As filed with the Securities and Exchange Commission
on August 3, 1999.
File No. 333-________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
________________________
VISTA EYECARE, INC.
(EXACT NAME OF ISSUER AS SPECIFIED IN ITS CHARTER)
GEORGIA 58-1910859
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
296 GRAYSON HIGHWAY
LAWRENCEVILLE, GEORGIA 30045
(770) 822-3600
(ADDRESS AND TELEPHONE NUMBER OF ISSUER'S PRINCIPAL EXECUTIVE OFFICES)
VISTA EYECARE, INC. 401(K) RETIREMENT SAVINGS PLAN
(FULL TITLE OF THE PLAN)
MITCHELL GOODMAN, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
296 GRAYSON HIGHWAY
LAWRENCEVILLE, GEORGIA 30045
(770) 822-3600
(NAME, ADDRESS AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
DAVID A. STOCKTON, ESQ.
KILPATRICK STOCKTON LLP
1100 PEACHTREE STREET, N.E.
ATLANTA, GEORGIA 30309-4530
(404) 815-6500
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------------------------
TITLE OF SECURITIES PROPOSED MAXIMUM PROPOSED MAXIMUM
TO BE REGISTERED AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
BE REGISTERED PER SHARE(1) OFFERING PRICE REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 100,000 shares <F2> $ 3.703125 $370,312.50 0102.95
Participation in Vista Eyecare, <F3> <F4> <F4>
Inc. 401(k) Retirement Savings Plan
- --------------------------------------------------------------------------------------------------------------------------------
<FN>
<F1> Determined in accordance with Rule 457(h) under the Securities Act of
1933, based on $3.703125, the average of the high and low prices on the Nasdaq
National Market System on July 26, 1999.
<F2> Pursuant to Rule 416, this Registration Statement shall be deemed to cover
any additional securities to be
offered or issued from stock splits, stock dividends, or similar transactions.
<F3> Pursuant to Rule 416(c) under the Securities Act of 1933, this registration
statement also covers an indeterminate amount of interests to be offered or sold
pursuant to the employee benefit plan described herein. (4) Not applicable.
</FN>
</TABLE>
<PAGE>
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents are incorporated by reference into this
registration statement (the "Registration Statement") and are deemed to be a
part hereof from the date of the filing of such documents:
(1) The Registrant's Form 10-K dated April 1, 1999 for the fiscal
year ended January 2, 1999 (Commission File Number 000-20001).
(2) All other reports filed by the Registrant and the Plan
pursuant to Section 13(a) or 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), since January 2,
1999.
(3) The description of the Common Stock contained in the
Registrant's registration statement on Form 8-A, filed under
Section 12 of the Exchange Act, including all amendments or
reports filed for the purpose of updating such description.
(4) All other documents subsequently filed by the Registrant and
the Plan pursuant to Sections 13(a), 13(c), 14 and 15(d) of
the Exchange Act prior to the filing of a post-effective
amendment which indicates that all securities offered pursuant
to this Registration Statement have been sold or which
deregisters all securities that remain unsold.
ITEM 4. DESCRIPTION OF SECURITIES
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant's Amended and Restated Articles of
Incorporation provide that no director will be personally liable to the
Registrant or its shareholders for monetary damages for breach of duty of care
or other duty owed to the Registrant as a director, except that such provision
will only eliminate or limit the liability of a director to the extent permitted
from time to time by the Georgia Business Corporation Code or any successor law
or laws.
Article VII of the Bylaws of the Registrant authorizes
indemnification of the Registrant's officers and directors for any liability and
expense incurred by them in connection with or resulting from any threatened,
pending or completed legal action or other proceeding or investigation by reason
II-1
<PAGE>
of his being or having been an officer or director. An officer or director may
only be indemnified if he acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the Registrant, and,
with respect to a criminal matter, he did not have reasonable cause to believe
that his conduct was unlawful. No officer or director who has been adjudged
liable to the Registrant or adjudged liable for the improper receipt of a
personal benefit is entitled to indemnification.
Any officer or director who has been wholly successful on the
merits or otherwise in defense of any proceeding to which he was a party, or in
defense of any claim because of his official capacity is entitled to
indemnification as to reasonable expenses by the Registrant as of right. All
other determinations in respect of indemnification shall be made by either: (i)
a majority vote of a quorum of directors not at the time parties to the
proceeding, or if a quorum cannot be obtained, then by a majority vote of a
committee duly designated by the board of directors (in which designation
directors who are parties may participate) consisting solely of two or more
directors not at the time parties to the proceeding; (ii) independent legal
counsel selected in accordance with the Bylaws and at the request of the Board;
or (iii) the holders of a majority of the Registrant's stock who at such time
are entitled to vote for the election of directors.
The provisions of the Registrant's Bylaws on indemnification
are consistent in all material respects with the laws of the State of Georgia,
which authorize indemnification of corporate officers and directors.
The Registrant's directors and officers are insured against
losses arising from any claim against them as such for wrongful acts or
omissions, subject to certain limitations.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
ITEM 8. EXHIBITS
The exhibits included as part of this Registration Statement are as
follows:
Exhibit Number Description
4.1 Relevant portions of the Amended and Restated
Articles of Incorporation of Registrant,
incorporated by reference to the Registrant's
Current Report on Form 8-K filed with the
Commission on January 6, 1999
4.2 Relevant portions of the Amended and Restated
By-Laws of the Registrant, incorporated by
reference to the Registrant's Registration
Statement of Form S-1, File No. 33-46645, as filed
with the Commission on March 25, 1992
II-2
<PAGE>
4.3 Vista Eyecare, Inc. f/k/a National Vision
Associates, Ltd. 401(k) Retirement Savings Plan
23 Consent of Arthur Andersen LLP
24 Power of Attorney (included in the Signature Page
of this Registration Statement)
II-3
<PAGE>
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, to include any material information with respect
to the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the Registration
Statement; (2) that, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof; (3) to remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act 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 may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 Atlanta, State of Georgia, on this 3rd day of
August, 1999.
VISTA EYECARE, INC.
By: /s/ James W. Krause
James W. Krause
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints James W. Krause and Mitchell Goodman,
Esq. as attorneys-in-fact, having the power of substitution, for them in any and
all capacities, to sign any amendments to this Registration Statement on Form
S-8 and to file the same, with exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that said attorneys-in-fact, or their substitute or
substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities indicated
on August 3, 1999.
/s/ James W. Krause Chairman of the Board and Chief Executive
James W. Krause Officer and President (Principal Executive
Officer)
/s/ Angus C. Morrison Senior Vice President, Chief Financial
Angus C. Morrison Officer and Treasurer (Principal Financial
and Accounting Officer)
/s/ David I. Fuente Director
David I. Fuente
/s/ Ronald J. Green Director
Ronald J. Green
/s/ James E. Kanley Director
James E. Kanaley
/s/ Campbell B. Lanier, III Director
Campbell B. Lanier, III
/s/ J. Smith Lanier, II Director
J. Smith Lanier, II
II-5
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this registration statement to be signed on its behalf by the
undersigned, therewith duly authorized, in the City of Atlanta, State of
Georgia, on August 3, 1999.
VISTA EYECARE, INC. f/k/a NATIONAL VISION
ASSOCIATES 401(k) RETIREMENT SAVINGS PLAN
By: Vista Eyecare, Inc., Plan Administrator
By: /s/ James W. Krause
James W. Krause, Chairman of the Board and Chief
Executive Officer
<PAGE>
EXHIBIT INDEX
TO
REGISTRATION STATEMENT ON FORM S-8
EXHIBIT NUMBER DESCRIPTION
- -------------- -----------
4.1 Relevant portions of the Amended and
Restated Articles of Incorporation of
Registrant, incorporated by reference to the
Registrant's Current Report on Form 8-K
filed with the Commission on January 6, 1999
4.2 Relevant portions of the Amended and
Restated By-Laws of the Registrant,
incorporated by reference to the
Registrant's Registration Statement of Form
S-1, File No. 33-46645, as filed with the
Commission on March 25, 1992
4.3 Vista Eyecare, Inc. f/k/a National Vision
Associates, Ltd. 401(k) Retirement Savings
Plan
23 Consent of Arthur Andersen LLP
24 Power of Attorney (included in the Signature
Page of this Registration Statement)
W.E. STANLEY & COMPANY, INC. REGIONAL PROTOTYPE
DEFINED CONTRIBUTION PLAN & TRUST
Copyright 1993 W.E. Stanley & Company, Inc.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
ARTICLE I DEFINITIONS............................................................................................1
ARTICLE II TOP HEAVY PROVISIONS AND ADMINISTRATION...............................................................15
2.1 TOP HEAVY PLAN REQUIREMENTS...............................................................................15
2.2 DETERMINATION OF TOP HEAVY STATUS.........................................................................15
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER...............................................................19
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY...................................................................20
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES.............................................................20
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR....................................................................20
2.7 RECORDS AND REPORTS.......................................................................................21
2.8 APPOINTMENT OF ADVISERS...................................................................................22
2.9 INFORMATION FROM EMPLOYER.................................................................................22
2.10 PAYMENT OF EXPENSES......................................................................................22
2.11 MAJORITY ACTIONS.........................................................................................22
2.12 CLAIMS PROCEDURE.........................................................................................22
2.13 CLAIMS REVIEW PROCEDURE..................................................................................23
ARTICLE III ELIGIBILITY.........................................................................................23
3.1 CONDITIONS OF ELIGIBILITY.................................................................................23
3.2 EFFECTIVE DATE OF PARTICIPATION...........................................................................23
3.3 DETERMINATION OF ELIGIBILITY..............................................................................24
3.4 TERMINATION OF ELIGIBILITY................................................................................24
3.5 OMISSION OF ELIGIBLE EMPLOYEE.............................................................................24
3.6 INCLUSION OF INELIGIBLE EMPLOYEE..........................................................................24
3.7 ELECTION NOT TO PARTICIPATE...............................................................................25
3.8 CONTROL OF ENTITIES BY OWNER-EMPLOYEE.....................................................................25
ARTICLE IV CONTRIBUTION AND ALLOCATION..........................................................................26
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION...........................................................26
4.2 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION................................................................27
4.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS......................................................27
4.4 MAXIMUM ANNUAL ADDITIONS..................................................................................33
4.5 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS.................................................................41
4.7 VOLUNTARY CONTRIBUTIONS...................................................................................42
4.8 DIRECTED INVESTMENT ACCOUNT...............................................................................43
4.9 QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS................................................................44
4.10 ACTUAL CONTRIBUTION PERCENT AGE TESTS....................................................................45
4.11 INTEGRATE ION IN MORE THAN ONE PLAN......................................................................45
ARTICLE V. VALUATIONS...........................................................................................45
5.1 VALUATION OF THE TRUST FUND...............................................................................45
5.2 METHOD OF VALUATION.......................................................................................45
<PAGE>
ARTICLE VI. DETERMINATION AND DISTRIBUTION OF BENEFITS..........................................................46
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT.................................................................46
6.2 DETERMINATION OF BENEFITS UPON DEATH......................................................................46
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY..........................................................47
6.4 DETERMINATION OF BENEFITS UPON TERMINATION................................................................48
6.5 DISTRIBUTION OF BENEFITS..................................................................................51
6.7 TIME OF SEGREGATION OR DISTRIBUTION.......................................................................61
6.8 DISTRIBUTION FOR MINOR BENEFICIARY........................................................................61
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN............................................................61
6.10 PRE-RETIREMENT DISTRIBUTION..............................................................................61
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP........................................................................62
6.12 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS................................................................63
6.13 SPECIAL RULE FOR NON-ANNUITY PLANS.......................................................................63
ARTICLE VII. TRUSTEE............................................................................................63
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE.....................................................................63
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE...............................................................64
7.3 OTHER POWERS OF THE TRUSTEE...............................................................................66
7.4 LOANS TO PARTICIPANTS.....................................................................................69
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS..................................................................71
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES.............................................................71
7.7 ANNUAL REPORT OF THE TRUSTEE..............................................................................71
7.8 AUDIT.....................................................................................................72
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE............................................................73
7.10 TRANSFER OF INTEREST.....................................................................................73
7.11 TRUSTEE INDEMNIFICATION..................................................................................74
7.12 EMPLOYER SECURITIES AND REAL PROPERTY....................................................................74
ARTICLE VIII. AMENDMENT, TERMINATION, AND MERGERS...............................................................74
8.1 AMENDMENT.................................................................................................74
8.2 TERMINATION...............................................................................................75
8.3 MERGER OR CONSOLIDATION...................................................................................75
ARTICLE IX. MISCELLANEOUS.......................................................................................76
9.1 EMPLOYER ADOPTIONS........................................................................................76
9.2 PARTICIPANT'S RIGHTS......................................................................................76
9.3 ALIENATION................................................................................................76
9.4 CONSTRUCTION OF PLAN......................................................................................77
9.5 GENDER AND NUMBER.........................................................................................77
9.6 LEGAL ACTION..............................................................................................77
9.7 PROHIBITION AGAINST DIVERSION OF FUNDS....................................................................77
9.8 BONDING...................................................................................................78
9.9 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE................................................................78
9.10 INSURER'S PROTECTIVE CLAUSE..............................................................................78
9.11 RECEIPT AND RELEASE FOR PAYMENTS.........................................................................79
9.12 ACTION BY THE EMPLOYER...................................................................................79
9.13 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY.......................................................79
9.14 HEADINGS.................................................................................................80
ii
<PAGE>
9.15 APPROVAL BY INTERNAL REVENUE SERVICE.....................................................................80
9.16 UNIFORMITY...............................................................................................80
9.17 PAYMENT OF BENEFITS......................................................................................80
ARTICLE X. PARTICIPATING EMPLOYERS..............................................................................80
10.1 ELECTION TO BECOME A PARTICIPATING EMPLOYER..............................................................80
10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS..................................................................81
10.3 DESIGNATION OF AGENT.....................................................................................81
10.4 EMPLOYEE TRANSFERS.......................................................................................81
10.5 PARTICIPATING EMPLOYER'S CONTRIBUTION AND FORFEITURES....................................................82
10.6 AMENDMENT................................................................................................82
10.7 DISCONTINUANCE OF PARTICIPATION.........................................................................82
10.8 ADMINISTRATOR'S AUTHORITY................................................................................82
10.9 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE........................................................83
ARTICLE XI. CASH OR DEFERRED PROVISIONS.........................................................................83
11.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION..........................................................83
11.2 PARTICIPANT'S SALARY REDUCTION ELECTION..................................................................84
11.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS.....................................................88
11.4 ACTUAL DEFERRAL PERCENTAGE TESTS.........................................................................90
11.5 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TEST............................................................93
11.6 ACTUAL CONTRIBUTION PERCENTAGE TESTS.....................................................................96
11.7 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS......................................................100
11.8 ADVANCE DISTRIBUTION FOR HARDSHIP.......................................................................104
</TABLE>
iii
<PAGE>
ARTICLE I
DEFINITIONS
As used in this Plan, the following words and Phrases shall have
the meanings set forth herein unless a different meaning is clearly required by
the context:
1.1 "Act" means the Employee Retirement Income Security. Act of 1974,
as it may be amended from time to time.
1.2 "Administrator" means the person(s) or entity designated by the
Employer pursuant to Section 2.4 to administer the Plan on behalf of the
Employer.
1.3 "Adoption Agreement" means the separate Agreement which is
executed by the Employer and: accepted by the Trustee which sets forth the
elective provisions of this Plan and Trust -as specified by the Employer.
1.4 "Affiliated Employer" means the Employer and any corporation which
is a member of a controlled group of corporations (as defined in Code Section
414(b)) which includes the Employer; any trade or business (whether or not
incorporated) which is under common control (as defined in Code Section 414(.c))
with the Employer; any organization (whether or not incorporated) which is a
member. of an affiliated service group (as defined in Code Section 414(m))
which includes the Employer; and any other entity required to be aggregated with
the Employer pursuant to Regulations under Code Section 414(o).
1.5 "Aggregate Account" means with respect to each Participant, the
value of all accounts maintained on behalf of a Participant, whether
attributable to Employer or Employee contributions, subject to the provisions of
Section 2.2.
1.6 "Anniversary Date" means the anniversary date specified in C3 of
the Adoption Agreement.
1.7 "Beneficiary" means the person to whom a share of a deceased
Participant's interest in the Plan is payable, subject to the restrictions of
Sections 6.2 and 6.6.
1.8 "Code" means the Internal Revenue Code of 1986, as amended or
replaced from time to time.
1.9 "Compensation" with respect to any Participant means such
Participant's compensation as specified by the Employer in El of the Adoption
Agreement that is paid during the applicable period. Compensation for any
self-employed Individual shall be equal to his Earned Income.
In addition, if specified in the Adoption Agreement, Compensation
for all Plan purposes shall also include compensation which is not currently
<PAGE>
includible in the Participant's gross income by reason of the application of
Code Sections 125, 402 (a) (8), 402 (h) (1) (B), or 403 (b).
Compensation in excess of $200,000 shall be disregarded. Such
amount shall be adjusted at the same time and in such manner as permitted under
Code Section 415 (d). In applying this limitation, the family group of a Highly
Compensated Participant who is subject to the Family Member aggregation rules of
Code Section 414 (q) (6) because such Participant is either a five percent
ownership of the Employer or one of the ten (10) Highly Compensated Employees
paid the greatest 0415 Compensations during the year, shall be treated as a
single Participant, except that for this purpose Family Members shall include
only the affected Participant's spouse and any lineal descendants who-have not
attained age nineteen (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
(except for purposes of determining the portion of Compensation up to the
integration level if this plan is integrated), 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-
For Plan Years beginning prior to January 1, 1989, the $200,000
limit (without regard to Family Member aggregation) shall apply only for Top
Heavy Plan Years and shall not be adjusted.
1.10 "Contract" or "Policy" means any life insurance policy retirement
income policy, or annuity contract (group or individual) issued by the Insurer.
In the event of any conflict between the terms of this Plan and the terms of any
insurance contract Purchased hereunder, the Plan provisions shall control.
1.11 "Deferred Compensation" means, with respect to any Participant,
that portion of the Participant's total Compensation which has been-contributed
to the Plan in accordance with the Participant's deferral election pursuant to
Section 11.2.
1.12 "Early Retirement Date" means the date specified in the
Adoption Agreement on which a Participant or Former Participant has satisfied
the age and service-requirements specified in the Adoption Agreement (Early
Retirement Age)- A Participant shall become fully Vested upon satisfying this
requirement if still employed at his Early Retirement Age.
A Former Participant who terminates employment after satisfying
the service requirement for Early Retirement and who thereafter reaches the age
requirement contained herein shall be entitled to receive his benefits under
this Plan.
1.13 "Earned Income" means with respect to a self-employed Individual,
the net earnings from self-employment in the trade or business with respect to
which the Plan is established, for which the personal services of the individual
are a material income-producing factor. Net earnings will be determined without
regard to items not included in gross income and the deductions allocable to
such items. Net earnings are reduced by contributions by the Employer to a
2
<PAGE>
qualified Plan to the extent deductible under Code Section 404. In addition, for
Plan Years beginning after December 31, 1989, net earnings shall be determined
with regard to the deduction allowed to the Employer by Code Section 164(f).
1.14 Elective Contribution" means the Employer's contributions to the
Plan that are made pursuant to the Participant's deferral election pursuant to
Section 11.2. In addition, if selected in E3 of the Adoption Agreement, the
Employer's matching contribution made pursuant to Section 11.1(b) shall be
considered an Elective Contribution for purposes of the Plan. Elective
Contributions shall be subject to the requirements of Sections 11.2(b) and
11.2(c) and shall further be required to satisfy the discrimination requirements
of Regulation 1- 401 (k) -1 (b) (3), the provisions of which are specifically
incorporated herein by reference.
1.15 "Eligible Employee" means any Employee specified in D1 of the
Adoption Agreement.
1.16 Employee" means any person who is employed by the Employer, but
excludes any person who is employed as an independent contractor. The term
Employee shall also include Leased Employees as provided in Code Section
414(n) or (o).
Except as provided in the Non-Standardized Adoption Agreement,
all Employees of all entities which are an Affiliated Employer will be treated
as employed by a single employer.
1.17 "Employer" means the entity specified in the Adoption Agreement,
any Participating Employer (as defined in Section 10.1) which shall adopt this
Plan, any successor which shall maintain this Plan and any predecessor which has
maintained this Plan.
1.18 "Excess Compensation" means, with respect to a Plan that is
integrated with social security, a Participant's Compensation which is in excess
of the amount set forth in the Adoption Agreement.
1.19 Excess Contributions" means, with respect to a Plan Year, the
excess of Elective Contributions and Qualified Non-Elective Contributions made
on behalf of Highly Compensated Participants for the Plan Year over the maximum
amount of such contributions permitted under Section 11.4(a).
1.20 "Excess Deferred Compensation" means, with respect to any taxable
year of a Participant, the excess of the aggregate amount of such Participant's
Deferred Compensation and the elective deferrals pursuant to Section 11.2(f)
actually made on behalf of such Participant for such taxable year, over the
dollar limitation provided for in Code Section 402(g), which is incorporated
herein by reference.
3
<PAGE>
1.21 "Family Member" means, with respect to an affected Participant,
such Participant's spouse, and such Participant's lineal descendants and
ascendants and their spouses, all as described in Code Section 414 (q) (6) (B).
1.22 "Fiduciary" means any person who (a) exercises any discretionary
authority or discretionary control respecting management of the Plan or
exercises any authority or control respecting management or disposition of its
assets, (b) renders investment advice for a fee or other compensation, direct or
indirect, with respect to any monies or other property of the Plan or has any
authority or responsibility to do so, or (c) has any discretionary authority or
discretionary responsibility in the administration of the Plan, including, but
not limited to, the Trustee, the Employer and its representative body, and the
Administrator.
1.23 "Fiscal Year" means; the Employer's accounting year as specified
in the Adoption Agreement.
1.24 "Forfeiture" means that portion of a Participant's Account that is
not Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion of .a
Participant's Account, or
(b) the last day of the Plan Year in which the Participant
incurs five (5) consecutive 1-Year Breaks in Service.
Furthermore, for purposes of paragraph (a) above, in the case
of a Terminated Participant whose Vested benefit is zero, such Terminated
Participant shall be deemed to have received a distribution of his Vested
benefit upon his termination of employment. In addition, the term Forfeiture
shall also include amounts deemed to be Forfeitures pursuant to any other
provision of this Plan.
1.25 "Former Participant" means a person who has been a Participant,
but who has ceased to be a Participant for any reason.
1.26 "414(s) Compensation" with respect to any Employee means his
Compensation as defined in Section 1.9. However, for purposes of this, Section,
Compensation shall be Compensation paid and shall be determined by including, in
the case of a non-standardized Adoption Agreement, any items that are excluded
from Compensation pursuant to the Adoption Agreement. The amount of "414(s)
Compensation" with respect to any Employee shall include "414(s) Compensation'
during the entire twelve (12) month period ending on the last day of such Plan
Year, except that for Plan Years beginning prior to the later of January 1,
1992, or the date that is sixty (60) days after the date final Regulations are
issued, 0414(s) Compensation" shall only be recognized as of an Employee's
effective date of participation.
In addition, if specified in the Adoption Agreement, "414(s)
Compensation" shall also include compensation which is not currently includible
in the Participant's gross income by reason of the application of Code Sections
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125, 402 (a) (8), 402 (h) (1) (B), or 403 (b), plus Elective Contributions
attributable to Deferred Compensation recharacterized as voluntary Employee
contributions pursuant to 11.5(a).
1.27 "415 Compensation" means compensation as defined in Section 4.4
(f) (2).
1.28 "Highly Compensated Employee" means an Employee described in Code
Section 414(q) and the Regulations thereunder and generally means an Employee
who performed services for the Employer during the "determination year" and is
in one or more of the following groups:
(a) Employees who at any time during the "determination year" or
"look-back year' were "five percent owners" as defined in Section
1.35(c).
(b) Employees -who received 0415 Compensation" during the
"look-back year" from the Employer in excess of $75,060.
(c) Employees who received "415 Compensation" during the
"look-back year" from the Employer in excess of $50,000 and were in
the Top Paid Group of Employees for the Plan Year.
(d) Employees who during the "look-back year" were officers of
the Employer (as that term is defined within the meaning of the
Regulations under Code Section 416) and received "415 Compensation"
during the "look-back year" from the Employer greater than 50 percent
of the limit in effect under Code Section 415 (b) (1) (A) for any such
Plan Year. The number of officers shall be limited to the lesser of
(i) 50 employees; or (ii) the greater of 3 employees or 10 percent of
all employees. if the Employer does not have at least one officer
whose annual "415 Compensation" is in excess of 50 percent of the Code
Section 415(b) (1) (A) limit, then the highest paid officer of the
Employer will be treated as a Highly Compensated Employee.
(e) Employees who are in the group consisting of the 100
Employees paid the greatest "415 Compensation' during the
"determination year" and are also described in (b), (c) or (d) above
when these paragraphs are modified to substitute "determination years
for "look-back year".
The "determination year" shall be the Plan Year for which testing
is being performed, and the "look-back year" shall be the immediately preceding
twelve-month period. However, if the Plan Year is a calendar year, or if another
Plan of the Employer so provides, then the "look-back year" shall be the
calendar year ending with or within the Plan Year for which testing is being
performed, and the "determination year" (if applicable) shall be the period of
time, if any, which extends beyond the "look-back year" and ends on the last day
of the Plan Year for which testing is being performed (the slag period,). With
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respect to this election, it shall be applied on a uniform and consistent basis
to all plans, entities, and arrangements of the Employer.
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts that would otherwise be
excluded from a Participant's gross income by reason of the application of Code
Sections 125, 402 (a) (8), 402 (h) (1) (B) and, in the case of Employer
contributions made pursuant to a salary reduction agreement, Code Section
403(b). Additionally, the dollar threshold amounts specified in (b) and (c)
above shall be adjusted at such time and in such manner as is provided in
Regulations. In the case of such an adjustment, the dollar limits which shall be
applied are those for the calendar year in which the "determination years or
"look back year" begins.
In determining who is a Highly Compensated Employee, Employees
who are non-resident aliens and who received no earned income (within the
meaning of Code Section 911(d)) from the Employer constituting United States
source income within the meaning of Code Section 861(a)(3) shall not be treated
as Employees. Additionally, all Affiliated Employers shall be taken into account
as a single employer and Leased Employees within the meaning of Code Sections
41~_(n)(2) and 414(o)(2) shall be considered Employees unless such Leased
Employees are covered by a plan described in Code Section 414(n)(5) and are not
covered in any qualified plan maintained by the Employer. The exclusion of
Leased Employees for this purpose shall be applied on a uniform and consistent
basis for all of the Employer's retirement plans. In addition, Highly
Compensated Former Employees shall be treated as Highly Compensated Employees
without regard to whether they performed services during the "determination
year".
1.29 "Highly Compensated Former Employee" means a former Employee who
had a separation year prior to the "determination year" and was a Highly
Compensated Employee in the year of separation from service or in any
"determination year" after attaining age 55. Notwithstanding the foregoing, an
Employee who separated from service prior to 1987 will be treated as a Highly
Compensated Former Employee only if during the separation year (or year
preceding the separation year) or any year after the Employee attains age 55 (or
the last year ending before the Employee's 55th birthday), the Employee either
received "415 Compensation" in excess of $50,000 or was a "five percent owner."
For purposes of this Section, "determination year", "415 Compensation" and "five
percent owner" shall be determined in accordance with Section 1.28. Highly
Compensated Former Employees shall be treated as Highly Compensated Employees.
The method set forth in this Section for determining who is a "Highly
Compensated Former Employee" shall be applied on a uniform and consistent basis
for all purposes for which the Code Section 414(q) definition is applicable.
1.30 "Highly Compensated Participant" means any Highly Compensated
Employee who is eligible to participate in the Plan.
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1.31 "Hour of Service" means (1) each hour for which an Employee is
directly or indirectly compensated or entitled to compensation by the Employer
for the performance of duties during the applicable computation period; (2) each
hour for which an Employee is directly or indirectly compensated or entitled to
compensation by the Employer (irrespective of whether the employment
relationship has terminated) for reasons other than performance of duties (such
as vacation, holidays, sickness, jury duty, disability, lay-off, military duty
or leave of absence) during the applicable computation period; (3) each hour for
which back pay is awarded or agreed to' by the Employer without regard to
mitigation of damages. The same Hours of Service shall not be credited both
under (1) or (2), as the case may be, and under (3).
Notwithstanding the above, (i) no more than 501 Hours of Service
are required to be credited to an Employee on account of any single continuous
period during which the Employee performs no duties (whether or not such period
occurs in a single computation period); (ii) an hour for which an Employee is
directly or indirectly paid, or entitled to payment, on account of a period
during which no duties are performed is not required to be credited to the
Employee if such payment is made or due under a plan maintained solely for the
purpose of complying with applicable worker's compensation, or unemployment
compensation or disability insurance laws; and (iii) Hours of Service are not
required to be credited for a payment which solely reimburses an Employee for
medical or medically related expenses incurred by the Employee.
For purposes of this Section, a payment shall be deemed to be
made by or due from the Employer regardless of whether such payment is made by
or due from the Employer directly, or indirectly through, among others, a trust
fund, or insurer, to which the Employer contributes or pays premiums and
regardless of whether contributions made or due to the trust fund, insurer, or
other entity are for the benefit of particular Employees or are on behalf of a
group of Employees in the aggregate.
An Hour of Service must be counted for the purpose of determining
a Year of Service, a year of participation for purposes of accrued benefits, a
1-Year Break in Service, and employment commencement date (or reemployment
commencement. date) The provisions of Department of Labor regulations
2530.200b-2 (b) and (c) are incorporated herein by reference.
Hours of Service will be credited for employment with all
Affiliated Employers and for any individual considered to be a Leased Employee
pursuant to Code Sections 414 (n) or 41A (o) and the Regulations. thereunder.
Hours of Service will be determined on the basis of the method
selected in the Adoption Agreement.
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1.32 "Insurer" means W.E. Stanley & Company, Inc. or any of its
affiliates or subsidiaries, or any legal reserve insurance company which has
issued one or more policies under the Plan prior to the adoption of this Plan.
1.33 "Investment Manager" means an entity that (a) has the power to
manage, acquire, or dispose of Plan assets and (b) acknowledges fiduciary
responsibility to the Plan in writing. Such entity must be a person, firm, or
corporation registered as an investment adviser under the investment Advisers
Act of 1940, a bank, or an insurance company.
1.34 "Joint and Survivor Annuity" means an annuity for the life of a
Participant with a survivor annuity for the life of the Participant's spouse
which is not less than 1/2, 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 interest in the Plan.
1.35 "Key Employee" means an Employee as defined in Code Section
416(i) and the Regulations thereunder. Generally, any Employee or former
Employee (as well as each of his Beneficiaries) is considered a Key Employee if
he, at any time during the Plan Year that contains the "Determination Date" or
any of the preceding four (4) Plan Years, has been included in one of the
following categories:
(a) an officer of the Employer (as that term is defined within the
meaning of the Regulations under Code Section 416) having annual "415
Compensation" greater than 50 percent of the amount in effect under Code Section
415(b)(1)(A) for any such Plan Year
(b) one of the ten employees having annual "415 Compensation" from the
Employer for a Plan Year greater than the dollar limitation in effect under Code
Section 415 (c) (1) (A) for the calendar year in which such Plan Year ends and
owning (or considered as owning within the meaning of Code Section 318) both
more than one-half percent interest and the largest interests in the Employer.
(c) a "five percent owner" of the Employer. "Five percent owner" means
any person who owns (or is considered as owning within the meaning of Code
Section 318) more than five percent (5%) of the outstanding stock of the
Employer or stock possessing more than five percent (5%) of the `total combined
voting power of all stock of the Employer or, in the case of an unincorporated
business, any person who owns more than five percent (5%) of the capital or
profits interest in the Employer. In determining percentage ownership hereunder,
employers that would otherwise be aggregated under Code Sections 414(b), (c),
(m) and (0) shall be treated as separate employers.
(d) a "one percent owner" of the Employer having an annual "415
Compensation" from the Employer of more than $150,000. "One percent owner" means
any person who owns (or is considered as owning within the meaning of Code
Section 318) more than one percent (1%) of the outstanding stock of the Employer
8
<PAGE>
or stock possessing more than one percent (1%) of the total combined voting
power of all stock of the Employer or, in the case of an unincorporated
business, any person who owns more than one percent (1%) of the capital or
profits interest in the Employer. In determining percentage ownership hereunder,
employers that would otherwise be aggregated under Code Sections 414(b), (c),
(m) and (o) shall be treated as separate employers. However, in determining
whether an individual has "415 Compensation" of more than $150,000, "415
Compensation" from each employer required to be aggregated under Code sections
414 (b), (c) (m) and (o) shall be taken into account.
For purposes of this Section, the determination of 4415
Compensation" shall be made by including amounts that would otherwise be
excluded from a Participant's gross income by reason of the application of Code
Sections 125, 402 (a) (8), 402 (h) (1) (B) and, in the case of Employer
contributions made pursuant to a salary reduction agreement, Code Section
403(b).
1.36 "Late Retirement Date" means the date of, or the first day of the
month or the Anniversary Date coinciding with or next following, whichever
corresponds to the election made for the Normal Retirement Date, a Participant's
actual retirement after having reached his Normal Retirement Date.
1.37 "Leased Employee" means any person (other than an Employee of the
recipient) who pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the recipient (or for
the recipient and related persons determined in accordance with Code Section
414(n)(6)) on a substantially full time basis for a period of at least one year,
and such services are of a type historically performed by employees in the
business field of the recipient employer. Contributions or benefits provided a
leased employee by the leasing organization which are attributable to services
performed for the recipient employer shall be treated as provided by the
recipient employer.
A leased employee shall not be considered an Employee of the
recipient if: (i) such employee is covered by a money purchase pension plan
providing: (1) a nonintegrated employer contribution rate of at least 10 percent
of compensation, as defined in Code Section 415(c)(3), but including amounts
contributed pursuant to a salary reduction agreement which are excludable from
the employee's gross income under Code Sections 125, 402(a)(8), 402(h), or
403(b), (2) immediate participation, and (3) full and immediate vesting; and
(ii) leased employees do not constitute more than 20 percent of the recipient's
non-highly compensated workforce.
1.38 "Net Profit" means with respect to any Fiscal Year the Employer's
net income or profit for such Fiscal Year determined upon the basis of the
Employer's books of account in accordance with generally accepted accounting
principles, without any reduction for taxes based upon income, or for
contributions made by the Employer to this Plan and any other qualified plan.
9
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1.39 "Non-Elective Contribution" means the Employer's contributions to
the Plan other than those made pursuant to the Participant's deferral election
made pursuant to Section 11.2 and any Qualified Non-Elective Contribution. in
addition, if selected in E3 of the Adoption Agreement, the Employer's Matching
Contribution made pursuant to Section 4.3(b) shall be considered a Non-Elective
Contribution for purposes of the Plan.
1.40 "Non-Highly Compensated Participant" means any Participant who is
neither a Highly Compensated Employee nor a Family Member.
1.41 "Non-Key Employee" means any Employee or former Employee (and his
Beneficiaries) who is not a Key Employee.
1.42 Normal Retirement Age" means the age specified in the Adoption
Agreement at which time a Participant shall become fully Vested in his
Participant's Account.
1.43 "Normal Retirement Date" means the date specified in the Adoption
Agreement on which a Participant shall become eligible to have his benefits
distributed to him.
1.44 "1-Year Break in Service" means the applicable computation period
during which an Employee has not completed more than 500 Hours of Service with
the Employer. Further, solely for the purpose of determining whether a
Participant has incurred a 1-Year Break in Service, Hours of Service shall be
recognized for `authorized leaves of absences and "maternity and paternity
leaves of absence."
"Authorized leave of absence" means an unpaid, temporary
cessation from active employment with the Employer pursuant to an established
nondiscriminatory policy, whether occasioned by illness, military service, or
any other reason.
A "maternity or paternity leave of absence" means, for Plan Years
beginning after December 31, 1984, an absence from work f or any period by
reason of the Employee's pregnancy, birth of the Employee's child, placement of
a child with the Employee in connection with the adoption of such child, or any
absence for the purpose of caring for such child f or a period immediately
following such birth or placement. For this purpose, Hours of Service shall be
credited for the computation period in which the absence from work begins, only
if credit therefore is necessary to prevent the Employee from incurring a 1-Year
Break in Service, or, in any other case, in the immediately following
computation period. The Hours of Service credited for a "maternity or paternity
leave of absence" shall be those which would normally have been credited but for
such absence, or, in any case in which the Administrator is unable to determine
such hours normally credited, eight (8) Hours of Service per day. The total.
Hours of Service required to be credited for a `maternity or paternity leave of
absences shall not exceed 501.
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1.45 "Owner-Employee" means a sole proprietor who owns the entire
interest in the Employer or a partner who owns more than 10% of either the
capital interest or the profits interest in the Employer and who receives income
for personal services from the' Employer.
1.46 "Participant" means any Eligible Employee who participates in the
Plan as provided in Section 3.2 and has not for any reason become ineligible to
participate further in the Plan.
1.47 "Participant's Accounts means the account established and
maintained by the Administrator for each Participant with respect to his total
interest under the Plan resulting from (a) the Employer's contributions in the
case of a Profit Sharing Plan or Money Purchase Plan, and (b) the Employer's
Non-Elective Contributions in the case of a 401(k) Profit Sharing Plan.
1.48 "Participant's Combined Account" means the account established
and maintained by the Administrator for each Participant with respect to his
total interest under the Plan resulting from the Employer's contributions.
1.49 "Participant's Elective Account" means the account established and
maintained by the Administrator-for each Participant with respect to his total
interest in the Plan and Trust resulting from the Employer's Elective
Contributions and Qualified Non-Elective Contributions. A separate accounting
shall be maintained with respect to that portion of the Participant's Elective
Account attributable to Elective Contributions made pursuant to Section 11.2,
Employer matching contributions if they are deemed to be Elective Contributions,
and any Qualified Non-Elective Contributions.
1.50 "Participant's Rollover Account" means the account established
and maintained by the Administrator for each Participant with respect to his
total interest in the Plan resulting from amounts transferred from another
qualified plan or "conduit" Individual Retirement Account in accordance with
Section 4.6.
1.51 "Plan" means' this instrument (hereinafter referred to as W.E.
Stanley & Company, Inc. Regional Prototype Defined Contribution Plan & Trust
Basic Plan Document #01) including all amendments thereto, and the Adoption
Agreement as adopted by the Employer.
1.52 "Plan Year" means the Plan's accounting year as specified in C2
of the Adoption Agreement.
