<PAGE>
As filed with the Securities and Exchange Commission on June 30, 1997.
Registration No. 333-
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________________
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
ACTIVE VOICE CORPORATION
(Exact name of Registrant as specified in its charter)
WASHINGTON 91-1235111
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2901 THIRD AVENUE, SUITE 500
SEATTLE, WASHINGTON 98121-9800
(Address of principal executive offices)
ACTIVE VOICE 401(k) PLAN
(Full title of the plan)
JOSE S. DAVID
CHIEF FINANCIAL OFFICER
2901 THIRD AVENUE, SUITE 500
SEATTLE, WASHINGTON 98121-9800
(Name and address of agent for service)
(206) 441-4700
(Telephone number, including area code, of agent for service)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES TO BE AMOUNT TO PROPOSED MAXIMUM AGGREGATE OFFERING REGISTRATION
REGISTERED BE REGISTERED OFFERING PRICE PER SHARE(1) PRICE FEE(1)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, no par value 100,000 shares $ 12.5625 $ 1,256,250.00 $ 381.00
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The proposed maximum offering price per share and the registration fee were
calculated in accordance with rule 457(c) and (h) based on the average of
the high and low prices for shares of the registrant's Common Stock on June
26, 1997, as quoted by the Nasdaq National Market, which was $12.5625 per
share.
In addition, 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.
Exhibit Index begins at page II-7
<PAGE>
PART II.INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
Active Voice Corporation (the "Registrant") and the Active Voice 401(k) Plan
(the "Plan") hereby incorporate by reference into this Registration Statement
the documents listed in (a) through (d) below.
(a) The Registrant's latest Annual Report on Form 10-K filed pursuant to
Section 13(a) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), for the Company's fiscal year ended
March 31, 1997.
(b) The Plan's latest annual report on Form 11-K filed pursuant to Section
15(d) of the Exchange Act for the Plan's fiscal year ended March 31,
1997.
(c) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the filing of the Form 10-K referred to in (a)
above.
(d) The description of the Registrant's Common Stock set forth in the
Registration Statement on Form 8-A filed by the Registrant with the
Securities and Exchange Commission on November 4, 1993, under Section
12(g) of the Exchange Act
All documents filed by the Registrant pursuant to Section 13(a), 14, or 15(d) of
the Exchange Act after the date hereof and prior to the filing of a post-
effective amendment which indicates that all securities offered have been sold
or which deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference herein and to be part hereof from the date of filing
of such documents.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
None.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Sections 23B.08.500 through 23B.08.600 of the Washington Business
Corporation Act (the "WBCA") authorize a court to award, or a corporation's
board of directors to grant, indemnification to directors and officers on terms
sufficiently broad to permit indemnification under certain circumstances for
liabilities arising under the Securities Act of 1933, as amended. Section 5.5
of the Registrant's Restated Articles of Incorporation and Article 10 of the
Registrant's Restated Bylaws provide for indemnification of the Registrant's
directors, officers, employees and agents to the maximum extent permitted by
Washington law. The directors and officers of the Registrant also may be
indemnified against liability they may incur for serving in that capacity
pursuant to one or more liability insurance policies maintained by the
Registrant for such purpose. The Registrant currently maintains a policy of
directors' and officers' liability insurance with an aggregate coverage limit of
$1 million.
Section 23B.08.320 of the WBCA authorizes a corporation to limit a
director's liability to the corporation or its shareholders for monetary damages
for acts or omissions as a director, except in certain circumstances involving
intentional misconduct, self-dealing or illegal corporate loans or
distributions, or any transaction from which the director personally receives a
benefit in money, property or services to which the director is not legally
entitled. Section 5.5 of the Registrants Restated Articles of Incorporation
contains provisions implementing, to the fullest extent permitted by Washington
law, such limitations on a director's liability to the Registrant and its
shareholders.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
II-1
<PAGE>
ITEM 8. EXHIBITS.
Exhibit Number
- --------------
4.1 Active Voice 401(k) Plan
5.1 Opinion of Graham and James L.L.P./ Riddell Williams P.S.
23.1 Consent of Graham and James L.L.P./ Riddell Williams
P.S.(included in Exhibit 5.1)
23.2 Consent of Ernst & Young LLP
24.1 Power of Attorney (See page II-6 of this Registration Statement)
The Registrant hereby undertakes to submit the Plan and any amendment
thereto to the Internal Revenue Service ("IRS") in a timely manner and will make
all changes required by the IRS to qualify the Plan.
ITEM 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement
(or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would
not exceed that which was registered) and any deviation
from the low or high and of the estimated maximum
offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent
no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3 and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by reference in this
registration statement.
(2) That for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Exchange Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act, (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in 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.
II-2
<PAGE>
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the 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 of 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-3
<PAGE>
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Act of 1933, the
Plan Administrator has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the city of
Seattle, Washington on this 23rd day of June 1997.
ACTIVE VOICE CORPORATION, Plan Administrator of the
Active Voice 401(k) Plan
By /s/ Jose S. David
------------------------------------
Jose S. David
Chief Financial Officer
II-4
<PAGE>
THE REGISTRANT. Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the city of Seattle, Washington on this 23rd day of June,
1997.
