<PAGE>
As filed with the Securities and Exchange Commission on ____________, 1999
Registration No. 333-________
- ------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
----------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
HUDSON HOTELS CORPORATION
(Exact name of Registrant as specified in its charter)
NEW YORK 16-1312167
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
300 BAUSCH & LOMB PLACE, ROCHESTER, NY 14604
(716) 454-3400
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive office)
HUDSON HOTELS CORPORATION
RETIREMENT AND SAVINGS PLAN
(Full title of plan)
E. ANTHONY WILSON, CHAIRMAN
HUDSON HOTELS CORPORATION
300 BAUSCH & LOMB PLACE
ROCHESTER, NY 14604
TELEPHONE: (716) 454-3400
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
ALAN S. LOCKWOOD, ESQ.
BOYLAN, BROWN, CODE, FOWLER, VIGDOR & WILSON, LLP
2400 CHASE SQUARE
ROCHESTER, NY 14604
Page 1 of 9 Pages
Exhibit Index at Page 9
<PAGE>
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum
Title of Offering Aggregate
Securities to Amount to be Price Per Offering Amount of
Be Registered Registered (1) Share (2) Price (2) Registration Fee
- ------------- --------------- ------------- -------------- ----------------
<S> <C> <C> <C> <C>
Common Shares, 31,740 shares $1.125 $35,707.50 $9.93
$.001 par value
</TABLE>
- ------------------------------------------------------------------------------
(1) These shares represent the Company's contribution to the Retirement
and Savings Plan (the "Plan") to match 25% of its employees' contributions. In
addition, pursuant to Rule 416(c) under the Securities Act, this Registration
Statement covers an indeterminate number of shares to be offered or sold
pursuant to the Plan described herein.
(2) Estimated solely for the purpose of calculating the registration
fee pursuant to Rules 457(c) and 457(h) under the Securities Act of 1933 and
based upon the average of the high and low sales prices of the Registrant's
Common Shares as reported on the Nasdaq National Market on July 20, 1999.
2
<PAGE>
PART II
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents heretofore filed with the Securities and
Exchange Commission (the "Commission") by Hudson Hotels Corporation (the
"Registrant") are incorporated by reference in this Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1998.
(b) The Registrant's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1999.
(c) The description of the Registrant's Common Shares
contained in the Registrant's Registration Statement on Form S-18 filed by the
Registrant with the Securities and Exchange Commission on January 27, 1989,
including any amendment or report filed for the purpose of updating such
description.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), prior to the filing of a post-effective amendment to this
Registration Statement which indicates that all securities offered hereby have
been sold or which deregisters all securities remaining unsold, shall be deemed
to be incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing of such documents (such documents, and the
documents enumerated above, being hereafter referred to as "Incorporated
Documents").
Any statement contained in an Incorporated Document shall be deemed to
be modified or superseded for purposes of this Registration Statement to the
extent that a statement contained herein or in any other subsequently filed
Incorporated Document modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Inapplicable. The class of securities to be offered is registered under
Section 12 of the Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Legal matters in connection with the Common Shares issuable under the
Plan will be passed upon by Messrs. Boylan, Brown, Code, Fowler, Vigdor &
Wilson, LLP, 2400 Chase Square, Rochester, NY 14604. Alan S. Lockwood, a partner
of this firm, is a
3
<PAGE>
Director and Secretary of the Registrant. He owns and has options to purchase
Common Shares of the Registrant. He is not eligible to participate in the Plan.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Restated Certificate of Incorporation of the Registrant (the
"Restated Certificate"), provides in relevant part that
To the fullest extent now or hereafter provided for or
permitted by law, directors shall not be liable to the Corporation or
to its shareholders for damages for any breach of duty in their
capacity as directors.
Sections 721 through 726 of the Business Corporation Law of the State
of New York (the "BCL") provide the statutory basis for the indemnification by a
corporation of its officers and directors when such officers and directors have
acted in good faith, for a purpose reasonably believed to be in the best
interests of the corporation, and subject to specified limitations set forth in
the BCL.
The BCL was also amended in 1986 to allow corporations to provide for
indemnification of corporate directors and officers on a broader basis than had
previously been permissible. Pursuant to this statutory authority, and as
authorized by Article V of the Registrant's By-Laws, directors and officers of
the Registrant, and certain Registrant employees, have been availed of the
broadest scope of permissible indemnification coverage consistent with the BCL
changes.
Article V of the Registrant's By-Laws provide as follows:
5.1 INDEMNIFICATION. The Corporation shall indemnify (a) any
person made or threatened to be made a party to any action or
proceeding by reason of the fact that he, his testator or intestate, is
or was a director or officer of the Corporation and (b) any director or
officer of the Corporation who served any other company in any capacity
at the request of the Corporation, in the manner and to the maximum
extent permitted by the Business Corporation Law of New York, as
amended from time to time; and the Corporation may, in the discretion
of the Board of Directors, indemnify all other corporate personnel to
the extent permitted by law.
5.2 AUTHORIZATION. The provisions for indemnification set
forth in Section 5.1 hereof shall not be deemed to be exclusive. The
Corporation is hereby authorized to further indemnify its directors or
officers in the manner and to the extent set forth in (i) a resolution
of the shareholders,(ii) a resolution of
4
<PAGE>
the directors, or (iii) an agreement providing for such
indemnification, so long as such indemnification shall not be expressly
prohibited by the provisions of the Business Corporation Law of New
York.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Inapplicable.
ITEM 8. EXHIBITS.
See Exhibit Index.
ITEM 9. UNDERTAKINGS.
(a) RULE 415 OFFERING
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933 (the "Securities Act");
(ii) To reflect in the prospectus any facts
or events arising after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement;
(iii) To include any material information
with respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in the
Registration Statement; provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed with or furnished to the Commission by the Registrant pursuant to Section
13 or Section 15(d) of the Exchange Act that are incorporated by reference in
the Registration Statement.
(2) That, for the purpose of determining any
liability under the Securities Act, each such post-effective amendment shall be
deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
5
<PAGE>
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY
REFERENCE
The undersigned Registrant hereby undertakes that,
for purposes of determining any liability under the Securities Act, each filing
of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE
SECURITIES ACT OF 1933
Insofar as indemnification by the Registrant for
liabilities arising under the Securities Act may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the provisions
described in Item 6, or otherwise, the Registrant has been advised that in the
opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
6
<PAGE>
SIGNATURES
Pursuant to the requirement 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 had duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Rochester, State of New York on July 23, 1999.
Hudson Hotels Corporation
By: /s/ E. Anthony Wilson
------------------------------------------
E. Anthony Wilson
Chairman and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears
below constitutes and appoints each of E. Anthony Wilson and John M. Sabin,
acting alone or together, as such person's true and lawful attorney-in-fact and
agent with full powers of substitution and revocation, for such person and in
such person's name, place, and stead, in any and all capacities, to sign any and
all amendments (including post-effective amendments) to this Registration
Statement and to file the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent, acting alone, full power and authority to do
and perform each and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as such person might or could do in person,
hereby ratifying and confirming all that said attorney-in-fact and agent, acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on July 23, 1999.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ E. Anthony Wilson
---------------------------------- Director, Chairman and
E. Anthony Wilson Chief Executive Officer (Principal
Executive Officer)
/s/ John M. Sabin
---------------------------------- Chief Financial Officer and
John M. Sabin Executive Vice President (Principal
Financial Officer)
</TABLE>
7
<PAGE>
<TABLE>
<S> <C>
/s/ Taras M. Kolcio
---------------------------------- Chief Accounting Officer and
Taras M. Kolcio Vice President (Principal Accounting
Officer)
/s/ Ralph L. Peek
---------------------------------- Vice President, Treasurer
Ralph L. Peek and Director
/s/ Michael T. George
---------------------------------- President, Chief Operating Officer
Michael T. George and Director
/s/ Richard C. Fox
---------------------------------- Director
Richard C. Fox
/s/ Alan S. Lockwood
---------------------------------- Director
Alan S. Lockwood
</TABLE>
8
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description Location
------ ----------- --------
<S> <C> <C>
4.1 Hudson Hotels Corporation *
Retirement and Savings Plan and
Adoption Agreement
5.1 Opinion and consent of Boylan, *
Brown, Code, Fowler, Vigdor &
Wilson, LLP, counsel for the
Registrant as to the legality of
the Common Shares being registered
23.1 Consent of Bonadio & Co., LLP, *
Independent Public Accountants
23.2 Consent of PricewaterhouseCoopers, LLP, *
Independent Public Accountants
23.3 Consent of Boylan, Brown, Code, Included in Exhibit
Fowler, Vigdor & Wilson, LLP 5.1 to this Registra-
tion Statement
</TABLE>
* Included as part of the electronic submission of this Registration
Statement.
9
<PAGE>
EXHIBIT 4.1
SMITH BARNEY SHEARSON
---------------------
A PRIMERICA Company
SMITH BARNEY SHEARSON
PROTOTYPE DEFINED CONTRIBUTION
PLAN DOCUMENT #05
AND
TRUST AGREEMENT
<PAGE>
ADOPTION OF A QUALIFIED PLAN HAS IMPORTANT LEGAL AND TAX IMPLICATIONS. EMPLOYERS
SHOULD CONSULT WITH THEIR COUNSEL CONCERNING THE ADOPTION OF THE PLAN.
Smith Barney Shearson
Prototype Defined Contribution
Plan Document
Part I
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SECTION 1. INTRODUCTION AND CONSTRUCTION..................................................................1
1.1. INTRODUCTION...................................................................................1
1.2. CONTROLLING LAWS...............................................................................1
1.3. CONSTRUCTION...................................................................................1
1.4. TRA 86 AMENDMENTS..............................................................................1
SECTION 2. DEFINITIONS....................................................................................1
2.1. ACCOUNT........................................................................................1
2.2. ACTIVE PARTICIPANT.............................................................................1
2.3. ADOPTION AGREEMENT.............................................................................2
2.4. AFFILIATE......................................................................................2
2.5. ALLOCATION DATE................................................................................2
2.6. AVERAGE ANNUAL COMPENSATION....................................................................2
2.7. BENEFICIARY....................................................................................2
2.8. BOARD..........................................................................................2
2.9. CODE...........................................................................................2
2.10. COMPENSATION...................................................................................2
2.11. COVERED COMPENSATION...........................................................................4
2.12. DISABILITY OR DISABLED.........................................................................4
2.13. EARLY RETIREMENT AGE...........................................................................4
2.14. EARNED INCOME..................................................................................4
2.15. EFFECTIVE DATE.................................................................................4
2.16. ELECTION FORM..................................................................................4
2.17. ELECTIVE DEFERRAL..............................................................................4
2.18. ELECTIVE DEFERRAL ACCOUNT......................................................................4
2.19. ELIGIBLE EMPLOYEE..............................................................................4
2.20. EMPLOYEE.......................................................................................5
2.21. EMPLOYEE ACCOUNT...............................................................................5
2.22. EMPLOYEE CONTRIBUTION..........................................................................5
2.23. EMPLOYER.......................................................................................5
2.24. EMPLOYER ACCOUNT...............................................................................5
2.25. EMPLOYER CONTRIBUTION..........................................................................5
2.26. ENTRY DATE.....................................................................................5
2.27. ERISA..........................................................................................5
2.28. FAMILY MEMBERS.................................................................................5
2.29. FINAL COMPLIANCE DATE..........................................................................5
2.30. FORFEITURE.....................................................................................5
2.31. 401 (k) PLAN...................................................................................5
</TABLE>
ii
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<TABLE>
<CAPTION>
<S> <C> <C> <C>
2.32. FUND...........................................................................................5
2.33. FUND EARNINGS..................................................................................5
2.34. HIGHLY COMPENSATED EMPLOYEE ...................................................................5
2.35. INTEGRATION LEVEL..............................................................................5
2.36. LEASED EMPLOYEE ...............................................................................5
2.37. MATCHING ACCOUNT...............................................................................5
2.38. MATCHING CONTRIBUTION..........................................................................6
2.39. MAXIMUM DISPARITY RATE.........................................................................6
2.40. MONEY PURCHASE PENSION PLAN....................................................................6
2.41. NET PROFITS....................................................................................6
2.42. NONHIGHLY COMPENSATED EMPLOYEE.................................................................6
2.43. NORMAL RETIREMENT AGE..........................................................................6
2.44. OWNER-EMPLOYEE.................................................................................6
2.45. PAIRED PLANS...................................................................................6
2.46. PARTICIPANT....................................................................................6
2.47. PARTICIPATING AFFILIATE........................................................................6
2.48. PARTICIPATION REQUIREMENT......................................................................7
2.49. PLAN...........................................................................................7
2.50. PLAN ADMINISTRATOR.............................................................................7
2.51. PLAN YEAR......................................................................................7
2.52. PRE-EXISTING PLAN..............................................................................7
2.53. PROFIT SHARING PLAN ...........................................................................7
2.54. PROTOTYPE SPONSOR..............................................................................7
2.55. QUALIFIED MATCHING CONTRIBUTION................................................................7
2.56. QUALIFIED MATCHING ACCOUNT.....................................................................7
2.57. QUALIFIED NONELECTIVE CONTRIBUTION ............................................................7
2.58. QUALIFIED NONELECTIVE ACCOUNT..................................................................7
2.59. ROLLOVER ACCOUNT...............................................................................7
2.60. ROLLOVER CONTRIBUTION..........................................................................7
2.61. SELF-EMPLOYED INDIVIDUAL.......................................................................7
2.62. SPOUSE.........................................................................................7
2.63. TARGET BENEFIT PENSION PLAN....................................................................7
2.64. TAXABLE WAGE BASE..............................................................................7
2.65. TRA 86.........................................................................................7
2.66. TRUST AGREEMENT................................................................................7
2.67. TRUSTEE........................................................................................7
2.68. VALUATION DATE.................................................................................7
SECTION 3. SERVICE DEFINITIONS AND RULES...................................................................7
3.1. HOUR OF SERVICE METHOD (STANDARD OPTION.........................................................8
(A) BREAK IN SERVICE............................................................................8
(1) GENERAL.................................................................................8
(2) MATERNITY/PATERNITY RULE................................................................8
(B) COMPUTATION PERIOD..........................................................................8
(1) GENERAL.................................................................................8
(2) VESTING.................................................................................8
(3) PARTICIPATION...........................................................................8
(4) CHANGE IN COMPUTATION PERIOD............................................................8
(C) HOUR OF SERVICE.............................................................................8
</TABLE>
iii
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<TABLE>
<CAPTION>
<S> <C> <C> <C>
(1) GENERAL.................................................................................8
(2) DETERMINATION...........................................................................9
(D) YEAR OF SERVICE.............................................................................9
(E) CHANGE IN SERVICE CALCULATION METHOD........................................................9
3.2. ELAPSED TIME METHOD (ALTERNATIVE)...............................................................9
(A) BREAK IN SERVICE............................................................................9
(1) GENERAL.................................................................................9
(2) MATERNITY/PATERNITY RULE................................................................9
(B) HOUR OF SERVICE.............................................................................9
(C) PERIOD OF SEVERANCE.........................................................................9
(D) PERIOD OF SERVICE...........................................................................9
(1) GENERAL.................................................................................9
(2) AGGREGATION............................................................................10
(E) YEAR OF SERVICE............................................................................10
(F) CHANGE IN SERVICE CALCULATION METHOD.......................................................10
3.3. SERVICE BEFORE EFFECTIVE DATE..................................................................10
3.4. SERVICE WITH PREDECESSOR EMPLOYER..............................................................10
3.5. LEASED EMPLOYEES...............................................................................10
3.6. SERVICE WITH AFFILIATES........................................................................10
3.7. SPECIAL BREAK IN SERVICE RULES.................................................................10
(A) STANDARD OPTION............................................................................10
(B) ALTERNATIVE................................................................................10
(1) ONE YEAR HOLD-OUT RULE.................................................................10
(2) PRE-PARTICIPATION RULE.................................................................11
(3) RULE OF PARITY.........................................................................11
(4) ALTERNATIVE MATERNITY/PATERNITY RULE...................................................11
(C) VESTING ON REEMPLOYMENT AFTER BREAK IN SERVICE.............................................11
3.8. SERVICE EXCLUSIONS FOR VESTING PURPOSES........................................................11
(A) STANDARD OPTION............................................................................11
ALTERNATIVE................................................................................11
SECTION 4. PARTICIPATION..................................................................................11
4.1. GENERAL RULE...................................................................................11
4.2. SPECIAL RULES..................................................................................11
(A) PRE-EXISTING PLAN..........................................................................11
(B) REEMPLOYMENT BEFORE SATISFYING PARTICIPATION REQUIREMENT...................................11
(C) REEMPLOYMENT AFTER SATISFYING PARTICIPATION REQUIREMENT....................................12
(D) STATUS CHANGE..............................................................................12
4.3. PARTICIPANT INFORMATION........................................................................12
NO EMPLOYMENT RIGHTS...........................................................................12
SECTION 5. CONTRIBUTIONS..................................................................................12
5.1. PROFIT SHARING PLAN............................................................................12
(A) STANDARD OPTION............................................................................12
(B) ALTERNATIVE................................................................................12
5.2. MONEY PURCHASE PENSION PLAN....................................................................12
(A) STANDARD OPTION............................................................................12
(B) ALTERNATIVE................................................................................12
5.3. 401 (k) PLAN...................................................................................12
(A) GENERAL....................................................................................12
(B) MATCHING CONTRIBUTIONS.....................................................................12
</TABLE>
iv
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<TABLE>
<S> <C> <C> <C>
(C) QUALIFIED MATCHING CONTRIBUTIONS...........................................................12
(D) QUALIFIED NONELECTIVE CONTRIBUTIONS........................................................13
(E) DISCRETIONARY EMPLOYER CONTRIBUTION........................................................13
(F) ELECTIVE DEFERRALS.........................................................................13
(G) EMPLOYEE CONTRIBUTIONS.....................................................................13
(H) ELECTION RULES AND LIMITATIONS.............................................................13
(1) GENERAL................................................................................13
(2) COMMENCEMENT OF ELECTION...............................................................13
(3) REVISION OF ELECTION...................................................................13
(4) TERMINATION OF ELECTION................................................................13
(5) RESUMPTION AFTER TERMINATION...........................................................14
(6) EFFECTIVE DATES OF ELECTIONS...........................................................14
(I) APPLICATION OF FORFEITURES.................................................................14
5.4. TARGET BENEFIT PENSION PLAN....................................................................14
(A) GENERAL....................................................................................14
(B) THEORETICAL RESERVE........................................................................14
(C) PAST SERVICE CREDITS.......................................................................15
(D) TRA 86 AMENDMENT...........................................................................15
(E) SPECIAL DEFINITIONS AND RULES..............................................................15
(1) CUMULATIVE DISPARITY LIMIT............................................................15
(2) CUMULATIVE DISPARITY REDUCTION........................................................15
(3) CURRENT STATED BENEFIT................................................................15
(4) FRESH-START DATE......................................................................16
(5) FROZEN ACCRUED STATED BENEFIT.........................................................16
(6) MAXIMUM EXCESS ALLOWANCE..............................................................16
(7) OVERALL PERMITTED DISPARITY LIMIT.....................................................16
(8) PRIOR SAFE HARBOR PLAN................................................................16
(9) YEAR OF PARTICIPATION.................................................................16
(10) YEARS OF PROJECTED PARTICIPATION1.....................................................16
5.5. ROLLOVER CONTRIBUTIONS.........................................................................17
(A) STANDARD OPTION............................................................................17
(B) ALTERNATIVE................................................................................17
5.6. NO EMPLOYEE OR MATCHING CONTRIBUTIONS..........................................................17
5.7. NO DEDUCTIBLE VOLUNTARY EMPLOYEE CONTRIBUTIONS.................................................17
5.8. GENERAL RULES APPLICABLE TO ALL CONTRIBUTIONS..................................................17
(A) LIMITATIONS ON CONTRIBUTIONS...............................................................17
(B) CODE SECTION 415...........................................................................17
(C) CODE SECTION 416...........................................................................17
(D) LEASED EMPLOYEES...........................................................................17
(E) OWNER-EMPLOYEES............................................................................17
(1) GENERAL................................................................................17
(2) CONTROL................................................................................17
SECTION 6. ALLOCATIONS TO ACCOUNTS ......................................................................18
6.1. ESTABLISHMENT AND MAINTENANCE OF ACCOUNTS......................................................18
6.2. ALLOCATION OF FUND EARNINGS....................................................................18
(A) GENERAL....................................................................................18
(B) ALLOCATION PROCEDURES......................................................................18
6.3. ALLOCATION OF CONTRIBUTIONS AND FORFEITURES....................................................18
</TABLE>
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<TABLE>
<S> <C> <C> <C>
(A) PROFIT SHARING PLAN........................................................................18
(1) NONINTEGRATED..........................................................................18
(2) INTEGRATED.............................................................................18
(B) MONEY PURCHASE PENSION PLAN................................................................18
(C) 401 (k) PLAN...............................................................................18
(1) ELECTIVE DEFERRALS AND EMPLOYEE CONTRIBUTIONS..........................................19
(2) MATCHING CONTRIBUTIONS AND QUALIFIED MATCHING CONTRIBUTIONS............................19
(3) QUALIFIED NONELECTIVE CONTRIBUTIONS....................................................19
(4) DISCRETIONARY EMPLOYER CONTRIBUTION....................................................19
(D) TARGET BENEFIT PENSION PLAN................................................................19
(E) TOP HEAVY MINIMUM ALLOCATION...............................................................19
(F) ROLLOVER CONTRIBUTIONS.....................................................................20
6.4. ALLOCATION REPORT..............................................................................20
6.5. ALLOCATION CORRECTIONS.........................................................................20
SECTION 7. STATUTORY LIMITATIONS ON ALLOCATIONS ..........................................................20
7.1. EFFECTIVE DATE.................................................................................20
7.2. LIMITATIONS ON ANNUAL ADDITIONS UNDER CODE SECTION 415.........................................20
(A) SPECIAL DEFINITIONS........................................................................20
(1) ANNUAL ADDITIONS......................................................................20
(2) COMPENSATION..........................................................................20
(3) DEFINED BENEFIT FRACTION..............................................................21
(4) DEFINED CONTRIBUTION DOLLAR LIMITATION................................................21
(5) DEFINED CONTRIBUTION FRACTION.........................................................21
(6) EMPLOYER..............................................................................21
(7) EXCESS AMOUNT.........................................................................21
(8) HIGHEST AVERAGE COMPENSATION..........................................................21
(9) LIMITATION YEAR.......................................................................21
(10) MASTER OR PROTOTYPE PLAN..............................................................21
(11) MAXIMUM AGGREGATE AMOUNT..............................................................22
(12) MAXIMUM PERMISSIBLE AMOUNT............................................................22
(13) PROJECTED ANNUAL BENEFIT..............................................................22
(B) LIMITATION IF NO OTHER PLANS...............................................................22
(1) PROFIT SHARING PLAN...................................................................22
(2) MONEY PURCHASE PENSION PLAN OR TARGET BENEFIT PENSION PLAN............................22
(3) 401 (k) PLAN..........................................................................22
(4) SUSPENSE ACCOUNT......................................................................23
(C) LIMITATION IF OTHER DEFINED CONTRIBUTION MASTER OR PROTOTYPE PLAN..........................23
(D) LIMITATION IF OTHER DEFINED CONTRIBUTION PLAN..............................................23
(E) LIMITATION IF OTHER DEFINED BENEFIT PLAN...................................................23
(F) COMPENSATION FOR DETERMINATION OF MAXIMUM PERMISSIBLE AMOUNT...............................23
7.3. INDIVIDUAL LIMITATION ON ELECTIVE DEFERRALS UNDER CODE SECTION 402(g)..........................24
(A) GENERAL....................................................................................24
(B) ELECTIVE DEFERRALS.........................................................................24
(C) EXCESS ELECTIVE DEFERRALS..................................................................24
(D) DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS..................................................24
(E) DETERMINATION OF INCOME OR LOSS............................................................24
(F) CLAIMS PROCEDURE...........................................................................24
</TABLE>
vi
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<TABLE>
<S> <C> <C> <C>
7.4. LIMITATIONS ON ELECTIVE DEFERRALS FOR HIGHLY COMPENSATED EMPLOYEES UNDER CODE SECTION 401(k)...24
(A) SPECIAL DEFINITIONS........................................................................24
(1) ACTUAL DEFERRAL PERCENTAGE.............................................................24
(2) ADP (OR AVERAGE ACTUAL DEFERRAL PERCENTAGE)............................................24
(3) EMPLOYER CONTRIBUTIONS.................................................................24
(4) EXCESS CONTRIBUTIONS...................................................................25
(5) HIGHLY COMPENSATED EMPLOYEE............................................................25
(B) ADP LIMIT..................................................................................25
(C) SPECIAL RULES..............................................................................25
(1) OTHER PLANS............................................................................25
(2) AGGREGATION............................................................................25
(3) FAMILY MEMBERS.........................................................................26
(4) TIMING.................................................................................26
(5) RECORDS................................................................................26
(6) OTHER REQUIREMENTS.....................................................................26
(D) DISTRIBUTION OF EXCESS CONTRIBUTIONS.......................................................26
(1) GENERAL................................................................................26
(2) DETERMINATION OF INCOME OR LOSS........................................................26
(3) ORDER FOR DETERMINING EXCESS CONTRIBUTIONS.............................................26
(4) ACCOUNTING FOR EXCESS CONTRIBUTIONS....................................................26
(E) RECHARACTERIZATION.........................................................................26
7.5. LIMITATIONS ON EMPLOYEE CONTRIBUTIONS AND MATCHING CONTRIBUTIONS UNDER CODE SECTION 401(M).....27
(A) SPECIAL DEFINITIONS........................................................................27
(1) AGGREGATE LIMIT........................................................................27
(2) ACP (OR AVERAGE CONTRIBUTION PERCENTAGE)...............................................27
(3) CONTRIBUTION PERCENTAGE................................................................27
(4) CONTRIBUTION PERCENTAGE AMOUNT.........................................................27
(5) EMPLOYEE CONTRIBUTION..................................................................27
(6) EXCESS AGGREGATE CONTRIBUTION..........................................................27
(7) MATCHING CONTRIBUTION..................................................................27
(B) ACP LIMIT..................................................................................27
(C) SPECIAL RULES..............................................................................27
(1) MULTIPLE USE...........................................................................28
(2) OTHER PLANS............................................................................28
(3) AGGREGATION............................................................................28
(4) FAMILY MEMBERS.........................................................................28
(5) TIMING.................................................................................28
(6) RECORDS................................................................................28
(7) OTHER REQUIREMENTS.....................................................................28
(D) DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS.............................................28
(1) GENERAL................................................................................28
(2) DETERMINATION OF INCOME OR LOSS........................................................28
(3) ORDER FOR DETERMINING EXCESS AGGREGATE CONTRIBUTIONS...................................28
(4) ACCOUNTING FOR EXCESS AGGREGATE CONTRIBUTIONS..........................................28
(5) ALLOCATION OF FORFEITURES..............................................................29
SECTION 8. VESTING AND FORFEITURES .......................................................................29
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8.1. DETERMINATION OF NONFORFEITABLE PERCENTAGE.....................................................29
(A) FULLY VESTED ACCOUNTS......................................................................29
(B) DEATH, DISABILITY AND RETIREMENT...........................................................29
(C) OTHER SEPARATION FROM SERVICE..............................................................29
(D) EMPLOYEE CONTRIBUTION WITHDRAWALS..........................................................29
8.2. FORFEITURE AND SPECIAL REEMPLOYMENT RULES......................................................29
(A) BUY BACK RULE (STANDARD OPTION)............................................................29
(1) FORFEITURE.............................................................................29
(2) REEMPLOYMENT...........................................................................29
(B) AUTOMATIC RESTORATION (ALTERNATIVE)........................................................30
(1) FORFEITURE.............................................................................30
(2) REEMPLOYMENT...........................................................................30
(C) DEEMED DISTRIBUTION........................................................................30
(D) RESTORATION SOURCES........................................................................30
(E) DATE FORFEITURES APPLIED OR ALLOCATED......................................................30
(F) IN-SERVICE DISTRIBUTIONS...................................................................30
SECTION 9. ACCOUNT DISTRIBUTION - GENERAL RULES ..........................................................30
9.1 AFTER SEPARATION FROM SERVICE...................................................................31
(A) TIMING.....................................................................................31
(B) REEMPLOYMENT...............................................................................31
(C) $3500 CASHOUT..............................................................................31
(C) CLAIM......................................................................................31
(E) ELECTION TO DEFER PAYMENT..................................................................31
(1) STANDARD OPTION........................................................................31
(2) ALTERNATIVE............................................................................31
(F) EARLY RETIREMENT AGE.......................................................................31
(G) DEATH......................................................................................31
9.2. BEFORE SEPARATION FROM SERVICE.................................................................31
(A) MONEY PURCHASE PENSION PLAN OR TARGET BENEFIT PENSION PLAN.................................31
(1) STANDARD OPTION........................................................................31
(2) ALTERNATIVE............................................................................31
(B) 401 (k) PLAN...............................................................................31
(1) DISTRIBUTION RESTRICTIONS..............................................................32
(2) TERMINATION OF PLAN OR DISPOSITION OF ASSETS OR SUBSIDIARY.............................32
(3) HARDSHIP DISTRIBUTION..................................................................32
(4) DISTRIBUTIONS ON OR AFTER AGE 59 1/2...................................................33
(5) EMPLOYER ACCOUNT AND MATCHING ACCOUNT..................................................33
(C) PROFIT SHARING PLAN........................................................................33
(D) WITHDRAWALS FROM EMPLOYEE ACCOUNT..........................................................33
(1) STANDARD OPTION........................................................................33
(2) ALTERNATIVE............................................................................33
(E) PLAN TERMINATION...........................................................................33
9.3. CONSENT........................................................................................33
(A) GENERAL....................................................................................33
(B) EXCEPTIONS.................................................................................33
(C) IMMEDIATELY DISTRIBUTABLE..................................................................33
(D) ACCUMULATED DEDUCTIBLE EMPLOYEE CONTRIBUTIONS..............................................34
9.4. FORM OF DISTRIBUTION...........................................................................34
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9.5. MINIMUM DISTRIBUTIONS..........................................................................34
9.6. MISSING PERSON.................................................................................34
9.7. NO ESTOPPEL OF PLAN............................................................................34
9.8. ADMINISTRATION.................................................................................34
SECTION 10. BENEFIT PAYMENT FORMS - JOINT AND SURVIVOR ANNUITY REQUIREMENTS ..............................34
10.1. APPLICATION AND SPECIAL DEFINITIONS...........................................................34
(A) ANNUITY STARTING DATE......................................................................34
(B) EARLIEST RETIREMENT AGE....................................................................34
(C) ELECTION PERIOD............................................................................34
(D) LIFE ANNUITY...............................................................................34
(E) QUALIFIED ELECTION.........................................................................34
(F) QUALIFIED JOINT AND SURVIVOR ANNUITY.......................................................35
(1) STANDARD...............................................................................35
(2) ALTERNATIVE............................................................................35
(G) QUALIFIED PRERETIREMENT SURVIVOR ANNUITY...................................................35
(1) STANDARD...............................................................................35
(2) ALTERNATIVE............................................................................35
(H) VESTED ACCOUNT BALANCE.....................................................................35
10.2 DISTRIBUTION OR PARTICIPANT....................................................................35
10.3 DISTRIBUTION TO SURVIVING SPOUSE...............................................................35
10.4 NOTICE REQUIREMENTS............................................................................35
(A) QUALIFIED JOINT AND SURVIVOR ANNUITY AND LIFE ANNUITY......................................35
(B) QUALIFIED PRERETIREMENT SURVIVOR ANNUITY...................................................35
10.5 SAFE HARBOR RULES..............................................................................36
(A) APPLICATION................................................................................36
(B) CONDITIONS.................................................................................36
(C) SURVIVING SPOUSE...........................................................................36
(D) WAIVER OF SPOUSAL BENEFIT..................................................................36
(E) VESTED ACCOUNT BALANCE.....................................................................36
10.6 OPTIONAL FORMS.................................................................................36
(A) GENERAL....................................................................................36
(B) BEFORE SEPARATION FROM SERVICE.............................................................36
(C) AFTER SEPARATION FROM SERVICE..............................................................36
(D) NO METHOD SELECTED.........................................................................37
(E) SINGLE SUM.................................................................................37
(F) IN KIND DISTRIBUTIONS......................................................................37
10.7 ANNUITY CONTRACTS..............................................................................37
10.8 TRANSITIONAL RULES.............................................................................37
10.9 DIRECT ROLLOVERS...............................................................................37
(A) GENERAL....................................................................................37
(B) DEFINITIONS................................................................................37
(1) ELIGIBLE ROLLOVER DISTRIBUTION.........................................................37
(2) ELIGIBLE RETIREMENT PLAN...............................................................38
(3) DISTRIBUTEE............................................................................38
SECTION 11. MINIMUM DISTRIBUTION REQUIREMENTS.............................................................38
11.1. GENERAL.......................................................................................38
11.2. SPECIAL DEFINITIONS...........................................................................38
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(A) APPLICABLE CALENDAR YEAR...................................................................38
(B) APPLICABLE LIFE EXPECTANCY.................................................................38
(C) DESIGNATED BENEFICIARY.....................................................................38
(D) DISTRIBUTION CALENDAR YEAR.................................................................38
(E) LIFE EXPECTANCY............................................................................38
(F) PARTICIPANT'S BENEFIT......................................................................38
(G) REQUIRED BEGINNING DATE....................................................................38
(1) GENERAL RULE...........................................................................38
(2) AGE 70 1/2 BEFORE 1988.................................................................38
(3) AGE 70 1/2 DURING 1988.................................................................38
(4) 5% OWNER...............................................................................39
11.3 REQUIRED BEGINNING DATE........................................................................39
11.4 LIMITS ON DISTRIBUTION PERIODS.................................................................39
11.5 DETERMINATION OF AMOUNT TO BE DISTRIBUTED EACH YEAR............................................39
(A) INDIVIDUAL ACCOUNT.........................................................................39
(1) GENERAL................................................................................39
(2) INCIDENTAL DEATH BENEFIT RULES.........................................................39
(3) TIMING.................................................................................39
(B) ANNUITY CONTRACTS..........................................................................39
11.6. DEATH DISTRIBUTION PROVISIONS.................................................................39
(A) DISTRIBUTION BEGINNING BEFORE DEATH........................................................39
(B) DISTRIBUTION BEGINNING AFTER DEATH.........................................................39
(C) SPECIAL RULES..............................................................................40
11.7. SPECIAL PRE-TEFRA DISTRIBUTION ELECTION .....................................................40
(A) GENERAL RULE...............................................................................40
(B) SPECIAL PRE-TEFRA DISTRIBUTION ELECTION....................................................40
(C) CURRENT DISTRIBUTIONS......................................................................40
(D) REVOCATION.................................................................................40
SECTION 12. TOP-HEAVY PLAN RULES .........................................................................40
12.1. APPLICATION...................................................................................40
12.2. SPECIAL DEFINITIONS...........................................................................40
(A) DETERMINATION DATE.........................................................................40
(B) KEY EMPLOYEE...............................................................................41
(C) PERMISSIVE AGGREGATION GROUP...............................................................41
(D) REQUIRED AGGREGATION GROUP.................................................................41
(E) TOP-HEAVY PLAN.............................................................................41
(F) TOP-HEAVY RATIO............................................................................41
(G) TOP-HEAVY VALUATION DATE...................................................................42
(1) STANDARD OPTION........................................................................42
(2) ALTERNATIVE............................................................................42
12.3. MINIMUM ALLOCATION............................................................................42
(A) GENERAL....................................................................................42
(B) DEFINED BENEFIT PAIRED PLAN................................................................42
(C) DEFINED CONTRIBUTION PAIRED PLAN...........................................................42
(1) STANDARD OPTION........................................................................42
(2) ALTERNATIVE............................................................................42
(D) PARTICIPANTS ENTITLED TO ALLOCATION........................................................42
(E) NONFORFEITABILITY..........................................................................43
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(F) COMPENSATION...............................................................................43
(G) MULTIPLE PLANS.............................................................................43
(H) INTEGRATED PLANS...........................................................................43
(1) PROFIT SHARING PLAN....................................................................43
(2) MONEY PURCHASE PENSION PLAN............................................................43
(3) SPECIAL DEFINITIONS....................................................................43
12.4. VESTING SCHEDULE..............................................................................43
12.5. 401 (k) PLAN..................................................................................43
SECTION 13. INSURANCE, INDIVIDUALLY DIRECTED INVESTMENTS AND PARTICIPANT LOANS ...........................44
13.1. INSURANCE CONTRACTS...........................................................................44
(A) ELECTIONS AND EXISTING LIFE INSURANCE CONTACTS.............................................44
(1) STANDARD OPTION........................................................................44
(2) ALTERNATIVE............................................................................44
(B) PREMIUMS...................................................................................44
(1) ORDINARY LIFE..........................................................................44
(2) TERM AND UNIVERSAL LIFE................................................................44
(3) COMBINATION............................................................................44
(C) OWNER AND BENEFICIARY......................................................................44
(D) ALLOCATIONS................................................................................44
(E) DISTRIBUTION TO PARTICIPANT................................................................44
(F) TERMINATION OF INSURANCE ELECTION..........................................................44
13.2. INDIVIDUALLY DIRECTED INVESTMENTS.............................................................45
(A) GENERAL....................................................................................45
(B) ELECTION RULES.............................................................................45
(C) NO ELECTION................................................................................45
13.3. PARTICIPANT LOANS.............................................................................45
(A) ADMINISTRATION AND PROCEDURES..............................................................45
(B) NO LOANS TO CERTAIN OWNERS AND FAMILY MEMBERS..............................................45
(C) GENERAL CONDITIONS.........................................................................45
(D) OTHER CONDITIONS...........................................................................45
(E) CREDITING OF LOAN PAYMENTS.................................................................46
(1) ACCOUNT ASSET (STANDARD OPTION)........................................................46
(2) FUND ASSET (ALTERNATIVE)...............................................................46
(F) LIMITATIONS ON AMOUNTS.....................................................................46
(G) FAILURE TO REPAY...........................................................................46
(H) DISTRIBUTIONS..............................................................................47
SECTION 14. ADOPTION, AMENDMENT, WITHDRAWAL AND CONVERSION, MERGER, ASSET TRANSFERS AND TERMINATION ......47
14.1. ADOPTION......................................................................................47
(A) GENERAL....................................................................................47
(B) PRE-EXISTING PLAN..........................................................................47
(C) PARTICIPATING AFFILIATES...................................................................47
14.2. AMENDMENT.....................................................................................47
(A) PROTOTYPE SPONSOR..........................................................................47
(B) EMPLOYER...................................................................................47
14.3. CERTAIN AMENDMENT RESTRICTIONS................................................................47
(A) GENERAL....................................................................................47
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(B) CHANGE IN SERVICE CALCULATION METHOD.......................................................47
(C) CHANGE IN VESTING SCHEDULE.................................................................47
14.4. WITHDRAWAL AS A PROTOTYPE AND CONVERSION TO INDIVIDUALLY DESIGNED PLAN........................48
(A) VOLUNTARY CONVERSION.......................................................................48
(B) INVOLUNTARY CONVERSION.....................................................................48
(C) EFFECT OF WITHDRAWAL AND CONVERSION........................................................48
14.5. MERGER, CONSOLIDATION OR ASSET TRANSFERS......................................................48
(A) GENERAL....................................................................................48
(B) AUTHORIZATION..............................................................................48
(C) SEPARATE ACCOUNT...........................................................................48
(D) CODE SECTION 411(d)(6) PROTECTED BENEFITS..................................................48
14.6. TERMINATION...................................................................................48
(A) RIGHT TO TERMINATE.........................................................................48
(B) FULL VESTING UPON TERMINATION..............................................................49
SECTION 15. ADMINISTRATION ...............................................................................49
15.1. NAMED FIDUCIARIES.............................................................................49
15.2. ADMINISTRATIVE POWERS AND DUTIES..............................................................49
15.3. AGENT FOR SERVICE OF PROCESS..................................................................49
15.4. REPORTING AND DISCLOSURE......................................................................49
SECTION 16. MISCELLANEOUS ................................................................................49
16.1. SPENDTHRIFT CLAUSE AND QUALIFIED DOMESTIC RELATIONS ORDERS....................................49
16.2. BENEFITS SUPPORTED ONLY BY TRUST FUND.........................................................49
16.3. DISCRIMINATION................................................................................49
16.4. CLAIMS........................................................................................50
16.5. NONREVERSION..................................................................................50
16.6. EXCLUSIVE BENEFIT.............................................................................50
16.7. EXPENSES......................................................................................50
16.8. SECTION 16 OF SECURITIES EXCHANGE ACT OF 1934.................................................50
16.9. ARBITRATION...................................................................................50
Smith Barney Shearson
Prototype Defined Contribution Plan
Trust Agreement
Part II
SECTION 1. INTRODUCTION AND CONSTRUCTION .................................................................52
1.1 INTRODUCTION...................................................................................52
1.2 DEFINITIONS....................................................................................52
1.3 CONTROLLING LAWS...............................................................................52
1.4 CONSTRUCTION...................................................................................52
SECTION 2. GENERAL........................................................................................52
SECTION 3. CONTRIBUTIONS AND TRUST FUND ..................................................................52
SECTION 4. MANAGEMENT OF TRUST FUND ......................................................................53
4.1. PLAN ADMINISTRATOR.............................................................................53
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4.2. TRUSTEE.......................................................................................53
4.3. INVESTMENT MANAGER............................................................................54
4.4. PLAN ADMINISTRATOR OR EMPLOYER INVESTMENT DIRECTIONS..........................................54
4.5. PARTICIPANT INVESTMENT DIRECTIONS.............................................................55
4.6. CUSTODIAN.....................................................................................55
4.7. MULTIPLE TRUSTEES.............................................................................55
4.8. COMMUNICATIONS................................................................................55
4.9. PROTOTYPE SPONSOR.............................................................................55
4.10. VOTING OF PROXIES.............................................................................55
SECTION 5. BENEFIT PAYMENTS...............................................................................55
SECTION 6. VALUATION AND ACCOUNTING BY TRUSTEE............................................................56
SECTION 7. EXPENSES.......................................................................................56
SECTION 8. RESIGNATION OR REMOVAL OF TRUSTEE..............................................................56
SECTION 9. MERGERS, CONSOLIDATIONS AND ASSET TRANSFERS....................................................56
SECTION 10. SINGLE TRUST - SEPARATE FUNDS.................................................................57
SECTION 11. NAMED FIDUCIARIES AND ADMINISTRATION..........................................................57
SECTION 12. MISCELLANEOUS.................................................................................57
12.1. SPENDTHRIFT CLAUSE AND QUALIFIED DOMESTIC RELATIONS ORDERS....................................57
12.2. BENEFITS SUPPORTED ONLY BY TRUST FUND.........................................................57
12.3. CLAIMS........................................................................................57
12.4. NONREVERSION..................................................................................57
12.5. EXCLUSIVE BENEFIT.............................................................................58
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Part I
Smith Barney Shearson
Prototype Defined Contribution
Plan Document
#05
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SMITH BARNEY SHEARSON
PLAN DOCUMENT
SECTION 1. INTRODUCTION AND CONSTRUCTION
1.1 INTRODUCTION. This Smith Barney Shearson Prototype Defined Contribution Plan
is established and maintained as a prototype plan by the Prototype Sponsor for
its customers and the customers of its subsidiaries and affiliates. This Plan
shall be adopted as a prototype plan only with the consent of the Prototype
Sponsor or one of its subsidiaries or affiliates as set forth in the related
Adoption Agreements and shall be maintained as a prototype plan only in
accordance with the terms and conditions set forth in the Plan.
1.2. CONTROLLING LAWS. To the extent such laws are not preempted by federal law,
this Plan and the related Adoption Agreement and Trust Agreement shall be
construed and interpreted under the laws of the state specified in the Adoption
Agreement; provided, if Smith Barney Shearson Trust Company has been appointed
as Trustee, the Trust Agreement shall be governed by and construed in accordance
with the laws of the State of [Delaware].
1.3. CONSTRUCTION. The headings and subheadings in the Plan have been inserted
for convenience of reference only and are to be ignored in the construction of
its provisions. Wherever appropriate, the masculine shall be read as the
feminine, the plural as the singular, and the singular as the plural. References
in this Plan to a section (Section) shall be to a section in this Plan unless
otherwise indicated. References in this Plan to a section of the Code, ERISA or
any other federal law shall also refer to the regulations issued under such
section. Unless an alternative option is specified in the Adoption Agreement,
the option identified as the "Standard Option" will control.
The Employer intends that this Plan and the related Trust Agreement and Adoption
Agreement which are part of the Plan satisfy the requirements for tax exempt
status under Code Section 401(a), Code Section 501(a) and related Code sections
and that the provisions of this Plan, the Trust Agreement and the Adoption
Agreement be construed and interpreted in accordance with the requirements of
the Code and the regulations under the Code.
Further, except as expressly stated otherwise, no provision of this Plan or the
related Trust Agreement or Adoption Agreement is intended to nor shall grant any
rights to Participants or Beneficiaries or any interest in the Fund in addition
to those minimum rights or interests required to be provided under ERISA and the
Code and the regulations under ERISA and the Code.
Nothing in this Plan or the related Trust Agreement or Adoption Agreement shall
be construed to prohibit the adoption or the maintenance of this Plan or the
Trust Agreement as an individually designed plan or as a trust agreement which
is part of an individually designed plan, but in such event, the Employer may
not rely on the opinion letter issued to the Prototype Sponsor and the Prototype
Sponsor shall have absolutely no responsibility for such individually designed
plan.
Finally, in the even of any conflict between the terms of this Plan and the
terms of the Trust Agreement or the Adoption Agreement, the terms of this Plan
shall control.
1.4. TRA 86 AMENDMENTS. If this Plan is adopted as an amendment to a
Pre-Existing Plan in order to satisfy the requirements of TRA 86, the
retroactive effective date of any provision required under TRA 86 is intended
solely to comply with the Code and is not intended to grant any substantive
rights under ERISA to the extent that such provision is different from the
Pre-Existing Plan as in effect between the applicable effective date of TRA 86
and the effective date in the final regulations ("transition years").