1.53 "Pre-Retirement Survivor Annuity" means an immediate annuity for
the life of the Participant's spouse, the payments under which must be equal to
the actuarial equivalent of 50% of the Participant's Vested interest in the Plan
as of the date of death.
1.54 "Qualified Non-Elective Account" means the account established
hereunder to which Qualified Non-Elective. Contributions are allocated.
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1.55 "Qualified Non-Elective Contribution" means the Employer's
contributions to the Plan that are made pursuant to E5 041-2 the Adoption
Agreement and Section 11.1(d) which are. used to satisfy the "Actual Deferral
Percentage" tests. Qualified Non-Elective Contributions are nonforfeitable when
made and are distributable only as specified in Sections 11.2(c) and 11-8. In
addition, the Employer's contributions to the Plan that are made pursuant to
Section 11.7(h) and which are used to satisfy the "Actual Contribution
Percentage" tests shall be considered Qualified Non-Elective Contributions.
1.56 "Qualified Voluntary Employee Contribution Account" means the
account established and maintained by the Administrator for each Participant
with respect to his total interest under the Plan resulting from the
Participant's tax deductible qualified voluntary employee contributions made
pursuant to Section 4.9.
1.57 "Regulation" means the Income Tax Regulations as promulgated by
the Secretary of the Treasury or his delegate, and as amended from time to
time.
1.58 "Retired Participant" means a person who has been a Participant,
but who has become entitled to retirement benefits under the Plan.
1.59 "Retirement Date" mean the date as of which a Participant retires
for reasons other than Total and Permanent Disability, whether such retirement
occurs on a Participant's Normal Retirement Date, Early or Late Retirement Date
(see. Section 6.1).
1.60 "Self-Employed Individual" means an individual who has earned
income for the taxable year from the trade or business for which the Plan is
established, and, also, an individual who would have had earned income but for
the fact that the trade or business had no net profits for the taxable year- A
Self-Employed Individual shall be treated as an Employee.
1.61 "Shareholder-Employee" means a Participant who owns more than
five percent (5%) of the Employer's outstanding capital stock during any year in
which the Employer elected to be taxed as a Small Business Corporation under the
applicable Code Section.
1.62 "Short Plan Year" means, if specified in the Adoption Agreement,
that the Plan Year shall be less than a 12 month period. If chosen, the
following rules shall apply in the administration of this Plan. In determining
whether an Employee has completed a Year of Service for benefit accrual purposes
in the Short Plan Year, the number of the Hours of Service required shall be
proportionately reduced based on the number of days in the Short Plan Year. The
determination of whether an Employee has completed a Year of- Service for
vesting and eligibility purposes' shall be made in accordance with Department of
Labor Regulation 2530.203-2(c). In addition, if this Plan is integrated with
Social Security, the integration level shall also be proportionately reduced
based on the number of days in the Short Plan Year.
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1.63 "Super Top Heavy Plan" means a plan described in Section 2.2 (b).
1.64 "Taxable Wage Base" means, with respect to any year, the maximum
amount of earnings which may be considered wages f or such year under Code
Section 3121(a)(1).
1.65 "Terminated Participant" means a person who has been a
Participant, but whose employment has been terminated other than by death, Total
and Permanent Disability or retirement.
1.66 "Top Heavy Plan" means a plan described in Section 2.2(a)
1.67 "Top Heavy Plan Year" means a Plan Year commencing after December
31, 1983 during which the Plan is a Top Heavy Plan.
1.68 "Top Paid Group" shall be determined pursuant to Code Section 414
(q) and the Regulations thereunder and generally means the top 20 percent of
Employees who performed services for the Employer during the applicable year,
ranked according to the' amount of "415 Compensation" (as determined pursuant to
Section 1.28) received from the Employer during such year. All Affiliated
Employers shall be taken into account as a single employer, and Leased Employees
shall be treated as Employees pursuant to Code Section 414(n) or (o). Employees
who are non-resident aliens who received no earned income (within the meaning of
Code Section 911(d) (2)) from the Employer constituting United States source
income within the meaning of Code Section 861 (a) (3) shall not be treated as
Employees. Additionally, for the purpose of determining the number of active
Employees in any year, the following additional Employees shall also be
excluded, however, such Employees shall still be considered for the purpose of
identifying the particular Employees in the Top Paid Group:
(a) Employees with less than six (6) months of service;
(b) Employees who normally work less than 17 1/2 hours per week;
(c) Employees who normally work less than six (6) months during a
year; and
(d) Employees who have not yet attained age 21.
In addition, if 90 percent or more of the Employees of the
Employee are covered under agreements the Secretary of Labor finds to be
collective bargaining agreements between Employee representatives and the
Employer, and the Plan covers only Employees who are not covered under such
agreements, then Employees covered by such agreements shall be excluded from
both the total number of active Employees as well as from the identification of
particular Employees in the Top Paid Group.
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The foregoing exclusions set forth in this Section shall be
applied on a uniform and consistent basis for all purposes for which the Code
Section 414(q) definition is applicable.
1.69 "Total and Permanent Disability" means the inability to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death or which
has lasted or can be expected to last for a continuous period of not less than
12 months. The disability of a Participant shall be determined by a licensed
physician chosen by the Administrator. However, if the condition constitutes
total disability under the federal Social Security Acts, the Administrator may
rely upon such determination that the Participant is Totally and Permanently
Disabled for the purposes of this Plan. The determination shall be applied
uniformly to all Participants.
1.70 "Trustee" means the person or entity named in B6 of the Adoption
Agreement and any successors.
1.71 "Trust Fund" means the assets of the Plan and Trust as the same
shall exist from time to time.
1.72 "Vested" means the nonforfeitable portion of any account
maintained on behalf of a Participant.
1.73 "Voluntary Contribution Account" means the account established
and maintained by the Administrator for each Participant with respect to his
total interest in the Plan resulting from the Participant's nondeductible
voluntary contributions made pursuant to Section 4.7.
1.74 "Year of Service" means the computation period of twelve (12)
consecutive months, herein set forth, and during which an Employee has completed
at. least 1000 Hours of Service.
For purposes of eligibility for participation, the initial
computation period shall begin with the date on which the Employee first
performs an Hour of Service (employment commencement date). The computation
period beginning after a 1-Year Break in Service shall be measured from the date
on which an Employee again performs. an Hour of Service. The succeeding
computation periods shall begin with the first anniversary of the Employee's
employment commencement date. However, if one (1) Year of Service or less is
required as a condition of eligibility, then after the initial eligibility
computation period, the eligibility computation period shall shift to the
current Plan Year which includes the anniversary of the' date on which the
Employee first performed an Hour of Service. An Employee who is credited with
1,000 Hours of Service in both the initial eligibility computation period and
the first Plan Year which commences prior to the first anniversary of the
Employee's initial eligibility computation period will be credited with two
Years of Service for purposes of eligibility to participate.
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For vesting purposes, and all other purposes not specifically
addressed in this Section, the computation period shall be the Plan Year,
including periods prior to the Effective Date of the Plan unless specifically
excluded pursuant to the Adoption Agreement.
Years of Service and breaks in service will be measured on the
same computation period.
Years of Service with any predecessor Employer which maintained
this Plan shall be recognized. Years of Service with any other predecessor
Employer shall be recognized as specified in the Adoption Agreement.
Years of Service with any Affiliated Employer shall be
recognized.
ARTICLE II
TOP HEAVY PROVISIONS AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall provide the special
vesting requirements of Code Section 416(b) pursuant to Section 6.4 of the Plan
and the special minimum allocation requirements of Code Section 416(c) pursuant
to Section 4.3(i) of the Plan.
2.3 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan Year
beginning after December 31, 1983, in which, as of the Determination
Date, (1) the Present Value of Accrued Benefits of Key Employees and
(2) the sum of the Aggregate Accounts of Key Employees under this Plan
and all plans of an Aggregation Group, exceeds sixty percent (60%).of
the Present Value of Accrued Benefits and the Aggregate Accounts of
all Key and Non-Key Employees under this Plan and all plans of an
Aggregation Group.
If any Participant is a Non-Key Employee for any Plan Year, but
such Participant was a Key Employee for any prior Plan Year, such
Participant's Present value of Accrued Benefit and/or Aggregate
Account balance shall not be taken into account purposes of
determining whether this Plan is a Top Heavy or Super Top Heavy Plan
(or whether any Aggregation Group which includes this Plan is a Top
Heavy Group). In addition, if a Participant or Former Participant has
not performed any services for any Employer maintaining the Plan at
any time during the five year period ending on the Determination Date,
any accrued benefit for such Participant or Former Participant shall
not be taken into account for the purposes of determining whether this
Plan is a Top Heavy or Super Top Heavy Plan.
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(b) This Plan shall be a Super Top Heavy Plan for any Plan Year
beginning after December 31, 1983, in which, as of the Determination
Date, (1) the Present Value of Accrued Benefits of Key Employees and
(2) the sum of the Aggregate Accounts of Key Employees under this Plan
and all plans of an Aggregation Group, exceeds ninety percent (90%) of
the Present Value of Accrued Benefits and the Aggregate Accounts of
all Key and Non-Key Employees under this Plan and all plans of an
Aggregation Group.
(c) Aggregate Account: A Participant's Aggregate Account as of
the Determination Date is the sum of:
(1) his Participant's Combined Account balance as of the
most recent valuation occurring within a twelve (12) month period
ending on the Determination Date;
(2) for a Profit Sharing Plan, an adjustment for any
contributions due as of the Determination Date. Such adjustment
shall be the amount of any contributions actually made after the
valuation date but before the Determination Date, except for the
first Plan Year when such adjustment shall also reflect the
amount of any contributions made after the Determination Date
that are allocated as of a date in that first Plan Year;
(3) for a Money Purchase Plan, contributions that would be
allocated as of a date not later than the Determination Date,
even though those amounts are not yet made or required to be
made.
(4) any Plan distributions made within the Plan Year that
includes the Determination Date or within the four (4) preceding
Plan Years. However, in the case of distributions made after the
valuation date and prior to the Determination Date, such
distributions are not included as distributions for too heavy
purposes to the extent that such distributions are already
included in the participant's Aggregate Account balance as of the
valuation date. In the case of a distribution of an annuity
Contract, the amount of such distribution is deemed to be the
current actuarial value of the Contract, determined on the date
of the distribution. Notwithstanding anything herein to the
contrary, all distributions, including distributions made prior
to January 1, 1984, and distributions under a terminated plan
which if it had not been terminated would have been required to
be included in an Aggregation Group, will be counted. Further,
distributions from the Plan (including the cash value of life
insurance policies) of a Participant's account balance because of
death shall be treated as a distribution for the purpose of this
paragraph.
(5) any Employee contributions, whether voluntary or
mandatory. However, amounts attributable to tax deductible
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qualified voluntary employee contributions shall not be
considered to be a part of the Participant's Aggregate Account
balance.
(6) with respect to unrelated rollovers and plan-to-plan
transfers (ones which are both initiated by the Employee and made
from a plan maintained by one employer to a plan maintained by
another employer), if this Plan provides the rollovers or
plan-to-plan transfers, it shall always consider such rollovers
or plan-to-plan transfers as a distribution for the purposes of
this Section. If this Plan is the plan accepting such rollovers
or plan-to-plan transfers, it shall not consider such rollovers
or plan-to-plan transfers accepted after December 31, 1983 as
part of the Participant's Aggregate Account balance. However,
rollovers or plan-to-plan transfers accepted prior to January 1,
1984 shall be considered as part of the Participant's Aggregate
Account balance.
(7) with respect to related rollovers. and plan-to-plan
transfers (ones either not initiated by the Employee or made to a
plan maintained by the same employer), if this Plan provides the
rollover or plan-to-plan transfer, it shall not be counted as a
distribution for purposes of this Section. If this Plan is the
plan accepting such rollover or plan-to-plan transfer, it shall
consider such rollover or plan-to-plan transfer as part of the
Participant's Aggregate Account balance, irrespective of the date
on which such rollover or plan-to-plan transfer is accepted.
(8) For the purposes of determining whether two employers
are to be treated as the same employer in 2.2(c)(6) and 2.2(c)(7)
above, all employers aggregated under Code Section 414(b), (c),
(m) and to) are treated as the same employer.
(d) "Aggregation Group" means either a Required Aggregation Group
or a Permissive Aggregation Group as hereinafter determined.
(1) Required Aggregation Group: In determining a Required
Aggregation Group hereunder, each qualified plan of the Employer,
including any Simplified Employee Pension Plan, in which a Key
Employee is a participant in the Plan Year containing the
Determination Date or any of the four preceding Plan Years, and
each other qualified plan of the Employer which enables any
qualified plan in which a Key Employee participates to meet the
requirements of Code Sections 401(a) (4) or 410,will be required
to be aggregated. Such group shall be known as a Required
Aggregation Group.
In the case of a Required Aggregation Group, each plan in the
group will be considered a Top Heavy Plan if the Required
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Aggregation Group is a Top Heavy Group. No plan in the Required
Aggregation Group will be considered a Top Heavy Plan if the
Required Aggregation Group is not a Top Heavy Group.
(2) Permissive Aggregation Group: The Employer may also include
any other plan of the Employer, including any Simplified Employee
Pension Plan, not required to be included in the Required
Aggregation Group, provided the resulting group, taken as a
whole, would continue to satisfy the provisions of Code Sections
401 (a) (4) and 410. Such group shall be known as a Permissive
Aggregation Group.
In the case of a Permissive Aggregation Group, only a plan that
is part of the Required Aggregation Group will be considered a
Top Heavy Plan if the Permissive Aggregation Group is a Top Heavy
Group. No plan in the Permissive Aggregation Group will be
considered a Top Heavy Plan if the Permissive Aggregation Group
is not a Top Heavy Group.
(3) Only those plans of the Employer in which the Determination
Dates fall within the same calendar year shall be aggregated in
order to determine whether such plans are Top Heavy Plans.
(4) An Aggregation Group shall include any terminated plan of the
Employer if it was maintained within the last five 15) years
ending on the Determination Date.
(e) "Determination Date" means (a) the last day of the preceding
Plan Year, or (b) in the case of the first Plan Year, the last day of
such Plan Year.
(f) Present Value of Accrued Benefit: In the case of defined
benefit plan, the Present Value of Accrued Benefit for a Participant
other than a Key Employee shall be as determined using the single
accrual method used for all plans of the Employer and Affiliated
Employers, or if no such single method exists, using a method which
results in benefits accruing not more rapidly than the slowest accrual
rate permitted under Code Section 411(b)(1)(C). The determination of
the Present Value of Accrued Benefit shall be determined as of the
most recent valuation date that falls within or ends with the 12-month
period ending on the Determination Date, except as provided in Code
Section 416 and the Regulations thereunder for the first and second
plan years of a defined benefit plan.
However, any such determination must include present value of
accrued benefit attributable to any Plan distributions referred to in Section
2.2(c)(4) above, any Employee contributions referred to in Section 2.2(c)(5)
above or any related or unrelated rollovers referred to in Sections 2.2(c)(6)
and 2.2(c)(7) above.
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(g) "Top Heavy Group" means an Aggregation Group in which, as of
the Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key Employees
under all defined benefit plans included in the group, and
(2) the Aggregate Accounts of Key Employees under all
defined contribution plans included in the group, exceeds sixty
percent (60%) of a similar sum determined for all Participants.
(h) The Administrator shall determine whether this Plan is a Top
Heavy Plan on the Anniversary Date specified in the Adoption
Agreement. Such determination of the top heavy ratio shall be in
accordance with Code Section 416 and the Regulations thereunder.
2.5 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) The Employer shall be empowered to appoint and remove the
Trustee and the Administrator from time to time as it deems necessary
for the proper administration of the Plan to assure that the Plan is
being operated for the exclusive benefit of the Participants and their
Beneficiaries in accordance with the terms of the Plan, the Code, and
the Act.
(b) The Employer shall establish a "funding policy and method",
i.e., it shall determine whether the Plan has a short run need for
liquidity (e.g., to pay benefits) or whether liquidity is a long run
goal and investment growth (and stability of same) is a more current
need, or shall appoint a qualified person to do so. The Employer or
its delegate shall communicate such needs and goals to the Trustee,
who shall coordinate such Plan needs with its investment policy. The
communication of such a "funding policy and method' shall not,
however, constitute a directive to the Trustee as to investment of the
Trust Funds. Such "funding policy and method" shall be consistent with
the objectives of this Plan and with the requirements of Title I of
the Act.
(c) The Employer may, in its discretion, appoint an Investment
Manager to manage all or a designated portion of the assets of the
Plan. In such event, the Trustee shall follow the directive of the
Investment Manager in investing the assets of the Plan managed by the
Investment Manager.
(d) The Employer shall periodically review the performance of any
Fiduciary or other person to whom duties have been delegated or
allocated by it under the provisions of this Plan or pursuant to
procedures established hereunder. This requirement may be satisfied by
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formal periodic review by the Employer or by a qualified person
specifically designated by the Employer, through day-to-day conduct
and evaluation, or through other appropriate ways.
2.7 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall appoint one or more Administrators. Any
person, including, but not limited to, the Employees of the Employer, shall be
eligible to serve as an Administrator. Any person so appointed shall signify his
acceptance by filing written acceptance with the Employer. An Administrator may
resign by delivering his written resignation to the Employer or be removed by
the Employer by delivery of written notice of removal, to take effect at a date
specified therein, or upon delivery to the Administrator if no date is
specified.
The Employer, upon the resignation or removal of - an
Administrator, shall promptly designate in writing a successor to this position.
If the Employer does not appoint an Administrator, the Employer will function as
the Administrator.
2.9 ALLOCATION AND DELEGATION OF RESPONSIBILITIES
If more than one person is appointed as Administrator, the
responsibilities of each Administrator may be specified by the Employer and
accepted in writing by each Administrator. In the event that no such delegation
is made by the Employer, the Administrators may allocate the responsibilities
among themselves, in which event the Administrators shall notify the Employer
and the Trustee in writing of such action and specify the responsibilities of
each Administrator. The Trustee thereafter shall accept and rely upon any
documents executed by the appropriate Administrator until such time as the
Employer or the Administrators file with the Trustee a written revocation of
such designation.
2.11 POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to administer
the Plan for the exclusive benefit of the Participants and their Beneficiaries,
subject to the specific terms of the Plan. The Administrator shall administer
the Plan in accordance with its terms and shall have the power and discretion to
construe the terms of the Plan and determine all questions arising in connection
with the administration, interpretation, and application of the Plan. Any such
determination by the Administrator shall be conclusive and binding upon all
persons. The Administrator may establish procedures, correct any defect, supply
any information, or reconcile any inconsistency in such manner and to such
extent as shall be deemed necessary or advisable to carry out the purpose of the
Plan; provided, however, that any procedure, discretionary act, interpretation
or construction shall be done in a nondiscriminatory manner based upon uniform
principles consistently applied and shall be consistent with the intent that the
Plan Shall continue to be deemed a qualified plan under the terms of Code
Section 401(a), and shall comply with the terms of the Act and all regulations
20
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issued pursuant thereto. The Administrator shall have all powers necessary or
appropriate to accomplish his duties under this Plan.
The Administrator shall be charged with the duties of the general
administration of the Plan, including, but not limited to, the following:
(a) the discretion to determine all questions relating to the
eligibility of Employees to participate or remain a Participant
hereunder and to receive benefits under the Plan;
(b) to compute, certify, and direct the Trustee with respect to
the amount and the kind of benefits to which any Participant shall be
entitled hereunder;
(c) to authorize and direct the Trustee with respect to all
nondiscretionary or otherwise directed disbursements from the Trust
Fund;
(d) to maintain all necessary records for the administration of
the Plan;
(e) to interpret the provisions of the Plan and to make and
publish such rules for regulation of the Plan as are consistent with
the terms hereof;
(f) to determine the size and type of any Contract to be
purchased from the Insurer;
(g) to compute and certify to the Employer and to the Trustee
from time to time the sums of money necessary or desirable to be
contributed to the Trust Fund;
(h) to consult with the Employer and the Trustee regarding the
short and long-term liquidity needs of the Plan in order that the
Trustee can exercise any investment discretion in a manner designed to
accomplish specific objectives;
(i) to prepare and distribute to Employees a procedure for
notifying Participants and Beneficiaries of their rights to elect
Joint and Survivor Annuities and Pre-Retirement Survivor Annuities if
required by the Code and Regulations thereunder;
(j) to assist any Participant regarding his rights, benefits, or
elections available under the Plan.
2.13 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken and
shall keep all other books of account, records, and other data that may be
necessary for proper administration of the Plan and shall be responsible for
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supplying all information and reports to the Internal Revenue Service,
Department of Labor, Participants, Beneficiaries and others as required by law.
2.15 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the
Administrator, may appoint counsel, specialists, advisers, and other persons as
the Administrator or the Trustee deems necessary or desirable in connection with
the administration of this Plan.
2.17 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 the Compensation of all Participants, their Hours of
Service, their Years of Service, their retirement, death, disability, or
termination of employment, and such other pertinent facts as the Administrator
may require; and the Administrator shall advise the Trustee of such of the
foregoing facts as may be pertinent to the Trustee's duties under the Plan. The
Administrator may rely upon such information as is supplied by the Employer and
shall have no duty or responsibility to verify such information.
2.19 PAYMENT OF EXPENSES
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.
2.21 MAJORITY ACTIONS
Except where there has been an allocation and delegation of
administrative authority pursuant to Section 2.5, if there shall be more than
one Administrator, they shall act by a majority of their number, but may
authorize one or more of them to sign all papers on their behalf.
2.23 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing with
the Administrator. Written notice of the disposition of a claim shall be
furnished to the claimant within 90 days after the application is filed. In the
event the claim is denied, the reasons for the denial shall be specifically set
forth in the notice in language calculated to be understood by the claimant,
pertinent provisions of the Plan shall be cited, and, where appropriate, an
22
<PAGE>
explanation as to how the claimant can perfect the claim will be provided. In
addition, the claimant shall be furnished with an explanation of the Plan's
claims review procedure.
2.25 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of either, who has
been denied a benefit by a decision of the Administrator pursuant to Section
2.12 shall be entitled to request the Administrator to give further
consideration to his claim by filing with the Administrator a written request
for a hearing. Such request, together with a written statement of the reasons
why the claimant believes his claim should be allowed, shall be filed with the
Administrator no later than 60 days after receipt of the written notification
provided for in Section 2.12. The Administrator shall then conduct a hearing
within the next 60 days, at which the claimant may be represented by an attorney
or any other representative of his choosing and expense and at which the
claimant shall have an opportunity to submit written and oral evidence and
arguments in support of his claim. At the hearing.. (or prior thereto upon 5
business days written notice to the Administrator) the claimant or his
representative shall have an opportunity to review all documents in the
possession of the Administrator which are pertinent to the claim at issue and
its disallowance. Either the claimant or the Administrator may cause a court
reporter to attend the hearing and record the proceedings. In such event, a
complete written transcript of the proceedings shall be furnished to both
parties by the court reporter. The full expense of any such court reporter and
such transcripts shall be borne by the party causing the court reporter to
attend the hearing. A final decision as to the allowance of the claim shall be
made by the Administrator within 60 days of receipt of the appeal (unless there
has been an extension of 60 days due to special circumstances, provided the
delay and the special circumstances occasioning it are communicated to the
claimant within the 60 day period). Such communication shall be written in a
manner calculated to be understood by the claimant and shall include specific
reasons for the decision and specific references to the pertinent Plan
provisions on which the decision is based.
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee shall be eligible to participate hereunder
on the date he has satisfied the requirements specified in the Adoption
Agreement.
3.3 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee who has become eligible to be a Participant
shall become a Participant effective as of the day specified in the Adoption
Agreement.
In the event an Employee who has satisfied the Plan's eligibility
requirements and would otherwise have become a Participant shall go from a
classification of a noneligible Employee to an Eligible Employee, such Employee
shall become a Participant as of the date he becomes an Eligible Employee.
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In the event an Employee who has satisfied the Plan's eligibility
requirements and would otherwise become a Participant shall go from a
classification of an Eligible Employee to a noneligible Employee and becomes
ineligible to participate and has not incurred a 1-Year Break in Service, such
Employee shall participate in the Plan as of the date he returns to an eligible
class of Employees. If such Employee does incur a 1-Year Break in Service,
eligibility will be determined under the Break in Service rules of the Plan.
3.5 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each
Employee for participation in the Plan based upon information furnished by the
Employer. Such determination shall be conclusive and binding upon all persons,
as long as the same is made pursuant to the Plan and the Act. Such determination
shall be subject to review per Section 2.13.
3.7 TERMINATION OF ELIGIBILITY
In the event a Participant shall go from a classification of an
Eligible Employee to an ineligible Employee, such Former Participant shall
continue to vest in his interest in the Plan for each Year of Service completed
while a noneligible Employee, until such time as his Participant's Account shall
be forfeited or distributed pursuant to the terms of the Plan. Additionally, his
interest in the Plan shall continue to share in the earnings or the Trust Fund.
3.9 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be included as a
Participant in the Plan is erroneously omitted and discovery of such omission is
not made until after a contribution by his Employer for the year has been made,
the Employer shall make a subsequent contribution, if necessary after the
application of Section 4.3(e), so that the omitted Employee receives a total
amount which the said Employee would have received had he not been omitted. Such
contribution shall be made regardless of whether or not it is deductible in
whole or in part in any taxable year under applicable provisions of the Code.
3.11 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have been
included as a Participant in the plan is erroneously included and discovery of
such incorrect inclusion is not made until after a contribution for the year has
been made, the Employer shall not be entitled to recover the contribution made
with respect to the ineligible person regardless of whether or not a deduction
is allowable with respect to such contribution. In such event, the amount
24
<PAGE>
contributed with respect to the ineligible person shall constitute a Forfeiture
for the Plan Year in which the discovery is made.
3.13 ELECTION NOT TO PARTICIPATE
An Employee may, subject to the approval of the Employer, elect
voluntarily not to participate in the Plan. The election not to participate must
be communicated to the Employer, in writing, at least thirty (30) days before
the beginning of a Plan Year. For Standardized Plans, a Participant or an
Eligible Employee may not elect not to participate. Furthermore, the foregoing
election not to participate shall not be available with respect to partners in a
partnership.
3.15 CONTROL OF ENTITIES BY OWNER-EMPLOYEE
(a) If this Plan provides contributions or benefits for one or
more Owner-Employees who control both the business for which this Plan
is established and one or more other entities, this Plan and the plan
established for other trades or businesses must, when looked at as a
single Plan, satisfy Code Sections 401(a) and (d) for the Employees of
this and all other entities.
(b) if the Plan provides contributions or benefits for one or
more Owner-Employees who control one or more other trades or
businesses, the employees of the other trades or businesses must be
included in a plan which satisfies Code Sections 401(a) and (d) and
which provides contributions and benefits not less favorable than
provided for Owner-Employees under this Plan.
(c) If an individual is covered as an owner-Employee under the
plans of two or more trades or businesses which are not controlled and
the individual controls a trade or business, then the benefits or
contributions of the employees under the plan of the trades or
businesses which are controlled must be as favorable as those provided
for him under the most favorable plan of the trade or business which
is not controlled.
(d) For purposes of the preceding paragraphs, an Owner-Employee,
or two or more Owner-Employees, will be considered to control an
entity if the Owner-Employee, or two or more Owner-Employees together:
(1) own the entire interest in an unincorporated
entity, or
(2) in the case of a partnership, own more than 50
percent of either the capital interest or the profits
interest in the partnership.
(e) For purposes of the preceding sentence, an Owner-Employee, or
two or more Owner-Employees shall be treated as owning any interest in
a partnership which is owned, directly or indirectly, by a partnership
which such Owner-Employee, or such two or more Owner-Employees are
considered to control within the meaning of the preceding sentence.
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ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
(a) For a Money Purchase Plan
(1) The Employer shall make contributions over such
period of years as the Employer may determine on the following
basis. On behalf of each Participant eligible to share in
allocations, for each year of his participation in this Plan,
the Employer shall contribute the amount specified in the
Adoption Agreement. All contributions by the Employer shall be
made in cash or in such property as is acceptable to the
Trustee. The Employer shall be required to obtain a waiver
from the Internal Revenue Service for any Plan Year in which
it is unable to make the full required contribution to the
Plan. In the event a waiver is obtained, this Plan shall be
deemed to be an individually designed plan.
(2) For any Plan Year beginning prior to January 1,
1990, and if elected in the non-standardized Adoption
Agreement for any Plan Year beginning on or after January 1,
1990, the Employer shall not contribute on behalf of a
Participant who performs less than a Year of Service during
any Plan Year, unless there is a Short Plan Year or a
contribution is required pursuant to 4.3(h).
(3) Notwithstanding the foregoing, the Employer's
contribution for any Fiscal Year shall not exceed the maximum
amount allowable as a deduction to the Employer under the
provisions of Code Section 404. However, to the extent
necessary to provide the top heavy minimum allocations, the
Employer shall make a contribution even if it exceeds the
amount which is deductible under Code Section 404.
(b) For a Profit Sharing Plan -
(1) For each Plan Year, the Employer shall contribute
to the Plan such amount as specified by the Employer in the
Adoption Agreement. Notwithstanding the foregoing, however,
the Employer's contribution for any Fiscal Year shall not
exceed the maximum amount allowable as a deduction to the
Employer under the provisions of Code Section 404. All
contributions by the Employer shall be made in cash or in such
property as is acceptable to the Trustee.
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(2) Except, however, to the extent necessary to
provide the top heavy minimum allocations, the Employer shall
make a contribution even if it exceeds current or accumulated
Net Profit or the amount which is deductible under Code
Section 404.
4.3 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION
The Employer shall generally pay to the Trustee its
contribution to the Plan for each Plan Year within the time prescribed by law,
including extensions of time, for the filing of the Employer's federal income
tax return for the Fiscal Year.
4.5 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and maintain an account
in the name of each Participant to which the Administrator shall credit
as of each Anniversary Date, or other valuation date, all amounts
allocated to each such Participant as set forth herein.
(b) The Employer shall provide the Administrator with all
information required by the Administrator to make a proper allocation
of the Employer's contributions for each Plan Year. Within a reasonable
period of time after the date of receipt by the Administrator of such
information, the Administrator shall allocate such contribution as
follows:
(1) For a Money Purchase Plan:
(i) The Employer's Contribution shall be
allocated to each Participant's Combined Account in
the manner set forth in Section 4.1 herein and as
specified in Section E2 of the Adoption Agreement.
(2) For an Integrated Profit Sharing Plan:
(i) The Employer's contribution shall be
allocated to each Participant's Account, except as
provided in Section 4.3(f), in a dollar amount equal
to 5.7% of the sum of each Participant's total
Compensation plus Excess Compensation. If the
Employer does not contribute such amount for all
Participants, each Participant will be allocated a
share of the contribution in the same proportion that
his total Compensation plus his total Excess
Compensation for the Plan Year bears to the total
Compensation plus the total Excess Compensation of
all Participants for that year.
Regardless of the preceding, 4.3% shall be substituted for
5.7% above if Excess Compensation is based on more than 20%
and less than or equal to 80% of the Taxable Wage Base. If
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Excess Compensation is based on less than 100% and more than
80% of the Taxable Wage Base, then 5.4% shall be substituted
for 5.7% above.
(ii) The balance of the Employer's
contribution over the amount allocated above, if any,
shall be allocated to each Participant's Combined
Account in the same proportion that his total
Compensation for the Year bears to the total
Compensation of all Participants for such year.
(iii) Except, however, for any Plan Year
beginning prior to January 1, 1990, and if elected in
the non-standardized Adoption Agreement for any Plan
Year beginning on or after January 1, 1990, a
Participant who performs less than a Year of Service
during any Plan Year shall not share in the
Employer's contribution for that year, unless there
is a Short Plan Year or a contribution is required
pursuant to Section 4.3(h).
(3) For a Non-Integrated Profit Sharing Plan:
(i) The Employer's contribution shall be
allocated to each Participant's Account in the same
proportion that each such Participant's Compensation
for the year bears to the total Compensation of all
Participants for such year.
(ii) Except, however, for any Plan Year
beginning prior to January 1, 1990, and if elected in
the non-standardized Adoption Agreement for any plan
Year beginning on or after January 1, 1990, a
Participant who performs less than a Year of Service
during any Plan Year shall not share in the
Employer's contribution for that year, unless there
is a Short Plan Year or a contribution is required
pursuant to Section 4.3(h).
(c) As of each Anniversary Date or other valuation date,
before allocation of Employer contributions and Forfeitures, any
earnings or losses (net appreciation or net depreciation) of the Trust
Fund shall be allocated in. the same proportion that each Participant's
and Former Participant's nonsegregated accounts bear to the total of
all Participants' and Former Participants' nonsegregated accounts as of
such date. If any nonsegregated account of a Participant has been
distributed prior to the Anniversary Date or other valuation date
subsequent to a Participant's termination of employment, no earnings or
losses shall be credited to such account.
Notwithstanding the above, with respect to contributions made
to the Plan after the previous Anniversary Date or allocation date, the
method specified in the Adoption Agreement shall be used.
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(d) Participants' Accounts shall be debited for any insurance
or annually premiums paid, if any, and credited with any dividends or
interest received on insurance contracts.
(e) As of each Anniversary Date any amounts which became
Forfeitures since the last Anniversary Date shall first be made
available to reinstate previously forfeited account balances of Former
Participants, if any, in accordance with Section 6.4(g)(2) or be used
to satisfy any contribution that may be required pursuant to Section
3.5 and/or 6.9. The remaining Forfeitures, if any, shall be treated in
accordance with the Adoption Agreement. Provided, however, that in the
event the allocation of Forfeitures provided herein shall cause the
"annual addition" (as defined in Section 4.4) to any Participant's
Account to exceed the amount allowable by the Code, the excess shall be
allocated in accordance with Section 4.5. Except, however, for any Plan
Year beginning prior to January 1, 1990, and if elected in the
non-standardized Adoption Agreement for any Plan Year beginning on or
after January 1, 1990, a Participant who performs less than a Year of
Service during any Plan Year shall not share in the Plan Forfeitures
for that year, unless there is a Short Plan Year or a contribution
required pursuant to Section 4.3(h).
(f) Minimum Allocations Required for Top Heavy Plan Years:
Notwithstanding the foregoing, for. any Top Heavy Plan Year, the sum of
the Employer's contributions and Forfeitures allocated to the
Participant's Combined Account of each Non-Key Employee shall be equal
to at least three percent (3%) of such Non-Key Employee's "415
Compensation" (reduced by contributions and forfeitures, if any,
allocated to each Non-Key Employee in any defined contribution plan
included with this plan in a Required Aggregation Group). However, if
(i) the sum of the Employer's contributions and Forfeitures allocated
to the Participant's Combined Account of each Key Employee for such Top
Heavy Plan Year is less than three percent (3%) of each Key Employee's
"415 Compensation" and (ii) this Plan is not required to be included in
an Aggregation Group to enable a defined benefit plan to meet the
requirements of Code Section 401(a)(4) or 410, the sum of the
Employer's contributions and Forfeitures allocated to the Participant's
Combined Account of each Non-Key Employee shall be equal to the largest
percentage allocated to the Participant's Combined Account of any Key
Employee.
However, for each Non-Key Employee who is a Participant in a
paired Profit Sharing Plan or 401(k) Profit Sharing Plan and a paired
Money Purchase Plan, the minimum 3% allocation specified above shall be
provided in the Money Purchase Plan.
If this is an integrated Plan, then for any Top Heavy Plan
Year the Employer's contribution shall be allocated as follows:
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(1) An amount equal to 3% multiplied by each
Participant's Compensation for the Plan Year shall be
allocated to each Participant's Account. If the Employer does
not contribute such amount for all Participants, the amount
shall be allocated to each Participant's Account in the same
proportion that his total Compensation for the Plan Year bears
to the total Compensation of all Participants for such year.
(2) The balance of the Employer's contribution over
the amount allocated under subparagraph (1) hereof shall be
allocated to each Participant's Account in a dollar amount
equal to 3% multiplied by a Participant's Excess Compensation.
If the Employer does not contribute such amount for all
Participants, each Participant will be allocated a share of
the contribution in the same proportion that his Excess
Compensation bears to the total Excess Compensation of all
Participants for that year.
(3) The balance of the Employer's contribution over
the amount allocated under subparagraph (2) hereof shall be
allocated to each Participant's Account in dollar amount equal
to 2.7% multiplied by the sum. of each Participant's total
Compensation plus Excess Compensation. If the Employer does
not contribute such amount for all Participants, each
Participant will be allocated a share of the contribution in
the same proportion that his total Compensation plus his total
Excess Compensation for the Plan Year bears to the total
compensation plus the total Excess Compensation of all
Participants for that year.
Regardless of the preceding, 1.3% shall be substituted for
2.7% above if Excess Compensation is based on more than 20%
and less than or equal to 80% of the Taxable Wage Base. If
Excess Compensation is based on less than 100% and more than
80% of the Taxable Wage Base, then 2.4% shall be substituted
for 2.7% above.
(4) The balance of the Employer's contributions over
the amount allocated above, if any, shall be allocated to each
Participant's Account in the same proportion that his total
Compensation for the Plan Year bears to the total Compensation
of all Participants for such year.
For each Non-Key Employee who is a Participant In this Plan
and another non-paired defined contribution plan maintained by the
Employer, the minimum 3% allocation specified above shall be provided
as specified in F3 of the Adoption Agreement.
(g) For purposes of the minimum. allocations set forth above,
the percentage allocated to the Participant's Combined Account of all
Key Employee shall be equal to the ratio of the sum of the Employer's
contributions and Forfeitures allocated on behalf of such Key Employee
divided by the "415 Compensation" for such Key Employee.
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<PAGE>
(h) For any Top Heavy Plan Year, the minimum allocations set
forth :in this Section shall be allocated to the Participant's Combined
Account of all Non-Key Employees who are Participants and who are
employed by the Employer on the last day of the Plan Year, including
Non-Key Employees who have (1) failed to complete a Year of Service; or
(2) declined to make mandatory contributions (if required) or, in the
case of a cash or deferred arrangement, elective contributions to the
Plan.
(i) Notwithstanding anything herein to the contrary, in any
Plan Year in which the Employer maintains both this Plan and a defined
benefit pension plan included in a Required Aggregation Group which is
top heavy, the Employer shall not be required to provide a Non-Key
Employee with both the full separate minimum defined benefit plan
benefit and the full separate defined contribution plan allocations.
Therefore, if the Employer maintains both a Defined Benefit and a
Defined Contribution Plan that are a Top Heavy Group, the top heavy
minimum benefits shall be provided as follows:
(1) Applies if F1b of the Adoption Agreement is Selected
(i) The requirements of Section 2.1 shall apply
except that each Non-Key Employee who is a Participant in the
Profit Sharing Plan or Money Purchase Plan and who is also a
Participant. in the Defined Benefit Plan shall receive a
minimum allocation of five percent (5%) of such Participant's
0415 Compensation" from the applicable Defined Contribution
Plan(s).
