<PAGE>
As filed with the Securities and Exchange Commission on April 16, 1998
Registration No. ________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-------------------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------------------------
INTEGRATED ORTHOPAEDICS, INC.
(Exact name of registrant as specified in its charter)
Texas 76-0203483
(State of Incorporation) I.R.S. Employer I.D. No.
5858 Westheimer, Suite 500
Houston, Texas 77057
(Address of Principal Executive Offices) (Zip Code)
INTEGRATED ORTHOPAEDICS, INC. 401(k) PLAN
(Full title of the plan)
-------------------------------------------
Ronald E. Pierce
President and Chief Executive Officer
Integrated Orthopaedics, Inc.
5858 Westheimer, Suite 500
Houston, Texas 77057
(Name and address of agent for service)
(713) 225-5464
(Telephone number, including area code of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Proposed maximum Proposed maximum
Title of Securities Amount to be offering price aggregate offering Amount of
to be Registered Registered (1) per share (2) price (2) Registration Fee
- --------------------------------------------------------------------------------------------------------
Common Stock 180,000 $6.6875 (1) $1,203,750 (1) $355.11
par value $.001 per
share
- --------------------------------------------------------------------------------------------------------
</TABLE>
(1) In addition, pursuant to Rule 416 under the Securities Act of 1933, this
registration statement also covers an indeterminate amount of: (a)
interests to be offered or sold pursuant to the employee benefit plan
described herein, and (b) additional shares which may be necessary to
adjust the number of shares reserved for issuance pursuant to the
Integrated Orthopaedics, Inc. 401(k) Plan for any future stock split, stock
dividend or similar adjustment of the outstanding Common Stock of the
registrant.
(2) Estimated solely for the purpose of calculating the registration fee. This
estimate has been calculated in accordance with Rule 457(c) under the
Securities Act of 1933 and is based on the average of the high and low
prices per shares reported on the American Stock Exchange on April 14,
1998.
<PAGE>
PART I
INFORMATION REQUIRED IN THE 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION.*
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.*
* The information required by Items 1 and 2 of Part I of Form S-8 is not
filed as part of this Registration Statement in accordance with the Note to
Part I of Form S-8 and Rule 428 promulgated under the Securities Act of
1933, as amended (the "Securities Act").
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, and all documents subsequently filed by Integrated
Orthopaedics, Inc. (the "Company") pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
prior to the filing of a post-effective amendment to the Registration Statement
which indicates that all securities offered have been sold or which deregisters
all securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and shall be deemed to be a part hereof
from the date of the filing of such documents:
(a) The Company's annual report filed on Form 10-KSB for the year
ended December 31, 1997 pursuant to Section 13(a) or 15(d) of the
Exchange Act; and
(b) All other reports filed by the Company pursuant to Sections 13(a)
or 15(d) of the Exchange Act since the end of the fiscal year
covered by the Company's document referred to in (a) above.
Any statement contained in a document incorporated by reference in this
registration statement shall be deemed to be modified or superseded for purposes
of this registration statement to the extent that a statement contained in any
other subsequently filed document which is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this registration statement.
ITEM 4. DESCRIPTION OF SECURITIES.
The Company's authorized capital stock consists of (i) 50,000,000 shares of
Common Stock, $.001 par value, of which 6,310,293 shares were issued and
6,296,460 shares were outstanding as of March 13, 1998; and (ii) 10,000,000
shares of Preferred Stock, $.01 par value, of which (a) a series of 26,000
shares of the Company's Series A Preferred Stock, $.01 par value (the "Series A
Preferred"), has been designated and authorized, and of which 25,226 shares are
issued and outstanding as of March 13, 1998, and (b) a series of 400,000 shares
of the Company's Series B Preferred Stock, $.01 par value (the "Series B
Preferred"), has been designated and authorized, and which 251,170 shares are
issued and outstanding as of March 13, 1998.
2
<PAGE>
The following statements are summaries of certain provisions with respect
to the Common Stock of the Company contained in the Company's Articles of
Incorporation, as amended, as affected by certain rights of holders, if any, of
the Company's Preferred Stock (including the holders of Series A Preferred and
the Series B Preferred). Such statements, which do not purport to be complete,
are subject in all respects to the full provisions of the Company's Articles of
Incorporation, as amended (including, without limitation, the Certificates of
Designations describing the the rights and preferences of the holders of the
Series A Preferred and the Series B Preferred).
COMMON STOCK
- ------------
Holders of Common Stock are entitled to one vote per share in the election
of directors and on all other matters submitted to a vote at a meeting of
shareholders. As discussed below, holders of the Series A Preferred are
entitled to vote (on an as-converted basis) together with the holders of Common
Stock on all matters coming before the holders of Common Stock, and, upon the
occurrence of certain events, the holders of the Series A Preferred may be
entitled to have exclusive rights regarding the election of one director. As
discussed below, the holders of the Company's Series B Preferred Stock have
certain exclusive rights regarding the election of three of the Company's
directors. With the exception of votes with regard to the other directors of
the Company, the holders of the Series B Preferred are entitled to vote (on an
as-converted basis) together with the holders of Common Stock on all matters
coming before the holders of Common Stock. Cumulative voting for the election of
directors is not permitted.
Subject to the rights of any then outstanding shares of Preferred Stock,
holders of the Common Stock are entitled to such dividends as may be declared in
the discretion of the Board of Directors out of funds legally available
therefor. As described in more detail below, accrued and unpaid dividends of
the holders of the Series A Preferred and Series B Preferred must be paid prior
to the payment of dividends to the holders of the Common Stock. Holders of the
Common Stock are entitled to share ratably in the net assets of the Company upon
liquidation after payment or provision for all liabilities and any preferential
liquidation rights of any Preferred Stock then outstanding. As indicated below,
the holders of the Series A Preferred and Series B Preferred have preferential
liquidation rights. The holders of Common Stock have no preemptive rights to
purchase shares of stock of the Company. Shares of Common Stock are not subject
to any redemption provisions and are not convertible into any other securities
of the Company. All outstanding shares of the Common Stock are fully paid and
nonassessable. Continental Stock Transfer & Trust Company is the transfer agent
and registrar for the Common Stock.
PREFERRED STOCK
- ---------------
The Preferred Stock may be issued from time to time by the Board of
Directors as shares of one or more classes or series. Subject to the provisions
of the Company's Articles of Incorporation and limitations prescribed by law,
the Board of Directors is expressly authorized to adopt resolutions to issue the
shares, to fix the number of shares and to change the number of shares
constituting any series, and to provide for or change the voting powers,
designations, preferences and relative, participating, optional or other special
rights, qualifications, limitations or restrictions thereof, including dividend
rights (including whether dividends are cumulative), dividend rates, terms of
redemption (including sinking fund provisions), redemption prices, conversion
rights and liquidation preferences of the shares constituting any class or
series of the Preferred Stock, in each case without any further action or vote
by the stockholders.
3
<PAGE>
SERIES A PREFERRED
The Company has designated 26,000 shares of Preferred Stock as Series A
Preferred Stock. The Series A Preferred provides for quarterly, cumulative
dividends that accrue at the rate of (i) $8.00 per share per annum for the
period beginning on the date of issuance and ending on June 30, 2001; (ii)
$10.00 per share per annum for the period beginning July 1, 2001 and ending on
June 30, 2002; (iii) $12.00 per share per annum for the period beginning July 1,
2002 and ending on June 30, 2003, and (iv) $16.00 per share per annum after July
1, 2004, and shall be first payable on June 30, 1999 (subject to certain
extensions). Payment of such dividends shall be in preference and priority to
any dividends paid to holders of the Common Stock and on parity with the holders
of the Series B Preferred Stock. The Series A Preferred is convertible into
shares of Common Stock at a rate equal to that amount to be received for each
share of Series A Preferred in liquidation ($100 per share plus accrued but
unpaid dividends) divided by a factor of $3.50 (subject to adjustment). Each
holder of the Series A Preferred is entitled to voting rights with respect to
any matters put before the Company's stockholders, in an amount of votes equal
to the number of whole shares into which the shares of Series A Preferred are
convertible at the time of such vote. In addition, the consent of the holders of
two-thirds of the Series A Preferred, voting as a class, is necessary for the
Company to sell all or substantially all of its assets or effect any merger,
consolidation or share exchange. If shares of the Series A Preferred are
outstanding after June 30, 2001, the Company's board of directors shall be
increased by one, and the holders of such shares, voting as a separate class,
shall be entitled to elect a director to fill such newly created directorship.
Upon the liquidation of the Company, the holders of the Series A Preferred and
Series B Preferred are entitled to receive liquidation proceeds in an amount
equal to $100 per share, plus any accrued and unpaid dividends, on a parity
basis, prior to any distributions being made to the holders of any other class
of the Company's stock.
SERIES B PREFERRED
The Company has designated 400,000 shares of Preferred Stock as Series B
Preferred. The Series B Preferred provides for quarterly, cumulative dividends
that accrue at the rate of $9.00 per share (subject to adjustment) per annum.
Payment of such dividends shall be in preference and priority to any dividends
paid to holders of the Common Stock and on parity with the holders of the Series
A Preferred. At the option of the Company, such dividends may be paid by the
Company with additional shares of the Series B Preferred. The Series B Preferred
is convertible into shares of Common Stock at a rate equal to that amount to be
received for each share of Series B Preferred in liquidation ($100 per share
plus accrued but unpaid dividends) divided by a factor of $6.00 (subject to
adjustment). The holders of the Series B Preferred may convert the Series B
Preferred to Common Stock at the then established conversion rate at any time.
The Company may force the holders of the Series B Preferred to convert to Common
Stock at the then established conversion rate at any time after the fifth
anniversary of the issuance of the Series B Preferred. Except with respect to
the election of directors, each holder of the Series B Preferred is entitled to
voting rights with respect to any matters put before the Company's stockholders,
in an amount of votes equal to the number of whole shares into which the shares
of Series B Preferred are convertible at the time of such vote. The holders of
the Series B Preferred, acting as a class, have the exclusive right to elect
three of the Company's directors, but do not vote on an "as converted" basis in
the election of the remaining directors. Upon a breach by the Company of certain
financial covenants, the holders of the Series B Preferred, acting as a class,
can elect a majority of the directors of the Company. In addition, the consent
of the holders of a majority of the Series B Preferred, voting as a class, is
necessary for the Company to (i) make or commit to any capital expenditures (a)
exceeding $1.0 million for purposes other than the affiliation with physician
practice groups and (b) exceeding $10.0 million in total consideration for an
affiliation with any physician practice group, (ii) make any change in the
capital structure of the Company (including debt financings), or (iii) merge or
consolidate
4
<PAGE>
with or into or transfer all or substantially all of its assets to any person or
entity. A majority of the holders of the Series B Preferred, acting as a class,
have the right to designate two of the three members of the Company's
Acquisitions and Budget Committee of the Board of Directors, which committee
controls the Company's investments in affiliation agreements with physician
practices and other entities. The Company has also agreed to maintain certain
financial ratio covenants in conjunction with the Series B Preferred. Upon the
liquidation of the Company, the holders of the Series A Preferred and Series B
Preferred are entitled to receive liquidation proceeds in an amount equal to
$100 per share plus any accrued and unpaid dividends, on a parity basis, prior
to any distributions being made to the holders of any other class of the
Company's stock.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Articles of Incorporation of the Company, together with its Bylaws,
provide that the Company shall indemnify officers and directors, and may
indemnify its other employees and agents, to the fullest extent permitted by
law. The laws of the State of Texas permit, and in some cases require,
corporations to indemnify officers, directors, agents and employees who are or
have been a party to or are threatened to be made a party to litigation against
judgments, fines, settlements and reasonable expenses under certain
circumstances.
The Company has also adopted provisions in its Articles of Incorporation
that limit the liability of its directors to the fullest extent permitted by
the laws of the State of Texas. Under the Company's Articles of Incorporation,
and as permitted by the laws of the State of Texas, a director is not liable to
the Company or its shareholders for damages for breach of fiduciary duty. Such
limitation of liability does not affect liability for (i) breach of the
director's duty of loyalty to the corporation or its shareholders, (ii) acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of the law, (iii) any transaction from which the director derived an
improper personal benefit, or (iv) the payment of any unlawful dividends.
Texas corporations also are authorized to obtain insurance to protect
officers and directors from certain liabilities, including liabilities against
which the corporation cannot indemnify its directors and officers. The Company
has purchased and maintains a directors' and officers' liability policy for such
purposes.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS
EXHIBIT NO. DESCRIPTION
4.1 Integrated Orthopaedics, Inc. 401(k) Plan
4.2 Articles of Incorporation of the Company, as amended to date. (1)
4.3 Bylaws of the Company, as amended to date. (2)
5
<PAGE>
4.4 Certificate of Designation and Determination of Rights and
Preferences of Cumulative Convertible Preferred Stock, Series A
of the Company. (3)
4.5 Certificate of Designation, Rights and Preferences of Series B
Convertible, Non-Redeemable Preferred Stock of the Company. (4)
23.1 Consent of Price Waterhouse, LLP, independent auditors.
24.1 Power of Attorney (included on the signature page hereto)
_____________
(1) Previously filed as Exhibit 3.1 to the Company's Quarterly Report on Form
10-QSB for the quarter ended March 31, 1997.
(2) Previously filed as Exhibit 3.2 to the Company's Annual Report on Form 10-
KSB for the year ended December 31, 1997.
(3) Previously filed as Exhibit 4.01 to the Company's Current Report on Form 8-
K dated December 12, 1997.
(4) Previously filed as Exhibit 4.02 to the Company's Current Report on Form 8-
K dated December 12, 1997.
In accordance with Item 8 of Form S-8, this registration statement does not
include Exhibit 5 --Opinion Regarding Legality, as:
1. The Company undertakes to submit the Plan and any amendment thereto to
the Internal Revenue Service in a timely manner and will make all changes
required by the Internal Revenue Service in order to qualify the Plan under
Section 401(a) and 401(k) of the Internal Revenue Code.
2. The Plan provides that shares of the Company's Common Stock issued
under the Plan will be purchased by the Trustee of the Plan on the open market.
The Plan does not provide for such shares to be issued by the Company out of its
authorized and unissued shares of Common Stock.
ITEM 9. UNDERTAKINGS.
The undersigned registrant hereby undertakes as follows:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this registration statement (or the most
recent post-effective amendment thereof) which, individually or in
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the
6
<PAGE>
aggregate, the changes in volume and price represent no more than 20
percent change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (1)(i) and (1) (ii) above do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
by the registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on April 15, 1998.
INTEGRATED ORTHOPAEDICS, INC.
By: /s/ RONALD E. PIERCE
---------------------------------------
Ronald E. Pierce
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, the trustees
(or other persons who administer the employee benefit plan) have duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Houston, State of Texas, on April 15,
1998.
INTEGRATED ORTHOPAEDICS, INC. 401(K) PLAN
By: /s/ RONALD E. PIERCE
---------------------------------------
Ronald E. Pierce, Co-Trustee
By: /s/ JEFFERSON R. CASEY
---------------------------------------
Jefferson R. Casey, Co-Trustee
By: /s/ JEFFREY A. STEVENS
---------------------------------------
Jeffrey A. Stevens, Co-Trustee
8
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Ronald E. Pierce and Jefferson R. Casey, and each of them, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto each said attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorney-in-fact and
agent or his substitute may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ JOSE E. KAUACHI Non-Executive Chairman of the April 15, 1998
- ----------------------- Board and Director
Jose E. Kauachi
/s/ RONALD E. PIERCE President and Chief Executive April 15, 1998
- ----------------------- Officer and Director (Principal
Ronald E. Pierce Executive Officer)
/s/ JEFFERSON R. CASEY Senior Vice President, Treasurer April 15, 1998
- ----------------------- and Secretary (Principal Financial
Jefferson R. Casey & Accounting Officer)
/s/ CLIFFORD R. HINKLE Director April 15, 1998
- -----------------------
Clifford R. Hinkle
/s/ JOHN B. McGINTY Director April 15, 1998
- -----------------------
John B. McGinty, M.D.
/s/ SCOTT J. HANCOCK Director April 15, 1998
- -----------------------
Scott J. Hancock
/s/ MARK A. WOLFSON Director April 15, 1998
- -----------------------
Mark A. Wolfson
/s/ J. TAYLOR CRANDALL Director April 15, 1998
- -----------------------
J. Taylor Crandall
9
<PAGE>
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION PAGE
4.1 Integrated Orthopaedics, Inc. 401(k) Plan
4.2 Articles of Incorporation of the Company, as amended to
date. (1)
4.3 Bylaws of the Company, as amended to date. (2)
4.4 Certificate of Designation and Determination of Rights and
Preferences of Cumulative Convertible Preferred Stock,
Series A of the Company. (3)
4.5 Certificate of Designation, Rights and Preferences of Series
B Convertible, Non-Redeemable Preferred Stock of the
Company. (4)
23.1 Consent of Price Waterhouse, LLP, independent auditors.
24.1 Power of Attorney (included on the signature page hereto)
_____________
(1) Previously filed as Exhibit 3.1 to the Company's Quarterly Report on Form
10-QSB for the quarter ended March 31, 1997.
(2) Previously filed as Exhibit 3.2 to the Company's Annual Report on Form 10-
KSB for the year ended December 31, 1997.
(3) Previously filed as Exhibit 4.01 to the Company's Current Report on Form 8-
K dated December 12, 1997.
(4) Previously filed as Exhibit 4.02 to the Company's Current Report on Form 8-
K dated December 12, 1997.
10
<PAGE>
EXHIBIT 4.1
INTEGRATED ORTHOPAEDICS, INC.
401(K) PLAN
Defined Contribution Plan 7.7
Restated April 1, 1998
<PAGE>
TABLE OF CONTENTS
INTRODUCTION
ARTICLE I FORMAT AND DEFINITIONS
Section 1.01 -- Format
Section 1.02 -- Definitions
ARTICLE II PARTICIPATION
Section 2.01 -- Active Participant
Section 2.02 -- Inactive Participant
Section 2.03 -- Cessation of Participation
Section 2.04 -- Adopting Employers - Single Plan
ARTICLE III CONTRIBUTIONS
Section 3.01 -- Employer Contributions
Section 3.01A -- Rollover Contributions
Section 3.02 -- Forfeitures
Section 3.03 -- Allocation
Section 3.04 -- Contribution Limitation
Section 3.05 -- Excess Amounts
ARTICLE IV INVESTMENT OF CONTRIBUTIONS
Section 4.01 -- Investment of Contributions
Section 4.01A -- Investment in Qualifying Employer Securities
ARTICLE V BENEFITS
Section 5.01 -- Retirement Benefits
Section 5.02 -- Death Benefits
Section 5.03 -- Vested Benefits
Section 5.04 -- When Benefits Start
Section 5.05 -- Withdrawal Privileges
Section 5.06 -- Loans to Participants
<PAGE>
ARTICLE VI DISTRIBUTION OF BENEFITS
Section 6.01 -- Automatic Forms of Distribution
Section 6.02 -- Optional Forms of Distribution and Distribution
Requirements
Section 6.02A -- Distributions in Qualifying Employer Securities
Section 6.03 -- Election Procedures
Section 6.04 -- Notice Requirements
ARTICLE VII TERMINATION OF PLAN
ARTICLE VIII ADMINISTRATION OF PLAN
Section 8.01 -- Administration
Section 8.02 -- Records
Section 8.03 -- Information Available
Section 8.04 -- Claim and Appeal Procedures
Section 8.05 -- Unclaimed Vested Account Procedure
Section 8.06 -- Delegation of Authority
ARTICLE IX GENERAL PROVISIONS
Section 9.01 -- Amendments
Section 9.02 -- Direct Rollovers
Section 9.03 -- Mergers and Direct Transfers
Section 9.04 -- Provisions Relating to the Insurer and Other Parties
Section 9.05 -- Employment Status
Section 9.06 -- Rights to Plan Assets
Section 9.07 -- Beneficiary
Section 9.08 -- Nonalienation of Benefits
Section 9.09 -- Construction
Section 9.10 -- Legal Actions
Section 9.11 -- Small Amounts
Section 9.12 -- Word Usage
Section 9.13 -- Transfers Between Plans
ARTICLE X TOP-HEAVY PLAN REQUIREMENTS
Section 10.01 -- Application
Section 10.02 -- Definitions
Section 10.03 -- Modification of Vesting Requirements
Section 10.04 -- Modification of Contributions
Section 10.05 -- Modification of Contribution Limitation
PLAN EXECUTION
<PAGE>
INTRODUCTION
The Primary Employer previously established a 401(k) savings plan on January
1, 1991.
The Primary Employer is of the opinion that the plan should be changed. It
believes that the best means to accomplish these changes is to completely
restate the plan's terms, provisions and conditions. The restatement, effective
April 1, 1998, is set forth in this document and is substituted in lieu of the
prior document.
The restated plan continues to be for the exclusive benefit of employees of
the Employer. All persons covered under the plan on March 31, 1998, shall
continue to be covered under the restated plan with no loss of benefits.
It is intended that the plan, as restated, shall qualify as a profit sharing
plan under the Internal Revenue Code of 1986, including any later amendments to
the Code.
1
<PAGE>
ARTICLE I
FORMAT AND DEFINITIONS
SECTION 1.01--FORMAT.
Words and phrases defined in the DEFINITIONS SECTION of Article I shall have
that defined meaning when used in this Plan, unless the context clearly
indicates otherwise.
These words and phrases have an initial capital letter to aid in identifying
them as defined terms.
SECTION 1.02--DEFINITIONS.
ACCOUNT means, for a Participant, his share of the Investment Fund and
Qualifying Employer Securities Fund. Separate accounting records are kept
for those parts of his Account that result from:
(a) Elective Deferral Contributions
(b) Matching Contributions
(c) Rollover Contributions
If the Participant's Vesting Percentage is less than 100% as to any of the
Employer Contributions, a separate accounting record will be kept for any
part of his Account resulting from such Employer Contributions and, if there
has been a prior Forfeiture Date, from such Contributions made before a
prior Forfeiture Date.
A Participant's Account shall be reduced by any distribution of his Vested
Account and by any Forfeitures. A Participant's Account will participate in
the earnings credited, expenses charged and any appreciation or depreciation
of the Investment Fund. His Account is subject to any minimum guarantees
applicable under the Group Contract or other investment arrangement.
ACTIVE PARTICIPANT means an Eligible Employee who is actively participating
in the Plan according to the provisions in the ACTIVE PARTICIPANT SECTION of
Article II.
ADOPTING EMPLOYER means an employer controlled by or affiliated with the
Employer and listed in the ADOPTING EMPLOYERS - SINGLE PLAN SECTION of
Article II.
AFFILIATED SERVICE GROUP means any group of corporations, partnerships or
other organizations of which the Employer is a part and which is affiliated
within the meaning of Code Section 414(m) and regulations thereunder. Such
a group includes at least two organizations one of which is either a service
organization (that is, an organization the principal business of which is
performing services), or an organization the principal business of which is
performing management functions on a regular and continuing basis. Such
service is of a type historically performed by employees. In the case of a
management organization, the Affiliated Service Group shall include
organizations related, within the meaning of Code Section 144(a)(3), to
either the management organization or the organization for which it performs
management functions. The term Controlled Group, as it is used in this
Plan, shall include the term Affiliated Service Group.