SECITON 2. DEFINITIONS
The capitalized terms in this Plan and the related Adoption Agreement and Trust
Agreement shall have the meanings shown opposite those terms in this Section 2
and in Section 3 for purposes of this Plan.
2.1. ACCOUNT - means the bookkeeping account maintained under this Plan to show
as of any Valuation Date a Participant's interest in the Fund attributable to
the contributions made by or on behalf of such Participant and the Fund Earnings
on such contributions, and an Account shall cease to exist when exhausted
through forfeiture or distributions made in accordance with this Plan.
2.2. ACTIVE PARTICIPANT - means for purposes of eligibility to receive an
allocation of the Employer Contribution or Forfeitures for each Plan Year, each
Participant who is an Eligible Employee at any time during the Plan Year and who
satisfies the following conditions:
2.2(a) STANDARD OPTION.
2.2(a)(1) STANDARDIZED PLANS. If this Plan is adopted as a standardized
Plan, such Participant (i) is employed as an Eligible Employee (or on
an authorized leave of absence as an Eligible Employee) on the last day
of such Plan Year, (ii) terminated employment as an Eligible Employee
during such Plan Year on or after Normal Retirement Age or Early
Retirement Age or by reason of death or Disability, (iii) such
Participant is not employed on the last day of such Plan Year but
completed more than 500 Hours of Service during such Plan Year (or the
equivalent period described in
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Section 2.2(d) if the "Elapsed Time" method is specified in the
Adoption Agreement). Notwithstanding the foregoing, if the "Hours of
Service" method is specified in the Adoption Agreement for a Plan Year
beginning before the Final Compliance Date, Section 2.2(a)(1)(iii)
shall not apply and a Participant who satisfies the requirements of
Section 2.2(a)(1)(i) shall not be eligible to receive an allocation of
the Employer Contribution or Forfeitures for such Plan Year unless such
Participant also is credited with at least 1,000 Hours of Service in
such Plan Year.
2.2(a)(2) NONSTANDARDIZED PLANS. If this Plan is adopted as a
nonstandardized Plan, such Participant (i) is employed as an Eligible
Employee (or on an authorized leave of absence as an Eligible Employee)
on the last day of such Plan Year and, if the "Hours of Service" method
is specified in the Adoption Agreement, is credited with at least 1,000
Hours of Service in such Plan Year, or (ii) terminated employment as an
Eligible Employee during such Plan Year on or after Normal Retirement
Age or Early Retirement Age or by reason of death or Disability.
2.2(b) ALTERNATIVE. Such Participant satisfies the alternative conditions
specified in the Adoption Agreement.
2.2(c) MINIMUM COVERAGE REQUIREMENT. If this Plan is adopted as a
nonstandardized Plan and fails to satisfy the minimum coverage and
participation requirements of Code Section 401(a)(26) and Section 410(b)
for any Plan Year beginning on and after the Final Compliance Date as a
result of the application of the minimum hours or last day employment
requirements in this Section 2.2, such minimum participation and coverage
requirements shall be retroactively amended by executing a new Adoption
Agreement within the applicable retroactive correction period in the
regulations or, if no such amendment is made, shall be satisfied as
follows:
2.2(c)(1) If the Plan utilizes both the minimum hours and last day
employment requirements:
(i) STEP 1 - Each Participant who completes at least 1,000 Hours
of Service without regard to whether such Participant is employed
on the last day of the Plan Year shall be deemed to be an Active
Participant for such Plan Year. (ii) STEP 2 - If the minimum
participation and coverage requirements are not satisfied after
the application of Step 1, then each Participant who completes
more than 500 Hours of Service and who is employed on the last day
of the Plan Year shall be deemed to be an Active Participant for
such Plan Year.
(iii) STEP 3 - If the minimum participation and coverage
requirements are not satisfied after the application of Step 1
and Step 2, then each Participant who is not employed on the last
day of the Plan Year but who completed more than 500 Hours of
Service in such Plan Year also shall be deemed to be an Active
Participant.
(iv) STEP 4 - If the minimum participation and coverage
requirements are not satisfied after the application of Steps 1
through 3, then each Participant who satisfies the last day of
employment requirement also shall be deemed to be an Active
Participant without regard to the number of Hours of Service
actually completed by such Participant during such Plan Year.
2.2(c)(2) If the Plan Utilizes only the last day employment
requirement, each Participant who is not employed on the last day of
the Plan Year but who completed more than 500 Hours of Service in such
Plan Year (or the equivalent period described in Section 2.2(d) if the
"Elapsed Time" method is specified in the Adoption Agreement) also
shall be deemed to be an Active Participant.
2.2(c)(3) If the Plan utilizes only the minimum hours requirement:
(i) STEP 1 - Each Participant who completes more than 500 Hours of
Service without regard to whether such Participant is employed on
the last day of the Plan Year shall be deemed to be an Active
Participant.
(ii) STEP 2 - If the minimum participation and coverage
requirements are not satisfied after the application of Step 1,
then each Participant who is employed on the last day of the Plan
Year shall be deemed to be an Active participant.
2.2(d) Special ELAPSED TIME EQUIVALENCY RULE. If the "Elapsed Time" method
is specified in the Adoption Agreement, a Participant shall be treated as
completing more than 500 Hours of Service during such Plan Year for
purposes of this Section 2.2 if, during such Plan Year, the Participant
completes more than
(A) STANDARD OPTION - 91 Consecutive calendar days of employment,
or
(B) ALTERNATIVE - if so specified in the Adoption Agreement, 3
consecutive calendar months of employment.
2.3 ADOPTION AGREEMENT - means the agreement by which the Employer adopted this
Plan.
2.4 AFFILIATE - means at any time (a) any parent, subsidiary or sister
corporation which at such time is a member of a controlled group of corporations
(as defined in Code Section 414(b)) with the Employer, (b) any trade or
business, whether or not incorporated, which at such time is considered to be
under common control (as defined in Code Section 414(c)) with the Employer, (c)
any person or organization which at such time is a member of an affiliated
service group (as defined in Code Section 414(m)) with the Employer, and (d) any
other organization which at such time is required to be aggregated with the
Employer under Code Section 414(o).
2.5 ALLOCATION DATE - means for a 401 (k) Plan the respective dates specified in
the Adoption Agreement as of which Matching Contributions, Qualified Matching
Contributions and Qualified Nonelective Contributions, as applicable, are made.
2.6 AVERAGE ANNUAL COMPENSATION - Means for a Target Benefit Plan the average of
an Employee's compensation for the consecutive Plan Year period specified in the
Adoption Agreement during which such average is the highest, or if such
2
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Employee's entire period of participation in the Plan is less than the number of
Plan Years so specified, the Employee's Average Annual Compensation shall be
determined by averaging (on an annual bases) the Employee's Compensation for his
or her actual period of participation. For purposes of determining a
Participant's Average Annual Compensation for any Plan Year beginning after the
Final Compliance Date, the annual Compensation taken into account for any prior
Plan Year shall not exceed (a) for Plan Years beginning before January 1, 1990,
$200,000 and (b) for Plan Years beginning on or after January 1, 1990, the
annual Compensation limit described in Section 2.10(e) in effect for such prior
Plan Year.
2.7 BENEFICIARY - means for each Participant the person or persons so designated
in writing by the Participant on the properly completed Election Form. However,
if no such designation is made, if no person so designated survives the
Participant, or if after checking the last known mailing address the whereabouts
of the person so designated is unknown and no death benefit claim is submitted
to the Plan Administrator by such person within one year after the Participant's
date of death, the Beneficiary shall be deemed to be (a) the Participant's
surviving Spouse, or if there is no surviving Spouse, (b) the personal
representative of such Participant in his or her fiduciary capacity, if any has
qualified within one year from the date of the Participant's death, or if no
personal representative has so qualified or remains so qualified, (c) any person
determined by a court of competent jurisdiction to be the Participant's
Beneficiary for this purpose. If a Beneficiary is not identified and located
within 3 years of the Participant's date of death, Section 9.6, MISSING PErson,
shall control the distribution of the Participant's Account.
2.8 BOARD - means (a) for any Employer which is a corporation, the Board of
Directors of such Employer and (b) for any Employer which is not a corporation,
the person or persons duly authorized to act on behalf of such Employer.
2.9 CODE - means the Internal Revenue Code, as amended.
2.10 COMPENSATION
2.10(a) COMMON LAW EMPLOYEES. For an Employee who is not a Self-Employed
Individual or a Leased Employee, the term "Compensation" means for any
determination period.
2.10(a)(1) STANDARD OPTION - the total compensation which is actually
paid (in cash or other benefits) by the Employer or any Participating
Affiliate to such Employee for such period and which is reportable to
the Internal Revenue Service on Form W-2 as wages within the meaning of
Code Section 3401(a) and all other payments of compensation to such
Employee from the Employer of Participating Affiliate (in the course of
its trade or business) for which a written statement is required to be
furnished to the Employee under Code Section 6041(d), Code Section
6051(a)(3) and Code Section 6052. Such compensation shall be
determined without regard to any rules under Code Section 3401(a) that
limit the remuneration included in wages based on the nature or
location of the employment or the services performed (such as the
exception for agricultural labor in Code Section 3401(a)(2)), or
2.10(a)(2) ALTERNATIVE - if so specified in the Adoption Agreement, the
total compensation which is actually paid (in cash or other benefits)
by the Employer or any Participating Affiliate to such Employee for
such period and which is
(i) considered as wages within the meaning of Code Section
3401(a) for the purposes of federal income tax withholding at the
source but determined without regard to any rules under Code
Section 3401(a) that limit the remuneration included in wages
based on the nature or location of the employment or the services
performed (such as the exemption for agricultural labor in Code
Section 3401(a)(2)), (ii) considered as compensation within the
meaning of Code Section 415(c)(3) as described in Section
7.2(a)(2)(ii)(B), (iii) for a nonintegrated nonstandardized Plan
(other than a Target Benefit Pension Plan), compensation
identified on the payroll records of the Employer or
Participating Affiliate as regular or base salary or wages
(whether hourly, weekly, monthly, annually or otherwise) and, if
so specified in the Adoption Agreement, overtime, bonuses,
commissions, and/or other specific compensation, or
(iv) compensation as described in Section 2.10(a)(1), Section
2.10(a)(2)(i) or Section 2.10(a)(2)(ii), reduced by all of the
following items (even if includable in gross income):
reimbursements or other expense allowances, fringe benefits (cash
and noncash), moving expenses, deferred compensation and welfare
benefits, or
2.10(b) SELF-EMPLOYED. For an Employee who is a Self-Employed Individual,
the term "Compensation" means the Employee's Earned Income for such period.
2.10(c) Leased EMPLOYEES. All compensation paid by a leasing organization
to a Leased Employee for personal services rendered to the Employer or a
Participating Affiliate for such period shall be treated as Compensation to
the extent required under Code Section 414(n).
2.10(d) DETERMINATION PERIOD. For purposes of this definition and unless
otherwise specified in this Plan or the Adoption Agreement, the phrase
"determination period" means
2.10(d)(1) STANDARD OPTION - the Plan Year or
2.10(d)(2) ALTERNATIVE - the calendar year or other 12 consecutive
month period ending with or within the Plan Year specified in the
Adoption Agreement.
2.10(e) LIMITATION. No more than $200,000 (as adjusted in accordance with
Code Section 401(a)(17)) shall be taken into account under this Plan for
any determination period beginning on or after January 1, 1989. The annual
Compensation limit under this Section 2.10(e) for any determination period
shall be adjusted in accordance with Code Section 401(a)(17) for the
calendar year in which such determination period begins.
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If the determination period is less than 12 months as a result of a short
Plan Year, the annual Compensation limit under this Section 2.10(e) shall
equal the annual limit for such determination period multiplied by a
fraction, the numerator of which is the number of full months in such
period and the denominator of which is 12.
For purposes of this Compensation limit, the family aggregation rules of
Code Section 414(q)(6) shall be applied by aggregating only the
Participant's spouse and lineal descendants who have not reached age 19
before the end of such determination period. If the limit is exceeded for
any determination period as a result of the application of the family
aggregation rule, the limit shall be prorated among the individuals
affected by this limit in proportion to each such individual's Compensation
for such determination period as determined under this Section 2.10 before
the application of this Section 2.10(e). However, if this Plan is adopted
as an integrated plan, the preceding sentence shall not apply for purposes
of determining the portion of Compensation which does not exceed the
Integration Level.
2.10(f) SALARY REDUCTIONS. Any amount which is contributed by the Employer
or any Participating Affiliate pursuant to a salary reduction agreement
which is not currently includable in an Employee's gross income under Code
Section 125, Section 402(e)(3), Section 402(h) or Section 403(b)
2.10(f)(1) STANDARD OPTION - shall be included in an Employee's
Compensation, or
2.10(f)(2) ALTERNATIVE - if so specified in the Adoption Agreement,
shall not be included in an Employee's Compensation.
2.10(g) SPECIAL RULES.
2.10(g)(1) If so specified in the Adoption Agreement, an Employee's
Compensation shall not include Compensation which is paid to the
Employee for periods ending before the Entry Date on which the Employee
becomes a Participant.
2.10(g)(2) If this Plan is adopted as an amendment and restatement of
a Pre-Existing Plan, this definition shall be effective for Plan Years
beginning on or after January 1, 1989 unless a later effective date is
specified in the Adoption Agreement; provided, the $200,000 limitation
of Section 2.10(e) shall not be effective later than the first day of
the first Plan Year beginning on or after January 1, 1989 and any such
later effective date specified in the Adoption Agreement for the other
provisions of this Section 2.10 shall not be later than the Final
Compliance Date.
2.10(g)(3) If so specified in the Adoption Agreement for a
nonstandardized Plan, a Participant's Compensation in excess of the
dollar amount or percentage specified in the Adoption Agreement shall
not be taken into account for purposes of determining the amount or
allocation of any contributions made by or on behalf of such
Participant under this Plan.
2.10(g)(4) If so specified in the Adoption Agreement for a
nonstandardized Plan, the Compensation of a Participant who is a Highly
Compensated Employee shall not include the specific types of
Compensation specified in the Adoption Agreement.
2.11 COVERED COMPENSATION - means for each Participant for each Plan Year
beginning on or after January, 1989, the average (without indexing) of the
Taxable Wage Bases in effect under the Social Security Act for each calendar
year during the 35-year period ending with the last day of the calendar year in
which the Participant attains (or will attain) Social Security Retirement Age,
determined by assuming that the Taxable Wage Base for all future years shall be
the same as the Taxable Wage Base in effect as of the beginning of such Plan
Year.
A Participant's Covered Compensation for a Plan Year beginning before the
35-year period ending with the last day of the calendar year in which the
Participant attains Social Security Retirement Age is the Taxable Wage Base in
effect as of the beginning of the Plan Year. A Participant's Covered
Compensation for a Plan Year beginning after such 35-year period is the
Participant's Covered Compensation for the Plan Year during which the 35-year
period ends.
However, a Participant's Covered Compensation shall automatically be adjusted
each Plan Year and any increase in a Participant's Covered Compensation shall
not result in a decrease in the Participant's accrued benefit which would be
impermissible under Code Section 411(b)(1)(G) or Section 411(d)(6).
For Purposes of this Section 2.11, Social Security Retirement Age means (a) age
65 in the case of a Participant who was born before January 1, 1938, (b) age 66
for a Participant who was born after December 31, 1937, but before January 1,
1955, and (c) age 67 for a Participant who was born after December 31, 1954.
2.12 DISABILITY OR DISABLED - means an individual's inability to engage in any
substantially gainful activity at the individual's customary level of
compensation or competence and responsibility as an Employee due to any
medically determinable physical or mental impairment or impairments which may be
expected to result in death or to last for a continuous period of at least 12
months as determined by a qualified physician or other medical practitioner
selected by the Plan Administrator for this purpose in accordance with uniform
and nondiscriminatory standards.
2.13 EARLY RETIREMENT AGE - means
2.13(a) STANDARD OPTION - the Normal Retirement Age or
2.13(b) ALTERNATIVE - the alternative Early Retirement Age specified in the
Adoption Agreement.
2.14 EARNED INCOME - means for any Self-Employed Individual for any period the
net earnings from self-employment (as defined in Code Section 1402(a)) for such
period from the Employer or any Participating Affiliate for which the personal
services of such Employee are a material income-producing factor, where such net
earnings are (a) determined without regard to items not included in gross income
for purposes of Chapter 1 of the Code and the deductions properly attributable
to such items, (b) determined with regard to the deduction allowed to the
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Self-Employed Individual under Code Section 164(f) for taxable years beginning
after December 31, 1989, and (c) reduced by the contributions made on behalf of
such Employee to any qualified plan (as described in Code Section 401(a))
maintained by the Employer or any Participating Affiliate to the extent such
contributions are deductible under Code Section 404.
2.15 EFFECTIVE DATE - means the effective date of the Employer's adoption or
amendment of this Plan as specified in the Adoption Agreement. However, if this
Plan is adopted as an amendment and restatement of a Pre-Existing Plan, certain
provisions of this Plan may be effective retroactive to Plan Years beginning
before such Effective Date or may be effective at a date later than such
Effective Date as specified in his Plan document or in the Adoption Agreement.
2.16 ELECTION FORM - means the form or forms provided by or acceptable to the
Plan Administrator for making the elections and designations called for under
this Plan and no such form shall become effective unless properly completed and
timely delivered to the Plan Administrator in accordance with the terms of this
Plan and such rules as the Plan Administrator shall adopt from time to time.
2.17 ELECTIVE DEFERRAL - means the nonforfeitable contribution made to the Fund
by the Employer or a Participating Affiliate on a Participant's behalf under
Section 5.3(f).
2.18 ELECTIVE DEFERRAL ACCOUNT - means the subaccount established as part of a
Participant's Account to record the Participant's Elective Deferrals and the
Fund Earnings attributable to such contributions.
2.19 ELIGIBLE EMPLOYEE - means
2.19(a) STANDARD OPTION - each Employee of the Employer or a Participating
Affiliate other than
2.19(a)(1) an Employee who is included in a unit of employees covered
by a collective bargaining agreement between the Employer and employee
representatives which agreement does not provide for participation in
this Plan if retirement benefits under this Plan were the subject of
good faith bargaining; provided, however, that
(i) the term "employee representatives" shall not include an
organization more than half of whose members are employees who are
owners, officers or executives of the Employer, and
(ii) an Employee shall not be treated as covered under a
collective bargaining agreement if more than 2% of the Employees
covered under such agreement are "professionals" (as defined in
Section 1.40(b)-9(g) of the Federal Income Tax Regulations); and
2.19(a)(2) an Employee who is a nonresident alien (within the meaning
of Code Section 7701(b)(1)(B) and who receives no earned income (within
the meaning of Code Section 911(d)(2)) from the Employer or any
Participating Affiliate which constitutes income from sources within
the United States (within the meaning of Code Section 861(a)(3)).
2.19(b) ALTERNATIVE - If the Plan is adopted as a nonstandardized Plan, the
Employer may specify in the Adoption Agreement a category of Employees who
shall not be treated as Eligible Employees under this Plan. However, the
Plan must satisfy on a continuing basis the nondiscrimination rules under
Code Section 401(a)(4), the coverage rules under Code Section 410(b), and
the minimum participation rules under Code Section 401(a)(26).
2.20 EMPLOYEE - means each person who is treated as an employee of the Employer
or an Affiliate which is required to be aggregated with the Employer under Code
Section 414(b), Section 414(c), Section 414(m) or Section 414(o) including (a) a
common-law employee (whether full-time, regular, temporary or otherwise), (b) a
Self-Employed Individual, (c) an Owner-Employee, (d) a Leased Employee and (e)
each person who is deemed to be an employee under Code Section 414(o).
2.21 EMPLOYEE ACCOUNT - means the subaccount established as part of a
Participant's Account to record (1) the Participant's Employee Contributions
under this Plan, (2) the Participant's nondeductible employee contributions, if
any, under a Pre-Existing Plan or a plan which is merged into this Plan under
Section 14.5, and (3) the Fund Earnings attributable to such contributions. If a
separate account was not maintained for contributions under other plans as
described in clause (2) above, the account balance attributable to such
contributions shall be the Participant's total account balance under such other
plans multiplied by a fraction, the numerator of which is the total amount of
the Participant's nondeductible employee contributions (less withdrawals) and
the denominator of which is the sum of the numerator and the total contributions
made by the Employer on behalf of the Participant (less withdrawals). For
purposes of calculating such fraction, contributed amounts used to provide
ancillary benefits shall be treated as contributions and only amounts actually
distributed to the Participant (but not amounts which reflect the cost of any
death benefits) shall be treated as withdrawals.
2.22 EMPLOYEE CONTRIBUTION - means any contribution made by or on behalf of a
Participant to the Fund under Section 5.3(g) that is includable in the
Participant's gross income for the year in which made.
2.23 EMPLOYER - means the sole proprietorship, partnership or corporation
identified as the Employer in the Adoption Agreement and any successor in
interest to such organization.
2.24 EMPLOYER ACCOUNT - means the subaccount established as part of a
Participant's Account to record the Participant's share of the Employer
Contributions and Forfeitures and the Fund Earnings attributable to such
amounts.
2.25 EMPLOYER CONTRIBUTION - means the contributions made by the Employer and by
any Participating Affiliate to the Fund under Section 5.1, Section 5.2, Section
5.3(e) or Section 5.4.
2.26 ENTRY DATE - means
2.26(a) STANDARD OPTION - the first day of each Plan Year and the first day
of the 7TH month in each Plan Year or
2.26(b) ALTERNATIVE - the alternative Entry Date specified in the Adoption
Agreement.
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2.27 ERISA - means the Employee Retirement Income Security Act of 1974, as
amended.
2.28 FAMILY MEMBERS - means for any year, with respect to a Highly Compensated
Employee who is a 5% owner or who is in the group consisting of the 10 Highly
Compensated Employees paid the greatest Compensation during such year, (a) such
individual's spouse, (b) such individual's lineal ascendants and lineal
descendants and (c) the spouses of such lineal ascendants or descendants as
determined under Code Section 414(q)(6).
2.29 FINAL COMPLIANCE DATE - means the first day of the first Plan Year
beginning after December 31, 1993 or such other applicable effective date of the
final nondiscrimination and other TRA 86 regulations.
2.30 FORFEITURE - means the portion of an Account of a Participant which is
deducted from such Account in accordance with the terms of this plan.
2.31 401(K) PLAN - means this Plan as adopted by entering into the Standardized
401(k) Plan Adoption Agreement or the Nonstandardized 401(k) Plan Adoption
Agreement.
2.32 FUND - means the trust fund created in accordance with this Plan and the
Trust Agreement which is a part of this Plan.
2.33 FUND EARNINGS - means for each period ending on a Valuation Date the
investment gains and losses (whether realized or unrealized), income and
expenses (other than expenses allocable directly to a specific Account) of the
Fund for such period as determined based on the fair market value of the assets
of the Fund on such Valuation Date.
2.34 HIGHLY COMPENSATED EMPLOYEE - means a highly compensated employee within
the meaning of CodeSection 414(q) (as describe in Section 7.4(a)(5)).
2.35 INTEGRATION LEVEL - means the amount of Compensation specified in the
Adoption Agreement at or below which the rate of contributions or benefits
(expressed as a percentage of such Compensation) provided under the Plan is less
than the rate of contributions or benefits (expressed as a percentage of such
Compensation) provided under the Plan with respect to Compensation above such
amount. The Integration Level for any Plan Year shall not exceed the Taxable
Wage Base in effect at the beginning of such Plan Year.
2.36 LEASED EMPLOYEE - means for each Plan Year beginning on or after January 1,
1987 each person who is not a common-law employee of the Employer or an
Affiliate, but who, pursuant to an agreement between the Employer or an
Affiliate ("Recipient") and any other person ("leasing organization"), has
performed services for the recipient or the recipient and a related person (as
determined in accordance with Code Section 414(n)(6)) on a substantially
full-time basis for a period of at least one year, which services are a type
historically performed by employees in the business field of the recipient or
related person for whom such services are being performed. However, subject to
the rules set forth in the regulations under Code Section 414(n), such person
shall not be treated as a Leased Employee if (a) the total number of such
persons does not constitute more than 20% of the total nonhighly compensated
work force of the recipient and (b) such person is covered by a money purchase
pension plan which is maintained by the leasing organization and which provides
for (1) a nonintegrated employer contribution rate of at least 10% of
compensation (as defined in Code Section 415(c)(3) but including amounts
contributed pursuant to a salary reduction agreement which are excludable from
the individual's gross income under Code Section 125, Section 402(e)(3), Section
402(h) or Section 403(b)), (2) immediate participation and (3) full and
immediate vesting.
2.37 MATCHING ACCOUNT - means the subaccount established as part of a
Participant's Account to record the Matching Contributions made on the
Participant's behalf under this Plan and the Fund Earnings attributable to such
contributions.
2.38 MATCHING CONTRIBUTION - means the contribution made by the Employer and by
any Participating Affiliate to the Fund under Section 5.3(b) by reason of a
Participant's Elective Deferrals or Employee Contributions.
2.39 MAXIMUM DISPARITY RATE - means
2.39(a) STANDARD OPTION - if the Integration Level is equal to the Taxable
Wage Base, the greater of 5.7% or the portion of the tax rate under Code
Section 3111(a) which is attributable to old-age insurance as in effect on
the first day of such Plan Year, and
2.39(b) ALTERNATIVE - if the Integration Level is less than the Taxable
Wage Base, the applicable percentage determined in accordance with the
following table, where
X = the greater of $10,000 or 20% of the Taxable Wage Base
TWB = the Taxable Wage Base
IF THE INTEGRATION LEVEL
IS MORE THAN BUT NOT MORE THAN APPLICABLE
PERCENTAGE
$0 X 5.7%
X 80% of TWB 4.3%
80% of TWB 100% of TWB 5.4%
or, if the portion of the tax rate under Code Section 3111(a) which is
attributable to old-age insurance as in effect on the first day of such
Plan Year is greater than 5.7%, the applicable percentage in the table
above shall be such portion of the tax rate, proportionately reduced in the
same manner as the 5.7% amount in the table above.
2.40 MONEY PURCHASE PENSION PLAN - means this Plan as adopted by entering into
the Standardized Money Purchase Pension Plan Adoption Agreement or the
Nonstandardized Money Purchase Pension Plan Adoption Agreement.
2.41 NET PROFITS -
2.41(a) STANDARD OPTION. The term "Net Profits" means
2.41(a)(1) for an Employer or Participating Affiliate other than a
non-profit entity, the current or accumulated earnings for the taxable
year for which the Employer contribution is made as determined before
federal and state taxes and contributions to this Plan or any other
qualified plan, or
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2.41(a)(2) for an Employer or Participating Affiliate which is a
non-profit entity, the current or accumulated excess of receipts over
disbursements for the fiscal year for which the Employer contribution
is made.
2.41(b) ALTERNATIVE. The Employer may specify in an alternative definition
of Net Profits in the Adoption Agreement.
2.42 NONHIGHLY COMPENSATED EMPLOYEE - means each Employee who is neither a
Highly Compensated Employee nor a Family Member.
2.43 NORMAL RETIREMENT AGE -
2.43(a) GENERAL. The term "Normal Retirement Age" means
2.43(a)(1) STANDARD OPTION - age 65 or
2.43(a)(2) ALTERNATIVE - the alternative Normal Retirement Age
specified in the Adoption Agreement.
2.43(b) SPECIAL RULES.
2.43(b)(1) MANDATORY RETIREMENT AGE. If, consistent with applicable age
discrimination law, the Employer enforces a mandatory retirement age,
the Normal Retirement Age shall be the earlier of (1) the date the
Participant reaches such mandatory retirement age or (2) the date the
Participant reaches age 65 or, if an alternative is specified in the
Adoption Agreement, the date the Participant reaches Normal Retirement
Age as specified in the Adoption Agreement.
2.43(b)(2) TRANSITIONAL RULE. If
(i) the normal retirement age under the terms of the Pre-Existing
Plan as in effect for Plan Years beginning before January 1, 1988
was determined with reference to an anniversary of the date on
which a Participant commenced participation in such plan
("participation commencement date"),
(ii) such anniversary was later than the 5TH anniversary of the
participation commencement date,
(iii) the Normal Retirement Age specified in the Adoption
Agreement is determined with reference to an anniversary of the
participation commencement date, and
(iv) this transitional rule is specified in the Adoption
Agreement,
then the anniversary for any Participant whose participation
commencement date occurred in a Plan Year beginning before January 1,
1988 shall be the earlier of (A) the anniversary under the terms of the
Pre-Existing Plan, or (B) the 5TH anniversary of the first day of the
first Plan Year beginning after December 31, 1987.
2.44 OWNER-EMPLOYEE - means each Self-Employed Individual who is (a) a sole
proprietor of the Employer or a Participating Affiliate or (b) a partner owning
more than 10% of either the capital or profits interest of the Employer or a
Participating Affiliate.
2.45 PAIRED PLANS - means (a) a combination of two or more standardized defined
contribution Plans under this Smith Barney Shearson Prototype Defined
Contribution Plan (Plan Document #05) or (b) a combination of one or more such
standardized defined contribution Plans with a standardized defined benefit plan
under the Smith Barney Shearson Prototype Defined Benefit Plan (Plan Document
#06). However, such Plans shall be treated as Paired Plans only if (1) such
Paired Plans have the same Plan Year, and (2) no more than one such plan is
integrated with social security.
2.46 PARTICIPANT - means (a) an Eligible Employee who has satisfied the
Participation Requirement specified in the Adoption Agreement and has become a
Participant in accordance with Section 4, and (b) any individual for whom an
Account continues to exist under the Plan.
2.47 PARTICIPATING AFFILIATE - means (a) if this Plan is a standardized Plan,
each Affiliate of the Employer or (b) if this Plan is a nonstandardized Plan,
each Affiliate which participates in this Plan, as set forth in Section 14.1(c)
of the Plan; provided, and Affiliate automatically shall cease to be a
Participating Affiliate if, and at the time, it ceases to be an Affiliate as set
forth in Section 14.6(a).
2.48 PARTICIPATION REQUIREMENT - means
2.48(a) STANDARD OPTION - attainment of age 21 and completion of a waiting
period equal to one Year of Service or
2.48(b) ALTERNATIVE - the alternative minimum age and waiting period
requirement specified in the Adoption Agreement.
2.49 PLAN - means this Smith Barney Shearson Prototype Defined Contribution
Plan, as adopted by the Employer in the form of a Profit Sharing Plan, a 401(k)
Plan, a Money Purchase Pension Plan or a Target Benefit Pension Plan, and as
amended from time to time in accordance with Section 14.2
2.50 PLAN ADMINISTRATOR - means
2.50(a) STANDARD OPTION - the Employer or
2.50(b) ALTERNATIVE - the person or persons designated in writing by the
Employer as the Plan Administrator for this Plan.
2.51 PLAN YEAR - means the 12 consecutive month period or the 52/53 week period
which ends on the date specified in the Adoption Agreement; provided, however,
if this Plan is adopted as a new Plan, the first Plan Year shall be the period
beginning on the Effective Date and ending on the date specified in Adoption
Agreement.
2.52 PRE-EXISTING PLAN - means the Employer's prior defined contribution plan
and the related trust agreement or other funding arrangement which is described
in the Adoption
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Agreement and which is amended and restated in the form of this Plan.
2.53 PROFIT SHARING PLAN - means this Plan as adopted by entering into the
Standardized Profit Sharing Plan Adoption Agreement or the Nonstandardized
Profit Sharing Plan Adoption Agreement
2.54 PROTOTYPE SPONSOR - means Smith Barney, Harris Upham & Co., Incorporated
and any successor to such corporation.
2.55 QUALIFIED MATCHING CONTRIBUTION - means the contribution made by the
Employer and by any Participating Affiliate to the Fund under Section 5.3(c) by
reason of a Participant's Elective Deferrals or Employee Contributions.
2.56 QUALIFIED MATCHING ACCOUNT - means the subaccount established as part of a
Participant's Account to record the Qualified Matching Contributions made on the
Participant's behalf under this Plan and the Fund Earnings attributable to such
contributions.
2.57 QUALIFIED NONELECTIVE CONTRIBUTION - means the contribution (other than
Matching Contributions, Qualified Matching Contributions and Employer
Contributions) made by the Employer and by any Participating Affiliate to the
Fund under Section 5.3(d).
2.58 QUALIFIED NONELECTIVE ACCOUNT - means the subaccount established as part of
a Participant's Account to record the Qualified Nonelective Contributions made
on the Participant's behalf under this Plan and the Fund Earnings attributable
to such contributions.
2.59 ROLLOVER ACCOUNT - means the subaccount established as part of a
Participant's Account to record the Participant's Rollover Contributions and the
Fund Earnings attributable to such contributions.
2.60 ROLLOVER CONTRIBUTION - means (a) a contribution of an amount, or more than
one amount, which satisfies the applicable rollover requirements under Code
Section 402 or Code Section 408 made by a Participant to the Fund under Section
5.5 and (b) effective January 1, 1993, an eligible rollover distribution which
is directly transferred to the Fund on or after such date pursuant to a
Participant's election under Code Section 401(a)(31).
2.61 SELF-EMPLOYED INDIVIDUAL - means an individual who is self-employed and who
received Earned Income from the Employer or a Participating Affiliate or who
would have received such Earned Income but for the fact that the Employer or the
Participating Affiliate did not have Net Profits.
2.62 SPOUSE - means the person who is lawfully married to the Participant on the
date the Participant's Account becomes payable under this Plan or, if a
Participant dies before such date, the person who was lawfully married to such
Participant on the Participant's date of death. However, a former spouse shall
be treated as the Spouse and current spouse shall not be treated as the Spouse
to the extent provided under a qualified domestic relations order as described
in Code Section 414(p).
2.63 TARGET BENEFIT PENSION PLAN - means this Plan as adopted by entering into
the Standardized Target Benefit Pension Plan Adoption Agreement or the
Nonstandardized Target Benefit Pension Plan Adoption Agreement.
2.64 TAXABLE WAGE BASE - means for any Plan Year the contribution and benefit
base in effect under Section 230 of the Social Security Act at the beginning of
such Plan Year.
2.65 TRA 86 - means the Tax Reform Act of 1986 ("Act") and any other legislation
and related regulations, notices or other guidance for which amendments are
required to be made at the same time as amendments for such Act.
2.66 TRUST AGREEMENT - means the trust agreement between the Employer and the
Trustee which is established as part of this Plan and which is set forth in the
attached Smith Barney Shearson Prototype Defined Contribution Plan Trust
Agreement or, if so specified in the Adoption Agreement for a 401(k) Plan, the
Smith Barney Shearson Prototype Defined Contribution Plan Alternative Trust
Agreement for 401(k) Plans.
2.67 TRUSTEE - means the person or persons specified in the Adoption Agreement
who serve as the trustee for the Fund under the Trust Agreement and any
successor to such person or persons.
2.68 VALUATION DATE - means (a) the last day of each Plan Year and (b) each
other date, if any agreed upon in advance by the Employer and the Trustee,
provided the selection of such other date does not result in discrimination in
favor of Highly Compensated Employees which would be prohibited under Code
Section 401(a).
SECTION 3. SERVICE DEFINITIONS AND RULES
The definitions and rules in this Section 3 shall apply for purposes of
measuring an Employee's service (a) for participation purposes - to determine
when the Employee has satisfied the Participation Requirement and (b) for
vesting purposes - to determine the nonforfeitable interest in his or her
Account.
3.1 HOUR OF SERVICE METHOD (STANDARD OPTION). The definitions and rules in this
Section 3.1 shall apply unless the "Elapsed Time" method of crediting service is
specified in the Adoption Agreement.
3.1(a) BREAK IN SERVICE.
3.1(a)(1) GENERAL. The term "Break in Service" means each Computation
Period during which an Employee fails to complete more than 500 Hours
of Service.
3.1(a)(2) MATERNITY/PATERNITY RULE. Solely for purposes of determining
whether an Employee has a Break in Service, an Employee who is absent
from work for "maternity or paternity reasons" and who timely furnishes
proof of the reason for such absence (in accordance with such
nondiscriminatory rules as may be established by the Plan Administrator
and communicated to Employees) shall be credited with each Hour of
Service for which the Employee would otherwise have been credited but
for such absence, or if such Hours of Service cannot be determined,
with 8 Hours of Service for each day of such absence. However, the
total number of Hours of Service so credited to such Employee shall not
exceed 501 Hours
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of Service. The Hours of Service so credited shall be credited to the
Computation Period in which such absence begins if such credit is
necessary to prevent a Break in Service in such Computation Period or,
if such credit is unnecessary, in the immediately following
Computation Period. For purposes of this special maternity/paternity
rule, an absence for "maternity or paternity reasons" means and
absence (i) by reason of the pregnancy of the Employee, (ii) by reason
of the birth of a child of the Employee, (iii) by reason of the
placement of a child with the Employee in connection with the adoption
of such child by such Employee, or (iv) for purposes of caring for
such child for a period beginning immediately following such birth or
placement.
3.1(b) COMPUTATION PERIOD.
3.1(b)(1) GENERAL. The term "Computation Period" for purposes of
determining Years of Service and Breaks in Service means the applicable
period described in this Section 3.1(b).
3.1(b)(2) VESTING. The relevant Computation Period for measuring Years
of Service and Breaks in Service for vesting purposes shall be
(i) STANDARD OPTION - the Plan Year or
(ii) ALTERNATIVE - if so specified in the Adoption Agreement, (A)
the 12 consecutive month period which begins on the date the
Employee first performs an Hour of Service ("hire date") and ends
on the date immediately preceding the first anniversary of such
hire date and (B) each 12 consecutive month period thereafter
beginning on each anniversary of such hire date and ending on the
date immediately preceding the next anniversary of such date.
3.1(b)(3) PARTICIPATION. The initial Computation Period for measuring
Years of Service and Breaks in Service for participation purposes shall
be the 12 consecutive month period which begins on the first day an
Employee first performs an Hour of Service as an Employee ("hire date")
and ends on the date immediately preceding the first anniversary of
such date. Each subsequent Computation Period shall be
(i) STANDARD OPTION - each Plan Year, beginning with the Plan Year
which begins before the first anniversary of the Employee's hire
date (regardless of whether the Employee is credited with 1,000 or
more Hours of Service in the Employee's initial Computation
Period). An Employee shall be credited with two Years of Service
for participation purposes if the Employee completes 1,000 or more
Hours of Service in both the initial Computation Period and the
first Plan Year which begins within such initial Computation
Period, or
(ii) ALTERNATIVE - if so specified in the Adoption Agreement, the
12 consecutive month period which begins on each anniversary of an
Employee's hire date and ends on the date immediately preceding
the next anniversary of the Employee's hire date.
For participation purposes, an Employee shall be credited with a Year
of Service
(A) STANDARD OPTION - on the day of the Computation Period in
which the Employee is credited with at least 1,000 Hours of
Service (or such lesser number of hours specified in the Adoption
Agreement) or
(B) ALTERNATIVE - on the first date on which the Employee is
credited with at least 1,000 Hours of Service (or such lesser
number of hours specified in the Adoption Agreement) provided the
Employee completes such specified number of Hours of Service in
one Computation Period.
Notwithstanding the foregoing, if the Participation Requirement
includes a partial Year of Service, no minimum number of Hours of
service shall be required for such partial year and an Employee shall
be credited with such partial Year of Service on the date on which such
partial period of service is completed.
3.1(b)(4) CHANGE IN COMPUTATION PERIOD. If an amendment results in a
change in the Computation Period, the first Computation Period
established under such amendment shall begin before the last day of the
preceding Computation Period and each Employee to whom both such
Computation Periods apply and who completes 1,000 or more Hours of
Service in both such Computation Periods shall be credited with one
Year of Service for each such Computation Period.
3.1(c) HOUR OF SERVICE.
3.1(c)(1) GENERAL. The term "Hour of Service" means
(i) each hour for which an Employee is paid, or entitled to
payment, by the Employer or an Affiliate for the performance of
duties as an Employee, which hours shall be credited to the
Employee for the relevant Computation Period in which such duties
are performed;
(ii) each hour for which an Employee is paid, or entitle to
payment, by the Employer or an Affiliate 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
(A) no more than 501 hours shall be credited under this clause
(ii) for any single continuous period during which no duties are
performed (whether or not such period covers more than one
relevant Computation Period) and (B) hours under this clause (ii)
shall be calculated and credited pursuant to Section 2530.200b-2
of the Department of Labor Regulations which are
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incorporated as part of this Plan by this reference; and
(iii) each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer or an
Affiliate; provided (A) no credit shall be given for an hour
described in this clause (iii) if credit also is given for such
hour under clause (i) or clause (ii), and (B) an hour described in
this clause (iii) shall be credited to the Employee for relevant
Computation Period or Computation Periods to which the award or
agreement pertains rather than to the Computation Period in which
the award, agreement or payment is made.
3.1(c)(2) DETERMINATION. The Employer shall determine an Employee's
Hours of Service
(i) STANDARD OPTION - by actually counting hours and maintaining
records which reflect the actual hours worked, or
(ii) ALTERNATIVE - if so specified in the Adoption Agreement, by
crediting each such Employee with
(A) 10 Hours of Service for each day,
(B) 45 Hours of Service for each week,
(C) 95 Hours of Service for each semi-monthly payroll
period, or
(D) 190 Hours of Service for each month
during which the Employee otherwise would be credited with at
least one Hour of Service.
3.1(d) YEAR OF SERVICE. The term "Year of Service" means each Computation
Period during which an Employee completes at least
3.1(d)(1) STANDARD OPTION - 1,000 Hours of Service or
3.1(d)(2) ALTERNATIVE - such lesser number of Hours of Service
specified in the Adoption Agreement.
Notwithstanding the foregoing, if the Participation Requirement includes a
partial Year of Service, no minimum number of Hours of Service shall be
required for such partial year.
3.1(e) CHANGE IN SERVICE CALCULATION METHOD. If an amendment changes the
method of crediting service from the "Elapsed Time" method to the "Hours of
Service" method, each Employee who was credited with service under the
"Elapsed Time" method shall be credited with service.
3.1(e)(1) for the Employee's employment before the Computation Period
in which such amendment is adopted, as determined on the basis that one
Year of Service credited to the Employee under the "Elapsed Time"
method for such employment shall equal one Year of Service under this
Section 3.1,
3.1(e)(2) for the Employee's employment during the Computation Period
in which such amendment is adopted, for a number of Hours of Service
determined by uniformly applying one of the equivalencies set forth in
Section 3.1(c)(2)(ii) to any fractional part of a year credited to the
Employee under the "Elapsed Time" method as of the effective date of
the amendment, and
3.1(e)(3) for the Employee's employment on and after the effective date
of the amendment, as determined under the rules in this Section 3.1.
3.2 ELAPSED TIME METHOD (ALTERNATIVE). If the "Elapsed Time" method of crediting
service is specified in the Adoption Agreement, the definitions and rules in
this Section 3.2 shall apply in lieu of the definitions and rules in Section
3.1.
3.2(a) BREAK IN SERVICE.
3.2(a)(1) GENERAL. The term "Break in Service" means a Period of
Severance of at lest 12 consecutive moths.
3.2(a)(2) MATERNITY/PATERNITY RULE. If an Employee is absent from
service for "maternity or paternity reasons" and the Employee timely
furnishes proof of the reason for such absence (in accordance with such
nondiscriminatory rules as may be established by the Plan Administrator
and communicated to Employees), the 12 consecutive month period
beginning on the first anniversary of the first date of such absence
shall not constitute a Break in Service. Such 12 consecutive month
period shall be neither a Period of Severance nor a period of Service.
For purposes of this special maternity/paternity rule, an absence for
"maternity or paternity reasons" means an absence (i) by reason of the
pregnancy of the Employee, (ii) by reason of the birth of a child of
the Employee, (iii) by reason of the placement of a child with the
Employee in connection with the adoption of such child by the Employee,
or (iv) for purposes of caring for such child for a period beginning
immediately following such birth or placement.
3.2(b) HOUR OF SERVICE. The term "Hour of Service" means each hour for
which an Employee is paid, or entitled to payment, by the Employer or an
Affiliate for the performance of duties as an Employee during any period of
employment.
3.2(c) PERIOD OF SEVERANCE. The term "Period of Severance" means a
continuous period of time during which an Employee is not employed by the
Employer or an Affiliate beginning on the Date the Employee retires, quits
or is discharged, or if earlier, the 12 month anniversary of the date on
which the Employee was otherwise first absent from service.
3.2(d) PERIOD OF SERVICE.
3.2(d)(1) GENERAL. For participation purposes and for vesting purposes,
the term "Period of Service" means an Employee's employment completed
as an Employee of the Employer and any Affiliate beginning on such
Employee's first day of employment or reemployment and ending on the
date a Break in Service begins. An Employee's first day of employment
or reemployment shall be the first day
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the Employee performs an Hour of Service. A Period of Service also
shall include any Period of Severance of less than 12 consecutive
months.
3.2(d)(2) AGGREGATION. An Employee's employment completed in all
Periods of Service shall be aggregated (to the extent that such service
is not disregarded under Section 3.7 or Section 3.8) and the number of
days in each Period of Service in excess of a whole year of employment
(or, if there is no whole year of employment in any such period, the
number of days in such period) shall be aggregated into additional
whole years of employment on the assumption that 365 days equals one
whole year of employment.
3.2(e) YEAR OF SERVICE. The term "Year of Service" means each 12
consecutive month period of employment completed in any Period of Service
beginning on the date an Employee first completes an Hour of Service ("hire
date") and ending on the date immediately preceding the anniversary of such
hire date. Subsequent Years of Service shall begin on each anniversary of
the Employee's hire date and end on the date immediately preceding the next
anniversary of such hire date.
3.2(f) CHANGES IN SERVICE CALCULATION METHOD. If an amendment changes the
method of crediting service from the "Hour of Service" method to the
"Elapsed Time" method, each Employee who had any service credit under the
"Hour of Service" method shall be credited with service
3.2(f)(1) for the Employee's employment before the Computation Period
in which such amendment is adopted, as determined on the basis that one
Year of Service credited to the Employee under the "Hour of Service"
method for such employment shall equal one Year of Service under this
Section 3.2,
3.2(f)(2) for the Employee's employment during the Computation Period
in which such amendment is adopted, as determined under the rules in
this Section 3.2 or, if greater, as determined for such period under
the "Hour of Service" method as converted to Years of Service under
the assumption that 365 days equals one Year of Service, and
3.2(f)(3) for the Employee's employment after the last day of the
Computation Period in which such amendment is adopted, as determined
under the rules in this Section 3.2.
