<PAGE>
As filed with the Securities and Exchange Commission on May 2, 1996.
Registration No. 33-
===========================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
RESOURCE AMERICA, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
1521 LOCUST STREET, PHILADELPHIA, PA 19102
--------------------------------------------------
(Address of Principal Executive Offices)(Zip Code)
DELAWARE 72-0654145
- --------------- ---------------
(State or other jurisdiction (I.R.S.Employer
of incorporation) Identification No.)
RESOURCE AMERICA, INC. INVESTMENT SAVINGS PLAN
(Full title of the plan)
Michael L. Staines
Senior Vice President
Resource America, Inc.
1521 Locust Street
Philadelphia, PA 19102
(Name and address of agent for service)
(215) 546-5005
(Telephone number, including area code, of agent for service)
Copy to:
J. Baur Whittlesey, Esquire
Ledgewood Law Firm, P.C.
1521 Locust Street - Eighth Floor
Philadelphia, PA 19102
(215) 731-9450
<PAGE>
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price per offering registration
registered registered unit(2) price(2) fee (3)
- -------------------------------------------------------------------------------
Class A Common
stock, par value
$.01 per
share 10,776 shares $ 48.75 $525,330 $ 181.24
Interests in
the Plan (1) $ $ $
-------- --------- -------- ---------
- -------------------------------------------------------------------------------
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, as
amended, this Registration Statement also covers an indeterminate amount
of interests to be offered or sold pursuant to the employee benefit plan
described herein.
(2) Estimated solely for purposes of determining the registration fee in
accordance with Rule 457(h) under the Securities Act of 1933 on the basis
of $48.75 per share, the average of the high and low prices of the
Registrant's Common Stock as reported on the Nasdaq National Market on
April 26, 1996.
(3) Pursuant to Rule 457(h)(2), no separate fee is required with respect to
plan interests.
<PAGE>
PART I
INFORMATION REQUIRED IN SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from this Registration Statement in accordance with the
Introductory Note to Part I of Form S-8.
Item 2. Registrant Information and Employee Plan Annual Information.
Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from this Registration Statement in accordance with the
Introductory Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents of Resource America, Inc. (the "REGISTRANT") and
the Resource America, Inc. Investment Savings Plan (the "PLAN") filed or to be
filed with the Securities and Exchange Commission (the "COMMISSION") are
incorporated by reference in this Registration Statement as of their respective
dates:
1. The Registrant's Annual Report on Form 10-KSB for the fiscal year
ended September 30, 1995 containing the audited consolidated financial
statements of the Registrant for the fiscal years ended September 30, 1994 and
1995.
2. The Registrant's Quarterly Report on Form 10-QSB for the quarter
ended December 31, 1995.
3. The description of the Common Stock of the Registrant (formerly called
Resource Exploration, Inc.) contained the Registrant's Registration Statement
on Form 8-A, Commission number 0-4408, pursuant to Section 12(g) of the
Securities Exchange Act of 1934, as amended, including any amendment or report
filed for the purpose of updating such description.
All documents subsequently filed by the Registrant pursuant to Section
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-
effective amendment to this Registration Statement which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold shall be deemed to be incorporated by reference herein and to
be part hereof from the date of filing of such documents.
Item 4. Description of Securities.
Not applicable.
<PAGE>
Item 5. Interests of Named Experts and Counsel.
The validity of the Registrant's Common Stock being registered hereby is
being passed upon by Ledgewood Law Firm, P.C. ("LEDGEWOOD"), counsel to the
Registrant. Edward E. Cohen, of counsel to Ledgewood, is a principal
shareholder of the Registrant as well as President and a director.
Item 6. Indemnification of Directors and Officers.
Pursuant to the bylaws of the Registrant, the Registrant is required to
indemnify any director or officer who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative by reason
of the fact that he is or was a director or officer, as the case may be, of the
Registrant.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The following exhibits are filed herewith:
Exhibit
No. Document
------- --------
4 Resource America, Inc. Investment Savings Plan.
5 Opinion of Ledgewood Law Firm, P.C. as to the legality of
securities being registered (including consent).
24(a) Consent of Grant Thornton LLP.
24(b) Consent of Ledgewood Law Firm, P.C. (included in Exhibit 5).
25 Power of Attorney (included as part of signature pages to
this registration statement).
The Registrant hereby undertakes and affirms that it has submitted the
Plan and any amendment thereto to the Internal Revenue Service ("IRS") in a
timely manner and has made all changes required by the IRS in order to qualify
the Plan.
<PAGE>
Item 9. Undertakings.
Undertakings required by Item 512(a) of Regulation S-K
- ------------------------------------------------------
The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement;
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in information set forth in the
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 (i) and (ii) do not apply if the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Registrant pursuant to Section 13 or
15(d) of the Exchange Act that are incorporated by reference in the
Registration Statement.
(2) that, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(3) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
Undertakings required by item 512(b) of Regulation S-K
- ------------------------------------------------------
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein and the offering of such securities
at that time shall be deemed to the initial BONA FIDE offering thereof.
Undertakings required by Item 512(h) of Regulation S-K
- ------------------------------------------------------
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant, the Registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of an action, suit or
proceeding) is asserted by such director, offering or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Philadelphia, Commonwealth of
Pennsylvania, on April 30, 1996.
RESOURCE AMERICA, INC.
By: /S/ Edward E. Cohen
-------------------------------------
Edward E. Cohen
Chairperson of the Board
(Chief Executive Officer)
THE PLAN. Pursuant to the requirements of the Securities Act of 1933, the
Plan Committee has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
Philadelphia, Commonwealth of Pennsylvania, on April 30, 1996.
RESOURCE AMERICA, INC. INVESTMENT
SAVINGS PLAN
By: /S/ Edward E. Cohen
-------------------------------------
Edward E. Cohen, Trustee of the Plan
POWER OF ATTORNEY
Each person whose signature appears below in so signing also makes,
constitutes and appoints Edward E. Cohen and Michael L. Staines, and each of
them acting above, his or her true and lawful attorney-in-fact, with full
power of substitution, for him or her in any and all capacities, to execute and
cause to be filed with the Securities and Exchange Commission any and all
amendments and post-effective amendments to this Registration Statement, with
exhibits thereto and other documents in connection therewith, and hereby
ratifies and confirms all that said attorney-in-fact or said attorney-in-
fact's substitute or substitutes may do or cause to be done by virtue hereof.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
/s/ Edward E. Cohen Date: April 30, 1996
- --------------------------------------------
EDWARD E. COHEN, Chairman of the Board
and President
/s/ Michael L. Staines Date: April 30, 1996
- --------------------------------------------
MICHAEL L. STAINES, Senior Vice President,
Secretary and a Director
/s/ Carlos C. Campbell Date: April 30, 1996
- --------------------------------------------
CARLOS C. CAMPBELL, Director
/s/ John R. Hart Date: April 30, 1996
- --------------------------------------------
JOHN R. HART, Director
/s/ Andrew M. Lubin Date: April 30, 1996
- --------------------------------------------
ANDREW M. LUBIN, Director
/s/ Alan D. Schreiber, M.D. Date: April 30, 1996
- --------------------------------------------
ALAN D. SCHREIBER, M.D., Director
/s/ John S. White Date: April 30, 1996
- --------------------------------------------
JOHN S. WHITE, Director
/s/ Nancy J. McGurk Date: April 30, 1996
- --------------------------------------------
NANCY J. MCGURK, Vice President -
Finance and Treasurer (Chief Accounting
Officer)
<PAGE>
EXHIBIT INDEX
Exhibit No. Document Page
- ----------- ------------------------------------------------- ------
4 Resource America, Inc. Investment Savings Plan. 8
5 Opinion of Ledgewood Law Firm, P.C. as to the legality 143
of securities being registered (including consent).
24(a) Consent of Grant Thornton LLP 147
24(b) Consent of Ledgewood Law Firm, P.C. (included in
Exhibit 5).
25 Power of Attorney (included as part of signature pages
to this registration statement).
<PAGE>
I N D E X
ARTICLE I - DEFINITIONS PAGE
1.01 "Account" ---------------------------------- 1
1.02 "Additional Employer Contributions --------- 1
1.03 "Affiliated Employer" ---------------------- 2
1.04 "Age" -------------------------------------- 2
1.05 "Allocation Date --------------------------- 2
1.06 "Anniversary Date" ------------------------- 2
1.07 "Annual Addition" -------------------------- 2
1.08 "Annual Computation Period" ---------------- 3
1.09 "Beneficiary" ------------------------------ 3
1.10 "Board of Directors" ----------------------- 3
1.11 "Break in Service -------------------------- 3
1.12 "Code" ------------------------------------- 3
1.13 "Committee" -------------------------------- 3
1.14 "Company Stock" ---------------------------- 3
1.15 "Compensation" ----------------------------- 3
1.16 "Date of Employment" ----------------------- 4
1.17 "Death Benefit" ---------------------------- 5
1.18 "Domestic Relations Order" ----------------- 5
1.19 "Effective Date" --------------------------- 6
1.20 "Eligibility Date" ------------------------- 6
1.21 "Employee" --------------------------------- 6
1.22 "Employer" --------------------------------- 6
1.23 "ERISA" ------------------------------------ 6
1.24 "Hour of Service" -------------------------- 7
1.25 "Insurance Policy" ------------------------- 8
1.26 "Investment Fund" -------------------------- 9
1.27 "Investment Manager" ----------------------- 9
1.28 "Named Fiduciary" -------------------------- 9
1.29 "Normal Retirement Age" -------------------- 9
1.30 "Participant ------------------------------- 9
1.31 "Plan" ------------------------------------- 9
1.32 "Plan Administrator" ----------------------- 9
1.33 "Plan Year" -------------------------------- 9
1.34 "Regulation" ------------------------------ 10
1.35 "Section 415 Compensation ----------------- 10
1.36 "Trust" ----------------------------------- 11
1.37 "Trustees" -------------------------------- 11
1.38 "Valuation Date" -------------------------- 11
1.39 "Year of Service" ------------------------- 12
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<PAGE>
ARTICLE II - CREATION AND PURPOSE OF PLAN
2.01 Creation --------------------------------- 13
2.02 Purpose ---------------------------------- 13
2.03 Exclusive Benefit of Employees ----------- 13
2.04 Discretionary Powers of Trustees and
Plan Administrator ---------------------- 14
ARTICLE III - ELIGIBILITY FOR PARTICIPATION
3.01 Conditions of Eligibility ----------------- 15
3.02 Certification by Plan Administrator
of Employee Status ----------------------- 16
3.03 Effect of Termination of Eligibility ------ 17
3.04 Omission of Eligible Employee ------------- 17
3.05 Inclusion of Ineligible Employee ---------- 18
ARTICLE IV - CONTRIBUTIONS BY EMPLOYER
4.01 Determination of Amount ------------------ 19
4.02 Time Making for Contributions ------------- 19
4.03 Plan Expenses ---------------------------- 19
4.04 Future Employer Liability ----------------- 20
4.05 Contributions Not Recoverable ------------- 20
ARTICLE V - ALLOCATIONS TO PARTICIPANTS' ACCOUNTS
5.01 Allocation of Employer Contributions
and Forfeitures --------------------------- 21
5.02 Allocation of Fair Market Value
and Trust Earnings ------------------------ 22
5.03 Allocation at Termination ------------------ 22
5.04 Allocation and Valuation Dates;
Current Account Balance ------------------- 23
5.05 Limitation on Allocation and
Suspense Account ------------------------- 23
5.06 Notice to Participant of Account -
Time Within Which objections Must
be Filed --------------------------------- 29
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<PAGE>
ARTICLE VI - RETIREMENT BENEFITS
6.01 Retirement Benefits ------------------------ 31
6.02 Deferred Normal Retirement Benefit -------- 31
6.03 Mandatory Distributions ------------------- 31
6.04 Distribution of Benefits ------------------ 35
ARTICLE VII - DEATH BENEFITS
7.01 Distribution of Account --------------------- 37
7.02 Death Benefits from Policies ---------------- 37
7.03 Proof of Death ------------------------------ 37
7.04 Death Benefit for Spouses ------------------- 38
7.05 Amount of Death Benefit Without
Full Insurance ---------------------------- 39
ARTICLE VIII - DISABILITY BENEFITS
8.01 Eligibility for Disability Benefits --------- 40
8.02 Amount of Disability Benefits --------------- 40
8.03 Recover from Disability --------------------- 41
ARTICLE IX - TERMINATION OF EMPLOYMENT
9.01 Limitation on Benefits Upon Termination ----- 42
9.02 Vested Interest in Portion Applicable
to Employer's Contribution ----------------- 42
9.03 Authorized Absence -------------------------- 42
9.04 Distribution of Account --------------------- 43
9.05 Disposition of Insurance Policies ---------- 44
9.06 Date of Payment of Benefits ---------------- 45
ARTICLE X - REHIRING TERMINATED PARTICIPANT
10.01 Effect of Rehiring -------------------------- 46
10.02 Date of Participation ---------------------- 46
10.03 Effect of Break in Service on
Credited Service --------------------------- 46
10.04 Restoration of Participant's Account ------- 47
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<PAGE>
ARTICLE XI - INVESTMENT AND VALUATION
11.01 Investment Fund ----------------------------- 49
11.02 Insurance Policies -------------------------- 50
11.03 Participants' Contributions ----------------- 51
11.04 Investment Election ------------------------- 51
ARTICLE XII - EMPLOYEE AND MATCHING CONTRIBUTIONS
12.01 Amount -------------------------------------- 53
12.02 Maximum Contribution Percentage ------------- 54
12.03 Transfers from Other Qualified Plans -------- 60
ARTICLE XIII - ALIENATION
13.01 Exclusive Benefit --------------------------- 63
13.02 Domestic Relations Order ------------------- 63
ARTICLE XIV - AMENDMENT AND TERMINATION
14.01 Amendment ----------------------------------- 65
14.02 Effect of Merger, Consolidation or
Transfer of Assets ------------------------- 66
14.03 Termination of the Plan --------------------- 66
14.04 Distribution Upon Termination --------------- 67
14.05 Contingency - Qualification by IRS ---------- 67
14.06 Restrictive Amendment ----------------------- 69
ARTICLE XV - PROTECTION OF THIRD PARTIES --------------------- 70
ARTICLE XVI - NAMED FIDUCIARIES AND ALLOCATION OF
RESPONSIBILITIES
16.01 Named Fiduciaries --------------------------- 71
16.02 Allocation of Responsibilities
Among Named Fiduciaries -------------------- 72
16.03 No Joint Fiduciary Responsibilities --------- 73
16.04 Advisor to Named Fiduciary ------------------ 74
-iv-
<PAGE>
ARTICLE XVII - ADMINISTRATION OF PLAN
17.01 Appointment of Committee -------------------- 75
17.02 Members of Committee ------------------------ 75
17.03 Size of Committee --------------------------- 75
17.04 Resignation of Committee Members -
Reliance by Trustees ----------------------- 75
17.05 Powers and Duties of Committee ------------- 76
17.06 Books and Records --------------------------- 76
17.07 Indemnification for Liability -------------- 77
17.08 Annual Valuations --------------------------- 77
ARTICLE XVIII - PARTICIPANTS' PROCEDURE FOR CLAIMS
18.01 Claims Procedure ---------------------------- 78
18.02 Claims Review Procedure --------------------- 78
ARTICLE XIX - TOP-HEAVY PROVISIONS
19.01 General ------------------------------------ 80
19.02 Definitions; Special Rules ----------------- 80
19.03 Minimum Benefits ---------------------------- 88
19.04 Compensation Limitation --------------------- 89
19.05 Vesting Requirements ------------------------ 90
19.06 Aggregate Limit on Benefits and
Contributions for Key Employees ------------ 91
ARTICLE XX - INTENTIONALLY OMITTED --------------------------- 93
ARTICLE XXI - QUALIFIED CASH OR DEFERRED ARRANGEMENT
21.01 General ------------------------------------- 94
21.02 Definitions --------------------------------- 94
21.03 Operation of the Arrangement ---------------- 101
21.04 Nonforfeiture ------------------------------- 102
21.05 Distribution -------------------------------- 103
21.06 Limitations --------------------------------- 106
21.07 Effective Date ------------------------------ 111
-v-
<PAGE>
ARTICLE XXII - MISCELLANEOUS
22.01 Investment Manager -------------------------- 112
22.02 Participants' Rights ------------------------ 112
22.03 Gender and Number --------------------------- 113
22.04 Beneficiary Disability ---------------------- 113
22.05 Legal Actions ------------------------------- 113
22.06 Construction of Plan ------------------------ 114
-vi-
<PAGE>
RESOURCE AMERICA, INC.
INVESTMENT SAVINGS PLAN
This AMENDED AND RESTATED INVESTMENT SAVINGS PLAN is hereby adopted on
the 12th day of September 1991, by RESOURCE AMERICA, INC. in conjunction with
that certain Trust Agreement between the employer and FRANCIS BAGNELL, as
Trustee, executed of even date herewith.
