<PAGE> 1
As filed with the Securities and Exchange Commission on July 1, 1998.
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PIONEER COMPANIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 06-1215192
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
700 LOUISIANA
SUITE 4300
HOUSTON, TEXAS 77002
(ADDRESS, INCLUDING ZIP CODE, OF PRINCIPAL EXECUTIVE OFFICES)
THE PIONEER COMPANIES SAVINGS PLAN FOR SALARIED EMPLOYEES,
THE PIONEER COMPANIES SAVINGS PLAN FOR HENDERSON BARGAINING UNIT EMPLOYEES,
THE PIONEER COMPANIES SAVINGS PLAN FOR TACOMA BARGAINING UNIT EMPLOYEES,
THE KEMWATER NORTH AMERICA SAVINGS PLAN, AND
THE ALL PURE SAVINGS PLAN
(FULL TITLE OF THE PLANS)
KENT R. STEPHENSON
VICE PRESIDENT, GENERAL COUNSEL
AND SECRETARY
700 LOUISIANA, SUITE 4300
HOUSTON, TEXAS 77002
(713) 570-3200
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPY TO:
JOHN T. CABANISS, ESQ.
ANDREWS & KURTH L.L.P.
600 TRAVIS, SUITE 4200
HOUSTON, TEXAS 77002
---------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=======================================================================================================================
PROPOSED
PROPOSED MAXIMUM
AMOUNT MAXIMUM AGGREGATE AMOUNT OF
TO BE OFFERING PRICE OFFERING REGISTRATION
TITLE OF SECURITIES TO BE REGISTERED REGISTERED (1)(2)(4) PER SHARE (3) PRICE (3) FEE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Stock, par value $0.01 per share 250,000 $8.0625 $2,015,625 $595.00
======================================================================================================================
</TABLE>
(1) The number of shares of Class A Common Stock registered herein is subject
to adjustment to prevent dilution resulting from stock splits, stock
dividends or similar transactions.
(2) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
Registration Statement also covers an indeterminate amount of plan
interests to be offered or sold pursuant to the Plans. In accordance with
Rule 457(h)(2), no separate fee calculations are made for plan interests.
(3) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(h) under the Securities Act, based
upon the average of the high and low prices of the registrant's Common
Stock on the Nasdaq National Market as reported in The Wall Street Journal
on June 29, 1998.
(4) Includes 125,000 shares offered pursuant to the Pioneer Companies Savings
Plan for Salaried Employees, 32,500 shares offered pursuant to the Pioneer
Companies Savings Plan for Henderson Bargaining Unit Employees, 32,500
shares offered pursuant to the Pioneer Companies Savings Plan for Tacoma
Bargaining Unit Employees, 30,000 shares offered pursuant to the Kemwater
North America Savings Plan and 30,000 shares offered pursuant to the All
Pure Savings Plan.
================================================================================
<PAGE> 2
PART I
INFORMATION REQUIRED IN SECTION 10(A) PROSPECTUS
The document(s) containing the information specified in Part I of Form
S-8 will be sent or given to participating employees as specified by Rule
428(b)(1) of the Securities Act of 1933, as amended (the "Securities Act").
These documents and the documents incorporated herein by reference pursuant to
Item 3 of Part II of this Registration Statement, taken together, constitute a
prospectus that meets the requirements of Section 10(a) of the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
Pioneer Companies, Inc. (the "Company") incorporates herein by reference
the following documents as of their respective dates as filed with the
Securities and Exchange Commission (the "Commission"):
(a) The Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1997;
(b) The Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended March 31, 1998; and
(c) The description of the Company's Class A common
stock, par value $0.01 per share, contained in the
Company's Registration Statement on Form 8-A, as
amended (No. 001-09859), filed with the Commission
on March 1, 1988.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering made hereby shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of filing
of such documents. Any statement contained herein or in a document incorporated
or deemed to be incorporated herein by reference shall be deemed to be modified
or superseded for purposes of the Registration Statement and the Prospectus to
the extent that a statement contained herein or in any subsequently filed
document which also is, or is deemed to be, incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of the Registration Statement or the Prospectus.
ITEM 4. DESCRIPTION OF SECURITIES.
The information required by Item 4 is not applicable to this
Registration Statement since the class of securities to be offered is registered
under Section 12 of the Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
None
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subsection (a) of Section 145 of the General Corporation Law of the
State of Delaware empowers a corporation to 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 (other than an action by or in the right of the corporation) by
reason of the fact that he 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, employee or agent of another
1
<PAGE> 3
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification may be made in
respect of any claim, issue or matter as to which such person shall have been
made to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
Section 145 further provides that to the extent a director or officer
of a corporation has been successful on the merits or otherwise in the defense
of any action, suit or proceeding referred to in subsections (a) and (b) of
Section 145 in the defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith; that indemnification provided for by
Section 145 shall not be deemed exclusive of any other rights to which the
indemnified party may be entitled; that indemnification provided for by Section
145 shall, unless otherwise provided when authorized or ratified, continue as to
a person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of such person's heirs, executors and administrators; and
empowers the corporation to purchase and maintain insurance on behalf of a
director or officer of the corporation against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as
such whether or not the corporation would have the power to indemnify him
against such liabilities under Section 145.
Section 102(b)(7) of the General Corporation Law of the State of
Delaware provides that a certificate of incorporation may contain a provision
eliminating or limiting the personal liability of a director to the corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director provided that such provision shall not eliminate or limit the liability
of a director (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, or (iv) for any transaction
from which the director derived an improper personal benefit.
Article Seventh of the Company's Third Restated Certificate of
Incorporation, as amended, states that:
No director shall be personally liable to the Corporation or its
stockholders for monetary damages for any breach of fiduciary duty by
such director as a director. Notwithstanding the foregoing sentence, a
director shall be liable to the extent provided by applicable law (i)
for any breach of the director's duty of loyalty to the Corporation or
its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii)
pursuant to section 174 of the GCL or (iv) for any transaction from
which the director derived an improper personal benefit.
In addition, Section 8 of the Company's Bylaws, further provide that
the Company shall indemnify its officers, directors and employees to the fullest
extent permitted by law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
2
<PAGE> 4
The information required by Item 7 is not applicable to this
Registration Statement.
ITEM 8. EXHIBITS.
Exhibit
Number Description
4.1 Third Restated Certificate of Incorporation of Pioneer Companies,
Inc. (filed as Exhibit 3.1 to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1993, and incorporated
herein by reference).
4.2 Amendment to Third Restated Certificate of Incorporation of Pioneer
Companies, Inc. (filed as Exhibit 3.1(b) to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1995 and
incorporated herein by reference).
4.3 Amendment to Third Restated Certificate of Incorporation of Pioneer
Companies, Inc. (filed as Exhibit 3.1(c) to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1995 and
incorporated herein by reference).
4.4 Bylaws of Pioneer Companies, Inc. (filed as Exhibit 3.2 to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1988 and incorporated herein by reference).
4.5* The Pioneer Companies Savings Plan for Salaried Employees.
4.6* The Pioneer Companies Savings Plan for Henderson Bargaining Unit
Employees.
4.7* The Pioneer Companies Savings Plan for Tacoma Bargaining Unit
Employees.
4.8* The Kemwater North America Savings Plan Adoption Agreement.
4.9* The All Pure Savings Plan Adoption Agreement.
4.10* Connecticut General Life Insurance Company Defined Contribution
Plan-Basic Plan Document Number 03.
5.1* Opinion of Andrews & Kurth L.L.P. as to the legality of the shares
being registered.
23.1* Consent of Deloitte & Touche LLP.
23.2* Consent of Ernst & Young LLP.
23.3* Consent of Andrews & Kurth L.L.P. (included in the opinion filed as
Exhibit 5.1 to this Registration Statement).
24.1* Power of Attorney (set forth on the signature page contained in Part
II of this Registration Statement).
- ----------------------------
*filed herewith
ITEM 9. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
3
<PAGE> 5
(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 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 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;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in
the registration statement.
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
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.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act 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 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to 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 therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described in Item 6 of this
Registration Statement, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1993 and will be governed by the
final adjudication of such issue.
4
<PAGE> 6
SIGNATURES
THE REGISTRANT
Pursuant to the requirements of the Securities Act, Pioneer Companies,
Inc. certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas on July 1, 1998.
PIONEER COMPANIES, INC.
(Registrant)
By: /s/ KENT R. STEPHENSON
--------------------------------
Kent R. Stephenson
Vice President, General
Counsel and Secretary
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers and
directors of PIONEER COMPANIES, INC. (the "Company") hereby constitutes and
appoints Michael J. Ferris and Philip J. Ablove, or either of them (with full
power to each of them to act alone), his true and lawful attorney-in-fact and
agent, with full power of substitution, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute and file this
Registration Statement under the Securities Act of 1933, as amended, and any or
all amendments (including, without limitation, post-effective amendments), with
all exhibits and any and all documents required to be filed with respect
thereto, with the Securities and Exchange Commission or any regulatory
authority, granting unto such attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as he himself might or
could do, if personally present, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their substitute or
substitutes, may lawfully do or cause to be done.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES AND
ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ MICHAEL J. FERRIS
- ------------------------------------------------------ President and Chief Executive July 1, 1998
(Michael J. Ferris) Officer and Director
/s/ PHILIP J. ABLOVE Vice President and Chief July 1, 1998
- ------------------------------------------------------ Financial Officer and Director
(Philip J. Ablove) (Principal Financial Officer)
/s/ JOHN R. BEAVER Controller (Principal July 1, 1998
- ------------------------------------------------------ Accounting Officer)
(John R. Beaver)
/s/ WILLIAM R. BERKLEY
- ----------------------------------------------------- Chairman of the Board July 1, 1998
(William R. Berkley)
/s/ ANDREW M. BURSKY
- ------------------------------------------------------ Director July 1, 1998
(Andrew M. Bursky)
</TABLE>
5
<PAGE> 7
<TABLE>
<S> <C> <C>
/s/ DONALD J. DONAHUE
- ------------------------------------------------------ Director July 1, 1998
(Donald J. Donahue)
/s/ RICHARD C. KELLOGG, JR.
- ------------------------------------------------------ Director July 1, 1998
(Richard C. Kellogg, Jr.)
/s/ JOHN R. KENNEDY
- ------------------------------------------------------ Director July 1, 1998
(John R. Kennedy)
/s/ JACK H. NUSBAUM
- ------------------------------------------------------ Director July 1, 1998
(Jack H. Nusbaum)
/s/ THOMAS H. SCHNITZIUS
- ------------------------------------------------------ Director July 1, 1998
(Thomas H. Schnitzius)
</TABLE>
6
<PAGE> 8
SIGNATURES
The Plans. Pursuant to the requirements of the Securities Act of 1933, as
amended, the Administrators of the Plans have duly caused this registration
statement to be signed on their behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on the 1st day of July,
1998.
By: The Pioneer Companies Savings Plan for Salaried
Employees
The Pioneer Companies Savings Plan for Henderson
Bargaining Unit Employees
The Pioneer Companies Savings Plan for Tacoma
Bargaining Unit Employees
By: Pioneer Chlor Alkali Company, Inc. Employee
Benefits Committee
By: /s/ JERRY BRADLEY
-------------------------------------------------
Name: Jerry Bradley
Title: Chairman
By: The Kemwater North America Savings Plan
By: Kemwater North America Company Employee
Benefits Committee
By: /s/ JERRY BRADLEY
-------------------------------------------------
Name: Jerry Bradley
Title: Chairman
By: The All Pure Savings Plan
By: All-Pure Chemical Co. Employee Benefits
Committee
By: /s/ JERRY BRADLEY
-------------------------------------------------
Name: Jerry Bradley
Title: Chairman
7
<PAGE> 9
Index to Exhibits
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
4.1 Third Restated Certificate of Incorporation of Pioneer Companies,
Inc. (filed as Exhibit 3.1 to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1993, and incorporated
herein by reference).
4.2 Amendment to Third Restated Certificate of Incorporation of Pioneer
Companies, Inc. (filed as Exhibit 3.1(b) to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1995 and
incorporated herein by reference).
4.3 Amendment to Third Restated Certificate of Incorporation of Pioneer
Companies, Inc. (filed as Exhibit 3.1(c) to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1995 and
incorporated herein by reference).
4.4 Bylaws of Pioneer Companies, Inc. (filed as Exhibit 3.2 to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1988 and incorporated herein by reference).
4.5* The Pioneer Companies Savings Plan for Salaried Employees.
4.6* The Pioneer Companies Savings Plan for Henderson Bargaining Unit
Employees.
4.7* The Pioneer Companies Savings Plan for Tacoma Bargaining Unit
Employees.
4.8* The Kemwater North America Savings Plan Adoption Agreement.
4.9* The All Pure Savings Plan Adoption Agreement.
4.10* Connecticut General Life Insurance Company Defined Contribution
Plan-Basic Plan Document Number 03.
5.1* Opinion of Andrews & Kurth L.L.P. as to the legality of the shares
being registered.
23.1* Consent of Deloitte & Touche LLP.
23.2* Consent of Ernst & Young LLP.
23.3* Consent of Andrews & Kurth L.L.P. (included in the opinion filed as
Exhibit 5.1 to this Registration Statement).
24.1* Power of Attorney (set forth on the signature page contained in Part
II of this Registration Statement).
- ----------------------------
*filed herewith
8
<PAGE> 1
EXHIBIT 4.5
PIONEER COMPANIES
SAVINGS PLAN FOR SALARIED EMPLOYEES
<PAGE> 2
INDEX
<TABLE>
<S> <C>
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
1.1 Account or Accounts . . . . . . . . . . . . . . . . . . . . I-1
1.2 Actual Deferral Percentage . . . . . . . . . . . . . . . . . I-1
1.3 Affiliated Company . . . . . . . . . . . . . . . . . . . . . I-1
1.4 Aggregation Group . . . . . . . . . . . . . . . . . . . . . I-1
1.5 Annual Additions . . . . . . . . . . . . . . . . . . . . . . I-2
1.6 Annual Benefit . . . . . . . . . . . . . . . . . . . . . . . I-2
1.7 Applicable Compensation . . . . . . . . . . . . . . . . . . I-2
1.8 Board of Directors . . . . . . . . . . . . . . . . . . . . . I-3
1.9 Break in Service . . . . . . . . . . . . . . . . . . . . . . I-3
1.10 Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3
1.11 Committee . . . . . . . . . . . . . . . . . . . . . . . . . I-3
1.12 Company Stock . . . . . . . . . . . . . . . . . . . . . . . I-3
1.13 Compensation . . . . . . . . . . . . . . . . . . . . . . . . I-3
1.14 Corporation . . . . . . . . . . . . . . . . . . . . . . . . I-4
1.15 Determination Date . . . . . . . . . . . . . . . . . . . . . I-4
1.16 Effective Date of the Plan . . . . . . . . . . . . . . . . . I-4
1.17 Eligible Class . . . . . . . . . . . . . . . . . . . . . . . I-4
1.18 Employee . . . . . . . . . . . . . . . . . . . . . . . . . . I-4
1.19 Employer or Employers . . . . . . . . . . . . . . . . . . . I-4
1.20 Employer Contribution . . . . . . . . . . . . . . . . . . . I-4
1.21 Employer Contribution Account . . . . . . . . . . . . . . . I-4
1.22 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4
1.23 Excess Annual Additions . . . . . . . . . . . . . . . . . . I-4
1.24 Excess Contributions . . . . . . . . . . . . . . . . . . . . I-5
1.25 Highly Compensated Employee . . . . . . . . . . . . . . . . I-5
1.26 Hour of Service . . . . . . . . . . . . . . . . . . . . . . I-5
1.27 Investment Manager . . . . . . . . . . . . . . . . . . . . . I-6
1.28 Key Employee . . . . . . . . . . . . . . . . . . . . . . . . I-6
1.29 Leased Employee . . . . . . . . . . . . . . . . . . . . . . I-7
1.30 Maximum Permissible Amount . . . . . . . . . . . . . . . . . I-7
1.31 Member . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
1.32 Non-Highly Compensated Employee . . . . . . . . . . . . . . I-7
1.33 Non-Key Employee . . . . . . . . . . . . . . . . . . . . . . I-7
1.34 Participating Company . . . . . . . . . . . . . . . . . . . I-7
1.35 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
1.36 Plan Year . . . . . . . . . . . . . . . . . . . . . . . . . I-7
1.37 Retirement Date . . . . . . . . . . . . . . . . . . . . . . I-7
1.38 Rollover Account . . . . . . . . . . . . . . . . . . . . . . I-7
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C>
1.39 Salary Deferral Contribution . . . . . . . . . . . . . . . . I-7
1.40 Salary Deferral Contribution Account . . . . . . . . . . . . I-8
1.41 Savings Contributions . . . . . . . . . . . . . . . . . . . . I-8
1.42 Savings Contribution Account . . . . . . . . . . . . . . . . I-8
1.43 Spouse. . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
1.44 Top-Heavy Group . . . . . . . . . . . . . . . . . . . . . . I-8
1.45 Total Compensation . . . . . . . . . . . . . . . . . . . . . I-8
1.46 Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
1.47 Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . I-8
1.48 Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
1.49 Valuation Date . . . . . . . . . . . . . . . . . . . . . . . I-9
1.50 Year of Service . . . . . . . . . . . . . . . . . . . . . . I-9
ARTICLE II PROFIT SHARING PLAN. . . . . . . . . . . . . . . . . . . . . . . II-1
2.1 Profits: . . . . . . . . . . . . . . . . . . . . . . . . . . II-1
ARTICLE III ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . . . . . III-1
3.1 Employees Eligible . . . . . . . . . . . . . . . . . . . . III-1
3.2 Savings Contribution or Salary Deferral Contribution
Authorization Required. . . . . . . . . . . . . . . . . . . III-1
3.3 Contributions Voluntary . . . . . . . . . . . . . . . . . . III-1
3.4 Transfers of Employment . . . . . . . . . . . . . . . . . . III-1
ARTICLE IV CONTRIBUTIONS AND VESTING. . . . . . . . . . . . . . . . . . . . IV-1
4.1 Savings Contributions . . . . . . . . . . . . . . . . . . . . IV-1
4.2 Salary Deferral Contributions . . . . . . . . . . . . . . . . IV-1
4.3 Matching Employer Contributions . . . . . . . . . . . . . . . IV-2
4.4 Change in Contribution Rate . . . . . . . . . . . . . . . . . IV-2
4.5 Voluntary Suspension of Contributions . . . . . . . . . . . IV-3
4.6 Actual Deferral Percentage. . . . . . . . . . . . . . . . . . IV-3
4.7 Actual Deferral Percentage Test . . . . . . . . . . . . . . . IV-3
4.8 Adjustments as a Result of Actual Deferral Percentage Test. . IV-4
4.9 Maximum Contribution Percentage . . . . . . . . . . . . . . . IV-5
4.10 Adjustments For Excessive Contribution Percentage . . . . . IV-6
4.11 Maximum Annual Additions . . . . . . . . . . . . . . . . . . IV-6
4.12 Rollover Contributions . . . . . . . . . . . . . . . . . . . IV-9
4.13 Vesting . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-9
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE V INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1
5.1 Direction of Investments . . . . . . . . . . . . . . . . . . V-1
5.2 Company Stock Fund . . . . . . . . . . . . . . . . . . . . . V-1
ARTICLE VI PAYMENT OF CONTRIBUTIONS AND ALLOCATIONS . . . . . . . . . . . . VI-1
6.1 Payment Of Contributions . . . . . . . . . . . . . . . . . . VI-1
6.2 Valuation Of Trust Fund . . . . . . . . . . . . . . . . . . VI-1
6.3 Funding Policy . . . . . . . . . . . . . . . . . . . . . . . VI-1
ARTICLE VII DISTRIBUTION OF ACCOUNTS. . . . . . . . . . . . . . . . . . . VII-1
7.1 Time of Distribution . . . . . . . . . . . . . . . . . . . VII-1
7.2 Distributions From Accounts Following Separation From
Service. . . . . . . . . . . . . . . . . . . . . . . VII-2
7.3 Partial Withdrawals . . . . . . . . . . . . . . . . . . . VII-2
7.4 Total Withdrawal . . . . . . . . . . . . . . . . . . . . . VII-2
7.5 Special Withdrawal After Attainment of Age 59-1/2 . . . . VII-3
7.6 Hardship Withdrawals . . . . . . . . . . . . . . . . . . . VII-3
7.7 Loans to Members . . . . . . . . . . . . . . . . . . . . . VII-4
7.8 Methods of Distribution . . . . . . . . . . . . . . . . . VII-6
7.9 Election to Receive an Annuity . . . . . . . . . . . . . . VII-7
7.10 Pre-retirement Survivor Annuity . . . . . . . . . . . . . VII-7
7.11 Election Not to Receive the Pre-retirement Survivor
Annuity. . . . . . . . . . . . . . . . . . . . . . . VII-8
7.12 Direct Rollover . . . . . . . . . . . . . . . . . . . . . VII-8
7.13 30-Day Waiver . . . . . . . . . . . . . . . . . . . . . . VII-9
7.14 Forfeitures . . . . . . . . . . . . . . . . . . . . . . . VII-9
ARTICLE VIII AUTHORIZED ABSENCES . . . . . . . . . . . . . . . . . . . . VIII-1
8.1 Authorized Absences . . . . . . . . . . . . . . . . . . . VIII-1
8.2 Effect of Authorized Absences . . . . . . . . . . . . . . VIII-1
ARTICLE IX BENEFICIARIES IN THE EVENT OF DEATH. . . . . . . . . . . . . . . IX-1
9.1 Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . IX-1
ARTICLE X ADMINISTRATION. . . . . . . . . . . . . . . . . . . . . . . . . . X-1
10.1 Administrative Committee . . . . . . . . . . . . . . . . . . X-1
10.2 Power of the Committee . . . . . . . . . . . . . . . . . . . X-1
10.3 Duties of the Committee . . . . . . . . . . . . . . . . . . X-2
</TABLE>
-iii-
<PAGE> 5
<TABLE>
<S> <C>
10.4 Accounts Records . . . . . . . . . . . . . . . . . . . . . . X-3
10.5 Allocation of Responsibility Among Fiduciaries for Plan and
Trust Fund Administration . . . . . . . . . . . . . . X-3
10.6 Presenting Claims for Benefit . . . . . . . . . . . . . . . X-4
10.7 Claim Review Procedure . . . . . . . . . . . . . . . . . . . X-5
10.8 Disputed Benefit . . . . . . . . . . . . . . . . . . . . . . X-5
10.9 Unclaimed Benefit . . . . . . . . . . . . . . . . . . . . . X-5
ARTICLE XI TRUST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-1
11.1 Establishment . . . . . . . . . . . . . . . . . . . . . . . XI-1
11.2 Exclusive Investments . . . . . . . . . . . . . . . . . . . XI-1
11.3 Beneficial Interests . . . . . . . . . . . . . . . . . . . . XI-1
11.4 Separate Accounts . . . . . . . . . . . . . . . . . . . . . XI-1
11.5 Company Stock . . . . . . . . . . . . . . . . . . . . . . . XI-1
ARTICLE XII TERMINATION, AMENDMENT AND MODIFICATION OF THE PLAN . . . . . XII-1
12.1 Powers Reserved . . . . . . . . . . . . . . . . . . . . . XII-1
12.2 Effect of Termination . . . . . . . . . . . . . . . . . . XII-1
12.3 Merger of Plan with Another Plan . . . . . . . . . . . . . XII-1
ARTICLE XIII EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . XIII-1
13.1 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . XIII-1
13.2 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . XIII-1
ARTICLE XIV MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . XIV-1
14.1 Terms of Employment . . . . . . . . . . . . . . . . . . . XIV-1
14.2 Controlling Laws; Government Regulations . . . . . . . . . XIV-1
14.3 Invalidity of Particular Provisions . . . . . . . . . . . XIV-1
14.4 Non-Alienability of Rights of Members . . . . . . . . . . XIV-1
14.5 Payments in Satisfaction of Claims of Members . . . . . . XIV-1
14.6 Payments Due Minors and Incompetents . . . . . . . . . . . XIV-1
14.7 Acceptance of Terms and Conditions of Plan by Members . . XIV-2
14.8 Impossibility of Diversion of Trust Fund . . . . . . . . . XIV-2
14.9 Refunds to Employer . . . . . . . . . . . . . . . . . . . XIV-2
ARTICLE XV AFFILIATED COMPANIES . . . . . . . . . . . . . . . . . . . . . . XV-1
15.1 Eligibility and Adoption . . . . . . . . . . . . . . . . . . XV-1
</TABLE>
-iv-
<PAGE> 6
<TABLE>
<S> <C>
ARTICLE XVI TOP-HEAVY PLAN REQUIREMENTS . . . . . . . . . . . . . . . . . XVI-1
16.1 General Rule . . . . . . . . . . . . . . . . . . . . . . . XVI-1
16.2 Vesting Provisions . . . . . . . . . . . . . . . . . . . . XVI-1
16.3 Minimum Contribution Provisions . . . . . . . . . . . . . XVI-1
16.4 Limitation on Contributions . . . . . . . . . . . . . . . XVI-1
16.5 Uniform Accrual . . . . . . . . . . . . . . . . . . . . . XVI-2
16.6 Determination of Top-Heavy Status . . . . . . . . . . . . XVI-2
</TABLE>
-v-
<PAGE> 7
PIONEER COMPANIES
SAVINGS PLAN FOR SALARIED EMPLOYEES
Pioneer Chlor Alkali Company, Inc. hereby amends, renames, and restates
the Pioneer Chlor Alkali Company, Inc. Savings Investment Plan and Trust
effective as of July 1, 1998, unless provided otherwise herein. The terms and
provisions of the Plan as so amended are as follows:
INTRODUCTION
The purposes of this Plan are to provide benefits for eligible Employees
through an Employer profit sharing contribution and to promote and encourage
Employees to provide additional security and income for their retirement
through a systematic matching savings program. However, the establishment of
this Plan shall not be considered as giving any Employee or any other person
any legal or equitable right as against any Employer, the Committee or the
Trustee, or in the assets of the Plan, except and to the extent that such right
is specifically provided for in this Plan.
This Plan has been adopted for the exclusive benefit of the Members and
their beneficiaries. So far as possible, this Plan shall be interpreted in a
manner consistent with this intent and with the intention of the Corporation
that this Plan shall satisfy those provisions of ERISA and the Code relating to
qualified employee profit sharing plans with a Code Section 401(k) feature.
The Plan is hereby amended and completely restated as set forth herein
and all rights and benefits under the Plan shall hereafter be determined under
the terms and provisions hereof. However, the amendment and restatement of the
Plan hereby shall not operate or be construed to deprive any Member of any
protected benefit, within the meaning of Code Section 411(d)(6) and the
regulations thereunder, he may have had under the Plan as in effect immediately
prior to this amendment.
TACOMA PLAN MERGER
Effective as of July 1, 1998, the Pioneer Tacoma Salaried 401(k) Plan
(the "Tacoma Plan") was merged into the Plan, as provided in the Merger
Agreement dated June __, 1998.
CHANGE IN INVESTMENT FUNDS -- RECORDKEEPING TRANSITION PERIOD
Notwithstanding anything in the Plan to the contrary, in order to
transfer the recordkeeping of the Plan's "old" investment funds to the "new"
investment funds, an Implementation Period (beginning July 1, 1998 and
estimated to last approximately three months) will apply to all Members, other
than members of the Tacoma Plan merged into the Plan or to employees who join
the Plan after July 1, 1998. During the Implementation Period, affected
Members will not be able to change the investment of their current
contributions or account balances. Investment elections as in effect on June
30, 1998 will be temporarily "frozen" and "mapped" into new investment funds
<PAGE> 8
as described in the Company's memorandum to all participants dated May 28,
1998. In addition, withdrawals or loans may not be made during the
Implementation Period.
<PAGE> 9
ARTICLE I
DEFINITIONS
The following words and phrases as used herein shall have the following
meanings unless a different meaning is plainly required by the context:
1.1 ACCOUNT OR ACCOUNTS: The Employer Contribution Account, the Savings
Contribution Account, the Salary Deferral Contribution Account and/or the
Rollover Account of a Member.
1.2 ACTUAL DEFERRAL PERCENTAGE: The Actual Deferral Percentage, as defined
in Section 4.6.
1.3 AFFILIATED COMPANY: Any corporation which is a member of a controlled
group of corporations (within the meaning of the Code Section 414(b)) with the
Corporation; any trade or business (whether or not incorporated) which is under
common control (as defined in Code Section 414(c)) with the Corporation; any
organization (whether or not incorporated) which is a member of an affiliated
service group (as defined in Code Section 414(m)) which includes the
Corporation; and any other entity required to be aggregated with the
Corporation pursuant to Regulations under Code Section 414(o). For purposes of
applying the limitations of Code Section 415, an Affiliated Company shall be
determined in accordance with Code Section 415(h).
1.4 AGGREGATION GROUP: For purposes of Article XVI, the group of plans, if
any, that includes both the group of plans required to be aggregated and the
group of plans permitted to be aggregated. The group of plans required to be
aggregated (the "required aggregation group") includes:
(a) Each plan of an Affiliated Company in which a Key Employee
is a participant, including collectively bargained plans, and
(b) Each other plan, including collectively bargained plans,
of an Affiliated Company which enables a plan in which a Key Employee is
a participant to meet the requirements of the Code, as amended,
prohibiting discrimination as to contributions or benefits in favor of
employees who are officers, shareholders, or the highly compensated or
prescribing minimum participation standards.
The group of plans that are permitted to be aggregated (the "permissive
aggregation group") includes the required aggregation group plus one or more
plans of an Affiliated Company that is not part of the required aggregation
group, and that the Affiliated Company certifies as a plan within the
permissive aggregation group. Such plan or plans may be added to the
permissive aggregation group only if, after the addition, the aggregation group
as a whole continues not to discriminate as to contributions or benefits in
favor of officers, shareholders, or the highly compensated, and to meet the
minimum participation standards under the Code.
I-1
<PAGE> 10
1.5 ANNUAL ADDITIONS: With respect to each Plan Year, the total of Employer
contributions (including Salary Deferral Contributions), forfeitures and Member
contributions allocated to a Member's Account for such Plan Year. Amounts
allocated to an individual medical account, as defined in Code Section 415(1),
which is part of a defined benefit plan maintained by the Employer, are treated
as Annual Additions. Also, amounts derived from contributions 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, are treated as Annual Additions.
1.6 ANNUAL BENEFIT: Means a benefit payable annually in the form of a
straight life annuity (with no ancillary benefits) under a plan, but excluding
benefits attributable to Employee contributions and rollover contributions.
1.7 APPLICABLE COMPENSATION: For purposes of Code Section 415, Applicable
Compensation means (i) a Member's earned income, wages, salaries, and fees for
professional services, and other amounts received (without regard to whether or
not an amount is paid in cash and also without regard to salary deferral
elections pursuant to Code Sections 125 or 401(k)) for personal services
actually rendered in the course of employment with the Employer or Affiliated
Company maintaining the Plan to the extent that the amounts are includable in
gross income (including, but not limited to, commissions paid salesmen,
compensation for services on the basis of the percentage of profits,
commissions on insurance premiums, tips, bonuses, fringe benefits,
reimbursements and expense allowances), (ii) amounts described in Code Sections
104(a)(3), 105(a) and 105(h), but only to the extent that these amounts are
includable in the gross income of the Employee, (iii) amounts paid or
reimbursed by the Employer or Affiliated Company for moving expenses incurred
by the Employee, but only to the extent that these amounts are excludable from
gross income of the Employee, (iv) the value of a nonqualified stock option
granted to an Employee, but only to the extent such value is included in the
gross income of the employee for the taxable year in which granted, and (v) the
amount included in the gross income of the Employee upon making the election
under Code Section 83(b), but excluding the following:
(a) Contributions made by the Employer or Affiliated Company
to a plan of a deferred compensation to the extent that, before the
application of the Code Section 415 limitations to that plan, the
contributions are not includable in the gross income of the Employee for
the taxable year in which contributed. In addition, Employer
contributions made on behalf of an Employee to a simplified employee
pension described in Code Section 408(k) are not considered as
compensation for the taxable year in which contributed to the extent
such contributions are deductible by the Employee under Code Section
219(b)(7). Additionally, any distributions from a plan of deferred
compensation are not considered as compensation for Code Section 415
purposes, regardless of whether such amounts are includable in the gross
income of the Employee when distributed. However, any amounts received
by an Employee pursuant to an unfunded non-qualified plan may be
considered as compensation for Code Section 415 purposes in the year
such amounts are includable in the gross income of the Employee.
I-2
<PAGE> 11
(b) Amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by an Employee
becomes freely transferable or is no longer subject to a substantial
risk of forfeiture (see Code Section 83 and the regulations thereunder).
(c) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option.
(d) Other amounts which receive special tax benefits, such as
premiums for group term life insurance (but only to the extent that the
premiums are not includable in the gross income of the Employee), or
contributions made by an Employer or Affiliated Company (whether or not
under a salary reduction agreement) towards the purchase of an annuity
contract described in Code Section 403(b) (whether or not the
contributions are excludable from the gross income of the Employee).
Subject to the foregoing exclusions, for purposes of applying the limitations
above, amounts included as Applicable Compensation are those actually paid or
made available to a Member within the Plan Year.
1.8 BOARD OF DIRECTORS: The Board of Directors of the Corporation.
1.9 BREAK IN SERVICE: A calendar year during which the Employee is credited
with 500 or less Hours of Service. For purposes of determining a Break in
Service only, an Employee shall be deemed to have completed Hours of Service
for periods of absence from work (1) by reason of the pregnancy of the
Employee, (2) by reason of the birth of a child of the Employee, (3) by reason
of the placement of a child in connection with the adoption of the child by the
Employee, or (4) for purposes of caring for the child during the period
immediately following the birth or placement for adoption. During the period
of such absence, the Employee shall be treated as having completed (1) the
number of Hours of Service that normally would have been credited but for the
absence, or (2) if the normal Hours of Service worked are unknown, eight Hours
of Service for each normal workday during the absence. The total number of
Hours of Service required to be treated as completed for any such period of
absence shall not exceed 501 hours for those Hours of Service shall be credited
only (1) in the year in which the absence begins for one of the permitted
reasons, if the crediting is necessary to prevent a Break in Service in that
year, or (2) in the following year.
1.10 CODE: The Internal Revenue Code of 1986, as amended from time to time.
1.11 COMMITTEE: The administrative committee of the Plan as provided for in
Section 10.1.
1.12 COMPANY STOCK: The Class A common stock, par value $.01, of Pioneer
Companies, Inc.
1.13 COMPENSATION: The base salary and/or wages of an Employee in the
Eligible Class, including elective salary reduction amounts pursuant to
Section 401(k) or 125 of the Code,
I-3
<PAGE> 12
but excluding all other items of compensation. However, annual
compensation in excess of $160,000 (as such amount shall be adjusted as
permitted under Code Section 401(a)(17)) shall be disregarded for
purposes of this Plan. For any Plan Year of less than 12 months, the
applicable dollar limit for such year shall be prorated by dividing the
number of full months in such year by 12.
1.14 CORPORATION: Pioneer Chlor Alkali Company, Inc., a Delaware
corporation.
1.15 DETERMINATION DATE: For purposes of any Plan Year, the last day of the
immediately preceding Plan Year.
1.16 EFFECTIVE DATE OF THE PLAN: October 25, 1988.
1.17 ELIGIBLE CLASS: An Employee of an Employer who is not (1) a Leased
Employee, (2) a member of, or covered by, a collective bargaining unit which
has a bargaining agreement with the Employer, unless such agreement provides
for the participation of such Employees in the Plan, or (3) a nonresident alien
with no U.S. source income.
1.18 EMPLOYEE: Any employee of the Corporation or an Affiliated Company and,
to the extent required to be treated as an "employee" for certain Plan purposes
by Code Section 414, any Leased Employee performing services for the
Corporation or an Affiliated Company. It shall also include, with respect to
an Employer, an employee or former employee who is receiving severance under a
plan, program or agreement of the Employer, to the extent severance is
permitted by applicable regulations under Code Section 401(a)(4) to be treated
as imputed service, but such imputed employment shall not exceed two years.
1.19 EMPLOYER OR EMPLOYERS: The Corporation and any of its Affiliated
Companies as from time to time is participating in the Plan, as provided in
Article XV.
1.20 EMPLOYER CONTRIBUTION: The Employer's matching contributions to the
Plan that are made pursuant to Section 4.3.
1.21 EMPLOYER CONTRIBUTION ACCOUNT: The account maintained for a Member to
record his share of the matching contributions of the Employer, the investment
thereof and adjustments relating thereto.
1.22 ERISA: The Employee Retirement Income Security Act of 1974, as amended,
and regulations thereunder.
1.23 EXCESS ANNUAL ADDITIONS: The excess of the Member's Annual Additions
for the Plan Year over the Maximum Permissible Amount.
I-4
<PAGE> 13
1.24 EXCESS CONTRIBUTIONS: Amounts exceeding the Actual Deferral Percentage
limits for Highly Compensated Employees.
1.25 HIGHLY COMPENSATED EMPLOYEE: Any Employee or former Employee who is a
highly compensated employee as defined in Code Section 414(q). Generally, any
Employee or former Employee is considered a Highly Compensated Employee if
during the Plan Year or the preceding Plan Year such Employee or former
Employee:
(a) was at any time a "5% owner." "5% owner" means any person
who owns (or is considered as owning within the meaning of Code Section
318) more than 5% of the outstanding stock of the Employer or stock
possessing more than 5% of the total combined voting power of all stock
of the Employer or, in the case of an unincorporated business, any
person who owns more than 5% of the capital or profits interest in the
Employer. In determining percentage ownership hereunder, Affiliated
Companies that would otherwise be aggregated under Code Section 414(b),
(c), and (m) shall be treated as separate Employers.
(b) received Total Compensation from the Employer in excess of
$80,000 (as adjusted by Code Section 415(d)), and
(c) if elected by the Corporation for such preceding year, was
in the top 20% of the Employees when ranked on the basis of Applicable
Compensation paid during the previous year.
For purposes of determining whether an Employee is a Highly Compensated
Employee for the Plan Year beginning in 1997, the above definition shall be
treated as having been in effect for the Plan Year beginning in 1996.
1.26 HOUR OF SERVICE: Each hour for which an Employee is paid, or entitled
to payment, for the performance of duties for the Employer or an Affiliated
Company during the applicable computation period. An Hour of Service is each
hour for which an Employee is paid, or entitled to payment by the Employer or
an Affiliated Company on account of a period of time during which no duties are
performed, due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of absence. No more
than 501 hours shall be credited with respect to any single continuous period
during which the Employee performs no duties (whether or not such period occurs
in a single computation period). An hour for which an Employee is directly or
indirectly paid, or entitled to payment, on account of a period during which no
duties are performed is not required to be credited to the Employee if such
payment is made or due under a plan maintained solely for the purpose of
complying with applicable workmen's compensation, or unemployment compensation
or disability insurance laws; and Hours of Service are not required to be
credited for a payment which solely reimburses an Employee for medically
related expenses incurred by the Employee. For purposes of this section, a
payment shall be deemed to be made by or due from an Employer regardless of
whether such payment is made by or due from the Employer directly or
I-5
<PAGE> 14
indirectly, through, among others, a trust fund or insurer or other entity to
which the Employer contributes or pays premiums and regardless of whether
contributions made or due to the trust fund, insurer or other entity are for
the benefit of particular employees or on behalf of a group of employees in the
aggregate. An Hour of Service is also each hour for which back pay,
irrespective of mitigation of damages, is either awarded or agreed to by the
Employer. The same Hours of Service shall not be credited in two periods.
Crediting of Hours of Service for back pay awarded or agreed to shall be with
respect to the periods within which such service was performed. For purposes
of determining whether a Break in Service has occurred, an Employee shall be
deemed to have completed Hours of Service for periods of absence from work (1)
by reason of the pregnancy of the Employee, (2) by reason of the birth of a
child of the Employee, (3) by reason of the placement of a child in connection
with the adoption of the child by the Employee, or (4) for purposes of caring
for the child during the period immediately following the birth or placement
for adoption. During the period of such absence, the Employee shall be treated
as having completed (1) the number of Hours of Service that normally would have
been credited but for the absence, or (2) if the normal Hours of Service worked
are unknown, eight Hours of Service for each normal workday during the absence.
The total number of Hours of Service required to be treated as having been
completed for any such period of absence shall not exceed 501 hours. Further,
such Hours of Service shall be credited only (1) in the year which the absence
begins for one of the permitted reasons, if the crediting is necessary to
prevent a Break in Service in that year, or (2) in the following year. Hours
of Service shall be credited to computation periods in accordance with the
provisions of Department of Labor Regulation Section 2530.200b. Instead of
counting and crediting actual hours worked, for purposes of determining the
number of Hours of Service to be credited to an Employee, an Employee may be
credited with 190 Hours of Service for each calendar month during which he has
earned one Hour of Service. For purposes of determining the number of Hours of
Service to be credited for reasons other than the performance of duties and for
purposes of determining to which computation period Hours of Service earned
under any provision of this Plan are to be credited, the provisions of
Department of Labor Regulation Section 2520.200(b)-2(b) and (c) are hereby
incorporated by reference as if fully set forth herein.
1.27 INVESTMENT MANAGER: The investment manager qualified under Section
3(38) of ERISA and appointed by the Committee.
1.28 KEY EMPLOYEE: Any Employee and former Employee (and any beneficiary of
an Employee under this Plan) who, at any time during the determination period,
was an officer of the Employer if such individual's annual compensation exceeds
50% of the dollar limitation amount in effect under Section 415(b)(1)(A) of the
Code as applicable to any Plan Year during the determination period, an owner
(or any Employee considered an owner under Code Section 318) of one of the ten
largest interests in an Affiliated Company (provided such interest is greater
than .5%) if such individual's compensation exceeds 100% of such dollar
limitation amount, a 5% owner of an Affiliated Company, or a 1% owner of an
Affiliated Company who has an annual compensation of more than $160,000 (as
adjusted). The determination period is the Plan Year containing the
Determination Date and the four preceding Plan Years. The determination of who
is a Key Employee will be made in accordance with Section 416(i)(1) of the Code
and the regulations thereunder.
I-6
<PAGE> 15
1.29 LEASED EMPLOYEE: Any person who (1) is not a common-law employee of the
Employer and (2) pursuant to an agreement between an Employer and any other
person, has performed services for the Employer (or for the Employer and
related persons determined in accordance with Section 414(n)(6) of the Code) on
a substantially full time basis for a period of at least one year, and such
services are performed under the primary direction or control of the Employer.
1.30 MAXIMUM PERMISSIBLE AMOUNT: For a Plan Year, the Maximum Permissible
Amount with respect to any Employee shall be the lesser of:
(a) $30,000 (as increased in accordance with Code Section
415(d) to reflect cost-of-living adjustments). No adjustment will be
made until the $30,000 limit is 25% of the defined benefit limit. The
two limits will then rise in tandem, with the defined contribution limit
set at 1/4 of the defined benefit limit. Such adjustments to the limits
will be based on cost-of-living adjustments in the CPI, or
(b) 25% of the Employee's Applicable Compensation for the Plan
Year.
1.31 MEMBER: An Employee who has, or a former Employee who continues to
have, an Account under the Plan.
1.32 NON-HIGHLY COMPENSATED EMPLOYEE: Any Employee or former Employee who is
not a Highly Compensated Employee.
1.33 NON-KEY EMPLOYEE: Any Employee or former Employee (and his
beneficiaries) who is not a Key Employee.
1.34 PARTICIPATING COMPANY: One of the Employers.
1.35 PLAN: The Pioneer Companies Savings Plan For Salaried Employees as set
forth herein and as from time to time hereafter amended.
1.36 PLAN YEAR: The calendar year, which shall also be the limitation year
for purposes of Code Section 415.
1.37 RETIREMENT DATE: The Member's 65th birthday.
1.38 ROLLOVER ACCOUNT: The account maintained for a Member to record the
rollover contribution made by the Member in accordance with Section 4.12, the
investment thereof and adjustments relating thereto.
1.39 SALARY DEFERRAL CONTRIBUTION: The pre-tax amount contributed by the
Employer at a Member's direction as a Salary Deferral Contribution in
accordance with Section 4.2.
I-7
<PAGE> 16
1.40 SALARY DEFERRAL CONTRIBUTION ACCOUNT: The account maintained for a
Member to record the Salary Deferral Contributions made by the Employer on
behalf of the Member, the investment thereof and adjustments relating thereto.
1.41 SAVINGS CONTRIBUTIONS: The after-tax amount contributed by the Member
as a Savings Contributions in accordance with Section 4.1.
1.42 SAVINGS CONTRIBUTION ACCOUNT: The account maintained for a Member to
record his own Savings Contributions, the investment thereof and adjustments
relating thereto. Such Account shall also be divided, where applicable, into
subaccounts for those Members with Accounts spun off or merged from another
qualified plan to reflect their pre-1987 after-tax contributions and post-1986
after-tax contributions.
1.43 SPOUSE: A Member's husband or wife.
1.44 TOP-HEAVY GROUP: The Aggregation Group, if, as of the applicable
Determination Date, the sum of the present value of the cumulative accrued
benefits for Key Employees under all defined benefit plans included in the
Aggregation Group plus the aggregate of the accounts of Key Employees under all
defined contribution plans included in the Aggregation Group exceeds 60% of the
sum of the present value of the cumulative accrued benefits for all employees,
excluding former Key Employees as provided in Section 16.6(d), under all such
defined benefit plans, plus the aggregate accounts for all employees, excluding
former Key Employees as provided in Section 16.6(d), under all such defined
contribution plans. In determining Top-Heavy status, if an individual has not
performed any services for any Employer or Affiliated Company at any time
during the five-year period ending on the Determination Date, any accrued
benefit for such individual, and the aggregate accounts of such individual
shall not be taken into account. If the Aggregation Group that is a Top-Heavy
Group is a required aggregation group, each plan in the group will be a Top-
Heavy Plan (as defined in Section 16.6). If the Aggregation Group that is a
Top-Heavy Group is a permissive aggregation group, only those plans that are
part of the required Aggregation Group will be treated as Top-Heavy Plans. If
the Aggregation Group is not a Top-Heavy Group, no plan within such group will
be a Top-Heavy Plan.
1.45 TOTAL COMPENSATION: The Member's Applicable Compensation, but limited
to such compensation received while a Member (or eligible to participate in the
Plan) to the extent permitted by applicable regulations.
1.46 TRUST: The Trust established pursuant to the Plan.
1.47 TRUST FUND: The fund established by contributions provided for in the
Plan and held in the Trust, together with all income, profits or increments
thereon.
1.48 TRUSTEE: The Trustee under the Trust.
I-8
<PAGE> 17
1.49 VALUATION DATE: Each day on which the national securities market for
the Plan's investment funds are open for trading; however, the date on which
mutual fund units or shares of Company Stock are acquired or disposed of by the
Trustee for the Participant's Account(s) to effectuate an event under the Plan,
e.g., loan, withdrawal, distribution, etc., shall be the applicable Valuation
Date.
1.50 YEAR OF SERVICE: A Year of Service is a Plan Year in which the Employee
is credited with 1,000 or more Hours of Service. An Employee shall also be
credited with Years of Service with a predecessor employer to the extent
credited under a predecessor employer plan or, to the extent provided in any
acquisition agreement or as otherwise may be provided by the Committee on a
nondiscriminatory basis. All Years of Service shall be aggregated and counted
as the appropriate number of whole Years of Service, except if an Employee who
is not vested in his Employer Contribution Account terminates service and
incurs five consecutive Breaks in Service, his Years of Service credited prior
to such Breaks in Service shall be forfeited.
The masculine gender, wherever used herein, shall include the feminine
gender, and the singular may include the plural, unless the context plainly
indicates to the contrary.
I-9
<PAGE> 18
ARTICLE II
PROFIT SHARING PLAN
2.1 PROFITS: This Plan is intended to be a profit sharing plan and all
Salary Deferral Contributions and Employer Contributions shall be made out of
the Employers' current or accumulated earnings and profits as computed in
accordance with generally accepted accounting principles; however, the Board of
Directors may authorize contributions in the absence of such earnings and
profits in its sole discretion as provided by Code Section 401(a)(27), provided
the Plan continues to qualify as a profit sharing plan.
II-1
<PAGE> 19
ARTICLE III
ELIGIBILITY
3.1 EMPLOYEES ELIGIBLE: Only Employees who are in the Eligible Class shall
be eligible to actively participate in the Plan, and each such Employee shall
be eligible to make Savings Contributions and/or Salary Deferral Contributions
to the Plan beginning on the first day of the month coincident with or next
following the date on which he first completes an Hour of Service; provided,
however, (1) former Employees who are in the Eligible Class upon the date of
their rehire shall be eligible to participate immediately and (2) Employees who
are in the Eligible Class shall be eligible to make qualifying rollover
contributions to the Plan at any time. The date an Employee in the Eligible
Class is first eligible to contribute to the Plan (other than a rollover
contribution) and the first day of each month thereafter that he remains
eligible to join the Plan is the "entry date."
3.2 SAVINGS CONTRIBUTION OR SALARY DEFERRAL CONTRIBUTION AUTHORIZATION
REQUIRED: An Employee in the Eligible Class may become a Member of the Plan on
any future entry date by authorizing a Savings Contribution and/or a Salary
Deferral Contribution and directing the investment thereof in the manner
hereinafter provided.
3.3 CONTRIBUTIONS VOLUNTARY: Contributions to the Plan by an Employee are
entirely voluntary.
3.4 TRANSFERS OF EMPLOYMENT: Transfers of employment between two or more
Employers shall not affect a Employee's membership in the Plan, except as
provided in this Section 3.4. Any transfer of a Member to employment with a
non-participating Affiliated Company or to an employment classification that is
not in the Eligible Class shall not constitute a termination of service. Each
such transferred Member shall remain a Member of the Plan and shall retain the
rights and benefits accrued under the Plan prior to the date of such transfer
until his subsequent retirement, termination of service or total withdrawal.
However, each such transferred Member shall not be eligible to make additional
Savings Contributions or Salary Deferral Contributions while he is employed by
a non-participating Affiliated Company or while he is not employed in the
Eligible Class.
III-1
<PAGE> 20
ARTICLE IV
CONTRIBUTIONS AND VESTING
4.1 SAVINGS CONTRIBUTIONS: An Employee in the Eligible Class may authorize
a Savings Contribution, to be effected by payroll deductions, in whole
percentages of not less than 1% and not more than 15% of his Compensation for
such payroll period, subject to Section 4.2.
4.2 SALARY DEFERRAL CONTRIBUTIONS: Subject to Section 4.8, an Employee in
the Eligible Class may elect a Salary Deferral Contribution rate (in whole
percentages) of not less than 1% and not more than 15% of his Compensation for
any payroll period, to be effected by payroll reductions. Each such election
of a Salary Deferral Contribution rate shall be made in writing on a salary
reduction election form provided by the Committee at least ten days prior to
the effective date of such election (if not made as of the date service
commences), shall be subject to reduction as provided in Section 4.8, and shall
be subject to such other terms and conditions as the Committee may determine.
The sum of an Employee's Salary Deferral Contribution rate and Savings
Contribution rate may not exceed 15% and, to the extent necessary, a Member's
Savings Contributions shall be reduced first.
(a) A Member's Salary Deferral Contribution made pursuant to
this Section shall not exceed $10,000 for the taxable year of the
Member. This dollar limitation shall be adjusted annually as provided
in Code Section 415(d) pursuant to Regulations. The adjusted limitation
shall be effective as of January 1 of each calendar year.
(b) In the event that the dollar limitation provided for in
Section 4.2(a) is exceeded, the Committee shall direct the Trustee to
either (1) distribute such excess amount, and any income (or loss)
allocable to such amount (as provided in (d) below), to the Member not
later than the first April 15 following the close of the Member's
taxable year or (2) to recharacterize such excess amount, and any income
or (loss) allocable to such amount, as a Savings Contributions made by
the Member, subject to the further provisions of the Plan applicable to
Savings Contributions.
(c) In the event that a Member is also a participant in (1)
another qualified cash or deferred arrangement (as defined in Code
Section 401(k)), (2) a simplified employee pension (as defined in Code
Section 408(k)), or (3) a salary reduction arrangement (within the
meaning of Code Section 3121(a)(5)(D)) and the elective deferrals, as
defined in Code Section 402(g)(3), made under such other arrangement(s)
and this Plan cumulatively exceed $10,000 (or such amount adjusted
annually as provided in Code Section 415(d) pursuant to Regulations) for
such Member's taxable year, the Member may, not later than March 1
following the close of his taxable year, notify the Committee in writing
of such excess and request that his Salary Deferral Contribution under
this Plan be reduced by an amount specified by the Member. Such amount
shall then be distributed in the same manner as provided in Section
4.2(b).
IV-1
<PAGE> 21
(d) The income (or loss) allocable to returnable contributions
shall equal the sum of the allocable gain or loss for the Plan Year and
the allocable gain or loss for the period between the end of the Plan
Year and the date of distribution. Income includes all earnings and
appreciation, including such items as interest, dividends, rent,
royalties, gains from the sale of property, appreciation in the value of
stocks, bonds, annuity and life insurance contracts, and other property,
without regard to whether such appreciation has been realized.
(1) The income (or loss) allocable to returnable
contributions for the Plan Year is determined by multiplying the
income (or loss) for the Plan Year allocable to employee
contributions, matching contributions, and amounts treated as
matching contributions (whichever is applicable) by a fraction.
The numerator of the fraction is the amount of returnable
contributions made on behalf of the employee for the Plan Year.
The denominator of the fraction is the total account balance of
the employee attributable to employee contributions, matching
contributions and amounts treated as matching contributions as of
the end of the Plan Year, reduced by the gain allocable to such
total amount for the Plan Year and increased by the loss
allocable to such total amount for the Plan Year.
(2) The allocable income or loss for the period between
the end of the Plan Year and the distribution date is equal to 10
percent of the income or loss allocable to returnable
contributions for the Plan Year (as calculated under subparagraph
(1) above) multiplied by the number of calendar months that have
elapsed since the end of the Plan Year. For purposes of
determining the number of calendar months that have elapsed, a
distribution occurring on or before the fifteenth day of the
month will be treated as having been made on the last day of the
preceding month, and a distribution occurring after such
fifteenth day will be treated as having been made on the first
day of the next month.
4.3 MATCHING EMPLOYER CONTRIBUTIONS: Subject to the other provisions of the
Plan, with respect to each payroll period the Employers shall contribute, with
respect to each Member who made Savings Contributions and/or Salary Deferral
Contributions for such pay period, an amount equal to 50% of the sum of the
Member's Savings Contributions and Salary Deferral Contributions for that
payroll period, but only to the extent the sum of such contributions does not
exceed 6% of the Member's Compensation for the applicable payroll period;
provided that, if a Member has made both Savings Contributions and Salary
Deferral Contributions, the Employer Contributions shall be deemed to have been
made first with respect to the Salary Deferral Contributions.
4.4 CHANGE IN CONTRIBUTION RATE: The Savings Contribution and/or Salary
Deferral Contribution rate elected by a Member may be changed by a Member, upon
advance notice, as of the first day of any calendar quarter following proper
notice, but any such change shall not be retroactive.
IV-2
<PAGE> 22
4.5 VOLUNTARY SUSPENSION OF CONTRIBUTIONS: A Member who has elected to
contribute and/or defer a portion of his Compensation as a Savings Contribution
and/or Salary Deferral Contribution under the Plan may suspend any further
contributions and/or deferrals as of the end of any payroll period if, and only
if prior to the end of such payroll period, he gives notice to his Employer, in
such form and manner as the Committee may prescribe, of his election to effect
such suspension. Such suspension shall remain in effect until the Member again
properly elects to make contributions to the Plan.
4.6 ACTUAL DEFERRAL PERCENTAGE: For the purposes of this Section, "Actual
Deferral Percentage" means, with respect to the Highly Compensated Employee
group and Non-Highly Compensated Employee group for a Plan Year, the average of
the ratios, calculated separately for each Member in such group, of the amount
of Salary Deferral Contributions allocated to each Member's Salary Deferral
Contribution Account (unreduced by distributions made pursuant to Sections
4.2(b) and 4.2(d)) for such Plan Year, to such Member's Total Compensation for
such Plan Year.
4.7 ACTUAL DEFERRAL PERCENTAGE TEST:
(a) Maximum Annual Allocation: For each Plan Year, the annual
allocation derived from Salary Deferral Contributions to a Member's
Salary Deferral Contribution Account shall satisfy one of the following
tests:
(1) The "Actual Deferral Percentage" for the Highly
Compensated Employee group shall not be more than the "Actual
Deferral Percentage" of the Non-Highly Compensated Employee group
multiplied by 1.25, or
(2) The excess of the "Actual Deferral Percentage" for
the Highly Compensated Employee group over the "Actual Deferral
Percentage" for the Non-Highly Compensated Employee group shall
not be more than two percentage points. Additionally, the
"Actual Deferral Percentage" for the Highly Compensated Employee
group shall not exceed the "Actual Deferral Percentage" for the
Non-Highly Compensated Employee group multiplied by two. This
alternative limitation test cannot be used to satisfy the Actual
Deferral Percentage test and the Contribution Percentage Test of
Section 4.9, except as otherwise provided by applicable
regulations.
(b) For the purposes of Sections 4.7(a) and 4.8, a Highly
Compensated Employee and a Non-Highly Compensated Employee shall include
any Employee eligible to make a deferral election pursuant to Section
4.2, whether or not such deferral election was made.
(c) For the purposes of this Section, if two or more plans
which include cash or deferred arrangements are considered one plan for
the purposes of Code Section 401(a)(4) or 410(b), the cash or deferred
arrangements included in such plans shall be treated as one arrangement.
IV-3
<PAGE> 23
(d) For the purposes of this Section, if a Highly Compensated
Employee is a Member under two or more cash or deferred arrangements of
the Employer, all such cash or deferred arrangements shall be treated as
one cash or deferred arrangement for the purpose of determining the
deferral percentage with respect to such Highly Compensated Employee.
(e) Notwithstanding the above, the determination and treatment
of Employer Salary Deferral Contributions and "Actual Deferral
Percentage" of any Member shall satisfy such other requirements as may
be prescribed by the Secretary of the Treasury.
4.8 ADJUSTMENTS AS A RESULT OF ACTUAL DEFERRAL PERCENTAGE TEST: In the
event that the initial allocations of the Salary Deferral Contributions made
pursuant to the Plan do not satisfy one of the tests set forth in Section
4.7(a), either of the following actions shall be taken:
(a) On or before the 15th day of the third month following the
end of each Plan Year, but in no event later than the close of the
following Plan Year, the Committee shall direct the Trustee to
distribute to the Highly Compensated Employee group the aggregate amount
of excess Salary Deferral Contributions (and any income allocable to
such contributions as provided in (d) of Section 4.2), beginning with
the Member(s) having the highest dollar amount of Salary Deferral
Contributions, reducing such Members' contributions pro rata to the next
highest dollar amount of Salary Deferral Contributions (and continuing
with the next highest group and so on) until the aggregate excess amount
is distributed.
(b) Within 30 days after the end of the Plan Year, the
Employer shall make a contribution on behalf of Non-Highly Compensated
Employees in an amount sufficient to satisfy one of the tests set forth
in Section 4.7(a). Such contribution shall be deemed a Salary Deferral
Contribution and allocated to the Salary Deferral Contribution Account
of each Non-Highly Compensated Employee in the same proportion that each
Non-Highly Compensated Employee's Salary Deferral Contribution for the
year bears to the total Salary Deferral Contributions of all Non-Highly
Compensated Employees. However, if option (b) is elected, then in all
events such contributions shall be fully vested when made and shall be
subject to the same distribution restrictions that apply to Salary
Deferral Contributions, except that such amounts may not be withdrawn
prior to the Member's termination of employment.
(c) The amount of excess Salary Deferral Contributions to be
distributed or recharacterized shall be reduced by excess deferrals
previously distributed for the taxable year ending in the same Plan Year
and excess deferrals to be distributed for a taxable year will be
reduced by excess contributions previously distributed or
recharacterized for the Plan beginning in such taxable year.
IV-4
<PAGE> 24
4.9 MAXIMUM CONTRIBUTION PERCENTAGE.
(a) The "Contribution Percentage" for the Highly Compensated
Employee group shall not exceed the greater of:
(1) 125% of such percentage for the Non-Highly
Compensated Employee group; or
(2) the lesser of 200% of such percentage for the Non-
Highly Compensated Employee group, or such percentage for the
Non-Highly Compensated Employee group plus two percentage points
or such lesser amount determined pursuant to Regulations to
prevent the multiple use of this alternative limitation with
respect to any Highly Compensated Employee.
(b) For the purposes of this Section and Section 4.10,
"Contribution Percentage" for a Plan Year means, with respect to the
Highly Compensated Employee group and Non-Highly Compensated Employee
group, the average of the ratios (calculated separately for each Member
in each group) of:
(1) the sum of the matching contributions pursuant to
Section 4.3 and Employee Savings Contributions pursuant to
Section 4.1 contributed under the Plan on behalf of each such
Member for such Plan Year; to
(2) the Member's Total Compensation for such Plan Year.
(c) The "Contribution Percentage" for a Highly Compensated
Employee shall be determined by including matching contributions
pursuant to Section 4.3 and Employee Savings Contributions pursuant to
Section 4.1.
(d) For purposes of this Section, if two or more plans of the
Employer to which matching contributions, Employee contributions, or
elective deferrals are made are treated as one plan for purposes of Code
Section 410(b), such plans shall be treated as one plan for purposes of
this Section 4.9. In addition, if a Highly Compensated Employee
participates in two or more plans described in Code Section 401(a) or
arrangements described in Code Section 401(k) which are maintained by
the Employer to which such contributions are made, all such
contributions shall be aggregated for purposes of this Section 4.9.
(e) For purposes of Section 4.9(a) and 4.10, a Highly
Compensated Employee and Non-Highly Compensated Employee shall include
any Employee eligible to have matching contributions pursuant to Section
4.3 and Employee Savings Contributions pursuant to Section 4.1 allocated
to his account for the Plan Year.
IV-5
<PAGE> 25
4.10 ADJUSTMENTS FOR EXCESSIVE CONTRIBUTION PERCENTAGE:
(a) In the event that the "Contribution Percentage" for the
Highly Compensated Employee group exceeds the "Contribution Percentage"
for the Non-Highly Compensated Employee group pursuant to Section
4.9(a), the Committee (on or before the 15th day of the third month
following the end of the Plan Year, but in no event later than the close
of the following Plan Year) the Committee shall direct the Trustee to
distribute to the Highly Compensated Employee group the amount of
"Excess Aggregate Contributions" (and any income allocable to such
contributions as provided in (d) of Section 4.2), beginning with the
Member(s) with the highest dollar amount of such contributions, reducing
such Members' contributions pro rata to the next highest dollar amount
of contributions (and continuing with the next highest group and so on)
until the aggregate amount of such excess is distributed. However, no
forfeiture may be allocated to a Highly Compensated Employee whose
contributions are reduced pursuant to this Section.
(b) The determination of the amount of "Excess Aggregate
Contributions" with respect to any Plan Year shall be made after:
(1) first determining the excess contributions pursuant
to Section 4.2(a), and
(2) then determining the excess annual allocations
pursuant to Section 4.7(a).
(c) To prevent the multiple use of the alternative methods of
compliance with the ADP test and the ACP test, the provision of section
1.401(m)-2 of the regulations are hereby incorporated by reference to
determine if such multiple use exists. If, after application of such
test, multiple use exists, the actual contribution percentage shall be
reduced as provided in section 1.401(m)-2(c) of the regulations for all
Highly Compensated Employees in the Plan.
(d) Notwithstanding anything in the Plan to the contrary, an
employer matching contribution may be distributed only if such
contribution is an excess aggregate contribution. It may not be
distributed merely because it relates to an excess deferral, an excess
contribution or an excess aggregate contribution that is distributed.
In such cases, the related matching contribution shall be forfeited
notwithstanding anything in the Plan to the contrary.
4.11 MAXIMUM ANNUAL ADDITIONS: Notwithstanding anything contained herein to
the contrary, the total Annual Additions made to Accounts of a Member for any
Plan Year shall be subject to the following limitations:
IV-6
<PAGE> 26
(a) Single Defined Contribution Plan
(1) If an Employer does not maintain any other
qualified plan, the amount of Annual Additions which may be
allocated under this Plan on a Member's behalf for a Plan Year
shall not exceed the lesser of the Maximum Permissible Amount or
any other limitation contained in this Plan.
(2) Prior to the determination of the Member's actual
Applicable Compensation for a Plan Year, the Maximum Permissible
Amount may be determined on the basis of the Member's estimated
annual Applicable Compensation for such Plan Year. Such
estimated annual Applicable Compensation shall be determined on a
reasonable basis and shall be uniformly determined for all
Members similarly situated.
(3) As soon as is administratively feasible after the
end of the Plan Year, the Maximum Permissible Amount for such
Plan Year shall be determined on the basis of the Member's actual
Applicable Compensation for such Plan Year.
(4) If there are Excess Annual Additions with respect
to a Member for the Limitation Year, such Excess Annual Additions
shall be disposed of as follows:
A. There shall first be returned to the Member
his unmatched Savings Contributions (and earnings
thereon), if any, and then a portion of his matched
Savings Contributions (and earnings thereon), to the
extent, and only to the extent, such returned Savings
Contributions would reduce the Excess Annual Additions.
B. If any of such Excess Annual Additions shall
then remain, the Employer Contributions, including both
Salary Deferral Contributions defined in Section 4.2 and
matching Employer Contributions defined in Section 4.3,
allocated to the Member (and earnings thereon) shall then
be reduced to the extent necessary to eliminate such
remaining Excess Annual Additions. The amount of the
reduction of the Employer Contributions for such Member
shall be reallocated first out of such Member's unmatched
Salary Deferral Contributions, then matching Employer
Contribution Account and then out of his Salary Deferral
Contribution Account, and shall be held in a suspense
account which shall be applied as a part of (and to reduce
to such extent what would otherwise be) the matching
Employer Contributions for all Members required to be made
to the Plan during the next subsequent calendar quarter or
quarters. No portion of such Excess Annual Additions may
be distributed to Members or former Members. If a
suspense account is in existence at any time during the
Plan Year pursuant to
IV-7
<PAGE> 27
this paragraph B, such suspense account shall not
participate in the allocation of investment gains or
losses of the Trust Fund.
(b) Two or More Defined Contribution Plans
(1) If, in addition to this Plan, the Employer
maintains any other qualified defined contribution plan, the
amount of Annual Additions which may be allocated under this Plan
on a Member's behalf for a Plan Year, shall not exceed the lesser
of:
A. the Maximum Permissible Amount, reduced by
the sum of any Annual Additions allocated to the Member's
accounts for the same Plan Year under such other defined
contribution plan or plans; or
B. any other limitation contained in this Plan.
(2) Prior to the determination of the Member's actual
Applicable Compensation for the Plan Year, the amount referred to
in Section 4.11(b)(1), may be determined on the basis of the
Member's estimated annual Applicable Compensation for such Plan
Year. Such estimated annual Applicable Compensation shall be
determined on a reasonable basis and shall be uniformly
determined for all Members similarly situated.
(3) As soon as is administratively feasible after the
end of the Plan Year, the amounts referred to in Section
4.11(b)(1) shall be determined on the basis of the Member's
actual Applicable Compensation for such Plan Year.
(4) If a Member's Annual Additions under this Plan and
all such other defined contribution plans result in Excess Annual
Additions, such Excess Annual Additions shall be deemed to
consist of the amounts last allocated.
(5) If Excess Annual Additions were allocated to a
Member on an allocation date of another plan, the Excess Annual
Additions attributed to this Plan will be the product of:
A. the total Excess Annual Additions allocated
as of such date (including any amount which would have
been allocated but for the limitations of Code Section
415); times
B. the ratio of (A) the amount allocated to the
Member as of such date under this Plan, divided by (B) the
total amount allocated as of such date under all qualified
defined contribution plans (determined without regard to
the limitations of Code Section 415).
IV-8
<PAGE> 28
(6) Any Excess Annual Additions attributed to this Plan
shall be disposed of as provided in Section 4.11(a).
(c) Defined Contribution Plan and Defined Benefit Plan
(1) General Rule - If the Employer maintains one or
more defined contribution plans and one or more defined benefit
plans, the sum of the "defined contribution plan fraction" and
the "defined benefit plan fraction," as defined in Code Section
415, cannot exceed 1.0 for any Plan Year. For purposes of this
paragraph (c) of Section 4.11, Employee contributions to a
qualified defined benefit plan are treated as a separate defined
contribution plan, and all defined contribution plans of an
Employer are to be treated as one defined contribution plan and
all defined benefit plans of an Employer are to be treated as one
defined benefit plan whether or not such plans have been
terminated.
(2) If the sum of the defined contribution plan
fraction and defined benefit plan fraction exceeds 1.0, the
annual benefit of the defined benefit plan or plans (starting
with this Plan first) will be reduced so that the sum of the
fractions will not exceed 1.0. In no event will the annual
benefit be decreased below the amount of the accrued benefit to
date. If additional reductions are required for the sum of the
fractions to equal 1.0, the reductions will then be made to the
defined contribution plan or plans (starting with this Plan
first).
(d) Incorporation by Reference
All provisions of Code Section 415 that may not be applied
in more than one manner are hereby incorporated in the Plan by
references and if any such incorporated provision conflicts with
a provision in the Plan, such incorporated provision shall
control.
4.12 ROLLOVER CONTRIBUTIONS: An Employee who is in the Eligible Class shall
be eligible to make a rollover contribution (whether a "direct" or "indirect"
rollover) to the Plan by wire transfer or by check or other property acceptable
to the Committee, provided such contribution satisfies the requirements of
Section 402(a) of the Code as being a 'qualified rollover,' and the Employee
satisfies such other administrative requirements concerning such rollover
contributions as may be required, including designating the investment fund(s)
for such contribution. Rollover contributions are not subject to an Employer
matching contribution.
4.13 VESTING: Each person who was a Member or an Employee in the Eligible
Class on June 30, 1998 shall always be 100% vested in all of his Accounts,
except that any Member in the Tacoma Plan who was not an Employee on the date
it was merged into the Plan, shall continue to be vested in his merged Accounts
only to the extent vested therein on the merger date, unless he again becomes
an Employee. Each person who becomes a Member after June 30, 1998 shall always
be
IV-9
<PAGE> 29
100% vested in his Savings Contributions, Salary Deferral and Rollover
Accounts, and shall become 100% vested in his Employer Contribution Account
based on his Years of Service in accordance with the following schedule:
<TABLE>
<CAPTION>
Years of Service Vested Percentage
---------------- -----------------
<S> <C>
less than 3 0%
3 or more 100%
</TABLE>
Regardless of his Years of Service however, a Participant who is an
Employee on or after reaching age 65 shall be 100% vested in all his Accounts.
Further, in the event a Participant's employment with the Employers and
Affiliated Companies is terminated by reason of disability (as determined for
purposes of Title II of the Federal Social Security Act) or death, he shall
also be deemed to be 100% vested in all his Accounts.
Notwithstanding the foregoing schedule, in the event the Plan is
terminated or partially terminated or the Employers' contributions under the
Plan are completely discontinued, each affected Member shall thereupon be 100%
vested in all his Accounts as of the date of such discontinuance or termination
or partial termination.
IV-10
<PAGE> 30
ARTICLE V
INVESTMENTS
5.1 DIRECTION OF INVESTMENTS:
(a) Each Member shall direct, when he authorizes Savings
Contributions, elects to have made Salary Deferral Contributions or
makes a Rollover Contribution, that such contributions be invested in
one or more of the investment funds offered under the Plan (as set forth
on Attachment A, which is made a part of the Plan for all purposes) in
increments of 1%; provided, however, a Rollover Contribution may not be
invested in the Company Stock Fund. Employer matching contributions
shall be invested in the same manner as the Member's contributions with
respect to which they are made. The Committee may, from time to time,
add additional investment funds and/or delete existing investment funds
offered under the Plan by giving advance notice to the Members. The
Committee shall have the full power and authority to make such rules as
necessary or appropriate to add or delete a fund, including amending the
Plan and Trust to effectuate such change.
(b) Each Member may change the investment of the existing
balances in his Accounts, by authorizing a transfer from one investment
fund to one or more of the other investment funds in 1% increments, as
of any Valuation Date by giving notice to the Plan's record keeper in
accordance with the Plan's administrative procedures then in effect;
provided, however, existing Account balances may not be transferred into
the Company Stock Fund.
(c) Each Member may change the current investment direction
concerning his future Savings and Salary Deferral Contributions as of
any Valuation Date by giving notice to the Plan's record keeper in
accordance with the Plan's administrative procedures then in effect.
5.2 COMPANY STOCK FUND: With respect to the Company Stock Fund, the Trustee
shall vote the shares of Company Stock held in the Company Stock Fund for the
respective Accounts of the Members in accordance with the directions of such
Members, provided such directions are received by the Trustee at least five
days before the date set for the meeting at which such shares are to be voted.
The Trustee shall not vote shares of Company Stock for which it has not
received timely instructions on a particular matter, unless otherwise required
by ERISA. Each Member (or, in the event of his death, his beneficiary) shall
have the right, to the extent of the number of shares of Company Stock
allocated to his Accounts in the Company Stock Fund, respectively, to instruct
the Trustee in writing as to the manner in which to respond to a tender offer
or exchange offer with respect to such shares. The Committee shall use its
best efforts timely to distribute or cause to be distributed to each Member (or
beneficiary thereof) such information as will be distributed to stockholders of
the Company in connection with any such tender offer or exchange offer. Upon
timely receipt of such instructions, the Trustee shall respond as instructed
with respect to shares of such stock. The instructions received by the Trustee
from Members shall be held by the Trustee in
V-1
<PAGE> 31
confidence and shall not be divulged or released to any person, including
officers or employees of the Corporation or any Affiliated Company. If the
Trustee shall not receive timely instructions from a Member (or beneficiary
thereof) as to the manner in which to respond to such tender offer or exchange
offer, such Member (or beneficiary) shall be deemed to have instructed the
Trustee not to tender or exchange the Company Stock.
V-2
<PAGE> 32
ARTICLE VI
PAYMENT OF CONTRIBUTIONS AND ALLOCATIONS
6.1 PAYMENT OF CONTRIBUTIONS: Each Employer shall, as soon as reasonably
practicable following each payroll period, pay to the Trustee the amounts
representing payroll deductions pursuant to Savings Contributions and the
amounts representing salary reductions pursuant to its Members Salary Deferral
Contributions. Employer Contributions shall be made to the Trustee in full
prior to the due date including extensions thereof, for filing the Employer's
federal income tax return for its taxable year which ends coincident with the
end of such Plan Year or within which such Plan Year ends, as the case may be.
The Trustee shall hold or apply the contributions so received by it in
accordance with the provisions of the Plan; and no part thereof shall be used
for any purpose other than the exclusive benefit of the Members or their
beneficiaries. Contributions shall be made in cash (by check or wire transfer)
or, with respect to Employer Contributions to be invested in the Company Stock
Fund, in the sole discretion of the Corporation, in shares of Company Stock.
6.2 VALUATION OF TRUST FUND: The Trustee shall value the assets of the Trust
Fund at fair market value as of each Valuation Date. With respect to an
Account (or the portion thereof) that is invested in a mutual fund, the fair
market value shall be determined based on the reported value of a unit in such
fund for the applicable Valuation Date. With respect to an Account (or the
portion thereof) that is invested in the Company Stock Fund, the fair market
value shall be the fair market value of the shares of Company Stock allocated
to such Account on the applicable Valuation Date. The Trustee's determination
of the value of any Account shall be final and conclusive for all purposes of
the Plan.
6.3 FUNDING POLICY: The provisions of Articles IV and VI shall be deemed the
procedure for establishing and carrying out the funding policy and method of
the Plan. Such funding policy and method shall be administered by the
Employers and other fiduciaries consistent with the objectives of the Plan and
with the requirements of Title I of ERISA.
VI-1
<PAGE> 33
ARTICLE VII
DISTRIBUTION OF ACCOUNTS
7.1 TIME OF DISTRIBUTION: For separations from service occurring after
1997, if the vested value of the Member's Accounts is less than or equal to
$5,000 (for separations from service prior to 1998, $3,500 shall be substituted
for $5,000 here and below, unless IRS rules permit the $5,000 limit to apply to
such Members), distribution of the Member's Accounts shall be made as soon as
practicable after the Member's separation from service; however, if the total
vested value of the Member's Accounts exceeds (or at the time of any prior
withdrawal or distribution, exceeded) $5,000, the Member's Accounts shall be
distributed only upon his written consent following his separation of service,
but in any event no later than 60 days after the end of the Plan Year in which
occurs the earlier of the Member's death or attainment of age 65. If a
Member's termination of service occurs after attainment of age 65, distribution
shall be made within 60 days after the end of the Plan Year in which
termination occurs; however, Effective January 1, 1997, benefit payments to any
Member who reaches age 70-1/2 prior to 1999 (excluding any 5% or more owner)
must begin by April 1 of the calendar year following the year in which the
individual attains age 70-1/2, whether or not the person has terminated
service, unless such Member (excluding any 5% or more owner) elects to defer
distribution until his termination of employment. All benefits payable because
of a Member's death shall be paid to the Member's beneficiary in a single,
lump-sum distribution as soon as practicable and in all events within five
years of the Member's date of death. If a Member dies after distributions have
begun following his termination of employment and before his entire interest
has been distributed to him, the remaining portion will be distributed to his
beneficiary at least as rapidly as the method in effect on the Member's date of
death.
Notwithstanding anything in the Plan to the contrary, amounts held in
the Member's Salary Deferral Contribution Account may not be distributable
prior to the earlier of:
(a) his separation from service (within the meaning of Code
Section 401(k)), total and permanent disability, or death;
(b) his attainment of age 59-1/2;
(c) termination of the Plan without establishment of a
successor plan by the Employer or an Affiliated Company;
(d) the date of the sale by the Employer to an entity that is
not an Affiliated Company of substantially all of the assets (within the
meaning of Code Section 409(d)(2)) with respect to a Member who
continues employment with the corporation acquiring such assets;
provided the Employer continues to maintain the Plan;
(e) the date of the sale by the Employer of its interest in a
subsidiary (within the meaning of Code Section 409(d)(3)) to an entity
which is not an Affiliated Company with
VII-1
<PAGE> 34
respect to a Member who continues employment with such subsidiary;
provided the Employer continues to maintain the Plan; or
(f) proven financial hardship, subject to the limitations of
Section 7.6, and any distribution due to items (c), (d) or (e) above may
only be made in a lump sum.
7.2 DISTRIBUTIONS FROM ACCOUNTS FOLLOWING SEPARATION FROM SERVICE:
Following a Member's separation from service, his Accounts shall be distributed
as follows: subject to Section 7.8, the Member's Accounts shall be distributed
to the Member or his beneficiary, as the case may be, in a lump sum payment in
cash or, with respect to the portion of the Account invested in the Company
Stock Fund, if any, in shares of Company Stock, if elected.
7.3 PARTIAL WITHDRAWALS:
(a) Pre-1987 Member Contribution Withdrawals. As of any
Valuation Date, a Member who is an Employee may, by giving proper
notice, elect to withdraw from such Member's Pre-1987 Savings
Contributions Subaccount under his Savings Contribution Account any
dollar amount of such contributions without investment earnings thereon.
The amount withdrawn may not exceed the amount of such contributions
made prior to 1987.
(b) Post-1986 Member Contribution Withdrawals. A Member who
is an Employee and who has withdrawn all the funds available (if any)
pursuant to (a) above may, as of any Valuation Date, by giving proper
notice, elect to withdraw from such Member's Savings Contributions
Account all or any part of such Account.
(c) Rollover Account Withdrawals. A Member who is an Employee
and has withdrawn all funds available (if any) pursuant to (a) and (b)
above may, as of any Valuation Date, by giving proper notice, elect to
withdraw all or any part of such Member's Rollover Account.
Withdrawals shall be in cash unless the Account is invested in the
Company Stock Fund and the Member elects to withdraw shares.
If the withdrawal made pursuant to this Section 7.3 is with respect to a
contribution that received a matching Employer contribution in the preceding 24
months, the Member shall not be entitled to Employer matching contributions
with respect to any Savings or Salary Deferral Contributions he may make during
the following 6-month period.
7.4 TOTAL WITHDRAWAL: A Member who is an Employee and who withdraws all
funds available pursuant to Section 7.3 may, as of any Valuation Date, by
giving proper notice, elect to withdraw from such Member's Employer
Contributions Account all or any part of the vested portion of such Member's
Employer Contributions Account; provided, however, a Member may make such a
withdrawal only if he has been a Member for at least 60 months prior to date of
such withdrawal.
VII-2
<PAGE> 35
A Member who makes a withdrawal pursuant to this Section shall not be entitled
to Employer matching contributions with respect to any Savings or Salary
Deferral Contributions he may make during the following 6-month period.
Withdrawals shall be in cash unless the Account is invested in the Company
Stock Fund and the Member elects to withdraw shares.
If the withdrawal made pursuant to this Section 7.3 is with respect to a
contribution that received a matching Employer contribution in the preceding 24
months, the Member shall not be entitled to Employer matching contributions
with respect to any Savings or Salary Deferral Contributions he may make during
the following 6-month period.
7.5 SPECIAL WITHDRAWAL AFTER ATTAINMENT OF AGE 59-1/2: Each Member who is
an Employee, is fully vested, and has attained age 59-1/2 may withdraw all or
any portion of his Employer Contribution Account, and, even if not fully
vested, his Salary Deferral Contribution Account as of any Valuation Date by
giving proper notice of such withdrawal. Withdrawals shall be in cash unless
the Account is invested in the Company Stock Fund and the Member elects to
withdraw shares.
If the withdrawal made pursuant to this Section 7.3 is with respect to a
contribution that received a matching Employer contribution in the preceding 24
months, the Member shall not be entitled to Employer matching contributions
with respect to any Savings or Salary Deferral Contributions he may make during
the following 6-month period.
7.6 HARDSHIP WITHDRAWALS: A Member who is an Employee may request for a
hardship withdrawal from his Salary Deferral Contribution Account and, if fully
vested, his Employer Contribution Account. The approval or disapproval of such
request shall be made by the Committee. The Committee shall not approve any
such request unless it finds that the Member is facing a hardship creating an
"immediate and heavy financial need" (as defined below) and the Member has
obtained all distributions, other than hardship distributions, and all
nontaxable loans currently available under the Plan and all other plans of the
Employer and its ERISA affiliates. To the extent the Member is fully vested in
his Employer Contribution Account, the withdrawal shall be taken first from
that Account. The amount of the hardship withdrawal shall be limited to an
amount that does not exceed: (1) that amount which the Committee determines to
be required to meet the immediate financial needs created by the hardship,
which may include any amounts necessary to pay any federal, state or local
income taxes or penalties reasonably anticipated to result from the
distribution, and (2) if made from the Participant's Salary Deferral
Contribution Account, the amount of the Salary Deferral Contribution Account,
but excluding all earnings credited to such Account after 1988. Further, if a
hardship distribution is made under the Plan, the restrictions set forth in
subparagraph (b) below shall apply. The hardship withdrawal shall be made in
cash as soon as practical after the date the Member submitted the hardship
request. The following standards shall be applied on a uniform and non-
discriminatory basis in determining the existence of a hardship:
(a) A financial need shall be deemed to be an "immediate and
heavy financial need" if it is on account of:
VII-3
<PAGE> 36
(1) Medical expenses described in section 213(d) of the
Code incurred by the Member, the Member's spouse, or any
dependents of the Member (as defined in section 152 of the Code)
or necessary for these persons to obtain such medical care;
(2) Costs directly related to the purchase (excluding
mortgage payments) of a principal residence for the Member;
(3) Payment of tuition, related educational fees, and
room and board expenses for the next 12 months of post-secondary
education for the Member, his or her spouse, children, or
dependents; or
(4) The need to prevent the eviction of the Member from
his principal residence or foreclosure on the mortgage of the
Member's principal residence; or
(5) any other "safe-harbor" event established from time
to time by the Internal Revenue Service.
(b) Upon a hardship distribution,
(1) The Member's 401(k) contributions and after-tax
contributions under the Plan, and all other plans maintained by
the Employer and its ERISA affiliates (other than a health or
welfare benefit plan or the mandatory employee contribution
portion of a defined benefit plan), will be suspended for 12
months, and
(2) The Member may not make 401(k) contributions under
the Plan, and all other plans maintained by the Employer and its
ERISA affiliates, for the Member'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 the Member's elective
contributions for the taxable year of the hardship distribution.
Withdrawals shall be in cash unless the Account is invested in the
Company Stock Fund and the Member elects to withdraw shares.
If the withdrawal made pursuant to this Section 7.3 is with respect to a
contribution that received a matching Employer contribution in the preceding 24
months, the Member shall not be entitled to Employer matching contributions
with respect to any Savings or Salary Deferral Contributions he may make during
the following 6-month period.
7.7 LOANS TO MEMBERS: Loans shall be granted in a uniform and non-
discriminatory manner to Members (as used herein, a Member includes a
beneficiary) from their Accounts, provided the Member is a "party in interest"
under ERISA, subject to the following terms and conditions:
VII-4
<PAGE> 37
(a) Loans made pursuant to this Section (when added to the
outstanding balance of all other loans made by the Plan to the Member)
shall be limited to the lesser of:
(1) $50,000 reduced by the excess (if any) of the
highest outstanding balance of loans from the Plan to the Member
during the one-year period ending on the day before the date on
which such loan is made, over the outstanding balance of loans
from the Plan to the Member on the date on which such loan was
made, or
(2) one-half of the value of the vested portion of the
Member's Accounts.
For purposes of this limit, all plans of the Employer and Affiliated
Companies shall be considered one plan. Each loan must be for at least
$1,000.
(b) Loans shall provide for the level amortization of
principal and interest with payments to be made not less frequently than
monthly over a period not to exceed five years. However, loans used to
acquire any dwelling unit which, within a reasonable time, is to be used
(determined at the time the loan is made) as a principal residence of
the borrower shall provide for periodic repayment over a period of time
not to exceed ten years. Loans shall be evidenced by a note signed by
the Member payable in monthly installments. All loans shall bear
interest at the rate in effect in the commercial loan division of the
Trustee or an affiliated bank to the Trustee for loans of a similar
nature on the date the loan is made, and if the Trustee does not provide
such a rate of interest itself or through an affiliated bank, then the
rate at any bank handling the Company's accounts as determined by the
Committee, for loans of a similar nature on the date the loan is made.
(c) Loans must be repaid by means of an irrevocable payroll
deduction election, unless the Member is not receiving a salary from the
Employer that is sufficient to allow deduction of the full loan
payments, in which case any excess of payments due over the amount
deductible from the Member's salary shall be paid to the Plan by the
Member in level installments each pay period, but in no event less
frequently than monthly. All loans shall become due and payable in full
upon the date a Member ceases to be a "party in interest" to the Plan.
(d) Loans shall be made first from the Rollover Account, then
the Salary Deferral Contribution Account. If the balance in the Salary
Deferral Contribution Account is less than the amount of the requested
loan, the remainder of the loan shall be made next from the Employer
Contribution Account, and last from the Savings Contribution Account.
Any loan under the Plan shall be secured by the pledge of all of the
Member's right, title and interest in an amount of his or her vested
Accounts equal to the amount of the loan, but not exceeding 50% of such
vested Accounts as determined immediately after such loan. Such pledge
shall be executed by the Member and his Spouse, if any, which shall
provide that, in the event of any default on a loan repayment, the
Committee shall be authorized to take any and all appropriate lawful
actions necessary to enforce collection of
VII-5
<PAGE> 38
the unpaid loan. In addition, the promissory note shall provide that,
in the event of a default on the loan repayment, both the principal and
accrued, unpaid interest shall be immediately due and payable. If the
Member is subject to the provisions of Section 401(a)(11) of the Code at
the time the vested Accounts are pledged as security for the loan, the
spousal consent must be obtained in the proper form.
(e) A request for a loan shall be made in accordance with the
Plan's administrative procedures, which may specify the order in which
the investment fund(s) within each of the Account(s) are invested shall
be redeemed to make the requested loan, and shall constitute a written
consent to a distribution or deemed distribution of the Account(s), if
necessary, in the event of a default. If a request for a loan is
approved by the Committee, the Committee shall furnish or cause to be
furnished the Trustee with instructions directing the Trustee to make
the loan in a lump-sum payment of cash to the Member.
(f) A loan shall be considered an investment of the separate
Account(s) of the Member from which the loan is made. All loan
repayments of principal and interest shall be credited to such separate
Account(s) and reinvested in the investment funds in accordance with the
Member's election in effect for his current contributions, or, if none
is in effect, his most recent such election.
(g) Only two loans may be outstanding at any time to a Member.
(h) Loan repayments will be suspended under this Plan as
permitted under Code Section 414(u)(4).
(i) All or part of the reasonable administrative costs of
establishing and maintaining a loan may be charged to the borrowing
Member.
7.8 METHODS OF DISTRIBUTION: Distributions shall be made in a lump sum in
cash (and, with respect to Accounts invested in the Company Stock Fund, in
shares of Company Stock, if elected) unless a Member (and his Spouse, if
applicable) have made the proper election to receive one of the following
optional forms of payment.
(a) Joint and Survivor Annuity. If a Member is married on the
benefit payment date and elects not to receive a lump sum, distribution
shall be in the form of a Joint and Survivor Annuity, which shall be an
annuity for the life of the Member with a contingent annuity for the
life of the Member's Spouse, if she survives him, which is 50% of the
amount of the annuity payable to the Member had he lived. The Joint and
Survivor Annuity shall be maximum amount that may be obtained by
purchasing an annuity contract with the Member's Accounts from an
insurance company selected by the Committee. Subject to Sections 7.9
and 9.1, a married Member may elect to receive the Single Life Annuity
or to designate someone other than his Spouse as his contingent joint
annuitant; provided it must
VII-6
<PAGE> 39
be expected that the Member will receive more than 50% of the present
value of his Accounts under such annuity.
(b) Single Life Annuity. If a Member who is not married on
the benefit payment date elects not to receive a lump sum, the Member
shall receive his distribution in the form of a Single Life Annuity
providing him with equal monthly payments for his lifetime. The amount
of such annuity shall be the maximum amount that may be obtained by
purchasing an annuity contract with the Member's Accounts from an
insurance company selected by the Committee. Subject to Section 7.9,
the Member may elect to receive the Joint and Survivor Annuity.
(c) A Member may elect to receive his distribution in annual,
semi-annually, quarterly or monthly installments payable in
substantially equal amounts continuing over a period certain not
exceeding the Member's (or the Member's and his beneficiary's joint)
life expectancy(ies) as of the date such payments begin. At the time of
the election, the Member must specify the fixed period and the frequency
of the installments elected. The installment payments shall be provided
from an insurance company contract purchased with the amount of the
Accounts.
7.9 ELECTION TO RECEIVE AN ANNUITY: The Committee shall furnish certain
general information pertinent to the annuities to each Member at least 30 but
not more than 90 days prior to such Member's benefit payment date. The
furnished information shall be in accordance with such regulations as the
Secretary of the Treasury may prescribe and shall include a general explanation
of (i) the annuity, (ii) the Member's right to make, and the effect of an
election or revocation of an election to receive the annuity, and (iii) the
rights of the Spouse with respect to the Joint and Survivor Annuity. The
period of time during which a Member may make the election described in this
Section 7.9 shall be at any time during the 90-day period prior to the Member's
benefit payment date. Any election may be revoked and subsequent elections may
be made or revoked at any time and any number of times during such election
period.
7.10 PRE-RETIREMENT SURVIVOR ANNUITY: Except as provided below, if a married
Member who has elected the Joint and Survivor Annuity dies before his benefit
payment date, his Spouse shall receive a Pre-retirement Survivor Annuity
commencing as soon as practicable following the date of the Member's death;
however, the Spouse may direct that the annuity start on any subsequent date
specified by the Spouse which is not later than the date the Member would have
reached age 65. The amount of the annuity (equal monthly payments for the
Spouse's lifetime) shall be the maximum amount that may be obtained with the
Member's Accounts by purchasing an annuity contract from an insurance company
selected by the Committee.
A Spouse who is entitled to receive the Pre-retirement Survivor Annuity
may elect to receive a lump sum payment of the Member's Accounts in lieu of the
annuity by furnishing the Committee the proper form at any time prior to the
date such insurance contract is purchased.
VII-7
<PAGE> 40
7.11 ELECTION NOT TO RECEIVE THE PRE-RETIREMENT SURVIVOR ANNUITY: A Member
who has elected to receive the Joint and Survivor Annuity may elect, by
executing the election form prescribed by the Committee, not to be covered by
the Pre-retirement Survivor Annuity. Such election must be made during the
election period described below. Any election may be revoked and subsequent
elections may be made or revoked at any time during such election period. Any
such election and any revocation of such election must be signed by the
Member's Spouse and acknowledge the effect of such election on the Spouse's
right to benefits and further, the Spouse's signature must be notarized, and
designate a specific beneficiary and the specific form of payment that cannot
be changed without a new spousal consent.
The Committee shall furnish certain general information pertinent to
this election to each Member within the period beginning on the first day of
the Plan Year in which the Member attains age 32 and ending with the close of
the Plan Year preceding the Plan Year in which the Member attains age 35. With
respect to an Employee who becomes a Member of the Plan after the date the
general information is required to be furnished, such information shall be
furnished on or about the date that such Member begins participation in the
Plan. The furnished information shall be written in accordance with such
regulations as the Secretary of Treasury may prescribe and shall contain a
general explanation of (i) the terms and conditions of Pre-retirement Survivor
Annuity (ii) the Member's right to make and the effect of, an election or
revocation of an election to waive the Pre-retirement Survivor Annuity, and
(iii) the rights of the Member's Spouse with respect to the Pre-retirement
Survivor Annuity. The Member may make or revoke the election described in this
Section 7.11 at any time.
7.12 DIRECT ROLLOVER: 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 Committee, to have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the distributee in a
direct rollover.
Eligible rollover distribution: An eligible rollover distribution is
any distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not include:
any distribution that is one of a series of substantially equal periodic
payments (not less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint life expectancies)
of the distributee and the distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent such
distribution is required under section 401(a)(9) of the Code; and the portion
of any distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to
employer securities).
Eligible retirement plan: An eligible retirement plan is an individual
retirement account described in section 408(a) of the Code, an individual
retirement annuity described in section 408(b) of the Code, an annuity plan
described in section 403(a) of the Code, or a qualified trust described in
section 401(a) of the Code, that accepts the distributee's eligible rollover
distribution. However,
VII-8
<PAGE> 41
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.
Distributee: A distributee includes an Employee or former Employee. In
addition, the employee's or former Employee's surviving spouse and the
Employee's or former Employee's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in section 414(p)
of the Code, are distributees with regard to the interest of the spouse or
former spouse.
Direct rollover: A direct rollover is a payment by the plan to the
eligible retirement plan specified by the distributee.
7.13 30-DAY WAIVER: If a distribution is one to which sections 401(a)(11)
and 417 of the Code do not apply, such distribution may commence less than 30
days after the notice required under section 1.411(a)-11(c) of the Income Tax
Regulations is given, provided that:
(1) the Committee clearly informs the Member that the Member
has a right to a period of at least 30 days after receiving the notice
to consider the decision of whether or not to elect a distribution (and,
if applicable, a particular distribution option), and
(2) the Member, after receiving the notice, affirmatively
elects a distribution.