3.3 SERVICE BEFORE EFFECTIVE DATE. For participation purposes all periods of
employment with the Employer or an Affiliate completed before the Employer
adopted this Plan or a predecessor plan ("pre-effective date employment") shall
be included (to the extent such service is not disregarded under Section 3.7).
For vesting purposes all periods of pre-effective date employment to the extent
shall be included unless such service is disregarded under Section 3.7 or
Section 3.8. Notwithstanding the foregoing, service credit for vesting purposes
automatically shall be granted for pre-effective date employment to the extent
required by Code Section 411(a) for periods during which the Employer or an
Affiliate maintained a predecessor plan.
3.4 SERVICE WITH PREDECESSOR EMPLOYER. All periods of employment with a
predecessor employer or employers shall be included in calculating an Employee's
service to the extent required by Code Section 414(a) if the Employer or an
Affiliate maintains a plan of such predecessor employer. However, if the
Employer or an Affiliate does not maintain a plan of such predecessor employer,
periods of employment with such predecessor employer shall be included in
calculating an Employee's service
3.4(a) STANDARD OPTION - only to the extent required under regulations
under Code Section 414(a) or
3.4(b) ALTERNATIVE - only if so specified in the Adoption Agreement.
3.5 LEASED EMPLOYEES. A Leased Employee shall be credited with service as an
Employee of the Employer or an Affiliate in accordance with Code Section 414(n)
or Section 414(o).
3.6 SERVICE WITH AFFILIATES. An Employee shall be credited with all service with
any Affiliate and any other entity which is required to be aggregated with the
Employer under Code Section 414(o).
3.7 SPECIAL BREAK IN SERVICE RULES.
3.7(a) STANDARD OPTION. Except as provided in Section 3.7(c) and Section
8.2, an Employee who as a Break in Service shall be credited after such
Break in Service for both participation and vesting purposes with all Years
of Service completed before such Break in Service.
3.7(b) ALTERNATIVE. In addition to the exceptions in Section 3.7(c) and
Section 8.2, the Employer may specify in the Adoption Agreement that
certain service completed before a Break in Service may be disregarded
under one or more of the rules set forth in this Section 3.7(b).
3.7(b)(1) ONE YEAR HOLD-OUT RULE. If the "One Year Hold-Out Rule" is
specified in the Adoption Agreement for a nonstandardized Plan, an
Employee who has a Break in Service (two Breaks in Service if the
Alternative Maternity/Paternity Rule applies) shall not be credited
after such Break in Service for participation purposes or vesting
purposes with any Year of Service completed before such Break in
Service until the Employee completes a Year of Service after such Break
in Service.
In applying this rule for participation purposes, such Year of Service
shall be measured by the Computation Period which begins on an
Employee's "Reemployment commencement date" and, if necessary,
subsequent Computation Periods beginning
(i) with the Plan Year which includes the first anniversary of the
"reemployment commencement date" if the standard Computation
Period in Section 3.1(b)(3)(i) is specified in the Adoption
Agreement, or
(ii) on anniversaries of the "reemployment commencement date" if
the alternative
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Computation Period in Section 3.1(b)(3)(ii) is specified in the
Adoption Agreement.
The "reemployment commencement date" shall be the first day on which
the Employee is credited with an Hour of Service for the performance of
duties after the first Computation Period in which the Employee incurs
a Break in Service. If an Employee who was a Participant before his or
her Break in Service completes a Year of Service in accordance with
this provision, such Employee's participation shall be reinstated as of
his or her reemployment commencement date.
3.7(b)(2) PRE-PARTICIPATION RULE. If the "Pre-Participation Rule" is
specified in the Adoption Agreement, an Employee who has a Break in
Service (two Breaks in Service if the Alternative Maternity/Paternity
Rule applies) before the Employee satisfies the Participation
Requirement shall not be credited for participation purposes with any
Year of Service completed before such Break in Service. However, this
rule shall only apply if the Participation Requirement for the Plan
requires more than one Year of Service and the vesting schedule
specified in the Adoption Agreement provides for full and immediate
vesting.
3.7(b)(3) RULE OF PARITY. If the "Rule of Parity" is specified in the
Adoption Agreement, the following rules shall apply:
(i) GENERAL. If an Employee does not have any nonforfeitable
interest in the portion of the Employee's Account which is
attributable to Employer contributions, the Employee's Years of
Service before a period of consecutive Breaks in Service shall not
be taken into account in computing service for participation or
vesting purposes if the number of consecutive Breaks in Service in
such period equals or exceeds the greater of 5 (6 if the
Alternative Maternity/Paternity Rule applies) or the aggregate
number of Years of Service completed before such Breaks in Service
("pre-break service"). Such pre-break service shall not include
any pre-break service disregarded under the preceding sentence by
reason of prior Breaks in Service.
(ii) PARTICIPATION. If an Employee's Years of Service are
disregarded under this rule of parity the Employee shall be
treated as a new Employee for participation purposes. If the
Employee's Years of Service are not disregarded under this rule,
the Employee shall continue to participate in the Plan, or, if the
Employee separated from service, shall participate immediately
upon the Employee's reemployment.
(iii) VESTING. If a Participant's Years of Service are disregarded
under this rule of parity, the Participant's pre-break Years of
Service shall be disregarded for purposes of determining the
Participant's nonforfeitable interest in the Participant's
post-break Employer Account. If a Participant's pre-break Years of
Service are not disregarded under this rule of parity, the
Participant's pre-break Years of Service shall be counted for
purposes of determining the Participant's nonforfeitable interest
in the Participant's post-break Employer Account.
3.7 (b)(4) ALTERNATIVE MATERNITY/PATERNITY RULE. If the "Alternative
Maternity/Paternity Rule" is specified in the Adoption Agreement, the
special Maternity/Paternity rule set forth in Section 3.1(a)(2) shall
not apply and the minimum period of consecutive Breaks in Service
required to disregard any service to deprive any Employee of any right
under this Plan shall be increased by one as specified in the
parentheticals in this Section 3.7 and in Section 8.2.
3.7(c) VESTING ON REEMPLOYMENT AFTER BREAK IN SERVICE. If a Participant has
5 or more consecutive Breaks in Service (6 or more consecutive Breaks in
Service if the Alternative maternity/Paternity Rule applies), all Years of
Service completed after such Breaks in Service shall be disregarded for
purposes of determining the Participant's nonforfeitable interest in the
Participant's Employer Account and Matching Account that accrued before
such Breaks in Service. Accordingly, as set forth in Section 8.2, the
Employer shall not be required to restore a Forfeiture upon such
reemployment. Unless the Adoption Agreement specifies the Rule of Parity,
both the Participant's pre-break service and post-break service shall count
for purposes of determining the nonforfeitable interest in the
Participant's post-break Employer Account and Matching Account. If the
Adoption Agreement specifies the Rule of Parity and the Participant's
pre-break Years of Service are disregarded under that rule, then the
Participant's pre-break Years of Service shall not count for purposes of
determining the nonforfeitable interest in the Participant's post-break
Employer Account and Matching Account. As provided in Section 8.2, separate
accounts shall be maintained for the Participant's pre-break and post-break
Employer Account and Matching Account and such accounts shall share in Fund
Earnings.
If a Participant does not have 5 consecutive Breaks in Service (6 or more
consecutive Breaks in Service if the Alternative Maternity/Paternity Rule
applies), both the Participant's pre-break and post-break Years of Service
shall count in determining the nonforfeitable interest in both the
pre-break and post-break Employer Account and Matching Account balance.
However, unless the Adoption Agreement specifies the "Alternative to the
Buy Back Rule" (as described in Section 8.2(b)), a Participant's pre-break
Employer Account and Matching Account balance shall be zero unless the
Participant repays any distribution as provided in Section 8.2(a).
3.8 SERVICE EXCLUSIONS FOR VESTING PURPOSES.
3.8(a) STANDARD OPTION - An Employee shall be credited with all Years of
Service for vesting purposes (to the extent such service is not disregarded
under Section 3.7 and Section 8.2).
3.8(b) ALTERNATIVE - The Employer may specify in the Adoption Agreement
service which is expressly excluded for vesting purposes.
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SECTION 4. PARTICIPATION
4.1 GENERAL RULE. Each Eligible Employee shall become a Participant in this Plan
on the Entry Date which coincide with or immediately follows the date on which
the Eligible Employee satisfies the Participation Requirement (provided he or
she is an Eligible Employee on such Entry Date).
4.2 SPECIAL RULES.
4.2(a) PRE-EXISTING PLAN. Any Employee who was a participant in the
Pre-Existing Plan on the date immediately preceding the Effective Date or
who would have become a participant in the Pre-Existing Plan on the
Effective Date shall become a Participant under this Plan on such Effective
Date. However, no contributions shall be made by or on behalf of such
Participant unless the Participant is otherwise entitled to a contribution
under Section 5.
4.2(b) REEMPLOYMENT BEFORE SATISFYING PARTICIPATION REQUIREMENT. If an
Employee separates from service prior to satisfying the Participation
Requirement and is thereafter reemployed, all employment completed by such
Employee prior to such separation shall be aggregated with such Employee's
employment completed after reemployment for purposes of satisfying the
Participation Requirement unless such prior employment is excluded under
the rules set forth in Section 3.
4.2(c) REEMPLOYMENT AFTER SATISFYING PARTICIPATION REQUIREMENT. If an
Employee satisfies the Participation Requirement before he or she separates
from service and the Employee thereafter is reemployed, the Employee shall
become a Participant on the later of (1) the first day he or she completes
an Hour of Service as an Eligible Employee upon reemployment or (2) the
first Entry Date following the date on which he or she satisfies the
Participation Requirement. However, any such Employee whose prior service
is disregarded under Section 3 shall be treated as a new Employee for
participation purposes.
4.2(d) STATUS CHANGE. If the status of an Eligible Employee for whom no
Account is maintained changes to that of an Employee (other than an
Eligible Employee) and such person's status thereafter changes back to that
of an Eligible Employee, such person shall become a Participant on the
later of (1) the date the status changes back to that of an Eligible
Employee or (2) the first Entry Date which coincides with or immediately
follows the date on which he or she satisfies the Participation
Requirement.
4.3 PARTICIPANT INFORMATION. Each Participant shall file with the Plan
Administrator such personal information and data as the Plan Administrator deems
necessary for the orderly administration of this Plan.
4.4 NO EMPLOYMENT RIGHTS. This Plan is not a contract of employment and
participation in this Plan shall not give any Employee or former Employee the
right to be retained in the employ of the Employer or any Affiliate or, upon
termination of such employment, to have any interest or right in the Fund other
than as expressly provided in this Plan.
SECTION 5. CONTRIBUTIONS
5.1 PROFIT SHARING PLAN. If this Plan is adopted as a Profit Sharing Plan, the
Employer Contribution made by the Employer and each Participating Affiliate for
each Plan Year shall equal such amount, if any, as the Board determines in its
discretion that the Employer and each Participating Affiliate shall contribute
for such year.
Employer Contributions under this Section 5.1 shall be made
5.1(a) STANDARD OPTION - from Net Profits or
5.1(b) ALTERNATIVE - if so specified in the Adoption Agreement, without
regard to Net Profits. Notwithstanding any such election, the Employer
intends that this Plan shall be a "profit-sharing plan" for purposes of the
Code and ERISA.
5.2 MONEY PURCHASE PENSION PLAN. If this Plan is adopted as a Money Purchase
Pension Plan, the Employer Contribution made by the Employer and each
Participating Affiliate for each Plan Year shall be an amount equal to the sum
of the contribution for each Active Participant as determined under the formula
specified in the Adoption Agreement. The Forfeitures for each Plan Year shall be
5.2(a) STANDARD OPTION - applied to reduce the Employer Contribution for
such Plan Year or
5.2(B) ALTERNATIVE - if so specified in the Adoption Agreement, allocated
to the Employer Account of each Active Participant in accordance with
Section 6.3(b). Notwithstanding any such election, the Employer intends
that this Plan shall be a "money purchase pension plan" for purposes of the
Code and ERISA.
5.3 401 (K) PLAN
5.3(a) GENERAL. If this Plan is adopted as a 401(k) Plan, the contributions
made by the Employer and each Participating Affiliate shall be determined
in accordance with the elections made by the Employer in the Adoption
Agreement and the rules set forth in this Section 5.3 other than the
Elective Deferrals and Employee Contributions shall be made
5.3(a)(1) STANDARD OPTION - from Net Profits or
5.3(a)(2) ALTERNATIVE - if so specified in the Adoption Agreement,
without regard to Net Profits.
Elective Deferrals and Employee Contributions shall be made without regard
to Net Profits. Notwithstanding any such election, the Employer intends
that this Plan shall be a "profit-sharing plan" for purposes of the Code
and ERISA.
5.3(b) MATCHING CONTRIBUTIONS. If the Employer specifies n the Adoption
agreement that Matching Contributions shall be made to the Plan, the
Employer and each Participating Affiliate shall make a Matching
Contribution for each eligible Participant based on the Employee
Contributions and Elective Deferrals made by or on behalf of such eligible
Participant in such amount and as of each Allocation Date as specified in
the Adoption Agreement. Notwithstanding the foregoing,
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5.3(b)(1) for Plan Years beginning on or after the Final Compliance
Date, no Matching Contribution shall be made on account of a
Participant's Elective Deferrals or Employee Contributions which are
Excess Elective Deferrals under Section 7.3, Excess Contributions under
Section 7.4 or Excess Aggregate Contributions under Section 7.5, and
5.3(b)(2) for Plan Years beginning before the Final Compliance Date, no
Matching Contribution shall be made on account of such excess amounts
unless specified in the formula for Matching Contributions set forth in
the Adoption Agreement.
5.3(c) QUALIFIED MATCHING CONTRIBUTIONS. If the Employer specifies in the
Adoption Agreement that Qualified Matching Contributions shall be made to
the Plan, the Employer and each Participating Affiliate shall make a
Qualified Matching Contribution for each eligible Participant based on the
Employee Contributions and Elective Deferrals made by or on behalf of such
eligible Participant in such amount and as of each Allocation Date as
specified in the Adoption Agreement. Qualified Matching Contributions shall
be subject to the following special rules:
5.3(c)(1) the Participant may not elect to receive such contributions
in cash until distributed from the Plan;
5.3(c)(2) such contributions shall be completely nonforfeitable when
made;
5.3(c)(3) such contributions shall be subject to the same distribution
and withdrawal restrictions applicable to Elective Deferrals set forth
in Section 9.2(b);
5.3(c)(4) for Plan Years beginning on and after the Final Compliance
Date, no Qualified Matching Contribution shall be made on account of a
Participant's Elective Deferrals or Employee Contributions which are
Excess Elective Deferrals under Section 7.3, Excess Contributions under
Section 7.4 or Excess Aggregate Contributions under Section 7.5; and
5.3(c)(5) for Plan Years beginning before the Final Compliance Date, no
Qualified Matching Contribution shall be made on account of such excess
amounts unless specified in the formula for Qualified Matching
Contributions set forth in the Adoption Agreement.
5.3(d) QUALIFIED NONELECTIVE CONTRIBUTION. If the Employer specifies in the
Adoption Agreement that Qualified Nonelective Contributions shall be made
to the Plan, the Employer and each Participating Affiliate shall make
Qualified Nonelective Contributions for each eligible Participant in such
amount and as of each Allocation Date specified in the Adoption Agreement.
In addition, in lieu of distributing Excess Contributions as provided in
Section 7.4(d) or Excess Aggregate Contributions as provided in Section
7.5(d), the Employer and each Participating Affiliate may contribute on
behalf of each Participant who is a Nonhighly Compensated Employee on the
last day of each Plan Year such amount, if any, as the Employer and each
Participating Affiliate determine in their discretion to contribute for
such Plan Year to satisfy the ADP limit of Section 7.4(b) or the ACP limit
of Section 7.5(b), or both, pursuant to the regulations under Code Section
401(k) and Code Section 401(m).
Qualified Nonelective Contributions shall be subject to the following
special rules:
5.3(d)(1) the Participant may not elect to receive such contributions
in cash until distributed from the Plan;
5.3(d)(2) such contributions shall be completely nonforfeitable when
made; and
5.3(d)(3) such contributions shall be subject to the same distribution
and withdrawal restrictions applicable to Elective Deferrals set forth
in Section 9.2(b).
5.3(e) DISCRETIONARY EMPLOYER CONTRIBUTION. If the Employer specifies in
the Adoption Agreement that discretionary Employer Contributions shall be
made, the Employer Contribution made by the Employer and each Participating
Affiliate for each Plan Year shall equal such amount, if any, as the Board
determines in its discretion that the Employer and each Participating
Affiliate shall contribute for such year.
5.3(f) ELECTIVE DEFERRALS. If the Employer specifies in the Adoption
Agreement that Elective Deferrals may be made, each Participant who is an
Eligible Employee may elect pursuant to a cash or deferred election that
the Employer and each Participating Affiliate make Elective Deferrals to
the Plan on the Participant's behalf in lieu of cash compensation for each
pay period ending on any date on or after he or she becomes a Participant
and on which he or she is an Eligible Employee in such amounts as specified
in the Adoption Agreement. All Elective Deferrals shall be made exclusively
through payroll withholding and shall be transferred by the Employer or
Participating Affiliate to the Trustee as soon as practicable after the
date such Elective Deferrals are withheld.
5.3(g) EMPLOYEE CONTRIBUTIONS. If the Employer specifies in the Adoption
Agreement that Employee Contributions may be made, each Participant who is
an Eligible Employee may elect to make Employee Contributions to the Plan
for each pay period ending on any date on or after he or she becomes a
Participant and on which he or she is an Eligible Employee in such amounts
as specified in the Adoption agreement. All Employee Contributions shall be
made exclusively through payroll withholding and shall be transferred by
the Employer or Participating Affiliate to the Trustee as soon as
practicable after the date such Employee Contributions are withheld.
5.3(h) ELECTION RULES AND LIMITATIONS.
5.3(h)(1) GENERAL. The Plan Administrator form time to time shall
establish and shall communicate in writing to Participants who are
Eligible Employees such reasonable nondiscriminatory deadlines, rules
and procedures for making the elections described in this Section 5.3
as the plan Administrator deems appropriate under the circumstances
for the proper administration of the Plan. A Participant's election
shall be made on an Election Form and no election
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shall be effective unless such Election Form is properly completed and
timely filed in accordance with such established deadlines, rules and
procedures. The Plan Administrator shall have the right at any time
unilaterally to reduce the amount or percentage of Elective Deferrals
or Employee Contributions elected under this Section 5.3 if the Plan
Administrator determines that such reduction is necessary to satisfy
the limitations under Section 7 of the Plan.
5.3(h)(2) COMMENCEMENT OF ELECTION. A Participant's initial election
to make Elective Deferrals or Employee Contributions under this
Section 5.3 for any period of employment may be effective as early as
the Entry Date on which he or she becomes a Participant in the Plan.
If a Participant does not make a proper election to make Elective
Deferrals or Employee Contributions as of such Entry Date, the
Participant may thereafter make an election
(i) STANDARD OPTION - effective on any date or
(ii) ALTERNATIVE - effective only as of the dates specified in the
Adoption Agreement.
A Participant's election shall remain in effect until revised or
terminated in accordance with this Section 5.3(h).
5.3(h)(3) REVISION OF ELECTION. An election, once effective, can
thereafter be revised by a Participant.
(i) STANDARD OPTION - effective on any date or
(ii) ALTERNATIVE - effective only as of the dates specified in the
Adoption Agreement.
5.3(h)(4) TERMINATION OF ELECTION. A Participant shall have the right
to completely terminate an election under this Section 5.3 at any time,
and any such termination shall become effective as of the first day of
the first pay period following the date he or she timely files a
properly completed Election Form terminating such election. Any
Participant whose status as an Eligible Employee terminates shall be
deemed to have completely terminated his or her election, if any, under
this Section 5.3 as of the date the Participant's status as such so
terminates.
5.3(h)(5) RESUMPTION AFTER TERMINATION. A Participant whose election
terminates may thereafter elect to resume contributions under this
Section 5.3
(i) STANDARD OPTION - effective as of any date, or
(ii) ALTERNATIVE - effective only as of the dates specified in the
Adoption Agreement.
5.3(h)(6) EFFECTIVE DATES OF ELECTIONS. A Participant's initial,
revised or resumed election shall be effective only if he or she is an
eligible Employee on the effective date of such elections set forth in
this Section 5.3(h). Elective Deferrals and Employee Contributions made
pursuant to a Participant's elections shall be withheld from
Compensation which otherwise would be paid on or after the effective
date of such election and while he or she is an Eligible Employee.
Under no circumstances shall a Participant's Elective Deferral election
apply to defer Compensation which has been paid to the Participant or
which he or she is currently eligible to receive (in cash or otherwise)
at his or her discretion.
5.3(i) APPLICATION OF FORFEITURES. The Forfeitures attributable to Matching
Contributions and Employer Contributions shall be
5.3(i)(1) STANDARD OPTION - applied to reduce the Matching
Contributions, Qualified Matching Contributions and Qualified
Nonelective Contributions, if any, in accordance with
Section 6.3(c)(2)(ii)(A) or
5.3(i)(2) ALTERNATIVE - if so specified in the Adoption Agreement,
(i) allocated to the Employer Account or Matching Account, as
applicable, of each Active Participant in accordance with
Section 6.3(c)(2)(ii)(B)(I), or
(ii) for a nonstandardized Plan, allocated in accordance with the
formula specified in the Adoption Agreement.
5.4 TARGET BENEFIT PENSION PLAN.
5.4(a) GENERAL. If this Plan is adopted as a Target Benefit Pension Plan,
the Employer Contribution made by the Employer and each Participating
Affiliate for each Plan Year shall be an amount equal to the sum of the
contributions required to fund each Active Participant's "Target Benefit"
specified in the Adoption Agreement. The Forfeitures for each Plan Year
shall be applied to reduce the Employer Contribution for such Plan Year.
Such contribution shall be determined as of the last day of such Plan Year
under the individual level premium funding method, using the interest rate
and mortality table specified in the Adoption Agreement, the Participant's
age on his or her last birthday and the assumption of a constant rate of
future Compensation, in accordance with the following:
5.4(a)(1) STEP 1. If the Participant has not reached the Plan's Normal
Retirement Age, calculate the present value of the "Target Benefit"
specified in the Adoption Agreement by multiplying the "Target Benefit"
by the product of (1) the applicable factor from Table 1(a) or (b),
whichever is appropriate, in Exhibit A to the Adoption Agreement and
(2) the applicable factor from Table III(a) or (b), whichever is
appropriate, in Exhibit A to the Adoption Agreement. If the Participant
is at or beyond the Plan's Normal Retirement Age, calculate the present
value of the "Target Benefit" specified in the Adoption Agreement by
multiplying the "Target Benefit" by the applicable factor form Table
IV(a) or (b), whichever is appropriate, in Exhibit A to the Adoption
Agreement.
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5.4(a)(2) STEP 2. Calculate the excess, if any, of the amount
determined in Step 1 over the theoretical reserve.
5.4(a)(3) STEP 3. Amortize the result in Step 2 by multiplying it by
the applicable factor form Table II in Exhibit A to the Adoption
Agreement. For the Plan Year in which the Participant attains Normal
Retirement Age and for subsequent Plan Years, the applicable factor is
1.0.
5.4(b) THEORETICAL RESERVE. For purposes of this Section 5.4, the
theoretical reserve is determined as follows:
5.4(b)(1) A Participant's theoretical reserve as of the last day to
the first Plan Year in which the Participant participates in the Plan,
and as of the last day of the first Plan Year after any Plan Year in
which the Plan either did not satisfy the safe harbor in Section
1.401(a)(4)-8(b)(3) of the Federal Income Tax Regulations or was not a
Prior Safe Harbor Plan, is zero. In all other cases, in the first Plan
Year in which this theoretical reserve provision is adopted or made
effective, if later, as specified in the Adoption Agreement ("year
1"), the initial theoretical reserve is determined as follows:
(i) Calculate as of the last day of the Plan Year immediately
preceding year 1 the present value of the "Target Benefit", using
the actuarial assumptions, the provisions of the plan, and the
Participant's Average Annual Compensation as of such date;
provided, however, for a Participant who is beyond Normal
Retirement Age in year 1, the straight life annuity factor used
for such determination shall be the factor applicable for such
Normal Retirement Age.
(ii) Calculate as of the last day of the Plan Year immediately
preceding year 1 the present value of future Employer
Contributions, i.e., the contributions due each Plan Year using
the actuarial assumptions, the provisions of the Plan
(disregarding those provisions of the Plan providing for the
limitations of Code Section 415 or the minimum contributions
under Code Section 416), and the Participant's Average Annual
Compensation as of such date, beginning with year 1 through the
end of the Plan Year in which the Participant attains Normal
Retirement Age.
(iii) Subtract the amount determined in clause (ii) from the
amount determined in clause(i).
5.4(b)(2) Accumulate the initial theoretical reserve in Section
5.4(b)(1) and the Employer Contribution (as limited by Code Section
415, but without regard to any required minimum contributions under
Code Section 416) for each Plan Year beginning in year 1 up through
the last day of the current Plan Year (excluding contributions, if
any, made for the current Plan Year) using the Plan's interest
assumption in effect for each such year. In any Plan year following
the Plan Year in which the Participant attains Normal Retirement Age,
the accumulation is calculated assuming an interest rate of 0%.
5.4(b)(3) The calculations in this Section 5.4(b) shall be made as of
the last day of each Plan Year, on the basis of the Participant's age
on his or her last birthday and the interest rate in effect on the
last day of the prior Plan Year.
5.4(c) PAST SERVICE CREDITS. If the Plan is adopted as a standardized Plan,
upon initial adoption of this Plan or upon a Plan amendment which is
effective on or after the Final Compliance Date, no more than 5 years of
credit shall be granted for service completed before the effective date of
such adoption or amendment, and any such past service credit shall be
granted on a uniform basis to all Participants in the Plan on such
effective date.
5.4(d) TRA 86 AMENDMENT. A Participant's Account balance shall not be
reduced as a result of an amendment to this Plan or a Pre-Existing Plan to
satisfy the requirements of TRA 86. To the extent that contributions
actually made on a Participant's behalf for Plan Years beginning after
December 31, 1988 exceed the contributions that would have been required
under the formula as effective for such years as a result of the amendment
of this Plan or a Pre-Existing Plan to satisfy TRA 86, such excess shall be
applied to offset contributions required to such Participant's Account for
Plan Years beginning after the date such TRA 86 amendment is adopted or, if
later, the date such TRA86 amendment is effective consistent with ERISA
Section 204(h).
5.4 (e) SPECIAL DEFINITIONS AND RULES. The special definitions and rules in
this Section 4.5(e) shall apply for purposes of determining the Employer
Contributions under a Target Benefit Pension Plan.
5.4(e)(1) CUMULATIVE DISPARITY LIMIT. For a Plan with a Unit Benefit
Formula, a Participant's Cumulative Disparity Limit is equal to 35
minus (1) the number of the Participant's Years of Participation under
this Plan during which this Plan did not satisfy the safe harbor for
target benefit plans on Section 1.401(a)(4)-8(b)(3) of the Federal
Income Tax Regulations or was not a Prior Safe Harbor Plan, and (2)
the number of years during which the Participant participated in one
or more qualified plans or simplified employee pension plans ever
maintained by the Employer (other than years counted in clause (1) or
counted toward a Participant's total Years of Participation). The
Cumulative Disparity Limit shall be determined taking into account
only those Years of Participation in this Plan beginning after
December 1, 1988 when this Plan had an integrated benefit formula and
those years of participation in such other qualified plans and
simplified employee pension plans beginning after December 31, 1988
during which the Participant actually received an allocation under an
integrated defined contribution plan (other than a target benefit
pension plan), during which the Participant was eligible to receive a
benefit under an integrated defined benefit pension plan or an
integrated target benefit pension plan), or during which the
Participant received an allocation or accrued a benefit under a plan
which imputed permitted disparity pursuant to Section 1.401(a)-7 of
the Federal Income Tax Regulations.
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<PAGE>
5.4(e)(2) CUMULATIVE DISPARITY REDUCTION. For a Plan with Fixed Benefit
Formula, the Excess Benefit Percentage will further be reduced as set
forth in this Section 5.4(e)(2) for a Participant with more than 35
"cumulative disparity years." A Participant's "cumulative disparity
years" consist of the sum of (1) the Participant's total Years of
Projected Participation, (2) the Participant's Years of Participation
during which this Plan did not satisfy the safe harbor for target
benefit plans in regulations Section 1.401(a)(4)-8(b)(3) of the Federal
Income Tax Regulations or was not a Prior Safe Harbor Plan, and (3) the
number of years during which the Participant participated in one or
more qualified plans or simplified employee pension plans ever
maintained by the Employer (other than years in clause (1) or (2)
above); provided that the cumulative disparity years shall be
determined taking into account only those Years of Participation in his
Plan beginning after December 31, 1988 when this Plan had an integrated
benefit formula and those years of participation in such other
qualified plans and simplified employee pension plans beginning after
December 31, 1988 during which the Participant actually received an
allocation under an iterated defined contribution plan (other than a
target benefit pension plan), during which the Participant was eligible
to receive a benefit under an integrated defined benefit pension plan
(or an integrated target benefit pension plan), or during which the
Participant received an allocation or accrued a benefit under a plan
which imputed permitted disparity pursuant to Section 1.401(a)-7 of the
Federal Income Tax Regulations.
If this Cumulative Disparity Reduction applies, the Excess Benefit
Percentage will be reduced as follows:
(A) Subtract the Participant's Base Benefit Percentage from the
Participant's Excess Benefit Percentage (after modification as
required in the Adoption Agreement for less than 35 Years of
Projected Participation).
(B) Multiply the results determined in (A) by a fraction (not less
than 0), the numerator of which is 35 minus the sum of the years
in clauses (2) and (3) of this Section 5.4(e)(2), and the
denominator of which is 35.
(C) The Participant's Excess Benefit Percentage is equal to the
sum of the result in (B) and the Participant's Base Benefit
Percentage, as otherwise modified in the Adoption Agreement.
5.4(e)(3) CURRENT STATED BENEFIT. Each Participant's Current Stated
Benefit will be the product of (1) the amount derived from the formula
specified in the Adoption Agreement, and (2) a fraction, the numerator
of which is the Participant's number of Years of Participation from the
latest Fresh-Start Date (if any) through and including the later of the
year in which the Participant attains Normal Retirement Age or the
current Plan Year, and the denominator of which is the Participant's
total Years of Projected Participation. If this Plan has not had a
Fresh-Start Date, such fraction will equal 1.0 for all Participants. In
any event, for those Participants who first participated in the Plan
after the latest Fresh-Start Date, such fraction will equal 1.0. For
purposes of determining the numerator of the fraction described in
clause (2), only those current and prior years during which a
Participant was eligible to receive a contribution under the Plan will
be taken into account.
5.4(e)(4) FRESH-START DATE. Fresh-Start Date means the last day of a
Plan Year preceding a Plan Year for which provisions that would affect
the amount of the Current Stated Benefit are amended. If applicable,
the latest Fresh-Start Date of the Plan shall be designated in the
Adoption Agreement.
5.4(e)(5) FROZEN ACCRUED STATED BENEFIT. A Participant's Frozen Accrued
Stated Benefit is determined as of the Plan's latest Fresh-Start Date
as if the Participant terminated employment with the Employer as of
that date, without regard to any amendment made to the Plan after that
date except as permitted under regulations.
A Participant's Frozen Accrued Stated Benefit is equal to the amount of
the Current Stated Benefit in effect on the latest Fresh-Start Date
that a Participant has accrued as of that date, assuming that such
Current Stated Benefit accrues ratably from the year in which the
Participant first participated in this Plan (or, if later, the
immediately preceding Fresh-Start Date under this Plan) through and
including the Plan Year in which the Participant attains Normal
Retirement Age.
The amount of the Current Stated Benefit in effect on the latest
Fresh-Start Date that a Participant is assumed to have ratably accrued
is determined by multiplying the Plan's Current Stated Benefit in
effect on that date by a fraction, the numerator of which is the number
of Years of Participation from the later of the Participant's first
Year of Participation this Plan or the immediately preceding
Fresh-Start Date (if any) through and including the year that contains
the latest Fresh-Start Date, and the denominator of which is the number
of Years of Participation from the later of the Participant's first
Year of Participation in this Plan or the immediately preceding
Fresh-Start Date (if any) through and including the later of the year
in which the Participant attains Normal Retirement Age or the current
Plan Year. For purposes of this paragraph, only those Years of
Participation during which a Participant was eligible to receive a
contribution under the Plan will be taken into account.
If this Plan has had a preceding Fresh-Start Date, each Participant's
Frozen Accrued Stated Benefit as of the latest Fresh-Start Date will
equal the sum of the amount of the Current Stated Benefit in effect on
the latest Fresh-Start Date that a Participant is assumed to have
ratably accrued as of that date under the preceding paragraph, and the
Frozen
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Accrued State Benefit determined as of the preceding Fresh-Start
Date(s).
If (1) the Current Stated Benefit formula in effect on the latest
Fresh-Start Date was not expressed as a straight life annuity for all
Participants, and/or (2) the Normal Retirement Age for any Participant
on the latest Fresh-Start Date was greater than the Normal Retirement
Age for that Participant under the Current Stated Benefit formula in
effect after the latest Fresh-Start Date, the Frozen Accrued Stated
Benefit will be converted to an actuarially equivalent straight life
annuity commencing at the Participant's Normal Retirement Age under the
Current Stated Benefit formula in effect after the latest Fresh-Start
Date, using the actuarial assumptions in effect under the Current
Stated Benefit formula in effect on the latest Fresh-Start Date.
Notwithstanding the above, if in the immediately preceding Plan Year this
Plan did not satisfy the safe harbor for target benefit plans in Section
1.401(a)(4)-8(b)(3) of the Federal Income Tax Regulations or was not a
Prior Safe Harbor Plan, the Frozen Accrued Sated Benefit for any
Participant in the Plan, determined for the next Plan Year during which
Section 1.401(a)(4)-8(b)(3) of the Federal Income Tax Regulations is
satisfied until the year following the next Fresh-Start Date, if any, will
be zero.
5.4(e)(6) MAXIMUM EXCESS ALLOWANCE. The Maximum Excess Allowance is
equal to the lesser of the Base Benefit Percentage or
(1) For a Plan with a Unit Benefit Formula, the Applicable Factor
determined from Table A or Table B in Exhibit B to the Adoption
Agreement, and (2) for a plan with a Fixed Benefit Formula, 35
times the Applicable Factor determined from Table A or Table B in
Exhibit B to the Adoption Agreement.
5.4(e)(7) OVERALL PERMITTED DISPARITY LIMIT. If for any Plan Year this
Plan benefits any Participant who also benefits under another qualified
plan or simplified employee pension plan maintained by the Employer
that provides for permitted disparity (or imputes permitted disparity),
the Current Stated Benefit for all Participants under this Plan will be
equal to the Excess Benefit Percentage set forth in the Adoption
Agreement multiplied times
(1) for a Plan with a Unit Benefit Formula, the Participant's
total Average Annual Compensation times the Participant's total
Years of Projected participation under the Plan up to the maximum
total Years of Projected Participation specified in the Adoption
Agreement, and
(2) for a Plan with a Fixed Benefit Formula, the Participant's
total Average Annual Compensation (prorated for years less than
35).
If this paragraph is applicable, this Plan will have a Fresh-Start Date
on the last day of the Plan Year preceding the Plan Year in which this
paragraph is first applicable. In addition, if in any subsequent Plan
Year this Plan no longer benefits any Participant who also benefits
under another plan of the Employer, this Plan will have a Fresh-Start
Date on the last day of the Plan Year preceding the Plan Year in which
this paragraph is no longer applicable.
5.4(e)(8) PRIOR SAFE HARBOR PLAN. Prior Safe Harbor Plan means a Plan
adopted and in effect on September 19, 1991, that satisfied the
applicable nondiscrimination requirements for target benefit plans on
that date and in all prior periods (taking into account no amendments
to the Plan after September 19, 1991, other than amendments necessary
to satisfy Code Section 401(1)).
5.4(e)(9) YEAR OF PARTICIPATION - means each Year of Service (as
determined in the same manner as a Year of Service for vesting
purposes) completed after the Participant first becomes a Participant
in this Plan or the Pre-Existing Plan.
5.4(e)(10) YEARS OF PROJECTED PARTICIPATION. For purposes of
determining a Participant's Current Stated Benefit, a Participant's
total Years of Projected Participation under the Plan is the sum of the
Participant's total number of Years of Participation under this Plan
for the years this Plan consecutively satisfies the safe harbor for
target benefit plans in Section 1.401(a)(4)-8(b)(3) of the Federal
Income Tax Regulations or was a Prior Safe Harbor Plan, if applicable,
projected through the later of the end of the Plan Year in which the
Participant attains Normal Retirement Age or the end of the current
Plan Year. For purposes of determining a Participant's total Years of
Projected Participation, only those current and prior years during
which a Participant was eligible to receive a contribution under the
Plan will be taken into account.
5.5 ROLLOVER CONTRIBUTIONS.
5.5(a) STANDARD OPTION - An Eligible Employee may contribute on his or her
own behalf (or elect a direct transfer of) a Rollover Contribution to the
Fund, provided (1) such contribution shall be made (or transferred) in cash
or in a form which is acceptable to the Trustee, (2) such contribution
shall be made in accordance with such rules as the Plan Administrator and
the Trustee deem appropriate under the circumstances, and (3) if so
specified in the Adoption Agreement, no Rollover Contribution may be made
prior to the Entry Date on which the Eligible Employee becomes a
Participant in this Plan.
5.5(b) ALTERNATIVE - The Employer may specify in the Adoption Agreement
that no Rollover Contributions may be made.
5.6 NO EMPLOYEE OR MATCHING CONTRIBUTIONS. Unless this Plan is adopted as a
401(k) Plan which permits Employee Contributions, no nondeductible employee
contributions or matching contributions (as defined in Code Section 401(m))
shall be made to this Plan after the Plan Year in which this Plan is adopted by
the Employer. Any nondeductible employee contributions and matching
contributions made under a Pre-
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Existing Plan or under this Plan (in accordance with the preceding sentence) for
Plan Years beginning after December 31, 1986 shall be subject to the
nondiscrimination limitations under Code Section 401(m) as set forth in Section
7.5.
5.7 NO DEDUCTIBLE VOLUNTARY EMPLOYEE CONTRIBUTIONS. No voluntary deductible
employee contributions shall be made to this Plan for a taxable year beginning
after December 31, 1986. Any voluntary deductible employee contributions made
under a Pre-Existing Plan prior to such date shall be maintained in a separate
account under this Plan. Such account shall be nonforfeitable at all times and
shall share in the Fund Earnings in the same manner as described in Section 6.2.
No part of such account shall be used to purchase life insurance. Subject to
Section 10, JOINT AND SURVIVOR ANNUITY REQUIREMENTS (if applicable), a
Participant may withdraw any part of the Participant's voluntary deductible
employee contribution account by making a written application to the Plan
Administrator.
5.8 GENERAL RULES APPLICABLE TO ALL CONTRIBUTIONS.
5.8(a) LIMITATIONS ON CONTRIBUTIONS. The contributions made under this
Section 5 and the allocation of those contributions under Section 6 shall
be subject to the limitations set forth in the Adoption Agreement, this
Section 5 andSection 7.
5.8(b) CODE Section 415. The contributions for any Plan Year shall not
(based on the Employer's understanding of the facts at the time the
contribution is made) exceed the total amount allocable for such year among
the Accounts of all Participants in light of the restrictions in Code
Section 415 as set forth in Section 7.2. If a suspense account as described
in Section 7.2(b) is in existence at any time during a particular
Limitation Year (1) no Employer Contribution shall be made for such
Limitation Year if (based on the Employer's understanding of the facts at
the time the contribution is made) the allocation of the amount in such
suspense account would be precluded by Code Section 415 for such Limitation
Year and (2) if this Plan is adopted as a Money Purchase Pension Plan or a
Target Benefit Pension Plan, the Employer Contribution required under this
Section 5 shall be reduced by the amount in such suspense account.
5.8(c) CODE Section 416. If this Plan is a Top-Heavy Plan (as defined in
Section 12) for any Plan Year, the minimum allocation required under Code
Section 416 shall be made in accordance with Section 12.
5.8(d) LEASED EMPLOYEES. Contributions of benefits which are provided by a
leasing organization on behalf of a Participant who is a Leased Employee
and which are attributable to service performed by such Participant for the
Employer or a Participating Affiliate shall be credited against the
contribution, if any, due to be allocated to such Participant under this
Plan in accordance with Code Section 414(n).
5.8(e) OWNER-EMPLOYEES.
5.8(e)(1) GENERAL. If this Plan provides contributions or benefits for
one or more Owner-Employees who control the Employer or a Participating
Affiliate, then
(i) if such Owner-Employee, or Owner-Employees, also control one
or more other trades or businesses,
(A) this Plan and the plans established for such other trades
or businesses shall, when viewed as a single plan, satisfy the
applicable requirements of Code Section 401(a) and Code
Section 401(d) for the employees of the Employer or the
Participating Affiliate and such other trades or businesses,
and
(B) the employees of such other trades or businesses shall
be included in a plan which satisfies the applicable
requirements of Code Section 401(a) and Code Section 401(d)
and which provides contributions and benefits which are at
least as favorable as those provided under this Plan for
such Owner-Employees, or
(ii) if such Owner-Employee is covered as an owner-employee
(within the meaning of Code Section 401(c)(3)) under the plans of
two or more other trades or businesses which such Owner-Employee
does not control, then the contributions or benefits provided
under this Plan must be at least as favorable as those provided
for such Owner-Employee under the most favorable plan of such
other trade or business.
5.8(e)(2) CONTROL. For purposes of this Section 5.8(e), an
Owner-Employee, or two or more such Owner-Employees, shall be
considered to control a trade or business if such Owner-Employee, or
such Owner-Employees together,
(i) own the entire interest in an unincorporated trade or
business, or
(ii) in the case of a partnership, own more than 50% of either the
capital interest or the profits interest in such partnership. Such
Owner-Employee, or such Owner-Employees, shall be treated as
owning any interest in a partnership which is owned, directly or
indirectly, by a partnership which is controlled by such
Owner-Employee, or such Owner-Employees, within the meaning of
clause (ii).
SECTION 6. ALLOCATIONS TO ACCOUNTS
6.1 ESTABLISHMENT AND MAINTENANCE OF ACCOUNTS. An Account shall be established
and maintained for each Participant under the Plan and the Plan Administrator
shall establish reasonable and nondiscretionary procedures under which (a) any
Forfeitures, insurance premium payments, loans, withdrawals, distributions and
other charges properly allocable to such Account shall be debited from such
Account and (b) any insurance contract dividends, insurance contract surrender
proceeds, loan repayments and other amounts properly allocable to such Account
(other than amounts described in Section 6.2 and Section 6.3) shall be credited
to such Account.
6.2 ALLOCATION OF FUND EARNINGS.
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6.2(a) GENERAL. As of each Valuation Date the fair market value of the Fund
and the Fund Earnings for the period which ends on such Valuation Date
shall be determined. Such Fund Earnings shall be allocated (and posted)
among all Accounts in the proportion that the balance in each such Account
(determined in accordance with Section 6.2(b)) bears to the total balance
in all such Accounts in order that each Account shall proportionately
benefit form any earnings or appreciation in the value of the Fund assets
in which such Account is invested or proportionately suffer any loses or
depreciation in the value of the Fund assets in which such Account is
invested. Subject to Section 13, each Participant shall have a ratable
interest in all assets of the Fund.
6.2(b) ALLOCATION PROCEDURES. The Plan Administrator shall establish
nondiscretionary allocation procedures for purposes of the allocation of
Fund Earnings under Section 6.2(a), which procedures shall be set forth in
writing with the records of this Plan. If so specified in such procedures,
the balance in each Account shall be determined after adjusting for all or
a portion of the contributions and other amounts credited to or debited
from such Account since the preceding Valuation Date. Further, if so
provided in such allocation procedures, Fund Earnings shall not be
allocated to any Forfeiture or to the balance in any suspense account
described in Section 7.2(b).
6.3 ALLOCATION OF CONTRIBUTIONS AND FORFEITURES. Subject to the limitations in
Section 7, the Forfeitures (and any amount deemed to be a Forfeiture under the
terms of this Plan) and the contributions shall be allocated (and posted) in
accordance with the following rules:
6.3(a) PROFIT SHARING PLAN.
6.3(a)(1) NONINTEGRATED. If this Plan is adopted as a Profit Sharing
Plan and the nonintegrated allocation formula is specified in the
Adoption Agreement, the Forfeitures and the Employer Contribution for
each Plan Year shall be allocated (and posted) as of the last day of
such Plan Year to the Employer Account of each Active Participant in
the same ratio that each Active Participant's Compensation for such
Plan Year bears to the total compensation of all Active Participants
for such Plan Year.
6.3(a)(2) INTEGRATED. If this Plan is adopted as a Profit Sharing Plan
and the integrated allocation formula is specified in the Adoption
Agreement, the Forfeitures and the Employer Contribution shall be
allocated (and posted) as of the last day of each Plan Year to the
Employer Account of each Active Participant in accordance with the
following:
(i) STEP ONE - First, the lesser of (A) the sum of the Employer
Contribution and Forfeitures for such Plan Year or (B) the
Integration Amount for such Plan Year shall be allocated to the
Employer Account of each Active Participant in the same ratio that
the sum of the total Compensation and Excess Compensation of each
Active Participant for such Plan Year bears to the sum of the
total Compensation and Excess Compensation of all Active
Participants for such Plan Year. (ii) STEP TWO - Second, the
remaining Employer Contribution and the Forfeitures, if any, for
such Plan Year shall be allocated to the Employer Account of each
Active Participant (whether or not he or she had Excess
Compensation) in the same ratio that each Active Participant's
total Compensation for such Plan Year bears to the total
Compensation of all Active Participants for such Plan Year.
(iii) SPECIAL DEFINITIONS - For purpose of this Section 6.3(a)(2),
(A) "Integration Amount" means the product of (1) the total
Compensation and the total Excess Compensation of all Active
Participants and (2) the Integration Percentage specified in
the Adoption Agreement, but in no event shall the Integration
Percentage exceed the Maximum Disparity Rate for any Plan Year
beginning after December 31, 1988.