ACTIVE VOICE CORPORATION
By /s/ Jose S. David
--------------------------
Jose S. David
Chief Financial Officer
II-5
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Robert
L. Richmond and Jose S. David, or either of them, his attorney-in-fact, with the
power of substitution, for him in any and all capacities, to sign any amendments
to this Registration Statement, 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 of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Robert L. Richmond Chief Executive Officer and Chairman June 23, 1997
- --------------------------- of the Board
Robert L. Richmond (Principal Executive Officer)
/s/ Robert C. Greco Chief Technology Officer, Secretary, June 23, 1997
- --------------------------- Treasurer and Director
Robert C. Greco
/s/ Jose S. David Chief Financial Officer June 23, 1997
- --------------------------- (Principal Financial and
Jose S. David Accounting Officer)
/s/ Tom A. Alberg Director June 23, 1997
- ---------------------------
Tom A. Alberg
/s/ Harold H. Kawaguchi Director June 23, 1997
- ---------------------------
Harold H. Kawaguchi
</TABLE>
II-6
<PAGE>
EXHIBIT NUMBER EXHIBIT PAGE
- -------------- ------- ----
4.1 Active Voice 401(k) Plan
5.1 Opinion of Graham and James L.L.P.
/ Riddell Williams P.S.
23.1 Consent of Graham and James L.L.P.
/ Riddell Williams P.S. (included in Exhibit 5.1)
23.2 Consent of Ernst & Young LLP
24.1 Power of Attorney (See page II-6 of
this Registration Statement)
II-7
<PAGE>
ADOPTION AGREEMENT #008
NONSTANDARDIZED CODE SECTION 401(k) PROFIT SHARING PLAN
The undersigned, ACTIVE VOICE CORPORATION ("Employer"), by executing this
Adoption Agreement, elects to become a participating Employer in the BOGLE &
GATES P.L.L.C. DEFINED CONTRIBUTION PROTOTYPE PLAN (basic plan document #1) by
adopting the accompanying Plan and Trust in full as if the Employer were a
signatory to that Agreement. The Employer makes the following elections granted
under the provisions of the Prototype Plan.
ARTICLE I
DEFINITIONS
1.02 TRUSTEE. The Trustee executing this Adoption Agreement is: (CHOOSE
(a) OR (b))
/ / (a) A discretionary Trustee. See Section 10.03[A] of the Plan.
/X/ (b) A nondiscretionary Trustee. See Section 10.03[B] of the Plan. [NOTE:
THE EMPLOYER MAY NOT ELECT OPTION (b) IF A CUSTODIAN EXECUTES THE ADOPTION
AGREEMENT.]
1.03 PLAN. The name of the Plan as adopted by the Employer is ACTIVE VOICE
CORPORATION 401(k) PLAN.
1.07 EMPLOYEE. The following Employees are not eligible to participate in
the Plan: (CHOOSE (a) OR AT LEAST ONE OF (b) THROUGH (g))
/ / (a) No exclusions.
/X/ (b) Collective bargaining employees (as defined in Section 1.07 of the
Plan). [NOTE: IF THE EMPLOYER EXCLUDES UNION EMPLOYEES FROM THE PLAN, THE
EMPLOYER MUST BE ABLE TO PROVIDE EVIDENCE THAT RETIREMENT BENEFITS WERE THE
SUBJECT OF GOOD FAITH BARGAINING.]
/ / (c) Nonresident aliens who do not receive any earned income (as defined in
Code Section 911(d)(2)) from the Employer which constitutes United States
source income (as defined in Code Section 861(a)(3)).
/ / (d) Commission Salesmen.
/ / (e) Any Employee compensated on a salaried basis.
/ / (f) Any Employee compensated on an hourly basis.
/X/ (g) ANY PERSON PERFORMING SERVICES FOR THE EMPLOYER WHO IS NOT
CONTEMPORANEOUSLY TREATED AS A COMMON LAW EMPLOYEE ON THE EMPLOYER'S
PAYROLL RECORDS AND PERSONNEL RECORDS, INCLUDING, BUT NOT LIMITED TO, ANY
PERSON (i) WHO THE EMPLOYER TREATS AS AN INDEPENDENT CONTRACTOR, (ii) WHO
IS PAID THROUGH A THIRD-PARTY BUSINESS ENTITY'S PAYROLL, OR (iii) WHO IS
HIRED THROUGH AN AGREEMENT WITH AN EMPLOYEE STAFFING AGENCY, REGARDLESS OF
WHETHER THE RELATIONSHIP BETWEEN THE EMPLOYER AND THE PERSON SUBSEQUENTLY
IS DETERMINED TO BE AN EMPLOYER/COMMON LAW EMPLOYEE RELATIONSHIP BECAUSE OF
(a) RECLASSIFICATION BY A GOVERNMENTAL AGENCY (WHETHER RETROACTIVELY OR
PROSPECTIVELY), (b) DECISION BY A COURT, MEDIATION, ARBITRATION , OR
SIMILAR PROCEEDING, OR (c) MUTUAL AGREEMENT BETWEEN THE EMPLOYER AND THE
PERSON.
