<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 28, 1998
REGISTRATION NO. 333-___
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------
SSE TELECOM, INC.
(Exact name of registrant as specified in its charter)
-------------
<TABLE>
<CAPTION>
<S> <C>
DELAWARE 52-1466297
(State of Incorporation) (I.R.S. Employer Identification No.)
</TABLE>
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47823 WESTINGHOUSE DRIVE
FREMONT, CA 94539
(510) 657-7552
(Address and telephone number of principal executive offices)
SSE TELECOM, INC. 401(K) PROFIT SHARING PLAN
(Full title of the plan)
-------------
LEON F. BLACHOWICZ
47823 WESTINGHOUSE DRIVE
FREMONT, CA 94539
(510) 657-7552
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
KENNETH L. GUERNSEY
COOLEY GODWARD LLP
ONE MARITIME PLAZA, 20TH FLOOR
SAN FRANCISCO, CA 94111-3580
(415) 693-2000
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===================================================================================================================================
PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM OFFERING AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED PRICE PER SHARE(3) PRICE(3) REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock ($0.01 par value) 150,000(1) $1.66 $249,000 $69.22
- -----------------------------------------------------------------------------------------------------------------------------------
Interests in the 401(k) Profit Indeterminate (2) N/A N/A N/A
Sharing Plan
===================================================================================================================================
</TABLE>
(1) The shares registered pursuant to this Registration Statement are
purchased on the open market. Accordingly, the number of shares that is
being registered is an estimate. This Registration Statement also
includes any additional shares of the Registrant's Common Stock which
may subsequently be issued to prevent dilution resulting from stock
splits, stock dividends or similar transactions.
(2) Pursuant to Rule 416(c) under the Securities Act, this Registration
Statement covers an indeterminate amount of interests to be offered or
sold pursuant to the employee benefit plan described herein.
(3) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(h) promulgated under the
Securities Act of 1933, as amended (the "Securities Act"). The offering
price per share and aggregate offering price are based upon the average
of the high and low prices of the Common Stock of SSE Telecom, Inc.
(the "Registrant") as reported on the Nasdaq Stock Market for
December 22, 1998. No fee is paid for the interests in the employee
benefit plan described herein pursuant to Rule 457(h).
<PAGE> 2
PART II
Item 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Registrant with the Securities and
Exchange Commission (the "Commission") are incorporated by reference into this
Registration Statement:
(A) The Registrant's Annual Report on Form 10-K for the fiscal year
ended September 26, 1998, (File No. 0-16473) filed pursuant to Section 13(a) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including
all materials incorporated by reference therein;
(B) The description of the Registrant's Common Stock which is contained
in the Registration Statement on Form 8-A, filed July 15, 1991, under the
Exchange Act, including any amendment or report filed for the purpose of
updating such description;
All reports and other documents subsequently filed by the Registrant
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment 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 herein and to be a part
of this Registration Statement from the date of the filing of such reports and
documents.
1.
<PAGE> 3
Item 4. DESCRIPTION OF SECURITIES
The Common Stock to be offered is registered under Section 12 of the
Exchange Act.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As permitted by sections 102 and 145 of the Delaware General
Corporation Law, the Registrant's certificate of incorporation eliminates a
director's personal liability for monetary damages to the Registrant and its
stockholders arising from a breach or alleged breach of a director's fiduciary
duty except for liability under Section 174 of the Delaware General Corporation
Law or liability for any breach of the director's duty of loyalty to the
Registrant or its stockholders, for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, or for any
transaction from which the director derived an improper personal benefit. The
effect of this provision in the certificate of incorporation is to eliminate the
rights of the Registrant and its stockholders (through stockholders' derivative
suits on behalf of the Registrant) to recover monetary damages against a
director for breach of fiduciary duty as a director (including breaches
resulting from negligent or grossly negligent behavior) except in the situations
described above.
The Registrant's certificate of incorporation and bylaws provide for
indemnification of its directors, officers and agents (an "Indemnitee"). Under
the certificate of incorporation and bylaws, the Registrant must indemnify an
Indemnitee to the fullest extent permitted by Delaware law for losses and
expenses incurred in connection with actions in which the Indemnitee is involved
by reason of having been a director or officer of the Registrant. In certain
circumstances, the Registrant is also obligated to advance expenses an
Indemnitee may incur in connection with such actions before any resolution of
the action, and the Indemnitee may sue to enforce his or her right to
indemnification or advancement of expenses.
There is no litigation pending, and neither the Registrant nor any of
its directors know of any threatened litigation, which might result in a claim
for indemnification by any director or officer.
Item 7. EXEMPTION FROM REGISTRATION CLAIM
Not Applicable.
2.
<PAGE> 4
Item 8. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
NUMBER
<S> <C>
4.1 Omitted -- Inapplicable
5.1 Omitted as inapplicable pursuant to Item 8 of Form S-8 which
provides that a legal opinion as to the legality of the securities
being registered is required only with respect to original issuance
securities. The common stock being registered hereby will be
purchased in the open market only.
23.1 Consent of Deloitte & Touche LLP, Independent Auditors.
23.2 Consent of Ernst & Young LLP, Independent Auditors.
24.1 Power of Attorney is contained on the signature pages.
99.1 The Registrant's 401(k) Profit Sharing Plan.
99.2 Adoption Agreement for the Registrant's 401(k) Profit Sharing Plan.
99.3 Trust Agreement Pursuant to the Union Bank of California Master
Defined Contribution Plan.
</TABLE>
In lieu of an opinion of counsel concerning compliance with the requirements of
ERISA, or an Internal Revenue Service ("IRS") determination letter that the Plan
is qualified under Section 401 of the Code, the registrant hereby undertakes to
cause the Plan to be submitted and any amendments thereto to the IRS in order to
qualify the Plan and the registrant undertakes to cause all changes to be made
which are required by the IRS in order to qualify the Plan.
Item 9. UNDERTAKINGS
(A) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(I) To include any prospectus required by section 10(a)(3) of the
Securities Act;
(II) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase
3.
<PAGE> 5
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective Registration Statement;
(III) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
provided, however, that paragraphs (A)(1)(I) and (A)(1)(II) do not apply if the
registration statement is on Form S-3, Form S-8, or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act 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 therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(B) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, 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.
(C) 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 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.
4.
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Fremont, State of California, on December 28, 1998.
SSE TELECOM, INC.
By: /s/ Leon F. Blachowicz
---------------------------------------
Leon F. Blachowicz
President, Chief Executive Officer, and
Director
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 Fremont, State of
California, on December 28, 1998.
401(K) PROFIT SHARING PLAN
By: /s/ Claire Mendonca
---------------------------------------
Its: Administrator
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Leon F. Blachowicz and Jim Haff and each
or any one 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
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his substitutes or substitute, may lawfully do or cause to be done by virtue
hereof.
5.
<PAGE> 7
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.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Leon F. Blachowicz Chief Executive Officer December 28, 1998
- --------------------------------------- (Principal Executive Officer)
Leon F. Blachowicz
/s/ James J. Commendatore Chief Financial Officer December 28, 1998
- --------------------------------------- (Principal Financial Officer)
James J. Commendatore
/s/ Jim Haff Controller December 28, 1998
- ---------------------------------------
Jim Haff
/s/ Jerome deVitry Director December 28, 1998
- ---------------------------------------
Jerome deVitry
/s/ Charlie Ergen Director December 28, 1998
- ---------------------------------------
Charlie Ergen
/s/ Dan Moore Director December 28, 1998
- ---------------------------------------
Dan Moore
/s/ Jay Pisula Director December 28, 1998
- ---------------------------------------
Jay Pisula
/s/ Larry Roberts Director December 28, 1998
- ---------------------------------------
Larry Roberts
/s/ Erik van der Kaay Director December 28, 1998
- ---------------------------------------
Erik van der Kaay
/s/ Olin Wethington Director December 28, 1998
---------------------------------------
Olin Wethington
</TABLE>
6.
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
NUMBER
<S> <C>
4.1 Omitted -- Inapplicable
5.1 Omitted as inapplicable pursuant to Item 8 of Form S-8 which
provides that a legal opinion as to the legality of the securities
being registered is required only with respect to original issuance
securities. The common stock being registered hereby will be
purchased in the open market only.
23.1 Consent of Deloitte & Touche LLP, Independent Auditors.
23.2 Consent of Ernst & Young LLP, Independent Auditors.
24.1 Power of Attorney is contained on the signature pages.
99.1 The Registrant's 401(k) Profit Sharing Plan.
99.2 Adoption Agreement for the Registrant's 401(k) Profit Sharing Plan.
99.3 Trust Agreement Pursuant to the Union Bank of California Master
Defined Contribution Plan
</TABLE>
<PAGE> 1
Exhibit 23.1
CONSENT OF DELOITTE & TOUCHE LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration Statement of
SSE Telecom,, Inc. on Form S-8 of our report dated November 25, 1998,
incorporated by reference in the Annual Report on Form 10-K of SSE Telecom,,
Inc. for the year ended September 26, 1998 which is part of this Registration
Statement.
/s/ Deloitte & Touche LLP
San Jose, California
December 28, 1998
<PAGE> 1
Exhibit 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement of
SSE Telecom, Inc. on Form S-8 of our report dated December 4, 1997, with
respect to the consolidated financial statements and schedule of SSE Telecom,
Inc. included in its Annual Report (Form 10-K) for the year ended September 26,
1998, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
---------------------------
San Jose, California
December 28, 1998
<PAGE> 1
EXHIBIT 99.1
UNION BANK OF CALIFORNIA SelectBENEFIT
DEFINED CONTRIBUTION PLAN AND TRUST
<PAGE> 2
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
TOP HEAVY PROVISIONS AND ADMINISTRATION
<TABLE>
<S> <C> <C>
2.1 TOP HEAVY PLAN REQUIREMENTS....................................... 17
2.2 DETERMINATION OF TOP HEAVY STATUS................................. 17
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER....................... 21
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY........................... 21
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES..................... 22
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR............................ 22
2.7 RECORDS AND REPORTS............................................... 23
2.8 APPOINTMENT OF ADVISERS........................................... 23
2.9 INFORMATION FROM EMPLOYER......................................... 23
2.10 PAYMENT OF EXPENSES............................................... 24
2.11 MAJORITY ACTIONS.................................................. 24
2.12 CLAIMS PROCEDURE.................................................. 24
2.13 CLAIMS REVIEW PROCEDURE........................................... 24
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY......................................... 25
3.2 EFFECTIVE DATE OF PARTICIPATION................................... 25
3.3 DETERMINATION OF ELIGIBILITY...................................... 25
3.4 TERMINATION OF ELIGIBILITY........................................ 26
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
3.5 OMISSION OF ELIGIBLE EMPLOYEE......................................26
3.6 INCLUSION OF INELIGIBLE EMPLOYEE...................................26
3.7 ELECTION NOT TO PARTICIPATE........................................26
3.8 CONTROL OF ENTITIES BY OWNER-EMPLOYEE..............................26
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION....................27
4.2 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION.........................28
4.3 ALLOCATION OF CONTRIBUTIONS AND FORFEITURES........................28
4.4 MAXIMUM ANNUAL ADDITIONS...........................................35
4.5 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS..........................42
4.6 TRANSFERS FROM QUALIFIED PLANS.....................................42
4.7 VOLUNTARY CONTRIBUTIONS............................................43
4.8 PARTICIPANT DIRECTED INVESTMENTS...................................44
4.9 QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS.........................44
4.10 ACTUAL CONTRIBUTION PERCENTAGE TESTS...............................45
4.11 INTEGRATION IN MORE THAN ONE PLAN..................................45
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND........................................45
5.2 METHOD OF VALUATION................................................46
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT..........................46
</TABLE>
<PAGE> 4
<TABLE>
<S> <C> <C>
6.2 DETERMINATION OF BENEFITS UPON DEATH...............................46
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY...................48
6.4 DETERMINATION OF BENEFITS UPON TERMINATION.........................48
6.5 DISTRIBUTION OF BENEFITS...........................................51
6.6 DISTRIBUTION OF BENEFITS UPON DEATH................................56
6.7 TIME OF SEGREGATION OR DISTRIBUTION................................60
6.8 DISTRIBUTION FOR MINOR BENEFICIARY.................................61
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN.....................61
6.10 PRE-RETIREMENT DISTRIBUTION........................................61
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP..................................61
6.12 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS..........................62
6.13 SPECIAL RULE FOR NON-ANNUITY PLANS.................................62
6.14 LIFE INSURANCE.....................................................63
6.15 DIRECT ROLLOVERS...................................................64
ARTICLE VII
PLAN LOANS
7.1 LOANS TO PARTICIPANTS..............................................65
ARTICLE VIII
AMENDMENT, TERMINATION, AND MERGERS
8.1 AMENDMENT..........................................................67
8.2 TERMINATION........................................................68
8.3 MERGER OR CONSOLIDATION............................................69
ARTICLE IX
MISCELLANEOUS
</TABLE>
<PAGE> 5
<TABLE>
<S> <C> <C>
9.1 EMPLOYER ADOPTIONS.................................................69
9.2 PARTICIPANT'S RIGHTS...............................................69
9.3 ALIENATION.........................................................70
9.4 CONSTRUCTION OF PLAN...............................................70
9.5 GENDER AND NUMBER..................................................70
9.6 LEGAL ACTION.......................................................71
9.7 PROHIBITION AGAINST DIVERSION OF FUNDS.............................71
9.8 BONDING............................................................71
9.9 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE.........................72
9.10 INSURER'S PROTECTIVE CLAUSE........................................72
9.11 RECEIPT AND RELEASE FOR PAYMENTS...................................72
9.12 ACTION BY THE EMPLOYER.............................................72
9.13 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY.................72
9.14 HEADINGS...........................................................73
9.15 APPROVAL BY INTERNAL REVENUE SERVICE...............................73
9.16 UNIFORMITY.........................................................73
9.17 PAYMENT OF BENEFITS................................................73
9.18 TRANSFER OF INTEREST...............................................74
ARTICLE X
PARTICIPATING EMPLOYERS
10.1 ELECTION TO BECOME A PARTICIPATING EMPLOYER........................74
10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS............................74
10.3 DESIGNATION OF AGENT...............................................75
</TABLE>
<PAGE> 6
<TABLE>
<S> <C> <C>
10.4 EMPLOYEE TRANSFERS.................................................75
10.5 PARTICIPATING EMPLOYER'S CONTRIBUTION AND FORFEITURES..............75
10.6 AMENDMENT..........................................................75
10.7 DISCONTINUANCE OF PARTICIPATION....................................76
10.8 ADMINISTRATOR'S AUTHORITY..........................................76
10.9 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE..................76
ARTICLE XI
CASH OR DEFERRED PROVISIONS
11.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION....................77
11.2 PARTICIPANT'S SALARY REDUCTION ELECTION............................78
11.3 ALLOCATION OF CONTRIBUTIONS AND FORFEITURES........................82
11.4 ACTUAL DEFERRAL PERCENTAGE TESTS...................................84
11.5 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS.....................86
11.6 ACTUAL CONTRIBUTION PERCENTAGE TESTS...............................90
11.7 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS.................93
11.8 ADVANCE DISTRIBUTION FOR HARDSHIP..................................96
</TABLE>
<PAGE> 7
ARTICLE I
DEFINITIONS
As used in this Plan, the following words and phrases shall have the
meanings set forth herein unless a different meaning is clearly required by the
context:
1.1 "Act" means the Employee Retirement Income Security Act of 1974, as it
may be amended from time to time.
1.2 "Administrator" means the person(s) or entity designated by the
Employer pursuant to Section 2.4 to administer the Plan on behalf of the
Employer.
1.3 "Adoption Agreement" means the separate Agreement which is executed by
the Employer and accepted by the Sponsor and the Trustee which sets forth the
elective provisions of this Plan and Trust as specified by the Employer.
1.4 "Affiliated Employer" means the Employer and any corporation which is
a member of a controlled group of corporations (as defined in Code Section
414(b)) which includes the Employer; any trade or business (whether or not
incorporated) which is under common control (as defined in Code Section 414(c))
with the Employer; any organization (whether or not incorporated) which is a
member of an affiliated service group (as defined in Code Section 414(m)) which
includes the Employer; and any other entity required to be aggregated with the
Employer pursuant to Regulations under Code Section 414(o).
1.5 "Aggregate Account" means with respect to each Participant, the value
of all accounts maintained on behalf of a Participant, whether attributable to
Employer or Employee contributions, subject to the provisions of Section 2.2.
1.6 "Anniversary Date" means the anniversary date specified in C3 of the
Adoption Agreement.
1.7 "Beneficiary" means the person to whom a share of a deceased
Participant's interest in the Plan is payable, subject to the restrictions of
Section 6.2 and 6.6.
1.8 "Code" means the Internal Revenue Code of 1986, as amended or replaced
from time to time.
1.9 "Compensation" with respect to any Participant means one of the
following as elected in the Adoption Agreement. However, Compensation for any
Self-Employed Individual shall be equal to his Earned Income.
a) Information required to be reported under Section 6041, 6051
and 6052 (Wages, Tips and Other Compensation Box on Form
W-2). Compensation
1
<PAGE> 8
is defined as wages as defined in Section 3401(a) and all
other payments of compensation to an Employee by the
Employer (in the course of the Employer's trade or business)
for which the Employer is required to furnish the Employee a
written statement under Code Sections 6041(d) and
6051(a)(3). Compensation must be determined without regard
to any rules under Code Section 3401(a) that limit the
remuneration included in wages based on the nature or
location of the employment or the services performed (such
as the exception for agricultural labor in Section
3401(a)(2)).
b) Section 3401(a) wages. Compensation is defined as wages
within the meaning of Code Section 3401(a) for the purposes
of income tax withholding at the source but determined
without regard to any rules that limit the remuneration
included in wages based on the nature or location of the
employment or the services performed (such as the exception
for agricultural labor in Code Section 3401(a)(2)).
c) 415 safe-harbor compensation. Compensation is defined as
wages, salaries, and fees for professional services and
other amounts received (without regard to whether or not an
amount is paid in cash) for personal services actually
rendered in the course of employment with the Employer
maintaining the plan to the extent that the amounts are
includible in gross income (including, but not limited to,
commissions paid salesmen, compensation for services on the
basis of a percentage of profits, commissions on insurance
premiums, tips, bonuses, allowances under a nonaccountable
plan (as described in 1.62-2(c)), and excluding the
following:
i. Employer contributions to a plan of deferred
compensation which are not includible in the Employee's
gross income for the taxable year in which contributed,
or Employer contributions under a simplified employee
pension plan to the extent such contributions are
deductible by the Employee, or any distributions from a
plan of deferred compensation;
ii. Amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property)
held by the Employee either becomes freely transferable
or is no longer subject to a substantial risk of
forfeiture;
iii. Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
2
<PAGE> 9
iv) Other amounts which received special tax benefits, or
contributions made by the Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity contract
described in Code Section 403(b) (whether or not the
contributions are actually excludable from the gross income of
the Employee).
If, in connection with the adoption of this Plan or of any amendment to the
Plan, the definition of Compensation is modified, then, for Plan Years prior to
the Plan Year which includes the adoption date of such amendment, Compensation
means compensation determined pursuant to the Plan then in effect.
In addition, if specified in the Adoption Agreement, Compensation for all
Plan purposes shall also include compensation which is not currently includible
in the Participant's gross income by reason of the application of Code Sections
125. 402(e)(3), 402(h)(1)(B), or 403(b).
Compensation in excess of $200,000 shall be disregarded. Such amount shall
be adjusted at the same time and in such manner as permitted under Code Section
415(d).
Notwithstanding the above, any other provision of the Plan to the contrary,
for Plan Years beginning on or after January 1, 1994, the annual Compensation of
each Employee taken into account under the Plan shall not exceed the OBRA '93
annual Compensation limit. The OBRA '93 annual Compensation limit is $150,000,
as adjusted by the Commissioner for increases in the cost of living in
accordance with Code Section 401(a)(17)(B), of the Internal Revenue Code. The
cost of living adjustment in effect for a calendar year applies to any period,
not exceeding 12 months, over which Compensation is determined (determination
period) beginning in such calendar year. If a determination period consists of
fewer than 12 months, the OBRA '93 annual Compensation limit will be multiplied
by a fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any reference in this
Plan to the limitation under Code Section 401(a)(17) shall mean the OBRA '93
annual Compensation limit set forth in this Section.
In applying this limitation, the family group of a Highly Compensated
Participant who is subject to the Family Member aggregation rules of Code
Section 414(q)(6) because such Participant is either a "five percent owner" of
the Employer or one of the ten (10) Highly Compensated Employees paid the
greatest "415 Compensation" during the year, shall be treated as a single
Participant, except that for this purpose Family Members shall include only the
affected Participant's spouse and any lineal descendants who have not attained
age nineteen (19) before the close of the year. If, as a result of the
application of such rules, the adjusted limitation is exceeded, then (except for
purposes of determining the portion of Compensation up to the integration level
if this plan is integrated), the limitation shall be prorated among the affected
individuals in proportion to each such individual's Compensation as determined
under this Section prior to the application of this limitation.
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<PAGE> 10
For Plan Years beginning prior to January 1, 1989, the $200,000 limit
(without regard to Family Member aggregation) shall apply only for Top Heavy
Plan Years and shall not be adjusted.
1.10 "Contract" or "Policy" means any life insurance policy, retirement
income policy, or annuity contract (group or individual) issued by the Insurer.
In the event of any conflict between the terms of this Plan and the terms of any
insurance contract purchased hereunder, the Plan provisions shall control.
1.11 "Deferred Compensation" means, with respect to any Participant, that
portion of the Participant's total Compensation which has been contributed to
the Plan in accordance with the Participant's deferral election pursuant to
Section 11.2.
1.12 "Early Retirement Date" means the date specified in the Adoption
Agreement on which a Participant or Former Participant has satisfied the age and
service requirements specified in the Adoption Agreement (Early Retirement Age).
A Participant shall become fully Vested upon satisfying this requirement if
still employed at his Early Retirement Age.
A Former Participant who terminates employment after satisfying the service
requirement for Early Retirement and who thereafter reaches the age requirement
contained herein shall be entitled to receive his benefits under this Plan.
1.13 "Earned Income" means with respect to a Self-Employed Individual, the
net earnings from self-employment in the trade or business with respect to which
the Plan is established, for which the personal services of the individual are
a material income-producing factor. Net earnings will be determined without
regard to items not included in gross income and the deductions allocable to
such items. Net earnings are reduced by contributions by the Employer to a
qualified Plan to the extent deductible under Code Section 404. In addition, for
Plan Years beginning after December 31, 1989, net earnings shall be determined
with regard to the deduction allowed to the Employer by Code Section 164(f).
1.14 "Elective Contribution" means the Employer's contributions to the Plan
that are made pursuant to the Participant's deferral election pursuant to
Section 11.2, excluding any such amounts distributed as "excess annual
additions" pursuant to Section 4.4. In addition, if selected in E3 of the
Adoption Agreement, the Employer's matching contribution shall or shall not be
considered an Elective Contribution for purposes of the Plan, as provided in
Section 11.1(b). Elective Contributions shall be subject to the requirements of
Section 11.2(b) and 11.2(c) and shall further be required to satisfy the
discrimination requirements of Regulation 1.401(k)-1(b)(3), the provisions of
which are specifically incorporated herein by reference.
1.15 "Eligible Employee" means any Employee specified in D1 of the Adoption
Agreement.
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<PAGE> 11
1.16 "Employer" means any person who is employed by the Employer, but
excludes any person who is employed as an independent contractor. The term
Employee shall also include Leased Employees as provided in Code Section 414(n)
or (o).
Except as provided in the Non-Standardized Adoption Agreement, all
Employees of all entities which are an Affiliated Employer will be treated as
employed by a single employer.
1.17 "Employer" means the entity specified in the Adoption Agreement, any
Participating Employer (as defined in Section 10.1) which shall adopt this Plan,
any successor which shall maintain this Plan and any predecessor which has
maintained this Plan.
1.18 "Excess Compensation" means, with respect to a Plan that is integrated
with Social Security, a Participant's Compensation which is in excess of the
amount set forth in the Adoption Agreement.
1.19 "Excess Contribution" means, with respect to a Plan Year, the excess
of Elective Contributions and Qualified Non-Elective Contributions made on
behalf of Highly Compensated Participants for the Plan Year over the maximum
amount of such contributions permitted under Section 11.4(a).
1.12 "Excess Deferred Compensation" means, with respect to any taxable year
of a Participant, the excess of the aggregate amount of such Participant's
Deferred Compensation and the elective deferrals pursuant to Section 11.2(f)
actually made on behalf of such Participant for such taxable year, over the
dollar limitation provided for in Code Section 402(g), which is incorporated
herein by reference. Excess Deferred Compensation shall be treated as an
"annual addition" pursuant to Section 4.4 when contributed to the Plan unless
distributed to the affected Participant not later than the first April 15th
following the close of the Participant's taxable year.
1.21 "Family Member" means, with respect to an affected Participant, such
Participant's spouse, and such Participant's lineal descendants and ascendants
and their spouses, all as described in Code Section 414(q)(6)(B).
1.22 "Fiduciary" means any person who (a) exercises any discretionary
authority or discretionary control respecting management of the Plan or
exercises any authority or control respecting management or disposition of its
assets, (b) renders investment advice for a fee or other compensation, direct
or indirect, with respect to any monies or other property of the Plan or has
any authority or responsibility to do so, or (c) has any discretionary
authority or discretionary responsibility in the administration of the Plan,
including, but not limited to, the Trustee, the Employer and its representative
body, and the Administrator.
1.23 "Fiscal Year" means the Employer's accounting year as specified in
the Adoption Agreement.
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<PAGE> 12
1.24 "Forfeiture" means that portion of a Participant's Account that is not
Vested and occurs on the earlier of:
(a) the distribution of the entire Vested portion of a Participant's
Account, or
(b) the last day of the Plan Year in which the Participant incurs
five (5) consecutive 1-Year Breaks in Service.
Furthermore, for purposes of paragraph (a) above, in the case of a
Terminated Participant whose Vested benefit is zero, such Terminated
Participant shall be deemed to have received a distribution of his Vested
benefit upon his termination of employment. In addition, the term Forfeiture
shall also include amounts deemed to be Forfeitures pursuant to any other
provisions of this Plan.
1.25 "Former Participant" means a person who has been a Participant, but
who has ceased to be a Participant for any reason.
1.26 "414(s) Compensation" with respect to any Employee means his
Compensation as defined in Section 1.9. However, for purposes of this
Section, Compensation shall be Compensation paid and, if selected in the
Adoption Agreement, shall only be recognized as of an Employee's effective date
of participation. If, in connection with the adoption of this Plan or of any
amendment to this Plan, the definition of "414(s) Compensation" is modified,
then, for Plan Years prior to the Plan Year which includes the adoption of such
an amendment, "414(s) Compensation" means compensation determined pursuant to
the Plan then in effect.
In addition, if specified in the Adoption Agreement, "414(s) Compensation"
shall also include compensation which is not currently includible in the
Participant's gross income by reason of the application of Code Sections 125,
402(e)(3), 402(h)(1)(B), or 403(b), plus Elective Contributions attributable
to Deferred Compensation recharacterized as voluntary Employee contributions
pursuant to 11.5(a).
1.27 "415 Compensation" means compensation as defined in Section
4.4(f)(2).
1.28 "Highly Compensated Employee" means an Employee described in Code
Section 414(q) and the Regulations thereunder and generally means an Employee
who performed services for the Employer during the "determination year" and is
in one or more of the following groups:
(a) Employees who at any time during the "determination year" or
"look-back year" were "five percent owners" as defined in Section 1.37(c).
(b) Employees who received "415 Compensation" during the "look-back
year" from the Employer in excess of $75,000.
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<PAGE> 13
(c) Employees who received "415 Compensation" during the look-back
year from the Employer in excess of $50,000 and were in the Top Paid Group
of Employees for the Plan Year.
(d) Employees who during the "look-back year" were officers of the
Employer (as that term is defined within the meaning of the Regulations
under Code Section 416) and received "415 Compensation" during the
"look-back year" from the Employer greater than 50 percent of the limit in
effect under Code Section 415(b)(1)(A) for any such Plan Year. The number
of officers shall be limited to the lesser of (i) 50 employees; or (ii) the
greater of 3 employees or 10 percent of all employees. If the Employer does
not have at least one officer whose annual "415 Compensation" is in excess
of 50 percent of the Code Section 415(b)(1)(A) limit, then the highest paid
officer of the Employer will be treated as a Highly Compensated Employee.
(e) Employees who are in the group consisting of the 100 Employees
paid the greatest "415 Compensation" during the "determination year" and
are also described in (b), (c) or (d) above when these paragraphs are
modified to substitute "determination year" for "look-back year".
The "determination year" shall be the Plan Year for which testing is being
performed, and the "look-back year" shall be the immediately preceding
twelve-month period. However, if the Plan Year is a calendar year, or if another
Plan of the Employer so provides, then the "look-back year" shall be the
calendar year ending with or within the Plan Year for which testing is being
performed, and the "determination year" (if applicable) shall be the period of
time, if any, which extends beyond the "look-back year" and ends on the last
day of the Plan Year for which testing is being performed (the "lag period").
With respect to this election, it shall be applied on a uniform and consistent
basis to all plans, entities, and arrangements of the Employer.
For purposes of this Section, the determination of "415 Compensation"
shall be made by including amounts that would otherwise be excluded from a
Participant's gross income by reason of the application of Code Sections 125.
402(e)(3), 402(h)(1)(B) and, in the case of Employer contributions made
pursuant to a salary reduction agreement, Code Section 403(b). Additionally,
the dollar threshold amounts specified in (b) and (c) above shall be adjusted
at such time and in such manner as is provided in Regulations. In the case of
such an adjustment, the dollar limits which shall be applied are those for the
calendar year in which the "determination year" or "look back year" begins.
In determining who is a Highly Compensated Employee, Employees who are
non-resident aliens and who received no earned income (within the meaning of
Code Section 911(d)) from the Employer constituting United States source income
within the meaning of Code Section 861(a)(3) shall not be treated as Employees.
Additionally, all Affiliated Employers shall be taken into account as a single
employer and Leased Employees within the meaning of Code Sections 414(n)(2) and
414(o)(2) shall be considered Employees unless such Leased Employees are
covered by a plan described in Code Section 414(n)(5) and are not covered in
any qualified plan
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<PAGE> 14
maintained by the Employer. The exclusion of Leased Employees for this purpose
shall be applied on a uniform and consistent basis for all of the Employer's
retirement plans. In addition, Highly Compensated Former Employees shall be
treated as Highly Compensated Employees without regard to whether they performed
services during the "determination year".
1.29 "Highly Compensated Former Employee" means a former Employee who had a
separation year prior to the "determination year" and was a Highly Compensated
Employee in the year of separation from service or in any "determination year"
after attaining age 55. Notwithstanding the foregoing, an Employee who separated
from service prior to 1987 will be treated as a Highly Compensated Former
Employee only if during the separation year (or year preceding the separation
year) or any year after the Employee attains age 55 (or the last year ending
before the Employee's 55th birthday), the Employee either received "415
Compensation" in excess of $50,000 or was a "five percent owner". For purposes
of this Section, "determination year", "415 Compensation" and "five percent
owner" shall be determined in accordance with Section 1.29. Highly Compensated
Former Employees shall be treated as Highly Compensated Employees. The method
set forth in this Section for determining who is a "Highly Compensated Former
Employee" shall be applied on a uniform and consistent basis for all purposes
for which the Code Section 414(q) definition is applicable.
1.30 "Highly Compensated Participant" means any Highly Compensated Employee
who is eligible to participate in the Plan.
1.31 "Hour of Service" means (1) each hour for which an Employee is
directly or indirectly compensated or entitled to compensation by the Employer
for the performance of duties during the applicable computation period; (2)
each hour for which an Employee is directly or indirectly compensated or
entitled to compensation by the Employer (irrespective of whether the employment
relationship has terminated) for reasons other than performance of duties (such
as vacation, holidays, sickness, jury duty, disability, lay-off, military duty
or leave of absence) during the applicable computation period; (3) each hour for
which back pay is awarded or agreed to by the Employer without regard to
mitigation of damages. The same Hours of Service shall not be credited both
under (1) or (2), as the case may be, and under (3).
Notwithstanding the above, (i) no more that 501 Hours of Service are
required to be credited to an Employee on account of any single continuous
period during which the Employee performs no duties (whether or not such period
occurs in a single computation period); (ii) an hour for which an Employee is
directly or indirectly paid, or entitled to payment, on account of a period
during which no duties are performed is not required to be credited to the
Employee if such payment is made or due under a plan maintained solely for the
purpose of complying with applicable worker's compensation, or unemployment
compensation or disability insurance laws; and (iii) Hours of Service are not
required to be credited for a payment which solely reimburses an Employee for
medical or medically related expenses incurred by the Employee.
For purposes of this Section, a payment shall be deemed to be made by or
due from the Employer regardless of whether such payment is made by or due from
the Employer directly, or
<PAGE> 15
indirectly through, among others, a trust fund, or insurer, to which the
Employer contributes or pays premiums and regardless of whether contributions
made or due to the trust fund, insurer, or other entity are for the benefit of
particular Employees or are on behalf of a group of Employees in the aggregate.
An Hour of Service must be counted for the purpose of determining a Year of
Service, a year of participation for purposes of accrued benefits, a 1-Year
Break in Service, and employment commencement date (or reemployment commencement
date). The provisions of Department of Labor regulations 2530.200b-2(b) and (c)
are incorporated herein by reference.
Hours of Service will be credited for employment with all Affiliated
Employers and for any individual considered to be a Leased Employee pursuant to
Code Sections 414(n) or 414(o) and the Regulations thereunder.
Hours of Service will be determined on the basis of the method selected in
the Adoption Agreement.
1.32 "Insurer" means any legal reserve insurance company which shall issue
one or more policies under the Plan.
1.33 "Investment Manager" means an entity that (a) has the power to manage,
acquire, or dispose of Plan assets and (b) acknowledges fiduciary responsibility
to the Plan in writing. Such entity must be a person, firm, or corporation
registered as an investment adviser under the Investment Advisers Act of 1940, a
bank, or an insurance company.
1.34 "Investment Option" means each investment option made available from
time to time, by the Employer to Participants, in which a Participant may elect
to have either all or a portion of his accounts invested as permitted by the
Employer and the Trustee.
1.35 "Joint and Survivor Annuity" means an annuity for the life of a
Participant with a survivor annuity for the life of the Participant's spouse
which is not less than 1/2, nor greater than the amount of the annuity payable
during the joint lives of the Participant and the Participant's spouse. The
Joint and Survivor Annuity will be the amount of benefit which can be purchased
with the Participant's Vested interest in the Plan.
1.36 "Key Employee" means an Employee as defined in Code Section 416(i) and
the Regulations thereunder. Generally, any Employee or former Employee (as well
as each of his Beneficiaries) is considered a Key Employee if he, at any time
during the Plan Year that contains the "Determination Date" or any of the
preceding four (4) Plan Years, has been included in one of the following
categories:
(a) an officer of the Employer (as that term is defined within the
meaning of the Regulations under Code Section 416) having annual "415
Compensation" greater than 50 percent of the amount in effect under Code
Section 415(b)(1)(A) for any such Plan Year.
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<PAGE> 16
(b) one of the ten employees having annual "415 Compensation" from
the Employer for a Plan Year greater than the dollar limitation in effect
under Code Section 415(c)(1)(A) for the calendar year in which such Plan
Year ends and owning (or considered as owning within the meaning of Code
Section 318) both more than one-half percent interest and the largest
interests in the Employer.
(c) a "five percent owner" of the Employer. "Five percent owner"
means any person who owns (or is considered as owning within the meaning
of Code Section 318) more than five percent (5%) of the outstanding stock
of the Employer or stock possessing more than five percent (5%) of the
total combined voting power of all stock of the Employer or, in the case
of an unincorporated business, any person who owns more than five percent
(5%) of the capital or profits interest in the Employer. In determining
percentage ownership hereunder, employers that would otherwise be
aggregated under Code Sections 414(b), (c), (m) and (o) shall be treated
as separate employers.
(d) a "one percent owner" of the Employer having an annual "415
Compensation" from the Employer of more than $150,000. "One percent owner"
means any person who owns (or is considered as owning within the meaning
of Code Section 318) more than one percent (1%) of the outstanding stock
of the Employer or stock possessing more than one percent (1%) of the
total combined voting power of all stock of the Employer or, in the case
of an unincorporated business, any person who owns more than one percent
(1%) of the capital or profits interest in the Employer. In determining
percentage ownership hereunder, employers that would otherwise be
aggregated under Code Sections 414(b), (c), (m) and (o) shall be treated
as separate employers. However, in determining whether an individual has
"415 Compensation" of more than $150,000, "415 Compensation" from each
employer required to be aggregated under Code Sections 414(b), (c), (m)
and (o) shall be taken into account.
For purposes of this Section, the determination of "415 Compensation" shall
be made by including amounts that would otherwise be excluded from a
Participant's gross income by reason of the application of Code Sections
125.402(e)(3), 402(h)(l)(B) and, in the case of Employer contributions made
pursuant to a salary reduction agreement. Code Section 403(b).
1.37 "Late Retirement Date" means the date of, or the first day of the
month or the Anniversary Date coinciding with or next following, whichever
corresponds to the election made for the Normal Retirement Date, a
Participant's actual retirement after having reached his Normal Retirement Date.
1.38 "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
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<PAGE> 17
leasing organization which are attributable to services 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:
(i) 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 (ii) leased
employees do not constitute more than 20 percent of the recipients nonhighly
compensated workforce.
1.39 "Net Profit" means with respect to any Fiscal Year the Employer's net
income or profit for such Fiscal Year determined upon the basis of the
Employer's books of account in accordance with generally accepted accounting
principles, without any reduction for taxes based upon income, or for
contributions made by the Employer to this Plan and any other qualified plan.
1.40 "Non-Elective Contribution" means the Employer's contributions to the
Plan other than those made pursuant to the Participant's deferral election made
pursuant to Section 11.2 and any Qualified Non-Elective Contribution. In
addition, if selected in E3 of the Adoption Agreement, the Employer's Matching
Contribution made pursuant to Section 4.3(b) shall be considered a Non-Elective
Contribution for purposes of the Plan.
1.41 "Non-Highly Compensated Participant" means any Participant who is
neither a Highly Compensated Employee nor a Family Member.
1.42 "Non-Key Employee" means any Employee or former Employee (and his
Beneficiaries) who is not a Key Employee.
1.43 "Normal Retirement Age" means the age specified in the Adoption
Agreement at which time a Participant shall become fully Vested in his
Participant's Account.
1.44 "Normal Retirement Date" means the date specified in the Adoption
Agreement on which a Participant shall become eligible to have his benefits
distributed to him.
1.45 "1-Year Break in Service" means (a) if the 1,000 Hour Method is
selected in the Adoption Agreement, the applicable computation period during
which an Employee has not completed more than 500 Hours of Service with the
Employer; or (b) if the Elapsed Time Method is selected in the Adoption
Agreement, a Period of Severance of at least twelve (12) consecutive months.
Period of Severance means the period commencing with the earlier of:
(a) the date an Employee separates from service by reason of quitting,
retirement, death or discharge; or
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<PAGE> 18
(b) the first anniversary of the first day of the period in which an
employee remains absent from service (with or without pay) for any reason
other than quitting, retirement, death or discharge; or
(c) the second anniversary of the first day of the period in which
an Employee remains absent from service (with or without pay) because of a
"maternity or paternity leave of absence" and ending with the date such
Employee resumes service. A Break in Service shall not include (i) any
period during which the Employee is absent in the service of the armed
forces of the United States, including any period during which his
reemployment rights as a veteran are protected by law; (ii) any period
during which the Employee is on a leave of absence authorized by the
Employer not to exceed two years (which leaves shall be granted on a
nondiscriminatory basis to all Employees similarly situated), provided,
however, that if the Employee fails to return to service prior to the
expiration of such authorized leave, his Period of Severance shall be
deemed to commence on the date such authorized leave commenced.