(B) "Excess Compensation" means the amount, if any, of a
Participant's Compensation for such Plan Year which exceeds
the Integration Level for such Plan Year.
(iv) TOP-HEAVY. If this Plan is a Top-Heavy Plan for any Plan
Year, the allocation formula in Section 12.3(h)(1) shall apply in
lieu of the formula in this Section 6.3(a)(2) for such Plan Year.
6.3(b) MONEY PURCHASE PENSION PLAN. If this Plan is adopted as a Money
Purchase Pension Plan, the Forfeitures and the Employer Contribution
actually made under Section 5.2 (as adjusted, if applicable, in accordance
with Section 12.3(h)(2) for a Top-Heavy Plan) shall be allocated (and
posted) as of the last day of each Plan Year to the Employer Account of
each Active Participant in accordance with the formula specified in the
Adoption Agreement, If Forfeitures are applied to reduce the Employer
Contribution and the Forfeitures available under Section 8.2(e) for any
Plan Year exceed the contribution specified in the Adoption Agreement for
such Plan Year, such excess shall be held in a separate account and shall
be applied in full as a Forfeiture to offset such contributions in the
future until such account is exhausted under this Section 6.3(b). If
Forfeitures are to be allocated to Active Participants, such Forfeitures
shall be allocated (and posted) to the Employer Account of each Active
Participant in the same ratio that such Active Participant's Compensation
for such Plan Year bears to the total Compensation of all such Active
Participants for such Plan Year.
6.3(c) 401(K) PLAN. If this Plan is adopted as a 401(k) Plan, Forfeitures
and contributions made under Section 5.3 shall be allocated (and posted) in
accordance with the following:
6.3(c)(1) ELECTIVE DEFERRALS AND EMPLOYEE CONTRIBUTIONS. Elective
Deferrals made on a Participant's behalf for the period ending on each
Valuation Date shall be credited to the Participant's Elective Deferral
Account as of such Valuation Date
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and the Employee Contributions made by a Participant for such period
shall be credited to the Participant's Employee Account as of such
Valuation Date.
6.3(c)(2) MATCHING CONTRIBUTIONS AND QUALIFIED MATCHING CONTRIBUTIONS.
(i) ALLOCATION. Matching Contributions and Qualified Matching
Contributions made on a Participant's behalf shall be credited to
the Participant's Matching Account and Qualified Matching Account,
respectively,
(A) STANDARD OPTION - as of the last day of each Plan Year or
(B) ALTERNATIVE - only as of each Allocation Date specified in
the Adoption Agreement.
(ii) FORFEITURES. Forfeitures attributable to Matching Accounts
shall be allocated or applied in accordance with the following
rules; provided, no Forfeitures attributable to Excess Aggregate
Contributions under Section 7.5(d) shall be allocated to the
Account of any Highly Compensated Employee:
(A) FORFEITURES TO REDUCE MATCHING CONTRIBUTION (STANDARD
OPTION). Forfeitures attributable to Matching Accounts shall
be applied to reduce the Matching Contributions for the
applicable Allocation Date (as specified in Section 8.2 and
the Adoption Agreement). If the Forfeitures exceed the
Matching Contribution specified in the Adoption Agreement
for any Allocation Date, such excess shall be held in a
separate account and shall be applied in full as a
Forfeiture to offset Matching Contributions as of the next
Allocation Date (and succeeding Valuation Dates) until such
account is exhausted under this Section 6.3(c)(2).
(B) FORFEITURES TO BE ALLOCATED (ALTERNATIVE). If so specified
in the Adoption Agreement, Forfeitures attributable to
Matching Accounts shall be allocated (and posted)
(I) as of the last day of such Plan Year to the Matching Account
of each Active participant in the same ratio that such Active
Participant's Compensation for such Plan Year bears tot the total
Compensation of all such Active Participates for such Plan Year,
or
(II) in accordance with the formula specified in the Adoption
Agreement for a nonstandardized Plan.
6.3(c)(3) QUALIFIED NONELECTIVE CONTRIBUTIONS. Qualified Nonelective
Contributions made on behalf of a participant shall be credited to the
Participant's Qualified Nonelective Account
(i) STANDARD OPTION - as of the last day of each Plan Year or
(ii) ALTERNATIVE - only as of each Allocation Date specified in
the Adoption Agreement.
6.3(c)(4) DISCRETIONARY EMPLOYER CONTRIBUTION.
(i) ALLOCATION. As of the last day of each Plan Year, the Employer
Contribution, if any, for such Plan Year shall be allocated (and
posted) to the Employer Account of each Active Participant.
(A) STANDARD OPTION - in the nonintegrated method described in
Section 6.3(a)(1).
(B) ALTERNATIVE - if so specified in the Adoption Agreement,
in the integrated method described in Section 6.3(a)(2).
(ii) FORFEITURES. Forfeitures attributable to Employer Accounts
shall be allocated or applied in accordance with the following:
(A) STANDARD OPTION. Forfeitures attributable to Employer
Accounts shall be allocated (and posted) as of the last day of
each Plan Year to the Employer Account of each Active
Participant in the same manner as the Employer Contribution
under Section 6.3(c)(4)(i).
(B) ALTERNATIVE. If so specified in the Adoption Agreement,
Forfeitures attributable to Employer Accounts shall be
(I) applied to reduce Matching Contributions, Qualified
Matching Contributions and Qualified Nonelective
Contributions for the applicable Allocation Date (as
specified in Section 8.2 and the Adoption Agreement) and
succeeding Allocation Dates, if necessary, or
(II) allocated (and posted) in accordance with the formula
specified in the Adoption Agreement for a nonstandardized
Plan.
6.3(d) TARGET BENEFIT PENSION PLAN. If this Plan is adopted as a Target
Benefit Pension Plan, the Forfeitures and the Employer Contribution
actually made under Section 5.4 for each Plan Year shall be allocated (and
posted) as of the last day of each Plan Year to the Employer Account of
each Active Participant as specified in the Adoption Agreement. The
Forfeitures for each Plan Year shall be applied to reduce the Employer
Contribution for such Plan Year. If Forfeitures for any Plan Year exceed
the Employer Contributions determined under Section 5.4 for such Plan Year,
such excess shall be held in a separate account and shall be applied in
full to offset Employer Contributions in the future until such account is
exhausted under this Section 6.3(d).
6.3(e) TOP HEAVY MINIMUM ALLOCATION. If this Plan is a Top-Heavy Plan (as
defined in Section 12), the minimum allocation required to be made under
this Plan under
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Section 12.3, if any, shall be allocated (and posted) as of the last day of
the Plan Year (1) to the Employer Account of each Participant who is not an
Active Participant but for whom a minimum allocation is required under
Section 12.3 and (2) to each Active Participant for whom a minimum
allocation is required to be made in this Plan under Section 12.3 to the
extend such minimum allocation is not otherwise satisfied by the allocation
under this Section 6.3. If this Plan is adopted as a Profit Sharing Plan,
the minimum allocation may be made by reallocating the Employer
Contribution and Forfeitures allocated under Section 6.3(a) in a manner
which satisfies this Section 6.3(e) or by contributing an additional amount
which will be allocated in accordance with this Section 6.3(e). If this
Plan is adopted as a Money Purchase Pension Plan, a Target Benefit Pension
Plan or a 401(k) Plan, an additional Employer Contribution shall be made to
satisfy this Section 6.3(e).
6.3(f) ROLLOVER CONTRIBUTIONS. Rollover Contributions made by a Participant
during the period ending on each Valuation Date shall be credited to the
Participant's Rollover Contribution Account as of such Valuation Date.
6.4 ALLOCATION REPORT. The Plan Administrator shall maintain records of the
allocations and adjustments made to Accounts under this Section 6 and shall at
least annually prepare and forward to each such Participant and Beneficiary a
statement which shows the new balance in such person's Account.
6.5 ALLOCATION CORRECTIONS. If an error or omission is discovered in any
Account, then as of the first Valuation Date in the Plan Year in which the error
or omission is discovered, the Plan Administrator shall make (and post) and
adjustment to such Account as the Plan Administrator deems necessary to remedy
in an equitable manner such error or omission.
SECTION 7. STATUTORY LIMITATIONS ON ALLOCATIONS
7.1 EFFECTIVE DATE. Except as otherwise expressly provided, this Section 7 shall
be effective retroactive to Plan Years beginning on or after January 1, 1987.
7.2 LIMITATIONS ON ANNUAL ADDITIONS UNDER CODE Section 415
7.2(a) SPECIAL DEFINITIONS. For purposes of this Section 7.2, the terms
defined in this Section 7.2(a) shall have the meanings shown opposite such
terms.
7.2(a)(1) ANNUAL ADDITIONS - means for each Participant for any
Limitation Year
(i) the sum of the employer contributions, forfeitures, and
nondeductible employee contributions creditable (without regard to
the application of this Section 7.2) to the Participant's account
under this Plan or under any other defined contribution plan
(including a Master or Prototype Plan and any defined benefit plan
which provides for employee contributions) maintained by the
Employer for such Limitation Year; and for this purpose, any
Excess Amount allocated under Section 7.2(b), any Excess Elective
Deferrals under Section 7.3 (unless such excess is distributed by
the deadline set forth in Section 7.3(d)), any Excess
Contributions under Section 7.4 and any Excess Aggregate
Contributions under Section 7.5 shall be considered Annual
Additions for such Limitation Year;
(ii) amounts allocated on behalf of such Participant after March
31, 1984 to an individual medical account (as defined in Code
Section 415(1)(2)) which is part of a pension or annuity plan
maintained by the Employer; and
(iii) amounts derived form contributions paid or accrued after
December 31, 1985 in taxable years ending after such date which
are attributable to post-retirement medical benefits allocated to
the separate account of a key employee (as defined in Code
Section 419A(d)(3)) under a welfare benefit fund (as described in
Code Section 419(e)) maintained by the Employer; and
(iv) allocations under a simplified employee pension (as defined
in Code Section 408(k).
7.2(a)(2) COMPENSATION - means for a Self-Employed Individual, such
individual's Earned Income, and for each other Employee.
(i) STANDARD OPTION - compensation reportable on Form W-2 as
defined in Section 2.10(a)(1), or
(ii) ALTERNATIVE - if so specified in the Adoption Agreement,
(A) compensation subject to withholding as defined in
Section 2.10(a)(2)(i), or
(B) The Employee's wages, salaries, fees for professional
services and other mounts received (without regard to whether
or not an mount is paid in cash) for personal services
actually rendered in the course of employment with the
Employer maintaining the Plan to the extent that the amounts
are includable in gross income during the Limitation Year
(including, but not limited to, commissions paid salesmen,
commission for services on the basis of a percentage of
profits, commissions on insurance premiums, tips, bonuses,
fringe benefits and reimbursements or other expense allowance
under a nonaccountable plan as described in Section
1.62-2(c) of the Federal Income Tax Regulations).
Compensation shall not include the following:
(I) Employer contributions to a plan of deferred compensation
which are not includable in the Participant's gross income for
the taxable year in which contributed, or Employer
contributions under any simplified employee pension plan, or
any distributions form a plan of deferred compensation;
(II) amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by
the
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Participant either becomes freely transferable or is no
longer subject to a substantial risk of forfeiture;
(III) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option;
and
(IV) other amounts which receive special tax benefits, or
contributions made by the Employer (whether or not under a
salary reduction agreement) towards the purchase of an annuity
contract described in Code Section 403(b) (whether or not the
contributions are actually excludable from the gross income of
the Participant).
For purposes of applying the limitations of this Section 7.2, and
Employee's Compensation for Limitation Years beginning on and after the
Final Compliance Date shall not include any Compensation which is
accrued for such Limitation Year.
However, for purposes of applying the limitations of this Section 7.2
to a Participant in a defined contribution plan who is permanently and
totally disabled (as defined in Code Section 22(e)(3)), the term
"Compensation" shall mean the compensation such Participant would have
received for the Limitation Year if the Participant had been paid at
the Participant's rate of Compensation (as defined in this Section
7.2(a)(2)) paid immediately before becoming permanently and totally
disabled, and, further, such imputed compensation for the disabled
Participant may be taken into account only if the Participant is not a
Highly Compensated Employee and contributions made on behalf of such
Participant are nonforfeitable when made.
7.2(a)(3) DEFINED BENEFIT FRACTION - means a fraction, (i) the
numerator of which shall be the sum of the Participant's Projected
Annual Benefits under all defined benefit plans (whether or not
terminated) maintained by the Employer, and (ii) the denominator of
which shall be the lesser of (A) 125% of the dollar limitation
determined for the Limitation Year under Code Section 415(b) and
Section 415(d) or (B) 140% of the participant's Highest Average
Compensation, including any adjustments under Code Section 415(b).
However, 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 and which individually and in the aggregate
satisfied the requirements of Code Section 415 for all Limitation Years
beginning before January 1, 1987, the denominator of such fraction
shall be not less than 125% of the sum of the annual benefits under
such plans which the Participant had accrued as of the end of the last
Limitation Year beginning before January 1, 1987 disregarding any
changes in the terms and conditions in the plan after May 5, 1986.
Notwithstanding the foregoing, "100%" shall be substituted for "125%"
in any Limitation Year for which this Plan is a Top-Heavy Plan (as
defined in Section 12) unless otherwise specified in the Adoption
Agreement.
7.2(a)(4) DEFINED CONTRIBUTION DOLLAR LIMITATION - means for each
Limitation Year the greater of (i) $30,000 or (ii) one-forth of the
defined benefit dollar limitation under Code Section 415(b)(1) as in
effect for such Limitation Year.
7.2(a)(5) DEFINED CONTRIBUTION FRACTION - means a fraction, (i) the
numerator of which shall (subject to the adjustment rules set forth
below) be the sum of the Annual Additions credited to the Participant's
accounts under all 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
described in Code Section 419(e)) and all individual medical accounts
(as described in Code Section 415(I)(2)) maintained by the Employer
and (ii) the denominator of which shall be the sum of the Maximum
Aggregate Amounts for the current and all prior Limitation Years of
service with the Employer (without regard to whether a defined
contribution plan was maintained by the Employer). The numerator of
such fraction shall be adjusted if the Participant was a participant
as of the first day of the first Limitation Year beginning after
December 31, 1986 and the sum of this fraction and the Defined Benefit
Fraction would otherwise exceed 1.0 under the terms of this Plan. The
adjustment shall be made by taking an amount equal to the product of
(A) the excess of the sum of the fractions over 1.0, times (B) the
denominator of this fraction, and by permanently subtracting such
product from the numerator of this fraction. The adjustment shall be
calculated using the fractions as they would be computed as of the end
of the last Limitation Year beginning before January 1, 1987 and
disregarding any changes in the terms and conditions of the Plan made
after May 5, 1986 but using the Code Section 415 limitation applicable
to the first Limitation Year beginning on or after January 1, 1987.
The Annual Addition for any Limitation Year beginning before January
1, 1987 shall not be recomputed to treat all employee contributions as
an Annual Addition.
7.2(a)(6) EMPLOYER - means the Employer that adopts this Plan and all
members of a controlled group of corporations (as defined in Code
Section 414(b) as modified by Code Section 415(h)), all commonly
commonly controlled trades or businesses (as defined in Section 414(c)
as modified by Code Section 415(h)) or affiliated service groups (as
defined in Code Section 414(m)) of which the adopting Employer is a
part and any other entity required to be aggregated with the Employer
pursuant to the regulations under Code Section 414(o).
7.2(a)(7) EXCESS AMOUNT - means the excess of a Participant's Annual
Additions for the Limitation Year over the Maximum Permissible Amount.
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7.2(a)(8) HIGHEST AVERAGE COMPENSATION - means the Participant's
average Compensation for the three consecutive Plan Years of employment
with the Employer (without regard to whether such Plan Years were
before the Effective Date) that produces the highest average.
7.2(a)(9) LIMITATION YEAR - means
(i) STANDARD OPTION - the Plan Year or
(ii) ALTERNATIVE - the alternative 12 consecutive month period
specified in the Adoption Agreement.
All qualified plans maintained by the Employer must use the same
Limitation Year. If the Limitation Year is amended to a different 12
consecutive month period, the new Limitation Year must begin on a date
within the Limitation Year in which the amendment is made.
7.2(a)(10) MASTER OR PROTOTYPE PLAN - means a plan the form of which is
the subject of a favorable opinion letter from the Internal Revenue
Service.
7.2(a)(11) MAXIMUM AGGREGATE AMOUNT - means for any Limitation Year the
lesser of (i) 125% of the dollar limitation determined under Code
Section 415(c)(1)(A) or (ii) 35% of the Participant's Compensation for
such year. Notwithstanding the foregoing, "100%" shall be substituted
for 125% in any Limitation year for which this Plan is a Top-Heavy Plan
(as described in Section 12) unless otherwise specified in the Adoption
Agreement.
7.2(a)(12) MAXIMUM PERMISSIBLE AMOUNT - means the lesser of (i) the
Defined Contribution Dollar Limitation or (ii) 25% of a Participant's
Compensation for the Limitation Year, provided,
(A) the compensation limitation referred to in clause (ii) shall
not apply to any contribution for medical benefits (within the
meaning of Code Section 401(h) or Section 419A(f)(2)) which is
otherwise treated as an Annual Addition under Code Section
415(I)(I) or Section 419(A)(d)(2); and
(B) if a short Limitation Year is created because of an amendment
changing the Limitation Year to a different 12 consecutive month
period, the Maximum Permissible Amount shall not exceed the
Defined Contribution Dollar Limitation multiplied by a fraction,
the numerator of which shall be the number of months in the short
Limitation Year and the denominator of which shall be 12.
7.2(a)(13) PROJECTED ANNUAL BENEFIT - means the annual retirement
benefit (adjusted to an actuarially equivalent straight life annuity if
such benefit is expressed in form other than a straight life annuity or
qualified joint and survivor annuity) to which a Participant would be
entitled under the terms of a defined benefit plan assuming:
(i) the Participant will continue employment until normal
retirement age under the plan (or current age, if later), and
(ii) the Participant's Compensation for the current Limitation
Year and all other relevant factors used to determine benefits
under the plan will remain constant for all future Limitation
Years.
7.2(b) LIMITATION IF NO OTHER PLANS. If a Participant does not participate
in, and has never participated in, another qualified plan maintained by the
Employer or a welfare benefit fund (as described in Code 419(e)) or
individual medical account (as described in Code Section 415(I)(2))
maintained by the Employer which provides an Annual Addition as defined in
Section 7.2(a)(1) or a simplified employee pension (as defined in Code
Section 408(k)) maintained by the Employer, the amount of Annual Additions
which actually may be credited to the Account of any Participant for any
Limitation Year shall not exceed the lesser of the Maximum Permissible
Amount or any other limitation set forth in this Plan. If the Employer
Contribution that would otherwise be credited to the Participant's Account
would cause the Annual Additions for the Limitation Year to exceed the
Maximum Permissible Amount, such amount shall be reduced so that the Annual
Additions actually credited for the Limitation Year shall equal the Maximum
Permissible Amount. If pursuant to Section 7.2(f) or as a result of the
allocation of Forfeitures a Participant's Annual Additions under this Plan
would result in an Excess Amount, such Excess Amount shall be disposed of
as follows:
7.2(b)(1) PROFIT SHARING PLAN. If this Plan is adopted as a Profit
Sharing Plan,
(i) such Excess Amount shall be deemed a Forfeiture which shall
be allocated and reallocated as proved in Section 6.3(a) subject
to the restrictions of this Section 7.2 among the Employer
Accounts of the remaining Active Participants until such amount
had been allocated in its entirety; and
(ii) if the restriction in this Section 7.2 apply before such
amount has been reallocated in its entirety, as the final
allocation step such unallocable Excess Amount shall be
transferred to a suspense account.
7.2(b)(2) MONEY PURCHASE PENSION PLAN OR TARGET BENEFIT PENSION PLAN.
If this Plan is adopted as a Money Purchase Pension Plan or Target
Benefit Pension Plan,
(i) STANDARD OPTION - such Excess Amount shall be held unallocated
in a suspense account which shall be applied to offset future
Employer Contributions for Active Participants in the next
Limitation Year (and in each succeeding Limitation Year if
necessary).
(ii) ALTERNATIVE - if so specified in the Adoption Agreement,
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(A) for any Participant who is an Active Participant at the
end of the Limitation Year, such Excess Amount shall be held
unallocated in a suspense account which shall be applied to
offset the Employer Contribution for such Active Participant
in the next Limitation Year (and in each succeeding Limitation
Year if necessary); and
(B) for any Participant who is not an Active Participant at
the end of such Limitation Year, such Excess Amount shall be
held unallocated in a suspense account which shall be applied
to offset future Employer Contributions for all remaining
Active Participants in the next Limitation Year (and in each
succeeding Limitation Year if necessary).
7.2(b)(3) 401 (K) PLAN. If this Plan is adopted as a 401(k) Plan, any
Elective Deferrals and Employee Contributions made by the Participant
during the Limitation Year (and, to the extent required under
regulations, gains attributable to such Employee Contributions) shall
be refunded to the extent such refund would reduce the Excess Amount
and, if an Excess Amount still exists after such refund,
(i) any such Excess Amount which is attributable to discretionary
Employer Contributions shall be disposed of in the same manner as
an Excess Amount under a Profit Sharing Plan as described in
Section 7.2(b)(1), and
(ii) any such Excess Amount which is attributable to a Matching
Contribution, Qualified Nonelective Contribution or Qualified
Matching Contribution shall be held unallocated in a suspense
account which shall be used to offset future Matching
Contributions, Qualified Nonelective Contributions or Qualified
Matching Contributions in the next Limitation Year (and in each
succeeding Limitation Year if necessary).
7.2(b)(4) SUSPENSE ACCOUNT. A suspense account established pursuant to
this Section 7.2(b) shall not be subject to any allocation of Fund
Earnings under Section 6.2, and the balance of such account shall be
returned to the Employer in the event this Plan is terminated prior to
the date such account has been allocated in its entirety as a
Forfeiture. In no event shall Excess Amounts be distributed to
Participants or former Participants.
7.2(c) LIMITATION IF OTHER DEFINED CONTRIBUTION MASTER OR PROTOTYPE PLAN.
This Section 7.2(c) applies if, in addition to this Plan, a Participant is
covered under another defined contribution Master or Prototype Plan
maintained by the Employer or a welfare benefit fund (as described in Code
Section 419(e)) or an individual medical account (as described in Code
Section 415(I)(2)) maintained by the Employer which provides for an Annual
Addition as defined in Section 7.2(a)(1) or a simplified employee pension
(as defined in Code Section 408(k)) maintained by the Employer during any
Limitation Year. The Annual Additions which may be credited to a
Participant's Account under this Plan for any such Limitation Year shall
not exceed the Maximum Permissible Amount reduced by the Annual Additions
credited to a Participant's account under such other defined contribution
Master or Prototype Plan and welfare benefit fund for the same Limitation
Year.
7.2(c)(1) If for any Limitation Year (1) the Employer also maintains
another defined contribution Paired Plan, (2) the Employer does not
maintain any other defined contribution Master or Prototype Plan (other
than such Paired Plan) and (3) a Participant's Annual Additions under
such Paired Plans would result in an Excess Amount for such Limitation
Year, the allocation adjustment required to satisfy the limitations of
Code Section 415 shall be made under such Plans in the following order:
(i) STANDARD OPTION - first, under the Profit Sharing Plan, if
any; second under the Money Purchase Pension Plan, if any; third
under the Target Benefit Pension Plan, if any; and finally, under
the 401(K) Plan, if any; or
(ii) ALTERNATIVE - in the alternative order specified in the
Adoption Agreement.
7.2(c)(2) If the Annual Additions with respect to any Participant under
such other defined contribution Master or Prototype Plan (other than a
defined contribution Paired Plan) and welfare benefit funds maintained
by the Employer are less than the Maximum Permissible Amount and the
Employer Contribution that would otherwise be contributed or allocated
to the Participant's Account under this Plan would cause the Annual
Additions for the Limitation Year to exceed this limitation, the amount
contributed or allocated shall be reduced so that the Annual Additions
under all such plans and funds for the Limitation Year shall equal the
Maximum Permissible Amount.
7.2(c)(3) If the Annual Additions with respect to the Participant under
such other defined contribution Master and Prototype Plan (other than a
defined contribution Paired Plan) and welfare benefit funds in the
aggregate are equal to or greater than the Maximum Permissible Amount,
no amount shall be credited to the Participant's Account under this
Plan for the Limitation Year.
7.2(c)(4) If pursuant to Section 7.2(f) or as a result of the
allocation of Forfeitures a Participant's Annual Additions under this
Plan and such other defined contribution Master or Prototype Plan
(other than a Paired Plan) and welfare benefit funds would result in
an Excess Amount for any Limitation Year,
(i) the Excess Amount shall be deemed to consist of the Annual
Additions last allocated and the Annual Additions attributable to
a welfare benefit fund or an individual medical account shall be
deemed to have been allocated prior to all other Annual Additions,
and
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(ii) if an Excess Amount was allocated to a Participant on an
allocation date of this Plan which coincides with an allocation
date of such other Master or Prototype Plan, then the Excess
Amount attributed to this Plan shall be the product of
(A) the total Excess Amount allocated as of such date, times
(B) a fraction, the numerator of which shall be the Annual
Additions allocated to the Participant for the Limitation Year
as of such date under this Plan and the denominator of which
is the total Annual Additions allocated tot he Participant for
the Limitation Year as of such date under this and all such
other defined contribution Master or Prototype Plans.
7.2(c)(5) Any Excess Amount attributed to this Plan will be disposed of
in the manner described in Section 7.2(b).
7.2(d) LIMITATION IF OTHER DEFINED CONTRIBUTION PLAN. If any Participant is
covered under another qualified defined contribution plan maintained by the
Employer which is not a Master or Prototype Plan, the Annual Additions
which may be credited to the Participant's Account under this Plan for any
Limitation Year shall be limited
7.2(d)(1) STANDARD OPTION - as specified in Section 7.2(c) as though
the other plan was a Master or Prototype Plan or
7.2(d)(2) ALTERNATIVE - under the alternative method specified in the
Adoption Agreement for limiting the Annual Additions under this Plan.
7.2(e) LIMITATION IF OTHER DEFINED BENEFIT PLAN. If the Employer maintains,
or at any time maintained, a qualified defined benefit plan (other than a
defined benefit Paired Plan) covering any Participant in this Plan, the sum
of the Participant's Defined Benefit Fraction and Defined Contribution
Fraction shall not exceed 1.0 in any Limitation Year. The Annual Additions
which may be credited to any Participant's Account under this Plan for any
Limitation Year shall be limited as specified in the Adoption Agreement. If
the Employer maintains a defined benefit Paired Plan, any adjustments to
satisfy the requirements of Code Section 415(e) shall be made only under
such defined benefit Paired Plan.
7.2(f) COMPENSATION FOR DETERMINATION OF MAXIMUM PERMISSIBLE AMOUNT. Prior
to determining a Participant's actual Compensation for the Limitation Year,
the Employer may determine the Maximum Permissible Amount for a Participant
on the basis of a reasonable estimation of the Participant's compensation
for the Limitation Year, and, if applicable, a reasonable estimation of the
amount of elective deferrals (within the meaning of Code Section 402(g)(3))
that the Participant may make for the Limitation Year, uniformly determined
for all similarly situated Participants. As soon as administratively
feasible after the end of the Limitation Year, the Maximum Permissible
Amount for the Limitation Year shall be determined on the basis of the
Participant's actual Compensation for the Limitation Year.
7.3 INDIVIDUAL LIMITATION ON ELECTIVE DEFERRALS UNDER CODE Section 402(g).
7.3(a) GENERAL. A Participant's Elective Deferrals under this Plan and all
other qualified plans, contracts and arrangements maintained by the
Employer or an Affiliate during any taxable year of the Participant shall
not exceed the dollar limitation under Code Section 402(g) in effect at the
beginning of such taxable year.
7.3(b) ELECTIVE DEFERRALS. For purposes of the dollar limitation under Code
Section 402(g) and this Section 7.3, the term "Elective Deferrals" shall
include all employer contributions made on behalf of a Participant pursuant
to an election to defer under any qualified cash or deferred arrangement as
described in Code Section 401(k), any simplified employee pension cash or
deferred arrangement as described in Code Section 402(h)(1)(B), any plan
described under Code Section 501(c)(18), and any salary reduction agreement
for the purchase of an annuity contract under Code Section 403(b). However,
the term shall not include Elective Deferrals which are properly
distributed to the Participant form this Plan under Section 7.2 or such
other plans or arrangements to correct for excess annual additions.
7.3(c) EXCESS ELECTIVE DEFERRALS. For purposes of this Section 7.3, the
term "Excess Elective Deferrals" means for each Participant the Elective
Deferrals that are includable in gross income under Code Section 402(g) to
the extent the Participant's Elective Deferrals for a taxable year exceed
the dollar limitations under Code Section 402(g) for such taxable year.
7.3(d) DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS. Notwithstanding any other
provision of this Plan restricting the timing of distributions, Excess
Elective Deferrals, plus any income and minus any loss allocable thereto,
shall be distributed no later than April 15 of any calendar year to
Participants (1) whose Excess Elective Deferrals for the preceding taxable
year were assigned to this Plan and (2) who claim (or are deemed to have
claims) such allocable Excess Elective Deferrals for such taxable year in
accordance with the claims procedure set forth in Section 7.3(f).
7.3(e) DETERMINATION OF INCOME OR LOSS. A corrective distribution of Excess
Elective Deferrals under this Section 7.3 shall include the income or loss
allocable to such Excess Elective Deferrals for the Participant's taxable
year in which such excess occurred and, if so specified in the Adoption
Agreement, for the period between the end of such taxable year and the date
of distribution ("gap period"). The income or loss for such taxable year
and gap period, if applicable, shall be determined in accordance with the
regulations under Code Section 402(g). In lieu of using the safe harbor
method or the alternative method in the regulations for allocation such
income or loss, the Plan Administrator may use any reasonable method for
computing such income or loss, provided that such method does not violate
Code Section 401(a)(4), is used consistently for all Participants and for
all corrective distributions under the Plan for the Plan Year, and is
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used by the Plan for allocating income or loss to Participant's Accounts.
7.3(f) CLAIMS PROCEDURE.
7.3(f)(1) GENERAL. A Participant may assign to this Plan any Excess
Elective Deferral made during a taxable year by filing a claim with the
Plan Administrator on or before
(i) STANDARD OPTION - March 1 or
(ii) ALTERNATIVE - the alternative date for filing such claims
specified in the Adoption Agreement.
Unless otherwise provided in administrative procedures established by
the Plan Administrator, such claim shall be in writing, shall specify
the dollar amount of the Participant's Excess Elective Deferrals
assigned to this Plan for such taxable year, and shall be accompanied
by the Participant's written statement that such amounts, if not
distributed to such Participant, will exceed the limit imposed on the
Participant by Code Section 402(g) for the taxable year in which the
deferral occurred.
7.3(f)(2) DEEMED CLAIM. A Participant automatically shall be deemed to
have filed a claim under this Section 7.3(f) to the extent that such
Excess Elective Deferrals occurred solely as a result of Elective
Deferrals under this Plan and other plans of the Employer and the
Affiliates, unless the Employer specifies in the Adoption Agreement
that such Excess Elective Deferrals shall be distributed from one or
more of such other plans.
7.4 LIMITATIONS ON ELECTIVE DEFERRALS FOR HIGHLY COMPENSATED EMPLOYEES UNDER
CODE Section 401(k).
7.4(a) SPECIAL DEFINITIONS. For purposes of this Section 7.4, the term
defined in this Section 7.4(a) shall have the meanings shown opposite such
terms.
7.4(a)(1) ACTUAL DEFERRAL PERCENTAGE - means for each Plan Year for
each Participant who is an Eligible Employee at any time during such
Plan Year the ratio (expressed as a percentage and determined in
accordance with Section 7.4(c)) of Employer Contribution made on
behalf of such Participant for such Plan Year to such Participant's
Compensation for such Plan Year. The Actual Deferral Percentage of a
Participant who is an Eligible Employee, but does not make an Elective
Deferral and does not receive an allocation if Qualified Nonelective
Contribution or a Qualified Matching Contribution, shall be zero.
7.4(a)(2) ADP (OR AVERAGE ACTUAL DEFERRAL PERCENTAGE) - means for each
Plan Year separately for the group of Participants who are Highly
Compensated Employees during such Plan Year and for the group of
Participants who are Nonhighly Compensated Employees during such Plan
Year, the average (expressed as a percentage) of the Actual Deferral
Percentages of the Participants in each such group who are Eligible
Employees at any time during such Plan Year.
7.4(a)(3) EMPLOYER CONTRIBUTIONS - means for purposes of determining a
Participant's Actual Deferral Percentage for each Plan Year, the sum
of (i) the Elective Deferrals made pursuant to the Participant's
deferral election, including Excess Elective Deferrals (as defined in
Section 7.3(c)) of Highly Compensated Employees, but excluding Excess
Elective Deferrals of Nonhighly Compensated Employees that arise
solely from Elective Deferrals made under this Plan or any other plans
of the Employer and the Affiliates, and excluding Elective Deferrals
that are taken into account in the ACP test described in Section
7.5(b) (provided the ADP test is satisfied both with and without
exclusion of such Elective Deferrals), and (ii) at the election of the
Employer, Qualified Nonelective Contributions and Qualified Matching
Contributions.
7.4(a)(4) EXCESS CONTRIBUTIONS - means for each Plan Year for each
Highly Compensated Employee the excess of the aggregate amount of
Employer Contributions actually taken into account in computing the
Average Deferral Percentage of such Highly Compensated Employee for
such Plan Year over the maximum amount of such contributions permitted
for such Plan Year under the ADP limit as set forth in Section 7.4(b)
(determined by reducing Elective Deferrals, Qualified Nonelective
Contributions and Qualified Matching Contributions made on behalf of
Highly Compensated Employees in order of their Actual Deferral
Percentages, beginning with the highest of such percentages).
7.4(a)(5) HIGHLY COMPENSATED EMPLOYEES - means any Employee who is
either a "highly compensate active employee" or a "highly compensated
former employee" as described below.
(i) A "highly compensated active employee" means any Employee who
performs services for the Employer or any Affiliate during the
"determination year" and who during the "look-back year": (A)
received compensation form the Employer or any Affiliate in excess
of $75,000 (as adjusted pursuant to Code Section 415(d)); (B)
received compensation from the Employer or any Affiliate in excess
of $50,000 (as adjusted pursuant to Code Section 415(d)) and was a
member of the "top-paid group" for such year; or (C) was an
officer of the Employer or any Affiliate and received compensation
during such year that is greater than 50% of the dollar limitation
in effect under Code Section 415(b)(1)(A). The term "highly
compensated employee" shall also include" (I) an Employee who is
both described in the preceding sentence if the term
"determination year" is substituted for the term "look-back year"
and is one of the 100 Employees who received the most compensation
form the Employer or any Affiliate during the determination year;
and (II) an Employee who is a 5% owner at any time during the
look-back year or determination year. If no officer has
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<PAGE>
satisfied the compensation requirement of clause (C) above during
either a determination year or look-back year, the highest paid
officer for each such year shall be treated as a Highly
Compensated Employee.
(ii) A "highly compensated former employee" means any Employee who
separated (or was deemed to have separated) from service prior to
the determination year, performs no services for the Employer or
any Affiliate during the determination year, and was a highly
compensated employee for either the separation year or any
determination year ending on or after the Employee's 55TH
birthday.
(iii) For purposes of this definition, the "determination year"
shall mean the Plan Year and the "look-back year" shall mean the
12-month period immediately preceding he determination year.
(iv) if an Employee is, during a determination year or look-back
year, a Family Member of either a 5% owner who is an active or
former Employee or a Highly Compensated Employee who is one of the
10 most Highly Compensated Employees ranked on the basis of
compensation paid by the Employer during such year ("top-ten
Highly Compensated Employee"), then the Family Member and the 5%
owner or top-ten Highly Compensated Employee shall be treated as a
single Employee receiving compensation and Plan contributions or
benefits equal to the sum of such compensation and contributions
or benefits equal to the sum of such compensation and
contributions or benefits of the Family Member and the 5% owner or
top-ten Highly Compensated Employee.
(v) The determination of who is a Highly Compensated Employee,
including the determination of the number and identity of
Employees in the top-paid group, the top 100 Employees, the number
of Employees treated as officers and the compensation that is
considered, shall be made in accordance with Code Section 414(q)
including any available operational transition rules and any
elections provided in the regulations under Code Section 414(q)
and specified in the Adoption Agreement.
7.4(b) ADP LIMIT. The ADP for Highly Compensated Employees for any Plan
Year shall not exceed
7.4(b)(1) the ADP for Nonhighly Compensated Employees for such Plan
Year multiplied by 1.25, or
(7.4)(b)(2) the ADP for Nonhighly Compensated Employees for such Plan
Year multiplied by 2, provided that the ADP for Nonhighly Compensated
Employees by more than 2 percentage points.
7.4(c) SPECIAL RULES.
7.4(c)(1) OTHER PLANS. The Actual Deferral Percentage for any
Participant who is a Highly Compensated Employee for the Plan Year and
who is eligible to participate in more than one cash or deferred
arrangement maintained by the Employer or an Affiliate shall be
determined by treating all such arrangements as a single arrangement.
If a Highly Compensated Employee participates in two or more cash or
deferred arrangements that have different plan years, all such
arrangements ending with or within the same calendar year shall be
treated as a single arrangement. Notwithstanding the foregoing, plans
which are mandatorily disaggregated under regulations under Code
Section 401(k) shall be treated as separate.
7.4(c)(2) AGGREGATION. In the event that this Plan satisfies the
requirements of Code Section 401(b) only if aggregated with one or more
other plans, or if one or more other plans satisfy the requirements of
such Code section only if aggregated with this Plan, then this Section
7.4 shall be applied by determining the Actual Deferral Percentages
and ADP as if all such plans were a single plan. For Plan Years
beginning on and after the Final Compliance Date, such plans may be
aggregated only if they have the same plan years and are not
mandatorily disaggregated under regulations under Code Section 401(k).
7.4(c)(3) FAMILY MEMBERS. For purposes of determining the Actual
Deferral Percentage of a Participant who is a 5% owner or one of the 10
most highly paid Highly Compensated Employees and who is an Eligible
Employee at any time during the Plan Year, the Employer Contributions
and Compensation of such Participant shall include the Employer
Contributions and Compensation of his or her Family Members, and such
Family Members shall be disregarded as separate Participants in
determining the ADP both for Nonhighly Compensated Employees and for
Highly Compensated Employees.
7.4(c)(4) TIMING. For purposes of determining the Actual Deferral
Percentages for any Plan Year, Elective Deferral, Qualified Nonelective
Contributions and Qualified Matching Contributions shall be considered
made for such Plan Year only if such contributions are allocated as of
a date within such Plan Year and are actually paid to the Fund by the
last day of the 12 moth period immediately following such Plan Year.
7.4(c)(5) RECORDS. The Plan Administrator shall maintain records which
are sufficient to demonstrate that the Plan complied with the ADP
limits, including the extent to which Qualified Nonelective
Contributions and Qualified Matching Contributions are taken into
account to satisfy such ADP limits.
7.4(c)(6) OTHER REQUIREMENT. The determination and treatment of the
Elective Deferrals and Actual Deferral Percentage of any Participant
shall satisfy such other requirements as may be prescribed by the
Secretary of the Treasury.
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7.4(d) DISTRIBUTION OF EXCESS CONTRIBUTIONS.
7.4(d)(1) GENERAL. Notwithstanding any other provision of this Plan
restricting the timing of distributions, Excess Contributions for any
Plan Year, plus any income and minus any loss allocable thereto, shall
be distributed no later than the last day of the immediately following
Plan Year to Participants on whose behalf such Excess Contribution were
made. If such Excess Contributions are distributed more than 2 1/2
months after the last day of the Plan Year in which such excess
occurred, a 10% excise tax shall be imposed under Code Section 4979 on
the Employer with respect to such excess. Such distributions shall be
made to such Participants on the basis of the respective portions of
the Excess Contributions attributable to each such Participant. Excess
Contributions shall be allocated to Participants who are subject to
the Family Member aggregation rules under Code Section 414(q)(6) in
the manner prescribed by the regulations under Code Section 401(k).
7.4(d)(2) DETERMINATION OF INCOME OR LOSS. A corrective distribution of
Excess Contributions under this Section 7.4 shall include the income or
loss allocable to such Excess Contributions for the Plan Year in which
such excess occurred and, if so specified in the Adoption Agreement,
for the period between the end of such Plan Year and the date of
distribution ("gap period"). The income or loss for such Plan Year and
gap period, if applicable, shall be determined in accordance with the
regulations under Code Section 401(k). In lieu of using the safe harbor
method or the alternative method in the regulations for allocating such
income or loss, the Plan Administrator may use any reasonable method
for computing such income or loss, provided that such method does no
violate Code Section 401(a)(4), is used consistently for all
Participants and for all corrective distributions under the Plan for
the Plan Year, and is used by the Plan for allocating income or loss
to Participant's Accounts.
7.4(d)(3) ORDER FOR DETERMINING EXCESS CONTRIBUTIONS. Excess
Contributions shall be determined after first determining Excess
Elective Deferrals under Section 7.3. The excess Contributions which
would otherwise be distributed to the Participant shall be reduced, in
accordance with regulations, by the Excess Elective Deferrals
distributed to the Participant under Code Section 7.3.
7.4(d)(4) ACCOUNTING FOR EXCESS CONTRIBUTIONS. Excess Contributions
shall be distributed proportionately from the Participant's Elective
Deferral Account and Qualified Matching Account in the same ratio that
such Participant's Elective Deferrals and Qualified Matching
Contributions for the Plan Year in which such Excess Contributions were
made bears to the sum of the Participant's Elective Deferrals and
Qualified Matching Contribution for such Plan Year. Excess
Contributions shall be distributed form the Participant's Qualified
Nonelective Account only to the extent that such Excess Contributions
exceed the balance in the Participant's Elective Deferral Account and
Qualified Matching Account. Notwithstanding the foregoing, Excess
Contributions may be distributed for the applicable subaccounts in
accordance with procedures established by the Plan Administrator
provided such procedures do not result in discrimination in favor of
Highly Compensated Employees which would be prohibited under Code
Section 401(a)(4).
7.4(e) RECHARACTERIZATION. If the Employer specifies in the Adoption
Agreement that Excess Contributions may be recharacterized, a Participant
may elect to treat Excess Contribution as amount distributed to the
Participant and then contributed as an Employee Contribution to the Plan.
Any such Excess Contribution which is so recharacterized as an Employee
Contribution shall remain nonforfeitable and shall thereafter be subject to
the same distribution restrictions applicable to Elective Deferrals under
Section 9.2(b). Excess Contributions shall not be recharacterized by a
Participant to the extent that such amounts, in combination with other
Employee Contributions, would exceed any limits on Employee Contributions
set forth in the Plan or in the Adoption Agreement.
Any such recharacterization must occur no later than 2 1/2 months after the
end of the Plan Year in which such Excess Contribution occurred and shall
be deemed to occur no earlier than the date on which the last Highly
Compensated Employee is informed in writing of the amount recharacterized
and the consequences of such recharacterization. Any excess Contributions
which are so recharacterized shall be taxable to the Participant for the
taxable year in which the Participant would have received such amount in
cash but for the deferral election.
7.5 LIMITATIONS ON EMPLOYEE CONTRIBUTIONS AND MATCHING CONTRIBUTIONS UNDER CODE
Section 401(m).
7.5(a) SPECIAL DEFINITIONS. For purposes of this Section 7.5, the terms
defined in this Section 7.5(a) shall have the meanings shown opposite such
terms.
7.5(a)(1) AGGREGATE LIMIT - means the sum of
(i) 125% of the greater (or lesser, if it would result in a larger
Aggregate Limit) of
(A) the ADP for Nonhighly Compensated Employees under the
plan subject to Code Section 401(k) for the plan year or (B)
the ACP for Nonhighly Compensated Employees under the plan
subject to Code Section 401(m) for the plan year beginning
with or within the plan year of the plan which is subject to
Code Section 401(k) and
(ii) the lesser of
(A) 200% of such ADP or ACP or
(B) two plus the lesser (or greater, if it would result in a
larger Aggregate Limit) of such ADP or ACP.
7.5(a)(2) ACP (OR AVERAGE CONTRIBUTION PERCENTAGE) - means for each
Plan Year separately for the group of
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Participants who are Highly Compensated Employees during such Plan
Year and for the group of Participants who are Nonhighly Compensated
Employees during such Plan Year, the average (expressed as a
percentage) of the Contribution percentages of the Participants in
each such group who are Eligible Employees at any time during such
Plan Year.
7.5(a)(3) CONTRIBUTION PERCENTAGE - means for each Plan Year for each
Participant who is an Eligible Employee at any time during such Plan
Year, the ratio (expressed as percentage and determined in accordance
with Section 7.5(c)) of such Participant's Contribution Percentage
Amount for such Plan Year to such Participant's Compensation for such
Plan Year. The Contribution Percentage of a Participant who is
eligible to, but does not, make Employee Contributions or Elective
Deferrals and who, as a result of such failure to make such
contributions, does not receive an allocation of a Matching
Contribution or Qualified Matching Contribution shall be zero.
7.5(a)(4) CONTRIBUTION PERCENTAGE AMOUNT - means for each Plan Year for
each Participant who is an Eligible Employee at any time during such
Plan Year the sum of
(i) the Employee Contributions, Matching Contributions and
Qualified Matching Contributions (to the extent not taken into
account for purposes of the ADP test describe in Section 7.4)
made on behalf of such Participant for such Plan Year, other than
Matching Contributions which are forfeited either to correct
Excess Aggregate Contribution or because the contribution to
which they relate are Excess Elective Deferrals, Excess
Contributions or Excess Aggregate Contributions,
(ii) the forfeitures allocated to such Participants Account for
such Plan Year which are attributable to Matching Contributions
and Excess Aggregate Contributions,
(iii) at the election of the Employer, the Qualified Nonelective
Contributions made on behalf of such Participant for such Plan
Year (to the extent not taken into account for purposes of the ADP
test described in Section 7.4 is met both including and excluding
the Elective Deferrals that are used to meet the ACP limit).
7.5(a)(5) EMPLOYEE CONTRIBUTION - means for purposes of determining a
Participant's Contribution Percentage Amount any contribution made by
the Participant which are included in gross income for the taxable year
in which made and which are maintained in a separate account to which
earnings and losses are allocated.