LEASED EMPLOYEES. Any Leased Employee treated as an Employee under Section 1.31
of the Plan, is: (CHOOSE (h) OR (i))
/X/ (h) Not eligible to participate in the Plan.
/ / (i) Eligible to participate in the Plan, unless excluded by reason of an
exclusion classification elected under this Adoption Agreement
Section 1.07.
RELATED EMPLOYERS. If any member of the Employer's related group (as defined in
Section 1.30 of the Plan) executes a Participation Agreement to this
Adoption Agreement, such member's Employees are eligible to participate in this
Plan, unless excluded by reason of an exclusion classification elected under
this Adoption Agreement Section 1.07. In addition: (CHOOSE (j) OR (k))
1
<PAGE>
/X/ (j) No other related group member's Employees are eligible to participate
in the Plan.
/ / (k) The following nonparticipating related group member's Employees are
eligible to participate in the Plan unless excluded by reason of an
exclusion classification elected under this Adoption Agreement
Section 1.07:_______________________________________________________.
1.12 COMPENSATION.
TREATMENT OF ELECTIVE CONTRIBUTIONS. (CHOOSE (a) OR (b))
/X/ (a) "Compensation" includes elective contributions made by the Employer on
the Employee's behalf.
/ / (b) "Compensation" does not include elective contributions.
MODIFICATIONS TO COMPENSATION DEFINITION. (CHOOSE (c) OR AT LEAST ONE OF (d)
THROUGH (j))
/ / (c) No modifications other than as elected under Options (a) or (b).
/ / (d) The Plan excludes Compensation in excess of $__________________.
/ / (e) In lieu of the definition in Section 1.12 of the Plan, Compensation
means any earnings reportable as W-2 wages for Federal income tax
withholding purposes, subject to any other election under this
Adoption Agreement Section 1.12.
/X/ (f) The Plan excludes bonuses.
/ / (g) The Plan excludes overtime.
/ / (h) The Plan excludes Commissions.
/ / (i) Compensation will not include Compensation from a related employer (as
defined in Section 1.30 of the Plan) that has not executed a Participation
Agreement in this Plan unless, pursuant to Adoption Agreement Section 1.07,
the Employees of that related employer are eligible to participate in this
Plan.
/ / (j) (SPECIFY)______________________________________________________.
If, for any Plan Year, the Plan uses permitted disparity in the contribution or
allocation formula elected under Article III, any election of Options (f), (g),
(h) or (j) is ineffective for such Plan Year with respect to any Nonhighly
Compensated Employee.
SPECIAL DEFINITION FOR MATCHING CONTRIBUTIONS. "Compensation" for purposes of
any matching contribution formula under Article III means: (CHOOSE (k) OR (l)
ONLY IF APPLICABLE)
/X/ (k) Compensation as defined in this Adoption Agreement Section 1.12.
/ / (l) (SPECIFY)______________________________________________________.
SPECIAL DEFINITION FOR SALARY REDUCTION CONTRIBUTIONS. An Employee's salary
reduction agreement applies to his Compensation determined prior to the
reduction authorized by that salary reduction agreement, with the following
exceptions: (CHOOSE (m) OR AT LEAST ONE OF (n) OR (o), IF APPLICABLE)
/X/ (m) No exceptions.
/ / (n) If the Employee makes elective contributions to another plan
maintained by the Employer, the Advisory Committee will determine the
amount of the Employee's salary reduction contribution for the withholding
period: (CHOOSE (1) OR (2))
/ / (1) After the reduction for such period of elective contributions to
the other plan(s).
/ / (2) Prior to the reduction for such period of elective contributions
to the other plan(s).
/ / (o) (SPECIFY)______________________________________________________.
2
<PAGE>
1.17 PLAN YEAR/LIMITATION YEAR.
PLAN YEAR. Plan Year means: (CHOOSE (a) OR (b)) (SEE THE EFFECTIVE DATE
ADDENDUM.)
/X/ (a) The 12 consecutive month period ending every DECEMBER 31.
/ / (b) (SPECIFY) )____________________________________________________.
LIMITATION YEAR. The Limitation Year is: (CHOOSE (c) OR (d))
/X/ (c) The Plan Year.
/ / (d) The 12 consecutive month period ending every___________________.
1.18 EFFECTIVE DATE.
NEW PLAN. The "Effective Date" of the Plan is___________________________.
RESTATED PLAN. The restated Effective Date is APRIL 1, 1997.
This Plan is a substitution and amendment of an existing retirement plan(s)
originally established AUGUST 1, 1990. [NOTE: SEE THE EFFECTIVE DATE
ADDENDUM.]
1.27 HOUR OF SERVICE. The crediting method for Hours of Service is:
(CHOOSE (a) OR (b))
/X/ (a) The actual method.
/ / (b) The ___________________________________________ equivalency method,
except:
/ / (1) No exceptions.
/ / (2) The actual method applies for purposes of: (CHOOSE AT LEAST ONE)
/ / (i) Participation under Article II.
/ / (ii) Vesting under Article V.
/ / (iii) Accrual of benefits under Section 3.06.
[NOTE: ON THE BLANK LINE, INSERT "DAILY," "WEEKLY," "SEMI-MONTHLY PAYROLL
PERIODS" OR "MONTHLY."]