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ANNUITY STARTING DATE means, for a Participant, the first day of the first
period for which an amount is payable as an annuity or any other form.
BENEFICIARY means the person or persons named by a Participant to receive
any benefits under this Plan upon the Participant's death. See the
BENEFICIARY SECTION of Article IX.
CLAIMANT means any person who has made a claim for benefits under this Plan.
See the CLAIM AND APPEAL PROCEDURES SECTION of Article VIII.
CODE means the Internal Revenue Code of 1986, as amended.
COMPENSATION means, except as modified in this definition, the total
earnings paid or made available to an Employee by the Employer during any
specified period.
"Earnings" in this definition means Compensation as defined in the
CONTRIBUTION LIMITATION SECTION of Article III.
Compensation shall also include elective contributions. Elective
contributions are amounts excludable from the Employee's gross income under
Code Sections 125, 402(e)(3), 402(h) or 403(b), and contributed by the
Employer, at the Employee's election, to a Code Section 401(k) arrangement,
a simplified employee pension, cafeteria plan or tax-sheltered annuity.
Elective contributions also include Compensation deferred under a Code
Section 457 plan maintained by the Employer and Employee contributions
"picked up" by a governmental entity and, pursuant to Code Section
414(h)(2), treated as Employer contributions.
For purposes of the EXCESS AMOUNTS SECTION of Article III, the Employer may
elect to use an alternative nondiscriminatory definition of Compensation in
accordance with the regulations under Code Section 414(s).
For purposes of determining the amount of Elective Deferral Contributions,
Compensation shall exclude reimbursements or other expense allowances,
fringe benefits (cash and noncash), moving expenses, deferred compensation
and welfare benefits.
For Plan Years beginning after December 31, 1988, and before January 1,
1994, the annual Compensation of each Participant taken into account for
determining all benefits provided under the Plan for any year shall not
exceed $200,000. For Plan Years beginning on or after January 1, 1994, the
annual Compensation of each Participant taken into account for determining
all benefits provided under the Plan for any year shall not exceed $150,000.
The $200,000 limit shall be adjusted by the Secretary at the same time and
in the same manner as under Code Section 415(d). The $150,000 limit shall
be adjusted by the Commissioner for increases in the cost of living in
accordance with Code Section 401(a)(17)(B). The cost of living adjustment
in effect for a calendar year applies to any period, not exceeding 12
months, over which pay is determined (determination period) beginning in
such calendar year. If a determination period consists of fewer than 12
months, the 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.
In determining the Compensation of a Participant for purposes of the annual
compensation limit, the rules of Code Section 414(q)(6) shall apply, except
that in applying such rules, the term "family" shall include
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<PAGE>
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 annual
compensation limit is exceeded, then (except for purposes of determining the
portion of Compensation up to the integration level if this Plan provides
for permitted disparity) the limitation shall be prorated among the affected
individuals in proportion to each such individual's Compensation as
determined under this definition prior to the application of this
limitation.
If Compensation for any prior determination period is taken into account in
determining a Participant's benefits accruing in the current Plan Year, the
Compensation for that prior determination period is subject to the 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, 1989, which are used to
determine benefits in Plan Years beginning after December 31, 1988 and
before January 1, 1994, the annual compensation limit is $200,000. For this
purpose, for determination periods beginning before the first day of the
first Plan Year beginning on or after January 1, 1994, which are used to
determine benefits in Plan Years beginning on or after January 1, 1994, the
annual compensation limit is $150,000.
Compensation means, for an Employee who is a Leased Employee, the Employee's
Compensation for the services he performs for the Employer, determined in
the same manner as the Compensation of Employees who are not Leased
Employees, regardless of whether such Compensation would be received
directly from the Employer or from the leasing organization.
COMPENSATION YEAR means each one-year period ending on the last day of the
Plan Year, including corresponding periods before January 1, 1991.
CONTINGENT ANNUITANT means an individual named by the Participant to receive
a lifetime benefit after the Participant's death in accordance with a
survivorship life annuity.
CONTRIBUTIONS means
Elective Deferral Contributions
Matching Contributions
Rollover Contributions
as set out in Article III, unless the context clearly indicates otherwise.
CONTROLLED GROUP means any group of corporations, trades or businesses of
which the Employer is a part that are under common control. A Controlled
Group includes any group of corporations, trades or businesses, whether or
not incorporated, which is either a parent-subsidiary group, a brother-
sister group, or a combined group within the meaning of Code Section 414(b),
Code Section 414(c) and regulations thereunder and, for purposes of
determining contribution limitations under the CONTRIBUTION LIMITATION
SECTION of Article III, as modified by Code Section 415(h) and, for the
purpose of identifying Leased Employees, as modified by Code Section
144(a)(3). The term Controlled Group, as it is used in this Plan, shall
include the term Affiliated Service Group and any other employer required to
be aggregated with the Employer under Code Section 414(o) and the
regulations thereunder.
DIRECT ROLLOVER means a payment by the Plan to the Eligible Retirement Plan
specified by the Distributee.
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<PAGE>
DISTRIBUTEE means an Employee or former Employee. In addition, the
Employee's or former Employee's surviving spouse and the Employee's or
former Employee's spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in Code Section 414(p), are
Distributees with regard to the interest of the spouse or former spouse.
EARLY RETIREMENT DATE means the first day of any month before a
Participant's Normal Retirement Date which the Participant selects for the
start of his retirement benefit. This day shall be on or after the date on
which he ceases to be an Employee and the date he meets the following
requirement(s):
(a) He has attained age 55.
ELECTIVE DEFERRAL CONTRIBUTIONS means Contributions made by the Employer to
fund this Plan in accordance with a qualified cash or deferred arrangement
as described in Code Section 401(k). See the EMPLOYER CONTRIBUTIONS SECTION
of Article III.
ELIGIBILITY BREAK IN SERVICE means an Eligibility Computation Period in
which an Employee is credited with 500 or fewer Hours-of-Service. An
Employee incurs an Eligibility Break in Service on the last day of an
Eligibility Computation Period in which he has an Eligibility Break in
Service.
ELIGIBILITY COMPUTATION PERIOD means a 12-consecutive month period. The
first Eligibility Computation Period begins on an Employee's Employment
Commencement Date. Later Eligibility Computation Periods shall be 12-
consecutive month periods ending on the last day of each Plan Year that
begins after his Employment Commencement Date.
To determine an Eligibility Computation Period after an Eligibility Break in
Service, the Plan shall use the 12-consecutive month period beginning on an
Employee's Reemployment Commencement Date as if his Reemployment
Commencement Date were his Employment Commencement Date.
ELIGIBILITY SERVICE means one year of service for each Eligibility
Computation Period that has ended and in which an Employee is credited with
at least 1,000 Hours-of-Service.
However, Eligibility Service is modified as follows:
Predecessor Employer service included:
An Employee's service with a Predecessor Employer shall be included as
service with the Employer. This service excludes service performed
while a proprietor or partner.
Period of Military Duty included:
A Period of Military Duty shall be included as service with the
Employer to the extent it has not already been credited. For purposes
of crediting Hours-of-Service during the Period of Military Duty, an
Hour-of-Service shall be credited (without regard to the 501 Hour-of-
Service limitation) for each hour an Employee would normally have been
scheduled to work for the Employer during such period.
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<PAGE>
Controlled Group service included:
An Employee's service with a member firm of a Controlled Group while
both that firm and the Employer were members of the Controlled Group
shall be included as service with the Employer.
ELIGIBLE EMPLOYEE means any Employee of the Employer.
ELIGIBLE RETIREMENT PLAN means an individual retirement account described in
Code Section 408(a), an individual retirement annuity described in Code
Section 408(b), an annuity plan described in Code Section 403(a) or a
qualified trust described in Code Section 401(a), that accepts the
Distributee's Eligible Rollover Distribution.
However, in the case of an Eligible Rollover Distribution to the surviving
spouse, an Eligible Retirement Plan is an individual retirement account or
individual retirement annuity.
ELIGIBLE ROLLOVER DISTRIBUTION means 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:
(a) Any distribution that is one of a series of substantially equal periodic
payments (not less frequently than annually) made for the life (or life
expectancy) of the Distributee or the joint lives (or joint life
expectancies) of the Distributee and the Distributee's designated
Beneficiary, or for a specified period of ten years or more.
(b) Any distribution to the extent such distribution is required under Code
Section 401(a)(9).
(c) The portion of any distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
EMPLOYEE means an individual who is employed by the Employer or any other
employer required to be aggregated with the Employer under Code Sections
414(b), (c), (m) or (o). A Controlled Group member is required to be
aggregated with the Employer.
The term Employee shall also include any Leased Employee deemed to be an
employee of any employer described in the preceding paragraph as provided in
Code Sections 414(n) or 414(o).
EMPLOYER means the Primary Employer. This will also include any successor
corporation or firm of the Employer which shall, by written agreement,
assume the obligations of this Plan or any predecessor corporation or firm
of the Employer (absorbed by the Employer, or of which the Employer was once
a part) which became a predecessor because of a change of name, merger,
purchase of stock or purchase of assets and which maintained this Plan.
EMPLOYER CONTRIBUTIONS means
Elective Deferral Contributions
Matching Contributions
as set out in Article III, unless the context clearly indicates otherwise.
EMPLOYMENT COMMENCEMENT DATE means the date an Employee first performs an
Hour-of-Service.
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<PAGE>
ENTRY DATE means the date an Employee first enters the Plan as an Active
Participant. See the ACTIVE PARTICIPANT SECTION of Article II.
FISCAL YEAR means the Primary Employer's taxable year. The last day of the
Fiscal Year is December 31.
FORFEITURE means the part, if any, of a Participant's Account that is
forfeited. See the FORFEITURES SECTION of Article III.
FORFEITURE DATE means, as to a Participant, the date the Participant incurs
five consecutive Vesting Breaks in Service. A Participant incurs a Vesting
Break in Service on the last day of the period used to determine the Vesting
Break in Service.
This is the date on which the Participant's Nonvested Account will be
forfeited unless an earlier forfeiture occurs as provided in the FORFEITURES
SECTION of Article III.
GROUP CONTRACT means the group annuity contract or contracts into which the
Trustee enters with the Insurer for the investment of Contributions and the
payment of benefits under this Plan. The term Group Contract as it is used
in this Plan is deemed to include the plural unless the context clearly
indicates otherwise.
HIGHLY COMPENSATED EMPLOYEE means a highly compensated active Employee or a
highly compensated former Employee.
A highly compensated active Employee means any Employee who performs service
for the Employer during the determination year and who, during the look-back
year is:
(a) An Employee who is a 5% owner, as defined in Section 416(i)(1)(B)(i), at
any time during the determination year or the look-back year.
(b) An Employee who receives compensation in excess of $75,000 (indexed in
accordance with Section 415(d) during the look-back year.
(c) An Employee who receives compensation in excess of $50,000 (indexed in
accordance with Section 415(d) during the look-back year and is a member
of the top-paid group for the look-back year.
(d) An Employee who is an officer, within the meaning of Section 416(i),
during the look-back year and who receives compensation in the look-back
year greater than 50% of the dollar limitation in effect under Section
415(b)(1)(A) for the calendar year in which the look-back year begins.
The number of officers is limited to 50 (or, if lesser, the greater of 3
employees or 10% of employees) excluding those employees who may be
excluded in determining the top-paid group.
(e) An Employee who is both described in paragraph b, c or d above when
these paragraphs are modified to substitute the determination year for
the look-back year and one of the 100 Employees who receive the most
compensation from the Employer during the determination year.
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<PAGE>
If no officer has satisfied the compensation requirement of (c) above during
either a determination year or look-back year, the highest paid officer for
such year shall be treated as a Highly Compensated Employee.
For this purpose, the determination year shall be the Plan Year. The look-
back year shall be the twelve-month period immediately preceding the
determination year.
A highly compensated former Employee means any Employee who separated from
service (or was deemed to have separated) prior to the determination year,
performs no service for the Employer during the determination year, and was
a highly compensated active Employee for either the separation year or any
determination year ending on or after the Employee's 55th birthday.
If an Employee is, during a determination year or look-back year, a family
member of either a 5 percent owner who is an active or former Employee or a
Highly Compensated Employee who is one of the 10 most highly compensated
Employees ranked on the basis of compensation paid by the Employer during
such year, then the family member and the 5 percent owner or top-ten highly
compensated Employee shall be aggregated. In such case, the family member
and 5 percent owner or top-ten highly compensated Employee shall be treated
as a single Employee receiving compensation and Plan contributions or
benefits equal to the sum of such compensation and contributions or benefits
of the family member and 5 percent owner or top-ten highly compensated
Employee. For purposes of this definition, family member includes the
spouse, lineal ascendants and descendants of the Employee or former Employee
and the spouses of such lineal ascendants and descendants.
Compensation is compensation within the meaning of Code Section 415(c)(3),
including elective or salary reduction contributions to a cafeteria plan,
cash or deferred arrangement or tax-sheltered annuity. The top-paid group
consists of the top 20% of employees ranked on the basis of compensation
received during the year.
Employers aggregated under Section 414(b), (c), (m) or (o) are treated as a
single Employer.
HOUR-OF-SERVICE means, for the elapsed time method of crediting service in
this Plan, each hour for which an Employee is paid, or entitled to payment,
for performing duties for the Employer. Hour-of-Service means, for the
hours method of crediting service in this Plan, the following:
(a) Each hour for which an Employee is paid, or entitled to payment, for
performing duties for the Employer during the applicable computation
period.
(b) Each hour for which an Employee is paid, or entitled to payment, by the
Employer because of a period of time in 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. Notwithstanding
the preceding provisions of this subparagraph (b), no credit will be
given to the Employee
(1) for more than 501 Hours-of-Service under this subparagraph (b)
because of any single continuous period in which the Employee
performs no duties (whether or not such period occurs in a single
computation period); or
(2) for an Hour-of-Service for which the Employee is directly or
indirectly paid, or entitled to payment, because of a period in
which no duties are performed if such payment is made or
8
<PAGE>
due under a plan maintained solely for the purpose of complying with
applicable worker's or workmen's compensation, or unemployment
compensation or disability insurance laws; or
(3) for an Hour-of-Service for a payment which solely reimburses the
Employee for medical or medically related expenses incurred by him.
For purposes of this subparagraph (b), a payment shall be deemed to be
made by, or due from the Employer, regardless of whether such payment is
made by, or due from the Employer, directly or indirectly through, among
others, a trust fund or insurer, to which the Employer contributes or
pays premiums and regardless of whether contributions made or due to the
trust fund, insurer or other entity are for the benefit of particular
employees or are on behalf of a group of employees in the aggregate.
(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 subparagraph (a) or subparagraph (b)
above (as the case may be) and under this subparagraph (c). Crediting
of Hours-of-Service for back pay awarded or agreed to with respect to
periods described in subparagraph (b) above will be subject to the
limitations set forth in that subparagraph.
The crediting of Hours-of-Service above shall be applied under the rules of
paragraphs (b) and (c) of the Department of Labor Regulation 2530.200b-2
(including any interpretations or opinions implementing said rules); which
rules, by this reference, are specifically incorporated in full within this
Plan. The reference to paragraph (b) applies to the special rule for
determining hours of service for reasons other than the performance of
duties such as payments calculated (or not calculated) on the basis of units
of time and the rule against double credit. The reference to paragraph (c)
applies to the crediting of hours of service to computation periods.
Hours-of-Service shall be credited for employment with any other employer
required to be aggregated with the Employer under Code Sections 414(b), (c),
(m) or (o) and the regulations thereunder for purposes of eligibility and
vesting. Hours-of-Service shall also be credited for any individual who is
considered an employee for purposes of this Plan pursuant to Code Section
414(n) or Code Section 414(o) and the regulations thereunder.
Solely for purposes of determining whether a one-year break in service has
occurred for eligibility or vesting purposes, during a Parental Absence an
Employee shall be credited with the Hours-of-Service which otherwise would
normally have been credited to the Employee but for such absence, or in any
case in which such hours cannot be determined, eight Hours-of-Service per
day of such absence. The Hours-of-Service credited under this paragraph
shall be credited in the computation period in which the absence begins if
the crediting is necessary to prevent a break in service in that period; or
in all other cases, in the following computation period.
INACTIVE PARTICIPANT means a former Active Participant who has an Account.
See the INACTIVE PARTICIPANT SECTION of Article II.
INSURER means Principal Mutual Life Insurance Company and any other
insurance company or companies named by the Trustee or Primary Employer.
INVESTMENT FUND means the assets held for the purpose of providing benefits
for Participants. These funds result from Contributions made under the
Plan.
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INVESTMENT MANAGER means any fiduciary (other than a trustee or Named
Fiduciary)
(a) who has the power to manage, acquire, or dispose of any assets of the
Plan; and
(b) who (1) is registered as an investment adviser under the Investment
Advisers Act of 1940, or (2) is a bank, as defined in the Investment
Advisers Act of 1940, or (3) is an insurance company qualified to
perform services described in subparagraph (a) above under the laws of
more than one state; and
(c) who has acknowledged in writing being a fiduciary with respect to the
Plan.
LATE RETIREMENT DATE means the first day of any month which is after a
Participant's Normal Retirement Date and on which retirement benefits begin.
If a Participant continues to work for the Employer after his Normal
Retirement Date, his Late Retirement Date shall be the earliest first day of
the month on or after he ceases to be an Employee. An earlier or a later
Retirement Date may apply if the Participant so elects. An earlier
Retirement Date may apply if the Participant is age 70 1/2. See the WHEN
BENEFITS START SECTION of Article V.
LEASED EMPLOYEE means any person (other than an employee of the recipient)
who pursuant to an agreement between the recipient and any other person
("leasing organization") has performed services for the recipient (or for
the recipient and related persons determined in accordance with Code Section
414(n)(6)) on a substantially full time basis for a period of at least one
year, and such services are of a type historically performed by employees in
the business field of the recipient employer. Contributions or benefits
provided a Leased Employee by the leasing organization which are
attributable to service performed for the recipient employer shall be
treated as provided by the recipient employer.
A Leased Employee shall not be considered an employee of the recipient if:
(a) such employee is covered by a money purchase pension plan providing (1)
a nonintegrated employer contribution rate of at least 10 percent of
compensation, as defined in Code Section 415(c)(3), but including
amounts contributed pursuant to a salary reduction agreement which are
excludable from the employee's gross income under Code Sections 125,
402(e)(3), 402(h) or 403(b), (2) immediate participation, and (3) full
and immediate vesting and
(b) Leased Employees do not constitute more than 20 percent of the
recipient's nonhighly compensated workforce.
LOAN ADMINISTRATOR means the person or positions authorized to administer
the Participant loan program.
The Loan Administrator is Jeffrey A. Stevens.
MATCHING CONTRIBUTIONS means matching contributions made by the Employer to
fund this Plan. See the EMPLOYER CONTRIBUTIONS SECTION of Article III.
MONTHLY DATE means each Yearly Date and the same day of each following month
during the Plan Year beginning on such Yearly Date.
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NAMED FIDUCIARY means the person or persons who have authority to control
and manage the operation and administration of the Plan.
The Named Fiduciary is the Employer.
NONHIGHLY COMPENSATED EMPLOYEE means an Employee of the Employer who is
neither a Highly Compensated Employee nor a family member.
NONVESTED ACCOUNT means the part, if any, of a Participant's Account that is
in excess of his Vested Account.
NORMAL FORM means a single life annuity with installment refund.
NORMAL RETIREMENT AGE means the age at which the Participant's normal
retirement benefit becomes nonforfeitable. A Participant's Normal
Retirement Age is 65.
NORMAL RETIREMENT DATE means the earliest first day of the month on or after
the date the Participant reaches his Normal Retirement Age. Unless
otherwise provided in this Plan, a Participant's retirement benefits shall
begin on a Participant's Normal Retirement Date if he has ceased to be an
Employee on such date and has a Vested Account. Even if the Participant is
an Employee on his Normal Retirement Date, he may choose to have his
retirement benefit begin on such date. See the WHEN BENEFITS START SECTION
of Article V.
PARENTAL ABSENCE means an Employee's absence from work which begins on or
after the first Yearly Date after December 31, 1984,
(a) by reason of pregnancy of the Employee,
(b) by reason of birth of a child of the Employee,
(c) by reason of the placement of a child with the Employee in connection
with adoption of such child by such Employee, or
(d) for purposes of caring for such child for a period beginning immediately
following such birth or placement.
PARTICIPANT means either an Active Participant or an Inactive Participant.
PERIOD OF MILITARY DUTY means, for an Employee
(a) who served as a member of the armed forces of the United States, and
(b) who was reemployed by the Employer at a time when the Employee had a
right to reemployment in accordance with seniority rights as protected
under Section 2021 through 2026 of Title 38 of the U. S. Code,
the period of time from the date the Employee was first absent from active
work for the Employer because of such military duty to the date the Employee
was reemployed.
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PERIOD OF SERVICE means a period of time beginning on an Employee's
Employment Commencement Date or Reemployment Commencement Date (whichever
applies) and ending on his Severance from Service Date.
PERIOD OF SEVERANCE means a period of time beginning on an Employee's
Severance from Service Date and ending on the date he again performs an
Hour-of-Service.
A one-year Period of Severance means a Period of Severance of 12 consecutive
months.
Solely for purposes of determining whether a one-year Period of Severance
has occurred for eligibility or vesting purposes, the 12-consecutive month
period beginning on the first anniversary of the first date of a Parental
Absence shall not be a one-year Period of Severance.
PLAN means the 401(k) savings plan of the Employer set forth in this
document, including any later amendments to it.
PLAN ADMINISTRATOR means the person or persons who administer the Plan.
The Plan Administrator is the Employer.
PLAN YEAR means a period beginning on a Yearly Date and ending on the day
before the next Yearly Date.
PREDECESSOR EMPLOYER means a firm absorbed by the Employer by change of
name, merger, acquisition or a change of corporate status, or a firm of
which the Employer was once a part.
PRIMARY EMPLOYER means Integrated Orthopaedics, Inc.
QUALIFIED JOINT AND SURVIVOR FORM means, for a Participant who has a spouse,
an immediate survivorship life annuity with installment refund, where the
survivorship percentage is 50% and the Contingent Annuitant is the
Participant's spouse. A former spouse will be treated as the spouse to the
extent provided under a qualified domestic relations order as described in
Code Section 414(p). If a Participant does not have a spouse, the Qualified
Joint and Survivor Form means the Normal Form.
The amount of benefit payable under the Qualified Joint and Survivor Form
shall be the amount of benefit which may be provided by the Participant's
Vested Account.
QUALIFIED PRERETIREMENT SURVIVOR ANNUITY means a single life annuity with
installment refund payable to the surviving spouse of a Participant who dies
before his Annuity Starting Date. A former spouse will be treated as the
surviving spouse to the extent provided under a qualified domestic relations
order as described in Code Section 414(p).
QUALIFYING EMPLOYER SECURITIES means any instrument issued by the Employer
and meeting the requirements of Section 4975(e)(8) of the Code and Section
407(d)(5) of the Employee Retirement Income Securities Act of 1974, as
amended ("ERISA").
QUALIFYING EMPLOYER SECURITIES FUND means the assets held in Qualifying
Employer Securities for the purpose of providing benefits for Participants.
This fund results from Contributions made under the Plan.
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REEMPLOYMENT COMMENCEMENT DATE means the date an Employee first performs an
Hour-of-Service following an Eligibility Break in Service.