Article I
DEFINITIONS
As used in this Plan and in the Trust Agreement:
1.01 "ACCOUNT" means the combined individual account of each Participant
in the Plan, which shall consist of (i) his allocated share of Additional
Employer Contributions, forfeitures and earnings of the Fund; (ii) Matching
Contributions made pursuant to Section 12.01, forfeitures and Fund Earnings
thereon; (iii) transfers from other plans (including rollovers) pursuant to
Section 12.03 and the Fund earnings thereon; and (iv) any contributions made
pursuant to Article XXI and the Fund earnings thereon. The amounts referred to
in clauses (i), (ii), (iii) and (iv) shall be accounted for in separate
subaccounts which shall be referred to, respectively as the "REGULAR ACCOUNT",
"MATCHING CONTRIBUTION ACCOUNT", "ROLLOVER ACCOUNT" and
"ARRANGEMENT ACCOUNT".
1.02 "ADDITIONAL EMPLOYER CONTRIBUTIONS" means discretionary Employer
contributions made pursuant to Section 4.01.
<PAGE>
1.03 "AFFILIATED EMPLOYER" means the Employer and any corporation which
is a member of a controlled group of corporations (as defined in Section 414(b)
of the Code) which includes the Employer; any trade or business (whether or not
incorporated) which is under common control (as defined in Section 414(c) of
the Code) with the Employer; any organization (whether or not incorporated)
which is a member of an affiliated service group (as defined in Section 414(m)
of the Code) which includes the Employer, and any other entity required to be
aggregated with the Employer pursuant to regulations under Section 414(o) of
the Code.
1.04 "AGE" means an Employee's actual age.
1.05 "ALLOCATION DATE" means the last day of each quarter during the Plan
Year, except the Allocation Date for Additional Company Contributions and all
forfeitures shall be the last day of the Plan Year.
1.06 "ANNIVERSARY DATE" means February lst in each year subsequent to the
Effective Date of the Plan.
1.07 "ANNUAL ADDITION" means, for Plan Year beginning after December 31,
1986, the sum of the following items for any Plan Year:
(1) aggregate Employer contributions on behalf of a Participant to
this Plan and any other defined contribution plan;
(2) forfeitures reallocated to such Participant's Regular Account in
this Plan and to his account in any other defined contribution
plan;
-2-
<PAGE>
(3) the amount contributed by such Participant to this Plan and any
other defined contribution plan.
1.08 "ANNUAL COMPUTATION PERIOD" means the twelve consecutive month
period commencing with the Employee's Date of Employment and each anniversary
thereof.
1.09 "BENEFICIARY" means the person designated by a Participant, on such
forms as may be provided by the Committee, to receive the Death Benefit. In
the absence of designation, "Beneficiary" means the Participant's surviving
spouse, or if none, then his issue who survive him, per stirpes, and if there
is no such issue, then the personal representative of his estate.
1.10 "BOARD OF DIRECTORS" means the present and any succeeding Board of
Directors of the Employer.
1.11 "BREAK IN SERVICE" means the failure of a Participant to complete at
least 500 Hours of Service during a Plan Year.
1.12 "CODE" means the Internal Revenue Code of 1986, as amended.
1.13 "COMMITTEE" means the Retirement Plan Committee appointed by the
Board of Directors to administer the Plan pursuant to Article XVII hereof.
1.14 "COMPANY STOCK" means the common stock of the Employer.
1.15 "COMPENSATION" means the Section 415 Compensation paid to the
Participant during the Plan Year, subject to the modifications contained in
this Section.
-3-
<PAGE>
Compensation shall include any amount which is contributed by the
Employee pursuant to a salary reduction agreement and which is not includible
in the gross income of the Employee under Section 125, 402(a)(8), 402(h) or
403(b) of the Code.
Compensation in excess of $200,000 (or such higher amount as may be
prescribed by the Secretary of the Treasury) shall not be taken into account.
In applying the $200,000 limitation to an Employee who is either a 5% owner (as
defined in Sections 19.02(c)(3) & (d)(2)) or one of the ten highly compensated
Employees paid the greatest Section 415 Compensation during the Plan Year, his
Compensation shall include the Compensation of his spouse and lineal
descendants who have not attained age 19 before the close of the Plan Year.
1.16 "DATE OF EMPLOYMENT" means the first date on which an Employee
completes an Hour of Service. In the case of an Employee who incurs a Break in
Service as a result of which prior Years of Service are not counted for vesting
purposes (as provided in Section 10.03 thereof), if the Employee resumes work
for the Employer his Date of Employment shall be the first date after such
Break in Service on which he completes an Hour of Service. If an Employee
incurs a Break in Service but is entitled to vesting credit for his prior Years
of Service pursuant to Section 10.03 hereof, then upon his completion of an
Hour of Service for the Employer subsequent to such Break in Service, his "Date
of Employment" shall revert back to the initial Date of Employment.
-4-
<PAGE>
1.17 "DEATH BENEFIT" means the amount payable under this Plan by reason
of the death of a Participant.
1.18 "DOMESTIC RELATIONS ORDER" means any judgment, decree or order
(including approval of a property settlement agreement) made pursuant to a
state domestic relations or community property law, which relates to the
provision of child support, alimony payments or property rights to an Alternate
Payee; "QUALIFIED DOMESTIC RELATIONS ORDER" means a Domestic Relations Order
which:
(a) assigns to, creates or recognizes the existence of an Alternate
Payee's right to receive all or a portion of the benefits payable to a
Participant hereunder;
(b) specifies (1) the name and last known mailing address (if any) of
the Participant and the name and mailing address of each Alternate Payee,
(2) the amount or percentage of the Participant's benefits to be paid to each
Alternate Payee, or the manner in which such amount is to be determined,
(3) the number of payments or the period to which the order applies and (4) the
plans to which the order applies; and
(c) does not require (1) any form or type of benefit or any other
option not available under this Plan, (2) the Plan to provide benefits greater
in value than the Actuarial Equivalent of the benefits otherwise provided
hereunder and (3) any payment which would be in conflict with a payment
required to be made to another Alternate Payee under the terms of a prior
Qualified Domestic Relations Order; and
-5-
<PAGE>
"ALTERNATE PAYEE" means any spouse, former spouse, child or other dependent of
a Participant who is recognized by a Domestic Relations Order as having a right
to receive all or a portion of a Participant's benefits under the Plan.
1.19 "EFFECTIVE DATE" means May 1, 1986; and "EFFECTIVE DATE OF THIS
AMENDED AND RESTATED PLAN" means February 1, 1989, except where otherwise
stated.
1.20 "ELIGIBILITY DATE" means the date on which an Employee first meets
the requirements to participate in the Plan.
1.21 "EMPLOYEE" means any person who is employed by the Employer or
Affiliated Employer, and any person considered an Employee within the meaning
of Section 414(n) of the Code.
1.22 "EMPLOYER" means:
(a) Resource America, Inc.
(b) Any other affiliated or subsidiary company which is designated
as an "Employer" by the Board of Directors and which has elected to be included
in this Plan and which qualifies the Plan with the Internal Revenue Service
with respect to its own Employees.
(c) Any successor of the Employer which adopts this Plan.
1.23 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
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<PAGE>
1.24 "HOUR OF SERVICE" means:
(a) Each hour for which an Employee is paid, or entitled to payment,
for the performance of duties for the Employer during the applicable
computation period.
(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; provided, however, that not more
than 501 Hours of Service are to be credited under this paragraph (b) to an
Employee on account of any single continuous period during which the Employee
performs no duties (whether or not such period occurs in a single computation
period). For purposes of this paragraph (b), 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 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 paid Employees or are on behalf of a group
of employees in the aggregate.
(c) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The same hours of
service shall not be credited under
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<PAGE>
paragraph (a) or paragraph (b), as the case may be, and under this paragraph
(c).
(d) Each hour an Employee normally would have been credited (if
normal hours cannot be credited, then eight hours for each day) which the
Employee is absent from work due to (1) the Participant's pregnancy, (2) the
birth of the Participant's child, (3) the placement with, or adoption by, the
Participant of a child or (4) child care for a period beginning immediately
after such birth, placement or adoption. Not more than 501 Hours of Service
shall be credited to a Participant in any Annual Computation Period due to
absence for one or more of the reasons specified in this subparagraph, and
Service shall only be credited for such purposes in the Annual Computation
Period in which such absence begins, only if necessary to prevent a Break in
Service, otherwise such hours shall be credited in the immediately succeeding
Annual Computation Period.
(e) Hours of Service will also be credited for employment with an
Affiliated Employer.
(f) Hours of Service shall be computed and credited in accordance
with paragraphs (b), (c) and (f) of Section 2530.200(b)-2 under the
Department of Labor Regulations.
1.25 "INSURANCE POLICY" means the life insurance contract issued by a
legal reserve life insurance company; "INSURER" means any legal reserve life
insurance company selected by the Committee to provide benefits hereunder; and
"NET CASH VALUE" means the cash value of an Insurance Policy less any
indebtedness on the policy owed to the Insurer.
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1.26 "INVESTMENT FUND" or "FUND" means the fund established by the
Employer in accordance with this Plan to provide the benefits for the
Participants.
1.27 "INVESTMENT MANAGER" means the individual or company authorized to
manage the Investment Fund in accordance with Section 22.01 which, unless
otherwise provided by the Board of Directors, shall be the Employer.
1.28 "NAMED FIDUCIARY" means any person so designated in Article XVI
hereof, as required by Section 402 of ERISA.
1.29 "NORMAL RETIREMENT AGE" means the Age at which a Participant's right
to receive retirement benefits under the Plan shall become non-forfeitable
notwithstanding any vesting schedule contained in the Plan, which Age shall be
65; and "NORMAL RETIREMENT DATE" means the first day of the next calendar month
after a Participant reaches his Normal Retirement Age, at which time he shall
be entitled to commence receiving benefits in accordance with Section 6.04 of
the Plan.
1.30 "PARTICIPANT" means an Employee who has satisfied the eligibility
requirements to participate in the benefits of the Plan, as provided in Article
III.
1.31 "PLAN" means this investment savings plan, which shall be known as
the Resource America, Inc. Investment Savings Plan.
1.32 "PLAN ADMINISTRATOR" means the persons designated as the Committee,
if any; otherwise, the Employer.
1.33 "PLAN YEAR" means a period of twelve (12) months ending on January
31st. The Plan Year shall also be the
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limitation year for purposes of Section 415 of the Code and the limitation in
Section 5.05 hereof.
1.34 "REGULATION" means the Income Tax Regulations promulgated by the
Secretary of the Treasury or his delegate, as amended from time to time.
1.35 "SECTION 415 COMPENSATION" means a Participant's wages, salaries,
fees for professional service and other amounts received for personal services
actually rendered in the course of employment (including but not limited to,
commissions paid salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums, tips and bonuses).
Section 415 Compensation shall not include:
(i) Contributions made by the employer to a plan of 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 Section 408(k) of the Code are not considered as
compensation for the taxable year in which contributed to the extent such
contributions are deductible by the Employee under Section 219(b)(2) of the
Code. Additionally, any distributions from a plan of deferred compensation are
not considered as compensation hereunder, regardless of whether such amounts
are includable in the gross income of the Employee when distributed. However,
any amounts
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received by an Employee pursuant to an unfunded non-qualified plan may be
considered as compensation hereunder in the year such amounts are includable
in the gross income of the Employee.
(ii) Amounts realized from the exercise of a nonqualified stock
option, or when restricted stock (or property) held by an Employee either
becomes freely transferable or is no longer subject to a substantial risk of
forfeiture.
(iii) Amounts realized from the sale, exchange or other disposition
of stock acquired under a qualified stock option.
(iv) 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 (whether or not under a salary reduction
agreement) towards the purchase of an annuity contract described in Section
403(b) of the Code (whether or not the contributions are excludable from the
gross income of the Employee).
1.36 "TRUST" means the Trust established in accordance with the terms of
this Plan, which shall consist of all assets including the Investment Fund,
together with the Participants' rollover, mandatory and voluntary
contributions, if any.
1.37 "TRUSTEES" means Francis Bagnell or any successor trustee or
trustees as may be designated from time to time by the Board of Directors.
1.38 "VALUATION DATE" means the last business day of each semi-annual
period with the Plan Year.
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1.39 "YEAR OF SERVICE" means an Annual Computation Period during which an
Employee is credited with at least 1,000 Hours of Service.
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Article II
CREATION AND PURPOSE OF PLAN
2.01 CREATION
The Employer hereby voluntarily creates this Plan.
2.02 PURPOSE
The purpose of the Plan is to recognize the contribution of the
Employees to the successful operation of the Employer and to reward Employees
who become Participants with the following benefits:
(a) Retirement benefits for Participants in the Employer's employ at
the attainment of their retirement ages.
(b) Death benefits for the Beneficiaries of Participants who die
before retirement while employed by the Employer, to the extent provided in
Article VII.
(c) Severance benefits for Participants whose employment is
terminated before they attain retirement age, to the extent provided in Article
IX.
(d) Disability benefits for Participants who become disabled while
employed by the Employer, to the extent provided in Article VIII.
2.03 EXCLUSIVE BENEFIT OF EMPLOYEES
The Plan has been established by the Employer for the exclusive
benefit of its Employees and their Beneficiaries. Under no circumstances shall
the Employer have any right, title or interest in and to the Fund held or
acquired under this Plan
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by the Trustees nor shall the Fund revert to the Employer or inure to its
benefit in any way except as provided in Section 14.05. Participants shall
have vested rights only as specifically provided in this Plan. This Plan is
strictly voluntary on the part of the Employer and shall not be construed to
give any Employee, or any other person, any legal or equitable rights against
the Employer, the Trust, or the Trustees, except as specifically granted in
this Plan and in the Trust, nor shall it be construed to give any Employee the
right to remain in the employ of the Employer.
2.04 DISCRETIONARY POWERS OF TRUSTEES AND PLAN ADMINISTRATOR
Whenever discretionary powers are granted in this Plan or in the
Trust, to the Trustees, the Plan Administrator or any other person, such powers
are to be exercised and interpreted in a nondiscriminatory manner so that all
Employees, Participants and Beneficiaries shall be treated alike under similar
circumstances.
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Article III
ELIGIBILITY FOR PARTICIPATION
3.01 CONDITIONS IF ELIGIBILITY
(a) All Employees who are Age 21 and have completed one Year of
Service on the Effective Date shall become Participants as of such date. Each
Employee who subsequently meets such requirements shall become a Participant as
of the entry date immediately following the date on which the Employee
satisfied such requirements, provided that an Employee shall only participate
in the cash or deferred arrangement described in Article XXI if he so elects in
the manner prescribed by the Plan Administrator. The entry dates of the Plan
shall be each April 30, July 31, October 31 and January 31.
(b) Notwithstanding the foregoing, only Employees who are not
covered under a collective bargaining agreement provided that retirement
benefits have been the subject of good faith negotiations and are employed by
the Employer shall be eligible to participate in the Plan.
(c) In the event an Employee who has satisfied the Plan's
eligibility requirements described in subsection (a) and would otherwise have
become a Participant, shall go from a classification of a noneligible Employee
to an eligible Employee, such Employee shall become a Participant immediately
upon his becoming an eligible Employee.
In the event an Employee who has satisfied the Plan's
eligibility requirements shall go from a classification of an eligible employee
to a noneligible Employee and becomes
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ineligible to participate, such Employee shall participate in the Plan
immediately upon returning to an eligible class of Employees.
(d) A Participant who is reemployed after terminating employment
shall participate as of his reemployment commencement date instead of as of the
otherwise applicable entry date.
3.02 CERTIFICATION BY PLAN ADMINISTRATOR OF EMPLOYEE STATUS
The Plan Administrator shall determine the eligibility of an
Employee in accordance with this Plan. At the time of payment of its initial
contribution on behalf of a Participant, the Employer shall certify to the Plan
Administrator in writing the following information, and thereafter within
thirty (30) days after the last day of each year the Employer shall certify to
the Plan Administrator all of the following information pertinent to each
Employee with respect to whom any such information shall not theretofore have
been so certified:
(a) The name, address and Social Security number of each Employee
who has a Year of Service as provided in this Plan;
(b) The date on which each Employee became an Employee of the
Employer;
(c) The date on which each Employee on leave of absence, suspension,
or temporary layoff began such leave of absence, suspension, or temporary
layoff, together with the cause therefor, and a statement as to whether such
leave of absence was with or without pay;
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(d) The amount of compensation paid by the Employer during the year
to each Employee and to all Employees;
(e) The Age of each Employee as shown on the records of the
Employer, provided that whenever any Employee proves to the satisfaction of the
Employer that his Age so certified is incorrect, the Employer may correct such
certification; and
(f) Such other information as may be requested by the Plan
Administrator in order to enable the Plan Administrator to perform its duties
in accordance with the Plan.
3.03 EFFECT OF TERMINATION OF ELIGIBILITY
In the event a Participant shall go from a classification of an
eligible Employee to an ineligible Employee, such former Participant shall
continue to vest in his interest in the Plan for each Year of Service completed
while a noneligible Employee, until such time as his Participant's Regular
Account and Matching Contribution Account shall be forfeited or distributed
pursuant to the terms of the Plan. Additionally, his interest in the Plan
shall continue to share in the earnings of the Fund.
3.04 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be included as a
Participant in the Plan is erroneously omitted and discovery of such omission
is not made until after a contribution by his Employer for the year has been
made, the Employer
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shall make a subsequent contribution, subject to Section 5.05, so that the
omitted Employee receives an amount which the said Employee would have received
had he not been omitted.