(ii) For each Non-Key Employee who is a Participant
only in the Defined Benefit Plan the Employer will provide a
minimum non-integrated benefit equal to 2% of his highest five
consecutive year average "415 Compensation" for each Year of
Service while a Participant in the Plan, in which the Plan is
top heavy, not to exceed ten.
(iii) For each Non-Key Employee who is a Participant
only in this Defined Contribution Plan, the Employer shall
provide a contribution equal to 3% of his n415 Compensation".
(2) Applies if Flc of the Adoption Agreement is Selected
(i) The minimum allocation specified in Section
4.3(i)(l)(i) shall be 7 1/2% if the Employer elects in the
Adoption Agreement for years in which the Plan is Top Heavy,
but not Super Top Heavy.
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<PAGE>
(ii) The minimum benefit specified in Section
4.3(i)(1)(ii) shall be 3% if the Employer elects in the
Adoption Agreement for years in which the Plan is Top Heavy,
but not Super Top Heavy.
(iii) The minimum allocation specified in Section
4.3(i)(1)(iii) shall be 4% if the Employer elects in the
Adoption Agreement for years in which the Plan is Top Heavy,
but not Super Top Heavy.
(j) For the purposes of this Section, "415 Compensation" shall
be limited to $200,000 (unless adjusted in such manner as permitted
under Code Section 415(d)). However, for Plan Years beginning prior to
January 1, 1989, the $200,000 limit shall apply only for Top Heavy Plan
Years and shall not be adjusted.
(k) Notwithstanding anything herein to the contrary, any
Participant who terminated employment during the Plan Year for reasons
other than death, Total and Permanent Disability, or retirement shall
or shall not share in the allocations of the Employer's Contributions
and Forfeitures as provided in the Adoption Agreement. Notwithstanding
the foregoing, for Plan Years beginning after 1989, if this is a
standardized Plan, any such terminated Participant shall share in the
allocations as provided in this Section provided such Participant
completed more than 500 Hours of Service.
(l) Notwithstanding anything herein to the contrary,
Participants terminating for reasons of death, Total and Permanent
Disability, or retirement shall share in the allocations as provided in
this Section regardless of whether they completed a Year of Service
during the Plan Year.
(m) If a Former Participant is reemployed after five (5)
consecutive 1-Year Breaks in Service, then separate accounts shall be
maintained as follows:
(1) one account for nonforfeitable benefits
attributable to post-break service; and
(2) one account representing his employer derived
account balance in the Plan attributable to post-break
service.
(n) Notwithstanding any election in the Adoption Agreement to
the contrary, if this is a non-standardized Plan that would otherwise
fail to meet the requirements of Code Sections 401(a)(26), 410(b)(1),
or 410(b)(2)(A)(i) and the Regulations thereunder because Employer
Contributions have not been allocated to a sufficient number or
percentage of Participants for a Plan Year, then the following rules
shall apply:
(1) The group of Participants eligible to share in
the Employer's contribution and Forfeitures for the Plan Year
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<PAGE>
shall be expanded to include the minimum number of
Participants who would not otherwise be eligible as are
necessary to satisfy the applicable test specified above. The
specific participants who shall become eligible under the
terms of this paragraph shall be those who are actively
employed on the last day of the Plan Year and, when compared
to similarly situated Participants, have completed the
greatest number of Hours of Service in the Plan Year.
(2) If after application of paragraph (1) above, the
applicable test is still not satisfied, then the group of
Participants eligible to share in the Employer's contribution
and Forfeitures for the Plan year shall be further expanded to
include the minimum number of Participants who are not
actively employed on the last day of the Plan Year as are
necessary to satisfy the applicable test. The specific
Participants who shall become eligible to share shall be those
Participants, when compared to similarly situated
Participants, who have completed the greatest number of Hours
of Service in the Plan Year before terminating employment.
Nothing in this Section shall permit the reduction of
a Participant's accrued benefit. Therefore any amounts that
have previously been allocated to Participants may not be
reallocated to satisfy these requirements. In such event, the
Employer shall make an additional contribution equal to the
amount such affected Participants would have received had
they been included in the allocations, even if it exceeds the
amount which would be deductible under Code Section 404. Any
adjustments to the allocations pursuant to this paragraph
shall be considered a retroactive amendment adopted by the
last day of the Plan Year.
4.7 MAXIMUM ANNUAL ADDITIONS
(a)(1) If the Participant does not participate in,
and has never participated in another qualified plan
maintained by the Employer, or a welfare benefit fund (as
defined in Code Section 419(e)), maintained by the Employer,
or an individual medical account (as defined ;in Code Section
415(1)(2)) maintained by the Employer, which provides Annual
Additions, the amount of Annual Additions which may be
credited to the Participant's accounts for any Limitation
Year shall not exceed the lesser of the Maximum Permissible
Amount or any other limitation contained in this Plan. If the
Employer contribution that would otherwise be contributed or
allocated to the Participant's accounts would cause the
Annual Additions for the Limitation Year to exceed the
Maximum Permissible Amount, the amount contributed or
allocated will be reduced so that the Annual Additions for
the Limitation Year will equal the Maximum Permissible
Amount.
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<PAGE>
(2) Prior to determining the Participant's actual Compensation
for the Limitation Year, the Employer may determine the
Maximum Permissible Amount for a Participant on the basis of a
reasonable estimation of the Participant's Compensation for
the Limitation Year, uniformly determined for all Participants
similarly situated.
(3) 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.
(4) If pursuant to Section 4.4(a)(2) or as a result of the
allocation of Forfeitures, there is an Excess Amount, the
excess will be disposed of as follows:
(i) Any nondeductible Voluntary Employee
Contributions, to the extent there is an Excess
Amount, the excess will be disposed of as follows:
(ii) If, after the application of subparagraph (i),
an Excess Amount still exists, and the Participant is
covered by the Plan at the end of the Limitation
Year, the Excess Amount in the Participant's account
will be sued to reduce Employer contributions
(including any allocation of Forfeitures) for such
Participant in the next Limitation Year, and each
succeeding Limitation Year if necessary;
(iii) If, after the application of subparagraph (i),
an Excess Amount still exists, and the Participation
is not covered by the Plan at the end of a Limitation
Year, the Excess Amount will be held allocated in a
suspense account. The suspense account will be
applied to reduce future Employer contributions
(including allocation of any Forfeitures) for all
remaining Participants in the next Limitation Year,
and each succeeding Limitation Year if necessary;
(iv) 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 and 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 Participant's
accounts before any employer contributions or any
employee contributions may be made to the plan for
that Limitation Year. Excess amounts may not be
distributed to participants or former participants.
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<PAGE>
(b)(1) This subsection applies if, in addition to this Plan,
the Participant is covered under another qualified Regional Prototype
defined contribution plan maintained by the Employer, or a welfare
benefit fund (as defined in Code Section 419(e)) maintained by the
Employer, or an individual medical account (as defined in Code Section
415(l)(2)) maintained by the Employer, which provides Annual Additions,
during any Limitation Year. The Annual Additions which may be credited
to a Participant's accounts under this Plan for any such Limitation
Year shall not exceed the maximum Permissible Amount reduced by the
Annual Additions credited to a Participant's accounts under the other
plans and welfare benefit funds for the same Limitation Year. If the
Annual Additions with respect to the Participant under other defined
contribution plans and welfare benefit funds maintained by the Employer
are less than the Maximum Permissible Amount and the Employer
contribution that would otherwise be contributed or allocated to the
Participant's accounts under this Plan would cause the Annual Additions
for the Limitation Year to exceed this limitation, the amount
contributed or allocated will be reduced so that the Annual Additions
under all such plans and welfare benefit funds for the Limitation Year
will equal the Maximum Permissible Amount. if the Annual Additions with
respect to the Participant under such other defined contribution plans
and welfare benefit funds in the aggregate are equal to or greater than
the Maximum Permissible Amount, no amount will be contributed or
allocated to the Participant's account under this Plan for the
Limitation Year.
(2) Prior to determining the Participant's actual
Compensation for the Limitation Year, the Employer may
determine the Maximum Permissible Amount for a Participant in
the manner described in Section 4.4(a)(2).
(3) As soon as is administratively feasible after the
end of the Limitation Year, the Maximum Permissible Amount for
the Limitation Year will be determined on the basis of the
Participant's actual Compensation for the Limitation Year.
(4) If, pursuant to Section 4.4(b)(2) or as a result
of the allocation of Forfeitures, a Participant's Annual
Additions under this Plan and such other plans would result in
an Excess Amount for a Limitation Year, the Excess Amount will
be deemed to consist of the Annual Additions last allocated,
except that Annual Additions attributable to a welfare benefit
fund or individual medical account will be deemed to have been
allocated first regardless of the actual allocation date.
(5) 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
attributed to this Plan will be the product of:
(i) the total Excess Amount allocated as
of such date, times
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<PAGE>
(ii) the ratio of (1) the Annual Additions
allocated to the Participant for the Limitation Year
as of such date under this Plan to (2) the total
Annual Additions allocated to the Participant for the
Limitation Year as of such date under this and all
the other qualified defined contribution plans.
(6) Any Excess Amount attributed to this Plan will be
disposed in the manner described in Section 4.4(a)(4).
(c) If the Participant is covered under another qualified
defined contribution plan maintained by the Employer which is not a
Regional Prototype Plan, Annual Additions which may be credited to the
Participant's account under this Plan for any Limitation Year will be
limited in accordance with Section 4.4(b), unless the Employer provides
other limitations in the Adoption Agreement.
(d) If the Employer maintains, or at any time maintained, a
qualified defined benefit plan covering any Participant in this Plan
the sum of the Participant's Defined Benefit Plan Fraction and Defined
Contribution Plan Fraction will not exceed 1.0 in any Limitation Year.
The Annual Additions which may be credited to the Participant's account
under this Plan for any Limitation Year will be limited in accordance
with the Limitation on Allocations Section of the Adoption Agreement.
(e) For purposes of applying the limitations of Code Section
415, the transfer of funds from one qualified plan to another is not an
"annual addition". In addition, the following are not Employee
contributions for the purposes of Section 4.4(f)(1)(2): (1) rollover
contributions (as defined in Code Sections 402(a)(5), 403(a)(4),
403(b)(8) and 408(d)(3)); (2) repayments of loans made to a Participant
from the Plan; (3) repayments of distributions received by an Employee
pursuant to Code Section 411(a)(7)(B) (cash-outs); (4) repayments of
distributions received by an Employee pursuant to Code Section
411(a)(3)(D) (mandatory contributions); and (5) Employee contributions
to a simplified employee pension excludable from gross income under
Code Section 408(k)(6).
(f) For purposes of this Section, the following terms shall be
defined as follows:
(1) Annual Additions means the sum credited to a Participant's
accounts for any Limitation Year of (1) Employer
contributions, (2) effective with respect to "limitation
years" beginning after December 31, 1986, Employee
contributions, (3) forfeitures, (4) amounts allocated, after
March 31, 1984, to an individual medical account, as defined
in Code Section 415(l)(2), which is part of a pension or
annuity plan maintained by the Employer and (5) amounts
derived from contributions paid or accrued after December 31,
1985, in taxable years ending after such date, which are
attributable to post-retirement medical benefits allocated to
36
<PAGE>
the separate account of a key employee (as defined in Code
Section 419A(d)(3)) under a welfare benefit fund (as defined
in Code Section 419(e)) maintained by the Employer. Except,
however, the "415 Compensation" percentage limitation referred
to in paragraph (a)(2) above shall not apply to: (1).any
contribution for medical benefits (within the meaning of Code
Section 419A(f)(2)) after separation from service which is
otherwise treated as an "annual addition", or (2) any amount
otherwise treated as an "annual addition" under Code Section
415(l)(1). Notwithstanding the foregoing, for "limitation
years" beginning prior to January 1, 1987, only that portion
of Employee contributions equal to the lesser of Employee
contributions in excess of six percent (6%) of "415
Compensation" or one-half of Employee contributions shall be
considered an "annual addition".
For this purpose, any Excess Amount applied under Sections and
4.4(b)(6) in the Limitation Year to reduce Employer
contributions shall be considered Annual Additions for such
Limitation Year.
(2) Compensation means a Participant's earned income,
wages, salaries, fees for professional services and other
amounts received for personal services actually rendered in
the course of employment with the Employer maintaining the
Plan (including, but not limited to, commissions paid
salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums,
tips, and bonuses) and excluding the following:
(i) Employer contributions to a plan of deferred
compensation which are not includible in the Employee's gross
income for the taxable year in which contributed, or Employer
contributions under a simplified employee pension plan to the
extent such contributions are excludable from the Employee's
gross income, or any a plan of deferred compensation;
(ii) contributions made by the Employer to a plan of
deferred compensation to the extent that all or a portion of
such contributions are recharacterized as a voluntary Employee
contribution;
(iii) amounts realized from the exercise of a
non-qualified stock option, or when restricted stock (or
property) held by an Employee becomes freely transferable or
is no longer subject to a substantial risk of forfeiture;
(iv) amounts realized from the sale, exchange or
other disposition of stock acquired under a qualified stock
option; and
(v) other amounts which received special tax
benefits, or contributions made by an Employer (whether or not
under a salary reduction agreement) towards the purchase of an
37
<PAGE>
annuity contract described in Code Section 403(b) (whether or
not the contributions are excludable from the gross income of
the Employee).
For purposes of applying the limitations of this Section 4.4,
Compensation for any Limitation Year is the Compensation
actually paid or includible in gross income during such year.
Notwithstanding the preceding sentence, Compensation for a
Participant in a profit-sharing plan who is permanently and
totally disabled (as defined in Code Section 22(e)(3)) is the
Compensation such Participant would have received for the
Limitation Year if the Participant had been paid at the rate
of Compensation paid immediately before becoming permanently
and totally disabled; such imputed Compensation for the
disabled Participant may be taken into account only if the
Participant is not a Highly Compensated Employee and
contributions made on behalf of such Participant are
nonforfeitable when made.
(3) Defined Benefit Fraction means a fraction, the
numerator of which is the sum of the Participant's Projected
Annual Benefits under all the defined benefit plans (whether
or not terminated) maintained by the Employer, and the
denominator of which is the lesser of 125 percent of the
dollar limitation determined for the Limitation Year under
Code Sections 415(b) and (d) or 140 percent of his Highest
Average Compensation including any adjustments under Code
Section 415(b). Notwithstanding the above, if the Participant
was a Participant as of the first day of the first Limitation
Year beginning after December 31, 1986, in one or more defined
benefit plans maintained by the Employer which were in
existence on may 6, 1986, the denominator of this fraction
will not be less than 125 percent of the sum of the annual
benefits under such plans which the Participant had accrued as
of the end of the close of the last Limitation Year beginning
before January 1, 1987, disregarding any changes in the terms
and conditions of the plan after May 5, 1986. The preceding
sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements
of Code Section 415 for all Limitation Years beginning before
January 1, 1987.
Notwithstanding the foregoing, for any Top Heavy Plan
Year. 100 shall be substituted for 125 unless the extra
minimum allocation is being made pursuant to the Employer's
election in F1 of the Adoption Agreement. However, for any
Plan Year in which this Plan is a Super Top Heavy Plan, 100
shall be substituted for 125 in any event.
(4) Defined Contribution Dollar Limitation means
$30,000, or, if greater, one-fourth of the defined benefit
dollar limitation set forth in Code Section 415(b)(1) as in
effect for the Limitation Year.
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<PAGE>
(5) Defined Contribution Fraction means a fraction,
the numerator of which is the sum of the Annual Additions to
the Participant's account under all the defined contribution
plans (whether or not terminated) maintained by the Employer
for the current and all prior Limitation Years, (including the
Annual Additions attributable to the Participant's
nondeductible voluntary employee contributions to any defined
benefit plans, whether or not terminated, maintained by the
Employer and the annual additions attributable to all welfare
benefit funds, as defined in Code Section 419(e), and
individual medical accounts, as defined in Code Section
415(l)(2), maintained by the Employer), and the denominator of
which is the sum of the maximum aggregate amounts for the
current and all prior Limitation Years of Service with the
Employer (regardless of whether a defined contribution plan
was maintained by the Employer). The maximum aggregate amount
in any Limitation Year is the lesser of 125 percent of the
Defined Contribution Dollar Limitation or 35 percent of the
Participant's Compensation for such year. For Limitation Years
beginning prior to January 1, 1987, the "annual addition"
shall not be recomputed to treat all Employee contributions as
an Annual Addition. If the Employee was a Participant as of
the end of the first day of the first Limitation Year
beginning after December 31, 1986, in one or more defined
contribution plans maintained by the Employer which were in
existence on May 5, 1986, the numerator of this fraction will
be adjusted if the sum of this fraction and the Defined
Benefit Fraction would otherwise exceed 1.0 under the terms of
this Plan. Under the adjustment, an amount equal to the
product of (1) the excess of the sum of the fractions over 1.0
times (2) the denominator of this fraction, will be
permanently subtracted from the numerator of this fraction.
The adjustment is calculated using the fractions as they would
be computed as of the end of the last Limitation Year
beginning before January 1, 1987, and disregarding any changes
in the terms and conditions of the plan made after May 5,
1986, but using the Code Section 415 limitation applicable to
the first Limitation Year beginning on or after January 1,
1987.
Notwithstanding the foregoing, for any Top Heavy Plan
Year, 100 shall be substituted for 125 unless the extra
minimum allocation is being made pursuant to the Employer's
election in F1 of the Adoption Agreement. However, for any
Plan Year in which this Plan is a Super Top Heavy Plan, 100
shall be substituted for 125 in any event.
(6) Employer means the Employer that adopts this Plan
and all Affiliated Employers, except that for purposes of this
Section, Affiliated Employers shall be determined pursuant to
the modification made by Code Section 415(h).
39
<PAGE>
(7) Excess Amount means the excess of the
Participation's Annual Additions for the Limitation Year over
the maximum Permissible Amount.
(8) Highest Average Compensation means the average
Compensation for the three consecutive Years of Service with
the Employer that produces the highest average. A Year of
Service with the Employer is the 12 consecutive month period
defined in Section El of the Adoption Agreement which is used
to determine Compensation under the Plan.
(9) Limitation Year means the Compensation Year (a 12
consecutive month period) as elected by the Employer in the
Adoption Agreement. All qualified plans maintained by the
Employer must use the same Limitation Year. If the Limitation
Year is amended to a different 12 consecutive month period,
the new Limitation Year must begin on a date within the
Limitation Year in which the amendment is made.
(10) Maximum Permissible Amount means the maximum
Annual Addition that may be contributed or allocated to a
Participant's account under the plan for any Limitation Year,
which shall not exceed the lesser of:
(i) the Defined Contribution Dollar
Limitation, or
(ii) 25 percent of the Participant's
Compensation for the Limitation Year.
The Compensation Limitation referred to in (ii) shall
not apply to any contribution for medical benefits
(within the meaning of Code Sections 401(h) or
419A(f)(2)) which is otherwise treated as an annual
addition under Code Sections 415(l)(1) or 419A(d)(2).
If a short Limitation Year is created because of an amendment
changing the Limitation Year to a different 12 consecutive
month period, the Maximum Permissible Amount will not exceed
the Defined Contribution Dollar Contribution multiplied by the
following fraction:
number of months in the short Limitation Year
---------------------------------------------
12
(11) Projected Annual Benefit means the annual
retirement benefit (adjusted to an actuarially equivalent
straight life annuity if such benefit is expressed in a form
other than a straight life annuity or qualified Joint and
Survivor Annuity) to which the Participant would be entitled
under the terms of the plan assuming:
40
<PAGE>
(i) the Participant will continue employment until
Normal Retirement Age (or current age, if later), and
(ii) the Participant's Compensation for the current
Limitation Year and all other relevant factors used to
determine benefits under the Plan will remain constant for
all future Limitation Years.
(g) Regional Prototype Plan means a plan the form of which has
been the subject of a favorable notification letter from the Internal
Revenue Service.
(h) Notwithstanding anything contained in this Section to the
contrary, the limitations, adjustments and other requirements
prescribed in this Section shall at all times comply with the
provisions of Code Section 415 and the Regulations thereunder, the
terms of which are specifically incorporated herein by reference.
4.9 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If as a result of the allocation of Forfeitures, a
reasonable error in estimating a Participant's annual. Compensation,
or other facts and circumstances to which Regulation 1.415-(b)(6) shall
be applicable, the "annual additions' under this Plan would cause the
maximum provided in Section 4.4 to be exceeded, the Administrator shall
treat the excess in accordance with Section 4.4(a)(4).
4.11 TRANSFERS FROM QUALIFIED PLANS
(a) If specified in the Adoption Agreement and with the
consent of the Administrator, amounts may be transferred from other
qualified plans, provided that the trust from which such funds are
transferred permits the transfer to be made and the transfer will not
jeopardize the tax exempt status of the Plan or create adverse tax
consequences for the Employer. The amounts transferred shall be set up
in a separate account herein referred to as a "Participant's Rollover
Account". Such account shall be fully Vested at all times and shall not
be subject to forfeiture for any reason.
(b) Amounts in a Participant's Rollover Account shall be held
by the Trustee pursuant to the provisions of this Plan and may not be
withdrawn by, or distributed to the Participant, in whole or in part,
except as provided in Paragraphs (c) and (d) of this Section.
(c) Amounts attributable to elective contributions (as defined
in Regulation 1.401(k)-l(g)(4)), including amounts treated as elective
contributions, which are transferred from another qualified plan in a
plan-to-plan transfer shall be subject to the distribution limitations
provided for in Regulation 1.401(k)-l(d).
(d) At Normal Retirement Date, or such other date when the
Participant or his Beneficiary shall be entitled to receive benefits,
the fair market value of the Participant's Rollover Account shall be
41
<PAGE>
used to provide additional benefits to the Participant or his
Beneficiary. Any distributions of amounts held in a Participant's
Rollover Account shall be made in a manner which is consistent with and
satisfies the provisions of Section 6.5, including, but not limited to,
all notice and consent requirements of Code Sections 411(a)(11) and 417
and the Regulations thereunder. Furthermore, such amounts shall be
considered as part of a Participant's benefit in determining whether an
involuntary cash-out of benefits without Participant consent may be
made.
(e) The Administrator may direct that employee transfers made
after a valuation date be segregated into a separate account for each
Participant until such time as the allocations pursuant to this Plan
have been made, at which time they may remain segregated or be.
invested as part of the general Trust Fund, to. be determined by the
Administrator.
(f) For purposes of this Section, the term "qualified plan"
shall mean any tax qualified plan under Code Section 401(a). The term
"amounts transferred from other qualified plans" shall mean: (i)
amounts transferred to this Plan directly from another qualified plan;
(ii) lump-sum distributions received by an Employee from another
qualified plan which are eligible for tax free rollover to a qualified
plan and which are transferred by the Employee to this Plan within
sixty (60) days following his receipt thereof; (iii) amounts
transferred to this Plan from a conduit individual retirement account
provided that the conduit individual retirement account has no assets
other than assets which (A) were previously distributed to the Employee
by another qualified plan as a lump-sum distribution (B) were eligible
for tax-free rollover to a qualified plan and (C) were deposited in
such conduit individual retirement account within sixty (60) days of
receipt thereof and other than earnings on said assets; and (iv)
amounts distribute to the Employee from a conduit individual retirement
account meeting the requirements of clause (iii) above, an transferred
by the Employee to this Plan within sixty (60) days of his receipt
hereof from such conduit individual retirement account.
(g) Prior to accepting any transfers to which this Section
applies, the Administrator may require the Employee to establish that
the amounts to be transferred to this Plan meet the requirements of
this Section and may also require the Employee to provide an opinion of
counsel satisfactory to the Employer that the amounts to be transferred
meet the requirements of this Section.
(h) Notwithstanding anything herein to the contrary, a
transfer directly to this Plan from. another qualified plan (or a
transaction having the effect of such a transfer) shall only be
permitted if it will not result in the elimination or reduction of any
"Section 411 (d) (6) protected benefit" as described in Section 8.1.
4.12 VOLUNTARY CONTRIBUTIONS
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(a) If this is an amendment to a Plan that had previously
allowed voluntary Employee contributions, then, except as provided in
4.7(b) below, this Plan will not accept voluntary Employee
contributions for Plan Year beginning after the Plan Year in which this
Plan is adopted by the Employer.
(b) For 401(k) Plans, if elected in the Adoption Agreement,
each Participant may, at the discretion of the Administrator in a
nondiscriminatory manner, elect to voluntarily contribute a portion of
his compensation earned while a Participant under this Plan. Such
contribution shall be paid to the Trustee within a reasonable period of
time but in no event later than 90 days after the receipt of the
contribution.
(c) The balance in each Participant's Voluntary Contribution
Account shall be fully Vested at all times and shall not be subject to
Forfeiture for any reason.
(d) A Participant may elect to withdraw his voluntary
contributions from his Voluntary Contribution Account and the actual
earnings thereon in a manner which is consistent with and satisfies the
provisions of Section 6.5, including, but not limited to, all notice
and consent requirements of Code Sections 411(a)(11) and 417 and the
Regulations thereunder. If the Administrator maintains sub-accounts
with respect to voluntary contributions (and earnings thereon) which
were made on or before a specified date, a Participant shall be
permitted to designate which sub-account shall be the source for his
withdrawal. No Forfeitures shall occur solely as a result of an
Employee's withdrawal of Employee contributions.
In the event such a withdrawal is made, or in the event a
Participant has received a hardship distribution pursuant to Regulation
1. 401 (k) 1 (d) (2) (iii) (B) from, any plan maintained by the
Employer, then such Participant shall be barred from making any
voluntary contributions f or a period of twelve (12) months after
receipt of the withdrawal or distribution.
(e) At Normal Retirement Date, or such other date when the
Participant or his Beneficiary shall be entitled to receive benefits,
the fair market value of the Voluntary Contribution Account shall be
used to provide additional benefits to the Participant or his
Beneficiary.
(f) The Administrator may direct that voluntary contributions
made after a valuation date be segregated into a separate account until
such time as the allocations pursuant to this Plan have been made, at
which time they may remain segregated or be invested as part of the
general Trust Fund, to be determined by the Administrator.
4.14 DIRECTED INVESTMENT ACCOUNT
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(a) If elected in the Adoption Agreement, all Participants may
direct the Trustee as to the investment of all or a portion of any one
or more of their individual account balances. Participants may direct
the Trustee in writing to invest their account in specific assets as
permitted by the Administrator provided such investments are in
accordance with the Department of Labor regulations and are permitted
by the Plan. That portion of the account of any Participant so
directing will thereupon be considered a Directed Investment Account. .
(b) A separate Directed Investment Account shall be
established for each Participant who has directed an investment.
Transfers between the Participant's regular account and their Directed
Investment Account shall be charged and credited as the case may be to
each account. The Directed Investment Account shall not share in Trust
Fund Earnings, but it shall be charged or credited as appropriate with
the net earnings, gains, losses and expenses as well as any
appreciation or depreciation in market value during each Plan Year
attributable to such account.
(c) The Administrator shall establish a procedure, to be
applied in a uniform and nondiscriminatory manner, setting forth the
permissible investment options under this Section, how often changes
between investments may be made, and any other limitations that the
Administrator shall impose on a Participant's right to direct
investments.
4.16 QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS
(a) If this is an amendment to a Plan that previously
permitted deductible voluntary contributions, then each Participant who
made a "Qualified Voluntary Employee Contribution" within the meaning
of Code Section 219 (e) (2) as it existed prior to the enactment of the
Tax Reform Act of 1986, shall have his contribution held in a separate
Qualified Voluntary Employee Contribution Account which shall be fully
Vested at all times. Such contributions, however, shall not be
permitted if they are attributable to taxable years beginning after
December 31, 1986.
(b) A Participant may, upon written request delivered to the
Administrator, make withdrawals from his Qualified Voluntary Employee
Contribution Account. Any distribution shall be made in a manner which
is consistent with and satisfies the Provisions of Section 6.5,
including, but not limited to, all notice and consent requirements of
Code Sections 411 (a) (11) and 417 and the Regulations thereunder.
(c) At Normal Retirement Date, or such other date when the
Participant or his Beneficiary shall be entitled to receive benefits,
the fair market value of the Qualified Voluntary Employee Contribution
Account shall be used to provide additional benefits to the Participant
or his Beneficiary.
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(d) Unless the Administrator directs Qualified Voluntary
Employee Contributions made pursuant to this Section be segregated into
a separate account for each Participant, they shall be invested as part
of the general Trust Fund and share in earnings and losses.
4.18 ACTUAL CONTRIBUTION PERCENT AGE TESTS
In the event this Plan previously provided for voluntary or
mandatory Employee contributions, then, with respect to Plan Years beginning
after December 31, 1986, such contributions must satisfy the provisions of Code
Section 401(m) and the Regulations thereunder.
4.20 INTEGRATE ION IN MORE THAN ONE PLAN
If the Employer and/or an Affiliated Employer maintain qualified
retirement plans integrated with Social Security such that any Participant in
this Plan is covered under more than one of such plans, then such plans will be
considered to be one plan and will be considered to be integrated if the extent
of the integration of all such plans does not exceed 100%. For purposes of tile
preceding sentence, the extent of integration of a plan is the ratio, expressed
as a percentage, which the actual benefits, benefit rate, offset rate, or
employer contribution rate, whatever is applicable, under the Plan bears to the
limitation applicable to such Plan. If. the Employer maintains two or more
standardized paired plans, only one plan may be integrated with Social Security.
ARTICLE V.
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each
Anniversary Date, and at such other date or dates deemed necessary by the
Administrator, herein called "valuation date", to determine the net worth of the
assets comprising the Trust Fund as it exists on the "evaluation date". In
determining such net worth, the Trustee shall value the assets comprising the
Trust Fund at their fair market value as of the "valuation date" and shall
deduct all expenses for which the Trustee has not yet obtained reimbursement
from the Employer or the Trust Fund.
5.3 METHOD OF VALUATION
In determining the fair market value of securities held in the
Trust Fund which are listed on a registered stock exchange, the Administrator
shall direct the Trustee to value the same at the prices they were last traded
on such exchange preceding the close of business on the "valuation date". If
such securities were not traded on the "valuation date", or if the exchange on
which they are traded was not open for business on the "valuation date", then
the securities shall be valued at the prices at which they were last traded
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prior to the "evaluation date". Any unlisted security held in the Trust Fund
shall be valued at its bid price next preceding the close of business on the
"valuation date", which bid price shall be obtained from a registered broker or
an investment banker. In determining the fair market value of assets other than
securities for which trading or bid prices can be obtained, the Trustee may
appraise such assets itself, or in its discretion, employ one or more appraisers
for that purpose and rely on the values established by such appraiser or
appraisers.
ARTICLE VI.
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate his employment with the Employer and
retire for the purposes hereof on or after his Normal Retirement Date or Early
Retirement Date. Upon such Normal Retirement Date or Early Retirement Date, all
amounts credited to such Participant's Combined Account shall become
distributable. However, a Participant may postpone the termination of his
employment with the Employer to a later date, in which event the participation
of such Participant in the Plan, including the right to receive allocations
pursuant to Section 4.3, shall continue until his Late Retirement Date. Upon a
Participant's Retirement Date, or as soon thereafter as is practicable, the
Administrator shall direct the distribution of all amounts credited to such
Participant's Combined Account in accordance with Section 6.5.
6.3 DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before his Retirement Date
or other termination of his employment, all amounts credited to such
Participant's Combined Account shall become fully Vested. The
Administrator shall direct, in accordance with the provisions of
Sections 6.6 and 6-7, the distribution of the deceased Participant's
accounts to the Participant's Beneficiary.
(b) Upon the death of a Former Participant, the Administrator
shall direct, in accordance with the provisions of Sections 6.6 and
6.7, the distribution of an remaining amounts credited to the accounts
of such deceased Former Participant to such Former Participant's
Beneficiary.
(c) The Administrator may require such proper proof of death
and such evidence of the right of any person to receive payment of the
value of the account of a deceased Participant or Former Participant as
the Administrator may deem desirable. The Administrator's determination
of death and of the right of any person to receive payment shall be
conclusive.
(d) Unless otherwise elected in the manner prescribed in
Section 6.6, the Beneficiary of the Pre-Retirement Survivor Annuity
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shall be the Participant's spouse. Except, however, the Participant may
designate a Beneficiary other than his spouse for the Pre-Retirement
Survivor Annuity if:
(1) the Participant and his spouse have validly waived the
Pre-Retirement Survivor Annuity in the manner prescribed in
Section 6.6, and the spouse has waive his or her right to be
the Participant's Beneficiary, or
(2) the Participant is legally separated or has bee abandoned
(within the meaning of local law) and the Participant has a
court order to such effect (and there is no "qualified
domestic relations order" as define in Code Section 414(p)
which provides otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a Beneficiary shall
be made on a form satisfactory to the Administrator. A Participant may
at any time revoke his designation of a Beneficiary or change his
Beneficiary by filing written notice of such revocation or change with
the Administrator. However, the Participant's spouse must again consent
in writing to any change in Beneficiary unless the original consent
acknowledged that the spouse had the right to limit consent only to a
Specific Beneficiary and that the spouse voluntarily elected to
relinquish such right. The Participant may, at any time, designate a
Beneficiary for death benefits payable under the Plan that are in
excess of the Pre-Retirement Survivor Annuity. in the event no valid
designation of Beneficiary exists at the time of the Participant's
death, the death benefit shall be payable to his estate.
(e) If the Plan provides an insured death benefit and a
Participant dies before any insurance coverage to which he is entitled
under the Plan is effected, his death benefit from such insurance
coverage shall be limited to the standard rated premium which was or
should have been used for such purpose.
(f) In the event of any conflict between the terms of this
Plan and the terms of any Contract issued hereunder, the Plan
provisions shall control.
6.5 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
In the event of a Participant's Total and Permanent Disability
prior to his Retirement Date or other termination of his employment, all amounts
credited to such Participant's Combined Account shall become fully Vested. In
the event of a participant's Total and Permanent Disability, the Administrator,
in accordance with the provisions of Sections 6.5 and 6.7, shall direct the
distribution to such Participant of all amounts credited to such Participant's
Combined Account as though he had retired.
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6.7 DETERMINATION OF BENEFITS UPON TERMINATION
(a) On or before the Anniversary Date, or other valuation
date, coinciding with or subsequent to the termination of a
Participant's employment for any reason other than retirement, death,
or Total and Permanent Disability, the Administrator may direct that
the amount of the Vested portion of such Terminated Participant's
Combine Account be segregated and invested separately. In the even the
Vested portion of a Participant's Combined Account is not segregated,
the amount shall remain in a separate account for the Terminated
Participant and share in allocations pursuant to Section 4.3 until such
time as distribution is made to the Terminated Participant. The amount
of the portion of the Participant's Combined Account which is not
Vested may be credited to a separate account which will always share in
gains and losses of the Trust Fund) and at such time as the amount
becomes a Forfeiture shall be treated in accordance with the provisions
of the Plan regarding Forfeitures.
Regardless of whether distributions in kind are permitted, in
the event that the amount of the Vested Portion of the Terminated
Participant's Combined Account equals or exceeds the fair market value
of any insurance contracts, the Trustee, when so directed by the
Administrator and agreed to by the Terminated Participant, shall
assign, transfer, and set over to such Terminated Participant all
Contracts on his life in such form or with such endorsements, so that
the settlement options and forms of payment are consistent with the
provisions of Section 6.5. In the event that the Terminated
Participant's Vested portion does not at least equal the fair market
value of the Contracts, if any, the Terminated Participant may pay over
to the Trustee the sum needed to make the distribution equal to the
value of the Contracts being assigned or transferred, or the Trustee,
pursuant to the Participant's election, may borrow the -cash value of
the Contracts from the Insurer so that the value of the Contracts is
equal to the Vested portion of the Terminated Participant's Combined
Account and then assign the Contracts to the Terminated Participant.
Distribution of the funds due to a Terminated Participant
shall be made on the occurrence of an event which would result in the
distribution had the Terminated Participant remained in the employ of
the Employer (upon the Participant's death, Total and Permanent
Disability, Early or Normal Retirement). However, at the election of
the Participant, the Administrator shall direct that the entire Vested
portion of the Terminated Participant's Combined Account to be payable
to such Terminated Participant provided the conditions, if any, set
forth in the Adoption Agreement have been satisfied. Any distribution
under- this paragraph shall be made in a manner which is consistent
with and satisfies the provisions of Section 6.5, including but not
limited to, all notice and consent requirements of Code Sections
411(a).(11) and 417 and the Regulations thereunder.
Notwithstanding the above, if the value of Terminated
Participant's Vested benefit derived from Employer and Employee
contributions does not exceed, and at the time of any prior
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distribution, has never exceeded $3,500, the Administrator shall direct
that the entire Vested benefit be paid to such Participant in a single
lump-sum without regard to the consent of the Participant or the
Participant's spouse. A Participant's Vested benefit shall not include
Qualified Voluntary Employee Contributions within the meaning of Code
Section 72(o)(5)(B) for Plan Years beginning prior to January 1, 1989.
(b) The Vested portion of any Participant's Account shall be a
percentage of such Participant's Account determined on the basis of the
Participant's number of Years of Service according to the vesting
schedule specified in the Adoption Agreement.
(c) For any Top Heavy Plan Year, one of the minimum top heavy
vesting schedules as elected by the Employer in the Adoption Agreement
will automatically apply to the Plan. The minimum top heavy vesting
schedule applies to all benefits within the meaning of Code Section 411
(a) (7) except those attributable to Employee contributions, including
benefits accrued before the effective date of Code Section 416 and
benefits accrued before the Plan became top heavy. Further, no decrease
in a Participant's Vested percentage may occur in the event the Plan's
status as top heavy changes for any Plan Year. However, this Section
does not apply to the account balances of any Employee who does not
have an Hour of Service after the Plan has initially become top heavy
and the vested percentage of such Employee's Participant's Account
shall be determined without regard to this Section 6.4(c).
If in any subsequent Plan Year, the Plan ceases to be a Top
Heavy Plan, the Administrator shall continue to use the vesting
schedule in effect while the Plan was a Top Heavy Plan for each
Employee who had an Hour of Service during a Plan Year when the Plan
was Top Heavy.
(d) Notwithstanding the vesting schedule above, upon the
complete discontinuance of the Employer's contributions to the Plan or
upon any full or partial termination of the Plan, all amounts credited
to the account of any affected Participant shall become 100% Vested and
shall not thereafter be subject to Forfeiture.
(e) I this is an amended or restated Plan, then
notwithstanding the vesting schedule specified in the Adoption
Agreement, the Vested percentage of a Participant's Account shall not
be less than the Vested percentage attained as of the later of the
effective date or adoption date of this amendment and restatement. The
computation of a Participant's nonforfeitable percentage of his
interest in the Plan shall not be reduced as the result of any direct
or indirect amendment to this Article, or due to changes in the Plan's
status as a Top Heavy Plan.
