<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 21, 1995
REGISTRATION NO. 33-
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM S-8
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
SERV-TECH, INC.
(Exact name of registrant as specified in its charter)
TEXAS 74-1398757
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
5200 CEDAR CREST BOULEVARD
HOUSTON, TEXAS 77087
(Address of Principal Executive Offices) (Zip Code)
SERV-TECH, INC. CONSOLIDATED RETIREMENT SAVINGS 401(k) PLAN
(Full title of the plans)
FRANK A. PERRONE
SERV-TECH, INC.
5200 CEDAR CREST BOULEVARD
HOUSTON, TEXAS 77087
(Name and address of agent for service)
(713) 644-9974
(Telephone number, including area code, of agent for service)
----------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==============================================================================================================================
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM
TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TITLE OF SECURITIES TO BE REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.50 per share . . . 200,000 shares $5.75 $1,150,000 $396.55
=============================================================================================================================
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) and (h), based on the average of the high and low price
reported by the Nasdaq National Market on November 17, 1995.
================================================================================
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which have been filed with the Securities and
Exchange Commission (the "Commission") by Serv-Tech, Inc. (the "Company"), are
incorporated by reference herein and made a part hereof: (a) the Company's
Annual Report on Form 10-K for the year ended December 31, 1994, (b) the
Company's Quarterly Reports on Form 10-Q for the quarterly periods ended March
31, 1995, June 30, 1995 and September 30, 1995, and (c) the description of the
common stock, par value $.50 per share (the "Common Stock"), of the Company as
set forth under the caption "Description of Registrant's Securities to be
Registered" in the Company's Registration Statement on Form 8-A (File No.
0-17888) dated July 21, 1989, including any amendment or report filed for the
purpose of updating such description.
All documents filed subsequent to the date hereof by the Company
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act
of 1934 prior to the filing of a post-effective amendment which indicates that
all securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference herein and to
be part hereof from the date of the filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
None.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 2.02-1 of the Texas Business Corporation Act contains detailed
provisions for indemnification of directors and officers of Texas corporations
against judgments, penalties, fines, settlements and reasonable expenses which
may be incurred in connection with any threatened, pending or completed
actions, suits or proceedings in which the director or officer is a named
defendant or respondent, whether civil, criminal, administrative, arbitrative
or investigative, any appeals in such an action, suit or proceeding, and any
inquiry or investigation that could lead to such an action, suit or proceeding.
Article VI of the Company's Bylaws, as amended, provides for
indemnification of present and former directors and officers of the Company to
the full extent permitted by Texas law. To the full extent permitted by Texas
law, the Company may pay for or reimburse expenses incurred by an indemnified
director or officer in advance of any final disposition. In addition, the
Company is expressly authorized to purchase insurance on behalf of its
directors and officers against any liability arising out of their status as
directors and officers.
2
<PAGE> 3
Policies of insurance are maintained by the Company under which the
directors and officers of the Company are insured, within the limits and
subject to the limitations of the policies, against certain expenses in
connection with the defense of actions, suits or proceedings, and certain
liabilities which might be imposed as a result of such actions, suits or
proceedings, to which they are parties by reason of being or having been such
directors or officers.
As permitted by Article 1302-7.06 of the Texas Miscellaneous
Corporation Laws Act, Article X of the Company's Restated Articles of
Incorporation, as amended, eliminates or limits the personal liability of
directors for monetary damages for an act or omission in the director's
capacity as a director, except for: (i) a breach of a director's duty of
loyalty to the Company or its shareholders, (ii) an act or omission not in good
faith or that involves intentional misconduct or a knowing violation of the
law, (iii) a transaction from which a director received an improper benefit,
whether or not the benefit resulted from an action taken within the scope of
the director's office, (iv) an act or omission for which the liability of a
director is expressly provided for by statute, and (v) an act related to an
unlawful stock repurchase or payment of a dividend.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER IDENTIFICATION OF EXHIBITS
------ --------------------------
<S> <C>
*4.1 -- Restated Articles of Incorporation of Serv-Tech, Inc.
*4.2 -- Bylaws, as amended, of Serv-Tech, Inc.
5.1 -- Opinion of Frank A. Perrone, Vice President, General Counsel and Secretary of the Company,
regarding legality of the Common Stock being issued
23.1 -- Consent of Frank A. Perrone, Vice President, General Counsel and Secretary of the Company
(included in Exhibit 5.1 to this Registration Statement)
23.2 -- Consent of Coopers & Lybrand L.L.P.
99.1 -- Serv-Tech, Inc. Consolidated Retirement Savings 401(k) Plan, as amended
</TABLE>
- ------------
* Incorporated by reference to the Company's Registration Statement on
Form S-1 (Registration No. 33-29594).
3
<PAGE> 4
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by
section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the registration
statement (or the most recent post-effective amendment
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 this 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 by the registrant pursuant to section 13 or section
15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the
4
<PAGE> 5
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
5
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Houston, State of Texas, on November 21, 1995.
SERV-TECH, INC.
By: /s/ RICHARD L. DAERR
--------------------------------------
RICHARD L. DAERR
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on November 21, 1995.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ RICHARD L. DAERR President, Chief Executive Officer and Director
- -------------------------------- (Principal Executive Officer)
RICHARD L. DAERR
/s/ DAVID P. TUSA Senior Vice President -- Finance and Administration
- -------------------------------- (Principal Financial Officer)
DAVID P. TUSA
/s/ DALE W. WILHELM Corporate Controller
- -------------------------------- (Principal Accounting Officer)
DALE W. WILHELM
/s/ ROBERT J. CRESCI Chairman of the Board of Directors
- --------------------------------
ROBERT J. CRESCI
/s/ MIKE M. MUSTAFOGLU Director
- --------------------------------
MIKE M. MUSTAFOGLU
/s/ JOHN B. O'BRIEN Director
- --------------------------------
JOHN B. O'BRIEN
/s/ JAMES M. PIETTE Director
- --------------------------------
JAMES M. PIETTE
/s/ MICHAEL T. WILLIS Director
- --------------------------------
MICHAEL T. WILLIS
</TABLE>
6
<PAGE> 7
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER IDENTIFICATION OF EXHIBITS
------ --------------------------
<S> <C>
*4.1 -- Restated Articles of Incorporation of Serv-Tech, Inc.
*4.2 -- Bylaws, as amended, of Serv-Tech, Inc.
5.1 -- Opinion of Frank A. Perrone, Vice President, General Counsel and Secretary of the Company,
regarding legality of the Common Stock being issued
23.1 -- Consent of Frank A. Perrone, Vice President, General Counsel and Secretary of the Company
(included in Exhibit 5.1 to this Registration Statement)
23.2 -- Consent of Coopers & Lybrand L.L.P.
99.1 -- Serv-Tech, Inc. Consolidated Retirement Savings 401(k) Plan, as amended
</TABLE>
- ------------
* Incorporated by reference to the Company's Registration Statement on
Form S-1 (Registration No. 33-29594).
<PAGE> 1
EXHIBIT 5.1
[SERV-TECH, INC. LETTERHEAD]
October 31, 1995
Serv-Tech, Inc.
5200 Cedar Crest Boulevard
Houston, TX 77087
Gentlemen:
In my capacity as Vice President, General Counsel and Secretary of Serv-Tech,
Inc., a Texas corporation (the "Company"), I have acted as counsel to the
Company in connection with the registration, pursuant to a Registration
Statement on Form S-8 being filed with the Securities and Exchange Commission
(the "Registration Statement") under the Securities Act of 1933, as amended, of
the offering and sale of up to 200,000 shares of the Company's common stock,
par value $.50 per share (the "Common Stock"), from time to time to the trustees
of the Serv-Tech, Inc. Consolidated Retirement Savings 401(k) Plan (the
"Plan") pursuant to the provisions of the Plan.
In such capacity I have examined documents of the Company, including its
Restated Articles of Incorporation, its By-Laws, as amended, and resolutions
adopted by its board of directors and committees thereof. I have also examined
the Registration Statement, together with the exhibits thereto, and such other
documents which I have deemed necessary for the purposes of expressing the
opinion contained herein.
Based upon the foregoing, I am of the opinion that the Common stock issued from
time to time to the trustees of the Plan pursuant to the provisions of the Plan
for a consideration at least equal to the par value of such Common Stock will
be validly issued, fully paid and non-assessable.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Sincerely,
/s/ FRANK PERRONE
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this registration statement on Form S-8 of our
report dated February 17, 1995, on our audits of the consolidated financial
statements of Serv-Tech, Inc. as of December 31, 1994 and 1993 and for the
three years in the period ended December 31, 1994.
/s/ COOPERS & LYBRAND L.L.P.
Houston, Texas
November 16,1995
<PAGE> 1
EXHIBIT 99.1
SERV-TECH, INC. CONSOLIDATED RETIREMENT SAVINGS 401(K) PLAN
IMPORTANT NOTE
Neither Connecticut General Life Insurance Company nor any of its employees can
provide you with legal advice in connection with the execution of this
document. Prior to execution of this document, you should consult your attorney
on whether this document is appropriate for you.
<PAGE> 2
Table Of Contents
ARTICLE I Definitions . . . . . . . . . . . . . . . . . . 1
ARTICLE II Service . . . . . . . . . . . . . . . . . . . . 16
ARTICLE III Eligibility, Enrollment and Participation . . . 19
ARTICLE IV Contributions . . . . . . . . . . . . . . . . . 20
ARTICLE V Limitations on Allocations . . . . . . . . . . 31
ARTICLE VI Distribution of Benefits . . . . . . . . . . . 37
ARTICLE VI-A Direct Rollovers . . . . . . . . . . . . . . . 43
ARTICLE VII Retirement Benefits . . . . . . . . . . . . . . 45
ARTICLE VIII Joint and Survivor Annuity Requirements . . . . 46
ARTICLE IX Termination of Employment . . . . . . . . . . . 51
ARTICLE X Withdrawals . . . . . . . . . . . . . . . . . . 53
ARTICLE XI Fiduciary Duties and Responsibilities . . . . . 57
ARTICLE XII The Administrator . . . . . . . . . . . . . . . 58
ARTICLE XIII Participants' Rights . . . . . . . . . . . . . 60
ARTICLE XIV Amendment or Termination of the Plan . . . . . 63
ARTICLE XV Substitution of Plans . . . . . . . . . . . . . 65
ARTICLE XVI Miscellaneous . . . . . . . . . . . . . . . . . 66
ARTICLE XVI-A Top-Heavy Provisions . . . . . . . . . . . . . 68
ARTICLE XVII Trust Agreement . . . . . . . . . . . . . . . . 73
May 6, 1994
<PAGE> 3
ARTICLE I
DEFINITIONS
1.1 ACCRUED BENEFIT. The term Accrued Benefit means the value on any
applicable date of the Participant's Account.
1.2 ACTIVE PARTICIPANT. The term Active Participant means any Participant
who (a) performs duties as an Employee for the Employer, and (b) is
not an Inactive Participant.
1.3 ACTUAL CONTRIBUTION PERCENTAGE. The term Actual Contribution
Percentage means the average of the Actual Contribution Ratios of a
specified group computed to the nearest one-hundredth of one percent.
1.4 ACTUAL CONTRIBUTION PERCENTAGE TEST.
(A) For each Plan Year, the Plan shall satisfy the contribution
percentage requirement described in section 401(m)(2) of the
Code and the regulations thereunder, which are incorporated
herein.
The Plan satisfies the Actual Contribution Percentage Test if:
(1) The Actual Contribution Percentage for the group of
eligible Highly Compensated Employees is not more
than the Actual Contribution Percentage for the group
of all other eligible Employees multiplied by 1.25;
or
(2) The excess of the Actual Contribution Percentage for
the group of eligible Highly Compensated Employees
over the Actual Contribution Percentage for the group
of all other eligible Employees is not more than two
percentage points, and the Actual Contribution
Percentage for the group of eligible Highly
Compensated Employees is not more than the Actual
Contribution Percentage for the group of all other
eligible Employees multiplied by two.
(B) Special Rules.
(1) Matching Contributions and Qualified Nonelective
Contributions will be considered for a Plan Year only
if allocated to the Employee's Account as of any date
within the Plan Year being tested and only if made
before the last day of the twelve month period
immediately following the Plan Year to which such
contributions relate.
(2) A Matching Contribution that is forfeited to correct
Excess Aggregate Contributions, or because the
contribution to which it relates is treated as an
Excess Contribution, Excess Deferral, or Excess
Aggregate Contribution, shall not be taken into
account for purposes of the Actual Contribution
Percentage Test.
(3) The Employer shall maintain records sufficient to
demonstrate satisfaction of the Actual Contribution
Percentage Test, including records showing the extent
to which Qualified Nonelective Contributions and
Elective Deferral Contributions are taken into
account.
1
<PAGE> 4
1.5 ACTUAL CONTRIBUTION RATIO.
(A) An Employee's Actual Contribution Ratio is the sum of the
Contribution Percentage Amounts allocated to the Employee's
Account for the Plan Year (including any amounts required to
be taken into account under subparagraphs (B) (1) and (B) (2)
of this section) divided by the Employee's Compensation for
the Plan Year. If no Matching Contributions, Qualified
Nonelective Contributions, or Elective Deferral Contributions
are taken into account with respect to an eligible Employee,
the Actual Contribution Ratio of the Employee is zero.
(B) Special Rules.
(1) In the event that this Plan is aggregated with one or
more plans for purposes of section 410(b) of the Code
(other than for purposes of the average benefit
percentage test), or if one or more other plans
satisfy the requirements of section 410(b) of the
Code (other than the average benefit percentage test)
only if aggregated with this Plan, then this section
shall be applied by determining the Actual
Contribution Ratios of Employees as if all such plans
were a single plan. Plans may be aggregated only if
they have the same Plan Year.
(2) The Actual Contribution Ratio of a Highly Compensated
Employee who is eligible to participate in more than
one plan of the Employer to which employee
contributions or Matching Contributions are made
shall be calculated by treating all such plans in
which the Employee is eligible to participate as one
plan. For Plan Years beginning after December 31,
1988, if a Highly Compensated Employee participates
in two or more plans that have different plan years,
all plans ending with or within the same calendar
year shall be treated as a single plan. However,
plans that are not permitted to be aggregated under
Treasury Regulation section 1.401(m)-1(b)(3)(ii)
shall not be aggregated for purposes of this section.
(3) For purposes of determining the Actual Contribution
Ratio of a Participant who is a 5-percent owner or
one of the ten most highly-paid Highly Compensated
Employees, the Contribution Percentage Amounts and
Compensation of such Participant shall include the
Contribution Percentage Amounts (including any
amounts required to be taken into account under
subparagraphs (B) (1) and (B) (2) of this section)
and Compensation for the Plan Year of all Family
Members.
If the Participant is required to be aggregated as a
member of more than one family group under the Plan,
all eligible Employees who are members of those
family groups that include that Employee are
aggregated as one family group.
Family Members, with respect to Highly Compensated
Employees, shall be disregarded as separate Employees
in determining the Actual Contribution Ratio both for
Participants who are Nonhighly Compensated Employees
and for Participants who are Highly Compensated
Employees.
(4) The determination and treatment of the Actual
Contribution Ratio amounts of any Participant shall
satisfy such other requirements as may be prescribed
by the Secretary of the Treasury.
1.6 ACTUAL DEFERRAL PERCENTAGE. The term Actual Deferral Percentage means
the average of the Actual Deferral Ratios of a specified group,
computed to the nearest one-hundredth of one percent.
2
<PAGE> 5
1.7 ACTUAL DEFERRAL PERCENTAGE TEST.
(A) For each Plan Year, the Plan shall satisfy the Actual Deferral
Percentage Test described in section 401(k)(3) and the
regulations thereunder, which are herein incorporated by
reference.
The Plan satisfies the Actual Deferral Percentage Test for a
Plan Year only if:
(1) The Actual Deferral Percentage for the group of
eligible Highly Compensated Employees is not more
than the Actual Deferral Percentage for the group of
all other eligible Employees multiplied by 1.25; or
(2) The excess of the Actual Deferral Percentage for the
group of eligible Highly Compensated Employees over
the Actual Deferral Percentage for the group of all
other eligible Employees is not more than two
percentage points, and the Actual Deferral Percentage
for the group of eligible Highly Compensated
Employees is not more than the Actual Deferral
Percentage for the group of all other eligible
Employees multiplied by two.
(B) Special Rules.
(1) For purposes of determining the Actual Deferral
Percentage Test, Elective Deferral Contributions,
Qualified Nonelective Contributions, and Qualified
Matching Contributions must be allocated to the
Employee's Account as of a date within the Plan Year
being tested and must be made before the last day of
the twelve-month period immediately following the
Plan Year to which such contributions relate.
(2) The Excess Deferrals of a Highly Compensated Employee
shall be taken into account for purposes of the
Actual Deferral Percentage Test. Conversely, the
Excess Deferrals of an Employee who is a Nonhighly
Compensated Employee shall not be taken into account
for purposes of the Actual Deferral Percentage Test.
(3) The Employer shall maintain records sufficient to
demonstrate satisfaction of the Actual Deferral
Percentage Test, including the extent to which
Qualified Nonelective Contributions and Qualified
Matching Contributions are taken into account.
1.8 ACTUAL DEFERRAL RATIO.
(A) An Employee's Actual Deferral Ratio for the Plan Year is the
sum of the Employee's Deferral Percentage Amounts allocated to
the Employee's Account for the Plan Year (including any
amounts required to be taken into account under subparagraphs
(B) (1) and (B) (2) of this section), divided by the
Employee's Compensation taken into account for the Plan Year.
If an eligible Employee makes no Elective Deferral
Contributions, and no Qualified Matching Contributions or
Qualified Nonelective Contributions are taken into account
with respect to the Employee, the Actual Deferral Ratio of the
Employee is zero.
(B) Special Rules.
(1) In the event that this Plan is aggregated with one or
more plans for purposes of section 410(b) of the Code
(other than for purposes of the average benefit
percentage test), or if one or more other plans
satisfy the requirements of section 410(b) of the
Code (other than the average benefit percentage test)
only if aggregated with this Plan, then this section
shall be applied by determining the Actual Deferral
Ratio of Employees as if all such plans
3
<PAGE> 6
were a single plan. Plans may be aggregated only if
they have the same Plan Year.
(2) The Actual Deferral Ratio of a Highly Compensated
Employee who is eligible to participate in more than
one cash or deferred arrangement (as described in
section 401(k) of the Code) of the same Employer
shall be calculated by treating all the cash or
deferred arrangements in which the Employee is
eligible to participate as one arrangement. If the
cash or deferred arrangements that are treated as a
single arrangement under the preceding sentence are
parts of plans that have different Plan Years, the
cash or deferred arrangements are treated as a single
arrangement with respect to the Plan Years ending
with or within the same calendar year. However,
plans that are not permitted to be aggregated under
Treasury Regulation section 1.401(k)-1(b)(3)(ii)(B)
are not aggregated for purposes of this section.
(3) For purposes of determining the Actual Deferral Ratio
of a Participant who is a 5 percent owner or one of
the 10 most Highly Compensated Employees, the
Deferral Percentage Amounts and Compensation of such
Participant shall include the Deferral Percentage
Amounts (including any amounts required to be taken
into account under subparagraphs (B) (1) and (B) (2)
of this section) and Compensation for the Plan Year
of Family Members.
If an Employee is required to be aggregated as a
member of more than one family group under the Plan,
all eligible Employees who are members of those
family groups that include that Employee are
aggregated as one family group.
Family Members, with respect to such Highly
Compensated Employees, shall be disregarded as
separate Employees in determining the Actual Deferral
Percentage both for Participants who are Non-highly
Compensated Employees and for Participants who are
Highly Compensated Employees.
(4) The determination and treatment of the Actual
Deferral Ratio amounts of any Participant shall
satisfy such other requirements as may be prescribed
by the Secretary of the Treasury.
1.9 ANNUITY. The term Annuity means a series of payments made over a
specified period of time which, for a fixed annuity are, of equal,
specified amounts, and for a variable annuity increase or decrease to
reflect changes in investment performance of the underlying portfolio.
1.10 ANNUITY STARTING DATE. The term Annuity Starting Date means the first
day of the first period for which an amount is payable as an Annuity.
In the case of a benefit not payable in the form of an Annuity, the
term Annuity Starting Date means the first day on which all events
have occurred which entitle the Participant to such benefit.
1.11 BENEFICIARY. The Participant's Spouse is the designated Beneficiary of
the Participant's entire Vested Interest. However, each Participant
shall have the right to designate another Beneficiary and to specify
the form of death benefit the Beneficiary is to receive, subject to
the requirements of the "Qualified Election" provisions of Article
VIII, Joint and Survivor Annuity Requirements. The Participant may
change the Beneficiary and/or the form of death benefit at any time,
subject to the requirements of the "Qualified Election" provisions of
Article VIII, Joint and Survivor Annuity Requirements.
If any distribution hereunder is made to a Beneficiary in the form of
an Annuity, and if such Annuity provides for a death benefit, then
such Beneficiary shall also have the right to designate a Beneficiary
4
<PAGE> 7
and to change that Beneficiary from time to time. As an alternative to
receiving the benefit in the form of an Annuity, the Beneficiary may
elect to receive a single cash payment or any other form of payment
provided for in the Plan.
If a Beneficiary has not been designated, or if a Beneficiary
designation or change of Beneficiary designation does not meet the
requirements of the "Qualified Election" provisions of Article VIII,
Joint and Survivor Annuity Requirements, (including any designation
made prior to August 23, 1984 by a married Participant who has an Hour
of Service on or after August 23, 1984), or if no designated
Beneficiary survives the Participant, the Participant's entire Vested
Interest shall be distributed to the Participant's Spouse, if living;
otherwise in equal shares to any surviving children of the
Participant. In the event none of the above named individuals survives
the Participant, the Participant's entire Vested Interest shall be
paid to the executor or administrator of the Participant's estate.
1.12 BOARD OF DIRECTORS. The term Board of Directors means the Employer's
board of directors or other comparable governing body.
1.13 CODE. The term Code means the Internal Revenue Code of 1986, as
amended from time to time.
1.14 COMPENSATION
(A) Except as otherwise provided in the Plan, the term
Compensation means wages within the meaning of section 3401(a)
of the Code for the purposes of income tax withholding at the
source but determined without regard to any rules that limit
the remuneration included in wages based on the nature or
location of the employment or the services performed (such as
the exception for agricultural labor in section 3401(a)(2) of
the Code).
Notwithstanding the foregoing, Compensation shall be reduced
by all of the following items (even if includible in gross
income): reimbursements or other expense allowances, fringe
benefits (cash and noncash), moving expenses, deferred
compensation, and welfare benefits.
(B) Compensation shall include only that Compensation which is
actually paid to the Participant during the determination
period. Except as provided elsewhere in the Plan, the
determination period shall be the Plan Year.
(C) Compensation shall include any amount which is contributed by
the Employer pursuant to a salary reduction agreement and
which is not includible in the gross income of the employee
under sections 125, 402(e)(3), 402(h), or 403(b) of the Code;
Compensation deferred under an eligible deferred compensation
plan within the meaning of section 457(d) of the Code; and
employee contributions described in section 414(h)(2) of the
Code that are picked up by the employing unit and, thus, are
treated as employer contributions.
(D) The annual Compensation of each Participant taken into account
for determining all benefits provided under the Plan for any
determination period shall not exceed $200,000. This
limitation shall be adjusted by the Secretary of the Treasury
at the time and in the same manner as under section 415(d) of
the Code, except that the dollar increase in effect on January
1 of any calendar year is effective for determination periods
beginning in such calendar year and the first adjustment to
the $200,000 limitation is effected on January 1, 1990. If the
period for determining Compensation used in calculating an
Employee's allocation for a determination period is a short
Plan Year (i.e., shorter than 12 months), the annual
Compensation limit is an amount equal to the otherwise
applicable annual Compensation limit multiplied by a fraction,
the numerator of which is the number of months in the short
Plan Year, and the denominator of which is 12.
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<PAGE> 8
In determining the Compensation of a Participant for purposes
of this limitation, the rules of section 414(q)(6) of the Code
shall apply, except in applying such rules, the term "family"
shall include only the Spouse of the Participant and any
lineal descendants of the Participant who have not attained
age 19 before the close of the year. If, as a result of the
application of such rules, the adjusted $200,000 limitation is
exceeded, then either the limitation shall be prorated among
the affected individuals in proportion to each such
individual's Compensation as determined under this section
prior to the application of this limitation, or the limitation
shall be allocated among the affected individuals in an
objective and nondiscriminatory manner based on a reasonable,
good faith interpretation of section 401(a)(17) of the Code.
The method chosen in the preceding sentence shall be uniformly
applied to all affected individuals in a Plan Year and shall
be applied consistently from year to year.
If Compensation for any prior determination period is taken
into account in determining an Employee's allocations or
benefits for the current determination period, the
Compensation for such prior determination period is subject to
the applicable annual Compensation limit in effect for that
prior year. For this purpose, for years beginning before
January 1, 1990, the applicable annual Compensation limit is
$200,000.
(E) In addition to other applicable limitations set forth in the
Plan, and notwithstanding any other provision of the Plan to
the contrary, for Plan Years beginning on or after January 1,
1994, the annual Compensation of each Employee taken into
account under the Plan shall not exceed the OBRA '93 annual
Compensation limit. The OBRA '93 annual Compensation limit is
$150,000, as adjusted by the Commissioner for increases in the
cost of living in accordance with section 401(a)(17)(B) of the
Code. The cost-of-living adjustment in effect for a calendar
year applies to any period, not exceeding 12 months, over
which Compensation is determined (determination period)
beginning in such calendar year. If a determination period
consists of fewer than 12 months, the OBRA '93 annual
Compensation limit will be multiplied by a fraction, the
numerator of which is the number of months in the
determination period, and the denominator of which is 12. For
Plan Years beginning on or after January 1, 1994, any
reference in this Plan to the limitation under section
401(a)(17) of the Code shall mean the OBRA '93 annual
Compensation limit set forth in this provision. If
Compensation for any prior determination period is taken into
account in determining an employee's benefits accruing in the
current Plan Year, the Compensation for that prior
determination period is subject to the OBRA '93 annual
Compensation limit in effect for that prior determination
period. For this purpose, for determination periods beginning
before the first day of the first Plan Year beginning on or
after January 1, 1994, the OBRA '93 annual Compensation limit
is $150,000.