3.05 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have been included
as a Participant in the Plan is erroneously included and discovery of such
incorrect inclusion is not made until after a contribution for the year has
been made, the Employer shall not be entitled to recover the contribution made
with respect to the ineligible person regardless of whether or not a deduction
is allowable with respect to such contribution. In such event, the amount
contributed with respect to the ineligible person shall constitute a forfeiture
for the Plan Year in which the discovery is made.
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Article IV
CONTRIBUTIONS BY EMPLOYER
4.01 DETERMINATION OF AMOUNT
The Additional Employer Contribution to the Trust for a Plan Year,
if any, shall be the amount determined by the Board of Directors without regard
to current or accumulated earnings and profits for the taxable year ending with
or within the Plan Year. Except for the foregoing method of determining the
Employer contribution, the Plan shall otherwise be treated as a profit-
sharing plan for purposes of Section 401(a), 402, 412 and 417 of the Code.
In addition to the foregoing contributions, the Employer shall
contribute an amount, if any, necessary to restore the previously forfeited
Regular Account balance of a rehired Participant, to the extent required by
Section 10.04, and any amount required to be contributed pursuant to Section
12.01 and Article XXI.
4.02 TIME MAKING FOR CONTRIBUTIONS
All contributions shall be made within the time prescribed by law
for making such contributions.
4.03 PLAN EXPENSES
In addition to the contributions to be made to the Fund by the
Employer, the Employer may (but shall not be required to) pay all expenses
incident to the operation and management of the Trust and of this Plan. In the
event the Employer does not make such payment, the same shall be charged
against and paid from the Fund. Administration expenses
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attributable to Participant investment directions regarding their Account
balance, including, but not limited to expenses of acquiring or liquidating any
investments, shall be charged directly to such Account.
4.04 FUTURE EMPLOYER LIABILITY
The Employer shall have no liability in respect to payments under
this Plan, except to pay over to the Trustees such contributions as may be
required under Section 4.01 of this Plan.
4.05 CONTRIBUTIONS NOT RECOVERABLE
Except as provided in Section 14.05, no contribution by the Employer
to the Trust, or any of the Trust assets or the income therefrom, shall revert
to or be paid to the Employer. All amounts paid by the Employer to the
Trustees shall be used and applied for the sole and exclusive benefit of the
Participants and their Beneficiaries.
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Article V
ALLOCATIONS TO PARTICIPANT'S ACCOUNTS
5.01 ALLOCATION OF EMPLOYER CONTRIBUTIONS AND FORFEITURES
(a) Additional Employer Contributions made during or with respect to
any Plan Year shall be allocated to each Participant's Regular Account, as of
the Allocation Date for the Plan Year, in the ratio that each Participant's
Compensation bears to the total Compensation of all Participants.
Notwithstanding the foregoing, Allocations shall be made only for those
Participants who do not incur a Break in Service for the Plan Year ending on
the Allocation Date.
(b) Forfeitures (including forfeitures of Matching Contributions)
shall first be used to restore the previously forfeited Account balances of
rehired Participants, if any, in accordance with Section 10.04, as set forth in
paragraph (a). Any forfeitures remaining shall be allocated equally among all
Participants other than those who incurred a Break in Service on the Allocation
Date. A forfeiture is any amount which (1) cannot be distributed to a
terminated Participant because it exceeds his nonforfeitable (vested) interest
in his Regular Account (as described in Section 9.04 hereof), or (2) cannot be
distributed due to reasons of administrative impossibility (e.g. inability to
locate a Participant or Beneficiary) as determined by the Administrator
pursuant to uniform and non-discriminatory standards.
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(c) Contributions to a Participant's Arrangement Account shall be
allocated as provided in Article XXI. Matching Contributions shall be
allocated as provided in Section 12.01(b).
5.02 ALLOCATION OF FAIR MARKET VALUE AND TRUST EARNINGS
(a) The Trustees shall determine the fair market value of the
Participants' Accounts (which value shall include earnings), by a method
consistently followed and uniformly applied, and their determination so made
shall be conclusive and binding upon all persons, natural or legal, having or
claiming any interest therein.
(b) The income, expenses, and realized and unrealized gain or loss
of each Participant's Account shall be determined as of each Valuation Date.
Each item of income, expense, gain or loss shall be credited or charged to the
specific Account to which it relates.
5.03 ALLOCATION AT TERMINATION
No allocation pursuant to Section 5.01 shall be made to a
Participant's Regular Account for the Plan Year (or any portion thereof) in
which he terminates his employment with the
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Employer unless such termination is due to the retirement, death or disability
of the Participant, except as may be required by Section 5.01(c).
5.04 ALLOCATION AND VALUATION DATES; CURRENT ACCOUNT BALANCE
(a) For all purposes of this Plan, allocations to the Participants'
accounts under this Article V shall be deemed to be made on the Allocation or
Valuation Date to which they relate, although they may actually be determined
at some later date. The fact that such allocations are made, however, shall
not vest in any Participant any right, title or interest in or to any part of
the Fund except only at the times, to the extent and on the terms and
conditions specified in this Plan and the Trust.
(b) A Participant's Account balance at any date shall equal the
Account balance as of the Allocation or Valuation Date coincident with or
immediately preceding such date, plus the Employee Deferrals made thereafter
and any Matching Contributions to which the Employee is entitled as a result of
such Employee Deferrals.
5.05 LIMITATION ON ALLOCATION AND SUSPENSE ACCOUNT
(a) In no event shall the Annual Addition to a Participant's Account
from all sources exceed the "Maximum Permissible Amount", which is the lesser
of: (i) $30,000 (or such other limit as may be established from time to time by
the Secretary of the Treasury); or (ii) 25% of the Participant's Section 415
Compensation. Any subsequent adjustment in the Maximum Permissible Amount will
be effective on the first day of
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the Plan Year in which the effective date of such adjustment occurred. If in
addition to this Plan, the Employer maintains another defined contribution
plan, the Annual Additions to this Plan shall be limited such that the Maximum
Permissible Amount is not exceeded. In any case in which a Participant is also
a participant in any defined benefit plan ever maintained by the Employer, if
at the end of any Plan Year the sum of his defined contribution plan fraction
under this Plan and any other defined contribution plan ever maintained by the
Employer and his defined benefit plan fraction under such defined benefit plan
exceeds (without regard to this Section 5.05) 1.0, the defined contribution
plan fraction will be reduced by lowering the Annual Addition to the
Participant's Account under this Plan so that such limit is not exceeded.
(b) For purposes of paragraph (a) above, the following definitions
shall apply:
(1) "Defined contribution plan" means a plan which provides for
an individual account for each participant and for benefits based solely
upon the amount contributed to the participant's account, and any income,
expenses, gains and losses and any forfeitures of accounts of other
participants which may be allocated to such participant's account.
(2) "Defined benefit plan" means any plan which is not a defined
contribution plan.
(3) For purposes of (1) and (2) above, a "plan" includes:
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(A) a plan described in Code Section 401(a) which includes a
trust which is exempt from tax under Code Section 501(a),
(B) an annuity plan described in Code Section 403(a),
(C) a qualified bond purchase plan described in Code Section
405(a),
(D) an annuity contract described in Code Section 403(b),
(E) an individual retirement account described in Code
Section 408(a),
(F) an individual retirement annuity described in Code
Section 408(b),
(G) a simplified employee pension, and
(H) an individual retirement bond described in Code Section
409.
(4) (A) "Defined contribution plan fraction" means a fraction,
the numerator of which is the sum of the Annual Additions to the
Participant's account under all the defined contribution plans (whether or
not terminated) maintained by the Employer for the current and all prior
limitation years (including the Annual Additions attributable to the
Participant's nondeductible employee contributions to all defined benefit
plans, whether or not terminated, maintained by the employer, and the
Annual Additions attributable to all welfare benefit funds, as defined in
Section 419(e) of the Code, and individual medical accounts, as defined in
Section 415(l)(2) of
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the Code, maintained by the employer), and the denominator of which is the
sum of the maximum aggregate amounts for the current and all prior
limitation years 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 Sections 415(c)(1)(A) of the Code
or 35 percent of the Participant's Section 415 Compensation for such year.
If the Employee was a participant as of the end of the first day
of the first limitation year beginning after December 31, 1986, in one or
more defined contribution plans maintained by the Employer which were in
existence on May 6, 1986, the numerator of this fraction will be adjusted
if the sum of this fraction and the defined benefit fraction would
otherwise exceed 1.0 under the terms of this plan. Under the adjustment,
an amount equal to the product of (1) the excess of the sum of the
fractions over 1.0 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.
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The Annual Additions for any Limitation Year beginning before
January 1, 1987, shall not be recomputed to treat all employee
contributions as Annual Additions.
(5) "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 Sections 415(b) and
(d) of the Code or 140 percent of the highest average compensation, including
any adjustments under Section 415(b) of the Code.
Notwithstanding the above, if the Participant was a
Participant as of the first day of the first Limitation Year beginning after
December 31, 1986, in one or more defined benefit plans maintained by the
Employer which were in existence on May 6, 1986, the denominator of this
fraction will not be less than 125 percent of the sum of the annual benefits
under such plans which the Participant had accrued as of the close of the last
Limitation Year beginning before January 1, 1987, disregarding any changes in
the terms and conditions of the plan after May 5, 1986. The preceding sentence
applies only if the defined benefit plans individually and in the aggregate
satisfied the requirements of Section 415 for all Limitation Years beginning
before January 1, 1987.
(c) Any excess resulting from these limits shall be reallocated
among the Participants in the following manner:
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(1) Any Additional Employer contributions in excess of such
maximum Annual Addition shall remain in the Suspense Account and be
allocated among Accounts of Participants on the subsequent Anniversary
Date in accordance with Section 5.01(a). The Plan Administrator shall
maintain the Suspense Account and:
(A) The Beneficiary of the Suspense Account shall be this
Plan;
(B) Assets held in the Suspense Account shall not revert to
the Employer; and
(C) The Plan Administrator shall retain the assets each Plan
Year to the extent necessary so that the maximum Annual Addition on
behalf of any Participant shall not be exceeded.
(2) Elective Deferrals allocated for the Plan Year shall be
returned to the Participant. This distribution shall be made in a lump sum, as
soon as administratively feasible after the excess amount is determined. This
distribution shall be made regardless of whether the Participant and his or her
spouse consents to it.
(A) Elective Deferrals which are deemed excess amounts shall
not be included in performing the nondiscrimination tests of Article
XXI.
(B) In determining the excess amount, the permissible
Elective Deferrals shall equal an amount, which when added to the
Matching Contribution attributable to the
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permissible deferrals and all other Annual Additions, does not
exceed the Maximum Permissible Amount.
5.06 NOTICE TO PARTICIPANT OF ACCOUNT - TIME WITHIN WHICH
OBJECTIONS
MUST BE FILED
(a) At least twice during each Plan Year, the Plan Administrator
shall advise each Participant of his Account which shall indicate the
following:
(1) The balance in his Account as of the preceding Valuation
Date.
(2) The adjustment to his Account to reflect his share of the
income, expenses, gains and losses of the Fund for the Plan Year.
(3) The amount of Employer contributions and forfeitures
allocated to his Account as of the current Valuation Date.
(4) The new balance in his Account as of the current Valuation
Date.
(5) The vested percentage of the Participant's Account.
(6) The vested amount of the Participant's Account.
(b) In addition to the statement required in paragraph (a) above, a
similar statement, reflecting the latest available information at the time,
shall be furnished as soon as possible after a written request for such
statement is made, but such request need not be honored more than once in any
twelve
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month period. Such statement may contain any additional information
satisfactory to the Plan Administrator and the Trustees.
(c) All statements of Account furnished pursuant to this Section
5.06 shall be accompanied by or include a notation to the effect that the
Participant must file in writing with the Plan Administrator any objections he
may have to such statement within thirty days after the date of delivery
thereof to him or the Participant shall be deemed to have accepted the accuracy
of such statement.
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Article VI
RETIREMENT BENEFITS
6.01 RETIREMENT BENEFITS
When any Participant shall reach his Normal Retirement Date while in
the employ of the Employer, and shall thereupon retire, he shall be entitled to
receive the full amount of his Account as a retirement benefit in a single lump
sum payment.
6.02 DEFERRED NORMAL RETIREMENT BENEFIT
A Participant may elect to defer his retirement beyond his Normal
Retirement Date. For Plan Years beginning after December 31, 1987, if a
Participant defers his retirement, he shall continue to receive allocations of
Fund earnings and Employer contributions. Upon retiring the Participant shall
receive a benefit equal to his Account balance, payable in a single lump sum
(and subject to Section 6.04).
6.03 MANDATORY DISTRIBUTIONS
Notwithstanding any provision herein to the contrary, distributions
of benefits on or after January 1, 1986, whether under the Plan or through the
purchase of an annuity contract shall be made in accordance with the following
requirements, and shall otherwise comply with Section 402(a)(9) and the
Regulations thereunder, including Regulations Section 1.401(a)(9)-2.
(a) Distribution of a Participant's benefit shall commence no later
than the Required Beginning Date (as defined below), and shall be payable over
a period not exceeding the joint lives or life expectancies of the Participant
and his designated Beneficiary, determined using the return multiples in
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Tables V and VI of Regulation Section 1.72-9; provided, however, if the
designated Beneficiary is the Participant's spouse, such life expectancy shall
be redetermined up to once each year, unless the Participant or his spouse
elects otherwise.
(b) (1) For purposes of this Section 6.06, the term "Required
Beginning Date" means:
(i) In the case of a Participant who attains age 70 after
June 30, 1987, April lst following the calendar year in which the
Participant attains age 70 1/2;
(ii) In the event a Participant who attains age 70 before
July 1, 1987 and is not a 5% owner (as defined below), April lst
following the later of the calendar year in which the Participant
attains age 70 1/2 or retires; or
(iii) In all other cases, April lst following the later of
(I) the calendar year in which the employee attains age 70 1/2 or
(II) the earlier of the calendar year in which the Participant
becomes a 5% owner or retires.
(2) A Participant shall be considered a 5% owner for purposes of
this Section 6.05 if he satisfies the definition of 5% owner contained in
Section 19.02(d)(2) of the Plan at any time during the 5-Plan Year period
ending in the calendar year in which he attains age 70 1/2, or in any
subsequent Plan Year; except if he is not a 5% owner during any Plan Year
beginning after December 31, 1979.
(c) If a Participant dies before distribution of his benefit is
deemed to have commenced under the Regulations, then the entire benefit shall
be distributed by December 31, of the
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calendar year which includes the 5th anniversary of the Participant's date of
death unless one of the exceptions described in paragraph (d) below shall
apply. If the Participant dies after payment of his benefit is deemed to have
commenced under the Regulations but prior to distribution of the entire
benefit, then the unpaid portion of his benefit shall be distributed to his
Beneficiary at least as rapidly as under the method of distribution which was
elected by the Participant pursuant to paragraph (a) above.
(d) Notwithstanding the general rule contained in the first sentence
of paragraph (c) above, if the Participant dies before payment of his benefit
is deemed to have commenced under the Regulations, then, at the election of the
Participant (or the designated Beneficiary after the Participant's death) the
benefit may be paid to his designated Beneficiary over a period not to exceed
the life or life expectancy of such Beneficiary; provided (A) in the case of a
Beneficiary other than the deceased Participant's spouse, the distribution to
the Beneficiary shall commence no later than December 31 of the calendar year
immediately following the calendar year in which the Participant died, and (B)
in the case of a Beneficiary who is the spouse, distribution to the Beneficiary
shall commence not later than December 31 of the calendar year in which the
deceased Participant would have attained age 70 1/2, or if the spouse shall die
prior to commencement of distributions, payment will be made to the deceased
spouse's beneficiary in accordance
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with this Section as if such spouse were a Participant in the Plan. The
election shall be made in the time and manner specified in the Regulations.
(e) For purposes of this Section, if a Participant shall fail to
specifically designate a Beneficiary, so that his Beneficiary is determined in
accordance with the definition of Beneficiary in Article I of this Plan, the
Beneficiary so determined shall be deemed to have been designated by the
Participant within the meaning of Section 401(a)(9)(E) of the Code.
(f) Notwithstanding any provision of this Section to the contrary,
no benefit shall be paid under this Plan in a manner which would violate the
incidental death benefit requirement of Section 401(a)(9)(G) of the Code and
the Regulations thereunder. For calendar years beginning before 1989, benefits
shall be distributed in accordance with the incidental death benefit rules then
in effect under Treasury Regulation Section 1.401-1(b)(1).
(g) Subject to the spouse's right of consent afforded under the
Plan, the restrictions imposed by this Section shall not apply if a Participant
has, prior to January 1, 1984, made a written designation to have his death
benefits paid in an alternative method acceptable under Code Section 401(a) as
in effect prior to the enactment of the Tax Equity and Fiscal Responsibility
Act of 1982.