1.29 SERVICE FOR PREDECESSOR EMPLOYER. In addition to the predecessor
service the Plan must credit by reason of Section 1.29 of the Plan, the Plan
credits Service with the following predecessor employer(s): N/A. Service with
the designated predecessor employer(s) applies: (CHOOSE AT LEAST ONE OF (a) OR
(b); (c) IS AVAILABLE ONLY IN ADDITION TO (a) OR (b))
/ / (a) For purposes of participation under Article II.
/ / (b) For purposes of vesting under Article V.
/ / (c) Except the following Service:__________________________________.
[NOTE: IF THE PLAN DOES NOT CREDIT ANY PREDECESSOR SERVICE UNDER THIS
PROVISION, INSERT "N/A" IN THE FIRST BLANK LINE. THE EMPLOYER MAY ATTACH A
SCHEDULE TO THIS ADOPTION AGREEMENT, IN THE SAME FORMAT AS THIS SECTION 1.29,
DESIGNATING ADDITIONAL PREDECESSOR EMPLOYERS AND THE APPLICABLE SERVICE
CREDITING ELECTIONS.]
1.31 LEASED EMPLOYEES. If a Leased Employee is a Participant in the Plan
and also participates in a plan maintained by the leasing organization: (CHOOSE
(a) OR (b))
/ / (a) The Advisory Committee will determine the Leased Employee's allocation
of Employer the leasing organization's plan.
/X/ (b) The Advisory Committee will reduce a Leased Employee's allocation of
Employer nonelective contributions (other than designated qualified
nonelective contributions) under this Plan by the Leased Employee's
allocation under the leasing organization's plan, but only to the extent
that allocation is attributable to the Leased Employee's service provided
to the Employer. The leasing organization's plan:
/X/ (1) Must be a money purchase plan which would satisfy the
definition under
3
<PAGE>
Section 1.31 of a safe harbor plan, irrespective of whether the
safe harbor exception applies.
/ / (2) Must satisfy the features and, if a defined benefit plan,
the method of reduction described in an addendum to this
Adoption Agreement, numbered 1.31.
ARTICLE II
EMPLOYEE PARTICIPANTS
2.01 ELIGIBILITY.
ELIGIBILITY CONDITIONS. To become a Participant in the Plan, an Employee must
satisfy the following eligibility conditions: (CHOOSE (a) OR (b) OR BOTH; (c)
IS OPTIONAL AS AN ADDITIONAL ELECTION)
/X/ (a) Attainment of age 21 (SPECIFY AGE, NOT EXCEEDING 21).
/X/ (b) Service requirement. (CHOOSE ONE OF (1) THROUGH (3))
/ / (1) One Year of Service.
/X/ (2) 6 months (not exceeding 12) following the Employee's
Employment Commencement Date.
/ / (3) One Hour of Service.
/ / (c) Special requirements for non-401(k) portion of plan. (MAKE ELECTIONS
UNDER (1) AND UNDER (2))
(1) The requirements of this Option (c) apply to participation in:
(CHOOSE AT LEAST ONE OF (i) THROUGH (iii))
/ / (i) The allocation of Employer nonelective contributions
and Participant forfeitures.
/ / (ii) The allocation of Employer matching contributions
(including forfeitures allocated as matching contributions).
/ / (iii) The allocation of Employer qualified nonelective
contributions.
(2) For participation in the allocations described in (1), the
eligibility conditions are: (CHOOSE AT LEAST ONE OF (i) THROUGH
(iv))
/ / (i) ___(one or two) Year(s) of Service, without an
intervening Break in Service (as described in
Section 2.03(A) of the Plan) if the requirement is two Years
of Service.
/ / (ii) ___months (not exceeding 24) following the Employee's
Employment Commencement Date.
/ / (iii) ___One Hour of Service.
/ / (iv) Attainment of age ____________ (Specify age, not
exceeding 21).
PLAN ENTRY DATE. "Plan Entry Date" means the Effective Date and: (CHOOSE (d),
(e) OR (f))
/ / (d) Semi-annual Entry Dates. The first day of the Plan Year and the first
day of the seventh month of the Plan Year.
/ / (e) The first day of the Plan Year.
/X/ (f) (SPECIFY ENTRY DATES) The first day of April, July, October, and
January of each Plan year.
TIME OF PARTICIPATION. An Employee will become a Participant (and, if
applicable, will participate in the allocations described in Option (c)(1)),
unless excluded under Adoption Agreement Section 1.07, on the Plan Entry Date
(if employed on that date): (CHOOSE (g), (h) OR (i))
4
<PAGE>
/X/ (g) immediately following
/ / (h) immediately preceding
/ / (i) nearest
the date the Employee completes the eligibility conditions described in Options
(a) and (b) (or in Option (c)(2) if applicable) of this Adoption Agreement
Section 2.01. [NOTE: THE EMPLOYER MUST COORDINATE THE SELECTION OF (g), (h) OR
(i) WITH THE "PLAN ENTRY DATE" SELECTION IN (d), (e) OR (f). UNLESS OTHERWISE
EXCLUDED UNDER SECTION 1.07, THE EMPLOYEE MUST BECOME A PARTICIPANT BY THE
EARLIER OF: (1) THE FIRST DAY OF THE PLAN YEAR BEGINNING AFTER THE DATE THE
EMPLOYEE COMPLETES THE AGE AND SERVICE REQUIREMENTS OF CODE SECTION 410(a); OR
(2) 6 MONTHS AFTER THE DATE THE EMPLOYEE COMPLETES THOSE REQUIREMENTS.]
