or such larger amount as may be permitted under the Code) or 25% of
such Participant's Compensation, as defined in ARTICLE I of this
Plan.
For Profit Sharing Plans only:
(a) Each Plan Year the Employer may contribute on behalf of each
Participant such amount as the Employer shall determine in the
Adoption Agreement, but in no event to exceed the lesser of $30,000
(or such larger amount as may be permitted under the Code) or 15% of
such Participant's Compensation.
The remainder of Article III applies to both Money Purchase Pension
Plan and Profit Sharing Plan versions.
The above limitations for a money purchase pension plan or a profit
sharing plan, as the case may be, apply in the aggregate where any
Owner-Employee is covered as a Self-Employed Individual under more
than one self-employed retirement plan established with respect to
other trades or businesses. In the event the above limitations would
otherwise be exceeded, the amount which may be contributed with
respect to each trade or business shall be limited to that amount
which bears the same ratio to the aggregate amount deductible with
respect to all trades or businesses as the Earned Income derived from
each such trade or business bears to the Earned Income derived from
all the trades or businesses with respect to which plans are
established.
(b) A Participant must share in the Employer's contributions if the
Participant either (i) has completed more than 500 Hours of Service
for the Employer during a Plan Year, regardless of whether the
Participant is employed on the last day of the Plan Year, or (ii) is
employed on the last day of the Plan Year.
Section 3.2 - Non-deductible Employee Contributions
This Plan will not accept non-deductible Employee contributions for Plan
Years beginning after the Plan Year in which this Plan is adopted by the
Employer. Employee contributions for Plan Years beginning after December
31, 1986 will be limited so as to meet the non-discrimination test of
Section 401(m) of the Code. A Separate Account shall be established under
the Plan for each Participant's voluntary contributions and earnings.
Section 3.3 - Deductible Employee Contributions
(a) The Plan Administrator will not accept deductible Employee
contributions which are made for a taxable year beginning after
December 31, 1986. Deductible employee contributions prior to that
time 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 Accounts maintained for
other contributions to the Plan. No part of the deductible employee
contribution Account will be used to purchase life insurance.
(b) The Plan will accept accumulated deductible employee contributions
(as defined in section 72(o)(5) of the Code) that were distributed
from a qualified retirement plan and rolled over pursuant to Section
402(a)(5), 402(a)(7), 403(a)(4) or 408(d)(3) of the Code. The rolled
over amount will be added to the deductible employee contributions
Account but will not be taken into account in applying the
limitations on deductible contributions to this Plan. The Plan will
not accept rollovers of accumulated deductible employee contributions
from a simplified employee pension plan nor from a plan under which
the Employee was covered as a self-employed individual as described
in Section 401(c)(1) of the Code.
(c) The Participant may withdraw any part of the deductible employee
contributions Account by making a written application to the Plan
Administrator. However, if at the time the distribution is received
the Participant has not attained age 59 1/2 and is not disabled, the
Participant will be subject to a federal income tax penalty, unless
the distribution is rolled over to a qualified plan or individual
retirement plan within 60 days of the date of distribution.
Section 3.4 - Minimum Contribution
For Non-integrated Plans only:
(a) If the Employer or any Affiliated Employer does not maintain any
qualified defined benefit plan, except as provided in (b), (c) and
(d) below, Employer contributions on behalf of any Participant who
is not a Key Employee shall not be less than the lesser of three
percent (3%) of such Participant's Compensation or the largest
percentage of Employer contributions, as a percentage of the Key
Employee's Compensation up to $200,000, allocated on behalf of any
Key Employee for the Plan Year. This minimum contribution shall be
made even though, under other Plan provisions, the Participant would
not otherwise be entitled to receive a contribution, or would have
received a lesser contribution for the year, because of the
Participant's failure to complete 1,000 Hours of Service.
(b) In the event the Employer or any Affiliated Employer maintains any
qualified defined benefit plan in addition to this Plan, the Employer
will provide a minimum allocation equal to five percent (5%) of
Compensation to each non-Key Employee entitled under (a) above to
receive a minimum contribution.
(c) The provisions of (a) and (b) above shall not apply to any
Participant who was not employed by the Employer or an Affiliated
Employer on the last day of the Plan Year.
(d) The provision in (a) above shall not apply to any Participant to the
extent the Participant is covered under any other plan or plans of
the Employer and the Employer has provided in the Money Purchase
Pension Plan or the Profit Sharing Plan Adoption Agreement that the
minimum contribution requirement applicable to top-heavy plans will
be met in another plan or other plans.
Section 3.5 - Vesting
All contributions made by or on behalf of each Participant and all
investments made with such contributions and the earnings thereon shall
immediately become and at all times remain fully vested and non-
forfeitable. Within one hundred and eighty (180) days after the close of
each Plan Year, the Employer shall furnish each Participant a statement
of the amounts credited to his Account during such Plan Year.
Section 3.6 - Remittance to Trustee
All contributions except the portion, if any, allocated to premiums on
non-transferable policies pursuant to Section 4.2 shall be transmitted to
the Trustee by the Employer and shall be accompanied by written
instructions from the Employer specifying the Participants to whose
Accounts they are to be credited, which are amounts contributed by the
Employer and which are amounts of voluntary employee contributions or
deductible employee contributions contributed by each Participant and any
other relevant information required by the Trustee. Contributions of the
Employer and the Participants shall be remitted to the Trustee by the
Employer at such times as the Employer may determine.
Section 3.7 - Return of Contributions
Any contribution made by the Employer because of a mistake of fact may be
returned to the Employer within one year of such contribution. Any
contribution made by the Employer which is conditional upon the Plan's
initial qualification under the Code may be returned to the Employer
within one year after the date such initial qualification is denied, but
only if the application for qualification is made by the time prescribed
by law for filing the Employer's return for the taxable year in which the
Plan is adopted, or such later date as the Secretary of the Treasury may
prescribe. Any contribution made by the Employer which is conditioned on
the deductibility of such amount under Section 404 of the Code may be
returned to the Employer, to the extent of the amount disallowed, within
one year after the disallowance of the deduction.
ARTICLE IV - INVESTMENT AND ALLOCATIONS
Section 4.1 - Investments
All contributions made hereunder except the portion, if any, allocated to
premiums on non-transferable policies pursuant to Section 4.2 shall be
invested as directed in a uniform, consistent and non-discriminatory
manner by the Employer, in one or more investment companies registered
under the Investment Company Act of 1940 as provided under the
accompanying Trust Agreement.
Section 4.2 - Insurance
All or any portion of the contributions made by the Employer for a
Participant pursuant to Section 3.1, may, if elected by the Employer, in
a uniform and non-discriminatory manner, be used to pay premiums on
annuities (including variable annuities where the underlying investments
are made in one or more of the mutual funds managed by Oppenheimer
Management Corporation or any parent, subsidiary, or affiliate thereof)
or ordinary or term life insurance, provided that the maximum aggregate
amount which may be used to pay the premiums for term insurance shall be
less than 25% of the aggregate contributions allocated to any
Participant's Account and the maximum aggregate premiums paid for his
Account for ordinary or whole life insurance shall be less than 50% of the
aggregate contributions allocated to his Account. If both ordinary life
and term insurance are purchased on the life of any Participant, the sum
of the term insurance premium plus one-half of the ordinary life premiums
may not exceed 25% of the Employer contributions allocated to such
Participant. The insurance may be issued by any insurance company in the
name of the Participant and shall be owned by the Plan Administrator or
may be issued in connection with a systematic capital accumulation
program. A restriction to the following effect shall be made a part of
the policy: "This policy is not transferable and may not be sold,
assigned, discounted or pledged as collateral for a loan or as security
or for any other purpose to any person other than the Insurance Company.
This policy is issued in conjunction with a plan established under Section
401 of the Internal Revenue Code and constitutes part of the non-trusteed
annuity portion of the plan." Dividends on any such policy shall be
applied to reduce future premiums or purchase additional insurance. The
Employer shall substitute a bank as trustee or custodian of the insurance
contracts if the Employer is notified by the Internal Revenue Service that
such substitution is required because the holder of the contracts is not
keeping such records, or making such returns, or rendering such statements
as are required by law.
Section 4.3 - Separate Accounts
All contributions made by or on behalf of each Participant, and all
investments made with such contributions and the earnings thereon, shall
be credited to a separate Account or separate Accounts maintained for him
under the Plan, the assets of which shall be valued on the Valuation Date.
On such Valuation Date, the earnings and losses of the Trust Account shall
be allocated to each Participant's Account in the ratio that such Account
balance bears to Account balances.
Section 4.4 - Allocation of Contributions
(a) All money purchase pension contributions made by the Employer for a
given Plan Year shall be allocated as provided in the Adoption
Agreement to the Account of the Participant for whom such
contribution was made.
(b) All profit-sharing contributions shall be allocated to the Account
of each Participant in the ratio that such Participant's Compensation
bears to the Compensation of all Participants. However, if the
profit-sharing formula selected in the Adoption Agreement is
integrated with Social Security, profit-sharing contributions for the
Plan Year will be allocated, effective for Plan Years beginning on
or after January 1, 1989, and subject to Section 3.4, to
Participants' Accounts as follows:
(1) First, the profit sharing contributions made by the
Employer shall be allocated in the ratio that the sum of
(i) each Participant's Compensation for the Plan Year plus
(ii) Excess Compensation bears to the sum of all
Participants' total Compensation and Participants' Excess
Compensation, but not in excess of 5.7% of the sum of such
Compensation plus such Excess Compensation taken into
account under this paragraph; and
(2) Next, any remaining profit-sharing contributions made by
the Employer shall be allocated to all Participants in the
ratio that each Participant's Compensation for the Plan
Year bears to all the Participants' Compensation for that
year.
Section 4.5 - Coordination of Social Security Integration
If the Employer maintains plans involving integration with Social Security
other than this Plan, and if any Participant is eligible to participate
in more than one of such plans, all such plans will be considered to be
integrated if the extent of the integration of all such plans does not
exceed 100 percent. For purposes of the preceding sentence, the extent of
integration of a plan is the ratio (expressed as a percentage) which the
actual benefits, benefit-rate, offset rate, or Employer contribution rate
under the plan bears to the integration limitation applicable to such
plan. If the Employer enters into both the money purchase pension
Adoption Agreement and the profit-sharing Adoption Agreement under this
Plan, integration with Social Security may only be selected in one
Adoption Agreement.
Section 4.6 - Trustee Authority; Recordkeeping
The Trustee is authorized to hold and invest amounts transferred to the
Plan from any other plans, and the restrictions contained in this Plan
shall apply as of the date originally contributed to the predecessor plan.
The Employer shall keep all necessary records to determine the character
of such amounts.
Section 4.7 - Borrowing Not Permitted
No Participant under this Plan may borrow against the cash surrender value
of any policies purchased on his behalf.
Section 4.8 - Distribution of Policies
Subject to the joint and survivor annuity rules of ARTICLE VI, at or
before retirement any contract on the life of a Participant shall be
either distributed to the Participant or converted to cash to provide
retirement income for the Participant. Benefits resulting from such
distribution or conversion shall be paid in accordance with the Plan.
Only insurance contracts that conform to the terms of the Plan will be
issued.
ARTICLE V - PAYMENT OF BENEFITS UNDER THE PLAN
Section 5.1 - General
All distributions made under this Article shall be subject to the
requirements of Code Section 401(a)(9) and Treasury Regulations
thereunder, including the minimum distribution incidental benefit
requirements of Section 1.401(a)(9)-2 of the Proposed Regulations. The
distribution rules contained in this ARTICLE are subject to the
requirements of ARTICLE VI.
Section 5.2 - Commencement of Benefits
(a) If the value of the Participant's Account balance derived from
Employer and Employee contributions exceeds (or at the time of any
prior distribution exceeded) $3,500, and the Account balance is
distributable prior to the later of the Participant's Normal
Retirement Age or his attainment of age 62, the Participant and the
Participant's Spouse (or the survivor) must consent to any
distribution of such Account balance. The consent of the Participant
and the Participant's Spouse shall be obtained in writing within the
90-day period prior to the date benefits commence. The Employer
shall notify the Participant and the Participant's Spouse of the
right to defer any distribution until the later of the Participant's
Normal Retirement Age or his attainment of age 62. 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 date
benefits commence.
Notwithstanding the foregoing, only the Participant need consent to
the commencement of a distribution in the form of a Qualified Joint
and Survivor Annuity (as hereinafter defined) which can be
distributed prior to the later of the Participant's Normal Retirement
Age or his attainment of age 62. (Furthermore, if payment in the
form of a Qualified Joint and Survivor Annuity is not required with
respect to the Participant pursuant to Section 6.5 of the Plan, only
the Participant need consent to the distribution of an Account
balance which can be distributed prior to the later of the
Participant's Normal Retirement Age or his attainment of age 62).
The consent of neither 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 this 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 as the Employer 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 may, 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 any 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.
(b) Unless the Participant elects otherwise, distribution of benefits
will begin no later than the 60th day after the latest of the close
of the Plan Year in which occurs:
(1) The Participant attains age 65 (or Normal Retirement Age, if
earlier);
(2) The 10th anniversary of the year in which the Participant
commenced participation in the Plan; or
(3) The Participant's termination of service with the Employer.
The failure of a Participant and Spouse to consent to a distribution while
a benefit is distributable, prior to the later of the Participant's Normal
Retirement Age or age 62 in accordance with Section 5.2(a) hereof, shall
be deemed to be an election to defer commencement of payment of any
benefit until the time provided in this Section 5.2(b).
Section 5.3 - Required Minimum Distribution; Transitional Rule
(a) Notwithstanding any other provision of the Plan to the contrary
(other than the transitional rules of this Section 5.3), the Account
balance of a Participant must be distributed, or must begin to be
distributed no later than the April 1 of the calendar year following
the calendar year in which the Participant attains age 70 1/2 (the
"Required Beginning Date").
(b) The Required Beginning Date of a Participant who attains age 70 1/2
before January 1, 1988, shall be determined in accordance with (1)
or (2) below:
(1) 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.
(2) 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:
(i) the calendar year in which the Participant attains age 70
1/2, or
(ii) 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.
(c) 5-percent owner. A Participant is treated as a 5-percent owner for
purposes of Section 5.3(b) 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.
(d) 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.
Section 5.4 - Form of Distribution
Except as otherwise provided in ARTICLE VI, distribution of a
Participant's benefits may be made in cash or kind in any one or more of
the following methods:
(1) In a lump sum.
(2) In substantially equal periodic installments payable at least
annually over a period certain not in excess of the life expectancy
of the Participant or the joint life and last survivor expectancy of
the Participant and his Beneficiary, as applicable.
(3) By the conversion of any policy purchased pursuant to Section 4.2 of
this Plan into an annuity for the life of the Participant and his
Beneficiary (including any period certain not extending beyond the
life expectancy of the Participant or the joint life and last
survivor expectancy of the Participant and his Beneficiary.
Section 5.5 - Amount to be Distributed
If a Participant's Account balance is to be distributed in other than a
lump sum, then the following minimum distribution rules shall apply on or
after the Required Distribution Date:
(a) If a Participant's benefit is to be distributed over (1) a period not
extending beyond the Life Expectancy of the Participant or the joint
life and last survivor expectancy of the Participant and the
Participant's Beneficiary or (2) a period not extending beyond the
Life Expectancy of the Beneficiary, the amount required to be
distributed for each calendar year, beginning with distributions for
the first Distribution Calendar Year (as hereinafter defined), must
at least equal the quotient obtained by dividing the Participant's
benefit (as determined under subsection (e) below) by the Applicable
Life Expectancy (as hereinafter defined).
(b) 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 50% of the present
value of the amount available for distribution is paid within the
life expectancy of the Participant.
(c) 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 (as hereinafter defined) or (2) if the
Participant's Spouse is not the designated Beneficiary, the
applicable divisor 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 hereinafter defined) in subsection
5.5(a) above as the relevant divisor without regard to Proposed
Regulations Section 1.401(a)(9)-2.
(d) The minimum distribution required for the Participant's first
Distribution Calendar Year must be made on or before the
Participant's Required Beginning Date. The minimum distribution for
other calendar years, including the minimum distribution for the
Distribution Calendar Year in which the Employee's Required
Distribution Date occurs, must be made on or before December 31 of
that Distribution Calendar Year.
(e) For purposes of this Section 5.5, the "Participant's benefit" means
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 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. 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 Distribution 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.
Section 5.6 - Immediate Distributions
Notwithstanding the provisions of this ARTICLE V, if the Account balance
derived from Employer and Employee contributions of a Participant on the
date of his termination of service, the date he becomes permanently and
totally disabled, or the date of his death does not exceed $3,500, such
amount shall be paid to him, his Spouse or his Beneficiary (whichever is
applicable under ARTICLE VI) in a lump sum as soon as practicable after
such date. For purposes of this Section 5.6, if the value of a
Participant's Account is zero, the Participant shall be deemed to have
received a distribution of such entire Account balance.
Section 5.7 - Death Benefits
(a) If the Participant dies after distribution of his or her interest has
begun, the remaining portion of such interest will continue to be
distributed at least as rapidly as under the method of distribution
being used prior to the Participant's death.
(b) If the Participant dies before distribution of his or her interest
begins, distribution of the Participant's entire interest shall be
completed by December 31 of the calendar year containing the fifth
anniversary of the Participant's death except to the extent that an
election is made to receive distributions in accordance with (1) or
(2) below:
(1) if any portion of the Participant's interest is payable to a
designated Beneficiary, distributions may be made over the life
or over a period certain not greater than the life expectancy
of the designated Beneficiary commencing on or before December
31 of the calendar year immediately following the calendar year
in which the Participant died;
(2) if the designated Beneficiary is the Participant's surviving
Spouse, the date distributions are required to begin in
accordance with (i) above shall not be earlier than the later
of (1) December 31 of the calendar year immediately following
the calendar year in which the Participant died and (2) December
31 of the calendar year in which the Participant would have
attained age 70 1/2.
If the Participant has not made an election pursuant to this
Section 5.7 by the time of his or her death, the Participant's
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 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.
(c) For purposes of subsection (b) of this Section 5.7, if the Surviving
Spouse dies after the Participant, but before payments to such Spouse
begin, the provisions of such subsection (b), with the exception of
paragraph (ii) therein, shall be applied as if the Surviving Spouse
were the Participant.
(d) For purposes of this Section 5.7, any amount paid to a child of the
Participant will be treated as if it has been paid to the Surviving
Spouse if the amount becomes payable to the Surviving Spouse when the
child reaches the age of majority.
(e) For purposes of this Section 5.7, distribution of a Participant's
interest is considered to begin on the Participant's Required
Beginning Date (or, if subsection (c) of this Section 5.7 is
applicable, the date distribution is required to begin to the
Surviving Spouse pursuant to subsection (b) of this Section 5.7).
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.
Section 5.8 - ARTICLE V Definitions
For purposes of Sections 5.1 to 5.7 of this Plan, the following
definitions shall apply in determining the date for distributions, the
form of distributions and the amount of distributions under the Plan:
(a) "Applicable Life Expectancy": The life expectancy (or joint and last
survivor expectancy) calculated using the attained age of the
Participant (or Beneficiary) as of the Participant's (or
Beneficiary's) birthday in the applicable calendar year reduced by
one for each calendar year which has elapsed since the date life
expectancy was first calculated. If life expectancy is being
recalculated, the Applicable Life Expectancy shall be the life
expectancy as so recalculated. The applicable calendar year shall
be the first Distribution Calendar Year, and if life expectancy is
being recalculated, such succeeding calendar year.
(b) "Life expectancy": Life expectancy and joint and last survivor
expectancy as computed by use of the expected return multiples in
Tables V and VI of section 1.72-9 of the income tax regulations.
Unless otherwise elected by the Participant (or Spouse, in the case
of distributions described in Section 5.07(b)(2)) by the time
distributions are required to begin, Life Expectancies shall be
recalculated annually. Such election shall be irrevocable as to the
Participant (or Spouse) and shall apply to all subsequent years. The
Life Expectancy of a nonspouse beneficiary may not be recalculated.
(c) "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 pursuant to Section 5.7 above.
Section 5.9 - Transitional Rule
(a) Notwithstanding the other requirements of this ARTICLE V, a
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):
(1) The distribution by the trust is one which would not have
disqualified such trust under Section 401(a)(9) of the Code as
in effect prior to amendment by the Deficit Reduction Act of
1984.
(2) The distribution is in accordance with a method of distribution
designated by the Employee whose interest in the trust is being
distributed or, if the Employee is deceased, by a Beneficiary
of such Employee.
(3) Such designation was in writing, was signed by the Employee or
the Beneficiary, and was made before January 1, 1984.
(4) The Employee had accrued a benefit under the Plan as of December
31, 1983.
(5) The method of distribution designated by the Employee or the
Beneficiary specifies the time at which distribution will
commence, the period over which distributions will be made, and
in the case of any distribution upon the Employee's death, the
Beneficiaries of the Employee listed in order of priority.
(b) A distribution upon death will not be covered by this transitional
rule unless the information in the designation contains the required
information described above with respect to the distributions to be
made upon the death of the Employee.
(c) For any distribution which commences before January 1, 1984, but
continues after December 31, 1983, the Employee, or the Beneficiary,
to whom such distribution is being made, will be presumed to have
designated the method of distribution under which the distribution
is being made if the method of distribution was specified in writing
and the distribution satisfies the requirements in Section 5.9(a)(1)
and (5) hereof.
(d) If a designation is revoked, any subsequent distribution must satisfy
the requirements of Section 401(a)(9) of the Code and proposed
regulations thereunder. If a designation is revoked subsequent to
the date distributions are required to begin, the trust must
distribute by the end of the calendar year following the calendar
year in which the revocation occurs the total amount not yet
distributed which would have been required to be distributed to
satisfy Section 401(a)(9) of the Code and regulations thereunder, but
for the Section 242(b) election. For calendar years beginning after
December 31, 1988, such distributions must meet the minimum
distribution incidental benefit requirements in Proposed Regulations
Section 1.401(a)(9)-2. Any changes in the designation will be
considered to be a revocation of the designation. However, the mere
substitution or addition of another Beneficiary (one not named in the
designation) under the designation will not be considered to be a
revocation of the designation, so long as such substitution or
addition does not alter the period over which distributions are to
be made under the designation, directly or indirectly (for example,
by altering the relevant measuring life). In the case in which an
amount is transferred or rolled over from one plan to another plan,
the rules in Q&A J-2 and J-3 shall apply.
ARTICLE VI - JOINT AND SURVIVOR ANNUITY AND PRE-RETIREMENT
SURVIVOR ANNUITY
Section 6.1 - General
Except as provided with respect to certain profit sharing plans in Section
6.5, the provisions of this ARTICLE VI shall apply to any Participant who
is credited with at least one hour of service with the Employer on or
after August 23, 1984, and such other Participants as provided in Section
6.6 hereof.
Section 6.2 - Joint and Survivor and Pre-retirement Survivor Annuity
(a) Unless an optional form of benefit is selected pursuant to a
Qualified Election within the 90-day period ending on the date
benefit payments would commence, a married Participant's vested
Account balance will be paid in the form of a Qualified Joint and
Survivor Annuity and an unmarried Participant's vested account
balance will be paid in the form of a life annuity.
(b) Unless an optional form of benefit has been selected within the
election period pursuant to a Qualified Election (as hereinafter
defined), if a Participant dies before benefits have commenced then
the Participant's vested Account balance shall be applied toward the
purchase of an annuity for the life of the surviving Spouse (a
"Qualified Pre-retirement Survivor Annuity"). The surviving Spouse
may elect to have such annuity distributed immediately or may elect
another manner of distribution.
Section 6.3 - ARTICLE VI Definitions
For purposes of this ARTICLE VI, the following definitions shall apply:
(a) "Election period": The period which begins on the first day of the
Plan Year in which the Participant attains age 35 and ends on the
date of the Participant's death. If a Participant separates from
service prior to the first day of the Plan Year in which age 35 is
attained, with respect to the Account balance as of the date of
separation, the election period shall begin on the date of
separation.
(b) "Pre-Age 35 Waiver": 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 Qualified Pre-retirement 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 Qualified Pre-retirement Survivor
Annuity in such terms as are comparable to the explanation required
under Section 6.4. Qualified Pre-retirement 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 ARTICLE
VI.
(c) "Qualified Election": A waiver of a Qualified Joint and Survivor
Annuity or a Qualified Pre-retirement Survivor Annuity and the
election of an optional form of benefit described in Section 5.4.
The waiver shall not be effective unless: (a) it is in writing and
it is consented to by the Participant's Spouse; (b) the Spouse's
consent is witnessed by a notary public; (c) the election is limited
to a specific alternate Beneficiary, including any class of
Beneficiaries or any contingent Beneficiaries (or the Spouse
expressly permits designations by the Participant without any further
spousal consent); (d) the election designates a form of benefit
payment which may not be changed without the Spouse's consent (or the
Spouse expressly permits designations by the Participant without any
further consent of the Spouse); and (e) the Spouse's consent
acknowledges the effect of the election. Notwithstanding this
consent requirement, if the Participant establishes to the
satisfaction of the Employer that such written consent may not be
obtained because there is no Spouse or the Spouse cannot be located,
a waiver will be deemed a Qualified Election.
Any consent necessary under this provision (or the establishment that
the consent of the Spouse may not be obtained) will not be valid with
respect to any other 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. Additionally, 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. Any new waiver or change
of Beneficiary will require a new spousal consent. No consent
pursuant to the provisions herein shall be valid unless the
Participant has received notice pursuant to Section 6.4.
(d) "Earliest Retirement Age": The earliest date on which, under the
Plan, the Participant could elect to receive retirement benefits.
(e) "Qualified 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 one-half 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 balance.
(f) "Spouse (Surviving Spouse)": The spouse or surviving spouse of the
Participant, provided that a former spouse will 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.
Section 6.4 - Notice Requirements
(a) In the case of a Qualified Joint and Survivor Annuity as described
in Section 6.3 hereof, the Plan Administrator shall, no less than 30
days and no more than 90 days prior to the annuity starting date,
provide each Participant with a written explanation of (i) the terms
and conditions of a Qualified Joint and Survivor Annuity; (ii) the
Participant's right to make and the effect of an election to waive
the Qualified Joint and Survivor Annuity form of benefit; (iii) the
rights of a Participant's Spouse; and (iv) the right to make, and the
effect of, a revocation of a previous election to waive the Qualified
Joint and Survivor Annuity.
(b) In the case of a Qualified Pre-retirement Survivor Annuity as
described in Section 6.3 hereof, the Employer shall provide each
Participant within the Applicable Period for such Participant a
written explanation of the Qualified Pre-retirement Survivor Annuity
in such manner as would be comparable to the explanation provided for
meeting the requirements of Section 6.3 applicable to a Qualified
Joint and Survivor Annuity. The Applicable Period for a Participant
is whichever of the following periods in (1), (2)(a), (2)(b) or
(2)(c) below ends last:
(1) the period beginning with the first day of the Plan Year in
which the Participant attains age 32 and ending with the close
of the Plan Year preceding the Plan Year in which the
Participant attains age 35;
(2) the period beginning 1 year before and ending 1 year after (a)
the individual becomes a Participant; (b) the Qualified Pre-
retirement Survivor Annuity is no longer fully subsidized within
the meaning of the Code and regulations thereunder; or (c) this
ARTICLE VI first applies to such Participant.
Notwithstanding the foregoing, in the case of a Participant who separates
from service before attaining age 35, notice must be provided within the
period beginning 1 year before and ending 1 year after such separation.
If such Participant thereafter returns to employment with the Employer,
the Applicable Period shall be redetermined.
Section 6.5 - Special Rule for Profit Sharing Plans
This Article VI applies to (1) a profit sharing plan, and (2) to any
distribution, made on or after the first day of the first Plan Year
beginning after December 31, 1988, from or under a separate account
attributable solely to accumulated deductible employee contributions (as
defined in Code Section 72(o)(5)(B)), and maintained on behalf of a
Participant in a money purchase pension plan, if, in the case of (1) or
(2), the following two conditions are met: (i) the Participant cannot or
does not elect payments in the form of a life annuity, and (ii) on the
death of the Participant, the Participant's vested Account balance will
be paid to the Participant's Surviving Spouse, but if there is no
Surviving Spouse, or, if the Surviving Spouse has already consented in a
manner conforming to a Qualified Election, then to the Participant's
designated Beneficiary. However, this Section 6.5 shall not be operative
with respect to a Participant in a profit sharing plan if it is determined
that such plan is a direct or indirect transferee of a defined benefit
plan, money purchase pension plan (including a target benefit 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. In
addition, this Section shall not apply unless the Participant's Spouse is
the beneficiary of any insurance on the Participant's life purchased by
Employer contributions or forfeitures allocated to the Participant's
Account. If this Section is operative, then except to the extent
otherwise provided in Section 6.6 hereof, the other provisions of this
ARTICLE VI shall be inoperative.
Section 6.6 - Transitional Rules
(a) Any living Participant not receiving benefits on August 23, 1984, who
would otherwise not receive the benefits prescribed by this ARTICLE
VI must be given the opportunity to elect to have this ARTICLE VI
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 had at
least 10 years of vesting service when he or she separated from
service.
(b) 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 6.6(d).
(c) The respective opportunities to elect (as described in Section 6.6(a)
and (b) 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.
(d) Any Participant who has elected pursuant to Section 6.6(b) hereof and
any Participant who does not elect under Section 6.6(a) hereof or who
meets the requirements of Section 6.6(a) hereof except that such
Participant does not have at least 10 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:
(1) Automatic joint and survivor annuity. If benefits in the form
of a life annuity become payable to a married Participant who:
(i) begins to receive payments under the Plan on or after Normal
Retirement Age; or
(ii) dies on or after Normal Retirement Age while still working
for the Employer; or
(iii) begins to receive payments on or after the Qualified Early
Retirement Age; or
(iv) 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 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.
(2) 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 last of (i) the 90th day before the Participant
attains the Qualified Early Retirement Age, or (ii) the date on
which participation begins, and ends on the date the Participant
terminates employment.
(3) For purposes of this Section 6.6(d), Qualified Early Retirement
Age is the latest of:
(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.
Section 6.7 - Beneficiary
Subject to the Surviving Spouses's rights under this ARTICLE VI, each
Participant shall have the right, by written notice to the Employer, to
designate one or more Beneficiaries to receive any benefit to which such
Participant may be entitled in the event of his death prior to the
complete distribution of such benefit. Any such selection may be revoked
by a Participant at any time prior to his death by written notification
to the Employer of such revocation. If no such election is in effect on
a Participant's death, his Beneficiary shall be deemed to be his Surviving
Spouse or, if none, the Participant's estate.
Section 6.8 - Withdrawals
Any Participant may, upon thirty days written notice filed with the
Employer, have paid to him an amount equal to the then present value of
all or any portion of any nondeductible voluntary contributions that were
made by such Participant on behalf of himself pursuant to the Plan, less
prior withdrawals, but not including any earnings thereon. Such
withdrawal is subject to spousal consent if the rules described in this
ARTICLE VI apply.
Section 6.9 - Annuity Contracts
Annuity contracts must be non-transferable when distributed from the
Trust.
ARTICLE VII - TRUST ACCOUNT
Section 7.1 - Trust Agreement
All contributions except the portion, if any, allocated to premiums on
non-transferable policies pursuant to Section 4.2 under the Plan shall be
paid over to a Trust to be maintained by the Employer with the Trustee to
be held in accordance with the accompanying Trust Agreement, which is part
of this Plan.
ARTICLE VIII - AMENDMENT AND TERMINATION
Section 8.1 - Amendment by Employer and Sponsor
The Employer reserves the right to amend the Plan in whole or in part
(including retroactive amendments), and the Employer delegates to the
Sponsor the right to amend the terms and conditions of the Plan, and the
Employer will be deemed to have consented to such amendment. The Sponsor
shall, upon making any such amendment, mail a copy of such amendment to
each participating Employer.
Section 8.2 - Amendment by Employer
The Employer will not cease participation in this prototype plan if the
Employer amends the Plan (1) to change the choice of options in the
Adoption Agreement, (2) to add amending 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 (3) to add
certain model amendments published by the Internal Revenue Service which
specifically provide that their adoption will 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, will no longer participate in this
prototype plan and will be considered to have an individually designed
plan.
No amendment to the Plan shall be effective to the extent that it has the
effect of decreasing a Participant's Account balance. For purposes of
this Section 8.2, a Plan 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 will
be treated as reducing an accrued benefit. Furthermore, if the vesting
schedule of the Plan is amended, in the case of an Employee who is a
Participant as of the later of the date such amendment is adopted or the
date it becomes effective, the nonforfeitable percentage (determined as
of such date) of such Employee's right to his employer-derived accrued
benefit will not be less than his percentage computed under the Plan
without regard to such amendment. If the Plan's vesting schedule is
amended, or the Plan is amended in any way that directly or indirectly
affects the computation of a Participant's nonforfeitable percentage, each
Participant with at least 3 Years of Service (5 Years of Service for
Participants without 1 Hour of Service in any Plan Year beginning after
December 31, 1988) with the Employer may elect, within a reasonable period
after the adoption of the amendment or change, to have the nonforfeitable
percentage computed under the Plan 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:
(1) 60 days after the amendment is adopted;
(2) 60 days after the amendment becomes effective; or
(3) 60 days after the Participant is issued written notice of the
amendment by the Employer.
Section 8.3 - Termination
(a) An Employer may terminate his Plan at any time by delivering to the
Trustee and insurer, if any, a written notice of such termination.
(b) The Plan shall terminate (1) upon the death of the Employer, if he
is a sole proprietor, or otherwise upon the dissolution, merger,
consolidation or reorganization of the Employer, unless provision is
made by a successor to the Business for the continuation of the Plan,
and such continuation is approved by the Trustee, or (2) if the
Employer is judicially declared insolvent.