1.15 CONSIDERED NET PROFITS. The term Considered Net Profits means the
entire amount of the accumulated or current operating profits
(excluding capital gains from the sale or involuntary conversion of
capital or business assets) of the Employer after all expenses and
charges other than (i) the contributions made by the Employer to the
Plan, and (ii) federal or state or local taxes based upon or measured
by income, as determined by the Employer, either on an estimated basis
or a final basis, in accordance with the generally accepted accounting
principles used by the Employer. When the amount of Considered Net
Profits has been determined by the Employer, and the contributions are
made by the Employer on the basis of such determination, for any Plan
Year, such determination and contribution shall be final and
conclusive and shall not be subject to change because of any
adjustments in income or expense which may be required by the Internal
Revenue Service or otherwise. Such determination and contribution
shall not be open to question by any Participant either before or
after the contributions by the Employer have been made.
1.16 CONTRIBUTION PERCENTAGE AMOUNTS. The term Contribution Percentage
Amounts means the sum of the Matching Contributions and Qualified
Matching Contributions (to the extent not taken into
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<PAGE> 9
account for purposes of the Actual Deferral Percentage Test) made
under the Plan on behalf of the Employee for the Plan Year. The term
Contribution Percentage Amounts also includes Qualified Nonelective
Contributions and Elective Deferral Contributions treated as Matching
Contributions and taken into account in determining the Employee's
Actual Contribution Ratio for the Plan Year.
1.17 CONTRIBUTION PERIOD. The term Contribution Period means that regular
period specified by the Employer in Article IV for which contributions
shall be made.
1.18 DEFERRAL PERCENTAGE AMOUNTS. The term Deferral Percentage Amounts
means an Employee's Elective Deferral Contributions for the Plan Year.
The term Deferral Percentage Amounts also includes Qualified
Nonelective Contributions and Qualified Matching Contributions treated
as Elective Deferral Contributions and taken into account in
determining the Employee's Actual Deferral Ratio for the Plan Year.
1.19 DISABILITY. The term Disability means a Participant's incapacity to
engage in any substantial gainful activity because of a medically
determinable physical or mental impairment which can be expected to
result in death, or to be of long, continued and indefinite duration.
Such determination of Disability shall be made by the Administrator
with the advice of competent medical authority. All Participants in
similar circumstances will be treated alike.
1.20 DISABILITY RETIREMENT DATE. The term Disability Retirement Date means
the first day of the month after the Plan Administrator has determined
that a Participant's incapacity is a Disability.
1.21 EARLY RETIREMENT DATE. The term Early Retirement Date means the first
day of the month coinciding with or next following the date a
Participant is separated from Service with the Employer on or after
the date he attains age 55 and has seven Years of Service for any
reason other than death or Disability, provided that on such date the
Participant has not attained his Normal Retirement Age.
1.22 EFFECTIVE DATE. The term Effective Date means January 1, 1993.
1.23 ELECTIVE DEFERRAL CONTRIBUTION. The term Elective Deferral
Contribution means any Employer Contribution made to the Plan at the
election of the Participant, in lieu of cash compensation, and
includes contributions made pursuant to a Salary Deferral Agreement or
other deferral mechanism.
Solely for purposes of the dollar limitation specified in section
402(g) of the Code, with respect to any taxable year, a Participant's
Elective Deferral Contributions are the sum of all employer
contributions made on behalf of such Participant pursuant to an
election to defer under any qualified cash or deferred arrangement as
described in section 401(k) of the Code, any simplified employee
pension cash or deferred arrangement described in section 402(h)(1)(B)
of the Code, any plan as described under section 501(c)(18) of the
Code, and any employer contributions made on behalf of a Participant
for the purchase of a tax sheltered annuity contract under section
403(b) of the Code pursuant to a salary reduction agreement.
The term Elective Deferral Contribution shall not include any
deferrals properly distributed as excess annual additions.
1.24 EMPLOYEE. The term Employee means an individual who performs services
for the Employer and who is either a common law employee of the
Employer or a self-employed individual/owner employee treated as an
Employee pursuant to Code section 401(c)(1). The term Employee also
includes a Leased Employee who is treated as an Employee of the
Employer-recipient pursuant to the provisions of Code section 414(n)
or 414(o). For purposes of determining the Highly Compensated
Employees, the Employer may elect, on a reasonable and consistent
basis, to treat such Leased Employees covered by a plan described in
Code
7
<PAGE> 10
section 414(n)(5) as Employees.
1.25 EMPLOYEE CONTRIBUTIONS. The term Employee Contributions means any
contributions to the Plan or any other plan that are designated or
treated at the time of contribution as after-tax Employee
Contributions and are allocated to a separate account to which the
attributable earnings and losses are allocated. Such term includes
Employee Contributions applied to the purchase of life insurance
policies.
Such term does not include buy-back of benefits described in code
section (411)(a)(7)(c) or employee contributions transferred to this
Plan.
1.26 EMPLOYER. The term Employer means Serv-Tech, Inc., Seco Industries,
Inc., Talbert & Associates, Inc. and Hartney Industrial Services
Corporation and any successor organization to such Employer which
elects to continue the Plan. In the case of a group of employers which
constitutes a controlled group of corporations (as defined in Code
section 414(b)), or which constitutes trades or businesses (whether or
not incorporated) which are under common control (as defined in Code
section 414(c)), or which constitutes an affiliated service group (as
defined in Code section 414(m)), all such employers shall be
considered a single employer for purposes of participation, vesting,
Top-Heavy provisions and determination of Highly Compensated
Employees.
1.27 EMPLOYER CONTRIBUTION. The term Employer Contribution means any
contribution made to the Plan by the Employer on behalf of a
Participant, other than a Rollover Contribution or a mandatory or
voluntary contribution made to the Plan by the Employee that is
treated at the time of contribution as an after-tax employee
contribution.
1.28 ENTRY DATE. The term Entry Date means either the Effective Date or the
January 1, April 1, July 1 or October 1 thereafter when an Employee
who has fulfilled the eligibility requirements commences participation
in the Plan.
Any Employee who has satisfied the maximum eligibility requirements
permissible under ERISA, shall be eligible to commence participation
in this Plan no later than the earlier of (A) or (B) below, as
applicable, provided that the Employee has not separated from the
Service of the Employer:
(A) The first day of the first Plan Year beginning after the date
on which the Employee satisfied such requirements; or
(B) The date six months after the date on which the Employee
satisfied such requirements.
If an Employee is not in the active Service of the Employer as of his
initial Entry Date, his subsequent Entry Date shall be the date he
returns to the active Service of the Employer, provided he still meets
the eligibility requirements. If an Employee does not enroll as a
Participant as of his initial Entry Date, his subsequent Entry Date
shall be the applicable Entry Date as specified above when the
Employee actually enrolls as a Participant.
1.29 ERISA. The term ERISA means the Employee Retirement Income Security
Act of 1974 (PL 93-406) as it may be amended from time to time, and
any regulations issued pursuant thereto as such Act and such
regulations affect this Plan and Trust.
1.30 EXCESS AGGREGATE CONTRIBUTIONS.
(A) The term Excess Aggregate Contributions means, with respect to
any Plan Year, the excess of the aggregate amount of the
Contribution Percentage Amounts actually made on behalf of
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<PAGE> 11
Highly Compensated Employees for the Plan Year (including any
amounts required to be taken into account under subparagraphs
(B) (1) and (B) (2) of Section 1.5 of the Plan), over the
maximum amount of contributions permitted under the Actual
Contribution Percentage Test. The amount of Excess Aggregate
Contributions for each Highly Compensated Employee is
determined by using the method described in paragraph (B) of
this section.
(B) The amount of Excess Aggregate Contributions for a Highly
Compensated Employee for a Plan Year is the amount (if any) by
which the Employee's Matching Contributions must be reduced
for the Employee's Actual Contribution Ratio to equal the
highest permitted Actual Contribution Ratio under the Plan.
To calculate the highest permitted Actual Contribution Ratio
under the Plan, the Actual Contribution Ratio of the Highly
Compensated Employee with the highest Actual Contribution
Ratio is reduced by the amount required to cause the
Employee's Actual Contribution Ratio to equal the ratio of the
Highly Compensated Employee with the next highest Actual
Contribution Ratio. If a lesser reduction would enable the
Plan to satisfy the Actual Contribution Percentage Test, only
this lesser reduction may be made. This process shall be
repeated until the Plan satisfies the Actual Contribution
Percentage Test. The highest Actual Contribution Percentage
Ratio remaining under the Plan after leveling is the highest
permitted Actual Contribution Ratio.
For each Highly Compensated Employee, the amount of Excess
Aggregate Contributions for a Plan Year is equal to the total
Contribution Percentage Amounts (including any amounts
required to be taken into account under subparagraphs (B) (1)
and (B) (2) of Section 1.5 of the Plan), minus the amount
determined by multiplying the Employees's highest permitted
Actual Contribution Ratio (determined after application of
this section) by the compensation used in determining the
ratio.
1.31 EXCESS CONTRIBUTION.
(A) The term Excess Contribution means, with respect to a Plan
Year, the excess of Deferral Percentage Amounts made on behalf
of eligible Highly Compensated Employees for the Plan Year
(including any amounts required to be taken into account under
subparagraphs (B) (1) and (B) (2) of Section 1.8 of the Plan)
over the maximum amount of such contributions permitted under
the Actual Deferral Percentage Test for the Plan Year. The
amount of Excess Contributions for each Highly Compensated
Employee is determined by using the method described in
paragraph (B) of this section.
(B) The amount of Excess Contributions for a Highly Compensated
Employee for a Plan Year is the amount (if any) by which the
Employee's Elective Deferral Contributions must be reduced for
the Employee's Actual Deferral Ratio to equal the highest
permitted Actual Deferral Ratio under the Plan.
To calculate the highest permitted Actual Deferral Ratio under
the Plan, the Actual Deferral Ratio of the Highly Compensated
Employee with the highest Actual Deferral Ratio is reduced by
the amount required to cause the Employee's Actual Deferral
Ratio to equal the ratio of the Highly Compensated Employee
with the next highest Actual Deferral Ratio. If a lesser
reduction would enable the arrangement to satisfy the Actual
Deferral Percentage Test, only this lesser reduction shall be
made. This process shall be repeated until the cash or
deferred arrangement satisfies the Actual Deferral Percentage
Test. The highest Actual Deferral Ratio remaining under the
Plan after leveling is the highest permitted Actual Deferral
Ratio.
1.32 EXCESS DEFERRALS. The term Excess Deferrals means those Elective
Deferral Contributions that are includible in a Participant's gross
income under section 402(g) of the Code to the extent such
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<PAGE> 12
Participant's Elective Deferral Contributions for a taxable year
exceed the dollar limitation under such Code section.
1.33 FAIL-SAFE CONTRIBUTION. The term Fail-Safe Contribution means a
Nonelective Contribution, designated by the Employer at the time of
contribution as a Qualified Nonelective Contribution, which is
contributed to the Plan solely for the purposes of satisfying either
the Actual Deferral Percentage Test or the Actual Contribution
Percentage Test and is made in accordance with the provisions of
Article IV of this Plan.
1.34 FAMILY MEMBER. The term Family Member means, with respect to any
Employee, such Employee's Spouse and lineal ascendants and descendants
and the spouses of such lineal ascendants and descendants.
1.35 FIDUCIARY. The term Fiduciary means any, or all, of the following, as
applicable:
(A) Any Person who exercises any discretionary authority or
control respecting the management of the Plan or its assets;
or
(B) Any Person who renders investment advice for a fee or other
compensation, direct or indirect, respecting any monies or
other property of the Plan or has authority or responsibility
to do so; or
(C) Any Person who has discretionary authority or responsibility
in the administration of the Plan; or
(D) Any Person who has been designated by a Named Fiduciary
pursuant to authority granted by the Plan, who acts to carry
out a fiduciary responsibility, subject to any exceptions
granted directly or indirectly by ERISA.
1.36 FORFEITURE. The term Forfeiture means the amount, if any, by which the
value of a Participant's Account exceeds his Vested Interest following
such Participant's Termination of Employment, and at the time
specified in Section 9.1.
1.37 HIGHLY COMPENSATED EMPLOYEE. The term Highly Compensated Employee
means any Highly Compensated Active Employee or Highly Compensated
Former Employee as further defined herein.
For purposes of the determination of Highly Compensated Employees, the
term Compensation means Compensation as defined in Article V of the
Plan, but includes the amount of any elective contributions made by
the Employer on the Employee's behalf to a cafeteria plan established
in accordance with the provisions of Code section 125, a qualified
cash or deferred arrangement in accordance with the provisions of Code
section 402(e)(3), a simplified employee pension plan in accordance
with the provisions of Code section 402(h), or a tax sheltered annuity
plan maintained in accordance with the provisions of Code section
403(b).
A "Highly Compensated Active Employee" is any Employee who performs
services for the Employer during the current Plan Year and who during
the current Plan Year or the calendar year ending with the current
Plan Year:
(A) Owns (or is considered to own within the meaning of section
318 of the Code, as modified by section 416(i)(1)(B)(iii) of
the Code), more than 5% of the outstanding stock of the
Employer or stock possessing more than 5% of the total
combined voting power of all stock of the Employer, or, if the
Employer is other than a corporation, owns more than 5% of the
capital or profits interest in the Employer. The determination
of 5% ownership shall be made separately for each member of a
controlled group of corporations (as defined in Code section
414(b)), or of a group of trades
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or businesses (whether or not incorporated) that are under
common control (as defined in Code section 414(c)), or of an
affiliated service group (as defined in Code section 414(m));
or
(B) Receives Compensation in excess of $75,000 multiplied by the
applicable cost-of-living adjustment factor prescribed under
Code section 415(d) and then prorated in the case of a short
Plan Year; or
(C) Receives Compensation in excess of $50,000, as adjusted for
cost-of-living increases in accordance with Code section
415(d) and then prorated in the case of a short Plan Year, and
is in the top 20% of Employees ranked by Compensation; or
(D) Is, at any time, an officer of the Employer and receives
Compensation in excess of 50% of the amount in effect under
Code section 415(b)(1)(A) for the applicable period.
If no officer receives Compensation in excess of the amount
specified above, the highest paid officer for the applicable
period shall be a Highly Compensated Employee.
In no event if there are more than 500 Employees, shall more
than 50 Employees or, if there are less than 500 Employees,
shall the greater of three Employees or 10% of all Employees,
be taken into account as officers.
In determining both the top 20% of Employees ranked by Compensation
for purposes of paragraph (C) above, and officers of the Employer for
purposes of paragraph (D) above, Employees who have not completed six
months of Service by the end of the applicable period, Employees who
normally work less than 17-1/2 hours per week, Employees who normally
work less than six months during a year, Employees who have not
attained 21, and nonresident aliens who receive no earned income from
U.S. sources shall be excluded.
Also excluded under the above paragraph are Employees who are covered
by an agreement which the Secretary of Labor finds to be a collective
bargaining agreement. Such Employees will be excluded only if
retirement benefits were the subject of good faith bargaining, 90% of
the Employees of the Employer are covered by the agreement, and the
Plan covers only Employees who are not covered by the agreement.
Notwithstanding the above provisions, an Employee, other than a 5%
owner as described in paragraph (a) above who was not highly
compensated in the calendar year ending with or within the current
Plan Year will not be considered to be a Highly Compensated Employee
in the current Plan Year unless such Employee is one of the top 100
Employees ranked by Compensation for the current Plan Year.
A "Highly Compensated Former Employee" is any former Employee who
separated from Service with the Employer in a Plan Year preceding the
current Plan Year and was a Highly Compensated Active Employee in
either:
(A) the Plan Year in which his separation from Service occurred; or
(B) any Plan Year ending on or after such former Employee's 55th
birthday.
A former Employee is an Employee who performs no services for the
Employer during a Plan Year (for example, by reason of a leave of
absence).
1.38 INACTIVE PARTICIPANT. The term Inactive Participant means any
Participant who does not currently meet the requirements to be an
Active Participant due to a suspension of the performance of duties
for the Employer.
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1.39 INSTALLMENT REFUND ANNUITY. The term Installment Refund Annuity means
an annuity which provides fixed monthly payments for a period certain
of not less than three nor more than 15 years. If the Participant dies
before the period certain expires, the annuity will be paid to the
Participant's Beneficiary for the remainder of the period certain. The
period certain shall be chosen by the Participant at the time the
annuity is purchased, and the Installment Refund Annuity will be the
amount of benefit which can be purchased with the Participant's Vested
Interest. The Installment Refund Annuity is not a life annuity and in
no event shall the period certain extend to a period which equals or
exceeds the life expectancy of the Participant.
1.40 JOINT AND SURVIVOR ANNUITY. The term Joint and Survivor Annuity means
an Annuity for the life of the Participant with a survivor Annuity for
the life of the Participant's Spouse which is not less than one-half,
nor greater than, the amount of the Annuity payable during the joint
lives of the Participant and the Participant's Spouse. The Joint and
Survivor Annuity will be the amount of benefit which can be purchased
with the Participant's vested account balance. In the case of an
unmarried Participant, Joint and Survivor Annuity means an Annuity
payable over the Participant's life.
1.41 LATE RETIREMENT DATE. The term Late Retirement Date means the first
day of the month coinciding with or next following the date a
Participant is separated from Service with the Employer after his
Normal Retirement Age, for any reason other than death.
1.42 LEASED EMPLOYEE. The term Leased Employee means any person (other than
an Employee of the recipient) who, pursuant to an agreement between
the recipient and any other person ("leasing organization"), has
performed services for the recipient (or for the Employer and related
persons determined in accordance with Code section 414(n)(6)) on a
substantially full-time basis for a period of at least one year, and
such services are of a type historically performed by employees in the
business field of the recipient Employer.
1.43 MATCHING CONTRIBUTIONS. The term Matching Contributions means
contributions made by the Employer to the Plan on behalf of a
Participant on account of either Elective Deferral Contributions, if
any, Employee Contributions, if any, or required contributions, if
any.
1.44 NAMED FIDUCIARY. The term Named Fiduciary means the Plan
Administrator, the Trustee and any other Fiduciary designated in
writing by the Employer, and any successor thereto.
1.45 NONHIGHLY COMPENSATED EMPLOYEE. The term Nonhighly Compensated
Employee means an Employee who is not a Highly Compensated Employee.
1.46 NONELECTIVE CONTRIBUTIONS. The term Nonelective Contributions means
contributions made by the Employer (other than Matching Contributions)
that the Participant may not elect to have paid in cash or other
benefits instead of being contributed to the Plan.
1.47 NORMAL RETIREMENT AGE. The term Normal Retirement Age means the date
the Participant attains age 65. However, for any Employee who was a
Participant in the Seco Industries, Inc. 401(k) Plan prior to January
1, 1993, the term Normal Retirement Age shall mean the date the
Participant attains age 60.
1.48 NORMAL RETIREMENT DATE. The term Normal Retirement Date means the
first day of the month coinciding with or next following the date a
Participant attains his Normal Retirement Age.
1.49 PARTICIPANT. The term Participant means any Employee of the Employer,
who is or becomes eligible to participate under this Plan in
accordance with its provisions and shall include an Active Participant
and an Inactive Participant.
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1.50 PARTICIPANT'S ACCOUNT. The term Participant's Account means the sum of
the following sub-accounts held on behalf of each Participant:
o Elective Deferral Contributions, if any, and earnings thereon.
o Matching Contributions, if any, and earnings thereon.
o Qualified Matching Contributions, if any, and earnings thereon.
o Nonelective Contributions, if any, and earnings thereon.
o Qualified Nonelective Contributions, if any, and earnings
thereon.
o Rollover Contributions, if any, and earnings thereon.
A Participant's Account shall be invested in accordance with the rules
established by the Plan Administrator, which shall be applied in a
consistent and nondiscriminatory manner.
1.51 PARTICIPANT'S EMPLOYER STOCK ACCOUNT. The term Participant's Employer
Stock Account means that portion, if any, of the Participant's Account
which is invested in shares of the Employer's stock. Such
Participant's Employer Stock Account shall be credited with dividends
paid, if any. Such Participant's Employer Stock Account will be valued
on the last day of each month that the public exchange over which the
Employer's stock is traded is open for unrestricted trading.
Amounts which are to be invested in the Participant's Employer Stock
Account may be invested in any short-term account prior to actual
investment in the Participant's Employer Stock Account.
The Trustee will vote the shares of the Employer's stock invested in
the Participant's Employer Stock Account. The Trustee may request
voting instructions from the Participants, provided this is done in a
consistent and nondiscriminatory manner.
1.52 PERSON. The term Person means any natural person, partnership,
corporation, trust or estate.
1.53 PLAN. The term Plan means Serv-Tech, Inc. Consolidated Retirement
Savings 401(k) Plan, the terms of which are set forth herein as it may
be amended from time to time.
1.54 PLAN ADMINISTRATOR. The terms Plan Administrator and Administrator are
used interchangeably throughout the Plan and Trust and shall mean the
Employer.
1.55 PLAN YEAR. The term Plan Year means the 12-month period commencing on
January 1 and ending on the following December 31.
1.56 QUALIFIED MATCHING CONTRIBUTIONS. The term Qualified Matching
Contributions shall mean Matching Contributions which are subject to
the distribution and nonforfeitability requirements under section
401(k) of the Code when made.
1.57 QUALIFIED NONELECTIVE CONTRIBUTIONS. The term Qualified Nonelective
Contributions shall mean Nonelective Contributions which are subject
to the distribution and nonforfeitability requirements under section
401(k) of the Code when made.
1.58 ROLLOVER CONTRIBUTION. The term Rollover Contribution means an amount
representing all or part
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<PAGE> 16
of a distribution from a pension or profit-sharing plan meeting the
requirements of Code section 401(a) that is eligible for rollover to
this Plan in accordance with the requirements set forth in Code
section 402 or Code section 408(d)(3), whichever is applicable.
1.59 SALARY DEFERRAL AGREEMENT. The term Salary Deferral Agreement means an
agreement between a Participant and the Employer to defer the
Participant's Compensation for the purpose of making Elective Deferral
Contributions to the Plan.
1.60 TERMINATION OF EMPLOYMENT. The term Termination of Employment means a
severance of the Employer-Employee relationship which occurs prior to
a Participant's Normal Retirement Age for any reason other than Early
Retirement, Disability or death.
1.61 TRUST. The term Trust means the trust agreement entered into by the
Employer, the Administrator and the Trustee, which trust agreement
forms a part of, and implements the provisions of this Plan.
1.62 TRUSTEE. The term Trustee means one or more individuals collectively
appointed and acting under the trust agreement, and any successor
thereto.
1.63 VESTED INTEREST. The term Vested Interest on any date means the
nonforfeitable right to an immediate or deferred benefit in the amount
which is equal to the following:
(A) the value on that date of that portion of the Participant's
Account that is attributable to the following contributions:
o Elective Deferral Contributions, if any
o Rollover Contributions, if any
o Qualified Matching Contributions, if any
o Qualified Nonelective Contributions, if any
(B) plus the value on that date of that portion of the
Participant's Account that is attributable to and derived
from:
o Matching Contributions, if any
o Nonelective Contributions, if any
Such contributions pursuant to Subsection (B), plus the
earnings thereon, shall be, at any relevant time, a part of
the Participant's Vested Interest equal to an amount ("X")
determined by the following formula:
X = P(AB + D) - D
For the purposes of applying this formula:
P = The Participant's Vesting Percentage
at the relevant time.
AB = The account balance attributable
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<PAGE> 17
to such contributions, plus
the earnings thereon, at the
relevant time.
D = The amount of the distribution.
1.64 VESTING PERCENTAGE. The term Vesting Percentage means the percentage
used to determine a Participant's Vested Interest in contributions
made by the Employer, plus the earnings thereon, credited to his
Participant's Account that are not 100% immediately vested. The
Vesting Percentage for each Participant shall be determined in
accordance with the following schedule based on Years of Service with
the Employer:
<TABLE>
<CAPTION>
Years of Service Vesting Percentage
------------------ ------------------
<S> <C>
Less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
</TABLE>
Notwithstanding the above schedule, any Employee who has three Years
of Service as of December 31, 1993, the date of the change to vesting,
may choose between the above schedule and the schedule that applied
prior to this amendment.
In addition, an Employee with less than three Years of Service as of
December 31, 1993 will retain his current Vesting Percentage but now
be subject to the 6-year schedule above.
However, if an Active Participant dies prior to attaining his Normal
Retirement Age, his Vesting Percentage shall be 100%.
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ARTICLE II
SERVICE
2.1 SERVICE. The term Service means active employment with the Employer as
an Employee. For purposes of determining Service, employment with any
company which is under common control with the Employer as specified
in section 414 of the Internal Revenue Code shall be treated as
employment with the Employer.
2.2 ABSENCE FROM EMPLOYMENT. Absence from employment on account of a leave
of absence authorized by the Employer pursuant to the Employer's
established leave policy will be counted as employment with the
Employer provided that such leave of absence is of not more than two
years' duration. Absence from employment on account of active duty
with the Armed Forces of the United States will be counted as
employment with the Employer. If the Employee does not return to
active employment with the Employer, his Service will be deemed to
have ceased on the date the Administrator receives notice that such
Employee will not return to the active Service of the Employer. The
Employer's leave policy shall be applied in a uniform and
nondiscriminatory manner to all Participants under similar
circumstances.
2.3 HOUR OF SERVICE. The term Hour of Service means a period of Service
during which an Employee shall be credited with one Hour of Service as
described in (A), (B), (C), and (D) below:
(A) Each hour for which an Employee is directly or indirectly
paid, or entitled to payment, by the Employer for the
performance of duties. These hours shall be credited to the
Employee for the computation period or periods in which the
duties are performed; and
(B) Each hour for which an Employee is directly or indirectly
paid, or entitled to payment, by the Employer for reasons
(such as vacation, sickness or Disability) other than for the
performance of duties. Hours under this Subsection shall be
calculated and credited pursuant to section 2530.200b-2 of the
Department of Labor Regulations which are incorporated herein
by this reference; and
(C) Each hour for which back pay, irrespective of mitigation of
damages, has been either awarded or agreed to by the Employer.
These hours shall be credited to the Employee for the
computation period or periods to which the award or agreement
pertains rather than the computation period in which the
award, agreement or payment is made; and
(D) Each hour for which an Employee is on an authorized unpaid
leave (such as service with the Armed Forces, jury duty,
educational leave). These hours shall be credited to the
Employee for the computation period or periods in which such
authorized leave takes place. However, no more than 501 hours
shall be credited under this subparagraph (D).
