As filed with the Commission on December 18, 1997
Registration No. 333-_____
=================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
__________________________
MERIDIAN INSURANCE GROUP, INC.
(Exact name of registrant as specified in its charter)
INDIANA 35-1689161
(State or other jurisdiction (I.R.S. Employer
of incorporation Identification No.)
or organization)
2955 NORTH MERIDIAN STREET 46206-1980
POST OFFICE BOX 1980 (Zip Code)
INDIANAPOLIS, INDIANA
(Address of Principal
Executive Offices)
____________
MERIDIAN INSURANCE GROUP, INC. 401(K) PLAN
(Full title of the plan)
J. MARK MCKINZIE
MERIDIAN INSURANCE GROUP, INC.
2955 NORTH MERIDIAN STREET
POST OFFICE BOX 1980
INDIANAPOLIS, INDIANA 46206-1980
(Name and address of agent for service)
(317) 927-8100
(Telephone number, including area code,
of agent for service)
COPIES TO:
Tibor D. Klopfer
Baker & Daniels
300 North Meridian Street, Suite 2700
Indianapolis, Indiana 46204
_______________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Securities Amount to be Proposed Maximum Proposed Maximum Amount of
to be Registered Registered* Offering Price Aggregate Offering Registration
Per Share* Price* Fee*
<S> <C> <C> <C> <C>
Common Shares, 15,000 Shares $16.19 $242,850 $71.64
without par value
*Calculated pursuant to Rule 457(c) and (h) based upon the average of the high and low prices for
the Common Shares, as reported on the Nasdaq National Market System on December 15, 1997. In
addition, pursuant to Rule 416(c) under the Securities Act of 1933, this registration statement
also covers an indeterminate amount of interests to be offered or sold pursuant to the employee
benefit plan described herein.
</TABLE>
<PAGE>
FORM S-8
Registration Statement Under
The Securities Act of 1933
MERIDIAN INSURANCE GROUP, INC.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The Company's Annual Report on Form 10-K for the year ended December
31, 1996 (File No. 0-11413) and the information set forth under the caption
"Description of Registrant's Securities to be Registered" in the Company's
Registration Statement on Form 8-A filed pursuant to Section 12(g) of the
Securities Exchange Act of 1934 (the "Exchange Act") (File No. 0-11413),
including any amendments or reports filed for the purpose of updating such
description, are incorporated herein by reference. All other reports filed
pursuant to Section 13(a) or 15(d) of the Exchange Act since the end of the
fiscal year for which audited financial statements are contained in the
annual report described above are incorporated herein by reference. All
documents filed by the Company pursuant to Sections 13(a), 13(c), 14, or
15(d) of the Exchange Act after the date hereof and prior to the
termination of the offering of the securities offered hereby shall be
deemed to be incorporated by reference herein and to be a part hereof from
the date of filing of such documents with the Commission. The Company will
promptly provide without charge to each person to whom a prospectus is
delivered, a copy of any or all information that has been incorporated
herein by reference (not including exhibits to the information that is
incorporated by reference unless such exhibits are specifically
incorporated by reference into such information), upon the written or oral
request of such person directed to the Secretary of the Company at its
principal offices, 2955 North Meridian Street, P.O. Box 1980, Indianapolis,
Indiana 46206.
Item 6. Indemnification of Directors and Officers.
Chapter 37 of the Indiana Business Corporation Law empowers a
corporation to indemnify any individual who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative and whether formal or informal, by reason of the fact that he
is or was a director, officer, employee or agent of the corporation or,
while a director of a corporation, is or was serving at the request of the
corporation as a director, officer, partner, member, manager, trustee,
employee or agent of another foreign or domestic corporation, partnership,
limited liability company, joint venture, trust, employee benefit plan or
other enterprise, whether for profit or not, against reasonable expenses
(including counsel fees), judgments, fines (including any excise tax
assessed with respect to an employee benefit plan), penalties and amounts
paid in settlement incurred by him in connection with such action, suit or
proceeding (i) if he acted in good faith, and (ii) in the case of conduct
in his official capacity with the corporation, if he reasonably believed
his conduct was in the best interests of the corporation or, in all other
cases, if he reasonably believed his conduct was at least not opposed to
the best interests of the corporation (or with respect to an employee
benefit plan, if he reasonably believed his conduct was in the interests of
the participants in and beneficiaries of the plan), and (iii) with respect
to any criminal action or proceeding, if he had reasonable cause to believe
his conduct was lawful or no reasonable cause to believe his conduct was
unlawful.
Chapter 37 further provides that a corporation shall, unless limited
by its articles of incorporation, indemnify a director or officer who was
wholly successful, on the merits or otherwise, in the defense of any
action, suit or proceeding to which he was a party because he is or was a
director or officer of the corporation against reasonable expenses incurred
by him in connection therewith. Chapter 37 expressly states that the
indemnification thereby provided does not exclude any other rights to
indemnification to which a person may be entitled. Chapter 37 empowers a
corporation to purchase and maintain insurance on behalf of an individual
who is or was a director, officer, employee or agent of the corporation, or
who, while a director, officer, employee or agent of the corporation, is or
was serving at the request of the corporation as a director, officer,
partner, member, manager, trustee, employee or agent of another foreign or
domestic corporation, partnership, limited liability company, joint
venture, trust, employee benefit plan or other enterprise, against
liability asserted against or incurred by the individual in that capacity
or arising from the individual's status as a director, officer, employee or
agent, whether or not the corporation would have power to indemnify the
individual against the same liability under Chapter 37. Finally, Chapter
37 empowers a corporation, under certain circumstances, to advance to an
individual expenses incurred in connection with an action, suit or
proceeding prior to the final disposition thereof; and empowers a court of
competent jurisdiction, in certain cases, to order indemnification of a
director or officer irrespective of whether the director or officer met the
standards of conduct set forth above.
Reference is made to Section 7.01 of Article VII of the Restated
Articles of Incorporation of the registrant concerning indemnification of
directors and officers.
The registrant has obtained directors' and officers' liability
insurance, the effect of which is to indemnify the directors and officers
of the registrant against certain losses caused by an error, misstatement
or misleading statement, wrongful act, omission, neglect or breach of duty
by them or any matter claimed against them in their capacities as directors
and officers.
Item 8. Exhibits
The undersigned registrant hereby undertakes to submit the plan and
any amendments to the plan to the Internal Revenue Service in a timely
manner and to make all changes required by the Internal Revenue Service to
qualify the plan. The list of Exhibits is incorporated herein by reference
to the Index to Exhibits at page 8.
Item 9. Undertakings.
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 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;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933 (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.
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 therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is
sent or given, the latest annual report to security holders that is
incorporated by reference in the prospectus and furnished pursuant to and
meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Exchange
Act; and, where interim financial information required to be presented by
Article 3 of Regulation S-X are not set forth in the prospectus, to
deliver, or cause to be delivered to each person to whom the prospectus is
sent or given, the latest quarterly report that is specifically
incorporated by reference in the prospectus to provide such interim
financial information.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
<PAGE>
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 Indianapolis, State of Indiana,
on December 18, 1997.
MERIDIAN INSURANCE GROUP, INC.
By: /S/ NORMA J. OMAN
Norma J. Oman,
President and
Chief Executive Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in
the capacities and on the dates indicated. Each person whose signature
appears below hereby constitutes Norma J. Oman and Steven R. Hazelbaker,
and each of them singly, such person's true and lawful attorneys, with full
power to them and each of them to sign for such person and in such person's
name and capacity indicated below, any and all amendments to this
registration statement, hereby ratifying and confirming such person's
signature as it may be signed by said attorneys to any and all amendments.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/S/ NORMA J. OMAN President, Chief Executive December 18, 1997
Norma J. Oman Officer and Director
(Principal Executive
Officer)
/S/ STEVEN R. HAZELBAKER Vice President, Chief December 18, 1997
Steven R. Hazelbaker Financial
Officer and Treasurer
(Principal
Financial and Accounting
Officer)
/s/ Joseph D. Barnette, Jr. Director December 18, 1997
Joseph D. Barnette, Jr.
/s/ John T. Hackett Director December 18, 1997
John T. Hackett
/s/ Ramon L. Humke Director December 18, 1997
Ramon L. Humke
Director December 18, 1997
Sarah W. Rowland
Director December 18, 1997
Van P. Smith
/s/ Harold C. McCarthy Director December 18, 1997
Harold C. McCarthy
/s/ Thomas H. Sams Director December 18, 1997
Thomas H. Sams
/s/ David M. Kirr Director December 18, 1997
David M. Kirr
/s/ Scott S. Broughton Director December 18, 1997
Scott S. Broughton
</TABLE>
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit Page Number
This Filing
<S> <C> <C>
4 (C) Meridian Insurance Group, Inc. 401(k)
Plan
23 (A) Written Consent of Coopers & Lybrand,
L.L.P.
</TABLE>
Updated October 27, 1997
THE MERIDIAN INSURANCE GROUP, INC. 401(K) PLAN
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
PAGE
INTRODUCTION 1
ARTICLE I - DEFINITIONS 2
ARTICLE II - ELIGIBILITY AND PARTICIPATION 11
Section 2.1Eligibility Requirements 11
Section 2.2Participation 12
ARTICLE III - CONTRIBUTIONS 13
Section 3.1Employer Contributions 13
Section 3.2Employee Elective Deferrals 13
Section 3.3After-Tax Employee Contributions 14
Section 3.4Rollover Contributions 14
Section 3.5Trustee-to-Trustee Transfers 15
Section 3.6Deduction Limitation 15
ARTICLE IV - 401(k) and 401(m) 16
Section 4.1Distribution of Excess Employee 16
Elective Deferrals
Section 4.2Actual Deferral Percentage Test 17
Section 4.3Distribution of Excess Contributions 19
Section 4.4Actual Contribution Percentage Test 20
Section 4.5 Distribution of Excess Aggregate 23
Contributions
Section 4.6Recharacterization 24
ARTICLE V - ALLOCATIONS, VALUATION AND VESTING 25
Section 5.1Allocation of Contributions 25
Section 5.2Participants Who Will Receive 25
an Allocation
Section 5.3Allocation of Forfeitures 25
Section 5.4Allocation Limitations 25
Section 5.5Valuation 33
Section 5.6Vesting and Accrual 33
ARTICLE VI - DISTRIBUTIONS 34
Section 6.1Distributions of Small Account Balances 34
Section 6.2Distributions While In-Service 34
Section 6.3Distributions Upon Separation From Service 36
Section 6.4Distributions Upon Retirement 37
Section 6.5Distributions Upon Death 37
Section 6.6Distributions Upon Disability 38
Section 6.7Special Beneficiary Provisions 38
Section 6.8Consent of the Participant Required 39
for Distributions if Account
Balances Greater Than $3,500
Section 6.9Commencement of Benefits 40
Section 6.10Required Distributions 40
Section 6.11Joint & Survivor Annuity Requirements 46
Section 6.12Annuity Contract 52
Section 6.13Special Distribution Rules for 52
401(k) Contributions, Qualified
Matching Contributions and Qualified
Non-Elective Contributions
Section 6.14Form of Distribution 53
Section 6.15Trustee-to-Trustee Transfers 53
Section 6.16Normal Form of Benefit 53
Section 6.17Rollovers to Other Plans or IRAs 53
Section 6.18Installment Payments 54
ARTICLE VII - LOANS 55
Section 7.1Availability of Loans 55
Section 7.2Amount of Loans 55
Section 7.3Terms of Loans 55
ARTICLE VIII - PLAN ADMINISTRATION 58
Section 8.1Duties of the Employer 58
Section 8.2The Committee 58
Section 8.3Appointment of Advisor 59
Section 8.4Powers and Duties of the Committee 59
Section 8.5Organization and Operation 60
Section 8.6Claims Procedure 60
Section 8.7Records and Reports 61
Section 8.8Liability 62
Section 8.9Reliance and Statements 62
Section 8.10Remuneration and Bonding 62
Section 8.11Committee Decisions Final 63
Section 8.12Participant-Directed Investments 63
ARTICLE IX - TRUST AGREEMENT 64
Section 9.1Establishment of Trust 64
ARTICLE X - AMENDMENT, TERMINATION AND MERGER 65
Section 10.1Amendment 65
Section 10.2Termination 65
Section 10.3Merger, Consolidation or Transfer 66
ARTICLE XI - TOP-HEAVY PROVISIONS 67
Section 11.1Applicability 67
Section 11.2Definitions 67
Section 11.3Minimum Allocation 70
Section 11.4Nonforfeitability of Minimum Allocation 70
Section 11.5Allocation Limitations 71
Section 11.6Minimum Vesting Schedules 71
ARTICLE XII - GENERAL PROVISIONS 72
Section 12.1Governing Law 72
Section 12.2Power to Enforce 72
Section 12.3Alienation of Benefits 72
Section 12.4Not an Employment Contract 72
Section 12.5Discretionary Acts 73
Section 12.6Interpretation 73
ARTICLE XIII - SIGNATURE PAGE 74
</TABLE>
<PAGE>
INTRODUCTION
PURPOSE.
The primary purpose of the Meridian Insurance Group, Inc. 401(k) Plan
(the "Plan") is to provide the Employees of Meridian Insurance Group, Inc.
with retirement benefits in recognition of the contribution of the
Employees to the successful operation of the Employer. The Plan is
intended to be a profit sharing plan, qualified under section 401(a) of the
Internal Revenue Code
(the "Code"), which permits salary deferral contributions as provided by
section 401(k) of the Code; and its affiliated Trust is intended to be
exempt from tax under section 501(a) of the Code. In addition, it is
intended that the Plan meet the applicable requirements of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
EFFECTIVE DATE.
The Plan was originally established effective July 1, 1987. Pursuant
to the terms of the Plan which permit its amendment by the Employer, this
document is a restatement, in its entirety, of the Plan, generally
effective January 1, 1997.
The terms of this document now set forth the controlling provisions of the
Plan for all persons who are Employees on or after the Effective Date;
provided, however, that to the extent required under section 411(d)(6) of
the Code (and related Treasury Regulations), the applicable provisions of
the preceding Plan documents are incorporated herein by reference.
ARTICLE I - DEFINITIONS
The following words and phrases, wherever capitalized, shall have the
meanings set forth below, unless the context in which they appear within
the Plan clearly indicates otherwise:
ACCOUNT(S) means the aggregate (or as otherwise specified) interest of
a Participant in the assets of the Trust. Each Participant's interest will
be segregated into one or more of the following Accounts, which will
reflect, in addition to contributions allocated thereto, appropriate
allocations of earnings, gains, losses and expenses of the Trust:
AFTER-TAX EMPLOYEE CONTRIBUTION ACCOUNT. The separate Account
maintained for each Participant reflecting any After-Tax Employee
Contributions previously made by him under the Plan.
EMPLOYEE DEFERRAL ACCOUNT. The separate Account maintained for each
Participant to which are credited his Employee Elective Deferrals.
EMPLOYER REGULAR CONTRIBUTION ACCOUNT. The separate Account
maintained for each Participant to which are credited any Employer Regular
Contributions allocated to him and made in accordance with Section 3.1.
EMPLOYER MATCHING CONTRIBUTION ACCOUNT. The separate Account
maintained for each Participant to which are credited any Employer Matching
Contributions allocated to him and made in accordance with Section 3.1.
QUALIFIED MATCHING CONTRIBUTION ACCOUNT. The separate Account
maintained for each Participant to which are credited any Qualified
Matching Contributions allocated to him and made on his behalf in
accordance with Section 3.1.
QUALIFIED NON-ELECTIVE CONTRIBUTION ACCOUNT. The separate Account
maintained for each Participant to which are credited any Qualified Non-
Elective Contributions allocated to him and made on his behalf in
accordance with Section 3.1.
ROLLOVER ACCOUNT. The separate Account maintained for each applicable
Participant to which contributions are made under Section 3.4.
TRANSFER ACCOUNT. The separate Account maintained for each applicable
Participant to which amounts have been transferred under Section 3.5.
The Administrator may, in its discretion, establish subaccounts within
each separate Account.
ADMINISTRATIVE DELEGATE means one or more persons or institutions to
whom the Committee has delegated certain administrative functions pursuant
to a written agreement.
ADMINISTRATOR means the Committee designated by the Employer to
administer the Plan.
AFFILIATE means a member of a controlled group of corporations, within
the meaning of section 414(b) of the Code, which includes the Employer; a
trade or business (whether or not incorporated) which is in common control
with the Employer as determined in accordance with section 414(c) of the
Code; or any organization which is a member of an affiliated service group,
within the meaning of section 414(m) of the Code, which includes the
Employer; and any other organization required to be aggregated with the
Employer pursuant to section 414(o) of the Code.
AFTER-TAX EMPLOYEE CONTRIBUTIONS means contributions to the Plan, if
any, made by an Employee on an after-tax, nondeductible basis.
BENEFICIARY means the person or persons or a trust affirmatively
designated by a Participant to receive all or a portion of such
Participant's benefits in the event the Participant dies leaving benefits
payable to such a Beneficiary in accordance with the provisions of Article
VI.
CODE means the Internal Revenue Code of 1986, as amended from time to
time.
COMMITTEE means the person or persons described in Section 8.2.
COMPENSATION means all of each Participant's wages as defined in
section 3401(a) of the Code together with all other compensatory payments
to an Employee by the Employer with respect to which the Employer must
furnish to the Employee a written statement pursuant to sections 6041(d)
and 6051(a)(3) of the Code, but determined without regard to any rules
(such as the exception for agricultural labor in section 3401(a)(2) of the
Code) which limit the remuneration included in wages based on the nature or
location of the employment or services performed.
Notwithstanding the above, Compensation shall include any amount which
is contributed by the Employer pursuant to a salary reduction agreement and
which is not includible in the gross income of the Employee under sections
125, 402(e)(3), 402(h) or 403(b) of the Code.
Notwithstanding the above, for Employee Deferral purposes and for
purposes other than allocations pursuant to provision(s) providing for
permitted disparity and/or Top-Heavy allocations, Compensation shall be
determined by excluding the following:
Overtime pay
Bonuses
Commissions
Car allowances
Taxable relocation earnings
Taxable fringe benefits
Taxable expense reimbursements
Taxable group term life insurance premiums
Miscellaneous income
Compensation shall include only that Compensation which is actually
paid to the Participant during the determination period. Except as
provided elsewhere in this Plan, the determination period shall be the Plan
Year.