7.14 FORFEITURES: Upon a Member's termination of employment with the
Employers and Affiliated Companies the nonvested portion of the Member's
Employer Contributions Account (if any) shall continue to be held in the Trust
until forfeited as of the earlier of the date the Member incurs five
consecutive Breaks in Service or receives a complete distribution of his vested
Accounts. Forfeited account balances shall be used to reduce future Employer
contributions otherwise due under the Plan. However, if a Member again becomes
an Employee in the Eligible Class prior to incurring five consecutive Breaks in
Service, his forfeited amount shall be restored, unadjusted for any interim
Trust fund gains or losses, through a special allocation of then existing
forfeitures and/or additional Employer contributions, provided the Member
repays the full amount of such prior distribution to the Plan in cash before
the fifth anniversary of his reemployment date or prior to incurring five
consecutive Breaks of Service, whichever occurs first.
VII-9
<PAGE> 42
ARTICLE VIII
AUTHORIZED ABSENCES
8.1 AUTHORIZED ABSENCES: Employee status and service shall include, and
shall not be interrupted by, the following authorized absences for which the
Employee is not directly or indirectly paid:
(a) Absence due to accident or sickness so long as the Member
is continued on the employment rolls of the Employer or Affiliated
Company and remains eligible to work upon his recovery.
(b) Absence due to an authorized absence for a period not to
exceed two years for such reasons and subject to such conditions as may
be approved by the board of directors of his Employer for general
application to all Employees similarly situated, provided that each such
Member shall immediately, upon expiration of such authorized absence,
apply for reinstatement in the employment of the employing company.
(c) Absences in compliance with the Family Medical Leave Act.
Notwithstanding any provision of this Plan to the contrary,
contributions, benefits and service credit with respect to qualified military
service will be provided in accordance with Code Section 414(u).
8.2 EFFECT OF AUTHORIZED ABSENCES: Members on Authorized Absence status
shall be treated as if they were employed by a non-participating Affiliated
Company.
VIII-1
<PAGE> 43
ARTICLE IX
BENEFICIARIES IN THE EVENT OF DEATH
9.1 BENEFICIARIES: Upon the death of a Member, his Vested Accounts shall be
distributed to the beneficiary or beneficiaries designated by him in a written
designation on a Plan form filed with his Employer or, if no such designation
shall have been so filed, to his Spouse or, if none, to his estate. No such
designation of beneficiary shall be effective (whether or not made prior to
marriage) if the Member has a Spouse as of his date of death, unless such
Spouse is designated as the sole beneficiary, or unless such Spouse consents to
the designation of another specified person (and form of payment) as
beneficiary. The Spouse's consent must be in writing, acknowledge the effect
of the consent on the Spouse's right to benefits under the Plan, and be
witnessed by a Plan representative or a notary public. The beneficiary
designated by the Member may not be changed without the Spouse's consent,
however, a revocation of a designation of a beneficiary other than the Spouse
may be made by a Member without the consent of the Spouse at any time before
the distribution of the benefit under the Plan. The Spouse's consent to a
beneficiary designation shall not be required if it is established to the
satisfaction of the Committee that such written consent may not be obtained
because there is no Spouse or the Spouse cannot be located. Any consent under
this Article IX will be valid only with respect to the Spouse who signs the
consent. The divorce of a Member shall automatically revoke such former spouse
as his beneficiary under the Plan, except to the extent otherwise provided in a
qualified domestic relations order.
IX-1
<PAGE> 44
ARTICLE X
ADMINISTRATION
10.1 ADMINISTRATIVE COMMITTEE: The Corporation shall act as the
administrator of the Plan and shall have all of the powers and responsibilities
conferred upon administrators under ERISA. However, an Administrative
Committee composed of such persons, as may be determined from time to time by
the Board of Directors, may be appointed by the Board to perform the duties of
the Corporation.
The Committee shall elect a Chairman from its number, and a Secretary,
and such other officers as the Committee may determine, who may, but need not,
be members of the Committee, to serve during the pleasure of the Committee.
The Secretary shall keep a record of all meetings and forward all necessary
communications to the Companies and the Trustee. The Chairman of the Committee
shall be agent of the Plan and the Committee for the service of legal process.
Any person appointed a member of the Committee shall signify his
acceptance by filing written acceptance with the Board of Directors. Any
member of the Committee may resign by delivering his written resignation to the
Board of Directors, and such resignation shall become effective at delivery or
at any later date specified therein.
No member of the Committee who is also an officer or employee of any of
the Companies receiving compensation as such shall receive any compensation for
his services as such member. No bonds or other security shall be required of
any member except as required by law.
No member of the Committee shall act or participate in any action
relating solely to his own Account or any other right or privilege under the
Plan.
10.2 POWER OF THE COMMITTEE: The Committee shall have the power:
(a) To determine the times and places for holding meetings of
the Committee and the notices to be given of such meetings, and to
establish other rules for the functioning of the Committee;
(b) To determine the number of members of the Committee at the
time in office which shall constitute a quorum for the transaction of
business, which number shall not be less than a majority of the members
then in office;
(c) To employ such agents and assistants, such counsel (who
may be of counsel to the Companies) and such clerical, medical,
accounting, investment and actuarial services as the Committee may
require in carrying out the provisions of the Plan;
(d) To authorize one or more of their number, or any agent, to
make any payment, or to execute or deliver any instrument, on behalf of
the Committee, except that all
X-1
<PAGE> 45
requisitions for funds from, and requests, directions, notifications,
certifications, and instructions to, the Trustee or to the Company or
Affiliated Companies shall be signed on behalf of the Committee by two
members of the Committee, provided that one of the members signing shall
be the Secretary or Assistant Secretary thereof;
(e) To fix and determine the proportions of costs of the Plan
from time to time to be paid by the Company or Affiliated Companies;
(f) To determine, from the records of the Company or
Affiliated Companies, the considered Compensation, service and other
facts regarding Employees;
(g) To construe and interpret the Plan, decide all questions
of eligibility and determine the amount, manner and time of payment of
any benefits hereunder;
(h) To prescribe forms and procedures to be followed by
Employees applying for membership, Members electing or changing Savings
Contributions or Salary Deferral Contributions, Members or beneficiaries
filing applications for benefits, Members applying for withdrawals, and
other occurrences in the administration of the Plan;
(i) To prepare and distribute, in such manner as the Committee
determines to be appropriate, information explaining the Plan;
(j) To receive from the Company, or Affiliated Companies, and
from Members, such information as shall be necessary for the proper
administration of the Plan;
(k) To furnish the Company or Affiliated Companies, upon
request, such annual reports with respect to the administration of the
Plan as are reasonable and appropriate;
(l) To receive, review and keep on file (as it deems
convenient or proper) reports of the financial condition, and of the
receipts and disbursements, of the Trust Fund from the Trustee;
(m) To set up such rules, applicable to all Employees
similarly situated, as are deemed necessary to carry out the terms of
the Plan; and
(n) To perform all other acts reasonably necessary for
administering the Plan and carrying out its Provisions and performing
the duties imposed upon the Committee.
10.3 DUTIES OF THE COMMITTEE: The Committee shall have the general
responsibility for administering the Plan and carrying out its provisions;
subject, however, to the provisions of the Plan and the Trust Agreement.
X-2
<PAGE> 46
Subject to the limitations of the Plan, the Committee, from time to
time, shall establish rules for the administration of the Plan and the
transaction of its business. As to all matters of administration not reserved
in the Plan to the Board of Directors or the Boards of Directors of the
Employers, the determination of the Committee as to any disputed question shall
be conclusive. All such rules and decisions of the Committee shall be
uniformly and consistently applied in order that all Members in similar
circumstances shall be treated alike.
It shall be the duty of the Committee to notify the Trustee in writing
of the termination of service of any Member under the Plan and of the amount of
cash which shall be payable to such Member upon termination of service, and the
date distributions are to commence. The Committee shall not requisition any
payment from the Trustee except upon certification by the Committee that such
amount is for payment of benefits under the Plan or for the payment of expenses
of administering the Plan. Any such certification by the Committee shall be
deemed conclusively true insofar as the Trustee is concerned.
All resolutions or other actions taken by the Committee at the meeting
shall be by vote of the majority of the Committee attending the meeting.
10.4 ACCOUNTS RECORDS: The Committee shall maintain accounts showing the
fiscal transactions of the Plan and shall keep, or cause the Employers to keep,
in convenient form, such data as may be necessary for valuation of the assets.
The Committee shall prepare annually a report showing in reasonable summary the
assets and liabilities of the Plan and giving a brief account of the operation
of the Plan for the past Plan Year and any further information which the Boards
of Directors of the Employers may require and as the Committee can reasonably
furnish or can obtain from the Trustee. Such report shall be submitted to the
Boards of Directors of the Employers and shall be filed in the office of the
Secretary of the Committee, where it shall be open to inspection by any Member.
The Committee shall exercise such other authority and responsibility as it
deems appropriate in order to comply with ERISA and governmental regulations
issued thereunder relating to (i) records of Members' service, Account balances
and the percentage of such Account balances which are nonforfeitable under the
Plan; (ii) notifications to Members; and (iii) annual reports to the Internal
Revenue Service. Unless otherwise required by law, the Committee may authorize
any method of accounting for, or of reporting, information with respect to Plan
assets and Account balances which fairly and accurately presents the fair
market value, determined in accordance with the Plan, of the Plan assets and
Account balances as of such date.
10.5 ALLOCATION OF RESPONSIBILITY AMONG FIDUCIARIES FOR PLAN AND TRUST FUND
ADMINISTRATION: The fiduciaries of the Plan shall have only those specific
powers, duties, responsibilities and obligations as are specifically given them
under this Plan or the Trust Agreement. In general, the Companies shall have
the sole responsibility for making the contributions provided under Article IV.
The Board of Directors shall have the sole authority to appoint and remove the
Trustee, members of the Committee and to amend or terminate, in whole or in
part, this Plan or the Trust. The Committee shall have the sole responsibility
for the administration of this Plan, which responsibility is specifically
described in this Plan and the Trust. The Committee shall have the sole
responsibility
X-3
<PAGE> 47
for selecting an entity to hold and manage the assets in the Plan and for
selecting a guaranteed investment contract(s) to be acquired by the Trustee.
The Trustee shall have the sole responsibility for the administration of the
Trust Fund and the management of the assets held under the Trust, except when
an Investment Manager has been appointed by the Committee, all as specifically
provided in the Trust. Each fiduciary shall warrant that any directions given,
information furnished, or action taken by it shall be in accordance with the
provisions of the Plan or the Trust Agreement, as the case may be, authorizing
or providing for such direction, information or action. Furthermore, each
fiduciary may rely upon any such direction, information or action of another
fiduciary as being proper under this Plan or the Trust, and is not required
under this Plan or the Trust Agreement to inquire into the propriety of any
such direction, information or action. It is intended under this Plan and the
Trust Agreement that each fiduciary shall be responsible for the proper
exercise of its own powers, duties, responsibilities and obligations under this
Plan and the Trust and shall not be responsible for any act or failure to act
of another fiduciary. No fiduciary guarantees the Trust Fund in any manner
against investment loss or depreciation in asset value.
10.6 PRESENTING CLAIMS FOR BENEFIT: Any Member or any beneficiary claiming
under a deceased Member, may submit written application to the Committee for
the payment of any benefit asserted to be due him under the Plan. Such
application shall set forth the nature of the claim and such other information
as the Committee may reasonably request. Promptly upon the receipt of any
application required by this Section 10.6, the Committee shall determine
whether or not the Member or beneficiary involved is entitled to a benefit
hereunder and, if so, the amount thereof and shall notify the claimant of its
findings.
If a claim is wholly or partially denied, the Committee shall so notify
the claimant within 90 days after receipt of the claim by the Committee, unless
special circumstances require an extension of time for processing the claim.
If such an extension of time for processing is required, written notice of the
extension shall be furnished to the claimant prior to the end of the initial
90-day period. In no event shall such extension exceed a period of 90 days
from the end of such initial period. The extension notice shall indicate the
special circumstances requiring an extension of time and the date by which the
Committee expects to render its final decision. Notice of the Committee's
decision to deny a claim in whole or in part shall be set forth in a manner
calculated to be understood by the claimant and shall contain the following:
(a) the specific reason or reasons for the denial,
(b) specific reference to the pertinent Plan provisions on
which the denial is based,
(c) a description of any additional material or information
necessary for the claimant to perfect the claim and an explanation of
why such material or information is necessary, and
(d) an explanation of the claims review procedure set forth in
Section 10.7 hereof.
X-4
<PAGE> 48
If notice of denial is not furnished, and if the claim is not granted
within the period of time set forth above, the claim shall be deemed
denied for purposes of proceeding to the review stage described in Section
10.7.
10.7 CLAIM REVIEW PROCEDURE: If an application filed by a Member or
beneficiary under Section 10.6 above shall result in a denial by the Committee
of the benefit applied for, either in whole or in part, such applicant shall
have the right, to be exercised by written application filed with the Committee
within 60 days after receipt of notice, of the denial of his application or, if
no such notice has been given, within 60 days after the application is deemed
denied under Section 10.6 to request the review of his application and of his
entitlement to the benefit applied for. Such request for review may contain
such additional information and comments as the applicant may wish to present.
Within 60 days after receipt of any such request for review, the Committee
shall reconsider the application for the benefit in light of such additional
information and comments as the applicant may have presented, and if the
applicant shall have so requested, shall afford the applicant or his designated
representative a hearing before the Committee. The Committee shall also permit
the applicant or his designated representative to review pertinent documents in
its possession, including copies of the plan document and information provided
by the Company relating to the applicant's entitlement to such benefit. The
Committee shall make a final determination with respect to the applicant's
application for review as soon as practicable, and in any event not later than
60 days after receipt of the aforesaid request for review, except that under
special circumstances, such as the necessity for holding a hearing, such 60-day
period may be extended to the extent necessary, but in no event beyond the
expiration of 120 days after receipt by the Committee of such request for
review. If such an extension of time for review is required because of special
circumstances, written notice of the extension shall be furnished to the
applicant prior to the commencement of the extension. Notice of such final
determination of the Committee shall be furnished to the applicant, in writing,
in a manner calculated to be understood by him, and shall set forth the
specific reasons for the decision and specific references to the pertinent
provisions of the Plan upon which the decision is based. If the decision on
review is not furnished within the time period set forth above, the claim shall
be deemed denied on review.
10.8 DISPUTED BENEFIT: If any dispute shall arise between a Member or other
person claiming under a Member and the Committee after the review of a claim
for benefits, or in the event any dispute shall develop as to the person to
whom the payment of any benefit under the Plan shall be made, the Trustee may
withhold the payment of all or any part of the benefits payable hereunder to
the Member or other person claiming under the Member until such dispute has
been resolved by a court of competent jurisdiction or settled by the parties
involved.
10.9 UNCLAIMED BENEFIT: If at, after, or during the time when a benefit
hereunder is payable to any Member, beneficiary or other distributee, the
Committee, upon request of the Trustee, or at its own instance, shall mail by
registered or certified mail to such Member, beneficiary or distributee, at his
last known address a written demand for his then address or for satisfactory
evidence of his continued life, or both, and if such Member, beneficiary or
distributee shall fail to furnish the same to the Committee within two years
from the mailing of such demand, then the Committee may, in
X-5
<PAGE> 49
its sole discretion, determine that such Member, beneficiary or other
distributee has forfeited his right to such benefit and may declare such
benefit, or any unpaid portion thereof, terminated as if the death of the
distributee (with no surviving beneficiary) had occurred on the date of the
last payment made thereon, or on the date such Member, beneficiary or
distributee first became entitled to receive benefit payments, whichever is
later; provided, however, that such forfeited benefit shall be reinstated if a
claim for the same is made by the Member, beneficiary or other distributee at
any time thereafter. Reinstatement shall be made by Company contributions or
forfeitures, if any.
X-6
<PAGE> 50
ARTICLE XI
TRUST
11.1 ESTABLISHMENT: A Trust Fund shall be established, operated and
maintained exclusively for the collective investment and reinvestment of moneys
received from Members and Employers, in accordance with the investment
directions of Members, and the Trust Fund shall be under the exclusive
management and control of the Trustee, except when and for the specific
purposes that an Investment Manager has been properly appointed and is acting
pursuant to direction of the Committee.
11.2 EXCLUSIVE INVESTMENTS: The Trustee shall invest moneys in the Trust
Fund exclusively in the investments funds provided for under the Plan.
11.3 BENEFICIAL INTERESTS: Each Member shall have a beneficial interest in
the Trust Fund. No Member shall have priority or preference over any other
Member as to any assets of the Plan.
11.4 SEPARATE ACCOUNTS: The Committee shall maintain separate accounts for
each Member to reflect each Member's interest in the Trust Fund. Each Member
shall have an Employer Contribution Account, a Savings Contribution Account, a
Salary Deferral Contribution Account and/or a Rollover Account.
11.5 COMPANY STOCK: Up to 100% of the Trust may be invested in Company
Stock, subject to any investment limits in Section VII.
XI-1
<PAGE> 51
ARTICLE XII
TERMINATION, AMENDMENT AND MODIFICATION OF THE PLAN
12.1 POWERS RESERVED: The Corporation, by action of its Board of Directors,
may terminate the Plan in its entirety, or as to any Employer at any time, or
may at any time, or from time to time, amend or modify it, except that no
amendment or modification shall reduce (directly or indirectly) an accrued
benefit, eliminate an optional form of benefit (except as otherwise permitted
by regulations) or adversely change the vesting schedule with respect to any
Employee who is credited with three or more years of service. In addition the
Committee may amend the Plan, subject to the foregoing limitations, provided
that any amendment by the Committee may not materially increase the
Corporation's obligations under the Plan. Any such termination, amendment or
modification shall be effective at such date as the Corporation may determine.
An amendment or modification to the Plan may be effective as to all Companies
or as to any one of them, and their respective employees. An amendment or
modification which increases the duties of the Trustee may be made only with
the consent of the Trustee. An amendment or modification may affect Members in
the Plan at the time thereof, as well as future Members, but may not diminish
the account of any Member as of the effective date of amendment or modification
unless required by the Internal Revenue Service in order for the plan to
continue to be a qualified plan under Code Section 401.
12.2 EFFECT OF TERMINATION: Upon any total or partial termination of the
Plan or upon discontinuance of contributions by any Employer, each affected
Member, as to whom the Plan is terminated, or as to whom Employer Contributions
have been discontinued, shall receive a fully vested interest in his Accounts.
Upon a termination of the Plan, distribution shall be made only in accordance
with the modes of distributions provided for under the Plan and subject to
their requirements; provided, however, written consent with respect to accounts
greater than $5,000 shall not be required if the Corporation and the Affiliated
Companies do not maintain any other defined contribution plan.
12.3 MERGER OF PLAN WITH ANOTHER PLAN: In the event of any merger or
consolidation of the Plan with, or transfer in whole or in part of the assets
and liabilities of the Trust Fund to another trust fund held under any other
plan of deferred compensation maintained or to be established for the benefit
of all or some of the Members of this Plan, the assets of the Trust Fund
attributable to such Members shall be transferred to the other trust fund only
if:
(a) Each Member would (if either this Plan or the other plan
then terminated) receive a benefit immediately after the merger,
consolidation or transfer which is equal to or greater than the benefit
he would have been entitled to receive immediately before the merger,
consolidation or transfer (if this Plan had then terminated);
(b) Resolutions of the Board of Directors of the Employer
under this Plan, or of any new or successor employer of the affected
Members, shall authorize such transfer of assets; and, in the case of
the new or successor employer of the affected Members, its
XII-1
<PAGE> 52
resolutions shall include an assumption of liabilities with respect to
such Member's inclusion in the new employer's Plan; and
(c) Such other plan and trust are qualified under Code
Sections 401(a) and 501(a).
XII-2
<PAGE> 53
ARTICLE XIII
EXPENSES
13.1 EXPENSES: Unless paid by the Plan, all costs and expenses incurred in
the administration hereof, including the expenses of the Committee, the fees
and expenses of the Trustee, the fees of counsel, and other administrative
expenses shall be paid by the Plan, unless the Employers voluntarily pay any of
such expenses, in which event they shall be ratably shared by the several
Employers.
13.2 TAXES: Taxes, if any, on any assets held hereunder by the Trustee, or
upon income therefrom, which are payable by the Trustee, shall be charged
against such assets or income and allocated as the Trustee and the Committee
shall determine.
XIII-1
<PAGE> 54
ARTICLE XIV
MISCELLANEOUS PROVISIONS
14.1 TERMS OF EMPLOYMENT: The adoption and maintenance of the provisions of
this Plan shall not be deemed to constitute a contract between any Employer and
Employee, or to be a consideration for, or an inducement or condition of, the
employment of any person. Nothing herein contained shall be deemed to give to
any Member the right to be retained in the employ of an Employer or to
interfere with the right of an Employer to discharge a Member at any time, nor
shall it be deemed to give to an Employer the right to require any Member to
remain in its employ, nor shall it interfere with any Member's right to
terminate his employment at any time.
14.2 CONTROLLING LAWS; GOVERNMENT REGULATIONS: Except to the extent
preempted by applicable federal law, this Plan shall be construed, regulated
and administered under the laws of the State of Texas. The Plan, and the
purchase and sale of securities pursuant thereto, and the obligations of the
Trustee thereunder to purchase or sell securities, shall be subject to all
applicable laws, rules and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.
14.3 INVALIDITY OF PARTICULAR PROVISIONS: In the event any provision of this
Plan shall be held illegal or invalid for any reason, said illegality or
invalidity shall not affect the remaining provisions of this Plan but shall be
fully severable, and this Plan shall be construed and enforced as if said
illegal or invalid provisions had never been inserted therein.
14.4 NON-ALIENABILITY OF RIGHTS OF MEMBERS: No interest, right or claim in
or to any part of the Trust Fund or any payment therefrom shall be assignable,
transferable or subject to sale, mortgage, pledge, hypothecation, commutation,
anticipation, garnishment, attachment, execution or levy of any kind, and the
Trustee shall not recognize any attempt to assign, transfer, sell, mortgage,
pledge, hypothecate, commute or anticipate the same. The foregoing shall also
apply to the creation, assignment, or recognition of a right to any benefit
payable with respect to a Member pursuant to a domestic relations order, unless
such order is determined to be a qualified domestic relations order ("QDRO"),
as defined in Code Section 414(p); provided, however, to the extent directed or
authorized by a QDRO, the Plan may make a distribution prior to a Member's
"earliest retirement age," as defined in Section 414(p) of the Code.
14.5 PAYMENTS IN SATISFACTION OF CLAIMS OF MEMBERS: Any payment or
distribution to any Member or his legal representative or any beneficiary in
accordance with the provisions of this Plan shall be in full satisfaction of
all claims under the Plan against the Trust Fund, the Trustee and the Employer.
The Trustee may require that any distributee execute and deliver to the Trustee
a receipt and a full and complete release as a condition precedent to any
payment or distribution under the Plan.
14.6 PAYMENTS DUE MINORS AND INCOMPETENTS: If the Committee determines that
any person to whom a payment is due hereunder is a minor or is incompetent by
reason of physical or mental
XIV-1
<PAGE> 55
disability, the Committee shall have power to cause the payment becoming due
such person to be made to another for the benefit of such minor or incompetent,
without the Committee or the Trustee being responsible to see to the
application of such payment. Payment made pursuant to such power shall operate
as a complete discharge of the Committee, the Trustee and the Employer.
14.7 ACCEPTANCE OF TERMS AND CONDITIONS OF PLAN BY MEMBERS: Each Member, by
making application to become a Member under this Plan, or by the execution of
any form authorized under the terms of this Plan for himself, his heirs,
executors, administrators, legal representatives and assigns, approves and
agrees to be bound by the provisions of this Plan and the Trust and any
subsequent amendments thereto, and all actions of the Committee and the Trustee
hereunder.
14.8 IMPOSSIBILITY OF DIVERSION OF TRUST FUND: Notwithstanding any provision
herein to the contrary, no part of the corpus or the income of the Trust Fund
shall ever be used for, or diverted to, purposes other than for the exclusive
benefit of the Members or their beneficiaries or for the payment of expenses of
the Plan. Except as otherwise provided in Section 15.9, no part of the Trust
Fund shall ever directly or indirectly revert to the Employer.
14.9 REFUNDS TO EMPLOYER: Once contributions are made to the Plan by the
Employer on behalf of the Members, they are not refundable to the Employer
unless a contribution:
(a) was made by mistake of fact; or
(b) was made conditioned upon the contribution being allowed
as a deduction and such deduction was disallowed.
Any contribution made by the Employer during any Plan Year in excess of the
amount deductible or any contribution attributable to a good faith mistake of
fact shall be refunded to the Employer. The amount which may be returned to
the Employer is the excess of the amount contributed over the amount that would
have been contributed had there not occurred a mistake of fact or the excess of
the amount contributed over the amount deductible, as applicable. A
contribution made by reason of a mistake of fact may be refunded only within
one year following the date of payment. Any contribution to be refunded
because it was not deductible under Code Section 404 may be refunded only
within one year following the date the deduction was disallowed. Earnings
attributable to any such excess contribution may not be withdrawn, but losses
attributable thereto must reduce the amount to be returned. In no event may a
refund be due which would cause the Account balance of any Member to be reduced
to less than the Member's Account balance would have been had the mistaken
amount, or the amount determined to be nondeductible, not been contributed.
XIV-2
<PAGE> 56
ARTICLE XV
AFFILIATED COMPANIES
15.1 ELIGIBILITY AND ADOPTION: Any Affiliated Company approved by the Board
of Directors may participate as an Employer in the Plan upon the following
conditions:
(a) Such Affiliated Company shall make, execute and deliver
such instruments and take such other action as the Corporation or the
Committee shall deem necessary or desirable.
(b) Such Affiliated Company shall appoint the Corporation as
its agent to act for it in all transactions in which the Corporation
believes such agency will facilitate the administration of the Plan.
XV-1
<PAGE> 57
ARTICLE XVI
TOP-HEAVY PLAN REQUIREMENTS
16.1 GENERAL RULE: For any Plan Year for which this Plan is a Top-Heavy
Plan, as defined in Section 16.6, and despite any other provisions of this Plan
to the contrary, this Plan shall be subject to the provisions of this Article
XVI.
16.2 VESTING PROVISIONS: Each Member who has completed an Hour of Service
after the Plan becomes top-heavy shall be immediately 100% vested in his
account under this Plan.
16.3 MINIMUM CONTRIBUTION PROVISIONS: Each Member who (i) is a Non-Key
Employee, and (ii) is employed on the last day of the Plan Year (regardless of
whether the Member has completed 1,000 Hours of Service during the Plan Year,
made a required contribution that year, or his level of compensation), will be
entitled to have contributions and forfeitures allocated to his account of not
less than 3% (the "Minimum Contribution Percentage") of the Member's
Compensation. This Minimum Contribution Percentage will be reduced for any
Plan Year to the percentage at which contributions (including forfeitures) are
made or are required to be made under the Plan for the Plan Year for the Key
Employee for whom such percentage is the highest for such Plan Year. If the
Member also participates in a defined benefit plan of the Employer that is top
heavy, he shall receive the minimum under such defined benefit plan rather than
this Plan.
Contributions considered under the first paragraph of this Section 16.3
will include Employer contributions under this Plan and under all other defined
contribution plans required to be included in an Aggregation Group, but will
not include Employer Contributions under any plan required to be included in
such Aggregation Group if the plan enables a defined benefit plan required to
be included in such group to meet the requirements of the Code prohibiting
discrimination as to contributions in favor of employees who are officers,
shareholders, or the highly compensated or prescribing the minimum
participation standards. If the highest rate allocated to a Key Employee for a
year in which the plan is top-heavy is less than 3%, amounts contributed as a
result of a salary reduction agreement must be included in determining
contributions made on behalf of Key Employees.
Contributions considered under this Section will not include any
contributions under the Social Security Act or any other federal or state law.
16.4 LIMITATION ON CONTRIBUTIONS: In the event that the Company, other
Employer or an Affiliated Company (hereinafter in this Article collectively
referred to as a "Considered Company") also maintains a defined benefit plan
providing benefits on behalf of Members in this Plan, one of the two following
provisions will apply:
(a) If, for the Plan Year, this would not be a Top-Heavy Plan
if "90%" were substituted for "60%", in Section 16.6, then the
percentage of 3% used in Section 16.3 is changed to 4%.
XVI-1
<PAGE> 58
(b) If, for the Plan Year, this Plan would continue to be a
Top-Heavy Plan if "90%" were substituted for "60%", in Section 16.6,
then the denominator of both the defined contribution plan fraction and
the defined benefit plan fraction will be calculated as set forth in
Section 4.11 for the limitation year ending in such Plan Year by
substituting "1.0" for "1.25" in each place such figure appears. This
subsection (b) will not apply for such Plan Year with respect to any
individual for whom there are no (i) Employer Contributions, forfeitures
or voluntary nondeductible contributions allocated to such individual,
or (ii) accruals earned under the defined benefit plan.
16.5 UNIFORM ACCRUAL: For Plan Years beginning after December 31, 1986, a
uniform benefit accrual rate must be used in determining whether a plan is top-
heavy or super top-heavy. If all of the employer's plans accrue benefits at
the same rate, that accrual rate is to be used to determine if its plans are
top-heavy or super top-heavy. If no single accrual rate is used uniformly by
all of the Employer's plans, the slowest accrual rate permitted under the
fractional method must be used to determine the accrued benefit for Non-Key
Employees.
16.6 DETERMINATION OF TOP-HEAVY STATUS: The Plan will be a Top-Heavy Plan
for any Plan Year if, as of the Determination Date, the aggregate of the
accounts under the Plan for Members (including former Members) who are Key
Employees exceeds 60% of the aggregate of the accounts of all Members,
excluding former Key Employees, or if this Plan is required to be in an
Aggregation Group in any such Plan Year in which such Group is a Top-Heavy
Group. In determining Top-Heavy status, if an individual has not performed any
services for any Affiliated Company at any time during the five-year period
ending on the Determination Date, any accrued benefit for such individual and
the aggregate accounts of such individual shall not be taken into account.
In determining whether this Plan constitutes a Top-Heavy Plan, the
Committee (or its agent) will make the following adjustments:
(a) When more than one plan is aggregated, the Committee shall
determine separately for each plan as of each plan's Determination Date
the present value of the accrued benefits (for this purpose using the
actuarial assumptions set forth in the applicable plan) or account
balance. The results shall then be aggregated by adding the results of
each plan as of the Determination Dates for such plans that fall within
the same calendar year.
(b) In determining the present value of the cumulative accrued
benefit or the amount of the account of any Employee, such present value
or account will include the amount in dollar value of the aggregate
distributions made to such employee under the applicable plan during the
five-year period ending on the Determination Date unless reflected in
the value of the accrued benefit or account balance as of the most
recent Valuation Date. The amounts will include distributions to
employees representing the entire amount credited to their accounts
under the applicable plan.
XVI-2
<PAGE> 59
(c) Further, in making such determination, such present value
or such account shall include any rollover contribution (or similar
transfer), as follows:
(1) If the rollover contribution (or similar transfer)
is initiated by the Employee and made to or from a plan
maintained by another Affiliated Company, the plan providing the
distribution shall include such distribution in the present value
or such account; the plan accepting the distribution shall not
include such distribution in the present value or such account
unless the plan accepted it before December 31, 1983.
(2) If the rollover contribution (or similar transfer)
is not initiated by the employee or made from a plan maintained
by another Affiliated Company, the plan accepting the
distribution shall include such distribution in the present value
or such account, whether the plan accepted the distribution
before or after December 31, 1983; the plan making the
distribution shall not include the distribution in the present
value or such account.
(d) In any case where an individual is a Non-Key Employee with
respect to an applicable plan, but was a Key Employee with respect to
such plan for any prior Plan Year, any accrued benefit and any account of
such Employee will be altogether disregarded. For this purpose, to the
extent that a Key Employee is deemed to be a Key Employee if he or she
met the definition of Key Employee within any of the four (4) preceding
Plan Years, this provision will apply following the end of such period of
time.
IN WITNESS WHEREOF, the Corporation has caused these presents to be
executed by its authorized individual, in a number of copies, all of which
shall constitute but one and the same instrument, which may be evidenced by any
such executed copy hereof, this June __, 1998, effective for all purposes as
provided above.
PIONEER CHLOR ALKALI COMPANY, INC.
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
XVI-3
<PAGE> 60
ATTACHMENT A
PIONEER COMPANIES SAVINGS PLAN
FOR SALARIED EMPLOYEES
The following investment funds shall be offered under the Plan:
AIM Constellation Account
Founders Balanced Account
Founders Growth Account
Fidelity Advisor Growth Opportunities Account
Invesco Dynamics Account
Janus Worldwide Account
PBGH Growth Account
American Century - Twentieth Century Ultra Account
Templeton Foreign Account
Templeton Growth Account
Warburg Pincus Advisor Growth & Income Account
Warburg Pincus Advisor International Equity Account
Neuberger & Berman Guardian Account
Large Company Stock Index Fund (Cigna Charter Fund)
Cigna Lifetime Funds
Invesco Total Return Account
Guaranteed Income Fund
Company Stock Fund
<PAGE> 1
EXHIBIT 4.6
PIONEER COMPANIES
SAVINGS PLAN FOR
HENDERSON BARGAINING UNIT EMPLOYEES
<PAGE> 2
INDEX
<TABLE>
<S> <C>
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
1.1 Account or Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
1.2 Actual Deferral Percentage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
1.3 Affiliated Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
1.4 Aggregation Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
1.5 Annual Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-2
1.6 Annual Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-2
1.7 Applicable Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-2
1.8 Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3
1.9 Break in Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3
1.10 Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3
1.11 Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3
1.12 Company Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3
1.13 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4
1.14 Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4
1.15 Determination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4
1.16 Effective Date of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4
1.17 Eligible Class . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4
1.18 Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4
1.19 Employer or Employers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4
1.20 Employer Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4
1.21 Employer Contribution Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4
1.22 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4
1.23 Excess Annual Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4
1.24 Excess Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-5
1.25 Highly Compensated Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-5
1.26 Hour of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-5
1.27 Investment Manager . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6
1.28 Key Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6
1.29 Leased Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6
1.30 Maximum Permissible Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6
1.31 Member . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
1.32 Non-Highly Compensated Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
1.33 Non-Key Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
1.34 Participating Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
1.35 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
1.36 Plan Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
1.37 Retirement Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
1.38 Rollover Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C>
1.39 Salary Deferral Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
1.40 Salary Deferral Contribution Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
1.41 Savings Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
1.42 Savings Contribution Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
1.43 Spouse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
1.44 Top-Heavy Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
1.45 Total Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
1.46 Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
1.47 Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
1.48 Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
1.49 Valuation Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
1.50 Year of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
ARTICLE II
PROFIT SHARING PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1
2.1 Profits: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1
ARTICLE III
ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-1
3.1 Employees Eligible . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-1
3.2 Savings Contribution or Salary Deferral Contribution Authorization Required . . . . . . . . . III-1
3.3 Contributions Voluntary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-1
3.4 Transfers of Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-1
ARTICLE IV
CONTRIBUTIONS AND VESTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1
4.1 Savings Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1
4.2 Salary Deferral Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1
4.3 Matching Employer Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-2
4.4 Change in Contribution Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-2
4.5 Voluntary Suspension of Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-3
4.6 Actual Deferral Percentage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-3
4.7 Actual Deferral Percentage Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-3
4.8 Adjustments as a Result of Actual Deferral Percentage Test . . . . . . . . . . . . . . . . . . IV-4
4.9 Maximum Contribution Percentage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-5
4.10 Adjustments For Excessive Contribution Percentage . . . . . . . . . . . . . . . . . . . . . . IV-6
4.11 Maximum Annual Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-6
4.12 Rollover Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-9
4.13 Vesting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-9
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE V
INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1
5.1 Direction of Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1
5.2 Company Stock Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1
ARTICLE VI
PAYMENT OF CONTRIBUTIONS AND ALLOCATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1
6.1 Payment Of Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1
6.2 Valuation Of Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1
6.3 Funding Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1
ARTICLE VII
DISTRIBUTION OF ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-1
7.1 Time of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-1
7.2 Distributions From Accounts Following Separation From Service . . . . . . . . . . . . . . . . VII-2
7.3 Partial Withdrawals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-2
7.4 Total Withdrawal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-2
7.5 Special Withdrawal After Attainment of Age 59-1/2 . . . . . . . . . . . . . . . . . . . . . . VII-3
7.6 Hardship Withdrawals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-3
7.7 Loans to Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-4
7.8 Methods of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-6
7.9 Election to Receive an Annuity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-7
7.10 Pre-retirement Survivor Annuity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-7
7.11 Election Not to Receive the Pre-retirement Survivor Annuity . . . . . . . . . . . . . . . . . VII-8
7.12 Direct Rollover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-8
7.13 30-Day Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-9
7.14 Forfeitures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-9
ARTICLE VIII
AUTHORIZED ABSENCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-1
8.1 Authorized Absences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-1
8.2 Effect of Authorized Absences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-1
ARTICLE IX
BENEFICIARIES IN THE EVENT OF DEATH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IX-1
9.1 Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IX-1
ARTICLE X
ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . X-1
10.1 Administrative Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . X-1
10.2 Power of the Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . X-1
10.3 Duties of the Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . X-2
10.4 Accounts Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . X-3
</TABLE>
-iii-
<PAGE> 5
<TABLE>
<S> <C>
10.5 Allocation of Responsibility Among Fiduciaries for Plan and Trust Fund Administration . . . . . X-3
10.6 Presenting Claims for Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . X-4
10.7 Claim Review Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . X-5
10.8 Disputed Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . X-5
10.9 Unclaimed Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . X-5
ARTICLE XI
TRUST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-1
11.1 Establishment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-1
11.2 Exclusive Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-1
11.3 Beneficial Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-1
11.4 Separate Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-1
11.5 Company Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-1
ARTICLE XII
TERMINATION, AMENDMENT AND MODIFICATION OF THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . XII-1
12.1 Powers Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XII-1
12.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XII-1
12.3 Merger of Plan with Another Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XII-1
ARTICLE XIII
EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XIII-1
13.1 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XIII-1
13.2 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XIII-1
ARTICLE XIV
MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XIV-1
14.1 Terms of Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XIV-1
14.2 Controlling Laws; Government Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . XIV-1
14.3 Invalidity of Particular Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XIV-1
14.4 Non-Alienability of Rights of Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . XIV-1
14.5 Payments in Satisfaction of Claims of Members . . . . . . . . . . . . . . . . . . . . . . . . XIV-1
14.6 Payments Due Minors and Incompetents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XIV-1
14.7 Acceptance of Terms and Conditions of Plan by Members . . . . . . . . . . . . . . . . . . . . XIV-2
14.8 Impossibility of Diversion of Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . XIV-2
14.9 Refunds to Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XIV-2
ARTICLE XV
AFFILIATED COMPANIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XV-1
15.1 Eligibility and Adoption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XV-1
</TABLE>
-iv-
<PAGE> 6
<TABLE>
<S> <C>
ARTICLE XVI
TOP-HEAVY PLAN REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XVI-1
16.1 General Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XVI-1
16.2 Vesting Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XVI-1
16.3 Minimum Contribution Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XVI-1
16.4 Limitation on Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XVI-1
16.5 Uniform Accrual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XVI-2
16.6 Determination of Top-Heavy Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XVI-2
</TABLE>
-v-
<PAGE> 7
PIONEER COMPANIES
SAVINGS PLAN FOR
HENDERSON BARGAINING UNIT EMPLOYEES
Pioneer Chlor Alkali Company, Inc. hereby amends, renames, and restates
the Pioneer Chlor Alkali Company, Inc. Bargaining Unit Savings Investment Plan
effective as of July 1, 1998, unless provided otherwise herein. The terms and
provisions of the Plan as so amended are as follows:
INTRODUCTION
The purposes of this Plan are to provide benefits for eligible
Employees through an Employer profit sharing contribution and to promote and
encourage Employees to provide additional security and income for their
retirement through a systematic matching savings program. However, the
establishment of this Plan shall not be considered as giving any Employee or
any other person any legal or equitable right as against any Employer, the
Committee or the Trustee, or in the assets of the Plan, except and to the
extent that such right is specifically provided for in this Plan.
This Plan has been adopted for the exclusive benefit of the Members and
their beneficiaries. So far as possible, this Plan shall be interpreted in a
manner consistent with this intent and with the intention of the Corporation
that this Plan shall satisfy those provisions of ERISA and the Code relating to
qualified employee profit sharing plans with a Code Section 401(k) feature.
The Plan is hereby amended and completely restated as set forth herein
and all rights and benefits under the Plan shall hereafter be determined under
the terms and provisions hereof. However, the amendment and restatement of the
Plan hereby shall not operate or be construed to deprive any Member of any
protected benefit, within the meaning of Code Section 411(d)(6) and the
regulations thereunder, he may have had under the Plan as in effect immediately
prior to this amendment.
CHANGE IN INVESTMENT FUNDS -- RECORDKEEPING TRANSITION PERIOD
Notwithstanding anything in the Plan to the contrary, in order to
transfer the recordkeeping of the Plan's "old" investment funds to the "new"
investment funds, an Implementation Period (beginning July 1, 1998 and
estimated to last approximately three months) will apply to all Members, other
than employees who join the Plan after July 1, 1998. During the Implementation
Period, affected Members will not be able to change the investment of their
current contributions or account balances. Investment elections as in effect
on June 30, 1998 will be temporarily "frozen" and "mapped" into new investment
funds as described in the Company's memorandum to all participants dated May
28, 1998. In addition, withdrawals or loans may not be made during the
Implementation Period.
<PAGE> 8
ARTICLE I
DEFINITIONS
The following words and phrases as used herein shall have the following
meanings unless a different meaning is plainly required by the context:
1.1 ACCOUNT OR ACCOUNTS: The Employer Contribution Account, the Savings
Contribution Account, the Salary Deferral Contribution Account and/or the
Rollover Account of a Member.
1.2 ACTUAL DEFERRAL PERCENTAGE: The Actual Deferral Percentage, as defined
in Section 4.6.
1.3 AFFILIATED COMPANY: Any corporation which is a member of a controlled
group of corporations (within the meaning of the Code Section 414(b)) with the
Corporation; any trade or business (whether or not incorporated) which is under
common control (as defined in Code Section 414(c)) with the Corporation; any
organization (whether or not incorporated) which is a member of an affiliated
service group (as defined in Code Section 414(m)) which includes the
Corporation; and any other entity required to be aggregated with the
Corporation pursuant to Regulations under Code Section 414(o). For purposes of
applying the limitations of Code Section 415, an Affiliated Company shall be
determined in accordance with Code Section 415(h).
1.4 AGGREGATION GROUP: For purposes of Article XVI, the group of plans, if
any, that includes both the group of plans required to be aggregated and the
group of plans permitted to be aggregated. The group of plans required to be
aggregated (the "required aggregation group") includes:
(a) Each plan of an Affiliated Company in which a Key
Employee is a participant, including collectively bargained plans, and
(b) Each other plan, including collectively bargained
plans, of an Affiliated Company which enables a plan in which a Key
Employee is a participant to meet the requirements of the Code, as
amended, prohibiting discrimination as to contributions or benefits in
favor of employees who are officers, shareholders, or the highly
compensated or prescribing minimum participation standards.
The group of plans that are permitted to be aggregated (the "permissive
aggregation group") includes the required aggregation group plus one or more
plans of an Affiliated Company that is not part of the required aggregation
group, and that the Affiliated Company certifies as a plan within the
permissive aggregation group. Such plan or plans may be added to the
permissive aggregation group only if, after the addition, the aggregation group
as a whole continues not to discriminate as to contributions or benefits in
favor of officers, shareholders, or the highly compensated, and to meet the
minimum participation standards under the Code.
<PAGE> 9
1.5 ANNUAL ADDITIONS: With respect to each Plan Year, the total of
Employer contributions (including Salary Deferral Contributions), forfeitures
and Member contributions allocated to a Member's Account for such Plan Year.
Amounts allocated to an individual medical account, as defined in Code Section
415(1), which is part of a defined benefit plan maintained by the Employer, are
treated as Annual Additions. Also, amounts derived from contributions 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, are treated as Annual Additions.
1.6 ANNUAL BENEFIT: Means a benefit payable annually in the form of a
straight life annuity (with no ancillary benefits) under a plan, but excluding
benefits attributable to Employee contributions and rollover contributions.
1.7 APPLICABLE COMPENSATION: For purposes of Code Section 415, Applicable
Compensation means (i) a Member's earned income, wages, salaries, and fees for
professional services, and other amounts received (without regard to whether or
not an amount is paid in cash and also without regard to salary deferral
elections pursuant to Code Sections 125 or 401(k)) for personal services
actually rendered in the course of employment with the Employer or Affiliated
Company maintaining the Plan to the extent that the amounts are includable in
gross income (including, but not limited to, commissions paid salesmen,
compensation for services on the basis of the percentage of profits,
commissions on insurance premiums, tips, bonuses, fringe benefits,
reimbursements and expense allowances), (ii) amounts described in Code Sections
104(a)(3), 105(a) and 105(h), but only to the extent that these amounts are
includable in the gross income of the Employee, (iii) amounts paid or
reimbursed by the Employer or Affiliated Company for moving expenses incurred
by the Employee, but only to the extent that these amounts are excludable from
gross income of the Employee, (iv) the value of a nonqualified stock option
granted to an Employee, but only to the extent such value is included in the
gross income of the employee for the taxable year in which granted, and (v) the
amount included in the gross income of the Employee upon making the election
under Code Section 83(b), but excluding the following:
(a) Contributions made by the Employer or Affiliated
Company to a plan of a deferred compensation to the extent that, before
the application of the Code Section 415 limitations to that plan, the
contributions are not includable in the gross income of the Employee
for the taxable year in which contributed. In addition, Employer
contributions made on behalf of an Employee to a simplified employee
pension described in Code Section 408(k) are not considered as
compensation for the taxable year in which contributed to the extent
such contributions are deductible by the Employee under Code Section
219(b)(7). Additionally, any distributions from a plan of deferred
compensation are not considered as compensation for Code Section 415
purposes, regardless of whether such amounts are includable in the
gross income of the Employee when distributed. However, any amounts
received by an Employee pursuant to an unfunded non-qualified plan may
be considered as compensation for Code Section 415 purposes in the year
such amounts are includable in the gross income of the Employee.
I-2
<PAGE> 10
(b) Amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by an
Employee becomes freely transferable or is no longer subject to a
substantial risk of forfeiture (see Code Section 83 and the regulations
thereunder).
(c) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option.
(d) Other amounts which receive special tax benefits, such
as premiums for group term life insurance (but only to the extent that
the premiums are not includable in the gross income of the Employee),
or contributions made by an Employer or Affiliated Company (whether or
not under a salary reduction agreement) towards the purchase of an
annuity contract described in Code Section 403(b) (whether or not the
contributions are excludable from the gross income of the Employee).
Subject to the foregoing exclusions, for purposes of applying the limitations
above, amounts included as Applicable Compensation are those actually paid or
made available to a Member within the Plan Year.
1.8 BOARD OF DIRECTORS: The Board of Directors of the Corporation.
1.9 BREAK IN SERVICE: A calendar year during which the Employee is
credited with 500 or less Hours of Service. For purposes of determining a
Break in Service only, an Employee shall be deemed to have completed Hours of
Service for periods of absence from work (1) by reason of the pregnancy of the
Employee, (2) by reason of the birth of a child of the Employee, (3) by reason
of the placement of a child in connection with the adoption of the child by the
Employee, or (4) for purposes of caring for the child during the period
immediately following the birth or placement for adoption. During the period
of such absence, the Employee shall be treated as having completed (1) the
number of Hours of Service that normally would have been credited but for the
absence, or (2) if the normal Hours of Service worked are unknown, eight Hours
of Service for each normal workday during the absence. The total number of
Hours of Service required to be treated as completed for any such period of
absence shall not exceed 501 hours. Further, such Hours of Service shall be
credited only (1) in the year in which the absence begins for one of the
permitted reasons, if the crediting is necessary to prevent a Break in Service
in that year, or (2) in the following year.
1.10 CODE: The Internal Revenue Code of 1986, as amended from time to time.
1.11 COMMITTEE: The administrative committee of the Plan as provided for in
Section 10.1.
1.12 COMPANY STOCK: The Class A common stock, par value $.01, of Pioneer
Companies, Inc.
I-3
<PAGE> 11
1.13 COMPENSATION: The base salary and/or wages of an Employee in the
Eligible Class, including elective salary reduction amounts pursuant to Section
401(k) or 125 of the Code, but excluding all other items of compensation.
However, annual compensation in excess of $160,000 (as such amount shall be
adjusted as permitted under Code Section 401(a)(17)) shall be disregarded for
purposes of this Plan. For any Plan Year of less than 12 months, the applicable
dollar limit for such year shall be prorated by dividing the number of full
months in such year by 12.
1.14 CORPORATION: Pioneer Chlor Alkali Company, Inc., a Delaware
corporation.
1.15 DETERMINATION DATE: For purposes of any Plan Year, the last day of the
immediately preceding Plan Year.
1.16 EFFECTIVE DATE OF THE PLAN: October 25, 1988.
1.17 ELIGIBLE CLASS: An Employee of an Employer who is a member of, or
covered by, a collective bargaining unit which has a bargaining agreement with
the Employer that provides for the participation of such Employees in the Plan.
1.18 EMPLOYEE: Any employee of the Corporation or an Affiliated Company
and, to the extent required to be treated as an "employee" for certain Plan
purposes by Code Section 414, any Leased Employee performing services for the
Corporation or an Affiliated Company. It shall also include, with respect to
an Employer, an employee or former employee who is receiving periodic severance
(but not a lump sum) under a plan, program or agreement of the Employer, to the
extent severance is permitted by applicable regulations under Code Section
401(a)(4) to be treated as imputed service, but such imputed employment shall
not exceed two years.
1.19 EMPLOYER OR EMPLOYERS: The Corporation and any of its Affiliated
Companies as from time to time is participating in the Plan, as provided in
Article XV.
1.20 EMPLOYER CONTRIBUTION: The Employer's matching contributions to the
Plan that are made pursuant to Section 4.3.
1.21 EMPLOYER CONTRIBUTION ACCOUNT: The account maintained for a Member to
record his share of the matching contributions of the Employer, the investment
thereof and adjustments relating thereto.
1.22 ERISA: The Employee Retirement Income Security Act of 1974, as
amended, and regulations thereunder.
1.23 EXCESS ANNUAL ADDITIONS: The excess of the Member's Annual Additions
for the Plan Year over the Maximum Permissible Amount.
I-4
<PAGE> 12
1.24 EXCESS CONTRIBUTIONS: Amounts exceeding the Actual Deferral Percentage
limits for Highly Compensated Employees.
1.25 HIGHLY COMPENSATED EMPLOYEE: Any Employee or former Employee who is a
highly compensated employee as defined in Code Section 414(q). Generally, any
Employee or former Employee is considered a Highly Compensated Employee if
during the Plan Year or the preceding Plan Year such Employee or former
Employee:
(a) was at any time a "5% owner." "5% owner" means any
person who owns (or is considered as owning within the meaning of Code
Section 318) more than 5% of the outstanding stock of the Employer or
stock possessing more than 5% of the total combined voting power of all
stock of the Employer or, in the case of an unincorporated business,
any person who owns more than 5% of the capital or profits interest in
the Employer. In determining percentage ownership hereunder,
Affiliated Companies that would otherwise be aggregated under Code
Section 414(b), (c), and (m) shall be treated as separate Employers.
(b) received Total Compensation from the Employer in
excess of $80,000 (as adjusted by Code Section 415(d)), and
(c) if elected by the Corporation for such preceding year,
was in the top 20% of the Employees when ranked on the basis of
Applicable Compensation paid during the previous year.
For purposes of determining whether an Employee is a Highly Compensated
Employee for the Plan Year beginning in 1997, the above definition shall be
treated as having been in effect for the Plan Year beginning in 1996.
1.26 HOUR OF SERVICE: Each hour for which an Employee is paid, or entitled
to payment, for the performance of duties for the Employer or an Affiliated
Company during the applicable computation period. An Hour of Service is each
hour for which an Employee is paid, or entitled to payment by the Employer or
an Affiliated Company on account of a period of time during which no duties are
performed, due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of absence. No more
than 501 hours shall be credited with respect to any single continuous period
during which the Employee performs no duties (whether or not such period occurs
in a single computation period). An hour for which an Employee is directly or
indirectly paid, or entitled to payment, on account of a period during which no
duties are performed is not required to be credited to the Employee if such
payment is made or due under a plan maintained solely for the purpose of
complying with applicable workmen's compensation, or unemployment compensation
or disability insurance laws; and Hours of Service are not required to be
credited for a payment which solely reimburses an Employee for medically
related expenses incurred by the Employee. For purposes of this section, a
payment shall be deemed to be made by or due from an Employer regardless of
whether such payment is made by or due from the Employer directly or
I-5
<PAGE> 13
indirectly, through, among others, a trust fund or insurer or other entity to
which the Employer contributes or pays premiums and regardless of whether
contributions made or due to the trust fund, insurer or other entity are for
the benefit of particular employees or on behalf of a group of employees in the
aggregate. An Hour of Service is also each hour for which back pay,
irrespective of mitigation of damages, is either awarded or agreed to by the
Employer. The same Hours of Service shall not be credited in two periods.
Crediting of Hours of Service for back pay awarded or agreed to shall be with
respect to the periods within which such service was performed. Hours of
Service shall be credited to computation periods in accordance with the
provisions of Department of Labor Regulation Section 2530.200b. Instead of
counting and crediting actual hours worked, for purposes of determining the
number of Hours of Service to be credited to an Employee, an Employee may be
credited with 190 Hours of Service for each calendar month during which he has
earned one Hour of Service. For purposes of determining the number of Hours of
Service to be credited for reasons other than the performance of duties and for
purposes of determining to which computation period Hours of Service earned
under any provision of this Plan are to be credited, the provisions of
Department of Labor Regulation Section 2520.200(b)-2(b) and (c) are hereby
incorporated by reference as if fully set forth herein.
1.27 INVESTMENT MANAGER: The investment manager qualified under Section
3(38) of ERISA and appointed by the Committee.
1.28 KEY EMPLOYEE: Any Employee and former Employee (and any beneficiary of
an Employee under this Plan) who, at any time during the determination period,
was an officer of the Employer if such individual's annual compensation exceeds
50% of the dollar limitation amount in effect under Section 415(b)(1)(A) of the
Code as applicable to any Plan Year during the determination period, an owner
(or any Employee considered an owner under Code Section 318) of one of the ten
largest interests in an Affiliated Company (provided such interest is greater
than .5%) if such individual's compensation exceeds 100% of such dollar
limitation amount, a 5% owner of an Affiliated Company, or a 1% owner of an
Affiliated Company who has an annual compensation of more than $160,000 (as
adjusted). The determination period is the Plan Year containing the
Determination Date and the four preceding Plan Years. The determination of who
is a Key Employee will be made in accordance with Section 416(i)(1) of the Code
and the regulations thereunder.
1.29 LEASED EMPLOYEE: Any person who (1) is not a common-law employee of
the Employer and (2) pursuant to an agreement between an Employer and any other
person, has performed services for the Employer (or for the Employer and
related persons determined in accordance with Section 414(n)(6) of the Code) on
a substantially full time basis for a period of at least one year, and such
services are performed under the primary direction or control of the Employer.
1.30 MAXIMUM PERMISSIBLE AMOUNT: For a Plan Year, the Maximum Permissible
Amount with respect to any Employee shall be the lesser of:
(a) $30,000 (as increased in accordance with Code Section
415(d) to reflect cost-of-living adjustments). No adjustment will be
made until the $30,000 limit is 25% of the
I-6
<PAGE> 14
defined benefit limit. The two limits will then rise in tandem, with
the defined contribution limit set at 1/4 of the defined benefit limit.
Such adjustments to the limits will be based on cost-of-living
adjustments in the CPI, or
(b) 25% of the Employee's Applicable Compensation for the
Plan Year.
1.31 MEMBER: An Employee who has, or a former Employee who continues to
have, an Account under the Plan.
1.32 NON-HIGHLY COMPENSATED EMPLOYEE: Any Employee or former Employee who
is not a Highly Compensated Employee.
1.33 NON-KEY EMPLOYEE: Any Employee or former Employee (and his
beneficiaries) who is not a Key Employee.
1.34 PARTICIPATING COMPANY: One of the Employers.
1.35 PLAN: The Pioneer Companies Savings Plan For Henderson Bargaining Unit
Employees as set forth herein and as from time to time hereafter amended.
1.36 PLAN YEAR: The calendar year, which shall also be the limitation year
for purposes of Code Section 415.
1.37 RETIREMENT DATE: The Member's 65th birthday.
1.38 ROLLOVER ACCOUNT: The account maintained for a Member to record the
rollover contribution made by the Member in accordance with Section 4.12, the
investment thereof and adjustments relating thereto.
1.39 SALARY DEFERRAL CONTRIBUTION: The pre-tax amount contributed by the
Employer at a Member's direction as a Salary Deferral Contribution in
accordance with Section 4.2.
1.40 SALARY DEFERRAL CONTRIBUTION ACCOUNT: The account maintained for a
Member to record the Salary Deferral Contributions made by the Employer on
behalf of the Member, the investment thereof and adjustments relating thereto.
1.41 SAVINGS CONTRIBUTIONS: The after-tax amount contributed by the Member
as Savings Contributions in accordance with Section 4.1.
1.42 SAVINGS CONTRIBUTION ACCOUNT: The account maintained for a Member to
record his own Savings Contributions, the investment thereof and adjustments
relating thereto. Such Account shall also be divided, where applicable, into
subaccounts for those Members with Accounts spun off or
I-7
<PAGE> 15
merged from another qualified plan to reflect their pre-1987 after-tax
contributions and post-1986 after-tax contributions.
1.43 SPOUSE: A Member's husband or wife.
1.44 TOP-HEAVY GROUP: The Aggregation Group, if, as of the applicable
Determination Date, the sum of the present value of the cumulative accrued
benefits for Key Employees under all defined benefit plans included in the
Aggregation Group plus the aggregate of the accounts of Key Employees under all
defined contribution plans included in the Aggregation Group exceeds 60% of the
sum of the present value of the cumulative accrued benefits for all employees,
excluding former Key Employees as provided in Section 16.6(d), under all such
defined benefit plans, plus the aggregate accounts for all employees, excluding
former Key Employees as provided in Section 16.6(d), under all such defined
contribution plans. In determining Top-Heavy status, if an individual has not
performed any services for any Employer or Affiliated Company at any time
during the five-year period ending on the Determination Date, any accrued
benefit for such individual, and the aggregate accounts of such individual
shall not be taken into account. If the Aggregation Group that is a Top-Heavy
Group is a required aggregation group, each plan in the group will be a
Top-Heavy Plan (as defined in Section 16.6). If the Aggregation Group that is
a Top-Heavy Group is a permissive aggregation group, only those plans that are
part of the required Aggregation Group will be treated as Top-Heavy Plans. If
the Aggregation Group is not a Top-Heavy Group, no plan within such group will
be a Top-Heavy Plan.
1.45 TOTAL COMPENSATION: The Member's Applicable Compensation, but limited
to such compensation received while a Member (or eligible to participate in the
Plan) to the extent permitted by applicable regulations.
1.46 TRUST: The Trust established pursuant to the Plan.
1.47 TRUST FUND: The fund established by contributions provided for in the
Plan and held in the Trust, together with all income, profits or increments
thereon.
1.48 TRUSTEE: The Trustee under the Trust.
1.49 VALUATION DATE: Each day on which the national securities market for
the Plan's investment funds are open for trading; however, the date on which
mutual fund units or shares of Company Stock are acquired or disposed of by the
Trustee for the Participant's Account(s) to effectuate an event under the Plan,
e.g., loan, withdrawal, distribution, etc., shall be the applicable Valuation
Date.
1.50 YEAR OF SERVICE: A Year of Service is a Plan Year in which the Employee
is credited with 1,000 or more Hours of Service. An Employee shall also be
credited with Years of Service with a predecessor employer to the extent
credited under a predecessor employer plan or, to the extent provided in any
acquisition agreement or as otherwise may be provided by the Committee on a
nondiscriminatory basis. All Years of Service shall be aggregated and counted
as the appropriate
I-8
<PAGE> 16
number of whole Years of Service, except if an Employee who is not vested in
his Employer Contribution Account terminates service and incurs five
consecutive Breaks in Service, his Years of Service credited prior to such
Breaks in Service shall be forfeited.
The masculine gender, wherever used herein, shall include the feminine
gender, and the singular may include the plural, unless the context plainly
indicates to the contrary.
I-9
<PAGE> 17
ARTICLE II
PROFIT SHARING PLAN
2.1 PROFITS: This Plan is intended to be a profit sharing plan and all
Salary Deferral Contributions and Employer Contributions shall be made out of
the Employers' current or accumulated earnings and profits as computed in
accordance with generally accepted accounting principles; however, the Board of
Directors may authorize contributions in the absence of such earnings and
profits in its sole discretion as provided by Code Section 401(a)(27), provided
the Plan continues to qualify as a profit sharing plan.
II-1
<PAGE> 18
ARTICLE III
ELIGIBILITY
3.1 EMPLOYEES ELIGIBLE: Only Employees who are in the Eligible Class shall
be eligible to actively participate in the Plan, and each such Employee shall
be eligible to make Savings Contributions and/or Salary Deferral Contributions
to the Plan beginning on the first day of the month coincident with or next
following the date on which he first completes an Hour of Service; provided,
however, (1) former Employees who are in the Eligible Class upon the date of
their rehire shall be eligible to participate immediately and (2) Employees who
are in the Eligible Class shall be eligible to make qualifying rollover
contributions to the Plan at any time. The date an Employee in the Eligible
Class is first eligible to contribute to the Plan (other than a rollover
contribution) and the first day of each month thereafter that he remains
eligible to join the Plan is the "entry date."
3.2 SAVINGS CONTRIBUTION OR SALARY DEFERRAL CONTRIBUTION AUTHORIZATION
REQUIRED: An Employee in the Eligible Class may become a Member of the Plan on
any future entry date by authorizing a Savings Contribution and/or a Salary
Deferral Contribution and directing the investment thereof in the manner
hereinafter provided.
3.3 CONTRIBUTIONS VOLUNTARY: Contributions to the Plan by an Employee are
entirely voluntary.
3.4 TRANSFERS OF EMPLOYMENT: Transfers of employment between two or more
Employers shall not affect a Employee's membership in the Plan, except as
provided in this Section 3.4. Any transfer of a Member to employment with a
non-participating Affiliated Company or to an employment classification that is
not in the Eligible Class shall not constitute a termination of service. Each
such transferred Member shall remain a Member of the Plan and shall retain the
rights and benefits accrued under the Plan prior to the date of such transfer
until his subsequent retirement, termination of service or total withdrawal.
However, each such transferred Member shall not be eligible to make additional
Savings Contributions or Salary Deferral Contributions while he is employed by
a non-participating Affiliated Company or while he is not employed in the
Eligible Class.
III-1
<PAGE> 19
ARTICLE IV
CONTRIBUTIONS AND VESTING
4.1 SAVINGS CONTRIBUTIONS: An Employee in the Eligible Class may authorize
a Savings Contribution, to be effected by payroll deductions, in whole
percentages of not less than 1% and not more than 15% of his Compensation for
such payroll period, subject to Section 4.2.
4.2 SALARY DEFERRAL CONTRIBUTIONS: Subject to Section 4.8, an Employee in
the Eligible Class may elect a Salary Deferral Contribution rate (in whole
percentages) of not less than 1% and not more than 15% of his Compensation for
any payroll period, to be effected by payroll reductions. Each such election
of a Salary Deferral Contribution rate shall be made in writing on a salary
reduction election form provided by the Committee at least ten days prior to
the effective date of such election (if not made as of the date service
commences), shall be subject to reduction as provided in Section 4.8, and shall
be subject to such other terms and conditions as the Committee may determine.
The sum of an Employee's Salary Deferral Contribution rate and Savings
Contribution rate may not exceed 15% and, to the extent necessary, a Member's
Savings Contributions shall be reduced first.
(a) A Member's Salary Deferral Contribution made pursuant
to this Section shall not exceed $10,000 for the taxable year of the
Member. This dollar limitation shall be adjusted annually as provided
in Code Section 415(d) pursuant to Regulations. The adjusted
limitation shall be effective as of January 1 of each calendar year.
(b) In the event that the dollar limitation provided for
in Section 4.2(a) is exceeded, the Committee shall direct the Trustee
to either (1) distribute such excess amount, and any income (or loss)
allocable to such amount (as provided in (d) below), to the Member not
later than the first April 15 following the close of the Member's
taxable year or (2) to recharacterize such excess amount, and any
income or (loss) allocable to such amount, as a Savings Contributions
made by the Member, subject to the further provisions of the Plan
applicable to Savings Contributions.
(c) In the event that a Member is also a participant in
(1) another qualified cash or deferred arrangement (as defined in Code
Section 401(k)), (2) a simplified employee pension (as defined in Code
Section 408(k)), or (3) a salary reduction arrangement (within the
meaning of Code Section 3121(a)(5)(D)) and the elective deferrals, as
defined in Code Section 402(g)(3), made under such other arrangement(s)
and this Plan cumulatively exceed $10,000 (or such amount adjusted
annually as provided in Code Section 415(d) pursuant to Regulations)
for such Member's taxable year, the Member may, not later than March 1
following the close of his taxable year, notify the Committee in
writing of such excess and request that his Salary Deferral
Contribution under this Plan be reduced by an amount specified by the
Member. Such amount shall then be distributed in the same manner as
provided in Section 4.2(b).
IV-1
<PAGE> 20
(d) The income (or loss) allocable to returnable
contributions shall equal the sum of the allocable gain or loss for the
Plan Year and the allocable gain or loss for the period between the end
of the Plan Year and the date of distribution. Income includes all
earnings and appreciation, including such items as interest, dividends,
rent, royalties, gains from the sale of property, appreciation in the
value of stocks, bonds, annuity and life insurance contracts, and other
property, without regard to whether such appreciation has been
realized.
(1) The income (or loss) allocable to returnable
contributions for the Plan Year is determined by multiplying
the income (or loss) for the Plan Year allocable to employee
contributions, matching contributions, and amounts treated as
matching contributions (whichever is applicable) by a
fraction. The numerator of the fraction is the amount of
returnable contributions made on behalf of the employee for
the Plan Year. The denominator of the fraction is the total
account balance of the employee attributable to employee
contributions, matching contributions and amounts treated as
matching contributions as of the end of the Plan Year, reduced
by the gain allocable to such total amount for the Plan Year
and increased by the loss allocable to such total amount for
the Plan Year.
(2) The allocable income or loss for the period
between the end of the Plan Year and the distribution date is
equal to 10 percent of the income or loss allocable to
returnable contributions for the Plan Year (as calculated
under subparagraph (1) above) multiplied by the number of
calendar months that have elapsed since the end of the Plan
Year. For purposes of determining the number of calendar
months that have elapsed, a distribution occurring on or
before the fifteenth day of the month will be treated as
having been made on the last day of the preceding month, and a
distribution occurring after such fifteenth day will be
treated as having been made on the first day of the next
month.
4.3 MATCHING EMPLOYER CONTRIBUTIONS: Subject to the other provisions of
the Plan, with respect to each payroll period the Employers shall contribute,
with respect to each Member who made Savings Contributions and/or Salary
Deferral Contributions for such pay period, an amount equal to 50% of the sum
of the Member's Savings Contributions and Salary Deferral Contributions for
that payroll period, but only to the extent the sum of such contributions does
not exceed 6% of the Member's Compensation for the applicable payroll period;
provided that, if a Member has made both Savings Contributions and Salary
Deferral Contributions, the Employer Contributions shall be deemed to have been
made first with respect to the Salary Deferral Contributions.
4.4 CHANGE IN CONTRIBUTION RATE: The Savings Contribution and/or Salary
Deferral Contribution rate elected by a Member may be changed by a Member as of
the first day of any calendar quarter following proper notice in accordance
with Plan administrative procedures, but any such change shall not be
retroactive.
IV-2
<PAGE> 21
4.5 VOLUNTARY SUSPENSION OF CONTRIBUTIONS: A Member who has elected to
contribute and/or defer a portion of his Compensation as a Savings Contribution
and/or Salary Deferral Contribution under the Plan may suspend any further
contributions and/or deferrals as of the end of any payroll period if, and only
if prior to the end of such payroll period, he gives notice to his Employer, in
such form and manner as the Committee may prescribe, of his election to effect
such suspension. Such suspension shall remain in effect until the Member again
properly elects to make contributions to the Plan.
4.6 ACTUAL DEFERRAL PERCENTAGE: For the purposes of this Section, "Actual
Deferral Percentage" means, with respect to the Highly Compensated Employee
group and Non-Highly Compensated Employee group for a Plan Year, the average of
the ratios, calculated separately for each Member in such group, of the amount
of Salary Deferral Contributions allocated to each Member's Salary Deferral
Contribution Account (unreduced by distributions made pursuant to Sections
4.2(b) and 4.2(d)) for such Plan Year, to such Member's Total Compensation for
such Plan Year.
4.7 ACTUAL DEFERRAL PERCENTAGE TEST:
(a) Maximum Annual Allocation: For each Plan Year, the
annual allocation derived from Salary Deferral Contributions to a
Member's Salary Deferral Contribution Account shall satisfy one of the
following tests:
(1) The "Actual Deferral Percentage" for the
Highly Compensated Employee group shall not be more than the
"Actual Deferral Percentage" of the Non-Highly Compensated
Employee group multiplied by 1.25, or
(2) The excess of the "Actual Deferral
Percentage" for the Highly Compensated Employee group over the
"Actual Deferral Percentage" for the Non-Highly Compensated
Employee group shall not be more than two percentage points.
Additionally, the "Actual Deferral Percentage" for the Highly
Compensated Employee group shall not exceed the "Actual
Deferral Percentage" for the Non-Highly Compensated Employee
group multiplied by two. This alternative limitation test
cannot be used to satisfy the Actual Deferral Percentage test
and the Contribution Percentage Test of Section 4.9, except as
otherwise provided by applicable regulations.
(b) For the purposes of Sections 4.7(a) and 4.8, a Highly
Compensated Employee and a Non-Highly Compensated Employee shall
include any Employee eligible to make a deferral election pursuant to
Section 4.2, whether or not such deferral election was made.
(c) For the purposes of this Section, if two or more plans
which include cash or deferred arrangements are considered one plan for
the purposes of Code Section 401(a)(4) or 410(b), the cash or deferred
arrangements included in such plans shall be treated as one
arrangement.
IV-3
<PAGE> 22
(d) For the purposes of this Section, if a Highly
Compensated Employee is a Member under two or more cash or deferred
arrangements of the Employer, all such cash or deferred arrangements
shall be treated as one cash or deferred arrangement for the purpose of
determining the deferral percentage with respect to such Highly
Compensated Employee.
(e) Notwithstanding the above, the determination and
treatment of Salary Deferral Contributions and the "Actual Deferral
Percentage" of any Member shall satisfy such other requirements as may
be prescribed by the Secretary of the Treasury.
4.8 ADJUSTMENTS AS A RESULT OF ACTUAL DEFERRAL PERCENTAGE TEST: In the
event that the initial allocations of the Salary Deferral Contributions made
pursuant to the Plan do not satisfy one of the tests set forth in Section
4.7(a), either of the following actions shall be taken:
(a) On or before the 15th day of the third month following
the end of each Plan Year, but in no event later than the close of the
following Plan Year, the Committee shall direct the Trustee to
distribute to the Highly Compensated Employee group the aggregate
amount of excess Salary Deferral Contributions (and any income
allocable to such contributions as provided in (d) of Section 4.2),
beginning with the Member(s) having the highest dollar amount of Salary
Deferral Contributions, reducing such Members' contributions pro rata
to the next highest dollar amount of Salary Deferral Contributions (and
continuing with the next highest group and so on) until the aggregate
excess amount is distributed.
(b) Within 30 days after the end of the Plan Year, the
Employer shall make a contribution on behalf of Non-Highly Compensated
Employees in an amount sufficient to satisfy one of the tests set forth
in Section 4.7(a). Such contribution shall be deemed a Salary Deferral
Contribution and allocated to the Salary Deferral Contribution Account
of each Non-Highly Compensated Employee in the same proportion that
each Non-Highly Compensated Employee's Salary Deferral Contribution for
the year bears to the total Salary Deferral Contributions of all
Non-Highly Compensated Employees. However, if option (b) is elected,
then in all events such contributions shall be fully vested when made
and shall be subject to the same distribution restrictions that apply
to Salary Deferral Contributions, except that such amounts may not be
withdrawn prior to the Member's termination of employment.
(c) The amount of excess Salary Deferral Contributions to
be distributed or recharacterized shall be reduced by excess deferrals
previously distributed for the taxable year ending in the same Plan
Year and excess deferrals to be distributed for a taxable year will be
reduced by excess contributions previously distributed or
recharacterized for the Plan beginning in such taxable year.
IV-4
<PAGE> 23
4.9 MAXIMUM CONTRIBUTION PERCENTAGE.
(a) The "Contribution Percentage" for the Highly
Compensated Employee group shall not exceed the greater of:
(1) 125% of such percentage for the Non-Highly
Compensated Employee group; or
(2) the lesser of 200% of such percentage for the
Non-Highly Compensated Employee group, or such percentage for
the Non-Highly Compensated Employee group plus two percentage
points or such lesser amount determined pursuant to
Regulations to prevent the multiple use of this alternative
limitation with respect to any Highly Compensated Employee.
(b) For the purposes of this Section and Section 4.10,
"Contribution Percentage" for a Plan Year means, with respect to the
Highly Compensated Employee group and Non-Highly Compensated Employee
group, the average of the ratios (calculated separately for each Member
in each group) of:
(1) the sum of the matching contributions
pursuant to Section 4.3 and Employee Savings Contributions
pursuant to Section 4.1 contributed under the Plan on behalf
of each such Member for such Plan Year; to
(2) the Member's Total Compensation for such Plan
Year.
(c) The "Contribution Percentage" for a Highly Compensated
Employee shall be determined by aggregating the matching contributions
pursuant to Section 4.3 and Employee Savings Contributions pursuant to
Section 4.1 for such Member and dividing the same by the Member's Total
Compensation.
(d) For purposes of this Section, if two or more plans of
the Employer to which matching contributions, Employee contributions,
or elective deferrals are made are treated as one plan for purposes of
Code Section 410(b), such plans shall be treated as one plan for
purposes of this Section 4.9. In addition, if a Highly Compensated
Employee participates in two or more plans described in Code Section
401(a) or arrangements described in Code Section 401(k) which are
maintained by the Employer to which such contributions are made, all
such contributions shall be aggregated for purposes of this Section
4.9.
(e) For purposes of Section 4.9(a) and 4.10, a Highly
Compensated Employee and Non-Highly Compensated Employee shall include
any Employee eligible to have matching contributions pursuant to
Section 4.3 and Employee Savings Contributions pursuant to Section 4.1
allocated to his account for the Plan Year.
IV-5
<PAGE> 24
4.10 ADJUSTMENTS FOR EXCESSIVE CONTRIBUTION PERCENTAGE:
(a) In the event that the "Contribution Percentage" for
the Highly Compensated Employee group exceeds the "Contribution
Percentage" for the Non-Highly Compensated Employee group pursuant to
Section 4.9(a), the Committee (on or before the 15th day of the third
month following the end of the Plan Year, but in no event later than
the close of the following Plan Year) the Committee shall direct the
Trustee to distribute to the Highly Compensated Employee group the
amount of "Excess Aggregate Contributions" (and any income allocable to
such contributions as provided in (d) of Section 4.2), beginning with
the Member(s) with the highest dollar amount of such contributions,
reducing such Members' contributions pro rata to the next highest
dollar amount of contributions (and continuing with the next highest
group and so on) until the aggregate amount of such excess is
distributed. However, no forfeiture may be allocated to a Highly
Compensated Employee whose contributions are reduced pursuant to this
Section.
(b) The determination of the amount of "Excess Aggregate
Contributions" with respect to any Plan Year shall be made after:
(1) first determining the excess contributions
pursuant to Section 4.2(a), and
(2) then determining the excess annual
allocations pursuant to Section 4.7(a).
(c) To prevent the multiple use of the alternative methods
of compliance with the ADP test and the ACP test, the provision of
section 1.401(m)-2 of the regulations are hereby incorporated by
reference to determine if such multiple use exists. If, after
application of such test, multiple use exists, the actual contribution
percentage shall be reduced as provided in section 1.401(m)-2(c) of the
regulations for all Highly Compensated Employees in the Plan.
(d) Notwithstanding anything in the Plan to the contrary,
an employer matching contribution may be distributed only if such
contribution is an excess aggregate contribution. It may not be
distributed merely because it relates to an excess deferral, an excess
contribution or an excess aggregate contribution that is distributed.
In such cases, the related matching contribution shall be forfeited
notwithstanding anything in the Plan to the contrary.
4.11 MAXIMUM ANNUAL ADDITIONS: Notwithstanding anything contained herein to
the contrary, the total Annual Additions made to Accounts of a Member for any
Plan Year shall be subject to the following limitations:
IV-6
<PAGE> 25
(a) Single Defined Contribution Plan
(1) If an Employer does not maintain any
other qualified plan, the amount of Annual Additions
which may be allocated under this Plan on a Member's
behalf for a Plan Year shall not exceed the lesser of
the Maximum Permissible Amount or any other limitation
contained in this Plan.
(2) Prior to the determination of the
Member's actual Applicable Compensation for a Plan
Year, the Maximum Permissible Amount may be determined
on the basis of the Member's estimated annual
Applicable Compensation for such Plan Year. Such
estimated annual Applicable Compensation shall be
determined on a reasonable basis and shall be uniformly
determined for all Members similarly situated.
(3) As soon as is administratively
feasible after the end of the Plan Year, the Maximum
Permissible Amount for such Plan Year shall be
determined on the basis of the Member's actual
Applicable Compensation for such Plan Year.
(4) If there are Excess Annual Additions
with respect to a Member for the Limitation Year, such
Excess Annual Additions shall be disposed of as
follows:
A. There shall first be returned
to the Member his unmatched Savings
Contributions (and earnings thereon), if any,
and then a portion of his matched Savings
Contributions (and earnings thereon), to the
extent, and only to the extent, such returned
Savings Contributions would reduce the Excess
Annual Additions.
B. If any of such Excess Annual
Additions shall then remain, the Employer
Contributions, including both Salary Deferral
Contributions defined in Section 4.2 and
matching Employer Contributions defined in
Section 4.3, allocated to the Member (and
earnings thereon) shall then be reduced to the
extent necessary to eliminate such remaining
Excess Annual Additions. The amount of the
reduction of the Employer Contributions for such
Member shall be reallocated first out of such
Member's unmatched Salary Deferral
Contributions, then matching Employer
Contribution Account and then out of his Salary
Deferral Contribution Account, and shall be held
in a suspense account which shall be applied as
a part of (and to reduce to such extent what
would otherwise be) the matching Employer
Contributions for all Members required to be
made to the Plan during the next subsequent
calendar quarter or quarters. No portion of
such Excess Annual Additions may be distributed
to Members or former Members. If a suspense
account is in existence at any time during the
Plan Year pursuant to
IV-7
<PAGE> 26
this paragraph B, such suspense account shall
not participate in the allocation of investment
gains or losses of the Trust Fund.
(b) Two or More Defined Contribution Plans
(1) If, in addition to this Plan, the
Employer maintains any other qualified defined
contribution plan, the amount of Annual Additions
which may be allocated under this Plan on a Member's
behalf for a Plan Year, shall not exceed the lesser
of:
A. the Maximum Permissible Amount,
reduced by the sum of any Annual Additions
allocated to the Member's accounts for the same
Plan Year under such other defined contribution
plan or plans; or
B. any other limitation contained
in this Plan.
(2) Prior to the determination of the
Member's actual Applicable Compensation for the Plan
Year, the amount referred to in Section 4.11(b)(1),
may be determined on the basis of the Member's
estimated annual Applicable Compensation for such Plan
Year. Such estimated annual Applicable Compensation
shall be determined on a reasonable basis and shall be
uniformly determined for all Members similarly
situated.
(3) As soon as is administratively
feasible after the end of the Plan Year, the amounts
referred to in Section 4.11(b)(1) shall be determined
on the basis of the Member's actual Applicable
Compensation for such Plan Year.
(4) If a Member's Annual Additions under
this Plan and all such other defined contribution
plans result in Excess Annual Additions, such Excess
Annual Additions shall be deemed to consist of the
amounts last allocated.
(5) If Excess Annual Additions were
allocated to a Member on an allocation date of another
plan, the Excess Annual Additions attributed to this
Plan will be the product of:
A. the total Excess Annual
Additions allocated as of such date (including
any amount which would have been allocated but
for the limitations of Code Section 415); times
B. the ratio of (A) the amount
allocated to the Member as of such date under
this Plan, divided by (B) the total amount
allocated as of such date under all qualified
defined contribution plans (determined without
regard to the limitations of Code Section 415).
IV-8
<PAGE> 27
(6) Any Excess Annual Additions attributed to
this Plan shall be disposed of as provided in Section 4.11(a).
(c) Defined Contribution Plan and Defined Benefit Plan
(1) General Rule - If the Employer maintains one
or more defined contribution plans and one or more defined
benefit plans, the sum of the "defined contribution plan
fraction" and the "defined benefit plan fraction," as defined
in Code Section 415, cannot exceed 1.0 for any Plan Year. For
purposes of this paragraph (c) of Section 4.11, Employee
contributions to a qualified defined benefit plan are treated
as a separate defined contribution plan, and all defined
contribution plans of an Employer are to be treated as one
defined contribution plan and all defined benefit plans of an
Employer are to be treated as one defined benefit plan whether
or not such plans have been terminated.
(2) If the sum of the defined contribution plan
fraction and defined benefit plan fraction exceeds 1.0, the
annual benefit of the defined benefit plan or plans (starting
with this Plan first) will be reduced so that the sum of the
fractions will not exceed 1.0. In no event will the annual
benefit be decreased below the amount of the accrued benefit to
date. If additional reductions are required for the sum of the
fractions to equal 1.0, the reductions will then be made to the
defined contribution plan or plans (starting with this Plan
first).
(d) Incorporation by Reference
All provisions of Code Section 415 that may not be
applied in more than one manner are hereby incorporated in the
Plan by references and if any such incorporated provision
conflicts with a provision in the Plan, such incorporated
provision shall control.
4.12 ROLLOVER CONTRIBUTIONS: An Employee who is in the Eligible Class shall
be eligible to make a rollover contribution (whether a "direct" or "indirect"
rollover) to the Plan by wire transfer or by check or other property acceptable
to the Committee, provided such contribution satisfies the requirements of
Section 402(a) of the Code as being a 'qualified rollover,' and the Employee
satisfies such other administrative requirements concerning such rollover
contributions as may be required, including designating the investment fund(s)
for such contribution. Rollover contributions are not subject to an Employer
matching contribution.
4.13 VESTING: Each person who was a Member or an Employee in the Eligible
Class on June 30, 1998 shall always be 100% vested in all of his Accounts,
except that any Member in the Tacoma Plan who was not an Employee on the date
it was merged into the Plan, shall continue to be vested in his merged Accounts
only to the extent vested therein on the merger date, unless he again becomes
an Employee. Each person who becomes a Member after June 30, 1998 shall always
be
IV-9
<PAGE> 28
100% vested in his Savings Contributions, Salary Deferral and Rollover
Accounts, and shall become 100% vested in his Employer Contribution Account
based on his Years of Service in accordance with the following schedule:
<TABLE>
<CAPTION>
Years of Service Vested Percentage
---------------- -----------------
<S> <C>
less than 3 0%
3 or more 100%
</TABLE>
Regardless of his Years of Service however, a Participant who is an
Employee on or after reaching age 65 shall be 100% vested in all his Accounts.
Further, in the event a Participant's employment with the Employers and
Affiliated Companies is terminated by reason of disability (as determined for
purposes of Title II of the Federal Social Security Act) or death, he shall
also be deemed to be 100% vested in all his Accounts.
Notwithstanding the foregoing schedule, in the event the Plan is
terminated or partially terminated or the Employers' contributions under the
Plan are completely discontinued, each affected Member shall thereupon be 100%
vested in all his Accounts as of the date of such discontinuance or termination
or partial termination.
IV-10
<PAGE> 29
ARTICLE V
INVESTMENTS
5.1 DIRECTION OF INVESTMENTS:
(a) Each Member shall direct, when he authorizes Savings
Contributions, elects to have made Salary Deferral Contributions or
makes a Rollover Contribution, that such contributions be invested in
one or more of the investment funds offered under the Plan (as set
forth on Attachment A, which is made a part of the Plan for all
purposes) in increments of 1%; provided, however, a Rollover
Contribution may not be invested in the Company Stock Fund. Employer
matching contributions shall be invested in the same manner as the
Member's contributions with respect to which they are made. The
Committee may, from time to time, add additional investment funds
and/or delete existing investment funds offered under the Plan by
giving advance notice to the Members. The Committee shall have the
full power and authority to make such rules as necessary or appropriate
to add or delete a fund, including amending the Plan and Trust to
effectuate such change.
(b) Each Member may change the investment of the existing
balances in his Accounts, by authorizing a transfer from one investment
fund to one or more of the other investment funds in 1% increments, as
of any Valuation Date by giving notice to the Plan's record keeper in
accordance with the Plan's administrative procedures then in effect;
provided, however, existing Account balances may not be transferred
into the Company Stock Fund.
(c) Each Member may change the current investment
direction concerning his future Savings and Salary Deferral
Contributions as of any Valuation Date by giving notice to the Plan's
record keeper in accordance with the Plan's administrative procedures
then in effect.
5.2 COMPANY STOCK FUND: With respect to the Company Stock Fund, the
Trustee shall vote the shares of Company Stock held in the Company Stock Fund
for the respective Accounts of the Members in accordance with the directions of
such Members, provided such directions are received by the Trustee at least
five days before the date set for the meeting at which such shares are to be
voted. The Trustee shall not vote shares of Company Stock for which it has not
received timely instructions on a particular matter, unless otherwise required
by ERISA. Each Member (or, in the event of his death, his beneficiary) shall
have the right, to the extent of the number of shares of Company Stock
allocated to his Accounts in the Company Stock Fund, respectively, to instruct
the Trustee in writing as to the manner in which to respond to a tender offer
or exchange offer with respect to such shares. The Committee shall use its
best efforts timely to distribute or cause to be distributed to each Member (or
beneficiary thereof) such information as will be distributed to stockholders of
the Company in connection with any such tender offer or exchange offer. Upon
timely receipt of such instructions, the Trustee shall respond as instructed
with respect to shares of such stock. The instructions received by the Trustee
from Members shall be held by the Trustee in
V-1
<PAGE> 30
confidence and shall not be divulged or released to any person, including
officers or employees of the Corporation or any Affiliated Company. If the
Trustee shall not receive timely instructions from a Member (or beneficiary
thereof) as to the manner in which to respond to such tender offer or exchange
offer, such Member (or beneficiary) shall be deemed to have instructed the
Trustee not to tender or exchange the Company Stock.
V-2
<PAGE> 31
ARTICLE VI
PAYMENT OF CONTRIBUTIONS AND ALLOCATIONS
6.1 PAYMENT OF CONTRIBUTIONS: Each Employer shall, as soon as reasonably
practicable following each payroll period, pay to the Trustee the amounts
representing payroll deductions pursuant to Savings Contributions and the
amounts representing salary reductions pursuant to its Members Salary Deferral
Contributions. Employer Contributions shall be made to the Trustee in full
prior to the due date including extensions thereof, for filing the Employer's
federal income tax return for its taxable year which ends coincident with the
end of such Plan Year or within which such Plan Year ends, as the case may be.
The Trustee shall hold or apply the contributions so received by it in
accordance with the provisions of the Plan; and no part thereof shall be used
for any purpose other than the exclusive benefit of the Members or their
beneficiaries. Contributions shall be made in cash (by check or wire transfer)
or, with respect to Employer Contributions to be invested in the Company Stock
Fund, in the sole discretion of the Corporation, in shares of Company Stock.
6.2 VALUATION OF TRUST FUND: The Trustee shall value the assets of the
Trust Fund at fair market value as of each Valuation Date. With respect to an
Account (or the portion thereof) that is invested in a mutual fund, the fair
market value shall be determined based on the reported value of a unit in such
fund for the applicable Valuation Date. With respect to an Account (or the
portion thereof) that is invested in the Company Stock Fund, the fair market
value shall be the fair market value of the shares of Company Stock allocated
to such Account on the applicable Valuation Date. The Trustee's determination
of the value of any Account shall be final and conclusive for all purposes of
the Plan.
6.3 FUNDING POLICY: The provisions of Articles IV and VI shall be deemed
the procedure for establishing and carrying out the funding policy and method
of the Plan. Such funding policy and method shall be administered by the
Employers and other fiduciaries consistent with the objectives of the Plan and
with the requirements of Title I of ERISA.
VI-1
<PAGE> 32
ARTICLE VII
DISTRIBUTION OF ACCOUNTS
7.1 TIME OF DISTRIBUTION: For separations from service occurring after
1997, if the vested value of the Member's Accounts is less than or equal to
$5,000 (for separations from service prior to 1998, $3,500 shall be substituted
for $5,000 here and below, unless IRS rules permit the $5,000 limit to apply to
such Members), distribution of the Member's Accounts shall be made as soon as
practicable after the Member's separation from service; however, if the total
vested value of the Member's Accounts exceeds (or at the time of any prior
withdrawal or distribution, exceeded) $5,000, the Member's Accounts shall be
distributed only upon his written consent following his separation of service,
but in any event no later than 60 days after the end of the Plan Year in which
occurs the earlier of the Member's death or attainment of age 65. If a
Member's termination of service occurs after attainment of age 65, distribution
shall be made within 60 days after the end of the Plan Year in which
termination occurs; however, Effective January 1, 1997, benefit payments to any
Member who reaches age 70-1/2 prior to 1999 (excluding any 5% or more owner)
must begin by April 1 of the calendar year following the year in which the
individual attains age 70-1/2, whether or not the person has terminated
service, unless such Member (excluding any 5% or more owner) elects to defer
distribution until his termination of employment. All benefits payable because
of a Member's death shall be paid to the Member's beneficiary in a single,
lump-sum distribution as soon as practicable and in all events within five
years of the Member's date of death. If a Member dies after distributions have
begun following his termination of employment and before his entire interest
has been distributed to him, the remaining portion will be distributed to his
beneficiary at least as rapidly as the method in effect on the Member's date of
death.
Notwithstanding anything in the Plan to the contrary, amounts held in
the Member's Salary Deferral Contribution Account may not be distributable
prior to the earlier of:
(a) his separation from service (within the meaning of
Code Section 401(k)), total and permanent disability, or death;
(b) his attainment of age 59-1/2;
(c) termination of the Plan without establishment of a
successor plan by the Employer or an Affiliated Company;
(d) the date of the sale by the Employer to an entity that
is not an Affiliated Company of substantially all of the assets (within
the meaning of Code Section 409(d)(2)) with respect to a Member who
continues employment with the corporation acquiring such assets;
provided the Employer continues to maintain the Plan;
(e) the date of the sale by the Employer of its interest
in a subsidiary (within the meaning of Code Section 409(d)(3)) to an
entity which is not an Affiliated Company with
VII-1
<PAGE> 33
respect to a Member who continues employment with such subsidiary;
provided the Employer continues to maintain the Plan; or
(f) proven financial hardship, subject to the limitations
of Section 7.6, and any distribution due to items (c), (d) or (e) above
may only be made in a lump sum.
7.2 DISTRIBUTIONS FROM ACCOUNTS FOLLOWING SEPARATION FROM SERVICE:
Following a Member's separation from service, his Accounts shall be distributed
as follows: subject to Section 7.8, the Member's Accounts shall be distributed
to the Member or his beneficiary, as the case may be, in a lump sum payment in
cash or, with respect to the portion of the Account invested in the Company
Stock Fund, if any, in shares of Company Stock, if elected.
7.3 PARTIAL WITHDRAWALS:
(a) Pre-1987 Member Contribution Withdrawals. As of any
Valuation Date, a Member who is an Employee may, by giving proper
notice, elect to withdraw from such Member's Pre-1987 Savings
Contributions Subaccount under his Savings Contribution Account any
dollar amount of such contributions without investment earnings
thereon. The amount withdrawn may not exceed the amount of such
contributions made prior to 1987.
(b) Post-1986 Member Contribution Withdrawals. A Member
who is an Employee and who has withdrawn all the funds available (if
any) pursuant to (a) above may, as of any Valuation Date, by giving
proper notice, elect to withdraw from such Member's Savings
Contributions Account all or any part of such Account.
(c) Rollover Account Withdrawals. A Member who is an
Employee and has withdrawn all funds available (if any) pursuant to (a)
and (b) above may, as of any Valuation Date, by giving proper notice,
elect to withdraw all or any part of such Member's Rollover Account.
Withdrawals shall be in cash unless the Account is invested in the
Company Stock Fund and the Member elects to withdraw shares.
If the withdrawal made pursuant to this Section 7.3 is with respect to
a contribution that received a matching Employer contribution in the preceding
24 months, the Member shall not be entitled to Employer matching contributions
with respect to any Savings or Salary Deferral Contributions he may make during
the following 6-month period.
7.4 TOTAL WITHDRAWAL: A Member who is an Employee and who withdraws all
funds available pursuant to Section 7.3 may, as of any Valuation Date, by
giving proper notice, elect to withdraw from such Member's Employer
Contributions Account all or any part of the vested portion of such Member's
Employer Contributions Account; provided, however, a Member may make such a
withdrawal only if he has been a Member for at least 60 months prior to date of
such withdrawal.
VII-2
<PAGE> 34
A Member who makes a withdrawal pursuant to this Section shall not be entitled
to Employer matching contributions with respect to any Savings or Salary
Deferral Contributions he may make during the following 6-month period.
Withdrawals shall be in cash unless the Account is invested in the Company
Stock Fund and the Member elects to withdraw shares.
If the withdrawal made pursuant to this Section 7.3 is with respect to
a contribution that received a matching Employer contribution in the preceding
24 months, the Member shall not be entitled to Employer matching contributions
with respect to any Savings or Salary Deferral Contributions he may make during
the following 6-month period.
7.5 SPECIAL WITHDRAWAL AFTER ATTAINMENT OF AGE 59-1/2: Each Member who is
an Employee, is fully vested, and has attained age 59-1/2 may withdraw all or
any portion of his Employer Contribution Account, and, even if not fully
vested, his Salary Deferral Contribution Account as of any Valuation Date by
giving proper notice of such withdrawal. Withdrawals shall be in cash unless
the Account is invested in the Company Stock Fund and the Member elects to
withdraw shares.
If the withdrawal made pursuant to this Section 7.3 is with respect to
a contribution that received a matching Employer contribution in the preceding
24 months, the Member shall not be entitled to Employer matching contributions
with respect to any Savings or Salary Deferral Contributions he may make during
the following 6-month period.