Section 8.4 - Action Upon Termination
Upon termination of the Plan by the Employer pursuant to Section 8.3
hereof, no further contributions shall be made and the Trustee shall
continue to administer the Trust and distribute benefits in accordance
with the instructions of the Employer and the provisions of the Plan.
Section 8.5 - Transfer of Assets
The Employer is authorized to direct the Trustee, upon 60 days written
notice, to transfer the assets to a successor trustee or custodian under
the Plan or any other plan which is qualified under Section 401(a) and
Section 401(d) of the Code and which provides substantially equivalent
benefits. Such a transfer may constitute an amendment of this Plan or the
adoption of a new Plan and the termination of this Plan, as the case may
be, but in either case, upon making such transfer the Trustee shall be
discharged from any and all liability hereunder, except with respect to
acts committed, or acts not taken, as the case may be, prior to such
transfer. The Trustee in making such transfer may withhold sufficient
assets to pay any of its accrued but unpaid fees.
Section 8.6 - Benefits Upon Merger, Consolidation or Transfer of Plan
Assets
In the event of any merger or consolidation with, or transfer of assets
to, any other plan, it shall be a condition of such merger, consolidation
with, or transfer of assets that each Participant hereunder would (if the
Plan were to terminate then) receive a benefit immediately after such
merger, consolidation, or transfer which is equal to or greater than the
benefit he would have been entitled to receive immediately before the
merger, consolidation, or transfer (if the Plan were to have terminated
then).
ARTICLE IX - NAMED FIDUCIARY AND ADMINISTRATOR
Section 9.1 - Administration
The Employer shall be responsible for the administration and operation of
the Plan in accordance with its terms and applicable laws and shall have
the sole authority to enforce the provisions of the Plan, except as
otherwise provided by Federal law. The Employer shall determine all
matters concerning the Plan, including but not limited to questions
arising out of the administration, interpretation and application of the
Plan, which determination shall be conclusive and binding on all persons.
Section 9.2 - Trustee Liability
The Employer shall indemnify and hold harmless the Trustee against all and
any liabilities which may be imposed on the Trustee, and the Employer
shall be responsible for the defense of any actions brought against the
Trustee except for acts of willful dishonesty or gross negligence, and
except as otherwise required by law.
Section 9.3 - Rights Against Trust Assets; Employment
Neither the establishment of the Plan and the Trust nor any modification
thereof, nor the creation of any fund or account, nor the payment of any
benefits, shall be construed as giving to any Participant or other person
any legal or equitable right against the assets of the Trust, the Trustee,
or the Employer, except as herein provided and as provided by Federal law;
and in no event shall the terms of employment of any Employee or
Participant be modified or in any way be affected hereby.
Section 9.4 - Named Fiduciary; Plan Administrator
(a) The Employer shall be the "Named Fiduciary" with respect to
administration, interpretation and application of the Plan. The
Employer shall also be the "Plan Administrator" with respect to the
Plan. The Plan Administrator shall be responsible for complying with
all reporting and disclosure requirements under the Code and ERISA.
(b) The Employer shall be the Named Fiduciary with respect to both
administration and investment of the Plan assets, and the Trustee
shall be subject to direction of the Employer as provided herein, and
is directed to follow the instructions of the Employer.
ARTICLE X - MISCELLANEOUS
Section 10.1 - Qualified Status
The Plan is established with the intent that it will be a qualified plan
under Section 401(a) of the Code. The Employer will notify the Trustee
in writing of any determination made with respect to the qualified status
or change in the qualified status of the Plan.
Section 10.2 - Alienation of Benefits
No benefit or interest available hereunder will be subject to assignment
or alienation, either voluntarily or involuntarily. The preceding
sentence 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.
Section 10.3 - Governing Law
This Plan shall be construed, administered and enforced according to the
laws of the State where the Employer maintains its principal place of
business, except where Federal law is pre-emptive.
Section 10.4 - Trustee Actions
The Trustee shall have the right to design forms to be used for direction
of investments, designation of Beneficiary, selection of retirement
benefits, and other notices to the Trustee. If such form has been
designed and made available to the Employer, the Trustee shall be under
no duty to act with instructions of the Employer unless provided on the
form prescribed.
Section 10.5 - Loss of Qualification
If a Plan of a participating Employer either fails to attain initial
qualified status or fails to retain its qualified status, such Plan shall
not participate in this prototype plan and shall be considered an
individually designed plan.
Section 10.6 - Contributions; Exclusive Benefit Contributions are
made conditioned upon the initial and continuing qualification of the Plan
under Section 401(a) of the Code and the deductibility of such
contributions under Section 404(a) of the Code. The assets of the Plan
will not be used for or diverted to any purpose whatsoever other than the
payment of the expenses of administering the Plan and the exclusive
benefit of the Participants and their Beneficiaries.
ARTICLE XI - LIMITATIONS ON ALLOCATIONS
Section 11.1 - Employers Who Do Not Maintain Other Qualified Plans
(a) If the Participant does not participate in, and has never
participated in, another qualified plan, 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 as defined in Section 11.5 hereof, the amount of Annual
Additions (as defined below) which may be credited to the
Participant's account for any Limitation Year (as defined below) will
not exceed the lesser of the Maximum Permissible Amount (as defined
below) or any other limitation contained in this Plan. 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 will be reduced so that
the Annual Additions for the Limitation Year will equal the Maximum
Permissible Amount.
(b) Prior to determining the Participant's actual Compensation (as
defined below) for the Limitation Year, the Employer may determine
the Maximum Permissible Amount for a Participant on the basis of a
reasonable estimation of the Participant's Compensation for the
Limitation Year uniformly determined for all Participants similarly
situated.
(c) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the Limitation
Year will be determined on the basis of the Participant's actual
Compensation for the Limitation Year.
(d) If pursuant to Section 11.1(c) hereof or the allocation of
forfeitures there is an Excess Amount (as defined below), the excess
will be disposed of as follows:
(i) Any nondeductible voluntary employee contributions, to the extent
they would reduce the Excess Amount, will be returned to the
Participant.
(ii) If after the application of paragraph (i) 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 will
be used to reduce Employer contributions for such Participant in the
next Limitation Year and each succeeding Limitation Year if
necessary.
(iii) If after the application of paragraphs (i) or (ii) an Excess
Amount still exists, and the Participant is not covered by the Plan
at the end of the Limitation Year, the Excess Amount will be held
unallocated in a suspense account. The suspense account will be
applied to reduce future Employer contributions for all remaining
Participants in the next Limitation Year, and each succeeding
Limitation Year if necessary.
(iv) If a suspense account is in existence at any time during a
Limitation Year pursuant to this Section, it will not participate in
the allocation of the Trust Account's investment gains and losses.
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 Participant.
Section 11.2 - Employers Who Maintain Other Qualified Master or Prototype
Defined Contribution Plans
(a) This Section applies if, in addition to this Plan, the Participant
is covered under another qualified Master or 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 as defined in Section 11.5 hereof, during any
Limitation Year. The Annual Additions which may be credited to a
Participant's account under this Plan for any such Limitation Year
will not exceed the Maximum Permissible Amount reduced by the Annual
Additions credited to a Participant's account under the other plans
and welfare benefit funds for the same Limitation Year. If the
Annual Additions with respect to the Participant under other defined
contribution Plans and welfare benefit funds maintained by the
Employer are less than the Maximum Permissible Amount and the
Employer contribution that would otherwise be contributed or
allocated to the Participant's account under this Plan would cause
the Annual Additions for the Limitation Year to exceed this
limitation, the amount contributed or allocated will be reduced so
that the Annual Additions under all such plans and funds for the
Limitation Year will 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.
(b) 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
11.1(b) hereof.
(c) As soon as is administratively feasible after the end of the
Limitation Year the Maximum Permissible Amount for the Limitation
Year will be determined on the basis of the Participant's actual
Compensation for the Limitation Year.
(d) If, pursuant to subsection 11.2(c) or as a result of the allocation
of forfeitures, 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 will 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.
(e) If an 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 (a) the Annual Additions allocated to the
Participant for the Limitation Year as of such date under this Plan
to (b) the total Annual Additions allocated to the Participant for
the Limitation Year as of such date under this and all other
qualified Master or Prototype defined contribution plans.
(f) Any Excess Amount attributed to this Plan will be disposed in the
manner described in subsection 11.1(d) hereof.
Section 11.3 - Employers Who Maintain Other Defined Contribution Plans
Which Are Not Master or Prototype Plans
If the Participant is covered under another qualified defined contribution
plan maintained by the Employer which is not a Master or Prototype plan,
Annual Additions which may be credited to the Participant's account under
this Plan for any Limitation Year will be limited in accordance with
subsections 11.2(a) through 11.2(f) as though the other plan was a Master
or Prototype plan unless the Employer provides other limitations in the
Profit Sharing Plan Adoption Agreement and/or the Money Purchase Pension
Plan Adoption Agreement.
Section 11.4 - Employers Who Maintain a Defined Benefit Plan
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 will be limited in accordance with the Profit Sharing Plan
Adoption Agreement and/or the Money Purchase Pension Plan Adoption
Agreement.
Section 11.5 Definitions
(a) Annual Additions: The sum of the following amounts credited to a
Participant's account for the Limitation Year:
(1) Employer contributions;
(2) Employee Contributions; and
(3) forfeitures.
For this purpose, any Excess Amount applied under subsections 11.1(d)
or 11.2(f) in the Limitation Year to reduce Employer contributions
will be considered Annual Additions for such Limitation Year.
Amounts 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, are treated
as Annual Additions to a defined contribution plan. Also, amounts
derived from contributions paid or accrued after December 31, 1985,
in taxable years ending after such date, which are attributable to
post-retirement medical benefits allocated to the separate account
of a Key Employee, as defined in Section 419A(d)(3) of the Code,
under a welfare benefit fund, as defined in Section 419(e) of the
Code, maintained by the Employer, are treated as Annual Additions to
a defined contribution plan.
(b) Compensation: A Participant's earned income, 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 with the
Employer maintaining the Plan to the extent that the amounts are
includable in gross income (including, but not limited to,
commissions paid to salesmen, compensation for services on the basis
of a percentage of profits, commissions on insurance premiums, tips,
bonuses, fringe benefits, reimbursements and expense allowances), and
excluding the following:
(1) Employer contributions to a plan of deferred compensation which
are not includable 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;
(2) Amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by the
Employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
(3) Amounts realized from the sale, exchange or other disposition
of stock acquired under a qualified stock option; and
(4) 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
described in Section 403(b) of the Code (whether or not the
amounts are actually excludable from the gross income of the
Employee).
For purposes of applying the limitations of this Article,
Compensation for a Limitation Year is the Compensation actually
paid or includable in gross income during such year.
Notwithstanding the preceding sentence, compensation for a
Participant in a defined contribution plan who is permanently
and totally disabled (as defined in section 105(d)(4) of the
Code) is the Compensation such Participant would have received
for the Limitation Year if the Participant was 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 (as defined in Section
414(q) of the Code), and contributions made on behalf of such
Participant are nonforfeitable when made.
(c) Defined Benefit Fraction: A fraction, the numerator of which
is the sum of the Participant's Projected Annual Benefits under
all the defined benefit plans (whether or not terminated)
maintained by the Employer, and the denominator of which is the
lesser of 125 percent of the dollar limitation determined for
the Limitation Year under Sections 415(b) and (d) of the Code
or 140 percent of the Highest Average Compensation, 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, was a Participant in one or more defined
benefit plans maintained by the Employer which were in existence
on May 6, 1986, the denominator of this fraction will not be
less than 125 percent of the sum of the annual benefits under
such plans which the Participant had accrued as of the close of
the last Limitation Year beginning before January 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.
(d) Defined Contribution Dollar Limitation: $30,000 or if greater,
one-fourth of the defined benefit dollar limitation set forth
in Section 415(b)(1) of the Code, as in effect for the
Limitation Year.
(e) Defined Contribution Fraction: A fraction, the numerator of
which is the sum of the Annual Additions to the Participant's
account under all the defined contribution plans (whether or not
terminated) maintained by the Employer for the current and all
prior Limitation Years (including the Annual Additions
attributable to the Participant's nondeductible Employee
contributions to this and all other defined benefit plans,
whether or not terminated, maintained by the Employer and the
annual additions attributable to all welfare benefit funds, as
defined in Section 419(e) of the Code, and individual medical
accounts, as defined in Section 415(l)(2) of the Code,
maintained by the Employer, and the denominator of which is the
sum of the Maximum Aggregate Amounts for the current and all
prior Limitation Years of service with the Employer (regardless
of whether a defined contribution plan was maintained by the
Employer). The Maximum Aggregate Amount in any Limitation Year
is the lesser of 125 percent of the dollar limitation determined
under Section 415(b) and (d) of the Code in effect under Section
415(c)(1)(A) of the Code or 35 percent of the Participant's
Compensation for such year.
If the Employee was a Participant as of the end of the first day
of the first Limitation Year beginning after December 31, 1986,
in one or more defined contribution plans maintained by the
Employer which were in existence on May 6, 1986, the numerator
of this fraction will be adjusted if the sum of this fraction
and the Defined Benefit Fraction would otherwise exceed 1.0
under the terms of this Plan. Under the adjustment, an amount
equal to the product of (1) the excess of the sum of the
fractions over 1.0 times (2) the denominator of this fraction,
will be permanently subtracted from the numerator of this
fraction.
The adjustment is calculated using the fractions as they would
be computed as of the end of the last Limitation Year beginning
before January 1, 1987, and disregarding any changes in the
terms and conditions of the Plan made after May 5, 1986, but
using the 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.
(f) Employer: For purposes of this ARTICLE, the Employer that
adopts this Plan, and all members of a controlled group of
corporations (as defined in Section 414(b) of the Code as
modified by Section 415(h)), all commonly controlled trades or
businesses (as defined in Section 414(c) as modified by Section
415(h)) or affiliated service groups (as defined in Section
414(m)) of which the adopting Employer is a part, and any other
entity required to be aggregated with the Employer pursuant to
regulations under Section 414(o) of the Code.
(g) Excess Amount: The excess of the Participant's Annual Additions
for the Limitation Year over the Maximum Permissible Amount.
(h) Limitation Year: A calendar year, or the 12-consecutive month
period elected by the Employer in a resolution attached to the
Adoption Agreement. All qualified plans maintained by the
Employer must use the same Limitation Year. If the Limitation
Year is amended to a different 12-consecutive-month period, the
new Limitation Year must begin on a date within the Limitation
Year in which the amendment is made.
(i) Master or Prototype Plan: A Plan the form of which is the
subject of a favorable opinion letter from the Internal Revenue
Service.
(j) Maximum Permissible Amount: The maximum Annual Addition that
may be contributed or allocated to a Participant's Account under
the Plan for any Limitation Year, which shall not exceed the
lesser of (a) the defined contribution dollar limitation, or (b)
25 percent of the Participant's Compensation for the Limitation
Year. The Compensation Limitation referred to in (b) shall not
apply to any contribution for medical benefits (within the
meaning of Sections 401(h) or 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 a short Limitation Year is created because of an amendment
changing the Limitation Year to a different 12-consecutive-month
period, the Maximum Permissible Amount will not exceed the
Defined Contribution Dollar Limitation multiplied by the
following fraction:
number of months in the short Limitation Year
---------------------------------------------
12
(j) Projected Annual Benefit: 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:
(1) the Participant will continue employment until Normal
Retirement Age under the Plan (or current age, if later),
and
(2) the Participant's Compensation for the current Limitation
Year and all other relevant factors used to determine
benefits under the Plan will remain constant for all
future Limitation Years.
- ------------------------------ -------------------------
(Employer's Signature) (Date)
AMENDMENT NO. 1
TO THE OPPENHEIMER-SPONSORED
RETIREMENT PLAN BASIC PLAN DOCUMENT (No. 01)
The Basic Plan Document (No. 01) is hereby amended by the word-
for-word adoption of the model language contained in Revenue Procedure
93-12, for distributions made on or after January 1, 1993, as follows:
Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a Distributee's election under this provision, 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.
Definitions
(a) 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
(10) years or more; any distribution to the extent such distribution is
required under Section 401(a)(9) of the Code; and the portion of any
distribution that is not includable in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to
employer securities).
(b) Eligible Retirement Plan. An Eligible Retirement Plan is an
individual retirement account described in Section 408(a) of the Code,
an individual retirement annuity described in Section 408(b) of the
Code, an annuity plan described in Section 403(a) of the Code, or a
qualified trust described in Section 401(a) of the Code, that accepts
the Distributee's Eligible Rollover Distribution. However, in the case
of an Eligible Rollover Distribution to the surviving spouse, an
Eligible Retirement Plan is an individual retirement account or
individual retirement annuity.
(c) Distributee. A Distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's surviving
spouse and the Employee's or former Employee's spouse or former spouse
who is the alternate payee under a qualified domestic relations order,
as defined in Section 414(p) of the Code, are Distributees with regard
to the interest of the spouse or former spouse.
(d) Direct Rollover. A Direct Rollover is a payment by the Plan
to the Eligible Retirement Plan specified by the Distributee.
SECOND
The Basic Plan Document (No. 01) is hereby amended by the word-
for-word adoption of the model language contained in Revenue Procedure
94-13 as follows:
In addition to other applicable limitations set forth in the plan,
and notwithstanding any other provision of the plan to the contrary,
for plan years beginning on or after January 1, 1994, the annual
compensation of each employee taken into account under the plan shall
not exceed the Omnibus Budget Reconciliation Act of 1993 ("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 consists of fewer than 12 months, the OBRA
'93 annual compensation limit will be multiplied by a fraction, the
numerator of which is the number of months in the determination period,
and the denominator of which is 12.
For plan years beginning on or after January 1, 1994, any
reference in this plan to the limitation under Section 401(a)(17) of
the Code shall mean the OBRA '93 annual compensation limit set forth in
this provision.
If compensation for any prior determination period is taken into
account in determining an employee's benefits accruing in the current
plan year, the compensation for that prior determination period is
subject to the OBRA '93 annual compensation limit in effect for that
prior determination period. For this purpose, for determination
periods beginning before the first day of the first plan year beginning
on or after January 1, 1994, the OBRA '93 annual compensation limit is
$150,000.
<PAGE>
DECLARATION OF TRUST
OppenheimerFunds Retirement Plan
Profit Sharing Plan - I.R.S. Serial No. D259770A
Pension Plan - I.R.S. Serial No. D259771A
The Employer has established a Retirement Plan (the "Plan") for the
benefit of the participants therein (the "Participants"). As part of
the Plan the Employer has requested The Bank of Boston (the "Trustee"),
to establish a Trust Account for the investment of contributions under
the Plan in shares or plans for the accumulation of shares of certain
Funds, upon the terms and conditions set forth in this Declaration of
Trust.
Section 1. Establishment of Trust and Participant's Accounts
The Trustee shall open and maintain a Trust Account and, as part
thereof, Participant's accounts for such individuals as the Employer
shall from time to time certify to it as Participants in the Plan. The
Participants as of the date of this Declaration of Trust are set forth
in the Retirement Plan Contribution Form.
Section 2. Receipt of Contributions
The Trustee shall accept and hold in the Trust Account such
contributions of money on behalf of the Employer and Participants as it
may receive from time to time from the Employer. All such
contributions shall be accompanied by written instructions from the
Employer specifying the Participant's Accounts to which they are to be
credited. Any reasonable number of accounts may be established for a
Participant provided that each such account meets the appropriate
investment minimums currently required under the prospectus of the
mutual fund in which the account is invested. If a contribution for a
participant is, by virtue of the contributions limits set forth in the
Plan, insufficient to meet a minimum amount of investment required by a
mutual fund prospectus, the contribution may nevertheless be invested,
at the direction of the Employer, in one of the mutual funds described
in Section 3 hereof. The selection of the number of accounts and of
the investment shall be made by the Employer, in one of the mutual
funds described in Section 3 hereof. The selection of the number of
accounts and of the investment shall be made by the Employer, but in
the event that all contributions are not to be invested in the same
manner the Employer shall act on instructions from the Participants.
Section 3. Investment of Account Assets
The amount of each contribution credited to a Participant's account,
except the portion, if any, allocated pursuant to Section 4.2 of the
Plan Document shall be applied to purchase full and fractional shares
of any Fund managed by Oppenheimer Management Corporation, or any
affiliate in any of the manners in which such shares are being publicly
offered. More than one account may be opened for a Participant.
All dividends and capital gains distributions received on the shares of
any Fund held in each Participant's Account shall (unless received in
additional shares of the Fund) be reinvested in such shares which shall
be credited to such account. If any distribution of the Fund may be
received at the election of the shareholder in additional shares or in
cash or other property, the Trustee shall elect to receive it in
additional shares.
Sales charges attributable to the acquisition of shares shall be
charged to the Account for which such shares are acquired.
The functions of the Trustee under this Trust are custodial only, and
the Trustee does not have investment discretion. Amounts received
without Employer direction as to the investment shall be held in cash
until the Employer sends written directions to the Trustee with respect
to such amounts.
Section 4. Distributions from the Trust Account
On receipt of a written request from the Employer certifying that a
Participant's benefit is payable to the Plan, the Trustee shall
distribute the shares in his account (together with any cash credited
to him) to the Participant or his designated beneficiary, provided,
however, that if any request for payment of a benefit so directs, the
Trustee shall pay the same by redeeming all shares credited to such
Participant's accounts (or such lesser number as the Employer may so
request), and distribute the redemption proceeds (together with any
cash credited to his account) to such Participant or his designated
beneficiary under the plan.
Section 5. Voting and Other Action
The Fund shall deliver, or cause to be delivered, to the Employer all
notices, prospectuses, financial statements, proxies and proxy
soliciting materials relating to such shares. The Trustee shall not
vote any of the shares of the Fund held hereunder except in accordance
with the written instructions of the Employer.
Section 6. Report of the Trustee and Employer
The Employer shall keep accurate and detailed records of all receipts,
investments, disbursements and other transactions. After receipt of an
investment the Trustee will transmit the amount of the investment to
the underwriter with a copy of the confirmation statement of the Fund
in order to enable the Employer to keep all proper accounts.
The Employer shall furnish to the Trustee, and the Trustee shall
furnish to the Employer such information relating to the Plan and Trust
Account as may be required under the Employee Retirement Income
Security Act of 1974 or the Internal Revenue Code and regulations
thereunder.
Section 7. Trustee's Fee and Expenses of the Account
Any income or other taxes of any kind whatsoever (other than penalty
taxes for excess contributions or premature distributions) that may be
levied or assessed upon or in respect to the Trust Account, any
transfer taxes, charges or fees incurred in connection with the
investment and reinvestment of the assets of the Trust Account,
administrative expenses incurred by the Trustee in the performance of
its duties including fees for legal services rendered to the Trustee,
and the compensation to the Trustee that may be agreed upon in writing
from time to time between the Trustee and the Employer, shall be paid
from the assets of the Accounts and shall, unless allocable to the
accounts of specific Participants, be charged proportionately to their
respective accounts.
Penalty taxes imposed by the Code for excess contributions or premature
distributions shall not be paid by the Trust, but by the person making
the excess contribution or receiving the premature distribution. To
the extent any such tax is nevertheless levied upon the Trust Account,
it shall be allocated to the account of the Participant who has made
the excess contribution or received the premature distribution.
Section 8. Concerning the Trustee
The Trustee shall not be responsible in any way for the collection of
contributions provided for under the Plan, the purpose or propriety of
any distribution made pursuant to Section 4 hereof, or for any other
action taken at the Employer's request. The Trustee shall not be
responsible for the administration of the Plan, its validity or effect
or for the qualification of the Plan or this Trust Agreement under the
provisions of the Internal Revenue Code. The Employer shall at all
times fully indemnify and save harmless the Trustee, its successors and
assigns, from any liability arising from distributions so made or
actions so taken and from any and all other liability whatsoever which
may arise in connection with this Agreement. The Trustee shall be
under no duty to take any action other than as herein specified with
respect to the Trust Account unless the Employer shall furnish the
Trustee with instructions in proper form to which instruction the
Trustee shall have specifically agreed in writing; or to defend or
engage in any suit with respect to the Trust Account unless the Trustee
shall have first agreed in writing to do so and shall have been fully
indemnified to its satisfaction The Trustee shall be protected in
acting upon any written order from the Employer or any other notice,
request, consent, certificate or other instrument or paper believed by
it to be genuine and to have been properly executed, so long as it acts
in good faith, in taking or omitting to take any action.
Section 9. Resignation or Removal of Trustee
The Trustee may resign at any time upon forty-five (45) days notice in
writing to the Employer, and may be removed by the Employer at any time
upon forty-five (45) days notice in writing to the Trustee. Upon such
resignation or removal, the Sponsor or the Employer shall appoint a
successor Trustee. Upon receipt by the Trustee of written acceptance
of such appointment by the successor Trustee, the Trustee shall
transfer and pay over to such successor the assets of the Trust Account
and all records pertaining thereto. The Trustee is authorized,
however, to reserve such sum of money as it may deem advisable for
payment of all its fees, compensation, costs and expenses, or for
payment of any other liability constituting a charge in or against the
assets of the Trust or on or against the Trustee, with any balance of
such reserve remaining after the payment of all such items to be paid
over to the successor Trustee. The successor Trustee shall hold the
assets paid over to it under terms similar to those of this Declaration
of Trust that qualify under Section 401 of the Internal Revenue Code.
If within thirty (30) days after its resignation or removal pursuant to
Section 9 hereof the Employer has not appointed a successor Trustee
which has accepted such appointment, the Trustee shall, unless it
elects to terminate the Trust Agreement pursuant to Section 10 hereof,
appoint such successor itself.
Section 10. Termination and Amendment of Account
The Trustee may elect to terminate the Trust Account if within thirty
(30) days after its resignation or removal pursuant to Section 9 hereof
the Employer has not appointed a successor Trustee which has accepted
such appointment. The Trustee may terminate the Account upon receiving
notice of the Employer's death, if the Employer of a sole proprietor,
or upon receiving notice of the termination of the partnership if the
Employer is a partnership unless in either case provision is made by a
successor to the business of the Employer for the continuation of the
Plan and this Agreement upon terms satisfactory to the Trustee.
Termination of the Trust Account shall be effected by distributing all
assets thereof to the Participants and their designated beneficiaries
pursuant to the terms of the Plan as if the Plan were terminated. Upon
the completion of such distribution, the Trustee shall be relieved from
all further liability with respect to all amounts so paid.
Amendments prepared by the sponsor shall be effective as to Employers
adopting the Plan after the date of the amendment upon consent by the
Trustee to the amendment, and shall become effective as to existing
Employers upon their consent, expressed or implied. Amendments
prepared by the sponsor which merely change the Trust to conform to
legal requirements shall be effective immediately with respect to all
adopting Employers, upon consent by the Trustee.
Section 11. Miscellaneous
At no time shall it be possible for any part of the assets of the Trust
Account to be used for or diverted to purposes other than for the
exclusive benefit of Participants and their beneficiaries.
Any notice from the Trustee to the Employer provided for in this
Agreement shall be effective if sent by first class mail to him at his
last address of record.
This Agreement shall be construed in accordance with the laws of the
State wherein the Trustee maintains its principal place of business.
This Agreement shall bind and inure to the benefit of the personal
representatives, successors and assigns of the Employer and the
Trustee.
Trustee:
The Bank of Boston
<PAGE>
Document No. 1
PROFIT-SHARING PLAN ADOPTION AGREEMENT
FOR A PROTOTYPE NON-STANDARDIZED DEFINED CONTRIBUTION PLAN
SPONSORED BY OPPENHEIMER FUNDS DISTRIBUTOR, INC.
Adoption Agreement #001
This is the Adoption Agreement for defined contribution plan #001 of
basic plan document #02, which is a combined prototype sharing/money
purchase pension plan. This Adoption Agreement may be adopted either
singly or in combination with defined contribution plan #002, a
prototype money purchase pension plan.
NOTE: Failure to properly fill out this Adoption Agreement may result
in disqualification of the Plan. Before executing this Adoption
Agreement, the Employer should consult with a tax advisor or attorney.
- -------------------------------------------------------------------
The Employer hereby establishes a Profit-Sharing Plan and a trust upon
the respective terms and conditions contained in the prototype defined
contribution plan (the "Plan") and the Trust Agreement annexed hereto
and appoints as Trustee of such trust the person(s) who have executed
this Adoption Agreement evidencing their acceptance of such
appointment. The Plan, the Trust Agreement, and the Custody Agreement,
if applicable, shall be supplemented and modified by the terms and
conditions contained in this Adoption Agreement and shall be effective
on the Effective Date.
The Sponsor will inform the Employer of any amendments to the Plan or
the discontinuance or abandonment of the Plan.
- -------------------------------------------------------------------
1. EMPLOYER DATA
A. ---------------------------------------------
Name of Employer
B. ---------------------------------------------
Address
( )
C. ---------------------------------------------
Telephone Number
D. ---------------------------------------------
Employer's Taxable Year End
E. ---------------------------------------------
Plan Year End
F. The Employer is:
( ) a corporate entity
( ) a non-corporate entity
( ) a corporation electing to be taxed under Subchapter S
G. ---------------------------------------------
Effective Date (Should be the first day of a Plan Year)
H. If this is an Amendment of an existing plan, complete the
following:
---------------------------------------------
Effective Date of Amendment (Should be the first day of a
Plan Year)
---------------------------------------------
Name of Prior Plan
---------------------------------------------
Effective Date of Prior Plan
---------------------------------------------
I. Limitation Year, if different from E. above.
II. ELIGIBILITY
A. Employees shall be eligible to participate in the Plan upon
completion of the eligibility requirements (Complete 1 and 2)
(Plan Section 3.1.):
1. Years of Service. The Employer must complete (check one
box)
( ) One Year of Service.
( ) [ ] Years of Service. (You can require less
than or more than one Year of Service, but not more
than two (2). If you select more than one Year of
Service, the Employee must be 100 percent vested
once he become eligible, and you must select
vesting schedule Number 2 in Section IX of this
Adoption Agreement. If the Year of Service is or
includes a fractional year, an Employee will not be
required to complete any specified number of Hours
of Service (Section III, A of this Adoption
Agreement) to receive credit for such fractional
year.
2. Age. The Employer has attained age [ ] (not greater
than age 21).
B. All Employees will be eligible to participate in the Plan
with the exception of the following (Plan Section 3.1):
( ) Union Employees. Employees included in a unit covered by a
collective bargaining agreement between the Employee and
Employer representatives (as defined in Section 3.1(b)(i) of
the Plan), if retirement benefits were the subject of good
faith bargaining and the requirements of Section 3.1(b)(i) of
the Plan are satisfied.
( ) Non-resident Aliens. Employees who are nonresident aliens and
who receive no earned income from the Employer which
constitutes income from sources within the United States.
For purposes of this Section II, the term "Employee" includes
all employees of this Employer or any employer aggregated
with this Employer under Sections 414(b),(c),(m), or (o) or
the Code and individuals who are Leased Employees required to
be considered Employees of such employer under Section 414(n)
or (o) of the Code.
III. CREDITED SERVICE
A. The plan provides that a Year of Service requires at least
1,000 hours during any Plan Year. If a lower number of hours
is desired, state the number here:
_ _ _ _ (Plan Section 2.49)
B. The Plan permits Hours of Service to be determined by the use
of service equivalencies under one of the methods selected
below (choose one method) (Plan Section 2.21):
1. ( ) On the basis of actual hours for which an Employee is
paid or entitled to payment.
2. ( ) On the basis of days worked. An Employee will be
credited with ten (10) Hours of Service if under Section 2.21 of
the Plan such Employee would be credited with at least one (1)
Hour of Service during the day.
3. ( ) On the basis of weeks worked. An Employee will
be credited with forty-five (45) Hours of Service if under Section
2.21 of the Plan such Employee would be credited with at least one
(1) Hour of Service during the week.
4. ( ) On the basis of semi-monthly payroll periods. An
Employee will be credited with ninety-five (95) Hours of Service
if under Section 2.21 of the Plan such Employee would be credited
with a least one (1) Hour of Service during the semi-monthly
payroll period.
-or-
5. ( ) On the basis of months worked. An Employee will
be credited with one hundred ninety (190) Hours of Service if
under Section 2.21 of the Plan such Employee would be credited
with at least one (1) Hours of Service during the month.
C. Service with predecessor employer (choose 1 or 2) (Plan
Sections 3.3 and 8.5):
1. ( ) No credit will be given for service with
predecessor employer.
2. ( ) Credit will be given for service with the following
predecessor employer(s):
---------------------------------------------
---------------------------------------------
Note: The Plan provides that if this is a continuation of a
predecessor plan, service under the predecessor plan must be
counted.
IV. COMPENSATION
A. For purposes of the Plan, Compensation means of all of each
Participant's (check one):
( ) Section 3401(a) Wages: Wages as defined in Code Section
3401(a) for purposes of income tax withholding at the
source, but determined without regard to any rules that
limit the remuneration included in wages that are based
on the nature and location of the employment or the
services performed.
( ) 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 with the Employer maintaining
the Plan to the extent that the amounts are includable
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,
reimbursements, and expense allowances), and excluding
the following:
(1) Employer contributions to a Plan deferred
compensation which are not includable 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;
(2) Amounts realized from the exercise of a non-
qualified stock option, or when restricted stock (or
property) held by the Employee either becomes freely
transferable or is no longer subject to a substantial
risk of forfeiture;
(3) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
(4) 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 described in Section 403(b) of the Code
(whether or not the amounts are actually excludable from
the gross income of the Employee).
For any self-employed individual Compensation will mean
earned income.
B. Effective [ ], Compensation:
( ) shall include
( ) shall not include
Employer Contributions made pursuant to a salary reduction
agreement which are not includable in the gross income of the
Employee under Sections 125, 402(a)(8), 402(h) or 403(b) of
the Code. (The effective date of the election in this
paragraph shall not be earlier than the first day of the
first Plan Year beginning after 1986.)