Effective for Plan Years beginning after December 31, 1988, the annual
Compensation of each Participant taken into account for purposes of
determining all benefits provided under the Plan for any determination
period shall not exceed $200,000 as adjusted by the Secretary at the same
time and in the same manner as under section 415(d) of the Code
("Compensation Limit"), except that the dollar increase in effect on
January 1 of any calendar year shall be effective for years beginning in
such calendar year. The Compensation Limit for a determination period
shall be the Compensation Limit in effect on the January 1 coinciding with
or preceding such determination period. If Compensation is determined on
the basis of a 12-consecutive-month period ending within the Plan Year,
then the applicable Compensation Limit is the Compensation Limit in effect
for the calendar year in which such 12-month period begins. If
Compensation is determined on the basis of a period of less than 12
calendar months, the Compensation Limit shall be the annual Compensation
Limit which would otherwise be applicable multiplied by the ratio obtained
by dividing by 12 the number of full months in the short period. In
determining the Compensation of a Participant for purposes of the $200,000
limitation, the rules of
section 414(q)(6) of the Code shall apply except that, in applying such
rules, the term "family" shall include only the Spouse of the Participant
and any lineal descendants of the Participant who have not attained age 19
before the close of the Plan Year. If as a result of the application of
such rules the adjusted $200,000 limitation is exceeded, then (except for
purposes of determining the portion of Compensation up to the integration
level, as defined in Section 5.1, if applicable) the limitation shall be
prorated among the affected individuals in proportion to each such
individual's Compensation as determined prior to the application of this
limitation. Notwithstanding the above, effective for Plan Years beginning
after December 31, 1993, the annual Compensation Limit shall not exceed
$150,000, adjusted for calendar years beginning after 1994 at the same time
and in the same manner as under section 415(d) of the Code, but only if and
when the aggregate of such potential adjustments totals at least $10,000,
and then only in amounts of $10,000, in the manner described in section
401(a)(17) of the Code.
If Compensation for any prior determination period is taken into
account in determining an Employee's allocations or benefits for the
current determination period, the Compensation for such prior period is
subject to the applicable annual Compensation Limit in effect for that
prior period. For this purpose, for years beginning before January 1,
1990, the applicable annual Compensation Limit is $200,000.
DEFINED BENEFIT PLAN means a pension plan maintained by the Employer
which is qualified under section 401(a) of the Code and which is not a
Defined Contribution Plan, except to the extent that it maintains separate
accounts with respect to which it is treated as a Defined Contribution
Plan.
DEFINED CONTRIBUTION PLAN means a plan qualified under section 401(a)
of the Code and maintained by the Employer which provides for an account
for each individual who participates in the plan, from which account all
benefits attributable to amounts allocated to each such Participant's
account (and any income and expenses or gains or losses attributable to
such accounts, both realized and unrealized) are paid.
DISABILITY means any medically determinable physical or mental
impairment which results in an inability to engage in any substantial
gainful activity by reason thereof and which may 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 permanence and degree of such
impairment must be supported by medical evidence. Disability will be
determined to exist if the Participant is receiving disability benefits
under the Social Security Act or Railroad Retirement Act.
EFFECTIVE DATE The provisions of this amendment and restatement are
generally effective January 1, 1997, except for the retroactive effective
dates required by the Tax Reform Act of 1986, the Omnibus Budget
Reconciliation Act of 1986, the Omnibus Budget Reconciliation Act of 1987,
the Technical and Miscellaneous Revenue Act of 1988, the Omnibus Budget
Reconciliation Act of 1989, or any final Regulations published and
effective since the most recent effective date of this Plan. Further, to
the extent the Plan was operated in accordance with the provisions of this
amendment and restatement as of an effective date earlier than that
required by law, such date shall be the Effective Date.
EMPLOYEE means any common law employee of the Employer or any
Affiliate. The term Employee shall also include any Leased Employee deemed
to be an Employee of the Employer or any Affiliate as provided in section
414(n) or (o) of the Code.
EMPLOYEE ELECTIVE DEFERRALS means contributions to the Plan from an
Employee's salary, which the Employee could have received currently in
Compensation.
EMPLOYER means Meridian Insurance Group, Inc., any successor through
merger, consolidation or purchase of substantially all of the assets or
business of the entity which is the Employer immediately prior to such
succession, which successor, within 90 days after such succession, agrees
to continue this Plan; and any Affiliate which adopts the Plan.
EMPLOYER MATCHING CONTRIBUTIONS means those contributions made by the
Employer as described under Section 3.1 which are allocated to
Participants' Employer Matching Contribution Accounts, and does not include
Qualified Matching Contributions or Qualified Non-Elective Contributions
(if any).
EMPLOYER REGULAR CONTRIBUTIONS means those contributions made by the
Employer as described under Section 3.1 which are allocated to
Participants' Employer Regular Contribution Accounts, and does not include
Qualified Matching Contributions or Qualified Non-Elective Contributions
(if any).
ERISA means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
FORFEITURES means the nonvested portion, if any, of a Participant's
Account created as a result of termination of employment by the Participant
prior to the time he becomes 100 percent Vested in his Account. A
Forfeiture occurs immediately after the distribution of the entire Vested
portion of a Participant's Account.
HIGHLY COMPENSATED EMPLOYEE means and includes active highly
compensated Employees and former highly compensated Employees.
An active highly compensated Employee includes any Employee who
performed service for the Employer during the determination year and who,
during the look-back year: (1) received Compensation from the Employer in
excess of $75,000 (as adjusted pursuant to section 415(d) of the Code,
$100,000 for 1996); (2) received Compensation from the Employer in excess
of $50,000 (as adjusted pursuant to section 415(d) of the Code, $66,000 for
1996) and was a member of the top-paid group for such year; or (3) was an
officer of the Employer and received Compensation during such year in an
amount greater than 50 percent of the dollar limitation in effect under
section 415(b)(1)(A) of the Code ($60,000 for 1996). The term Highly
Compensated Employee also includes: (1) Each Employee who is (i) described
in the preceding sentence if the term "determination year" is substituted
for the term "look-back year" and (ii) who is one of the 100 Employees who
received the most Compensation from the Employer during the determination
year; and (2) Employees who are owners of more than 5 percent of the
Employer at any time during the look-back year or determination year. If
no officer has satisfied the Compensation requirement of (3) above during
either a determination year or look-back year, the highest paid officer for
such year shall be treated as a Highly Compensated Employee. For this
purpose, the determination year shall be the Plan Year. The look-back year
shall be the twelve-month period immediately preceding the determination
year.
A former highly compensated Employee includes any Employee who
separated (or was deemed to have separated) from service prior to the
determination year, who has performed no service for the Employer during
the determination year, and who was a highly compensated active Employee
for either the year of his separation from service or any determination
year ending on or after the Employee's 55th birthday.
If any Employee is, during a determination year or look-back year, a
member of the family of either (i) an owner of more than 5 percent of the
Employer who is an active or former Employee or (ii) a Highly Compensated
Employee who is one of the 10 most Highly Compensated Employees ranked on
the basis of Compensation paid by the Employer during such year, then the
family member and such owner or Highly Compensated Employee shall be
aggregated. In such case, the family member and owner or Highly
Compensated Employee shall be treated as a single Employee receiving
Compensation and Plan contributions or benefits equal to the sum of such
Compensation and contributions or benefits of the family member and owner
or Highly Compensated Employee. For purposes of this Section, family
members include the Spouse, lineal ascendants and descendants of the
Employee or former Employee and the Spouses of such lineal ascendants and
descendants.
The determination of who is a Highly Compensated Employee (including
the determination of the number and identity of Employees in the top-paid
group; the top 100 Employees, the number of Employees treated as officers,
and the Compensation that is considered) will be made in accordance with
section 414(q) of the Code and the Regulations promulgated thereunder. For
purposes of this definition, the Employer shall include any Affiliate.
HOUR OF SERVICE means:
(a) Each hour for which an Employee is paid, or entitled to payment,
for the performance of duties for the Employer. These hours will be
credited to the Employee for the computation period in which the duties are
performed;
(b) Each hour for which an Employee is paid, or entitled to payment,
by the Employer on account of a period of time during which no duties are
performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
Disability), layoff, jury duty, military duty or leave of absence. No more
than 501 hours of service will be credited under this paragraph for any
single continuous period (whether or not such period occurs in a single
computation period). Hours under this paragraph will be calculated and
credited pursuant to section 2530.200b-2 of the Department of Labor
regulations, which section is incorporated herein by this reference; and
(c) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The same hours of
service will not be credited both under paragraph (a) or paragraph (b), as
the case may be, and under this paragraph (c). These hours will be
credited to the Employee for the computation period or periods to which the
award or agreement pertains rather than the computation period in which the
award, agreement or payment is made.
For purposes of this definition, Employer includes any Affiliate.
Hours of Service will be credited for employment with other members of any
affiliated service group (under section 414(m) of the Code), controlled
group of corporations (under section 414(b) of the Code), or group of
trades or businesses under common control (under section 414(c) of the
Code) of which the adopting Employer is a member, and any other entity
required to be aggregated with the Employer pursuant to section 414(o) of
the Code and the Regulations promulgated thereunder.
Hours of Service will also be credited with respect to any individual
considered an Employee for purposes of this Plan under section 414(n) of
the Code and the Regulations promulgated thereunder.
Hours of Service will be credited for all employment with the Employer
regardless of whether the Employee was at the time an eligible Employee.
Service will be determined on the basis of the actual hours for which
an Employee is paid or entitled to payment.
LATE RETIREMENT DATE means the date, occurring after Normal Retirement
Age, on which an Employee actually retires from employment with the
Employer.
LEASED EMPLOYEE means any person (other than an Employee of the
Employer) who, pursuant to an agreement between the Employer and any other
person (the "leasing organization"), has performed services for the
Employer (or for the Employer and related persons determined in accordance
with section 414(n)(6) of the Code) on a substantially full time basis for
a period of at least one year, and such services are of a type historically
performed by Employees in the business field of the Employer.
Contributions or benefits provided to a Leased Employee by the leasing
organization which are attributable to services performed for the Employer
shall be treated as provided by the Employer.
A Leased Employee shall not be considered an Employee of the Employer
if (i) such Employee is covered by a money purchase pension plan maintained
by the leasing organization providing: (a) a non-integrated employer
contribution rate of at least 10 percent of Compensation, as defined in
section 415(c)(3) of the Code, but including amounts contributed pursuant
to a salary reduction agreement which are excludable from the Employee's
gross income under section 125, section 402(e)(3), section 402(h) or
section 403(b) of the Code, (b) immediate participation, and (c) full and
immediate vesting; and (ii) Leased Employees do not constitute more than 20
percent of the Employer's non-highly compensated workforce.
NON-HIGHLY COMPENSATED EMPLOYEE means an Employee who is not a Highly
Compensated Employee.
NORMAL RETIREMENT AGE means age 65.
ONE-YEAR BREAK IN SERVICE means a 12-consecutive-month period during
which the Participant does not complete more than 500 Hours of Service.
Solely for purposes of determining whether a One-Year Break in Service
has occurred for participation and vesting purposes, an individual who is
absent from work for maternity or paternity reasons shall receive credit
for the Hours of Service which would otherwise have been credited to such
individual but for such absence, or in any case in which such hours cannot
be determined, eight Hours of Service per day of such absence, to a maximum
of 501 Hours of Service for any one child-related absence. For purposes of
this paragraph, an absence from work for maternity or paternity reasons
means an absence: (1) by reason of the pregnancy of the individual; (2) by
reason of a birth of a child of the individual; (3) by reason of the
placement of a child with the individual in connection with the adoption of
such child by such individual; or (4) for purposes of caring for such child
for a period beginning immediately following such birth or placement. The
Hours of Service credited under this paragraph shall be credited in the
computation period in which the absence begins if necessary to prevent a
One-Year Break in Service in that period or, in all other cases, in the
next following computation period.
PARTICIPANT means an Employee of the Employer who participates in the
Plan pursuant to Article II; a former Employee who participated in the Plan
under Article II and who continues to be entitled to a Vested benefit under
the Plan; or a former Employee who participated in the Plan under Article
II, and who has not yet incurred a One-Year Break in Service. For purposes
of Section 6.17, "Participant" shall include a former Participant, as well
as a former Participant's Surviving Spouse and Participant's or former
Participant's Spouse or former Spouse who is the alternate payee under a
qualified domestic relations order as defined in section 414(p) of the Code
(who shall be deemed Participants with respect to such Spouse's interest
under the Plan).
PLAN means the Meridian Insurance Group, Inc. 401(k) Plan, as set
forth herein.
PLAN YEAR means the 12-consecutive-month period which begins on
January 1 and on each anniversary thereof.
QUALIFIED PRE-RETIREMENT SURVIVOR ANNUITY AND QUALIFIED JOINT AND
SURVIVOR ANNUITY shall have the meanings described in Section 6.11 of the
Plan.
REGULATIONS means the Treasury regulations pertaining to the Internal
Revenue Code of 1986, as amended from time to time.
REQUIRED DISTRIBUTIONS shall be as described in Section 6.10 of the
Plan.
SPOUSE means the Spouse or Surviving Spouse of the Participant,
provided that a former Spouse shall be treated as the Spouse or Surviving
Spouse to the extent provided under a "qualified domestic relations order"
as defined in section 414(p) of the Code.
TOP-HEAVY shall have the meaning and effect described in Article XI of
the Plan.
TRUST means the Trust as established under Article IX and maintained
for purposes of the Plan which is administered by the Trustee in accordance
with the provisions of the agreement of Trust between the Employer and the
Trustee. If the Trust is governed by a separate agreement entered into
between the Employer and the Trustee (which shall be incorporated by
reference herein and become part of the Plan) to the extent the terms of
such Trust agreement conflict with the Plan, the terms of such Trust
agreement will control except to the extent that it is necessary to follow
the terms of the Plan in order to maintain the qualified status of the Plan
under section 401(a) of the Code.
TRUSTEE means the party or parties named under the Trust who shall
have exclusive authority and discretion to manage and control the assets of
the Plan. Notwithstanding the above, to the extent the Plan expressly
provides, the Trustee shall be subject to the direction of the Committee
and/or Investment Manager.
TRUST FUND means all money and other property received or held by the
Trustee under the Trust, plus all income and gains and minus all losses,
expenses, and distributions chargeable to the Trust assets.
VALUATION DATE means any day on which the New York Stock Exchange is
open for business.
VESTED means nonforfeitable.
YEAR OF SERVICE means a 12-consecutive-month period during which an
Employee is credited with at least 1,000 Hours of Service. If a fractional
Year of Service is used in the Plan, there will be no Hours of Service
requirement.
ARTICLE II - ELIGIBILITY AND PARTICIPATION
SECTION 2.1 ELIGIBILITY REQUIREMENTS.
(a) Only Employees of the Employer will be eligible to participate in
the Plan.
(b) (i) Employees become eligible to participate in the Plan for
purposes of Employer Contributions, upon the completion of
one Year of Service.
(ii) Employees become eligible to make Employee Elective
Deferrals under the Plan regardless of attained age or
completed service.
(c) Notwithstanding any other provision of this Article II, all
Employees and former Employees who are Participants in the Plan
as of the date immediately preceding the Effective Date of this
amendment and restatement and who then have an Account balance
(whether or not nonforfeitable) shall continue their
participation in the Plan as restated. A former Employee who was
a Participant in the Plan and who received a distribution of his
entire nonforfeitable Account balance on account of termination
of employment may become eligible to participate in the Plan upon
re-employment either as a newly hired Employee or by satisfaction
of the eligibility provisions.
(d) Notwithstanding any other provision of this Plan, Employees
included within the following described classifications are
excluded from participation in this Plan:
(1) Employees in a unit of employees covered by a collective
bargaining agreement between the Employer and employee
representatives, if retirement benefits were the subject of
good faith bargaining and if two percent or less of the
Employees of the Employer who are covered pursuant to that
agreement are professionals as defined in section 1.410(b)-
9(g) of the Regulations. For this purpose, the term
"employee representatives" does not include any organization
more than half of whose members are Employees who are
owners, officers, or executives of the Employer.
(2) Seasonal Employees. For this purpose the term "Seasonal
Employees" shall mean Employees who are scheduled to work
less than 1,000 Hours of Service per year; provided,
however, that Employees who are scheduled to work less than
1,000 Hours of Service per year shall nevertheless become
eligible to participate in the Plan and make Employee
Elective Deferrals as provided in Section (b) of this
Section 2.1.
SECTION 2.2 PARTICIPATION.
An Employee will begin participation in the Plan on the first day of
the first Plan quarter coincident with or the next following completion of
the eligibility requirements set forth in Section 2.1 above.
In the case of any Participant whose employment with the Employer
terminates and who subsequently is re-employed by the Employer, such
Employee will participate immediately upon returning to employment.
ARTICLE III - CONTRIBUTIONS
SECTION 3.1 EMPLOYER CONTRIBUTIONS.
EMPLOYER MATCHING CONTRIBUTIONS:
For each Plan Year, the Employer may make an Employer Matching
Contribution to the Trust based on Employee Elective Deferrals. The amount
of the Employer Matching Contributions shall be determined for each Plan
Year by the Employer.
EMPLOYER REGULAR CONTRIBUTIONS:
For each Plan Year, the Employer may make an Employer Regular
Contribution to the Trust based on the total Compensation of all
Participants eligible to receive an allocation. The amount of the Employer
Regular Contribution shall be determined for each Plan Year by the
Employer.
QUALIFIED MATCHING AND QUALIFIED NON-ELECTIVE CONTRIBUTIONS:
At the discretion of the Employer, Qualified Matching Contributions or
Qualified Non-Elective Contributions may be made which may be used for
purposes of ensuring that the Plan complies with the nondiscrimination
tests of sections 401(k) or 401(m) of the Code and the Regulations
promulgated thereunder. Qualified Matching Contributions may be made with
respect to all Participants in an amount deemed necessary by the Employer
to pass the applicable nondiscrimination test(s), determined as a
percentage of such Participants' Employee Elective Deferrals. Qualified
Non-Elective Contributions may be made on behalf of all Participants in the
same percentage of Compensation for each until the nondiscrimination tests
of sections 401(k) and/or 401(m) of the Code are met.
SECTION 3.2 EMPLOYEE ELECTIVE DEFERRALS.