REENTRY DATE means the date a former Active Participant reenters the Plan.
See the ACTIVE PARTICIPANT SECTION of Article II.
RETIREMENT DATE means the date a retirement benefit will begin and is a
Participant's Early, Normal or Late Retirement Date, as the case may be.
ROLLOVER CONTRIBUTIONS means the Rollover Contributions which are made by or
for a Participant according to the provisions of the ROLLOVER CONTRIBUTIONS
SECTION of Article III.
SEVERANCE FROM SERVICE DATE means the earlier of
(a) the date on which an Employee quits, retires, dies or is discharged, or
(b) the first anniversary of the date an Employee begins a one-year absence
from service (with or without pay). This absence may be the result of
any combination of vacation, holiday, sickness, disability, leave of
absence or layoff.
Solely to determine whether a one-year Period of Severance has occurred for
eligibility or vesting purposes for an Employee who is absent from service
beyond the first anniversary of the first day of a Parental Absence,
Severance from Service Date is the second anniversary of the first day of
the Parental Absence. The period between the first and second anniversaries
of the first day of the Parental Absence is not a Period of Service and is
not a Period of Severance.
TEFRA means the Tax Equity and Fiscal Responsibility Act of 1982.
TEFRA COMPLIANCE DATE means the date a plan is to comply with the provisions
of TEFRA. The TEFRA Compliance Date as used in this Plan is,
(a) for purposes of contribution limitations, Code Section 415,
(1) if the plan was in effect on July 1, 1982, the first day of the
first limitation year which begins after December 31, 1982, or
(2) if the plan was not in effect on July 1, 1982, the first day of the
first limitation year which ends after July 1, 1982.
(b) for all other purposes, the first Yearly Date after December 31, 1983.
TOTALLY AND PERMANENTLY DISABLED means that a Participant is disabled, as a
result of sickness or injury, to the extent that he is prevented from
engaging in any substantial gainful activity, and is eligible for and
receives a disability benefit under Title II of the Federal Social Security
Act.
TRUST means an agreement of trust between the Primary Employer and Trustee
established for the purpose of holding and distributing the Trust Fund under
the provisions of the Plan. The Trust may provide for the investment of all
or any portion of the Trust Fund in the Group Contract.
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TRUST FUND means the total funds held under the Trust for the purpose of
providing benefits for Participants. These funds result from Contributions
made under the Plan which are forwarded to the Trustee to be deposited in
the Trust Fund.
TRUSTEE means the trustee or trustees under the Trust. The term Trustee as
it is used in this Plan is deemed to include the plural unless the context
clearly indicates otherwise.
VALUATION DATE means the date on which the value of the assets of the Trust
is determined. The value of each Account which is maintained under this
Plan shall be determined on the Valuation Date. In each Plan Year, the
Valuation Date shall be the last day of the Plan Year. In addition, the
Plan Administrator may designate from time to time, so long as the Trustee
agrees, that another date or dates shall be the Valuation Dates with respect
to a specific Plan Year.
VESTED ACCOUNT means the vested part of a Participant's Account. The
Participant's Vested Account is determined as follows.
If the Participant's Vesting Percentage is 100%, his Vested Account equals
his Account.
If the Participant's Vesting Percentage is less than 100%, his Vested
Account equals the sum of (a) and (b) below:
(a) The part of the Participant's Account that results from Employer
Contributions made before a prior Forfeiture Date and all other
Contributions which were 100% vested when made.
(b) The balance of the Participant's Account in excess of the amount in (a)
above multiplied by his Vesting Percentage.
If the Participant has withdrawn any part of his Account resulting from
Employer Contributions, other than the vested Employer Contributions
included in (a) above, the amount determined under this subparagraph (b)
shall be equal to P(AB + D) - D as defined below:
P The Participant's Vesting Percentage.
AB The balance of the Participant's Account in excess of the amount in (a)
above.
D The amount of withdrawal resulting from Employer Contributions, other
than the vested Employer Contributions included in (a) above.
The Participant's Vested Account is nonforfeitable.
VESTING PERCENTAGE means the percentage used to determine the nonforfeitable
portion of a Participant's Account attributable to Employer Contributions
which were not 100% vested when made.
A Participant's Vesting Percentage is shown in the following schedule
opposite the number of whole years of his Vesting Service.
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VESTING SERVICE VESTING
(whole years) PERCENTAGE
Less than 1 0
1 25
2 50
3 75
4 or more 100
However, the Vesting Percentage for a Participant who is an Employee on or
after the earliest of (i) the date he reaches his Normal Retirement Age,
(ii) the date of his death, (iii) the date he meets the requirement(s) for
an Early Retirement Date, or (iv) the date he becomes Totally and
Permanently Disabled, shall be 100% on such date.
If the schedule used to determine a Participant's Vesting Percentage is
changed, the new schedule shall not apply to a Participant unless he is
credited with an Hour-of-Service on or after the date of the change and the
Participant's nonforfeitable percentage on the day before the date of the
change is not reduced under this Plan. The amendment provisions of the
AMENDMENT SECTION of Article IX regarding changes in the computation of the
Vesting Percentage shall apply.
VESTING SERVICE means an Employee's Period of Service. If he has more than
one Period of Service or if all or a part of a Period of Service is not
counted, his Vesting Service shall be determined by adjusting his Employment
Commencement Date so that he has one continuous period of Vesting Service
equal to the aggregate of all his countable Periods of Service. This period
of Vesting Service shall be expressed as whole years and fractional parts of
a year (to two decimal places) on the basis that 365 days equal one year.
However, Vesting Service is modified as follows:
Predecessor Employer service included:
An Employee's service with a Predecessor Employer shall be included as
service with the Employer. This service excludes service performed
while a proprietor or partner.
Period of Military Duty included:
A Period of Military Duty shall be included as service with the
Employer to the extent it has not already been credited.
Period of Severance included (service spanning rule):
A Period of Severance shall be deemed to be a Period of Service under
either of the following conditions:
(a) the Period of Severance immediately follows a period during which an
Employee is not absent from work and ends within 12 months; or
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(b) the Period of Severance immediately follows a period during which an
Employee is absent from work for any reason other than quitting,
being discharged or retiring (such as a leave of absence or layoff)
and ends within 12 months of the date he was first absent.
Controlled Group service included:
An Employee's service with a member firm of a Controlled Group while
both that firm and the Employer were members of the Controlled Group
shall be included as service with the Employer.
YEARLY DATE means January 1, 1991 and the same day of each following year.
YEARS OF SERVICE means an Employee's Vesting Service disregarding any
modifications which exclude service.
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ARTICLE II
PARTICIPATION
SECTION 2.01--ACTIVE PARTICIPANT.
(a) For purposes of Elective Deferral Contributions, an Employee shall first
become an Active Participant (begin active participation in the Plan) on
the earliest Monthly Date on or after April 1, 1998, on which he is an
Eligible Employee. This is his Entry Date.
For purposes of Employer Contributions other than Elective Deferral
Contributions, an Employee shall first become an Active Participant
(begin active participation in the Plan) on the earliest Monthly Date on
or after April 1, 1998, on which he is an Eligible Employee and has met
the eligibility requirement set forth below. This date is his Entry
Date.
(1) He has completed one year of Eligibility Service before his Entry
Date.
Each Employee who was an Active Participant under the Plan on March
31, 1998, shall continue to be an Active Participant if he is still an
Eligible Employee on April 1, 1998, and his Entry Date shall not change.
If a person has been an Eligible Employee who has met all the
eligibility requirements above, but is not an Eligible Employee on the
date which would have been his Entry Date, he shall become an Active
Participant on the date he again becomes an Eligible Employee. This
date is his Entry Date.
(b) An Inactive Participant shall again become an Active Participant (resume
active participation in the Plan) on the date he again performs an Hour-
of-Service as an Eligible Employee. This date is his Reentry Date.
Upon again becoming an Active Participant, he shall cease to be an
Inactive Participant.
(c) A former Participant shall again become an Active Participant (resume
active participation in the Plan) on the date he again performs an Hour-
of-Service as an Eligible Employee. This date is his Reentry Date.
There shall be no duplication of benefits for a Participant under this Plan
because of more than one period as an Active Participant.
SECTION 2.02--INACTIVE PARTICIPANT.
An Active Participant shall become an Inactive Participant (stop accruing
benefits under the Plan) on the earlier of the following:
(a) The date on which he ceases to be an Eligible Employee (on his
Retirement Date if the date he ceases to be an Eligible Employee occurs
within one month of his Retirement Date).
(b) The effective date of complete termination of the Plan.
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An Employee or former Employee who was an Inactive Participant under the
Plan on March 31, 1998, shall continue to be an Inactive Participant on April 1,
1998. Eligibility for any benefits payable to him or on his behalf and the
amount of the benefits shall be determined according to the provisions of the
prior document, unless otherwise stated in this document.
SECTION 2.03--CESSATION OF PARTICIPATION.
A Participant shall cease to be a Participant on the date he is no longer an
Eligible Employee and his Account is zero.
SECTION 2.04--ADOPTING EMPLOYERS - SINGLE PLAN.
Each of the employers controlled by or affiliated with the Employer and
listed below is an Adopting Employer. Each Adopting Employer listed below
participates with the Employer in this Plan. An Adopting Employer's agreement
to participate in this Plan shall be in writing.
If the Adopting Employer did not maintain its plan before its date of
adoption specified below, its date of adoption shall be the Entry Date for any
of its employees who have met the requirements in the ACTIVE PARTICIPANT SECTION
of Article II as of that date. Service with and earnings from an Adopting
Employer shall be included as service with and earnings from the Employer.
Transfer of employment, without interruption, between an Adopting Employer and
another Adopting Employer or the Employer shall not be considered an
interruption of service.
Contributions made by an Adopting Employer shall be treated as Contributions
made by the Employer. Forfeitures arising from those Contributions shall be
used for the benefit of all Participants.
An employer shall not be an Adopting Employer if it ceases to be controlled
by or affiliated with the Employer. Such an employer may continue a retirement
plan for its employees in the form of a separate document. This Plan shall be
amended to delete a former Adopting Employer from the list below.
If an employer ceases to be an Adopting Employer and does not continue a
retirement plan for the benefit of its employees, partial termination may result
and the provisions of Article VII apply.
ADOPTING EMPLOYERS
NAME FISCAL YEAR END DATE OF ADOPTION
IOI MANAGEMENT SERVICES December 31 October 1, 1997
OF CONNECTICUT, INC.
IOI MANAGEMENT SERVICES December 31 November 1, 1997
OF LOUISIANA, INC.
IOI MANAGEMENT SERVICES December 31 December 1, 1997
OF PENNSYLVANIA, INC.
IOI MANAGEMENT SERVICES December 31 November 16, 1993
OF HOUSTON, INC.
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ARTICLE III
CONTRIBUTIONS
SECTION 3.01--EMPLOYER CONTRIBUTIONS.
Employer Contributions for Plan Years which end on or after April 1, 1998,
may be made without regard to current or accumulated net income, earnings, or
profits of the Employer. Notwithstanding the foregoing, the Plan shall continue
to be designed to qualify as a profit sharing plan for purposes of Code Sections
401(a), 402, 412, and 417. Such Contributions will be equal to the Employer
Contributions as described below:
(a) The amount of each Elective Deferral Contribution for a Participant
shall be equal to any percentage of his Compensation as elected in his
elective deferral agreement. An Employee who is eligible to participate
in the Plan may file an elective deferral agreement with the Employer.
The elective deferral agreement to start Elective Deferral Contributions
may be effective on a Participant's Entry Date (Reentry Date, if
applicable) or any following Monthly Date. The Participant shall make
any change or terminate the elective deferral agreement by filing a new
elective deferral agreement. A Participant's elective deferral
agreement making a change may be effective on any date an elective
deferral agreement to start Elective Deferral Contributions could be
effective. A Participant's elective deferral agreement to stop Elective
Deferral Contributions may be effective on any date. A Participant may
not defer more than 20% of his Compensation for the Plan Year. The
elective deferral agreement must be in writing and effective before the
beginning of the pay period in which Elective Deferral Contributions are
to start, change or stop.
Elective Deferral Contributions are fully (100%) vested and
nonforfeitable.
(b) The amount of each Matching Contribution for a Participant eligible for
an allocation for the Plan Year shall be equal to a percentage (not more
than 100%) as determined by the Employer, of the Elective Deferral
Contributions made for him for Plan Year, disregarding any Elective
Deferral Contributions in excess of a percentage as determined by the
Employer, of his Compensation for the Plan Year.
Matching Contributions are subject to the Vesting Percentage.
No Participant shall be permitted to have Elective Deferral Contributions,
as defined in the EXCESS AMOUNTS SECTION of Article III, made under this Plan,
or any other qualified plan maintained by the Employer, during any taxable year,
in excess of the dollar limitation contained in Code Section 402(g) in effect at
the beginning of such taxable year.
The Employer shall pay to the Trustee its Contributions used to determine
the Actual Deferral Percentage, as defined in the EXCESS AMOUNTS SECTION of
Article III, to the Plan for each Plan Year not later than the end of the
twelve-month period immediately following the Plan Year for which they are
deemed to be paid. Any such Contributions accumulated through payroll
deductions shall be paid within 90 days of the date withheld or the date it is
first reasonably practical for the Employer to do so, if earlier.
A portion of the Plan assets resulting from Employer Contributions (but not
more than the original amount of those Contributions and reduced proportionately
for losses, if applicable) may be returned if the Employer Contributions are
made because of a mistake of fact or are more than the amount deductible under
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<PAGE>
Code Section 404 (excluding any amount which is not deductible because the Plan
is disqualified). The amount involved must be returned to the Employer within
one year after the date the Employer Contributions are made by mistake of fact
or the date the deduction is disallowed, whichever applies. Except as provided
under this paragraph and Article VII, the assets of the Plan shall never be used
for the benefit of the Employer and are held for the exclusive purpose of
providing benefits to Participants and their Beneficiaries and for defraying
reasonable expenses of administering the Plan.
SECTION 3.01A--ROLLOVER CONTRIBUTIONS.
A Rollover Contribution may be made by or for an Eligible Employee if the
following conditions are met:
(a) The Contribution is a rollover contribution which the Code permits to be
transferred to a plan that meets the requirements of Code Section
401(a).
(b) If the Contribution is made by the Eligible Employee, it is made within
sixty days after he receives the distribution.
(c) The Eligible Employee furnishes evidence satisfactory to the Plan
Administrator that the proposed transfer is in fact a rollover
contribution that meets conditions (a) and (b) above.
The Rollover Contribution may be made by the Eligible Employee or the
Eligible Employee may direct the trustee or named fiduciary of another plan to
transfer the funds which would otherwise be a Rollover Contribution directly to
this Plan. Such transferred funds shall be called a Rollover Contribution. The
Contribution shall be made according to procedures set up by the Plan
Administrator.
If the Eligible Employee is not an Active Participant at the time the
Rollover Contribution is made, he shall be deemed to be a Participant only for
the purposes of investment and distribution of the Rollover Contribution. He
shall not share in the allocation of Employer Contributions until the time he
meets all the requirements to become an Active Participant.
Rollover Contributions made by or for an Eligible Employee shall be credited
to his Account. The part of the Participant's Account resulting from Rollover
Contributions is fully (100%) vested and nonforfeitable at all times. A
separate accounting record shall be maintained for that part of his Rollover
Contribution which consists of voluntary contributions that were deducted from
the Participant's gross income for Federal income tax purposes.
SECTION 3.02--FORFEITURES.
The Nonvested Account of a Participant shall be forfeited as of the earlier
of the following: the date of the Participant's death, if prior to such date he
had ceased to be an Employee; or his Forfeiture Date. All or a part of a
Participant's Nonvested Account will be forfeited if, after he ceases to be an
Employee, he receives a distribution of his entire Vested Account or a
distribution of his Vested Account derived from Employer Contributions which
were not 100% vested when made according to the provisions of the VESTED
BENEFITS SECTION of Article V or the SMALL AMOUNTS SECTION of Article IX. If a
Participant's Vested Account is zero on the date he ceases to be an Employee, he
shall be deemed to have received a distribution of his entire Vested Account on
such date. The forfeiture will occur as of the date he receives the
distribution or on the date such provision became effective, if later. If he
receives a distribution of his entire Vested Account, his entire Nonvested
Account will be forfeited. If he receives a distribution of his Vested Account
from Employer Contributions which were not 100% vested when made, but less than
his entire Vested Account, the amount
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<PAGE>
to be forfeited will be determined by multiplying his Nonvested Account by a
fraction. The numerator of the fraction is the amount of the distribution
derived from Employer Contributions which were not 100% vested when made and the
denominator of the fraction is his entire Vested Account derived from such
Employer Contributions on the date of distribution.
A Forfeiture shall also occur as described in the EXCESS AMOUNTS SECTION of
Article III.
Forfeitures may first be applied to pay administrative expenses under the
Plan which would otherwise be paid by the Employer.
Forfeitures not used to pay administrative expenses shall be applied to
reduce the earliest Employer Contributions made after the Forfeitures are
determined. Forfeitures shall be determined at least once during each taxable
year of the Employer. Upon their application, such Forfeitures shall be deemed
to be Employer Contributions.
Forfeitures of Matching Contributions which relate to excess amounts shall
be applied as provided in the EXCESS AMOUNTS SECTION of Article III.
If a Participant again becomes an Eligible Employee after receiving a
distribution which caused his Nonvested Account to be forfeited, he shall have
the right to repay to the Plan the entire amount of the distribution he received
(excluding any amount of such distribution resulting from Contributions which
were 100% vested when made). The repayment must be made before the earlier of
the date five years after the date he again becomes an Eligible Employee or the
end of the first period of five consecutive one-year Periods of Severance which
begin after the date of the distribution.
If the Participant makes the repayment provided above, the Plan
Administrator shall restore to his Account an amount equal to his Nonvested
Account which was forfeited on the date of distribution, unadjusted for any
investment gains or losses. If the amount of the repayment is zero dollars
because the Participant was deemed to have received a distribution or the plan
did not have repayment provisions in effect on the date the distribution was
made and he again performs an Hour-of-Service as an Eligible Employee within the
repayment period, the Plan Administrator shall restore the Participant's Account
as if he had made a required repayment on the date he performed such Hour-of-
Service. Restoration of the Participant's Account shall include restoration of
all Code Section 411(d)(6) protected benefits with respect to that restored
Account, according to applicable Treasury regulations. Provided, however, the
Plan Administrator shall not restore the Nonvested Account if a Forfeiture Date
has occurred after the date of the distribution and on or before the date of
repayment and that Forfeiture Date would result in a complete forfeiture of the
amount the Plan Administrator would otherwise restore.
The Plan Administrator shall restore the Participant's Account by the close
of the Plan Year following the Plan Year in which repayment is made.
Permissible sources for restoration are Forfeitures or Employer Contributions.
The Employer shall contribute, without regard to any requirement or condition of
the EMPLOYER CONTRIBUTIONS SECTION of Article III, such additional amount needed
to make the required restoration. The repaid and restored amounts are not
included in the Participant's Annual Addition, as defined in the CONTRIBUTION
LIMITATION SECTION of Article III.
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SECTION 3.03--ALLOCATION.
The following Contributions for the Plan Year shall be allocated among all
eligible persons:
Matching Contributions
The eligible persons are all Participants and former Participants who (i)
are Active Participants on the last day of the Plan Year or (ii) were Active
Participants at any time in the Plan Year and have died, retired or become
Totally and Permanently Disabled. The amount allocated to such a person shall
be determined below and under Article X.
The following Contributions for each Plan Year shall be allocated to each
Participant for whom such Contributions were made under the EMPLOYER
CONTRIBUTIONS SECTION of Article III:
Elective Deferral Contributions
These Contributions shall be allocated when made and credited to the
Participant's Account.
In determining the amount of Employer Contributions to be allocated to a
Participant who is a Leased Employee, contributions and benefits provided by the
leasing organization which are attributable to services such Leased Employee
performs for the Employer shall be treated as provided by the Employer and there
shall be no duplication of those contributions or benefits under this Plan.
SECTION 3.04--CONTRIBUTION LIMITATION.
(a) For the purpose of determining the contribution limitation set forth in
this section, the following terms are defined:
Aggregate Annual Addition means, for a Participant with respect to any
Limitation Year, the sum of his Annual Additions under all defined
contribution plans of the Employer, as defined in this section, for such
Limitation Year. The nondeductible participant contributions which the
Participant makes to a defined benefit plan shall be treated as Annual
Additions to a defined contribution plan. The Contributions the
Employer, as defined in this section, made for the Participant for a
Plan Year beginning on or after March 31, 1984, to an individual medical
benefit account, as defined in Code Section 415(l)(2), under a pension
or annuity plan of the Employer, as defined in this section, shall be
treated as Annual Additions to a defined contribution plan. Also,
amounts derived from contributions paid or accrued after December 31,
1985, in Fiscal Years ending after such date, which are attributable to
post-retirement medical benefits allocated to the separate account of a
key employee, as defined in Code Section 419A(d)(3), under a welfare
benefit fund, as defined in Code Section 419(e), maintained by the
Employer, as defined in this section, are treated as Annual Additions to
a defined contribution plan. The 25% of Compensation limit under
Maximum Permissible Amount does not apply to Annual Additions resulting
from contributions made to an individual medical account, as defined in
Code Section 415(l)(2), or to Annual Additions resulting from
contributions for medical benefits, within the meaning of Code Section
419A, after separation from service.
Annual Addition means the amount added to a Participant's account for
any Limitation Year which may not exceed the Maximum Permissible Amount.
The Annual Addition under any plan for a Participant with respect to any
Limitation Year, shall be equal to the sum of (1) and (2) below:
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(1) Employer contributions and forfeitures credited to his account for
the Limitation Year.
(2) Participant contributions made by him for the Limitation Year.
Before the first Limitation Year beginning after December 31, 1986,
the amount under (2) above is the lesser of (i) 1/2 of his nondeductible
participant contributions made for the Limitation Year, or (ii) the
amount, if any, of his nondeductible participant contributions made for
the Limitation Year which is in excess of six percent of his
Compensation, as defined in this section, for such Limitation Year.
Compensation means all wages for Federal income tax withholding
purposes, as defined under Code Section 3401(a) (for purposes of income
tax withholding at the source), disregarding any rules limiting the
remuneration included as wages based on the nature or location of the
employment or the services performed. Compensation also includes all
other payments to an Employee in the course of the Employer's trade or
business, for which the Employer must furnish the Employee a written
statement under Code Sections 6041(d) and 6051(a)(3). The "Wages, Tips
and Other Compensation" box on Form W-2 satisfies this definition.
For purposes of applying the limitations of this section, Compensation
for a Limitation Year is the Compensation actually paid or made
available during such Limitation Year.
Defined Benefit Plan Fraction means, with respect to a Limitation Year
for a Participant who is or has been a participant in a defined benefit
plan ever maintained by the Employer, as defined in this section, the
quotient, expressed as a decimal, of
(1) the Participant's Projected Annual Benefit under all such plans as
of the close of such Limitation Year, divided by
(2) on and after the TEFRA Compliance Date, the lesser of (i) or (ii)
below:
(i) 1.25 multiplied by the maximum dollar limitation which applies
to defined benefit plans determined for the Limitation Year
under Code Sections 415(b) or (d) or
(ii) 1.4 multiplied by the Participant's highest average
compensation as defined in the defined benefit plan(s),
including any adjustments under Code Section 415(b).