(f) If the Plan's vesting schedule is amended, or if the Plan
is amended in any way that directly or indirectly affects the
computation of the Participant's nonforfeitable' percentage or if the
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Plan is deemed amended by an automatic change to a top heavy vesting
schedule, then each Participant with at least 3 Years of Service as of
the expiration date of the election period may elect to have hi
nonforfeitable percentage computed under the Plan without regard to
such amendment or change. Notwithstanding the foregoing, for Plan Years
beginning before January l, 1989, or with respect to Employees who fail
to complete at least one (1) Hour of Service in a Plan Year beginning
after December 31, 1988, five (5) shall be substituted for three (3) in
the preceding sentence If a Participant fail to make such election,
then such Participant shall be subject to the new vesting schedule. The
Participant's election period shall commence on the adoption date of
the amendment and shall end 60 days after the latest of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written notice of the
amendment from the Employer or Administrator.
(g) (1) If any Former Participant shall be reemployed by the
Employer before a 1-Year Break in Service occurs, he shall
continue to participate in the Plan in the same manner as if
such termination had not occurred.
(2) If any Former Participant shall be reemployed by the
Employer before five (5) consecutive I-Year Breaks in Service,
and such Former Participant had received a distribution of his
entire Vested interest prior to his reemployment, his
forfeited account shall be reinstated only if he repays the
full amount distributed to him before the earlier of five (5)
years after the first date on which the Participant is
subsequently reemployed by the Employer or the close of the
first period of 5 consecutive 1-Year Breaks in Service
commencing after the distribution. If a distribution occurs
for any reason other than a separation from service, the time
for repayment may not end earlier than five (5) years after
the date of separation. In the event the Former Participant
does repay the full amount distributed to him, the
undistributed portion of the Participant's Account must be
restored in full, unadjusted by any gains or losses occurring
subsequent to the Anniversary Date or other valuation date
preceding his termination. If an employee receives a
distribution pursuant to this section and the employee resumes
employment' covered under this plan, the employee's employer
derived account balance will be restored to the amount on the
date of distribution if the employee repays to the plan the
full amount of the distribution attributable to employer
contributions before the earlier of 5 years after the first
date on which the Participant is subsequently re-employed by
the employer, or the date the Participant incurs 5 consecutive
1-year breaks in service following the date of the
distribution. If a non-Vested Former Participant was deemed to
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have received a distribution and such Former Participant is
reemployed by the Employer before five (5) consecutive 1-Year
Breaks in Service, then such Participant will be deemed to
have repaid the deemed distribution as of the date of
reemployment.
(3) If any Former Participant is reemployed after a 1-Year
Break in Service has occurred, Years of Service shall include
Years of Service prior to his 1-Year Break in Service subject
to the following rules:
(i) Any Former Participant who under the Plan does
not have a nonforfeitable right to any interest in
the Plan resulting from Employer contributions shall
lose credits if his consecutive 1-Year Breaks in
Service equal or exceed the greater of (A) five (5)
or (B) the aggregate number of his pre-break Years of
Service;
(ii) After five (5) consecutive 1-Year Breaks in
Service, a Former Participant's Vested Account
balance attributable to pre-break service shall not
be increased as a result of post-break service;
(iii) A Former Participant who is reemployed and who
has not had his Years of Service before a I-Year
Break in Service disregarded pursuant to (i) above,
shall participate in the Plan as of his date of
reemployment;
(iv) If a Former Participant completes a Year of
Service (a 1-Year Break in Service previously
occurred, but employment had not terminated), he
shall participate in the Plan retroactively from the
first day of the Plan Year during which he completes
one (1) Year of Service.
(h) In determining Years of Service for purposes of vesting
under the Plan, Years of Service shall be excluded as specified in the
Adoption Agreement.
6.9 DISTRIBUTION OF BENEFITS
(a) (1) Unless otherwise elected as provided below, a
Participant who is married on the "annuity starting date" and who does
not die before the "annuity starting date" shall receive the value of
all of his benefits in the form of a Joint and Survivor Annuity. The
Joint and Survivor Annuity is an annuity that commences immediately and
shall equal in value to a single life annuity. Such joint and survivor
benefits following the Participant's death shall continue to the spouse
during the spouse's lifetime at a rate equal to 50% of the rate at
which such benefits were payable to the Participant. This Joint and
Survivor Annuity shall be considered the designated qualified Joint and
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Survivor Annuity and automatic form of payment for the purposes of this
Plan. However, the Participant may elect to receive a smaller annuity
benefit with continuation of payments to the spouse at a rate of
seventy-five percent (75%) or one hundred percent (100%) of the rate
payable to a Participant during his lifetime which alternative Joint
and Survivor Annuity shall be equal in value to the automatic Joint and
50% Survivor Annuity. An unmarried Participant shall receive the value
of his benefit in the form of a life annuity Such unmarried
Participant, however, may elect in writing to waive the life annuity.
The election must comply with the provisions of this Section as if it
were an election to waive the Joint and Survivor Annuity by a married
Participant, but without the spousal consent requirement. The
Participant may elect to have any annuity provided for in this Section
distributed upon the attainment of the "earliest retirement age" under
the Plan. The "earliest retirement age" is the earliest date on which,
under the Plan, the Participant could elect to receive retirement
benefits.
(2) Any election to waive the Joint and Survivor Annuity must
be made by the Participant in writing during the election
period and be consented to by the participant's spouse. If the
spouse is legally incompetent to give consent, the spouse's
legal guardian, even if such guardian is the Participant, may
give consent. Such election shall designate a Beneficiary (or
a form of benefits) that may not be changed without spousal
consent (unless the consent of the spouse expressly permits
designations by the Participant without the requirement of
further consent by the spouse). Such spouse's consent shall be
irrevocable and must acknowledge the effect of such election
and be witnessed by a Plan representative or a notary public.
Such consent shall not be required if it is established to the
satisfaction of the Administrator that the required consent
cannot be obtained because. If there is no spouse, the spouse
cannot be located, or other circumstances that may be
prescribed by Regulations. The election made by the
Participant and consented to by his spouse may be revoked by
the Participant in writing without the consent of the spouse
at any time during the election period. The number of
revocations shall not be limited. Any new election ,must
comply with the requirements of this paragraph. A former
spouse's waiver shall not be binding on a new spouse.
(3) The election period to waive the Joint and Survivor
Annuity shall be the 90 day period ending on the "annuity
starting date."
(4) For purposes of this Section and Section 6.6, the "annuity
starting date" means the first day of the first period for
which an amount is paid as an annuity, in the case of a
benefit not payable in the form of an annuity, the first day
on which all events have occurred which entitles the
Participant to such benefit.
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(5) With regard to the election, the Administrator shall
provide to the Participant no less than 30 days and no more
than 90 days before the "annuity starting date" a written
explanation of:
(i) the terms and conditions of 'the Joint and
Survivor Annuity, and
(ii) the Participant's right to make and the effect
of an election to waive the Joint and Survivor
Annuity, and
(iii) the right of the Participant's spouse to
consent to any election to waive the Joint and
Survivor Annuity, and
(iv) the right of the Participant to revoke such
election, and the effect of such revocation.
(b) In the event a married Participant duly elects pursuant to
paragraph (a) (2) above not to receive his benefit in the form of a
Joint and Survivor Annuity, or if such Participant is not married, in
the form of a life annuity, the Administrator, pursuant to the election
of the Participant, shall direct the distribution to a Participant or
his Beneficiary any amount to which he is entitled under the Plan in
one or more of the following methods which are permitted pursuant to
the Adoption Agreement:
(1) One lump-sum payment in cash or in property;
(2) Payments over a period certain in monthly, quarterly,
semiannual, or annual cash installments. In order to provide
such installment payments, the Administrator may direct that
the Participant's interest in the Plan be segregated and
invested separately, and that the funds in the segregated
account be used for the payment of the installments. The
period over which such payment is to be made shall, not extend
beyond the Participant's life expectancy (or the life
expectancy of the Participant and his designated Beneficiary);
(3) Purchase of or providing an annuity. However, such annuity
may not be in any form that will provide for payments over a
period extending beyond either the life of the Participant (or
the lives of the Participant and his designated Beneficiary)
or the life expectancy of the Participant (or the life
expectancy of the Participant and his designated Beneficiary).
(c) `The present value of a Participant's Joint and Survivor
Annuity derived from Employer and Employee contributions may not be
paid without his written consent if the value exceeds, or has ever
exceeded at the time of any prior distribution, $3,500. Further, the
spouse of a Participant must consent in writing to any immediate
distribution. If the value of the Participant's benefit derived from
Employer and Employee contributions does not exceed $3,500 and has
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never exceeded $3,500 at the time of any prior distribution, the
Administrator may immediately distribute such benefit without such
Participant's consent. No distribution may be made under the preceding
sentence after the "annuity starting date" unless the Participant and
his spouse consent in writing to such distribution. Any written consent
required under this paragraph must be obtained not more than 90 days
before commencement of the distribution and shall be made in a manner
consistent with Section 6.5(a)(2).
(d) Any distribution to a Participant who has a benefit which
exceeds, or has ever exceeded at the time of any prior distribution,
$3,500 shall require such Participant's consent if such distribution
commences prior to the later of his Normal Retirement Age or age 62.
With regard to this required consent:
(1) No consent shall be valid unless the Participant
has received a general description of the material
features and an explanation of the relative values of
the optional forms of benefit available under the
Plan that would satisfy the notice requirements of
Code Section 417.
(2) The Participant must be informed of his right to
defer receipt of the distribution. If a Participant
fails to consent, it shall be deemed an election to
defer the commencement of payment of any benefit.
However, any election to defer the receipt of
benefits shall not apply with respect to
distributions which are required under Section
6.5(e).
(3) Notice of the rights specified under this
paragraph shall be provided no less than 30 days and
no more than 90 days before the "annuity starting
date".
(4) Written consent of the Participant to the
distribution must be made before the Participant
receives the notice and must not be made more than 90
days before the "annuity starting date".
(5) No consent shall be valid if a significant
detriment is imposed under the Plan on any
Participant who does not consent to the distribution.
(e) Notwithstanding any provision in the Plan to the
contrary, the distribution of a Participant's benefits, made
on or after January 1, 1-1985, whether under the Plan or
through the purchase of an annuity Contract, shall be made in
accordance with the following requirements and shall otherwise
comply with Code Section 401(a) (9) and the Regulations
thereunder "including Regulation Section 1. 401 (a) (9) 2),
the provisions of which are incorporated herein by reference:
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(1) A Participant's benefits shall be distributed to
him not later than April lst of the calendar year
following the later of (i) the calendar year in which
the participant attains age 70 1/2 or (ii) the
calendar year in which the Participant retires,
provided, however, that this clause (ii) shall not
apply in the case of a Participant who is a "five (5)
percent owner" at any time during the five (5) Plan
Year period ending in the calendar year in which he
attains age 70 1/2 or, in the case of a Participant
who becomes a "five (5) percent owner" during any
subsequent Plan Year, clause (ii) shall no longer
apply and the required beginning date shall be the
April 1st of the calendar year following the calendar
year in which such subsequent Plan Year ends.
Alternatively, distributions to a Participant must
begin no later than the applicable April 1st as
determined under the preceding sentence and must be
made over the life of the Participant (or the lives
of the Participant and the Participant's designated
Beneficiary) or, if benefits are paid in the form of
a Joint and Survivor Annuity, the life expectancy of
the Participant (or the life expectancies of the
Participant and his designated Beneficiary) in
accordance with Regulations. or Plan Years beginning
after December 31, 1988, clause (ii) above shall not
apply to any Participant unless the Participant had
attained age 70 1/2 before January 1, 1988 and was
not a "five (5) percent owner" at any time during the
Plan Year ending with or within the calendar year in
which the Participant attained age no' 1/2 or any
subsequent Plan Year.
(2) Distributions; to a Participant and his
Beneficiaries shall only be made in accordance with
the incidental death benefit requirements of Code
Section 401(a)(9)(G) and the Regulations thereunder.
Additionally, for calendar years beginning before
1989, distributions may also be made under an
alternative method which provides that the then
present value of the payments to be made over the
period of the Participant's life expectancy exceeds
fifty percent (50%) of the then present value of the
total payments to be made to the Participant and his
Beneficiaries.
(f) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse (other than in the case of a
life annuity) shall be redetermined annually in accordance with
Regulations if permitted pursuant to the Adoption Agreement. If the
Participant or the Participant's spouse may elect whether
recalculations will be made, then the election, once made, shall be
irrevocable. If no election is made by the time distributions must
commence, then the life expectancy of the Participant and the
Participant's spouse shall not be subject to recalculation. Life
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expectancy and joint and last survivor expectancy shall be computed
using the return multiples in Tables V and VI of Regulation 1.72-9.
(g) All annuity Contracts under this Plan shall be
non-transferable when distributed. Furthermore, the terms of any
annuity Contract purchased and distributed to a Participant or spouse
shall comply with all of the requirements of this Plan.
(h) Subject to the spouse's right of consent afforded under
the Plan, the restrictions imposed by this Section shall not apply if a
Participant has, prior to January 1, 1984, made a written designation
to have his retirement benefit paid in an alternative method acceptable
under Code Section 401(a) as in effect prior to the enactment of the
Tax Equity and Fiscal Responsibility Act of 1982.
(i) If a distribution is made at a time when a Participant who
has not terminated employment is not fully vested in his Participant's
Account and the Participant may increase the Vested percentage in such
account:
(1) A separate account shall be established for the
Participant's interest in the Plan as of the time of the
distribution, and
(2) At any relevant time the Participant's Vested portion of
the separate account shall be equal to an amount ("X")
determined by the formula:
X equals p(AB plus (RxD)) - (R x D)
For purposes or applying the formula: P is the Vested
percentage at the relevant time, AB is the account balance at
the relevant time, D is the amount of distribution, and R is
the ratio of the account balance at the relevant time to the
account balance after distribution.
6.11 DISTRIBUTION OF BENEFITS UPON DEATH
(a) Unless otherwise elected as provided below, a Vested
Participant who dies before the annuity starting date and who has a
surviving spouse shall have the Pre-Retirement Survivor Annuity paid to
his surviving spouse. The Participant's spouse may direct that payment
of the Pre-Retirement Survivor Annuity commence within a reasonable
period after the Participant's death. If the spouse does not so direct,
payment of such benefit will commence at the time the Participant would
have attained the later of his Normal Retirement Age or age 62.
However, the spouse may elect a 60 later commencement date. Any
distribution to the Participant's spouse shall be subject to the rules
specified in Section 6.6(h).
(b) Any election to waive the Pre-Retirement Survivor Annuity
before the Participant's death must be made by the Participant in
writing during the election period and shall require the spouse's
irrevocable consent in the same manner provided for in Section
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6.5(a)(2). Further, the spouse's consent must acknowledge the specific
nonspouse Beneficiary. Notwithstanding the foregoing, the nonspouse
Beneficiary need not be acknowledged, provided the consent of the
spouse acknowledges that the spouse has the right to limit consent only
to a specific Beneficiary and that the spouse voluntarily elects to
relinquish such right.
(c) The election period to waive the Pre-Retirement Survivor
Annuity shall begin on the- first day of the Plan Year in which the
Participant attains age 35 and end on the date of the Participant's
death. An earlier waiver (with spousal consent) may be made provided a
written explanation of the Pre-Retirement Survivor Annuity is given to
the Participant and such waiver becomes invalid at the beginning of the
Plan Year in which the Participant turns age 35. In the event a Vested
Participant separates from service prior to the beginning of the
election period, the election period shall begin on the date of such
separation from service.
(d) With regard to the election, the Administrator shall
provide each Participant within the applicable period, with respect to
such Participant (and consistent with Regulations) Upon a written
explanation of the Pre-Retirement Survivor Annuity containing
comparable information to that required pursuant to Section 6.5 (a)
(5). For the purposes of this paragraph, the term "applicable period"
means, with respect to a Participant, whichever of the following
periods ends last:
(1) The period beginning with the first day of the Plan Year
in which the Participant attains age 32 and ending with the
close of the Plan Year preceding the Plan Year in which the
Participant attains age 35;
(2) A reasonable period after the individual becomes a
Participant. For this purpose, in the case of an individual
who becomes a Participant after age 32, the explanation must
be provided by the end of the three-year period beginning with
the first day of the first Plan Year for which the individual
is a Participant;
(3) A reasonable period ending after, the Plan no longer fully
subsidizes the cost of the Pre-Retirement Survivor Annuity
with respect to the Participant;
(4) A reasonable period ending after Code Section 401(a)
(11) applies to the Participant; or
(5) A reasonable period after separation from service in the
case of a Participant who separates before attaining age 35.
For this purpose, the Administrator must provide the
explanation beginning one year before the separation from
service and ending one year after separation.
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(e) The Pre-Retirement Survivor Annuity provided for in this
Section shall apply only to Participants who are credited with an Hour
of Service on or after August 23, 1984. Former Participants who are not
credited with an Hour of Service on or after August 23, 1984 shall be
provided with rights to the Pre-Retirement Survivor Annuity in
accordance with Section 303(e)(2i of the Retirement Equity Act of 1984.
(f) If the value of the Pre-Retirement Survivor Annuity
derived from Employer and Employee contributions does not exceed $3,500
and has never exceeded $3,500 at the time of any prior distribution,
the Administrator shall direct the immediate distribution of such
amount to the Participant's spouse. No distribution may be made under
the preceding sentence after the annuity starting date unless the
spouse consents in writing. If the value exceeds, or has ever exceeded
at the time of any prior distribution, $3,500, an immediate
distribution of the entire amount may be made to the surviving spouse,
provided such surviving spouse consents in writing to such
distribution. Any written consent required under this paragraph must be
obtained not more than 90 days before commencement of the distribution
and shall be made in a manner consistent with Section 6-5(a)(2).
(g)(1) In the event there is an election to waive the
Pre-Retirement Survivor Annuity, and for death benefits in
excess of' the Pre-Retirement Survivor Annuity, such death
benefits shall be paid to the Participant's Beneficiary by
either of the following methods, as elected by the Participant
(or if no election has been made prior to the Participant's
death, by his Beneficiary) subject to the rules specified in
Section 6.6(h) and the selections made in the Adoption
Agreement:
(i) One lump-sum payment in cash or in property;
(ii) Payment in monthly, quarterly, semi-annual, or
annual cash installments over a period to be
determined by the Participant or his Beneficiary.
After periodic installments commence, the Beneficiary
shall have the right to reduce the period over which
such periodic installments shall be made, and the
cash amount of such periodic installments shall be
adjusted accordingly.
(iii) If death benefits in excess of the
Pre-Retirement Survivor Annuity are to be paid to the
surviving spouse, such benefits may be paid pursuant
to (i) or (ii) above, or used to purchase an annuity
so as to increase the payments made pursuant to the
Pre-Retirement Survivor Annuity;
(2) In the event the death benefit payable pursuant to Section
6.2 is payable in installments, then, upon the death of the
Participant, the Administrator may direct that the death
benefit be segregated and invested separately, and that the
funds accumulated in the segregated account be used for the
payment of the installments.
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(h) Notwithstanding any provision in the Plan to the contrary,
distributions upon the death of a Participant made on or after January
1, 1985, shall be made in accordance with the following requirements
and shall otherwise comply with Code Section 401(a)(9) and the
Regulations thereunder.
(1) If it is determined, pursuant to Regulations, that the
distribution of a Participant's interest has begun and the
Participant dies before his entire interest has been
distributed to him, the remaining portion of such interest
shall be distributed at least as rapidly as under the method
of distribution selected pursuant to Section 6.5 as of his
date of death.
(2) If a -Participant dies before he has begun to receive any
distributions of his interest in the Plan or before
distributions are deemed to have begun pursuant to
Regulations, then his death benefit shall be distributed to
his Beneficiaries in accordance with the following -rules
subject to the selections made in the Adoption Agreement and
Subsections 6.6(h)(3) and 6.6(1) below:
(i) The entire death benefit shall be distributed to
the Participant's Beneficiaries by December 31st of
the calendar year in which the fifth anniversary of
the Participant's death occurs;
(ii) The 5-year distribution requirement of (i) above
shall not apply to any portion of the deceased
Participant's interest which is payable to or for the
benefit of a designated Beneficiary. In such event,
such portion shall be distributed over the life of
such designated Beneficiary (or over a period not
extending beyond the life expectancy of such
designated Beneficiary) provided such distribution
begins not later than December 31st of the calendar
year immediately following the calendar year in which
the Participant died;
(iii) However, in the event the Participant's spouse
(determined as of the date of the Participant's
death) is his designated Beneficiary, the provisions
of (ii) above shall apply except that the requirement
that distributions commence within one year of the
Participant's death shall not apply. In lieu thereof,
distributions must commence on or before the later
of: (1) December 31st of the calendar year
immediately following the calendar year in which the
Participant died; or (2) December 31st of the
calendar year in which the Participant would have
attained age 70 1/2. If the surviving spouse dies
before distributions to such spouse begin, then the
5-year distribution requirement of this Section shall
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(3) Notwithstanding subparagraph (2) above, or any selections
made in the Adoption Agreement, if a Participant's death
benefits are to be paid in the form of a Pre-Retirement
Survivor Annuity, then distributions to the Participant's
surviving spouse must commence on or before the later of: (1)
December 31st of the calendar year immediately following the
calendar year in which the Participant died; or (2) December
31st of the calendar year in which the Participant would have
attained age 70 1/2.
(i) For purposes of Section 6.6(h)(2), the election by a
designated Beneficiary to be excepted from the 5-year distribution
requirement (if permitted in the Adoption Agreement) must be made no
later than December 31st of the calendar year following the calendar
year of the Participant's death. Except, however, with respect to a
designated Beneficiary who is the Participant's surviving spouse, the
election must be made by the earlier of: (1) December 31st of the
calendar year immediately following the calendar year in which the
Participant died or, if later, the calendar year in which the
Participant would have attained age 70 1/2; or (2) December 31st of the
calendar year which contains the fifth anniversary of the date of the
Participant's death. An election by a designated Beneficiary must be in
writing and shall be irrevocable as of the last day of the election
period stated herein. In the absence of an election by the Participant
or a designated beneficiary, the 5-year distribution requirement shall
apply.
(j) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse (other than in the case of a
life annuity) shall or shall not be redetermined annually as provided
in the Adoption Agreement and in accordance with Regulations. If the
Participant or the Participant's spouse may elect, pursuant to the
Adoption Agreement, to have life expectancies recalculated, then the
election, once made shall be irrevocable. If no election is made by the
time distributions must commence, then the life expectancy of the
Participant and the Participant's spouse shall not be subject to
recalculation. Life expectancy and joint and last survivor expectancy
shall be computed using the return multiples in Tables V and VI of
Regulation Section 1.72-9.
(k) In the event that less than 100% of a Participant's
interest in the Plan is distributed to such Participant's spouse, the
portion of the distribution attributable to the Participant's Voluntary
Contribution Account shall be in the same proportion that the
Participant's Voluntary Contribution Account bears to the Participant's
total interest in the Plan.
(1) Subject to the spouse's right of consent afforded under
the Plan, the restrictions imposed by this Section shall not apply if a
Participant has, prior to January 1, 1984, made a written designation
to have his death benefits paid in an alternative method acceptable
under Code Section 401(a) as in effect prior to the enactment of the
Tax Equity and Fiscal Responsibility Act of 1982.
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6.12 TIME OF SEGREGATION OR DISTRIBUTION
Except as limited by Sections 6.5 and 6.6, whenever a
distribution is to be made, or a series of payments are to commence, on or as of
an Anniversary Date, the distribution or series of payments may be made or begun
on such date or as soon thereafter as is practicable, but in no event later than
180 days after the Anniversary Date. However, unless a Former Participant elects
in writing to defer the receipt of benefits (such election may not result in a
death benefit that is more than incidental), the payment of benefits shall begin
not later than the 60th day after the close of the Plan Year in which the latest
of the following events occurs: (a) the date on which the Participant attains
the earlier of age `05 or the Normal Retirement Age specified herein; (b) the
10th anniversary of the year in which the Participant commenced participation in
the Plan; or (c) the date the Participant terminates his service with the
Employer.
Notwithstanding the foregoing, the failure of a Participant
and, if applicable, the Participant's spouse, to consent to a distribution
pursuant to Section 6.5(d), shall be deemed to be an election to defer the
commencement of payment of any benefit sufficient to satisfy this Section.
6.14 DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor, then the
Administrator may direct that such distribution be paid to the legal guardian,
or if none, to a parent of such Beneficiary or a responsible adult with whom the
Beneficiary maintains his residence, or to the custodian for such Beneficiary
under the Uniform Gift to Minors Act or Gift to Minors Act, if such is permitted
by the laws of the state in which said Beneficiary resides. Such a payment to
the legal guardian, custodian or parent of a minor Beneficiary shall fully
discharge the Trustee, Employer, and Plan from further liability on account
thereof.
6.16 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution
payable to a Participant or his Beneficiary hereunder shall, at the later of the
Participant's attainment of age 62 or his Normal Retirement Age, remain unpaid
solely by reason of the inability of the Administrator, after sending a
registered letter, return receipt requested, to the last known address, and
after further diligent effort, to ascertain the whereabouts of such Participant
or his Beneficiary, the amount so distributable shall be treated as a Forfeiture
pursuant to the Plan. in the event a Participant or Beneficiary is located
subsequent to his benefit being reallocated, such benefit shall be restored,
first from Forfeitures, if any, and then from an additional Employer
contribution if necessary.
6.18 PRE-RETIREMENT DISTRIBUTION
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For Profit Sharing Plans and 401(k) Profit Sharing Plans, if
elected in the Adoption Agreement, at such time as a Participant shall have
attained the age specified in the Adoption Agreement, the Administrator, at the
election of the Participant, shall direct the distribution of up to the entire
amount then credited to the accounts maintained on behalf of the Participant.
However, no such distribution from the Participant's Account shall occur prior
to 100% Vesting. In the event that the Administrator makes such a distribution,
the Participant shall continue to be eligible to participate in the Plan on the
same basis as any other Employee. Any distribution made pursuant to this Section
shall be made in a manner consistent with Section 6.5, including, but not
limited to, all notice and consent requirements of Code Sections 411(a) (11) and
417 and the Regulations thereunder.
6.20 ADVANCE DISTRIBUTION FOR HARDSHIP
(a). For Profit Sharing Plans, if elected in the Adoption
Agreement, the Administrator, at the election of the Participant, shall
direct the distribution to any Participant in any one Plan Year up to
the lesser of 100% of his Participant's Combined Account valued as of
the last Anniversary Date or other valuation date or the amount.
necessary to satisfy the immediate and heavy financial need of the
Participant. Any distribution made pursuant to this Section shall be
deemed to be made as of the first day of the Plan Year or, if later,
the valuation date immediately preceding the date of distribution, and
the account from which the distribution is made shall be reduced
accordingly. Withdrawal under this Section shall be authorized only if
the distribution is on account of:
(1) Medical expenses described in Code Section -213 (d)
incurred by the Participant, his spouse, or any of his
dependents (as defined in Code Section 152);
(2) The purchase (excluding mortgage payments) of a principal
residence for the Participant;
(3) Funeral expenses for a member of the Participant's
family;
(4) Payment of tuition for the next semester or quarter of
post-secondary education for the Participant, his spouse,
children, or dependents; or
(5) The need to prevent the eviction of the Participant from
his principal residence or foreclosure on the mortgage of the
Participant's principal residence.
(b) No such distribution shall be made from the Participant's
Account until such Account has become fully Vested.
(c) Any distribution made pursuant to this Section shall be
made in a manner which is consistent with and satisfies the Provisions
of Section 6.5, including, but not limited to, all notice and consent
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requirements of Code Sections 411 (a) (111, and 417 and the Regulations
thereunder.
6.22 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS
All rights and benefits, including elections, provided to a
Participant in this Plan shall be subject to the rights afforded to any
"alternate payee" under a "qualified domestic relations order." Furthermore, a
distribution to an "alternate payee" shall be permitted if such distribution `is
authorized by a "qualified domestic relations order," even if the affected
Participant has not reached the `earliest retirement age" under the Plan. For
the purposes of this Section, "alternate payee, "qualified domestic relations
order" and "earliest retirement age" shall have the meaning set forth under Code
Section 414(p).
6.24 SPECIAL RULE FOR NON-ANNUITY PLANS
If elected in the Adoption Agreement, the following shall
apply to a Participant in a Profit Sharing Plan or 401(k) Profit Sharing Plan
and to any distribution, made on or after first day of the first plan year
beginning after December 31, 1988, from or under a separate account attributable
solely to accumulated deductible employee contributions, as defined in Code
Section 72 (o) (5) (B), and maintained on behalf of a participant in a money
purchase pension plan, (including a target benefit plan):
(a) The Participant shall be prohibited from electing
benefits in the form of a life annuity;
(b) Upon the death of the Participant, the Participant's
entire Vested account balances will be paid to his or her surviving
spouse, or, if there is no surviving spouse or the surviving spouse has
already consented to waive his or her benefit, in accordance with
Section 6.6, to his designated Beneficiary; and
(c) Except to the extent otherwise provided in this Section
and Section 6.5(h), the other provisions of Sections 6.2, 6.5 and 6.6
regarding spousal consent and the forms of distributions shall be
inoperative with respect to this Plan.
This Section shall not apply to any Participant if it is
determined that this Plan is a direct or indirect transferee of a
defined benefit or money purchase plan, or a target benefit plan, stock
bonus or profit sharing plan which would otherwise provide for a life
annuity form of payment. to the Participant.
ARTICLE VII.
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE
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The Trustee shall have the following categories of
responsibilities:
(a) Consistent with the "funding policy and method" determined
by the Employer to invest, manage, and control the Plan assets subject,
however, to the direction of an Investment Manager if the Employer
should appoint such manager as to all or a portion of the assets of the
Plan;
(b) At the direction of the Administrator, to pay benefits
required under the Plan to be paid to Participants, or, in the event of
their death, to their Beneficiaries;
(c) To maintain records of receipts and disbursements and
furnish to the Employer and/or Administrator for each Plan Year a
written annual report per Section 7.7; and.
(d) If there shall be more than one Trustee, they shall act by
a majority of their number, but may authorize one or more of them to
sign papers on their behalf.
7.3 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE
(a) The Trustee shall invest and reinvest the Trust Fund to
keep the Trust Fund invested without distinction between principal and
income and in such securities or property, real or personal, wherever
situated, as the Trustee shall deem advisable, including, but not
limited to, stocks, common or preferred, bonds and other evidences of
indebtedness or ownership, and real estate or any interest therein. The
Trustee shall at all times in making investments of the Trust Fund
consider, among other factors, the short and long-term financial needs
of the Plan on the basis of information furnished by the Employer. In
making such investments, the Trustee shall not be restricted to
securities or other property of the character expressly authorized by
the applicable law for trust investments; however, the Trustee shall
give due regard to any limitations imposed by the Code or the Act so
that at all times this Plan may qualify as a qualified Plan and Trust..
(b) The Trustee may employ a bank or trust company pursuant to
the terms of its usual and customary bank agency agreement, under which
the duties of such bank or trust company shall be of a custodial,
clerical and recordkeeping nature.
(c) Notwithstanding Section 7.2(a), the Employer, in writing
to the Trustee, may delegate investment responsibility to the
Administrator. If the Administrator has been delegated such authority,
the Trustee shall invest trust assets in accordance with the
Administrator's direction, unless the Trustee determines, in the
exercise of its responsibility under ERISA as a co-fiduciary of the
Plan, that such investments are not permitted under the terms of the
Plan, Trust, or the Act. The Trustee shall not be liable or responsible
for losses or unfavorable results arising from. the Trustee's
compliance with directions received from the Administrator.
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(d) The Trustee may from time to time transfer to a common,
collective, or pooled trust fund maintained by any corporate Trustee
hereunder pursuant to Revenue Ruling 81-100, all or such part of the
Trust Fund as the Trustee may deem advisable, and such part or all of
the Trust Fund so transferred shall be subject to all the terms and
provisions of the common, collective, or pooled trust fund which
contemplate the commingling for investment purposes of such trust
assets with trust assets of other trusts. The Trustee may withdraw from
such common, collective, or pooled trust fund all or such part of the
Trust Fund as the Trustee may deem advisable.
(e) The Trustee, at the direction of the Administrator and
pursuant to instructions from the individual designated in the Adoption
Agreement for such purpose and subject to the conditions set forth in
the Adoption Agreement, shall ratably apply for, own, and pay all
premium on Contracts on the lives of the Participants. Any initial or
additional Contract purchased on behalf of a Participant shall have a
face amount of not less than $1,000, the amount set forth in the
Adoption Agreement, or the limitation of the Insurer, whichever is
greater. If a life insurance Contract is to be purchased for a
Participant, the aggregate premium for ordinary life insurance for each
Participant must be less than 50% of the aggregate contributions and
Forfeitures allocated to a Participant's Combined Account. For purposes
of this limitation, ordinary life insurance Contracts are Contracts
with both non-decreasing death benefits and non-increasing premiums. If
term insurance or universal life insurance is purchased with such
contributions, the aggregate premium must be 25% or less of the
aggregate contributions and Forfeitures allocated to a Participant's
Combined account. If both term insurance and ordinary life' insurance
are purchased with such contributions, the amount expended for term
insurance plus one-half of the premium for ordinary insurance may not
in the aggregate exceed 25% of the aggregate Employer contributions and
Forfeitures allocated to a Participant's Combined Account. The Trustee
must distribute the Contracts to the Participant or convert the entire
value of the Contracts at or before retirement into cash or provide for
a periodic income so that no portion of such value may be used to
continue life insurance protection beyond retirement. Notwithstanding
the above, the limitations imposed herein with respect to the purchase
of life insurance shall not apply, in the case of a Profit Sharing
Plan, to the portion of a Participant's Account that has accumulated
for at least two (2) Plan Years.
Notwithstanding anything hereinabove to the contrary, amounts
credited to a Participant's Qualified Voluntary Employee Contribution
Account pursuant to Section 4.9, shall not be applied to the purchase
of life insurance contracts.
(f) The Trustee will be the owner of any life insurance
Contract purchased under the terms of this Plan. The Contract must
provide that the proceeds will be payable to the Trustee; however, the
Trustee shall be required to pay over all proceeds of the Contract to
the Participant's designated Beneficiary in accordance with the
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distribution provisions of Article VI. A Participant's spouse will be
the designated Beneficiary pursuant to Section 6.2, unless a qualified
election has been made in accordance with Sections 6.5 and 6.6 of the
Plan, if applicable. Under no circumstances shall the Trust retain any
part of the proceeds. However, the Trustee shall not pay the proceeds
in a method that would violate the requirements of the Retirement
Equity Act, as stated in Article VI of the Plan, or Code Section
401(a)(9) and the Regulations thereunder.
(g) Notwithstanding anything in the Plan to the contrary,
investments under this Plan shall be limited to the products of, or
must be purchased through, W.E. Stanley & Company, Inc., or any of its
affiliates or subsidiaries.
7.5 OTHER POWERS OF THE TRUSTEE
The Trustee, in addition to all powers and authorities under
common law, statutory authority, including the Act, and other provisions of this
Plan, shall have the following powers and authorities to be exercised in the
Trustee's sole discretion:
(a) To purchase, or subscribe for, any securities or other
property and to retain the same. In conjunction with the purchase of
securities, margin accounts may be opened and maintained;
(b) To sell, exchange, convey, transfer, grant options to
purchase, or otherwise dispose of any securities or other property held
by the Trustee, by private contract or at public auction. No person
dealing with the Trustee shall be bound to see to the application of
the purchase money or to inquire into the validity, expediency, or
propriety of any such sale or other disposition, with or without
advertisement;
(c) To vote upon any stocks, bonds, or other securities; to
give general or special proxies or powers of attorney with or without
Dower of substitution; to exercise any conversion privileges,
subscription rights or other options, and to make any payments
incidental thereto; to oppose, or to consent to, or otherwise
participate in, corporate reorganizations or other changes affecting
corporate securities, and to delegate discretionary powers, and to pay
any assessments or charges in connection therewith; and generally to
exercise any of the powers of an owner with respect to stocks, bonds,
securities, or other property. However, the Trustee shall not vote
proxies relating to securities for which it has not been assigned full
investment management responsibilities. In those cases where another
party has such investment authority or discretion, be it the
Administrator or an outside Investment Manager, the Trustee will
deliver all proxies to said party who will then have full
responsibility for voting those proxies;
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(d) To cause any securities or other property to, be
registered in the Trustee's own name or in the name of one or more of
the Trustee's nominees, and to hold any investments in bearer form, but
the books and records of the Trustee shall at all times show that all
such investments are part of the Trust Fund;
(e) To borrow or raise money for the purposes of the Plan in
such amount, and upon such terms and conditions, as the Trustee shall
deem advisable; and for any sum so borrowed, to issue a promissory note
as Trustee, and to secure the repayment thereof by pledging all, or any
part, of the Trust Fund; and no person lending money to the Trustee
shall be bound to see to the application of the money lent or to
inquire into the validity, expediency, or propriety of any borrowing;
(f) To keep such portion of the Trust Fund in cash or cash
balances as the Trustee may, from time to time, deem to be in the best
interests of the Plan, without liability for interest thereon;
(g) To accept and retain for such time as it may deem
advisable any securities or other property received or acquired by it
as Trustee hereunder, whether or not such securities or other property
would normally be purchased as investments hereunder;
(h) To make, execute, acknowledge, and deliver any and all,
documents of transfer and conveyance and any and all other instruments
that may be necessary or appropriate to carry out the powers herein
granted;
(i) To settle, compromise, or submit to arbitration any
claims, debts, or damages due or owing to or from the Plan, to commence
or defend suits or legal or administrative proceedings, and to
represent the Plan in all suits and legal and administrative
proceedings;
(j) To employ suitable agents and counsel and to pay their
reasonable expenses and compensation, and such agent or counsel may or
may not be agent or counsel for the Employer;
(k) To apply for and procure from the Insurer as an investment
of the Trust Fund such annuity, or other Contracts (on the life of any
Participant) as the Administrator shall deem proper; to exercise, at
any time or from time to time, whatever rights and privileges may be
granted under such annuity, or other Contracts; to collect, receive,
and settle for the proceeds of all such annuity, or other Contracts as
and when entitled to do so under the provisions thereof;
(1) To invest funds of the Trust in time deposits or savings
accounts bearing a reasonable rate of interest `in the Trustee's bank;
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(m) To invest in Treasury Bills and other forms of United
States government obligations;
(n) To sell, purchase and acquire put or call options if the
options are traded on and purchased through a national securities
exchange registered under the Securities Exchange Act of 1934, as
amended, or, if the options are not traded on a national securities
exchange, are guaranteed by a member firm of the New York Stock
Exchange;
(o) To deposit monies in federally insured savings accounts or
certificates of deposit in banks or savings and loan associations;
(p) To pool all or any of the Trust Fund, from time to time,
with assets belonging to any other qualified employee pension benefit
trust created by the Employer or any Affiliated Employer, and to
commingle such assets and make joint or common investments and carry
joint accounts on behalf of this Plan and such other trust or trusts,
allocating undivided shares or interests in such investment's or
accounts or any pooled assets of the two or more trusts 4n accordance
with their respective interests;
(q) To do all such acts and exercise all such rights and
privileges, although not specifically mentioned herein, as the Trustee
may deem necessary to carry out the purposes of the Plan;
(r) Directed Investment Account. The powers granted to the
Trustee shall be exercised in the sole fiduciary discretion of the
Trustee. However, if elected in the Adoption Agreement, each
Participant may direct the Trustee to separate and keep separate all or
a portion of his interest in the Plan; and further each Participant is
authorized and empowered, in his sole and absolute discretion, to give
directions to the Trustee in such form as the Trustee may require
concerning the investment of the Participant's Directed Investment
Account, which directions must be followed by the Trustee subject,
however, to restrictions on payment of life insurance premiums. Neither
the Trustee nor any other persons including the Administrator or
otherwise shall be under any duty to question any such direction of the
Participant or to review any securities or other property, real or
personal, or to make any suggestions to the Participant in connection
therewith, and the Trustee shall comply as promptly as practicable with
directions given by the Participant hereunder. Any such direction may
be of a continuing nature or otherwise and may be revoked by the
Participant at any time in such form as the Trustee may require. The
Trustee may refuse to comply with any direction from the Participant in
the event the Trustee, in its sole and absolute discretion, deems such
directions improper by virtue of applicable law, and in such event, the
Trustee shall not be responsible or liable for any loss or expense
which may result. Any costs and expenses related to compliance with the
Participant's directions shall be borne by the Participant's Directed
Investment Account.