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6.04 DISTRIBUTION OF BENFITS
(a) If the value of a Participant's vested Account balance derived
from employer and employee contributions exceeds (or at the time of any prior
distribution exceeded) $3,500, and for the account balance is immediately
distributable, the Participant must consent to any distribution of the Account
balance. The consent of the Participant shall be obtained in writing within
the 90-day period ending on the Annuity Starting Date. The Plan Administrator
shall notify the Participant of the right to defer any distribution until the
Participant's Account balance is no longer immediately distributable. Such
notification shall include a general description of the material features, and
an explanation of the relative values of, any optional forms of benefit
available under the plan in a manner that would satisfy the notice requirements
of Section 417(a)(3) of the Code, and shall be provided no less than 30 days
and no more than 90 days prior to the Annuity Starting Date. The consent of the
Participant shall not be required to the extent that a distribution is required
to satisfy Section 401(a)(9) or Section 415 of the Code. In addition, upon
termination of this Plan if the Plan does not offer an annuity option
(purchased from a commercial provider), the Participant's Account balance may,
without the Participant's consent, be distributed to the participant or
transferred to another defined contribution plan (other than an employee stock
ownership plan as defined in Section 4975(e)(7) of the Code) within the same
controlled group.
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(b) An Account balance is immediately distributable if any part of
the Account balance could be distributed to the Participant before the
Participant attains or would have attained if not deceased) the later of Normal
Retirement Age or age 62.
(c) Annuity Starting Date means the first day of the first period
for which an amount is payable on an annuity or in any other form.
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Article VII
DEATH BENEFITS
7.01 DISTRIBUTION OF ACCOUNT
Upon the death of a Participant before retirement or other
termination of his employment, his Account shall become fully vested. The Plan
Administrator in accordance with the provisions of the Claims Procedure in
Article XVIII, shall direct the Trustees to distribute the value of a
Participant's Vested Account to his Beneficiary in a single lump sum subject,
however, the provisions of Section 7.04 relating to spousal Death Benefits.
7.02 DEATH BENEFITS FROM POLICIES
If a Participant dies prior to retirement, his Beneficiary shall
receive, as an additional Death Benefit hereunder, the benefits payable under
the Insurance Policy or Policies (if any) on the Participant's life which are
being held for his Account by the Trustees. In no event shall any Insurance
Policies be maintained on the life of any Participant in excess of the
limitation set forth in Section 11.02 hereof. For purposes of this Section
7.02, a Participant's spouse shall be his Beneficiary unless the spouse has
consented to another beneficiary in accordance with the procedures set forth in
Section 6.06(b).
7.03 PROOF OF DEATH
The Plan Administrator may require such proper proof of death and
such evidence of the right of any person to receive payment of the Death
Benefit pursuant to this Article VII as the
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Plan Administrator may deem appropriate. The Plan Administrator's
determination of death and of the right of any person to receive payment shall
be conclusive.
7.04 DEATH BENEFIT FOR SPOUSES
(a) Notwithstanding any contrary Beneficiary designation, if the
Participant has been married to his spouse for the one year period ending on
the earlier of (i) the date the Participant first receives retirement or
disability benefits, or (ii) the date of the Participant's death, the
Participant's vested Account balance shall be distributed to the Participant's
surviving spouse, unless the surviving spouse has consented in writing to the
Participant's election of a different designated Beneficiary. Such consent
must acknowledge the effect of such election and the spouse's signature must be
notarized. Notwithstanding the foregoing, the spouse's consent requirement
shall be waived if it is established to the satisfaction of the Plan
Administrator that there is no spouse, that the spouse cannot be located or
that another circumstance exists which, pursuant to regulations prescribed by
the Secretary of the Treasury, is a permissible basis for waiving the spouse's
consent requirement.
(b) The surviving spouse may elect to have the distribution of the
vested Account balance commence within the 90day period following the date of
the Participant's death. The Account balance shall be adjusted for gains and
losses occurring
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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 balance of the death benefit payable under this Article VII,
which is not payable to the surviving spouse of the Participant pursuant to
this Section 7.04, if any, shall be payable in accordance with Section 7.01 to
the Participant's Beneficiary. Nothing contained in this Section 7.04 shall be
deemed to increase the total death benefit otherwise payable under this Article
VII.
7.05 AMOUNT OF DEATH BENEFIT WITHOUT FULL INSURANCE
If a Participant dies before the Insurance Policy on his life is
placed in effect for any reason whatsoever, then the Death Benefit due under
the Plan payable on the death of such Participant shall be limited to the
insurance in effect, if any, and the balance of the Participant's Account.
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Article VIII
DISABILITY BENEFITS
8.01 ELIGIBILITY FOR DISABILITY BENEFITS
A Participant who becomes disabled (as hereafter defined) while in
the employ of the Employer shall be entitled to receive disability benefits.
The determination of whether a Participant is disabled shall be made by the
Plan Administrator in accordance with uniform standards applied in a consistent
manner. A Participant shall be deemed disabled if (1) the Plan Administrator
determines that such Participant is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or has lasted or can be expected to
last for a continuous period of not less than twelve months and which condition
has existed for a period of at least three months, and (2) such Participant is
eligible for and actually receives disability benefits under the federal Social
Security Act.
8.02 AMOUNT OF DISABILITY BENEFITS
The amount of the disability benefit payable hereunder shall be
equal to one hundred percent of the value of the Participant's Account. The
disability benefit shall be payable in the same manner as if the Participant
had terminated his employment upon early retirement, as provided in Section
6.03.
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8.03 RECOVERY FROM DISABILITY
If a Participant recovers from his disability and resumes employment
covered by this Plan, he shall be considered a rehired Participant and subject
to Article X.
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Article IX
TERMINATION OF EMPLOYMENT
9.01 LIMITATIONS ON BENEFITS UPON TERMINATION
If a Participant's employment terminates for a reason other than
death, disability or retirement (including early and deferred retirement), the
terminated Participant shall have no rights and benefits under the Plan except
as specifically provided in this Article IX.
9.02 VESTED INTEREST IN PORTION APPLICABLE TO EMPLOYER'S
CONTRIBUTION
Upon the Participant's termination of employment for a reason other
than death, disability or retirement, the terminated Participant shall have a
vested interest equal to a certain percentage of the value of his Regular
Account and Matching Contribution Account which percentage is based upon the
number of Years of Service the Participant has completed (excluding any Years
of Service required to be excluded pursuant to Section 10.03), determined in
accordance with the schedule set forth below:
FULL YEARS OF VESTED
SERVICE PERCENTAGE
------------- ----------
less than 1 year NONE
1 but less than 2 20%
2 but less than 3 40%
3 but less than 4 60%
4 but less than 5 80%
5 or more 100%
9.03 AUTHORIZED ABSENCE
If a Participant is absent from employment for one of the reasons
specified in Section 1.24(b) or (d), the Employer shall continue to make
contributions to maintain in force all
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Insurance Policies on his life for a maximum period of one year. However, if
such Participant does not return to active employment prior to incurring a
Break in Service, he shall be treated as a terminated Participant as of the
commencement of his leave of absence.
9.04 DISTRIBUTION OF ACCOUNT
(a) If the termination of a Participant's employment before Normal
Retirement Date is due to any reason other than death, or disability, the
terminated Participant shall be entitled to receive his vested interest in his
Account sixty (60) days after the close of the Plan Year in which he terminates
employment.
(b) Distributions made pursuant to this Section 9.04 shall comply
with the procedures set forth in Section 6.04.
(c) If a Participant's vested interest in his Account is less than
100%, the portion in excess of his vested interest shall be allocated as a
forfeiture as of the Allocation Date coincident with or following the earlier
of (i) the date on which the terminated Participant's vested interest is
distributed to him or (ii) the date on which the terminated Participant incurs
five, consecutive Breaks in Service. Notwithstanding anything to the contrary
in this Section 9.04, if a Participant has no vested interest in his Account,
he shall be deemed to have received a distribution of such vested Account on
the date he terminates employment.
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9.05 DISPOSITION OF INSURANCE POLICIES
(a) Upon the retirement or other termination of a Participant's
employment for any reason other than death, the Participant may elect to
dispose of any Insurance Policy on his life, as follows: (1) to have title to
any such Insurance Policy transferred to him if his vested interest in such
Insurance Policy is 100% of its Net Cash Value; or (2) if his vested interest
in the Insurance Policy is less than 100% of its Net Cash Value, to purchase
such policy from the Trustees by paying to the Trustees an amount equal to the
difference between the Net Cash Value of such Insurance Policy and the amount
of his vested interest in such Net Cash Value; or (3) to receive a distribution
of the policy after requesting the Trustees to borrow against the Net Cash
Value of the policy an amount equal to the non-vested portion of the Net Cash
Value.
(b) The Trustees shall take the action necessary to give effect to
any of the Participant's elections in paragraph (a) only upon the direction of
the Plan Administrator. Ownership of any Insurance Policy transferred from
the Trustees to the Participant under the preceding paragraph shall be free and
clear of the Trust. Any portion of an Insurance Policy that is not transferred
to a terminated Participant shall be surrendered to the Insurer by the Trustees
for cash. Any such non-vested cash values received by the Trustees from the
Insurer, or money received from the Participant through his purchase of the
policy, together with the non-vested portion of
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the Participant's Account, shall be allocated as forfeitures in the manner
specified in Section 5.01 after the Participant has incurred a Break in
Service.
9.06 DATE OF PAYMENT OF BENEFITS
It shall be clearly understood that unless a Participant elects a
later date, the benefits payable under this Plan will commence not later than
the 60th day after the latest of (1) the close of the Plan Year in which the
Participant attains the earlier of age 65 or the Normal Retirement Age
specified under the Plan, (2) the close of the Plan Year in which occurs the
10th anniversary of the year in which the Participant commenced participation,
or (3) the close of the Plan Year in which the Participant terminates his
service with the Employer.
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Article X
REHIRING TERMINATED PARTICIPANT
10.01 EFFECT OF REHIRING
A Participant who separates from service with the Employer for a
reason other than disability, death or retirement and subsequently incurs a
Break in Service may resume participation in the Plan after his recommencement
of employment, subject to the terms and conditions of this Article X.
10.02 DATE OF PARTICIPATION
A rehired Participant's date of participation shall be determined
in accordance with Section 3.01(d).
10.03 EFFECT OF BREAK IN SERVICE ON CREDITED SERVICE
(a) PRE-BREAK CREDITED SERVICE. Upon the re-entry of the
rehired Participant into the Plan all Years of Service prior to his Break in
Service shall continue to be counted, except as follows:
(1) Years of Service performed prior to January 1, 1976 shall
be excluded if the provisions of the Plan as in effect prior to such date
would have permitted exclusion of such service.
(2) Years of Service performed after December 31, 1975 shall
be excluded if the Participant had no vested interest at the time of his
Break in Service and the number of consecutive years during which such
Break in Service continued equals or exceeds the greater of (A) the number
of Years of Service accumulated by the Participant prior to his Break in
Service or (B) five years.
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(b) POST-BREAK CREDITED SERVICE. In the case of a Participant
who incurs five, consecutive Breaks in Service, all Years of Service after such
Breaks in Service shall be excluded for the purpose of determining the
Participant's vested interest in his Account which accrued before such Breaks
in Service. Separate Accounts shall be maintained for the Participant's pre-
break and post-break Account balances. Both Accounts will share in the
income and losses of the Investment Fund.
10.04 RESTORATION OF PARTICIPANT'S ACCOUNT
(a) If a rehired Participant whose Regular Account or Matching
Contribution Account was less than one hundred percent (100%) vested received a
distribution of the vested portion of such Accounts pursuant to Section 9.04,
these Accounts will be restored to the balance on the Allocation Date
immediately preceding distribution if the Participant repays to the Plan the
full amount of such distribution on or before the following date: (i) in the
case of a distribution received on account of a Participant's termination of
employment, the earlier of five years after the Participant's reemployment
commencement date or the close of the period of five, consecutive Breaks in
Service commencing after the date the distribution was made; or (ii) in all
other cases, five years after the date the distribution was made.
(b) To restore the Participant's Regular and Matching Contribution
Account balances, the Plan Administrator shall, to the extent necessary,
allocate to such Accounts the following amounts in the order listed:
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(1) The amount of any Participant forfeitures which would
otherwise be allocated under Section 5.01; and
(2) The Additional Employer Contribution for the Plan Year.
To the extent the foregoing amounts are insufficient to completely restore the
Participant's Regular and Matching Contributions Accounts, the Employer shall
contribute; without regard to any requirement or condition contained in Section
4.01, such additional amount as is necessary to complete such restoration.
Such contribution must be made as of the Allocation Date for the Plan Year in
which the Participant's repayment occurs or the following Plan Year. If more
than one account or subaccount must be restored, such accounts shall be
restored pro rata.
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Article XI
INVESTMENT AND VALUATION
11.01 INVESTMENT FUND
The contributions of the Employer, together with all other funds
coming into the hands of the Trustees and all income from the earnings on
invested funds (without distinction as to principal and income), shall be held,
invested, sold and reinvested by the Trustees in accordance with the provisions
provided in the Trust Agreement.
Notwithstanding the required allocations set forth in Article V,
the Trustees shall not be required to segregate the share or allocation of any
Participant, but shall separately account for such share and allocation and
shall separately invest such share and allocation pursuant to Section 11.04
hereof. All premiums, dividends, credits or return premiums on Insurance
Policies shall be changed or credited to the individual Participant Account of
the Insured.
In order to pay any annuity benefit required to be provided under
the Plan, the Trustees, at the direction of the Plan Administrator, may
purchase fully-paid, nontransferable annuity contracts for any Participant,
his surviving spouse or other Beneficiary. Any annuity contracts distributed
by the Plan to a Participant shall comply with the requirements of the Plan.
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11.02 INSURANCE POLICIES
(a) The Trustees may specifically invest in ordinary life
insurance, retirement income insurance, endowment or annuity contracts or their
equivalents issued on the life of each Participant by an Insurer approved by
the Committee; provided, however, that any such insurance investment shall be
made in a non-discriminatory manner as between Participants in like
circumstances; subject to the following limitations: (i) in the case of whole
life insurance, less than one-half (1/2) of the aggregate contributions and
forfeitures allocated to a Participant under and pursuant to this Plan at any
particular time shall be used to pay premiums on Insurance Policies, (ii) in
the case of other types of insurance, less than one-quarter (1/4) of such
aggregate contributions and forfeitures shall be so used, and (iii) if both
ordinary life insurance and other types of insurance are purchased, the sum of
one-half (1/2) of the ordinary life insurance premiums and all other life
insurance premiums will not exceed one-quarter (1/4) of the aggregate
contributions and forfeitures allocated to a Participant.
(b) The Trustees shall be the sole owner and Beneficiary of all
policies purchased hereunder, and they shall be so designated in each policy
and application therefor.
(c) Payments to the Insurer with respect to any insurance or
annuity policy on the life of a Participant shall constitute an investment of
the funds credited to a
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Participant's Account and his Account shall accordingly be reduced by the
amount of any such payments.
(d) In the event of denial of liability by the Insurer, neither the
Plan Administrator nor the Trustees shall be under any obligation to bring
legal action for the payment of the insured death benefit unless the Trust has
been indemnified to the satisfaction of the Plan Administrator for all costs,
expenses and administration fees.
11.03 PARTICIPANTS' CONTRIBUTIONS
The Voluntary Employee Contributions of any Participant shall be
invested as part of the Trust. The Trustees and the Plan Administrator shall
maintain separate records at all times segregating the Participant's
contributions and earnings thereon.
11.04 INVESTMENT ELECTION
(a) A Participant shall have the right, to be exercised at the time
and in the manner hereinafter set forth, to direct that a portion of his
Account for any Plan Year, other than Matching Contributions made in Company
Stock, be invested in Company Stock by electing one of the following programs:
Percentage of Account
to be invested in
Company Stock
Program No. 1 0
Program No. 2 25%
Program No. 3 50%
Program No. 4 75%
Program No. 5 100%
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The balance of such portion of the Participant's Account shall be invested as
directed by the Participant in one or more of at least three investment funds
which the Trustees shall prescribe. Matching contributions made in Company
Stock shall not be subject to the Participant's investment election.
(b) An investment election shall be made by a written instrument,
in a form prescribed by the Plan Administrator, signed by the Participant and
filed with the Plan Administrator during the applicable quarterly election
period. The quarterly election periods with respect to any Plan Year are the
periods beginning on January 15, April 15, July 15, and October 15 of each Plan
Year, and ending, respectively, on January 31, April 30, July 31 and October 31
of such Plan Year. Any investment election made during a particular quarterly
election period will become irrevocable as of the end of such quarterly
election period, but may be revoked or modified during a subsequent quarterly
election period. Other election periods may be designated by the Plan
Administrator including, but not limited to, such election periods as may be
necessary to comply with Securities and Exchange Commission Rule
16b-3(d)(2)(ii). If a Participant fails to file an investment election for
any quarterly election period, the investment election last filed shall be
deemed to remain in effect.
(c) Notwithstanding any other provision of this Section 11.04, the
Trustees need not comply with any investment election if the value of the
assets to be acquired or disposed of as a result thereof is less than $200.
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Article XII
EMPLOYEE AND MATCHING CONTRIBUTIONS
12.01 AMOUNT
(a) No after-tax Voluntary Employee Contributions to the Plan
shall be permitted after December 31, 1986.
(b) Subject to the limitations contained in Section 12.02, the
Company shall pay a Matching Contribution with respect to each Plan Year. The
Matching Contributions shall be paid in Company Stock; except for Plan Years
beginning after January 31, 1991, the Matching Contribution shall be paid
either in cash or Company Stock as elected by each Participant. The election
shall be made at the same time that the Participant makes his investment
election pursuant to Section 11.04 hereof. If paid in Company Stock the
Matching Contribution shall be one hundred percent (100%) of the Participant's
Net Elective Deferrals for the Plan Year. If paid in cash the Matching
Contribution shall be fifty percent (50%) of the Participant's Net Elective
Deferrals for the Plan Year.