Hours of Service will be credited for employment with other members of
an affiliated service group (under Internal Revenue Code section
414(m)), a controlled group of corporations (under Internal Revenue
Code section 414(b)), or a group of trades or businesses under common
control (under Internal Revenue Code section 414(c)), of which the
adopting employer is a member. Hours of Service will also be credited
for any individual considered an Employee under Internal Revenue Code
section 414(n).
Solely for purposes of determining whether a One-Year Break in
Service, as defined in Section 2.4, for
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participation and vesting purposes has occurred in a computation
period, an individual who is absent from work for maternity or
paternity reasons shall receive credit for the Hours of Service which
would otherwise have been credited to such individual but for such
absence, or in any case in which such hours cannot be determined,
eight Hours of Service per day of such absence. For purposes of this
paragraph, an absence from work for maternity or paternity reasons
means an absence (1) by reason of the pregnancy of the individual, (2)
by reason of a birth of a child of the individual, (3) by reason of
the placement of a child with the individual in connection with the
adoption of such child by such individual, or (4) for purposes of
caring for such child for a period beginning immediately following
such birth or placement. The Hours of Service credited under this
paragraph shall be credited (1) in the computation period in which the
absence begins if the crediting is necessary to prevent a Break in
Service in that period, or (2) in all other cases, in the following
computation period.
2.4 ONE-YEAR BREAK IN SERVICE. Except as provided below regarding
eligibility, the term One-Year Break in Service means any Plan Year
during which an Employee fails to complete more than 500 Hours of
Service.
2.5 DETERMINING VESTING PERCENTAGE. Vesting credit shall be given for each
Year of Service except those periods specified in Section 2.7.
If a Participant completes less than 1,000 Hours of Service during a
Plan Year while remaining in the Service of the Employer, his Vesting
Percentage shall not be increased for such Plan Year. However, at such
time as the Participant again completes at least 1,000 Hours of
Service in any subsequent Plan Year, his Vesting Percentage shall then
take into account all Year(s) of Service with the Employer except
those specified in Section 2.7.
If an individual who ceases to be an Employee and is subsequently
rehired as an Employee enrolls (or re-enrolls) in the Plan, upon his
participation (or subsequent participation) his Vesting Percentage
shall then take into account all Year(s) of Service except those
specified in Section 2.7.
2.6 YEAR(S) OF SERVICE. The term Year(s) of Service means a
12-consecutive-month period during which an Employee has completed at
least 1,000 Hours of Service.
(A) Eligibility Computation Period.
For purposes of determining Years of Service and Breaks in
Service for eligibility, the twelve-consecutive-month period
shall begin with the date on which an Employee's employment
commenced and, where additional periods are necessary, on
succeeding anniversaries of his employment commencement date.
The employment commencement date is the date on which the
Employee first performs an Hour of Service for the Employer
maintaining the Plan.
The eligibility requirement specified in Article III is one or
more full Years of Service. Such requirement shall be met upon
completion of at least 1,000 Hours of Service for each Year of
Service specified.
(B) Vesting Computation Period.
In computing Years of Service and Breaks in Service for
vesting, the 12-consecutive-month period shall be the Plan
Year. However, active participation as of the last day of the
Plan Year is not required in order for a Participant to be
credited with a Year of Service for vesting purposes.
For purposes of the Vesting Computation Period, if any Plan
Year is less than 12-consecutive
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<PAGE> 20
months, and if a Participant would have been credited with a
Year of Service during the 12-consecutive-month period
beginning on the first day of the short Plan Year, then the
Participant will receive a Year of Service for the short Plan
Year. The Participant receives credit for an additional Year
of Service if the Participant would have been credited with a
Year of Service for the Plan Year immediately following the
short Plan Year.
(C) Contribution Computation Period.
For purposes of determining a Participant's eligibility to
receive a contribution made by the Employer, pursuant to
Article IV, which is conditioned upon a Year of Service
requirement, the twelve-consecutive-month period shall be any
Plan Year during which the Active Participant is credited with
at least 1,000 Hours of Service. However, when an Employee
first becomes a Participant or resumes active participation in
the Plan following a One-Year Break in Service on a date other
than the first day of the Plan Year, all Hours of Service
credited to the Participant during that Plan Year, including
those hours credited prior to the date the Employee enrolls
(or re-enrolls) as an Active Participant in the Plan, shall be
counted.
For purposes of the Contribution Computation Period, if any
Plan Year is less than 12 consecutive months, the number of
Hours of Service required to accrue a Year of Service, in such
short Plan Year, shall bear the same ratio to 1000 as the
number of days in the short Plan Year bears to 365.
2.7 EXCLUDED YEARS OF SERVICE. In determining the Vesting Percentage of an
Employee, all Years of Service with the Employer shall be taken into
account except:
o Plan Years during which a Participant did not complete at
least 1,000 Hours of Service.
2.8 PREDECESSOR ORGANIZATION SERVICE. For purposes of this Article,
Service with a predecessor organization of the Employer shall be
treated as Service with the Employer in any case in which the Employer
maintains the Plan of such predecessor organization.
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ARTICLE III
ELIGIBILITY, ENROLLMENT AND PARTICIPATION
3.1 ELIGIBILITY. Each Employee who was a Participant prior to the
Effective Date and who is in the Service of the Employer on the
Effective Date shall continue as a Participant in the Plan. Each other
Employee, including a Leased Employee, shall be eligible to become a
Participant as of the Effective Date or the Entry Date when he first
meets the following requirement(s):
o One Year of Service (as defined in section 2.6)
o Age 21
3.2 ENROLLMENT AND PARTICIPATION. Each eligible Employee may enroll as of
his Entry Date by completing and delivering to the Administrator an
enrollment form and, if applicable, a Salary Deferral Agreement. He
will then become a Participant as of his Entry Date.
3.3 RE-EMPLOYED EMPLOYEE. In the case of an individual who ceases to be an
Employee and is subsequently rehired as an Employee, the following
provisions shall apply in determining his eligibility to again
participate in the Plan:
(A) If the Employee had met the eligibility requirement(s)
specified in Section 3.1 prior to his separation from
employment, he shall become an Active Participant in the Plan
as of the date he is re-employed, after completing the
applicable form(s), in accordance with Section 3.2.
(B) If the Employee had not met the eligibility requirement(s)
specified in Section 3.1 prior to his separation from
employment, he shall be eligible to participate in the Plan on
the first Entry Date following his fulfillment of such
eligibility requirement(s).
For purposes of this Subsection, all Years of Service with the
Employer, including any Years of Service prior to any Breaks in
Service, shall be taken into account.
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<PAGE> 22
ARTICLE IV
CONTRIBUTIONS
4.1 ELECTIVE DEFERRAL CONTRIBUTIONS. Each Active Participant may enter
into a written Salary Deferral Agreement with the Employer in an
amount equal to not less than 0% nor more than 20% of his Compensation
for the Contribution Period. In consideration of such agreement, the
Employer will make a contribution for each Contribution Period on
behalf of the Participant in an amount equal to the total amount by
which the Participant's Compensation from the Employer was deferred
during the Contribution Period pursuant to the Salary Deferral
Agreement then in effect. Elective Deferral Contributions shall be
paid by the Employer to the Trust not less frequently than monthly,
but in no event later than 90 days following the date the amounts were
deferred.
Salary Deferral Agreements shall be governed by the following
provisions:
(A) Amounts contributed pursuant to a Salary Deferral Agreement
shall be 100% vested and non-forfeitable at all times.
(B) No Participant shall be permitted to have Elective Deferral
Contributions made under this Plan, or any other qualified
plan maintained by the Employer, during any taxable year, in
excess of the dollar limitation contained in section 402(g) of
the Code in effect at the beginning of the taxable year.
(C) Amounts contributed pursuant to a Salary Deferral Agreement,
which are not in excess of the limit described in Subsection
(B) above, shall be subject to the Limitations on Allocations
in accordance with Article V. Elective Deferral Contributions
that are in excess of the limit described in Subsection (B)
shall also be subject to the Limitations on Allocations in
accordance with Article V.
(D) A Salary Deferral Agreement may be changed by a Participant
four times during the Plan Year, on January 1, April 1, July 1
and October 1, by filing written notice thereof with the
Administrator. Such notice shall be effective, and the Salary
Deferral Agreement shall be changed on the date specified in
such notice or as soon as administratively possible, which
date must be at least 15 days after such notice is filed.
(E) Elective Deferral Contributions shall be subject to the Actual
Deferral Percentage Test limitations.
(F) Correction of Excess Contributions.
(1) If the Employer determines prior to the end of the
Plan Year that the Actual Deferral Percentage Test
may not be satisfied, the Employer may take the
corrective action specified in Section 4.12 of the
Plan.
(2) If, after the end of the Plan Year, the Employer
determines that the Plan will fail the Actual
Deferral Percentage Test, the Employer shall take the
corrective action specified in Section 4.14 or
Section 4.17 of the Plan, or a combination of such
corrective actions, in order to ensure that the Plan
does not fail the Actual Deferral Percentage Test for
the
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<PAGE> 23
Plan Year being tested.
4.2 MATCHING CONTRIBUTIONS. The Employer shall make a Matching
Contribution in an amount equal to $.50 for each $1.00 by which a
Participant defers his Compensation pursuant to a Salary Deferral
Agreement up to a maximum of 6% of his Compensation, subject to the
Limitations on Allocations specified in Article V. The Matching
Contribution shall be paid to the Trust not less frequently than
quarterly. Matching Contributions shall be subject to the Actual
Contribution Percentage Test. The Employer may designate at the time
of contribution that all or a portion of such Matching Contributions
be treated as Qualified Matching Contributions.
If the Employer determines prior to the end of the Plan Year that the
Actual Contribution Percentage Test may not be satisfied, the Employer
may take the corrective action specified in Section 4.13 of the Plan.
If, after the end of the Plan Year, the Employer determines that the
Plan will fail the Actual Contribution Percentage Test, the Employer
shall take the corrective action specified in Section 4.15 or Section
4.17 of the Plan, or a combination of such corrective actions, in
order to ensure that the Plan does not fail the Actual Contribution
Percentage Test for the Plan Year being tested.
Such Matching Contribution shall be allocated as of the last day of
the Contribution Period for which such contribution is made to each
Participant who:
o is an Active Participant as of the last day of the
Contribution Period.
Notwithstanding the above provision, an allocation will be made on
behalf of a Participant who dies, retires, or becomes disabled during
the Contribution Period.
4.3 NONELECTIVE CONTRIBUTIONS. The Employer may make a contribution under
the Plan for any Plan Year of an amount that the Employer's Board of
Directors shall determine by resolution. Such resolution shall either
specify a fixed amount or specify a definite formula by which a fixed
amount can be determined.
The Employer may designate at the time of contribution that all or a
portion of such Nonelective Contribution be treated as a Qualified
Nonelective Contribution.
Such Nonelective Contribution shall be allocated as of the last day of
the Plan Year for which such contribution is made to each Participant
who:
o has a Year of Service for contribution purposes, as defined
in Article II.
o is an Active Participant as of the last day of the Plan Year.
Notwithstanding the above provision, an allocation will be made on
behalf of a Participant who dies, retires, or becomes disabled during
the Plan Year.
For each Plan Year the contribution shall be allocated to each
Participant in the proportion that the Compensation paid to each
Participant during the Plan Year bears to the Compensation paid to all
such Participants, subject to the Limitations on Allocations specified
in Article V.
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The contribution as described above, for any Plan Year, shall be paid
to the Trust at the end of the Plan Year, or as soon as possible on or
after the last day of such Plan Year, but in any event not later than
the date which is prescribed by law for filing the Employer's income
tax return, including any extension thereof.
4.4 FAIL-SAFE CONTRIBUTION. The Employer reserves the right to make a
discretionary Nonelective Contribution to the Plan for any Plan Year,
if the Employer determines that such a contribution is necessary to
ensure that either the Actual Deferral Percentage Test or the Actual
Contribution Percentage Test will be satisfied for that Plan Year.
Such amount shall be designated by the Employer at the time of
contribution as a Qualified Nonelective Contribution and shall be
known as a Fail-Safe Contribution.
The Fail-Safe Contribution shall be made on behalf of all eligible
non-Highly Compensated Employees who are Participants and who are
considered under the Actual Deferral Percentage Test or the Actual
Contribution Percentage Test. This contribution shall be allocated to
the Participant's Account of each such Participant in an amount equal
to a fixed percentage of such Participant's Compensation. The fixed
percentage shall be equal to the minimum fixed percentage necessary to
be contributed by the Employer on behalf of each eligible non-Highly
Compensated Employee who is a Participant so that the Actual Deferral
Percentage Test or the Actual Contribution Percentage Test is
satisfied.
The Fail-Safe Contribution for any Plan Year as determined above shall
be paid to the Trust at the end of the Plan Year, or as soon as
possible on or after the last day of such Plan Year, but in no event
later than the date which is prescribed by law for filing the
Employer's income tax return, including any extensions thereof.
4.5 PROFITS NOT REQUIRED. Contributions to this Plan shall not be
precluded because the Employer does not have Considered Net Profits.
Notwithstanding the existence of Considered Net Profits, the Employer
may determine in its sole discretion that it will make no
contributions for such Plan Year.
4.6 PAYMENT OF EXPENSES. The Employer may contribute to the Plan the
amount necessary, to pay any applicable expense charges and
administration charges. In lieu of the Employer's contributing the
amount necessary to pay such charges, these expenses may be paid from
the Trust fund.
4.7 ALLOCATION OF FORFEITURES. The contributions made by the Employer
shall be reduced by any Forfeitures available as an Employer credit in
accordance with Section 9.3.
4.8 CREDITING OF ELECTIVE DEFERRAL AND OTHER CONTRIBUTIONS. Elective
Deferral Contributions and other contributions made by the Employer
shall be credited to the Participant Account of each Participant for
whom such contributions are made, in accordance with the provisions of
Article XIII.
4.9 ROLLOVER CONTRIBUTIONS. The Plan may receive Rollover Contributions on
behalf of an Employee. Receipt of a Rollover Contribution shall be
subject to the approval of the Plan Administrator. Before approving
the receipt of a Rollover Contribution, the Plan Administrator may
request any documents or other information from an Employee or
opinions of counsel which the Plan Administrator deems necessary to
establish that such amount is a Rollover Contribution.
A Participant's Account shall be maintained on behalf of each Employee
from whom Rollover Contributions are received, regardless of such
Employee's eligibility to participate in the Plan in accordance with
the requirements of Article III, and Rollover Contributions may be
invested in any manner authorized under the provisions of this Plan.
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<PAGE> 25
Rollover Contributions received from an Employee who is not otherwise
eligible to participate in the Plan may not be withdrawn in accordance
with the provisions of Article X until such Employee becomes a
Participant, except that such Employee may receive a distribution of
his Participant's Account if his Termination of Employment occurs.
Rollover Contributions shall be credited to the Participant's Account
and may be invested in any manner authorized under the provisions of
this Plan.
4.10 TRANSFERS. Without regard to the Limitations on Allocations imposed
under Article V, the Trustee may receive, directly from another
qualified pension or profit-sharing plan meeting the requirements of
Internal Revenue Code section 401(a), all or part of the entire amount
distributable on behalf of a Participant from such plan. Likewise,
the Trustee may receive Transfers representing the assets of any
predecessor plan.
Transfers may be invested in any manner authorized under the
provisions of this Plan.
4.11 SUSPENSION OF ELECTIVE DEFERRAL CONTRIBUTIONS. The following
provisions shall apply with respect to suspension of Elective Deferral
Contributions.
(A) Elective Suspension. An Active Participant may elect to
suspend his Salary Deferral Agreement for Elective Deferral
Contributions by filing a written notice thereof with the
Administrator at any time. The Salary Deferral Agreement
shall be suspended on the date specified in such notice, which
date must be at least 15 days after such notice is filed. The
notice shall specify the period for which such suspension
shall be effective. Such period must be a minimum of three
months and may extend indefinitely.
(B) Suspension for Leave. A Participant who is absent from
employment on account of an authorized leave of absence or
military leave shall have his Salary Deferral Agreement
suspended during such leave. Such suspension of contributions
shall be effective on the date payment of Compensation by the
Employer to him ceases, and shall remain in effect until
payment of Compensation is resumed.
(C) Withdrawal Suspension. An Active Participant who elects a
withdrawal in accordance with Article X may have his Salary
Deferral Agreement suspended on the date such election becomes
effective. Such suspension shall remain in effect for the
number of months specified therein.
The Participant may elect to reactivate his Salary Deferral Agreement
for Elective Deferral Contributions by filing a written notice
thereof with the Plan Administrator. The Salary Deferral Agreement
shall be reactivated on the January 1, April 1, July 1 and October 1
following the expiration of the suspension period described above.
4.12 LIMITATION OF ELECTIVE DEFERRAL CONTRIBUTIONS. If the Employer
determines prior to the end of the Plan Year that the Plan may not
satisfy the Actual Deferral Percentage Test for the Plan Year, the
Employer may require that the amount of Elective Deferral
Contributions being allocated to the accounts of Highly Compensated
Employees be reduced to the extent necessary to prevent Excess
Contributions from being made to the Plan.
Although the Employer may reduce the amount of Elective Deferral
Contributions that may be allocated to the Participant's Account of
Highly Compensated Employees, the affected Employees shall continue to
participate in the Plan. When the situation that resulted in the
reduction of Elective Deferral Contributions ceases to exist, the
Employer shall reinstate the amount of Elective Deferral Contributions
elected by the Participant in the Salary Deferral Agreement to the
fullest extent possible for all affected Participants in
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<PAGE> 26
a nondiscriminatory manner.
4.13 LIMITATION OF MATCHING CONTRIBUTIONS. If the Employer determines prior
to the end of the Plan Year that the Plan may not satisfy the Actual
Contribution Percentage Test for the Plan Year, the Employer may
require that the amount of Matching Contributions being allocated to
the Accounts of Highly Compensated Employees be reduced to the extent
necessary to prevent Excess Aggregate Contributions from being made to
the Plan.
4.14 CORRECTIVE DISTRIBUTION OF EXCESS CONTRIBUTIONS.
(A) The Employer may distribute Excess Contributions (and income
allocable thereto) to the appropriate Highly Compensated
Employee after the close of the Plan Year in which the Excess
Contribution arose and within 12 months after the close of
that Plan Year.
(B) The income allocable to Excess Contributions is equal to the
sum of the allocable gain or loss for the Plan Year and shall
be determined as follows:
(1) The income allocable to Excess Contributions is
determined by multiplying the income for the Plan
Year allocable to Deferral Percentage Amounts by a
fraction. The numerator of the fraction is the Excess
Contributions attributable to the Employee for the
Plan Year. The denominator of the fraction is equal
to the sum of (A) the total account balance of the
Employee attributable to Deferral Percentage Amounts
as of the beginning of the Plan Year, plus (B) the
Employee's Deferral Percentage Amounts for the Plan
Year.
(2) The allocable gain or loss for the period between the
end of the Plan Year and the date of distribution
shall not be taken into consideration when
determining the income allocable to Excess
Contributions.
(C) The amount of Excess Contributions to be distributed with
respect to an Employee for a Plan Year shall be reduced by
Excess Deferrals previously distributed to the Employee for
the Employee's taxable year ending with or within the Plan
Year.
(D) The distribution of Excess Contributions made to the Family
Members of a family group that was combined for purposes of
determining a Highly Compensated Employee's Actual Deferral
Ratio shall be allocated among the Family Members in
proportion to the Elective Deferral Contribution (including
any amounts required to be taken into account under
subparagraphs (B) (1) and (B) (2) of Section 1.8 of the Plan)
of each Family Member that is combined to determine the Actual
Deferral Ratio.
(E) A corrective distribution of Excess Contributions (and income)
shall be made without regard to any Participant or spousal
consent or any notice otherwise required under sections
411(a)(11) and 417 of the Code.
(F) Any Matching Contributions or Qualified Matching Contributions
that relate to the Excess Contribution being distributed shall
be forfeited. The Matching Contribution so forfeited shall be
in proportion to the applicable Employee's vested and
nonvested interest in Matching Contributions under the Plan
for the Plan Year in which the Excess Contribution arose.
Forfeitures of Matching Contributions or Qualified Matching
Contributions that relate to Excess Contributions shall be
applied to reduce Employer contributions or pay Plan expenses.
(G) In no case may the amount of Excess Contributions to be
distributed for a Plan Year with respect to any Highly
Compensated Employee exceed the amount of Elective Deferral
Contributions made on behalf of the Highly Compensated
Employee for the Plan Year.
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<PAGE> 27
(H) In the event of a complete termination of the Plan during the
Plan Year in which an Excess Contribution arose, the
corrective distribution must be made as soon as
administratively feasible after the date of the termination of
the Plan, but in no event later than 12 months after the date
of termination.
(I) Any distribution of less than the entire amount of Excess
Contributions with respect to any Highly Compensated Employee
shall be treated as a pro-rata distribution of Excess
Contributions and allocable income or loss.
4.15 CORRECTION OF EXCESS AGGREGATE CONTRIBUTIONS.
(A) Excess Aggregate Contributions may be corrected using one of
the methods described in subparagraphs (1) and (2) below. The
Employer shall elect the method of correction to be used and
shall apply such method to the correction of the Excess Annual
Contribution for the Plan Year.
(1) Method 1:
(a) The Excess Aggregate Contribution (and
income) shall be forfeited, if forfeitable,
or distributed on a pro-rata basis from the
Employee's Account attributable to
Contribution Percentage Amounts. The
distribution or forfeiture shall be made
after the close of the Plan Year in which the
Excess Aggregate Contribution arose and
within 12 months after the close of that Plan
Year. Whether an amount is distributed or
forfeited under this subparagraph (a) shall
be determined based on the rules set forth in
paragraph (B) of this section.
(2) Method 2:
(a) Any Matching Contributions (and Qualified
Matching Contributions, to the extent not
taken into account for purposes of the Actual
Deferral Percentage Test), and income
allocable thereto, shall be forfeited, if
forfeitable, or distributed to the
appropriate Highly Compensated Employee. The
distribution or forfeiture shall be made
after the close of the Plan Year in which the
Excess Aggregate Contribution arose and
within 12 months after the close of that Plan
Year. Whether an amount is forfeited or
distributed shall be determined under the
rules set forth in paragraph (B) of this
section.
(B) Determination of Distributable and Forfeitable Amounts. For
purposes of paragraph (A) of this section:
(1) An Excess Aggregate Contribution attributable to
vested Matching Contributions, Qualified Matching
Contributions (and, if applicable, Qualified
Nonelective Contributions and Elective Deferral
Contributions) shall be distributed to the
appropriate Highly Compensated Employee in accordance
with the terms of this section.
(2) An Excess Aggregate Contribution attributable to an
Employee's nonvested Matching Contributions shall be
forfeited in accordance with the terms of this
section.
(3) A Highly Compensated Employee's vested and nonvested
interest in Matching
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Contributions (and income allocable thereto)
attributable to Excess Aggregate Contributions shall
be based on the proportion that represents the
Employee's Vested Interest in Matching Contributions
under the Plan for the Plan Year in which the Excess
Aggregate Contribution arose.
(C) Forfeited Excess Aggregate Contributions. In accordance with
paragraph (B) of this section, the amount that represents the
Employee's nonvested interest in Matching Contributions (and
income), and is attributable to Excess Aggregate
Contributions, shall be forfeited and, as such, shall be
applied to reduce Employer contributions or pay expenses.
(D) Income Allocable to Excess Aggregate Contributions. For
purposes of this section, the income allocable to Excess
Aggregate Contributions is equal to the sum of the allocable
gain or loss for the Plan Year, and shall be determined as
follows:
(1) The income allocable to Excess Aggregate
Contributions is determined by multiplying the income
for the Plan Year allocable to Contribution
Percentage Amounts by a fraction. The numerator of
the fraction is the Excess Aggregate Contributions
for the Employee for the Plan Year. The denominator
of the fraction is equal to the sum of (A) the total
account balance of the Employee attributable to
Contribution Percentage Amounts as of the beginning
of the Plan Year, plus (B) the Contribution
Percentage Amounts for the Plan Year.
(2) The allocable gain or loss for the period between the
end of the Plan Year and the date of correction shall
not be taken into consideration when determining the
income allocable to Excess Aggregate Contributions.
(E) The distribution of Excess Aggregate Contributions (and
income) made to Family Members of a family group that was
combined for purposes of determining a Highly Compensated
Employee's Actual Contribution Ratio shall be allocated among
Family Members in proportion to the Contribution Percentage
Amounts (including any amounts required to be taken into
account under subparagraphs (B) (1) and (B) (2) of Section 1.5
of the Plan) of each Family Member that are combined to
determine the Actual Contribution Ratio.
(F) In the event of a complete termination of the Plan during the
Plan Year in which an Excess Aggregate Contribution arose, the
corrective distribution or forfeiture shall be made as soon as
administratively feasible after the date of termination of the
Plan, but in no event later than 12 months after the date of
termination.
(G) If the entire account balance of a Highly Compensated Employee
is distributed during the Plan Year in which the Excess
Aggregate Contribution arose, the distribution shall be deemed
to have been a corrective distribution of Excess Aggregate
Contributions (and income) to the extent that a corrective
distribution would otherwise have been required.
(H) Any distribution of less than the entire amount of Excess
Aggregate Contributions (and income) shall be treated as a
pro-rata distribution of Excess Aggregate Contributions and
allocable income or loss.
(I) In no case may the amount of Excess Aggregate Contributions
distributed to a Highly Compensated Employee exceed the amount
of Matching Contributions made on behalf of the Highly
Compensated Employee for the Plan Year.
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(J) A distribution of Excess Aggregate Contributions (and income)
shall be made under this section without regard to any notice
or consent otherwise required under sections 411(a)(11) and
417 of the Code.
4.16 CORRECTIVE DISTRIBUTION OF EXCESS DEFERRALS. Notwithstanding any other
provision of the Plan, Excess Deferrals, plus any income and minus any
loss allocable thereto, may be distributed to any Participant to whose
account Excess Deferrals were allocated for the individual's taxable
year. Such a corrective distribution shall be made in accordance with
this section.
(A) Correction of Excess Deferrals After Taxable Year.