V. CONTRIBUTIONS
A. Profit Sharing Plan Formulas (Choose 1 or 2) (Plan Section
4.1(b))
1. ( ) Discretionary pursuant to Employer resolution. If
not resolution is adopted, then [ ]% of Participants'
Compensation.
-or-
2. ( ) [ ]% of Participants' Compensation, plus
discretionary amount, if any, by Employer resolution, not to
exceed current and accumulated Net Profits.
Note: Each of these formulas is subject to maximum
limitations on contributions as provided in the Plan and the
Internal Revenue Code. In no event may the Employer
contribution exceed 15% of the aggregate compensation of all
Participants for the year, plus up to 10% credit carryover in
certain circumstances. Additional limitations are included
in the Plan where the Employer also has another qualified
retirement plan. An Individual Participant's limit on
contributions and forfeitures, per year is generally the
lesser of 15% of compensation of $30,000.
B. Contribution Eligibility (Choose 1 or 2) Plan Section 4.1(c).
1. ( ) The Plan provides that a Participant will share in
Employer Contributions for the Plan Year only if he (i)
retires, dies, or becomes totally and permanently disabled,
or (ii) completes 501 Hours of Service and is employed on the
last day in such year. If a lesser number of hours is
desired, state the number here: [ ].
2. ( ) A Participant will share in Employer Contributions
for the Plan Year in which he terminates employment prior to
the end of such year if he completes 501 Hours of Service in
such year. If a lesser number of hours is desired, state the
number here: [ ].
C. Contributions may only be made from the Net Income of the
Employer for the Plan Year unless the Employer elects to
disregard Net Income below.
(Check the option below if you wish it to apply to your
plan.)
( ) Effective for Plan Years beginning on or after [ ]
(fill in the first day of the Plan Year in which this
Adoption Agreement is executed or a subsequent
anniversary of such date), not withstanding any other
provision of the Plan, the Employer Contributions shall
be made to the Plan without regard to current or
accumulated earnings and profits for the taxable year or
years ending with or within such Plan Year.
VI. ALLOCATION OF EMPLOYER CONTRIBUTIONS
A. Formula -- Choose 1 or 2
NOTE: If you provide for hardship withdrawals you must use
Formula 1.
1. ( ) Non-Integrated Plan -- Employer contributions shall be
allocated to the accounts of all eligible Participants
prorated upon compensation.
2. ( ) Integrated Plan -- Employer contributions and
forfeitures shall be integrated with Social Security and
allocated in accordance with the provisions of Plan Section
5.3(b)(i),(ii),(iii) and (iv).
(a) The Integration Level is:
( ) Taxable Wage Base
( ) [$ ] (a dollar amount less than Taxable Wage Base)
( ) [ % ] of the Taxable Wage Base (not to exceed 100%)
Note: If you maintain any other plan in addition to this
Plan, only one plan may be integrated with Social Security.
VII. DISTRIBUTIONS
A. Normal Retirement Age is (Choose 1 and/or 2) (Plan Section
2.27):
1. ( ) The date a Participant reach age [ ] (not more than
65 or less than 55). If no age is indicated, normal
retirement age shall be 65.
-or-
2. ( ) The late of age [ ] (not more than 65) or the [ ]
(not more than 5th) anniversary of the day the Participant
commenced participation in the Plan. The participation
commencement date is the first day of the first Plan Year in
which the Participant commenced participation in the Plan.
NOTE: If, for Plan Years beginning before January 1, 1988,
Normal Retirement Age was determined with reference to the
anniversary date (more than 5 but not to exceed 10 years),
the anniversary date for Participants who first commenced
participation under the Plan before the first Plan Year
beginning on or after January 1, 1988, shall be the earlier
of (A) the 10th anniversary of the date the Participant
commenced participation in the Plan (or such anniversary as
had been elected by the Employer, if less than 10), or (B)
the 5th anniversary of the first day of the first Plan Year
beginning on or after January 1, 1988.
B. Early Retirement (Choose 1 or 2) (Plan Section 9.1, 10.4)
1. ( ) Early Retirement Date is the first day of the month
coincident with or next following the date upon which a
Participant reaches age [ ] (not less than 55) and
completes [ ] years of service not more than 15).
-or-
2. ( ) Early Retirement will not be permitted under the
plan.
VIII. OPTIONAL FEATURES
A. Hardship Withdrawal (Choose 1 or 2)(Plan Section 12.2):
1. ( ) The Plan permits a hardship withdrawal
-or-
2. ( ) The Plan does not permit a hardship withdrawal.
Note: The Plan may not provide hardship withdrawals if
integration with Social Security is elected in Section
VI.
B. Loans (Choose 1 or 2)(Plan Article 13).
1. ( ) The Plan permits Loans to Participants.
-or-
2. ( ) The Plan does not permit loans to Participants.
Note: The Plan may not permit loans to Owner-Employees
of non-corporate entities or to Shareholder-Employees of
Subchapter S corporations. If Plan loans are permitted,
the Trustee designated in Section XV of this Adoption
Agreement may not be the Sponsor's designated Trustee.
C. Insurance (Choose 1 or 2)(Plan Article 14).
1. ( ) The Plan permits Participants to designate a
portion of their Account to purchase life insurance
contracts. (MUST NOT be selected if Sponsor's
designated Trustee is appointed as Trustee).
The percentage of the Employer Contributions which may
be applied to purchase life insurance contracts shall be
equal to [ ]%.
-or-
2. ( ) The Plan does not permit Participants to
designate a portion of their Account to purchase life
insurance contracts.
Note: Section 14.5 of the Plan provides certain limits
on the amount of Employer Contributions that can be
applied to purchase life insurance contracts.
IX. VESTING
A. Employer contributions will become vested if the Participant
terminates employment for any reasons other than retirement,
death, or disability pursuant to the following schedule
(Choose 1, 2, 3, or 4). (Plan Section 8.3):
1. ( )
Years of
Service Vested Percentage
1 year 0%
2 years 20%
3 years 40%
4 years 60%
5 years 80%
6 or more years 100%
-or-
2. ( ) 100 percent vesting immediately after satisfaction of
the eligibility requirements.
Note: If a service requirement greater than 1 year is chosen
for eligibility in Section II.A.1 of this Adoption Agreement,
vesting schedule Number 2 must be chosen.
3. ( ) 100 percent vesting after [ ] (not to exceed 3
Years of Service).
4. ( )
Years of Vested
Service Percentage
1 year [ ]%
2 years [ ]% (not less than 20)
3 years [ ]% (not less than 40)
4 years [ ]% (not less than 60)
5 years [ ]% (not less than 80)
6 years [ ]% (not less than 100)
X. INVESTMENT CHOICES
A. ( ) Investment of Trust assets may be selected only from
Shares or other investment offered by the Sponsor.
B. ( ) [ ]% (not less than 25%) of the Trust assets must be
invested in Shares or other investment offered by the
Sponsor with the remainder in such other investments as
may be acceptable within the discretion of the Trustee.
C. ( ) 50% of the Trust assets must be invested in Shares or
investments offered by the Sponsor with the remainder of
such other investments as may be acceptable within the
discretion of the Trustee.
D. ( ) 25% of the Trust assets must be invested in Shares or
investments offered by the Sponsor with the remainder of
such other investments as may be acceptable within the
discretion of the Trustee.
The Sponsor may impose additional limitations relating
to the type of permissible investments in the Trust
(Plan Section 7.3).
XI. INVESTMENT AUTHORITY
Contributions to the Plan shall be invested by the Trustee in
accordance with instructions of the Employer or Plan
Administrator except that (Choose A, B, or C)(Plan Section 7.2):
A. ( ) No Exceptions; the Employer or Plan Administrator shall
make all investment selections.
-or-
B. ( ) The Employer delegates all investment responsibility to
the Trustee. (MUST NOT be selected is Sponsor's
designated Trustee is appointed as Trustee).
-or-
C. ( ) Each Participant ( ) may, ( ) shall direct that
( ) (1) amounts voluntarily contributed by such
Participant pursuant to Section 4.3 of the
Plan, and rollover contributions and trustee
transfers pursuant to Section 4.4 of the Plan,
if any,
-and/or-
( ) (2) Employer Contributions on the Participant's
behalf, shall be invested in specified
investments offered by the Sponsor.
Participants may make or change such
directions by giving written notice to the
Plan Administrator. Reasonable restrictions
may be imposed on this privilege by the Plan
Administrator or the Sponsor for purposes of
administrative convenience.
XII. TOP-HEAVY PROVISIONS
A. Participant who are eligible to receive the minimum
allocation provided by Section 5.2 of the Plan shall receive
a minimum allocation of contributions and forfeitures under
this Plan equal to 3% of compensation, or if lesser, the
largest percentage of compensation allocated on behalf of any
Key Employee for the Plan Year.
Note: If the Participant also participates in the defined
contribution plan sponsored by Oppenheimer which is a money
purchase pension plan, the required minimum contribution must
be made under that money purchase pension plan.
B. For purposes of establishing Present Value (Plan Section
2.35) to compute the Top-Heavy Ratio (Plan Section 2.42), any
benefit under a defined benefit plan shall be discounted only
for mortality and interest based on the following (does not
need to be completed if Employer does not now and has never
maintained a defined benefit plan in addition to this Plan):
Interest rate [ ]%
Mortality Table [ ]
XIII.ALLOCATION LIMITATIONS
COMPLETE THIS SECTION ONLY IF YOU MAINTAIN OR EVER MAINTAINED
ANOTHER QUALIFIED PLAN IN WHICH ANY PARTICIPANT IN THIS PLAN
IS (OR WAS) A PARTICIPANT OR COULD BECOME A PARTICIPANT.
THIS SECTION MUST ALSO BE COMPLETED IF THE EMPLOYER MAINTAINS
A WELFARE BENEFIT FUND, AS DEFINED IN SECTION 419(e) OF THE
CODE, OR AN INDIVIDUAL MEDICAL ACCOUNT, AS DEFINED IN SECTION
415(1)(2) OF THE CODE, UNDER WHICH AMOUNTS ARE TREATED AS
ANNUAL ADDITIONS WITH RESPECT TO ANY PARTICIPANT IN THIS
PLAN. IF YOU MAINTAIN OTHER PLANS, FAILURE TO COMPLETE THIS
SECTION MAY ADVERSELY AFFECT THE QUALIFICATION OF THE PLANS
YOU MAINTAIN.
A. If the Participant is covered under another qualified defined
contribution plan maintained by the Employer, other than a
master or prototype plan (choose either 1 or 2) (Plan Section
6.3).
1. ( ) The provisions of Section 6.2 will apply as if the
other plan were a master or prototype plan.
-or-
2. ( ) (In the space below or on an attachment, provide the
method under which the plans will limit total annual
additions to the maximum permissible amount, and will
properly reduce any excess months, in a manner that precludes
Employer discretion.)
B. If the Participant is or has ever been a participant in a
defined benefit plan maintained by the Employer state below
or attach an explanation of the method under which the plan
involved will satisfy the 1.0 limitation in a manner that
precludes Employer discretion.
XIV. ADMINISTRATION
A. The Plan Administrator of the Plan will be (choose 1,2,3, or
4)(Plan Sections 2.33 and 15.4):
1. ( ) The Trustee
-or-
2. ( ) The Employer
NOTE: If the Trustee designated in Section XV of the
Adoption Agreement is the Sponsor's designated Trustee, it
may not be appointed as Plan Administrator.
-or-
3. ( ) An individual Plan Administrator designated by the
Employer:
Name
---------------------------------------------
Address
---------------------------------------------
4. ( ) A committee of two or more Employees designated by the
Employer:
Name
---------------------------------------------
Title
---------------------------------------------
Signature
---------------------------------------------
Name
---------------------------------------------
Title
---------------------------------------------
Signature
---------------------------------------------
Name
---------------------------------------------
Title
---------------------------------------------
Signature
---------------------------------------------
Note: If no Plan Administrator has been designated or is
serving at any time, the Employer will be deemed the Plan
Administrator. (Plan Section 15.4).
B. The Plan Administrator (including all members of a committee,
if a committee is named) is a Named Fiduciary for the Plan.
If other persons are also to be Named Fiduciaries, their
names and addresses are:
Name Address
---------------------------------------------
---------------------------------------------
---------------------------------------------
C. The Named Fiduciaries have all of the powers set forth in the
Plan. If any powers or duties are to be allocated among
them, or delegated to third parties, indicate below what the
powers or duties are and to whom they are to be delegated
(Plan Section 15.3):
--------------------------------------
--------------------------------------
--------------------------------------
XV. THE TRUSTEE
The Employer hereby appoints the following to serve as Trustee(s)
(Plan Section 2.46):
-------------------------
Name
------------------------- -------------------------
Date Address
------------------------- -------------------------
Witness Signature
-------------------------
Name
------------------------- -------------------------
Date Address
------------------------- -------------------------
Witness Signature
-------------------------
Name
------------------------- -------------------------
Date Address
------------------------- -------------------------
Witness Signature
XVI. SPONSOR DATA
A. Oppenheimer Funds Distributor, Inc.
-----------------------------------
Name of Sponsor
B. 2 World Trade Center, 34th Floor
New York, New York 10048-0023
-----------------------------------
Address
C. 212-323-0200
-----------------------------------
Telphone Number
XVII. EMPLOYER SIGNATURE
The Employer acknowledges receipt of the current prospectus
of the investment companies designated by the Employer for
its initial investments under the Plan and represents that it
has delivered a copy thereof to each Participant in the Plan,
and that it will deliver to each Participant making
contributions and each new Participant, a copy of the then
current prospectuses of such investment companies. The
Employer further represents that the information in this
Adoption Agreement shall become effective only when approved
and countersigned by the Trustee. The right to reject this
Adoption Agreement for any reason is reserved. This Adoption
Agreement must be used only in conjunction with basic plan
document #02. The undersigned Employer, or duly authorized
officer or employee, hereby certifies that the taxpayer
identification number set forth below is the Employer's
correct taxpayer identification number.
Note: If the Employer who adopts this Plan wishes to obtain
reliance that the Plan is qualified under Section 401 of the
Internal Revenue Code, application for a determination letter
should be made to the appropriate Key District Director of
Internal Revenue.
---------------------------------------------
Date Employer
---------------------------------------------
(Corporate Seal) Employer Tax I.D. No.
---------------------------------------------
By: Name Title
---------------------------------------------
Signature
---------------------------------------------
Attest Signature
<PAGE>
INVESTMENT DEALER INFORMATION
(to be completed by dealer.)
- -------------------- ------------------------------------------
Dealers Name Rep.'s Last Name First Name Middle Initial
- -------------------- ------------------------------------------
Dealer Head Office Rep.s' Brand Office Address: No. and Street
Address: No. and Street
- --------------------- ------------------------------------------
City State Zip Code City State Zip Code
- -------------------- ------------------------------------------
Oppenheimer Dealer No. Reps. Office Telephone # Rep's A.E. No.
<PAGE>
Document No. 2
MONEY PURCHASE PENSION PLAN
ADOPTION AGREEMENT
FOR A PROTOTYPE NON-STANDARDIZED DEFINED CONTRIBUTION PLAN
SPONSORED BY OPPENHEIMER FUNDS DISTRIBUTOR, INC.
Adoption Agreement #002
This is the Adoption Agreement for defined contribution plan #002 of
basic plan document #02, which is a combined prototype profit
sharing/money purchase pension plan. This Adoption Agreement may be
adopted either singly or in combination with defined contribution plan
#001, prototype profit sharing plan.
NOTE: Failure to properly fill out this Adoption Agreement may
result in disqualification of the Plan. Before executing
this Adoption Agreement, the Employer should consult with a
tax advisor or attorney.
- ------------------------------------------------------------
The Employer hereby establishes a Money Purchase Pension Plan and a
trust upon the respective terms and conditions contained in the
prototype defined contribution plan (the "Plan") and the Trust
Agreement annexed hereto and appoints as Trustee of such trust the
person(s) who have executed this Adoption Agreement evidencing their
acceptance of such appoint. The Plan, the Trust Agreement, and the
Custody Agreement if applicable, shall be supplemented and modified by
the terms and conditions contained in this Adoption Agreement and shall
be effective on the Effective Date.
The Sponsor will inform the Employer of any amendments to the Plan or
the discontinuance or abandonment of the Plan.
I. EMPLOYER DATA
A. ---------------------------------------------
Name of Employer
B. ---------------------------------------------
Address
C. ---------------------------------------------
Telephone Number
D. ---------------------------------------------
Employer's Taxable Year End
E. ---------------------------------------------
Plan Year End
F. The Employer is:
( ) a corporate entity
( ) a non-corporate entity
( ) a corporation electing to be taxed under Subchapter S
G. -------------------------------------------------------
Effective Date (Should be the first day of a Plan Year)
H. If this is an Amendment of an existing plan, complete the
following:
-------------------------------------------------------
Effective Date of Amendment
(Should be first day of Plan Year)
-------------------------------------------------------
Name of Prior Plan
-------------------------------------------------------
Effective Date of Prior Plan
I. -------------------------------------------------------
Limitation Year, if different from E. above.
II. ELIGIBILITY
A. Employees shall be eligible to participate in the Plan upon
completion of the eligibility requirements (Complete 1 and
2)(Plan Section 3.1):
Years of Service. The Employer must complete (check one box)
( ) One Year of Service.
( ) [ ] Years of Service. (You can require less than or
more than one Year of Service, but not more than two
(2). If you select more than one Year of Service, the
Employee must be 100 percent vested once he becomes
eligible, and you must select vesting schedule Number 2
in Section VIII of this Adoption Agreement. If the Year
of Service is or includes a fractional year, an Employee
will not be required to complete any specified number of
Hours of Service (Section III, A of this Adoption
Agreement) to received credit for such fractional year.
B. Age. The Employee has attained age [ ] (not greater than age
21). All Employees will be eligible to participate in the
Plan with the exception of the following (Plan Section 3.1):
( ) Union Employees. Employees included in a unit covered by
a collective bargaining agreement between the Employer
and Employee representatives (as defined in Section
3.1(b)(i) of the Plan), if retirement benefits were the
subject of good faith bargaining and the requirements of
Section 3.1(b)(i) of the Plan are satisfied.
( ) Non-resident Aliens. Employees who are non-resident
aliens and who receive no earned income from the
Employer which constitutes income from sources within
the United States.
For purposes of this Section II, the term "Employee" includes
all employees of this Employer or any employer aggregated
with this Employer under Sections 414(b), (c), (m), or (o) of
the Code and individuals who are Leased Employees required to
be considered Employees of any such employer under Section
414(n) or (o) of the Code.
III. CREDITED SERVICE
A. The Plan provides that a Year of Service requires at least
1,000 hours during any Plan Year. If a lower number of hours
is desired, state the number here:
[ ] (Plan Section 2.49)
B. The Plan permits Hours of Service to be determined by the use
of service equivalencies under one of the methods selected
below (choose one method) (Plan Section 2.21):
1. ( ) On the basis of actual hours for which an Employee
is paid or entitled to payment.
2. ( ) On the basis of days worked. An Employee will be
credited with ten (10) Hours of Service if under
Section 2.21 of the Plan such Employee would be
credited with at least one (1) Hour of Service
during the day.
3. ( ) On the basis of weeks worked. An Employee will be
credited with forty-five (45) Hours of Service if
under Section 2.21 of the Plan such Employee would
be credited with a least one (1) Hour of Service
during the week.
4. ( ) On the basis of semi-monthly payroll periods. An
Employee will be credited with ninety-five (95)
Hours of Service if under Section 2.21 of the Plan
such Employee would be credited with a least one
(1) Hour of Service during the semi-monthly payroll
period.
- or-
5. ( ) On the basis of months worked. An Employee will be
credited with one hundred ninety (190) Hours of
Service if under Section 2.21 of the Plan such
Employee would be credited with at least one (1)
Hour of Service during the month.
C. Service with predecessor employer (choose 1 or 2) (Plan
Sections 3.3 and 8.5):
1. ( ) No credit will be given for service with
predecessor employer.
2. ( ) Credit will be given for service with the following
predecessor employer(s):
------------------------------
------------------------------
Note: The Plan provides that if this is a continuation of
a predecessor plan, service under the predecessor
plan must be counted.
IV. COMPENSATION
A. For purposes of the Plan, Compensation means all of each
Participant's (check one):
( ) Section 3401(a) Wages: Wages as defined in Code Section
3401(a) for purposes of income tax withholding at the
source, but determined without regard to any rules that
limit the remuneration included in wages that are based
on the nature and location of the employment or the
services performed.
( ) 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 with the Employer maintaining
the Plan to the extent that the amounts are includable
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,
reimbursements, and expense allowances), and excluding
the following:
(1) Employer contributions to a Plan of deferred
compensation which are not includable 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 Employer, or any distributions from a
Plan of deferred compensation;
(2) Amounts realized from the exercise of a non-
qualified stock option, or when restricted stock (or
property) held by the Employee either becomes freely
transferable or is no longer subject to a substantial
risk of forfeiture;
(3) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
(4) 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 described in Section 403(b) of the Code
(whether or not the amounts are actually excludable form
the gross income of the Employee).
For any self-employed individual, compensation will mean
earned income.
B. Effective [ ], Compensation:
( ) shall include
( ) shall not include
Employer Contributions made pursuant to a salary reduction
agreement which are not includable in the gross income of the
Employee under Sections 125, 402(a)(8), 402(h) or 403(b) of
the Code. (The effective date of the election in this
paragraph shall not be earlier than the first day of the
first Plan Year beginning after 1986.)
V. CONTRIBUTIONS
A. Formulas (Choose 1 or 2)(Plan Section 4.1(a))
1. ( ) Plan not integrated with Social Security.
The Employer will contribute [ ]% of compensation for
each Participant (not to exceed 25%).
2. ( ) Plan integrated with Social Security (complete (a)
and (b))
(a) The Employer shall contribute [ ]% (the "Base
Contribution Percentage") of the Compensation of each
Participant up to the Integration Level, but not less
than 3%, and
(b) [ ]%, which shall be not less than 3% and shall not
exceed the Base Contribution Percentage by more than the
lesser of (1) the Base Contribution Percentage, or money
purchase maximum disparity rate, of such Participant's
Compensation in excess of the integration Level,
provided, that the contribution on behalf of each
Participant shall not exceed the lesser of $30,000 or
25% of the Participant's Compensation for the Plan Year.
B. The Integration Level is equal to:
( ) Taxable Wage base
( ) $[ ] (a dollar amount less than the Taxable Wage
Base)
( ) [ ]% of Taxable Wage Base (not to exceed 100%).
C. The money purchase maximum disparity rate is equal to the
lesser of:
1. 5.7%
2. The applicable percentage determined in accordance with
the following table:
If the integration level:
the applicable
is more than but not more than percentage is:
$0 X* 5.7%
X* 0f TWB 80% of TWB 4.3%
80% of TWB Y** 5.4%
*X = the greater of $10,000 or 20 percent of TWB
**Y = any amount more than 80% of the TWB but less than
100% of the TWB
TWB = Taxable Wage Base
If the integration level used is equal to the Taxable Wage
Base, the applicable percentage is 5.7%.
If you maintain any other plan in addition to this Plan, only
one plan may be integrated with Social Security.
C. Contribution Eligibility (Choose 1 or 2)(Plan Section
4.1(c)).
1. ( ) The plan provides that a Participant will share in
Employer Contributions for the Plan Year only is he
(i) retires, dies, or becomes totally and
permanently disabled, or (ii) completes 501 Hours
of Service and is employed on the last day in such
year. If a lesser number of hours is desired,
state the number here:[ ]
-or-
2. ( ) A Participant will share in Employer Contributions
for the Plan Year in which he terminates employment
prior to the end of such year if he completes 501
Hours of Service in such year. If a lesser number
of hours is desired, state the number here:
[ ].
VI. DISTRIBUTIONS
A. Normal Retirement Age is (choose 1 and/or 2)(Plan Section
2.27):
1. ( ) The date a Participant reaches age [ ] (Not more
than 65 or less than 55). If no age is indicated,
normal retirement age shall be 65.
-or-
2. ( ) The later of age [ ] (not more than 65) or the [
](not more than 5th) anniversary of the day the
Participant commenced participation in the Plan.
The participation commencement date is the first
day of the first plan year in which the Participant
commenced participation in the Plan.
NOTE: If, for Plan Years beginning before January
1, 1988, Normal Retirement Age was determined with
reference to the anniversary date (more than 5 but
not to exceed 10 years), the anniversary date for
Participants who first commenced participation
under the Plan before the first Plan Year beginning
on or after January 1, 1988, shall be the earlier
of (A) the 10th anniversary of the date the
Participant commenced participation in the Plan (or
such anniversary as had been elected by the
Employer, if less than 10), or (B) the 5th
anniversary of the first day of the first Plan Year
beginning on or after January 1, 1988.
B. Early Retirement (choose 1 or 2)(Plan Section 9.1, 10.4)
1. ( ) Early Retirement Date is the first day of the month
coincident with or next following the date upon
which a Participant reaches age [ ] (not less than
55) and completes [ ] years of service (not more
than 15).
-or-
2. ( ) Early Retirement will not be permitted under the
plan.
VII. OPTIONAL FEATURES
A. Loans (Choose 1 or 2)(Plan Article 13).
1. ( ) The Plan permits loans to Participants.
-or-
2. ( ) The Plan does not permit loans to Participants.
Note: The Plan may not permit loans to Owner-Employees of
non-corporate entities or to Shareholder-Employees
of Subchapter S corporations. If Plan loans are
permitted, the Trustee designated in Section XIV of
this Adoption Agreement may not be the Sponsor's
designated Trustee.
B. Insurance (Choose 1 or 2)(Plan Article 14).
1. ( ) The Plan permits Participants to designate a
portion of their Account to purchase life insurance
contracts. (MUST NOT be selected if Sponsor's
designated Trustee is appointed as Trustee).
The percentage of the Employer Contributions which may be
applied to purchase life insurance contracts shall be equal
to [ %].
2. ( ) The Plan does not permit Participants to designate
a portion of their Account to purchase life
insurance contracts.
Note: Section 14.5 of the Plan provides certain limits on
the amount of Employer Contributions that can be
applied to purchase life insurance contracts.
C. Annuities (Plan Section 11.9(a)(iv), Article 9).
The Plan permits benefits to be distributed in the form of a
non-transferable annuity contract. In addition, if a
Participant is married, the Plan must provide a qualified
joint and survivor annuity and a pre-retirement survivor
annuity. Under any of these options, the survivor annuity
will be [ ]% (not less than 50 nor greater than 100) of the
amount of the annuity payable during the joint lives of the
Participant and the spouse. If no amount is designated, the
survivor annuity will be 50%.
VII. VESTING
A. Employer contributions will become vested if the Participant
terminates employment for any reasons other than retirement,
death, or disability pursuant to the following schedule
(Choose 1, 2, 3 or 4)(Plan Section 8.3):
1. ( )
Years of Vested
Service Percentage
1 year 0%
2 years 20%
3 years 40%
4 years 60%
5 years 80%
6 or more years 100%
-or-
2. ( ) 100 percent vesting immediately after satisfaction
of the eligibility requirements.
Note: If a service requirement greater than 1 year is
chosen for eligibility in Section II.A.1 of this
Adoption Agreement, vesting schedule Number 2 must
be chosen.
3. ( ) 100 percent vesting after [ ] (not to exceed 3)
Years of Service.
4. ( )
Years of Vested
Service Percentage
1 year [ ]%
2 years [ ]% (not less than 20)
3 years [ ]% (not less than 40)
4 years [ ]% (not less than 60)
5 years [ ]% (not less than 80)
6 years [ ]% (not less than 100)
Note: If vesting schedule Number 3 is chosen, the
vesting percentages inserted must be at least
as rapid as one of the above vesting schedule
at all points in time.
IX. INVESTMENT CHOICES
A. ( ) Investment of Trust assets may be selected only from
Shares or other investment offered by the Sponsor.
B. ( ) [ ]% (not less than 25%) of the Trust assets must be
invested in Shares or other investments offered by the
Sponsor with the remainder in such other investments as
may be acceptable within the discretion of the Trustee.
C. ( ) 50% of the Trust assets must be invested in Shares or
investments offered by the Sponsor with the remainder in
such other investments as may be acceptable within the
discretion of the Trustee.
D. ( ) 25% of the Trust assets must be invested in Shares or
investments offered by the Sponsor with the remainder of
such other investments as may be acceptable within the
discretion of the Trustee.
The Sponsor may impose additional limitations relating
to the type of permissible investments in the Trust
(Plan section 7.3).
X. INVESTMENT AUTHORITY
Contributions to the Plan shall be invested by the Trustee in
accordance with instructions of the Employer or Plan Administrator
except that (Choose A, B, or C)(Plan Section 7.2):
A. ( ) No exceptions; the Employer or Plan Administrator shall
make all investment selections.
-or-
B. ( ) The Employer delegates all investment responsibility to
the Trustee. (MUST NOT be selected if Sponsor's
designated trustee is appointed as Trustee).
C. ( ) Each Participant ( ) may, ( ) shall direct that
( ) (1) amounts voluntarily contributed by such Participant
pursuant to Section 4.3 of the Plan, and rollover
contributions and trustee transfers pursuant to Section 4.4
of the Plan, if any,
-and/or-
( ) (2) Employer Contributions on the Participant's behalf,
shall be invested in specified investments offered by the
Sponsor. Participants may make or change such directions by
giving written notice to the Plan Administrator. Reasonable
restrictions may be imposed on this privilege by the plan
Administrator of the Sponsor for purposes of administrative
convenience.
XI. TOP-HEAVY PROVISIONS
A. Participants who are eligible to receive the minimum
allocation provided by Section 5.2 of the Plan shall receive
a minimum allocation of contributions and forfeitures under
this Plan equal to 3% of compensation, or if lesser, the
largest percentage of compensation allocated on behalf of any
Key Employee for the Plan Year.
Note: If the Participant also participates in the defined
contribution plan sponsored by Oppenheimer which is a
profit sharing plan, the required minimum contribution
must be made under this Plan.
B. For purposes of establishing Present Value (Plan Section
2.35) to compute the Top-Heavy Ratio (Plan Section 2.42), any
benefit under a defined benefit plan shall be discounted only
for mortality and interest based on the following (does not
need to be completed if Employer does not now and has never
maintained a defined benefit plan in addition to this Plan):
Interest rate [ ]%
Mortality Table [ ]
XII. ALLOCATION LIMITATIONS
COMPLETE THIS SECTION ONLY IF YOU MAINTAIN OR EVER MAINTAINED
ANOTHER QUALIFIED PLAN IN WHICH ANY PARTICIPANT IN THIS PLAN
IS (OR WAS) A PARTICIPANT OR COULD BECOME A PARTICIPANT.
THIS SECTION MUST ALSO BE COMPLETED IF THE EMPLOYER MAINTAINS
A WELFARE BENEFIT FUND, AS DEFINED IN SECTION 419(e) OF THE
CODE, OR AN INDIVIDUAL MEDICAL ACCOUNT, AS DEFINED IN SECTION
415(l)(2) OF THE CODE, UNDER WHICH AMOUNTS ARE TREATED AS
ANNUAL ADDITIONS WITH RESPECT TO ANY PARTICIPANT IN THIS
PLAN. IF YOU MAINTAIN OTHER PLANS, FAILURE TO COMPLETE THIS
SECTION MAY ADVERSELY AFFECT THE QUALIFICATION OF THE PLANS
YOU MAINTAIN.
A. If the Participant is covered under another qualified defined
contribution plan maintained by the Employer, other than a
master or prototype plan (choose either 1 or 2)(Plan Section
6.3):
1. ( ) The provisions of Section 6.2 will apply as if the
other plan were a master or prototype plan.
-or-
2. ( ) (In the space below or on an attachment, provide
the method under which the plans will limit total
annual additions to the maximum permissible amount,
and will properly reduce an excess amounts in a
manner that precludes Employer discretion.)
B. If the participant is or has ever been a participant in a
defined benefit plan maintained by the Employer, state below
or attach an explanation of the method under which the plan
involved will satisfy the 1.0 limitation in a manner that
precludes Employer discretion.
C. For allocation purposes, a Limitation Year shall be the 12
calendar month period ending on [ ]; if no year is chosen
the Limitation Year shall be the Plan Year.
XIII.ADMINISTRATION
A. The Plan Administrator of the Plan will be (choose 1, 2, 3 or
4)(Plan Sections 2.33 and 15.4):
1. ( ) The Trustee
-or-
2. ( ) The Employer
NOTE: If the Trustee designated in Section XIV of the Adoption
Agreement is the Sponsor's designated Trustee, it may not be
appointed as Plan Administrator.
-or-
3. ( ) An individual Plan Administrator designated by the
Employer:
Name---------------------------------------------
--------------------------------------------------
Address-------------------------------------------
--------------------------------------------------
-or-
4. ( ) A committee or two or more Employees designated by the
Employer:
Name
--------------------------------------------------
Title
--------------------------------------------------
Signature
--------------------------------------------------
Name
--------------------------------------------------
Title
--------------------------------------------------
Signature
--------------------------------------------------
Name
--------------------------------------------------
Title
--------------------------------------------------
Signature
--------------------------------------------------
Note: If no Plan Administrator has been designated or is
serving at any time, the Employer will be deemed the
Plan Administrator. (Plan Section 15.4).
B. The Plan Administrator (including all members of a committee,
if a committee is named) is a Named Fiduciary for the Plan.