DUAL ELIGIBILITY. The eligibility conditions of this Section 2.01 apply to:
(CHOOSE (j) OR (k))
/X/ (j) All Employees of the Employer, except: (CHOOSE (1) OR (2))
/X/ (1) No exceptions.
/ / (2) Employees who are Participants in the Plan as of the
Effective Date.
(k) Solely to an Employee employed by the Employer after . If the
Employee was employed by the Employer on or before the specified date, the
Employee will become a Participant: (CHOOSE (1), (2) OR (3))
/ / (1) On the latest of the Effective Date, his Employment
Commencement Date or the date he attains age (not to
exceed 21).
/ / (2) Under the eligibility conditions in effect under the Plan
prior to the restated Effective Date. If the restated Plan
required more than one Year of Service to participate, the
eligibility condition under this Option (2) for participation in
the Code Section 401(k) arrangement under this Plan is one Year
of Service for Plan Years beginning after December 31, 1988.
[FOR RESTATED PLANS ONLY]
/ / (3) (SPECIFY)____________________________________________.
2.02 YEAR OF SERVICE - PARTICIPATION.
HOURS OF SERVICE. An Employee must complete: (CHOOSE (a) OR (b))
/ / (a) 1,000 Hours of Service
/X/ (b) 500 Hours of Service
during an eligibility computation period to receive credit for a Year of
Service. [NOTE: THE HOURS OF SERVICE REQUIREMENT MAY NOT EXCEED 1,000.]
ELIGIBILITY COMPUTATION PERIOD. After the initial eligibility computation
period described in Section 2.02 of the Plan, the Plan measures the eligibility
computation period as: (CHOOSE (c) OR (d))
/ / (c) The 12 consecutive month period beginning with each anniversary of an
Employee's Employment Commencement Date.
/X/ (d) The Plan Year, beginning with the Plan Year which includes the first
anniversary of the Employee's Employment Commencement Date.
2.03 BREAK IN SERVICE - PARTICIPATION. The Break in Service rule described
in Section 2.03(B) of the Plan: (CHOOSE (a) OR (b))
/X/ (a) Does not apply to the Employer's Plan.
/ / (b) Applies to the Employer's Plan.
2.06 ELECTION NOT TO PARTICIPATE. The Plan: (CHOOSE (a) OR (b))
/X/ (a) Does not permit an eligible Employee or a Participant to elect not to
participate.
5
<PAGE>
/ / (b) Does permit an eligible Employee or a Participant to elect not to
participate in accordance with Section 2.06 and with the following rules:
(COMPLETE (1), (2), (3) AND (4))
(1) An election is effective for a Plan Year if filed no later
than_______________.
(2) An election not to participate must be effective for at least
__________________Plan Year(s).
(3) Following a re-election to participate, the Employee or
Participant:
/ / (i) May not again elect not to participate for any subsequent
Plan Year.
/ / (ii) May again elect not to participate, but not earlier than the
______________Plan Year following the Plan Year in which the
re-election first was effective.
(4) (SPECIFY)___________________________. [INSERT "N/A" IF NO OTHER
RULES APPLY].
ARTICLE III
EMPLOYER CONTRIBUTIONS AND FORFEITURES
3.01 AMOUNT.
PART I. [OPTIONS (a) THROUGH (g)] AMOUNT OF EMPLOYER'S CONTRIBUTION. The
Employer's annual contribution to the Trust will equal the total amount of
deferral contributions, matching contributions, qualified nonelective
contributions and nonelective contributions, as determined under this
Section 3.01. (CHOOSE ANY COMBINATION OF (a), (b), (c) AND (d), OR CHOOSE (e))
/X/ (a) DEFERRAL CONTRIBUTIONS (CODE SECTION 401(k) ARRANGEMENT). (CHOOSE (1)
OR (2) OR BOTH)
/X/ (1) Salary reduction arrangement. The Employer must contribute
the amount by which the Participants have reduced their
Compensation for the Plan Year, pursuant to their salary
reduction agreements on file with the Advisory Committee. A
reference in the Plan to salary reduction contributions is a
reference to these amounts.
/ / (2) Cash or deferred arrangement. The Employer will contribute
on behalf of each Participant the portion of the Participant's
proportionate share of the cash or deferred contribution which he
has not elected to receive in cash. See Section 14.02 of the
Plan. The Employer's cash or deferred contribution is the amount
the Employer may from time to time deem advisable which the
Employer designates as a cash or deferred contribution prior to
making that contribution to the Trust.
/X/ (b) MATCHING CONTRIBUTIONS. The Employer will make matching contributions
in accordance with the formula(s) elected in Part II of this
Adoption Agreement Section 3.01.