(1) Not later than the March 15 following the close of a
Participant's taxable year, the Participant may
notify the Plan of the amount of Excess Deferrals
received by the Plan during that taxable year. The
notification shall be in writing, shall specify the
Participant's Excess Deferrals, and shall be
accompanied by the Participant's written statement
that if such amounts are not distributed, these
amounts, when added to all other Elective Deferral
Contributions made on behalf of the Participant
during the taxable year, shall exceed the dollar
limitation specified in section 402(g) of the Code.
(2) The Participant is deemed to have notified the Plan
of Excess Deferrals if, not later than the March 1
following the close of a Participant's taxable year,
the Employer notifies the Plan on behalf of the
Participant of the Excess Deferrals. Such Excess
Deferrals shall be calculated by taking into account
only Elective Deferral Contributions under the Plan
and any other plans of the Employer.
(3) Not later than the April 15 following the close of
the taxable year, the Plan shall distribute to the
Participant the amount of Excess Deferrals designated
under subparagraphs (1) or (2) above.
(B) Correction of Excess Deferrals During the Taxable Year. A
Participant who has an Excess Deferral during a taxable year
may receive a corrective distribution during the same year.
Such a corrective distribution shall be made if:
(1) The Participant designates the distribution as an
Excess Deferral. The designation shall be made in the
same manner as the notification described in
subparagraph (A) (1) of this section. The
Participant will be deemed to have designated the
distribution as an Excess Deferral if the Employer
makes the designation on behalf of the Participant to
the extent that the Participant has Excess Deferrals
for the taxable year calculated by taking into
account only Elective Deferral Contributions to the
Plan and other plans of the Employer.
(2) The corrective distribution is made after the date on
which the Plan received the Excess Deferral.
(3) The Plan designates the distribution as a
distribution of Excess Deferrals.
(C) If the Participant provides the Employer with satisfactory
evidence and written notice to demonstrate that all Elective
Deferral Contributions by the participant in this Plan and any
other qualified plan exceed the applicable limit under section
402(g) of the Code for such individual's taxable year, then
the Plan Administrator may (but is not required to) distribute
sufficient Elective Deferral Contributions (not to exceed the
amount of Elective Deferral Contributions actually contributed
on behalf of the Participant to this Plan during the
Participant's taxable year) from this
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<PAGE> 30
Plan to allow the Participant to comply with the applicable
limit. The evidence provided by the Participant must establish
clearly the amount of Excess Deferrals. The Participant must
present this evidence to the Plan Administrator by the March
1 following the end of the calendar year in which the Excess
Deferrals occurred.
(D) Income Allocable to Excess Deferrals. The income allocable to
Excess Deferrals is equal to the sum of allocable gain or loss
for the taxable year of the individual and shall be determined
as follows:
(1) The gain or loss allocable to Excess Deferrals is
determined by multiplying the income for the taxable
year allocable to Elective Deferral Contributions by
a fraction. The numerator of the fraction is the
Excess Deferrals by the Employee for the taxable
year. The denominator of the fraction is equal to the
sum of:
(a) The total account balance of the Employee
attributable to Elective Deferral
Contributions as of the beginning of the Plan
Year, plus
(b) The Employee's Elective Deferral
Contributions for the taxable year.
(2) The income allocable to Excess Deferrals shall not
include the allocable gain or loss for the period
between the end of the taxable year and the date of
distribution.
(E) No Employee or Spousal Consent Required. A corrective
distribution of Excess Deferrals (and income) shall be made
without regard to any notice or consent otherwise required
under sections 411(a)(11) and 417 of the Code.
(F) Any Matching Contributions or Qualified Matching Contributions
that relate to the Excess Deferral being distributed shall be
forfeited. The Matching Contribution so forfeited shall be in
proportion to the applicable Employee's vested and nonvested
interest in Matching Contributions under the Plan for the Plan
Year in which the Excess Deferral arose. Forfeitures of
Matching Contributions or Qualified Matching Contributions
that relate to Excess Deferrals shall be applied to reduce
Employer contributions or pay Plan expenses.
4.17 QUALIFIED CONTRIBUTIONS. In lieu of distributing Excess Contributions
as provided in Section 4.14 of the Plan, or Excess Aggregate
Contributions as provided in Section 4.15 of the Plan, the Employer
may take the actions specified below in order to satisfy the Actual
Deferral Percentage Test or the Actual Contribution Percentage Test,
or both, pursuant to the regulations under the Code.
(A) At the election of the Employer, Qualified Nonelective
Contributions or Qualified Matching Contributions, or both,
may be taken into account as Elective Deferral Contributions
for purposes of calculating the Actual Deferral Ratio of a
Participant.
The amount of Qualified Nonelective Contributions or Qualified
Matching Contributions made under the terms of this Plan and
taken into account as Elective Deferral Contributions for
purposes of calculating the Actual Deferral Ratio, subject to
such other requirements as may be prescribed by the Secretary
of the Treasury, shall be such Qualified Nonelective
Contributions or Qualified Matching Contributions, or both,
that are needed to meet the Actual Deferral Percentage Test.
(B) At the election of the Employer, Qualified Nonelective
Contributions or Elective Deferral Contributions, or both, may
be taken into account as Matching Contributions for purposes
of calculating the Actual Contribution Ratio of a Participant.
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<PAGE> 31
The amount of Qualified Nonelective Contributions or Elective
Deferral Contributions made under the terms of this Plan and
taken into account for purposes of calculating the Actual
Contribution Ratio, subject to such other requirements as may
be prescribed by the Secretary of the Treasury, shall be such
Qualified Nonelective Contributions or Elective Deferral
Contributions, or both, that are needed to meet the Actual
Contribution Percentage Test.
(C) Any Qualified Nonelective Contribution, Qualified Matching
Contribution, and Elective Deferral Contribution taken into
account under paragraphs (A) or (B) must be allocated to the
Employee's Account as of a date within the Plan Year in which
the Excess Contribution or Excess Aggregate Contribution arose
and must be paid to the Plan no later than the 12-month period
immediately following the Plan Year to which the contribution
relates.
4.18 MULTIPLE USE OF ALTERNATIVE LIMITATION.
(A) Multiple use of the alternative limitation occurs if all of
the conditions of this paragraph (A) are satisfied:
(1) One or more Highly Compensated Employee of the
Employer are eligible employees in both a cash or
deferred arrangement subject to section 401(k) and a
plan maintained by the Employer subject to section
401(m).
(2) The sum of the Actual Deferral Percentage of the
entire group of eligible Highly Compensated Employees
under the arrangement subject to section 401(k) and
the Actual Contribution Percentage of the entire
group of eligible Highly Compensated Employees under
the Plan subject to section 401(m) exceeds the
aggregate limit of paragraph (C) of this section.
(3) Actual Deferral Percentage of the entire group of
eligible Highly Compensated Employees under the
arrangement subject to section 401(k) exceeds the
amount described in section 401(k)(3)(A)(ii)(I).
(4) The Actual Contribution Percentage of the entire
group of eligible Highly Compensated Employees under
the arrangement subject to section 401(m) exceeds the
amount described in section 401(m)(2)(A)(i).
(B) For purposes of this section, the aggregate limit is the
greater of:
(1) The sum of-
(a) 1.25 times the greater of the relevant Actual
Deferral Percentage or the relevant Actual
Contribution Percentage, and
(b) Two percentage points plus the lesser of the
relevant Actual Deferral Percentage or the
relevant Actual Contribution Percentage. In
no event, however, may this amount exceed
twice the lesser of the relevant Actual
Deferral Percentage or the Actual
Contribution Percentage; or
(2) The sum of-
(a) 1.25 times the lesser of the relevant Actual
Deferral Percentage or the relevant Actual
Contribution Percentage, and
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<PAGE> 32
(b) Two percentage points plus the greater of the
relevant Actual Deferral Percentage or the
relevant Actual Contribution Percentage. In
no event, however, may this amount exceed
twice the greater of the relevant Actual
Deferral Percentage or the relevant Actual
Contribution Percentage.
(C) For purposes of paragraph (B) of this section, the term
"relevant Actual Deferral Percentage" means the Actual
Deferral Percentage of the group of Nonhighly Compensated
Employees under the arrangement subject to section 401(k) for
the Plan Year, and the term "relevant Actual Contribution
Percentage" means the Actual Contribution Percentage of the
group of Nonhighly Compensated Employees eligible under the
Plan subject to section 401(m) for the Plan Year beginning
with or within the Plan Year of the arrangement subject to
section 401(k).
(D) The Actual Deferral Percentage and Actual Contribution
Percentage of the group of eligible Highly Compensated
Employees are determined after use of Qualified Nonelective
Contributions and Qualified Matching Contributions to meet the
requirements of the Actual Deferral Percentage Test and after
use of Qualified Nonelective Contributions and Elective
Deferral Contributions to meet the requirements of the Actual
Contribution Percentage Test. The Actual Deferral Percentage
and Actual Contribution Percentage of the group of Highly
Compensated Employees are determined after any corrective
distribution or forfeiture of Excess Deferrals, Excess
Contributions, or Excess Aggregate Contributions and after
recharacterization of Excess Contributions required without
regard to this section. Only plans and arrangements maintained
by the Employer are taken into account under paragraph (B). If
the Employer maintains two or more cash or deferred
arrangements subject to section 401(k) that must be
mandatorily disaggregated pursuant to section
401(k)-1(g)(11)(iii) multiple use is tested separately with
respect to each plan.
(E) If multiple use of the alternative limit occurs with respect
to two or more plans or arrangements maintained by the
Employer, it shall be corrected by reducing the Actual
Contribution Percentage of Highly Compensated Employees in the
manner described in paragraph (F) of this section. Instead of
making this reduction, the Employer may eliminate the multiple
use of the alternative limitation by making Qualified
Nonelective Contributions to the Plan.
(F) The amount of the reduction by which each Highly Compensated
Employee's Actual Contribution Ratio is reduced shall be
treated as an Excess Aggregate Contribution. The Actual
Contribution Percentage of all Highly Compensated Employees
under the plan subject to reduction shall be reduced so that
there is no multiple use of the alternative limitation.
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ARTICLE V
LIMITATIONS ON ALLOCATIONS
5.1 LIMITATIONS ON ALLOCATIONS. Definitions - The following definitions
are atypical terms which refer only to terms used in the Limitations
on Allocations Sections of this Article V.
(A) Annual Additions. The term Annual Additions shall mean the sum
of the following amounts allocated on behalf of a Participant
for a Limitation Year:
(1) all contributions made by the Employer which shall
include:
o Elective Deferral Contributions, if any;
o Matching Contributions, if any;
o Qualified Matching Contributions, if any;
o Nonelective Contributions, if any;
o Qualified Nonelective Contributions, if any;
(2) all Forfeitures, if any;
(3) all Employee Contributions, if any.
For the purposes of this Article, Excess Amounts reapplied
under Section 5.2 (D) shall also be included as Annual
Additions. Also, for the purposes of this Article, Employee
Contributions are determined without regard to deductible
employee contributions within the meaning of section 72(o)(5)
of the Code.
Amounts allocated after March 31, 1984, to an individual
medical account, as defined in Internal Revenue Code section
415(l)(1), which is part of a defined benefit plan maintained
by the Employer, are treated as Annual Additions to a defined
contribution plan. Also, amounts derived from contributions
paid or accrued attributable to post-retirement medical
benefits allocated to the separate account of a key employee,
as defined in Internal Revenue Code section 419A(d)(3), under
a welfare benefit fund, as defined in Internal Revenue Code
section 419(e), maintained by the Employer, are treated as
Annual Additions to a defined contribution plan.
Contributions do not fail to be Annual Additions merely
because they are Excess Deferrals, Excess Contributions or
Excess Aggregate Contributions or merely because Excess
Contributions or Excess Aggregate Contributions are corrected
through distribution or recharacterization. Excess Deferrals
that are distributed in accordance with Section 4.16 of the
Plan are not Annual Additions.
Forfeited Matching Contributions that are forfeited because
the contributions to which they relate are treated as Excess
Aggregate Contributions, Excess Contributions, or Excess
Deferrals and that are reallocated to the Participant Accounts
of other Participants for the Plan Year in which the
forfeiture occurs, are treated as Annual Additions for the
Participants to whose accounts they are
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<PAGE> 34
reallocated and for the Participants from whose accounts they
are forfeited.
(B) Compensation. The term Compensation means wages within the
meaning of section 3401(a) of the Code for the purposes of
income tax withholding at the source but determined without
regard to any rules that limit the remuneration included in
wages based on the nature or location of the employment or the
services performed (such as the exception for agricultural
labor in section 3401(a)(2) of the Code).
For Limitation Years beginning after December 31, 1991, for
purposes of applying the limitations of this article,
Compensation for a Limitation Year is the Compensation
actually paid or made available during such Limitation Year.
(C) Defined Contribution Dollar Limitation. The term Defined
Contribution Dollar Limitation shall mean $30,000 or, if
greater, one-fourth of the defined benefit dollar limitation
set forth in Internal Revenue Code section 415(b)(1) as in
effect for the Limitation Year.
(D) Employer. The term Employer shall mean the Employer that
adopts this Plan. In the case of a group of employers which
constitutes a controlled group of corporations (as defined in
Internal Revenue Code section 414(b) as modified by section
415(h)), or which constitutes trades or business (whether or
not incorporated) which are under common control (as defined
in section 414(c) as modified by section 415(h)), or
affiliated service groups (as defined in section 414(m)) of
which the adopting Employer is a part, all such employers
shall be considered a single Employer for purposes of applying
the limitations of this Article.
(E) Excess Amount. The term Excess Amount shall mean the excess of
the Participant's Annual Additions for the Limitation Year
over the Maximum Permissible Amount.
(F) Limitation Year. The term Limitation Year shall mean the
calendar year.
(G) Maximum Permissible Amount. The term Maximum Permissible
Amount shall mean the lesser of (1) the Defined Contribution
Dollar Limitation, or (2) 25% of the Participant's
Compensation for the Limitation Year.
If a short Limitation Year is created because of an amendment
changing the Limitation Year to a different period of 12
consecutive months, the Maximum Permissible Amount for the
short Limitation Year will be the lesser of (1) the Defined
Contribution Dollar Limitation multiplied by a fraction, the
numerator of which is the number of months in the short
Limitation Year, and the denominator of which is 12, or (2)
25% of the Participant's Compensation for the short Limitation
Year.
5.2 LIMITATIONS ON ALLOCATIONS. If the Employer does not maintain any
qualified plan in addition to this Plan:
(A) The amount of Annual Additions which may be allocated under
this Plan on a Participant's behalf for a Limitation Year
shall not exceed the lesser of the Maximum Permissible Amount
or any other limitation contained in this Plan.
(B) Prior to the determination of the Participant's actual
Compensation for a Limitation Year, the Maximum Permissible
Amount may be determined on the basis of the Participant's
estimated annual Compensation. Such Compensation shall be
determined on a reasonable basis and shall be uniformly
determined for all Participants similarly situated. Any
employer contributions based on
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<PAGE> 35
estimated annual Compensation shall be reduced by any Excess
Amounts carried over from prior years.
(C) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for such
Limitation Year shall be determined on the basis of the
Participant's actual Compensation for such Limitation Year. In
the event a Participant separates from the Service of the
Employer prior to the end of the Limitation Year, the Maximum
Permissible Amount for such Participant shall be determined
prior to any distribution of his Participant's Account on the
basis of his actual Compensation. Any Excess Amounts shall be
disposed of in accordance with Section 5.2 (D).
(D) If there is an Excess Amount with respect to a Participant for
a Limitation Year as a result of a reasonable error in
estimating the Participant's annual compensation, an
allocation of forfeitures, a reasonable error in determining
the amount of elective deferrals (within the meaning of
section 402(g)(3) of the Code) that may be made with respect
to any individual under the limits of section 415 of the Code,
or under other limited facts and circumstances which the
commissioner finds justified, such Excess Amount shall be
disposed of as follows:
(1) If an Excess Amount exists, the Excess Amount in the
Participant's Account (excluding Elective Deferral
Contributions) shall be held unallocated in a
suspense account for the Limitation Year and
allocated and reallocated in the next Limitation Year
to all Participants in the Plan. The excess amount
must be used to reduce Employer Contributions for the
next Limitation Year (and succeeding Limitation
Years, as necessary) for all of the Participants in
the Plan. For purposes of this subparagraph, the
Excess Amount may not be distributed to Participants
or former Participants.
(2) If, after the application of subparagraph (1) an
Excess Amount still exists, then the Participant's
Elective Deferral Contributions (including earnings
and losses thereon) allocated for the Limitation Year
shall be returned to the Participant to the extent
that an Excess Amount exists. This distribution shall
be made as soon as administratively feasible after
the Excess Amount is determined. Any Elective
Deferral Contributions returned under this paragraph
shall be disregarded for purposes of the Actual
Deferral Percentage Test.
(3) Alternatively, the Plan Administrator may elect to
dispose of the Excess Amount by applying the
procedure in subparagraph (2) before applying the
procedure in subparagraph (1). If the Plan
Administrator makes this election, the Plan
Administrator must apply it uniformly to all
Participants in a Limitation Year.
(4) If a suspense account is in existence at any time
during a Limitation Year pursuant to this section, it
will not participate in the allocation of investment
gains or losses. If a suspense account is in
existence at any time during a particular Limitation
Year, all amounts in the suspense account must be
allocated and reallocated to Participants' Accounts
before any Employer Contributions which would
constitute Annual Additions may be made to the Plan
for that Limitation Year.
5.3 LIMITATIONS ON ALLOCATIONS. If the Employer maintains one or more
defined contribution plans in addition to this Plan:
(A) The amount of Annual Additions which may be allocated under
this Plan on a Participant's behalf for a Limitation Year,
shall not exceed the lesser of:
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<PAGE> 36
(1) The Maximum Permissible Amount, reduced by the sum of
any Annual Additions allocated to the Participant's
Account for the same Limitation Year under this Plan
and such other defined contribution plan; or
(2) Any other limitation contained in this Plan.
Prior to the determination of the Participant's actual
Compensation for the Limitation Year, the amounts referred to
in Subsection (1) above may be determined on the basis of the
Participant's estimated annual Compensation for such
Limitation Year. Such estimated annual Compensation shall be
determined for all Participants similarly situated.
Any contribution made by the Employer based on estimated
annual Compensation shall be reduced by any Excess Amounts
carried over from prior years, if applicable.
(B) As soon as is administratively feasible after the end of the
Limitation Year, the amounts referred to in Section 5.3 (A)
shall be determined on the basis of the Participant's actual
Compensation for such Limitation Year.
(C) If amounts are contributed to a Participant's Account under
this Plan on an allocation date which does not coincide with
the allocation date(s) for all such other plans, and if a
Participant's Annual Additions under this Plan and all such
other plans result in an Excess Amount, such Excess Amount
shall be deemed to have derived from those contributions last
allocated.
(D) If an Excess Amount was allocated to a Participant on an
allocation date of this Plan which coincides with an
allocation date of another plan, the Excess Amount
attributable to this Plan will be the product of (1) and (2)
below:
(1) The total Excess Amount allocated as of such date
(including any amount which would have been allocated
but for the limitations of Internal Revenue Code
section 415).
(2) The ratio of (1) the amount allocated to the
Participant as of such date under this Plan, divided
by (2) the total amount allocated as of such date
under all qualified defined contribution plans
(determined without regard to the limitations of
Internal Revenue Code section 415).
(E) Any Excess Amounts attributed to this Plan shall be disposed
of as provided in Section 5.2 (D).
5.4 LIMITATIONS ON ALLOCATIONS. If the Employer maintains a defined
benefit plan in addition to this Plan:
(A) If an individual is a Participant at any time in both this
Plan and a defined benefit plan maintained by the Employer,
the sum of the Defined Benefit Plan Fraction and the Defined
Contribution Plan Fraction for any year may not exceed 1.0. In
the event that the sum of the Defined Contribution Plan
Fraction and the Defined Benefit Plan Fraction exceeds 1.0,
the Defined Contribution Plan Fraction will be reduced until
the sum of the Defined Contribution Plan Fraction and the
Defined Benefit Plan Fraction does not exceed 1.0.
If an individual was a Participant in this Plan or in any
other defined contribution plan maintained by the Employer
which was in existence on July 1, 1982, the numerator of the
Defined Contribution Plan Fraction will be adjusted if the sum
of the Defined Contribution Plan Fraction and the Defined
Benefit Plan Fraction would otherwise exceed 1.0 under the
terms of this Plan.
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<PAGE> 37
Under the adjustment, an amount equal to the product of (1)
the excess of the sum of the Fractions over 1.0 times (2) the
denominator of the Defined Contribution Plan Fraction, will
be permanently subtracted from the numerator of the Defined
Contribution Plan Fraction. The adjustment is calculated
using the Fractions as they would be computed as of the later
of the end of the last Limitation Year beginning before
January 1, 1983, or June 30, 1983. This adjustment also will
be made if at the end of the last Limitation Year beginning
before January 1, 1984, the sum of the Fractions exceeds 1.0
because of accruals or additions that were made before the
limitations of this Article became effective to any plans of
the Employer in existence on July 1, 1982.
In addition, if an individual was a Participant in this Plan
or in any other defined contribution plan maintained by the
Employer which was in existence on May 6, 1986, the numerator
of the Defined Contribution Plan Fraction will be adjusted if
the Employer's defined benefit plan was also in existence on
May 6, 1986, and the sum of the Defined Plan Fraction and the
Defined Benefit Plan Fraction would otherwise exceed 1.0
under the terms of this Plan. Under the adjustment, an amount
equal to the product of (1) the excess of the sum of the
Fractions over 1.0 times (2) the denominator of the Defined
Contribution Plan Fraction, will be permanently subtracted from
the numerator of the Defined Contribution Plan Fraction. This
adjustment is calculated using the Fractions as they would be
computed as of the end of the last Limitation Year beginning
before January 1, 1987. In the event that a Participant's
accrued benefit as of December 31, 1986, under the defined
benefit plan exceeds the defined benefit dollar limitation
set forth in Internal Revenue Code section 415(b)(1), the
amount of that accrued benefit shall be used in both the
numerator and the denominator of the Defined Benefit Plan
Fraction in making this adjustment.
For purposes of this Section 5.4, all defined benefit plans
of the Employer, whether or not terminated, will be treated
as one defined benefit plan and all defined contribution
plans of the Employer, whether or not terminated, will be
treated as one defined contribution plan.
(B) The Defined Benefit Plan Fraction for any year is a fraction,
the numerator of which is the Participant's Projected Annual
Benefit under the defined benefit plan (determined as of the
close of the Limitation Year), and the denominator of which is
the lesser of (1) or (2) below:
(1) 1.25 times the dollar limitation in effect under
Internal Revenue Code section 415(b)(1)(A) on the
last day of the Limitation Year; or
(2) 1.4 times the amount which may be taken into account
under Internal Revenue Code section 415(b)(1)(B) with
respect to such Participant for the Limitation Year.
Notwithstanding the above, if the Participant was a
participant in one or more defined benefit plans maintained by
the Employer which were in existence on July 1, 1982, the
denominator of the Defined Benefit Plan Fraction will not be
less than 125% of the sum of the annual benefits under such
plans which the Participant had accrued as of the later of the
end of the last Limitation Year beginning before January 1,
1983 or June 30, 1983. The preceding sentence applies only if
the defined benefit plans individually and in the aggregate
satisfied the requirements of Internal Revenue Code section
415 as in effect at the end of the 1982 Limitation Year.
(C) A Participant's Projected Annual Benefit is equal to the
annual benefit to which the Participant would be entitled
under the terms of the defined benefit plan based upon the
following assumptions:
(1) The Participant will continue employment until
reaching Normal Retirement Age as determined under
the terms of the plan (or current age, if that is
later);
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(2) The Participant's Compensation for the Limitation
Year under consideration will remain the same until
the date the Participant attains the age described in
sub-division (1) of this subparagraph; and
(3) All other relevant factors used to determine benefits
under the plan for the Limitation Year under
consideration will remain constant for all future
Limitation Years.
(D) The Defined Contribution Plan Fraction for any Limitation Year
is a fraction, the numerator of which is the sum of the Annual
Additions to the Participant's Accounts in such Limitation
Year and for all prior Limitation Years, and the denominator
of which is the lesser of (1) or (2) below for such Limitation
Year and for all prior Limitation Years of such Participant's
employment (assuming for this purpose, that Internal Revenue
Code section 415(c) had been in effect during such prior
Limitation Years):
(1) 1.25 times the dollar limitation in effect under
Internal Revenue Code section 415(c)(1)(A) on the
last day of the Limitation Year; or
(2) 1.4 times the amount which may be taken into account
under Internal Revenue Code section 415(c)(1)(B) with
respect to such Participant for the Limitation Year.
For the purposes of determining these Limitations on
Allocations, any non-deductible employee contributions made
under a defined benefit plan will be considered to be a
separate defined contribution plan and will be considered to
be part of the Annual Additions for the appropriate Limitation
Year.
Annual Additions for any Limitation Year beginning before
January 1, 1987, shall not be recomputed to treat all Employee
Contributions as Annual Additions.
(E) Notwithstanding the foregoing, at the election of the Plan
Administrator, in computing the Defined Contribution Plan
Fraction with respect to any Plan Year ending after December
31, 1982, the denominator shall be an amount equal to the
product of:
(1) The denominator of the Defined Contribution Plan
Fraction, computed in accordance with the rules in
effect for the Plan Year ending in 1982; and
(2) the transition fraction, which is a fraction
(a) the numerator of which is the lesser of:
(i) $51,875, or
(ii) 1.4 times 25% of the Compensation of
the Participant for the Plan Year
ending in 1981, and
(b) the denominator of which is the lesser of:
(i) $41,500, or
(ii) 25% of the Compensation of the
Participant for the Plan Year ending
in 1981.
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ARTICLE VI
DISTRIBUTION OF BENEFITS
6.1 DISTRIBUTIONS IN GENERAL. Each Participant may elect, with his
Spouse's consent if required, a distribution in the form of an
Annuity, a single sum cash payment, Employer stock, or a combination
of the above. All distributions are subject to the provisions of
Article VIII, Joint and Survivor Annuity Requirements.
Distributions of Employer stock are limited to the value of the
Participant's Employer Stock Account and shall be made by the Trustee.
6.2 TIMING OF DISTRIBUTIONS. If the value of a Participant's Vested
Interest exceeds (or at the time of any prior distribution exceeded)
$3,500 and is immediately distributable (as defined in Section 8.5),
the Participant and his Spouse, if required, must consent to the
distribution before it is made.