Each Plan Year, each Participant may elect to defer up to 16 percent
of Compensation (Employee Elective Deferrals) which will be contributed by
the Employer to the Plan. New Participants may commence deferrals as
specified in Section 2.2. A Participant may change his election or make a
new election as of any business day. Reasonable advance notification must
be given to the Plan Administrator or its designee by a Participant prior
to the first pay period affected by a modification.
In addition, a Participant may cease to have Employee Elective
Deferrals made as of any payroll period if reasonable advance notice is
given to the Plan Administrator or its designee prior to such date. The
Plan Administrator may reduce or completely prohibit Employee Elective
Deferrals at any time if the Administrator determines such action is
necessary to ensure compliance with section 401(k), 402(g), or 415 of the
Code.
Employee Elective Deferrals under this and all other qualified plans
maintained by the Employer may not be made on behalf of any Participant
during any taxable year to the extent such would exceed the dollar
limitation of section 402(g) of the Code in effect at the beginning of the
taxable year ($7,000 as adjusted for cost of living).
SECTION 3.3 AFTER-TAX EMPLOYEE CONTRIBUTIONS.
After-Tax Employee Contributions are not permitted, but were permitted
previously under the Plan.
SECTION 3.4 ROLLOVER CONTRIBUTIONS.
(a) An Employee, who is eligible to participate in the Plan under
Section 2.1, regardless of whether he has satisfied the
Participation requirements of Section 2.2, may roll over into the
Plan an eligible rollover distribution (as defined in section
402(c) of the Code) from another qualified plan, or from an
individual retirement account in the manner described in section
408(d)(3)(A)(ii) of the Code. If such rollover is not a direct
transfer as described in section 401(a)(31) of the Code, it must
be received by the Plan within 60 days of the date it was
received by the Participant from the distributing qualified plan
or individual retirement account.
(b) The Plan Administrator shall develop such procedures, and may
require such information from an Employee desiring to make such a
rollover, as he deems necessary or desirable to determine that
the proposed rollover will meet the requirements of this Section.
Upon approval by the Plan Administrator, the amount rolled over
shall be deposited in the Trust and shall be credited to the
Employee's Rollover Account. Such Account shall share in
allocations of earnings, losses and expenses of the Trust Fund,
but shall not share in allocations of Employer contributions.
The Employee's Rollover Account shall be distributed in
accordance with Article VI.
(c) In the event of a rollover contribution on behalf of an Employee
who is otherwise eligible to participate in the Plan but who has
not yet satisfied the participation requirements of Section 2.2,
such Employee's Rollover Account shall represent his sole
interest in the Plan until he becomes a Participant.
SECTION 3.5 TRUSTEE-TO-TRUSTEE TRANSFERS.
(a) Subject to Plan Administrator approval, an Employee, not excluded
from participation in the Plan, regardless of whether he has
satisfied any age and service requirements for participation, may
cause assets from the qualified plan of a prior employer to be
transferred directly by the trustee of such plan to the Trustee
of this Plan.
(b) A direct rollover as described in Section 6.17 shall not
constitute a trustee-to-trustee transfer for purposes of the
Plan.
SECTION 3.6 DEDUCTION LIMITATION.
Employer contributions made with respect to any Plan Year under this
Article III are conditioned upon such contributions being deductible by the
Employer for such Plan Year under section 404 of the Code.
ARTICLE IV - 401(K) AND 401(M)
SECTION 4.1 DISTRIBUTION OF EXCESS EMPLOYEE ELECTIVE DEFERRALS.
(a) Excess Employee Elective Deferrals shall be distributed in
accordance with the provisions of this Section 4.1. Excess
Employee Elective Deferrals are those elective deferrals that are
includible in a Participant's gross income because they exceed
the dollar limitation ($7,000 as adjusted for cost of living)
imposed under Code section 402(g). Excess Employee Elective
Deferrals shall be treated as Annual Additions under the Plan,
except to the extent they are distributed on or before the April
15 first following the close of a Participant's tax year.
(b) A Participant may attribute to this Plan any excess Employee
Elective Deferrals made during a taxable year of the Participant
by notifying the Plan Administrator, through actual or deemed
notification, on or before March 1 following the calendar year
when the excess Employee Elective Deferrals are made of the
amount of the excess Employee Elective Deferrals to be attributed
to the Plan. A Participant will be deemed to have notified the
Plan Administrator of any excess Employee Elective Deferrals
which exist when only those elective deferrals made to this Plan
and any other plan(s) maintained by the Employer are taken into
account.
(c) Notwithstanding any other provision of the Plan, excess Employee
Elective Deferrals, plus any income and minus any loss allocable
thereto, shall be distributed no later than April 15 to any
Participant to whose Account excess Employee Elective Deferrals
were attributed for the preceding year and who claims excess
Employee Elective Deferrals for such taxable year. With respect
to any taxable year, a Participant's Employee Elective Deferrals
are the sum of all Employer contributions made on behalf of such
Participant pursuant to an election to defer under any qualified
cash or deferred arrangement as described in section 401(k) of
the Code, any simplified employee pension cash or deferred
arrangement as described in section 402(h)(1)(B) of the Code, any
eligible deferred compensation plan under section 457 of the
Code, any plan described under section 501(c)(18) of the Code,
and any Employer contributions made on the behalf of a
Participant for the purchase of an annuity contract under section
403(b) of the Code pursuant to a salary reduction agreement, but
shall not include amounts distributed pursuant to the provisions
of Section 5.4(a)(3) of this Plan.
(d) Excess Employee Elective Deferrals shall be adjusted for any
income or loss during the Plan Year. The income or loss
allocable to excess Employee Elective Deferrals is the income or
loss allocable to the Participant's Employee Deferral Account for
the taxable year multiplied by a fraction, the numerator of which
is such Participant's excess Employee Elective Deferrals for the
year and the denominator is the Participant's Account balance
attributable to Employee Elective Deferrals without regard to any
income or loss occurring during such taxable year.
SECTION 4.2 ACTUAL DEFERRAL PERCENTAGE TEST.
(a) For each Plan Year, the Actual Deferral Percentage (ADP) for
Participants who are Highly Compensated Employees must bear a
relationship to the ADP for Participants who are Non-Highly
Compensated Employees which satisfies either of the following
tests for nondiscrimination:
(1) The ADP for Participants who are Highly Compensated
Employees is not more than the ADP for Participants who are
Non-Highly Compensated Employees multiplied by 1.25; or
(2) The ADP for Participants who are Highly Compensated
Employees is not more than the ADP for Participants who are
Non-Highly Compensated Employees multiplied by two, and the
ADP for Participants who are Highly Compensated Employees
does not exceed the ADP for Participants who are Non-Highly
Compensated Employees by more than two percentage points.
Actual Deferral Percentage means, for a specified group of
Participants for a Plan Year, the average of the ratios (calculated
separately for each Participant in such group) of (i) the amount of
Employer contributions actually paid over to the Trust on behalf of such
Participant for the Plan Year to (ii) the Participant's Compensation for
such Plan Year. Employer contributions on behalf of any Participant shall
include: (i) any Employee Elective Deferrals made pursuant to the
Participant's deferral election, including excess Employee Elective
Deferrals of Highly Compensated Employees, but excluding (A) Excess
Employee Elective Deferrals by Non-Highly Compensated Employees which are
attributable solely to Employee Elective Deferrals made under the Plan or
any other plan(s) of the Employer and (B) Employee Elective Deferrals that
are taken into account in the Contribution Percentage test (provided the
ADP test is satisfied both with and without exclusion of these Employee
Elective Deferrals); and (ii) at the election of the Employer, Qualified
Non-Elective Contributions and Qualified Matching Contributions made either
to the Plan or another plan of the Employer qualified under section 401(a)
of the Code. For purposes of computing Actual Deferral Percentages, any
Employee who would be a Participant but for the failure to make Employee
Elective Deferrals shall be treated as a Participant on whose behalf no
Employee Elective Deferrals are made. For Plan Years beginning before the
later of January 1, 1992, or 60 days after the publication of final
Regulations, Compensation may be limited to that which is received for the
period the Employee is a Participant.
(b) The ADP for any Participant who is a Highly Compensated Employee
for the Plan Year shall be determined by aggregating his employee
elective deferrals in all plans maintained by the Employer. If a
Highly Compensated Employee participates in two or more cash or
deferred arrangements having different plan years, all cash or
deferred arrangements ending with or within the same calendar
year shall be treated as a single arrangement. Notwithstanding
the above, any plans required to be mandatorily segregated
pursuant to Regulations promulgated under section 401(k) of the
Code shall not be aggregated for purposes of this Section 4.2.
(c) In the event that this Plan satisfies the requirements of
sections 401(k), 401(a)(4), or 410(b) of the Code only if
aggregated with one or more other plans, or if one or more other
Plans satisfy the requirements of such sections of the Code only
if aggregated with this Plan, then this Section shall be applied
by determining the ADP of Employees as if all such plans were a
single plan. For Plan Years beginning after December 31, 1989,
plans may be aggregated in order to satisfy section 401(k) of the
Code only if they have the same Plan Year.
(d) For purposes of determining the ADP of a Participant who is a 5-
percent owner or one of the ten most highly paid Highly
Compensated Employees, the Employee Elective Deferrals (and
Qualified Non-Elective Contributions or Qualified Matching
Contributions, or both, if treated as Employee Elective Deferrals
for purposes of the ADP test) and Compensation of such
Participant shall include, respectively, the Employee Elective
Deferrals (and, if applicable, Qualified Non-Elective
Contributions and Qualified Matching Contributions, or both) and
Compensation for the Plan Year of family members (as defined in
section 414(q)(6) of the Code). Such family members shall be
disregarded as separate Employees in determining the ADP both for
Participants who are Non-Highly Compensated Employees and for
Participants who are Highly Compensated Employees.
(e) In order to be considered for purposes of performing the ADP
test(s), Employee Elective Deferrals, Qualified Non-Elective
Contributions and Qualified Matching Contributions must be made
before the last day of the twelve-month period immediately
following the Plan Year to which such contributions relate.
(f) The Employer shall maintain annual records sufficient to
demonstrate satisfaction of the ADP test and identify the amount
of Qualified Non-Elective Contributions or Qualified Matching
Contributions, or both, used in such test.
(g) The determination and treatment of the amounts considered in
determining the ADP with respect to each Participant shall
satisfy such other requirements as may be prescribed by the
Secretary of the Treasury.
SECTION 4.3 DISTRIBUTION OF EXCESS CONTRIBUTIONS.
(a) Discriminatory Employee Elective Deferrals (Excess Contributions)
are, with respect to any Plan Year, the excess of:
(1) The aggregate amount of Employer contributions actually
taken into account in computing the ADP of Highly
Compensated Employees for such Plan Year, over
(2) The maximum amount of such contributions permitted pursuant
to the ADP test described under Section 4.2(a) (determined
by reducing contributions made on behalf of Highly
Compensated Employees in order, beginning with the
contributions made on behalf of the Employee with the
highest ADP).
(b) Notwithstanding any other provision of this Plan, Excess
Contributions, plus any income and minus any loss allocable
thereto, shall be distributed no later than the last day of each
Plan Year to Participants to whose Accounts such Excess
Contributions were allocated for the preceding Plan Year. Such
distributions shall be made to Highly Compensated Employees on
the basis of the respective portions of the Excess Contributions
attributable to each of such Employees, calculated as described
above. Excess Contributions shall be allocated to Participants
who are subject to the family member aggregation rules of section
414(q)(6) of the Code in proportion to the Employee Elective
Deferrals (and amounts treated as Employee Elective Deferrals) of
each family member whose Employee Elective Deferrals are included
in the combined ADP. Excess Contributions (including any amounts
recharacterized as After-Tax Employee Contributions as permitted
under Section 4.6) shall be treated as Annual Additions under the
Plan.
(c) Excess Contributions shall be adjusted for any income or loss
during the Plan Year. The income or loss allocable to Excess
Contributions is the income or loss allocable to the
Participant's Employee Deferral Account (and, if applicable, his
Qualified Non-Elective Contribution Account or Qualified Matching
Contributions Account, or both) for the Plan Year multiplied by a
fraction, the numerator of which is such Participant's Excess
Contributions for the year and the denominator of which is the
Participant's Account balance attributable to Employee Elective
Deferrals (and Qualified Non-Elective Contributions or Qualified
Matching Contributions, or both, if any of such contributions are
included in the ADP test) without regard to any income or loss
occurring during such Plan Year.
(d) Excess Contributions shall be distributed from the Participant's
Employee Deferral Account and Qualified Matching Contributions
Account (if applicable) in proportion to the Participant's
Employee Elective Deferrals and Qualified Matching Contributions
(to the extent used in the ADP test) for the Plan Year. Excess
Contributions shall be distributed from the Participant's
Qualified Non-Elective Contribution Account only to the extent
that such Excess Contributions exceed the balance of the
Participant's Employee Deferral Account and Qualified Matching
Contributions Account.
SECTION 4.4 ACTUAL CONTRIBUTION PERCENTAGE TEST.
(a) For each Plan Year, the Actual Contribution Percentage (ACP) of
Highly Compensated Employees must bear a relationship to the ACP
for Non-Highly Compensated Employees which satisfies either of
the following tests for nondiscrimination:
(1) The ACP for Participants who are Highly Compensated
Employees is not more than the ACP for Participants who are
Non-Highly Compensated Employees multiplied by 1.25; or
(2) The ACP for Participants who are Highly Compensated
Employees is not more than the ACP for Participants who are
Non-Highly Compensated Employees multiplied by two, and the
ACP for participants who are Highly Compensated Employees
does not exceed the ACP for Participants who are Non-Highly
Compensated Employees by more than two percentage points.
(b) If any Highly Compensated Employees have both Employee Elective
Deferrals and Matching Contributions and/or After-Tax Employee
Contributions made on their behalf to plans maintained by the
Employer, and the sum of the ADP and ACP of such Highly
Compensated Employees subject to either or both tests exceeds the
Aggregate Limit, then the ACP of each such Highly Compensated
Employee will be reduced (beginning with that of the Highly
Compensated Employee whose ACP is the highest) so that the limit
is not exceeded. The amount by which each Highly Compensated
Employee's Contribution Percentage Amount is reduced shall be
treated as an Excess Aggregate Contribution. The ADP and ACP of
the Highly Compensated Employees are determined after any
corrections required to meet the ADP and ACP tests. Multiple use
does not occur if either the ADP or ACP of the Highly Compensated
Employees does not exceed 1.25 multiplied by the ADP and ACP of
the Non-Highly Compensated Employees.
(c) For purposes of this Section, the Actual Contribution Percentage
for any Participant who is a Highly Compensated Employee and who
is eligible to have Contribution Percentage Amounts allocated to
his or her Account under two or more plans described in section
401(a) of the Code, or arrangements described in section 401(k)of
the Code that are maintained by the Employer, shall be determined
as if the total of such Contribution Percentage Amounts was made
under each plan. If a Highly Compensated Employee participates
in two or more cash or deferred arrangements that have different
plan years, all cash or deferred arrangements ending with or
within the same calendar year shall be treated as a single
arrangement. Notwithstanding the above, to the extent mandatorily
disaggregated pursuant to Treasury Regulations promulgated under
section 401(m) of the Code, applicable plans shall continue to be
treated as separate.
(d) In the event that this Plan satisfies the requirements of
sections 401(m), 401(a)(4) or 410(b) of the Code only if
aggregated with one or more other plans, or if one or more other
plans satisfy the requirements of such sections of the Code only
if aggregated with this Plan, then this Section shall be applied
by determining the Contribution Percentage of Employees as if all
such plans were a single plan. For plan years beginning after
December 31, 1989, plans may be aggregated in order to satisfy
section 401(m) of the Code only if they have the same plan year.
(e) For purposes of determining the Actual Contribution Percentage of
a Participant who is a five-percent owner or one of the ten most
highly paid Highly Compensated Employees, the Contribution
Percentage Amounts and Compensation of such Participant shall
include the Contribution Percentage Amounts and Compensation for
the Plan Year of family members as defined in section 414(q)(6)
of the Code. Family members, with respect to Highly Compensated
Employees, shall be disregarded as separate Employees in
determining the Contribution Percentage both for Participants who
are Non-Highly Compensated Employees and for Participants who are
Highly Compensated Employees.
(f) For purposes of determining the ACP test, Employee Contributions
are considered to have been made in the Plan Year in which
contributions were made to the Trust. Matching Contributions and
Qualified Non-Elective Contributions will be considered made for
a Plan Year if made no later than the end of the twelve-month
period beginning on the day after the close of the Plan Year.
(g) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ACP test and identify the amount of Qualified
Non-Elective Contributions or Qualified Matching Contributions,
or both, used in such test.
(h) The determination and treatment of the Contribution Percentage of
any Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
(i) Definitions:
"Average Contribution Percentage" means, for a specified group of
Participants for a Plan Year, the average of the ratios
(calculated separately for each Participant in such group) of the
Participant's Contribution Percentage Amounts to the
Participant's Compensation for the Plan Year (whether or not the
Employee was a Participant for the entire Plan Year).
"Aggregate Limit" -- In general, for purposes of this Section,
the Aggregate Limit is the greater of:
(1) The sum of:
(A) 1.25 times the greater of the Relevant Actual
Deferral Percentage or the Relevant Actual
Contribution Percentage, and
(B) Two percentage points plus the lesser of the
Relevant Actual Deferral Percentage or the
Relevant Actual Contribution Percentage. In no
event, however, shall this amount exceed twice the
lesser of the Relevant Actual Deferral Percentage
or the Relevant Actual Contribution Percentage; or
(2) The sum of:
(A) 1.25 times the lesser of the Relevant Actual
Deferral Percentage or the Relevant Actual
Contribution Percentage, and
(B) Two percentage points plus the greater of the
Relevant Actual Deferral Percentage or the
Relevant Actual Contribution Percentage. In no
event, however, shall this amount exceed twice the
greater of the Relevant Actual Deferral Percentage
or the Relevant Actual Contribution Percentage.
"Relevant Actual Deferral Percentage" means the Actual Deferral
Percentage of the group of Non-Highly Compensated Employees
eligible under the arrangement subject to section 401(k) of the
Code for the Plan Year, and the term "Relevant Actual
Contribution Percentage" means the Actual Contribution Percentage
of the group of Non-Highly Compensated Employees eligible under
the Plan subject to section 401(m) of the Code for the Plan Year
beginning with or within the Plan Year of the arrangement subject
to section 401(k) of the Code.
"Contribution Percentage" means the ratio (expressed as a
percentage) of the Participant's Contribution Percentage Amounts
to the Participant's Compensation for the Plan Year (whether or
not the Employee was a Participant for the entire Plan Year).