For purposes of this Section 12.01(b), Net Elective Deferrals
shall mean Elective Deferrals made by a Participant during the Plan Year less
any withdrawal of such Elective Deferrals by the Participant in accordance with
Section 21.05(b), and less any portion of the Participant's Elective Deferrals
which are returned to him because they exceed the limitations prescribed by
Section 21.06. For purposes of
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calculating the Net Elective Deferrals, withdrawals shall be deemed to have
been made from the earliest Elective Deferrals not yet withdrawn.
To the extent that Matching Contributions are made by the
Corporation in the form of Company Stock, the value of such stock shall be the
lower of (i) the average closing price of the stock for the period of twenty
consecutive trading days preceding the end of the period to which such
Contributions relate or (ii) the closing price of the stock on the last trading
day of such period, which closing prices shall be determined by the average of
the closing prices on the NASDAQ system. It being the Employer's desire that
fractional shares not be held in the Plan, however, the number of shares of
Common Stock otherwise allocable to a Participant's Matching Contribution
Account shall be rounded up to the next whole number of shares.
12.02 MAXIMUM CONTRIBUTION PERCENTAGE
(a) For Plan Years beginning after December 31, 1986, Matching
Contributions for Highly Compensated Employees shall be limited such that the
Actual Contribution Percentage of the Highly Compensated Employees, does not
exceed the greater of:
(1) 125 percent of the Actual Contribution Percentage of
the Non-Highly Compensated Employees; or
(2) The lesser of (i) 200% of the Actual Contribution
Percentage of the Non-Highly Compensated Employees or (ii) the Actual
Contribution Percentage of the Non-Highly Compensated Employees plus two
percentage points. However to
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prevent the multiple use of the limitation described in clause (2) and
Code Section 401(m)(9)(A), any Highly Compensated Employee eligible to
make Elective Deferrals pursuant to Article XXI or any other cash or
deferred arrangement maintained by the Employer or an Affiliated Employer
and to make Voluntary Employee Contributions or to receive Matching
Contributions under this Plan or under any other plan maintained by the
Employer or an Affiliated Employer shall have his actual contribution
ratio reduced pursuant to Regulation 1.401(m)-2. The provisions of Code
Section 401(m) and Regulations 1.401(m)-l(b) and 1.401(m)-2 are
incorporated herein by reference.
(b) For purposes of this Section 12.02, the following definitions
shall apply:
(1) "Actual Contribution Percentage" means, with respect to the
group of Eligible Employees who are Highly Compensated Employees and Non-
Highly Compensated Employee (calculated separately for each group), the
average (expressed as percentage) of the Contribution Percentages of the
Participants in each group. For Plan Years beginning after December 31,
1988, the Actual Contribution Percentage shall be calculated to the
nearest one-hundredth of one percent.
(2) "Contribution Percentage" means the ratio (expressed as a
percentage) of (i) the Contribution Percentage Amounts to (ii) such
Participant's Compensation for that Plan Year.
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(3) "Contribution Percentage Amounts" means the sum of the
Employee Contributions, Matching Contributions, and Qualified Matching
Contributions (to the extent not taken into account for purposes of the
Actual Deferral Percentage test) made under the plan on behalf of the
Participant for the Plan Year. Such Contribution Percentage Amounts shall
include forfeitures of Excess Aggregate Contributions or Matching
Contributions allocated to the Participant's Account which shall be taken
into account in the year in which such forfeiture is allocated. The
Employer may elect to include Qualified Non-elective Contributions in the
Contribution Percentage Amounts. The Employer also may elect to use
Elective Deferrals in the Contribution Percentage Amounts so long as the
Actual Deferral Percentage test is met before the Elective Deferrals are
used in the Actual Contribution Percentage test and continues to be met
following the exclusion of those Elective Deferrals that are used to meet
the Actual Contribution Percentage test.
(4) "Eligible Employees" means any Employee who is eligible to
have a Matching Contribution made on his behalf.
(5) "Excess Aggregate Contributions" means with respect to any
Plan Year, the excess of: (i) the aggregate Contribution Percentage
Amounts taken into account in computing the numerator of the Contribution
Percentage and actually made on behalf of the Highly Compensated
Participants for such Plan Year, over (ii) the maximum Contribution
Percentage Amounts permitted under the limitations of paragraph (a) of
this Section 12.02; determined by reducing contributions made on behalf of
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Highly Compensated Participants in order of their Contribution
Percentages, beginning with the highest of such percentages. The
determination of the Excess Aggregate Contributions with respect to the
Plan shall be made after first determining the Excess Deferrals pursuant
to Section 21.06(a)(1), and then the Excess Contributions pursuant to
Section 21.06(d)(2) and the portion thereof, if any, to be recharacterized
as Voluntary Employee Contributions pursuant to Section 21.06(d)(3).
(6) Elective Deferrals, Excess Contributions, Highly
Compensated Employees, Income, Non-Highly Compensated Employees, Family
Members, Qualified Nonelective Contributions and Qualified Matching
Contributions shall have the same meaning as in Article XXI hereof.
(7) "Matching Contributions" means an Employer Contribution
made pursuant to Section 12.01 on account of any employee contribution or
Elective Deferrals made to this Plan or any other Plan maintained by the
Employer, as well as any forfeiture allocated on the basis of any employee
contribution, matching contribution or Elective Deferral, but excluding
any Qualified Matching Contribution unless otherwise indicated.
(c) For purposes of this Section 12.02, the following special rules
shall apply:
(1) For purposes of determining the Actual Contribution
Percentage and the amount of Excess Aggregate Contributions, only Matching
Contributions (including Qualified Matching Contributions) allocated as
of the end of the Plan Year and contributed to the Plan prior to the end
of the succeeding
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Plan Year shall be considered. In addition, the Plan Administrator may
elect to take into account, with respect to Employees eligible to have
Matching Contributions (including Qualified Matching Contributions)
allocated to their Account, Elective Deferrals and Qualified Nonelective
Contributions contributed to any plan maintained by the Employer. Such
Elective Deferrals and Qualified Nonelective Contributions shall be
treated as Matching Contributions subject to Regulation 1.401(m)-l(b)(2)
which is incorporated herein by reference. However, for Plan Years
beginning after December 31, 1988, the Plan Year must be the same as the
plan year of the plan to which the Elective Deferrals and the Qualified
Nonelective Contributions are made.
(2) For Plan Years beginning after December 31, 1988, the
Contribution Percentage for any Highly Compensated Employee for the Plan
Year who is eligible to make Voluntary Employee Contributions, or to have
Matching Contributions (including Qualified Matching Contributions),
Qualified Non-elective Contributions or Elective Deferrals allocated to
his Account under two or more plans described in Section 401(a) or
arrangements described in Section 401(k) of the Code that are maintained
by the Employer or an Affiliated Employer, shall be determined as if all
such Voluntary Employee Contributions, Matching Contributions (including
Qualified Matching Contributions), Qualified Nonelective Contributions or
Elective Deferrals were made under a single plan.
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(3) In the event that this plan satisfies the requirements of
Section 410(b) of the Code only if aggregated with one or more other
plans, or if one or more other plans satisfy the requirements of Section
410(b) of the Code only if aggregated with this Plan, then this Section
12.02 shall be applied by determining the Contribution Percentage of
eligible Participants as if all such plans were a single plan.
(4) For purposes of determining the Contribution Percentage of
a Highly Compensated Employee who is either a 5% owner (as defined in
Section 19.02(c)(3)) or is of the ten Highly Compensated Employees paid
the greatest Section 415 Compensation during the Plan Year, Voluntary
Employee Contributions of and Matching Contributions (including Qualified
Matching Contributions) for such Participant shall include the Voluntary
Employee Contributions and Matching Contributions of Family Members and
such Family Members shall be disregarded in determining the Contribution
Percentage for Nonhighly Compensated Employees; except that, if
Regulations so provide, the family aggregation provided by this paragraph
shall be limited to Family Members who are Highly Compensated Employee
(without regard to this sentence), if such limitation would produce a
greater Contribution Percentage for the family group as so limited.
(5) The determination and treatment of the Contribution
Percentage of any Participant shall satisfy such other requirements as
may be prescribed by the Secretary of the Treasury.
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(d) (1) Notwithstanding any other provision of this Plan, Excess
Aggregate Contributions, plus any Income thereon, shall be forfeited, if
forfeitable, or, if not forfeitable distributed on or before the fifteenth
day of the third month following the end of the Plan Year, but in no event
later than the close of the following Plan Year, to the Highly Compensated
Employees to whose Accounts such Excess Aggregate Contributions were
allocated for the preceding Plan Year. Excess Aggregate Contributions
shall be allocated to Participants who are subject to the family aggregate
rules of Section 414(q)(6) of the Code in the manner prescribed by
Regulations. Excess Aggregate Contributions shall be treated as Annual
Addition under the Plan.
(2) Forfeitures of Excess Aggregate Contributions shall be
applied to reduce Employer contributions.
(3) Excess Aggregate Contributions shall be forfeited, if
forfeitable or distributed on a pro-rata basis from the Participant's
Voluntary Employee Contribution Account, Matching Contribution account,
and Qualified Matching Contribution subaccount (and, if applicable), the
participant's Qualified Nonelective Contribution subaccount or Elective
Deferral subaccount, or both).
12.03 TRANSFERS FROM OTHER QUALIFIED PLANS
(a) An Employee eligible to participate in the Plan, regardless of
whether he has satisfied the service requirements of Section 3.01, may make, in
accordance with procedures approved by the Committee, a Qualified Transfer of
Assets (as
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defined below) to the Trustee from a plan which meets the requirements of
Section 401(a) of the Code (the "Other Plan"), provided the other Plan permits
the transfer.
(b) For purposes of this Section, the term "Qualified Transfer of
Assets" from the other Plan shall mean:
(1) Amounts transferred to this Plan directly from the Other
Plan;
(2) Lump sum distributions received by an Employee from the
Other Plan which are eligible for tax-free rollover to a plan which
qualifies under Section 401(a) of the Code (a "qualified plan") and which
are transferred by the Employee to this plan within sixty (60) days
following his receipt thereof;
(3) Amounts transferred to this plan from a conduit individual
retirement account provided that the conduit individual retirement account
has no asset other than assets which (A) were previously distributed to
the Employee by another qualified corporate (and, after December 31, 1983,
non-corporate) plan as a lump sum distribution, (B) were eligible for
tax-free rollover to the qualified plan, and (C) were deposited in such
conduit individual retirement account within sixty (60) days of receipt
thereof in other than earnings on set assets; and
(4) Amounts distributed to the Employee from a conduit
individual retirement account being the requirements of paragraph 3 above,
and transferred by the Employee to this plan
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within sixty (60) days of receipt thereof from such conduit individual
retirement account.
(c) The Plan Administrator shall develop such procedures, and may
require such information from an Employee desiring to make such a transfer, or
an opinion of counsel, as it deems necessary or desirable to determine that the
proposed transfer will meet the requirements of this Section. Upon approval by
the Plan Administrator, the amount transferred shall be deposited in the Trust
Fund and shall be credited to a vested employee contribution account. Such
account shall be 100% vested in the Employee, shall share in allocations of
Fund earnings in accordance with Article XI, in the same manner as Voluntary
Employee Contributions, but shall not share in Employer contribution
allocations. Upon termination of employment, the total amount of the
Employee's vested employee contribution account shall be distributed in the
same manner as Voluntary Employee Contributions pursuant to Section 9.06.
(d) Upon such a transfer by an Employee who is otherwise eligible
to participate in the Plan but who has not yet completed the service
requirement of Section 3.01, his vested employee contribution account shall
represent his sole interest in the Plan until he becomes a Participant.
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Article XIII
ALIENATION
13.01 EXCLUSIVE BENEFIT
The benefits under this Plan are intended for the protection of
the Participants and their Beneficiaries. To the extent permitted by law, no
portion of the Investment Fund and none of the benefits or proceeds of any
Insurance Policy held under this Plan or by the Trust nor any other interest in
the Plan, shall be subject to the claims of any creditor of a Participant or any
Beneficiary, and shall not be subject to attachment or garnishment or other
legal process by any such creditor. Neither shall any Participant or
Beneficiary have any right to alienate, anticipate, commute, pledge, encumber,
or assign any of the benefits, payments, or proceeds of any Insurance Policy or
interest in the Plan.
13.02 DOMESTIC RELATIONS ORDER
Notwithstanding the provisions of Section 13.01 above, a person
other than a Participant or his Beneficiary may acquire an interest in the
Participant's benefits pursuant to a Qualified Domestic Relations Order. Upon
receipt of a Domestic Relations Order, the Plan Administrator shall promptly
notify the Participant and any Alternate Payee named in such order of the
receipt of such order and the Plan's procedures for determining the qualified
status of Domestic Relations Orders. Within a reasonable period after receipt
of such order (but in no event longer than eighteen months) the Plan
Administrator shall notify the Participant and each Alternate Payee of its
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determination. Pending such determination the Plan Administrator shall direct
the Trustee to segregate the assets subject to such order in either a separate
account in the Trust Fund or in an escrow account. At the conclusion of the
eighteen-month period (or on such earlier date as the determination of
qualified status has been made) the assets subject to the order shall be paid
pursuant to the terms of the order, provided the order is qualified. If the
order is not qualified (or no determination can be made within such time
period) the assets shall be paid in the same manner as if the order had not
been issued. The Plan Administrator shall establish reasonable procedures to
implement the requirements of this Section 13.02.
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Article XIV
AMENDMENT AND TERMINATION
14.01 AMENDMENT
(a) The Employer shall have the right at any time, and from time to
time, to amend, in whole or part, any or all of the provisions of this Plan.
However, no such amendment shall authorize or permit any part of the Fund
(other than such part as is required to pay taxes, investment and
administration expenses) to be used for or diverted to purposes other than the
exclusive benefit of the Participants and Beneficiaries. No such amendment
which affects the rights, duties or responsibilities of the Trustees may be
made without the Trustees' written consent. Any amendment shall become
effective upon delivery of a written instrument, executed by order of the Board
of Directors, to the Trustees and the endorsement of the Trustees of their
receipt or of their written consent thereto, if such consent is required.
(b) If an amendment directly or indirectly affects the computation
of a Participant's nonforfeitable Account, and such amendment is not more
liberal and therefore to the Participant's benefit, then the Participant's
vested Account as of the later of the effective date or the adoption date of
such amendment shall be computed without regard to such amendment.
Notwithstanding the foregoing, any Participant with at least three Years of
Service may, within sixty days after receiving
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notice of such amendment, irrevocably elect to have his nonforfeitable
percentage continue to be computed without regard to such amendment.
(c) No amendment shall decrease a Participant's Account balance, or
directly or indirectly eliminate a Participant's optional form of benefit
payment, except to the extent permitted by Section 411(d)(6) of the Code or the
Regulations thereunder.
14.02 EFFECT OF MERGER, CONSOLIDATION OR TRANSFER OF ASSETS
This Plan shall not be merged or consolidated with any other plan,
or its assets or liabilities transferred to any other plan, unless each
Participant, if he were entitled to a benefit immediately after the merger,
consolidation or transfer, would receive a benefit at least equal to the
benefit he would have received if the Plan had been terminated immediately
before such merger, consolidation or transfer.
14.03 TERMINATION OF THE PLAN
The Plan may be terminated at any time by the Employer. Upon
termination or partial termination of the Plan or the complete discontinuance
of contributions to the Plan, all Accounts as of such date shall become fully
vested; provided, however, in the case of a partial termination of the Plan,
only those Participants with respect to whom such partial termination has
occurred shall become fully vested.
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14.04 DISTRIBUTION UPON TERMINATION
In the event of termination of the Plan, the liability of the
Employer to make contributions to the Trust shall cease. The Trustees, shall,
upon written notice from the Employer, direct complete distribution of the
assets in the Fund to the Participants, in cash or in kind, in accordance with
the values of their respective Accounts, as of the date of termination,
together with all earnings as of the date of distribution, subject to
provisions for expenses of administration or liquidation. All distributions
shall be paid in a single lump sum payment; provided, however, if the Employer
or any entity in the same controlled group as the Employer maintains another
defined contribution plan (other than an employee stock ownership plan as
defined in Section 4975(e)(7) of the Code), the Participant's Account balance
may be transferred to such other plan if the Participant does not consent to
the distribution of his Account in the manner provided in Section 6.06.
14.05 CONTINGENCY - QUALIFICATION BY IRS
(a) It is intended that this Plan and the Trust shall initially
qualify under Section 401 of the Code. Accordingly, this Plan and the Trust
shall as soon as practicable be submitted, along with all necessary data, to
the Internal Revenue Service for such a determination. In the event there
shall be a final determination that the Plan and the Trust do not so qualify,
then, any other provision hereof to the contrary notwithstanding, all assets
then held hereunder (including any earned income) shall be returned to the
Employer, except as
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otherwise hereinafter provided, and the Employer shall thereupon be responsible
for returning any assets to Participants to the extent that such assets are
attributable to contributions made by such Participants. Upon such return of
assets to the Employer, the Plan and Trust shall be deemed rescinded, and of no
further force and effect. However, the Trustees are authorized to reserve such
sum of money as they may deem advisable for the payment of all their fees,
compensation, costs, expenses and any other liabilities that may constitute a
charge on or against the Trust assets or the Trustees, subject only to the
Trustees' duty to account for said reserved sum.