7.5(a)(6) EXCESS AGGREGATE CONTRIBUTION - means for each Plan Year for
each Highly Compensated Employee the excess of the aggregate
Contribution Percentage Amounts actually taken into account in
computing the ACP of such Highly Compensated Employee for such Plan
Year over the maximum Contribution Percentage Amounts permitted for
such Plan Year under the ACP limit as set forth in Section 7.5(b)
(determined by reducing contribution and Forfeitures on behalf of
Highly Compensated Employees in order of their Contribution
Percentages, beginning with the highest of such percentages).
7.5(a)(7) MATCHING CONTRIBUTION - means for purposes of determining a
Participant's Contribution Percentage Amount any Employer contribution
made to this Plan or any other defined contribution plan on account of
an Employee Contribution of Elective Deferral made by or on behalf of
the Participant under a plan maintained by the Employer.
7.5(b) ACP LIMIT. The ACP for Participants who are Highly Compensated
Employees for any Plan Year shall not exceed
7.5(b)(1) the ACP for Participants who are Nonhighly Compensated
Employees for such Plan Year multiplied by 1.25, or
7.5(b)(2) the ACP for Participants who are Nonhighly Compensated
Employees for such Plan Year multiplied by 2, provided that the ACP for
Participants who are Highly Compensated Employees does not exceed the
ACP for Participants who are Nonhighly Compensated Employees by more
than 2 percentage points.
7.5(c) SPECIAL RULES.
7.5(c)(1) MULTIPLE USE. For Plan Years beginning after the Final
Compliance Date, if
(i) one or more Highly Compensated Employees participates both in
a plan with a qualified cash or deferred arrangement which is
subject to the ADP limitations under Section 401(k) as described
in Code Section 7.4 and in a plan which is subject to the ACP
limitation under Code Section 401(m) as described in this Section
7.5,
(ii) the sum of the ADP of the eligible Highly Compensated
Employees in the plan subject to Code Section 401(k) and the ACP
of the eligible Highly Compensated Employees in the plan subject
to Code Section 401(m) exceeds the Aggregate Limit, and
(ii) both the ADP and the ACP of the eligible Highly Compensated
Employees in such plans exceed 125% of the ADP or ACP respectively
of the eligible Nonhighly Compensated Employees in such plans,
the Contribution Percentages of the Highly Compensated Employees who
participate in both such plans shall be reduced (beginning with the
highest of such percentages) so that the Aggregate Limit for such plans
is not exceeded. Any such reduction shall be treated as an Excess
Aggregate Contribution. The determination of the limitations
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under this special rule shall be made after any corrections required
to meet the ADP limits and the ACP limits and in accordance with the
regulations under Code Section 401(m).
7.5(c)(2) OTHER PLANS. The Contribution Percentage for any Participant
who is a Highly Compensated Employee for the Plan Year and who is
eligible to participate in more than one plan maintained by the
Employer or an Affiliate to which "employee contributions" (within the
meaning of Code Section 401(m)) or "matching contributions" (as
described in Code Section 401(m)(4)) are made shall be determined by
treating all such plans as one plan. If a Highly Compensated Employee
participates in two or more such plans that have different plan years,
all such plans ending with or within the same calendar year shall be
treated as a single plan. Notwithstanding the foregoing, plans which
are mandatorily disaggregated under regulation under Code Section
401(m) shall be treated as separate.
7.5(c)(3) AGGREGATION. In the event that this Plan satisfies the
requirements of Code Section 410(b) only if aggregated with one or more
other plans, or if one or more other plans satisfy the requirements of
such Code sections only if aggregated with this Plan, then this
Section 7.5 shall be applied by determining the Contribution
Percentages and ACP as if all such plans were a single plan. For Plan
Years beginning on and after the Final Compliance Date, such plans may
be aggregated only if they have the same plan years and they are not
mandatorily disaggregated under regulations under Code Section 401(m).
7.5(c)(4) FAMILY MEMBERS. For purposes of determining the Contribution
Percentage of a Participant who is a 5% owner or one of the 10 most
highly paid Highly Compensated Employees, the Contribution Percentage
Amounts and Compensation of such Participant shall include the
Contribution Percentage Amounts and Compensation of his or her Family
Members, and such Family Members shall be disregarded as separate
Participants in determining the ACP both for Participants who are
Nonhighly Compensated Employees and for Participants who are Highly
Compensated Employees.
7.5(c)(5) TIMING. For purposes of determining the ACP for any Plan
Year, Employee Contributions shall be considered made in the Plan Year
in which they are actually contributed to the Fund and Matching
Contributions (and, if applicable, Qualified Matching Contributions and
Qualified Nonelective Contributions) shall be considered made for such
Plan Year only if such contributions are allocated as of a date within
such Plan Year and are actually paid to the Fund by the last day of the
12-month period immediately following such Plan Year.
7.5(c)(6) RECORDS. The Plan Administrator shall maintain records which
are sufficient to demonstrate that the Plan complied with the ACP
limits, including the extent to which Elective Deferrals, Qualified
Nonelective Contributions and Qualified Matching Contributions are
taken into account to satisfy such ACP limits.
7.5(c)(7) OTHER REQUIREMENTS. 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.
7.5(d) DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS.
7.5(d)(1) GENERAL. Notwithstanding any other provision of this Plan
restricting the timing of distributions, Excess Aggregate Contributions
for any Plan Year, plus any income and minus any loss allocable
thereto, shall be forfeited (if otherwise forfeitable under the Plan)
or distributed (if not forfeitable) from the Accounts of the
Participants on whose behalf such Excess Aggregate Contributions were
made no later than the last day of the immediately following Plan Year.
If such Excess Aggregate Contributions are distributed more than 2 1/2
months after the last day of the Plan Year in which such excess
occurred, a 10% excise tax shall be imposed under Code Section 4979 on
the Employer with respect to such excess. Excess Aggregate
Contributions shall be allocated to Participants who are subject to
the Family Member aggregation rules under Code Section 414(q)(6) in
the manner prescribed by the regulations under Code Section 401(m).
7.5(d)(2) DETERMINATION OF INCOME OR LOSS. A corrective distribution of
Excess Aggregate Contributions under this Section 7.5 shall include the
income loss allocable to such Excess Aggregate Contributions for the
Plan Year in which such excess occurred and, if so specified in the
Adoption Agreement, for the period between the end of such Plan Year
and the date of distribution ("gap period"). The income or loss for
such Plan Year and gap period, if applicable, shall be determined in
accordance with the regulations under Code Section 401(m). In lieu of
using the safe harbor method or the alternative method in the
regulations for allocating such income or loss, the Plan Administrator
may use any reasonable method for computing such income or loss,
provided that such method does not violate Code Section 401(a)(4), is
used consistently for all Participants and for all corrective
distributions under the Plan for the Plan Year, and is used by the
Plan for allocating income or loss to Participant's Accounts.
7.5(d)(3) ORDER FOR DETERMINING EXCESS AGGREGATE CONTRIBUTIONS. Excess
Aggregate Contributions shall be determined after first determining
Excess Elective Deferrals under Section 7.3 and then determining Excess
Contributions under Section 7.4.
7.5(d)(4) ACCOUNTING FOR EXCESS AGGREGATE CONTRIBUTIONS. Excess
Aggregate Contributions shall be forfeited (if otherwise forfeitable)
or distributed (if not forfeitable) to the Highly Compensated Employee
from the Participant's Employee Account, Matching Account, Qualified
Matching Account, Qualified Nonelective Account and Elective Deferral
Account in the same ratio that the contributions made on the
Participant's behalf to such account (to the extent
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such contributions are used in the ACP test) for the Plan Year in
which such Excess Aggregate Contributions were made bears to the total
of all such contributions. Notwithstanding the foregoing, Excess
Aggregate Contributions may be distributed form the applicable
subaccounts in accordance with the procedures established by the Plan
Administrator provided such procedures do not result in discrimination
in favor of Highly Compensated Employees which would be prohibited
under Code Section 401(a)(4).
7.5(d)(5) ALLOCATION OF FORFEITURES. Amounts forfeited by Highly
Compensated Employees under this Section 7.5 shall be allocated or
applied in accordance with 6.3(c)(2); provided, no Forfeitures arising
under this Section 7.5 shall be allocated to the Account of any Highly
Compensated Employee.
SECTION 8. VESTING AND FORFEITURES
8.1 DETERMINATION OF NONFORFEITABLE PERCENTAGE.
8.1(a) FULLY VESTED ACCOUNTS. Each Rollover Account, Employee Account,
Elective Deferral Account, Qualified Matching Account and Qualified
Nonelective Account shall be completely nonforfeitable at all times.
8.1(b) DEATH, DISABILITY AND RETIREMENT. The Employer Account and Matching
Account of each Participant who reaches Early Retirement Age or Normal
Retirement Age while an Employee shall become completely nonforfeitable on
such date. The Employer Account and Matching Account of each Participant
who dies while an Employee or who becomes Disabled while and Employee
8.1(b)(1) STANDARD OPTION - shall become completely nonforfeitable on
such date.
8.1(b)(2) ALTERNATIVE - if so specified in the Adoption Agreement,
shall be determined in accordance with the vesting schedule under
Section 8.1(c).
8.1(c) OTHER SEPARATION FROM SERVICE. Subject to Section 12.4, the
nonforfeitable percentage of the Employer Account and Matching Account of a
Participant other than a Participant described in Section 8.1(b) shall be
based on the Participant's Years of Service and on the following vesting
schedule:
8.1(c)(1) STANDARD OPTION - the full and immediate vesting schedule.
8.1(c)(2) ALTERNATIVE - the alternative vesting schedule specified in
the Adoption Agreement;
provided, however, if the Participation Requirement (or the requirement to
receive an allocation of Employer contributions under a 401(k) Plan)
consists of a minimum period of service which exceeds one year, the full
and immediate vesting schedule shall automatically apply notwithstanding
any mention to the contrary in the Adoption Agreement.
8.1(d) EMPLOYEE CONTRIBUTION WITHDRAWALS. No Forfeiture shall occur solely
as a result of the Participant's withdrawal of Employee Contributions.
8.2 FORFEITURE AND SPECIAL REEMPLOYMENT RULES.
8.2(a) BUY BACK RULE (STANDARD OPTION).
8.2(a)(1) FORFEITURE. The forfeitable portion, if any, of the Employer
Account and Matching Account of a Participant who separates form
service shall become a Forfeiture on the earlier of
(i) the date as of which the Participant receives (or is deemed to
receive under Section 8.2(c)) a distribution of the Participant's
entire nonforfeitable Account balance derived form Employer
Contributions, or
(ii) the date he or she has 5 consecutive Breaks in Service (6
consecutive Breaks in Service if the Alternative
Maternity/Paternity Rule applies).
If a Participant elects to have distributed less than the entire
nonforfeitable balance of the Participant's Employer Account and
Matching Account, the part of such accounts that shall be treated as a
Forfeiture is the total forfeitable portion of such Accounts multiplied
by a fraction, the numerator of which is the amount of the distribution
form the Participant's Employer Account or Matching Account and the
denominator of which shall be the total nonforfeitable balance of the
Participant's Employer Account or Matching Account at the time of the
distribution.
Any such Forfeiture shall be allocated or applied in accordance with
Section 6 on the Valuation Date specified in Section 8.2(e).
8.2(a)(2) REEMPLOYMENT. If a Participant receives a distribution and
resumes employment covered under this Plan before the Participant has 5
consecutive Breaks in Service (6 consecutive Breaks in Service if the
Alternative Maternity/Paternity Rule applies), the Employer shall
restore to the Participant's Employer Account and Matching Account an
amount equal to the dollar amount of the Forfeitures form such accounts
if the Participant repays to the Plan an amount equal to the dollar
amount of the distributions form the Participant's Employer Account and
Matching Account in accordance with his Section 8.2(a). Such repayment
must be made before the earlier of (a) 5 years after the first date on
which the Participant is subsequently reemployed by the Employer or a
Participating Affiliate or (b) the date the Participant incurs 5
consecutive Breaks in Service (6 consecutive Breaks in Service if the
Alternative Maternity/Paternity Rule applies) following the date of the
distribution.
If a Participant whose nonforfeitable Account balance is zero is deemed
to receive a distribution under Section 8.2(c) and he or she resumes
employment covered under this Plan before he or she has 5 consecutive
Breaks in Service (6 consecutive Breaks
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in Service if the Alternative Maternity/Paternity Rule applies), the
forfeitable portion of the Participant's Employer Account and Matching
Account shall automatically be restored by the Employer upon the
Participant's reemployment.
Any amount restored by the Employer under this Section 8.2(a) shall be
restored upon repayment from the sources specified in Section 8.2(d).
Such restored or repaid amount shall not be treated as an Annual
Addition under Section 7.2 and shall be credited to the Participant's
Employer Account and Matching Account in the same proportion as the
distribution was made from such accounts.
8.2(b) AUTOMATIC RESTORATION (ALTERNATIVE). This Section 8.2(b) shall apply
if the Employer specifies the use of the "Alternative to the Buy Back Rule"
in the Adoption Agreement.
8.2(b)(1) FORFEITURE. The forfeitable portion, if any, of the Employer
Account and Matching Account of the Participant who separates from
service shall become a Forfeiture on the earlier of
(i) the date as of which payment of the nonforfeitable percentage
of the Participant's Account derived from Employer Contributions
begins or is deemed to begin under Section 8.2(c) or
(ii) the date he or she has 5 consecutive Breaks in Service (6
consecutive Breaks in Service if the Maternity/Paternity Rule
applies)
and such Forfeiture shall be allocated or applied in accordance with
Section 6 on the allocation date specified in Section 8.2(e) unless he
or she is reemployed on or before such allocation date.
8.2(b)(2) REEMPLOYMENT. If a Participant is reemployed before the
Participant incurs 5 consecutive Breaks in Service (6 consecutive
Breaks in Service if the Alternative Maternity/Paternity Rule applies)
but after the date of a Forfeiture under Section 8.2(b)(1), the
Employer shall restore to such Participant as of the last day of the
Plan Year in which he or she is reemployed an amount equal to the
dollar amount of such Forfeiture.
Any amount restored by the Employer under this Section 8.2(b) shall be
restored form the sources specified in Section 8.2(d). Such restored
amount shall not be treated as an Annual Addition under Section 7.2 for
such Plan Year. The resorted amount, together with any remaining
balance of the nonforfeitable portion of the Employer Account and
Matching Account attributable to the Participant's service prior to
reemployment, shall be maintained thereafter as separate special
subaccounts of the Participant's Employer Account and Matching Account
(until such time as it becomes completely nonforfeitable or again
becomes a Forfeiture), and the dollar amount of the Participant's
nonforfeitable percentage in each such special subaccount thereafter
shall be determined in accordance with Formula A unless Formula B is
specified in the Adoption Agreement:
(i) FORMULA A (STANDARD OPTION): X = P (AB + D) - D
(ii) FORMULA B (ALTERNATIVE): X = P (AB + (R x D)) - (R X D)
For purposes of these formulas:
X = The current dollar amount, if any, of the nonforfeitable percentage
in the Participant's special subaccount;
P = The Participant's current nonforfeitable percentage as determined
under Section 8.1;
AB = Such dollar amount, if any, as evidenced by the last balance
posted to the Participant's special subaccount;
D = The dollar amount previously paid to the Participant under Section
9 from the Participant's original Employer Account or Matching
Account, as applicable; and
R = The ratio of AB to the dollar amount, if any, posted to the
Participant's Employer Account or Matching Account, as applicable,
immediately after the distribution.
8.2(c) DEEMED DISTRIBUTION. If the nonforfeitable portion of a
Participant's Account balance derived from Employer and Employee
contributions is zero, the Participant shall be deemed to have received a
distribution of the nonforfeitable portion of the Participant's Account
upon the Participant's separation from service.
A Participant's nonforfeitable Account balance derived from Employee
contributions shall not include accumulated deductible employee
contributions within the meaning of Code Section 72(o)(5)(B) for Plan Years
beginning prior to January 1, 1989.
8.2(d) RESTORATION SOURCES. Any amount restored under this Section 8.2
shall be restored form the following sources in the following order: first,
from Forfeitures occurring in the Plan Year in which such amounts are
restore, if any; second, from Employer Contributions for such Plan Year, if
any; third from Fund Earnings for such Plan Year; and finally, form
additional Employer Contributions. However, at the election of the
Employer, such amounts shall be restored entirely form additional Employer
Contributions.
8.2(e) DATE FORFEITURES APPLIED OR ALLOCATED. Any amounts which become a
Forfeiture under this Section 8.2 shall be allocated or applied as of the
allocation date specified in Section 6 which coincides with or immediately
follows the date such Forfeiture occurs, except that the Employer may
specify in the Adoption Agreement that Forfeitures which are applied to
reduce Employer Contributions, Matching Contributions, Qualified Matching
Contributions or Qualified Nonelecitve Contributions shall be so applied as
of the allocation date for such contributions which immediately follows the
last day of the Plan Year in which such Forfeiture occurs.
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8.2(f) IN-SERVICE DISTRIBUTIONS. The provisions of this Section 8.2(f)
shall apply if the Plan permits in-service distribution under Section 9.2.
If a distribution is made at a time when a Participant has a nonforfeitable
right to less than 100% of his or her Employer Account or Matching Account
and the Participant may increase the nonforfeitable percentage in such
Account:
8.2(f)(1) A separate special subaccount of the Participant's Employer
Account and Matching Account shall be established to record the
Participant's interest in such accounts as of the time of the
distribution; and
8.2(f)(2) At any relevant time the Participant's nonforfeitable portion
of each such special subaccount shall be determined in accordance with
the formula specified in Section 8.2(b).
SECTION 9. ACCOUNT DISTRIBUTION - GENERAL RULES
9.1 AFTER SEPARATION FROM SERVICE. Subject to the rules in this Section 9,
Section 10, Benefit Payment FORMS - Joint and SURVIVOR ANNUITY REQUIREMENTS, and
Section 11, MINIMUM DISTRIBUTION REQUIREMents, the nonforfeitable portion of
each Participant's Account (as determined in accordance with Section 8) shall
not be payable to such Participant before he or she separates from service with
the Employer and all Affiliates.
9.1(a) TIMING. A Participant who has separated from service with the
Employer and all Affiliates
9.1(a)(1) STANDARD OPTION - may request a distribution of the
nonforfeitable portion of his or her Account as soon as practicable
after such separation from service.
9.1(a)(2) ALTERNATIVE - if so specified in the Adoption Agreement, may
not request a distribution of the nonforfeitable portion of his or her
Account until Normal Retirement Age, Early Retirement Age or
Disability, whichever is earlier.
9.1(b) REEMPLOYMENT. Except as required in Section 11, no payment shall be
made under this Section 9.1 if the Participant who separates from service
is reemployed as an Employee before payment is made. If a Participant is
reemployed as an Employee after payment of the nonforfeitable portion of
the Participant's Account has begun but before the entire balance
attributable to such nonforfeitable portion has been paid (or applied to
purchase an annuity), payments to the Participant from such balance shall
be terminated on the date he or she is so reemployed an no further payments
shall be made to the Participant until he or she is subsequently entitled
to such payments in accordance with the terms of this Plan.
9.1(c) $3500 CASHOUT. The nonforfeitable portion of a Participant's Account
shall be distributed in a single sum to such Participant (or t the
Participant's Beneficiary in the event of the Participant's death) as soon
as administratively practicable following the Participant's separation from
service with the Employer and all Affiliates for any reason if the
nonforfeitable portion of such Account is (and at the time of any prior
distribution was) $3500 or less. Any such distributions made on or after
January 1, 1993 shall be made in accordance with any applicable rules
regarding the period for providing notices under Code Section 402(f) and
for making direct rollover elections under Code Section 401(a)(31).
9.1(d) CLAIM. Except as provided in this Section 9 and Section 11, no
payment shall be made until a written claim for such payment is filed with
the Plan Administrator on an Election Form. The Plan administrator shall
process each such claim in accordance with the claims procedure described
in the summary plan description for this Plan. If no such claim is
submitted and the Participant does not defer payment pursuant to Section
9.1(e), payment may be made as soon as the benefit is not immediately
distributable (within the meaning of Section 9.3) and shall, in any event,
begin no later than 60 days following the end of the Plan Year in which
9.1(d)(1) the Participant separates from service as an Employee,
9.1(d)(2) the Participant reaches age 65 or Normal Retirement Age, if
earlier, or
9.1(d)(3) occurs the 10TH anniversary of the year in which the
Participant commenced participation in the Plan, whichever occurs last.
9.1(e) ELECTION TO DEFER PAYMENT. If a Participant has separated from
service with the Employer and all Affiliates and the nonforfeitable portion
of the Participant's Account is (or at the time of any prior distribution
was) more than $3500, the Participant may defer distribution of that
nonforfeitable portion, but in no even beyond
9.1(e)(1) STANDARD OPTION - the Participant's Required Beginning Date
(as defined in Section 11)
9.1(e)(2) ALTERNATIVE - if so specified in the Adoption Agreement, the
later of the Participant's Normal Retirement Age or age 62.
The failure if a Participant and his or her Spouse, if applicable, to
consent to a distribution or make a written request to defer payment while
a benefit is immediately distributable (within the meaning of Section 9.3)
shall be deemed to be an election to defer commencement of payment on any
benefit under this Section 9 until the benefit is no longer immediately
distributable or, if Section 9.1(e)(1) applies, until the Required
Beginning Date.
Nothing in this Section 9.1(e) shall prevent the Plan Administrator from paying
in the normal form a benefit which is not immediately distributable without
regard to whether the Participant and his or her Spouse consent to such
distribution, unless the Participant has requested a deferral pursuant to
Section 9.1(e)(2).
9.1(f) EARLY RETIREMENT AGE. If the Early Retirement Age includes both an
age and service requirement, any Participant who separates from service
before satisfying such age requirement, but after the Participant has
satisfied the service requirement, may request a
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distribution of the nonforfeitable portion of his or her Account upon
satisfaction of such age requirement.
9.1(g) DEATH. In the event of the Participant's death, the nonforfeitable
portion of the Participant's Account shall be payable to the Participant's
Beneficiary as soon as administratively practicable after the Participant's
death.
9.2 BEFORE SEPARATION FROM SERVICE. Subject to the rules in this Section 9,
Section 10, JOINT AND SURVIVOR Annuity Requirements, and Section 11, MINIMUM
DISTRIBUTION REQUIREMents, the nonforfeitable potion of a Participant's Account
may be paid to the Participant before he or she separates from service with the
Employer and all Affiliates if so specified in the Adoption Agreement or by the
Board in accordance with Section 9.2(b)(2) or Section 9.2(e).
9.2(a) MONEY PURCHASE PENSION PLAN OR TARGET BENEFIT PENSION PLAN. If this
Plan is adopted as a Money Purchase Pension Plan or a Target Benefit
Pension Plan,
9.2(a)(1) STANDARD OPTION - except as provided in Section 9.2(d) or
(e), no distributions shall be made before a Participant separates
from service with the Employer and all Affiliates, or
9.2(a)(2) ALTERNATIVE - if so specified in the Adoption Agreement, a
Participant may request a distribution of all or a portion of the
nonforfeitable portion of the Participant's Account on or after he or
she reaches Normal Retirement Age without regard to whether he or she
has separated from service.
9.2(b) 401(K) PLAN.
9.2(b)(1) DISTRIBUTION RESTRICTIONS. If this Plan is adopted as a
401(k) Plan, then, except as provided in this Section 9.2(b), a
Participant's Elective Deferral Account, Qualified Nonelective Account
and Qualified Matching Account shall not be distributable to the
Participant or the Participant's Beneficiary earlier than upon the
Participant's separation from service with the Employer and all
Affiliates, death, or Disability.
9.2(b)(2) TERMINATION OF PLAN OR DISPOSITION OF ASSETS OR SUBSIDIARY.
Notwithstanding Section 9.2(b)(1) and subject to the Participant and
spousal consent rules in Section 9.3 and Section 10, the Employer may,
by action of its Board, make lump sum distributions (within the
meaning of Code Section 401(k)(10)(b)(ii)) of a Participant's Account,
including the Participant's Elective Deferral Account, Qualified
Nonelective Account and Qualified Matching Account in accordance with
Code Section 401(k) by reason of
(i) the termination of the Plan without the establishment of
another defined contribution plan (other than an employee stock
ownership plan as defined in Code Section 4975(e) or Code Section
409 or a simplified employee pension as defined in Code Section
408(k));
(ii) the disposition by the Employer or a Participating Affiliate
to an unrelated entity of substantially all of the assets (within
the meaning of Code Section 409(d)(2)) used by the Employer or
such Participating Affiliate in a trade or business of the
Employer or a Participating Affiliate, if the transferor
continues to maintain this Plan after such disposition, but such
distributions shall be made only with respect to a Participant
who continues employment with the entity acquiring such assets;
or
(iii) the disposition by the Employer or a Participating Affiliate
which is a corporation to an unrelated entity of interest in the
subsidiary (within the meaning of Code Section 409(d)(3)), if the
transferor continues to maintain this Plan after such disposition,
but such distributions shall be made only with respect to a
Participant who continues employment with such former subsidiary.
9.2(b)(3) HARDSHIP DISTRIBUTION.
(i) GENERAL. If the Employer specifies in the Adoption Agreement
that hardship distributions shall be permitted, a Participant may
request a hardship distribution before he or she separates from
service form the Participant's Elective Deferral Account (and, if
applicable, from the nonforfeitable portion of the other
subaccounts of such Account specified in the Adoption Agreement).
The Plan Administrator shall grant such request if, and to the
extent that, the Plan Administrator determines that such
distribution is "necessary" to satisfy an "immediate and heavy
financial need" of the Participant as determined in accordance
with this Section 9.2(b)(3). Any such request shall be made in
writing, shall set forth in detail the nature of such hardship and
the amount of the distribution needed as a result of such
hardship, and shall include adequate documentation of the type of
financial need and the amount of the need. If the Plan
Administrator grants such request, such application shall be
processed and such distribution shall be made in a single sum as
soon as administratively practicable.
(ii) SAFE HARBOR TEST FOR FINANCIAL NEED. An "immediate and heavy
financial need" shall mean one or more of the following, as
specified in the Adoption Agreement,
(A) expenses for medical care described in Code Section 213(d)
incurred by the Participant or the Participant's spouse or
dependents (as defined in Code Section 152) and amounts
necessary for such individuals to obtain such care,
(B) the purchase of (but not he mortgage payments for) a
principal residence of the Participant,
(C) the payment of tuition and related educational fees for
the next 12 months of post-secondary education for the
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Participant or the Participant's spouse, children or
dependents (as defined in Code Section 152),
(D) the prevention of the eviction of the Participant from the
Participant's principal residence or the foreclosure on the
mortgage of the Participant's principal residence, or
(E) such other events as the Internal Revenue Service deems to
constitute an "immediate and heavy financial need" under Code
Section 401(k).
(iii) SAFE HARBOR TEST FOR DISTRIBUTION NECESSARY TO SATISFY NEED.
A distribution shall be deemed to be "necessary" to satisfy an
immediate and heavy financial need only if all of the following
requirements are satisfied:
(A) the distribution is not in excess of the amount of such
need, including any amounts necessary to pay any federal,
state or local income taxes or penalties reasonably
anticipated to result from such withdrawal;
(B) the Participant has obtained all distributions (other than
hardship distributions) and all nontaxable loans currently
available under this Plan and all other plans maintained by
the Employer or an Affiliate;
(C) the Participant's Elective Deferrals and Employee
Contributions under this Plan and elective deferrals and
employee contributions under all other plans maintained by the
Employer or an Affiliate shall be suspended for the 12-month
period following the date of receipt of such hardship
distribution; and
(D) the Participant's Elective Deferrals under this Plan and
elective deferral under all other plans maintained by the
Employer or an Affiliate for the Participant's taxable year
immediately following the taxable year in which such
hardship distribution was made shall not exceed the
applicable dollar limitation under Code Section 402(g) for
such following taxable year less the amount of the
Participant's Elective Deferrals under this Plan and
elective deferrals under all such other plans for the
taxable year in which such hardship distribution was made.
(iv) ACCOUNT LIMITATIONS. For Plan Years beginning after December
31, 1988, no hardship distribution shall be made under this
Section 9.2(b)(3) to a Participant from
(A) the Participant's Qualified Nonelective Account,
(B) the Participant's Qualified Matching Account, or
(C) the Fund Earnings allocated to the Participant's Elective
Deferral Account
except to the extent of amounts credited to such Accounts as of
the end of the last Plan Year ending before July 1, 1989.
9.2(b)(4) DISTRIBUTION ON OR AFTER AGE 59-1/2. If the Employer
specifies in the Adoption Agreement that distributions shall be
permitted on or after age 59-1/2, a Participant may request a
distribution of all or a portion of the nonforfeitable portion of the
subaccounts of the Participant's Account specified in the Adoption
Agreement at any time on or after he or she reaches age 59-1/2. Any
such request shall be made in writing on an Election Form and such
distribution shall be made in a single sum as soon as practicable in
accordance with such reasonable nondiscretionary procedures as the Plan
Administrator deems appropriate under the circumstances for the proper
administration of the Plan.
9.2(b)(5) EMPLOYER ACCOUNT AND MATCHING ACCOUNT. If so specified in the
Adoption Agreement, a Participant may request in accordance with
reasonable and nondiscriminatory procedures a distribution of all or a
portion of the nonforfeitable portion of the Participant's Employer
Account and Matching Account after a fixed number of years, the
attainment of a stated age or upon the occurrence of some prior event
as specified in the Adoption Agreement.
9.2(c) PROFIT SHARING PLAN. If this Plan is adopted as a Profit Sharing
Plan, then, if so specified in the Adoption Agreement, a Participant may
request in accordance with reasonable and nondiscriminatory procedures a
distribution of all or a portion of the nonforfeitable portion of the
Participant's Account after a fixed number or years, the attainment of a
stated age or upon the occurrence of some prior event as specified in the
Adoption Agreement.
9.2(d) WITHDRAWALS FROM EMPLOYEE ACCOUNT.
9.2(d)(1) STANDARD OPTION. A Participant may request a withdrawal for
all or a portion of the Participant's Employee Account at any time. Any
such request shall be made in writing on an Election Form and such
withdrawal shall be made in a single sum as soon as administratively
practicable in accordance with such reasonable nondiscretionary
procedures as the Plan Administrator deems appropriate under the
circumstances for the proper administration of this Plan.
9.2(d)(2) ALTERNATIVE. The Employer may specify in the Adoption
Agreement that withdrawals form Employee Accounts shall not be
permitted before the nonforfeitable portion of a Participant's Account
otherwise becomes distributable under this Section 9 or
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under Section 11 or may specify other rules and conditions under which
such withdrawals may be made.
Notwithstanding the foregoing, any portion of a Participant's Employee
Account which is attributable to recharacterized Excess Contributions under
Section 7.4(e) may only be withdrawn in accordance with the rules set forth
in Section 9.2(b) applicable to an Elective Deferral Account.
9.2(e) PLAN TERMINATION. If this Plan is terminated under Section 14.6 and
if the Board so specifies in its written action effecting such termination,
distribution of the nonforfeitable portion of each Account shall be made as
soon as administratively practical after the Plan is terminated subject the
rules in Section 9.2(b) and to Code Section 411.
9.3 CONSENT.
9.3(a) GENERAL. If the nonforfeitable portion of a Participant's Account
exceeds (or at the time of any prior distribution exceeded) $3500, and such
Account is "immediately distributable", the Participant and the
Participant's Spouse, if any, (or where the Participant has died, the
surviving Spouse, if any) must consent to any distribution from such
Account. The consent of the Participant and the Participant's Spouse shall
be obtained in writing within the 90 day period ending on the Annuity
Starting Date (as defined in Section 10.1). The Plan Administrator shall
notify the Participant and the Participant's Spouse of the right to defer
any distribution until the Participant's Account is no longer "immediately
distributable". Such notification shall include a general description of
the material features, and an explanation of the relative values of, the
optional forms of benefit available under the Plan in a manner that would
satisfy the notice requirements of Code Section 417(a)(3) and shall be
provided no less than 30 days and no more than 90 days prior to the Annuity
Starting Date.
9.3(b) EXCEPTIONS. Notwithstanding the foregoing, only the Participant need
consent to the commencement of a distribution in the form of a Qualified
Joint and Survivor Annuity while the Participant's Account is immediately
distributable. Furthermore, if payment in the form of a Qualified Joint and
Survivor Annuity is not required with respect to the Participant pursuant
to Section 10, only the Participant's Spouse shall not be required to the
extent that a distribution is required to satisfy Code Section 401(a)(9),
Section 401(k), Section 401(m), Section 402(g) or Section 415. In addition,
upon termination of this Plan if the Plan is not required to offer an
annuity option (purchased from a commercial provider), the nonforfeitable
portion of the Participant's Account shall, without the Participant's
consent, be distributed to the Participant unless the Employer or an
Affiliate maintains another defined contribution plan (other than an
employee stock ownership plan as defined in Code Section 4975(e)(7)), in
which event, the Account of a Participant who does not consent to an
immediate distribution shall be transferred to such other plan.
9.3(c) IMMEDIATELY DISTRIBUTABLE. An Account is "immediately distributable"
if any part of the Account could be distributed to the Participant (or the
surviving Spouse) before the Participant reaches (or would have reached if
not deceased) the later of Normal Retirement Age or age 62.
9.3(d) ACCUMULATED DEDUCTIBLE EMPLOYEE CONTRIBUTIONS. For purposes of
determining the applicability of the consent requirements under this
Section 9.3 to distributions made before the first day of the first Plan
Year beginning after December 31, 1988, the nonforfeitable portion of the
Participant's Account shall not include amounts attributable to accumulated
deductible employee contributions within the meaning of Code Section
72(o)(5)(B).
9.4 FORM OF DISTRIBUTION. All distributions (including distributions before
separation from service under Section 9.2 but excluding corrective distributions
under Section 7) shall be made in the form specified in Section 10.
9.5 MINIMUM DISTRIBUTIONS. The Plan shall satisfy the minimum distribution
requirements of Code Section 401(a)(9) as set forth in Section 11.
9.6 MISSING PERSON. In the event than an Account becomes payable under this Plan
pursuant to Section 9.1(c), Section 9.1(d) or Section 9.1(e) and the Plan
Administrator is unable to locate the Participant or his or her Beneficiary
after sending written notice to the last known mailing address and to the United
States Social Security Administration, such Participant or Beneficiary shall be
presumed dead and such Account shall become a Forfeiture on the third
anniversary of the date such Account first became payable under this Plan.
However, the amount of such Forfeiture shall be paid to such missing Participant
or Beneficiary in the event that such person files a claim for such benefit
while this Plan remains in effect and demonstrates to the satisfaction of the
Plan Administrator that such person in fact is such missing Participant or
Beneficiary.
9.7 NO ESTOPPEL OF PLAN. No person is entitled to any benefit under this Plan
except and to the extent expressly provided under this Plan. The fact that
payments have been made from this Plan in connection with any claim for benefits
under this Plan does not (1) establish the validity of the claim, (2) provide
any right to have such benefits continue for any period of time, or (3) prevent
this Plan from recovering the benefits paid to the extent that the Plan
Administrator determines that there was no right to payment of the benefits
under this Plan. Thus, if a benefit is paid under this Plan and it is thereafter
determined by the Plan Administrator that such benefit should not have been paid
(whether or not attributable to an error by the Participant, the Plan
Administrator, the Employer or any other person), then the Plan Administrator
may take such action as the Plan Administrator deems necessary or appropriate to
remedy such situation, including without limitation by (1) deducting the amount
of any overpayment theretofore made to or on behalf of such Participant form any
succeeding payments to or on behalf of such Participant under this plan or from
any amounts due or on behalf of such Participant by the Employer or any
Affiliate or under any other plan, program or arrangement benefiting the
employees or former employees of the Employer or any Affiliate, or (2) otherwise
recovering such overpayment form whoever has benefited from it.
If the Plan Administrator determines that an underpayment of benefits has been
made, the Plan Administrator shall take such action as it deems necessary or
appropriate to remedy such situation. However, in no even shall interest be paid
on the amount of any underpayment other than the investment gains
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(or losses) credited to the Participant's Account pending payment.
9.8 ADMINISTRATION. All distributions shall be made in accordance with such
uniform and nondiscriminatory administrative and operational procedures for
Account distributions as the Plan Administrator deems appropriate under the
circumstances for the proper administration of the Plan.
SECTION 10. BENEFIT PAYMENT FORMS - JOINT AND SURVIVOR ANNUITY REQUIREMENTS
10.1 APPLICATION AND SPECIAL DEFINITIONS. This Section 10 shall apply to a
Participant who is vested at the time of death or at the time of a distribution
from the Participant's Account in any portion of the Participant's Account,
whether such portion is attributable to Employer contributions, Employee
Contributions, or both. For purposes of this Section 10, the terms defined in
this Section 10.1 shall have the meanings shown opposite such terms.
10.1(a) ANNUITY STARTING DATE - means the first day of the first period for
which an amount is paid as an annuity or any other form.
10.1(b) EARLIEST RETIREMENT AGE - means
10.1(b)(1) if distributions are permitted only upon separation form
service, the earliest age at which the Participant could separate form
service and receive a distribution;
10.1(b)(2) if distributions are permitted before separation form
service, the earliest age at which such distribution could be made; or
10.1(b)(3) if clauses (1) and (2) do not apply, the Early Retirement
Age.
10.1(c) ELECTION PERIOD - means
10.1(c)(1) for a Qualified Preretirement Survivor Annuity, the period
which begins on the earlier of (i) the first day of the Plan Year in
which the Participant attains age 35 or (ii) the date such Participant
separates from service and ends on the date of the Participant's death
and
10.1(c)(2) for a Qualified Joint and Survivor Annuity or a Life
Annuity, the 90 day period ending on the Annuity Starting Date.
Notwithstanding the foregoing, a Participant who has not yet reached age 35
(and who will not reach age 35 as of the end of the current Plan Year) may
make a special Qualified Election to waive the Qualified Preretirement
Survivor Annuity for the period beginning on the date of such election and
ending on the first day of the Plan Year in which the Participant will
reach age 35. Such election shall not be valid unless the Participant
receives a written explanation of the Qualified Preretirement Survivor
Annuity in such terms as are comparable to the explanation required under
Section 10.4. Qualified Preretirement Survivor Annuity coverage shall be
automatically reinstated as of the first day of the Plan Year in which the
Participant reaches age 35. Any new waiver on or after such date shall be
subject to the full requirements of this Section 10.
10.1(d) LIFE ANNUITY - means a nontransferable immediate annuity payable
for the life of the Participant, which is the amount of benefit which can
be purchased with such Participant's Vested Account Balance as of the
Annuity Starting Date.
10.1(e) QUALIFIED ELECTION - means a Participant's election to waive the
Qualified Joint and Survivor Annuity or the Qualified Preretirement
Survivor Annuity which election shall not be effective unless (1) the
election designates a specific Beneficiary (including any class of
Beneficiaries or any contingent Beneficiaries) and, for an election to
waive a Qualified Joint and Survivor Annuity, the particular form of
benefit payment, which designations cannot be changed without the Spouse's
consent (or the Spouse expressly permits designations by the Participant
without any further spousal consent); (2) such Participant's Spouse
consents in writing to such election on an Election Form; (3) such consent
acknowledges the effect of such election; and (4) such consent is witnessed
by a notary public; provided,
(i) if the Participant establishes to the satisfaction of a Plan
representative that such written consent may not be obtained
because there is no Spouse or the Spouse cannot be located or
because of such other circumstances as may be described in the
regulations under Code Section 417, a Participant's election
shall be deemed to be a Qualified Election;
(ii) a Spouse's written consent under this Section 10.1(e) shall
be irrevocable as to such Spouse and shall be binding only as
against such Spouse;
(iii) no consent shall be valid unless the Participant received
notice as provided in Section 10.4;
(iv) a consent that permits designations by the Participant
without any further spousal consent must acknowledge that the
Spouse has the right to limit consent to a specific Beneficiary,
and, if applicable, a specific form of benefit payment, and that
the Spouse voluntarily elects to relinquish either or both of such
rights; and
(v) a Participant may revoke (without the consent of his or her
Spouse) an election to waive the Qualified Joint and Survivor
Annuity or the Qualified Preretirement Survivor Annuity on an
Election Form at any time prior to the date as of which the
Participant's Account becomes payable under Section 9.
10.1(f) QUALIFIED JOINT AND SURVIVOR ANNUITY - means a nontransferable
immediate annuity payable for the life of the Participant which is the
amount of benefit which can be purchaser with the Participant's Vested
Account Balance on the Annuity Starting Date with a survivor annuity
payable for the life of the Participant's surviving Spouse which is
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10.1(f)(1) STANDARD OPTION - 50% or
10.1(f)(2) ALTERNATIVE - such greater percentage (not to exceed 100%)
specified in the Adoption Agreement
of the amount of the annuity which is payable during the joint lives of the
Participant and such Spouse.
10.1(g) QUALIFIED PRERETIREMENT SURVIVOR ANNUITY - means a nontransferable
annuity payable for the life of the surviving Spouse, which is the amount
of benefit which can be purchased with
10.1(g)(1) STANDARD OPTION - 100% of the Participant's Vested Account
Balance as of the Annuity Starting Date or
10.1(g)(2) ALTERNATIVE - such lesser percentage (not less than 50%)
specified in the Adoption Agreement of such Participant's Vested
Account Balance (determined by allocating the portion of such balance
which is attributable to employee contributions proportionately to such
annuity and to the remainder of such balance).
10.1(h) VESTED ACCOUNT BALANCE - means the nonforfeitable portion of a
Participant's Account derived from Employer contributions and Employee
contributions (including Rollover Contributions), whether vested before or
upon death, including the proceeds of insurance contracts, if any, on the
Participant's life and reduced, if applicable, for outstanding loans in
accordance with Section 13.3(d)(1)(iv).
10.2 DISTRIBUTION TO PARTICIPANT. Unless a Participant waives the Qualified
Joint and Survivor Annuity and elects an optional method of distribution (as
described in Section 10.6) on an Election Form pursuant to a Qualified Election
within the Election Period, any distribution of such Participant's Vested
Account Balance shall be paid in the form of (a) a Qualified Joint and Survivor
Annuity for each such married Participant and his or her Spouse or (b) a Life
Annuity for each such unmarried Participant. A Participant may elect that such
annuity be distributed upon attainment of the Earliest Retirement Age.
10.3 DISTRIBUTION TO SURVIVING SPOUSE. Unless a Participant waives the Qualified
Preretirement Survivor Annuity and elects an optional method of distribution (as
described in Section 10.6) on an Election Form pursuant to a Qualified Election
within the Election Period, such Participant's Vested Account Balance shall, in
the event of the Participant's death before the Participant's Annuity Starting
Date, be applied to purchase a Qualified Preretirement Survivor Annuity for the
surviving Spouse. If the Qualified Preretirement Survivor Annuity is less than
100%, the remaining portion of the Participant's Vested Account Balance shall be
payable to the Participant's Beneficiary under Section 9. The surviving Spouse
may elect that such Qualified Preretirement Survivor Annuity be distributed to
such Spouse within a reasonable period following the death of the Participant.
Notwithstanding the foregoing, a surviving Spouse entitled to a Qualified
Preretirement Survivor Annuity may elect in writing after the Participant's
death to have the Participant's Vested Account Balance distributed in an
optional form of benefit in accordance with Section 10.6.
10.4 NOTICE REQUIREMENTS.
10.4(a) QUALIFIED JOINT AND SURVIVOR ANNUITY AND LIFE ANNUITY. The Plan
Administrator shall no less than 30 days and no more than 90 days before
the Annuity Starting Date provide each Participant with a written
explanation of the Qualified Joint and Survivor Annuity and the Life
Annuity, which explanation shall describe
10.4(a)(1) the terms and conditions of such annuity;
10.4(a)(2) the Participant's right to make a Qualified Election to
waive such annuity and the effect of such election;
10.4(a)(3) the rights of the Participant's Spouse, if any;
10.4(a)(4) the right to revoke such election and the effect of such a
revocation; and
10.4(a)(5) the relative values of the various optional forms of
benefits under the Plan.
10.4(b) QUALIFIED PRERETIREMENT SURVIVOR ANNUITY. The Plan Administrator
shall provide to each Participant within the "applicable period" for such
Participant a written explanation of the Qualified Preretirement Survivor
Annuity which includes the type of information described in Section
10.4(a). The "applicable period" for a Participant is
10.4(b)(1) the period beginning on the first day of the Plan Year in
which such Participant attains the age 32 and ending with the close of
the Plan Year in which the Participant attains age 35,
10.4(b)(2) a reasonable period ending after he or she becomes a
Participant, or
10.4(b)(3) a reasonable period ending after this Section 10 applies to
such Participant,
whichever period ends last. However, if a Participant separates from
service before he or she reaches age 35, such notice shall be provided
within the two year period beginning one year before the Participant's
separation from service and ending one year after such separation and if
such Participant is subsequently reemployed, the applicable period for such
Participant shall be redetermined under Section 10.4(b)(1) through Section
10.4(b)(3). For purposes of Section 10.4(b)(2) and Section 10.4(b)(3), a
"reasonable period" is the two year period which begins one year prior to
the occurrence of the event and ends one year after the occurrence of the
event.
10.5 SAFE HARBOR RULES.
10.5(a) APPLICATION. If so specified in the Adoption Agreement, the
provisions in this Section 10.5 shall apply in lieu of Section 10.1 through
Section 10.4 to (a) a Participant in a Profit Sharing Plan or a 401(k)
Plan, and (2) to any distribution made on or after the first day of the
first Plan Year beginning after December 31, 1988 from or under a separate
account attributable solely to accumulated deductible employee
contributions (as defined in Code Section 72(o)(5)(B)) and maintained on
behalf of a Participant in a Money Purchase Pension Plan or Target Benefit
Pension
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Plan provided that the conditions specified in Section 10.5(b) are
satisfied.