7.6 HARDSHIP WITHDRAWALS: A Member who is an Employee may request for a
hardship withdrawal from his Salary Deferral Contribution Account and, if fully
vested, his Employer Contribution Account. The approval or disapproval of such
request shall be made by the Committee. The Committee shall not approve any
such request unless it finds that the Member is facing a hardship creating an
"immediate and heavy financial need" (as defined below) and the Member has
obtained all distributions, other than hardship distributions, and all
nontaxable loans currently available under the Plan and all other plans of the
Employer and its ERISA affiliates. To the extent the Member is fully vested in
his Employer Contribution Account, the withdrawal shall be taken first from
that Account. The amount of the hardship withdrawal shall be limited to an
amount that does not exceed: (1) that amount which the Committee determines to
be required to meet the immediate financial needs created by the hardship,
which may include any amounts necessary to pay any federal, state or local
income taxes or penalties reasonably anticipated to result from the
distribution, and (2) if made from the Participant's Salary Deferral
Contribution Account, the amount of the Salary Deferral Contribution Account,
but excluding all earnings credited to such Account after 1988. Further, if a
hardship distribution is made under the Plan, the restrictions set forth in
subparagraph (b) below shall apply. The hardship withdrawal shall be made in
cash as soon as practical after the date the Member submitted the hardship
request. The following standards shall be applied on a uniform and
non-discriminatory basis in determining the existence of a hardship:
(a) A financial need shall be deemed to be an "immediate
and heavy financial need" if it is on account of:
VII-3
<PAGE> 35
(1) Medical expenses described in section 213(d)
of the Code incurred by the Member, the Member's spouse, or
any dependents of the Member (as defined in section 152 of the
Code) or necessary for these persons to obtain such medical
care;
(2) Costs directly related to the purchase
(excluding mortgage payments) of a principal residence for the
Member;
(3) Payment of tuition, related educational fees,
and room and board expenses for the next 12 months of
post-secondary education for the Member, his or her spouse,
children, or dependents; or
(4) The need to prevent the eviction of the
Member from his principal residence or foreclosure on the
mortgage of the Member's principal residence; or
(5) any other "safe-harbor" event established
from time to time by the Internal Revenue Service.
(b) Upon a hardship distribution,
(1) The Member's 401(k) contributions and
after-tax contributions under the Plan, and all other plans
maintained by the Employer and its ERISA affiliates (other
than a health or welfare benefit plan or the mandatory
employee contribution portion of a defined benefit plan), will
be suspended for 12 months, and
(2) The Member may not make 401(k) contributions
under the Plan, and all other plans maintained by the Employer
and its ERISA affiliates, for the Member'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
the Member's elective contributions for the taxable year of
the hardship distribution.
Withdrawals shall be in cash unless the Account is invested in the
Company Stock Fund and the Member elects to withdraw shares.
If the withdrawal made pursuant to this Section 7.3 is with respect to
a contribution that received a matching Employer contribution in the preceding
24 months, the Member shall not be entitled to Employer matching contributions
with respect to any Savings or Salary Deferral Contributions he may make during
the following 6-month period.
7.7 LOANS TO MEMBERS: Loans shall be granted in a uniform and
non-discriminatory manner to Members (as used herein, a Member includes a
beneficiary) from their Accounts, provided the Member is a "party in interest"
under ERISA, subject to the following terms and conditions:
VII-4
<PAGE> 36
(a) Loans made pursuant to this Section (when added to the
outstanding balance of all other loans made by the Plan to the Member)
shall be limited to the lesser of:
(1) $50,000 reduced by the excess (if any) of the
highest outstanding balance of loans from the Plan to the
Member during the one-year period ending on the day before the
date on which such loan is made, over the outstanding balance
of loans from the Plan to the Member on the date on which such
loan was made, or
(2) one-half of the value of the vested portion
of the Member's Accounts.
For purposes of this limit, all plans of the Employer and Affiliated
Companies shall be considered one plan. Each loan must be for at least
$1,000.
(b) Loans shall provide for the level amortization of
principal and interest with payments to be made not less frequently
than monthly over a period not to exceed five years. However, loans
used to acquire any dwelling unit which, within a reasonable time, is
to be used (determined at the time the loan is made) as a principal
residence of the borrower shall provide for periodic repayment over a
period of time not to exceed ten years. Loans shall be evidenced by a
note signed by the Member payable in monthly installments. All loans
shall bear interest at the rate in effect in the commercial loan
division of the Trustee or an affiliated bank to the Trustee for loans
of a similar nature on the date the loan is made, and if the Trustee
does not provide such a rate of interest itself or through an
affiliated bank, then the rate at any bank handling the Company's
accounts as determined by the Committee, for loans of a similar nature
on the date the loan is made.
(c) Loans must be repaid by means of an irrevocable
payroll deduction election, unless the Member is not receiving a salary
from the Employer that is sufficient to allow deduction of the full
loan payments, in which case any excess of payments due over the amount
deductible from the Member's salary shall be paid to the Plan by the
Member in level installments each pay period, but in no event less
frequently than monthly. All loans shall become due and payable in
full upon the date a Member ceases to be a "party in interest" to the
Plan.
(d) Loans shall be made first from the Rollover Account,
then the Salary Deferral Contribution Account. If the balance in the
Salary Deferral Contribution Account is less than the amount of the
requested loan, the remainder of the loan shall be made next from the
Employer Contribution Account, and last from the Savings Contribution
Account. Any loan under the Plan shall be secured by the pledge of all
of the Member's right, title and interest in an amount of his or her
vested Accounts equal to the amount of the loan, but not exceeding 50%
of such vested Accounts as determined immediately after such loan.
Such pledge shall be executed by the Member and his Spouse, if any,
which shall provide that, in the event of any default on a loan
repayment, the Committee shall be authorized to take any and all
appropriate lawful actions necessary to enforce collection of the
unpaid loan. In
VII-5
<PAGE> 37
addition, the promissory note shall provide that, in the event of a
default on the loan repayment, both the principal and accrued, unpaid
interest shall be immediately due and payable. If the Member is
subject to the provisions of Section 401(a)(11) of the Code at the time
the vested Accounts are pledged as security for the loan, the spousal
consent must be obtained in the proper form.
(e) A request for a loan shall be made in accordance with
the Plan's administrative procedures, which may specify the order in
which the investment fund(s) within each of the Account(s) are invested
shall be redeemed to make the requested loan, and shall constitute a
written consent to a distribution or deemed distribution of the
Account(s), if necessary, in the event of a default. If a request for
a loan is approved by the Committee, the Committee shall furnish or
cause to be furnished the Trustee with instructions directing the
Trustee to make the loan in a lump-sum payment of cash to the Member.
(f) A loan shall be considered an investment of the
separate Account(s) of the Member from which the loan is made. All
loan repayments of principal and interest shall be credited to such
separate Account(s) and reinvested in the investment funds in
accordance with the Member's election in effect for his current
contributions, or, if none is in effect, his most recent such election.
(g) Only two loans may be outstanding at any time to a
Member.
(h) Loan repayments will be suspended under this Plan as
permitted under Code Section 414(u)(4).
(i) All or part of the reasonable administrative costs of
establishing and maintaining a loan may be charged to the borrowing
Member.
7.8 METHODS OF DISTRIBUTION: Distributions shall be made in a lump sum in
cash (and, with respect to Accounts invested in the Company Stock Fund, in
shares of Company Stock, if elected) unless a Member (and his Spouse, if
applicable) have made the proper election to receive one of the following
optional forms of payment.
(a) Joint and Survivor Annuity. If a Member is married on
the benefit payment date and elects not to receive a lump sum,
distribution shall be in the form of a Joint and Survivor Annuity,
which shall be an annuity for the life of the Member with a contingent
annuity for the life of the Member's Spouse, if she survives him, which
is 50% of the amount of the annuity payable to the Member had he lived.
The Joint and Survivor Annuity shall be maximum amount that may be
obtained by purchasing an annuity contract with the Member's Accounts
from an insurance company selected by the Committee. Subject to
Sections 7.9 and 9.1, a married Member may elect to receive the Single
Life Annuity or to designate someone other than his Spouse as his
contingent joint annuitant; provided it must
VII-6
<PAGE> 38
be expected that the Member will receive more than 50% of the present
value of his Accounts under such annuity.
(b) Single Life Annuity. If a Member who is not married
on the benefit payment date elects not to receive a lump sum, the
Member shall receive his distribution in the form of a Single Life
Annuity providing him with equal monthly payments for his lifetime.
The amount of such annuity shall be the maximum amount that may be
obtained by purchasing an annuity contract with the Member's Accounts
from an insurance company selected by the Committee. Subject to
Section 7.9, the Member may elect to receive the Joint and Survivor
Annuity.
(c) A Member may elect to receive his distribution in
annual, semi-annually, quarterly or monthly installments payable in
substantially equal amounts continuing over a period certain not
exceeding the Member's (or the Member's and his beneficiary's joint)
life expectancy(ies) as of the date such payments begin. At the time
of the election, the Member must specify the fixed period and the
frequency of the installments elected. The installment payments shall
be provided from an insurance company contract purchased with the
amount of the Accounts.
7.9 ELECTION TO RECEIVE AN ANNUITY: The Committee shall furnish certain
general information pertinent to the annuities to each Member at least 30 but
not more than 90 days prior to such Member's benefit payment date. The
furnished information shall be in accordance with such regulations as the
Secretary of the Treasury may prescribe and shall include a general explanation
of (i) the annuity, (ii) the Member's right to make, and the effect of an
election or revocation of an election to receive the annuity, and (iii) the
rights of the Spouse with respect to the Joint and Survivor Annuity. The
period of time during which a Member may make the election described in this
Section 7.9 shall be at any time during the 90-day period prior to the Member's
benefit payment date. Any election may be revoked and subsequent elections may
be made or revoked at any time and any number of times during such election
period.
7.10 PRE-RETIREMENT SURVIVOR ANNUITY: Except as provided below, if a
married Member who has elected the Joint and Survivor Annuity dies before his
benefit payment date, his Spouse shall receive a Pre-retirement Survivor
Annuity commencing as soon as practicable following the date of the Member's
death; however, the Spouse may direct that the annuity start on any subsequent
date specified by the Spouse which is not later than the date the Member would
have reached age 65. The amount of the annuity (equal monthly payments for the
Spouse's lifetime) shall be the maximum amount that may be obtained with the
Member's Accounts by purchasing an annuity contract from an insurance company
selected by the Committee.
A Spouse who is entitled to receive the Pre-retirement Survivor Annuity
may elect to receive a lump sum payment of the Member's Accounts in lieu of the
annuity by furnishing the Committee the proper form at any time prior to the
date such insurance contract is purchased.
VII-7
<PAGE> 39
7.11 ELECTION NOT TO RECEIVE THE PRE-RETIREMENT SURVIVOR ANNUITY: A Member
who has elected to receive the Joint and Survivor Annuity may elect, by
executing the election form prescribed by the Committee, not to be covered by
the Pre-retirement Survivor Annuity. Such election must be made during the
election period described below. Any election may be revoked and subsequent
elections may be made or revoked at any time during such election period. Any
such election and any revocation of such election must be signed by the
Member's Spouse and acknowledge the effect of such election on the Spouse's
right to benefits and further, the Spouse's signature must be notarized, and
designate a specific beneficiary and the specific form of payment that cannot
be changed without a new spousal consent.
The Committee shall furnish certain general information pertinent to
this election to each Member within the period beginning on the first day of
the Plan Year in which the Member attains age 32 and ending with the close of
the Plan Year preceding the Plan Year in which the Member attains age 35. With
respect to an Employee who becomes a Member of the Plan after the date the
general information is required to be furnished, such information shall be
furnished on or about the date that such Member begins participation in the
Plan. The furnished information shall be written in accordance with such
regulations as the Secretary of Treasury may prescribe and shall contain a
general explanation of (i) the terms and conditions of Pre-retirement Survivor
Annuity (ii) the Member's right to make and the effect of, an election or
revocation of an election to waive the Pre-retirement Survivor Annuity, and
(iii) the rights of the Member's Spouse with respect to the Pre-retirement
Survivor Annuity. The Member may make or revoke the election described in this
Section 7.11 at any time.
7.12 DIRECT ROLLOVER: 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 Committee, to have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the distributee in a
direct rollover.
Eligible rollover distribution: An eligible rollover distribution is
any distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not include:
any distribution that is one of a series of substantially equal periodic
payments (not less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint life expectancies)
of the distributee and the distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent such
distribution is required under section 401(a)(9) of the Code; and the portion
of any distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to
employer securities).
Eligible retirement plan: An eligible retirement plan is an individual
retirement account described in section 408(a) of the Code, an individual
retirement annuity described in section 408(b) of the Code, an annuity plan
described in section 403(a) of the Code, or a qualified trust described in
section 401(a) of the Code, that accepts the distributee's eligible rollover
distribution. However,
VII-8
<PAGE> 40
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.
Distributee: A distributee includes an Employee or former Employee.
In addition, the employee's or former Employee's surviving spouse and the
Employee's or former Employee's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in section 414(p)
of the Code, are distributees with regard to the interest of the spouse or
former spouse.
Direct rollover: A direct rollover is a payment by the plan to the
eligible retirement plan specified by the distributee.
7.13 30-DAY WAIVER: If a distribution is one to which sections 401(a)(11)
and 417 of the Code do not apply, such distribution may commence less than 30
days after the notice required under section 1.411(a)-11(c) of the Income Tax
Regulations is given, provided that:
(1) the Committee clearly informs the Member that the
Member has a right to a period of at least 30 days after receiving the
notice to consider the decision of whether or not to elect a
distribution (and, if applicable, a particular distribution option),
and
(2) the Member, after receiving the notice, affirmatively
elects a distribution.
7.14 FORFEITURES: Upon a Member's termination of employment with the
Employers and Affiliated Companies the nonvested portion of the Member's
Employer Contributions Account (if any) shall continue to be held in the Trust
until forfeited as of the earlier of the date the Member incurs five
consecutive Breaks in Service or receives a complete distribution of his vested
Accounts. Forfeited account balances shall be used to reduce future Employer
contributions otherwise due under the Plan. However, if a Member again becomes
an Employee in the Eligible Class prior to incurring five consecutive Breaks in
Service, his forfeited amount shall be restored, unadjusted for any interim
Trust fund gains or losses, through a special allocation of then existing
forfeitures and/or additional Employer contributions, provided the Member
repays the full amount of such prior distribution to the Plan in cash before
the fifth anniversary of his reemployment date or prior to incurring five
consecutive Breaks of Service, whichever occurs first.
VII-9
<PAGE> 41
ARTICLE VIII
AUTHORIZED ABSENCES
8.1 AUTHORIZED ABSENCES: Employee status and service shall include, and
shall not be interrupted by, the following authorized absences for which the
Employee is not directly or indirectly paid:
(a) Absence due to accident or sickness so long as the
Member is continued on the employment rolls of the Employer or
Affiliated Company and remains eligible to work upon his recovery.
(b) Absence due to an authorized absence for a period not
to exceed two years for such reasons and subject to such conditions as
may be approved by the board of directors of his Employer for general
application to all Employees similarly situated, provided that each
such Member shall immediately, upon expiration of such authorized
absence, apply for reinstatement in the employment of the employing
company.
(c) Absences in compliance with the Family Medical Leave
Act.
Notwithstanding any provision of this Plan to the contrary,
contributions, benefits and service credit with respect to qualified military
service will be provided in accordance with Code Section 414(u).
8.2 EFFECT OF AUTHORIZED ABSENCES: Members on Authorized Absence status
shall be treated as if they were employed by a non-participating Affiliated
Company.
VIII-1
<PAGE> 42
ARTICLE IX
BENEFICIARIES IN THE EVENT OF DEATH
9.1 BENEFICIARIES: Upon the death of a Member, his Vested Accounts shall
be distributed to the beneficiary or beneficiaries designated by him in a
written designation on a Plan form filed with his Employer or, if no such
designation shall have been so filed, to his Spouse or, if none, to his estate.
No such designation of beneficiary shall be effective (whether or not made
prior to marriage) if the Member has a Spouse as of his date of death, unless
such Spouse is designated as the sole beneficiary, or unless such Spouse
consents to the designation of another specified person (and form of payment)
as beneficiary. The Spouse's consent must be in writing, acknowledge the
effect of the consent on the Spouse's right to benefits under the Plan, and be
witnessed by a Plan representative or a notary public. The beneficiary
designated by the Member may not be changed without the Spouse's consent,
however, a revocation of a designation of a beneficiary other than the Spouse
may be made by a Member without the consent of the Spouse at any time before
the distribution of the benefit under the Plan. The Spouse's consent to a
beneficiary designation shall not be required if it is established to the
satisfaction of the Committee that such written consent may not be obtained
because there is no Spouse or the Spouse cannot be located. Any consent under
this Article IX will be valid only with respect to the Spouse who signs the
consent. The divorce of a Member shall automatically revoke such former spouse
as his beneficiary under the Plan, except to the extent otherwise provided in a
qualified domestic relations order.
IX-1
<PAGE> 43
ARTICLE X
ADMINISTRATION
10.1 ADMINISTRATIVE COMMITTEE: The Corporation shall act as the
administrator of the Plan and shall have all of the powers and responsibilities
conferred upon administrators under ERISA. However, an Administrative
Committee composed of such persons, as may be determined from time to time by
the Board of Directors, may be appointed by the Board to perform the duties of
the Corporation.
The Committee shall elect a Chairman from its number, and a Secretary,
and such other officers as the Committee may determine, who may, but need not,
be members of the Committee, to serve during the pleasure of the Committee.
The Secretary shall keep a record of all meetings and forward all necessary
communications to the Companies and the Trustee. The Chairman of the Committee
shall be agent of the Plan and the Committee for the service of legal process.
Any person appointed a member of the Committee shall signify his
acceptance by filing written acceptance with the Board of Directors. Any
member of the Committee may resign by delivering his written resignation to the
Board of Directors, and such resignation shall become effective at delivery or
at any later date specified therein.
No member of the Committee who is also an officer or employee of any of
the Companies receiving compensation as such shall receive any compensation for
his services as such member. No bonds or other security shall be required of
any member except as required by law.
No member of the Committee shall act or participate in any action
relating solely to his own Account or any other right or privilege under the
Plan.
10.2 POWER OF THE COMMITTEE: The Committee shall have the power:
(a) To determine the times and places for holding meetings
of the Committee and the notices to be given of such meetings, and to
establish other rules for the functioning of the Committee;
(b) To determine the number of members of the Committee at
the time in office which shall constitute a quorum for the transaction
of business, which number shall not be less than a majority of the
members then in office;
(c) To employ such agents and assistants, such counsel
(who may be of counsel to the Companies) and such clerical, medical,
accounting, investment and actuarial services as the Committee may
require in carrying out the provisions of the Plan;
(d) To authorize one or more of their number, or any
agent, to make any payment, or to execute or deliver any instrument, on
behalf of the Committee, except that all
X-1
<PAGE> 44
requisitions for funds from, and requests, directions, notifications,
certifications, and instructions to, the Trustee or to the Company or
Affiliated Companies shall be signed on behalf of the Committee by two
members of the Committee, provided that one of the members signing
shall be the Secretary or Assistant Secretary thereof;
(e) To fix and determine the proportions of costs of the
Plan from time to time to be paid by the Company or Affiliated
Companies;
(f) To determine, from the records of the Company or
Affiliated Companies, the considered Compensation, service and other
facts regarding Employees;
(g) To construe and interpret the Plan, decide all
questions of eligibility and determine the amount, manner and time of
payment of any benefits hereunder;
(h) To prescribe forms and procedures to be followed by
Employees applying for membership, Members electing or changing Savings
Contributions or Salary Deferral Contributions, Members or
beneficiaries filing applications for benefits, Members applying for
withdrawals, and other occurrences in the administration of the Plan;
(i) To prepare and distribute, in such manner as the
Committee determines to be appropriate, information explaining the
Plan;
(j) To receive from the Company, or Affiliated Companies,
and from Members, such information as shall be necessary for the proper
administration of the Plan;
(k) To furnish the Company or Affiliated Companies, upon
request, such annual reports with respect to the administration of the
Plan as are reasonable and appropriate;
(l) To receive, review and keep on file (as it deems
convenient or proper) reports of the financial condition, and of the
receipts and disbursements, of the Trust Fund from the Trustee;
(m) To set up such rules, applicable to all Employees
similarly situated, as are deemed necessary to carry out the terms of
the Plan; and
(n) To perform all other acts reasonably necessary for
administering the Plan and carrying out its Provisions and performing
the duties imposed upon the Committee.
10.3 DUTIES OF THE COMMITTEE: The Committee shall have the general
responsibility for administering the Plan and carrying out its provisions;
subject, however, to the provisions of the Plan and the Trust Agreement.
X-2
<PAGE> 45
Subject to the limitations of the Plan, the Committee, from time to
time, shall establish rules for the administration of the Plan and the
transaction of its business. As to all matters of administration not reserved
in the Plan to the Board of Directors or the Boards of Directors of the
Employers, the determination of the Committee as to any disputed question shall
be conclusive. All such rules and decisions of the Committee shall be
uniformly and consistently applied in order that all Members in similar
circumstances shall be treated alike.
It shall be the duty of the Committee to notify the Trustee in writing
of the termination of service of any Member under the Plan and of the amount of
cash which shall be payable to such Member upon termination of service, and the
date distributions are to commence. The Committee shall not requisition any
payment from the Trustee except upon certification by the Committee that such
amount is for payment of benefits under the Plan or for the payment of expenses
of administering the Plan. Any such certification by the Committee shall be
deemed conclusively true insofar as the Trustee is concerned.
All resolutions or other actions taken by the Committee at the meeting
shall be by vote of the majority of the Committee attending the meeting.
10.4 ACCOUNTS RECORDS: The Committee shall maintain accounts showing the
fiscal transactions of the Plan and shall keep, or cause the Employers to keep,
in convenient form, such data as may be necessary for valuation of the assets.
The Committee shall prepare annually a report showing in reasonable summary the
assets and liabilities of the Plan and giving a brief account of the operation
of the Plan for the past Plan Year and any further information which the Boards
of Directors of the Employers may require and as the Committee can reasonably
furnish or can obtain from the Trustee. Such report shall be submitted to the
Boards of Directors of the Employers and shall be filed in the office of the
Secretary of the Committee, where it shall be open to inspection by any Member.
The Committee shall exercise such other authority and responsibility as it
deems appropriate in order to comply with ERISA and governmental regulations
issued thereunder relating to (i) records of Members' service, Account balances
and the percentage of such Account balances which are nonforfeitable under the
Plan; (ii) notifications to Members; and (iii) annual reports to the Internal
Revenue Service. Unless otherwise required by law, the Committee may authorize
any method of accounting for, or of reporting, information with respect to Plan
assets and Account balances which fairly and accurately presents the fair
market value, determined in accordance with the Plan, of the Plan assets and
Account balances as of such date.
10.5 ALLOCATION OF RESPONSIBILITY AMONG FIDUCIARIES FOR PLAN AND TRUST FUND
ADMINISTRATION: The fiduciaries of the Plan shall have only those specific
powers, duties, responsibilities and obligations as are specifically given them
under this Plan or the Trust Agreement. In general, the Companies shall have
the sole responsibility for making the contributions provided under Article IV.
The Board of Directors shall have the sole authority to appoint and remove the
Trustee, members of the Committee and to amend or terminate, in whole or in
part, this Plan or the Trust. The Committee shall have the sole responsibility
for the administration of this Plan, which responsibility is specifically
described in this Plan and the Trust. The Committee shall have the sole
responsibility
X-3
<PAGE> 46
for selecting an entity to hold and manage the assets in the Plan and for
selecting a guaranteed investment contract(s) to be acquired by the Trustee.
The Trustee shall have the sole responsibility for the administration of the
Trust Fund and the management of the assets held under the Trust, except when
an Investment Manager has been appointed by the Committee, all as specifically
provided in the Trust. Each fiduciary shall warrant that any directions given,
information furnished, or action taken by it shall be in accordance with the
provisions of the Plan or the Trust Agreement, as the case may be, authorizing
or providing for such direction, information or action. Furthermore, each
fiduciary may rely upon any such direction, information or action of another
fiduciary as being proper under this Plan or the Trust, and is not required
under this Plan or the Trust Agreement to inquire into the propriety of any
such direction, information or action. It is intended under this Plan and the
Trust Agreement that each fiduciary shall be responsible for the proper
exercise of its own powers, duties, responsibilities and obligations under this
Plan and the Trust and shall not be responsible for any act or failure to act
of another fiduciary. No fiduciary guarantees the Trust Fund in any manner
against investment loss or depreciation in asset value.
10.6 PRESENTING CLAIMS FOR BENEFIT: Any Member or any beneficiary claiming
under a deceased Member, may submit written application to the Committee for
the payment of any benefit asserted to be due him under the Plan. Such
application shall set forth the nature of the claim and such other information
as the Committee may reasonably request. Promptly upon the receipt of any
application required by this Section 10.6, the Committee shall determine
whether or not the Member or beneficiary involved is entitled to a benefit
hereunder and, if so, the amount thereof and shall notify the claimant of its
findings.
If a claim is wholly or partially denied, the Committee shall so notify
the claimant within 90 days after receipt of the claim by the Committee, unless
special circumstances require an extension of time for processing the claim.
If such an extension of time for processing is required, written notice of the
extension shall be furnished to the claimant prior to the end of the initial
90-day period. In no event shall such extension exceed a period of 90 days
from the end of such initial period. The extension notice shall indicate the
special circumstances requiring an extension of time and the date by which the
Committee expects to render its final decision. Notice of the Committee's
decision to deny a claim in whole or in part shall be set forth in a manner
calculated to be understood by the claimant and shall contain the following:
(a) the specific reason or reasons for the denial,
(b) specific reference to the pertinent Plan provisions on
which the denial is based,
(c) a description of any additional material or
information necessary for the claimant to perfect the claim and an
explanation of why such material or information is necessary, and
(d) an explanation of the claims review procedure set
forth in Section 10.7 hereof.
X-4
<PAGE> 47
If notice of denial is not furnished, and if the claim is not granted
within the period of time set forth above, the claim shall be deemed denied for
purposes of proceeding to the review stage described in Section 10.7.
10.7 CLAIM REVIEW PROCEDURE: If an application filed by a Member or
beneficiary under Section 10.6 above shall result in a denial by the Committee
of the benefit applied for, either in whole or in part, such applicant shall
have the right, to be exercised by written application filed with the Committee
within 60 days after receipt of notice, of the denial of his application or, if
no such notice has been given, within 60 days after the application is deemed
denied under Section 10.6 to request the review of his application and of his
entitlement to the benefit applied for. Such request for review may contain
such additional information and comments as the applicant may wish to present.
Within 60 days after receipt of any such request for review, the Committee
shall reconsider the application for the benefit in light of such additional
information and comments as the applicant may have presented, and if the
applicant shall have so requested, shall afford the applicant or his designated
representative a hearing before the Committee. The Committee shall also permit
the applicant or his designated representative to review pertinent documents in
its possession, including copies of the plan document and information provided
by the Company relating to the applicant's entitlement to such benefit. The
Committee shall make a final determination with respect to the applicant's
application for review as soon as practicable, and in any event not later than
60 days after receipt of the aforesaid request for review, except that under
special circumstances, such as the necessity for holding a hearing, such 60-day
period may be extended to the extent necessary, but in no event beyond the
expiration of 120 days after receipt by the Committee of such request for
review. If such an extension of time for review is required because of special
circumstances, written notice of the extension shall be furnished to the
applicant prior to the commencement of the extension. Notice of such final
determination of the Committee shall be furnished to the applicant, in writing,
in a manner calculated to be understood by him, and shall set forth the
specific reasons for the decision and specific references to the pertinent
provisions of the Plan upon which the decision is based. If the decision on
review is not furnished within the time period set forth above, the claim shall
be deemed denied on review.
10.8 DISPUTED BENEFIT: If any dispute shall arise between a Member or other
person claiming under a Member and the Committee after the review of a claim
for benefits, or in the event any dispute shall develop as to the person to
whom the payment of any benefit under the Plan shall be made, the Trustee may
withhold the payment of all or any part of the benefits payable hereunder to
the Member or other person claiming under the Member until such dispute has
been resolved by a court of competent jurisdiction or settled by the parties
involved.
10.9 UNCLAIMED BENEFIT: If at, after, or during the time when a benefit
hereunder is payable to any Member, beneficiary or other distributee, the
Committee, upon request of the Trustee, or at its own instance, shall mail by
registered or certified mail to such Member, beneficiary or distributee, at his
last known address a written demand for his then address or for satisfactory
evidence of his continued life, or both, and if such Member, beneficiary or
distributee shall fail to furnish the same to the Committee within two years
from the mailing of such demand, then the Committee may, in
X-5
<PAGE> 48
its sole discretion, determine that such Member, beneficiary or other
distributee has forfeited his right to such benefit and may declare such
benefit, or any unpaid portion thereof, terminated as if the death of the
distributee (with no surviving beneficiary) had occurred on the date of the
last payment made thereon, or on the date such Member, beneficiary or
distributee first became entitled to receive benefit payments, whichever is
later; provided, however, that such forfeited benefit shall be reinstated if a
claim for the same is made by the Member, beneficiary or other distributee at
any time thereafter. Reinstatement shall be made by Company contributions or
forfeitures, if any.
X-6
<PAGE> 49
ARTICLE XI
TRUST
11.1 ESTABLISHMENT: A Trust Fund shall be established, operated and
maintained exclusively for the collective investment and reinvestment of moneys
received from Members and Employers, in accordance with the investment
directions of Members, and the Trust Fund shall be under the exclusive
management and control of the Trustee, except when and for the specific
purposes that an Investment Manager has been properly appointed and is acting
pursuant to direction of the Committee.
11.2 EXCLUSIVE INVESTMENTS: The Trustee shall invest moneys in the Trust
Fund exclusively in the investments funds provided for under the Plan.
11.3 BENEFICIAL INTERESTS: Each Member shall have a beneficial interest in
the Trust Fund. No Member shall have priority or preference over any other
Member as to any assets of the Plan.
11.4 SEPARATE ACCOUNTS: The Committee shall maintain separate accounts for
each Member to reflect each Member's interest in the Trust Fund. Each Member
shall have an Employer Contribution Account, a Savings Contribution Account, a
Salary Deferral Contribution Account and/or a Rollover Account.
11.5 COMPANY STOCK: Up to 100% of the Trust may be invested in Company
Stock, subject to any investment limits in Section VII.
XI-1
<PAGE> 50
ARTICLE XII
TERMINATION, AMENDMENT AND MODIFICATION OF THE PLAN
12.1 POWERS RESERVED: The Corporation, by action of its Board of Directors,
may terminate the Plan in its entirety, or as to any Employer at any time, or
may at any time, or from time to time, amend or modify it, except that no
amendment or modification shall reduce (directly or indirectly) an accrued
benefit, eliminate an optional form of benefit (except as otherwise permitted
by regulations) or adversely change the vesting schedule with respect to any
Employee who is credited with three or more years of service. In addition the
Committee may amend the Plan, subject to the foregoing limitations, provided
that any amendment by the Committee may not materially increase the
Corporation's obligations under the Plan. Any such termination, amendment or
modification shall be effective at such date as the Corporation may determine.
An amendment or modification to the Plan may be effective as to all Employers
or as to any one of them, and their respective employees. An amendment or
modification which increases the duties of the Trustee may be made only with
the consent of the Trustee. An amendment or modification may affect Members in
the Plan at the time thereof, as well as future Members, but may not diminish
the account of any Member as of the effective date of amendment or modification
unless required by the Internal Revenue Service in order for the plan to
continue to be a qualified plan under Code Section 401.
12.2 EFFECT OF TERMINATION: Upon any total or partial termination of the
Plan or upon discontinuance of contributions by any Employer, each affected
Member, as to whom the Plan is terminated, or as to whom Employer Contributions
have been discontinued, shall receive a fully vested interest in his Accounts.
Upon a termination of the Plan, distribution shall be made only in accordance
with the modes of distributions provided for under the Plan and subject to
their requirements; provided, however, written consent with respect to accounts
greater than $5,000 shall not be required if the Corporation and the Affiliated
Companies do not maintain any other defined contribution plan.
12.3 MERGER OF PLAN WITH ANOTHER PLAN: In the event of any merger or
consolidation of the Plan with, or transfer in whole or in part of the assets
and liabilities of the Trust Fund to another trust fund held under any other
plan of deferred compensation maintained or to be established for the benefit
of all or some of the Members of this Plan, the assets of the Trust Fund
attributable to such Members shall be transferred to the other trust fund only
if:
(a) Each Member would (if either this Plan or the other
plan then terminated) receive a benefit immediately after the merger,
consolidation or transfer which is equal to or greater than the benefit
he would have been entitled to receive immediately before the merger,
consolidation or transfer (if this Plan had then terminated);
(b) Resolutions of the Board of Directors of the Employer
under this Plan, or of any new or successor employer of the affected
Members, shall authorize such transfer of assets; and, in the case of
the new or successor employer of the affected Members, its
XII-1
<PAGE> 51
resolutions shall include an assumption of liabilities with respect to
such Member's inclusion in the new employer's Plan; and
(c) Such other plan and trust are qualified under Code
Sections 401(a) and 501(a).
XII-2
<PAGE> 52
ARTICLE XIII
EXPENSES
13.1 EXPENSES: Unless paid by the Plan, all costs and expenses incurred in
the administration hereof, including the expenses of the Committee, the fees
and expenses of the Trustee, the fees of counsel, and other administrative
expenses shall be paid by the Plan, unless the Employers voluntarily pay any of
such expenses, in which event they shall be ratably shared by the several
Employers.
13.2 TAXES: Taxes, if any, on any assets held hereunder by the Trustee, or
upon income therefrom, which are payable by the Trustee, shall be charged
against such assets or income and allocated as the Trustee and the Committee
shall determine.
XIII-1
<PAGE> 53
ARTICLE XIV
MISCELLANEOUS PROVISIONS
14.1 TERMS OF EMPLOYMENT: The adoption and maintenance of the provisions of
this Plan shall not be deemed to constitute a contract between any Employer and
Employee, or to be a consideration for, or an inducement or condition of, the
employment of any person. Nothing herein contained shall be deemed to give to
any Member the right to be retained in the employ of an Employer or to
interfere with the right of an Employer to discharge a Member at any time, nor
shall it be deemed to give to an Employer the right to require any Member to
remain in its employ, nor shall it interfere with any Member's right to
terminate his employment at any time.
14.2 CONTROLLING LAWS; GOVERNMENT REGULATIONS: Except to the extent
preempted by applicable federal law, this Plan shall be construed, regulated
and administered under the laws of the State of Texas. The Plan, and the
purchase and sale of securities pursuant thereto, and the obligations of the
Trustee thereunder to purchase or sell securities, shall be subject to all
applicable laws, rules and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.
14.3 INVALIDITY OF PARTICULAR PROVISIONS: In the event any provision of
this Plan shall be held illegal or invalid for any reason, said illegality or
invalidity shall not affect the remaining provisions of this Plan but shall be
fully severable, and this Plan shall be construed and enforced as if said
illegal or invalid provisions had never been inserted therein.
14.4 NON-ALIENABILITY OF RIGHTS OF MEMBERS: No interest, right or claim in
or to any part of the Trust Fund or any payment therefrom shall be assignable,
transferable or subject to sale, mortgage, pledge, hypothecation, commutation,
anticipation, garnishment, attachment, execution or levy of any kind, and the
Trustee shall not recognize any attempt to assign, transfer, sell, mortgage,
pledge, hypothecate, commute or anticipate the same. The foregoing shall also
apply to the creation, assignment, or recognition of a right to any benefit
payable with respect to a Member pursuant to a domestic relations order, unless
such order is determined to be a qualified domestic relations order ("QDRO"),
as defined in Code Section 414(p); provided, however, to the extent directed or
authorized by a QDRO, the Plan may make a distribution prior to a Member's
"earliest retirement age," as defined in Section 414(p) of the Code.
14.5 PAYMENTS IN SATISFACTION OF CLAIMS OF MEMBERS: Any payment or
distribution to any Member or his legal representative or any beneficiary in
accordance with the provisions of this Plan shall be in full satisfaction of
all claims under the Plan against the Trust Fund, the Trustee and the Employer.
The Trustee may require that any distributee execute and deliver to the Trustee
a receipt and a full and complete release as a condition precedent to any
payment or distribution under the Plan.
14.6 PAYMENTS DUE MINORS AND INCOMPETENTS: If the Committee determines that
any person to whom a payment is due hereunder is a minor or is incompetent by
reason of physical or mental
XIV-1
<PAGE> 54
disability, the Committee shall have power to cause the payment becoming due
such person to be made to another for the benefit of such minor or incompetent,
without the Committee or the Trustee being responsible to see to the
application of such payment. Payment made pursuant to such power shall operate
as a complete discharge of the Committee, the Trustee and the Employer.
14.7 ACCEPTANCE OF TERMS AND CONDITIONS OF PLAN BY MEMBERS: Each Member, by
making application to become a Member under this Plan, or by the execution of
any form authorized under the terms of this Plan for himself, his heirs,
executors, administrators, legal representatives and assigns, approves and
agrees to be bound by the provisions of this Plan and the Trust and any
subsequent amendments thereto, and all actions of the Committee and the Trustee
hereunder.
14.8 IMPOSSIBILITY OF DIVERSION OF TRUST FUND: Notwithstanding any
provision herein to the contrary, no part of the corpus or the income of the
Trust Fund shall ever be used for, or diverted to, purposes other than for the
exclusive benefit of the Members or their beneficiaries or for the payment of
expenses of the Plan. Except as otherwise provided in Section 15.9, no part of
the Trust Fund shall ever directly or indirectly revert to the Employer.
14.9 REFUNDS TO EMPLOYER: Once contributions are made to the Plan by the
Employer on behalf of the Members, they are not refundable to the Employer
unless a contribution:
(a) was made by mistake of fact; or
(b) was made conditioned upon the contribution being
allowed as a deduction and such deduction was disallowed.
Any contribution made by the Employer during any Plan Year in excess of the
amount deductible or any contribution attributable to a good faith mistake of
fact shall be refunded to the Employer. The amount which may be returned to
the Employer is the excess of the amount contributed over the amount that would
have been contributed had there not occurred a mistake of fact or the excess of
the amount contributed over the amount deductible, as applicable. A
contribution made by reason of a mistake of fact may be refunded only within
one year following the date of payment. Any contribution to be refunded
because it was not deductible under Code Section 404 may be refunded only
within one year following the date the deduction was disallowed. Earnings
attributable to any such excess contribution may not be withdrawn, but losses
attributable thereto must reduce the amount to be returned. In no event may a
refund be due which would cause the Account balance of any Member to be reduced
to less than the Member's Account balance would have been had the mistaken
amount, or the amount determined to be nondeductible, not been contributed.
XIV-2
<PAGE> 55
ARTICLE XV
AFFILIATED COMPANIES
15.1 ELIGIBILITY AND ADOPTION: Any Affiliated Company approved by the Board
of Directors may participate as an Employer in the Plan upon the following
conditions:
(a) Such Affiliated Company shall make, execute and
deliver such instruments and take such other action as the Corporation
or the Committee shall deem necessary or desirable.
(b) Such Affiliated Company shall appoint the Corporation
as its agent to act for it in all transactions in which the Corporation
believes such agency will facilitate the administration of the Plan.
XV-1
<PAGE> 56
ARTICLE XVI
TOP-HEAVY PLAN REQUIREMENTS
16.1 GENERAL RULE: For any Plan Year for which this Plan is a Top-Heavy
Plan, as defined in Section 16.6, and despite any other provisions of this Plan
to the contrary, this Plan shall be subject to the provisions of this Article
XVI.
16.2 VESTING PROVISIONS: Each Member who has completed an Hour of Service
after the Plan becomes top-heavy shall be immediately 100% vested in his
account under this Plan.
16.3 MINIMUM CONTRIBUTION PROVISIONS: Each Member who (i) is a Non-Key
Employee, and (ii) is employed on the last day of the Plan Year (regardless of
whether the Member has completed 1,000 Hours of Service during the Plan Year,
made a required contribution that year, or his level of compensation), will be
entitled to have contributions and forfeitures allocated to his account of not
less than 3% (the "Minimum Contribution Percentage") of the Member's
Compensation. This Minimum Contribution Percentage will be reduced for any
Plan Year to the percentage at which contributions (including forfeitures) are
made or are required to be made under the Plan for the Plan Year for the Key
Employee for whom such percentage is the highest for such Plan Year. If the
Member also participates in a defined benefit plan of the Employer that is top
heavy, he shall receive the minimum under such defined benefit plan rather than
this Plan.
Contributions considered under the first paragraph of this Section 16.3
will include Employer contributions under this Plan and under all other defined
contribution plans required to be included in an Aggregation Group, but will
not include Employer Contributions under any plan required to be included in
such Aggregation Group if the plan enables a defined benefit plan required to
be included in such group to meet the requirements of the Code prohibiting
discrimination as to contributions in favor of employees who are officers,
shareholders, or the highly compensated or prescribing the minimum
participation standards. If the highest rate allocated to a Key Employee for a
year in which the plan is top-heavy is less than 3%, amounts contributed as a
result of a salary reduction agreement must be included in determining
contributions made on behalf of Key Employees.
Contributions considered under this Section will not include any
contributions under the Social Security Act or any other federal or state law.
16.4 LIMITATION ON CONTRIBUTIONS: In the event that the Company, other
Employer or an Affiliated Company (hereinafter in this Article collectively
referred to as a "Considered Company") also maintains a defined benefit plan
providing benefits on behalf of Members in this Plan, one of the two following
provisions will apply:
(a) If, for the Plan Year, this would not be a Top-Heavy
Plan if "90%" were substituted for "60%", in Section 16.6, then the
percentage of 3% used in Section 16.3 is changed to 4%.
XVI-1
<PAGE> 57
(b) If, for the Plan Year, this Plan would continue to be
a Top-Heavy Plan if "90%" were substituted for "60%", in Section 16.6,
then the denominator of both the defined contribution plan fraction and
the defined benefit plan fraction will be calculated as set forth in
Section 4.11 for the limitation year ending in such Plan Year by
substituting "1.0" for "1.25" in each place such figure appears. This
subsection (b) will not apply for such Plan Year with respect to any
individual for whom there are no (i) Employer Contributions,
forfeitures or voluntary nondeductible contributions allocated to such
individual, or (ii) accruals earned under the defined benefit plan.
16.5 UNIFORM ACCRUAL: For Plan Years beginning after December 31, 1986, a
uniform benefit accrual rate must be used in determining whether a plan is
top-heavy or super top-heavy. If all of the employer's plans accrue benefits
at the same rate, that accrual rate is to be used to determine if its plans are
top-heavy or super top-heavy. If no single accrual rate is used uniformly by
all of the Employer's plans, the slowest accrual rate permitted under the
fractional method must be used to determine the accrued benefit for Non-Key
Employees.
16.6 DETERMINATION OF TOP-HEAVY STATUS: The Plan will be a Top-Heavy Plan
for any Plan Year if, as of the Determination Date, the aggregate of the
accounts under the Plan for Members (including former Members) who are Key
Employees exceeds 60% of the aggregate of the accounts of all Members,
excluding former Key Employees, or if this Plan is required to be in an
Aggregation Group in any such Plan Year in which such Group is a Top-Heavy
Group. In determining Top-Heavy status, if an individual has not performed any
services for any Affiliated Company at any time during the five-year period
ending on the Determination Date, any accrued benefit for such individual and
the aggregate accounts of such individual shall not be taken into account.
In determining whether this Plan constitutes a Top-Heavy Plan, the
Committee (or its agent) will make the following adjustments:
(a) When more than one plan is aggregated, the Committee
shall determine separately for each plan as of each plan's
Determination Date the present value of the accrued benefits (for this
purpose using the actuarial assumptions set forth in the applicable
plan) or account balance. The results shall then be aggregated by
adding the results of each plan as of the Determination Dates for such
plans that fall within the same calendar year.
(b) In determining the present value of the cumulative
accrued benefit or the amount of the account of any Employee, such
present value or account will include the amount in dollar value of the
aggregate distributions made to such employee under the applicable plan
during the five-year period ending on the Determination Date unless
reflected in the value of the accrued benefit or account balance as of
the most recent Valuation Date. The amounts will include distributions
to employees representing the entire amount credited to their accounts
under the applicable plan.
XVI-2
<PAGE> 58
(c) Further, in making such determination, such present
value or such account shall include any rollover contribution (or
similar transfer), as follows:
(1) If the rollover contribution (or similar
transfer) is initiated by the Employee and made to or from a
plan maintained by another Affiliated Company, the plan
providing the distribution shall include such distribution in
the present value or such account; the plan accepting the
distribution shall not include such distribution in the
present value or such account unless the plan accepted it
before December 31, 1983.
(2) If the rollover contribution (or similar
transfer) is not initiated by the employee or made from a plan
maintained by another Affiliated Company, the plan accepting
the distribution shall include such distribution in the
present value or such account, whether the plan accepted the
distribution before or after December 31, 1983; the plan
making the distribution shall not include the distribution in
the present value or such account.
(d) In any case where an individual is a Non-Key Employee
with respect to an applicable plan, but was a Key Employee with respect
to such plan for any prior Plan Year, any accrued benefit and any
account of such Employee will be altogether disregarded. For this
purpose, to the extent that a Key Employee is deemed to be a Key
Employee if he or she met the definition of Key Employee within any of
the four (4) preceding Plan Years, this provision will apply following
the end of such period of time.
IN WITNESS WHEREOF, the Corporation has caused these presents to be
executed by its authorized individual, in a number of copies, all of which
shall constitute but one and the same instrument, which may be evidenced by any
such executed copy hereof, this June __, 1998, effective for all purposes as
provided above.
PIONEER CHLOR ALKALI COMPANY, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
XVI-3
<PAGE> 59
ATTACHMENT A
PIONEER COMPANIES SAVINGS PLAN
FOR HENDERSON BARGAINING UNIT EMPLOYEES
The following investment funds shall be offered under the Plan:
AIM Constellation Account
Founders Balanced Account
Founders Growth Account
Fidelity Advisor Growth Opportunities Account
Invesco Dynamics Account
Janus Worldwide Account
PBGH Growth Account
American Century - Twentieth Century Ultra Account
Templeton Foreign Account
Templeton Growth Account
Warburg Pincus Advisor Growth & Income Account
Warburg Pincus Advisor International Equity Account
Neuberger & Berman Guardian Account
Large Company Stock Index Fund (Cigna Charter Fund)
Cigna Lifetime Funds
Invesco Total Return Account
Guaranteed Income Fund
Company Stock Fund
<PAGE> 1
EXHIBIT 4.7
PIONEER COMPANIES
SAVINGS PLAN FOR
TACOMA BARGAINING UNIT EMPLOYEES
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
<S> <C>
ARTICLE I
DEFINITIONS............................................................................................I-1
1.1 Account or Accounts...........................................................................I-1
1.2 Actual Deferral Percentage....................................................................I-1
1.3 Affiliated Company............................................................................I-1
1.4 Aggregation Group.............................................................................I-1
1.5 Annual Additions..............................................................................I-2
1.6 Annual Benefit................................................................................I-2
1.7 Applicable Compensation.......................................................................I-2
1.8 Board of Directors............................................................................I-3
1.9 Break in Service..............................................................................I-3
1.10 Code..........................................................................................I-3
1.11 Committee.....................................................................................I-3
1.12 Company Stock.................................................................................I-3
1.13 Compensation..................................................................................I-3
1.14 Corporation...................................................................................I-4
1.15 Determination Date............................................................................I-4
1.16 Effective Date of the Plan....................................................................I-4
1.17 Eligible Class................................................................................I-4
1.18 Employee......................................................................................I-4
1.19 Employer or Employers.........................................................................I-5
1.20 Employer Contribution.........................................................................I-5
1.21 Employer Contribution Account.................................................................I-5
1.22 ERISA.........................................................................................I-5
1.23 Excess Annual Additions.......................................................................I-5
1.24 Excess Contributions..........................................................................I-5
1.25 Highly Compensated Employee...................................................................I-5
1.26 Hour of Service...............................................................................I-6
1.27 Investment Manager............................................................................I-7
1.28 Key Employee..................................................................................I-7
1.29 Leased Employee...............................................................................I-7
1.30 Maximum Permissible Amount....................................................................I-7
1.31 Member........................................................................................I-7
1.32 Non-Highly Compensated Employee...............................................................I-8
1.33 Non-Key Employee..............................................................................I-8
1.34 Participating Company.........................................................................I-8
1.35 Plan..........................................................................................I-8
1.36 Plan Year.....................................................................................I-8
1.37 Retirement Date...............................................................................I-8
1.38 Rollover Account..............................................................................I-8
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C>
1.39 Salary Deferral Contribution..................................................................I-8
1.40 Salary Deferral Contribution Account..........................................................I-8
1.41 Savings Contributions.........................................................................I-8
1.42 Savings Contribution Account..................................................................I-8
1.43 Spouse........................................................................................I-8
1.44 Top-Heavy Group...............................................................................I-8
1.45 Total Compensation............................................................................I-9
1.46 Trust.........................................................................................I-9
1.47 Trust Fund....................................................................................I-9
1.48 Trustee.......................................................................................I-9
1.49 Valuation Date................................................................................I-9
1.50 Year of Service...............................................................................I-9
ARTICLE II
PROFIT SHARING PLAN...................................................................................II-1
2.1 Profits:.....................................................................................II-1
ARTICLE III
ELIGIBILITY..........................................................................................III-1
3.1 Employees Eligible..........................................................................III-1
3.2 Savings Contribution or Salary Deferral Contribution Authorization Required
...........................................................................................III-1
3.3 Contributions Voluntary.....................................................................III-1
3.4 Transfers of Employment.....................................................................III-1
ARTICLE IV
CONTRIBUTIONS AND VESTING.............................................................................IV-1
4.1 Savings Contributions........................................................................IV-1
4.2 Salary Deferral Contributions................................................................IV-1
4.3 Matching Employer Contributions..............................................................IV-2
4.4 Change in Contribution Rate..................................................................IV-2
4.5 Voluntary Suspension of Contributions........................................................IV-3
4.6 Actual Deferral Percentage...................................................................IV-3
4.7 Actual Deferral Percentage Test..............................................................IV-3
4.8 Adjustments as a Result of Actual Deferral Percentage Test...................................IV-4
4.9 Maximum Contribution Percentage..............................................................IV-5
4.10 Adjustments For Excessive Contribution Percentage............................................IV-6
4.11 Maximum Annual Additions.....................................................................IV-6
4.12 Rollover Contributions.......................................................................IV-9
4.13 Vesting......................................................................................IV-9
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE V
INVESTMENTS............................................................................................V-1
5.1 Direction of Investments......................................................................V-1
5.2 Company Stock Fund............................................................................V-1
ARTICLE VI
PAYMENT OF CONTRIBUTIONS AND ALLOCATIONS............................................................VI-1
6.1 Payment Of Contributions.....................................................................VI-1
6.2 Valuation Of Trust Fund......................................................................VI-1
6.3 Funding Policy...............................................................................VI-1
ARTICLE VII
DISTRIBUTION OF ACCOUNTS...........................................................................VII-1
7.1 Time of Distribution........................................................................VII-1
7.2 Distributions From Accounts Following Separation From Service...............................VII-2
7.3 Partial Withdrawals.........................................................................VII-2
7.4 Total Withdrawal............................................................................VII-2
7.5 Special Withdrawal After Attainment of Age 59-1/2...........................................VII-3
7.6 Hardship Withdrawals........................................................................VII-3
7.7 Loans to Members............................................................................VII-4
7.8 Methods of Distribution.....................................................................VII-6
7.9 Election to Receive an Annuity..............................................................VII-7
7.10 Pre-retirement Survivor Annuity.............................................................VII-7
7.11 Election Not to Receive the Pre-retirement Survivor Annuity.................................VII-8
7.12 Direct Rollover.............................................................................VII-8
7.13 30-Day Waiver...............................................................................VII-9
7.14 Forfeitures.................................................................................VII-9
ARTICLE VIII
AUTHORIZED ABSENCES.................................................................................VIII-1
8.1 Authorized Absences........................................................................VIII-1
8.2 Effect of Authorized Absences..............................................................VIII-1
ARTICLE IX
BENEFICIARIES IN THE EVENT OF DEATH...................................................................IX-1
9.1 Beneficiaries................................................................................IX-1
ARTICLE X
ADMINISTRATION.........................................................................................X-1
10.1 Administrative Committee......................................................................X-1
10.2 Power of the Committee........................................................................X-1
10.3 Duties of the Committee.......................................................................X-2
10.4 Accounts Records..............................................................................X-3
</TABLE>
-iii-
<PAGE> 5
<TABLE>
<S> <C>
10.5 Allocation of Responsibility Among Fiduciaries for Plan and Trust Fund Administration.........X-3
10.6 Presenting Claims for Benefit.................................................................X-4
10.7 Claim Review Procedure........................................................................X-5
10.8 Disputed Benefit..............................................................................X-5
10.9 Unclaimed Benefit.............................................................................X-5
ARTICLE XI
TRUST.................................................................................................XI-1
11.1 Establishment................................................................................XI-1
11.2 Exclusive Investments........................................................................XI-1
11.3 Beneficial Interests.........................................................................XI-1
11.4 Separate Accounts............................................................................XI-1
11.5 Company Stock................................................................................XI-1
ARTICLE XII
TERMINATION, AMENDMENT AND MODIFICATION OF THE PLAN..................................................XII-1
12.1 Powers Reserved.............................................................................XII-1
12.2 Effect of Termination.......................................................................XII-1
12.3 Merger of Plan with Another Plan............................................................XII-1
ARTICLE XIII
EXPENSES............................................................................................XIII-1
13.1 Expenses...................................................................................XIII-1
13.2 Taxes......................................................................................XIII-1
ARTICLE XIV
MISCELLANEOUS PROVISIONS............................................................................XIV-1
14.1 Terms of Employment.........................................................................XIV-1
14.2 Controlling Laws; Government Regulations....................................................XIV-1
14.3 Invalidity of Particular Provisions.........................................................XIV-1
14.4 Non-Alienability of Rights of Members.......................................................XIV-1
14.5 Payments in Satisfaction of Claims of Members...............................................XIV-1
14.6 Payments Due Minors and Incompetents........................................................XIV-1
14.7 Acceptance of Terms and Conditions of Plan by Members.......................................XIV-2
14.8 Impossibility of Diversion of Trust Fund....................................................XIV-2
14.9 Refunds to Employer.........................................................................XIV-2
ARTICLE XV
AFFILIATED COMPANIES..................................................................................XV-1
15.1 Eligibility and Adoption.....................................................................XV-1
</TABLE>
-iv-
<PAGE> 6
<TABLE>
<S> <C>
ARTICLE XVI
TOP-HEAVY PLAN REQUIREMENTS........................................................................XVI-1
16.1 General Rule................................................................................XVI-1
16.2 Vesting Provisions..........................................................................XVI-1
16.3 Minimum Contribution Provisions.............................................................XVI-1
16.4 Limitation on Contributions.................................................................XVI-1
16.5 Uniform Accrual.............................................................................XVI-2
16.6 Determination of Top-Heavy Status...........................................................XVI-2
</TABLE>
-v-
<PAGE> 7
PIONEER COMPANIES
SAVINGS PLAN FOR
TACOMA BARGAINING UNIT EMPLOYEES
Pioneer Chlor Alkali Company, Inc. hereby amends, renames, and restates
the Pioneer Tacoma Bargaining Unit 401(k) Plan effective as of July 1, 1998,
unless provided otherwise herein. The terms and provisions of the Plan as so
amended are as follows:
INTRODUCTION
The purposes of this Plan are to provide benefits for eligible
Employees through an Employer profit sharing contribution and to promote and
encourage Employees to provide additional security and income for their
retirement through a systematic matching savings program. However, the
establishment of this Plan shall not be considered as giving any Employee or any
other person any legal or equitable right as against any Employer, the Committee
or the Trustee, or in the assets of the Plan, except and to the extent that such
right is specifically provided for in this Plan.
This Plan has been adopted for the exclusive benefit of the Members and
their beneficiaries. So far as possible, this Plan shall be interpreted in a
manner consistent with this intent and with the intention of the Corporation
that this Plan shall satisfy those provisions of ERISA and the Code relating to
qualified employee profit sharing plans with a Code Section 401(k) feature.
The Plan is hereby amended and completely restated as set forth herein
and all rights and benefits under the Plan shall hereafter be determined under
the terms and provisions hereof. However, the amendment and restatement of the
Plan hereby shall not operate or be construed to deprive any Member of any
protected benefit, within the meaning of Code Section 411(d)(6) and the
regulations thereunder, he may have had under the Plan as in effect immediately
prior to this amendment.
<PAGE> 8
ARTICLE I
DEFINITIONS
The following words and phrases as used herein shall have the following
meanings unless a different meaning is plainly required by the context:
1.1 ACCOUNT OR ACCOUNTS: The Employer Contribution Account, the Savings
Contribution Account, the Salary Deferral Contribution Account and/or the
Rollover Account of a Member.
1.2 ACTUAL DEFERRAL PERCENTAGE: The Actual Deferral Percentage, as defined
in Section 4.6.
1.3 AFFILIATED COMPANY: Any corporation which is a member of a controlled
group of corporations (within the meaning of the Code Section 414(b)) with the
Corporation; any trade or business (whether or not incorporated) which is under
common control (as defined in Code Section 414(c)) with the Corporation; any
organization (whether or not incorporated) which is a member of an affiliated
service group (as defined in Code Section 414(m)) which includes the
Corporation; and any other entity required to be aggregated with the Corporation
pursuant to Regulations under Code Section 414(o). For purposes of applying the
limitations of Code Section 415, an Affiliated Company shall be determined in
accordance with Code Section 415(h).
1.4 AGGREGATION GROUP: For purposes of Article XVI, the group of plans, if
any, that includes both the group of plans required to be aggregated and the
group of plans permitted to be aggregated. The group of plans required to be
aggregated (the "required aggregation group") includes:
(a) Each plan of an Affiliated Company in which a Key Employee
is a participant, including collectively bargained plans, and
(b) Each other plan, including collectively bargained plans,
of an Affiliated Company which enables a plan in which a Key Employee
is a participant to meet the requirements of the Code, as amended,
prohibiting discrimination as to contributions or benefits in favor of
employees who are officers, shareholders, or the highly compensated or
prescribing minimum participation standards.
The group of plans that are permitted to be aggregated (the "permissive
aggregation group") includes the required aggregation group plus one or more
plans of an Affiliated Company that is not part of the required aggregation
group, and that the Affiliated Company certifies as a plan within the permissive
aggregation group. Such plan or plans may be added to the permissive aggregation
group only if, after the addition, the aggregation group as a whole continues
not to discriminate as to contributions or benefits in favor of officers,
shareholders, or the highly compensated, and to meet the minimum participation
standards under the Code.
<PAGE> 9
1.5 ANNUAL ADDITIONS: With respect to each Plan Year, the total of
Employer contributions (including Salary Deferral Contributions), forfeitures
and Member contributions allocated to a Member's Account for such Plan Year.
Amounts allocated to an individual medical account, as defined in Code Section
415(1), which is part of a defined benefit plan maintained by the Employer, are
treated as Annual Additions. Also, amounts derived from contributions 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, are treated as Annual Additions.
1.6 ANNUAL BENEFIT: Means a benefit payable annually in the form of a
straight life annuity (with no ancillary benefits) under a plan, but excluding
benefits attributable to Employee contributions and rollover contributions.
1.7 APPLICABLE COMPENSATION: For purposes of Code Section 415, Applicable
Compensation means (i) a Member's earned income, wages, salaries, and fees for
professional services, and other amounts received (without regard to whether or
not an amount is paid in cash and also without regard to salary deferral
elections pursuant to Code Sections 125 or 401(k)) for personal services
actually rendered in the course of employment with the Employer or Affiliated
Company maintaining the Plan to the extent that the amounts are includable in
gross income (including, but not limited to, commissions paid salesmen,
compensation for services on the basis of the percentage of profits, commissions
on insurance premiums, tips, bonuses, fringe benefits, reimbursements and
expense allowances), (ii) amounts described in Code Sections 104(a)(3), 105(a)
and 105(h), but only to the extent that these amounts are includable in the
gross income of the Employee, (iii) amounts paid or reimbursed by the Employer
or Affiliated Company for moving expenses incurred by the Employee, but only to
the extent that these amounts are excludable from gross income of the Employee,
(iv) the value of a nonqualified stock option granted to an Employee, but only
to the extent such value is included in the gross income of the employee for the
taxable year in which granted, and (v) the amount included in the gross income
of the Employee upon making the election under Code Section 83(b), but excluding
the following:
(a) Contributions made by the Employer or Affiliated Company
to a plan of a deferred compensation to the extent that, before the
application of the Code Section 415 limitations to that plan, the
contributions are not includable in the gross income of the Employee
for the taxable year in which contributed. In addition, Employer
contributions made on behalf of an Employee to a simplified employee
pension described in Code Section 408(k) are not considered as
compensation for the taxable year in which contributed to the extent
such contributions are deductible by the Employee under Code Section
219(b)(7). Additionally, any distributions from a plan of deferred
compensation are not considered as compensation for Code Section 415
purposes, regardless of whether such amounts are includable in the
gross income of the Employee when distributed. However, any amounts
received by an Employee pursuant to an unfunded non-qualified plan may
be considered as compensation for Code Section 415 purposes in the year
such amounts are includable in the gross income of the Employee.
I-2
<PAGE> 10
(b) Amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by an
Employee becomes freely transferable or is no longer subject to a
substantial risk of forfeiture (see Code Section 83 and the regulations
thereunder).
(c) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option.
(d) Other amounts which receive special tax benefits, such as
premiums for group term life insurance (but only to the extent that the
premiums are not includable in the gross income of the Employee), or
contributions made by an Employer or Affiliated Company (whether or not
under a salary reduction agreement) towards the purchase of an annuity
contract described in Code Section 403(b) (whether or not the
contributions are excludable from the gross income of the Employee).
Subject to the foregoing exclusions, for purposes of applying the limitations
above, amounts included as Applicable Compensation are those actually paid or
made available to a Member within the Plan Year.
1.8 BOARD OF DIRECTORS: The Board of Directors of the Corporation.
1.9 BREAK IN SERVICE: A calendar year during which the Employee is credited
with 500 or less Hours of Service. For purposes of determining a Break in
Service only, an Employee shall be deemed to have completed Hours of Service for
periods of absence from work (1) by reason of the pregnancy of the Employee, (2)
by reason of the birth of a child of the Employee, (3) by reason of the
placement of a child in connection with the adoption of the child by the
Employee, or (4) for purposes of caring for the child during the period
immediately following the birth or placement for adoption. During the period of
such absence, the Employee shall be treated as having completed (1) the number
of Hours of Service that normally would have been credited but for the absence,
or (2) if the normal Hours of Service worked are unknown, eight Hours of Service
for each normal workday during the absence. The total number of Hours of Service
required to be treated as completed for any such period of absence shall not
exceed 501 hours for those Hours of Service shall be credited only (1) in the
year in which the absence begins for one of the permitted reasons, if the
crediting is necessary to prevent a Break in Service in that year, or (2) in the
following year.
1.10 CODE: The Internal Revenue Code of 1986, as amended from time to time.
1.11 COMMITTEE: The administrative committee of the Plan as provided for in
Section 10.1.
1.12 COMPANY STOCK: The Class A common stock, par value $.01, of Pioneer
Companies, Inc.
1.13 COMPENSATION: Compensation means:
I-3
<PAGE> 11
(a) for Members compensated for each pay period, the base
hourly rate in effect for such Member at the beginning of the Plan
Year, or as adjusted during the Plan Year as a result of a negotiated
agreement between the Member's collective bargaining unit and his
Employer (subject to the exclusions listed below), multiplied by the
number of such Member's regularly scheduled work hours in a pay period;
and
(b) for a Member compensated on a Twelve Hour Shift Basis, the
amount of Compensation for each pay period shall be the Member's annual
base salary of record (including Guaranteed Overtime) divided by the
number of pay periods applicable to the Member during the Plan Year.
For this purpose, the term "Twelve Hour Shift Basis" means any
arrangement whereby Members work twelve hour daily shifts which may
result in alternating work weeks of more and less than forty hours per
week. Additionally, the term "Guaranteed Overtime" means compensation
paid to a Member for overtime work which the Member is assigned at the
beginning of the year to perform.
Compensation shall include amounts of elective salary reductions under Code
Sections 125 and 402, i.e., Pretax Deferrals, but shall exclude (i) bonuses,
incentives, overtime (other than Guaranteed Overtime), shift differential, and
overseas differentials, (ii) reimbursement for expenses or allowances, including
automobile allowances and moving allowances, (iii) any amount contributed by the
Employer (that is in addition to Pretax Deferrals) to any plan, and (iv) any
amount paid by an Employer for other fringe benefits, such as health and
hospitalization, and group life insurance benefits, or perquisites. Earnings of
a Member in excess of $160,000, or such higher amount as shall be permitted by
the Secretary of the Treasury, in any Plan Year shall not be included in
Compensation. Compensation will be determined in accordance with the following
rules: (i) Compensation shall include vacation pay received in periodic
payments, but shall not include single sum vacation payments to active or
terminating Employees; (ii) Compensation shall include wages received during
paid leaves of absence and periodic severance pay, but will not include single
sum severance payments; and (iii) Compensation will not include long-term
disability payments and sickness and accident benefit payments.
1.14 CORPORATION: Pioneer Chlor Alkali Company, Inc., a Delaware
corporation.
1.15 DETERMINATION DATE: For purposes of any Plan Year, the last day of the
immediately preceding Plan Year.
1.16 EFFECTIVE DATE OF THE PLAN: June 16, 1997.
1.17 ELIGIBLE CLASS: An Employee of an Employer who is a member of, or
covered by, a collective bargaining unit which has a bargaining agreement with
the Employer that provides for the participation of such Employees in the Plan.
1.18 EMPLOYEE: Any employee of the Corporation or an Affiliated Company and,
to the extent required to be treated as an "employee" for certain Plan purposes
by Code Section 414, any Leased
I-4
<PAGE> 12
Employee performing services for the Corporation or an Affiliated Company. It
shall also include, with respect to an Employer, an employee or former employee
who is receiving severance under a plan, program or agreement of the Employer,
to the extent severance is permitted by applicable regulations under Code
Section 401(a)(4) to be treated as imputed service, but such imputed employment
shall not exceed two years.
1.19 EMPLOYER OR EMPLOYERS: The Corporation and any of its Affiliated
Companies as from time to time is participating in the Plan, as provided in
Article XV.
1.20 EMPLOYER CONTRIBUTION: The Employer's matching contributions to the
Plan that are made pursuant to Section 4.3.
1.21 EMPLOYER CONTRIBUTION ACCOUNT: The account maintained for a Member to
record his share of the matching contributions of the Employer, the investment
thereof and adjustments relating thereto.
1.22 ERISA: The Employee Retirement Income Security Act of 1974, as amended,
and regulations thereunder.
1.23 EXCESS ANNUAL ADDITIONS: The excess of the Member's Annual Additions
for the Plan Year over the Maximum Permissible Amount.
1.24 EXCESS CONTRIBUTIONS: Amounts exceeding the Actual Deferral Percentage
limits for Highly Compensated Employees.
1.25 HIGHLY COMPENSATED EMPLOYEE: Any Employee or former Employee who is a
highly compensated employee as defined in Code Section 414(q). Generally, any
Employee or former Employee is considered a Highly Compensated Employee if
during the Plan Year or the preceding Plan Year such Employee or former
Employee:
(a) was at any time a "5% owner." "5% owner" means any person
who owns (or is considered as owning within the meaning of Code Section
318) more than 5% of the outstanding stock of the Employer or stock
possessing more than 5% of the total combined voting power of all stock
of the Employer or, in the case of an unincorporated business, any
person who owns more than 5% of the capital or profits interest in the
Employer. In determining percentage ownership hereunder, Affiliated
Companies that would otherwise be aggregated under Code Section 414(b),
(c), and (m) shall be treated as separate Employers.
(b) received Total Compensation from the Employer in excess of
$80,000 (as adjusted by Code Section 415(d)), and
I-5
<PAGE> 13
(c) if elected by the Corporation for such preceding year, was
in the top 20% of the Employees when ranked on the basis of Applicable
Compensation paid during the previous year.
For purposes of determining whether an Employee is a Highly Compensated Employee
for the Plan Year beginning in 1997, the above definition shall be treated as
having been in effect for the Plan Year beginning in 1996.
1.26 HOUR OF SERVICE: Each hour for which an Employee is paid, or entitled
to payment, for the performance of duties for the Employer or an Affiliated
Company during the applicable computation period. An Hour of Service is each
hour for which an Employee is paid, or entitled to payment by the Employer or an
Affiliated Company on account of a period of time during which no duties are
performed, due to vacation, holiday, illness, incapacity (including disability),
layoff, jury duty, military duty or leave of absence. No more than 501 hours
shall be credited with respect to any single continuous period during which the
Employee performs no duties (whether or not such period occurs in a single
computation period). An hour for which an Employee is directly or indirectly
paid, or entitled to payment, on account of a period during which no duties are
performed is not required to be credited to the Employee if such payment is made
or due under a plan maintained solely for the purpose of complying with
applicable workmen's compensation, or unemployment compensation or disability
insurance laws; and Hours of Service are not required to be credited for a
payment which solely reimburses an Employee for medically related expenses
incurred by the Employee. For purposes of this section, a payment shall be
deemed to be made by or due from an Employer regardless of whether such payment
is made by or due from the Employer directly or indirectly, through, among
others, a trust fund or insurer or other entity to which the Employer
contributes or pays premiums and regardless of whether contributions made or due
to the trust fund, insurer or other entity are for the benefit of particular
employees or on behalf of a group of employees in the aggregate. An Hour of
Service is also each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The same Hours of
Service shall not be credited in two periods. Crediting of Hours of Service for
back pay awarded or agreed to shall be with respect to the periods within which
such service was performed. For purposes of determining whether a Break in
Service has occurred, an Employee shall be deemed to have completed Hours of
Service for periods of absence from work (1) by reason of the pregnancy of the
Employee, (2) by reason of the birth of a child of the Employee, (3) by reason
of the placement of a child in connection with the adoption of the child by the
Employee, or (4) for purposes of caring for the child during the period
immediately following the birth or placement for adoption. During the period of
such absence, the Employee shall be treated as having completed (1) the number
of Hours of Service that normally would have been credited but for the absence,
or (2) if the normal Hours of Service worked are unknown, eight Hours of Service
for each normal workday during the absence. The total number of Hours of Service
required to be treated as having been completed for any such period of absence
shall not exceed 501 hours. Further, such Hours of Service shall be credited
only (1) in the year which the absence begins for one of the permitted reasons,
if the crediting is necessary to prevent a Break in Service in that year, or (2)
in the following year. Hours of Service shall be credited to computation periods
in accordance with the provisions
I-6
<PAGE> 14
of Department of Labor Regulation Section 2530.200b. Instead of counting and
crediting actual hours worked, for purposes of determining the number of Hours
of Service to be credited to an Employee, an Employee may be credited with 190
Hours of Service for each calendar month during which he has earned one Hour of
Service. For purposes of determining the number of Hours of Service to be
credited for reasons other than the performance of duties and for purposes of
determining to which computation period Hours of Service earned under any
provision of this Plan are to be credited, the provisions of Department of Labor
Regulation Section 2520.200(b)-2(b) and (c) are hereby incorporated by reference
as if fully set forth herein.
1.27 INVESTMENT MANAGER: The investment manager qualified under Section
3(38) of ERISA and appointed by the Committee.
1.28 KEY EMPLOYEE: Any Employee and former Employee (and any beneficiary of
an Employee under this Plan) who, at any time during the determination period,
was an officer of the Employer if such individual's annual compensation exceeds
50% of the dollar limitation amount in effect under Section 415(b)(1)(A) of the
Code as applicable to any Plan Year during the determination period, an owner
(or any Employee considered an owner under Code Section 318) of one of the ten
largest interests in an Affiliated Company (provided such interest is greater
than .5%) if such individual's compensation exceeds 100% of such dollar
limitation amount, a 5% owner of an Affiliated Company, or a 1% owner of an
Affiliated Company who has an annual compensation of more than $160,000 (as
adjusted). The determination period is the Plan Year containing the
Determination Date and the four preceding Plan Years. The determination of who
is a Key Employee will be made in accordance with Section 416(i)(1) of the Code
and the regulations thereunder.
1.29 LEASED EMPLOYEE: Any person who (1) is not a common-law employee of the
Employer and (2) pursuant to an agreement between an Employer and any other
person, has performed services for the Employer (or for the Employer and related
persons determined in accordance with Section 414(n)(6) of the Code) on a
substantially full time basis for a period of at least one year, and such
services are performed under the primary direction or control of the Employer.
1.30 MAXIMUM PERMISSIBLE AMOUNT: For a Plan Year, the Maximum Permissible
Amount with respect to any Employee shall be the lesser of:
(a) $30,000 (as increased in accordance with Code Section
415(d) to reflect cost-of-living adjustments). No adjustment will be
made until the $30,000 limit is 25% of the defined benefit limit. The
two limits will then rise in tandem, with the defined contribution
limit set at 1/4 of the defined benefit limit. Such adjustments to the
limits will be based on cost-of-living adjustments in the CPI, or
(b) 25% of the Employee's Applicable Compensation for the Plan
Year.
1.31 MEMBER: An Employee who has, or a former Employee who continues to
have, an Account under the Plan.
I-7
<PAGE> 15
1.32 NON-HIGHLY COMPENSATED EMPLOYEE: Any Employee or former Employee who
is not a Highly Compensated Employee.
1.33 NON-KEY EMPLOYEE: Any Employee or former Employee (and his
beneficiaries) who is not a Key Employee.
1.34 PARTICIPATING COMPANY: One of the Employers.
1.35 PLAN: The Pioneer Companies Savings Plan For Tacoma Bargaining Unit
Employees as set forth herein and as from time to time hereafter amended.
1.36 PLAN YEAR: The calendar year, which shall also be the limitation year
for purposes of Code Section 415.
1.37 RETIREMENT DATE: The Member's 65th birthday.
1.38 ROLLOVER ACCOUNT: The account maintained for a Member to record the
rollover contribution made by the Member in accordance with Section 4.12, the
investment thereof and adjustments relating thereto.
1.39 SALARY DEFERRAL CONTRIBUTION: The pre-tax amount contributed by the
Employer at a Member's direction as a Salary Deferral Contribution in accordance
with Section 4.2.
1.40 SALARY DEFERRAL CONTRIBUTION ACCOUNT: The account maintained for a
Member to record the Salary Deferral Contributions made by the Employer on
behalf of the Member, the investment thereof and adjustments relating thereto.
1.41 SAVINGS CONTRIBUTIONS: The after-tax amount contributed by the Member
as a Savings Contributions in accordance with Section 4.1.
1.42 SAVINGS CONTRIBUTION ACCOUNT: The account maintained for a Member to
record his own Savings Contributions, the investment thereof and adjustments
relating thereto. Such Account shall also be divided, where applicable, into
subaccounts for those Members with Accounts spun off or merged from another
qualified plan to reflect their pre-1987 after-tax contributions and post-1986
after-tax contributions.
1.43 SPOUSE: A Member's husband or wife.
1.44 TOP-HEAVY GROUP: The Aggregation Group, if, as of the applicable
Determination Date, the sum of the present value of the cumulative accrued
benefits for Key Employees under all defined benefit plans included in the
Aggregation Group plus the aggregate of the accounts of Key Employees under all
defined contribution plans included in the Aggregation Group exceeds 60% of the
sum of the present value of the cumulative accrued benefits for all employees,
excluding
I-8
<PAGE> 16
former Key Employees as provided in Section 16.6(d), under all such defined
benefit plans, plus the aggregate accounts for all employees, excluding former
Key Employees as provided in Section 16.6(d), under all such defined
contribution plans. In determining Top-Heavy status, if an individual has not
performed any services for any Employer or Affiliated Company at any time during
the five-year period ending on the Determination Date, any accrued benefit for
such individual, and the aggregate accounts of such individual shall not be
taken into account. If the Aggregation Group that is a Top-Heavy Group is a
required aggregation group, each plan in the group will be a Top-Heavy Plan (as
defined in Section 16.6). If the Aggregation Group that is a Top-Heavy Group is
a permissive aggregation group, only those plans that are part of the required
Aggregation Group will be treated as Top-Heavy Plans. If the Aggregation Group
is not a Top-Heavy Group, no plan within such group will be a Top-Heavy Plan.
1.45 TOTAL COMPENSATION: The Member's Applicable Compensation, but limited
to such compensation received while a Member (or eligible to participate in the
Plan) to the extent permitted by applicable regulations.
1.46 TRUST: The Trust established pursuant to the Plan.
1.47 TRUST FUND: The fund established by contributions provided for in the
Plan and held in the Trust, together with all income, profits or increments
thereon.
1.48 TRUSTEE: The Trustee under the Trust.
1.49 VALUATION DATE: Each day on which the national securities market for
the Plan's investment funds are open for trading; however, the date on which
mutual fund units or shares of Company Stock are acquired or disposed of by the
Trustee for the Participant's Account(s) to effectuate an event under the Plan,
e.g., loan, withdrawal, distribution, etc., shall be the applicable Valuation
Date.
1.50 YEAR OF SERVICE: A Year of Service is a Plan Year in which the Employee
is credited with 1,000 or more Hours of Service. An Employee shall also be
credited with Years of Service with a predecessor employer to the extent
credited under a predecessor employer plan or, to the extent provided in any
acquisition agreement or as otherwise may be provided by the Committee on a
nondiscriminatory basis. All Years of Service shall be aggregated and counted as
the appropriate number of whole Years of Service, except if an Employee who is
not vested in his Employer Contribution Account terminates service and incurs
five consecutive Breaks in Service, his Years of Service credited prior to such
Breaks in Service shall be forfeited.
The masculine gender, wherever used herein, shall include the feminine
gender, and the singular may include the plural, unless the context plainly
indicates to the contrary.
I-9
<PAGE> 17
ARTICLE II
PROFIT SHARING PLAN
2.1 PROFITS: This Plan is intended to be a profit sharing plan and all
Salary Deferral Contributions and Employer Contributions shall be made out of
the Employers' current or accumulated earnings and profits as computed in
accordance with generally accepted accounting principles; however, the Board of
Directors may authorize contributions in the absence of such earnings and
profits in its sole discretion as provided by Code Section 401(a)(27), provided
the Plan continues to qualify as a profit sharing plan.
II-1
<PAGE> 18
ARTICLE III
ELIGIBILITY
3.1 EMPLOYEES ELIGIBLE: Only Employees who are in the Eligible Class shall
be eligible to actively participate in the Plan, and each such Employee shall be
eligible to make Savings Contributions and/or Salary Deferral Contributions to
the Plan beginning on the first day of the month coincident with or next
following the date on which he first completes an Hour of Service; provided,
however, (1) former Employees who are in the Eligible Class upon the date of
their rehire shall be eligible to participate immediately and (2) Employees who
are in the Eligible Class shall be eligible to make qualifying rollover
contributions to the Plan at any time. The date an Employee in the Eligible
Class is first eligible to contribute to the Plan (other than a rollover
contribution) and the first day of each month thereafter that he remains
eligible to join the Plan is the "entry date."
3.2 SAVINGS CONTRIBUTION OR SALARY DEFERRAL CONTRIBUTION AUTHORIZATION
REQUIRED: An Employee in the Eligible Class may become a Member of the Plan on
any future entry date by authorizing a Savings Contribution and/or a Salary
Deferral Contribution and directing the investment thereof in the manner
hereinafter provided.
3.3 CONTRIBUTIONS VOLUNTARY: Contributions to the Plan by an Employee are
entirely voluntary.
3.4 TRANSFERS OF EMPLOYMENT: Transfers of employment between two or more
Employers shall not affect a Employee's membership in the Plan, except as
provided in this Section 3.4. Any transfer of a Member to employment with a
non-participating Affiliated Company or to an employment classification that is
not in the Eligible Class shall not constitute a termination of service. Each
such transferred Member shall remain a Member of the Plan and shall retain the
rights and benefits accrued under the Plan prior to the date of such transfer
until his subsequent retirement, termination of service or total withdrawal.
However, each such transferred Member shall not be eligible to make additional
Savings Contributions or Salary Deferral Contributions while he is employed by a
non-participating Affiliated Company or while he is not employed in the Eligible
Class.
III-1
<PAGE> 19
ARTICLE IV
CONTRIBUTIONS AND VESTING
4.1 SAVINGS CONTRIBUTIONS: An Employee in the Eligible Class may authorize
a Savings Contribution, to be effected by payroll deductions, in whole
percentages of not less than 1% and not more than 15% of his Compensation for
such payroll period, subject to Section 4.2.
4.2 SALARY DEFERRAL CONTRIBUTIONS: Subject to Section 4.8, an Employee in
the Eligible Class may elect a Salary Deferral Contribution rate (in whole
percentages) of not less than 1% and not more than 15% of his Compensation for
any payroll period, to be effected by payroll reductions. Each such election of
a Salary Deferral Contribution rate shall be made in writing on a salary
reduction election form provided by the Committee at least ten days prior to the
effective date of such election (if not made as of the date service commences),
shall be subject to reduction as provided in Section 4.8, and shall be subject
to such other terms and conditions as the Committee may determine. The sum of an
Employee's Salary Deferral Contribution rate and Savings Contribution rate may
not exceed 15% and, to the extent necessary, a Member's Savings Contributions
shall be reduced first.
(a) A Member's Salary Deferral Contribution made pursuant to
this Section shall not exceed $10,000 for the taxable year of the
Member. This dollar limitation shall be adjusted annually as provided
in Code Section 415(d) pursuant to Regulations. The adjusted limitation
shall be effective as of January 1 of each calendar year.
(b) In the event that the dollar limitation provided for in
Section 4.2(a) is exceeded, the Committee shall direct the Trustee to
either (1) distribute such excess amount, and any income (or loss)
allocable to such amount (as provided in (d) below), to the Member not
later than the first April 15 following the close of the Member's
taxable year or (2) to recharacterize such excess amount, and any
income or (loss) allocable to such amount, as a Savings Contributions
made by the Member, subject to the further provisions of the Plan
applicable to Savings Contributions.
(c) In the event that a Member is also a participant in (1)
another qualified cash or deferred arrangement (as defined in Code
Section 401(k)), (2) a simplified employee pension (as defined in Code
Section 408(k)), or (3) a salary reduction arrangement (within the
meaning of Code Section 3121(a)(5)(D)) and the elective deferrals, as
defined in Code Section 402(g)(3), made under such other arrangement(s)
and this Plan cumulatively exceed $10,000 (or such amount adjusted
annually as provided in Code Section 415(d) pursuant to Regulations)
for such Member's taxable year, the Member may, not later than March 1
following the close of his taxable year, notify the Committee in
writing of such excess and request that his Salary Deferral
Contribution under this Plan be reduced by an amount specified by the
Member. Such amount shall then be distributed in the same manner as
provided in Section 4.2(b).
IV-1
<PAGE> 20
(d) The income (or loss) allocable to returnable contributions
shall equal the sum of the allocable gain or loss for the Plan Year and
the allocable gain or loss for the period between the end of the Plan
Year and the date of distribution. Income includes all earnings and
appreciation, including such items as interest, dividends, rent,
royalties, gains from the sale of property, appreciation in the value
of stocks, bonds, annuity and life insurance contracts, and other
property, without regard to whether such appreciation has been
realized.
(1) The income (or loss) allocable to returnable
contributions for the Plan Year is determined by multiplying
the income (or loss) for the Plan Year allocable to employee
contributions, matching contributions, and amounts treated as
matching contributions (whichever is applicable) by a
fraction. The numerator of the fraction is the amount of
returnable contributions made on behalf of the employee for
the Plan Year. The denominator of the fraction is the total
account balance of the employee attributable to employee
contributions, matching contributions and amounts treated as
matching contributions as of the end of the Plan Year, reduced
by the gain allocable to such total amount for the Plan Year
and increased by the loss allocable to such total amount for
the Plan Year.
(2) The allocable income or loss for the period
between the end of the Plan Year and the distribution date is
equal to 10 percent of the income or loss allocable to
returnable contributions for the Plan Year (as calculated
under subparagraph (1) above) multiplied by the number of
calendar months that have elapsed since the end of the Plan
Year. For purposes of determining the number of calendar
months that have elapsed, a distribution occurring on or
before the fifteenth day of the month will be treated as
having been made on the last day of the preceding month, and a
distribution occurring after such fifteenth day will be
treated as having been made on the first day of the next
month.
4.3 MATCHING EMPLOYER CONTRIBUTIONS: Subject to the other provisions of the
Plan, with respect to each payroll period the Employers shall contribute, with
respect to each Member who made Savings Contributions and/or Salary Deferral
Contributions for such pay period, an amount equal to 50% of the sum of the
Member's Savings Contributions and Salary Deferral Contributions for that
payroll period, but only to the extent the sum of such contributions does not
exceed 6% of the Member's Compensation for the applicable payroll period;
provided that, if a Member has made both Savings Contributions and Salary
Deferral Contributions, the Employer Contributions shall be deemed to have been
made first with respect to the Salary Deferral Contributions.
4.4 CHANGE IN CONTRIBUTION RATE: The Savings Contribution and/or Salary
Deferral Contribution rate elected by a Member may be changed by a Member, upon
advance notice, as of the first day of any calendar quarter following proper
notice, but any such change shall not be retroactive.
IV-2
<PAGE> 21
4.5 VOLUNTARY SUSPENSION OF CONTRIBUTIONS: A Member who has elected to
contribute and/or defer a portion of his Compensation as a Savings Contribution
and/or Salary Deferral Contribution under the Plan may suspend any further
contributions and/or deferrals as of the end of any payroll period if, and only
if prior to the end of such payroll period, he gives notice to his Employer, in
such form and manner as the Committee may prescribe, of his election to effect
such suspension. Such suspension shall remain in effect until the Member again
properly elects to make contributions to the Plan.
4.6 ACTUAL DEFERRAL PERCENTAGE: For the purposes of this Section, "Actual
Deferral Percentage" means, with respect to the Highly Compensated Employee
group and Non-Highly Compensated Employee group for a Plan Year, the average of
the ratios, calculated separately for each Member in such group, of the amount
of Salary Deferral Contributions allocated to each Member's Salary Deferral
Contribution Account (unreduced by distributions made pursuant to Sections
4.2(b) and 4.2(d)) for such Plan Year, to such Member's Total Compensation for
such Plan Year.
4.7 ACTUAL DEFERRAL PERCENTAGE TEST:
(a) Maximum Annual Allocation: For each Plan Year, the annual
allocation derived from Salary Deferral Contributions to a Member's
Salary Deferral Contribution Account shall satisfy one of the following
tests:
(1) The "Actual Deferral Percentage" for the Highly
Compensated Employee group shall not be more than the "Actual
Deferral Percentage" of the Non-Highly Compensated Employee
group multiplied by 1.25, or
(2) The excess of the "Actual Deferral Percentage"
for the Highly Compensated Employee group over the "Actual
Deferral Percentage" for the Non-Highly Compensated Employee
group shall not be more than two percentage points.
Additionally, the "Actual Deferral Percentage" for the Highly
Compensated Employee group shall not exceed the "Actual
Deferral Percentage" for the Non-Highly Compensated Employee
group multiplied by two. This alternative limitation test
cannot be used to satisfy the Actual Deferral Percentage test
and the Contribution Percentage Test of Section 4.9, except as
otherwise provided by applicable regulations.
(b) For the purposes of Sections 4.7(a) and 4.8, a Highly
Compensated Employee and a Non-Highly Compensated Employee shall
include any Employee eligible to make a deferral election pursuant to
Section 4.2, whether or not such deferral election was made.
(c) For the purposes of this Section, if two or more plans
which include cash or deferred arrangements are considered one plan for
the purposes of Code Section 401(a)(4) or 410(b), the cash or deferred
arrangements included in such plans shall be treated as one
arrangement.
IV-3
<PAGE> 22
(d) For the purposes of this Section, if a Highly Compensated
Employee is a Member under two or more cash or deferred arrangements of
the Employer, all such cash or deferred arrangements shall be treated
as one cash or deferred arrangement for the purpose of determining the
deferral percentage with respect to such Highly Compensated Employee.
(e) Notwithstanding the above, the determination and treatment
of Employer Salary Deferral Contributions and "Actual Deferral
Percentage" of any Member shall satisfy such other requirements as may
be prescribed by the Secretary of the Treasury.
4.8 ADJUSTMENTS AS A RESULT OF ACTUAL DEFERRAL PERCENTAGE TEST: In the
event that the initial allocations of the Salary Deferral Contributions made
pursuant to the Plan do not satisfy one of the tests set forth in Section
4.7(a), either of the following actions shall be taken:
(a) On or before the 15th day of the third month following the
end of each Plan Year, but in no event later than the close of the
following Plan Year, the Committee shall direct the Trustee to
distribute to the Highly Compensated Employee group the aggregate
amount of excess Salary Deferral Contributions (and any income
allocable to such contributions as provided in (d) of Section 4.2),
beginning with the Member(s) having the highest dollar amount of Salary
Deferral Contributions, reducing such Members' contributions pro rata
to the next highest dollar amount of Salary Deferral Contributions (and
continuing with the next highest group and so on) until the aggregate
excess amount is distributed.
(b) Within 30 days after the end of the Plan Year, the
Employer shall make a contribution on behalf of Non-Highly Compensated
Employees in an amount sufficient to satisfy one of the tests set forth
in Section 4.7(a). Such contribution shall be deemed a Salary Deferral
Contribution and allocated to the Salary Deferral Contribution Account
of each Non-Highly Compensated Employee in the same proportion that
each Non-Highly Compensated Employee's Salary Deferral Contribution for
the year bears to the total Salary Deferral Contributions of all
Non-Highly Compensated Employees. However, if option (b) is elected,
then in all events such contributions shall be fully vested when made
and shall be subject to the same distribution restrictions that apply
to Salary Deferral Contributions, except that such amounts may not be
withdrawn prior to the Member's termination of employment.
(c) The amount of excess Salary Deferral Contributions to be
distributed or recharacterized shall be reduced by excess deferrals
previously distributed for the taxable year ending in the same Plan
Year and excess deferrals to be distributed for a taxable year will be
reduced by excess contributions previously distributed or
recharacterized for the Plan beginning in such taxable year.
IV-4
<PAGE> 23
4.9 MAXIMUM CONTRIBUTION PERCENTAGE.
(a) The "Contribution Percentage" for the Highly Compensated
Employee group shall not exceed the greater of:
(1) 125% of such percentage for the Non-Highly
Compensated Employee group; or
(2) the lesser of 200% of such percentage for the
Non-Highly Compensated Employee group, or such percentage for
the Non-Highly Compensated Employee group plus two percentage
points or such lesser amount determined pursuant to
Regulations to prevent the multiple use of this alternative
limitation with respect to any Highly Compensated Employee.
(b) For the purposes of this Section and Section 4.10,
"Contribution Percentage" for a Plan Year means, with respect to the
Highly Compensated Employee group and Non-Highly Compensated Employee
group, the average of the ratios (calculated separately for each Member
in each group) of:
(1) the sum of the matching contributions pursuant to
Section 4.3 and Employee Savings Contributions pursuant to
Section 4.1 contributed under the Plan on behalf of each such
Member for such Plan Year; to
(2) the Member's Total Compensation for such Plan
Year.
(c) The "Contribution Percentage" for a Highly Compensated
Employee shall be determined by including matching contributions
pursuant to Section 4.3 and Employee Savings Contributions pursuant to
Section 4.1.
(d) For purposes of this Section, if two or more plans of the
Employer to which matching contributions, Employee contributions, or
elective deferrals are made are treated as one plan for purposes of
Code Section 410(b), such plans shall be treated as one plan for
purposes of this Section 4.9. In addition, if a Highly Compensated
Employee participates in two or more plans described in Code Section
401(a) or arrangements described in Code Section 401(k) which are
maintained by the Employer to which such contributions are made, all
such contributions shall be aggregated for purposes of this Section
4.9.
(e) For purposes of Section 4.9(a) and 4.10, a Highly
Compensated Employee and Non-Highly Compensated Employee shall include
any Employee eligible to have matching contributions pursuant to
Section 4.3 and Employee Savings Contributions pursuant to Section 4.1
allocated to his account for the Plan Year.
IV-5
<PAGE> 24
4.10 ADJUSTMENTS FOR EXCESSIVE CONTRIBUTION PERCENTAGE:
(a) In the event that the "Contribution Percentage" for the
Highly Compensated Employee group exceeds the "Contribution Percentage"
for the Non-Highly Compensated Employee group pursuant to Section
4.9(a), the Committee (on or before the 15th day of the third month
following the end of the Plan Year, but in no event later than the
close of the following Plan Year) the Committee shall direct the
Trustee to distribute to the Highly Compensated Employee group the
amount of "Excess Aggregate Contributions" (and any income allocable to
such contributions as provided in (d) of Section 4.2), beginning with
the Member(s) with the highest dollar amount of such contributions,
reducing such Members' contributions pro rata to the next highest
dollar amount of contributions (and continuing with the next highest
group and so on) until the aggregate amount of such excess is
distributed. However, no forfeiture may be allocated to a Highly
Compensated Employee whose contributions are reduced pursuant to this
Section.
(b) The determination of the amount of "Excess Aggregate
Contributions" with respect to any Plan Year shall be made after:
(1) first determining the excess contributions
pursuant to Section 4.2(a), and
(2) then determining the excess annual allocations
pursuant to Section 4.7(a).
(c) To prevent the multiple use of the alternative methods of
compliance with the ADP test and the ACP test, the provision of section
1.401(m)-2 of the regulations are hereby incorporated by reference to
determine if such multiple use exists. If, after application of such
test, multiple use exists, the actual contribution percentage shall be
reduced as provided in section 1.401(m)-2(c) of the regulations for all
Highly Compensated Employees in the Plan.
(d) Notwithstanding anything in the Plan to the contrary, an
employer matching contribution may be distributed only if such
contribution is an excess aggregate contribution. It may not be
distributed merely because it relates to an excess deferral, an excess
contribution or an excess aggregate contribution that is distributed.
In such cases, the related matching contribution shall be forfeited
notwithstanding anything in the Plan to the contrary.
4.11 MAXIMUM ANNUAL ADDITIONS: Notwithstanding anything contained herein to
the contrary, the total Annual Additions made to Accounts of a Member for any
Plan Year shall be subject to the following limitations:
IV-6
<PAGE> 25
(a) Single Defined Contribution Plan
(1) If an Employer does not maintain any other
qualified plan, the amount of Annual Additions which may be
allocated under this Plan on a Member's behalf for a Plan Year
shall not exceed the lesser of the Maximum Permissible Amount
or any other limitation contained in this Plan.
(2) Prior to the determination of the Member's actual
Applicable Compensation for a Plan Year, the Maximum
Permissible Amount may be determined on the basis of the
Member's estimated annual Applicable Compensation for such
Plan Year. Such estimated annual Applicable Compensation shall
be determined on a reasonable basis and shall be uniformly
determined for all Members similarly situated.
(3) As soon as is administratively feasible after the
end of the Plan Year, the Maximum Permissible Amount for such
Plan Year shall be determined on the basis of the Member's
actual Applicable Compensation for such Plan Year.