A final determination that the Plan and Trust do not qualify as
aforesaid shall be deemed to occur on the date that is 91 days after the day a
notice that the Plan does not qualify is sent by the Secretary of the Treasury
or his delegate, unless prior thereto an appeal is taken therefrom to the
United States Tax Court, in which event a final determination shall be deemed
to occur when there has been a final judicial determination.
(b) Once an initial determination has been made that the Plan and
Trust qualify under Section 401 of the Code, this clause shall become null and
void and shall not apply to any subsequent determination regarding
qualification. In no event shall any contribution or other funds or assets of
the Trust be returned or refunded to the Employer after an initial
determination of qualification has been received; provided, however, if any
contribution is made by the Employer by a mistake of fact, this Section shall
not prohibit the return of such contribution
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to the Employer within one (1) year after the payment of the contribution; and
provided further, that each contribution is conditioned upon the deductibility
of the contribution under Section 404 of the Code, and shall be returned to the
Employer of such contribution (to the extent disallowed) within one (1) year of
the disallowance of the deduction.
14.06 RESTRICTIVE AMENDMENT
Regardless of the actual date of adoption of any amendment hereto
which has been adopted to conform to any requirements of ERISA or the Code or
any other law or regulation (whether now or hereafter in effect), all rights
and benefits of every possible Employee or Beneficiary (even though not
specifically identified) will be retroactively restored to the levels they
would have attained had such amendments been timely made and placed in effect
for the first Plan Year to which any such requirements of law applied.
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Article XV
PROTECTION OF THIRD PARTIES
15.01 An Insurer shall not be considered a party to the Plan or Trust
for any purpose, nor shall it be considered in any way responsible for the
performance, validity or sufficiency of the Plan or Trust. An Insurer shall
not be required to permit any action contrary to the provisions of the
Insurance Policy issued by it. No Insurer or other third party dealing with
the Trustees shall be required to look into the terms of this Plan or the Trust
Agreement, or to question any action of the Trustees; nor shall they be
responsible for determining that any action of the Trustees is authorized.
Such a third party or Insurer shall be fully discharged from any and all
liability for any action taken in accordance with the direction of the
Trustees. The certificate of the Trustees or the certificate of an officer of
the Employer may be received by the Insurer or such third party as conclusive
evidence of any of the matters provided in this Plan and the Trust Agreement.
Such Insurer or third party shall be fully protected and shall incur no
liability in taking or permitting any action based upon such certification.
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Article XVI
NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITIES
16.01 NAMED FIDUCIARIES
The following persons shall be "Named Fiduciaries" under the Plan
and Trust Agreement, and shall be the only Named Fiduciaries hereunder or
thereunder.
(a) THE TRUSTEES: The Trustees shall have exclusive authority and
discretion to manage and control the Fund, as provided in the Trust Agreement,
and shall have no other responsibilities other than those provided in such
Agreement.
(b) THE EMPLOYER, AS PLAN SPONSOR: The Employer shall be
responsible for all functions assigned or reserved to it under the Plan and
Trust Agreement, including the right to remove or replace any of the Trustees.
Any authority assigned or reserved to the Employer under the Plan and Trust
Agreement, other than responsibilities assigned to the Plan Administrator,
shall be exercised by resolution of the Employer's Board of Directors, and
shall become effective, with respect to the Trustees, upon written notice to
the Trustees signed by the President, Treasurer or Secretary of the Employer
(or if the Employer is not a corporation, by any
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person having comparable legal authority to act for and bind the Employer)
advising the Trustees of such exercise.
(c) THE EMPLOYER, AS PLAN ADMINISTRATOR: The Employer, in its
capacity as Plan Administrator, shall be the Named Fiduciary responsible for
the administration and operation of the Plan; provided, however, that the
Employer reserves the right to delegate such responsibilities as provided in
Article XVII.
16.02 ALLOCATION OF RESPONSIBILITIES AMONG NAMED FIDUCIARIES
(a) TRUSTEES: The Trustees shall have exclusive responsibility for
the control and management of the assets of the Fund, as provided in the Trust
Agreement.
(b) PLAN ADMINISTRATOR: The Plan Administrator shall have
responsibility and authority, exercisable in its sole discretion, to control
the operation and administration of the Plan in accordance with the terms of
the Plan and Trust Agreement, including, without limiting the generality of the
foregoing, (1) all functions assigned to the Plan Administrator under the terms
of the Trust Agreement; (2) all functions assigned to the Plan Administrator
under the terms of the Plan; (3) determination of benefit eligibility and
amount and certification thereof to the Trustees; (4) hiring of persons to
provide necessary services to the Plan; (5) issuance of directions to the
Trustees to pay any fees, taxes, charges or
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other costs incidental to the operation and management by the Plan
Administrator; (6) issuance of directions to Trustees as to the amount of cash
to be held uninvested in the Fund; (7) the preparation and filing of all
reports required to be filed by the Plan with any government agency; (8)
compliance with all disclosure requirements imposed by state or federal law;
and (9) maintenance of all records of the Plan other than those required to be
maintained by the Trustees.
(c) PLAN SPONSOR: The Employer shall have the authority and
responsibility for (1) the design of the Plan, including the right to amend the
Plan or the Trust Agreement; (2) the qualification under applicable law of the
Plan and Trust, any amendments thereto, and any document relating thereto; (3)
the funding of the Plan including, in its discretion, the appointment of an
Investment Manager in accordance with Section 22.01; (4) the designation of all
Named Fiduciaries as provided in the Plan and the Trust Agreement; and (5) the
exercise of all other fiduciary functions provided in the Plan or in the Trust
Agreement or necessary to the operation of the Plan except such functions as are
specifically assigned to other Named Fiduciaries pursuant to the Plan or Trust
Agreement.
16.03 NO JOINT FIDUCIARY RESPONSIBILITIES
This Article XVI is intended to allocate to each Named Fiduciary
the individual responsibility for the prudent execution of the functions
assigned to him, and none of such responsibilities or any other responsibility
shall be shared by
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two or more of such Named Fiduciaries unless such sharing shall be provided by
a specific provision of the Plan or Trust Agreement. Whenever one Named
Fiduciary is required by the Plan or Trust Agreement to follow the directions
of another Named Fiduciary, the two Named Fiduciaries shall not be deemed to
have been assigned a shared responsibility, but the responsibility of the Named
Fiduciary giving the directions shall be deemed his sole responsibility, and
the responsibility of the Named Fiduciary receiving those directions shall be
to follow them insofar as such instructions are on their face proper under
applicable law.
16.04 ADVISOR TO NAMED FIDUCIARY
A Named Fiduciary may employ one or more persons to render advice
concerning any responsibility allocated to such Named Fiduciary under the Plan
or Trust Agreement.
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Article XVII
ADMINISTRATION OF PLAN
17.01 APPOINTMENT OF COMMITTEE
The Employer may appoint a Committee to act as its agent in
performing the duties of the Plan Administrator. Should the Employer assume
the responsibility of Plan Administrator directly, the administrative
responsibilities set forth in this Article shall be exercised by the Board of
Directors.
17.02 MEMBERS OF COMMITTEE
The members of the Committee may be officers or Employees of the
Employer or others, all of whom shall serve at the pleasure of the Employer
and, if full-time Employees of the Employer, without compensation.
17.03 SIZE OF COMMITTEE
The size of the Committee shall be as established by the Board of
Directors, but in no event shall it be less than two members.
17.04 RESIGNATION OF COMMITTEE MEMBERS - RELIANCE BY TRUSTEES
Any member of the Committee may resign by delivering his written
resignation to the Board of Directors and to the Committee, and such
resignation shall become effective upon the date it is received by the Board of
Directors. Vacancies created by resignation, death or other cause may be
filled by the Board of Directors or the assigned responsibilities may be
reabsorbed or delegated by the Employer. Whenever a member of the Committee is
so appointed, the President, Treasurer or Secretary of the Employer (or if the
Employer is not a
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corporation, any person having comparable legal authority to act for and bind
the Employer) shall advise the Trustees in writing of the name or names of the
person or persons so appointed, and the Trustees may assume that such person or
persons shall continue in office until advised differently in the same manner.
Whenever the Trustees must or may act upon the direction or approval of the
Plan Administrator, the Trustees may act upon written communication signed by
any member of such Committee, or any agent appointed in writing by all members
of such Committee to act on the Plan Administrator's behalf, and the authority
of any such agent shall be deemed to continue until revoked in writing. The
Trustees shall not be responsible for failure to act without such a
communication.
17.05 POWERS AND DUTIES OF COMMITTEE
All interpretations of the Plan, and questions concerning its
administration and application, shall be determined by the Committee and such
determination shall be binding on all persons unless the Committee is overruled
by the Employer. A majority vote of the Committee shall be sufficient in all
cases. However, any action taken or instructions given by the Committee shall
not discriminate in favor of officers, shareholders, or highly compensated
employees.
17.06 BOOKS AND RECORDS
The Employer and those to whom the Employer has delegated fiduciary
duties shall keep a record of all their proceedings and actions, and shall
maintain all such books of account,
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records, and other data as shall be necessary for the proper administration of
the Plan and to meet the disclosure and reporting requirements of ERISA.
17.07 INDEMNIFICATION FOR LIABILITY
The Employer shall indemnify the Committee and all those to whom
the Employer has delegated fiduciary duties against any and all claims, loss,
damages, expense and liability arising from their responsibilities in
connection with the Plan, unless the same is determined to be due to gross
negligence or willful misconduct.
17.08 ANNUAL VALUATIONS
The Trustees shall make the annual valuations of the assets and
liabilities of this Plan and shall certify such valuation to the Committee and
the Employer.
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Article XVIII
PARTICIPANTS' PROCEDURE FOR CLAIMS
18.01 CLAIMS PROCEDURE
Claims for benefits under the Plan shall be filed with the Plan
Administrator, on forms to be supplied by the Committee, with a duplicate to
the Committee. Written notice of the disposition of a claim shall be furnished
to the claimant within 30 days after the application therefor is filed. In the
event the claim is denied, the reasons for the denial shall be specifically set
forth, pertinent provisions of the Plan shall be cited and, where appropriate,
an explanation as to how the claimant can perfect the claim will be provided.
18.02 CLAIMS REVIEW PROCEDURE
Any Participant, former Participant, or Beneficiary of either, who
has been denied a benefit, or feels aggrieved by any other action of the Plan
Administrator, the Employer, or the Trustees under the Plan shall be entitled
upon request to receive a full and clear statement of the reasons for the
action if not previously furnished. If the claimant wishes further
consideration of his position, he may obtain a form from the Plan Administrator
on which to request a hearing. Such form, together with a written statement of
the claimant's position, shall be filed with the Plan Administrator no later
than 90 days after receipt of the written notification provided for above.
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The Plan Administrator shall schedule an opportunity for a full and fair
hearing of the issue within the next 30 days. The decision following such
hearing shall be made within 30 days and shall be communicated in writing to
the claimant.
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Article XIX
TOP-HEAVY PROVISIONS
19.01 GENERAL
In the event, for any Plan Year commencing after December 31, 1983,
this Plan is determined to be a Top-Heavy Plan (as defined below and in Code
Section 416), then the provisions of this Article XIX shall immediately take
effect and supersede any and all inconsistent provisions contained in this
Plan.
19.02 DEFINITIONS; SPECIAL RULES
For purposes of this Article XIX, the following definitions and
special rules shall apply:
(a) "TOP-HEAVY PLAN" means this Plan for any Plan Year, if, as of
the Determination Date (as defined below),
(1) the sum of the Account balances for all Key Employees (as
defined below) covered by this Plan exceeds sixty percent (60%) of the
same sum for all Employees covered by this Plan; or
(2) the Plan is included in an Aggregation Group (as defined
below) and such group is part of a TopHeavy Group (as defined below).
If any Participant is a Non-Key Employee for any Plan Year, but
such Participant was a Key Employee for any prior Plan Year, the present value
of such Participant's accrued benefit shall not be taken into account for
purposes of determining whether this Plan is a Top-Heavy Plan (or whether any
Aggregation Group which includes this plan is a Top-Heavy
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Group). In addition, for Plan Years beginning after December 31, 1984, if a
Participant or former Participant has not performed any services for any
Employer maintaining the Plan at any time during the five year period ending on
the Determination Date, any accrued benefit for such Participant or Former
Participant shall not be taken into account for the purposes of determining
whether this Plan is a Top-Heavy Plan.
(b) "DETERMINATION DATE" means the date for determining whether
this Plan is a Top-Heavy Plan for any Plan Year, which date shall be the last
day of the preceding Plan Year; except that in the case of the initial Plan
Year, the date shall be the last day of such Plan Year.
(c) "KEY EMPLOYEE" means any Employee or former Employee in the
Plan who, at any time during the Plan Year or any of the four (4) preceding
Plan Years, is or was:
(1) an officer (as defined below) of the Employer having
Section 415 Compensation from the Employer greater than 50 percent of
$90,000 or such other amount as may be in effect from time to time as
prescribed by the Secretary of the Treasury as the limitation specified in
Section 415(b)(1)(A) of the Code (the "Section 415 amount"); or
(2) one of the ten Employees having Section 415 Compensation
from the Employer in excess of the Section 415 amount and owning one of
the ten largest interests) in the Employer; or
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(3) a person owning a five percent (5%) interest in the
Employer; or
(4) a person owning a one percent (1%) interest in the
Employer, and having a Section 415 Compensation from the Employer of more
than $150,000.
For purposes of the foregoing definition, a beneficiary of a Key Employee (who
is not a Key Employee in his own right) shall be considered a Key Employee for
a period not to exceed the fifth Plan Year after the death of the deceased Key
Employee or the applicable lesser period if the deceased Key Employee was
determined to be a Key Employee with respect to a position held in one of the
four Plan Years preceding the Plan Year of his death.
(d) For purposes of paragraph (c) above,
(1) an "Officer" means an administrative executive, engaged by
the Employer for regular and continued service, who has decision-making
authority. The maximum number of Employees who shall be considered
Officers for purposes of determining which Participants are Key Employees
shall be for any Plan Year,
(A) if the Employer (including all employers in an
Aggregation Group) employs no more than thirty (30) persons, then
no more than three (3) individuals shall be treated as Key
Employees by virtue of their status as Officers; or
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(B) if the Employer (including all employers in an
Aggregation Group), employs more than thirty (30) but less than
five hundred (500) persons, then no more than ten percent (10%) of
those persons shall be treated as Key Employees by virtue of their
status as Officers; or
(C) if the Employer (including all employers in an
Aggregation Group), employs five hundred (500) or more persons,
then no more than fifty (50) persons shall be treated as Key
Employees by virtue of their status as Officers.
(2) For purposes of determining percentage ownership,
ownership of stock shall include stock which is considered owned pursuant
to the attribution rules contained in Code Section 318 as amended for use
with Code Section 416, as well as stock owned by the Employee in his own
name.
(3) For purposes of determining whether an Employee has
Section 415 Compensation in excess of $150,000, compensation from each
entity required to be aggregated under Code Sections 414(b), (c) and (m)
shall be taken into account. Such aggregation rules shall not apply to
determining ownership in the Employer.
(4) For purposes of subparagraph (c)(2) above, if two
Employees have the same interest in the Employer, the Employee having the
greater Top-Heavy
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Compensation from the Employer shall be deemed to own a larger interest in
the Employer.
(5) Section 415 Compensation shall include any amount which is
contributed by the Employee pursuant to a salary reduction agreement and
which is not includible in the gross income of the Employee under Section
125, 402(a)(8), 402(h) or 403(b) of the Code.
(e) "NON-KEY EMPLOYEE" means any Employee, or former Employee
(or Beneficiary thereof) who terminated his employment within the four
preceding Plan Years, not included in the definition of Key Employee.
(f) "AGGREGATION GROUP" means a group of two (2) or more plans
(including any plan which was maintained by the Employer during the current or
four preceding Plan Years) with which the Plan is aggregated, according to the
following rules:
(1) The Plan shall be required to be included in an
Aggregation Group with all other plans maintained by the Employer
(including any plans which terminated within the 5-year period terminating
on the Determination Date) if,
(A) the Plan, or any other plan maintained by the
Employer, covers a Participant who is a Key Employee, or
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(B) the Plan, or any other plan maintained by the
Employer, enables a plan covering a Key Employee to meet the
coverage and nondiscrimination requirements contained in Code
Sections 401(a)(4) or 410.
(2) In order to avoid the effect of topheaviness and the
imposition of the provisions of this Article XIX, the Plan may be included
in an Aggregation Group if,
(A) the Plan satisfies the requirements of Code Sections
401(a)(4) and 410 when considered together with the other
qualified retirement plans maintained by the Employer which are a
part of the Aggregation Group, and
(B) the benefits under the Plan are comparable to those
benefits offered by the other plans in the Aggregation Group.