Before the TEFRA Compliance Date, this denominator is the
Participant's Projected Annual Benefit as of the close of the
Limitation Year if the plan(s) provided the maximum benefit
allowable.
The Defined Benefit Plan Fraction shall be modified as follows:
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, as defined in this
section, 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,
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disregarding any changes in the terms and conditions of the plan after
May 5, 1986. The preceding sentence applies only if the defined benefit
plans individually and in the aggregate satisfied the requirements of
Code Section 415 for all Limitation Years beginning before January 1,
1987.
Defined Contribution Plan Fraction means, for a Participant with
respect to a Limitation Year, the quotient, expressed as a decimal, of
(1) the Participant's Aggregate Annual Additions for such Limitation
Year and all prior Limitation Years, under all defined contribution
plans (including the Aggregate Annual Additions attributable to
nondeductible accounts under defined benefit plans and attributable
to all welfare benefit funds, as defined in Code Section 419(e) and
attributable to individual medical accounts, as defined in Code
Section 415(l)(2)) ever maintained by the Employer, as defined in
this section, divided by
(2) on and after the TEFRA Compliance Date, the sum of the amount
determined for the Limitation Year under (i) or (ii) below,
whichever is less, and the amounts determined in the same manner for
all prior Limitation Years during which he has been an Employee or
an employee of a predecessor employer:
(i) 1.25 multiplied by the maximum permissible dollar amount for
each such Limitation Year, or
(ii) 1.4 multiplied by the maximum permissible percentage of the
Participant's Compensation, as defined in this section, for
each such Limitation Year.
Before the TEFRA Compliance Date, this denominator is the sum of
the maximum allowable amount of Annual Addition to his account(s)
under all the plan(s) of the Employer, as defined in this section,
for each such Limitation Year.
The Defined Contribution Plan Fraction shall be modified as follows:
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 contribution plans maintained by the Employer, as defined in
this section, which were in existence on May 6, 1986, the numerator of
this fraction shall be adjusted if the sum of the Defined Contribution
Plan Fraction and Defined Benefit Plan Fraction would otherwise exceed
1.0 under the terms of this Plan. Under the adjustment, the dollar
amount determined below shall be permanently subtracted from the
numerator of this fraction. The dollar amount is equal to the excess of
the sum of the two fractions, before adjustment, over 1.0 multiplied by
the denominator of his Defined Contribution Plan Fraction. The
adjustment is calculated using his Defined Contribution Plan Fraction
and Defined Benefit Plan Fraction as they would be computed as of the
end of the last Limitation Year beginning before January 1, 1987, and
disregarding any changes in the terms and conditions of the plan made
after May 5, 1986, but using the Code Section 415 limitations 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.
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For a plan that was in existence on July 1, 1982, for purposes of
determining the Defined Contribution Plan Fraction for any Limitation
Year ending after December 31, 1982, the Plan Administrator may elect,
in accordance with the provisions of Code Section 415, that the
denominator for each Participant for all Limitation Years ending before
January 1, 1983, will be equal to
(1) the Defined Contribution Plan Fraction denominator which would apply
for the last Limitation Year ending in 1982 if an election under
this paragraph were not made, multiplied by.
(2) a fraction, equal to (i) over (ii) below:
(i) the lesser of (A) $51,875, or (B) 1.4, multiplied by 25% of the
Participant's Compensation, as defined in this section, for the
Limitation Year ending in 1981;
(ii) the lesser of (A) $41,500, or (B) 25% of the Participant's
Compensation, as defined in this section, for the Limitation
Year ending in 1981.
The election described above is applicable only if the plan
administrators under all defined contribution plans of the Employer, as
defined in this section, also elect to use the modified fraction.
Employer means any employer that adopts this Plan and all Controlled
Group members and any other entity required to be aggregated with the
employer pursuant to regulations under Code Section 414(o).
Limitation Year means the 12-consecutive month period within which it
is determined whether or not the limitations of Code Section 415 are
exceeded. Limitation Year means each 12-consecutive month period ending
on the last day of each Plan Year, including corresponding 12-
consecutive month periods before January 1, 1991. If the Limitation
Year is other than the calendar year, execution of this Plan (or any
amendment to this Plan changing the Limitation Year) constitutes the
Employer's adoption of a written resolution electing the Limitation
Year. If the Limitation Year is changed, the new Limitation Year shall
begin within the current Limitation Year, creating a short Limitation
Year.
Maximum Permissible Amount means, for a Participant with respect to
any Limitation Year, the lesser of (1) or (2) below:
(1) The greater of $30,000 or one-fourth of the maximum dollar
limitation which applies to defined benefit plans set forth in Code
Section 415(b)(1)(A) as in effect for the Limitation Year. (Before
the TEFRA Compliance Date, $25,000 multiplied by the cost of living
adjustment factor permitted by Federal regulations.)
(2) 25% of his Compensation, as defined in this section, for such
Limitation Year.
The compensation limitation referred to in (2) shall not apply to any
contribution for medical benefits (within the meaning of Code Section
401(h) or Code Section 419A(f)(2)) which is otherwise treated as an
annual addition under Code Section 415(l)(1) or Code Section 419A(d)(2).
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If there is a short Limitation Year because of a change in Limitation
Year, the Maximum Permissible Amount will not exceed the maximum dollar
limitation which would otherwise apply multiplied by the following
fraction:
Number of months in the short Limitation Year
---------------------------------------------
12
Projected Annual Benefit means a Participant's expected annual benefit
under all defined benefit plan(s) ever maintained by the Employer, as
defined in this section. The Projected Annual Benefit shall be
determined assuming that the Participant will continue employment until
the later of current age or normal retirement age under such plan(s),
and that the Participant's compensation for the current Limitation Year
and all other relevant factors used to determine benefits under such
plan(s) will remain constant for all future Limitation Years. Such
expected annual benefit shall be adjusted to the actuarial equivalent of
a straight life annuity if expressed in a form other than a straight
life or qualified joint and survivor annuity.
(b) The Annual Addition under this Plan for a Participant during a
Limitation Year shall not be more than the Maximum Permissible Amount.
(c) Contributions which would otherwise be credited to the Participant's
Account shall be limited or reallocated to the extent necessary to meet
the restrictions of subparagraph (b) above for any Limitation Year in
the following order. Elective Deferral Contributions that are not the
basis for Matching Contributions shall be limited. Matching
Contributions shall be limited to the extent necessary to limit the
Participant's Annual Addition under this Plan to his maximum amount. If
Matching Contributions are limited because of this limit, Elective
Deferral Contributions that are the basis for Matching Contributions
shall be reduced in proportion.
If, due to (i) an error in estimating a Participant's Compensation as
defined in this section, (ii) because the amount of the Forfeitures to
be used to offset Employer Contributions is more than the amount of the
Employer Contributions due for the remaining Participants, (iii) as a
result of a reasonable error in determining the amount of elective
deferrals (within the meaning of Code Section 402(g)(3)) that may be
made with respect to any individual under the limits of Code Section
415, or (iv) other limited facts and circumstances, a Participant's
Annual Addition is greater than the amount permitted in (b) above, such
excess amount shall be applied as follows. Elective Deferral
Contributions which are not the basis for Matching Contributions will be
returned to the Participant. If an excess still exists, Elective
Deferral Contributions that are the basis for Matching Contributions
will be returned to the Participant. Matching Contributions based on
Elective Deferral Contributions which are returned shall be forfeited.
If after the return of Elective Deferral Contributions, an excess amount
still exists, and the Participant is an Active Participant as of the end
of the Limitation Year, the excess amount shall be used to offset
Employer Contributions for him in the next Limitation Year. If after
the return of Elective Deferral Contributions, an excess amount still
exists, and the Participant is not an Active Participant as of the end
of the Limitation Year, the excess amount will be held in a suspense
account which will be used to offset Employer Contributions for all
Participants in the next Limitation Year. No Employer Contributions
that would be included in the next Limitation Year's Annual Addition may
be made before the total suspense account has been used.
(d) A Participant's Aggregate Annual Addition for a Limitation Year shall
not exceed the Maximum Permissible Amount.
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If, for the Limitation Year, the Participant has an Annual Addition
under more than one defined contribution plan or a welfare benefit fund,
as defined in Code Section 419(e), or an individual medical account, as
defined in Code Section 415(l)(2), maintained by the Employer, as
defined in this section, and such plans and welfare benefit funds and
individual medical accounts do not otherwise limit the Aggregate Annual
Addition to the Maximum Permissible Amount, any reduction necessary
shall be made first to the profit sharing plans, then to all other such
plans and welfare benefit funds and individual medical accounts and, if
necessary, by reducing first those that were most recently allocated.
Welfare benefit funds and individual medical accounts shall be deemed to
be allocated first. However, elective deferral contributions shall be
the last contributions reduced before the welfare benefit fund or
individual medical account is reduced.
If some of the Employer's defined contribution plans were not in
existence on July 1, 1982, and some were in existence on that date, the
Maximum Permissible Amount which is based on a dollar amount may differ
for a Limitation Year. The Aggregate Annual Addition for the Limitation
Year in which the dollar limit differs shall not exceed the lesser of
(1) 25% of Compensation as defined in this section, (2) $45,475, or (3)
the greater of $30,000 or the sum of the Annual Additions for such
Limitation Year under all the plan(s) to which the $45,475 amount
applies.
(e) If a Participant is or has been a participant in both defined benefit
and defined contribution plans (including a welfare benefit fund or
individual medical account) ever maintained by the Employer, as defined
in this section, the sum of the Defined Benefit Plan Fraction and the
Defined Contribution Plan Fraction for any Limitation Year shall not
exceed 1.0 (1.4 before the TEFRA Compliance Date).
After all other limitations set out in the plans and funds have been
applied, the following limitations shall apply so that the sum of the
Participant's Defined Benefit Plan Fraction and Defined Contribution
Plan Fraction shall not exceed 1.0 (1.4 before the TEFRA Compliance
Date). The Projected Annual Benefit shall be limited first. If the
Participant's annual benefit(s) equal his Projected Annual Benefit, as
limited, then Annual Additions to the defined contribution plan(s) shall
be limited to the extent needed to reduce the sum to 1.0 (1.4). First,
the voluntary contributions the Participant may make for the Limitation
Year shall be limited. Next, in the case of a profit sharing plan, any
forfeitures allocated to the Participant shall be reallocated to
remaining participants to the extent necessary to reduce the decimal to
1.0 (1.4). Last, to the extent necessary, employer contributions for
the Limitation Year shall be reallocated or limited, and any required
and optional employee contributions to which such employer contributions
were geared shall be reduced in proportion.
If, for the Limitation Year, the Participant has an Annual Addition
under more than one defined contribution plan or welfare benefit fund or
individual medical account maintained by the Employer, as defined in
this section, any reduction above shall be made first to the profit
sharing plans, then to all other such plans and welfare benefit plans
and individual medical accounts and, if necessary, by reducing first
those that were most recently allocated. However, elective deferral
contributions shall be the last contributions reduced before the welfare
benefit fund or individual medical account is reduced. The annual
addition to the welfare benefit fund and individual medical account
shall be limited last.
SECTION 3.05--EXCESS AMOUNTS.
(a) For the purposes of this section, the following terms are defined:
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Actual Deferral Percentage means the ratio (expressed as a percentage)
of Elective Deferral Contributions under this Plan on behalf of the
Eligible Participant for the Plan Year to the Eligible Participant's
Compensation for the Plan Year. The Elective Deferral Contributions
used to determine the Actual Deferral Percentage shall include Excess
Elective Deferrals (other than Excess Elective Deferrals of Nonhighly
Compensated Employees that arise solely from Elective Deferral
Contributions made under this Plan or any other plans of the Employer or
a Controlled Group member), but shall exclude Elective Deferral
Contributions that are used in computing the Contribution Percentage
(provided the Average Actual Deferral Percentage test is satisfied both
with and without exclusion of these Elective Deferral Contributions).
Under such rules as the Secretary of the Treasury shall prescribe in
Code Section 401(k)(3)(D), the Employer may elect to include Qualified
Nonelective Contributions and Qualified Matching Contributions under
this Plan in computing the Actual Deferral Percentage. For an Eligible
Participant for whom such Contributions on his behalf for the Plan Year
are zero, the percentage is zero.
Aggregate Limit means the greater of (1) or (2) below:
(1) The sum of
(i) 125 percent of the greater of the Average Actual Deferral
Percentage of the Nonhighly Compensated Employees for the Plan
Year or the Average Contribution Percentage of Nonhighly
Compensated Employees under the Plan subject to Code Section
401(m) for the Plan Year beginning with or within the Plan Year
of the cash or deferred arrangement and
(ii) the lesser of 200% or two plus the lesser of such Average
Actual Deferral Percentage or Average Contribution Percentage.
(2) The sum of
(i) 125 percent of the lesser of the Average Actual Deferral
Percentage of the Nonhighly Compensated Employees for the Plan
Year or the Average Contribution Percentage of Nonhighly
Compensated Employees under the Plan subject to Code Section
401(m) for the Plan Year beginning with or within the Plan Year
of the cash or deferred arrangement and
(ii) the lesser of 200% or two plus the greater of such Average
Actual Deferral Percentage or Average Contribution Percentage.
Average Actual Deferral Percentage means the average (expressed as a
percentage) of the Actual Deferral Percentages of the Eligible
Participants in a group.
Average Contribution Percentage means the average (expressed as a
percentage) of the Contribution Percentages of the Eligible Participants
in a group.
Contribution Percentage means the ratio (expressed as a percentage) of
the Eligible Participant's Contribution Percentage Amounts to the
Eligible Participant's Compensation for the Plan Year. For an Eligible
Participant for whom such Contribution Percentage Amounts for the Plan
Year are zero, the percentage is zero.
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Contribution Percentage Amounts means the sum of the Participant
Contributions and Matching Contributions (that are not Qualified
Matching Contributions) under this Plan on behalf of the Eligible
Participant for the Plan Year. Such Contribution Percentage Amounts
shall not include Matching Contributions that are forfeited either to
correct Excess Aggregate Contributions or because the Contributions to
which they relate are Excess Elective Deferrals, Excess Contributions or
Excess Aggregate Contributions. Under such rules as the Secretary of
the Treasury shall prescribe in Code Section 401(k)(3)(D), the Employer
may elect to include Qualified Nonelective Contributions and Qualified
Matching Contributions under this Plan which were not used in computing
the Actual Deferral Percentage in computing the Contribution Percentage.
The Employer may also elect to use Elective Deferral Contributions in
computing the Contribution Percentage so long as the Average Actual
Deferral Percentage test is met before the Elective Deferral
Contributions are used in the Average Contribution Percentage test and
continues to be met following the exclusion of those Elective Deferral
Contributions that are used to meet the Average Contribution Percentage
test.
Elective Deferral Contributions means employer contributions made on
behalf of a participant pursuant to an election to defer under any
qualified cash or deferred arrangement as described in Code Section
401(k), any simplified employee pension cash or deferred arrangement as
described in Code Section 402(h)(1)(B), any eligible deferred
compensation plan under Code Section 457, any plan as described under
Code Section 501(c)(18), and any employer contributions made on behalf
of a participant for the purchase of an annuity contract under Code
Section 403(b) pursuant to a salary reduction agreement. Elective
Deferral Contributions shall not include any deferrals properly
distributed as excess Annual Additions.
Eligible Participant means, for purposes of the Actual Deferral
Percentage, any Employee who is eligible to make an Elective Deferral
Contribution, and shall include the following: any Employee who would
be a plan participant if he chose to make required contributions; any
Employee who can make Elective Deferral Contributions but who has
changed the amount of his Elective Deferral Contribution to 0%, or whose
eligibility to make an Elective Deferral Contribution is suspended
because of a loan, distribution or hardship withdrawal; and, any
Employee who is not able to make an Elective Deferral Contribution
because of Code Section 415(c)(1) - Annual Additions limits. The Actual
Deferral Percentage for any such included Employee is zero.
Eligible Participant means, for purposes of the Average Contribution
Percentage, any Employee who is eligible to make a Participant
Contribution or to receive a Matching Contribution, and shall include
the following: any Employee who would be a plan participant if he chose
to make required contributions; any Employee who can make a Participant
Contribution or receive a matching contribution but who has made an
election not to participate in the Plan; and any Employee who is not
able to make a Participant Contribution or receive a matching
contribution because of Code Section 415(c)(1) or 415(e) limits. The
Average Contribution Percentage for any such included Employee is zero.
Excess Aggregate Contributions means, with respect to any Plan Year, the
excess of:
(1) The aggregate Contributions taken into account in computing the
numerator of the Contribution Percentage actually made on behalf of
Highly Compensated Employees for such Plan Year, over
(2) The maximum amount of such Contributions permitted by the Average
Contribution Percentage test (determined by reducing Contributions
made on behalf of Highly
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Compensated Employees in order of their Contribution Percentages
beginning with the highest of such percentages).
Such determination shall be made after first determining Excess
Elective Deferrals and then determining Excess Contributions.
Excess Contributions means, with respect to any Plan Year, the excess
of:
(1) The aggregate amount of Contributions actually taken into account in
computing the Actual Deferral Percentage of Highly Compensated
Employees for such Plan Year, over
(2) The maximum amount of such Contributions permitted by the Actual
Deferral Percentage test (determined by reducing Contributions made
on behalf of Highly Compensated Employees in order of the Actual
Deferral Percentages, beginning with the highest of such
percentages).
A Participant's Excess Contributions for a Plan Year will be reduced
by the amount of Excess Elective Deferrals, if any, previously
distributed to the Participant for the taxable year ending in that Plan
Year.
Excess Elective Deferrals means those Elective Deferral Contributions
that are includible in a Participant's gross income under Code Section
402(g) to the extent such Participant's Elective Deferral Contributions
for a taxable year exceed the dollar limitation under such Code section.
Excess Elective Deferrals shall be treated as Annual Additions, as
defined in the CONTRIBUTION LIMITATION SECTION of Article III, under the
Plan, unless such amounts are distributed no later than the first April
15 following the close of the Participant's taxable year.
Family Member means an Employee, or former employee; the spouse of the
Employee or former employee, and the lineal ascendants or descendants
and the spouses of such lineal ascendants or descendants of any such
Employee or former employee. In determining if an individual is a
family member as to an Employee or former employee, legal adoptions are
taken into account.
Matching Contributions means employer contributions made to this or
any other defined contribution plan, or to a contract described in Code
Section 403(b), on behalf of a participant on account of a Participant
Contribution made by such participant, or on account of a participant's
Elective Deferral Contributions, under a plan maintained by the
employer.
Participant Contributions means contributions made to any plan by or
on behalf of a participant that are included in the participant's gross
income in the year in which made and that are maintained under a
separate account to which earnings and losses are allocated.
Qualified Matching Contributions means Matching Contributions which
are subject to the distribution and nonforfeitability requirements under
Code Section 401(k) when made.
Qualified Nonelective Contributions means any employer contributions
(other than Matching Contributions) which an employee may not elect to
have paid to him in cash instead of being contributed to the plan and
which are subject to the distribution and nonforfeitability requirements
under Code Section 401(k) when made.
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(b) A Participant may assign to this Plan any Excess Elective Deferrals made
during a taxable year by notifying the Plan Administrator in writing on
or before the first following March 1 of the amount of the Excess
Elective Deferrals to be assigned to the Plan. A Participant is deemed
to notify the Plan Administrator of any Excess Elective Deferrals that
arise by taking into account only those Elective Deferral Contributions
made to this Plan and any other plans of the Employer or a Controlled
Group member and reducing such Excess Elective Deferrals by the amount
of Excess Contributions, if any, previously distributed for the Plan
Year beginning in that taxable year. The Participant's claim for Excess
Elective Deferrals shall be accompanied by the Participant's written
statement that if such amounts are not distributed, such Excess Elective
Deferrals, when added to amounts deferred under other plans or
arrangements described in Code Sections 401(k), 408(k) or 403(b), will
exceed the limit imposed on the Participant by Code Section 402(g) for
the year in which the deferral occurred. The Excess Elective Deferrals
assigned to this Plan can not exceed the Elective Deferral Contributions
allocated under this Plan for such taxable year.
Notwithstanding any other provisions of the Plan, Elective Deferral
Contributions in an amount equal to the Excess Elective Deferrals
assigned to this Plan, plus any income and minus any loss allocable
thereto, shall be distributed no later than April 15 to any Participant
to whose Account Excess Elective Deferrals were assigned for the
preceding year and who claims Excess Elective Deferrals for such taxable
year.
The income or loss allocable to such Excess Elective Deferrals shall
be equal to the income or loss allocable to the Participant's Elective
Deferral Contributions for the taxable year in which the excess occurred
multiplied by a fraction. The numerator of the fraction is the Excess
Elective Deferrals. The denominator of the fraction is the closing
balance without regard to any income or loss occurring during such
taxable year (as of the end of such taxable year) of the Participant's
Account resulting from Elective Deferral Contributions.
Any Matching Contributions which were based on the Elective Deferral
Contributions which are distributed as Excess Elective Deferrals, plus
any income and minus any loss allocable thereto, shall be forfeited.
These Forfeitures shall be used to offset the earliest Employer
Contribution due after the Forfeiture arises.
(c) As of the end of each Plan Year after Excess Elective Deferrals have
been determined, one of the following tests must be met:
(1) The Average Actual Deferral Percentage for Eligible Participants who
are Highly Compensated Employees for the Plan Year is not more than
the Average Actual Deferral Percentage for Eligible Participants who
are Nonhighly Compensated Employees for the Plan Year multiplied by
1.25.
(2) The Average Actual Deferral Percentage for Eligible Participants who
are Highly Compensated Employees for the Plan Year is not more than
the Average Actual Deferral Percentage for Eligible Participants who
are Nonhighly Compensated Employees for the Plan Year multiplied by
2 and the difference between the Average Actual Deferral Percentages
is not more than 2.
The Actual Deferral Percentage for any Eligible Participant who is a
Highly Compensated Employee for the Plan Year and who is eligible to
have Elective Deferral Contributions (and Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, if used in
computing the
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Actual Deferral Percentage) allocated to his account under two or more
plans or arrangements described in Code Section 401(k) that are
maintained by the Employer or a Controlled Group member shall be
determined as if all such Elective Deferral Contributions (and, if
applicable, such Qualified Nonelective Contributions or Qualified
Matching Contributions, or both) were made under a single arrangement.
If a Highly Compensated Employee participates in two or more cash or
deferred arrangements that have different Plan Years, all cash or
deferred arrangements ending with or within the same calendar year shall
be treated as a single arrangement. Notwithstanding the foregoing,
certain plans shall be treated as separate if mandatorily disaggregated
under the regulations under Code Section 401(k) or permissibly
disaggregated as provided.
In the event that this Plan satisfies the requirements of Code
Sections 401(k), 401(a)(4), or 410(b) only if aggregated with one or
more other plans, or if one or more other plans satisfy the requirements
of such Code sections only if aggregated with this Plan, then this
section shall be applied by determining the Actual Deferral Percentage
of employees as if all such plans were a single plan. Plans may be
aggregated in order to satisfy Code Section 401(k) only if they have the
same Plan Year.