Further, solely for the purpose of determining whether a Participant has
incurred a 1-Year Break in Service, Hours of Service shall be recognized for
"authorized leaves of absence" and "maternity and paternity leaves of absence."
"Authorized leave of absence" means an unpaid, temporary cessation from
active employment with the Employer pursuant to an established nondiscriminatory
policy, whether occasioned by illness, military service, or any other reason.
A "maternity or paternity leave of absence" means, for Plan Years beginning
after December 31, 1984, an absence from work for any period by reason of the
Employee's pregnancy, birth of the Employee's child, placement of a child with
the Employee in connection with the adoption of such child, or any absence for
the purpose of caring for such child for a period immediately following such
birth or placement. For this purpose, Hours of Service shall be credited for
the computation period in which the absence from work begins, only if credit
therefore is necessary to prevent the Employee from incurring a 1-Year Break in
Service, or, in any other case, in the immediately following computation period.
The Hours of Service credited for a "maternity or paternity leave of absence"
shall be those which would normally have been credited but for such absence, or,
in any case in which the Administrator is unable to determine such hours
normally credited, eight (8) Hours of Service per day. The total Hours of
Service required to be credited for a "maternity or paternity leave of absence"
shall not exceed 501.
1.46 "Owner-Employee" means a sole proprietor who owns the entire interest
in the Employer or a partner who owns more than 10% of either the capital
interest or the profits interest in the Employer and who receives income for
personal services from the Employer.
1.47 "Participant" means any Eligible Employee who participates in the Plan
as provided in Section 3.2 and has not for any reason become ineligible to
participate further in the Plan.
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1.48 "Participant's Account" means the account established and maintained
by the Administrator for each Participant with respect to his total interest
under the Plan resulting from (a) the Employers contributions in the case of a
Profit Sharing Plan or Money Purchase Plan, and (b) the Employer's Non-Elective
Contributions in the case of a 401(k) Profit Sharing Plan.
1.49 "Participant's Combined Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest under the Plan resulting from the Employer's contributions.
1.50 "Participant's Elective Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan and Trust resulting from the Employer's Elective
Contributions and Qualified Non-Elective Contributions. A separate accounting
shall be maintained with respect to that portion of the Participant's Elective
Account attributable to Elective Contributions made pursuant to Section 11.2.
Employer matching contributions if they are deemed to be Elective Contributions,
and any Qualified Non-Elective Contributions.
1.51 "Participant Recordkeeper" means Union Bank of California pursuant to
a separate agency agreement between Union Bank of California and the
Administrator.
1.52 "Participant's Rollover Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan resulting from amounts transferred from another qualified
plan or "conduit" Individual Retirement Account in accordance with Section 4.6.
1.53 "Plan" means this instrument (hereinafter referred to as Union Bank of
California SelectBENEFIT Defined Contribution Plan and Trust Basic Plan Document
#04) including all amendments thereto, and the Adoption Agreement as adopted by
the Employer.
1.54 "Plan Year" means the Plan's accounting year as specified in C2 of the
Adoption Agreement.
1.55 "Pre-Retirement Survivor Annuity" means an immediate annuity for the
life of the Participant's spouse, the payments under which must be equal to the
actuarial equivalent of 50% of the Participant's Vested interest in the Plan as
of the date of death.
1.56 "Qualified Non-Elective Account" means the account established
hereunder to which Qualified Non-Elective Contributions are allocated.
1.57 "Qualified Non-Elective Contribution" means the Employer's
contributions to the Plan that are made pursuant to E5 of the Adoption Agreement
and Section 11.1(d) which are used to satisfy the "Actual Deferral Percentage"
tests. Qualified Non-Elective Contributions are nonforfeitable when made and are
distributable only as specified in Sections 11.2(c) and 11.8. In addition, the
Employer's contributions to the Plan that are made pursuant to Section 11.7(h)
and
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<PAGE> 20
which are used to satisfy the "Actual Contribution Percentage" tests shall be
considered Qualified Non-Elective Contributions.
1.58 "Qualified Voluntary Employee Contribution Account" means the account
established and maintained by the Administrator for each Participant with
respect to his total interest under the Plan resulting from the Participant's
tax deductible qualified voluntary employee contributions made pursuant to
Section 4.9.
1.59 "Regulation" means the Income Tax Regulations as promulgated by the
Secretary of the Treasury of his delegate, and as amended from time to time.
1.60 "Retired Participant" means a person who has been a Participant, but
who has become entitled to retirement benefits under the Plan.
1.61 "Retirement Date" means the date as of which a Participant retires
for reasons other than Total and Permanent Disability, whether such retirement
occurs on a Participant's Normal Retirement Date, Early or Late Retirement Date
(see Section 6.1).
1.62 "Self-Employed Individual" means an individual who has earned income
for the taxable year from the trade or business for which the Plan is
established, and, also, an individual who would have had earned income but for
the fact that the trade or business had no net profits for the taxable year. A
Self-Employed Individual shall be treated as an Employee.
1.63 "Shareholder-Employee" means a Participant who owns more than five
percent (5%) of the Employer's outstanding capital stock during any year in
which the Employer elected to be taxed as a Small Business Corporation under
the applicable Code Section.
1.64 "Short Plan Year" means, if specified in the Adoption Agreement, that
the Plan Year shall be less than a 12 month period. If chosen, the following
rules shall apply in the administration of this Plan. In determining whether an
Employee has completed a Year of Service for benefit accrual purposes in the
Short Plan Year, the number of the Hours of Service required shall be
proportionately reduced based on the number of days in the Short Plan Year. The
determination of whether an Employee has completed a Year of Service for
vesting and eligibility purposes shall be made in accordance with Department of
Labor Regulation 2530.203-2(c). In addition, if this Plan is integrated with
Social Security, the integration level shall also be proportionately reduced
based on the number of days in the Short Plan Year.
1.65 "Sponsor" means Union Bank of California as the sponsoring
organization or any successor acting in its capacity as Sponsor of the Plan.
1.66 "Super Top heavy Play" means a plan described in Section 2.2(b)
1.67 "Taxable Wage Base" means, with respect to any year, the maximum
amount of earnings which may be considered wages for such year under Code
Section 3121(a)(1).
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1.68 "Terminated Participant" means a person who has been a Participant,
but whose employment has been terminated other than by death, Total and
Permanent Disability or retirement.
1.69 "Top Heavy Plan" means a plan described in Section 3.2(a).
1.70 "Top Heavy Plan Year" means a Plan Year commencing after December 31,
1983 during which the Plan is a Top Heavy Plan.
1.71 "Top Paid Group" shall be determined pursuant to Code Section 414(q)
and the Regulations thereunder and generally means the top 20 percent of
Employees who performed services for the Employer during the applicable year,
ranked according to the amount of "415 Compensation" (as determined pursuant to
Section 1.29) received from the Employer during such year. All Affiliated
Employers shall be taken into account as a single employer, and Leased
Employees shall be treated as Employees pursuant to Code Section 414(n) or (o).
Employees who are non-resident aliens who received no earned income (within the
meaning of Code Section 911(d)(2)) from the Employer constituting United States
source income within the meaning of Code Section 861(a)(3) shall not be treated
as Employees. Additionally, for the purpose of determining the number of active
Employees in any year, the following additional Employees shall also be
excluded, however, such Employees shall still be considered for the purpose of
identifying the particular Employees in the Top Paid Group:
(a) Employees with less than six (6) months of service;
(b) Employees who normally work less than 17 1/2 hours per week;
(c) Employees who normally work less than six (6) months during
a year; and
(d) Employees who have not yet attained age 21.
In addition, if 90 percent or more of the Employees of the Employer are
covered under agreements the Secretary of Labor finds to be collective
bargaining agreements between Employee representatives and the Employer, and
the Plan covers only Employees who are not covered under such agreements, then
Employees covered by such agreements shall be excluded from both the total
number of active Employees as well as from the identification of particular
Employees in the Top Paid Group.
The foregoing exclusions set forth in this Section shall be applied on
a uniform and consistent basis for all purposes for which the Code Section
414(q) definition is applicable.
1.72 "Total and Permanent Disability" means the inability to engage in any
substantial gainful activity by reason of any medically determinable physical
or mental impairment that can be expected to result in death or which has
lasted or can be expected to last for a continuous period of not less than 12
months. The disability of a Participant shall be determined by a licensed
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physician chosen by the Administrator. However, if the condition constitutes
total disability under the federal Social Security Acts, the Administrator may
rely upon such determination that the Participant is Totally and Permanently
Disabled for the purposes of this Plan. The determination shall be applied
uniformly to all Participants.
1.73 "Trustee" means Union Bank of California and any successors or
assigns.
1.74 "Trust Fund" means the assets of the Plan and Trust as the same shall
exist from time to time.
1.75 "Valuation Date" means each business day that both the Trustee and
the New York Stock Exchange are open for business.
1.76 "Vested" means the nonforfeitable portion of any account maintained
on behalf of a Participant.
1.77 "Voluntary Contribution Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan resulting from the Participant's nondeductible voluntary
contributions made pursuant to Section 4.7.
1.78 "Year of Service" means (a) if the 1,000 Hour Method is selected in
the Adoption Agreement, the computation period of twelve (12) consecutive
months, herein set forth, and during which an Employee has completed at least
1000 Hours of Service or (b) if the Elapsed Time Method is selected, twelve
(12) Months of Service.
If the 1,000 Hour Method is selected in the Adoption Agreement, then for
purposes of eligibility for participation, the initial computation period shall
begin with the date on which the Employee first performs an Hour of Service
(employment commencement date). The computation period beginning after a 1-Year
Break in Service shall be measured from the date on which an Employee again
performs an Hour of Service. The succeeding computation periods shall begin with
the first anniversary of the Employee's employment commencement date. However,
if one (1) Year of Service or less is required as a condition of eligibility,
then after the initial eligibility computation period, the eligibility
computation period shall shift to the current Plan Year which includes the
anniversary of the date on which the Employee first performed an Hour of
Service. An Employee who is credited with 1,000 Hours of Service in both the
initial eligibility computation period and the first Plan Year which commences
prior to the first anniversary of the Employee's initial eligibility computation
period will be credited with two Years of Service for purposes of eligibility to
participate.
If the Elapsed Time Method is selected in the Adoption Agreement, then
for purposes of determining an Employee's initial or continued eligibility to
participate and vesting, an Employee will receive credit for the aggregate of
all time periods commencing with the Employee's first day of employment or
reemployment and ending on the date a Break in Service begins. The first day of
employment is the first day the Employee performs an Hour of Service. An
Employee will
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also receive credit for any period of severance of less than 12 consecutive
months. Fractional periods of a year will be expressed in terms of days.
Years of Service and breaks in service will be measured on the same
computation period.
Years of Service with any predecessor Employer which maintained this
Plan shall be recognized. Years of Service with any other predecessor Employer
shall be recognized as specified in the Adoption Agreement.
Years of Service with any Affiliated Employer shall be recognized.
ARTICLE II
TOP HEAVY PROVISIONS AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall provide the special vesting
requirements of Code Section 416(b) pursuant to Section 6.4 of the Plan and the
special minimum allocation requirements of Code Section 416(c) pursuant to
Section 4.3(i) of the Plan.
2.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan Year
beginning after December 31, 1983, in which, as of the Determination
Date, (1) the Present Value of Accrued Benefits of Key Employees and (2)
the sum of the Aggregate Accounts of Key Employees under this Plan and
all plans of an Aggregation Group, exceeds sixty percent (60%) of the
Present Value of Accrued Benefits and the Aggregate Accounts of all Key
and Non-Key Employees under this Plan and all plans of an Aggregation
Group.
If any Participant is a Non-Key Employee for any Plan Year, but
such Participant was a Key Employee for any prior Plan Year, such
Participant's Present Value of Accrued Benefit and/or Aggregate Account
balance shall not be taken into account for purposes of determining
whether this Plan is a Top Heavy or Super Top Heavy Plan (or whether any
Aggregation Group which includes this Plan is a Top Heavy Group). In
addition, if a Participant or Former Participant has not performed any
services for any Employer maintaining the Plan at any time during the
five year period ending on the Determination Date, any accrued benefit
for such Participant or Former Participant shall not be taken into
account for the purposes of determining whether this Plan is a Top Heavy
or Super Top Heavy Plan.
(b) This Plan shall be a Super Top Heavy Plan for any Plan Year
beginning after December 31, 1983, in which, as of the Determination
Date, (1) the Present Value of Accrued Benefits of Key Employees and (2)
the sum of the Aggregate Accounts of Key Employees under this Plan and
all plans of an Aggregation Group, exceeds ninety percent
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(90%) of the Present Value of Accrued Benefits and the Aggregate
Accounts of all Key and Non-Key Employees under this Plan and all plans
of an Aggregation Group.
(c) Aggregate Account: A Participant's Aggregate Account as of
the Determination Date is the sum of:
(1) his Participant's Combined Account balance as of the most
recent valuation occurring within a twelve (12) month period
ending on the Determination Date;
(2) for a Profit Sharing Plan, an adjustment for any
contributions due as of the Determination Date. Such adjustment
shall be the amount of any contributions actually made after the
Valuation Date but before the Determination Date, except for the
first Plan Year when such adjustment shall also reflect the
amount of any contributions made after the Determination Date
that are allocated as of a date in that first Plan Year;
(3) for a Money Purchase Plan, contributions that would be
allocated as of a date not later than the Determination Date,
even though those amounts are not yet made or required to be
made.
(4) any Plan distributions made within the Plan Year that
includes the Determination Date or within the four (4) preceding
Plan Years. However, in the case of distributions made after the
Valuation Date and prior to the Determination Date, such
distributions are not included as distributions for top heavy
purposes to the extent that such distributions are already
included in the Participant's Aggregate Account balance as of the
Valuation Date. In the case of a distribution of an annuity
Contract, the amount of such distribution is deemed to be the
current actuarial value of the Contract, determined on the date
of the distribution. Notwithstanding anything herein to the
contrary, all distributions, including distributions made prior
to January 1, 1984, and distributions under a terminated plan
which if it had not been terminated would have been required to
be included in an Aggregation Group, will be counted. Further,
distributions from the Plan (including the cash value of life
insurance policies) of a Participant's account balance because of
death shall be treated as a distribution for the purpose of this
paragraph.
(5) any Employee contributions, whether voluntary or mandatory.
However, amounts attributable to tax deductible qualified
voluntary employee contributions shall not be considered to be a
part of the Participant's Aggregate Account balance.
(6) with respect to unrelated rollovers and plan-to-plan
transfers (ones which are both initiated by the Employee and made
from a plan maintained by one employer to a plan maintained by
another employer), if this Plan provides the rollovers or
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plan-to-plan transfers, it shall always consider such rollovers
or plan-to-plan transfers as a distribution for the purposes of
this Section. If this Plan is the plan accepting such rollovers
or plan-to-plan transfers, it shall not consider such rollovers
or plan-to-plan transfers accepted after December 31, 1983 as
part of the Participant's Aggregate Account balance. However,
rollovers or plan-to-plan transfers accepted prior to January 1,
1984 shall be considered as part of the Participant's Aggregate
Account balance.
(7) with respect to related rollovers and plan-to-plan transfers
(ones either not initiated by the Employee or made to a plan
maintained by the same employer), if this Plan provides the
rollover or plan-to-plan transfer, it shall not be counted as a
distribution for purposes of this Section. If this Plan is the
plan accepting such rollover or plan-to-plan transfer, it shall
consider such rollover or plan-to-plan transfer as part of the
Participant's Aggregate Account balance, irrespective of the date
on which such rollover or plan-to-plan transfer is accepted.
(8) For the purposes of determining whether two employers are to
be treated as the same employer in 2.2(c)(6) and 2.2(c)(7) above,
all employers aggregated under Code Section 414(b), (c), (m) and
(o) are treated as the same employer.
(d) "Aggregation Group" means either a Required Aggregation Group
or a Permissive Aggregation Group as hereinafter determined.
(1) Required Aggregation Group: In determining a Required
Aggregation Group hereunder, each qualified plan of the Employer,
including any Simplified Employee Pension Plan, in which a Key
Employee is a participant in the Plan Year containing the
Determination Date or any of the four preceding Plan Years, and
each other qualified plan of the Employer which enables any
qualified plan in which a Key Employee participates to meet the
requirements of Code Sections 401(a)(4) or 410, will be required
to be aggregated. Such group shall be known as a Required
Aggregation Group.
In the case of a Required Aggregation Group, each plan in the
group will be considered a Top Heavy Plan if the Required
Aggregation Group is a Top Heavy Group. No plan in the Required
Aggregation Group will be considered a Top Heavy Plan if the
Required Aggregation Group is not a Top Heavy Group.
(2) Permissive Aggregation Group: The Employer may also include
any other plan of the Employer, including any Simplified Employee
Pension Plan, not required to be included in the Required
Aggregation Group, provided the resulting group, taken as a
whole, would continue to satisfy the provisions of Code Sections
401(a)(4) and 410. Such group shall be known as a Permissive
Aggregation Group.
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In the case of a Permissive Aggregation Group, only a plan that
is part of the Required Aggregation Group will be considered a
Top Heavy Plan if the Permissive Aggregation Group is a Top Heavy
Group. No plan in the Permissive Aggregation Group will be
considered a Top Heavy Plan if the Permissive Aggregation Group
is not a Top Heavy Group.
(3) Only those plans of the Employer in which the Determination
Dates fall within the same calendar year shall be aggregated in
order to determine whether such plans are Top Heavy Plans.
(4) An Aggregation Group shall include any terminated plan of the
Employer if it was maintained within the last five (5) years
ending on the Determination Date.
(e) "Determination Date" means (a) the last day of the preceding
Plan Year, or (b) in the case of the first Plan Year, the last day of
such Plan Year.
(f) Present Value of Accrued Benefit: In the case of a defined
benefit plan, the Present Value of Accrued Benefit for a Participant
other than a Key Employee shall be as determined using the single
accrual method used for all plans of the Employer and Affiliated
Employers, or if no such single method exists, using a method which
results in benefits accruing not more rapidly than the slowest accrual
rate permitted under Code Section 411(b)(1)(C). The determination of the
Present Value of Accrued Benefit shall 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.
However, any such determination must include present value of
accrued benefit attributable to any Plan distributions referred to in
Section 2.2(c)(4) above, any Employee contributions referred to in
Section 2.2(c)(5) above or any related or unrelated rollovers referred
to in Sections 2.2(c)(6) and 2.2(c)(7) above.
(g) "Top Heavy Group" means an Aggregation Group in which, as of
the Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key Employees under
all defined benefit plans included in the group, and
(2) the Aggregate Accounts of Key Employees under all defined
contribution plans included in the group,
exceeds sixty percent (60%) of a similar sum determined for all
Participants.
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(h) The Administrator shall determine whether this Plan is a Top
Heavy Plan on the Anniversary Date specified in the Adoption Agreement.
Such determination of the top heavy ratio shall be in accordance with Code
Section 416 and the Regulations thereunder.
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) The Employer shall be empowered to appoint and remove the
Trustee and the Administrator from time to time as it deems necessary for
the proper administration of the Plan to assure that the Plan is being
operated for the exclusive benefit of the Participants and their
Beneficiaries in accordance with the terms of the Plan, the Code, and the
Act.
(b) The Employer shall establish a "funding policy and method", i.e.,
it shall determine whether the Plan has a short run need for liquidity
(e.g., to pay benefits) or whether liquidity is a long run goal and
investment growth (and stability of same) is a more current need, or shall
appoint a qualified person to do so. The Employer or its delegate shall
communicate such needs and goals to the Trustee, who shall coordinate such
Plan needs with its investment policy. The communication of such a "funding
policy and method" shall not, however, constitute a directive to the
Trustee as to investment of the Trust Funds. Such "funding policy and
method" shall be consistent with the objectives of this Plan and with the
requirements of Title I of the Act.
(c) The Employer shall select the Investment Options to be offered
pursuant to the provisions of the Trust Agreement. The Employer may, in its
discretion, appoint an Investment Manager to manage all or a designated
portion of the assets of the Plan. In such event, the Trustee shall follow
the directive of the Investment Manager in investing the assets of the Plan
managed by the Investment Manager.
(d) The Employer shall periodically review the performance of any
Fiduciary or other person to whom duties have been delegated or allocated
by it under the provisions of this Plan or pursuant to procedures
established hereunder. This requirement may be satisfied by formal periodic
review by the Employer or by qualified person specifically designated by
the Employer, through day-to-day conduct and evaluation, or through other
appropriate ways.
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall appoint one or more Plan Administrators. Any person,
including, but not limited to, the Employees of the Employer, shall be eligible
to serve as an Administrator. Any person so appointed shall signify his
acceptance by filing written acceptance with the Employer. An Administrator may
resign by delivering his written resignation to the Employer or be removed by
the Employer by delivery of written notice of removal, to take effect at a date
specified therein, or upon delivery to the Administrator if no date is
specified.
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The Employer, upon the resignation or removal of an Administrator, shall
promptly designate in writing a successor to this position. If the Employer
does not appoint an Administrator, the Employer will function as the
Administrator.
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES
If more than one person is appointed as Administrator, the responsibilities
of each Administrator may be specified by the Employer and accepted in writing
by each Administrator. In the event that no such delegation is made by the
Employer, the Administrators may allocate the responsibilities among
themselves, in which event the Administrators shall notify the Employer and the
Trustee in writing of such action and specify the responsibilities of each
Administrator. The Trustee thereafter shall accept and rely upon any documents
executed by the appropriate Administrator until such time as the Employer or
the Administrators file with the Trustee a written revocation of such
designation.
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to administer the Plan
for the exclusive benefit of the Participants and their Beneficiaries, subject
to the specific terms of the Plan. The Administrator shall administer the Plan
in accordance with its terms and shall have the power and discretion to
construe the terms of the Plan and determine all questions arising in
connection with the administration, interpretation, and application of the
Plan. Any such determination by the Administrator shall be conclusive and
binding upon all persons. The Administrator may establish procedures, correct
any defect, supply any information, or reconcile any inconsistency in such
manner and to such extent as shall be deemed necessary or advisable to carry
out the purpose of the Plan; provided, however, that any procedure,
discretionary act, interpretation or construction shall be done in a
nondiscriminatory manner based upon uniform principles consistently applied and
shall be consistent with the intent that the Plan shall continue to be deemed a
qualified plan under the terms of Code Section 401(a), and shall comply with
the terms of the Act and all regulations issued pursuant thereto. The
Administrator shall have all powers necessary or appropriate to accomplish his
duties under this Plan.
The Administrator shall be charged with the duties of the general
administration of the Plan, including, but not limited to, the following:
(a) the discretion to determine all questions relating to the
eligibility of Employees to participate or remain a Participant hereunder
and to receive benefits under the Plan;
(b) to compute, certify, and direct the Trustee with respect to the
amount and the kind of benefits to which any Participant shall be entitled
hereunder;
(c) to authorize and direct the Trustee with respect to all
nondiscretionary or otherwise directed disbursements from the Trust Fund;
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(d) to maintain all necessary records for the administration of the
Plan;
(e) to interpret the provisions of the Plan and to make and publish
such rules for regulation of the Plan as are consistent with the terms
hereof;
(f) to determine the size and type of any Contract to be purchased
from any Insurer, and to designate the Insurer from which such Contract
shall be purchased;
(g) to compute and certify to the Employer and to the Trustee from
time to time the sums of money necessary or desirable to be contributed to
the Trust Fund;
(h) to prepare and distribute to Employees a procedure for notifying
Participants and Beneficiaries of their rights to elect Joint and Survivor
Annuities and Pre-Retirement Survivor Annuities if required by the Code
and Regulations thereunder;
(i) to assist any Participant regarding his rights, benefits, or
elections available under the Plan.
2.7 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken and shall keep
all other books of account, records, and other data that may be necessary for
proper administration of the Plan and shall be responsible for supplying all
information and reports to the Internal Revenue Service, Department of Labor,
Participants, Beneficiaries and others as required by law.
2.8 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the Administrator,
may appoint counsel, specialists, advisers, and other persons as the
Administrator or the Trustee deems necessary or desirable in connection with
the administration of this Plan.
2.9 INFORMATION FROM EMPLOYER
To enable the Administrator to perform his functions, the Employer shall
supply full and timely information to the Administrator on all matters relating
to the Compensation of all Participants, their Hours of Service, their Years of
Service, their retirement, death, disability, or termination of employment, and
such other pertinent facts as the Administrator may require; and the
Administrator shall advise the Trustee of such of the foregoing facts as may be
pertinent to the Trustee's duties under the Plan. The Administrator may rely
upon such information as is supplied by the Employer and shall have no duty or
responsibility to verify such information.
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2.10 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust Fund unless
paid by the Employer. Such expenses shall include any expenses incident to the
functioning of the Administrator, including, but not limited to fees of
accountants, counsel, and other specialists and their agents, and other costs
of administering the Plan. Until paid, the expenses shall constitute a
liability of the Trust Fund. However, the Employer may reimburse the Trust
Fund for any administration expense incurred. Any administration expense paid
to the Trust Fund as a reimbursement shall not be considered an Employer
contribution.
2.11 MAJORITY ACTIONS
Except where there has been an allocation and delegation of administrative
authority pursuant to Section 2.5, if there shall be more than one
Administrator, they shall act by a majority of their number, but may authorize
one or more of them to sign all papers on their behalf.
2.12 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing with the
Administrator. Written notice of the disposition of a claim shall be furnished
to the claimant within 90 days after the application is filed. In the event the
claim is denied, the reasons for the denial shall be specifically set forth in
the notice in language calculated to be understood by the claimant, pertinent
provisions of the Plan shall be cited, and, where appropriate, an explanation
as to how the claimant can perfect the claim will be provided. In addition, the
claimant shall be furnished with an explanation of the Plan's claims review
procedure.
2.13 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of either, who has been
denied a benefit by a decision of the Administrator pursuant to Section 2.12
shall be entitled to request the Administrator to give further consideration to
his claim by filing with the Administrator a written request for a hearing.
Such request, together with a written statement of the reasons why the claimant
believes his claim should be allowed, shall be filed with the Administrator no
later than 60 days after receipt of the written notification provided for in
Section 2.12. The Administrator shall then conduct a hearing within the next 60
days, at which the claimant may be represented by an attorney or any other
representative of his choosing and expense and at which the claimant shall have
an opportunity to submit written and oral evidence and arguments in support of
his claim. At the hearing (or prior thereto upon 5 business days written notice
to the Administrator) the claimant or his representative shall have an
opportunity to review all documents in the possession of the Administrator
which are pertinent to the claim at issue and its disallowance. Either the
claimant or the Administrator may cause a court reporter to attend the hearing
and record the proceedings. In such event, a complete written transcript of
the proceedings shall be furnished to both parties by the court reporter. The
full expense of any such court reporter and
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<PAGE> 31
such transcripts shall be borne by the party causing the court reporter to
attend the hearing. A final decision as to the allowance of the claim shall be
made by the Administrator within 60 days of receipt of the appeal (unless there
has been an extension of 60 days due to special circumstances, provided the
delay and the special circumstances occasioning it are communicated to the
claimant within the 60 day period). Such communication shall be written in a
manner calculated to be understood by the claimant and shall include specific
reasons for the decision and specific references to the pertinent Plan
provisions on which the decision is based.
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee shall be eligible to participate hereunder on the
date he has satisfied the requirements specified in the Adoption Agreement.
3.2 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee who has become eligible to be a Participant shall
become a Participant effective as of the day specified in the Adoption
Agreement.
In the event an Employee who has satisfied the Plan's eligibility
requirements and would otherwise have become a Participant shall go from a
classification of a noneligible Employee to an Eligible Employee, such Employee
shall become a Participant as of the date he becomes an Eligible Employee.
In the event an Employee who has satisfied the Plan's eligibility
requirements and would otherwise become a Participant shall go from a
classification of an Eligible Employee to a noneligible Employee and becomes
ineligible to participate and has not incurred a 1-Year Break in Service, such
Employee shall participate in the Plan as of the date he returns to an eligible
class of Employees. If such Employee does incur a 1-Year Break in Service,
eligibility will be determined under the Break in Service rules of the Plan.
3.3 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each Employee for
participation in the Plan based upon information furnished by the Employer. Such
determination shall be conclusive and binding upon all persons, as long as the
same is made pursuant to the Plan and the Act. Such determination shall be
subject to review per Section 2.13.
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3.4 TERMINATION OF ELIGIBILITY
In the event a Participant shall go from a classification of an Eligible
Employee to an ineligible Employee, such Former Participant shall continue to
vest in his interest in the Plan for each Year of Service completed while a
noneligible Employee, until such time as his Participant's Account shall be
forfeited or distributed pursuant to the terms of the Plan. Additionally, his
interest in the Plan shall continue to share in the earnings of the Trust Fund.
3.5 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be included as a Participant
in the Plan is erroneously omitted and discovery of such omission is not made
until after a contribution by his Employer for the year has been made, the
Employer shall make a subsequent contribution, if necessary after the
application of Section 4.3(e), so that the omitted Employee receives a total
amount which the said Employee would have received had he not been omitted. Such
contribution shall be made regardless of whether or not it is deductible in
whole or in part in any taxable year under applicable provisions of the Code.
3.6 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have been included as a
Participant in the Plan is erroneously included and discovery of such incorrect
inclusion is not made until after a contribution for the year has been made, the
Employer shall not be entitled to recover the contribution made with respect to
such contribution. In such event, the amount contributed with respect to the
ineligible person shall constitute a Forfeiture for the Plan Year in which the
discovery is made.
3.7 ELECTION NOT TO PARTICIPATE
An Employee may, subject to the approval of the Employer, elect voluntarily
not to participate in the Plan. The election not to participate must be
communicated to the Employer, in writing, at least thirty (30) days before the
beginning of a Plan Year. For Standardized Plans, a Participant or an Eligible
Employee may not elect not to participate. Furthermore, the foregoing election
not to participate shall not be available with respect to partners in a
partnership.
3.8 CONTROL OF ENTITIES BY OWNER-EMPLOYEE
(a) If this Plan provides contributions or benefits for one or more
Owner-Employees who control both the business for which this Plan is
established and one or more other entities, this Plan and the plan
established for other trades or businesses must, when looked at as a single
Plan, satisfy Code Sections 401(a) and (d) for the Employees of this and
all other entities.
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(b) If the Plan provides contributions or benefits for one or more
Owner-Employees who control one or more other trades or businesses, the
employees of the other trades or businesses must be included in a plan which
satisfies Code Sections 401(a) and (d) and which provides contributions and
benefits not less favorable than provided for Owner-Employees under this Plan.
(c) If an individual is covered as an Owner-Employee under the plans of two
or more trades or businesses which are not controlled and the individual
controls a trade or business, then the benefits or contributions of the
employees under the plan of the trades or businesses which are controlled must
be as favorable as those provided for him under the most favorable plan of the
trade or business which is not controlled.
(d) For purposes of the preceding paragraphs, an Owner-Employee, or two or
more Owner-Employees, will be considered to control an entity if the
Owner-Employee, or two or more Owner-Employees together:
(1) own the entire interest in an unincorporated entity, or
(2) in the case of a partnership, own more than 50 percent of either the
capital interest or the profits interest in the partnership.
(e) For purposes of the preceding sentence, an Owner-Employee, or two or
more Owner-Employees shall be treated as owning any interest in a partnership
which is owned, directly or indirectly, by a partnership which such
Owner-Employee, or such two or more Owner-Employees, are considered to control
within the meaning of the preceding sentence.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
(a) For a Money Purchase Plan -
(1) The Employer shall make contributions over such period of years as the
Employer may determine on the following basis. On behalf of each
Participant eligible to share in allocations, for each year of his
participation in this Plan, the Employer shall contribute the amount
specified in the Adoption Agreement. All contributions by the Employer
shall be made in cash or in such property as is acceptable to the Trustee.
The Employer shall be required to obtain a waiver from the Internal Revenue
Service for any Plan Year in which it is unable to make the full required
contribution to the Plan. In the event a waiver is obtained, this Plan
shall be deemed to be an individually designed plan.
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<PAGE> 34
(2) For any Plan Year beginning prior to January 1, 1990, and if
elected in the non-standardized Adoption Agreement for any Plan Year
beginning on or after January 1, 1990, the Employer shall not
contribute on behalf of a Participant who performs less than a Year of
Service during any Plan Year, unless there is a Short Plan Year or a
contribution is required pursuant to 4.3(h).
(3) Notwithstanding the foregoing, the Employer's contribution for any
Fiscal Year shall not exceed the maximum amount allowable as a
deduction to the Employer under the provisions of Code Section 404.
However, to the extent necessary to provide the top heavy minimum
allocations, the Employer shall make a contribution even if it exceeds
the amount which is deductible under Code Section 404.
(b) For a Profit Sharing Plan -
(1) For each Plan Year, the Employer shall contribute to the Plan such
amount as specified by the Employer in the Adoption Agreement.
Notwithstanding the foregoing, however, the Employer's contribution
for any Fiscal Year shall not exceed the maximum amount allowable as a
deduction to the Employer under the provisions of Code Section 404.
All contributions by the Employer shall be made in cash or in such
property as is acceptable to the Trustee.
(2) Except, however, to the extent necessary to provide the top heavy
minimum allocations, the Employer shall make a contribution even if it
exceeds current or accumulated Net Profit or the amount which is
deductible under Code Section 404.
4.2 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION
The Employer shall generally pay to the Trustee its contribution to the
Plan for each Plan Year within the time prescribed by law, including extensions
of time, for the filing of the Employer's federal income tax return for the
Fiscal Year.
4.3 ALLOCATION OF CONTRIBUTIONS AND FORFEITURES
(a) The Administrator shall establish and maintain an account in the
name of each Participant to which the Administrator shall credit as of each
Anniversary Date, or other Valuation Date, all amounts allocated to each
such Participant as set forth herein.
(b) The Employer shall provide the Administrator with all information
required by the Administrator to make a proper allocation of the Employer's
contributions for each Plan Year. Within a reasonable period of time after
the date of receipt by the Administrator of such information, the
Administrator shall allocate such contribution as follows:
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<PAGE> 35
(1) For a Money Purchase Plan:
(i) The Employer's Contribution shall be allocated to each Participant's
Combined Account in the manner set forth in Section 4.1 herein and as
specified in Section E2 of the Adoption Agreement.
(2) For an Integrated Profit Sharing Plan:
(i) The Employer's contribution shall be allocated to each Participant's
Account, except as provided in Section 4.3(f), in a dollar amount equal to
5.7% of the sum of each Participant's total Compensation plus Excess
Compensation. If the Employer does not contribute such amount for all
Participants, each Participant will be allocated a share of the
contribution in the same proportion that his total Compensation plus his
total Excess Compensation for the Plan Year bears to the total
Compensation plus the total Excess Compensation of all Participants for
that year.
Regardless of the preceding, 4.3% shall be substituted for 5.7% above if Excess
Compensation is based on more than 20% and less than or equal to 80% of the
Taxable Wage Base. If Excess Compensation is based on less than 100% and more
than 80% of the Taxable Wage Base, then 5.4% shall be substituted for 5.7%
above.
(ii) The balance of the Employer's contribution over the amount allocated
above, if any, shall be allocated to each Participant's Combined Account
in the same proportion that his total Compensation for the Year bears to
the total Compensation of all Participants for such year.
(iii) Except, however, for any Plan Year beginning prior to January 1,
1990, and if elected in the non-standardized Adoption Agreement for any
Plan Year beginning on or after January 1, 1990, a Participant who performs
less than a Year of Service during any Plan Year shall not share in the
Employer's contribution for that year, unless there is a Short Plan Year
or a contribution is required pursuant to Section 4.3(h).
(3) For a Non-Integrated Profit Sharing Plan:
(i) The Employer's contribution shall be allocated to each Participant's
Account in the same proportion that each such Participant's Compensation
for the year bears to the total Compensation of all Participants for such
year.
(ii) Except, however, for any Plan Year beginning prior to January 1,
1990, and if elected in the non-standardized Adoption
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<PAGE> 36
Agreement for any Plan Year beginning on or after January 1, 1990, a
Participant who performs less than a Year of Service during any Plan
Year shall not share in the Employer's contribution for that year,
unless there is a Short Plan Year or a contribution is required
pursuant to Section 4.3(h).
(c)(1) Each Valuation Date all accounts of each Participant shall be
charged or credited as appropriate with the net earnings, gains, losses, and
expenses as well as any appreciation or depreciation in market value of each
Investment Option using publicly listed fair market values when appropriate.
Trustee shall update the values of the Investment Options of each account based
on the units held by the account in the Investment Option.
(2) To the extent that there are Trust assets, the value of which is not
readily determinable on an established market, any earnings, gains or
losses shall be allocated in a manner consistent with Section 5.2. In the
event such assets are accounted for as pooled assets, the allocation of
earnings, gains and losses shall consider each Participant's entire account
balance and shall be based upon the earnings, gains and losses of the
entire pool of such assets. In the event such assets are accounted for as
part of a Participant's segregated account, the allocation of earnings,
gains and losses from such assets shall be made on a separate and distinct
basis.
(3) If, with respect to any Plan Year, any account of a Participant is
credited with an incorrect amount of Contributions or earnings to which
such Participant is entitled under the Plan, or if an error is made with
respect to the investment of the assets of the account, which error
results in an incorrect amount being credited to the account of the
Participant, remedial action may be taken in accordance with this
paragraph. In such event, the Plan may adjust such account balances to
the extent necessary to reflect the account balances which would have
existed had no such error been made. Further, the Employer may make
additional contributions to the account of any affected Participant to
place the affected account in the position that would have existed if the
error had not been made. Any account adjustments or additional
contributions made under this section of the Plan shall be made on a
uniform and non-discriminatory basis.
(d) Participants' Accounts shall be debited for any insurance or annuity
premiums paid, if any, and credited with any dividends or interest received on
insurance contracts.
(e) As of each Anniversary Date any amounts which became Forfeitures
since the last Anniversary Date shall first be made available to reinstate
previously forfeited account balances of Former Participants, if any, in
accordance with Section 6.4(g)(2) or be used to satisfy any contribution that
may be required pursuant to Section 3.5. The remaining Forfeitures, if any,
shall be treated in accordance with the Adoption Agreement. Provided, however,
that in the event the allocation of Forfeitures provided
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<PAGE> 37
herein shall cause the "annual addition" (as defined in Section 4.4) to any
Participant's Account to exceed the amount allowable by the Code, the excess
shall be reallocated in accordance with Section 4.5. Except, however, for any
Plan Year beginning prior to January 1, 1990, and if elected in the
non-standardized Adoption Agreement for any Plan Year beginning on or after
January 1, 1990, a Participant who performs less than a Year of Service during
any Plan Year shall not share in the Plan Forfeitures for that year, unless
there is a Short Plan Year or a contribution required pursuant to Section
4.3(h).
(f) Minimum Allocations Required for Top Heavy Plan Years: Notwithstanding
the foregoing, for any Top Heavy Plan Year, the sum of the Employer's
contributions and Forfeitures allocated to the Participant's Combined Account
of each Non-Key Employee shall be equal to at least three percent (3%) of such
Non-Key Employee's "415 Compensation" (reduced by contributions and
forfeitures, if any, allocated to each Non-Key Employee in any defined
contribution plan included with this plan in a Required Aggregation Group).
However, if (i) the sum of the Employer's contributions and Forfeitures
allocated to the Participant's Combined Account of each Key Employee for such
Top Heavy Plan Year is less than three percent (3%) of each Key Employee's
"415 Compensation" and (ii) this Plan is not required to be included in an
Aggregation Group to enable a defined benefit plan to meet the requirements of
Code Section 401(a)(4) or 410, the sum of the Employer's contributions and
Forfeitures allocated to the Participant's Combined Account of each Non-Key
Employee shall be equal to the largest percentage allocated to the
Participant's Combined Account of any Key Employee.