(g) "TOP-HEAVY GROUP" means any Aggregation Group of which this
Plan is a member if the sum of (i) the present value of the accumulated accrued
benefits for all Key Employees under all defined benefit plans contained within
the Aggregation Group, and (ii) the account balances for all Key Employees
under all defined contribution plans contained within the Aggregation Group,
exceeds sixty percent (60%) of the same sum as determined for all participants
in all plans contained within the
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Aggregation Group. The account balances and accrued benefits will be
calculated with reference to the Determination Dates that fall within the same
calendar year.
(h) For purposes of paragraph (g) above, the "present value of the
accumulated accrued benefits" for any participant in any defined benefit plans
contained within the Aggregation Group shall be determined,
(1) as of the most recent valuation date which is within a
twelve (12) month period ending on the Determination Date;
(2) as if the participant terminated service as of the
valuation date referenced in clause (1) above, which valuation date shall
be the same as that which is used in order to compute plan costs for
minimum funding requirements;
(3) shall equal the sum of the participant's accrued benefit
determined by including all distributions made to the participant or his
beneficiary (A) within the plan year that includes the Determination Date,
and (B) within the four (4) preceding plan years; and
(4) for a Participant other than a Key Employee, by using the
single accrual method used for all plans of the Employer and Affiliated
Employers, or if no such single method exists, using a method which
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results in benefits accruing not more rapidly than the slowest accrual
rate permitted under Code Section 411(b)(1)(C); and
(5) by employing the following actuarial assumptions:
(A) each participant has voluntarily terminated service
with the Employer;
(B) a projected increase in the cost of living may be
employed;
(C) the interest and mortality assumptions set forth in
the first sentence of Section 1.02 hereof (unless otherwise
provided in the defined benefit plan);
(D) each participant's spouse shall be assumed to have the
same age as the participant;
(E) benefits are payable at normal retirement age, or at
attained age if later;
(F) non-proportional subsidized early retirement
benefits and other subsidized benefit options shall be taken into
account, and such benefits shall be deemed to commence at the age
of the participant when they are most valuable; and
(G) all actuarial assumptions for all plans in an
Aggregation Group shall be the same.
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(i) For purposes of this Article, the Account balance of any
Participant as of the Determination Date shall be determined;
(1) as of the most recent valuation date which is within a
twelve (12) month period ending on the Determination Date, and
(2) increased for contributions due as of the Determination
Date which are required to be taken into account under Section 415 of the
Code and the Regulations thereunder.
(j) Distributions, rollovers, and transfers will be taken into
account in accordance with Section 416 of the Code and the Regulations
thereunder.
(k) Deductible employee contributions will not be taken into
account in determining whether a plan is a Top-Heavy Plan or part of a Top-
Heavy group.
19.03 MINIMUM BENEFITS
(a) For each year that the Plan is a Top-Heavy Plan, each Non-
Key Employee who is a Participant in the Plan and who has not been separated
from service with the Employer at the end of the Plan Year shall be allocated a
minimum contribution (exclusive of Social Security integration), which, when
expressed as an annual contribution, shall be three percent (3%) of each Non-
Key Employee's Section 415 Compensation during any Plan Year; provided,
however, the minimum percentage contribution shall not exceed the largest
percentage contribution on behalf of any Key Employee. If, in any Plan
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Year a Non-Key Employee is a Participant in both this Plan and a defined
benefit plan included in a Top Heavy Group, five percent (5%) shall be
substituted for three percent (3%) above. The minimum contribution specified
in this Section 19.03 shall not be provided in any Plan Year if the Employer
maintains another qualified retirement plan which provides a minimum
contribution of benefit meeting the requirements of Section 416(c) of the Code
for all Non-Key Employees who are Participants in this Plan.
(b) The minimum contribution described in paragraph (a) shall be
provided to a Non-Key Employee regardless of whether (1) he would not
otherwise participate in the Plan because his Section 415 Compensation is below
any stated amount; (2) he declined to make a mandatory contribution or other
elective contribution; or (3) fails to accrue a Year of Service for the Top-
Heavy Plan Year.
(c) For Plan Years beginning after December 31, 1988, Elective
Deferrals and Matching Contributions made by or on behalf of a Non-Key
Employee shall not be taken into account in determining whether the
requirements of this Section 19.03 has been satisfied.
19.04 COMPENSATION LIMITATION
(a) For any Plan Year beginning before January 1, 1989, in which
the Plan is a Top-Heavy Plan or part of a Top-Heavy Group, only the first
$200,000 of a Participant's Section
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415 Compensation shall be included for the purposes of determining such
Participant's contribution under the Plan; provided, however,
(1) Section 415 Compensation in excess of $200,000 may be
included for purposes of determining a Participant's contributions under
the Plan, if such contribution under the Plan was made prior to the Plan
becoming a Top-Heavy Plan or part of a Top-Heavy Group; and
(2) the $200,000 limit on Section 415 Compensation may be
automatically increased in accordance with cost-of-living increases
pursuant to the regulations promulgated under Code Section 416.
(b) For Plan Years beginning after December 31, 1988, the rules
contained in the last paragraph of Section 1.15 (related to the $200,000
limitation and family aggregation) shall be applied in computing a
Participant's Section 415 Compensation for purposes of this Article.
19.05 VESTING REQUIREMENTS
(a) Whenever the Plan is determined to be a Top-Heavy Plan or
part of a Top-Heavy Group, the following vesting schedule shall be employed:
FULL YEARS OF VESTED
SERVICE PERCENTAGE
--------------- ------------
Less than one NONE
One but less than two 20%
Two but less than three 40%
Three but less than four 60%
Four but less than five 80%
Five or more 100%
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(b) Whenever this Plan ceases to be a Top-Heavy Plan, or part of
a Top-Heavy Group, the vesting schedule may then revert back to any other
schedule employed in this Plan; provided, however,
(1) any portion of the Account balance of any Participant that
was nonforfeitable before the Plan ceased to be either a Top-Heavy Plan
or part of a Top-Heavy Group must remain nonforfeitable; and
(2) any Participant with three (3) or more Years of Service
shall be afforded the opportunity to continue under the foregoing vesting
schedule.
19.06 AGGREGATE LIMIT ON BENEFITS AND CONTRIBUTIONS FOR KEY
EMPLOYEES
(a) For purposes of this Article XIX, whenever the Plan is
determined to be a Top-Heavy Plan or a member of a Top-Heavy Group, the
following changes concerning the applicable limitations on benefits and
contributions for Key Employees participating in the Plan or in any other
Employer-sponsored plans, all of which are part of a Top-Heavy Group, shall
take effect.
(1) "1.0" shall be substituted for "1.25" in the denominators
of the fractions used in computing the aggregate limit pursuant to Section
5.05; and
(2) "$41,500" shall be substituted for "$51,875" in the
transition fraction for any defined contribution plan.
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(b) Notwithstanding the provisions of paragraph (a) above, whenever
this Plan is determined to be a Top-Heavy Plan or a member of a Top-Heavy
Group, if the sum of (i) the Account balances for Key Employees in this Plan
plus (ii) the sum of the account balances for Key Employees in all other
defined contribution plans in a Top-Heavy Group of which this Plan is a
member plus (iii) the sum of the present values of the accumulated accrued
benefits for Key Employees in all defined benefit plans in a Top-Heavy Group
of which this Plan is a member, does not exceed ninety percent (90%) of the
same total for all Participants, and an extra minimum contribution is provided
to all Non-Key Employees by substituting either four percent (4%) for three
percent (3%) or seven and one-half percent (71%) for five percent (5%), as
the case may be, in Section 19.03(a) above, then the fractions used in
computing the aggregate limit pursuant to Section 5.05 of any defined benefit
plan and the transition fraction for this defined contribution plan shall both
be computed as if this Plan were not a Top-Heavy Plan nor a member of a
Top-Heavy Group.
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Article XX
INTENTIONALLY OMITTED
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Article XXI
QUALIFIED CASH OR DEFERRED ARRANGEMENT
21.01 GENERAL
A qualified cash of deferred arrangement within the meaning of
Section 401(k) of the Code is hereby established as part of this Plan, and
shall be administered in accordance with the terms of this Article XXI.
21.02 DEFINITIONS
For purposes of this Article XXI, the following terms shall have
the meanings set forth below:
(a) "ARRANGMENT" means the cash or deferred arrangement established
by this Article XXI.
(b) "ARRANGEMENT ACCOUNT" means a separate account record
maintained by the Trustees and the Plan Administrator. The Arrangement Account
shall consist of up to three subaccounts which shall reflect the amount of the
Elective Deferrals, Qualified Matching Contributions and Qualified Nonelective
Contributions made by or for the Participant, as well as the Fund earnings,
appreciation or depreciation, gains or losses thereon.
(c) "ACTUAL DEFERRAL PERCENTAGE" means with respect to the group of
Eligible Employees who are Highly Compensated Employees and Non-Highly
Compensated Employees (calculated separately for each group) the average
(expressed as a percentage) of the Deferral Percentages of the Participants in
each group for the Plan Year. For Plan Years beginning after December 31,
1988, the Actual Deferral Percentage for each group shall be calculated to the
nearest one-hundredth of one percent.
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(d) "DEFERRAL PERCENTAGE" means the ratio (expressed as a
percentage) of (1) the Elective Deferrals, Qualified Nonelective Contributions
(if any) and Qualified Matching Contributions (if any) allocated to the
Arrangement Account of a Participant eligible to receive such allocations
(other than those Elective Deferrals, Qualified Matching Contributions or
Qualified Nonelective Contributions which the Employer elects to take into
account in computing the contribution percentage test in Section 12.02), to (2)
such Participant's Compensation for that Plan Year. For purposes of
determining the Deferral Percentage, the following additional rules shall
apply:
(i) If any Highly Compensated Employee is a participant in two
or more cash or deferred arrangements (described in Section 401(k) of the
Code) of the Employer or an Affiliated Employer, the Elective Deferrals of
such Employee, and the Employer Nonelective Contributions and Qualified
Matching Contributions allocated to such Employee, under all such
arrangements shall be aggregated to determine such Participant's Deferral
Percentage. For Plan Years beginning after December 31, 1988, this
paragraph shall be applied to cash or deferred arrangements with different
plan years by treating all such arrangements ending within the same
calendar year as a single arrangement.
(ii) If two or more plans (other than an employee stock
ownership plan as defined in Section 4975(e)(7) of the Code) which include
cash or deferred arrangements are considered
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one plan for the purposes of Sections 401(a)(4) or 410(b) of the Code, the
cash or deferred arrangements included in such plans shall be treated as
one arrangement.
(iii) For purposes of determining the Deferral Percentage for
a Highly Compensated Employee who is either a 5% Owner (as defined in
Section 19.02(c)(3)) or is one of the ten Highly Compensated Employees
paid the greatest Section 415 Compensation during the Plan Year, the
Elective Deferrals, Qualified Matching Contributions, Qualified
Nonelective Contributions and Compensation of such Participant shall
include the Elective Deferrals, Qualified Matching Contributions,
Qualified Nonelective Contributions and Compensation of Family Members.
Such Family Members shall be disregarded in determining the Actual
Deferral Percentage for the Non-Highly Compensated Employees, except
that if Regulations so provide, the family aggregation provided by this
paragraph shall be, limited to Family Members who are Highly Compensated
Employees (without regard to this sentence), if such limitation would
produce a greater Deferral Percentage for the family group as so limited.
(e) "ELECTIVE DEFERRALS" means any Employer contributions made to
the Plan at the election of the Participant, in lieu of cash compensation, and
shall include contributions made pursuant to a salary reduction 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
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election to defer under any qualified cash or deferred arrangement as described
in Section 401(k) of the Code, any simplified employee pension cash or deferred
arrangement as described in section 402(h)(1)(B), any eligible deferred
compensation plan under section 457, any plan as described under 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) of the Code
pursuant to a salary reduction agreement.
(f) "ELIGIBLE EMPLOYEE" means any Employee who, in any Plan Year,
is eligible under the terms of this Plan to make Elective Deferrals or
participate in Qualified Matching Contributions or Qualified Nonelective
Contributions to the Plan for such Plan Year, regardless of whether such
Employee actually participates in the Plan.
(g) "FAMILY MEMBER" means with respect to an Employee, such
Employer's spouse, lineal ascendants or descendants and the spouses of such
lineal ascendants or descendants.
(h) "HIGHLY COMPENSATED EMPLOYEE" means any Highly Compensated
active or former Employee. A Highly Compensated active Employee is any active
Employee who, during the "determination year" or "look back year":
(i) was at any time a "five percent owner" as defined in
Section 19.02(c)(3) and (d)(2).
(ii) received Section 415 Compensation from the Employer or
Affiliated Employer in excess of $75,000 (or such
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higher amount as may be prescribed by the Secretary of the Treasury).
(iii) received Section 415 Compensation from the Employer of
Affiliated Employer in excess of $50,000 (or such higher amount as may be
prescribed by the Secretary of the Treasury) and was in the top-paid
group of Employees for the Plan Year. An Employee is in the top-paid
group of Employees for any Plan Year if such Employee is in the group
consisting of the top twenty (20) percent of the Employees when ranked on
the basis of Section 415 Compensation paid during the Plan Year.
(iv) was at any time an officer (as defined in Section
19.02(d)(1)).
Notwithstanding the foregoing, in the case of the "determination
year," an Employee not described in clauses (ii), (iii) or (iv) for the
"look-back year" (without regard to this paragraph) shall not be a Highly
Compensated Employee unless the Employee is a member of the group consisting of
the 100 Employees paid the greatest Section 415 Compensation during the
"determination year". The "determination year" shall be the Plan Year for
which testing is being performed, and the "look-back year" shall be the
immediately preceding twelve-month period.
The determination of Section 415 Compensation shall be based only on
the Section 415 Compensation which is actually paid and shall include any
amount contributed by the Employer pursuant to a salary reduction agreement and
which is not includible in the gross income of the Employee under Sections
125, 402(a)(8), 402(h) or 403(b) of the Code.
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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.
(i) "INCOME" means the income allocable to the "excess amount"
which shall equal the sum of the allocable gain or loss for the
"computation period" and the allocable gain or loss for the period between
the end of the computation period and the date of distribution ("gap
period"). The income allocable to the excess amount for the computation
period and the gap period is calculated separately and is determined by
multiplying the income allocable to the "applicable account balance" for
the computation period or the gap period by a fraction. The numerator of
the fraction is the excess amount for the computation period or gap
period, as the case may be. The denominator of the fraction is the total
applicable account balance as of the end of the computation period or the
gap period, reduced by the gain allocable to such total amount for the
computation period or the gap period and increased by the loss allocable
to such total amount for the computation period or the gap period.
For purposes of this Subsection:
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(1) "Excess amount" means: For purposes of Section 21.06(a),
Excess Deferrals; for purposes of Section 21.06(b), Excess Contributions;
and for purposes of Section 12.02, Excess Aggregate Contributions.
(2) "Computation period" means: For purposes of
Section 21.06(a), the taxable year of the Participant; and for purposes of
Section 21.06(b) and 12.02(d), the Plan Year.
(3) "Applicable account balance" means: For purposes of Section
21.06(a), the Participant's Elective Deferral subaccount; for purposes of
Section 21.06(b), the Participant's Elective Deferral subaccount, and, if
applicable, his Qualified Nonelective Contribution subaccount or Qualified
Matching Contribution subaccount; and for purposes of Section 12.02(d),
the Participant's Voluntary Contribution Account, as well as his Elective
Deferral subaccount or Qualified Nonelective Contribution subaccount which
the Plan Administrator elects to take into account pursuant to Section
12.02(c)(1).
In lieu of the "fractional method" described above, a "safe harbor
method" may be used to calculate the allocable Income for the gap period.
Under such "safe harbor method," ten percent (10%) of the Income allocable to
excess amounts for the calendar months in the gap period multiplied by the
number of calendar months in the gap period. For purposes of determining the
number of calendar months in the gap period, a distribution occurring on or
before the fifteenth day of the month shall be treated as having been made on
the last day of the preceding
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month and a distribution occurring after such fifteenth day shall be treated
as having been made on the first day of the next subsequent month.
Income allocable to any distribution of Excess Deferrals on or
before the last day of the taxable year of the Participant shall be calculated
from the first day of the taxable year of the participant to the date on which
the distribution is made pursuant to either the "fractional method" or the
"safe harbor method."
(j) "NONHIGHLY COMPENSATED EMPLOYEES" means the Eligible
Employees who are not Highly Compensated Employees.
(k) "QUALIFIED MATCHING CONTRIBUTION" means an Employer
contribution, determined in accordance with Section 21.03(b) of the Plan,
which is allocated solely to the Arrangement Account of those Participants
who make Elective Deferrals pursuant to this Article XXI.
(l) "QUALIFIED NONELECTIVE CONTRIBUTION" means Employer
contributions designated for allocation to Arrangement Accounts.
21.03 OPERATION OF THE ARRANGEMENT
(a) ELECTIVE DEFERRALS. By written notice to the Committee on or
before the first day of any Plan Year, any Eligible Employee shall be entitled
to defer a portion of his Compensation for the Plan Year of the designation and
request that such amount be contributed by the Employer to the Fund and
credited as an additional Employer contribution on behalf of such Participant.
Such contribution shall be made by the
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Employer no later than twelve months after the close of the Plan Year of the
designation, or by such earlier date as may be required by final regulations
promulgated by the Secretary of Labor. The contribution may be paid by payroll
deductions. Any amount contributed under this Arrangement shall be invested as
part of the Investment Fund; provided, however, that an Arrangement Account
shall be established therefor.