If other persons are also to be Named Fiduciaries, their
names and addresses are:
Name
----------------------------------------
Address
----------------------------------------
Name
----------------------------------------
Address
----------------------------------------
Name
----------------------------------------
Address
----------------------------------------
C. The named Fiduciaries have all of the powers set forth in the
Plan. If any powers or duties are to be allocated among
them, or delegated to third parties, indicate below what the
powers or duties are and to whom they are to be delegated
(Plan Section 15.3):
----------------------------------------
----------------------------------------
XIV. THE TRUSTEE
A. The Employer hereby appoints the following to serve as
Trustee(s)(Plan Section 2.46):
-----------------------------
Name
- ----------------------------- -----------------------------
Date Address
- ----------------------------- -----------------------------
Witness Signature
-----------------------------
Name
- ----------------------------- -----------------------------
Date Address
- ----------------------------- -----------------------------
Witness Signature
XV. SPONSOR DATA
A. Oppenheimer Funds Distributor, Inc.
-----------------------------------
Name of Sponsor
B. 2 World Trade Center, 34th Floor
New York, New York 10048-0023
-----------------------------------
Address
C. 212-323-0200
-----------------------------------
Telephone Number
XVI. EMPLOYER SIGNATURE
The Employer acknowledges receipt of the current prospectus of the
investment companies designated by the Employer for its initial
investments under the Plan and represents that it has delivered a
copy thereof to each Participant in the plan, and that it will
deliver to each Participant making contributions and each new
Participant, a copy of the then current prospectuses of such
investment companies. The Employer further represents that the
information in this Adoption Agreement shall become effective only
when approved and countersigned by the Trustee. The right to
reject this Adoption Agreement for any reason is reserved. This
Adoption Agreement must be used only in conjunction with basic
plan document #02. The undersigned Employer, or duly authorized
officer or employee, hereby certifies that the taxpayer
identification number set forth below is the Employer's correct
taxpayer identification number.
Note: If the Employer who adopts this Plan wishes to obtain
reliance that the plan is qualified under Section 401 of the
internal Revenue Code, application for a determination letter
should be made to the appropriate Key District Director of
Internal Revenue.
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Date Employer
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(Corporate Seal) Employer Tax I.D. No.
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By: Name Title
---------------------------------------------
Signature
---------------------------------------------
Attest Signature
INVESTMENT DEALER INFORMATION
(to be completed by Dealer.)
- ------------------------------ ------------------------------
Dealers Name Rep's Last Name First Name M.I.
- ------------------------------ ------------------------------Dealer
Head Office Add.No&Street Rep's Branch Off.Add.No &Street
- ------------------------------ ------------------------------
City State Zip Code City State Zip Code
- ------------------------------ ------------------------------
Oppenheimer Dealer No. Rep's Off.Tel.No. Rep's AE No.
<PAGE>
BASIC PLAN DOCUMENT (No. 02)
(Non-Standardized)
ARTICLE 1
GENERAL
1.1 Purpose. The Employer hereby establishes this Plan to provide
retirement, death and disability benefits for eligible employees and their
beneficiaries. This Plan is a nonstandardized prototype defined
contribution plan and is designed to permit adoption of profit-sharing
provisions, money purchase pension provisions, or both. The provisions
herein and the selections made by the Employer by execution of the money
purchase pension or profit-sharing Adoption Agreement or Agreements, shall
constitute the Plan. It is intended that the Plan and Trust qualify
under, and meet the applicable requirements of, Sections 401 and 501 of
the Internal Revenue Code of 1986, as amended, as well as the provisions
of the Employee Retirement Income Security Act of 1974, as amended.
1.2 Trust. The Employer has simultaneously adopted a Trust to
receive, invest, and distribute funds in accordance with the Plan.
ARTICLE 2
DEFINITIONS
2.1 Account. The aggregate of the individual bookkeeping
subaccounts established for each Participant, as provided in Section 5.1.
2.2 Adoption Agreement. The written agreement or agreements of the
Employer and the Trustee by which the Employer establishes this Plan and
adopts the Trust Agreement forming a part hereof, as the same may be
amended from time to time. The Adoption Agreement contains all the
options that may be selected by the Employer. The information set forth
in the Adoption Agreement executed by the Employer shall be deemed to be
a part of this Plan as if set forth in full herein.
2.3 Affiliated Employers. The Employer and any corporation which
is a member of a controlled group of corporations (as defined in Section
414(b) of the Code) which includes the Employer, any trade or business
(whether or not incorporated) which is under common control (as defined
in Section 414(c) of the Code) with the Employer, any service organization
(whether or not incorporated) which is a member of an affiliated service
group (as defined in Section 414(m) of the Code) which includes the
Employer or any other employer required to be aggregated with such
Employer under Section 414(m) or 414(o) of the Code.
2.4 Beneficiary. The person or persons (natural or otherwise)
designated by a Participant in accordance with Section 11.6 to receive any
undistributed amounts credited to the Participant's Account under the Plan
at the time of the Participant's death.
2.5 Break in Service. An Eligibility Computation Period or Vesting
Computation Period in which an Employee fails to complete more than 500
Hours of Service with the Affiliated Employers.
2.6 Code. The Internal Revenue Code of 1986, as amended from time
to time, or any successor statute.
2.7 Compensation. Compensation shall be as elected by the Employer
in the Adoption Agreement. In the case of a Self-Employed Individual,
Compensation includes the Individual's Earned Income from Affiliated
Employers. For Plan Years beginning after December 31, 1988, annual
Compensation taken into account under the Plan for any Plan Year shall not
exceed $200,000. This limitation shall be adjusted 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 Plan Years beginning in such calendar year and the first adjustment
to the $200,000 limitation takes effect on January 1, 1990. If a Plan
determines Compensation on a period of time that contains fewer than 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.
In determining the Compensation of a Participant for purposes
of this limitation, the rules of Section 414(q)(6) of the Code shall
apply, except 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 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 Integration Level if the 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.
Notwithstanding the above, if elected by the Employer in the
Adoption Agreement, Compensation shall include any amount which is
contributed by the Employer pursuant to a salary reduction agreement and
which is not includible in the gross income of the Employee under Sections
125, 402(a)(8), 402(h) or 403 (b) of the Code.
2.8 Custodian. The custodian, if any, designated in the Adoption
Agreement.
2.9 Determination Date. With respect to 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 Plan Year.
2.10 Early Retirement Date. The first day of the month coincident
with or next following the date upon which the Participant satisfies the
early retirement age and service requirements in the Adoption Agreement;
provided, however, such requirements may not be less than age 55, nor more
than 15 Years of Service.
2.11 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 individual are a material income-producing
factor. Net earnings will be determined without regard to items not
included in gross income and the deductions allocable to such items. Net
earnings are reduced by contributions to a qualified plan to the extent
deductible under Section 404 of the Code. Net earnings shall be
determined with regard to the deduction allowed to the Employer by Section
164(f) of the Code for taxable years beginning after December 31, 1989.
2.12 Effective Date. The first day of the first Plan Year for which
the Plan is effective as specified in the Adoption Agreement.
2.13 Eligibility Computation Period. For purposes of determining
Years of Service and Breaks in Service for eligibility to participate, the
initial Eligibility Computation Period shall be the twelve (12)
consecutive month period beginning with the day the Employee first
performs an Hour of Service. The succeeding Eligibility Computation
Periods commence with the first Plan Year which commences after the first
day of the Employee's initial Eligibility Computation Period regardless
of whether the employee is entitled to be credited with a Year of Service
during the initial Eligibility Computation Period. An Employee who is
credited with a Year of Service in both the initial Eligibility
Computation Period and the first Plan Year which commences after the first
day of the Employee's initial eligibility computation period will be
credited with two Years of Service for purposes of eligibility to
participate.
2.14 Employee. Any person, including a Self-Employed Individual,
who is employed by any Affiliated Employers. Any Leased Employee shall
be treated as an Employee. However, contributions or benefits provided
by the leasing organization which are attributable to services performed
for the Employer shall be treated as provided by the Employer.
Notwithstanding the above, a Leased Employee will not be considered an
Employee if: (i) such Leased Employee is covered by a money purchase
pension plan providing: (1) a non-integrated Employer contribution rate
of at least ten percent (10%) of Compensation, as defined in Section 2.7
of the Plan, but including amounts contributed 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, (2) immediate participation, and (3) full and immediate vesting
and (ii) leased Employees do not constitute more than twenty percent (20%)
of the recipient's non-highly compensated workforce.
2.15 Employer. The corporation, proprietorship, partnership or
other organization which adopts the Plan by execution of an Adoption
Agreement.
2.16 Employer Contributions. The contribution of the Employer to
the Plan and Trust as set forth in Article IV and the Adoption Agreement.
2.17 Entry Dates. The Effective Date shall be the first Entry Date.
Thereafter the Entry Dates shall be the first day of each Plan Year and
the first day of the seventh month of each Plan Year.
2.18 ERISA. The Employee Retirement Income Security Act of 1974,
as amended.
2.19 Excess Compensation. With respect to any Plan Year, the amount
of the Participant's Compensation which exceeds the Integration Level.
2.20 Highly Compensated Employee. An Employee described in Section
414(q) of the Code.
2.21 Hour of Service.
(a) Each hour for which an Employee is paid, or entitled to
payment for the performance of duties for the Employer. These hours shall
be credited to the Employee only for the computation period or periods in
which the duties are performed.
(b) Each hour for which an Employee is paid, or entitled to
payment, by the Employer on account of a period of time 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. No
more than 501 Hours of Service shall be credited under this paragraph to
an Employee on account of any single, continuous period during which the
Employee performs no duties (whether or not such period occurs in a single
computation period) and no credit shall be given for hours for which no
duties are performed but for which payment by the Employer is made or due
under a plan maintained solely for the purpose of complying with
applicable workmen's compensation, unemployment compensation, or
disability insurance laws or where payment solely reimburses an Employee
for medical or medically related expenses incurred by the Employee. Hours
under this paragraph will be calculated and credited pursuant to Section
2530.200b-2 of the Department of Labor Regulations which are incorporated
herein by this reference.
(c) Each hour for which back pay, irrespective of mitigation
of damages, is either awarded or agreed to by the Employer. The same
Hours of Service shall not be credited both under paragraph (a) or
paragraph (b), as the case may be, and under this paragraph (c). These
hours shall be credited to the Employee for the computation period or
periods to which the award or agreement pertains rather than the
computation period in which the award, agreement, or payment is made.
(d) Solely for purposes of determining whether an employee has
a Break in Service, Hour of Service shall also include an uncompensated
authorized leave of absence not in excess of two (2) years, or military
leave while the Employee's reemployment rights are protected by law or
such additional or other periods as granted by the Employer as military
leave (credited on the basis of forty (40) Hours of Service per each week
or either (8) Hours of Service per working day), provided the Employee
returns to employment at the end of his leave of absence or within ninety
(90) days of the end of his military leave, whichever is applicable.
(e) Hours of Service will be credited for employment with any
of the Affiliated Employers. Hours of Service will also be credited for
services rendered to the Affiliated Employers by any individual considered
an Employee for purposes of this Plan under Section 414(n) or (o) of the
Code.
(f) Solely for purposes of determining whether an Employee has
a Break in Service, Hours of Service shall also include absence from work
for maternity or paternity reasons if the absence begins on or after the
first day of the first Plan Year beginning after 1984. During this
absence, the Employee shall be credited with the Hours of Service which
would have been credited but for the absence, or, if such hours cannot be
determined, with eight hours per day. An absence from work for maternity
or paternity reasons means an absence:
(i) by reason of the pregnancy of an Employee,
(ii) by reason of the birth of a child of the Employee,
(iii) by reason of the placement of a child with the Employee
in connection with adoption or
(iv) for purposes of caring for such a child for a period
immediately following such birth or placement.
These Hours of Service shall be credited in the computation period
following the computation period in which the absence begins, except as
necessary to prevent a Break in Service in the computation period in which
the absence begins. However, no more than 501 Hours of Service will be
credited for purposes of any such maternity or paternity absence from
work.
(g) The Employer may elect to compute Hours of Service by the
use of one of the service equivalencies in the Adoption Agreement. Only
one method may be selected. If selected, the service equivalency must be
applied to all Employees covered under the Plan.
(h) If the Employer amends the method of crediting service from
the elapsed time method described in 1.410(a)-7 of the Treasury
Regulations to the Hours of Service computation method by the adoption of
this Plan, or an Employee transfers from a plan under which service is
determined on the basis of elapsed time, the following rules shall apply
for purposes of determining the Employee's service under this Plan up to
the time of amendment or transfer:
(i) the Employee shall receive credit, as of the date of
amendment or transfer, for a number of Years of Service equal to the
number of one-year periods of service credited to the Employee as of the
date of the amendment or transfer, and
(ii) the Employee shall receive credit in the applicable
computation period which includes the date of amendment or transfer, for
a number of Hours of Service determined by applying the weekly service
equivalency specified in paragraph (g) to any fractional part of a year
credited to the Employee under this paragraph (h) as of the date of
amendment or transfer. The use of the weekly service equivalency shall
apply to all Employees who formerly were credited with service under the
elapsed time method.
2.22 Integration Level. The Taxable Wage Base or such lesser amount
elected by the Employer in the Adoption Agreement, which level shall be
the amount of Compensation at which Employer Contributions begin to be
integrated with Social Security.
2.23 Key Employee. Any Employee, former Employee, or Beneficiary
who, at any time during the determination period, is or was:
(a) An Officer of any of the Affiliated Employers if such
Officer has total annual compensation from the affiliated Employers in
excess of fifty percent (50%) of the dollar limitation under Section
415(b)(1)(A) of the Code; or
(b) An Employee or Beneficiary owning (or considered as owning
within the meaning of Section 318 of the Code) one of the ten largest
interests in any of the Affiliated Employers if such individual's
Compensation exceeds one hundred percent (100%) of the dollar limitation
under Section 415(c)(1)(A) of the Code; or
(c) A five percent (5%) shareholder or owner of the Affiliated
Employers; or
(d) A one percent (1%) shareholder or owner of any of the
Affiliated Employers, if such Employee has total annual compensation from
the Affiliated Employers of more than $150,000.
The determination of who is a Key Employee shall be made in
accordance with the rules and regulations under Section 416(i)(1) of the
Code. The determination period for purposes of this Section 2.23 is the
Plan Year containing the determination date and the four preceding Plan
Years.
Annual compensation for purposes of this Section shall mean
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.
2.24 Leased Employee. Any person (other than an Employee of any of
the Affiliated Employers) who, pursuant to an agreement between any of the
Affiliated Employers and any other person ("leasing organization"), has
performed service for any of the Affiliated Employers (or for any of the
Affiliated Employers 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 year and such services are of a type historically
performed by employees in the Employer's business field. The
determination of whether a person is a Leased Employee will be made
pursuant to Section 414(n) of the Code.
2.25 Net Profits. Current and accumulated earnings of the Employer,
before federal and state taxes and contributions to this Plan and any
other qualified plan, as computed by the Employer's accountants, in
accordance with generally accepted accounting principles.
2.26 Non-Key Employee. Any Employee or former Employee who is not
a Key Employee. In addition, any Beneficiary of a Non-Key Employee shall
be treated as a Non-Key Employee.
2.27 Normal Retirement Age. The age selected in the Adoption
Agreement, but not less than age 55. If the Employer enforces a mandatory
retirement age, the Normal Retirement Age is the lesser of that mandatory
age or the age specified in the Adoption Agreement.
2.28 Normal Retirement Date. The first day of the month coincident
with or next following the date upon which a Participant attains Normal
Retirement Age.
2.29 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 a partnership.
2.30 Participant. A person who has met the eligibility requirements
of Section 3.1 and whose Account hereunder has been neither completely
forfeited nor completely distributed.
2.31 Permissive Aggregation Group. The Required Aggregation Group
of plans plus any other plan or plans of the Affiliated Employers which,
when considered as a group with the Required Aggregation Group, would
continue to satisfy the requirements of Sections 401(a)(4) and 410 of the
Code.
2.32 Plan. The prototype defined contribution profit sharing and
money purchase pension plan provided under this basic plan document.
References to the Plan shall refer to the profit sharing provisions, the
money purchase pension provisions, or both, as the context may require.
2.33 Plan Administrator. The person, persons, or entity appointed
by the Employer pursuant to Article 15 to manage and administer the Plan.
2.34 Plan Year. The twelve (12) consecutive month period designated
by the Employer in the Adoption Agreement.
2.35 Present Value. The discounted value of the accrued benefit
under a defined benefit plan used to determine Top-Heavy Plan status.
Present Value shall be based only on the interest and mortality rates
specified in the Adoption Agreement.
2.36 Required Aggregation Group.
(a) 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), and
(b) any other qualified plan of the Employer which enables a
plan described in (a) to meet the requirements of Sections 401(a)(4) or
410 of the Code.
2.37 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 an individual who would have had earned income for the
taxable year but for the fact that the trade or business had no Net
Profits for the taxable year.
2.38 Shares. Shares of stock in any regulated investment company
registered under the Investment Company Act of 1940 which is made
available for investment purposes as an investment option under this Plan.
2.39 Sponsor. Oppenheimer Funds Distributor, Inc. (formerly known
as Oppenheimer Fund Management, Inc.)
2.40 Taxable Wage Base. The maximum amount of earnings which may
be considered wages for such year under Section 3121(a)(1) of the Code in
effect as of the beginning of the Plan Year.
2.41 Top-Heavy Plan. For any Plan Year beginning after December 31,
1983, this Plan is Top-Heavy if any of the following conditions exist:
(a) If the Top-Heavy Ratio for this Plan exceeds 60 percent and
this Plan is not part of any Required Aggregation Group or Permissive
Aggregation Group of plans.
(b) If this Plan is 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 (60%).
(c) If this 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 (60%).
2.42 Top-Heavy Ratio.
(a) If the Affiliated Employers maintain one or more defined
contribution plans (including any Simplified Employee Pension Plan) and
have never maintained any defined benefit plan which during the five (5)
year period ending on the Determination Date has or had account 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 (including any part of any Account balance distributed
in the five (5) year period ending on the Determination Date), and the
denominator of which is the sum of all Account balances (including any
part of any Account balance distributed in the five (5) year period ending
on the Determination Date) of all Participants as of the Determination
Date 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 regulations
thereunder. Both the numerator and the denominator shall be computed in
accordance with Section 416 of the Code and the regulations thereunder.
(b) If the Affiliated Employers maintain one or more defined
contribution plans (including any Simplified Employee Pension Plan) and
maintain or have maintained one or more defined benefit plans which during
the five (5) year period ending on the Determination Date has or has had
any accrued benefits, the Top-Heavy Ratio for any Required or Permissive
Aggregation Group is a fraction, the numerator of which is the sum of
Account balances under the defined contribution plans for all Key
Employees determined in accordance with paragraph (a) above, and the
Present Value of accrued benefits under the defined benefit plans for all
Key Employees as of the Determination Date, and the denominator of which
is the sum of the account balances under the aggregated defined
contribution plans for all Participants as of the Determination Date and
the Present Value of accrued benefits under the defined benefit plans for
all Participants as of the Determination Date, all determined in
accordance with Section 416 of the Code and the regulations thereunder.
The accrued benefit in a defined benefit plan with respect to both the
numerator and the denominator of the Top-Heavy Ratio are increased for any
distribution of an Account balance or an accrued benefit made in the five
(5) year period ending on the Determination Date, and shall be adjusted
for any contribution due but unpaid as of the Determination Date.
(c) For the purposes of (a) and (b) 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
twelve (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 who is not a Key Employee
but who was a Key Employee in a prior year 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. For
Plan Years beginning after 1984, both the numerator and denominator of the
Top-Heavy Ratio shall be adjusted to exclude the account balance or
accrued benefit of any individual who has not been credited with at least
one Hour of Service with any Affiliated Employer in the 5-year period
ending on the Determination Date.
The accrued benefit of a Participant other than a Key Employee
shall be determined under (i) the method, if any, that uniformly applies
for accrual purposes under all defined benefit plans maintained by the
Employer, or (ii) 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.
2.43 Total and Permanent Disability. The inability of the
Participant to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment, which condition, in
the opinion of a physician chosen by the Plan Administrator, can be
expected to result in death or which has lasted or can be expected to last
for a continuous period of not less than twelve (12) months.
2.44 Trust. The fund maintained by the Trustee for the investment
of Plan assets in accordance with the terms and conditions of the Trust
Agreement.
2.45 Trust Agreement. The agreement between the Employer and the
Trustee under which the assets of the Plan are held, administered, and
managed. The provisions of the Trust Agreement shall be considered an
integral part of this Plan as if set forth fully herein.
2.46 Trustee. The individual or corporate Trustee or Trustees under
the Trust Agreement as they may be constituted from time to time.
2.47 Valuation Date. The last day of each Plan Year and such other
dates, as provided in Section 5.6, for valuing the Trust assets.
2.48 Vesting Computation Period. The Plan Year.
2.49 Year of Service. An Eligibility Computation Period, Vesting
Computation Period, or Plan Year, whichever is applicable, during which
an Employee of the Affiliated Employers has completed at least one
thousand (1,000) Hours of Service (whether or not continuous) with the
Affiliated Employers. The Employer may, in the Adoption Agreement,
specify a lesser number of hours.
ARTICLE 3
ELIGIBILITY AND YEARS OF SERVICE
3.1 Eligibility Requirements.
(a) Each Employee of the Affiliated Employers shall become a
Participant in the plan as of the first Entry Date after the date on which
the Employee has satisfied the minimum age and service requirements
specified in the Adoption Agreement.
(b) The Employer may elect in the Adoption Agreement to exclude
from participation:
(i) Employees included in a unit of employees covered by
a collective bargaining agreement, between the Employer and Employee
representatives if retirement benefits were the subject of good faith
bargaining and if less than 2% of the Employees of the Employer who are
covered pursuant to that agreement are professionals as defined in Section
1.410(b)-9(g) of the proposed Treasury regulations or comparable final
Treasury regulations. 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, and
(ii) non-resident aliens who receive no earned income from
the Employer which constitutes income from sources within the United
States.
3.2 Participation and Service Upon Reemployment. Upon the
reemployment of any Employee, the following rules shall determine his
eligibility to participate in the Plan and his credit for prior service.
(a) Participation. If the reemployed Employee was a
Participant in the Plan during his prior period of employment with the
Employer, he shall be eligible upon reemployment to resume participation
in the Plan. If the reemployed Employee was not a Participant in the
Plan, he shall be considered a new Employee and required to meet the
requirements of Section 3.1 in order to be eligible to participate in the
Plan, subject to the possible reinstatement of credit for prior service
under paragraph (b) below.
(b) Credit for Prior Service. In the case of any Employee who
is reemployed before or after incurring a Break in Service, any Hour of
Service and Year of Service credited to the Employee at the end of his
prior period of employment shall be reinstated as of the date of his
reemployment.
3.3 Predecessor Employers. If specified in the Adoption Agreement,
Years of Service with a predecessor employer will be treated as service
for the Employer for eligibility purposes; provided, however, if the
Employer maintains the plan of a predecessor employer, Years of Service
with such employer will be treated as Service with the Employer without
regard to any election.
ARTICLE 4
CONTRIBUTIONS
4.1 Employer Contributions.
(a) Money Purchase Pension Contributions. For each Plan Year,
the Employer shall contribute to the Trust an amount equal to such uniform
percentage of Compensation of each eligible Participant as may be
determined by the Employer in accordance with the money purchase pension
contribution formula specified in the Adoption Agreement. Subject to the
limitations of Section 5.4, the money purchase pension contribution
formula may be integrated with Social Security by providing for additional
Employer Contributions for each Participant not to exceed the amount
permitted to be allocated on account of the Participant's Excess
Compensation.
(b) Profit-Sharing Contribution. For each Plan Year, the
Employer shall contribute to the Trust an amount as may be determined by
the Employer in accordance with the profit-sharing formula set forth in
the Adoption Agreement.
(c) Eligible Participants. Subject to the Minimum Allocation
rules of Section 5.2, Participants who (i) died, retired, or became
Totally and Permanently Disabled during the Plan Year, or (ii) are
employed on the last day of the Plan Year and who completed the number of
Hours of Service specified by the Employer in the Adoption Agreement in
such Plan Year shall be eligible to share in the Employer Contribution.
An Employer may elect in the Adoption Agreement to allocate a contribution
on behalf of a Participant who completes the number of Hours of Service
specified by the Employer in the Adoption Agreement but terminates
employment before the end of the Plan Year. If the Employer fails to
specify in the Adoption Agreement the number of Hours of Service required
to share in the Employer Contribution, the number shall be 501 Hours of
Service.
(d) Contribution Limitation. In no event shall any Employer
contribution exceed the maximum amount deductible from the Employer's
income under Section 404 of the Code, or the maximum limitations under
Section 415 of the Code provided in Article 6.
4.2 Payment. All Employer Contributions to the Trust for any Plan
Year shall be made either in one lump sum or in installments in U.S.
currency or by check within the time prescribed by law, including
extensions granted by the Internal Revenue Service, for filing the
Employer's federal income tax return for the taxable year with or within
which such Plan Year ends. All Employer Contributions to the Trust for
a money purchase pension plan for any Plan Year shall be made within the
time prescribed by regulations under Section 412(c)(10) of the Code.
4.3 Nondeductible Voluntary Contributions by Participants.
(a) This Plan will not accept nondeductible Employee
contributions and matching contributions for Plan Years beginning after
the Plan Year in which this Plan is adopted by the Employer. Employee
contributions for Plan Years beginning after December 31, 1986 will be
limited so as to meet the nondiscrimination test of Section 401(m).
(b) A separate account shall be maintained by the Trustee for
the nondeductible Employee contributions of each Participant.
(c) Employee contributions and earnings thereon will be
nonforfeitable at all times.
4.4 Rollovers and Other Transfers.
(a) Subject to the approval of the Plan Administrator, the
Trustee may, in its discretion, accept a direct transfer of assets from
the trustee of any other qualified plan described in Section 401(a) of the
Code or from a qualified annuity plan described in Section 403(a) of the
Code to be held for the benefit of any Participant to the full extent
permitted by the Code.
(b) Subject to the approval of the Plan Administrator, a
Participant who has participated in any other qualified plan described in
Section 401(a) of the Code or in a qualified annuity plan described in
Section 403(a) of the Code shall be permitted to make a rollover
contribution to the Trust of an amount received by the Participant that
is attributable to participation in such other plan (reduced by any
nondeductible voluntary contributions he made to the Plan), provided that
no part of the rollover contribution is attributable to participation in
a plan under which the Participant was covered as a Key Employee in a Top-
Heavy Plan at the time contributions were made on his behalf, and provided
further that the rollover contribution complies with all requirements of
Section 402(a)(5), Section 403(a)(4), Section 408(d)(3)(A)(ii) or Section
409(b)(3)(C) of the Code, whichever is applicable.
(c) Before approving such a trustee transfer or Participant
rollover, the Plan Administrator may request from the Participant or the
Employer any documents which the Plan Administrator, in its discretion,
deems necessary for such trustee transfer or rollover.
(d) Any trustee transfer or Participant rollover contribution
to the Trust shall be credited to the Participant's trustee transfer or
rollover subaccount established under Section 5.1 and separately accounted
for.
ARTICLE 5
ALLOCATIONS
5.1 Individual Accounts. The Plan Administrator shall establish and
maintain an Account in the name of each Participant. The Account shall
contain the following subaccounts:
(a) A money purchase pension contribution subaccount to which
shall be credited each such Participant's share of (i) Employer
Contributions under Section 4.1(a), (ii) the net earnings or net losses
on the investment of the assets of the Trust, (iii) distributions, and
(iv) dividends, capital gain distributions and other earnings received on
any Shares credited to the Participant's subaccount;
(b) A profit-sharing contribution subaccount to which shall be
credited each such Participant's share of (i) Employer Contributions under
Section 4.1(b), (ii) forfeitures, (iii) the net earnings or net losses on
the investment of the assets of the trust, (iv) distributions, and (v)
dividends, capital gain distributions and other earnings received on any
Shares credited to the Participant's subaccount;
(c) A nondeductible voluntary contribution subaccount to which
shall be credited nondeductible voluntary contributions by the Participant
under Section 4.3 to the extent such nondeductible voluntary contributions
were permitted and made under the Plan, and the earnings, losses and
expenses attributable thereto, including any dividends, capital gain
distributions and other earnings received on any Shares credited to the
Participant's subaccount;
(d) A trustee transfer subaccount to which shall be credited
contributions to the Trust accepted under Section 4.4(a) and the earnings,
losses and expenses attributable thereto, including any dividends, capital
gain distributions and other earnings received on any Shares credited to
the Participant's subaccount;
(e) A rollover subaccount to which shall be credited
contributions to the Trust accepted under Section 4.4(b) and the earnings,
losses and expenses attributable thereto, including any dividends, capital
gain distributions and other earnings received on any Shares credited to
the Participant's subaccount.
5.2 Minimum Allocation.
(a) Except as provided in (b) and (c) below, the Employer
Contributions and forfeitures allocated on behalf of any Participant who
is a Non-Key Employee shall not be less than the lesser of three percent
(3%) of such Participant's compensation (as defined in Section 6.5) 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 Key
Employee's compensation (as defined in Section 6.5), excluding amounts in
excess of $200,000, 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 the Participant's failure to complete 1,000 Hours of
Service (or such lesser amount as may be specified in the Adoption
Agreement for a Year of Service) or because of compensation less than a
stated amount. The minimum allocation required (to the extent required
to be nonforfeitable under Section 416(b) of the Code) may not be
forfeited under Section 411(a)(3)(B) or 411(a)(3)(D) of the Code.
(b) The provisions in (a) above shall not apply to any
Participant who was not employed by the Affiliated Employers on the last
day of the Plan Year.
(c) If the Employer enters into both the money purchase pension
Adoption Agreement and the profit-sharing Adoption Agreement under this
Plan, to avoid a duplication of the minimum allocation under this Section
5.2, the money purchase pension Adoption Agreement shall provide for
contributions that are sufficient to satisfy the minimum allocation
requirements of this Section 5.2.
5.3 Allocation of Employer Contributions and Forfeitures.
(a) All money purchase pension contributions for a given Plan
Year shall be allocated to the Account of the Participant for whom such
contribution was made in accordance with the contribution formula
specified by the Employer in the Adoption Agreement. Any forfeiture from
a Participant's money purchase pension contribution subaccount arising
under the Plan for a given Plan Year shall be applied to reduce the
Employer Contribution in that Plan Year, or if in excess of the Employer
Contribution for such Plan Year, the amounts shall be used to reduce the
Employer Contribution in the next succeeding Plan Year or Years.
(b) All profit-sharing contributions to and forfeitures from
a Participant's profit-sharing contribution subaccount will be allocated
to the Account of each Participant in the ratio that such Participant's
Compensation bears to the Compensation of all Participants. However, if
the profit-sharing contribution formula selected in the Adoption Agreement
is integrated with Social Security, profit-sharing contributions for the
Plan Year plus any forfeitures will be allocated to Participants' Accounts
as follows:
(i) First, contributions and forfeitures shall be
allocated to each Participant's Account in the ratio that each
Participant's total Compensation bears to all Participant's total
Compensation, but not in excess of 3% of each Participant's Compensation;
(ii) Next, any contributions and forfeitures remaining
after the allocation in (i) shall be allocated to each Participant's
Account in the ratio that each Participant's Excess Compensation bears to
the Excess Compensation of all Participants, but not in excess of 3%.
(iii) Next, any contributions and forfeiture remaining
after the allocation in (ii) shall be allocated to each Participant's
Account in the ratio that the sum of each Participant's total Compensation
and Excess Compensation bears to the sum of all Participants' total
Compensation and Excess Compensation, but not in excess of the profit-
sharing maximum disparity rate;
(iv) Next, any remaining Employer Contributions or
forfeitures shall be allocated to each Participant's Account in the ratio
that each Participant's total Compensation for the Plan Year bears to all
Participant's total Compensation for that year.
The profit-sharing maximum disparity rate is equal to the lesser of (A)
2.7% or (B) the applicable percentage determined in accordance with the
table below:
If the Integration Level
the applicable
is more than but not more than percentage is:
$0 X* 2.7%
X* of TWB 80% of TWB 1.3%
80% of TWB Y** 2.4%
*X = the greater of $10,000 or 20 percent of the TWB
**Y = any amount more than 80% of the TWB but less than 100% of the
TWB.
TWB = Taxable Wage Base
If the Integration Level used is equal to the Taxable Wage Base, the
applicable percentage is 2.7%.
(c) Notwithstanding anything in (a) or (b) above to the
contrary, forfeitures arising under a Participant's money purchase pension
contribution subaccount will only be used to reduce the contributions of
the Participant's Employer who adopted this Plan, and forfeitures arising
under a Participant's profit-sharing subaccount will be reallocated only
for the benefit of Employees of the
Participant's Employer who adopted this Plan.
5.4 Coordination of Social Security Integration. If the Employer
maintains plans involving integration with Social Security other than this
Plan, and if any Participant is eligible to participate in more than one
of such plans, all such plans will be considered to be integrated if the
extent of the integration of all such plans does not exceed 100 percent.
For purposes of the preceding sentence, the extent of integration of a
plan is the ratio (expressed as a percentage) which the actual benefits,
benefit rate, offset rate, or Employer Contribution rate under the plan
bears to the integration limitation applicable to such plan. If the
Employer enters into both the money purchase pension Adoption Agreement
and the profit-sharing Adoption Agreement under this Plan, integration
with Social Security may only be selected in one Adoption Agreement.
5.5 Withdrawals and Distributions. Any distribution to a
Participant or his Beneficiary, any amount transferred from a
Participant's Account directly to the Trustee of any other qualified plan
described in Section 401(a) of the Code or from a qualified annuity plan
described in Section 403(a) of the Code, or any withdrawal by a
Participant shall be charged to the appropriate subaccount(s) of the
Participant as of the date of the distribution or the withdrawal.
Distributions are subject to spousal consent if the joint and survivor
rules of Article 9 apply.
