<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 13, 1998
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
BRUNSWICK TECHNOLOGIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MAINE 01-0402052
- ------------------------------- ------------------------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
43 BIBBER PARKWAY, BRUNSWICK, MAINE 04011
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
BRUNSWICK TECHNOLOGIES, INC.
401(k) SAVINGS & RETIREMENT PLAN
(FULL TITLE OF THE PLAN)
MARTIN S. GRIMNES
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
BRUNSWICK TECHNOLOGIES, INC.
43 BIBBER PARKWAY
BRUNSWICK, MAINE 04011
(NAME AND ADDRESS OF AGENT FOR SERVICE)
(207) 729-7792
(TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
MARIANNE GILLERAN, ESQ.
GADSBY & HANNAH LLP
225 FRANKLIN STREET
BOSTON, MASSACHUSETTS 02110
(617) 345-7000
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
Title of Proposed Proposed
Securities to Amount to be Maximum Maximum Amount of
be Registered(2) Offering Price Aggregate Registration
Registered(1) Per Share(3) Offering Fee
Price(3)
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 100,000 $14.13 $1,413,000 $416.84
$0.0001 par
value per share
- -----------------------------------------------------------------------------------------
</TABLE>
(1) 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.
(2) The amount of shares registered hereunder is based upon an estimate of the
number of shares of Common Stock to be issued pursuant to the employee
benefit plan described herein. In addition, pursuant to Rule 416, there
are also being registered such additional shares of Common Stock as may
become issuable pursuant to stock splits, stock dividends or similar
transactions.
(3) Estimated solely for the purpose of computing the registration fee,
pursuant to Rule 457(h), on the basis of the average of the high and low
prices of the Common Stock, $14.25 and $14.00, respectively, as reported
on the Nasdaq National Market on March 10, 1998.
<PAGE> 3
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document(s) containing the information specified in Part I of Form S-8
are not required to be filed with the Securities and Exchange Commission (the
"Commission") as part of this registration statement on Form S-8. Such documents
and the documents incorporated by reference in this registration statement on
Form S-8 pursuant to Item 3 of Part II hereof, as described below, taken
together, constitute a prospectus that meets the requirements of Section 10(a)
of the Securities Act of 1933, as amended (the "Securities Act").
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents are incorporated by reference in this registration
statement:
(a) The Annual Report on Form 10-K for the fiscal year ended December 31,
1996 ("Fiscal 1996") filed by Brunswick Technologies, Inc. (the "Company")
pursuant to Section 13(a) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act");
(b) All other reports filed by the Company and by the Company's 401(k)
Savings & Retirement Plan (the "Plan") pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of Fiscal 1996; and
(c) The description of the Company's securities in the Company's Form 8-A
Registration Statement filed with the Commission on January 31, 1997, including
any amendment or report filed for the purpose of updating such description.
All documents subsequently filed by the Company or the Plan pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all securities offered in this
registration statement have been sold, or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
registration statement and to be a part hereof from the date of the filing of
such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
Company pursuant to the following provisions, or otherwise, the Company 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.
<PAGE> 4
Subsection (1) of Section 719 of the Maine Business Corporation Act
empowers a corporation to indemnify, or if so provided in the bylaws, shall in
all cases indemnify, any person 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, by reason of the fact
that that person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, trustee, partner, fiduciary, employee or agent of another
corporation, partnership, joint venture, trust, pension or other employee
benefit plan or other enterprise, against expenses, including attorneys' fees,
judgments, fines and amounts paid in settlement actually and reasonably incurred
by that person in connection with such action, suit or proceeding; provided that
no indemnification may be provided for any person with respect to any matter as
to which that person shall have been finally adjudicated: (a) not to have acted
honestly or in the reasonable belief that that person's action was in or not
opposed to the best interest of the corporation or its shareholders or, in the
case of a person serving as a fiduciary of an employee benefit plan or trust, in
or not opposed to the best interest of the plan or trust, or its participants or
beneficiaries; or (b) with respect to any criminal action or proceeding, to have
had reasonable cause to believe that that person's conduct was unlawful.
Furthermore, subsection (1) of Section 719 provides that the termination
of any action, suit or proceeding by judgment, order or conviction adverse to
that person, or by settlement or plea of nolo contendere or its equivalent,
shall not of itself create a presumption that that person did not act honestly
or in the reasonable belief that that person's action was in or not opposed to
the best interests of the corporation or its shareholders or, in the case of a
person serving as a fiduciary of an employee benefit plan or trust, in or not
opposed to the best interests of that plan or trust or its participants or
beneficiaries and, with respect to any criminal action or proceeding, had
reasonable cause to believe that that person's conduct was unlawful.
Subsection (1-A) of Section 719 provides that notwithstanding any
provision of subsection (1), a corporation shall not have the power to indemnify
any person with respect to any claim, issue or matter asserted by or in the
right of the corporation as to which that person is finally adjudicated to be
liable to the corporation unless the court in which the action, suit or
proceeding was brought shall determine that, in view of all the circumstances of
the case, that person is fairly and reasonably entitled to indemnity for such
amounts as the court shall deem reasonable.
Subsection (3) of Section 719 provides that any indemnification under
subsection (1), unless ordered by a court or required by the bylaws, shall be
made by the corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee or agent
is proper in the circumstances and in the best interests of the corporation.
That determination shall be made by the board of directors by a majority vote of
a quorum consisting of directors who were not parties to that action, suit or
proceeding, or if such a quorum is not obtainable, or even if obtainable, if a
quorum of disinterested directors so directs, by independent legal counsel in a
written opinion, or by the shareholders. Such a determination once made may not
be revoked and, upon the making of that determination, the director, officer,
employee or agent may enforce the indemnification against the corporation by a
separate action notwithstanding any attempted or actual subsequent action by the
board of directors.
Finally, subsection (6) of Section 719 provides that a corporation shall
have power to purchase and maintain insurance on behalf of any person who is or
was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, trustee,
partner, fiduciary, employee or agent of another corporation, partnership, joint
venture, trust, pension or other employee benefit plan or other enterprise
against any liability asserted against that person and incurred by
<PAGE> 5
that person in any such capacity, or arising out of that person's status as
such, whether or not the corporation would have the power to indemnify that
person against such liability under this section.
Section 14 of Article Third of the Third Restated Bylaws of the Company
provides for such indemnification to the fullest extent that the Maine Business
Corporation Act permits, as more fully described in the five paragraphs
immediately preceding above.
The Company has purchased directors and officers liability insurance
covering liabilities incurred by its officers and directors in connection with
the performance of their duties from National Union Fire Insurance Company of
Pittsburgh, PA., in the amount of $5,000,000.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The following exhibits are filed as part of this registration statement:
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
4a Brunswick Technologies, Inc. 401(k) Savings & Retirement Plan,
restated as of July 7, 1997.
4b Amended and Restated Articles of Incorporation (filed as
Exhibit No. 3.1 to the Company's Form S-1 Registration
Statement, Registration No. 333-10721, and hereby incorporated
by reference)
4c Third Restated Bylaws (filed as Exhibit No. 3.2 to the
Company's Form S-1 Registration Statement, Registration No.
333-10721, and hereby incorporated by reference)
15 Letter re: Unaudited Interim Financial Information
23b Consent of Coopers & Lybrand L.L.P.
23c Consent of KPMG Peat Marwick LLP
24 Power of Attorney
</TABLE>
The registrant will submit or has submitted the Plan and any amendment
thereto to the Internal Revenue Service ("IRS") in a timely manner, and has made
or will make all changes required by the IRS in order to qualify the Plan.
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;
(i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment
<PAGE> 6
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of a prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in the
effective registration statement; and
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 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 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 Act and will
be governed by the final adjudication of such issue.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 7
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 Town of Brunswick, State of Maine, on March 13, 1998.
BRUNSWICK TECHNOLOGIES, INC.
By:/s/ Martin S.Grimnes
-------------------------------------
Martin S. Grimnes,
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Martin S. Grimnes Chairman, Chief Executive March 13, 1998
- ----------------------------- Officer and Director
Martin S. Grimnes (Principal Executive Officer)
/s/ David M. Coit Director March 13, 1998
- -----------------------------
David M. Coit
/s/ Max G. Pitcher Director March 13, 1998
- -----------------------------
Max G. Pitcher
/s/ David E. Sharpe Director March 13, 1998
- -----------------------------
David E. Sharpe
/s/ Peter N. Walmsley Director March 13, 1998
- -----------------------------
Peter N. Walmsley
/s/ Alan Chesney Interim Chief Financial March 13, 1998
- ----------------------------- Officer (Principal Financial
Alan Chesney and Accounting Officer)
/s/ William M. Dubay President, Chief Operating March 13, 1998
- ----------------------------- Officer and Director
William M. Dubay
/s/ Donald R. Hughes Director March 13, 1998
- -----------------------------
Donald R. Hughes
</TABLE>
<PAGE> 8
SIGNATURES (CONTINUED)
Pursuant to the requirements of the Securities Act of 1933, the trustees
(or other persons who administer the employee benefit plan) have duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Town of Brunswick, State of Maine, on March
13, 1998.
BRUNSWICK TECHNOLOGIES, INC.
401(k) SAVINGS & RETIREMENT PLAN
By: Brunswick Technologies, Inc. as Trustee
/s/ Thomas L. Wallace
---------------------
Thomas L. Wallace, Vice President of Manufacturing
Duly Authorized
<PAGE> 1
Exhibit 4(a)
BRUNSWICK TECHNOLOGIES, INC.
401K SAVINGS & RETIREMENT PLAN
Defined Contribution Plan 7.7
Restated July 1, 1997
<PAGE> 2
TABLE OF CONTENTS
INTRODUCTION
ARTICLE I FORMAT AND DEFINITIONS
Section 1.01 ----- Format
Section 1.02 ----- Definitions
ARTICLE II PARTICIPATION
Section 2.01 ----- Active Participant
Section 2.02 ----- Inactive Participant
Section 2.03 ----- Cessation of Participation
ARTICLE III CONTRIBUTIONS
Section 3.01 ----- Employer Contributions
Section 3.01A ----- Rollover Contributions
Section 3.02 ----- Forfeitures
Section 3.03 ----- Allocation
Section 3.04 ----- Contribution Limitation
Section 3.05 ----- Excess Amounts
ARTICLE IV INVESTMENT OF CONTRIBUTIONS
Section 4.01 ----- Investment of Contributions
Section 4.01A ----- Investment in Qualifying Employer Securities
Section 4.01B ----- Limitation on Investment in Qualifying Employer
Securities by Some Participants
ARTICLE V BENEFITS
Section 5.01 ----- Retirement Benefits
Section 5.02 ----- Death Benefits
Section 5.03 ----- Vested Benefits
Section 5.04 ----- When Benefits Start
Section 5.05 ----- Withdrawal Privileges
Section 5.06 ----- Loans to Participants
3
<PAGE> 3
ARTICLE VI DISTRIBUTION OF BENEFITS
Section 6.01 ----- Automatic Forms of Distribution
Section 6.02 ----- Optional Forms of Distribution and Distribution
Requirements
Section 6.02A ----- Distributions in Qualifying Employer Securities
Section 6.03 ----- Election Procedures
Section 6.04 ----- Notice Requirements
ARTICLE VII TERMINATION OF PLAN
ARTICLE VIII ADMINISTRATION OF PLAN
Section 8.01 ----- Administration
Section 8.02 ----- Records
Section 8.03 ----- Information Available
Section 8.04 ----- Claim and Appeal Procedures
Section 8.05 ----- Unclaimed Vested Account Procedure
Section 8.06 ----- Delegation of Authority
ARTICLE IX GENERAL PROVISIONS
Section 9.01 ----- Amendments
Section 9.02 ----- Direct Rollovers
Section 9.03 ----- Mergers and Direct Transfers
Section 9.04 ----- Provisions Relating to the Insurer and Other
Parties
Section 9.05 ----- Employment Status
Section 9.06 ----- Rights to Plan Assets
Section 9.07 ----- Beneficiary
Section 9.08 ----- Nonalienation of Benefits
Section 9.09 ----- Construction
Section 9.10 ----- Legal Actions
Section 9.11 ----- Small Amounts
Section 9.12 ----- Word Usage
Section 9.13 ----- Transfers Between Plans
ARTICLE X TOP-HEAVY PLAN REQUIREMENTS
Section 10.01 ----- Application
Section 10.02 ----- Definitions
Section 10.03 ----- Modification of Vesting Requirements
Section 10.04 ----- Modification of Contributions
Section 10.05 ----- Modification of Contribution Limitation
PLAN EXECUTION
4
<PAGE> 4
INTRODUCTION
The Primary Employer previously established a retirement savings plan on
October 1, 1994.
Advanced Textiles Inc. previously established a savings plan on January 1,
1994.
The Primary Employer is of the opinion that these two plans should be
merged under the name Brunswick Technologies, Inc. 401(k) Savings & Retirement
Plan. Effective July 1, 1997, the plans are merged and set forth in this
document which is substituted in lieu of the prior documents.
The restated plan continues to be for the exclusive benefit of employees of
the Employer. All persons covered under one of the plans on June 30, 1997, shall
continue to be covered under the restated plan with no loss of benefits.
It is intended that the plan, as restated, shall qualify as a profit
sharing plan under the Internal Revenue Code of 1986, including any later
amendments to the Code.
5
<PAGE> 5
ARTICLE I
FORMAT AND DEFINITIONS
SECTION 1.01--FORMAT.
Words and phrases defined in the DEFINITIONS SECTION of Article I shall
have that defined meaning when used in this Plan, unless the context clearly
indicates otherwise.
These words and phrases have an initial capital letter to aid in
identifying them as defined terms.
SECTION 1.02--DEFINITIONS.
ACCOUNT means, for a Participant, his share of the Investment Fund.
Separate accounting records are kept for those parts of his Account that
result from:
(a) Elective Deferral Contributions
(b) Matching Contributions
(c) Rollover Contributions
If the Participant's Vesting Percentage is less than 100% as to any of the
Employer Contributions, a separate accounting record will be kept for any
part of his Account resulting from such Employer Contributions and, if
there has been a prior Forfeiture Date, from such Contributions made before
a prior Forfeiture Date.
A Participant's Account shall be reduced by any distribution of his Vested
Account and by any Forfeitures. A Participant's Account will participate in
the earnings credited, expenses charged and any appreciation or
depreciation of the Investment Fund. His Account is subject to any minimum
guarantees applicable under the Group Contract or other investment
arrangement.
ACTIVE PARTICIPANT means an Eligible Employee who is actively participating
in the Plan according to the provisions in the ACTIVE PARTICIPANT SECTION
of Article II.
AFFILIATED SERVICE GROUP means any group of corporations, partnerships or
other organizations of which the Employer is a part and which is affiliated
within the meaning of Code Section 414(m) and regulations thereunder. Such
a group includes at least two organizations one of which is either a
service organization (that is, an organization the principal business of
which is performing services), or an organization the principal business of
which is performing management functions on a regular and continuing basis.
Such service is of a type historically performed by employees. In the case
of a management organization, the Affiliated Service Group shall include
organizations related, within the meaning of Code Section 144(a)(3), to
either the management organization or the organization for which it
performs management functions. The term Controlled Group, as it is used in
this Plan, shall include the term Affiliated Service Group.
6
<PAGE> 6
ANNUITY STARTING DATE means, for a Participant, the first day of the first
period for which an amount is payable as an annuity or any other form.
BENEFICIARY means the person or persons named by a Participant to receive
any benefits under this Plan upon the Participant's death. See the
BENEFICIARY SECTION of Article IX.
CLAIMANT means any person who has made a claim for benefits under this
Plan. See the CLAIM AND APPEAL PROCEDURES SECTION of Article VIII.
CODE means the Internal Revenue Code of 1986, as amended.
COMPENSATION means, except as modified in this definition, the total
earnings paid or made available to an Employee by the Employer or a
Predecessor Employer during any specified period. Earnings from a
Predecessor Employer include earnings while a partner or proprietor of such
Predecessor Employer.
"Earnings" in this definition means Compensation as defined in the
CONTRIBUTION LIMITATION SECTION of Article III.
Compensation shall also include elective contributions. Elective
contributions are amounts excludable from the Employee's gross income under
Code Sections 125, 402(e)(3), 402(h) or 403(b), and contributed by the
Employer, at the Employee's election, to a Code Section 401(k) arrangement,
a simplified employee pension, cafeteria plan or tax-sheltered annuity.
Elective contributions also include Compensation deferred under a Code
Section 457 plan maintained by the Employer and Employee contributions
"picked up" by a governmental entity and, pursuant to Code Section
414(h)(2), treated as Employer contributions.
For purposes of the EXCESS AMOUNTS SECTION of Article III, the Employer may
elect to use an alternative nondiscriminatory definition of Compensation in
accordance with the regulations under Code Section 414(s).
For purposes of determining the amount of Elective Deferral Contributions,
Compensation shall exclude reimbursements or other expense allowances,
fringe benefits (cash and noncash), moving expenses, deferred compensation
and welfare benefits.
For Plan Years beginning after December 31, 1988, and before January 1,
1994, the annual Compensation of each Participant taken into account for
determining all benefits provided under the Plan for any year shall not
exceed $200,000. For Plan Years beginning on or after January 1, 1994, the
annual Compensation of each Participant taken into account for determining
all benefits provided under the Plan for any year shall not exceed
$150,000.
The $200,000 limit shall be adjusted by the Secretary at the same time and
in the same manner as under Code Section 415(d). The $150,000 limit shall
be adjusted by the Commissioner for increases in the cost of living in
accordance with Code Section 401(a)(17)(B). The cost of living adjustment
in effect for a calendar year applies to any period, not exceeding 12
months, over which pay is determined (determination period) beginning in
such calendar year. If a determination period consists of fewer than 12
months, the annual compensation limit will be multiplied by a fraction, the
numerator of which is the number of months in the determination period, and
the denominator of which is 12.
7
<PAGE> 7
In determining the Compensation of a Participant for purposes of the annual
compensation limit, the rules of Code Section 414(q)(6) shall apply, except
that in applying such rules, the term "family" shall include only the
spouse of the Participant and any lineal descendants of the Participant who
have not attained age 19 before the close of the year. If, as a result of
the application of such rules the adjusted annual compensation limit is
exceeded, then (except for purposes of determining the portion of
Compensation up to the integration level if this Plan provides for
permitted disparity) the limitation shall be prorated among the affected
individuals in proportion to each such individual's Compensation as
determined under this definition prior to the application of this
limitation.
If Compensation for any prior determination period is taken into account in
determining a Participant's benefits accruing in the current Plan Year, the
Compensation for that prior determination period is subject to the annual
compensation limit in effect for that prior determination period. For this
purpose, for determination periods beginning before the first day of the
first Plan Year beginning on or after January 1, 1989, which are used to
determine benefits in Plan Years beginning after December 31, 1988 and
before January 1, 1994, the annual compensation limit is $200,000. For this
purpose, for determination periods beginning before the first day of the
first Plan Year beginning on or after January 1, 1994, which are used to
determine benefits in Plan Years beginning on or after January 1, 1994, the
annual compensation limit is $150,000.
Compensation means, for an Employee who is a Leased Employee, the
Employee's Compensation for the services he performs for the Employer,
determined in the same manner as the Compensation of Employees who are not
Leased Employees, regardless of whether such Compensation would be received
directly from the Employer or from the leasing organization.
CONTINGENT ANNUITANT means an individual named by the Participant to
receive a lifetime benefit after the Participant's death in accordance with
a survivorship life annuity.
CONTRIBUTIONS means
Elective Deferral Contributions
Matching Contributions
Rollover Contributions
as set out in Article III, unless the context clearly indicates otherwise.
CONTROLLED GROUP means any group of corporations, trades or businesses of
which the Employer is a part that are under common control. A Controlled
Group includes any group of corporations, trades or businesses, whether or
not incorporated, which is either a parent-subsidiary group, a
brother-sister group, or a combined group within the meaning of Code
Section 414(b), Code Section 414(c) and regulations thereunder and, for
purposes of determining contribution limitations under the CONTRIBUTION
LIMITATION SECTION of Article III, as modified by Code Section 415(h) and,
for the purpose of identifying Leased Employees, as modified by Code
Section 144(a)(3). The term Controlled Group, as it is used in this Plan,
shall include the term Affiliated Service Group and any other employer
required to be aggregated with the Employer under Code Section 414(o) and
the regulations thereunder.
DIRECT ROLLOVER means a payment by the Plan to the Eligible Retirement Plan
specified by the Distributee.
8
<PAGE> 8
DISTRIBUTEE means an Employee or former Employee. In addition, the
Employee's or former Employee's surviving spouse and the Employee's or
former Employee's spouse or former spouse who is the alternate payee under
a qualified domestic relations order, as defined in Code Section 414(p),
are Distributees with regard to the interest of the spouse or former
spouse.
EARLY RETIREMENT DATE means the first day of any month before a
Participant's Normal Retirement Date which the Participant selects for the
start of his retirement benefit. This day shall be on or after the date on
which he ceases to be an Employee and the date he meets the following
requirement(s):
(a) He has attained age 55.
ELECTIVE DEFERRAL CONTRIBUTIONS means Contributions made by the Employer to
fund this Plan in accordance with a qualified cash or deferred arrangement
as described in Code Section 401(k). See the EMPLOYER CONTRIBUTIONS SECTION
of Article III.
ELIGIBILITY SERVICE means an Employee's Period of Service. If he has more
than one Period of Service, or if all or a part of a Period of Service is
not counted, his Eligibility Service shall be determined by adjusting his
Employment Commencement Date so that he has one continuous period of
Eligibility Service equal to the aggregate of all his countable Periods of
Service. An Employee's Eligibility Service shall be determined on the basis
that 30 days equal one month and 365 days equal one year.
However, Eligibility Service is modified as follows:
Predecessor Employer service included:
An Employee's service with a Predecessor Employer shall be included as
service with the Employer. This service includes service performed
while a proprietor or partner.
Period of Military Duty included:
A Period of Military Duty shall be included as service with the
Employer to the extent it has not already been credited.
Period of Severance included (service spanning rule):
A Period of Severance shall be deemed to be a Period of Service under
either of the following conditions:
(a) the Period of Severance immediately follows a period during which
an Employee is not absent from work and ends within 12 months; or
(b) the Period of Severance immediately follows a period during which
an Employee is absent from work for any reason other than
quitting, being discharged or retiring (such as a leave of
absence or layoff) and ends within 12 months of the date he was
first absent.
Controlled Group service included:
9
<PAGE> 9
An Employee's service with a member firm of a Controlled Group while
both that firm and the Employer were members of the Controlled Group
shall be included as service with the Employer.
ELIGIBLE EMPLOYEE means any Employee of the Employer.