10.5(b) CONDITIONS. In order to fit within this safe harbor (1) the
Participant does not or cannot elect payments in the form of a Life Annuity
with respect tot he Participant's Vested Account Balance; (2) on the death
of a Participant, the Participant's Vested Account Balance shall be paid to
the Participant's surviving Spouse, or if there is no surviving Spouse or
if the surviving Souse has consented in a manner conforming to a Qualified
Election, to the Participant's Beneficiary; and (3) with respect to a
Participant in a Profit Sharing Plan or a 401(k) Plan, the Plan is not a
direct or indirect transferee of a defined benefit plan, money purchase
pension plan, target benefit pension plan, stock bonus plan, or
profit-sharing plan which is subject to the survivor annuity requirements
of Code Section 401(a)(11) and Code Section 417 ("Transferee Plan"), or the
Plan maintains separate bookkeeping accounts for such Participant's
Transferee Plan benefits and all other benefits of the Participant under
the Plan and gains, losses, withdrawals, contributions, forfeitures, and
other credits or charges are allocated on a reasonable and consistent basis
between the Transferee Plan benefits (which are subject to the survivor
annuity requirements in Section 10.1 through Section 10.4) and the other
Plan benefits (which are subject to the safe harbor rule in this Section
10.5).
10.5(c) SURVIVING SPOUSE. The surviving Spouse may elect to have
distribution of the Vested Account Balance commence within the 90 day
period following the date of the Participant's death. The Vested Account
Balance shall be adjusted for Fund Earnings occurring after the
Participant's death in accordance with Section 6.2 in the same manner that
Accounts are adjusted for other types of distributions.
10.5(d) WAIVER OF SPOUSAL BENEFIT. The Participant may waive the spousal
death benefit described in this Section 10.5 at any time; provided, no such
waiver shall be effective unless it satisfies the conditions described in
Section 10.1(e) (other than the notification requirement referred to in
such section) that would apply to the Participant's Qualified Election to
waive the Qualified Preretirement Survivor Annuity.
10.5(e) VESTED ACCOUNT BALANCE. For purposes of this Section 10.5, Vested
Account Balance shall mean, (1) in the case of a Money Purchase Pension
Plan or Target Benefit Pension Plan, the Participant's separate account
balance attributable solely to accumulated deductible employee
contributions within the meaning of Code Section 72(o)(5)(B) and (2) in the
case of a Profit Sharing Plan or 401(k) Plan, the Participant's Vested
Account Balance as defined in Section 10.1(h), excluding the portion of
such Vested Account Balance which is attributable to Transferee Plan
benefits described in Section 10.5(b).
10.6 OPTIONAL FORMS.
10.6(a) GENERAL. If a Participant properly and timely waives the Qualified
Joint and Survivor Annuity as described in Section 10.2 or to the extent
the safe harbor rules of Section 10.5 apply to a distribution, such
distribution shall be made in the form specified in this Section 10.6 as
selected by the Participant (or his or her Beneficiary in the event of the
Participant's death).
10.6(b) BEFORE SEPARATION FROM SERVICE. Any distribution made pursuant to
Section 9.2 shall, subject to Section 10.2, be made in a single sum.
10.6(c) AFTER SEPARATION FROM SERVICE.
10.6(c)(1) STANDARD OPTION. The optional benefit form available to any
Participant after separation from service with the Employer and all
Affiliates or to his or her Beneficiary in the event of the
Participant's death shall be a single sum.
10.6(c)(2) ALTERNATIVE. If specified in the Adoption Agreement, the
following optional benefit forms shall be available to any Participant
(or to his or her Beneficiary in the event of the participant's death):
(i) SINGLE SUM - by payment in a single sum.
(ii) INSTALLMENTS - by payment in annual installments (or more
frequent installments) over a specified period in accordance with
the minimum distribution rules in Section 11.
(iii) ANNUITY - in the form of an annuity contract under which the
amount of benefits shall be that which can be provided by applying
the nonforfeitable portion of such Participant's Account to the
applicable settlement option or annuity purchase rate under such
contract; or
(iv) OTHER FORMS - under one of the optional forms of
distribution, if any, under the Pre-Existing Plan or a plan
described in Section 14.5 which are required to be preserved
under Code Section 411(d)(6). Such optional forms shall be
described in the Adoption Agreement and, unless otherwise
specified in the Adoption Agreement, such other forms shall apply
to the Participant's entire Account balance. Notwithstanding the
foregoing, if the Plan Administrator separately accounts for
benefits under a Pre-Existing Plan or a plan described under
Section 14.5 or, if applicable, under Section 10.5, the optional
forms may be limited to such separate accounts.
10.6(d) NO METHOD SELECTED. If the safe harbor rules of Section 10.5 apply
to a distribution, but the Participant or the Participant's Spouse or
Beneficiary fails to specify the method of distribution, then any
distribution made to such Participant, Spouse or Beneficiary shall be made
in a single sum.
10.6(e) SINGLE SUM. A distribution made on account of a Participant's death
or separation from service with the Employer and all affiliates which is
made in more than one payment shall be deemed to be a single sum
distribution for purposes of this Plan if the additional payment or
payments are necessary to reflect allocations completed following the
Participant's death or separation from service.
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10.6(f) IN KIND DISTRIBUTIONS. A distribution shall be made in kind only to
the extent provided in the Adoption Agreement and only to the extent an "in
kind" distribution is permissible under ERISA.
10.7 ANNUITY CONTRACTS. Any annuity contract distributed by the Plan to a
Participant or a Beneficiary shall be nontransferable and the terms of such
contract shall comply with the applicable requirements of this Plan the Code.
10.8 TRANSITIONAL RULES.
10.8(a) Any living Participant not receiving benefits on August 23, 1984,
who would otherwise not receive the benefits prescribed by the previous
sections of this Section 10 must be given the opportunity to elect to have
such sections apply (1) if such Participant is credited with at least one
Hour of Service under this Plan or a predecessor plan in a Plan Year
beginning on or after January 1, 1976, and (2) such Participant had at
least 10 years of vesting service when he or she separated from service.
10.8(b) Any living Participant not receiving benefits on August 23, 1984,
who was credited with at least one Hour of Service under this Plan or a
predecessor plan on or after September 2, 1974, and who is not otherwise
credited with any service in a Plan Year beginning on or after January
1976, must be given the opportunity to have his or her benefits paid in
accordance with Section 10.8(d).
10.8(c) The respective opportunities to elect (as described in Section
10.8(a) and (b) above) must be afforded to the appropriate Participants
during the period commencing on August 23, 1984, and ending on the date
benefits would otherwise commence to such Participants.
10.8(d) Any Participant who has elected pursuant to Section 10.8(b) and any
Participant who does not elect under Section 10.8(a) or who meets the
requirements of Section 10.8(a) except that such Participant does not have
at least 10 years of vesting service when he or she separates from service,
shall have his or her benefits distributed in accordance with all of the
following requirements if benefits would have been payable in the form of a
life annuity:
10.8(d)(1) If benefits in the form of a life annuity become payable to
a married Participant who:
(i) begins to receive payments under the Plan on or after Normal
Retirement Age; or
(ii) dies on or after Normal Retirement Age while still working
for the Employer; or
(iii) begins to receive payments on or after the "qualified early
retirement age"; or
(iv) separates from service on or after attaining Normal
Retirement Age (or the "Qualified early retirement age") and after
satisfying the eligibility requirements for the payment of
benefits under the Plan and thereafter dies before beginning to
receive such benefits;
then such benefits shall be received under this Plan in the form of a
Qualified Joint and Survivor Annuity, unless the Participant has
elected otherwise during the election period. The election period must
begin at least 6 months before the Participant attains "qualified early
retirement age", and end not more than 90 days before the commencement
of benefits. Any such election shall be in writing and may be changed
by the Participant at any time.
10.8(d)(2) A Participant who is employed after attaining the qualified
early retirement age shall be given the opportunity to elect, during
the election period, to have a survivor annuity payable on death. The
election period begins on the later of (i) the 90TH day before the
Participant attains the "qualified early retirement age", or (ii) the
date on which participation begins, and ends on the date the
Participant separates from service. Any such election shall be in
writing and may be changed by the Participant at any time. If the
Participant elects the survivor annuity, payments under such annuity
must not be less than the payments which would have been made to the
Spouse under the Qualified Joint and Survivor Annuity of the
Participant had retired on the day before the Participant's death.
10.8(d)(3) For purposes of this Section 10.8(d), "qualified early
retirement age" means the latest of:
(i) the earliest date under the Plan on which the Participant may
elect to receive retirement benefits,
(ii) the first day of the 120TH month beginning before the
Participant reaches Normal Retirement Age, or
(iii) the date the Participant begins participation.
10.9 DIRECT ROLLOVERS.
10.9(a) GENERAL. This Section 10.9 applies to distributions made on or
after January 1. 1993. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a Distributee's election under this
Section 10, a Distributee may elect, at the time and in the manner
prescribed by the Plan Administrator, to have any portion of an Eligible
Rollover Distribution paid directly by the Plan to an Eligible Retirement
Plan specified by the Distributee in a direct rollover in accordance with
Code Section 401(a)(31).
10.9(b) DEFINITIONS.
10.9(b)(1) ELIGIBLE ROLLOVER DISTRIBUTION. An Eligible Rollover
Distribution is any distribution of all or any portion of the balance
to the credit of the Distributee, except that an Eligible Rollover
Distribution does not include: any distribution that is one of a series
of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the Distributee or
the joint lives (or joint life expectancies) of the Distributee and the
Distributee's designated beneficiary, or for a specified period of ten
years or more; any distribution to the extent such distribution is
required under Code Section 401(a)(9); and the portion of any
distribution that is not includable in gross
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income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
10.9(b)(2) ELIGIBLE RETIREMENT PLAN. An Eligible Retirement Plan is an
individual retirement account described in Code Section 408(a), and
individual retirement annuity described in Code Section 408(b), and
annuity plan described in Code Section 403(a), or a qualified trust
described in Code Section 401(a), that accepts the Distributee's
Eligible Rollover Distribution. However, in the case of an Eligible
Rollover Distribution to the surviving spouse, an Eligible Retirement
Plan is an individual retirement account or individual retirement
annuity.
10.9(b)(3) DISTRIBUTEE. A Distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's surviving
spouse and the Employee's or former Employee's spouse or former spouse
who is the alternate payee under a qualified domestic relations order,
as defined in Code Section 414(p), are Distributees with regard to the
interest of the spouse or former spouse.
SECTION 11. MINIMUM DISTRIBUTION REQUIREMENTS
11.1 GENERAL. Subject to Section 10, BENEFIT PAYMENT FORMS - JOINT AND SURVIVOR
ANNUITY REQUIREMents, the requirements of this Section 11 shall apply to any
distribution of a Participant's Account and shall take precedence over any
inconsistent provisions of this Plan. Unless otherwise specified, the provisions
of this Section 11 shall apply to calendar years beginning after December 31,
1984. All distributions required under this Section 11 shall be determined and
made in accordance with the proposed regulations under Code Section 401(a)(9),
including the minimum distribution incidental benefit requirement of Section
1.401(a)(9)-2 of the proposed regulations.
11.2 SPECIAL DEFINITIONS.
11.2(a) APPLICABLE CALENDAR YEAR - means the first Distribution Calendar
Year, and if life expectancy is being recalculated, each succeeding
calendar year.
11.2(b) APPLICABLE LIFE EXPECTANCY - means the life expectancy (or joint
and last survivor expectancy) calculated using the attained age of the
Participant (or Designated Beneficiary) as of the Participant's (or
Designated Beneficiary's) birthday in the Applicable Calendar Year reduced
by one for each calendar year which had elapsed since the date life
expectancy was first calculate. If life expectancy is being recalculated,
the Applicable Life Expectancy shall be the life expectancy as so
recalculated.
11.2(c) DESIGNATED BENEFICIARY - means the individual who is designated as
the Beneficiary under this Plan in accordance with Code Section 401(a)(9)
and the regulations under such Code section.
11.2(d) DISTRIBUTION CALENDAR YEAR - means a calendar year for which a
minimum distribution is required. For distributions beginning before the
Participant's death, the first Distribution Calendar Year shall be the
calendar year immediately preceding the calendar year which contains the
Participant's Required Beginning Date. For distributions beginning after
the Participant's death, the first Distribution Calendar Year shall be the
calendar year in which distributions are required to begin pursuant to
Section 11.6.
11.2(e) LIFE EXPECTANCY - means the life expectancy (or joint and last
survivor expectancy) as computed by use of the expected return multiples in
Tables V and VI of Section 1.72-9 of the Federal Income Tax Regulations.
Unless otherwise elected by the Participant (or Spouse, in the case of t
distributions described in Section 11.6(b)(2)) by the time distributions
are required to begin, life expectancies shall be recalculated annually.
Such election shall be irrevocable as to the Participant (or Spouse) and
shall apply to all subsequent years. The life expectancy of a nonspouse
Beneficiary may not be recalculated.
11.2(f) PARTICIPANT'S BENEFIT - means the nonforfeitable portion of a
Participant's Account determined as of the last Valuation Date in the
calendar year immediately preceding the Distribution Calendar Year
("valuation calendar year") increased by the amount of any contributions of
forfeitures allocated to the Account as of the dates in the valuation
calendar year after such Valuation Date and decreased by distributions made
in the valuation calendar year after such Valuation Date. If any portion of
the minimum distribution for the first Calendar Year on or before the
Required Beginning Date, the amount of the minimum distribution made in the
second Distribution Calendar Year shall be treated as if it had been made
in the immediately preceding Distribution Calendar Year.
11.2(g) REQUIRED BEGINNING DATE.
11.2(g)(1) GENERAL RULE. The Required Beginning Date of a Participant
who reaches age 70 1/2 after December 31, 1987 is the first day of
April of the calendar year following the calendar year in which the
Participant reaches age 70 1/2.
11.2(g)(2) AGE 70 1/2 BEFORE 1988. The Required Beginning Date of a
Participant who reaches age 70 1/2 before January 1, 1988 shall be,
(i) for a participant who is not a 5% owner, the first day of
April of the calendar year following the calendar year in which
occurs the later of retirement or reaching age 70 1/2; or
(ii) for a Participant who is a 5% owner during any year beginning
after December 31, 1979, the first day of April following the
later of:
(A) the calendar year in which the Participant reaches age
70 1/2, or
(B) the earlier of the calendar year with or within which ends
the Plan Year in which the Participant becomes a 5% owner, or
the calendar year in which the Participant retires.
11.2(g)(3) AGE 70 1/2 DURING 1988. The Required Beginning Date of a
Participant who is not a 5%
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owner, who reaches age 70 1/2 during 1988 and who has not retired
before January 1, 1989 shall be April 1, 1990. The Required Beginning
Date of a Participant who is a 5% owner or who retired before January
1, 1989 and who reaches age 70 1/2 during 1988 shall be determined in
accordance with Section 11.2(g)(1).
11.2(g)(4) 5% OWNER. A Participant shall be treated as a 5% owner for
purposes of this Section 11.2(g) if such Participant is a 5% owner as
defined in Code Section 416(i) (determined in accordance with Code
Section 416 but without regard to whether the Plan is top-heavy) at any
time during the Plan Year ending with or within the calendar year in
which such individual attains age 66 1/2 or any subsequent Plan Year.
Once distributions have begun to a 5% owner under this Section 11, they
must continue to be distributed, even if the Participant ceased to be a
5% owner in a subsequent year.
11.3 REQUIRED BEGINNING DATE. The entire nonforfeitable interest of a
Participant must be distributed or begin to be distributed no later than the
Participant's Required Beginning Date. Such distribution shall be made
11.3(a) in the form of a Qualified Joint and Survivor Annuity as described
in Section 10.2, or
11.3(b) if the Qualified Joint and Survivor Annuity is properly waived or
to the extent the safe harbor rules in Section 10.5 apply, in the optional
benefit form in Section 10.6 selected by the Participant.
Notwithstanding the foregoing, even if installment distributions are not
otherwise available as an optional benefit form, a Participant who has not
separated from service with the Employer and all Affiliates as of the Required
Beginning Date (or as of the end of any Distribution Calendar Year thereafter)
may elect to receive the minimum distribution amount for each such Distribution
Calendar Year as described in Section 11.5.
11.4 LIMITS ON DISTRIBUTION PERIODS. As of the first Distribution Calendar Year,
distributions (if not made in a single sum) may only be made over one of the
following periods (or a combination thereof):
11.4(a) the life of the Participant
11.4(b) the life of the Participant and Designated Beneficiary,
11.4(c) a period certain not extending beyond the joint and last survivor
expectancy of the Participant and a Designated Beneficiary.
11.5 DETERMINATION OF AMOUNT TO BE DISTRIBUTED EACH YEAR. If the Participant's
interest is to be distributed in other than a single sum, the following minimum
distribution rules shall apply on or after the Required Beginning Date:
11.5(a) INDIVIDUAL ACCOUNT.
11.5(a)(1) GENERAL. If a Participant's Benefit is to be distributed
over (i) a period not extending beyond the life expectancy of the
participant or the joint life and last survivor expectancy of the
Participant and the Participant's Designated Beneficiary or (ii) a
period not extending beyond the life expectancy of the Designated
Beneficiary, the amount required to be distributed for each calendar
year, beginning with distributions for the first Distribution Calendar
Year, must at least equal the quotient obtained by dividing the
Participant's Benefit by the Applicable Life Expectancy.
11.5(2)(a) INCIDENTAL DEATH BENEFIT RULES.
(i) For calendar years beginning before January 1, 1989, if the
Participant's Spouse is not the Designated Beneficiary, the method
of distribution selected must assure that at least 50% of the
present value of the amount available for distribution is paid
within the life expectancy of the Participant.
(ii) For calendar years beginning after December 31, 1988, the
amount to be distributed each year, beginning with distributions
for the first Distribution Calendar Year, shall not be less than
the quotient obtained by dividing the Participant's Benefit by the
lesser of (A) the Applicable Life Expectancy or (B) if the
Participant's Spouse is not the Designated Beneficiary, the
applicable divisor determined from the table set forth in Q&A-4 of
Section 1.401(a)(9)-2 of the proposed regulations. Distributions
after the death of the Participant shall be distributed using the
Applicable Life Expectancy on Section 11.5(a)(1) as the relevant
divisor without regard to Section 1.401(a)(9)-2 of the proposed
regulations.
11.5(a)(3) TIMING. The minimum distribution required for the
Participant's first Distribution Calendar Year must be made on or
before the Participant's required Beginning Date. The minimum
distribution for subsequent Distribution Calendar Years, including the
minimum distribution for the Distribution Calendar Year in which the
Participant's Required Beginning Date occurs, must be made on or before
December 31 of that Distribution Calendar Year.
11.5(b) ANNUITY CONTRACTS. If the Participant's Benefit is distributed in
the form of an annuity purchased form an insurance company, distributions
under such annuity shall be made in accordance with the requirements of
Code Section 401(a)(9).
11.6 DEATH DISTRIBUTION PROVISIONS.
11.6(a) DISTRIBUTION BEGINNING BEFORE DEATH. If the Participant dies after
distribution of his or her nonforfeitable interest has begun, the remaining
portion of such nonforfeitable interest shall continue to be distributed at
least as rapidly as under the method of distribution being used prior to
the Participant's death.
11.6(b) DISTRIBUTION BEGINNING AFTER DEATH. If the Participant dies before
distribution of his or her
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nonforfeitable interest begins, distribution of the Participant's entire
nonforfeitable interest shall be completed by December 31 of the calendar
year containing the fifth anniversary of the Participant's death except to
the extent that an election is made to receive distributions in accordance
with (1) or (2) below:
11.6(b)(1) if any portion of the Participant's nonforfeitable interest
is payable to a Designated Beneficiary, distributions may be made over
the life or over a period certain not greater than the life expectancy
of the Designated Beneficiary and shall commence on or before December
31 of the calendar year immediately following the calendar year in
which the Participant died;
11.6(b)(2) if the Designated Beneficiary is the Participant's surviving
Spouse, distributions may be made over the period described in clause
(1) above but the required commencement date may be deferred until the
later of (i) December 31 of the calendar year immediately following the
calendar year in which the Participant died or (ii) December 31 of the
calendar year in which the Participant would have reached age 70 1/2.
If the Participant has not made an election pursuant to this Section
11.6(b) by the time of the participant's death, the Participant's
Designated Beneficiary must elect the method of distribution no later than
the earlier of (A) December 31 of the calendar year in which distributions
would be required to begin under this Section 11.6, or (B) December 31 of
the calendar year which contains the fifth anniversary of the date of death
of the Participant. If the Participant has no Designated Beneficiary, or if
the Designated Beneficiary does not elect a method of distribution,
distribution of the Participant's entire interest must be completed by
December 31 of the calendar year containing the fifth anniversary of the
Participant's death.
11.6(c) SPECIAL RULES.
11.6(c)(1) for purposes of Section 11.6(b), of the surviving Spouse
dies after the Participant, but before payments to such Spouse begin,
the provisions of Section 11.6(b), with the exception of 11.6(b)(2),
shall be applies as if the surviving Spouse were the Participant.
11.6(c)(2) For purposes of this Section 11.6, any amount paid to a
child of the Participant shall be treated as if it had been paid to
the surviving Spouse if the amount becomes payable to the surviving
Spouse when the child reaches the age of majority.
11.6(c)(3) For the purposes of this Section 11.6, distribution of a
Participant's interest shall be considered to begin on the
Participant's Required Beginning Date (or, if Section 11.6(c)(1) above
is applicable, the date distribution is required to begin to the
surviving Spouse pursuant to Section 11.6(b)). If distribution in the
form of an annuity irrevocably commences to the Participant before the
Required Beginning Date, the date distribution is considered to begin
shall be the date distribution actually commences.
11.7 SPECIAL PRE-TEFRA DISTRIBUTION ELECTION.
11.7(a) GENERAL RULE. Subject to Section 10, BENEFIT PAYMENT FORMS - JOINT
AND SURVIVOR ANNUITY REQUIREMents, the nonforfeitable percentage of the
Account of any Participant (including a "5% owner" as described in Section
11.2(g)(4)) who has in effect a Special Pre-TEFRA Distribution Election (as
described in Section 11.7(b)) shall be paid only to the Participant, or in
the case of the Participant's death, only to his or her beneficiary in
accordance with the method of distribution specified in such election
without regard to the distribution rules set forth in Section 11.1 through
Section 11.6.
11.7(B) SPECIAL PRE-TEFRA DISTRIBUTION ELECTION. For purposes of this
Section 11.7, a Special Pre-TEFRA Distribution Election means a designation
in writing, signed by the Participant or his or her beneficiary, made
before January 1, 1984 by a Participant in this Plan or a Participant in a
Pre-Existing Plan who had accrued a benefit under such plan as of December
31, 1983 which designation specifies
11.7(b)(1) a distribution methods which was permissible under Code
Section 401(a)(9) as in effect prior to amendment by the Deficit
Reduction Act of 1984,
11.7(b)(2) the time at which such distribution will commence,
11.7(b)(3) the period over which such distribution will be made, and
117(b)(4) if such designation is to be effective for a beneficiary, the
beneficiaries of the Participant in order of priority.
A distribution to be made upon the death of a Participant shall not be
covered under this Section 11.7(b) unless the information in the
designation with respect to such distribution satisfies the requirements of
this Section 11.7(b).
11.7(c) CURRENT DISTRIBUTIONS. Any distribution which began before January
1, 1984 and continues after such date shall be deemed to be made pursuant
to a Special Pre-TEFRA Distribution Election if the method of distribution
was set forth in writing and such method satisfies the requirements of
Section 11.7(b)(1) through (4).
11.7(d) REVOCATION. A Participant who made a Special Pre-TEFRA Distribution
Election shall have the right to revoke such election by completing and
filing a distribution Election Form under Section 9. Furthermore, any
change (other than the mere substitution or addition of a beneficiary not
originally designated in such election which does not directly or
indirectly alter the period over which distributions are to be made) to a
Special Pre-TEFRA Distribution Election shall be deemed to be a revocation
of such election. Upon revocation, any subsequent distribution shall be
made in accordance with Code Section 401(a)(9). If a designation is revoked
subsequent to the date distributions are required to begin, the Plan must
distribute by the end of the calendar year following the calendar year in
which the revocation occurs the total amount not yet distributed which
would have been
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required to have been distributed to satisfy Code Section 401(a)(9), but
for the Special Pre-TEFRA Distribution Election. For calendar years
beginning after December 31, 1988, such distributions must meet the minimum
distribution incidental benefit requirements in Section 1.401(a)(9)-2 of
the proposed regulations. If an amount is transferred or rolled over from
one plan to another plan, the rules in Q&A J-2 and Q&A J-3 of Section
1.401(a)(9)-1 of the proposed regulations shall apply.
SECITON 12. TOP-HEAVY PLAN RULES
12.1 APPLICATION. The rules set forth in this Section 12 shall supersede any
provisions of this Plan or the Adoption Agreement which are inconsistent with
these rules as of the first day of the first Plan Year beginning after December
31, 1983 during which the Plan is or becomes a Top-Heavy Plan and such rules
shall continue to supersede such provisions for so long as the Plan is a
Top-Heavy Plan unless the Code permits such rules to cease earlier or requires
them to remain in effect for a longer period.
12.2 SPECIAL DEFINITIONS. For purposes of this Section 12, the terms defined in
this Section 12.2 shall have the meanings shown opposite such terms.
12.2(a) DETERMINATION DATE - means
12.2(a)(1) for the first Plan Year of a Plan which is adopted as a new
Plan under the Adoption Agreement, the last day of such Plan Year, and
12.2(a)(2) for any subsequent Plan Year, the last day of the
immediately preceding Plan Year, and
12.2(a)(3) for any plan year of each other qualified plan maintained by
the Employer or an Affiliate which is part of a Permissive Aggregation
Group or a Required Aggregation Group, the date determined under this
Section 12.2(a) as if the term "Plan Year" means the plan year for each
such qualified plan.
12.2(b) KEY EMPLOYEE - means any Employee or former Employee (and the
Beneficiaries of such Employee) (as determined in accordance with Code Section
416(i)(1)) who at any time during the Plan Year or any of the 4 immediately
preceding Plan Years was
12.2(b)(1) an officer of the Employer or an Affiliate whose
compensation for such Plan Year exceeds 50% of the dollar limitation
under Code Section 415(b)(1)(A),
12.2(b)(2) an owner (or considered to be an owner within the meaning
of Code Section 318) of one of the 10 largest interests in the
Employer or an Affiliate whose compensation for such Plan Year exceeds
the 100% of the dollar limitation under Code Section 415(c)(1)(A);
provided that the value of such Employee's ownership interest is more
than one-half of one percent,
12.2(b)(3) a 5% owner of the Employer or an Affiliate, or
12.2(b)(4) a 1% owner of the Employer or an Affiliate whose
compensation for such Plan Year exceeds $150,000.
For purposes of this Section 12.2(b), an Employee's compensation means
compensation within the meaning of Code Section 415(c)(3) (as defined in
Section 7.2(a)(2)) but including amounts contributed by the Employer or an
Affiliate pursuant to a salary reduction agreement which are excluded form
gross income under Code Section 125, Section 412(e)(3), Section 402(h) or
Section 403(b).
12.2(c) PERMISSIVE AGGREGATION GROUP - means a Required Aggregation Group
and any other qualified plan or plans (as described in Code Section 401(a))
maintained by the Employer or an Affiliate which, when considered with the
Required Aggregation Group, would continue to satisfy the requirements of
Code Section 401(a)(4) and Code Section 410.
12.2(d) REQUIRED AGGREGATION GROUP - means (1) each qualified plan (as
described in Code Section 401(a)) maintained by the Employer or an
Affiliate in which at least one Key Employee participates or participated
at any time during the 5 year period ending on the Determination Date
(without regard to whether such plan has terminated) and (2) any other
qualified plan maintained by the Employer or an Affiliate which enables any
such plan to satisfy the requirements of Code Section 401(a)(4) or Code
Section 410.
12.2(e) TOP-HEAVY PLAN - means this Plan if, for any Plan Year beginning
after December 31, 1983, either,
12.2(e)(1) this Plan is not part of a Required Aggregation Group or a
Permissive Aggregation Group and the Top-Heavy Ratio for this Plan
exceeds 60%;
12.2(e)(2) this Plan is part of a Required Aggregation Group but not
part of a Permissive Aggregation Group and the Top-Heavy Ratio for the
Required Aggregation Group exceeds 60%; or
12.2(e)(3) this Plan is part of a Required Aggregation Group and part
of a Permissive Aggregation Group and the Top-Heavy Ratio for the
Permissive Aggregation Group exceeds 60%.
12.2(f) TOP-HEAVY RATIO.
12.2(f)(1) If the Employer or an Affiliate maintains one or more
defined contribution plans (including any simplified employee pension
plan) and the Employer or an Affiliate has never maintained a defined
benefit plan under which benefits have been accrued for a Participant
in this Plan during the 5 year period ending on the Determination Date,
"Top-Heavy Ratio" mean for this Plan alone or for the Required
Aggregation Group or Permissive Aggregation Group, as appropriate, a
fraction, the numerator of which shall be the sum of the account
balances of all Key Employees as of the Determination Date under this
and all other such defined contribution plans and the denominator of
which shall be the sum of the account balances of all employees as of
the Determination Date under this and all other such defined
contribution plans.
12.2(f)(2) If the Employer or an Affiliate maintains one or more
defined contribution plans (including
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any simplified employee pension plan) and the Employer or an Affiliate
maintains or has ever maintained one or more defined benefit plans
under which benefits have been accrued for a Participant in this Plan
during the 5 year period ending on the Determination Date, "Top Heavy
Ratio" means for the Required Aggregation Group or the Permissive
Aggregation Group, as appropriate, a fraction, the numerator of which
shall be the sum of the account balances for all Key Employees as of
the Determination Date under this and all other such defined
contribution plans and the sum of the present value of the accrued
benefits for all Key Employees as of the Determination Date under all
defined benefit plans maintained by the Employer or an Affiliate and
the denominator of which shall be the sum of the account balances for
all employees as of the Determination Date under this and all other
such defined contribution plans and the sum of the present value of
the accrued benefits for all employees as of the Determination Date
under all defined benefit plans maintained by the Employer or an
Affiliate.
12.2(f)(3) The following rules shall apply for purposes of calculating
the Top-Heavy Ratio:
(i) The value of an y account balance and the present value of any
accrued benefit shall be determined as of the most recent
Top-Heavy Valuation Date that falls within, or ends with, the 12
month period ending on the Determination Date (or, if plans are
aggregated, the Determination Dates that fall within the same
calendar year), except as provided under the regulations under
Code Section 416 for the first and second years of a defined
benefit plan;
(ii) The value of any account balance and the present value of any
accrued benefit shall include the value of any distributions made
during the 5 year period ending on such Determination Date and any
contributions due but as yet unpaid as of the Determination Date
which are required to be taken into account on that date under
Code Section 416;
(iii) The present value of an accrued benefit under a defined
benefit plan shall be determined in accordance with the interest
rate and mortality assumptions specified in the Adoption Agreement
or, if this Plan and such defined benefit plan are Paired Plans,
as specified in the Adoption Agreement for such defined benefit
Paired Plan;
(iv) The account balance or accrued benefit of a Participant who
is not a Key Employee for the current Plan Year but who was a Key
Employee in a prior Plan Year or who had not performed an Hour of
Service for the Employer or any Affiliate at any time during the 5
year period ending on the Determination Date shall be disregarded;
(v) Deductible employee contributions shall be disregarded;
(vi) The calculation of the Top-Heavy Ratio and the extent to
which contributions, distributions, rollovers, and transfers are
taken into account shall be determined in accordance with Code
Section 415; and
(vii) if the Employer maintains more than one defined benefit
plan, the accrued benefit of a Participant other than a Key
Employee shall be determined under the method, if any, that
uniformly applies for accrual purposes under all such defined
benefit plans maintained by ht Employer or an Affiliate, or if
there is no such method, as if such benefit accrued not more
rapidly than the slowest accrual rate permitted under the
fractional rule of Code Section 411(b)(1)(C).
12.2(g) TOP-HEAVY VALUATION DATE - means for this Plan, the last day of
each Plan Year and for each other qualified plan maintained by the Employer
or an Affiliate,
12.2(g)(1) STANDARD OPTION - the most recent valuation date for such
plan or
12.2(g)(2) ALTERNATIVE - the valuation date specified in the Adoption
Agreement.
12.3 MINIMUM ALLOCATION.
12.3(a) GENERAL. Except as otherwise provided in this Section 12.3, for any
Plan Year in which this Plan is a Top-Heavy Plan, the "minimum allocation"
for each Participant who is not a Key Employee means an allocation of
Employer Contributions and Forfeitures made in accordance with Section
12.3(d) which shall not be less than the lesser of
12.3(a)(1) 3% of such Participant's Compensation for such Plan Year or,
12.3(a)(2) if the Employer or an Affiliate has no defined benefit plan
which uses this Plan to satisfy the requirements of Code Section
401(a)(4) of Code Section 410, the largest percentage of the Employer
Contributions and Forfeitures allocated on behalf of any Key Employee
(expected as a percentage of the first $200,000 of Compensation) for
such Plan Year.
12.3(b) DEFINED BENEFIT PAIRED PLAN. If this Plan is adopted in combination
with a defined benefit Paired Plan, the Employer and the Participant
Affiliates shall make a contribution under this Plan (or, if this Plan is
adopted in combination with another defined contribution Paired Plan, under
any combination of defined contribution Paired Plans) for each Participant
who is an Eligible Employee at any time during such Plan Year who is also a
Participant in the defined benefit Paired Plan equal to at least 5% (or
such greater percentage as is specified in the adoption agreement for the
defined benefit Paired Plan) or Compensation for such Plan Year unless the
Employer elects under such defined benefit Paired Plan to provide the
minimum benefit accrual under such defined benefit Paired Plan.
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If this Section 12.3(b) applies and the Employer has not elected to provide
the minimum benefit accrual under the defined benefit Paired Plan, the
minimum allocation required under this Section 12.3(b) for Plan Years
beginning on and after the Final Compliance Date shall, subject to the
ordering rules in Section 12.3(c), be made under this Plan without regard
to whether the Participant also benefits under the defined benefit Paired
Plan. Further, if this Plan and the defined benefit Paired Plan do not
benefit the same participants for such Plan Year, the minimum allocation
described in Section 12.3(a) shall, subject to the ordering rules in
Section 12.3(c), be made under this Plan for each Participant described in
Section 12.3(d)(1) and the minimum benefit accrual shall be made for each
participant in the defined Benefit Paired Plan in accordance with the terms
of such Paired Plan.
12.3(c) DEFINED CONTRIBUTION PAIRED PLAN. If this Plan is adopted in
combination with one or more defined contribution Paired Plans, the minimum
allocation required under this Section 12.3, if any, shall be made under
such Paired Plans in the following order:
12.3(c)(1) STANDARD OPTION - First, under the Money Purchase Pension Plan, if
any; second, under the Target Benefit Pension Plan, if any; third, under the
Profit Sharing Plan, if any; and finally, under the 401(k) Plan, if any.
12.3(c)(2) ALTERNATIVE - in the order specified in the Adoption
Agreement.
12.3(d) PARTICIPANTS ENTITLED TO ALLOCATION. The minimum allocation
required for any Plan Year under this Section 12.3
12.3(d)(1) shall be made for each Participant who is not a Key Employee
and who is employed as an Eligible Employee (or on an authorized leave
of absence as an Eligible Employee) on the last day of such Plan Year,
without regard to the number of Hours of Service actually completed by
such Participant in such Plan Year; and
12.3(d)(2) shall not apply to any Participant (i) who is covered under
any other plan or plans maintained by the Employer or an Affiliate and
the Employer has specified in the Adoption Agreement that the minimum
allocation or the minimum benefit required under Code Section 416 for
any Plan Year for which this Plan is a Top-Heavy Plan shall be made
under such other plan or plans or (ii) to the extent such Participant
receives such minimum allocation or minimum benefit under this Plan or
any other plans maintained by the Employer or an Affiliate.
Notwithstanding Section 12.3(d)(2), if this Plan is adopted as a
nonstandardized Plan that intends to satisfy the safe harbor in the Code
Section 401(a)(4) regulations, the minimum allocation required under
Section 12.3 for Plan Years beginning on and after the Final Compliance
Date must be made for each Participant described in Section 12.3(d)(1)
without regard to whether the Participant also benefits under another plan,
but only to the extent that such minimum allocations not otherwise received
under this Plan.
12.3(e) NONFORFEITABILITY. The minimum allocation required under this
Section 12.3 (to the extent required to be nonforfeitable under Code
Section 416(b)) shall not be forfeited under Code Section 411(a)(3)(B) or
Code Section 411(a)(3)(D).
12.3(f) COMPENSATION. For purposes of computing the minimum allocation
under this Section 12.3, the term "Compensation" shall mean Compensation
within the meaning of Code Section 415(c)(3) as described in Section
7.2(a)(2).
12.3(g) MULTIPLE PLANS. If the Employer of an Affiliate also maintains
another plan, the Employer shall specify in the Adoption Agreement how the
minimum allocation, if any, required under Code Section 416 will be
satisfied, and if the Employer or an Affiliate maintains or has maintained
a defined benefit plan, the method of satisfying Code Section 416(h).
12.3(h) INTEGRATED PLANS.
12.3(h)(1) PROFIT SHARING PLAN. If this Plan is adopted as an
integrated Profit Sharing Plan, the following allocation formula shall
apply in lieu of the formula in Section 6.3(a)(2) for each Plan Year in
which such Plan is a Top-Heavy Plan.
The Forfeitures and the Employer Contribution shall be allocated (and
posted) as of the last day of such Plan Year to the Employer Account of
each Active Participant and each other Participant for whom a minimum
allocation is required to be made under this Section 12.3 in accordance
with the following:
STEP ONE - First, the lesser of (A) the sum of the Employer
Contribution and Forfeitures for such Plan Year or (B) the product
of the Top-Heavy Percentage and the total Compensation of all such
Participants shall be allocated in the same ratio that each such
Participant's total Compensation for such Plan Year bears to the
total Compensation of all such Participants for such Plan Year.
STEP TWO - Second, the lesser of (A) the remaining Employer
Contribution and Forfeitures for such Plan Year or (B) the product
of the Top-Heavy Percentage (or the Maximum Disparity Rate, if
less) and the total Excess Compensation of all such Participants
shall be allocated in the same ratio that each such Participant's
Excess Compensation for such Plan Year bears to the total Excess
Compensation of all such Participants for such Plan Year.
STEP THREE - Third, the lesser of (A) the remaining Employer
Contribution and Forfeitures for such Plan Year or (B) the
Integration Amount shall be allocated in the same ratio that the
sum of the total Compensation and Excess Compensation of each such
Participant for such Plan Year bears the sum of the total
Compensation and Excess Compensation of all such Participants for
such Plan Year.
STEP FOUR - Finally, the remaining Employer Contribution and
Forfeitures for such Plan Year
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shall be allocated in the same ratio that each such Participant's
total Compensation for such Plan Year bears to the total
Compensation of all such Participants for such Plan Year.
12.3(h)(2) MONEY PURCHASE PENSION PLAN. If this Plan is adopted as an
integrated Money Purchase Pension Plan, (i) the "Base Contribution
Percentage" specified in the Adoption Agreement, if less that the
Top-Heavy Percentage, shall be increased to equal the Top-Heavy
Percentage and (ii) the Employer Contribution required under Section
5.2 (as adjusted in (i) above) shall be made for each Active
Participant and each other Participant for whom an allocation is
required to be made under this Section 12.3.
12.3(h)(3) SPECIAL DEFINITIONS. For purposes of this Section 12.3(h),
(i) "Excess Compensation" means the amount, if any, of a
Participant's Compensation for such Plan Year which exceeds the
Integration Level for such Plan Year.
(ii) "Integration Amount" means the product of (1) the total
Compensation and the total Excess Compensation of all such
Participants and (2) the excess, if any, of the Integration
Percentage specified in the Adoption Agreement over the Top-Heavy
Percentage.
(iii) "Top-Heavy Percentage" means 3% or such greater percentage
required under this Section 12.3 or specified in the Adoption
Agreement.
12.4 VESTING SCHEDULE. For any Plan Year in which this Plan is a Top-Heavy Plan,
the Top-Heavy vesting schedule specified in the Adoption Agreement automatically
shall apply to all benefits under the Plan within the meaning of Code Section
411(a)(7) (other than benefits which are attributable to Employee Contributions
Rollover Contributions or other contributions which are nonforfeitable when
made), including benefits accrued before the effective date of Code Section 416
and before this Plan became a Top-Heavy Plan, unless the regular vesting
schedule is at least as favorable to such Top-Heavy vesting schedule. However,
the provisions of this Section 12.4 shall not apply to the account balance of
any Participant who does no complete an Hour of Service after the Plan first
becomes a Top-Heavy Plan and such Participant's Account balance attributable to
Employer contributions and Forfeitures shall be determined without regard to
this Section 12.4. Further, no change in the vesting schedule as a result of a
change in this Plan's status to a Top-Heavy Plan or to a plan which is not a
Top-Heavy Plan shall deprive a Participant of the nonforfeitable percentage of
the Participant's Account balance accrued to the date of the change, and any
such change to the vesting schedule shall be subject to the provisions of
Section 14.3(c).
12.5 401(K) PLAN. Notwithstanding any contrary provision, the following rules
shall apply if this Plan is adopted as a 401(k) Plan:
12.5(a) Qualified Nonelective Contributions shall be treated as Employer
contributions for purposes of satisfying the minimum allocation under
Section 12.3.
12.5(b) Matching Contributions allocated to the Account of a Key Employee
shall be treated as Employer contributions for purposes of determining the
amount of the minimum allocation required under Section 12.3. The Plan may
use Matching Contributions allocated on behalf of a non-Key Employee to
satisfy the minimum allocation under Section 12.3; provided, however, that
for Plan Years beginning on and after the Final Compliance Date, such
contributions shall not be treated as Matching Contributions for purposes
of satisfying the limitations of Section 7.4 and Section 7.5 but shall
instead be subject to the general nondiscrimination rules of Code Section
401(a)(4).
12.5(c) Elective Deferrals allocated to the Account of a Key Employee shall
be treated as Employer contributions for purposes of determining the amount
of the minimum allocation required under 12.3. However, for Plan Years
beginning on and after the Final Compliance Date, Elective Deferrals
allocated on behalf of non-Key Employees shall not be treated as Employer
contributions for purposes of satisfying the minimum allocation required
under Section 12.3.
SECTION 13. INSURANCE, INDIVIDUALLY DIRECTED INVESTMENTS AND PARTICIPANT LOANS
13.1 INSURANCE CONTRACTS.
13.1(a) ELECTIONS AND EXISTING LIFE INSURANCE CONTRACTS.
13.1(a)(1) STANDARD OPTION. No Participant shall have the right to
elect to have the Trustee purchase an insurance contract on his or her
life for his or her Account under this Plan; however, any life
insurance contract purchased under the terms of a Pre-Existing Plan,
which is acceptable to the Trustee, shall continue to be held by the
Trustee for the benefit of the Participant subject to the conditions of
this Section 13.1.
13.1(a)(2) ALTERNATIVE. If so specified in the Adoption Agreement each
Participant who is an Eligible Employee may elect (subject to this
Section 13.1) to have the Trustee purchase an insurance contract on
his or her life for his or her Account under the Plan by completing
and filing an Election Form with the Plan Administrator.
13.1(b) PREMIUMS. The aggregate annual premiums on any life insurance
contracts held for a Participant's Account under this Plan shall be subject
to the following limitations:
13.1(b)(1) ORDINARY LIFE. If the life insurance contracts are ordinary
whole life insurance contracts which are contracts with both
nondecreasing death benefits and nonincreasing premiums, such premiums
shall be less than one-half of the aggregate
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Employer Contributions plus Forfeitures credited tot he Participant's
Employer Account and Matching Account.
13.1(b)(2) TERM AND UNIVERSAL LIFE. If the life insurance contracts are
term life insurance contracts, universal life insurance contracts and
any other life insurance contracts (other than whole life), then such
premiums shall not exceed one-forth of the aggregate Employer
Contributions plus Forfeitures credited to the Participant's Employer
Account and Matching Account.
13.1(b)(3) COMBINATION. If the life insurance contracts either combine
features of ordinary whole life and other life insurance or consist or
ordinary whole life and other life insurance contracts, the sum of
one-half of the ordinary whole life premiums plus all other life
insurance premiums shall not exceed one-fourth of the aggregate
Employer Contributions plus Forfeitures credited to the Participant's
Employer Account and Matching Account.
13.1(c) OWNER AND BENEFICIARY. The Trustee shall apply for and be the owner
of each life insurance contract held under this Plan and also shall be
named as the beneficiary of each such life insurance contract. In the event
of the Participant's death prior to the date as of which the Participant's
Account becomes payable under the Plan, the Trustee, as beneficiary, shall
pay the entire proceeds of such life insurance contract to the
Participant's Account which shall then be distributed to the surviving
Spouse, or if applicable, to the Participant's Beneficiary in accordance
with Section 10. Under no circumstances shall the Fund retain any part of
the proceeds of any life insurance contracts, In the event of a conflict
between the terms of the Plan and the terms of any life insurance contracts
held under his Plan, the Plan provisions shall control.
13.1(d) ALLOCATIONS. Any dividends or credits earned on a life insurance
contract held under this Plan shall be allocate to the Account of the
Participant for whom the contract was purchased and my be applied to pay
the annual premium on such life insurance contract. The amount of the
annual premium on each such insurance contract shall be charged against the
Account of the insure Participant. The value of any such insurance contract
shall be deemed to be zero for the purposes of allocating the Employer
Contribution, Forfeitures or the Fund Earnings for any Plan Year as
provided in Section 6.
13.1(e) DISTRIBUTION TO PARTICIPANT. Subject to Section 10, JOINT AND
SURVIVOR ANNUITY REQUIREMENTS, the life insurance contracts held as part of
a Participant's Account shall be distributed in kind to the Participant
upon retirement or other termination of employment as an Employee for
reasons other than death (1) if such Account is completely nonforfeitable
or (2) if the case surrender value of such contracts is equal to or less
than the nonforfeitable portion of the Participant's Account. If neither
one of these conditions is satisfied and the Participant does not elect to
purchase the life insurance contracts under Section 13.1(f), the Trustee
shall surrender such contracts, add the precedes to the Participant's
Account and distribute the nonforfeitable percentage of the Participant's
Account in accordance with Section 10.