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Notwithstanding anything hereinabove to the contrary,
the Trustee shall not, at any time after December 31, 1981, invest any
portion of a Directed Investment Account in "collectibles" within the
meaning of that term as employed in Code Section 408(m).
7.7 LOANS TO PARTICIPANTS
(a) If specified in the Adoption Agreement, the Trustee (or,
if loans are treated as Directed Investment pursuant to the Adoption
Agreement, the Administrator) may in the Trustee's (or, if applicable,
the Administrator's sole discretion, make loans to Participants or
Beneficiaries under the following circumstances: (1) loans shall be
made available to all Participants and Beneficiaries on a reasonably
equivalent basis; (2) loans shall not be made available to Highly
Compensated Employees in an amount greater than the amount made
available to other Participants; (3) loans shall bear a reasonable rate
of interest; (4) loans shall be adequately secured; and (5) shall
Provide for periodic repayment over a reasonable period of time.
(b) Loans shall not be made to any Shareholder-Employee or
Owner-Employee unless an exemption for such loan is obtained pursuant
to Act Section 408 and further provided that such loan would not be
subject to tax pursuant to Code Section 4975.
(c) Loans shall not be granted to any Participant that provide
for a repayment period extending beyond such Participant's Normal
Retirement Date.
(d) Loans made pursuant to this Section (when added to the
outstanding balance of all other loans made by the Plan to the
Participant) shall be limited to the lesser of:
(1) $50,000 reduced by the excess (if any) of the highest
outstanding balance of loans from the Plan to the Participant
during the one year period ending on the day before the date
on which such loan is made, over the outstanding balance of
loans from the Plan to the Participant on the date on which
such loan was made, or
(2) the greater of (A) one-half (1/2) of the present value of
the non-forfeitable accrued benefit of the Employee under the
Plan, or (B), if permitted pursuant to the Adoption Agreement,
$10,000.
For purposes of this limit, all plans of the Employer
shall be considered one plan. Additionally, with respect to any loan
made prior to January 1, 1987, the $50,000 limit specified in (1) above
shall be unreduced.
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(e) No Participant loan shall take into account the present
value of such Participant's Qualified Voluntary Employee Contribution
Account.
(f) Loans shall provide for level amortization with payments
to be made not less frequently than quarterly over a period not to
exceed five (5) years. However, loans used to acquire any dwelling unit
which, within a reasonable time, is to be used (determined at the time
the loan is made) as a principal residence of the Participant shall
provide for periodic repayment over a reasonable period of time that
may exceed five (5) years. Notwithstanding the foregoing, loans made
prior to January 1, 1987 which are used to acquire, construct,
reconstruct or substantially rehabilitate any dwelling unit which,
within a reasonable period of time is to be used (determined at the
time the loan is made) as a principal residence of the Participant or a
member of his family (within the meaning of Code Section 267(c)(4)) may
provide for periodic repayment over a reasonable period of time that
may exceed five (5) years. Additionally, loans made prior to January 1,
1987, may provide for periodic payments which are made less frequently
than quarterly and which do not necessarily result in level
amortization.
(g) An assignment or pledge of any portion of a Participant's
interest in the Plan and a loan, pledge, or assignment with respect to
any insurance Contract purchased under the Plan, shall be treated as a
loan under this Section.
(h) Any loan made pursuant to this Section after August 18,
1985 where the Vested interest of the Participant is used to secure
such loan shall require the written consent of the Participant's spouse
in a manner consistent with Section 6.5(a) provided the spousal consent
requirements of such Section apply to the Plan- Such written consent
must be obtained within the 90-day period prior to the date the loan is
made. Any security interest held by the Plan by reason of an
outstanding loan to the Participant shall be taken into account in
determining the amount of the death benefit or Pre-Retirement Survivor
Annuity. However, no spousal consent shall be required under this
paragraph if the total accrued benefit subject to the security is net
in excess of $3,500.
(i) With regard to any loans granted or renewed on or after
the last day of the first Plan Year beginning after December 31, 1988,
a Participant loan program shall be established which must include, but
need not be limited to, the following:
(1) the identity of the person or positions authorized to
administer the Participant loan program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or denied;
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(4) limitations, if any, on the types and amounts of loans
offered, including what constitutes a hardship or financial
need if selected in the Adoption Agreement;
(5) the procedure under the program for determining a
reasonable rate of interest;
(6) the types of collateral which may secure a Participant
loan; and
(7) the events constituting default and the steps that will be
taken to preserve plan assets.
Such Participant loan program shall be contained in a separate
written document which, when properly executed, is hereby incorporated
by reference and made a part of this plan. Furthermore, such
Participant loan program may be modified or amended in writing from
time to time without the necessity of amending this Section of the
Plan.
7.9 DUTIES OF THE TRUSTEE REGARDING PAYMENTS
At the direction of the Administrator, the Trustee shall, from
time to time, in accordance with the terms of the Plan, make payments out of the
Trust Fund. The Trustee shall not be responsible in any way for the application
of such payments.
7.11 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES
The Trustee shall be paid such reasonable compensation as set
forth in the Trustee's fee schedule (if the Trustee has such a schedule) or as
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 this Plan. In addition, the Trustee shall be 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. All taxes of any kind and all kinds whatsoever
that may be levied or assessed under existing or future laws upon, or in respect
of, the Trust Fund or the income thereof, shall be paid from the Trust Fund.
7.13 ANNUAL REPORT OF THE TRUSTEE
Within a reasonable period of time after the later of the
Anniversary Date or receipt of the Employer's contribution for each Plan Year,
the Trustee, or its agent, shall furnish to the Employer and Administrator a
written statement of account with respect to the Plan Year for which such
contribution was made setting forth:
(a) the net income, or loss, of the Trust Fund;
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(b) the gains, or losses, realized by the Trust Fund upon
sales or other disposition of the assets;
(c) the increase, or decrease, in the value of the Trust
Fund;
(d) all payments and distributions made from the Trust
Fund; and
(e) such further information as the Trustee and/or
Administrator deems appropriate. The Employer, forthwith upon its
receipt of each such statement of account, shall acknowledge receipt
thereof in writing and advise the Trustee and/or Administrator of its
approval or disapproval thereof. Failure by the Employer to disapprove
any such statement of account within thirty (30) days after its
receipt thereof shall be deemed an approval thereof. The approval by
the Employer of any statement of account shall be binding as to all
matters embraced therein as between the Employer and the Trustee to
the same extent as if the account of the Trustee had been settled by
judgment or decree in an action for a judicial settlement of its
account in a court of competent jurisdiction in which the Trustee, the
Employer and all persons having or claiming an interest in the Plan
were parties; provided, however, that nothing herein contained shall
deprive the Trustee of its right to have its accounts judicially
settled if the Trustee so desires.
7.15 AUDIT
(a) If an audit of the Plan's records shall be required by the
Act and the regulations thereunder for any Plan Year, the Administrator
shall direct the Trustee to engage on behalf of all Participants an
independent qualified public accountant for that purpose. Such
accountant shall, after an audit of the books and records of the Plan
in accordance with generally accepted auditing standards, within a
reasonable period after the close of the Plan Year, furnish to the
Administrator and the Trustee a report of his audit setting forth his
opinion as to whether any statements, schedules or lists, that are
required by Act Section 103 or the Secretary of Labor to be filed with
the Plan's annual report, are presented fairly in conformity with
generally accepted accounting principles applied consistently.
(b) All auditing and accounting fees shall be an expense of
and may, at the election of the Administrator, be paid from, the Trust
Fund.
(c) If some or all of the information necessary to enable the
Administrator to comply with Act Section 103 is maintained by a bank,
insurance company, or similar institution, regulated and supervised and
subject to periodic examination by a state or federal agency, it shall
transmit and certify the accuracy of that information to the
Administrator as provided in Act Section 103(b) within one hundred
twenty (120) days after the end of the Plan Year or such other date as
may be prescribed under regulations of the Secretary of Labor.
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7.17 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE
(a) The Trustee may resign at any time by delivering to the
Employer, at least thirty (30) days before its effective date, a
written notice of his resignation.
(b) The Employer may remove the Trustee by mailing by
registered or certified mail, addressed to such Trustee at his last
known address, at least thirty (30) days before its effective date, a
written notice of his removal.
(c) Upon the death, resignation, incapacity, or removal of any
Trustee, a successor may be appointed by the Employer; and such
successor, upon accepting such appointment in writing and delivering
same to the Employer, shall, without further act, become vested with
all the estate, rights, powers, discretions, and duties of his
predecessor with like respect as if he were originally named as a
Trustee herein. Until such a successor is appointed, the remaining
Trustee or Trustees shall have full authority to act under the terms of
the Plan.
(d) The Employer may designate one or more successors prior to
the death, resignation, incapacity, or removal of a Trustee. In the
event a successor is so designated by the Employer and accepts such
designation, the successor shall, without further act, become vested
with all the estate, rights, powers, discretions, and duties of his
predecessor with the like effect as if he were originally named as
Trustee herein immediately upon the death, resignation, incapacity, or
removal of his predecessor.
(e) Whenever any Trustee hereunder ceases to serve as such, he
shall furnish to the Employer and Administrator a written statement of
account with respect to the portion of the Plan Year during which he
served as Trustee. This statement shall be either (i) included as part
of the annual statement of account for the Plan Year required under
Section 7.7 or (ii) set forth in a special statement. Any such special
statement of account should be rendered to the Employer no later than
the due date of the annual statement of account for the Plan Year. The
procedures set forth in Section 7.7 for the approval by the Employer of
annual statements of account shall apply to any special statement of
account rendered hereunder and approval by the Employer of any such
special statement in the manner provided in Section 7.7 shall have the
same effect upon the statement as the Employer's approval of an annual
statement of account. No successor to the Trustee shall have any duty
or responsibility to investigate the acts or transactions of any
predecessor who has rendered all statements of account required by
Section 7.7 and this subparagraph.
7.19 TRANSFER OF INTEREST
Notwithstanding any other provision contained in this Plan,
the Trustee at the direction of the Administrator shall transfer the Vested
interest, if any, of such Participant- in his account to another trust forming
part of a pension, profit sharing, or stock bonus plan maintained by such
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Participant's new employer and represented by said employer in writing as
meeting the requirements of Code Section 401 (a), provided that the trust to
which such transfers are made permits the transfer to be made.
7.21 TRUSTEE INDEMNIFICATION
The Employer agrees to indemnify and save harmless the Trustee
against any and all claims, losses, damages, expenses and liabilities the
Trustee may incur in the exercise and performance of the Trustee's powers and
duties hereunder, unless the same are determined to be due to gross negligence
or willful misconduct.
7.23 EMPLOYER SECURITIES AND REAL PROPERTY
The Trustee shall be empowered to acquire and hold "qualifying
Employer securities" and "qualifying Employer real property," as those terms are
defined in the Act. However, no more than 100%, in the case of a Profit Sharing
Plan or 401(k) Plan or 10%, in the case of a Money Purchase Plan of the fair
market value of all the assets in the Trust Fund may be invested in "qualifying
Employer securities" and "qualifying Employer real property".
ARTICLE VIII.
AMENDMENT, TERMINATION, AND MERGERS
8.1 AMENDMENT
(a) The Employer shall have the right at any time to amend
this Plan subject to the limitations of this Section. However, any
amendment which affects the rights, duties or responsibilities of the
Trustee and Administrator may only be made with the Trustee's and
Administrator's written consent. Any such amendment shall become
effective as provided therein upon its execution. The Trustee shall not
be required to execute any such amendment unless the amendment affects
the duties of the Trustee hereunder.
(b) The Employer may (1) change the choice of options in the
Adoption Agreement, (2) add overriding language in the Adoption
Agreement when such language is necessary to satisfy Code Sections 415
or 416 because of the required aggregation of multiple plans, and (3)
add certain model amendments published by the Internal Revenue Service
which specifically provide that their adoption will not cause the Plan
to be treated as an individually designed plan. An Employer that amends
the Plan for any other reason, including a waiver of the minimum
funding requirement under Code Section A-12(d), will no longer
participate in this Regional Prototype Plan and will be considered to
have an individually designed plan.
(c) The Employer expressly delegates authority to the
sponsoring organization of this Plan, the right to amend this Plan by
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submitting a copy of the amendment to each Employer who has adopted
this Plan after first having received a ruling or favorable
determination from the internal Revenue Service that the Plan as
amended qualifies under Code Section 401(a) and the Act.
(d) No amendment to the Plan shall be effective if it
authorizes or permits any part of the Trust Fund (other than such part
as is required to pay taxes and administration expenses) to be used for
or diverted to any purpose other than for the exclusive benefit of the
Participants or their Beneficiaries or estates; or causes any reduction
in the amount credited to the account of any Participant; or causes or
permits any portion of the Trust Fund to revert to or become property
of the Employer.
(e) Except as permitted by Regulations (including Regulation
1.411(d)-4), no Plan amendment or transaction having the effect of a
Plan amendment (such as a merger, plan transfer or similar transaction)
shall be effective if it eliminates or reduces any "Section 411 (d) (6)
protected benefits" or adds or modifies conditions relating to "Section
411 (d) (6) protected benefits" the result of which is a further
restriction on such benefit unless such protected benefits are
preserved with respect to benefits accrued as of the later of the
adoption date or effective date of the amendment. "Section 411(d) (6)
protected benefits" are benefits described in Code Section
411(d)(6)(A), early retirement benefits and retirement-type subsidies,
and optional forms of benefit.
8.3 TERMINATION
(a) The Employer shall have the right at any time to terminate
the Plan by delivering to the Trustee and Administrator written notice
of such termination. Upon any full or partial termination all amounts
credited to the affected Participants' Combined Accounts shall become
100% Vested and shall not thereafter be subject to forfeiture, and all
unallocated amounts shall be allocated to the accounts of all
Participants in accordance with the provisions hereof.
(b) Upon the full termination of the Plan, the Employer shall
direct the distribution of the assets to Participants in a manner which
is consistent with and satisfies the provisions of Section 6.5.
Distributions to a Participant shall be made in cash (or in property if
permitted in the Adoption Agreement) or through the purchase of
irrevocable nontransferable deferred commitments from the Insurer.
Except as permitted by Regulations, the termination of the Plan shall
not result in the reduction of "Section 411 (d) (06) protected
benefits" as described in Section 8.1.
8.5 MERGER OR CONSOLIDATION
This Plan may be merged or consolidated with, or its assets
and/or liabilities may be transferred to any other plan only if the benefits
which would be received by a Participant of this Plan, in the event of a
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termination of the plan immediately after such transfer, merger or
consolidation, are at least equal to the benefits the Participant would have
received if the Plan had terminated immediately before the transfer, merger or
consolidation and such merger or consolidation does not otherwise result in the
elimination or reduction of any "Section 411(d)(6) protected benefits" as
described in Section 8.1(e).
ARTICLE IX.
MISCELLANEOUS
9.1 EMPLOYER ADOPTIONS
(a) Any organization may become the Employer hereunder by
executing the Adoption Agreement in form satisfactory to the Trustee,
and it shall provide such additional information as the Trustee may
require. The consent of the Trustee to act as such shall be signified
by its execution of the Adoption Agreement.
(b) Except as otherwise provided in this Plan, the affiliation
of the Employer and the participation of its Participants shall be
separate and apart from that of any other employer and its participants
hereunder.
9.3 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract between
the Employer and any Participant or to be a consideration or an inducement for
the employment of any Participant or Employee. Nothing contained in this Plan
shall be deemed to give any Participant or Employee the right to be retained in
the service of the Employer or to interfere with the right of the Employer to
discharge any Participant or Employee at any time regardless of the effect which
such discharge shall have upon him as a Participant of this Plan.
9.5 ALIENATION
(a) Subject to the exceptions provided below, no benefit which
shall be payable to any person (including a Participant or his
Beneficiary) shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, or charge,
and any attempt to anticipate, alienate, sell, transfer, assign,
pledge, encumber, or charge the same shall be void; and no such benefit
shall in any manner be liable for, or subject to, the debts, contracts,
liabilities, engagements, or torts of any such person, nor shall it be
subject to attachment or legal process for or against such person, and
the same shall not be recognized except to such extent as may be
required by law.
(b) This provision shall not apply to the extent a Participant
or Beneficiary is indebted to the Plan, for any reason, under any
provision of this Plan. At the time a distribution is to be made to or
for a Participant's or Beneficiary's benefit, such proportion of the
amount to be distributed as shall equal such indebtedness shall be paid
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to the Plan, to apply against or discharge such indebtedness. Prior to
making a payment, however, the Participant or Beneficiary must be given
written notice by the Administrator that such indebtedness is to be so
paid in whole or part from his Participant's Combined Account. If the
Participant or Beneficiary does not agree that the indebtedness is a
valid claim against his Vested Participant's Combined Account, he shall
be entitled to review of the validity of the claim in accordance with..
procedures provided in Sections 2.12 and 2.13.
(c) This provision shall not apply to a "qualified domestic
relations order" defined in Code Section 414(p), and those other
domestic relations orders permitted to be so treated by the
Administrator under the provisions of the Retirement Equity Act of
1984. The Administrator shall establish a written procedure to
determine the qualified status of domestic relations orders and to
administer distributions under such qualified orders. Further, to the
extent provided under a "qualified domestic relations order", a former
spouse of a Participant shall be treated as the spouse or surviving
spouse for all purposes under the Plan.
9.7 CONSTRUCTION OF PLAN
This Plan and Trust shall be construed and enforced according
to the Act and the laws of the State or Commonwealth in which the Employer's
principal office is located, other than its laws respecting choice of law, to
the extent not pre-empted by the Act.
9.9 GENDER AND NUMBER
Wherever any words are used herein in the masculine, feminine
or neuter gender, they shall be construed as though they were also used in
another gender in all cases where they would so apply, and whenever any words
are used herein in the singular or plural form, they shall be construed as
though they were also used in the other form in all cases where they would so
apply.
9.11 LEGAL ACTION
In the event any claim, suit, or proceeding is brought
regarding the Trust and/or Plan established hereunder to which the Trustee or
the Administrator may be a party, and such claim, suit, or proceeding is
resolved in favor of the Trustee or Administrator, they shall be entitled to be
reimbursed from the Trust Fund for any and all costs, attorney's fees, and other
expenses pertaining thereto incurred by them for which they shall have become
liable.
9.13 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise specifically
permitted by law, it shall be impossible by operation of the Plan or of
the Trust, by termination of either, by power of revocation or
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amendment, by the happening of any contingency, by collateral
arrangement. or by any other means, for any part of the corpus or
income of any Trust Fund maintained pursuant to the Plan or any funds
contributed thereto to be used for, or diverted to, purposes other than
the exclusive benefit of Participants, Retired Participants, or their
Beneficiaries.
(b) In the event the Employer shall make a contribution under
a mistake of fact pursuant to Section 403(c)(2)(A) of the Act, the
Employer may demand repayment of such contribution at any time within
one (1) year following the time of payment and the Trustees shall
return such amount to the Employer within the one (1) year period.
Earnings of the Plan attributable to the contributions may not be
returned to the Employer but any losses attributable thereto must
reduce the amount so returned.'
9.15 BONDING
Every Fiduciary, except a bank or an insurance company, unless
exempted by the Act and regulations thereunder, shall be bonded in an amount not
less than 10% of the amount oil the funds such Fiduciary handles; provided,
however, that the minimum bond shall be $1,000 and the maximum bond, $500,000.
The amount of funds handled shall be determined at the beginning of each Plan
Year by the amount of funds handled by such person, group, or class to be
covered and their predecessors, if any, during the preceding Plan Year, or if
there is no preceding Plan Year, then by the amount of the funds to be handled
during the then current year. The bond shall provide protection to the Plan
against any loss by reason of acts of fraud or dishonesty by the Fiduciary alone
or in connivance with others. The surety shall be a corporate surety company (as
such term is used in Act Section 412(a)(2)), and the bond shall be in a form
approved by the Secretary of Labor. Notwithstanding anything in the Plan to the
contrary, the cost of such bonds shall be an expense of and may, at the election
of the Administrator, be paid from the Trust Fund or by the Employer.
9.17 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
Neither the Employer nor the Trustee, nor their successors,
shall be responsible for the validity of any Contract issued hereunder or for
the failure on the part of the Insurer to make payments provided by any such
Contract, or for the action of any person which may delay payment or render a
Contract null and void or unenforceable in whole or in part.
9.19 INSURER'S PROTECTIVE CLAUSE
The Insurer who shall issue Contracts hereunder shall not have
any responsibility for the validity of this Plan or for the tax or legal aspects
of this Plan. The Insurer shall be protected and held harmless in acting in
accordance with any written direction of the Trustee, and shall have no duty to
see to the application of any funds paid to the Trustee, nor be required to
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question any actions directed by the Trustee. Regardless of any provision of
this Plan, the Insurer shall not be required to take or. permit any action or
allow any benefit or privilege contrary to the terms of any Contract which it
issues hereunder, or the rules of the Insurer.
9.21 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, his legal representative,
Beneficiary, or to any guardian or committee appointed for such Participant or
Beneficiary in accordance with the provisions of this Plan, shall, to the extent
thereof, be in full satisfaction of all claims hereunder against the Trustee and
the Employer.
9.23 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is permitted
or required to do or perform any act or matter or thing, it shall be done and
performed by a person duly authorized by its legally constituted authority.
9.25 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are (1) the Employer, (2i
the Administrator, (3) the Trustee, and (4) any investment Manager appointed
hereunder. The named Fiduciaries shall have only those specific powers, duties,
responsibilities, and obligations as are specifically given them under the Plan.
In general, the Employer shall have the sole responsibility for making the
contributions or provided for under Section 4-1; and shall have the sole
authority to appoint and remove the Trustee and the Administrator; to formulate
the Plan's "funding policy and method"; and to amend the elective provisions of
the Adoption Agreement or terminate, in whole or in part, the Plan. The
Administrator shall have the sole responsibility for the administration of the
Plan, which responsibility is specifically described in the Plan. The Trustee
shall have the sole responsibility of management of the assets held under the
Trust, except those assets, the management of which has been assigned to an
Investment Manager or Administrator, who shall be solely responsible for the
management of the assets assigned to it, all as specifically provided in the
Plan. Each named Fiduciary warrants that any directions given, information
furnished, or action taken by it shall be in accordance with the provisions of
the Plan, authorizing or providing for such direction, information or action.
Furthermore, each named Fiduciary may rely upon any such direction, information
or action of another named Fiduciary as being proper under the Plan, and is not
required under the Plan to inquire into the propriety of any such direction,
information or action. It is intended under the Plan that each named Fiduciary
shall be responsible for the proper exercise of its own powers, duties,
responsibilities and obligations under the Plan. No named Fiduciary shall
guarantee the Trust Fund in any manner against investment loss or depreciation
in asset value. Any person or group may serve in more than one Fiduciary
capacity.
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9.27 HEADINGS
The headings and subheadings of this Plan have been inserted
for convenience of reference and are to be ignored in any construction of the
provisions hereof.
9.29 APPROVAL BY INTERNAL REVENUE SERVICE
(a) Notwithstanding anything herein to the contrary, if,
pursuant to a timely application filed by or in behalf of the Plan, the
Commissioner of internal Revenue Service or his delegate should
determine that the Plan does not initially qualify as a tax-exempt plan
under Code Sections 401 and 501, and such determination is not
contested, or if contested, is finally upheld then if the Plan is a
new plan, it shall be void ab initio and all amounts contributed to the
Plan, by the Employer, less expenses paid, shall be returned within one
year and the Plan shall terminate, and. the Trustee shall be discharged
from all further obligations. If the disqualification relates to an
amended plan, then the Plan shall operate as if it had not been amended
and restated.
(b) Except as specifically stated in the Plan, any
contribution by the Employer to the Trust Fund is conditioned upon the
deductibility of the contribution by the Employer under the Code and,
to the extent any such deduction is disallowed, the Employer may within
one (1) year following a final determination of the disallowance,
whether by agreement with the Internal Revenue Service or by final
decision of a court of competent jurisdiction, demand repayment of such
disallowed contribution and the Trustee shall return such contribution
within one (1) year following the disallowance. Earnings of the Plan
attributable to the. excess contribution may not be returned to the
".Employer, but any losses attributable thereto must reduce the amount
so returned.
9.31 UNIFORMITY
All provisions of this Plan shall be interpreted and applied
in a uniform, nondiscriminatory manner.
9.33 PAYMENT OF BENEFITS
Benefits under this Plan shall be paid, subject to Section
6.10 and Section 6.11 only upon death, Total and Permanent Disability, normal or
early retirement, termination of employment, or upon Plan Termination.
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ARTICLE X.
PARTICIPATING EMPLOYERS
10.1 ELECTION TO BECOME A PARTICIPATING EMPLOYER
Notwithstanding anything herein to the contrary, with the
consent of the Employer and Trustee, any Affiliated Employer may adopt this Plan
and all of the provisions hereof, and participate herein and be known as a
Participating Employer, by properly executed document evidencing said intent and
will of such Participating Employer.
10.3 REQUIREMENTS OF PARTICIPATING EMPLOYERS
(a) Each Participating Employer shall be required to select
the same Adoption Agreement provisions as those selected by the
Employer other than the Plan Year, the Fiscal Year, and such other
items that must, by necessity, vary among employers.
(b) Each such Participating Employer shall be required to use
the same Trustee as provided in this Plan.
(c) The Trustee may, but shall not be required to, commingle,
hold and invest as one Trust Fund all contributions made by
Participating Employers, as well as all increments thereof.
(d) The transfer of any Participant from or to an Employer
participating in this Plan, whether he be an Employee of the Employer
or a Participating Employer, shall not affect such Participant's rights
under the Plan, and all amounts credited to such Participant's Combined
Account as well as his accumulated service time with the transferor or
predecessor, and his length of participation in the Plan, shall
continue to his credit.
(e) Any expenses of the Plan which are to be paid by the
Employer or borne by the Trust Fund shall be paid by each Participating
Employer in the same proportion that the total amount standing to the
credit of all Participants employed by such Employer bears to the total
standing to the credit of all Participants.
10.5 DESIGNATION OF AGENT
Each Participating Employer shall be deemed to be a part of
this Plan; provided, however, that with respect to all of its relations with the
Trustee and Administrator for the purpose of this Plan, each Participating
Employer shall be deemed to have designated irrevocably the Employer as its
agent. Unless the context of the Plan clearly indicates the contrary, the word
of "Employer" shall be deemed to include each Participating Employer as related
to its adoption of the Plan.
10.7 EMPLOYEE TRANSFERS
It is anticipated that an Employee may. be transferred between
Participating Employers, and in the event of any such transfer, the Employee
involved shall carry with him his accumulated service and eligibility. No such
transfer shall effect a termination of employment hereunder, and the
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Participating Employer to which the Employee is transferred shall thereupon
become obligated hereunder with respect to such Employee in the same manner as
was the Participating Employer from whom the Employee was transferred.
10.9 PARTICIPATING EMPLOYER'S CONTRIBUTION AND FORFEITURES
Any contribution or Forfeiture subject to allocation during
each Plan Year shall be allocated among all Participants of all Participating
Employers in accordance with the provisions. of this Plan. On tile basis of the
information furnished by the Administrator, the Trustee shall keep separate
books and records concerning the affairs of each Participating Employer
hereunder and as to the accounts and credits of the Employees or each
Participating Employer. The Trustee may, but need not, register Contracts so as
to evidence that a particular Participating Employer is title interested
Employer hereunder, but in the event of an Employee transfer from one
Participating Employer to another, the employing Employer shall immediately
notify the Trustee thereof.
10.11 AMENDMENT
Amendment of this Plan by the Employer at any time when there
shall be a Participating Employer hereunder shall only be by the written action
of each and every Participating Employer and with the consent of the Trustee
where such consent is necessary in accordance with the terms of this Plan.
10.13 DISCONTINUANCE OF PARTICIPATION
Except in the case of a Standardized Plan, any Participating
Employer shall be permitted to discontinue or revoke its participation in the
Plan at any time. At the time of any such discontinuance or revocation,
satisfactory evidence thereof and of any applicable conditions imposed shall be
delivered to the Trustee. The Trustee shall thereafter transfer, deliver and
assign Contracts and other Trust Fund assets allocable to the Participants of
such Participating Employer to such new Trustee as shall have been designated by
such Participating Employer, in the event that it has established a separate
pension plan for its Employees provided, however, that no such transfer shall be
made if the result is the elimination or reduction of any "Section 411(d)(6)
protected benefits" in accordance with Section 8.1(e). If no successor is
designated, the Trustee shall retain such assets for the Employees of said
Participating Employer pursuant to the provisions of Article VII hereof. In no
such event shall any part of the corpus or income of the Trust Fund as it
relates to such Participating Employer be used for or diverted for purposes
other than for the exclusive benefit of the Employees of such Participating
Employer.
10.15 ADMINISTRATOR'S AUTHORITY
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The Administrator shall have authority to make any and all
necessary rules or regulations, binding upon all Participating Employers and all
Participants, to effectuate the purpose of this Article.
10.17 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE
If any Participating Employer is prevented in whole or in part
from making a contribution which it would otherwise have made under the Plan by
reason of having no current or accumulated earnings or profits, or because such
earnings or profits are less than the contribution which it would otherwise have
made, then, Pursuant to Code Section 404(a)(3)(B), so much of the contribution
which such Participating Employer was so prevented from making may be made, for
the benefit of the participating employees of such Participating Employer, by
other Participating Employers who are members of the same affiliated group
within the meaning of Code Section 1504 to the extent of their current or
accumulated earnings or profits, except that such contribution by each such
other Participating Employer shall be limited to the proportion of its total
current and accumulated earnings or profits remaining after adjustment for its
contribution to the Plan made without regard to this paragraph which the total
prevented contribution bears to the total current and accumulated earnings or
profits of all the Participating Employers remaining after adjustment for all
contributions made to the Plan without regard to this paragraph.
A Participating Employer on behalf of whose employees a
contribution is made under this paragraph shall not be required to reimburse the
contributing Participating Employers.
ARTICLE XI.
CASH OR DEFERRED PROVISIONS
Notwithstanding any provisions in the Plan to the contrary,
the provisions of this Article shall apply with respect to any 401(k) Profit
Sharing Plan.
11.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
For each Plan Year, the Employer shall contribute to the Plan:
(a) The amount of the total salary reduction elections all
Participants made pursuant to Section 11. 2(a) which amount shall be
deemed an Employer's Elective Contribution, plus
(b) If specified in E3 of the Adoption Agreement, a matching
contribution equal to the percentage specified in the Adoption
Agreement of the Deferred Compensation of each Participant eligible to
share in the allocations of the matching contribution, which amount
shall be deemed an Employer's Non-Elective or Elective Contribution as
selected in the Adoption Agreement, plus
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(c) if specified in E4 of the Adoption Agreement, a
discretionary amount, if any, which shall be deemed an Employer's
Non-Elective Contribution, plus
(d) if specified in E5 of the Adoption Agreement, a Qualified
Non-Elective Contribution.
(e) Notwithstanding the foregoing, however, the Employer's
contributions for any Fiscal Year shall not exceed the maximum amount
allowable as a deduction to the Employer under the provisions of Code
Section 404. All contributions by the Employer shall be made in cash or
in such property as is acceptable to the Trustee.
(f) Except, however, to the extent necessary to provide the
top heavy minimum allocations, the Employer shall make a contribution
even if it exceeds current or accumulated Net Profit or the amount
which is deductible under Code Section 404.
(g) Employer Elective Contributions accumulated through
payroll deductions shall be paid to the Trustee as of the earliest date
on which such contributions can reasonably be segregated from the
Employer's general assets, but in any event within ninety (90) days
from the date on which such amounts would otherwise have been payable
to the Participant in cash. The provisions of Department of Labor
regulations 2510.3-102 are incorporated herein by reference.
Furthermore, any additional Employer contributions which are allocable
to the Participant's Elective Account for a Plan Year shall be paid to
the Plan no later than the twelve-month period immediately following
the close of such Plan Year.
11.3 PARTICIPANT'S SALARY REDUCTION ELECTION
(a) If selected in the Adoption Agreement, each Participant
may elect to defer his Compensation which would have been received in
the Plan Year, but for the deferral election, subject to the
limitations of this Section and the Adoption Agreement. A deferral
election (or modification of an earlier election) may not be made with
respect to Compensation which is currently available on or before the
date the Participant executed such election, or if later, the latest of
the date the Employer adopts this cash or deferred arrangement, or the
date such arrangement first became effective. Any elections made
pursuant to this Section shall become effective as soon as is
administratively feasible.
Additionally, if elected in the Adoption Agreement, each
Participant may elect to defer and have allocated for a Plan Year all
or a portion of any cash bonus attributable to services performed by
the Participant for the Employer during such Plan Year and which would
have been received by the Participant on or before two and
one-half-months following the end of the Plan Year but for the
deferral. A deferral elect on may not be made with respect "bonuses"
which are currently available on or before to cash the date the
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Participant executed such election. Notwithstanding the foregoing, cash
bonuses attributable to services performed by the Participant during a
Plan Year but which are to be paid to the Participant later than two
and one-half months after the close of such Plan Year will be subjected
to whatever deferral election is in effect at the time such cash bonus
would have otherwise been received.
The amount by which Compensation and/or cash bonuses are
reduced shall be that Participant's Deferred Compensation and be
treated as an Employer Elective Contribution and allocated to that
Participant's Elective Account.
Once made, a Participant's election to reduce
Compensation shall remain in effect until modified or terminated.
Modifications may be made as specified in the Adoption Agreement, and
terminations may be. made at any time. Any modification or termination
of an election will become effective as soon as is administratively
feasible.
(b) The balance in each Participant's Elective Account shall
be fully Vested at all times and shall not be subject to Forfeiture for
any reason.
(c) Amounts held in the Participants Elective Account and
Qualified Non-Elective Account may be distributable as permitted under
the Plan, but in no event prior to the. earlier of:
(1) a Participant's termination of employment, Total and
Permanent Disability, or death;
(2) a Participant's attainment of age 59 1/2;
(3) the proven financial hardship of a Participant, subject to
the limitations of Section 11.8;
(4) the termination of the Plan without -the existence at the
time of Plan termination of another defined contribution plan
(other than an employee stock ownership plan as defined in
Code Section 4975(e) (7)) or the establishment of a successor
defined contribution plan (other than an employee stock
ownership plan as defined in Code Section 4975(e) (7)) by the
Employer or an Affiliated Employer within the period ending
twelve months after distribution of all assets from the Plan
maintained by the Employer;
(5) the date of the sale by the Employer to an entity that is
not an Affiliated Employer of substantially all of the assets
(within the meaning of Code Section 409 (d) (2)) with respect
to a Participant who continues employment with the corporation
acquiring such assets; or
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(6) the date of the sale by the Employer or an Affiliated
Employer of its interest in a subsidiary (within the meaning
of Code Section 409 (d) 113)) to an entity that is not an
Affiliated Employer with respect to a Participant who
continues employment with such subsidiary.
(d) In any Plan Year beginning after December 31, 1987, a
Participant's Deferred Compensation made under this Plan and all other
plans, contracts or arrangements of the Employer maintaining this Plan
shall not exceed the limitation imposed by Code Section 402(g), as in
effect for the calendar year in which such Plan Year began. This dollar
limitation shall be adjusted annually pursuant to the method provided
in Code Section 415(d) in accordance with Regulations.
(e) In the event a Participant has received a hardship
distribution pursuant to Regulation 1.401(k)-1(d)(2)(iii)(B) from any
other plan maintained by the Employer or from his Participant's
Elective Account pursuant to Section 11.8, then such Participant shall
not be permitted to elect to have Deferred Compensation contributed to
the Plan on his behalf for a period of twelve (12) months following
the. receipt of the distribution. Furthermore, the dollar limitation
under Code Section 402(g) shall be reduced, with respect to the
Participant's taxable year following the taxable year in which the
hardship distribution was made, by the amount of such Participant's
Deferred Compensation, if any, made pursuant to this Plan (and any
other plan maintained by the Employer) for the taxable year of the
hardship distribution.
(f) If a Participant's Deferred Compensation under
this Plan together with any elective deferrals (as defined in
Regulation 1.402(g)-l(b)) under another qualified cash or deferred
arrangement (as defined in Code Section 401(k)), a simplified employee
pension (as defined in Code Section 408(k)), a salary reduction
arrangement (within the meaning of Code Section 3121(a)(5)(D)), a
deferred compensation plan under Code Section 457, or a trust described
in Code Section 501(c)(18) cumulatively exceed the limitation imposed
by Code Section 402(g) (as adjusted annually in accordance with the
method provided in Code Section 415(d) pursuant to Regulations) for
such Participant's taxable year, the Participant may, not later than
March 1st following the close of his taxable year, notify the
Administrator in writing of such excess and request that his Deferred
Compensation under this Plan be reduced by an amount specified by the
Participant. In such event, the Administrator shall direct the Trustee
to distribute such excess amount (and any Income allocable to such
excess amount) to the Participant not later than the first April 15th
following the close of the Participant's taxable year. Distributions in
accordance with this paragraph may be made for any taxable year of the
Participant which begins after December 31, 1986. Any distribution of
less than the entire amount of Excess Deferred Compensation and Income
shall be treated as a pro rata distribution of Excess Deferred
Compensation and Income. The amount distributed shall not exceed the
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Participant's Deferred Compensation under the Plan for the taxable
year. Any distribution on or before the last day of the Participant's
taxable year must satisfy each of the following conditions:
(1) the Participant shall designate the distribution as Excess
Deferred Compensation;
(2) the distribution must be made after the date on which the
Plan received the Excess Deferred Compensation; and
(3) the Plan must designate the distribution as a distribution
of Excess Deferred compensation.