ELIGIBLE RETIREMENT PLAN means an individual retirement account described
in Code Section 408(a), an individual retirement annuity described in Code
Section 408(b), an annuity plan described in Code Section 403(a) or a
qualified trust described in Code Section 401(a), that accepts the
Distributee's Eligible Rollover Distribution.
However, in the case of an Eligible Rollover Distribution to the surviving
spouse, an Eligible Retirement Plan is an individual retirement account or
individual retirement annuity.
ELIGIBLE ROLLOVER DISTRIBUTION means any distribution of all or any portion
of the balance to the credit of the Distributee, except that an Eligible
Rollover Distribution does not include:
(a) Any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the
life (or life expectancy) of the Distributee or the joint lives (or
joint life expectancies) of the Distributee and the Distributee's
designated Beneficiary, or for a specified period of ten years or
more.
(b) Any distribution to the extent such distribution is required under
Code Section 401(a)(9).
(c) The portion of any distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
EMPLOYEE means an individual who is employed by the Employer or any other
employer required to be aggregated with the Employer under Code Sections
414(b), (c), (m) or (o). A Controlled Group member is required to be
aggregated with the Employer.
The term Employee shall also include any Leased Employee deemed to be an
employee of any employer described in the preceding paragraph as provided
in Code Sections 414(n) or 414(o).
EMPLOYER means the Primary Employer. This will also include any successor
corporation or firm of the Employer which shall, by written agreement,
assume the obligations of this Plan or any predecessor corporation or firm
of the Employer (absorbed by the Employer, or of which the Employer was
once a part) which became a predecessor because of a change of name,
merger, purchase of stock or purchase of assets and which maintained this
Plan.
EMPLOYER CONTRIBUTIONS means
Elective Deferral Contributions
Matching Contributions
as set out in Article III, unless the context clearly indicates otherwise.
EMPLOYMENT COMMENCEMENT DATE means the date an Employee first performs an
Hour-of-Service.
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<PAGE> 10
ENTRY DATE means the date an Employee first enters the Plan as an Active
Participant. See the ACTIVE PARTICIPANT SECTION of Article II.
FISCAL YEAR means the Primary Employer's taxable year. The last day of the
Fiscal Year is December 31.
FORFEITURE means the part, if any, of a Participant's Account that is
forfeited. See the FORFEITURES SECTION of Article III.
FORFEITURE DATE means, as to a Participant, the last day of five
consecutive one-year Periods of Severance.
This is the date on which the Participant's Nonvested Account will be
forfeited unless an earlier forfeiture occurs as provided in the
FORFEITURES SECTION of Article III.
GROUP CONTRACT means the group annuity contract or contracts into which the
Trustee enters with the Insurer for the investment of Contributions and the
payment of benefits under this Plan. The term Group Contract as it is used
in this Plan is deemed to include the plural unless the context clearly
indicates otherwise.
HIGHLY COMPENSATED EMPLOYEE means a highly compensated active Employee or a
highly compensated former Employee.
A highly compensated active Employee means any Employee who performs
service for the Employer during the determination year and who, during the
look-back year is:
(a) An Employee who is a 5% owner, as defined in Section 416(i)(1)(B)(i),
at any time during the determination year or the look-back year.
(b) An Employee who receives compensation in excess of $75,000 (indexed in
accordance with Section 415(d) during the look-back year.
(c) An Employee who receives compensation in excess of $50,000 (indexed in
accordance with Section 415(d) during the look-back year and is a
member of the top-paid group for the look-back year.
(d) An Employee who is an officer, within the meaning of Section 416(i),
during the look-back year and who receives compensation in the
look-back year greater than 50% of the dollar limitation in effect
under Section 415(b)(1)(A) for the calendar year in which the
look-back year begins. The number of officers is limited to 50 (or, if
lesser, the greater of 3 employees or 10% of employees) excluding
those employees who may be excluded in determining the top-paid group.
(e) An Employee who is both described in paragraph b, c or d above when
these paragraphs are modified to substitute the determination year for
the look-back year and one of the 100 Employees who receive the most
compensation from the Employer during the determination year.
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<PAGE> 11
If no officer has satisfied the compensation requirement of (c) above
during either a determination year or look-back year, the highest paid
officer for such year shall be treated as a Highly Compensated Employee.
For this purpose, the determination year shall be the Plan Year. The
look-back year shall be the twelve-month period immediately preceding the
determination year.
A highly compensated former Employee means any Employee who separated from
service (or was deemed to have separated) prior to the determination year,
performs no service for the Employer during the determination year, and was
a highly compensated active Employee for either the separation year or any
determination year ending on or after the Employee's 55th birthday.
If an Employee is, during a determination year or look-back year, a family
member of either a 5 percent owner who is an active or former Employee or a
Highly Compensated Employee who is one of the 10 most highly compensated
Employees ranked on the basis of compensation paid by the Employer during
such year, then the family member and the 5 percent owner or top-ten highly
compensated Employee shall be aggregated. In such case, the family member
and 5 percent owner or top-ten highly compensated Employee shall be treated
as a single Employee receiving compensation and Plan contributions or
benefits equal to the sum of such compensation and contributions or
benefits of the family member and 5 percent owner or top-ten highly
compensated Employee. For purposes of this definition, family member
includes the spouse, lineal ascendants and descendants of the Employee or
former Employee and the spouses of such lineal ascendants and descendants.
Compensation is compensation within the meaning of Code Section 415(c)(3),
including elective or salary reduction contributions to a cafeteria plan,
cash or deferred arrangement or tax-sheltered annuity. The top-paid group
consists of the top 20% of employees ranked on the basis of compensation
received during the year.
Employers aggregated under Section 414(b), (c), (m) or (o) are treated as a
single Employer.
HOUR-OF-SERVICE means, for an Employee, each hour for which he is paid, or
entitled to payment, for performing duties for the Employer.
Hours-of-Service shall be credited for employment with any other employer
required to be aggregated with the Employer under Code Sections 414(b),
(c), (m) or (o) and the regulations thereunder for purposes of eligibility
and vesting. Hours-of-Service shall also be credited for any individual who
is considered an employee for purposes of this Plan pursuant to Code
Section 414(n) or Code Section 414(o) and the regulations thereunder.
INACTIVE PARTICIPANT means a former Active Participant who has an Account.
See the INACTIVE PARTICIPANT SECTION of Article II.
INSURER means Principal Mutual Life Insurance Company and any other
insurance company or companies named by the Trustee or Primary Employer.
INVESTMENT FUND means the total assets held for the purpose of providing
benefits for Participants. These funds result from Contributions made under
the Plan.
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<PAGE> 12
INVESTMENT MANAGER means any fiduciary (other than a trustee or Named
Fiduciary)
(a) who has the power to manage, acquire, or dispose of any assets of the
Plan; and
(b) who (1) is registered as an investment adviser under the Investment
Advisers Act of 1940, or (2) is a bank, as defined in the Investment
Advisers Act of 1940, or (3) is an insurance company qualified to
perform services described in subparagraph (a) above under the laws of
more than one state; and
(c) who has acknowledged in writing being a fiduciary with respect to the
Plan.
LATE RETIREMENT DATE means the first day of any month which is after a
Participant's Normal Retirement Date and on which retirement benefits
begin. If a Participant continues to work for the Employer after his Normal
Retirement Date, his Late Retirement Date shall be the earliest first day
of the month on or after he ceases to be an Employee. An earlier or a later
Retirement Date may apply if the Participant so elects. An earlier
Retirement Date may apply if the Participant is age 70 1/2. See the WHEN
BENEFITS START SECTION of Article V.
LEASED EMPLOYEE means any person (other than an employee of the recipient)
who pursuant to an agreement between the recipient and any other person
("leasing organization") has performed services for the recipient (or for
the recipient and related persons determined in accordance with Code
Section 414(n)(6)) on a substantially full time basis for a period of at
least one year, and such services are of a type historically performed by
employees in the business field of the recipient employer. Contributions or
benefits provided a Leased Employee by the leasing organization which are
attributable to service performed for the recipient employer shall be
treated as provided by the recipient employer.
A Leased Employee shall not be considered an employee of the recipient if:
(a) such employee is covered by a money purchase pension plan providing
(1) a nonintegrated employer contribution rate of at least 10 percent
of compensation, as defined in Code Section 415(c)(3), but including
amounts contributed pursuant to a salary reduction agreement which are
excludable from the employee's gross income under Code Sections 125,
402(e)(3), 402(h) or 403(b), (2) immediate participation, and (3) full
and immediate vesting and
(b) Leased Employees do not constitute more than 20 percent of the
recipient's nonhighly compensated workforce.
LOAN ADMINISTRATOR means the person or positions authorized to administer
the Participant loan program.
The Loan Administrator is Margaret F. Leeman.
MATCHING CONTRIBUTIONS means matching contributions made by the Employer to
fund this Plan. See the EMPLOYER CONTRIBUTIONS SECTION of Article III.
MONTHLY DATE means each Yearly Date and the same day of each following
month during the Plan Year beginning on such Yearly Date.
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<PAGE> 13
NAMED FIDUCIARY means the person or persons who have authority to control
and manage the operation and administration of the Plan.
The Named Fiduciary is the Employer.
NONHIGHLY COMPENSATED EMPLOYEE means an Employee of the Employer who is
neither a Highly Compensated Employee nor a family member.
NONVESTED ACCOUNT means the part, if any, of a Participant's Account that
is in excess of his Vested Account.
NORMAL FORM means a single life annuity with installment refund.
NORMAL RETIREMENT AGE means the age at which the Participant's normal
retirement benefit becomes nonforfeitable. A Participant's Normal
Retirement Age is 65.
NORMAL RETIREMENT DATE means the earliest first day of the month on or
after the date the Participant reaches his Normal Retirement Age. Unless
otherwise provided in this Plan, a Participant's retirement benefits shall
begin on a Participant's Normal Retirement Date if he has ceased to be an
Employee on such date and has a Vested Account. Even if the Participant is
an Employee on his Normal Retirement Date, he may choose to have his
retirement benefit begin on such date. See the WHEN BENEFITS START SECTION
of Article V.
PARENTAL ABSENCE means an Employee's absence from work which begins on or
after the first Yearly Date after December 31, 1984,
(a) by reason of pregnancy of the Employee,
(b) by reason of birth of a child of the Employee,
(c) by reason of the placement of a child with the Employee in connection
with adoption of such child by such Employee, or
(d) for purposes of caring for such child for a period beginning
immediately following such birth or placement.
PARTICIPANT means either an Active Participant or an Inactive Participant.
PERIOD OF MILITARY DUTY means, for an Employee
(a) who served as a member of the armed forces of the United States, and
(b) who was reemployed by the Employer at a time when the Employee had a
right to reemployment in accordance with seniority rights as protected
under Section 2021 through 2026 of Title 38 of the U. S. Code,
the period of time from the date the Employee was first absent from active
work for the Employer because of such military duty to the date the
Employee was reemployed.
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<PAGE> 14
PERIOD OF SERVICE means a period of time beginning on an Employee's
Employment Commencement Date or Reemployment Commencement Date (whichever
applies) and ending on his Severance from Service Date.
PERIOD OF SEVERANCE means a period of time beginning on an Employee's
Severance from Service Date and ending on the date he again performs an
Hour-of-Service.
A one-year Period of Severance means a Period of Severance of 12
consecutive months.
Solely for purposes of determining whether a one-year Period of Severance
has occurred for eligibility or vesting purposes, the 12-consecutive month
period beginning on the first anniversary of the first date of a Parental
Absence shall not be a one-year Period of Severance.
PLAN means the retirement savings plan of the Employer set forth in this
document, including any later amendments to it.
PLAN ADMINISTRATOR means the person or persons who administer the Plan.
The Plan Administrator is the Employer.
PLAN YEAR means a period beginning on a Yearly Date and ending on the day
before the next Yearly Date.
PREDECESSOR EMPLOYER means a firm absorbed by the Employer by change of
name, merger, acquisition or a change of corporate status which maintained
a qualified retirement plan or any other firm of which the Employer was
once a part which maintained a qualified retirement plan.
PRIMARY EMPLOYER means Brunswick Technologies, Inc.
QUALIFIED JOINT AND SURVIVOR FORM means, for a Participant who has a
spouse, an immediate survivorship life annuity with installment refund,
where the survivorship percentage is 50% and the Contingent Annuitant is
the Participant's spouse. A former spouse will be treated as the spouse to
the extent provided under a qualified domestic relations order as described
in Code Section 414(p). If a Participant does not have a spouse, the
Qualified Joint and Survivor Form means the Normal Form.
The amount of benefit payable under the Qualified Joint and Survivor Form
shall be the amount of benefit which may be provided by the Participant's
Vested Account.
QUALIFIED PRERETIREMENT SURVIVOR ANNUITY means a single life annuity with
installment refund payable to the surviving spouse of a Participant who
dies before his Annuity Starting Date. A former spouse will be treated as
the surviving spouse to the extent provided under a qualified domestic
relations order as described in Code Section 414(p).
QUALIFYING EMPLOYER SECURITY means any instrument issued by the Employer
and meeting the requirements of Section 4975(e)(8) of the Code.
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<PAGE> 15
QUALIFYING EMPLOYER SECURITIES ACCOUNT means for a Participant, his share
of Qualifying Employer Securities.
REEMPLOYMENT COMMENCEMENT DATE means the date an Employee first performs an
Hour-of-Service following a Period of Severance.
REENTRY DATE means the date a former Active Participant reenters the Plan.
See the ACTIVE PARTICIPANT SECTION of Article II.
RETIREMENT DATE means the date a retirement benefit will begin and is a
Participant's Early, Normal or Late Retirement Date, as the case may be.
ROLLOVER CONTRIBUTIONS means the Rollover Contributions which are made by
or for a Participant according to the provisions of the ROLLOVER
CONTRIBUTIONS SECTION of Article III.
SEMI-YEARLY DATE means each Yearly Date and the sixth Monthly Date after
each Yearly Date which is within the same Plan Year.
SEVERANCE FROM SERVICE DATE means the earlier of
(a) the date on which an Employee quits, retires, dies or is discharged,
or
(b) the first anniversary of the date an Employee begins a one-year
absence from service (with or without pay). This absence may be the
result of any combination of vacation, holiday, sickness, disability,
leave of absence or layoff.
Solely to determine whether a one-year Period of Severance has occurred for
eligibility or vesting purposes for an Employee who is absent from service
beyond the first anniversary of the first day of a Parental Absence,
Severance from Service Date is the second anniversary of the first day of
the Parental Absence. The period between the first and second anniversaries
of the first day of the Parental Absence is not a Period of Service and is
not a Period of Severance.
TEFRA means the Tax Equity and Fiscal Responsibility Act of 1982.
TEFRA COMPLIANCE DATE means the date a plan is to comply with the
provisions of TEFRA. The TEFRA Compliance Date as used in this Plan is,
(a) for purposes of contribution limitations, Code Section 415,
(1) if the plan was in effect on July 1, 1982, the first day of the
first limitation year which begins after December 31, 1982, or
(2) if the plan was not in effect on July 1, 1982, the first day of
the first limitation year which ends after July 1, 1982.
(b) for all other purposes, the first Yearly Date after December 31, 1983.
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<PAGE> 16
TOTALLY AND PERMANENTLY DISABLED means that a Participant is disabled, as a
result of sickness or injury, to the extent that he is prevented from
engaging in any substantial gainful activity, and is eligible for and
receives a disability benefit under Title II of the Federal Social Security
Act.
TRUST means an agreement of trust between the Primary Employer and Trustee
established for the purpose of holding and distributing the Trust Fund
under the provisions of the Plan. The Trust may provide for the investment
of all or any portion of the Trust Fund in the Group Contract.
TRUST FUND means the total funds held under the Trust for the purpose of
providing benefits for Participants. These funds result from Contributions
made under the Plan which are forwarded to the Trustee to be deposited in
the Trust Fund.
TRUSTEE means the trustee or trustees under the Trust. The term Trustee as
it is used in this Plan is deemed to include the plural unless the context
clearly indicates otherwise.
VALUATION DATE means for the purposes of the date on which the value of the
assets of the Trust is determined. The value of each Account which is
maintained under this Plan shall be determined on the Valuation Date. In
each Plan Year, the Valuation Date shall be the close of each business day.
VESTED ACCOUNT means the vested part of a Participant's Account. The
Participant's Vested Account is determined as follows.
If the Participant's Vesting Percentage is 100%, his Vested Account equals
his Account.
If the Participant's Vesting Percentage is less than 100%, his Vested
Account equals the sum of (a) and (b) below:
(a) The part of the Participant's Account that results from Employer
Contributions made before a prior Forfeiture Date and all other
Contributions which were 100% vested when made.
(b) The balance of the Participant's Account in excess of the amount in
(a) above multiplied by his Vesting Percentage.
If the Participant has withdrawn any part of his Account resulting from
Employer Contributions, other than the vested Employer Contributions
included in (a) above, the amount determined under this subparagraph (b)
shall be equal to P(AB + D) - D as defined below:
P The Participant's Vesting Percentage.
AB The balance of the Participant's Account in excess of the amount in
(a) above.
D The amount of withdrawal resulting from Employer Contributions, other
than the vested Employer Contributions included in (a) above.
The Participant's Vested Account is nonforfeitable.
VESTING PERCENTAGE means the percentage used to determine the
nonforfeitable portion of a Participant's Account attributable to Employer
Contributions which were not 100% vested when made.
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<PAGE> 17
A Participant's Vesting Percentage is shown in the following schedule
opposite the number of whole years of his Vesting Service.
<TABLE>
<CAPTION>
VESTING SERVICE VESTING
(whole years) PERCENTAGE
<S> <C>
Less than 2 0
2 20
3 40
4 60
5 80
6 or more 100
</TABLE>
However, the Vesting Percentage for a Participant who is an Employee on or
after the earliest of (i) the date he reaches his Normal Retirement Age,
(ii) the date of his death, (iii) the date he meets the requirement(s) for
an Early Retirement Date, or (iv) the date he becomes Totally and
Permanently Disabled, shall be 100% on such date.
If the schedule used to determine a Participant's Vesting Percentage is
changed, the new schedule shall not apply to a Participant unless he is
credited with an Hour-of-Service on or after the date of the change and the
Participant's nonforfeitable percentage on the day before the date of the
change is not reduced under this Plan. The amendment provisions of the
AMENDMENT SECTION of Article IX regarding changes in the computation of the
Vesting Percentage shall apply.
VESTING SERVICE means an Employee's Period of Service. If he has more than
one Period of Service or if all or a part of a Period of Service is not
counted, his Vesting Service shall be determined by adjusting his
Employment Commencement Date so that he has one continuous period of
Vesting Service equal to the aggregate of all his countable Periods of
Service. This period of Vesting Service shall be expressed as whole years
and fractional parts of a year (to two decimal places) on the basis that
365 days equal one year.
However, Vesting Service is modified as follows:
Predecessor Employer service included:
An Employee's service with a Predecessor Employer shall be included as
service with the Employer. This service includes service performed
while a proprietor or partner.
Period of Military Duty included:
A Period of Military Duty shall be included as service with the
Employer to the extent it has not already been credited.
Period of Severance included (service spanning rule):
A Period of Severance shall be deemed to be a Period of Service under
either of the following conditions:
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<PAGE> 18
(a) the Period of Severance immediately follows a period during which
an Employee is not absent from work and ends within 12 months; or
(b) the Period of Severance immediately follows a period during which
an Employee is absent from work for any reason other than
quitting, being discharged or retiring (such as a leave of
absence or layoff) and ends within 12 months of the date he was
first absent.
Controlled Group service included:
An Employee's service with a member firm of a Controlled Group while
both that firm and the Employer were members of the Controlled Group
shall be included as service with the Employer.
YEARLY DATE means October 1, 1994, and each following January 1.
YEARS OF SERVICE means an Employee's Vesting Service disregarding any
modifications which exclude service.
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<PAGE> 19
ARTICLE II
PARTICIPATION
SECTION 2.01--ACTIVE PARTICIPANT.
(a) An Employee shall first become an Active Participant (begin active
participation in the Plan) on the earliest Semi-yearly Date on or
after July 1, 1997, on which he is an Eligible Employee and has met
both of the eligibility requirements set forth below. This date is his
Entry Date.
(1) He has completed six months of Eligibility Service before his
Entry Date.
(2) He is age 21 or older.
Each Employee who was an Active Participant under the Plan or the
Advanced Textiles Inc. 401(k) Savings Plan on June 30, 1997, shall
continue to be an Active Participant if he is still an Eligible
Employee on July 1, 1997, and his Entry Date shall not change.
If a person has been an Eligible Employee who has met all the
eligibility requirements above, but is not an Eligible Employee on the
date which would have been his Entry Date, he shall become an Active
Participant on the date he again becomes an Eligible Employee. This
date is his Entry Date.
(b) An Inactive Participant shall again become an Active Participant
(resume active participation in the Plan) on the date he again
performs an Hour-of-Service as an Eligible Employee. This date is his
Reentry Date.
Upon again becoming an Active Participant, he shall cease to be an
Inactive Participant.
(c) A former Participant shall again become an Active Participant (resume
active participation in the Plan) on the date he again performs an
Hour-of-Service as an Eligible Employee. This date is his Reentry
Date.
There shall be no duplication of benefits for a Participant under this Plan
because of more than one period as an Active Participant.
SECTION 2.02--INACTIVE PARTICIPANT.
An Active Participant shall become an Inactive Participant (stop accruing
benefits under the Plan) on the earlier of the following:
(a) The date on which he ceases to be an Eligible Employee (on his
Retirement Date if the date he ceases to be an Eligible Employee
occurs within one month of his Retirement Date).
(b) The effective date of complete termination of the Plan.
An Employee or former Employee who was an Inactive Participant under the
Plan or the Advanced Textiles Inc. 401(k) Savings Plan on June 30, 1997, shall
continue to be an Inactive Participant on July 1,
20
<PAGE> 20
1997. Eligibility for any benefits payable to him or on his behalf and the
amount of the benefits shall be determined according to the provisions of the
prior document, unless otherwise stated in this document.
SECTION 2.03--CESSATION OF PARTICIPATION.
A Participant shall cease to be a Participant on the date he is no longer
an Eligible Employee and his Account is zero.
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<PAGE> 21
ARTICLE III
CONTRIBUTIONS
SECTION 3.01--EMPLOYER CONTRIBUTIONS.