Instead of consenting to a distribution, the Participant may make a
written election to defer the distribution for a specified period of
time ending no later than the Participant's Normal Retirement Age.
Such election to defer shall be irrevocable.
If the Participant and Spouse, if applicable, do not consent to a
distribution or if no election to defer is made within 90 days after
receiving a written explanation of the optional forms of benefit
available pursuant to Income Tax Regulation 1.411(a)(11), all benefits
shall be deferred to, and distribution shall be made as of the
Participant's Normal Retirement Age. The distribution will be made in
the form of a single sum cash payment (in the case of a Participant's
meeting the requirements of Section 8.1 (A)) or in accordance with
Section 8.2 (in the case of a Participant's not meeting the
requirements of Section 8.1 (A)), unless the Participant elects
another form of benefit within the 90-day period prior to the date the
distribution is made.
A Participant whose actual retirement date is on or after his Normal
Retirement Age may not elect to defer distribution of his benefit
beyond the date of his actual retirement.
If the value of a Participant's Vested Interest is $3,500 or less at
the time it becomes payable, the distribution shall be made in the
form of a single sum cash payment and shall be made upon such
Participant's Termination of Employment. Such a distribution may not
be deferred.
Unless the Participant elects otherwise, the payment of benefits under
this Plan to the Participant shall begin not later than the 60th day
after the close of the Plan Year in which the later of (A) or (B),
below, occurs:
(A) the date on which the Participant attains his Normal
Retirement Age or age 62, if later; or
(B) the date on which the Participant terminates his Service
(including Termination of Employment, death or Disability)
with the Employer.
Notwithstanding the foregoing, the failure of a Participant and
Spouse, if required, to consent to a distribution while a benefit is
immediately distributable shall be deemed to be an election to defer
commencement of payment of any benefit sufficient to satisfy the above
paragraph.
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6.3 DISTRIBUTION LIMITATION. Elective Deferral Contributions, Qualified
Nonelective Contributions and Qualified Matching Contributions, and
income allocable to each, are not distributable to a Participant or a
Beneficiary, in accordance with such Participant's or Beneficiary's
election, earlier than upon the Participant's Termination of
Employment, death, or disability.
Such amounts may also be distributed upon:
(A) Termination of the Plan without the establishment or
maintenance of a successor plan.
For purposes of this paragraph, a successor plan is any other
defined contribution plan maintained by the same employer.
However, if fewer than two percent of the Employees who are
eligible under the Plan at the time of its termination are or
were eligible under another defined contribution plan at any
time during the 24 month period beginning 12 months before the
time of the termination, the other plan is not a successor
plan. The term "defined contribution plan" means a plan that
is a defined contribution plan as defined in section 414(i) of
the Code, but does not include an employee stock ownership
plan as defined in section 4975(e) or 409 of the Code or a
simplified employee pension as defined in section 408(k) of
the Code. A plan is a successor plan only if it exists at the
time the Plan is terminated or within the period ending 12
months after distribution of all assets from the Plan.
A distribution may be made under this paragraph only if it is
a lump sum distribution. The term "lump sum distribution" has
the same meaning provided in section 402(e)(4) of the Code,
without regard to subparagraphs (A)(i) through (iv), (B), and
(H) of that section.
(B) The disposition by the Employer to an unrelated corporation of
substantially all the assets (within the meaning of section
409(b)(2) of the Code) used in the trade or business of the
Employer if the Employer continues to maintain this Plan after
the disposition. However, a distribution may be made under
this paragraph only to an Employee who continues employment
with the corporation acquiring such assets.
In addition, this requirement is satisfied only if the
purchaser does not maintain the Plan after the disposition. A
purchaser maintains the plan of the seller if it adopts the
plan or otherwise becomes an employer whose employees accrue
benefits under the Plan. A purchaser also maintains the Plan
if the Plan is merged or consolidated with, or any assets or
liabilities are transferred from the Plan to a plan maintained
by the purchaser in a transaction subject to section 414(l)(1)
of the Code. A purchaser is not treated as maintaining the
Plan merely because the Plan that it maintains accepts
rollover contributions of amounts distributed by the Plan.
For purposes of this paragraph, the sale of "substantially
all" the assets used in a trade or business means the sale of
at least 85 percent of the assets.
A distribution may be made under this paragraph only if it is
a lump sum distribution. The term "lump sum distribution" has
the same meaning provided in section 402(e)(4) of the Code,
without regard to subparagraphs (A)(i) through (iv), (B), and
(H) of that section.
(C) The disposition by the Employer to an unrelated entity or
individual of the Employer's interest in a subsidiary (within
the meaning of section 409(d)(3) of the Code) if the Employer
continues to maintain this Plan. However, a distribution may
be made under this paragraph only to an Employee who continues
employment with such subsidiary.
In addition, this requirement is satisfied only if the
purchaser does not maintain the Plan after the
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<PAGE> 41
disposition. A purchaser maintains the plan of the seller if
it adopts the plan or otherwise becomes an employer whose
employees accrue benefits under the Plan. A purchaser also
maintains the Plan if the Plan is merged or consolidated
with, or any assets or liabilities are transferred from the
Plan to a plan maintained by the purchaser in a transaction
subject to section 414(l)(1) of the Code. A purchaser is
not treated as maintaining the Plan merely because the Plan
that it maintains accepts rollover contributions of amounts
distributed by the Plan.
A distribution may be made under this paragraph only if it is
a lump sum distribution. The term "lump sum distribution" has
the same meaning provided in section 402(e)(4) of the Code,
without regard to subparagraphs (A)(i) through (iv), (B), and
(H) of that section.
(D) In the case of Elective Deferral Contributions only, the
attainment of age 59-1/2, as described in Section 10.1 of the
Plan.
(E) In the case of Elective Deferral Contributions only, the
hardship of the Participant, as described in Section 10.4 of
the Plan.
6.4 COMMENCEMENT OF DISTRIBUTIONS. Notwithstanding the provisions of the
preceding Timing of Distributions Section, distributions to a
Participant will commence no later than the date determined in
accordance with the provisions of this Section.
Distribution to a Participant must commence no later than the required
beginning date. The first required beginning date of a Participant is
the first day of April of the calendar year following the calendar
year in which the Participant attains age 70-1/2.
The required beginning date of a Participant who attains age 70-1/2
before January 1, 1988, shall be the first day of April of the
calendar year following the calendar year in which the later of
retirement or attainment of age 70-1/2 occurs, provided the
Participant was not a 5% owner in the Plan Year ending in the year in
which the Participant attained age 66-1/2 or any later Plan Year. A
Participant is treated as a 5% owner for purposes of this section if
such Participant is a 5% owner as defined in section 416(i) of the
Code (determined in accordance with section 416 but without regard to
whether the Plan is Top-Heavy). The required beginning date of a
Participant who is a 5% owner during any year beginning after December
31, 1979, is the first day of April following the later of:
(A) the calendar year in which the Participant attained 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.
Once distributions have begun to a 5% owner under this section, they
must continue to be distributed, even if the Participant ceases to be
a 5% owner in a subsequent year. Distribution to such Participant must
commence no later than the first day of April following the calendar
year in which the Participant's Termination of Employment occurs.
If distribution to any Participant is made in other than a single sum
payment, the second payment shall be distributed no later than the
December 31 following the April 1 by which the first payment was
required to be distributed. Each succeeding payment shall be
distributed no later than each December 31 thereafter.
6.5 DISTRIBUTION REQUIREMENTS.
(A) Except as otherwise provided in Article VIII, the requirements
of this Section shall apply to any
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distribution of a Participant's Accrued Benefit.
(B) All distributions required under this Article shall be
determined and made in accordance with the Income Tax
Regulations under section 401(a)(9), including the minimum
distribution incidental benefit requirement of section
1.401(a)(9)-2 of the regulations.
(C) Limits on Settlement Options. Distributions, if not made in a
lump sum, may only be made over one of the following periods
(or a combination thereof):
(1) the life of the Participant,
(2) the life of the Participant and a designated
Beneficiary,
(3) a period certain not extending beyond the life
expectancy of the Participant, or
(4) a period certain not extending beyond the joint and
last survivor expectancy of the Participant and a
designated Beneficiary.
(D) Minimum Amounts to be Distributed.
(1) If the Participant's entire Vested Interest is to be
distributed in other than a lump sum, then the amount
to be distributed each year must be at least an
amount equal to the quotient obtained by dividing the
Participant's entire Vested Interest by the life
expectancy of the Participant or the joint and last
survivor expectancy of the Participant and designated
Beneficiary. Life expectancy and joint and last
survivor expectancy are computed by the use of the
return multiples contained in section 1.72-9 of the
Income Tax Regulations. For purposes of this
computation, a Participant's life expectancy may be
recalculated no more frequently than annually;
however, the life expectancy of a Beneficiary other
than the Participant's Spouse may not be
recalculated.
(2) If the Participant's Spouse is not the designated
Beneficiary, the method of distribution selected must
assure that at least 50% of the present value of the
amount available for distribution is paid within the
life expectancy of the Participant.
(3) For calendar years beginning after December 31, 1988,
the amount to be distributed each year, beginning
with distributions for the first distribution
calendar year, shall not be less than the quotient
obtained by dividing the Participant's benefit by the
lesser of (1) the applicable life expectancy or (2)
if the Participant's Spouse is not the designated
Beneficiary, the applicable divisor determined from
the table set forth in Q&A-4 of section 1.401(a)(9)-2
of the Income Tax Regulations. Distributions after
the death of the Participant shall be distributed
using the applicable life expectancy in subsection
(d)(1) above as the relevant divisor without regard
to regulations section 1.401(a)(9)-2.
(4) The minimum distribution required for the
Participant's first distribution calendar year must
be made on or before the Participant's required
beginning date. The minimum distribution for other
calendar years, including the minimum distribution
for the distribution calendar year in which the
Employee's required beginning date occurs, must be
made on or before December 31 of that distribution
calendar year.
6.6 NON-TRANSFERABLE. The Participant's right to any Annuity payments,
benefits, and refunds is not transferable and shall be free from the
claims of all creditors to the fullest extent permitted by law.
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6.7 DEATH DISTRIBUTION PROVISIONS. If the Participant dies before
distribution of his Vested Interest commences, the following
provisions shall apply:
(A) If a distribution is to be made to a Beneficiary other than the
Surviving Spouse:
(1) If the present value of the Participant's Vested
Interest exceeds (or at the time of any prior
distribution exceeded) $3,500, unless the Beneficiary
elects another form of distribution, that portion of
the Participant's Vested Interest payable to the
Beneficiary will be distributed in the form of a
single sum cash payment within a reasonable period of
time after the Plan Administrator is notified of the
Participant's death.
(2) If the present value of the Participant's Vested
Interest is $3,500 or less at the time it becomes
payable, the distribution shall always be made in the
form of a single sum cash payment and shall be paid
within a reasonable period of time after the Plan
Administrator is notified of the Participant's death.
(B) If the distribution is to be made to a Beneficiary who is the
Surviving Spouse, such distribution will be made in accordance
with the following:
(1) If the Participant had never elected a life Annuity
form of distribution under the Plan:
(a) If the present value of the Participant's
Vested Interest exceeds (or at the time of
any prior distribution exceeded) $3,500,
unless the surviving spouse elects another
form of distribution, that portion of the
Participant's Vested Interest payable to the
Surviving Spouse will be distributed in the
form of a single sum cash payment within a
reasonable period of time after the Plan
Administrator is notified of the
Participant's death.
(b) If the present value of the Participant's
Vested Interest payable to the Surviving
Spouse is $3,500 or less at the time it
becomes payable, the distribution shall
always be made in the form of a single sum
cash payment and shall be made within a
reasonable period of time after the Plan
Administrator is notified of the
Participant's death.
(2) If the Participant had previously elected a life
Annuity form of distribution under the Plan:
(a) If the present value of the Participant's
Vested Interest exceeds (or at the time of
any prior distribution exceeded) $3,500 and
is immediately distributable (as defined in
Section 8.5), the Surviving Spouse must
consent to the distribution before it is
made. If the Surviving Spouse does not
consent to a distribution, all benefits shall
be deferred to a date that complies with the
terms of Section 6.8 (B).
The distribution shall be made in accordance
with the provisions of Section 8.3.
(b) If the present value of the Participant's
Vested Interest is $3,500 or less at the time
it becomes payable, the distribution shall
always be made in the form of a single sum
cash payment and shall be paid within a
reasonable period of time after the Plan
Administrator is notified of the
Participant's death.
6.8 DEATH DISTRIBUTION COMMENCEMENT DATE. Upon the death of the
Participant, the following distribution provisions shall take effect:
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(A) If the Participant dies after distribution of his entire
Vested Interest has commenced, the remaining portion of such
Vested Interest will continue to be distributed at least as
rapidly as under the method of distribution being used prior
to the Participant's death.
In no event shall distribution of the Participant's remaining
Vested Interest be made in a lump sum after the Participant's
death unless such distribution is consented to, in writing, by
the Participant's Surviving Spouse, if any.
(B) If the Participant dies before distribution of his Vested
Interest commences, the Participant's entire Vested Interest
will be distributed no later than five years after the
Participant's death except to the extent that an election is
made to receive distributions in accordance with (1) or (2)
below:
(1) If any portion of the Participant's Vested Interest
is payable to a designated Beneficiary, distributions
may be made in substantially equal installments over
the life or life expectancy of the designated
Beneficiary (or over a period not extending beyond
the life expectancy of such Beneficiary), commencing
no later than one year after the Participant's death;
(2) If the designated Beneficiary is the Participant's
Surviving Spouse, the date distributions are required
to begin in accordance with (1) above shall not be
earlier than the date on which the Participant would
have attained age 70-1/2. However, the Surviving
Spouse may elect, at any time following the
Participant's death, to defer the date on which
distributions will begin until no later than the date
on which the Participant would have attained age
70-1/2 and, if the Spouse dies before payments begin,
subsequent distributions shall be made as if the
Spouse had been the Participant.
(C) For purposes of (B) above, payments will be calculated by use
of the return multiples specified in section 1.72-9 of the
Income Tax Regulations. Life expectancy of a Surviving Spouse
may be recalculated annually; however, in the case of any
other designated Beneficiary, such life expectancy will be
calculated at the time payment first commences without further
recalculation.
(D) For purposes of this Section (Death Distribution Commencement
Date) any amount paid to a child of the Participant will be
treated as if it had been paid to the Surviving Spouse if the
amount becomes payable to the Surviving Spouse when the child
reaches the age of majority.
6.9 ALTERNATE PAYEE SPECIAL DISTRIBUTION. Distributions pursuant to
Section 16.8 may be made without regard to the age or employment
status of the Participant.
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ARTICLE VI-A
DIRECT ROLLOVERS
6A.1 Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a Distributee's election under this Article, a
Distributee may elect, at the time and in the manner prescribed by the
Plan Administrator, to have any portion of an Eligible Rollover
Distribution paid directly to an Eligible Retirement Plan specified by
the Distributee in a Direct Rollover, except as otherwise provided by
the Employer's administrative procedures as permitted by regulations.
In addition, a Distributee's election of a Direct Rollover shall be
subject to the following requirements:
(A) If the Distributee elects to have only a portion of an
Eligible Rollover Distribution paid to an Eligible Retirement
Plan in a Direct Rollover, that portion must be equal to at
least $500.
(B) If the entire amount of a Distributee's Eligible Rollover
Distribution is $500 or less, the distribution may not be
divided. Instead, the entire amount must either be paid to the
Distributee or to an Eligible Retirement Plan in a Direct
Rollover.
(C) A Distributee may not elect a Direct Rollover if the
Distributee's Eligible Rollover Distributions during a year
are reasonably expected by the Plan Administrator to total
less than $200 (or any lower minimum amount specified by the
Plan Administrator).
(D) A Distributee's election to make or not make a Direct Rollover
with respect to one payment in a series of periodic payments
shall apply to all subsequent payments in the series, except
that a Distributee shall be permitted at any time to change,
with respect to subsequent payments in the series of periodic
payments, a previous election to make or not make a Direct
Rollover. A change of election shall be accomplished by the
Distributee notifying the Plan Administrator of the change.
Such notice must be in the form and manner prescribed by the
Plan Administrator.
6A.2 Definitions.
(A) Direct Rollover: A Direct Rollover is a payment by the plan
to the Eligible Retirement Plan specified by the Distributee.
(B) 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 who is the alternate payee under a qualified domestic
relations order, as defined in section 414(p) of the Code, are
Distributees with regard to the interest of the Spouse or
former Spouse.
(C) Eligible Retirement Plan: An Eligible Retirement Plan is an
individual retirement account described in section 408(a) of
the code, an individual retirement annuity described in
section 408(b) of the Code, an annuity plan described in
section 403(a) of the Code, or a qualified trust described in
section 401(a) of the Code, that accepts the Distributee's
Eligible Rollover Distribution. However, in the case of an
Eligible Rollover Distribution to the Surviving Spouse, an
Eligible Retirement Plan is an individual retirement account
or an individual retirement annuity.
(D) 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
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does not include: any distribution that is one of a series of
substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
Distributee or the joint lives (or joint life expectancies)
of the Distributee and the Distributee's designated
beneficiary, or for a specified period of ten years or more;
any distribution to the extent such distribution is required
under section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
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ARTICLE VII
RETIREMENT BENEFITS
7.1 NORMAL RETIREMENT. A Participant who attains his Normal Retirement Age
shall have a Vesting Percentage of 100%. If a Participant retires
from the active Service of the Employer on his Normal Retirement Date,
he shall be entitled to receive a distribution of the entire value of
his Participant's Account as of his Normal Retirement Date.
7.2 EARLY RETIREMENT. A Participant who retires from the Service of the
Employer on his Early Retirement Date shall have a Vesting Percentage
of 100% and shall be entitled to receive a distribution of the entire
value of his Participant's Account as of his Early Retirement Date.
7.3 LATE RETIREMENT. A Participant may continue in the Service of the
Employer after his Normal Retirement Age, and in such event he shall
retire on his Late Retirement Date. Such Participant shall continue as
a Participant under this Plan until such Late Retirement Date. The
Participant shall have a Vesting Percentage of 100% and shall be
entitled to receive a distribution of the entire value of his
Participant's Account as of his Late Retirement Date.
7.4 DISABILITY RETIREMENT. A Participant who retires from the Service of
the Employer on account of Disability shall have a Vesting Percentage
of 100% and shall be entitled to receive a distribution of the entire
value of his Participant's Account as of his Disability Retirement
Date.
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ARTICLE VIII
JOINT AND SURVIVOR ANNUITY REQUIREMENTS
8.1 GENERAL. The provisions of this Article shall take precedence over any
conflicting provision in this Plan.
The provisions of this Article shall apply to any Participant who is
credited with at least one Hour of Service with the Employer on or
after August 23, 1984, and such other Participants as provided in
Section 8.7, unless:
(A) upon the death of the Participant the Participant's entire
Vested Interest will be paid to the Participant's Surviving
Spouse, but if there is no Surviving Spouse, or, if the
Surviving Spouse has already consented in a manner conforming
to a Qualified Election, then to the Participant's designated
Beneficiary;
(B) the Participant does not elect payments in the form of a Life
Annuity and has not previously elected payments in the form of
a Life Annuity under the Plan, and
(C) as to the Participant, the Plan is not a direct or indirect
transferee of a defined benefit plan, money purchase pension
plan (including a target benefit plan), stock bonus, or
profit-sharing plan which would otherwise provide for a Life
Annuity form of payment to the Participant.
8.2 PAYMENT OF QUALIFIED JOINT AND SURVIVOR ANNUITY. Unless an optional
form of benefit is selected pursuant to a Qualified Election within
the ninety-day period ending on the first day on which all events have
occurred which entitle the Participant to a benefit, a married
Participant's Vested Interest will be paid in the form of a Qualified
Joint and Survivor Annuity.
An unmarried Participant will be provided a single Life Annuity unless
the Participant elects another form of benefit during the applicable
Election Period.
8.3 PAYMENT OF QUALIFIED PRERETIREMENT SURVIVOR ANNUITY. Unless an
optional form of benefit has been selected within the Election Period
pursuant to a Qualified Election, if a married Participant dies before
his Annuity Starting Date, then the Participant's entire Vested
Interest shall be applied toward the purchase of an immediate Annuity
for the life of the Surviving Spouse. As an alternative to receiving
the benefit in this form of an Annuity, the Surviving Spouse may elect
to receive a single cash payment or any other form of payment provided
for in the Plan within a reasonable time after the Participant's
death.
8.4 DEFINITIONS.
(A) Election Period: The period which begins on the first day of
the Plan Year in which the Participant attains age 35 and ends
on the date of the Participant's death. If a Participant
separates from Service prior to the first day of the Plan Year
in which age 35 is attained, with respect to the account
balance as of the date of separation, the Election Period
shall begin on the date of separation.
A Participant who has not attained age 35 as of the end of a
Plan Year, may make a special Qualified Election to waive the
Qualified Preretirement Survivor Annuity for the period
beginning
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<PAGE> 49
on the date of such election and ending on the first day of
the Plan Year in which the Participant will attain age 35.
Such election shall not be valid unless the Participant
receives a written explanation of the Qualified Preretirement
Survivor Annuity in such terms as are comparable to the
explanation required under Section 8.6 (A). Qualified
Preretirement Survivor Annuity coverage will be automatically
reinstated as of the first day of the Plan Year in which
the Participant attains age 35. Any new waiver on or after
such date shall be subject to the full requirements of this
Article.
(B) Qualified Election: A waiver of a Qualified Joint and Survivor
Annuity or a Qualified Preretirement Survivor Annuity. Any
waiver of a Qualified Joint and Survivor Annuity or a
Qualified Preretirement Survivor Annuity shall not be
effective unless: (a) the Participant's Spouse consents in
writing to the election; (b) the election designates a
specific Beneficiary, including any class of Beneficiaries or
any contingent Beneficiaries, which may not be changed without
spousal consent (or the Spouse expressly permits designations
by the Participant without any further spousal consent); (c)
the Spouse's consent acknowledges the effect of the election;
and (d) the Spouse's consent is witnessed by a Plan
representative or notary public. Additionally, a Participant's
waiver of the Qualified Joint and Survivor Annuity shall not
be effective unless the election designates a form of benefit
payment which may not be changed without spousal consent (or
the Spouse expressly permits designations by the Participant
without any further spousal consent). If it is established to
the satisfaction of a Plan representative that such written
consent cannot be obtained because:
(1) there is no Spouse;
(2) the Spouse cannot be located;
(3) the Participant is legally separated or has been
abandoned within the meaning of local law, and the
Participant has a court order to such effect;
(4) of other circumstances as the Secretary of the
Treasury may by regulations prescribe,
the Participant's election to waive coverage will be
considered a Qualified Election.
Any consent by a Spouse obtained under this provision (or
establishment that the consent of a Spouse may not be
obtained) shall be effective only with respect to such Spouse.
A consent that permits designations by the Participant without
any requirement of further consent by such Spouse must
acknowledge that the Spouse has the right to limit consent to
a specific Beneficiary, and a specific form of benefit where
applicable, and that the Spouse voluntarily elects to
relinquish either or both of such rights. A revocation of a
prior waiver may be made by a Participant without the consent
of the Spouse at any time before the commencement of benefits.
The number of revocations shall not be limited. No consent
obtained under this provision shall be valid unless the
Participant has received notice as provided in Section 8.6
below.
(C) Qualified Joint and Survivor Annuity: An immediate Annuity
for the life of the Participant with a survivor Annuity for
the life of the Spouse which is not less than 50% and not more
than 100% of the amount of the Annuity which is payable during
the joint lives of the Participant and the Spouse and which is
the amount of benefit which can be purchased with the
Participant's entire Vested Interest. If no survivor Annuity
percentage has been specified in an election, the percentage
payable to the Spouse will be 50%.
Notwithstanding the above paragraph, a Qualified Joint and
Survivor Annuity for an unmarried
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Participant shall mean an Annuity for the life of the
Participant.
(D) Qualified Preretirement Survivor Annuity: A survivor Annuity
for the life of the Spouse in the amount which can be
purchased with the Participant's entire Vested Interest.
(E) Spouse (Surviving Spouse): The Spouse or Surviving Spouse of
the Participant. A former Spouse may be treated as the Spouse
or Surviving Spouse to the extent provided under a Qualified
Domestic Relations Order as described in Internal Revenue Code
section 414(p).
8.5 CONSENT REQUIREMENTS. Only the Participant need consent to the
commencement of a distribution in the form of a Qualified Joint and
Survivor Annuity while the account balance is immediately
distributable. Neither the consent of the Participant nor the
Participant's Spouse shall be required to the extent that a
distribution is required to satisfy section 401(a)(9) or section 415
of the Code. An account balance is immediately distributable if any
part of the account balance could be distributed to the Participant
(or Surviving Spouse) before the Participant attains (or would have
attained if not deceased) the later of Normal Retirement Age or age
62.
8.6 NOTICE REQUIREMENTS.
(A) In the case of a Qualified Joint and Survivor Annuity as
described in Section 8.4 (C), the Plan Administrator shall
provide each Participant within a reasonable period prior to
the commencement of benefits a written explanation of: (i)
the terms and conditions of a Qualified Joint and Survivor
Annuity; (ii) the Participant's right to make and the effect
of an election to waive the Qualified Joint and Survivor
Annuity form of benefit; (iii) the rights of a Participant's
Spouse; (iv) the right to make, and the effect of, a
revocation of a previous election to waive the Qualified Joint
and Survivor Annuity; (v) a general description of the
eligibility conditions and other material features of the
optional forms of benefit; and (vi) sufficient additional
information to explain the relative values of the optional
forms of benefit available to them under this Plan.
(B) In the case of a Qualified Preretirement Survivor Annuity as
described in Section 8.4 (D), the Plan Administrator shall
provide each Participant within the period beginning on the
first day of the Plan Year in which the Participant attains
age 32 and ending with the close of the Plan Year preceding
the Plan Year in which the Participant attains age 35, a
written explanation of the Qualified Preretirement Survivor
Annuity in such terms and in such manner as would be
comparable to the explanation provided for meeting the
requirements of Section 8.6 (A) to a Qualified Joint and
Survivor Annuity.
If a Participant enters the Plan after the first day of the
Plan Year in which the Participant attained age 32, the Plan
Administrator shall provide notice no later than the close of
the second Plan Year succeeding the entry of the Participant
in the Plan.