For purposes of determining the Actual Deferral Percentage of an
Eligible Participant who is a five-percent owner or one of the ten most
highly-paid Highly Compensated Employees, the Elective Deferral
Contributions (and Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, if used in computing the Actual
Deferral Percentage) and Compensation of such Eligible Participant
include the Elective Deferral Contributions (and, if applicable,
Qualified Nonelective Contributions or Qualified Matching Contributions,
or both) and Compensation for the Plan Year of Family Members. Family
Members, with respect to such Highly Compensated Employees, shall be
disregarded as separate employees in determining the Actual Deferral
Percentage both for Participants who are Nonhighly Compensated Employees
and for Participants who are Highly Compensated Employees.
For purposes of determining the Actual Deferral Percentage, Elective
Deferral Contributions, Qualified Nonelective Contributions and
Qualified Matching Contributions must be made before the last day of the
12-month period immediately following the Plan Year to which
contributions relate.
The Employer shall maintain records sufficient to demonstrate
satisfaction of the Average Actual Deferral Percentage test and the
amount of Qualified Nonelective Contributions or Qualified Matching
Contributions, or both, used in such test.
The determination and treatment of the Contributions used in computing
the Actual Deferral Percentage shall satisfy such other requirements as
may be prescribed by the Secretary of the Treasury.
If the Plan Administrator should determine during the Plan Year that
neither of the above tests is being met, the Plan Administrator may
adjust the amount of future Elective Deferral Contributions of the
Highly Compensated Employees.
Notwithstanding any other provisions of this Plan, Excess
Contributions, plus any income and minus any loss allocable thereto,
shall be distributed no later than the last day of each Plan Year to
Participants to whose Accounts such Excess Contributions were allocated
for the preceding Plan Year. If such excess amounts are distributed
more than 2 1/2 months after the last day of the Plan Year in which such
excess amounts arose, a ten (10) percent excise tax will be imposed on
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the employer maintaining the plan with respect to such amounts. Such
distributions shall be made beginning with the Highly Compensated
Employee(s) who has the greatest Actual Deferral Percentage, reducing
his Actual Deferral Percentage to the next highest Actual Deferral
Percentage level. Then, if necessary, reducing the Actual Deferral
Percentage of the Highly Compensated Employees at the next highest
level, and continuing in this manner until the average Actual Deferral
Percentage of the Highly Compensated Group satisfies the Actual Deferral
Percentage test. Excess Contributions of Participants who are subject
to the family member aggregation rules shall be allocated among the
Family Members in proportion to the Elective Deferral Contributions (and
amounts treated as Elective Deferral Contributions) of each Family
Member that is combined to determine the combined Actual Deferral
Percentage.
Excess Contributions shall be treated as Annual Additions, as defined
in the CONTRIBUTION LIMITATION SECTION of Article III, under the Plan.
The Excess Contributions shall be adjusted for income or loss. The
income or loss allocable to such Excess Contributions shall be equal to
the income or loss allocable to the Participant's Elective Deferral
Contributions (and, if applicable, Qualified Nonelective Contributions
or Qualified Matching Contributions, or both) for the Plan Year in which
the excess occurred multiplied by a fraction. The numerator of the
fraction is the Excess Contributions. The denominator of the fraction
is the closing balance without regard to any income or loss occurring
during such Plan Year (as of the end of such Plan Year) of the
Participant's Account resulting from Elective Deferral Contributions
(and Qualified Nonelective Contributions or Qualified Matching
Contributions, or both, if used in computing the Actual Deferral
Percentage).
Excess Contributions shall be distributed from the Participant's
Account resulting first from Elective Deferral Contributions not the
basis for Matching Contributions, then if necessary, from Elective
Deferral Contributions which are the basis for Matching Contributions.
If such Excess Contributions exceed the balance in the Participant's
Account resulting from Elective Deferral Contributions, the balance
shall be distributed from the Participant's Account resulting from
Qualified Matching Contributions (if applicable) and Qualified
Nonelective Contributions, respectively.
Any Matching Contributions which were based on the Elective Deferral
Contributions which are distributed as Excess Contributions, plus any
income and minus any loss allocable thereto, shall be forfeited. These
Forfeitures shall be used to offset the earliest Employer Contribution
due after the Forfeiture arises.
(d) As of the end of each Plan Year, one of the following tests must be met:
(1) The Average Contribution Percentage for Eligible Participants who
are Highly Compensated Employees for the Plan Year is not more than
the Average Contribution Percentage for Eligible Participants who
are Nonhighly Compensated Employees for the Plan Year multiplied by
1.25.
(2) The Average Contribution Percentage for Eligible Participants who
are Highly Compensated Employees for the Plan Year is not more than
the Average Contribution Percentage for Eligible Participants who
are Nonhighly Compensated Employees for the Plan Year multiplied by
2 and the difference between the Average Contribution Percentages is
not more than 2.
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If one or more Highly Compensated Employees participate in both a cash
or deferred arrangement and a plan subject to the Average Contribution
Percentage test maintained by the Employer or a Controlled Group member
and the sum of the Average Actual Deferral Percentage and Average
Contribution Percentage of those Highly Compensated Employees subject to
either or both tests exceeds the Aggregate Limit, then the Contribution
Percentage of those Highly Compensated Employees who also participate in
a cash or deferred arrangement will be reduced (beginning with such
Highly Compensated Employees whose Contribution Percentage is the
highest) so that the limit is not exceeded. The amount by which each
Highly Compensated Employee's Contribution Percentage is reduced shall
be treated as an Excess Aggregate Contribution. The Average Actual
Deferral Percentage and Average Contribution Percentage of the Highly
Compensated Employees are determined after any corrections required to
meet the Average Actual Deferral Percentage and Average Contribution
Percentage tests. Multiple use does not occur if either the Average
Actual Deferral Percentage or Average Contribution Percentage of the
Highly Compensated Employees does not exceed 1.25 multiplied by the
Average Actual Deferral Percentage and Average Contribution Percentage
of the Nonhighly Compensated Employees.
The Contribution Percentage for any Eligible Participant who is a
Highly Compensated Employee for the Plan Year and who is eligible to
have Contribution Percentage Amounts allocated to his account under two
or more plans described in Code Section 401(a) or arrangements described
in Code Section 401(k) that are maintained by the Employer or a
Controlled Group member shall be determined as if the total of such
Contribution Percentage Amounts was made under each plan. If a Highly
Compensated Employee participates in two or more cash or deferred
arrangements that have different Plan Years, all cash or deferred
arrangements ending with or within the same calendar year shall be
treated as a single arrangement. Notwithstanding the foregoing, certain
plans shall be treated as separate if mandatorily disaggregated under
the regulations under Code Section 401(m) or permissibly disaggregated
as provided.
In the event that this Plan satisfies the requirements of Code
Sections 401(m), 401(a)(4), or 410(b) only if aggregated with one or
more other plans, or if one or more other plans satisfy the requirements
of Code sections only if aggregated with this Plan, then this section
shall be applied by determining the Contribution Percentages of Eligible
Participants as if all such plans were a single plan. Plans may be
aggregated in order to satisfy Code Section 401(m) only if they have the
same Plan Year.
For purposes of determining the Contribution Percentage of an Eligible
Participant who is a five-percent owner or one of the ten most highly-
paid Highly Compensated Employees, the Contribution Percentage Amounts
and Compensation of such Participant shall include Contribution
Percentage Amounts and Compensation for the Plan Year of Family Members.
Family Members, with respect to Highly Compensated Employees, shall be
disregarded as separate employees in determining the Contribution
Percentage both for employees who are Nonhighly Compensated Employees
and for employees who are Highly Compensated Employees.
For purposes of determining the Contribution Percentage, Participant
Contributions are considered to have been made in the Plan Year in which
contributed to the Plan. Matching Contributions and Qualified
Nonelective Contributions will be considered made for a Plan Year if
made no later than the end of the 12-month period beginning on the day
after the close of the Plan Year.
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The Employer shall maintain records sufficient to demonstrate
satisfaction of the Average Contribution Percentage test and the amount
of Qualified Nonelective Contributions or Qualified Matching
Contributions, or both, used in such test.
The determination and treatment of the Contribution Percentage of any
Participant shall satisfy such other requirements as may be prescribed
by the Secretary of the Treasury.
Notwithstanding any other provisions of this Plan, Excess Aggregate
Contributions, plus any income and minus any loss allocable thereto,
shall be forfeited, if not vested, or distributed, if vested, no later
than the last day of each Plan Year to Participants to whose Accounts
such Excess Aggregate Contributions were allocated for the preceding
Plan Year. If such Excess Aggregate Contributions are distributed more
than 2 1/2 months after the last day of the Plan Year in which such
excess amounts arose, a ten (10) percent excise tax will be imposed on
the employer maintaining the plan with respect to those amounts. Excess
Aggregate Contributions will be distributed beginning with the Highly
Compensated Employee(s) who has the greatest Contribution Percentage,
reducing his contribution percentage to the next highest level. Then,
if necessary, reducing the Contribution Percentage of the Highly
Compensated Employee at the next highest level, and continuing in this
manner until the Actual Contribution Percentage of the Highly
Compensated Group satisfies the Actual Contribution Percentage Test.
Excess Aggregate Contributions of Participants who are subject to the
family member aggregation rules shall be allocated among the Family
Members in proportion to the Employee and Matching Contributions (or
amounts treated as Matching Contributions) of each Family Member that is
combined to determine the combined Contribution Percentage. Excess
Aggregate Contributions shall be treated as Annual Additions, as defined
in the CONTRIBUTION LIMITATION SECTION of Article III, under the Plan.
The Excess Aggregate Contributions shall be adjusted for income or
loss. The income or loss allocable to such Excess Aggregate
Contributions shall be equal to the income or loss allocable to the
Participant's Contribution Percentage Amounts for the Plan Year in which
the excess occurred multiplied by a fraction. The numerator of the
fraction is the Excess Aggregate Contributions. The denominator of the
fraction is the closing balance without regard to any income or loss
occurring during such Plan Year (as of the end of such Plan Year) of the
Participant's Account resulting from Contribution Percentage Amounts.
Excess Aggregate Contributions shall be distributed from the
Participant's Account resulting from Participant Contributions that are
not required as a condition of employment or participation or for
obtaining additional benefits from Employer Contributions. If such
Excess Aggregate Contributions exceed the balance in the Participant's
Account resulting from such Participant Contributions, the balance shall
be forfeited, if not vested, or distributed, if vested, on a pro-rata
basis from the Participant's Account resulting from Contribution
Percentage Amounts. These Forfeitures shall be used to offset the
earliest Employer Contribution due after the Forfeiture arises.
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ARTICLE IV
INVESTMENT OF CONTRIBUTIONS
SECTION 4.01--INVESTMENT OF CONTRIBUTIONS.
All Contributions are forwarded by the Employer to the Trustee to be
deposited in the Trust Fund.
Investment of Contributions is governed by the provisions of the Trust, the
Group Contract and any other funding arrangement in which the Trust Fund is or
may be invested. To the extent permitted by the Trust, Group Contract or other
funding arrangement, the parties named below shall direct the Contributions to
any of the accounts available under the Trust or Group Contract and may request
the transfer of assets resulting from those Contributions between such accounts.
A Participant may not direct the Trustee to invest the Participant's Account in
collectibles. Collectibles means any work of art, rug or antique, metal or gem,
stamp or coin, alcoholic beverage or other tangible personal property specified
by the Secretary of Treasury. To the extent that a Participant does not direct
the investment of his Account, such Account shall be invested ratably in the
accounts available under the Trust or Group Contract in the same manner as the
undirected Accounts of all other Participants. The Vested Accounts of all
Inactive Participants may be segregated and invested separately from the
Accounts of all other Participants.
The Trust Fund shall be valued at current fair market value as of the last
day of the last calendar month ending in the Plan Year and, at the discretion of
the Trustee, may be valued more frequently. The valuation shall take into
consideration investment earnings credited, expenses charged, payments made and
changes in the value of the assets held in the Trust Fund. The Account of a
Participant shall be credited with its share of the gains and losses of the
Trust Fund. That part of a Participant's Account invested in a funding
arrangement which establishes an account or accounts for such Participant
thereunder shall be credited with the gain or loss from such account or
accounts. That part of a Participant's Account which is invested in other
funding arrangements shall be credited with a proportionate share of the gain or
loss of such investments. The share shall be determined by multiplying the gain
or loss of the investment by the ratio of the part of the Participant's Account
invested in such funding arrangement to the total of the Trust Fund invested in
such funding arrangement.
At least annually, the Named Fiduciary shall review all pertinent Employee
information and Plan data in order to establish the funding policy of the Plan
and to determine appropriate methods of carrying out the Plan's objectives. The
Named Fiduciary shall inform the Trustee and any Investment Manager of the
Plan's short-term and long-term financial needs so the investment policy can be
coordinated with the Plan's financial requirements.
(a) Employer Contributions other than Elective Deferral Contributions: The
Participant shall direct the investment of such Employer Contributions
and transfer of assets resulting from those Contributions.
(b) Elective Deferral Contributions: The Participant shall direct the
investment of Elective Deferral Contributions and transfer of assets
resulting from those Contributions.
(c) Rollover Contributions: The Participant shall direct the investment of
Rollover Contributions and transfer of assets resulting from those
Contributions.
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However, the Named Fiduciary may delegate to the Investment Manager
investment discretion for Contributions and Plan assets which are not subject to
Participant direction.
SECTION 4.01A--INVESTMENT IN QUALIFYING EMPLOYER SECURITIES.
Participants in the Plan shall be entitled to invest all or any portion of
their Account in the Qualifying Employer Securities Fund. Notwithstanding the
preceding sentence, no portion of the Participant's Account resulting from
Elective Deferral Contributions shall be invested in the Qualifying Employer
Securities Fund unless such investment would be in compliance with applicable
Federal and state securities laws (including any necessary filings under such
Federal and state securities laws) and the requirements of the Plan.
Once an investment in the Qualifying Employer Securities Fund is made
available to Eligible Employees, then it shall continue to be available unless
the Plan and Trust is amended to disallow such available investment. In the
absence of such election, such Eligible Employees shall be deemed to have
elected to have their Accounts invested wholly in other investment options of
the Investment Funds. Once an election is made, it shall be considered to
continue until a new election is made.
The Plan Administrator will allocate any dividends the Employer pays with
respect to amounts held in the Qualifying Employer Securities Fund to the
Account of a Participant according to the shares of Qualifying Employer
Securities held by the Participant, determined on the record date. Any
dividends payable on the Qualifying Employer Securities shall, unless otherwise
directed by the Participant, be reinvested in additional shares of Qualifying
Employer Securities hereunder.
If the securities of the Employer are not publicly traded and if no market
or an extremely thin market exists for the Qualifying Employer Securities, so
that a reasonable valuation may not be obtained from the market place, then such
Qualifying Employer Securities must be valued at least annually by an
independent appraiser who is not associated with the Employer, the Plan
Administrator, the Trustee, or any person related to any fiduciary under the
Plan. The independent appraiser may be associated with a person who is merely a
contract administrator with respect to the Plan, but who exercises no
discretionary authority and is not a Plan fiduciary.
If there is a public market for Qualifying Employer Securities of the type
held by the Plan, then the Plan Administrator may use as the value of the shares
the price at which such shares traded in such market, or an average of the bid
and asked prices for such shares in such market, provided that such value is
representative of the fair market value of such shares in the opinion of the
Plan Administrator. If the Qualifying Employer Securities do not trade on the
annual valuation date or if the market is very thin on such date, then the Plan
Administrator may use the average of trade prices for a period of time ending on
such date, provided that such value is representative of the fair market value
of such shares in the opinion of the Plan Administrator. The value of a
Participant's Account held in the Qualifying Employer Securities Fund may be
expressed in units.
For purposes of determining the annual valuation of the Plan and for
reporting to Participants and regulatory authorities, the assets of the Plan
shall be valued at least annually on the Valuation Date which corresponds to the
last day of the Plan Year. The fair market value of Qualifying Employer
Securities shall be determined on such a Valuation Date. The average of the bid
and asked prices of Qualifying Employer Securities as of the date of the
transaction shall apply for purposes of valuing distributions and other
transactions of the Plan to the extent such value is representative of the fair
market value of such shares in the opinion of the Plan Administrator.
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All purchases of Qualifying Employer Securities shall be made at a price, or
prices, which, in the judgment of the Plan Administrator, do not exceed the fair
market value of such Qualifying Employer Securities.
In the event that the Trustee acquires shares of Qualifying Employer
Securities by purchase from a "disqualified person" as defined in Code Section
4975(e)(2) or from a "party in interest" as defined in ERISA Section 3(14), in
exchange for cash or other assets of the Trust, the terms of such purchase shall
contain the provision that in the event that there is a final determination by
the Internal Revenue Service, the Department of Labor, or court of competent
jurisdiction that a fair market value of such shares of Qualifying Employer
Securities, as of the date of purchase was less than the purchase price paid by
the Trustee, then the seller shall pay or transfer, as the case may be, to the
Trustee, an amount of cash, shares of Qualifying Employer Securities, or any
combination thereof equal in value to the difference between the purchase price
and said fair market value for all such shares. In the event that cash and/or
shares of Qualifying Employer Securities are paid and/or transferred to the
Trustee under this provision, shares of Qualifying Employer Securities shall be
valued at their fair market value as of the date of said purchase, and interest
at a reasonable rate from the date of purchase to the date of payment shall be
paid by the seller on the amount of cash paid.
The Plan Administrator may direct the Trustee to sell, resell or otherwise
dispose of Qualifying Employer Securities to any person, including the Employer,
provided that any such sales to any disqualified person or a party in interest,
including the Employer, will be made at not less than the fair market value and
no commission is charged. Any such sale shall be made in conformance with
Section 408(e) of ERISA.
In the event the Plan Administrator directs the Trustee to dispose of any
Qualifying Employer Securities held as Trust assets under circumstances which
require registration and/or qualification of the securities under applicable
Federal or state securities laws, then the Employer, at its own expense, will
take or cause to be taken any and all such action as may be necessary or
appropriate to effect such registration and/or qualification.
If a Security Exchange Commission (SEC) filing is required, the Qualifying
Employer Securities provisions set forth in this Plan restatement will not be
made available to Participants until the later of the effective date of the Plan
restatement or the date the Plan and any other necessary documentation has been
filed for registration with the SEC by the Employer.
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ARTICLE V
BENEFITS
SECTION 5.01--RETIREMENT BENEFITS.
On a Participant's Retirement Date, his Vested Account shall be distributed
to him according to the distribution of benefits provisions of Article VI and
the provisions of the SMALL AMOUNTS SECTION of Article IX.
SECTION 5.02--DEATH BENEFITS.
If a Participant dies before his Annuity Starting Date, his Vested Account
shall be distributed according to the distribution of benefits provisions of
Article VI and the provisions of the SMALL AMOUNTS SECTION of Article IX.
SECTION 5.03--VESTED BENEFITS.
A Participant may receive a distribution of his Vested Account at any time
after he ceases to be an Employee, provided he has not again become an Employee.
If such amount is not payable under the provisions of the SMALL AMOUNTS SECTION
of Article IX, it will be distributed only if the Participant so elects. The
Participant's election shall be subject to the requirements in the ELECTION
PROCEDURES SECTION of Article VI for a qualified election of a retirement
benefit.
If a Participant does not receive an earlier distribution according to the
provisions of this section or the SMALL AMOUNTS SECTION of Article IX, upon his
Retirement Date or death, his Vested Account shall be applied according to the
provisions of the RETIREMENT BENEFITS SECTION or the DEATH BENEFITS SECTION of
Article V.
The Nonvested Account of a Participant who has ceased to be an Employee
shall remain a part of his Account until it becomes a Forfeiture; provided,
however, if the Participant again becomes an Employee so that his Vesting
Percentage can increase, the Nonvested Account may become a part of his Vested
Account.
SECTION 5.04--WHEN BENEFITS START.
Benefits under the Plan begin when a Participant retires, dies or ceases to
be an Employee, whichever applies, as provided in the preceding sections of this
article. Benefits which begin before Normal Retirement Date for a Participant
who became Totally and Permanently Disabled when he was an Employee shall be
deemed to begin because he is Totally and Permanently Disabled. The start of
benefits is subject to the qualified election procedures of Article VI.
Unless otherwise elected, benefits shall begin before the sixtieth day
following the close of the Plan Year in which the latest date below occurs:
(a) The date the Participant attains age 65 (Normal Retirement Age, if
earlier).
(b) The tenth anniversary of the Participant's Entry Date.
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(c) The date the Participant ceases to be an Employee.
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 the ELECTION PROCEDURES SECTION of Article VI, shall be deemed to
be an election to defer commencement of payment of any benefit sufficient to
satisfy this section.
The Participant may elect to have his benefits begin after the latest date
for beginning benefits described above, subject to the provisions of this
section. The Participant shall make the election in writing and deliver the
signed statement of election to the Plan Administrator before Normal Retirement
Date or the date he ceases to be an Employee, if later. The election must
describe the form of distribution and the date the benefits will begin. The
Participant shall not elect a date for beginning benefits or a form of
distribution that would result in a benefit payable when he dies which would be
more than incidental within the meaning of governmental regulations.
Benefits shall begin by the Participant's Required Beginning Date, as
defined in the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION REQUIREMENTS
SECTION of Article VI.
Contributions which are used to compute the Actual Deferral Percentage, as
defined in the EXCESS AMOUNTS SECTION of Article III, may be distributed upon
disposition by the Employer of substantially all of the assets (within the
meaning of Code Section 409(d)(2)) used by the Employer in a trade or business
or disposition by the Employer of the Employer's interest in a subsidiary
(within the meaning of Code Section 409(d)(3)) if the transferee corporation is
not a Controlled Group member, the Employee continues employment with the
transferee corporation and the transferor corporation continues to maintain the
Plan. Such distributions made after March 31, 1988, must be made in a single
sum.
SECTION 5.05--WITHDRAWAL PRIVILEGES.
A Participant may withdraw all or any portion of his Vested Account which
results from the following Contributions
Elective Deferral Contributions
Matching Contributions
Rollover Contributions
in the event of hardship due to an immediate and heavy financial need.
Withdrawals from the Participant's Account resulting from Elective Deferral
Contributions shall be limited to the amount of the Participant's Elective
Deferral Contributions. Immediate and heavy financial need shall be limited to:
(i) expenses incurred or necessary for medical care, described in Code Section
213(d), of the Participant, the Participant's spouse, or any dependents of the
Participant (as defined in Code Section 152); (ii) purchase (excluding mortgage
payments) of a principal residence for the Participant; (iii) payment of tuition
and related educational fees and the payment of room and board expenses for the
next 12 months of post-secondary education for the Participant, his spouse,
children or dependents; (iv) the need to prevent the eviction of the Participant
from his principal residence or foreclosure on the mortgage of the Participant's
principal residence; or (v) any other distribution which is deemed by the
Commissioner of Internal Revenue to be made on account of immediate and heavy
financial need as provided in Treasury regulations. The Participant's request
for a withdrawal shall include his written statement that an immediate and heavy
financial need exists and explain its nature.