However, for each Non-Key Employee who is a Participant in a paired Profit
Sharing Plan or 401(k) Profit Sharing Plan and a paired Money Purchase Plan,
the minimum 3% allocation specified above shall be provided in the Money
Purchase Plan.
If this is an integrated Plan, then for any Top Heavy Plan Year the
Employer's contribution shall be allocated as follows:
(1) An amount equal to 3% multiplied by each Participant's Compensation for
the Plan Year shall be allocated to each Participant's Account. If the
Employer does not contribute such amount for all Participants, the amount
shall be allocated to each Participant's Account in the same proportion
that his total Compensation for the Plan Year bears to the total
Compensation of all Participants for such year.
(2) The balance of the Employer's contribution over the amount allocated
under subparagraph (1) hereof shall be allocated to each Participant's Account
in a dollar amount equal to 3% multiplied by a Participant's Excess
Compensation. If the Employer does not contribute such amount for all
Participants, each Participant will be allocated a share of the contribution in
the same proportion that his Excess Compensation bears to the total Excess
Compensation of all Participants for that year.
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<PAGE> 38
(3) The balance of the Employer's contribution over the amount allocated
under subparagraph (2) hereof shall be allocated to each Participant's
Account in a dollar amount equal to 2.7% multiplied by the sum of each
Participant's total Compensation plus Excess Compensation. If the Employer
does not contribute such amount for all Participants, each Participant will
be allocated a share of the contribution in the same proportion that his
total Compensation plus his total Excess Compensation for the Plan Year
bears to the total Compensation plus the total Excess Compensation of all
Participants for that year.
Regardless of the preceding, 1.3% shall be substituted for 2.7% above if
Excess Compensation is based on more than 20% and less than or equal to
80% of the Taxable Wage Base. If Excess Compensation is based on less than
100% and more than 80% of the Taxable Wage Base, then 2.4% shall be
substituted for 2.7% above.
(4) The balance of the Employer's contributions over the amount allocated
above, if any, shall be allocated to each Participant's Account in the same
proportion that his total Compensation for the Plan Year bears to the total
Compensation of all Participants for such year.
For each Non-Key Employee who is a Participant in this Plan and another
non-paired defined contribution plan maintained by the Employer, the minimum 3%
allocation specified above shall be provided as specified in F3 of the Adoption
Agreement.
(g) For purposes of the minimum allocations set forth above, the
percentage allocated to the Participant's Combined Account of any Key Employee
shall be equal to the ratio of the sum of the Employer's contributions and
Forfeitures allocated on behalf of such Key Employee divided by the "415
Compensation" for such Key Employee.
(h) For any Top Heavy Plan Year, the minimum allocations set forth in
this Section shall be allocated to the Participant's Combined Account of all
Non-Key Employees who are Participants and who are employed by the Employer on
the last day of the Plan Year, including Non-Key Employees who have (1) failed
to complete a Year of Service; or (2) declined to make mandatory contributions
(if required) or, in the case of a cash or deferred arrangement, elective
contributions to the Plan.
(i) Notwithstanding anything herein to the contrary, in any Plan Year in
which the Employer maintains both this Plan and a defined benefit pension plan
included in a Required Aggregation Group which is top heavy, the Employer shall
not be required to provide a Non-Key Employee with both the full separate
minimum defined benefit plan benefit and the full separate defined contribution
plan allocations. Therefore, if the Employer maintains both a Defined Benefit
and a Defined Contribution Plan that are a Top Heavy Group, the top heavy
minimum benefits shall be provided as follows:
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<PAGE> 39
(l) Applies of F1b of the Adoption Agreement is Selected -
(i) The requirements of Section 2.1 shall apply except that each
Non-Key Employee who is a Participant in the Profit Sharing Plan or
Money Purchase Plan and who is also a Participant in the Defined
Benefit Plan shall receive a minimum allocation of five percent (5%)
of such Participant's "415 Compensation" from the applicable Defined
Contribution Plan(s).
(ii) For each Non-Key Employee who is a Participant only in the
Defined Benefit Plan the Employer will provide a minimum
non-integrated benefit equal to 2% of his highest five consecutive
year average "415 Compensation" for each Year of Service while a
Participant in the Plan, in which the Plan is top heavy, not to
exceed ten.
(iii) For each Non-Key Employee who is a Participant only in this
Defined Contribution Plan, the Employer shall provide a contribution
equal to 3% of his "415 Compensation."
(2) Applies if F1c of the Adoption Agreement is Selected -
(i) The minimum allocation specified in Section 4.3(i)(1)(i) shall be
7 1/2% if the Employer elects in the Adoption Agreement for years in
which the Plan is Top Heavy, but not Super Top Heavy.
(ii) The minimum benefit specified in Section 4.3(i)(1)(ii) shall be
3% if the Employer elects in the Adoption Agreement for years in
which the Plan is Top Heavy, but not Super Top Heavy.
(iii) The minimum allocation specified in Section 4.3(i)(1)(iii)
shall be 4% if the Employer elects in the Adoption Agreement for
years in which the Plan is Top Heavy, but not Super Top Heavy.
(j) For the purposes of this Section, "415 Compensation" shall be limited
to the same dollar limitations set forth in Section 1.9. However, for the Plan
Years beginning prior to January 1, 1989, the $200,000 limit shall apply only
for Top Heavy Plan Years and shall not be adjusted.
(k) Notwithstanding anything herein to the contrary, any Participant who
terminated employment during the Plan Year for reasons other than death, Total
and Permanent Disability, or retirement shall or shall not share in the
allocations of the Employer's Contributions and Forfeitures as provided in the
Adoption Agreement. Notwithstanding the foregoing, for Plan Years beginning
after 1989, if this is a standardized Plan, any such terminated Participant
shall share in the allocations as
33
<PAGE> 40
provided in this Section provided such Participant completed more than 500
Hours of Service.
(l) Notwithstanding anything herein to the contrary, Participants
terminating for reasons of death, Total and Permanent Disability, or retirement
shall or shall not share in the allocations of the Employer's Contributions and
Forfeitures as provided in the Adoption Agreement. Notwithstanding the
foregoing, for Plan Years beginning after 1989, if this is a standardized Plan,
any Participants terminating for reasons of death, Total and Permanent
Disability, or retirement shall share in the allocations of the Employer's
Contributions and Forfeitures provided such Participant completed more than 500
Hours of Service.
(m) If a Former Participant is reemployed after five (5) consecutive
1-Year Breaks in Service, then separate accounts shall be maintained as follows:
(1) one account for nonforfeitable benefits attributable to pre-break
service; and
(2) one account representing his employer derived account balance in the
Plan attributable to post-break service.
(n) Notwithstanding any election in the Adoption Agreement to the
contrary, if this is a non-standardized Plan that would otherwise fail to meet
the requirements of Code Sections 401(a)(26), 410(b)(1), or 410(b)(2)(A)(i) and
the Regulations thereunder because Employer Contributions have not been
allocated to a sufficient number or percentage of Participants for a Plan Year,
then the following rules shall apply:
(1) The group of Participants eligible to share in the Employer's
contribution and Forfeitures for the Plan Year shall be expanded to
include the minimum number of Participants who would not otherwise be
eligible as are necessary to satisfy the applicable test specified above.
The specific participants who shall become eligible under the terms of
this paragraph shall be those who are actively employed on the last day of
the Plan Year and, when compared to similarly situated Participants, have
completed the greatest number of Hours of Service in the Plan Year.
(2) If after application of paragraph (1) above, the applicable test is
still not satisfied, then the group of Participants eligible to share in
the Employer's contribution and Forfeitures for the Plan Year shall be
further expanded to include the minimum number of Participants who are not
actively employed on the last day of the Plan Year as are necessary to
satisfy the applicable test. The specific Participants who shall become
eligible to share shall be those Participants, when compared to similarly
situated Participants, who have completed the greatest number of Hours of
Service in the Plan Year before terminating employment.
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Nothing in this Section shall permit the reduction of a
Participant's accrued benefit. Therefore any amounts that have previously
been allocated to Participants may not be reallocated to satisfy these
requirements. In such event, the Employer shall make an additional
contribution equal to the amount such affected Participants would have
received had they been included in the allocations, even if it exceeds the
amount which would be deductible under Code Section 404. Any adjustment to
the allocations pursuant to this paragraph shall be considered a
retroactive amendment adopted by the last day of the Plan Year.
4.4 MAXIMUM ANNUAL ADDITIONS
(a)(1) If the Participant does not participate in, and has never
participated in another qualified plan maintained by the Employer, or a
welfare benefit fund (as defined in Code Section 419(e)), maintained by
the Employer, or an individual medical account (as defined in Code Section
415(1)(2)) maintained by the Employer, which provides Annual Additions,
the Amount of Annual Additions which may be credited to the Participant's
accounts for any Limitation Year shall not exceed the lesser of the
Maximum Permissible Amount or any other limitation contained in this Plan.
If the Employer contribution that would otherwise be contributed or
allocated to the Participant's accounts would causae the Annual Additions
for the Limitation Year to exceed the Maximum Permissible Amount, the
amount contributed or allocated will be reduced so that the Annual
Additions for the Limitation Year will equal the Maximum Permissible
Amount.
(2) Prior to determining the Participant's actual Compensation for
the Limitation Year, the Employer may determine the Maximum
Permissible Amount for a Participant on the basis of a reasonable
estimation of the Participant's Compensation for the Limitation Year,
uniformly determined for all Participants similarly situated.
(3) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for such Limitation
Year shall be determined on the basis of the Participant's actual
compensation for such Limitation Year.
(4) If there is an excess amount pursuant to Section 4.4(a)(2) or
Section 4.5, the excess will be disposed of in one or more of the
following manners, as uniformly determined by the Plan Administrator
for all Participants similarly situated:
(i) Any Deferred Compensation or nondeductible Voluntary
Employee Contributions, to the extent they would reduce the
Excess Amount, will be returned to the Participant:
(ii) If, after the application of subparagraph (i), an Excess
Amount still exists, and the Participant is covered by the Plan
at the end of the
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<PAGE> 42
Limitation Year, the Excess Amount in the Participant's account
will be used to reduce Employer contributions including any
allocation of Forfeitures) for such Participant in the next
Limitation Year, and each succeeding Limitation Year if
necessary;
(iii) If, after the application of subparagraph (i), an Excess
Amount still exists, and the Participant is not covered by the
Plan at the end of a Limitation Year, the Excess Amount will be
held unallocated in a suspense account. The suspense account
will be applied to reduce future Employer contributions
(including allocation of any Forfeitures) for all remaining
Participants in the next Limitation Year, and each succeeding
Limitation Year if necessary;
(iv) If a suspense account is in existence at any time during a
Limitation Year pursuant to this Section, it will not
participate in the allocation of investment gains and losses. If
a suspense account is in existence at any time during a
particular limitation year, all amounts in the suspense account
must be allocated and reallocated to participants' accounts
before any employer contributions or any employee contributions
may be made to the plan for that limitation year. Excess
amounts may not be distributed to participants or former
participants.
(b)(1) This subsection applies if, in addition to this Plan, the
Participant is covered under another qualified Prototype defined
contribution plan maintained by the Employer, or a welfare benefit fund
(as defined in Code Section 419(e)) maintained by the Employer, or an
individual medical account (as defined in Code Section 415(1)(2))
maintained by the Employer, which provides Annual Additions, during any
Limitation Year. The Annual Additions which may be credited to a
Participant's accounts under this Plan for any such Limitation Year shall
not exceed the Maximum Permissible Amount reduced by the Annual Additions
credited to a Participant's accounts under the other plans and welfare
benefit funds for the same Limitation Year. If the Annual Additions with
respect to the Participant under other defined contribution plans and
welfare benefit funds maintained by the Employer are less than the Maximum
Permissible Amount and the Employer contribution that would otherwise be
contributed or allocated to the Participant's accounts under this Plan
would cause the Annual Additions for the Limitation Year to exceed this
limitation, the amount contributed or allocated will be reduced so that
the Annual Additions under all such plans and welfare benefit funds for
the Limitation Year will equal the Maximum Permissible Amount. If the
Annual Additions with respect to the Participant under such other defined
contribution plans and welfare benefit funds in the aggregate are equal to
or greater than the Maximum Permissible Amount, no amount will be
contributed or allocated to the Participant's account under this Plan for
the Limitation Year.
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<PAGE> 43
(2) Prior to determining the Participant's actual Compensation for
the Limitation Year, the Employer may determine the Maximum
Permissible Amount for a Participant in the manner described in
Section 4.4(a)(2).
(3) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the Limitation
Year will be determined on the basis of the Participant's actual
Compensation for the Limitation Year.
(4) If, pursuant to Section 4.4(b)(2) or as a result of the
allocation of Forfeitures, a Participant's Annual Additions under
this Plan and such other plans would result in an Excess Amount for a
Limitation Year, the Excess Amount will be deemed to consist of the
Annual Additions last allocated, except that Annual Additions
attributable to a welfare benefit fund or individual medical account
will be deemed to have been allocated first regardless of the actual
allocation date.
(5) If an Excess Amount was allocated to a Participant on an
allocation date of this Plan which coincides with an allocation date
of another plan, the Excess Amount attributed to this Plan will be
the product of:
(i) the total Excess Amount allocated as of such date, times
(ii) the ratio of (1) the Annual Additions allocated to the
Participant for the Limitation Year as of such date under this
Plan to (2) the total Annual Additions allocated to the
Participant for the Limitation Year as of such date under this
and all the other qualified defined contribution plans.
(6) Any Excess Amount attributed to this Plan will be disposed in the
manner described in Section 4.4(a)(4).
(c) If the Participant is covered under another qualified defined
contribution plan maintained by the Employer which is not a Prototype
Plan. Annual Additions which may be credited to the Participant's account
under this Plan for any Limitation Year will be limited in accordance with
Section 4.4(b), unless the Employer provides other limitations in the
Adoption Agreement.
(d) If the Employer maintains, or at any time maintained, a qualified
defined benefit plan covering any Participant in this Plan the sum of the
Participant's Defined Benefit Plan Fraction and Defined Contribution Plan
Fraction will not exceed 1.0 in any Limitation Year. The Annual Additions
which may be limited in accordance with the Limitation on Allocations
Section of the Adoption Agreement.
Except, however, if the Plans are standardized paired plans, the rate
of accrual in the defined benefit plan will be reduced to the extent
necessary so that the sum of the Defined Contribution Fraction and Defined
Benefit Fraction will equal 1.0.
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<PAGE> 44
(e) For purposes of applying the limitations of Code Section 415, the
transfer of funds from one qualified plan to another is not an "annual
addition". In addition, the following are not Employee contributions for
the purposes of Section 4.4(f)(1)(2); (1) rollover contributions (as
defined in Code Sections 402(a)(5), 403(a)(4), 403(b)(8) and
408(d)(3)); (2) repayments of loans made to a Participant from the Plan;
(3) repayments of distributions received by an Employee pursuant to Code
Section 411(a)(7)(B) (cash-outs): (4) repayments of distributions received
by an Employee pursuant to Code Section 411(a)(3)(D) (mandatory
contributions); and (5) Employee contributions to a simplified employee
pension excludable from gross income under Code Section 408(k)(6).
(f) For purposes of this Section, the following terms shall be
defined as follows:
(1) Annual Additions means the sum credited to a Participant's
accounts for any Limitation Year of (1) Employer contributions,
(2) effective with respect to "limitation years" beginning after
December 31, 1986. Employee contributions, (3) forfeitures, (4)
amounts allocated, after March 31, 1984, to an individual medical
account, as defined in Code Section 415(l)(2), which is part of a
pension or annuity plan maintained by the Employer and (5) amounts
derived from contributions paid or accrued after December 31, 1985,
in taxable years ending after such date, which are attributable to
post-retirement medical benefits allocated to the separate account of
a key employee (as defined in Code Section 419A(d)(3)) under a
welfare benefit fund (as defined in Code Section 419(e)) maintained
by the Employer. Except, however, the "415 Compensation" percentage
limitation referred to in paragraph (a)(2) above shall not apply to:
(1) any contribution for medical benefits (within the meaning of Code
Section 419A(f)(2)) after separation from service which is otherwise
treated as an "annual addition", or (2) any amount otherwise treated
as an "annual addition" under Code Section 415(l)(1). Notwithstanding
the foregoing, for "limitation years" beginning prior to January 1,
1987, only that portion of Employee contributions equal to the lesser
of Employee contributions in excess of six percent (6%) of "415
Compensation" or one-half of Employee contributions shall be
considered an "annual addition".
For this purpose, any Excess Amount applied under Sections
4.4(a)(4) and 4.4(b)(6) in the Limitation Year to reduce Employer
contributions shall be considered Annual Additions for such
Limitation Year.
(2) Compensation means a Participant's Compensation as elected in the
Adoption Agreement. However, regardless of any selection made in the
Adoption Agreement, "414(s) Compensation" shall exclude compensation
which is not currently includible in the Participant's gross income
by reason of the application of Code Sections 125, 402(e)(3),
402(h)(1)(B), or 403(b).
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<PAGE> 45
For limitation years beginning after December 31, 1991, for purposes of
applying the limitations of this Article, compensation for a limitation year is
the compensation actually paid or made available during such limitation year.
Notwithstanding the preceding sentence, Compensation for a Participant in a
defined contribution plan who is totally and permanently disabled (as defined in
Code Section 22(e)(3)) is the Compensation such Participant would have received
for the limitation year if the Participant had been paid at the rate of
Compensation paid immediately before becoming totally and permanently disabled;
such imputed compensation for the disabled Participant may be taken into account
only if the Participant is not a Highly Compensated Employee and contributions
made on behalf of such Participant are nonforfeitable when made.
(3) Defined Benefit Fraction means a fraction, the numerator of which is the
sum of the Participant's Projected Annual Benefits under all the defined benefit
plans (whether or not terminated) maintained by the Employer, and the
denominator of which is the lesser of 125 percent of the dollar limitation
determined for the Limitation Year under Code Sections 415(b) and (d) or 140
percent of his Highest Average Compensation including any adjustments under Code
Section 415(b).
Notwithstanding the above, if the Participant was a Participant as of the first
day of the first Limitation Year beginning after December 31, 1986, in one or
more defined benefit plans maintained by the Employer which were in existence on
May 6, 1986, the denominator of this fraction will not be less than 125 percent
of the sum of the annual benefits under such plans which the Participant had
accrued as of the end of the close of the last Limitation Year beginning before
January 1, 1987, disregarding any changes in the terms and conditions of the
plan after May 5, 1986. The preceding sentence applies only if the defined
benefit plans individually and in the aggregate satisfied the requirements of
Code Section 415 for all Limitation Years beginning before January 1, 1987.
Notwithstanding the foregoing, for any Top Heavy Plan Year, 100 shall be
substituted for 125 unless the extra minimum allocation is being made pursuant
to the Employer's election in FL in the Adoption Agreement. However, for any
Plan Year in which this Plan is a Super Top Heavy Plan, 100 shall be substituted
for 125 in any event.
(4) Defined Contribution Dollar Limitation means $30,000, or, if greater,
one-fourth of the defined benefit dollar limitation set forth in Code Section
415(b)(1) as in effect for the Limitation Year.
(5) Defined Contribution Fraction means a fraction, the numerator of which is
the sum of the Annual Additions to the Participant's account under all the
defined contribution plans (whether or not terminated) maintained by the
Employer for the current and all prior Limitation Years, (including the Annual
Additions
39
<PAGE> 46
attributable to the Participant's nondeductible voluntary employee contributions
to any defined benefit plans, whether or not terminated, maintained by the
Employer and the annual additions attributable to all welfare benefit funds, as
defined in Code Section 419(e), and individual medical accounts, as defined in
Code Section 415(1)(2), maintained by the Employer), and the denominator of
which is the sum of the maximum aggregate amounts for the current and all prior
Limitation Years of Service with the Employer (regardless of whether a defined
contribution plan was maintained by the Employer). The maximum aggregate amount
in any Limitation Year is the lesser of 125 percent of the Defined Contribution
Dollar Limitation or 35 percent of the Participant's Compensation for such year.
For Limitation Years beginning prior to January 1, 1987, the "annual addition"
shall not be recomputed to treat all Employee contributions as an Annual
Addition.
If the Employee was a Participant as of the end of the first day of the first
Limitation Year beginning after December 31, 1986, in one or more defined
contribution plans maintained by the Employer which were in existence on May 5,
1986, the numerator of this fraction will be adjusted if the sum of this
fraction and the Defined Benefit Fraction would otherwise exceed 1.0 under the
terms of this Plan. Under the adjustment, an amount equal to the product of (1)
the excess of the sum of the fractions over 1.0 times (2) the denominator of
this fraction, will be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they would be
computed as of the end of the last Limitation Year beginning before January 1,
1987, and disregarding any changes in the terms and conditions of the plan made
after May 5, 1986, but using the Code Section 415 limitation applicable to the
first Limitation Year beginning on or after January 1, 1987.
Notwithstanding the foregoing, for any Top Heavy Plan Year, 100 shall be
substituted for 125 unless the extra minimum allocation is being made pursuant
to the Employer's election in F1 of the Adoption Agreement. However, for any
Plan Year in which this Plan is a Super Top Heavy Plan, 100 shall be substituted
for 125 in any event.
(6) Employer means the Employer that adopts this Plan and all Affiliated
Employers, except that for purposes of this Section, Affiliated Employers shall
be determined pursuant to the modification made by Code Section 415(h).
(7) Excess Amount means the excess of the Participant's Annual Additions for
the Limitation Year over the Maximum Permissible Amount.
(8) Highest Average Compensation means the average Compensation for the three
consecutive Years of Service with the Employer that produces the highest
average. A Year of Service with the Employer is the 12 consecutive month period
defined in Section E1 of the Adoption Agreement which is used to determine
Compensation under the Plan.
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(9) Limitation Year means the Compensation Year (a 12 consecutive month
period) as elected by the Employer in the Adoption Agreement. All qualified
plans maintained by the Employer must use the same Limitation Year. If the
Limitation Year is amended to a different 12 consecutive month period, the
new Limitation Year must begin on a date within the Limitation Year in
which the amendment is made.
(10) Master or Prototype Plan means a plan the form of which is the subject
of a favorable opinion letter from the Internal Revenue Service.
(11) Maximum Permissible Amount means the maximum Annual Addition that may
be contributed or allocated to a Participant's account under the plan for
any Limitation Year, which shall not exceed the lesser of:
(i) the Defined Contribution Dollar Limitation, or
(ii) 25 percent of the Participant's Compensation for the Limitation
Year.
The Compensation Limitation referred to in (ii) shall not apply to
any contribution for medical benefits (within the meaning of Code
Sections 401(h) or 419A(f)(2)) which is otherwise treated as an
annual addition under Code Sections 415(l)(1) or 419A(d)(2).
If a short Limitation Year is created because of an amendment changing the
Limitation Year to a different 12 consecutive month period, the Maximum
Permissible Amount will not exceed the Defined Contribution Dollar
Contribution multiplied by the following fraction:
number of months in the short Limitation Year
12
(12) Projected Annual Benefit means the annual retirement benefit (adjusted
to an actuarially equivalent straight life annuity if such benefit is
expressed in a form other than a straight life annuity or qualified Joint
and Survivor Annuity) to which the Participant would be entitled under the
terms of the plan assuming:
(1) the Participant will continue employment until Normal Retirement
Age (or current age, if later), and
(ii) the Participant's Compensation for the current Limitation Year
and all other relevant factors used to determine benefits under the
Plan will remain constant for all future Limitation Years.
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(g) Notwithstanding anything contained in this Section to the
contrary, the limitations, adjustments and other requirements prescribed
in this Section shall at all times comply with the provisions of Code
Section 415 and the Regulations thereunder, the terms of which are
specifically incorporated herein by reference.
4.5 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If as a result of the allocation of Forfeitures, a reasonable
error in estimating a Participant's annual Compensation, 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
Participant under the limits of Section 4.4, or other facts and
circumstances to which Regulation 1.415-6(b)(6) shall be applicable, the
"annual additions" under this Plan would cause the maximum provided in
Section 4.4 to be exceeded, the Administrator shall treat the excess in
accordance with Section 4.4(a)(4).
4.6 TRANSFERS FROM QUALIFIED PLANS
(a) If specified in the Adoption Agreement and with the consent of
the Administrator, amounts may be transferred from other qualified plans,
provided that the trust from which such funds are transferred permits the
transfer to be made and the transfer will not jeopardize the tax exempt
status of the Plan or create adverse tax consequences for the Employer.
The amounts transferred shall be set up in a separate account herein
referred to as a "Participant's Rollover Account". Such account shall be
fully Vested at all times and shall not be subject to forfeiture for any
reason.
(b) Amounts in a Participant's Rollover Account shall be held by the
Trustee pursuant to the provisions of this Plan and may not be withdrawn
by, or distributed to the Participant, in whole or in part, except as
provided in Paragraphs (c) and (d) of this Section.
(c) Amounts attributable to elective contributions (as defined in
Regulation 1.401(k)-1(g)(4)), including amounts treated as elective
contributions, which are transferred from another qualified plan in a
plan-to-plan transfer shall be subject to the distribution limitations
provided for in Regulation 1.401,(k)-1(d).
(d) At Normal Retirement Date, or such other date when the Participant
or his Beneficiary shall be entitled to receive benefits, the fair market
value of the Participant's Rollover Account shall be used to provide
additional benefits to the Participant or his Beneficiary. Any
distributions of amounts held in a Participant's Rollover Account shall be
made in a manner which is consistent with and satisfies the provisions of
Section 6.5, including, but not limited to, all notice and consent
requirements of Code Sections 411(a)(11) and 417 and the Regulations
thereunder. Furthermore, such amounts shall be considered as part of a
Participant's benefit in determining whether an involuntary cash-out of
benefits without Participant consent may be made.
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(e) For purposes of this Section, the term "qualified plan" shall
mean any tax qualified plan under Code Section 401(a). The term "amounts
transferred from other qualified plans" shall mean: (i) amounts transferred
to this Plan directly from another qualified plan; (ii) lump-sum
distributions received by an Employee from another qualified plan which are
eligible for tax free rollover to a qualified plan and which are
transferred by the Employee to this Plan within sixty (60) days following
his receipt thereof; (iii) amounts transferred to this Plan from a conduit
individual retirement account provided that the conduit individual
retirement account has no assets other than assets which (A) were
previously distributed to the Employee by another qualified plan as a
lump-sum distribution (B) were eligible for tax-free rollover to a
qualified plan and (C) were deposited in such conduit individual retirement
account within sixty (60) days of receipt thereof and other than earnings
on said assets; and (iv) amounts distributed to the Employee from a conduit
individual retirement account meeting the requirements of clause (iii)
above and transferred by the Employee to this Plan within sixty (60) days
of his receipt thereof from such conduit individual retirement account.
(f) Prior to accepting any transfers to which this Section applies,
the Administrator may require the Employee to establish that the amounts to
be transferred to this Plan meet the requirements of this Section and may
also require the Employee to provide an opinion of counsel satisfactory to
the Employer that the amounts to be transferred meet the requirements of
this Section.
(g) Notwithstanding anything herein to the contrary, a transfer
directly to this Plan from another qualified plan (or a transaction having
the effect of such a transfer) shall only be permitted if it will not
result in the elimination or reduction of any "Section 411(d)(6) protected
benefit" as described in Section 8.1.
4.7 VOLUNTARY CONTRIBUTIONS
(a) If this is an amendment to a Plan that had previously allowed
voluntary Employee contributions, then, except as provided in 4.7(b) below,
this Plan will not accept voluntary Employee contributions for Plan Years
beginning after the Plan Year in which this Plan is adopted by the
Employer.
(b) For 401(k) Plans, if elected in the Adoption Agreement, each
Participant may, at the discretion of the Administrator in a
nondiscriminatory manner, elect to voluntarily contribute a portion of his
compensation earned while a Participant under this Plan. Such contributions
shall be paid to the Trustee within a reasonable period of time but in no
event later than 90 days after the receipt of the contribution.
(c) The balance in each Participant's Voluntary Contribution Account
shall be fully Vested at all times and shall not be subject to Forfeiture
for any reason.
(d) A Participant may elect to withdraw his voluntary contributions
from his Voluntary Contribution Account and the actual earnings thereon in
a manner which is
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consistent with and satisfies the provisions of Section 6.5, including, but
not limited to all notice and consent requirements of Code Sections
411(a)(11) and 417 and the Regulations thereunder. If the Administrator
maintains sub-accounts with respect to voluntary contributions (and
earnings thereon) which were made on or before a specified date, a
Participant shall be permitted to designate which sub-account shall be the
source for his withdrawal. No Forfeitures shall occur solely as a result of
an Employee's withdrawal of Employee contributions.
In the event such a withdrawal is made, or in the event a Participant
has received a hardship distribution pursuant to Regulation
1.401(k)-1(d)(2)(iii)(B) from any plan maintained by the Employer, then
such Participant shall be barred from making any voluntary contributions
for a period of (12) twelve months after receipt of the withdrawal or
distribution.
(e) At Normal Retirement Date, or such other date when the Participant
or his Beneficiary shall be entitled to receive benefits, the fair market
value of the Voluntary Contribution Account shall be used to provide
additional benefits to the Participant or his Beneficiary.
4.8 PARTICIPANT DIRECTED INVESTMENTS
(a) If elected in the Adoption Agreement, all Participants may direct
the Trustee as to the investment of all or a portion of any one or more of
their individual account balances. Participants may direct the Trustee in
writing to invest their account in specific Investment Options as permitted
by the Administrator provided such investments are in accordance with the
Department of Labor regulations and are permitted by the Plan. That portion
of the account of any Participant so directing will thereupon be considered
a Directed Investment Account.
(b) The Administrator shall establish a procedure, to be applied in a
uniform any nondiscriminatory manner, setting forth the permissible
investment options under this Section, how often changes between
investments may be made, whether Participants may communicate directly with
the Participant Recordkeeper by telephone, and any other limitations that
the Administrator shall impose on a Participant's right to direct
investments. Union Bank of California, as Trustee or Participant
Recordkeeper, shall have no liability for errors caused by Participants in
utilizing a telephone response system if written confirmations are sent to
Participants and no corrections are requested within 30 days of mailing of
such written confirmation.
4.9 QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS
(a) If this is an amendment to a Plan that previously permitted
deductible voluntary contributions, then each Participant who made a
"Qualified Voluntary Employee Contribution" within the meaning of Code
Section 219(e)(2) as it existed prior
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to the enactment of the Tax Reform Act of 1986, shall have his contribution
held in a separate Qualified Voluntary Employee Contribution Account which
shall be fully Vested at all times. Such contributions, however, shall not
be permitted if they are attributable to taxable years beginning after
December 31, 1986.
(b) A Participant may, upon written request deliver to the
Administrator, make withdrawals from his Qualified Voluntary Employee
Contribution Account. Any distribution shall be made in a manner which is
consistent with and satisfies the provisions of Section 6.5, including,
but not limited to, all notice and consent requirements of Code Sections
411(a)(11) and 417 and the Regulations thereunder.
(c) At Normal Retirement Date, or such other date when the
Participant or his Beneficiary shall be entitled to receive benefits, the
fair market value of the Qualified Voluntary Employee Contribution Account
shall be used to provide additional benefits to the Participant or his
Beneficiary.
4.10 ACTUAL CONTRIBUTION PERCENTAGE TESTS
In the event this Plan previously provided for voluntary or mandatory
Employee contributions, then, with respect to Plan Years beginning after
December 31, 1986, such contributions must satisfy the provisions of Code
Section 401(m) and the Regulations thereunder.
4.11 INTEGRATION IN MORE THAN ONE PLAN
If the Employer and/or an Affiliated Employer maintain qualified retirement
plans integrated with Social Security such that any Participant in this Plan
is covered under more than one of such plans, then such plans will be
considered to be one plan and will be considered to be integrated if the extent
of the integration of all such plans does not exceed 100%. For purposes of the
preceding sentence, the extent of integration of a plan is the ratio, expressed
as a percentage, which the actual benefits, benefit rate, offset rate, or
employer contribution rate, whatever is applicable, under the Plan bears to the
limitation applicable to such Plan. If the Employer maintains two or more
standardized paired plans, only one plan may be integrated with Social Security.
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
The Trustee, as of each Valuation Date, shall determine the net worth of
the assets comprising the Trust Fund as it exists on the Valuation Date. In
determining such net worth, the Trustee shall value the assets comprising the
Trust Fund at their fair market value as of the
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Valuation Date and shall deduct all expenses for which the Trustee has not yet
obtained reimbursement from the Employer or the Trust Fund.
5.2 METHOD OF VALUATION
In determining the fair market value of securities held in the Trust Fund
which are listed on a registered stock exchange, the Trustee shall value the
same at the prices they were last traded on such exchange preceding the close
of business on the Valuation Date. If such securities were not traded on the
Valuation Date, or if the exchange on which they are traded was not open for
business on the Valuation Date, then the securities shall be valued at the
prices at which they were last traded prior to the Valuation Date. Any unlisted
security held in the Trust Fund shall be valued at its bid price next preceding
the close of business on the Valuation Date, which bid price shall be obtained
from a registered broker or an investment banker.
Notwithstanding anything herein to the contrary, in the event there are
Trust assets, the value of which is not readily determinable, the Employer
shall have sole responsibility for the valuation of such assets and the Trustee
shall incur no liability for inaccurate valuations based on the Trustee's good
faith reliance on valuation information provided by Employer or Employer's
agent. The Employer shall provide the Trustee with an annual updated valuation
as of each Anniversary Date of all such Trust assets, the value of which is not
readily determinable on an established market and neither the Employer nor any
Participant or Beneficiary shall have any right to demand a more current
valuation of such assets, regardless of whether such assets are held in a
segregated account or a pooled account.
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate his employment with the Employer and
retire for the purposes hereof on or after his Normal Retirement Date or Early
Retirement Date. Upon such Normal Retirement Date or Early Retirement Date, all
amounts credited to such Participant's Combined Account shall become
distributable. However, a Participant may postpone the termination of his
employment with the Employer to a later date, in which event the participation
of such Participant in the Plan, including the right to receive allocations
pursuant to Section 4.3, shall continue until his Late Retirement Date. Upon a
Participant's Retirement Date, or as soon thereafter as is practicable, the
Administrator shall direct the distribution of all amounts credited to such
Participant's Combined Account in accordance with Section 6.5.
6.2 DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before his Retirement Date or
other termination of his employment, all amounts credited to such
Participant's Combined Account shall become fully Vested. The
Administrator shall direct, in accordance with
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the provisions of Sections 6.6 and 6.7, the distribution of the deceased
Participant's accounts to the Participant's Beneficiary.
(b) Upon the death of a Former Participant, the Administrator shall direct
in accordance with the provisions of Sections 6.6 and 6.7, the distribution of
any remaining amounts credited to the accounts of such deceased Former
Participant to such Former Participant's Beneficiary.
(c) The Administrator may require such proper proof of death and such
evidence of the right of any person to receive payment of the value of the
account of a deceased Participant or Former Participant as the Administrator may
deem desirable. The Administrator's determination of death and of the right of
any person to receive payment shall be conclusive.
(d) Unless otherwise elected in the manner prescribed in Section 6.6, the
Beneficiary of the Pre-Retirement Survivor Annuity shall be the Participant's
spouse. Except, however, the Participant may designate a Beneficiary other than
his spouse for the Pre-Retirement Survivor Annuity if:
(1) the Participant and his spouse have validly waived the Pre-Retirement
Survivor Annuity in the manner prescribed in Section 6.6, and the spouse
has waived his or her right to the Participant's Beneficiary, or
(2) the Participant is legally separated or has been abandoned (within the
meaning of local law) and the Participant has a court order to such effect
(and there is no "qualified domestic relations order" as defined in Code
Section 414(p) which provides otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a Beneficiary shall be made on a form
satisfactory to the Administrator. A Participant may at any time revoke his
designation of a beneficiary or change his Beneficiary by filing written notice
of such revocation or change with the Administrator. However, the Participant's
spouse must again consent in writing to any change in Beneficiary unless the
original consent acknowledged that the spouse had the right to limit consent
only to a specific Beneficiary and that the spouse voluntarily elected to
relinquish such right. The Participant may, at any time, designate a Beneficiary
for death benefits payable under the Plan that are in excess of the
Pre-Retirement Survivor Annuity. In the event no valid designation of
Beneficiary exists at the time of the Participant's death, the death benefit
shall be payable to his estate.
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(e) If the Plan provides an insured death benefit and a Participant
dies before any insurance coverage to which he is entitled under the Plan
is effected, his death benefit from such insurance coverage shall be
limited to the standard rated premium which was or should have been used
for such purpose.
(f) In the event of any conflict between the terms of this Plan and
the terms of any Contract issued hereunder, the Plan provisions shall
control.
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
In the event of a Participant's Total and Permanent Disability prior to his
Retirement Date or other termination of his employment, all amounts credited to
such Participant's Combined Account shall become fully Vested. In the event of
a Participant's Total and Permanent Disability, the Administrator, in
accordance with the provisions of Sections 6.5 and 6.7, shall direct the
distribution to such Participant of all amounts credited to such Participant's
Combined Account as though he had retired.
6.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) On or before the Anniversary Date, or other Valuation Date,
coinciding with or subsequent to the termination of a Participant's
employment for any reason other than retirement, death, or Total and
Permanent Disability, the Administrator may direct that the amount of the
Vested portion of such Terminated Participant's Combined Account be
segregated and invested separately. In the event the Vested portion of a
Participant's Combined Account is not segregated, the amount shall remain
in a separate account for the Terminated Participant and share in
allocations pursuant to Section 4.3 until such time as a distribution is
made to the Terminated Participant. The amount of the Participant's
Combined Account which is not Vested may be credited to a separate account
(which will always share in gains and losses of the Trust Fund) and at
such time as the amount becomes a Forfeiture shall be treated in
accordance with the provisions of the Plan regarding Forfeitures.
Distribution of the funds due to a Terminated Participant shall be
made on the occurrence of an event which would result in the distribution
had the Terminated Participant remained in the employ of the Employer (upon
the Participant's death, Total and Permanent Disability, Early or Normal
Retirement). However, at the election of the Participant, the Administrator
shall direct that the entire Vested portion of the Terminated Participant's
Combined Account to be payable to such Terminated Participant provided the
conditions, if any, set forth in the Adoption Agreement have been
satisfied. Any distribution under this paragraph shall be made in a manner
which is consistent with and satisfies the provisions of Section 6.5,
including but not limited to, all notice and consent requirements of Code
Sections 411(a)(11) and 417 and the Regulations thereunder.
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Notwithstanding the above, if the value of a Terminated Participant's
Vested benefit derived from Employer and Employee contributions does not exceed,
and at the time of any prior distribution, has never exceeded $3,500, the
Administrator shall direct that the entire Vested benefit be paid to such
Participant in a single lump-sum without regard to the consent of the
Participant or the Participant's spouse. A Participant's Vested benefit shall
not include Qualified Voluntary Employee Contributions within the meaning of
Code Section 72(o)(5)(B) for Plan years beginning prior to January 1, 1989.
(b) The Vested portion of any Participant's Account shall be a percentage
of such Participant's Account determined on the basis of the Participant's
number of Years of Service according to the vesting schedule specified in the
Adoption Agreement.
(c) For any Top Heavy Plan Year, one of the minimum top heavy vesting
schedules as elected by the Employer in the Adoption Agreement will
automatically apply to the Plan. The minimum top heavy vesting schedule applies
to all benefits within the meaning of Code Section 411(a)(7) except those
attributable to Employee contributions, including benefits accrued before the
effective date of Code Section 416 and benefits accrued before the Plan became
top heavy. Further, no decrease in a Participant's Vested percentage may occur
in the event that the Plan's status as top heavy changes for an Plan Year.
However, this Section does not apply to the account balances of any Employee who
does not have an Hour of Service after the Plan has initially become top heavy
and the Vested percentage of such Employee's Participant's Account shall be
determined without regard to this Section 6.4(c).