"Contribution Percentage Amounts" means the sum of the Employee
Contributions, Matching Contributions, and Qualified Matching
Contributions (to the extent not taken into account for purposes
of the ADP test) made under the Plan on behalf of the Participant
for the Plan Year. Such Contribution Percentage Amounts shall
not include Matching Contributions which are forfeited either in
order to correct Excess Aggregate Contributions or because the
contributions to which they relate are Excess Employee Deferrals,
Excess Contributions, or Excess Aggregate Contributions. The
Employer may include Qualified Non-Elective Contributions in the
Contribution Percentage Amounts. The Employer also may elect to
use Employee Elective Deferrals in the Contribution Percentage
Amounts so long as the ADP test is met before the Employee
Elective Deferrals are used in the ACP test and continues to be
met following the exclusion of those Employee Elective Deferrals
that are used to meet the ACP test.
"Eligible Participant" means any Employee who is eligible to make
an After-Tax Employee Contribution, or an Employee Elective
Deferral (if the Employer takes such contributions into account
in the calculation of the Contribution Percentage), or to receive
a Matching Contribution or a Qualified Matching Contribution.
"After-Tax Employee Contribution" means any contribution made to
the Plan by or on behalf of a Participant that is included in the
Participant's gross income in the year in which made and that is
maintained under a separate Account to which earnings and losses
are allocated.
"Matching Contribution" means an Employer contribution made to
this or any other Defined Contribution Plan on behalf of a
Participant on account of an Employee Contribution made by such
Participant, or on account of a Participant's Employee Elective
Deferral, under a plan maintained by the Employer.
SECTION 4.5 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS.
(a) "Excess Aggregate Contributions" means, with respect to any Plan
Year, the excess of:
(1) The Actual Contribution Percentage (ACP) amounts taken into
account in computing the numerator of the Contribution
Percentage actually made on behalf of Highly Compensated
Employees for such Plan Year, over
(2) The maximum contribution percentage amounts permitted by the
ACP test (determined by reducing contributions made on
behalf of Highly Compensated Employees in order of such
Employees' Actual Contribution Percentages beginning with
the highest of such percentages).
(b) Notwithstanding any other provision of this Plan, Excess
Aggregate Contributions, Notwithstanding any other provision of
this Plan, Excess Aggregate Contributions, plus any income and
minus any loss thereto, shall be forfeited if forfeitable or, if
not forfeitable, distributed no later than the last day of each
Plan Year to Participants to whose Accounts such Excess Aggregate
Contributions were allocated for the preceding Plan Year. Excess
Aggregate Contributions of Participants who are subject to the
family member aggregation rules of section 414(q)(6) of the Code
shall be allocated among applicable family members in proportion
to the After-Tax Employee and Employer Matching Contributions (or
amounts treated as Matching Contributions) of each family member
whose contributions are included in the combined ACP. Excess
Aggregate Contributions shall be treated as Annual Additions
under the Plan.
(c) Excess Aggregate Contributions shall be adjusted for any income
or loss during the Plan Year. The income or loss allocable to
Excess Aggregate Contributions shall be the Matching Contribution
Account (if any, and if all amounts therein are not used in the
ADP test) and, if applicable, Qualified Non-Elective Contribution
Account and Employee Deferral Account for the Plan Year
multiplied by a fraction, the numerator of which is such
Participant's Excess Aggregate Contributions for the year and the
denominator is the Participant's Account balance(s) attributable
to contribution percentage amounts without regard to any income
or loss occurring during such Plan Year.
(d) Forfeitures of Excess Aggregate Contributions may either be
reallocated to the Accounts of Non-Highly Compensated Employees
or applied to reduce Employer contributions.
(e) Excess Aggregate Contributions shall be forfeited, if
forfeitable, or distributed on a pro rata basis from the
Participant's After-Tax Employee Contribution Account, Matching
Contribution Account, and Qualified Matching Contribution Account
(and, if applicable, the Participant's Qualified Non-Elective
Contribution Account or Employee Deferral Account, or both).
SECTION 4.6 RECHARACTERIZATION.
Recharacterization is inapplicable to this Plan because there are
no After-Tax Employee Contributions.
ARTICLE V - ALLOCATIONS, VALUATION AND VESTING
SECTION 5.1 ALLOCATION OF CONTRIBUTIONS.
As of the Valuation Date, Employee Elective Deferrals, Employer
Matching Contributions, Qualified Non-Elective Contributions and Qualified
Matching Contributions will be allocated to Participants' Accounts in the
amounts in which they were contributed to the Plan by the Employer with
respect to each Participant pursuant to Article III.
As of the Valuation Date, Employer Regular Contributions made under
Section 3.1, if any, shall be allocated to the Account of each Participant
described in Section 5.2 according to either the ratio that such
Participant's Compensation for the Plan Year bears to the Compensation of
all Participants for such Plan Year.
SECTION 5.2 PARTICIPANTS WHO WILL RECEIVE AN ALLOCATION.
(a) An allocation of Employer Regular Contributions made under
Section 3.1 shall only be made with respect to those Participants
who have performed at least 1 Hour of Service during the Plan
Year.
(b) An allocation of Employer Matching Contributions made under
Section 3.1 shall only be made with respect to those Participants
who have performed at least 1 Hour of Service during the Plan
Year.
SECTION 5.3 ALLOCATION OF FORFEITURES.
There are no Forfeitures under the Plan since all Plan contributions
are 100 percent Vested.
SECTION 5.4 ALLOCATION LIMITATIONS.
(a) If the Participant does not participate in, and has never
participated in another qualified plan maintained by the
Employer, or a welfare benefit fund, as defined in section 419(e)
of the Code maintained by the Employer, or an individual medical
account, as defined in section 415(l)(2) of the Code, maintained
by the Employer, which provides an Annual Addition as defined in
subsection (d)(1), the following provisions shall apply:
(1) The amount of Annual Additions which may be credited to the
Participant's Account for any Limitation Year shall not exceed
the lesser of the Maximum Permissible Amount, as defined in
subsection (d)(9), or any other limitation contained in this
Plan. If contributions that would otherwise be contributed or
allocated to the Participant's Account would cause the Annual
Additions for the Limitation Year to exceed the Maximum
Permissible Amount, the amount contributed or allocated will be
reduced (Employee Elective Deferrals first) so that the Annual
Additions for the Limitation Year will equal the Maximum
Permissible Amount.
(2) 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 Section 415 Compensation for the Limitation
Year.
(3) If there is an excess Annual Addition due to a reasonable error
in estimating a Participant's Compensation or in determining
permissible Employee Elective Deferrals, or any other facts and
circumstances as determined by the Committee and which are found
by the Commissioner of Internal Revenue to justify the
availability of the procedures for correcting the excess as set
forth in this subsection, the excess will be corrected as
follows:
(A) Any After-Tax Employee Contributions, to the extent their
return would reduce the excess, will be returned to the
Participant;
(B) Any portion of the excess directly attributable to and
arising from Employee Elective Deferrals, to the extent its
return would reduce the excess, will be returned to the
Participant;
(C) If after the application of paragraphs (A) and (B) an excess
still exists, and the Participant is covered by the Plan at
the end of the Limitation Year, the excess in the
Participant's Account will be used to reduce Employer
contributions beginning with Employee Elective Deferrals, if
any, for the next Limitation Year, and each succeeding
Limitation Year if necessary;
(D) If after the application of paragraphs (A) and (B) an excess
still exists, and the Participant is not covered by the Plan
at the end of a Limitation Year, the excess will be held
unallocated in a suspense account. The suspense account
will be applied to reduce future contributions beginning
with Employee Elective Deferrals, if any, for all remaining
Participants for the next Limitation Year, and each
succeeding Limitation Year if necessary;
(E) If a suspense account is in existence at any time during a
Limitation Year pursuant to this Section, it will not
receive any allocation of the investment gains and losses of
the Trust. If a suspense account is in existence at any
time during a particular Limitation Year, all amounts in the
suspense account must be allocated and reallocated to
Participants' Accounts before any Employer or any After-Tax
Employee Contributions may be made to the Plan for that
Limitation Year. The excess amount may not be distributed
to Participants or former Participants.
(b) If, in addition to this Plan, a Participant is covered under
another qualified Defined Contribution Plan maintained by the
Employer, a welfare benefit fund (as defined in section 419(e) of
the Code) maintained by the Employer, or an individual medical
account (as defined in section 415(l)(2) of the Code) maintained
by the Employer, which provides an Annual Addition as defined in
subsection (d)(1), during any Limitation Year, the following
provisions shall apply:
(1) The Annual Additions which may be credited to a
Participant's Account under this Plan for any such
Limitation Year may not exceed the Maximum Permissible
Amount reduced by the Annual Additions credited to such
Participant's account under such other plans and/or welfare
benefit funds for the same Limitation Year. If the Annual
Additions with respect to the Participant under other
Defined Contribution Plans and welfare benefit funds
maintained by the Employer are less than the Maximum
Permissible Amount and the Employer contribution that would
otherwise be contributed or allocated to the Participant's
Account under this Plan would cause such Participant's
Annual Additions for the Limitation Year to exceed this
limitation, the amount contributed or allocated will be
reduced so that the Annual Additions under all such plans
and funds for the Limitation Year will equal the Maximum
Permissible Amount. If the Annual Additions with respect to
the Participant under such other Defined Contribution Plans
and welfare benefit funds in the aggregate are equal to or
greater than the Maximum Permissible Amount, no amount will
be contributed or allocated to the Participant's Account
under this Plan for the Limitation Year.
(2) 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 Section 415 Compensation for the
Limitation Year.
(3) If, as a result of a reasonable error in estimating
compensation, Employee contributions or other facts and
circumstances as determined by the Committee, a
Participant's Annual Additions under this Plan and such
other plans would include an amount in excess of the Maximum
Permissible Amount for a Limitation Year, the excess will be
deemed to consist of the Annual Additions last allocated,
except that Annual Additions attributableto a welfare
benefit fund or individual medical account will be deemed to
have been allocated first regardless of the actual
allocation date.
(4) If an amount in excess of the Maximum Permissible Amount was
allocated to a Participant on an allocation date of this
Plan which coincides with an allocation date of another
plan, the excess attributed to this Plan will be the product
of
(A) the total excess allocated as of such date and
(B) the ratio of (i) the Annual Additions allocated to
the Participant for the Limitation Year as of such
date under this Plan to (ii) the total Annual
Additions allocated to the Participant for the
Limitation Year as of such date under this and all
other qualified Defined Contribution Plans
maintained by the Employer.
(5) Any excess Annual Addition attributed to this Plan will be
disposed of in the manner described in subsection (a)(3).
(c) If the Employer maintains, or at any time maintained, a qualified
Defined Benefit Plan covering any Participant in this Plan, the sum of a
Participant's Defined Benefit Fraction and Defined Contribution Fraction
shall not exceed 1.0 in any Limitation Year. If the sum of the fractions
exceeds 1.0, the annual benefit provided under the Defined Benefit Plan
will be reduced until the sum of the fractions equals 1.0.
(d) Definitions:
(1) Annual Additions: The sum of the following amounts which
are credited to a Participant's Account for the Limitation
Year:
(A) Employer contributions,
(B) After-Tax Employee Contributions (if any), and
(C) Amounts allocated, after March 31, 1984, to an
individual medical account, as defined in section
415(1)(2) of the Code, which is part of a pension
or annuity plan maintained by the Employer, as
well as amounts derived from contributions paid or
accrued after December 31, 1985, in taxable years
ending after such date, attributable to post-
retirement medical benefits and allocated to the
separate account of a Key Employee, as defined in
section 419(d)(3) of the Code, under a welfare
benefit fund, as defined in section 419(e) of the
Code, maintained by the Employer.
For this purpose, any excess applied under
Sections (a)(3) or (b)(5) in the Limitation Year
to reduce Employer contributions will be
considered Annual Additions for such Limitation
Year.
(2) Section 415 Compensation: For purposes of this Section, a
Participant's Earned Income (if any), wages, salaries, and
fees for professional services and other amounts received
for personal services actually rendered in the course of
employment with the Employer maintaining the Plan
(including, but not limited to, commissions paid salesmen,
compensation for services on the basis of a percentage of
profits, commissions on insurance premiums, tips, bonuses,
fringe benefits, and reimbursements or expense allowances
under a nonaccountable plan as described in Treasury
Regulation Section 1.62-2(c)), and excluding the following:
(A) 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;
(B) 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;
(C) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified
stock option; and
(D) Other amounts which received special tax benefits,
or contributions made by the Employer (whether or
not under a salary reduction agreement) toward the
purchase of an annuity contract described in
section 403(b) of the Code (whether or not the
contributions are actually excludable from the
gross income of the Employee).
For Limitation Years beginning after December 31, 1991, for purposes
of applying the limitations of this Article, Section 415 Compensation for a
Limitation Year is the compensation actually paid or made available during
such Limitation Year. Section 415 Compensation does not include accrued
compensation unless it is uniform and consistent and paid within two weeks.
Notwithstanding the preceding sentence, Section 415 Compensation for a
Participant in a Defined Contribution Plan who is permanently and totally
disabled (as defined in section 22(e)(3) of the Code) is the compensation
such Participant would have received for the Limitation Year if the
Participant had been paid at the rate of compensation at which he was paid
immediately before becoming permanently and totally disabled; such imputed
compensation for the disabled Participant may be taken into account only if
the Participant is not a Highly Compensated Employee (as defined in section
414(q) of the Code) and contributions made on behalf of such Participant
are nonforfeitable when made.
(3) Defined Benefit Fraction: A fraction, the numerator of
which is the sum of the Participant's Projected Annual
Benefit under all Defined Benefit Plans (whether or not
terminated) maintained by the Employer, and the denominator
of which is the lesser of 125 percent of the dollar
limitation determined for the Limitation Year under sections
415(b) and (d) of the Code or 140 percent of the highest
average Section 415 Compensation, including any adjustments
under section 415(b) of the Code.
Notwithstanding the above, if the Participant was a Participant, as of
the first day of the first Limitation Year beginning after December 31,
1986, in one or more Defined Benefit Plans maintained by the Employer which
were in existence on May 6, 1986, the denominator of this fraction will not
be less than 125 percent of the sum of the annual benefits under such plans
which the Participant had accrued as of the close of the last Limitation
Year beginning before January 1, 1987, disregarding any changes in the
terms and conditions of the plan(s) after May 5, 1986. The preceding
sentence applies only if the Defined Benefit Plans individually and in the
aggregate satisfied the requirements of section 415 of the Code for all
Limitation Years beginning before January 1, 1987.
(4) Defined Contribution Dollar Limitation: $30,000 or, if
greater, one-fourth of the defined benefit dollar limitation
set forth in section 415(b)(1) of the Code, as indexed, as
in effect for the applicable Limitation Year.
(5) Defined Contribution Fraction: A fraction, the numerator of
which is the sum of the Annual Additions to the
Participant's Account under this and all other Defined
Contribution Plans (whether or not terminated) maintained by
the Employer for the current and all prior Limitation Years
(including the annual additions attributable to the
Participant's nondeductible Employee contributions to all
Defined Benefit Plans, whether or not terminated, maintained
by the Employer, and the annual additions attributable to
all welfare benefit funds, as defined in section 419(e) of
the Code, and individual medical accounts, as defined in
section 415(1)(2) of the Code, maintained by the Employer),
and the denominator of which is the sum of the maximum
aggregate amounts for the current and all prior Limitation
Years which also constituted Years of Service with the
Employer (regardless of whether a Defined Contribution Plan
was maintained by the Employer). The maximum aggregate
amount for any Limitation Year is the lesser of(A) 125
percent of the dollar limitation determined under sections
415(b) and (d) of the Code in effect under section
415(c)(1)(A) of the Code or (B) 35 percent of the
Participant's Section 415 Compensation for such year.
If the Employee was a Participant as of the end of the first day of
the first Limitation Year beginning after December 31, 1986 in one or more
Defined Contribution Plans maintained by the Employer which were in
existence on May 6, 1986, the numerator of this fraction will be adjusted
if the sum of this fraction and the Defined Benefit Fraction would
otherwise exceed 1.0 under the terms of this Plan. Under the adjustment,
an amount equal to the product of (1) the excess of the sum of the
fractions over 1.0, multiplied by (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.
The Annual Addition for any Limitation Year beginning before January
1, 1987, shall not be recomputed to treat all Employee contributions as
Annual Additions.
In determining the Defined Contribution Fraction under section
415(e)(3)(B) of the Code and pursuant to this Section of the Plan, "100
percent" shall be substituted for "125 percent" unless the minimum
allocation percentage under section 416(c)(2)(A) of the Code and Section
11.3(a) of the Plan is increased from "three percent" to "four percent" and
the Plan would not be a Top-Heavy Plan if the phrase "90 percent" were
substituted for each reference to the phrase "60 percent" in Section
11.2(b) of the Plan
(6) Employer: For purposes of this Article, any entity that
adopts this Plan, and all members of a controlled group of
corporations (as defined in section 414(b) of the Code as
modified by section 415(h) of the Code), all commonly
controlled trades or businesses (as defined in section
414(c) of the Code as modified by section 415(h) of the
Code) or affiliated service groups (as defined in section
414(m) of the Code) of which the adopting Employer is part,
and any other entity required to be aggregated with the
Employer pursuant to Regulations under section 414(o) of the
Code.
(7) Highest Average Compensation: The average Section 415
Compensation for the three consecutive Years of Service with
the Employer which produces the highest average.
(8) Limitation Year: The Limitation Year is the Plan Year. 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.
(9) Maximum Permissible Amount: The maximum Annual Addition
that may be contributed or allocated to a Participant's
Account under the Plan for any Limitation Year shall not
exceed the lesser of:
(A) the Defined Contribution Dollar Limitation, or
(B) 25 percent of the Participant's Section 415
Compensation for the Limitation Year.
The Section 415 Compensation limitation referred to in (B) shall not
apply to any contribution for medical benefits (within the meaning of
section 401(h) or section 419A(f)(2) of the Code) which is otherwise
treated as an Annual Addition under sections 415(1)(1) or 419A(d)(2) of the
Code.