For the purpose of this section, "Income" means the amount of
income or loss allocable to a Participant's Excess Deferred
Compensation and shall be equal to the sum of the allocable gain or
loss for the taxable year of the Participant and the allocable gain or
loss for the period between the end of the, taxable year of the
Participant and the date of distribution ("gap period"). The income or
loss allocable to each such period is calculated separately and is
determined by multiplying the income or loss allocable to the
Participant's Deferred Compensation for the respective fraction. The
numerator of the fraction is the Participant's Excess Deferred
Compensation for the taxable Participant. The denominator is the
balance, as period by a Participant' year of the of the last day of the
respective period, of the Participant's Elective Account that is
attributable to, the Participant's Deferred Compensation reduced by the
gain allocable to such total amount for the respective period and
increased by the loss allocable to such total amount for the respective
period.
In lieu of the "fractional method" described above, a "safe
harbor method" may be used to calculate the allocable income or loss
for the "gap period". Under such "safe harbor method", allocable income
or loss for the "gap period" shall be deemed to equal ten percent (10%)
of the income or loss allocable to a Participant's Excess Deferred
Compensation for the taxable year of the Participant multiplied by the
number of calendar months in the "gap period". For purposes of
determining the number of calendar months in the "gap period", a
distribution occurring on or before the fifteenth day of the month
shall be treated as having been made on the last day of the preceding
month and a distribution occurring after such fifteenth day shall be
treated as having been made on the first day of the next subsequent
month.
Income or loss allocable to any distribution of Excess
Deferred Compensation on or before the last day of the taxable year of
the Participant shall be calculated from the first day of the taxable
year of the Participant to the date on which the distribution is made
pursuant to either the "fractional method" or the "safe harbor method".
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Notwithstanding the above, for the 1987 calendar year, Income
during the "gap period" shall not be taken into account.
(g) Notwithstanding the above, a Participant's Excess Deferred
Compensation shall be reduced, but. not below zero, by any distribution
and/or recharacterization of Excess Contributions pursuant to Section
11-5(a) for the Plan Year beginning with or within the taxable year of
the Participant.
(h) At Normal Retirement Date, or such other date when the
Participant shall be entitled to receive benefits, the fair market
value of the Participant's Elective Account shall be used to provide
benefits to the Participant or his Beneficiary.
(i) Employer Elective Contributions made pursuant to this
Section may be segregated into a separate account for each Participant
in a federally insured savings account, certificate of deposit in a
bank or savings and loan association, money market certificate, or
other short-term debt security acceptable to the Trustee until such
time as the allocations pursuant to Section 11.3 have been made.
(j) The Employer and the Administrator shall adopt a procedure
necessary to implement the salary reduction elections provided for
herein.
11.5 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and maintain an account
in the name of each Participant to which the Administrator shall credit
as of each Anniversary Date, or other valuation date, all amounts
allocated to each such Participant as set forth herein.
(b) The Employer shall provide the Administrator with all
information required by the Administrator to make a proper allocation
of the Employer's contributions for each Plan Year. Within a reasonable
period of time after the date of receipt by the Administrator of such
information, the Administrator shall allocate such contribution as
follows:
(1) With respect to the Employer's Elective Contribution made
pursuant to Section 11.1(a), to each Participant's Elective
Account in an amount equal to each such Participant's Deferred
Compensation for the year.
(2) With respect to the Employer's matching Contribution made
pursuant to Section 11.1(b), to each Participant's Account, or
Participant's Elective Account as selected in E3 of the
Adoption Agreement, in accordance with Section 11.1(b).
Except, however, a Participant who is not credited with a Year
of Service during any Plan Year shall or shall not share in
the Employer's Matching Contribution for that year as provided
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in E3 of the Adoption Agreement. However, for Plan Years
beginning after 1989, if this is a standardized Plan, a
Participant shall share in the Employer's matching
Contribution regardless of Hours of Service.
(3) With respect to the Employer's Non-Elective Contribution
made pursuant to Section 11.1(c), to each Participant's
Account in accordance with the provisions of Sections
4.3(b)(2) or 4.3(b)(3), whichever is applicable, 4.3(k) and
4.3(l).
(4) With respect to the Employer's Qualified Non-Elective
Contribution made pursuant to Section 11.1(d), to each
Participant's Qualified Non-Elective Contribution Account in
the same proportion that each such Participant's Compensation
for the year bears to the total Compensation of all
Participants for such year. However, for any Plan Year
beginning prior to January 1, 1990, and if elected in the
non-standardized Adoption Agreement for any Plan Year
beginning on or after January 1, 1990, a Participant who is
not credited with a Year of Service during any Plan Year shall
not share in the Employer's Qualified Non-Elective
Contribution for that year, unless required pursuant to
Section 4.3(h). In addition, the provisions of Sections 4.3(k)
and 4.3(l) shall apply with respect to the allocation of the
Employer's Qualified Non-Elective contribution.
(c) Notwithstanding anything in the Plan to the contrary, for
Plan Years beginning after December 31, 1988, in determining whether a
Non-Key Employee has received the required mil minimum allocation
pursuant to Section 4.3 (f) such Non-Key Employee's Deferred
Compensation and matching contributions used to satisfy the "Actual
Deferral Percentage" test pursuant to Section 11.4(a) or the "Actual
Contribution Percentage" test of Section 11.6(a) shall not be taken
into account.
(d) Notwithstanding anything herein to the contrary,
participants who terminated employment during the Plan Year shall share
in the salary reduction contributions made by the Employer for the year
of termination without regard to the Hours oil Service credited.
(e) Notwithstanding anything herein to the contrary (other
than Sections 11.3(d) and 11.3(g)), any Participant who terminated
employment during the Plan Year for reasons other than death, Total and
Permanent Disability, or retirement shall or shall not share in the
allocations of the Employer's Matching Contribution made pursuant to
Section 11.1(b), the Employer's Non-Elective Contributions made
pursuant to Section 11.1(c), the Employer's Qualified Non-Elective
Contribution made pursuant to Section 11.1(d), and Forfeitures as
provided in the Adoption Agreement. Notwithstanding the foregoing, for
Plan Years beginning after 1989, if this is a standardized Plan, any
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such terminated Participant shall share in such allocations provided
the terminated Participant completed more than 500 Hours of Service.
(f) Notwithstanding anything herein to the contrary,
Participants terminating for reasons of death, Total and Permanent
Disability, or retirement shall share in the allocation of the
Employer's Matching Contribution made pursuant to Section 11.1(b), the
Employer's Non-Elective Contributions made pursuant to Section 11.1(c),
the Employer's Qualified Non-Elective Contribution made pursuant to
Section 11.1(d), and Forfeitures as provided in this Section regardless
of whether they completed a Year of Service during the Plan Year.
(g) Notwithstanding any election in the Adoption Agreement to
the contrary, if this is a non-standardized Plan that would otherwise
fail to meet the requirements of Code Sections 401 (a) (26), 410 (b)
(1), or 410 (b) (2) (A) (i) and the Regulations thereunder because
Employer matching Contributions made pursuant to Section 11.1(b),
Employer Non-Elective Contributions made pursuant to Section 11.1(c) or
Employer Qualified Non-Elective Contributions made pursuant to Section
11.1(d) have not been allocated to a sufficient number or percentage of
Participants for a Plan Year, then the following rules shall apply:
(1) The group of Participants eligible to share in the
respective contributions for the Plan Year shall be expanded
to include the minimum number of Participants who would not
otherwise be eligible as are necessary to satisfy the
applicable test specified above. The specific participants who
shall become eligible under the terms of this paragraph shall
be those who are actively employed on the last day of the Plan
Year and, when compared to similarly situated Participants,
have completed the greatest number of Hours of Service in the
Plan Year.
(2) If after application of paragraph (1) above, the
applicable test is still not satisfied, then the group of
Participants eligible to share for the Plan Year shall be
further expanded to include the minimum number of Participants
who are not actively employed on the. last day of the Plan
Year as are necessary to satisfy the applicable test. The
specific Participants who shall become eligible to share shall
be those Participants, when compared to similarly situated
Participants, who have completed the greatest number of Hours
of Service in the Plan Year before terminating employment.
11.7 ACTUAL DEFERRAL PERCENTAGE TESTS
(a) Maximum Annual Allocation: For each Plan Year beginning
after December 31, 1986, the annual allocation derived from Employer
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Elective Contributions and Qualified Non-Elective Contributions to a
Participant's Elective Account and Qualified Non-Elective Account shall
satisfy one of the "following tests:
(1) The "Actual Deferral Percentage for the Highly Compensated
Participant group shall not be more than the "Actual Deferral
Percentage" of the Non-Highly Compensated Participant group
multiplied by 1.25, or
(2) The excess of the "Actual Deferral Percentage" for the
Highly Compensated Participant group over the "Actual Deferral
Percentage" for the Non-Highly Compensated Participant group
shall not be more than two percentage points. Additionally,
the "Actual Deferral Percentage" for the Highly Compensated
Participant group shall not exceed the `Actual Deferral
Percentage" for the Non-Highly Compensated Participant group
multiplied by 2. The provisions of Code Section 401(k)(3) and
Regulation 1.401(k)-l(b) are incorporated herein by reference.
However, for Plan Years beginning after December 31, 1988, to
prevent the multiple use of the alternative method described
in (2) above and Code Section 401(m)(9)(A), any Highly
Compensated Participant eligible to make elective deferrals
pursuant to Section 11.2 and to make Employee contributions or
to receive I matching contributions under this Plan or under
any other plan maintained by the Employer or an Affiliated
Employer shall have his actual contribution ratio reduced
pursuant to Regulation 1.401(m)-2, the provisions of which are
incorporated herein by reference.
(b) For the purposes of this Section "Actual Deferral
Percentage" means, with respect to the Highly Compensated Participant
group and Non-Highly Compensated Participant group for a Plan Year, the
average of the ratios, calculated separately for each Participant in
such group, of the amount of Employer Elective Contributions and
Qualified Non-Elective Contributions allocated to each Participant's
Elective Account and Qualified Non-Elective Account for such Plan Year,
to such Participant's "414(s) Compensation" for such Plan Year. The
actual deferral ratio for each Participant and the "Actual Deferral
Percentage" for each grout), for Plan Years beginning after December
31, 1988, shall be calculated to the nearest one-hundredth of one
percent of the Participant's "414(s) Compensation". Employer Elective
Contributions allocated to each Non-Highly Compensated Participant's
Elective Account shall be reduced by Excess Deferred Compensation to
the extent such excess amounts are made under this Plan or any other
plan maintained by the Employer.
(c) For the purpose of determining the actual deferral ratio
of a Highly Compensated Participant who is subject to the Family Member
aggregation rules of Code Section 414(q)(6) because such Participant is
either a "five percent owner" of the Employer or one of the ten (10)
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Highly Compensated Employees paid the greatest "415 Compensation"
during the year, the following shall apply:
(1) The combined actual deferral ratio for the family group
(which shall be treated as one Highly Compensated Participant)
shall be the greater of: (i) the ratio determined by
aggregating Employer Elective Contributions and `414(s)
Compensation" of all eligible Family Members who are Highly
Compensated Participants without regard to family aggregation;
and (ii) the ratio determined by aggregating Employer Elective
Contributions and "414(s) Compensation" of all eligible Family
Members (including Highly Compensated Participants). However,
in applying the $200,000 limit to "414(s) Compensation" for
Plan Years beginning after December 31, 1988, Family Members
shall include only the affected Employee's spouse and any
lineal descendants who have not attained age 19 before the
close of the Plan Year.
(2) The Employer Elective Contributions and "414 (s)
Compensation" of all Family Members shall be disregarded for
purposes of determining the "Actual Deferral Percentage" of
the Non-Highly Compensated Participant group except to the
extent taken into account in paragraph (1) above.
(3) If a Participant is required to be aggregated as a member
of more than one family group in a plan, all Participants who
are members of those family groups that include the
Participant are aggregated as one family group in accordance
with paragraphs (1) and (2) above.
(d) For the purposes of this Section and Code Sections
401(a)W, 410(b) and 401(k), if two or more plans which include cash or
deferred arrangements are considered one plan for the purposes of Code
Section 401(a)(4) or 410(b) (other than Code Section 401(b)(2)(A)(ii)
as in effect for Plan Years beginning after December 31, 1988), the
cash or deferred arrangements included in such plans shall be treated
as one arrangement. In addition, two or more cash or deferred
arrangements may be considered as a single arrangement for purposes of
determining whether or not such arrangements satisfy Code Sections 401
(a) (4), 410 (b) and 401(k). In such a case, the cash or deferred
arrangements included in such plans and the plans including such
arrangements shall be treated as one arrangement and as one plan for
purposes of this Section and Code Sections 401 (a) (4), 410 (b) and 401
(k). For plan years beginning after December 31, 1989, plans may be
aggregated under this paragraph (e) only if they have the same plan
year.
Notwithstanding the above, for Plan Years beginning
after December 31, 1988, an employee stock ownership plan described in
Code Section 4975(e)(7) may not be combined with this Plan for purposes
of determining whether the employee stock ownership plan or this Plan
satisfies this Section and Code Sections 401(a)(4), 410(b) and 401(k).
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(e) For the purposes of this Section, if a Highly Compensated
Participant is a Participant under two (2) or more cash or deferred
arrangements (other than a cash or deferred arrangement which is part
of an employee stock ownership plan as defined in Code Section
4975(e)(7) for Plan Years beginning after December 31, 1988) of the
Employer or an Affiliated Employer, all such cash or deferred
arrangements shall be treated as one cash or deferred arrangement for
the purpose of determining the actual deferral ratio with respect to
such Highly -Compensated Participant. However, for Plan Years beginning
after December 31, 1988, if the cash or deferred arrangements have
different Plan Years, this paragraph shall be applied by treating all
cash or deferred arrangements ending with or within the same calendar
year as a single arrangement.
11.9 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TEST
In the event that the initial allocations of the. Employer's
Elective Contributions and Qualified Non-Elective Contributions do not satisfy
one of the tests set forth in, Section 11.4, for Plan Years beginning after
December 31, 1986, the Administrator shall adjust Excess Contributions pursuant
to the options set forth below:
(a) On or before the fifteenth day of the third month
following the end of each Plan Year, the Highly Compensated Participant
having the highest actual deferral ratio shall have his portion of
Excess Contributions distributed to him and/or at his election
recharacterized as a voluntary Employee contribution pursuant to
Section 4.7 until one of the tests set forth in Section 11.4 is
satisfied, or until his actual deferral ratio equals the actual
deferral ratio of the Highly Compensated Participant having the second
highest actual deferral ratio. This process shall continue until one of
the tests set forth in Section 11.4 is satisfied. For each Highly
Compensated Participant, the amount of Excess Contributions is equal to
the Elective Contributions and Qualified Non-Elective Contributions
made on behalf of such Highly Compensated Participant (determined prior
to the application of this paragraph) minus the amount determined by
multiplying the Highly Compensated Participant's actual deferral ratio
(determined after application of this paragraph) by his "414(s)
Compensation". However, in determining the amount of Excess
Contributions to be distributed and/or recharacterized with respect to
an affected Highly Compensated Participant as determined herein, such
amount shall be reduced by any Excess Deferred Compensation previously
distributed to such affected Highly Compensated Participant for his
taxable year ending with or within such Plan Year. Any distribution
and/or recharacterization of Excess Contributions shall be made in
accordance with the following:
(1) with respect to the distribution of Excess Contributions
pursuant to (a) above, such distribution:
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(i) may be postponed but not later than the close of
the Plan Year following the Plan Year to which they
are allocable;
(ii) shall be made first from unmatched Deferred
Compensation and, thereafter, simultaneously from
Deferred Compensation which is matched and matching
contributions which relate to such Deferred
Compensation. However, any such matching
contributions which are not vested shall be forfeited
in lieu of being distributed;
(iii) shall be made from Qualified Non-Elective
Contributions only to the extent that Excess
Contributions exceed the balance in the Participant's
Elective Account attributable to Deferred
Compensation and Employer matching contributions.
(iv) shall be adjusted for Income; and
(v) shall be designated by the Employer as a
distribution of Excess Contributions (and Income).
(2) With respect to the recharacterization of Excess
Contributions pursuant to (a) above, such recharacterized
amounts:
(i) shall be deemed to have occurred on the date on
which the last of those Highly Compensated
Participants with Excess Contributions to be
recharacterized is notified of the recharacterization
and the tax consequences of such recharacterization;
(ii) for Plan Years ending on or before August 8,
1988, may be postponed but not later than October 24,
1988;
(iii) shall not exceed the amount of Deferred
Compensation on behalf of any Highly Compensated
Participant for any Plan Year;
(iv) shall be treated as voluntary Employee
contributions for purposes of Code Section 401 (a)
(4) and Regulation 1. 401 (k) -1 (b). However, for
purposes of Sections 2.2 and 4.3(f), recharacterized
Excess Contributions continue to be treated as
Employer contributions that are Deferred
Compensation. For Plan Years beginning after December
31, 1988, Excess Contributions recharacterized as
voluntary Employee contributions shall continue to be
nonforfeitable and subject to the same distribution
rules provided for in Section 11.2(c);
(v) which relate to Plan Years ending on or before
October 24, 1988, may be treated as either Employer
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contributions or voluntary Employee contributions and
therefore shall not be subject L-0 the restrictions
of Section 11.2(c);
(vi) are not permitted if the amount recharacterized
plus voluntary Employee contributions actually made
by such Highly Compensated Participant, exceed the
maximum amount voluntary Employee contributions
(determined prior to application of Section 11.6)
that such Highly Compensated Participant is permitted
to make under the Plan in the absence of
recharacterization;
(vii) shall be adjusted for Income.
(3) Any distribution and/or recharacterization of less than
the entire amount of Excess Contributions shall be treated as
a pro rata distribution and/or recharacterization of Excess
Contributions and Income.
(4) The determination and correction of Excess Contributions
of a Highly Compensated Participant whose actual deferral
ratio is determined under the family aggregation rules shall
be accomplished as follows:
(i) If the actual deferral ratio for the Highly
Compensated Participant is determined in accordance
with Section 11. 4 (c) (1) (ii), then the actual
deferral ratio shall be reduced as required herein
and the Excess Contributions for the family unit
shall be allocated among the Family Members in
proportion to the Elective Contributions of each
Family Member that were combined to determine the
group actual deferral ratio.
(ii) If the actual deferral ratio for the Highly
Compensated Participant is determined under Section
11. 4 (c) (1) (i), then the actual deferral ratio
shall first be reduced as required herein, but not
below the actual deferral ratio of the group of
Family Members who are not Highly Compensated
Participants without regard to family aggregation.
The Excess Contributions resulting from this initial
reduction shall be allocated (in proportion to
Elective Contributions) among the Highly Compensated
Participants whose Elective Contributions were
combined to determine the actual deferral ratio. If
further reduction is still required, then Excess
Contributions resulting from this further reduction
shall be determined by taking into account the
contributions of all Family Members and shall be
allocated among them in proportion to their
respective Elective Contributions.
(b) Within twelve (12) months after the end of the Plan Year,
the Employer shall make a special Qualified Non-Elective Contribution
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on behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy one of the tests set forth in Section 11.4(a).
Such contribution shall be allocated to the Participant's Qualified
Non-Elective Account of each Non-Highly Compensated Participant in the
same proportion that each Non-Highly Compensated Participant's
Compensation for the year bears to the total Compensation of all
Non-Highly Compensated Participants.
(c) For purposes of this Section, "Income" means the income or
loss allocable to Excess Contributions which shall equal the sum. of
the allocable gain or loss for the Plan Year and the allocable gain or
loss for the period between the end of the Plan Year and the date of
distribution ("gap period"). The income or loss allocable to Excess
Contributions for the Plan Year and the "gap period" is calculated
separately and is determined by multiplying the income or loss for the
Plan Year or the "gap period" by a fraction. The numerator of the
fraction is the Excess Contributions for the Plan Year. The denominator
of the fraction is the total of the Participant's Elective Account
attributable to Elective Contributions and the Participant's Qualified
Non-Elective account as of the end of the Plan Year or the "gap
period", reduced by the gait allocable to such total amount for the
Plan Year or the "gap period" and increased by the loss allocable to
such total amount for the Plan Year or the "gap period".
In lieu of the "fractional method' described above, a
"safe harbor method" may be used to calculate the allocable Income for
the "gap period". Under such "safe harbor method", allocable Income for
the "gap period" shall be deemed to equal ten percent (10%) of the
Income allocable to Excess Contributions for the Plan Year of the
Participant multiplied by the number of calendar months in the "gap
period". For purposes of determining the number of calendar months in
the "gap period", a distribution occurring on or before the
fifteenth day of the month shall be treated as having been made on the
last day of the preceding. month and a distribution occurring after
such fifteenth day shall be treated as having been made on the first
day of the next subsequent month.
Notwithstanding the above, for Plan Years which began
in 1987, Income during the "gap period" shall not be taken into
account.
(d) Any amounts not distributed or recharacterized within 2
1/2 months after the end of the Plan Year shall subject to the 10%
Employer excise tax imposed by Code Section 4979.
11.11 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) The "Actual Contribution Percentage, for Plan Years
beginning after the later of the Effective Date of this Plan or
December 31, 1986, for the Highly Compensated Participant group shall
not exceed the greater of:
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(1) 125 percent Of such percentage for the Non-Highly
Compensated Participant group; or
(2) the lesser of 200 Percent of such percentage for the
Non-Highly Compensated Participant group, or such percentage
for the Non-Highly Compensated Participant group plus 2
percentage points. However, for Plan Years beginning after
December 31, 1988, to prevent the multiple use of the
alternative method described in this paragraph and Code
Section 401(m)(9)(A), any Highly Compensated Participant
eligible to make elective deferrals pursuant to Section 11.2
or any other cash or deferred arrangement maintained by the
Employer or an Affiliated Employer and to make Employee
contributions or to receive matching contributions under any
plan maintained by the Employer or an Affiliated Employer
shall have his actual contribution ratio reduced pursuant to
Regulation 1.401(m)2. The provisions of Code Section 401 (m)
and Regulations 1.401(m)-l(b) and 1.401(m)-2 are incorporated
herein by reference.
(b) For the purposes of this Section and Section 11.7, "Actual
Contribution Percentage" for a Plan Year means, with respect to the
Highly Compensated Participant group and No Highly Compensated
Participant group, the average of the ratios (calculated separately for
each Participant in each group) of:
(1) the sum of Employer matching contributions made pursuant
to Section 11.1(b) (to the extent such matching contributions
are not used to satisfy the tests set forth in Section 11.4),
voluntary Employee contributions made pursuant to Section 4.7
and Excess Contributions recharacterized as voluntary Employee
contributions pursuant to Section 11.5 on behalf of each such
Participant for such Plan Year; to
(2) the Participant's "414(s) Compensation" for such Plan
Year.
(c) For purposes of determining the "Actual Contribution
Percentage" and the amount of Excess Aggregate Contributions pursuant
to Section 11. 7 (d), only Employer matching contributions contributed
to the Plan prior to the end of the succeeding Plan Year shall be
considered. In addition, the Administrator may elect to take into
account, with respect to Employees eligible to have Employer matching
contributions made pursuant to Section 11.1(b) or voluntary Employee
contributions made pursuant to Section 4.7 allocated to their accounts,
elective deferrals (as defined in Regulation 1.402(g)-l(b)) and
qualified non-elective contributions (as defined in Code Section 401
(m) (4) (C) ) contributed to any plan maintained by the Employer. Such
elective deferrals and qualified non-elective contributions shall be
treated as Employer matching contributions subject to Regulation 1. 401
(m) -1 (b) (2) which is incorporated herein by reference. However, for
Plan Years beginning after December 31, 1988, the Plan Year must be the
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same as the plan year of the plan to which the elective deferrals and
the qualified non-elective contributions are made.
(d) For the purpose of determining the actual contribution
ratio of a Highly Compensated Employee who is subject to the Family
Member aggregation rules of Code Section 414 (q) (6) because such
Employee is either a "five owner" of the Employer or one of the ten
(10) Highly Compensation" percent Compensated Employees paid the
greatest "415 during the year, the following shall apply:
(1) The combined actual contribution "ratio for the
family group (which shall be treated as one Highly
Compensated Participant) shall be the greater of: (i)
the ratio determined by aggregating Employer matching
contributions made pursuant to Section 11. 1 (b) (to
the extent such matching contributions are not used
to satisfy the tests set forth in Section 11.4),
voluntary Employee contributions made pursuant to
Section 4.7, Excess Contributions recharacterized as
voluntary.. Employee contributions pursuant to
Section 11.5 and "414(s) Compensation" of all
eligible Family Members who are Highly Compensated
Participants without regard to family aggregation;
and (ii) the ratio determined by aggregating Employer
matching contributions made pursuant to Section
11.1(b) (to the extent such matching contributions
are not used to satisfy the tests set forth in
Section 11.4), voluntary Employee contributions made
pursuant to Section 4.7, Excess Contributions
recharacterized as voluntary Employee contributions
pursuant to Section 11.5 and 0414(s) Compensation" of
all eligible Family Members (including Highly
Compensated Participants). However, in applying the
$200,000 limit to "414(s) Compensation" for Plan
Years beginning after December 31, 1988, Family
Members shall include only the affected Employee's
spouse and any lineal descendants who have not
attained age 19 before the close of the Plan Year.
(2) The Employer matching contributions made pursuant
to Section 11.1(b) (to the extent such matching
contributions are not used to satisfy the tests set
forth in Section 11.4), voluntary Employee
contributions made pursuant to Section 4.7, Excess
Contributions recharacterized as voluntary Employee
Contributions pursuant to Section 11.5 and "414(s)
Compensation" of all Family Members shall be
disregarded for purposes of determining the "Actual
Contribution Percentage" of the Non-Highly
Compensated Participant group except to the extent
taken into account in paragraph (1) above.
(3) If a Participant is required to be aggregated as a member
of more than one family group in a plan, all Participants who
are members of those family groups that include the
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Participant are aggregated as one family group in accordance
with paragraphs (1) and (2) above.
(e) For purposes of this Section and Code Sections 401 (a)(4),
410 (b) and 401 (m), if two or more plans of the Employer to which
matching contributions, Employee contributions, or both, are made are
treated as one plan for purposes of Code Sections 401 (a) (4) or 410
(b) (other than the average benefits test under Code Section 410 (b)
(2) (A) (ii) as in effect for Plan Years beginning after December 31,
1988), such plans shall be treated as one plan. In addition, two or
more plans of the Employer to which matching contributions, Employee
contributions, or both, are made may be considered as a single plan for
purposes of determining whether or not such plans satisfy Code Sections
401(a)(4), 410(b) and 401(m). In such a case, the aggregated plans must
satisfy this Section and Code Sections 401(a)(4), 410(b) and 401(m) as
though such aggregated plans were a single plan. For plan years
beginning after December 3i, 1989, plans may be aggregated under this
paragraph only if they have the same plan year.
Notwithstanding the above, for Plan Years beginning
after December 31, 1988, an employee stock ownership plan described in
Code Section 4975(e)(7) may not be aggregated with this Plan for
purposes of determining whether the employee stock ownership plan or
this Plan satisfies this Section and Code Sections 401(a)(4), 410(b)
and 401(m).
(f) If a Highly Compensated Participant is a Participant under
two or more plans (other than an employee stock ownership plan as
defined in Code Section-4975(e)(7) for Plan Years beginning after
December 31, 1988) which are maintained by the Employer or an
Affiliated Employer to which matching contributions, Employee
contributions, or both, are made, all such contributions on behalf of
such Highly Compensated Participant shall be aggregated for purposes of
determining such Highly Compensated Participant's actual contribution
ratio. However, for Plan Years beginning after December 31, 1988, if
the plans have different plan years, this paragraph shall be applied by
treating all plans ending with or within the same calendar year as a
single plan.
(g) For purposes of Section 11.6(a) and 11.7, a Highly
Compensated Participant and a Non-Highly Compensated Participant shall
include any Employee eligible to have matching contributions made
pursuant to Section 11.l(b) (whether or not a deferred election was
made or suspended pursuant to Section 11.2(e)) allocated to his account
for the Plan Year or to make salary deferrals pursuant to Section 1l.2
(if the Employer uses salary deferrals to satisfy the provisions of
this Section) or voluntary Employee contributions pursuant to Section
4.7 (whether or not voluntary Employee contributions are made)
allocated to his account for the Plan Year.
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(h) For purposes of this Section, "Matching Contribution"
shall mean an Employer contribution made to the Plan, or to a contract
described in Code Section 403 (b) on behalf of a Participant on account
of an Employee contribution made by such Participant, or on account of
a participant's deferred compensation, under a plan maintained by the
Employer.
11.13 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event that for Plan Years beginning after December
31, 1986, the "Actual Contribution Percentage" for the Highly
Compensated Participant group exceeds the "Actual Contribution
Percentage" for the Non-Highly Compensated Participant group pursuant
to Section 11.6(a), the Administrator (on or before the fifteenth day
of the third month following the end of the Plan Year, but in no event
later than the close of the following Plan Year) shall direct the
Trustee to distribute to the Highly Compensated Participant having the
highest actual contribution ratio, his portion of Excess Aggregate
Contributions (and Income allocable to such contributions) or, if
forfeitable, forfeit such non-Vested Excess Aggregate Contributions
attributable to Employer matching contributions (and Income allocable
to such Forfeitures) until either one of the tests set forth in Section
11.6(a) is satisfied, or until his actual contribution ratio equals the
actual contribution ratio of the Highly Compensated Participant having
the second highest actual contribution ratio. This process shall
continue until one of the tests set forth in Section 11.6(a) is
satisfied. The distribution and/or Forfeiture of Excess Aggregate
Contributions shall be made in the following order:
(1) Employer matching contributions distributed and/or
forfeited pursuant to Section 11.5(a)(1);
(2) Voluntary Employee contributions including Excess
Contributions recharacterized as voluntary Employee
contributions pursuant to Section 11.5(a)(2111
(3) Remaining Employer matching contributions.
(b) Any distribution or Forfeiture 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
Income. Distribution of Excess Aggregate Contributions shall be
designated by the Employer as a distribution of Excess Aggregate
Contributions (and income). Forfeitures of Excess Aggregate
Contributions shall be treated in accordance with Section 4.3. However,
no such Forfeiture may be allocated to a Highly Compensated Participant
whose contributions are reduced pursuant to this Section.
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(c) Excess Aggregate Contributions attributable to amounts
other than voluntary Employee contributions, including forfeited
matching contributions, shall be treated as Employer contributions for
purposes of Code Sections 404 and 415 even if distributed from the
Plan.
(d) For the purposes of this Section and Section 11.6, "Excess
Aggregate Contributions" means, with respect to any Plan Year, the
excess of:
(1) the aggregate amount of Employer matching contributions
made pursuant to Section 11.1(a) (to the extent such
contributions are taken into account pursuant to Section
11.6(a)), voluntary Employee contributions made pursuant to
Section 4.7, Excess Contributions recharacterized as voluntary
Employee contributions pursuant to Section 11.5 and any
Qualified Non-Elective Contributions or elective deferrals
taken into account pursuant to Section 11.6(c) actually made
on behalf of the Highly Compensated Participant group for such
Plan Year, over (2) the maximum amount of such contributions
permitted under the limitations of Section 11.6(a).
(e) For each Highly Compensated Participant, the amount of
Excess Aggregate Contributions is equal to the total Employer matching
contributions made pursuant to Section 11.1(b) (to the extent taken
into account pursuant to Section 11.06(a)), voluntary Employee
contributions made pursuant to Section 4.7, Excess Contributions
recharacterized as voluntary Employee contributions pursuant to Section
11.5 and any Qualified Non-Elective Contributions or elective deferrals
taken into account pursuant to Section 11.6(c) on behalf of the Highly
Compensated Participant (determined prior to the application of
this paragraph) minus the amount determined by multiplying the Highly
Compensated Participant's actual contribution ratio (determined after
application of this paragraph) by his "414(s) Compensation)". The
actual contribution ratio must be rounded to the nearest one-hundredth
of one percent for Plan Years beginning after December 31, 1988. In no
case shall the amount of Excess Aggregate Contribution with respect to
any Highly Compensated Participant exceed the amount of Employer
matching contributions made pursuant to Section 11.1(b) (to the extent
taken into account pursuant to Section 11.6(a)), voluntary Employee
contributions made pursuant to Section 4.7, Excess Contributions
recharacterized as voluntary Employee contributions pursuant to Section
11.5 and any Qualified Non-Elective Contributions or elective deferrals
taken into account pursuant to Section 11.6(c) on behalf of such Highly
Compensated Participant for such Plan Year.
(f) The determination of the amount of Excess Aggregate
Contributions with respect to any Plan Year shall be made after first
determining the Excess Contributions, if any, to be treated as
voluntary Employee contributions due to recharacterization for the plan
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year of any other qualified cash or deferred arrangement (as defined in
Code Section 401(k)) maintained by the Employer that ends with or
within the Plan Year or which are treated as voluntary Employee
contributions due to recharacterization pursuant to Section 11.5.
(g) The determination and correction of Excess Aggregate
Contributions of a Highly Compensated Participant whose actual
contribution ratio is determined under the' family aggregation rules
shall be accomplished as follows:
(1) If the actual contribution ratio for the Highly
Compensated Participant is determined in accordance with
Section 11.6(d)(1), then the actual contribution ratio shall
be reduced and the Excess Aggregate Contributions for the
family unit shall be allocated among the Family Members in
proportion to the sum of Employer matching contributions made
pursuant to Section 11.1(b) (to the extent taken into account
pursuant to Section 11.6(a)), voluntary Employee contributions
made pursuant to Section 4.7, Excess Contributions
recharacterized as voluntary Employee contributions pursuant
to Section 11.5 and any Qualified Non-Elective Contributions
or elective deferrals taken into account pursuant to Section
11.6(c) of each Family Member that were combined to determine
the group actual contribution ratio.
(2) If the actual contribution ratio for the Highly
Compensated Participant is determined under Section
11.6(d)(2), then the actual contribution ratio shall first be
reduced, as required herein, but not below the actual
contribution ratio of the group of Family Members who are not
Highly Compensated Participants without regard to family
aggregation. The Excess Aggregate Contributions resulting from
this initial reduction shall be allocated among the Highly
Compensated Participants whose Employer matching contributions
made pursuant to Section 11.1(b) (to the extent taken into
account pursuant to Section 11.06(a)), voluntary Employee
contributions made pursuant to Section 4.7, Excess
Contributions recharacterized as voluntary Employee
contributions pursuant to Section 11.5 and any Qualified
Non-Elective Contributions or elective deferrals taken into
account pursuant to Section 11.6(c) were combined to determine
the actual contribution ratio. If further reduction is still
required, then Excess Aggregate Contributions resulting from
this further reduction shall be determined by taking into
account the contributions of all Family Members and shall be
allocated among them in proportion to their respective
Employer matching contributions made pursuant to Section
11.1(b) (to the extent taken into account pursuant to Section
11.6(a)), voluntary Employee contributions made pursuant to
Section 4.7, Excess Contributions recharacterized as voluntary
Employee contributions pursuant to Section 11.5 and any
Qualified Non-Elective Contributions or elective deferrals
taken into account pursuant to Section 11.6(c).
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(h) Notwithstanding the above, within twelve (12) months after
the end of the Plan Year, the Employer may make a special Qualified
Non-Elective Contribution on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy one of the tests set
forth in Section 11.6. Such contribution shall be allocated to the
Participant's Qualified Non-Elective Account of each Non-Highly
Compensated Participant in the same proportion that each Non-Highly
Compensated Participant's Compensation for the year bears to the total
Compensation of all Non-Highly Compensated Participants. A separate
accounting shall be maintained for the purpose of excluding such
contributions from the "Actual Deferral Percentage" tests pursuant to
Section 11.4.
(i) For purposes of this Section, "Income" means the
income or loss allocable to Excess Aggregate Contributions which shall
equal the sum of the allocable gain or loss for the Plan Year and the
allocable gain or loss for the period between the end of the Plan Year
and the date of distribution ("gap period"). The income or loss
allocable to Excess Aggregate Contributions for the Plan Year and the
"gap period" is calculated separately and is determined by the income
or loss for the Plan Year or the "gap period" by a fraction. The
numerator of the fraction is the Excess Aggregate Contributions for the
Plan Year. The denominator of the fraction is the total Participant's
Account and Voluntary Contribution Account attributable to Employer
matching contributions subject to Section 11.6, voluntary Employee
contributions made pursuant to Section 4.7, and any Qualified
Non-Elective Contributions and elective deferrals taken into account
pursuant to Section 21 6(c) as of the end of the Plan Year or the "gap
period", reduced by the gain allocable to such total amount for the
Plan Year or the "gap period" and increased by the loss allocable to
such total amount for the Plan Year or the "gap period".
In lieu of the "fractional method" described above, a
"safe harbor method" may be used to calculate the allocable Income for
the "gap period". Under such "safe harbor method", allocable Income for
the "gap period" shall be deemed to equal ten percent (10%) of the
Income allocable to Excess Aggregate Contributions for the Plan Year of
the Participant multiplied by the number of calendar months in the "gap
period". For purposes of determining the number of calendar months in
the "gap period", a distribution occurring on or before the fifteenth
day of the month shall be treated as having been made on the last day
of the preceding month and a distribution occurring after such
fifteenth day shall be treated as having been made on the first day of
the next subsequent month.
The Income allocable to Excess Aggregate
Contributions resulting from recharacterization of Elective
Contributions shall be determined and distributed as ii such
recharacterized Elective Contributions had been distributed as Excess
Contributions.
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Notwithstanding the above, for Plan Years which began
in 1987, Income during the "gap period" shall not be taken into
account.