If a Participant enters the Plan after he has attained age 35,
the Plan Administrator shall provide notice within a
reasonable period of time following the entry of the
Participant in the Plan.
If a Participant's Termination of Employment occurs before the
Participant attains age 35, the Plan Administrator shall
provide notice within one year of such Termination of
Employment.
8.7 TRANSITIONAL RULES.
(A) Any living Participant not receiving benefits on August 23,
1984, who would otherwise not receive the benefits prescribed
by the previous Sections of this Article must be given the
opportunity to
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elect to have the prior Sections of this Article relating to
the Qualified Preretirement Survivor Annuity apply if such
Participant is credited with at least one Hour of Service
under this Plan or a predecessor plan in a Plan Year beginning
on or after January 1, 1976, and such Participant had at
least 10 Years of Service for vesting purposes when he
separated from Service.
(B) Any living Participant not receiving benefits on August 23,
1984, who was credited with at least one Hour of Service under
this Plan or a predecessor plan on or after September 2, 1974,
and who is not otherwise credited with any Service in a Plan
Year beginning on or after January 1, 1976, must be given the
opportunity to have his or her benefits paid in accordance
with Section 8.7 (D).
(C) The respective opportunities to elect (as described in
Sections 8.7 (A) and 8.7 (B) above) must be afforded to the
appropriate Participants during the period commencing on
August 23, 1984, and ending on the date benefits would
otherwise commence to said Participants.
(D) Any Participant who has elected pursuant to Section 8.7 (B) of
this Article and any Participant who does not elect under
Section 8.7 (A) or who meets the requirements of Section 8.7
(A) except that such Participant does not have at least 10
Years of Service for vesting purposes when he separates from
Service, shall have his benefits distributed in accordance
with all of the following requirements if benefits would have
been payable in the form of a life annuity:
(1) Automatic Joint and Survivor Annuity. If benefits in
the form of a life annuity become payable to a
married Participant who:
(a) begins to receive payments under the Plan on
or after Normal Retirement Age; or
(b) dies on or after Normal Retirement Age while
still working for the Employer; or
(c) begins to receive payments on or after the
Qualified Early Retirement Age; or
(d) separates from Service on or after attaining
Normal Retirement Age (or the Qualified Early
Retirement Age) and after satisfying the
eligibility requirements for the payment of
benefits under the Plan and thereafter dies
before beginning to receive such benefits;
then such benefits will be received under this Plan
in the form of a Qualified Joint and Survivor
Annuity, unless the Participant has elected otherwise
during the election period. The election period must
begin at least six months before the Participant
attains Qualified Early Retirement Age and end not
more than 90 days before the commencement of
benefits. Any election hereunder will be in writing
and may be changed by the Participant at any time.
(2) Election of Early Survivor Annuity: A Participant
who is employed after attaining the Qualified Early
Retirement Age will be given the opportunity to
elect, during the election period, to have a survivor
annuity payable on death. If the Participant elects
the survivor annuity, payments under such Annuity
must not be less than the payments which would have
been made to the Spouse under the Qualified Joint and
Survivor Annuity if the Participant had retired on
the day before his or her death. Any election under
this provision will be in writing and may be changed
by the Participant at any time. The election period
begins on the later of (1) the 90th day before the
Participant attains the Qualified Early Retirement
Age, or (2) the date on which participation begins,
and ends on the date the Participant terminates
employment.
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(3) For purposes of this Section 8.7 (D) :
(a) Qualified Early Retirement Age is the latest
of:
(i) the earliest date, under the Plan,
on which the Participant may elect
to receive retirement benefits; or
(ii) the first day of the 120th month
beginning before the Participant
reaches Normal Retirement Age; or
(iii) the date the Participant begins
participation.
(b) Qualified Joint and Survivor Annuity is an
Annuity for the life of the Participant with
a survivor annuity for the life of the
Spouse as described in Section 8.4 (C).
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ARTICLE IX
TERMINATION OF EMPLOYMENT
9.1 DISTRIBUTION. As of a Participant's Termination of Employment, he
shall be entitled to receive a distribution of his entire Vested
Interest. Such distribution shall be further subject to the terms and
conditions of Article VI.
If at the time of his Termination of Employment the Participant's
Vesting Percentage is not 100% and the Participant does not take a
distribution from the portion of his Vested Interest subject to the
Vesting Percentage, the non-vested portion of his Participant's
Account will become a Forfeiture upon the date the Participant incurs
five consecutive One-Year Breaks in Service.
If at the time of his Termination of Employment the Participant's
Vesting Percentage is not 100% and such Participant does take a
distribution from the portion of his Vested Interest subject to the
Vesting Percentage, or if the Participant's Vesting Percentage is 0%,
the non-vested portion of his Participant's Account will become a
Forfeiture immediately.
If the Participant, whose non-vested portion of his Participant's
Account became a Forfeiture in accordance with the terms of the
preceding paragraph, is later rehired by the Employer and re-enrolls
in the Plan, Subsection (A), (B) or (C) below, as applicable, will
apply:
(A) If the Participant was 0% vested at his Termination of
Employment and did not incur five consecutive One-Year Breaks
in Service after such date, the amount which became a
Forfeiture, if any, shall be restored by the Employer at the
time such Participant re-enrolls in the Plan. The Forfeiture,
so restored, shall be included as part of that portion of his
Participant's Account subject to the Vesting Percentage.
(B) If the Participant's Vesting Percentage was not 100% at his
Termination of Employment and if the Participant did not incur
five consecutive One-Year Breaks in Service after such date,
the Participant shall be entitled to repay the portion of the
distribution made at his Termination of Employment derived
from Employer Contributions. The portion of the repayment that
is attributable to amounts that were subject to the Vesting
Percentage will no longer be considered a distribution for
purposes of determining the Participant's Vested Interest. The
repayment of such portion must be made before the Participant
has incurred five consecutive One-Year Breaks in Service
following the date he received the distribution or five years
after the Participant is rehired by the Employer, whichever is
earlier.
If the Participant elects to make such repayment, the amount
which became a Forfeiture, if any, shall be restored by the
Employer at the same time such repayment is made. The
Forfeiture, so restored, and the repayment shall be included
as part of that portion of his Participant's Account subject
to the Vesting Percentage. However, if the Participant does
not elect to repay the distribution made in accordance with
this Article within the period of time specified above, that
Forfeiture shall remain a Forfeiture.
(C) If the Participant had incurred five consecutive One-Year
Breaks in Service after his Termination of Employment, the
amount which became a Forfeiture shall remain a Forfeiture and
such Participant shall be prohibited from repaying a
distribution made at his Termination of
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Employment.
9.2 NO FURTHER RIGHTS OR INTEREST. A Participant shall have no further
interest in or any rights to any portion of his Participant's Account
that becomes a Forfeiture due to his Termination of Employment once
the Participant incurs five consecutive One-Year Breaks in Service in
accordance with Article II.
9.3 APPLICATION OF FORFEITURES. Any Forfeiture arising in accordance with
the provisions of Section 9.1 shall be used by the Employer to reduce
and in lieu of the contributions made by the Employer next due under
Article IV, or to pay Plan expenses, at the earliest opportunity after
such Forfeiture becomes available.
The provisions of the preceding sentence notwithstanding, in the event
that a former Participant is rehired by the Employer and the Employer
is required by the provisions of Section 9.1 of this Plan to restore
the amount of a separate account that had been created upon such
Participant's prior Termination of Employment and later forfeited,
Forfeitures, if any, will first be used to restore such separate
account to its value as of such Participant's prior Termination of
Employment date. In the event that the available Forfeitures are not
sufficient to make such restoration, the Employer will make an
additional contribution sufficient to make such restoration.
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ARTICLE X
WITHDRAWALS
10.1 WITHDRAWAL AFTER AGE 59-1/2. A Participant who was a Participant in
the Talbert & Associates, Inc. Savings Plan and Trust prior to January
1, 1993 may elect to withdraw from his Participant's Account, at any
time, an amount which is equal to any whole percentage (not exceeding
100%) of his Vested Interest in his Participant's Account, as of
January 1, 1993, attributable to:
o Elective Deferral Contributions, including earnings
o Matching Contributions that are not designated as Qualified
Matching Contributions, including earnings
o Nonelective Contributions that are not designated as Qualified
Nonelective Contributions, including earnings.
10.2 WITHDRAWAL OF CONTRIBUTIONS AFTER 60 MONTHS OF PARTICIPATION. A
Participant who was a Participant in the Serv-Tech, Inc. Employee
401(k) Retirement Plan prior to January 1, 1993 and has been a
Participant for at least 60 consecutive months may elect to withdraw
from his Participant's Account, once every Plan Year, an amount equal
to any whole percentage (not exceeding 100%) of his Vested Interest in
his Participant's Account, as of January 1, 1993, attributable to the
value of:
o Matching Contributions that are not designated as Qualified
Matching Contributions, including earnings
o Nonelective Contributions that are not designated as Qualified
Nonelective Contributions, including earnings.
10.3 WITHDRAWAL FOR SERIOUS FINANCIAL HARDSHIP OF CONTRIBUTIONS OTHER THAN
ELECTIVE DEFERRAL CONTRIBUTIONS. In the event a Participant suffers a
Serious Financial Hardship, such Participant may withdraw a portion of
his Vested Interest attributable to the following to meet such need:
o Matching Contributions that are not designated as Qualified
Matching Contributions, including earnings
o Nonelective Contributions that are not designated as Qualified
Nonelective Contributions, including earnings
o Rollover Contributions, including earnings.
In no event may any such withdrawal exceed the amount required to meet
the immediate financial need created by the Serious Financial
Hardship.
Such Serious Financial Hardship must be shown by positive evidence
submitted to the Plan Administrator that the hardship is of sufficient
magnitude to impair the Participant's financial security. Withdrawals
shall be determined in a consistent and nondiscriminatory manner, and
shall not affect the Participant's right
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under the Plan to make additional withdrawals or to continue to be a
Participant.
10.4 WITHDRAWAL FOR SERIOUS FINANCIAL HARDSHIP OF ELECTIVE DEFERRAL
CONTRIBUTIONS. Distributions of Elective Deferral Contributions may be
made to a Participant in the event of a hardship. For purposes of this
section, a distribution is made on account of hardship only if the
distribution is made both on account of an immediate and heavy
financial need of the Employee and is necessary to satisfy the
financial need. In addition, any distribution on account of hardship
shall be limited to the distributable amount described in paragraph
(C) of this section.
(A) The following are the only financial needs considered
immediate and heavy for purposes of this section:
(1) Expenses for medical care described in section 213(d)
of the Code previously incurred by the Employee, the
Employee's Spouse, or any dependents of the Employee
(as defined in section 152 of the Code) or necessary
for these persons to obtain medical care described in
section 213(d) of the Code;
(2) Payment of tuition and related educational fees for
the next 12 months of post-secondary education for
the Employee, his Spouse, children, or dependents (as
defined in section 152 of the Code);
(3) Costs directly related to the purchase of a principal
residence for the Employee (excluding mortgage
payments); or
(4) Payments necessary to prevent the eviction of the
Employee from the Employee's principal residence or
foreclosure on the mortgage on that residence.
(B) The Participant shall specify on the application for a
hardship withdrawal whether the Participant elects the
provision of (1) or (2) below to be used in determining the
necessity of the hardship.
(1) A distribution will be considered as necessary to
satisfy an immediate and heavy financial need of the
Employee only if all of the following requirements
are satisfied:
(a) The hardship distribution is not in excess of
the amount of the immediate and heavy
financial need of the Employee. The amount of
an immediate and heavy financial need may
include the amounts necessary to apply any
federal, state, or local income taxes or
penalties reasonably anticipated to result
from the distribution.
(b) The Employee had obtained all distributions,
other than hardship distributions, and all
nontaxable (at the time of the loan) loans
currently available under all plans
maintained by the Employer.
(c) The Employee is suspended from making
Elective Deferral Contributions to the Plan
for at least 12 months after receipt of the
hardship distribution In addition, the
Employee must be prohibited under the terms
of the plan or an otherwise enforceable
agreement from making Elective Deferral
Contributions and Employee Contributions to
all other plans maintained by the Employer
for at least 12 months after receipt of the
hardship distribution.
For this purpose, the phrase "all other
plans of the Employer" means all qualified
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<PAGE> 57
and nonqualified plans of deferred
compensation maintained by the
Employer. The phrase includes a stock option,
stock purchase, or similar plan, or a cash
or deferred arrangement that is part of a
cafeteria plan within the meaning of section
125 of the Code. However, it does not include
the mandatory employee contribution part of a
benefit plan. It also does not include a
health or welfare benefit plan, including
one that is part of a cafeteria plan within
the meaning of section 125 of the Code.
(d) The Employee may not make Elective Deferral
Contributions to the Plan for the Employee's
taxable year immediately following the
taxable year of the hardship distribution in
excess of the applicable limit under section
402(g) of the Code for such taxable year less
the amount of such Employee's Elective
Deferral Contributions for the taxable year
of the hardship distribution. In addition,
all other plans maintained by the Employer
must limit the Employee's Elective Deferral
Contributions for the next taxable year to
the applicable limit under section 402(g) of
the Code for that year minus the Employee's
Elective Deferral Contributions for the year
of the hardship distribution.
(2) A distribution will be treated as necessary to
satisfy a financial need if the Employer relies upon
the Employee's written representation, unless the
Employer has actual knowledge to the contrary, that
the need cannot reasonably be relieved:
(a) Through reimbursement or compensation by
insurance or otherwise;
(b) By liquidation of the Employee's assets;
(c) By cessation of Elective Deferral
Contributions under the Plan; or
(d) By other distributions or nontaxable (at the
time of the loan) loans from plans maintained
by the Employer or by any other employer, or
by borrowing from commercial sources on
reasonable commercial terms in an amount
sufficient to satisfy the need.
A need cannot reasonably be relieved by one of the
actions listed above if the effect would be to
increase the amount of the need.
The amount of an immediate and heavy financial need
may include any amounts necessary to pay any federal,
state, or local income taxes or penalties reasonably
anticipated to result from the distribution.
(C) The distributable amount is equal to the Employee's total
Elective Deferral Contribution as of the date of distribution,
reduced by the amount of previous distributions of Elective
Deferral Contributions on account of hardship. The Employee's
total Elective Deferral Contributions shall not include income
allocable to such Elective Deferral Contributions.
10.5 WITHDRAWAL OF ROLLOVER CONTRIBUTIONS. Once during a Plan Year, at any
time, a Participant may elect to withdraw from his Participant's
Account an amount up to 100% of the value of that portion of his
account attributable to his Rollover Contributions as defined in
Article IV. Such an election shall become effective in accordance with
the Notification Section below.
10.6 NOTIFICATION. The Participant shall notify the Administrator in
writing of his election to make a
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withdrawal under the preceding provisions of this Article X. Any such
election shall be effective as of the date specified in such notice,
which date must be at least 15 days after such notice is filed.
Payment of the withdrawal shall be subject to the terms and conditions
of Article VI.
10.7 NON-REPAYMENT. Withdrawals made in accordance with this Article X may
not be repaid.
10.8 SPOUSAL CONSENT TO WITHDRAWAL. Prior to obtaining a withdrawal in
accordance with this Article X, a married Participant must obtain
spousal consent in accordance with the provisions of Article VIII
unless such Participant meets the requirements set forth in Sections
8.1 (A), (B) and (C).
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ARTICLE XI
FIDUCIARY DUTIES AND RESPONSIBILITIES
11.1 GENERAL FIDUCIARY STANDARD OF CONDUCT. Each Fiduciary of the Plan
shall discharge his duties hereunder solely in the interest of the
Participants and their Beneficiaries and for the exclusive purpose of
providing benefits to Participants and their Beneficiaries and
defraying reasonable expenses of administering the Plan. Each
Fiduciary shall act with the care, skill, prudence, and diligence
under the circumstances that a prudent man acting in a like capacity
and familiar with such matters would use in conducting an enterprise
of like character and with like aims, in accordance with the documents
and instruments governing this Plan, insofar as such documents and
instruments are consistent with this standard.
11.2 SERVICE IN MULTIPLE CAPACITIES. Any Person or group of persons may
serve in more than one fiduciary capacity with respect to this Plan.
11.3 LIMITATIONS ON FIDUCIARY LIABILITY. Nothing in this Plan shall be
construed to prevent any Fiduciary from receiving any benefit to which
he may be entitled as a Participant or Beneficiary in this Plan, so
long as the benefit is computed and paid on a basis which is
consistent with the terms of this Plan as applied to all other
Participants and Beneficiaries. Nor shall this Plan be interpreted to
prevent any Fiduciary from receiving any reasonable compensation for
services rendered, or for the reimbursement of expenses properly and
actually incurred in the performance of his duties with the Plan;
except that no Person so serving who already receives full-time pay
from an Employer shall receive compensation from this Plan, except for
reimbursement of expenses properly and actually incurred.
11.4 INVESTMENT MANAGER. When an Investment Manager has been appointed, he
is required to acknowledge in writing that he has undertaken a
Fiduciary responsibility with respect to the Plan.
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ARTICLE XII
THE ADMINISTRATOR
12.1 DESIGNATION AND ACCEPTANCE. The Employer shall designate a person or
persons to serve as Administrator under the Plan and such person, by
joining in the execution of this Plan and Trust Agreement accepts such
appointment and agrees to act in accordance with the terms of the
Plan.
12.2 DUTIES AND AUTHORITY. The Administrator shall administer the Plan in a
nondiscriminatory manner for the exclusive benefit of Participants and
their Beneficiaries.
The Administrator shall perform all such duties as are necessary to
operate, administer, and manage the Plan in accordance with the terms
thereof, including but not limited to the following:
(A) To determine all questions relating to a Participant's
coverage under the Plan;
(B) To maintain all necessary records for the administration of
the Plan;
(C) To compute and authorize the payment of retirement income and
other benefit payments to eligible Participants and
Beneficiaries;
(D) To interpret and construe the provisions of the Plan and to
make regulations which are not inconsistent with the terms
thereof; and
(E) To advise or assist Participants regarding any rights,
benefits, or elections available under the Plan.
The Administrator shall take all such actions as are necessary to
operate, administer, and manage the Plan as a retirement program which
is at all times in full compliance with any law or regulation
affecting this Plan.
The Administrator may allocate certain specified duties of plan
administration to an individual or group of individuals who, with
respect to such duties, shall have all reasonable powers necessary or
appropriate to accomplish them.
12.3 EXPENSES AND COMPENSATION. All expenses of administration may be paid
out of the Trust fund unless paid by the Employer. Such expenses shall
include any expenses incident to the functioning of the Administrator,
including, but not limited to, fees of accountants, counsel, and other
specialists and their agents, and other costs of administering the
Plan. Until paid, the expenses shall constitute a liability of the
Trust fund. However, the Employer may reimburse the Trust fund for any
administration expense incurred. Any administration expense paid to
the Trust fund as a reimbursement shall not be considered an Employer
Contribution. Nothing shall prevent the Administrator from receiving
reasonable compensation for services rendered in administering this
Plan, unless the Administrator already receives full-time pay from any
Employer adopting the Plan.
12.4 INFORMATION FROM EMPLOYER. To enable the Administrator to perform his
functions, the Employer shall supply full and timely information to
the Administrator on all matters relating to this Plan as the
Administrator may require.
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12.5 ADMINISTRATIVE COMMITTEE; MULTIPLE SIGNATURES. In the event that more
than one person has been duly nominated to serve on the Administrative
Committee and has signified in writing the acceptance of such
designation, the signature(s) of one or more persons may be accepted
by an interested party as conclusive evidence that the Administrative
Committee has duly authorized the action therein set forth and as
representing the will of and binding upon the whole Administrative
Committee. No person receiving such documents or written instructions
and acting in good faith and in reliance thereon shall be obliged to
ascertain the validity of such action under the terms of this Plan and
Trust. The Administrative Committee shall act by a majority of its
members at the time in office and such action may be taken either by a
vote at a meeting or in writing without a meeting.
12.6 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. The Administrator,
or any member of the Administrative Committee, may resign at any time
by delivering to the Employer a written notice of resignation, to take
effect at a date specified therein, which shall not be less than 30
days after the delivery thereof, unless such notice shall be waived.
The Administrator may be removed with or without cause by the Employer
by delivery of written notice of removal, to take effect at a date
specified therein, which shall be not less than 30 days after delivery
thereof, unless such notice shall be waived.
The Employer, upon receipt of or giving notice of the resignation or
removal of the Administrator, shall promptly designate a successor
Administrator who must signify acceptance of this position in writing.
In the event no successor is appointed, the Board of Directors of the
Employer will function as the Administrative Committee until a new
Administrator has been appointed and has accepted such appointment.
12.7 INVESTMENT MANAGER. The Administrator may appoint, in writing, an
Investment Manager or Managers to whom is delegated the authority to
manage, acquire, invest, or dispose of all or any part of the Trust
assets. With regard to the assets entrusted to his care, the
Investment Manager shall provide written instructions and directions
to the Trustee, who shall in turn be entitled to rely upon such
written direction. This appointment and delegation shall be evidenced
by a signed written agreement.
12.8 DELEGATION OF DUTIES. The Administrator shall have the power, to the
extent permitted by law, to delegate the performance of such Fiduciary
and non-Fiduciary duties, responsibilities, and functions as the
Administrator shall deem advisable for the proper management and
administration of the Plan in the best interests of the Participants
and their Beneficiaries.
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ARTICLE XIII
PARTICIPANTS' RIGHTS
13.1 GENERAL RIGHTS OF PARTICIPANTS AND BENEFICIARIES. The Plan is
established and the Trust assets are held for the exclusive purpose of
providing benefits for such Employees and their Beneficiaries as have
qualified to participate under the terms of the Plan.
13.2 FILING A CLAIM FOR BENEFITS. A Participant or Beneficiary or the
Employer acting in his behalf, shall notify the Administrator of a
claim of benefits under the Plan. Such request shall be in writing to
the Administrator and shall set forth the basis of such claim and
shall authorize the Administrator to conduct such examinations as may
be necessary to determine the validity of the claim and to take such
steps as may be necessary to facilitate the payment of any benefits to
which the Participant or Beneficiary may be entitled under the terms
of the Plan.
A decision by the Administrator shall be made promptly and not later
than 90 days after the Administrator's receipt of the claim of
benefits under the Plan, unless special circumstances require an
extension of the time for processing, in which case a decision shall
be rendered as soon as possible, but not later than 180 days after the
initial receipt of the claim of benefits.
13.3 DENIAL OF CLAIM. Whenever a claim for benefits by any Participant or
Beneficiary has been denied by a Plan Administrator, a written notice,
prepared in a manner calculated to be understood by the Participant,
must be provided, setting forth (1) the specific reasons for the
denial; (2) the specific reference to pertinent Plan provisions on
which the denial is based; (3) a description of any additional
material or information necessary for the claimant to perfect the
claim and an explanation of why such material or information is
necessary; and (4) an explanation of the Plan's claim review
procedure.
13.4 REMEDIES AVAILABLE TO PARTICIPANTS. A Participant or Beneficiary may
(1) request a review by a Named Fiduciary, other than the
Administrator, upon written application to the Plan; (2) review
pertinent Plan documents; and (3) submit issues and comments in
writing to a Named Fiduciary. A Participant or Beneficiary shall have
60 days after receipt by the claimant of written notification of a
denial of a claim to request a review of a denied claim.
A decision by a Named Fiduciary shall be made promptly and not later
than 60 days after the Named Fiduciary's receipt of a request for
review, unless special circumstances require an extension of the time
for processing, in which case a decision shall be rendered as soon as
possible, but not later than 120 days after receipt of a request for
review. The decision on review by a Named Fiduciary shall be in
writing and shall include specific reasons for the decision, written
in a manner calculated to be understood by the claimant, and specific
references to the pertinent Plan provisions on which the decision is
based.
A Participant or Beneficiary shall be entitled, either in his own name
or in conjunction with any other interested parties, to bring such
actions in law or equity or to undertake such administrative actions
or to seek such relief as may be necessary or appropriate to compel
the disclosure of any required information, to enforce or protect his
rights, to recover present benefits due to him, or to clarify his
rights to future benefits under the Plan.
13.5 REINSTATEMENT OF BENEFIT. In the event any portion of a distribution
which is payable to a Participant or a Beneficiary shall remain unpaid
on account of the inability of the Plan Administrator, after
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diligent effort, to locate such Participant or Beneficiary, the amount
so distributable shall be treated as a Forfeiture under the Plan. If a
claim is made by the Participant or Beneficiary for any benefit
forfeited under this section, such benefit shall be reinstated.
13.6 LIMITATION OF RIGHTS. Participation hereunder shall not grant any
Participant the right to be retained in the Service of the Employer or
any other rights or interest in the Plan or Trust fund other than
those specifically herein set forth.
13.7 PARTICIPANT CONTRIBUTIONS. Each Participant, regardless of his length
of Service with the Employer, shall be fully vested (100%) at all
times in any portion of his Participant's Account attributable to the
following:
o Rollover Contributions.
13.8 MERGERS OR TRANSFERS. In the case of any merger or consolidation with
or transfer of assets or liabilities to any other qualified plan after
September 2, 1974, the following conditions must be met:
(A) The sum of the account balances in each plan shall equal the
fair market value (determined as of the date of the merger or
transfer as if the plans had then terminated) of the entire
plan assets.
(B) The assets of each plan shall be combined to form the assets
of the plan as merged (or transferred).
(C) Immediately after the merger (or transfer), each Participant
in the plan merged (or transferred) shall have an account
balance equal to the sum of the account balances the
Participant had in the plans immediately prior to the merger
(or transfer).
(D) Immediately after the merger (or transfer) each Participant in
the plan merged (or transferred) shall be entitled to the same
optional benefit forms as he was entitled to immediately prior
to the merger (or transfer).
In the case of any merger or consolidation with or transfer of assets
or liabilities to any defined benefit plan after September 2, 1974,
one of the plans before such merger, consolidation, or transfer shall
be converted into the other type of plan and either the rules
described above, applicable to the merger of two defined contribution
plans, or the rules applicable to the merger of two defined benefit
plans, as appropriate, shall be applied.
13.9 PARTICIPANT'S ACCOUNT AND VALUATION. A Participant's Account shall be
maintained on behalf of each Participant until such account is
distributed in accordance with the terms of this Plan. At least once
per year, as of the last day of the Plan Year, each Participant's
Account shall be adjusted for any earnings, gains, losses,
contributions, withdrawals, and expenses, attributable to such Plan
Year, in order to obtain a new valuation of the Participant's Account.