5.6 Determination of Value of Trust Fund and of Net Earnings or
Losses. As of each Valuation Date the Trustee shall determine for the
period then ended the sum of the net earnings or losses of the Trust
(excluding with respect to Shares and other assets specifically allocated
to a specific Participant's subaccount, (i) dividends and capital gain
distributions from Shares, (ii) receipts or income attributable to
insurance policies, (iii) income gains and/or losses attributable to a
Participant's loans made pursuant to Article 13 or to any other assets)
which shall reflect accrued but unpaid interest, dividends, gains, or
losses realized from the sale, exchange or collection of assets, other
income received, appreciation in the fair market value of assets,
depreciation in the fair market value of assets, administration expenses,
and taxes and other expenses paid. Gains or losses realized and
adjustments for appreciation or depreciation in fair market value shall
be computed with respect to the difference between such value as of the
preceding Valuation Date or date of purchase, whichever is applicable, and
the value as of the date of disposition of the current Valuation Date,
whichever is applicable.
5.7 Allocation of Net Earnings or Losses.
(a) As of each Valuation Date the net earnings or losses of the
Trust (excluding with respect to Shares and other assets specifically
allocated to a specific Participant's subaccount, (i) dividends and
capital gain distributions from Shares, (ii) dividends or credits
attributable to insurance policies, (iii) income gains and/or losses
attributable to a Participant's loans made pursuant to Article 11 or to
any other assets, all of which shall be allocated to such Participant's
subaccount) for the Valuation Period then ending shall be allocated to the
Accounts of all Participants (or Beneficiaries) having credits in the Fund
both on such date and at the beginning of such Valuation Period. Such
allocation shall be made by the application of a fraction, the numerator
of which is the value of the Account of a specific Participant (or
Beneficiary) as of the immediately preceding Valuation Date, reduced by
any distributions therefrom since such preceding Valuation Date, and the
denominator of which is the total value of all such Accounts as of that
preceding Valuation Date, reduced by any distributions therefrom since
such preceding Valuation Date.
(b) To the extent that Shares and other assets are specifically
allocated to a specific Participant's subaccount:
(i) dividends and capital gain distributions from Shares,
(ii) dividends or credits attributable to insurance
policies,
(iii) income gains and/or losses attributable to a
Participant's loans made pursuant to Article 13 or to any
other assets, all shall be allocated to such Participant's
subaccount.
5.8 Responsibilities of the Plan Administrator. The Plan
Administrator shall maintain accurate records with respect to the
contributions made by or on behalf of Participants under the Plan, and
shall furnish the Trustee with written instructions directing the Trustee
to allocate all Plan contributions to the Trust among the separate
Accounts of Participants in accordance with Section 5.1 above. In making
any such allocation, the Trustee shall be fully entitled to rely on the
instructions furnished by the Plan Administrator, and shall be under no
duty to make any inquiry or investigation with respect thereto.
ARTICLE 6
LIMITATIONS ON ALLOCATIONS
6.1 Employers Who Do Not Maintain Other Qualified Plans.
(a) If the Participant does not participate in, and has never
participated in another qualified plan or a welfare benefit fund, as
defined in Section 419(e) of the Code maintained by the employer (as
defined in Section 6.5), or an individual medical account, as defined in
Section 415(l)(2) of the Code, maintained by the employer, which provides
an annual addition as defined in Section 6.5(a), the amount of annual
additions which may be credited to the Participant's Account for any
limitation year will not exceed the lesser of the maximum permissible
amount or any other limitation contained in this Plan. 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 will be reduced so that the annual additions for the limitation
year will equal the maximum permissible amount.
(b) Prior to determining the Participant's actual compensation
for the limitation year, the employer may determine the maximum
permissible amount for a Participant on the basis of a reasonable
estimation of the Participant's compensation for the limitation year,
uniformly determined for all Participants similarly situated.
(c) As soon as is administratively feasible after the end of
the limitation year, the maximum permissible amount for the limitation
year will be determined on the basis of the Participant's actual
compensation for the limitation year.
(d) If, pursuant to Section 6.1(c) or as a result of
forfeitures, there is an excess amount the excess will be disposed of as
follows:
(i) any nondeductible voluntary contributions, to the
extent they would reduce the excess amount, will be returned to the
Participant;
(ii) if after the application of paragraph (i) 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
will 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;
(iii) if after the application of paragraph (i) an excess
amount still exists, and the Participant is not covered by the Plan at the
end of the limitation year, the excess amount will be held unallocated in
a suspense account. The suspense account will be applied to reduce future
Employer Contributions (including allocation of any forfeitures) for all
remaining Participants in the next limitation year, and each succeeding
limitation year if necessary; and
(iv) if a suspense account is in existence at any time
during the limitation year pursuant to this Section, it will not
participate in the allocation of the Trust's investment gains and losses.
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 Employee
contributions may be made to the Plan for that limitation year. Excess
amounts may not be distributed to Participants or former Participants.
6.2 Employers Who Maintain Other Qualified Master or Prototype
Defined Contribution Plans.
(a) This Section applies if, in addition to this Plan, the
Participant is covered under another qualified master or prototype defined
contribution 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 as
defined in Section 6.5(a), during any limitation year. The annual
additions which may be credited to a Participant's Account under this Plan
for any such limitation year will not exceed the maximum permissible
amount reduced by the annual additions credited to a Participant's Account
under the other plans and welfare benefit funds for the same limitation
year. If the annual additions with respect to the Participant under other
defined contribution plans and welfare benefit funds maintained by the
employer are less than the maximum permissible amount and the Employer
Contribution that would otherwise be contributed or allocated to the
Participant's Account under this Plan would cause the annual additions for
the limitation year to exceed this limitation, the amount contributed or
allocated will be reduced so that the annual additions under all such
plans and funds for the limitation year will 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.
(b) 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 Section
6.1(b).
(c) As soon as is administratively feasible after the end of
the limitation year, the maximum permissible amount for the limitation
year will be determined on the basis of the Participant's actual
compensation for the limitation year.
(d) If, pursuant to Section 6.2(c) or as a result of the
allocation of forfeitures, 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 will 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.
(e) If an 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 (1) the annual additions allocated to the
Participant for the limitation year as of such date under this
Plan to (2) the total annual additions allocated to the
Participant for the limitation year as of such date under this
and all the other qualified master or prototype defined
contribution plans.
(f) Any excess amount attributed to this Plan will be disposed
in the manner described in Section 6.1(d).
6.3 Employers Who, In Addition to this Plan, Maintain Other
Qualified Plans Which Are Defined Contribution Plans Other than Master or
Prototype Plans. If the Participant is covered under another qualified
defined contribution plan maintained by the employer which is not a master
or prototype plan, annual additions which may be credited to the
Participant's Account under this Plan for any limitation year will be
limited in accordance with Section 6.2 as though the other plan were a
master or prototype plan unless the employer provides other limitations
in the Adoption Agreement.
6.4 Employers Who, In Addition to this Plan, Maintain a Qualified
Defined Benefit Plan. 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 will be limited in
accordance with the Adoption Agreement.
6.5 Definitions. For purposes of this Article 6 the following
definitions and rules of interpretation shall apply:
(a) "annual additions" -- The sum of the following amounts
credited to a Participant's Account for the limitation year:
(i) Employer contributions;
(ii) Employee contributions; and
(iii) Forfeitures.
For this purpose, any excess amount applied under Section 6.1(d)
or 6.2(f) in the limitation year to reduce employer contributions will be
considered annual additions for such limitation year. Amounts 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, are treated as annual additions to a defined
contribution plan. Also, amounts derived from contributions paid or
accrued after December 31, 1985, in taxable years ending after such date,
which are attributable to post-retirement medical benefits allocated to
the separate account of a Key Employee, as defined in Section 419A(d)(3)
of the Code, under a welfare benefit fund, as defined in Section 419(e)
of the Code, maintained by the employer, are treated as annual additions
to a defined contribution plan.
(b) "compensation" -- A Participant's earned income, wages,
salaries, and fees for professional services and other amounts received
(without regard to whether or not paid in cash) for personal services
actually rendered in the course of employment with the employer
maintaining the Plan to the extent that amounts are includable 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,
reimbursements and expense allowances), and excluding the following:
(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 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
either becomes freely transferable or is no longer subject to a
substantial risk of forfeiture;
(iii) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified 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 described in
Section 403(b) of the Code (whether or not the amounts are actually
excludable from the gross income of the Employee).
For purposes of applying the limitations of this Article,
compensation for a limitation year is the compensation actually paid or
includible in gross income during such year.
Notwithstanding the preceding sentence, compensation for a
Participant in a defined contribution plan 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.
(c) "defined benefit fraction" -- A fraction, the numerator of
which is the sum of the Participant's projected annual benefits under all
the defined benefit plans (whether or not terminated) maintained by the
employer, and the denominator of which is the lesser of 100 percent of the
dollar limitation determined for the limitation year under Section 415(b)
and (d) of the Code or 140 percent of highest average compensation,
including any adjustment 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
will not be less than 100 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 of the Code for all
limitation years beginning before January 1, 1987.
(d) "defined contribution dollar limitation" -- $30,000 or, if
greater, one-fourth of the defined benefit dollar limitation set forth in
Section 415(b)(1) of the Code as in effect for the limitation year.
(e) "defined contribution fraction" -- A fraction, the
numerator of which is the sum of the annual additions to the Participant's
account under all the defined contribution plans (whether or not
terminated) maintained by the employer for the current and all prior
limitation years (including the annual additions attributable to the
Participant's nondeductible voluntary contributions to all defined benefit
plans, whether or not terminated, maintained by the employer and the
annual additions attributable to all welfare benefit funds, as defined,
in Section 419(e) of the Code, and individual medical accounts, as defined
in Section 415(l)(2) of the Code, maintained by the employer), and the
denominator of which is the sum of the maximum aggregate amounts for the
current and all prior limitation years of service with the employer
(regardless of whether a defined contribution plan was maintained by the
employer). The maximum aggregate amount in any limitation year is the
lesser of 125 percent of the dollar limitation determined under Sections
415(b) and (d) of the Code in effect under Section 415(c)(1)(A) of the
Code or 35 percent of the Participant's compensation for such year.
If the Participant was a Participant as of the end of the first
day of the first limitation year beginning after December 31, 1986, in one
or more defined contribution plans maintained by the employer which were
in existence on May 6, 1986, the numerator of this fraction will be
adjusted if the sum of this fraction and the defined benefit fraction
would otherwise exceed 1.0 under the terms of this Plan. Under the
adjustment, an amount equal to the product of (1) the excess of the sum
of the fractions over 1.0 times (2) the denominator of this fraction, will
be permanently subtracted from the numerator of this fraction. The
adjustment is calculated using the fractions as they would be computed as
of the end of the last limitation year beginning before January 1, 1987,
and disregarding any changes in the terms and conditions of the Plan made
after May 5, 1986, but using the 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.
(f) "employer" -- For purposes of this Article, the Employer
that adopts this plan, and all members of a controlled group of
corporations (as defined in Section 414(b) of the Code as modified by
Section 415(h) of the Code), all commonly controlled trades or businesses
(as defined in Section 414(c) of the Code as modified by Section 415(h)
of the Code), or affiliated service groups (as defined in Section 414(m)
of the Code) of which the adopting Employer is a part, and any other
entity required to be aggregated with the Employer under Section 414(o)
of the Code.
(g) "excess amount" -- The excess of the Participant's annual
addition for the limitation year over the maximum permissible amount.
(h) "highest average compensation" -- The average compensation
for the three consecutive years of service with the employer that produces
the highest average.
(i) "limitation year" -- A Plan Year, or the 12-consecutive
month period elected by the employer in a resolution. All qualified plans
maintained by the employer must use the same limitation year. If the
limitation year is amended to a different 12-consecutive month period, the
new limitation year must begin on a date within the limitation year in
which the amendment is made.
(j) "master or prototype plan" -- A plan the form of which is
the subject of a favorable opinion letter from the Internal Revenue
Service.
(k) "maximum permissible amount" -- The maximum annual addition
that may be contributed to a Participant's account under the Plan for any
limitation year shall not exceed the lesser of:
(i) the defined contribution dollar limitation, or
(ii) 25 percent of the Participant's compensation for the
limitation year.
The compensation limitation referred to in (ii) 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 Section 415(l)(1) or Section 419A(d)(2) of the
Code.
If a short limitation year is created because of an amendment
changing the limitation year to a different 12-consecutive month period,
the maximum permissible amount will not exceed the defined contribution
dollar limitation multiplied by the following fraction:
Number of months in the short limitation year
12
(l) "projected annual benefit" -- 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:
(i) the Participant will continue employment until normal
retirement age under the plan (or current age, if later), and
(ii) the Participant's compensation for the current
limitation year and all other relevant factors used to determine benefits
under the plan will remain constant for all future limitation years.
ARTICLE 7
TRUST FUND
7.1 Receipt of Contributions by Trustee. All contributions to the
Trust that are received by the Trustee, together with any earnings
thereon, shall be held, managed and administered by the Trustee named in
the Adoption Agreement in accordance with the terms and conditions of the
Trust Agreement and the Plan. The Trustee may use a Custodian designated
by the Sponsor to perform recordkeeping and custodial functions. The
Trustee shall be subject to the proper directions of the Employer or the
Plan Administrator made in accordance with the terms of the Plan and
ERISA.
7.2 Investment Responsibility.
(a) If the Employer elects in the Adoption Agreement to
exercise investment authority and responsibility, the selection of the
investments in which assets of the Trust are invested shall be the
responsibility of the Plan Administrator and each Participant will have
a ratable interest in all assets of the Trust.
(b) If the Adoption Agreement so provides and the Employer
elects to permit each Participant or Beneficiary to select the investments
in his Account, no person, including the Trustee and the Plan
Administrator, shall be liable for any loss or for any breach of fiduciary
duty which results from such Participant's or Beneficiary's exercise of
control.
(c) If the Adoption Agreement so provides and the Employer
elects to permit each Participant or Beneficiary to select the investments
in his Account, the Employer or the Plan Administrator must complete a
schedule of Participant designations.
(d) The Plan Administrator may at any time change the
selection of investments in which the assets of the Trust are invested,
or subject to such reasonable restrictions as may be imposed by the
Sponsor for administrative convenience, may submit an amended schedule of
Participant designations. Such amended documents may provide for a
variance in the percentages of contributions to any particular investment
or a request that Shares in the Trust be reinvested in whole or in part
in other Shares.
7.3 Investment Limitations. The Sponsor may impose reasonable
investment limitations on the Employer and the Plan Administrator relating
to the type of permissible investments in the Trust or the minimum
percentage of Trust assets to be invested in Shares.
ARTICLE 8
VESTING
8.1 Nondeductible Voluntary Contributions and Earnings. The
Participant's nondeductible voluntary contribution subaccount shall be
fully vested and nonforfeitable at all times and no forfeitures will occur
as a result of an Employee's withdrawal of nondeductible voluntary
contributions.
8.2 Rollovers, Transfers and Earnings. The Participant's rollover
subaccount shall be fully vested and nonforfeitable at all times.
8.3 Employer Contributions and Earnings. The Participant's money
purchase pension contribution subaccount and profit-sharing contribution
subaccount shall be fully vested and nonforfeitable upon the Participant's
death, disability, attainment of Normal Retirement Age, or, if the
Adoption Agreement provides for an Early Retirement Date, attainment of
the required age and completion of the required service. In the absence
of any of the preceding events, the Participant's money purchase
contribution subaccount and his profit-sharing contribution subaccount
shall vest in accordance with a minimum vesting schedule specified in the
Adoption Agreement. The schedule must be at least as favorable to
Participants as either schedule (a) or (b) below.
(a) Graduated vesting according to the following schedule:
Years of Service Percent Vested
Less than 2 0
2 20
3 40
4 60
5 80
6 or more 100
(b) Full (100 percent) vesting after three (3) Years of
Service.
8.4 Amendments to Vesting Schedule.
(a) No amendment to the Plan shall be effective to the extent
that it has the effect of decreasing a Participant's accrued benefit.
Notwithstanding the preceding sentence, a Participant's account balance
may be reduced to the extent permitted under Section 412(c)(8) of the
Code. For purposes of this paragraph, a Plan amendment which has the
effect of decreasing a Participant's account balance or eliminating an
optional form of a benefit, with respect to benefits attributable to
service before the amendment shall be treated as reducing an accrued
benefit. Furthermore, if the vesting schedule of the Plan is amended, in
the case of an Employee who is a Participant as of the later of the date
such amendment is adopted or the date it becomes effective, the
nonforfeitable percentage (determined as of such date) of such Employee's
right to his Employer-derived accrued benefit will not be less than his
percentage computed under the Plan without regard to such amendment.
(b) If the Plan's vesting schedule is amended, or the Plan is
amended in any way that directly or indirectly affects the computation of
a 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 with at least three (3) Years of Service with the
Employer may elect, within a reasonable period after the adoption of the
amendment, to have the nonforfeitable percentage computed under the Plan
without regard to such amendment. For Participants who do not have at
least one (1) Hour of Service in any Plan Year beginning after December
31, 1988, the preceding sentence shall be applied by substituting "five
(5) Years of Service" for "three (3) Years of Service" where such
language appears. The Participant's election may be made at any time
during the period ending on the latest of:
(i) 60 days after the amendment is adopted;
(ii) 60 days after the amendment becomes effective; or
(iii)60 days after the Participant is issued written notice of
the amendment by the Employer or the Plan Administrator.
8.5 Determination of Years of Service. For purposes of determining
the vested and nonforfeitable percentage of the Participant's Employer
Contribution subaccounts, all of the Participant's Years of Service with
the Employer or an Affiliated Employer shall be taken into account. If
specified in the Adoption Agreement, Years of Service with a predecessor
employer will be treated as service for the Employer; provided, however,
if the Employer maintains the plan of a predecessor employer, Years of
Service with such employer will be treated as service with the Employer
without regard to any election.
8.6 Forfeiture of Non-Vested Amounts.
(a) For Plan Years beginning before 1985, any portion of a
Participant's Account that is not vested shall be forfeited by him as of
the last day of the Plan Year in which a Break in Service occurs. For
Plan Years beginning after 1984, any portion of a Participant's Account
that is not vested shall be forfeited by him as of the last day of the
Plan Year in which his fifth consecutive Break in Service occurs. Any
amounts thus forfeited shall be reallocated as provided in Article 5.
(b) If a distribution is made at a time when a Participant has
a vested right to less than 100 percent of the value of the Participant's
Account attributable to Employer Contributions and forfeitures, as
determined in accordance with the provisions of Section 8.3 above, and the
nonvested portion of the Participant's Account has not yet been forfeited
in accordance with paragraph (a) above:
(i) a separate remainder subaccount shall be established
for the Participant's interest in the Plan as of the time of the
distribution, and
(ii) at any relevant time the Participant's vested portion
of the separate remainder subaccount shall be equal to 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; 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.
ARTICLE 9
JOINT AND SURVIVOR ANNUITY REQUIREMENTS
9.1 General. The provisions of this Article shall apply to any
Participant who is credited with at least one (1) Hour of Service with the
Employer on or after August 23, 1984, and such other Participants as
provided in Section 9.6.
9.2 Qualified Joint and Survivor Annuity. Unless an optional form
of benefit is selected pursuant to a Qualified Election within the ninety
(90) day period ending on the Annuity Starting Date, a married
Participant's Vested Account Balance will be paid in the form of a
Qualified Joint and Survivor Annuity and an unmarried Participant's Vested
Account Balance will be paid in the form of a life annuity. The
Participant may elect to have such annuity distributed upon attainment of
the Earliest Retirement Age under the Plan.
9.3 Qualified Preretirement Survivor 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 an annuity for the life of the Surviving Spouse.
The Surviving Spouse may elect to have such annuity distributed within a
reasonable period after the Participant's death.
9.4 Definitions.
(a) (i) Election Period. 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. If a Participant
separates from service prior to the first day of the Plan Year in which
age thirty-five (35) is attained, with respect to the Account balance as
of the date of separation, the Election Period shall begin on the date of
separation.
(ii) A Participant who has not yet attained age thirty-five
(35) as of the end of any current Plan Year may make a special Qualified
Election to waive the qualified 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 thirty-five
(35). Such election shall not be valid unless the Participant receives
a written explanation of the qualified preretirement survivor annuity in
such terms as are comparable to the explanation required under Section
9.5. Qualified preretirement survivor annuity coverage will be
automatically reinstated as of the first day of the Plan Year in which the
Participant attains age thirty-five (35). Any new waiver on or after such
date shall be subject to the full requirements of this Article.
(b) Earliest Retirement Age. The earliest date on which, under
the Plan, the Participant could elect to receive retirement benefits.
(c) Qualified Election.
(i) A waiver of a Qualified Joint and Survivor Annuity or
a qualified preretirement survivor annuity. Any waiver of a Qualified
Joint and Survivor Annuity or a qualified preretirement survivor annuity
shall not be effective unless: (1) the Participant's Spouse consents in
writing to the election; (2) the election designates a specific
Beneficiary, including any class of Beneficiaries or any contingent
Beneficiaries, which may not be changed without spousal consent (or the
Spouse expressly permits designations by the Participant without any
further spousal consent); (3) the Spouse's consent acknowledges the effect
of the election; and (4) the Spouse's consent is witnessed by a Plan
representative or notary public. Additionally, a Participant's waiver of
the Qualified Joint and Survivor Annuity shall not be effective unless the
election designates a form of benefit payment which may not be changed
without spousal consent (or the Spouse expressly permits designations by
the Participant without any further spousal consent). If it is
established to the satisfaction of a Plan representative that there is no
Spouse or that the Spouse cannot be located, a waiver will be deemed a
Qualified Election.
(ii) 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 Section 9.5.
(d) Qualified Joint and Survivor Annuity. An immediate annuity
for the life of the Participant with a survivor annuity for the life of
the Spouse which equals fifty percent (50%) 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 Balance.
(e) Spouse (Surviving Spouse). The Spouse or Surviving Spouse
of the Participant, provided that a former spouse will 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) Annuity Starting Date. The first day of the first period
for which an amount is paid as an annuity or any other form.
(g) Vested Account Balance. 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 of this Article 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.
9.5 Notice Requirements
(a) In the case of a Qualified Joint and Survivor Annuity, the
Plan Administrator shall no less than thirty (30) days and no more than
ninety (90) days prior to the Annuity Starting Date, provide each
Participant with a written explanation of: (i) the terms and conditions
of a Qualified Joint and Survivor Annuity; (ii) the Participant's right
to make and the effect of an election to waive the Qualified Joint and
Survivor Annuity form of benefit; (iii) the rights of a Participant's
Spouse; and (iv) the right to make, and the effect of, a revocation of a
previous election to waive the Qualified Joint and Survivor Annuity.
(b) (i) In the case of a qualified preretirement survivor
annuity as described in Section 9.3, the Plan Administrator shall provide
each Participant within the applicable period for such Participant a
written explanation of the qualified preretirement survivor annuity in
such terms and in such manner as would be comparable to the explanation
provided for meeting the requirements of subsection (a) applicable to a
Qualified Joint and Survivor Annuity.
(ii) The applicable period for a Participant is whichever
of the following periods ends last: (i) 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; (ii) a reasonable period ending after the
individual becomes a Participant; (iii) a reasonable period ending after
Section 9.5(c) ceases to apply to the Participant; (iv) a reasonable
period ending after this Article first applies to the Participant.
Notwithstanding the foregoing, notice must be provided within a reasonable
period ending after separation from service in the case of a Participant
who separates from service before attaining age 35.
For purposes of applying the preceding paragraph, a reasonable
period ending after the enumerated events described in (ii), (iii) and
(iv) 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 one year prior to separation and ending one year
after separation. If such a Participant thereafter returns to employment
with the Employer, the applicable period for such Participant shall be
redetermined.
(c) Notwithstanding the other requirements of this Section 9.5,
the respective notices prescribed by this Section need not be given to a
Participant if (1) the plan "fully subsidizes" the costs of a Qualified
Joint and Survivor Annuity or qualified preretirement survivor annuity,
and (2) the plan does not allow the Participant to waive the Qualified
Joint and Survivor Annuity or qualified preretirement survivor annuity and
does not allow a married Participant to designate a nonspouse beneficiary.
For purposes of this subsection, a plan fully subsidizes the costs of a
benefit if no increase in cost, or decrease in benefits to the Participant
may result from the Participant's failure to elect another benefit.
9.6 Safe Harbor Rules.
(a) This section shall apply to a Participant in a profit
sharing plan, and to any distribution, made on or after the first day of
the first Plan year beginning after December 31, 1988, from or under a
separate account attributable solely to accumulated deductible Employee
contributions, as defined in Section 72(o)(5)(B) of the Code, and
maintained on behalf of a Participant in a money purchase pension plan
(including a target benefit plan) if the following conditions are
satisfied: (i) the Participant does not or cannot elect payments in the
form of a life annuity; and (ii) on the death of a Participant, the
Participant's Vested Account Balance will be paid to the Participant's
Surviving Spouse, but if there is no Surviving Spouse, or if the Surviving
Spouse has consented in a manner conforming to a Qualified Election, then
to the Participant's designated Beneficiary. The Surviving Spouse may
elect to have distribution of the Vested Account Balance commence within
the ninety (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. This Section shall not be operative with respect to a
Participant in a profit sharing plan if the plan is a direct or indirect
transferee of a defined benefit plan, money purchase plan, a target
benefit plan, stock bonus, or profit sharing plan which is subject to the
survivor annuity requirements of Sections 401(a)(11) and 417 of the Code.
If this Section is operative, then the provisions of this Article 9, other
than Section 9.7, shall be inoperative.
(b) The Participant may waive the spousal death benefit
described in this Section at any time provided that no such waiver shall
be effective unless it satisfies the conditions of Section 9.4(c) (other
than the notification requirement referred to therein) that would apply
to the Participant's waiver of the qualified preretirement survivor
annuity.
(c) For purposes of this section, Vested Account Balance shall
mean, in the case of a money purchase pension plan or a target benefit
plan, the Participant's separate Account balance attributable solely to
accumulated deductible Employee contributions within the meaning of
Section 72(o)(5)(B) of the Code. In the case of a profit sharing plan,
Vested Account Balance shall have the same meaning as provided in Section
9.4(g).
9.7 Transitional Rules.
(a) Any living Participant not receiving benefits on August 23,
1984, who would otherwise not receive the benefits prescribed by the
previous sections of this 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 (1) Hour of Service under this Plan or a
predecessor plan in a Plan Year beginning on or after January 1, 1976, and
such Participant had at least ten (10) years of vesting service when he
or she separated from service.
(b) Any living Participant not receiving benefits on August 23,
1984, who was credited with at least one (1) 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 9.6(d) of this Article.
(c) The respective opportunities to elect (as described in
subsections (a) and (b) 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.
(d) Any Participant who has elected pursuant to subsection (b)
and any Participant who does not elect under subsection (a) or who meets
the requirements of subsection (a) of this Section 9.7 except that such
Participant does not have at least ten (10) 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 of 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 six (6)
months before the Participant attains qualified early
retirement age and end not more than ninety (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.
(e) The following terms shall have the meanings specified
herein:
(i) Qualified Early Retirement Age. The latest of:
(1) the earliest date, under the Plan, on which the
Participant may elect to receive retirement
benefits;
(2) the first day of the 120th month beginning
before the Participant reaches Normal Retirement
Age; or
(3) the date the Participant begins participation.
(ii) Qualified Joint and Survivor Annuity. An annuity for
the life of the Participant with a survivor annuity for
the life of the Spouse as described in Section 9.4(d).
ARTICLE 10
DISTRIBUTION PROVISIONS
10.1 Distribution Upon Retirement, Disability or Termination.
Subject to Articles 9, 10 and 11, a Participant shall be entitled to
receive the entire amount credited to his Account under the Plan upon his
retirement at or after Normal Retirement Age, at his Early Retirement Date
if the Adoption Agreement provides for an Early Retirement Date or in the
event of the Participant's Total and Permanent Disability. Subject to
Articles 9, 10 and 11, a Participant shall be entitled to receive the
vested portion of his Account upon termination of employment with the
Employer for any reason.
10.2 Restrictions on Immediate Distributions.
(a) If the value of a Participant's Vested Account Balance
derived from Employer and the Employee contributions exceeds (or at the
time of any prior distribution exceeded) three thousand five hundred
dollars ($3,500) and the Account balance is immediately distributable, the
Participant and the Participant's Spouse (or where either the Participant
or the Spouse has died, the survivor) must consent to any distribution of
such Account balance. The consent of the Participant and the
Participant's Spouse shall be obtained in writing within the ninety (90)
day period ending on the Annuity Starting Date. The Annuity Starting Date
is the first day of the first period for which an amount is paid as an
annuity or any other form. 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 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 thirty (30) days and no more
than ninety (90) days prior to the Annuity Starting Date.
(b) Notwithstanding the provisions of subsection (a), only the
Participant need consent to the commencement of a distribution in the form
of a Qualified Joint and Survivor Annuity while the Account balance 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 Section 9.5 of the Plan, only the Participant need
consent to the distribution of an Account balance that is immediately
distributable). 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 this 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 as the Employer 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 may, 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 shall be
transferred, without the Participant's consent, to the other plan if the
Participant does not consent to an immediate distribution.
(c) An Account balance is immediately distributable if any part
of the 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 Normal Retirement Age or age sixty-two (62).
(d) For purposes of determining the applicability of the
foregoing consent requirements to distributions made before the first day
of the first Plan Year beginning after December 31, 1988, the
Participant's Vested Account Balance shall not include amounts
attributable to accumulated deductible Employee contributions within the
meaning of Section 72(o)(5)(B) of the Code.
10.3 Commencement of Benefits.
(a) Unless the Participant elects otherwise, distribution of
benefits will begin no later than the 60th day after the latest of the
close of the Plan Year in which:
(i) the Participant attains age sixty-five (65) (or
Normal Retirement Age, if earlier);
(ii) the 10th anniversary of the year in which the
Participant commenced participation in the Plan
occurs; or
(iii)the Participant terminates service with the Employer.
(b) 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 10.2 of the Plan, shall be
deemed to be an election to defer commencement of payment of any benefit
sufficient to satisfy this Section.
10.4 Early Retirement With Age and Service Requirement. If a
Participant separates from service before satisfying the age requirement
for early retirement, but has satisfied the service requirement, the
Participant will be entitled to elect an early retirement benefit upon
satisfaction of such age requirement.
10.5 Nontransferability of Annuities. Any annuity contract
distributed herefrom must be nontransferable.
l0.6 Conflicts With Annuity Contracts. The terms of any annuity
contract purchased and distributed by the Plan to a Participant or Spouse
shall comply with the requirements of this Plan.
ARTICLE 11
TIMING AND MODES OF DISTRIBUTION
11.1 General Rules.
(a) Except as otherwise provided in Article 9, the requirements
of this Article shall apply to any distribution of a Participant's
interest and will take precedence over any inconsistent provisions of this
Plan. Unless otherwise specified, the provisions of this Article apply
to calendar years beginning after December 31, 1984.
(b) All distributions required under this Article shall be
determined and made in accordance with the income tax regulations under
Section 401(a)(9), including the minimum distribution incidental benefit
requirement of Section 1.401(a)(9)-2 of the regulations.
11.2 Required Beginning Date. The entire interest of a Participant
must be distributed or begin to be distributed no later than the
Participant's required beginning date.
11.3 Limits on Distribution Periods. As of the first distribution
calendar year, distributions, if not made in a single-sum, may only be
made over one of the following periods (or a combination thereof):
(a) the life of the Participant;
(b) the life of the Participant and a designated Beneficiary;
(c) a period certain not extending beyond the life expectancy
of the Participant; or
(d) a period certain not extending beyond the joint and last
survivor expectancy of the Participant and a designated Beneficiary.
11.4 Determination of Amounts to be Distributed Each Year.
(a) Individual Account.
(i) If a Participant's benefit is to be distributed over
(1) a period not extending beyond the life expectancy of the Participant
or the joint life and last survivor expectancy of the Participant and the
Participant's designated Beneficiary or (2) a period not extending beyond
the life expectancy of the designated Beneficiary, 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.
(ii) 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 percent (50%) of
the present value of the amount available for distribution is paid within
the life expectancy of the Participant.
(iii) 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 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 in subsection (a)(i) above as the
relevant divisor without regard to Proposed Regulations Section
1.401(a)(9)-2.
(iv) The minimum distribution required for the
Participant's first distribution calendar year must be made on or before
the Participant's required beginning date. The minimum distribution for
other calendar years, including the minimum distribution for the
distribution calendar year in which the Employee's required beginning date
occurs, must be made on or before December 31 of that distribution
calendar year.
(b) Other Forms. 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 regulations thereunder.
11.5 Death Distribution Provisions.
(a) Distribution Beginning Before Death. If the Participant
dies after distribution of his or her interest has begun, the remaining
portion of such interest will continue to be distributed at least as
rapidly as under the method of distribution being used prior to the
Participant's death.
(b) Distribution Beginning After Death. If the Participant dies
before distribution of his or her interest begins, distribution of the
Participant's entire interest shall be completed by December 31 of the
calendar year containing the fifth anniversary of the Participant's death
except to the extent that an election is made to receive distributions in
accordance with (i) or (ii) below:
(i) if any portion of the Participant's interest is payable
to a designated Beneficiary, distributions may be made over the life or
over a period certain not greater than the life expectancy of the
designated Beneficiary commencing on or before December 31 of the calendar
year immediately following the calendar year in which the Participant
died;
(ii) if the designated Beneficiary is the Participant's
surviving Spouse, the date distributions are required to begin in
accordance with (i) above shall not be earlier than the later of (1)
December 31 of the calendar year immediately following the calendar year
in which the Participant died and (2) December 31 of the calendar year in
which the Participant would have attained age seventy and one-half (70-
l/2).
(c) If the Participant has not made an election pursuant to this
Section 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.
(d) For purposes of subsection (b) above, if the surviving
Spouse dies after the Participant, but before payments to such Spouse
begin, the provisions of subsection (b), with the exception of paragraph
(ii) therein, shall be applied as if the surviving Spouse were the
Participant.