(4) If there are Excess Annual Additions with respect
to a Member for the Limitation Year, such Excess Annual
Additions shall be disposed of as follows:
A. There shall first be returned to the
Member his unmatched Savings Contributions (and
earnings thereon), if any, and then a portion of his
matched Savings Contributions (and earnings thereon),
to the extent, and only to the extent, such returned
Savings Contributions would reduce the Excess Annual
Additions.
B. If any of such Excess Annual Additions
shall then remain, the Employer Contributions,
including both Salary Deferral Contributions defined
in Section 4.2 and matching Employer Contributions
defined in Section 4.3, allocated to the Member (and
earnings thereon) shall then be reduced to the extent
necessary to eliminate such remaining Excess Annual
Additions. The amount of the reduction of the
Employer Contributions for such Member shall be
reallocated first out of such Member's unmatched
Salary Deferral Contributions, then matching Employer
Contribution Account and then out of his Salary
Deferral Contribution Account, and shall be held in a
suspense account which shall be applied as a part of
(and to reduce to such extent what would otherwise
be) the matching Employer Contributions for all
Members required to be made to the Plan during the
next subsequent calendar quarter or quarters. No
portion of such Excess Annual Additions may be
distributed to Members or former Members. If a
suspense account is in existence at any time during
the Plan Year pursuant to
IV-7
<PAGE> 26
this paragraph B, such suspense account shall not
participate in the allocation of investment gains or
losses of the Trust Fund.
(b) Two or More Defined Contribution Plans
(1) If, in addition to this Plan, the Employer
maintains any other qualified defined contribution plan, the
amount of Annual Additions which may be allocated under this
Plan on a Member's behalf for a Plan Year, shall not exceed
the lesser of:
A. the Maximum Permissible Amount, reduced
by the sum of any Annual Additions allocated to the
Member's accounts for the same Plan Year under such
other defined contribution plan or plans; or
B. any other limitation contained in this
Plan.
(2) Prior to the determination of the Member's actual
Applicable Compensation for the Plan Year, the amount referred
to in Section 4.11(b)(1), may be determined on the basis of
the Member's estimated annual Applicable Compensation for such
Plan Year. Such estimated annual Applicable Compensation shall
be determined on a reasonable basis and shall be uniformly
determined for all Members similarly situated.
(3) As soon as is administratively feasible after the
end of the Plan Year, the amounts referred to in Section
4.11(b)(1) shall be determined on the basis of the Member's
actual Applicable Compensation for such Plan Year.
(4) If a Member's Annual Additions under this Plan
and all such other defined contribution plans result in Excess
Annual Additions, such Excess Annual Additions shall be deemed
to consist of the amounts last allocated.
(5) If Excess Annual Additions were allocated to a
Member on an allocation date of another plan, the Excess
Annual Additions attributed to this Plan will be the product
of:
A. the total Excess Annual Additions
allocated as of such date (including any amount which
would have been allocated but for the limitations of
Code Section 415); times
B. the ratio of (A) the amount allocated to
the Member as of such date under this Plan, divided
by (B) the total amount allocated as of such date
under all qualified defined contribution plans
(determined without regard to the limitations of Code
Section 415).
IV-8
<PAGE> 27
(6) Any Excess Annual Additions attributed to this
Plan shall be disposed of as provided in Section 4.11(a).
(c) Defined Contribution Plan and Defined Benefit Plan
(1) General Rule - If the Employer maintains one or
more defined contribution plans and one or more defined
benefit plans, the sum of the "defined contribution plan
fraction" and the "defined benefit plan fraction," as defined
in Code Section 415, cannot exceed 1.0 for any Plan Year. For
purposes of this paragraph (c) of Section 4.11, Employee
contributions to a qualified defined benefit plan are treated
as a separate defined contribution plan, and all defined
contribution plans of an Employer are to be treated as one
defined contribution plan and all defined benefit plans of an
Employer are to be treated as one defined benefit plan whether
or not such plans have been terminated.
(2) If the sum of the defined contribution plan
fraction and defined benefit plan fraction exceeds 1.0, the
annual benefit of the defined benefit plan or plans (starting
with this Plan first) will be reduced so that the sum of the
fractions will not exceed 1.0. In no event will the annual
benefit be decreased below the amount of the accrued benefit
to date. If additional reductions are required for the sum of
the fractions to equal 1.0, the reductions will then be made
to the defined contribution plan or plans (starting with this
Plan first).
(d) Incorporation by Reference
All provisions of Code Section 415 that may not be
applied in more than one manner are hereby incorporated in the
Plan by references and if any such incorporated provision
conflicts with a provision in the Plan, such incorporated
provision shall control.
4.12 ROLLOVER CONTRIBUTIONS: An Employee who is in the Eligible Class shall
be eligible to make a rollover contribution (whether a "direct" or "indirect"
rollover) to the Plan by wire transfer or by check or other property acceptable
to the Committee, provided such contribution satisfies the requirements of
Section 402(a) of the Code as being a 'qualified rollover,' and the Employee
satisfies such other administrative requirements concerning such rollover
contributions as may be required, including designating the investment fund(s)
for such contribution. Rollover contributions are not subject to an Employer
matching contribution.
4.13 VESTING: Each person who was a Member or an Employee in the Eligible
Class on June 30, 1998 shall always be 100% vested in all of his Accounts,
except that any Member in the Tacoma Plan who was not an Employee on the date it
was merged into the Plan, shall continue to be vested in his merged Accounts
only to the extent vested therein on the merger date, unless he again becomes an
Employee. Each person who becomes a Member after June 30, 1998 shall always be
IV-9
<PAGE> 28
100% vested in his Savings Contributions, Salary Deferral and Rollover Accounts,
and shall become 100% vested in his Employer Contribution Account based on his
Years of Service in accordance with the following schedule:
Years of Service Vested Percentage
---------------- -----------------
less than 3 0%
3 or more 100%
Regardless of his Years of Service however, a Participant who is an
Employee on or after reaching age 65 shall be 100% vested in all his Accounts.
Further, in the event a Participant's employment with the Employers and
Affiliated Companies is terminated by reason of disability (as determined for
purposes of Title II of the Federal Social Security Act) or death, he shall also
be deemed to be 100% vested in all his Accounts.
Notwithstanding the foregoing schedule, in the event the Plan is
terminated or partially terminated or the Employers' contributions under the
Plan are completely discontinued, each affected Member shall thereupon be 100%
vested in all his Accounts as of the date of such discontinuance or termination
or partial termination.
IV-10
<PAGE> 29
ARTICLE V
INVESTMENTS
5.1 DIRECTION OF INVESTMENTS:
(a) Each Member shall direct, when he authorizes Savings
Contributions, elects to have made Salary Deferral Contributions or
makes a Rollover Contribution, that such contributions be invested in
one or more of the investment funds offered under the Plan (as set
forth on Attachment A, which is made a part of the Plan for all
purposes) in increments of 1%; provided, however, a Rollover
Contribution may not be invested in the Company Stock Fund. Employer
matching contributions shall be invested in the same manner as the
Member's contributions with respect to which they are made. The
Committee may, from time to time, add additional investment funds
and/or delete existing investment funds offered under the Plan by
giving advance notice to the Members. The Committee shall have the full
power and authority to make such rules as necessary or appropriate to
add or delete a fund, including amending the Plan and Trust to
effectuate such change.
(b) Each Member may change the investment of the existing
balances in his Accounts, by authorizing a transfer from one investment
fund to one or more of the other investment funds in 1% increments, as
of any Valuation Date by giving notice to the Plan's record keeper in
accordance with the Plan's administrative procedures then in effect;
provided, however, existing Account balances may not be transferred
into the Company Stock Fund.
(c) Each Member may change the current investment direction
concerning his future Savings and Salary Deferral Contributions as of
any Valuation Date by giving notice to the Plan's record keeper in
accordance with the Plan's administrative procedures then in effect.
5.2 COMPANY STOCK FUND: With respect to the Company Stock Fund, the Trustee
shall vote the shares of Company Stock held in the Company Stock Fund for the
respective Accounts of the Members in accordance with the directions of such
Members, provided such directions are received by the Trustee at least five days
before the date set for the meeting at which such shares are to be voted. The
Trustee shall not vote shares of Company Stock for which it has not received
timely instructions on a particular matter, unless otherwise required by ERISA.
Each Member (or, in the event of his death, his beneficiary) shall have the
right, to the extent of the number of shares of Company Stock allocated to his
Accounts in the Company Stock Fund, respectively, to instruct the Trustee in
writing as to the manner in which to respond to a tender offer or exchange offer
with respect to such shares. The Committee shall use its best efforts timely to
distribute or cause to be distributed to each Member (or beneficiary thereof)
such information as will be distributed to stockholders of the Company in
connection with any such tender offer or exchange offer. Upon timely receipt of
such instructions, the Trustee shall respond as instructed with respect to
shares of such stock. The instructions received by the Trustee from Members
shall be held by the Trustee in
V-1
<PAGE> 30
confidence and shall not be divulged or released to any person, including
officers or employees of the Corporation or any Affiliated Company. If the
Trustee shall not receive timely instructions from a Member (or beneficiary
thereof) as to the manner in which to respond to such tender offer or exchange
offer, such Member (or beneficiary) shall be deemed to have instructed the
Trustee not to tender or exchange the Company Stock.
V-2
<PAGE> 31
ARTICLE VI
PAYMENT OF CONTRIBUTIONS AND ALLOCATIONS
6.1 PAYMENT OF CONTRIBUTIONS: Each Employer shall, as soon as reasonably
practicable following each payroll period, pay to the Trustee the amounts
representing payroll deductions pursuant to Savings Contributions and the
amounts representing salary reductions pursuant to its Members Salary Deferral
Contributions. Employer Contributions shall be made to the Trustee in full prior
to the due date including extensions thereof, for filing the Employer's federal
income tax return for its taxable year which ends coincident with the end of
such Plan Year or within which such Plan Year ends, as the case may be. The
Trustee shall hold or apply the contributions so received by it in accordance
with the provisions of the Plan; and no part thereof shall be used for any
purpose other than the exclusive benefit of the Members or their beneficiaries.
Contributions shall be made in cash (by check or wire transfer) or, with respect
to Employer Contributions to be invested in the Company Stock Fund, in the sole
discretion of the Corporation, in shares of Company Stock.
6.2 VALUATION OF TRUST FUND: The Trustee shall value the assets of the
Trust Fund at fair market value as of each Valuation Date. With respect to an
Account (or the portion thereof) that is invested in a mutual fund, the fair
market value shall be determined based on the reported value of a unit in such
fund for the applicable Valuation Date. With respect to an Account (or the
portion thereof) that is invested in the Company Stock Fund, the fair market
value shall be the fair market value of the shares of Company Stock allocated to
such Account on the applicable Valuation Date. The Trustee's determination of
the value of any Account shall be final and conclusive for all purposes of the
Plan.
6.3 FUNDING POLICY: The provisions of Articles IV and VI shall be deemed
the procedure for establishing and carrying out the funding policy and method of
the Plan. Such funding policy and method shall be administered by the Employers
and other fiduciaries consistent with the objectives of the Plan and with the
requirements of Title I of ERISA.
VI-1
<PAGE> 32
ARTICLE VII
DISTRIBUTION OF ACCOUNTS
7.1 TIME OF DISTRIBUTION: For separations from service occurring after
1997, if the vested value of the Member's Accounts is less than or equal to
$5,000 (for separations from service prior to 1998, $3,500 shall be substituted
for $5,000 here and below, unless IRS rules permit the $5,000 limit to apply to
such Members), distribution of the Member's Accounts shall be made as soon as
practicable after the Member's separation from service; however, if the total
vested value of the Member's Accounts exceeds (or at the time of any prior
withdrawal or distribution, exceeded) $5,000, the Member's Accounts shall be
distributed only upon his written consent following his separation of service,
but in any event no later than 60 days after the end of the Plan Year in which
occurs the earlier of the Member's death or attainment of age 65. If a Member's
termination of service occurs after attainment of age 65, distribution shall be
made within 60 days after the end of the Plan Year in which termination occurs;
however, Effective January 1, 1997, benefit payments to any Member who reaches
age 70-1/2 prior to 1999 (excluding any 5% or more owner) must begin by April 1
of the calendar year following the year in which the individual attains age
70-1/2, whether or not the person has terminated service, unless such Member
(excluding any 5% or more owner) elects to defer distribution until his
termination of employment. All benefits payable because of a Member's death
shall be paid to the Member's beneficiary in a single, lump-sum distribution as
soon as practicable and in all events within five years of the Member's date of
death. If a Member dies after distributions have begun following his termination
of employment and before his entire interest has been distributed to him, the
remaining portion will be distributed to his beneficiary at least as rapidly as
the method in effect on the Member's date of death.
Notwithstanding anything in the Plan to the contrary, amounts held in
the Member's Salary Deferral Contribution Account may not be distributable prior
to the earlier of:
(a) his separation from service (within the meaning of Code
Section 401(k)), total and permanent disability, or death;
(b) his attainment of age 59-1/2;
(c) termination of the Plan without establishment of a
successor plan by the Employer or an Affiliated Company;
(d) the date of the sale by the Employer to an entity that is
not an Affiliated Company of substantially all of the assets (within
the meaning of Code Section 409(d)(2)) with respect to a Member who
continues employment with the corporation acquiring such assets;
provided the Employer continues to maintain the Plan;
(e) the date of the sale by the Employer of its interest in a
subsidiary (within the meaning of Code Section 409(d)(3)) to an entity
which is not an Affiliated Company with
VII-1
<PAGE> 33
respect to a Member who continues employment with such subsidiary;
provided the Employer continues to maintain the Plan; or
(f) proven financial hardship, subject to the limitations of
Section 7.6, and any distribution due to items (c), (d) or (e) above
may only be made in a lump sum.
7.2 DISTRIBUTIONS FROM ACCOUNTS FOLLOWING SEPARATION FROM SERVICE:
Following a Member's separation from service, his Accounts shall be distributed
as follows: subject to Section 7.8, the Member's Accounts shall be distributed
to the Member or his beneficiary, as the case may be, in a lump sum payment in
cash or, with respect to the portion of the Account invested in the Company
Stock Fund, if any, in shares of Company Stock, if elected.
7.3 PARTIAL WITHDRAWALS:
(a) Pre-1987 Member Contribution Withdrawals. As of any
Valuation Date, a Member who is an Employee may, by giving proper
notice, elect to withdraw from such Member's Pre-1987 Savings
Contributions Subaccount under his Savings Contribution Account any
dollar amount of such contributions without investment earnings
thereon. The amount withdrawn may not exceed the amount of such
contributions made prior to 1987.
(b) Post-1986 Member Contribution Withdrawals. A Member who is
an Employee and who has withdrawn all the funds available (if any)
pursuant to (a) above may, as of any Valuation Date, by giving proper
notice, elect to withdraw from such Member's Savings Contributions
Account all or any part of such Account.
(c) Rollover Account Withdrawals. A Member who is an Employee
and has withdrawn all funds available (if any) pursuant to (a) and (b)
above may, as of any Valuation Date, by giving proper notice, elect to
withdraw all or any part of such Member's Rollover Account.
Withdrawals shall be in cash unless the Account is invested in the
Company Stock Fund and the Member elects to withdraw shares.
If the withdrawal made pursuant to this Section 7.3 is with respect to
a contribution that received a matching Employer contribution in the preceding
24 months, the Member shall not be entitled to Employer matching contributions
with respect to any Savings or Salary Deferral Contributions he may make during
the following 6-month period.
7.4 TOTAL WITHDRAWAL: A Member who is an Employee and who withdraws all
funds available pursuant to Section 7.3 may, as of any Valuation Date, by giving
proper notice, elect to withdraw from such Member's Employer Contributions
Account all or any part of the vested portion of such Member's Employer
Contributions Account; provided, however, a Member may make such a withdrawal
only if he has been a Member for at least 60 months prior to date of such
withdrawal.
VII-2
<PAGE> 34
A Member who makes a withdrawal pursuant to this Section shall not be entitled
to Employer matching contributions with respect to any Savings or Salary
Deferral Contributions he may make during the following 6-month period.
Withdrawals shall be in cash unless the Account is invested in the Company Stock
Fund and the Member elects to withdraw shares.
If the withdrawal made pursuant to this Section 7.3 is with respect to
a contribution that received a matching Employer contribution in the preceding
24 months, the Member shall not be entitled to Employer matching contributions
with respect to any Savings or Salary Deferral Contributions he may make during
the following 6-month period.
7.5 SPECIAL WITHDRAWAL AFTER ATTAINMENT OF AGE 59-1/2: Each Member who is
an Employee, is fully vested, and has attained age 59-1/2 may withdraw all or
any portion of his Employer Contribution Account, and, even if not fully vested,
his Salary Deferral Contribution Account as of any Valuation Date by giving
proper notice of such withdrawal. Withdrawals shall be in cash unless the
Account is invested in the Company Stock Fund and the Member elects to withdraw
shares.
If the withdrawal made pursuant to this Section 7.3 is with respect to
a contribution that received a matching Employer contribution in the preceding
24 months, the Member shall not be entitled to Employer matching contributions
with respect to any Savings or Salary Deferral Contributions he may make during
the following 6-month period.
7.6 HARDSHIP WITHDRAWALS: A Member who is an Employee may request for a
hardship withdrawal from his Salary Deferral Contribution Account and, if fully
vested, his Employer Contribution Account. The approval or disapproval of such
request shall be made by the Committee. The Committee shall not approve any such
request unless it finds that the Member is facing a hardship creating an
"immediate and heavy financial need" (as defined below) and the Member has
obtained all distributions, other than hardship distributions, and all
nontaxable loans currently available under the Plan and all other plans of the
Employer and its ERISA affiliates. To the extent the Member is fully vested in
his Employer Contribution Account, the withdrawal shall be taken first from that
Account. The amount of the hardship withdrawal shall be limited to an amount
that does not exceed: (1) that amount which the Committee determines to be
required to meet the immediate financial needs created by the hardship, which
may include any amounts necessary to pay any federal, state or local income
taxes or penalties reasonably anticipated to result from the distribution, and
(2) if made from the Participant's Salary Deferral Contribution Account, the
amount of the Salary Deferral Contribution Account, but excluding all earnings
credited to such Account after 1988. Further, if a hardship distribution is made
under the Plan, the restrictions set forth in subparagraph (b) below shall
apply. The hardship withdrawal shall be made in cash as soon as practical after
the date the Member submitted the hardship request. The following standards
shall be applied on a uniform and non-discriminatory basis in determining the
existence of a hardship:
(a) A financial need shall be deemed to be an "immediate and
heavy financial need" if it is on account of:
VII-3
<PAGE> 35
(1) Medical expenses described in section 213(d) of
the Code incurred by the Member, the Member's spouse, or any
dependents of the Member (as defined in section 152 of the
Code) or necessary for these persons to obtain such medical
care;
(2) Costs directly related to the purchase (excluding
mortgage payments) of a principal residence for the Member;
(3) Payment of tuition, related educational fees, and
room and board expenses for the next 12 months of
post-secondary education for the Member, his or her spouse,
children, or dependents; or
(4) The need to prevent the eviction of the Member
from his principal residence or foreclosure on the mortgage of
the Member's principal residence; or
(5) any other "safe-harbor" event established from
time to time by the Internal Revenue Service.
(b) Upon a hardship distribution,
(1) The Member's 401(k) contributions and after-tax
contributions under the Plan, and all other plans maintained
by the Employer and its ERISA affiliates (other than a health
or welfare benefit plan or the mandatory employee contribution
portion of a defined benefit plan), will be suspended for 12
months, and
(2) The Member may not make 401(k) contributions
under the Plan, and all other plans maintained by the Employer
and its ERISA affiliates, for the Member'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
the Member's elective contributions for the taxable year of
the hardship distribution.
Withdrawals shall be in cash unless the Account is invested in the
Company Stock Fund and the Member elects to withdraw shares.
If the withdrawal made pursuant to this Section 7.3 is with respect to
a contribution that received a matching Employer contribution in the preceding
24 months, the Member shall not be entitled to Employer matching contributions
with respect to any Savings or Salary Deferral Contributions he may make during
the following 6-month period.
7.7 LOANS TO MEMBERS: Loans shall be granted in a uniform and
non-discriminatory manner to Members (as used herein, a Member includes a
beneficiary) from their Accounts, provided the Member is a "party in interest"
under ERISA, subject to the following terms and conditions:
VII-4
<PAGE> 36
(a) Loans made pursuant to this Section (when added to the
outstanding balance of all other loans made by the Plan to the Member)
shall be limited to the lesser of:
(1) $50,000 reduced by the excess (if any) of the
highest outstanding balance of loans from the Plan to the
Member during the one-year period ending on the day before the
date on which such loan is made, over the outstanding balance
of loans from the Plan to the Member on the date on which such
loan was made, or
(2) one-half of the value of the vested portion of
the Member's Accounts.
For purposes of this limit, all plans of the Employer and Affiliated
Companies shall be considered one plan. Each loan must be for at least
$1,000.
(b) Loans shall provide for the level amortization of
principal and interest with payments to be made not less frequently
than monthly over a period not to exceed five years. However, loans
used to acquire any dwelling unit which, within a reasonable time, is
to be used (determined at the time the loan is made) as a principal
residence of the borrower shall provide for periodic repayment over a
period of time not to exceed ten years. Loans shall be evidenced by a
note signed by the Member payable in monthly installments. All loans
shall bear interest at the rate in effect in the commercial loan
division of the Trustee or an affiliated bank to the Trustee for loans
of a similar nature on the date the loan is made, and if the Trustee
does not provide such a rate of interest itself or through an
affiliated bank, then the rate at any bank handling the Company's
accounts as determined by the Committee, for loans of a similar nature
on the date the loan is made.
(c) Loans must be repaid by means of an irrevocable payroll
deduction election, unless the Member is not receiving a salary from
the Employer that is sufficient to allow deduction of the full loan
payments, in which case any excess of payments due over the amount
deductible from the Member's salary shall be paid to the Plan by the
Member in level installments each pay period, but in no event less
frequently than monthly. All loans shall become due and payable in full
upon the date a Member ceases to be a "party in interest" to the Plan.
(d) Loans shall be made first from the Rollover Account, then
the Salary Deferral Contribution Account. If the balance in the Salary
Deferral Contribution Account is less than the amount of the requested
loan, the remainder of the loan shall be made next from the Employer
Contribution Account, and last from the Savings Contribution Account.
Any loan under the Plan shall be secured by the pledge of all of the
Member's right, title and interest in an amount of his or her vested
Accounts equal to the amount of the loan, but not exceeding 50% of such
vested Accounts as determined immediately after such loan. Such pledge
shall be executed by the Member and his Spouse, if any, which shall
provide that, in the event of any default on a loan repayment, the
Committee shall be authorized to take any and all appropriate lawful
actions necessary to enforce collection of
VII-5
<PAGE> 37
the unpaid loan. In addition, the promissory note shall provide that,
in the event of a default on the loan repayment, both the principal and
accrued, unpaid interest shall be immediately due and payable. If the
Member is subject to the provisions of Section 401(a)(11) of the Code
at the time the vested Accounts are pledged as security for the loan,
the spousal consent must be obtained in the proper form.
(e) A request for a loan shall be made in accordance with the
Plan's administrative procedures, which may specify the order in which
the investment fund(s) within each of the Account(s) are invested shall
be redeemed to make the requested loan, and shall constitute a written
consent to a distribution or deemed distribution of the Account(s), if
necessary, in the event of a default. If a request for a loan is
approved by the Committee, the Committee shall furnish or cause to be
furnished the Trustee with instructions directing the Trustee to make
the loan in a lump-sum payment of cash to the Member.
(f) A loan shall be considered an investment of the separate
Account(s) of the Member from which the loan is made. All loan
repayments of principal and interest shall be credited to such separate
Account(s) and reinvested in the investment funds in accordance with
the Member's election in effect for his current contributions, or, if
none is in effect, his most recent such election.
(g) Only two loans may be outstanding at any time to a Member.
(h) Loan repayments will be suspended under this Plan as
permitted under Code Section 414(u)(4).
(i) All or part of the reasonable administrative costs of
establishing and maintaining a loan may be charged to the borrowing
Member.
7.8 METHODS OF DISTRIBUTION: Distributions shall be made in a lump sum in
cash (and, with respect to Accounts invested in the Company Stock Fund, in
shares of Company Stock, if elected) unless a Member (and his Spouse, if
applicable) have made the proper election to receive one of the following
optional forms of payment.
(a) Joint and Survivor Annuity. If a Member is married on the
benefit payment date and elects not to receive a lump sum, distribution
shall be in the form of a Joint and Survivor Annuity, which shall be an
annuity for the life of the Member with a contingent annuity for the
life of the Member's Spouse, if she survives him, which is 50% of the
amount of the annuity payable to the Member had he lived. The Joint and
Survivor Annuity shall be maximum amount that may be obtained by
purchasing an annuity contract with the Member's Accounts from an
insurance company selected by the Committee. Subject to Sections 7.9
and 9.1, a married Member may elect to receive the Single Life Annuity
or to designate someone other than his Spouse as his contingent joint
annuitant; provided it must
VII-6
<PAGE> 38
be expected that the Member will receive more than 50% of the present
value of his Accounts under such annuity.
(b) Single Life Annuity. If a Member who is not married on the
benefit payment date elects not to receive a lump sum, the Member shall
receive his distribution in the form of a Single Life Annuity providing
him with equal monthly payments for his lifetime. The amount of such
annuity shall be the maximum amount that may be obtained by purchasing
an annuity contract with the Member's Accounts from an insurance
company selected by the Committee. Subject to Section 7.9, the Member
may elect to receive the Joint and Survivor Annuity.
(c) A Member may elect to receive his distribution in annual,
semi-annually, quarterly or monthly installments payable in
substantially equal amounts continuing over a period certain not
exceeding the Member's (or the Member's and his beneficiary's joint)
life expectancy(ies) as of the date such payments begin. At the time of
the election, the Member must specify the fixed period and the
frequency of the installments elected. The installment payments shall
be provided from an insurance company contract purchased with the
amount of the Accounts.
7.9 ELECTION TO RECEIVE AN ANNUITY: The Committee shall furnish certain
general information pertinent to the annuities to each Member at least 30 but
not more than 90 days prior to such Member's benefit payment date. The furnished
information shall be in accordance with such regulations as the Secretary of the
Treasury may prescribe and shall include a general explanation of (i) the
annuity, (ii) the Member's right to make, and the effect of an election or
revocation of an election to receive the annuity, and (iii) the rights of the
Spouse with respect to the Joint and Survivor Annuity. The period of time during
which a Member may make the election described in this Section 7.9 shall be at
any time during the 90-day period prior to the Member's benefit payment date.
Any election may be revoked and subsequent elections may be made or revoked at
any time and any number of times during such election period.
7.10 PRE-RETIREMENT SURVIVOR ANNUITY: Except as provided below, if a married
Member who has elected the Joint and Survivor Annuity dies before his benefit
payment date, his Spouse shall receive a Pre-retirement Survivor Annuity
commencing as soon as practicable following the date of the Member's death;
however, the Spouse may direct that the annuity start on any subsequent date
specified by the Spouse which is not later than the date the Member would have
reached age 65. The amount of the annuity (equal monthly payments for the
Spouse's lifetime) shall be the maximum amount that may be obtained with the
Member's Accounts by purchasing an annuity contract from an insurance company
selected by the Committee.
A Spouse who is entitled to receive the Pre-retirement Survivor Annuity
may elect to receive a lump sum payment of the Member's Accounts in lieu of the
annuity by furnishing the Committee the proper form at any time prior to the
date such insurance contract is purchased.
VII-7
<PAGE> 39
7.11 ELECTION NOT TO RECEIVE THE PRE-RETIREMENT SURVIVOR ANNUITY: A Member
who has elected to receive the Joint and Survivor Annuity may elect, by
executing the election form prescribed by the Committee, not to be covered by
the Pre-retirement Survivor Annuity. Such election must be made during the
election period described below. Any election may be revoked and subsequent
elections may be made or revoked at any time during such election period. Any
such election and any revocation of such election must be signed by the Member's
Spouse and acknowledge the effect of such election on the Spouse's right to
benefits and further, the Spouse's signature must be notarized, and designate a
specific beneficiary and the specific form of payment that cannot be changed
without a new spousal consent.
The Committee shall furnish certain general information pertinent to
this election to each Member within the period beginning on the first day of the
Plan Year in which the Member attains age 32 and ending with the close of the
Plan Year preceding the Plan Year in which the Member attains age 35. With
respect to an Employee who becomes a Member of the Plan after the date the
general information is required to be furnished, such information shall be
furnished on or about the date that such Member begins participation in the
Plan. The furnished information shall be written in accordance with such
regulations as the Secretary of Treasury may prescribe and shall contain a
general explanation of (i) the terms and conditions of Pre-retirement Survivor
Annuity (ii) the Member's right to make and the effect of, an election or
revocation of an election to waive the Pre-retirement Survivor Annuity, and
(iii) the rights of the Member's Spouse with respect to the Pre-retirement
Survivor Annuity. The Member may make or revoke the election described in this
Section 7.11 at any time.
7.12 DIRECT ROLLOVER: 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
Committee, to have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the distributee in a direct
rollover.
Eligible rollover distribution: An eligible rollover distribution is
any distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life expectancy) of
the distributee or the joint lives (or joint life expectancies) of the
distributee and the distributee's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent such distribution is
required under section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income (determined without regard
to the exclusion for net unrealized appreciation with respect to employer
securities).
Eligible retirement plan: An eligible retirement plan is an individual
retirement account described in section 408(a) of the Code, an individual
retirement annuity described in section 408(b) of the Code, an annuity plan
described in section 403(a) of the Code, or a qualified trust described in
section 401(a) of the Code, that accepts the distributee's eligible rollover
distribution. However,
VII-8
<PAGE> 40
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.
Distributee: A distributee includes an Employee or former Employee. In
addition, the employee's or former Employee's surviving spouse and the
Employee's or former Employee's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in section 414(p)
of the Code, are distributees with regard to the interest of the spouse or
former spouse.
Direct rollover: A direct rollover is a payment by the plan to the
eligible retirement plan specified by the distributee.
7.13 30-DAY WAIVER: If a distribution is one to which sections 401(a)(11) and
417 of the Code do not apply, such distribution may commence less than 30 days
after the notice required under section 1.411(a)-11(c) of the Income Tax
Regulations is given, provided that:
(1) the Committee clearly informs the Member that the Member
has a right to a period of at least 30 days after receiving the notice
to consider the decision of whether or not to elect a distribution
(and, if applicable, a particular distribution option), and
(2) the Member, after receiving the notice, affirmatively
elects a distribution.
7.14 FORFEITURES: Upon a Member's termination of employment with the
Employers and Affiliated Companies the nonvested portion of the Member's
Employer Contributions Account (if any) shall continue to be held in the Trust
until forfeited as of the earlier of the date the Member incurs five consecutive
Breaks in Service or receives a complete distribution of his vested Accounts.
Forfeited account balances shall be used to reduce future Employer contributions
otherwise due under the Plan. However, if a Member again becomes an Employee in
the Eligible Class prior to incurring five consecutive Breaks in Service, his
forfeited amount shall be restored, unadjusted for any interim Trust fund gains
or losses, through a special allocation of then existing forfeitures and/or
additional Employer contributions, provided the Member repays the full amount of
such prior distribution to the Plan in cash before the fifth anniversary of his
reemployment date or prior to incurring five consecutive Breaks of Service,
whichever occurs first.
VII-9
<PAGE> 41
ARTICLE VIII
AUTHORIZED ABSENCES
8.1 AUTHORIZED ABSENCES: Employee status and service shall include, and
shall not be interrupted by, the following authorized absences for which the
Employee is not directly or indirectly paid:
(a) Absence due to accident or sickness so long as the Member
is continued on the employment rolls of the Employer or Affiliated
Company and remains eligible to work upon his recovery.
(b) Absence due to an authorized absence for a period not to
exceed two years for such reasons and subject to such conditions as may
be approved by the board of directors of his Employer for general
application to all Employees similarly situated, provided that each
such Member shall immediately, upon expiration of such authorized
absence, apply for reinstatement in the employment of the employing
company.
(c) Absences in compliance with the Family Medical Leave Act.
Notwithstanding any provision of this Plan to the contrary,
contributions, benefits and service credit with respect to qualified military
service will be provided in accordance with Code Section 414(u).
8.2 EFFECT OF AUTHORIZED ABSENCES: Members on Authorized Absence status
shall be treated as if they were employed by a non-participating Affiliated
Company.
VIII-1
<PAGE> 42
ARTICLE IX
BENEFICIARIES IN THE EVENT OF DEATH
9.1 BENEFICIARIES: Upon the death of a Member, his Vested Accounts shall be
distributed to the beneficiary or beneficiaries designated by him in a written
designation on a Plan form filed with his Employer or, if no such designation
shall have been so filed, to his Spouse or, if none, to his estate. No such
designation of beneficiary shall be effective (whether or not made prior to
marriage) if the Member has a Spouse as of his date of death, unless such Spouse
is designated as the sole beneficiary, or unless such Spouse consents to the
designation of another specified person (and form of payment) as beneficiary.
The Spouse's consent must be in writing, acknowledge the effect of the consent
on the Spouse's right to benefits under the Plan, and be witnessed by a Plan
representative or a notary public. The beneficiary designated by the Member may
not be changed without the Spouse's consent, however, a revocation of a
designation of a beneficiary other than the Spouse may be made by a Member
without the consent of the Spouse at any time before the distribution of the
benefit under the Plan. The Spouse's consent to a beneficiary designation shall
not be required if it is established to the satisfaction of the Committee that
such written consent may not be obtained because there is no Spouse or the
Spouse cannot be located. Any consent under this Article IX will be valid only
with respect to the Spouse who signs the consent. The divorce of a Member shall
automatically revoke such former spouse as his beneficiary under the Plan,
except to the extent otherwise provided in a qualified domestic relations order.
IX-1
<PAGE> 43
ARTICLE X
ADMINISTRATION
10.1 ADMINISTRATIVE COMMITTEE: The Corporation shall act as the
administrator of the Plan and shall have all of the powers and responsibilities
conferred upon administrators under ERISA. However, an Administrative Committee
composed of such persons, as may be determined from time to time by the Board of
Directors, may be appointed by the Board to perform the duties of the
Corporation.
The Committee shall elect a Chairman from its number, and a Secretary,
and such other officers as the Committee may determine, who may, but need not,
be members of the Committee, to serve during the pleasure of the Committee. The
Secretary shall keep a record of all meetings and forward all necessary
communications to the Companies and the Trustee. The Chairman of the Committee
shall be agent of the Plan and the Committee for the service of legal process.
Any person appointed a member of the Committee shall signify his
acceptance by filing written acceptance with the Board of Directors. Any member
of the Committee may resign by delivering his written resignation to the Board
of Directors, and such resignation shall become effective at delivery or at any
later date specified therein.
No member of the Committee who is also an officer or employee of any of
the Companies receiving compensation as such shall receive any compensation for
his services as such member. No bonds or other security shall be required of any
member except as required by law.
No member of the Committee shall act or participate in any action
relating solely to his own Account or any other right or privilege under the
Plan.
10.2 POWER OF THE COMMITTEE: The Committee shall have the power:
(a) To determine the times and places for holding meetings of
the Committee and the notices to be given of such meetings, and to
establish other rules for the functioning of the Committee;
(b) To determine the number of members of the Committee at the
time in office which shall constitute a quorum for the transaction of
business, which number shall not be less than a majority of the members
then in office;
(c) To employ such agents and assistants, such counsel (who
may be of counsel to the Companies) and such clerical, medical,
accounting, investment and actuarial services as the Committee may
require in carrying out the provisions of the Plan;
(d) To authorize one or more of their number, or any agent, to
make any payment, or to execute or deliver any instrument, on behalf of
the Committee, except that all
X-1
<PAGE> 44
requisitions for funds from, and requests, directions, notifications,
certifications, and instructions to, the Trustee or to the Company or
Affiliated Companies shall be signed on behalf of the Committee by two
members of the Committee, provided that one of the members signing
shall be the Secretary or Assistant Secretary thereof;
(e) To fix and determine the proportions of costs of the Plan
from time to time to be paid by the Company or Affiliated Companies;
(f) To determine, from the records of the Company or
Affiliated Companies, the considered Compensation, service and other
facts regarding Employees;
(g) To construe and interpret the Plan, decide all questions
of eligibility and determine the amount, manner and time of payment of
any benefits hereunder;
(h) To prescribe forms and procedures to be followed by
Employees applying for membership, Members electing or changing Savings
Contributions or Salary Deferral Contributions, Members or
beneficiaries filing applications for benefits, Members applying for
withdrawals, and other occurrences in the administration of the Plan;
(i) To prepare and distribute, in such manner as the Committee
determines to be appropriate, information explaining the Plan;
(j) To receive from the Company, or Affiliated Companies, and
from Members, such information as shall be necessary for the proper
administration of the Plan;
(k) To furnish the Company or Affiliated Companies, upon
request, such annual reports with respect to the administration of the
Plan as are reasonable and appropriate;
(l) To receive, review and keep on file (as it deems
convenient or proper) reports of the financial condition, and of the
receipts and disbursements, of the Trust Fund from the Trustee;
(m) To set up such rules, applicable to all Employees
similarly situated, as are deemed necessary to carry out the terms of
the Plan; and
(n) To perform all other acts reasonably necessary for
administering the Plan and carrying out its Provisions and performing
the duties imposed upon the Committee.
10.3 DUTIES OF THE COMMITTEE: The Committee shall have the general
responsibility for administering the Plan and carrying out its provisions;
subject, however, to the provisions of the Plan and the Trust Agreement.
X-2
<PAGE> 45
Subject to the limitations of the Plan, the Committee, from time to
time, shall establish rules for the administration of the Plan and the
transaction of its business. As to all matters of administration not reserved in
the Plan to the Board of Directors or the Boards of Directors of the Employers,
the determination of the Committee as to any disputed question shall be
conclusive. All such rules and decisions of the Committee shall be uniformly and
consistently applied in order that all Members in similar circumstances shall be
treated alike.
It shall be the duty of the Committee to notify the Trustee in writing
of the termination of service of any Member under the Plan and of the amount of
cash which shall be payable to such Member upon termination of service, and the
date distributions are to commence. The Committee shall not requisition any
payment from the Trustee except upon certification by the Committee that such
amount is for payment of benefits under the Plan or for the payment of expenses
of administering the Plan. Any such certification by the Committee shall be
deemed conclusively true insofar as the Trustee is concerned.
All resolutions or other actions taken by the Committee at the meeting
shall be by vote of the majority of the Committee attending the meeting.
10.4 ACCOUNTS RECORDS: The Committee shall maintain accounts showing the
fiscal transactions of the Plan and shall keep, or cause the Employers to keep,
in convenient form, such data as may be necessary for valuation of the assets.
The Committee shall prepare annually a report showing in reasonable summary the
assets and liabilities of the Plan and giving a brief account of the operation
of the Plan for the past Plan Year and any further information which the Boards
of Directors of the Employers may require and as the Committee can reasonably
furnish or can obtain from the Trustee. Such report shall be submitted to the
Boards of Directors of the Employers and shall be filed in the office of the
Secretary of the Committee, where it shall be open to inspection by any Member.
The Committee shall exercise such other authority and responsibility as it deems
appropriate in order to comply with ERISA and governmental regulations issued
thereunder relating to (i) records of Members' service, Account balances and the
percentage of such Account balances which are nonforfeitable under the Plan;
(ii) notifications to Members; and (iii) annual reports to the Internal Revenue
Service. Unless otherwise required by law, the Committee may authorize any
method of accounting for, or of reporting, information with respect to Plan
assets and Account balances which fairly and accurately presents the fair market
value, determined in accordance with the Plan, of the Plan assets and Account
balances as of such date.
10.5 ALLOCATION OF RESPONSIBILITY AMONG FIDUCIARIES FOR PLAN AND TRUST FUND
ADMINISTRATION: The fiduciaries of the Plan shall have only those specific
powers, duties, responsibilities and obligations as are specifically given them
under this Plan or the Trust Agreement. In general, the Companies shall have the
sole responsibility for making the contributions provided under Article IV. The
Board of Directors shall have the sole authority to appoint and remove the
Trustee, members of the Committee and to amend or terminate, in whole or in
part, this Plan or the Trust. The Committee shall have the sole responsibility
for the administration of this Plan, which responsibility is specifically
described in this Plan and the Trust. The Committee shall have the sole
responsibility
X-3
<PAGE> 46
for selecting an entity to hold and manage the assets in the Plan and for
selecting a guaranteed investment contract(s) to be acquired by the Trustee. The
Trustee shall have the sole responsibility for the administration of the Trust
Fund and the management of the assets held under the Trust, except when an
Investment Manager has been appointed by the Committee, all as specifically
provided in the Trust. Each fiduciary shall warrant that any directions given,
information furnished, or action taken by it shall be in accordance with the
provisions of the Plan or the Trust Agreement, as the case may be, authorizing
or providing for such direction, information or action. Furthermore, each
fiduciary may rely upon any such direction, information or action of another
fiduciary as being proper under this Plan or the Trust, and is not required
under this Plan or the Trust Agreement to inquire into the propriety of any such
direction, information or action. It is intended under this Plan and the Trust
Agreement that each fiduciary shall be responsible for the proper exercise of
its own powers, duties, responsibilities and obligations under this Plan and the
Trust and shall not be responsible for any act or failure to act of another
fiduciary. No fiduciary guarantees the Trust Fund in any manner against
investment loss or depreciation in asset value.
10.6 PRESENTING CLAIMS FOR BENEFIT: Any Member or any beneficiary claiming
under a deceased Member, may submit written application to the Committee for the
payment of any benefit asserted to be due him under the Plan. Such application
shall set forth the nature of the claim and such other information as the
Committee may reasonably request. Promptly upon the receipt of any application
required by this Section 10.6, the Committee shall determine whether or not the
Member or beneficiary involved is entitled to a benefit hereunder and, if so,
the amount thereof and shall notify the claimant of its findings.
If a claim is wholly or partially denied, the Committee shall so notify
the claimant within 90 days after receipt of the claim by the Committee, unless
special circumstances require an extension of time for processing the claim. If
such an extension of time for processing is required, written notice of the
extension shall be furnished to the claimant prior to the end of the initial
90-day period. In no event shall such extension exceed a period of 90 days from
the end of such initial period. The extension notice shall indicate the special
circumstances requiring an extension of time and the date by which the Committee
expects to render its final decision. Notice of the Committee's decision to deny
a claim in whole or in part shall be set forth in a manner calculated to be
understood by the claimant and shall contain the following:
(a) the specific reason or reasons for the denial,
(b) specific reference to the pertinent Plan provisions on
which the denial is based,
(c) a description of any additional material or information
necessary for the claimant to perfect the claim and an explanation of
why such material or information is necessary, and
(d) an explanation of the claims review procedure set forth in
Section 10.7 hereof.
X-4
<PAGE> 47
If notice of denial is not furnished, and if the claim is not granted
within the period of time set forth above, the claim shall be deemed denied for
purposes of proceeding to the review stage described in Section 10.7.
10.7 CLAIM REVIEW PROCEDURE: If an application filed by a Member or
beneficiary under Section 10.6 above shall result in a denial by the Committee
of the benefit applied for, either in whole or in part, such applicant shall
have the right, to be exercised by written application filed with the Committee
within 60 days after receipt of notice, of the denial of his application or, if
no such notice has been given, within 60 days after the application is deemed
denied under Section 10.6 to request the review of his application and of his
entitlement to the benefit applied for. Such request for review may contain such
additional information and comments as the applicant may wish to present. Within
60 days after receipt of any such request for review, the Committee shall
reconsider the application for the benefit in light of such additional
information and comments as the applicant may have presented, and if the
applicant shall have so requested, shall afford the applicant or his designated
representative a hearing before the Committee. The Committee shall also permit
the applicant or his designated representative to review pertinent documents in
its possession, including copies of the plan document and information provided
by the Company relating to the applicant's entitlement to such benefit. The
Committee shall make a final determination with respect to the applicant's
application for review as soon as practicable, and in any event not later than
60 days after receipt of the aforesaid request for review, except that under
special circumstances, such as the necessity for holding a hearing, such 60-day
period may be extended to the extent necessary, but in no event beyond the
expiration of 120 days after receipt by the Committee of such request for
review. If such an extension of time for review is required because of special
circumstances, written notice of the extension shall be furnished to the
applicant prior to the commencement of the extension. Notice of such final
determination of the Committee shall be furnished to the applicant, in writing,
in a manner calculated to be understood by him, and shall set forth the specific
reasons for the decision and specific references to the pertinent provisions of
the Plan upon which the decision is based. If the decision on review is not
furnished within the time period set forth above, the claim shall be deemed
denied on review.
10.8 DISPUTED BENEFIT: If any dispute shall arise between a Member or other
person claiming under a Member and the Committee after the review of a claim for
benefits, or in the event any dispute shall develop as to the person to whom the
payment of any benefit under the Plan shall be made, the Trustee may withhold
the payment of all or any part of the benefits payable hereunder to the Member
or other person claiming under the Member until such dispute has been resolved
by a court of competent jurisdiction or settled by the parties involved.
10.9 UNCLAIMED BENEFIT: If at, after, or during the time when a benefit
hereunder is payable to any Member, beneficiary or other distributee, the
Committee, upon request of the Trustee, or at its own instance, shall mail by
registered or certified mail to such Member, beneficiary or distributee, at his
last known address a written demand for his then address or for satisfactory
evidence of his continued life, or both, and if such Member, beneficiary or
distributee shall fail to furnish the same to the Committee within two years
from the mailing of such demand, then the Committee may, in
X-5
<PAGE> 48
its sole discretion, determine that such Member, beneficiary or other
distributee has forfeited his right to such benefit and may declare such
benefit, or any unpaid portion thereof, terminated as if the death of the
distributee (with no surviving beneficiary) had occurred on the date of the last
payment made thereon, or on the date such Member, beneficiary or distributee
first became entitled to receive benefit payments, whichever is later; provided,
however, that such forfeited benefit shall be reinstated if a claim for the same
is made by the Member, beneficiary or other distributee at any time thereafter.
Reinstatement shall be made by Company contributions or forfeitures, if any.
X-6
<PAGE> 49
ARTICLE XI
TRUST
11.1 ESTABLISHMENT: A Trust Fund shall be established, operated and
maintained exclusively for the collective investment and reinvestment of moneys
received from Members and Employers, in accordance with the investment
directions of Members, and the Trust Fund shall be under the exclusive
management and control of the Trustee, except when and for the specific purposes
that an Investment Manager has been properly appointed and is acting pursuant to
direction of the Committee.
11.2 EXCLUSIVE INVESTMENTS: The Trustee shall invest moneys in the Trust
Fund exclusively in the investments funds provided for under the Plan.
11.3 BENEFICIAL INTERESTS: Each Member shall have a beneficial interest in
the Trust Fund. No Member shall have priority or preference over any other
Member as to any assets of the Plan.
11.4 SEPARATE ACCOUNTS: The Committee shall maintain separate accounts for
each Member to reflect each Member's interest in the Trust Fund. Each Member
shall have an Employer Contribution Account, a Savings Contribution Account, a
Salary Deferral Contribution Account and/or a Rollover Account.
11.5 COMPANY STOCK: Up to 100% of the Trust may be invested in Company
Stock, subject to any investment limits in Section VII.
XI-1
<PAGE> 50
ARTICLE XII
TERMINATION, AMENDMENT AND MODIFICATION OF THE PLAN
12.1 POWERS RESERVED: The Corporation, by action of its Board of Directors,
may terminate the Plan in its entirety, or as to any Employer at any time, or
may at any time, or from time to time, amend or modify it, except that no
amendment or modification shall reduce (directly or indirectly) an accrued
benefit, eliminate an optional form of benefit (except as otherwise permitted by
regulations) or adversely change the vesting schedule with respect to any
Employee who is credited with three or more years of service. In addition the
Committee may amend the Plan, subject to the foregoing limitations, provided
that any amendment by the Committee may not materially increase the
Corporation's obligations under the Plan. Any such termination, amendment or
modification shall be effective at such date as the Corporation may determine.
An amendment or modification to the Plan may be effective as to all Companies or
as to any one of them, and their respective employees. An amendment or
modification which increases the duties of the Trustee may be made only with the
consent of the Trustee. An amendment or modification may affect Members in the
Plan at the time thereof, as well as future Members, but may not diminish the
account of any Member as of the effective date of amendment or modification
unless required by the Internal Revenue Service in order for the plan to
continue to be a qualified plan under Code Section 401.
12.2 EFFECT OF TERMINATION: Upon any total or partial termination of the
Plan or upon discontinuance of contributions by any Employer, each affected
Member, as to whom the Plan is terminated, or as to whom Employer Contributions
have been discontinued, shall receive a fully vested interest in his Accounts.
Upon a termination of the Plan, distribution shall be made only in accordance
with the modes of distributions provided for under the Plan and subject to their
requirements; provided, however, written consent with respect to accounts
greater than $5,000 shall not be required if the Corporation and the Affiliated
Companies do not maintain any other defined contribution plan.
12.3 MERGER OF PLAN WITH ANOTHER PLAN: In the event of any merger or
consolidation of the Plan with, or transfer in whole or in part of the assets
and liabilities of the Trust Fund to another trust fund held under any other
plan of deferred compensation maintained or to be established for the benefit of
all or some of the Members of this Plan, the assets of the Trust Fund
attributable to such Members shall be transferred to the other trust fund only
if:
(a) Each Member would (if either this Plan or the other plan
then terminated) receive a benefit immediately after the merger,
consolidation or transfer which is equal to or greater than the benefit
he would have been entitled to receive immediately before the merger,
consolidation or transfer (if this Plan had then terminated);
(b) Resolutions of the Board of Directors of the Employer
under this Plan, or of any new or successor employer of the affected
Members, shall authorize such transfer of assets; and, in the case of
the new or successor employer of the affected Members, its
XII-1
<PAGE> 51
resolutions shall include an assumption of liabilities with respect to
such Member's inclusion in the new employer's Plan; and
(c) Such other plan and trust are qualified under Code
Sections 401(a) and 501(a).
XII-2
<PAGE> 52
ARTICLE XIII
EXPENSES
13.1 EXPENSES: Unless paid by the Plan, all costs and expenses incurred in
the administration hereof, including the expenses of the Committee, the fees and
expenses of the Trustee, the fees of counsel, and other administrative expenses
shall be paid by the Plan, unless the Employers voluntarily pay any of such
expenses, in which event they shall be ratably shared by the several Employers.
13.2 TAXES: Taxes, if any, on any assets held hereunder by the Trustee, or
upon income therefrom, which are payable by the Trustee, shall be charged
against such assets or income and allocated as the Trustee and the Committee
shall determine.
XIII-1
<PAGE> 53
ARTICLE XIV
MISCELLANEOUS PROVISIONS
14.1 TERMS OF EMPLOYMENT: The adoption and maintenance of the provisions of
this Plan shall not be deemed to constitute a contract between any Employer and
Employee, or to be a consideration for, or an inducement or condition of, the
employment of any person. Nothing herein contained shall be deemed to give to
any Member the right to be retained in the employ of an Employer or to interfere
with the right of an Employer to discharge a Member at any time, nor shall it be
deemed to give to an Employer the right to require any Member to remain in its
employ, nor shall it interfere with any Member's right to terminate his
employment at any time.
14.2 CONTROLLING LAWS; GOVERNMENT REGULATIONS: Except to the extent
preempted by applicable federal law, this Plan shall be construed, regulated and
administered under the laws of the State of Texas. The Plan, and the purchase
and sale of securities pursuant thereto, and the obligations of the Trustee
thereunder to purchase or sell securities, shall be subject to all applicable
laws, rules and regulations, and to such approvals by any governmental agencies
or national securities exchanges as may be required.
14.3 INVALIDITY OF PARTICULAR PROVISIONS: In the event any provision of this
Plan shall be held illegal or invalid for any reason, said illegality or
invalidity shall not affect the remaining provisions of this Plan but shall be
fully severable, and this Plan shall be construed and enforced as if said
illegal or invalid provisions had never been inserted therein.
14.4 NON-ALIENABILITY OF RIGHTS OF MEMBERS: No interest, right or claim in
or to any part of the Trust Fund or any payment therefrom shall be assignable,
transferable or subject to sale, mortgage, pledge, hypothecation, commutation,
anticipation, garnishment, attachment, execution or levy of any kind, and the
Trustee shall not recognize any attempt to assign, transfer, sell, mortgage,
pledge, hypothecate, commute or anticipate the same. The foregoing shall also
apply to the creation, assignment, or recognition of a right to any benefit
payable with respect to a Member pursuant to a domestic relations order, unless
such order is determined to be a qualified domestic relations order ("QDRO"), as
defined in Code Section 414(p); provided, however, to the extent directed or
authorized by a QDRO, the Plan may make a distribution prior to a Member's
"earliest retirement age," as defined in Section 414(p) of the Code.
14.5 PAYMENTS IN SATISFACTION OF CLAIMS OF MEMBERS: Any payment or
distribution to any Member or his legal representative or any beneficiary in
accordance with the provisions of this Plan shall be in full satisfaction of all
claims under the Plan against the Trust Fund, the Trustee and the Employer. The
Trustee may require that any distributee execute and deliver to the Trustee a
receipt and a full and complete release as a condition precedent to any payment
or distribution under the Plan.
14.6 PAYMENTS DUE MINORS AND INCOMPETENTS: If the Committee determines that
any person to whom a payment is due hereunder is a minor or is incompetent by
reason of physical or mental
XIV-1
<PAGE> 54
disability, the Committee shall have power to cause the payment becoming due
such person to be made to another for the benefit of such minor or incompetent,
without the Committee or the Trustee being responsible to see to the application
of such payment. Payment made pursuant to such power shall operate as a complete
discharge of the Committee, the Trustee and the Employer.
14.7 ACCEPTANCE OF TERMS AND CONDITIONS OF PLAN BY MEMBERS: Each Member, by
making application to become a Member under this Plan, or by the execution of
any form authorized under the terms of this Plan for himself, his heirs,
executors, administrators, legal representatives and assigns, approves and
agrees to be bound by the provisions of this Plan and the Trust and any
subsequent amendments thereto, and all actions of the Committee and the Trustee
hereunder.
14.8 IMPOSSIBILITY OF DIVERSION OF TRUST FUND: Notwithstanding any provision
herein to the contrary, no part of the corpus or the income of the Trust Fund
shall ever be used for, or diverted to, purposes other than for the exclusive
benefit of the Members or their beneficiaries or for the payment of expenses of
the Plan. Except as otherwise provided in Section 15.9, no part of the Trust
Fund shall ever directly or indirectly revert to the Employer.
14.9 REFUNDS TO EMPLOYER: Once contributions are made to the Plan by the
Employer on behalf of the Members, they are not refundable to the Employer
unless a contribution:
(a) was made by mistake of fact; or
(b) was made conditioned upon the contribution being allowed
as a deduction and such deduction was disallowed.
Any contribution made by the Employer during any Plan Year in excess of the
amount deductible or any contribution attributable to a good faith mistake of
fact shall be refunded to the Employer. The amount which may be returned to the
Employer is the excess of the amount contributed over the amount that would have
been contributed had there not occurred a mistake of fact or the excess of the
amount contributed over the amount deductible, as applicable. A contribution
made by reason of a mistake of fact may be refunded only within one year
following the date of payment. Any contribution to be refunded because it was
not deductible under Code Section 404 may be refunded only within one year
following the date the deduction was disallowed. Earnings attributable to any
such excess contribution may not be withdrawn, but losses attributable thereto
must reduce the amount to be returned. In no event may a refund be due which
would cause the Account balance of any Member to be reduced to less than the
Member's Account balance would have been had the mistaken amount, or the amount
determined to be nondeductible, not been contributed.
XIV-2
<PAGE> 55
ARTICLE XV
AFFILIATED COMPANIES
15.1 ELIGIBILITY AND ADOPTION: Any Affiliated Company approved by the Board
of Directors may participate as an Employer in the Plan upon the following
conditions:
(a) Such Affiliated Company shall make, execute and deliver
such instruments and take such other action as the Corporation or the
Committee shall deem necessary or desirable.
(b) Such Affiliated Company shall appoint the Corporation as
its agent to act for it in all transactions in which the Corporation
believes such agency will facilitate the administration of the Plan.
XV-1
<PAGE> 56
ARTICLE XVI
TOP-HEAVY PLAN REQUIREMENTS
16.1 GENERAL RULE: For any Plan Year for which this Plan is a Top-Heavy
Plan, as defined in Section 16.6, and despite any other provisions of this Plan
to the contrary, this Plan shall be subject to the provisions of this Article
XVI.
16.2 VESTING PROVISIONS: Each Member who has completed an Hour of Service
after the Plan becomes top-heavy shall be immediately 100% vested in his account
under this Plan.
16.3 MINIMUM CONTRIBUTION PROVISIONS: Each Member who (i) is a Non-Key
Employee, and (ii) is employed on the last day of the Plan Year (regardless of
whether the Member has completed 1,000 Hours of Service during the Plan Year,
made a required contribution that year, or his level of compensation), will be
entitled to have contributions and forfeitures allocated to his account of not
less than 3% (the "Minimum Contribution Percentage") of the Member's
Compensation. This Minimum Contribution Percentage will be reduced for any Plan
Year to the percentage at which contributions (including forfeitures) are made
or are required to be made under the Plan for the Plan Year for the Key Employee
for whom such percentage is the highest for such Plan Year. If the Member also
participates in a defined benefit plan of the Employer that is top heavy, he
shall receive the minimum under such defined benefit plan rather than this Plan.
Contributions considered under the first paragraph of this Section 16.3
will include Employer contributions under this Plan and under all other defined
contribution plans required to be included in an Aggregation Group, but will not
include Employer Contributions under any plan required to be included in such
Aggregation Group if the plan enables a defined benefit plan required to be
included in such group to meet the requirements of the Code prohibiting
discrimination as to contributions in favor of employees who are officers,
shareholders, or the highly compensated or prescribing the minimum participation
standards. If the highest rate allocated to a Key Employee for a year in which
the plan is top-heavy is less than 3%, amounts contributed as a result of a
salary reduction agreement must be included in determining contributions made on
behalf of Key Employees.
Contributions considered under this Section will not include any
contributions under the Social Security Act or any other federal or state law.
16.4 LIMITATION ON CONTRIBUTIONS: In the event that the Company, other
Employer or an Affiliated Company (hereinafter in this Article collectively
referred to as a "Considered Company") also maintains a defined benefit plan
providing benefits on behalf of Members in this Plan, one of the two following
provisions will apply:
(a) If, for the Plan Year, this would not be a Top-Heavy Plan
if "90%" were substituted for "60%", in Section 16.6, then the
percentage of 3% used in Section 16.3 is changed to 4%.
XVI-1
<PAGE> 57
(b) If, for the Plan Year, this Plan would continue to be a
Top-Heavy Plan if "90%" were substituted for "60%", in Section 16.6,
then the denominator of both the defined contribution plan fraction and
the defined benefit plan fraction will be calculated as set forth in
Section 4.11 for the limitation year ending in such Plan Year by
substituting "1.0" for "1.25" in each place such figure appears. This
subsection (b) will not apply for such Plan Year with respect to any
individual for whom there are no (i) Employer Contributions,
forfeitures or voluntary nondeductible contributions allocated to such
individual, or (ii) accruals earned under the defined benefit plan.
16.5 UNIFORM ACCRUAL: For Plan Years beginning after December 31, 1986, a
uniform benefit accrual rate must be used in determining whether a plan is
top-heavy or super top-heavy. If all of the employer's plans accrue benefits at
the same rate, that accrual rate is to be used to determine if its plans are
top-heavy or super top-heavy. If no single accrual rate is used uniformly by all
of the Employer's plans, the slowest accrual rate permitted under the fractional
method must be used to determine the accrued benefit for Non-Key Employees.
16.6 DETERMINATION OF TOP-HEAVY STATUS: The Plan will be a Top-Heavy Plan
for any Plan Year if, as of the Determination Date, the aggregate of the
accounts under the Plan for Members (including former Members) who are Key
Employees exceeds 60% of the aggregate of the accounts of all Members, excluding
former Key Employees, or if this Plan is required to be in an Aggregation Group
in any such Plan Year in which such Group is a Top-Heavy Group. In determining
Top-Heavy status, if an individual has not performed any services for any
Affiliated Company at any time during the five-year period ending on the
Determination Date, any accrued benefit for such individual and the aggregate
accounts of such individual shall not be taken into account.
In determining whether this Plan constitutes a Top-Heavy Plan, the
Committee (or its agent) will make the following adjustments:
(a) When more than one plan is aggregated, the Committee shall
determine separately for each plan as of each plan's Determination Date
the present value of the accrued benefits (for this purpose using the
actuarial assumptions set forth in the applicable plan) or account
balance. The results shall then be aggregated by adding the results of
each plan as of the Determination Dates for such plans that fall within
the same calendar year.
(b) In determining the present value of the cumulative accrued
benefit or the amount of the account of any Employee, such present
value or account will include the amount in dollar value of the
aggregate distributions made to such employee under the applicable plan
during the five-year period ending on the Determination Date unless
reflected in the value of the accrued benefit or account balance as of
the most recent Valuation Date. The amounts will include distributions
to employees representing the entire amount credited to their accounts
under the applicable plan.
XVI-2
<PAGE> 58
(c) Further, in making such determination, such present value
or such account shall include any rollover contribution (or similar
transfer), as follows:
(1) If the rollover contribution (or similar
transfer) is initiated by the Employee and made to or from a
plan maintained by another Affiliated Company, the plan
providing the distribution shall include such distribution in
the present value or such account; the plan accepting the
distribution shall not include such distribution in the
present value or such account unless the plan accepted it
before December 31, 1983.
(2) If the rollover contribution (or similar
transfer) is not initiated by the employee or made from a plan
maintained by another Affiliated Company, the plan accepting
the distribution shall include such distribution in the
present value or such account, whether the plan accepted the
distribution before or after December 31, 1983; the plan
making the distribution shall not include the distribution in
the present value or such account.
(d) In any case where an individual is a Non-Key Employee with
respect to an applicable plan, but was a Key Employee with respect to
such plan for any prior Plan Year, any accrued benefit and any account
of such Employee will be altogether disregarded. For this purpose, to
the extent that a Key Employee is deemed to be a Key Employee if he or
she met the definition of Key Employee within any of the four (4)
preceding Plan Years, this provision will apply following the end of
such period of time.
IN WITNESS WHEREOF, the Corporation has caused these presents to be
executed by its authorized individual, in a number of copies, all of which shall
constitute but one and the same instrument, which may be evidenced by any such
executed copy hereof, this June __, 1998, effective for all purposes as provided
above.
PIONEER CHLOR ALKALI COMPANY, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
XVI-3
<PAGE> 59
ATTACHMENT A
PIONEER COMPANIES SAVINGS PLAN
FOR TACOMA BARGAINING UNIT EMPLOYEES
The following investment funds shall be offered under the Plan:
AIM Constellation Account
Founders Balanced Account
Founders Growth Account
Fidelity Advisor Growth Opportunities Account
Invesco Dynamics Account
Janus Worldwide Account
PBGH Growth Account
American Century - Twentieth Century Ultra Account
Templeton Foreign Account
Templeton Growth Account
Warburg Pincus Advisor Growth & Income Account
Warburg Pincus Advisor International Equity Account
Neuberger & Berman Guardian Account
Large Company Stock Index Fund (Cigna Charter Fund)
Cigna Lifetime Funds
Invesco Total Return Account
Guaranteed Income Fund
Company Stock Fund
<PAGE> 1
EXHIBIT 4.8
AMENDMENT TO
KEMWATER NORTH AMERICA SAVINGS PLAN
WHEREAS, Connecticut General Life Insurance Company (hereinafter referred to as
the "Insurance Company") sponsors a prototype plan known as the Connecticut
General Life Insurance Company Defined Contribution Basic Plan Document Number
03 (hereinafter referred to as the "Plan") for the benefit of the eligible
Employees and their Beneficiaries; and
WHEREAS, Kemwater North America (hereinafter referred to as the "Employer")
amended and restated the Kemwater North America Savings Plan through the
adoption of Adoption Agreement Number 001-03 (hereafter referred to as
the "Adoption Agreement") effective January 1, 1992 for the benefit of its
eligible Employees and their Beneficiaries; and
WHEREAS, the Employer reserved the right to amend the elections in the Adoption
Agreement in Section 7B.1 of the Plan; and
WHEREAS, the Employer wishes to amend the Adoption Agreement to change the
address of the Employer;
NOW THEREFORE, effective July 1, 1997, the Adoption Agreement is hereby amended
as follows:
The Face page of the Adoption Agreement is deleted in its entirety and replaced
with the following:
"NON-STANDARDIZED PROFIT SHARING/THRIFT PLAN WITH 401(k) Feature
Adoption Agreement Number 001-03
This Adoption Agreement, when executed by the Employer and accepted by the Plan
Administrator, and the Trustee, if applicable, and accepted by Connecticut
General Life Insurance Company, establishes the Employer's Plan and Trust, if
applicable, for the benefit of its eligible Employees and their Beneficiaries.
The terms of the Connecticut General Life Insurance Company Defined
Contribution Plan are expressly incorporated therein and shall form a part
hereof as fully as if set forth herein except that if more than one election is
provided, only that election made by the Employer shall be so incorporated. The
terms of the Plan so incorporated together with the terms of this Adoption
Agreement shall constitute the sole terms of the Employer's Plan and Trust, if
applicable, and no further trust instrument or other instrument of any nature
whatsoever shall be required. The Employer's participation under the Plan shall
be subject to all the terms set forth therein and in this Adoption Agreement.
- -- Note: Section 414(d) governmental plans and section 414(e) nonelecting
church plans that do not wish to provide ERISA-required benefits should not
adopt this document.
================================================================================
Plan Document GENERAL INFORMATION
Section
================================================================================
Legal Name of Employer: Kemwater North America
- --------------------------------------------------------------------------------
Address: 2185 N. California Blvd., Suite 500
City: Walnut Creek State: CA Zip: 94596
- --------------------------------------------------------------------------------
Plan Name: Kemwater North America Savings Plan
================================================================================
-1-
<PAGE> 2
- --------------------------------------------------------------------------------
Plan Number: 001
-- To be assigned by the Employer. For example: 001, 002,
and so on.
- --------------------------------------------------------------------------------
Employer's EIN: 95-2375683
- --------------------------------------------------------------------------------
Classification of Business:
[X] C Corporation [ ] S Corporation [ ] Partnership
[ ] Sole Proprietorship [ ] Tax-Exempt/Nonprofit Organization
[ ] Other:
- --------------------------------------------------------------------------------
================================================================================
Plan Document GENERAL INFORMATION
Section
================================================================================
Employer Tax Status:
Tax Year Ends (MM/DD): 12/31
Tax Basis: [ ] Cash [X] Accrual
- --------------------------------------------------------------------------------
1.20 Effective Date
The adoption of the CONNECTICUT GENERAL LIFE INSURANCE COMPANY
Standardized Profit Sharing/Thrift Plan with 401(k) Feature
shall:
[ ] A. Establish a new Plan effective as of (MM/DD/YY): .
[X] B. Constitute an amendment and restatement in its entirety
of a previously established Qualified Plan of the
Employer which was effective 01/01/92 (hereinafter
called the "Effective Date"). The effective date of this
amendment and restatement is 07/01/97.
- --------------------------------------------------------------------------------
Merger Data
This Plan includes funds from a prior or coincidental
merger of a:
[ ] A. Money Purchase Plan
[ ] B. Target Benefit Plan
[X] C. Not Applicable
- --------------------------------------------------------------------------------
Sponsoring Organization:
Connecticut General Life Insurance Company
P.O. Box 2975
Hartford, CT 06104
(860) 725-2274
- --------------------------------------------------------------------------------
IN WITNESS WHEREOF, the Employer and the Administrator have hereunto affixed
their signatures.
Witness: /s/ STACEY LIL By: /s/ J. B. BRADLEY
Title: Vice President Human Resources
Executed at Houston, TX on 12-31 1997.
Kemwater North America
-2-
<PAGE> 3
Witness:
----------------------- ------------------------
Title
Accepted this 31 day of December 1997.
Witness: /s/ ILLEGIBLE By (Plan Administrator): /s/ ILLEGIBLE
--------------------- -------------
Additional Adopting Employer's Exact Name:
------------------
Witness: By:
-------------------- -------------------------------------
Title:
----------------------------------------
Additional Adopting Employer's Exact Name:
-----------------
Witness: By:
-------------------- -------------------------------------
Title:
----------------------------------------
Additional Adopting Employer's Exact Name:
-----------------
Witness: By:
-------------------- -------------------------------------
Title:
----------------------------------------
IMPORTANT NOTE
Neither Connecticut General Life Insurance Company nor any of its employees can
provide you with legal advice in connection with the execution of this
document. Prior to execution of this document, you should consult your attorney
on whether this document is appropirate for you.
-3-
<PAGE> 4
AMENDMENT TO
KEMWATER NORTH AMERICA SAVINGS PLAN
WHEREAS, Kemwater North America (hereinafter referred to as the "Employer")
established the Kemwater North America Savings Plan (hereinafter referred to as
the "Plan") effective January 1, 1992, through adoption of the Connecticut
General Life Insurance Company Group Pension Prototype Plan Basic Plan Document
Number 02, for the benefit of its eligible Employees and their Beneficiaries;
and
WHEREAS, the Employer reserved the right to amend the Plan under the terms
thereof; and
WHEREAS, the Employer desires to amend and restate the Plan through adoption of
the Connecticut General Life Insurance Company Defined Contributions Plan Basic
Plan Document Number 03; and
NOW THEREFORE, the Plan is amended and restated in its entirety, effective
January 1, 1996, as follows:
1. The terms of the Plan as heretofore set forth shall no longer apply with
respect to Participants under the Plan who have not terminated employment
(including terminations on account of Retirement, death or Disability);
and the terms of the Plan with respect to such Participants shall
henceforth be as set forth in the restated Kemwater North America Savings
Plan, a copy of which is attached to and forms a part of this amendment.
2. The Plan, as amended and restated, shall represent a continuation of the
prior Plan as heretofore set forth and shall not abridge or curtail any
rights accorded to Participants under said prior instrument.
IN WITNESS WHEREOF, the Employer and the Administrator have hereunto affixed
their signatures.
Executed at Houston, TX on December 31, 1997
KEMWATER NORTH AMERICA
/s/ [ILLEGIBLE] /s/ J.B. BRADLEY
- ------------------------------------ ------------------------------------
Witness Title Vice President Human Resources
Accepted this 31 day of December, 1997.
/s/ [ILLEGIBLE] By /s/ [ILLEGIBLE]
- ------------------------------------ ------------------------------------
Witness Administrator
<PAGE> 5
IMPORTANT NOTE
Neither Connecticut General Life Insurance Company nor any of its employees can
provide you with legal advice in connection with the execution of this
document. Prior to execution of this document, you should consult your attorney
on whether this document is appropriate for you.
<PAGE> 6
Non-Standardized Profit Sharing/Thrift Plan With 401(k) Feature
Adoption Agreement Number 001-03
This Adoption Agreement, when executed by the Employer and accepted by the Plan
Administrator, and the Trustee, if applicable, and accepted by Connecticut
General Life Insurance Company, establishes the Employer's Plan and Trust, if
applicable, for the benefit of its eligible Employees and their Beneficiaries.
The terms of the Connecticut General Life Insurance Company Defined
Contribution Plan are expressly incorporated therein and shall form a part
hereof as fully as if set forth herein except that if more than one election is
provided, only that election made by the Employer shall be so incorporated.
The terms of the Plan so incorporated together with the terms of this Adoption
Agreement shall constitute the sole terms of the Employer's Plan and Trust, if
applicable, and no further trust instrument or other instrument of any nature
whatsoever shall be required. The Employer's participation under the Plan shall
be subject to all the terms set forth therein and in this Adoption Agreement.
- -- Note: Section 414(d) governmental plans and section 414(e) nonelecting
church plans that do not wish to provide ERISA-required benefits should not
adopt this document.
================================================================================
Plan Document GENERAL INFORMATION
Section
================================================================================
Legal Name of Employer: Kemwater North America
- --------------------------------------------------------------------------------
Address: 2151 Wilbur Avenue
City: Antioch State: CA Zip: 94509
- --------------------------------------------------------------------------------
Plan Name: Kemwater North America Savings Plan
- --------------------------------------------------------------------------------
Plan Number: 001
-- To be assigned by the Employer. For example, 001, 002 and so
on.
- --------------------------------------------------------------------------------
Employer's EIN: 95-2375683
- --------------------------------------------------------------------------------
Classification of Business:
[X] C Corporation [ ] S Corporation [ ] Partnership
[ ] Sole Proprietorship [ ] Tax-Exempt/Nonprofit Organization
[ ] Other:
- --------------------------------------------------------------------------------
<PAGE> 7
================================================================================
Plan Document GENERAL INFORMATION
Section
================================================================================
Employer Tax Status:
Tax Year Ends (MM/DD): 12/31
Tax Basis: [ ] Cash [X] Accrual
- --------------------------------------------------------------------------------
1.20 Effective Date
The adoption of the CONNECTICUT GENERAL LIFE INSURANCE COMPANY
Non-Standardized Profit Sharing/Thrift Plan with 401(k) Feature
shall:
[ ] A. Establish a new Plan effective as of (MM/DD/YY): ____.
[X] B. Constitute an amendment and restatement in its entirety
of a previously established Qualified Plan of the
Employer which was effective 01/01/92 (hereinafter
called the "Effective Date"). The effective date of this
amendment and restatement is 01/01/96.
- --------------------------------------------------------------------------------
Merger Data
This Plan includes funds from a prior or coincidental merger
of a:
[ ] A. Money Purchase Plan
[ ] B. Target Benefit Plan
[X] C. Not Applicable
- --------------------------------------------------------------------------------
Sponsoring Organization:
Connecticut General Life Insurance Company
P.O. Box 2975
Hartford, CT 06104
(860) 725-2274
- --------------------------------------------------------------------------------
-2-
<PAGE> 8
TABLE OF CONTENTS
ARTICLE PAGE
I. Nontrusteed, Trust, and Trustee ..................................... 4
II. Plan Administrator .................................................. 4
III. Plan Year ........................................................... 5
IV. Compensation ........................................................ 6
V. Highly Compensated Employee ......................................... 7
VI. Service ............................................................. 8
VII. Eligibility Requirements ............................................10
VIII. Entry Date ..........................................................13
IX. Vesting .............................................................15
X. Contributions .......................................................18
XI. Contribution Period .................................................28
XII. Allocation of Contributions .........................................29
XIII. Limitations on Allocations ..........................................31
XIV. Investment of Participant's Account .................................32
XV. Life Insurance ......................................................32
XVI. Employer Stock ......................................................33
XVII. Withdrawals Preceding Termination ...................................34
XVIII. Loans to Participants, Beneficiaries and Parties-in-Interest ........38
XIX. Retirement and Disability ...........................................39
XX. Distribution of Benefits ............................................40
XXI. Qualified Preretirement Survivor Annuity ............................41
XXII. Amendment of the Plan ...............................................41
XXIII. Top-Heavy Provisions ................................................42
XXIV. Other Adopting Employer .............................................44
-3-
<PAGE> 9
================================================================================
Plan Document I. NONTRUSTEED, TRUST, AND TRUSTEE.
Section
================================================================================
- -- The Plan must have a Trustee if the Employer has elected Employer Stock,
Loans, investment in Life Insurance, and/or any investment other than through a
contract with Connecticut General Life Insurance Company.
- -- If the plan is trusteed, the Employer must apply for a Trust Tax
Indentifcation Number, unless the Trust already has obtained one, even if
CG Trust Company has been appointed as the Plan's Trustee.
- --------------------------------------------------------------------------------
The Plan is:
1.39 [ ] A. Nontrusteed.
- --------------------------------------------------------------------------------
1.73, 1.74 [ ] B. Trusteed and Trustees are:
Trustee(s)
Name(s):
Address:
City: State: Zip:
Trust EIN:
- --------------------------------------------------------------------------------
1.73, 1.74 [X] C. Trusteed and CG Trust Company has been appointed as the
Plan's Trustee.
Trust
Name: CG Trust Company
Address: 525 West Monroe St., Suite 1800
Chicago, IL 60661-3629
Employer's Trust EIN:
- --------------------------------------------------------------------------------
================================================================================
Plan Document II: PLAN ADMINISTRATOR
Section
================================================================================
1.50 The Plan Administrator is:
Name: Pioneer Benefits Plan Committee
Pioneer Chlor Alkali Company, Inc.
Address: 700 Louisiana Suite 4200
City: Houston State: TX Zip: 77002
- --------------------------------------------------------------------------------
<PAGE> 10
================================================================================
Plan Document II. PLAN YEAR
Section
================================================================================
1.51 A. The Plan Year will mean:
[ ] 1. The 12-consecutive-month period commencing on (MM/DD/YY)
and each anniversary thereof except that the first
plan-year will commence on (MM/DD/YY) .
This election may be made only for new plans.
[X] 2. The 12-consecutive-month period commencing on (MM/DD/YY)
01/01 and each anniversary thereof.
- --------------------------------------------------------------------------------
<PAGE> 11
================================================================================
Plan Document IV. COMPENSATION
Section
================================================================================
-- (i) Election of options 1-6 below does not require a
separate nondiscrimination test.
-- (ii) If option 1, 2, or 3 is elected, you must elect the
same definition of Compensation in Section XIII,
Limitations on Allocations.
-- (iii) Options 1-6 include lump sum amounts and/or cash
bonuses. These amounts are included in compensation
in the year in which paid.
-- (iv) Options 4-9 may not be elected by a plan that uses an
integrated allocation formula.
-- (v) This compensation definition is for purposes of
allocating contributions under the Plan. For
nondiscrimination testing, the Employer may use any
definition of compensation that is based upon Code
section 414(s) or 415(c)(3). Use of options 7, 8, or
9 for nondiscrimination testing requires that the
employer satisfy a separate compensation
nondiscrimination test.
- --------------------------------------------------------------------------------
A. Indicate the number of the Compensation definition that
will be used for allocating each type of contribution.
Elective Deferral Contributions: 3
Matching Contributions: 3
Nonelective Contributions: 3
Employee contributions: 3
1.12 For purposes of allocating contributions, Compensation
means:
1.12(a) 1. Wages, Tips and Other Compensation Box on Form W-2.
1.12(b) 2. Section 3401(a) wages.
1.12(c) 3. 415 safe-harbor compensation.
1.12(d) 4. Modified Wages, Tips, and Other Compensation Box on
Form W-2.
1.12(e) 5. Modified section 3401(a) wages.
1.12(f) 6. Modified 415 safe-harbor compensation.
1.12(g) 7. Regular or base salary or wages.
1.12(h) 8. Regular or base salary or wages plus [ ] overtime
and/or [ ] bonuses.
1.12(i) 9. A "reasonable alternative definition of Compensation,"
as that term is used under Code section 414(s)(3) and
the regulations thereunder.
The definition of Compensation is:
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
-- Lump sum amounts and/or cash bonuses may be
excluded only if specified in this definition. Also
see note (v) above.
- --------------------------------------------------------------------------------
-6-
<PAGE> 12
================================================================================
Plan Document IV. COMPENSATION
Section
================================================================================
1.12 B. Compensation shall be determined over the following
determination period:
[ ] 1. The Plan Year.
[ ] 2. A 12-consecutive-month period beginning on
(MM/DD/ and ending with or within the Plan Year.
For Employees whose date of hire is less than
12 months before the end of the designated
12-month period, Compensation will be determined
over the Plan Year.
[X] 3. The Plan Year. However, for the Plan Year in which
an Employee's participation begins, the applicable
period is the portion of the Plan Year during which
the Employee is eligible to participate in the Plan.
- --------------------------------------------------------------------------------
1.12 C. Compensation shall/shall not include Employer contributions
made pursuant to a salary reduction agreement, which are not
includable in the gross income of the Employee under Code
section 125, 402(e)(3), 402(h)(1)(B) or 403(b).
[X] Shall [ ] Shall Not
- --------------------------------------------------------------------------------
1.12 D. The highest annual Compensation to be used in determining
allocations to a Participant's Account shall be:
$
-- Enter an amount if less than the $150,000 (as indexed)
limitation on compensation.
- --------------------------------------------------------------------------------
================================================================================
Plan Document V. HIGHLY COMPENSATED EMPLOYEE
Section
================================================================================
1.29 A. Highly Compensated Employees shall be determined using:
1.29(a) [X] 1. The Traditional Method.
1.29(b) [ ] 2. The Simplified Method for Employers in more than
one geographical area.
1.29(c) [ ] 3. The alternative Simplified Method.
1.29(d) [ ] 4. The alternative Simplified Method with Snapshot Day
basis .
The Snapshot Day is (fill in).
- --------------------------------------------------------------------------------
<PAGE> 13
================================================================================
Plan Document V. HIGHLY COMPENSATED EMPLOYEE
Section
================================================================================
1.29(a) B. If A.1. or A.2. is chosen above, the Look-Back Year
shall be:
[ ] 1. The 12-month period immediately preceding the
Determination Year.
[X] 2. The calendar year ending with or within the
Determination Year.
-- If B.2. is selected and the Determination Year (Plan Year)
is the calendar year, then the Look-Back Year is the same
12-month period as the Determination Year. This avoids having
to look back at data from a prior year.
-- However, if the Determination Year is not the calendar year,
the Determination Year calculation must be made on the basis of
a lag period (the period running from the end of the Look-Back
Year to the end of the Determination Year), with the applicable
dollar amounts adjusted on a pro rata basis for the number of
months in the lag period.
- --------------------------------------------------------------------------------
================================================================================
Plan Document VI. SERVICE
Section
================================================================================
Check off appropriate basis for determining service.
- --------------------------------------------------------------------------------
2A.3, 2A.9 A. Hours of Service or Elapsed Time
1. Years of Service shall be determined on the following
basis:
a. Eligibility: [ ] Hours of Service [X] Elapsed Time
b. Vesting: [X] Hours of Service [ ] Elapsed Time
c. Allocations of
Contributions: [X] Hours of Service [ ] Elapsed Time
2. If service is based on Hours of Service, Hours shall be
determined on the basis of:
[X] a. Actual hours for which paid or entitled to
payment.
[ ] b. Days Worked (10 Hours of Service).
[ ] c. Weeks Worked (45 Hours of Service).
[ ] d. Semimonthly payroll periods (95 Hours of Service).
[ ] e. Months Worked (190 Hours of Service).
-- For options b, c, d, and e: If the Employee would be
credited with 1 Hour of Service during the period,
the Employee shall be credited with the number of Hours
of Service indicated in parentheses.
- --------------------------------------------------------------------------------
<PAGE> 14
================================================================================
Plan Document VI. SERVICE
Section
================================================================================
B. Service with other employers.
1.24
1. Service with members of the Employer's controlled group of
corporations, affiliated service group, or group of business
under common control ("controlled group").
-- Service for an employer while the employer is part of the
controlled group must be taken into account.
a. Service with a member of the controlled group prior to
it becoming part of the controlled group will be
included for all purposes.
[ ] Yes [X] No
2A.5 2. Service with a predecessor organization.
-- Service with a predecessor organization of the
Employer must be taken into account if the Employer
maintains the Plan of the predecessor organization.
a. Service with a predecessor organization will be
included for all purposes even if the Employer does
not maintain the plan of the predecessor organization.
[ ] Yes [X] No
2A.5 3. Service with the following subsidiary(ies) or affiliated
organization, not related to the Employer under the rules of
Code sections 414(b), (c) or (m), shall be considered
Service for all purposes of this plan:
None
-- Service credited under 1.a, 2.a and 3 must apply to all
similarly situated Employees, must be credited for a
legitimate business reason, and must not be design or
operation discriminate significantly in favor of Highly
Compensated Employees.
- --------------------------------------------------------------------------------
-9-
<PAGE> 15
================================================================================
Plan Document VII. ELIGIBILITY REQUIREMENTS
Section
================================================================================
- -- Check or fill out appropriate requirements for each type of contribution in
the Plan.
- --------------------------------------------------------------------------------
2A.5(a), 2B.1 A. Eligibility Requirements
1. If Employer is a Partnership or Sole Proprietorship:
Self-Employed Individuals are eligible to participate in
the Plan.
[ ] Yes [ ] No
2. Immediate Participation.
-- No age or service requirement.
[ ] Elective Deferral Contributions
[ ] Matching Contributions
[ ] Nonelective Contributions
[ ] Employee Contributions
3. Service Requirement.
-- Not to exceed 1 year if graded vesting; not to exceed 2
years if 100% immediate vesting. Not to exceed 1/2 year if
graded vesting or 1-1/2 years if 100% immediate vesting if
annual Entry Date is chosen in Section VIII "Entry Date."
Not to exceed 1 year for Elective Deferral Contributions.
[X] Elective Deferral Contributions: 1/2 (indicate
number of years)
[X] Matching Contributions: 1/2 (indicate number of
years)
[X] Nonelective Contributions: 1/2 (indicate number of
years)
[X] Employee Contributions: 1/2 (indicate number of
years)
-- Fill in the blank(s) above with the amount of service
required. Any service requirement not in units of whole
years requires service for eligibility to be determined
based on elapsed time (see Section VI.A.1.a).
4. Age Requirement.
-- Not greater than 21 years. If annual entry date is chosen
in Section VIII "Entry Date," not greater than 20-1/2 years.
[X] Elective Deferral Contributions: 18 (indicate
minimum age)
[X] Matching Contributions: 18 (indicate minimum age)
[X] Nonelective Contributions: 18 (indicate minimum
age)
[X] Employee Contributions: 18 (indicate minimum age)
5. Employees who were employed on or before the initial
Effective Date of the Plan or the Effective Date of the
amendment and restatement of the Plan, as indicated on page
2, shall/shall not be immediately eligible without regard to
any Age and/or Service requirements specified in 2 or 3
above.
[ ] Shall [X] Shall Not
- --------------------------------------------------------------------------------
<PAGE> 16
================================================================================
Plan Document VII. ELIGIBILITY REQUIREMENTS
Section
================================================================================
2B.1 B. Job Class Requirements
An Employee must be a member of one or more of the
following selected classifications:
1. No Job Class Requirements:
[ ] Elective Deferral Contributions
[ ] Matching Contributions
[ ] Nonelective Contributions
[ ] Employee Contributions
2. Salaried:
[X] Elective Deferral Contributions
[X] Matching Contributions
[X] Nonelective Contributions
[X] Employee Contributions
3. Hourly:
[X] Elective Deferral Contributions
[X] Matching Contributions
[X] Nonelective Contributions
[X] Employee Contributions
4. Clerical:
[X] Elective Deferral Contributions
[X] Matching Contributions
[X] Nonelective Contributions
[X] Employee Contributions
5. Employees whose employment is governed by a collective
bargaining agreement represented by the following
union: _______________________________________________
[ ] Elective Deferral Contributions
[ ] Matching Contributions
[ ] Nonelective Contributions
[ ] Employee Contributions
6. Other (fill in): _____________________________________
[ ] Elective Deferral Contributions
[ ] Matching Contributions
[ ] Nonelective Contributions
[ ] Employee Contributions
-- "Part-time" Employees may not be excluded.
- --------------------------------------------------------------------------------
-11-
<PAGE> 17
================================================================================
Plan Document VII. ELIGIBILITY REQUIREMENTS
Section
================================================================================
2B.1 C. Additional Requirements
An Employee must be in the following designated
divisions(s) of the Employer:
___________________________________________________________
___________________________________________________________
[ ] Elective Deferral Contributions
[ ] Matching Contributions
[ ] Nonelective Contributions
[ ] Employee Contributions
- --------------------------------------------------------------------------------
2B.1 D. An Employee must not be a member of any one of the
following groups:
1. Union.
-- Employees who are members of a union are defined as:
Employees included in a unit of Employees covered by a
collective bargaining agreement between the employer and
employee representatives, if retirement benefits were the
subject of good faith bargaining and if two percent or less
of the employees of the Employer who are covered pursuant
to that agreement are professional employees as defined in
section 1.410(b)-9 of the regulations. For this purpose,
the term "employee representatives" does not include any
organization more than half of whose members are Employees
who are owners, officers, or executives of the Employer,
unless the collective bargaining agreement provides for
coverage under the Plan.
[X] Elective Deferral Contributions
[X] Matching Contributions
[X] Nonelective Contributions
[X] Employee Contributions
2. Nonresident aliens (within the meaning of Code section
7701(b)(1)(B)) who receive no earned income (within the
meaning of Code section 911(d)(2) from the Employer
that constitutes income from sources within the United
States (within the meaning of Code section 861(a)(3)).
[X] Elective Deferral Contributions
[X] Matching Contributions
[X] Nonelective Contributions
[X] Employee Contributions
- --------------------------------------------------------------------------------
-12-
<PAGE> 18
================================================================================
Plan Document VII. ELIGIBILITY REQUIREMENTS
Section
================================================================================
3. Employees covered by the following designated qualified
employee benefit plans:
_______________________________________________________
_______________________________________________________
[ ] Elective Deferral Contributions
[ ] Matching Contributions
[ ] Nonelective Contributions
[ ] Employee Contributions
- --------------------------------------------------------------------------------
1.15 E. The Plan covers Employees whose conditions of employment
are mandated under the Davis-Bacon Act.
[ ] Yes [X] No
- --------------------------------------------------------------------------------
================================================================================
Plan Document VIII. ENTRY DATE
Section
================================================================================
- -- Check the appropriate requirement for Entry Date.
- --------------------------------------------------------------------------------
1.25 A. Immediately:
[ ] Elective Deferral Contributions
[ ] Matching Contributions
[ ] Nonelective Contributions
[ ] Employee Contributions
- --------------------------------------------------------------------------------
1.25 B. The first day of any month:
[X] Elective Deferral Contributions
[X] Matching Contributions
[X] Nonelective Contributions
[X] Employee Contributions
- --------------------------------------------------------------------------------
1.25 C. Quarterly (that is, three months apart) on each:
(MM/DD ____, or (MM/DD) ____, or
(MM/DD ____, or (MM/DD) ____.
-- Fill in dates.
[ ] Elective Deferral Contributions
[ ] Matching Contributions
[ ] Nonelective Contributions
[ ] Employee Contributions
- --------------------------------------------------------------------------------
-13-
<PAGE> 19
================================================================================
Plan Document VIII. ENTRY DATE
Section
================================================================================
1.25 D. Semiannually (that is, six months apart) on each:
(MM/DD) ____, or (MM/DD) ____.
-- Fill in dates.
[ ] Elective Deferral Contributions
[ ] Matching Contributions
[ ] Nonelective Contributions
[ ] Employee Contributions
- --------------------------------------------------------------------------------
1.25 E. Annually, on each (MM/DD) ____.
-- Fill in date.
[ ] Elective Deferral Contributions
[ ] Matching Contributions
[ ] Nonelective Contributions
[ ] Employee Contributions
- --------------------------------------------------------------------------------
1.25 F. The first day nearest to the date(s) selected in B, C, D or
E above, whether before or after that date, that the
Participant meets the Eligibility Requirements.
[ ] Elective Deferral Contributions
[ ] Matching Contributions
[ ] Nonelective Contributions
[ ] Employee Contributions
-- Allows retroactive entry into the Plan. This may have an
effect on various nondiscrimination tests for the Plan.
- --------------------------------------------------------------------------------
-14-
<PAGE> 20
================================================================================
Plan Document IX. VESTING
Section
================================================================================
1.76 A. Vesting Percentage.
The Vesting Schedule, based on number of Years or Periods
of Service, shall be as indicated below. Indicate the
number of the vesting schedule that applies to any
Nonelective Contributions, Matching Contributions, and
Prior Employer Contributions. The vesting schedules are
depicted in 1 through 8, below.
Nonelective Contributions are subject to vesting
schedule: 8
Matching Contributions are subject to vesting
schedule: 8
Prior Employer Contributions are subject to vesting
schedule:
1. Immediately = 100%
2. 0-3 Years = 0%
3 Years = 100%
3. 1 Year = 20%
2 Years = 40%
3 Years = 60%
4 Years = 80%
5 Years = 100%
4. 0-3 Years = 0%
3 Years = 20%
4 Years = 40%
5 Years = 60%
6 Years = 80%
7 Years = 100%
5. 0-2 Years = 0%
2 Years = 20%
3 Years = 40%
4 Years = 60%
5 Years = 80%
6 Years = 100%
6. 0-5 Years = 0%
5 Years = 100%
7. 1 Year = 25%
2 Years = 50%
3 Years = 75%
4 Years = 100%
- --------------------------------------------------------------------------------
-15-
<PAGE> 21
================================================================================
Plan Document IX. VESTING
Section
================================================================================
8. Other. Must be at least as liberal as #4 or #6 above.
1 Year = 25%
2 Years = 50%
3 Years = 100%
=
=
=
=
- --------------------------------------------------------------------------------
2A.5(b) B. The vesting computation period shall be based on the
Employee's service in the:
[X] Plan Year [ ] Employment year
- --------------------------------------------------------------------------------
2A.7, 2A.10 C. Excluded Years or Periods of Service.
The vesting percentage shall be based on all Years of
Service (i.e., completing 1000 Hours of Service) or Periods
of Service (i.e., Elapsed Time), EXCEPT that the following
shall be excluded:
Years or Periods of Service:
[ ] 1. Prior to the time the Participant attained age 18.
[ ] 2. During which the Employer did not maintain the plan
or predecessor plan.
[ ] 3. During which the Participant elected not to
contribute to a plan which required Employee
Contributions.
[ ] 4. Rule of Parity (Elapsed Time).
-- Rule of Parity (Elapsed Time): In the event a
reemployed Employee has no vested interest in
Employer Contributions at the time the break
occurred, and has since incurred 5 consecutive
1-year Breaks-in-Service, and has a Period of
Severance which equals or exceeds his prior Period
of Service, such prior Service may be disregarded.
[ ] 5. Rule of Parity (Hours of Service).
-- Rule of Parity (Hours of Service): Years of
Service prior to a Break-in-Service may be
disregarded if the participant had no vested
interest in Employer Contributions at the time the
break occurred, and the Participant has since
incurred 5 consecutive 1-year Breaks-in-Service, and
the number of consecutive 1-year Breaks-in-Service
is at least as great as the Years of Service before
the break occurred.
[ ] 6. Prior to any 1-Year Break-in-Service until the
Employee completes a Year of Service following
reemployment.
[X] 7. None of the above.
- --------------------------------------------------------------------------------
-16-
<PAGE> 22
================================================================================
Plan Document IX. VESTING
Section
================================================================================
3D.1, 3D.2, D. Forfeitures.
2A.7, 2A.10
1. Forfeitures will occur:
[ ] a. Immediately.
[ ] (1) Optional Payback Method.
[ ] (2) Required Payback Method.
[X] b. Upon a 1-Year Break-in-Service.
[X] (1) Optional Payback Method.
[ ] (2) Required Payback Method.
2. Forfeitures will be:
[X] a. Used as an Employer Credit.
[ ] b. Reallocated to Participants' Accounts.
[ ] c. Used as an Employer Credit and then, to the extent
any Forfeitures remain, reallocated to
Participants' Accounts.
-- If choice IX.D.2.b or c is selected and the Plan
provides Matching Contributions, the Actual
Contribution Percentage (ACP) Test will be affected.
- --------------------------------------------------------------------------------
-17-
<PAGE> 23
================================================================================
Plan Document X. CONTRIBUTIONS
Section
================================================================================
2C.1(k)(1) A. Elective Deferral Contributions
1. Availability/Amount
[ ] Not Available under the Plan.