If a short Limitation Year is created because an amendment changes the
Limitation Year to a different 12-consecutive-month period, the Maximum
Permissible Amount shall not exceed the Defined Contribution Dollar
Limitation multiplied by the following fraction:
Number of months in the short Limitation Year 12
(10) Projected Annual Benefit: The annual retirement benefit
(adjusted to an actuarially equivalent straight life annuity
if such benefit is expressed in a form other than a straight
life annuity or qualified joint and survivor annuity) to
which the Participant would be entitled under the terms of
the Plan assuming:
(A) The Participant will continue employment until
Normal Retirement Age under the Plan (or current
age, if later), and
(B) The Participant's Section 415 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.
SECTION 5.5 VALUATION.
The assets of the Trust will be valued on each Valuation Date at fair
market value. On such date, the earnings and losses of the Trust will be
allocated to each Participant's Account according to the ratio of such
Account balance to all Account balances, or by utilizing any other formula
as is appropriate under the circumstances.
SECTION 5.6 VESTING AND ACCRUAL
All Plan contributions are 100 percent Vested.
ARTICLE VI - DISTRIBUTIONS
SECTION 6.1 DISTRIBUTIONS OF SMALL ACCOUNT BALANCES.
If a Participant terminates service, and the value of the
Participant's Vested Account balance derived from Employer and Employee
contributions is not greater than $3,500, the Participant will receive a
distribution of the value of the entire Vested portion of such Account
balance. If the value of a Participant's Vested Account balance is zero,
the Participant shall be deemed to have received a distribution of such
Vested Account balance.
SECTION 6.2 DISTRIBUTIONS WHILE IN-SERVICE.
Subject to the provisions of Section 6.13, in-service distributions
shall be made, at the election of a Participant, in the following
circumstance(s):
(a) The Committee, at the election of the Participant and with the
consent of the Spouse of the Participant, shall direct the
Trustee to distribute to any Participant his Vested Account
balance after he has attained age 59 1/2.
(1) Age 59 1/2 withdrawals are available from the following
accounts and will be withdrawn from the Participant's
accounts in the following hierarchy:
(A) After-Tax Employee Contribution Account
(B) Employee Deferral Account
(C) Employer Matching Contribution Account
(D) Rollover Account
(E) Qualified Matching Contribution or Qualified Non-
Elective Contribution Accounts
(2) Withdrawals will be taken from the investment funds on a pro
rata basis.
(b) In-service distributions shall be permitted upon a showing of
hardship to the Committee which is permitted under Code section
401(k) and related regulations. A hardship withdrawal shall be
authorized only upon a showing of an immediate and heavy
financial need. The amount of an 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.
(1) The following are the only financial needs considered, for
purposes of the Plan, to be immediate and heavy:
(A) Expenses incurred or necessary for medical care
described in Code section 213(d) for the
Participant, Spouse, or any of his dependents (as
defined in Code section 152);
(B) Purchase (excluding mortgage payments) of a
principal residence for the Participant;
(C) Payment of tuition, related educational fees, and
room and board expenses, for the next 12 months of
post-secondary education for the Participant, his
Spouse, children, or dependents (as defined in
section 152 of the Code); or
(D) The need to prevent the eviction of the
Participant from his principal residence or
foreclosure on the mortgage of the Participant's
principal residence.
(2) A distribution will be considered necessary to satisfy an
immediate and heavy financial need of the Employee only if:
(A) The Employee has obtained all distributions, other
than hardship distributions, and all nontaxable
loans under all Plans maintained by the Employer;
(B) All Plans maintained by the Employer provide that
the Employee's Elective Deferrals (and Employee
Contributions) will be suspended for twelve months
after the receipt of the hardship distribution;
(C) The distribution is not in excess of the amount of
an immediate and heavy financial need (including
amounts necessary to pay any federal, state or
local income taxes or penalties reasonably
anticipated to result from the distribution); and
(D) All Plans maintained by the Employer provide that
the Employee may not make Employee Elective
Deferrals for the Employee's taxable year
immediately following the taxable year of the
hardship distribution in excess of the applicable
limit under section 402(g) of the Code for such
taxable year less the amount of such Employee's
Elective Deferrals for the taxable year of the
hardship distribution.
(3) Hardship withdrawals are available from the following
accounts and will be withdrawn from the Participant's
accounts in the following hierarchy:
(A) After-Tax Employee Contribution Account
(B) Employee Deferral Account
(C) Rollover Account
(D) Qualified Matching Contribution or Qualified Non-
Elective Contribution Accounts
(E) Employer Matching Contribution Account
(4) Withdrawals will be taken from the investment funds on a pro
rata basis.
(5) Hardship withdrawals are subject to the consent of the
Participant's Spouse.
(c) Notwithstanding anything herein to the contrary, a former
participant of Citizens Security Mutual Insurance Company 401(k)
Plan ("Citizens Plan") may withdraw from their After-Tax Employee
Contributions Account amounts transferred to this Plan from such
Citizens Plan at any time for any reason; provided, however, such
withdrawals are subject to the consent of the Participant's
Spouse.
SECTION 6.3 DISTRIBUTIONS UPON SEPARATION FROM SERVICE.
Subject to the provisions of Sections 6.8, 6.9 and 6.11, following the
request of the Participant and after approval of the Plan Administrator,
the Trustee shall distribute the value of the Participant's Vested Account
balance in one lump sum or in installment payments (as set forth below in
Section 6.18) as elected by the Participant. Such distribution shall begin
as soon as administratively feasible, following the Participant's
separation from service.
SECTION 6.4 DISTRIBUTIONS UPON RETIREMENT.
In the event that an applicable retirement date has been reached, and
subject to the terms of Sections 6.8, 6.9 and 6.11, all Vested amounts
credited to the Participant's Account balance shall become distributable.
The distribution will be made in one lump sum or in installment payments
(as set forth below in Section 6.18) as elected by the Participant. The
distribution will be made, as soon as administratively feasible, following
the applicable retirement date which will include the attainment of Normal
Retirement Age and after the Plan Administrator has approved the request of
the Participant.
SECTION 6.5 DISTRIBUTIONS UPON DEATH.
(a) Subject to the provisions of Sections 6.8, 6.9 and 6.11, upon
the death of a Participant, the Committee shall instruct the
Trustee, in accordance with this Article, to distribute the
Account of a deceased Participant to that Participant's
Beneficiary. The Participant shall not name as his Beneficiary
someone other than his Spouse unless and until the Participant
and Spouse designate, in writing on a valid waiver form provided
by the Committee for such purpose, an alternate Beneficiary,
which designation shall be witnessed by a notary public. In
addition, the Participant may designate a Beneficiary other than
his Spouse if: (1) the Participant is legally separated or has
been abandoned and the Participant has a court order to such
effect (and there is no "qualified domestic relations order" as
defined in section 414(p) of the Code), or (2) the Participant
has no Spouse, or (3) the Spouse cannot be located. Where the
Participant makes no designation, the Beneficiary shall be the
Spouse, and if there is no Spouse, the Beneficiary shall be the
Participant's estate. The Committee may require such proof of
death and such evidence of the right of other persons to be
Beneficiaries as it shall deem proper under the circumstances.
The Committee's determination of death and of the right of any
Beneficiary to receive payments shall be conclusive.
(b) The designation of a Beneficiary shall be made on a form approved
by the Committee. A Participant may revoke or change his
designation with the Committee by filing a new designation form
with the Committee. In the event that no valid designation
exists at the time of the Participant's death, and the
Participant has no Spouse, the death benefit shall be payable to
the Participant's estate.
(c) If the Participant dies after distribution of his interest has
begun, where the Participant has reached age 70 1/2, the Trustee
shall distribute the remaining portion of such interest as a lump
sum within one year of the Participant's death.
If the Participant dies before distribution of his interest has begun
or before age 70 1/2, his Account must be distributed as a lump sum within
five years of the December 31st following the death of the Participant for
all non-Spouse Beneficiaries. Notwithstanding the above, if the Spouse is
the Beneficiary, the distribution may be delayed at the election of the
Beneficiary until the date on which the Participant would have attained age
70 1/2.
SECTION 6.6 DISTRIBUTIONS UPON DISABILITY.
In the event of a Participant's total and permanent Disability, the
Trustee, as directed by the Plan Administrator, shall distribute, subject
to the provisions of Sections 6.8, 6.9 and 6.11, the value of the
Participant's Vested Account balance. The distribution will be made, after
the request of the Participant and the approval of the Plan Administrator,
in one lump sum or in installment payments (as set forth below in Section
6.18) as elected by the Participant. The distribution will be made as soon
as administratively feasible following the determination of Disability.
SECTION 6.7 SPECIAL BENEFICIARY PROVISIONS.
(a) Lost Beneficiary. If, after five years have expired following
reasonable efforts of the Committee to locate a Participant or
his Beneficiary, including sending a registered letter, return
receipt requested to the last known address, the Committee is
unable to locate the Participant or Beneficiary, then the amounts
distributable to such Participant or Beneficiary shall, pursuant
to applicable state and Federal laws, be treated as a Forfeiture
under the Plan. Where a Participant or Beneficiary is located
subsequent to a Forfeiture, such benefits shall be reinstated by
the Committee, and shall not count as an Annual Addition under
section 415 of the Code.
(b) Minor Beneficiary. The Committee may instruct the Trustee to
distribute a sum payable to a minor instead to his or her legal
guardian, or if there is no guardian, to a parent or other
responsible adult who maintains the residence of the minor. In
the alternative such distribution could be made to the
appropriate custodian under the Uniform Gifts to Minors Act or
Gift to Minors Act if applicable under the state laws of the
state in which the minor resides. Any payment in this format
shall discharge all fiduciaries involved in the distribution
including the Trustee, Employer, and Plan from liability in
regard to the transaction.
(c) Alternate Payee. A Participant's rights and benefits shall be
subject to the rights afforded to an alternate payee under a
qualified domestic relations order. In connection with a proper
qualified domestic relations order under section 414(p) of the
Code, a distribution shall be permitted if such distribution is
authorized by the qualified domestic relations order even if the
Participant has not achieved a distributable event under the
Plan.
SECTION 6.8 CONSENT OF THE PARTICIPANT REQUIRED FOR DISTRIBUTIONS IF
ACCOUNT BALANCES GREATER THAN $3,500.
If the value of a Participant's Vested Account balance derived from
Employer and Employee contributions exceeds (or at the time of any prior
distribution exceeded) $3,500, and the Account balance is immediately
distributable, the Participant (or where the Participant has died and the
Surviving Spouse is the beneficiary, the Surviving Spouse) must consent to
any distribution of such Account balance. An Account balance is
immediately distributable if any part of the Account balance could be
distributed to the Participant (or Surviving Spouse) before the Participant
attains, or would have attained if not deceased, the later of Normal
Retirement Age or age 62.
The consent of the Participant and the Participant's Spouse shall be
obtained in writing within the 90-day period ending on the annuity starting
date. The annuity starting date is the first day of the first period for
which an amount is paid as an annuity or any other form. The Plan
Administrator shall notify the Participant and the Participant's Spouse of
the right to defer any distribution until the Participant's Account balance
is no longer immediately distributable. Such notification shall include a
general description of the material features, and an explanation of the
relative values of, the optional forms of benefit available under the Plan
in a manner that would satisfy the notice requirements of section 417(a)(3)
of the Code, and shall be provided no less than 30 days and no more than 90
days prior to the annuity starting date.
Notwithstanding the foregoing, only the Participant need consent to
the commencement of a distribution in the form of a Qualified Joint and
Survivor Annuity while the Account balance is immediately distributable.
(Furthermore, if payment in the form of a Qualified Joint and Survivor
Annuity is not required with respect to the Participant by the Plan, only
the participant need consent to the distribution of an Account balance that
is immediately distributable.) Neither the consent of the Participant nor
the Participant's Spouse shall be required to the extent that a
distribution is required to satisfy section 401(a)(9) or section 415 of the
Code. In addition, upon termination of this Plan, if the Plan does not
offer an annuity option (purchased from a commercial provider) and if the
Employer or any entity within the same controlled group as the Employer
does not maintain another Defined Contribution Plan (other than an employee
stock ownership plan as defined in section 4975(e)(7) of the Code), the
Participant's Account balance may, without the Participant's consent, be
distributed to the Participant. However, if any entity within the same
controlled group as the Employer maintains another Defined Contribution
Plan (other than an employee stock ownership plan as defined as in section
4975(e)(7) of the Code, then the Participant's Account balance will be
transferred, without the Participant's consent, to the plan if the
Participant does not consent to an immediate distribution.
If a distribution is one to which sections 401(a)(11) and 417 of the
Code do not apply, such distribution may commence less than 30 days after
the notice required under section 1.411(a)-11(c) of the Income Tax
Regulations is given, provided that:
(a) 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
(b) the Participant, after receiving the notice, affirmatively elects
a distribution either in writing or by other permitted electronic
medium.
SECTION 6.9 COMMENCEMENT OF BENEFITS.
Unless the Participant elects otherwise, distribution of benefits will
begin no later than the 60th day after the latest of the close of the Plan
Year in which:
(a) the Participant attains age 65 (or Normal Retirement Age, if
earlier);
(b) occurs the 10th anniversary of the year in which the Participant
commenced participation in the Plan; or
(c) the Participant terminates service with the Employer.
Notwithstanding the foregoing, the failure of a Participant, Spouse or
Beneficiary to consent to a distribution while a benefit is immediately
distributable, within the meaning of Section 6.8 of the Plan, shall be
deemed to be an election to defer commencement of payment of any benefit
sufficient to satisfy this Section.
SECTION 6.10 REQUIRED DISTRIBUTIONS.
(a) The requirements of this Article shall apply to any distribution
of a Participant's interest and will take precedence over any
inconsistent provisions of this Plan. Unless otherwise
specified, the provisions of this Article apply to calendar years
beginning after December 31, 1984. All distributions shall be
determined and made in accordance with the proposed Regulations
promulgated under section 401(a)(9) of the Code, including the
minimum distribution incidental benefit requirement of section
1.401(a)(9)-2 of the proposed Regulations.
(b) The entire interest of a Participant must be distributed or must
begin to be distributed no later than the Participant's Required
Beginning Date (defined below) which is generally the April 1st
following his attainment of age 70 1/2.
Distributions may not be made over a period which exceeds each of the
following (or a combination thereof):
(1) the life of the Participant,
(2) the life of the Participant and a Designated Beneficiary,
(3) a period certain not extending beyond the Life Expectancy of
the Participant, or
(4) a period certain not extending beyond the joint life and
last survivor expectancy of the Participant and a Designated
Beneficiary.
(c) If the Participant's interest is to be distributed in other than
a single sum, the following minimum distribution rules shall
apply on or after the Required Beginning Date:
(1) Distributions During the Participant's Life: If a
Participant's benefit is to be distributed over (1) a period
not extending beyond the Life Expectancy of the Participant
or the joint life and last survivor expectancy of the
Participant and the Participant's Designated Beneficiary or
(2) a period not extending beyond the Life Expectancy of the
Designated Beneficiary, then the amount required to be
distributed for each calendar year, beginning with
distributions for the first Distribution Calendar Year, must
at least equal the quotient obtained by dividing the
Participant's benefit by the Applicable Life Expectancy.
For calendar years beginning before January 1, 1989, if the
Participant's Spouse is not the Designated Beneficiary, the method of
distribution selected must assure that at least 50 percent of the present
value of the amount available for distribution is paid within the Life
Expectancy of the Participant.
For calendar years beginning after December 31, 1988, the amount to be
distributed each year, beginning with distributions for the first
Distribution Calendar Year shall not be less than the quotient obtained by
dividing the Participant's benefit by the lesser of (1) the Applicable Life
Expectancy or (2) if the Participant's Spouse is not the Designated
Beneficiary, the applicable divisor determined from the table set forth in
Q&A-4 of section 1.401(a)(9)-2 of the proposed Regulations. Distributions
after the death of the Participant shall be made using the Applicable Life
Expectancy above as the relevant divisor without regard to proposed
Regulations section 1.401(a)(9)-2.
The minimum distribution required for the Participant's first
Distribution Calendar Year must be made on or before the Participant's
Required Beginning Date. The minimum distribution for other calendar
years, including the minimum distribution for the Distribution Calendar
Year in which the Employee's Required Beginning Date occurs, must be made
on or before December 31 of that Distribution Calendar Year.
(2) Distributions After the Participant's Death: If the
Participant dies after distribution of his interest has
begun and after attaining age 70 1/2, the remaining portion
of such interest, if any, will continue to be distributed at
least as rapidly as under the method of distribution being
used prior to the Participant's death.
If the Participant dies before distribution of his interest began or
prior to attaining age 70 1/2, distribution of the Participant's entire
interest shall be completed by the later of December 31 of the calendar
year containing the fifth anniversary of the Participant's death or, if any
portion of the Participant's interest is payable to a Designated
Beneficiary, distributions may be made over the life or over a period
certain not greater than the Life Expectancy of the Designated Beneficiary
commencing on or before December 31 of the calendar year immediately
following the calendar year in which the Participant died notwithstanding
the above, however, but if the Designated Beneficiary is the Participant's
Surviving Spouse, distributions are required to begin not earlier than the
later of (a) December 31 of the calendar year in which the Participant
died, or (b) December 31 of the calendar year in which the Participant
would have attained age 70 1/2.
If the Participant has not made an election pursuant to this Section
by the time of his or her death, the Participant's Designated Beneficiary
must elect the method of distribution no later than the earlier of (1)
December 31 of the calendar year in which distributions would be required
to begin under this Section, or (2) December 31 of the calendar year which
contains the fifth anniversary of the date of death of the Participant. If
the Participant has no Designated Beneficiary, or if the Designated
Beneficiary does not elect a method of distribution, distribution of the
Participant's entire interest must be completed by December 31 of the
calendar year containing the fifth anniversary of the Participant's death.
For purposes of the above paragraphs, if the Surviving Spouse dies
after the Participant, but before payments to such Spouse begin, the
provisions above, except for the spousal exception rule, shall be applied
as if the Surviving Spouse were the Participant.
Any amount paid to a child of the Participant will be treated as if it
has been paid to the Surviving Spouse if the amount becomes payable to the
Surviving Spouse when the child reaches the age of majority.
Distribution of a Participant's interest is considered to begin on the
Participant's Required Beginning Date (or, if applicable, the date
distribution is required to begin to the Surviving Spouse pursuant to the
above). If distribution in the form of an annuity irrevocably commences to
the Participant before the Required Beginning Date, the date distribution
is considered to begin is the date distribution actually commences.