13.1(f) TERMINATION OF INSURANCE ELECTION. A Participant may direct the
Trustee to stop making premium payments on a life insurance contract held
as part of the Participant's Account and to surrender such contract or to
sell such contract to the Participant by completing and filing an Election
Form with the Plan Administrator. If the Participant purchases the
contract, he or she shall prepare and deliver to the Trustee all papers
needed to properly effect that purchase and shall pay to the Trustee an
amount equal to the cash surrender value of the contract at the time of the
purchase. The amount paid either by the Participant for the purchase or by
the insurance company in connection with the surrender of a contract shall
be credited to the Participant's Account as of the date payment is made to
the Trustee. A Participant automatically shall be deemed to have directed
the Trustee to stop premium payments and to surrender a life insurance
contract immediately before a premium due date if the premium due on that
date would exceed the premium payment limits in Section 13.1(b).
13.2 INDIVIDUALLY DIRECTED INVESTMENTS.
13.2(a) GENERAL.
13.2(a)(1) STANDARD OPTION. No Participant or Beneficiary may direct
the investment of such individual's Account.
13.2(a)(2) ALTERNATIVE. If so specified in the Adoption Agreement, a
Participant or a Beneficiary may elect how such individual's Account
shall be invested between the investment alternatives available under
the Plan from time to time. The Plan Administrator shall furnish to
each Participant and Beneficiary sufficient information to make
informed decisions with regard to investment alternatives and, if this
Plan is intended to satisfy ERISA Section 404(c), information which
satisfies the requirements of the regulations under ERISA Section
404(c). An individual's investment direction shall apply
(i) STANDARD OPTION - to the individual's entire Account or
(ii) ALTERNATIVE - only to the potion of the individual's Account
specified in the Adoption Agreement.
13.2(b) ELECTION RULES. The Plan Administrator form time to time shall
establish and shall communicate in writing to such individuals such
reasonable restrictions and procedures for making individual investment
elections as the Plan Administrator deems appropriate under the
circumstances for the proper administration of this Plan. Such restrictions
and procedures shall be applied on a uniform and nondiscriminatory basis to
all similarly situated individuals and, if this Plan is intended to satisfy
ERISA Section 404(c), shall be in accordance with the regulations under
ERISA Section 404(c).
13.2(c) NO ELECTION. The Account of an individual for whom no investment
election is in effect under this Section 13.2, either because such
individual failed to make a proper election or terminated an election under
this Section 13.2, shall be invested as designated by the Plan
Administrator.
13.3 PARTICIPANT LOANS. This Section 13.3 shall apply only if the Employer
specifies in the Adoption Agreement that loans shall be permitted. However, if
loans are not permitted in the Adoption Agreement, any outstanding loans made
under the terms of the Pre-Existing Plan shall be subject to this Section 13.3.
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13.3(a) ADMINISTRATION AND PROCEDURES. The Plan Administrator shall
establish objective nondiscriminatory written procedures for the
administration of the loan program under this Section 13.3 (which written
procedures, together with any written amendments to such procedures, hereby
are expressly incorporated by reference as a part of this Plan), including,
but not limited to,
13.3(a)(1) the class of Participants and Beneficiaries who are
eligible for a loan;
13.3(a)(2) the identity of the person or position authorized to
administer the loan program;
13.3(a)(3) the procedures for applying for a loan;
13.3(a)(4) the basis on which loans will be approved or denied;
13.3(a)(5) the limitations, if any, on the types and amounts of loans
offered;
13.3(a)(6) the procedures for determining a reasonable rate of
interest;
13.3(a)(7) the types of collateral which may be used as security for a
loan; and
13.3(a)(8) the events constituting default and the steps that will be
taken to preserve Plan assets in the event of such default.
13.3(b) NO LOANS TO CERTAIN OWNERS AND FAMILY MEMBERS. No loan shall be
made under this Plan to a Participant or Beneficiary who is
13.3(b)(1) an Owner-Employee,
13.3(b)(2) an employee or officer of an Employer or an Affiliate which
is an electing small business corporation within the meaning if Code
Section 1361 ("S Corporation") who owns (or is considered to own
within the meaning of Code Section 318(a)(1)) on any day during any
taxable year of such corporation for which it is an S Corporation more
than 5% of the outstanding stock of such corporation, or
13.3(b)(3) a member of the family (as defined in Code Section
267(c)(4)) of a Participant or Beneficiary described in clause (1) or
(2).
13.3(c) GENERAL CONTRIBUTIONS. If loans are made available after October
18, 1989 to any Participant or Beneficiary who is a "party in interest" (as
defined in ERISA Section 3(14)) with respect to the Plan, then loans shall
be made available to all Participants and Beneficiaries who are parties in
interest with respect to the Plan. All loans which are made under this Plan
shall comply with the following requirements under Code Section 4975(d)(1)
and ERISA Section 408(b)(1):
13.3(c)(1) such loans shall be made available to Participants and
Beneficiaries who are eligible for a loan on a reasonable equivalent
basis;
13.3(c)(2) such loans shall not be made available to Highly Compensated
Employees in an amount greater than the amount made available to other
Employees;
13.3(c)(3) such loans shall be made in accordance with specific
provisions regarding such loans set forth in the Plan and the written
procedures described in Section 13.3(a);
13.3(c)(4) such loans shall bear a reasonable rate of interest; and
13.3(c)(5) such loans shall be adequately secured.
13.3(d) OTHER CONDITIONS. All loans made under this Plan shall be subject
to the following conditions:
13.3(d)(1) If the loan is secured by any portion of the Participant's
Account and Section 10.5 does not apply to any portion of the
Participant's Account, the Participant's Spouse, if any, must consent
in writing to the granting of such security interest or to any increase
in the amount of security no earlier than the beginning of the 90 day
period before such loan is made; provided
(i) such consent must be in writing before a notary public and
must acknowledge the effect of such loan;
(ii) such consent shall be irrevocable and shall be binding
against the person, if any, identified as the Participant's Spouse
at the time of such consent and any individual who may
subsequently become the Participant's Spouse;
(iii) an new consent shall be required in the event of any
renegotiation, extension, renewal, or other revision of such a
loan; and
(iv) if a valid spousal consent has been obtained, then,
notwithstanding any other provision of this Plan, the portion of
the Participant's vested Account balance used as a security
interest held by the Plan by reason of a loan outstanding to the
Participant shall be taken into account for purposes of
determining (and may reduce) the amount of the Account balance
payable at the time of death or distribution, but only if the
reduction is used as repayment of the loan. If less than 100% of
the Participant's vested Account balance (determined without
regard to the preceding sentence) is payable to the surviving
Spouse, then the vested Account balance shall be adjusted by first
reducing the vested Account balance by the amount of the security
used as repayment of the loan, and then determining the benefit
payable to the surviving Spouse.
13.3(d)(2) The loan shall provide for the repayment of principal and
interest in substantially level installments with payments no less
frequently than quarterly over a period of 5 years of less unless such
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loan is classified as a "home loan" (as described in Code Section
72(p));
13.3(d)(3) If the loan is secured by any portion of the Participant's
Account, such Account balance shall not be reduced as a result of a
default until a distributable event occurs under the Plan; and
13.3(d)(4) The Participant or Beneficiary shall agree to such other
terms and conditions as are required under the written procedures
described in Section 13.3(a).
13.3(e) CREDITING OF LOAN PAYMENTS.
13.3(e)(1) ACCOUNT ASSET (STANDARD OPTION). The loan to a Participant
whose loan request is granted under this Section 13.3 shall be made
from, and shall be an asset of, the Participant's Account and all
principal and interest payments on such loan shall be credited
exclusively to the Participant's Account.
13.3(e)(2) FUND ASSET (ALTERNATIVE). If the Employer specifies in the
Adoption Agreement that loans shall be treated as an asset of the Fund
or, if any loan which was made under a Pre-Existing Plan was treated as
an asset of the Fund, such loans shall be treated under this Plan as a
general Fund investment and an asset of the Fund, and all principal and
interest payments on such loan shall be credited exclusively to the
Funds as a general Fund investment.
13.3(f) LIMITATIONS ON AMOUNTS. The principal amount of any loan (when
added to the outstanding principal balance of any outstanding loans made
under this Plan or under any other plan which is tax exempt under Code
Section 401 and which is maintained by the Employer or an Affiliate) to the
Participant shall not exceed the lesser of (1) and (2) below:
13.3(f)(1) DOLLAR LIMIT - $50,000 reduced by the excess, if any, of
(i) the highest outstanding principal balance of previous loans to
the Participant form the Plan (and any other plan maintained by
the Employer or an Affiliate) during the one year period ending
immediately before the date such current loan is made, over
(ii) the current outstanding principal balance of such previous
loans on the date such current loan is made, or
13.3(f)(2) ACCOUNT LIMIT -
(i) STANDARD OPTION - 50% of the nonforfeitable interest in the
Participant's Account at the time the loan is made or
(ii) ALTERNATIVE - if so specified in the Adoption Agreement, the
greater of $10,000 or the amount specified in Section
13.3(f)(2)(i), but no event more than the nonforfeitable interest
in the Participant's Account.
An assignment or pledge of any portion of the Participant's interest in the
Plan and a loan, pledge or assignment with respect to any insurance
contract purchased under the Plan shall be treated as a loan for purposes
of the limitations in this Section 13.3(f).
13.3(g) FAILURE TO REPAY. If (1) the terms of the loan provide that it
shall become due and payable in full if the Participant's or Beneficiary's
obligation to repay the loan has been discharged through a bankruptcy or
any other legal process or action which did not actually result in payment
in full and (2) such loan is not actually repaid in full, such loan shall
be canceled on the Fund's books and records and the amount otherwise
distributable to such Participant or Beneficiary under this Plan shall be
reduced by the principal amount of the loan plus accrued but unpaid
interest due as determined without regard to whether the loan had been
discharged through a bankruptcy or any other legal process or action which
did not actually result in payment in full. The Plan Administrator shall
have the power to direct the Trustee to take such action as the Plan
Administrator deems necessary or appropriate to stop the payment of an
Account to or on behalf of the Participant who fails to repay a loan
(without regard to whether the obligation to repay such loan had been
discharged through a bankruptcy or any other legal process or action) until
the Participant's Account has been reduced by the principal plus accrued
but unpaid interest due (without regard to such discharge) on such loan or
to distribute the note which evidences such loan in full satisfaction of
that portion of such Account which is represented by the value of such
note. Notwithstanding the foregoing, in the event of default, foreclosure
on the note and execution of the Plan's security interest in the Account
shall not occur until a distributable event occurs under this Plan and
interest shall continue to accrue only to the extent permissible under
applicable law.
13.3(h) DISTRIBUTIONS. In the even the Participant's Account becomes
distributable before the loan is repaid in full, then the vested Account
balance shall be adjusted by first reducing the vested Account balance by
the amount of the security interest in the Account and then determining the
benefit payable. Nothing shall preclude the Trustee form canceling the
Plan's security interest in the Account and distributing the note in lieu
of any other Plan assets in full satisfaction of that portion of the
Participant's Account represented by the value of the outstanding balance
of the loan or the amount which would have been outstanding but for a
discharge in bankruptcy or through any other legal process.
SECTION 14. ADOPTION, AMENDMENT, WITHDRAWAL AND CONVERSION, MERGER, ASSET
TRANSFERS AND TERMINATION
14.1 ADOPTION.
14.1(a) GENERAL. Subject to the terms and conditions of this Plan, the
Trust Agreement and the Adoption Agreement, any sole proprietorship,
partnership or corporation may adopt this Plan by completing and executing
the Adoption Agreement. The Plan as adopted by the Employer shall be
effective for all purposes (other than as a "prototype plan") as of the
Effective Date. However, the status of the
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Plan as a "prototype plan" shall be conditioned upon acceptance of the
Adoption Agreement by the Prototype Sponsor and, upon such acceptance, such
status as a "prototype plan" shall be effective retroactive tot he
Effective Date except as provided in Section 14.4.
14.1(b) PRE-EXISTING PLAN. If this plan is adopted as an amendment and
restatement of a Pre-Existing Plan, (1) the Trust Agreement shall be
substituted for the trust or other funding arrangement under the
Pre-Existing Plan, (2) the assets held under such trust or other funding
arrangement shall become assets of the Fund, (3) an Account shall be
established for each person who is a participant or beneficiary in the
Pre-Existing Plan, and (4) the dollar value assigned to such participant's
or beneficiary's Pre-Existing Plan account or accounts shall be credited to
such person's Account under this Plan (or to one or more subaccounts under
such Account). All optional forms of benefit available under the
Pre-Existing Plan which must be preserved under Code Section 411(d)(6)
shall be available to the Participant under his Plan. Further, such
optional forms shall be described in the Adoption Agreement and shall apply
to the Participant's entire Account balance. Notwithstanding the foregoing,
if the Employer so specifies in the Adoption Agreement and separately
accounts for the benefits attributable to the Pre-Existing Plan as describe
in Section 14.5(c) or, if applicable, Section 10.5, the optional forms
which must be preserved may be limited to such separate accounts.
14.1(c) PARTICIPATING AFFILIATES. If this Plan is adopted as a standardized
Plan, each Affiliate shall automatically become a Participating Affiliate
effective as of the later of the Effective Date or the date such entity
first becomes an Affiliate. If this Plan is adopted as a nonstandardized
Plan, an Affiliate of the Employer may adopt the Employer's Plan effective
as of any date on or after the Effective Date. An Affiliate's execution of
the Adoption Agreement (or a separate signature page to the Adoption
Agreement) shall evidence the Participating Affiliate's adoption of the
Plan and the effective date of such adoption. In adopting this Plan, each
Participating Affiliate is deemed to have authorized the Employer under
this Section 14 and the power to enter into such agreements with the
Trustee or others as may be necessary or appropriate under the Plan.
14.2 AMENDMENT.
14.2(a) PROTOTYPE SPONSOR. Subject to the restrictions of Section 14.3, the
Prototype Sponsor shall have the right at any time and from time to time to
amend this Plan in any respect whatsoever in writing. To the extent
required under the procedures and rules in effect for master and prototype
plan at the time of any such amendment, notice of such amendment shall be
given to the Employer by the Prototype Sponsor as soon as practicable under
the circumstances.
14.2(b) EMPLOYER. Subject to the restrictions of Section 14.3, the Employer
shall have no right to amend this Plan except (1) by entering into a new
Adoption Agreement with the Prototype Sponsor, (2) by adding such language
to the Adoption Agreement as is necessary to allow the Plan to continue to
satisfy the requirements of Code Section 415 or Code Section 416 because of
the required aggregation of multiple plans, (3) by adopting certain model
amendments published by the Internal Revenue Service which specifically
provide that such adoption would not cause the Plan to be treated as an
individually designed plan, or (4) by withdrawing this Plan as a prototype
and converting it into an individually designed plan as provided in Section
14.4.
14.3 CERTAIN AMENDMENT RESTRICTIONS.
14.3(a) GENERAL. No amendment to the Plan shall be made which would (1)
deprive a Participant of the nonforfeitable percentage of his or her
Account balance accrued to the later of the effective date of the amendment
or the date the amendment is adopted, or (2) decrease a Participant's
Account balance or eliminate an optional form of benefit except to the
extent permissible under Code Section 412(c)(8), Section 401(a)(4) and
Section 411(d)(6) and the regulations under those sections.
14.3(b) CHANGE IN SERVICE CALCULATION METHOD. If an amendment changes the
method of calculating service, each Employee who had any service credit
under such prior method shall be credited with any service for any
computation period during which such amendment was effective in accordance
with the rules in Section 3.
14.3(c) CHANGE IN VESTING SCHEDULE. If an amendment directly or indirectly
affects the computation of a Participant's nonforfeitable percentage of his
or her Account or if the Plan's vesting schedule changes as a result of a
change in the Plan's status as a Top-Heavy Plan (as described in
Section 12.4), each Participant with at least 3 years of service with the
Employer an Affiliate may elect, within a reasonable period after the
adoption of the amendment, to have the nonforfeitable percentage of his or
her Account computed under this Plan without regard to such amendment. In
the case of a Participant who does not have at least one Hour of Service in
any Plan Year beginning after December 31, 1988, the preceding sentence
shall be applied by substituting 5 years of service for 3 years of service.
The period during which the election may be made shall commence with the
date the amendment is adopted and shall end on the later of
14.3(c)(1) 60 days after the amendment is adopted;
14.3(c)(2) 60 days after the amendment becomes effective; or
14.3(c)(3) 60 days after the Participant is issued written notice of
the amendment by the Plan Administrator.
Furthermore, if an amendment changes the Plan's vesting schedule, the
nonforfeitable percentage (determined as of the later of the date the
amendment is adopted or the date it becomes effective) of the
employer-derived Account balance of each Employee who is a Participant as
of such date shall not be less than the percentage computed under the Plan
without regard to such amendment.
14.4 WITHDRAWAL AS A PROTOTYPE AND CONVERSION TO INDIVIDUALLY DESIGNED PLAN.
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14.4(a) VOLUNTARY CONVERSION. The Employer may voluntarily withdraw this
Plan as a "prototype plan" and convert it to an individually designed plan
by written notice filed with the Trustee and the Prototype Sponsor. For
purposes of this Section 14.4, such withdrawal shall be effective with
respect to the Employer's plan and the Trustee as of the effective date of
such withdrawal, but such withdrawal shall not relieve the Employer of any
responsibilities or liabilities to the Prototype Sponsor until 60 days
after the date the Prototype Sponsor receives written notice of such
withdrawal unless the Prototype Sponsor agrees in writing to an earlier
effective date for such withdrawal.
14.4(b) INVOLUNTARY CONVERSION. The Employer shall be deemed to have
withdrawn this Plan as a "Prototype plan" and converted it to an
individually designed plan effective as of the earlier of the date
14.4(b)(1) the Internal Revenue Service or a court determines that this
Plan fails to meet the requirements of Code Section 401;
14.4(b)(2) the Trustee ceases to maintain a brokerage account for the
Plan with the Prototype Sponsor or with an approved subsidiary of the
Prototype Sponsor;
14.4(b)(3) the Prototype Sponsor notifies the Employer in writing that
the Prototype Sponsor for reason sufficient to the Prototype Sponsor
has terminated its sponsorship of its prototype plan program or of this
Plan for the Employer; or
14.4(b)(4) the Employer amends any provision of this Plan or the
Adoption Agreement (other than in accordance with Section 14.2(b)(1)
through (3)) including an amendment because of a waiver of the minimum
funding requirement under Code Section 412(d).
14.4(c) EFFECT OF WITHDRAWAL AND CONVERSION. If this Plan is withdrawn as a
prototype and converted to an individually designed Plan under this Section
14.4, the Employer as of the effective date of such withdrawal shall assume
the right and responsibility to amend the Plan under Section 14.2(a) and
thereafter only the Employer shall make amendments to this Plan; provided,
(1) no such amendment shall affect the Trustee's rights or duties under his
Plan without the Trustee's prior written consent and (2) any such amendment
shall be subject to the restrictions of Section 14.3.
14.5 MERGER, CONSOLIDATION OR ASSET TRANSFERS.
14.5(a) GENERAL. No amendment to the Plan shall be made which would (1)
deprive a Participant of the nonforfeitable percentage of his or her
Account balance accrued to the later of the effective date of the amendment
or the date the amendment is adopted, or (2) decrease a Participant's
Account balance or eliminate an optional form of benefit except to the
extent permissible under Code Section 412(c)(8), Section 401(a)(4) and
Section 411(d)(6) and the regulations under those sections.
14.5(b) AUTHORIZATION. The Plan Administrator may authorize the Trustee to
accept a transfer of assets form or transfer Fund assets to the trustee,
custodian or insurance company of any other plan which satisfies the
requirements of Code Section 401(a) in connection with a merger or
consolidation with, or other transfer of assets and liabilities to or from
any such plan, provided that the transfer will not affect the qualification
of this Plan under Code Section 401(a) and the assets to be transferred are
acceptable to the Trustee.
14.5(c) SEPARATE ACCOUNT. The Plan Administrator may establish separate
bookkeeping accounts for any assets transferred to the Trustee under this
Section 14.5 and shall establish such separate bookkeeping accounts if
required under this Plan. If separate accounts are maintained with respect
to transferred assets, no contributions or Forfeitures under this Plan
shall be credited to such separate accounts, but such accounts shall share
in the Fund Earnings on the same basis as each other Account under Section
6.2. Any individual for whom an Account is established under this Section
14.5 shall become a Participant in this Plan as of the effective date of
the merger, consolidation or asset transfer; however, no contributions
shall be made by or on behalf of such individual under this Plan unless
such individual is otherwise entitled to such contributions under the terms
of this Plan.
14.5(d) CODE Section 411(D)(6) PROTECTED BENEfits. All optional forms of
benefit available under the transferor plan which must be preserved under
Code Section 411(d)(6) shall be available to the Participant under this
Plan unless such transfer meets the requirements of Code Section 414(I) and
the Participant has made an elective transfer which satisfies the
requirements set forth in Q&A-3(b) of Section 1.411(d)-4 of the Federal
Income Tax Regulations. Further, such optional forms shall be described in
the Adoption Agreement and, generally, shall apply to the Participant's
entire Account balance. Notwithstanding the foregoing, if the Employer so
specifies in the Adoption Agreement and separately accounts for such
transferred assets, the optional forms which must be preserved may be
limited to such separate account.
14.6 TERMINATION.
14.6(a) RIGHT TO TERMINATE. The Employer may terminate or partially
terminate this Plan or discontinue contributions to this Plan at any time
by written action of the Board filed with the Trustee and the Prototype
Sponsor. The Employer reserves the right to terminate the participation in
this Plan by any Participating Affiliate at any time by written action.
Furthermore, a Participating Affiliate's Participation in this Plan
automatically shall terminate if (and at such time as) its status as an
Affiliate terminates for any reason whatsoever (other than through a merger
or consolidation into another Participating Affiliate). However, a
Participating Affiliate's termination of participation in this Plan shall
not be deemed to be a termination or partial termination of the Plan except
to the extent required under the Code. Upon complete termination of this
Plan, any unallocated amounts (other than amounts in Code Section 415
suspense account described in Section 7.2(b)) shall be allocated in
accordance with the Plan terms but, if the Plan terms do not address the
allocation of such amounts, they shall be allocated in a nondiscriminatory
manner prior to distribution of Plan assets.
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14.6(b) FULL VESTING UPON TERMINATION. If this Plan is terminated or
partially terminated under this Section 14.6 or if there is a complete
discontinuance of contributions under this Plan, the Account of each
affected Employee of the Employer or an Affiliate shall become
nonforfeitable on the effective date of such termination or partial
termination or complete discontinuance of contributions, as the case may
be. In the event of a complete termination of this Plan or a complete
discontinuance of contributions, each other Account (except to the extent
otherwise nonforfeitable under the terms of this Plan) shall become a
Forfeiture and shall be allocated as such under Section 6.3 as of the
effective date of such complete termination or complete discontinuance as
if such date was the last day of a Plan Year.
SECTION 15. ADMINISTRATION
15.1 NAMED FIDUCIARIES. The Plan Administrator and the Employer (if the Plan
Administrator is not he Employer) shall be the Named Fiduciaries responsible to
the extent of their powers and responsibilities assigned in the Plan for the
control, management and administration of the Plan. The Plan Administrator, the
Employer and the Trustee (other than Smith Barney Shearson Trust Company) shall
be the Named Fiduciaries responsible to the extent of their respective powers
and responsibilities assigned to them in the Trust Agreement for the
safekeeping, control, management, investment and administration of the assets of
the Fund. Any power or responsibility for the control, management or
administration of the Plan or the Fund which is not expressly assigned to a
Named Fiduciary under the Plan or the Trust Agreement, or with respect to which
the proper assignment is in doubt, shall be deemed to have been assigned to the
Employer as a Named Fiduciary. One Named Fiduciary shall have no responsibility
to inquire into the acts and omissions of another Named Fiduciary in the
exercise of powers or the discharge of responsibilities assigned to the Employer
as a Named Fiduciary. One Named Fiduciary shall have no responsibility to
inquire into the acts and omissions of another Named Fiduciary in the exercise
of powers or the discharge of responsibilities assigned to such other Named
Fiduciary under the Plan or the Trust Agreement. Any person may serve in more
than one fiduciary capacity under the Plan or the Trust Agreement and a
fiduciary may be a Participant provided such individual otherwise satisfies the
requirements of Section 4.
A Named Fiduciary, by written instrument filed by the Plan Administrator with
the records of the Plan, may designate a person who is not a Named Fiduciary to
carry out any of its responsibilities under the Plan or Trust Agreement, other
than the responsibilities of the Trustee for the safekeeping, control,
management, investment and administration of the assets of the Fund, except to
the extent the Trustee's responsibility for investment decisions is delegated to
the Employer, the Plan Administrator, or an investment manager.
15.2 ADMINISTRATIVE POWERS AND DUTIES. Except to the extent expressly reserved
under the Plan or the Trust Agreement to the Employer, the Board, or the
Trustee, the Plan Administrator shall have the exclusive responsibility and
complete discretionary authority to control the operation, management and
administration of the Plan, with all powers necessary to enable it properly to
carry out such responsibilities, including (but not limited to) the power to
construe the Plan, the related Adoption Agreement, and the Trust Agreement, to
determine eligibility for benefits and to resolve all interpretative, equitable
or other questions that arise under the Plan or the Trust Agreement. The
decisions of the Plan Administrator on all matters within the scope of its
authority shall be final and binding. To the extent a discretionary power or
responsibility under the Plan or Trust Agreement is expressly assigned to a
person other than the Plan Administrator, such person shall have complete
discretionary authority to carry out such power or responsibility and such
person's decisions on all matters within the scope of such person's authority
shall be final and binding.
15.3 AGENT FOR SERVICE OF PROCESS. The agent for service of process for this
Plan shall be the person who is identified as the agent for service of process
in the summary plan description for this Plan. Neither the Prototype Sponsor nor
any of its affiliates shall be the agent for service of process for the Plan.
15.4 REPORTING AND DISCLOSURE. All records regarding the operation, management
and administration of this Plan shall be maintained by the Plan Administrator.
The Plan Administrator shall satisfy any federal or state requirement to report
and disclose any information regarding this Plan to any federal or state
department or agency, or to any Participant or Beneficiary.
SECTION 16. MISCELLANEOUS
16.1 SPENDTHRIFT CLAUSE AND QUALIFIED DOMESTIC RELATIONS ORDERS. Except to the
extent permitted by law, no Account, benefit, payment or distribution under this
Plan or Trust Agreement shall be subject to attachment, garnishment, levy,
execution or any claim or legal process of any creditor of a Participant or
Beneficiary, and no Participant or Beneficiary shall have any right to alienate,
commute, anticipate, or assign all or any part of such individual's Account,
benefit, payment or distribution under this Plan or Trust Agreement. The
preceding sentence also shall apply to the creation, alienation, assignment, or
recognition of a right to any benefit payable with respect to a Participant
pursuant to a domestic relations order unless such order is determined to be a
qualified domestic relations order ("QDRO") within the meaning of Code Section
414(p) and such order is entered on or after January 1, 1985. The Plan
Administrator shall establish uniform and nondiscriminatory procedures regarding
the determination of whether a domestic relations order constitutes a QDRO, the
timing of distributions made pursuant to a QDRO and the treatment of any
separate account established under this Plan pursuant to a QDRO. Unless
otherwise expressly specified in such procedures, (1) the Plan Administrator
shall treat a domestic relations order entered before January 1, 1985 as a QDRO
in accordance with Code Section 414(p) and (2) a distribution may be made to an
alternate payee pursuant to a QDRO prior to the earliest date that a
distribution could be made to a Participant under the terms of this Plan and
prior to a Participant's "earliest retirement age" under Code Section 414(p).
The determinations and the distributions made by, or at the direction of, the
Plan Administrator under this Section 16.1 shall be final and binding on the
Participant and on all other persons interested in such order.
16.2 BENEFITS SUPPORTED ONLY BY TRUST FUND. Any person having any claim for any
benefit under this Plan shall look solely to the assets of the Fund for the
satisfaction of that claim. In no event shall the Prototype Sponsor, the
Trustee, the Plan
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Administrator, the Employer or a Participating Affiliate or any of their
employees, officers, directors or their agents be liable in their individual
capacities to any person whomsoever for the payment of any benefits under this
Plan.
16.3 DISCRIMINATION. The Plan Administrator shall administer the Plan in a
manner which it deems equitable under the circumstances for all similarly
situated Employees, Participants, Spouses and Beneficiaries; provided, the Plan
Administrator shall not permit discrimination of favor of Highly Compensated
Employees of the Employer or any Participating Affiliate which would be
prohibited under Code Section 401(a).
6.4 CLAIMS. Any payment to a Participant or Beneficiary or to the legal
representative or heirs-at-law of any such person made in accordance with the
provisions of this Plan shall to the extent of such payment be in full
satisfaction of all claims under this Plan against the Trustee, Plan
Administrator, a Named Fiduciary, the Employer and any Participating Affiliate,
any of whom may require such person, such person's legal representative or
heirs-at-law as a condition precedent to such payment, to execute a receipt and
release in such form as shall be determined by the Trustee, Plan Administrator,
a Named Fiduciary, the Employer or a Participating Affiliate, as the case may
be.
16.5 NONREVERSION. Except as provided in Section 7.2(b) and in this Section
16.5, neither the Employer nor any Participating Affiliate shall have any
present or prospective right, claim, or interest in the Fund or in any Employer
contribution made to the Trustee.
To the extent permitted by the Code and ERISA, the Employer contributions
described in this Section 16.5, less any losses on such contributions, shall be
returned by the Trustee to the Employer or to any Participating Affiliate upon
the written direction of the Plan Administrator in the event that:
16.5(a) an Employer contribution is made by a mistake of fact, provided
such return is effected within one year after the payment of such
contribution;
16.5(b) a final judicial or Internal Revenue Service determination is made
that this Plan fails to satisfy the requirements of Code Section 401 with
respect to its initial qualification (provided, if the Employer is not
entitled to rely on the Prototype Sponsor's opinion letter, the application
for the initial qualification of the Plan is made on or before the date
prescribed by law for filing the Employer's return for the taxable year in
which the Plan is adopted, or such later date as the Secretary of the
Treasury may prescribe), in which event all Employer contributions made
before such judicial or administrative determination (whichever last
occurs) plus any earnings and minus any losses shall be returned within one
year after such determination, all such contributions being hereby
conditioned upon this Plan satisfying all applicable requirements under
Code Section 401 from and after its adoption; or
16.5(c) a deduction for an Employer contribution is disallowed under Code
Section 404, in which event such contribution shall be returned within one
year after such disallowance, all such contributions being hereby
conditioned upon being deductible under Code Section 404.
16.6 EXCLUSIVE BENEFIT. The corpus or income of the Fund shall not be diverted
to or used for any purpose other than the exclusive benefit of Participants or
Beneficiaries.
16.7 EXPENSES. Any expenses of the Fund which are properly allocable to an
individual's Account (including, but not limited to, expenses related to an
individual's investment directions, annuity contract purchases and other
transactional fees for processing distributions) may be charged directly against
such individual's Account if so provided in the administrative procedures
established by the Plan Administrator.
16.8 SECTION 16 OF SECURITIES EXCHANGE ACT OF 1934. If this Plan is invested in
employer securities and this Plan permits employees of the Employer who are
subject to the reporting requirements of Section 16 of the Securities Act of
1934, as amended ("Act") to receive awards, then notwithstanding any other
provision of this Plan, the provisions of this Plan that set forth the formula
or formulas that determine the amount, price or timing of awards to such persons
and any other provisions of this Plan or the type referred to in Section
16b-3(c)(2)(ii) of the Act shall not be amended more than once every six months,
other than to comport with changes in the Code, ERISA, or the rules thereunder.
Further, to the extent required, the employees described in the preceding
sentence shall be subject to such withdrawal, investment and other restrictions
necessary to satisfy Rule 16b-3 under the Act. This Section 16.8 is intended to
comply with Rule 16b-3 under the Act and shall be effective only to the extent
required by such rule and shall be interpreted and administered in accordance
with such rule.
16.9 ARBITRATION. Any claims or controversies with the Prototype Sponsor related
to this Plan are subject to arbitration in accordance with the arbitration
provisions of the Smith Barney Shearson Qualified Retirement Plan and IRA Client
Agreement or any successor to such agreement, which provisions hereby are
expressly incorporated herein by reference.
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PART II
SMITH BARNEY SHEARSON
PROTOTYPE DEFINED CONTRIBUTION
TRUST AGREEMENT
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PART II. SMITH BARNEY SHEARSON
PROTOTYPE DEFINED CONTRIBUTION PLAN TRUST AGREEMENT
SECTION 1. INTRODUCTION AND CONSTRUCTION
1.1 INTRODUCTION. This Trust Agreement is a part of the Smith Barney Shearson
Prototype Defined Contribution Plan and is entered into between the Employer and
the Trustee effective as of the date the Adoption Agreement is executed by the
Employer and the Trustee. If the Plan is adopted as an Amendment and restatement
of a Pre-Existing Plan, this Trust Agreement shall amend and restate the trust
agreement or other funding arrangement for the Pre-Existing Plan.
1.2 DEFINITIONS. The terms in this Trust Agreement which begin with a capital
letter shall have the meanings set forth in Section 2 of the Plan. For purposes
of this Trust Agreement, "SBSTC" shall mean Smith Barney Shearson Trust Company
and any successor in interest to Smith Barney Shearson Trust Company.
1.3 CONTROLLING LAWS. To the extent such laws are not preempted by federal law,
this Trust Agreement shall be construed and interpreted under the laws of the
state specified in the Adoption Agreement; provided, if SBSTC has been appointed
as Trustee, this Trust Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
1.4 CONSTRUCTION. The headings and subheadings in this Trust Agreement have been
inserted for convenience of reference only and are to be ignored in the
construction or its provisions. Wherever appropriate, the masculine shall be
read as the feminine, the plural as the singular, and the singular as the
plural. References in this Trust Agreement to a section (Section ) shall be to a
section in this Trust Agreement unless otherwise indicated. References in this
Trust Agreement to a section of the Code, ERISA or any other federal law shall
also refer to the regulations issued under such section.
The Employer intends that the Plan and this Trust Agreement and the related
Adoption Agreement which are part of the Plan satisfy the requirements for tax
exempt status under Code Section 401(a), Code Section 501(a) and related Code
sections and that the provisions of this Trust Agreement, the Plan and the
related Adoption Agreement be construed and interpreted in accordance with the
requirements of the Code and the regulations under the Code.
Further, except as expressly stated otherwise, no provision of the Plan or this
Trust Agreement or the related Adoption Agreement is intended to nor shall grant
any rights to Participants or Beneficiaries or any interest in the Fund in
addition to those minimum rights or interests required to be provided under
ERISA and the Code and the regulations under ERISA and the Code.
Nothing in the Plan or this Trust Agreement or the related Adoption Agreement
shall be construed to prohibit the adoption or the maintenance of the Plan and
Trust Agreement as an individually designed plan and trust agreement or the
adoption of this Trust Agreement in connection with an individually designed
plan, but in such event, the Employer may not rely on the opinion letter issued
to the Prototype Sponsor and the Prototype Sponsor shall have absolutely no
responsibility for such individually designed plan and trust agreement.
Finally, in the event of any conflict between the terms of the Plan and the
terms of this Trust Agreement or the Adoption Agreement, the terms of the Plan
shall control.
SECTION 2. GENERAL
All the Trustee's rights, power, authorities, duties, and responsibilities of
any kind or description whatsoever respecting the Fund shall be solely and
exclusively as expressly stated in the Plan and in this Trust Agreement. Except
to the extent the Employer or Plan Administrator also is the Trustee for the
Plan, the Trustee shall have no responsibility whatsoever with respect to the
maintenance, operation and administration of the Plan. No right, power,
authority, duty or responsibility of any kind or description whatsoever
respecting the Fund or the maintenance, operation or administration of the Plan
shall be attributed to the Trustee on account of any ambiguity or inference
which might be interpreted by any person to exist in the terms of the Plan or
this Trust Agreement. Finally, if SBSTC is Trustee, any discretionary powers,
duties or responsibilities assigned to the Trustee in this Trust Agreement shall
be exercised or performed by SBSTC only upon the direction of the Plan
Administrator, the Employer or an Investment Manager, and SBSTC shall exercise
no discretion with respect to the investment or management of the Fund except to
the extent that Fund assets are invested in a common or collective group trust
maintained by SBSTC or an affiliate of SBSTC.
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SECTION 3. CONTRIBUTIONS AND TRUST FUND
The Employer and the Trustee shall establish reasonable procedures for making
and accepting contributions to the Fund and any asset transfers pursuant to
Section 9 of this Trust Agreement. The Trustee shall accept any contributions
the Trustee reasonably believes are paid to it in accordance with such
procedures, except that the Trustee may refuse to accept any non-cash
contributions or assets which either are not acceptable to the Trustee or the
acceptance of which the Trustee reasonable believes would constitute a
prohibited transaction under ERISA or the Code. If this Trust Agreement is an
amendment and restatement of a trust agreement or other funding arrangement for
a Pre-Existing Plan, the assets held under such pre-existing trust agreement or
other funding arrangement shall (to the extent acceptable to the Trustee and
permissible under the prohibited transaction rules of ERISA and the Code) be
transferred to the Trustee pursuant to reasonable transfer procedures
established by the Trustee, the Employer and any predecessor trustee, custodian
or insurance carrier and shall become assets of the Fund. The Trustee shall have
no responsibility with respect to such transferred assets except to receive such
assets and to hold and administer the same thereafter in accordance with this
Trust Agreement. The Trustee shall not be responsible for any act or omission of
a predecessor trustee or any other person with respect to assets that are
transferred to the Trustee when the Fund in a continuation of a trust fund or
other funding arrangement under a Pre-Existing Plan and shall not be required to
make any claim or demand against any of such persons unless the Employer
requests in writing that the Trustee make such claim or demand. The Fund shall
consist of all such contributions and assets together with the income or gains
on such contributions and assets, less any payments, distributions, transfers,
assessments and losses from or on such contributions and assets. The Fund shall
be managed and controlled by the Trustee pursuant to the terms of this Trust
Agreement without distinction between principal and income and without liability
for the payment of any interest on such assets. The Trustee shall not be
responsible for the amount or the collection of any contributions to the Fund or
for the determination of the amount or frequency of any contribution required by
the Plan, ERISA or the Code and such responsibilities shall be borne solely by
the Employer and the Participating Affiliates. Further, the Trustee, for
investment purposes, may combine into one fund the Funds created under each Plan
maintained by the Employer and Participating Affiliates and (unless otherwise
specified) all references to the Fund in this Trust Agreement shall be
references to the combined Funds; provided that (a) the Trustee shall maintain
separate books and records of the assets, contributions, distributions and
income or losses allocable to each such Fund and (b) no part of one Fund shall
be used to pay the expenses, benefits or liabilities attributable to any other
Fund.
SECTION 4. MANAGEMENT OF TRUST FUND
4.1 PLAN ADMINISTRATOR. With respect to the Fund, the Plan Administrator shall
have those duties and responsibilities specified in the Trust Agreement, and
additionally, shall have the duty to advise the Trustee and any other person of
such facts and issue such directions as may be required to enable the Trustee
and such other person to execute their duties and responsibilities under this
Agreement.
4.2 TRUSTEE. The Trustee shall have the sole and exclusive power (except as
otherwise provided in this Trust Agreement) in the management and control of the
Fund to do all things and execute such instruments as may be deemed necessary or
proper, including the powers described in this section, all of which may be
exercised without order of or report to any court. To the extent the exercise of
any such power would require the exercise of discretion by SBSTC as the Trustee
(other than the management and control of any assets invested in any common or
collective trust maintained by SBSTC or its affiliates), SBSTC as Trustee shall
exercise such power only in accordance with the specific direction of the Plan
Administrator, the Employer or an Investment Manager.
4.2(a) To sell, exchange, or otherwise dispose of any property at any time
held or acquired by the Fund, at public or private sale, for cash or on
terms, without advertisement, including the right to lease for any term
notwithstanding the period of the Trust Agreement;
4.2(b) To vote in person or by proxy any corporate stock or other security
and to agree to or take, or refrain from taking, any other action necessary
or appropriate for a shareholder or owner in regard to any reorganization,
merger, consolidation, liquidation, bankruptcy or other procedure or
proceeding affecting any stock, bond, note or other property;
4.2(c) To compromise, settle or adjust any claim or demand by or against
the Fund and to agree to any rescission or modification of any contract or
agreement affecting the Fund;
4.2(d) To borrow money, and to secure the same by mortgaging, pledging, or
conveying the property of the Fund;
4.2(e) To deposit any stock, bond or other security in any depository or
other similar institution and to register any stock, bond or other security
in the name of a nominee or in street name provided such securities are
held on behalf
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of the Fund by a bank or trust company, subject to supervision by the
United States or a State, a broker or dealer registered under the
Securities Exchange Act of 1934 ("Act") or a "clearing agency" as defined
in the Act, or their nominees, without the addition of words indicating
that such security is held in a fiduciary capacity, but accurate records
shall be maintained showing that such security is a Fund asset and the
Trustee shall be responsible for the acts of such nominee;
4.2(f) To hold cash in such amounts as may be in its opinion reasonable for
the proper operation of the Fund;
4.2(g) To grant, sell, purchase, or exercise any option of any kind or
description whatsoever to purchase or sell any security or other property
which is a permissible investment under this Section 4(b), provided the
Trustee in no event shall grant or sell any option under which any person
can require the Fund to sell any security or other property which the Fund
at the time of such grant or sale does not hold in an amount sufficient to
cover such option and any other outstanding option granted or sold by the
Trustee, and the Trustee in no event shall dispose of any such security or
other property covering any such option until such option is exercised or
otherwise expires;
4.2(h) To grant, sell, purchase, or exercise any option of any kind or
description whatsoever to purchase or sell any security or other property
which is a permissible investment under this Section 4(b), provided the
Trustee in no event shall grant or sell any option under which any person
can require the Fund to sell any security or other property which the Fund
at the time of such grant or sale does not hold in an amount sufficient to
cover such option and any other outstanding option granted or sold by the
Trustee, and the Trustee in no event shall dispose of any such security or
other property covering any such option until such option is exercised or
otherwise expires;
4.2(i) To invest all, or any part, of the assets of the Fund in any common,
collective or group trust fund maintained under Code Section 584 or Revenue
Ruling 81-100, 1981-1 C.B. 326 exclusively for the investment of the assets
of tax exempt pension and profit sharing plans, the provisions of which
upon such investment shall automatically be adopted and made a part of this
Trust Agreement for the period such investment is made in such common,
collective or group trust fund; provided, if SBSTC is the Trustee,
4.2(i)(1) the Trustee shall, upon receipt of written investment
directions, invest some or all of the Fund in one or more collective
trust funds (including, without limitation, any collective trust fund
maintained by the Trustee or by any affiliate of the Trustee) that are
exempt from taxation under Code Section 501(a);
4.2(i)(2) any such investment shall be subject to all the provisions of
the declaration of trust creating such collective trust fund which is
adopted in its entirety as an integral part of the Plan and of this
Trust Agreement;
4.2(i)(3) the Employer, Plan Administrator or Investment Manager shall
not have any right to vote or otherwise in any manner control the
operations and management of any such collective trust fund, the
operation of any party to any such collective trust fund, or any
beneficiary of any such collective trust fund;
4.2(i)(4) the Trustee (or its affiliate) is authorized to utilize
investment advice received from investment advisors for any collective
trust fund maintained by the Trustee (or its affiliate) including,
without limitation, such advice received from [SLH Capital Management
and SLH Asset Management, each of which is a division of] an affiliate
of the Trustee, and to utilize the brokerage services of the Prototype
Sponsor, an affiliate of the Trustee; and
4.2(i)(5) the Employer, Plan Administrator or Investment Manager, as
applicable, shall determine, prior to any direction by either of them
to invest the Fund in any such collective trust fund, that the services
provided to the Plan through the collective trust fund including,
without limitation, any investment advisory services provided to the
Trustee (or its affiliate) by [SLH Capital Management or SLH Asset
Management] and brokerage services provided by the Prototype Sponsor
are (A) necessary to the operation of the Plan, (B) furnished under a
declaration of trust which is reasonable and (C) furnished for
reasonable compensation;
4.2(j) To purchase, hold, sell, surrender or distribute any investment
contract, life insurance contract or annuity contract as directed by a
Participant or the Plan Administrator in accordance with the Plan;
4.2(k) To make a participant loan as directed by the Plan Administrator;
and
4.2(l) To make such other investments as the Trustee in its discretion
shall deem best or if SBSTC is the Trustee or if the Trustee is subject to
the direction of another person, as directed by someone other than the
Trustee, without
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regard to any law now or hereafter in force (other than ERISA) limiting the
investments of trustees or other fiduciaries.
The Trustee shall not be required to make any inventory or appraisal or report
to any court, nor to secure any order of the court for the exercise of any power
contained in this Trust Agreement, and shall not be required to give bond
(except as required by ERISA).
Notwithstanding the foregoing, if SBSTC is the Trustee, SBSTC shall invest all
assets of the Fund which are to be invested on an interim basis pending
reinvestment, distribution or other disbursement either (1) in depository
accounts bearing a reasonable rate of interest which are maintained by SBSTC or
by any affiliate of SBSTC or (2) in commingled short-term investment funds which
are maintained by SBSTC or by any affiliate of SBSTC, in which event the
provisions of Section 4(b)(9) of this Trust Agreement shall apply.
Except as agreed to in writing by the Trustee and the Employer, the Trustee
shall not be liable and shall be indemnified and held harmless by the Employer
for any liability, loss, damage, expense, assessment or other cost of any kind
or description whatsoever, which the Trustee incurs as a result of or arising
out of (1) any action taken at the direction of the Employer, the Plan
Administrator or an Investment Manager, (2) any failure to act if, under the
terms of this Trust Agreement, action can be taken only after receipt from the
Employer, the Plan Administrator or an Investment Manager of specific
directions, (3) any action or failure to act based on advice of legal counsel to
the Employer or the Plan Administrator, or (4) any failure to act pending the
receipt of direction from the Employer, the Plan Administrator or an Investment
Manager, when the Trustee has made a written request for such direction,
provided such action or failure to act is not attributable to fraud, misconduct,
negligence or error by the Trustee. Further, if SBSTC is the Trustee, SBSTC may
from time to time request the advice of counsel on any legal matter, including
the interpretation of the Plan and this Trust Agreement, and shall be
indemnified and held harmless for any and all liability, loss, damage, expense,
assessment or other cost of any kind or description resulting from or on account
of its services as Trustee under the Plan, including, but not limited to, any
co-fiduciary liability under ERISA Section 405 and any liability, damage,
expense, assessment or other cost arising out of its actions in accordance with
advice of counsel. Except as agreed to in writing by the Trustee and the
Employer, the provisions of this paragraph shall survive the term of this Trust
Agreement and may not be amended by any person or entity other than the
Prototype Sponsor or terminated except with the consent of the Trustee.