Employer Contributions for Plan Years which end on or after July 1, 1997,
may be made without regard to current or accumulated net income, earnings, or
profits of the Employer. Notwithstanding the foregoing, the Plan shall continue
to be designed to qualify as a profit sharing plan for purposes of Code Sections
401(a), 402, 412, and 417. Such Contributions will be equal to the Employer
Contributions as described below:
(a) The amount of each Elective Deferral Contribution for a Participant
shall be equal to any percentage (not more than 15%) of his
Compensation as elected in his elective deferral agreement. An
Employee who is eligible to participate in the Plan may file an
elective deferral agreement with the Employer. The elective deferral
agreement to start Elective Deferral Contributions may be effective on
a Participant's Entry Date (Reentry Date, if applicable) or any
following date. The Participant shall make any change or terminate the
elective deferral agreement by filing a new elective deferral
agreement. A Participant's elective deferral agreement making a change
may be effective on any date an elective deferral agreement to start
Elective Deferral Contributions could be effective. A Participant's
elective deferral agreement to stop Elective Deferral Contributions
may be effective on any date. The elective deferral agreement must be
in writing and effective before the beginning of the pay period in
which Elective Deferral Contributions are to start, change or stop.
Elective Deferral Contributions are fully (100%) vested and
nonforfeitable.
(b) The amount of each Matching Contribution for a Participant shall be
equal to 25% of the Elective Deferral Contributions made for him,
disregarding any Elective Deferral Contributions in excess of 4% of
his Compensation.
Matching Contributions are subject to the Vesting Percentage.
No Participant shall be permitted to have Elective Deferral Contributions,
as defined in the EXCESS AMOUNTS SECTION of Article III, made under this Plan,
or any other qualified plan maintained by the Employer, during any taxable year,
in excess of the dollar limitation contained in Code Section 402(g) in effect at
the beginning of such taxable year.
The Employer shall pay to the Trustee its Contributions used to determine
the Actual Deferral Percentage, as defined in the EXCESS AMOUNTS SECTION of
Article III, to the Plan for each Plan Year not later than the end of the
twelve-month period immediately following the Plan Year for which they are
deemed to be paid. Any such Contributions accumulated through payroll deductions
shall be paid within 90 days of the date withheld or the date it is first
reasonably practical for the Employer to do so, if earlier.
A portion of the Plan assets resulting from Employer Contributions (but not
more than the original amount of those Contributions and reduced proportionately
for losses, if applicable) may be returned if the Employer Contributions are
made because of a mistake of fact or are more than the amount deductible under
Code Section 404 (excluding any amount which is not deductible because the Plan
is disqualified). The amount
22
<PAGE> 22
involved must be returned to the Employer within one year after the date the
Employer Contributions are made by mistake of fact or the date the deduction is
disallowed, whichever applies. Except as provided under this paragraph and
Article VII, the assets of the Plan shall never be used for the benefit of the
Employer and are held for the exclusive purpose of providing benefits to
Participants and their Beneficiaries and for defraying reasonable expenses of
administering the Plan.
SECTION 3.01A--ROLLOVER CONTRIBUTIONS.
A Rollover Contribution may be made by or for an Eligible Employee if the
following conditions are met:
(a) The Contribution is a rollover contribution which the Code permits to
be transferred to a plan that meets the requirements of Code Section
401(a).
(b) If the Contribution is made by the Eligible Employee, it is made
within sixty days after he receives the distribution.
(c) The Eligible Employee furnishes evidence satisfactory to the Plan
Administrator that the proposed transfer is in fact a rollover
contribution that meets conditions (a) and (b) above.
The Rollover Contribution may be made by the Eligible Employee or the
Eligible Employee may direct the trustee or named fiduciary of another plan to
transfer the funds which would otherwise be a Rollover Contribution directly to
this Plan. Such transferred funds shall be called a Rollover Contribution. The
Contribution shall be made according to procedures set up by the Plan
Administrator.
If the Eligible Employee is not an Active Participant at the time the
Rollover Contribution is made, he shall be deemed to be a Participant only for
the purposes of investment and distribution of the Rollover Contribution. He
shall not share in the allocation of Employer Contributions until the time he
meets all the requirements to become an Active Participant.
Rollover Contributions made by or for an Eligible Employee shall be
credited to his Account. The part of the Participant's Account resulting from
Rollover Contributions is fully (100%) vested and nonforfeitable at all times. A
separate accounting record shall be maintained for that part of his Rollover
Contribution which consists of voluntary contributions that were deducted from
the Participant's gross income for Federal income tax purposes.
SECTION 3.02--FORFEITURES.
The Nonvested Account of a Participant shall be forfeited as of the earlier
of the following: the date of the Participant's death, if prior to such date he
had ceased to be an Employee; or his Forfeiture Date. All or a part of a
Participant's Nonvested Account will be forfeited if, after he ceases to be an
Employee, he receives a distribution of his entire Vested Account or a
distribution of his Vested Account derived from Employer Contributions which
were not 100% vested when made according to the provisions of the VESTED
BENEFITS SECTION of Article V or the SMALL AMOUNTS SECTION of Article IX. If a
Participant's Vested Account is zero on the date he ceases to be an Employee, he
shall be deemed to have received a distribution of his entire Vested Account on
such date. The forfeiture will occur as of the date he receives the distribution
or on the date such provision became effective, if later. If he receives a
distribution of his entire Vested Account, his entire Nonvested Account will be
forfeited. If he receives a distribution of his Vested Account from Employer
Contributions which were not 100% vested when made, but less than his entire
Vested Account, the amount
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<PAGE> 23
to be forfeited will be determined by multiplying his Nonvested Account by a
fraction. The numerator of the fraction is the amount of the distribution
derived from Employer Contributions which were not 100% vested when made and the
denominator of the fraction is his entire Vested Account derived from such
Employer Contributions on the date of distribution.
A Forfeiture shall also occur as described in the EXCESS AMOUNTS SECTION of
Article III.
Forfeitures may first be applied to pay administrative expenses under the
Plan which would otherwise be paid by the Employer.
Forfeitures not used to pay administrative expenses shall be applied to
reduce the earliest Employer Contributions made after the Forfeitures are
determined. Forfeitures shall be determined at least once during each taxable
year of the Employer. Upon their application, such Forfeitures shall be deemed
to be Employer Contributions.
Forfeitures of Matching Contributions which relate to excess amounts shall
be applied as provided in the EXCESS AMOUNTS SECTION of Article III.
If a Participant again becomes an Eligible Employee after receiving a
distribution which caused his Nonvested Account to be forfeited, he shall have
the right to repay to the Plan the entire amount of the distribution he received
(excluding any amount of such distribution resulting from Contributions which
were 100% vested when made). The repayment must be made before the earlier of
the date five years after the date he again becomes an Eligible Employee or the
end of the first period of five consecutive one-year Periods of Severance which
begin after the date of the distribution.
If the Participant makes the repayment provided above, the Plan
Administrator shall restore to his Account an amount equal to his Nonvested
Account which was forfeited on the date of distribution, unadjusted for any
investment gains or losses. If the amount of the repayment is zero dollars
because the Participant was deemed to have received a distribution or the plan
did not have repayment provisions in effect on the date the distribution was
made and he again performs an Hour-of-Service as an Eligible Employee within the
repayment period, the Plan Administrator shall restore the Participant's Account
as if he had made a required repayment on the date he performed such
Hour-of-Service. Restoration of the Participant's Account shall include
restoration of all Code Section 411(d)(6) protected benefits with respect to
that restored Account, according to applicable Treasury regulations. Provided,
however, the Plan Administrator shall not restore the Nonvested Account if a
Forfeiture Date has occurred after the date of the distribution and on or before
the date of repayment and that Forfeiture Date would result in a complete
forfeiture of the amount the Plan Administrator would otherwise restore.
The Plan Administrator shall restore the Participant's Account by the close
of the Plan Year following the Plan Year in which repayment is made. Permissible
sources for restoration are Forfeitures or Employer Contributions. The Employer
shall contribute, without regard to any requirement or condition of the EMPLOYER
CONTRIBUTIONS SECTION of Article III, such additional amount needed to make the
required restoration. The repaid and restored amounts are not included in the
Participant's Annual Addition, as defined in the CONTRIBUTION LIMITATION SECTION
of Article III.
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SECTION 3.02--ALLOCATION.
The following Contributions for each Plan Year shall be allocated to each
Participant for whom such Contributions were made under the EMPLOYER
CONTRIBUTIONS SECTION of Article III:
Elective Deferral Contributions
Matching Contributions
These Contributions shall be allocated when made and credited to the
Participant's Account.
In determining the amount of Employer Contributions to be allocated to a
Participant who is a Leased Employee, contributions and benefits provided by the
leasing organization which are attributable to services such Leased Employee
performs for the Employer shall be treated as provided by the Employer and there
shall be no duplication of those contributions or benefits under this Plan.
SECTION 3.03--CONTRIBUTION LIMITATION.
(a) For the purpose of determining the contribution limitation set forth
in this section, the following terms are defined:
Aggregate Annual Addition means, for a Participant with respect to any
Limitation Year, the sum of his Annual Additions under all defined
contribution plans of the Employer, as defined in this section, for
such Limitation Year. The nondeductible participant contributions
which the Participant makes to a defined benefit plan shall be treated
as Annual Additions to a defined contribution plan. The Contributions
the Employer, as defined in this section, made for the Participant for
a Plan Year beginning on or after March 31, 1984, to an individual
medical benefit account, as defined in Code Section 415(l)(2), under a
pension or annuity plan of the Employer, as defined in this section,
shall be treated as Annual Additions to a defined contribution plan.
Also, amounts derived from contributions paid or accrued after
December 31, 1985, in Fiscal Years ending after such date, which are
attributable to post-retirement medical benefits allocated to the
separate account of a key employee, as defined in Code Section
419A(d)(3), under a welfare benefit fund, as defined in Code Section
419(e), maintained by the Employer, as defined in this section, are
treated as Annual Additions to a defined contribution plan. The 25% of
Compensation limit under Maximum Permissible Amount does not apply to
Annual Additions resulting from contributions made to an individual
medical account, as defined in Code Section 415(l)(2), or to Annual
Additions resulting from contributions for medical benefits, within
the meaning of Code Section 419A, after separation from service.
Annual Addition means the amount added to a Participant's account for
any Limitation Year which may not exceed the Maximum Permissible
Amount. The Annual Addition under any plan for a Participant with
respect to any Limitation Year, shall be equal to the sum of (1) and
(2) below:
(1) Employer contributions and forfeitures credited to his account
for the Limitation Year.
(2) Participant contributions made by him for the Limitation Year.
Before the first Limitation Year beginning after December 31, 1986,
the amount under (2) above is the lesser of (i) 1/2 of his
nondeductible participant contributions made for the Limitation Year,
or
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<PAGE> 25
(ii) the amount, if any, of his nondeductible participant
contributions made for the Limitation Year which is in excess of six
percent of his Compensation, as defined in this section, for such
Limitation Year.
Compensation means all wages for Federal income tax withholding
purposes, as defined under Code Section 3401(a) (for purposes of
income tax withholding at the source), disregarding any rules limiting
the remuneration included as wages based on the nature or location of
the employment or the services performed. Compensation also includes
all other payments to an Employee in the course of the Employer's
trade or business, for which the Employer must furnish the Employee a
written statement under Code Sections 6041(d) and 6051(a)(3). The
"Wages, Tips and Other Compensation" box on Form W-2 satisfies this
definition.
For any self-employed individual Compensation will mean earned income.
For purposes of applying the limitations of this section, Compensation
for a Limitation Year is the Compensation actually paid or made
available during such Limitation Year.
Defined Benefit Plan Fraction means, with respect to a Limitation Year
for a Participant who is or has been a participant in a defined
benefit plan ever maintained by the Employer, as defined in this
section, the quotient, expressed as a decimal, of
(1) the Participant's Projected Annual Benefit under all such plans
as of the close of such Limitation Year, divided by
(2) on and after the TEFRA Compliance Date, the lesser of (i) or (ii)
below:
(i) 1.25 multiplied by the maximum dollar limitation which
applies to defined benefit plans determined for the
Limitation Year under Code Sections 415(b) or (d) or
(ii) 1.4 multiplied by the Participant's highest average
compensation as defined in the defined benefit plan(s),
including any adjustments under Code Section 415(b).
Before the TEFRA Compliance Date, this denominator is the
Participant's Projected Annual Benefit as of the close of the
Limitation Year if the plan(s) provided the maximum benefit
allowable.
The Defined Benefit Plan Fraction shall be modified as follows:
If the Participant was a participant as of the first day of the first
Limitation Year beginning after December 31, 1986, in one or more
defined benefit plans maintained by the Employer, as defined in this
section, which were in existence on May 6, 1986, the denominator of
this fraction will not be less than 125 percent of the sum of the
annual benefits under such plans which the Participant had accrued as
of the close of the last Limitation Year beginning before January 1,
1987, disregarding any changes in the terms and conditions of the plan
after May 5, 1986. The preceding sentence applies only if the defined
benefit plans individually and in the aggregate
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<PAGE> 26
satisfied the requirements of Code Section 415 for all Limitation
Years beginning before January 1, 1987.
Defined Contribution Plan Fraction means, for a Participant with
respect to a Limitation Year, the quotient, expressed as a decimal, of
(1) the Participant's Aggregate Annual Additions for such Limitation
Year and all prior Limitation Years, under all defined
contribution plans (including the Aggregate Annual Additions
attributable to nondeductible accounts under defined benefit
plans and attributable to all welfare benefit funds, as defined
in Code Section 419(e) and attributable to individual medical
accounts, as defined in Code Section 415(l)(2)) ever maintained
by the Employer, as defined in this section, divided by
(2) on and after the TEFRA Compliance Date, the sum of the amount
determined for the Limitation Year under (i) or (ii) below,
whichever is less, and the amounts determined in the same manner
for all prior Limitation Years during which he has been an
Employee or an employee of a predecessor employer:
(i) 1.25 multiplied by the maximum permissible dollar amount for
each such Limitation Year, or
(ii) 1.4 multiplied by the maximum permissible percentage of the
Participant's Compensation, as defined in this section, for
each such Limitation Year.
Before the TEFRA Compliance Date, this denominator is the sum of
the maximum allowable amount of Annual Addition to his account(s)
under all the plan(s) of the Employer, as defined in this
section, for each such Limitation Year.
The Defined Contribution Plan Fraction shall be modified as follows:
If the Participant was a participant as of the first day of the first
Limitation Year beginning after December 31, 1986, in one or more
defined contribution plans maintained by the Employer, as defined in
this section, which were in existence on May 6, 1986, the numerator of
this fraction shall be adjusted if the sum of the Defined Contribution
Plan Fraction and Defined Benefit Plan Fraction would otherwise exceed
1.0 under the terms of this Plan. Under the adjustment, the dollar
amount determined below shall be permanently subtracted from the
numerator of this fraction. The dollar amount is equal to the excess
of the sum of the two fractions, before adjustment, over 1.0
multiplied by the denominator of his Defined Contribution Plan
Fraction. The adjustment is calculated using his Defined Contribution
Plan Fraction and Defined Benefit Plan Fraction as they would be
computed as of the end of the last Limitation Year beginning before
January 1, 1987, and disregarding any changes in the terms and
conditions of the plan made after May 5, 1986, but using the Code
Section 415 limitations applicable to the first Limitation Year
beginning on or after January 1, 1987.
The Annual Addition for any Limitation Year beginning before January
1, 1987, shall not be recomputed to treat all employee contributions
as Annual Additions.
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<PAGE> 27
For a plan that was in existence on July 1, 1982, for purposes of
determining the Defined Contribution Plan Fraction for any Limitation
Year ending after December 31, 1982, the Plan Administrator may elect,
in accordance with the provisions of Code Section 415, that the
denominator for each Participant for all Limitation Years ending
before January 1, 1983, will be equal to
(1) the Defined Contribution Plan Fraction denominator which would
apply for the last Limitation Year ending in 1982 if an election
under this paragraph were not made, multiplied by.
(2) a fraction, equal to (i) over (ii) below:
(i) the lesser of (A) $51,875, or (B) 1.4, multiplied by 25% of
the Participant's Compensation, as defined in this section,
for the Limitation Year ending in 1981;
(ii) the lesser of (A) $41,500, or (B) 25% of the Participant's
Compensation, as defined in this section, for the Limitation
Year ending in 1981.
The election described above is applicable only if the plan
administrators under all defined contribution plans of the Employer,
as defined in this section, also elect to use the modified fraction.
Employer means any employer that adopts this Plan and all Controlled
Group members and any other entity required to be aggregated with the
employer pursuant to regulations under Code Section 414(o).
Limitation Year means the 12-consecutive month period within which it
is determined whether or not the limitations of Code Section 415 are
exceeded. Limitation Year means each 12-consecutive month period
ending on December 31. If the Limitation Year is other than the
calendar year, execution of this Plan (or any amendment to this Plan
changing the Limitation Year) constitutes the Employer's adoption of a
written resolution electing the Limitation Year. If the Limitation
Year is changed, the new Limitation Year shall begin within the
current Limitation Year, creating a short Limitation Year.
Maximum Permissible Amount means, for a Participant with respect to
any Limitation Year, the lesser of (1) or (2) below:
(1) The greater of $30,000 or one-fourth of the maximum dollar
limitation which applies to defined benefit plans set forth in
Code Section 415(b)(1)(A) as in effect for the Limitation Year.
(Before the TEFRA Compliance Date, $25,000 multiplied by the cost
of living adjustment factor permitted by Federal regulations.)
(2) 25% of his Compensation, as defined in this section, for such
Limitation Year.
The compensation limitation referred to in (2) shall not apply to any
contribution for medical benefits (within the meaning of Code Section
401(h) or Code Section 419A(f)(2)) which is otherwise treated as an
annual addition under Code Section 415(l)(1) or Code Section
419A(d)(2).
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If there is a short Limitation Year because of a change in Limitation
Year, the Maximum Permissible Amount will not exceed the maximum
dollar limitation which would otherwise apply multiplied by the
following fraction:
Number of months in the short Limitation Year
---------------------------------------------
12
Projected Annual Benefit means a Participant's expected annual benefit
under all defined benefit plan(s) ever maintained by the Employer, as
defined in this section. The Projected Annual Benefit shall be
determined assuming that the Participant will continue employment
until the later of current age or normal retirement age under such
plan(s), and that the Participant's compensation for the current
Limitation Year and all other relevant factors used to determine
benefits under such plan(s) will remain constant for all future
Limitation Years. Such expected annual benefit shall be adjusted to
the actuarial equivalent of a straight life annuity if expressed in a
form other than a straight life or qualified joint and survivor
annuity.
(b) The Annual Addition under this Plan for a Participant during a
Limitation Year shall not be more than the Maximum Permissible Amount.
(c) Contributions which would otherwise be credited to the Participant's
Account shall be limited or reallocated to the extent necessary to
meet the restrictions of subparagraph (b) above for any Limitation
Year in the following order. Elective Deferral Contributions that are
not the basis for Matching Contributions shall be limited. Matching
Contributions shall be limited to the extent necessary to limit the
Participant's Annual Addition under this Plan to his maximum amount.
If Matching Contributions are limited because of this limit, Elective
Deferral Contributions that are the basis for Matching Contributions
shall be reduced in proportion.
If, due to (i) an error in estimating a Participant's Compensation as
defined in this section, (ii) because the amount of the Forfeitures to
be used to offset Employer Contributions is more than the amount of
the Employer Contributions due for the remaining Participants, (iii)
as a result of a reasonable error in determining the amount of
elective deferrals (within the meaning of Code Section 402(g)(3)) that
may be made with respect to any individual under the limits of Code
Section 415, or (iv) other limited facts and circumstances, a
Participant's Annual Addition is greater than the amount permitted in
(b) above, such excess amount shall be applied as follows. Elective
Deferral Contributions which are not the basis for Matching
Contributions will be returned to the Participant. If an excess still
exists, Elective Deferral Contributions that are the basis for
Matching Contributions will be returned to the Participant. Matching
Contributions based on Elective Deferral Contributions which are
returned shall be forfeited. If after the return of Elective Deferral
Contributions, an excess amount still exists, and the Participant is
not an Active Participant as of the end of the Limitation Year, the
excess amount shall be used to offset Employer Contributions for him
in the next Limitation Year. If after the return of Elective Deferral
Contributions, an excess amount still exists, and the Participant is
not an Active Participant as of the end of the Limitation Year, the
excess amount will be held in a suspense account which will be used to
offset Employer Contributions for all Participants in the next
Limitation Year. No Employer Contributions that would be included in
the next Limitation Year's Annual Addition may be made before the
total suspense account has been used.
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<PAGE> 29
(d) A Participant's Aggregate Annual Addition for a Limitation Year shall
not exceed the Maximum Permissible Amount.
If, for the Limitation Year, the Participant has an Annual Addition
under more than one defined contribution plan or a welfare benefit
fund, as defined in Code Section 419(e), or an individual medical
account, as defined in Code Section 415(l)(2), maintained by the
Employer, as defined in this section, and such plans and welfare
benefit funds and individual medical accounts do not otherwise limit
the Aggregate Annual Addition to the Maximum Permissible Amount, any
reduction necessary shall be made first to the profit sharing plans,
then to all other such plans and welfare benefit funds and individual
medical accounts and, if necessary, by reducing first those that were
most recently allocated. Welfare benefit funds and individual medical
accounts shall be deemed to be allocated first. However, elective
deferral contributions shall be the last contributions reduced before
the welfare benefit fund or individual medical account is reduced.
If some of the Employer's defined contribution plans were not in
existence on July 1, 1982, and some were in existence on that date,
the Maximum Permissible Amount which is based on a dollar amount may
differ for a Limitation Year. The Aggregate Annual Addition for the
Limitation Year in which the dollar limit differs shall not exceed the
lesser of (1) 25% of Compensation as defined in this section, (2)
$45,475, or (3) the greater of $30,000 or the sum of the Annual
Additions for such Limitation Year under all the plan(s) to which the
$45,475 amount applies.
(e) If a Participant is or has been a participant in both defined benefit
and defined contribution plans (including a welfare benefit fund or
individual medical account) ever maintained by the Employer, as
defined in this section, the sum of the Defined Benefit Plan Fraction
and the Defined Contribution Plan Fraction for any Limitation Year
shall not exceed 1.0 (1.4 before the TEFRA Compliance Date).
After all other limitations set out in the plans and funds have been
applied, the following limitations shall apply so that the sum of the
Participant's Defined Benefit Plan Fraction and Defined Contribution
Plan Fraction shall not exceed 1.0 (1.4 before the TEFRA Compliance
Date). The Projected Annual Benefit shall be limited first. If the
Participant's annual benefit(s) equal his Projected Annual Benefit, as
limited, then Annual Additions to the defined contribution plan(s)
shall be limited to the extent needed to reduce the sum to 1.0 (1.4).
First, the voluntary contributions the Participant may make for the
Limitation Year shall be limited. Next, in the case of a profit
sharing plan, any forfeitures allocated to the Participant shall be
reallocated to remaining participants to the extent necessary to
reduce the decimal to 1.0 (1.4). Last, to the extent necessary,
employer contributions for the Limitation Year shall be reallocated or
limited, and any required and optional employee contributions to which
such employer contributions were geared shall be reduced in
proportion.