If in any subsequent Plan Year, the Plan ceases to be a Top Heavy Plan, the
Administrator shall continue to use the vesting schedule in effect while the
Plan was a Top Heavy Plan for each Employee who had an Hour of Service during a
Plan Year when the Plan was Top Heavy.
(d) Notwithstanding the vesting schedule above, upon the complete
discontinuance on the Employer's contributions to the Plan or upon any full or
partial termination of the Plan, all amounts credited to the account of any
affected Participant shall become 100% Vested and shall not thereafter be
subject to Forfeiture.
(e) If this is an amended or restated Plan, then notwithstanding the
vesting schedule specified in the Adoption Agreement, the Vested percentage of a
Participant's Account shall not be less than the Vested percentage attained as
of the later of the effective date or adoption date of this amendment and
restatement. The computation of a Participant's nonforfeitable percentage of his
interest in the Plan shall not be reduced as the result of any direct or
indirect amendment to this Article, or due to changes in the Plan's status as a
Top Heavy Plan.
(f) If the Plan's vesting schedule is amended, or if the Plan is amended in
any way that directly or indirectly affects the computation of the Participant's
nonforfeitable
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percentage or if the Plan is deemed amended by an automatic change to a top
heavy vesting schedule, then each Participant with at least 3 Years of Service
as of the expiration date of the election period may elect to have his
nonforfeitable percentage computed under the Plan without regard to such
amendment or change. Notwithstanding the foregoing, for Plan Years beginning
before January 1, 1989, or with respect to Employees who fail to complete at
least one (1) Hour of Service in a Plan Year beginning after December 31, 1988,
five (5) shall be substituted for three (3) in the preceding sentence. If a
Participant fails to make such election, then such Participant shall be subject
to the new vesting schedule. The Participant's election period shall commence
on the adoption date of the amendment and shall end 60 days after the latest of:
(1) the adoption date of the amendment.
(2) the effective date of the amendment, or
(3) the date the Participant receives written notice of the amendment from
the Employer or Administrator.
(g)(l) If any Former Participant shall be reemployed by the Employer
before a 1-Year Break in Service occurs, he shall continue to participate in
the Plan in the same manner as if such termination had not occurred.
(2) If any Former Participant shall be reemployed by the Employer before
five (5) consecutive 1-Year Breaks in Service, and such Former Participant
had received a distribution of his entire Vested interest prior to his
reemployment, his forfeited account shall be reinstated only if he repays
the full amount distributed to him before the earlier of five (5) years
after the first date on which the Participant is subsequently reemployed
by the Employer or the close of the first period of 5 consecutive 1-Year
Breaks in Service commencing after the distribution. If a distribution
occurs for any reason other than a separation from service, the time for
repayment may not end earlier than five (5) years after the date of
separation. In the event the Former Participant does repay the full
amount distributed to him, the undistributed portion of the Participant's
Account must be restored in full, unadjusted by any gains or losses
occurring subsequent to the Anniversary Date or other Valuation Date
preceding his termination. If an employee receives a distribution pursuant
to this section and the employee resumes employment covered under this
plan, the employee's employer-derived account balance will be restored to
the amount on the date of distribution if the employee repays to the plan
the full amount of the distribution attributable to employer contributions
before the earlier of 5 years after the first date on which the
participant is subsequently re-employed by the employer, or the date the
participant incurs 5 consecutive 1-year breaks in service following the
date of the distribution. If a non-Vested Former Participant was deemed to
have received a distribution and such Former Participant is reemployed by
the Employer before five (5)
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consecutive 1-Year Breaks in Service, then such Participant will be deemed
to have repaid the deemed distribution as of the date of reemployment.
(3) If any Former Participant is reemployed after a 1-Year Break in Service
has occurred. Years of Service shall include Years of Service prior to his
1-Year Break in Service subject to the following rules:
(i) Any Former Participant who under the Plan does not have a
nonforfeitable right to any interest in the Plan resulting from
Employer contributions shall lose credits if his consecutive 1-Year
Breaks in Service equal or exceed the greater of (A) five (5) or (B)
the aggregate number of his pre-break Years of Service;
(ii) After five (5) consecutive 1-Year Breaks in Service, a Former
Participant's Vested Account balance attributable to pre-break service
shall not be increased as a result of post-break service;
(iii) A Former Participant who is reemployed and who has not had his
Years of Service before a 1-Year Break in Service disregarded pursuant
to (i) above, shall participate in the Plan as of his date of
reemployment;
(iv) If a Former Participant completes a Year of Service (a 1-Year
Break in Service previously occurred, but employment had not
terminated), he shall participate in the Plan retroactively from the
first day of the Plan Year during which he completes one (1) Year of
Service.
(h) In determining Years of Service for purposes of vesting under the
Plan, Years of Service shall be excluded as specified in the Adoption
Agreement.
6.5 DISTRIBUTION OF BENEFITS
(a)(1) Unless otherwise elected as provided below, a Participant who
is married on the "annuity starting date" and who does not die before the
"annuity starting date" shall receive the value of all of his benefits in
the form of a Joint and Survivor Annuity. The Joint and Survivor Annuity is
an annuity that commences immediately and shall be equal in value to a
single life annuity. Such joint and survivor benefits following the
Participant's death shall continue to the spouse during the spouse's
lifetime at a rate equal to 50% of the rate at which such benefits were
payable to the Participant. This Joint and Survivor Annuity shall be
considered the designated qualified Joint and Survivor Annuity and
automatic form of payment for the purposes of this Plan. However, the
Participant may elect to receive a smaller annuity benefit with
continuation of payments to the spouse at a rate of seventy-five percent
(75%) or one hundred percent (100%) of the rate payable to a Participant
during his lifetime which alternative Joint and Survivor Annuity shall be
equal in value to the automatic Joint and 50% Survivor Annuity. An
unmarried
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Participant shall receive the value of his benefit in the form of a life
annuity. Such unmarried Participant, however, may elect in writing to waive the
life annuity. The election must comply with the provisions of this Section as
if it were an election to waive the Joint and Survivor Annuity by a married
Participant, but without the spousal consent requirement. The Participant may
elect to have any annuity provided for in this Section distributed upon the
attainment of the "earliest retirement age" under the Plan. The "earliest
retirement age" is the earliest date on which, under the Plan, the Participant
could elect to receive retirement benefits.
(2) Any election to waive the Joint and Survivor Annuity must be made by
the Participant in writing during the election period and be consented to
by the Participant's spouse. If the spouse is legally incompetent to give
consent, the spouse's legal guardian, even is such guardian is the
Participant, may give consent. Such election shall designate a Beneficiary
(or a form of benefits) that may not be changed without spousal consent
(unless the consent of the spouse expressly permits designations by the
Participant without the requirement of further consent by the spouse). Such
spouse's consent shall be irrevocable and must acknowledge the effect of
such election and be witnessed by a Plan representative or a notary public.
Such consent shall not be required if it is established to the satisfaction
of the Administrator that the required consent cannot be obtained because
there is no spouse, the spouse cannot be located, or other circumstances
that may be prescribed by Regulations. The election made by the Participant
and consented to by his spouse may be revoked by the Participant in writing
without the consent of the spouse at any time during the election period.
The number of revocations shall not be limited. Any new election must
comply with the requirements of this paragraph. A former spouse's waiver
shall not be binding on a new spouse.
(3) The election period to waive the Joint and Survivor Annuity shall be
the 90 day period ending on the "annuity starting date."
(4) For the purposes of this Section and Section 6.6, the "annuity
starting date" means the first day of the first period for which an amount
is paid as an annuity, or, in the case of a benefit not payable in the form
of an annuity, the first day on which all events have occurred which
entitles the Participant to such benefit.
(5) With regard to the election, the Administrator shall provide to the
Participant no less than 30 days and no more than 90 days before the
"annuity starting date" a written explanation of:
(i) the terms and conditions of the Joint and Survivor Annuity, and
(ii) the Participant's right to make and the effect of an election to
waive the Joint and Survivor Annuity, and
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(iii) the right of the Participant's spouse to consent to any election
to waive the Joint and Survivor Annuity, and
(iv) the right of the Participant to revoke such election, and the
effect of such revocation.
(b) In the event a married Participant duly elects pursuant to paragraph
(a)(2) above not to receive his benefit in the form of a Joint and Survivor
Annuity, or if such Participant is not married, in the form of a life annuity,
the Administrator, pursuant to the election of the Participant, shall direct the
distribution to a Participant or his Beneficiary any amount to which he is
entitled under the Plan in one or more of the following methods which are
permitted pursuant to the Adoption Agreement:
(1) One lump-sum payment in cash or in property;
(2) Payments over a period certain in monthly, quarterly, semiannual, or
annual cash installments. In order to provide such installment payments,
the Administrator may direct that the Participant's interest in the Plan be
segregated and invested separately, and that the funds in the segregated
account be used for the payment of the installments. The period over which
such payment is to be made shall not extend beyond the Participant's life
expectancy (or the life expectancy of the Participant and his designated
Beneficiary);
(3) Purchase of or providing an annuity. However, such annuity may not be
in any form that will provide for payments over a period extending beyond
either the life of the Participant (or the lives of the Participant and his
designated Beneficiary) or the life expectancy of the Participant (or the
life expectancy of the Participant and his designated Beneficiary).
(c) The present value of a Participant's Joint and Survivor Annuity derived
from Employer and Employee contributions may not be paid without his written
consent if the value exceeds, or has ever exceeded at the time of any prior
distribution, $3,500. Further, the spouse of a Participant must consent in
writing to any immediate distribution. If the value of the Participant's benefit
derived from Employer and Employee contributions does not exceed $3,500 and has
never exceeded $3,500 at the time of any prior distribution, the Administrator
may immediately distribute such benefit without such Participant's consent. No
distribution may be made under the preceding sentence after the "annuity
starting date" unless the Participant and his spouse consent in writing to such
distribution. Any written consent required under this paragraph must be obtained
not more than 90 days before commencement of the distribution and shall be made
in a manner consistent with Section 6.5(a)(2).
(d) Any distribution to a Participant who has a benefit which exceeds, or
has ever exceeded at the time of any prior distribution, $3,500 shall require
such Participant's
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consent if such distribution commences prior to the later of his Normal
Retirement Age or age 62. With regard to this required consent:
(1) No consent shall be valid unless the Participant has received a
general description of the material features and an explanation of
the relative values of the optional forms of benefit available under
the Plan that would satisfy the notice requirements of Code Section
417.
(2) The Participant must be informed of his right to defer receipt of
the distribution. If a Participant fails to consent, it shall be
deemed an election to defer the commencement of payment of any
benefit. However, any election to defer the receipt of benefits
shall not apply with respect to distributions which are required
under Section 6.5(e).
(3) Notice of the rights specified under this paragraph shall be
provided no less than 30 days and no more than 90 days before the
"annuity starting date".
(4) Written consent of the Participant to the distribution must not be
made before the Participant receives the notice and must not be made
more than 90 days before the "annuity starting date".
(5) No consent shall be valid if a significant detriment is imposed
under the Plan on any Participant who does not consent to the
distribution.
(e) Notwithstanding any provision in the Plan to the contrary, the
distribution of a Participant's benefits, made on or after January 1, 1985,
whether under the Plan or through the purchase of an annuity Contract, shall be
made in accordance with the following requirements and shall otherwise comply
with Code Section 401(a)(9) and the Regulations thereunder (including
Regulation Section 1.401(a)(9)-2), the provisions of which are incorporated
herein by reference:
(1) A Participant's benefits shall be distributed to him not later than
April 1st of the calendar year following the later of (i) the
calendar year in which the Participant attains age 70-1/2 or (ii)
the calendar year in which the Participant retires, provided,
however, that this clause (ii) shall not apply in the case of a
Participant who is a "five (5) percent owner" at any time during the
five (5) Plan Year period ending in the calendar year in which he
attains age 70-1/2 or, in the case of a Participant who becomes a
"five (5) percent owner" during any subsequent Plan Year, clause
(ii) shall no longer apply and the required beginning date shall be
the April 1st of the calendar year following the calendar year in
which such subsequent Plan Year ends. Alternatively, distributions
to a Participant must begin no later than the applicable April 1st
as determined under the preceding sentence and must be made over the
life of the Participant (or the lives of the Participant and the
Participant's designated Beneficiary) or, if benefits
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are paid in the form of a Joint and Survivor Annuity, the life
expectancy of the Participant (or the life expectancies of the
Participant and his designated Beneficiary) in accordance with
Regulations. For Plan Years beginning after December 31, 1988,
clause (ii) above shall not apply to any Participant unless the
Participant has attained age 70-1/2 before January 1, 1988 and was
not a "five (5) percent owner" at any time during the Plan Year
ending with or within the calendar year in which the Participant
attained age 66-1/2 or any subsequent Plan Year.
(2) Distributions to a Participant and his Beneficiaries shall only be
made in accordance with the incidental death benefit requirements
of Code Section 401(a)(9)(G) and the Regulations thereunder.
Additionally, for calendar years beginning before 1989,
distributions may also be made under an alternative method which
provides that the then present value of the payments to be made over
the period of the Participant's life expectancy exceeds fifty
percent (50%) of the then present value of the total payments to be
made to the Participant and his Beneficiaries.
(f) For purposes of this Section, the life expectancy of a Participant
and a Participant's spouse (other than in the case of a life annuity) shall be
redetermined annually in accordance with Regulations if permitted pursuant to
the Adoption Agreement. If the Participant or the Participant's spouse may elect
whether recalculations will be made, then the election, once made, shall be
irrevocable. If no election is made by the time distributions must commence,
then the life expectancy of the Participant and the Participant's spouse shall
not be subject to recalculation. Life expectancy and joint and last survivor
expectancy shall be computed using the return multiples in Tables V and VI of
Regulation 1.72-9.
(g) All annuity Contracts under this Plan shall be non-transferable
when distributed. Furthermore, the terms of any annuity Contract purchased and
distributed to a Participant or spouse shall comply with all of the
requirements of this Plan.
(h) Subject to the spouse's right of consent afforded under the Plan,
the restrictions imposed by this Section shall not apply if a Participant has,
prior to January 1, 1984, made a written designation to have his retirement
benefit paid in an alternative method acceptable under Code Section 401(a) as
in effect prior to the enactment of the Tax Equity and Fiscal Responsibility
Act of 1982.
(i) If a distribution is made at a time when a Participant who has not
terminated employment is not fully Vested in his Participant's Account and the
Participant may increase the Vested percentage in such account:
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(1) A separate account shall be established for the Participant's
interest in the Plan as of the time of the distribution, and
(2) At any relevant time the Participant's Vested portion of the
separate account shall be equal to an amount ("X") determined by the
formula:
X equals P(AB plus (RxD)) - (R x D)
For purposes of applying the formula: P is the Vested percentage at
the relevant time. AB is the account balance at the relevant time. D
is the amount of distribution, and R is the ratio of the account
balance at the relevant time to the account balance after
distribution.
6.6 DISTRIBUTION OF BENEFITS UPON DEATH
(a) Unless otherwise elected as provided below, a Vested
Participant who dies before the annuity starting date and who has a
surviving spouse shall have the Pre-Retirement Survivor Annuity paid to
his surviving spouse. The Participant's spouse may direct that payment of
the Pre-Retirement Survivor Annuity commence within a reasonable period
after the Participant's death. If the spouse does not so direct, payment
of such benefit will commence at the time the Participant would have
attained the later of his Normal Retirement Age or age 62. However, the
spouse may elect a later commencement date. Any distribution to the
Participant's spouse shall be subject to the rules specified in Section
6.6(h).
(b) Any election to waive the Pre-Retirement Survivor Annuity
before the Participant's death must be made by the Participant in writing
during the election period and shall require the spouse's irrevocable
consent in the same manner provided for in Section 6.5(a)(2). Further, the
spouse's consent must acknowledge the specific nonspouse Beneficiary.
Notwithstanding the foregoing, the nonspouse Beneficiary need not be
acknowledged, provided the consent of the spouse acknowledges that the
spouse has the right to limit consent only to a specific Beneficiary and
that the spouse voluntarily elects to relinquish such right.
(c) The election period to waive the Pre-Retirement Survivor
Annuity shall begin on the first day of the Plan Year in which the
Participant attains age 35 and end on the date of the Participant's death.
An earlier waiver (with spousal consent) may be made provided a written
explanation of the Pre-Retirement Survivor Annuity is given to the
Participant and such waiver becomes invalid at the beginning of the Plan
Year in which the Participant turns age 35. In the event a Vested
Participant separates from service prior to the beginning of the election
period, the election period shall begin on the date of such separation
from service.
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(d) With regard to the election, the Administrator shall provide
each Participant within the applicable period, with respect to such
Participant (and consistent with Regulations), a written explanation of
the Pre-Retirement Survivor Annuity containing comparable information to
that required pursuant to Section 6.5(a)(5). For the purposes of this
paragraph, the term "applicable period" means, with respect to a
Participant, whichever of the following periods ends last:
(1) The period beginning with the first day of the Plan Year in
which the Participant attains age 32 and ending with the close of
the Plan Year preceding the Plan Year in which the Participant
attains age 35;
(2) A reasonable period after the individual becomes a
Participant. For this purpose, in the case of an individual who
becomes a Participant after age 32, the explanation must be
provided by the end of the three-year period beginning with the
first day of the first Plan Year for which the individual is a
Participant;
(3) A reasonable period ending after the Plan no longer fully
subsidizes the cost of the Pre-Retirement Survivor Annuity with
respect to the Participant;
(4) A reasonable period ending after Code Section 401(a)(11)
applies to the Participant; or
(5) A reasonable period after separation from service in the case
of a Participant who separates before attaining age 35. For this
purpose, the Administrator must provide the explanation beginning
one year before the separation from service and ending one year
after separation.
(e) The Pre-Retirement Survivor Annuity provided for in this
Section shall apply only to Participants who are credited with an Hour
of Service on or after August 23, 1984. Former Participants who are not
credited with an Hour of Service on or after August 23, 1984 shall be
provided with rights to the Pre-Retirement Survivor Annuity in
accordance with Section 303(e)(2) of the Retirement Equity Act of 1984.
(f) If the value of the Pre-Retirement Survivor Annuity derived
from Employer and Employee contributions does not exceed $3,500 and has
never exceeded $3,500 at the time of any prior distribution, the
Administrator shall direct the immediate distribution of such amount to
the Participant's spouse. No distribution may be made under the
preceding sentence after the annuity starting date unless the spouse
consents in writing. If the value exceeds, or has ever exceeded at the
time of any prior distribution, $3,500, an immediate distribution of the
entire amount may be made to the surviving spouse, provided such
surviving spouse consents in writing to such distribution. Any written
consent required under this paragraph must be obtained not more than 90
days before commencement of the distribution and shall be made in a
manner consistent with Section 6.5(a)(2).
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(g)(1) In the event there is an election to waive the
Pre-Retirement Survivor Annuity, and for death benefits in excess of the
Pre-Retirement Survivor Annuity, such death benefits shall be paid to
the Participant's Beneficiary by either of the following methods, as
elected by the Participant (or if no election has been made prior to the
Participant's death, by his Beneficiary) subject to the rules specified
in Section 6.6(h) and the selections made in the Adoption Agreement:
(i) One lump-sum payment in cash or in property;
(ii) Payment in monthly, quarterly, semi-annual, or
annual cash installments over a period to be determined
by the Participant or his Beneficiary. After periodic
installments commence, the Beneficiary shall have the
right to reduce the period over which such periodic
installments shall be made, and the cash amount of such
periodic installments shall be adjusted accordingly.
(iii) If death benefits in excess of the Pre-Retirement
Survivor Annuity are to be paid to the surviving spouse,
such benefits may be paid pursuant to (i) or (ii) above,
or used to purchase an annuity so as to increase the
payments made pursuant to the Pre-Retirement Survivor
Annuity;
(2) In the event the death benefit payable pursuant to Section
6.2 is payable in installments, then, upon the death of the
Participant, the Administrator may direct that the death benefit
be segregated and invested separately, and that the funds
accumulated in the segregated account be used for the payment of
the installments.
(h) Notwithstanding any provision in the Plan to the contrary,
distributions upon the death of a Participant made on or after January
1, 1985, shall be made in accordance with the following requirements and
shall otherwise comply with Code Section 401(a)(9) and the Regulations
thereunder.
(1) If it is determined, pursuant to Regulations, that the
distribution of a Participant's interest has begun and the
Participant dies before his entire interest has been distributed
to him, the remaining portion of such interest shall be
distributed at least as rapidly as under the method of
distribution selected pursuant to Section 6.5 as of his date of
death.
(2) If a Participant dies before he has begun to receive any
distributions of his interest in the Plan or before distributions
are deemed to have begun pursuant to Regulations, then his death
benefit shall be distributed to his Beneficiaries in accordance
with the following rules subject to the selections made in the
Adoption Agreement and Subsections 6.6(h)(3) and 6.6(i) below:
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(i) The entire death benefit shall be distributed to the
Participant's Beneficiaries by December 31st of the
calendar year in which the fifth anniversary of the
Participant's death occurs;
(ii) The 5-year distribution requirement of (i) above
shall not apply to any portion of the deceased
Participant's interest which is payable to or for the
benefit of a designated Beneficiary. In such event, such
portion shall be distributed over the life of such
designated Beneficiary (or over a period not extending
beyond the life expectancy of such designated
Beneficiary) provided such distribution begins not later
than December 31st of the calendar year immediately
following the calendar year in which the Participant
died;
(iii) However, in the event the Participant's spouse
(determined as of the date of the Participant's death)
is his designated Beneficiary, the provisions of (ii)
above shall apply except that the requirement that
distributions commence within one year of the
Participant's death shall not apply. In lieu thereof,
distributions must commence on or before the later of:
(1) December 31st of the calendar year immediately
following the calendar year in which the Participant
died; or (2) December 31st of the calendar year in which
the Participant would have attained age 70 1/2. If the
surviving spouse dies before distributions to such
spouse begin, then the 5-year distribution requirement
of this Section shall apply as if the spouse was the
Participant.
(3) Notwithstanding subparagraph (2) above, or any selections
made in the Adoption Agreement, if a Participant's death benefits
are to be paid in the form of a Pre-Retirement Survivor Annuity,
then distributions to the Participant's surviving spouse must
commence on or before the later of: (1) December 31st of the
calendar year immediately following the calendar year in which
the Participant died; or (2) December 31st of the calendar year
in which the Participant would have attained age 70 1/2.
(i) For purposes of Section 6.6(h)(2), the election by a
designated Beneficiary to be excepted from the 5-year distribution
requirement (if permitted in the Adoption Agreement) must be made no
later than December 31st of the calendar year following the calendar
year of the Participant's death. Except, however, with respect to a
designated Beneficiary who is the Participant's surviving spouse, the
election must be made by the earlier of: (1) December 31st of the
calendar year immediately following the calendar year in which the
Participant died or, if later, the calendar year in which the
Participant would have attained age 70 1/2; or (2) December 31st of the
calendar year which contains the fifth anniversary of the date of the
Participant's death. An election by a designated Beneficiary must be in
writing and shall be irrevocable as of the last day of the election
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period stated herein. In the absence of an election by the Participant
or a designated Beneficiary, the 5-year distribution requirement shall
apply.
(j) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse (other than in the case of a life
annuity) shall or shall not be redetermined annually as provided in the
Adoption Agreement and in accordance with Regulations. If the
Participant or the Participant's spouse may elect, pursuant to the
Adoption Agreement, to have life expectancies recalculated, then the
election, once made shall be irrevocable. If no election is made by the
time distributions must commence, then the life expectancy of the
Participant and the Participant's spouse shall not be subject to
recalculation. Life expectancy and joint and last survivor expectancy
shall be computed using the return multiples in Tables V and VI of
Regulation Section 1.72-9.
(k) In the event that less than 100% of a Participant's interest
in the Plan is distributed to such Participant's spouse, the portion of
the distribution attributable to the Participant's Voluntary
Contribution Account shall be in the same proportion that the
Participant's Voluntary Contribution Account bears to the Participant's
total interest in the Plan.
(l) Subject to the spouse's right of consent afforded under the
Plan, the restrictions imposed by this Section shall not apply if a
Participant has, prior to January 1, 1984, made a written designation to
have his death benefits paid in an alternative method acceptable under
Code Section 401(a) as in effect prior to the enactment of the Tax
Equity and Fiscal Responsibility Act of 1982.
6.7 TIME OF SEGREGATION OR DISTRIBUTION
Except as limited by Sections 6.5 and 6.6, whenever a distribution is to
be made, or a series of payments are to commence, on or as of an Anniversary
Date, the distribution or series of payments may be made or begun on such date
or as soon thereafter as is practicable, but in no event later than 180 days
after the Anniversary Date. However, unless a Former Participant elects in
writing to defer the receipt of benefits (such election may not result in a
death benefit that is more than incidental), the payment of benefits shall begin
not later than the 60th day after the close of the Plan Year in which the latest
of the following events occurs: (a) the date on which the Participant attains
the earlier of age 65 or the Normal Retirement Age specified herein; (b) the
10th anniversary of the year in which the Participant commenced participation in
the Plan; or (c) the date the Participant terminates his service with the
Employer.
Notwithstanding the foregoing, the failure of a Participant and, if
applicable, the Participant's spouse, to consent to a distribution pursuant to
Section 6.5(d), shall be deemed to be an election to defer the commencement of
payment of any benefit sufficient to satisfy this Section.
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6.8 DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor, then the
Administrator may direct that such distribution be paid to the legal guardian,
or if none, to a parent of such Beneficiary or a responsible adult with whom the
Beneficiary maintains his residence, or to the custodian for such Beneficiary
under the Uniform Gift to Minors Act or Gift to Minors Act, if such is permitted
by the laws of the state in which said Beneficiary resides. Such a payment to
the legal guardian, custodian or parent of a minor Beneficiary shall fully
discharge the Trustee, Employer, and Plan from further liability on account
thereof.
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion of the distribution payable to a
Participant or his Beneficiary hereunder shall, at the later of the
Participant's attainment of age 62 or his Normal Retirement Age, remain payable
solely by reason of the inability of the Administrator, after sending a
registered letter, return receipt requested, to the last known address, and
after further diligent effort, to ascertain the whereabouts of such Participant
or his Beneficiary, the amount so distributable shall not be treated as a
Forfeiture pursuant to the Plan, but shall be distributed from the Trust Fund
and placed in an interest-bearing savings account in the name of the Participant
or Beneficiary. The Trustee, in the Trustee's discretion, may elect to comply
with the Unclaimed Property Law of its state of domicile, provided such law
provides for complete reinstatement if a claim is later made by the Participant
or Beneficiary.
6.10 PRE-RETIREMENT DISTRIBUTION
For Profit Sharing Plans and 401(k) Profit Sharing Plans, if elected in the
Adoption Agreement, at such time as a Participant shall have attained the age
specified in the Adoption Agreement, the Administrator, at the election of the
Participant, shall direct the distribution of up to the entire amount then
credited to the accounts maintained on behalf of the Participant. However, no
such distribution from the Participant's Account shall occur prior to 100%
Vesting. In the event that the Administrator makes such a distribution, the
Participant shall continue to be eligible to participate in the Plan on the
same basis as any other Employee. Any distribution made pursuant to this Section
shall be made in a manner consistent with Section 6.5, including, but not
limited to, all notice and consent requirements of Code Sections 411(a)(11) and
417 and the Regulations thereunder.
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) For Profit Sharing Plans, if elected in the Adoption Agreement, the
Administrator, at the election of the Participant, shall direct the distribution
to any Participant in any one Plan Year up to the lesser of 100% of his
Participant's Combined Account valued as of the last Anniversary Date or other
Valuation Date or the amount necessary to satisfy the immediate and heavy
financial need of the Participant. Any distribution made pursuant to this
Section shall be deemed to be made as of the first day
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of the Plan Year or, if later, the Valuation Date immediately preceding the date
of distribution, and the account from which the distribution is made shall be
reduced accordingly. Withdrawal under this Section shall be authorized only if
the distribution is on account of:
(1) Medical expenses described in Code Section 213(d) incurred by, or
necessary to obtain medical care for, the Participant, his spouse, or any
of his dependents (as defined in Code Section 152);
(2) The purchase (excluding mortgage payments) of a principal residence for
the Participant;
(3) Funeral expenses for a member of the Participant's family;
(4) Payment of tuition and related educational fees for the next 12 months
of post-secondary eduction for the Participant, his spouse, children, or
dependents; or
(5) The need to prevent the eviction of the Participant for his principal
residence or foreclosure on the mortgage of the Participant's principal
residence.
(b) No such distribution shall be made from the Participant's Account until
such Account has become fully Vested.
(c) Any distribution made pursuant to this Section shall be made in a
manner which is consistent with and satisfies the provisions of Section 6.5,
including, but not limited to, all notice and consent requirements of Code
Sections 411(a)(11) and 417 and the Regulations thereunder.
6.12 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS
All rights and benefits, including elections, provided to a Participant in
this Plan shall be subject to the rights afforded to any "alternate payee" under
a "qualified domestic relations order." Furthermore, a distribution to an
"alternate payee" shall be permitted if such distribution is authorized by a
"qualified domestic relations order," even if the affected Participant has not
reached the "earliest retirement age" under the Plan. For the purposes of this
Section, "alternate payee," "qualified domestic relations order" and "earliest
retirement age" shall have the meaning set forth under Code Section 414(p).
6.13 SPECIAL RULE FOR NON-ANNUITY PLANS
If elected in the Adoption Agreement, the following shall apply to a
Participant in a Profit Sharing Plan or 401(k) Profit Sharing Plan and to any
distribution, made on or after the first day of the first plan year beginning
after December 31, 1988, from or under a separate account
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attributable solely to accumulated deductible employee contributions, as
defined in Code Section 72(o)(5)(B), and maintained on behalf of a participant
in a money purchase pension plan, including a target benefit plan):
(a) The Participant shall be prohibited from electing benefits in the
form of a life annuity;
(b) Upon the death of the Participant, the Participant's entire
Vested account balances will be paid to his or her surviving spouse, or,
if there is no surviving spouse or the surviving spouse has already
consented to waive his or her benefit, in accordance with Section 6.6, to
his designated Beneficiary; and
(c) If a distribution is one to which Code Sections 401(a)(11) and
417 of the Internal Revenue Code do not apply, such distribution may
commence less than 30 days after the notice required under Regulation
Section 1.411(a)-11(c) of the Income Tax Regulations is given, provided
that:
(1) the Plan Administrator clearly informs the Participant that the
Participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not to
elect a distribution (and, if applicable, a particular distribution
option), and
(2) the Participant, after receiving the notice, affirmatively
elects a distribution.
(d) Except to the extent otherwise provided in this Section and
Section 6.5(h), the other provisions of Sections 6.2, 6.5 and 6.6
regarding spousal consent and the forms of distributions shall be
inoperative with respect to this Plan.
This Section shall not apply to any Participant if it is determined that
this Plan is a direct or indirect transferee of a defined benefit plan or money
purchase plan, or a target benefit plan, stock bonus or profit sharing plan
which would otherwise provide for a life annuity form of payment to the
Participant.
6.14 LIFE INSURANCE
(a) The Trustee, at the direction of the Administrator and pursuant
to instructions from the individual designated in the Adoption Agreement
for such purpose shall ratably apply for, own, and pay all premiums on
Contracts on the lives of the Participants. Any initial or additional
Contract purchased on behalf of a Participant shall have a face amount of
not less than $1,000 or the limitation of the Insurer, whichever is
greater. If a life insurance Contract is to be purchased for a Participant,
the aggregate premium for ordinary life insurance for each Participant must
be less than 50% of the aggregate contributions and Forfeitures allocated
to a Participant's Combined Account. For purposes of this limitation,
ordinary life insurance Contracts are Contract with both non-
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decreasing death benefits and non-increasing premiums. If term insurance or
universal life insurance is purchased with such contributions, the
aggregate premium must be 25% or less of the aggregate contributions and
Forfeitures allocated to a Participant's Combined Account. If both term
insurance and ordinary life insurance are purchased with such
contributions, the amount expended for term insurance plus one-half of the
premium for ordinary life insurance may not in the aggregate exceed 25% of
the aggregate Employer contributions and Forfeitures allocated to a
Participant's Combined Account. The Trustee must distribute the Contract to
the Participant or convert the entire value of the Contract at or before
retirement into cash or provide for a periodic income so that no portion of
such value may be used to continue life insurance protection beyond
retirement. Notwithstanding the above, the limitations imposed herein with
respect to the purchase of life insurance shall not apply, in the case of a
Profit Sharing Plan, to the portion of a Participant's Account that has
accumulated for at least two (2) years.
Notwithstanding anything hereinabove to the contrary, amounts credited
to a Participant's Qualified Voluntary Employee Contribution Account
pursuant to Section 4.9, shall not be applied to the purchase of life
insurance Contracts.
(b) The Trustee will be the owner of any life insurance Contract
purchased under the terms of this Plan. The Contract must provide that the
proceeds will be payable to the Trustee; however, the Trustee shall be
required to pay over all proceeds of the Contract to the Participant's
designated Beneficiary in accordance with the distribution provisions of
Article VI. A Participant's spouse will be a designated beneficiary
pursuant to Section 6.2, unless a qualified election has been made in
accordance with Sections 6.5 and 6.6 of the Plan, if applicable. Under no
circumstances shall the Trust retain any part of the proceeds. However, the
Trustee shall not pay the proceeds in a method which would violate the
requirements of the retirement Equity Act, as stated in Article VI of the
Plan, or Code Section 401(a)(9) and the Regulations thereunder.
6.15 DIRECT ROLLOVERS
(a) Notwithstanding any provisions of the Plan to the contrary, with
respect to distributions made after December 31, 1992, a Participant shall
be permitted to elect to have any "eligible rollover distribution"
transferred directly to an "eligible retirement plan" specified by the
Participant. The Plan provisions otherwise applicable to distributions
continue to apply to the direct transfer option. The Participant shall, in
the time and manner prescribed by the Administrator, specify the amount to
be directly transferred and the "eligible retirement plan" to receive the
transfer. Any portion of a distribution which is not transferred shall be
distributed to the Participant.
(b) For purposes of this Section, the term "eligible rollover
distribution" means any distribution other than a distribution of
substantially equal periodic payments over the life or life expectancy of
the Participant (or joint life or joint life expectancies of the
Participant and the designated Beneficiary) or a distribution over a
period certain of ten
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years or more. Amounts required to be distributed under Code Section
401(a)(9) are not eligible rollover distributions. The direct transfer
option applies only to eligible rollover distributions which would
otherwise be includible in gross income if not transferred.
(c) For purposes of this Section, the term "eligible retirement
plan" means an individual retirement accounts as described in Code Section
408(a), an individual retirement annuity as described in Code Section
408(b), an annuity plan as described in Code Section 403(a), or a defined
contribution plan as described in Code Section 401(a) which is exempt
under Code Section 501(a) and which accepts rollover distributions.
(d) The election described in subsection (a) also applies to the
surviving spouse after the Participant's death; however, distributions to
the surviving spouse may only be transferred to an individual retirement
account or individual retirement annuity. For purposes of subsection (a),
a spouse or former spouse who is the alternate payee under a qualified
domestic relations order as defined in Code Section 414(p) will be treated
as the Participant.
For purposes of this Section, the term "eligible retirement plan"
has the meaning given such term by Code Section 402(c)(8)(B), except that
a qualified trust shall be considered an eligible retirement plan only if
it is a defined contribution plan, the terms of which permit the
acceptance of rollover distributions.
ARTICLE VII
PLAN LOANS
7.1 LOANS TO PARTICIPANTS
(a) If specified in the Adoption Agreement, the Administrator or its
appointed loan fiduciary may,in its sole discretion, make loans to
Participants or Beneficiaries under the following circumstances: (1) loans
shall be made available to all Participants and Beneficiaries on a
reasonably equivalent basis: (2) loans shall not be made available to
Highly Compensated employees in an amount greater than the amount made
available to other Participants; (3) loans shall bear a reasonable rate of
interest; (4) loans shall be adequately secured; and (5) shall provide for
periodic repayment over a reasonable period of time.
(b) Loans shall not be made to any Shareholder-Employee or
Owner-Employee unless an exemption for such loan is obtained pursuant to
Act Section 408 and further provided that such loan would not be subject
to tax pursuant to Code Section 4975.
(c) Loans shall not be granted to any Participant that provide for a
repayment period extending beyond such Participant's Normal Retirement
Date.
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(d) Loans made pursuant to this Section (when added to the
outstanding balance of all other loans made by the Plan to the
Participant) shall be limited to the lesser of:
(1) $50,000 reduced by the excess (if any) of the highest
outstanding balance of loans from the Plan to the Participant during
the one year period ending on the day before the date on which such
loan is made, over the outstanding balance of loans from the Plan to
the Participant on the date on which such loan was made.
or
(2) the greater of (A) one-half (1/2) of the present value of the
non-forfeitable accrued benefit of the Employee under the Plan, or
(B), if permitted pursuant to the Adoption Agreement $10,000.
For purposes of this limit, all plans of the Employer shall be
considered one plan. Additionally, with respect to any loan made prior to
January 1, 1987, the $50,000 limit specified in (1) above shall be
unreduced.
(e) No Participant loan shall take into account the present value of
such Participant's Qualified Voluntary Employee Contribution Account.
(f) Loans shall provide for level amortization with payments to be
made not less frequently than quarterly over a period not to exceed five
(5) years. However, loans used to acquire any dwelling unit which, within
a reasonable time, is to be used (determined at the time the loan is made)
as a principal residence of the Participant shall provide for periodic
repayment over a reasonable period of time that may exceed five (5) years.
Notwithstanding the foregoing, loans made prior to January 1, 1987 which
are used to acquire, construct, reconstruct or substantially rehabilitate
any dwelling unit which, within a reasonable period of time is to be used
(determined at the time the loan is made) as a principal residence of the
Participant or a member of his family (within the meaning of Code Section
267(c)(4)) may provide for periodic repayment over a reasonable period of
time that may exceed five (5) years. Additionally, loans made prior to
January 1, 1987, may provide for periodic payments which are made less
frequently than quarterly and which do not necessarily result in level
amortization.
(g) An assignment or pledge of any portion of a Participant's
interest in the Plan and a loan, pledge, or assignment with respect to any
insurance Contract purchased under the Plan, shall be treated as a loan
under this section.
(h) Any loan made pursuant to this Section after August 18, 1985
where the Vested interest of the Participant is used to secure such loan
shall require the written consent of the Participant's spouse in a manner
consistent with Section 6.5(a) provided the spousal consent requirements
of such Section apply to the Plan. Such written consent must be obtained
within the 90-day period prior to the date the loan is made. Any security
interest held by the Plan by reason of an outstanding loan to the
Participant shall be taken
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into account in determining the amount of the death benefit or
Pre-Retirement Survivor Annuity. However, no spousal consent shall be
required under this paragraph if the total accrued benefit subject to the
security is not in excess of $3,500.
(i) With regard to any loans granted or renewed on or after the last
day of the first Plan Year beginning after December 31, 1998, a
Participant loan program shall be established which must include but need
not be limited to, the following:
(1) the identity of the person or positions authorized to administer
the Participant loan program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or denied;
(4) limitations, if any, on the types and amounts of loans offered,
including what constitutes a hardship or financial need if selected
in the Adoption Agreement;
(5) the procedure under the program for determining a reasonable rate
of interest;
(6) the types of collateral which may secure a Participant loan; and
(7) the events constituting default and the steps that will be taken
to preserve plan assets.
Such Participant loan program shall be contained in a separate
written document which, when properly executed, is hereby incorporated by
reference and made a part of this plan. Furthermore, such Participant loan
program may be modified or amended in writing from time to time without
the necessity of amending this Section of the Plan.