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No withdrawal shall be allowed which is not necessary to satisfy such
immediate and heavy financial need. Such withdrawal shall be deemed necessary
only if all of the following requirements are met: (i) the distribution is not
in excess of the amount of the immediate and heavy financial need of the
Participant (including amounts necessary to pay any Federal, state or local
income taxes or penalties reasonably anticipated to result from the
distribution); (ii) the Participant has obtained all distributions, other than
hardship distributions, and all nontaxable loans currently available under all
plans maintained by the Employer; (iii) the Plan, and all other plans maintained
by the Employer, provide that the Participant's elective contributions and
employee contributions will be suspended for at least 12 months after receipt of
the hardship distribution; and (iv) the Plan, and all other plans maintained by
the Employer, provide that the Participant may not make elective contributions
for the Participant's taxable year immediately following the taxable year of the
hardship distribution in excess of the applicable limit under Code Section
402(g) for such next taxable year less the amount of such Participant's elective
contributions for the taxable year of the hardship distribution. The Plan will
suspend elective contributions and employee contributions for 12 months and
limit elective deferrals as provided in the preceding sentence. A Participant
shall not cease to be an Eligible Participant, as defined in the EXCESS AMOUNTS
SECTION of Article III, merely because his elective contributions or employee
contributions are suspended.
A request for withdrawal shall be in writing on a form furnished for that
purpose and delivered to the Plan Administrator before the withdrawal is to
occur. The Participant's request shall be subject to the requirements in the
ELECTION PROCEDURES SECTION of Article VI for a qualified election of a
retirement benefit payable in a form other than a Qualified Joint and Survivor
Form.
A forfeiture shall not occur solely as a result of a withdrawal.
SECTION 5.06--LOANS TO PARTICIPANTS.
Loans shall be made available to all Participants on a reasonably equivalent
basis. For purposes of this section, Participant means any Participant or
Beneficiary who is a party-in-interest, within the meaning of Section 3(14) of
the Employee Retirement Income Security Act of 1974 (ERISA). Loans shall not be
made to highly compensated employees, as defined in Code Section 414(q), in an
amount greater than the amount made available to other Participants.
No loans will be made to any shareholder-employee or owner-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 Code Section 318(a)(1)), on any day
during the taxable year of such corporation, more than 5% of the outstanding
stock of the corporation.
A loan to a Participant shall be a Participant-directed investment of his
Account. No Account other than the borrowing Participant's Account shall share
in the interest paid on the loan or bear any expense or loss incurred because of
the loan. The portion of the Participant's Account held in the Qualifying
Employer Securities Fund may be redeemed for purposes of a loan only after the
amount held in the Participant's other investment options have been depleted.
The number of outstanding loans shall be limited to one. No more than one
loan will be approved for any Participant in any 12-month period. The minimum
amount of any loan shall be $1,000.
Loans must be adequately secured and bear a reasonable rate of interest.
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The amount of the loan shall not exceed the maximum amount that may be
treated as a loan under Code Section 72(p) (rather than a distribution) to the
Participant and shall be equal to the lesser of (a) or (b) below:
(a) $50,000 reduced by the highest outstanding loan balance of loans during
the one-year period ending on the day before the new loan is made.
(b) The greater of (1) or (2), reduced by (3) below:
(1) One-half of the Participant's Vested Account.
(2) $10,000.
(3) Any outstanding loan balance on the date the new loan is made.
For purposes of this maximum, a Participant's Vested Account does not include
any accumulated deductible employee contributions, as defined in Code Section
72(o)(5)(B), and all qualified employer plans, as defined in Code Section
72(p)(4), of the Employer and any Controlled Group member shall be treated as
one plan.
The foregoing notwithstanding, the amount of such loan shall not exceed 50%
of the amount of the Participant's Vested Account. For purposes of this
maximum, a Participant's Vested Account does not include any accumulated
deductible employee contributions, as defined in Code Section 72(o)(5)(B). No
collateral other than a portion of the Participant's Vested Account (as limited
above) shall be accepted. The Loan Administrator shall determine if the
collateral is adequate for the amount of the loan requested.
A Participant must obtain the consent of the Participant's spouse, if any,
to the use of the Vested Account as security for the loan. Spousal consent
shall be obtained no earlier than the beginning of the 90-day period that ends
on the date on which the loan to be so secured is made. The consent must be in
writing, must acknowledge the effect of the loan, and must be witnessed by a
plan representative or a 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 Vested Account is
used for collateral upon renegotiation, extension, renewal, or other revision of
the loan.
If a valid spousal consent has been obtained in accordance with the above,
then, notwithstanding any other provision of this Plan, the portion of the
Participant's Vested Account 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 Vested Account 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 (determined without
regard to the preceding sentence) is payable to the surviving spouse, then the
Vested Account shall be adjusted by first reducing the Vested Account by the
amount of the security used as repayment of the loan, and then determining the
benefit payable to the surviving spouse.
Each loan shall bear a reasonable fixed rate of interest to be determined by
the Loan Administrator. In determining the interest rate, the Loan
Administrator shall take into consideration fixed interest rates currently being
charged by commercial lenders for loans of comparable risk on similar terms and
for similar durations, so that the interest will provide for a return
commensurate with rates currently charged by commercial lenders for loans made
under similar circumstances. The Loan Administrator shall not discriminate
among Participants in the matter of interest rates; but loans granted at
different times may bear different interest rates in accordance with the current
appropriate standards.
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The loan shall by its terms require that repayment (principal and interest)
be amortized in level payments, not less frequently than quarterly, over a
period not extending beyond five years from the date of the loan. The period of
repayment for any loan shall be arrived at by mutual agreement between the Loan
Administrator and the Participant.
The Participant shall make a written application for a loan from the Plan on
forms provided by the Loan Administrator. The application must specify the
amount and duration requested. No loan will be approved unless the Participant
is creditworthy. The Participant must grant authority to the Loan Administrator
to investigate the Participant's creditworthiness so that the loan application
may be properly considered.
Information contained in the application for the loan concerning the income,
liabilities, and assets of the Participant will be evaluated to determine
whether there is a reasonable expectation that the Participant will be able to
satisfy payments on the loan as due. Additionally, the Loan Administrator will
pursue any appropriate further investigations concerning the creditworthiness
and/or credit history of the Participant to determine whether a loan should be
approved.
Each loan shall be fully documented in the form of a promissory note signed
by the Participant for the face amount of the loan, together with interest
determined as specified above.
There will be an assignment of collateral to the Plan executed at the time
the loan is made.
In those cases where repayment through payroll deduction by the Employer is
available, installments are so payable, and a payroll deduction agreement will
be executed by the Participant at the time of making the loan.
Where payroll deduction is not available, payments are to be timely made.
Any payment that is not by payroll deduction shall be made payable to the
Employer or Trustee, as specified in the promissory note, and delivered to the
Loan Administrator, including prepayments, service fees and penalties, if any,
and other amounts due under the note.
The promissory note may provide for reasonable late payment penalties and/or
service fees. Any penalties or service fees shall be applied to all
Participants in a nondiscriminatory manner. If the promissory note so provides,
such amounts may be assessed and collected from the Account of the Participant
as part of the loan balance.
Each loan may be paid prior to maturity, in part or in full, without penalty
or service fee, except as may be set out in the promissory note.
If any amount remains unpaid for more than 31 days after due, a default is
deemed to occur.
Upon default, the Plan has the right to pursue any remedy available by law
to satisfy the amount due, along with accrued interest, including the right to
enforce its claim against the security pledged and execute upon the collateral
as allowed by law.
If any payment of principal or interest or any other amount due under the
promissory note, or any portion thereof, is not made for a period of 90 days
after due, the entire principal balance whether or not otherwise then due, shall
become immediately due and payable without demand or notice, and subject to
collection or
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satisfaction by any lawful means, including specifically but not limited to the
right to enforce the claim against the security pledged and to execute upon the
collateral as allowed by law.
In the event of default, foreclosure on the note and attachment of security
or use of amounts pledged to satisfy the amount then due, will not occur until a
distributable event occurs in accordance with the Plan, and will not occur to an
extent greater than the amount then available upon any distributable event which
has occurred under the Plan.
All reasonable costs and expenses, including but not limited to attorney's
fees, incurred by the Plan in connection with any default or in any proceeding
to enforce any provision of a promissory note or instrument by which a
promissory note for a Participant loan is secured, shall be assessed and
collected from the Account of the Participant as part of the loan balance.
If payroll deduction is being utilized, in the event that a Participant's
available payroll deduction amounts in any given month are insufficient to
satisfy the total amount due, there will be an increase in the amount taken
subsequently, sufficient to make up the amount that is then due. If the
subsequent deduction is also insufficient to satisfy the amount due within 31
days, a default is deemed to occur as above. If any amount remains past due
more than 90 days, the entire principal amount, whether or not otherwise then
due, along with interest then accrued and any other amount then due under the
promissory note, shall become due and payable, as above.
If the Participant ceases to be a party-in-interest (as defined in this
section) the balance of the outstanding loan becomes due and payable, and the
Participant's Vested Account will be used as available for distribution(s) to
pay the outstanding loan. The Participant's Vested Account will not be used to
pay any amount due under the outstanding loan before the date which is 31 days
after the date he ceased to be an Employee, and the Participant may elect to
repay the outstanding loan with interest on the day of repayment. If no
distributable event has occurred under the Plan at the time that the
Participant's Vested Account would otherwise be used under this provision to pay
any amount due under the outstanding loan, this will not occur until the time,
or in excess of the extent to which, a distributable event occurs under the
Plan.
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ARTICLE VI
DISTRIBUTION OF BENEFITS
SECTION 6.01--AUTOMATIC FORMS OF DISTRIBUTION.
Unless a qualified election of an optional form of benefit has been made
within the election period (see the ELECTION PROCEDURES SECTION of Article VI),
the automatic form of benefit payable to or on behalf of a Participant is
determined as follows:
(a) The automatic form of retirement benefit for a Participant who does not
die before his Annuity Starting Date shall be the Qualified Joint and
Survivor Form.
(b) The automatic form of death benefit for a Participant who dies before
his Annuity Starting Date shall be:
(1) A Qualified Preretirement Survivor Annuity for a Participant who has
a spouse to whom he has been continuously married throughout the
one-year period ending on the date of his death. The spouse may
elect to start receiving the death benefit on any first day of the
month on or after the Participant dies and before the date the
Participant would have been age 70 1/2. If the spouse dies before
benefits start, the Participant's Vested Account, determined as of
the date of the spouse's death, shall be paid to the spouse's
Beneficiary.
(2) A single-sum payment to the Participant's Beneficiary for a
Participant who does not have a spouse who is entitled to a
Qualified Preretirement Survivor Annuity.
Before a death benefit will be paid on account of the death of a
Participant who does not have a spouse who is entitled to a Qualified
Preretirement Survivor Annuity, it must be established to the
satisfaction of a plan representative that the Participant does not have
such a spouse.
SECTION 6.02--OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION REQUIREMENTS.
(a) For purposes of this section, the following terms are defined:
Applicable Life Expectancy means Life Expectancy (or Joint and Last
Survivor Expectancy) calculated using the attained age of the
Participant (or Designated Beneficiary) as of the Participant's (or
Designated Beneficiary's) birthday in the applicable calendar year
reduced by one for each calendar year which has elapsed since the date
Life Expectancy was first calculated. If Life Expectancy is being
recalculated, the Applicable Life Expectancy shall be the Life
Expectancy so recalculated. The applicable calendar year shall be the
first Distribution Calendar Year, and if Life Expectancy is being
recalculated such succeeding calendar year.
Designated Beneficiary means the individual who is designated as the
beneficiary under the Plan in accordance with Code Section 401(a)(9) and
the regulations thereunder.
Distribution Calendar Year means 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
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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 (e) below.
Joint and Last Survivor Expectancy means joint and last survivor
expectancy computed by use of the expected return multiples in Table 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 (e)(2)(ii) below) 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.
Life Expectancy means life expectancy computed by use of the expected
return multiples in Table V 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 (e)(2)(ii) below) 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.
Participant's Benefit means
(1) 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 the dates in the
valuation calendar year after the valuation date and decreased by
distributions made in the valuation calendar year after the
valuation date.
(2) For purposes of (1) 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.
Required Beginning Date means, for a Participant, the first day of
April of the calendar year following the calendar year in which the
Participant attains age 70 1/2, unless otherwise provided in (1), (2) or
(3) below:
(1) The Required Beginning Date for a Participant who attains age 70 1/2
before January 1, 1988, and 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) The Required Beginning Date for a Participant who attains age 70 1/2
before January 1, 1988, and who is a 5-percent owner is the first
day of April of the calendar year following the later of
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(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.
(3) The Required Beginning Date of a Participant who is not a 5-percent
owner and who attains age 70 1/2 during 1988 and who has not retired
as of January 1, 1989, is April 1, 1990.
A Participant is treated as a 5-percent owner for purposes of this
section if such Participant is a 5-percent owner as defined in Code
Section 416(i) (determined in accordance with Code 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.
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.
(b) The optional forms of retirement benefit shall be the following: a
straight life annuity; single life annuities with certain periods of
five, ten or fifteen years; a single life annuity with installment
refund; survivorship life annuities with installment refund and
survivorship percentages of 50, 66 2/3 or 100; fixed period annuities
for any period of whole months which is not less than 60 and does not
exceed the Life Expectancy of the Participant and the named Beneficiary
as provided in (d) below where the Life Expectancy is not recalculated;
and a series of installments chosen by the Participant with a minimum
payment each year beginning with the year the Participant turns age
70 1/2. The payment for the first year in which a minimum payment is
required will be made by April 1 of the following calendar year. The
payment for the second year and each successive year will be made by
December 31 of that year. The minimum payment will be based on a period
equal to the Joint and Last Survivor Expectancy of the Participant and
the Participant's spouse, if any, as provided in (d) below where the
Joint and Last Survivor Expectancy is recalculated. The balance of the
Participant's Vested Account, if any, will be payable on the
Participant's death to his Beneficiary in a single sum. The Participant
may also elect to receive his Vested Account in a single-sum payment.
Election of an optional form is subject to the qualified election
provisions of Article VI.
Any annuity contract distributed shall be nontransferable. The terms
of any annuity contract purchased and distributed by the Plan to a
Participant or spouse shall comply with the requirements of this Plan.
(c) The optional forms of death benefit are a single-sum payment and any
annuity that is an optional form of retirement benefit. However, a
series of installments shall not be available if the Beneficiary is not
the spouse of the deceased Participant.
(d) Subject to the AUTOMATIC FORMS OF DISTRIBUTION SECTION of Article VI,
joint and survivor annuity requirements, the requirements of this
section 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 section apply to
calendar years beginning after December 31, 1984.
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All distributions required under this section shall be determined and
made in accordance with the proposed regulations under Code Section
401(a)(9), including the minimum distribution incidental benefit
requirement of section 1.401(a)(9)-2 of the proposed regulations.
The entire interest of a Participant must be distributed or begin to
be distributed no later than the Participant's Required Beginning Date.
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
combination thereof):
(1) the life of the Participant,
(2) the life of the Participant and a Designated Beneficiary,
(3) a period certain not extending beyond the Life Expectancy of the
Participant, or
(4) a period certain not extending beyond the Joint and Last Survivor
Expectancy of the Participant and a Designated Beneficiary.
If the Participant's interest is to be distributed in other than a
single sum, the following minimum distribution rules shall apply on or
after the Required Beginning Date:
(5) Individual account:
(i) If a Participant's Benefit is to be distributed over
(a) 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
(b) a period not extending beyond the Life Expectancy of the
Designated Beneficiary,
the amount required to be distributed for each calendar year
beginning with the distributions for the first Distribution
Calendar Year, must be at least equal to 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 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
(a) the Applicable Life Expectancy or
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(b) 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 (5)(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 the Distribution Calendar Year for other calendar years,
including the minimum distribution for the Distribution Calendar
Year in which the Participant's Required Beginning Date occurs,
must be made on or before December 31 of that Distribution
Calendar Year.
(6) Other forms:
(i) 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
Code Section 401(a)(9) and the proposed regulations thereunder.
(e) Death distribution provisions:
(1) Distribution beginning before death. If the Participant dies after
distribution of his 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.
(2) Distribution beginning after death. If the Participant dies before
distribution of his 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
(a) December 31 of the calendar year immediately following the
calendar year in which the Participant died and
(b) December 31 of the calendar year in which the Participant
would have attained age 70 1/2.
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If the Participant has not made an election pursuant to this
(e)(2) by the time of his death, the Participant's Designated
Beneficiary must elect the method of distribution no later than the
earlier of
(iii) December 31 of the calendar year in which distributions would
be required to begin under this subparagraph, or
(iv) 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.
(3) For purposes of (e)(2) above, if the surviving spouse dies after the
Participant, but before payments to such spouse begin, the
provisions of (e)(2) above, with the exception of (e)(2)(ii)
therein, shall be applied as if the surviving spouse were the
Participant.
(4) For purposes of this (e), 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.
(5) For purposes of this (e), distribution of a Participant's interest
is considered to begin on the Participant's Required Beginning Date
(or if (e)(3) above is applicable, the date distribution is required
to begin to the surviving spouse pursuant to (e)(2) above). 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 6.02A--DISTRIBUTIONS IN QUALIFYING EMPLOYER SECURITIES.
In lieu of the cash distributions permitted under Section 6.02 above, any
portion of the Participant's Vested Account held in the Qualifying Employer
Securities Fund may be distributed in kind upon the election of the Participant.
Fractional shares valued as of the most recent Valuation Date shall be paid in
cash. The distribution shall include any dividends (cash or stock) on such
whole shares or any additional shares received as a result of a stock split or
any other adjustment to such whole shares since the Valuation Date preceding the
date of distribution.
Election of such distribution is subject to the qualified election
provisions of Article VI.
SECTION 6.03--ELECTION PROCEDURES.
The Participant, Beneficiary, or spouse shall make any election under this
section in writing. The Plan Administrator may require such individual to
complete and sign any necessary documents as to the provisions to be made. Any
election permitted under (a) and (b) below shall be subject to the qualified
election provisions of (c) below.
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(a) Retirement Benefits. A Participant may elect his Beneficiary or
Contingent Annuitant and may elect to have retirement benefits
distributed under any of the optional forms of retirement benefit
described in the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION
REQUIREMENTS SECTION of Article VI.
(b) Death Benefits. A Participant may elect his Beneficiary and may elect
to have death benefits distributed under any of the optional forms of
death benefit described in the OPTIONAL FORMS OF DISTRIBUTION AND
DISTRIBUTION REQUIREMENTS SECTION of Article VI.
If the Participant has not elected an optional form of distribution
for the death benefit payable to his Beneficiary, the Beneficiary may,
for his own benefit, elect the form of distribution, in like manner as a
Participant.
The Participant may waive the Qualified Preretirement Survivor Annuity
by naming someone other than his spouse as Beneficiary.
In lieu of the Qualified Preretirement Survivor Annuity described in
the AUTOMATIC FORMS OF DISTRIBUTION SECTION of Article VI, the spouse
may, for his own benefit, waive the Qualified Preretirement Survivor
Annuity by electing to have the benefit distributed under any of the
optional forms of death benefit described in the OPTIONAL FORMS OF
DISTRIBUTION AND DISTRIBUTION REQUIREMENTS SECTION of Article VI.
(c) Qualified Election. The Participant, Beneficiary or spouse may make an
election at any time during the election period. The Participant,
Beneficiary, or spouse may revoke the election made (or make a new
election) at any time and any number of times during the election
period. An election is effective only if it meets the consent
requirements below.
The election period as to retirement benefits is the 90-day period
ending on the Annuity Starting Date. An election to waive the Qualified
Joint and Survivor Form may not be made before the date he is provided
with the notice of the ability to waive the Qualified Joint and Survivor
Form. If the Participant elects the series of installments, he may
elect on any later date to have the balance of his Vested Account paid
under any of the optional forms of retirement benefit available under
the Plan. His election period for this election is the 90-day period
ending on the Annuity Starting Date for the optional form of retirement
benefit elected.
A Participant may make an election as to death benefits at any time
before he dies. The spouse's election period begins on the date the
Participant dies and ends on the date benefits begin. The Beneficiary's
election period begins on the date the Participant dies and ends on the
date benefits begin. An election to waive the Qualified Preretirement
Survivor Annuity may not be made by the Participant before the date he
is provided with the notice of the ability to waive the Qualified
Preretirement Survivor Annuity. A Participant's election to waive the
Qualified Preretirement Survivor Annuity which is made before the first
day of the Plan Year in which he reaches age 35 shall become invalid on
such date. An election made by a Participant after he ceases to be an
Employee will not become invalid on the first day of the Plan Year in
which he reaches age 35 with respect to death benefits from that part of
his Account resulting from Contributions made before he ceased to be an
Employee.
If the Participant's Vested Account has at any time exceeded $3,500,
any benefit which is (1) immediately distributable or (2) payable in a
form other than a Qualified Joint and Survivor Form or
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a Qualified Preretirement Survivor Annuity requires the consent of the
Participant and the Participant's spouse (or where either the
Participant or the spouse has died, the survivor). The consent of the
Participant or spouse to a benefit which is immediately distributable
must not be made before the date the Participant or spouse is provided
with the notice of the ability to defer the distribution. Such consent
shall be made in writing. The consent shall not be made more than 90
days before the Annuity Starting Date. Spousal consent is not required
for a benefit which is immediately distributable in a Qualified Joint
and Survivor Form. Furthermore, if spousal consent is not required
because the Participant is electing an optional form of retirement
benefit that is not a life annuity pursuant to (d) below, only the
Participant need consent to the distribution of a benefit payable in a
form that is not a life annuity and which 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 Code Section 401(a)(9) or Code Section 415. In addition, upon
termination of this Plan if the Plan does not offer an annuity option
(purchased from a commercial provider), the Participant's Account
balance may, without the Participant's consent, be distributed to the
Participant or transferred to another defined contribution plan (other
than an employee stock ownership plan as defined in Code Section
4975(e)(7)) within the same Controlled Group. A benefit is immediately
distributable if any part of the benefit could be distributed to the
Participant (or surviving spouse) before the Participant attains (or
would have attained if not deceased) the older of Normal Retirement Age
or age 62. If the Qualified Joint and Survivor Form is waived, the
spouse has the right to limit consent only to a specific Beneficiary or
a specific form of benefit. The spouse can relinquish one or both such
rights. Such consent shall be made in writing. The consent shall not be
made more than 90 days before the Annuity Starting Date. If the
Qualified Preretirement Survivor Annuity is waived, the spouse has the
right to limit consent only to a specific Beneficiary. Such consent
shall be in writing. The spouse's consent shall be witnessed by a plan
representative or notary public. The spouse's consent must acknowledge
the effect of the election, including that the spouse had the right to
limit consent only to a specific Beneficiary or a specific form of
benefit, if applicable, and that the relinquishment of one or both such
rights was voluntary. Unless the consent of the spouse expressly permits
designations by the Participant without a requirement of further consent
by the spouse, the spouse's consent must be limited to the form of
benefit, if applicable, and the Beneficiary (including any Contingent
Annuitant), class of Beneficiaries, or contingent Beneficiary named in
the election. Spousal consent is not required, however, if the
Participant establishes to the satisfaction of the plan representative
that the consent of the spouse cannot be obtained because there is no
spouse or the spouse cannot be located. A spouse's consent under this
paragraph shall not be valid with respect to any other spouse. A
Participant may revoke a prior election without the consent of the
spouse. Any new election will require a new spousal consent, unless the
consent of the spouse expressly permits such election by the Participant
without further consent by the spouse. A spouse's consent may be revoked
at any time within the Participant's election period.