13.10 INVESTMENT OF CONTRIBUTIONS. Each Participant shall have the exclusive
authority to direct the investment of contributions made to his
Participant's Account among the investment funds designated by the
Employer. The Participant shall elect, by written notice to the Plan
Administrator, to have a specified percentage invested in one or more
investment fund(s), as long as the designated percentage for each fund
is a whole number, and the sum of the percentages allocated is equal
to 100%.
On any normal business day during a Plan Year, the Participant may
change the amount of the contributions pursuant to the above paragraph
to be invested in a particular investment fund, subject to the rules
of the investment funds in which the Participant's Account is invested
or is to be invested.
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13.11 TRANSFERS BETWEEN INVESTMENT FUNDS. A Participant may designate the
amount of the contributions pursuant to Section 13.10 above to be
transferred between the investment funds designated by the Employer on
any normal business day during the Plan Year.
Notwithstanding the above, the transfer of amounts between investment
funds shall be subject to the rules of the investment funds in which
the Participant's Account is invested or is to be invested.
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ARTICLE XIV
AMENDMENT OR TERMINATION OF THE PLAN
14.1 AMENDMENT OF PLAN. The Employer shall have the right from time to time
to modify or amend, in whole or in part, any or all provisions of the
Plan, provided that a Board of Directors' resolution pursuant to such
modification or amendment shall first be adopted and provided further
that the modification or amendment is signed by the Employer, the
Administrator and the Trustee. Upon any such modification or amendment
the Administrator and the Trustee shall be furnished a copy thereof.
No amendment shall deprive any Participant or Beneficiary of any
Vested Interest hereunder. Any Participant having not less than three
Years of Service shall be permitted to elect, in writing, to have his
Vesting Percentage computed under the Plan without regard to such
amendment.
The period during which the election must be made by the Participant
shall begin no later than the date the Plan Amendment is adopted and
end no later than after the latest of the following dates:
(A) The date which is 60 days after the day the amendment is
adopted; or
(B) The date which is 60 days after the day the amendment becomes
effective; or
(C) The date which is 60 days after the day the Participant is
issued written notice of the amendment by the Employer or
Administrator.
Such written election by a Participant shall be made to the
Administrator.
No amendment to the Plan shall decrease a Participant's Account
balance or eliminate an optional form of distribution. Notwithstanding
the preceding sentence, a Participant's Account balance may be reduced
to the extent permitted under Internal Revenue Code section 412(c)(8).
Furthermore, no amendment to the Plan shall have the effect of
decreasing a Participant's Vested Interest determined without regard
to such amendment as of the later of the date such amendment is
adopted or the date it becomes effective.
14.2 CONDITIONS OF AMENDMENT. The Employer shall not make any amendment
which would cause the Plan to lose its status as a qualified plan
within the meaning of section 401(a) of the Code.
14.3 TERMINATION OF THE PLAN. The Employer intends to continue the Plan
indefinitely for the benefit of its Employees, but reserves the right
to terminate the Plan at any time by resolution of its Board of
Directors. Upon such termination, the liability of the Employer to
make contributions hereunder shall terminate.
14.4 FULL VESTING. Upon the termination or partial termination of the Plan,
or upon complete discontinuance of Employer contributions, the rights
of all affected Participants in and to the amounts credited to each
such Participant's Account shall be 100% vested and nonforfeitable.
14.5 DISTRIBUTIONS UPON PLAN TERMINATION. If this Plan is terminated and
the Employer does not maintain or establish another defined
contribution plan, pursuant to Code section 401(k)(10)(A)(i), each
Participant shall receive a total distribution, in the form of a
lump-sum distribution as defined in Code section 401(k)(10)(B)(ii), of
his Participant's Account in accordance with the terms and conditions
of Article VI.
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However, if this Plan is terminated and the Employer does maintain or
establish another defined contribution plan as discussed in the above
paragraph, or if the Plan is only partially terminated, each
Participant shall receive a total distribution of his Participant's
Account, excluding any amounts attributable to Elective Deferral
Contributions and contributions made by the Employer designated as
401(k) contributions in accordance with the terms and conditions of
Article VI. In such a situation, any amounts in a Participant's
Account attributable to Elective Deferral Contributions and
contributions made by the Employer designated as 401(k) contributions
may be distributed only upon the occurrence of an event described in
Article VI.
No Participant and/or spousal consent will be required for a
distribution where no successor plan exists. However, if the Employer
does maintain a successor plan, Participant and/or spousal consent is
required for a distribution exceeding $3,500. The Participant's
Account will be transferred to such successor plan if the required
consents are not received.
14.6 APPLICATION OF FORFEITURES. Upon the termination of the Plan, any
Forfeitures which have not been applied as of such termination to
reduce the contribution made by the Employer shall be credited on a
pro rata basis to the Participant's Account of the then Active
Participants in the same manner as the last contribution made by the
Employer under the Plan.
14.7 APPROVAL BY THE INTERNAL REVENUE SERVICE. Notwithstanding any other
provisions of this Plan, the Employer's adoption of this Plan is
subject to the condition precedent that the Employer's Plan shall be
approved and qualified by the Internal Revenue Service as meeting the
requirements of section 401(a) of the Internal Revenue Code and that
the Trust established hereunder shall be entitled to exemption under
the provisions of section 501(a). In the event the Plan initially
fails to qualify and the Internal Revenue Service issues a final
ruling that the Employer's Plan or Trust fails to so qualify as of the
Effective Date, all liability of the Employer to make further
contributions hereunder shall cease. The Plan Administrator, Trustee
and any other Named Fiduciary shall be notified immediately by the
Employer, in writing, of such failure to qualify. Upon such
notification, the value of the Participants' Accounts shall be
distributed in cash to the Employer, subject to the terms and
conditions of Article VI.
That portion of such distribution which is attributable to Participant
Contributions as specified in Section 13.7, if any, shall be paid to
the Participant, and the balance of such distribution shall be paid to
the Employer.
14.8 SUBSEQUENT UNFAVORABLE DETERMINATION. If the Employer is notified
subsequent to initial favorable qualification that the Plan is no
longer qualified within the meaning of section 401(a) of the Internal
Revenue Code, or that the Trust is no longer entitled to exemption
under the provisions of section 501(a), and if the Employer shall fail
within a reasonable time to make any necessary changes in order that
the Plan and/or Trust shall so qualify, the Participants' Accounts
shall be fully vested and nonforfeitable and shall be disposed of as
if the Plan had terminated, in the manner set forth in this Article
XIV.
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ARTICLE XV
SUBSTITUTION OF PLANS
15.1 SUBSTITUTION OF PLANS. Subject to the provisions of Section 13.8 the
Employer may substitute an individually designed plan or a master or
prototype plan for this Plan without terminating this Plan as embodied
herein and this shall be deemed to constitute an amendment and
restatement in its entirety of this Plan as heretofore adopted by the
Employer; provided, however, that the Employer shall have certified to
the Trustee that this Plan is being continued on a restated basis
which meets the requirements of section 401(a) of the Internal Revenue
Code and ERISA.
15.2 TRANSFER OF ASSETS. Upon 90 days written notification from the
Employer and the Trustee that a different plan meeting the
requirements set forth in Section 15.1 above has been executed and
entered into by the Administrator and the Employer, and after the
Trustee has been furnished the Employer's certification in writing
that the Employer intends to continue the Plan as a qualified Plan
under section 401(a) of the Internal Revenue Code and ERISA, assets
which represent the value of all Participant's Accounts may be
transferred in accordance with the instructions received from or on
behalf of the Employer. The Trustee may rely fully on the
representations or directions of the Employer with respect to any such
transfer and shall be fully protected and discharged with respect to
any such transfer made in accordance with such representations,
instructions, or directions.
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ARTICLE XVI
MISCELLANEOUS
16.1 NON-REVERSION. This Plan has been established by the Employer for the
exclusive benefit of the Participants and their Beneficiaries. Except
as otherwise provided in Sections 14.7, 16.7, and 16.8, under no
circumstances shall any funds contributed hereunder, at any time,
revert to or be used by the Employer, nor shall any such funds or
assets of any kind be used other than for the benefit of the
Participants or their Beneficiaries.
16.2 GENDER AND NUMBER. When necessary to the meaning hereof, and except
when otherwise indicated by the context, either the masculine or the
neuter pronoun shall be deemed to include the masculine, the feminine,
and the neuter, and the singular shall be deemed to include the
plural.
16.3 REFERENCE TO THE CODE AND ERISA. Any reference to any section of the
Internal Revenue Code, ERISA, or to any other statute or law shall be
deemed to include any successor law of similar import.
16.4 GOVERNING LAW. The Plan and Trust shall be governed and construed in
accordance with the laws of the state where the Trustee has its
principal office if the Trustee is a corporation or an association,
otherwise under the laws of the state where the Employer has its
principal office.
16.5 COMPLIANCE WITH THE CODE AND ERISA. This Plan is intended to comply
with all requirements for qualification under the Internal Revenue
Code and ERISA, and if any provision hereof is subject to more than
one interpretation or any term used herein is subject to more than one
construction, such ambiguity shall be resolved in favor of that
interpretation or construction which is consistent with the Plan being
so qualified. If any provision of the Plan is held invalid or
unenforceable, such invalidity or unenforceability shall not affect
any other provisions, and this Plan shall be construed and enforced as
if such provision had not been included.
16.6 NON-ALIENATION. It is a condition of the Plan, and all rights of each
Participant shall be subject thereto, that no right or interest of any
Participant in the Plan shall be assignable or transferable in whole
or in part, either directly or by operation of law or otherwise,
including, but without limitation, execution, levy, garnishment,
attachment, pledge, bankruptcy or in any other manner, and no right or
interest of any Participant in the Plan shall be liable for or subject
to any obligation or liability of such Participant. The preceding
sentence shall not preclude the enforcement of a federal tax levy made
pursuant to section 6331 of the Code or the collection by the United
States on a judgement resulting from an unpaid tax assessment.
16.7 CONTRIBUTION RECAPTURE. Notwithstanding any other provisions of this
Plan, (1) in the case of a contribution which is made by an Employer
by a mistake of fact, Section 16.1 shall not prohibit the return of
such contribution to the Employer within one year after the payment of
the contribution, and (2) if a contribution is conditioned upon the
deductibility of the contribution under section 404 of the Code, then,
to the extent the deduction is disallowed, Section 16.1 shall not
prohibit the return to the Employer of such contribution (to the
extent disallowed) within one year after the disallowance of the
deduction. The amount which may be returned to the Employer is the
excess of (1) the amount contributed over (2) the amount that would
have been contributed had there not occurred a mistake of fact or a
mistake in determining the deduction. Earnings attributable to the
excess contribution may not be returned to the Employer, but losses
attributable thereto must reduce the amount to be so returned.
Furthermore, if the withdrawal of the amount attributable to the
mistaken contribution would cause the balance of the individual
account of any
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Participant to be reduced to less than the balance which would have
been in the account had the mistaken amount not been contributed, then
the amount to be returned to the Employer would have to be limited so
as to avoid such reduction.
16.8 QUALIFIED DOMESTIC RELATIONS ORDERS. Notwithstanding any other
provisions of this Plan, the Participant's Account may be segregated
and distributed pursuant to a Qualified Domestic Relations Order
within the meaning of Internal Revenue Code section 414(p). The Plan
Administrator shall establish procedures for determining if a Domestic
Relations Order is qualified within the meaning of section 414(p).
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ARTICLE XVI-A
TOP-HEAVY PROVISIONS
16A.1 DEFINITIONS. The following definitions are atypical terms used only in
this Article XVI-A.
(A) Compensation. The term Compensation, whenever used in this
Article XVI-A, means Compensation as defined in Article V of
the Plan, but includes the amount of any elective
contributions made by the Employer on the Employee's behalf to
a cafeteria plan established in accordance with the provisions
of Code section 125, a qualified cash or deferred arrangement
in accordance with the provisions of Code section 402(e)(3), a
simplified employee pension plan in accordance with the
provisions of Code section 402(h), or a tax sheltered annuity
plan maintained in accordance with the provisions of Code
section 403(b).
(B) Key Employee. The term Key Employee means any Employee or
former Employee (including deceased Employees) of the Employer
who at any time during the Plan Year or the four preceding
Plan Years was:
(1) An officer of the Employer, but in no event if there
are more than 500 Employees, shall more than 50
Employees be considered Key Employees. If there are
less than 500 Employees, in no event shall the
greater of three Employees or 10% of all Employees,
be taken into account under this Subsection as Key
Employees. If the number of officers is limited by
the terms of the preceding sentence, the Employees
with the highest Compensation will be considered to
be officers.
In no event shall an officer whose annual
Compensation is less than 50% of the dollar
limitation in effect under Code section 415(b)(1)(A)
as adjusted from time to time, be a Key Employee for
any such Plan Year.
In making a determination under this Subsection,
Employees who have not completed six months of
Service by the end of the applicable Plan Year,
Employees who normally work less than 17-1/2 hours
per week, Employees who normally work less than six
months during a year, Employees who have not attained
21, and nonresident aliens who receive no earned
income from U.S. sources, shall be excluded.
Also excluded under the above paragraph are Employees
who are covered by an agreement which the Secretary
of Labor finds to be a collective bargaining
agreement. Such Employees will be excluded only if
retirement benefits were the subject of good faith
bargaining, 90% of the Employees of the Employer are
covered by the agreement, and the Plan covers only
Employees who are not covered by the agreement.
(2) One of the 10 Employees who has annual Compensation
greater than the amount in effect under Internal
Revenue Code section 415(c)(1)(A) and who owns (or is
considered to own within the meaning of Internal
Revenue Code section 318, as modified by section
416(i)(1)(B)(iii)) both more than 1/2% interest and
the largest interest in the Employer. If two or more
Employees own equal interests in the Employer, the
ranking of ownership share will be in descending
order of such Employees' Compensation. If the
Employer is other than a corporation, the term
"interest" as used herein shall refer to capital or
profits
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interest.
(3) An Employee who owns (or is considered to own within
the meaning of Internal Revenue Code section 318, as
modified by section 416(i)(1)(B)(iii)) more than 5%
of the outstanding stock of the Employer or stock
possessing more than 5% of the total combined voting
power of all stock of the Employer. If the Employer
is other than a corporation, an Employee who owns, or
is considered to own, more than 5% of the capital or
profits interest in the Employer. The determination
of 5% ownership shall be made separately for each
member of a controlled group of corporations (as
defined in Code section 414(b)), or of a group of
trades or businesses (whether or not incorporated)
that are under common control (as defined in Code
section 414(c)), or of an affiliated service group
(as defined in Code section 414(m)).
(4) An Employee who owns (or is considered to own within
the meaning of Internal Revenue Code section 318, as
modified by section 416(i)(1)(B)(iii)) more than 1%
of the outstanding stock of the Employer or stock
possessing more than 1% of the total combined voting
power of all stock of the Employer, and whose annual
Compensation is more than $150,000. If the Employer
is other than a corporation, an Employee who owns, or
is considered to own, more than 1% of the capital or
profits interest in the Employer, and whose annual
Compensation is more than $150,000.
For the purposes of paragraphs (2), (3) and (4) above, if an
Employee's ownership interest changes during a given Plan
Year, his ownership interest for that Plan Year is the largest
interest owned at any time during the Plan Year.
The Beneficiary of any deceased Employee who was a Key
Employee shall be considered a Key Employee for the same
period as the deceased Employee would have been so considered.
(C) Non-Key Employee. The term Non-Key Employee means any Employee
or former Employee of the Employer who is not a Key Employee.
The Beneficiary of any deceased Employee who is a Non-Key
Employee shall be considered a Non-Key Employee for the same
period as the deceased Employee would have been so considered.
(D) Determination Date. The term Determination Date means, with
respect to a Plan Year, the last day of the preceding Plan
Year, or, in the case of the first Plan Year of a plan, the
last day of the first Plan Year.
(E) Valuation Date. The term Valuation Date means, with respect to
a Plan Year, the last day of the preceding Plan Year and is
the date on which Account Balances are valued for the purpose
of determining the Plan's Top-Heavy status.
(F) Account Balance. The term Account Balance means the value of
the Participant's Account standing to the credit of a
Participant, a former Participant, or the Beneficiary of a
former Participant, as the case may be, as of the Valuation
Date. Such Account Balance shall include any contributions due
as of the Determination Date and all distributions made to the
Participant (or former Participant or Beneficiary, as the case
may be) during the Plan Year or the preceding four Plan Years,
except for distributions of Related Rollovers. However, the
Account Balance shall not include any deductible Employee
Contributions made pursuant to Internal Revenue Code section
219 or Unrelated Rollovers made to the Plan after December 31,
1983.
A Related Rollover is a Rollover Contribution or Transfer that
either was not initiated by the
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Employee or was made to a plan maintained by the same Employer.
An Unrelated Rollover is a Rollover Contribution or Transfer
that was initiated by the Employee and was made from a plan
maintained by one employer to a plan maintained by another
employer.
For purposes of this Subsection (F), the term Employer shall
include all employers that are required to be aggregated in
accordance with Internal Revenue Code sections 414(b), (c) or
(m).
(G) Required Aggregation Group. The term Required Aggregation
Group means all of the plans of the Employer which cover a Key
Employee, including any such plan maintained by the Employer
pursuant to the terms of a collective bargaining agreement,
and each other plan of the Employer which enables any plan in
which a Key Employee participates to satisfy the requirements
of Internal Revenue Code sections 401(a)(4) or 410.
(H) Permissive Aggregation Group. The term Permissive Aggregation
Group means all of the plans of the Employer which are
included in the Required Aggregation Group plus any plans of
the Employer which provide comparable benefits to the benefits
provided by the plans in the Required Aggregation Group and
are not included in the Required Aggregation Group, but which
satisfy the requirements of Internal Revenue Code sections
401(a)(4) and 410 when considered together with the Required
Aggregation Group, including any plan maintained by the
Employer pursuant to a collective bargaining agreement which
does not include a Key Employee.
(I) Top-Heavy Plan. The Plan is Top-Heavy if it meets the
requirements of Section 16A.2.
(J) Super Top-Heavy Plan. The Plan is Super Top-Heavy if it meets
the requirements of Section 16A.3.
(K) Terminated Plan. A plan shall be considered to be a
Terminated Plan if it:
(1) has been formally terminated;
(2) has ceased crediting service for benefit accruals and
vesting; or
(3) has been or is distributing all plan assets to
Participants (or Beneficiaries) as soon as
administratively possible.
With the exception of the Minimum Employer Contribution
Requirements and the Minimum Vesting Requirements, the
Top-Heavy provisions of this Article XVI-A will apply to any
Terminated Plan which was maintained at any time during the
five years ending on the Determination Date.
(L) Frozen Plan. A plan shall be considered to be a Frozen Plan if
all benefit accruals have ceased but all assets have not been
distributed to Participants or Beneficiaries. The Top-Heavy
provisions of this Article XVI-A will apply to any such Frozen
Plan.
16A.2 TOP-HEAVY PLAN STATUS. This Plan shall be determined to be Top-Heavy
if, as of the Determination Date, the aggregate of the Account
Balances of Key Employees exceeds 60% of the aggregate of the Account
Balances of all Employees covered by the Plan. The determination of
whether the Plan is Top-Heavy shall be made after aggregating all
plans in the Required Aggregation Group, and after aggregating any
other plans which are in the Permissive Aggregation Group, if such
permissive aggregation thereby eliminates the Top-Heavy status of any
plan within such Required Aggregation Group.
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In determining whether this Plan is Top-Heavy, the Account Balance of
a former Key Employee who is now a Non-Key Employee will be
disregarded. Likewise, for Plan Years beginning after December 31,
1984, the Account Balance of any Employee who has not performed an
Hour of Service during the five-year period ending on the
Determination Date will be excluded.
16A.3 SUPER TOP-HEAVY PLAN STATUS. This Plan shall be determined to be Super
Top-Heavy if, as of the Determination Date, the Plan would meet the
test specified in Section 16A.2 above, if 90% were substituted for 60%
in each place where it appears. The Plan may be permissively
aggregated in order to avoid being Super Top-Heavy.
16A.4 TOP-HEAVY REQUIREMENTS. Notwithstanding anything in the Plan to the
contrary, if the Plan is Top-Heavy with respect to any Plan Year
beginning after December 31, 1983, then the Plan shall meet the
following requirements for such Plan Year:
(A) Compensation Limit. The annual Compensation of each
Participant taken into account under the Plan shall not exceed
$150,000; however, such dollar limitation shall be adjusted to
take into account any adjustments made by the Secretary of the
Treasury or his delegate pursuant to Internal Revenue Code
section 416(d)(2).
(B) Minimum Employer Contribution Requirements. A Minimum Employer
Contribution of 3% of each Eligible Employee's Compensation
will be made on behalf of each Eligible Employee in the Plan.
If the actual Employer Contribution made or required to be
made for Key Employees is less than 3%, the Minimum Employer
Contribution required hereunder shall not exceed the
percentage contribution made for the Key Employee for whom the
percentage of Employer Contributions and Forfeitures relative
to the first $150,000 of Compensation is the highest for the
Plan Year after taking into account contributions or benefits
under other qualified plans in the Plan's Required Aggregation
Group.
However, if a Participant in this Plan is also a participant
in a defined benefit plan maintained by the Employer, such
Participant shall receive the Top-Heavy minimum benefit under
the defined benefit plan in lieu of the Minimum Employer
Contribution described herein. Such minimum benefit will be
equal to the Participant's average yearly Compensation during
his five highest-paid consecutive years, multiplied by the
lesser of 2% per Year of Service or 20%. Compensation periods
and Years of Service to be taken into account in the
calculation of this benefit shall be subject to any
limitations set forth in the defined benefit plan.
For any Limitation Year in which this Plan is Top-Heavy but
not Super Top-Heavy, the Minimum Employer Contribution shall
be increased to 4% of each Eligible Employee's Compensation in
order to preserve the use of the factor 1.25 in the
denominators of the fractions described in Section 5.4 (B) (1)
and Section 5.4 (D) (1). A Participant who receives the
Top-Heavy minimum benefit in lieu of the Minimum Employer
Contribution shall receive an increased minimum benefit equal
to the Participant's average yearly Compensation during his
five highest-paid consecutive years, multiplied by the lesser
of 3% per Year of Service or 20% plus one percentage point (to
a maximum of 10 percentage points) for each year that this
Plan is maintained. Compensation periods and Years of Service
to be taken into account in the calculation of this increased
minimum benefit shall be subject to any limitations set forth
in the defined benefit plan.
For any Limitation Year in which this Plan is Super Top-Heavy,
the factor of 1.25 in the denominators of the fractions
described in Sections 5.4 (B) (1) and 5.4 (D) (1) shall be
reduced
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to 1.0. The Minimum Employer Contribution payable in such
years shall be 3% of each Eligible Employee's Compensation
and the defined benefit Top-Heavy minimum benefit shall be
average Compensation multiplied by the lesser of 2% per Year
of Service or 20%.
Eligible Employees are all Non-Key Employees who are
Participants in the Plan as of the last day of the Plan Year
regardless of whether they had completed 1,000 Hours of
Service during the Plan Year. Also included are Non-Key
Employees who would have been Participants as of the last day
of the Plan Year except:
. The Employee's Compensation was below a required
minimum level; or
. The Employee chose not to make Elective Deferral
Contributions when he was eligible to do so.
Elective Deferral Contributions and Matching Contributions
made to Key Employees shall be taken into account as Employer
Contributions allocated to such Key Employees when determining
whether a lower Minimum Employer Contribution is permissible
for purposes of this section. However, Elective Deferral
Contributions made by Non-Key Employees shall not be used
towards satisfying the Minimum Employer Contribution required
to be allocated to Non-Key Employees pursuant to this section.
Matching Contributions made on behalf of Non-Key Employees
may, at the option of the Employer, be used to satisfy the
Minimum Employer Contribution requirement. However, for Plan
Years beginning after December 31, 1988, to the extent that
Matching Contributions are used for this purpose, they shall
not be used to satisfy the Actual Contribution Percentage
Test.
(C) Minimum Vesting Requirements. Vesting shall continue to be
determined in accordance with the schedule in Article I of
this Plan if this Plan is determined to be Top Heavy.
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ARTICLE XVII
TRUST AGREEMENT
17.1 CREATION AND ACCEPTANCE OF TRUST. The Trustee, by joining in the
execution of the Plan and trust agreement, accepts the Trust hereby
created and agrees to act in accordance with the express terms and
conditions herein stated.
17.2 TRUSTEE CAPACITY; CO-TRUSTEES. The Trustee may be a bank, trust
company or other corporation possessing trust powers under applicable
state or federal law or one or more individuals or any combination
thereof.
When two or more persons serve as Trustee, they are specifically
authorized, by a written agreement between themselves, to allocate
specific responsibilities, obligations or duties among themselves. An
original copy of such written agreement is to be delivered to the
Administrator.
17.3 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR TRUSTEE. Any Trustee
may resign at any time by delivering to the Administrator a written
notice of resignation, to take effect at a date specified therein,
which shall not be less than 30 days after the delivery thereof,
unless such notice shall be waived.
The Trustee may be removed with or without cause by the Board of
Directors by delivery of a written notice of removal, to take effect
at a date specified therein, which shall not be less than 30 days
after delivery thereof, unless such notice shall be waived.
In the case of the resignation or removal of a Trustee, the Trustee
shall have the right to a settlement of its account, which may be
made, at the option of the Trustee, either (1) by judicial settlement
in an action instituted by the Trustee in a court of competent
jurisdiction, or (2) by written agreement of settlement between the
Trustee and the Administrator.
Upon such settlement, all right, title and interest of such Trustee in
the assets of the Trust and all rights and privileges under this
Agreement theretofore vested in such Trustee shall vest in the
successor Trustee, and thereupon all future liability of such Trustee
shall terminate; provided, however, that the Trustee shall execute,
acknowledge and deliver all documents and written instruments which
are necessary to transfer and convey the right, title and interest in
the Trust assets, and all rights and privileges to the successor
Trustee.
The Board of Directors, upon receipt of notice of the resignation or
removal of the Trustee, shall promptly designate a successor Trustee,
whose appointment is subject to acceptance of this Trust in writing
and shall notify in writing the insurance company of such successor
Trustee.