ARTICLE VIII
AMENDMENT, TERMINATION, AND MERGERS
8.1 AMENDMENT
(a) The Employer shall have the right at any time to amend this Plan
subject to the limitations of this Section. However, any amendment which
affects the rights, duties or responsibilities of the Trustee, Sponsor, or
Administrator may only be made with the Trustee's, Sponsor's, or
Administrator's written consent. Any such amendment shall become effective
as provided therein upon its execution. The Trustee shall not be required
to execute any such amendment unless the amendment affects the duties of
the Trustee hereunder.
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(b) The Employer may (1) change the choice of options in the Adoption
Agreement, (2) add overriding language in the Adoption Agreement when such
language is necessary to satisfy Code Section 415 or 416 because of the
required aggregation of multiple plans, and (3) add certain model
amendments published by the Internal Revenue Service which specifically
provide that their adoption will not cause the Plan to be treated as an
individually designed plan. An Employee that amends the Plan for any other
reason, including a waiver or the minimum funding requirement under Code
Section 412(d), will no longer participate in this Prototype Plan and will
be considered to have an individually designed plan.
(c) The Employer expressly delegates authority to the sponsoring
organization of this Plan, the right to amend this Plan by submitting a
copy of the amendment to each Employer who has adopted this Plan after
first having received a ruling or favorable determination from the
Internal Revenue Service that the Plan as amended qualifies under Code
Section 401(a) and the Act. For purposes of this Section, the mass
submitter shall be recognized as the agent of the sponsoring organization.
If the sponsoring organization does not adopt the amendments made by the
mass submitter, it will no longer be identical to or a minor modifier of
the mass submitter plan.
(d) No amendment to the Plan shall be effective if it authorizes or
permits any part of the Trust Fund (other than such part as is required to
pay taxes and administration expenses) to be used for or diverted to any
purpose other than for the exclusive benefit of the Participants or their
Beneficiaries or estates; or causes any reduction in the amount credited
to the account of any Participant; or causes or permits any portion of the
Trust Fund to revert to be become property of the Employer.
(e) Except as permitted by Regulations (including Regulation
1.411(d)-4), no Plan amendment or transaction having the effect of a Plan
amendment (such as a merger, plan transfer or similar transaction) shall
be effective if it eliminates or reduces any "Section 411(d)(6) protected
benefit" or adds to modifies conditions relating to "Section 411(d)(6)
protected benefits" the result of which is a further restriction on such
benefit unless such protected benefits are preserved with respect to
benefits accrued as of the later of the adoption date or effective date of
the amendment. "Section 411(d)(6) protected benefits" are benefits
described in Code Section 411(d)(6)(A), early retirement benefits and
retirement-type subsidies, and optional forms of benefit.
8.2 TERMINATION
(a) The Employer shall have the right at any time to terminate the
Plan by delivering to the Trustee and Administrator written notice of such
termination. Upon any full or partial termination all amounts credited to
the affected Participants' Combined Accounts shall become 100% Vested and
shall not thereafter be subject to forfeiture, and all unallocated amounts
shall be allocated to the accounts of all Participants in accordance with
the provisions hereof.
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(b) Upon the full termination of the Plan, the Employer shall direct
the distribution of the assets to Participants in a manner which is
consistent with and satisfies the provisions of Section 6.5. Distributions
to a Participant shall be made in cash (or in property if permitted in the
Adoption Agreement) or through the purchase of irrevocable nontransferable
deferred commitments from the insurer. Except as permitted by Regulations,
the termination of the Plan shall not result in the reduction of "Section
411(d)(6) protected benefits" as described in Section 8.1.
8.3 MERGER OR CONSOLIDATION
This Plan may be merged or consolidated with, or its assets and/or
liabilities may be transferred to any other plan only if the benefits which
would be received by a Participant of this Plan, In the event of a termination
of the plan immediately after such transfer, merger or consolidation, are at
least equal to the benefits the Participant would have received if the Plan had
terminated immediately before the transfer, merger or consolidation and such
merger or consolidation does not otherwise result in the elimination or
reduction of any "Section 411(d)(6) protected benefits" as described in Section
8.1(e).
ARTICLE IX
MISCELLANEOUS
9.1 EMPLOYER ADOPTIONS
(a) Any organization may become the Employer hereunder by executing
the Adoption Agreement in form satisfactory to the Sponsor and Trustee,
and it shall provide such additional information as the Trustee may
require. The consent of the Trustee to act as such shall be signified by
its execution of the Adoption Agreement.
(b) Except as otherwise provided in this Plan, the affiliation of the
Employer and the participation of its Participants shall be separate and
apart from that of any other employer and its participants hereunder.
(c) As a condition precedent to the effective adoption of the Plan by
an Employer or the effective amendment of an Adoption Agreement, the
Sponsor must approve the Employer's Adoption Agreement or amendment
thereto.
9.2 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract between the
Employer and any Participant or to be a consideration or an inducement for the
employment of any Participant or Employee. Nothing contained in this Plan shall
be deemed to give any Participant or Employee the right to be retained in the
service of the Employer or to interfere with the right of the Employer to
discharge any Participant or Employee at any time regardless of the effect
which such discharge shall have upon him as a Participant of this Plan.
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9.3 ALIENATION
(a) Subject to the exceptions provided below, no benefit which shall
be payable to any person (including a Participant or his Beneficiary) shall
be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, or charge, and any attempt to anticipate,
alienate, sell, transfer, assign, pledge, encumber, or charge the same
shall be void: and no such benefit shall in any manner be liable for, or
subject to, the debts, contracts, liabilities, engagements, or torts of any
such person, nor shall it be subject to attachment or legal process for or
against such person, and the same shall not be recognized except to such
extent as may be required by law.
(b) This provision shall not apply to the extent a Participant or
Beneficiary is indebted to the Plan, for any reason, under any provision of
this Plan. At the time a distribution is to be made to or for a
Participant's or Beneficiary's benefit, such proportion of the amount to be
distributed as shall equal such indebtedness shall be paid to the Plan, to
apply against or discharge such indebtedness. Prior to making a payment,
however, the Participant or Beneficiary must be given written notice by the
Administrator that such indebtedness is to be so paid in whole or part from
his Participant's Combined Account. If the Participant or Beneficiary does
not agree that the indebtedness is a valid claim against his Vested
Participant's Combined Account, he shall be entitled to a review of the
validity of the claim in accordance with procedures provided in Sections
2.12 and 2.13.
(c) This provision shall not apply to a "qualified domestic relations
order" defined in Code Section 414(p), and those other domestic relations
orders permitted to be so treated by the Administrator under the
provisions of the Retirement Equity Act of 1984. The Administrator shall
establish a written procedure to determine the qualified status of
domestic relations orders and to administer distributions under such
qualified orders. Further, to the extent provided under a "qualified
domestic relations order", a former spouse of a Participant shall be
treated as the spouse or surviving spouse for all purposes under the Plan.
9.4 CONSTRUCTION OF PLAN
This Plan and Trust shall be construed and enforced according to the Act
and the laws of California to the extent not pre-empted by the Act.
9.5 GENDER AND NUMBER
Whenever any words are used herein in the masculine, feminine or neuter
gender, they shall be construed as though they were also used in another gender
in all cases where they would so apply, and whenever any words are used herein
in the singular or plural form, they shall be construed as though they were
also used in the other form in all cases where they would so apply.
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9.6 LEGAL ACTION
In the event any claim, suit, or proceeding is brought regarding the Trust
and/or Plan established hereunder to which the Trustee or the Administrator may
be a party, and such claim, suit, or proceeding is resolved in favor of the
Trustee or Administrator, they shall be entitled to be reimbursed from the Trust
Fund for any and all costs, attorney's fees, and other expenses pertaining
thereto incurred by them for which they shall have become liable.
9.7 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise specifically permitted by
law, it shall be impossible by operation of the Plan or of the Trust, by
termination of either, by power of revocation or amendment, by the
happening of any contingency, by collateral arrangement or by any other
means, for any part of the corpus or income of any Trust Fund maintained
pursuant to the Plan or any funds contributed thereto to be used for, or
diverted to, purposes other than the exclusive benefit of Participants,
Retired Participants, or their Beneficiaries.
(b) In the event the Employer shall make a contribution under a
mistake of fact pursuant to Section 403(c)(2)(A) of the Act, the Employer
may demand repayment of such contribution at any time within one (1) year
following the time of payment and the Trustees shall return such amount to
the Employer within the one (1) year period. Earnings of the Plan
attributable to the contributions may not be returned to the Employer but
any losses attributable thereto must reduce the amount so returned.
9.8 BONDING
Every Fiduciary, except a bank or an insurance company, unless exempted by
the Act and regulations thereunder, shall be bonded in an amount not less than
10% of the amount of the funds such Fiduciary handles: provided, however, that
the minimum bond shall be $1,000 and the maximum bond, $500,000. The amount of
funds handled shall be determined at the beginning of each Plan Year by the
amount of funds handled by such person, group, or class to be covered and their
predecessors, if any, during the preceding Plan Year, or if there is no
preceding Plan Year, then by the amount of the funds to be handled during the
then current year. The bond shall provide protection to the Plan against any
loss by reason of acts of fraud or dishonesty by the Fiduciary alone or in
connivance with others. The surety shall be a corporate surety company (as such
term is used in Act Section 412(a)(2)), and the bond shall be in a form approved
by the Secretary of Labor. Notwithstanding anything in the Plan to the contrary,
the cost of such bonds shall be an expense of and may, at the election of the
Administrator, be paid from the Trust Fund or by the Employer
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9.9 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
Neither the Employer nor the Trustee, nor their successors, shall be
responsible for the validity of any Contract issued hereunder or for the
failure on the part of the Insurer to make payments provided by any such
Contract, or for the action of any person which may delay payment or render a
Contract null and void or unenforceable in whole or in part.
9.10 INSURER'S PROTECTIVE CLAUSE
The insurer who shall issue Contracts hereunder shall not have any
responsibility for the validity of this Plan or for the tax or legal aspects of
this Plan. The Insurer shall be protected and held harmless in acting in
accordance with any written direction of the Trustee, and shall have no duty to
see to the application of any funds paid to the Trustee, nor be required to
question any actions directed by the Trustee. Regardless of any provision of
this Plan, the Insurer shall not be required to take or permit any action or
allow any benefit or privilege contrary to the terms of any Contract which it
issues hereunder, or the rules of the Insurer.
9.11 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, his legal representative, Beneficiary, or
to any guardian or committee appointed for such Participant or Beneficiary in
accordance with the provisions of this Plan, shall, to the extent thereof, be
in full satisfaction of all claims hereunder against the Trustee and the
Employer.
9.12 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is permitted or
required to do or perform any act or matter or thing, it shall be done and
performed by a person duly authorized by its legally constituted authority.
9.13 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are (1) the Employer, (2) the
Administrator, and (3) any Investment Manager appointed hereunder. The named
Fiduciaries shall have only those specific powers, duties, responsibilities,
and obligations as are specifically given them under the Plan. In general, the
Employer shall have the sole responsibility for making the contributions
provided for under Section 4.1; and shall have the sole authority to appoint
and remove the Trustee and the Administrator; to formulate the Plan's "funding
policy and method"; and to amend the elective provisions of the Adoption
Agreement or terminate, in whole or in part, the Plan. The Administrator shall
have the sole responsibility for the administration of the Plan, which
responsibility is specifically described in the Plan. Each named Fiduciary
warrants that any directions given, information furnished, or action taken by
it shall be in accordance with the provisions of the Plan, authorizing or
providing for such direction, information or action. Furthermore, each named
Fiduciary may rely upon any such direction, information or action of
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another named Fiduciary as being proper under the Plan, and is not required
under the Plan to inquire into the propriety of any such direction, information
or action. It is intended under the Plan that each named Fiduciary shall be
responsible for the proper exercise of its own powers, duties, responsibilities
and obligations under the Plan. No named Fiduciary shall guarantee the Trust
Fund in any manner against investment loss or depreciation in asset value. Any
person or group may serve in more than one Fiduciary capacity.
9.14 HEADINGS
The headings and subheadings of this Plan have been inserted for
convenience of reference and are to be ignored in any construction of the
provisions hereof.
9.15 APPROVAL BY INTERNAL REVENUE SERVICE
(a) Notwithstanding anything herein to the contrary, if, pursuant
to a timely application filed by or in behalf of the Plan, the
Commissioner of Internal Revenue Service or his delegate should determine
that the Plan does not initially qualify as a tax-exempt plan under Code
Sections 401 and 501, and such determination is not contested, or if
contested, is finally upheld, then if the Plan is a new plan, it shall be
void ab initio and all amounts contributed to the Plan, by the Employer,
less expenses paid, shall be returned within one year and the Plan shall
terminate, and the Trustee shall be discharged from all further
obligations. If the disqualification relates to an amended plan, then the
Plan shall operate as if it had not been amended and restated.
(b) Except as specifically stated in the Plan, any contribution by
the Employer to the Trust Fund is conditioned upon the deductibility of
the contribution by the Employer under the Code and, to the extent any
such deduction is disallowed, the Employer may within one (1) year
following a final determination of the disallowance, whether by agreement
with the Internal Revenue Service or by final decision of a court of
competent jurisdiction, demand repayment of such disallowed contribution
and the Trustee shall return such contribution within one (1) year
following the disallowance. Earnings of the Plan attributable to the
excess contribution may not be returned to the Employer, buy any losses
attributable thereto must reduce the amount so returned.
9.16 UNIFORMITY
All provisions of this Plan shall be interpreted and applied in a
uniform, nondiscriminatory manner.
9.17 PAYMENT OF BENEFITS
Benefits under this Plan shall be paid, subject to Section 6.10 and
Section 6.11 only upon death. Total and Permanent Disability, normal or
early retirement, termination of employment, or upon Plan Termination.
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9.18 TRANSFER OF INTEREST
Notwithstanding any other provision contained in this Plan, the Trustee
at the direction of the Administrator shall transfer the Vested interest, if
any, of such Participant in his account to another trust forming part of a
pension, profit sharing, or stock bonus plan maintained by such Participant's
new employer and represented by said employer in writing as meeting the
requirements of Code Section 401(a), provided that the trust to which such
transfers are made permits the transfer to be made.
ARTICLE X
PARTICIPATING EMPLOYERS
10.1 ELECTION TO BECOME A PARTICIPATING EMPLOYER
Notwithstanding anything herein to the contrary, with the consent of the
Employer, Sponsor and Trustee, any Affiliated Employer may adopt this Plan and
all of the provisions hereof, and participate herein and be known as a
Participating Employer, by a properly executed document evidencing said intent
and will of such Participating Employer.
10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS
(a) Each Participating Employer shall be required to select the
same Adoption Agreement provisions as those selected by the Employer
other than the Plan Year, the Fiscal Year, and such other items that
must, by necessity, vary among employers.
(b) Each such Participating Employer shall be required to use
the same Trustee as provided in this Plan.
(c) The Trustee may, but shall not be required to, commingle,
hold and invest as one Trust Fund all contributions made by Participating
Employers, as well as all increments thereof.
(d) The transfer of any Participant from or to an Employer
participating in this Plan, whether he be an Employee of the Employer or
a Participating Employer, shall not affect such Participant's rights
under the Plan, and all amounts credited to such Participant's Combined
Account as well as his accumulated service time with the transferor or
predecessor, and his length of participation in the Plan, shall continue
to his credit.
(e) Any expenses of the Plan which are to be paid by the
Employer or borne by the Trust Fund shall be paid by each Participating
Employer in the same proportion that the total amount standing to the
credit of all Participants employed by such Employer bears to the total
standing to the credit of all Participants.
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10.3 DESIGNATION OF AGENT
Each Participating Employer shall be deemed to be a part of this Plan;
provided, however, that with respect to all of its relations with the Trustee
and Administrator for the purpose of this Plan, each Participating Employer
shall be deemed to have designated irrevocably the Employer as its agent.
Unless the context of the Plan clearly indicates the contrary, the word
"Employer" shall be deemed to include each Participating Employer as related to
its adoption of the Plan.
10.4 EMPLOYEE TRANSFERS
It is anticipated that an Employee may be transferred between
Participating Employers, and in the event of any such transfer, the Employee
involved shall carry with him his accumulated service and eligibility. No such
transfer shall effect a termination of employment hereunder, and the
Participating Employer to which the Employee is transferred shall thereupon
become obligated hereunder with respect to such Employee in the same manner as
was the Participating Employer from whom the Employee was transferred.
10.5 PARTICIPATING EMPLOYER'S CONTRIBUTION AND FORFEITURES
Any contribution or Forfeiture subject to allocation during each Plan
Year shall be allocated among all Participants of all Participating Employers in
accordance with the provisions of this Plan. However, if elected in the
Non-Standardized Adoption Agreement, any contribution or Forfeiture subject to
allocation during each Plan Year shall be determined separately by each
Participating Employer, and shall be allocated only among the Participants
eligible to share in the contributions of the Employer or Participating Employer
making the contribution, or with respect to Forfeitures, shall inure only to the
benefit of the Participants of the Employer or Participating Employer by with
the forfeiting Participant was employed. On the basis of the information
furnished by the Administrator, the Trustee shall keep separate books and
records concerning the affairs of each Participating Employer hereunder and as
to the accounts and credits of the Employees of each Participating Employer. The
Trustee may, but need not, register Contracts so as to evidence that a
particular Participating Employer is the interested Employer hereunder, but in
the event of an Employee transfer from one Participating Employer to another,
the employing Employer shall immediately notify the Trustee thereof.
10.6 AMENDMENT
Amendment of this Plan by the Employer at any time when there shall be a
Participating Employer hereunder shall only be by the written action of each
and every Participating Employer and with the consent of the Trustee where such
consent is necessary in accordance with the terms of this Plan.
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10.7 DISCONTINUANCE OF PARTICIPATION
Except in the case of a Standardized Plan, any Participating Employer
shall be permitted to discontinue or revoke its participation in the Plan at
any time. At the time of any such discontinuance or revocation, satisfactory
evidence thereof and of any applicable conditions imposed shall be delivered to
the Trustee. The Trustee shall thereafter transfer, deliver and assign
Contracts and other Trust Fund assets allocable to the Participants of such
Participating Employer to such new Trustee as shall have been designated by
such Participating Employer, in the event that it has established a separate
pension plan for its Employees provided, however, that no such transfer shall
be made if the result is the elimination or reduction of any "Section 411(d)(6)
protected benefits" in accordance with Section 8.1(e). If no successor is
designated, the Trustee shall retain such assets for the Employees of said
Participating Employer pursuant to the provisions of Article VII hereof. In no
such event shall any part of the corpus or income of the Trust Fund as it
relates to such Participating Employer be used for or diverted for purposes
other than for the exclusive benefit of the Employees of such Participating
Employer.
10.8 ADMINISTRATOR'S AUTHORITY
The Administrator shall have authority to make any and all necessary
rules or regulations, binding upon all Participating Employers and all
Participants, to effectuate the purpose of the Article.
10.9 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE
If any Participating Employer is prevented in whole or in part from
making a contribution which it would otherwise have made under the Plan by
reason of having no current or accumulated earnings or profits, or because such
earnings or profits are less than the contribution which it would otherwise
have made, then, pursuant to Code Section 404(a)(3)(B), so much of the
contribution which such Participating Employer was so prevented from making may
be made, for the benefit of the participating employees of such Participating
Employer, by other Participating Employers who are members of the same
affiliated group within the meaning of Code Section 1504 to the extent of their
current or accumulated earnings or profits, except that such contribution by
each such other Participating Employer shall be limited to the proportion of
its total current and accumulated earnings or profits remaining after
adjustment for its contribution to the Plan made without regard to this
paragraph which the total prevented contribution bears to the total current and
accumulated earnings or profits of all the Participating Employers remaining
after adjustments for all contributions made to the Plan without regard to this
paragraph.
A Participating Employer on behalf of whose employees a contribution is
made under this paragraph shall not be required to reimburse the contributing
Participating Employers.
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ARTICLE XI
CASH OR DEFERRED PROVISIONS
Notwithstanding any provisions in the Plan to the contrary, the provisions
of this Article shall apply with respect to any 401(k) Profit Sharing Plan.
11.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
For each Plan Year, the Employer shall contribute to the Plan;
(a) The amount of the total salary reduction elections of all
Participants made pursuant to Section 11.2(a), which amount shall be deemed
an Employer's Elective Contribution, plus
(b) If specified in E3 of the Adoption Agreement, a matching
contribution equal to the percentage specified in the Adoption Agreement of
the Deferred Compensation of each Participant eligible to share in the
allocations of the matching contribution, which amount shall be deemed an
Employer's Non-Elective or Elective Contribution as selected in the
Adoption Agreement, plus
(c) If specified in E4 of the Adoption Agreement, a discretionary
amount, if any, which shall be deemed an Employer's Non-Elective
Contribution, plus
(d) If specified in E5 of the Adoption Agreement, a Qualified
Non-Elective Contribution.
(e) Notwithstanding the foregoing, however, the Employer's
contributions for any Fiscal Year shall not exceed the maximum amount
allowable as a deduction to the Employer under the provisions of Code
Section 404. All contributions by the Employer shall be made in cash or in
such property as is acceptable to the Trustee.
(f) Except, however, to the extent necessary to provide the top heavy
minimum allocations, the Employer shall make a contribution even if it
exceeds current or accumulated Net Profit or the amount which is deductible
under Code Section 404.
(g) Employer Elective Contributions accumulated through payroll
deductions shall be paid to the Trustee as of the earliest date on which
such contributions can reasonably be segregated from the Employer's general
assets, but in any event within ninety (90) days from the date on which
such amounts would otherwise have been payable to the Participant in cash.
The provisions of Department of Labor regulations 2510.3-102 are
incorporated herein by reference. Furthermore, any additional Employer
contributions which are allocable to the Participant's Elective Account for
a Plan Year shall be paid to the Plan no later than the twelve-month period
immediately following the close of such Plan Year.
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11.2 PARTICIPANT'S SALARY REDUCTION ELECTION
(a) If selected in the Adoption Agreement, each Participant may elect
to defer his Compensation which would have been received in the Plan Year,
but for the deferral election, subject to the limitations of this Section
and the Adoption Agreement. A deferral election (or modification of an
earlier election) may not be made with respect to Compensation which is
currently available on or before the date the Participant executed such
election, or if later, the latest of the date the Employer adopts this
cash or deferred arrangement, or the date such arrangement first became
effective. Any elections made pursuant to this Section shall become
effective as soon as is administratively feasible.
Additionally, if elected in the Adoption Agreement, each Participant
may elect to defer and have allocated for a Plan Year all or a portion of
any cash bonus attributable to services performed by the Participant for
the Employer during such Plan Year and which would have been received by
the Participant on or before two and one-half months following the end of
the Plan Year but for the deferral. A deferral election may not be made
with respect to cash bonuses which are currently available on or before the
date the Participant executed such election. Notwithstanding the foregoing,
cash bonuses attributable to services performed by the Participant during a
Plan Year but which are to be paid to the Participant later than two and
one-half months after the close of such Plan Year will be subjected to
whatever deferral election is in effect at the time such cash bonus would
have otherwise been received.
The amount by which Compensation and/or cash bonuses are reduced shall
be that Participant's Deferred Compensation and be treated as an Employer
Elective Contribution and allocated to that Participant's Elective Account.
Once made, a Participant's election to reduce Compensation shall
remain in effect until modified or terminated. Modifications may be made as
specified in the Adoption Agreement, and terminations may be made at any
time. Any modification or termination of an election will become effective
as soon as is administratively feasible.
(b) The balance in each Participant's Elective Account shall be fully
Vested at all times and shall not be subject to Forfeiture for any reason.
(c) Amounts held in the Participant's Elective Account and Qualified
Non-Elective Account may be distributable as permitted under the Plan, but
in no event prior to the earlier of;
(1) a Participant's termination of employment. Total and Permanent
Disability, or death;
(2) a Participant's attainment of age 59 1/2;
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(3) the proven financial hardship of a Participant, subject to the
limitations of Section 11.8:
(4) the termination of the Plan without the existence at the time of Plan
termination of another defined contribution plan (other than an employee
stock ownership plan as defined in Code Section 4975(e)(7)) or the
establishment of a successor defined contribution plan (other than an
employee stock ownership plan as defined in Code Section 4975(e)(7)) by
the Employer or an Affiliated Employer within the period ending twelve
months after distribution of all assets from the Plan maintained by the
Employer.
(5) the date of the sale by the Employer to an entity that is not an
Affiliated Employer of substantially all of the assets (within the meaning
of Code Section 409(d)(2)) with respect to a Participant who continues
employment with the corporation acquiring such assets; or
(6) the date of the sale by the Employer or an Affiliated Employer of its
interest in a subsidiary (within the meaning of Code Section 409(d)(3)) to
an entity that is not an Affiliated Employer with respect to a Participant
who continues employment with such subsidiary.
(d) In any Plan Year beginning after December 31, 1986, a Participant's
Deferred Compensation made under this Plan and all other plans, contracts or
arrangements of the Employer maintaining this Plan shall not exceed the
limitation imposed by Code Section 402(g), as in effect for the calendar year
in which such Plan Year began. If such dollar limitation is exceeded solely
from elective deferrals made under this Plan or any other plan maintained by
the Employer, a Participant will be deemed to have notified the Administrator
of such excess amount which shall be distributed in a manner consistent with
Section 11.2(f). This dollar limitation shall be adjusted annually pursuant to
the method provided in Code Section 415(d) in accordance with Regulations.
(e) In the event a Participant has received a hardship distribution
pursuant to Regulation 1.401(k)-1(d)(2)(iii)(B) from any other plan maintained
by the Employer or from his Participant's Elective Account pursuant to Section
11.8, then such Participant shall not be permitted to elect to have Deferred
Compensation contributed to the Plan on his behalf for a period of twelve (12)
months following the receipt of the distribution. Furthermore, the dollar
limitation under Code Section 402(g) shall be reduced, with respect to the
Participant's taxable year following the taxable year in which the hardship
distribution was made, by the amount of such Participant's Deferred
Compensation, if any, made pursuant to this Plan (and any other plan maintained
by the Employer) for the taxable year of the hardship distribution.
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(f) If a Participant's Deferred Compensation under this Plan together with
any elective deferrals (as defined in Regulation 1.402(g)-1(b)) under another
qualified cash or deferred arrangement (as defined in Code Section 401(k)), a
simplified employee pension (as defined in Code Section 408(k)), a salary
reduction arrangement (within the meaning of Code Section 3121(a)(5)(D)), a
deferred compensation plan under Code Section 457, or a trust described in Code
Section 501(c)(18) cumulatively exceed the limitation imposed by Code Section
402(g) (as adjusted annually in accordance with the method provided in Code
Section 415(d) pursuant to Regulations) for such Participant's taxable year,
the Participant may, not later than March 1st following the close of his
taxable year, notify the Administrator in writing of such excess and request
that his Deferred Compensation under this Plan be reduced by an amount
specified by the Participant. In such event, the Administrator shall direct the
Trustee to distribute such excess amount (and any Income allocable to such
excess amount) to the Participant not later than the first April 15th following
the close of the Participant's taxable year. Distributions in accordance with
this paragraph may be made for any taxable year of the Participant which begins
after December 31, 1986. Any distribution of less than the entire amount of
Excess Deferred Compensation and Income shall be treated as a pro rata
distribution of Excess Deferred Compensation and Income. The amount distributed
shall not exceed the Participant's Deferred Compensation under the Plan for the
taxable year. Any distribution on or before the last day of the Participant's
taxable year must satisfy each of the following conditions:
(1) the Participant shall designate the distribution as Excess Deferred
Compensation:
(2) the distribution must be made after the date on which the Plan received
the Excess Deferred Compensation; and
(3) the Plan must designate the distribution as a distribution of Excess
Deferred Compensation.
Any distribution under this Section shall be made first from unmatched
Deferred Compensation and, thereafter, simultaneously from Deferred
Compensation which is matched and matching contributions which relate to such
Deferred Compensation. However, any such matching contributions which are not
Vested shall be forfeited in lieu of being distributed.
For the purpose of this Section, "Income" means the amount of income or
loss allocable to a Participant's Excess Deferred Compensation and shall be
equal to the sum of the allocable gain or loss for the taxable year of the
Participant and the allocable gain or loss for the period between the end of
the taxable year of the Participant and the date of distribution ("gap
period"). The income or loss allocable to each such period is calculated
separately and is determined by multiplying the income or loss allocable to the
Participant's Deferred Compensation for the respective period by a fraction. The
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numerator of the fraction is the Participant's Excess Deferred Compensation
for the taxable year of the Participant. The denominator is the balance,
as of the last day of the respective period, of the Participant's Elective
Account that is attributable to the Participant's Deferred Compensation
reduced by the gain allocable to such total amount for the respective
period and increased by the loss allocable to such total amount for the
respective period.
In lieu of the "fractional method" described above, a "safe harbor
method" may be used to calculate the allocable income or loss for the "gap
period". Under such "safe harbor method", allocable income or loss for the
"gap period" shall be deemed to equal ten percent (10%) of the income or
loss allocable to a Participant's Excess Deferred Compensation for the
taxable year of the Participant multiplied by the number of calendar
months in the "gap period". For purposes of determining the number of
calendar months in the "gap period", a distribution occurring on or before
the fifteenth day of the month shall be treated as having been made on the
last day of the preceding month and a distribution occurring after such
fifteenth day shall be treated as having been made on the first day of the
next subsequent month.
Income or loss allocable to any distribution of Excess Deferred
Compensation on or before the last day of the taxable year of the
Participant shall be calculated from the first day of the taxable year of
the Participant to the date on which the distribution is made pursuant to
either the "fractional method" or the "safe harbor method".
Notwithstanding the above, for the 1987 calendar year, Income during
the "gap period" shall not be taken into account.
Notwithstanding the above, for any distribution under this Section
which is made after August 15, 1991, such distribution shall not include
any income for the "gap period". Further provided, for any distribution
under this Section which is made after August 15, 1991, the amount of
income may be computed using a reasonable method that is consistent with
Section 4.3(c), provided such method is used consistently for all
Participants and for all such distributions for the Plan Year.
(g) Notwithstanding the above, a Participant's Excess Deferred
Compensation shall be reduced, but not below zero, by any distribution
and/or recharacterization of Excess Contributions pursuant to Section
11.5(a) for the Plan Year beginning with or within the taxable year of the
Participant.
(h) At Normal Retirement Date, or such other date when the
Participant shall be entitled to receive benefits, the fair market value
of the Participant's Elective Account shall be used to provide benefits to
the Participant or his Beneficiary.
(i) Employer Elective Contributions made pursuant to this Section may
be segregated into a separate account for each Participant in a federally
insured savings
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account, certificate of deposit in a bank or savings and loan association,
money market certificate, or other short-term debt security acceptable to
the Trustee until such time as the allocations pursuant to Section 11.3
have been made.
(j) The Employer and the Administrator shall adopt a procedure
necessary to implement the salary reduction elections provided for herein.
11.3 ALLOCATIONS OF CONTRIBUTIONS AND FORFEITURES
(a) The Administrator shall establish and maintain an account in the
name of each Participant to which the Administrator shall credit as of each
Anniversary Date, or other Valuation Date, all amounts allocated to each
such Participant as set forth herein.
(b) The Employer shall provide the Administrator with all information
required by the Administrator to make a proper allocation of the Employer's
contributions for each Plan Year. Within a reasonable period of time after
the date of receipt by the Administrator of such information, the
Administrator shall allocate such contribution as follows:
(1) With respect to the Employer's Elective Contribution made pursuant
to Section 11.1(a), to each Participant's Elective Account in an
amount equal to each such Participant's Deferred Compensation for the
year.
(2) With respect to the Employer's Matching Contribution made pursuant
to Section 11.1(b), to each Participant's Account, or Participant's
Elective Account as selected in E3 of the Adoption Agreement, in
accordance with Section 11.1(b).
Except, however, a Participant who is not credited with a Year of
Service during any Plan Year shall or shall not share in the
Employer's Matching Contribution for that year as provided in E3 of
the Adoption Agreement. However, for Plan Years beginning after 1989,
if this is a standardized Plan, a Participant shall share in the
Employer's Matching Contribution regardless of Hours of Service.
(3) With respect to the Employer's Non-Elective Contribution made
pursuant to Section 11.1(c), to each Participant's Account in
accordance with the provisions of Sections 4.3(b)(2) or 4.3(b)(3),
whichever is applicable, 4.3(k) and 4.3(l).
(4) With respect to the Employer's Qualified Non-Elective Contribution
made pursuant to Section 11.1(d), to each Participant's Qualified
Non-Elective Contribution Account in the same proportion that each
such Participant's Compensation for the year bears to the total
Compensation of all Participants for such year. However, for any Plan
Year beginning prior to January 1, 1990, and if elected in the
non-standardized Adoption Agreement for any Plan Year beginning on or
after January 1, 1990, a Participant who is not credited with a Year
of
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Service during any Plan Year shall not share in the Employer's
Qualified Non-Elective Contribution for that year, unless required
pursuant to Section 4.3(h). In addition, the provisions of Sections
4.3(k) and 4.3(l) shall apply with respect to the allocation of the
Employer's Qualified Non-Elective Contribution.
(c) Notwithstanding anything in the Plan to the contrary for Plan
Years beginning after December 31, 1988, in determining whether a Non-Key
Employee has received the required minimum allocation pursuant to Section
4.3(f) such Non-Key Employee's Deferred Compensation and matching
contributions used to satisfy the "Actual Deferral Percentage" test
pursuant to Section 11.4(a) or the "Actual Contribution Percentage" test
of Section 11.6(a) shall not be taken into account.
(d) Notwithstanding anything herein to the contrary, participants who
terminated employment during the Plan Year shall share in the salary
reduction contributions made by the Employer for the year of termination
without regard to the Hours of Service credited.
(e) Notwithstanding anything herein to the contrary (other than
Sections 11.3(d) and 11.3(g), any Participant who terminated employment
during the Plan Year for reasons other than death. Total and Permanent
Disability, or retirement shall or shall not share in the allocations of
the Employer's Matching Contribution made pursuant to Section 11.1(b), the
Employer's Non-Elective Contributions made pursuant to Section 11.1(c),
the Employer's Qualified Non-Elective Contribution made pursuant to
Section 11.1(d), and Forfeitures as provided in the Adoption Agreement.
Notwithstanding the foregoing, for Plan Years beginning after 1989, if
this is a standardized Plan, any such terminated Participant shall share
in such allocations provided the terminated Participant completed more
than 500 Hours of Service.
(f) Notwithstanding anything herein to the contrary, Participants
terminating for reasons of death. Total and Permanent Disability, or
retirement shall share in the allocation of the Employer's Matching
Contribution made pursuant to Section 11.1(b), the Employer's Non-Elective
Contributions made pursuant to Section 11.1(c), the Employer's Qualified
Non-Elective Contribution made pursuant to Section 11.1(d), and
Forfeitures as provided in this Section regardless of whether they
completed a Year of Service during the Plan Year.
(g) Notwithstanding any election in the Adoption Agreement to the
contrary, if this is a non-standardized Plan that would otherwise fail to
meet the requirements of Code Sections 401(a)(26), 410(b)(1), or
410(b)(A)(i) and the Regulations thereunder because Employer matching
Contributions made pursuant to Section 11.1(b), Employer Non-Elective
Contributions made pursuant to Section 11.1(c) or Employer Qualified
Non-Elective Contributions made pursuant to Section 11.1(d) have not been
allocated to a sufficient number or percentage of Participants for a Plan
Year, then the following rules shall apply:
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(1) The group of Participants eligible to share in the respective
contributions for the Plan Year shall be expanded to include the
minimum number of Participants who would not otherwise be eligible as
are necessary to satisfy the applicable test specified above. The
specific participants who shall become eligible under the terms of
this paragraph shall be those who are actively employed on the last
day of the Plan Year and, when compared to similarly situated
Participants have completed the greatest number of Hours of Service
in the Plan Year.
(2) If after application of paragraph (1) above, the applicable test
is still not satisfied, then the group of Participants eligible to
share for the Plan Year shall be further expanded to include the
minimum number of Participants who are not actively employed on the
last day of the Plan Year as are necessary to satisfy the applicable
test. The specific Participants who shall become eligible to share
shall be those Participants when compared to similarly situated
Participants, who have completed the greatest number of Hours of
Service in the Plan Year before terminating employment.
11.4 ACTUAL DEFERRAL PERCENT TESTS
(a) Maximum Annual Allocation: For each Plan Year beginning after
December 31, 1986, the annual allocation derived from Employer Elective
Contributions and Qualified Non-Elective Contributions to a Participant's
Elective Account and Qualified Non-Elective Account shall satisfy one of
the following tests:
(1) The "Actual Deferral Percentage" for the Highly Compensated
Participant group shall not be more than the "Actual Deferral
Percentage" of the Non-Highly Compensated Participant group
multiplied by 1.25, or
(2) The excess of the "Actual Deferral Percentage" for the Highly
Compensated Participant group over the "Actual Deferral Percentage"
for the Non-Highly Compensated Participant group shall not be more
than two percentage points. Additionally, the "Actual Deferral
Percentage" for the Highly Compensated Participant group shall not
exceed the "Actual Deferral Percentage" for the Non-Highly Compensated
Participant group multiplied by 2. The provisions of Code Section
401(k)(3) and Regulation 1.401(k)-1(b) are incorporated by reference.
However, for Plan Years beginning after December 31, 1988, to prevent
the multiple use of the alternative method described in (2) above and
Code Section 401(m)(9)(A), any Highly Compensated Participant
eligible to make elective deferrals pursuant to Section 11.2 and to
make Employee contributions or to receive matching contributions
under this Plan or under any other plan maintained by the Employer or
an Affiliated Employer shall have this actual contribution ratio
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reduced pursuant to Regulation 1.401(m)-2, the provisions of which are
incorporated herein by reference.
(b) For the purposes of this Section "Actual Deferral Percentage" means,
with respect to the Highly Compensated Participant group and Non-Highly
Compensated Participant group for a Plan Year, the average of the ratios,
calculated separately for each Participant in such group, of the amount of
Employer Elective Contributions and Qualified Non-Elective Contributions
allocated to each Participant's Elective Account and Qualified Non-Elective
Account for such Plan Year, to such Participant's "414(s) Compensation" for
such Plan Year. The actual deferral ratio for each Participant and the "Actual
Deferral Percentage" for each group, for Plan Years beginning after December
31, 1988, shall be calculated to the nearest one-hundredth of one percent of
the Participant's "414(s) Compensation". Employer Elective Contributions
allocated to each Non-Highly Compensated Participant's Elective Account shall
be reduced by Excess Deferred Compensation to the extent such excess amounts
are made under this Plan or any other plan maintained by the Employer.
(c) For the purpose of determining the actual deferral ratio of a Highly
Compensated Participant who is subject to the Family Member aggregation rules
of Code Section 414(q)(6) because such Participant is either a "five percent
owner" of the Employer or one of the ten (10) Highly Compensated Employees paid
the greatest "415 Compensation" during the year, the following shall apply:
(1) The combined actual deferral ratio for the family group (which shall
be treated as one Highly Compensated Participant) shall be the ratio
determined by aggregating Employer Elective Contributions and "414(s)
Compensation" of all eligible Family Members (including Highly Compensated
Participants). However, in applying the $200,000 limit to "414(s)
Compensation" for Plan Years beginning after December 31, 1988. Family
Members shall include only the affected Employee's spouse and any lineal
descendants who have not attained age 19 before the close of the Plan Year.
(2) The Employee Elective Contributions and "414(s) Compensation" of all
Family Members shall be disregarded for purposes of determining the
"Actual Deferral Percentage" of the Non-Highly Compensated Participant
group except to the extent taken into account in paragraph (1) above.
(3) If a Participant is required to be aggregated as a member of more than
one family group in a plan, all Participants who are members of those
family groups that include the Participant are aggregated as one family
group in accordance with paragraphs (1) and (2) above.