[X] Available under the Plan (complete the
following).
Each Participant MAY elect to have his
Compensation actually paid during the Plan Year
reduced by:
[ ] a. %.
[ ] b. up to %.
[X] c. from 1% to 15%.
[ ] d. up to the maximum percentage
allowable, not to exceed the
limits of Code sections 402(g)
and 415.
-- Lump sum amounts and/or cash bonuses must be
subject to the salary deferral election unless
the definition of compensation in Section
IV.A.9 has been elected and these amounts have
been specifically excluded from that
compensation definition. Lump sum amounts and
cash bonuses are deferred upon and tested in
the Plan Year in which paid.
2. Modification
A Participant may change the amount of Elective
Deferral Contributions the Participant makes to the
Plan (complete a and b):
[ ] a. per calendar year (may not be less
frequent than once).
[X] b. As of the following date(s) (MM/DD):
Once every 6 months
- --------------------------------------------------------------------------------
-18-
<PAGE> 24
================================================================================
Plan Document X. CONTRIBUTIONS
Section
================================================================================
B. Required Employee Contributions
2C.1(b) 1. Availability/Amount
[ ] Not Available under the Plan.
[X] Available under the Plan and must be made as a
condition of receiving an Employer Contribution.
-- Required Employee Contributions are NOT AVAILABLE
unless Elective Deferral Contributions are available.
Required Contributions shall be in the amount of:
[ ] a. % of Compensation actually paid during the
Contribution Period.
2C.1(k)(1) [X] b. Not less than 1% nor more than 10% of
Compensation actually paid during the
Contribution Period.
2. Modification
A Participant may suspend Required Employee Contributions
for a minimum period of:
[ ] a. 1 month
[ ] b. 2 months
[X] c. 3 months
-- The suspension period may be of indefinite duration.
A Participant's reentry into the Plan shall be as of the
first Entry Date following the end of the suspension
period.
- --------------------------------------------------------------------------------
-19-
<PAGE> 25
<TABLE>
<S> <C> <C>
==============================================================================================================================
Plan Document X. CONTRIBUTIONS
Section
==============================================================================================================================
2C.1 C. Matching Contributions
Availability/Amount
[ ] Not Available under the Plan.
[X] Available under the plan (elect one from option 1 and, if applicable, elect
one from option 2).
1. [ ] a. Matching Contributions SHALL be based upon a percentage of
Considered Net Profits.
[X] b. Matching Contributions SHALL NOT be based upon a percentage of
Considered Net Profits.
2. Partnership Plans.
[X] a. The Employer SHALL make Matching Contributions to Partners.
-- Matching Contributions to Partners are treated in all respects as Elective
Deferral Contributions.
[ ] b. The Employer SHALL NOT make Matching Contributions to Partners.
For each $1.00 of either Elective Deferral Contributions or Required Employee Contributions, as selected
above, the Employer will contribute and allocate to each Participant's Matching Contribution Account an
amount equal to:
[X] 1. $0.50 (e.g., $.50).
[ ] 2. A discretionary percentage, to be determined by the Employer.
-- If option 2 is elected, the amount of the discretionary percentage should be
determined by an annual Board of Directors resolution setting the percentage.
[ ] 3. Graded Match.
-- If a or b is elected, the minimum and maximum percentages must be within the parameters
of the Elective Deferral election in Section X.A or the Required Employee Contribution
election in Section X.B of this Adoption Agreement.
-- Percentages for higher amounts must be lower than the percentages for lower amounts. For
example: 100% of the first $500, plus 75% of the next $500, plus 50% of the next $500.
[ ] a. Graded based upon the dollar amount of each Participant's Elective Deferral
Contributions or Required Employee Contributions as follows:
% of the first $ plus
------- -------
% of the next $ plus
------- -------
% of the next $ plus
------- -------
% of the next $ .
------- -------
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
-20-
<PAGE> 26
===============================================================================
Plan Document X. CONTRIBUTIONS
Section
===============================================================================
[ ]b. Graded based upon the percentage of Compensation of
each Participant's Elective Deferral Contribution or
Required Employee Contribution as follows:
_______% of the first ________% plus
_______% of the next ________% plus
_______% of the next ________% plus
_______% of the next ________%
-- If 3.a or b is elected, additional testing will be
required to prove that the different contributions are
available on a nondiscriminatory basis.
[ ]4. Separate specific dollar amounts for different employees
(e.g., employees in different job classifications):
-- This option is available only for Plans covering
Employees whose conditions of employment are mandated
under the Davis-Bacon Act.
$______ (e.g., $.50) to employees in _____ (fill in)
$______ (e.g., $.50) to employees in _____ (fill in)
$______ (e.g., $.50) to employees in _____ (fill in)
$______ (e.g., $.50) to employees in _____ (fill in)
$______ (e.g., $.50) to employees in _____ (fill in)
Additional Formulas (fill in below):
-- Formulas must be the same type as above.
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
-- If 4 selected, additional testing will be required to
prove that the different contributions are available on a
nondiscriminatory basis.
- --------------------------------------------------------------------------------
-21-
<PAGE> 27
===============================================================================
Plan Document X. CONTRIBUTIONS
Section
===============================================================================
[ ] 5. Different graded matches for different employees (e.g.,
employees in different job classifications, divisions,
organizations, members of a controlled group of
corporations, etc.):
-- This option is available only for Plans covering
Employees whose conditions of employment are mandated
under the Davis-Bacon Act.
-- Percentages for higher amounts must be lower than the
percentages for lower amounts. For example: 100% of the
first $500, plus 75% of the next $500, plus 50% of the
next $500.
[ ] a. Graded based upon the dollar amount of Elective
Deferral Contributions or Required Contributions
of each Participant as follows:
Employees in ____ (fill in)
______ % of the first $_____ plus
______ % of the next $_____ plus
______ % of the next $_____ plus
______ % of the next $_____.
Employees in ____ (fill in)
______ % of the first $_____ plus
______ % of the next $_____ plus
______ % of the next $_____ plus
______ % of the next $_____.
Employees in ____ (fill in)
______ % of the first $_____ plus
______ % of the next $_____ plus
______ % of the next $_____ plus
______ % of the next $_____.
Additional Formulas (fill in below):
-- Formulas must be the same type as above.
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
- -------------------------------------------------------------------------------
-22-
<PAGE> 28
<PAGE> 29
===============================================================================
Plan Document X. CONTRIBUTIONS
Section
===============================================================================
[ ] b. Graded upon the percentage of compensation of the
Elective Deferral Contributions or Required Contributions
of each Participant as follows:
-- This option is available only for Plans covering
Employees whose conditions of employment are mandated
under the Davis-Bacon Act.
-- Matching percentages for higher compensation
percentages must be lower than matching
percentages for lower compensation percentages. For
example: 100% of the first 3%, plus 75% of the next
2%, plus 50% of the next 2%.
Employees in ____ (fill in)
______ % of the first _____ % plus
______ % of the next _____ % plus
______ % of the next _____ % plus
______ % of the next _____ %
Employees in ____ (fill in)
______ % of the first _____ % plus
______ % of the next _____ % plus
______ % of the next _____ % plus
______ % of the next _____ %
Employees in ____ (fill in)
______ % of the first _____ % plus
______ % of the next _____ % plus
______ % of the next _____ % plus
______ % of the next _____ %
Additional Formulas (fill in below):
-- Formulas must be the same type as above.
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-- If 5.a or b is selected, additional testing will be required
to prove that the different contributions are available on a
nondiscriminatory basis.
- -------------------------------------------------------------------------------
-23-
<PAGE> 30
<TABLE>
<CAPTION>
================================================================================
Plan Document X. CONTRIBUTIONS
Section
================================================================================
<S> <C>
The Elective Deferral or Required Employee Contributions,
upon which Matching Contributions are made by the
Employer, shall not exceed:
[ ] 1. $ _____ for the Plan Year.
[X] 2. 4% of Participant's Compensation for the
Contribution Period.
[ ] 3. N/A.
True-Up Contributions:
The Employer may/may not contribute a True-Up Contribution
for each Participant at the end of the Plan Year so that
the total Matching Contribution for each Participant is
calculated on an annual basis.
[ ] May [X] May not
Additional Matching Contributions:
In addition, at the end of the Plan Year, the Employer may
contribute Additional Matching Contributions to be
allocated in the same proportion that the Matching
Contribution made on behalf of each Participant during the
Plan Year bears to the Matching Contribution made on
behalf of all Participants during the Plan Year.
[ ] Yes [X] No
- --------------------------------------------------------------------------------
</TABLE>
-24-
<PAGE> 31
================================================================================
Plan Document X. CONTRIBUTIONS
Section
================================================================================
2C.1 D. Nonelective Contributions
-- If you choose to make a Nonelective Contribution, each
Employee eligible to participate in the Plan and who satisfies
the Annual Allocation Requirement of Section XII.A or XII.B MUST
be given an allocation, regardless of whether they make Elective
Deferral Contributions.
Availability/Amount
[ ] Not Available under the Plan.
[X] Available under the Plan (complete the following).
The Contribution for each Contribution Period shall be:
[ ] 1. _____% of Considered Net Profits.
[ ] 2. _____% of Compensation of each Participant.
[ ] 3. The Employer will contribute an amount equal to $______
for each Participant.
[X] 4. Discretionary.
-- If option 4 is elected, the amount of the discretionary
contribution should be determined by an annual Board of Directors
resolution setting a fixed amount of contribution or a formula by
which a fixed amount can be determined.
[ ] 5. The Employer will contribute an amount equal to $_____
/hour or unit of each Participant (indicate dollar or
cents amount).
-- Option 5 may be chosen ONLY for Employees who are subject to a
Collective Bargaining Agreement.
[ ] 6. ____% of Considered Net Profits to ____ (fill in)
____% of Considered Net Profits to ____ (fill in)
____% of Considered Net Profits to ____ (fill in)
____% of Considered Net Profits to ____ (fill in)
____% of Considered Net Profits to ____ (fill in)
-- Fill in job classification.
- --------------------------------------------------------------------------------
-25-
<PAGE> 32
================================================================================
Plan Document X. CONTRIBUTIONS
Section
================================================================================
Additional Formulas (fill in below):
-- Formulas must be the same type as above.
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
[ ] 7. % of Compensation to each Participant in (fill in)
------ ----
% of Compensation to each Participant in (fill in)
------ ----
% of Compensation to each Participant in (fill in)
------ ----
% of Compensation to each Participant in (fill in)
------ ----
% of Compensation to each Participant in (fill in)
------ ----
-- Fill in job classification.
Additional Formulas (fill in below):
-- Formulas must be the same type as above.
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
-- Options 6 and 7 may be selected ONLY when a Plan
covers Employees whose conditions of employment are
mandated under the Davis-Beacon Act.
-- If option 6 or 7 is selected, subsection A.1
(Compensation to Compensation allocation) MUST be
chosen in Section XIII, "Allocation of Contributions."
-- If options 6 or 7 is selected, additional testing
will be required to prove that the different
contributions are available on a nondiscriminatory
basis.
Nonelective Contributions shall/shall not be based on
Considered Net Profits.
-- "Shall" must be chosen if option 1 is selected.
[ ] Shall [X] Shall not
================================================================================
-26-
<PAGE> 33
================================================================================
Plan Document X. CONTRIBUTIONS
Section
================================================================================
2C.1(b) E. Voluntary Employee Contributions
Availability/Amount
[X] Not Available under the Plan.
[ ] Available under the Plan (complete the
following).
[ ] Voluntary Employee Contributions SHALL be
permitted up to _______% of Compensation
actually paid during the Plan Year.
[ ] Voluntary Employee Contributions made in a
Lump Sum SHALL be permitted.
-- Voluntary Employee Contributions are NOT
AVAILABLE unless Elective Deferral Contributions
are available.
- --------------------------------------------------------------------------------
2C.3 F. Rollover Contributions
Availability
[X] 1. Rollover Contributions out of the Plan are always
available.
[X] Cash only.
[ ] Cash and Loan Notes from this and/or a prior
plan.
[X] 2. Rollover Contributions into the Plan:
[ ] Not Available under the Plan.
[X] Available under the Plan (complete the
following).
Cash Only or Cash and Loan Notes:
[X] Cash only.
[ ] Cash and Loan Notes from prior
plan.
Rollover contributions into the Plan
may be made by:
[X] Both eligible Employees and
Employees who would be eligible
except they do not yet meet the
Plan's age and/or service
requirement.
[ ] Eligible Employees only.
- --------------------------------------------------------------------------------
-27-
<PAGE> 34
<TABLE>
<S> <C> <C> <C>
==============================================================================================================================
Plan Document X. CONTRIBUTIONS
Section
==============================================================================================================================
7B.8, 7B.9 G. Transfer of Account Balances
Availability
[X] 1. Transfers of account balances out of the Plan are always available.
[ ] 2. Transfers of Account Balances into the Plan:
[ ] Not Available under the Plan.
[X] Available under the Plan.
- ------------------------------------------------------------------------------------------------------------------------------
==============================================================================================================================
Plan Document XI. CONTRIBUTION PERIOD
Section
==============================================================================================================================
1.14 A. The regular Contribution Period (by contribution type) shall be:
-- For 1 and 2 below, "Other" Contribution Period may not be longer than annual, but may be shorter than
4-weekly.
-- For 3 below, "Other" Contribution Period may not be longer than monthly, but may be shorter than
4-weekly.
1. Matching Contributions:
[ ] Annual [ ] 4-Weekly
[X] Monthly [ ] Other (specify) __________________
2. Nonelective Contributions:
[X] Annual [ ] 4-Weekly
[ ] Monthly [ ] Other (specify) __________________
3. Elective Deferral Contributions, Required Employee Contributions, and/or Voluntary
Employee Contributions:
-- Annual contribution period is not available for contributions in #3.
[X] Monthly [ ] 4-Weekly
[ ] Other (specify) ________
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-28-
<PAGE> 35
================================================================================
Plan Document XII. ALLOCATION OF CONTRIBUTIONS
Section
================================================================================
2C.1(f) A. Allocation Formula for Nonelective Contribution
Complete the following ONLY if Section X.D is 1, 4, 6 or 7.
-- If Section X.D is 6 or 7, the Compensation to
Compensation allocation formula (1 below) must be chosen.
The Nonelective Contribution will be allocated to
Participants who meet the requirements of Section XII.B or C
as follows:
[X] 1. Compensation to Compensation:
In the same ratio as each Participant's Compensation
bears to the total Compensation of all Participants.
[ ] 2. Integrated with Social Security:
a. Choose one of the following methods:
[ ] Step-Rate Method
For each Plan Year, the Employer will
contribute an amount equal to ___% of each
Participant's Compensation up to the Social
Security Integration Level, plus ___% of
each Participant's Compensation in excess of
the Social Security Integration Level.
However, in no event will the Excess
Contribution percentage exceed the amount
specified in Section 2C.1(f)(2)(B) of the
Plan.
[ ] Maximum Disparity Method
For each Plan Year, the Employer's
Nonelective Contribution shall be allocated
in the manner stated in Section 2C.1(f)(3)
of the Plan in order to maximize permitted
disparity.
b. Social Security Integration Level:
[ ] i. $___ (not to exceed the Social Security
Taxable Wage Base).
[ ] ii. The Social Security Taxable Wage Base
in effect on the first day of the Plan
Year.
[ ] iii. ___% of the Social Security Taxable
Wage Base (not to exceed 100%).
- --------------------------------------------------------------------------------
-29-
<PAGE> 36
================================================================================
Plan Document XII. ALLOCATION OF CONTRIBUTIONS
Section
================================================================================
2C.1(g) B. Annual Allocation
An allocation to the annual Nonelective Contribution, annual
Matching Contribution, and/or Additional Matching
Contribution made by the Employer will be made to each
Participant who:
[ ] 1. Is a Participant on ANY day during the Plan Year
regardless of Service credited during the Plan Year.
[ ] 2. Is credited with a Year of Service in the Plan Year
for which the contribution is made.
[ ] 3. Is a Participant on the last day of the Plan Year.
[X] 4. Is credited with a Year of Service in the Plan Year
for which the contribution is made and is a
Participant on the last day of the Plan Year.
In addition, an allocation will be made by the Employer on
behalf of any Participant who retires, dies or becomes
disabled during the Plan Year, regardless of the number of
Hours of Service credited to such Participant and regardless
of the number of Hours of Service credited to such
Participant and regardless of whether such Participant is a
participant on the last day of the Plan Year.
Annual Nonelective Contribution [ ] Yes [X] No
Annual Matching Contribution [ ] Yes [ ] No
Additional Matching Contribution [ ] Yes [ ] No
- --------------------------------------------------------------------------------
2C.1(g) C. Nonannual Allocation Requirement
An allocation of the nonannual Matching Contribution or
nonannual Nonelective Contribution made by the Employer will
be made to each Participant who:
[ ] 1. Is a Participant on any day of the
Contribution Period.
[X] 2. Is a Participant as of the last day of the
Contribution Period.
In addition, an allocation will be made by the Employer on
behalf of any Participant who retires, dies, or becomes
disabled during the Contribution Period, regardless of
whether such Participant is a Participant as of the last day
of the Contribution Period.
Nonannual Nonelective Contribution [ ] Yes [ ] No
Nonannual Matching Contribution [ ] Yes [X] No
- --------------------------------------------------------------------------------
-30-
<PAGE> 37
================================================================================
Plan Document XIII. LIMITATIONS ON ALLOCATIONS
Section
================================================================================
4B A. If any Participant is covered by another qualified defined
contribution plan maintained by the Employer, other than a
Master or Prototype plan:
-- Complete part A if you: (1) maintain, or at any time
maintained, another qualified retirement plan in which any
Participant in this Plan is, was, or could be, a participant;
or (2) maintain a Code section 415(1)(2) individual medical
account, for which amounts are treated as Annual Additions for
any Participant in this Plan.
[X] 1. N/A. The Employer has no other defined
contribution plan(s).
[ ] 2. The provisions of Section 4B.5 of the Plan
will apply, as if the other plan were a
Master or Prototype plan.
- -------------------------------------------------------------------------------
4B B. If any Participant is or ever has been a Participant in a
qualified defined benefit plan maintained by the Employer:
-- Complete part B if you maintain, or at any time maintained,
another qualified retirement plan in which any Participant
in this Plan is, was, or could be a participant.
[X] 1. N/A. The Employer has no defined benefit
plan(s).
[ ] 2. In any Limitation Year, the Annual Additions
credited to the Participant under this Plan
may not cause the sum of the Defined Benefit
Plan Fraction and the Defined Contribution
Fraction to exceed 1.0. If the Employer
contributions that would otherwise be
allocated to the Participant's account during
such year would cause the 1.0 limitation to be
exceeded, the allocation will be reduced so
that the sum of the fraction equals 1.0. Any
contributions not allocated because of the
preceding sentence will be allocated to the
remaining Participants according to the Plan's
allocation formula. If the 1.0 limitation is
exceeded because of an Excess Amount, such
Excess Amount will be reduced in accordance
with Section 4B.4 of the Plan.
[ ] 3. Provide the method under which the Plan
involved will satisfy the 1.0 limitation in a
manner that precludes Employer discretion.
- -------------------------------------------------------------------------------
31
<PAGE> 38
================================================================================
Plan Document XIII. LIMITATIONS ON ALLOCATIONS
Section
================================================================================
C. Compensation will mean all of each Participant's:
-- Every must complete Section C. If option 1, 2, or 3 was
selected in Section IV.A., you must make the same selection
here.
4B.1(b)(1)
[ ] 1. Wages, Tips, and Other Compensation Box on Form W-2.
4B.1(b)(2)
[ ] 2. Section 3401(a) wages.
4B.1(b)(3)
[X] 3. 415 safe-harbor compensation.
- --------------------------------------------------------------------------------
4B.1(h) D. The Limitation Year shall be:
-- Everyone must complete Section D.
[X] 1. The Calendar Year.
[ ] 2. The 12-month period coinciding with the Plan Year.
[ ] 3. The 12-month period beginning on (MM/DD): .
- --------------------------------------------------------------------------------
================================================================================
Plan Document XIV. INVESTMENT OF PARTICIPANT'S ACCOUNTS
Section
================================================================================
5A.1 A. The Participant shall/shall not have the authority to
direct the Investment of Contributions made by the Employer.
[X] Shall [ ] Shall Not
- --------------------------------------------------------------------------------
5A.1 B. If SHALL is elected above, complete the following.
Those having authority to direct the investment of the
Participant's Account are (choose all that apply):
[X] 1. Participants who are active Employees.
[X] 2. Participants who are former employees and continue
to maintain an account in the Plan or Trust.
[X] 3. Beneficiaries.
[X] 4. Alternative Payees.
- --------------------------------------------------------------------------------
================================================================================
Plan Document XV. LIFE INSURANCE
Section
================================================================================
5B.1 A. Available as a Participant investment:
[ ] Yes [X] No
- --------------------------------------------------------------------------------
32
<PAGE> 39
================================================================================
Plan Document XV. LIFE INSURANCE
Section
================================================================================
B. If yes is elected above, Life Insurance shall be available
to:
[ ] 1. All Participants.
[ ] 2. Only to the specified group of Participants
(fill in below):
-- If subsection 2 is checked, separate nondiscrimination
testing will be required.
- -------------------------------------------------------------------------------
================================================================================
Plan Document XVI. EMPLOYER STOCK
Section
================================================================================
- -- Before electing Employer Stock as an investment option, you should consult
your legal counsel on any federal or state securities law requirements arising
from offering Employer Stock as an investment option under your Plan and
whether use of this document is appropriate for you under those laws. Neither
Connecticut General Life Insurance Company nor any of its employees can advise
you on these matters.
- -------------------------------------------------------------------------------
1.45 A. Investment in Employer Stock is:
[ ] Permitted.
[X] Not Permitted.
-- You must complete the following subsections B and C if
investment in Employer Stock is permitted and Participants
have the authority to direct the investment of Employer
Contributions.
- -------------------------------------------------------------------------------
1.45 B. Investment in Employer Stock within the Plan by officers
or directors of the Employer or by an individual who owns
more than 10% of the Employer's Stock is:
[ ] Permitted.
[X] Not Permitted.
- -------------------------------------------------------------------------------
1.45 C. The Trustee:
[ ] 1. Will vote the shares of the Employer Stock.
[ ] 2. Will vote the shares of the Employer Stock in
accordance with any instructions received by
the Trustee from the Participant.
-- Option 2 must be selected if CG Trust Company is the
Trustee.
[ ] 3. May request voting instructions from the
Participants.
- --------------------------------------------------------------------------------
-33-
<PAGE> 40
================================================================================
Plan Document XVII. WITHDRAWAL PRECEDING TERMINATION
Section
- -- Complete only the sections for the type of contributions in your plan.
================================================================================
3E.1(a) A. Withdrawal of Required Employee Contributions.
-- Withdrawal may be for any reason.
[ ] Not Available under the Plan.
[X] Available under the Plan.
If available, Required Employee Contributions may be
withdrawn:
[ ] Once each 6 months.
[X] Once each 12 months.
[ ] Other (specify) ___ .
The Contribution suspension period following a
withdrawal of Required Employee Contributions shall be:
-- You must choose one of the suspension periods shown.
Related Employer Contributions will be suspended for
the same period.
[ ] 6 Months.
[X] 12 Months.
[ ] 24 Months.
- --------------------------------------------------------------------------------
3E.1(b) B. Withdrawal of Voluntary Employee Contributions.
-- Withdrawal may be for any reason.
[X] Not Available under the Plan.
[ ] Available under the Plan.
If available, Voluntary Employee Contributions may be
withdrawn:
[ ] Once each 6 months.
[X] Once each 12 months.
[ ] Other (specify) ___ .
- --------------------------------------------------------------------------------
-34-
<PAGE> 41
================================================================================
Plan Document XVII. WITHDRAWALS PRECEDING TERMINATION
Section
================================================================================
C. Withdrawal of Elective Deferral Contributions.
[ ] Not Available under the Plan.
[X] Available under the Plan.
If available, select the conditions for withdrawal:
3E.2 [ ] Withdrawal upon Participant's attainment
of age 59-1/2.
3E.5 [X] Withdrawal for Serious Financial Hardship.
-- If a Participant makes a withdrawal of Elective
Deferral Contributions due to a Serious Financial
Hardship, the Participant must be suspended from
making any additional Elective Deferral
Contributions for a period of 12 months.
- --------------------------------------------------------------------------------
D. Withdrawal of Employer Contributions (Matching, Nonelective
and/or Prior Employer Contributions).
[ ] Not Available under the Plan.
[X] Available under the Plan.
-- If Prior Employer Contributions are money purchase plan
contributions, they may not be withdrawn.
3E.3 If available, select the conditions for withdrawal:
[ ] 1. Withdrawal upon Participant's attainment of
age 59-1/2.
Available from:
[ ] a. Matching Contributions.
[ ] b. Nonelective Contributions.
[ ] c. Prior Employer Contributions.
- --------------------------------------------------------------------------------
-35-
<PAGE> 42
================================================================================
Plan Document XVII. WITHDRAWALS PRECEDING TERMINATION
Section
================================================================================
3E.3 [ ] 2. Withdrawals to active Participants who have been
Participants for a minimum of 60 consecutive months.
Available from:
[ ] a. Matching Contributions.
[ ] b. Nonelective Contributions.
[ ] c. Prior Employer Contributions.
Frequency of withdrawal:
[ ] Once each 6 months.
[ ] Once each 12 months.
[ ] Other (specify) ____.
Suspension Period following withdrawal:
[ ] N/A.
[ ] 6 months.
[ ] 12 months.
[ ] 24 months.
3E.4 [X] 3. Withdrawal for Serious Financial Hardship.
Available from:
[X] a. Matching Contributions.
[X] b. Nonelective Contributions.
[ ] c. Prior Employer Contributions.
Prior Employer Contributions:
Prior Employer Contributions are contributions made to the Plan by the
Employer prior to the Plan's original conversion and/or restatement on
_____ (fill in date).
-36-
<PAGE> 43
================================================================================
Plan Document XVII. WITHDRAWALS PRECEDING TERMINATION
Section
================================================================================
3E.6 E. Withdrawal of Rollover Contributions:
[X] Not Available under the Plan.
[ ] Available under the Plan.
If available, Rollover Contributions may be
withdrawn:
[ ] Once per Plan Year.
[ ] Every 6 Months.
[ ] Every 3 Months.
[ ] Every Month.
[ ] Anytime.
- --------------------------------------------------------------------------------
3E.6 F. Withdrawal of Qualified Voluntary Employee Contributions
(QVEC Contributions)
-- Applicable only if this is a readoption of an existing plan.
If selected, Contributions may be withdrawn for any reason.
[ ] Not Available under the Plan.
[ ] Available under the Plan.
If Available, Qualified Voluntary Employee
Contributions may be withdrawn:
[ ] Once per Plan Year.
[ ] Every 6 Months.
[ ] Every 3 Months.
[ ] Every Month.
[ ] Anytime.
- --------------------------------------------------------------------------------
-37-
<PAGE> 44
================================================================================
Plan Document XVII. WITHDRAWALS PRECEDING TERMINATION
Section
================================================================================
3E.1(c) G. Withdrawal of Prior Required Employee Contributions.
-- Withdrawal may be for any reason.
[ ] Not Available under the Plan.
[ ] Available under the Plan.
If available, Prior Required Employee
Contributions may be withdrawn:
[ ] Once each 6 months.
[ ] Once each 12 months.
[ ] Other (specify) ___ .
Prior Required Employee Contributions are posttax
contributions made by Employees in order to receive an
Employer contribution and which were made before the Plan's
original conversion and/or restatement on (fill in date).
- --------------------------------------------------------------------------------
3E.1(d) H. Withdrawal of Prior Voluntary Employee Contributions.
-- Withdrawal may be for any reason and may be taken at any
time.
[ ] Not Available under the Plan.
[ ] Available under the Plan.
Prior Voluntary Employee Contributions are voluntary
contributions made by Employees prior to these types of
contribution being eliminated as a plan option on (fill
in date).
- --------------------------------------------------------------------------------
================================================================================
Plan Document XVIII. LOANS TO PARTICIPANTS, BENEFICIARIES AND
Section PARTIES-IN-INTEREST
================================================================================
5C A. Loans are permitted.
[X] Yes
-- If yes, Plan must be trusteed.
[ ] No
- --------------------------------------------------------------------------------
-38-
<PAGE> 45
================================================================================
Plan Document XVIII. LOANS TO PARTICIPANTS, BENEFICIARIES
Section AND PARTIES-IN-INTEREST
================================================================================
5C B. Loans are available only from the following sources:
-- Qualified Voluntary Employee Contributions (QVEC
Contributions) may not be taken in a loan.
[X] All Sources.
[ ] List Sources:
- -------------------------------------------------------------------------------
================================================================================
Plan Document XIX. RETIREMENT AND DISABILITY
Section
================================================================================
1.40 A. Normal Retirement Age is:
[X] 1. The date the Participant attains age 65
(not to exceed 65).
[ ] 2. The later of:
a. The date the Participant attains age (not
to exceed 65), or
b. The (not to exceed 5th) anniversary of
the Participation Commencement Date.
-- Note regarding 2.b above: If, for Plan Years
beginning before January 1, 1988, Normal
Retirement Age was determined with reference to
the anniversary of the Participation Commencement
Date (more than 5 but not to exceed 10 years),
the anniversary date for Participants who first
commenced participation under the Plan before the
first Plan Year beginning on or after January 1,
1988 shall be the earlier of (A) the tenth
anniversary of the date the Participant commenced
participation in the Plan (or such anniversary as
had been elected by the Employer, if less than
10) or (B) the fifth anniversary of the first day
of the first Plan Year beginning on or after
January 1, 1988. The Participation Commencement
Date is the first day of the first Plan Year in
which the Participant commenced participation in
the Plan.
- --------------------------------------------------------------------------------
-39-
<PAGE> 46
================================================================================
Plan Document XIX. RETIREMENT AND DISABILITY
Section
================================================================================
1.18 B. Early Retirement by Participants
1. Early Retirement by Participants is:
[X] a. Not Permitted.
[ ] b. Permitted. Subject to the following conditions:
[ ] i. Age (not to exceed 65).
[ ] ii. Years of Service .
[ ] iii. Age (not to exceed 65)
and Years of Service.
[ ] iv. Age (not to exceed 65)
and Years of Participation.
- --------------------------------------------------------------------------------
1.16 C. Disability
1. The Employer shall/shall not make contributions on behalf
of disabled Participants who are Nonhighly Compensated
Employees on the basis of the Compensation each such
Participant would have received for the Limitation Year if
the Participant had been paid at the rate of Compensation
paid immediately before becoming permanently and totally
disabled.
[X] Shall [ ] Shall Not
-- All such contributions are 100% vested and nonforfeitable
when made.
- --------------------------------------------------------------------------------
================================================================================
Plan Document XX. DISTRIBUTION OF BENEFITS
Section
================================================================================
3A.1 A. Distribution of benefits should be in the form of (check
all that apply):
[X] 1. Single Sum.
[X] 2. Life Annuity.
[ ] 3. Installment Payments.
[X] 4. Installment Refund Annuity.
[ ] 5. Employer Stock, to the extent the Participant is
invested therein.
- --------------------------------------------------------------------------------
B. Distribution Timing
[ ] 1. All Participants may elect to defer their
distributions.
[X] 2. Participants who terminate employment and whose
account balances never exceeded $3,500 shall receive
an immediate, lump sum cash distribution.
- --------------------------------------------------------------------------------
-40-
<PAGE> 47
================================================================================
Plan Document XX. DISTRIBUTION OF BENEFITS
Section
================================================================================
C. Expenses - Deferred Participants.
1. Participants who elect to defer distribution of their
benefits shall/shall not pay for all fees associated
with administration of their deferral payment.
[X] Shall [ ] Shall Not
- -------------------------------------------------------------------------------
================================================================================
Plan Document XXI. QUALIFIED PRERETIREMENT SURVIVOR ANNUITY
Section
================================================================================
3C.4 The Qualified Preretirement Survivor Annuity shall be:
-- 100% is required for Plans allowing only single sum
distributions.
[X] 100% to the surviving spouse.
[ ] 50% to the surviving spouse.
- -------------------------------------------------------------------------------
================================================================================
Plan Document XXII. AMENDMENT TO THE PLAN
Section
================================================================================
7B A. The party having the authority to amend the Adoption
Agreement is the:
[ ] 1. Trustee(s).
-- Trustee(s) cannot be chosen if the Trustee is CG Trust.
[X] 2. Plan Administrator.
[X] 3. Plan Committee.
[ ] 4. Designated Representative of the Employer.
- --------------------------------------------------------------------------------
-41-
<PAGE> 48
================================================================================
Plan Document XXIII. TOP-HEAVY PROVISIONS
Section
================================================================================
7A.1(i) A. Method to be used to avoid dupplication of Top-Heavy Minimum
benefits when a non-Key Employee is a Participant in both
this Plan and a defined benefit plan maintained by the
Employer (select one response):
[X] 1. N/A. The Employer has no other plan(s).
[ ] 2. Single Plan Minimum Top-Heavy Allocation. A minimum
Top-Heavy contribution will be allocated to each
non-Key Employee's Participant Account in an amount
equal to:
[ ] a. The lesser of 3% of Compensation or the
highest percentage allocated to any Key
Employee.
[ ] b. % of Compensation (must be at least 3%).
[ ] 3. Multiple Plans Top-Heavy Allocation. In order to
satisfy Code section 415 and 416, and because of the
required aggregation of multiple plans, a minimum
Top-Heavy contribution will be allocated to each
non-Key Employee in an amount equal to:
[ ] a. Not Applicable. No other plan was in
existence prior to the Effective Date of
this Adoption Agreement.
[ ] b. 5% of Compensation, to be provided in a
defined contribution plan of the Employer.
[ ] c. 7-1/2% of Compensation, to be nonintegrated,
and provided in this Plan.
-- If c is chose, for all Plan Years in which this
Plan is Top-Heavy (but not Super Top-Heavy), the
Defined Benefit and Defined Contribution fractions
shall be computed using 125%.
[ ] 4. Enter the name of the plan(s) and specify the method
under which the plan(s) will provide Top-Heavy
Minimum Benefits to non-Key Employees [including any
adjustments required under Code section 415(e)]:
-- If 4 is selected, the method specified must preclude
Employer discretion and inadvertent omissions.
- --------------------------------------------------------------------------------
-42-
<PAGE> 49
================================================================================
Plan Document XXIII. TOP-HEAVY PROVISIONS
Section
================================================================================
7A.1 B. Present Value: In order to establish the present value to
compute the Top-Heavy Ratio, any benefit shall be
discounted only for mortality and interest, based on:
-- Complete B only if response to A is 2, 3, or 4. Fill in all
blanks.
[ ] 1. Interest Rate %.
[ ] 2. Mortality Table .
[ ] 3. Valuation Date .
- -------------------------------------------------------------------------------
7A.2 C. Where a non-Key Employee is a Participant in this and
another defined contribution plan(s) of the Employer,
choose which plan will provide the minimum Top-Heavy
contribution:
[X] 1. N/A. The Employer has no other plan.
[ ] 2. The minimum allocation will be met in this Plan.
[ ] 3. The minimum allocation will be met in the other
defined contribution plan. Enter the name of the
plan:
- -------------------------------------------------------------------------------
7A.3 D. Top-Heavy Vesting Schedule. In the event the plan becomes
Top-Heavy, the vesting schedule shall be:
-- Must meet one of the schedules below and must be at least
as liberal as the vesting schedule elected in Section IX.A.
[ ] 1. 100% vesting after (not to exceed 3)
years of Service.
[ ] 2. % vesting after 1 Year of Service
% (not less than 20) vesting after 2 Years
of Service
% (not less than 40) vesting after 3 Years
of Service
% (not less than 60) vesting after 4 Years
of Service
% (not less than 80) vesting after 5 Years
of Service
100% vesting after 6 Years of Service
[X] 3. Same vesting schedule(s) as elected in Adoption
Agreement Section IX (already meets Top-Heavy
minimum vesting requirements).
-- If the vesting schedule under the Plan shifts into the
above schedule for any Plan Year because of the Plan's
Top-Heavy status, such shift is an amendment to the vesting
schedule and the election provisions in Section 7B.1 of the
Plan shall apply.
-- The Top-Heavy vesting schedule will remain in effect even
if the Plan ceases to be Top Heavy.
- --------------------------------------------------------------------------------
-43-
<PAGE> 50
================================================================================
Plan Document XXIV. OTHER ADOPTING EMPLOYER
Section
================================================================================
6E.1, 6E.2 A. The following Adopting Employer(s) also adopt this plan
and have executed this Adoption Agreement:
-- Fill in below the names and the Employer Identification
Numbers (EINs) of Adopting Employers.
-- Must meet requirements of Plan definition of Employer,
Plan Section 1.24.
- --------------------------------------------------------------------------------
-44-
<PAGE> 51
The Employer hereby adopts the Connecticut General Life Insurance Company
Defined Contribution Prototype Profit Sharing/Thrift Plan with 401(k) Feature,
including all elections made in this Non-Standardized Adoption Agreement, and
the Employer agrees to be bound by all the terms of the Plan and by all the
terms of this Adoption Agreement and of the Annuity Contract. The Employer
further agrees that it will furnish promptly all information required by the
Trustee, if applicable, the Plan Administrator and the Insurance Company in
order to carry out their functions. The Employer shall notify the Trustee, if
applicable, the Plan Administrator and the Insurance Company promptly of any
changes in the status of the Employer which might affect the Employer's duties
and responsibilities hereunder.
The elections under this Adoption Agreement may be changed by the Employer from
time to time by a written instrument signed by the Employer, the Plan
Administrator and the Trustee, if applicable, and accepted by the Plan Sponsor.
The Employer consents to the exercise by the Plan Sponsor of the right to amend
the Plan and the Annuity Contract from time to time as it may deem necessary or
advisable.
By signing this Adoption Agreement, the Employer specifically acknowledges that
the Insurance Company has no authority: (1) to answer legal questions and that
all such questions shall be answered by legal counsel for the Employer; and (2)
to make determinations involved in the administration of the Plan and that all
such determinations shall be answered by the Employer's Plan Administrator or
other designated representative.
Upon execution of this Adoption Agreement by the Employer, the Plan shall be
effective with respect to that Employer as of the Effective Date specified
herein, provided the Plan Administrator and the Trustee, if applicable, shall
then or thereafter execute this Adoption Agreement to signify their acceptance
of their duties and responsibilities hereunder and provided further, the Plan
Sponsor will indicate its acceptance of the Employer in accordance with its
usual rules and practices.
The Adopting Employer may not rely on an opinion letter issued by the National
Office of the Internal Revenue Service as evidence that the Plan is qualified
under Internal Revenue Code section 401. In order to obtain reliance with
respect to plan qualification, the Employer must apply to the appropriate key
district office for a determination letter.
Connecticut General Life Insurance Company will inform the Employer of any
amendments made to the Plan or of the discontinuance or abandonment of such
Plan.
CAUTION: You should very carefully examine the elections you have made in this
Adoption Agreement and discuss them with your legal counsel. Failure to
properly fill out the Adoption Agreement may result in disqualification of your
plan. This Adoption Agreement may only be used in conjunction with Basic Plan
Document Number 03.
(Note: The Employer, Plan Administrator and Trustee, if applicable, must all
sign below.)
Executed at Houston, TX this 31st day of December, 1997.
Employer's Exact Name: JERRY BRADLEY
-------------------------------
Witness: /s/ [ILLEGIBLE] By: /s/ J.B. BRADLEY
------------------------ -------------------------------
Title: VICE PRESIDENT HUMAN RESOURCES
---------------------------------
Additional Adopting Employer's Exact Name:
---------------------------
Witness: By:
------------------------ -------------------------------
Title:
---------------------------------
-45-
<PAGE> 52
<TABLE>
<S> <C>
Additional Adopting Employer's Exact Name:
-------------------------------------------------------
Witness: By:
------------------------------- ---------------------------------------------------
Title:
--------------------------------------------------------
Additional Adopting Employer's Exact Name:
-------------------------------------------------------
Witness: By:
------------------------------- ---------------------------------------------------
Title:
--------------------------------------------------------
Additional Adopting Employer's Exact Name:
-------------------------------------------------------
Witness: By:
------------------------------- ---------------------------------------------------
Title:
--------------------------------------------------------
ACCEPTED this 31st day of December 1997.
Witness: /s/ [ILLEGIBLE] By (Plan Administrator): /s/ [ILLEGIBLE]
------------------------------- ---------------------------------------
Witness: By (Plan Administrator):
------------------------------- ---------------------------------------
Witness: By (Plan Administrator):
------------------------------- ---------------------------------------
Witness: By (Trustee):
------------------------------- -------------------------------------------------
Witness: By (Trustee):
------------------------------- -------------------------------------------------
Witness: By (Trustee):
------------------------------- -------------------------------------------------
ACCEPTED this 31st day of December 1997.
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By (Authorized Representative): /s/ BYRON OLIVER
----------------------------------------------------
</TABLE>
-46-
<PAGE> 53
<TABLE>
<CAPTION>
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
<S> <C>
Plan Description: Prototype Non-Standardized Profit Sharing Plan with CODA
FFN: 50315620003-001 Case: 9401285 EIN: 06-0303370 Washington, DC 20224
BPD: 03 Plan: 001 Letter Serial No.: D365331a
Person to Contact: Ms. Arrington
o CONNECTICUT GENERAL LIFE INSURANCE CO. Telephone Number: (202) 622-8173
350 CHURCH STREET M-92 Refer Reply to: CP:E:EP:T4
HARTFORD, CT 06067 Date: 05/07/96
</TABLE>
Dear Applicant:
In our opinion, the form of the plan identified above is acceptable under
Section 401 of the Internal Revenue Code for use by employers for the benefit of
their employees. This opinion relates only to the acceptability of the form of
the plan under the Internal Revenue Code. It is not an opinion of the effect of
other Federal or other local statutes.
You must furnish a copy of this letter to each employer who adopts this plan.
You are also required to send a copy of the approved form of the plan, any
approved amendments and related documents to each Key District Director of
Internal Revenue Service in whose jurisdiction there are adopting employers.
Our opinion on the acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under Code section
401(a). Therefore, an employer adopting the form of the plan should apply for a
determination letter by filing an application with the Key District Director of
Internal Revenue Service on Form 5307, Short Form Application for Determination
for Employee Benefit Plan.
Because you submitted this plan for approval after March 31, 1991, the
continued, interim and extended reliance provisions of sections 13 and 17.03 of
Rev. Proc. 89-9, 1989-1 C.B. 780, are not applicable.
Because you submitted this plan on or after July 1, 1994, it does not meet the
requirements for the extension of the remedial amendment period provided by Rev.
Proc. 95-12, 1995-3 I.R.S. 24.
This letter may not be relied upon with respect to whether the plan satisfies
the qualification requirements as amended by Uruguay Round Agreements Act, Pub.
L. 103-465.
If you, the sponsoring organization, have any questions concerning the IRS
processing of this case, please call the above telephone number. This number is
only for use of the sponsoring organization. Individual participants and/or
adopting employers with questions concerning the plan should contact the
sponsoring organization. The plan's adoption agreement must include the
sponsoring organization's address and telephone number for inquiries by
adopting employers.
If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial Number
and File Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record. Please notify us if you
modify or discontinue sponsorship of this plan.
Sincerely yours,
/s/ [ILLEGIBLE]
---------------------------------------------
Chief Employee Plans Technical Branch 4
<PAGE> 1
EXHIBIT 4.9
AMENDMENT TO
ALL PURE SAVINGS PLAN
WHEREAS, Connecticut General Life Insurance Company (hereinafter referred to as
the "Insurance Company") sponsors a prototype plan known as the Connecticut
General Life Insurance Company Defined Contribution Basic Plan Document Number
03 (hereinafter referred to as the "Plan") for the benefit of the eligible
Employees and their Beneficiaries; and
WHEREAS, All Pure Chemical Company (hereinafter referred to as the "Employer")
amended and restated the All Pure Savings Plan through the adoption of Adoption
Agreement Number 001-03 (hereafter referred to as the "Adoption Agreement")
effective January 1, 1992 for the benefit of its eligible Employees and their
Beneficiaries; and
WHEREAS, the Employer reserved the right to amend the elections in the Adoption
Agreement in Section 7B.1 of the Plan; and
WHEREAS, the Employer wishes to amend the Adoption Agreement to change the
address of the Employer;
NOW THEREFORE, effective July 1, 1997, the Adoption Agreement is hereby amended
as follows:
The Face page of the Adoption Agreement is deleted in its entirety and replaced
with the following:
"NON-STANDARDIZED PROFIT SHARING/THRIFT PLAN WITH 401(k) Feature
Adoption Agreement Number 001-03
This Adoption Agreement, when executed by the Employer and accepted by the Plan
Administrator, and the Trustee, if applicable, and accepted by Connecticut
General Life Insurance Company, establishes the Employer's Plan and Trust, if
applicable, for the benefit of its eligible Employees and their Beneficiaries.
The terms of the Connecticut General Life Insurance Company Defined
Contribution Plan are expressly incorporated therein and shall form a part
hereof as fully as if set forth herein except that if more than one election is
provided, only that election made by the Employer shall be so incorporated. The
terms of the Plan so incorporated together with the terms of this Adoption
Agreement shall constitute the sole terms of the Employer's Plan and Trust, if
applicable, and no further trust instrument or other instrument of any nature
whatsoever shall be required. The Employer's participation under the Plan shall
be subject to all the terms set forth therein and in this Adoption Agreement.
- -- Note: Section 414(d) governmental plans and section 414(e) nonelecting
church plans that do not wish to provide ERISA-required benefits should not
adopt this document.
================================================================================
Plan Document GENERAL INFORMATION
Section
================================================================================
Legal Name of Employer: All Pure Chemical Company
- --------------------------------------------------------------------------------
Address: 2185 N. California Blvd., Suite 500
City: Walnut Creek State: CA Zip: 94596
- --------------------------------------------------------------------------------
Plan Name: All Pure Savings Plan
================================================================================
-1-
<PAGE> 2
- --------------------------------------------------------------------------------
Plan Number: 002
-- To be assigned by the Employer. For example: 001, 002,
and so on.
- --------------------------------------------------------------------------------
Employer's EIN: 95-2314942
- --------------------------------------------------------------------------------
Classification of Business:
[X] C Corporation [ ] S Corporation [ ] Partnership
[ ] Sole Proprietorship [ ] Tax-Exempt/Nonprofit Organization
[ ] Other:
- --------------------------------------------------------------------------------
================================================================================
Plan Document GENERAL INFORMATION
Section
================================================================================
Employer Tax Status:
Tax Year Ends (MM/DD): 12/31
Tax Basis: [ ] Cash [X] Accrual
- --------------------------------------------------------------------------------
1.20 Effective Date
The adoption of the CONNECTICUT GENERAL LIFE INSURANCE COMPANY
Standardized Profit Sharing/Thrift Plan with 401(k) Feature
shall:
[ ] A. Establish a new Plan effective as of (MM/DD/YY): .
[X] B. Constitute an amendment and restatement in its entirety
of a previously established Qualified Plan of the
Employer which was effective 01/01/92 (hereinafter
called the "Effective Date"). The effective date of this
amendment and restatement is 07/01/97.
- --------------------------------------------------------------------------------
Merger Data
This Plan includes funds from a prior or coincidental
merger of a:
[ ] A. Money Purchase Plan
[ ] B. Target Benefit Plan
[X] C. Not Applicable
- --------------------------------------------------------------------------------
Sponsoring Organization:
Connecticut General Life Insurance Company
P.O. Box 2975
Hartford, CT 06104
(860) 725-2274
- --------------------------------------------------------------------------------
IN WITNESS WHEREOF, the Employer and the Administrator have hereunto affixed
their signatures.
Witness: /s/ STACEY LIL By: /s/ J. B. BRADLEY
Title: Vice President Human Resources
Executed at Houston, TX on December 31, 1997.
All Pure Chemical Company
-2-
<PAGE> 3
Witness:
----------------------- ------------------------
Title
Accepted this 31 day of December 1997.
Witness: /s/ ILLEGIBLE By (Plan Administrator): /s/ ILLEGIBLE
--------------------- -------------
Additional Adopting Employer's Exact Name:
------------------
Witness: By:
-------------------- -------------------------------------
Title:
----------------------------------------
Additional Adopting Employer's Exact Name:
-----------------
Witness: By:
-------------------- -------------------------------------
Title:
----------------------------------------
Additional Adopting Employer's Exact Name:
-----------------
Witness: By:
-------------------- -------------------------------------
Title:
----------------------------------------
IMPORTANT NOTE
Neither Connecticut General Life Insurance Company nor any of its employees can
provide you with legal advice in connection with the execution of this
document. Prior to execution of this document, you should consult your attorney
on whether this document is appropirate for you.
-3-
<PAGE> 4
AMENDMENT TO
ALL PURE SAVINGS PLAN
WHEREAS, All Pure Chemical Company (hereinafter referred to as the "Employer")
established the All Pure Savings Plan (hereinafter referred to as the "Plan")
effective January 1, 1992, through adoption of the Connecticut General Life
Insurance Company Group Pension Prototype Plan Basic Plan Document Number 02,
for the benefit of its eligible Employees and their Beneficiaries; and
WHEREAS, the Employer reserved the right to amend the Plan under the terms
thereof; and
WHEREAS, the Employer desires to amend and restate the Plan through adoption of
the Connecticut General Life Insurance Company Defined Contributions Plan Basic
Plan Document Number 03; and
NOW THEREFORE, the Plan is amended and restated in its entirety, effective
January 1, 1996, as follows:
1. The terms of the Plan as heretofore set forth shall no longer apply with
respect to Participants under the Plan who have not terminated employment
(including terminations on account of Retirement, death or Disability); and
the terms of the Plan with respect to such Participants shall henceforth be
as set forth in the restated All Pure Savings Plan, a copy of which is
attached to and forms a part of this amendment.
2. The Plan, as amended and restated, shall represent a continuation of the
prior Plan as heretofore set forth and shall not abridge or curtail any
rights accorded to Participants under said prior instrument.
IN WITNESS WHEREOF, the Employer and the Administrator have hereunto affixed
their signatures.
Executed at Houston, TX on December 31, 1997
ALL PURE CHEMICAL COMPANY
/s/ [ILLEGIBLE] By /s/ J.B. BRADLEY
- ------------------------------------ ------------------------------------
Witness Title Vice President Human Resources
----------------------------------
Accepted this 31 day of December, 1997.
/s/ [ILLEGIBLE] By /s/ [ILLEGIBLE]
- ------------------------------------ ------------------------------------
Witness Administrator
<PAGE> 5
IMPORTANT NOTE
Neither Connecticut General Life Insurance Company nor any of its employees can
provide you with legal advice in connection with the execution of this
document. Prior to execution of this document, you should consult your attorney
on whether this document is appropriate for you.
<PAGE> 6
Non-Standardized Profit Sharing/Thrift Plan With 401(k) Feature
Adoption Agreement Number 001-03
This Adoption Agreement, when executed by the Employer and accepted by the Plan
Administrator, and the Trustee, if applicable, and accepted by Connecticut
General Life Insurance Company, establishes the Employer's Plan and Trust, if
applicable, for the benefit of its eligible Employees and their Beneficiaries.
The terms of the Connecticut General Life Insurance Company Defined
Contribution Plan are expressly incorporated therein and shall form a part
hereof as fully as if set forth herein except that if more than one election is
provided, only that election made by the Employer shall be so incorporated.
The terms of the Plan so incorporated together with the terms of this Adoption
Agreement shall constitute the sole terms of the Employer's Plan and Trust, if
applicable, and no further trust instrument or other instrument of any nature
whatsoever shall be required. The Employer's participation under the Plan shall
be subject to all the terms set forth therein and in this Adoption Agreement.
- -- Note: Section 414(d) governmental plans and section 414(e) nonelecting
church plans that do not wish to provide ERISA-required benefits should not
adopt this document.
================================================================================
Plan Document GENERAL INFORMATION
Section
================================================================================
Legal Name of Employer: All Pure Chemical Company
- --------------------------------------------------------------------------------
Address: 1660 West Linne Road
City: Tracey State: CA Zip: 95376
- --------------------------------------------------------------------------------
Plan Name: All Pure Savings Plan
- --------------------------------------------------------------------------------
Plan Number: 002
-- To be assigned by the Employer. For example, 001, 002 and so
on.
- --------------------------------------------------------------------------------
Employer's EIN: 95-2314942
- --------------------------------------------------------------------------------
Classification of Business:
[X] C Corporation [ ] S Corporation [ ] Partnership
[ ] Sole Proprietorship [ ] Tax-Exempt/Nonprofit Organization
[ ] Other:
- --------------------------------------------------------------------------------
<PAGE> 7
================================================================================
Plan Document GENERAL INFORMATION
Section
================================================================================
Employer Tax Status:
Tax Year Ends (MM/DD): 12/31
Tax Basis: [ ] Cash [X] Accrual
- --------------------------------------------------------------------------------
1.20 Effective Date
The adoption of the CONNECTICUT GENERAL LIFE INSURANCE COMPANY
Non-Standardized Profit Sharing/Thrift Plan with 401(k) Feature
shall:
[ ] A. Establish a new Plan effective as of (MM/DD/YY): ____.
[X] B. Constitute an amendment and restatement in its entirety
of a previously established Qualified Plan of the
Employer which was effective 01/01/92 (hereinafter
called the "Effective Date"). The effective date of this
amendment and restatement is 01/01/96.
- --------------------------------------------------------------------------------
Merger Data
This Plan includes funds from a prior or coincidental merger
of a:
[ ] A. Money Purchase Plan
[ ] B. Target Benefit Plan
[X] C. Not Applicable
- --------------------------------------------------------------------------------
Sponsoring Organization:
Connecticut General Life Insurance Company
P.O. Box 2975
Hartford, CT 06104
(860) 725-2274
- --------------------------------------------------------------------------------
-2-
<PAGE> 8
TABLE OF CONTENTS
ARTICLE PAGE
I. Nontrusteed, Trust, and Trustee ..................................... 4
II. Plan Administrator .................................................. 4
III. Plan Year ........................................................... 5
IV. Compensation ........................................................ 6
V. Highly Compensated Employee ......................................... 7
VI. Service ............................................................. 8
VII. Eligibility Requirements ............................................10
VIII. Entry Date ..........................................................13
IX. Vesting .............................................................15
X. Contributions .......................................................18
XI. Contribution Period .................................................28
XII. Allocation of Contributions .........................................29
XIII. Limitations on Allocations ..........................................31
XIV. Investment of Participant's Account .................................32
XV. Life Insurance ......................................................32
XVI. Employer Stock ......................................................33
XVII. Withdrawals Preceding Termination ...................................34
XVIII. Loans to Participants, Beneficiaries and Parties-in-Interest ........38
XIX. Retirement and Disability ...........................................39
XX. Distribution of Benefits ............................................40
XXI. Qualified Preretirement Survivor Annuity ............................41
XXII. Amendment of the Plan ...............................................41
XXIII. Top-Heavy Provisions ................................................42
XXIV. Other Adopting Employer .............................................44
-3-
<PAGE> 9
================================================================================
Plan Document I. NONTRUSTEED, TRUST, AND TRUSTEE.
Section
================================================================================
- -- The Plan must have a Trustee if the Employer has elected Employer Stock,
Loans, investment in Life Insurance, and/or any investment other than through a
contract with Connecticut General Life Insurance Company.
- -- If the plan is trusteed, the Employer must apply for a Trust Tax
Indentifcation Number, unless the Trust already has obtained one, even if
CG Trust Company has been appointed as the Plan's Trustee.
- --------------------------------------------------------------------------------
The Plan is:
1.39 [ ] A. Nontrusteed.
- --------------------------------------------------------------------------------
1.73, 1.74 [ ] B. Trusteed and Trustees are:
Trustee(s)
Name(s):
Address:
City: State: Zip:
Trust EIN:
- --------------------------------------------------------------------------------
1.73, 1.74 [X] C. Trusteed and CG Trust Company has been appointed as the
Plan's Trustee.
Trust
Name: CG Trust Company
Address: 525 West Monroe St., Suite 1800
Chicago, IL 60661-3629
Employer's Trust EIN: 36-2755954
- --------------------------------------------------------------------------------
================================================================================
Plan Document II: PLAN ADMINISTRATOR
Section
================================================================================
1.50 The Plan Administrator is:
Name: Pioneer Benefits Plan Committee
Pioneer Chlor Alkali Company, Inc.
Address: 700 Louisiana Suite 4200
City: Houston State: TX Zip: 77002
- --------------------------------------------------------------------------------
<PAGE> 10
================================================================================
Plan Document III. PLAN YEAR
Section
================================================================================
1.51 A. The Plan Year will mean:
[ ] 1. The 12-consecutive-month period commencing on (MM/DD/YY)
and each anniversary thereof except that the first
plan-year will commence on (MM/DD/YY) .
This election may be made only for new plans.
[X] 2. The 12-consecutive-month period commencing on (MM/DD/YY)
01/01 and each anniversary thereof.
- --------------------------------------------------------------------------------
<PAGE> 11
================================================================================
Plan Document IV. COMPENSATION
Section
================================================================================
-- (i) Election of options 1-6 below does not require a
separate nondiscrimination test.
-- (ii) If option 1, 2, or 3 is elected, you must elect the
same definition of Compensation in Section XIII,
Limitations on Allocations.
-- (iii) Options 1-6 include lump sum amounts and/or cash
bonuses. These amounts are included in compensation
in the year in which paid.
-- (iv) Options 4-9 may not be elected by a plan that uses an
integrated allocation formula.
-- (v) This compensation definition is for purposes of
allocating contributions under the Plan. For
nondiscrimination testing, the Employer may use any
definition of compensation that is based upon Code
section 414(s) or 415(c)(3). Use of options 7, 8, or
9 for nondiscrimination testing requires that the
employer satisfy a separate compensation
nondiscrimination test.
- --------------------------------------------------------------------------------
A. Indicate the number of the Compensation definition that
will be used for allocating each type of contribution.
Elective Deferral Contributions: 3
Matching Contributions: 3
Nonelective Contributions: 3
Employee contributions: 3
1.12 For purposes of allocating contributions, Compensation
means:
1.12(a) 1. Wages, Tips and Other Compensation Box on Form W-2.
1.12(b) 2. Section 3401(a) wages.
1.12(c) 3. 415 safe-harbor compensation.
1.12(d) 4. Modified Wages, Tips, and Other Compensation Box on
Form W-2.
1.12(e) 5. Modified section 3401(a) wages.
1.12(f) 6. Modified 415 safe-harbor compensation.
1.12(g) 7. Regular or base salary or wages.
1.12(h) 8. Regular or base salary or wages plus [ ] overtime
and/or [ ] bonuses.
1.12(i) 9. A "reasonable alternative definition of Compensation,"
as that term is used under Code section 414(s)(3) and
the regulations thereunder.
The definition of Compensation is:
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
-- Lump sum amounts and/or cash bonuses may be
excluded only if specified in this definition. Also
see note (v) above.
- --------------------------------------------------------------------------------
-6-
<PAGE> 12
================================================================================
Plan Document IV. COMPENSATION
Section
================================================================================
1.12 B. Compensation shall be determined over the following
determination period:
[ ] 1. The Plan Year.
[ ] 2. A 12-consecutive-month period beginning on
(MM/DD/ and ending with or within the Plan Year.
For Employees whose date of hire is less than
12 months before the end of the designated
12-month period, Compensation will be determined
over the Plan Year.
[X] 3. The Plan Year. However, for the Plan Year in which
an Employee's participation begins, the applicable
period is the portion of the Plan Year during which
the Employee is eligible to participate in the Plan.
- --------------------------------------------------------------------------------
1.12 C. Compensation shall/shall not include Employer contributions
made pursuant to a salary reduction agreement, which are not
includable in the gross income of the Employee under Code
section 125, 402(e)(3), 402(h)(1)(B) or 403(b).
[X] Shall [ ] Shall Not
- --------------------------------------------------------------------------------
1.12 D. The highest annual Compensation to be used in determining
allocations to a Participant's Account shall be:
$
-- Enter an amount if less than the $150,000 (as indexed)
limitation on compensation.
- --------------------------------------------------------------------------------
================================================================================
Plan Document V. HIGHLY COMPENSATED EMPLOYEE
Section
================================================================================
1.29 A. Highly Compensated Employees shall be determined using:
1.29(a) [X] 1. The Traditional Method.
1.29(b) [ ] 2. The Simplified Method for Employers in more than
one geographical area.
1.29(c) [ ] 3. The alternative Simplified Method.
1.29(d) [ ] 4. The alternative Simplified Method with Snapshot Day
basis .
The Snapshot Day is (fill in).
- --------------------------------------------------------------------------------
<PAGE> 13
================================================================================
Plan Document V. HIGHLY COMPENSATED EMPLOYEE
Section
================================================================================
1.29(a) B. If A.1. or A.2. is chosen above, the Look-Back Year
shall be:
[ ] 1. The 12-month period immediately preceding the
Determination Year.
[X] 2. The calendar year ending with or within the
Determination Year.
-- If B.2. is selected and the Determination Year (Plan Year)
is the calendar year, then the Look-Back Year is the same
12-month period as the Determination Year. This avoids having
to look back at data from a prior year.
-- However, if the Determination Year is not the calendar year,
the Determination Year calculation must be made on the basis of
a lag period (the period running from the end of the Look-Back
Year to the end of the Determination Year), with the applicable
dollar amounts adjusted on a pro rata basis for the number of
months in the lag period.
- --------------------------------------------------------------------------------
================================================================================
Plan Document VI. SERVICE
Section
================================================================================
Check off appropriate basis for determining service.
- --------------------------------------------------------------------------------
2A.3, 2A.9 A. Hours of Service or Elapsed Time
1. Years of Service shall be determined on the following
basis:
a. Eligibility: [ ] Hours of Service [X] Elapsed Time
b. Vesting: [X] Hours of Service [ ] Elapsed Time
c. Allocations of
Contributions: [X] Hours of Service [ ] Elapsed Time
2. If service is based on Hours of Service, Hours shall be
determined on the basis of:
[X] a. Actual hours for which paid or entitled to
payment.
[ ] b. Days Worked (10 Hours of Service).
[ ] c. Weeks Worked (45 Hours of Service).
[ ] d. Semimonthly payroll periods (95 Hours of Service).
[ ] e. Months Worked (190 Hours of Service).
-- For options b, c, d, and e: If the Employee would be
credited with 1 Hour of Service during the period,
the Employee shall be credited with the number of Hours
of Service indicated in parentheses.
- --------------------------------------------------------------------------------
<PAGE> 14
================================================================================
Plan Document VI. SERVICE
Section
================================================================================
B. Service with other employers.
1.24
1. Service with members of the Employer's controlled group of
corporations, affiliated service group, or group of business
under common control ("controlled group").
-- Service for an employer while the employer is part of the
controlled group must be taken into account.
a. Service with a member of the controlled group prior to
it becoming part of the controlled group will be
included for all purposes.
[ ] Yes [X] No
2A.5 2. Service with a predecessor organization.
-- Service with a predecessor organization of the
Employer must be taken into account if the Employer
maintains the Plan of the predecessor organization.
a. Service with a predecessor organization will be
included for all purposes even if the Employer does
not maintain the plan of the predecessor organization.
[ ] Yes [X] No
2A.5 3. Service with the following subsidiary(ies) or affiliated
organization, not related to the Employer under the rules of
Code sections 414(b), (c) or (m), shall be considered
Service for all purposes of this plan:
None
-- Service credited under 1.a, 2.a and 3 must apply to all
similarly situated Employees, must be credited for a
legitimate business reason, and must not be design or
operation discriminate significantly in favor of Highly
Compensated Employees.
- --------------------------------------------------------------------------------
-9-
<PAGE> 15
================================================================================
Plan Document VII. ELIGIBILITY REQUIREMENTS
Section
================================================================================
- -- Check or fill out appropriate requirements for each type of contribution in
the Plan.
- --------------------------------------------------------------------------------
2A.5(a), 2B.1 A. Eligibility Requirements
1. If Employer is a Partnership or Sole Proprietorship:
Self-Employed Individuals are eligible to participate in
the Plan.
[ ] Yes [ ] No
2. Immediate Participation.
-- No age or service requirement.
[ ] Elective Deferral Contributions
[ ] Matching Contributions
[ ] Nonelective Contributions
[ ] Employee Contributions
3. Service Requirement.
-- Not to exceed 1 year if graded vesting; not to exceed 2
years if 100% immediate vesting. Not to exceed 1/2 year if
graded vesting or 1-1/2 years if 100% immediate vesting if
annual Entry Date is chosen in Section VIII "Entry Date."
Not to exceed 1 year for Elective Deferral Contributions.
[X] Elective Deferral Contributions: 1/2 (indicate
number of years)
[X] Matching Contributions: 1/2 (indicate number of
years)
[X] Nonelective Contributions: 1/2 (indicate number of
years)
[X] Employee Contributions: 1/2 (indicate number of
years)
-- Fill in the blank(s) above with the amount of service
required. Any service requirement not in units of whole
years requires service for eligibility to be determined
based on elapsed time (see Section VI.A.1.a).
4. Age Requirement.
-- Not greater than 21 years. If annual entry date is chosen
in Section VIII "Entry Date," not greater than 20-1/2 years.
[X] Elective Deferral Contributions: 18 (indicate
minimum age)
[X] Matching Contributions: 18 (indicate minimum age)
[X] Nonelective Contributions: 18 (indicate minimum
age)
[X] Employee Contributions: 18 (indicate minimum age)
5. Employees who were employed on or before the initial
Effective Date of the Plan or the Effective Date of the
amendment and restatement of the Plan, as indicated on page
2, shall/shall not be immediately eligible without regard to
any Age and/or Service requirements specified in 2 or 3
above.
[ ] Shall [X] Shall Not
- --------------------------------------------------------------------------------
<PAGE> 16
================================================================================
Plan Document VII. ELIGIBILITY REQUIREMENTS
Section
================================================================================
2B.1 B. Job Class Requirements
An Employee must be a member of one or more of the
following selected classifications:
1. No Job Class Requirements:
[ ] Elective Deferral Contributions
[ ] Matching Contributions
[ ] Nonelective Contributions
[ ] Employee Contributions
2. Salaried:
[X] Elective Deferral Contributions
[X] Matching Contributions
[X] Nonelective Contributions
[X] Employee Contributions
3. Hourly:
[X] Elective Deferral Contributions
[X] Matching Contributions
[X] Nonelective Contributions
[X] Employee Contributions
4. Clerical:
[X] Elective Deferral Contributions
[X] Matching Contributions
[X] Nonelective Contributions
[X] Employee Contributions
5. Employees whose employment is governed by a collective
bargaining agreement represented by the following
union: _______________________________________________
[ ] Elective Deferral Contributions
[ ] Matching Contributions
[ ] Nonelective Contributions
[ ] Employee Contributions
6. Other (fill in): _____________________________________
[ ] Elective Deferral Contributions
[ ] Matching Contributions
[ ] Nonelective Contributions
[ ] Employee Contributions
-- "Part-time" Employees may not be excluded.
- --------------------------------------------------------------------------------
-11-
<PAGE> 17
================================================================================
Plan Document VII. ELIGIBILITY REQUIREMENTS
Section
================================================================================
2B.1 C. Additional Requirements
An Employee must be in the following designated
divisions(s) of the Employer:
___________________________________________________________
___________________________________________________________
[ ] Elective Deferral Contributions
[ ] Matching Contributions
[ ] Nonelective Contributions
[ ] Employee Contributions
- --------------------------------------------------------------------------------
2B.1 D. An Employee must not be a member of any one of the
following groups:
1. Union.
-- Employees who are members of a union are defined as:
Employees included in a unit of Employees covered by a
collective bargaining agreement between the employer and
employee representatives, if retirement benefits were the
subject of good faith bargaining and if two percent or less
of the employees of the Employer who are covered pursuant
to that agreement are professional employees as defined in
section 1.410(b)-9 of the regulations. For this purpose,
the term "employee representatives" does not include any
organization more than half of whose members are Employees
who are owners, officers, or executives of the Employer,
unless the collective bargaining agreement provides for
coverage under the Plan.
[X] Elective Deferral Contributions
[X] Matching Contributions
[X] Nonelective Contributions
[X] Employee Contributions
2. Nonresident aliens (within the meaning of Code section
7701(b)(1)(B)) who receive no earned income (within the
meaning of Code section 911(d)(2) from the Employer
that constitutes income from sources within the United
States (within the meaning of Code section 861(a)(3)).
[X] Elective Deferral Contributions
[X] Matching Contributions
[X] Nonelective Contributions
[X] Employee Contributions
- --------------------------------------------------------------------------------
-12-
<PAGE> 18
================================================================================
Plan Document VII. ELIGIBILITY REQUIREMENTS
Section
================================================================================
3. Employees covered by the following designated qualified
employee benefit plans:
_______________________________________________________
_______________________________________________________
[ ] Elective Deferral Contributions
[ ] Matching Contributions
[ ] Nonelective Contributions
[ ] Employee Contributions
- --------------------------------------------------------------------------------
1.15 E. The Plan covers Employees whose conditions of employment
are mandated under the Davis-Bacon Act.
[ ] Yes [X] No
- --------------------------------------------------------------------------------
================================================================================
Plan Document VII. ENTRY DATE
Section
================================================================================
- -- Check the appropriate requirement for Entry Date.
- --------------------------------------------------------------------------------
1.25 A. Immediately:
[ ] Elective Deferral Contributions
[ ] Matching Contributions
[ ] Nonelective Contributions
[ ] Employee Contributions
- --------------------------------------------------------------------------------
1.25 B. The first day of any month:
[X] Elective Deferral Contributions
[X] Matching Contributions
[X] Nonelective Contributions
[X] Employee Contributions
- --------------------------------------------------------------------------------
1.25 C. Quarterly (that is, three months apart) on each:
(MM/DD ____, or (MM/DD) ____, or
(MM/DD ____, or (MM/DD) ____.
-- Fill in dates.
[ ] Elective Deferral Contributions
[ ] Matching Contributions
[ ] Nonelective Contributions
[ ] Employee Contributions
- --------------------------------------------------------------------------------
-13-
<PAGE> 19
================================================================================
Plan Document VIII. ENTRY DATE
Section
================================================================================
1.25 D. Semiannually (that is, six months apart) on each:
(MM/DD) ____, or (MM/DD) ____.
-- Fill in dates.
[ ] Elective Deferral Contributions
[ ] Matching Contributions
[ ] Nonelective Contributions
[ ] Employee Contributions
- --------------------------------------------------------------------------------
1.25 E. Annually, on each (MM/DD) ____.
-- Fill in date.
[ ] Elective Deferral Contributions
[ ] Matching Contributions
[ ] Nonelective Contributions
[ ] Employee Contributions
- --------------------------------------------------------------------------------
1.25 F. The first day nearest to the date(s) selected in B, C, D or
E above, whether before or after that date, that the
Participant meets the Eligibility Requirements.
[ ] Elective Deferral Contributions
[ ] Matching Contributions
[ ] Nonelective Contributions
[ ] Employee Contributions
-- Allows retroactive entry into the Plan. This may have an
effect on various nondiscrimination tests for the Plan.
- --------------------------------------------------------------------------------
-14-
<PAGE> 20
================================================================================
Plan Document IX. VESTING
Section
================================================================================
1.76 A. Vesting Percentage.
The Vesting Schedule, based on number of Years or Periods
of Service, shall be as indicated below. Indicate the
number of the vesting schedule that applies to any
Nonelective Contributions, Matching Contributions, and
Prior Employer Contributions. The vesting schedules are
depicted in 1 through 8, below.
Nonelective Contributions are subject to vesting
schedule: 8
Matching Contributions are subject to vesting
schedule: 8
Prior Employer Contributions are subject to vesting
schedule:
1. Immediately = 100%
2. 0-3 Years = 0%
3 Years = 100%
3. 1 Year = 20%
2 Years = 40%
3 Years = 60%
4 Years = 80%
5 Years = 100%
4. 0-3 Years = 0%
3 Years = 20%
4 Years = 40%
5 Years = 60%
6 Years = 80%
7 Years = 100%
5. 0-2 Years = 0%
2 Years = 20%
3 Years = 40%
4 Years = 60%
5 Years = 80%
6 Years = 100%
6. 0-5 Years = 0%
5 Years = 100%
7. 1 Year = 25%
2 Years = 50%
3 Years = 75%
4 Years = 100%
- --------------------------------------------------------------------------------
-15-
<PAGE> 21
================================================================================
Plan Document IX. VESTING
Section
================================================================================
8. Other. Must be at least as liberal as #4 or #6 above.
1 Year = 25%
2 Years = 50%
3 Years = 100%
=
=
=
=
- --------------------------------------------------------------------------------
2A.5(b) B. The vesting computation period shall be based on the
Employee's service in the:
[X] Plan Year [ ] Employment year
- --------------------------------------------------------------------------------
2A.7, 2A.10 C. Excluded Years or Periods of Service.
The vesting percentage shall be based on all Years of
Service (i.e., completing 1000 Hours of Service) or Periods
of Service (i.e., Elapsed Time), EXCEPT that the following
shall be excluded:
Years or Periods of Service:
[ ] 1. Prior to the time the Participant attained age 18.
[ ] 2. During which the Employer did not maintain the plan
or predecessor plan.
[ ] 3. During which the Participant elected not to
contribute to a plan which required Employee
Contributions.
[ ] 4. Rule of Parity (Elapsed Time).
-- Rule of Parity (Elapsed Time): In the event a
reemployed Employee has no vested interest in
Employer Contributions at the time the break
occurred, and has since incurred 5 consecutive
1-year Breaks-in-Service, and has a Period of
Severance which equals or exceeds his prior Period
of Service, such prior Service may be disregarded.
[ ] 5. Rule of Parity (Hours of Service).
-- Rule of Parity (Hours of Service): Years of
Service prior to a Break-in-Service may be
disregarded if the participant had no vested
interest in Employer Contributions at the time the
break occurred, and the Participant has since
incurred 5 consecutive 1-year Breaks-in-Service, and
the number of consecutive 1-year Breaks-in-Service
is at least as great as the Years of Service before
the break occurred.
[ ] 6. Prior to any 1-Year Break-in-Service until the
Employee completes a Year of Service following
reemployment.
[X] 7. None of the above.
- --------------------------------------------------------------------------------
<PAGE> 22
================================================================================
Plan Document IX. VESTING
Section
================================================================================
3D.1, 3D.2, D. Forfeitures.
2A.7, 2A.10
1. Forfeitures will occur:
[ ] a. Immediately.
[ ] (1) Optional Payback Method.
[ ] (2) Required Payback Method.
[X] b. Upon a 1-Year Break-in-Service.
[X] (1) Optional Payback Method.
[ ] (2) Required Payback Method.
2. Forfeitures will be:
[X] a. Used as an Employer Credit.
[ ] b. Reallocated to Participants' Accounts.
[ ] c. Used as an Employer Credit and then, to the extent
any Forfeitures remain, reallocated to
Participants' Accounts.
-- If choice IX.D.2.b or c is selected and the Plan
provides Matching Contributions, the Actual
Contribution Percentage (ACP) Test will be affected.
- --------------------------------------------------------------------------------
-17-
<PAGE> 23
================================================================================
Plan Document X. CONTRIBUTIONS
Section
================================================================================
2C.1(k)(1) A. Elective Deferral Contributions
1. Availability/Amount
[ ] Not Available under the Plan.
[X] Available under the Plan (complete the
following).
Each Participant MAY elect to have his
Compensation actually paid during the Plan Year
reduced by:
[ ] a. %.
[ ] b. up to %.
[X] c. from 1% to 15%.
[ ] d. up to the maximum percentage
allowable, not to exceed the
limits of Code sections 402(g)
and 415.
-- Lump sum amounts and/or cash bonuses must be
subject to the salary deferral election unless
the definition of compensation in Section
IV.A.9 has been elected and these amounts have
been specifically excluded from that
compensation definition. Lump sum amounts and
cash bonuses are deferred upon and tested in
the Plan Year in which paid.
2. Modification
A Participant may change the amount of Elective
Deferral Contributions the Participant makes to the
Plan (complete a and b):
[ ] a. per calendar year (may not be less
frequent than once).
[X] b. As of the following date(s) (MM/DD):
Once every 6 months
- --------------------------------------------------------------------------------
-18-
<PAGE> 24
================================================================================
Plan Document X. CONTRIBUTIONS
Section
================================================================================
B. Required Employee Contributions
2C.1(b) 1. Availability/Amount
[ ] Not Available under the Plan.
[X] Available under the Plan and must be made as a
condition of receiving an Employer Contribution.
-- Required Employee Contributions are NOT AVAILABLE
unless Elective Deferral Contributions are available.
Required Contributions shall be in the amount of:
[ ] a. % of Compensation actually paid during the
Contribution Period.
2C.1(k)(1) [X] b. Not less than 1% nor more than 10% of
Compensation actually paid during the
Contribution Period.
2. Modification
A Participant may suspend Required Employee
Contributions for a minimum period of:
[ ] a. 1 month
[ ] b. 2 months
[X] c. 3 months
-- The suspension period may be of indefinite duration.
A Participant's reentry into the Plan shall be as of the
first Entry Date following the end of the suspension
period.
- --------------------------------------------------------------------------------
-19-
<PAGE> 25
<TABLE>
<S> <C> <C>
==============================================================================================================================
Plan Document X. CONTRIBUTIONS
Section
==============================================================================================================================
2C.1 C. Matching Contributions
Availability/Amount
[ ] Not Available under the Plan.
[X] Available under the plan (elect one from option 1 and, if applicable, elect
one from option 2).
1. [ ] a. Matching Contributions SHALL be based upon a percentage of
Considered Net Profits.
[X] b. Matching Contributions SHALL NOT be based upon a percentage of
Considered Net Profits.
2. Partnership Plans.
[X] a. The Employer SHALL make Matching Contributions to Partners.
-- Matching Contributions to Partners are treated in all respects as Elective
Deferral Contributions.
[ ] b. The Employer SHALL NOT make Matching Contributions to Partners.
For each $1.00 of either Elective Deferral Contributions or Required Employee Contributions, as selected
above, the Employer will contribute and allocate to each Participant's Matching Contribution Account an
amount equal to:
[X] 1. $0.50 (e.g., $.50).
[ ] 2. A discretionary percentage, to be determined by the Employer.
-- If option 2 is elected, the amount of the discretionary percentage should be
determined by an annual Board of Directors resolution setting the percentage.
[ ] 3. Graded Match.
-- If a or b is elected, the minimum and maximum percentages must be within the parameters
of the Elective Deferral election in Section X.A or the Required Employee Contribution
election in Section X.B of this Adoption Agreement.
-- Percentages for higher amounts must be lower than the percentages for lower amounts. For
example: 100% of the first $500, plus 75% of the next $500, plus 50% of the next $500.
[ ] a. Graded based upon the dollar amount of each Participant's Elective Deferral
Contributions or Required Employee Contributions as follows:
% of the first $ plus
------- -------
% of the next $ plus
------- -------
% of the next $ plus
------- -------
% of the next $ .
------- -------
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
-20-
<PAGE> 26
===============================================================================
Plan Document X. CONTRIBUTIONS
Section
===============================================================================
[ ]b. Graded based upon the percentage of Compensation of
each Participant's Elective Deferral Contribution or
Required Employee Contribution as follows:
_______% of the first ________% plus
_______% of the next ________% plus
_______% of the next ________% plus
_______% of the next ________%
-- If 3.a or b is elected, additional testing will be
required to prove that the different contributions are
available on a nondiscriminatory basis.
[ ]4. Separate specific dollar amounts for different employees
(e.g., employees in different job classifications):
-- This option is available only for Plans covering
Employees whose conditions of employment are mandated
under the Davis-Bacon Act.
$______ (e.g., $.50) to employees in _____ (fill in)
$______ (e.g., $.50) to employees in _____ (fill in)
$______ (e.g., $.50) to employees in _____ (fill in)
$______ (e.g., $.50) to employees in _____ (fill in)
$______ (e.g., $.50) to employees in _____ (fill in)
Additional Formulas (fill in below):
-- Formulas must be the same type as above.
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
-- If 4 selected, additional testing will be required to
prove that the different contributions are available on a
nondiscriminatory basis.
- --------------------------------------------------------------------------------
-21-
<PAGE> 27
===============================================================================
Plan Document X. CONTRIBUTIONS
Section
===============================================================================
[ ] 5. Different graded matches for different employees (e.g.,
employees in different job classifications, divisions,
organizations, members of a controlled group of
corporations, etc.):
-- This option is available only for Plans covering
Employees whose conditions of employment are mandated
under the Davis-Bacon Act.
-- Percentages for higher amounts must be lower than the
percentages for lower amounts. For example: 100% of the
first $500, plus 75% of the next $500, plus 50% of the
next $500.
[ ] a. Graded based upon the dollar amount of Elective
Deferral Contributions or Required Contributions
of each Participant as follows:
Employees in ____ (fill in)
______ % of the first $_____ plus
______ % of the next $_____ plus
______ % of the next $_____ plus
______ % of the next $_____.
Employees in ____ (fill in)
______ % of the first $_____ plus
______ % of the next $_____ plus
______ % of the next $_____ plus
______ % of the next $_____.
Employees in ____ (fill in)
______ % of the first $_____ plus
______ % of the next $_____ plus
______ % of the next $_____ plus
______ % of the next $_____.
Additional Formulas (fill in below):
-- Formulas must be the same type as above.
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
- -------------------------------------------------------------------------------
-22-
<PAGE> 28
===============================================================================
Plan Document X. CONTRIBUTIONS
Section
===============================================================================
[ ] b. Graded upon the percentage of compensation of the
Elective Deferral Contributions or Required Contributions
of each Participant as follows:
-- This option is available only for Plans covering
Employees whose conditions of employment are mandated
under the Davis-Bacon Act.
-- Matching percentages for higher compensation
percentages must be lower than matching
percentages for lower compensation percentages. For
example: 100% of the first 3%, plus 75% of the next
2%, plus 50% of the next 2%.
Employees in ____ (fill in)
______ % of the first _____ % plus
______ % of the next _____ % plus
______ % of the next _____ % plus
______ % of the next _____ %
Employees in ____ (fill in)
______ % of the first _____ % plus
______ % of the next _____ % plus
______ % of the next _____ % plus
______ % of the next _____ %
Employees in ____ (fill in)
______ % of the first _____ % plus
______ % of the next _____ % plus
______ % of the next _____ % plus
______ % of the next _____ %
Additional Formulas (fill in below):
-- Formulas must be the same type as above.
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-- If 5.a or b is selected, additional testing will be required
to prove that the different contributions are available on a
nondiscriminatory basis.
- -------------------------------------------------------------------------------
-23-
<PAGE> 29
<TABLE>
<CAPTION>
================================================================================
Plan Document X. CONTRIBUTIONS
Section
================================================================================
<S> <C>
The Elective Deferral or Required Employee Contributions,
upon which Matching Contributions are made by the
Employer, shall not exceed:
[ ] 1. $ _____ for the Plan Year.
[X] 2. 4% of Participant's Compensation for the
Contribution Period.
[ ] 3. N/A.
True-Up Contributions:
The Employer may/may not contribute a True-Up Contribution
for each Participant at the end of the Plan Year so that
the total Matching Contribution for each Participant is
calculated on an annual basis.
[ ] May [X] May not
Additional Matching Contributions:
In addition, at the end of the Plan Year, the Employer may
contribute Additional Matching Contributions to be
allocated in the same proportion that the Matching
Contribution made on behalf of each Participant during the
Plan Year bears to the Matching Contribution made on
behalf of all Participants during the Plan Year.
[ ] Yes [X] No
- --------------------------------------------------------------------------------
</TABLE>
-24-
<PAGE> 30
================================================================================
Plan Document X. CONTRIBUTIONS
Section
================================================================================
2C.1 D. Nonelective Contributions
-- If you choose to make a Nonelective Contribution, each
Employee eligible to participate in the Plan and who satisfies
the Annual Allocation Requirement of Section XII.A or XII.B MUST
be given an allocation, regardless of whether they make Elective
Deferral Contributions.
Availability/Amount
[ ] Not Available under the Plan.
[X] Available under the Plan (complete the following).
The Contribution for each Contribution Period shall be:
[ ] 1. _____% of Considered Net Profits.
[ ] 2. _____% of Compensation of each Participant.
[ ] 3. The Employer will contribute an amount equal to $______
for each Participant.
[X] 4. Discretionary.
-- If option 4 is elected, the amount of the discretionary
contribution should be determined by an annual Board of Directors
resolution setting a fixed amount of contribution or a formula by
which a fixed amount can be determined.
[ ] 5. The Employer will contribute an amount equal to $_____
/hour or unit of each Participant (indicate dollar or
cents amount).
-- Option 5 may be chosen ONLY for Employees who are subject to a
Collective Bargaining Agreement.
[ ] 6. ____% of Considered Net Profits to ____ (fill in)
____% of Considered Net Profits to ____ (fill in)
____% of Considered Net Profits to ____ (fill in)
____% of Considered Net Profits to ____ (fill in)
____% of Considered Net Profits to ____ (fill in)
-- Fill in job classification.
- --------------------------------------------------------------------------------
-25-
<PAGE> 31
================================================================================
Plan Document X. CONTRIBUTIONS
Section
================================================================================
Additional Formulas (fill in below):
-- Formulas must be the same type as above.
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
[ ] 7. % of Compensation to each Participant in (fill in)
------ ----
% of Compensation to each Participant in (fill in)
------ ----
% of Compensation to each Participant in (fill in)
------ ----
% of Compensation to each Participant in (fill in)
------ ----
% of Compensation to each Participant in (fill in)
------ ----
-- Fill in job classification.
Additional Formulas (fill in below):
-- Formulas must be the same type as above.
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
-- Options 6 and 7 may be selected ONLY when a Plan
covers Employees whose conditions of employment are
mandated under the Davis-Beacon Act.
-- If option 6 or 7 is selected, subsection A.1
(Compensation to Compensation allocation) MUST be
chosen in Section XIII, "Allocation of Contributions."
-- If options 6 or 7 is selected, additional testing
will be required to prove that the different
contributions are available on a nondiscriminatory
basis.
Nonelective Contributions shall/shall not be based on
Considered Net Profits.
-- "Shall" must be chosen if option 1 is selected.
[ ] Shall [X] Shall not
================================================================================
-26-
<PAGE> 32
================================================================================
Plan Document X. CONTRIBUTIONS
Section
================================================================================
2C.1(b) E. Voluntary Employee Contributions
Availability/Amount
[X] Not Available under the Plan.
[ ] Available under the Plan (complete the
following).
[ ] Voluntary Employee Contributions SHALL be
permitted up to _______% of Compensation
actually paid during the Plan Year.
[ ] Voluntary Employee Contributions made in a
Lump Sum SHALL be permitted.
-- Voluntary Employee Contributions are NOT
AVAILABLE unless Elective Deferral Contributions
are available.
- --------------------------------------------------------------------------------
2C.3 F. Rollover Contributions
Availability
[X] 1. Rollover Contributions out of the Plan are always
available.
[X] Cash only.
[ ] Cash and Loan Notes from this and/or a prior
plan.
[X] 2. Rollover Contributions into the Plan:
[ ] Not Available under the Plan.
[X] Available under the Plan (complete the
following).
Cash Only or Cash and Loan Notes:
[X] Cash only.
[ ] Cash and Loan Notes from prior
plan.
Rollover contributions into the Plan
may be made by:
[X] Both eligible Employees and
Employees who would be eligible
except they do not yet meet the
Plan's age and/or service
requirement.
[ ] Eligible Employees only.
- --------------------------------------------------------------------------------
-27-
<PAGE> 33
<TABLE>
<S> <C> <C> <C>
==============================================================================================================================
Plan Document X. CONTRIBUTIONS
Section
==============================================================================================================================
7B.8, 7B.9 G. Transfer of Account Balances
Availability
[X] 1. Transfers of account balances out of the Plan are always available.
[ ] 2. Transfers of Account Balances into the Plan:
[ ] Not Available under the Plan.
[X] Available under the Plan.
- ------------------------------------------------------------------------------------------------------------------------------
==============================================================================================================================
Plan Document XI. CONTRIBUTION PERIOD
Section
==============================================================================================================================
1.14 A. The regular Contribution Period (by contribution type) shall be:
-- For 1 and 2 below, "Other" Contribution Period may not be longer than annual, but may be shorter than
4-weekly.
-- For 3 below, "Other" Contribution Period may not be longer than monthly, but may be shorter than
4-weekly.
1. Matching Contributions:
[ ] Annual [ ] 4-Weekly
[X] Monthly [ ] Other (specify) __________________
2. Nonelective Contributions:
[X] Annual [ ] 4-Weekly
[ ] Monthly [ ] Other (specify) __________________
3. Elective Deferral Contributions, Required Employee Contributions, and/or Voluntary
Employee Contributions:
-- Annual contribution period is not available for contributions in #3.
[X] Monthly [ ] 4-Weekly
[ ] Other (specify) ________
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-28-
<PAGE> 34
================================================================================
Plan Document XII. ALLOCATION OF CONTRIBUTIONS
Section
================================================================================
2C.1(f) A. Allocation Formula for Nonelective Contribution
Complete the following ONLY if Section X.D is 1, 4, 6 or 7.
-- If Section X.D is 6 or 7, the Compensation to
Compensation allocation formula (1 below) must be chosen.
The Nonelective Contribution will be allocated to
Participants who meet the requirements of Section XII.B or C
as follows:
[X] 1. Compensation to Compensation:
In the same ratio as each Participant's Compensation
bears to the total Compensation of all Participants.
[ ] 2. Integrated with Social Security:
a. Choose one of the following methods:
[ ] Step-Rate Method
For each Plan Year, the Employer will
contribute an amount equal to ___% of each
Participant's Compensation up to the Social
Security Integration Level, plus ___% of
each Participant's Compensation in excess of
the Social Security Integration Level.
However, in no event will the Excess
Contribution percentage exceed the amount
specified in Section 2C.1(f)(2)(B) of the
Plan.
[ ] Maximum Disparity Method
For each Plan Year, the Employer's
Nonelective Contribution shall be allocated
in the manner stated in Section 2C.1(f)(3)
of the Plan in order to maximize permitted
disparity.
b. Social Security Integration Level:
[ ] i. $___ (not to exceed the Social Security
Taxable Wage Base).
[ ] ii. The Social Security Taxable Wage Base
in effect on the first day of the Plan
Year.
[ ] iii. ___% of the Social Security Taxable
Wage Base (not to exceed 100%).
- --------------------------------------------------------------------------------
-29-
<PAGE> 35
================================================================================
Plan Document XII. ALLOCATION OF CONTRIBUTIONS
Section
================================================================================
2C.1(g) B. Annual Allocation
An allocation to the annual Nonelective Contribution, annual
Matching Contribution, and/or Additional Matching
Contribution made by the Employer will be made to each
Participant who:
[ ] 1. Is a Participant on ANY day during the Plan Year
regardless of Service credited during the Plan Year.
[ ] 2. Is credited with a Year of Service in the Plan Year
for which the contribution is made.
[ ] 3. Is a Participant on the last day of the Plan Year.
[X] 4. Is credited with a Year of Service in the Plan Year
for which the contribution is made and is a
Participant on the last day of the Plan Year.
In addition, an allocation will be made by the Employer on
behalf of any Participant who retires, dies or becomes
disabled during the Plan Year, regardless of the number of
Hours of Service credited to such Participant and regardless
of the number of Hours of Service credited to such
Participant and regardless of whether such Participant is a
participant on the last day of the Plan Year.
Annual Nonelective Contribution [ ] Yes [X] No
Annual Matching Contribution [ ] Yes [ ] No
Additional Matching Contribution [ ] Yes [ ] No
- --------------------------------------------------------------------------------
2C.1(g) C. Nonannual Allocation Requirement
An allocation of the nonannual Matching Contribution or
nonannual Nonelective Contribution made by the Employer will
be made to each Participant who:
[ ] 1. Is a Participant on any day of the
Contribution Period.
[X] 2. Is a Participant as of the last day of the
Contribution Period.
In addition, an allocation will be made by the Employer on
behalf of any Participant who retires, dies, or becomes
disabled during the Contribution Period, regardless of
whether such Participant is a Participant as of the last day
of the Contribution Period.
Nonannual Nonelective Contribution [ ] Yes [ ] No
Nonannual Matching Contribution [ ] Yes [X] No
- --------------------------------------------------------------------------------
-30-
<PAGE> 36
================================================================================
Plan Document XIII. LIMITATIONS ON ALLOCATIONS
Section
================================================================================
4B A. If any Participant is covered by another qualified defined
contribution plan maintained by the Employer, other than a
Master or Prototype plan:
-- Complete part A if you: (1) maintain, or at any time
maintained, another qualified retirement plan in which any
Participant in this Plan is, was, or could be, a participant;
or (2) maintain a Code section 415(1)(2) individual medical
account, for which amounts are treated as Annual Additions for
any Participant in this Plan.
[X] 1. N/A. The Employer has no other defined
contribution plan(s).
[ ] 2. The provisions of Section 4B.5 of the Plan
will apply, as if the other plan were a
Master or Prototype plan.
- -------------------------------------------------------------------------------
4B B. If any Participant is or ever has been a Participant in a
qualified defined benefit plan maintained by the Employer:
-- Complete part B if you maintain, or at any time maintained,
another qualified retirement plan in which any Participant
in this Plan is, was, or could be a participant.
[X] 1. N/A. The Employer has no defined benefit
plan(s).
[ ] 2. In any Limitation Year, the Annual Additions
credited to the Participant under this Plan
may not cause the sum of the Defined Benefit
Plan Fraction and the Defined Contribution
Fraction to exceed 1.0. If the Employer
contributions that would otherwise be
allocated to the Participant's account during
such year would cause the 1.0 limitation to be
exceeded, the allocation will be reduced so
that the sum of the fraction equals 1.0. Any
contributions not allocated because of the
preceding sentence will be allocated to the
remaining Participants according to the Plan's
allocation formula. If the 1.0 limitation is
exceeded because of an Excess Amount, such
Excess Amount will be reduced in accordance
with Section 4B.4 of the Plan.
[ ] 3. Provide the method under which the Plan
involved will satisfy the 1.0 limitation in a
manner that precludes Employer discretion.
- -------------------------------------------------------------------------------
31
<PAGE> 37
================================================================================
Plan Document XIII. LIMITATIONS ON ALLOCATIONS
Section
================================================================================
C. Compensation will mean all of each Participant's:
-- Every must complete Section C. If option 1, 2, or 3 was
selected in Section IV.A., you must make the same selection
here.
4B.1(b)(1)
[ ] 1. Wages, Tips, and Other Compensation Box on Form W-2.
4B.1(b)(2)
[ ] 2. Section 3401(a) wages.
4B.1(b)(3)
[X] 3. 415 safe-harbor compensation.
- --------------------------------------------------------------------------------
4B.1(h) D. The Limitation Year shall be:
-- Everyone must complete Section D.
[X] 1. The Calendar Year.
[ ] 2. The 12-month period coinciding with the Plan Year.
[ ] 3. The 12-month period beginning on (MM/DD): .