If, for the Limitation Year, the Participant has an Annual Addition
under more than one defined contribution plan or welfare benefit fund
or individual medical account maintained by the Employer, as defined
in this section, any reduction above shall be made first to the profit
sharing plans, then to all other such plans and welfare benefit plans
and individual medical accounts and, if necessary, by reducing first
those that were most recently allocated. However, elective deferral
contributions shall be the last contributions reduced before the
welfare benefit fund or individual medical account is reduced. The
annual addition to the welfare benefit fund and individual medical
account shall be limited last.
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SECTION 3.04--EXCESS AMOUNTS.
(a) For the purposes of this section, the following terms are defined:
Actual Deferral Percentage means the ratio (expressed as a percentage)
of Elective Deferral Contributions under this Plan on behalf of the
Eligible Participant for the Plan Year to the Eligible Participant's
Compensation for the Plan Year. The Elective Deferral Contributions
used to determine the Actual Deferral Percentage shall include Excess
Elective Deferrals (other than Excess Elective Deferrals of Nonhighly
Compensated Employees that arise solely from Elective Deferral
Contributions made under this Plan or any other plans of the Employer
or a Controlled Group member), but shall exclude Elective Deferral
Contributions that are used in computing the Contribution Percentage
(provided the Average Actual Deferral Percentage test is satisfied
both with and without exclusion of these Elective Deferral
Contributions). Under such rules as the Secretary of the Treasury
shall prescribe in Code Section 401(k)(3)(D), the Employer may elect
to include Qualified Nonelective Contributions and Qualified Matching
Contributions under this Plan in computing the Actual Deferral
Percentage. For an Eligible Participant for whom such Contributions on
his behalf for the Plan Year are zero, the percentage is zero.
Aggregate Limit means the greater of (1) or (2) below:
(1) The sum of
(i) 125 percent of the greater of the Average Actual Deferral
Percentage of the Nonhighly Compensated Employees for the
Plan Year or the Average Contribution Percentage of
Nonhighly Compensated Employees under the Plan subject to
Code Section 401(m) for the Plan Year beginning with or
within the Plan Year of the cash or deferred arrangement and
(ii) the lesser of 200% or two plus the lesser of such Average
Actual Deferral Percentage or Average Contribution
Percentage.
(2) The sum of
(i) 125 percent of the lesser of the Average Actual Deferral
Percentage of the Nonhighly Compensated Employees for the
Plan Year or the Average Contribution Percentage of
Nonhighly Compensated Employees under the Plan subject to
Code Section 401(m) for the Plan Year beginning with or
within the Plan Year of the cash or deferred arrangement and
(ii) the lesser of 200% or two plus the greater of such Average
Actual Deferral Percentage or Average Contribution
Percentage.
Average Actual Deferral Percentage means the average (expressed as a
percentage) of the Actual Deferral Percentages of the Eligible
Participants in a group.
Average Contribution Percentage means the average (expressed as a
percentage) of the Contribution Percentages of the Eligible
Participants in a group.
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<PAGE> 31
Contribution Percentage means the ratio (expressed as a percentage) of
the Eligible Participant's Contribution Percentage Amounts to the
Eligible Participant's Compensation for the Plan Year. For an Eligible
Participant for whom such Contribution Percentage Amounts for the Plan
Year are zero, the percentage is zero.
Contribution Percentage Amounts means the sum of the Participant
Contributions and Matching Contributions (that are not Qualified
Matching Contributions) under this Plan on behalf of the Eligible
Participant for the Plan Year. Such Contribution Percentage Amounts
shall not include Matching Contributions that are forfeited either to
correct Excess Aggregate Contributions or because the Contributions to
which they relate are Excess Elective Deferrals, Excess Contributions
or Excess Aggregate Contributions. Under such rules as the Secretary
of the Treasury shall prescribe in Code Section 401(k)(3)(D), the
Employer may elect to include Qualified Nonelective Contributions and
Qualified Matching Contributions under this Plan which were not used
in computing the Actual Deferral Percentage in computing the
Contribution Percentage. The Employer may also elect to use Elective
Deferral Contributions in computing the Contribution Percentage so
long as the Average Actual Deferral Percentage test is met before the
Elective Deferral Contributions are used in the Average Contribution
Percentage test and continues to be met following the exclusion of
those Elective Deferral Contributions that are used to meet the
Average Contribution Percentage test.
Elective Deferral Contributions means employer contributions made on
behalf of a participant pursuant to an election to defer under any
qualified cash or deferred arrangement as described in Code Section
401(k), any simplified employee pension cash or deferred arrangement
as described in Code Section 402(h)(1)(B), any eligible deferred
compensation plan under Code Section 457, any plan as described under
Code Section 501(c)(18), and any employer contributions made on behalf
of a participant for the purchase of an annuity contract under Code
Section 403(b) pursuant to a salary reduction agreement. Elective
Deferral Contributions shall not include any deferrals properly
distributed as excess Annual Additions.
Eligible Participant means, for purposes of the Actual Deferral
Percentage, any Employee who is eligible to make an Elective Deferral
Contribution, and shall include the following: any Employee who would
be a plan participant if he chose to make required contributions; any
Employee who can make Elective Deferral Contributions but who has
changed the amount of his Elective Deferral Contribution to 0%, or
whose eligibility to make an Elective Deferral Contribution is
suspended because of a loan, distribution or hardship withdrawal; and,
any Employee who is not able to make an Elective Deferral Contribution
because of Code Section 415(c)(1) - Annual Additions limits. The
Actual Deferral Percentage for any such included Employee is zero.
Eligible Participant means, for purposes of the Average Contribution
Percentage, any Employee who is eligible to make a Participant
Contribution or to receive a Matching Contribution, and shall include
the following: any Employee who would be a plan participant if he
chose to make required contributions; any Employee who can make a
Participant Contribution or receive a matching contribution but who
has made an election not to participate in the Plan; and any Employee
who is not able to make a Participant Contribution or receive a
matching contribution because of Code Section 415(c)(1) or 415(e)
limits. The Average Contribution Percentage for any such included
Employee is zero.
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<PAGE> 32
Excess Aggregate Contributions means, with respect to any Plan Year,
the excess of:
(1) The aggregate Contributions taken into account in computing the
numerator of the Contribution Percentage actually made on behalf
of Highly Compensated Employees for such Plan Year, over
(2) The maximum amount of such Contributions permitted by the Average
Contribution Percentage test (determined by reducing
Contributions made on behalf of Highly Compensated Employees in
order of their Contribution Percentages beginning with the
highest of such percentages).
Such determination shall be made after first determining Excess
Elective Deferrals and then determining Excess Contributions.
Excess Contributions means, with respect to any Plan Year, the excess
of:
(1) The aggregate amount of Contributions actually taken into account
in computing the Actual Deferral Percentage of Highly Compensated
Employees for such Plan Year, over
(2) The maximum amount of such Contributions permitted by the Actual
Deferral Percentage test (determined by reducing Contributions
made on behalf of Highly Compensated Employees in order of the
Actual Deferral Percentages, beginning with the highest of such
percentages).
A Participant's Excess Contributions for a Plan Year will be reduced
by the amount of Excess Elective Deferrals, if any, previously
distributed to the Participant for the taxable year ending in that
Plan Year.
Excess Elective Deferrals means those Elective Deferral Contributions
that are includible in a Participant's gross income under Code Section
402(g) to the extent such Participant's Elective Deferral
Contributions for a taxable year exceed the dollar limitation under
such Code section. Excess Elective Deferrals shall be treated as
Annual Additions, as defined in the CONTRIBUTION LIMITATION SECTION of
Article III, under the Plan, unless such amounts are distributed no
later than the first April 15 following the close of the Participant's
taxable year.
Family Member means an Employee, or former employee; the spouse of the
Employee or former employee, and the lineal ascendants or descendants
and the spouses of such lineal ascendants or descendants of any such
Employee or former employee. In determining if an individual is a
family member as to an Employee or former employee, legal adoptions
are taken into account.
Matching Contributions means employer contributions made to this or
any other defined contribution plan, or to a contract described in
Code Section 403(b), on behalf of a participant on account of a
Participant Contribution made by such participant, or on account of a
participant's Elective Deferral Contributions, under a plan maintained
by the employer.
Participant Contributions means contributions made to any plan by or
on behalf of a participant that are included in the participant's
gross income in the year in which made and that are maintained under a
separate account to which earnings and losses are allocated.
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<PAGE> 33
Qualified Matching Contributions means Matching Contributions which
are subject to the distribution and nonforfeitability requirements
under Code Section 401(k) when made.
Qualified Nonelective Contributions means any employer contributions
(other than Matching Contributions) which an employee may not elect to
have paid to him in cash instead of being contributed to the plan and
which are subject to the distribution and nonforfeitability
requirements under Code Section 401(k) when made.
(b) A Participant may assign to this Plan any Excess Elective Deferrals
made during a taxable year by notifying the Plan Administrator in
writing on or before the first following March 1 of the amount of the
Excess Elective Deferrals to be assigned to the Plan. A Participant is
deemed to notify the Plan Administrator of any Excess Elective
Deferrals that arise by taking into account only those Elective
Deferral Contributions made to this Plan and any other plans of the
Employer or a Controlled Group member and reducing such Excess
Elective Deferrals by the amount of Excess Contributions, if any,
previously distributed for the Plan Year beginning in that taxable
year. The Participant's claim for Excess Elective Deferrals shall be
accompanied by the Participant's written statement that if such
amounts are not distributed, such Excess Elective Deferrals, when
added to amounts deferred under other plans or arrangements described
in Code Sections 401(k), 408(k) or 403(b), will exceed the limit
imposed on the Participant by Code Section 402(g) for the year in
which the deferral occurred. The Excess Elective Deferrals assigned to
this Plan can not exceed the Elective Deferral Contributions allocated
under this Plan for such taxable year.
Notwithstanding any other provisions of the Plan, Elective Deferral
Contributions in an amount equal to the Excess Elective Deferrals
assigned to this Plan, plus any income and minus any loss allocable
thereto, shall be distributed no later than April 15 to any
Participant to whose Account Excess Elective Deferrals were assigned
for the preceding year and who claims Excess Elective Deferrals for
such taxable year.
The income or loss allocable to such Excess Elective Deferrals shall
be equal to the income or loss allocable to the Participant's Elective
Deferral Contributions for the taxable year in which the excess
occurred multiplied by a fraction. The numerator of the fraction is
the Excess Elective Deferrals. The denominator of the fraction is the
closing balance without regard to any income or loss occurring during
such taxable year (as of the end of such taxable year) of the
Participant's Account resulting from Elective Deferral Contributions.
Any Matching Contributions which were based on the Elective Deferral
Contributions which are distributed as Excess Elective Deferrals, plus
any income and minus any loss allocable thereto, shall be forfeited.
These Forfeitures shall be used to offset the earliest Employer
Contribution due after the Forfeiture arises.
(c) As of the end of each Plan Year after Excess Elective Deferrals have
been determined, one of the following tests must be met:
(1) The Average Actual Deferral Percentage for Eligible Participants
who are Highly Compensated Employees for the Plan Year is not
more than the Average Actual Deferral Percentage for Eligible
Participants who are Nonhighly Compensated Employees for the Plan
Year multiplied by 1.25.
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(2) The Average Actual Deferral Percentage for Eligible Participants
who are Highly Compensated Employees for the Plan Year is not
more than the Average Actual Deferral Percentage for Eligible
Participants who are Nonhighly Compensated Employees for the Plan
Year multiplied by 2 and the difference between the Average
Actual Deferral Percentages is
not more than 2.
The Actual Deferral Percentage for any Eligible Participant who is a
Highly Compensated Employee for the Plan Year and who is eligible to
have Elective Deferral Contributions (and Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, if used in
computing the Actual Deferral Percentage) allocated to his account
under two or more plans or arrangements described in Code Section
401(k) that are maintained by the Employer or a Controlled Group
member shall be determined as if all such Elective Deferral
Contributions (and, if applicable, such Qualified Nonelective
Contributions or Qualified Matching Contributions, or both) were made
under a single arrangement. If a Highly Compensated Employee
participates in two or more cash or deferred arrangements that have
different Plan Years, all cash or deferred arrangements ending with or
within the same calendar year shall be treated as a single
arrangement. Notwithstanding the foregoing, certain plans shall be
treated as separate if mandatorily disaggregated under the regulations
under Code Section 401(k) or permissibly disaggregated as provided.
In the event that this Plan satisfies the requirements of Code
Sections 401(k), 401(a)(4), or 410(b) only if aggregated with one or
more other plans, or if one or more other plans satisfy the
requirements of such Code sections only if aggregated with this Plan,
then this section shall be applied by determining the Actual Deferral
Percentage of employees as if all such plans were a single plan. Plans
may be aggregated in order to satisfy Code Section 401(k) only if they
have the same Plan Year.
For purposes of determining the Actual Deferral Percentage of an
Eligible Participant who is a five-percent owner or one of the ten
most highly-paid Highly Compensated Employees, the Elective Deferral
Contributions (and Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, if used in computing the Actual
Deferral Percentage) and Compensation of such Eligible Participant
include the Elective Deferral Contributions (and, if applicable,
Qualified Nonelective Contributions or Qualified Matching
Contributions, or both) and Compensation for the Plan Year of Family
Members. Family Members, with respect to such Highly Compensated
Employees, shall be disregarded as separate employees in determining
the Actual Deferral Percentage both for Participants who are Nonhighly
Compensated Employees and for Participants who are Highly Compensated
Employees.
For purposes of determining the Actual Deferral Percentage, Elective
Deferral Contributions, Qualified Nonelective Contributions and
Qualified Matching Contributions must be made before the last day of
the 12-month period immediately following the Plan Year to which
contributions relate.
The Employer shall maintain records sufficient to demonstrate
satisfaction of the Average Actual Deferral Percentage test and the
amount of Qualified Nonelective Contributions or Qualified Matching
Contributions, or both, used in such test.
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The determination and treatment of the Contributions used in computing
the Actual Deferral Percentage shall satisfy such other requirements
as may be prescribed by the Secretary of the Treasury.
If the Plan Administrator should determine during the Plan Year that
neither of the above tests is being met, the Plan Administrator may
adjust the amount of future Elective Deferral Contributions of the
Highly Compensated Employees.
Notwithstanding any other provisions of this Plan, Excess
Contributions, plus any income and minus any loss allocable thereto,
shall be distributed no later than the last day of each Plan Year to
Participants to whose Accounts such Excess Contributions were
allocated for the preceding Plan Year. If such excess amounts are
distributed more than 2 1/2 months after the last day of the Plan Year
in which such excess amounts arose, a ten (10) percent excise tax will
be imposed on the employer maintaining the plan with respect to such
amounts. Such distributions shall be made beginning with the Highly
Compensated Employee(s) who has the greatest Actual Deferral
Percentage, reducing his Actual Deferral Percentage to the next
highest Actual Deferral Percentage level. Then, if necessary, reducing
the Actual Deferral Percentage of the Highly Compensated Employees at
the next highest level, and continuing in this manner until the
average Actual Deferral Percentage of the Highly Compensated Group
satisfies the Actual Deferral Percentage test. Excess Contributions of
Participants who are subject to the family member aggregation rules
shall be allocated among the Family Members in proportion to the
Elective Deferral Contributions (and amounts treated as Elective
Deferral Contributions) of each Family Member that is combined to
determine the combined Actual Deferral Percentage.
Excess Contributions shall be treated as Annual Additions, as defined
in the CONTRIBUTION LIMITATION SECTION of Article III, under the Plan.
The Excess Contributions shall be adjusted for income or loss. The
income or loss allocable to such Excess Contributions shall be equal
to the income or loss allocable to the Participant's Elective Deferral
Contributions (and, if applicable, Qualified Nonelective Contributions
or Qualified Matching Contributions, or both) for the Plan Year in
which the excess occurred multiplied by a fraction. The numerator of
the fraction is the Excess Contributions. The denominator of the
fraction is the closing balance without regard to any income or loss
occurring during such Plan Year (as of the end of such Plan Year) of
the Participant's Account resulting from Elective Deferral
Contributions (and Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, if used in computing the Actual
Deferral Percentage).
Excess Contributions shall be distributed from the Participant's
Account resulting first from Elective Deferral Contributions not the
basis for Matching Contributions, then if necessary, from Elective
Deferral Contributions which are the basis for Matching Contributions.
If such Excess Contributions exceed the balance in the Participant's
Account resulting from Elective Deferral Contributions, the balance
shall be distributed from the Participant's Account resulting from
Qualified Matching Contributions (if applicable) and Qualified
Nonelective Contributions, respectively.
Any Matching Contributions which were based on the Elective Deferral
Contributions which are distributed as Excess Contributions, plus any
income and minus any loss allocable thereto, shall be
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<PAGE> 36
forfeited. These Forfeitures shall be used to offset the earliest
Employer Contribution due after the Forfeiture arises.
(d) As of the end of each Plan Year, one of the following tests must be
met:
(1) The Average Contribution Percentage for Eligible Participants who
are Highly Compensated Employees for the Plan Year is not more
than the Average Contribution Percentage for Eligible
Participants who are Nonhighly Compensated Employees for the Plan
Year multiplied by 1.25.
(2) The Average Contribution Percentage for Eligible Participants who
are Highly Compensated Employees for the Plan Year is not more
than the Average Contribution Percentage for Eligible
Participants who are Nonhighly Compensated Employees for the Plan
Year multiplied by 2 and the difference between the Average
Contribution Percentages is not
more than 2.
If one or more Highly Compensated Employees participate in both a cash
or deferred arrangement and a plan subject to the Average Contribution
Percentage test maintained by the Employer or a Controlled Group
member and the sum of the Average Actual Deferral Percentage and
Average Contribution Percentage of those Highly Compensated Employees
subject to either or both tests exceeds the Aggregate Limit, then the
Contribution Percentage of those Highly Compensated Employees who also
participate in a cash or deferred arrangement will be reduced
(beginning with such Highly Compensated Employees whose Contribution
Percentage is the highest) so that the limit is not exceeded. The
amount by which each Highly Compensated Employee's Contribution
Percentage is reduced shall be treated as an Excess Aggregate
Contribution. The Average Actual Deferral Percentage and Average
Contribution Percentage of the Highly Compensated Employees are
determined after any corrections required to meet the Average Actual
Deferral Percentage and Average Contribution Percentage tests.
Multiple use does not occur if either the Average Actual Deferral
Percentage or Average Contribution Percentage of the Highly
Compensated Employees does not exceed 1.25 multiplied by the Average
Actual Deferral Percentage and Average Contribution Percentage of the
Nonhighly Compensated Employees.
The Contribution Percentage for any Eligible Participant who is a
Highly Compensated Employee for the Plan Year and who is eligible to
have Contribution Percentage Amounts allocated to his account under
two or more plans described in Code Section 401(a) or arrangements
described in Code Section 401(k) that are maintained by the Employer
or a Controlled Group member shall be determined as if the total of
such Contribution Percentage Amounts was made under each plan. If a
Highly Compensated Employee participates in two or more cash or
deferred arrangements that have different Plan Years, all cash or
deferred arrangements ending with or within the same calendar year
shall be treated as a single arrangement. Notwithstanding the
foregoing, certain plans shall be treated as separate if mandatorily
disaggregated under the regulations under Code Section 401(m) or
permissibly disaggregated as provided.
In the event that this Plan satisfies the requirements of Code
Sections 401(m), 401(a)(4), or 410(b) only if aggregated with one or
more other plans, or if one or more other plans satisfy the
requirements of Code sections only if aggregated with this Plan, then
this section shall be applied by determining the Contribution
Percentages of Eligible Participants as if all such plans were a
single plan. Plans may be aggregated in order to satisfy Code Section
401(m) only if they have the same Plan Year.
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For purposes of determining the Contribution Percentage of an Eligible
Participant who is a five-percent owner or one of the ten most
highly-paid Highly Compensated Employees, the Contribution Percentage
Amounts and Compensation of such Participant shall include
Contribution Percentage Amounts and Compensation for the Plan Year of
Family Members. Family Members, with respect to Highly Compensated
Employees, shall be disregarded as separate employees in determining
the Contribution Percentage both for employees who are Nonhighly
Compensated Employees and for employees who are Highly Compensated
Employees.
For purposes of determining the Contribution Percentage, Participant
Contributions are considered to have been made in the Plan Year in
which contributed to the Plan. Matching Contributions and Qualified
Nonelective Contributions will be considered made for a Plan Year if
made no later than the end of the 12-month period beginning on the day
after the close of the Plan Year.
The Employer shall maintain records sufficient to demonstrate
satisfaction of the Average Contribution Percentage test and the
amount of Qualified Nonelective Contributions or Qualified Matching
Contributions, or both, used in such test.
The determination and treatment of the Contribution Percentage of any
Participant shall satisfy such other requirements as may be prescribed
by the Secretary of the Treasury.
Notwithstanding any other provisions of this Plan, Excess Aggregate
Contributions, plus any income and minus any loss allocable thereto,
shall be forfeited, if not vested, or distributed, if vested, no later
than the last day of each Plan Year to Participants to whose Accounts
such Excess Aggregate Contributions were allocated for the preceding
Plan Year. If such Excess Aggregate Contributions are distributed more
than 2 1/2 months after the last day of the Plan Year in which such
excess amounts arose, a ten (10) percent excise tax will be imposed on
the employer maintaining the plan with respect to those amounts.
Excess Aggregate Contributions will be distributed beginning with the
Highly Compensated Employee(s) who has the greatest Contribution
Percentage, reducing his contribution percentage to the next highest
level. Then, if necessary, reducing the Contribution Percentage of the
Highly Compensated Employee at the next highest level, and continuing
in this manner until the Actual Contribution Percentage of the Highly
Compensated Group satisfies the Actual Contribution Percentage Test.
Excess Aggregate Contributions of Participants who are subject to the
family member aggregation rules shall be allocated among the Family
Members in proportion to the Employee and Matching Contributions (or
amounts treated as Matching Contributions) of each Family Member that
is combined to determine the combined Contribution Percentage. Excess
Aggregate Contributions shall be treated as Annual Additions, as
defined in the CONTRIBUTION LIMITATION SECTION of Article III, under
the Plan.
The Excess Aggregate Contributions shall be adjusted for income or
loss. The income or loss allocable to such Excess Aggregate
Contributions shall be equal to the income or loss allocable to the
Participant's Contribution Percentage Amounts for the Plan Year in
which the excess occurred multiplied by a fraction. The numerator of
the fraction is the Excess Aggregate Contributions. The denominator of
the fraction is the closing balance without regard to any income or
loss occurring during such Plan Year (as of the end of such Plan Year)
of the Participant's Account resulting from Contribution Percentage
Amounts.