(d) For the purposes of this Section and Code Sections 401(a)(4), 410(b)
and 401(k), if two or more plans which include cash or deferred arrangements
are considered
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one plan for the purposes of Code Section 401(a)(4) or 410(b) (other than
Code Section 401(b)(2)(A)(ii) as in effect for Plan Years beginning after
December 31, 1988), the cash or deferred arrangements included in such
plans shall be treated as one arrangement. In addition, two or more cash
or deferred arrangements may be considered as a single arrangement for
purposes of determining whether or not such arrangements satisfy Code
Sections 401(a)(4), 410(b) and 401(k). In such a case, the cash or
deferred arrangements included in such plans and the plans including such
arrangements shall be treated as one arrangement and as one plan for
purposes of this Section and Code Sections 401(a)(4), 410(b) and 401(k).
For plan years beginning after December 31, 1989, plans may be aggregated
under this paragraph (e) only if they have the same plan year.
Notwithstanding the above, for Plan Years beginning after December
31, 1988, an employee stock ownership plan described in Code Section
4975(e)(7) may not be combined with this Plan for purposes of determining
whether the employee stock ownership plan or this Plan satisfies this
Section and Code Sections 401(a)(4), 410(b) and 401(k).
(e) For the purposes of this Section, if a Highly Compensated
Participant is a Participant under two (2) or more cash or deferred
arrangements (other than a cash or deferred arrangement which is part of
an employee stock ownership plan as defined in Code Section 4975(e)(7) for
Plan Years beginning after December 31, 1988) of the Employer or an
Affiliated Employer, all such cash or deferred arrangements shall be
treated as one cash or deferred arrangement for the purpose of determining
the actual deferral ratio with respect to such Highly Compensated
Participant. However, for Plan Years beginning after December 31, 1988, if
the cash or deferred arrangements have different Plan Years, this
paragraph shall be applied by treating all cash or deferred arrangements
ending with or within the same calendar year as a single arrangement.
11.5 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
In the event that the initial allocations of the Employer's Elective
Contributions and Qualified Non-Elective Contributions do not satisfy one of
the tests set forth in Section 11.4, for Plan Years beginning after December
31, 1986, the Administrator shall adjust Excess Contributions pursuant to the
options set forth below:
(a) On or before the fifteenth day of the third month following the
end of each Plan Year, the Highly Compensated Participant having the
highest actual deferral ratio shall have his portion of Excess
Contributions distributed to him and/or at his election recharacterized as
a voluntary Employee contribution pursuant to Section 4.7 until one of the
tests set forth in Section 11.4 is satisfied, or until his actual deferral
ratio equals the actual deferral ratio of the Highly Compensated
Participant having the second highest actual deferral ratio. This process
shall continue until one of the tests set forth in Section 11.4 is
satisfied. For each Highly Compensated Participant, the amount of Excess
Contributions is equal to the Elective Contributions and Qualified
Non-Elective
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Contributions made on behalf of such Highly Compensated Participant
(determined prior to the application of this paragraph) minus the amount
determined by multiplying the Highly Compensated Participant's actual
deferral ratio (determined after application of this paragraph) by his
"414(s) Compensation". However, in determining the amount of Excess
Contributions to be distributed and/or recharacterized with respect to an
affected Highly Compensated Participant as determined herein, such amount
shall be reduced by any Excess Deferred Compensation previously
distributed to such affected Highly Compensated Participant for his
taxable year ending with or within such Plan Year. Any distribution and/or
recharacterization of Excess Contributions shall be made in accordance
with the following:
(1) With respect to the distribution of Excess Contributions pursuant
to (a) above, such distribution:
(i) may be postponed but not later than the close of the Plan
Year following the Plan Year to which they are allocable;
(ii) shall be made first from unmatched Deferred Compensation
and, thereafter, simultaneously from Deferred Compensation which
is matched and matching contributions which relate to such
Deferred Compensation. However, any such matching contributions
which are not Vested shall be forfeited in lieu of being
distributed;
(iii) shall be made from Qualified Non-Elective Contributions
only to the extent that Excess Contributions exceed the balance
in the Participant's Elective Account attributable to Deferred
Compensation and Employer matching contributions;
(iv) shall be adjusted for Income; and
(v) shall be designated by the Employer as a distribution of
Excess Contributions (and Income).
(2) With respect to the recharacterization of Excess Contributions
pursuant to (a) above, such recharacterized amounts:
(i) shall be deemed to have occurred on the date on which the
last of those Highly Compensated Participants with Excess
Contributions to be recharacterized is notified of the
recharacterization and the tax consequences of such
recharacterization;
(ii) for Plan Years ending on or before August 8, 1988, may be
postponed but not later than October 24, 1988;
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(iii) shall not exceed the amount of Deferred Compensation on
behalf of any Highly Compensated Participant for any Plan Year;
(iv) shall be treated as voluntary Employee contributions for
purposes of Code Section 401(a)(4) and Regulation 1.401(k)-1(b).
However, for purposes of Sections 2.2 and 4.3(f),
recharacterized Excess Contributions continue to be treated as
Employer contributions that are Deferred Compensation. For Plan
Years beginning after December 31, 1988 Excess Contributions
recharacterized as voluntary Employee contributions shall
continue to be nonforfeitable and subject to the same
distribution rules provided for in Section 11.2(c);
(v) which relate to Plan Years ending on or before October 24,
1988, may be treated as either Employer contributions or
voluntary Employee contributions and therefore shall not be
subject to the restrictions of Section 11.2(c);
(vi) are not permitted if the amount recharacterized plus
voluntary Employee contributions actually made by such Highly
Compensated Participant, exceed the maximum amount of voluntary
Employee contributions (determined prior to application of
Section 11.6) that such Highly Compensated Participant is
permitted to make under the Plan in the absence of
recharacterization;
(vii) shall be adjusted for Income.
(3) Any distribution and/or recharacterization of less than the
entire amount of Excess Contributions shall be treated as a pro rata
distribution and/or recharacterization of Excess Contributions and
Income.
(4) The determination and correction of Excess Contributions of a
Highly Compensated Participant whose actual deferral ratio is
determined under the family aggregation rules shall be accomplished
by reducing the actual deferral ratio as required herein and the
Excess Contributions for the family unit shall be allocated among the
Family Members in proportion to the Elective Contributions of each
Family Member that were combined to determine the group actual
deferral ratio.
(b) Within twelve (12) months after the end of the Plan Year, the
Employer shall make a special Qualified Non-Elective Contribution on
behalf of Non-Highly Compensated Participants in an amount sufficient to
satisfy one of the tests set forth in Section 11.1(a). Such contribution
shall be allocated to the Participant's Qualified Non-Elective Account of
each Non-Highly Compensated Participant in the same
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proportion that each Non-Highly Compensated Participant's Compensation for
the year bears to the total Compensation of all Non-Highly Compensated
Participants.
(c) For Purposes of this Section, "Income" means the income or loss
allocable to Excess Contributions which shall equal the sum of the
allocable gain or loss for the Plan Year and the allocable gain or loss
for the period between the end of the Plan Year and the date of
distribution ("gap period"). The income or loss allocable to Excess
Contributions for the Plan Year and the "gap period" is calculated
separately and is determined by multiplying the income or loss for the
Plan Year or the "gap period" by a fraction. The numerator of the fraction
is the Excess Contributions for the Plan Year. The denominator of the
fraction is the total of the Participant's Elective Account attributable
to Elective Contributions and the Participant's Qualified Non-Elective
Account as of the end of the Plan Year or the "gap period", reduced by the
gain allocable to such total amount for the Plan Year or the "gap period"
and increased by the loss allocable to such total amount for the Plan Year
or the "gap period".
In lieu of the "fractional method" described above, a "safe harbor
method" may be used to calculate the allocable Income for the "gap
period". Under such "safe harbor method", allocable Income for the "gap
period" shall be deemed to equal ten percent (10%) of the Income allocable
to Excess Contributions for the Plan Year of the Participant multiplied by
the number of calendar months in the "gap period". For purposes of
determining the number of calendar months in the "gap period", a
distribution occurring on or before the fifteenth day of the month shall
be treated as having been made on the last day of the preceding month and
a distribution occurring after such fifteenth day shall be treated as
having been made on the first day of the next subsequent month.
Notwithstanding the above, for any distribution under this Section
which is made after August 15, 1991, such distribution shall not include
any Income for the "gap period". Further provided, for any distribution
under this Section which is made after August 15, 1991, the amount of
Income may be computed using a reasonable method that is consistent with
Section 4.3(c), provided such method is used consistently for all
Participants and for all such distributions for the Plan Year.
Notwithstanding the above, for Plan Years which began on or after
1987, Income during the "gap period" shall not be taken into account.
(d) Any amounts not distributed or recharacterized within 2-1/2
months after the end of the Plan Year shall be subject to the 10% Employer
excise tax imposed by Code Section 4979.
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11.6 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) The "Actual Contribution Percentage", for Plan Years beginning
after the later of the Effective Date of this Plan or December 31, 1986,
for the Highly Compensated Participant group shall not exceed the greater
of:
(1) 125 percent of such percentage for the Non-Highly Compensated
Participant group; or
(2) the lesser of 200 percent of such percentage for the Non-Highly
Compensated Participant group, or such percentage for the Non-Highly
Compensated Participant group plus 2 percentage points. However, for
Plan Years beginning after December 31, 1988, to prevent the multiple
use of the alternative method described in this paragraph and Code
Section 401(m)(9)(A), any Highly Compensated Participant eligible
to make elective deferrals pursuant to Section 11.2 or any other cash
or deferred arrangement maintained by the Employer or an affiliated
Employer and to make Employee contributions or to receive matching
contributions under any plan maintained by the Employer or an
affiliated Employer shall have his actual contribution ratio reduced
pursuant to Regulation 1.401(m)-2. The provisions of Code Section
401(m) and Regulations 1.401(m)-1(b) and 1.401(m)-2 are incorporated
herein by reference.
(b) For the purposes of this Section and Section 11.7, "Actual
Contribution Percentage" for a Plan Year means, with respect to the Highly
Compensated Participant group and Non-Highly Compensated Participant
group, the average of the ratios (calculated separately for each
Participant in each group) of:
(1) the sum of Employer matching contributions made pursuant to
Section 11.1(b) (to the extent such matching contributions are not
used to satisfy the tests set forth in Section 11.4), voluntary
Employee contributions made pursuant to Section 4.7 and Excess
Contributions recharacterized as voluntary Employee contributions
pursuant to Section 11.5 on behalf of each such Participant for such
Plan Year; to
(2) the Participant's "414(s) Compensation" for such Plan Year.
(c) For purposes of determining the "Actual Contribution Percentage"
and the amount of Excess Aggregate Contributions pursuant to Section
11.7(d), only Employer matching contributions (excluding matching
contributions (excluding matching contributions forfeited or distributed
pursuant to Section 11.2(f), 11.5(a), or 11.7(a)) contributed to the Plan
prior to the end of the succeeding Plan Year shall be considered. In
addition, the Administrator may elect to take into account, with respect to
Employees eligible to have Employer matching contributions made pursuant to
Section 11.1(b) or voluntary Employee contributions made pursuant to
Section 4.7 allocated to their accounts, elective deferrals (as defined in
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Regulation 1.402(g)-1(b)) and qualified non-elective contributions as
defined in Code Section 401(m)(4)(C)) contributed to any plan maintained
by the Employer. Such elective deferrals and qualified non-elective
contributions shall be treated as Employer matching contributions subject
to Regulation 1.40(m)-1(b)(2) which is incorporated herein by reference.
However, for Plan Years beginning after December 31, 1988, the Plan Year
must be the same as the plan year of the plan to which the elective
deferrals and the qualified non-elective contributions are made.
(d) For the purpose of determining the actual contribution ratio of
a Highly Compensated Employee who is subject to the Family Member
aggregation rules of Code Section 414(q)(6) because such Employee is
either a "five percent owner" of the Employer or one of the ten (10)
Highly Compensated Employees paid the greatest "415 Compensation" during
the year, the following shall apply:
(1) The combined actual contribution ratio for the family group
(which shall be treated as one Highly Compensated Participant) shall
be the ratio determined by aggregating Employer matching
contributions made pursuant to Section 11.1(b) (to the extent such
matching contributions are not used to satisfy the tests set forth
in Section 11.4), voluntary Employee contributions made pursuant to
Section 4.7. Excess Contributions recharacterized as voluntary
Employee contributions pursuant to Section 11.5 and "414(s)
Compensation" of all eligible Family Members (including Highly
Compensated Participants). However, in applying the $200,000 limit
to "414(s) Compensation" for Plan Years beginning after December 31,
1988, Family Members shall include only the affected Employee's
spouse and any lineal descendants who have not attained age 19
before the close of the Plan Year.
(2) The Employer matching contributions made pursuant to Section
11.1(b) (to the extent such matching contributions are not used to
satisfy the tests set forth in Section 11.4), voluntary Employee
contributions made pursuant to Section 4.7. Excess Contributions
recharacterized as voluntary Employee contributions pursuant to
Section 11.5 and "414(s) Compensation" of all Family Members shall
be disregarded for purposes of determining the "Actual Contribution
Percentage" of the Non-Highly Compensated Participant group except
to the extent taken into account in paragraph (1) above.
(3) If a Participant is required to be aggregated as a member of
more than one family group in a plan, all Participants who are
members of those family groups that include the Participants are
aggregated as one family group in accordance with paragraphs (1) and
(2) above.
(e) For purposes of this Section and Code Sections 401(a)(4), 410(b)
and 401(m), if two or more plans of the Employer to which matching
contributions, Employee contributions, or both, are made are treated as
one plan for purposes of Code Sections
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401(a)(4) or 410(b) (other than the average benefits test under Code
Section 410(b)(2)(A)(ii) as in effect for Plan Years beginning after December
1, 1988), such plans shall be treated as one plan. In addition, two or more
plans of the Employer to which matching contributions, Employee contributions,
or both, are made may be considered as a single plan for purposes of
determining whether or not such plans satisfy Code Sections 401(a)(4), 410(b)
and 401(m). In such a case, the aggregated plans must satisfy this Section and
Code Sections 401(a)(4), 410(b) and 401(m) as though such aggregated loans were
a single plan. For plan years beginning after December 31, 1989, plans may be
aggregated under this paragraph only if they have the same plan year.
Notwithstanding the above, for Plan Years beginning after December 31,
1988, an employee stock ownership plan described in Code Section 4975(e)(7) may
not be aggregated with this Plan for purposes of determining whether the
employee stock ownership plan or this Plan satisfies this Section and Code
Sections 401(a)(4), 410(b) and 401(m).
(f) If a Highly Compensated Participant is a Participant under two or
more plans (other than an employee stock ownership plan as defined in Code
Section 4975(e)(7) for Plan Years beginning after December 31, 1988) which are
maintained by the Employer or an Affiliated Employer to which matching
contributions, Employee contributions, or both, are made, all such
contributions on behalf of such Highly Compensated Participant shall be
aggregated for purposes of determining such Highly Compensated Participant's
actual contribution ratio. However, for Plan Years beginning after December 31,
1988, if the plans have different plan years, this paragraph shall be applied
by treating all plans ending with or within the same calendar year as a single
plan.
(g) For purposes of Section 11.6(a) and 11.7, a Highly Compensated
Participant and a Non-Highly Compensated Participant shall include any Employee
eligible to have matching contributions made pursuant to Section 11.1(b)
(whether or not a deferred election was made or suspended pursuant to Section
11.2(e)) allocated to his account for the Plan Year or to make salary deferrals
pursuant to Section 11.2 (if the Employer uses salary deferrals to satisfy the
provisions of this Section) or voluntary Employee contributions pursuant to
Section 4.7 (whether or not voluntary employee contributions are made)
allocated to his account for the Plan Year.
(h) For purposes of this Section, "Matching Contribution" shall mean an
Employer contribution made to the Plan, or to a contract described in Code
Section 403(b), on behalf of a Participant on account of an Employee
contribution made by such Participant, or on account of a participant's
deferred compensation, under a plan maintained by the Employer.
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11.7 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event that for Plan Years beginning after December 31,
1986, the "Actual Contribution Percentage" for the Highly Compensated
Participant group exceeds the "Actual Contribution Percentage" for the
Non-Highly Compensated Participant group pursuant to Section 11.6(a), the
Administrator (on or before the fifteenth day of the third month following the
end of the Plan Year, but in no event later than the close of the following Plan
Year) shall direct the Trustee to distribute to the Highly Compensated
Participant having the highest actual contribution ratio, his portion of Excess
Aggregate Contributions (and Income allocable to such contributions) or, if
forfeitable, forfeit such non-Vested Excess Aggregate Contributions attributable
to Employer matching contributions (and Income allocable to such Forfeitures)
until either one of the tests set forth in Section 11.6(a) is satisfied, or
until his actual contribution ratio equals the actual contribution ratio of the
Highly Compensated Participant having the second highest actual contribution
ratio. This process shall continue until one of the tests set forth in Section
11.6(a) is satisfied. The distribution and/or Forfeiture of Excess Aggregate
Contributions shall be made in the following order:
(1) Employer matching contributions distributed and/or forfeited
pursuant to Section 11.5(a)(1);
(2) Voluntary employee contributions including Excess Contributions
recharacterized as voluntary Employee contributions pursuant to
Section 11.5(a)(2);
(3) Remaining Employer matching contributions.
(b) Any distribution or Forfeiture of less than the entire amount of
Excess Aggregate Contributions (and Income) shall be treated as a pro rata
distribution of Excess Aggregate Contributions and Income. Distribution of
Excess Aggregate Contributions shall be designated by the Employer as a
distribution of Excess Aggregate Contributions (and Income). Forfeitures of
Excess Aggregate Contributions shall be treated in accordance with Section 4.3.
However, no such Forfeiture may be allocated to a Highly Compensated Participant
whose contributions are reduced pursuant to this Section.
(c) Excess Aggregate Contributions attributable to amounts other
than voluntary Employee contributions, including forfeited matching
contributions, shall be treated as Employer contributions for purposes of Code
Sections 404 and 415 even if distributed from the Plan.
(d) For the purposes of this Section and Section 11.6. "Excess
Aggregate Contributions" means, with respect to any Plan Year, the excess of:
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(1) the aggregate amount of Employer matching contributions made
pursuant to Section 11.1(a) (to the extent such contributions are
taken into account pursuant to Section 11.6(a)), voluntary Employee
contributions made pursuant to Section 4.7, Excess Contributions
recharacterized as voluntary Employee contributions pursuant to
Section 11.5 and any Qualified Non-Elective Contributions or
elective deferrals taken into account pursuant to Section 11.6(c)
actually made on behalf of the Highly Compensated Participant group
for such Plan Year, over
(2) the maximum amount of such contributions permitted under the
limitations of Section 11.6(a).
(e) For each Highly Compensated Participant, the amount of Excess
Aggregate Contributions is equal to the total Employer matching
contributions made pursuant to Section 11.1(b) (to the extent taken into
account pursuant to Section 11.6(a)), voluntary Employee contributions
made pursuant to Section 4.7, Excess Contributions recharacterized as
voluntary Employee contributions pursuant to Section 11.5 and any
Qualified Non-Elective Contributions or elective deferrals taken into
account pursuant to Section 11.6(c) on behalf of the Highly Compensated
Participant (determined prior to the application of this paragraph) minus
the amount determined by multiplying the Highly Compensated Participant's
actual contribution ratio (determined after application of this paragraph)
by his "414(s) Compensation". The actual contribution ratio must be
rounded to the nearest one-hundredth of one percent for Plan Years
beginning after December 31, 1998. In no case shall the amount of Excess
Aggregate Contribution with respect to any Highly Compensated Participant
exceed the amount of Employer matching contributions made pursuant to
Section 11.1(b) (to the extent taken into account pursuant to Section
11.6(a)), voluntary Employee contributions made pursuant to Section 4.7,
Excess Contributions recharacterized as voluntary Employee contributions
pursuant to Section 11.5 and any Qualified Non-Elective Contributions or
elective deferrals taken into account pursuant to Section 11.6(c) on
behalf of such Highly Compensated Participant for such Plan Year.
(f) The determination of the amount of Excess Aggregate
Contributions with respect to any Plan Year shall be made after first
determining the Excess Contributions, if any, to be treated as voluntary
Employee contributions due to recharacterization for the plan year of any
other qualified cash or deferred arrangement (as defined in Code Section
401(k)) maintained by the Employer that ends with or within the Plan Year
or which are treated as voluntary Employee contributions due to
recharacterization pursuant to Section 11.5.
(g) The determination and correction of Excess Aggregate
Contributions of a Highly Compensated Participant whose actual
contribution ratio is determined under the family aggregation rules shall
be accomplished by reducing the actual contribution ratio shall and
allocating the Excess Aggregate Contributions for the family unit among
the Family Members in proportion to the sum of the Employer matching
contributions made
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pursuant to Section 11.1(b)(to the extent taken into account pursuant to
Section 11.6(a)), voluntary Employee contributions made pursuant to
Section 4.7, Excess Contributions recharacterized as voluntary Employee
contributions pursuant to Section 11.5 and any Qualified Non-Elective
Contributions or elective deferrals taken into account pursuant to Section
11.6(c) of each Family Member that were combined to determine the group
actual contribution ratio.
(h) Notwithstanding the above, within twelve (12) months after the
end of the Plan Year, the Employer may make a special Qualified
Non-Elective Contribution on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy one of the tests set forth
in Section 11.6. Such contribution shall be allocated to the Participant's
Qualified Non-Elective Account of each Non-Highly Compensated Participant
in the same proportion that each Non-Highly Compensated Participant's
Compensation for the year bears to the total Compensation of all
Non-Highly Compensated Participants. A separate accounting shall be
maintained for the purpose of excluding such contributions from the
"Actual Deferral Percentage" tests pursuant to Section 11.4.
(i) For purposes of this Section, "Income" means the income or loss
allocable to Excess Aggregate Contributions which shall equal the sum of
the allocable gain or loss for the Plan Year and the allocable gain or
loss for the period between the end of the Plan Year and the date of
distribution ("gap period"). The income or loss allocable to Excess
Aggregate Contributions for the Plan Year and the "gap period" is
calculated separately and is determined by multiplying the income or loss
for the Plan Year or the "gap period" by a fraction. The numerator of the
fraction is the Excess Aggregate Contributions for the Plan Year. The
denominator of the fraction is the total Participant's Account and
Voluntary Contribution Account attributable to Employer matching
contributions subject to Section 11.6, voluntary Employee contributions
made pursuant to Section 4.7, and any Qualified Non-Elective Contributions
and elective deferrals taken into account pursuant to Section 11.6(c) as
of the end of the Plan Year or the "gap period" reduced by the gain
allocable to such total amount for the Plan Year or the "gap period" and
increased by the loss allocable to such total amount for the Plan Year or
the "gap period".
In lieu of the "fractional method" described above, a "safe harbor
method" may be used to calculate the allocable Income for the "gap
period". Under such "safe harbor method", allocable Income for the "gap
period" shall be deemed to equal ten percent (10%) of the Income allocable
to Excess Aggregate Contributions for the Plan Year of the Participant
multiplied by the number of calendar months in the "gap period". For
purposes of determining the number of calendar months in the "gap period",
a distribution occurring on or before the fifteenth day of the month shall
be treated as having been made on the last day of the preceding month and
a distribution occurring after such fifteenth day shall be treated as
having been made on the first day of the next subsequent month.
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The Income allocable to Excess Aggregate Contributions resulting from
recharacterization of Elective Contributions shall be determined and
distributed as if such recharacterized Elective Contributions had been
distributed as Excess Contributions.
Notwithstanding the above, for any distribution under this Section
which is made after August 15, 1991, such distribution shall not include
any income for the "gap period". Further provided, for any distribution
under this Section which is made after August 15, 1991, the amount of
Income may be computed using a reasonable method which is consistent with
Section 4.3(c), provided such method is used consistently for all
Participants and for all such distributions for the Plan Year.
Notwithstanding the above, for Plan Years which began in or after
1987. Income during the "gap period" shall not be taken into account.
11.8 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) The Administrator, at the election of the Participant, shall
direct the Trustee to distribute to any Participant in any one Plan Year
up to the lesser of (1) 100% of his accounts as specified in the Adoption
Agreement valued as of the last Anniversary Date or other Valuation Date
or (2) the amount necessary to satisfy the immediate and heavy financial
need of the Participant. Any distribution made pursuant to this Section
shall be deemed to be made as of the first day of the Plan Year or, if
later, the Valuation Date immediately preceding the date of distribution,
and the account from which the distribution is made shall be reduced
accordingly. Withdrawal under this Section shall be authorized only if the
distribution is on account of one of the following or any other items
permitted by the Internal Revenue Service:
(1) Medical expenses described in Code Section 213(d) incurred by, or
necessary to obtain medical care for the Participant, his spouse, or
any of his dependents (as defined in Code Section 152);
(2) The purchase (excluding mortgage payments) of a principal
residence for the Participant;
(3) Payment of tuition and related educational fees for the next 12
months of post-secondary education for the Participant, his spouse,
children, or dependents; or
(4) The need to prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage of the
Participant's principal residence.
(b) No such distribution shall be made from the Participant's Account
until such Account has become fully Vested.
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<PAGE> 103
(c) No distribution shall be made pursuant to this Section unless the
Administrator, based upon the Participant's representation and such other
facts as are known to the Administrator, determines that all of the
following conditions are satisfied.
(1) The distribution is not in excess of the amount of the immediate
and heavy financial need of the Participant. The amount of the
immediate and heavy financial need may include any amounts necessary
to pay any federal, state or local income taxes or penalties
reasonably anticipated to result from the distribution.
(2) The Participant has obtained all distributions, other than
hardship distributions, and all nontaxable loans currently available
under all plans maintained by the Employer;
(3) The Plan, and all other plans maintained by the Employer, provide
that the Participant's elective deferrals and voluntary Employee
contributions will be suspended for at least twelve (12) months after
receipt of the hardship distribution; and
(4) The Plan, and all other plans maintained by the Employer, provide
that the Participant may not make elective deferrals for the
Participant's taxable year immediately following the taxable year of
the hardship distribution in excess of the applicable limit under
Code Section 402(g) for such next taxable year less the amount of
such Participant's elective deferrals for the taxable year of the
hardship distribution.
(d) Notwithstanding the above, distributions from the Participant's
Elective Account and Qualified Non-Elective Account pursuant to this
Section shall be limited solely to the Participant's Deferred Compensation
and any income attributable thereto credited to the Participant's Elective
Account as of December 31, 1988.
(e) Any distribution made pursuant to this Section shall be made in a
manner which is consistent with and satisfies the provisions of Section
6.5, including, but not limited to, all notice and consent requirements of
Code Sections 411(a)(11) and 417 and the Regulations thereunder.
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EXHIBIT 99.2
ADOPTION AGREEMENT
Nonstandardized 401(k) Profit Sharing Plan and Trust
For
SSE Telecom, Inc.
401(k) Profit Sharing Plan
CAUTION: The failure to properly fill out this Adoption
Agreement may result in disqualification of the Plan.
<PAGE> 2
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SELECTBENEFIT ADOPTION AGREEMENT: NONSTANDARDIZED 401(k) PROFIT SHARING
TABLE OF CONTENTS: PAGE i
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
EMPLOYER INFORMATION
<S> <C> <C>
A1 FULL NAME OF PLAN.................................................. 1
B1 NAME OF EMPLOYER................................................... 1
B2 ADDRESS............................................................ 1
B3 EMPLOYER IDENTIFICATION NUMBER..................................... 1
B4 DATE BUSINESS COMMENCED............................................ 1
B5 TYPE OF ENTITY..................................................... 1
B6 NAME OF TRUSTEE.................................................... 1
B7 TRUSTEES' ADDRESS.................................................. 1
B8 LOCATION OF EMPLOYER'S PRINCIPAL OFFICE............................ 1
B9 EMPLOYER FISCAL YEAR............................................... 1
PLAN INFORMATION
C1 EFFECTIVE DATE..................................................... 2
C2 PLAN YEAR.......................................................... 2
C3 ANNIVERSARY DATE................................................... 2
C4 PLAN NUMBER........................................................ 2
C5 NAME OF PLAN ADMINISTRATOR......................................... 2
C6 PLAN'S AGENT FOR SERVICE OF LEGAL PROCESS.......................... 2
ELIGIBILITY, VESTING AND RETIREMENT AGE
D1 ELIGIBLE EMPLOYEES................................................. 3
D2 EMPLOYEES OF AFFILIATED EMPLOYERS.................................. 3
D3 HOURS OF SERVICE................................................... 3
D4 YEARS OF SERVICE................................................... 3
D5 CONDITIONS OF ELIGIBILITY.......................................... 4
D6 EFFECTIVE DATE OF PARTICIPATION.................................... 4
D7 VESTING OF PARTICIPANT'S INTEREST.................................. 5
D8 FOR AMENDED PLANS.................................................. 6
D9 TOP HEAVY VESTING.................................................. 6
D10 VESTING............................................................ 6
D11 PLAN SHALL RECOGNIZE SERVICE WITH PREDECESSOR EMPLOYER............. 7
D12 NORMAL RETIREMENT AGE.............................................. 7
D13 NORMAL RETIREMENT DATE............................................. 7
D14 EARLY RETIREMENT DATE.............................................. 7
CONTRIBUTIONS, ALLOCATIONS AND DISTRIBUTIONS
E1 COMPENSATION....................................................... 8
E2 SALARY REDUCTION ARRANGEMENT - ELECTIVE CONTRIBUTION.............. 9
E3 FORMULA FOR DETERMINING EMPLOYER'S MATCHING CONTRIBUTION........... 10
E4 WILL A DISCRETIONARY EMPLOYER CONTRIBUTION BE PROVIDED............. 11
E5 QUALIFIED NON-ELECTIVE CONTRIBUTIONS............................... 11
E6 FORFEITURES........................................................ 11
E7 ALLOCATIONS TO ACTIVE PARTICIPANTS................................. 12
E8 ALLOCATIONS TO TERMINATED PARTICIPANTS............................. 13
E9 LIMITATIONS ON ALLOCATIONS......................................... 14
E10 DISTRIBUTIONS UPON DEATH........................................... 14
E11 LIFE EXPECTANCIES.................................................. 14
E12 CONDITIONS FOR DISTRIBUTIONS UPON TERMINATION...................... 14
E13 FORM OF DISTRIBUTIONS.............................................. 15
E14 PARTICIPATING EMPLOYER CONTRIBUTIONS............................... 15
TOP HEAVY REQUIREMENTS
F1 TOP HEAVY DUPLICATIONS............................................. 16
F2 PRESENT VALUE OF ACCRUED BENEFIT................................... 16
F3 TOP HEAVY DUPLICATIONS............................................. 16
MISCELLANEOUS
G1 LOANS TO PARTICIPANTS.............................................. 17
G2 PARTICIPANT DIRECTED INVESTMENTS................................... 17
G3 TRANSFERS FROM QUALIFIED PLANS..................................... 17
================================================================================
</TABLE>
Plan Name: SSE Telecom, Inc. 401(k) Profit Sharing Plan
Union Bank of California
<PAGE> 3
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SELECTBENEFIT ADOPTION AGREEMENT: NONSTANDARDIZED 401(k) PROFIT SHARING
TABLE OF CONTENTS: PAGE ii
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
G4 EMPLOYEES' VOLUNTARY CONTRIBUTIONS................................... 17
G5 HARDSHIP DISTRIBUTIONS............................................... 17
G6 PRE-RETIREMENT DISTRIBUTION.......................................... 18
G7 LIFE INSURANCE ...................................................... 18
DISCLOSURE
EXECUTION
</TABLE>
================================================================================
Plan Name: SSE Telecom, Inc. 401(k) Profit Sharing Plan
Union Bank of California
<PAGE> 4
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SELECTBENEFIT ADOPTION AGREEMENT: NONSTANDARDIZED 401(k) PROFIT SHARING
EMPLOYER INFORMATION: PAGE 1
- --------------------------------------------------------------------------------
EMPLOYER INFORMATION
The undersigned Employer adopts the Union Bank Of California SelectBENEFIT
Nonstandardized 401(k) Profit Sharing Plan and Trust for those Employees
who shall qualify as Participants hereunder, to be known as the
A1 FULL NAME OF PLAN: SSE Telecom, Inc. 401(k) Profit Sharing Plan
It shall be effective as of the date specified below. The Employer hereby
selects the following Plan specifications:
B1 NAME OF EMPLOYER: SSE Telecom, Inc.
B2 ADDRESS: (Street): 47823 Westinghouse Drive
(City, State Zipcode): Fremont, CA 94539
(Phone Number): (510) 624-8353
B3 EMPLOYER IDENTIFICATION NUMBER: 52-1466297
B4 DATE BUSINESS COMMENCED: June 20, 1988
B5 TYPE OF ENTITY
a. ( ) S Corporation
b. ( ) Professional Service Corporation
c. (x) Corporation
d. ( ) Sole Proprietorship
e. ( ) Partnership
f. ( ) Other: ________________________________________________________
AND, is the Employer a member of ...
g. a controlled group?
( ) Yes (x) No
h. an affiliated service group?
( ) Yes (x) No
B6 NAME OF TRUSTEE: Union Bank of California
B7 TRUSTEES' ADDRESS
Address: 14500 Roscoe Blvd., Suite 300
City, State Zipcode: Panorama City, CA 91402
B8 LOCATION OF EMPLOYER'S PRINCIPAL OFFICE:
a. (x) State
b. ( ) Commonwealth of c. California and this Plan and Trust shall be
governed under the same.
B9 EMPLOYER FISCAL YEAR means the 12 consecutive month period:
Commencing on (month day) a. October 1st (e.g., January 1st) and ending on
(month day) b. September 30th
================================================================================
Plan Name: SSE Telecom, Inc. 401(k) Profit Sharing Plan
Union Bank of California
<PAGE> 5
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SELECTBENEFIT ADOPTION AGREEMENT: NONSTANDARDIZED 401(k) PROFIT SHARING
PLAN INFORMATION: PAGE 2
- --------------------------------------------------------------------------------
PLAN INFORMATION
C1 EFFECTIVE DATE
This Adoption Agreement of the Union Bank Of California SelectBENEFIT
Nonstandardized 401(k) Profit Sharing Plan and Trust shall:
a. ( ) establish a new Plan and Trust Effective as of __________________
(hereinafter called the "Effective Date").
b. (x) constitute an amendment and restatement in its entirety of a
previously established qualified Plan and Trust of the Employer
which was effective October 1, 1981 (hereinafter called the
"Effective Date"). Except as specifically provided in the Plan,
the effective date of this amendment and restatement is July 1,
1997 (For TRA '86 amendments, enter the first day of the first
Plan Year beginning in 1989).
C2 PLAN YEAR means the 12 consecutive month period:
Commencing on (month day) a. January 1st (e.g., January 1st) and ending on
(month day) b. December 31st.
IS THERE A SHORT PLAN YEAR?
c. (x) No
d. ( ) Yes, beginning: _________________________________________________
and ending: _____________________________________________________
C3 ANNIVERSARY DATE of Plan (Annual Valuation Date)
a. (month day): December 31st
C4 PLAN NUMBER assigned by the Employer (select one)
a. ( ) 001
b. (x) 002
c. ( ) 003
d. ( ) Other: _________________________________________________________
C5 NAME OF PLAN ADMINISTRATOR (Document provides for the Employer to appoint
an Administrator. If none is named, the Employer will become the
Administrator.)
a. (x) Employer (Use Employer Address)
b. ( ) Other: (Name): ______________________________________________
(Address): ___________________________________________
(City, State Zipcode): _______________________________
(Phone Number): ______________________________________
(Administrator's Identification Number): _____________
C6 PLAN'S AGENT FOR SERVICE OF LEGAL PROCESS
a. (x) Employer (Use Employer Address)
b. ( ) Other: (Name): ______________________________________________
(Address): ___________________________________________
(City, State Zipcode): _______________________________
(Phone Number): ______________________________________
===============================================================================
Plan Name: SSE Telecom, Inc. 401(k) Profit Sharing Plan
Union Bank of California
<PAGE> 6
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SELECTBENEFIT ADOPTION AGREEMENT: NONSTANDARDIZED 401(k) PROFIT SHARING
ELIGIBILITY, VESTING & RETIREMENT AGE: PAGE 3
- --------------------------------------------------------------------------------
ELIGIBILITY, VESTING AND RETIREMENT AGE
D1 ELIGIBLE EMPLOYEES (Plan Section 1.15) shall mean:
NOTE: For purposes of this section, the term Employee shall include all
Employees of this Employer and any leased employees deemed to be Employees
under Code Section 414(n) or 414(o).
a. ( ) all Employees who have satisfied the eligibility requirements.
b. (x) all Employees who have satisfied the eligibility requirements
except those checked below:
1. ( ) Employees paid by commissions only.
2. ( ) Employees hourly paid.
3. ( ) Employees paid by salary.
4. (x) Employees whose employment is governed by a collective
bargaining agreement between the Employer and "employee
representatives" under which retirement benefits were the
subject of good faith bargaining. For this purpose, the
term "employee representatives" does not include any
organization more than half of whose members are employees
who are owners, officers, or executives of the Employer.
5. ( ) Highly Compensated Employees.
6. ( ) Employees who are non-resident aliens who received no earned
income (within the meaning of Code Section 911(d)(2)) from
the Employer which constitutes income from sources within
the United States (within the meaning of Code Section
861(a)(3)).
7. ( ) Other: ____________________________________________________
D2 EMPLOYEES OF AFFILIATED EMPLOYERS (Plan Section 1.16)
NOTE: If D2b is elected, each Affiliated Employer should execute this
Adoption Agreement as a Participating Employer.
Employees of Affiliated Employers:
a. ( ) will not (or N/A) be treated as Employees of the Employer
adopting the Plan.
b. (x) will be treated as Employees of the Employer adopting the
Plan.
D3 HOURS OF SERVICE (Plan Section 1.31) will be determined on the basis of the
method selected below. Only one method may be selected. The method
selected will be applied to all Employees covered under the Plan.
a. (x) On the basis of actual hours for which an Employee is paid or
entitled to payment.
b. ( ) On the basis of days worked. An Employee will be credited with
ten (10) Hours of Service if under the Plan such Employee would
be credited with at least one (1) Hour of Service during the day.
c. ( ) On the basis of weeks worked. An Employee will be credited with
forty-five (45) Hours of Service if under the Plan such Employee
would be credited with at least one (1) Hour of Service during
the week.
d. ( ) On the basis of semi-monthly payroll periods. An Employee will
be credited with ninety-five (95) Hours of Service if under the
Plan such Employee would be credited with at least one (1) Hour
of Service during the semi-monthly payroll period.
e. ( ) On the basis of months worked. An Employee will be credited with
one hundred ninety (190) Hours of Service if under the Plan such
Employee would be credited with at least one (1) Hour of Service
during the month.
D4 YEARS OF SERVICE
a. (x) 1,000 hour method
b. ( ) Elapsed Time Method
===============================================================================
Plan Name: SSE Telecom, Inc. 401(k) Profit Sharing Plan
Union Bank of California
<PAGE> 7
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SELECTBENEFIT ADOPTION AGREEMENT: NONSTANDARDIZED 401(k) PROFIT SHARING
ELIGIBILITY, VESTING & RETIREMENT AGE: PAGE 4
- --------------------------------------------------------------------------------
D5 CONDITIONS OF ELIGIBILITY (Plan Section 3.1) (Check either a OR b and c,
and if applicable, d)
Any Eligible Employee will be eligible to participate in the Plan if such
Eligible Employee has satisfied the service and age requirements, if any,
specified below:
a. (x) No Age or Service Required.
b. ( ) Service Requirement. (may not exceed 1 year)
1. ( ) None
2. ( ) 1/2 Year of Service
3. ( ) 1 Year of Service
4. ( ) Other:_____________________________________________________
NOTE: If the Year(s) of Service selected is or includes a fractional
year, an Employee will not be required to complete any specified
number of Hours of Service to receive credit for such fractional year.
If expressed in Months of Service, an Employee will not be required to
complete any specified number of Hours of Service in a particular
month.
c. ( ) Age Requirement (may not exceed 21)
1. ( ) N/A - No Age Requirement.