/X/ (c) DESIGNATED QUALIFIED NONELECTIVE CONTRIBUTIONS. The Employer, in its
sole discretion, may contribute an amount which it designates as a
qualified nonelective contribution.
/ / (d) NONELECTIVE CONTRIBUTIONS. (CHOOSE ANY COMBINATION OF (1) THROUGH
(4))
/ / (1) Discretionary contribution. The amount (or additional
amount) the Employer may from time to time deem advisable.
/ / (2) The amount (or additional amount) the Employer may from time
to time deem advisable, separately determined for each of the
following classifications of Participants: (CHOOSE (i) OR (ii))
/ / (i) Nonhighly Compensated Employees and Highly Compensated
Employees.
/ / (ii) (SPECIFY CLASSIFICATIONS)_______________________.
6
<PAGE>
Under this Option (2), the Advisory Committee will allocate the amount
contributed for each Participant classification in accordance with Part II
of Adoption Agreement Section 3.04, as if the Participants in that
classification were the only Participants in the Plan.
/ / (3) ___% of the Compensation of all Participants under the
Plan, determined for the Employer's taxable year for which it
makes the contribution. [NOTE: THE PERCENTAGE SELECTED MAY NOT
EXCEED 15%.]
/ / (4) ___% of Net Profits but not more than $__________.
/ / (e) FROZEN PLAN. This Plan is a frozen Plan effective_____________. The
Employer will not contribute to the Plan with respect to any period
following the stated date.
NET PROFITS. The Employer: (CHOOSE (f) OR (g))
/X/ (f) Need not have Net Profits to make its annual contribution under this
Plan.
/ / (g) Must have current or accumulated Net Profits exceeding $_______to make
the following contributions: (CHOOSE AT LEAST ONE)
/ / (1) Cash or deferred contributions described in Option (a)(2).
/ / (2) Matching contributions described in Option (b),
except:__________.
/ / (3) Qualified nonelective contributions described in Option (c).
/ / (4) Nonelective contributions described in Option (d).
The term "Net Profits" means the Employer's net income or profits for any
taxable year determined by the Employer upon the basis of its books of account
in accordance with generally accepted accounting practices consistently applied
without any deductions for Federal and state taxes upon income or for
contributions made by the Employer under this Plan or under any other employee
benefit plan the Employer maintains. The term "Net Profits" specifically
excludes________. [NOTE: ENTER "N/A" IF NO EXCLUSIONS APPLY.]
If the Employer requires Net Profits for matching contributions and the Employer
does not have sufficient Net Profits under Option (g), it will reduce the
matching contribution under a fixed formula on a pro rata basis for all
Participants. A Participant's share of the reduced contribution will bear the
same ratio as the matching contribution the Participant would have received if
Net Profits were sufficient bears to the total matching contribution all
Participants would have received if Net Profits were sufficient. If more than
one member of a related group (as defined in Section 1.30) execute this
Adoption Agreement, each participating member will determine Net Profits
separately but will not apply this reduction unless, after combining the
separately determined Net Profits, the aggregate Net Profits are insufficient to
satisfy the matching contribution liability. "Net Profits" includes both
current and accumulated Net Profits.
PART II. [OPTIONS (h) THROUGH (j)] MATCHING CONTRIBUTION FORMULA. [NOTE: IF
THE EMPLOYER ELECTED OPTION (b), COMPLETE OPTIONS (h), (i) AND (j).]
/X/ (h) AMOUNT OF MATCHING CONTRIBUTIONS. For each Plan Year, the Employer's
matching contribution is: (CHOOSE ANY COMBINATION OF (1), (2), (3), (4)
AND (5))
/ / (1) An amount equal to___% of each Participant's eligible
contributions for the Plan Year.
/ / (2) An amount equal to___% of each Participant's first tier of
eligible contributions for the Plan Year, plus the following
matching percentage(s) for the following subsequent tiers of
eligible contributions for the Plan Year:___________.
/X/ (3) Discretionary formula.
/X/ (i) An amount (or additional amount) equal to a matching
percentage the Employer from time to time may deem advisable
of the Participant's eligible contributions for the Plan
Year.
7
<PAGE>
/ / (ii) An amount (or additional amount) equal to a matching
percentage the Employer from time to time may deem advisable
of each tier of the Participant's eligible contributions for
the Plan Year.
/ / (4) An amount equal to the following percentage of each
Participant's eligible contributions for the Plan Year, based on
the Participant's Years of Service:
NUMBER OF YEARS OF SERVICE MATCHING PERCENTAGE
______ _____
______ _____
______ _____
______ _____
The Advisory Committee will apply this formula by determining Years of
Service as follows:___.
/ / (5) A Participant's matching contributions may not: (CHOOSE (i)
OR (ii))
/ / (i) Exceed__________________________________________.
/ / (ii) Be less than____________________________________.
RELATED EMPLOYERS. If two or more related employers (as defined in
Section 1.30) contribute to this Plan, the related employers may elect different
matching contribution formulas by attaching to the Adoption Agreement a
separately completed copy of this Part II. NOTE: SEPARATE MATCHING
CONTRIBUTION FORMULAS CREATE SEPARATE CURRENT BENEFIT STRUCTURES THAT MUST
SATISFY THE MINIMUM PARTICIPATION TEST OF CODE SECTION 401(a)(26).]