(e) For purposes of this Section, any amount paid to a child of
the Participant will be treated as if it had been paid to the surviving
Spouse if the amount becomes payable to the surviving Spouse when the
child reaches the age of majority.
(f) For the purposes of this Section, distribution of a
Participant's interest is considered to begin on the Participant's
required beginning date (or, if subsection (d) above is applicable, the
date distribution is required to begin to the surviving Spouse pursuant
to subsection (b) above). If distribution in the form of an annuity
described in Section 11.4(b) above irrevocably commences to the
Participant before the required beginning date, the date distribution is
considered to begin is the date distribution actually commences.
11.6 Designation of Beneficiary. Subject to the rules of Article
9, a Participant (or former Participant) may designate from time to time
any person or persons (who may be designated contingently or successively
and may be an entity other than a natural person) as his Beneficiary who
will be entitled to receive any undistributed amounts credited to the
Participant's separate Account under the Plan at the time of the
Participant's death. Any such Beneficiary designation by a Participant
shall be made in writing in the manner prescribed by the Plan
Administrator, and shall be effective only when filed with the Plan
Administrator during the Participant's lifetime. A Participant may change
or revoke his Beneficiary designation at any time in the manner prescribed
by the Plan Administrator. If any portion of the Participant's Account
is invested in insurance pursuant to Article 14, the Beneficiary of the
benefits under the insurance policy shall be the person or persons
designated under the policy. If the designated Beneficiary (or each of
the designated Beneficiaries) predeceases the Participant, the
Participant's Beneficiary designation shall be ineffective. If no
Beneficiary designation is in effect at the time of the Participant's
death, his Beneficiary shall be his estate.
11.7 Definitions.
(a) 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 (1) for each calendar year which has elapsed since the date life
expectancy was first calculated. If life expectancy is being
recalculated, the applicable life expectancy shall be the life expectancy
as so recalculated. The applicable calendar year shall be the first
distribution calendar year, and if life expectancy is being recalculated
such succeeding calendar year. If annuity payments commence in accordance
with Section 11.4(b) before the required beginning date, the applicable
calendar year is the year such payments commence. If distribution is in
the form of an immediate annuity purchased after the Participant's death
with the Participant's remaining interest, the applicable calendar year
is the year of purchase.
(b) Designated Beneficiary. The individual who is designated
as the Beneficiary under the Plan in accordance with Section 401(a)(9) and
the regulations thereunder.
(c) 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 pursuant to
Section 11.5 above.
(d) Life Expectancy.
(i) Life expectancy and joint and last survivor expectancy
are computed by use of the expected return multiples in Tables V and VI
of Section 1.72-9 of the income tax regulations.
(ii) Unless otherwise elected by the Participant (or
Spouse, in the case of distributions described in Section 11.5(b)(ii)
above) by the time distributions are required to begin, life expectancies
shall be recalculated annually. 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.
(e) 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) For purposes of subsection (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.
(f) 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 seventy and one-half
(70-1/2).
(ii) Transitional Rules. The required beginning date of
a Participant who attains age seventy and one-half (70-1/2) before January
1, 1988, shall be determined in accordance with (1) or (2) below:
(1) Non-Five Percent Owners. The required beginning
date of a Participant who is not a five percent (5%) 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 seventy and one-half (70 l/2)
occurs.
(2) Five Percent Owners. The required beginning date
of a Participant who is a five percent (5%) 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 seventy and one-half (70 l/2); or
(B) the earlier of the calendar year with or within
which ends the Plan Year in which the Participant becomes a five percent
(5%) owner, or the calendar year in which the Participant retires.
The required beginning date of a Participant who is not a five percent
(5%) owner who attains age seventy and one-half (70 l/2) during l988 and
who has not retired as of January l, 1989, is April l, 1990.
(iii) Five Percent Owner. A Participant is treated as a
five percent (5%) owner for purposes of this Section if such Participant
is a five percent (5%) owner as defined in Section 416(i) of the Code
(determined in accordance with Section 4l6 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 sixty-six and
one-half (66 l/2) or any subsequent year.
(iv) Once distributions have begun to a five percent (5%)
owner under this Section, they must continue to be distributed, even if
the Participant ceases to be a five percent (5%) owner in a subsequent
year.
11.8 Transitional Rule.
(a) Notwithstanding the other requirements of this Article and
subject to the requirements of Article 9, distribution on behalf of any
Employee, including a five percent (5%) owner, may be made in accordance
with all of the following requirements (regardless of when such
distribution commences):
(i) 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.
(ii) The distribution is in accordance with a method of
distribution designated by the Employee whose interest in the Trust is
being distributed or, if the Employee is deceased, by a Beneficiary of
such Employee.
(iii) Such designation was in writing, was signed by the
Employee or the Beneficiary, and was made before January l, 1984.
(iv) The Employee had accrued a benefit under the Plan as
of December 31, 1983.
(v) The method of distribution designated by the Employee
or the Beneficiary specifies the time at which distributions will be made
and in the case of any distribution upon the Employee's death, the
Beneficiaries of the Employee listed in order of priority.
(b) A distribution upon death will not be covered by this
transitional rule unless the information in the designation contains the
required information described above with respect to the distributions to
be made upon the death of the Employee.
(c) For any distribution which commences before January 1, 1984,
but continues after December 31, 1983, the Employee, or the Beneficiary,
to whom such distribution is being made, will be presumed to have
designated the method of distribution under which the distribution is
being made if the method of distribution was specified in writing and the
distribution satisfies the requirements in subsections (a)(i) and (a)(v).
(d) If a designation is revoked, any subsequent distribution
must satisfy the requirements of Section 401(a)(9) of the Code and the
regulations thereunder. If a designation is revoked subsequent to the
date distributions are required to begin, the Trust must distribute by the
end of the calendar year following the calendar year in which the
revocation occurs the total amount not yet distributed which would have
been required to have been distributed to satisfy Section 40l(a)(9) of the
Code and the regulations thereunder but for the Section 242(b)(2)
election. For calendar years beginning after December 31, 1988, such
distributions must meet the minimum distribution incidental benefit
requirements in Section l.401(a)(9)-2 of the income tax regulations. Any
changes in the designation will be considered to be a revocation of the
designation. However, the mere substitution or addition of another
beneficiary (one not named in the designation) under the designation will
not be considered to be a revocation of the designation, so long as such
substitution or addition does not alter the period over which
distributions are to be made under the designation, directly or indirectly
(for example, by altering the relevant measuring life). In the case in
which an amount is transferred or rolled over from one plan to another
plan, the rules in Q&A J-2 and Q&A J-3 shall apply.
11.9 Optional Forms of Benefit.
(a) Except to the extent benefits are required to be paid in the
form of an automatic joint and survivor annuity under Article 9, any
amount which a Participant shall be entitled to receive under the Plan
shall be distributed in one or a combination of the following ways:
(i) in a lump-sum payment of cash, the amount of which
shall be determined by redeeming all Shares credited to the Participant's
Account under the Plan as of the date of distribution;
(ii) in a lump-sum payment including a distribution in kind
of all Shares credited to the Participant's Account under the Plan as of
the date of distribution;
(iii) in substantially equal monthly, quarterly, or annual
installment payments of cash, or the distribution of Shares in kind, over
a period certain not to exceed the life expectancy of the Participant or
the joint and last survivor life expectancy of the Participant and his
Beneficiary, determined in each case as of the earlier of: (l) the end of
the Plan Year in which occurs the event entitling the Participant to a
distribution of benefits, or (2) the date such installments commence;
(iv) if permitted by the Sponsor, in monthly, quarterly,
or annual installment payments of cash, or the distribution of Shares in
kind, so that the amount distributed in each Plan Year equals the quotient
obtained by dividing the Participant's Account at the beginning of that
Plan Year by the joint and last survivor life expectancy of the
Participant and the Beneficiary for that Plan year. The life expectancy
will be computed using the recomputation method described in Section
II.7(d). Unless the Spouse of the retired Participant is the Beneficiary,
the actuarial present value of all expected payments to the retired
Participant must be more than fifty percent (50%) of the actuarial present
value of payments to the retired Participant and the Beneficiary;
(v) by application of the Participant's vested Account to
the purchase of a nontransferable immediate or deferred annuity contract,
on an individual or group basis. Unless the Spouse of the retired
Participant is the Beneficiary, the actuarial present value of all
expected payments to the retired Participant must be more than fifty
percent (50%) of the actuarial present value of payments to the retired
Participant and the Beneficiary.
(b) Notwithstanding any other provision of this Plan to the
contrary, if the Participant's Vested Account Balance exceeds three
thousand five hundred dollars ($3,500) the Plan Administrator may make an
immediate distribution of the Participant's Account during Plan Years
beginning after 1984 only if the Participant (or if married, the
Participant and Spouse, or where the Participant has died, the surviving
Spouse) consents in writing to distribution.
(c) If the Participant fails to select a method of distribution,
except as may be required by Article 9, all amounts which he is entitled
to receive under the Plan shall be distributed to him in a lump-sum
payment.
ARTICLE 12
WITHDRAWALS
12.1 Withdrawal of Nondeductible Voluntary Contributions. Subject
to the qualified election requirements of the survivor annuity rules of
Article 9 and also subject to Section 12.3, any Participant who has made
nondeductible voluntary contributions may, upon thirty (30) days notice
in writing filed with the plan Administrator, have paid to him all or any
portion of the fair market value of his nondeductible voluntary
contribution subaccount.
12.2 Hardship Withdrawals. If the Adoption Agreement so provides
and the Employer elects, this Section applies only to the profit sharing
contribution subaccount and only if the profit sharing allocation formula
selected in the Adoption Agreement is not integrated with Social Security.
(a) Demonstration of Need. Subject to the qualified election
requirements of the survivor annuity rules of Article 9 and also subject
to Section 12.3, if a Participant establishes an immediate and heavy
financial need for funds because of a hardship resulting from the purchase
or renovation of a primary residence, the education of the Participant or
a member of his immediate family (including special education), the
medical or personal expenses of the Participant or a member of his
immediate family, or other demonstrable emergency as determined by the
Plan Administrator on a uniform and nondiscriminatory basis, the
Participant shall be permitted, subject to the limitations of subsection
(b) below, to make a hardship withdrawal of an amount credited to his
profit-sharing contribution subaccount under the Plan.
(b) Amount of Hardship Withdrawal. The amount of any hardship
withdrawal by a Participant under subsection (a) above shall not exceed
the amount required to meet the immediate financial need created by the
hardship and not reasonably available from other resources of the
Participant.
(c) Prior Withdrawal of Nondeductible Voluntary Participant
Contributions. A Participant shall not be permitted to make a hardship
withdrawal under subsection (a) above unless he has already withdrawn, in
accordance with Section 12.l, any amount credited to his nondeductible
voluntary contributions subaccount.
l2.3 Manner of Making Withdrawals. Any withdrawal by a Participant
under the Plan shall be made only after the Participant files a written
request with the Plan Administrator specifying the nature of the
withdrawal (and the reasons therefor, if a hardship withdrawal), and the
amount of funds requested to be withdrawn. Upon approving any withdrawal,
the Plan Administrator shall furnish the Trustee with written instructions
directing the Trustee to make the withdrawal in a lump sum payment of cash
to the Participant. In making any withdrawal payment, the Trustee shall
be fully entitled to rely on the instructions furnished by the Plan
Administrator, and shall be under no duty to make any inquiry or
investigation with respect thereto. If the Participant is married, his
spouse must consent to the withdrawal pursuant to a qualified election (as
defined in Section 9.4(c)) within the 90-day period ending on the date of
withdrawal.
12.4 Limitations on Withdrawals. The Plan Administrator may
prescribe uniform and nondiscriminatory rules and procedures limiting the
number of times a Participant may make a withdrawal under the Plan during
any Plan Year, and the minimum amount a Participant may withdraw on any
single occasion.
ARTICLE 13
LOANS
13.1 Amount of Loan.
(a) If the Adoption Agreement so provides and the Employer
elects to allocate or permits Participants to allocate a portion of their
Accounts to Participant loans, such loans shall be made available to all
Participants and Beneficiaries on a reasonably equivalent basis. Loans
shall be made only upon receipt of a written request from the Participant
in accordance with the provisions of this Article 13. Unless the
provisions of Section 9.6 apply, such request must be accompanied by a
written consent of the Participant's spouse, if any. Spousal consent
shall be obtained no earlier than the beginning of the 90-day period that
ends on the date on which the Participant's Account is pledged as security
for the loan. The consent must be in writing, must acknowledge the effect
of the loan, and must be witnessed by a Plan representative or notary
public. Such consent shall thereafter be binding with respect to the
consenting spouse or any subsequent spouse with respect to that loan. A
new consent shall be required if the Participant's Account balance is used
for renegotiation, extension, renewal, or other revision of the loan. If
a valid spousal consent has been obtained, then, notwithstanding any other
provision of this 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 100% of the Participant's vested Account balance
(determined without regard to the preceding sentence) is payable to the
Surviving Spouse, then 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. Notwithstanding any other provision of this Article 13,
no loan will be made to any Owner-Employee or to any shareholder-employee.
For purposes of this requirement, a shareholder- employee means an
employee or officer of an electing small business (Subchapter S)
corporation who owns (or is considered as owning within the meaning of
Section 318(a)(i) of the Code, on any day during the taxable year of such
corporation), more than five percent of the outstanding stock of the
corporation. Loans shall not be made to Highly Compensated Employees in
an amount greater than the amount made available to other Employees.
(b) No loan to any Participant or Beneficiary can be made to the
extent that such loan when added to the outstanding balance of all other
loans to the Participant or Beneficiary would exceed the lesser of (a)
$50,000 reduced by the excess (if any) of the highest outstanding balance
of loans during the one year period ending on the day before the loan is
made, over the outstanding balance of loans from the Plan on the date the
loan is made, or (b) one-half the present value of the nonforfeitable
Accrued benefit of the Participant. An assignment or pledge of any
portion of the Participant's interest in the Plan and a loan, pledge or
assignment with respect to any insurance contract purchased under the
Plan, will be treated as a loan under this paragraph. For purposes of the
above limitation, all loans from plans of the Affiliated Employers shall
be aggregated.
13.2 Manner of Making Loans. A request by a Participant for a loan
shall be made in writing to the Plan Administrator and shall specify the
amount of the loan, and the subaccount(s) or Shares of the Participant
from which the loan should be made. The terms and conditions on which the
Plan Administrator shall approve loans under the Plan shall be applied on
a uniform and nondiscriminatory basis with respect to all Participants.
If a Participant's request for a loan is approved by the Plan
Administrator, the Plan Administrator shall furnish the Trustee with
written instructions directing the Trustee to make the loan in a lump sum
payment of cash to the Participant. In making any loan payment under this
Article 13, the Trustee shall be fully entitled to rely on the
instructions furnished by the Plan Administrator, and shall be under no
duty to make any inquiry or investigation with respect thereto.
13.3 Terms of Loan. Loans shall be made on such terms and subject
to such limitations as the Plan Administrator may prescribe provided that
any such loan shall be evidenced by a written note, shall bear a
reasonable rate of interest on the unpaid principal thereof, shall be
adequately secured, and shall be repaid (both principal and interest), not
less frequently than quarterly, by the Participant over a period not to
exceed five (5) years, unless such loan is solely for the purpose of
acquiring a dwelling unit which, within a reasonable time (determined when
the loan is made) will be used as the principal residence of the
Participant. The rate of interest to be charged shall not violate any
applicable usury law, and shall be a rate determined by the Employer in
accordance with the rates quoted by representative financial institutions
in the local area for similar loans.
13.4 Security for Loan. Any loan to a Participant under the Plan
shall be secured by the pledge of all the Participant's right, title, and
interest in the Trust. Such pledge shall be evidenced by the execution
of a promissory note by the Participant which shall provide that, in the
event of any default by the Participant on a loan repayment, the Plan
Administrator shall be authorized (to the extent permitted by law) to
deduct the amount of the loan outstanding and any unpaid interest due
thereon from the Participant's wages or salary to be thereafter paid by
the Employer, and to take any and all other actions necessary and
appropriate to enforce collection of the unpaid loan. In the event the
value of the Participant's vested Account at any time is less than 125
percent of the outstanding loan balance, the Plan Administrator may
request additional collateral of sufficient value to adequately secure the
repayment of the loan. Failure to provide such additional collateral upon
a request of the Plan Administrator shall constitute an event of default.
13.5 Segregated Investment. Loans shall be considered a Participant
directed investment and for the limited purposes of allocating earnings
and losses pursuant to Article 5 shall not be considered a part of the
common fund under the Trust.
13.6 Repayment of Loan. The Plan Administrator shall have the sole
responsibility for ensuring that a Participant timely makes all loan
repayments, and for notifying the Trustee in the event of any default by
the Participant on the loan. Each loan repayment shall be paid to the
Trustee, and shall be accompanied by written instructions from the Plan
Administrator that identify the Participant on whose behalf the loan
repayment is being made.
13.7 Default on Loan. In the event of a termination of the
Participant's employment with the Affiliated Employers or a default by a
Participant on a loan repayment, all remaining payments on the loan shall
be immediately due and payable. The Employer shall, upon the direction
of the Plan Administrator, to the extent permitted by law, deduct the
total amount of the loan outstanding and any unpaid interest due thereon
from the wages or salaries payable to the Participant by the Employer in
accordance with the Participant's promissory note. In addition, the Plan
Administrator shall take any and all other actions necessary and
appropriate to enforce collection of the unpaid loan. However, attachment
of the Participant's Account pledged as security will not occur until a
distributable event occurs under the Plan.
13.8 Unpaid Amounts. Upon the occurrence of a Participant's
retirement or death, or upon a Participant's fifth Break in Service or
earlier distribution, the unpaid balance of any loan, including any unpaid
interest, shall be deducted from any payment or distribution from the
Trust to which such Participant or his Beneficiary may be entitled and his
vested interest in his Account shall be reduced. If after charging the
Participant's Account with the unpaid balance of the loan, including any
unpaid interest, there still remains an unpaid balance of any such loan
and interest, then the remaining unpaid balance of such loan and interest
shall be charged against any property pledged as security with respect to
such loan.
ARTICLE 14
INSURANCE
14.1 Insurance. If the Adoption Agreement so provides and the
Employer elects to allocate or permit Participants to allocate a portion
of their Accounts to purchase life insurance, the ensuing subsections of
this Article shall apply.
14.2 Policies. The Plan Administrator shall instruct the Trustee
to procure one or more life insurance policies on the Participant's life,
the terms of which shall conform to the requirements of the Plan and the
Code. The policies and the companies which write them shall be subject
to the approval of the Plan Administrator and the Trustee. The Trustee
shall procure and hold such policies in its name or the name of a nominee
who shall act solely as agent for the Trustee and pursuant to the
directions of the Trustee. The Trustee shall be the sole owner of all
contracts purchased hereunder, and it shall be so designated in each
policy and application therefor.
14.3 Beneficiary. The Participant shall have the right to name the
Beneficiary and to choose the benefit option under the policy for the
Beneficiary. Notwithstanding the foregoing, a Participant's spouse shall
be the designated beneficiary of the proceeds in all circumstances unless
a Qualified Election has been made in accordance with Section 9.4(c), if
applicable. The Trustee shall designate the Beneficiary of all such
policies in accordance with the written directions of the Plan
Administrator and the policy terms. Such designation may be outlined in
the original application as forwarded to the issuing company. However,
the Plan Administrator shall have available and shall furnish the
Participant with the necessary forms for any Beneficiary designation or
change of Beneficiary and it will keep a copy of all executed designations
as a part of its records.
Upon a Participant's death, the Plan Administrator will promptly furnish
the Trustee a copy of the last designation and shall authorize the Trustee
to complete such forms as the insurance company may require in order to
effect the benefit option. Under no circumstances shall the Trust retain
any part of the insurance proceeds.
14.4 Payment of Premiums. Subject to the provisions of Sections 7.3
and 14.5, premium payments to the insurer may be made only by the Trustee
with respect to any insurance policy purchased on behalf of a Participant
and shall constitute first an investment of a portion of the funds of the
Participant's Employer Contribution subaccounts up to the maximum amount
of such subaccounts permitted to be applied toward such premium payments,
as provided in Section 14.5 hereof. If a Participant's subaccounts lack
sufficient assets to pay premiums on a life insurance policy due on his
behalf, the Trustee, at the direction of the Plan Administrator, acting
upon the request of the Participant, shall borrow under the policy loan
provisions, if any, the amount necessary to pay such premiums, using the
cash value of the insurance as security, or the Trustee may liquidate
assets held in the Participant's Account, in the same order, of sufficient
value to pay such premiums. Any loans shall be repaid by the application
of earnings, contributions, or forfeitures to the Account of the
Participant insured by such policy. In the absence of the Plan
Administrator's direction to borrow or to liquidate assets to pay
premiums, the life insurance policy shall be put on a paid-up basis or,
if it has no cash value, cancelled.
14.5 Limitation on Insurance Premiums. The Trustee shall not pay,
nor shall anyone on behalf of the Trustee pay, any life insurance premium
for any Participant out of the Participant's Employer Contribution
subaccounts unless the amount of such payment, plus all premiums
previously so paid on behalf of the Participant, is less than fifty
percent (50%) of the Employer Contributions and forfeitures allocated to
the Participant's Employer Contribution subaccounts as determined on the
date such premium is paid with respect to reserve life insurance policies
and shall be less than twenty-five percent (25%) thereof with respect to
non-reserve (term) policies, universal life insurance contracts, and all
other life insurance contracts which are not reserve life insurance
contracts or, if both reserve life and non-reserve insurance are purchased
on the life of any Participant, the sum of the term insurance premium plus
one-half of the reserve life premiums may not exceed twenty-five percent
(25%) of the Employer Contributions made on behalf of such Participant.
For purposes of these incidental insurance provisions, reserve life
insurance contracts are contracts with both nondecreasing death benefits
and nonincreasing premiums. Dividends received on life insurance policies
shall be considered a reduction of premiums paid in such computations.
If payment of premiums on a Participant's life insurance policy
is prohibited because of the limitation, the Trustee, as directed by the
Plan Administrator, shall permit the Participant to maintain that part of
the coverage made available by the prohibited premiums, either by payment
of the amount of the prohibited premium by the Participant from sources
other than the Trust or by distributing the policy to the extent of the
Participant's vested interest to the Participant and eliminating it from
the Trust.
Nothing contained in the foregoing provisions of Section 14.4
and this Section 14.5 shall be deemed to authorize the payment of any
premium or premiums for any Participant which would result in a failure
to maintain any mandatory investment in Shares required by the Sponsor in
the Account or subaccounts of any such Participant.
14.6 Insurance Company. No insurance company which may issue any
policies for the purposes of this Plan shall be required to take or permit
any action contrary to the provisions of said policies, nor shall such
insurance company be deemed to be a party to, or responsible for the
validity of, this Plan for any purpose. No such insurance company shall
be required to look into the terms of this Plan or question any action of
the Trustee hereunder, nor be responsible to see that any action of the
Trustee is authorized by the terms of this Plan. Any such issuing
insurance company shall be fully discharged from any and all liability for
any amount paid to the Trustee or paid in accordance with the direction
of the Trustee, as the case may be, or for any change made or action taken
by such insurance company upon such direction; and no such insurance
company shall be obliged to see the distribution or further application
of any monies paid by it. The certificate of the Trustee signed by one
of its trust officers, assistant secretary, or other authorized
representative thereof may be received by any insurance company as
conclusive evidence of any of the matters mentioned in this Plan, and any
insurance company shall be fully protected in taking or permitting any
action on the faith thereof and shall incur no liability or responsibility
for so doing.
14.7 Distribution of Policies. Upon a Participant's death, the
Trustee, upon direction of the Administrator, shall procure the payment
of the proceeds of any policy held by the Participant in accordance with
its terms and this Plan. The Trustee shall be required to pay over all
the proceeds of any policy to the Participant's designated Beneficiary in
accordance with the distribution provisions of this Plan. A Participant's
spouse will be the designated beneficiary unless a qualified election has
been made in accordance with Section 9.4(c) of the Plan. Under no
circumstances shall the Trust retain any part of the proceeds. Subject
to the joint and survivor annuity requirements of Article 9, the policies
shall be converted or distributed upon commencement of benefits in
accordance with the provisions of this Section 14.7. Upon a Participant's
retirement at or after his Normal Retirement Date, unless there is a
single sum distribution in which case any policy shall be distributed, any
such policy shall be converted to a paid-up contract and delivered to the
Participant but the Administrator may, with the Participant's consent,
direct that a portion or all of such cash value of the policy be converted
to provide retirement income as permitted within the terms of the policy
and this Plan. Upon a Participant's retirement due to Total and Permanent
Disability, any such policy shall be held for his account and assigned or
delivered to the Participant in addition to any other benefits provided
by this Plan. Upon a Participant's termination of employment for reasons
other than death, Total and Permanent Disability, or retirement as stated
above, to the extent of life insurance purchased by Employer
contributions, he shall be entitled to a vested interest in any policy
held for his account as his interest is vested in the remainder of his
Employer Contribution subaccounts (exclusive of any such policy).
Whenever the Participant is entitled to one-hundred percent (100%)
vesting, then such policy shall be assigned and delivered to the
Participant in accordance with its terms and the terms of the Plan.
Whenever the Participant is entitled to a vesting of less than one-hundred
percent (100%), then the Participant shall be entitled to a vested
interest of the cash surrender value of any such policy equal to his
percentage vested interest in his Employer Contribution subaccounts,
exclusive of the policy, and one of the following distribution procedures
shall apply:
(a) If the nonvested portion of the cash surrender value of all
policies held for the Participant's Account is less than the amount of his
vested termination benefit exclusive of the policies, then, such policy
shall be assigned to the Participant and the remainder of the
Participant's vested interest in the Participant's Employer Contribution
subaccounts shall be reduced by the cash surrender value of the nonvested
portion of all policies, after which it shall be paid or distributed to
the Participant in accordance with the terms of the Plan; or
(b) If the nonvested portion of the cash surrender value of all
policies held for the Participant's Account exceeds the Participant's
vested interest in the Employer Contribution subaccount exclusive of such
policies, the Participant shall be given the opportunity to purchase such
policies by paying to the Trustee the amount of such excess within thirty
(30) days after notice to him of the amount to be paid. Upon receipt of
such payment said policy shall be assigned and delivered to the
Participant to the full satisfaction of all termination benefits under
this Plan. Any such policy not so purchased shall be surrendered by the
Trustee for its cash value and the proceeds thereof deposited in the Trust
for reallocation pursuant to Article 5.
It is the intention hereof that the total termination benefit
of a Participant whose interest is not fully vested shall be equal to the
sum of the vested percentage of his Employer Contribution subaccounts
exclusive of all such policies and the same percentage of the cash value
of all such policies held for his Account. To the extent possible under
the foregoing provisions such total termination benefits shall be
satisfied by the transfer and delivery to the Participant of one or more
such policies with the balance, if any, to be paid in cash or in kind.
14.8 Policy Features. The Trustee shall arrange, where possible,
that all policies purchased for the benefit of a Participant shall have
the same dividend option which shall be on the premium reduction plan, and
as nearly as may be possible all policies issued under the Plan shall have
the same anniversary date. To the extent any dividends or credits earned
on insurance policies are not applied toward the next premiums due, they
shall be allocated to the Participant's Employer Contribution subaccount
in the same manner as a Participant directed investment.
14.9 Changed Conditions. From time to time because of changed
conditions, the Trustee, acting at the direction of the Plan Administrator
upon the election of the Participant concerned, shall obtain an additional
contract or policy or make such change in the contracts or policies
maintained by the Trustee on the life of the Participant as may be
required by such changed conditions, within the limits permitted by the
insurance company which issued or is requested to issue a contract and the
limits established by this Plan.
14.10 Conflicts. In the event of any conflict between the terms of
the Plan and the provisions of any contract issued hereunder, the terms
of the Plan shall control.
ARTICLE 15
ADMINISTRATION
15.1 Duties and Responsibilities of Fiduciaries; Allocation of
Fiduciary Responsibility. A fiduciary to the Plan shall have only those
specific powers, duties, responsibilities, and obligations as are
explicitly given him under the Plan and Trust Agreement. In general, the
Employer shall have the sole responsibility for making contributions to
the Plan required under Article 4; appointing the Trustee and the Plan
Administrator; and determining the funds available for investment under
the Plan. The Plan Administrator shall have the sole responsibility for
the administration of the Plan, as more fully described in Section 15.2.
It is intended that each fiduciary shall be responsible only for the
proper exercise of his own powers, duties, responsibilities, and
obligations under the Plan and Trust Agreement, and shall not be
responsible for any act or failure to act of another fiduciary. A
fiduciary may serve in more than one fiduciary capacity with respect to
the Plan.
15.2 Powers and Responsibilities of the Plan Administrator.
(a) Administration of the Plan. The Plan Administrator shall
have all powers necessary to administer the Plan, including the power to
construe and interpret the Plan documents; to decide all questions
relating to an individual's eligibility to participate in the Plan; to
approve and insure the repayment of any loan to a Participant under the
Plan; to resolve any claim for benefits in accordance with Section 15.6;
and to appoint or employ advisors, including legal counsel, to render
advice with respect to any of the Plan Administrator's responsibilities
under the Plan. Any construction, interpretation, or application of the
Plan by the Plan Administrator shall be final, conclusive, and binding.
All actions by the Plan Administrator shall be taken pursuant to uniform
standards applied to all persons similarly situated. The Plan
Administrator shall have no power to add to, subtract from, or modify any
of the terms of the Plan, or to change or add to any benefits provided by
the Plan, or to waive or fail to apply any requirements of eligibility for
a benefit under the Plan.
(b) Records and Reports. The Plan Administrator shall be
responsible for maintaining sufficient records to reflect the eligibility
computation periods in which an Employee is credited with one or more
Years of Service for purposes of determining his eligibility to
participate in the Plan, and the Compensation of each Participant for
purposes of determining the amount of contributions that may be made by
or on behalf of the Participant under the Plan. The Plan Administrator
shall be responsible for submitting all required reports and notifications
relating to the Plan to Participants or their Beneficiaries, the Internal
Revenue Service and the Department of Labor.
(c) Furnishing Trustee with Instructions. The Plan
Administrator shall be responsible for furnishing the Trustee with written
instructions regarding all contributions to the Trust, all distributions
to Participants in accordance with Article 10, all withdrawals by
Participants in accordance with Article 12, all loans to Participants in
accordance with Article 13, and all purchases of life insurance in
accordance with Article 14. In addition, the Plan Administrator shall be
responsible for furnishing the Trustee with any further information
respecting the Plan which the Trustee may request for the performance of
its duties or for the purpose of making any returns to the Internal
Revenue Service or Department of Labor as may be required of the Trustee.
(d) Rules and Decisions. The Plan Administrator may adopt such
rules as it deems necessary, desirable, or appropriate in the
administration of the Plan. All rules and decisions of the Plan
Administrator shall be applied uniformly and consistently to all
Participants in similar circumstances. When making a determination or
calculation, the Plan Administrator shall be entitled to rely upon
information furnished by a Participant or Beneficiary, the Employer, the
legal counsel of the Employer, or the Trustee.
(e) Application and Forms for Benefits. The Plan Administrator
may require a Participant or Beneficiary to complete and file with it an
application for a benefit, and to furnish all pertinent information
requested by it. The Plan Administrator may rely upon all such
information so furnished to it, including the Participant's or
Beneficiary's current mailing address.
(f) Facility of Payment. Whenever, in the Plan Administrator's
opinion, a person entitled to receive a payment of a benefit or
installment thereof is under a legal disability or is incapacitated in any
way so as to be unable to manage his financial affairs, it may direct the
Trustee to make payments to the legal representative or court appointed
guardian of such person.
15.3 Allocation of Duties and Responsibilities. The Plan
Administrator may by written instrument allocate among its members or
employees any of its duties and responsibilities not already allocated
under the Plan or may designate persons other than members or employees
to carry out any of the Plan Administrator's duties and responsibilities
under the Plan. Any such duties or responsibilities thus allocated must
be described in the written instrument. If a person other than an
Employee of the Employer is so designated, such person must acknowledge
in writing his acceptance of the duties and responsibilities allocated to
him.
15.4 Appointment of the Plan Administrator. The Employer shall
designate in the Adoption Agreement the Plan Administrator who shall
administer the Employer's Plan. Such Plan Administrator may consist of
an individual, a committee of two or more individuals, whether or not, in
either such case, the individual or any of such individuals are Employees
of the Employer, a consulting firm or other independent agent, the Trustee
(with its consent), or the Employer itself. The Plan Administrator shall
be charged with the full power and the responsibility for administering
the Plan in all its details. If no Plan Administrator has been appointed
by the Employer, or if the person designated as Plan Administrator by the
Employer is not serving as such for any reason, the Employer shall be
deemed to be the Plan Administrator of the Plan. The Plan Administrator
may be removed by the Employer, or may resign by giving notice in writing
to the Employer, and in the event of the removal, resignation, or death,
or other termination of service by the Plan Administrator, the Employer
shall, as soon as practicable, appoint a successor Plan Administrator,
such successor thereafter to have all of the rights, privileges, duties,
and obligations of the predecessor Plan Administrator.
15.5 Expenses. The Employer shall pay all expenses authorized and
incurred by the Plan Administrator in the administration of the Plan
except to the extent such expenses are paid from the Trust.
15.6 Liabilities. The Plan Administrator and each person to whom
duties and responsibilities have been allocated pursuant to Section 15.3
may be indemnified and held harmless by the Employer with respect to any
alleged breach of responsibilities performed or to be performed hereunder.