2. ( ) 20 1/2
3. ( ) 21
4. ( ) Other:_____________________________________________________
d. ( ) For New Plans Only - Regardless of any of the above age or
service requirements, any Eligible Employee who was employed on
the Effective Date of the Plan shall be eligible to participate
hereunder and shall enter the Plan as of such date.
D6 EFFECTIVE DATE OF PARTICIPATION (Plan Section 3.2)
An Eligible Employee shall become a Participant as of:
a. ( ) the first day of the Plan Year in which he met the requirements.
b. ( ) the first day of the Plan Year in which he met the requirements,
if he met the requirements in the first 6 months of the Plan
Year, or as of the first day of the next succeeding Plan Year if
he met the requirements in the last 6 months of the Plan Year.
c. ( ) the earlier of the first day of the seventh month or the first
day of the Plan Year coinciding with or next following the date
on which he met the requirements.
d. ( ) the first day of the Plan Year next following the date on which
he met the requirements. (Eligibility must be 1/2 Year of Service
or less and age 20 1/2 or less.)
e. ( ) the first day of the month coinciding with or next following the
date on which he met the requirements.
f. (x) Other: the first day of the calendar quarter (January 1, April 1,
July 1, October 1) coinciding with or next following the date on
which he met the requirements, provided that an Employee who has
satisfied the maximum age and service requirements that are
permissible in Section D5 above and who is otherwise entitled to
participate, shall commence participation no later than the
earlier of (a) 6 months after such requirements are satisfied, or
(b) the first day of the first Plan Year after such requirements
are satisfied, unless the Employee separates from service before
such participation date.
================================================================================
Plan Name: SSE Telecom, Inc. 401(k) Profit Sharing Plan
Union Bank of California
<PAGE> 8
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SELECTBENEFIT ADOPTION AGREEMENT: NONSTANDARDIZED 401(k) PROFIT SHARING
ELIGIBILITY, VESTING & RETIREMENT AGE: PAGE 5
- --------------------------------------------------------------------------------
D7 VESTING OF PARTICIPANT'S INTEREST (Plan Section 6.4(b))
The vesting schedule, based on number of Years of Service, shall be as
follows:
<TABLE>
<S><C>
a. ( ) 100% upon entering Plan. (Required if eligibility requirement is
greater than one (1) Year of Service.)
b. ( ) c. ( )
-------------------------------- --------------------------------
YEARS OF SERVICE PERCENT VESTED YEARS OF SERVICE PERCENT VESTED
================================ ================================
0 - 2 years 0% 0 - 4 years 0%
-------------------------------- --------------------------------
3 years 100% 5 years 100%
-------------------------------- --------------------------------
d. ( ) e. ( )
-------------------------------- --------------------------------
YEARS OF SERVICE PERCENT VESTED YEARS OF SERVICE PERCENT VESTED
================================ ================================
0 - 1 year 0% 1 year 25%
-------------------------------- --------------------------------
2 years 20% 2 years 50%
-------------------------------- --------------------------------
3 years 40% 3 years 75%
-------------------------------- --------------------------------
4 years 60% 4 years 100%
-------------------------------- --------------------------------
5 years 80%
--------------------------------
6 years 100%
--------------------------------
f. ( ) g. ( )
-------------------------------- --------------------------------
YEARS OF SERVICE PERCENT VESTED YEARS OF SERVICE PERCENT VESTED
================================ ================================
1 year 20% 0 - 2 years 0%
-------------------------------- --------------------------------
2 years 40% 3 years 20%
-------------------------------- --------------------------------
3 years 60% 4 years 40%
-------------------------------- --------------------------------
4 years 80% 5 years 60%
-------------------------------- --------------------------------
5 years 100% 6 years 80%
-------------------------------- --------------------------------
7 years 100%
--------------------------------
h. ( ) Other -- (must be at least as liberal as either c or g above):
--------------------------------
YEARS OF SERVICE PERCENT VESTED
================================
--------------------------------
--------------------------------
--------------------------------
--------------------------------
--------------------------------
--------------------------------
--------------------------------
</TABLE>
================================================================================
Plan Name: SSE Telecom, Inc. 401(k) Profit Sharing Plan
Union Bank of California
<PAGE> 9
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SELECTBENEFIT ADOPTION AGREEMENT: NONSTANDARDIZED 401(k) PROFIT SHARING
ELIGIBILITY, VESTING & RETIREMENT AGE: PAGE 6
- --------------------------------------------------------------------------------
D8 FOR AMENDED PLANS (Plan Section 6.4(f))
If the vesting schedule has been amended to a less favorable schedule,
enter the pre-amended schedule below:
<TABLE>
<S><C>
a. (x) Vesting schedule has not been amended or amended schedule is more
favorable in all years.
b. ( )
--------------------------------
YEARS OF SERVICE PERCENT VESTED
================================
--------------------------------
--------------------------------
--------------------------------
--------------------------------
--------------------------------
--------------------------------
--------------------------------
</TABLE>
D9 TOP HEAVY VESTING (Plan Section 6.4(c)
If this Plan becomes a Top Heavy Plan, the following vesting schedule,
based on number of Years of Service, for such Plan Year and each succeeding
Plan Year, whether or not the Plan is a Top Heavy Plan, shall apply and
shall be treated as a Plan amendment pursuant to this Plan. Once effective,
this schedule shall also apply to any contributions made prior to the
effective date of Code Section 416 and/or before the Plan became a Top
Heavy Plan.
NOTE: This section does not apply to the Account balances of any
Participant who does not have an Hour of Service after the Plan has
initially become top heavy. Such Participant's Account balance attributable
to Employer contributions and Forfeitures will be determined without regard
to this section.
<TABLE>
<S><C>
a. (x) N/A (D7a, b, d, e or f was selected)
b. ( ) c. ( )
-------------------------------- --------------------------------
YEARS OF SERVICE PERCENT VESTED YEARS OF SERVICE PERCENT VESTED
================================ ================================
0 - 1 year 0% 0 -2 years 0%
-------------------------------- --------------------------------
2 years 20% 3 years 100%
-------------------------------- --------------------------------
3 years 40%
--------------------------------
4 years 60%
--------------------------------
5 years 80%
--------------------------------
6 years 100%
--------------------------------
</TABLE>
D10 VESTING (Plan Section 6.4(h)) in determining Years of Service for vesting
purposes, Years of Service attributable to the following shall be EXCLUDED:
a. ( ) Service prior to the Effective Date of the Plan or a
predecessor plan.
b. (x) N/A.
c. ( ) Service prior to the time an Employee attained age 18.
d. (x) N/A.
================================================================================
Plan Name: SSE Telecom, Inc. 401(k) Profit Sharing Plan
Union Bank of California
<PAGE> 10
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SELECTBENEFIT ADOPTION AGREEMENT: NONSTANDARDIZED 401(K) PROFIT SHARING
ELIGIBILITY, VESTING & RETIREMENT AGE: PAGE 7
- --------------------------------------------------------------------------------
D11 PLAN SHALL RECOGNIZE SERVICE WITH PREDECESSOR EMPLOYER
NOTE: If the predecessor Employer maintained this qualified Plan, then
Years of Service with such predecessor Employer shall be recognized
pursuant to Section 1.78 and b. must be marked.
a. ( ) No.
b. (x) Yes: Years of Service with Fairchild Data shall be recognized for
the purpose of this Plan.
D12 NORMAL RETIREMENT AGE ("NRA") (Plan Section 1.43) means:
a. (x) the date a Participant attains his 65th birthday. (not to exceed
65th)
b. ( ) the later of the date a Participant attains his _____ birthday
(not to exceed 65th) or the c.____ (not to exceed 5th)
anniversary of the first day of the Plan Year in which
participation in the Plan commenced.
D13 NORMAL RETIREMENT DATE (Plan Section 1.44) shall commence:
a. (x) as of the Participant's "NRA".
OR (must select b. or c. AND 1. or 2.)
b. ( ) as of the first day of the month...
b. ( ) as of the Anniversary Date...
1. ( ) coinciding with or next following the Participant's "NRA".
2. ( ) nearest the Participant's "NRA".
D14 EARLY RETIREMENT DATE (Plan Section 1.12) means the:
a. ( ) No Early Retirement provision provided.
b. (x) date on which a Participant...
c. ( ) first day of the month coinciding with or next following the
date on which a Participant...
d. ( ) Anniversary Date coinciding with or next following the date on
which a Participant...
AND, if b, c or d was selected...
1. (x) attains his 55th birthday and has
2. (x) completed at least 10 Years of Service.
================================================================================
Plan Name: SSE Telecom, Inc. 401(k) Profit Sharing Plan
Union Bank of California
<PAGE> 11
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SELECTBENEFIT ADOPTION AGREEMENT: NONSTANDARDIZED 401(k) PROFIT SHARING
CONTRIBUTIONS, ALLOC. & DISTRIBUTIONS: PAGE 8
- --------------------------------------------------------------------------------
CONTRIBUTIONS, ALLOCATIONS AND DISTRIBUTIONS
E1 COMPENSATION (Plan Section 1.9)
a. COMPENSATION with respect to any Participant means:
1. (x) Wages, Tips and other Compensation (Form W-2).
2. ( ) Section 3401(a) wages (wages for withholding purposes).
3. ( ) 415 Safe-harbor compensation.
AND, Compensation
1. ( ) shall
2. (x) shall not
exclude (even if includible in gross income) reimbursements or other
expense allowances, business expenses, fringe benefits (cash or
noncash), moving expenses, deferred compensation, and welfare
benefits.
b. COMPENSATION shall be
1. (x) actually paid (must be selected if Plan is integrated)
2. ( ) accrued
c. HOWEVER, for non-integrated plans, Compensation shall exclude (select
all that apply):
1. (x) N/A. No exclusions
2. ( ) overtime
3. ( ) bonuses
4. ( ) commissions
5. ( ) other:
------------------------------------------------------
d. FOR PURPOSES OF THIS SECTION E1, Compensation shall be based on:
NOTE: The Limitation Year shall be the same as the year on which
Compensation is based.
1. (x) the Plan Year.
2. ( ) the Fiscal Year coinciding with or ending within the Plan
Year.
3. ( ) the Calendar Year coinciding with or ending within the Plan
Year.
e. HOWEVER, for an Employee's first year of Participation, Compensation
shall be recognized as of:
1. ( ) the first day of the Plan Year.
2. (x) the date the Participant entered the Plan.
f. IN ADDITION, COMPENSATION and "414(s) Compensation"
1. (x) shall
2. ( ) shall not
include compensation which is not currently includible in the
Participant's gross income by reason of the application of Code
Sections 125, 402(e)(3), 402(h)(1)(B) or 403(b).
================================================================================
Plan Name: SSE Telecom, Inc. 401(k) Profit Sharing Plan
Union Bank of California
<PAGE> 12
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SELECTBENEFIT ADOPTION AGREEMENT: NONSTANDARDIZED 401(k) PROFIT SHARING
CONTRIBUTIONS, ALLOC. & DISTRIBUTIONS: PAGE 9
- --------------------------------------------------------------------------------
E2 SALARY REDUCTION ARRANGEMENT - ELECTIVE CONTRIBUTION (Plan Section 11.2)
Each Employee may elect to have his Compensation reduced by:
a. ( ) ______ %
b. (x) up to 20%
c. ( ) from ______ % to ______ %
d. ( ) up to the maximum percentage allowable not to exceed the limits of
Code Sections 401(k), 404 and 415.
AND...
e. (x) A Participant may elect to commence salary reductions as of the
first day of any calendar quarter (January 1, April 1, July 1, or
October 1). A participant may modify the amount of salary reductions as
of anytime.
AND...
Shall cash bonuses paid within 2 1/2 months after the end of the Plan
Year be subject to the salary reduction election?
f. ( ) Yes
g. (X) No
================================================================================
Plan Name: SSE Telecom, Inc. 401(k) Profit Sharing Plan
Union Bank of California
<PAGE> 13
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SELECTBENEFIT ADOPTION AGREEMENT: NONSTANDARDIZED 401(k) PROFIT SHARING
CONTRIBUTIONS, ALLOC. & DISTRIBUTION: PAGE 10
- --------------------------------------------------------------------------------
E3 FORMULA FOR DETERMINING EMPLOYER'S MATCHING CONTRIBUTION (Plan
Section 11.1(b))
a. ( ) N/A There shall be no matching contributions.
b. (x) The Employer shall make matching contributions equal to 50%
(e.g. 50%) of the Participant's salary reductions.
c. ( ) The Employer may make matching contributions equal to a
discretionary percentage, to be determined by the Employer, of
the Participant's salary reductions.
d. ( ) The Employer shall make matching contributions equal to the sum
of __% of the portion of the Participant's salary reduction
which does not exceed ___% of the Participant's Compensation
plus ___% of the portion of the Participant's salary reduction
which exceeds ___% of the Participant's Compensation, but does
not exceed ___% of the Participant's Compensation.
e. ( ) The Employer shall make matching contributions equal to the
percentage determined under the following schedule:
Years of Service Matching Percentage
================ ===================
---------------- -------------------
---------------- -------------------
---------------- -------------------
f. ( ) Other __________________________________________________________
NOTE: If the Employer provides different matching contribution
rates for increasing levels of compensation, matching
contribution rates must decrease with each successive level of
compensation.
FOR PLANS WITH MATCHING CONTRIBUTIONS
g. (X) Matching contributions
h. ( ) shall
i. (x) shall not
be used in satisfying the deferral percentage tests. (If used,
full vesting and restrictions on withdrawals will apply and the
match will be deemed to be an Elective Contribution).
j. (x) Shall a Year of Service be required in order to share in the
matching contributions?
With respect to Plan Years beginning after 1989...
1. ( ) Yes (Could cause Plan to violate minimum participation
and coverage requirements under code Sections
401(a)(26) and 410)
2. (x) No, a Participant need only complete 1 Hours of
Service. (Note: Hours of Service may not exceed 1,000).
With respect to Plan Years beginning before 1990...
1. (x) N/A New Plan or same a years beginning after 1989.
2. ( ) Yes
3. ( ) No, a Participant need only complete ___ Hours of
Service. (Note: Hours of Service may not exceed 1,000).
k. (x) In determining matching contributions, only salary
reductions up to 6% of a Participant's Compensation will be
matched.
l. ( ) N/A
m. (x) The matching contribution made on behalf of a Participant
for any Plan Year shall not exceed $1,000.
n. ( ) N/A
o. (x) Matching contributions shall be made on behalf of
1. (x) all Participants.
2. ( ) only Non-Highly Compensated Employees.
p. ( ) Notwithstanding anything in the Plan to the contrary, all
matching contributions which relate to distributions of
Excess Deferred Compensation, Excess Contributions and
Excess Aggregate Contributions shall be Forfeited. (Select
this option only if it is applicable.)
================================================================================
Plan Name: SSE Telecom, Inc. 401(k) Profit Sharing Plan
Union Bank of California
<PAGE> 14
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SELECT BENEFIT ADOPTION AGREEMENT: NONSTANDARDIZED 401(k) PROFIT SHARING
CONTRIBUTIONS, ALLOC. & DISTRIBUTIONS: PAGE 11
- --------------------------------------------------------------------------------
E4 WILL A DISCRETIONARY EMPLOYER CONTRIBUTION BE PROVIDED (Other than a
discretionary matching or qualified non-elective contribution) (Plan
Section 11.1(c))?
a. ( ) No.
b. (x) Yes, the Employer may make a discretionary contribution out of
its current or accumulated Net Profit.
c. ( ) Yes, the Employer may make a discretionary contribution which is
not limited to its current or accumulated Net Profit.
IF YES (b. or c. is selected above), the Employer's discretionary
contribution shall be allocated as follows:
FOR A NON-INTEGRATED PLAN
d. (x) The Employer discretionary contribution for the Plan Year shall
be allocated in the same ratio as each Participant's
Compensation bears to the total of such Compensation of all
Participants.
FOR AN INTEGRATED PLAN
e. ( ) The Employer discretionary contribution for the Plan Year shall
be allocated in accordance with the Plan Section 4.3(b)(2) based
on a Participant's Compensation in excess of:
f. ( ) The Taxable Wage Base.
g. ( ) The greater of $10,000 or 20% of the Taxable Wage Base.
h. ( ) _____% of the Taxable Wage Base. (see Note below).
i. ( ) ___________. (see Note below).
NOTE: The integration percentage of 5.7% shall be reduced to:
1. 4.3% if h. or i. above is more than 20% and less than or equal to
80% of the Taxable Wage Base.
2. 5.4% if h. or i. above is less than 100% and more than 80% of the
Taxable Wage Base.
E5 QUALIFIED NON-ELECTIVE CONTRIBUTIONS (Plan Section 11.1 (d))
a. (x) N/A. There shall be no Qualified Non-Elective Contributions
except as provided in Section 11.5(b) and 11.7(h).
b. ( ) The Employer shall make a Qualified Non-Elective Contribution
equal to ___% of the total compensation of all Participants
eligible to share in the allocations.
c. ( ) The Employer may make a Qualified Non-Elective Contribution in
an amount to be determined by the Employer.
AND, if b. or c. is selected above, any Qualified Non-Elective
Contributions shall be made to:
d. ( ) all Participants.
e ( ) only Non-Highly Compensated Employees.
E6 FORFEITURES (Plan Section 4.3(e))
a. Forfeitures of contributions other than matching contributions shall
be...
1. (x) added to the Employer's contribution under the Plan.
2. ( ) allocated to all Participants eligible to share in the
allocations in the same proportion that each Participant's
Compensation for the year bears to the Compensation of all
Participants for such year.
b. Forfeitures of matching contributions shall be...
1. ( ) N/A. No matching contributions or match is fully vested.
2. (x) used to reduce the Employer's matching contribution.
3. ( ) allocated to all Participant's eligible to share in the
allocations in proportion to each such Participant's
Compensation for the year.
4. ( ) allocated to all Non-Highly Compensated Employee's eligible
to share in the allocations in proportion to each such
Participant's Compensation for the year.
5. ( ) allocated as an additional Employer Matching Contribution to
all Participants, who are otherwise eligible to receive
matching contributions for the Plan Year, in proportion to
each Participant's salary reductions for the Plan Year.
6. ( ) allocated as an additional Employer Matching Contribution to
only the Plan's Non-Highly Compensated Participants, who are
otherwise eligible to receive matching contributions for the
Plan Year, in proportion to each such Non-Highly Compensated
Participant's salary reductions for the Plan Year.
c. AND, regardless of the above, shall Forfeitures first be used to pay
any administrative expenses?
1. (x) Yes.
2. ( ) No.
================================================================================
Plan Name: SSE Telecom, Inc. 401(k) Profit Sharing Plan
Union Bank of California
<PAGE> 15
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SELECTBENEFIT ADOPTION AGREEMENT: NONSTANDARDIZED 401(k) PROFIT SHARING
CONTRIBUTIONS, ALLOC. & DISTRIBUTIONS: PAGE 12
- --------------------------------------------------------------------------------
E7 ALLOCATIONS TO ACTIVE PARTICIPANTS (Plan Section 4.3)
With respect to Plan Years beginning after 1989, a Participant shall be
required to complete...
a. ( ) a Year of Service (Plan may become discriminatory)
b. ( ) ______ hours of service. (Note: specified hours of service may not
exceed 1,000 and may become discriminatory if over 500)
c. (x) one hour of service
in order to share in any Non-Elective Contributions (other than matching
contributions) or Qualified Non-Elective contributions. For Plan Years
beginning before 1990, the Plan provides that a Participant must complete a
Tear of Service to share in the allocations.
================================================================================
Plan Name: SSE Telecom, Inc. 401(k) Profit Sharing Plan
Union Bank of California
<PAGE> 16
- --------------------------------------------------------------------------------
SELECTBENEFIT ADOPTION AGREEMENT: NONSTANDARDIZED 401(k) PROFIT SHARING
CONTRIBUTIONS, ALLOC. & DISTRIBUTIONS: PAGE 13
- --------------------------------------------------------------------------------
E8 ALLOCATIONS TO TERMINATED PARTICIPANTS (Plan Section 4.3(k))
Any Participant who terminated employment during the Plan Year (i.e. not
actively employed on the last day of the Plan Year) for reasons other than
death, Total and Permanent Disability or retirement:
a. With respect to Employer Non-Elective Contributions (other than
matching), Qualified Non-Elective Contributions, and Forfeitures:
NOTE: If a.1.iii or iv is selected, the Plan could violate minimum
participations and coverage requirements under Code Sections
401(a)(26) and 410.
1. For Plan Years beginning after 1989,
i. ( ) N/A, Plan does not provide for such contributions.
ii. ( ) shall share in the allocations provided such
Participant completed more than 500 Hours of Service.
iii. ( ) shall share in such allocations provided such
Participant completed a Year of Service.
iv. (x) shall not share in such allocations, regardless of
Hours of Service.
2. For Plan Years beginning before 1990,
i. (x) N/A, new Plan, or same as for Plan Years beginning
after 1989.
ii. ( ) shall share in such allocations provided such
Participant completed a Year of Service.
iii. ( ) shall not share in such allocations, regardless of
Hours of Service
b. With respect to the allocation of Employer Matching contributions,
a Participant:
NOTE: If b.1.iv or v is selected, the Plan could violate minimum
participation and coverage requirements under Code Section 401(a)(26)
and 410.
1. For Plan Years beginning after 1989.
i. ( ) N/A, Plan does not provide for matching contributions.
ii. (x) shall share in the allocations, regardless of Hours of
Service.
iii. ( ) shall share in the allocations provided such
Participant completed more than 500 Hours of Service.
iv. ( ) shall share in such allocations provided such
Participant completed a Year of Service.
v. ( ) shall not share in such allocations, regardless of
Hours of Service.
2. For Plan Years beginning before 1990,
i. (x) N/A, new Plan, or same as years beginning after 1989.
ii. ( ) shall share in the allocations, regardless of Hours of
Service.
iii. ( ) shall share in such allocations provided such
Participant completed a Year of Service.
iv. ( ) shall not share in such allocations, regardless of
Hours of Service.
c. For Plan Years beginning prior to 1990, any Participant who terminated
employment during the Plan Year for reason of...
1. (x) Death
2. (x) Disability
3. (x) Retirement
shall share in the allocations of Contributions and Forfeitures
regardless of Hours of Service completed during the Plan Year.
d. For Plan Years beginning after 1989, any Participant who terminated
employment during the Plan Year for reason of...
1. (x) Death
2. (x) Disability
3. (x) Retirement
shall share in the allocations of Contributions and Forfeitures
regardless of Hours of Service completed during the Plan Year.
================================================================================
Plan Name: SSE Telecom, Inc. 401(k) Profit Sharing Plan
Union Bank of California
<PAGE> 17
- --------------------------------------------------------------------------------
SELECTBENEFIT ADOPTION AGREEMENT: NONSTANDARDIZED 401(k) PROFIT SHARING
CONTRIBUTIONS, ALLOC. & DISTRIBUTION: PAGE 14
- --------------------------------------------------------------------------------
E9 LIMITATIONS ON ALLOCATIONS (Plan Section 4.4)
a. If any Participant is or was covered under another qualified defined
contribution plan maintained by the Employer, other than a Master or
Prototype Plan, or if the Employer maintains a welfare benefit fund,
as defined in Code Section 419(e), or an individual medical account,
as defined in Code Section 415(l)(2), under which amounts are treated
as Annual Additions with respect to any Participant in this Plan;
1. (x) N/A
2. ( ) The provisions of Section 4.4(b) of the Plan will apply as
if the other plan were a Master or Prototype Plan.
3. ( ) Provide the method under which the Plans will limit total
Annual Additions to the Maximum Permissible Amount, and will
properly reduce any Excess Amounts, in a manner that
precludes Employer discretion.
___________________________________________________________
___________________________________________________________
___________________________________________________________
b. If any Participant is or ever has been a Participant in a defined
benefit plan maintained by the Employer:
1. (x) N/A.
2. ( ) In any Limitation Year, the Annual Additions credited to the
Participant under this Plan may not cause the sum of the
Defined Benefit Plan Fraction and the Defined Contribution
Fraction to exceed 1.0. If the Employer's contribution that
would otherwise be made on the Participant's behalf during
the limitation year would cause the 1.0 limitation to be
exceeded, the rate of contribution under this Plan will be
reduced so that the sum of the fractions equals 1.0. If the
1.0 limitation is exceeded because of an Excess Amount,
such Excess Amount will be reduced in accordance with
Section 4.4(a)(4) of the Plan.
3. ( ) Provide the method under which the Plans involved will
satisfy the 1.0 limitation in a manner that precludes
Employer discretion.
___________________________________________________________
___________________________________________________________
___________________________________________________________
E10 DISTRIBUTIONS UPON DEATH (Plan Section 6.6(h)
Distributions upon the death of a Participant prior to receiving any
benefits shall...
a. (x) be made pursuant to the election of the Participant or
beneficiary.
b. ( ) begin within 1 year of death for a designated beneficiary and be
payable over the life (or over a period not exceeding the life
expectancy) of such beneficiary, except that if the beneficiary
is the Participant's spouse, begin within the time the
Participant would have attained age 70 1/2.
c. ( ) be made within 5 years of death for all beneficiaries.
d. ( ) other:__________________________________________________________
E11 LIFE EXPECTANCIES (Plan Section 6.5(f)) for minimum distributions required
pursuant to Code Section 401(a)(9) shall...
a. (x) be recalculated at the Participant's election.
b. ( ) be recalculated.
c. ( ) not be recalculated.
E12 CONDITIONS FOR DISTRIBUTIONS UPON TERMINATION
Distributions upon termination of employment pursuant to Section 6.4(a) of
the Plan shall not be made unless the following conditions have been
satisfied:
a. (x) N/A, Immediate Distributions may be made at Participant's
election.
b. ( ) The Participant has incurred ____ 1-Year Break(s) in Service.
c. ( ) The Participant has reached his or her Early or Normal
Retirement Age.
d. ( ) Distributions may be made at the Participant's election on or
after the Anniversary Date following termination of employment.
e. ( ) Other:_________________________________________________________
===============================================================================
Plan Name: SSE Telecom, Inc. 401(k) Profit Sharing Plan
Union Bank of California
<PAGE> 18
- --------------------------------------------------------------------------------
SELECTBENEFIT ADOPTION AGREEMENT: NONSTANDARDIZED 401(K) PROFIT SHARING
CONTRIBUTIONS, ALLOC. & DISTRIBUTIONS: PAGE 15
- --------------------------------------------------------------------------------
E13 FORM OF DISTRIBUTIONS (Plan Sections 6.5 and 6.6)
Distributions under the Plan may be made...
a. 1. (x) in lump sums.
2. ( ) in lump sums or installments.
b. AND, pursuant to Plan Section 6.13,
1. (x) no annuities are allowed (avoids Joint and Survivor rules).
2. ( ) annuities are allowed (Plan Section 6.13 shall not apply).
NOTE: b1. may not be elected if this is an amendment to a plan
which permitted annuities as a form of distribution or if this Plan
has accepted a plan to plan transfer of assets from a plan which
permitted annuities as a form of distribution.
c. AND may be made in...
1. (x) cash only (except for insurance or annuity contracts).
2. ( ) cash or property.
E14 PARTICIPATING EMPLOYER CONTRIBUTIONS
The contributions made by a Participating Employer shall:
a. (x) be allocated to all Employees.
b. ( ) only be allocated to the Employees of the Participating Employer
making the contribution.
================================================================================
Plan Name: SSE Telecom, Inc. 401(k) Profit Sharing Plan
Union Bank of California
<PAGE> 19
- --------------------------------------------------------------------------------
SELECTBENEFIT ADOPTION AGREEMENT: NONSTANDARDIZED 401(k) PROFIT SHARING
TOP HEAVY REQUIREMENTS: PAGE 16
- --------------------------------------------------------------------------------
TOP HEAVY REQUIREMENTS
F1 TOP HEAVY DUPLICATIONS (Plan Section 4.3(i))
When a Non-Key Employee is a Participant in this Plan and a Defined Benefit
Plan maintained by the Employer, indicate which method shall be utilized to
avoid duplication of top heavy minimum benefits.
a. (x) The Employer does not maintain a Defined Benefit Plan.
b. ( ) A minimum, non-integrated contribution of 5% of each Non-Key
Employee's total Compensation shall be provided in this Plan, as
specified in Section 4.3(i). (The Defined Benefit and Defined
Contribution Fractions will be computed using 100% if this
choice is selected.)
c. ( ) A minimum, non-integrated contribution of 7 1/2% of each Non-Key
Employee's total Compensation shall be provided in this Plan, as
specified in Section 4.3(i). (If this choice is selected, the
Defined Benefit and Defined Contribution Fractions will be
computed using 125% for all Plan Years in which the Plan is Top
Heavy, but not Super Top Heavy.)
d. ( ) Specify the method under which the Plans will provide top heavy
minimum benefits for Non-Key Employees that will preclude
Employer discretion and avoid inadvertent omissions, including
any adjustments required under Code Section 415(e).
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
F2 PRESENT VALUE OF ACCRUED BENEFIT (Plan Section 2.2) for Top Heavy purposes
where the Employer maintains a Defined Benefit Plan in addition to this
Plan, shall be based on...
a. (x) N/A. The Employer does not maintain a defined benefit plan.
b. ( ) Interest Rate:
---------------------------------------------------
Mortality Table:
-------------------------------------------------
F3 TOP HEAVY DUPLICATIONS: Employer maintaining two (2) or more Defined
Contribution Plans.
a. (x) N/A.
b. ( ) A minimum, non-integrated contribution of 3% of each Non-Key
Employee's total Compensation shall be provided in the Money
Purchase Plan (or other plan subject to Code Section 412), where
the Employer maintains two (2) or more non-paired Defined
Contribution Plans.
c. ( ) Specify the method under which the Plans will provide top heavy
minimum benefits for Non-Key Employees that will preclude
Employer discretion and avoid inadvertent omissions, including
any adjustments required under Code Section 415(e).
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
================================================================================
Plan Name: SSE Telecom, Inc. 401(k) Profit Sharing Plan
Union Bank of California
<PAGE> 20
- --------------------------------------------------------------------------------
SELECTBENEFIT ADOPTION AGREEMENT: NONSTANDARDIZED 401(k) PROFIT SHARING
MISCELLANEOUS: PAGE 17
- --------------------------------------------------------------------------------
MISCELLANEOUS
G1 LOANS TO PARTICIPANTS (Plan Section 7.1)
a. (x) Yes, loans may be made up to $50,000 or 1/2 Vested interest.
b. ( ) No, loans may not be made.
If YES, (check all that apply)...
c. (x) loans shall be treated as a Directed Investment.
d. ( ) loans shall only be made for hardship or financial necessity.
e. (x) the minimum loan shall be $1,000. Note: Minimum loan amount may
not exceed $1,000.
NOTE: Department of Labor Regulations require the adoption of a SEPARATE
written loan program setting forth the requirements outlined in Plan
Section 7.1.
G2 PARTICIPANT DIRECTED INVESTMENTS (Plan Section 4.8)
a. (x) Yes, for all accounts of the Participant.
b. ( ) Yes, but subject to the following limitations:
-------------------
-----------------------------------------------------------------
c. ( ) No, participant directed investments are not permitted.
d. (x) If participant direction of investment is permitted, transfers
pursuant to this Section 4.8 shall be effected by:
1. ( ) the first day of the following month.
2. ( ) the first day of the following calendar quarter.
3. ( ) the sooner of the first day of the following Plan Year or
the first day of the following seventh month of the plan
Year.
4. ( ) the first day of the following Plan Year.
5. (x) daily, to the extent administratively feasible.
G3 TRANSFERS FROM QUALIFIED PLANS (Plan Section 4.6)
a. (x) Yes, transfers from qualified plans (and rollovers) will be
allowed.
b. ( ) No, transfers from qualified plans (and rollovers) will not be
allowed.
AND, transfers shall be permitted...
c. (x) from any Employee, even if not a Participant.
d. ( ) from Participants only.
G4 EMPLOYEES' VOLUNTARY CONTRIBUTIONS (Plan Section 4.7)
NOTE: TRA '86 subjects voluntary contributions to strict discrimination
rules.
a. ( ) Yes, Voluntary Contributions are allowed subject to the limits
of Section 4.10.
b. (x) No Voluntary Contributions will not be allowed.
G5 HARDSHIP DISTRIBUTIONS (Plan Section 6.11 and 11.8)
a. (x) Yes, from any accounts which are 100% Vested.
b. ( ) Yes, from Participant's Elective Account only.
c. ( ) Yes, but limited to the following account(s):
--------------------
d. ( ) No.
NOTE: Distributions from a Participant's Elective Account are limited to
the portion of such account attributable to such Participant's Deferred
Compensation and earnings attributable thereto up to December 31, 1988.
Also hardship distributions are not permitted from a Participant's
Qualified Non-Elective Account.
================================================================================
Plan Name: SSE Telecom, Inc. 401(k) Profit Sharing Plan
Union Bank of California
<PAGE> 21
- --------------------------------------------------------------------------------
SELECTBENEFIT ADOPTION AGREEMENT: NONSTANDARDIZED 401(k) PROFIT SHARING
MISCELLANEOUS: PAGE 18
- --------------------------------------------------------------------------------
G6 PRE-RETIREMENT DISTRIBUTION (Plan Section 6.10)
a. (x) If a Participant has reached the age of 59 1/2, distributions may
be made, at the Participant's election, from the following
accounts(s): all which are 100% Vested without requiring the
Participant to terminate employment.
b. ( ) No pre-retirement distribution may be made.
NOTE: Distributions from a Participant's Elective Account and Qualified
Non-Elective Account are not permitted prior to age 59 1/2.
G7 LIFE INSURANCE may be purchased with Plan contributions.
a. (x) No life insurance may be purchased.
b. ( ) Yes, at the option of the Administrator.
c. ( ) Yes, at the option of the Participant.
AND, the purchase of initial or additional life insurance shall be subject
to the following limitations: (select all that apply)
d. ( ) N/A, no limitations.
e. ( ) each initial Contract shall have a minimum face amount of
$ _____ .
f. ( ) each additional Contract shall have a minimum face amount of
$ _____ .
g. ( ) the Participant has completed _____ Years of Service.
h. ( ) the Participant has completed _____ Years of Service while a
Participant in the Plan.
i. ( ) the Participant is under age _____ on the Contract issue date.
j. ( ) the maximum amount of all Contracts on behalf of a Participant
shall not exceed $ _____ .
k. ( ) the maximum face amount of life insurance shall be $ _____ .
================================================================================
Plan Name: SSE Telecom, Inc. 401(k) Profit Sharing Plan
Union Bank of California
<PAGE> 22
- --------------------------------------------------------------------------------
SELECTBENEFIT ADOPTION AGREEMENT: NONSTANDARDIZED 401(k) PROFIT SHARING
DISCLOSURE: PAGE 19
- --------------------------------------------------------------------------------
DISCLOSURE
The adopting Employer may not rely on an opinion letter issued by the National
Office of the Internal Revenue Service as evidence that the plan is qualified
under Code Section 401. In order to obtain reliance with respect to plan
qualification, the Employer must apply to the appropriate Key District Office
for a determination letter.
This Adoption Agreement may be used only in conjunction with basic Plan document
#04. This Adoption Agreement and the basic Plan document shall together be known
as Union Bank of California SELECTBENEFIT Nonstandardized 401(k) Profit Sharing
Plan and Trust #04-005.
The adoption of this Plan, its qualification by the IRS, and the related tax
consequences are the responsibility of the Employer and its independent tax and
legal advisors.
Union Bank of California will notify the Employer of any amendments made to the
Plan or of the discontinuance or abandonment of the Plan provided this Plan has
been acknowledged by Union Bank of California or its authorized representative.
Furthermore, in order to be eligible to receive such notification, we agree to
notify Union Bank of California of any change in address.
================================================================================
Plan Name: SSE Telecom, Inc. 401(k) Profit Sharing Plan
Union Bank of California
<PAGE> 23
- --------------------------------------------------------------------------------
SELECTBENEFIT ADOPTION AGREEMENT:
NONSTANDARDIZED 401(k) PROFIT SHARING
EXECUTION: PAGE 20
- --------------------------------------------------------------------------------
EXECUTION
IN WITNESS WHEREOF, the Employer and Trustee hereby cause this Plan to be
executed on this 1st day of July, 1997. Furthermore, this Plan may not be used
unless acknowledged by Union Bank of California or its authorized
representative.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
UNION BANK OF CALIFORNIA, TRUSTEE
<S> <C>
Donna Ross Vice President
------------------------------------------ ---------------------------
Name of Authorized Signer for Union Bank Title
of California
/s/ DONNA ROSS 7-2-97
------------------------------------------ ---------------------------
Signature of Authorized Signer for Union Date
Bank of California
EMPLOYER
Claire L. Mendonca Director of Human Resources
------------------------------------------ ---------------------------
Name of Authorized Signer for Plan Sponsor Title
/s/ CLAIRE L. MENDONCA 7-1-97
------------------------------------------ ---------------------------
Signature of Authorized Signer for Date
Plan Sponsor
PARTICIPATING EMPLOYER
------------------------------------------ ---------------------------
Name of Authorized Signer for Plan Sponsor Title
------------------------------------------ ---------------------------
Signature of Authorized Signer for Date
Plan Sponsor
- --------------------------------------------------------------------------------
</TABLE>
This Plan may not be used, and shall not be deemed to be a Prototype Plan,
unless an authorized representative of Union Bank of California has acknowledged
the use of the Plan. Such acknowledgement is for administerial purposes only. It
acknowledges that the Employer is using the Plan but does not represent that
this Plan, including the choices selected on the Adoption Agreement, has been
reviewed by a representative of the sponsor or constitutes a qualified
retirement plan.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
UNION BANK OF CALIFORNIA, COMPLIANCE OFFICER
<S> <C>
Ernest L. Tichenor Document Technician
------------------------------------------ ---------------------------
Name of Authorized Signer for Union Bank Title
of California
/s/ ERNEST L. TICHENOR July 11, 1997
------------------------------------------ ---------------------------
Signature of Authorized Signer for Union Date
Bank of California
- --------------------------------------------------------------------------------
</TABLE>
With regard to any questions regarding the provisions of the Plan, adoption of
the Plan, or the effect of an opinion letter from the IRS, call or write (this
information must be completed by the sponsor of this Plan or its designated
representative):
Name: Ernest L. Tichenor, c/o Union Bank of California Phone: (818) 895-4135
------------------------------------------------- --------------
Street Address: 14500 Roscoe Blvd., Suite 300
----------------------------------------------------------------
City, State, Zipcode: Panorama City, Ca 91402
----------------------------------------------------------
================================================================================
Plan Name: SSE Telecom, Inc. 401(k) Profit Sharing Plan
Union Bank of California
<PAGE> 1
EXHIBIT 99.3
TRUST AGREEMENT
PURSUANT TO THE UNION BANK OF CALIFORNIA
MASTER DEFINED CONTRIBUTION PLAN
<PAGE> 2
TRUST AGREEMENT
PURSUANT TO THE UNION BANK
MASTER DEFINED CONTRIBUTION PLAN
TABLE OF CONTENTS
PAGE
----
ARTICLE I
POWERS, DUTIES AND
RIGHTS OF TRUSTEE
<TABLE>
<S> <C> <C>
Section 1.1 GENERAL 1
Section 1.2 INVESTMENT OPTIONS 2
Section 1.3 POWERS OF TRUSTEE REGARDING INVESTMENTS 3
Section 1.4 OTHER POWERS OF TRUSTEE 5
Section 1.5 DUTIES OF TRUSTEE 6
Section 1.6 DESIGNATION AS CUSTODIAN 7
Section 1.7 EMERGENCIES AND DELEGATION 7
Section 1.8 EXPENSES AND TAXES 7
Section 1.9 THIRD PARTIES 7
Section 1.10 GENERAL FUNDING POLICY AND 8
INVESTMENT OBJECTIVES
Section 1.11 EMPLOYER SECURITIES 8
Section 1.12 INSURANCE CONTRACTS 9
ARTICLE II
RESTRICTIONS ON TRANSFER
Section 2.1 PERSONS TO RECEIVE PAYMENT 9
Section 2.2 ASSIGNMENT AND ALIENATION PROHIBITED 9
</TABLE>
- i -
<PAGE> 3
ARTICLE III
RESIGNATION AND SUCCESSION
<TABLE>
<S> <C> <C>
Section 3.1 RESIGNATION AND SUCCESSION WITH RESPECT 10
TO ALL EMPLOYEES
Section 3.2 RESIGNATION OR REMOVAL AND SUCCESSION 10
WITH RESPECT INDIVIDUAL EMPLOYERS
ARTICLE IV
AMENDMENT
Section 4.1 POWER TO AMEND 11
Section 4.2 LIMITATION ON AMENDMENT 11
Section 4.3 CONFORMITY WITH LAW 11
ARTICLE V
LIABILITIES
Section 5.1 DECLARATION OF INTENT 11
Section 5.2 GENERAL LIMITATIONS OF LIABILITY 12
Section 5.3 LIABILITY OF THE TRUSTEE 12
Section 5.4 INDEMNIFICATION 13
ARTICLE VI
DURATION AND TERMINATION
Section 6.1 IRREVOCABILITY 13
Section 6.2 DURATION 13
</TABLE>
- ii -
<PAGE> 4
ARTICLE VII
MISCELLANEOUS
<TABLE>
<S> <C> <C>
Section 7.1 ADOPTION BY OTHER EMPLOYERS 13
Section 7.2 SUCCESSOR EMPLOYER 14
Section 7.3 RELATION TO PLAN 14
Section 7.4 USE OF TRUST FUNDS 14
Section 7.5 LOCATION OF TRUST FUND ASSETS 14
Section 7.6 PARTIAL INVALIDITY 14
Section 7.7 CONSTRUCTION 14
</TABLE>
- iii -
<PAGE> 5
TRUST AGREEMENT
PURSUANT TO THE UNION BANK OF CALIFORNIA
MASTER DEFINED CONTRIBUTION PLAN
This Trust Agreement Pursuant to the Union Bank of California Master Defined
Contribution Plan (the "Trust Agreement") is made by and between each employer
which adopts the Union Bank of California Master Defined Contribution Plan,
(the "Employer") and Union Bank of California, N.A., a national banking
association ("Union Bank of California"), as trustee (the "Trustee"), and Union
Bank of California as sponsor of the Union Bank of California Master Defined
Contribution Plan and Trust (the "Sponsor").