(d) Special Rule for Profit Sharing Plan. As provided in the preceding
provisions of the Plan, if a Participant has a spouse to whom he has
been continuously married throughout the one-year period ending on the
date of his death, the Participant's Vested Account shall be paid to
such spouse. However, if there is no such spouse or if the surviving
spouse has already consented in a manner conforming to the qualified
election requirements in (c) above, the Vested Account shall be payable
to the Participant's Beneficiary in the event of the Participant's
death.
The Participant may waive the spousal death benefit described above at
any time provided that no such waiver shall be effective unless it
satisfies the conditions of (c) above (other than the
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notification requirement referred to therein) that would apply to the
Participant's waiver of the Qualified Preretirement Survivor Annuity.
Because this is a profit sharing plan which pays death benefits as
described above, this subsection (d) applies if the following condition
is met: with respect to the Participant, this Plan is not a direct or
indirect transferee after December 31, 1984, of a defined benefit plan,
money purchase plan (including a target plan), stock bonus plan or
profit sharing plan which is subject to the survivor annuity
requirements of Code Section 401(a)(11) and Code Section 417. If the
above condition is met, spousal consent is not required for electing a
benefit payable in a form that is not a life annuity. If the above
condition is not met, the consent requirements of this article shall be
operative.
SECTION 6.04--NOTICE REQUIREMENTS.
(a) Optional forms of retirement benefit. The Plan Administrator shall
furnish to the Participant and the Participant's spouse a written
explanation of the optional forms of retirement benefit in the OPTIONAL
FORMS OF DISTRIBUTION AND DISTRIBUTION REQUIREMENTS SECTION of Article
VI, including the material features and relative values of these
options, in a manner that would satisfy the notice requirements of Code
Section 417(a)(3) and the right of the Participant and the Participant's
spouse to defer distribution until the benefit is no longer immediately
distributable. The Plan Administrator shall furnish the written
explanation by a method reasonably calculated to reach the attention of
the Participant and the Participant's spouse no less than 30 days and no
more than 90 days before the Annuity Starting Date.
(b) Qualified Joint and Survivor Form. The Plan Administrator shall furnish
to the Participant a written explanation of the following: the terms
and conditions of the Qualified Joint and Survivor Form; the
Participant's right to make, and the effect of, an election to waive the
Qualified Joint and Survivor Form; the rights of the Participant's
spouse; and the right to revoke an election and the effect of such a
revocation. The Plan Administrator shall furnish the written
explanation by a method reasonably calculated to reach the attention of
the Participant no less than 30 days and no more than 90 days before the
Annuity Starting Date.
After the written explanation is given, a Participant or spouse may
make written request for additional information. The written
explanation must be personally delivered or mailed (first class mail,
postage prepaid) to the Participant or spouse within 30 days from the
date of the written request. The Plan Administrator does not need to
comply with more than one such request by a Participant or spouse.
The Plan Administrator's explanation shall be written in nontechnical
language and will explain the terms and conditions of the Qualified
Joint and Survivor Form and the financial effect upon the Participant's
benefit (in terms of dollars per benefit payment) of electing not to
have benefits distributed in accordance with the Qualified Joint and
Survivor Form.
(c) Qualified Preretirement Survivor Annuity. As required by the Code and
Federal regulation, the Plan Administrator shall furnish to the
Participant a written explanation of the following: the terms and
conditions of the Qualified Preretirement Survivor Annuity; the
Participant's right to make, and the effect of, an election to waive the
Qualified Preretirement Survivor Annuity; the rights of the
Participant's spouse; and the right to revoke an election and the effect
of such a revocation. The Plan Administrator shall furnish the written
explanation by a method reasonably calculated to
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reach the attention of the Participant within the applicable period. The
applicable period for a Participant is whichever of the following
periods ends last:
(1) the period beginning one year before the date the individual becomes
a Participant and ending one year after such date; or
(2) the period beginning one year before the date the Participant's
spouse is first entitled to a Qualified Preretirement Survivor
Annuity and ending one year after such date.
If such notice is given before 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, an additional notice shall be given within
such period. If a Participant ceases to be an Employee before attaining
age 35, an additional notice shall be given within the period beginning
one year before the date he ceases to be an Employee and ending one year
after such date.
After the written explanation is given, a Participant or spouse may
make written request for additional information. The written
explanation must be personally delivered or mailed (first class mail,
postage prepaid) to the Participant or spouse within 30 days from the
date of the written request. The Plan Administrator does not need to
comply with more than one such request by a Participant or spouse.
The Plan Administrator's explanation shall be written in nontechnical
language and will explain the terms and conditions of the Qualified
Preretirement Survivor Annuity and the financial effect upon the
spouse's benefit (in terms of dollars per benefit payment) of electing
not to have benefits distributed in accordance with the Qualified
Preretirement Survivor Annuity.
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ARTICLE VII
TERMINATION OF PLAN
The Employer expects to continue the Plan indefinitely but reserves the
right to terminate the Plan in whole or in part at any time upon giving written
notice to all parties concerned. Complete discontinuance of Contributions under
the Plan constitutes complete termination of Plan.
The Account of each Participant shall be fully (100%) vested and
nonforfeitable as of the effective date of complete termination of Plan. The
Account of each Participant who is included in the group of Participants deemed
to be affected by the partial termination of the Plan shall be fully (100%)
vested and nonforfeitable as of the effective date of the partial Plan
termination. The Participant's Account shall continue to participate in the
earnings credited, expenses charged and any appreciation or depreciation of the
Investment Fund until the Vested Account is distributed. A distribution under
this article will be a retirement benefit and shall be distributed to the
Participant according to the provisions of Article VI.
A Participant's Account which does not result from Contributions which are
used to compute the Actual Deferral Percentage, as defined in the EXCESS AMOUNTS
SECTION of Article III, may be distributed to the Participant after the
effective date of the complete or partial Plan termination. A Participant's
Account resulting from Contributions which are used to compute such percentage
may be distributed upon termination of the Plan without the establishment or
maintenance of another defined contribution plan, other than an employee stock
ownership plan (as defined in Code Section 4975(e) or Code Section 409) or a
simplified employee pension plan (as defined in Code Section 408(k)). Such a
distribution made after March 31, 1988, must be in a single sum.
Upon complete termination of Plan, no more Employees shall become
Participants and no more Contributions shall be made.
The assets of this Plan shall not be paid to the Employer at any time,
except that, after the satisfaction of all liabilities under the Plan, any
assets remaining may be paid to the Employer. The payment may not be made if it
would contravene any provision of law.
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ARTICLE VIII
ADMINISTRATION OF PLAN
SECTION 8.01--ADMINISTRATION.
Subject to the provisions of this article, the Plan Administrator has
complete control of the administration of the Plan. The Plan Administrator has
all the powers necessary for it to properly carry out its administrative duties.
Not in limitation, but in amplification of the foregoing, the Plan Administrator
has the power to construe the Plan, including ambiguous provisions, and to
determine all questions that may arise under the Plan, including all questions
relating to the eligibility of Employees to participate in the Plan and the
amount of benefit to which any Participant, Beneficiary, spouse or Contingent
Annuitant may become entitled. The Plan Administrator's decisions upon all
matters within the scope of its authority shall be final.
Unless otherwise set out in the Plan or Group Contract, the Plan
Administrator may delegate recordkeeping and other duties which are necessary
for the administration of the Plan to any person or firm which agrees to accept
such duties. The Plan Administrator shall be entitled to rely upon all tables,
valuations, certificates and reports furnished by the consultant or actuary
appointed by the Plan Administrator and upon all opinions given by any counsel
selected or approved by the Plan Administrator.
The Plan Administrator shall receive all claims for benefits by
Participants, former Participants, Beneficiaries, spouses, and Contingent
Annuitants. The Plan Administrator shall determine all facts necessary to
establish the right of any Claimant to benefits and the amount of those benefits
under the provisions of the Plan. The Plan Administrator may establish rules
and procedures to be followed by Claimants in filing claims for benefits, in
furnishing and verifying proofs necessary to determine age, and in any other
matters required to administer the Plan.
Each Participant with an investment in the Qualifying Employer Securities
Fund, shall be entitled to direct the Trustee as to the exercise of all voting
powers over shares allocated to his Account provided that such Participant had
such an investment in his Account as of the most recent date coincident with or
preceding the applicable record date for which such records are available. The
Trustee shall vote all Qualifying Employer Securities allocated or unallocated
to a Participant's Qualifying Employer Securities Account which are not voted by
the Participant, because the Participant has not directed (or not timely
directed) the Trustee as to the manner in which such Qualifying Employer
Securities are to be voted, in the same proportion as those shares of Qualifying
Employer Securities for which the Trustee has received proper direction on such
matter.
In the event that a tender offer is made for some or all of the shares of
the Employer, each Participant shall have the right to direct whether those
shares allocated to his Account, whether or not vested, shall be tendered. This
right shall be exercised in the manner set forth herein. In the absence of a
written directive from or election by a Participant to the Plan Administrator,
the Plan Administrator shall direct the Trustee not to tender such shares.
Because the choice is to be given to the Participants, the Plan Administrator
and the Trustee shall not have fiduciary responsibility with respect to the
decision to tender or not or whether to tender all such shares or only a portion
thereof.
In order to facilitate the decision of Participants whether to tender their
shares in a tender offer (or how many shares to tender), the Plan Administrator
shall provide election forms for the Participants, whereby they may elect to
tender or not and whereby they may elect to tender all or a portion of such
shares. Unless otherwise limited by Federal securities law, such election may
be made or changed at any time prior to the date
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before the expiration date of the tender offer (with extensions); any election
or change in election must be received by the Plan Administrator, or designated
representative of the Plan Administrator, on or before the day preceding the
expiration date of the tender offer (with extensions, if any). The Plan
Administrator may develop procedures to facilitate Participants' choices, such
as the use of facsimile transmissions for the Employees located in areas
physically remote from the Plan Administrator. The election shall be binding on
the Plan Administrator and the Trustee. The Plan Administrator shall make every
effort to distribute the notice of the tender, election forms and other
communications related to the tender offer to all Participants as soon as
practicable following the announcement of the tender offer, including mailing
such notice and form to Participants and posting such notice in places designed
to be reviewed by Participants.
As to shares which are not allocated to the Account of any Participant, all
such shares (in the aggregate) shall be tendered or not as the majority of the
shares held by Participants and directed by Participants are tendered or not.
The Plan Administrator shall direct the Trustee to tender all such unallocated
shares or not, in accordance with the elections of the Participants having an
allocation of the majority of the shares under the Plan.
Fractional Shares. After the expiration of the period during which Participants
may direct the Trustee to tender their shares, the Trustee shall determine the
total number of whole shares it was directed to tender, and the total number of
whole shares it was directed not to tender (either expressly or by a
Participant's failure to timely to respond). If the majority of the allocated
and unallocated whole shares of Qualifying Employer Securities were directed to
be tendered, then the Trustee also shall tender, as promptly as practical, any
allocated or unallocated fractional shares that are held in the Plan. However,
if the majority of the allocated or unallocated whole shares of Qualifying
Employer Securities were directed not to be tendered (either expressly or by a
Participant's failure timely to respond), the Trustee shall not tender such
shares.
In voting or tendering shares of Qualifying Employer Securities under this
section, the Trustee is directed and agrees to follow the instructions of the
Participants (or beneficiaries) as named fiduciaries in accordance with ERISA
Section 403(a)(1).
i) Each Participant's (or beneficiary's) voting or tendering instructions
under this section will be completely confidential. The Trustee or his
agent agrees to hold such instructions in confidence and not to divulge
or release such instructions to any person, including particularly any
employer, officer, employer or director of an employer, or any person
directly or indirectly controlling, controlled by or under common
control with an employer (including any such person which is also a
Trustee); provided, however, that to the extent necessary to the
operation of the plan and the implementation of Participants' voting or
tendering rights, the Trustee may transmit such instructions to a
recordkeeper, auditor, tallier or similar service provider who is not a
person specified in the preceding clause of this sentence and who agrees
not to divulge or release such instructions to any such person.
ii) Any of the Trustee's duties under this section may be performed by an
agent of the Trustee or by a service provider retained by the Trustee,
the Plan Administrator or the Employer.
SECTION 8.02--RECORDS.
All acts and determinations of the Plan Administrator shall be duly
recorded. All these records, together with other documents necessary for the
administration of the Plan, shall be preserved in the Plan Administrator's
custody.
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Writing (handwriting, typing, printing), photostating, photographing,
microfilming, magnetic impulse, mechanical or electrical recording or other
forms of data compilation shall be acceptable means of keeping records.
SECTION 8.03--INFORMATION AVAILABLE.
Any Participant in the Plan or any Beneficiary may examine copies of the
Plan description, latest annual report, any bargaining agreement, this Plan, the
Group Contract or any other instrument under which the Plan was established or
is operated. The Plan Administrator shall maintain all of the items listed in
this section in its office, or in such other place or places as it may designate
in order to comply with governmental regulations. These items may be examined
during reasonable business hours. Upon the written request of a Participant or
Beneficiary receiving benefits under the Plan, the Plan Administrator will
furnish him with a copy of any of these items. The Plan Administrator may make
a reasonable charge to the requesting person for the copy.
SECTION 8.04--CLAIM AND APPEAL PROCEDURES.
A Claimant must submit any required forms and pertinent information when
making a claim for benefits under the Plan.
If a claim for benefits under the Plan is denied, the Plan Administrator
shall provide adequate written notice to the Claimant whose claim for benefits
under the Plan has been denied. The notice must be furnished within 90 days of
the date that the claim is received by the Plan Administrator. The Claimant
shall be notified in writing within this initial 90-day period if special
circumstances require an extension of time needed to process the claim and the
date by which the Plan Administrator's decision is expected to be rendered. The
written notice shall be furnished no later than 180 days after the date the
claim was received by the Plan Administrator.
The Plan Administrator's notice to the Claimant shall specify the reason for
the denial; specify references to pertinent Plan provisions on which denial is
based; describe any additional material and information needed for the Claimant
to perfect his claim for benefits; explain why the material and information is
needed; inform the Claimant that any appeal he wishes to make must be in writing
to the Plan Administrator within 60 days after receipt of the Plan
Administrator's notice of denial of benefits and that failure to make the
written appeal within such 60-day period shall render the Plan Administrator's
determination of such denial final, binding and conclusive.
If the Claimant appeals to the Plan Administrator, the Claimant, or his
authorized representative, may submit in writing whatever issues and comments
the Claimant, or his representative, feels are pertinent. The Claimant, or his
authorized representative may review pertinent Plan documents. The Plan
Administrator shall reexamine all facts related to the appeal and make a final
determination as to whether the denial of benefits is justified under the
circumstances. The Plan Administrator shall advise the Claimant of its decision
within 60 days of his written request for review, unless special circumstances
(such as a hearing) would make rendering a decision within the 60-day limit
unfeasible. The Claimant must be notified within the 60-day limit if an
extension is necessary. The Plan Administrator shall render a decision on a
claim for benefits no later than 120 days after the request for review is
received.
SECTION 8.05--UNCLAIMED VESTED ACCOUNT PROCEDURE.
At the time the Participant's Vested Account is distributable to the
Participant, spouse or Beneficiary without his consent according to the
provisions of Article VI or Article IX, the Plan Administrator, by certified or
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registered mail addressed to his last known address and in accordance with the
notice requirements of Article VI, will notify him of his entitlement to a
benefit. If the Participant, spouse or Beneficiary fails to claim the Vested
Account or make his whereabouts known in writing within six months from the date
of mailing the notice, the Plan Administrator may treat such unclaimed Vested
Account as a forfeiture and apply it according to the forfeiture provisions of
Article III. If Article III contains no forfeiture provisions, such amount will
be applied to reduce the earliest Employer Contributions due after the
forfeiture arises.
If a Participant's Vested Account is forfeited according to the provisions
of the above paragraph and the Participant, his spouse or his Beneficiary at any
time make a claim for benefits, the forfeited Vested Account shall be
reinstated, unadjusted for any gains or losses occurring after the date it was
forfeited. The reinstated Vested Account shall then be distributed to the
Participant, spouse or Beneficiary according to the preceding provisions of the
Plan.
SECTION 8.06--DELEGATION OF AUTHORITY.
All or any part of the administrative duties and responsibilities under this
article may be delegated by the Plan Administrator to a retirement committee.
The duties and responsibilities of the retirement committee shall be set out in
a separate written agreement.
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ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01--AMENDMENTS.
The Employer may amend this Plan at any time, including any remedial
retroactive changes (within the specified period of time as may be determined by
Internal Revenue Service regulations) to comply with the requirements of any law
or regulation issued by any governmental agency to which the Employer is
subject. An amendment may not diminish or adversely affect any accrued interest
or benefit of Participants or their Beneficiaries or eliminate an optional form
of distribution with respect to benefits attributable to service before the
amendment nor allow reversion or diversion of Plan assets to the Employer at any
time, except as may be necessary to comply with the requirements of any law or
regulation issued by any governmental agency to which the Employer is subject.
No amendment to this Plan shall be effective to the extent that it has the
effect of decreasing a Participant's accrued benefit. However, a Participant's
Account may be reduced to the extent permitted under Code Section 412(c)(8).
For purposes of this paragraph, a Plan amendment which has the effect of
decreasing a Participant's Account or eliminating an optional form of benefit,
with respect to benefits attributable to service before the amendment shall be
treated as reducing an accrued benefit. 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
employer-derived accrued benefit will not be less than his percentage computed
under the Plan without regard to such amendment.
An amendment shall not decrease a Participant's vested interest in the Plan.
If an amendment to the Plan, or a deemed amendment in the case of a change in
top-heavy status of the Plan as provided in the MODIFICATION OF VESTING
REQUIREMENTS SECTION of Article X, changes the computation of the percentage
used to determine that portion of a Participant's Account attributable to
Employer Contributions which is nonforfeitable (whether directly or indirectly),
each Participant or former Participant
(a) who has completed at least three Years of Service on the date the
election period described below ends (five Years of Service if the
Participant does not have at least one Hour-of-Service in a Plan Year
beginning after December 31, 1988) and
(b) whose nonforfeitable percentage will be determined on any date after the
date of the change
may elect, during the election period, to have the nonforfeitable percentage of
his Account that results from Employer Contributions determined without regard
to the amendment. This election may not be revoked. An election does not need
to be provided for any Participant or former Participant whose nonforfeitable
percentage, determined according to the Plan provisions as changed, cannot at
any time be less than the percentage determined without regard to such change.
The election period shall begin no later than the date the Plan amendment is
adopted, or deemed adopted in the case of a change in the top-heavy status of
the Plan, and end no earlier than the sixtieth day after the latest of the date
the amendment is adopted (deemed adopted) or becomes effective, or the date the
Participant is issued written notice of the amendment (deemed amendment) by the
Employer or the Plan Administrator.
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SECTION 9.02--DIRECT ROLLOVERS.
This section applies to distributions made on or after January 1, 1993.
Notwithstanding any provision of the Plan to the contrary that would otherwise
limit a Distributee's election under this section, a Distributee may elect, at
the time and in the manner prescribed by the Plan Administrator, to have any
portion of an Eligible Rollover Distribution paid directly to an Eligible
Retirement Plan, specified by the Distributee, in a Direct Rollover.
SECTION 9.03--MERGERS AND DIRECT TRANSFERS.
The Plan may not be merged or consolidated with, nor have its assets or
liabilities transferred to, any other retirement plan, unless each Participant
in the plan would (if the 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).
The Employer may enter into merger agreements or direct transfer of assets
agreements with the employers under other retirement plans which are qualifiable
under Code Section 401(a), including an elective transfer, and may accept the
direct transfer of plan assets, or may transfer plan assets, as a party to any
such agreement. The Employer shall not consent to, or be a party to a merger,
consolidation or transfer of assets with a defined benefit plan if such action
would result in a defined benefit feature being maintained under this Plan.
The Plan may accept a direct transfer of plan assets on behalf of an
Eligible Employee. If the Eligible Employee is not an Active Participant when
the transfer is made, the Eligible Employee shall be deemed to be an Active
Participant only for the purpose of investment and distribution of the
transferred assets. Employer Contributions shall not be made for or allocated
to the Eligible Employee, until the time he meets all of the requirements to
become an Active Participant.
The Plan shall hold, administer and distribute the transferred assets as a
part of the Plan. The Plan shall maintain a separate account for the benefit of
the Employee on whose behalf the Plan accepted the transfer in order to reflect
the value of the transferred assets. Unless a transfer of assets to the Plan is
an elective transfer, the Plan shall apply the optional forms of benefit
protections described in the AMENDMENTS SECTION of Article IX to all transferred
assets. A transfer is elective if: (1) the transfer is voluntary, under a
fully informed election by the Participant; (2) the Participant has an
alternative that retains his Code Section 411(d)(6) protected benefits
(including an option to leave his benefit in the transferor plan, if that plan
is not terminating); (3) if the transferor plan is subject to Code Sections
401(a)(11) and 417, the transfer satisfies the applicable spousal consent
requirements of the Code; (4) the notice requirements under Code Section 417,
requiring a written explanation with respect to an election not to receive
benefits in the form of a qualified joint and survivor annuity, are met with
respect to the Participant and spousal transfer election; (5) the Participant
has a right to immediate distribution from the transferor plan under provisions
in the plan not inconsistent with Code Section 401(a); (6) the transferred
benefit is equal to the Participant's entire nonforfeitable accrued benefit
under the transferor plan, calculated to be at least the greater of the single
sum distribution provided by the transferor plan (if any) or the present value
of the Participant's accrued benefit under the transferor plan payable at the
plan's normal retirement age and calculated using an interest rate subject to
the restrictions of Code Section 417(e) and subject to the overall limitations
of Code Section 415; (7) the Participant has a 100% nonforfeitable interest in
the transferred benefit; and (8) the transfer otherwise satisfies applicable
Treasury regulations.
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SECTION 9.04--PROVISIONS RELATING TO THE INSURER
AND OTHER PARTIES.
The obligations of an Insurer shall be governed solely by the provisions of
the Group Contract. The Insurer shall not be required to perform any act not
provided in or contrary to the provisions of the Group Contract. See the
CONSTRUCTION SECTION of this article.
Any issuer or distributor of investment contracts or securities is governed
solely by the terms of its policies, written investment contract, prospectuses,
security instruments, and any other written agreements entered into with the
Trustee.
Such Insurer, issuer or distributor is not a party to the Plan, nor bound in
any way by the Plan provisions. Such parties shall not be required to look to
the terms of this Plan, nor to determine whether the Employer, the Plan
Administrator, the Trustee, or the Named Fiduciary have the authority to act in
any particular manner or to make any contract or agreement.
Until notice of any amendment or termination of this Plan or a change in
Trustee has been received by the Insurer at its home office or an issuer or
distributor at their principal address, they are and shall be fully protected in
assuming that the Plan has not been amended or terminated and in dealing with
any party acting as Trustee according to the latest information which they have
received at their home office or principal address.
SECTION 9.05--EMPLOYMENT STATUS.
Nothing contained in this Plan gives an Employee the right to be retained in
the Employer's employ or to interfere with the Employer's right to discharge any
Employee.
SECTION 9.06--RIGHTS TO PLAN ASSETS.
No Employee shall have any right to or interest in any assets of the Plan
upon termination of his employment or otherwise except as specifically provided
under this Plan, and then only to the extent of the benefits payable to such
Employee in accordance with Plan provisions.