11.15 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) The Administrator, at the election of the
Participant, shall direct the Trustee to distribute to any
Participant in any one Plan Year up to the lesser of (1) 100%
of his accounts as specified in the Adoption Agreement valued
as of the last Anniversary Date or other valuation date or (2)
the amount necessary to satisfy the immediate and heavy
financial need of the Participant. Any distribution made
pursuant to this Section shall be deemed to be made as of the
first day of the Plan Year or, if later, the valuation date
immediately preceding the date of distribution, and the
account from which the distribution is made shall be reduced
accordingly. Withdrawal under this Section shall be authorized
only if the distribution is on account of one of the following
or any other items permitted by the Internal Revenue Service:
(1) Medical expenses described in Code Section 213(d)
incurred by the Participant, his spouse, or any of
his dependents (as defined in Code Section 152);
(2) The purchase (excluding mortgage payments) of a
principal residence `or the Participant;
(3) Payment of tuition for the next semester or
quarter of post-secondary education for the
Participant, his spouse, children, or dependents; or
(4) The need to prevent the eviction of the
Participant from his principal residence or
foreclosure on the mortgage of the Participant's
principal residence.
(b) No such distribution shall be made from the
Participant's Account until such Account has become fully
Vested.
(c) No distribution shall be made pursuant to this
Section unless the Administrator, based upon the Participant's
representation and such other facts as are known to the
Administrator, determines that all of the following conditions
are satisfied:
(1) The distribution is not in excess of the amount
of the immediate and heavy financial need of the
Participant;
104
<PAGE>
(2) The Participant has obtained all distributions,
other than hardship distributions, and all nontaxable
loans currently available under all plans maintained
by the Employer;
(3) The Plan, and all other plans maintained by the
Employer, provide that the Participant's elective
deferrals and voluntary Employee contributions will
be suspended for at least twelve (12) months after
receipt of the hardship distribution; and
(4) The Plan, and all other plans maintained by the
Employer, provide that the Participant may not make
elective deferrals for the Participant's taxable year
immediately following the taxable year of the
hardship distribution in excess of the applicable
limit under Code Section 402(g) for such next taxable
year less the amount of such Participant's elective
deferrals for the taxable year of the hardship
distribution.
(d) Notwithstanding the above, distributions from the
Participant's Elective Account and Qualified Non-Elective
account pursuant to this section shall be limited solely to
the Participant's Deferred compensation and any income
attributable "thereto credited to the Participant's Elective
account as of December 31, 1988.
(e) Any distribution made pursuant to this Section
shall be made in a manner which is consistent with and
satisfies the Provisions of Section 6.5, including, but not
limited to, all notice and consent requirements of Code
Sections 411(a)(11) and 417 and the Regulations thereunder.
105
<PAGE>
AMENDMENT NUMBER ONE TO
W.E. STANLEY & COMPANY, INC. REGIONAL PROTOTYPE
DEFINED CONTRIBUTION PLAN & TRUST
W.E. Stanley & Company, Inc. Regional Prototype Defined Contribution Plan &
Trust is hereby amended as follows:
1. Section 1.9 is amended by replacing the first paragraph with the following
paragraphs:
"Compensation" with respect to any Participant means one of the following
as elected in the Adoption Agreement. However, compensation for any
Self-Employed Individual shall be equal to his Earned Income.
(i) Information required to be reported under sections 6041, 6051, and
6052 (Wages, Tips and Other Compensation Box on Form W-2). Compensation is
defined as wages as defined in section 3401(a) and all other payments of
compensation to an employee by the employer (in the course of the employer's
trade or business) for which the employer is required to furnish the employee a
written statement under sections 6041(d) and 6051(a) (3) of the Code.
Compensation must be determined without regard to any rules under section
3401(a) that limit the remuneration included in wages based on the nature or
location of the employment or the services performed (such as the exception for
agricultural labor in section 3401(a) (2)).
(ii) Section 3401 (a) wages. Compensation is defined as wages within
the meaning of section 3401 (a) for the purposes of income tax withholding at
the source but determined without regard to any rules that limit the
remuneration included in wages based on the nature or location of the employment
or the services performed (such as the exception for agricultural labor in
section 3401(a) (2)).
(iii) 4 15 safe harbor compensation. Compensation is defined as wages,
salaries, and fees for professional services and other amounts received (without
regard to whether or not an amount is paid in cash) for personal services
actually rendered in the course of employment with the employer maintaining the
plan to the extent that the amounts are includible in gross income (including,
but not limited to, commissions paid salesmen, compensation for services ?n the
basis of a percentage of profits, commissions on insurance premiums, tips,
bonuses, fringe benefits and reimbursements or other expense allowances under a
nonaccountable plan (as described in 1.62(c)), and excluding the following:
a. Employer contributions to a plan of deferred compensation
which are not includible in the employee's gross income for the taxable year in
which contributed, or employer contributions under a simplified employee pension
plan to the extent such contributions are deductible by the employee, or any
distributions from a plan of deferred compensation;
b. Amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by the employee either
becomes freely transferable or is no longer subject to a substantial risk of
forfeiture;
(c) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option; and
(d) Other amounts which received special tax benefits, or
contributions made by the employer (whether or not under a salary reduction
agreement) towards the purchase of an annuity contract described in section
403(b) of the Code (whether or not the contributions are actually excludable
from the gross income of the employee).
If, in connection with the adoption of this or any other amendment, the
definition of Compensation has been modified, then, f or Plan Years prior to the
Plan Year which includes the adoption date of such amendment, Compensation means
compensation determined pursuant to the Plan then in effect.
2. Section 1.14 is amended in its entirety to read as follows:
"Elective Contribution" means the Employer's contributions to the Plan
that are made pursuant to the Participant's deferral election pursuant to
Section 11.2, excluding any such amounts distributed as "excess annual
additions" pursuant to Section 4.4. In addition, if selected in E3 of the
Adoption Agreement, the Employer's matching contribution shall or shall not be
considered an Elective Contribution for purposes of the Plan, as provided in
Section 11.1(b). Elective Contributions shall be subject to the requirements of
Sections 11.2(b) and 11.2(c) and shall further be required to satisfy the
discrimination requirements of Regulation 1. 4 01 (k) -1 (b) (3), the
provisions of which are specifically incorporated herein by reference.
3. Section 1.20 is amended in its entirety to read as follows:
"Excess Deferred Compensation" means, with respect to any taxable year
of a Participant, the excess of the aggregate amount of such Participant's
Deferred Compensation and the elective deferrals pursuant to Section 11.2(f)
actually made on behalf of such Participant f or such taxable year, over the
dollar limitation provided for in Code Section 402(g), which is incorporated
herein by reference. Excess Deferred Compensation shall be treated as an "annual
addition" pursuant to Section 4.4 when contributed to the Plan unless
distributed to the affected Participant not later than the first April 15th
following the close of the Participant's taxable year.
4. Section 1.26 is amended in its entirety to read as follows:
"414(s) Compensation" with respect to any Employee means his
Compensation as defined in Section 1.9. However, for purposes of this Section,
Compensation shall be Compensation paid and, if selected in the Adoption
Agreement, shall only be recognized as of an Employee's effective date of
2
<PAGE>
participation. If, in connection with the adoption of this or any other
amendment, the definition of 11414 (s) Compensation" has been modified, then,
for Plan Years prior to the Plan Year which includes the adoption date of such
amendment, 11414(s) Compensation" means compensation determined pursuant to the
Plan then in effect.
5. Section 1.27 (11415 Compensation") is amended by the addition of the
following paragraph:
If, in connection with the adoption of this or any other amendment, the
definition of 11415 Compensation" has been modified, then, for Plan Years prior
the Plan Year which includes the adoption date of such amendment, 11415
Compensation" means compensation determined pursuant to the Plan then in effect.
6. Section 4.4 (a) (4) and 4.4 (a) (4) (i) are amended to read as follows:
(4) If there is an excess amount pursuant to Section 4.4(a)(2) or
Section 4.5, the excess will be disposed of in one of the
following manners, as uniformly determined by the Plan
Administrator for all Participants similarly situated:
(i) Any Deferred Compensation or nondeductible Voluntary
Employee Contributions, to the extent they would
reduce the Excess Amount will be distributed to the
Participant;
7. Section 4.4(f) (2) is amended in its entirety to read as follows:
Compensation means a Participant's Compensation as elected in the
Adoption Agreement. However, regardless of any selection made in the Adoption
Agreement, 11415 Compensation" shall exclude compensation which is not currently
includible in the Participant's gross income by reason of the application of
Code Sections 125, 4 0 2 (a) (8), 4 02 (h) (1) (B) or 4 0 3 (b).
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.
Notwithstanding the preceding sentence, compensation f or a participant
in a defined contribution plan who is permanently and totally disabled (as
defined in section 22 (e) (3) of the Internal Revenue Code) is the compensation
such participant would have received for the limitation year if the participant
had been paid at the rate of compensation paid immediately before becoming
permanently and totally disabled; such imputed compensation f or the disabled
participant may be taken into account only if the participant is not a Highly
Compensated Employee and contributions made on behalf of such participant are
nonforfeitable when made.
8. Section 4.5(a) is amended in its entirety to read as follows:
3
<PAGE>
(a) If as a result of the allocation of Forfeitures, a reasonable error
in estimating a Participant's annual Compensation, a reasonable error in
determining the amount of elective deferrals (within the meaning of Code Section
402(g) (3)) that may be made with respect to any Participant under the limits of
Section 4.4, or other facts and circumstances to which Regulation 1.415-6(b) (6)
shall be applicable, the "annual additions" under this Plan would cause the
maximum provided in Section 4.4 to be exceeded, the Administrator shall treat
the excess in accordance with Section 4.4(a)(4).
9. Sections 6.11(a)(1) and (a)(4) are amended in their entirety to read as
follows:
(1) Medical expenses described in Code Section 213(d) incurred by the
Participant, his spouse, or any of his dependents (as defined in Code Section
152) or expenses necessary for these persons to obtain medical care;
(4) Payment of tuition and related educational fees for the next 12
months of post-secondary education f or the Participant, his spouse, children,
or dependents;
10. Section 7. 10 is amended by the addition of the following paragraphs:
(a) Notwithstanding any provision of the plan to the contrary, with
respect to distributions made after December 31, 1992, a Participant shall be
permitted to elect to have any "eligible rollover distribution" transferred
directly to an "eligible retirement plan" specified by the Participant. The Plan
provisions otherwise applicable to distributions continue to apply to the direct
transfer option. The Participant shall, in the time and manner prescribed by the
Administrator, specify the amount to be directly transferred and the "eligible
retirement plan" to receive the transfer. Any portion of a distribution which is
not transferred shall be distributed to the Participant.
(b) For purposes of this Section, the term "eligible rollover
distribution" means any distribution other than a distribution of substantially
equal periodic payments over the life or life expectancy of the Participant (or
joint life or joint life expectancies of the Participant and the designated
beneficiary) or a distribution over a period certain of ten years or more.
Amounts required to be distributed under Code Section 401(a) (9) are not
eligible rollover distributions. The direct transfer option described in
subsection (a) applies only to eligible rollover distributions which would
otherwise be includible in gross income if not transferred.
(c) For purposes of this Section, the term "eligible retirement plan"
means an individual retirement account as described in Code Section 408(a), an
individual retirement annuity as described in Code Section 408(b), an annuity
plan as described in Code Section 4 03 (a), or a defined contribution plan as
described in Code Section 401(a) which is exempt from tax under Code Section
501(a) and which accepts rollover distributions.
4
<PAGE>
(d) The election described in subsection (a) also applies to the
surviving spouse after the Participant's death; however, distributions to the
surviving spouse may only be transferred to an individual retirement account or
individual retirement annuity. for purposes of subsection (a), a spouse or
former spouse who is the alternate payee under a qualified domestic relations
order as defined in Code Section 414 (p) will be treated as the Participant.
11. Section 11. 2 (d) is amended in its entirety to read as follows:
(d) In any Plan Year beginning after December 31, 1986, a Participant's
Deferred Compensation made under this Plan and all other plans, contracts or
arrangements of the employer maintaining this Plan shall not exceed the
limitation imposed by Code Section 402(g), as in effect for the calendar year in
which such Plan Year began. If such dollar limitation is exceeded solely from
elective deferrals made under this Plan or any other Plan maintained by the
Employer, a Participant will be deemed to have notified the Administrator of
such excess amount which shall be distributed in a manner consistent with
Section 11.2(f). This dollar limitation shall be adjusted annually pursuant to
the method provided in Code Section 415(d) in accordance with Regulations.
12. Section 11.2(f) is amended by the addition of the following paragraph
after paragraph (f)(3) to read as follows:
Any distribution under this Section shall be made first from unmatched
Deferred Compensation and, thereafter, simultaneously from Deferred Compensation
which is matched and matching contributions which relate to such Deferred
Compensation. However, any such matching contributions which are not Vested
shall be forfeited in lieu of being distributed.
13. Section 11.2(f) is amended by the addition of the following paragraph
as the second to the last paragraph of such subsection:
Notwithstanding the above, for any distribution under this Section
which is made after August 15, 1991, such distribution shall not include any
income for the "gap period". Further provided, for any distribution under this
Section which is made after August 15, 1991, the amount if Income may be
computed using a reasonable method that is consistent with Section 4.3(c),
provided such method is used consistently for all Participants and for all such
distributions for the Plan Year.
14. Section 11.5(c) is amended by the addition of the following paragraph
as the second to the last paragraph of such subsection:
Notwithstanding the above for any distribution under this Section which
is made after August 15, 1994, such distribution shall not include any income
for the "gap period". Further provided, for any distribution under this Section
which is made after August 15, 1991, the amount of Income may be computed using
5
<PAGE>
a reasonable method that is consistent with Section 4.3(c), provided such method
is used consistently for all Participants and for all such distributions for the
Plan Year.
15. Section 11.6(c) is amended in its entirety to read as follows:
(c) For purposes of determining the "Actual Contribution Percentage"
and the amount of Excess Aggregate Contributions pursuant to Section 11.7(d),
only Employer matching contributions (excluding matching contributions forfeited
or distributed pursuant to Section 11.2(f), 11.5(a) or 11.7(a)) contributed to
the Plan prior to the end of the succeeding Plan Year shall be considered. In
addition, the Administrator may elect to take into account, with respect to
Employees eligible to have Employer matching contributions made pursuant to
Section 11.1(b) or voluntary Employee contributions made pursuant to Section 4.7
allocated to their accounts, elective deferrals (as defined in Regulation 1.402
(g)-1(b)) and qualified non-elective contributions (as defined in Code Section
401(m)(4)(C)) contributed to any plan maintained by the Employer. Such elective
deferrals and qualified non-elective contributions shall be treated as Employer
matching contributions subject to Regulation 1. 401 (m) -1 (b) (2) which is
incorporated herein by reference. However, for Plan Years beginning after
December 31, 1988, the Plan Year must be the same as the plan year of the plan
to which the elective deferrals and the qualified non-elective contributions are
made.
16. Section 11.7(i) is amended by the addition of the following paragraph
as the second to the last paragraph of such subsection:
Notwithstanding the above, f or any distribution under this Section
which is made after August 15, 1991, such distribution shall not include any
Income for the "gap period". Further provided, for any distribution under this
Section which is made after August 15, 1991, the amount of Income may be
computed using a reasonable method is consistent with Section 4.3(c), provided
such method is used consistently for all Participants and for all such
distributions for the Plan Year.
17. Sections 11.8(a)(1) and (a)(3) are amended in their entirety to read as
follows:
(1) Medical expenses described in Code Section 213(d) incurred by the
Participant, his spouse, or any of his dependents (as defined in Code Section
152) or expenses necessary for these persons to obtain medical care;
(3) Payment of tuition and related educational fees for the next 12 months of
post-secondary education f or the Participant, his spouse, children, or
dependents; or
18. Section 11. 8 (c) (1) is amended in its entirety to read as follows:
(1) The distribution is not in excess of the amount of the immediate
and heavy financial need of the Participant. The amount of the immediate and
heavy financial need may include any amounts necessary to pay any federal, state
or local income taxes or penalties reasonable anticipated to result from the
distribution.
6
<PAGE>
19. Article XI is amended by the addition of the following:
Notwithstanding anything in this Article to the contrary, effective as
of the Plan Year in which this amendment becomes effective, the Actual Deferral
Percentage Test and the Actual Contribution Percentage Test shall be applied
(and adjusted) by applying the Family Member aggregation rules of Code Section
414(q)(6).
20. Section Ela. of the Adoption Agreement is amended in its entirety to
read as follows:
Compensation with respect to any Participant means:
1. ( ) Wages, Tips and other Compensation
(Box 1 on Form W-2).
2. ( ) Section 3401(a) wages (wages for withholding
purposes.
3. ( ) 415 Safe harbor compensation.
AND Compensation
( ) shall
( ) shall not
exclude (even if includible in gross income) reimbursements or other
expense allowances, fringe benefits (cash or noncash), moving expenses,
deferred compensation, and welfare benefits.
21. Section E3 of the 401(k) Adoption Agreement(s) is amended by the addition
of the following:
( ) Notwithstanding anything in the Plan to the contrary, all
matching contributions which relate to distributions of Excess
Deferred Compensation, Excess Contributions and Excess
Aggregate Contributions shall be Forfeited. (Select this
option only if it is applicable.)
NOTE: THIS AMENDMENT ONLY NEEDS TO BE EXECUTED BELOW BY THE EMPLOYER IF THE PLAN
IS BEING AMENDED TO UTILIZE THE MODIFICATIONS MADE TO SECTION El OR E3 OF THE
ADOPTION AGREEMENT.
IN WITNESS WHEREOF, the Employer hereby causes this amendment
to be executed on this _____ day of __________, 19_.
EMPLOYER: PARTICIPATING EMPLOYER:
________________________________________
7
<PAGE>
(enter name) (enter name)
By:____________________________________ By: _______________________
8
<PAGE>
AMENDMENT
TO
W.E. STANLEY & COMPANY, INC. REGIONAL PROTOTYPE
DEFINED CONTRIBUTION PLAN & TRUST
1. Section 1.9 is amended by the addition of the following:
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 193 annual compensation limit. The OBRA 193
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 Internal Revenue 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 193 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 193 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 193 annual compensation limit in effect for that
prior determination period. For this purpose, for determination periods
beginning before the first day of the plan year beginning on or after
January 1, 1994, the OBRA 193 annual compensation limit is $150,000.
2. Section 6.13 is amended by the addition of the following:
If a distribution is one to which Section 401(a) (11) and 417
of the Internal Revenue Code do not apply, such distribution may
commence less than 30 days after the notice required under Section
1.411(a)-11(c) of the Income Tax Regulations is given, provided that:
(1) the plan administrator clearly informs the participant
that the participant has a right to a period of at least 30 days after
9
<PAGE>
receiving the notice to consider the decision of whether or not to
elect a distribution (and, if applicable, a particular distribution
option), and
(2) the participant, after receiving the notice, affirmatively
elects a distribution.
3. Section 7.10 is amended by the addition of the following:
(a) Notwithstanding any provision of the plan to the contrary,
with respect to distributions made after December 31, 1992, a
Participant shall be permitted to elect to have any "eligible rollover
distribution" transferred directly to an "eligible retirement plan"
specified by the Participant. The Plan provisions otherwise applicable
to distributions continue to apply to the direct transfer option. The
Participant shall, in the time and manner prescribed by the
Administrator, specify the amount to be directly transferred and the
"eligible retirement plan" to receive the transfer. Any portion of a
distribution which is not transferred shall be distributed to the
Participant.
(b) For purposes of this Section, the term "eligible rollover
distribution" means any distribution other than a distribution of
substantially equal periodic payments over the life or life expectancy
of the Participant (or joint life or joint life expectancies of the
Participant and the designated beneficiary) or a distribution over a
period certain of ten years or more. Amounts required to be distributed
under Code Section 401(a) (9) are not eligible rollover distributions.
The direct transfer option described in subsection (a) applies only to
eligible rollover distributions which would otherwise be includible in
gross income if not transferred.
(c) For purposes of this Section, the term "eligible
retirement plan" means an individual retirement account as described in
Code Section 408(a), an individual retirement annuity as described in
Code Section 408(b), an annuity plan as described in Code Section 403
(a), or a defined contribution plan as described in Code Section
401(a) which is exempt from tax under Code Section 501 (a) and which
accepts rollover distributions.
(d) The election described in subsection (a) also applies to
the surviving spouse after the Participant's death; however,
distributions to the surviving spouse may only be transferred to an
individual retirement account or individual retirement annuity. For
purposes of subsection (a), a spouse of former spouse who is the
alternate payee under a qualified domestic relations order as defined
in Code Section 414(p) will be treated as the Participant.
10
<PAGE>
AMENDMENT TO
W.E. STANLEY & COMPANY, INC.
DEFINED CONTRIBUTION PLAN AND TRUST
1.. Article VI of the Plan is amended by the addition of the new subsection,
effective as of the following date:
a. For Plans not entitled to extended reliance as described in Revenue
Ruling 9476, the first day of the first Plan Year beginning on or after
December 31, 1994, or if later, 90 days after December 31, 1994; or
b. For Plans entitled to extended reliance as described in Revenue
Ruling 94-76, as of the first day of the first plan year beginning in
1999. However, in the event of a transfer of assets to the Plan from a
money purchase plan that occurs after the date of the most recent
determination letter, the effective date of the amendment shall be the
date immediately preceding the date of such transfer of assets.
TRANSFER OF ASSETS FROM A MONEY PURCHASE PLAN
Notwithstanding any provision of this plan to the contrary, to the
extent that any optional form of benefit under this plan permits a distribution
prior to the employee's retirement, death, disability, or severance from
employment, and prior to plan termination, the optional form of benefit is not
available with respect to benefits attributable to assets (including the
post-transfer earnings thereon) and liabilities that are transferred, within the
meaning of Section 414(l) of the Internal Revenue Code, to this plan from a
money purchase pension plan qualified under 401(a) of the Internal Revenue Code
(other than any portion of those assets and liabilities attributable to
voluntary employee contributions).
2. Article VI is amended by the addition of the following new subsection,
effective as of December 12, 1994:
UNIFORMED SERVICES
Notwithstanding any provision of this plan to the contrary,
contributions, benefits and service credit with respect to qualified military
service will be provided in accordance with Section 414(u) of the Internal
Revenue Code.
Loan repayments will be suspended under this plan as permitted under Code
Section 414(u)(4).
Pursuant to the terms of the Plan regarding amendments, _____________________ as
the sponsor of the prototype, hereby adopts this amendment as of the date set
forth below.
11
<PAGE>
W.E. Stanley & Company, Inc.
By:_____________________________
Title: _________________________
Date: __________________________
12
<PAGE>
ADOPTION AGREEMENT FOR
W.E. STANLEY & COMPANY, INC. REGIONAL PROTOTYPE
NON-STANDARDIZED 401(K) PROFIT SHARING
PLAN AND TRUST
The undersigned Employer adopts the W.E. Stanley & Company, Inc.
Non-Standardized 401(K) Profit Sharing Plan for those Employees who shall
qualify as Participants hereunder, to be known as the
A1 VISTA Eyecare, Inc. 401(k) Retirement Savings Plan
---------------------------------------------------
(Plan Name)
It shall be effective as of the date specified below. The Employer hereby
selects the following Plan specifications:
CAUTION: The failure to properly fill out this Adoption Agreement may result in
disqualification of the Plan.
EMPLOYER INFORMATION
B1 Name of Employer VISTA Eyecare, Inc.
(formerly National Vision Associates, Ltd.)
--------------------------------------------
B2 Address 296 Grayson Highway
Lawrenceville, Georgia 30045
-----------------------------
City State Zip
Telephone(770) 822-3600
--------------
B3 Employer Identification Number 58 - 1910859
---- ------------------
B4 Date Business Commenced August, 1990
--------------
B5 TYPE OF ENTITY
a. ( ) S Corporation
b. ( ) Professional Service Corporation
c. ( X ) Corporation
d. ( ) Sole Proprietorship
e. ( ) Partnership
f. ( ) Other _________________________
AND, is the Employer a member of. . .
g. a controlled group? ( X ) Yes ( ) No
h. an affiliated service group? ( ) Yes ( X ) No
Copyright 1993-R W.E. Stanley & Company, Inc.
<PAGE>
B6 NAME(S) OF TRUSTEE(S) a. Angus Morrison
---------------
b. James W. Krause
---------------
c. Robert W. Stein
---------------
B7 TRUSTEES' ADDRESS a. ( X ) Use Employer Address
b. ( ) _________________________________________________
Street
________________________________________________________________________,
City State Zip
B8 LOCATION OF EMPLOYER'S PRINCIPAL OFFICE:
a.( X ) State b.( ) Commonwealth of c. Georgia
-------------------
and this Plan and Trust shall be governed under the same.
B9 EMPLOYER FISCAL YEAR means the 12 consecutive month period:
Commencing on a. January 1st (e.g., January 1st)
-------------------------------------------
month day
and ending on b. December 31st
-------------------------------------------
month day
<PAGE>
PLAN INFORMATION
C1 EFFECTIVE DATE
This Adoption Agreement of the W.E. Stanley & Company, Inc.
Non-Standardized 401(k) Profit Sharing Plan and Trust shall:
a. ( ) establish a new Plan and Trust effective
as of ______________________________ (hereinafter
called the "Effective Date").
b. ( X ) constitute an amendment and restatement in its
entirety of a previously established qualified Plan
and Trust of the Employer which was effective
January 1, 1993 (hereinafter called the "Effective
----------------
Date"). Except as specifically provided in the Plan,
the effective date of this amendment and restatement
is January 1, 1999 (For TRA '86 amendments, enter the
---------------
first day of the first Plan Year beginning in 1989).*
C2 PLAN YEAR means the 12 consecutive month period:
Commencing on a. January 1st (e.g., January 1st)
-----------
and ending on b. December 31st.
-------------
IS THERE A SHORT PLAN YEAR?
c. ( X ) No
d. ( ) Yes, beginning ____________________________
and ending ___________________________.
C3 ANNIVERSARY DATE of Plan (Annual Valuation Date)
a. December 31st
-------------------------
month day
C4 PLAN NUMBER assigned by the Employer (select one)
a.( X ) 001 b.( ) 002 c.( ) 003 d.( ) Other
* This Plan reflects the merger of the following plans into the Plan effective
as of the dates shown below:
Midwest Vision 401(k) Plan: 1/1/98
New West Eyeworks, Inc. 401(k) Profit Sharing Plan: 1/1/99
Employees' 401(k) Plan of Frame-N-Lens: 1/1/99
<PAGE>
C5 NAME OF PLAN ADMINISTRATOR (Document provides for the Employer to
appoint an Administrator. If none is named, the Employer will become the
Administrator.)
a. ( X ) Employer (Use Employer Address)
b. ( ) Name _____________________________________________
Address __________________________________________
_____________________, ___________________
City State Zip
Telephone _________________________
Administrator's I.D. Number _____-_______________
C6 PLAN'S AGENT FOR SERVICE OF LEGAL PROCESS
a. ( X ) Employer (Use Employer Address)
b. ( ) Name ______________________________________________
Address ___________________________________________
_____________________, ___________________
City State Zip
<PAGE>
ELIGIBILITY, VESTING AND RETIREMENT AGE
D1 ELIGIBLE EMPLOYEES (Plan Section 1.15) shall mean:
a. ( ) all Employees who have satisfied the eligibility
requirements.
b. ( X ) all Employees who have satisfied the eligibility
requirements except those checked below:
1. ( ) Employees paid by commissions only.
2. ( ) Employees hourly paid.
3. ( ) Employees paid by salary.
4. ( X ) Employees whose employment is governed by a
collective bargaining agreement between the Employer
and "employee representatives" under which retirement
benefits were the subject of good faith bargaining.
For this purpose, the term "employee representatives"
does not include any organization more than half of
whose members are employees who are owners, officers,
or executives of the Employer.
5. ( ) Highly Compensated Employees.
6. ( X ) Employees who are non-resident aliens who received
no earned income (within the meaning of Code Section
911(d)(2)) from the Employer which constitutes income
from sources within the United States (within the
meaning of Code Section 861(a)(3)).
7. ( ) Other __________________________________________
NOTE: For purposes of this section, the term Employee shall
include all Employees of this Employer and any leased
employees deemed to be Employees under Code Section
414(n) or 414(o).
D2 EMPLOYEES OF AFFILIATED EMPLOYERS (Plan Section 1.16)
Employees of Affiliated Employers:
a. ( ) will not or N/A
b. ( X ) will
be treated as Employees of the Employer adopting the Plan, as of the
adoption dates noted below.*
NOTE: If D2b is elected, each Affiliated Employer should
execute this Adoption Agreement as a Participating
Employer.
* Midwest Vision, Inc.: 1/1/98
New West Eyeworks, Inc.: 1/1/99
Frame-N-Lens Optical, Inc.: 1/1/99
<PAGE>
D3 HOURS OF SERVICE (Plan Section 1.31) will be determined on the basis of
the method selected below. Only one method may be selected. The method
selected will be applied to all Employees covered under the Plan.
a. ( X ) On the basis of actual hours for which an Employee is
paid or entitled to payment.
b. ( ) On the basis of days worked. An Employee will be
credited with ten (10) Hours of Service if under the
Plan such Employee would be credited with at least
one (1) Hour of Service during the day.
c. ( ) On the basis of weeks worked. An Employee will be
credited forty-five (45) Hours of Service if under
the Plan such Employee would be credited with at
least one (1) Hour of Service during the week.
d. ( ) On the basis of semi-monthly payroll periods. An
Employee will be credited with ninety-five (95) Hours
of Service if under the Plan such Employee would be
credited with at least one (1) Hour of Service during
the semi-monthly payroll period.
e. ( ) On the basis of months worked. An Employee will be
credited with one hundred ninety (190) Hours of
Service if under the Plan such Employee would be
credited with at least one (1) Hour of Service during
the month.
<PAGE>
D4 CONDITIONS OF ELIGIBILITY (Plan Section 3.1)
(Check either a OR b and c, and if applicable, d)
Any Eligible Employee will be eligible to participate in the Plan if
such Eligible Employee has satisfied the service and age requirements,
if any, specified below:
a. ( ) NO AGE OR SERVICE REQUIRED.
b. ( X ) SERVICE REQUIREMENT. (may not exceed 1 year)
1. ( ) None
2. ( ) 1/2 Year of Service
3. ( X ) 1 Year of Service
4. ( X ) Other See Below*
----------------------------
NOTE: If the Year(s) of Service selected is or includes a
fractional year, an Employee will not be required to
complete any specified number of Hours of Service to
receive credit for such fractional year. If expressed
in Months of Service, an Employee will not be
required to complete any specified number of Hours of
Service in a particular month.
c. ( X ) AGE REQUIREMENT (may not exceed 21)
1. ( ) N/A - No Age Requirement
2. ( ) 20 1/2
3. ( X ) 21
4. ( ) Other See Below*
---------------------------
d. ( ) FOR NEW PLANS ONLY - Regardless of any of the above
age or service requirements, any Eligible Employee
who was employed on the Effective Date of the Plan
shall be eligible to participate hereunder and shall
enter the Plan as of such date.
Any employee of Frame-N-Lens Optical, Inc. who was participating in the 401(k)
Plan of Frame-N-Lens as of December 31, 1998 shall automatically become eligible
to participate as of January 1, 1999. All other Frame-N-Lens employees must
satisfy the requirements of this Section D4.
<PAGE>
D5 EFFECTIVE DATE OF PARTICIPATION (Plan Section 3.2) An Eligible Employee
shall become a Participant as of:
a. ( ) the first day of the Plan Year in which he met the
requirements.
b. ( ) the first day of the Plan Year in which he met the
requirements, if he met the requirements in the first
6 months of the Plan Year, or as of the first day of
the next succeeding Plan Year if he met the
requirements in the last 6 months of the Plan Year.
c. ( X ) the earlier of the first day of the seventh month or
the first day of the Plan Year coinciding with or
next following the date on which he met the
requirements.
d. ( ) the first day of the Plan Year next following the
date on which he met the requirements. (Eligibility
must be 1/2 Year of Service or less and age 20 1/2 or
less.)
e. ( ) the first day of the month coinciding with or next
following the date on which he met the requirements.
f. ( ) Other:
----------------------------------------
provided that an Employee who has satisfied the
maximum age and service requirements that are
permissible in Section D4 above and who is otherwise
entitled to participate, shall commence participation
no later than the earlier of (a) 6 months after such
requirements are satisfied, or (b) the first 2day of
the first Plan Year after such requirements are
satisfied, unless the Employee separates from service
before such participation date.
<PAGE>
D6 VESTING OF PARTICIPANT'S INTEREST (Plan Section 6.4(b))
The vesting schedule, based on number of Years of Service, shall be as
follows:
a.( ) 100% upon entering the Plan. (Required if eligibility
requirement is greater than one (1) Year of Service.)
b.( ) 0-2 years 0% c.( ) 0-4 years 0%
3 years 100% 5 years 100%
d.( ) 0-1 year 0% e.( ) 1 year 25%
2 years 20% 2 years 50%
3 years 40% 3 years 75%
4 years 60% 4 years 100%
5 years 80%
6 years 100%
f.( ) 1 year 20% g.( ) 0-2 years 0%
2 years 40% 3 years 20%
3 years 60% 4 years 40%
4 years 80% 5 years 60%
5 years 100% 6 years 80%
7 years 100%
h.( X ) Other - Must be at least as liberal as either c or g above.
Years of Service Percentage
1 Year 25%
- ------------------------------------------- ----------
2 Years 50%
- ------------------------------------------- ----------
3 Years 75%
- ------------------------------------------- ----------
4 Years or more 100%
- --------------------------------------------- ----------
* All amounts contributed by the Employer to the New West Eyeworks,
Inc. 401(k) Profit Sharing Plan, which was merged into the Plan
effective as of January 1, 1999, were fully vested as of December 31,
1998.
<PAGE>
D7 FOR AMENDED PLANS (Plan Section 6.4(f)) If the vesting schedule has
been amended to a less favorable schedule, enter the pre-amended
schedule below:
a. ( X ) Vesting schedule has not been amended or amended schedule is
more favorable in all years.
b. ( ) Years of Service Percentage
------------------------------
------------------------------
------------------------------
------------------------------
------------------------------
D8 TOP HEAVY VESTING (Plan Section 6.4(c)) If this Plan becomes a Top
Heavy Plan, the following vesting schedule, based on number of Years of
Service, for such Plan Year and each succeeding Plan Year, whether or
not the Plan is a Top Heavy Plan, shall apply and shall be treated as a
Plan amendment pursuant to this Plan. Once effective, this schedule
shall also apply to any contributions made prior to the effective date
of Code Section 416 and/or before the Plan became a Top Heavy Plan.
a. ( X ) N/A (D6a, b, d, e or f was selected)
b. ( ) 0-1 years 0% c.( ) 0-2 years 0%
2 years 20% 3 years 100%
3 years 40%
4 years 60%
5 years 80%
6 years 100%
NOTE: This section does not apply to the Account balances of
any Participant who does not have an Hour of Service
after the Plan has initially become top heavy. Such
Participant's Account balance attributable to Employer
contributions and Forfeitures will be determined without
regard to this section.
<PAGE>
D9 VESTING (Plan Section 6.4(h)) In determining Years of Service for
vesting purposes, Years of Service attributable to the following shall
be EXCLUDED:
a. ( ) Service prior to the Effective Date of the Plan or a
predecessor plan.b.( X ) N/A.
c. ( ) Service prior to the time an Employee attained age
18.
d. ( X ) N/A.
D10 PLAN SHALL RECOGNIZE SERVICE WITH PREDECESSOR EMPLOYER
a. ( ) No.
b. ( X ) Yes: Years of Service with Midwest Vision, Inc.,
New West Eyeworks, Inc. and Frame-N-Lens Optical,
Inc. shall be recognized for the purpose of this
Plan.
NOTE: If the predecessor Employer maintained this qualified Plan,
then Years of Service with such predecessor Employer shall be
recognized pursuant to Section 1.74 and b. must be marked.
D11 NORMAL RETIREMENT AGE ("NRA") (Plan Section 1.42) means:
a. ( X ) the date a Participant attains his 65th birthday.
-------
(not to exceed 65th)
b. ( ) the later of the date a Participant attains his
__________ birthday (not to exceed 65th) or the
c. ____________ (not to exceed 5th) anniversary of the first
day of the Plan Year in which participation in the
Plan commenced.
D12 NORMAL RETIREMENT DATE (Plan Section 1.43) shall commence:
a. ( X ) as of the Participant's "NRA".
OR (must select b. or c. and 1. or 2.)
b. ( ) as of the first day of the month . . .
c. ( ) as of the Anniversary Date . . .
1. ( ) coinciding with or next following the
Participant's "NRA".
2. ( ) nearest the Participant's "NRA".
<PAGE>
D13 EARLY RETIREMENT DATE (Plan Section 1.12) means the:
a. ( ) No Early Retirement provision provided.
b. ( ) date on which a Participant . . .
c. ( X ) first day of the month coinciding with or next
following the date on which a Participant. . .
d. ( ) Anniversary Date coinciding with or next following
the date on which a Participant. . .
AND, if b, c or d was selected . . .
1. ( X ) attains his 55th birthday and has
2. ( ) completed at least _____ Years of Service.
<PAGE>
CONTRIBUTIONS, ALLOCATIONS AND DISTRIBUTIONS
E1 a. COMPENSATION (Plan Section 1.9) with respect to any
Participant means:
1. ( ) "415 Compensation."
2. ( X ) Compensation reportable as wages on Form
W-2.
b. COMPENSATION shall be
1. ( X ) actually paid (must select if Plan is
integrated)
2. ( ) accrued
c. HOWEVER, FOR NON-INTEGRATED PLANS, Compensation shall exclude
(select all that apply):
1. ( X ) N/A. No exclusions
2. ( ) overtime
3. ( ) bonuses
4. ( ) commissions
5. ( ) other ________________________________
d. FOR PURPOSES OF THIS SECTION E1, Compensation shall be based on:
1. ( ) the Plan Year.
2. ( ) the Fiscal Year coinciding with or ending
within the Plan Year.
3. ( X ) the Calendar Year coinciding with or
ending within the Plan Year.
NOTE: The Limitation Year shall be the same as the year on which
compensation is based.
e. HOWEVER, for an Employee's first year of Participation,
Compensation shall be recognized as of:
1. ( ) the first day of the Plan Year.
2. ( X ) the date the Participant entered the Plan.
f. IN ADDITION, COMPENSATION and "414(s) Compensation"
1. ( X ) shall
2. ( ) shall not
include compensation which is not currently includible in the
Participant's gross income by reason of the application of
Code Sections 125, 402(a)(8), 402(h)(1)(B) or 403(b).
<PAGE>
E2 SALARY REDUCTION ARRANGEMENT - ELECTIVE CONTRIBUTION
(Plan Section 11.2) Each Employee may elect to have his Compensation
reduce by:
a. ( ) %
------------
b. ( ) up to %
---------
c. ( X ) from 1 % to 15 %
----------- -----------
d. ( ) up to the maximum percentage allowable not to exceed
the limits of Code Sections 401(k), 401 and 415.