(3) Definitions:
(A) Applicable Life Expectancy: The Life Expectancy
(or joint life and last survivor expectancy)
calculated using the attained age of the
Participant (or Designated Beneficiary) as of the
Participant's (or Designated Beneficiary's)
birthday in the applicable calendar year reduced
by one (1) for each calendar year which has
elapsed since the date the Life Expectancy was
first calculated. If Life Expectancy is being
recalculated, the Applicable Life Expectancy shall
be the Life Expectancy as so recalculated. The
applicable calendar year shall be the first
Distribution Calendar Year and if Life Expectancy
is being recalculated, such succeeding calendar
year.
(B) Designated Beneficiary: An individual
affirmatively elected by the Participant or the
Participant's Surviving Spouse. If no Beneficiary
is elected, the Designated Beneficiary shall be
the Spouse of the Beneficiary under the Plan in
accordance with section 401(a)(9) of the Code and
the proposed Regulations thereunder.
(C) Distribution Calendar Year: A calendar year for
which a minimum distribution is required. For
distributions beginning before the Participant's
death, the first Distribution Calendar Year is the
calendar year immediately preceding the calendar
year which contains the Participant's Required
Beginning Date. For distributions beginning after
the Participant's death, the first Distribution
Calendar Year is the calendar year in which
distributions are required to begin pursuant to
the above.
(D) Life Expectancy: Life Expectancy and joint life
and last survivor expectancy are computed by use
of the expected return multiples in Tables V and
VI of section 1.72-9 of the Regulations.
Unless the Participant or the Surviving Spouse elects otherwise by the
time distributions are required to begin, life expectancies shall be
recalculated annually. An election shall be irrevocable as to the
Participant or Surviving Spouse and shall apply to all subsequent years.
The Life Expectancy of a non-Spouse Beneficiary may not be recalculated.
(E) Participant's Benefits:
(i) The Account balance as of the last Valuation Date
in the calendar year immediately preceding the
Distribution Calendar Year (valuation calendar
year) increased by the amount of any contributions
allocated to the Account balance as of dates in
the valuation calendar year after the Valuation
Date and decreased by distributions made in the
valuation calendar year after the Valuation Date.
(ii) For purposes of paragraph (a) above, if any
portion of the minimum distribution for the first
Distribution Calendar Year is made in the second
Distribution Calendar Year on or before the
Required Beginning Date, the amount of the minimum
distribution made in the second Distribution
Calendar Year shall be treated as if it had been
made in the immediately preceding Distribution
Calendar Year.
(F) Required Beginning Date:
(i) General Rule. The Required Beginning Date of a
Participant is the first day of April of the
calendar year following the calendar year in which
the Participant attains age 70 1/2 subject to the
transitional rules below.
(ii) Transitional rules. The Required Beginning Date
of a Participant who attains age 70 1/2 before
January 1, 1988, shall be determined in accordance
with (a) or (b) below:
(a) Non-5-percent owners. The Required Beginning Date of a
Participant who is not a 5-percent owner is the first day of
April of the calendar year following the calendar year in which
the later of retirement or attainment of age 70 1/2 occurs.
(b) 5-percent owners. The Required Beginning Date of a Participant
who is a 5-percent owner during any year beginning after December
31, 1979, is the first day of April following the later of:
(I) the calendar year in which the Participant attains age
70 1/2, or
(II) the earlier of the calendar year with or within which
ends the Plan Year in which the Participant becomes a
5-percent owner, or the calendar year in which the
Participant retires.
(III) The Required Beginning Date of a Participant who
is not a 5-percent owner who attains age 70 1/2
during 1988 and who has not retired as of January
1, 1989, is April 1, 1990.
(iii) 5-percent owner. A Participant is treated as
a 5-percent owner for purposes of this
Section if such Participant is a 5-percent
owner as defined in section 416(i) of the
Code (determined in accordance with section
416 of the Code but without regard to whether
the Plan is Top-Heavy) at any time during the
Plan Year ending with or within the calendar
year in which such owner attains age 66 1/2
or any subsequent Plan Year.
(iv) Once distributions have begun to a 5-percent owner
under this Section, they must continue to be
distributed even if the Participant ceases to be a
5-percent owner in a subsequent year.
(d) Transitional Rules for TEFRA Elections:
Notwithstanding the other requirements of this Section and
subject to the joint and survivor annuity requirements,
distribution on behalf of any Employee, including a 5-percent
owner, may be made if all of the following requirements are
satisfied (regardless of when such distribution commences):
(1) The distribution by the Trust is one which would not have
disqualified the Trust under section 401(a)(9) of the Code
as in effect prior to amendment by the Deficit Reduction Act
of 1984.
(2) The distribution is in accordance with a method of
distribution designated by the Employee whose interest in
the Trust is being distributed or, if the Employee is
deceased, by a Beneficiary of such Employee.
(3) Such designation was in writing, was signed by the Employee
or the Beneficiary, and was made before January 1, 1984.
(4) The Employee had accrued a benefit under the Plan as of
December 31, 1983.
(5) The method of distribution designated by the Employee or the
Beneficiary specifies the time at which distribution will
commence, the period over which distributions will be made,
and in the case of any distribution upon the Employee's
death, the Beneficiaries of the Employee listed in order of
priority.
A distribution upon death will not be covered by this transitional
rule unless the information in the designation contains the required
information described above with respect to the distributions to be made
upon the death of the Employee.
For any distribution which commences before January 1, 1984, but continues
after December 31, 1983, the Employee or the Beneficiary to whom such
distribution is being made, will be presumed to have designated the method
of distribution under which the distribution is being made if the method of
distribution was specified in writing and the distribution satisfied the
requirements of (1) and (5) above. If a designation is revoked, any
subsequent distribution must satisfy the requirements of section 401(a)(9)
of the Code and the proposed Regulations thereunder. If a designation is
revoked subsequent to the date distributions are required to begin, the
Trust must distribute by the end of the calendar year following the
calendar year in which the revocation occurs the total amount not yet
distributed which would have been required to have been distributed to
satisfy section 401(a)(9) of the Code and the proposed Regulations
thereunder, but for the section 242(b)(2) election. For calendar years
beginning after December 31, 1988, such distributions must meet the minimum
distributions incidental benefit requirements in section 1.401(a)(9)-2 of
the proposed Regulations. Any changes in the designation will be
considered to be a revocation of the designation. However, the mere
substitution or addition of another Beneficiary (one not named in the
designation) under the designation will not be considered to be a
revocation of the designation, so long as such substitution or addition
does not alter the period over which distributions are to be made under the
designation, directly or indirectly (for example, by altering the relevant
measuring life). In the case in which an amount is transferred or rolled
over from the Plan to another plan, the rules in Q&A J-2 and Q&A J-3 of the
proposed Regulations shall apply.
SECTION 6.11 JOINT & SURVIVOR ANNUITY REQUIREMENTS.
The provisions of subsections (b) through (e) of this Section 6.11
shall apply to any Participant who is credited with at least one Hour of
Service with the Employer on or after August 23, 1984 to the extent such
Participant does not come within the safe harbor described in Section
6.11(a) below:
(a) Safe Harbor: This safe harbor shall apply to a Participant if
the following conditions are satisfied: (1) the Participant does
not or cannot elect payments under this Plan in the form of a
life annuity, and (2) on the death of a Participant, the
Participant's Vested Account Balance will be paid to the
Participant's Surviving Spouse, but if there is no Surviving
Spouse, or if the Surviving Spouse has consented in a manner
conforming to a Qualified Election (as discussed in paragraph
(d)(4) in this Section, other than the notice requirements) then
to the Participant's designated Beneficiary.
The Surviving Spouse must be able to elect the commencement of
distribution of the Vested Account Balance within the 90-day period
following the date of the Participant's death. The Account balance shall
be adjusted for gains or losses occurring after the Participant's death in
accordance with the provisions of the Plan governing the adjustment of
account balances for other types of distributions. This Section shall not
be operative with respect to a Participant if and to the extent that the
Plan is a direct or indirect transferee with respect to such Participant of
a Defined Benefit Plan, money purchase pension plan, a target benefit plan,
stock bonus or profit sharing plan which is subject to the survivor annuity
requirements of section 401(a)(11) and section 417 of the Code.
(b) If this safe harbor is applicable, then the remaining provisions
of this Section 6.11, other than the transitional rule of
subsection (f), shall be inoperative.
(c) Qualified Joint and Survivor Annuity (QJSA): Unless an optional
form of benefit is selected pursuant to a Qualified Election
within the 90-day period ending on the Annuity Starting Date, a
married Participant's Vested Account Balance will be paid in the
form of a QJSA and an unmarried Participant's Vested Account
Balance will be paid in the form of a life annuity. The
Participant may elect to have such annuity distributed upon
attainment of the Earliest Retirement Age under the Plan.
(d) Qualified Pre-retirement Survivor Annuity (QPSA): Unless an
optional form of benefit has been selected pursuant to a
Qualified Election within the Election Period, if a Participant
dies before the Annuity Starting Date then 50 percent of the
Participant's Account balance derived from Employer Contributions
and Employee Elective Deferrals shall be used to purchase an
annuity for the Surviving Spouse and the remaining portion shall
be paid to other Beneficiaries of the Participant. To the extent
that less than 100 percent of such Account balance is paid to the
Surviving Spouse, the amount of the Participant's Account balance
attributable to Employee Contributions which is allocated to the
Surviving Spouse shall be in the same proportion as the Account
balance derived from Employer Contributions and Employee Elective
Deferrals bears to the total Account balance of the Participant.
(e) Definitions:
(1) Election Period: The period which begins on the first day
of the Plan Year in which the Participant attains age 35 and
ends on the date of the Participant's death. If a
Participant separates from service prior to the first day of
the Plan Year in which he attains age 35, the Election
Period shall begin on the date of separation with respect to
the Account balance as of such date.
(2) Pre-Age 35 Waiver: A Participant who will not have reached
age 35 as of the end of any current Plan Year may make a
special Qualified Election to waive the Qualified Pre-
retirement Survivor Annuity for the period beginning on the
date of such election and ending on the first day of the
Plan Year in which the Participant will attain age 35. Such
election shall not be valid unless the Participant receives
a written explanation of the Qualified Pre-retirement
Survivor Annuity in such terms as are comparable to the
explanation required under subsection (f). Qualified Pre-
retirement Survivor Annuity coverage will be automatically
reinstated as of the first day of the Plan Year in which the
Participant attains age 35. any new waiver on or after such
date shall be subject to the full requirements of this
Section.
(3) Earliest Retirement Age: The earliest date on which, under
the Plan, the Participant could elect to receive retirement
benefits.
(4) Qualified Election: An effective waiver of a QJSA or a
QPSA. Any waiver of a QJSA or a QPSA shall not be effective
unless: (a) the Participant's Spouse consents in writing to
the election; (b) the election designates a specific
Beneficiary, including any class of Beneficiaries or any
contingent Beneficiaries, which may not be changed without
spousal consent (or the Spouse expressly permits
designations by the Participant without any further spousal
consent); (c) the Spouse's consent acknowledges the effect
of the election; and (d) the Spouse's consent is witnessed
by a Plan representative or notary public. Additionally, a
Participant's waiver of the QJSA shall not be effective
unless the election designates a form of benefit payment
which may not be changed without spousal consent (or the
Spouse expressly permits designations by the Participant
without any further spousal consent). If it is established
to the satisfaction of a Plan representative that there is
no Spouse or that the Spouse cannot be located, a waiver
will be deemed a Qualified Election.
Any consent by a Spouse obtained under this provision (or
establishment that the consent of a Spouse may not be obtained) shall be
effective only with respect to such Spouse. A consent that permits
designations by the Participant without any requirement of further consent
by such Spouse must acknowledge that the Spouse has the right to limit
consent to a specific Beneficiary and/or to a specific form of benefit,
where applicable, and that the Spouse voluntarily elects to relinquish
either or both of such rights. A revocation of a prior waiver may be made
by a Participant without the consent of the Spouse at any time before the
commencement of benefits. The number of revocations shall not be limited.
No consent obtained under this provision shall be valid unless the
Participant has received notice as provided in subsection (e) below.
(5) QJSA: An immediate annuity for the life of the Participant
with a survivor annuity for the life of the Spouse which is
50 percent of the amount of the annuity which is payable
during the joint lives of the Participant and the Spouse and
which is the amount of benefit which can be purchased with
the Participant's Vested Account Balance.
(6) QPSA. An immediate annuity for the life of the Spouse of a
Participant who dies before the annuity starting date and
which is the amount of benefit which can be purchased with
the Participant's Vested Account Balance.
(7) Spouse (Surviving Spouse): The Spouse or Surviving Spouse
of the Participant, provided that a former Spouse will be
treated as the Spouse or Surviving Spouse and a current
Spouse will not be treated as the Spouse or Surviving Spouse
to the extent provided under a qualified domestic relations
order as described in section 414(p) of the Code.
(8) Annuity Starting Date: The first day of the first period
for which an amount is paid as an annuity or any other form.
(9) Vested Account Balance: The aggregate value of the
Participant's Vested Account Balances derived from Employer
and Employee contributions (including rollovers), whether
Vested before or upon death, including the proceeds of
insurance contracts, if any, on the Participant's life. The
provisions of this Article shall apply to a Participant who
has a Vested Account balance attributable to Employer
contributions, Employee contributions, or both at the time
of death or distribution.
(f) Notice Requirements.
(1) In the case of a QJSA, the Plan Administrator shall, within
the period which ends no less than 30 days and begins no
more than 90 days prior to the Annuity Starting Date,
provide each Participant with a written explanation of: (1)
the terms and conditions of a QJSA; (2) the Participant's
right to make, and the effect of, an election to waive the
QJSA form of benefit; (3) the rights of a Participant's
Spouse; and (4) the right to make, and the effect of, a
revocation of a previous election to waive the QJSA.
A Participant may waive the requirement that the written explanation,
described above, be provided no less than 30 days prior to the Annuity
Starting Date if the distribution commences more than 7 days after such
written explanation is provided.
(2) In the case of a QPSA, the Plan Administrator shall provide
each Participant within the applicable period for such
Participant with a written explanation of the QPSA in such
terms and in such manner as would be comparable to the
explanation provided for meeting the requirements applicable
to a QJSA.
The applicable period for a Participant is whichever of the following
periods ends last: (i) the period beginning with the first day of the Plan
Year in which the Participant attains age 32 and ending with the close of
the Plan Year preceding the Plan Year in which the Participant attains age
35; (ii) a reasonable period ending after the individual becomes a
Participant; (iii) a reasonable period ending after the Plan no longer
fully subsidizes the cost of a QPSA or QJSA and no longer prohibits the
waiver of such requirements; or (iv) a reasonable period ending after this
Article first applies to the Participant. Notwithstanding the foregoing,
notice must be provided within a reasonable period ending after separation
from service in the case of a Participant who separates from service before
attaining age 35.
For purposes of applying the preceding paragraph, a reasonable period
ending after the enumerated events described in (ii), (iii) and (iv)
consists of the two-year period beginning one year prior to the date the
applicable event occurs and ending one year after that date. In the case
of a Participant who separates from service before the Plan Year in which
he attains age 35, notice shall be provided within the two-year period
beginning one year prior to separation from service and ending one year
after such separation. If the Participant thereafter returns to employment
with the Employer, the applicable period for such Participant shall be
redetermined.
(3) Notwithstanding the other requirements of this Section, the
respective notices prescribed by this Section need not be
given to a Participant if (i) the Plan fully subsidizes the
costs of a QJSA or QPSA, and (ii) the Plan does not allow
the Participant to waive the QJSA or QPSA and does not allow
a married Participant to designate a non-Spouse Beneficiary.
For purposes of this Section, a Plan fully subsidizes the
costs of a benefit if no increase in cost, or decrease in
benefits to the Participant may result from the
Participant's failure to elect another benefit.
(g) Transitional Rules.
(1) Any living Participant not receiving benefits on August 23,
1984 who would otherwise not receive the benefits prescribed
must be given the opportunity to elect to have the prior
provisions of this Section apply if such Participant is
credited with at least one Hour of Service under this Plan
or a predecessor plan in a Plan Year beginning on or after
January 1, 1976, and such Participant had at least 10 years
of Vested service when he or she separated from service.
(3) The respective opportunities to elect (as described in
subsections (e)(1) and (e)(2) above) must be afforded to the
appropriate Participants during the period commencing on
August 23, 1984, and ending on the date benefits would
otherwise commence to said Participants.
(4) Any Participant who has elected pursuant to subsection
(f)(2) of this Section and any Participant who does not
elect under subsection (f)(1) or who meets the requirements
of subsection (f)(1) except that such Participant does not
have at least 10 years of vesting service when he or she
separates from service, shall have his or her benefits
distributed in accordance with all of the following
requirements if benefits would have been payable in the form
of a life annuity:
(A) Automatic joint and survivor annuity. If benefits
in the form of a life annuity become payable to a
married Participant who:
(i) begins to receive payments under the Plan on
or after his Normal Retirement Age; or
(ii) dies on or after his Normal Retirement Age
while still working for the Employer; or
(iii) begins to receive payments on or after
his Qualified Early Retirement Age; or
(iv) separates from service on or after reaching
his Normal Retirement Age (or the Qualified
Early Retirement Age) and after satisfying
the eligibility requirements for the payment
of benefits under the Plan and thereafter
dies before beginning to receive such
benefits; then such benefits will be received
under this Plan in the form of a Qualified
Joint and Survivor Annuity, unless the
Participant has elected otherwise during the
Election Period. The Election Period must
begin at least 6 months before the
Participant attains Qualified Early
Retirement Age and end not more than 90 days
before the commencement of benefits. Any
election hereunder will be in writing and may
be changed by the Participant at any time.
(B) Election of early survivor annuity. A Participant who
is employed after attaining the Qualified Early
Retirement Age will be given the opportunity to elect,
during the Election Period, to have a survivor annuity
payable on death. If the Participant elects the
survivor annuity, payments under such annuity must not
be less than the payments which would have been made to
the Spouse under the Qualified Joint and Survivor
Annuity if the Participant had retired on the day
before his or her death. Any election under this
provision will be in writing and may be changed by the
Participant at any time. The Election Period begins on
the later of (1) the 90th day before the Participant
attains the Qualified Early Retirement Age, or (2) the
date on which participation begins, and ends on the
date the Participant terminated employment.