RECITALS
A. Union Bank of California has established The Union Bank of
California Master Defined Contribution Plan (the "Plan") for the benefit of
adopting Employers. The Plan is a master prototype plan intended as a qualified
retirement plan under Internal Revenue Code Sections 401 and 501, and similar
provisions of applicable state law. The Plan is intended to comply with the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA) as
amended from time to time.
B. The Plan provides for contributions by adopting Employers and
Participants to be held in trust, invested, and paid out by the Trustee to
Participants and their Beneficiaries or representatives for the accomplishment
of the purposes of said Plan.
C. The Sponsor desires to provide a trust pursuant to the Plan which is
intended to be a tax exempt trust under Section 501 of the Internal Revenue
Code and regulations issued pursuant thereto, and under similar provisions of
the California Revenue and Taxation Code and any other applicable state law.
Union Bank adopted this Trust Agreement as an amendment in full and complete
restatement of the Trust Agreements pursuant to the Master Profit Sharing Plan
sponsored by Union Bank, Master Money Purchase Pension Plan sponsored by Union
Bank, Master Thrift Plan sponsored by Union Bank, California First Bank Money
Purchase Pension Plan and California First Bank Profit Sharing Plan.
AGREEMENT
NOW, THEREFORE, the Sponsor hereby adopts this Trust Agreement as
hereinafter set forth, and the Trustee agrees to receive and hold any and all
cash and property which has been or may be paid or delivered to it as Trustee
hereunder from time to time in trust for the uses and purposes and upon the
terms and conditions hereinafter stated.
ARTICLE I
POWERS, DUTIES AND RIGHTS OF TRUSTEE
Section 1.1 General
It shall be the duty of the Trustee to hold the funds and property from time to
time received by it from the Employer and its Participants which, together with
the increase, earnings and profits thereon, shall constitute the Employer's
Trust Fund; to manage, invest and reinvest the Trust Fund, except as provided
in Section 1.2; to collect and hold the increase, earnings and profits thereon;
and to make payments from the Trust Fund; all as herein and in the Plan
provided. For both accounting and investment purposes, a separate Trust Fund
shall be established for each Employer. No Employer or the portion of any Trust
Fund attributable to it shall be liable for Plan benefits attributable to
another Employer or the portion of any Trust Fund attributable to such other
Employer.
-1-
<PAGE> 6
The Trustee shall be a fiduciary within the meaning of Section 3(21)(A) of ERISA
and shall perform its duties and exercise its powers as such subject to all
provisions of the Plan and this Trust Agreement, ERISA and other applicable laws
and regulations governing fiduciaries.
Section 1.2 Investment Options
In reference to the choice of investment options made by the Employer:
(a) The Employer's Trust Fund, subject to any administrative restrictions
imposed by the Trustee, shall be invested in any Permissible Investment as
set forth in Union Bank of California's Statement Of Policy For Directed
Employee Benefit Trust Investments as published from time to time. A copy
of such current guidelines is attached hereto as Exhibit "A". for purposes
of the Plan and this Trust Agreement "Permissible Investment" shall mean
any investment medium which the Trustee makes available for investment of
assets held in the Employer's Trust Fund including but not limited to:
(i) any collective investment fund regularly maintained by Union Bank
of California for common investment of qualified employee benefit plan
trust funds,
(ii) any mutual fund advised by Union Bank of California or any
affiliate, and any mutual fund for which Union Bank of California may
provide other services for a fee;
(iii) any type of interest-bearing deposit with Union Bank or any
financial institution made available for use hereunder.
(b) The Employer shall direct the Trustee in writing as to which of the
following subparagraphs shall from time to time be operative. The
Employer's written direction shall remain in force until the Trustee is
otherwise directed in writing:
(i) The Employer shall retain full investment authority, in which
event the Employer shall, within the limitations set forth below and
in accordance with the provisions of Section 1.2(a) above, direct the
Trustee in writing with respect to the investment, management and
control of Trust assets, and the Trustee shall, as promptly as
possible, comply with such written directions; however, the Trustee,
in its sole discretion, may refuse to comply with the directions of
the Employer to invest in assets other than Permissible Investments or
with directions which the Trustee deems to be improper or contrary to
the provisions of the Plan and Trust, ERISA or the Internal Revenue
Code. The Trustee shall not be liable, in any manner for any reason,
for the making, retention or disposition of any investment pursuant to
the Employer's directions or for its failure to invest any or all of
the Employer's Trust Fund in the absence of such written directions,
nor shall the Trustee be liable when it is directed by the Employer to
acquire a security for failure to exercise any conversion, redemption,
exchange, subscription or other right with respect to that security,
notice having been given with respect to such right prior to the
purchase of such security, unless the Trustee is informed of the
existence of the right and is instructed to exercise such right, in
writing, by the Employer, within a reasonable time prior to the
expiration of such right. The employer shall not direct the purchase,
sale or retention of any assets of the Trust other than Permissible
Investments and shall only make directions which are in compliance
with the applicable provisions of ERISA and any regulations or rulings
issued thereunder.
(ii) The Employer shall appoint an Investment Manager (as defined in
Section 3(38) of ERISA) and shall inform the Trustee in writing of
such appointment. The Investment Manager shall, within the limitations
set forth below and in accordance with the provisions of Section
1.2(a) above, direct the Trustee in writing with respect to the
investment, management and control of Trust assets, and the Trustee
shall, as promptly as possible, comply with such written directions.
-2-
<PAGE> 7
The Investment Manager shall not direct the purchase, sale or
retention of any assets of the Trust other than Permissible
Investments and shall only make directions which are in compliance
with the applicable provisions of ERISA and any regulations or ruling
issued thereunder. The Trustee shall have no liability for the acts or
omissions of such Investment Manager or be under an obligation to
invest or otherwise manage any asset of the Trust which is subject to
the management of such Investment Manager.
(iii) The Trustee shall have full investment authority, in which
event, the Trustee shall exercise all of the powers listed in Section
1.3 below without awaiting directions from the Employer.
(iv) If the Employer has so elected in its Adoption Agreement, the
Participant shall have full investment authority over the investment
of assets allocated to such Participant's accounts in that the
Participant shall select among the Investment Options authorized by
the Employer. The Employer or Investment Manager shall have full
responsibility for designating the Investment Options under the Plan
and for selecting the underlying investment vehicle(s) for each
designated Option. To the extent allowed under the Internal Revenue
Code, ERISA and applicable regulations thereunder, neither the
Employer, the Administrator nor the Trustee shall have any
responsibility for monitoring the directions of the Participant nor
shall they be liable in any manner for following the directions of a
Participant. The Administrator shall establish uniform and
nondiscriminatory rules for the operation of the Participant directed
accounts, including whether the Participant shall direct the Trustee
in writing or direct the Administrator who directs the Trustee in
writing. Participant directed accounts shall be subject to the
provisions of the Plan and may only be invested in Permissible
Investments. The Trustee may refuse to comply with the directions of
the Participant to invest in assets other than Permissible Investments
or with directions which the Trustee deems to be improper or contrary
to the provisions of the Plan and Trust, ERISA or the Internal Revenue
Code.
Section 1.3 Powers of Trustee Regarding Investments
After receiving the required directions from the Employer or Investment Manager,
if the Employer has either retained investment authority or delegated it to an
Investment Manager, the Participant, if Participant directed accounts have been
established or on the Trustee's own behalf if the Employer has granted it full
powers, the Trustee, subject to the limitations of Sections 1.1 and 1.2, the
provisions of ERISA and other applicable laws, is authorized and empowered:
(a) To invest and reinvest the Employer's Trust Fund or any part thereof
in any one or more kind, type, class, item or parcel of property, real,
personal or mixed, tangible or intangible; or in any one or more kind,
type, class, item or issue of investment or security; or in any one or
more kind, type, class or item of obligation, secured or unsecured; or in
any combination of them.
(b) To acquire and sell options to buy securities ("call" options) and to
acquire and sell options to sell securities ("put" options).
(c) To buy, sell, assign, transfer, acquire, lease (for any purpose,
including mineral leases, and for terms within or extending beyond the
life of this Trust), exchange and in any other manner to acquire, manage,
deal with and dispose of all or any part of the Trust property, for cash
or credit and upon any reasonable terms and conditions.
(d) To make "deposits', within the meaning of Section 408(b)(4) of ERISA,
with any bank or savings and loan institution, including any such facility
of Union Bank of California or an affiliate thereof provided that the
deposit bears a reasonable rate of interest.
-3-
<PAGE> 8
(e) To retain all or any portion of the Employer's Trust Fund in cash and
temporarily awaiting investment without liability for interest thereon and
to retain in cash, without liability for interest thereon, all or any
portion of the Employer's Trust Fund for the purpose of making
distributions or other payments notwithstanding Trustee's receipt of
"float" from such uninvested cash.
(f) To invest and reinvest the Employer's Trust Fund, or any part thereof,
in any mutual fund advised by Union Bank of California as well as one or
more collective investment trust funds regularly maintained by Union Bank
of California for common investment of trust funds. The Declaration of
Trust is hereby made a part of this Trust Agreement. Notwithstanding any
other provisions hereof, the Trustee may commingle said investments with
assets similarly invested by trusts similar hereto, by investing the same
as a part of one or more of such investment trust funds, all according to
said Declarations of Trust as now constituted and as amended from time to
time. Notwithstanding anything to the contrary in this Trust Agreement,
Union Bank of California shall have full investment responsibility over
assets of the Employer's Trust Fund invested in such commingled funds.
(g) To place uninvested cash and cash awaiting distribution in one or more
mutual funds or collective investment funds maintained by Union Bank of
California, or both, and as set forth in the Union Bank of California Cash
Management Form. Union Bank of California may receive compensation from the
sponsor of such fund(s) for services rendered.
(h) To borrow or raise money for the purposes of the Trust from any source
(other than in a prohibited transaction as defined in Sections 406 of ERISA
or 4975(c) of the Internal Revenue Code); to pay interest; to issue
promissory notes and to secure the repayment thereof by pledging all or any
part of the Employer's Trust Fund.
(i) To vote upon any stocks, bonds or other securities; to give general or
special proxies or powers of attorney with or without power of substitution
except as related to Employer Securities pursuant to Section 1.11; to
exercise any conversion privileges, subscription rights or other options,
and to make any payments incidental thereto; to consent to or otherwise
participate in corporate reorganizations or other changes affecting
corporate securities and to delegate discretionary powers and to pay any
assessments or charges in connection therewith; and generally to exercise
any of the powers of an owner with respect to stocks, bonds, securities or
other property held in the Employer's Trust Fund.
(j) To make, execute, acknowledge and deliver any and all documents of
transfer and conveyance and any and all other instruments that may be
necessary or appropriate to carry out the powers herein granted.
(k) To raze or move existing buildings; to make ordinary or extraordinary
repairs, alterations or additions in and to buildings; to construct
buildings and other structures and to install fixtures and equipment
therein.
(l) To pay or cause to be paid any and all real or personal property taxes,
income taxes or other taxes or assessments of any or all kinds levied or
assessed upon or with respect to the Employer's Trust Fund or the Plan.
(m) To hold term or ordinary life insurance contracts on the lives of
Participants (but in the case of conflict between any such contract and the
Plan, the terms of the Plan shall prevail); to pay the premiums on such
contracts; to distribute, surrender or otherwise dispose of such contracts;
to pay the proceeds if any, of such contracts to the proper persons in the
event of the death of the insured Participant; to enter into, modify, renew
and terminate annuity contracts of deposit administration or immediate
participation or other group or individual type with one or more insurance
companies and to pay or deposit all or any part of the Employer's Trust
Fund thereunder; to provide in any such contract for the investment of all
or any part of funds so deposited with the insurance company in securities
under separate accounts; to exercise and claim all rights and benefits
granted to the contract holder by any such contracts.
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(n) To exercise all the further rights, powers, options and privileges
granted, provided for, or vested in trustees generally under applicable
federal or California laws, as amended from time to time, it being intended
that, except as herein otherwise provided, the powers conferred upon the
Trustee herein shall not be construed as being in limitation of any
authority conferred by laws, but shall be construed as in addition thereto.
Section 1.4 Other Powers of Trustee
In addition to the above-enumerated powers and whether or not the Employer has
retained investment authority, the Trustee in any and all events is authorized
and empowered:
(a) To invest funds pending required directions in any type of
interest-bearing account including without limitation, time certificates of
deposit or interest-bearing accounts issued by Union Bank of California.
(b) To cause all or any part of the Trust Fund to be held in the name of
the Trustee (which in such instance need not disclose its fiduciary
capacity) or, as permitted by law, in the name of any nominee, and to
acquire for the Trust Fund any investment in bearer form; but the books and
records of the Trust shall at all times show that all such investments are
a part of the Trust Fund and the Trustee shall hold evidences of title to
all such investments.
(c) To serve as sole custodian with respect to the Trust assets, provided
Union Bank of California is the sole Trustee. If not, the terms of the
Custodial Agreement between Union Bank of California and the Trustee shall
govern.
(d) To employ such agents and counsel as may be reasonably necessary in
managing and protecting the Trust assets and to pay them reasonable
compensation; to employ any broker-dealer, including any broker-dealer
affiliated with Union Bank of California, and pay to such broker-dealer at
the expense of the Trust its standard commissions; to settle, compromise or
abandon all claims and demands in favor of or against the Employer's Trust
Fund; and to charge any premium on bonds purchased at par value to the
principal of the Employer's Trust Fund without amortization from the
Employer's Trust Fund, regardless of any law relating thereto.
(e) In addition to the powers listed herein, to do all other acts necessary
or desirable for the proper administration of the Trust Fund, as though the
absolute owner thereof.
(f) To abandon, compromise, contest, arbitrate or settle claims or demands;
to prosecute, compromise and defend lawsuits, but without obligation to do
so; all at the risk and expense of the Trust Fund.
(g) To exercise and perform any and all of the other powers and duties
specified in this Trust Agreement or the Plan.
(h) To permit such inspections of documents at the principal office of the
Trustee as are required by law.
(i) To comply with all requirements imposed by ERISA or other applicable
provisions of law.
(j) As directed by the Administrator:
(i) To cause the benefits provided under the Plan to be paid directly
to the persons entitled thereto under the Plan, and in the amounts and
in the manner specified, and to charge such payments against the
Employer's Trust Fund with respect to which such benefits are payable.
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(ii) To compensate such executive, consultant, actuarial, accounting,
investment, appraisal, administrative, clerical, secretarial,
medical, custodial, depository and legal firms, personnel and other
employees or assistants as are engaged by the Administrator in
connection with the administration of the Plan of such Employer and
to pay from the Employer's Trust Fund the necessary expenses of such
firms, personnel and assistants, to the extent not paid by the
Employer.
(iii) To impose a reasonable charge to cover the cost of furnishing
to Participants or Beneficiaries upon their written request documents
as required under Section 104(b)(4) of ERISA (but not for furnishing
information statements or documents as required by Section
104(b)(1), (2) or (3) or Section 104(c) or Section 105(a) or (c) of
ERISA).
(iv) To act upon proper written directions of the Employer, the
Administrator or any other named fiduciary including directions given
by photostatic tele-transmission using facsimile signature.
(v) To pay from the Employer's Trust Fund the expenses reasonably
incurred in the administration of the Employer's Trust Fund as
provided in the Plan.
(vi) To maintain insurance for such purposes, in such amounts and
with such companies as the Administrator shall elect, including
insurance to cover liability or losses occurring by reason of the
acts or omissions of fiduciaries (but only if such insurance permits
recourse by the insurer against the fiduciary in the case of a breach
of a fiduciary obligation by such fiduciary).
Section 1.5 Duties of Trustee
In reference to the duties of the Trustee:
(a) The Trustee shall exercise any of the foregoing powers from time to
time as required by law.
(b) The trustee shall maintain or cause to be maintained suitable records,
data and information relating to its functions hereunder.
(c) The Trustee shall keep accurate and detailed accounts of all
investments, receipts, disbursements and other actions hereunder. Its
books and records relating thereto shall be open to inspection and audit
at all reasonable times by the Employer, the Administrator or their duly
authorized representatives.
(d) Within sixty days after the close of each Plan Year and within sixty
days after the resignation of the Trustee as provided in Article III
hereof, the Trustee shall render to the Employer a written account showing
in reasonable summary the investments, receipts, disbursements and other
transactions engaged in by the Trustee during the preceding Plan Year or
period with respect to the Employer's Trust Fund. Such account shall set
forth the assets and liabilities of the Employer's and all kinds that may
be levied or assessed under existing or future laws upon or in respect to
the Employer's Trust Fund or the income thereof, and Union Bank's charges
for issuing distribution checks to Participants or their representatives
shall be paid from, and shall constitute a charge upon, the Employer's
Trust Fund. The Employer shall have sixty days after the Trustee's mailing
of each such account within which to file with the Trustee written
objections to such account. Upon the expiration of each such period, the
Trustee shall be forever released and discharged from all liability and
accountability to the Employer with respect to the propriety of its acts
and transactions shown in such account except with respect to any such
acts or transactions as to which the Employer files written objections
within such sixty day period with the Trustee.
(e) The Trustee shall file such descriptions and reports and shall furnish
such information and make such other publications, disclosures,
registrations and other filings as are required of the Trustee by ERISA.
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(f) The Trustee shall have the power and duty to comply promptly with all
proper directions of the Administrator and the Employer. Unless a Directed
Investment Account or Participant Directed Account has been established,
the Trustee shall not act on any directions or requests received from
Participants.
Section 1.6 Designation as Custodian
If Union Bank of California has not been named as a Trustee under the
Employer's Adoption Agreement, Union Bank shall serve as sole Custodian
pursuant to the terms of a separate Custodial Agency Agreement to be executed
by Union Bank and the Trustee.
Section 1.7 Emergencies and Delegation
In reference to situations involving emergencies or delegation of duties:
(a) In case of an emergency, the Trustee may act in the absence of
directions from any other fiduciary having the power and duty to direct
the trustee with respect to the matter involved and shall incur no
liability in so acting.
(b) By written notice to the Trustee, the Administrator or the Employer
may authorize the Trustee to act on matters in the ordinary course of the
business of the Trust or on specific matters upon the signature of its
delegate.
Section 1.8 Expenses and Taxes
In reference to expenses incurred and the taxes paid by the Trustee:
(a) Union Bank of California as Trustee or Custodian shall be paid by
the Employer, in accordance with Union Bank of California's fee
schedule applicable as of the date such fees are payable, but if not
so paid, such fees shall constitute a charge upon the Employer's
Trust Fund.
(b) Reasonable counsel fees, reasonable costs, expenses, and charges
of Union Bank of California and the Trustee incurred or made in the
performance of its duties, including but not limited to expenses
relating to investment of the Employer's Trust Fund such as brokers'
commissions, stamp taxes, and similar items and all taxes of any and
all kinds that may be levied or assessed under existing or future
laws upon or in respect to the Employer's Trust Fund or the income
thereof.
Section 1.9 Third Parties
In reference to dealings with third parties by the Trustee:
(a) No person dealing with the Trustee shall be required to follow
the application of purchase money paid or money loaned to the Trustee
nor inquire as to whether the Trustee has complied with the
requirements hereof.
(b) In any judicial or administrative proceedings, only the affected
Employer and the Trustee shall be necessary parties and no
Participant or other person having or claiming any interest in the
Employer's Trust Fund shall be entitled to any notice or service of
process (except as required by law). Any judgment, decision or award
entered in any such proceeding or action shall be conclusive upon all
interested persons.
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Section 1.10 General Funding Policy and Investment Objectives
In reference to the general funding policy and investment objectives of the
Trust:
(a) Subject to the requirements of law and the provisions of this Trust
Agreement, the assets of the Trust Fund shall be prudently invested and
managed with the purpose of achieving long-term growth of the Trust Fund
through interest, dividends, gains and appreciation in value at a rate
consistent with the objectives of plans of like character and aims.
(b) Sufficient liquidity shall be maintained to meet the reasonably
anticipated requirements of the Trust Fund for payment of expenses of
administration, investment and management and for distribution of benefits
to Participants and Beneficiaries.
(c) The policy established in this Section may be modified at any time by
the written agreement of the Trustee and Sponsor.
Section 1.11 Employer Securities
In reference to the issue of Employer Securities within the Trust Fund:
(a) The Administrator shall direct the investment of assets in the
Employer's Trust Fund in Employer Securities unless the Administrator is
satisfied that the Employer Securities are exempt from registration under
the federal Securities Act of 1933, as amended, and are exempt from
qualification under the California Corporate Securities Law of 1968, as
amended, and of any other applicable blue sky law, or in the alternative,
that the Employer Securities have been so registered and/or qualified. The
Administrator shall also specify what restrictive legend on transfer, if
any, is required to be set forth on the certificates for the Employer
Securities and the procedure to be followed by the Trustee to effectuate a
resale of such Employer Securities. The Administrator shall not direct the
investment in "Employer Securities" or "Employer Real Property", as those
terms are used in ERISA, if such investment would be prohibited by ERISA.
The Administrator shall only direct the investment of funds into Employer
Securities (i) if those securities are traded on an exchange permitting a
readily ascertainable fair market value, or (ii) if the Administrator
shall have obtained a current valuation by an independent appraiser, and
periodically supplies updated valuations while the Employer Securities
remain in the Trust. In determining the value of Employer Securities on a
periodic basis, the Trustee may conclusively rely on the certified
appraisal or other form of valuation submitted to it by the Administrator,
the Employer or the Investment Manager, if any.
(b) The Trustee shall vote Employer Securities or sell pursuant to a
tender offer as directed by written instructions of the Administrator, the
Investment Manager with authority over those assets, if any, or by the
Participants if the Employer has elected pass through voting in its
Non-Standardized Adoption Agreement, it being understood that the person
with investment discretion over the Trust assets has exclusive authority
and responsibility to vote proxies unless pass through voting to
Participants is set forth within the Employer's Non-Standardized Adoption
Agreement or is mandated by law. If the vote is to be passed through to
the Participants, the Administrator shall provide any information
requested by the Trustee that is necessary or convenient to obtain and
preserve the confidentiality of the Participants' directions. Any
conflicting instructions shall be resolved by the Administrator, who shall
advise the Trustee on the voting of Employer Securities or tendering the
securities in response to a tender offer. Proxies of Employer Securities
which are unallocated to a Participant's account, or for which any votes
are not cast, shall be voted or tendered by the Trustee proportionally in
the same manner as those voted or tendered by Administrator, Investment
Manager, or the Participants, unless the Trustee is required by law to
vote the proxies or tender the Employer Securities exercising the
Trustee's discretion.
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The Employer shall indemnify and hold harmless the Trustee with respect to
any action taken or refrained from with regard to voting or tendering
Employer Securities, it being expressly understood that the Trustee shall
have no discretion with respect to such action unless required by law.
Trustee shall have no duty to provide Participants with information
necessary to make an informed decision with respect to the voting or
tendering of employer securities, which shall be the exclusive duty of the
Employer.
(c) The Trustee shall not be liable under the Plan or the Trust for any
investment in or retention of Employer Securities held as Trust assets,
whether retention is due to instructions to retain, or inability to sell
due to any Federal; or State securities law restrictions, or the
unmarketable or illiquid nature of the investment.
Section 1.12 Insurance Contracts
The Administrator may direct the Trustee in writing to invest assets of the
Trust in group or individual insurance contracts of all kinds authorized under
the Plan, provided such contracts are issued by an insurance company or
companies qualified to do business in more than one state, and the Administrator
shall have the sole responsibility and shall direct the Trustee with respect to
such insurance. The administration of these insurance contracts shall be the
sole responsibility of the Administrator, and the Trustee shall follow the
directions of the Administrator with respect to the administration of any such
contracts.
ARTICLE II
RESTRICTIONS ON TRANSFER
Section 2.1 Persons to Receive Payment
In reference to payments made by the Trustee:
(a) The Trustee shall, except as otherwise provided in subsection (b), pay
all amounts payable hereunder only to the person or persons designated
under the Plan as directed by the Administrator and not to any other person
or corporation, and only to the extent of assets held in the Employer's
Trust Fund.
(b) In the event any controversy shall arise as to the person or persons to
whom any distribution or payment is to be made by the Trustee, or as to any
other matter arising in the administration of the Plan, the Trustee may
retain the amount in controversy pending resolution of the controversy or
the Trustee may file an action seeking declaratory relief and/or may
interplead the Employer and/or any or all the persons making conflicting
demands.
(c) The Trustee shall not be liable for the payment of any interest or
income on any amount withheld or interpleaded under subsection (b).
(d) The expenses of the Trustee for taking any action under subsection (b)
shall be charged by the Trustee to the Employer's Trust Fund.
Section 2.2 Assignment and Alienation Prohibited
No benefit or interest available hereunder will be subject to assignment or
alienation, either voluntary or involuntarily. The preceding sentence shall
also apply to the creation, assignment, or recognition of a right to any
benefit payable with respect to a Participant pursuant to a domestic relations
order, unless such an order is determined by the Administrator to be a
Qualified Domestic Relations Order, as defined in Section 414(p) of the Code.
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Any domestic relations order entered before January 1, 1985 will be treated as a
Qualified Domestic Relations Order if payment of benefits has commenced as of
such date, and may be treated as a Qualified Domestic Relations Order if payment
of benefits has not commenced as of such date, even though the order does not
satisfy the requirements of Section 414(p).
ARTICLE III
RESIGNATION AND SUCCESSION
Section 3.1 Resignation and Succession with Respect to All Employers
In reference to the resignation of the Trustee or the appointment of a
successor Trustee:
(a) The Trustee may resign at any time upon thirty days prior written
notice to the Employer(s) adopting the Plan (which notice may be waived by
the Employer(s)). Upon resignation of the Trustee the Trustee shall
simultaneously designate a Successor Trustee.
(b) A Successor Trustee shall have the same powers and duties as those
conferred herein. A resigning Trustee shall transfer the Trust Fund to its
successor and shall deliver the books, accounts and records thereof
thereto. The resigning Trustee is authorized, however, to reserve such
amount as may be necessary for the payment of its fees and expenses
incurred prior to its resignation.
(c) If the Trustee shall fail or refuse to so appoint a successor Trustee
prior to the effective date of its resignation, the Trust shall terminate
in accordance with the Plan as to all Employers except those who have
caused transfers of assets of the Trust Fund to other qualified plans in
accordance with Section 8.3 of the Plan.
(d) A Successor Trustee shall have no duty to audit or otherwise inquire
into the acts and transactions of its predecessor.
Section 3.2 Resignation or Removal and Succession with Respect to Individual
Employers
(a) The Trustee may resign as Trustee with respect to the Plan and Trust
Agreement as adopted by an individual Employer at any time upon thirty
days' prior written notice to the Employer (which notice may be waived by
the Employer). Notwithstanding the preceding sentence, if any, employer
securities are held as an asset of the Trustee. Trustee may resign at any
time, with such resignation to be effective immediately upon written
notice.
(b) An individual Employer may remove the Trustee with respect to the Plan
and Trust Agreement as adopted by the individual Employer at any time upon
thirty days prior written notice to the Trustee (which notice may be waived
by the Trustee).
(c) Upon resignation or removal of the Trustee pursuant to Section 3.2(a)
or (b), the Employer shall promptly designate a Successor Trustee who must
be acceptable to the Sponsor. If the named Successor Trustee is not
acceptable to the Sponsor, the Employer shall promptly designate a
Successor Plan and Trust (as defined below) and a qualified trustee
thereunder who will accept transfer of the assets of the Employer's Trust
Fund. The term "Successor Plan and Trust" means a plan and trust intended
to meet the requirements of Section 401(a) of the Code.
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(d) If the Employer does not designate a Successor Plan and Trust and a
qualified trustee thereunder within thirty days after the Trustee gives
notice of resignation pursuant to Section 3.2(a) or receives notice of
removal pursuant to Section 3.2(b), the Board of Directors shall be deemed
to be Successor Trustee. Alternatively, Trustee may, at the expense of the
Employer's Trust Fund apply to a court of competent jurisdiction for the
designation of a Successor Plan and Trust and a qualified trustee
thereafter. Until such time as a Successor Plan and Trust and a qualified
trustee are designated, the Trustee shall be entitled to its regular fees
for acting as Trustee as provided under the Plan.
(e) Upon the designation of a Successor Plan and Trust and a qualified
trustee thereunder, the Trustee shall promptly transfer the assets of the
Employer's Trust Fund, suitable records, and other information to the
trustee of the Successor Plan and Trust and the Trustee shall have no
further responsibility with respect to such assets, records, and
information. The Trustee is authorized, however, to reserve such amount as
may be necessary for the payment of its fees and expenses incurred prior to
the transfer of such assets, records, and information.
ARTICLE IV
AMENDMENT
Section 4.1 Power to Amend
Union Bank of California, as Sponsor, shall have the right at any time and from
time to time to modify or amend this Trust Agreement in whole or in part.
Section 4.1 Limitation on Amendment
No amendment shall be made at any time under which any part of the Employer's
Trust Fund may be diverted to purposes other than for the exclusive benefit of
Participants and their Beneficiaries or which shall decrease the percentage or
amount of the interest of any Participant which shall theretofore have become
Vested.
Section 4.3 Conformity with Law
Notwithstanding anything herein to the contrary, this Trust Agreement may be
amended prospectively or retroactively at any time by the Sponsor if deemed
necessary to conform to the provisions and requirements of ERISA or the
Internal Revenue Code or regulations promulgated pursuant thereto in order to
maintain the tax-exempt status hereof thereunder, or to conform to the
provisions and requirements of any law, regulation, order or ruling affecting
the character or purpose of the Plan or Trust.
ARTICLE V
LIABILITIES
Section 5.1 Declaration of Intent
In keeping with the public policy expressed in Section 419(a) of ERISA,
nothing in this Article purports to relieve a fiduciary from liability for any
responsibility, obligation or duty under Part 4 of Title I of ERISA. However,
to the full extent permitted in Section 405 of ERISA and otherwise as not
prohibited by law, it is the intent of this Article to relieve each fiduciary
from all liability for any acts or omissions of any other fiduciary or any
other person and to declare the absence of liabilities of all persons referred
to in this Article to the extent not imposed by law or by Section 1.2 or other
provisions of this Trust Agreement.
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Each of the following Sections, in declaring such limitations of liability, is
set forth without limiting the generality of this Section but in each case
shall be subject to the provisions, limitations and policies set forth in this
Section.
Section 5.2 General Limitations of Liability
In reference to the limitation of liability of the fiduciary:
(a) No fiduciary shall be liable with respect to a breach of fiduciary
duty under Title I of ERISA if such breach was committed before he or she
became fiduciary or after he or she ceased to be a fiduciary.
(b) No named fiduciary shall be liable for any act or omission of any
person to whom fiduciary responsibilities (other than Trustee
responsibilities) are allocated by the Trust Agreement or by a named
fiduciary, except as provided in Section 405(c) of ERISA.
Section 5.3. Liability of the Trustee
In reference to the liabilities and responsibilities of the Trustee:
(a) The Trustee shall have no powers, duties or responsibilities with
regard to the administration of the Plan or to determine the rights or
benefits of any person having or claiming an interest under the Plan or in
the Trust Fund or under this Trust Agreement or to examine or control any
disposition of the Trust Fund or part thereof which is properly directed
by the Administrator.
(b) The Trustee shall have no liability for the adequacy or contributions
for the purposes of the Plan or for enforcement of the payment thereof.
(c) The Trustee shall have no liability for the acts or omissions of the
Employer or the Administrator.
(d) The Trustee shall have no liability for following proper directions of
a named fiduciary when such directions are made in accordance with this
Trust Agreement and the Plan and are not contrary to Title I of ERISA.
(e) During such period or periods, of time, if any, as any named fiduciary
is directing the investment and management of Trust assets, the Trustee
shall have no obligation to determine the existence of any conversion,
redemption, exchange, subscription or other right relating to any
securities purchased on the directions of such named fiduciary if notice
of any such right was given prior to the purchase of such securities. If
such notice is given after the purchase of such securities, the Trustee
shall notify such named fiduciary thereof. The Trustee shall have no
obligation to exercise any such right unless it is informed of the
existence of the right and is instructed to exercise such right, in
writing, by the named fiduciary in question within a reasonable time prior
to the expiration of such right.
(f) During such period or periods of time, if any, as a named fiduciary is
directing the investment and management of Trust assets, if such named
fiduciary directs the Trustee to purchase securities issued by any foreign
government or agency thereof, or by any corporation domiciled outside of
the United States, it shall be the responsibility of the named fiduciary
to advise the Trustee in writing with respect to any laws or regulations
of any foreign countries or any United States territories or possessions
which shall apply, in any manner whatsoever, to such securities,
including, but not limited to, receipt of dividends or interest by the
Trustee for such securities.
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(g) If by reason of any action or failure to act by any Employer and
without the knowledge of the Trustee, the Trust or a portion thereof,
ceases to be a tax-exempt trust pursuant to a qualified plan under
Sections 401 and 501 of the Internal Revenue Code, the Employer involved
shall indemnify the Trustee for any federal estate taxes which the
Trustee is required to pay as a result of a distribution thereafter made
at the direction of the Administrator under subsection 1.4(j)(i) to a
Beneficiary in which event the Employer shall be subrogated to the right
of the Trustee to proceed against such Beneficiary, the executor of the
estate of the deceased Participant or any other person for reimbursement
of the amount paid.
Section 5.4 Indemnification
In reference to indemnification of the parties to this Trust Agreement:
(a) The Employer, by adoption of this Trust Agreement, agrees to
indemnify the Trustee, the Sponsor, the Custodian (if any), the
Administrator and any fiduciary such parties appoint for reasonable
expenses and to exonerate and indemnify them to their reasonable
satisfaction, from time to time, for or against any and all loss,
expense and liability incurred or to be incurred by them for acts or
omissions of such Employer, any Affiliated Employer or any of their
Employees.
(b) The Employer agrees to indemnify the Trustee and Custodian against
any liability imposed as a result of a claim asserted by any person or
persons with respect to whom the Trustee has acted in good faith in
reliance on a written direction of the Employer or the Administrator.
ARTICLE VI
DURATION AND TERMINATION
Section 6.1 Irrevocability
This Trust is hereby declared to be irrevocable.
Section 6.2 Duration
This Trust shall continue in full force and effect for the maximum period of
time permitted by law and in any event until the expiration of twenty-one years
after the death of the last surviving person who was living at the time of
execution hereof who at any time becomes a Participant in the Plan, unless this
Trust is sooner terminated in accordance with the Plan.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Adoption by Other Employers
An Employer which (or an Affiliated Employer which, by means of an amended
Adoption Agreement as permitted in Section 2.1 of the Plan) adopts the Plan
with the approval of both the Administrator and the Sponsor shall concurrently
become a party to this Trust Agreement by giving written notice of its adoption
of the Plan and this Trust Agreement to the Sponsor. Upon such written notice,
the Employer (or such Affiliated Employer) shall become a signatory to this
Trust Agreement.
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Section 7.2 Successor Employer
If any successor to an Employer continues the Plan adopted by the Employer, such
successor shall concurrently become a successor first party to this Trust
Agreement by giving written notice of its adoption of the Plan and this Trust
Agreement to the Trustee by duly authorized persons, which said written notice
shall constitute such successor a signatory hereto.
Section 7.3 Relation to Plan
All words and phrases used herein shall have the same meaning as in the Plan and
this Trust Agreement and the Plan shall be read and construed together. Whenever
in the Plan it is provided that the Sponsor shall act as therein prescribed, the
Sponsor shall be and is hereby authorized and empowered to do so for all
purposes as fully as though specifically so provided herein. The Sponsor shall
furnish the Employers with copies of the Plan, the Trust Agreement and all
amendments thereto.
Section 7.4 Use of Trust Funds
Under no circumstances shall any part of the Employer's Trust Fund be
recoverable by the Employer or any Affiliated Employer from the Trustee or from
any Participant or Former Participant, his or her Beneficiaries, or any other
person, or be used for or diverted to purposes other than for the exclusive
purposes of providing benefits to Participants and their Beneficiaries;
provided, however, that:
(a) an Employer's excess contribution may be returned to such Employer in
accordance with the provisions of Section 9.7(b) of the Plan, and
(b) the portion, if any, of the Trust Fund attributable to an Employer not
required for the satisfaction of all liabilities to Participants and their
Beneficiaries shall, upon such Employer's termination of the Plan, revert
to such Employer.
Section 7.5 Location of Trust Fund Assets
Except as authorized by the Secretary of Labor by regulation, the indicia of
ownership of any assets of the Trust Fund and Plan shall not be maintained
outside the jurisdiction of the District Courts of the United States.
Section 7.6 Partial Invalidity
If any provision of this Trust Agreement is held to be illegal or invalid for
any reason, such illegality or invalidity shall not affect the remaining
portions of this Trust Agreement, unless such illegality or invalidity prevents
accomplishment of the objectives and purposes of this Trust Agreement and the
Plan. In the event of any such holding, the parties will immediately amend this
Trust Agreement as necessary to remedy any such defect.
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Section 7.7 Construction
This Trust Agreement shall be construed, administered and enforced according to
ERISA and the Internal Revenue Code and where state law is applicable, under
California laws, fairly and equitably, and in accordance with the purposes of
the Plan.
Executed at Los Angeles, California on this the 7th day of June, 1991.
UNION BANK, SPONSOR
By: ____________________________________
Yoichi Kambara
Executive Vice President
By: ____________________________________
Pieter Westerbeek
Senior Vice President
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