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Excess Aggregate Contributions shall be distributed from the
Participant's Account resulting from Participant Contributions that
are not required as a condition of employment or participation or for
obtaining additional benefits from Employer Contributions. If such
Excess Aggregate Contributions exceed the balance in the Participant's
Account resulting from such Participant Contributions, the balance
shall be forfeited, if not vested, or distributed, if vested, on a
pro-rata basis from the Participant's Account resulting from
Contribution Percentage Amounts. These Forfeitures shall be used to
offset the earliest Employer Contribution due after the Forfeiture
arises.
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ARTICLE IV
INVESTMENT OF CONTRIBUTIONS
SECTION 4.01--INVESTMENT OF CONTRIBUTIONS.
All Contributions are forwarded by the Employer to the Trustee to be
deposited in the Trust Fund.
Investment of Contributions is governed by the provisions of the Trust, the
Group Contract and any other funding arrangement in which the Trust Fund is or
may be invested. To the extent permitted by the Trust, Group Contract or other
funding arrangement, the parties named below shall direct the Contributions to
any of the accounts available under the Trust or Group Contract and may request
the transfer of assets resulting from those Contributions between such accounts.
A Participant may not direct the Trustee to invest the Participant's Account in
collectibles. Collectibles means any work of art, rug or antique, metal or gem,
stamp or coin, alcoholic beverage or other tangible personal property specified
by the Secretary of Treasury. To the extent that a Participant does not direct
the investment of his Account, such Account shall be invested ratably in the
accounts available under the Trust or Group Contract in the same manner as the
undirected Accounts of all other Participants. The Vested Accounts of all
Inactive Participants may be segregated and invested separately from the
Accounts of all other Participants.
The Trust Fund shall be valued at current fair market value as of the last
day of the last calendar month ending in the Plan Year and, at the discretion of
the Trustee, may be valued more frequently. The valuation shall take into
consideration investment earnings credited, expenses charged, payments made and
changes in the value of the assets held in the Trust Fund. The Account of a
Participant shall be credited with its share of the gains and losses of the
Trust Fund. That part of a Participant's Account invested in a funding
arrangement which establishes an account or accounts for such Participant
thereunder shall be credited with the gain or loss from such account or
accounts. That part of a Participant's Account which is invested in other
funding arrangements shall be credited with a proportionate share of the gain or
loss of such investments. The share shall be determined by multiplying the gain
or loss of the investment by the ratio of the part of the Participant's Account
invested in such funding arrangement to the total of the Trust Fund invested in
such funding arrangement.
At least annually, the Named Fiduciary shall review all pertinent Employee
information and Plan data in order to establish the funding policy of the Plan
and to determine appropriate methods of carrying out the Plan's objectives. The
Named Fiduciary shall inform the Trustee and any Investment Manager of the
Plan's short-term and long-term financial needs so the investment policy can be
coordinated with the Plan's financial requirements.
(a) Employer Contributions other than Elective Deferral Contributions: The
Participant shall direct the investment of such Employer Contributions
and transfer of assets resulting from those Contributions.
(b) Elective Deferral Contributions: The Participant shall direct the
investment of Elective Deferral Contributions and transfer of assets
resulting from those Contributions.
(c) Rollover Contributions: The Participant shall direct the investment of
Rollover Contributions and transfer of assets resulting from those
Contributions.
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However, the Named Fiduciary may delegate to the Investment Manager
investment discretion for Contributions and Plan assets which are not subject to
Participant direction.
SECTION 4.01A--INVESTMENT IN QUALIFYING EMPLOYER SECURITIES.
Participants in the Plan shall be entitled to invest all or any portion of
their Account in Qualifying Employer Securities provided that the total amount
that the Participant may invest in Qualifying Employer Securities shall not
exceed 25% of the value of his total Account at the time the investment
direction is given.
Once investment in Qualifying Employer Securities is made available to
Eligible Employees, then it shall continue to be available unless the Plan and
Trust is amended to disallow such available investment. In the absence of such
election, such Eligible Employee shall be deemed to have elected to have their
Accounts invested wholly in the Investment Funds. Once an election is made, it
shall be considered to continue until a new election is made.
Any dividends payable on the Qualifying Employer Securities shall be
invested according to the Participant's current investment election.
If the securities of the Employer are not publicly traded and if no market
or an extremely thin market exists for the Qualifying Employer Securities, so
that a reasonable valuation may not be obtained from the market place, then such
Qualifying Employer Securities must be valued at least annually by an
independent appraiser who is not associated with the Employer, the Plan
Administrator, the Trustee, or any person related to any fiduciary under the
Plan. The independent appraiser may be associated with a person who is merely a
contract administrator with respect to the Plan, but who exercises no
discretionary authority and is not a Plan fiduciary.
If there is a public market for Qualifying Employer Securities of the type
held by the Plan, then the Plan Administrator may use as the value of the shares
the price at which such shares traded in such market, or an average of the bid
and asked prices for such shares in such market, provided that such value is
representative of the fair market value of such shares in the opinion of the
Plan Administrator. If the Qualifying Employer Securities do not trade on the
annual valuation date or if the market is very thin on such date, then the Plan
Administrator may use the average of trade prices for a period of time ending on
such date, provided that such value is representative of the fair market value
of such shares in the opinion of the Plan Administrator. The value of a
Participant's Qualifying Employer Securities Account may be expressed in units.
For purposes of determining the annual valuation of the Plan and for
reporting to Participants and regulatory authorities, the assets of the Plan
shall be valued at least annually on the Valuation Date which corresponds to the
last day of the Plan Year. The fair market value of Qualifying Employer
Securities shall be determined on such a Valuation Date. The average of the bid
and asked prices of Qualifying Employer Securities as of the date of the
transaction shall apply for purposes of valuing distributions and other
transactions of the Plan to the extent such value is representative of the fair
market value of such shares in the opinion of the Plan Administrator.
All purchases of Qualifying Employer Securities shall be made at a price,
or prices, which, in the judgment of the Plan Administrator, do not exceed the
fair market value of such Qualifying Employer Securities.
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In the event that the Trustee requires shares of Qualifying Employer
Securities by purchase from a "disqualified person" as defined in Code Section
4975(e)(2), in exchange for cash or other assets of the Trust, the terms of such
purchase shall contain the provision that in the event that there is a final
determination by the Internal Revenue Service or court of competent jurisdiction
that the fair market value of such shares of Qualifying Employer Securities as
of the date of purchase was less than the purchase price paid by the Trustee,
then the seller shall pay or transfer, as the case may be, to the Trustee an
amount of cash, shares of Qualifying Employer Securities, or any combination
thereof equal in value to the difference between the purchase price and said
fair market value for all such shares. In the event that cash and/or shares of
Qualifying Employer Securities are paid and/or transferred to the Trustee under
this provision, shares of Qualifying Employer Securities shall be valued at
their fair market value as of the date of said purchase, and interest at a
reasonable rate from the date of purchase to the date of payment shall be paid
by the seller on the amount of cash paid.
The Plan Administrator may direct the Trustee to sell, resell or otherwise
dispose of Qualifying Employer Securities to any person, including the Employer,
provided that any such sales to any disqualified person, including the Employer,
will be made at not less than the fair market value and no commission is
charged. Any such sale shall be made in conformance with Section 408(e) of
ERISA.
In the event the Plan Administrator directs the Trustee to dispose of any
Qualifying Employer Securities held as Trust Assets under circumstances which
require registration and/or qualification of the securities under applicable
Federal or state securities laws, then the Employer, at its own expense, will
take or cause to be taken any and all such action as may be necessary or
appropriate to effect such registration and/or qualification.
SECTION 4.01B--LIMITATION ON INVESTMENT IN QUALIFYING EMPLOYER SECURITIES
BY SOME PARTICIPANTS.
Participants who are directors, officers, 10% stockholders of the Employer,
and other persons subject to Section 16 of the Securities Exchange Act of 1934
(the "1934 Act") will be permitted to change the level of investment in the
Qualifying Employer Securities Account only once every six months. Additionally,
Participants who are directors, officers, 10% stockholders of the Employer, and
other persons subject to Section 16 of the 1934 Act who cease participation in
the Qualifying Employer Securities Account, or who reduce their participation in
such account to a nominal level, may not participate (e.g., direct that
investments be made on their behalf) under the Qualifying Employer Securities
Account again for at least six months. Intra-plan transfers by such Participants
between the Qualifying Employer Securities Account and the other investment
accounts available under the Plan may only be made pursuant to an investment
election made during the period beginning on the third business day following
the date of release of annual or quarterly financial information by the Employer
and ending on the twelfth business day following such date. Subject to certain
limited exceptions, Participants who are directors, officers, 10% stockholders
of the Employer, and other persons subject to Section 16 of the 1934 Act making
withdrawals of investments under the Qualifying Employer Securities Account must
cease further purchases/investment under the Qualifying Employer Securities
Account for six months.
With respect to Participants who are directors, officers, 10% stockholders
of the Employer, and other persons subject to the 1934 Act, transactions under
this Plan are intended to comply with all applicable conditions of Rule 16b-3 or
its successors under the 1934 Act. To the extent any provisions of the Plan or
action by the Plan Administrator fails to so comply, it shall be deemed null and
void, to the extent permitted by law and deemed advisable by the Plan
Administrator.
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ARTICLE V
BENEFITS
SECTION 5.01--RETIREMENT BENEFITS.
On a Participant's Retirement Date, his Vested Account shall be distributed
to him according to the distribution of benefits provisions of Article VI and
the provisions of the SMALL AMOUNTS SECTION of Article IX.
SECTION 5.02--DEATH BENEFITS.
If a Participant dies before his Annuity Starting Date, his Vested Account
shall be distributed according to the distribution of benefits provisions of
Article VI and the provisions of the SMALL AMOUNTS SECTION of Article IX.
SECTION 5.03--VESTED BENEFITS.
A Participant may receive a distribution of his Vested Account at any time
after he ceases to be an Employee, provided he has not again become an Employee.
If such amount is not payable under the provisions of the SMALL AMOUNTS SECTION
of Article IX, it will be distributed only if the Participant so elects. The
Participant's election shall be subject to the requirements in the ELECTION
PROCEDURES SECTION of Article VI for a qualified election of a retirement
benefit.
If a Participant does not receive an earlier distribution according to the
provisions of this section or the SMALL AMOUNTS SECTION of Article IX, upon his
Retirement Date or death, his Vested Account shall be applied according to the
provisions of the RETIREMENT BENEFITS SECTION or the DEATH BENEFITS SECTION of
Article V.
The Nonvested Account of a Participant who has ceased to be an Employee
shall remain a part of his Account until it becomes a Forfeiture; provided,
however, if the Participant again becomes an Employee so that his Vesting
Percentage can increase, the Nonvested Account may become a part of his Vested
Account.
SECTION 5.04--WHEN BENEFITS START.
Benefits under the Plan begin when a Participant retires, dies or ceases to
be an Employee, whichever applies, as provided in the preceding sections of this
article. Benefits which begin before Normal Retirement Date for a Participant
who became Totally and Permanently Disabled when he was an Employee shall be
deemed to begin because he is Totally and Permanently Disabled. The start of
benefits is subject to the qualified election procedures of Article VI.
Unless otherwise elected, benefits shall begin before the sixtieth day
following the close of the Plan Year in which the latest date below occurs:
(a) The date the Participant attains age 65 (Normal Retirement Age, if
earlier).
(b) The tenth anniversary of the Participant's Entry Date.
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<PAGE> 43
(c) The date the Participant ceases to be an Employee.
Notwithstanding the foregoing, the failure of a Participant and spouse to
consent to a distribution while a benefit is immediately distributable, within
the meaning of the ELECTION PROCEDURES SECTION of Article VI, shall be deemed to
be an election to defer commencement of payment of any benefit sufficient to
satisfy this section.
The Participant may elect to have his benefits begin after the latest date
for beginning benefits described above, subject to the provisions of this
section. The Participant shall make the election in writing and deliver the
signed statement of election to the Plan Administrator before Normal Retirement
Date or the date he ceases to be an Employee, if later. The election must
describe the form of distribution and the date the benefits will begin. The
Participant shall not elect a date for beginning benefits or a form of
distribution that would result in a benefit payable when he dies which would be
more than incidental within the meaning of governmental regulations.
Benefits shall begin by the Participant's Required Beginning Date, as
defined in the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION REQUIREMENTS
SECTION of Article VI.
Contributions which are used to compute the Actual Deferral Percentage, as
defined in the EXCESS AMOUNTS SECTION of Article III, may be distributed upon
disposition by the Employer of substantially all of the assets (within the
meaning of Code Section 409(d)(2)) used by the Employer in a trade or business
or disposition by the Employer of the Employer's interest in a subsidiary
(within the meaning of Code Section 409(d)(3)) if the transferee corporation is
not a Controlled Group member, the Employee continues employment with the
transferee corporation and the transferor corporation continues to maintain the
Plan. Such distributions made after March 31, 1988, must be made in a single
sum.
SECTION 5.05--WITHDRAWAL PRIVILEGES.
A Participant may withdraw all or any portion of his Vested Account which
results from the following Contributions
Elective Deferral Contributions
Matching Contributions
Rollover Contributions
in the event of hardship due to an immediate and heavy financial need.
Withdrawals from the Participant's Account resulting from Elective Deferral
Contributions shall be limited to the amount of the Participant's Elective
Deferral Contributions. Immediate and heavy financial need shall be limited to:
(i) expenses incurred or necessary for medical care, described in Code Section
213(d), of the Participant, the Participant's spouse, or any dependents of the
Participant (as defined in Code Section 152); (ii) purchase (excluding mortgage
payments) of a principal residence for the Participant; (iii) payment of tuition
and related educational fees and the payment of room and board expenses for the
next 12 months of post-secondary education for the Participant, his spouse,
children or dependents; (iv) the need to prevent the eviction of the Participant
from his principal residence or foreclosure on the mortgage of the Participant's
principal residence; or (v) any other distribution which is deemed by the
Commissioner of Internal Revenue to be made on account of immediate and heavy
financial need as provided in Treasury regulations. The Participant's request
for a withdrawal shall include his written statement that an immediate and heavy
financial need exists and explain its nature.
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No withdrawal shall be allowed which is not necessary to satisfy such
immediate and heavy financial need. Such withdrawal shall be deemed necessary
only if all of the following requirements are met: (i) the distribution is not
in excess of the amount of the immediate and heavy financial need of the
Participant (including amounts necessary to pay any Federal, state or local
income taxes or penalties reasonably anticipated to result from the
distribution); (ii) the Participant has obtained all distributions, other than
hardship distributions, and all nontaxable loans currently available under all
plans maintained by the Employer; (iii) the Plan, and all other plans maintained
by the Employer, provide that the Participant's elective contributions and
employee contributions will be suspended for at least 12 months after receipt of
the hardship distribution; and (iv) the Plan, and all other plans maintained by
the Employer, provide that the Participant may not make elective contributions
for the Participant's taxable year immediately following the taxable year of the
hardship distribution in excess of the applicable limit under Code Section
402(g) for such next taxable year less the amount of such Participant's elective
contributions for the taxable year of the hardship distribution. The Plan will
suspend elective contributions and employee contributions for 12 months and
limit elective deferrals as provided in the preceding sentence. A Participant
shall not cease to be an Eligible Participant, as defined in the EXCESS AMOUNTS
SECTION of Article III, merely because his elective contributions or employee
contributions are suspended.
A request for withdrawal shall be in writing on a form furnished for that
purpose and delivered to the Plan Administrator before the withdrawal is to
occur. The Participant's request shall be subject to the requirements in the
ELECTION PROCEDURES SECTION of Article VI for a qualified election of a
retirement benefit payable in a form other than a Qualified Joint and Survivor
Form.
A forfeiture shall not occur solely as a result of a withdrawal.
SECTION 5.06--LOANS TO PARTICIPANTS.
Loans shall be made available to all Participants on a reasonably
equivalent basis. For purposes of this section, Participant means any
Participant or Beneficiary who is a party-in-interest, within the meaning of
Section 3(14) of the Employee Retirement Income Security Act of 1974 (ERISA).
Loans shall not be made to highly compensated employees, as defined in Code
Section 414(q), in an amount greater than the amount made available to other
Participants.
No loans will be made to any shareholder-employee or owner-employee. For
purposes of this requirement, a shareholder-employee means an employee or
officer of an electing small business (Subchapter S) corporation who owns (or is
considered as owning within the meaning of Code Section 318(a)(1)), on any day
during the taxable year of such corporation, more than 5% of the outstanding
stock of the corporation.
A loan to a Participant shall be a Participant-directed investment of his
Account. No Account other than the borrowing Participant's Account shall share
in the interest paid on the loan or bear any expense or loss incurred because of
the loan. Loans shall be made on a pro rata basis from the Participant's Vested
Account, however, the portion invested in Qualifying Employer Securities shall
be redeemed only when needed.
The number of outstanding loans shall be limited to one. No more than two
loans will be approved for any Participant in any 12-month period. The minimum
amount of any loan shall be $1,000.
Loans must be adequately secured and bear a reasonable rate of interest.
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The amount of the loan shall not exceed the maximum amount that may be
treated as a loan under Code Section 72(p) (rather than a distribution) to the
Participant and shall be equal to the lesser of (a) or (b) below:
(a) $50,000 reduced by the highest outstanding loan balance of loans
during the one-year period ending on the day before the new loan is
made.
(b) The greater of (1) or (2), reduced by (3) below:
(1) One-half of the Participant's Vested Account.
(2) $10,000.
(3) Any outstanding loan balance on the date the new loan is made.
For purposes of this maximum, a Participant's Vested Account does not include
any accumulated deductible employee contributions, as defined in Code Section
72(o)(5)(B), and all qualified employer plans, as defined in Code Section
72(p)(4), of the Employer and any Controlled Group member shall be treated as
one plan.
The foregoing notwithstanding, the amount of such loan shall not exceed 50%
of the amount of the Participant's Vested Account. For purposes of this maximum,
a Participant's Vested Account does not include any accumulated deductible
employee contributions, as defined in Code Section 72(o)(5)(B). No collateral
other than a portion of the Participant's Vested Account (as limited above)
shall be accepted. The Loan Administrator shall determine if the collateral is
adequate for the amount of the loan requested.
A Participant must obtain the consent of the Participant's spouse, if any,
to the use of the Vested Account as security for the loan. Spousal consent shall
be obtained no earlier than the beginning of the 90-day period that ends on the
date on which the loan to be so secured is made. The consent must be in writing,
must acknowledge the effect of the loan, and must be witnessed by a plan
representative or a notary public. Such consent shall thereafter be binding with
respect to the consenting spouse or any subsequent spouse with respect to that
loan. A new consent shall be required if the Vested Account is used for
collateral upon renegotiation, extension, renewal, or other revision of the
loan.
If a valid spousal consent has been obtained in accordance with the above,
then, notwithstanding any other provision of this Plan, the portion of the
Participant's Vested Account used as a security interest held by the Plan by
reason of a loan outstanding to the Participant shall be taken into account for
purposes of determining the amount of the Vested Account payable at the time of
death or distribution, but only if the reduction is used as repayment of the
loan. If less than 100% of the Participant's Vested Account (determined without
regard to the preceding sentence) is payable to the surviving spouse, then the
Vested Account shall be adjusted by first reducing the Vested Account by the
amount of the security used as repayment of the loan, and then determining the
benefit payable to the surviving spouse.
Each loan shall bear a reasonable fixed rate of interest to be determined
by the Loan Administrator. In determining the interest rate, the Loan
Administrator shall take into consideration fixed interest rates currently being
charged by commercial lenders for loans of comparable risk on similar terms and
for similar durations, so that the interest will provide for a return
commensurate with rates currently charged by commercial lenders for loans made
under similar circumstances. The Loan Administrator shall not discriminate among
Participants in the matter of interest rates; but loans granted at different
times may bear different interest rates in accordance with the current
appropriate standards.
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The loan shall by its terms require that repayment (principal and interest)
be amortized in level payments, not less frequently than quarterly, over a
period not extending beyond five years from the date of the loan. The period of
repayment for any loan shall be arrived at by mutual agreement between the Loan
Administrator and the Participant.
The Participant shall make a written application for a loan from the Plan
on forms provided by the Loan Administrator. The application must specify the
amount and duration requested. No loan will be approved unless the Participant
is creditworthy. The Participant must grant authority to the Loan Administrator
to investigate the Participant's creditworthiness so that the loan application
may be properly considered.
Information contained in the application for the loan concerning the
income, liabilities, and assets of the Participant will be evaluated to
determine whether there is a reasonable expectation that the Participant will be
able to satisfy payments on the loan as due. Additionally, the Loan
Administrator will pursue any appropriate further investigations concerning the
creditworthiness and/or credit history of the Participant to determine whether a
loan should be approved.
Each loan shall be fully documented in the form of a promissory note signed
by the Participant for the face amount of the loan, together with interest
determined as specified above.
There will be an assignment of collateral to the Plan executed at the time
the loan is made.
In those cases where repayment through payroll deduction by the Employer is
available, installments are so payable, and a payroll deduction agreement will
be executed by the Participant at the time of making the loan.
Where payroll deduction is not available, payments are to be timely made.
Any payment that is not by payroll deduction shall be made payable to the
Employer or Trustee, as specified in the promissory note, and delivered to the
Loan Administrator, including prepayments, service fees and penalties, if any,
and other amounts due under the note.
The promissory note may provide for reasonable late payment penalties
and/or service fees. Any penalties or service fees shall be applied to all
Participants in a nondiscriminatory manner. If the promissory note so provides,
such amounts may be assessed and collected from the Account of the Participant
as part of the loan balance.
Each loan may be paid prior to maturity, in part or in full, without
penalty or service fee, except as may be set out in the promissory note.
If any amount remains unpaid for more than 31 days after due, a default is
deemed to occur.
Upon default, the Plan has the right to pursue any remedy available by law
to satisfy the amount due, along with accrued interest, including the right to
enforce its claim against the security pledged and execute upon the collateral
as allowed by law.
If any payment of principal or interest or any other amount due under the
promissory note, or any portion thereof, is not made for a period of 90 days
after due, the entire principal balance whether or not otherwise
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then due, shall become immediately due and payable without demand or notice, and
subject to collection or satisfaction by any lawful means, including
specifically but not limited to the right to enforce the claim against the
security pledged and to execute upon the collateral as allowed by law.
In the event of default, foreclosure on the note and attachment of security
or use of amounts pledged to satisfy the amount then due, will not occur until a
distributable event occurs in accordance with the Plan, and will not occur to an
extent greater than the amount then available upon any distributable event which
has occurred under the Plan.
All reasonable costs and expenses, including but not limited to attorney's
fees, incurred by the Plan in connection with any default or in any proceeding
to enforce any provision of a promissory note or instrument by which a
promissory note for a Participant loan is secured, shall be assessed and
collected from the Account of the Participant as part of the loan balance.