The Employer and each Affiliated Employer shall indemnify and hold
harmless the Sponsor against all claims, liabilities, fines, and
penalties, and all expenses reasonably incurred by or imposed upon him
(including, but not limited to, reasonable attorney's fees) which arise
as a result of actions or failure to act in connection with the operation
and administration of the Plan.
15.7 Claims Procedure.
(a) Filing a Claim. Any Participant or Beneficiary under the
Plan may file a written claim for a Plan benefit with the Plan
Administrator or with a person named by the Plan Administrator to receive
claims under the Plan.
(b) Notice of Denial of Claim. In the event of a denial or
limitation of any benefit or payment due to or requested by any
Participant or Beneficiary under the Plan ("claimant"), claimant shall be
given a written notification containing specific reasons for the denial
or limitation of his benefit. The written notification shall contain
specific reference to the pertinent Plan provisions on which the denial
or limitation of his benefit is based. In addition, it shall contain a
description of any other material or information necessary for the
claimant to perfect a claim, and an explanation of why such material or
information is necessary. The notification shall further provide
appropriate information as to the steps to be taken if the claimant wishes
to submit his claim for review. This written notification shall be given
to a claimant within 90 days after receipt of his claim by the Plan
Administrator unless special circumstances require an extension of time
for processing the claim. If such an extension of time for processing is
required, written notice of the extension shall be furnished to the
claimant prior to the termination of said 90-day period, and such notice
shall indicate the special circumstances which make the postponement
appropriate.
(c) Right of Review. In the event of a denial or limitation
of his benefit, the claimant or his duly authorized representative shall
be permitted to review pertinent documents and to submit to the Plan
Administrator issues and comments in writing. In addition, the claimant
or his duly authorized representative may make a written request for a
full and fair review of his claim and its denial by the Plan
Administrator; provided, however, that such written request must be
received by the Plan Administrator (or its delegate to receive such
requests) within 60 days
after receipt by the claimant of written notification of the denial or
limitation of the claim. The 60-day requirement may be waived by the Plan
Administrator in appropriate cases.
(d) Decision on Review. A decision shall be rendered by the
Plan Administrator within 60 days after the receipt of the request for
review, provided that where special circumstances require an extension
of time for processing the decision, it may be postponed on written notice
to the claimant (prior to the expiration of the initial 60-day period) for
an additional 60 days, but in no event shall the decision be rendered more
than 120 days after the receipt of such request for review. Any decision
by the Plan Administrator shall be furnished to the claimant in writing
and shall set forth the specific reasons for the decision and the specific
plan provisions on which the decision is based.
(e) Court Action. No Participant or Beneficiary shall have the
right to seek judicial review of a denial of benefits, or to bring any
action in any court to enforce a claim for benefits prior to filing a
claim for benefits or exhausting his rights to review under this Section
13.7.
ARTICLE 16
AMENDMENT, TERMINATION, AND MERGER
16.1 Amendments.
(a) The Employer hereby irrevocably delegates (except as
provided in (b) below), to the Sponsor the right and power to amend the
Plan and the Trust Agreement at any time and from time to time, and the
Employer by adopting the Plan and entering into the Trust Agreement, shall
be deemed to have consented to any such amendment. The Sponsor shall
notify the Employer of any amendment to the Plan and the Trust Agreement.
(b) The Employer reserves the right at any time to amend or
discontinue the Plan or the Trust Agreement or give notice of termination
by delivering to the Trustee a written copy of such change signed by the
Employer; provided that, if any such amendment by the Employer is not an
amendment permitted under the Adoption Agreement or under paragraph (c)
below, the Plan shall no longer be deemed part of this prototype Plan.
In the event of such an amendment not described in paragraph (c), the
Employer must obtain a separate determination letter from the Internal
Revenue Service to continue reliance on the Plan's qualified status. No
such amendment may:
(i) violate the exclusive benefit limitations of Section
15.1;
(ii) violate the anti-cutback rules of Section 8.4;
(iii) vest in the Employer any interest or control over any
assets of the Trust;
or
(iv) change any of the rights, duties and powers of the
Trustee without the Trustee's written consent.
(c) The Employer may from time to time make any amendment to
the Plan (1) to change the choice of options in the Adoption Agreement,
(2) to add overriding language in the Adoption Agreement when such
language is necessary to satisfy Section 415 or Section 416 of the Code
because of the required aggregation of multiple plans, and (3) to add
certain model amendments published by the Internal Revenue Service which
specifically provide that their adoption will not cause the Plan to be
treated as individually designed.
(d) An Employer that amends the Plan for any reason other than
as specified in paragraph (c) above, including an amendment with respect
to a waiver of the minimum funding requirement 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.
16.2 Plan Termination; Discontinuance of Employer Contributions.
(a) The Employer may terminate the Plan at any time in whole
or in part. In the event of the dissolution, merger, consolidation, or
reorganization of the Employer, the Plan shall automatically terminate and
the Trust shall be liquidated unless the Plan is continued by a successor
employer in accordance with Section 16.3.
(b) Upon the complete or partial termination of the Plan or the
complete discontinuance of Employer Contributions under the Plan, the
separate Account of all Participants affected thereby shall become fully
vested and nonforfeitable, and the Plan Administrator shall direct the
Trustee to distribute assets remaining in the Trust, after payment of any
expenses properly chargeable thereto, to Participants or their
Beneficiaries unless directed by the Employer to continue the Trust and
distribute Participant's accounts at such other time and in such other
nondiscriminatory manner as the Employer shall designate, provided that
such distribution shall be in accordance with the provisions of Articles
9 and 10. Upon the completion of such distribution, the Trustee shall be
relieved of all further liability with respect to the assets so
distributed.
16.3 Successor Employer. In the event of the dissolution, merger,
consolidation, or reorganization of the Employer, provision may be made
by which the Plan and Trust shall be continued by the successor employer,
in which case such successor employer shall be substituted for the
Employer under the Plan. The substitution of the successor employer shall
constitute an assumption of Plan liabilities by the successor employer,
and the successor employer shall have all powers, duties, and
responsibilities of the Employer under the Plan.
16.4 Merger, Consolidation, or Transfer. There shall be no merger
or consolidation of the Plan with, or transfer of assets or liabilities
of the Plan to, any other plan of deferred compensation maintained or to
be established for the benefit of all or some of the Participants of the
Plan, unless each Participant would (if either this Plan or such other
plan then terminated) receive a benefit immediately after the merger,
consolidation or transfer which is equal to or greater than the benefit
the Participant would have been entitled to receive immediately before the
merger, consolidation, or transfer (if this Plan had then terminated).
ARTICLE 17
MISCELLANEOUS
17.1 Exclusive Benefit of Participants and Beneficiaries.
(a) All assets of the Trust shall be retained for the exclusive
benefit of Participants and their Beneficiaries, and shall be used only
to pay benefits to such persons or to pay the fees and expenses of the
Trust. The assets of the Trust shall not revert to the benefit of the
Employer, except as otherwise specifically provided in Section 17.1(b).
(b) To the extent permitted or required by ERISA and the Code,
contributions to the Trust under this Plan are subject to the following
conditions:
(i) If a contribution or any part thereof is made to the
Trust by the Employer under a mistake of fact, such contribution or part
thereof shall be returned to the Employer within one year after the date
the contribution is made;
(ii) Contributions to the Trust are specifically
conditioned on the initial qualification of the Plan under Section 401 of
the Code, and in the event the Plan is determined not to meet the initial
qualification requirements of Section 401 of the Code, contributions made
in respect of any period for which such requirements are not met shall be
returned to the Employer within one year after the Plan is determined not
to meet such requirements, but only if application for qualification is
made by the time prescribed by law for filing the Employer's return for
the taxable year for which the Plan is adopted, or such later date as the
Secretary of the Treasury may prescribe; and
(iii) Contributions to the Trust are specifically
conditioned on their deductibility under the Code and, to the extent a
deduction is disallowed for any such contribution, such amount shall be
returned to the Employer within one year after the date of the
disallowance of the deduction.
17.2 Nonguarantee of Employment. Nothing contained in this Plan
shall be construed as a contract of employment between the Employer and
any Employee, or as a right of any Employee to be continued in the
employment of the Employer, or as a limitation of the right of the
Employer to discharge any of its Employees, with or without cause.
17.3 Rights to Trust Assets. No Employee, Participant, or
Beneficiary shall have any right to, or interest in, any assets of the
Trust upon termination of employment or otherwise, except as provided
under the Plan. All payments of benefits under the Plan shall be made
solely out of the assets of the Trust.
17.4 Nonalienation of Benefits. Except as provided under Article
13 with respect to Plan loans, benefits payable under the Plan shall not
be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, garnishment, execution, or levy
of any kind, voluntary or involuntary; provided, however, that the Trustee
shall not be hereby precluded from complying with a qualified domestic
relations order described in Section 414(p) of the Code, or any domestic
relations order entered before January 1, 1985, requiring deduction from
distributions to a recipient in pay status for alimony or support
payments. Any attempt to anticipate, alienate, sell, transfer, assign,
pledge, encumber, charge, or otherwise dispose of any right to benefits
payable hereunder shall be void. The Trust shall not in any manner be
liable for, or subject to, the debts, contracts, liabilities, engagements,
or torts of any person entitled to benefit hereunder.
17.5 Aggregation Rules.
(a) Except as provided in Article 6, all employees of the
Employer or any Affiliated Employer will be treated as employed by a
single employer.
(b) 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.
(c) 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.
(d) 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, than 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.
(e) For purposes of paragraphs (b), (c) and (d), 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:
(i) own the entire interest in an unincorporated trade or
business, or
(ii) 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 an 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.
17.6 Failure of Qualification. If this Plan or any part of it fails
to attain or retain qualification, such plan will no longer participate
in this prototype paired defined contribution plan and will be considered
an individually designed plan.
17.7 Applicable Law. Except to the extent otherwise required by
ERISA, as amended, this Plan shall be construed and enforced in accordance
with the laws of the state in which the Employer's principal place of
business is located, as specified in the Adoption Agreement.
-------------------------------
(Name of Employer)
By: -------------------------------
(Name and Title)
-------------------------------
(Date)
<PAGE>
TRUST AGREEMENT
The Employer has established a Plan for the benefit of Participants
therein pursuant to Section 401 of the Internal Revenue Code of 1954. As
part of the Plan the Employer has requested such person or persons
(individual, corporate, or other entity), as may be designated in the
Adoption Agreement, to serve as Trustee pursuant to the Trust established
for the investment of contributions under the Plan upon the terms and
conditions set forth in this Agreement.
Unless the context of this Trust Agreement clearly indicates
otherwise, the terms defined in Article 2 of the Plan entered into by the
Employer, of which this Trust Agreement forms a part, shall, when used
herein, have the same meaning as in the Plan.
ARTICLE I - ACCOUNTS
1.1 Establishing Accounts. The Trustee shall open and maintain a
Trust account for the Plan and, as part thereof, Participants' Accounts
for such individuals as the Plan Administrator shall, from time to time,
give written notice to the Trustee as being Participants in the Plan. The
Trustee shall also open and maintain such other subaccounts as may be
appropriate or desirable to aid in the administration of the Plan.
Separate subaccounts shall be maintained for each Participant and shall
be credited with the contributions made by the Employer and with
forfeitures allocated to each such Participant pursuant to the Plan (and
all earnings thereon). If nondeductible voluntary contributions by
Participants are permitted by the Plan, the Trustee shall open and
maintain as a part of the Trust a separate subaccount for each Participant
who makes such nondeductible voluntary contributions, each such subaccount
to be credited with the Participant's voluntary contributions (and all
earnings attributable to such contributions). If trustee transfers or
rollover contributions from another qualified plan are received, the
Trustee shall open and maintain a separate rollover subaccount for each
Participant, each such subaccount to be credited with the Participant's
trustee transfers or rollover contributions (and all earnings attributable
to such contributions).
1.2 Charges Against Accounts. Upon receipt of written instructions
from the Administrator, the Trustee shall charge the appropriate
subaccount of the Participant for any withdrawals or distributions made
under the Plan and any forfeiture, which may be required under the Plan,
of unvested interests attributable to Employer Contributions. The Plan
Administrator will give written instructions to the Trustee specifying the
manner in which Employer Contributions and any forfeiture of the nonvested
portion of Accounts, as allocated by the Plan Administrator in accordance
with the provisions of the Plan, are to be credited to the various
Accounts maintained for Participants.
1.3 Prospectus to be Provided. The Plan Administrator shall ensure
that a Participant who makes a nondeductible voluntary contribution has
previously received or receives a copy of the then current prospectus
relating to the Shares. Delivery of such a nondeductible voluntary
contribution, pursuant to the provisions of the Plan by the Plan
Administrator to the Trustee shall entitle the Trustee to assume that the
Participant has received such a prospectus.
ARTICLE II - RECEIPT OF CONTRIBUTIONS
The Trustee shall accept and hold in the Trust contributions made by
the Employer and Participants under the Plan. The Administrator shall
give written instructions to the Trustee specifying the Participants'
Accounts to which contributions are to be credited, the amount of each
such credit which is attributable to Employer Contributions, and the
amount, if any, which is attributable to the Participant's nondeductible
voluntary contributions. If written instructions are not received by the
Trustee, or if such instructions are received but are deemed by the
Trustee to be unclear, upon notice to the Employer, the Trustee may elect
to hold all or part of any such contribution in cash, without liability
for rising security prices or distributions made, pending receipt by it
from the Plan Administrator of written instructions or other
clarification, or the Trustee may return the contribution to the Employer.
If any contributions or earnings are less than any minimum which the then
current prospectus for the Shares requires, the Trustee may hold the
specified portion of contributions or earnings in cash, without interest,
until such time as the proper amount has been contributed or earned so
that the investment in the Shares required under the Plan may be made.
ARTICLE III - INVESTMENT POWERS OF THE TRUSTEE
3.1 Investment of Account Assets. The Trustee shall invest the
amount of each contribution made hereunder and all earnings on the Trust
in full and fractional Shares in accordance with the current prospectus
for such Shares, in such amounts and proportions as shall from time to
time be designated by the Plan Administrator on forms provided by the
Sponsor, and shall credit such Shares to the Accounts of each Participant
on whose behalf or by whom the contributions are made and any forfeitures
are allocated. All dividends and capital gain distributions received on
the Shares held by the Trustee in each Account, shall, if received in
cash, be reinvested in such Shares in accordance with the current
prospectus for such Shares and shall in any event be credited to such
account. If any distribution on Shares may be received at the election
of the shareholder in additional Shares, the Trustee shall so elect. The
Trustee shall deliver, or cause to be executed and delivered, to the Plan
Administrator all notices, prospectuses, financial statements, proxies,
and proxy soliciting materials relating to Shares held hereunder. The
Trustee shall not vote any of the Shares held hereunder, except in
accordance with the written instructions of the Plan Administrator. If
no such written instructions are received, such Shares shall not be voted.
The obligations of the Trustee hereunder may be delegated by it as
provided in Sections 9.1 and 9.2.
The Trustee shall sell Shares and purchase Shares to accomplish any
change in investments desired by the Employer as indicated on any amended
Adoption Agreement or other instruction in accordance with the terms of
the Plan.
Notwithstanding the above, if periodic payments are being made to a
Participant pursuant to Article IV hereof, any dividends received on
Shares held in such Participant's Account, which dividends are invested
at an offering price which includes a sales charge, need not be invested
in additional Shares but may be held for distribution to the Participant
in periodic payments. In such instances, the Trustee may make any
election necessary to receive any such dividends in cash.
3.2 Directed Investments. When so instructed by the Plan
Administrator, the Trustee shall invest all or any portion of the
individual Account of any Participant in accordance with the direction of
the Employer or such Participant in lieu of participation in the general
assets of the Trust. Such directed investments shall be accounted for
separately for each Participant. Except as otherwise provided herein, the
Trustee shall not have any discretion, with respect to such directed
investments. Each Participant who directs the investment of his Account
shall be solely and absolutely responsible for the investment or
reinvestment of all directed investment assets held on his behalf in
Trust, and, except as otherwise provided herein, the Trustee shall not
question any such direction, review any securities or other such assets,
or make suggestions with respect to the investment, retention or
disposition of any such assets; provided that
(a) If any contributions are transmitted to or otherwise
received or held as a directed investment asset without
investment directions from the Participant, the Trustee may
retain such amounts in a noninterest-bearing savings account in
a federally insured institution for the benefit of the
Participant;
(b) The Trustee may establish such reasonable rules and
regulations, applied on a uniform basis to all Participants,
with respect to the requirements for, and the form and manner
of, effectuating any transaction with respect to directed
investment assets including, without limitation, minimum
amounts, rules applicable to conversion of directed investments
into general assets of the Trust, and appropriate adjustments
(based on fair market values) to Accounts in order to reflect
any such conversion, as the Trustee shall determine to be
consistent with the purposes of the Plan. Any such rules and
regulations shall be binding upon all persons interested in the
Trust;
(c) The Trustee may establish a procedure for the periodic
review of directed investment assets to determine, in light of
the facts and circumstances reasonably known to the Trustee,
whether any actual or proposed investment of such assets
constitutes or would constitute a prohibited transaction as that
term is defined in sections 406-408 of ERISA and the
corresponding provisions of the Code. If the Trustee determines
that any investment constitutes or would constitute a prohibited
transaction, the Trustee shall promptly communicate this
determination to the Plan Administrator, and shall recommend
that the investment be prevented or disposed of, as the case may
be, and may recommend any other action authorized or required
by law, to prevent or remedy the transaction;
(d) In accordance with and pursuant to uniform and
nondiscriminatory rules established under and in accordance with
the Plan, the Trustee may deny the Plan Administrator's
application to allow a directed investment proposed by a
Participant; and
(e) Notwithstanding anything herein to the contrary, in no
event shall the Trustee engage in any transaction that would be
prohibited under ERISA.
3.3 General Investment Powers. Subject to any investment
limitations or minimum requirements for investment instructions given by
the Employer, the Trustee shall be authorized and empowered to invest and
reinvest all or any part of the Trust in any property, real or personal
or mixed, including, but not being limited to, capital or common stock
(whether voting or nonvoting and whether or not currently paying a
dividend), preferred or preference stock (whether voting or nonvoting or
whether or not currently paying a dividend), shares of regulated
investment companies, convertible securities, corporate and governmental
obligations, leaseholds, ground rents, mortgages, and other interests in
realty, trust, and participation certificates, oil, mineral, or gas
properties, royalty interests or rights, including equipment pertaining
thereto, notes, and other evidences of indebtedness or ownership, secured
or unsecured, contracts, choses in action, and warrants, and other
instruments entitling the owner thereof to subscribe to or purchase any
of the aforesaid. Subject to any investment limitations or requirements
imposed by the Sponsor relating to the type of permissible investments in
the Trust or the minimum percentage of Trust assets to be invested in
Shares, and subject to the provisions of Article VIII hereof, in making
and retaining such investments and reinvestments pursuant hereto, the
Trustee shall not be bound as to the character of any investments by any
statute, rule of court, or custom governing the investment of Trust funds.
3.4 Investment in Combined Funds. If the Trustee is a banking
institution, subject to any investment limitations or minimum requirements
for investment in Shares imposed by the Sponsor, and subject to investment
instructions given by the Employer, it may, subject to the election of the
Sponsor or the Employer, cause funds of this Trust to be invested in its
commingled funds for qualified employee benefit plan trusts and such
commingled funds are hereby adopted and made a part of the Plan of which
this Trust is a part, and any funds of this Trust invested in any such
commingled funds shall be subject to all the provisions thereof, as the
same may be amended from time to time.
3.5 Other Powers of the Trustee. The Trustee is authorized and
empowered with respect to the Trust:
(a) Subject to any investment limitations or minimum
requirements for investment in Shares imposed by the Sponsor,
and subject to investment instructions given by the Employer,
to sell, exchange, convey, transfer, or otherwise dispose of,
either at public or private sale, any property, real or personal
or mixed, at any time held by it, for such consideration and on
such terms and conditions as to credit or otherwise as the
Trustee may deem best;
(b) Subject to the provisions of Section 3.1, to vote in person
or by proxy any stocks, bonds, or other securities held by it;
to exercise any options appurtenant to any stocks, bonds, or
other securities, or to exercise any rights to subscribe for
additional stocks, bonds, or other securities, and to make any
and all necessary payments therefor; to join in, or to dissent
from, and to oppose, the reorganization, consolidation,
liquidation, sale, or merger of corporations, or properties in
which it may be interested as Trustee, upon such terms and
conditions as it may deem wise;
(c) 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;
(d) To register any investment held in the Trust in the name
of the Trust 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;
(e) To employ suitable agents and counsel (who may also be
agents and/or counsel for the Employer or the Sponsor) and to
pay their reasonable expenses and compensation;
(f) To borrow or raise monies for the purpose of the Trust from
any source and, for any sum so borrowed to issue its promissory
note as Trustee and to secure the repayment thereof by pledging
all or any part of the Trust Fund, but nothing herein contained
shall obligate the Trustee to render itself liable individually
for the amount of any such borrowing; and no person loaning
money to the Trustee shall be bound to see to the application
of money loaned or to inquire into the validity or propriety of
any such borrowing.
Each and all of the foregoing powers may be exercised without a court
order or approval. No one dealing with the Trustee need inquire
concerning the validity or propriety of anything that is done or need see
to the application of any money paid or property transferred to or upon
the order of the Trustee.
3.6 General Powers. The Trustee shall have all of the powers
necessary or desirable to do all acts, take all such proceedings, and
exercise all such rights and privileges, whether or not expressly
authorized herein, which it may deem necessary or proper for the
administration and protection of the property of the Trust and to
accomplish any action provided for in the Plan.
ARTICLE IV - DISTRIBUTIONS FROM A PARTICIPANT'S ACCOUNT
Distributions from the Trust shall be made by the Trustee in
accordance with proper written directions of the Plan Administrator in
accordance with the provisions of Section 15.2 of the Plan, and the Plan
Administrator shall have the sole responsibility for determining that the
directions given conform to provisions of the Plan and applicable law,
including (without limitation) responsibility for calculating the amounts
payable to a Participant pursuant to Article 10 of the Plan, and for
determining the proper person to whom benefits are payable under the Plan.
ARTICLE V - REPORTS OF THE TRUSTEE AND THE PLAN ADMINISTRATOR
The Trustee shall keep accurate and detailed records of all receipts,
investments, disbursements, and other transactions required to be
performed hereunder with respect to the Trust. The Trustee shall file
with the Plan Administrator a written report or reports reflecting the
receipts, disbursements, and other transactions effected by it with
respect to the Trust during such Plan Year and the assets and liabilities
of the Trust at the close of the Plan Year. Such report or reports shall
be open to inspection by any Participant for a period of one-hundred
eighty (180) days immediately following the date on which it is filed with
the Plan Administrator. Except as otherwise prescribed by ERISA, upon the
expiration of such one-hundred eighty (180) day period, the Trustee shall
be forever released and discharged from all liability and accountability
to anyone with respect to its acts, transactions, duties, obligations, or
responsibilities as shown in or reflected by such report, except with
respect to any such acts or transactions as to which the Plan
Administrator shall have filed written objections with the Trustee within
one-hundred eighty (180) day period, and except for willful misconduct or
lack of good faith on the part of the Trustee.
ARTICLE VI - TRUSTEE'S FEES AND EXPENSES OF THE TRUST
The Trustee's fees for performing its duties hereunder shall be such
reasonable amounts as shall be respectively established by them from time
to time. The Trustee shall furnish the Employer with its current schedule
of fees and shall give written notice to the Employer whenever its fees
are changed or revised. Such fees, any taxes of any kind whatsoever which
may be levied or assessed upon or in respect of the Trust, to the extent
incurred by the Trustee, and any and all expenses incurred by the Trustee
in the performance of its duties, including fees for legal services
rendered to the Trustee, shall, unless paid by the Employer, be paid from
the Trust in the manner provided in the Plan.
Unless paid by the Employer, all fees of the Trustee and taxes and
other expenses charged to a Participant's Account may be collected by the
Trustee from the amount of any contribution to be credited or distribution
to be charged to such Account or may be paid by redeeming or selling
assets credited to such Account.
ARTICLE VII - DUTIES OF THE EMPLOYER AND THE PLAN ADMINISTRATOR
7.1 Information and Data to be Furnished the Trustee. In addition
to making the contributions called for in Article II hereof, the Employer,
through the Plan Administrator, agrees to furnish the Trustee with such
information and data relative to the Plan as is necessary for the proper
administration of the Trust established hereunder.
7.2 Limitation of Duties. Neither the Employer nor any of its
officers, directors, or partners, nor the Plan Administrator shall have
any duties or obligations with respect to this Trust Agreement, except
those expressly set forth herein and in the Plan.
ARTICLE VIII - LIABILITY OF THE TRUST
8.1 Trustee's Liability.
(a) The Employer shall indemnify and save the Trustee
(including its affiliates, representatives and agents) harmless
from and against any liability, cost or other expense,
including, but not limited to, the payment of attorneys' fees
that the Trustee may incur in connection with this Agreement or
the Plan unless such liability, cost or other expense (whether
direct or indirect) arises from the Trustee's own willful
misconduct or gross negligence. The Employer recognizes that
a burden of litigation may be imposed upon the Trustee as a
result of some act or transaction for which it has no
responsibility or over which it has no control under this
Agreement. Therefore, the Employer agrees to indemnify and hold
harmless and, if requested, defend the Trustee (including its
affiliates, representatives and agents) from any expenses
(including counsel fees, liabilities, claims, damages, actions,
suits or other charges) incurred by the Trustee in prosecuting
or defending against any such litigation.
(b) The Trustee shall not be liable for, and the Employer will
indemnify and hold harmless the Trustee (including its
affiliates, representatives and agents) from and against all
liability or expense (including counsel fees) because of (i) any
investment action taken or omitted by the Trustee in accordance
with any direction of the Employer or a Participant, or
investment inaction in the absence of directions from the
Employer or a Participant or (ii) any investment action taken
by the Trustee pursuant to an order to purchase or sell
securities placed by the Employer or a Participant directly with
a broker, dealer or issuer. It is understood that although,
when the Trustee is subject to the direction of the Employer or
a Participant the Trustee will perform certain ministerial
duties with respect to the portion of the Fund subject to such
direction (the "Directed Fund"), such duties do not involve the
exercise of any discretionary authority or other authority to
manage and control assets of the Directed Fund and will be
performed in the normal course of business by officers and
employees of the Trustee or its affiliates, representatives or
agents who may be unfamiliar with investment management. It is
agreed that the Trustee is not undertaking any duty or
obligation, express or implied, to review, and will not be
deemed to have any knowledge of or responsibility with respect
to, any transaction involving the investment of the Directed
Fund as a result of the performance of its ministerial duties.
Therefore, in the event that "knowledge" of the Trustee shall
be a prerequisite to imposing a duty upon or determining
liability of the Trustee under the Plan or this Trust or any law
or regulation regulating the conduct of the Trustee, with
respect to the Directed Fund, as a result of any act or omission
of the Employer or any Participant, or as a result of any
transaction engaged in by any of them, then the receipt and
processing of investment orders and other documents relating to
Plan assets by an officer or other employee of the Trustee or
its affiliates, representatives or agents engaged in the
performance of purely ministerial functions shall not constitute
"knowledge" of the Trustee.
(c) Notwithstanding the foregoing provisions of this Trust
Agreement, the Trustee shall discharge its duties hereunder 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. Any
investments selected by the Trustee without specific direction
from the Employer shall be selected to diversify the investments
of the Trust Fund so as to minimize the risk of large losses,
unless in the circumstances it is clearly prudent not to do so.
The Trustee shall perform its duties in accordance with this
Trust Agreement insofar as this Trust Agreement is consistent
with the provisions of ERISA. To the extent not prohibited by
ERISA, the Trustee shall not be responsible in any way for any
action or omission of the Employer or the Plan Administrator
with respect to the performance of their duties and obligations
set forth in the Plan. To the extent not prohibited by ERISA,
the Trustee shall not be responsible for any action or omission
of any of its agents, or with respect to reliance upon advice
of its counsel (whether or not such counsel is also counsel to
the Employer or to the Plan Administrator), provided that such
agents or counsel were prudently chosen by the Trustee and that
the Trustee relied in good faith upon the action of such agent
or the advice of such counsel. The Trustee shall be indemnified
and held harmless by the Employer against liability or losses
occurring by reason of any act or omission of the Trustee under
this Trust Agreement, unless such act or omission is due to its
own willful nonfeasance, malfeasance, or misfeasance or other
breach of duty under ERISA, to the extent that such
indemnification does not violate ERISA or any other Federal or
state laws.
ARTICLE IX - DELEGATION OF POWERS
9.1 Delegation by the Trustee. With respect to Shares held by the
Plan, the Trustee hereby delegates to the Custodian designated by the
Sponsor the functions designated in (a) through (d) hereunder, other than
the investment, management, or control of the Trust assets. With respect
to assets other than Shares, the Trustee may delegate in writing pursuant
to a procedure permitted and established by the Sponsor, to a person
(individual, corporate, or other entity) designated by the Sponsor as an
agent or custodian, any of the powers or functions of the Trustee
hereunder other than the investment, management or control of the Trust
assets, including (without limitation):
(a) Custodianship of all or any part of the assets of the
Trust;
(b) Maintaining and accounting for the Trust and for
Participants and other Accounts as a part thereof;
(c) Distribution of benefits as directed by the Plan
Administrator; and
(d) Preparation of the annual report on the status of the
Trust.
The agent or custodian so appointed may act as agent for the Trustee,
without investment responsibility, for fees to be mutually agreed upon by
the Employer and the agent or custodian and paid in the same manner as
Trustee's fees. The Trustee shall not be responsible for any act or
omission of the agent or custodian arising from any such delegation,
except to the extent provided in Section 8.1.
9.2 Delegation with Employer Approval. The Trustee (whether or not
a bank or trust company) and the Employer may, by mutual agreement,
arrange for the delegation by the Trustee to the Plan Administrator or any
agent of the Employer of any powers or functions of the Trustee hereunder
other than the investment and custody of the Trust assets. The Trustee
shall not be responsible for any act or omission of such person or persons
arising from any such delegation, except to the extent provided in Article
VIII.
ARTICLE X - AMENDMENT
As provided in Section 16.1 of the Plan, and subject to the
limitations set forth therein, the prototype Adoption Agreement, Plan, and
Trust Agreement may be amended at any time, in whole or in part, by the
Sponsor. The Trustee hereby delegates authority to the Sponsor, and to
any successor Sponsor, to so amend the prototype Adoption Agreement, Plan,
and Trust Agreement and the Trustee hereby agrees that it shall be deemed
to have consented to any amendment so made which does not increase the
duties of the Trustee without its consent.
ARTICLE XI - RESIGNATION OR REMOVAL OF TRUSTEE
The Trustee may resign at any time upon thirty (30) days notice in
writing to the Employer, and may be removed by the Employer at any time
upon thirty (30) days notice in writing to the Trustee. Upon such
resignation or removal, the Employer shall appoint a successor Trustee or
Trustees. Upon receipt by the Trustee of written acceptance of such
appointment by the successor Trustee, the Trustee shall transfer and pay
over to such successor the assets of the Trust and all records pertaining
thereto, provided that any successor Trustee shall agree not to dispose
of any such records without the Trustee's consent. The successor Trustee
shall be entitled to rely on all accounts, records, and other documents
received by it from the Trustee, and shall not incur any liability
whatsoever for such reliance. The Trustee is authorized, however, to
reserve such sum of money or property as it may deem advisable for payment
of all its fees, compensation, costs, and expenses, or for payment of any
other liabilities constituting a charge on or against the assets of the
Trust or on or against the Trustee, with any balance of such reserve
remaining after the payment of all such items to be paid over to the
successor Trustee. Upon the assignment, transfer, and payment over of the
assets of the Trust, and obtaining a receipt thereof from the successor
Trustee, the Trustee shall be released and discharged for any and all
claims, demands, duties, and obligations arising out of the Trust and its
management thereof, excepting only claims based upon the Trustee's willful
misconduct or lack of good faith. The successor Trustee shall hold the
assets paid over to it under terms similar to those of this Agreement that
it qualify under Section 401 of the Code. If within (30) days after the
Trustee's resignation or removal, the Employer has not appointed a
successor Trustee which has accepted such appointment, the Trustee shall,
unless it elects to terminate the Trust pursuant to Article XII, appoint
such successor itself.
ARTICLE XII - TERMINATION OF THE TRUST
12.1 Term of the Trust. This Trust shall continue as to the
Employer so long as the Plan is in full force and effect. If the Plan
ceases to be in full force and effect, this Trust shall thereupon
terminate unless expressly extended by the Employer.
12.2 Termination by the Trustee. The Trustee may elect to terminate
the Trust if within thirty (30) days after its resignation or removal
pursuant to Article XI the Employer has not appointed a successor Trustee
which has accepted such appointment. Termination of the Trust shall be
effected by distributing all assets thereof to the Participants or other
persons entitled thereto pursuant to the direction of the Plan
Administrator (or in the absence of such direction, as determined by the
Trustee) as provided in Section 16.2 of the Plan, subject to the Trustee's
right to reserve funds as provided in Article XI hereof. Upon the
completion of such distribution, the Trustee shall be relieved from all
further liability with respect to all amounts so paid, other than any
liability arising out of the Trustee's willful misconduct or lack of good
faith.
ARTICLE XIII - MISCELLANEOUS
13.1 No Diversion of Assets. At no time shall it be possible for
any part of the assets of the Trust to be used for or diverted to purposes
other than for the exclusive benefit of Participants and their
beneficiaries or revert to the Employer, except as specifically provided
in the Plan or this Agreement.
13.2 Notices. Any notice from the Trustee to the Employer or from
the Employer to the Trustee provided for in the Plan and Trust shall be
effective if sent by first class mail at their respective last address of
record.