(b) QUALIFIED MATCHING CONTRIBUTIONS. The Employer may, but is not
obligated to, make a Qualified Matching Contribution for each Plan Year for
which Elective Deferrals have been made, subject to the limitations of Section
21.06(b) of the Plan. Such contribution shall be made by the Employer no later
than the time prescribed in paragraph (a) hereof for making Elective Deferrals.
The amount of the Employer Matching Contribution and the allocation thereof to
the Participants' Arrangement Accounts shall be determined by the Board of
Directors by resolution adopted no later than the time prescribed for making
such contributions. The Qualified Matching Contributions shall be allocated to
each Participant in the same proportion that his Elective Deferrals for the
Plan year bears to the total Elective Deferrals for all Participants for such
Plan Year.
21.04 NONFORFEITURE
A Participant's rights to his Elective Deferrals, Qualified
Nonelective Contributions, Qualified Matching Contributions and any other
amounts in his Arrangement Account
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shall at all times be nonforfeitable, and the Arrangement Account shall not be
considered in applying the vesting schedules set forth in Article IX of the
Plan.
21.05 DISTRIBUTION
(a) A Participant's Arrangement Account shall be distributed to
him, or on his behalf, at the time and in the same manner as distribution of
the Participant's Regular Account is made pursuant to Article VI (Retirement),
Article VII (Death), Article VIII (Disability), Article IX (Termination of
Employment) or termination of the Plan without establishment of another
deferred contribution plan; provided that in the event of a distribution
pursuant to Article IX, the Arrangement Account shall be vested in its
entirety, as provided in Section 21.04 above, and provided further, that
distribution on account of termination of the Plan may be made only if neither
the Employer or Affiliated Employer establishes or maintains another defined
contribution plan (other than an employee stock ownership plan as defined in
Section 4975(e)(7) of the Code). If the Participant has no interest in the
Fund other than his Arrangement Account, his Arrangement Account shall be
deemed to be his Account for purposes of the provisions of this Plan referred
to in the preceding sentence. Distributions shall also be permitted as
provided in paragraphs (b) and (c) of this Section 21.05.
(b) A distribution of all or a portion of a Participant's
Arrangement Account may be made due to financial hardship, which shall be an
immediate and heavy financing need
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of the Participant which cannot be satisfied with funds from other sources that
are reasonably available to the Participant. The determination of hardship
shall be made by the Plan Administrator based on uniform, non-discriminatory
standards to be established by the Plan Administrator. Notwithstanding the
preceding sentence, for distribution in Plan Year beginning after December 31,
1988, a Participant shall be considered to have an immediate and heavy
financial need if the distribution is made on account of:
(1) Medical expenses described in Section 213(d) of the Code
incurred by the Participant, his spouse or any of his dependents (as
defined in Section 152 of the Code);
(2) The purchase (excluding mortgage payments) of a principal
residence for the Participant;
(3) Payment of tuition for the next semester of post-
secondary education for the Participant, his spouse, children, or
dependents;
(4) The need to prevent the eviction of the Participant from
his principal residence or foreclosure on the mortgage of the
Participant's principal residence; or
(5) Any other need which the Secretary of the Treasury deems to
be an immediate and heavy financial need in accordance with Regulations.
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In no event shall any hardship determination be made without
submission of a written statement of the Participant stating the nature of the
financial hardship and the amount required, and certifying that such funds are
not reasonably available to the Participant from other sources. The statement
shall contain such other facts required by the Plan Administrator, including,
for distributions in Plan Years beginning after December 31, 1988,
representations that the financial need cannot be relieved:
(1) Through reimbursement or compensation by insurance or
otherwise,
(2) By reasonable liquidation of the Participant's assets
(including assets of his spouse or married children, if reasonably
available), to the extent such liquidation would not itself cause an
immediate and heavy financial need,
(3) By cessation of Elective Deferrals under the Plan, or
(4) By obtaining any other available distributions from plans
maintained by the Employer or Affiliated Employer, or by borrowing from
commercial sources on reasonable commercial terms.
(c) A Participant's Arrangement Account may also be distributed
upon:
1. The disposition by a corporation to an unrelated corporation
of substantially all of the assets (within the meaning of Section
409(d)(2) of the Code) used in a trade or
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business of such corporation if such corporation continues to maintain
this plan after the disposition, but only with respect to employees who
continue employment with the corporation acquiring such assets.
2. The disposition by a corporation to an unrelated entity of
such corporation's interest in a subsidiary (within the meaning of section
409(d)(3) of the Code) if such corporation continues to maintain this
plan, but only with respect to employees who continue employment with such
subsidiary.
21.06 LIMITATIONS
(a) (1) Effective January 1, 1987, no Employee shall be permitted
to make Elective Deferrals during any calendar year in excess of $7,000,
or such higher amount as prescribed by the Secretary of the Treasury
pursuant to Section 402(g) of the Code. In the event the foregoing
limitation is exceeded, the Plan Administrator shall direct the Trustee to
distribute the Excess Deferrals (as defined below), and any Income
allocable to the Excess Deferrals, to the Participant not later than April
15th following the close of the Participant's taxable year.
(2) In the event that a Participant is also a participant in
(A) another qualified cash or deferred arrangement (as defined in Section
401(k) of the Code), (B) a simplified employee pension (as defined in
Section 408(k) of the Code), or (C) a salary reduction arrangement (within
the meaning of Section 3121(a)(5)(D) of the Code) and the elective
deferrals, as defined in Section 402(g)(3) of the Code, made
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under such other arrangements) and this Plan cumulatively exceed $7,000
(or such higher amount as may be prescribed by the Secretary of the
Treasury) for such Participant's taxable year, the Participant may, not
later than March 1 following the close of his taxable year, notify the
Plan Administrator in writing of such Excess Deferrals and request that
his Elective Deferrals under this Plan be reduced by an amount specified
by the Participant. Any Excess Deferral (and any Income allocable
thereto) shall then be distributed in the same manner as provided in
paragraph (1) of this subsection (a).
(3) "Excess Deferrals" means those Elective Deferrals that are
includible in a Participant's gross income under Section 402(g) of the
Code to the extent such Participant's Elective Deferrals for a taxable
year exceed the dollar limitation under such Code section. Excess
Elective Deferrals shall be treated as Annual Additions under the plan.
(b) Allocations to a Highly Compensated Employee's Arrangement
Account shall be limited to each Plan Year so that one of the following tests
are satisfied:
(1) The Actual Deferral Percentage for the Eligible Employees
who are Highly Compensated Employees shall not be more than the Actual
Deferral Percentage of the Eligible Employees who are Compensated
Employees multiplied by 1.25, or (2) The excess of the Actual Deferral
Percentage for the Eligible Employees who are Highly Compensated Employees
over the Actual Deferral Percentage for the Eligible Employees who are
Non-Highly Compensated Employees shall not be more than
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two percentage points. Additionally, the Actual Deferral Percentage for
the Eligible Employees who are Highly Compensated Employees shall not
exceed the Actual Deferral Percentage for the Eligible Employees who are
Non-Highly Compensated Participants multiplied by 2. The provisions of
Section 401(k)(3) of the Code and Regulation Section 1.401(k)-l(b) are
incorporated herein by reference.
However, in order to prevent the multiple use of the alternative
method described in (2) above and in Code Section 401(m)(9)(A), any Highly
Compensated Employees eligible to make Elective Deferrals and to make Employee
contributions or to receive matching contributions under this Plan or under any
other plan maintained by the Employer or an Affiliated Employer, shall have his
Actual Contribution Ratio reduced pursuant to Regulation 1.401(m)-2, the
provisions of which are incorporated herein by reference.
(c) Elective Deferrals, Qualified Nonelective Contributions and
Qualified Matching Contributions shall be treated as Employer contributions for
purposes of the limitation on Annual Additions contained in Section 5.05 and
the requirement that Employer contributions be deductible in Section 4.01 of
the Plan.
(d) In order to enable at least one of the tests in subsection (b)
to be satisfied for any Plan Year, the Plan Administrator may adjust the plan
contributions in accordance with one or more of the following options:
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(1) Within twelve months after the end of the Plan Year, the
Employer may make a Qualified Nonelective Contribution on behalf of the
Non-Highly Compensated Employee in order to satisfy one of the
limitations in paragraph (b). The Qualified Nonelective Contribution
shall be allocated to Arrangement Accounts for all eligible Non-Highly
Compensated Employees in the ratio that each such Employee's Compensation
bears to the total Compensation of all eligible Non-Highly Compensated
Employees.
(2) (A) The Plan Administrator may distribute the Excess
Contributions (as defined below and determined in accordance with
Section 1.401(k)-l(f)(2) of the Regulations) of the Highly
Compensated Employee, and the Income allocable to such portion, to
such Highly Compensated Employee 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. (Distributions
made after the aforementioned 21 month period will be subject to a
ten percent (10%) excise tax pursuant to Section 4979 of the Code.)
The Excess Contributions shall be distributed to the Highly
Compensated Employees, beginning with the Highly Compensated
Employee with the highest Deferral Percentage, until one of the
tests set forth in subsection (b) is satisfied. Excess
Contributions with respect to the Plan shall be determined after
the determination of any Excess Deferrals.
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(B) Excess Contributions shall be distributed from the
Participant's Elective Deferral subaccount and Qualified Matching
Contribution subaccount (if applicable) in proportion to the participant's
Elective Deferrals and Qualified Matching Contributions (to the extent
used in computing the Participant's Deferral Percentage) for the Plan
Year. Excess Contributions shall be distributed from the Participant's
Qualified Nonelective Contribution subaccount only to the extent that such
Excess Contributions exceed the balance in the Participant's Elective
Deferral subaccount and Qualified Matching Contribution subaccount.
(C) "Excess Contributions" means, with respect to any Plan
Year, the excess of:
(i) The aggregate amount of contributions actually taken
into account in computing the Deferral Percentages of Highly
Compensated Employees for such Plan Year, over
(ii) The maximum amount of such contributions permitted by
the limitation in subsection (b) (determined by reducing
contributions made on behalf of Highly Compensated Employees in
order of their Deferral Percentages, beginning with the highest of
such percentages).
(3) Any Excess Contribution or portion thereof (but not in
excess of the Participant's Elective Deferrals) and the Income allocable
thereto which would otherwise be distributed to him may be recharacterized
as a Voluntary Employee Contribution under Section 12.01 hereof, provided
such
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recharacterization does not cause the limitations contained in Section
12.02 to be exceeded, and provided further that such recharacterization
shall occur no later than two and one-half months after the close of the
Plan Year to which the recharacterization so relates. The
recharacterization shall be deemed to have occurred on the date on which
the last Highly Compensated Employee with Excess Contributions to be
recharacterized is notified of the recharacterization and the tax
consequences thereof. Recharacterization shall be permitted only in
accordance with Section 1.401(k)-l(f)(3) of the Regulations.
(e) The treatment of Elective Deferrals, Qualified Matching
Contributions, Qualified Nonelective Contributions, Excess Contributions,
Excess Deferrals and the determination of the Actual Deferral Percentage of any
Participant shall satisfy such other requirements as may be prescribed in
Regulations.
(f) The Employer shall maintain adequate records to demonstrate
compliance with the limitations of this Section 21.06.
21.07 EFFECTIVE DATE
This Article shall be effective for Plan Years beginning after
December 31, 1986, except as otherwise noted.
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Article XXII
MISCELLANEOUS
22.01 INVESTMENT MANAGER
As mentioned in Section 16.02(c), the Employer may appoint an
Investment Manager, who will be authorized to retain and consult with
accountants, actuaries and other professionals in the discharge of his
responsibilities. The Investment Manager shall be charged with management of
the assets of the Trust, including the power to direct the acquisition and
disposition of any such assets. The Investment Manager shall serve at the
pleasure of the Employer but may resign by written notice submitted to the
Employer.
22.02 PARTICIPANTS' RIGHTS
Except as may be specifically provided by law, neither the
establishment of this Plan and the Trust, nor any modification thereof, nor the
creation of any fund or account, nor the issuance of any Insurance Policy, nor
the payment of any benefits, shall be construed as giving to any Participant or
other person any legal or equitable right against the Employer, or any officer
or employee thereof, or the Trustees, or the Investment Manager, or the
Insurer, except as provided herein, in the Trust Agreement or by the terms of
an Insurance Policy. Under no circumstances shall the terms of employment of
any Participant be modified or in any way affected hereby; provided, however,
that in no event may a Participant be divested of any nonforfeitable benefit
he is eligible to receive under the Plan.
-112-
<PAGE>
22.03 GENDER AND NUMBER
For purposes of this Plan and the Trust Agreement, the singular
form shall include the plural (and vice versa) and the masculine gender shall
include the feminine and neuter genders, as the context may require.
22.04 BENEFICIARY DISABILITY
In the event any person to whom benefit payments are due or payable
hereunder shall be unable to care for his affairs because of illness or
accident, any such payment may be made, unless prior claim shall have been made
by a duly qualified guardian or other legal representative, to the spouse,
parent, brother, sister or other person deemed by the Plan Administrator to
have incurred expense for such person and on such terms as the Plan
Administrator may impose. Any such payment and any payment to a Participant or
Beneficiary or to his legal representative made pursuant to the provisions
hereof shall, to the extent thereof, be in full satisfaction of all claims
arising hereunder against this Plan, the Trust, the Trustees, the Plan
Administrator, the Employer, or any of them.
22.05 LEGAL ACTIONS
Except as may be specifically provided for by law, in any action or
proceeding involving the Trust, or any property constituting part or all
thereof, or its administration, the Employer, the Investment Manager, and the
Trustees shall be the only necessary parties. No Participant or other person
shall have recourse toward the satisfaction of any benefit accrued under this
Plan other than from the Fund.
-113-
<PAGE>
Except as may be specifically provided for by law, any final
judgment (if not appealed or appealable) that may be entered in any such action
or proceeding shall be binding and conclusive on the parties hereto and all
persons having or claiming to have any interest in the Trust or under the Plan.
22.06 CONSTRUCTION OF PLAN
This Plan shall be construed according to the laws of the State of
Ohio, and all provisions hereof shall be administered according to the laws of
such state, except to the extent preempted by ERISA or other federal law.
IN WITNESS WHEREOF, the Employer has caused this Plan to be
executed by its duly authorized officers and its corporate seal to be affixed
hereto on the day and date first above written.
RESOURCE AMERICA, INC.
By: /S/ Francis J. Bagnell
----------------------
(Vice) President
Attest: /s/ Michael L. Staines
----------------------
(Assistant) Secretary
[Corporate Seal]
-114-
<PAGE>
LEDGEWOOD LAW FIRM Exhibit 5
A PROFESSIONAL CORPORATION
1521 LOCUST STREET
PHILADELPHIA, PENNSYLVANIA 19102
---------
TELEPHONE: (215) 731-9450 o FAX (215) 735-2513
April 29, 1996
Resource America, Inc.
1521 Locust Street, Suite 400
Philadelphia, PA 19102
Gentlemen/Ladies:
We have acted as counsel to Resource America, Inc. ("RAI") in connection
with the preparation and filing by RAI of a registration statement (the
"Registration Statement") on Form S-8 under the Securities Act of 1933, as
amended (the "Act"), with respect to the registration of RAI's Investment
Savings Plan under which 10,776 shares of RAI Class A Common Stock, par value
$.01 per share (the "Common Stock"), may be sold. In connection therewith, you
have requested our opinion as to certain matters referred to below.
In our capacity as such counsel, we have familiarized ourselves with the
actions taken by RAI in connection with the registration of the Common Stock.
We have examined the originals or certified copies of such records, agreements,
certificates of public officials and others, and such other documents,
including the Registration Statement, as we have deemed relevant and necessary
as a basis for the opinions hereinafter expressed. In such examination, we
have assumed the genuineness of all signatures on original documents and the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all copies submitted to us as conformed or photostatic
copies, and the authenticity of the originals of such latter documents. We are
attorneys admitted to practice in the Commonwealth of Pennsylvania and,
accordingly, we express no opinion with respect to matters governed by the laws
of any jurisdiction other than the Commonwealth of Pennsylvania and the federal
laws of the United States of America.
<PAGE>
Based upon and subject to the foregoing, we are of the opinion that:
1. RAI is a corporation which has been duly formed, is validly existing
and is in good standing under the laws of the State of Delaware. RAI has full
power and authority to issue the Common Stock.
2. When issued as set forth in the Registration Statement, the Common
Stock will be validly issued, fully paid and non-assessable.
We consent to the references to this opinion and to Ledgewood Law Firm,
P.C. in the Prospectus included as part of the Registration Statement, and to
the inclusion of this opinion as an exhibit to the Registration Statement.
Very truly yours,
/S/ Ledgewood Law Firm, P.C.
Ledgewood Law Firm, P.C.
<PAGE>
CONSENT OF GRANT THORNTON LLP
We have issued our reports dated November 23, 1995 accompanying the
consolidated financial statements of Resource America, Inc. and Subsidiaries
included in the Annual Report on Form 10KSB for the year ended September 30,
1995 which are incorporated by reference in this Registration Statement. We
consent to the incorporation by reference in the Registration Statement of the
aforementioned reports and to the use to our name as it appears under the
caption "Experts."
/s/ Grant Thornton LLP
Cleveland, Ohio
May 2, 1996