(C) For purposes of this subsection:
(i) Qualified Early Retirement Age is the latest of:
(a) the earliest date, under the Plan, on which
the Participant may elect to receive
retirement benefits,
(b) the first day of the 120th month beginning
before the Participant reaches the Normal
Retirement Age, or
(c) the date the Participant begins
participation.
(d) Qualified Joint and Survivor Annuity is an
annuity for the life of the Participant with
a survivor annuity for the life of the Spouse
as described in subsection (c)(4) of this
Section.
SECTION 6.12 ANNUITY CONTRACT.
(a) Nontransferability of annuities. Any annuity contract
distributed from the Plan must be nontransferable.
(b) Conflicts with annuity contracts. The terms of any annuity
contract purchased and distributed by the Plan to a Participant or Spouse
shall comply with the requirements of this Plan.
SECTION 6.13 SPECIAL DISTRIBUTION RULES FOR 401(K) CONTRIBUTIONS,
QUALIFIED MATCHING CONTRIBUTIONS AND QUALIFIED NON-ELECTIVE CONTRIBUTIONS.
Employee Elective Deferrals, Qualified Matching Contributions and
Qualified Non-Elective Contributions, and income allocable to each are not
distributable to a Participant or his or her Beneficiary or Beneficiaries,
in accordance with such Participant's or Beneficiary's or Beneficiaries'
election, earlier than upon separation from service, death, or Disability
other than upon the occurrence of one or more of the following events:
(a) Termination of the Plan without the establishment of another
Defined Contribution Plan other than an employee stock ownership plan (as
defined in section 4975(e) or 409 of the Code), or a simplified employee
pension plan (as defined in section 408(k) of the Code).
(b) The transfer by the Employer, if a corporation, to an unrelated
corporation of substantially all of the assets (within the meaning of
section 409(d)(2) of the Code) used in a trade or business of such
corporation if the Employer continues to maintain this Plan after the
disposition, but only with respect to Employees who continue employment
with the corporation acquiring such assets.
(c) The transfer by the Employer, if a corporation, to an unrelated
entity of such corporation's interest in a subsidiary (within the meaning
of section 409(d)(3) of the Code) if the Employer continues to maintain
this Plan, but only with respect to Employees who continue employment with
such subsidiary.
(d) A distribution made pursuant to an event described in subsection
(a), (b), or (c) above shall be made in the form of a lump sum.
(e) The attainment of age 59 1/2.
(f) Distribution of Employee Elective Deferrals (and earnings thereon
accrued as of the end of the last Plan Year ending before July 1, 1989) may
be made to a Participant in the event of hardship pursuant to a showing of
immediate and heavy financial need, as described in Section 6.2 of the
Plan.
Notwithstanding any provision herein to the contrary, any distribution
made under this Section shall be subject to the provisions of Section 6.11.
SECTION 6.14 FORM OF DISTRIBUTION.
Distributions shall be made in cash only, except for the distribution
of an annuity contract.
SECTION 6.15 TRUSTEE-TO-TRUSTEE TRANSFERS.
Subject to Plan Administrator approval, at the direction of a
Participant, the Trustee of this Plan will make a transfer of such
Participant's applicable Account balance to the trustee of another plan
designated by the Participant, and qualified under section 401(a) of the
Code.
SECTION 6.16 NORMAL FORM OF BENEFIT
The Participant will receive a distribution in the form of lump sum,
as specified in Section 6.3, unless the Participant elects otherwise as
permitted in this Article.
SECTION 6.17 ROLLOVERS TO OTHER PLANS OR IRAS.
Effective with respect to any distribution made on or after January 1,
1993 and notwithstanding any provision of the Plan to the contrary that
would otherwise limit a Participant's election under this Section, a
Participant may elect, at the time and in the manner prescribed by the
Administrator, to have any portion of an eligible rollover distribution
paid, in a direct rollover, to an eligible retirement plan specified by the
Participant.
DEFINITIONS:
(a) Eligible rollover distribution. An eligible rollover
distribution is any distribution of all or any portion of the balance to
the credit of the Participant, except:
(1) any distribution that is one of a series of substantially
equal periodic payments (made not less frequently than
annually) made over the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies)
of the Participant and the Participant's designated
Beneficiary, or over a specified period of ten years or
more;
(2) any distribution to the extent such distribution is required
under section 401(a)(9) of the Code; and
(3) the portion of any distribution that is not includible in
gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer
securities).
(b) Eligible retirement plan. An eligible retirement plan is an
individual retirement account described in section 408(a) of the Code, an
individual retirement annuity described in section 408(b) of the Code, an
annuity plan described in section 403(a) of the Code, or a qualified trust
described in section 401(a) of the Code that accepts the distributee's
eligible rollover distribution. However, in the case of an eligible
rollover distribution to the Surviving Spouse, an eligible retirement plan
is an individual retirement account or individual retirement annuity.
(c) Direct rollover. A direct rollover is a payment by the Plan to
the eligible retirement plan specified by the Participant.
SECTION 6.18 INSTALLMENT PAYMENTS.
The frequency of the installment payments shall be payable over a term
not exceeding the life expectancy of the Participant, at the Participant's
election as follows:
(a) monthly,
(b) quarterly,
(c) annually.
ARTICLE VII - LOANS
SECTION 7.1 AVAILABILITY OF LOANS.
Loans shall be permitted under this Plan as established by the policy
of the Plan Administrator. Any such loan shall be subject to such
conditions and limitations as the Plan Administrator deems necessary for
administrative convenience and to preserve the tax-qualified status of the
Plan.
SECTION 7.2 AMOUNT OF LOANS.
No loan to any Participant or Beneficiary may be made to the extent
that such loan, when added to the outstanding balance of all other loans to
the Participant or Beneficiary, would exceed the lesser of (a) $50,000
reduced by the excess (if any) of the highest outstanding balance of loans
during the one-year period ending on the day before the loan is made, over
the outstanding balance of loans from the Plan on the date the loan is
made, or (b) one-half the present value of the nonforfeitable accrued
benefit of the Participant. For the purpose of the above limitation, all
loans from all plans of the Employer and other members of a group of
employers described in sections 414(b), 414(c), 414(m), and 414(o) of the
Code are aggregated. Furthermore, any loan shall by its terms require that
repayment (principal and interest) be amortized in level payments, not less
frequently than quarterly, over a period not extending beyond five years
from the date of the loan. An assignment or pledge of any portion of the
Participant's interest in the Plan and a loan, pledge, or assignment with
respect to any insurance contract purchased under the Plan, will be treated
as a loan under this paragraph.
SECTION 7.3 TERMS OF LOANS.
(a) Loans shall be made available to all Participants and
Beneficiaries on a reasonably equivalent basis.
(b) Loans shall not be made available to Highly Compensated Employees
(as defined in section 414(q) of the Code) in an amount greater than the
amount made available to other Employees.
(c) Loans must be adequately secured using not more than 50 percent
of the Participant's Vested Account balance, and bear a reasonable interest
rate.
(d) No Participant loan shall exceed the present value of the
Participant's Vested accrued benefit. A Participant loan for less than
$1,000 dollars is not permitted.
(e) In the event of default, foreclosure on the note and attachment
of security will not occur until a distributable event occurs in the Plan.
(f) No loans will be made to any shareholder-employee. For purposes
of this requirement, a shareholder-employee means an Employee or officer of
an electing small business (Subchapter S) corporation who owns (or is
considered as owning within the meaning of section 318(a)(1) of the Code)
on any day during the taxable year of such corporation, more than 5 percent
of the outstanding stock of the corporation.
(g) A Participant must obtain the consent of his or her Spouse, if
any, to the use of his Account balance as security for the loan. Spousal
consent shall be obtained no earlier than the beginning of the 90-day
period that ends on the date on which the loan is to be so secured. The
consent must be in writing, must acknowledge the effect of the loan, and
must be witnessed by a Plan representative or notary public. Such consent
shall thereafter be binding with respect to the consenting Spouse or any
subsequent Spouse with respect to that loan. A new consent shall be
required if the Account balance is used for renegotiating, extension,
renewal, or other revision of the loan.
If valid spousal consent has been obtained, then, notwithstanding any
other provision of this Plan, the portion of the Participant's Vested
Account balance used as a security interest held by the Plan by reason of a
loan outstanding to the Participant shall be taken into account for
purposes of determining the amount of the Account balance payable at the
time of death or distribution, but only if the reduction is used as
repayment of the loan. If less than 100 percent of the Participant's
Vested Account balance (determined without regard to the preceding
sentence) is payable to the Surviving Spouse, then the Account balance
shall be adjusted by first reducing the Vested Account balance by the
amount of the security used as repayment of the loan, and then determining
the benefit payable to the Surviving Spouse.
(h) Loans granted or renewed on or after the last day of the first
Plan Year beginning after December 31, 1988 shall be made pursuant to a
written Participant loan program incorporated herein by reference which
will include the following:
(1) the basis on which loans will be approved or denied;
(2) procedures for applying for the loans;
(3) person or positions authorized to administer the Participant
loan program;
(4) limitations, if any, on the types and amounts of loans
offered;
(5) procedures under the program for determining the rates 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.
(i) Loans are available from the following accounts and will be
withdrawn from the Participant's accounts in the following hierarchy:
(A) After-Tax Employee Contribution Account
(B) Employee Deferral Account
(C) Employer Matching Contribution Account
(D) Rollover Account
(E) Qualified Matching Contribution or Qualified Non-Elective
Contribution Accounts
(j) Loans will be taken from the investment funds on a pro rata
basis.
ARTICLE VIII - PLAN ADMINISTRATION
SECTION 8.1 DUTIES OF THE EMPLOYER.
The Employer shall have overall responsibility for selecting and
appointing the Trustee, and for the establishment, amendment, termination,
administration, and operation of the Plan. The Employer shall discharge
this responsibility by appointing a Committee, to which shall be delegated
overall responsibility for administering and operating the Plan.
Upon written notice to the Trustee and the Committee, the Employer may
appoint one or more investment managers as described in ERISA section
3(38), which shall have the power to manage, acquire, or dispose of all or
part of the Trust assets in accordance with the provisions of the Plan and
Trust agreement. The Committee and investment manager shall execute a
written agreement specifying the Trust assets to be managed and the
investment manager's duties and responsibilities with respect to such
assets, and in such agreement the investment manager shall acknowledge that
it is a fiduciary with respect to the Plan and Trust. The Committee may
authorize the investment manager to give written instructions to the
Trustee with respect to acquiring, managing, and disposing of assets
managed by the investment manager, and the Trustee shall follow such
instructions and shall be under no duty to make an independent
determination regarding whether the instruction is proper. The fees and
expenses of an investment manager shall be paid by the Trust except to the
extent paid by the Employer.
SECTION 8.2 THE COMMITTEE.
(a) The Committee shall be the "named fiduciary" (as defined in
section 402(a)(2) of ERISA), the "Administrator" (as defined in section
3(16) of ERISA and section 414(g) of the Code), and an agent for service of
process of the Plan.
(b) The Committee shall consist of officers or other Employees of the
Employer, or any other person(s) who shall be appointed by the Employer.
The members of the Committee shall serve at the direction of the Employer.
In the absence of such appointment, the Employer shall serve as the
Committee. Any member of the Committee may resign by delivering his
written resignation to the Employer and to the Committee, which shall
become effective upon the date specified therein. In the event of a
vacancy on the Committee, the remaining members shall constitute the
Committee with full power to act until the Employer appoints a new
Committee member. The Employer may from time to time remove any Committee
member with or without cause and appoint a successor thereto.
SECTION 8.3 APPOINTMENT OF ADVISOR.
The Committee may employ any such person or entity as it deems
necessary to assist in the Administration of the Plan and provide services
including but not limited to tax advice, amendment, termination and
operation of the Plan, and advice concerning reports filed with the
Internal Revenue Service. Any such advisor shall not be the Administrator
of the Plan (as defined in section 3(16) of ERISA and section 414(g) of the
Code).
The Committee shall have the authority and discretion to engage an
Administrative Delegate who shall perform, without discretionary authority
or control, administrative functions within the framework of policies,
interpretations, rules, practices and procedures made by the Committee or
other Plan fiduciary. Any action made or taken by the Administrative
Delegate may be appealed by an affected Participant to the Committee in
accordance with the claims review procedures provided in Section 8.6. Any
decisions which call for interpretations of Plan provisions not previously
made by the Committee shall be made only by the Committee. The
Administrative Delegate shall not be considered a fiduciary with respect to
the services it provides.
SECTION 8.4 POWERS AND DUTIES OF THE COMMITTEE.
(a) The Committee, on behalf of the Participants and Beneficiaries of
the Plan, shall enforce the Plan and Trust in accordance with the terms
thereof, and shall have all powers necessary to carry out such provisions.
The Committee shall interpret the Plan and Trust and shall determine all
questions arising in the administration and application of the Plan and
Trust. Any such interpretation or determination by the Committee shall be
conclusive and binding on all persons.
The Committee shall establish rules and regulations necessary for the
proper conduct and administration of the Plan, and from time to time may
change or amend these rules and regulations. The Committee shall also have
the power to authorize all disbursements from the Trust by the Trustee in
accordance with the Plan's terms.
(b) At the direction of the Committee, distributions to minors or
persons declared incompetent may be made by the Trustee directly to such
persons or to the legal guardians or conservators of such persons. The
Employer, the Committee, and the Trustee shall not be required to see to
the proper application of such distributions made to any of such persons,
but his or their receipt thereof shall be a full discharge of the Employer,
the Committee, and the Trustee of any obligation under the Plan or the
Trust.
SECTION 8.5 ORGANIZATION AND OPERATION.
(a) The Committee shall act by a majority of its members then in
office, and such action may be taken either by a vote at a meeting or by
written consent without a meeting. The Committee may authorize any one or
more of its members to execute any document or documents on behalf of the
Committee, in which event the Committee shall notify the Employer, in
writing, of such authorization and the name or names of its member or
members so designated. The Employer thereafter shall accept and rely on
any documents executed by said member of the Committee or members as
representing action by the Committee until the Committee shall file with
the Employer a written revocation of such designation.
(b) The Committee may adopt such bylaws and regulations as it deems
desirable for the conduct of its affairs and may employ and appropriately
compensate such accountants, counsel, specialists, actuaries, and other
persons as it deems necessary or desirable in connection with the
administration and maintenance of the Plan. The Committee shall have the
authority to control and manage the operation and administration of the
Plan.
SECTION 8.6 CLAIMS PROCEDURE.
(a) A claim for benefits under the Trust shall be filed on an
application form supplied by the Committee. Written notice of the
disposition of the claim shall be furnished to the claimant within 90 days
after an application form is received by the Committee, unless special
circumstances (as determined by the Committee) require an extension for
processing the claim. If such an extension is required, the Committee
shall render a decision as soon as possible subsequent to the 90-day
period, but such decision shall not be rendered later than 180 days after
the application form is received by the Committee. Written notice of such
extension shall be furnished to the claimant prior to the commencement of
the extension indicating the special circumstances requiring such extension
and the date by which the Committee expects to render the decision on the
claim. In the event the claim is denied, the Committee shall set forth in
writing the reasons for the denial and shall cite pertinent provisions of
the Plan and Trust upon which the decision is based. In addition, the
Committee shall provide a description of any additional material or
information necessary for the claimant to perfect the claim, an explanation
of why such information is necessary, and appropriate information as to the
steps to be taken if the Participant or Beneficiary wish to submit such
claim for review as provided in (b) below.
(b) A Participant or Beneficiary whose claim described in (a) above
has been denied in whole or in part shall be entitled to the following
rights if exercised within 60 days after written denial of a claim is
received:
(1) to request a review of the claim upon written application to
the Committee;
(2) to review documents associated with the claim; and
(3) to submit issues and comments in writing to the Committee.
(c) If a Participant or a Beneficiary requests a review of the claim
under (b) above, the Committee shall conduct a full review
(including a formal hearing if desired) of such request, and a
decision on such request shall be made within 60 days after the
Committee has received the written request for review from the
Participant or the Beneficiary. Special circumstances (such as a
need for full hearing on request) can allow the Committee to
extend the decision on such request, but the decision shall be
rendered no later than 120 days after receipt of the request for
review. Written notice of such an extension shall be furnished
to the Participant or the Beneficiary prior to the commencement
of the extension. The decision of the Committee on review shall
be set forth in writing and shall include specific reasons for
the decision as well as specific references to the pertinent
provisions of the Plan or Trust on which the decision is based.
SECTION 8.7 RECORDS AND REPORTS.
(a) The Committee shall be entitled to rely upon certificates,
reports, and opinions provided by an accountant, tax or pension advisor,
actuary or legal counsel employed by the Employer or Committee. The
Committee shall keep a record of all its proceedings and acts, and shall
keep all such books of account, records, and other data as may be necessary
for the proper administration of the Plan. The regularly kept records of
the Committee, the Employer, and the Trustee shall be conclusive evidence
of a Participant's service, his Compensation, his age, his marital status,
his status as an Employee, and all other matters contained therein and
relevant to this Plan; provided, however, that a Participant may request a
correction in the record of his age at any time prior to his retirement and
such correction shall be made if within 90 days after such request he
furnishes a birth certificate, baptismal certificate, or other documentary
proof of age satisfactory to the Committee in support of this correction.
(1) Each Participant and each Participant's designated
Beneficiary must notify the Committee in writing of his mailing address and
each change thereof. Any communication, statement or notice addressed to a
Participant or Beneficiary at the last mailing address filed with the
Committee, or if no address is filed with the Committee, the last mailing
address as shown on he Employer's records, will be binding on the
Participant and his Beneficiary for all purposes of the Plan. Neither the
Committee nor the Trustee shall be required to search for or locate a
Participant or a Beneficiary.
SECTION 8.8 LIABILITY.
(a) A member of the Committee shall not be liable for any act, or
failure to act, of any other member of the Committee, except to the extent
that such member:
(1) Knowingly participates in, or undertakes to conceal, an act
or omission of another Committee member, knowing that such
act or omission is a breach of fiduciary duty to the Plan;
(2) Fails to comply with the specific responsibilities given him
as a member of the Committee, and such failure enables
another member of the Committee to commit a breach of
fiduciary duty to the Plan; or
(3) Has knowledge of a breach of fiduciary duty to the Plan by
another member of the Committee, unless such member makes
reasonable effort under the circumstances to remedy such
breach.
(b) Each member of the Committee shall be liable with respect to his
own acts of willful misconduct or gross negligence concerning the Plan.