- --------------------------------------------------------------------------------
================================================================================
Plan Document XIV. INVESTMENT OF PARTICIPANT'S ACCOUNTS
Section
================================================================================
5A.1 A. The Participant shall/shall not have the authority to
direct the Investment of Contributions made by the Employer.
[X] Shall [ ] Shall Not
- --------------------------------------------------------------------------------
5A.1 B. If SHALL is elected above, complete the following.
Those having authority to direct the investment of the
Participant's Account are (choose all that apply):
[X] 1. Participants who are active Employees.
[X] 2. Participants who are former employees and continue
to maintain an account in the Plan or Trust.
[X] 3. Beneficiaries.
[X] 4. Alternative Payees.
- --------------------------------------------------------------------------------
================================================================================
Plan Document XV. LIFE INSURANCE
Section
================================================================================
5B.1 A. Available as a Participant investment:
[ ] Yes [X] No
- --------------------------------------------------------------------------------
32
<PAGE> 38
================================================================================
Plan Document XV. LIFE INSURANCE
Section
================================================================================
B. If yes is elected above, Life Insurance shall be available
to:
[ ] 1. All Participants.
[ ] 2. Only to the specified group of Participants
(fill in below):
-- If subsection 2 is checked, separate nondiscrimination
testing will be required.
- -------------------------------------------------------------------------------
================================================================================
Plan Document XVI. EMPLOYER STOCK
Section
================================================================================
- -- Before electing Employer Stock as an investment option, you should consult
your legal counsel on any federal or state securities law requirements arising
from offering Employer Stock as an investment option under your Plan and
whether use of this document is appropriate for you under those laws. Neither
Connecticut General Life Insurance Company nor any of its employees can advise
you on these matters.
- -------------------------------------------------------------------------------
1.45 A. Investment in Employer Stock is:
[ ] Permitted.
[X] Not Permitted.
-- You must complete the following subsections B and C if
investment in Employer Stock is permitted and Participants
have the authority to direct the investment of Employer
Contributions.
- -------------------------------------------------------------------------------
1.45 B. Investment in Employer Stock within the Plan by officers
or directors of the Employer or by an individual who owns
more than 10% of the Employer's Stock is:
[ ] Permitted.
[ ] Not Permitted.
- -------------------------------------------------------------------------------
1.45 C. The Trustee:
[ ] 1. Will vote the shares of the Employer Stock.
[ ] 2. Will vote the shares of the Employer Stock in
accordance with any instructions received by
the Trustee from the Participant.
-- Option 2 must be selected if CG Trust Company is the
Trustee.
[ ] 3. May request voting instructions from the
Participants.
- --------------------------------------------------------------------------------
-33-
<PAGE> 39
================================================================================
Plan Document XVII. WITHDRAWAL PRECEDING TERMINATION
Section
- -- Complete only the sections for the type of contributions in your plan.
================================================================================
3E.1(a) A. Withdrawal of Required Employee Contributions.
-- Withdrawal may be for any reason.
[ ] Not Available under the Plan.
[X] Available under the Plan.
If available, Required Employee Contributions may be
withdrawn:
[ ] Once each 6 months.
[X] Once each 12 months.
[ ] Other (specify) ___ .
The Contribution suspension period following a
withdrawal of Required Employee Contributions shall be:
-- You must choose one of the suspension periods shown.
Related Employer Contributions will be suspended for
the same period.
[ ] 6 Months.
[X] 12 Months.
[ ] 24 Months.
- --------------------------------------------------------------------------------
3E.1(b) B. Withdrawal of Voluntary Employee Contributions.
-- Withdrawal may be for any reason.
[X] Not Available under the Plan.
[ ] Available under the Plan.
If available, Voluntary Employee Contributions may be
withdrawn:
[ ] Once each 6 months.
[ ] Once each 12 months.
[ ] Other (specify) ___ .
- --------------------------------------------------------------------------------
-34-
<PAGE> 40
================================================================================
Plan Document XVII. WITHDRAWALS PRECEDING TERMINATION
Section
================================================================================
C. Withdrawal of Elective Deferral Contributions.
[ ] Not Available under the Plan.
[X] Available under the Plan.
If available, select the conditions for withdrawal:
3E.2 [ ] Withdrawal upon Participant's attainment
of age 59-1/2.
3E.5 [X] Withdrawal for Serious Financial Hardship.
-- If a Participant makes a withdrawal of Elective
Deferral Contributions due to a Serious Financial
Hardship, the Participant must be suspended from
making any additional Elective Deferral
Contributions for a period of 12 months.
- --------------------------------------------------------------------------------
D. Withdrawal of Employer Contributions (Matching, Nonelective
and/or Prior Employer Contributions).
[ ] Not Available under the Plan.
[X] Available under the Plan.
-- If Prior Employer Contributions are money purchase plan
contributions, they may not be withdrawn.
3E.3 If available, select the conditions for withdrawal:
[ ] 1. Withdrawal upon Participant's attainment of
age 59-1/2.
Available from:
[ ] a. Matching Contributions.
[ ] b. Nonelective Contributions.
[ ] c. Prior Employer Contributions.
- --------------------------------------------------------------------------------
-35-
<PAGE> 41
================================================================================
Plan Document XVII. WITHDRAWALS PRECEDING TERMINATION
Section
================================================================================
3E.3 [ ] 2. Withdrawals to active Participants who have been
Participants for a minimum of 60 consecutive months.
Available from:
[ ] a. Matching Contributions.
[ ] b. Nonelective Contributions.
[ ] c. Prior Employer Contributions.
Frequency of withdrawal:
[ ] Once each 6 months.
[ ] Once each 12 months.
[ ] Other (specify) ____.
Suspension Period following withdrawal:
[ ] N/A.
[ ] 6 months.
[ ] 12 months.
[ ] 24 months.
3E.4 [X] 3. Withdrawal for Serious Financial Hardship.
Available from:
[X] a. Matching Contributions.
[X] b. Nonelective Contributions.
[ ] c. Prior Employer Contributions.
Prior Employer Contributions:
Prior Employer Contributions are contributions made to the Plan by the
Employer prior to the Plan's original conversion and/or restatement on
_____ (fill in date).
-36-
<PAGE> 42
================================================================================
Plan Document XVII. WITHDRAWALS PRECEDING TERMINATION
Section
================================================================================
3E.6 E. Withdrawal of Rollover Contributions:
[X] Not Available under the Plan.
[ ] Available under the Plan.
If available, Rollover Contributions may be
withdrawn:
[ ] Once per Plan Year.
[ ] Every 6 Months.
[ ] Every 3 Months.
[ ] Every Month.
[ ] Anytime.
- --------------------------------------------------------------------------------
3E.6 F. Withdrawal of Qualified Voluntary Employee Contributions
(QVEC Contributions)
-- Applicable only if this is a readoption of an existing plan.
If selected, Contributions may be withdrawn for any reason.
[ ] Not Available under the Plan.
[ ] Available under the Plan.
If Available, Qualified Voluntary Employee
Contributions may be withdrawn:
[ ] Once per Plan Year.
[ ] Every 6 Months.
[ ] Every 3 Months.
[ ] Every Month.
[ ] Anytime.
- --------------------------------------------------------------------------------
-37-
<PAGE> 43
================================================================================
Plan Document XVII. WITHDRAWALS PRECEDING TERMINATION
Section
================================================================================
3E.1(c) G. Withdrawal of Prior Required Employee Contributions.
-- Withdrawal may be for any reason.
[ ] Not Available under the Plan.
[ ] Available under the Plan.
If available, Prior Required Employee
Contributions may be withdrawn:
[ ] Once each 6 months.
[ ] Once each 12 months.
[ ] Other (specify) ___ .
Prior Required Employee Contributions are posttax
contributions made by Employees in order to receive an
Employer contribution and which were made before the Plan's
original conversion and/or restatement on (fill in date).
- --------------------------------------------------------------------------------
3E.1(d) H. Withdrawal of Prior Voluntary Employee Contributions.
-- Withdrawal may be for any reason and may be taken at any
time.
[ ] Not Available under the Plan.
[ ] Available under the Plan.
Prior Voluntary Employee Contributions are voluntary
contributions made by Employees prior to these types of
contribution being eliminated as a plan option on (fill
in date).
- --------------------------------------------------------------------------------
================================================================================
Plan Document XVIII. LOANS TO PARTICIPANTS, BENEFICIARIES AND
Section PARTIES-IN-INTEREST
================================================================================
5C A. Loans are permitted.
[X] Yes
-- If yes, Plan must be trusteed.
[ ] No
- --------------------------------------------------------------------------------
-38-
<PAGE> 44
================================================================================
Plan Document XVIII. LOANS TO PARTICIPANTS, BENEFICIARIES
Section AND PARTIES-IN-INTEREST
================================================================================
5C B. Loans are available only from the following sources:
-- Qualified Voluntary Employee Contributions (QVEC
Contributions) may not be taken in a loan.
[X] All Sources.
[ ] List Sources:
- -------------------------------------------------------------------------------
================================================================================
Plan Document XIX. RETIREMENT AND DISABILITY
Section
================================================================================
1.40 A. Normal Retirement Age is:
[X] 1. The date the Participant attains age 65
(not to exceed 65).
[ ] 2. The later of:
a. The date the Participant attains age (not
to exceed 65), or
b. The (not to exceed 5th) anniversary of
the Participation Commencement Date.
-- Note regarding 2.b above: If, for Plan Years
beginning before January 1, 1988, Normal
Retirement Age was determined with reference to
the anniversary of the Participation Commencement
Date (more than 5 but not to exceed 10 years),
the anniversary date for Participants who first
commenced participation under the Plan before the
first Plan Year beginning on or after January 1,
1988 shall be the earlier of (A) the tenth
anniversary of the date the Participant commenced
participation in the Plan (or such anniversary as
had been elected by the Employer, if less than
10) or (B) the fifth anniversary of the first day
of the first Plan Year beginning on or after
January 1, 1988. The Participation Commencement
Date is the first day of the first Plan Year in
which the Participant commenced participation in
the Plan.
- --------------------------------------------------------------------------------
-39-
<PAGE> 45
================================================================================
Plan Document XIX. RETIREMENT AND DISABILITY
Section
================================================================================
1.18 B. Early Retirement by Participants
1. Early Retirement by Participants is:
[X] a. Not Permitted.
[ ] b. Permitted. Subject to the following conditions:
[ ] i. Age (not to exceed 65).
[ ] ii. Years of Service .
[ ] iii. Age (not to exceed 65)
and Years of Service.
[ ] iv. Age (not to exceed 65)
and Years of Participation.
- --------------------------------------------------------------------------------
1.16 C. Disability
1. The Employer shall/shall not make contributions on behalf
of disabled Participants who are Nonhighly Compensated
Employees on the basis of the Compensation each such
Participant would have received for the Limitation Year if
the Participant had been paid at the rate of Compensation
paid immediately before becoming permanently and totally
disabled.
[X] Shall [ ] Shall Not
-- All such contributions are 100% vested and nonforfeitable
when made.
- --------------------------------------------------------------------------------
================================================================================
Plan Document XX. DISTRIBUTION OF BENEFITS
Section
================================================================================
3A.1 A. Distribution of benefits should be in the form of (check
all that apply):
[X] 1. Single Sum.
[X] 2. Life Annuity.
[ ] 3. Installment Payments.
[X] 4. Installment Refund Annuity.
[ ] 5. Employer Stock, to the extent the Participant is
invested therein.
- --------------------------------------------------------------------------------
B. Distribution Timing
[ ] 1. All Participants may elect to defer their
distributions.
[X] 2. Participants who terminate employment and whose
account balances never exceeded $3,500 shall receive
an immediate, lump sum cash distribution.
- --------------------------------------------------------------------------------
-40-
<PAGE> 46
================================================================================
Plan Document XX. DISTRIBUTION OF BENEFITS
Section
================================================================================
C. Expenses - Deferred Participants.
1. Participants who elect to defer distribution of their
benefits shall/shall not pay for all fees associated
with administration of their deferral payment.
[X] Shall [ ] Shall Not
- -------------------------------------------------------------------------------
================================================================================
Plan Document XXI. QUALIFIED PRERETIREMENT SURVIVOR ANNUITY
Section
================================================================================
3C.4 The Qualified Preretirement Survivor Annuity shall be:
-- 100% is required for Plans allowing only single sum
distributions.
[X] 100% to the surviving spouse.
[ ] 50% to the surviving spouse.
- -------------------------------------------------------------------------------
================================================================================
Plan Document XXII. AMENDMENT TO THE PLAN
Section
================================================================================
7B A. The party having the authority to amend the Adoption
Agreement is the:
[ ] 1. Trustee(s).
-- Trustee(s) cannot be chosen if the Trustee is CG Trust.
[X] 2. Plan Administrator.
[X] 3. Plan Committee.
[ ] 4. Designated Representative of the Employer.
- --------------------------------------------------------------------------------
-41-
<PAGE> 47
================================================================================
Plan Document XXIII. TOP-HEAVY PROVISIONS
Section
================================================================================
7A.1(i) A. Method to be used to avoid dupplication of Top-Heavy Minimum
benefits when a non-Key Employee is a Participant in both
this Plan and a defined benefit plan maintained by the
Employer (select one response):
[X] 1. N/A. The Employer has no other plan(s).
[ ] 2. Single Plan Minimum Top-Heavy Allocation. A minimum
Top-Heavy contribution will be allocated to each
non-Key Employee's Participant Account in an amount
equal to:
[ ] a. The lesser of 3% of Compensation or the
highest percentage allocated to any Key
Employee.
[ ] b. % of Compensation (must be at least 3%).
[ ] 3. Multiple Plans Top-Heavy Allocation. In order to
satisfy Code section 415 and 416, and because of the
required aggregation of multiple plans, a minimum
Top-Heavy contribution will be allocated to each
non-Key Employee in an amount equal to:
[ ] a. Not Applicable. No other plan was in
existence prior to the Effective Date of
this Adoption Agreement.
[ ] b. 5% of Compensation, to be provided in a
defined contribution plan of the Employer.
[ ] c. 7-1/2% of Compensation, to be nonintegrated,
and provided in this Plan.
-- If c is chose, for all Plan Years in which this
Plan is Top-Heavy (but not Super Top-Heavy), the
Defined Benefit and Defined Contribution fractions
shall be computed using 125%.
[ ] 4. Enter the name of the plan(s) and specify the method
under which the plan(s) will provide Top-Heavy
Minimum Benefits to non-Key Employees [including any
adjustments required under Code section 415(e)]:
-- If 4 is selected, the method specified must preclude
Employer discretion and inadvertent omissions.
- --------------------------------------------------------------------------------
-42-
<PAGE> 48
================================================================================
Plan Document XXIII. TOP-HEAVY PROVISIONS
Section
================================================================================
7A.1 B. Present Value: In order to establish the present value to
compute the Top-Heavy Ratio, any benefit shall be
discounted only for mortality and interest, based on:
-- Complete B only if response to A is 2, 3, or 4. Fill in all
blanks.
[ ] 1. Interest Rate %.
[ ] 2. Mortality Table .
[ ] 3. Valuation Date .
- -------------------------------------------------------------------------------
7A.2 C. Where a non-Key Employee is a Participant in this and
another defined contribution plan(s) of the Employer,
choose which plan will provide the minimum Top-Heavy
contribution:
[X] 1. N/A. The Employer has no other plan.
[ ] 2. The minimum allocation will be met in this Plan.
[ ] 3. The minimum allocation will be met in the other
defined contribution plan. Enter the name of the
plan:
- -------------------------------------------------------------------------------
7A.3 D. Top-Heavy Vesting Schedule. In the event the plan becomes
Top-Heavy, the vesting schedule shall be:
-- Must meet one of the schedules below and must be at least
as liberal as the vesting schedule elected in Section IX.A.
[ ] 1. 100% vesting after (not to exceed 3)
years of Service.
[ ] 2. % vesting after 1 Year of Service
% (not less than 20) vesting after 2 Years
of Service
% (not less than 40) vesting after 3 Years
of Service
% (not less than 60) vesting after 4 Years
of Service
% (not less than 80) vesting after 5 Years
of Service
100% vesting after 6 Years of Service
[X] 3. Same vesting schedule(s) as elected in Adoption
Agreement Section IX (already meets Top-Heavy
minimum vesting requirements).
-- If the vesting schedule under the Plan shifts into the
above schedule for any Plan Year because of the Plan's
Top-Heavy status, such shift is an amendment to the vesting
schedule and the election provisions in Section 7B.1 of the
Plan shall apply.
-- The Top-Heavy vesting schedule will remain in effect even
if the Plan ceases to be Top Heavy.
- --------------------------------------------------------------------------------
-43-
<PAGE> 49
================================================================================
Plan Document XXIV. OTHER ADOPTING EMPLOYER
Section
================================================================================
6E.1, 6E.2 A. The following Adopting Employer(s) also adopt this plan
and have executed this Adoption Agreement:
-- Fill in below the names and the Employer Identification
Numbers (EINs) of Adopting Employers.
-- Must meet requirements of Plan definition of Employer,
Plan Section 1.24.
- --------------------------------------------------------------------------------
-44-
<PAGE> 50
The Employer hereby adopts the Connecticut General Life Insurance Company
Defined Contribution Prototype Profit Sharing/Thrift Plan with 401(k) Feature,
including all elections made in this Non-Standardized Adoption Agreement, and
the Employer agrees to be bound by all the terms of the Plan and by all the
terms of this Adoption Agreement and of the Annuity Contract. The Employer
further agrees that it will furnish promptly all information required by the
Trustee, if applicable, the Plan Administrator and the Insurance Company in
order to carry out their functions. The Employer shall notify the Trustee, if
applicable, the Plan Administrator and the Insurance Company promptly of any
changes in the status of the Employer which might affect the Employer's duties
and responsibilities hereunder.
The elections under this Adoption Agreement may be changed by the Employer from
time to time by a written instrument signed by the Employer, the Plan
Administrator and the Trustee, if applicable, and accepted by the Plan Sponsor.
The Employer consents to the exercise by the Plan Sponsor of the right to amend
the Plan and the Annuity Contract from time to time as it may deem necessary or
advisable.
By signing this Adoption Agreement, the Employer specifically acknowledges that
the Insurance Company has no authority: (1) to answer legal questions and that
all such questions shall be answered by legal counsel for the Employer; and (2)
to make determinations involved in the administration of the Plan and that all
such determinations shall be answered by the Employer's Plan Administrator or
other designated representative.
Upon execution of this Adoption Agreement by the Employer, the Plan shall be
effective with respect to that Employer as of the Effective Date specified
herein, provided the Plan Administrator and the Trustee, if applicable, shall
then or thereafter execute this Adoption Agreement to signify their acceptance
of their duties and responsibilities hereunder and provided further, the Plan
Sponsor will indicate its acceptance of the Employer in accordance with its
usual rules and practices.
The Adopting Employer may not rely on an opinion letter issued by the National
Office of the Internal Revenue Service as evidence that the Plan is qualified
under Internal Revenue Code section 401. In order to obtain reliance with
respect to plan qualification, the Employer must apply to the appropriate key
district office for a determination letter.
Connecticut General Life Insurance Company will inform the Employer of any
amendments made to the Plan or of the discontinuance or abandonment of such
Plan.
CAUTION: You should very carefully examine the elections you have made in this
Adoption Agreement and discuss them with your legal counsel. Failure to
properly fill out the Adoption Agreement may result in disqualification of your
plan. This Adoption Agreement may only be used in conjunction with Basic Plan
Document Number 03.
(Note: The Employer, Plan Administrator and Trustee, if applicable, must all
sign below.)
Executed at Houston, TX this 31st day of December, 1997.
Employer's Exact Name: JERRY BRADLEY
-------------------------------
Witness: /s/ [ILLEGIBLE] By: /s/ J.B. BRADLEY
------------------------ -------------------------------
Title: VICE PRESIDENT HUMAN RESOURCES
---------------------------------
Additional Adopting Employer's Exact Name:
---------------------------
Witness: By:
------------------------ -------------------------------
Title:
---------------------------------
-45-
<PAGE> 51
<TABLE>
<S> <C>
Additional Adopting Employer's Exact Name:
-------------------------------------------------------
Witness: By:
------------------------------- ---------------------------------------------------
Title:
--------------------------------------------------------
Additional Adopting Employer's Exact Name:
-------------------------------------------------------
Witness: By:
------------------------------- ---------------------------------------------------
Title:
--------------------------------------------------------
Additional Adopting Employer's Exact Name:
-------------------------------------------------------
Witness: By:
------------------------------- ---------------------------------------------------
Title:
--------------------------------------------------------
ACCEPTED this 31st day of December 1997.
Witness: /s/ [ILLEGIBLE] By (Plan Administrator): /s/ [ILLEGIBLE]
------------------------------- ---------------------------------------
Witness: By (Plan Administrator):
------------------------------- ---------------------------------------
Witness: By (Plan Administrator):
------------------------------- ---------------------------------------
Witness: By (Trustee):
------------------------------- -------------------------------------------------
Witness: By (Trustee):
------------------------------- -------------------------------------------------
Witness: By (Trustee):
------------------------------- -------------------------------------------------
ACCEPTED this 31st day of December 1997.
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By (Authorized Representative): /s/ BYRON OLIVER
----------------------------------------------------
</TABLE>
-46-
<PAGE> 52
<TABLE>
<CAPTION>
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
<S> <C>
Plan Description: Prototype Non-standardized Profit Sharing Plan with CODA
FFN: 50315620003-001 Case: 9401285 EIN: 06-0303370 Washington, DC 20224
BPD: 03 Plan: 001 Letter Serial No.: D365331a
Person to Contact: Ms. Arrington
o CONNECTICUT GENERAL LIFE INSURANCE CO. Telephone Number: (202) 622-8173
350 CHURCH STREET M-92 Refer Reply to: CP:E:EP:T4
HARTFORD, CT 06067 Date: 05/07/96
</TABLE>
Dear Applicant:
In our opinion, the form of the plan identified above is acceptable under
Section 401 of the Internal Revenue Code for use by employers for the benefit of
their employees. This opinion relates only to the acceptability of the form of
the plan under the Internal Revenue Code. It is not an opinion of the effect of
other Federal or other local statutes.
You must furnish a copy of this letter to each employer who adopts this plan.
You are also required to send a copy of the approved form of the plan, any
approved amendments and related documents to each Key District Director of
Internal Revenue Service in whose jurisdiction there are adopting employers.
Our opinion on the acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under Code section
401(a). Therefore, an employer adopting the form of the plan should apply for a
determination letter by filing an application with the Key District Director of
Internal Revenue Service on Form 5307, Short Form Application for Determination
for Employee Benefit Plan.
Because you submitted this plan for approval after March 31, 1991, the
continued, interim and extended reliance provisions of sections 13 and 17.03 of
Rev. Proc. 89-9, 1989-1 C.B. 780, are not applicable.
Because you submitted this plan on or after July 1, 1994, it does not meet the
requirements for the extension of the remedial amendment period provided by Rev.
Proc. 95-12, 1995-3 I.R.S. 24.
This letter may not be relied upon with respect to whether the plan satisfies
the qualification requirements as amended by Uruguay Round Agreements Act, Pub.
L. 103-465.
If you, the sponsoring organization, have any questions concerning the IRS
processing of this case, please call the above telephone number. This number is
only for use of the sponsoring organization. Individual participants and/or
adopting employers with questions concerning the plan should contact the
sponsoring organization. The plan's adoption agreement must include the
sponsoring organization's address and telephone number for inquiries by
adopting employers.
If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial Number
and File Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record. Please notify us if you
modify or discontinue sponsorship of this plan.
Sincerely yours,
/s/ [ILLEGIBLE]
---------------------------------------
Chief Employee Plans Technical Branch 4
<PAGE> 1
EXHIBIT 4.10
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
DEFINED CONTRIBUTION PLAN
BASIC PLAN DOCUMENT NUMBER 03
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
SECTION CONTENTS PAGE
ARTICLE I - DEFINITIONS
<S> <C> <C>
1.1 Accrued Benefit.........................................................1
1.2 Additional Matching Contributions.......................................1
1.3 Adoption Agreement......................................................1
1.4 Alternate Payee.........................................................1
1.5 Annuity.................................................................1
1.6 Annuity Contract........................................................1
1.7 Annuity Starting Date...................................................1
1.8 Beneficiary.............................................................1
1.9 Board of Directors......................................................2
1.10 CODA....................................................................2
1.11 Code....................................................................2
1.12 Compensation............................................................2
1.13 Considered Net Profits..................................................5
1.14 Contribution Period.....................................................5
1.15 Davis-Bacon Act.........................................................6
1.16 Disability..............................................................6
1.17 Disability Retirement Date..............................................6
1.18 Early Retirement Rate...................................................6
1.19 Earned Income...........................................................6
1.20 Effective Date. ........................................................7
1.21 Elective Deferral Contributions.........................................7
1.22 Employee................................................................7
1.23 Employee Contributions..................................................7
1.24 Employer................................................................7
1.25 Entry Date..............................................................8
1.26 ERISA...................................................................8
1.27 Fiduciary...............................................................8
1.28 Forfeiture..............................................................8
1.29 Highly Compensated Employee.............................................8
1.30 Insurance Company.......................................................11
1.31 Late Retirement Date....................................................11
1.32 Leased Employee.........................................................11
1.33 Life Annuity............................................................12
1.34 Life Insurance Policy...................................................12
1.35 Matching Contributions..................................................12
1.36 Money Purchase Pension Contributions....................................12
1.37 Named Fiduciary.........................................................12
1.38 Nonelective Contributions...............................................12
1.39 Non-Trusteed............................................................13
1.40 Normal Retirement Age...................................................13
1.41 Normal Retirement Date..................................................13
1.42 Owner-Employee..........................................................13
1.43 Participant.............................................................13
1.44 Participant's Account...................................................13
1.45 Participant's Employer Stock Account....................................14
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C>
1.46 Partner..........................................................14
1.47 Partnership......................................................14
1.48 Person...........................................................15
1.49 Plan.............................................................15
1.50 Plan Administrator...............................................15
1.51 Plan Year........................................................15
1.52 Prevailing Wage Law .............................................15
1.53 Prior Employer Contributions.....................................15
1.54 Prior Required Employee Contributions............................15
1.55 Prior Voluntary Employee Contributions...........................15
1.56 QDRO.............................................................15
1.57 Qualified Matching Contributions.................................15
1.58 Qualified Nonelective Contributions..............................15
1.59 QVEC Contributions...............................................16
1.60 Required Employee Contributions..................................16
1.61 Rollover Contribution............................................16
1.62 Salary Deferral Agreement........................................16
1.63 Self-Employed Individual.........................................16
1.64 Serious Financial Hardship.......................................16
1.65 Shareholder-Employee.............................................16
1.66 Social Security Integration Level................................16
1.67 Social Security Taxable Wage Base................................17
1.68 Sponsoring Organization..........................................17
1.69 Spouse...........................................................17
1.70 Straight Life Annuity............................................17
1.71 Termination of Employment........................................17
1.72 True-Up Contributions............................................17
1.73 Trust............................................................17
1.74 Trustee..........................................................17
1.75 Vested Interest..................................................17
1.76 Vesting Percentage...............................................18
1.77 Voluntary Employee Contributions.................................18
ARTICLE II - GENERAL PROVISIONS
2A. SERVICE
2A.1 Service..........................................................19
2A.2 Absence from Employment..........................................19
2A.3 Hour of Service..................................................19
2A.4 1-Year Break-in-Service..........................................20
2A.5 Year(s) of Service...............................................20
2A.6 Determining Vesting Percentage...................................21
2A.7 Excluded Years of Service for Vesting............................22
2A.8 Change in Plan Years.............................................22
2A.9 Elapsed Time.....................................................23
2A.10 Excluded Periods of Service for Vesting..........................24
2B. ELIGIBILITY, ENROLLMENT AND PARTICIPATION
2B.1 Eligibility......................................................24
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C> <C>
2B.2 Enrollment.................................................... 24
2B.3 Reemployed Participant........................................ 25
2B.4 Eligible Class................................................ 25
2B.5 Waiver of Participation....................................... 25
2B.6 Trades or Businesses Controlled by Owner-Employees............ 25
2C. CONTRIBUTIONS AND ALLOCATIONS
2C.1 Profit Sharing/Thrift Plan with 401(k) Feature................ 26
2C.1 Money Purchase Pension Plan................................... 34
2C.3 Rollover Contributions........................................ 37
2C.4 Contributions Subject to Davis-Bacon Act...................... 37
2C.5 QVEC Contributions............................................ 37
ARTICLE III - DISTRIBUTIONS
3A. TIMING AND FORM OF BENEFITS
3A.1 Payment of Benefits........................................... 38
3A.2 Commencement of Benefits...................................... 40
3A.3 From Life Insurance Policies.................................. 41
3A.4 Nontransferable............................................... 41
3A.5 Alternate Payee Special Distribution.......................... 41
3B. MINIMUM DISTRIBUTION REQUIREMENTS
3B.1 Definitions................................................... 41
3B.2 Distribution Requirements..................................... 43
3B.3 Death Distribution Provisions................................. 44
3B.4 Transitional Rule............................................. 45
3C. JOINT AND SURVIVOR ANNUITY REQUIREMENTS
3C.1 Applicability................................................. 47
3C.2 Definitions................................................... 47
3C.3 Qualified Joint and Survivor Annuity.......................... 48
3C.4 Qualified Preretirement Survivor Annuity...................... 48
3C.5 Notice Requirements........................................... 48
3C.6 Safe Harbor Rules............................................. 49
3C.7 Transitional Rules............................................ 50
3D. TERMINATION OF EMPLOYMENT
3D.1 Distribution.................................................. 52
3D.2 Repayment of Prior Distribution............................... 53
3D.3 Life Insurance Policy......................................... 54
3D.4 No Further Rights or Interest................................. 54
3D.5 Forfeiture.................................................... 54
3D.6 Lost Participant.............................................. 55
3D.7 Deferral of Distribution...................................... 55
</TABLE>
-iii-
<PAGE> 5
<TABLE>
<S> <C>
3E. WITHDRAWALS
3E.1 Withdrawal - Employee Contributions................................................... 55
3E.2 Withdrawal - Elective Deferral Contributions.......................................... 56
3E.3 Withdrawal - Employer Contributions................................................... 56
3E.4 Withdrawal for Serious Financial Hardship of Contributions Other than
Elective Deferral Contributions....................................................... 57
3E.5 Withdrawal for Serious Financial Hardship of Elective Deferral
Contributions......................................................................... 57
3E.6 Withdrawal - QVEC Contributions and Rollover Contributions............................ 58
3E.7 Notification.......................................................................... 58
3E.8 Vesting Continuation.................................................................. 59
3E.9 Withdrawal - Participant's Employer Stock Account..................................... 59
3E.10 Withdrawal by Terminated Participants................................................. 59
3F. DIRECT ROLLOVERS
3F.1 Definitions........................................................................... 59
3F.2 Direct Rollovers...................................................................... 59
ARTICLE IV - LEGAL LIMITATIONS ON CONTRIBUTIONS
4A. NONDISCRIMINATION TESTS
4A.1 Definitions........................................................................... 61
4A.2 Actual Deferral Percentage Test....................................................... 62
4A.3 Special Rules - ADP Test.............................................................. 62
4A.4 Actual Contribution Percentage Test................................................... 63
4A.5 Special Rules - ADP/ACP Tests......................................................... 64
4B. LIMITATIONS ON ALLOCATIONS
4B.1 Definitions........................................................................... 65
4B.2 Basic Limitation...................................................................... 69
4B.3 Estimated Maximum Permissible Amount.................................................. 70
4B.4 Actual Maximum Permissible Amount..................................................... 70
4B.5 Participants Covered by Another Prototype Defined
Contribution Plan..................................................................... 70
4B.6 Participants Covered by Non-Prototype Defined Contribution Plan....................... 71
4B.7 Participants Covered by Defined Benefit Plan.......................................... 71
4C. TREATMENT OF EXCESSES
4C.1 Definitions........................................................................... 72
4C.2 Excess Elective Deferral Contributions................................................ 72
4C.3 Excess Annual Additions............................................................... 73
4C.4 Excess Contributions.................................................................. 74
4C.5 Excess Aggregate Contributions........................................................ 75
</TABLE>
-iv-
<PAGE> 6
ARTICLE V - PARTICIPANT PROVISIONS
<TABLE>
<S> <C>
5A. ANNUITY CONTRACT AND PARTICIPANT'S ACCOUNT
5A.1 Participant's Account .................................................... 76
5A.2 Investment Transfers ..................................................... 76
5A.3 Participant's Account Valuation .......................................... 76
5B. LIFE INSURANCE POLICIES
5B.1 Optional Purchase of Life Insurance ...................................... 77
5B.2 Premiums on Life Insurance Policies ...................................... 77
5B.3 Limitations on Premiums................................................... 77
5B.4 Disposal ................................................................. 77
5B.5 Rights under Policies..................................................... 78
5B.6 Loans..................................................................... 78
5B.7 Conditions of Coverage.................................................... 78
5B.8 Policy Not Yet in Force................................................... 78
5B.9 Value of Policy........................................................... 78
5B.10 Dividends................................................................. 78
5B.11 Distribution.............................................................. 78
5B.12 Application............................................................... 78
5C. LOANS
5C.1 Loans to Participants..................................................... 79
5C.2 Loan Procedures........................................................... 80
5D. PARTICIPANTS' RIGHTS
5D.1 General Rights of Participants and Beneficiaries.......................... 80
5D.2 Filing a Claim for Benefits............................................... 80
5D.3 Denial of Claim........................................................... 80
5D.4 Remedies Available to Participants........................................ 81
5D.5 Limitation of Rights...................................................... 81
5D.6 100% Vested Contributions................................................. 81
5D.7 Reinstatement of Benefit.................................................. 81
5D.8 Non-Alienation............................................................ 82
ARTICLE VI - OVERSEER PROVISIONS
6A. FIDUCIARY DUTIES AND RESPONSIBILITIES
6A.1 General Fiduciary Standard of Conduct..................................... 83
6A.2 Service in Multiple Capacities............................................ 83
6A.3 Limitations on Fiduciary Liability........................................ 83
6A.4 Investment Manager........................................................ 83
</TABLE>
-v-
<PAGE> 7
<TABLE>
<S> <C> <C>
6B. THE PLAN ADMINISTRATOR
6B.1 Designation and Acceptance........................................ 83
6B.2 Duties and Responsibility......................................... 83
6B.3 Special Duties.................................................... 84
6B.4 Expenses and Compensation......................................... 84
6B.5 Information from Employer......................................... 84
6B.6 Administrative Committee; Multiple Signatures..................... 84
6B.7 Resignation and Removal; Appointment of Successor................. 84
6B.8 Investment Manager................................................ 85
6B.9 Delegation of Duties.............................................. 85
6C. TRUST AGREEMENT
6C.1 Creation and Acceptance of Trust.................................. 85
6C.2 Trustee Capacity; Co-Trustees..................................... 85
6C.3 Resignation and Removal; Appointment of Successor Trustee......... 85
6C.4 Taxes, Expenses and Compensation of Trustee....................... 86
6C.5 Trustee Entitled to Consultation.................................. 86
6C.6 Rights, Powers and Duties of Trustee.............................. 86
6C.7 Evidence of Trustee Action........................................ 88
6C.8 Investment Policy................................................. 88
6C.9 Period of the Trust............................................... 89
6D. THE INSURANCE COMPANY
6D.1 Duties and Responsibilities....................................... 89
6D.2 Relation to Employer, Plan Administrator and Participants......... 89
6D.3 Relation to Trustee............................................... 89
6E. ADOPTING EMPLOYER
6E.1 Election to Become Adopting Employer.............................. 89
6E.2 Definition........................................................ 90
6E.3 Effective Date of Plan............................................ 90
6E.4 Forfeitures....................................................... 90
6E.5 Contributions..................................................... 90
6E.6 Expenses.......................................................... 90
6E.7 Substitution of Plans............................................. 90
6E.8 Termination of Plans.............................................. 90
6E.9 Amendment......................................................... 90
6E.10 Plan Administrator's Authority.................................... 90
ARTICLE VII - SPECIAL CIRCUMSTANCES WHICH MAY AFFECT THE PLAN
7A. TOP-HEAVY PROVISIONS
7A.1 Definitions....................................................... 91
7A.2 Minimum Allocation................................................ 93
7A.3 Minimum Vesting Schedule.......................................... 94
</TABLE>
-vi-
<PAGE> 8
<TABLE>
<S> <C> <C>
7B. AMENDMENT, TERMINATION OR MERGER OF THE PLAN
7B.1 Amendment of Elections under Adoption Agreement by Employer.............. 95
7B.2 Amendment of Plan, Trust, and Form of Adoption Agreement................. 96
7B.3 Conditions of Amendment.................................................. 96
7B.4 Termination of the Plan.................................................. 96
7B.5 Full Vesting............................................................. 96
7B.6 Application of Forfeitures............................................... 96
7B.7 Merger with Other Plan................................................... 97
7B.8 Transfer from Other Plans................................................ 97
7B.9 Transfer to Other Plans.................................................. 97
7B.10 Approval by the Internal Revenue Service................................. 97
7B.11 Subsequent Unfavorable Determination..................................... 98
7C. SUBSTITUTION OF PLANS
7C.1 Substitution of Plans.................................................... 98
7C.2 Transfer of Assets....................................................... 98
7C.3 Substitution for Pre-Existing Master or Prototype Plan................... 99
7C.4 Partial Substitution or Partial Transfer of the Plan or Assets........... 99
ARTICLE VIII - MISCELLANEOUS
8.1 Nonreversion............................................................. 100
8.2 Gender and Number........................................................ 100
8.3 Reference to the Internal Revenue Code and ERISA......................... 100
8.4 Governing Law............................................................ 100
8.5 Compliance with the Internal Revenue Code and ERISA...................... 100
8.6 Contribution Recapture................................................... 100
</TABLE>
-vii-
<PAGE> 9
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
DEFINED CONTRIBUTION PLAN
BASIC PLAN DOCUMENT NUMBER 03
The Plan set forth herein may be adopted by an Employer and accepted by the
Plan Administrator and, if applicable, the Trustee by executing an Adoption
Agreement, which together shall constitute the Employer's Plan, for the
exclusive benefit of its eligible Employees and their Beneficiaries, as fully
as if set forth in said Adoption Agreement; provided, however, no Employer may
adopt this Plan except with the consent of Connecticut General Life Insurance
Company.
ARTICLE I - DEFINITIONS
1.1 ACCRUED BENEFIT. The term Accrued Benefit means the value of the
Participant's Account on any applicable date.
1.2 ADDITIONAL MATCHING CONTRIBUTIONS. The term Additional Matching
Contributions means additional discretionary Matching Contributions
made to the Plan by the Employer, as authorized by its Board of
Directors by resolution. Additional Matching Contributions shall be
treated as Matching Contributions for nondiscrimination testing and
allocation purposes.
1.3 ADOPTION AGREEMENT. The term Adoption Agreement means the prescribed
agreement by which the Employer adopts this Plan, and which sets forth
the elective provisions of this Plan as specified by the Employer.
1.4 ALTERNATE PAYEE. The term Alternate Payee means a person, other than
the Participant, identified under a QDRO to be a recipient of part or
all of the Participant's benefit under the Plan.
1.5 ANNUITY. The term Annuity means a series of payments made over a
specified period of time.
1.6 ANNUITY CONTRACT. The term Annuity Contract means the group of
annuity contract form issued by the Insurance Company to fund the
benefits provided under this Plan, as such contract may be amended
from time to time in accordance with the terms thereof. The Employer
will specify and communicate to its Employees the types of investments
available under this Plan and Annuity Contract.
1.7 ANNUITY STARTING DATE. The term Annuity Starting Date means the first
day of the first period for which an amount is paid as an Annuity or
any other form.
1.8 BENEFICIARY. The term Beneficiary means the beneficiary or
beneficiaries entitled to any benefits under a Participant's Account
hereunder upon the death of a Participant, Beneficiary or Alternate
Payee pursuant to a QDRO. If any Life Insurance Policy is purchased on
the life of a Participant hereunder, the Beneficiary under such Policy
shall be designated separately therein. However, any such Beneficiary
designation shall be subject to the terms of Section 3C.
A Participant's Beneficiary shall be his Spouse, if any, unless the
Participant designates a person or persons other than his Spouse as
Beneficiary with his Spouse's written consent. A Participant may
designate a Beneficiary on the form approved by the Plan
Administrator.
Article I - Definitions -1-
<PAGE> 10
If any distribution is made to a Beneficiary in the form of an
Annuity, and if such Annuity provides for a death benefit, then such
Beneficiary shall also have a right to designate a beneficiary and to
change that beneficiary from time to time. As an alternative to
receiving the benefit in the form of an Annuity, the Beneficiary may
elect to receive a single cash payment or any other form of payment
provided by the Employer's election in the Adoption Agreement.
If no Beneficiary has been designated pursuant to the provisions of
this Section, or if no Beneficiary survives the Participant and he has
no surviving Spouse, then the Beneficiary under the Plan shall be the
deceased Participant's surviving children in equal shares or, if
there are no surviving children, the Participant's estate. If a
Beneficiary dies after becoming entitled to receive a distribution
under the Plan but before distribution is made to him in full, and if
no other Beneficiary has been designated to receive the balance of
the distribution in that event, the estate of the deceased
Beneficiary shall be the Beneficiary for the balance of the
distribution.
If the Employer so elects in the Adoption Agreement, an Alternate
Payee and/or Beneficiary shall be allowed to direct the investment of
his segregated portion of the Participant's Account, pursuant to
Section 5A. An individual who is designated as an Alternative Payee
in a QDRO relating to a Participant's benefits under this Plan shall
be treated as a Beneficiary hereunder, to the extent provided by such
order.
1.9 BOARD OF DIRECTORS. The term Board of Directors means the Employer's
board of directors or other comparable governing body.
1.10 CODA. The term CODA means cash or deferred arrangement as described
in Code section 401(k) and the regulations thereunder.
1.11 CODE. The term Code means the Internal Revenue Code of 1986, as
amended from time to time.
1.12 COMPENSATION. The term Compensation means Compensation as defined
below. For any Self-Employed Individual covered under the Plan,
Compensation shall mean Earned Income. Compensation shall include
only that Compensation which is actually paid to the Participant
during the applicable Determination Period. Except as provided
elsewhere in this Plan, the "Determination Period" shall be the
period elected by the Employer in the Adoption Agreement. If the
Employer makes no election, the Determination Period shall be the
Plan Year.
An Employer may elect in the Adoption Agreement to use one of the
following definitions of Compensation for purposes of allocating all
contributions:
(a) Wages, Tips and Other Compensation Box on Form W-2. (Information
required to be reported under Code sections 6041, 6051 and
6052). Wages within the meaning of Code section 3401(a) and all
other payments of compensation to an Employee by the Employer
(in the course of the Employer's trade or business) for which
the Employer is required to furnish the Employee a written
statement under Code sections 6041(d), 6051(a)(3), and 6052.
Compensation must be determined without regard to any rules
under Code section 3401(a) that limit the remuneration included
in wages based on the nature or location of the employment or
the services performed (such as the exception for agricultural
labor in Code section 3401(a)(2)).
Article I - Definitions -2-
<PAGE> 11
(b) SECTION 3401(a) WAGES. Wages as defined in Code section 3401(a)
for the purposes of income tax withholding at the source but
determined without regard to any rules that limit the
remuneration included in wages based on the nature or location of
the employment or the services performed (such as the exception
for agricultural labor in Code section 3401(a)(2)).
(c) 415 SAFE-HARBOR COMPENSATION. Wages, salaries, and fees for
professional services and other amounts received (without regard
to whether or not an amount is paid in cash) for personal
services actually rendered in the course of employment with the
Employer maintaining the Plan to the extent that the amounts are
includable in gross income (including, but not limited to,
commissions paid salesmen, compensation for services on the basis
of a percentage of profits, commissions on insurance premiums,
tips, bonuses, fringe benefits, and reimbursements or other
expense allowances under a nonaccountable plan as described in
Code section 1.62-2(c)), and excluding the following:
(1) Employer contributions to a plan of deferred compensation
which are not includable in the Employee's gross income for
the taxable year in which contributed, or Employer
contributions under a simplified employee pension plan to
the extent such contributions are deductible by the
Employee, or any distributions from a plan of deferred
compensation;
(2) Amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by the
Employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
(3) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
(4) Other amounts which received special tax benefits, or
contributions made by the Employer (whether or not under a
salary reduction agreement) towards the purchase of an
annuity contract described in Code section 403(b) (whether
or not the contributions are actually excludable from the
gross income of the Employee).
(d) MODIFIED WAGES, TIPS, AND OTHER COMPENSATION BOX ON FORM W-2.
Compensation as defined in subsection (a) above, but reduced by
all of the following items (even if includable in gross income):
reimbursements or other expense allowances, fringe benefits (cash
or noncash), moving expenses, deferred compensation, and welfare
benefits. This definition may not be used by standardized plans
or plans using a contribution or allocation formula that is
integrated with Social Security.
(e) MODIFIED SECTION 3401(a) WAGES. Compensation as defined in
subsection (b) above, but reduced by all of the following items
(even if includable in gross income): reimbursements or other
expense allowances, fringe benefits (cash or noncash), moving
expenses, deferred compensation, and welfare benefits. This
definition may not be used by standardized plans or plans using a
contribution or allocation formula that is integrated with Social
Security.
(f) MODIFIED 415 SAFE-HARBOR COMPENSATION. Compensation as defined in
subsection (c) above, but reduced by all of the following items
(even if
Article I - Definitions -3-
<PAGE> 12
includable in gross income): reimbursements or other expense
allowances, fringe benefits (cash or noncash), moving expenses,
deferred compensation, and welfare benefits. This definition may
not be used by standardized plans or plans using a contribution
or allocation formula that is integrated with Social Security.
(g) REGULAR OR BASE SALARY OR WAGES. Regular or base salary or wages
(excluding overtime and bonuses) received during the applicable
period by the Employee from the Employer. This definition may not
be used by standardized plans or plans using a contribution or
allocation formula that is integrated with Social Security.
(h) REGULAR OR BASE SALARY WAGES PLUS OVERTIME AND/OR BONUSES.
Regular or base salary or wages, plus either or both overtime
and/or bonuses, as elected by the Employer in the Adoption
Agreement, received during the applicable period by the Employee
from the Employer. This definition may not be used by
standardized plans or plans using a contribution or allocation
formula that is integrated with Social Security.
(i) A REASONABLE ALTERNATIVE DEFINITION OF COMPENSATION, as that term
is used in Code section 414(s)(3) and the regulations thereunder,
provided that the definition does not favor Highly Compensated
Employees and satisfies the nondiscrimination requirements under
Code section 414(s). This definition may not be used by
standardized plans or plans using a contribution or allocation
formula that is integrated with Social Security.
Notwithstanding the above, if elected by the Employer in the Adoption
Agreement, Compensation shall include any amount which is contributed
by the Employer pursuant to a salary reduction agreement and which is
not includable in the gross income of the Employee under Code sections
125, 402(e)(3), 402(h)(1)(B) or 403(b).
For years beginning on or after January 1, 1989, and before January 1,
1994, the annual Compensation of each Participant taken into account
for determining all benefits provided under the Plan for any Plan Year
shall not exceed $200,000. This limitation shall be adjusted by the
Secretary at the same time and in the same manner as under Code
section 415(d) (unless a lesser amount is elected by the Employer in
the Adoption Agreement), except that the dollar increase in effect on
January 1 of any calendar year is effective for Plan Years beginning
in such calendar year and the first adjustment to the $200,000
limitation is effective on January 1, 1990.
For Plans 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 Plan Year shall not
exceed $150,000, as adjusted 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 Determination
Period beginning in such calendar year.
If a Determination Period consists of fewer than 12 calendar months,
then the annual compensation limit is an amount equal to the annual
compensation limit for the calendar year in which the compensation
period begins, multiplied by the ratio obtained by dividing the number
of full months in the period by 12.
In determining the Compensation of a Participant for purposes of this
limit, the rules of Code section 414(q)(6) shall apply, except in
applying such rules, the
Article I - Definitions -4-
<PAGE> 13
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 uses a contribution or
allocation formula that is integrated with Social Security), the
limit shall be prorated among the affected individuals in proportion
to each such individual's Compensation as determined under this
Section prior to the application of this limit.
If Compensation for any prior Determination Period is taken into
account in determining an Employee's contributions or benefits for
the current year, the Compensation for such prior Determination
Period is subject to the applicable annual compensation limit in
effect for that prior period. For this purpose, in determining
allocations in Plan Years beginning on or before January 1, 1989, the
annual compensation limit in effect for Determination Periods before
that date is $200,000. In addition, in determining allocations in
Plan Years beginning on or after January 1, 1994, the annual
compensation limit in effect for Determination Periods beginning
before that date is $150,000.
1.13 CONSIDERED NET PROFITS. The term Considered Net Profits means the
entire amount of the accumulated or current operating profits
(excluding capital gains from the sale or involuntary conversion of
capital or business assets) of the Employer after all expenses and
charges other than (1) the Employer contribution to this and any
other qualified plan, and (2) federal, state or local taxes based
upon or measured by income, as determined by the Employer, either on
an estimated basis or a final basis, in accordance with the generally
accepted accounting principles used by the Employer. When, for any
Plan Year, the amount of Considered Net Profits has been determined
by the Employer, and the Employer contribution made on the basis of
such determination, such determination and contribution shall be
final and conclusive and shall not be subject to change because of
any adjustments in income or expense which may be required by the
Internal Revenue Service or otherwise. Such determination and
contribution shall not be open to question by any Participant either
before or after the Employer contribution has been made.
In the case of an Employer that is a non-profit entity, the term
Considered Net Profits means the entire amount of the accumulated or
current operating surplus (excluding capital gains from the sale or
involuntary conversion of capital or business assets) of the Employer
after all expenses and charges other than (1) the contribution made
by the Employer to the Plan, and (2) federal, state or local taxes
based upon or measured by income, in accordance with the generally
accepted accounting principles used by the Employer.
1.14 CONTRIBUTION PERIOD. The term Contribution Period means that regular
period, specified by the Employer in its Adoption Agreement, for
which the Employer shall make Employer contributions, if any, and
that regular period specified by the Employer in its Adoption
Agreement, for which Participants may make Employee Contributions, if
any, and Elective Deferral Contributions, if any. The first
Contribution Period may be an irregular period, not longer than one
month, commencing not prior to the Effective Date. However, the
first Contribution Period for Elective Deferral Contributions may not
commence before the later of the Plan's Effective Date or adoption
date.
Article I - Definitions -5-
<PAGE> 14
1.15 DAVIS-BACON ACT. The term Davis-Bacon Act means the Davis-Bacon Act
(40 U.S.C. section 276(a) et seq., as amended from time to time),
which guarantees minimum wages to laborers and mechanics employed on
Federal government contracts for the construction, alteration, or
repair of public buildings or works. The minimums are the amounts
found by the Secretary of Labor to be prevailing for similar workers
in the area in which the work is to be done.
The term "wages" as used in the Davis-Bacon Act includes, in addition
to the basic hourly rate of pay, contributions irrevocably made to
trustees for pension benefits for laborers and mechanics employed on
Federal government contracts and the cost of other fringe benefits.
However, overtime pay is to be computed only on the basis of the
basic hourly rate of pay.
1.16 DISABILITY. The term Disability means a Participant's incapacity to
engage in any substantial gainful activity because of a medically
determinable physical or mental impairment which can be expected to
result in death, or which has lasted or can be expected to last for a
continuous period of not less than 12 months. The performance and
degree of such impairment shall be supported by medical evidence. All
Participants in similar circumstances shall be treated alike.
If elected by the Employer in the Adoption Agreement, nonforfeitable
contributions will be made to the Plan on behalf of each disabled
Participant who is not a Highly Compensated Employee (within the
meaning of Section 1.29 of the Plan).
1.17 DISABILITY RETIREMENT DATE. The term Disability Retirement Date means
the first day of the month after the Plan Administrator has
determined that a Participant's incapacity is a Disability. A
Participant who retires from the Service of the Employer as of his
Disability Retirement Date shall have a Vesting Percentage of 100%
and shall be entitled to receive a distribution of the entire value
of his Participant's Account and any Life Insurance Policies, or the
values thereof, as of his Disability Retirement Date, subject to the
provisions of Section 3A and Section 3C.
1.18 EARLY RETIREMENT DATE. If the Employer has specified in its Adoption
Agreement that Early Retirement is permitted, then the term Early
Retirement Date means the first day of the month coinciding with or
next following the date a Participant is separated from Service with
the Employer for any reason other than death or Disability, provided
that on such date the Participant has attained the conditions
specified by the Employer in its Adoption Agreement and has not
attained his Normal Retirement Age. A Participant who retires from
the Service of the Employer on his Early Retirement Date shall have a
Vesting Percentage of 100% and shall be entitled to receive a
distribution of the entire value of his Participant's Account and any
Life Insurance Policies, or the values thereof, as of his Early
Retirement Date, subject to the provisions of Section 3A and Section
3C.
If a Participant separates from Service before satisfying the age
requirements for Early Retirement, but has satisfied the Service
requirement, the Participant shall be 100% vested as of his
Termination of Employment date, but he will not be eligible for a
distribution of the entire value of his Participant's Account until
satisfying such age requirement.
1.19 EARNED INCOME. The term Earned Income means the net earnings from
self-employment in the trade or business with respect to which the
Plan is established, and for which the personal services of the
individual are a material
Article I - Definitions -6-
<PAGE> 15
income-producing factor. Net earnings will be determined without
regard to items not included in gross income and the deductions
allocable to such items. Net earnings are reduced by contributions
made by the Employer to a qualified plan to the extent deductible
under Code section 404.
Net earnings shall be determined with regard to the deductions allowed
to the taxpayer by Code section 164(f) for taxable years beginning
after December 31, 1989.
1.20 EFFECTIVE DATE. The term Effective Date means the date specified by
the Employer in its Adoption Agreement as the Effective Date of the
Plan.
1.21 ELECTIVE DEFERRAL CONTRIBUTIONS. The term Elective Deferral
Contributions means contributions made by the Employer to the Plan at
the election of the Participant, in lieu of cash compensation, and
shall include contributions made pursuant to a Salary Deferral
Agreement or other deferral mechanism.
With respect to any taxable year, a Participant's elective deferral is
the sum of all Employer contributions made on behalf of such
Participant pursuant to an election to defer under any CODA, any
simplified employee pension cash or deferred arrangement as described
in section 402(h)(1)(B), any eligible deferred compensation plan as
described in section 457, any plan described in section 501(c)(18),
and any Employer contributions made on the behalf of a Participant for
the purchase of an annuity contract under section 403(b) pursuant to a
salary reduction agreement.
Elective Deferral Contributions shall not include those contributions
properly distributed as Excess Annual Additions, as defined in Section
4C.1(b).
1.22 EMPLOYEE. The term Employee means any employee of the Employer
maintaining the Plan or any other employer required to be aggregated
with such Employer under Code sections 414(b), (c), (m), or (o).
The term Employee also includes any Leased Employee deemed to be an
Employee of the Employer in accordance with code sections 414(n) or
(o).
1.23 EMPLOYEE CONTRIBUTIONS. The term Employee Contributions means
contributions to this Plan or any other plan, that are designated or
treated at the time of contribution as after-tax contributions made by
the Employee and are allocated to a separate account to which
attributable earnings and losses are allocated. Such term includes
Required Employee Contributions, Voluntary Employee Contributions,
Prior Required Employee Contributions, and Prior Voluntary Employee
Contributions.
1.24 EMPLOYER. The term Employer means the employer that adopts this Plan.
In the case of a group of Employers that constitutes a controlled
group of corporations (as defined in Code section 414(b)) or that
constitutes trades or businesses (whether or not incorporated) that
are under common control (as defined in section 414(c)) or that
constitutes an affiliated service group (as defined in section
414(m)), Service with all such employers shall be considered Service
with the Employer for purposes of eligibility and vesting. The term
Employer shall also mean any Adopting Employer as defined in Section
6E.2.
Article I - Definitions -7-
<PAGE> 16
A state or local government or political subdivision thereof, or any
agency or instrumentality thereof, or any organization exempt from tax
under Subtitle A of the code, may not elect a 401(k) option (CODA) in
the Adoption Agreement.
1.25 ENTRY DATE. The term Entry Date means either the Effective Date or
each applicable date thereafter as specified by the Employer in its
Adoption Agreement, when an Employee who has fulfilled the eligibility
requirements commences participation in the Plan.
If an Employee is not in the active Service of the Employer as of his
initial Entry Date, his subsequent Entry Date shall be the date he
returns to the active Service of the Employer, provided he still meets
the eligibility requirements. If an Employee does not enroll as a
Participant as of his initial Entry Date, his subsequent Entry Date
shall be the applicable Entry Date as specified by the Employer in the
Adoption Agreement when the Employee actually enrolls as a
Participant.
1.26 ERISA. The term ERISA means the Employee Retirement Income Security
Act of 1974 (PL93-406) as it may be amended from time to time, and
any regulations issued pursuant thereto as such Act and such
regulations affect this Plan and Trust.
1.27 FIDUCIARY. The term Fiduciary means any or all of the following, as
applicable:
(a) Any Person who exercises any discretionary authority or control
respecting the management of the Plan or its assets;
(b) Any Person who renders investment advice for a fee or other
compensation, direct or indirect, respecting any monies or other
property of the Plan or has authority or responsibility to do so;
(c) Any Person who has discretionary authority or responsibility in
the administration of the Plan;
(d) Any Person who has been designated by a Named Fiduciary pursuant
to authority granted by the Plan, who acts to carry out a
fiduciary responsibility, subject to any exceptions granted
directly or indirectly by ERISA.
1.28 FORFEITURE. The term Forfeiture means the amount, if any, by which
the value of a Participant's Account exceeds his Vested Interest upon
the occurrence of an immediate Break-in-Service, a 1-Year
Break-in-Service or 5 consecutive 1-Year Breaks-in-Service, as
elected by the Employer in its Adoption Agreement pursuant to Section
3D.5, following such Participant's Termination of Employment.
1.29 HIGHLY COMPENSATED EMPLOYEE. The term Highly Compensated Employee
includes both Highly Compensated Active Employees and Highly
Compensated Former Employees.
As elected by the Employer in the Adoption Agreement, the method to
determine Highly Compensated Employees shall be:
(A) TRADITIONAL METHOD: A "Highly Compensated Active Employee"
includes any Employee who performs service for the Employer
during the Determination Year and who, during the Look-Back
Year;
(1) Received Compensation from the Employer in excess of
$75,000 (as adjusted pursuant to Code section 415(d)); or
-8-
Article I - Definitions
<PAGE> 17
(2) Received Compensation from the Employer in excess of $50,000
(as adjusted pursuant to Code section 415 (d)) and was a
member of the top-paid group for such year; or
(3) Was an officer of the Employer and received Compensation
during such year that is greater than 50 percent of the
dollar limitation in effect under Code section 415(b)(1)(A).
The term Highly Compensated Employee also includes: (1) Employees
who are described in the preceding sentence if the term
"Determination Year" is substituted for the term "Look-Back Year"
and who are one of the 100 employees who received the most
Compensation from the Employer during the Determination Year; and
(2) Employees who are 5-percent owners at any time during the
Look-Back Year or Determination Year.
If no officer has satisfied the Compensation requirement of (3)
above during either a Determination Year or Look-Back Year, the
highest paid officer for such year shall be treated as a Highly
Compensated Employee.
For the purpose, the Determination Year shall be the Plan Year.
The Look-Back Year shall be the period elected by the Employer in
the Adoption Agreement.
A "Highly Compensated Former Employee" includes 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 (a "Top 10
Highly Compensated Employee"), then the family member and the
5-percent owner or Top 10 Highly Compensated Employee shall be
aggregated. In such case, the family member and 5-percent owner
or Top 10 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 10
Highly Compensated Employee. For purposes of this Section, the
term "family member" includes the Spouse, lineal ascendants and
descendants of the Employee or former Employee and the spouses of
such lineal ascendants and descendants.
The determination of who is a Highly Compensated Employee,
including the determinations of the number and identify of the
Employees in the top-paid group, the top 100 Employees, the
number of Employees treated as officers and the Compensation that
is considered, will be made in accordance with Code section
414(q) and the regulations thereunder.
For purposes of this definition, Compensation shall mean
compensation as defined in Code section 415(c)(3) except that
elective or salary reduction contributions to a cafeteria plan,
CODA or tax-sheltered annuity shall be included in Compensation.
Article I - Definitions -9-
<PAGE> 18
(b) SIMPLIFIED METHOD FOR EMPLOYERS IN MORE THAN ONE GEOGRAPHIC AREA:
If elected by the Employer in the Adoption Agreement, the
Traditional Method above will be modified by substituting $50,000
for $75,000 in (1) and by disregarding (2). This simplified
definition of Highly Compensated Employee will apply to Employers
that maintain significant business activities (and employ
Employees) in at least two significant, separate geographic
areas.
(c) ALTERNATIVE SIMPLIFIED METHOD: If elected by the Employer in the
Adoption Agreement, Highly Compensated Employees shall be
determined as follows: A Highly Compensated Active Employee
includes any Employee who performs service for the Employer
during the Determination Year and who:
(1) Is a 5-percent owner; or
(2) Received Compensation from the Employer in excess of $75,000
(as adjusted pursuant to Code section 415(d)); or
(3) Received Compensation from the Employer in excess of $50,000
(as adjusted pursuant to Code section 415(d)) and was a
member of the top-paid group for such year; or
(4) Was an officer of the Employer and received Compensation
during such year that is greater than 50 percent of the
dollar limitation in effect under Code section 415(b)(1)(A).
Under this simplified definition, the look-back provisions of
Code section 414(q) do not apply.
(d) ALTERNATIVE SIMPLIFIED METHOD WITH SNAPSHOT: If the Alternative
Simplified Method of determining Highly Compensated Employees is
selected by the Employer, the Employer may elect in the Adoption
Agreement to substantiate that the Plan complies with the
nondiscrimination requirements on the basis of the Employer's
work force on a single day during the Plan Year, provided that
day is reasonably representative of the Employer's work force and
the Plan's coverage throughout the Plan Year. The day elected by
the Employer and indicated on the Adoption Agreement shall be the
"Snapshot Day."
To apply the Alternative Simplified Method on a snapshot basis:
(1) The Employer determines who is a Highly Compensated Employee
on the basis of the data as of the Snapshot Day, except as
provided in (3) below.
(2) If the determination of who is a Highly Compensated Employee
is made earlier than the last day of the Plan Year, the
Employee's Compensation that is used to determine an
Employee's status must be projected for the Plan Year under
a reasonable method established by the Employer.
(3) If there are Employees not employed on the Snapshot Day who
are taken into account in testing, they must be determined
to be either Highly Compensated Employees or non-Highly
Compensated Employees. In addition to those Employees who
are determined to be Highly Compensated Employees on the
Plan's Snapshot Day, the
Article I - Definitions -10-
<PAGE> 19
Employer must treat as a Highly Compensated Employee any
eligible Employee for the Plan Year who:
(a) Terminated employment prior to the Snapshot Day and was
a Highly Compensated Employee in the prior Plan Year;
(b) Terminated employment prior to the Snapshot Day and (i)
was a 5-percent owner, or (ii) has Compensation for the
Plan Year greater than or equal to the projected
Compensation of any Employee who is treated as a Highly
Compensated Employee on the Snapshot Day (except for
Employees who are Highly Compensated Employees solely
because they are 5-percent owners or officers), or
(iii) was an officer and has Compensation greater than
or equal to the projected Compensation of any other
officer who is a Highly Compensated Employee on the
Snapshot Day solely because that person is an officer;
or
(c) Becomes employed after the Snapshot Day and (i) is a
5-percent owner, or (ii) has Compensation for the Plan
Year greater than or equal to the projected
Compensation of any Employee who is treated as a Highly
Compensated Employee on the Snapshot Day (except for
Employees who are Highly Compensated Employees solely
because they are 5-percent owners or officers), or
(iii) is an officer and has Compensation greater than
or equal to the projected Compensation of any officer
who is a Highly Compensated Employee on the Snapshot
Day solely because that person is an officer.
1.30 INSURANCE COMPANY. The term Insurance Company means Connecticut
General Life Insurance Company, a legal reserve life insurance company
of Hartford, Connecticut. If any company other than Connecticut
General Life Insurance Company has issued any Life Insurance Policy
held by the Trustee under the Plan, then with respect to such Policy
only and matters pertaining directly thereto, the term Insurance
Company shall be deemed to refer to such other issuing company.
1.31 LATER RETIREMENT DATE. The term Later Retirement Date means the first
day of the month coinciding with or next following the date a
Participant is separated from Service with the Employer after his
Normal Retirement Age, for any reason other than death.
1.32 LEASED EMPLOYEE. The term Leased Employee means any person (other than
an Employee of the recipient Employer) who, pursuant to an agreement
between the recipient Employer and any other person ("leasing
organization"), has performed services for the recipient Employer (or
for the recipient Employer 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
services performed for the recipient Employer shall be treated as
provided by the recipient Employer.
Article I - Definitions -11-
<PAGE> 20
A Leased Employee shall not be considered an Employee of the recipient
Employer if: such employee is covered by a money purchase pension plan
of the leasing organization providing: (a) a nonintegrated employer
contribution rate of at least 10 percent of compensation, as defined
in Code section 415(c)(3), but including amounts contributed by the
employer pursuant to a salary reduction agreement which are excludable
from the Leased Employee's gross income under Code section 125,
section 402(e)(3), section 402(h)(1)(B) or section 403(b), (b)
immediate participation, and (c) full and immediate vesting; and
Leased Employees do not constitute more than 20 percent of the
recipient's non-highly compensated work force.
1.33 LIFE ANNUITY. The term Life Annuity means an Annuity payable over the
life or life expectancy of one or more individuals.
1.34 LIFE INSURANCE POLICY. The term Life Insurance Policy (or Policy)
means a policy of individual life insurance purchased from the
Insurance Company on the life of any Participant.
1.35 MATCHING CONTRIBUTIONS. The term Matching Contributions means
contributions made by the Employer to the Plan for a Participant on
account of either Elective Deferral Contributions or Required Employee
Contributions. In addition, any Forfeiture reallocated as a Matching
Contribution shall be considered a Matching Contribution for purposes
of this Plan. If elected by the Employer in the Adoption Agreement,
Matching Contributions shall be made out of Considered Net Profits in
an amount specified by the Employer in its Adoption Agreement for each
$1.00 contributed as either an Elective Deferral Contribution or a
Required Employee Contribution, as further specified by the Employer
in its Adoption Agreement. The term Matching Contributions shall
include Additional Matching Contributions.
Should there be insufficient Considered Net Profits of the Employer
for such Employer contribution, the amount of such Matching
Contributions may be diminished to the amount that can be made from
the Employer's Considered Net Profits.
The Employer may designate at the time of contribution that all or a
portion of such Matching Contributions be treated as Qualified
Matching Contributions.
If elected by the Employer in the Adoption Agreement, Partners shall
not be entitled to receive Matching Contributions. If Partners are
entitled to receive Matching Contributions, such Contributions shall
be considered Elective Deferral Contributions for all purposes under
this Plan.
1.36 MONEY PURCHASE PENSION CONTRIBUTIONS. The term Money Purchase Pension
Contributions means contributions made to the Plan by the Employer in
accordance with a definite formula as specified in the Adoption
Agreement.
1.37 NAMED FIDUCIARY. The term Named Fiduciary means the Administrator and
any other Fiduciary designated by the Employer, and any successor
thereto.
1.38 NONELECTIVE CONTRIBUTIONS. The term Nonelective Contributions means
contributions made to the Plan by the Employer in accordance with a
definite formula as specified in the Adoption Agreement. The Employer
may designate at the time of contribution that the Nonelective
Contribution shall be treated as a Qualified Nonelective Contribution.
Article I - Definitions -12-
<PAGE> 21
1.39 NON-TRUSTEED. The term Non-Trusteed means that the Employer has
specified in the Adoption Agreement that there will not be a Trust as
a part of the Plan. Contributions under a Non-Trusteed plan will be
made directly to the Insurance Company. If the Employer specifies in
the Adoption Agreement that the Plan is Non-Trusteed, then the terms
and provisions of this Plan relating to the Trust shall be of no
force or effect.
1.40 NORMAL RETIREMENT AGE. The term Normal Retirement Age means the age
selected in the Adoption Agreement. If the Employer enforces a
mandatory retirement age, the Normal Retirement Age is the lesser of
that mandatory age or the age specified in the Adoption Agreement.
Notwithstanding the vesting schedule elected by the Employer in the
Adoption Agreement, an Employee's right to his or her account balance
shall be nonforfeitable upon the attainment of Normal Retirement Age.
1.41 NORMAL RETIREMENT DATE. The term Normal Retirement Date means the
first day of the month coinciding with or next following the date a
Participant attains his Normal Retirement Age. If a Participant
retires from the Service of the Employer on his Normal Retirement
Date, he shall receive a distribution of the entire value of his
Participant's Account as of his Normal Retirement Date, subject to the
provisions of Section 3A and Section 3C.
1.42 OWNER-EMPLOYEE. The term Owner-Employee means an individual who is a
sole proprietor, or who is a Partner owning more than 10 percent of
either the capital or profits interest of the Partnership.
1.43 PARTICIPANT. The term Participant means any person who has a
Participant's Account in the Plan and/or Trust.
If elected by the Employer in the Adoption Agreement, for purposes of
the investment of contributions as described in Section 5A, the term
Participant shall include former Participants, Beneficiaries and
Alternate Payees. Former Participants shall include those
Participants who upon Termination of Employment elected to defer
distribution in accordance with Section 3A of the Plan.
1.44 PARTICIPANT'S ACCOUNT. The term Participant's Account means the sum
of the following sub-accounts maintained on behalf of each
Participant.
(a) Money Purchase Pension Contributions, if any, plus any income
and minus any loss thereon;
(b) Nonelective Contributions, in any, plus any income and minus any
loss thereon;
(c) Matching Contributions, if any, plus any income and minus any
loss thereon;
(d) Qualified Nonelective Contributions, if any, plus any income
and minus any loss thereon;
(e) Qualified Matching Contributions, if any, plus any income and
minus any loss thereon;
(f) Prior Employer Contributions, if any, plus any income and minus
any loss thereon;
Article I - Definitions -13-
<PAGE> 22
(g) Elective Deferral Contributions, if any, plus any income and
minus any loss thereon;
(h) Employee Contributions, if any, plus any income and minus any
loss thereon;
(i) QVEC Contributions, if any, plus any income and minus any loss
thereon.
(j) Rollover Contributions, if any, plus any income and minus any
loss thereon;
A Participant's Account shall be invested in accordance with rules
established by the Plan Administrator that shall be applied in a
consistent and nondiscriminatory manner.
1.45 PARTICIPANT'S EMPLOYER STOCK ACCOUNT. The term Participant's Employer
Stock Account means that portion, if any, of the Participant's
Account which is invested in shares of the Employer's stock. Such
Participant's Employer Stock Account shall be credited with dividends
paid, if any. Such Participant's Employer Stock Account will be
valued on each day that the public exchange, over which the
Employer's stock is traded, is open for unrestricted trading.
Amounts that are invested in the Participant's Employer Stock Account
may be invested in any short term account prior to actual investment
in the Participant's Employer Stock Account.
As elected by the Employer in the Adoption Agreement:
(a) The Trustee will vote the shares of the Employer's stock
invested in the Participant's Employer Stock Account; or
(b) The Trustee will vote the shares of the Employer's stock in
accordance with any instructions received by the Trustee from
the Participant. The Trustee may request voting instructions
from the Participants provided this is done in a consistent and
nondiscriminatory manner.
The ability of a Participant who is subject to the reporting
requirements of section 16(a) of the Securities Exchange Act of 1934
(the "Act") to make withdrawals or investment changes involving the
Participant's Employer Stock Account may be restricted by the Plan
Administrator to comply with the rules under section 16(b) of the Act.
A money purchase pension plan making an initial investment in shares
of the Employer's stock after December 31, 1974, may not acquire
shares to the extent that the aggregate fair market value of the
Employer's stock held by the Plan will exceed 10 percent of the fair
market value of the assets of the Plan.
1.46 PARTNER. The term Partner means a member of a Partnership.
1.47 PARTNERSHIP. The term Partnership means a partnership as defined in
Code section 7701(a)(2) and the regulations thereunder and includes a
syndicate, group, pool, joint venture, or other unincorporated
organization through or by means of which any business, financial
operation, or venture is carried on, and which is not a corporation
or a trust or estate within the meaning of the Code. A joint
undertaking merely to share expenses is not a Partnership. In
addition, mere co-ownership of property which is maintained, kept in
repair, and rented or leased does not constitute a Partnership.
Article I - Definitions -14-
<PAGE> 23
1.48 PERSON. The term Person means any natural person, partnership,
corporation, trust or estate.
1.49 PLAN. The term Plan means this Connecticut General Life Insurance
Company Defined Contribution Plan and the Adoption Agreement as
adopted by the Employer and as both may be amended from time to time.
1.50 PLAN ADMINISTRATOR. The term Plan Administrator means the Person or
Persons designated by the Employer in its Adoption Agreement and any
successor(s) thereto. If more than one Person shall be designated, the
committee thus formed shall be known as the Administrative Committee
and all references in the Plan to the Plan Administrator shall be
deemed to apply to the Administrative Committee. The Plan
Administrator shall signify in writing his acceptance of his
responsibility as a Named Fiduciary.
1.51 PLAN YEAR. The term Plan Year means the 12-consecutive month period
specified by the Employer in the Adoption Agreement.
If the Plan Year changes to a different 12-consecutive month period,
the first new Plan Year shall begin before the end of the last old
Plan Year. In this event, the period beginning on the first day of the
last old Plan Year and ending on the day before the first day of the
first new Plan Year shall be treated as a short Plan Year for purposes
of determining Highly Compensated Employees, performing the
Nondiscrimination Tests set forth in Section 4A, and applying the
Top-Heavy provisions of Section 7A. However, Service will be credited
in accordance with the provisions of Section 2A.8.
1.52 PREVAILING WAGE LAW. The term Prevailing Wage Law means any statute or
ordinance that requires the Employer to pay its Employees working on
public contracts at wage rates not less than those determined pursuant
to that statute classes of workers in the geographical area where the
contract is performed, including the Davis-Bacon Act and similar
Federal, state, or municipal prevailing wage statutes.
1.53 PRIOR EMPLOYER CONTRIBUTIONS. The term Prior Employer Contributions
means contributions made by the Employer prior to the date indicated
on the Adoption Agreement.
1.54 PRIOR REQUIRED EMPLOYEE CONTRIBUTIONS. The term Prior Required
Employee Contributions means Employee post-tax contributions that the
Employer required as either a condition of participation, or for
receiving an Employer contribution, prior to the date indicated on the
Adoption Agreement.
1.55 PRIOR VOLUNTARY EMPLOYEE CONTRIBUTIONS. The term Prior Voluntary
Employee Contributions means post-tax contributions made voluntarily
by an Employee prior to the date indicated on the Adoption Agreement.
1.56 QDRO. The term QDRO means a Qualified Domestic Relations Order as
determined in accordance with Code section 414(p) and regulations
thereunder.
1.57 QUALIFIED MATCHING CONTRIBUTIONS. The term Qualified Matching
Contributions means Matching Contributions which are subject to the
distribution and nonforfeitability requirements of Code section 401(k)
when made.
1.58 QUALIFIED NONELECTIVE CONTRIBUTIONS. The term Qualified Nonelective
Contributions means Nonelective Contributions made by the Employer and
Article I - Definitions -15-
<PAGE> 24
allocated to Participants' accounts that the Participants may not
elect to receive in cash until distributed from the Plan; that are
nonforfeitable when made; and that are distributable only in
accordance with the distribution provisions that are applicable to
Elective Deferral Contributions and Qualified Matching Contributions.
1.59 QVEC CONTRIBUTIONS. The term QVEC Contributions means voluntary
amounts contributed by the Participant prior to January 1, 1987, which
the Participant designated in writing were eligible for a tax
deduction under Code section 219(a).
QVEC Contributions will be maintained in a separate account, which
will be nonforfeitable (i.e., 100% vested) at all times. The account
will share in the gains and losses under the Plan in the same manner
as described in Section 5A.3 of the Plan.
1.60 REQUIRED EMPLOYEE CONTRIBUTIONS. The term Required Employee
Contributions means Employee post-tax contributions that the Employer
requires either as a condition of participation or for receipt of an
Employer contribution.
1.61 ROLLOVER CONTRIBUTION. The term Rollover Contribution means an amount
representing all or part of a distribution from a pension or profit
sharing plan meeting the requirements of Code section 401(a), which is
eligible for rollover to this Plan in accordance with the requirements
set forth in Code section 402 (including Director Rollovers) or Code
section 408(d)(3), whichever is applicable.
1.62 SALARY DEFERRAL AGREEMENT. The term Salary Deferral Agreement means an
agreement between a Participant and the Employer to defer receipt of a
portion of the Participant's Compensation by making Elective Deferral
Contributions to the Plan.
1.63 SELF-EMPLOYED INDIVIDUAL. The term Self-Employed Individual means an
individual who has Earned Income for the taxable year from the trade
or business for which the Plan is established; also, an individual who
would have Earned Income but for the fact that the trade or business
had no net profits for the taxable year.
1.64 SERIOUS FINANCIAL HARDSHIP. The term Serious Financial Hardship means
an immediate and heavy financial need of the Participant where such
Participant lacks the available resources to meet the hardship. The
Plan Administrator shall make a determination of whether a Serious
Financial Hardship exists in accordance with the applicable provisions
of Section 3E.
1.65 SHAREHOLDER-EMPLOYEE. The term Shareholder-Employee means an Employee
or officer of an electing small business 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.
1.66 SOCIAL SECURITY INTEGRATION LEVEL. The term Social Security
Integration Level means the Social Security Taxable Wage Base or such
lesser amount specified by the Employer in the Adoption Agreement. If
the Social Security Taxable Wage Base is amended, the Social Security
Integration Level will be deemed to have been amended.
Article I - Definitions -16-
<PAGE> 25
1.67 SOCIAL SECURITY TAXABLE WAGE BASE. The term Social Security Taxable
Wage Base means the contribution and benefit base in effect under
section 230 of the Social Security Act at the beginning of the Plan
Year.
1.68 SPONSORING ORGANIZATION. The term Sponsoring Organization means
Connecticut General Life Insurance company, a legal reserve life
insurance company of Hartford, Connecticut.
1.69 SPOUSE. The term Spouse means the lawful wife of a male Participant,
or the lawful husband of a female Participant. However, a former
spouse will be treated as the Spouse or surviving Spouse and a
current Spouse will not be treated as the Spouse or surviving Spouse
to the extent provided under a QDRO.
1.70 STRAIGHT LIFE ANNUITY. The term Straight Life Annuity means an
annuity payable in equal installments for the life of the
Participant, and that terminates upon the Participant's death.
1.71 TERMINATION OF EMPLOYMENT. The term Termination of Employment means a
severance of the Employer-Employee relationship which occurs prior to
a Participant's Normal Retirement Age for any reason other than Early
Retirement, Disability, or death.
1.72 TRUE-UP CONTRIBUTIONS. The term True-up Contributions means
Additional Matching Contributions made to the Plan by the Employer so
that total Matching Contributions for each Participant are calculated
on an annual basis rather than on the basis selected by the Employer
in the Adoption Agreement.
1.73 TRUST. The term Trust means the Trust Agreement if the Employer
specifies in the Adoption Agreement that the Plan is Trusteed. The
Trust Agreement is entered into by the Employer, the Plan
Administrator and the Trustee by completing and signing the Adoption
Agreement, which Trust Agreement forms a part of, and implements the
provisions of the Plan as it applies to the Employer. If the Employer
specifies in the Adoption Agreement that the Plan is Non-Trusteed,
then the terms and provisions of this Plan relating to the Trust
shall be of no force and effect.
1.74 TRUSTEE. The term Trustee means the trustee(s) designated by the
Employer in its Adoption Agreement, if applicable, and any
successor(s) thereto.
1.75 VESTED INTEREST. The term Vested Interest means the nonforfeitable
right to an immediate or deferred benefit on any date in the amount
which is equal to the sum of (a), (b) and (c) below:
(a) The value on that date of that portion of the Participant's
Account that is attributable to and derived from Employee
Contributions, if any;
(b) The value on that date of the portion of the Participant's
Account attributable to Elective Deferral Contributions, if any;
Qualified Nonelective Contributions, if any; QVEC Contributions,
if any; Rollover Contributions, if any; and Qualified Matching
Contributions, if any;
(c) The value on that date of that portion of the Participant's
Account that is attributable to and derived from contributions
made by the Employer (and Forfeitures, if any), multiplied by his
Vesting Percentage determined on the date applicable.
Article I - Definitions -17-
<PAGE> 26
Employer contributions described in subsection (c), plus the earnings
thereon, shall be, at any relevant time, a part of the Participant's
Vested Interest equal to an amount ("X") determined by the following
formula:
X = P(AB + D) - D
For purposes of applying this formula:
P = The Participant's Vesting Percentage at the relevant time.
AB = The account balance attributable to such contributions, plus
the earnings thereon, at the relevant time.
D = The amount of any distribution.
1.76 VESTING PERCENTAGE. The term Vesting Percentage means the
Participant's nonforfeitable interest in Money Purchase Pension
Contributions, Matching Contributions, Nonelective Contributions, or
Prior Employer Contributions credited to his Participant's Account,
plus any income and minus any loss thereon. The Vesting Percentage
for each such Employer contribution is computed in accordance with
one of the schedules listed below, based on Years of Service with the
Employer, as specified by the Employer in its Adoption Agreement:
(a) 100% full and immediate;
(b) 100% after 3 Years of Service;
(c) 20% per Year of Service, 100% at 5 Years of Service;
(d) 20% after 3 Years of Service, 20% per Year of Service
thereafter, 100% at 7 Years of Service;
(e) 20% after 2 Years of Service, 20% per Year of Service thereafter,
100% at 6 Years of Service;
(f) 100% after 5 Years of Service;
(g) 25% after 1 Year of Service; 100% after 4 Years of Service;
(h) Other.
However, if a Participant dies prior to attaining his Normal
Retirement Age, his Vesting Percentage shall be 100%.
1.77 VOLUNTARY EMPLOYEE CONTRIBUTIONS. The term Voluntary Employee
Contributions means post-tax contributions made voluntarily by an
Employee.
Article I - Definitions -18-
<PAGE> 27
ARTICLE II - GENERAL PROVISIONS
2A. SERVICE
2A.1 SERVICE. The term Service means active employment with the Employer
as an Employee.
2A.2 ABSENCE FROM EMPLOYMENT. Absence from employment on account of a leave
of absence authorized by the Employer pursuant to the Employer's
established leave policy will be counted as employment with the
Employer provided that such leave of absence is of not more than two
years' duration. Absence from employment on account of active duty
with the Armed Forces of the United States will be counted as
employment with the Employer. If the Employee does not return to
active employment with the Employer, his Service will be deemed to
have ceased on the date the Plan Administrator receives notice that
the Employee will not return. The Employer's leave policy shall be
applied in a uniform and nondiscriminatory manner to all Participants
under similar circumstances.
For purposes of determining an Employee's eligibility and vesting
status for periods while the Employee is absent from work for reasons
covered under the Family and Medical Leave Act, Service will be
credited in accordance with and to the extent required by the
provisions of the Family and Medical Leave Act.
If the Employer has elected in the Adoption Agreement to determine Service
based upon 1,000 Hours, then the following Sections 2A.3 through 2A.8 shall
apply.
2A.3 HOUR OF SERVICE. The term Hour of Service means:
(a) Each hour for which an Employee is directly or indirectly paid,
or entitled to payment, by the Employer for the performance of
duties. These hours shall be credited to the Employee for the
Computation Period or Periods, as defined in Section 2A.5, in
which the duties were performed; and
(b) Each hour for which an Employee is paid or entitled to payment,
by the Employer on account of a period of time during which no
duties are performed (irrespective of whether the employment
relationship has terminated) due to vacation, holiday, illness,
incapacity (including disability), layoff, jury duty, military
duty or leave of absence. No more than 501 Hours of Service will
be credited under this paragraph for a single Computation Period
(whether or not the period occurs in a single Computation
Period). Hours under this paragraph will be calculated and
credited pursuant to section 2530.200b-2 of the Department of
Labor regulations which are incorporated herein by this
reference; and
(c) Each hour for which back pay, irrespective of mitigation of
damages, has been either awarded or agreed to by the Employer.
The same Hours of Service will not be credited under subsection
(a) or subsection (b), as the case may be, and under this
subsection (c). These hours shall be credited to the Employee for
the Computation Period or periods to which the award or agreement
pertains rather than the Computation Period in which the award,
agreement or payment is made; and Hours of Service will be
credited for employment with other members of an affiliated
service group (under Code section 414(m)), a controlled group of
corporations (under Code section 414(b)), or a group of trades or
businesses under common
Article II - General Provisions -19-
<PAGE> 28
control (under Code section 414(c)), of which the adopting
Employer is a member, and any other entity required to be
aggregated with the Employer pursuant to Code section 414(o).
Hours of Service will also be credited for any individual considered
an Employee for purposes of this Plan under Code sections 414(n) or
414(o).
Solely for purposes of determining whether a 1-Year Break-in-Service,
as defined in Section 2A.4, for participation and vesting purposes
has occurred in a Computation Period, an individual who is absent
from work for maternity or paternity reasons shall receive credit for
the Hours of Service which would otherwise have been credited to such
individual but for such absence, or in any case in which such hours
cannot be determined, eight (8) Hours of Service per day of such
absence. For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence (1) by reason of the
pregnancy of the individual, (2) by reason of a birth of a child of
the individual, (3) by reason of the placement of a child with the
individual in connection with the adoption of such child by such
individual, or (4) for purposes of caring for such child for a period
beginning immediately following such birth or placement. The Hours of
Service credited under this paragraph shall be credited (1) in the
Computation Period in which the absence begins if the crediting is
necessary to prevent a Break-in-Service in that period, or (2) in all
other cases, in the following Computation Period.
Service shall be determined on the basis of the method selected in the
Adoption Agreement.
2A.4 1-YEAR BREAK-IN-SERVICE. The term 1-Year Break-in-Service means any
Computation Period during which an Employee fails to complete more
than 500 Hours of Service.
2A.5 YEAR(S) OF SERVICE. The term Year(s) of Service means a
12-consecutive month period ("Computation Period") during which an
Employee has completed at least 1,000 Hours of Service.
(a) Eligibility Computation Period. For purposes of determining
Years of Service and Breaks-in-Service for eligibility, the
12-consecutive month period shall begin with the date on which
the Employee first performs an Hour of Service for the Employer
and, where additional periods are necessary, succeeding
anniversaries of his employment commencement date. The employment
commencement date is the date on which the Employee first
performs an Hour of Service for the Employer maintaining the
Plan.
(b) Vesting Computation Period. As elected by the Employer in the
Adoption Agreement, for computing Years of Service and
Breaks-in-Service for vesting, the 12-consecutive month period:
(1) Shall be the Plan Year; or
(2) Shall begin with the date on which the Employee first
performs an Hour of Service for the Employer and, where
additional periods are necessary, succeeding anniversaries
of that date.
However, active participation as of the last day of the Plan
Year is not required in order for a Participant to be credited
with a Year of Service for vesting purposes.
Article II - General Provisions -20-
<PAGE> 29
(c) Contribution Computation Period. If the Employer specifies an
annual Contribution Period in its Adoption Agreement for the
purpose of determining a Participant's eligibility to receive a
contribution, the 12-consecutive month period shall be any Plan
Year during which the Participant is credited with at least 1,000
Hours of Service. However, when an Employee first becomes a
Participant or resumes active participation in the Plan following
a 1-Year Break-in-Service on a date other than the first day of
the Plan Year, all Hours of Service credited to the Participant
during that Plan Year, including those Hours credited prior to
the date the Employee enrolls (or reenrolls) as a Participant in
the Plan shall be counted. Furthermore, the Employer may require
in its Adoption Agreement that a Participant be a Participant as
of the last day of the Plan Year in order to be eligible to
receive a contribution for a Plan Year.
(d) If in its Adoption Agreement the Employer permits Early
Retirement, the 12-consecutive month period for determining Early
Retirement shall be the Plan Year. However, active participation
as of the last day of the Plan Year is not required in order
for a Participant to be credited with a Year of Service.
Service with a predecessor organization of the Employer shall be
treated as Service with the Employer for the purposes of subsection
(a), (b) and (d) above in any case in which the Employer maintains
the plan of such predecessor organization. In addition, if elected by
the Employer in the Adoption Agreement, service with a predecessor
organization of the Employer shall be treated as Service with the
Employer, even if the Employer does not maintain the plan of such
predecessor organization.
If elected in the Adoption Agreement, service with a subsidiary or
affiliate of the Employer that is not related to the Employer under
the provisions of Code sections 414 (b), (c) or (m) shall be treated
as Service with the Employer for purposes of (a), (b) and (d) above.
2A.6 DETERMINING VESTING PERCENTAGE. Vesting credit shall be given for
each Year of Service except those periods specifically excluded in
the Adoption Agreement.
If a Participant completes less than 1,000 Hours of Service during a
Plan Year while remaining in the service of the Employer, his Vesting
Percentage shall not be increased for such Plan Year. However, at
such time as the Participant again completes at least 1,000 Hours of
Service in any subsequent Plan Year, his Vesting Percentage shall
then take into account all Years of Service with the Employer except
those specifically excluded in the Adoption Agreement.
If an individual who ceases to be an Employee and is subsequently
rehired as an Employee enrolls (or reenrolls) in the Plan, upon his
participation (or reparticipation) his Vesting Percentage shall then
take into account all Years of Service except those specifically
excluded in the Adoption Agreement.
In the case of a Participant who has 5 consecutive 1-Year
Breaks-in-Service, all Years of Service after such Breaks-in-Service
will be disregarded for the purpose of vesting the Employer-derived
account balance that accrued before such breaks. However, both
pre-break and post-break Service will count for the purpose of
vesting the Employer-derived account balance that accrues after such
Breaks-in-Service. Both accounts will share in the earnings and
losses of the fund.
Article II - General Provisions -21-
<PAGE> 30
In the case of a Participant who does not have 5-consecutive 1-Year
Breaks-in-Service, both the pre-break and post-break Service will
count in vesting both the pre-break and post-break Employer-derived
account balance.
2A.7 EXCLUDED YEARS OF SERVICE FOR VESTING. In determining the Vesting
Percentage of an Employee, all Years of Service with the Employer(s)
maintaining the Plan shall be taken into account, except that the
following periods may be excluded, as specified by the Employer in its
Adoption Agreement:
(a) Years of Service prior to the time a Participant attained age 18;
(b) Years of Service during which the Employer did not maintain the
Plan or a predecessor plan;
(c) Years of Service during a period for which the Employee made no
Required Employee Contributions;
(d) Years of Service prior to any 1-Year Break-in-Service, until the
Employee completes one Year of Service following such 1-Year
Break-in-Service.
(e) In the case of any Employee who has no Vested Interest in
Employer contributions, Years of Service before any period of
consecutive 1-Year Breaks-in-Service if the number of such
consecutive 1-Year Breaks-in-Service equals or exceeds the
greater of (i)5, or (ii) the total number of Years of Service
before such break.
For the purposes of this Section, a predecessor plan shall mean a plan
of the Employer that was terminated within five years preceding or
following the Effective date of this Plan.
2A.8 CHANGE IN PLAN YEARS. If the Plan Year is changed, the following
special rules shall apply.
(a) Vesting Computation Periods. If the Vesting Computation Period is
the Plan Year, Years of Service and 1-Year Breaks-in-Service
shall be measured over two overlapping 12-consecutive month
periods. The first such period shall begin on the first day of
the last old Plan Year and the second such period shall begin on
the first day of the first new Plan Year, thereby creating an
overlap. All Hours of Service performed during the overlap period
must be counted in both Vesting Computation Periods. A
Participant who completes at least 1,000 Hours of Service during
each such period shall be credited with two Years of Service for
Vesting.
(b) Contribution Computation Periods. To determine a Participant's
eligibility to receive a contribution for a short Plan Year, the
1,000 Hours of Service requirement shall be prorated by
multiplying by a fraction, the numerator of which is the number
of full months in the short Plan Year and the denominator of
which is 12.
Article II - General Provisions -22-
<PAGE> 31
If the Employer has elected in the Adoption Agreement to determine Service
based upon Elapsed Time, then the following Sections 2A.9 and 2A.10 shall apply.
2A.9 ELAPSED TIME. If the Employer has selected an eligibility requirement in
the Adoption Agreement that is or includes a fractional Year(s) of Service
requirement, the provisions of this Section shall apply.
(a) For purposes of determining an Employee's initial or continued
eligibility to participate in the Plan, or the Participant's Vested
Interest in Employer contributions, an Employee will receive credit
for the aggregate of all time period(s) commencing with the Employee's
first day of employment or reemployment and ending on the date a
Break-in-Service (as defined in this Section) begins. The first day of
employment or reemployment is the first day the Employee performs an
Hour of Service. An Employee will also receive credit for any Period
of Severance of less than 12-consecutive months. Fractional periods of
a year will be expressed in terms of days.
(b) For purposes of this Section, "Hour of Service" shall mean each hour
for which an Employee is paid or entitled to payment for the
performance of duties for the Employer.
(c) For purposes of this Section, a "Break-in-Service" is a Period of
Severance of at least 12 consecutive months.
(d) A "Period of Severance" is a continuous period of time during which
the Employee is not employed by the Employer. Such period begins on
the date the Employee retires, quits or is discharged, or if earlier,
the 12-month anniversary of the date on which the Employee was
otherwise first absent from Service.
(e) In the case of an individual who is absent from work for maternity or
paternity reasons, the 12-consecutive month period beginning on the
first anniversary of the first day of such absence shall not
constitute a Break-in-Service. For purposes of this paragraph, an
absence from work for maternity or paternity reasons means an absence
(1) by reason of the pregnancy of the individual, (2) by reason of the
birth of a child of the individual, (3) by reason of the placement of
a child with the individual in connection with the adoption of such
child by such individual, or (4) for purposes of caring for such child
for a period beginning immediately following such birth or placement.
Each Employee will share in Employer contributions for the period
beginning on the date the Employee commences participation under the
Plan and ending on the date on which such Employee severs employment
with the Employer or is no longer a member of an eligible class of
Employees.
(f) If the Employer is a member of an affiliated service group (under Code
section 414(m)), a controlled group of corporations (under Code
section 414(b)), a group of trades or businesses under common control
(under Code section 414(c)) or any other entity required to be
aggregated with the Employer pursuant to Code section 414(o), Service
will be created for any employment for any period of time for any
other member of such group. Service will also be credited for any
individual required under Code section 414(n) or Code section 414(o)
to be considered an Employee of any Employer aggregated under Code
sections 414(b), (c), or (m) of such group.
Article II - General Provisions -23-
<PAGE> 32
2A.10 EXCLUDED PERIODS OF SERVICE FOR VESTING. In determining the Vesting
Percentage of an Employee, all Periods of Service with the
Employer(s) maintaining the Plan shall be taken into account, except
that the following periods may be excluded, as specified by the
Employer in its Adoption Agreement:
(a) Periods of Service prior to the time a Participant attained age
18;
(b) Periods of Service during which the Employer did not maintain
the Plan or a predecessor plan;
(c) Periods of Service during which the Employee made no Required
Employee Contributions;
(d) Periods of Service prior to any one-year Period of Severance,
until the Employee completes a one-year period of Service
following such Period of Severance;
(e) In the case of an Employee who has no Vested Interest in
Employer contributions, Periods of Service before any Period of
Severance if the number of consecutive one-year Periods of
Severance equals or exceeds the greater of (i) 5, or (ii) the
total number of one-year Periods of Service before such Period
of Severance.