AND . . .
e. ( X ) A Participant may elect to commence salary
reductions as of the first day of the month (ENTER AT
--------------------------
LEAST ONE DATE OR PERIOD). A Participant may modify
the amount of salary reductions as of the first day
------------------
of the month. However, an Employee who has terminated
-----------------------------------------------------
his or her election under the Salary Reduction
-----------------------------------------------------
Agreement other than for hardship reasons may not
-----------------------------------------------------
make another Elective Deferral for a period of 3
-----------------------------------------------------
months. (ENTER AT LEAST ONE DATE OR PERIOD).
------
AND . . .
Shall cash bonuses paid within 2 1/2 months after the end of
the Plan Year be subject to the salary reduction election?
f. ( ) Yes
g. ( X ) No
<PAGE>
E3 FORMULA FOR DETERMINING EMPLOYER'S MATCHING CONTRIBUTION
(Plan Section 11.1(b))
a. ( ) N/A. There shall be no matching contributions.
b. ( ) The Employer shall make matching contributions
equal to ________% (e.g. 50%) of the Participant's
salary reductions.
c. ( X ) The Employer may make matching contributions equal
to a discretionary percentage, to be determined by
the Employer, of the Participant's salary reductions.
d. ( ) The Employer shall make matching contributions
equal to the sum of _________% of the portion
of the Participant's salary reduction which does not
exceed __________% of the Participant's Compensation
plus __________% of the portion of the Participant's
salary reduction which exceeds __________% of the
Participant's Compensation, but does not exceed
__________% of the Participant's Compensation.
e. ( ) The Employer shall make matching contributions equal
to the percentage determined under the following
schedule:
Participant's Total Matching Percentage
Years of Service
___________________ ___________
___________________ ___________
___________________ ___________
<PAGE>
FOR PLANS WITH MATCHING CONTRIBUTIONS
f. ( X ) Matching contributions
g. ( ) shall
h. ( X ) shall not be used in satisfying the deferral percentage
tests. (If used, full vesting and restrictions on
withdrawals will apply and the match will be deemed to be
an Elective Contribution).
i. ( X ) Shall a Year of Service be required in order to share in
the matching contributions?
With respect to Plan Years beginning after 1989. . .
1. ( X ) Yes (Could cause Plan to violate minimum
participation and coverage requirements under
Code Sections 401(a)(26) and 410)
2. ( ) No
With respect to Plan Years beginning before 1990. . .
1. ( X ) N/A New Plan or same as years beginning after 1989.
2. ( ) Yes
3. ( ) No
j. ( X ) In determining matching contributions, only salar
reductions up to 4 % of a Participant's --- Compensation
will be matched. k.( ) N/A. l. ( ) The matching
contribution made on behalf of a Participant for any Plan
Year shall not exceed $ . m.( X ) N/A. ---------------- n.
( X ) Matching contributions shall be made on behalf of 1.
( X ) all Participants. 2. ( ) only Non-Highly Compensated
Employees.
<PAGE>
E4 WILL A DISCRETIONARY EMPLOYER CONTRIBUTION BE PROVIDED (OTHER THAN A
DISCRETIONARY MATCHING OR QUALIFIED NON-ELECTIVE CONTRIBUTION) (Plan
Section 11.1(c))?
a. ( ) No.
b. ( ) Yes, the Employer may make a discretionary contribution out
of its current or accumulated Net Profit.
c. ( X ) Yes, the Employer may make a discretionary contribution
which is not limited to its current or accumulated Net
Profit.
IF YES (b. or c. is selected above), the Employer's discretionary
contribution shall be allocated as follows:
d. ( ) FOR A NON-INTEGRATED PLAN
The Employer discretionary contribution for the Plan Year shall be
allocated in the same ratio as each Participant's Compensation bears to
the total of such Compensation of all Participants.
e. ( X ) FOR AN INTEGRATED PLAN
The Employer discretionary contribution for the Plan Year shall be
allocated in accordance with Plan Section 4.3(b)(2) based on a
Participant's Compensation in excess of:
f. ( X ) The Taxable Wage Base.
g. ( ) The greater of $10,000 or 20% of the Taxable Wage Base.
h. ( ) _______ % of the Taxable Wage Base. (see Note below)
i. ( ) $___________ . (see Note below)
NOTE: The integration percentage of 5.7% shall be reduced to:
1. 4.3% if h. or i. above is more than 20% and less than
or equal to 80% of the Taxable Wage Base.
2. 5.4% if h. or i. above is less than 100% and more
than 80% of the Taxable Wage Base.
<PAGE>
E5 QUALIFIED NON-ELECTIVE CONTRIBUTIONS (Plan Section 11.1(d))
a. ( ) N/A. There shall be no Qualified Non-Elective
Contributions except as provided in Section 11.5(b)
and 11.7(h).
b. ( ) The Employer shall make a Qualified Non-Elective
Contribution equal to % of the total Compensation of
all Participants eligible to share in the
allocations.
c. ( X ) The Employer may make a Qualified Non-Elective
Contribution in an amount to be determined by the
Employer.
E6 FORFEITURES (Plan Section 4.3(e))
a. Forfeitures of contributions other than matching contributions
shall be . . .
1. ( X ) added to the Employer's contribution under the Plan.
2. ( ) allocated to all Participants eligible to share in
the allocations in the same proportion that
each Participant's Compensation for the year
bears to the Compensation of all
Participants for such year.
b. Forfeitures of matching contributions shall be. . .
1. ( ) N/A. No matching contributions or match is
fully vested.
2. ( X ) used to reduce the Employer's matching
contribution.
3. ( ) allocated to all Participant's eligible to
share in the allocations in proportion to
each such Participant's Compensation for the
year.
4. ( ) allocated to all Non-Highly Compensated
Employee's eligible to share in the
allocations in proportion to each such
Participant's Compensation for the year.
<PAGE>
E7 ALLOCATIONS TO ACTIVE PARTICIPANTS (Plan Section 4.3)
With respect to Plan Years beginning after 1989, a
Participant. . .
a. ( X ) shall (Plan may become discriminatory)
b. ( ) shall not
be required to complete a Year of Service in order to share in any
Non-Elective Contributions (other than matching contributions) or
Qualified Non-Elective Contributions. For Plan Years beginning before
1990, the Plan provides that a Participant must complete a Year of
Service to share in the allocations.
<PAGE>
E8 ALLOCATIONS TO TERMINATED PARTICIPANTS (Plan Section 4.3(k))
Any Participant who terminated employment during the Plan Year (i.e.
not actively employed on the last day of the Plan Year) for reasons
other than death, Total and Permanent Disability or retirement:
a. With respect to Employer Non-elective Contributions (other
than matching), Qualified Non-Elective Contributions, and
Forfeitures:
1. For Plan Years beginning after 1989,
i. ( ) N/A, Plan does not provide for such
contributions.
ii. ( ) shall share in the allocations
provided such Participant completed
more than 500 Hours of Service.
iii. ( ) shall share in such allocations
provided such Participant completed
a Year of Service.
iv. ( X ) shall not share in such allocations,
regardless of Hours of Service.
2. For Plan Years beginning before 1990,
i. ( X ) N/A, new Plan, or same as for Plan
Years beginning after 1989.
ii. ( ) shall share in such allocations
provided such Participant completed
a Year of Service.
iii. ( ) shall not share in such allocations,
regardless of Hours of Service.
NOTE: If a.1.iii or iv is selected, the Plan could violate
minimum participation and coverage requirements under
Code Sections 401(a)(26) and 410.
<PAGE>
b. With respect to the allocation of Employer Matching contributions, a
Participant:
1. For Plan Years beginning after 1989,
i. ( ) N/A, Plan does not provide for
matching contributions.
ii. ( ) shall share in the allocations,
regardless of Hours of Service.
iii. ( ) shall share in the allocations
provided such Participant completed
more than 500 Hours of Service.
iv. ( ) shall share in such allocations
provided such Participant completed
a Year of Service.
v. ( X ) shall not share in such allocations,
regardless of Hours of Service.
2. For Plan Years beginning before 1990,
i. ( X ) N/A, new Plan, or same as years
beginning after 1989.
ii. ( ) shall share in the allocations,
regardless of Hours of Service.
iii. ( ) shall share in such allocations
provided such Participant completed
a Year of Service.
iv. ( ) shall not share in such allocations,
regardless of Hours of Service.
NOTE: If b.1.iv or v is selected, the Plan could violate minimum
participation and coverage requirements under Code Section
401(a)(26) and 410.
E9 ALLOCATIONS OF EARNINGS (Plan Section 4.3(c))
Allocations of earning with respect to amounts contributed to the Plan
after the previous Anniversary Date or other valuation date shall be
determined . . .
a. ( ) by using a weighted average.
b. ( ) by treating one-half of all such contributions as
being a part of the Participant's nonsegregated
account balance as of the previous Anniversary Date
or valuation date.
c. ( ) by using the method specified in Section 4.3(c).
d. ( X ) Other By using the method specified in Section
-----------------------------------------
4.3(c) of the Plan on each day of the Plan Year.
-----------------------------------------------
<PAGE>
E10 LIMITATIONS ON ALLOCATIONS (Plan Section 4.4)
a. If any Participant is or was covered under another qualified
defined contribution plan maintained by the Employer, or if
the Employer maintains a welfare benefit fund, as defined in
Code Section 419(e), or an individual medical account, as
defined in Code Section 415(1)(2), under which amounts are
treated as Annual Additions with respect to any Participant in
this Plan:
1. ( X ) N/A.
2. ( ) The provisions of Section 4.4(b) of the Plan
will apply.
3. ( ) Provide the method under which the Plans
will limit total Annual Additions to the
Maximum Permissible Amount, and will
properly reduce any Excess Amounts, in a
manner that precludes Employer discretion.
__________________________________
__________________________________
__________________________________
__________________________________
<PAGE>
b. If any Participant is or ever has been a Participant in a defined
benefit plan maintained by the Employer:
1. ( X ) N/A.
2. ( ) In any Limitation Year, the Annual Additions
credited to the Participant under this Plan
may not cause the sum of the Defined Benefit
Plan Fraction and the Defined Contribution
Fraction to exceed 1.0. If the Employer's
contribution that would otherwise be made on
the Participant's behalf during the
limitation year would cause the 1.0
limitation to be exceeded, the rate of
contribution under this Plan will be reduced
so that the sum of the fractions equals 1.0.
If the 1.0 limitation is exceeded because of
an Excess Amount, such Excess Amount will be
reduced in accordance with Section 4.4(a)(4)
of the Plan.
3. ( ) Provide the method under which the Plans
involved will satisfy the 1.0 limitation in
a manner that precludes Employer discretion.
__________________________________
__________________________________
__________________________________
<PAGE>
E11 DISTRIBUTIONS UPON DEATH (Plan Section 6.6(h))
Distributions upon the death of a Participant prior to receiving any
benefits shall . . .
a. ( X ) be made pursuant to the election of the Participant or
beneficiary.
b. ( ) begin within 1 year of death for a designated
beneficiary and be payable over the life (or over a
period not exceeding the life expectancy) of such
beneficiary, except that if the beneficiary is the
Participant's spouse, begin within the time the
Participant would have attained age 70 1/2.
c. ( ) be made within 5 years of death for all beneficiaries.
d. ( ) Other .
----------------------------------------
E12 LIFE EXPECTANCIES (Plan Section 6.5(f)) for minimum distributions
required pursuant to Code Section 401(a)(9) shall. . .
a. ( ) be recalculated at the Participant's election.
b. ( ) be recalculated.
c. ( X ) not be recalculated.
E13 CONDITIONS FOR DISTRIBUTIONS UPON TERMINATION
Distributions upon termination of employment pursuant to Section 6.4(a)
of the Plan shall not be made unless the following conditions have been
satisfied:
a. ( X ) N/A. Immediate Distributions may be made at
Participant's election.
b. ( ) The Participant has incurred ____________
1-Year Break(s) in Service.
c. ( ) The Participant has reached his or her Early or
Normal Retirement Age.
d. ( ) Distributions may be made at the Participant's
election on or after the Anniversary Date following
termination of employment.
e. ( ) Other
<PAGE>
E14 FORMS OF DISTRIBUTIONS (Plan Sections 6.5 and 6.6)
Distributions under the Plan may be made . . .
a. 1. ( X ) in lump sums.
2. ( ) in lump sums or installments.
b. AND, pursuant to Plan Section 6.13,
1. ( X ) no annuities are allowed (avoids Joint and
Survivor rules).
2. ( ) annuities are allowed (Plan Section 6.13
shall not apply).
NOTE: b.1. above may not be elected if this is an amendment to a
plan which permitted annuities as a form of distribution or if
this Plan has accepted a plan to plan transfer of assets from
a plan which permitted annuities as a form of distribution.
c. AND may be made in . . .
1. ( X ) cash only (except for insurance or annuity
contracts).
2. ( ) cash or property.
<PAGE>
TOP HEAVY REQUIREMENTS
F1 TOP HEAVY DUPLICATIONS (Plan Section 4.3(i)): When a Non-Key Employee
is a Participant in this Plan and a Defined Benefit Plan maintained by
the Employer, indicate which method shall be utilized to avoid
duplication of top heavy minimum benefits.
a. ( X ) The Employer does not maintain a Defined Benefit
Plan.
b. ( ) A minimum, non-integrated contribution of 5% of each
Non-Key Employee's total Compensation shall be
provided in this Plan, as specified in Section
4.3(i). (The Defined Benefit and Defined Contribution
Fractions will be computed using 100% if this choice
is selected.)
c. ( ) A minimum, non-integrated contribution of 7 1/2% of
each Non-Key Employee's total Compensation shall be
provided in this Plan as specified in Section 4.3(i).
(If this choice is selected, the Defined Benefit and
Defined Contribution Fractions will be computed using
125% for all Plan Years in which the Plan is Top
Heavy, but not Super Top Heavy.)
d. ( ) Specify the method under which the Plans will provide
top heavy minimum benefits for Non-Key Employees that
will preclude Employer discretion and avoid
inadvertent omissions, including any adjustments
required under Code Section 415(e).
__________________________________
__________________________________
__________________________________
<PAGE>
F2 PRESENT VALUE OF ACCRUED BENEFIT (Plan Section 2.2) for Top Heavy
purposes where the Employer maintains a Defined Benefit Plan in
addition to this Plan, shall be based on . . .
a. ( X ) N/A. The Employer does not maintain a defined benefi
plan.
b. ( ) Interest Rate: ______________________________
Mortality Table:______________________________
F3 TOP HEAVY DUPLICATIONS: Employer maintaining two (2) or more Defined
Contribution Plans.
a. ( X ) N/A.
b. ( ) A minimum, non-integrated contribution of 3% of each
Non-Key Employee's total Compensation shall be
provided in the Money Purchase Plan (or other plan
subject to Code Section 412), where the Employer
maintains two (2) or more non-paired Defined
Contribution Plans.
c. ( ) Specify the method under which the Plans will provide
top heavy minimum benefits for Non-Key Employees that
will preclude Employer Discretion and avoid
inadvertent omissions, including any adjustments
required under Code Section 415(e).
___________________________
___________________________
___________________________
<PAGE>
MISCELLANEOUS
G1 LOANS TO PARTICIPANTS (Plan Section 7.4)
a. ( X ) Yes, loans may be made up to $50,000 or 1/2 Vested
interest.
b. ( ) No, loans may not be made.
If YES, (check all that apply). . .
c. ( X ) loans shall be treated as a Directed Investment.
d. ( ) loans shall only be made for hardship or financial
necessity.
e. ( X ) the minimum loan shall be $1,000.
f. ( ) $10,000 de minimis loans may be made regardless of
Vested interest. (If selected, plan may need security
in addition to Vested interest.)
NOTE: Department of Labor Regulations require the adoption of a
SEPARATE written loan program setting forth the requirements
outlined in Plan Section 7.4.
G2 DIRECTED INVESTMENT ACCOUNTS (Plan Section 4,8) are permitted for the
interest in any one or more accounts.
a. ( X ) Yes, regardless of the Participant's Vested interest
in the Plan.
b. ( ) Yes, but only with respect to the Participant's
Vested interest in the Plan.
c. ( ) Yes, but only with respect to those accounts which
are 100% Vested.
d. ( ) No directed investments are permitted.
G3 TRANSFERS FROM QUALIFIED PLANS (Plan Section 4.6)
a. ( X ) Yes, transfers from qualified plans (and rollovers)
will be allowed.
b. ( ) No, transfers from qualified plans (and rollovers
will not be allowed.
AND, transfers shall be permitted. . .
c. ( X ) from any Employee, even if not a Participant.
d. ( ) from Participants only.
<PAGE>
G4 EMPLOYEES' VOLUNTARY CONTRIBUTIONS (Plan Section 4.7)
a. ( ) Yes, Voluntary Contributions are allowed subject to
the limits of Section 4.10.
b. ( X ) No, Voluntary Contributions will not be allowed.
NOTE: TRA '86 subjects voluntary contributions to strict
discrimination rules.
G5 HARDSHIP DISTRIBUTIONS (Plan Section 6.11 and 11.8)
a. ( X ) Yes, from any accounts which are 100% Vested.
b. ( ) Yes, from Participant's Elective Account only.
c. ( ) Yes, but limited to the Participant's Account only.
d. ( ) No.
NOTE: Distributions from a Participant's Elective Account are
limited to the portion of such account attributable to such
Participant's Deferred Compensation and earnings attributable
thereto up to December 31, 1988. Also hardship distributions
are not permitted from a Participant's Qualified Non-Elective
Account.
G6 PRE-RETIREMENT DISTRIBUTION (Plan Section 6.10)
a. ( X If a Participant has reached the age of 59 1/2,
distributions may be made, at the Participant's
election, from any accounts which are 100% Vested
without requiring the Participant to terminate
employment.
b. ( ) No pre-retirement distribution may be made.
NOTE: Distributions from a Participant's Elective Account and
Qualified Non-Elective Account are not permitted prior to age
59 1/2.
G7 LIFE INSURANCE (Plan Section 7.2(e)) may be purchased with Plan
contributions.
a. ( X ) No life insurance may be purchased.
b. ( ) Yes, at the option of the Administrator.
c. ( ) Yes, at the option of the Participant.
<PAGE>
AND, the purchase of initial or additional life insurance shall be
subject to the following limitations: (select all that apply)
d. ( ) N/A, no limitations.
e. ( ) each initial Contract shall have a minimum face
amount of $____________.
f. ( ) each additional Contract shall have a minimum face
amount of $___________.
g. ( ) the Participant has completed _____ Years of Service.
h. ( ) the Participant has completed _____ Years of Service
while a Participant in the Plan.
i. ( ) the Participant is under age _____ on the Contract
issue date.
j. ( ) the maximum amount of all Contracts on behalf of a
Participant shall not exceed $________ .
k. ( ) the maximum face amount of life insurance shall be
$__________.
<PAGE>
The adopting Employer may not rely on an opinion letter issued by the National
Office of the Internal Revenue Service as evidence that the plan is qualified
under Code Section 401. In order to obtain reliance with respect to plan
qualification, the Employer must apply to the appropriate Key District Office
for a determination letter.
This Adoption Agreement may be used only in conjunction with basic Plan document
#01. This Adoption Agreement and the basic Plan document shall together be known
as W.E. Stanley & Company, Inc. Non-Standardized 401(k) Profit Sharing Plan
#01-005.
The adoption of this Plan, its qualification by the IRS, and the related tax
consequences are the responsibility of the Employer and its independent tax and
legal advisors.
W.E. Stanley & Company, Inc. will notify the Employer of any amendments made to
the Plan or of the discontinuance or abandonment of the Plan provided this Plan
has been acknowledged by W.E. Stanley & Company, Inc. or its authorized
representative. Furthermore, in order to be eligible to receive such
notification, we agree to notify W.E. Stanley & Company, Inc. of any change in
address.
<PAGE>
IN WITNESS WHEREOF, the Employer and Trustee hereby cause this Plan to be
executed on this _____ day of __________ , 19__. -- Furthermore, this Plan may
not be used unless acknowledged by W.E. Stanley & Company, Inc. or its
authorized representative.
EMPLOYER:
VISTA Eyecare, Inc.
- --------------------------------
(enter name) Trustee
By:____________________________
Trustee
PARTICIPATING EMPLOYERS:
Trustee
Midwest Vision, Inc.
- --------------------------------
(enter name)
By: ____________________________
New West Eyeworks, Inc.
- ---------------------------------
(enter name)
By:______________________________
Frame-N-Lens Optical, Inc.
- ---------------------------------
(enter name)
By:______________________________
This Plan may not be used, and shall not be deemed to be a Regional Prototype
Plan, unless an authorized representative of W.E. Stanley & Company,Inc. has
acknowledged the use of the Plan. Such acknowledgement is for administerial
purposes only. It acknowledges that the Employer is using the Plan but does not
represent that this Plan, including the choices selected on the Adoption
Agreement, has been reviewed by a representative of the sponsor or constitutes a
qualified retirement plan.
W.E. Stanley & Company, Inc.
By:__________________________
<PAGE>
AMENDMENT NUMBER ONE TO
W.E. STANLEY & COMPANY, INC. REGIONAL PROTOTYPE
DEFINED CONTRIBUTION PLAN & TRUST
W.E. Stanley & Company, Inc. Regional Prototype Defined Contribution Plan &
Trust is hereby amended as follows:
1. Section 1.9 is amended by replacing the first paragraph with the following
paragraphs:
"Compensation" with respect to any Participant means one of the
following as elected in the Adoption Agreement. However, compensation for any
Self-Employed Individual shall be equal to his Earned Income.
i. Information required to be reported under sections 6041, 6051,
and 6052 (Wages, Tips and Other Compensation Box on Form W-2).
Compensation is defined as wages as defined in section 3401(a)
and all other payments of compensation to an employee by the
employer (in the course of the employer's trade or business)
for which the employer is required to furnish the employee a
written statement under sections 6041(d) and 6051(a)(3) of the
Code. Compensation must be determined without regard to any
rules under section 3401(a) that limit the remuneration
included in wages based on the nature or location of the
employment or the services performed (such as the exception
for agricultural labor in section 3401(a)(2)).
ii. Section 3401(a) wages. Compensation is defined as wages within
the meaning of section 3401(a) for the purposes of income tax
withholding at the source but determined without regard to any
rules that limit the remuneration included in wages based on
the nature or location of the employment or the services
performed (such as the exception for agricultural labor in
section 3401(a)(2)).
iii. 415 safe-harbor compensation. Compensation is defined as
wages, salaries, and fees for professional services and other
amounts received (without regard to whether or not an amount
is paid in cash) for personal services actually rendered in
the course of employment with the employer maintaining the
plan to the extent that the amounts are includible in gross
income (including, but not limited to, commissions paid
salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums,
tips, bonuses, fringe benefits and reimbursements or other
expense allowances under a nonaccountable plan (as described
in 1.62(c)), and excluding the following:
<PAGE>
a. Employer contributions to a plan of deferred
compensation which are not includible in the
employee's gross income for the taxable year in which
contributed, or employer contributions under a
simplified employee pension plan to the extent such
contributions are deductible by the employee, or any
distributions from a plan of deferred compensation;
b. Amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property)
held by the employee either becomes freely
transferable or is no longer subject to a substantial
risk of forfeiture;
c. Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
d. Other amounts which received special tax benefits, or
contributions made by the employer (whether or not
under a salary reduction agreement) towards the
purchase of an annuity contract described in section
403(b) of the Code (whether or not the contributions
are actually excludable from the gross income of the
employee).
If, in connection with the adoption of this or any other amendment, the
definition of Compensation has been modified, then, for Plan Years
prior to the Plan Year which includes the adoption date of such
amendment, Compensation means compensation determined pursuant to the
Plan then in effect.
2. Section 1.14 is amended in its entirety to read as follows:
"Elective Contribution" means the Employer's contributions to the Plan
that are made pursuant to the Participant's deferral election pursuant to
Section 11.2, excluding any such amounts distributed as "excess annual
additions" pursuant to Section 4.4. In addition, if selected in E3 of the
Adoption Agreement, the Employer's matching contribution shall or shall not be
considered an Elective Contribution for purposes of the Plan, as provided in
Section 11.1(b). Elective Contributions shall be subject to the requirements of
Sections 11.2(b) and 11.2(c) and shall further be required to satisfy the
discrimination requirements of Regulation 1.401(k)-1(b)(3), the provisions of
which are specifically incorporated herein by reference.
3. Section 1.20 is amended in its entirety to read as follows:
"Excess Deferred Compensation" means, with respect to any taxable year
of a Participant, the excess of the aggregate amount of such Participant's
Deferred Compensation and the elective deferrals pursuant to Section 11.2(f)
actually made on behalf of
<PAGE>
such Participant for such taxable year, over the dollar limitation provided for
in Code Section 402(g), which is incorporated herein by reference. Excess
Deferred Compensation shall be treated as an "annual addition" pursuant to
Section 4.4 when contributed to the Plan unless distributed to the affected
Participant not later than the first April 15th following the close of the
Participant's taxable year.
4. Section 1.26 is amended in its entirety to read as follows:
"414(s) Compensation" with respect to any Employee means his
Compensation as defined in Section 1.9. However, for purposes of this Section,
Compensation shall be Compensation paid and, if selected in the Adoption
Agreement, shall only be recognized as of an Employee's effective date of
participation. If, in connection with the adoption of this or any other
amendment, the definition of "414(s) Compensation" has been modified, then, for
Plan Years prior to the Plan Year which includes the adoption date of such
amendment, "414(s) Compensation" means compensation determined pursuant to the
Plan then in effect.
5. Section 1.27 ("415 Compensation") is amended by the addition of the following
paragraph:
If, in connection with the adoption of this or any other amendment, the
definition of "415 Compensation" has been modified, then, for Plan Years prior
the Plan Year which includes the adoption date of such amendment, "415
Compensation" means compensation determined pursuant to the Plan then in effect.
6. Section 4.4(a)(4) and 4.4(a)(4)(i) are amended to read as follows:
(4) If there is an excess amount pursuant to Section 4.4(a)(2) or
Section 4.5, the excess will be disposed of in one of the
following manners, as uniformly determined by the Plan
Administrator for all Participants similarly situated:
(i) Any Deferred Compensation or nondeductible Voluntary
Employee Contributions, to the extent they would
reduce the Excess Amount will be distributed to the
Participant;
7. Section 4.4(f)(2) is amended in its entirety to read as follows:
Compensation means a Participant's Compensation as elected in the
Adoption Agreement. However, regardless of any selection made in the Adoption
Agreement, "415 Compensation" shall exclude compensation which is not currently
includible in the Participant's gross income by reason of the application of
Code Sections 125, 402(a)(8), 402(h)(1)(B) or 403(b).
<PAGE>
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.
Notwithstanding the preceding sentence, compensation for a participant
in a defined contribution plan who is permanently and totally disabled (as
defined in section 22(e)(3) of the Internal Revenue Code) is the compensation
such participant would have received for the limitation year if the participant
had been paid at the rate of compensation paid immediately before becoming
permanently and totally disabled; such imputed compensation for the disabled
participant may be taken into account only if the participant is not a Highly
Compensated Employee and contributions made on behalf of such participant are
nonforfeitable when made.
8. Section 4.5(a) is amended in its entirety to read as follows:
(a) If as a result of the allocation of Forfeitures, a reasonable error
in estimating a Participant's annual Compensation, a reasonable error in
determining the amount of elective deferrals (within the meaning of Code Section
402(g)(3)) that may be made with respect to any Participant under the limits of
Section 4.4, or other facts and circumstances to which Regulation 1.415-6(b)(6)
shall be applicable, the "annual additions" under this Plan would cause the
maximum provided in Section 4.4 to be exceeded, the Administrator shall treat
the excess in accordance with Section 4.4(a)(4).
9. Sections 6.11(a)(1) and (a)(4) are amended in their entirety to read as
follows:
(1) Medical expenses described in Code Section 213(d) incurred by the
Participant, his spouse, or any of his dependents (as defined in Code Section
152) or expenses necessary for these persons to obtain medical care;
(4) Payment of tuition and related educational fees for the next 12
months of post-secondary education for the Participant, his spouse, children, or
dependents;
10. Section 7.10 is amended by the addition of the following paragraphs:
(a) Notwithstanding any provision of the plan to the contrary, with
respect to distributions made after December 31, 1992, a Participant shall be
permitted to elect to have any "eligible rollover distribution" transferred
directly to an "eligible retirement plan" specified by the Participant. The Plan
provisions otherwise applicable to distributions continue to apply to the direct
transfer option. The Participant shall, in the time and manner prescribed by the
Administrator, specify the
<PAGE>
amount to be directly transferred and the "eligible retirement plan" to receive
the transfer. Any portion of a distribution which is not transferred shall be
distributed to the Participant.
(b) For purposes of this Section, the term "eligible rollover
distribution" means any distribution other than a distribution of substantially
equal periodic payments over the life or life expectancy of the Participant (or
joint life or joint life expectancies of the Participant and the designated
beneficiary) or a distribution over a period certain of ten years or more.
Amounts required to be distributed under Code Section 401(a)(9) are not eligible
rollover distributions. The direct transfer option described in subsection (a)
applies only to eligible rollover distributions which would otherwise be
includible in gross income if not transferred.
(c) For purposes of this Section, the term "eligible retirement plan"
means an individual retirement account as described in Code Section 408(a), an
individual retirement annuity as described in Code Section 408(b), an annuity
plan as described in Code Section 403(a), or a defined contribution plan as
described in Code Section 401(a) which is exempt from tax under Code Section
501(a) and which accepts rollover distributions.
(d) The election described in subsection (a) also applies to the
surviving spouse after the Participant's death; however, distributions to the
surviving spouse may only be transferred to an individual retirement account or
individual retirement annuity. for purposes of subsection (a), a spouse or
former spouse who is the alternate payee under a qualified domestic relations
order as defined in Code Section 414(p) will be treated as the Participant.
11. Section 11.2(d) is amended in its entirety to read as follows:
(d) In any Plan Year beginning after December 31, 1986, a Participant's
Deferred Compensation made under this Plan and all other plans, contracts or
arrangements of the employer maintaining this Plan shall not exceed the
limitation imposed by Code Section 402(g), as in effect for the calendar year in
which such Plan Year began. If such dollar limitation is exceeded solely from
elective deferrals made under this Plan or any other Plan maintained by the
Employer, a Participant will be deemed to have notified the Administrator of
such excess amount which shall be distributed in a manner consistent with
Section 11.2(f). This dollar limitation shall be adjusted annually pursuant to
the method provided in Code Section 415(d) in accordance with Regulations.
12. Section 11.2(f) is amended by the addition of the following paragraph
after paragraph (f)(3) to read as follows:
<PAGE>
Any distribution under this Section shall be made first from unmatched
Deferred Compensation and, thereafter, simultaneously from Deferred Compensation
which is matched and matching contributions which relate to such Deferred
Compensation. However, any such matching contributions which are not Vested
shall be forfeited in lieu of being distributed.
13. Section 11.2(f) is amended by the addition of the following paragraph
as the second to the last paragraph of such subsection:
Notwithstanding the above, for any distribution under this Section
which is made after August 15, 1991, such distribution shall not include any
income for the "gap period". Further provided, for any distribution under this
Section which is made after August 15, 1991, the amount if Income may be
computed using a reasonable method that is consistent with Section 4.3(c),
provided such method is used consistently for all Participants and for all such
distributions for the Plan Year.
14. Section 11.5(c) is amended by the addition of the following paragraph
as the second to the last paragraph of such subsection:
Notwithstanding the above, for any distribution under this Section
which is made after August 15, 1994, such distribution shall not include any
income for the "gap period". Further provided, for any distribution under this
Section which is made after August 15, 1991, the amount of Income may be
computed using a reasonable method that is consistent with Section 4.3(c),
provided such method is used consistently for all Participants and for all such
distributions for the Plan Year.
15. Section 11.6(c) is amended in its entirety to read as follows:
(c) For purposes of determining the "Actual Contribution Percentage"
and the amount of Excess Aggregate Contributions pursuant to Section 11.7(d),
only Employer matching contributions (excluding matching contributions forfeited
or distributed pursuant to Section 11.2(f), 11.5(a) or 11.7(a)) contributed to
the Plan prior to the end of the succeeding Plan Year shall be considered. In
addition, the Administrator may elect to take into account, with respect to
Employees eligible to have Employer matching contributions made pursuant to
Section 11.1(b) or voluntary Employee contributions made pursuant to Section 4.7
allocated to their accounts, elective deferrals (as defined in Regulation 1.402
(g)-1(b)) and qualified non-elective contributions (as defined in Code Section
401(m)(4)(C)) contributed to any plan maintained by the Employer. Such elective
deferrals and qualified non-elective contributions shall be treated as Employer
matching contributions subject to Regulation 1.401(m)-1(b)(2) which is
incorporated herein by reference. However, for Plan Years beginning after
December 31, 1988, the Plan Year must be the same as the plan year of the plan
to which the elective deferrals and the qualified non-elective contributions are
made.
<PAGE>
16. Section 11.7(i) is amended by the addition of the following paragraph
as the second to the last paragraph of such subsection:
Notwithstanding the above, for any distribution under this Section
which is made after August 15, 1991, such distribution shall not include any
Income for the "gap period". Further provided, for any distribution under this
Section which is made after August 15, 1991, the amount of Income may be
computed using a reasonable method is consistent with Section 4.3(c), provided
such method is used consistently for all Participants and for all such
distributions for the Plan Year.
17. Sections 11.8(a)(1) and (a)(3) are amended in their entirety to read
as follows:
(1) Medical expenses described in Code Section 213(d) incurred by the
Participant, his spouse, or any of his dependents (as defined in Code Section
152) or expenses necessary for these persons to obtain medical care;
(3) Payment of tuition and related educational fees for the next 12
months of post-secondary education for the Participant, his spouse, children, or
dependents; or
18. Section 11.8(c)(1) is amended in its entirety to read as follows:
(1) The distribution is not in excess of the amount of the immediate
and heavy financial need of the Participant. The amount of the immediate and
heavy financial need may include any amounts necessary to pay any federal, state
or local income taxes or penalties reasonable anticipated to result from the
distribution.
19. Article XI is amended by the addition of the following:
Notwithstanding anything in this Article to the contrary, effective as
of the Plan Year in which this amendment becomes effective, the Actual Deferral
Percentage Test and the Actual Contribution Percentage Test shall be applied
(and adjusted) by applying the Family Member aggregation rules of Code Section
414(q)(6).
20. Section E1a. of the Adoption Agreement is amended in its entirety to
read as follows:
Compensation with respect to any Participant means:
1. ( ) Wages, Tips and other Compensation
(Box 1 on Form W-2).
<PAGE>
2. ( ) Section 3401(a) wages (wages for withholding
purposes.
3. ( ) 415 Safe-harbor compensation.
AND Compensation
( ) shall
( ) shall not
exclude (even if includible in gross income) reimbursements or other
expense allowances, fringe benefits (cash or noncash), moving expenses,
deferred compensation, and welfare benefits.
21. Section E3 of the 401(k) Adoption Agreement(s) is amended by the addition of
the following:
( Notwithstanding anything in the Plan to the contrary, all
matching contributions which relate to distributions of
Excess Deferred Compensation, Excess Contributions and Excess
Aggregate Contributions shall be Forfeited. (Select this
option only if it is applicable.)
NOTE: THIS AMENDMENT ONLY NEEDS TO BE EXECUTED BELOW BY THE EMPLOYER IF THE PLAN
IS BEING AMENDED TO UTILIZE THE MODIFICATIONS MADE TO SECTION E1 OR E3 OF THE
ADOPTION AGREEMENT.
IN WITNESS WHEREOF, the Employer hereby causes this amendment to be
executed on this _____ day of _________, 19__ .
EMPLOYER: PARTICIPATING EMPLOYER:
_________________________________ _________________________
(enter name) (enter name)
By:______________________________ By:____________________________
<PAGE>
AMENDMENT
TO
W.E. STANLEY & COMPANY, INC. REGIONAL PROTOTYPE
DEFINED CONTRIBUTION PLAN & TRUST
1. Section 1.9 is amended by the addition of the following:
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 Internal Revenue 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 plan year beginning on or after
January 1, 1994, the OBRA '93 annual compensation limit is $150,000.
2. Section 6.13 is amended by the addition of the following:
If a distribution is one to which Section 401(a)(11) and 417
of the Internal Revenue Code do not apply, such distribution may
commence less than 30 days after the notice required under Section
1.411(a)-11(c) of the Income Tax Regulations is given, provided that:
(1) the plan administrator clearly informs the participant
that the participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not to
elect a distribution (and, if applicable, a particular distribution
option), and
<PAGE>
(2) the participant, after receiving the notice, affirmatively
elects a distribution.
3. Section 7.10 is amended by the addition of the following:
(a) Notwithstanding any provision of the plan to the contrary,
with respect to distributions made after December 31, 1992, a
Participant shall be permitted to elect to have any "eligible rollover
distribution" transferred directly to an "eligible retirement plan"
specified by the Participant. The Plan provisions otherwise applicable
to distributions continue to apply to the direct transfer option. The
Participant shall, in the time and manner prescribed by the
Administrator, specify the amount to be directly transferred and the
"eligible retirement plan" to receive the transfer. Any portion of a
distribution which is not transferred shall be distributed to the
Participant.
(b) For purposes of this Section, the term "eligible rollover
distribution" means any distribution other than a distribution of
substantially equal periodic payments over the life or life expectancy
of the Participant (or joint life or joint life expectancies of the
Participant and the designated beneficiary) or a distribution over a
period certain of ten years or more. Amounts required to be distributed
under Code Section 401(a)(9) are not eligible rollover distributions.
The direct transfer option described in subsection (a) applies only to
eligible rollover distributions which would otherwise be includible in
gross income if not transferred.
(c) For purposes of this Section, the term "eligible
retirement plan" means an individual retirement account as described in
Code Section 408(a), an individual retirement annuity as described in
Code Section 408(b), an annuity plan as described in Code Section
403(a), or a defined contribution plan as described in Code Section
401(a) which is exempt from tax under Code Section 501(a) and which
accepts rollover distributions.
(d) The election described in subsection (a) also applies to
the surviving spouse after the Participant's death; however,
distributions to the surviving spouse may only be transferred to an
individual retirement account or individual retirement annuity. For
purposes of subsection (a), a spouse of former spouse who is the
alternate payee under a qualified domestic relations order as defined
in Code Section 414(p) will be treated as the Participant.
ACCOUNTANT'S CONSENT
EXHIBIT 23
CONSENT OF ARTHUR ANDERSEN LLP
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement of our report dated
February 28, 1999 included in Vista Eyecare, Inc.'s Form 10-K for the year ended
January 2, 1999 and to all references to our firm included in or made a part of
this Registration Statement.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Atlanta, Georgia
July 29, 1999