The Employer may indemnify the Committee or each of its members for part or
all expenses, costs, or liabilities arising out of the performance of
duties required by the terms of the Plan or Trust, except for those
expenses, costs, or liabilities arising out of a member's willful
misconduct or gross negligence.
SECTION 8.9 RELIANCE AND STATEMENTS.
The Committee, in any of its dealings with Participants hereunder, may
conclusively rely on any written statement, representation, or documents
made or provided by such Participants.
SECTION 8.10 REMUNERATION AND BONDING.
(a) Unless otherwise determined by the Committee, the members of the
Committee shall serve without remuneration for services to the Plan and
Trust. However, all expenses of the Committee shall be paid by the Trust
except to the extent paid by the Employer. Such expenses shall include any
expenses incidental to the functioning of the Committee, including but not
limited to fees of accountants, legal counsel, and other specialists, or
any other costs entailed in administering the Plan.
(b) Title I of ERISA requires certain persons with discretion over
Plan assets to be bonded. Except as required by ERISA or other federal law,
the members of the Committee shall serve without bond.
SECTION 8.11 COMMITTEE DECISIONS FINAL.
Any decision of the Committee with respect to matters within its
jurisdiction shall be final, binding, and conclusive upon the Employer and
the Trustee and upon each Employee, Participant, former Participant,
Beneficiary, and every other person or party interested or concerned.
SECTION 8.12 PARTICIPANT-DIRECTED INVESTMENTS.
The Committee authorizes the Trustee to accept investment direction
from Participants. The Trustee shall invest in the Investment Funds in
accordance with investment directions given by the Participants and
Beneficiaries for whose accounts such assets are held, to the extent
authorized. All such directions by the Participants or Beneficiaries to
the Trustee will be made by electronic media or in such other manner as is
acceptable to the Trustee. Participants and Beneficiaries will be deemed
responsible for purposes of such investment selection and allocation.
Where the Committee, a Participant, a Beneficiary or an Investment
Manager other than the Trustee has the power and authority to direct the
investment of assets of the Trust Fund, the Trustee does not have any duty
to question any direction, to review any securities or other property, or
to make any suggestions in connection therewith. The Trustee will promptly
comply with any direction given by the Committee, a Participant, a
Beneficiary or Investment Manager. The Trustee will neither be liable for
failing to invest any assets of the Trust Fund under the management and
control of the Committee, a Participant, a Beneficiary or an Investment
Manager in the absence of investment directions regarding such assets. The
Trustee and the Committee shall be indemnified by the Participant from and
against any personal liability to which the Trust and the Committee may be
subject due to carrying out an elective investment directed by the
Participant or for failure to act in absence of restrictions from the
Participant.
ARTICLE IX - TRUST AGREEMENT
SECTION 9.1 ESTABLISHMENT OF TRUST.
The Employer and the Trustee have entered into a trust agreement which
is set forth in a separate document and is incorporated herein. The trust
agreement establishes a Trust consisting of such sums of money and other
property as may from time to time be contributed or transferred to the
Trustee under the terms of the Plan, along with any property to which the
Trust Fund may from time to time be converted, and which provides for the
investment of Plan assets and the operation of the Trust. The trust
agreement, as amended from time to time, shall be deemed part of the Plan,
and all rights and benefits provided to persons under the Plan shall be
subject to the terms of the trust agreement.
ARTICLE X - AMENDMENT, TERMINATION AND MERGER
SECTION 10.1 AMENDMENT.
(a) The Employer shall have the right to amend the Plan and Trust at
any time to the extent permitted under the Code and ERISA.
(b) No amendment affecting the rights or duties of the Trustee shall
be effective without the written consent of the Trustees.
(c) No amendment to the Plan shall be effective to the extent that it
has the effect of decreasing a Participant's accrued benefit.
Notwithstanding the preceding sentence, a Participant's Account balance may
be reduced to the extent permitted under section 412(c)(8) of the Code.
For purposes of this paragraph, a Plan amendment which has the effect of
decreasing a Participant's Account balance or eliminating an optional form
of benefit, with respect to benefits attributable to service before the
amendment, shall be treated as reducing an accrued benefit.
SECTION 10.2 TERMINATION.
(a) The Employer intends to continue the Plan indefinitely and to
fund the Plan as required by law and its terms. However, the Employer
shall have the right to terminate the Plan at any time.
(b) If the Plan is totally or partially terminated, or in the event
of a complete discontinuation of contributions under the Plan, a
Participant whose participation in the Plan is terminated as a result of
such total or partial termination or who is affected by the complete
discontinuation of contributions to the Plan shall be 100 percent Vested
with respect to his Accounts, determined as of the date of such total or
partial termination.
(c) Upon termination of the Plan, the Employer shall allocate the
assets of the Plan, after the payment of or set aside for the payment of
all expenses, among the Participants and their Beneficiaries in accordance
with the Code and ERISA.
(d) Upon termination of the Plan, and after all liabilities of the
Plan to Participants and Beneficiaries have been satisfied, any residual
assets of the Plan which are attributable to a contribution in excess of
Code section 415 limits shall be distributed to the Employer, provided such
distribution does not contravene any provision of the law or the Plan.
(e) The allocation of benefits under this Article shall be
accomplished either through the continuance of the Trust, the creation of a
new Trust, the payment of the benefits to be provided to the Participants
or Beneficiaries, or the purchase of annuity contracts, as determined by
the Employer.
SECTION 10.3 MERGER, CONSOLIDATION OR TRANSFER.
The Employer shall have the right at any time to merge or consolidate
the Plan with any other plan, or transfer the assets or liabilities of the
Trust to any other plan provided each Participant would (if the Plan were
then terminated) receive a benefit immediately after such merger,
consolidation or transfer which would equal or exceed the benefit the
Participant would have been entitled to immediately before such merger,
consolidation or transfer (if the Plan were then terminated).
ARTICLE XI - TOP-HEAVY PROVISIONS
SECTION 11.1 APPLICABILITY.
The provisions of this Article shall not apply to the Plan with
respect to any Plan Year in which the Plan is not Top-Heavy. If the Plan
is or becomes Top-Heavy in any Plan Year, the provisions of this Article
will supersede any conflicting provisions in the Plan.
SECTION 11.2 DEFINITIONS.
(a) Key Employee: Any Employee or former Employee (and the
Beneficiaries of such Employee) who at any time during the "Determination
Period" was (1) an officer of the Employer if such individual's Annual
Compensation exceeds 50 percent of the dollar limitation under section
415(b)(1)(A) of the Code, (2) an owner (or considered an owner under
section 318 of the Code) of one of the ten largest interests in the
Employer if such individual's Annual Compensation exceeds 100 percent of
the dollar limitation under section 415(c)(1)(A) of the Code, (3) a more-
than-5-percent owner of the Employer, or (4) a more-than-1-percent owner of
the Employer who has annual Compensation of more than $150,000. Annual
Compensation means compensation as defined in section 415(c)(3) of the
Code, but including amounts contributed by the Employer pursuant to a
salary reduction agreement which are excludable from the Employee's gross
income under section 125, section 402(e)(3), section 402(h) or section
403(b) of the Code. The "Determination Period" is the Plan Year containing
the Determination Date and the four (4) preceding Plan Years.
The determination of who is a Key Employee will be made in accordance
with section 416(i)(1) of the Code and the Regulations thereunder.
(b) Top-Heavy Plan: For any Plan Year beginning after December 31,
1983, this Plan is Top-Heavy if any of the following conditions exists:
(1) If the Top-Heavy Ratio for this Plan exceeds 60 percent and
this Plan is not part of any Required Aggregation Group or
Permissive Aggregation Group of plans.
(2) If this Plan is a part of a Required Aggregation Group of
plans, but not part of a Permissive Aggregation Group of
plans and the Top-Heavy Ratio for the Permissive Aggregation
Group exceeds 60 percent.
(3) If this Plan is a part of a Required Aggregation Group and
part of a Permissive Aggregation Group of plans and the Top-
Heavy Ratio for the Permissive Aggregation Group exceeds 60
percent.
(c) Super-Top-Heavy Plan: A plan is Super-Top-Heavy if such a plan
would be Top-Heavy if "90 percent" were substituted for "60 percent" each
place it appears in (b) above.
(d) Top-Heavy Ratio:
(1) If the Employer maintains one or more Defined Contribution
Plans (including any simplified employee pension plan) and
the Employer has not maintained any Defined Benefit Plan
which during the 5-year period ending on the Determination
Date(s) has or has had accrued benefits, the Top-Heavy Ratio
for this Plan alone or for the required or Permissive
Aggregation Group, as appropriate, is a fraction, the
numerator of which is the sum of the Account balances of all
Key Employees as of Determination Date(s) (including any
part of any Account balance distributed in the 5-year period
ending on the Determination Date(s)), and the denominator of
which is the sum of all Account balances (including any part
of any Account balance distributed in the 5-year period
ending on the Determination Date(s)), both computed in
accordance with section 416 of the Code and the Regulations
thereunder. Both the numerator and denominator of the Top-
Heavy Ratio are increased to reflect any contribution not
actually made as of the Determination Date, but which is
required to be taken into account on that date under section
416 of the Code and the Regulations thereunder.
(2) If the Employer maintains one or more Defined Contribution
Plans (including any simplified employee pension plan) and
the Employer maintains or has maintained one or more Defined
Benefit Plans which during the 5-year period ending on the
Determination Date(s) has or has had any accrued benefits,
the Top-Heavy Ratio for any required or Permissive
Aggregation Group as appropriate, is a fraction, the
numerator of which is the sum of account balances under the
aggregated Defined Contribution Plan or Plans for all Key
Employees, determined in accordance with (1) above, and the
Present Value of accrued benefits under the aggregated
Defined Benefit Plan or Plans for all Key Employees as of
the Determination Date(s), and the denominator of which is
the sum of the account balances under the aggregated Defined
Contribution Plan or Plans for all Participants, determined
in accordance with (1) above, and the Present Value of
accrued benefits under the Defined Benefit Plan or Plans for
all Participants as of the Determination Date(s), are
determined in accordance with section 416 of the Code and
the Regulations thereunder. The accrued benefits under a
Defined Benefit Plan in both the numerator and denominator
of the Top-Heavy Ratio are increased for any distribution of
an accrued benefit made in the five-year period ending on
the Determination Date.
(3) For purposes of (1) and (2) above, the value of account
balances and the Present Value of accrued benefits will be
determined as of the most recent Valuation Date that falls
within or ends with the 12-month period ending on the
Determination Date, except as provided in section 416 of the
Code and the Regulations thereunder for the first and second
plan years of a Defined Benefit Plan. The account balances
and accrued benefits of a Participant (a) who is not a Key
Employee but who was a Key Employee in a prior year, or (b)
who has not been credited with at least one Hour of Service
with any Employer maintaining the Plan at any time during
the 5-year period ending on the Determination Date will be
disregarded. The calculation of the Top-Heavy Ratio, and
the extent to which distributions, rollovers and transfers
are taken into account will be made in accordance with
section 416 of the Code and the Regulations thereunder.
Employee contributions previously deductible under section
219 of the Code will not be taken into account for purposes
of computing the Top-Heavy Ratio. When aggregating plans,
the value of account balances and accrued benefits will be
calculated with reference to the Determination Dates that
fall within the same calendar year.
The accrued benefit of a Participant other than a Key Employee shall
be determined under either (a) the method, if any, that uniformly applies
for accrual purposes under all Defined Benefit Plans maintained by the
Employer, or (b) if there is no such method, as if such benefit accrued not
more rapidly than the slowest accrual rate permitted under the fractional
rule of section 411(b)(1)(C) of the Code.
(e) Permissive Aggregation Group: The Required Aggregation Group of
plans plus any other plan or plans of the Employer which, when considered
as a group with the Required Aggregation Group, would continue to satisfy
the requirements of sections 401(a)(4) and 410 of the Code.
(f) Required Aggregation Group: (1) Each qualified plan of the
Employer in which at least one Key Employee participates or participated at
any time during the Determination Period (regardless of whether the plan
has terminated), and (2) any other qualified plan of the Employer which
enables a plan described in (1) to meet the requirements of sections
401(a)(4) or 410 of the Code.
(g) Determination Date: For any Plan Year subsequent to the first
Plan Year, the last day of the preceding Plan Year. For the first Plan
Year of the Plan, the last day of that year.
(h) Valuation Date: The date as defined in Article I of the Plan as
of which Account balances or accrued benefits are valued for purposes of
calculating the Top-Heavy Ratio.
(i) Present Value: Present Value shall be determined using the
interest and mortality rates specified in the applicable
plans. Notwithstanding the foregoing, all determinations
shall be made in accordance with section 416 of the Code and
the Regulations promulgated thereunder.
SECTION 11.3 MINIMUM ALLOCATION.
(a) Except as otherwise provided in (c) and (d) below, Employer
contributions, not including Employee Elective Deferrals, allocated on
behalf of any Participant who is not a Key Employee shall not be less than
the lesser of three percent (four percent if the Plan is super-Top-Heavy)
of such Participant's Compensation or, in the case where the Employer has
no Defined Benefit Plan which designates this Plan to satisfy section 401
of the Code, the largest percentage of Employer contributions, as a
percentage of the first $200,000 of the Key Employee's Compensation,
allocated on behalf of any Key Employee for that year. The minimum
allocation is determined without regard to any Social Security
contribution. This minimum allocation shall be made even though, under the
Plan provisions, the Participant would not otherwise be entitled to receive
an allocation, or would have received a lesser allocation for the year
because of (1) the Participant's failure to complete 1,000 hours of service
(or any equivalent provided in the Plan), or (2) the Participant's failure
to make mandatory Employee contributions to the Plan or (3) Compensation
less than a stated amount.
(b) For purposes of computing the minimum allocation, Compensation
means Compensation as defined in Article I of the Plan.
(c) The provision in (a) above shall not apply to any Participant who
was not employed by the Employer on the last day of the Plan Year.
(d) The provision in (a) above shall not apply to any Participant to
the extent the Participant is covered under any other plan or plans of the
Employer and the minimum allocation or benefit requirement applicable to
Top-Heavy Plans will be met in the other plan or plans.
SECTION 11.4 NONFORFEITABILITY OF MINIMUM ALLOCATION.
The minimum allocation required (to the extent required to be
nonforfeitable under section 416(b) of the Code) may not be forfeited under
section 411(a)(3)(D) of the Code.
SECTION 11.5 ALLOCATION LIMITATIONS.
In determining the Defined Contribution Fraction under section
415(e)(3)(B) of the Code and pursuant to Section 5.4 of the Plan "100
percent" shall be substituted for "125 percent" unless the minimum
allocation percentage under section 416(c)(2)(A) of the Code and Section
11.3(a) of the Plan is increased from "three percent" to "four percent" and
the Plan would not be a Top-Heavy Plan if "90 percent" were substituted for
"60 percent" each place it appears in Section 11.2(b) of the Plan.
SECTION 11.6 MINIMUM VESTING SCHEDULES.
For any Plan Year during which the Plan is Top-Heavy, the vesting
schedule(s) set forth in Article V of the Plan will be followed, as such
schedule(s) already satisfy the requirements of section 416 of the Code.
ARTICLE XII - GENERAL PROVISIONS
SECTION 12.1 GOVERNING LAW.
(a) The Plan is established under, and its validity, construction and
effect shall be governed by, the laws of the State of Indiana.
(b) The parties to the Trust intend that the Trust be exempt from
taxation under section 501(a) of the Code, and any ambiguities in its
construction shall be resolved in favor of an interpretation which will
effect such intention.
SECTION 12.2 POWER TO ENFORCE.
The Committee shall have authority to enforce the Plan on behalf of
any and all persons having or claiming any interest in the Trust or Plan.
SECTION 12.3 ALIENATION OF BENEFITS.
Benefits under the Plan shall not be subject 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, nor shall any such benefits be
in any way liable for or subject to the debts, contracts, liabilities,
engagements or torts of any person entitled to such benefits. This Section
shall also apply to the creation, assignment or recognition of a right to
any benefit payable with respect to a Participant pursuant to a domestic
relations order, unless such order is determined to be a qualified domestic
relations order as defined in section 414(p) of the Code, or any domestic
relations order entered before January 1, 1985.
SECTION 12.4 NOT AN EMPLOYMENT CONTRACT.
The Plan is not and shall not be deemed to constitute a contract
between the Employer and any Employee, or to be a consideration for, or an
inducement to, or a condition of, the employment of any Employee. Nothing
contained in the Plan shall give or be deemed to give an Employee the right
to remain in the employment of the Employer or to interfere with the right
to be retained in the employ of the Employer, any legal or equitable right
against the Employer, or to interfere with the right of the Employer to
discharge or retire any Employee at any time.
SECTION 12.5 DISCRETIONARY ACTS.
Any discretionary acts to be undertaken under the Plan with respect to
the classification of Employees, contributions, or benefits shall be
nondiscriminatory and uniform in nature and applicable to all persons
similarly situated.
SECTION 12.6 INTERPRETATION.
(a) Savings Clause. If any provision or provisions of the Plan shall
for any reason be invalid or unenforceable, the remaining provisions of the
Plan shall be carried into effect, unless the effect thereof would be to
materially alter or defeat the purposes of the Plan.
(b) Gender. Wherever appropriate, pronouns of either gender shall be
deemed synonymous as shall singular and plural pronouns.
(c) Headings. Headings and titles of sections and subsections within
the Plan document are inserted solely for convenience of reference. They
constitute no part of the Plan itself and shall not be considered in the
construction of the Plan.
ARTICLE XIII - SIGNATURE PAGE
IN WITNESS WHEREOF, this Plan has been restated the day and year
written below.
Signed, sealed, and delivered on this ____ day of _______________,
1997, in the presence of:
MERIDIAN INSURANCE GROUP, INC.
By:
EMPLOYER
EMPLOYER (Print Name)
WITNESS AS TO EMPLOYER
By:
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the Registration
Statement on Form S-8; in Registration Statement No. 33-11413 on Form S-1
as amended by Post-Effective Amendment No. 1 effective March 19, 1987; and
in Registration Statement No. 33-58406 on Form S-2 effective April 27, 1993
of Meridian Insurance Group, Inc. of our report, dated February 26, 1997,
on our audits of the consolidated financial statements and financial
statement schedules of Meridian Insurance Group, Inc. as of December 31,
1996 and 1995 and for each of the three years in the period ended December
31, 1996, which report is included in the Annual Report on Form 10-K.
Coopers & Lybrand L.L.P.
Indianapolis, Indiana
December 18, 1997