For the purposes of this Section, a predecessor plan shall mean a
plan of the Employer that was terminated within five years preceding
or following the Effective Date of this Plan.
2.B. ELIGIBILITY, ENROLLMENT AND PARTICIPATION
2B.1 ELIGIBILITY. Each Employee shall be eligible to participate in the
Plan and receive an appropriate allocation of Employer contributions
as of the Entry Date following the day he meets the following
requirements, if any, specified by the Employer in its Adoption
Agreement, relating to:
(a) Required service;
(b) Minimum attained age;
(c) Job class requirements.
In addition to the eligibility conditions stated above, the Employer
may specify in the Adoption Agreement certain groups of Employees
who are not eligible to participate in the Plan.
Notwithstanding the foregoing, if the Employer's Plan as set forth
herein replaces or amends a preceding plan, then those Employees
participating under the Plan as written prior to such replacement or
amendment shall be eligible to be Participants hereunder without
regard to length of Service or minimum attained age otherwise
required herein.
2B.2 ENROLLMENT. Each eligible Employee may enroll as of his Entry Date
by completing and delivering to the Plan Administrator an enrollment
form and, if applicable, a payroll deduction authorization and/or a
Salary Deferral Agreement.
Article II - General Provisions -24-
<PAGE> 33
2B.3 REEMPLOYED PARTICIPANT. In the case of an individual who ceases to be
an Employee and is subsequently rehired as an Employee, the following
provisions shall apply in determining eligibility to again participate
in the Plan:
(a) If the Employee had met the eligibility requirements as
specified in Section 2B.1, such Employee will become a
Participant in the Plan in accordance with Section 2B.2 as of the
date he is reemployed as an Employee.
(b) If the Employee had not formerly met the eligibility
requirements specified in Section 2B.1, such Employee will become
a Participant in the Plan after meeting the requirements of
Section 2B.1 in accordance with Section 2B.2.
2B.4 ELIGIBLE CLASS. If a Participant become ineligible to participate
because he is no longer a member of an eligible class of Employees,
such Employee shall participate immediately upon his return to an
eligible class of Employees. If such Participant incurs a
Break-in-Service, eligibility will be determined under the
Break-in-Service rules of the Plan.
If an Employee who is not a member of the eligible class of Employees
becomes a member of the eligible class, such Employee shall
participate immediately if such Employee has satisfied the minimum age
and Service requirements and would have previously become a
Participant had he been in the eligible class. If such Participant
incurs a Break-in-Service, eligibility will be determined under the
Break-in-Service rules of the Plan.
2B.5 WAIVER OF PARTICIPATION. Notwithstanding any provision of the Plan to
the contrary, if Required Employee Contributions are elected by the
Employer in the Adoption Agreement, any Employee in accordance with
the rules of the Plan may decline to become a Participant or cease to
be a Participant by filing a written waiver of participation with the
Plan Administrator in the manner prescribed. Such waiver must be filed
prior to the date such Employee is eligible to become a Participant,
or in the case of a current Participant, in the last month of the Plan
Year immediately preceding the Plan Year for which he wishes to cease
being a Participant.
Any Employee who files such a waiver shall not become a Participant,
or if a current Participant, shall elect to cease to be such as of the
first day of the succeeding Plan Year; and such Employee shall not
receive any additional Compensation or other sums by reason of his
waiver of participation.
Any such waiver may be rescinded by an Employee who is not a Partner
effective on the first day of the first Plan Year following one or
more Plan Years commencing after the filing of such waiver in which
he was not a Participant, in which event he shall become a
Participant, or again become a Participant, as the case may be,
effective as of such date. A Partner may make a one-time irrevocable
waiver of participation upon the later of his commencement of
employment with the Employer or the date he is first eligible to
participate in the Plan.
No Employee who is eligible to participate in a standardized plan may
waive participation or voluntarily reduce his or her Compensation for
purposes of this Plan.
2B.6 TRADES OR BUSINESSES CONTROLLED BY OWNER-EMPLOYEES. If this Plan
provides contributions or benefits for one or more Owner-Employees
who control both the business for which this Plan is established and
one or more other trades or businesses, this Plan and any plans
established for other trades or businesses
Article II - General Provisions -25-
<PAGE> 34
must, when looked at as a single plan, satisfy Code sections 401(a)
and (d) for the Employees of this and all other trades or businesses.
If the Plan provides contributions or benefits for one or more
Owner-Employees who control one or more other trades or businesses,
the employees of the other trades or businesses must be included in a
plan which satisfies Code sections 401(a) and (d) and which provides
contributions and benefits not less favorable than those provided for
Owner-Employees under this Plan.
If an individual is covered as an Owner-Employee under the plans of
two or more trades or businesses which he does not control and the
individual controls a trade or business, then the contributions or
benefits of the Employees under the plan of the trades or businesses
which he does control must be as favorable as those provided for him
under the most favorable plan of the trade or business which he does
not control.
For purposes of the preceding paragraphs, an Owner-Employee or two or
more Owner-Employees will be considered to control a trade or business
if the Owner-Employee or two or more Owner-Employees together:
(1) own the entire interest in an unincorporated trade or business,
or
(2) in the case of a partnership, own more than 50 percent of either
the capital interest or the profits interest in the partnership.
For purposes of the preceding sentence, an Owner-Employee or two or
more Owner-Employees shall be treated as owning any interest in a
Partnership that is owned, directly or indirectly, by a Partnership
which such Owner-Employee or such two or more Owner-Employees are
considered to control within the meaning of the preceding sentence.
2C. CONTRIBUTIONS AND ALLOCATIONS
2C.1 PROFIT SHARING/THRIFT PLAN WITH 401(k) FEATURE.
(a) Contributions - Employer.
For each Plan Year, as specified in the Adoption Agreement, the
Employer shall make one or more of the following contributions.
(1) Elective Deferral Contributions.
(2) Matching Contributions.
(3) Nonelective Contributions.
(b) Contributions - Participant.
For each Plan Year, as specified in the Adoption Agreement, each
Participant may make periodic Required Employee Contributions or
Voluntary Employee Contributions.
For Plans that contain a CODA, a Participant may elect to make a
Voluntary Employee Contribution in a lump sum. Such lump sum
Voluntary Employee Contribution may be made (1) as of the Effective
Date, or (2) as elected by the Employer in the Adoption Agreement.
Voluntary Employee Contributions shall be subject to the terms of
Section 4B.
Article II - General Provisions -26-
<PAGE> 35
(c) Fail-Safe Contribution.
The Employer reserves the right to make a discretionary
Nonelective Contribution to the Plan for any Plan Year, if the
Employer determines that such a contribution is necessary to
ensure the Actual Deferral Percentage test or the Actual
Contribution Percentage test will be satisfied for that Plan
Year. Such amount shall be designated by the Employer at the
time of contribution as a Qualified Nonelective Contribution
and shall be known as a Fail-Safe Contribution.
The Fail-Safe Contribution shall be made on behalf of all
eligible non-Highly Compensated Employees who are Participants
and who are considered under the Actual Deferral Percentage test
or, if applicable, the Actual Contribution Percentage test, and
shall be allocated to the Participant's Account of each such
Participant in an amount equal to a fixed percentage of such
Participant's Compensation. The fixed percentage shall be equal
to the minimum fixed percentage necessary to be contributed by
the Employer on behalf of each eligible non-Highly Compensated
Employee who is a Participant so that the Actual Deferral
Percentage test or, if applicable, the Actual Contribution
Percentage test, is satisfied.
(d) Contributions - Changes.
For each Plan Year, a Participant may change the amount of his
Required Employee Contributions, Voluntary Employee
Contributions, or Elective Deferral Contributions as often as
the Plan Administrator allows (on a consistent and
nondiscriminatory basis), on certain dates prescribed by the
Plan Administrator.
(e) Contributions - Timing.
(1) Elective Deferral Contributions shall be paid by the
Employer to the Trust or the Insurance Company, as elected
by the Employer in the Adoption Agreement, but never later
than 90 days following the date of deferral.
(2) Matching Contributions made on other than an annual basis
shall be paid to the Trust or Insurance Company, as elected
by the Employer in the Adoption Agreement. Matching
Contributions, including Additional Matching Contributions,
made on an annual basis shall be paid to the Trust or the
Insurance Company, as applicable, at the end of the Plan
Year, or as soon as possible on or after the last day of
such Plan Year, but in no event later than the date
prescribed by law for filing the Employer's income tax
return, including any extension thereof. To the extent that
Matching Contributions are used to purchase Life Insurance
Policies, then such contributions for any Plan Year may be
paid to the Trust when premiums for such Policies are due
during the Plan Year.
(3) Nonelective Contributions made on other than an annual
basis shall be paid to the Trust or Insurance Company, as
applicable, as elected by the Employer in the Adoption
Agreement. Nonelective Contributions made on an annual
basis shall be paid to the Trust or the Insurance Company,
as applicable, at the end of the Plan Year,
Article II - General Provisions -27-
<PAGE> 36
or as soon as possible on or after the last day of such Plan
Year, but in any event not later than the date prescribed by
law for filing the Employer's income tax return, including
any extension thereof. To the extent that Nonelective
Contributions are used to purchase Life Insurance Policies,
then such contributions for any Plan Year may be paid to the
Trust when premiums for such Policies are due during the
Plan Year.
(4) Employee Contributions shall be transferred by the Employer
to the Trust or the Insurance Company, as elected by the
Employer in the Adoption Agreement, but never later than 90
days following the date such contributions are made by the
Employee.
(5) The Fail-Safe Contribution for any Plan Year as determined
above shall be paid to the Insurance Company at the end of
the Plan Year, or as soon as possible on or after the last
day of such Plan Year, but in no event later than the date
which is prescribed by law for filing the Employer's income
tax return, including any extensions thereof.
(f) Contributions - Allocations.
The allocation of Nonelective Contributions shall be made in
accordance with (1), (2), (3) or (4) below, as specified by the
Employer in the Adoption Agreement.
(1) Formula A: Compensation Ratio - Not Integrated with Social
Security.
The allocation to each Participant shall be made in the
proportion that the Compensation paid to each Participant
eligible to receive an allocation bears to the Compensation
paid to all Participants eligible to receive an allocation.
(2) Formula B: Integrated with Social Security - Step Rate
Method.
Base Contribution: An amount equal to a percentage (as
specified in the Adoption Agreement) of the Compensation of
each Participant up to the Social Security Integration
Level;
Excess Contribution: In addition, an amount equal to a
percentage (as specified in the Adoption Agreement) of the
Participant's Compensation which is in excess of the Social
Security Integration Level, subject to the Limitations on
Allocations in accordance with Section 4B. This Excess
Contribution percentage shall not exceed the lesser of:
(A) twice the Base Contribution or
(B) the Base Contribution plus the greater of:
(i) the old age insurance portion of the Old Age
Survivor Disability (OASDI) tax rate; or
(ii) 5.7%.
If the Employer has elected in the Adoption Agreement to use
a Social Security Integration Level that in any Plan Year is
the greater of $10,000 or 20% but less than 100% of the
Social Security Taxable
Article II - General Provisions -28-
<PAGE> 37
Wage Base, then the 5.7% limitation specified in
2C.1(f)(2)(B)(ii) shall be adjusted in accordance with the
following table:
------------------------------------------------------------
If the Social Security Integration Level
------------------------------------------------ Adjust
5.7% to
is more but not more
than than
------------------------------------------------------------
the greater of $10,000 or 80% of the Social Security 4.3%
20% of the Social Security Taxable Wage Base
Taxable Wage
Base
80% of the Social Security 100% of the Social Security 5.4%
Taxable Wage Taxable Wage Base
Base
------------------------------------------------------------
In the case of any Participant who has exceeded the
Cumulative Permitted Disparity Limit described in Section
2C.1(g), Nonelective Contributions shall be allocated in an
amount equal to the Excess Contribution percentage of two
times such Participant's total Compensation for the Plan
Year.
Any remaining Nonelective Contributions or Forfeitures will
be allocated to each Participant's Account in the ratio
that each Participant's total Compensation for the Plan
Year bears to all Participants' total Compensation for that
Plan Year.
(3) Formula B: Integrated with Social Security - Maximum
Disparity Method.
Subject to the Limitations on Allocations specified in
Section 4B, for each Plan Year the allocation to each
Participant shall be made in accordance with the following:
(A) An amount equal to 5.7% of the sum of each
Participant's total Compensation plus Compensation that
is in excess of the Social Security Integration Level
shall be allocated to each Participant's Account. If
the Employer does not contribute such amount for all
Participants, an amount shall be allocated to each
Participant's Account equal to the same proportion that
each Participant's total Compensation plus Compensation
that is in excess of the Social Security Integration
Level bears to the total Compensation plus Compensation
in excess of the Social Security Integration Level of
all Participants in the Plan. In the case of any
Participant who has exceeded the Cumulative Permitted
Disparity Limit described in Section 2C.1(g), two times
such Participant's total Compensation for the Plan Year
will be taken into account.
If the Employer has elected in the Adoption Agreement
to use a Social Security Integration Level that in any
Plan Year is the greater of $10,000 or 20% but less
than 100% of the Social Security Taxable Wage Base,
then the 5.7% limitation specified in this subsection
shall be adjusted in accordance with the following
table:
-29-
Article II - General Provisions
<PAGE> 38
-------------------------------------------------------------------
If the Social Security Integration Level
-------------------------------------------------------------------
is more but not more Adjust
than than 5.7% to
-------------------------------------------------------------------
the greater of $10,000 or 80% of the Social Security 4.3%
20% of the Social Security Taxable Wage Base
Taxable Wage Base
80% of the Social Security 100% of the Social Security 5.4%
Taxable Wage Base Taxable Wage Base
-------------------------------------------------------------------
(B) The balance of the Nonelective Contribution (if any),
shall be allocated to the Participant's Account in the
proportion that each Participant's Compensation bears
to the total Compensation of all Participants.
(4) Formula C: Flat Dollar Amount.
The allocation to each Participant shall be a flat dollar
amount as elected by the Employer in the Adoption Agreement.
Formula C may not be elected under a standardized plan.
(g) Allocation Requirements.
Employer contributions shall be allocated to the accounts of
Participants in accordance with the allocation requirement as
specified by the Employer in its Adoption Agreement. If the
Employer has adopted a standardized plan, the allocation of any
nonannual contribution made by the Employer shall be made to each
Participant who is a Participant on any day of the Contribution
Period regardless of Hours of Service.
Annual Overall Permitted Disparity Limit. Notwithstanding the
preceding paragraph, for any Plan Year this Plan benefits any
Participant who benefits under another qualified plan or
simplified employee pension plan, as defined in Code section
408(k), maintained by the Employer that provides for permitted
disparity (or imputes disparity), Employer contributions and
Forfeitures will be allocated to the account of each Participant
who either completes more than 500 Hours of Service during the
Plan Year or who is employed as of the last day of the Plan Year
in the ratio that such Participant's total Compensation bears to
the total Compensation of all Participants.
Cumulative Permitted Disparity Limit. Effective for Plan Years
beginning on or after January 1, 1995, the Cumulative Permitted
Disparity Limit for a Participant is 35 total cumulative
permitted disparity years. Total cumulative permitted years mean
the number of years credited to the Participant for allocation or
accrual purposes under this Plan, any other qualified plan or
simplified employee pension plan (whether or not terminated) ever
maintained by the Employer. For purposes of determining the
Participant's Cumulative Permitted Disparity Limit, all years
ending in the same calendar year are treated as the same year. If
the Participant has not benefitted under a defined benefit or
target benefit plan for any year beginning on or after January 1,
1994, the Participant has no Cumulative Permitted Disparity
Limit.
Article II - General Provisions -30-
<PAGE> 39
(h) Forfeitures.
Forfeitures will be used in the manner elected in the Adoption
Agreement as follows:
(1) To reduce Employer contributions or pay Plan expenses; or
(2) Allocated in accordance with the allocation formula elected in
the Adoption Agreement; or
(3) First, to reduce Employer contributions or pay Plan expenses,
with any remaining Forfeitures allocated in accordance with the
allocation formula elected in the Adoption Agreement.
(i) Expenses.
The Employer may contribute to the Plan the amount necessary to pay
any reasonable expenses of administering the Plan. In lieu of the
Employer contributing the amount necessary to pay such charges, these
expenses may be paid from Plan assets.
(j) Special Rules - Elective Deferral Contributions.
(1) Each Participant may elect to defer his Compensation in an
amount specified in the Adoption Agreement, subject to the
limitations of this Section. A Salary Deferral Agreement (or
modification of an earlier Salary Deferral Agreement) may not be
made with respect to Compensation which is currently available
on or before the date the Participant executed such election, or
if later, the later of the date the Employer adopts this CODA,
or the date such arrangement first becomes effective. Any
elections made pursuant to this Section shall become effective
as soon as administratively feasible.
(2) If elected by the Employer in the Adoption Agreement, each
Participant may elect to defer and have allocated for a Plan
Year all or a portion of any cash bonus paid during the Plan
Year. A deferral election may not be made with respect to cash
bonuses which are currently available on or before the date the
Participant executed such election.
(3) Elective Deferral Contributions will be allocated to the
Participant's Account and shall be 100 percent vested and
nonforfeitable at all times.
(4) During any taxable year, no Participant shall be permitted to
have Elective Deferral Contributions made under this Plan, or
any other qualified plan maintained by the Employer, in excess
of the dollar limitation contained in Code section 402(g) in
effect at the beginning of such taxable year. If a Participant
takes a withdrawal of Elective Deferral Contributions due to a
Serious Financial Hardship, as provided in Section 3E.5, his
Elective Deferral Contributions for his taxable year immediately
following the taxable year of such distribution may not exceed
the Code section 402(g) limit for such taxable year less the
amount of Elective Deferral Contributions made for the
Participant in the taxable year of the distribution.
Article II - General Provisions -31-
<PAGE> 40
(5) Elective Deferral Contributions that are not in excess of the limits
described in subsection (4) above shall be subject to the Limitations
on Allocations in accordance with Section 4B.
Elective Deferral Contributions that are in excess of the limits
described in (4) above shall also be subject to the Section 4B
limitations, as further provided in Section 4C.2.
(6) An Employee's eligibility to make Elective Deferral Contributions
under a CODA may not be conditioned upon the completion of more than
one (1) Year-of-Service or the attainment of more than age twenty-one
(21).
(7) A Participant may modify the amount of Elective Deferral Contributions
such Participant makes to the Plan as often as the Plan Administrator
allows, as specified in the Adoption Agreement, but in no event not
less frequently than once per calendar year. Such modification may be
made by filing a written notice with the Plan Administrator within the
time period prescribed by the Plan Administrator.
(k) Suspension of Contributions.
(1) Elective Deferral Contributions. The following provisions shall apply
with respect to suspension of Elective Deferral Contributions.
(A) Voluntary Suspension. A Participant may elect to suspend his
Salary Deferral Agreement for Elective Deferral Contributions by
filing a written notice thereof with the Plan Administrator.
Such Contributions shall be suspended on the date specified in
such notice, which date must be at least 15 days after such
notice is filed. The notice shall specify the period for which
such suspension shall be effective.
(B) Suspension for Leave. A Participant who is absent from employment
on account of an authorized unpaid leave of absence or military
leave shall have his Salary Deferral Agreement suspended during
such leave. Such suspension of contributions shall be effective
on the date payment of Compensation by the Employer to him
ceases, and shall remain in effect until payment of Compensation
resumes.
(C) Withdrawal Suspension. A Participant who elects a withdrawal in
accordance with Section 3E may have his Elective Deferral
Contributions suspended on the date such election becomes
effective. Such suspension shall remain in effect for the number
of months specified therein.
(D) Non-Elective Suspension. A Participant who ceases to meet the
eligibility requirements as specified in Section 2B.1 but who
remains in the employ of the Employer shall have his Elective
Deferral Contributions suspended, effective as of the date he
ceases to meet the eligibility requirements. Such suspension
shall remain in effect until he again meets such eligibility
requirements.
Article II - General Provisions -32-
<PAGE> 41
The Participant may elect to reactivate his Salary Deferral
Agreement for Elective Deferral Contributions by filing a
written notice thereof with the Plan Administrator. The
Salary Deferral Agreement shall be reactivated following the
expiration of the suspension period described above.
(2) Required Employee Contributions. The following provisions
shall apply with respect to suspension of Required
Employee Contributions by Participants. In the event that
a Participant suspends his Required Employee Contributions,
he shall automatically have his Voluntary Employee
Contributions suspended for the same period of time.
(A) Voluntary Suspension. A Participant may elect to
suspend his payroll deduction authorization for his
Required Employee Contributions by filing a written
notice thereof with the Plan Administrator. Such
notice shall be effective, and his applicable
contributions shall be suspended, on the date
specified in such notice, which date must be at least
15 days after such notice is filed. The notice shall
specify the period for which such suspension shall be
effective. Such period must be a minimum of one month
and may extend indefinitely.
(B) Suspension for Leave. A Participant who is absent from
employment on account of an authorized unpaid leave of
absence or military leave shall have his payroll
deduction authorization for Required Employee
Contributions suspended during such leave. Such
suspension of contributions shall be effective on the
date payment of Compensation by the Employer to him
ceases, and shall remain in effect until payment of
Compensation resumes.
(C) Withdrawal Suspension. A Participant who elects a
withdrawal in accordance with Section 3E may have his
Required Employee Contributions suspended on the date
such election becomes effective. Such suspension shall
remain in effect for the number of months specified
under the provisions of Section 3E.
(D) Involuntary Suspension. A Participant who ceases to
meet the eligibility requirements as specified in
Section 2B.1 but who remains in the employ of the
Employer shall have his Required Employee
Contributions suspended, effective as of the date he
ceases to meet the eligibility requirements. Such
suspension shall remain in effect until he again meets
such eligibility requirements.
The Participant may elect to reactivate his payroll
deduction authorization by filing a written notice thereof
with the Plan Administrator. The payroll deduction
authorization shall be reactivated following the expiration
of the suspension period described above.
(3) Voluntary Employee Contributions. The following provisions
apply with respect to suspension of Voluntary Employee
Contributions by Participants.
(A) Voluntary Suspension. A Participant may elect to
suspend his payroll deduction authorization for his
Voluntary Employee Contributions by filing a written
notice thereof with the Plan Administrator. Such
notice shall be effective, and his applicable
contributions shall be suspended, on the date
specified in such
Article II - General Provisions -33-
<PAGE> 42
contributions shall be suspended, on the date specified in
such notice, which date must be at least 15 days after such
notice is filed. The notice shall specify the period for
which such suspension shall be effective.
(B) Suspension for Leave. A Participant who is absent from
employment on account of an authorized unpaid leave of
absence or military leave shall have his payroll deduction
order for Voluntary Employee Contributions suspended during
such leave. Such suspension of contributions shall be
effective on the date payment of Compensation by the
Employer to him ceases, and shall remain in effect until
payment of Compensation resumes.
(C) Withdrawal Suspension. A Participant who elects a
withdrawal in accordance with Section 3E may have his
Voluntary Employee Contributions suspended on the date such
election becomes effective. Such suspension shall remain in
effect for the number of months specified therein.
(D) Involuntary Suspension. A Participant who ceases to meet
the eligibility requirements as specified in Section 2B.1
but who remains in the employ of the Employer shall have his
Voluntary Employee Contributions suspended, effective as of
the date he ceases to meet the eligibility requirements.
Such suspension shall remain in effect until he again meets
such eligibility requirements.
The Participant may elect to reactivate his payroll deduction
authorization by filing a written notice thereof with the Plan
Administrator. The payroll deduction authorization shall be
reactivated following the expiration of the suspension period
described above.
2C.2 MONEY PURCHASE PENSION PLAN.
(a) Contributions - Employer. As specified in the Adoption Agreement,
the Employer shall contribute an amount equal to a fixed
percentage of each Participant's Compensation, a flat dollar
amount, or an amount integrated with Social Security in
accordance with (1), (2) or (3) below:
(1) Formula A: Not Integrated with Social Security. An amount
equal to a percentage from 1% to 25% of the Compensation of
each Participant, as elected by the Employer in the Adoption
Agreement, subject to the Limitations on Allocations in
accordance with Section 4B.
(2) Formula B: Flat Dollar Amount. An amount, as elected by the
Employer in the Adoption Agreement. Formula B may not be
elected under a standardized plan.
(3) Formula C: Integrated with Social Security.
Base Contribution: An amount, equal to a percentage (as
specified in the Adoption Agreement) of Compensation of each
Participant up to the Social Security Integration Level;
Excess Contribution: In addition, an amount equal to a
percentage (as specified in the Adoption Agreement) of the
Participant's Compensation which is in excess of the Social
Security Integration
Article II - General Provisions -34-
<PAGE> 43
Level, subject to the Limitations on Allocations in
accordance with Section 4B. This Excess Contribution
percentage shall not exceed the lesser of:
(A) twice the Base Contribution or
(B) the Base Contribution plus the greater of:
(i) old age insurance portion of the Old Age Survivor
Disability (OASDI) tax rate; or
(ii) 5.7%.
If the Employer has elected in the Adoption Agreement to use
a Social Security Integration Level that in any Plan Year is
the greater of $10,000 or 20% but less than 100% of the
Social Security Taxable Wage Base, then the 5.7% limitation
specified in 2C.2(a)(3)(B)(ii) shall be adjusted in
accordance with the following table:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------
If the Social Security Integration Level
--------------------------------------------------------- Adjust
is more but not more 5.7% to
than than
-------------------------------------------------------------------------
<S> <C> <C> <C>
the greater of $10,000 or 80% of the Social Security 4.3%
20% of the Social Security Taxable Wage Base
Taxable Wage Base
80% of the Social Security 100% of the Social Security 5.4%
Taxable Wage Base Taxable Wage Base
-------------------------------------------------------------------------
</TABLE>
However, in the case of any Participant who has exceeded the
Cumulative Permitted Disparity Limit described below, the
Employer will contribute for each Participant who either
completes more than 500 Hours of Service during the Plan
Year or is employed on the last day of the Plan Year, an
amount equal to the Excess Contribution percentage
multiplied by the Participant's total Compensation.
Annual Overall Permitted Disparity Limit. Notwithstanding the
preceding provisions of this Section 2C.2(a), for any Plan Year
this Plan benefits any Participant who benefits under another
qualified plan or simplified employee pension plan, as defined in
Code section 408(k), maintained by the Employer that provides for
permitted disparity (or imputes disparity), Employer
contributions and Forfeitures will be allocated to the account of
each Participant who either completes more than 500 Hours of
Service during the Plan Year or who is employed as of the last
day of the Plan Year in the ratio that such Participant's total
Compensation bears to the total Compensation of all Participants.
Cumulative Permitted Disparity Limit. Effective for Plan Years
beginning on or after January 1, 1995, the Cumulative Permitted
Disparity Limit for a Participant is 35 total cumulative
permitted disparity years. Total cumulative permitted years mean
the number of years credited to the Participant for allocation or
accrual purposes under this Plan, any other qualified plan or
simplified employee pension plan (whether or not terminated) ever
maintained by the Employer. For purposes of
Article II - General Provisions -35-
<PAGE> 44
determining the Participant's Cumulative Permitted Disparity
Limit, all years ending in the same calendar year are treated as
the same year. If the Participant has not benefitted under a
defined benefit or target benefit plan for any year beginning
on or after January 1, 1994, the Participant has no Cumulative
Permitted Disparity Limit.
(b) Contributions - Participant.
The Plan Administrator will not accept Required Employee
Contributions or Voluntary Employee Contributions that are made
for Plan Years beginning after the Plan Year in which this
document is being adopted by the Employer. Required Employee
Contributions and Voluntary Employee Contributions for Plan Years
beginning after December 31, 1986, but before the Plan Year in
which this document is adopted, will be limited so as to meet the
nondiscrimination test of Code section 401(m) as provided in
Section 4A.4.
(c) Contributions - Timing.
Contributions made on other than an annual basis shall be paid to
the Trust or Insurance Company, as applicable, not less
frequently than monthly or every four weeks. Contributions made
on an annual basis shall be paid to the Trust or the Insurance
Company, as applicable, at the end of the Plan Year, or as soon
as possible on or after the last day of such Plan Year, but in
any event not later than the date prescribed by law for filing
the Employer's income tax return, including any extension
thereof. To the extent that contributions are used to purchase
Life Insurance Policies, such contributions for any Plan Year may
be paid to the Trust when premiums for such Policies are due
during the Plan Year.
(d) Contributions - Allocation.
Employer Contributions shall be allocated to the Participants'
Account in accordance with the allocation requirements as
specified by the Employer in the Adoption Agreement. If the
Employer has adopted a standardized plan, the allocation of any
nonannual contribution made by the Employer shall be made for
each Participant who is a Participant on any day of the
Contribution Period regardless of Hours of Service.
(e) Forfeitures.
Forfeitures will be used in the manner elected in the Adoption
Agreement as follows:
(1) To reduce Employer contributions or pay Plan expenses; or
(2) Allocated in the same manner elected in the Adoption
Agreement for the allocation of Employer contributions; or
(3) First, to reduce Employer contributions or pay Plan
expenses, with any remaining Forfeitures allocated in the
same manner elected in the Adoption Agreement for the
allocation of Employer contributions.
(f) Expenses.
The Employer may contribute to the Plan the amount necessary to
pay any applicable expense charges and administration charges. In
lieu of the
Article II - General Provisions -36-
<PAGE> 45
Employer contributing the amount necessary to pay such charges,
these expenses may be paid from Plan assets.
2C.3 ROLLOVER CONTRIBUTIONS.
If elected by the Employer in the Adoption Agreement, and without
regard to the limitations imposed under Section 4B, the Plan may
receive Rollover Contributions on behalf of an Employee, if the
Employee is so entitled under Code sections 402(c), 403(a)(4), or
408(d)(3)(A). Contributions may be rolled over either directly or
indirectly, in the form of cash, and may be all or a portion of the
funds eligible for rollover. Receipt of Rollover Contributions shall
be subject to the approval of the Plan Administrator. Before approving
the receipt of a Rollover Contribution, the Plan Administrator may
request any documents or other information from an Employee or
opinions of counsel which the Plan Administrator deems necessary to
establish that such amount is a Rollover Contribution.
If Rollover Contributions are elected by the Employer in the Adoption
Agreement, they may be received from an Employee who is not otherwise
eligible to participate in the Plan. Rollover Contributions may be
withdrawn by such Employee pursuant to the provisions of the Adoption
Agreement and Section 3E. In addition, such Employee may direct the
investment and transfer of amounts in his Participant's Account
pursuant to the terms of Section 5A. Upon Termination of Employment,
such Employee shall be entitled to a distribution of his Participant's
Account.
2C.4 CONTRIBUTIONS SUBJECT TO DAVIS-BACON ACT.
If the Employer designates under the Adoption Agreement that Employer
contributions are to be made in different amounts for different
contracts subject to the Davis-Bacon Act or other Prevailing Wage Law,
the Employer shall file with the Plan Administrator an irrevocable
written designation for each Prevailing Wage Law project, stating the
hourly contribution rate to be contributed to the Plan by the Employer
for each class of Employees working on the project in order to comply
with the Prevailing Wage Law applicable to the project. The
contribution rate designation shall be irrevocable with respect to
work on that project, although the hourly contribution rate may be
increased prospectively by the filing of a new written contribution
rate designation with the Plan Administrator.
2C.5 QVEC CONTRIBUTIONS.
The Plan Administrator will not accept QVEC Contributions which are
made for a taxable year beginning after December 31, 1986.
Contributions made prior to that date will be maintained in a separate
account that will be nonforfeitable at all times. The account will
share in the gains and losses under the Plan in the same manner as
described in Section 5A.3 of the Plan. No part of the QVEC
Contributions portion of the Participant's Account will be used to
purchase Life Insurance Policies. No part of the QVEC Contributions
portion of the Participant's Account will be available for loans.
Subject to Section 3C, Joint and Survivor Annuity Requirements (if
applicable), the Participant may withdraw any part of his QVEC
Contributions by making a written application to the Plan
Administrator.
Article III - General Provisions -37-
<PAGE> 46
ARTICLE III - DISTRIBUTIONS
3A. TIMING AND FORM OF BENEFITS
3A.1 PAYMENTS OF BENEFITS. The rules and procedures for electing the timing and
form of distribution effective for each Participant or Beneficiary shall be
formulated and administered by the Plan Administrator in a consistent
manner for all Participants in similar circumstances. For money purchase
and target benefit plans, the normal form of distribution shall be a Life
Annuity. For a profit sharing plan, the normal form of distribution shall
be cash. For any plan, the distribution shall be made within an
administratively reasonable time following the date the application for
distribution is filed with the Plan Administrator.
If elected by the Employer in the Adoption Agreement, a Participant, or his
Beneficiary as the case may be, may elect to receive distribution of all or
a portion of his Vested Interest in one or a combination of the following
forms of payment:
(a) Single sum cash payment;
(b) Life Annuity;
(c) Installment Payments (i.e., a series of periodic single-sum cash
payments over time, with no life contingency);
(d) Installment Refund Annuity (i.e., an Annuity that provides for fixed
monthly payments for a period certain of not less than 3 nor more than
15 years. If a Participant dies before the period certain expires, the
Annuity will be paid to the Participant's Beneficiary for the
remainder of the period certain. The period certain shall be chosen by
the Participant at the time the Annuity is purchased with the
Participant's Vested Interest. The Installment Refund Annuity is not a
Life Annuity and in no event shall the period certain extend to a
period which equals or exceeds the life expectancy of the
Participant);
(e) Employer stock, to the extent the Participant is invested therein.
All distributions are subject to the provisions of Section 3C, Joint and
Survivor Annuity Requirements.
If the value of a Participant's Vested Interest has never exceeded $3,500
at anytime, the Employer shall indicate in the Adoption Agreement whether a
distribution shall be made in the form of a single sum cash payment upon
such Participant's Termination of Employment and may not be deferred or the
Participant may elect to defer distribution until the April 1 following the
calendar year in which he reaches age 70-1/2. If the Employer permits
Participants to defer such distributions, failure to make an election will
be deemed to be an election to defer to the April 1 following the calendar
year in which the Participant reaches age 70-1/2.
If the Participant's Vested Interest exceeds (or at the time of any prior
distribution exceeded) $3,500, and such amount is immediately
distributable, the Participant and the Participant's Spouse, if required,
(or where either the Participant or the Spouse has died, the survivor) must
consent to any distribution of such account balance. The consent of the
Participant and the Participant's Spouse, if required, shall be obtained in
writing within the 90-day period ending on the Annuity
Article III - Distributions -38-
<PAGE> 47
Starting Date. The "Annuity Starting Date" is the first day of the
first period for which an amount is paid as an Annuity or any other
form.
An account balance is considered immediately distributable if any
part of the account balance could be distributed to the Participant
(or surviving Spouse) before the Participant attains (or would have
attained if not deceased) the later of Normal Retirement Age or age
62.
Instead of consenting to a distribution, the Participant may elect to
defer the distribution until the April 1 following the calendar year
in which he reaches age 70-1/2. Failure to make an election will be
deemed to be an election to defer to the April 1 following the
calendar year in which he reaches age 70-1/2.
The Plan Administrator shall notify the Participant and the
Participant's Spouse of the right to defer any distribution. Such
notification shall include a general description of the material
features and an explanation of the relative values of the optional
forms of benefit available under the Plan in a manner that would
satisfy the notice requirements of Code section 417(a)(3), and shall
be provided no less than 30 days and no more than 90 days prior to
the Annuity Starting Date.
If the distribution is one to which Code sections 401(a)(11) and 417
do not apply, such distribution may commence less than 30 days after
the notice required under Code regulation section 1.411(a)-11(c) is
given, provided that:
(a) The Plan Administrator clearly informs the Participant that the
Participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not
to elect a distribution (and, if applicable, a particular
distribution option); and
(b) The Participant, after receiving the notice, affirmatively
elects a distribution.
Notwithstanding the foregoing, only the Participant need consent to
the commencement of a distribution in the form of a Qualified Joint
and Survivor Annuity while the account balance is immediately
distributable. Furthermore, if payment in the form of a Qualified
Joint and Survivor Annuity is not required with respect to the
Participant pursuant to Section 3C.6 of the Plan, only the
Participant need consent to the distribution of an account balance
that is immediately distributable. Neither the consent of the
Participant nor the Participant's Spouse shall be required to the
extent that a distribution is required to satisfy Code section
(401(a)(9) or section 415. In addition, upon termination of this
Plan, if the Plan does not offer an annuity option (purchased from a
commercial provider) and if the Employer or any entity within the
same controlled group as the Employer does not maintain another
defined contribution plan (other than an employee stock ownership
plan as defined in Code section 4975(e)(7)), then the Participant's
account balance will, without the Participant's consent, be
distributed to the Participant. However, if any entity within the
same controlled group as the Employer maintains another defined in
Code section 4975(e)(7), then the Participant's account balance will
be transferred without the Participant's consent to the other plan if
the participant does not consent to an immediate distribution.
For purposes of determining the applicability of the foregoing consent
requirements to distributions made before the first day of the first
Plan Year
Article III - Distributions -39-
<PAGE> 48
beginning after December 31, 1988,the Participant's vested account balance
shall not include amounts attributable to QVEC Contributions made between
December 31, 1981 and January 1, 1987, plus gains and minus losses thereon
("accumulated QVEC Contributions").
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.
A Participant who terminates employment and does not consent to an
immediate distribution shall have his distribution deferred. Such a
distribution shall commence no later than the April 1 following the date
the Participant attains age of 70-1/2. Loans may not be initiated for
Participants covered by this paragraph except if, after his Termination of
Employment, the Participant is still a party-in-interest (as defined in
ERISA). A Participant who continues to maintain an account balance under
the Plan may elect to withdraw an amount which is equal to any whole
percentage (not to exceed 100%) from his Participant's Account. Such an
election shall be made in accordance with Section 3E. Such Participant as
described herein shall have the authority to direct the transfer of his
Vested Interest in accordance with Section 5A.2. The election to defer
distribution may be revoked at any time by submitting a written request to
the Plan Administrator. Any Forfeiture attributable to withdrawals shall be
subject to the requirements of Sections 3D.1 and 3E.8 of the Plan. A
Participant whose Termination of Employment is on or after his Early
Retirement Date may elect to defer the distribution subject to the
requirements of Section 3B.
3A.2 COMMENCEMENT OF BENEFITS. Unless the Participant elects otherwise,
distribution of benefits will begin no later than the 60th day after the
latest of the close of the Plan Year in which:
(a) The Participant attains age 65 (or Normal Retirement Age, if earlier);
(b) The 10th anniversary of the year in which the Participant commenced
participation in the Plan occurs; or,
(c) The Participant terminates Service with the Employer.
Notwithstanding the foregoing, the failure of a Participant and Spouse to
consent to a distribution, if required, while a benefit is immediately
distributable within the meaning of Section 3A.1 of the Plan, shall be
deemed to be an election to defer distribution to the date the Participant
attains age 70-1/2.
However, in no event shall distribution of that portion of a Participant's
Account attributable to Elective Deferral Contributions, Qualified Matching
Contributions, and Qualified Nonelective Contributions be made prior to the
earliest of the Participant's Retirement, death, Disability, separation
from Service, attainment of age 59-1/2, or, with respect to Elective
Deferral Contributions only, due to Serious Financial Hardship, unless such
distribution is made on account of:
(a) The Employer's sale, to an unrelated entity, of its interest in a
subsidiary (within the meaning of Code section 490(d)(3)), where the
Employer continues to maintain this Plan and the Participant continues
employment with the subsidiary; or
(b) The Employer's sale, to an unrelated corporation, of substantially all
assets (within the meaning of Code section 409(d)(2)) used in its
trade or business, where the Employer continues to maintain this Plan
and the
Article III - Distributions -40-
<PAGE> 49
Participant continues employment with the employer acquiring such
assets; or
(c) The termination of the Plan, as provided in Section 7B, without the
establishment of another defined contribution plan, other than an
employee stock ownership plan (as defined in Code sections 4975(e) or
409) or a simplified employee pension plan as defined in Code section
408(k).
All distributions that may be made in accordance with one or more of
the preceding distributable events are subject to the spousal and
Participant consent requirements (if applicable) of Code sections
401(a)(11) and 417. In addition, distributions made after March 31,
1988, which are triggered by any of the events described in the
immediately preceding paragraphs (a), (b), or (c), must be made in a
lump sum.
3A.3 FROM LIFE INSURANCE POLICIES. The Trustee shall arrange with the
Insurance Company any distribution to any Participant during his lifetime
from any Life Insurance Policy or Policies on his life. The manner of
distribution shall be a transfer of the values of said Policy or Policies
to the Participant's Account for distribution as a portion thereof in
accordance with this Section.
Subject to Section 3C, Joint and Survivor Annuity Requirements, the
Policies on a Participant's life will be converted to cash or an Annuity or
distributed to the Participant upon commencement of benefits.
In the event of any conflict between the terms of this Plan and the terms
of any Life Insurance Policy purchased hereunder, the Plan provisions shall
control.
3A.4 NONTRANSFERABLE. Any Annuity Contract distributed herefrom must
be nontransferable.
3A.5 ALTERNATE PAYEE SPECIAL DISTRIBUTION. Distributions pursuant to
Section 5D.8 may be made without regard to the age or employment status of
the Participant.
3B. MINIMUM DISTRIBUTION REQUIREMENTS
3B.1 DEFINITIONS.
(a) APPLICABLE LIFE EXPECTANCY. The term Applicable Life Expectancy means
the Life Expectancy (or joint and last survivor expectancy) calculated
using the attained age of the Participant (or Designated Beneficiary)
as of the Participant's (or Designated Beneficiary's) birthday in the
applicable calendar year reduced by one 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.
(b) DESIGNATED BENEFICIARY. The term 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.
If a Participant's Beneficiary, as determined in accordance with
Section 1.8, is
Article III - Distributions -41-
<PAGE> 50
his estate, such Participant shall be treated as having no Designated
Beneficiary.
(c) DISTRIBUTION CALENDAR YEAR. The term 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 Section 3B.3 below.
(d) 5-PERCENT OWNER. For purposes of this Section, the term 5-Percent
Owner means a 5-percent owner as defined in Code section 416(i)
(determined in accordance with section 416 but without regard to
whether the Plan is Top-Heavy) at any time during the Plan Year
ending with or within the calendar year in which such Employee
attains age 66-1/2 or any later Plan Year.
(e) LIFE EXPECTANCY. The term Life Expectancy means life expectancy and
joint and last survivor expectancy as computed by use of the expected
return multiples in Table V and VI of section 1.72-9 of the Income Tax
Regulations.
Unless otherwise elected by the Participant (or Spouse, in the case of
distributions described in Section 3B.3(b)(2)) by the time
distributions are required to begin, Life Expectancies shall be
recalculated annually. Such election shall be irrevocable as to the
Participant (or Spouse) and shall apply to all subsequent years. The
Life Expectancy of a non-Spouse Beneficiary may not be recalculated.
(f) PARTICIPANT'S BENEFIT. The term Participant's Benefit means:
(1) The Participant's Vested Interest 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
Participant's Account as of dates in the Valuation Calendar Year
after the valuation date and decreased by distributions made in
the Valuation Calendar Year after the valuation date.
(2) Exception for second Distribution Calendar Year. For purposes of
paragraph (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.
(g) REQUIRED BEGINNING DATE. The term Required Beginning Date means:
(1) General Rule. The first Required Beginning Date of a Participant
is the first day of April of the calendar year following the
calendar year in which the Participant attains age 70-1/2.
ARTICLE III - DISTRIBUTIONS -42-
<PAGE> 51
(2) Transitional Rules. The Required Beginning Date of a
Participant who attains age 70-1/2 before January 1, 1988,
shall be determined in accordance with (A) or (B) below:
(A) Non-5-Percent Owners. The Required Beginning Date of a
Participant who is not a 5-Percent owner is the first
day of April of the calendar year following the
calendar year in which the later of retirement or
attainment of age 70-1/2 occurs.
(B) 5-Percent Owners. The Required Beginning Date of a
Participant who is a 5-Percent Owner during any year
beginning after December 31, 1979 is the first day of
April following the later of:
(i) The calender year in which the Participant
attains age 70-1/2; or
(ii) The earlier of the calendar year which ends with
or within the Plan Year in which the Participant
becomes a 5-Percent Owner, or the calendar year in
which the Participant retires.
The Required Beginning Date of a Participant who is not
a 5-Percent Owner who attained age 70-1/2 during 1988
and who has not retired as of January 1, 1989 is April
1, 1990.
(3) 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 later
year.
3B.2 DISTRIBUTION REQUIREMENTS.
(a) Except as otherwise provided in Section 3C, Joint and Survivor
Annuity Requirements, the requirements of this Section 3B shall
apply to any distribution of a Participant's Accrued Benefit 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.
(b) All distributions required under this Section 3B shall be
determined and made in accordance with regulations under section
401(a)(9), including the minimum distribution incidental benefit
requirement of regulations section 1.401(a)(9)-2.
A Participant's entire Vested Interest must be distributed or
begin to be distributed no later than the Participant's Required
Beginning Date.
(c) Limits on Distribution Periods. As of the first Distribution
Calendar Year, distributions, if not made in a single sum, may
only be made over one of the following periods (or a combination
thereof):
(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
Article III - Distributions -43-
<PAGE> 52
(4) A period certain not extending beyond the joint and last
survivor expectancy of the Participant and a Designated
Beneficiary.
(d) Determination of amount to be distributed each year. If the
Participant's Vested Interest is to be distributed in other than
a single sum, the following minimum distribution rules shall
apply on or after the Required Beginning Date:
(1) If the Participant's entire Vested Interest is to be
distributed over (1) a period not extending beyond the Life
Expectancy of the Participant or the joint life and last
survivor expectancy of the Participant and the Participant's
Designated Beneficiary or (2) a period not extending beyond
the Life Expectancy of the Designated Beneficiary, the
amount required to be distributed for each calendar year,
beginning with distributions for the first Distribution
Calendar Year, must at least equal the quotient obtained by
dividing the Participant's benefit by the Applicable Life
Expectancy.
(2) 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.
(3) For calendar years beginning after December 31, 1988, the
amount to be distributed each year, beginning with
distributions for the first Distribution Calendar Year,
shall not be less than the quotient obtained by dividing the
Participant's benefit by the lesser of (1) the Applicable
Life Expectancy or (2) if the Participant's Spouse is not
the Designated Beneficiary, the applicable divisor
determined from the table set forth in regulations section
1.401(a)(9)-2, Q&A-4. Distributions after the death of the
Participant shall be distributed using the Applicable Life
Expectancy in Section 3B.2(d)(1) above, as the relevant
divisor without regard to regulations section 1.401(a)(9)-2.
(4) The minimum distribution required for the Participant's
first Distribution Calendar Year must be made on or before
the Participant's Required Beginning Date. The minimum
distribution for other calendar years, including the minimum
distribution for the Distribution Calendar Year in which the
Employee's Required Beginning Date occurs, must be made on
or before December 31 of that Distribution Calendar Year.
(e) Other Forms. If the Participant's benefit is distributed in the
form of an Annuity purchased from an Insurance Company,
distributions thereunder shall be made in accordance with the
requirements of Code section 401(a)(9) and the regulations
thereunder.
3B.3 DEATH DISTRIBUTION PROVISIONS. Upon the death of the Participant, the
following distribution provisions shall take effect:
(a) Distributions Beginning Before Death. If the Participant dies
after distribution of his entire Vested Interest has begun, the
remaining portion of such entire Vested Interest will continue to
be distributed at least as
ARTICLE III - Distributions -44-
<PAGE> 53
rapidly as under the method of distribution being used prior to
the Participant's death.
(b) Distributions Beginning After Death. If the Participant dies
before distribution of his entire Vested Interest begins,
distribution of the Participant's entire Vested Interest shall be
completed by December 31 of the calendar year containing the
fifth anniversary of the Participant's death except to the extent
that an election is made to receive distributions in accordance
with (1) or (2) below:
(1) If any portion of the Participant's entire Vested Interest
is payable to a Designated Beneficiary, distributions may be
made over the Life Expectancy of the Designated Beneficiary
commencing on or before December 31 of the calendar year
immediately following the calendar year in which the
Participant died;
(2) If the Designated Beneficiary is the Participant's surviving
Spouse, the date distributions are required to begin in
accordance with (1) above shall not be earlier than the
later of (i) December 31 of the calendar year immediately
following the calendar year in which the Participant died
and (ii) December 31 of the calendar year in which the
Participant would have attained age 70-1/2.
If the Participant has not made an election pursuant to this
Section 3B.3(b) by the time of his or her death, the
Participant's Designated Beneficiary must elect the method of
distribution no later than the earlier of (1) December 31 of the
calendar year in which distributions would be required to begin
under this Section, or (2) December 31 of the calendar year which
contains the fifth anniversary of the Participant's date of
death. 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 Vested
Interest must be completed by December 31 of the calendar year
containing the fifth anniversary of the Participant's death and
will be paid in the form of a single sum cash payment.
(c) For purposes of Section 3B.3(b) above, if the surviving Spouse
dies after the Participant, but before payments to such Spouse
begin, the provisions of this Section, with the exception of
paragraph (b)(2) therein, shall be applied as if the surviving
Spouse were the Participant.
(d) For purposes of this Section, distribution of a Participant's
entire Vested Interest pursuant to Section 3B.3(b) is considered
to begin on the Participant's Required Beginning Date (or, if
paragraph (c) above is applicable, the date distribution is
required to begin to the Surviving Spouse). 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.
3B.4 TRANSITIONAL RULE.
(a) Notwithstanding the other requirements of this Section 3B and
subject to the requirements of Section 3C, Joint and Survivor
Annuity Requirements, distribution on behalf of any Employee,
including a 5-Percent Owner, may
Article III - Distributions -45-
<PAGE> 54
be made in accordance with all of the following requirements
(regardless of when such distribution commences):
(1) The distribution by the Plan is one which would not have
disqualified such Plan under Code section 401(a)(9) as in
effect prior to amendment by the Deficit Reduction Act of
1984.
(2) The distribution is in accordance with a method of
distribution designated by the Employee whose entire Vested
Interest in the Plan is being distributed or, if the
Employee is deceased, by a Beneficiary of such Employee.
(3) Such designation was in writing, was signed by the Employee
or the Beneficiary, and was made before January 1, 1984.
(4) The Employee had accrued a benefit under the Plan as of
December 31, 1983.
(5) The method of distribution designated by the Employee or
the Beneficiary specifies the time at which distribution
will commence, the period over which distributions will be
made, and in the case of any distribution upon the
Employee's death, the Beneficiaries of the Employee listed
in order of priority.
(b) A distribution upon death will not be covered by this
transitional rule unless the information in the designation
contains the required information described above with respect to
the distribution to be made upon the death of the Employee.
(c) For any distribution that commences before January 1, 1984, but
continues after December 31, 1983, the Employee or the
Beneficiary, to whom such distribution is being made, will be
presumed to have designated the method of distribution under
which the distribution is being made if the method of
distribution was specified in writing and the distribution
satisfies the requirements in subsections (a)(1) and (5).
(d) If a designation is revoked, any subsequent distribution must
satisfy the requirements of Code section 401(a)(9) and related
regulations. If a designation is revoked subsequent to the date
distributions are required to begin, the Plan must distribute by
the end of the calendar year following the calendar year in which
the revocation occurs the total amount not yet distributed which
would have been required to have been distributed to satisfy Code
section 401(a)(9) and related regulations, except for the TEFRA
section 242(b)(2) election. For calendar years beginning after
December 31, 1988, such distributions must meet the minimum
distribution incidental benefit requirements in regulations
section 1.401(a)(9)-2. Any changes in the designation will be
considered to be a revocation of the designation. However, the
mere substitution or addition of another Beneficiary (one not
named in the designation) under the designation will not be
considered to be a revocation of the designation, so long as such
substitution or addition does not alter the period over which
distributions are to be made under the designation, directly or
indirectly (for example, by altering the relevant measuring
life). In the case in which an amount is transferred or rolled
from one plan to another plan, the rules in Q&A J-2 and Q&A J-3
shall apply.
Article III - Distributions -46-
<PAGE> 55
3C. JOINT AND SURVIVOR ANNUITY REQUIREMENTS
3C.1 APPLICABILITY. Except as provided in Section 3C.6, the provisions of
this Section 3C shall apply to any Participant who is credited with
at least one Hour of Service with the Employer on or after August 23,
1984, and such other Participants as provided in Section 3C.7.
3C.2 DEFINITIONS. The following definitions shall apply to this Section 3C.
(a) EARLIEST RETIREMENT AGE. The term Earliest Retirement Age means
the earliest date on which, under the Plan, the Participant
could elect to receive retirement benefits.
(b) ELECTION PERIOD. The term Election Period means the period which
begins on the first day of the Plan Year in which the
Participant attains age 35 and ends on the date of the
Participant's death. If a Participant separates from service
prior to the first day of the Plan Year in which he attains age
35, with respect to the Vested Account Balance as of the date of
separation, the election period shall begin on the date of
separation.
Pre-age 35 waiver: A Participant who will not yet attain age 35
as of the end of any current Plan Year may make a special
Qualified Election to waive the Qualified Preretirement Survivor
Annuity for the period beginning on the date of such election
and ending on the first day of the Plan Year in which the
Participant will attain age 35. Such election shall not be valid
unless the Participant receives a written explanation of the
Qualified Preretirement Survivor Annuity in such terms as are
comparable to the explanation required under Section 3C.5(a).
Except as provided in Section 3C.6, Qualified Preretirement
Survivor coverage will be automatically reinstated as of the
first day of the Plan Year in which the Participant attains age
35. Any new waiver on or after such date shall be subject to the
full requirements of this Section 3C.
(c) QUALIFIED ELECTION. The term Qualified Election means a waiver
of a Qualified Joint and Survivor Annuity or a Qualified
Preretirement Survivor Annuity. Any waiver of a Qualified Joint
and Survivor Annuity or a Qualified Preretirement Survivor
Annuity shall not be effective unless: (a) the Participant's
Spouse consents in writing to the election; (b) the election
designates a specific Beneficiary, including any class of
beneficiaries or any contingent beneficiaries, which may not be
changed without spousal consent (or the Spouse expressly permits
designations by the Participant without any further spousal
consent); (c) the Spouse's consent acknowledges the effect of
the election; and (d) the Spouse's consent is witnessed by a
Plan representative or notary public.
Additionally, a Participant's waiver of the Qualified Joint and
Survivor Annuity shall not be effective unless the election
designates a form of benefit payment which may not be changed
without spousal consent (or the Spouse expressly permits
designations by the Participant without any further spousal
consent). If it is established to the satisfaction of a Plan
representative that there is no Spouse or that the Spouse cannot
be located, a waiver will be deemed a Qualified Election.
Any consent by a Spouse obtained under this provision (or
establishment that the consent of a Spouse may not be obtained)
shall be effective only with respect to such Spouse. A consent
that permits designations by the
Article III - Distributions -47-
<PAGE> 56
Participant without any requirement of further consent by such
Spouse must acknowledge that the Spouse has the right to limit
consent to a specific Beneficiary, and a specific form of benefit
where applicable, and that the Spouse voluntarily elects to
relinquish either or both of such rights. A revocation of a
prior waiver may be made by a Participant without the consent of
the Spouse at any time before the commencement of benefits. The
number of revocations shall not be limited. No consent obtained
under this provision shall be valid unless the Participant has
received notice as provided in Section 3C.5 below.
(d) QUALIFIED JOINT AND SURVIVOR ANNUITY. The term Qualified Joint
and Survivor Annuity mean an immediate Annuity for the life of
the Participant with a survivor Annuity for the life of the
Spouse which is not less than 50 percent and not more than 100
percent of the amount of the Annuity which is payable during the
joint lives of the Participant and the Spouse and which is the
amount of benefit which can be purchased with the Participant's
Vested Account Balance. The percentage of the survivor annuity
under the Plan shall be 50 percent (unless a different percentage
is elected by the Participant).
(e) VESTED ACCOUNT BALANCE. The term Vested Account Balance means the
aggregate value of the Participant's vested account balances
derived from contributions made by both the Participant and
Employer, whether vested before or upon death, including the
proceeds of insurance contracts, if any, on the Participant's
life and Rollover Contributions. The provisions of this Section
3C shall apply to a Participant who is vested in amounts
attributable to Employer contributions, Employee Contributions
(or both) made under this Plan at the time of death or
distribution.
3C.3 QUALIFIED JOINT AND SURVIVOR ANNUITY. Unless an optional form of
benefit is selected pursuant to a Qualified Election within the 90-day
period ending on the Annuity Starting Date, a married Participant's
Vested Account Balance will be paid in the form of a Qualified Joint
and Survivor Annuity and an unmarried Participant's Vested Account
Balance will be paid in the form of a Life Annuity. The Participant
may elect to have such Annuity distributed upon attainment of the
Earliest Retirement Age under the Plan.
3C.4 QUALIFIED PRERETIREMENT SURVIVOR ANNUITY. Unless an optional form of
benefit has been selected within the Election Period pursuant to a
Qualified Election, if a Participant dies before the Annuity Starting
Date, then no less than 50 percent (or 100 percent if so elected in
the Adoption Agreement) of the Participant's Vested Account Balance
shall be applied toward the purchase of an Annuity for the life of the
surviving Spouse. If less than 100 percent is selected, then the
remaining portion of the Vested Account Balance shall be paid to the
Participant's Beneficiary. If less than 100 percent of the Vested
Account Balance is paid to the surviving Spouse, the amount of
Employee Contributions allocated to the surviving Spouse will be in
the same proportion as the Employee Contributions bears to the total
Vested Account Balance of the Participant. The surviving Spouse may
elect to have such Annuity distributed within a reasonable period
after the Participant's death.
3C.5 NOTICE REQUIREMENTS.
(a) In the case of a Qualified Joint and Survivor Annuity, the Plan
Administrator shall no less than 30 days and no more than 90 days
prior to
Article III - Distributions -48-
<PAGE> 57
the Annuity Starting Date provide each Participant with a written
explanation of: (i) the terms and conditions of a Qualified
Joint and Survivor Annuity; (ii) the Participant's right to make
and the effect of an election to waive the Qualified Joint and
Survivor Annuity form of benefit; (iii) the rights of a
Participant's Spouse; and (iv) the right to make, and the effect
of, a revocation of a previous election to waive the Qualified
Joint and Survivor Annuity.
(b) In the case of a Qualified Preretirement Survivor Annuity, the
Plan Administrator shall provide each Participant within the
applicable period (described in subsection (c) below) for such
Participant a written explanation of the Qualified Preretirement
Survivor Annuity in such terms and in such manner as would be
comparable to the explanation provided for meeting the
requirements of Section 3C.5(a) applicable to a Qualified Joint
and Survivor Annuity.
(c) The "applicable period" for a Participant is whichever of the
following periods ends last: (i) the period beginning with the
first day of the Plan Year in which the Participant attains age
32 and ending with the close of the Plan Year preceding the Plan
Year in which the Participant attains age 35; (ii) a reasonable
period ending after the individual becomes a Participant; (iii) a
reasonable period ending after the Qualified Joint and Survivor
Annuity is no longer fully subsidized; (iv) a reasonable period
ending after this Section 3C first applies to the Participant.
Notwithstanding the foregoing, notice must be provided within a
reasonable period ending after separation from Service before
attaining age 35.
For purposes of applying the preceding paragraph, a reasonable
period ending after then enumerated events described in (ii),
(iii) and (iv) is the end of the two-year period beginning one
year prior to the date the applicable event occurs, and ending
one year after that date. In the case of a Participant who
separates from Service before the Plan Year in which he attains
age 35, notice shall be provided within the two-year period
beginning one year prior to separation and ending one year after
separation. If such a Participant thereafter returns to
employment with the Employer, the applicable period for such
Participant shall be redetermined.
(d) Notwithstanding the other requirements of this Section, the
respective notices prescribed by this Section need not be given
to a Participant if (1) the Plan "fully subsidizes" the costs of
a Qualified Joint and Survivor Annuity or Qualified Preretirement
Survivor Annuity, and (2) the Plan does not allow the Participant
to waive the Qualified Joint and Survivor Annuity or Qualified
Preretirement Survivor Annuity and does not allow a married
Participant to designate a nonspouse Beneficiary. For purposes of
this Section 3C.5(d), a Plan fully subsidizes the costs of a
benefit if no increase in cost or decrease in benefits to the
Participant may result from the Participant's failure to elect
another benefit.
3C.6 SAFE HARBOR RULES.
(a) This Section shall apply to a Participant in a profit sharing
plan, and to any distribution made on or after the first day of
the first Plan Year beginning after December 31, 1988, from or
under a separate account
Article III - Distributions -49-
<PAGE> 58
attributable solely to accumulated QVEC Contributions (as
described in Section 3A.1), and maintained on behalf of a
Participant in a money purchase pension plan (including a target
benefit plan), if the following conditions are met: (1) the
Participant does not or cannot elect payments in the form of a
Life Annuity; and (2) on the death of a Participant, the
Participant's Vested Account Balance will be paid to the
Participant's surviving Spouse, but if there is no surviving
Spouse, or if the surviving Spouse has consented in a manner
conforming to a Qualified Election, then to the Participant's
designated Beneficiary.
(b) The surviving Spouse may elect to have distribution of the
Vested Account Balance commence within the 90-day period
following the date of the Participant's death. The account
balance shall be adjusted for gains or losses occurring after
the Participant's death in accordance with the provisions of the
Plan governing the adjustment of account balances for other
types of distributions.
(c) The Participant may waive the spousal death benefit described in
this Section 3C.6 at any time provided that no such waiver shall
be effective unless it satisfies the conditions of Section
3C.2(c) (other than the notification requirement referred to
therein) that would apply to the Participant's waiver of the
Qualified Preretirement Survivor Annuity.
(d) If this Section 3C.6 is operative, than the other provisions of
this Section 3C, other than Section 3C.7, shall be inoperative.
This Section 3C.6 shall not be operative with respect to a
Participant in a profit sharing plan if the plan is a direct or
indirect transferee of a defined benefit plan, money purchase
plan, a target benefit plan, stock bonus, or profit sharing plan
that is subject to the survivor annuity requirements of Code
sections 401(a)(11) and 417.
(e) For purposes of this Section 3C.6, the term Vested Account
Balance shall mean, in the case of a money purchase pension plan
or a target benefit plan, the Participant's separate account
balance attributable solely to accumulated QVEC Contributions
(as described in Section 3A.1). In the case of a profit sharing
plan, the term Vested Account Balance shall have the same
meaning as provided in Section 3C.2(e).
3C.7 TRANSITIONAL RULES.
(a) Any living Participant not receiving benefits on August 23,
1984, who would otherwise not receive the benefits prescribed by
the previous Sections of this Section 3C must be given the
opportunity to elect to have the prior Sections of this Section
3C apply if such Participant is credited with at least one Hour
of Service under this Plan or a predecessor plan in a Plan Year
beginning on or after January 1, 1976, and such Participant had
at least 10 years of vesting Service when he separated from
Service.
(b) Any living Participant not receiving benefits on August 23,
1984, who was credited with at least one Hour of Service under
this Plan or a predecessor plan on or after September 2, 1974,
and who is not otherwise credited with any Service in a Plan
Year beginning on or after January 1, 1976, must be given the
opportunity to have his benefits paid in accordance with Section
3C.7(d).
Article III - Distributions -50-
<PAGE> 59
(c) The respective opportunities to elect (as described in Sections
3C.7(a) and 3C.7(b) above) must be afforded to the appropriate
Participants during the period commencing on August 23, 1984, and
ending on the date benefits would otherwise commence to said
Participants.
(d) Any Participant who has elected pursuant to Section 3C.7(b), and
any Participant who does not elect under Section 3C.7(a), or who
meets the requirements of Section 3C.7(a), except that such
Participant does not have at least 10 years of vesting Service
when he separates from Service, shall have his benefits
distributed in accordance with all of the following requirements
if benefits would have been payable in the form of a Life
Annuity:
(1) Automatic Joint and Survivor Annuity. If benefits in the
form of a Life Annuity become payable to a married
Participant who:
(A) Begins to receive payments under the Plan on or after
Normal Retirement Age; or
(B) Dies on or after Normal Retirement Age while still
working for the Employer; or
(C) Begins to receive payments on or after the Qualified
Early Retirement Age; or
(D) Separates from Service on or after attaining Normal
Retirement Age (or the Qualified Early Retirement Age)
and after satisfying the eligibility requirements for
the payment of benefits under the Plan and thereafter
dies before beginning to receive such benefits;
then such benefits will be received under this Plan in the
form of a Qualified Joint and Survivor Annuity, unless the
Participant has elected otherwise during the Election
Period. The Election Period must begin at least 6 months
before the Participant attains Qualified Early Retirement
Age and end not more than 90 days before the commencement of
benefits. Any election hereunder will be in writing and may
be changed by the Participant at any time.
(2) Election of Early Survivor Annuity. A Participant who is
employed after attaining the Qualified Early Retirement Age
will be given the opportunity to elect, during the Election
Period, to have a survivor Annuity payable on death. If the
Participant elects the survivor Annuity, payments under such
Annuity must not be less than the payments which would have
been made to the Spouse under the Qualified Joint and
Survivor Annuity if the Participant had retired on the day
before his or her death. Any election under this provision
will be in writing and may be changed by the Participant at
any time. The Election Period begins on the later of (1) the
90th day before the Participant attains the Qualified Early
Retirement Age, or (2) the date on which participation
begins, and ends on the date the Participant terminates
employment.
Article III - Distributions -51-
<PAGE> 60
(3) For purposes of this Section 3C.7(d):
(A) Qualified Early Retirement Age is the latest of:
(i) The earliest date, under the Plan, on which the
Participant may elect to receive retirement benefits;
(ii) The first day of the 120th month beginning before
the Participant reaches Normal Retirement Age; or
(iii) The date the Participant begins participation.
(B) Qualified Joint and Survivor Annuity is an Annuity for the
life of the Participant with a survivor Annuity for the
life of the Spouse as described in Section 3C.2(d).
3D. TERMINATION OF EMPLOYMENT
3D.1 DISTRIBUTION. A Participant who terminates employment shall be
entitled to receive a distribution of his entire Vested Interest.
Such distribution shall be further subject to the terms and conditions
of Section 3C. The method used, as elected by the Employer in the
Adoption Agreement, is one of the following:
(a) Immediate (Cash-Out Method)
If at the time of his Termination of Employment the Participant
is not 100% vested and does not take a distribution from the
portion of his Vested Interest that is attributable to
contributions made by the Employer, the non-vested portion of
his Participant's Account will become a Forfeiture upon the date
such terminated Participant incurs 5 consecutive 1-Year
Breaks-in-Service.
However, if at the time of his Termination of Employment the
Participant is not 100% vested and does take a distribution from
the portion of his Vested Interest that is attributable to
contributions made by the Employer, or if the Participant is 0%
vested, the non-vested portion of his Participant's Account will
become a Forfeiture immediately upon the Participant's
Termination of Employment date.
If a Participant whose non-vested portion of his Participant's
Account became a Forfeiture in accordance with the terms of the
preceding paragraph is later rehired by the Employer and
re-enrolls in the Plan before incurring 5 consecutive 1-Year
Breaks-in-Service, then the amount of the Forfeiture shall be
restored to the Participant's Account by the Employer in
accordance with the repayment provision elected by the Employer
in the Adoption Agreement and described in Section 3D.2.
(b) 1-Year Break-in-Service (Cash-Out Method).
If at the time of his Termination of Employment the Participant
is not 100% vested and does not take a distribution from the
portion of his Vested Interest that is attributable to
contributions made by the Employer, the non-vested portion of his
Participant's Account will become a Forfeiture upon the date such
terminated Participant incurs 5 consecutive 1-Year Breaks-in-
Service.
However, if at the time of his Termination of Employment the
Participant is not 100% vested and does take a distribution from
the portion of his
Article III - Distributions -52-
<PAGE> 61
Vested Interest that is attributable to contributions made by the
Employer, or if the Participant is 0% vested, the non-vested
portion of his Participant's account will become a Forfeiture
upon the date such terminated Participant incurs a 1-Year
Break-in-Service.
If a terminated Participant, whose non-vested portion of his
Participant's Account became a Forfeiture in accordance with the
terms of the preceding paragraph, is later rehired by the
Employer and re-enrolls in the Plan before incurring 5
consecutive 1-year Breaks-in-Service, then the amount of the
Forfeiture shall be restored to the Participant's Account by the
Employer in accordance with the repayment provision elected by
the Employer in the Adoption Agreement and described in Section
3D.2.
(c) 5 Consecutive 1-Year Breaks-in-Service.
If at the time of his Termination of Employment the Participant
is not 100% vested, the non-vested portion of his Participant's
Account will become a Forfeiture upon the date the terminated
Participant incurs 5 consecutive 1-Year Breaks-in-Service.
3D.2 REPAYMENT OF PRIOR DISTRIBUTION.
If a terminated Participant is later rehired by the Employer and
re-enrolls in the Plan, the following Optional Payback or Required
Payback provisions, as elected by the Employer in the Adoption
Agreement, will apply:
(a) Optional Payback:
(1) If the Participant was 0% vested at his Termination of
Employment and did not incur 5 consecutive 1-Year
Breaks-in-Service after such date, the amount which became a
Forfeiture, if any, shall be restored by the Employer at the
time such Participant re-enrolls in the Plan.
(2) If the Participant was vested but not 100% vested at his
Termination of Employment and did not incur 5 consecutive
1-Year Breaks-in-Service after such date, the amount which
became a Forfeiture, if any, shall be restored by the
Employer at the time such Participant re-enrolls in the
Plan. In addition, the Participant may repay the full
amount of the distribution attributable to the Employer
contributions, if any, made at his Termination of
Employment. Such repayment of Employer contributions,
however, must be made before the Participant has incurred 5
consecutive 1-Year Breaks-in-Service following the date he
received the distribution or five years after the
Participant is rehired by the Employer, whichever is
earlier.
(3) If the Participant had incurred 5 consecutive 1-Year
Breaks-in-Service after his termination of Employment, the
amount of the Participant's Account that became a Forfeiture
shall remain a Forfeiture and such Participant shall be
prohibited from repaying a distribution made at his
Termination of Employment.
(b) Required Payback:
(1) If the Participant was 0% vested at his Termination of
Employment and did not incur 5 consecutive 1-Year
Breaks-in-Service after such date, the amount which became a
Forfeiture, if any, shall be
Article III - Distributions -53-
<PAGE> 62
restored by the Employer at the time such Participant
re-enrolls in the Plan.
(2) If the Participant was vested but not 100% vested at his
Termination of Employment and did not incur 5 consecutive
1-Year Breaks-in-Service after such date, the Participant
shall be required to repay the full amount of the
distribution attributable to Employer contributions, if
any, made at his Termination of Employment. Such repayment
of Employer contributions, however, must be made before the
Participant has incurred 5 consecutive 1-Year
Breaks-in-Service following the date he received the
distribution or five years after the Participant is rehired
by the Employer, whichever is earlier.
When the Participant makes such repayment, the amount which
became a Forfeiture, if any, shall be restored by the
Employer at the same time such repayment is made. However,
if the Participant does not repay the distribution made in
accordance with this Section 3D within the period of time
specified above, that Forfeiture shall remain a Forfeiture.
(3) If the Participant had incurred 5 consecutive 1-Year
Breaks-in-Service after his Termination of Employment, the
amount of the Participant's Account that became a
Forfeiture shall remain a Forfeiture and such Participant
shall be prohibited from repaying the distribution made at
his Termination of Employment.
3D.3 LIFE INSURANCE POLICY. If all or any portion of the value of any Life
Insurance Policy on the Participant's life will become a Forfeiture,
the Participant shall have the right to buy such policy from the
Trustee for the then value of such policy less the value of any
Vested Interest therein, within 30 days after written notice from the
Trustee is mailed to his last known address.
3D.4 NO FURTHER RIGHTS OR INTEREST. A Participant shall have no further
interest in or any rights to any portion of his Participant's Account
that becomes a Forfeiture due to his Termination of Employment once
the Participant incurs 5 consecutive 1-Year Breaks-in-Service in
accordance with Section 2A.4.
3D.5 FORFEITURE. Any Forfeiture arising in accordance with the provisions
of Section 3D.1 shall be treated as follows:
Any amount of Forfeitures shall be used in accordance with (a), (b),
or (c) below, in the manner set forth in Section 2C.
(a) Employer Credit. Forfeitures shall be used by the Employer to
reduce and in lieu of the Employer contribution next due under
Section 2C, or to pay Plan expenses, at the earliest opportunity
after such Forfeiture becomes available.
(b) Reallocation. Forfeitures shall be allocated in accordance with
the allocation formula of the contributions from which they
arose.
(c) Employer Credit and Reallocation of Remainder. Forfeitures shall
first be used to reduce and in lieu of the Employer contribution
next due under Section 2C, or to pay Plan expenses, at the
earliest opportunity after such Forfeiture becomes available.
Any Forfeitures remaining following use as an Employer credit
shall be allocated in accordance with the allocation formula of
the contributions from which they arose.
Article III - Distributions -54-
<PAGE> 63
Notwithstanding anything above to the contrary, if Forfeitures are
generated immediately or upon the occurrence of a 1-Year
Break-in-Service, and a former Participant returns to employment with
the Employer after Forfeitures are generated but prior to the
occurrence of 5 consecutive 1-Year Breaks-in-Service, Forfeitures, if
any, will be first be used to make whole the nonvested account of
such Participant, equal to the value of the nonvested account at the
time the Participant terminated employment with the Employer in
accordance with the applicable provisions of Section 3D.2. In the
event that the available Forfeitures are not sufficient to make whole
the nonvested account, the Employer will make an additional
contribution sufficient to make the nonvested account whole.
3D.6 LOST PARTICIPANT. If a benefit is forfeited because the Participant
or Beneficiary cannot be found, as discussed in Section 5D.7, such
benefit will be reinstated if a claim is made by the Participant or
Beneficiary.
3D.7 DEFERRAL OF DISTRIBUTION. If elected by the Employer, and as
discussed in Section 3A.1, a Participant who terminates employment
and does not consent to an immediate distribution shall have his
distribution deferred (and may be responsible for all fees and
expenses associated with maintaining his account in a deferred
status).
3E. WITHDRAWALS
3E.1 WITHDRAWAL - EMPLOYEE CONTRIBUTIONS.
(a) Required Employee Contributions. If the Employer has elected in
its Adoption Agreement to allow for a withdrawal of Required
Employee Contributions and earnings thereon, then a Participant
may elect to withdraw from his Participant's Account an amount
equal to any whole percentage (not exceeding 100%) of his entire
Vested Interest in his Participant's Account attributable to
Required Employee Contributions plus any income and minus any
loss thereon. On the date the election becomes effective, the
Participant shall be suspended from making any further
contributions to the Plan, and from having any Matching
Contributions made on his behalf for a period, as elected by the
Employer in its Adoption Agreement.
(b) Voluntary Employee Contributions. If the Employer has elected in
its Adoption Agreement to allow for the withdrawal of Voluntary
Employee Contributions and earnings thereon, then a Participant
may elect to withdraw from his Participant's Account an amount
which is equal to any whole percentage (not exceeding 100%) of
his entire Vested Interest in his Participant's Account
attributable to Voluntary Employee Contributions plus any income
and minus any loss thereon.
(c) Prior Required Employee Contributions. If the Employer has
elected in its Adoption Agreement to allow for a withdrawal of
Prior Required Employee Contributions and earnings thereon, then
a Participant may elect to withdraw from his Participant's
Account an amount equal to any whole percentage (not exceeding
100%) of his entire Vested Interest in his Participant's Account
attributable to Prior Required Employee Contributions plus any
income and minus any loss thereon.
(d) Prior Voluntary Employee Contributions. If the Employer has
elected in its Adoption Agreement to allow for withdrawal of
Prior Voluntary Employee
ARTICLE III - DISTRIBUTIONS -55-
<PAGE> 64
Contributions and earnings thereon, then a Participant may elect
to withdraw from his Participant's Account an amount which is
equal to any whole percentage (not exceeding 100%) of the entire
Vested Interest in his Participant's Account attributable to
Prior Voluntary Employee Contributions plus any income and minus
any loss thereon.
If a Participant elects a withdrawal under the provisions of this
Section, he may not elect another withdrawal under this Section for an
additional period specified by the Employer in its Adoption Agreement.
The Participant shall notify the Plan Administrator in writing of his
election to make a withdrawal under this Section. Any such election
shall be effective as of the date specified in such notice, which date
must be at least 15 days after notice is filed.
No Forfeitures will occur solely as a result of an Employee's
withdrawal of Employee Contributions.
3E.2 WITHDRAWAL - ELECTIVE DEFERRAL CONTRIBUTIONS. If the Participant has
attained age 59-1/2, and if selected by the Employer in its Adoption
Agreement, the Participant may elect to withdraw from his
Participant's Account an amount which is equal to any whole percentage
(not exceeding 100%) of his Vested Interest in his Participant's
Account attributable to his Elective Deferral Contributions and
earnings thereon.
The Participant shall notify the Plan Administrator in writing of his
election to make a withdrawal under this Section. Any such election
shall be effective as of the date specified in such notice, which date
must be at least 15 days after notice is filed.
3E.3 WITHDRAWAL - EMPLOYER CONTRIBUTIONS. If the Employer has specified in
its Adoption Agreement that withdrawals of Matching Contributions,
Nonelective Contributions, or Prior Employer Contributions, if
applicable, are permitted, a Participant, who has been a Participant
for at least 60 consecutive months, may elect to withdraw from his
Participant's Account an amount equal to a whole percentage (not to
exceed 100%) of his Vested Interest in his Participant's Account
attributable to Matching Contributions (and reallocated Forfeitures,
if applicable), Nonelective Contributions (and reallocated
Forfeitures, if applicable), or Prior Employer Contributions (and
reallocated Forfeitures, if applicable), along with earnings. On the
date the election becomes effective, the Participant may be suspended
from making Employee Contributions and Elective Deferral
Contributions, if any, and from having Employer contributions made on
his behalf for a period of time, as selected by the Employer in its
Adoption Agreement. In lieu of or in addition to the 60-months of
participation requirement, the Employer may specify in the Adoption
Agreement that withdrawal of Employer contributions, to the extent
vested, shall be available upon or following the attainment of age
59-1/2.
In the event a Participant's suspension period occurs during a year
(or years) when no Employer contributions are made, such suspension
shall be taken into account when the next Employer contribution(s) is
made.
The Participant shall notify the Plan Administrator in writing of his
election to make a withdrawal under this Section. Any such election
shall be effective as of the date specified in such notice, which date
must be at least 15 days after notice is filed.
Article III - Distributions -56-
<PAGE> 65
3E.4 WITHDRAWAL FOR SERIOUS FINANCIAL HARDSHIP OF CONTRIBUTIONS OTHER THAN
ELECTIVE DEFERRAL CONTRIBUTIONS. Except as provided in Sections 7B.1
and 7B.7(e), if the Plan is a profit sharing plan or a thrift plan,
and if the Employer has elected in its Adoption Agreement to permit
withdrawals due to the occurrence of events that constitute Serious
Financial Hardships to a Participant, such Participant may withdraw
all or a portion of his Vested Interest (excluding Elective Deferral
Contributions, Qualified Nonelective Contributions, Qualified Matching
Contributions, and earnings on these contributions). Such Serious
Financial Hardship must be shown by positive evidence submitted to the
Plan Administrator that the hardship is of sufficient magnitude to
impair the Participant's financial security. Withdrawals shall be
determined in a consistent and nondiscriminatory manner, and shall not
affect the Participant's rights under the Plan to make additional
withdrawals or to continue to be a Participant.
3E.5 WITHDRAWAL FOR SERIOUS FINANCIAL HARDSHIP OF ELECTIVE DEFERRAL
CONTRIBUTIONS. If the Employer has selected in its Adoption Agreement,
a distribution may be made on account of Serious Financial Hardship if
subparagraphs (a) and (b) of this Section are satisfied. The funds
available for withdrawal shall be the portion of a Participant's
Account attributable to Elective Deferral Contributions, including any
earnings credited to the Participant's Account as of the end of the
last Plan Year ending before July 1, 1989 ("pre-1989 earnings"), and
if applicable, Qualified Matching Contributions credited to the
Participant's Account as of the end of the last Plan Year ending
before July 1, 1989, Qualified Nonelective Contributions credited to
the Participant's Account as of the end of the last Plan Year ending
before July 1, 1989, and any pre-1989 earnings attributable to
Qualified Matching Contributions, or Qualified Nonelective
Contributions. Qualified Matching Contributions credited to the
Participant's Account after the end of the last Plan Year ending
before July 1, 1989, Qualified Nonelective Contributions credited to
the Participant's Account after the end of the last Plan Year ending
before July 1, 1989, and earnings on Elective Deferral Contributions,
Qualified Matching Contributions, and Qualified Nonelective
Contributions credited after the end of the last Plan Year ending
before July 1, 1989 shall not be eligible for withdrawal under this
Section. For purposes of this Section, a distribution may be made on
account of a hardship only if the distribution is made on account of
an immediate and heavy financial need of the Employee where such
Employee lacks other available resources.
(a) The following are the only financial needs considered immediate
and heavy for purposes of this section:
(i) Expenses for medical care described in Code section 213(d)
previously incurred by the Employee, the Employee's Spouse,
or any dependents of the Employee (as defined in Code
section 152) or necessary for these persons to obtain
medical care described in Code section 213(d);
(ii) Costs directly related to the purchase of a principal
residence for the Employee (excluding mortgage payments);
(iii) Payments necessary to prevent the eviction of the Employee
from the Employee's principal residence or foreclosure on
the mortgage on that residence; or
Article III - Distributions -57-
<PAGE> 66
(iv) Tuition payments, related educational fees and amounts
distributed for the payment of room-and-board expenses
for the next 12 months of post-secondary education for
the Employee, his or her Spouse, or any of his or her
dependants.
(b) To the extent the amount of distribution requested does not
exceed the amount required to relieve the Participant's financial
need, such distribution will be considered as necessary to
satisfy an immediate and heavy financial need of the Employee
only if:
(i) The Employee has obtained all distributions, other than
hardship distributions, and all nontaxable loans under
all plans maintained by the Employer;
(ii) All plans maintained by the Employer provide that the
Employee's Elective Deferral Contributions and if
applicable, Employee Contributions, will be suspended
for 12 months after the receipt of the hardship
distribution;
(iii) The distribution is not in excess of the amount of the
immediate and heavy financial need (including amounts
necessary to pay any federal, state, or local income
taxes or penalties reasonably anticipated to result
from the distribution); and
(iv) All plans maintained by the Employer provide that the
Employee may not make Elective Deferral Contributions
for the Employee'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 taxable year less the amount of such Employee's
Elective Deferral Contributions for the taxable year of
the hardship distribution.
3E.6 WITHDRAWAL - QVEC CONTRIBUTIONS AND ROLLOVER CONTRIBUTIONS. If
selected by the Employer in its Adoption Agreement, a Participant may
elect to withdraw from his Participant's Account as often during each
Plan Year as elected by the Employer in the Adoption Agreement, any
amount up to 100% of his entire Vested Interest in his Participant's
Account attributable to his QVEC Contributions or Rollover
Contributions along with earnings thereon.
The Participant shall notify the Plan Administrator in writing of his
election to make a withdrawal under this Section. Any such election
shall be effective as of the date specified in such notice, which date
must be at least 15 days after notice is filed.
3E.7 NOTIFICATION. The Participant shall notify the Plan Administrator in
writing of his election to make a withdrawal under Section 3E. Any
such election shall be effective as of the date specified in such
notice, which date must be at least 15 days after such notice is
filed. Payment of the withdrawal shall be subject to the terms and
conditions of Section 3A. All withdrawals made under the provisions of
Section 3E shall be subject to the spousal consent requirements of
Section 3C, as applicable.
Article III - Distributions -58-
<PAGE> 67
3E.8 VESTING CONTINUATION. In the event a partially vested Participant
takes a withdrawal of less than 100% of his Vested Interest in
accordance with Section 3E.3 or 3E.4 or 3E.5, the remaining portion
of his Participant's Account attributable to Employer contributions
shall vest according to the formula as set forth in Section 1.75.
3E.9 WITHDRAWAL - PARTICIPANT'S EMPLOYER STOCK ACCOUNT. The ability of a
Participant who is subject to the reporting requirements of section
16(a) of the Securities Exchange Act of 1934 (the "Act") to make
withdrawals or investment changed involving the Participant's
Employer Stock Account may be restricted by the Plan Administrator to
comply with the rules under section 16(b) of the Act.
3E.10 WITHDRAWAL BY TERMINATED PARTICIPANTS. Terminated Participants who
have deferred distribution of their benefit may make withdrawals from
the Plan in the same manner as selected by the Employer in its
Adoption Agreement for withdrawals preceding termination.
3F. DIRECT ROLLOVERS
3F.1 DEFINITIONS.
(a) DIRECT ROLLOVER. The term Direct Rollover means a payment by the
Plan to the Eligible Retirement Plan specified by the
Distributee.
(b) DISTRIBUTEE. The term 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
who is the Alternate Payee under a QDRO, are Distributees with
regard to the interest of the Spouse or former Spouse.
(c) ELIGIBLE RETIREMENT PLAN. The term 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 plan describing 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 an individual retirement annuity.
(d) ELIGIBLE ROLLOVER DISTRIBUTION. The term 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: any distribution that is
one of a series of substantially equal periodic payments (not
less frequently than annually) made for the life (of 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; any
distribution to the extent such distribution is required under
Code section 401(a)(9); and the portion of any distribution that
is not includable in gross income (determined without regard to
the exclusion for net unrealized appreciation with respect to
employer securities); and any other distribution(s) that is
reasonably expected to total less than $200 during a year.
3F.2 DIRECT ROLLOVERS. This Section applies to distributions made on or
after January 1, 1993. Notwithstanding any provision of the Plan to
the contrary that
Article III - Distributions -59-
<PAGE> 68
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 that is equal to at least $500 paid directly to an
Eligible Retirement Plan specified by the Distributee in a Direct
Rollover.
Article III - Distributions -60-
<PAGE> 69
ARTICLE IV - LEGAL LIMITATIONS ON CONTRIBUTIONS
4A. NONDISCRIMINATION TEST
4A.1 DEFINITIONS.
(a) ACTUAL CONTRIBUTION PERCENTAGE. The term Actual Contribution
Percentage (ACP) means the average of the Actual Contribution
Ratios of the Eligible Participants in a group.
(b) ACTUAL CONTRIBUTION RATIO. The term Actual Contribution Ratio
means the ratio (expressed as a percentage) of a Participant's
Contribution Percentage Amounts to that Participant's
Compensation for the Plan Year (whether or not the Employee was a
Participant for the entire Plan Year).
(c) ACTUAL DEFERRAL PERCENTAGE. The term Actual Deferral Percentage
(ADP) means the average of the Actual Deferral Ratios for a
specified group of Participants.
(d) ACTUAL DEFERRAL RATIO. The term Actual Deferral Ratio means the
ratio (expressed as a percentage) of a Participant's Deferral
Percentage Amounts to that Participant's Compensation for such
Plan Year. The Actual Deferral Ratio for an Employee who is
eligible to be a Participant but fails to make Elective Deferral
Contributions shall be zero.
(e) AGGREGATE LIMIT. The term Aggregate Limit means the sum of : (i)
125 percent of the greater of the ADP of the non-Highly
Compensated Employees for the Plan Year or the ACP of non-Highly
Compensated Employees under the plan subject to Code section
401(m) for the Plan Year beginning with or within the Plan Year
of the CODA and (ii) the lesser of 200% or two plus the lesser of
such ADP or ACP. "Lesser" is substituted for "greater" in "(i)",
above, and "greater" is substituted for "lesser" after "two plus
the" in "(ii)" if it would result in a larger Aggregate Limit.
(f) CONTRIBUTION PERCENTAGE AMOUNTS. The term Contribution Percentage
Amounts means the sum of the Employee Contributions, Matching
Contributions, Qualified Matching Contributions (to the extent
not taken into account for purposes of the ADP test) and
Qualified Nonelective Contributions (to the extent not taken into
account for purposes of the ADP test) made under the Plan on
behalf of the Participant for the Plan Year. Such Contribution
Percentage Amounts shall not include Matching Contributions that
are forfeited either to correct Excess Aggregate Contributions or
because the contributions to which they relate are Excess
Elective Deferral Contributions, Excess Contributions, or Excess
Aggregate Contributions. The Employer may elect to use Elective
Deferrals in the Contribution Percentage Amounts as long as the
ADP test (as described in Section 4A.2) is met before the
Elective Deferrals are used in the ACP test (as described in
Section 4A.4) and the ADP test continues to be met following the
exclusion of those Elective Deferrals that are used to meet the
ACP test.
(g) DEFERRAL PERCENTAGE AMOUNTS. The term Deferral Percentage
Amounts means any Elective Deferral Contributions made pursuant
to the Participant's deferral election, including Excess Elective
Deferral Contributions of Highly Compensated Employees, but
excluding Elective Deferral Contributions that are taken into
account in the ACP test
Article IV - Legal Limitations -61-
<PAGE> 70
(provided the ADP test is satisfied both with and without exclusion of
these Elective Deferral Contributions). In addition, the Employer may
choose to make Qualified Nonelective Contributions and Qualified
Matching Contributions.
(h) ELIGIBLE PARTICIPANT. The term Eligible Participant means any Employee
who is eligible to make an Employee Contribution or Elective Deferral
Contribution (if the Employer takes such contributions into account in
the calculation of the Actual Contribution Ratio), or to receive a
Matching Contribution (including Forfeitures) or a Qualified Matching
Contribution. If an Employee Contribution is required as a condition
of participation in the Plan, any Employee who would be a Participant
in the Plan if such Employee made the Required Employee Contribution
shall be treated as an Eligible Participant on behalf of whom no
Employee Contributions are made.
If the Employer has elected in its Adoption Agreement to provide for
Elective Deferral Contributions, then Sections 4A.2 through 4A.5 shall
apply.
4A.2 ACTUAL DEFERRAL PERCENTAGE TEST. The ADP for Participants who are
Highly Compensated Employees for each Plan Year and the ADP for
Participants who are non-Highly Compensated Employees for the same
Plan Year must satisfy one of the following tests:
(a) The ADP for Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the ADP for Participants who are
non-Highly Compensated Employees for the same Plan Year
multiplied by 1.25; or
(b) The ADP for Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the ADP for Participants who are
non-Highly Compensated Employees for the same Plan Year
multiplied by 2.0, provided that the ADP for Participants who are
Highly Compensated Employees does not exceed the ADP for
Participants who are non-Highly Compensated Employees by more
than two (2) percentage points.
4A.3 SPECIAL RULES - ADP TEST.
(a) The ADP for any 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 treated as Elective
Deferrals for purposes of the ADP test) allocated to his accounts
under two or more CODAs maintained by the Employer, shall be
determined as if such Elective Deferral Contributions (and, if
applicable, such Qualified Nonelective Contributions or Qualified
Matching Contributions, or both) were made under a single CODA.
If a Highly Compensated Employee participates in two or more
CODAs that have different Plan Years, such CODAs are treated as a
single CODA with respect to the Plan Years ending with or within
the same calendar year. Notwithstanding the foregoing, certain
plans shall be treated as separate if mandatorily disaggregated
under regulations under Code section 401(k).
(b) If 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
Article IV - Legal Limitations -62-
<PAGE> 71
aggregated with this Plan, then this Section shall be applied by
determining the ADP of Employees as if all such plans were a
single plan. For Plan Years beginning after December 31, 1989,
plans may be aggregated in order to satisfy Code section 401(k)
only if they have the same Plan Year.
(c) If a Highly Compensated Employee is subject to the family
aggregation rules of section 414(q)(6) because that Participant
is either a 5-percent owner or one of the top 10 Highly
Compensated Employees, the combined Actual Deferral Ratio for the
family group (which is treated as one Highly Compensated
Employee) must be determined by combining the Elective Deferral
Contributions (and Qualified Nonelective Contributions or
Qualified Matching Contributions, or both, if treated as Elective
Deferral Contributions for purposes of the ADP test), and the
Compensation for the Plan Year of all the family members (as
defined in section 414(q)(6)). Such family members shall be
disregarded as separate Employees in determining the ADP for both
Highly Compensated Employees and non-Highly Compensated
Employees.
(d) For purposes of determining the ADP test, 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 such
contributions relate.
(e) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ADP test and the amount of Qualified
Nonelective Contributions or Qualified Matching Contributions, or
both, used in such test.
(f) The determination and treatment of the Deferral Percentage
Amounts of any Participant shall satisfy such other requirements
as may be prescribed by the Secretary of the Treasury.
(g) If the Employer determines before the end of the Plan Year that
the Plan may not satisfy the ADP test for the Plan Year, the
Employer may require that the amounts of Elective Deferral
Contributions being allocated to the accounts of Highly
Compensated Employees be reduced to the extent necessary to
prevent Excess Contributions from being made to the Plan.
Although the Employer may reduce the amounts of Elective Deferral
Contributions that may be allocated to the Participant's Accounts
of Highly Compensated Employees, the affected Employees shall
continue to participate in the Plan. When the situation that
resulted in the reduction of Elective Deferral Contributions
ceases to exist, the Employer shall reinstate the amounts of
Elective Deferral Contributions elected by the affected
Participants in their Salary Deferral Agreement to the fullest
extent possible.
If the employer has elected in its Adoption Agreement, to provide for
employee contributions and/or matching contributions required to be tested
under code Section 401(m), then Sections 4a.4 and 4a.5 shall apply.
4A.4 ACTUAL CONTRIBUTION PERCENTAGE TEST. The ACP for Participants who are
Highly Compensated Employees for each Plan year and the ACP for
Participants who are non-Highly Compensated Employees for the same
Plan Year must satisfy one of the following tests:
Article IV - Legal Limitations -63-
<PAGE> 72
(a) The ACP for Participants who are Highly Compensated Employees
for the Plan Year shall not exceed the ACP for Participants who
are non-Highly Compensated Employees for the same Plan Year
multiplied by 1.25; or
(b) The ACP for Participants who are Highly Compensated Employees
for the Plan Year shall not exceed the ACP for Participants who
are non-Highly Compensated Employees for the same Plan Year
multiplied by two (2), provided that the ACP for Participants
who are Highly Compensated Employees does not exceed the ACP for
Participants who are non-Highly Compensated Employees by more
than two (2) percentage points.
4A.5 SPECIAL RULES - ADP/ACP TESTS.
(a) Multiple Use: If one or more Highly Compensated Employees
participates in both a CODA and a plan subject to the ACP test
maintained by the Employer, and the sum of the ADP and ACP of
those Highly Compensated Employees subject to either or both
tests exceeds the Aggregate Limit, then the ACP of those Highly
Compensated Employees who also participate in a CODA will be
reduced (beginning with such Highly Compensated Employee whose
Actual Contribution Ratio is the highest) so that the limit is
not exceeded. The amount by which each Highly Compensated
Employee's Contribution Percentage Amounts are reduced shall be
treated as an Excess Aggregate Contribution. The ADP and ACP of
the Highly Compensated Employees are determined after any
corrections required to meet the ADP and ACP tests. Multiple use
does not occur if both the ADP and ACP of the Highly Compensated
Employees does not exceed 1.25 multiplied by the ADP and ACP of
the non-Highly Compensated Employees.