/X/ (i) DEFINITION OF ELIGIBLE CONTRIBUTIONS. Subject to the requirements of
Option (j), the term "eligible contributions" means: (CHOOSE ANY
COMBINATION OF (1) THROUGH (3))
/X/ (1) Salary reduction contributions.
/ / (2) Cash or deferred contributions (including any part of the
Participant's proportionate share of the cash or deferred contribution
which the Employer defers without the Participant's election).
/ / (3) Participant mandatory contributions, as designated in
Adoption Agreement Section 4.01. See Section 14.04 of the Plan.
/X/ (j) AMOUNT OF ELIGIBLE CONTRIBUTIONS TAKEN INTO ACCOUNT. When determining
a Participant's eligible contributions taken into account under the
matching contributions formula(s), the following rules apply: (CHOOSE ANY
COMBINATION OF (1) THROUGH (4))
/X/ (1) The Advisory Committee will take into account all eligible
contributions credited for the Plan Year.
/ / (2) The Advisory Committee will disregard eligible contributions
exceeding______.
/ / (3) The Advisory Committee will treat as the first tier of eligible
contributions, an amount not exceeding:_____________________________.
The subsequent tiers of eligible contributions are:______________________.
/ / (4) (SPECIFY)______________________________________________________.
PART III. [OPTIONS (k) AND (l)]. SPECIAL RULES FOR CODE Section 401(k)
ARRANGEMENT. (CHOOSE (k) OR (l), OR BOTH, AS APPLICABLE)
/X/ (k) SALARY REDUCTION AGREEMENTS. The following rules and restrictions
apply to an Employee's salary reduction agreement: (MAKE A SELECTION UNDER
(1), (2), (3) AND (4))
(1) Limitation on amount. The Employee's salary reduction
contributions: (CHOOSE (i) OR AT
8
<PAGE>
LEAST ONE OF (ii) OR (iii))
/ / (i) No maximum limitation other than as provided in the
Plan.
(ii) May not exceed 20% of Compensation for the Plan Year,
subject to the annual additions limitation described in Part
2 of Article III and the 402(g) limitation described in
Section 14.07 of the Plan.
/X/ (iii) Based on percentages of Compensation must equal at
least___.
(2) An Employee may revoke, on a prospective basis, a salary
reduction agreement: (CHOOSE (i), (ii), (iii) OR (iv))
/ / (i) Once during any Plan Year but not later than _________
of the Plan Year.
/ / (ii) As of any Plan Entry Date.
/X/ (iii) As of the first day of any month.
/ / (iv) (SPECIFY, BUT MUST BE AT LEAST ONCE PER PLAN YEAR) .
(3) An Employee who revokes his salary reduction agreement may file a
new salary reduction agreement with an effective date: (CHOOSE (i),
(ii), (iii) OR (iv))
/ / (i) No earlier than the first day of the next Plan Year.
/X/ (ii) As of any subsequent Plan Entry Date.
/ / (iii) As of the first day of any month subsequent to the
month in which he revoked an Agreement.
/ / (iv) (SPECIFY, BUT MUST BE AT LEAST ONCE PER PLAN YEAR
FOLLOWING THE PLAN YEAR OF REVOCATION)____________________.
(4) A Participant may increase or may decrease, on a prospective
basis, his salary reduction percentage or dollar amount: (CHOOSE (i),
(ii), (iii) OR (iv))
/ / (i) As of the beginning of each payroll period.
/ / (ii) As of the first day of each month.
/X/ (iii) As of any Plan Entry Date.
/ / (iv) (SPECIFY, BUT MUST PERMIT AN INCREASE OR A DECREASE AT
LEAST ONCE PER PLAN YEAR)______________________________________.
/ / (l) CASH OR DEFERRED CONTRIBUTIONS. For each Plan Year for which the
Employer makes a designated cash or deferred contribution, a Participant
may elect to receive directly in cash not more than the following portion
(or, if less, the 402(g) limitation described in Section 14.07 of the Plan)
of his proportionate share of that cash or deferred contribution: (CHOOSE
(1) OR (2))
/ / (1) All or any portion.
/ / (2) _______________________%.
3.04 CONTRIBUTION ALLOCATION. The Advisory Committee will allocate
deferral contributions, matching contributions, qualified nonelective
contributions and nonelective contributions in accordance with Section 14.06 and
the elections under this Adoption Agreement Section 3.04.
PART I. [OPTIONS (a) THROUGH (d)]. SPECIAL ACCOUNTING ELECTIONS. (CHOOSE
WHICHEVER ELECTIONS ARE APPLICABLE TO THE EMPLOYER'S PLAN)
/X/ (a) MATCHING CONTRIBUTIONS ACCOUNT. The Advisory Committee will allocate
matching contributions to a Participant's: (CHOOSE (1) OR (2); (3) IS
AVAILABLE ONLY IN ADDITION TO (1))
9
<PAGE>
/X/ (1) Regular Matching Contributions Account.
/ / (2) Qualified Matching Contributions Account.
/ / (3) Except, matching contributions under Option(s)
___________________ of Adoption Agreement Section 3.01 are
allocable to the Qualified Matching Contributions Account.