If payroll deduction is being utilized, in the event that a Participant's
available payroll deduction amounts in any given month are insufficient to
satisfy the total amount due, there will be an increase in the amount taken
subsequently, sufficient to make up the amount that is then due. If the
subsequent deduction is also insufficient to satisfy the amount due within 31
days, a default is deemed to occur as above. If any amount remains past due more
than 90 days, the entire principal amount, whether or not otherwise then due,
along with interest then accrued and any other amount then due under the
promissory note, shall become due and payable, as above.
If the Participant ceases to be a party-in-interest (as defined in this
section) the balance of the outstanding loan becomes due and payable, and the
Participant's Vested Account will be used as available for distribution(s) to
pay the outstanding loan. The Participant's Vested Account will not be used to
pay any amount due under the outstanding loan before the date which is 31 days
after the date he ceased to be an Employee, and the Participant may elect to
repay the outstanding loan with interest on the day of repayment. If no
distributable event has occurred under the Plan at the time that the
Participant's Vested Account would otherwise be used under this provision to pay
any amount due under the outstanding loan, this will not occur until the time,
or in excess of the extent to which, a distributable event occurs under the
Plan.
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ARTICLE VI
DISTRIBUTION OF BENEFITS
SECTION 6.01--AUTOMATIC FORMS OF DISTRIBUTION.
Unless a qualified election of an optional form of benefit has been made
within the election period (see the ELECTION PROCEDURES SECTION of Article VI),
the automatic form of benefit payable to or on behalf of a Participant is
determined as follows:
(a) The automatic form of retirement benefit for a Participant who does
not die before his Annuity Starting Date shall be the Qualified Joint
and Survivor Form.
(b) The automatic form of death benefit for a Participant who dies before
his Annuity Starting Date shall be:
(1) A Qualified Preretirement Survivor Annuity for a Participant who
has a spouse to whom he has been continuously married throughout
the one-year period ending on the date of his death. The spouse
may elect to start receiving the death benefit on any first day
of the month on or after the Participant dies and before the date
the Participant would have been age 70 1/2. If the spouse dies
before benefits start, the Participant's Vested Account,
determined as of the date of the spouse's death, shall be paid to
the spouse's Beneficiary.
(2) A single-sum payment to the Participant's Beneficiary for a
Participant who does not have a spouse who is entitled to a
Qualified Preretirement Survivor Annuity.
Before a death benefit will be paid on account of the death of a
Participant who does not have a spouse who is entitled to a Qualified
Preretirement Survivor Annuity, it must be established to the
satisfaction of a plan representative that the Participant does not
have such a spouse.
SECTION 6.02--OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION
REQUIREMENTS.
(a) For purposes of this section, the following terms are defined:
Applicable Life Expectancy means Life Expectancy (or Joint and Last
Survivor Expectancy) calculated using the attained age of the
Participant (or Designated Beneficiary) as of the Participant's (or
Designated Beneficiary's) birthday in the applicable calendar year
reduced by one for each calendar year which has elapsed since the date
Life Expectancy was first calculated. If Life Expectancy is being
recalculated, the Applicable Life Expectancy shall be the Life
Expectancy so recalculated. The applicable calendar year shall be the
first Distribution Calendar Year, and if Life Expectancy is being
recalculated such succeeding calendar year.
Designated Beneficiary means the individual who is designated as the
beneficiary under the Plan in accordance with Code Section 401(a)(9)
and the regulations thereunder.
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Distribution Calendar Year means a calendar year for which a minimum
distribution is required. For distributions beginning before the
Participant's death, the first Distribution Calendar Year is the
calendar year immediately preceding the calendar year which contains
the Participant's Required Beginning Date. For distributions beginning
after the Participant's death, the first Distribution Calendar Year is
the calendar year in which distributions are required to begin
pursuant to (e) below.
Joint and Last Survivor Expectancy means joint and last survivor
expectancy computed by use of the expected return multiples in Table
VI of section 1.72-9 of the Income Tax Regulations.
Unless otherwise elected by the Participant (or spouse, in the case of
distributions described in (e)(2)(ii) below) by the time distributions
are required to begin, life expectancies shall be recalculated
annually. Such election shall be irrevocable as to the Participant (or
spouse) and shall apply to all subsequent years. The life expectancy
of a nonspouse Beneficiary may not be recalculated.
Life Expectancy means life expectancy computed by use of the expected
return multiples in Table V of section 1.72-9 of the Income Tax
Regulations.
Unless otherwise elected by the Participant (or spouse, in the case of
distributions described in (e)(2)(ii) below) by the time distributions
are required to begin, life expectancies shall be recalculated
annually. Such election shall be irrevocable as to the Participant (or
spouse) and shall apply to all subsequent years. The life expectancy
of a nonspouse Beneficiary may not be recalculated.
Participant's Benefit means
(1) The Account balance as of the last valuation date in the calendar
year immediately preceding the Distribution Calendar Year
(valuation calendar year) increased by the amount of any
contributions or forfeitures allocated to the Account balance as
of the dates in the valuation calendar year after the valuation
date and decreased by distributions made in the valuation
calendar year after the valuation date.
(2) For purposes of (1) above, if any portion of the minimum
distribution for the first Distribution Calendar Year is made in
the second Distribution Calendar Year on or before the Required
Beginning Date, the amount of the minimum distribution made in
the second Distribution Calendar Year shall be treated as if it
had been made in the immediately preceding Distribution Calendar
Year.
Required Beginning Date means, for a Participant, the first day of
April of the calendar year following the calendar year in which the
Participant attains age 70 1/2, unless otherwise provided in (1), (2)
or (3) below:
(1) The Required Beginning Date for a Participant who attains age
70 1/2 before January 1, 1988, and who is not a 5-percent owner
is the first day of April of the calendar year following the
calendar year in which the later of retirement or attainment of
age 70 1/2 occurs.
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(2) The Required Beginning Date for a Participant who attains age
70 1/2 before January 1, 1988, and who is a 5-percent owner is
the first day of April of the calendar year following the later
of
(i) the calendar year in which the Participant attains age
70 1/2, or
(ii) the earlier of the calendar year with or within which ends
the Plan Year in which the Participant becomes a 5-percent
owner, or the calendar year in which the Participant
retires.
(3) The Required Beginning Date of a Participant who is not a
5-percent owner and who attains age 70 1/2 during 1988 and who
has not retired as of January 1, 1989, is April 1, 1990.
A Participant is treated as a 5-percent owner for purposes of this
section if such Participant is a 5-percent owner as defined in Code
Section 416(i) (determined in accordance with Code Section 416 but
without regard to whether the Plan is top-heavy) at any time during
the Plan Year ending with or within the calendar year in which such
owner attains age 66 1/2 or any subsequent Plan Year.
Once distributions have begun to a 5-percent owner under this section,
they must continue to be distributed, even if the Participant ceases
to be a 5-percent owner in a subsequent year.
(b) The optional forms of retirement benefit shall be the following: a
straight life annuity; single life annuities with certain periods of
five, ten or fifteen years; a single life annuity with installment
refund; survivorship life annuities with installment refund and
survivorship percentages of 50, 66 2/3 or 100; fixed period annuities
for any period of whole months which is not less than 60 and does not
exceed the Life Expectancy of the Participant and the named
Beneficiary as provided in (d) below where the Life Expectancy is not
recalculated; and a series of installments chosen by the Participant
with a minimum payment each year beginning with the year the
Participant turns age 70 1/2. The payment for the first year in which
a minimum payment is required will be made by April 1 of the following
calendar year. The payment for the second year and each successive
year will be made by December 31 of that year. The minimum payment
will be based on a period equal to the Joint and Last Survivor
Expectancy of the Participant and the Participant's spouse, if any, as
provided in (d) below where the Joint and Last Survivor Expectancy is
recalculated. The balance of the Participant's Vested Account, if any,
will be payable on the Participant's death to his Beneficiary in a
single sum. The Participant may also elect to receive his Vested
Account in a single-sum payment.
Election of an optional form is subject to the qualified election
provisions of Article VI.
Any annuity contract distributed shall be nontransferable. The terms
of any annuity contract purchased and distributed by the Plan to a
Participant or spouse shall comply with the requirements of this Plan.
(c) The optional forms of death benefit are a single-sum payment and any
annuity that is an optional form of retirement benefit. However, a
series of installments shall not be available if the Beneficiary is
not the spouse of the deceased Participant.
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(d) Subject to the AUTOMATIC FORMS OF DISTRIBUTION SECTION of Article VI,
joint and survivor annuity requirements, the requirements of this
section shall apply to any distribution of a Participant's interest
and will take precedence over any inconsistent provisions of this
Plan. Unless otherwise specified, the provisions of this section apply
to calendar years beginning after December 31, 1984.
All distributions required under this section shall be determined and
made in accordance with the proposed regulations under Code Section
401(a)(9), including the minimum distribution incidental benefit
requirement of section 1.401(a)(9)-2 of the proposed regulations.
The entire interest of a Participant must be distributed or begin to
be distributed no later than the Participant's Required Beginning
Date.
As of the first Distribution Calendar Year, distributions, if not made
in a single sum, may only be made over one of the following periods
(or combination thereof):
(1) the life of the Participant,
(2) the life of the Participant and a Designated Beneficiary,
(3) a period certain not extending beyond the Life Expectancy of the
Participant, or
(4) a period certain not extending beyond the Joint and Last Survivor
Expectancy of the Participant and a Designated Beneficiary.
If the Participant's interest is to be distributed in other than a
single sum, the following minimum distribution rules shall apply on or
after the Required Beginning Date:
(5) Individual account:
(i) If a Participant's Benefit is to be distributed over
(a) a period not extending beyond the Life Expectancy of
the Participant or the Joint Life and Last Survivor
Expectancy of the Participant and the Participant's
Designated Beneficiary or
(b) a period not extending beyond the Life Expectancy of
the Designated Beneficiary,
the amount required to be distributed for each calendar year
beginning with the distributions for the first Distribution
Calendar Year, must be at least equal to the quotient
obtained by dividing the Participant's Benefit by the
Applicable Life Expectancy.
(ii) For calendar years beginning before January 1, 1989, if the
Participant's spouse is not the Designated Beneficiary, the
method of distribution selected must assure that at least
50% of the present value of the amount available for
distribution is paid within the Life Expectancy of the
Participant.
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(iii)For calendar years beginning after December 31, 1988, the
amount to be distributed each year, beginning with
distributions for the first Distribution Calendar Year shall
not be less than the quotient obtained by dividing the
Participant's Benefit by the lesser of
(a) the Applicable Life Expectancy or
(b) if the Participant's spouse is not the Designated
Beneficiary, the applicable divisor determined from the
table set forth in Q&A-4 of section 1.401(a)(9)-2 of
the proposed regulations.
Distributions after the death of the Participant shall be
distributed using the Applicable Life Expectancy in (5)(i)
above as the relevant divisor without regard to Proposed
Regulations section 1.401(a)(9)-2.
(iv) The minimum distribution required for the Participant's
first Distribution Calendar Year must be made on or before
the Participant's Required Beginning Date. The minimum
distribution for the Distribution Calendar Year for other
calendar years, including the minimum distribution for the
Distribution Calendar Year in which the Participant's
Required Beginning Date occurs, must be made on or before
December 31 of that Distribution Calendar Year.
(6) Other forms:
(i) If the Participant's Benefit is distributed in the form of
an annuity purchased from an insurance company,
distributions thereunder shall be made in accordance with
the requirements of Code Section 401(a)(9) and the proposed
regulations thereunder.
(e) Death distribution provisions:
(1) Distribution beginning before death. If the Participant dies
after distribution of his interest has begun, the remaining
portion of such interest will continue to be distributed at least
as rapidly as under the method of distribution being used prior
to the Participant's death.
(2) Distribution beginning after death. If the Participant dies
before distribution of his interest begins, distribution of the
Participant's entire interest shall be completed by December 31
of the calendar year containing the fifth anniversary of the
Participant's death except to the extent that an election is made
to receive distributions in accordance with (i) or (ii) below:
(i) if any portion of the Participant's interest is payable to a
Designated Beneficiary, distributions may be made over the
life or over a period certain not greater than the Life
Expectancy of the Designated Beneficiary commencing on or
before December 31 of the calendar year immediately
following the calendar year in which the Participant died;
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(ii) if the Designated Beneficiary is the Participant's surviving
spouse, the date distributions are required to begin in
accordance with (i) above shall not be earlier than the
later of
(a) December 31 of the calendar year immediately following
the calendar year in which the Participant died and
(b) December 31 of the calendar year in which the
Participant would have attained age 70 1/2.
If the Participant has not made an election pursuant to this
(e)(2) by the time of his death, the Participant's Designated
Beneficiary must elect the method of distribution no later than
the earlier of
(iii)December 31 of the calendar year in which distributions
would be required to begin under this subparagraph, or
(iv) December 31 of the calendar year which contains the fifth
anniversary of the date of death of the Participant.
If the Participant has no Designated Beneficiary, or if the
Designated Beneficiary does not elect a method of distribution,
distribution of the Participant's entire interest must be
completed by December 31 of the calendar year containing the
fifth anniversary of the Participant's death.
(3) For purposes of (e)(2) above, if the surviving spouse dies after
the Participant, but before payments to such spouse begin, the
provisions of (e)(2) above, with the exception of (e)(2)(ii)
therein, shall be applied as if the surviving spouse were the
Participant.
(4) For purposes of this (e), any amount paid to a child of the
Participant will be treated as if it had been paid to the
surviving spouse if the amount becomes payable to the surviving
spouse when the child reaches the age of majority.
(5) For purposes of this (e), distribution of a Participant's
interest is considered to begin on the Participant's Required
Beginning Date (or if (e)(3) above is applicable, the date
distribution is required to begin to the surviving spouse
pursuant to (e)(2) above). If distribution in the form of an
annuity irrevocably commences to the Participant before the
Required Beginning Date, the date distribution is considered to
begin is the date distribution actually commences.
SECTION 6.02A--DISTRIBUTIONS IN QUALIFYING EMPLOYER SECURITIES.
In lieu of the distributions permitted under Section 6.02 above, any
portion of the Participant's Vested Account held in Qualifying Employer
Securities may be distributed in kind. Fractional shares shall be paid in cash
valued as of the most recent Valuation Date; the distribution shall include any
dividends (cash or stock) on such whole shares or any additional shares received
as a result of a stock split or any other adjustment to such whole shares since
the Valuation Date preceding the date of distribution.
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SECTION 6.03--ELECTION PROCEDURES.
The Participant, Beneficiary, or spouse shall make any election under this
section in writing. The Plan Administrator may require such individual to
complete and sign any necessary documents as to the provisions to be made. Any
election permitted under (a) and (b) below shall be subject to the qualified
election provisions of (c) below.
(a) Retirement Benefits. A Participant may elect his Beneficiary or
Contingent Annuitant and may elect to have retirement benefits
distributed under any of the optional forms of retirement benefit
described in the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION
REQUIREMENTS SECTION of Article VI.
(b) Death Benefits. A Participant may elect his Beneficiary and may elect
to have death benefits distributed under any of the optional forms of
death benefit described in the OPTIONAL FORMS OF DISTRIBUTION AND
DISTRIBUTION REQUIREMENTS SECTION of Article VI.
If the Participant has not elected an optional form of distribution
for the death benefit payable to his Beneficiary, the Beneficiary may,
for his own benefit, elect the form of distribution, in like manner as
a Participant.
The Participant may waive the Qualified Preretirement Survivor Annuity
by naming someone other than his spouse as Beneficiary.
In lieu of the Qualified Preretirement Survivor Annuity described in
the AUTOMATIC FORMS OF DISTRIBUTION SECTION of Article VI, the spouse
may, for his own benefit, waive the Qualified Preretirement Survivor
Annuity by electing to have the benefit distributed under any of the
optional forms of death benefit described in the OPTIONAL FORMS OF
DISTRIBUTION AND DISTRIBUTION REQUIREMENTS SECTION of Article VI.
(c) Qualified Election. The Participant, Beneficiary or spouse may make an
election at any time during the election period. The Participant,
Beneficiary, or spouse may revoke the election made (or make a new
election) at any time and any number of times during the election
period. An election is effective only if it meets the consent
requirements below.
The election period as to retirement benefits is the 90-day period
ending on the Annuity Starting Date. An election to waive the
Qualified Joint and Survivor Form may not be made before the date he
is provided with the notice of the ability to waive the Qualified
Joint and Survivor Form. If the Participant elects the series of
installments, he may elect on any later date to have the balance of
his Vested Account paid under any of the optional forms of retirement
benefit available under the Plan. His election period for this
election is the 90-day period ending on the Annuity Starting Date for
the optional form of retirement benefit elected.
A Participant may make an election as to death benefits at any time
before he dies. The spouse's election period begins on the date the
Participant dies and ends on the date benefits begin. The
Beneficiary's election period begins on the date the Participant dies
and ends on the date benefits begin. An election to waive the
Qualified Preretirement Survivor Annuity may not be made by the
Participant before the date he is provided with the notice of the
ability to waive the Qualified Preretirement Survivor Annuity. A
Participant's election to waive the Qualified Preretirement
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Survivor Annuity which is made before the first day of the Plan Year
in which he reaches age 35 shall become invalid on such date. An
election made by a Participant after he ceases to be an Employee will
not become invalid on the first day of the Plan Year in which he
reaches age 35 with respect to death benefits from that part of his
Account resulting from Contributions made before he ceased to be an
Employee.
If the Participant's Vested Account has at any time exceeded $3,500,
any benefit which is (1) immediately distributable or (2) payable in a
form other than a Qualified Joint and Survivor Form or a Qualified
Preretirement Survivor Annuity requires the consent of the Participant
and the Participant's spouse (or where either the Participant or the
spouse has died, the survivor). The consent of the Participant or
spouse to a benefit which is immediately distributable must not be
made before the date the Participant or spouse is provided with the
notice of the ability to defer the distribution. Such consent shall be
made in writing. The consent shall not be made more than 90 days
before the Annuity Starting Date. Spousal consent is not required for
a benefit which is immediately distributable in a Qualified Joint and
Survivor Form. Furthermore, if spousal consent is not required because
the Participant is electing an optional form of retirement benefit
that is not a life annuity pursuant to (d) below, only the Participant
need consent to the distribution of a benefit payable in a form that
is not a life annuity and which is immediately distributable. Neither
the consent of the Participant nor the Participant's spouse shall be
required to the extent that a distribution is required to satisfy Code
Section 401(a)(9) or Code Section 415. In addition, upon termination
of this Plan if the Plan does not offer an annuity option (purchased
from a commercial provider), the Participant's Account balance may,
without the Participant's consent, be distributed to the Participant
or transferred to another defined contribution plan (other than an
employee stock ownership plan as defined in Code Section 4975(e)(7))
within the same Controlled Group. A benefit is immediately
distributable if any part of the benefit could be distributed to the
Participant (or surviving spouse) before the Participant attains (or
would have attained if not deceased) the older of Normal Retirement
Age or age 62. If the Qualified Joint and Survivor Form is waived, the
spouse has the right to limit consent only to a specific Beneficiary
or a specific form of benefit. The spouse can relinquish one or both
such rights. Such consent shall be made in writing. The consent shall
not be made more than 90 days before the Annuity Starting Date. If the
Qualified Preretirement Survivor Annuity is waived, the spouse has the
right to limit consent only to a specific Beneficiary. Such consent
shall be in writing. The spouse's consent shall be witnessed by a plan
representative or notary public. The spouse's consent must acknowledge
the effect of the election, including that the spouse had the right to
limit consent only to a specific Beneficiary or a specific form of
benefit, if applicable, and that the relinquishment of one or both
such rights was voluntary. Unless the consent of the spouse expressly
permits designations by the Participant without a requirement of
further consent by the spouse, the spouse's consent must be limited to
the form of benefit, if applicable, and the Beneficiary (including any
Contingent Annuitant), class of Beneficiaries, or contingent
Beneficiary named in the election. Spousal consent is not required,
however, if the Participant establishes to the satisfaction of the
plan representative that the consent of the spouse cannot be obtained
because there is no spouse or the spouse cannot be located. A spouse's
consent under this paragraph shall not be valid with respect to any
other spouse. A Participant may revoke a prior election without the
consent of the spouse. Any new election will require a new spousal
consent, unless the consent of the spouse expressly permits such
election by the Participant without further consent by the spouse. A
spouse's consent may be revoked at any time within the Participant's
election period.
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(d) Special Rule for Profit Sharing Plan. As provided in the preceding
provisions of the Plan, if a Participant has a spouse to whom he has
been continuously married throughout the one-year period ending on the
date of his death, the Participant's Vested Account shall be paid to
such spouse. However, if there is no such spouse or if the surviving
spouse has already consented in a manner conforming to the qualified
election requirements in (c) above, the Vested Account shall be
payable to the Participant's Beneficiary in the event of the
Participant's death.
The Participant may waive the spousal death benefit described above at
any time provided that no such waiver shall be effective unless it
satisfies the conditions of (c) above (other than the notification
requirement referred to therein) that would apply to the Participant's
waiver of the Qualified Preretirement Survivor Annuity.
Because this is a profit sharing plan which pays death benefits as
described above, this subsection (d) applies if the following
condition is met: with respect to the Participant, this Plan is not a
direct or indirect transferee after December 31, 1984, of a defined
benefit plan, money purchase plan (including a target plan), stock
bonus plan or profit sharing plan which is subject to the survivor
annuity requirements of Code Section 401(a)(11) and Code Section 417.
If the above condition is met, spousal consent is not required for
electing a benefit payable in a form that is not a life annuity. If
the above condition is not met, the consent requirements of this
article shall be operative.
SECTION 6.04--NOTICE REQUIREMENTS.
(a) Optional forms of retirement benefit. The Plan Administrator shall
furnish to the Participant and the Participant's spouse a written
explanation of the optional forms of retirement benefit in the
OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION REQUIREMENTS SECTION
of Article VI, including the material features and relative values of
these options, in a manner that would satisfy the notice requirements
of Code Section 417(a)(3) and the right of the Participant and the
Participant's spouse to defer distribution until the benefit is no
longer immediately distributable. The Plan Administrator shall furnish
the written explanation by a method reasonably calculated to reach the
attention of the Participant and the Participant's spouse no less than
30 days and no more than 90 days before the Annuity Starting Date.
(b) Qualified Joint and Survivor Form. The Plan Administrator shall
furnish to the Participant a written explanation of the following: the
terms and conditions of the Qualified Joint and Survivor Form; the
Participant's right to make, and the effect of, an election to waive
the Qualified Joint and Survivor Form; the rights of the Participant's
spouse; and the right to revoke an election and the effect of such a
revocation. The Plan Administrator shall furnish the written
explanation by a method reasonably calculated to reach the attention
of the Participant no less than 30 days and no more than 90 days
before the Annuity Starting Date.
After the written explanation is given, a Participant or spouse may
make written request for additional information. The written
explanation must be personally delivered or mailed (first class mail,
postage prepaid) to the Participant or spouse within 30 days from the
date of the written request. The Plan Administrator does not need to
comply with more than one such request by a Participant or spouse.