(b) For purposes of this Section, the Actual Contribution Ratio for
any Participant who is a Highly Compensated Employee 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 CODAs that are maintained by the Employer, shall be
determined as if the total of such Contribution Percentage
Amounts was made under each plan. If a Highly Compensated
Employee participates in two or more CODAs that have different
Plan Years, all CODAs ending with or within the same calendar
year are treated as a single CODA. Notwithstanding the
foregoing, certain plans shall be treated as separate if
mandatorily disaggregated under regulations under Code section
401(m).
(c) If 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
such sections of the Code only if aggregated with this Plan,
then this Section shall be applied by determining the Actual
Contribution Ratio of Employees as if all such plans were a
single plan. For Plan Years beginning after December 31, 1989,
plans may be aggregated in order to satisfy Code section 401(m)
only if they have the same Plan Year.
(d) For purposes of determining the Actual Contribution Ratio of a
Participant who is a 5-percent owner of one of the Top 10 Highly
Compensated Employees, the Contribution Percentage Amounts and
Compensation for such Participant shall include the Contribution
Percentage Amounts and Compensation for the Plan Year of family
members (as defined in Code
Article IV - Legal Limitations -64-
<PAGE> 73
section 414(q)(6)). Such family members shall be disregarded as
separate Employees in determining the ACP for Highly Compensated
Employees and non-Highly Compensated Employees.
(e) For purposes of determining the ACP test, Employee Contributions
are considered to have been made in the Plan Year in which
contributed to the Plan. Qualified Matching Contributions and
Qualified Nonelective Contributions are 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.
(f) the Employer shall maintain records sufficient to demonstrate
satisfaction of the ACP test and the amount of Qualified
Nonelective Contributions or Qualified Matching Contributions, or
both, used in such test.
(g) The determination and treatment of the Contribution Percentage
Amounts of any Participant shall satisfy such other requirements
as may be prescribed by the Secretary of the Treasury.
4B. LIMITATIONS ON ALLOCATIONS
4B.1 DEFINITIONS. The following definitions apply for purpose of Section
4B.
(a) ANNUAL ADDITIONS. The term Annual Additions means the sum of the
following amounts credited to a Participant's Account for the
Limitation Year:
(1) All contributions made by the Employer which shall include:
Elective Deferral Contributions;
Money Purchase Pension Contributions
Matching Contributions;
Nonelective Contributions;
Qualified Nonelective Contributions;
Qualified Matching Contributions;
Prior Employer Contributions;
(2) Employee Contributions;
(3) Forfeitures; and
(4) Amounts allocated after March 31, 1984 to an individual
medical account, as defined in Code section 415(1)(2), which
is part of a pension or annuity plan maintained by the
Employer, are treated as Annual Additions to a defined
contribution plan. Also, amounts derived from contributions
paid or accrued after December 31, 1985 in taxable years
ending after such date, which are attributable to
post-retirement medical benefits allocated to the separate
account of 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, are treated as
Annual Additions to a defined contribution plan; and
(5) Allocations under a simplified employee pension plan.
For this purpose, any Excess Annual Additions applied under
Sections 4C.3 or 4B.5(f) in the Limitation Year to reduce
Employer contributions will be considered Annual Additions for
such Limitation Year.
Article IV - Legal Limitations -65-
<PAGE> 74
(b) COMPENSATION. As elected by the Employer in the Adoption
Agreement, the term Compensation means all of a Participant's:
(1) WAGES, TIPS, AND OTHER COMPENSATION BOX ON FORM W-2.
(Information required to be reported under Code sections
6041, 6051 and 6052). Wages within the meaning of Code
section 3401(a) and all other payments of compensation to
an Employee by the Employer (in the course of the
Employer's trade or business) for which the Employer is
required to furnish the Employee a written statement under
Code sections 6041(d), 6051(a)(3), and 6052. Compensation
must be determined without regard to any rules under Code
section 3401(a) that limit the remuneration included in
wages based on the nature or location of the employment or
the services performed (such as the exception for
agricultural labor in Code section 3401(a)(2)).
(2) SECTION 3401(a) WAGES. Wages as defined in Code section
3401(a) for the purposes of income tax withholding at the
source but determined without regard to any rules that limit
the remuneration included in wages based on the nature or
location of the employment or the services performed (such
as the exception for agricultural labor in Code section
3401(a)(2)).
(3) 415 SAFE-HARBOR COMPENSATION. Wages, salaries, and fees for
professional services and other amounts received (without
regard to whether or not an amount is paid in cash) for
personal services actually rendered in the course of
employment with the Employer maintaining the Plan to the
extent that the amounts are includable in gross income
(including, but not limited to, commissions paid salesmen,
compensation for services on the basis of a percentage of
profits, commissions on insurance premiums, tips, bonuses,
fringe benefits, and reimbursements or other expense
allowances under a nonaccountable plan as described in Code
section 1.62-2(c)), and excluding the following:
(A) Employer contributions to a plan of deferred
compensation which are not includable in the
Employee's gross income for the taxable year in which
contributed, or Employer contributions under a
simplified employee pension plan to the extent such
contributions are deductible by the Employee, or any
distributions from a plan of deferred compensation;
(B) Amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property)
held by the Employee either becomes freely
transferable or is no longer subject to a substantial
risk of forfeiture;
(C) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
(D) Other amounts which received special tax benefits, or
contributions made by the Employer (whether or not
under a salary reduction agreement) towards the
purchase of an
Article IV - Legal Limitations -66-
<PAGE> 75
annuity contract described in Code section 403(b) (whether
or not the contributions are actually excludable from the
gross income of the Employee).
For any Self-Employed Individual, Compensation means Earned
Income.
For Limitation Years beginning after December 31, 1991, for
purposes of applying the limitations of this Section 4B,
Compensation for a Limitation Year is the Compensation actually
paid or includable in gross income during such Limitation Year.
Notwithstanding the preceding sentence, Compensation for a
Participant in a defined contribution plan who is permanently and
totally disabled (as defined in Code section 22(e)(3)) is the
Compensation such Participant would have received for the
Limitation Year if the Participant had been paid at the rate of
Compensation paid immediately before becoming permanently and
totally disabled; such imputed Compensation for the disabled
Participant may be taken into account only if the Participant is
not a Highly Compensated Employee and contributions made on
behalf of such Participant are not nonforfeitable when made.
(c) DEFINED BENEFIT FRACTION. The term Defined Benefit Fraction
means a fraction, the numerator of which is the sum of the
Participant's Projected Annual Benefits under all the defined
benefit plans (whether or not terminated) maintained by the
Employer, and the denominator of which is the lesser of 125
percent of the dollar limitation determined for the Limitation
Year under Code sections 415(b) and (d), or 140 percent of the
Highest Average Compensation including any adjustments under
Code section 415(b).
Notwithstanding the above, if the Participant was a Participant
as of the first day of the Limitation Year beginning after
December 31, 1986 in one or more defined benefit plans maintained
by the Employer which were in existence on May 6, 1986, the
denominator of this fraction will not be less than 125 percent of
the sum of the annual benefits under such plans which the
Participant had accrued as of the later of the close of the last
Limitation Year beginning before January 1, 1987, disregarding
any changes in the terms and conditions of the Plan after May 5,
1986. The preceding sentence applies only if the defined benefit
plans individually and in the aggregate satisfied the
requirements of Code section 415 for all Limitation Years
beginning before January 1, 1987.
Notwithstanding the foregoing, for any Top-Heavy Plan Year, 100
shall be substituted for 125 unless the extra minimum allocation
is being made pursuant to the Employer's election in the Adoption
Agreement. However, for any Plan Year in which this Plan is a
Super Top-Heavy Plan, 100 shall be substituted for 125 in any
event.
(d) DEFINED CONTRIBUTION DOLLAR LIMITATION. The term Defined
Contribution Dollar Limitation means $30,000 or if greater,
one-fourth of the defined benefit dollar limitation set forth in
Code section 415(b)(1) as in effect for the Limitation Year.
Article IV - Legal Limitations -67-
<PAGE> 76
(e) DEFINED CONTRIBUTION FRACTION. The term Defined Contribution
Fraction means a fraction, the numerator of which is the sum of
the Annual Additions to the Participant's accounts under all the
defined contribution plans (whether or not terminated) maintained
by the Employer for the current and all prior Limitation Years
(including the Annual Additions attributable to the Participant's
nondeductible employee contributions to all defined benefit
plans, whether or not terminated, maintained by the Employer,
and the Annual Additions attributable to all maintained by the
Employer, and the Annual Additions attributable to all welfare
benefit funds, as defined in Code section 419(e), individual
medical accounts, as defined in Code section 415(1)(2), and
simplified employee pension plans, as defined in Code section
408(k), maintained by the Employer), and the denominator of which
is the sum of the maximum aggregate amounts for the current and
all prior Limitation Years of service with the Employer
(regardless of whether a defined contribution plan was maintained
by the Employer). The maximum aggregate amount in any Limitation
Year is the lesser of 125 percent of the dollar limitation
determined under Code sections 415(b) and (d) in effect under
Code section 415(c)(1)(A) or 35 percent of the Participant's
Compensation for such year.
If the Employee was a Participant as of the end of the first day
of the first Limitation Year beginning after December 31, 1986,
in one or more defined contribution plans maintained by the
Employer which were in existence on May 6, 1986, the numerator of
this fraction will be adjusted if the sum of this fraction and
the Defined Benefit Fraction would otherwise exceed 1.0 under the
terms of this Plan. Under the adjustment, an amount equal to the
product of (1) the excess of the sum of the fractions over 1.0
times (2) the denominator of this fraction, will be permanently
subtracted from the numerator of this fraction. The adjustment is
calculated using the fractions as they would be computed as of
the end of the last Limitation Year beginning before January 1,
1987, and disregarding any changes in the terms and conditions of
the Plan made after May 5, 1986, but using the section 415
limitation applicable to the first Limitation Year beginning on
or after January 1, 1987.
Notwithstanding the foregoing, for any Top-Heavy Plan Year, 100
shall be substituted for 125 unless the extra minimum allocation
is being made pursuant to the Employer's election in the Adoption
Agreement. However, for any Plan Year in which this Plan is a
Super Top-Heavy Plan, 100 shall be substituted for 125 in any
event.
The Annual Additions for any Limitation Year beginning before
January 1, 1987 shall not be computed to treat all Employee
Contributions as Annual Additions.
(f) EMPLOYER. For purposes of this Section 4B, the term Employer
means the Employer that adopts this Plan, and all members of a
controlled group of corporations (as defined in Code section
414(b) as modified by section 415(h)), a group of commonly
controlled trades or businesses (as defined in Code section
414(c) as modified by section 415(h)) or affiliated service
groups (as defined in Code section 414(m)) of which the adopting
Employer is a part and any other entity required to be aggregated
with the Employer pursuant to regulations under Code section
414(o).
Article IV - Legal Limitations -68-
<PAGE> 77
(g) HIGHEST AVERAGE COMPENSATION. The term Highest Average
Compensation means the average Compensation for the three
consecutive Years of Service with the Employer that produces the
highest average. A Year of Service with the Employer is the
12-consecutive month period defined in Section 2A.5.
(h) LIMITATION YEAR. The term Limitation Year means a calendar year,
or the 12-consecutive month period elected by the Employer in the
Limitation Year section of the Adoption Agreement. All qualified
plans maintained by the Employer must use the same Limitation
Year. If the Limitation Year is amended to a different
12-consecutive month period, the new Limitation Year must begin
on a date within the Limitation Year in which the amendment is
made.
(i) MASTER OR PROTOTYPE PLAN. The term Master or Prototype Plan
means a plan the form of which is subject of a favorable opinion
letter from the national office of the Internal Revenue Service.
(j) MAXIMUM PERMISSIBLE AMOUNT. The term Maximum Permissible Amount
means the maximum Annual Additions that may be contributed or
allocated to a Participant's Account under the Plan for any
Limitation Year, which shall not exceed the lesser of:
(1) The Defined Contribution Dollar Limitation, or
(2) 25 percent of the Participant's Compensation for the
Limitation Year.
The Compensation limitation referred to in (2) above, shall not
apply to any contribution for medical benefits (within the
meaning of Code section 401(h) or 419(A)(f)(2)) which is
otherwise treated as Annual Additions under Code sections
415(l)(1) or 419A(d)(2).
If a short Limitation Year is created because of an amendment
changing the Limitation Year to a different 12-consecutive month
period, the Maximum Permissible Amount will not exceed the
Defined Contribution Dollar Limitation multiplied by the
following fraction:
Number of months in the short Limitation Year
---------------------------------------------
12
(k) PROJECTED ANNUAL BENEFIT. The term Projected Annual Benefit
means the annual retirement benefit (adjusted to an actuarially
equivalent Straight Life Annuity if such benefit is expressed in
a form other than a Straight Life Annuity or Qualified Joint and
Survivor Annuity) to which the Participant would be entitled
under the terms of the Plan assuming:
(1) The Participant will continue employment until Normal
Retirement Age under the Plan (or current age, if later);
and
(2) The Participant's Compensation for the current Limitation
Year and all other relevant factors used to determine
benefits under the Plan will remain constant for all future
Limitation Years.
4B.2 BASIC LIMITATION. If the Participant does not participate in, and has
never participated in another qualified plan or welfare benefit fund
maintained by the Employer, as defined in Code section 419(e), or an
individual medical account, as defined in Code section 415(l)(2),
maintained by the Employer, or a simplified
ARTICLE IV - Legal Limitations -69-
<PAGE> 78
employee pension, as defined in Code section 408(k), maintained by
the Employer, which provides Annual Additions as defined in Section
4B.1(a), the amount of Annual Additions which may be credited to the
Participant's Account for any Limitation Year will not exceed the
lesser of the Maximum Permissible Amount or any other limitation
contained in this Plan. If the Employer contributions that would
otherwise be contributed or allocated to the Participant's Account
would cause the Annual Additions for the Limitation Year to exceed
the Maximum Permissible Amount, the amount contributed or allocated
will be reduced so that the Annual Additions for the Limitation Year
will equal the Maximum Permissible Amount.
4B.3 ESTIMATED MAXIMUM PERMISSIBLE AMOUNT. Prior to determining the
Participant's actual Compensation for the Limitation Year, the
Employer may determine the Maximum Permissible Amount for a
Participant on the basis of a reasonable estimation of the
Participant's Compensation for the Limitation Year, uniformly
determined for all Participants similarly situated.
4B.4 ACTUAL MAXIMUM PERMISSIBLE AMOUNT. As soon as administratively
feasible after the end of the Limitation Year, the Maximum
Permissible Amount for the Limitation Year will be determined on the
basis of the Participant's actual Compensation for the Limitation
Year.
4B.5 PARTICIPANTS COVERED BY ANOTHER PROTOTYPE DEFINED CONTRIBUTION PLAN.
(a) This Section applies if, in addition to this Plan, the
Participant is covered under another qualified Master or
Prototype defined contribution Plan maintained by the Employer,
or a welfare benefit fund, as defined in Code section 419(e),
maintained by the Employer, or an individual medical account as
defined in Code section 415(1)(2), maintained by the Employer,
or a simplified employee pension plan, as defined in Code
section 408(k), that provides Annual Additions as defined in
Section 4B.1(a), during any Limitation Year. The Annual
Additions which may be credited to a Participant's Account under
this Plan for any such Limitation Year will not exceed the
Maximum Permissible Amount reduced by the Annual Additions
credited to a Participant's account under the other qualified
Master and Prototype defined contribution Plans, welfare benefit
funds, individual medical accounts, and simplified employee
pension plans for the same Limitation Year. If the Annual
Additions with respect to the Participant under other qualified
Master and Prototype defined contribution Plans, welfare benefit
funds, individual medical accounts, and simplified employee
pension plans maintained by the Employer are less than the
Maximum Permissible Amount and the Employer contributions that
would otherwise be contributed or allocated to the Participant's
Account under this Plan would cause the Annual Additions for the
Limitation Year to exceed this limitation, the amount
contributed or allocated will be reduced so that the Annual
Additions under all such plans and funds for the Limitation Year
will equal the Maximum Permissible Amount. If the Annual
Additions with respect to the Participant under such other
qualified master and prototype defined contribution plans,
welfare benefit funds, individual medical accounts, and
simplified employee pension plans, in the aggregate are equal to
or greater than the Maximum Permissible Amount, no amount will
be contributed or allocated to the Participant's Account under
this Plan for the Limitation Year.
Article IV - Legal Limitations -70-
<PAGE> 79
(b) Prior to determining the Participant's actual Compensation for
the Limitation Year, the Employer may determine the estimated
Maximum Permissible Amount for a Participant in the manner
described in Section 4B.3.
(c) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the
Limitation Year will be determined on the basis of the
Participant's actual Compensation for the Limitation Year.
(d) If, pursuant to Section 4B.5(c), or as a result of the
allocation of Forfeitures, a Participant's Annual Additions
under this Plan and other such plans would result in Excess
Annual Additions as defined in Section 4C.1(b) for a Limitation
Year, the Excess Annual Additions will be deemed to consist of
the Annual Additions last allocated, except that Annual Additions
attributable to a simplified employee pension plan will be
deemed to have been allocated first, followed by Annual Additions
to a welfare benefit fund or individual medical account,
regardless of the actual allocation date.
(e) If Excess Annual Additions were allocated to a Participant on an
allocation date of this Plan which coincides with an allocation
date of another plan, the Excess Annual Additions attributed to
this Plan will be the product of:
(1) The total Excess Annual Additions allocated as of such date
multiplied by
(2) The ratio of (i) the Annual Additions allocated to the
Participant for the Limitation Year as of such date under
this Plan to (ii) the total Annual Additions allocated to
the Participant for the Limitation Year as of such date
under this and all other qualified Master or Prototype
defined contribution Plans.
(f) Any Excess Annual Additions attributed to this Plan will be
disposed of in the manner described in Section 4C.3.
4B.6 PARTICIPANTS COVERED BY NON-PROTOTYPE DEFINED CONTRIBUTION PLAN. If
the Participant is covered under another qualified defined
contribution plan maintained by the Employer which is not a Master or
Prototype Plan, Annual Additions which may be credited to the
Participant's Account under this Plan for any Limitation Year will be
limited in accordance with Section 4B.5 as though the other plan were
a Master or Prototype Plan, unless the Employer provides other
limitations in the Limitations on Allocations section of the Adoption
Agreement.
4B.7 PARTICIPANTS COVERED BY DEFINED BENEFIT PLAN. If the Employer
maintains, or at any time maintained, a qualified defined benefit plan
covering any Participant in this Plan, the sum of the Participant's
Defined Benefit Plan Fraction and Defined Contribution Plan Fraction
will not exceed 1.0 in any Limitation Year. The Annual Additions
which may be credited to the Participant's Account under this Plan
for any Limitation Year will be limited in accordance with the
Limitations on Allocations section of the Adoption Agreement.
Article IV - Legal Limitations -71-
<PAGE> 80
4C. TREATMENT OF EXCESSES
4C.1 DEFINITIONS.
(a) EXCESS AGGREGATE CONTRIBUTIONS. The term Excess Aggregate
Contributions means, with respect to any Plan Year, the excess
of:
(1) The aggregate Contribution Percentage Amounts taken into
account in computing the ACP of Highly Compensated Employees
for such Plan Year, over
(2) The maximum Contribution Percentage Amounts permitted by the
ACP test (determined by reducing the Contribution Percentage
Amounts made on behalf of Highly Compensated Employees in
order of their Actual Contribution Ratios beginning with the
highest of such ratios). Such determination shall be made
after first determining Excess Elective Deferral
Contributions, pursuant to Section 4C.2(a) and then
determining Excess Contributions pursuant to Section 4C.4.
(b) EXCESS ANNUAL ADDITIONS. The term Excess Annual Additions means
the excess of the Participant's Annual Additions for the
Limitation Year over the Maximum Permissible Amount.
(c) EXCESS CONTRIBUTIONS. The term Excess Contributions means, with
respect to any Plan Year, the excess of:
(1) The aggregate Deferral Percentage Amounts taken into account
in computing the ADP of Highly Compensated Employees for
such Plan Year, over
(2) The maximum Deferral Percentage Amounts permitted by the ADP
test (determined by reducing the Deferral Percentage Amounts
made on behalf of Highly Compensated Employees in order of
their Actual Deferral Ratios, beginning with the highest of
such ratios).
(d) EXCESS ELECTIVE DEFERRAL CONTRIBUTIONS. The term Excess Elective
Deferral Contributions means those Elective Deferral
Contributions that are includable 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
Deferral Contributions shall be treated as Annual Additions under
the Plan pursuant to Section 4B, unless such amounts are
distributed in accordance with the provisions of Section 4C.2(a),
below.
4C.2 EXCESS ELECTIVE DEFERRAL CONTRIBUTIONS.
(a) In the event that Elective Deferral Contributions made during a
calendar year exceed the limit specified in Section 2C.1(j)(4),
then the Excess Elective Deferral Contributions, plus any income
and minus any loss allocable thereto, shall be distributed to the
Participant by the April 15 following the calendar year in which
such amount was contributed, provided that the Participant
notifies the Plan Administrator no later than 30 days in advance
of his intent to withdraw such Excess Elective Deferral
Contributions, or is deemed to notify the Plan Administrator. A
Participant is deemed to notify the Plan Administrator of any
Excess Elective Deferral Contributions that arise by taking into
account only
Article IV - Legal Limitations -72-
<PAGE> 81
those Elective Deferrals made to this Plan and any other plans of
this Employer. The spousal consent provisions of Section 3C shall
not apply to any distribution of Excess Elective Deferral
Contributions.
(b) Excess Elective Deferral Contributions shall be adjusted for any
income or loss for the Employee's tax year. The income or loss
allocable to excess Elective Deferral Contributions is an amount
determined by multiplying the sum of the income or loss allocable
to the Participant's Elective Deferral Contribution account for
the taxable year by a fraction, the numerator of which is such
Participant's Excess Elective Deferral Contributions for the
taxable year, and the denominator of which is equal to the sum of
the Participant's Account balance attributable to Elective
Deferral Contributions as of the beginning of the taxable year
plus the Participant's Elective Deferral Contributions for the
taxable year. Income for the gap period (the period from the end
of the taxable year to the date of distribution) shall not be
allocated to Excess Elective Deferral Contributions.
(c) Matching Contributions, as defined in Section 1.35, that are
attributable to Excess Elective Deferral Contributions shall be
forfeited, and as such, shall be applied to reduce Employer
contributions or pay Plan expense.
4C.3 EXCESS ANNUAL ADDITIONS. If, pursuant to Section 4B.4 or as a result
of the allocation of Forfeitures, there are Excess Annual Additions,
the excess will be disposed of using any of the following methods:
(a) Employee Contributions or Elective Deferral Contributions or
both, to the extent they would reduce the Excess Annual
Additions, will be returned to the Participant. The Contributions
returned in accordance with the preceding shall include any gains
or losses attributable to such Contributions.
Employee Contributions so returned will be disregarded with
respect to the ACP test. Elective Deferral Contributions so
returned will be disregarded with respect to the Elective
Deferral limitation described in Section 2C.1(j)(4) of the Plan
and the ADP test.
(b) If, after the application of paragraph (a), Excess Annual
Additions still exist and the Participant is covered by the Plan
at the end of the Limitation Year, the Excess Annual Additions in
the Participant's Account, other than Employee Contributions and
Elective Deferral Contributions, will be used to reduce Employer
contributions (including any allocation of Forfeitures) for such
Participant in the next Limitation Year, and each succeeding
Limitation Year, if necessary.
(c) If, after the application of paragraph (a), Excess Annual
Additions still exist and the Participant is not covered by the
Plan at the end of a Limitation Year, the Excess Annual Additions
will be held unallocated in a suspense account. The suspense
account will be applied to reduce future Employer contributions
(including allocation of any Forfeiture) for all remaining
Participants in the next Limitation Year, and each succeeding
Limitation Year if necessary.
(d) If a suspense account is in existence at any time during the
Limitation Year pursuant to this Section, it will not participate
in the allocation of the Trust or Insurance Company's gains and
losses. If a suspense account is in
Article IV - Legal Limitations -73-
<PAGE> 82
existence at any time during a particular Limitation Year, all
amounts in the suspense account must be allocated and reallocated
to the Participants' Account before any Employer or Employee
Contributions may be made to the Plan for that Limitation Year.
Except as provided in Section 4C.3(a), Excess Annual Additions
may not be distributed to Participants or former Participants.
4C.4 EXCESS CONTRIBUTIONS.
(a) Notwithstanding any other provision of this Plan, Excess
Contributions, plus any income and minus any loss allocable
thereto, shall be distributed no later than the last day of each
Plan Year to Participants to whose Participants' 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 percent excise tax will be imposed on the Employer
maintaining the Plan with respect to such amounts.
Such distributions shall be made to Highly Compensated Employees
on the basis of the respective portions of the Excess
Contributions attributable to each of such Employees.
The distribution of Excess Contributions made to the family
members of a family group that was combined for purposes of
determining a Highly Compensated Employee's Actual Deferral Ratio
shall be allocated among the family members in proportion to the
Deferral Percentage Amounts (including any amounts required to be
taken into account under Sections 4A.3(a) and (b) of the Plan) of
each family member that is combined to determine the Actual
Deferral Ratio.
(b) Excess Contributions shall be treated as Annual Additions, as
defined in Section 4B.1, under the Plan in the Limitation Year in
which they arose.
(c) Excess Contributions shall be adjusted for any income or loss for
the Plan Year. The income or loss allocable to Excess
Contributions is an amount determined by multiplying the sum of
the income or loss allocable to the Participant's Account for
Deferral Percentage Amounts for the Plan Year, by a fraction, the
numerator of which is such Participant's Excess Contributions for
the Plan Year and the denominator of which is equal to the sum of
the Participant's Account balance attributable to Deferral
Percentage Amounts as of the beginning of the Plan Year plus the
Participant's Deferral Percentage Amounts for the Plan Year.
Income for the gap period (the period from the end of the Plan
Year to the date of distribution) shall not be allocated to
Excess Contributions.
(d) Excess Contributions shall be distributed from the Participant's
Account for Elective Contributions and Qualified Matching
Contributions (if applicable) in proportion to the Participant's
Elective Deferral Contributions and Qualified Matching
Contributions (to the extent used in the ADP test) for the Plan
Year. Excess Contributions shall be distributed from the
Participant's Qualified Nonelective Contribution Account only to
the extent that such Excess Contributions exceed the balance in
the Participant's Account for Elective Contributions and
Qualified Matching Contributions.
Article IV - Legal Limitations -74-
<PAGE> 83
(e) Matching Contributions, as defined in Section 1.35, that are
attributable to Excess Contributions, shall be forfeited, and as
such, shall be applied to reduce Employer contributions or pay
Plan expenses.
4C.5 EXCESS AGGREGATE CONTRIBUTIONS.
(a) Notwithstanding any other provision of this Plan, Excess
Aggregate Contributions, plus any income and minus any loss
allocable thereto, shall be forfeited, if forfeitable, or if not
forfeitable, distributed no later than the last day of each Plan
Year to Participants to whose Participants' 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 percent excise tax will be
imposed on the Employer maintaining the Plan with respect to
those amounts.
The distribution of Excess Aggregate Contributions made to the
family members of a family group that was combined for purposes
of determining a Highly Compensated Employee's Actual
Contribution Ratio shall be allocated among the family members
in proportion to the Contribution Percentage Amounts (including
any amounts required to be taken into account under Sections
4A.5(a) and (b) of the Plan) of each family member that is
combined to determine the Actual Contribution Ratio.
(b) Excess Aggregate Contributions shall be treated as Annual
Additions, as defined in Section 4B.1, in the Limitation Year in
which they arose.
(c) Excess Aggregate Contributions shall be adjusted for any income
or loss for the Plan Year. The income or loss allocable to Excess
Aggregate Contributions is an amount determined by multiplying
the sum of the income or loss allocable to the Participant's
Account for Contribution Percentage Amounts for the Plan Year by
a fraction, the numerator of which is such Participant's Excess
Aggregate Contributions for the Plan Year, and the denominator of
which is equal to the sum of the Participant's Account balance
attributable to Contribution Percentage Amounts as of the
beginning of the Plan Year plus the Participant's Contribution
Percentage Amounts for the Plan Year. Income for the gap period
(the period from the end of the Plan Year to the date of
distribution) shall not be allocated to Excess Aggregate
Contributions.
(d) Excess Aggregate Contributions shall be forfeited, if
forfeitable, or distributed on a pro-rata basis from the
Participant's Account for Employee Contributions, Matching
Contributions, and Qualified Matching Contributions (and, if
applicable, the Participant's Qualified Nonelective Contributions
or Elective Deferral Contributions, or both).
(e) Forfeitures of Excess Aggregate Contributions shall be applied to
reduce Employer contributions or pay Plan expenses.
(f) Matching Contributions as defined in Section 1.35 that are
attributable to Excess Aggregate Contributions shall be
forfeited, and as such, shall be applied to reduce Employer
contributions or pay Plan expenses.
Article IV - Legal Limitations -75-
<PAGE> 84
ARTICLE V - PARTICIPANT PROVISIONS
5A. ANNUITY CONTRACT AND PARTICIPANT'S ACCOUNT
5A.1 PARTICIPANT'S ACCOUNT. A Participant's Account shall be maintained on
behalf of each Participant until such Account is distributed in
accordance with the terms of this Plan.
Each Participant shall have the exclusive authority to direct the
investment of Employee Contributions, Elective Deferral Contributions,
QVEC Contributions and Rollover Contributions, if applicable, from
among the investment options selected by the Employer.
If selected by the Employer in its Adoption Agreement, the
Participant, Beneficiary and/or Alternate Payee additionally shall
have the exclusive authority to direct the investment of contributions
made by the Employer from among the investment choices selected by the
Employer.
5A.2 INVESTMENT TRANSFERS. Each Participant, Beneficiary, and/or Alternate
Payee shall have the exclusive authority to direct the transfer of
amounts between the investment funds designated by the Employer,
attributable to his Employee Contributions, Elective Deferral
Contributions, QVEC Contributions and Rollover Contributions, if
applicable.
If the Employer selects in its Adoption Agreement to grant the
Participant exclusive authority to direct the investment of
contributions made by the Employer, the Participant, Beneficiary,
and/or Alternate Payee shall also have the exclusive authority to
transfer contributions made by the Employer from among the investment
choices selected by the Employer.
The transfer of amounts between investment funds shall be subject to
the rules of the investment funds in which the Participant's Account
is invested or is to be invested.
The Plan Administrator or the Participant, Beneficiary, and/or
Alternate Payee as the case may be, may change such amounts as often
as the Plan Administrator may allow in accordance with the terms of
the investment funds in which the Participant's Account is being
invested.
The ability of a Participant who is subject to the reporting
requirements of section 16(a) of the Securities an Exchange Act of
1934 (the "Act") to make withdrawals or investment changes involving
the Participant's Employer Stock Account may be restricted by the Plan
Administrator to comply with rules under section 16(b) of the Act.
5A.3 PARTICIPANT'S ACCOUNT VALUATION. A Participant's Account shall be
maintained on behalf of each Participant until such Account is
distributed in accordance with the terms of this Plan. At least once
per year, as of the last day of the Plan Year, each Participant's
Account shall be adjusted, in the ratio that the Participant's Account
balance bears to all account balances invested into the same
investment vehicle, for any earnings, gains, losses, contributions,
withdrawals, expenses, and loans attributable to such Plan Year, in
order to obtain a new valuation of the Participant's Account. The
assets of the Plan will be valued annually at fair market value as of
the last day of each Plan Year.
Article V - Participant Provisions -76-
<PAGE> 85
5B. LIFE INSURANCE POLICIES
5B.1 OPTIONAL PURCHASE OF LIFE INSURANCE. If the Employer in its Adoption
Agreement shall permit the purchase of life insurance on the lives of
some or all Participants hereunder, each eligible Participant may
elect that a portion of the Contribution made on his behalf shall be
applied to the purchase of a Life Insurance Policy or Policies on his
life. The application for each Policy shall be signed by the
Participant and by the Trustee and shall conform to the requirements
of the Insurance Company, including any requested evidence of
insurability, and the requirements of this Section. All Life
Insurance Policies shall be issued so as to permit a common billing
date. Any Policy on the life of a Participant who can qualify for
waiver of premium thereunder and participant account contribution
disability benefits thereunder may include such benefits if applied
for by the Participant. The Plan Administrator may adopt reasonable
rules regarding the purchase of Life Insurance Policies provided such
rules are administered in a consistent and nondiscriminatory manner.
No application shall be made hereunder for any Life Insurance Policy
on the life of a Participant acceptable to the Insurance Company at
standard premium rates for a face amount of less that $1,000 for the
first, or any additional Policy issued on the Participant's life.
5B.2 PREMIUMS ON LIFE INSURANCE POLICIES. The premiums on all Life
Insurance Policies on the life of a Participant shall be paid from the
portion of his Participant's Account attributable to contributions
made by the Employer, to the extent sufficient therefor, otherwise in
one of the following manners:
(a) By a loan against the Participant's Policy or Policies, under the
automatic premium loan provisions thereof, or
(b) By payment out of his Participant's Account.
If the Participant is not acceptable to the Insurance Company as a
standard risk at standard rates, a Policy with the same premium but a
lesser death benefit may be purchased.
5B.3 LIMITATIONS ON PREMIUMS. In no case shall the cumulative total
premiums paid on all Policies held on the life of a Participant
hereunder exceed an amount equal to the applicable percentage set
forth below of all Contributions (other than Employee Contributions)
and Forfeitures theretofore allocated or currently due on his behalf:
(a) 49% in the case of ordinary life insurance or similar policies.
(b) 25% in the case of term insurance policies or a combination of
policies, with premiums on ordinary life insurance or similar
policies being given half weight.
If such cumulative total premiums would otherwise exceed this amount,
the necessary steps to avoid this result shall be taken by reduction
of the Participant's life insurance coverage by changing all or a
portion of his coverage to paid-up life insurance or by selling the
excess portion to the Participant.
5B.4 DISPOSAL. A Participant who no longer wishes to have any part of
his allocable share of Contributions used to pay the premiums for any
Life Insurance Policy or Policies may withdraw a prior election by
written notice to the Trustee to that
Article V - Participant Provisions -77-
<PAGE> 86
effect. Any Policy shall be disposed of in accordance with its
provisions as the Trustee shall direct.
5B.5 RIGHTS UNDER POLICIES. Each Policy shall provide that the Trustee
shall have the right to receive any or all payments that may be due
during the Participant's lifetime. Any death benefit shall be
payable directly to the Beneficiary named in the Policy and the
Participant shall have the right, subject to the terms of Section 3C,
either directly or through the Trustee, to change the Beneficiary
from time to time and to elect settlement options under the policy
for the benefit of the Beneficiary. The Trustee shall have the right
to exercise all other options and privileges contained in the policy
and shall exercise such rights and privileges in a manner consistent
with the terms of the Plan.
5B.6 LOANS. No loans shall be made against any of the Policies hereunder
either from the Insurance Company or any other source unless such
loans are made in order to pay amounts then due as premiums thereon.
5B.7 CONDITIONS OF COVERAGE. Except as may be otherwise provided in any
conditional or binding receipt issued by the Insurance Company, there
shall be no coverage and no death benefit payable under any Policy to
be purchased from the Insurance Company until such Policy shall have
been delivered and the premium therefor shall have been paid to the
Insurance Company as a premium for that Policy. Neither the Employer
nor the Trustee shall have any responsibility as to the effectiveness
of any Life Insurance Policy purchased from the Insurance Company
hereunder nor be under any liability or obligation to pay any amount
to any Participant or his Beneficiary by reason of any failure or
refusal by the Insurance Company to make such payment.
5B.8 POLICY NOT YET IN FORCE. If at the death of any Participant, the
Trustee shall be holding any amount intended for the purchase of any
Life Insurance Policy on the Participant's life, but coverage under
such Policy shall not yet be in force, the Trustee shall credit such
amount to the Participant's Account to be disposed of as a portion
thereof.
5B.9 VALUE OF POLICY. The value of any Policy on the life of a living
Participant for any purpose under this Plan shall be that amount which
the Insurance Company would pay upon surrender of such Policy in
accordance with its usual rules and practices.
5B.10 DIVIDENDS. If dividends are allowed on any Life Insurance Policy,
they shall be used to provide additional benefits under the Policy.
5B.11 DISTRIBUTION. No life insurance protection shall continue in force
under the Plan subsequent to a Participant's retirement or Termination
of Employment, whichever occurs first. As of such date, any Life
Insurance Policy shall be distributed to the Participant in accordance
with its terms and the terms of Section 3C.3.
5B.12 APPLICATION. The Trustee, if the Plan is trusteed, or custodian, if
the Plan has a custodial account, shall apply for and will be the
owner of any Life Insurance Policy purchased under the terms of this
Plan. The Life Insurance Policy(ies) must provide that proceeds will
be payable to the Trustee (or custodian, if applicable). However, the
Trustee (or custodian) shall be required to pay over all proceeds of
the Life Insurance Policy(ies) to the Participant's designated
Beneficiary in accordance with the distribution provisions of this
Plan. A Participant's Spouse will be the designated Beneficiary of the
proceeds in all circumstances unless a
Article V - Participant Provisions -78-
<PAGE> 87
Qualified Election has been made in accordance with Section 3C.2(c),
Joint and Survivor Annuity Requirements, if applicable. Under no
circumstances shall the Trust (or custodial account) retain any part
of the proceeds.
In the event of any conflict between the provisions of this Plan and
any Life Insurance Policies or annuity contracts issued pursuant to
the Plan, the Plan provisions shall control.
5C. LOANS
5C.1 LOANS TO PARTICIPANTS. If the Employer has specified in its Adoption
Agreement that loans are permitted, then the Plan Administrator may
make a bona fide loan to a Participant, in an amount which, when
added to the outstanding balance of all other loans to the
Participant from all qualified plans of the Employer, does not exceed
the lesser of $50,000 reduced by the excess of the Participant's
highest outstanding loan balance during the 12 months preceding the
date on which the loan is made over the outstanding loan balance on
the date the new loan is made, or 50% of the Participant's Vested
Interest in his Participant's Account excluding amounts attributable
to QVEC Contributions. Notwithstanding any provision in this
paragraph to the contrary, loans may not exceed a Participant's
Vested Interest attributable to such contributions.
In the event of default, foreclosure on the note and attachment of
security will not occur until a distributable event occurs in the
Plan.
No loans will be made to any Shareholder-Employee or Owner-Employee
or to family members of Shareholder-Employees or Owner-Employees, as
defined in Code section 267(c)(4).
The loan shall be made under such terms, security interest, and
conditions as the Plan Administrator deems appropriate, provided,
however, that:
(a) Loans shall be made available to all Participants and
parties-in-interest (as defined in ERISA and including Employees
and Beneficiaries), on a reasonably equivalent basis.
(b) Loans shall not be made available to Highly Compensated
Employees on a basis greater than the basis made available to
other Employees.
(c) Loans must bear a reasonable rate of interest.
(d) Loans are adequately secured.
(e) Unless the provisions of Section 3C.6 apply to a Participant,
loans may be made only after a Participant obtains the consent
of his Spouse, if any, to use his Participant's 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 is to be so secured. The consent must be
in writing, must acknowledge the effect of the loan, and must be
witnessed by a Plan representative or notary public. Such consent
shall thereafter be binding with respect to the consenting
Spouse or any subsequent Spouse with respect to that loan. A new
consent shall be required if the Participant's Account is used
for renegotiation, extension, renewal or other revision of the
loan.
(f) Loans must be made in accordance with and subject to all of the
provisions of this Section 5C.
Article V - Participant Provisions -79-
<PAGE> 88
If a valid spousal consent has been obtained in accordance with (e), then,
notwithstanding any other provision of this Plan, the portion of the
Participant's Vested Interest used as a security interest held by the Plan
by reason of a loan outstanding to the Participant shall be taken into
account for purposes of determining the amount of the account balance
payable at the time of death or distribution, but only if the reduction is
used as repayment of the loan. If less than 100% of the Participant's
Vested Interest in his Participant's Account (determined without regard to
the preceding sentence) is payable to the surviving Spouse, then the
Participant's Account shall be adjusted by first reducing the Vested
Interest by the amount of the security used as repayment of the loan, and
then determining the benefit payable to the surviving Spouse.
5C.2 LOAN PROCEDURES. The Plan Administrator shall establish a written set of
procedures, set forth in the summary plan description or any other
established set of procedures, which becomes a part of such Plan by which
all loans will be administered. Such rules, which are incorporated herein
by reference, will include, but not be limited to the following:
(a) The person or persons authorized to administer the loan program,
identified by name or position;
(b) The loan application procedure;
(c) The basis for approving or denying loans;
(d) Any limits on the types of loans permitted;
(e) The procedure for determining a "reasonable" interest rate;
(f) Acceptable collateral;
(g) Default conditions; and
(h) Steps which will be taken to preserve Plan assets in the event of
default.
5D. PARTICIPANT'S RIGHTS
5D.1 GENERAL RIGHTS OF PARTICIPANTS AND BENEFICIARIES. The Plan is established
and the Plan or Trust assets are held for the exclusive purpose of
providing benefits for such Employees and their Beneficiaries as have
qualified to participate under the terms of the Plan.
5D.2 FILING A CLAIM FOR BENEFITS. A Participant or Beneficiary, or the Employer
acting in his behalf, shall notify the Plan Administrator of a claim of
benefits under the Plan. Such request shall be in writing to the Plan
Administrator and shall set forth the basis of such claim and shall
authorize the Plan Administrator to conduct such examinations as may be
necessary to determine the validity of the claim and to take such steps as
may be necessary to facilitate the payment of any benefits to which the
Participant or Beneficiary may be entitled under the terms of the Plan.
5D.3 DENIAL OF CLAIM. Whenever a claim for benefits by any Participant or
Beneficiary has been denied by a Plan Administrator, a written notice,
prepared in a manner calculated to be understood by the Participant, must
be provided, setting forth (1) the specific reasons for the denial; (2) the
specific reference to pertinent Plan provisions on which the denial is
based; (3) a description of any additional material or information
necessary for the claimant to perfect the claim
Article V - Participant Provisions -80-
<PAGE> 89
and an explanation of why such material or information is necessary;
and (4) an explanation of the Plan's claim review procedure.
5D.4 REMEDIES AVAILABLE TO PARTICIPANTS. A Participant or Beneficiary (1)
may request a review by a Named Fiduciary, other than the Plan
Administrator, upon written application to the Plan; (2) may review
pertinent Plan documents; and (3) may submit issues and comments in
writing to a named Fiduciary. A Participant or Beneficiary shall have
60 days after receipt by the claimant of written notification of a
denial of a claim to request a review of a denied claim.
A decision by a Named Fiduciary shall be made promptly and not later
than 60 days after the Named Fiduciary's receipt of a request for
review, unless special circumstances require an extension of the time
for processing in which case a decision shall be rendered as soon as
possible, but not later than 120 days after receipt of a request for
review. The decision on review by a Named Fiduciary shall be in
writing and shall include specific reasons for the decision, written
in a manner calculated to be understood by the claimant, and specific
references to the pertinent Plan provisions on which the decision is
based.
A Participant or Beneficiary shall be entitled, either in his own name
or in conjunction with any other interested parties, to bring such
actions in law or equity or to undertake such administrative actions
or to seek such relief as may be necessary or appropriate to compel
the disclosure of any required information, to enforce or protect his
rights, to recover present benefits due to him or to clarify his
rights to future benefits under the Plan.
5D.5 LIMITATION OF RIGHTS. Participation hereunder shall not grant any
Participant the right to be retained in the Service of the Employer or
any other rights or interest in the Plan or Trust Fund other than
those specifically herein set forth.
5D.6 100% VESTED CONTRIBUTIONS. Each Participant, regardless of his length
of Service with the Employer, shall be fully vested (100%) at all
times in any portion of his Participant's Account attributable to the
following contributions, as applicable:
(a) Employee Contributions and earnings thereon;
(b) Elective Deferral Contributions and earnings thereon;
(c) Qualified Matching Contributions and earnings thereon;
(d) Qualified Nonelective Contributions and earnings thereon;
(e) Rollover Contributions and earnings thereon;
(f) QVEC Contributions and earnings thereon.
5D.7 REINSTATEMENT OF BENEFIT. In the event any portion of a benefit which
is payable to a Participant or a Beneficiary shall remain unpaid on
account of the inability of the Plan Administrator, after diligent
effort, to locate such Participant or Beneficiary, the amount so
distributable shall be treated as a Forfeiture under Section 3D. If a
claim is made by the Participant or Beneficiary for any benefit
forfeited under this Section, such benefit must be reinstated by the
Employer.
Article V - Participant Provisions -81-
<PAGE> 90
5D.8 NON-ALIENATION. It is a condition of the Plan, and all rights of each
Participant shall be subject thereto, that no right or interest of any
Participant in the Plan shall be assignable or transferable in whole
or in part, either directly or by operation of law or otherwise,
including, but without limitation, execution, levy, garnishment,
attachment, pledge, bankruptcy or in any other manner, and no right or
interest of any Participant in the Plan shall be liable for or subject
to any obligation or liability of such Participant. The preceding
sentence shall not preclude the enforcement of a federal tax levy made
pursuant to Code section 6331 or the collection by the United States
on a judgement resulting from an unpaid tax assessment.
The preceding paragraph shall also apply to the creation, assignment,
or recognition of a right to any benefit payable with respect to a
Participant pursuant to a domestic relations order, unless such order
is determined to be a QDRO. A domestic relations order entered before
January 1, 1985 will be treated as a QDRO if payment of benefits
pursuant to the order has commenced as of such date, and may be
treated as a QDRO if payment of benefits has not commenced as of such
date, even though the order does not satisfy the requirements of Code
section 414(p).
Article V - Participant Provisions -82-
<PAGE> 91
ARTICLE VI - OVERSEER PROVISIONS
6A. FIDUCIARY DUTIES AND RESPONSIBILITIES
6A.1 GENERAL FIDUCIARY STANDARD OF CONDUCT. Each Fiduciary of the Plan shall
discharge his duties hereunder solely in the interest of the Participants
and their Beneficiaries and for the exclusive purpose of providing benefits
to Participants and their Beneficiaries and defraying reasonable expenses
of administering the Plan. Each Fiduciary shall act with the care, skill,
prudence and diligence under the circumstances that a prudent man acting in
a like capacity and familiar with such matters would use in conducting an
enterprise of like character and with like aims, in accordance with
documents and instruments governing this Plan, insofar as such documents
and instruments are consistent with this standard.
6A.2 SERVICE IN MULTIPLE CAPACITIES. Any Person or group of Persons may serve in
more than one Fiduciary capacity with respect to this Plan, specifically
including service both as Trustee and Plan Administrator.
6A.3 LIMITATIONS ON FIDUCIARY LIABILITY. Nothing in this Plan shall be construed
to prevent any Fiduciary from receiving any benefit to which he may be
entitled as a Participant or Beneficiary in this Plan, so long as the
benefit is computed and paid on a basis which is consistent with the terms
of this Plan as applied to all other Participants and Beneficiaries. Nor
shall this Plan be interpreted to prevent any Fiduciary from receiving any
reasonable compensation for services rendered, or for the reimbursement of
expenses properly and actually incurred in the performance of his duties
with the Plan; except that no Person so serving who already receives
full-time pay from an Employer shall receive compensation from this Plan,
except for reimbursement of expenses properly and actually incurred.
6A.4 INVESTMENT MANAGER. If an Investment Manager has been appointed pursuant to
Section 6B.7 of this Plan, he is required to acknowledge in writing that he
has undertaken a Fiduciary responsibility with respect to the Plan. The
Insurance Company's liability as a Fiduciary is limited to that arising
from its management of any assets of the Plan held by the Insurance Company
in its separate accounts.
6B. THE PLAN ADMINISTRATOR
6B.1 DESIGNATION AND ACCEPTANCE. The Employer shall designate a Person or
Persons to serve as Plan Administrator under the Plan and such Persons, by
joining in the execution of the Adoption Agreement, accepts such
appointment and agrees to act in accordance with the terms of the Plan.
6B.2 DUTIES AND RESPONSIBILITY. The Plan Administrator shall administer the Plan
for the exclusive benefit of the Participants and their Beneficiaries in a
nondiscriminatory manner subject to the specific terms of the Plan. The
Plan Administrator shall perform all such duties as are necessary to
operate, administer, and manage the Plan in accordance with the terms
thereof. This shall include notification to the Insurance Company of any
adjustment made to a Participant's Account as a result of Excess Annual
Additions as defined in Section 4C.1(b).
Article VI - Overseer Provisions -83-
<PAGE> 92
The Plan Administrator shall comply with the regulatory provisions of
ERISA and shall furnish to each Participant (a) a summary plan
description, (b) upon written request, a statement of his total
benefits accrued and his vested benefits if any and (c) the
information necessary to elect the benefits available under the Plan.
The Plan Administrator shall also file the appropriate annual reports
and any other data which may be required by appropriate regulatory
agencies.
Furthermore, the Plan Administrator shall take the necessary steps to
notify the appropriate interested parties whenever an application is
made to the Secretary of the Treasury for a determination letter in
accordance with Code section 7476 as amended.
6B.3 SPECIAL DUTIES. If the Employer that adopts this Plan is not the Plan
Administrator, and the Plan provides for either Employee
Contributions or Matching Contributions to be made, the Plan
Administrator shall:
(a) Maintain records that enable it to monitor the adopting
Employer's compliance with the requirements of Code section
401(m);
(b) Perform the ACP test, as described in Section 4A.4, for the
Employer on an annual basis; and
(c) Notify the Employer if it is required to correct Excess
Aggregate Contributions.
6B.4 EXPENSES AND COMPENSATION. The expenses necessary to administer the
Plan shall be taken from Participants' Accounts unless paid by the
Employer, including but not limited to those involved in retaining
necessary professional assistance from an attorney, an accountant, an
actuary, or an investment advisor. Nothing shall prevent the Plan
Administrator from receiving reasonable compensation for services
rendered in administering this Plan, provided the Plan Administrator
is not a full-time Employee of any Employer adopting this Plan.
6B.5 INFORMATION FROM EMPLOYER. To enable the Plan Administrator to
perform his functions, the Employer shall supply full and timely
information to the Plan Administrator on all matters relating to this
Plan as the Plan Administrator may require.
6B.6 ADMINISTRATIVE COMMITTEE; MULTIPLE SIGNATURES. In the event that more
than one Person has been duly nominated to serve on the
Administrative Committee and has signified in writing the acceptance
of such designation, the signature(s) of one or more Persons may be
accepted by an interested party as conclusive evidence that the
Administrative Committee has duly authorized the action therein set
forth and as representing the will of and binding upon the whole
Administrative Committee. No Person receiving such documents or
written instructions and acting in good faith and in reliance thereon
shall be obliged to ascertain the validity of such action under the
terms of this Plan. The Administrative Committee shall act by a
majority of its members at the time in office, and such action may be
taken either by a vote at a meeting or in writing without a meeting.
6B.7 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. The Plan
Administrator, or any member of the Administrative Committee, may
resign at any time by delivering to the Employer a written notice of
resignation, to take effect at a date specified therein, which shall
not be less than 30 days after the delivery thereof, unless such
notice shall be waived.
Article VI - Overseer Provisions -84-
<PAGE> 93
The Plan Administrator may be removed with or without cause by the
Employer by delivery of written notice of removal, to take effect at
a date specified therein, which shall be not less than thirty (30)
days after delivery thereof, unless such notice shall be waived.
The Employer, upon receipt of or giving notice of the resignation or
removal of the Plan Administrator, shall promptly designate a
successor Plan Administrator who must signify acceptance of this
position in writing. In the event no successor is appointed, the
Board of Directors of the Employer will function as the
Administrative Committee until a new Plan Administrator has been
appointed and has accepted such appointment.
6B.8 INVESTMENT MANAGER. The Plan Administrator may appoint, in writing,
an Investment Manager or Managers to whom is delegated the authority
to manage, acquire, invest or dispose of all or any part of the Plan
or Trust assets. With regard to the assets entrusted to his care, the
Investment Manager shall provide written instructions and directions
to the Employer or Trustee, as applicable, who shall in turn be
entitled to rely upon such written direction. This appointment and
delegation shall be evidenced by a signed written agreement.
6B.9 DELEGATION OF DUTIES. The Plan Administrator shall have the power, to
the extent permitted by law, to delegate the performance of such
Fiduciary and non-Fiduciary duties, responsibilities and functions as
the Plan Administrator shall deem advisable for the proper management
and administration of the Plan in the best interests of the
Participants and their Beneficiaries.
6C. TRUST AGREEMENT
This agreement entered into by and among the Employer, the Plan
Administrator and the Trustee pursuant to the Adoption Agreement completed
and signed by the Employer, the Plan Administrator and Trustee, hereby
establishes the Trust with the following provisions to form a part of and
implement the provisions of the Plan:
6C.1 CREATION AND ACCEPTANCE OF TRUST. The Trustee, by joining in the
execution of the Adoption Agreement, accepts the Trust hereby created
and agrees to act in accordance with the express terms and conditions
herein stated.
6C.2 TRUSTEE CAPACITY; CO-TRUSTEES. The Trustee may be a Bank, Trust
Company or other corporation possessing trust powers under applicable
State or Federal law or one or more individuals or any combination
thereof.
When two or more persons serve as Trustee, they are specifically
authorized, by a written agreement between themselves, to allocate
specific responsibilities, obligations or duties among themselves. An
original copy of such written agreement is to be delivered to the
Plan Administrator.
6C.3 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR TRUSTEE. Any
Trustee may resign at any time by delivering to the Plan
Administrator a written notice of resignation, to take effect at a
date specified therein, which shall not be less than 30 days after
the delivery thereof, unless such notice shall be waived.
The Trustee may be removed with or without cause by the Board of
Directors by delivery of a written notice of removal, to take effect
at a date specified therein, which shall not be less than 30 days
after delivery thereof, unless such notice shall be waived.
Article VI - Overseer Provisions -85-
<PAGE> 94
In the case of the resignation or removal of a Trustee, the Trustee
shall have the right to a settlement of its account, which may be
made, at the option of the Trustee, either (1) by judicial settlement
in an action instituted by the Trustee in a court of competent
jurisdiction, or (2) by written agreement of settlement between the
Trustee and the Plan Administrator.
Upon such settlement, all right, title and interest of such Trustee
in the assets of the Trust and all rights and privileges under this
Agreement theretofore vested in such Trustee shall vest in the
successor Trustee, and thereupon all future liability of such Trustee
shall terminate; provided, however, that the Trustee shall execute,
acknowledge and deliver all documents and written instruments which
are necessary to transfer and convey the right, title and interest in
the Trust assets, and all rights and privileges to the successor
Trustee.
The Board of Directors, upon receipt of notice of the resignation or
removal of the Trustee, shall promptly designate a successor Trustee,
whose appointment is subject to acceptance of this Trust in writing
and shall notify the Insurance Company in writing of such successor
Trustee.
6C.4 TAXES, EXPENSES AND COMPENSATION OF TRUSTEE. The Trustee shall deduct
from and charge against the Trust fund any taxes paid by it which may
be imposed upon the Trust fund or the income thereof or which the
Trustee is required to pay with respect to the interest of any person
therein.
The Employer shall pay the Trustee annually its expenses in
administering the Trust and a reasonable compensation for its service
as Trustee hereunder if the Trustee is not an Employee of the Plan,
at a rate to be agreed upon from time to time. The reasonable
compensation shall include that for any extraordinary services.
6C.5 TRUSTEE ENTITLED TO CONSULTATION. The Trustee shall be entitled to
advice of counsel, which may be counsel for the Plan or the Employer,
in any case in which the Trustee shall deem such advice necessary.
With the exception of those powers and duties specifically allocated
to the Trustee by the express terms of this Plan, it shall not be the
responsibility of the Trustee to interpret the terms of the Plan or
Trust and the Trustee may request, and is entitled to receive
guidance and written direction from the Plan Administrator on any
point requiring construction or interpretation of the Plan documents.
6C.6 RIGHTS, POWERS AND DUTIES OF TRUSTEE. The Trustee shall have the
following rights, powers, and duties:
(a) The Trustee shall be responsible for the safekeeping and
administering of the assets of this Plan and Trust in accordance
with the provisions of this Agreement and any amendments thereto.
The duties of the Trustee under this Agreement shall be
determined solely by the express provisions of this Agreement and
no other further duties or responsibilities shall be implied.
Subject to the terms of this Plan and Trust, the Trustee shall be
fully protected and shall incur no liability in acting in
reliance upon the written instructions or directions of the Plan
Administrator or a duly designated Investment Manager or any
other Named Fiduciary.
(b) The Trustee shall have all powers necessary or convenient for
the orderly and efficient performance of its duties hereunder,
including but not limited to those specified in this Section. The
Trustee may appoint one or more administrative agents or contract
for the performance of such
Article VI - Overseer Provisions -86-
<PAGE> 95
administrative and service functions as it may deem necessary
for the effective installation and operation of the Plan and
Trust.
(c) The Trustee shall have the power to collect and receive any and
all monies and other property due hereunder and to give full
discharge and acquittance therefor; to settle, compromise or
submit to arbitration any claims, debts, or damages due or owing
to or from the Trust; to commence or defend suits or legal
proceedings wherever, in its judgement, any interest of the
Trust requires it; and to represent the Trust in all suits or
legal proceedings in any court of law or equity or before any
other body or tribunal. It shall have the power generally to do
all acts, whether or not expressly authorized, which the Trustee
in the exercise of its Fiduciary responsibility may deem
necessary or desirable for the protection of the Trust and the
assets thereof.
(d) The Trustee shall make application to the Insurance Company for
the Annuity Contract required hereunder and shall take all
necessary steps to obtain any Life Insurance Policies elected on
the lives of Participants hereunder. In applying for the Annuity
Contract, the Trustee may indicate that, unless it directs the
Insurance Company otherwise, it shall be entitled to receive all
cash payments for further distribution to Participants and
Beneficiaries.
(e) The Trustee may temporarily hold cash balances and shall be
entitled to deposit any such funds received in a bank account or
bank accounts in the name of the Trust in any bank or banks
selected by the Trustee, including the banking department of the
Trustee, pending disposition of such funds in accordance with the
Trust. Any such deposit may be made with or without interest.
(f) The Trustee shall obtain and deal with any Life Insurance
Policies or other assets of this Trust held or received under
this Plan only in accordance with the written directions from the
Plan Administrator. The Trustee shall be under no duty to
determine any facts or the propriety of any action taken or
omitted by it in good faith pursuant to instructions from the
Plan Administrator.
(g) All contributions made to the Trust fund under this Plan shall be
paid by the Trustee to the Insurance Company under the Annuity
Contract within 30 days after the date such contributions were
due under the Plan. However, in lieu of holding any
contributions made to the Trust fund, the Trustee may direct that
all such contributions be made to the Trust fund, the Trustee may
direct that all such contributions be made directly to the
Insurance Company under the Annuity Contract or any Life
Insurance Policy. The Employer shall keep the Trustee informed of
all contributions made directly to the Insurance Company in
accordance with the Trustee's instructions.
(h) If the whole or any part of the Trust shall become liable for the
payment of any estate, inheritance, income or other tax which the
Trustee shall be required to pay, the Trustee shall have full
power and authority to pay such tax out of any monies or other
property in its hands for the account of the person whose
interest hereunder is so liable. Prior to making any payment,
the Trustee may require such releases or other documents from any
lawful taxing authority as it shall deem necessary. The Trustee
shall not be liable
Article VI - Overseer Provisions -87-
<PAGE> 96
for any nonpayment of tax when it distributes an interest hereunder
on instructions from the Plan Administrator.
(i) The Trustee shall keep a full, accurate and detailed record of all
transactions of the Trust which the Plan Administrator shall have the
right to examine at any time during the Trustee's regular business
hours. Following the close of the fiscal year of the Trust, or as soon
as practical thereafter, the Trustee shall furnish the Plan
Administrator with a statement of account. This account shall set
forth all receipts, disbursements and other transactions effected by
the Trustee during said year.
The Plan Administrator shall promptly notify the Trustee in writing
of its approval or disapproval of the account. The Plan
Administrator's failure to disapprove the account within 60 days after
receipt shall be considered an approval. The approval by the Plan
Administrator shall be binding as to all matters embraced in any
statement to the same extent as if the account of the Trustee had been
settled by judgment or decree of a court of competent jurisdiction
under which the Trustee, Plan Administrator, Employer and all persons
having or claiming any interest in the Trust were parties; provided,
however, that the Trustee may have its account judicially settled if
it so desires.
(j) If, at any time, there shall be a dispute as to the person to whom
payment or delivery of monies or property should be made by the
Trustee, or regarding any action to be taken by the Trustee, the
Trustee may postpone such payment, delivery or action, retaining the
funds or property involved, until such dispute shall have been
resolved in a court of competent jurisdiction or the Trustee shall
have been indemnified to its satisfaction or until it has received
written direction from the Plan Administrator.
(k) Anything in this instrument to the contrary notwithstanding, it shall
be understood that the Trustee shall have no duty or responsibility
with respect to the determination of matters pertaining to the
eligibility of any Employee to become or remain a Participant
hereunder, the amount of benefit to which any Participant or
Beneficiary shall be entitled hereunder, all such responsibilities
being vested in the Plan Administrator. The Trustee shall have no duty
to collect any contribution from the Employer and shall not be
concerned with the amount of any contribution nor the application of
any contribution formula.
6C.7 EVIDENCE OF TRUSTEE ACTION. In the event that the Trustee comprises two or
more Trustees, then those Trustees may designate one such Trustee to
transmit all decisions of the Trustee and to sign all necessary notices and
other reports on behalf of the Trustee. All notices and other reports
bearing the signature of the individual Trustee so designated shall be
deemed to bear the signatures of all the individual Trustees and all
parties dealing with the Trustee are entitled to rely on any such notices
and other reports as authentic and as representing the action of the
Trustee.
6C.8 INVESTMENT POLICY. This Plan has been established for the sole purpose of
providing benefits to the Participants and their Beneficiaries. In
determining its investments hereunder, the Trustee shall take account of
the advice provided by the Plan Administrator as to funding policy and the
short and long-range needs
Article VI - Overseer Provisions -88-
<PAGE> 97
of the Plan based on the evident and probable requirements of the Plan
as to the time benefits shall be payable and the requirements
therefor.
6C.9 PERIOD OF THE TRUST. If it shall be determined that the applicable
State law requires a limitation on the period during which the
Employer's Trust shall continue, then such Trust shall not continue
for a period longer than 21 years following the death of the last of
those Participants including future Participants who are living at the
Effective Date hereof. At least 180 days prior to the end of the
twenty-first year as described in the first sentence of this Section
the Employer, the Plan Administrator and the Trustee shall provide for
the establishment of a successor trust and transfer of Plan assets to
the Trustee. If applicable State law requires no such limitation,
then this Section shall not be operative.
6D. THE INSURANCE COMPANY
6D.1 DUTIES AND RESPONSIBILITIES. The Insurance Company shall issue the
Annuity Contract and any Policies hereunder and thereby assumes all
the duties and responsibilities set forth therein. The terms of the
Annuity Contract may be changed as provided therein without amending
this Plan, provided such changes shall conform (1) to the requirements
for qualification under Code section 401(a), as amended from time to
time and (2) to ERISA, as amended from time to time.
6D.2 RELATION TO EMPLOYER, PLAN ADMINISTRATOR AND PARTICIPANTS. The
Insurance Company may receive the statement of the Plan Administrator
or, if the Plan Administrator so designates, the Employer or the
Trustee, as conclusive evidence of any of the matters decided in the
Plan, and the Insurance Company shall be fully protected in taking or
permitting any action on the basis thereof and shall incur no
liability or responsibility for so doing. The Insurance Company shall
not be required to look into the terms of the Plan, to question any
action by the Employer or the Plan Administrator or any Participant
nor to determine that such action is properly taken under the Plan.
The Insurance Company shall be fully discharged from any and all
liability with respect to any payment to any Participant hereunder in
accordance with the terms of the Annuity Contract or of any Policies
under the Plan. The Insurance Company shall not be required to take
any action contrary to its normal rules and practices.
6D.3 RELATION TO TRUSTEE. The Insurance Company shall not be required to
look into the terms of the Plan or question any action of the Trustee,
and the Insurance Company shall not be responsible for seeing that any
action of the Trustee is authorized by the terms hereof. The Insurance
Company shall be under no obligation to take notice of any change in
Trustee until evidence of such change satisfactory to the Insurance
Company shall have been given to the Insurance Company in writing at
its home office.
6E. ADOPTING EMPLOYER
6E.1 ELECTION TO BECOME ADOPTING EMPLOYER. With the consent of the Employer
and Trustee, if any, any employer, which along with the Employer is
included in a group of employers which constitute a controlled group
of corporations (as defined in Code section 414(b)) or which
constitutes trade or businesses (whether or not incorporated) which
are under common control (as defined in section 414(c)) or which
constitutes an affiliated service group as
Article VI - Overseer Provisions -89-
<PAGE> 98
defined in section 414(m) and is identified as an Adopting Employer
in the Adoption Agreement, may adopt this Plan and all of its
provisions.
6E.2 DEFINITION. Any employer eligible to adopt this Plan under the
provisions of Section 6E.1 and which adopts this Plan and all of its
provisions, shall be known as an Adopting Employer and shall be
included within the term Employer, as defined in Section 1.24.
6E.3 EFFECTIVE DATE OF PLAN. The effective date of the Plan for an
Adopting Employer on other than the date specified in the Adoption
Agreement shall be the first day of the Plan Year in which such
Adopting Employer adopts this Plan.
6E.4 FORFEITURES. Forfeitures of any nonvested portion of a Participant's
Account, as selected by the Employer in the Adoption Agreement, shall
be allocated only to other Participants who are employed by the
Adopting Employer who made the contributions to such Participant's
Account, or shall be used as a credit only for such Adopting
Employer.
6E.5 CONTRIBUTIONS. All contributions made by an Adopting Employer shall
be determined separately by each Adopting Employer and shall be paid
to and held by the Plan for the exclusive benefit of the Employees of
such Adopting Employer and the Beneficiaries of such Employees,
subject to all the terms and conditions of this Plan. The Plan
Administrator shall separate books and records concerning the affairs
of each Adopting Employer and as to the accounts and credits of the
Employees of each Adopting Employer.
6E.6 EXPENSES. Subject to Section 6B.3, the expenses necessary to
administer the Plan of any Adopting Employer shall be taken from
accounts of Participants who are Employees of such Adopting Employer
unless paid for by such Adopting Employer. The expenses necessary to
administer the Plan for each Adopting Employer shall be determined by
the ratio of the value of all Participants' Accounts of such
Adopting Employers to the total value of all Participants' Accounts
of each Adopting Employer.
6E.7 SUBSTITUTION OF PLANS. Subject to the provisions of Section 7C, any
Adopting Employer shall be permitted to withdraw from its
participation in this Plan. The consent of the Employer or any other
Adopting Employer shall not be required.
6E.8 TERMINATION OF PLANS. If any Adopting Employer elects to terminate
its Plan pursuant to Sections 7B.4, 7B.5 and 7B.6, such termination
shall in no way affect the Plan of any other Adopting Employer.
6E.9 AMENDMENT. Amendment of this Plan by the Employer or any Adopting
Employer shall only be by the written consent of the Employer and
each and every Adopting Employer and with the consent of the Trustee,
if any, where such consent is necessary in accordance with the terms
of this Plan.
6E.10 PLAN ADMINISTRATOR'S AUTHORITY. The Plan Administrator shall have
authority to make any and all necessary rules or regulations, binding
upon all Adopting Employers and all Participants, to effectuate the
purpose of this Section 6E.
Article VI - Overseer Provisions -90-
<PAGE> 99
ARTICLE VII - SPECIAL CIRCUMSTANCES WHICH MAY AFFECT THE PLAN
7A. TOP-HEAVY PROVISIONS
7A.1 DEFINITIONS.
(a) ANNUAL COMPENSATION. The term Annual Compensation means
Compensation as defined in the Compensation section of the
Adoption Agreement, but including amounts contributed by the
Employer pursuant to a salary reduction agreement which are
excludable from the Employee's gross income under Code section
125, section 402(e)(3), section 402(h)(1)(B) or section 403(b).
(b) DETERMINATION DATE. The term Determination Date means for any
Plan Year subsequent to the first Plan Year, the last day of the
preceding Plan Year. For the first Plan Year of the Plan, it
means the last day of that year.
(c) DETERMINATION PERIOD. The term Determination Period means the
Plan Year containing the Determination Date and the four
preceding Plan Years.
(d) KEY EMPLOYEE. The term Key Employee means any Employee or former
Employee (and the Beneficiaries of such Employee) who at any
time during the Determination Period was:
(1) An officer of the Employer if such individual's Annual
Compensation exceeds 50 percent of the dollar limitation
under Code section 415(b)(1)(A); or
(2) An owner (or considered an owner under Code section 318) of
one of the ten largest interests in the Employer if such
individual's Annual Compensation exceeds 100 percent of the
dollar limitation under Code section 415(c)(1)(A); or
(3) A 5-percent owner of the Employer; or
(4) A 1-percent owner of the Employer who has Annual
Compensation of more than $150,000.
The determination of who is a Key Employee will be made in
accordance with Code section 416(I)(1) and related regulations.
(e) PERMISSIVE AGGREGATION GROUP. The term Permissive Aggregation
Group means the Required Aggregation Group of plans plus any
other plan or plans of the Employer which, when considered as a
group with the Required Aggregation Group, would continue to
satisfy the requirements of Code sections 401(a)(4) and 410.
(f) PRESENT VALUE. Present Value shall be based only on the interest
and mortality rates specified in the Adoption Agreement.
Article VII - Special Circumstances -91-
<PAGE> 100
(g) REQUIRED AGGREGATION GROUP. The term-Required Aggregation Group
means (1) each qualified plan of the Employer in which at least
one Key Employee participates or participated at any time during
the Determination Period (regardless of whether the plan has
terminated), and (2) any other qualified plan of the Employer
which enables a plan described in (1) to meet the requirements of
Code sections 401(a)(4) or 410.
(h) TOP-HEAVY PLAN. For any Plan Year beginning after December 31,
1983, this Plan is Top-Heavy if any of the following conditions
exists:
(1) If the Top-Heavy Ratio for this Plan exceeds 60 percent and
this Plan is not part of any Required Aggregation Group or
Permissive Aggregation Group of plans.
(2) If this Plan is a part of a Required Aggregation Group of
plans but not part of a Permissive Aggregation Group and
the Top-Heavy Ratio for the group of plans exceeds 60
percent.
(3) If this Plan is a part of a Required Aggregation Group and
part of a Permissive Aggregation Group of plans and the
Top-Heavy Ratio for the Permissive Aggregation Group
exceeds 60 percent.
(i) TOP-HEAVY RATIO. The term Top-Heavy Ratio means:
(1) If the Employer maintains one or more defined contribution
plans (including any simplified employee pension plan) and
the Employer has not maintained any defined benefit plan
which during the 5-year period ending on the Determination
Date(s) has or has had accrued benefits, the Top-Heavy Ratio
for this Plan alone or for the Required or Permissive
Aggregation Group, as appropriate, is a fraction, the
numerator of which is the sum of the account balances of all
Key Employees as of the Determination Date(s)(including any
part of any account balance distributed in the 5-year period
ending on the Determination Date(s)), and the denominator of
which is the sum of all account balances (including any part
of any account balance distributed in the 5-year period
ending on the Determination Date(s)), both computed in
accordance with Code section 416 and related regulations.
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
related regulations.
(2) If the Employer maintains one or more defined contribution
plans (including any simplified employee pension plans as
defined in Code section 408(k)) and the Employer maintains
or has maintained one or more defined benefit plans, which
during the 5-year period ending on the Determination
Date(s) has or has had any accrued benefits, the Top-Heavy
Ratio for any Required or Permissive Aggregation Group as
appropriate is a fraction, the numerator of which is the
sum of account balances under the aggregated defined
contribution plan or plans for all Key Employees,
determined in accordance with (1) above, and the Present
Value of accrued benefits under the aggregated defined
benefit plan or plans
Article VII - Special Circumstances -92-
<PAGE> 101
for all Key Employees as of the Determination Date(s), and the
denominator of which is the sum of the account balances under the
aggregated defined contribution plan or plans for all
Participants, determined in accordance with (1) above, and the
Present Value of accrued benefits under the defined benefit plan
or plans for all Participants as of the Determination Date(s),
all determined in accordance with Code section 416 and related
regulations. The accrued benefits under a defined benefit plan in
both the numerator and denominator of the Top-Heavy Ratio are
increased for any distribution of an accrued benefit made in the
5-year period ending on the Determination Date.
(3) For purposes of (1) and (2) above, the value of account balances
and the Present Value of accrued benefits will be determined as
of the most recent Valuation Date that falls within or ends with
the 12-month period ending on the Determination Date, except as
provided in 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 a Participant (I) who is
not a Key Employee but who was a Key Employee in a prior year, or
(ii) who has not been credited with at least one Hour of Service
with any Employer maintaining the Plan at any time during the
5-year period ending on the Determination Date shall be
disregarded. The calculation of the Top-Heavy Ratio, and the
extent to which distributions, rollovers, and transfers are taken
into account, will be made in accordance with Code section 416
and the regulations thereunder. QVEC 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. The accrued
benefit of a Participant other than a Key Employee shall be
determined under (a) the method, if any, that uniformly applies
for a accrual purposes under all defined benefit plans maintained
by the Employer, or (b) if there is no such method, as if such
benefit accrued not more rapidly than the slowest accrual rate
permitted under the fractional rule of Code section 411(b)(1)(C).
(j) VALUATION DATE. The term Valuation Date means the date specified in
the Top-Heavy Provisions section of the Adoption Agreement as of which
account balances or accrued benefit are valued for purposes of
calculating the Top-Heavy Ratio.
7A.2 MINIMUM ALLOCATION. For any Plan Year in which the Plan is Top-Heavy, the
following will apply:
(a) Except as otherwise provided in (c) and (d) below, the Employer
contributions and Forfeitures allocated on behalf of any Participant
who is not a Key Employee shall not be less than the lesser of three
percent of such Participant's Compensation or in the case where the
Employer has no defined benefit plan which designates this Plan to
satisfy Code section 401, the largest percentage of Employer
contributions and Forfeitures, as limited by Code section 401(a)(17),
allocated on behalf of any Key Employee for that year. The Minimum
Allocation is determined without
Article VII - Special Circumstances -93-
<PAGE> 102
regard to any Social Security contribution. This Minimum
Allocation shall be made even though, under other Plan
provisions, the Participant would not otherwise be entitled to
receive an allocation, or would have received a lesser allocation
for the year because of (1) the Participant's failure to complete
1,000 Hours of Service (or any equivalent provided in the Plan),
or (2) the Participant's failure to make Required Employee
Contributions to the Plan, or (3) Compensation less than a stated
amount.
(b) For purposes of computing the Minimum Allocation, Compensation
shall mean Compensation as defined in the Compensation section of
the Adoption Agreement as limited by Code section 401(a)(17).
Notwithstanding the above, if elected by the Employer in the
Adoption Agreement, Compensation shall include any amount which
is contributed by the Employer pursuant to a salary reduction
agreement and which is not includable in the Employee's gross
income under Code sections 125, 401(a)(8), 402(h) or 403(b).
(c) The provision in (a) above shall not apply to any Participant who
was not employed by the Employer on the last day of the Plan
Year.
(d) The provision in (a) above shall not apply to any Participant to
the extent the Participant is covered under any other plan or
plans of the Employer and the Employer has provided in the
Top-Heavy Provisions section of the Adoption Agreement that the
Minimum Allocation or benefit requirement applicable to
Top-Heavy plans will be met in the other plan or plans.
(e) The Minimum Allocation required (to the extent required to be
nonforfeitable under Code section 416(b)) may not be forfeited
under Code sections 411(a)(3)(B) or 411(a)(3)(D).
(f) Neither Elective Deferral Contributions nor matching
Contributions may be taken into account for the purpose of
satisfying this Minimum Allocation Requirement.
7A.3 MINIMUM VESTING SCHEDULE. For any Plan Year in which this Plan is
Top-Heavy, one of the minimum vesting schedules as elected by the
Employer in the Adoption Agreement will automatically apply to the
Plan. The minimum vesting schedule applies to all benefits within the
meaning of Code section 411(a)(7) except those attributable to
Employee Contributions, Elective Deferral Contributions, QVEC
Contributions and Rollover Contributions including benefits accrued
before the effective date of Code section 416 and benefits accrued
before the Plan became Top-Heavy. Further, no decrease in a
Participant's nonforfeitable percentage may occur in the event the
Plan's status as Top-Heavy changes for any Plan Year. However, this
Section does not apply to the account balances of any Employee who
does not have an Hour of Service after the Plan has initially become
Top-Heavy. Such Employee's account balance attributable to Employer
contributions and Forfeitures will be determined without regard to
this Section.
Article VII - Special Circumstances -94-
<PAGE> 103
7B. AMENDMENT, TERMINATION OR MERGER OF THE PLAN
7B.1 AMENDMENT OF ELECTIONS UNDER ADOPTION AGREEMENT BY EMPLOYER. The party
elected by the Employer in the Adoption Agreement shall have the right
from time to time to change the elections under its Adoption Agreement
in a manner consistent with the Plan, provided that such amendment or
modification shall be in accordance with the Board of Director's
resolution, if applicable, that describes the amendment procedure and
provided further that the written amendment or modification is signed
by the party elected by the Employer in the Adoption Agreement. The
amendment must be accepted by the Sponsoring Organization. Upon any
such change in the Elections under the Adoption Agreement, the Plan
Administrator, the Trustee and the Sponsoring Organization shall be
furnished a copy thereof. If the Plan's vesting schedule is amended,
or the Plan is amended in any way that directly or indirectly affects
the computation of the Participant's nonforfeitable percentage or if
the Plan is deemed amended by an automatic change to a top-heavy
vesting schedule, each Participant with at least 3 years of Service
with the Employer may elect, in writing, within a reasonable period
after the adoption of the amendment or change, to have the
nonforfeitable percentage computed under the Plan without regard to
such amendment or change. For Participants who do not have at least 1
Hour of Service in any Plan Year beginning after December 31, 1988,
the preceding sentence shall be applied by substituting "5 years of
Service" for "3 years of Service" where such language appears.
The period during which the election must be made by the Participant
shall begin no later than the date the Plan amendment is adopted and
end no later than after the latest of the following dates:
(a) The date which is 60 days after the day the amendment is adopted;
(b) The date which is 60 days after the day the amendment becomes
effective; or
(c) The date which is 60 days after the day the Participant is issued
written notice of the amendment by the Employer or Plan
Administrator.
Such written election by a Participant shall be made to the Plan
Administrator, who shall then give written notice to the Insurance
Company.
No amendment to the Plan shall be effective to the extent that it has
the effect of decreasing a Participant's Accrued Benefit.
Notwithstanding the preceding sentence, a Participant's Account
balance may be reduced to the extent permitted under Code section
412(c)(8). For purposes of this paragraph, a Plan amendment which has
the effect of decreasing a Participant's Account balance or
eliminating an optional form of benefit, with respect to benefits
attributable to service before the amendment, shall be treated as
reducing an Accrued Benefit. Furthermore, if the vesting schedule of a
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 the percentage computed under the Plan without regard to such
amendment.
In the event of an amendment to a money purchase pension plan
(including a target benefit plan) to convert it to a profit sharing
plan (including a thrift plan or plan with a 401(k) feature), the
resulting plan shall separately account in each affected Participant's
Account for amounts attributable to coverage under the
Article VII - Special Circumstances -95-
<PAGE> 104
money purchase plan, including future earnings on such amounts. On and
after the date of such amendment, these money purchase plan amounts
shall remain subject to the money purchase plan restrictions on
distribution.
The Employer may (1) change the choice of options in the Adoption
Agreement, (2) add overriding language in the Adoption Agreement when
such language is necessary to satisfy Code sections 415 or 416 because
of the required aggregation of multiple plans, and (3) add certain
model amendments published by the Internal Revenue Service which
specifically provide that their adoption will not cause the Plan to be
treated as individually designed. An Employer that amends the Plan for
any other reason, including a waiver of the minimum funding
requirements under Code section 412(d), will no longer participate in
this prototype plan and will be considered to have an individually
designed plan.
7B.2 AMENDMENT OF PLAN, TRUST, AND FORM OF ADOPTION AGREEMENT. The
Sponsoring Organization may amend this Plan and Trust, and the form of
the Adoption Agreement, and the Employer in adopting this Plan and the
Plan Administrator and the Trustee in accepting appointment as Plan
Administrator and as Trustee, shall be deemed to have consented to any
such amendment by executing the Adoption Agreement, provided that the
written consent of the Trustee and the Plan Administrator to any
change affecting their duties or responsibilities shall first be
obtained. Upon any such amendment by the Sponsoring Organization, the
Plan Administrator, the Employer and the Trustee shall be furnished
with a copy thereof.
7B.3 CONDITIONS OF AMENDMENT. Neither the Sponsoring Organization nor the
Employer shall make any amendment which would cause the Plan to lose
its status as a qualified plan within the meaning of Code section
401(a).
7B.4 TERMINATION OF THE PLAN. The Employer intends to continue the Plan
indefinitely for the benefit of its Employees, but reserves the right
terminate the Plan at any time by resolution of its Board of
Directors. Upon such termination, the liability of the Employer to
make Employer contributions hereunder shall terminate. The Plan shall
terminate automatically upon complete discontinuance of Employer
contributions hereunder, if the Plan is a profit sharing plan or a
thrift plan.
7B.5 FULL VESTING. Upon the termination or partial termination of the Plan,
or upon complete discontinuance of Employer contributions, the rights
of all affected Participants in and to the amounts credited to each
such Participant's Account and to any Policies on each Participant's
life shall be 100% vested and nonforfeitable. Thereupon, each
Participant shall receive a total distribution of his Participant's
Account (including any amounts in the Forfeiture Account allocated in
accordance with Section 7B.6) in accordance with the terms and
conditions of Section 2A. If the Plan terminates, the assets will be
distributed from the Trust as soon as administratively feasible.
7B.6 APPLICATION OF FORFEITURES. Upon the termination of the Plan, any
amount in the Forfeiture account which has not been applied as of such
termination to reduce the Employer contribution, or has not been
allocated as of such termination, shall be credited on a pro-rata
basis to each Participant's Account in the same manner as the last
Employer contribution made under the Plan.
Article VII - Special Circumstances -96-
<PAGE> 105
7B.7 MERGER WITH OTHER PLAN. In the case of any merger with or transfer of
assets or liabilities to any other qualified plan after
September 2, 1974:
(a) The sum of the account balances in each plan shall equal the fair
market value (determined as of the date of the merger or transfer
as if the plan had then terminated) of the entire plan assets.
(b) The assets or liabilities of each plan shall be combined to form
the assets of the plan as merged (or transferred), and each
Participant in the plan merged (or transferred) shall have an
account balance equal to the sum of the account balances the
Participant had in the plans immediately prior to the merger (or
transfer).
(c) Immediately after the merger (or transfer), each Participant in
the plan merged (or transferred) shall have an account balance
equal to the sum of the account balances the Participant had in
the plans immediately prior to the merger (or transfer).
(d) Immediately after the merger (or transfer), each Participant in
the plan merged (or transferred) shall be entitled to the same
optional benefit forms as they were entitled to immediately prior
to the merger (or transfer).
(e) In the event of a merger (or transfer) of a money purchase pension
plan (including a target benefit plan) and a profit sharing plan
(including a thrift plan or plan with a 401(k) feature), the
resulting plan shall separately account in each affected
Participant's Account for amounts attributable to coverage under
the money purchase plan, including future earnings on such amounts.
On and after the date of such merger (or transfer), these money
purchase plan amounts shall remain subject to the money purchase
plan restrictions on distribution.
7B.8 TRANSFER FROM OTHER PLANS. If elected in the Adoption Agreement, the
Employer may cause all or any of the assets held in another qualified
pension or profit sharing plan meeting the requirements of Code
section 401(a) to be transferred to the Plan pursuant to a merger or
consolidation of this Plan with such other plan or for any other
allowable purpose. Upon receipt of such assets, the Plan shall
separately account for such amounts in each affected Participant's
Account. Such transfer shall be made without regard to the Limitations
on Allocations imposed in Section 4B.
7B.9 TRANSFER TO OTHER PLANS. Upon written direction from the Employer, the
Plan shall transfer some or all of the assets held under this Plan to
another qualified pension or profit sharing plan meeting the
requirements of Code section 401(a) and sponsored by the Employer.
7B.10 APPROVAL BY THE INTERNAL REVENUE SERVICE. Notwithstanding any other
provisions of this Plan, the Employer's adoption of this Plan is
subject to the condition precedent that the Employer's Plan shall be
approved and qualified by the Internal Revenue Service as meeting the
requirements of Code section 401(a) and, if applicable, that the Trust
established hereunder shall be entitled to exemption under the
provisions of Code section 501(a). In the event the Plan initially
fails to qualify and the Internal Revenue Service issues a final
ruling that the Employer's Plan or Trust fails to so qualify as of the
Effective Date, all liability of the Employer to make further Employer
contributions hereunder shall cease. The Insurance Company, Plan
Administrator, Trustee and any other Named Fiduciary shall be notified
immediately by the Employer, in writing, of such
Article VII - Special Circumstances -97-
<PAGE> 106
failure to qualify. Upon such notification, the value of the
Participants' Accounts, including the then value of any Life
Insurance Policies, shall be distributed in cash subject to the
terms and conditions of Section 5B. That portion of such
distribution which is attributable to Participant's Employee
Contributions, if any, shall be paid to the Participant, and the
balance of such distribution shall be paid to the Employer. Upon the
death of any Participant prior to the actual surrender of a Life
Insurance Policy or Policies on his life, the death benefit shall be
payable to the Participant's Beneficiary.
If the Employer's Plan fails to attain or retain qualification, such
Plan will no longer participate in this prototype plan and will be
considered an individually designed plan.
7B.11 SUBSEQUENT UNFAVORABLE DETERMINATION. If the Employer is notified
subsequent to initial favorable qualification that the Plan is no
longer qualified within the meaning of Code section 401(a) or, if
applicable, that the Trust is no longer entitled to exemption under
the provisions of Code section 501(a), and if the Employer shall
fail within a reasonable time to make any necessary changes in order
that the Plan shall so qualify, the Participants' Accounts,
including any Life Insurance Policies or the values thereof, shall
be fully vested and nonforfeitable and shall be disposed of in the
manner set forth in Sections 7B.5 and 7B.6 above.
7C. SUBSTITUTION OF PLANS
7C.1 SUBSTITUTION OF PLANS. Subject to the provisions of Section 7B.7,
the Employer may substitute an individually designed plan or a
master or another prototype plan for this Plan without terminating
this Plan as embodied herein, and this shall be deemed to constitute
an amendment and restatement in its entirety of this Plan as
heretofore adopted by the Employer; provided, however that the
Employer shall have certified to the Insurance Company and the
Trustee, if applicable, that this Plan is being continued on a
restated basis which meets the requirements of Code section 401(a)
and ERISA.
Any such changes shall be subject to the provisions of Sections 7B.1
and 7B.2 of the Plan.
7C.2 TRANSFER OF ASSETS. Upon 90 days' written notification from the
Employer and the Trustee (unless the Insurance Company shall accept
a shorter period of notification) that a different plan meeting the
requirements set forth in Section 7C.1 above has been executed and
entered into by the Plan Administrator and the Employer, and after
the Insurance Company and the Trustee have been furnished the
Employer's certification in writing that the Employer intends to
continue the Plan as a qualified plan under Code section 401(a) and
ERISA, the Insurance Company shall transfer the value of all
Participants' Accounts under the Annuity Contract to the Trustee or
such person or persons as may be entitled to receive the same, in
accordance with the terms of the Annuity Contract. The Trustee shall
likewise make a similar transfer, including all Life Insurance
Policies, or the values thereof, to such person or persons as may be
entitled to receive same. The Insurance Company and the Trustee may
rely fully on the representations or directions of the Employer with
respect to any such transfer and shall be fully protected and
discharged with respect to any such transfer made in accordance with
such representations, instructions, or directions.
Article VII - Special Circumstances -98-
<PAGE> 107
7C.3 SUBSTITUTION FOR PRE-EXISTING MASTER OR PROTOTYPE PLAN. This Plan is
designed:
(a) For adoption by an Employer not previously covered under a master
or prototype plan sponsored by Connecticut General Life Insurance
Company; or
(b) For adoption by an Employer in substitution for a pre-existing
master or prototype plan sponsored by Connecticut General Life
Insurance Company.
If this Plan is adopted in substitution for such a pre-existing master
or prototype plan, it shall be deemed to amend the Employer's prior
Plan in its entirety effective as of the date specified in the
Employer's Adoption Agreement. The Employer's Plan as so amended shall
continue in full force and effect and no termination thereof shall be
deemed to have occurred.
7C.4 PARTIAL SUBSTITUTION OR PARTIAL TRANSFER OF THE PLAN OR ASSETS. In the
event this Plan is adopted as the result of a partial substitution or
partial transfer of the Plan or the assets under the prior Plan as a
result of a merger, spinoff, consolidation or any other allowable
purpose, the Plan and all transactions allowable under it are subject
to the rules established by the Employer to address the orderly
transition of the Plan or assets.
Article VII - Special Circumstances -99-
<PAGE> 108
ARTICLE VIII - MISCELLANEOUS
8.1 NONREVERSION. This Plan has been adopted by the Employer for the
exclusive benefit of the Participants and their Beneficiaries. Except
as otherwise provided in Section 7B.10 and Section 8.6, under no
circumstances shall any funds contributed hereunder at any time revert
to or be used by the Employer, nor shall any such funds or assets of
any kind be used other than for the benefit of the Participants or
their Beneficiaries.
8.2 GENDER AND NUMBER. When necessary to the meaning hereof, and except
when otherwise indicated by the context, either the masculine or the
neuter pronoun shall be deemed to include the masculine, the
feminine, and the neuter, and the singular shall be deemed to include
the plural.
8.3 REFERENCE TO THE INTERNAL REVENUE CODE AND ERISA. Any reference
herein to any section of the Internal Revenue Code, ERISA, or to any
other statute or law shall be deemed to include any successor law of
similar import.
8.4 GOVERNING LAW. The Plan and Trust, if applicable, shall be governed
and construed in accordance with the laws of the state where the
Employer or Trustee has its principal office in the United States.
8.5 COMPLIANCE WITH THE INTERNAL REVENUE CODE AND ERISA. This Plan is
intended to comply with all requirements for qualification under the
Internal Revenue Code and ERISA, and if any provision hereof is
subject to more than one interpretation or any term used herein is
subject to more than one construction, such ambiguity shall be
resolved in favor of that interpretation or construction which is
consistent with the Plan being so qualified. If any provision of the
Plan is held invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provisions, and this Plan
shall be construed and enforced as if such provision had not been
included.
8.6 CONTRIBUTION RECAPTURE. Notwithstanding any other provisions of this
Plan, (1) in the case of a contribution which is made by an Employer
by a mistake of fact, Section 8.1 shall not prohibit the return of
such contribution to the Employer within one year after the payment of
the contribution, and (2) if a contribution is conditioned upon the
deductibility of the contribution under Code section 404, then, to the
extent the deduction is disallowed, Section 8.1 shall not prohibit the
return to the Employer of such contribution (to the extent disallowed)
within one year after the disallowance of the deduction. The amount
which may be returned to the Employer is the excess of (1) the amount
contributed over (2) the amount that would have been contributed had
there not occurred a mistake of fact or a mistake in determining the
deduction. Earnings attributable to the excess contribution may not be
returned to the Employer, but losses attributable thereto must reduce
the amount to be so returned. Furthermore, if the withdrawal of the
amount attributable to the mistaken contribution would cause the
balance of any Participant's Account to be reduced to less than the
balance which would have been in the Participant's Account had the
mistaken amount not been contributed, then the amount to be returned
to the Employer would have to be limited so as to avoid such
reduction.
Article VIII - Miscellaneous -100-
<PAGE> 109
In the event that the Commissioner of the Internal Revenue determines that
the Plan is not initially qualified under the Internal Revenue Code, any
contribution made incident to that initial qualification by the Employer
must be returned to the Employer within one year after the date the initial
qualification is denied, but only if the application for the qualification
is made by the time prescribed by law for filing the Employer's return for
the taxable year in which the Plan is adopted, or such later date as the
Secretary of the Treasury may prescribe.
Notwithstanding the above, an excess or returned contribution shall not be
returned to the Employer if the Employer has taken Davis-Bacon Act credit
for such contribution. These excess or mistaken contributions shall be
paid to the Employee for whom such credit is taken.
Article VIII - Miscellaneous -101-
<PAGE> 1
EXHIBIT 5.1
July 1, 1998
Board of Directors
Pioneer Companies, Inc.
700 Louisiana, Suite 4300
Houston, Texas 77002
Gentlemen:
We have acted as counsel to Pioneer Companies, Inc. (the "Company")
in connection with the Company's Registration Statement on Form S-8 (the
"Registration Statement") relating to the registration under the Securities Act
of 1933, as amended, of the issuance of 250,000 shares (the "Shares") of the
Company's Class A common stock, par value $0.01 per share, pursuant to the
Pioneer Companies Savings Plan for Salaried Employees, the Pioneer Companies
Savings Plan for Henderson Bargaining Unit Employees, the Pioneer Companies
Savings Plan for Tacoma Bargaining Unit Employees, the Kemwater North America
Savings Plan, and the All Pure Savings Plan (the "Plans").
In connection therewith, we have examined copies of such statutes,
regulations, corporate records and documents, certificates of public and
corporate officials and other agreements, contracts, documents and instruments
as we have deemed necessary as a basis for the opinion hereinafter expressed. In
such examination, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals and the conformity
with the original documents of all documents submitted to us as copies. We have
also relied, to the extent we deem such reliance proper, upon information
supplied by officers and employees of the Company with respect to various
factual matters material to our opinion.
Based upon the foregoing and having due regard for such legal
considerations as we deem relevant, we are of the opinion that the Shares have
been duly authorized, and that such Shares will, when issued in accordance with
the terms of the Plans, be legally issued, fully paid and nonassessable.
We hereby consent to the use of this opinion as an exhibit to
the Registration Statement.
Very truly yours,
/s/ ANDREWS & KURTH L.L.P.
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Pioneer Companies, Inc. on Form S-8 of our report dated February 17, 1998,
appearing in the Annual Report on Form 10-K of Pioneer Companies, Inc. for the
year ended December 31, 1997.
/s/ DELOITTE & TOUCHE LLP
Houston, Texas
June 30, 1998
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Pioneer Companies, Inc. on Form S-8 of our report dated June 26, 1995 with
respect to the financial statements and schedule of Pioneer Americas, Inc. (the
"Predecessor Company") included in the Pioneer Companies, Inc. Annual Report
(Form 10-K) for the year ended December 31, 1997 filed with the Securities and
Exchange Commission.
/s/ ERNST & YOUNG LLP
Houston, Texas
June 30, 1998