4.3 INVESTMENT MANAGER. The Plan Administrator as a Named Fiduciary at any time
may appoint in writing a person, or more than one person, including, subject to
Section 4(i) of this Trust Agreement, the Prototype Sponsor or any of its
affiliates, who either (1) is registered as an investment adviser under the
Investment Advisers Act of 1940 ("Act"), (2) is a bank, as defined in the Act,
or (3) is an insurance company which, within the meaning of ERISA Section 3(38),
is qualified to manage, acquire and dispose of the assets of an employee benefit
plan under the laws of more than one state, as an investment manager pursuant to
ERISA Section 3(38) ("Investment Manager") for all of the Fund or for a
specified portion of the Fund allocated by the Plan Administrator to such
Investment Manager's management account ("Management Account").
The Plan Administrator shall notify the Trustee of such appointment and of the
date such appointment becomes effective, and such Investment Manager shall have
the sole responsibility and duty and the sole power, without prior consultation
with the Board, the Employer, the Plan Administrator, the Trustee, or any other
person, to manage and direct or effect the acquisition and disposition of the
assets of the Fund allocated to such Management Account from the date the
appointment as Investment Manager becomes effective. The Plan Administrator as a
Named Fiduciary also may terminate the appointment of any person as an
Investment Manager and may cause assets of the Fund to be added to or deleted
from any Management Account.
The Investment Manager may exercise his or her power through procedures as
agreed upon with the Trustee which satisfy the requirements of the securities
laws and the rules of the New York Stock Exchange (and any other exchange on
which securities are traded for such manager's Management Account), and the
Trustee shall not be liable in any respect to any person, and shall be
indemnified and held harmless by the Employer, for acting in accordance with
such procedures. Pending receipt of directions from the Investment Manager, any
cash received by the Trustee from time to time for such manager's Management
Account may be retained in the Fund in cash. If an Investment Manager ceases to
have investment responsibility for the Management Account, the Plan
Administrator or the Employer, as authorized in accordance with Section 4(d) of
this Trust Agreement, shall manage such assets in accordance with Section 4(d)
or shall appoint another Investment Manager to manage such assets.
4.4 PLAN ADMINISTRATOR OR EMPLOYER INVESTMENT DIRECTIONS. The Board at any time
may authorize in writing the Plan Administrator or the Employer as a Named
Fiduciary to manage and direct the investment of all or any specified portion of
the assets of the Fund as determined by the Board, and the Board at any time may
modify or terminate such authorization in writing. If SBSTC is appointed as
Trustee, the Employer shall automatically be deemed to be so
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authorized to manage and direct the investment of the entire Fund; provided, the
Employer may specify in the Adoption Agreement that such direction shall be made
by the Plan Administrator. In the even the Plan Administrator or the Employer is
authorized to manage and direct the investment of Fund assets under this Section
4(d), the provisions of Section 4(c) of this Trust Agreement shall apply in all
respects as if the Plan Administrator or the Employer, as applicable, was an
Investment Manager and the portion of the assets subject to such management and
direction was a Management Account.
4.5 PARTICIPANT INVESTMENT DIRECTIONS. If the Plan permits a Participant or a
Beneficiary to direct the investment of such individual's Account, the Plan
Administrator shall direct the Trustee to establish the investment alternatives
designated by the Plan Administrator and to accept directions to invest all or
any specified portion of the Participant's Account among such alternatives. The
Plan Administrator in consultation with the Trustee shall establish such
reasonable rules for effecting the investment elections as the Plan
Administrator deems necessary or appropriate and such rules shall be applied on
a uniform and nondiscriminatory basis to all similarly situated individuals.
Except as required under ERISA, neither the Plan Administrator, the Employer nor
the Trustee shall be responsible for any investment decisions made by a
Participant or a Beneficiary. If a Participant or Beneficiary fails to direct
the investment of the Account, then the Employer or Plan Administrator (as
authorized in accordance with Section 4(d) of this Trust Agreement) shall assume
the investment responsibility for such Account.
4.6 CUSTODIAN. The Trustee (including SBSTC) at any time and from time to time
may appoint one, or more than one, person, including, subject to Section 4(i) of
this Trust Agreement, the Prototype Sponsor or any of its affiliates, to perform
such custodial safekeeping, record keeping, securities execution and other
nondiscretionary functions of the Trustee as the Trustee deems appropriate, and
any person who is appointed to perform a custodial safekeeping function may (in
connection with the performance of that function) hold Fund securities in a
street name, provided that the Trustee shall remain the beneficial owner of all
assets held by such person and such person in no event shall be granted any
discretionary authority in the capacity as a custodian to manage and direct the
acquisition and disposition of Fund assets.
4.7 MULTIPLE TRUSTEES. More than one person can serve at the same time as the
Trustee, including any combination of individuals and banks or similar
institutions, and in the event that more than one person does serve at the same
time as Trustee under the Plan and this Trust Agreement, the references to
"Trustee" in the Plan and this Trust Agreement wherever applicable shall be
deemed to be to "Trustees" and such Trustees may allocate among themselves by
unanimous written consent (signed by all Trustees) such specific Trustee duties,
responsibilities and functions in the management of the Fund and otherwise under
the Plan and this Trustee Agreement as the Trustees deem appropriate under the
circumstances. The Trustees in all unallocated duties, responsibilities and
functions shall act by majority vote at a meeting at which a majority of the
Trustees are present or by unanimous written consent (signed by all Trustees) in
lieu of a meeting. Any person shall be entitled to rely conclusively upon any
written action signed by all Trustees or by any one or more Trustees to whom the
power to take such action has been allocated by unanimous written consent signed
by all Trustees. Finally, the provisions of Section 8 of this Trust Agreement
shall apply to the resignation or removal of any one of the Trustees, provided
that (1) all notices required in such Section 8 also shall be given to any
remaining Trustees, (2) the Employer only shall be required to appoint successor
Trustees upon the resignation or removal of all Trustees then serving, and (3)
the Employer or the remaining Trustees may demand and receive an accounting upon
the resignation or removal of one or more of the Trustees. Notwithstanding the
foregoing, if SBSTC is not the sole Trustee under the Plan, SBSTC shall serve in
a nondiscretionary, custodial capacity only subject to the directions of the
Employer or the Plan Administrator and SBSTC shall have no duties with respect
to assets held by any other person including, without limitation, any other
Trustee for the Fund. Further, the Employer hereby agrees that SBSTC shall not
serve as, and shall not be deemed to be, a co-trustee under any circumstances.
4.8 COMMUNICATIONS. The Employer, the Plan Administrator and each Investment
Manager shall establish with the Trustee such oral, written or electronic
communication procedures (or any combination of such communication procedures)
or such other procedures as such persons and the Trustee deem reasonable and
prudent under the circumstances for the orderly administration of the Fund. The
Trustee and each other person shall be entitled to rely conclusively upon any
and all communication from the Employer, the Plan Administrator and each
Investment Manager reasonably believed to be communicated in accordance with
such established procedures.
If the Trustee receives a direction which in the Trustee's determination is
incomplete, was not communicated in accordance with established procedures or
otherwise cannot reasonably be executed, the Trustee shall promptly inform the
person responsible for such direction and shall take no further action pending
receipt of proper directions from such person.
4.9 PROTOTYPE SPONSOR. Nothing in the Plan or this Trust Agreement shall prevent
the Prototype Sponsor or any of its affiliates from engaging in any transaction
with the Plan or the Fund, provided that such transaction does not (in the
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opinion of the Prototype Sponsor) constitute a "prohibited transaction" under
ERISA Section 406 or Code Section 4975, and the Employer shall provide such
written documentation as the Prototype Sponsor deems necessary or appropriate to
determine that any such transaction would not be a "prohibited transaction."
To the extent that ERISA or a prohibited transaction exemption requires action
by an individual independent of the Plan Sponsor and its affiliates or their
employers, officers and directors, then the Employer, the Plan Administrator, an
Investment Manager, a Participant or a Beneficiary shall have full power and
authority to take action on behalf of the Fund as necessary to satisfy ERISA or
such exemption provided such person otherwise is authorized to act under this
Trust Agreement.
4.10 VOTING OF PROXIES. Except as provided in this Section 4(j), the person with
the responsibility to manage and invest all or a portion of the Fund shall have
the exclusive authority and responsibility for voting proxies with respect to
investments held for such portion of the Fund and the Trustee shall be obligated
to vote such proxies only in accordance with the directions of such person and
shall be precluded from voting such proxies except in accordance with such
directions.
However, the Plan Administrator, as a Named Fiduciary, may reserve to itself the
right to vote proxies with respect to any investments which are otherwise
subject to the management and control of an Investment Manager and, in such
event, the Investment Manger shall be precluded from voting such proxies.
SECTION 5. BENEFIT PAYMENTS
No disbursement from the Fund shall be made by the Trustee for purposes of the
payment of any Plan benefit except on the written direction of the Plan
Administrator, and the Trustee shall have no duty or obligation whatsoever to
inquire as to the accuracy of such direction or its propriety in light of the
provisions of the Plan, ERISA or the Code. Upon written direction (which may be
a continuing direction) from the Plan Administrator as to the name of any person
to whom payment is to be made from the Fund and when such payment is to be made
and the amount and manner of such payment, and consistent with the income tax
withholding requirements, the Trustee shall draw checks, purchase annuity
contracts or distribute other assets from the Fund in the name of the person
designated by the Employer and deliver such checks, contracts or other assets in
such manner and in such amounts and at such times as the Plan Administrator
shall direct or, if appropriate, the Trustee shall make an electronic transfer
to the account of such person designated by the Plan Administrator in such
amounts and at such times as the Plan Administrator shall direct.
If SBSTC in the Trustee, all payments to be paid by means of a check from the
Trustee shall be paid from a non-interest bearing checking account to be
maintained with an affiliate of the Trustee. Prior to executing this Trust
Agreement, the Employer shall determine that such checking account services are
(1) necessary to the operation of the Plan, (2) furnished under an arrangement
which is reasonable and (3) furnished for reasonable compensation.
In the event the Trustee shall deem it necessary to withhold any distribution
pending compliance with legal requirements with respect to probate of wills,
appointment of personal representatives, payment or provision for estate or
inheritance taxes, or for death duties or otherwise, the Trustee shall notify
the Plan Administrator and shall thereafter take no action pending receipt of
the Plan Administrator's instructions to distribute and an agreement from the
Plan Administrator, in form satisfactory to the Trustee, protecting it form any
liability arising out of noncompliance with such requirements.
The Plan Administrator may in its discretion direct, and the Trustee shall make
payment on such direction, that Plan payments be made (1) directly to an
incompetent or disabled person, whether because of minority or mental or
physical disability, (2) to the guardian or to the person having custody of such
person if a court of competent jurisdiction has appointed such guardian or
custodian, or (3) to any person designated or authorized under any state statute
to receive such payments on behalf of such incompetent or disabled person
without further liability either on the part of the Employer, the Plan
Administrator or the Trustee for the amount of such payment to the person on
whose account such payment is made.
In the case of a termination, partial termination, a complete discontinuance of
contributions or the termination of participation by a Participating Affiliate
as described in Section 14.5 of the Plan, the Plan Administrator shall direct
the Trustee precisely as to what action to take and the Trustee (subject to the
terms of this Trust Agreement and the Plan and to such terms and conditions, if
any, as agreed upon between the Plan Administrator and the Trustee) shall follow
such directions.
The Plan Administrator shall determine anticipated liquidity requirements to
meet projected benefit payments for each Plan Year and, if any adjustment from
the practices and policies agreed upon between the Plan Administrator and the
Trustee at the adoption of this Trust Agreement is deemed appropriate, notice of
such adjustment shall be communicated
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by the Plan Administrator in writing as soon as practicable to the Trustee. The
Trustee shall be under no duty to make any such adjustment prior to receiving
such notice.
SECTION 6. VALUATION AND ACCOUNTING BY TRUSTEE
The Trustee as of each Valuation Date shall determine the fair market value of
the assets of the Fund (or, if more than one Fund is combined for investment
purposes, of each such Fund) based upon such reasonable accounting principles,
practices and procedures as the Trustee shall adopt and consistently apply for
this purpose, which determination shall be final and binding. At such times as
agreed upon between the Trustee and the Plan Administrator, the Trustee shall
file with the Plan Administrator a written report setting forth such fair market
value and all investments, receipts and disbursements and other transactions of
the Fund since the date of the last such report.
Upon the expiration of 90 days from the filing of the Trustee's report and
except as provided under ERISA, the Trustee shall be forever relieved and
discharged from any liability or accountability to anyone with respect to the
propriety of its actions or the transactions shown by such report except with
respect to those acts or transactions to which the Plan Administrator or the
Employer shall, within such 90 day period, have filed with the Trustee its
written disapproval, and neither the Plan Administrator nor the Employer nor any
other person shall have the right to demand or be entitled to any further or
different accounting by the Trustee.
SECTION 7. EXPENSES
All reasonable and proper expenses of the Plan and the Fund (within the meaning
of ERISA Section 403(c)(1) and Section 404(a)(1)(A)), including any taxes which
may be levied or assessed against the Trustee on account of the Fund and the
Trustee's compensation as agreed upon from time to time by the Employer and the
Trustee, shall be paid from the Fund unless (a) the payment of such expense
would constitute a "prohibited transaction" within the meaning of ERISA Section
406 or Code Section 4975 or (b) the Employer pays such expenses. Any such
expenses of the Fund which are properly allocable to an individual's Account
(including, but not limited to, expenses related to an individual's investment
directions, annuity contract purchases and other transactional fees for
processing distributions) may be charged directly against such individual's
Account if so provided in administrative procedures established by the Plan
Administrator. No payments shall be made to a Trustee who also receives
full-time pay from the Employer or from a Participating Affiliate except for his
or her benefits, if any, from the Plan and the reimbursement of his or her
reasonable and proper expenses as a Trustee which are not reimbursed by any
other person.
SECTION 8. RESIGNATION OR REMOVAL OF TRUSTEE
The Trustee may resign at any time by delivering its written resignation to the
Employer. The Employer shall within 60 days after receipt of such resignation
appoint a successor trustee in writing (acceptable for this purpose to the
Employer and the successor trustee) delivered to the Trustee and to such
successor trustee. The Employer may remove the Trustee at any time and appoint a
successor trustee or trustees upon 60 days written notice to the Trustee unless
the Trustee agrees to a shorter notice period. In either event, on the
appointment of such successor, the Trustee shall promptly turn over to such
successor all assets held by the Trustee and shall make a final accounting to
the Plan Administrator and the Employer. The successor trustee shall have no
responsibility except to receive such money and property from the Trustee and to
hold and administer the same thereafter in accordance with this Trust Agreement
and shall not be responsible for any act or omission of the Trustee, and shall
not be required to make a claim or demand against the Trustee. Any such
successor trustee shall have and may exercise all the rights, powers, and duties
of the Trustee as fully and to the same extent as if it had originally been
named Trustee herein.
SECTION 9. MERGERS, CONSOLIDATIONS AND ASSET TRANSFERS
The Trustee upon written direction of the Plan Administrator shall transfer and
deliver Fund assets to or accept the transfer to the Fund of assets acceptable
to it from any trustee, custodian or insurance carrier maintaining any
investment medium of a pension or profit sharing plan which is tax exempt under
Code Section 401(a) into which the Plan (or any portion thereof) shall be merged
or consolidated.
In the case of any Plan merger or consolidation with, or transfer of assets or
liabilities to or from, any other employee benefit plan, each person for whom an
Account then is maintained shall be entitled to receive a benefit from such
plan, if it is then terminated, which is equal to or greater than the benefit
such person would have been entitled to receive immediately before such merger,
consolidation or transfer, if the Plan then had been terminated. The Trustee in
connection with either of the above described transfers shall have no liability
or responsibility (1) to determine whether such transfer shall be in conformity
with the provisions of the Plan, any other plan, ERISA or the Code or (2) to
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determine the effect of such transfer upon any Accounts. Any direction of the
Plan Administrator respecting any of the foregoing shall constitute a
certification that the transfer so directed is in conformity with the provisions
of the Plan or any other plan, this Trust Agreement, ERISA and the Code, and the
Trustee shall act in accordance with such direction.
SECTION 10. SINGLE TRUST - SEPARATE FUNDS
The assets of the Fund (or, if more than one Fund is combined for investment
purposes, of each such Fund) shall be held, administered, invested and managed
by the Trustee (except to the extent investment responsibility is allocated to
another person under the terms of this Trust Agreement) consistent with the
terms of this Trust Agreement in all respects as a single trust even though
portions of such assets may be attributable to different employers or may be
allocable to the payment of benefits for different employee groups. The Plan
Administrator shall be responsible to maintain and determine the appropriate
portion of the Fund held in respect of any such group of employees in the event
that such maintenance or determination shall become necessary. The determination
by the Plan Administrator of the portion of the Fund held in respect of any such
employee group shall be final and conclusive upon all persons.
SECTION 11. NAMED FIDUCIARIES AND AMINISTRATION
The Plan Administrator and the Employer (if the Plan Administrator is not the
Employer) shall be the Named Fiduciaries responsible to the extent of their
powers and responsibilities assigned in the Plan for the control, management and
administration of the Plan. The Plan Administrator, the Employer and the Trustee
(other that SBSTC) shall be the Named Fiduciaries responsible to the extent of
their respective powers and responsibilities assigned to them in the Trust
Agreement for the safekeeping, control, management, investment and
administration of the assets of the Fund. Any power or responsibility for the
control, management or administration of the Plan or the Fund which is not
expressly assigned to a Named Fiduciary under the Plan or the Trust Agreement,
or with respect to which the proper assignment is in doubt, shall be deemed to
have been assigned to the Employer as a Named Fiduciary. One Named Fiduciary
shall have no responsibility to inquire into the acts and omissions of another
Named Fiduciary in the exercise of powers or the discharge of responsibilities
assigned to such other Named Fiduciary under the Plan or the Trust Agreement.
Any person may serve in more than one fiduciary capacity under the Plan or the
Trustee Agreement and a fiduciary may be a Participant provided such individual
otherwise satisfies the requirements of Section 4.
A Named Fiduciary, by written instrument filed by the Plan Administrator with
the records of the Plan, may designate a person who is not a Named Fiduciary to
carry out any of its responsibilities under the Plan or Trust Agreement, other
than the responsibilities of the Trustee for the safekeeping, control,
management, investment and administration of the assets of the Fund, except to
the extent the Trustee's responsibility for investment decisions is delegated to
the Employer, the Plan Administrator, or an Investment Manager.
Except to the extent expressly reserved under the Plan or the Trust Agreement to
the Employer, the Board, or the Trustee, the Plan Administrator shall have the
exclusive responsibility and complete discretionary authority to control the
operation, management and administration of the Plan, with all powers necessary
to enable it properly to carry out such responsibilities, including (but not
limited to) the power to construe the Plan, the related Adoption Agreement, and
the Trust Agreement, to determine eligibility for benefits and to resolve all
interpretative, equitable or other questions that arise under the Plan or the
Trust Agreement. The decisions of the Plan Administrator on all matters within
the scope of its authority shall be final and binding. To the extent a
discretionary power or responsibility under the Plan or Trust Agreement is
expressly assigned to a person other than the Plan Administrator, such person
shall have complete discretionary authority to carry out such power or
responsibility and such person's decisions on all matters within the scope of
such person's authority shall be final and binding.
SECTION 12. MISCELLANEOUS
12.1 SPENDTHRIFT CLAUSE AND QUALIFIED DOMESTIC RELATIONS ORDERS. Except to the
extent permitted by law, no Account, benefit, payment or distribution under the
Plan or this Trustee Agreement shall be subject to attachment, garnishment,
levy, execution, or any claim or legal process of any creditor of a Participant
or Beneficiary, and no Participant or Beneficiary shall have any right to
alienate, commute, anticipate, or assign all or any part of such individual's
Account, benefit, payment or distribution under the Plan or this Trust
Agreement. The preceding sentence also shall apply to the creation, alienation,
assignment, or recognition of a right to any benefit payable with respect to a
Participant pursuant to a domestic relations order unless such order is
determined to be a qualified domestic relations order ("QDRO") within the
meaning of Code Section 414(p) and such order is entered on or after January 1,
1985. Notwithstanding the foregoing, the Plan Administrator may treat a domestic
relations order entered before January 1, 1985 as a QDRO in accordance with Code
Section 414(p) and Section 16.1 of the Plan.
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12.2 BENEFITS SUPPORTED ONLY BY TRUST FUND. Any person having any claim for any
benefit under the Plan shall look solely to the assets of the Fund for the
satisfaction of that claim. In no event will the Prototype Sponsor, the Trustee,
the Plan Administrator, the Employer or a Participating Affiliate or any of
their employees, officers, directors or their agents be liable in their
individual capacities to any person whomsoever for the payment of any benefits
under the Plan.
12.3 CLAIMS. Any payment to a Participant or Beneficiary, or to the legal
representative or heirs-at-law of any such person made in accordance with the
provisions of the Plan shall to the extent of such payment be in full
satisfaction of all claims under the Plan against the Trustee, Plan
Administrator, a Named Fiduciary, the Employer and any Participating Affiliate,
any of whom may require such person, such person's legal representative or
heirs-at-law, as a condition precedent to such payment, to execute a receipt and
release in such form as shall be determined by the Trustee, Plan Administrator,
a Named Fiduciary, the Employer or a Participating Affiliate, as the case may
be.
12.4 NONREVERSION. Except as provided in Section 7.2(b) of the Plan and in this
Section 12(d), neither the Employer nor any Participating Affiliate shall have
any present or prospective right, claim, or interest in the Fund or in any
Employer contribution made to the Trustee.
To the extent permitted by the Code and ERISA, the Employer contributions
described in this Section 12(d), less any losses on such contributions, shall be
returned by the Trustee to the Employer or to any Participating Affiliate upon
the written direction of the Plan Administrator in the event that:
12.4(a) an Employer contribution is made by a mistake of fact, provided
such return is effected within one year after the payment of such
contribution;
12.4(b) a final judicial or Internal Revenue Service determination is made
that the Plan fails to satisfy the requirements of Code Section 401 with
respect to its initial qualification (provided, if the Employer is not
entitled to rely on the Prototype Sponsor's opinion letter, the application
for the initial qualification of the Plan is made by the time prescribed by
law for filing the Employer's return for the taxable year in which the Plan
is adopted, or such later date as the Secretary of the Treasury may
prescribe), in which event all Employer contributions made before such
judicial or administrative determination (whichever last occurs) plus any
earnings and minus any losses shall be returned within one year after such
determination, all such contributions being hereby conditioned upon the
Plan satisfying all applicable requirements under Code Section 401 from and
after its adoption; on
12.4(c) a deduction for an Employer contribution is disallowed under Code
Section 404, in which event such contribution shall be returned within one
year after such disallowance, all such contributions being hereby
conditioned upon being deductible under Code Section 404.
The Trustee shall have no obligation or responsibility whatsoever to determine
whether the return of any such Employer contributions is permitted by the Code
or ERISA and shall (to the extent permissible under law) be indemnified and held
harmless by the Employer for acting in accordance with written directions given
by the Plan Administrator pursuant to this Section 12(d).
12.5 EXCLUSIVE BENEFIT. The corpus or income of the Fund shall not be diverted
to or used for any purpose other than the exclusive benefit of Participants or
Beneficiaries.
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SMITH BARNEY PROTOTYPE
STANDARDIZED 401(K) PLAN ADOPTION AGREEMENT #003
NOTE: Under the terms of the Plan, options marked "STANDARD" automatically will
apply unless another option is selected. If additional space is needed to
provide information requested in this Adoption Agreement which contains a
reference to the appropriate Part(s) of the Adoption Agreement.
Capitalized terms refer to defined terms in Plan Document #05. "Section"
refers to sections of Plan Document #05; "Part" refers to provisions in this
Adoption Agreement. The instructions and descriptions in this Adoption
Agreement generally summarize the Plan Document provisions, but the Plan
Document terms will be controlling in the event of any conflict.
I. EMPLOYER INFORMATION.
Name: Hudson Hotels Corporation
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Address: 300 Bausch & Lomb Place
---------------------------------------------------------------------------
Rochester, NY 14604
Taxable Year: 12/31 EIN: 16-1312167
--------------------------- -----------------------------------
II. PLAN INFORMATION.
A. PLAN NAME: Hudson Hotels Corporation Retirement & Savings Plan
-------------------------------------------------------------------
B. PLAN YEAR: the period which ends on 12/31
-------------------------------
C. CONSTRUCTION. Except as provided in Section 1.2, the Plan and the Trust
Agreement will be subject to the laws of the
State of New York
------------------------------------------- -----------------------
D. PLAN ADOPTION. The Plan is hereby adopted as an amendment and restatement of
the Hudson Hotels 401 (K) ("Pre-Existing Plan") which was originally effective
10/1, 1993.
E. EFFECTIVE DATE OF THIS ADOPTION AGREEMENT: 1/1, 1999.
III. ELIGIBILITY AND PARTICIPATION.
A. Eligible Employees. All Employees of the Employer and all Employees of all
Affiliates who satisfy the Participation Requirement generally are eligible to
participate in the Plan except certain nonresident aliens. However,
notwithstanding any contrary language, participation in this Plan by Employees
who are covered by a collective bargaining agreement and the extent of such
participation, if any, will be determined by collective bargaining. [See
Section 2.19].
B. PARTICIPATION REQUIREMENT. In order to participate in this Plan, an Eligible
Employee must: No minimum age or waiting period.
C. Entry Date: 1/1, 4/1, 7/1, 10/1
---------------------
D. Election Not to Participate:
Standard: No Employee or Owner-Employee may elect not to participate in the
Plan.
IV. VESTING.
A. DEATH, DISABILITY OR RETIREMENT.
STANDARD: A Participant's Employer Account will be 100% vested if, while an
Employee, that Participant dies, becomes Disabled, or reaches Normal Retirement
Age or, if applicable, Early Retirement Age.
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B. GENERAL VESTING SCHEDULE. [See Section 8.1 and Section 14.3(c). Generally,
the vesting schedule under this Plan must be at least as favorable at the
completion of each year as the vesting schedule under the Pre-Existing Plan.
The Top-Heavy Vesting Schedule selected in Part XI.A will apply for all Plan
Years in which the Plan is a Top-Heavy Plan. See Section 12.4]
1. MATCHING ACCOUNT.
Grade Vesting.
Years of Service NONFORFEITABLE PERCENTAGE
-------------------------
Less than 1 0%
2 40%
---
3 60% [at least 20%]
---
4 80% [at least 40%]
----
5 100% [at least 60%]
2. EMPLOYER ACCOUNT.
Grade Vesting.
Years of Service NONFORFEITABLE PERCENTAGE
-------------------------
Less than 1 0%
2 40%
---
3 60% [at least 20%]
---
4 80 % [at least 40%]
----
5 100% [at least 60%]
-----
C. Normal Retirement Age.
STANDARD: Age 65
D. Early Retirement Age.
STANDARD: No Early Retirement Age.
V SERVICE FOR PARTICPATION AND VESTING.
A. Method for Crediting Service.
STANDARD: "Hour of Service" method.
a. Crediting Hours. Hours will be credited during each Computation
Period STANDARD: by maintaining records of the actual hours worked.
b. Vesting Computation Period. The Computation Period for vesting
purposes will be STANDARD: the Plan Year
c. Participation Computation Period. The initial Computation Period for
participation purposes will be the 12 month period beginning on the
Participant's hire date. Each subsequent Computation Period after the
initial 12 months of employment will be STANDARD: Plan Years beginning
after the Participant's hire date.
d. Year of Service for Vesting. For vesting purposes, an Employee will
be credited with a Year of Service if, during a Computation Period, the
Employee completes at least STANDARD: 1,000 Hours of Service.
e. Year of Service for Participation. For participation purposes, an
Employee will be credited with a Year of Service
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STANDARD: at the end of the Computation Period in which the Employee
completes at least 1,000 Hours of Service.
Notwithstanding the foregoing, if a partial Year of Service is selected
in Part III.B. no minimum number of Hours of Service will be required.
2. "ELAPSED TIME" method. [See Section 3.2.] For purposes of
determining whether a Participant is entitled to an allocation of
contributions or forfeitures, the Participant will be deemed to have
completed more than 500 Hours of Service in a Plan Year if the Participant
completes the following period of employment in the Plan Year:
STANDARD: more than 91 consecutive calendar days.
B. SPECIAL RULES.
1. VESTING SERVICE EXCLUSIONS. In addition to any service that is
disregarded under the Break in Service rules described below and in Section
3.7(c), the following service will be excluded for vesting purposes:
STANDARD: No other exclusions.
2. PREDECESSOR EMPLOYER SERVICE (VESTING AND PARTICIPATION). Generally,
unless the Employer maintains the plan of a predecessor employer (for example,
an acquired company), service for a predecessor employer will not be credited as
service under this Plan.
Service credit will be given under this Plan for certain predecessor
employers for participation and/or vesting purposes to the extent provided in
Addendum V.B.2.
3. BREAK IN SERVICE RULES. [See Section 3.7 and Section 8.2]
Generally, all service completed before a Break in Service will be credited
upon reemployment. Certain service may be excluded under the following rules:
STANDARD: No Exclusions.
VI. EMPLOYEE CONTRIBUTIONS.
A. ELECTIVE DEFERRALS.
STANDARD: Will be allowed.
Minimum Amount. Not less than 1% of a Participant's Compensation
B. EMPLOYEE CONTRIBUTIONS.
STANDARD: will not be allowed.
C. Election Rules.
STANDARD: If a Participant does not elect to begin Elective Deferrals
or Employee Contributions on the Participant's Entry Date, the Participant may
elect to begin such contributions as of any following pay date. A Participant's
election can be revised (prospectively only) as of any pay date. A Participant
who terminates contributions may elect to resume contributions prospectively as
of any pay date.
D. ROLLOVER CONTRIBUTIONS.
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STANDARD: will be allowed and may be made by
STANDARD: any Eligible Employee.
E. LIMITATIONS.
1. CLAIMS. Claims for a refund of Excess Elective Deferrals must be
made no later than
STANDARD: March 1.
2. DEEMED CLAIMS. Corrections of Excess Elective Deferrals will be made
STANDARD: from this Plan.
3. "GAP PERIOD" Income. The income or loss allocable to the "gap
period" STANDARD: shall not be distributed.
4. HIGHLY COMPENSATED EMPLOYEES. The following special rules in the
temporary Code Section 414(q) regulations and in Code 414(q)(12) will apply:
STANDARD: no special rules.
5. RECHARACTERIZATION. Recharacterization of Excess Contributions as
Employee Contributions STANDARD: will not be allowed.
VII. EMPLOYER CONTRIBUTIONS.
A. MATCHING CONTRIBUTIONS.
1. FORMULA.
Matching Contributions will be made on account of:
Elective Deferrals Under the following formula:
Such percentage of the Participant's contributions as determined by the
Employer in its discretion for each Plan Year.
2. ELIGIBLE PARTICIPANT. The Matching Contribution for any Allocation
Date will be made only for each Participant who makes Elective Deferrals or
Employee Contributions, as applicable, during the period ending on the
Allocation Date and who satisfies all of the following requirements:
STANDARD: no additional requirements.
3. ALLOCATION DATE. Matching Contributions will be made and
allocated as of STANDARD: the last day of each Plan Year.
4. FORFEITURES. Forfeitures attributable to Matching Accounts
will be: applied to reduce reasonable administrative expenses of the
Plan with the remainder applied to reduce Matching Contributions as of the
Allocation Date: which immediately follows the last day of the Plan Year in
which such Forfeiture occurs.
B. QUALIFIED MATCHING CONTRIBUTIONS.
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1. FORMULA.
STANDARD: No Qualified Matching Contributions will be made.
2. ELIGIBLE PARTICIPANT. The Qualified Matching Contributions for any
Allocation Date will be made only for each Participant who makes Elective
Deferrals or Employee Contributions, as applicable, during the period ending on
the Allocation Date and who satisfies all of the following requirements:
STANDARD: no additional requirements.
3. ALLOCATION DATE. Qualified Matching Contributions will be made and
allocated as of STANDARD: the last day of each Plan Year.
C. QUALIFIED NONELECTIVE CONTRIBUTIONS.
1. FORMULA. In addition to the Qualified Nonelective Contributions
which may be made for Nonhighly Compensated Employees to satisfy the ADP or ACP
limits.
STANDARD: no additional Qualified Nonelective Contributions
will be made.
2. ELIGIBLE PARTICIPANT. The Additional Qualified Nonelective
Contribution described in this Part VII.C for any Allocation Date will be made
only for each Participant who is an Eligible Employee at any time during the
period ending on the Allocation Date and who satisfies all of the following
requirements:
STANDARD: no additional requirements.
D. DISCRETIONARY EMPLOYER CONTRIBUTIONS.
1. ALLOCATION FORMULA.
STANDARD: The discretionary Employer Contributions will be allocated
among Active Participants as follows:
STANDARD: Nonintegrated.
2. ACTIVE PARTICIPANT.
A. GENERAL. The discretionary Employer Contributions
and Forfeitures, if applicable, will only be allocated to:
STANDARD: each Participant who is an Eligible
Employee at any time during the Plan Year and who (1) is
employed (or on an authorized leave of absence) on the last
day of the Plan Year, (2) terminated employment during the
Plan Year due to death, disability or retirement.
Alternatives to STANDARD: The 500 hours requirement will not apply.
B. YEARS BEFORE FINAL COMPLIANCE DATE. For Plan Years
beginning before the discretionary Employer
-----
Contributions and Forfeitures will only be allocated to:
Alternatives to STANDARD: The 1,000 hours requirement will not
apply.
3. FORFEITURES. Forfeitures attributable to Employer Accounts
will be:
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Applied to reduce reasonable administrative expenses of the Plan with
the remainder applied to reduce Matching Contributions, Qualified Matching
Contributions and/or Qualified Nonelective Contributions.
E. NET PROFITS.
1. GENERAL.
STANDARD: All Employer contributions other than Elective
Deferrals will be made out of Net Profits.
F. MINIMUM ALLOCATIONS. Each Active Participant (determined without
regard to the Participant's completed Hours of Service) who is not a Key
Employee, generally, will receive the minimum top-heavy allocation if the Plan
is top-heavy.
VIII. COMPENSATION.
Compensation for any Plan Year generally means total compensation (not
to exceed $200,000 indexed for inflation after 1989) actually paid to a
Participant during such Plan Year (unless another determination period is
selected).
A. BASIC DEFINITION: Total compensation means:
STANDARD: wages, tips and other compensation reportable on Form W-2.
Reimbursements or other expense allowances, fringe benefits (cash and
noncash), moving expenses, deferred compensation and welfare benefits (even if
includable in gross income):
STANDARD: will be included in Compensation as determined in accordance
with the definition selected above.
B. DETERMINATION PERIOD:
STANDARD: the Plan Year.
C. SALARY REDUCTIONS. Participant salary reduction contributions (for
example, Section 401(k) or benefit plan contributions)
STANDARD: will be included in total compensation.
IX. DISTRIBUTIONS.
A. TIMING. Vested Plan benefits, generally, will be distributed as
follows:
STANDARD: as soon as practical after the Participant separates from
service subject to the Participant's consent, if required.
B. ELECTIONS TO DEFER. A Participant whose account is more than $3,500
may elect that distribution of vested Plan benefits be deferred until:
STANDARD: the Participant's Required Beginning Date (generally age 70
1/2).
C. IN-SERVICE DISTRIBUTIONS.
1. ELECTIVE DEFERRAL ACCOUNTS. In-service distributions from Elective
Deferral Accounts will be allowed as follows:
STANDARD: no distributions before separation from service.
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2. MATCHING ACCOUNTS. In-service distributions from Matching Accounts
will be allowed as follows: STANDARD: no distributions before
separation from service.
3. EMPLOYER ACCOUNTS. In-service distributions from Employer Accounts
will be allowed as follows: STANDARD: no distributions before
separation from service.
4. QUALIFIED NONELECTIVE AND QUALIFIED MATCHING ACCOUNTS. In-service
distributions for Qualified Nonelective and Qualified Matching Accounts will be
allowed as follows:
STANDARD: no distributions before separation from service.
5. EMPLOYEE ACCOUNTS. Withdrawals from Employee Accounts will not be
allowed.
6. ROLLOVER ACCOUNTS. Withdrawals from Rollover Accounts will not be
allowed.
D. JOINT AND SURVIVOR ANNUITY RULES.
STANDARD: The entire vested balance will be paid (a) to married
Participants as a 50% joint and survivor annuity, (b) to single Participants as
a 100% life annuity and (c) to the surviving Spouse of a married Participant who
dies before retirement as a 100% preretirement survivor annuity.
X. INVESTMENT PROVISIONS.
A. INDIVIDUALLY DIRECTED INVESTMENTS. An individual's direction of the
investment of that individual's Account
STANDARD: will not be allowed.
B. Participant Loans. Participant Loans
STANDARD: will not be allowed.
C. Insurance. A Participant's direction to purchase insurance contracts
STANDARD: will not be allowed.
XI. TOP-HEAVY RULES.
A. Top-Heavy Vesting Schedule. The vesting schedule for any Plan Year
in which this Plan is a Top-Heavy Plan will be: Graded
Years of Service NONFORFEITABLE PERCENTAGE
-------------------------
Less than 1 0%
2 20%
---
3 40% [at least 20%]
---
4 60% [at least 40%]
---
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5 80% [at least 60%]
---
6 100% [at least 80%]
----
XII. LIMITATIONS ON ALLOCATIONS (CODE Section 415).
A. Compensation. For Code Section 415 purposes, Compensation means:
STANDARD: wages, tips and other compensation reportable on Form W-2.
B. LIMITATION YEAR. The Limitation Year will be:
STANDARD: the Plan Year.
XIII. (reserved)
XIV. TRUSTEE APPOINTMENT AND TRUST AGREEMENT.
A. STANDARD TRUST AGREEMENT. The standard Trust Agreement will apply
and the Trustee will be the following individual(s), bank(s) or other person(s)
who can serve as a fiduciary and trustee under the laws of the State shown in
Part II.C. Smith Barney Trust Company
XV. IRS APPROVAL.
This plan is designed to operate as a "standardized" plan and an
adopting Employer may rely on the opinion letter issued to the Prototype Sponsor
and may not have to apply for a favorable determination letter on this Plan if
the only plans ever maintained (or later adopted) by the Employer are Paired
Plans which satisfy Section 2.45.
Any Employer who has ever maintained or who later adopts any plan
(including, after December 31, 1985, a welfare benefit fund, as defined in
Section 419(e), which provides post-retirement medical benefits allocated to
separate accounts for key employees, as defined in Code Section 419A(d)(3),
or an individual medical account as defined in Code Section 415(I)(2)) in
addition to this Plan (other than a Paired Plan which satisfies Section 2.45)
may not rely on the opinion letter issued to the Prototype Sponsor by the
National Office of the Internal Revenue Service as evidence that this Plan is
qualified under Code Section 401.
Any Employer who adopts or maintains multiple plans (other than Paired
Plans) must apply to the appropriate Key District Office for a favorable
determination letter on this Plan to obtain reliance that this Plan as adopted
by the Employer is qualified.
An Employer may not rely on the opinion letter issued by the
National Office of the Internal Revenue Service as evidence that this Plan is
qualified under Code Section 401 unless the terms of the plan, as herein
adopted or amended, that pertain to the requirements of Code Section
401(a)(4), Section 401(a)(17), Section 401(I), Section 401(a)(5), Section
410(b) and Section 414(s), as amended by the Tax Reform Act of 1986, or later
laws, (a) are made effective retroactively to the first day of the first Plan
Year beginning after December 31, 1988 (or such later date on which these
requirements first become effective with respect to this Plan) or (b) are
made effective no later than the first day on which
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the Employer is no longer entitled, under regulations, to rely on a reasonable,
good faith interpretation of these requirements, and the prior provisions of the
plan constitute such an interpretation.
Smith Barney will notify each adopting Employer of any amendments that
have been made to the Plan by Smith Barney as Prototype Sponsor or of any
intention to discontinue or abandon its sponsorship of the Plan as a prototype
plan.
SIGNATURES
IMPORTANT:
In order to have a valid plan and trust, this Adoption Agreement must
be signed by individuals authorized to sign for the Employer, the Trustee and,
if applicable, each Participating Affiliate.
This Adoption Agreement will not become effective as a prototype plan
unless and until it is accepted by Smith Barney as the Prototype Sponsor but,
upon such acceptance, will be effective as a prototype plan retroactive to the
Effective Date.
Each Affiliate (i.e., each member of a controlled group of
corporations, commonly controlled group of trades or businesses, or an
affiliated service group within the meaning of Code Section 414) must adopt
this Plan as a Participating Affiliate.
EMPLOYER REPRESENTATIONS. The undersigned hereby certifies that the
adoption of the Plan and the Trust Agreement is authorize by (1) a Board of
Directors' resolution for an Employer which is a corporation, or (2) a written
authorization by the person or persons duly authorized to act on behalf of an
Employer which is not a corporation. If this Adoption Agreement amends and
restates a Pre-Existing Plan, the undersigned hereby certified that such
amendment is duly authorized by the Employer. The undersigned hereby
acknowledges that the Prototype Sponsor or the operation and administration of
this Plan, and (3) has advised the Employer to consult with legal counsel for
the Employer regarding the adoption and operation of this Plan. The undersigned
further acknowledges that the Employer is solely responsible for the elections
made in this Adoption Agreement and for the operation and administration of this
Plan. Finally, the undersigned acknowledges that the Prototype Sponsor will
charge an annual prototype maintenance fee and hereby authorizes the Prototype
Sponsor to charge such fees against any brokerage account maintained for the
Plan.
EMPLOYER EXECUTION. Subject to the terms and conditions of the Plan,
the Trust Agreement and this Adoption Agreement, the undersigned hereby has
executed this Adoption Agreement to evidence its adoption (or, if applicable,
amendment) of the Plan and the Trust Agreement.
Signature: /s/ E. Anthony Wilson
------------------------------------------------------------
Title: Chairman & CEO Date: 12/28/98
-----------------------------------------------------------------
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TRUSTEE EXECUTION. Subject to the terms and conditions of the Plan, the
Trust Agreement and this Adoption Agreement, the undersigned hereby accepts its
appointment as Trustee and has executed this Adoption Agreement to evidence its
adoption of the Trust Agreement. [Attach additional signature pages if there are
more than three Trustees. If the alternate Trust Agreement is specified in Part
XIV.B., the Trustee should execute the alternate Trust Agreement in lieu of
executing the Adoption Agreement in this section.]
Signature: /s/ Date: January 11, 1999
----------------------------- -------------------
PROTOTYPE SPONSOR ACCEPTANCE. Subject to the terms and conditions of
the Plan, the Trust Agreement and this Adoption Agreement, this Adoption
Agreement is accepted by the Prototype Sponsor.
Authorized Signature: /s/ Lisa Glover Date: 1/11/99
------------------ -------------------
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EXHIBIT 5.1
July 23, 1999
Hudson Hotels Corporation
300 Bausch & Lomb Place
Rochester, NY 14604
Re: Registration Statement on Form S-8
for the Hudson Hotels Corporation
1998 Long-Term Incentive Compensation Plan
Ladies and Gentlemen:
We have acted as counsel to Hudson Hotels Corporation, a New York corporation
(the "Registrant"), in connection with the registration under the Securities Act
of 1933, as amended, of 31,740 shares (the "Shares") of the Registrant's common
stock, $.001 par value per share, issuable under the Hudson Hotels Corporation
1998 Retirement and Savings Plan Plan (the "Plan"). The Shares are being
registered pursuant to a Registration Statement on Form S-8 to be filed with the
Securities and Exchange Commission on or about July 23, 1999 (the "Registration
Statement").
We have examined the Certificate of Incorporation and By-Laws of the
Registrant and all amendments thereto and have examined and relied on the
originals, or copies certified to our satisfaction, of such records of meetings,
or resolutions adopted at meetings, of the directors of the Registrant and such
other documents and instruments as in our judgment are necessary or appropriate
to enable us to render the opinions expressed below.
In our examination of the foregoing documents, we have assumed the
genuineness of all signatures and the authenticity of all documents submitted to
us as originals, the conformity to original documents of all documents submitted
to us as certified or photostatic copies and the authenticity of the originals
of such latter documents.
Based upon the foregoing, we are of the opinion that the Registrant has
duly authorized for issuance the Shares, and the Shares, if and when issued in
accordance with the terms of the Plan, will be legally issued, fully-paid and
nonassessable, assuming that the consideration actually received by the Company
for the Shares exceeds the par value thereof.
We hereby consent to the filing of this opinion with the Securities and
Exchange Commission in connection with the Registration Statement.
Very truly yours,
BOYLAN, BROWN, CODE,
FOWLER, VIGDOR & WILSON, LLP
By: /s/ Alan S. Lockwood
__________________________________
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EXHIBIT 23.1
[LETTERHEAD OF BONADIO & CO., LLP]
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated March 28, 1997, on our audit of the
consolidated financial statements of Hudson Hotels Corporation as of December
31, 1996, which report is included in the Form 10-KSB of Hudson Hotels
Corporation for the year ended December 31, 1997 and to the reference to our
firm under the caption "Experts."
/s/ BONADIO & CO., LLP
----------------------
July 22, 1999
Rochester, New York
<PAGE>
EXHIBIT 23.2
[Letterhead of PricewaterhouseCoopers L.L.P.]
INDEPENDENT ACCOUNTANTS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Hudson Hotels Corporation on Form S-8 of our report dated March 24,
1999 on our audit of the consolidated financial statements of Hudson Hotels
Corporation as of and for the years ended December 31, 1998 and 1997,
respectively, and our report dated March 22, 1997 on our audit of the financial
statements of HH Properties-1, a wholly owned subsidiary of Hudson Hotels
Corporation, as of December 31, 1996 and for the period November 15, 1996
through December 31, 1996, which reports are included in the form 10K of Hudson
Hotels Corporation.
/s/ PricewaterhouseCoopers L.L.P
--------------------------------
Rochester, New York
July 19, 1999