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The Plan Administrator's explanation shall be written in nontechnical
language and will explain the terms and conditions of the Qualified
Joint and Survivor Form and the financial effect upon the
Participant's benefit (in terms of dollars per benefit payment) of
electing not to have benefits distributed in accordance with the
Qualified Joint and Survivor Form.
(c) Qualified Preretirement Survivor Annuity. As required by the Code and
Federal regulation, the Plan Administrator shall furnish to the
Participant a written explanation of the following: the terms and
conditions of the Qualified Preretirement Survivor Annuity; the
Participant's right to make, and the effect of, an election to waive
the Qualified Preretirement Survivor Annuity; the rights of the
Participant's spouse; and the right to revoke an election and the
effect of such a revocation. The Plan Administrator shall furnish the
written explanation by a method reasonably calculated to reach the
attention of the Participant within the applicable period. The
applicable period for a Participant is whichever of the following
periods ends last:
(1) the period beginning one year before the date the individual
becomes a Participant and ending one year after such date; or
(2) the period beginning one year before the date the Participant's
spouse is first entitled to a Qualified Preretirement Survivor
Annuity and ending one year after such date.
If such notice is given before the period beginning with the first day
of the Plan Year in which the Participant attains age 32 and ending
with the close of the Plan Year preceding the Plan Year in which the
Participant attains age 35, an additional notice shall be given within
such period. If a Participant ceases to be an Employee before
attaining age 35, an additional notice shall be given within the
period beginning one year before the date he ceases to be an Employee
and ending one year after such date.
After the written explanation is given, a Participant or spouse may
make written request for additional information. The written
explanation must be personally delivered or mailed (first class mail,
postage prepaid) to the Participant or spouse within 30 days from the
date of the written request. The Plan Administrator does not need to
comply with more than one such request by a Participant or spouse.
The Plan Administrator's explanation shall be written in nontechnical
language and will explain the terms and conditions of the Qualified
Preretirement Survivor Annuity and the financial effect upon the
spouse's benefit (in terms of dollars per benefit payment) of electing
not to have benefits distributed in accordance with the Qualified
Preretirement Survivor Annuity.
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ARTICLE VII
TERMINATION OF PLAN
The Employer expects to continue the Plan indefinitely but reserves the
right to terminate the Plan in whole or in part at any time upon giving written
notice to all parties concerned. Complete discontinuance of Contributions under
the Plan constitutes complete termination of Plan.
The Account of each Participant shall be fully (100%) vested and
nonforfeitable as of the effective date of complete termination of Plan. The
Account of each Participant who is included in the group of Participants deemed
to be affected by the partial termination of the Plan shall be fully (100%)
vested and nonforfeitable as of the effective date of the partial Plan
termination. The Participant's Account shall continue to participate in the
earnings credited, expenses charged and any appreciation or depreciation of the
Investment Fund until the Vested Account is distributed. A distribution under
this article will be a retirement benefit and shall be distributed to the
Participant according to the provisions of Article VI.
A Participant's Account which does not result from Contributions which are
used to compute the Actual Deferral Percentage, as defined in the EXCESS AMOUNTS
SECTION of Article III, may be distributed to the Participant after the
effective date of the complete or partial Plan termination. A Participant's
Account resulting from Contributions which are used to compute such percentage
may be distributed upon termination of the Plan without the establishment or
maintenance of another defined contribution plan, other than an employee stock
ownership plan (as defined in Code Section 4975(e) or Code Section 409) or a
simplified employee pension plan (as defined in Code Section 408(k)). Such a
distribution made after March 31, 1988, must be in a single sum.
Upon complete termination of Plan, no more Employees shall become
Participants and no more Contributions shall be made.
The assets of this Plan shall not be paid to the Employer at any time,
except that, after the satisfaction of all liabilities under the Plan, any
assets remaining may be paid to the Employer. The payment may not be made if it
would contravene any provision of law.
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ARTICLE VIII
ADMINISTRATION OF PLAN
SECTION 8.01--ADMINISTRATION.
Subject to the provisions of this article, the Plan Administrator has
complete control of the administration of the Plan. The Plan Administrator has
all the powers necessary for it to properly carry out its administrative duties.
Not in limitation, but in amplification of the foregoing, the Plan Administrator
has the power to construe the Plan, including ambiguous provisions, and to
determine all questions that may arise under the Plan, including all questions
relating to the eligibility of Employees to participate in the Plan and the
amount of benefit to which any Participant, Beneficiary, spouse or Contingent
Annuitant may become entitled. The Plan Administrator's decisions upon all
matters within the scope of its authority shall be final.
Unless otherwise set out in the Plan or Group Contract, the Plan
Administrator may delegate recordkeeping and other duties which are necessary
for the administration of the Plan to any person or firm which agrees to accept
such duties. The Plan Administrator shall be entitled to rely upon all tables,
valuations, certificates and reports furnished by the consultant or actuary
appointed by the Plan Administrator and upon all opinions given by any counsel
selected or approved by the Plan Administrator.
The Plan Administrator shall receive all claims for benefits by
Participants, former Participants, Beneficiaries, spouses, and Contingent
Annuitants. The Plan Administrator shall determine all facts necessary to
establish the right of any Claimant to benefits and the amount of those benefits
under the provisions of the Plan. The Plan Administrator may establish rules and
procedures to be followed by Claimants in filing claims for benefits, in
furnishing and verifying proofs necessary to determine age, and in any other
matters required to administer the Plan.
Each Participant shall be entitled to direct the Trustee as to the exercise
of all voting powers over shares allocated to his Account with respect to any
corporate matter which involves the voting of such shares allocated to the
Participant's Account with respect to the approval or disapproval of any
corporate merger or consolidation, recapitalization, reclassification,
liquidation, dissolution, sale of substantially all assets of a trade or
business, or such similar transaction as may be prescribed in the Treasury
Regulations.
In the event that a tender offer is made for some or all of the shares of
the Employer, each Participant shall have the right to direct whether those
shares allocated to his Account, whether or not vested, shall be tendered. This
right shall be exercised in the manner set forth herein. In the absence of a
written directive from or election by a Participant to the Plan Administrator,
the Plan Administrator shall direct the Trustee not to tender such shares.
Because the choice is to be given to the Participants, the Plan Administrator
and the Trustee shall not have fiduciary responsibility with respect to the
decision to tender or not or whether to tender all of such shares or only a
portion thereof.
In order to facilitate the decision of Participants whether to tender their
shares in a tender offer (or how many shares to tender), the Plan Administrator
shall provide election forms for the Participants, whereby they may elect to
tender or not and whereby they may elect to tender all or a portion of such
shares. Unless otherwise limited by Federal securities law, such election may be
made or changed at any time prior to the date before the expiration date of the
tender offer (with extensions); any election or change in election must be
received by the Plan Administrator, or designated representative of the Plan
Administrator, on or before the day
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preceding the expiration date of the tender offer (with extensions, if any). The
Plan Administrator may develop procedures to facilitate Participants' choices,
such as the use of facsimile transmissions for the Employees located in areas
physically remote from the Plan Administrator. The election shall be binding on
the Plan Administrator and the Trustee. The Plan Administrator shall make every
effort to distribute the notice of the tender, election forms and other
communications related to the tender offer to all Participants as soon as
practical following the announcement of the tender offer, including mailing such
notice and form to Participants and posting such notice in places designed to be
reviewed by Participants.
As to shares which are not allocated to the Accounts of any Participant,
all such shares (in the aggregate) shall be tendered or not as the majority of
the shares held by Participants and directed by Participants are tendered or
not. The Plan Administrator shall direct the Trustee to tender all such
unallocated shares or not, in accordance with the elections of the Participant
having an allocation of the majority of the shares under the Plan.
SECTION 8.02--RECORDS.
All acts and determinations of the Plan Administrator shall be duly
recorded. All these records, together with other documents necessary for the
administration of the Plan, shall be preserved in the Plan Administrator's
custody.
Writing (handwriting, typing, printing), photostating, photographing,
microfilming, magnetic impulse, mechanical or electrical recording or other
forms of data compilation shall be acceptable means of keeping records.
SECTION 8.03--INFORMATION AVAILABLE.
Any Participant in the Plan or any Beneficiary may examine copies of the
Plan description, latest annual report, any bargaining agreement, this Plan, the
Group Contract or any other instrument under which the Plan was established or
is operated. The Plan Administrator shall maintain all of the items listed in
this section in its office, or in such other place or places as it may designate
in order to comply with governmental regulations. These items may be examined
during reasonable business hours. Upon the written request of a Participant or
Beneficiary receiving benefits under the Plan, the Plan Administrator will
furnish him with a copy of any of these items. The Plan Administrator may make a
reasonable charge to the requesting person for the copy.
SECTION 8.04--CLAIM AND APPEAL PROCEDURES.
A Claimant must submit any required forms and pertinent information when
making a claim for benefits under the Plan.
If a claim for benefits under the Plan is denied, the Plan Administrator
shall provide adequate written notice to the Claimant whose claim for benefits
under the Plan has been denied. The notice must be furnished within 90 days of
the date that the claim is received by the Plan Administrator. The Claimant
shall be notified in writing within this initial 90-day period if special
circumstances require an extension of time needed to process the claim and the
date by which the Plan Administrator's decision is expected to be rendered. The
written notice shall be furnished no later than 180 days after the date the
claim was received by the Plan Administrator.
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The Plan Administrator's notice to the Claimant shall specify the reason
for the denial; specify references to pertinent Plan provisions on which denial
is based; describe any additional material and information needed for the
Claimant to perfect his claim for benefits; explain why the material and
information is needed; inform the Claimant that any appeal he wishes to make
must be in writing to the Plan Administrator within 60 days after receipt of the
Plan Administrator's notice of denial of benefits and that failure to make the
written appeal within such 60-day period shall render the Plan Administrator's
determination of such denial final, binding and conclusive.
If the Claimant appeals to the Plan Administrator, the Claimant, or his
authorized representative, may submit in writing whatever issues and comments
the Claimant, or his representative, feels are pertinent. The Claimant, or his
authorized representative may review pertinent Plan documents. The Plan
Administrator shall reexamine all facts related to the appeal and make a final
determination as to whether the denial of benefits is justified under the
circumstances. The Plan Administrator shall advise the Claimant of its decision
within 60 days of his written request for review, unless special circumstances
(such as a hearing) would make rendering a decision within the 60-day limit
unfeasible. The Claimant must be notified within the 60-day limit if an
extension is necessary. The Plan Administrator shall render a decision on a
claim for benefits no later than 120 days after the request for review is
received.
SECTION 8.05--UNCLAIMED VESTED ACCOUNT PROCEDURE.
At the time the Participant's Vested Account is distributable to the
Participant, spouse or Beneficiary without his consent according to the
provisions of Article VI or Article IX, the Plan Administrator, by certified or
registered mail addressed to his last known address and in accordance with the
notice requirements of Article VI, will notify him of his entitlement to a
benefit. If the Participant, spouse or Beneficiary fails to claim the Vested
Account or make his whereabouts known in writing within six months from the date
of mailing the notice, the Plan Administrator may treat such unclaimed Vested
Account as a forfeiture and apply it according to the forfeiture provisions of
Article III. If Article III contains no forfeiture provisions, such amount will
be applied to reduce the earliest Employer Contributions due after the
forfeiture arises.
If a Participant's Vested Account is forfeited according to the provisions
of the above paragraph and the Participant, his spouse or his Beneficiary at any
time make a claim for benefits, the forfeited Vested Account shall be
reinstated, unadjusted for any gains or losses occurring after the date it was
forfeited. The reinstated Vested Account shall then be distributed to the
Participant, spouse or Beneficiary according to the preceding provisions of the
Plan.
SECTION 8.06--DELEGATION OF AUTHORITY.
All or any part of the administrative duties and responsibilities under
this article may be delegated by the Plan Administrator to a retirement
committee. The duties and responsibilities of the retirement committee shall be
set out in a separate written agreement.
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ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01--AMENDMENTS.
The Employer may amend this Plan at any time, including any remedial
retroactive changes (within the specified period of time as may be determined by
Internal Revenue Service regulations) to comply with the requirements of any law
or regulation issued by any governmental agency to which the Employer is
subject. An amendment may not diminish or adversely affect any accrued interest
or benefit of Participants or their Beneficiaries or eliminate an optional form
of distribution with respect to benefits attributable to service before the
amendment nor allow reversion or diversion of Plan assets to the Employer at any
time, except as may be necessary to comply with the requirements of any law or
regulation issued by any governmental agency to which the Employer is subject.
No amendment to this Plan shall be effective to the extent that it has the
effect of decreasing a Participant's accrued benefit. However, a Participant's
Account may be reduced to the extent permitted under Code Section 412(c)(8). For
purposes of this paragraph, a Plan amendment which has the effect of decreasing
a Participant's Account or eliminating an optional form of benefit, with respect
to benefits attributable to service before the amendment shall be treated as
reducing an accrued benefit. Furthermore, if the vesting schedule of the Plan is
amended, in the case of an Employee who is a Participant as of the later of the
date such amendment is adopted or the date it becomes effective, the
nonforfeitable percentage (determined as of such date) of such Employee's
employer-derived accrued benefit will not be less than his percentage computed
under the Plan without regard to such amendment.
An amendment shall not decrease a Participant's vested interest in the
Plan. If an amendment to the Plan, or a deemed amendment in the case of a change
in top-heavy status of the Plan as provided in the MODIFICATION OF VESTING
REQUIREMENTS SECTION of Article X, changes the computation of the percentage
used to determine that portion of a Participant's Account attributable to
Employer Contributions which is nonforfeitable (whether directly or indirectly),
each Participant or former Participant
(a) who has completed at least three Years of Service on the date the
election period described below ends (five Years of Service if the
Participant does not have at least one Hour-of-Service in a Plan Year
beginning after December 31, 1988) and
(b) whose nonforfeitable percentage will be determined on any date after
the date of the change
may elect, during the election period, to have the nonforfeitable percentage of
his Account that results from Employer Contributions determined without regard
to the amendment. This election may not be revoked. An election does not need to
be provided for any Participant or former Participant whose nonforfeitable
percentage, determined according to the Plan provisions as changed, cannot at
any time be less than the percentage determined without regard to such change.
The election period shall begin no later than the date the Plan amendment is
adopted, or deemed adopted in the case of a change in the top-heavy status of
the Plan, and end no earlier than the sixtieth day after the latest of the date
the amendment is adopted (deemed adopted) or becomes effective, or the date the
Participant is issued written notice of the amendment (deemed amendment) by the
Employer or the Plan Administrator.
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SECTION 9.02--DIRECT ROLLOVERS.
This section applies to distributions made on or after January 1, 1993.
Notwithstanding any provision of the Plan to the contrary that would otherwise
limit a Distributee's election under this section, a Distributee may elect, at
the time and in the manner prescribed by the Plan Administrator, to have any
portion of an Eligible Rollover Distribution paid directly to an Eligible
Retirement Plan, specified by the Distributee, in a Direct Rollover.
SECTION 9.03--MERGERS AND DIRECT TRANSFERS.
The Plan may not be merged or consolidated with, nor have its assets or
liabilities transferred to, any other retirement plan, unless each Participant
in the plan would (if the plan then terminated) receive a benefit immediately
after the merger, consolidation or transfer which is equal to or greater than
the benefit the Participant would have been entitled to receive immediately
before the merger, consolidation or transfer (if this Plan had then terminated).
The Employer may enter into merger agreements or direct transfer of assets
agreements with the employers under other retirement plans which are qualifiable
under Code Section 401(a), including an elective transfer, and may accept the
direct transfer of plan assets, or may transfer plan assets, as a party to any
such agreement. The Employer shall not consent to, or be a party to a merger,
consolidation or transfer of assets with a defined benefit plan if such action
would result in a defined benefit feature being maintained under this Plan.
The Plan may accept a direct transfer of plan assets on behalf of an
Eligible Employee. If the Eligible Employee is not an Active Participant when
the transfer is made, the Eligible Employee shall be deemed to be an Active
Participant only for the purpose of investment and distribution of the
transferred assets. Employer Contributions shall not be made for or allocated to
the Eligible Employee, until the time he meets all of the requirements to become
an Active Participant.
The Plan shall hold, administer and distribute the transferred assets as a
part of the Plan. The Plan shall maintain a separate account for the benefit of
the Employee on whose behalf the Plan accepted the transfer in order to reflect
the value of the transferred assets. Unless a transfer of assets to the Plan is
an elective transfer, the Plan shall apply the optional forms of benefit
protections described in the AMENDMENTS SECTION of Article IX to all transferred
assets. A transfer is elective if: (1) the transfer is voluntary, under a fully
informed election by the Participant; (2) the Participant has an alternative
that retains his Code Section 411(d)(6) protected benefits (including an option
to leave his benefit in the transferor plan, if that plan is not terminating);
(3) if the transferor plan is subject to Code Sections 401(a)(11) and 417, the
transfer satisfies the applicable spousal consent requirements of the Code; (4)
the notice requirements under Code Section 417, requiring a written explanation
with respect to an election not to receive benefits in the form of a qualified
joint and survivor annuity, are met with respect to the Participant and spousal
transfer election; (5) the Participant has a right to immediate distribution
from the transferor plan under provisions in the plan not inconsistent with Code
Section 401(a); (6) the transferred benefit is equal to the Participant's entire
nonforfeitable accrued benefit under the transferor plan, calculated to be at
least the greater of the single sum distribution provided by the transferor plan
(if any) or the present value of the Participant's accrued benefit under the
transferor plan payable at the plan's normal retirement age and calculated using
an interest rate subject to the restrictions of Code Section 417(e) and subject
to the overall limitations of Code Section 415; (7) the Participant has a 100%
nonforfeitable interest in the transferred benefit; and (8) the transfer
otherwise satisfies applicable Treasury regulations.
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SECTION 9.04--PROVISIONS RELATING TO THE INSURER
AND OTHER PARTIES.
The obligations of an Insurer shall be governed solely by the provisions of
the Group Contract. The Insurer shall not be required to perform any act not
provided in or contrary to the provisions of the Group Contract. See the
CONSTRUCTION SECTION of this article.
Any issuer or distributor of investment contracts or securities is governed
solely by the terms of its policies, written investment contract, prospectuses,
security instruments, and any other written agreements entered into with the
Trustee.
Such Insurer, issuer or distributor is not a party to the Plan, nor bound
in any way by the Plan provisions. Such parties shall not be required to look to
the terms of this Plan, nor to determine whether the Employer, the Plan
Administrator, the Trustee, or the Named Fiduciary have the authority to act in
any particular manner or to make any contract or agreement.
Until notice of any amendment or termination of this Plan or a change in
Trustee has been received by the Insurer at its home office or an issuer or
distributor at their principal address, they are and shall be fully protected in
assuming that the Plan has not been amended or terminated and in dealing with
any party acting as Trustee according to the latest information which they have
received at their home office or principal address.
SECTION 9.05--EMPLOYMENT STATUS.
Nothing contained in this Plan gives an Employee the right to be retained
in the Employer's employ or to interfere with the Employer's right to discharge
any Employee.
SECTION 9.06--RIGHTS TO PLAN ASSETS.
No Employee shall have any right to or interest in any assets of the Plan
upon termination of his employment or otherwise except as specifically provided
under this Plan, and then only to the extent of the benefits payable to such
Employee in accordance with Plan provisions.
Any final payment or distribution to a Participant or his legal
representative or to any Beneficiaries, spouse or Contingent Annuitant of such
Participant under the Plan provisions shall be in full satisfaction of all
claims against the Plan, the Named Fiduciary, the Plan Administrator, the
Trustee, the Insurer, and the Employer arising under or by virtue of the Plan.
SECTION 9.07--BENEFICIARY.
Each Participant may name a Beneficiary to receive any death benefit (other
than any income payable to a Contingent Annuitant) that may arise out of his
participation in the Plan. The Participant may change his Beneficiary from time
to time. Unless a qualified election has been made, for purposes of distributing
any death benefits before Retirement Date, the Beneficiary of a Participant who
has a spouse who is entitled to a Qualified Preretirement Survivor Annuity shall
be the Participant's spouse. The Participant's Beneficiary designation and any
change of Beneficiary shall be subject to the provisions of the ELECTION
PROCEDURES
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SECTION of Article VI. It is the responsibility of the Participant to give
written notice to the Insurer of the name of the Beneficiary on a form furnished
for that purpose.
With the Employer's consent, the Plan Administrator may maintain records of
Beneficiary designations for Participants before their Retirement Dates. In that
event, the written designations made by Participants shall be filed with the
Plan Administrator. If a Participant dies before his Retirement Date, the Plan
Administrator shall certify to the Insurer the Beneficiary designation on its
records for the Participant.
If, at the death of a Participant, there is no Beneficiary named or
surviving, any death benefit under the Group Contract shall be paid under the
applicable provisions of the Group Contract.
SECTION 9.08--NONALIENATION OF BENEFITS.
Benefits payable under the Plan are not subject to the claims of any
creditor of any Participant, Beneficiary, spouse or Contingent Annuitant. A
Participant, Beneficiary, spouse or Contingent Annuitant does not have any
rights to alienate, anticipate, commute, pledge, encumber or assign any of such
benefits, except in the case of a loan as provided in the LOANS TO PARTICIPANTS
SECTION of Article V. The preceding sentences shall also apply to the creation,
assignment, or recognition of a right to any benefit payable with respect to a
Participant according to a domestic relations order, unless such order is
determined by the Plan Administrator to be a qualified domestic relations order,
as defined in Code Section 414(p), or any domestic relations order entered
before January 1, 1985.
SECTION 9.09--CONSTRUCTION.
The validity of the Plan or any of its provisions is determined under and
construed according to Federal law and, to the extent permissible, according to
the laws of the state in which the Employer has its principal office. In case
any provision of this Plan is held illegal or invalid for any reason, such
determination shall not affect the remaining provisions of this Plan, and the
Plan shall be construed and enforced as if the illegal or invalid provision had
never been included.
In the event of any conflict between the provisions of the Plan and the
terms of any contract or policy issued hereunder, the provisions of the Plan
control the operation and administration of the Plan.
SECTION 9.10--LEGAL ACTIONS.
The Plan, the Plan Administrator, the Trustee and the Named Fiduciary are
the necessary parties to any action or proceeding involving the assets held with
respect to the Plan or administration of the Plan or Trust. No person employed
by the Employer, no Participant, former Participant or their Beneficiaries or
any other person having or claiming to have an interest in the Plan is entitled
to any notice of process. A final judgment entered in any such action or
proceeding shall be binding and conclusive on all persons having or claiming to
have an interest in the Plan.
SECTION 9.11--SMALL AMOUNTS.