17.4 TAXES, EXPENSES AND COMPENSATION OF TRUSTEE. The Trustee shall deduct
from and charge against the Trust fund any taxes paid by it which may
be imposed upon the Trust fund or the income thereof or which the
Trustee is required to pay with respect to the interest of any person
therein.
The Trustee shall be paid such reasonable compensation as shall from
time to time be agreed upon in writing by the Employer and the
Trustee. An individual serving as Trustee who already receives
full-time pay from the Employer shall not receive compensation from
the Plan. In addition, the Trustee shall be
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<PAGE> 76
reimbursed for any reasonable expenses, including reasonable counsel
fees incurred by it as Trustee. Such compensation and expenses shall
be paid from the Trust fund unless paid or advanced by the Employer.
17.5 TRUSTEE ENTITLED TO CONSULTATION. The Trustee shall be entitled to
advice of counsel, which may be counsel for the Plan or the Employer,
in any case in which the Trustee shall deem such advice necessary.
With the exception of those powers and duties specifically allocated
to the Trustee by the express terms of this Plan, it shall not be the
responsibility of the Trustee to interpret the terms of the Plan or
Trust and the Trustee may request, and is entitled to receive guidance
and written direction from the Administrator on any point requiring
construction or interpretation of the Plan documents.
17.6 RIGHTS, POWERS AND DUTIES OF TRUSTEE. The Trustee shall have the
following rights, powers, and duties:
(A) The Trustee shall be responsible for the safekeeping and
administering of the assets of this Plan and Trust in
accordance with the provisions of this Agreement and any
amendments thereto. The duties of the Trustee under this
Agreement shall be determined solely by the express provisions
of this Agreement and no further duties or responsibility
shall be implied. Subject to the terms of this Plan and Trust,
the Trustee shall be fully protected and shall incur no
liability in acting in reliance upon the written instructions
or directions of the Administrator or a duly designated
Investment Manager or any other Named Fiduciary.
(B) The Trustee shall have all powers necessary or convenient for
the orderly and efficient performance of its duties hereunder,
including but not limited to those specified in this section.
The Trustee may appoint one or more administrative agents or
contract for the performance of such administrative and
service functions as it may deem necessary for the effective
installation and operation of the Plan and Trust.
(C) The Trustee shall have the power to collect and receive any
and all monies and other property due hereunder and to give
full discharge and acquittance therefor; to settle, compromise
or submit to arbitration any claims, debits or damages due or
owing to or from the Trust; to commence or defend suits or
legal proceedings wherever, in its judgment, any interest of
the Trust requires it; and to represent the Trust in all suits
or legal proceedings in any court of law or equity or before
any other body or tribunal. It shall have the power generally
to do all acts, whether or not expressly authorized, which the
Trustee in the exercise of its Fiduciary responsibility may
deem necessary or desirable for the protection of the Trust
and the assets thereof.
(D) The Trustee may temporarily hold cash balances and shall be
entitled to deposit any such funds received in a bank account
or bank accounts in the name of the Trust in any bank or banks
selected by the Trustee, including the banking department of
the Trustee, pending disposition of such funds in accordance
with the Trust. Any such deposit may be made with or without
interest.
(E) The Trustee shall deal with any assets of this Trust held or
received under this Plan only in accordance with the written
directions from the Administrator. The Trustee shall be under
no duty to determine any facts or the propriety of any action
taken or omitted by it in good faith pursuant to instructions
from the Administrator.
(F) If the whole or any part of the Trust shall become liable for
the payment of any estate, inheritance, income or other tax
which the Trustee shall be required to pay, the Trustee shall
have full power and authority to pay such tax out of any
monies or other property in its hands for the account of the
person whose interest hereunder is so liable. Prior to making
any payment, the Trustee may require such releases or other
documents from any lawful taxing authority as it shall deem
74
<PAGE> 77
necessary. The Trustee shall not be liable for any nonpayment
of tax when it distributes an interest hereunder on
instructions from the Administrator.
(G) The Trustee shall keep a full, accurate and detailed record of
all transactions of the Trust which the Administrator shall
have the right to examine at any time during the Trustee's
regular business hours. Following the close of the fiscal
year of the Trust, or as soon as practical thereafter, the
Trustee shall furnish the Administrator with a statement of
account. This account shall set forth all receipts,
disbursements and other transactions effected by the Trustee
during said year.
The Administrator shall promptly notify the Trustee in writing
of its approval or disapproval of the account. The
Administrator's failure to disapprove the account within 60
days after receipt shall be considered an approval. The
approval by the Administrator shall be binding as to all
matters embraced in any statement to the same extent as if the
account of the Trustee had been settled by judgment or decree
of a court of competent jurisdiction under which the Trustee,
Administrator, Employer and all persons having or claiming any
interest in the Trust were parties; provided, however, that
the Trustee may have its account judicially settled if it so
desires.
(H) If, at any time, there shall be a dispute as to the person to
whom payment or delivery of monies or property should be made
by the Trustee, or regarding any action to be taken by the
Trustee, the Trustee may postpone such payment, delivery or
action, retaining the funds or property involved, until such
dispute shall have been resolved in a court of competent
jurisdiction or the Trustee shall have been indemnified to its
satisfaction or until it has received written direction from
the Administrator.
(I) Anything in this instrument to the contrary notwithstanding,
it shall be understood that the Trustee shall have no duty or
responsibility with respect to the determination of matters
pertaining to the eligibility of any Employee to become or
remain a Participant hereunder, the amount of benefit to which
any Participant or Beneficiary shall be entitled hereunder,
all such responsibilities being vested in the Administrator.
The Trustee shall have no duty to collect any contribution
from the Employer and shall not be concerned with the amount
of any contribution nor the application of the contribution
formula.
17.7 EVIDENCE OF TRUSTEE ACTION. In the event that the Trustee is comprised
of two or more Trustees, then those Trustees may designate one such
Trustee to transmit all decisions of the Trustee and to sign all
necessary notices and other reports on behalf of the Trustee. All
notices and other reports bearing the signature of the individual
Trustee so designated shall be deemed to bear the signatures of all
the individual Trustees and all parties dealing with the Trustee are
entitled to rely on any such notices and other reports as authentic
and as representing the action of the Trustee.
17.8 INVESTMENT POLICY. This Plan has been established for the sole purpose
of providing benefits to the Participants and their Beneficiaries. In
determining its investments hereunder, the Trustee shall take account
of the advice provided by the Administrator as to funding policy and
the short and long range needs of the Plan based on the evident and
probable requirements of the Plan as to the time benefits shall be
payable and the requirements therefor.
17.9 PERIOD OF TRUST. If it shall be determined that the applicable state
law requires a limitation on the period during which the Employer's
Trust shall continue, then such Trust shall not continue for a period
longer than 21 years following the death of the last of those
Participants including future Participants who are living at the
effective date hereof. At least 180 days prior to the end of the
twenty-first year as described in the first sentence of this Section,
the Employer, the Administrator and the Trustee shall provide for the
establishment of a successor trust and transfer of Plan assets to the
successor trustee. If the
75
<PAGE> 78
applicable state law requires no such limitation, then this Section
shall not be operative.
76
<PAGE> 79
IN WITNESS WHEREOF, the Employer, the Administrator, and the Trustees have
hereunto affixed their signatures.
Executed at Serv-Tech, Inc. on December 15, , 1993
--------------------- ----------------------- --
Houston, Texas
By SERV-TECH, INC.
- --------------------------------- ------------------------------
Witness Title
------------------------------
Accepted this 15th day of December , 1993
------------------ ----------------------- --
/s/: ANN FAVALORA By /s/: LEONARD L. MORGAN
- -------------------------------- ------------------------------
Witness Administrator
Accepted this 15th day of December , 1993
------------------ ----------------------- --
/s/: THOMAS ISBELL By /s/: JOHN M. SLACK
- -------------------------------- ------------------------------
Witness Trustee
Accepted this day of , 19
------------------ ----------------------- --
By
- -------------------------------- ------------------------------
Witness Trustee
Accepted this day of , 19
------------------ ----------------------- --
By
- -------------------------------- ------------------------------
Witness Trustee
IMPORTANT NOTE
Neither Connecticut General Life Insurance Company nor any of its employees can
provide you with legal advice in connection with the execution of this
document. Prior to execution of this document, you should consult your
attorney on whether this document is appropriate for you.
<PAGE> 80
FIRST AMENDMENT TO THE
SERV-TECH, INC. CONSOLIDATED
401 (K) RETIREMENT SAVINGS PLAN
THIS FIRST AMENDMENT of the Serv-Tech, Inc. Consolidated 401(k)
Retirement Savings Plan (hereinafter sometimes called the "Plan" and/or
"Trust") is made this 10th day of November, 1994, to be effective as stated
herein, by and between Serv-Tech, Inc. (hereinafter sometimes called
"Corporation"), of Houston, Texas and Richard L. Daerr, David P. Tusa and Frank
Perrone (hereinafter sometimes collectively called "Trustee") of Houston,
Texas:
WITNESSETH:
WHEREAS, the Corporation previously adopted the Serv-Tech, Inc.
Employee 401(k) Retirement Plan for the sole and exclusive benefit of its
Employees and their Beneficiaries, effective January 1, 1990; and
WHEREAS, on January 1, 1993, the Corporation merged the Serv-Tech, Inc.
Employee 401(k) Retirement Plan with the Seco Industries, Inc. 401(k) Plan and
the Talbert & Associates, Inc. Savings Plan and Trust, resulting in the current
Plan, effective January 1, 1993; and
WHEREAS, the Corporation through the action of its Board of Directors,
wishes to amend the Plan, effective January 1, 1995, so it may continue to
qualify under Sections 401(a) and 501(a) of the Internal Revenue code of 1986,
as amended, and the Employment Retirement Income Security Act of 1974, as
amended.
NOW THEREFORE, pursuant to the provisions of Article XIV, Section
14.1, the Plan is hereby amended as follows:
<PAGE> 81
Article I, Section 1.64 of the Plan is amended by completely replacing
the old Section 1.64 with the following new Section 1.64:
1.64 VESTING PERCENTAGE. The term Vesting Percentage means the percentage
used to determine a Participant's Vested Interest in contributions
made by the Employer, plus the earnings thereon, credited to his
Participant's Account that are not 100% immediately vested. The
Vesting Percentage for each Participant shall be determined in
accordance with the following schedule based on Years of Service with
the Employer.
<TABLE>
<CAPTION>
Years of Service Vesting Percentage
---------------- ------------------
<S> <C>
Less than 1 Year 0%
1 but less than 2 33%
2 but less than 3 66%
3 or more 100%
</TABLE>
Article III, Section 3.1 of the Plan is amended by completely
replacing the old Section 3.1 with the following new Section 3.1:
3.1 ELIGIBILITY. Each Employee who was a Participant prior to the
Effective Date and who is in the Service of the Employer on the
Effective Date shall continue as a Participant in the Plan. Each
other Employee, including a Leased Employee, shall be eligible to
become a Participant as of the first quarter following the
Participant's completion of the following requirements:
- One Year of Service (as defined in section 2.6)
- Participant reaches the Age of 21.
Article IV, Section 4.2 of the Plan is amended by replacing the
current first paragraph of Section 4.2 with the following new first paragraph:
4.2 MATCHING CONTRIBUTIONS. The Employer shall make a Matching
Contribution solely in Employer Stock in an amount equal to $.50 for
each $1.00 by which a Participant defers his Compensation pursuant to
a Salary Deferral Agreement, up to a maximum of 6% of his
compensation, subject to the Limitations on Allocations specified in
Article V. The Matching Contribution shall be paid to the Trust not
less frequently than quarterly. Matching Contributions shall be
subject to the Actual Contribution Percentage Test. The Employer may
designate at the time of contribution that all or a portion of such
Matching Contributions be treated as Qualified Matching Contributions.
<PAGE> 82
The Plan is further amended by adding the following new Article XVIII,
with Sections 18.1, 18.2, 18.3, 18.4, 18.5, 18.6, 18.7, and 18.8:
ARTICLE XIII.
LOANS TO PARTICIPANTS
18.1 APPLICATION AND LIMITATION. Upon the written application of any
Participant, the Plan Administrator, in accordance with its uniform,
nondiscriminatory policy and its written loan program, may make a loan
or loans to such Participant. If the Participant is married at the
time of the application, written spousal consent regarding the amount
of the loan and the possible reduction of the Participant's Account
balance as a result of default shall be obtained within the ninety
(90) day period ending on the date the loan is made, and such consent
shall meet requirements comparable to those set forth in Section
417(a)(2) of the Code. The preceding sentence shall not apply if the
Plan Administrator does not have actual knowledge of such marriage or
the Participant reasonably demonstrates that the whereabouts of his
spouse is unknown.
The aggregate amount of all such loans to any Participant shall not
exceed the lesser of:
(a) $50,000, or
(b) one-half (1/2) of the vested amount in the
Participant's Account,
as further limited under Article XVIII, Section 18.2, unless the
Participant receiving a loan which exceeds said limitations and the
Plan Administrator agree in writing to make such a loan, and further
agree that the Participant shall be responsible for the payment of any
taxes incurred by virtue of such loan. For purposes of computing (i)
the aggregate amount of all loans to any Participant, and (ii) the
amount in the Participant's Account with respect to Section 72(p) of
the Code, and for all other purposes of this Article XV with respect
to Section 72(p) of the Code, this Plan and all other plans maintained
by the Employer, any Affiliated Company, or any other related
organization described in Sections 414(b), 414(c) and 414(m) of the
Code shall be aggregated and treated as one plan. The amount in the
Participant's Account will be computed by the Trustee at the time of
any such loan, and will include those amounts received from an
Individual Retirement Account ("IRA") or other qualified plan. The
term loan includes any amount received as a loan under a contract
purchased by the Plan, such as a life insurance policy, and any
assignment or pledge with respect to such contract.
<PAGE> 83
18.2 PURPOSES OF LOANS. Loans shall be made under the provisions of this
Article XVIII for any legal purpose except for the purpose of
purchasing registered securities. The authority herein granted to the
Trustee to approve such loans from the Trust is for the purpose
described above and shall not be used as a means of distributing
benefits before they otherwise become due.
18.3 TERMS. All loans to Plan Participants granted under this provision
shall be treated as a segregated investment of the Trust and shall be
evidenced by the Participant's promissory note payable to the order of
the Trustee. The Plan Administrator shall have the right to make any
reasonable interpretations to implement the rate of interest charged
and shall have the right to modify such interpretations upon proper
notice with respect to all future loans. Such loans shall bear simple
interest at two percentage point (2.0%) over the prime rate being
charged at that time for loans to commercial borrowers by a major bank
in Harris County, Texas designated by the Plan Administrator, but in
no case shall the Participant pay more than the maximum legal rate of
interest. The terms of any loan shall be arrived at by mutual
agreement between the Plan Administrator and the Participant pursuant
to a uniform, nondiscriminatory policy. The specified maturity date,
including extensions, renewals, renegotiations, or revisions, shall
not be later than the earlier of (a) the Participant's Normal
Retirement Age (or the date of termination of employment, if earlier),
or (b) either five (5) years measured from the date the loan is made
by the Trustee, or, in the event of a home loan as described in
Section 18.4, ten (10) years measured from the date such home loan is
made or such other reasonable period of time as determined under the
Code. However, a Participant may request a loan with a maturity date
later than the above dates provided he agrees, in writing, to be
responsible for the payment of any taxes incurred by virtue of such
maturity date. Any loan granted under the terms of this Article XVIII
shall be repaid on an installment basis, with substantially equal
determinable periodic payments of principal and interest, not less
often than quarterly. Loan repayments may only be made through payroll
deduction. Notwithstanding the previous sentence, prepayment of the
Participant's loan balance my be made in full using the Participant's
personal check. The borrowing Participant's Account shall serve as
security for any such loan and the same shall be provided in the
promissory note made by the Participant. Every loan applicant shall
receive a clear statement of the charges involved in each loan
transaction. This statement shall include the dollar amount and annual
interest rate of the finance charge.
18.4 HOME LOANS. A home loan is any loan used to acquire any dwelling unit
(including, but not limited to, a house, apartment, condominium, or
mobile home not used on a
<PAGE> 84
transient basis) which within a reasonable time is to be used
(determined at the time the loan is made) as the principal residence
of the Participant.
18.5 RECOURSE; PROHIBITION AGAINST DISTRIBUTIONS WHILE LOAN OUTSTANDING.
No payment out of the Trust shall ever be made to any Participant,
Beneficiary, or other individual or entity under this Plan unless and
until all unpaid loans to such Participant, and interest thereon,
shall have been satisfied in full. In the event a note is not paid as
and when due, the Plan Administrator (or Trustee) may, in addition and
without resort to such other remedies as it may have under the law,
give written notice to the Participant sent to his last known address.
If the note is not paid within thirty (30) days from the date of such
notice, the amount standing to the credit of the Participant's Account
in the Trust will be charged with, but not actually reduced by, the
amount of the unpaid balance of the loan, together with the interest
thereon, and the Participant's indebtedness shall thereupon be
discharged. The amount of the unpaid balance of the loan and interest
thereon which is charged to the Participant's Account shall be reduced
by any subsequent payments of principal and, if appropriate, interest.
The Plan Administrator (or Trustee) shall then send a written notice
to the Participant at his last known address which confirms the amount
the Participant must include in his income as a distribution from the
Plan. At the time an event requiring a distribution from the Trust
occurs, such as death, disability, retirement or termination of
employment, such amount charged to the Participant's Account will be
applied to reduce the Participant's interest in such Account, and the
Participant's indebtedness shall thereupon be discharged and the loan
principal and any interest thereon shall be deemed to be satisfied in
full. If an event normally requiring a distribution, as described
above, occurs before any loan is repaid in full, the unpaid balance
thereof, together with the interest thereon, shall become due and
payable and the Trustee shall first satisfy the indebtedness from the
amount in the Participant's Account before making any payments to the
Participant, or to such other individual or entity as determined under
this Plan.
18.6 TREATMENT OF LOAN PROCEEDS. A loan to a Participant shall be
considered as an investment of such Participants's Account. The amount
the Participant has invested in the other classes of investments shall
be reduced proportionately to reflect his reduced Account balance,
unless the Participant requests, in writing, a different allocation of
the reduction in his investments. Expenses incurred by the Plan in
processing a Participant's loan may on a uniform basis in the
discretion of the Trustee be charged against the proceeds of such
loan.
<PAGE> 85
18.7 EFFECT ON RIGHT TO PARTICIPATE IN PLAN. Unless such Participant leaves
the employ of the Employer or withdraws from the Plan temporarily or
permanently, such Participant shall remain a Participant in good
standing and shall continue to participate in the Plan.
18.8 MINIMUM LOAN AMOUNTS. Not withstanding any other provision of this
Plan, no Participant shall be eligible for a loan under the provisions
of this Article XVIII unless the amount of such loan exceeds the
minimum limit uniformly prescribed by the Plan Administrator, which in
no event may exceed one thousand dollars ($1,000.00).
IN WITNESS WHEREOF, the Corporation and the Trustee have caused this First
Amendment to be executed on this 15th day of December 1994, to be effective
as of January 1, 1995.
SERV-TECH, INC.
BY: /s/ RICHARD L. DAERR
---------------------------
Richard L. Daerr, President
TRUSTEE:
-------------------------------
/s/ RICHARD L. DAERR
-------------------------------
Richard L. Daerr
/s/ DAVID P. TUSA
-------------------------------
David P. Tusa
/s/ FRANK PERRONE
-------------------------------
Frank Perrone
<PAGE> 86
THE STATE OF TEXAS )
)
COUNTY OF HARRIS )
BEFORE ME, the undersigned authority, on this day personally appeared
Richard L. Daerr, known to me to be the person whose name is subscribed to the
foregoing instrument as President of Serv-Tech, Inc., and acknowledged to me
that he executed the same for the purposes and consideration therein expressed
and in the capacity therein stated, as the act and deed of said corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE on this the 15th day of
December, 1994.
/s/ DEJUANA A. BIVINS
--------------------------------
[SEAL] NOTARY PUBLIC IN AND FOR
THE STATE OF TEXAS
My Commission Expires: 8-31-96
THE STATE OF TEXAS )
)
COUNTY OF HARRIS )
BEFORE ME, the undersigned authority, on this day personally appeared
Richard L. Daerr; known to me to be the person whose name is subscribed to the
foregoing instrument as Trustee, and acknowledged to me that he executed the
same for the purposes and consideration therein expressed and in the capacity
therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE on this the 15th day of
December, 1994.
/s/ DEJUANA A. BIVINS
--------------------------------
[SEAL] NOTARY PUBLIC IN AND FOR
THE STATE OF TEXAS
My Commission Expires: 8-31-96
<PAGE> 87
THE STATE OF TEXAS )
)
COUNTY OF HARRIS )
BEFORE ME, the undersigned authority, on this day personally appeared
David P. Tusa, known to me to be the person whose name is subscribed to the
foregoing instrument as Trustee, and acknowledged to me that he executed the
same for the purposes and consideration therein expressed and in the capacity
therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE on this the 15th day of
December, 1994.
/s/ DEJUANA A. BIVINS
--------------------------------
[SEAL] NOTARY PUBLIC IN AND FOR
THE STATE OF TEXAS
My Commission Expires: 8-31-96
THE STATE OF TEXAS )
)
COUNTY OF HARRIS )
BEFORE ME, the undersigned authority, on this day personally appeared
Frank Perrone, known to me to be the person whose name is subscribed to the
foregoing instrument as Trustee, and acknowledged to me that he executed the
same for the purposes and consideration therein expressed and in the capacity
therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE on this the 15th day of
December, 1994.
/s/ DEJUANA A. BIVINS
--------------------------------
[SEAL] NOTARY PUBLIC IN AND FOR
THE STATE OF TEXAS
My Commission Expires: 8-31-96
<PAGE> 88
SECOND AMENDMENT TO
SERV-TECH, INC. CONSOLIDATED RETIREMENT SAVINGS 401(K) PLAN
WHEREAS, Serv-Tech, Inc. (hereinafter referred to as the "Employer")
established the ServTech, Inc. Consolidated Retirement Savings 401(k) Plan
(hereinafter referred to as the "Plan") effective January 1, 1990 for the
benefit of its eligible Employees and their Beneficiaries; and
WHEREAS, the Employer reserved the right to amend the Plan under the terms
thereof; and
WHEREAS, the Employer wishes to amend the Plan thereto;
NOW THEREFORE, effective January 1, 1995, the Plan is hereby amended as
follows:
1. The second sentence of the first paragraph of Section 4.2 of the Plan
is deleted in its entirety and replaced with the following:
"The Matching Contribution shall be paid to the Trust not less
frequently than monthly".
2. The fourth paragraph of Section 4.2 of the Plan is deleted in its
entirety and replaced with the following:
"Such Matching Contribution shall be allocated as of the last day of
the Contribution Period for which such contribution is made to each
Participant who is an Active Participant on any day of the
Contribution Period".
IN WITNESS WHEREOF, the Employer, the Trustees and the Administrator have
hereunto affixed their signatures.
Executed at Houston, Texas on April 5, 1995
------------------- -------------------------
SERV-TECH, INC.
/s/ DEJUANA A. BIVINS By /s/ DAVID P. TUSA
- ---------------------------- ---------------------------
Witness David P. Tusa
Title Senior Vice President
------------------------
<PAGE> 89
Accepted this 5th day of April , 1995.
----------- -----------------
By
- ---------------------------------- ----------------------------------
Witness Administrator
/s/ DEJUANA BIVINS By /s/ RICHARD L. DAERR
- ---------------------------------- ----------------------------------
Witness Trustee
Richard L. Daerr
/s/ DEJUANA BIVINS By /s/ DAVID P. TUSA
- ---------------------------------- ----------------------------------
Witness Trustee
David P. Tusa
/s/ DEJUANA BIVINS By /s/ FRANK A. PERRONE
- ---------------------------------- ----------------------------------
Witness Trustee
Frank A. Perrone
IMPORTANT NOTE
Neither Connecticut General Life Insurance Company nor any of its employees can
provide you with legal advice in connection with the execution of this
document. Prior to execution of this document, you should consult your attorney
on whether this document is appropriate for you.
<PAGE> 90
THIRD AMENDMENT TO
SERV-TECH, INC. CONSOLIDATED RETIREMENT SAVINGS 401(k) PLAN
WHEREAS, Serv-Tech, Inc. (hereinafter referred to as the "Employer")
established the Serv-Tech, Inc. Consolidated Retirement Savings 401(k) Plan
(hereinafter referred to as the "Plan") effective January 1, 1990 for the
benefit of its eligible Employees and their Beneficiaries;
WHEREAS, the Employer reserved the right to amend the Plan under the
terms thereof; and
WHEREAS, the Employer wishes to amend the Plan to clarify the
provisions addressing Matching Contributions.
NOW, THEREFORE, effective January 1, 1995, the Plan is hereby amended
as follows:
1. The first paragraph of Section 4.2 of the Plan is amended by
adding the following at the end thereof:
Notwithstanding anything to the contrary contained herein, in no event
shall the Trustee of the Plan purchase or hold in its account an
aggregate amount of Employer Stock in excess of the Matching
Contribution. The term "Employer Stock" shall mean the common stock,
par value $.50 per share, of Serv-Tech, Inc.
2. The first paragraph of Section 13.10 of the Plan is amended by
adding the following at the end thereof:
Notwithstanding the foregoing, Matching Contributions made on behalf
of a Participant and allocated to a Participant's Account after
January 1, 1995, shall be invested solely in Employer Stock and shall
be the only amounts invested in Employer Stock under the Plan and the
Participant shall have no authority to direct the investment of such
amounts.
<PAGE> 91
IN WITNESS WHEREOF, the Employer and the Trustees have executed this
Third Amendment as of November 20, 1995
SERV-TECH, INC.
/s/ MALINDA E. VANEGAS /s/ DAVID P. TUSA
- -------------------------------- ------------------------------
Witness DAVID P. TUSA
TRUSTEE
/s/ MALINDA E. VANEGAS /s/ RICHARD L. DAERR
- -------------------------------- ------------------------------
Witness RICHARD L. DAERR
/s/ MALINDA E. VANEGAS /s/ DAVID P. TUSA
- -------------------------------- ------------------------------
Witness DAVID P. TUSA
/s/ MALINDA E. VANEGAS /s/ FRANK A. PERRONE
- -------------------------------- ------------------------------
Witness FRANK A. PERRONE
2