Any final payment or distribution to a Participant or his legal
representative or to any Beneficiaries, spouse or Contingent Annuitant of such
Participant under the Plan provisions shall be in full satisfaction of all
claims against the Plan, the Named Fiduciary, the Plan Administrator, the
Trustee, the Insurer, and the Employer arising under or by virtue of the Plan.
SECTION 9.07--BENEFICIARY.
Each Participant may name a Beneficiary to receive any death benefit (other
than any income payable to a Contingent Annuitant) that may arise out of his
participation in the Plan. The Participant may change his Beneficiary from time
to time. Unless a qualified election has been made, for purposes of
distributing any death benefits before Retirement Date, the Beneficiary of a
Participant who has a spouse who is entitled to a Qualified Preretirement
Survivor Annuity shall be the Participant's spouse. The Participant's
Beneficiary designation and any change of Beneficiary shall be subject to the
provisions of the ELECTION PROCEDURES SECTION of Article VI. It is the
responsibility of the Participant to give written notice to the Insurer of the
name of the Beneficiary on a form furnished for that purpose.
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With the Employer's consent, the Plan Administrator may maintain records of
Beneficiary designations for Participants before their Retirement Dates. In
that event, the written designations made by Participants shall be filed with
the Plan Administrator. If a Participant dies before his Retirement Date, the
Plan Administrator shall certify to the Insurer the Beneficiary designation on
its records for the Participant.
If, at the death of a Participant, there is no Beneficiary named or
surviving, any death benefit under the Group Contract shall be paid under the
applicable provisions of the Group Contract.
SECTION 9.08--NONALIENATION OF BENEFITS.
Benefits payable under the Plan are not subject to the claims of any
creditor of any Participant, Beneficiary, spouse or Contingent Annuitant. A
Participant, Beneficiary, spouse or Contingent Annuitant does not have any
rights to alienate, anticipate, commute, pledge, encumber or assign any of such
benefits, except in the case of a loan as provided in the LOANS TO PARTICIPANTS
SECTION of Article V. The preceding sentences shall also apply to the creation,
assignment, or recognition of a right to any benefit payable with respect to a
Participant according to a domestic relations order, unless such order is
determined by the Plan Administrator to be a qualified domestic relations order,
as defined in Code Section 414(p), or any domestic relations order entered
before January 1, 1985.
SECTION 9.09--CONSTRUCTION.
The validity of the Plan or any of its provisions is determined under and
construed according to Federal law and, to the extent permissible, according to
the laws of the state in which the Employer has its principal office. In case
any provision of this Plan is held illegal or invalid for any reason, such
determination shall not affect the remaining provisions of this Plan, and the
Plan shall be construed and enforced as if the illegal or invalid provision had
never been included.
In the event of any conflict between the provisions of the Plan and the
terms of any contract or policy issued hereunder, the provisions of the Plan
control the operation and administration of the Plan.
SECTION 9.10--LEGAL ACTIONS.
The Plan, the Plan Administrator, the Trustee and the Named Fiduciary are
the necessary parties to any action or proceeding involving the assets held with
respect to the Plan or administration of the Plan or Trust. No person employed
by the Employer, no Participant, former Participant or their Beneficiaries or
any other person having or claiming to have an interest in the Plan is entitled
to any notice of process. A final judgment entered in any such action or
proceeding shall be binding and conclusive on all persons having or claiming to
have an interest in the Plan.
SECTION 9.11--SMALL AMOUNTS.
If the Vested Account of a Participant has never exceeded $3,500, the entire
Vested Account shall be payable in a single sum as of the earliest of his
Retirement Date, the date he dies, or the date he ceases to be an Employee for
any other reason. This is a small amounts payment. If a small amount is
payable as of the date the Participant dies, the small amounts payment shall be
made to the Participant's Beneficiary (spouse if the death benefit is payable to
the spouse). If a small amount is payable while the Participant is living, the
small amounts payment shall be made to the Participant. The small amounts
payment is in full settlement of all benefits otherwise payable.
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No other small amounts payments shall be made.
SECTION 9.12--WORD USAGE.
The masculine gender, where used in this Plan, shall include the feminine
gender and the singular words as used in this Plan may include the plural,
unless the context indicates otherwise.
SECTION 9.13--TRANSFERS BETWEEN PLANS.
If an Employee previously participated in another plan of the Employer which
credited service under the elapsed time method for any purpose which under this
Plan is determined using the hours method, then the Employee's service shall be
equal to the sum of (a), (b) and (c) below:
(a) The number of whole years of service credited to him under the other
plan as of the date he became an Eligible Employee under this Plan.
(b) One year or a part of a year of service for the applicable service
period in which he became an Eligible Employee if he is credited with
the required number of Hours-of-Service. If the Employer does not have
sufficient records to determine the Employee's actual Hours-of-Service
in that part of the service period before the date he became an Eligible
Employee, the Hours-of-Service shall be determined using an equivalency.
For any month in which he would be required to be credited with one
Hour-of-Service, the Employee shall be deemed for purposes of this
section to be credited with 190 Hours-of-Service.
(c) The Employee's service determined under this Plan using the hours method
after the end of the applicable service period in which he became an
Eligible Employee.
If an Employee previously participated in another plan of the Employer which
credited service under the hours method for any purpose which under this Plan is
determined using the elapsed time method, then the Employee's service shall be
equal to the sum of (d), (e) and (f) below:
(d) The number of whole years of service credited to him under the other
plan as of the beginning of the applicable service period under that
plan in which he became an Eligible Employee under this Plan.
(e) The greater of (1) the service that would be credited to him for that
entire service period using the elapsed time method or (2) the service
credited to him under the other plan as of the date he became an
Eligible Employee under this Plan.
(f) The Employee's service determined under this Plan using the elapsed time
method after the end of the applicable service period under the other
plan in which he became an Eligible Employee.
Any modification of service contained in this Plan shall be applicable to
the service determined pursuant to this section.
If the Employee previously participated in the plan of a Controlled Group
member which credited service under a different method than is used in this
Plan, for purposes of determining eligibility and vesting the provisions above
shall apply as though the plan of the Controlled Group member were a plan of the
Employer.
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ARTICLE X
TOP-HEAVY PLAN REQUIREMENTS
SECTION 10.01--APPLICATION.
The provisions of this article shall supersede all other provisions in the
Plan to the contrary.
For the purpose of applying the Top-heavy Plan requirements of this article,
all members of the Controlled Group shall be treated as one Employer. The term
Employer as used in this article shall be deemed to include all members of the
Controlled Group unless the term as used clearly indicates only the Employer is
meant.
The accrued benefit or account of a participant which results from
deductible voluntary contributions shall not be included for any purpose under
this article.
The minimum vesting and contribution provisions of the MODIFICATION OF
VESTING REQUIREMENTS and MODIFICATION OF CONTRIBUTIONS SECTIONS of Article X
shall not apply to any Employee who is included in a group of Employees covered
by a collective bargaining agreement which the Secretary of Labor finds to be a
collective bargaining agreement between employee representatives and one or more
employers, including the Employer, if there is evidence that retirement benefits
were the subject of good faith bargaining between such representatives. 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.
SECTION 10.02--DEFINITIONS.
The following terms are defined for purposes of this article.
Aggregation Group means
(a) each of the Employer's retirement plans in which a Key Employee is a
participant during the Year containing the Determination Date or one of
the four preceding Years,
(b) each of the Employer's other retirement plans which allows the plan(s)
described in (a) above to meet the nondiscrimination requirement of Code
Section 401(a)(4) or the minimum coverage requirement of Code Section
410, and
(c) any of the Employer's other retirement plans not included in (a) or (b)
above which the Employer desires to include as part of the Aggregation
Group. Such a retirement plan shall be included only if the Aggregation
Group would continue to satisfy the requirements of Code Section
401(a)(4) and Code Section 410.
The plans in (a) and (b) above constitute the "required" Aggregation Group.
The plans in (a), (b) and (c) above constitute the "permissive" Aggregation
Group.
Compensation means, as to an Employee for any period, compensation as
defined in the CONTRIBUTION LIMITATION SECTION of Article III. For purposes
of determining who is a Key Employee, Compensation shall include, in
addition to compensation as defined in the CONTRIBUTION LIMITATION SECTION
of
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Article III, elective contributions. Elective contributions are amounts
excludable from the Employee's gross income under Code Sections 125,
402(e)(3), 402(h) or 403(b), and contributed by the Employer, at the
Employee's election, to a Code Section 401(k) arrangement, a simplified
employee pension, cafeteria plan or tax-sheltered annuity.
For purposes of Compensation as defined in this section, Compensation shall
be limited to the maximum dollar amount, as adjusted, in the same manner and
in the same time as the Compensation defined in the DEFINITION SECTION of
Article I.
Determination Date means as to this Plan for any Year, the last day of the
preceding Year. However, if there is no preceding Year, the Determination
Date is the last day of such Year.
Key Employee means any Employee or former Employee (including Beneficiaries
of deceased Employees) who at any time during the determination period was
(a) one of the Employer's officers (subject to the maximum below) whose
Compensation (as defined in this section) for the Year exceeds 50
percent of the dollar limitation under Code Section 415(b)(1)(A),
(b) one of the ten Employees who owns (or is considered to own, under Code
Section 318) more than a half percent ownership interest and one of the
largest interests in the Employer during any Year of the determination
period if such person's Compensation (as defined in this section) for
the Year exceeds the dollar limitation under Code Section 415(c)(1)(A),
(c) a five-percent owner of the Employer, or
(d) a one-percent owner of the Employer whose Compensation (as defined in
this section) for the Year is more than $150,000.
Each member of the Controlled Group shall be treated as a separate employer
for purposes of determining ownership in the Employer.
The determination period is the Year containing the Determination Date and
the four preceding Years. If the Employer has fewer than 30 Employees, no
more than three Employees shall be treated as Key Employees because they are
officers. If the Employer has between 30 and 500 Employees, no more than
ten percent of the Employer's Employees (if not an integer, increased to the
next integer) shall be treated as Key Employees because they are officers.
In no event will more than 50 Employees be treated as Key Employees because
they are officers if the Employer has 500 or more Employees. The number of
Employees for any Plan Year is the greatest number of Employees during the
determination period. Officers who are employees described in Code Section
414(q)(8) shall be excluded. If the Employer has more than the maximum
number of officers to be treated as Key Employees, the officers shall be
ranked by amount of annual Compensation (as defined in this section), and
those with the greater amount of annual Compensation during the
determination period shall be treated as Key Employees. To determine the
ten Employees owning the largest interests in the Employer, if more than one
Employee has the same ownership interest, the Employee(s) having the greater
annual Compensation shall be treated as owning the larger interest(s). The
determination of who is a Key Employee shall be made according to Code
Section 416(i)(1) and the regulations thereunder.
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Non-key Employee means a person who is a non-key employee within the meaning
of Code Section 416 and regulations thereunder.
Present Value means the present value of a participant's accrued benefit
under a defined benefit plan as of his normal retirement age (attained age
if later) or, if the plan provides non-proportional subsidies, the age at
which the benefit is most valuable. The accrued benefit of any Employee
(other than a Key Employee) shall be determined under the method which is
used for accrual purposes for all plans of the Employer or if there is no
one method which is used for accrual purposes for all plans of the Employer,
as if such benefit accrued not more rapidly than the slowest accrual rate
permitted under Code Section 411(b)(1)(C). For purposes of establishing
Present Value, any benefit shall be discounted only for 7.5% interest and
mortality according to the 1971 Group Annuity Table (Male) without the 7%
margin but with projection by Scale E from 1971 to the later of (a) 1974, or
(b) the year determined by adding the age to 1920, and wherein for females
the male age six years younger is used. If the Present Value of accrued
benefits is determined for a participant under more than one defined benefit
plan included in the Aggregation Group, all such plans shall use the same
actuarial assumptions to determine the Present Value.
Top-heavy Plan means a plan which is a top-heavy plan for any plan year
beginning after December 31, 1983. This Plan shall be a Top-heavy Plan if
(a) the Top-heavy Ratio for this Plan alone exceeds 60 percent and this Plan
is not part of any required Aggregation Group or permissive Aggregation
Group.
(b) this Plan is a part of a required Aggregation Group, but not part of a
permissive Aggregation Group, and the Top-heavy Ratio for the required
Aggregation Group exceeds 60 percent.
(c) this Plan is a part of a required Aggregation Group and part of a
permissive Aggregation Group and the Top-heavy Ratio for the permissive
Aggregation Group exceeds 60 percent.
Top-heavy Ratio means the ratio calculated below for this Plan or for the
Aggregation Group.
(a) If the Employer maintains one or more defined contribution plans
(including any simplified employee pension plan) and the Employer has
not maintained any defined benefit plan which during the five-year
period ending on the determination date has or has had accrued benefits,
the Top-heavy Ratio for this Plan alone or for the required or
permissive Aggregation Group as appropriate is a fraction, the numerator
of which is the sum of the account balances of all Key Employees as of
the determination date and the denominator of which is the sum of all
account balances of all employees as of the determination date. Both
the numerator and denominator of the Top-heavy Ratio are adjusted for
any distribution of an account balance (including those made from
terminated plan(s) of the Employer which would have been part of the
required Aggregation Group had such plan(s) not been terminated) made in
the five-year period ending on the determination date. 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 Code
Section 416 and the regulations thereunder.
(b) If the Employer maintains one or more defined contribution plans
(including any simplified employee pension plan) and the Employer
maintains or has maintained one or more defined benefit plans which
during the five-year period ending on the determination date has or has
had accrued benefits, the Top-heavy Ratio for any required or permissive
Aggregation Group as appropriate is a
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fraction, the numerator of which is the sum of the account balances
under the defined contribution plan(s) of all Key Employees and the
Present Value of accrued benefits under the defined benefit plan(s) for
all Key Employees, and the denominator of which is the sum of the
account balances under the defined contribution plan(s) for all
employees and the Present Value of accrued benefits under the defined
benefit plans for all employees. Both the numerator and denominator of
the Top-heavy Ratio are adjusted for any distribution of an account
balance or an accrued benefit (including those made from terminated
plan(s) of the Employer which would have been part of the required
Aggregation Group had such plan(s) not been terminated) made in the
five-year period ending on the determination date.
(c) For 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 12-month period
ending on the determination date, except as provided in Code Section 416
and the regulations thereunder for the first and second plan years of a
defined benefit plan. The account balances and accrued benefits of an
employee 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 during the
five-year period ending on the determination date are to be taken into
account, shall be determined according to the provisions of Code Section
416 and regulations thereunder. The account balances and accrued
benefits of an individual who has performed no service for the Employer
during the five-year period ending on the determination date shall be
excluded from the Top-heavy Ratio until the time the individual again
performs service for the Employer. 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.
Account, as used in this definition, means the value of an employee's
account under one of the Employer's retirement plans on the latest valuation
date. In the case of a money purchase plan or target benefit plan, such
value shall be adjusted to include any contributions made for or by the
employee after the valuation date and on or before such determination date
or due to be made as of such determination date but not yet forwarded to the
insurer or trustee. In the case of a profit sharing plan, such value shall
be adjusted to include any contributions made for or by the employee after
the valuation date and on or before such determination date. During the
first Year of any profit sharing plan such adjustment in value shall include
contributions made after such determination date that are allocated as of a
date in such Year. The nondeductible employee contributions which an
employee makes under a defined benefit plan of the Employer shall be treated
as if they were contributions under a separate defined contribution plan.
Valuation Date means, as to this Plan, the last day of the last calendar
month ending in a Year.
Year means the Plan Year unless another year is specified by the Employer in
a separate written resolution in accordance with regulations issued by the
Secretary of the Treasury or his delegate.
SECTION 10.03--MODIFICATION OF VESTING REQUIREMENTS.
If a Participant's Vesting Percentage determined under Article I is not at
least as great as his Vesting Percentage would be if it were determined under a
schedule permitted in Code Section 416, the following shall apply. During any
Year in which the Plan is a Top-heavy Plan, the Participant's Vesting Percentage
shall be the greater of the Vesting Percentage determined under Article I or the
schedule below.
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VESTING SERVICE NONFORFEITABLE
(whole years) PERCENTAGE
Less than 2 0
2 20
3 40
4 60
5 80
6 or more 100
The schedule above shall not apply to Participants who are not credited with
an Hour-of-Service after the Plan first becomes a Top-heavy Plan. The Vesting
Percentage determined above applies to all of the Participant's Account
resulting from Employer Contributions, including Contributions the Employer
makes before the TEFRA Compliance Date or when the Plan is not a Top-heavy Plan.
If, in a later Year, this Plan is not a Top-heavy Plan, a Participant's
Vesting Percentage shall be determined under Article I. A Participant's Vesting
Percentage determined under either Article I or the schedule above shall never
be reduced and the election procedures of the AMENDMENTS SECTION of Article IX
shall apply when changing to or from the schedule as though the automatic change
were the result of an amendment.
The part of the Participant's Vested Account resulting from the minimum
contributions required pursuant to the MODIFICATION OF CONTRIBUTIONS SECTION of
Article X shall not be forfeited because of a period of reemployment after
benefit payments have begun.
SECTION 10.04--MODIFICATION OF CONTRIBUTIONS.
During any Year in which this Plan is a Top-heavy Plan, the Employer shall
make a minimum contribution or allocation on the last day of the Year for each
person who is a Non-key Employee on that day and who either was or could have
been an Active Participant during the Year. A Non-key Employee is not required
to have a minimum number of hours-of-service or minimum amount of Compensation,
or to have had any Elective Deferral Contributions made for him in order to be
entitled to this minimum. The minimum contribution or allocation for such
person shall be equal to the lesser of (a) or (b) below:
(a) Three percent of such person's Compensation (as defined in this
article).
(b) The "highest percentage" of Compensation (as defined in this article)
for such Year at which the Employer's contributions are made for or
allocated to any Key Employee. The highest percentage shall be
determined by dividing the Employer Contributions made for or allocated
to each Key Employee during such Year by the amount of his Compensation
(as defined in this article), which is not more than the maximum set out
above, and selecting the greatest quotient (expressed as a percentage).
To determine the highest percentage, all of the Employer's defined
contribution plans within the Aggregation Group shall be treated as one
plan. The provisions of this paragraph shall not apply if this Plan and
a defined benefit plan of the Employer are required to be included in
the Aggregation Group and this Plan enables the defined benefit plan to
meet the requirements of Code Section 401(a)(4) or Code Section 410.
If the Employer's contributions and allocations otherwise required under the
defined contribution plan(s) are at least equal to the minimum above, no
additional contribution or reallocation shall be required. If the
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Employer's contributions and allocations are less than the minimum above and
Employer Contributions under this Plan are allocated to Participants, any
Employer Contributions (other than those which are allocated on the basis of the
amount made for such person) shall be reallocated to provide the minimum. The
remaining Contributions shall be allocated as provided in the preceding articles
of this Plan taking into account any amount which was reallocated to provide the
minimum. If the Employer's total contributions and allocations are less than the
minimum above after any reallocation provided above, the Employer shall
contribute the difference for the Year.
The minimum contribution or allocation applies to all of the Employer's
defined contribution plans in the aggregate which are Top-heavy Plans. If an
additional contribution or allocation is required to meet the minimum above, it
shall be provided in this Plan.
A minimum allocation under a profit sharing plan shall be made without
regard to whether or not the Employer has profits.
If a person who is otherwise entitled to a minimum contribution or
allocation above is also covered under a defined benefit plan of the Employer's
which is a Top-heavy Plan during that same Year, the minimum benefits for him
shall not be duplicated. The defined benefit plan shall provide an annual
benefit for him on, or adjusted to, a straight life basis of the lesser of (c)
two percent of his average pay multiplied by his years of service or (d) twenty
percent of his average pay. Average pay and years of service shall have the
meaning set forth in such defined benefit plan for this purpose.
For purposes of this section, any employer contribution made according to a
salary reduction or similar arrangement shall not apply before the first Yearly
Date in 1985. On and after the first Yearly Date in 1989, any such employer
contributions and employer contributions which are matching contributions, as
defined in Code Section 401(m), shall not apply in determining if the minimum
contribution requirement has been met, but shall apply in determining the
minimum contribution required. Forfeitures credited to a Participant's Account
are treated as employer contributions.
The requirements of this section shall be met without regard to
contributions under Chapter 2 of the Code (relating to tax on self-employment),
Chapter 21 of the Code (relating to Federal Insurance Contributions Act), Title
II of the Social Security Act or any other Federal or state law.
SECTION 10.05--MODIFICATION OF CONTRIBUTION LIMITATION.
If the provisions of subsection (e) of the CONTRIBUTION LIMITATION SECTION
of Article III are applicable for any Limitation Year during which this Plan is
a Top-heavy Plan, the benefit limitations shall be modified. The definitions of
Defined Benefit Plan Fraction and Defined Contribution Plan Fraction in the
CONTRIBUTION LIMITATION SECTION of Article III shall be modified by substituting
"1.0" in lieu of "1.25." The optional denominator for determining the Defined
Contribution Plan Fraction shall be modified by substituting "$41,500" in lieu
of "$51,875." In addition, an adjustment shall be made to the numerator of the
Defined Contribution Plan Fraction. The adjustment is a reduction of that
numerator similar to the modification of the Defined Contribution Plan Fraction
described in the CONTRIBUTION LIMITATION SECTION of Article III, and shall be
made with respect to the last Plan Year beginning before January 1, 1984.
The modifications in the paragraph above shall not apply with respect to a
Participant so long as employer contributions, forfeitures or nondeductible
employee contributions are not credited to his account under this or any of the
Employer's other defined contribution plans and benefits do not accrue for such
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Participant under the Employer's defined benefit plan(s), until the sum of his
Defined Contribution and Defined Benefit Plan Fractions is less than 1.0.
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By executing this Plan, the Primary Employer acknowledges having
counseled to the extent necessary with selected legal and tax advisors regarding
the Plan's legal and tax implications.
Executed this 15th day of April, 1998.
INTEGRATED ORTHOPAEDICS, INC.
By: /s/ RONALD E. PIERCE
-------------------------------------
President
-------------------------------------
Title
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The Adopting Employer must agree to participate in or adopt the Plan
in writing. If this has not already been done, it may be done by signing below.
IOI MANAGEMENT SERVICES OF CONNECTICUT, INC.
By: /s/ RONALD E. PIERCE
------------------------------------------
President
------------------------------------------
Title
April 15, 1998
------------------------------------------
Date
IOI MANAGEMENT SERVICES OF LOUISIANA, INC.
By: /s/ RONALD E. PIERCE
------------------------------------------
President
------------------------------------------
Title
April 15, 1998
------------------------------------------
Date
IOI MANAGEMENT SERVICES OF PENNSYLVANIA, INC.
By: /s/ RONALD E. PIERCE
------------------------------------------
President
------------------------------------------
Title
April 15, 1998
------------------------------------------
Date
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<PAGE>
IOI MANAGEMENT SERVICES OF HOUSTON, INC.
By: /s/ RONALD E. PIERCE
--------------------------------------
President
--------------------------------------
Title
April 15, 1998
--------------------------------------
Date
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EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 of our report dated March 24, 1998 appearing on page 24 of
Integrated Orthopaedics, Inc.'s Annual Report on Form 10-KSB for the year ended
December 31, 1997.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Houston, Texas
April 13, 1998