If the Vested Account of a Participant has never exceeded $3,500, the
entire Vested Account shall be payable in a single sum as of the earliest of his
Retirement Date, the date he dies, or the date he ceases to be an Employee for
any other reason. This is a small amounts payment. If a small amount is payable
as of the
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<PAGE> 66
date the Participant dies, the small amounts payment shall be made to the
Participant's Beneficiary (spouse if the death benefit is payable to the
spouse). If a small amount is payable while the Participant is living, the small
amounts payment shall be made to the Participant. The small amounts payment is
in full settlement of all benefits otherwise payable.
No other small amounts payments shall be made.
SECTION 9.12--WORD USAGE.
The masculine gender, where used in this Plan, shall include the feminine
gender and the singular words as used in this Plan may include the plural,
unless the context indicates otherwise.
SECTION 9.13--TRANSFERS BETWEEN PLANS.
If an Employee previously participated in another plan of the Employer
which credited service under the elapsed time method for any purpose which under
this Plan is determined using the hours method, then the Employee's service
shall be equal to the sum of (a), (b) and (c) below:
(a) The number of whole years of service credited to him under the other
plan as of the date he became an Eligible Employee under this Plan.
(b) One year or a part of a year of service for the applicable service
period in which he became an Eligible Employee if he is credited with
the required number of Hours-of-Service. If the Employer does not have
sufficient records to determine the Employee's actual Hours-of-Service
in that part of the service period before the date he became an
Eligible Employee, the Hours-of-Service shall be determined using an
equivalency. For any month in which he would be required to be
credited with one Hour-of-Service, the Employee shall be deemed for
purposes of this section to be credited with 190 Hours-of-Service.
(c) The Employee's service determined under this Plan using the hours
method after the end of the applicable service period in which he
became an Eligible Employee.
If an Employee previously participated in another plan of the Employer
which credited service under the hours method for any purpose which under this
Plan is determined using the elapsed time method, then the Employee's service
shall be equal to the sum of (d), (e) and (f) below:
(d) The number of whole years of service credited to him under the other
plan as of the beginning of the applicable service period under that
plan in which he became an Eligible Employee under this Plan.
(e) The greater of (1) the service that would be credited to him for that
entire service period using the elapsed time method or (2) the service
credited to him under the other plan as of the date he became an
Eligible Employee under this Plan.
(f) The Employee's service determined under this Plan using the elapsed
time method after the end of the applicable service period under the
other plan in which he became an Eligible Employee.
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<PAGE> 67
Any modification of service contained in this Plan shall be applicable to
the service determined pursuant to this section.
If the Employee previously participated in the plan of a Controlled Group
member which credited service under a different method than is used in this
Plan, for purposes of determining eligibility and vesting the provisions above
shall apply as though the plan of the Controlled Group member were a plan of the
Employer.
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<PAGE> 68
ARTICLE X
TOP-HEAVY PLAN REQUIREMENTS
SECTION 10.01--APPLICATION.
The provisions of this article shall supersede all other provisions in the
Plan to the contrary.
For the purpose of applying the Top-heavy Plan requirements of this
article, all members of the Controlled Group shall be treated as one Employer.
The term Employer as used in this article shall be deemed to include all members
of the Controlled Group unless the term as used clearly indicates only the
Employer is meant.
The accrued benefit or account of a participant which results from
deductible voluntary contributions shall not be included for any purpose under
this article.
The minimum vesting and contribution provisions of the MODIFICATION OF
VESTING REQUIREMENTS and MODIFICATION OF CONTRIBUTIONS SECTIONS of Article X
shall not apply to any Employee who is included in a group of Employees covered
by a collective bargaining agreement which the Secretary of Labor finds to be a
collective bargaining agreement between employee representatives and one or more
employers, including the Employer, if there is evidence that retirement benefits
were the subject of good faith bargaining between such representatives. For this
purpose, the term "employee representatives" does not include any organization
more than half of whose members are employees who are owners, officers, or
executives.
SECTION 10.02--DEFINITIONS.
The following terms are defined for purposes of this article.
Aggregation Group means
(a) each of the Employer's retirement plans in which a Key Employee is a
participant during the Year containing the Determination Date or one
of the four preceding Years,
(b) each of the Employer's other retirement plans which allows the plan(s)
described in (a) above to meet the nondiscrimination requirement of
Code Section 401(a)(4) or the minimum coverage requirement of Code
Section 410, and
(c) any of the Employer's other retirement plans not included in (a) or
(b) above which the Employer desires to include as part of the
Aggregation Group. Such a retirement plan shall be included only if
the Aggregation Group would continue to satisfy the requirements of
Code Section 401(a)(4) and Code Section 410.
The plans in (a) and (b) above constitute the "required" Aggregation Group.
The plans in (a), (b) and (c) above constitute the "permissive" Aggregation
Group.
Compensation means, as to an Employee for any period, compensation as
defined in the CONTRIBUTION LIMITATION SECTION of Article III. For purposes
of determining who is a Key Employee, Compensation
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<PAGE> 69
shall include, in addition to compensation as defined in the CONTRIBUTION
LIMITATION SECTION of Article III, elective contributions. Elective
contributions are amounts excludable from the Employee's gross income under
Code Sections 125, 402(e)(3), 402(h) or 403(b), and contributed by the
Employer, at the Employee's election, to a Code Section 401(k) arrangement,
a simplified employee pension, cafeteria plan or tax-sheltered annuity.
For purposes of Compensation as defined in this section, Compensation shall
be limited to the maximum dollar amount, as adjusted, in the same manner
and in the same time as the Compensation defined in the DEFINITION SECTION
of Article I.
Determination Date means as to this Plan for any Year, the last day of the
preceding Year. However, if there is no preceding Year, the Determination
Date is the last day of such Year.
Key Employee means any Employee or former Employee (including Beneficiaries
of deceased Employees) who at any time during the determination period was
(a) one of the Employer's officers (subject to the maximum below) whose
Compensation (as defined in this section) for the Year exceeds 50
percent of the dollar limitation under Code Section 415(b)(1)(A),
(b) one of the ten Employees who owns (or is considered to own, under Code
Section 318) more than a half percent ownership interest and one of
the largest interests in the Employer during any Year of the
determination period if such person's Compensation (as defined in this
section) for the Year exceeds the dollar limitation under Code Section
415(c)(1)(A),
(c) a five-percent owner of the Employer, or
(d) a one-percent owner of the Employer whose Compensation (as defined in
this section) for the Year is more than $150,000.
Each member of the Controlled Group shall be treated as a separate employer
for purposes of determining ownership in the Employer.
The determination period is the Year containing the Determination Date and
the four preceding Years. If the Employer has fewer than 30 Employees, no
more than three Employees shall be treated as Key Employees because they
are officers. If the Employer has between 30 and 500 Employees, no more
than ten percent of the Employer's Employees (if not an integer, increased
to the next integer) shall be treated as Key Employees because they are
officers. In no event will more than 50 Employees be treated as Key
Employees because they are officers if the Employer has 500 or more
Employees. The number of Employees for any Plan Year is the greatest number
of Employees during the determination period. Officers who are employees
described in Code Section 414(q)(8) shall be excluded. If the Employer has
more than the maximum number of officers to be treated as Key Employees,
the officers shall be ranked by amount of annual Compensation (as defined
in this section), and those with the greater amount of annual Compensation
during the determination period shall be treated as Key Employees. To
determine the ten Employees owning the largest interests in the Employer,
if more than one Employee has the same ownership interest, the Employee(s)
having the greater annual Compensation shall be treated as owning the
larger interest(s). The determination of who is a Key Employee shall be
made according to Code Section 416(i)(1) and the regulations thereunder.
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<PAGE> 70
Non-key Employee means a person who is a non-key employee within the
meaning of Code Section 416 and regulations thereunder.
Present Value means the present value of a participant's accrued benefit
under a defined benefit plan as of his normal retirement age (attained age
if later) or, if the plan provides non-proportional subsidies, the age at
which the benefit is most valuable. The accrued benefit of any Employee
(other than a Key Employee) shall be determined under the method which is
used for accrual purposes for all plans of the Employer or if there is no
one method which is used for accrual purposes for all plans of the
Employer, as if such benefit accrued not more rapidly than the slowest
accrual rate permitted under Code Section 411(b)(1)(C). For purposes of
establishing Present Value, any benefit shall be discounted only for 7.5%
interest and mortality according to the 1971 Group Annuity Table (Male)
without the 7% margin but with projection by Scale E from 1971 to the later
of (a) 1974, or (b) the year determined by adding the age to 1920, and
wherein for females the male age six years younger is used. If the Present
Value of accrued benefits is determined for a participant under more than
one defined benefit plan included in the Aggregation Group, all such plans
shall use the same actuarial assumptions to determine the Present Value.
Top-heavy Plan means a plan which is a top-heavy plan for any plan year
beginning after December 31, 1983. This Plan shall be a Top-heavy Plan if
(a) the Top-heavy Ratio for this Plan alone exceeds 60 percent and this
Plan is not part of any required Aggregation Group or permissive
Aggregation Group.
(b) this Plan is a part of a required Aggregation Group, but not part of a
permissive Aggregation Group, and the Top-heavy Ratio for the required
Aggregation Group exceeds 60 percent.
(c) this Plan is a part of a required Aggregation Group and part of a
permissive Aggregation Group and the Top-heavy Ratio for the
permissive Aggregation Group exceeds 60 percent.
Top-heavy Ratio means the ratio calculated below for this Plan or for the
Aggregation Group.
(a) If the Employer maintains one or more defined contribution plans
(including any simplified employee pension plan) and the Employer has
not maintained any defined benefit plan which during the five-year
period ending on the determination date has or has had accrued
benefits, the Top-heavy Ratio for this Plan alone or for the required
or permissive Aggregation Group as appropriate is a fraction, the
numerator of which is the sum of the account balances of all Key
Employees as of the determination date and the denominator of which is
the sum of all account balances of all employees as of the
determination date. Both the numerator and denominator of the
Top-heavy Ratio are adjusted for any distribution of an account
balance (including those made from terminated plan(s) of the Employer
which would have been part of the required Aggregation Group had such
plan(s) not been terminated) made in the five-year period ending on
the determination date. Both the numerator and denominator of the
Top-heavy Ratio are increased to reflect any contribution not actually
made as of the Determination Date, but which is required to be taken
into account on that date under Code Section 416 and the regulations
thereunder.
(b) If the Employer maintains one or more defined contribution plans
(including any simplified employee pension plan) and the Employer
maintains or has maintained one or more defined benefit
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<PAGE> 71
plans which during the five-year period ending on the determination
date has or has had accrued benefits, the Top-heavy Ratio for any
required or permissive Aggregation Group as appropriate is a fraction,
the numerator of which is the sum of the account balances under the
defined contribution plan(s) of all Key Employees and the Present
Value of accrued benefits under the defined benefit plan(s) for all
Key Employees, and the denominator of which is the sum of the account
balances under the defined contribution plan(s) for all employees and
the Present Value of accrued benefits under the defined benefit plans
for all employees. Both the numerator and denominator of the Top-heavy
Ratio are adjusted for any distribution of an account balance or an
accrued benefit (including those made from terminated plan(s) of the
Employer which would have been part of the required Aggregation Group
had such plan(s) not been terminated) made in the five-year period
ending on the determination date.
(c) For purposes of (a) and (b) above, the value of account balances and
the Present Value of accrued benefits will be determined as of the
most recent valuation date that falls within or ends with the 12-month
period ending on the determination date, except as provided in Code
Section 416 and the regulations thereunder for the first and second
plan years of a defined benefit plan. The account balances and accrued
benefits of an employee who is not a Key Employee but who was a Key
Employee in a prior year will be disregarded. The calculation of the
Top-heavy Ratio and the extent to which distributions, rollovers and
transfers during the five-year period ending on the determination date
are to be taken into account, shall be determined according to the
provisions of Code Section 416 and regulations thereunder. The account
balances and accrued benefits of an individual who has performed no
service for the Employer during the five-year period ending on the
determination date shall be excluded from the Top-heavy Ratio until
the time the individual again performs service for the Employer.
Deductible employee contributions will not be taken into account for
purposes of computing the Top-heavy Ratio. When aggregating plans, the
value of account balances and accrued benefits will be calculated with
reference to the determination dates that fall within the same
calendar year.
Account, as used in this definition, means the value of an employee's
account under one of the Employer's retirement plans on the latest
valuation date. In the case of a money purchase plan or target benefit
plan, such value shall be adjusted to include any contributions made for or
by the employee after the valuation date and on or before such
determination date or due to be made as of such determination date but not
yet forwarded to the insurer or trustee. In the case of a profit sharing
plan, such value shall be adjusted to include any contributions made for or
by the employee after the valuation date and on or before such
determination date. During the first Year of any profit sharing plan such
adjustment in value shall include contributions made after such
determination date that are allocated as of a date in such Year. The
nondeductible employee contributions which an employee makes under a
defined benefit plan of the Employer shall be treated as if they were
contributions under a separate defined contribution plan.
Valuation Date means, as to this Plan, the last day of the last calendar
month ending in a Year.
Year means the Plan Year unless another year is specified by the Employer
in a separate written resolution in accordance with regulations issued by
the Secretary of the Treasury or his delegate.
SECTION 10.03--MODIFICATION OF VESTING REQUIREMENTS.
If a Participant's Vesting Percentage determined under Article I is not at
least as great as his Vesting Percentage would be if it were determined under a
schedule permitted in Code Section 416, the following shall
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<PAGE> 72
apply. During any Year in which the Plan is a Top-heavy Plan, the Participant's
Vesting Percentage shall be the greater of the Vesting Percentage determined
under Article I or the schedule below.
<TABLE>
<CAPTION>
VESTING SERVICE NONFORFEITABLE
(whole years) PERCENTAGE
<S> <C>
Less than 2 0
2 20
3 40
4 60
5 80
6 or more 100
</TABLE>
The schedule above shall not apply to Participants who are not credited
with an Hour-of-Service after the Plan first becomes a Top-heavy Plan. The
Vesting Percentage determined above applies to all of the Participant's Account
resulting from Employer Contributions, including Contributions the Employer
makes before the TEFRA Compliance Date or when the Plan is not a Top-heavy Plan.
If, in a later Year, this Plan is not a Top-heavy Plan, a Participant's
Vesting Percentage shall be determined under Article I. A Participant's Vesting
Percentage determined under either Article I or the schedule above shall never
be reduced and the election procedures of the AMENDMENTS SECTION of Article IX
shall apply when changing to or from the schedule as though the automatic change
were the result of an amendment.
The part of the Participant's Vested Account resulting from the minimum
contributions required pursuant to the MODIFICATION OF CONTRIBUTIONS SECTION of
Article X shall not be forfeited because of a period of reemployment after
benefit payments have begun.
SECTION 10.04--MODIFICATION OF CONTRIBUTIONS.
During any Year in which this Plan is a Top-heavy Plan, the Employer shall
make a minimum contribution or allocation on the last day of the Year for each
person who is a Non-key Employee on that day and who either was or could have
been an Active Participant during the Year. A Non-key Employee is not required
to have a minimum number of hours-of-service or minimum amount of Compensation,
or to have had any Elective Deferral Contributions made for him in order to be
entitled to this minimum. The minimum contribution or allocation for such person
shall be equal to the lesser of (a) or (b) below:
(a) Three percent of such person's Compensation (as defined in this
article).
(b) The "highest percentage" of Compensation (as defined in this article)
for such Year at which the Employer's contributions are made for or
allocated to any Key Employee. The highest percentage shall be
determined by dividing the Employer Contributions made for or
allocated to each Key Employee during such Year by the amount of his
Compensation (as defined in this article), which is not more than the
maximum set out above, and selecting the greatest quotient (expressed
as a percentage). To determine the highest percentage, all of the
Employer's defined contribution plans within the Aggregation Group
shall be treated as one plan. The provisions of this paragraph shall
not apply if this Plan and a defined benefit plan of the Employer are
required to be included in
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the Aggregation Group and this Plan enables the defined benefit plan
to meet the requirements of Code Section 401(a)(4) or Code Section
410.
If the Employer's contributions and allocations otherwise required under
the defined contribution plan(s) are at least equal to the minimum above, no
additional contribution or reallocation shall be required. If the Employer's
contributions and allocations are less than the minimum above and Employer
Contributions under this Plan are allocated to Participants, any Employer
Contributions (other than those which are allocated on the basis of the amount
made for such person) shall be reallocated to provide the minimum. The remaining
Contributions shall be allocated as provided in the preceding articles of this
Plan taking into account any amount which was reallocated to provide the
minimum. If the Employer's total contributions and allocations are less than the
minimum above after any reallocation provided above, the Employer shall
contribute the difference for the Year.
The minimum contribution or allocation applies to all of the Employer's
defined contribution plans in the aggregate which are Top-heavy Plans. If an
additional contribution or allocation is required to meet the minimum above, it
shall be provided in this Plan.
A minimum allocation under a profit sharing plan shall be made without
regard to whether or not the Employer has profits.
If a person who is otherwise entitled to a minimum contribution or
allocation above is also covered under a defined benefit plan of the Employer's
which is a Top-heavy Plan during that same Year, the minimum benefits for him
shall not be duplicated. The defined benefit plan shall provide an annual
benefit for him on, or adjusted to, a straight life basis of the lesser of (c)
two percent of his average pay multiplied by his years of service or (d) twenty
percent of his average pay. Average pay and years of service shall have the
meaning set forth in such defined benefit plan for this purpose.
For purposes of this section, any employer contribution made according to a
salary reduction or similar arrangement shall not apply before the first Yearly
Date in 1985. On and after the first Yearly Date in 1989, any such employer
contributions and employer contributions which are matching contributions, as
defined in Code Section 401(m), shall not apply in determining if the minimum
contribution requirement has been met, but shall apply in determining the
minimum contribution required. Forfeitures credited to a Participant's Account
are treated as employer contributions.
The requirements of this section shall be met without regard to
contributions under Chapter 2 of the Code (relating to tax on self-employment),
Chapter 21 of the Code (relating to Federal Insurance Contributions Act), Title
II of the Social Security Act or any other Federal or state law.
SECTION 10.05--MODIFICATION OF CONTRIBUTION LIMITATION.
If the provisions of subsection (e) of the CONTRIBUTION LIMITATION SECTION
of Article III are applicable for any Limitation Year during which this Plan is
a Top-heavy Plan, the benefit limitations shall be modified. The definitions of
Defined Benefit Plan Fraction and Defined Contribution Plan Fraction in the
CONTRIBUTION LIMITATION SECTION of Article III shall be modified by substituting
"1.0" in lieu of "1.25." The optional denominator for determining the Defined
Contribution Plan Fraction shall be modified by substituting "$41,500" in lieu
of "$51,875." In addition, an adjustment shall be made to the numerator of the
Defined Contribution Plan Fraction. The adjustment is a reduction of that
numerator similar to the modification
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of the Defined Contribution Plan Fraction described in the CONTRIBUTION
LIMITATION SECTION of Article III, and shall be made with respect to the last
Plan Year beginning before January 1, 1984.
The modifications in the paragraph above shall not apply with respect to a
Participant so long as employer contributions, forfeitures or nondeductible
employee contributions are not credited to his account under this or any of the
Employer's other defined contribution plans and benefits do not accrue for such
Participant under the Employer's defined benefit plan(s), until the sum of his
Defined Contribution and Defined Benefit Plan Fractions is less than 1.0.
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<PAGE> 75
PLAN EXECUTION
By executing this Plan, the Primary Employer acknowledges having counseled
to the extent necessary with selected legal and tax advisors regarding the
Plan's legal and tax implications.
Executed this 30th day of June, 1997.
BRUNSWICK TECHNOLOGIES, INC.
By: /s/ Martin S. Grimnes
--------------------------------------
Chief Executive Officer
--------------------------------------
Title
76
<PAGE> 1
EXHIBIT 15
LETTER RE: UNAUDITED INTERIM FINANCIAL INFORMATION
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
RE: Brunswick Technologies, Inc.
Registration on Form S-8
We are aware that our reports dated October 27, 1997, July 18, 1997 and April
28, 1997 on our reviews of interim financial information of Brunswick
Technologies, Inc. as of September 30, 1997, June 30, 1997 and March 31, 1997,
filed with the Company's quarterly reports on Form 10-Q, are incorporated
by reference in the Company's registration statements on Form S-8. Pursuant
to rule 436(c) under the Securities Act of 1933, this report should not be
considered a part of the Registration Statements prepared or certified by us
within the meaning of Sections 7 and 11 of that Act.
/s/ Coopers & Lybrand L.L.P.
Portland, Maine
March 11, 1998
<PAGE> 1
EXHIBIT 23b
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Brunswick Technologies, Inc. on Form S-8 of our report dated February 28, 1997,
on our audits of the consolidated financial statements of Brunswick
Technologies, Inc. as of December 31, 1996 and 1995, and for the years then
ended, which report appears in the Company's Annual Report on Form 10-K.
/s/ Coopers & Lybrand L.L.P.
Portland, Maine
March 11, 1998.
<PAGE> 1
EXHIBIT 23c
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
Brunswick Technologies, Inc.
We consent to incorporation by reference in the registration statement on Form
S-8 of Brunswick Technologies, Inc. of our report dated January 20, 1995,
relating to the statements of income, stockholders' equity, and cash flows of
Brunswick Technologies, Inc. for the year ended December 31, 1994, which the
report appears in the December 31, 1996 annual report on Form 10-K of Brunswick
Technologies, Inc.
/s/ KPMG Peat Marwick LLP
Boston, Massachusetts
March 11, 1998.
<PAGE> 1
Exhibit 24
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Martin S. Grimnes, individually, his
attorney-in-fact, with the power of substitution, for him in any and all
capacities, to sign any and all amendments to this Registration Statement
(including post-effective amendments), and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that said
attorney-in-fact, or his respective substitutes, may do or cause to be done by
virtue hereof.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Martin S. Grimnes Chairman, Chief Executive March 13, 1998
- ----------------------------- Officer and Director
Martin S. Grimnes (Principal Executive Officer)
/s/ David M. Coit Director March 13, 1998
- -----------------------------
David M. Coit
/s/ Max G. Pitcher Director March 13, 1998
- -----------------------------
Max G. Pitcher
/s/ David E. Sharpe Director March 13, 1998
- -----------------------------
David E. Sharpe
/s/ Peter N. Walmsley Director March 13, 1998
- -----------------------------
Peter N. Walmsley
/s/ Alan Chesney Interim Chief Financial March 13, 1998
- ----------------------------- Officer (Principal Financial
Alan Chesney and Accounting Officer)
/s/ William M. Dubay President, Chief Operating March 13, 1998
- ----------------------------- Officer and Director
William M. Dubay
/s/ Donald R. Hughes Director March 13, 1998
- -----------------------------
Donald R. Hughes
/s/ Thomas L. Wallace Vice President of
- ----------------------------- Manufacturing March 13, 1998
Thomas L. Wallace (For the Company as Trustee
of the Plan)
</TABLE>