13.3 Multiple Trustees. In the event that there shall be two (2)
or more Trustees serving hereunder, the trustees shall act by majority
vote, but any action taken or decision made by any one of such Trustees
may be relied upon as if taken or made by a majority of them with the same
effect as if all had joined therein, if there be more than two (2), or
unanimously if there be two (2).
13.4 Conflict with Plan. In the event of any conflict between the
provisions of the Plan and those of this Agreement, the former shall
prevail.
13.5 Applicable Law. Except to the extent otherwise required by
ERISA, as amended, this Agreement shall be construed in accordance with
the laws of the state where the Trustee has its principal place of
business, as specified in the Adoption Agreement.
AMENDMENT NO. 1
TO THE OPPENHEIMERFUNDS
RETIREMENT PLAN BASIC PLAN DOCUMENT (No. 02)
The Basic Plan Document (No. 02) is hereby amended by the word-for-
word adoption of the model language contained in Revenue Procedure 93-12,
for distributions made on or after January 1, 1993, as follows:
Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a Distributee's election under this provision, 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.
Definitions
(a) 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
(10) years or more; any distribution to the extent such distribution is
required under Section 401(a)(9) of the Code; and the portion of any
distribution that is not includable in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to
employer securities).
(b) Eligible Retirement Plan. An Eligible Retirement Plan is an
individual retirement account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of the Code, or a qualified trust
described in Section 401(a) of the Code, that accepts the Distributee's
Eligible Rollover Distribution. However, in the case of an Eligible
Rollover Distribution to the surviving spouse, an Eligible Retirement Plan
is an individual retirement account or individual retirement annuity.
(c) Distributee. A Distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's surviving
spouse and the Employee's or former Employee's spouse or former spouse who
is the alternate payee under a qualified domestic relations order, as
defined in Section 414(p) of the Code, are Distributees with regard to the
interest of the spouse or former spouse.
(d) Direct Rollover. A Direct Rollover is a payment by the Plan to
the Eligible Retirement Plan specified by the Distributee.
SECOND
The Basic Plan Document (No. 02) is hereby amended by the word-for-
word adoption of the model language contained in Revenue Procedure 94-13
as follows:
In addition to other applicable limitations set forth in the plan,
and notwithstanding any other provision of the plan to the contrary, for
plan years beginning on or after January 1, 1994, the annual compensation
of each employee taken into account under the plan shall not exceed the
Omnibus Budget Reconciliation Act of 1993 ("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
consists of fewer than 12 months, the OBRA '93 annual compensation limit
will be multiplied by a fraction, the numerator of which is the number of
months in the determination period, and the denominator of which is 12.
For plan years beginning on or after January 1, 1994, any reference
in this plan to the limitation under Section 401(a)(17) of the Code shall
mean the OBRA '93 annual compensation limit set forth in this provision.
If compensation for any prior determination period is taken into
account in determining an employee's benefits accruing in the current plan
year, the compensation for that prior determination period is subject to
the OBRA '93 annual compensation limit in effect for that prior
determination period. For this purpose, for determination periods
beginning before the first day of the first plan year beginning on or
after January 1, 1994, the OBRA '93 annual compensation limit is $150,000.
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
WITH
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
FOR CLASS B SHARES OF
OPPENHEIMER MORTGAGE INCOME FUND
DISTRIBUTION AND SERVICE PLAN AND AGREEMENT (the "Plan") dated the 10th
day of February, 1994 by and between OPPENHEIMER MORTGAGE INCOME FUND (the
"Fund") and OPPENHEIMER FUNDS DISTRIBUTOR, INC. (the "Distributor").
1. The Plan. This Plan is the Fund's written distribution and service
plan for Class B shares of the Fund (the "Shares"), contemplated by Rule
12b-1 (the "Rule") under the Investment Company Act of 1940 (the "1940
Act"), pursuant to which the Fund will compensate the Distributor for a
portion of its costs incurred in connection with the distribution of
Shares, and the personal service and maintenance of shareholder accounts
that hold Shares ("Accounts"). The Fund may act as distributor of
securities of which it is the issuer, pursuant to the Rule, according to
the terms of this Plan. The Distributor is authorized under the Plan to
pay "Recipients," as hereinafter defined, for rendering (1) distribution
assistance in connection with the sale of Shares and/or (2) administrative
support services with respect to Accounts. Such Recipients are intended
to have certain rights as third-party beneficiaries under this Plan. The
terms and provisions of this Plan shall be interpreted and defined in a
manner consistent with the provisions and definitions contained in (i) the
1940 Act, (ii) the Rule, (iii) Article III, Section 26, of the Rules of
Fair Practice of the National Association of Securities Dealers, Inc., or
its successor (the "NASD Rules of Fair Practice") and (iv) any conditions
pertaining either to distribution-related expenses or to a plan of
distribution, to which the Fund is subject under any order on which the
Fund relies, issued at any time by the Securities and Exchange Commission.
2. Definitions. As used in this Plan, the following terms shall have the
following meanings:
(a)"Recipient" shall mean any broker, dealer, bank or other
institution which: (i) has rendered assistance (whether direct,
administrative or both) in the distribution of Shares or has provided
administrative support services with respect to Shares held by
Customers (defined below) of the Recipient; (ii) shall furnish the
Distributor (on behalf of the Fund) with such information as the
Distributor shall reasonably request to answer such questions as may
arise concerning the sale of Shares; and (iii) has been selected by
the Distributor to receive payments under the Plan. Notwithstanding
the foregoing, a majority of the Fund's Board of Trustees (the
"Board") who are not "interested persons" (as defined in the 1940 Act)
and who have no direct or indirect financial interest in the operation
of this Plan or in any agreements relating to this Plan (the
"Independent Trustees") may remove any broker, dealer, bank or other
institution as a Recipient, whereupon such entity's rights as a third-
party beneficiary hereof shall terminate.
(b)"Qualified Holdings" shall mean, as to any Recipient, all Shares
owned beneficially or of record by: (i) such Recipient, or (ii) such
customers, clients and/or accounts as to which such Recipient is a
fiduciary or custodian or co-fiduciary or co-custodian (collectively,
the "Customers"), but in no event shall any such Shares be deemed
owned by more than one Recipient for purposes of this Plan. In the
event that two entities would otherwise qualify as Recipients as to
the same Shares, the Recipient which is the dealer of record on the
Fund's books shall be deemed the Recipient as to such Shares for
purposes of this Plan.
3. Payments for Distribution Assistance and Administrative Support
Services.
(a)The Fund will make payments to the Distributor, (i) within forty-
five (45) days of the end of each calendar quarter, in the aggregate
amount of 0.0625% (0.25% on an annual basis) of the average during the
calendar quarter of the aggregate net asset value of the Shares
computed as of the close of each business day (the "Service Fee"),
plus (ii) within ten (10) days of the end of each month, in the
aggregate amount of 0.0625% (0.75% on an annual basis) of the average
during the month of the aggregate net asset value of Shares computed
as of the close of each business day (the "Asset-Based Sales Charge")
outstanding for six years or less (the "Maximum Holding Period").
Such Service Fee payments received from the Fund will compensate the
Distributor and Recipients for providing administrative support
services of the type approved by the Board with respect to Accounts.
Such Asset-Based Sales Charge payments received from the Fund will
compensate the Distributor and Recipients for providing distribution
assistance in connection with the sales of Shares.
The administrative support services in connection with the Accounts
to be rendered by Recipients may include, but shall not be limited to,
the following: answering routine inquiries concerning the Fund,
assisting in the establishment and maintenance of accounts or sub-
accounts in the Fund and processing Share redemption transactions,
making the Fund's investment plans and dividend payment options
available, and providing such other information and services in
connection with the rendering of personal services and/or the
maintenance of Accounts, as the Distributor or the Fund may reasonably
request.
The distribution assistance in connection with the sale of Shares
to be rendered by the Distributor and Recipients may include, but
shall not be limited to, the following: distributing sales literature
and prospectuses other than those furnished to current holders of the
Fund's Shares ("Shareholders"), and providing such other information
and services in connection with the distribution of Shares as the
Distributor or the Fund may reasonably request.
It may be presumed that a Recipient has provided distribution
assistance or administrative support services qualifying for payment
under the Plan if it has Qualified Holdings of Shares to entitle it to
payments under the Plan. In the event that either the Distributor or
the Board should have reason to believe that, notwithstanding the
level of Qualified Holdings, a Recipient may not be rendering
appropriate distribution assistance in connection with the sale of
Shares or administrative support services for Accounts, then the
Distributor, at the request of the Board, shall require the Recipient
to provide a written report or other information to verify that said
Recipient is providing appropriate distribution assistance and/or
services in this regard. If the Distributor still is not satisfied,
it may take appropriate steps to terminate the Recipient's status as
such under the Plan, whereupon such entity's rights as a third-party
beneficiary hereunder shall terminate.
(b)The Distributor shall make service fee payments to any Recipient
quarterly, within forty-five (45) days of the end of each calendar
quarter, at a rate not to exceed 0.0625% (0.25% on an annual basis) of
the average during the calendar quarter of the aggregate net asset
value of Shares computed as of the close of each business day,
constituting Qualified Holdings owned beneficially or of record by the
Recipient or by its Customers for a period of more than the minimum
period (the "Minimum Holding Period"), if any, to be set from time to
time by a majority of the Independent Trustees. Alternatively, the
Distributor may, at its sole option, make service fee payments
("Advance Service Fee Payments") to any Recipient quarterly, within
forty-five (45) days of the end of each calendar quarter, at a rate
not to exceed (i) 0.25% of the average during the calendar quarter of
the aggregate net asset value of Shares, computed as of the close of
business on the day such Shares are sold, constituting Qualified
Holdings sold by the Recipient during that quarter and owned
beneficially or of record by the Recipient or by its Customers, plus
(ii) 0.0625% (0.25% on an annual basis) of the average during the
calendar quarter of the aggregate net asset value of Shares computed
as of the close of each business day, constituting Qualified Holdings
owned beneficially or of record by the Recipient or by its Customers
for a period of more than one (1) year, subject to reduction or
chargeback so that the Advance Service Fee Payments do not exceed the
limits on payments to Recipients that are, or may be, imposed by
Article III, Section 26, of the NASD Rules of Fair Practice. In the
event Shares are redeemed less than one year after the date such
Shares were sold, the Recipient is obligated and will repay to the
Distributor on demand a pro rata portion of such Advance Service Fee
Payments, based on the ratio of the time such shares were held to one
(1) year. The Advance Service Fee Payments described in part (i) of
the preceding sentence may, at the Distributor's sole option, be made
more often than quarterly, and sooner than the end of the calendar
quarter. However, no such payments shall be made to any Recipient for
any such quarter in which its Qualified Holdings do not equal or
exceed, at the end of such quarter, the minimum amount ("Minimum
Qualified Holdings"), if any, to be set from time to time by a
majority of the Independent Trustees. A majority of the Independent
Trustees may at any time or from time to time decrease and thereafter
adjust the rate of fees to be paid to the Distributor or to any
Recipient, but not to exceed the rate set forth above, and/or direct
the Distributor to increase or decrease the Maximum Holding Period,
the Minimum Holding Period or the Minimum Qualified Holdings. The
Distributor shall notify all Recipients of the Minimum Qualified
Holdings, Maximum Holding Period or Minimum Holding Period, if any,
and the rate of payments hereunder applicable to Recipients, and shall
provide each Recipient with written notice within thirty (30) days
after any change in these provisions. Inclusion of such provisions or
a change in such provisions in a revised current prospectus shall
constitute sufficient notice. The Distributor may make Plan payments
to any "affiliated person" (as defined in the 1940 Act) of the
Distributor if such affiliated person qualifies as a Recipient.
(c)The Distributor is entitled to retain from the payments described
in Section 3(a) the aggregate amount of (i) the Service Fee on Shares
outstanding for less than the Minimum Holding Period plus (ii) the
Asset-Based Sales Charge on Shares outstanding for not more than the
Maximum Holding Period, in each case computed as of the close of each
business day during that period and subject to reduction or
elimination of such amounts under the limits to which the Distributor
is, or may become, subject under Article III, Section 26, of the NASD
Rules of Fair Practice. Such amount is collectively referred to as
the "Quarterly Limitation." The distribution assistance and
administrative support services in connection with the sale of Shares
to be rendered by the Distributor may include, but shall not be
limited to, the following: (i) paying sales commissions to any broker,
dealer, bank or other institution that sells Shares, and\or paying
such persons Advance Service Fee Payments in advance of, and\or
greater than, the amount provided for in Section 3(a) of this
Agreement; (ii) paying compensation to and expenses of personnel of
the Distributor who support distribution of Shares by Recipients;
(iii) paying of or reimbursing the Distributor for interest and other
borrowing costs on unreimbursed Carry Forward Expenses (as hereafter
defined) at the rate paid by the Distributor or, if such amounts are
financed by the Distributor from its own resources or by an affiliate,
at the rate of 1% per annum above the prime rate (which shall mean the
most preferential interest rate on corporate loans at large U.S. money
center commercial banks) then being reported in the Eastern edition of
the Wall Street Journal (or if such prime rate is no longer so
reported, such other rate as may be designated from time to time by
the Distributor with the approval of the Independent Trustees); (iv)
other direct distribution costs of the type approved by the Board,
including without limitation the costs of sales literature,
advertising and prospectuses (other than those furnished to current
Shareholders) and state "blue sky" registration expenses; and (v) any
service rendered by the Distributor that a Recipient may render
pursuant to part (a) of this Section 3. The Distributor's costs of
providing the above-mentioned services are hereinafter collectively
referred to as "Distribution and Service Costs." "Carry Forward
Expenses" are Distribution and Service Costs that are not paid in the
fiscal quarter in which they arise because they exceed the Quarterly
Limitation. In the event that the Board should have reason to believe
that the Distributor may not be rendering appropriate distribution
assistance or administrative support services in connection with the
sale of Shares, then the Distributor, at the request of the Board,
shall provide the Board with a written report or other information to
verify that the Distributor is providing appropriate services in this
regard.
(d)The excess in any fiscal quarter of (i) the Quarterly Limitation
plus any contingent deferred sales charge ("CDSC") payments recovered
by the Distributor on the proceeds of redemption of Shares over (ii)
Distribution and Service Costs during that quarter, shall be applied
in the following order of priority: first, to interest on unreimbursed
Carry Forward Expenses, second, to reduce any unreimbursed Carry
Forward Expenses, third, to reduce Distribution and Service Costs
during that quarter, and fourth, to reduce the Asset-Based Sales
Charge payments by the Fund to the Distributor in that quarter. Carry
Forward Expenses shall be carried forward by the Fund until payment
can be made under the Quarterly Limitation.
(e)Under the Plan, payments may be made to Recipients: (i) by
Oppenheimer Management Corporation ("OMC") from its own resources
(which may include profits derived from the advisory fee it receives
from the Fund), or (ii) by the Distributor (a subsidiary of OMC), from
its own resources, from Asset-Based Sales Charge payments or from its
borrowings.
4. Selection and Nomination of Trustees. While this Plan is in effect,
the selection and nomination of those persons to be Trustees of the Fund
who are not "interested persons" of the Fund ("Disinterested Trustees")
shall be committed to the discretion of such Disinterested Trustees.
Nothing herein shall prevent the Disinterested Trustees from soliciting
the views or the involvement of others in such selection or nomination if
the final decision on any such selection and nomination is approved by a
majority of the incumbent Disinterested Trustees.
5. Reports. While this Plan is in effect, the Treasurer of the Fund
shall provide at least quarterly a written report to the Fund's Board for
its review, detailing distribution expenditures properly attributable to
the Shares, including the amount of all payments made pursuant to this
Plan, the identity of the Recipient of each such payment, the amount paid
to the Distributor and the Distribution and Service Costs and Carry
Forward Expenses for that period. The report shall state whether all
provisions of Section 3 of this Plan have been complied with. The
Distributor shall annually certify to the Board the amount of its total
expenses incurred that year and its total expenses incurred in prior years
and not previously recovered with respect to the distribution of Shares
in conjunction with the Board's annual review of the continuation of the
Plan.
6. Related Agreements. Any agreement related to this Plan shall be in
writing and shall provide that: (i) such agreement may be terminated at
any time, without payment of any penalty, by a vote of a majority of the
Independent Trustees or by a vote of the holders of a "majority" (as
defined in the 1940 Act) of the Fund's outstanding voting securities of
the Class, on not more than sixty days written notice to any other party
to the agreement; (ii) such agreement shall automatically terminate in the
event of its assignment (as defined in the 1940 Act); (iii) it shall go
into effect when approved by a vote of the Board and its Independent
Trustees cast in person at a meeting called for the purpose of voting on
such agreement; and (iv) it shall, unless terminated as herein provided,
continue in effect from year to year only so long as such continuance is
specifically approved at least annually by a vote of the Board and its
Independent Trustees cast in person at a meeting called for the purpose
of voting on such continuance.
7. Effectiveness, Continuation, Termination and Amendment. This Plan has
been approved by a vote of the Board and its Independent Trustees cast in
person at a meeting called on February 10, 1994 for the purpose of voting
on this Plan, and replaces the Fund's Distribution and Service Plan and
Agreement dated June 10, 1993. Unless terminated as hereinafter provided,
it shall continue in effect until December 31, 1994 and from year to year
thereafter or as the Board may otherwise determine only so long as such
continuance is specifically approved at least annually by a vote of the
Board and its Independent Trustees cast in person at a meeting called for
the purpose of voting on such continuance. This Plan may not be amended
to increase materially the amount of payments to be made without approval
of the Class B Shareholders, in the manner described above, and all
material amendments must be approved by a vote of the Board and of the
Independent Trustees. This Plan may be terminated at any time by vote of
a majority of the Independent Trustees or by the vote of the holders of
a "majority" (as defined in the 1940 Act) of the Fund's outstanding voting
securities of the Class. In the event of such termination, the Board and
its Independent Trustees shall determine whether the Distributor shall be
entitled to payment from the Fund of any Carry Forward Expenses and
related costs properly incurred in respect of Shares sold prior to the
effective date of such termination, and whether the Fund shall continue
to make payment to the Distributor in the amount the Distributor is
entitled to retain under part (c) of Section 3 hereof, until such time as
the Distributor has been reimbursed for all or part of such amounts by the
Fund and by retaining CDSC payments.
8. Disclaimer of Shareholder Liability. The Distributor understands that
the obligations of the Fund under this Plan are not binding upon any
Trustee or shareholder of the Fund personally, but bind only the Fund and
the Fund's property. The Distributor represents that it has notice of the
provisions of the Declaration of Trust of the Fund disclaiming shareholder
and Trustee liability for acts or obligations of the Fund.
OPPENHEIMER MORTGAGE INCOME FUND
By: ________________________________________
Andrew J. Donohue, Secretary
OPPENHEIMER FUNDS DISTRIBUTOR, INC.
By: ________________________________________
Katherine P. Feld
Vice President & Secretary
Oppenheimer Mortgage Income Fund
Exhibit 24(b)(16) to Form N-1A
Performance Data Computation Schedule
The Fund's average annual total returns and total returns are
calculated as described below, on the basis of the Fund's
distributions, for the past 10 years which are as follows:
Distribution Amount From Amount From
Reinvestment Investment Long or Short-Term
(Ex)Date Income Capital Gains Price
Class A Shares
10/15/86 0.1370 0.0000 14.260
11/12/86 0.1050 0.0000 14.220
12/10/86 0.1120 0.0000 14.300
01/07/87 0.1100 0.0000 14.230
02/04/87 0.1050 0.0000 14.230
03/04/87 0.1150 0.0000 14.290
04/01/87 0.1010 0.0000 14.160
04/29/87 0.1040 0.0000 13.580
05/27/87 0.1000 0.0000 13.400
06/24/87 0.1000 0.0000 13.610
07/22/87 0.1000 0.0000 13.620
08/19/87 0.1000 0.0000 13.600
09/16/87 0.1000 0.0000 13.140
10/14/87 0.1000 0.0000 12.870
11/11/87 0.1000 0.0000 13.460
12/23/87 0.1400 0.0000 13.440
01/20/88 0.0900 0.0000 13.560
02/17/88 0.0900 0.0000 13.700
03/16/88 0.0900 0.0000 13.720
04/13/88 0.0960 0.0000 13.640
05/11/88 0.0960 0.0000 13.400
06/08/88 0.0940 0.0000 13.470
07/06/88 0.0940 0.0000 13.500
08/03/88 0.0910 0.0000 13.440
08/31/88 0.0910 0.0000 13.250
09/28/88 0.0930 0.0000 13.340
10/26/88 0.0910 0.0000 13.450
11/23/88 0.0900 0.0000 13.270
12/21/88 0.0900 0.0000 13.160
01/18/89 0.0880 0.0000 13.160
02/15/89 0.0900 0.0000 13.070
03/15/89 0.0900 0.0000 12.970
04/12/89 0.0925 0.0000 12.920
05/10/89 0.0950 0.0000 13.010
06/07/89 0.0950 0.0000 13.300
07/05/89 0.0950 0.0000 13.360
08/02/89 0.0960 0.0000 13.410
08/30/89 0.0950 0.0000 13.290
09/27/89 0.0960 0.0000 13.230
10/25/89 0.0950 0.0000 13.360
11/22/89 0.0970 0.0000 13.410
12/20/89 0.0990 0.0000 13.450
01/17/90 0.0970 0.0000 13.300
02/14/90 0.0980 0.0000 13.260
03/14/90 0.0990 0.0000 13.130
04/11/90 0.0970 0.0000 13.150
05/09/90 0.0930 0.0000 13.020
06/06/90 0.0910 0.0000 13.220
07/05/90 0.0920 0.0000 13.260
08/01/90 0.0930 0.0000 13.360
08/29/90 0.0910 0.0000 13.180
09/26/90 0.0900 0.0000 13.100
10/24/90 0.0920 0.0000 13.180
11/21/90 0.0900 0.0000 13.340
12/19/90 0.0890 0.0000 13.490
01/16/91 0.0880 0.0000 13.380
02/13/91 0.0870 0.0000 13.670
03/13/91 0.0860 0.0000 13.520
04/10/91 0.0850 0.0000 13.490
05/08/91 0.0840 0.0000 13.520
06/05/91 0.0830 0.0000 13.430
07/03/91 0.0840 0.0000 13.410
07/31/91 0.0810 0.0000 13.470
08/28/91 0.0800 0.0000 13.550
09/25/91 0.0810 0.0000 13.630
10/23/91 0.0820 0.0000 13.630
11/20/91 0.0840 0.0000 13.870
12/18/91 0.0800 0.0000 13.940
01/15/92 0.0740 0.0000 14.090
02/11/92 0.0730 0.0000 13.900
03/11/92 0.0720 0.0000 13.740
04/08/92 0.0710 0.0000 13.810
05/06/92 0.0710 0.0000 13.810
06/03/92 0.0700 0.0000 13.950
07/01/92 0.0770 0.0000 14.090
07/29/92 0.0780 0.0000 14.200
08/26/92 0.0760 0.0000 14.080
09/23/92 0.0690 0.0000 14.040
10/21/92 0.0700 0.0000 13.850
11/18/92 0.0710 0.0000 13.820
12/16/92 0.0700 0.0000 13.880
01/20/93 0.0750 0.0000 13.970
02/17/93 0.0730 0.0000 14.120
03/17/93 0.0740 0.0000 14.150
04/14/93 0.0720 0.0000 14.170
05/12/93 0.0730 0.0000 14.150
06/09/93 0.0730 0.0000 14.120
06/29/93 0.0510 0.0000 14.150
07/29/93 0.0760 0.0000 14.160
08/30/93 0.0790 0.0000 14.250
09/30/93 0.0760 0.0000 14.200
10/29/93 0.0727017 0.0000 14.210
11/30/93 0.0649680 0.0000 14.000
Oppenheimer Mortgage Income Fund
Page 3
January 6, 1995
Class A Shares (Continued)
12/31/93 0.0745328 0.0000 14.050
01/31/94 0.0786446 0.0000 14.120
02/28/94 0.0803117 0.0000 13.890
03/31/94 0.0895506 0.0000 13.610
04/29/94 0.0763155 0.0000 13.430
05/31/94 0.0850095 0.0000 13.350
06/30/94 0.0886045 0.0000 13.270
07/29/94 0.0898785 0.0000 13.360
08/31/94 0.0952910 0.0000 13.290
09/30/94 0.0945262 0.0000 13.100
Class B Shares
06/09/93 0.0650 0.0000 14.140
06/29/93 0.0440 0.0000 14.180
07/29/93 0.0700 0.0000 14.170
08/30/93 0.0670 0.0000 14.250
09/30/93 0.0690 0.0000 14.210
10/29/93 0.0634178 0.0000 14.210
11/30/93 0.0548801 0.0000 13.990
12/31/93 0.0645349 0.0000 14.050
01/31/94 0.0697332 0.0000 14.110
02/28/94 0.0716804 0.0000 13.890
03/31/94 0.0791225 0.0000 13.620
04/29/94 0.0677795 0.0000 13.430
05/31/94 0.0760957 0.0000 13.340
06/30/94 0.0800493 0.0000 13.260
07/29/94 0.0808800 0.0000 13.350
08/31/94 0.0909997 0.0000 13.280
09/30/94 0.0859567 0.0000 13.100
1. Average Annual Total Returns for the Periods Ended 09/30/94:
The formula for calculating average annual total return is as
follows:
1 ERV n
--------------- = n (---) - 1 = average annual total return
number of years P
Where: ERV = ending redeemable value of a hypothetical $1,000
payment
made at the beginning of the period
P = hypothetical initial investment of $1,000
1. Average Annual Total Returns for the Periods Ended 09/30/94
(Continued):
Oppenheimer Mortgage Income Fund
Page 4
January 6, 1995
Class A Shares
Examples, assuming a maximum sales charge of 4.75%:
One Year Five Year
$ 944.89 1 $1,382.95 .2
(---------) - 1 = -5.51% (---------) - 1 = 6.70%
$1,000 $1,000
Inception
$1,702.43 .1242
(---------) - 1 = 6.83%
$1,000
Class B Shares
Examples, assuming a maximum contingent deferred sales charge of 5.00%
for the first year, and 4.00% for the second year:
One Year Inception
$ 937.68 1 $ 975.79 .7271
(---------) - 1 = -6.23% (---------) - 1 = -1.77%
$1,000 $1,000
Examples at NAV:
Class A Shares
One Year Five Year
$ 992.01 1 $1,451.92 .2
(---------) - 1 = -0.80% (---------) - 1 = 7.74%
$1,000 $1,000
Inception
$1,787.32 .1242
(---------) - 1 = 7.48%
$1,000
Class B Shares
One Year Inception
$ 983.77 1 $1,012.93 .7271
(---------) - 1 = -1.62% (---------) - 1 = 0.94%
$1,000 $1,000
Oppenheimer Mortgage Income Fund
Page 5
January 6, 1995
2. Cumulative Total Returns for the Periods Ended 9/30/94:
The formula for calculating cumulative total return is as follows:
(ERV - P) / P = Cumulative Total Return
Class A Shares
Examples, assuming a maximum sales charge of 4.75%:
One Year Five Year
$ 944.89 - $1,000 $1,382.95 - $1,000
------------------ = -5.51% ------------------ = 38.30%
$1,000 $1,000
Inception
$1,702.43 - $1,000
------------------ = 70.24%
$1,000
Class B Shares
Examples, assuming a maximum contingent deferred sales charge of 5.00%
for the first year, and 4.00% for the second year:
One Year Inception
$ 937.68 - $1,000 $ 975.79 - $1,000
------------------ = -6.23% ------------------ = -2.42%
$1,000 $1,000
Examples at NAV:
Class A Shares
One Year Five Year
$ 992.01 - $1,000 $1,451.92 - $1,000
------------------ = -0.80% ------------------ = 45.19%
$1,000 $1,000
Inception
$1,787.32 - $1,000
------------------ = 78.73%
$1,000
Oppenheimer Mortgage Income Fund
Page 6
January 6, 1995
Class B Shares
One Year Inception
$ 983.77 - $1,000 $1,012.93 - $1,000
------------------ = -1.62% ------------------ = 1.29%
$1,000 $1,000
3. Standardized Yield for the 30-Day Period Ended 09/30/94:
The Fund's standardized yields are calculated using the following
formula set forth in the SEC rules:
a - b 6
Yield = 2 { (-------- + 1 ) - 1 }
cd or ce
The symbols above represent the following factors:
a = Dividends and interest earned during the 30-day period.
b = Expenses accrued for the period (net of any expense
reimbursements).
c = The average daily number of Fund shares outstanding during
the 30-day period that were entitled to receive dividends.
d = The Fund's maximum offering price (including sales charge)
per share on the last day of the period.
e = The Fund's net asset value (excluding contingent deferred
sales charge) per share on the last day of the period.
Class A Shares
Example, assuming a maximum sales charge of 4.75%:
$481,097.58 - $ 9,063.64 6
2{(------------------------ + 1) - 1} = 7.00%
5,966,324 x $13.75
Class B Shares
Example at NAV:
$ 17,312.10 - $ 2,041.57 6
2{(------------------------ + 1) - 1} = 6.59%
215,251 x $13.10
Oppenheimer Mortgage Income Fund
Page 7
January 6, 1995
4. DIVIDEND YIELDS FOR THE 30-DAY PERIOD ENDED 9/30/94:
The Fund's dividend yields are calculated using the following
formula:
Dividend Yield = { (a / 30) x 365 } / b or c
The symbols above represent the following factors:
a = The accrual dividend earned during the period.
b = The Fund's maximum offering price (including sales charge)
per share on the last day of the period.
c = The Fund's net asset value (excluding sales charge) per share
on the last day of the period.
Examples:
Class A Shares
Dividend Yield
at Maximum Offering $.0885399/30 x 365
------------------ = 7.83%
$13.75
Dividend Yield
at Net Asset Value $.0885399/30 x 365
------------------ = 8.22%
$13.10
Class B Shares
Dividend Yield
at Net Asset Value $.0805139/30 x 365
------------------ = 7.48%
$13.10
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<NAME> OPPENHEIMER MORTGAGE INCOME FUND
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<SHARES-REINVESTED> 14319
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Oppenheimer Management Corporation
2 World Trade Center - Suite 3400
New York, NY 10048-0203
October 21, 1994
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Oppenheimer Asset Allocation Fund - Reg. No. 2-86903,
File No. 811-3864
Oppenheimer California Tax-Exempt Fund - Reg. No. 33-23566
File No. 811-5586
Oppenheimer Discovery Fund - Reg. No. 33-371, File No. 811-4410
Oppenheimer Global Emerging Growth Fund - Reg. No. 33-18285,
File No. 811-5381
Oppenheimer Global Environment Fund - Reg. No. 33-32270,
File No. 811-5966
Oppenheimer Global Fund - Reg. No. 2-31661, File No. 811-1810
Oppenheimer Global Growth & Income Fund - Reg. No. 33-33799
File No. 811-6001
Oppenheimer Gold & Special Minerals Fund - Reg. No. 2-82590,
File No. 811-3694
Oppenheimer Growth Fund - Reg. No. 2-45272, File No. 811-2306
Oppenheimer Money Market Fund, Inc. - Reg. No. 2-49887,
File No. 811-2454
Oppenheimer Mortgage Income Fund - Reg. No. 33-6614,
File No. 811-4712
Oppenheimer Multi-Government Trust - Reg. No. 33-24885,
File No. 811-5670
Oppenheimer Multi-Sector Income Trust - Reg. No. 33-20191
File No. 811-5473
Oppenheimer Multi-State Tax-Exempt Trust - Reg. No. 33-30198
File No. 811-5867
Oppenheimer New York Tax-Exempt Fund - Reg. No. 2-91683,
File No. 811-4054
Oppenheimer Fund - Reg. No. 2-14586, File No. 811-847
Oppenheimer Target Fund - Reg. No. 2-69719, File No. 811-3105
Oppenheimer Time Fund - Reg. No. 2-39461, File No. 811-02171
Oppenheimer Tax-Free Bond Fund - Reg. No. 2-57116,
File No. 811-2668
Oppenheimer U.S. Government Trust - Reg. No. 2-76645,
File No. 811-3430
To the Securities and Exchange Commission:
Each of the above-captioned registered investment companies (the
"Registrants") hereby represents to the Securities and Exchange
Commission, pursuant to Rule 485(b)(2)(iv) under the Securities Act of
1933, as amended, and in connection with an amendment on Form N-1A to that
Registrant's Registration Statement under the Investment Company Act of
1940, that the resignation of Edmund T. Delaney as a Trustee of the
Registrants as of October 17, 1994, was not due to disagreement with any
Registrant as to any matter relating to any Registrant's operations,
policies or practices.
OPPENHEIMER ASSET ALLOCATION FUND
OPPENHEIMER CALIFORNIA TAX-EXEMPT FUND
OPPENHEIMER DISCOVERY FUND
OPPENHEIMER GLOBAL EMERGING GROWTH FUND
OPPENHEIMER GLOBAL ENVIRONMENT FUND
OPPENHEIMER GLOBAL FUND
OPPENHEIMER GLOBAL GROWTH & INCOME FUND
OPPENHEIMER GOLD & SPECIAL MINERALS FUND
OPPENHEIMER GROWTH FUND
OPPENHEIMER MONEY MARKET FUND, INC.
OPPENHEIMER MORTGAGE INCOME FUND
OPPENHEIMER MULTI-GOVERNMENT TRUST
OPPENHEIMER MULTI-SECTOR INCOME TRUST
OPPENHEIMER MULTI-STATE TAX-EXEMPT TRUST
OPPENHEIMER NEW YORK TAX-EXEMPT FUND
OPPENHEIMER FUND
OPPENHEIMER TARGET FUND
OPPENHEIMER TIME FUND
OPPENHEIMER TAX-FREE BOND FUND
OPPENHEIMER U.S. GOVERNMENT TRUST
By: /s/ Andrew J. Donohue
--------------------------------
Andrew J. Donohue, Secretary
PROSP/delaney