/ / (b) SPECIAL ALLOCATION DATES FOR SALARY REDUCTION CONTRIBUTIONS. The
Advisory Committee will allocate salary reduction contributions as of the
Accounting Date and as of the following additional allocation
dates:_____________________.
/ / (c) SPECIAL ALLOCATION DATES FOR MATCHING CONTRIBUTIONS. The Advisory
Committee will allocate matching contributions as of the Accounting Date
and as of the following additional allocation dates:________________.
/X/ (d) DESIGNATED QUALIFIED NONELECTIVE CONTRIBUTIONS - DEFINITION OF
PARTICIPANT. For purposes of allocating the designated qualified
nonelective contribution, "Participant" means: (CHOOSE (1), (2) OR (3))
/X/ (1) All Participants.
/ / (2) Participants who are Nonhighly Compensated Employees for the
Plan Year.
/ / (3) (SPECIFY)____________________________________________.
PART II. METHOD OF ALLOCATION - NONELECTIVE CONTRIBUTION. Subject to any
restoration allocation required under Section 5.04, the Advisory Committee will
allocate and credit each annual nonelective contribution (and Participant
forfeitures treated as nonelective contributions) to the Employer Contributions
Account of each Participant who satisfies the conditions of Section 3.06, in
accordance with the allocation method selected under this Section 3.04. If the
Employer elects Option (e)(2), Option (g)(2) or Option (h), for the first 3% of
Compensation allocated to all Participants, "Compensation" does not include any
exclusions elected under Adoption Agreement Section 1.12 (other than the
exclusion of elective contributions), and the Advisory Committee must take into
account the Participant's Compensation for the entire Plan Year. (CHOOSE AN
ALLOCATION METHOD UNDER (e), (f), (g) OR (h); (i) IS MANDATORY IF THE EMPLOYER
ELECTS (f), (g) OR (h); (j) IS OPTIONAL IN ADDITION TO ANY OTHER ELECTION.)
/ / (e) NONINTEGRATED ALLOCATION FORMULA. (CHOOSE (1) OR (2)) N/A
/ / (1) The Advisory Committee will allocate the annual nonelective
contributions in the same ratio that each Participant's
Compensation for the Plan Year bears to the total Compensation of
all Participants for the Plan Year.
/ / (2) The Advisory Committee will allocate the annual nonelective
contributions in the same ratio that each Participant's
Compensation for the Plan Year bears to the total Compensation of
all Participants for the Plan Year. For purposes of this
Option (2), "Participant" means, in addition to a Participant who
satisfies the requirements of Section 3.06 for the Plan Year, any
other Participant entitled to a top heavy minimum allocation
under Section 3.04(B), but such Participant's allocation will not
exceed 3% of his Compensation for the Plan Year.
/ / (f) TWO-TIERED INTEGRATED ALLOCATION FORMULA - MAXIMUM DISPARITY. First,
the Advisory Committee will allocate the annual Employer nonelective
contributions in the same ratio that each Participant's Compensation plus
Excess Compensation for the Plan Year bears to the total Compensation plus
Excess Compensation of all Participants for the Plan Year. The allocation
under this paragraph, as a percentage of each Participant's Compensation
plus Excess Compensation, must not exceed the applicable percentage (5.7%,
5.4% or 4.3%) listed under the Maximum Disparity Table following
Option (i).
The Advisory Committee then will allocate any remaining nonelective
contributions in the same ratio that each Participant's Compensation for
the Plan Year bears to the total Compensation of all Participants for the
Plan Year.
/ / (g) THREE-TIERED INTEGRATED ALLOCATION FORMULA. First, the Advisory
Committee will allocate the
10
<PAGE>
annual Employer nonelective contributions in the same ratio that each
Participant's Compensation for the Plan Year bears to the total Compensation
of all Participants for the Plan Year. The allocation under this paragraph,
as a percentage of each Participant's Compensation may not exceed the
applicable percentage (5.7%, 5.4% or 4.3%) listed under the Maximum
Disparity Table following Option (i). Solely for purposes of the allocation
in this first paragraph, "Participant" means, in addition to a Participant
who satisfies the requirements of Section 3.06 for the Plan Year: (CHOOSE
(1) OR (2))
[ ] (1) No other Participant.
[ ] (2) Any other Participant entitled to a top heavy minimum
allocation under Section 3.04(B), but such Participant's
allocation under this Option (g) will not exceed 3% of his
Compensation for the Plan Year.
As a second tier allocation, the Advisory Committee will allocate the
nonelective contributions in the same ratio that each Participant's Excess
Compensation for the Plan Year bears to the total Excess Compensation of all
Participants for the Plan Year. The allocation under this paragraph, as a
percentage of each Participant's Excess Compensation, may not exceed the
allocation percentage in the first paragraph.
Finally, the Advisory Committee will allocate any remaining nonelective
contributions in the same ratio that each Participant's Compensation for the
Plan Year bears to the total Compensation of all Participants for the Plan
Year.
[ ] (h) FOUR-TIERED INTEGRATED ALLOCATION FORMULA. First, the Advisory
Committee will allocate the annual Employer nonelective contributions in
the same ratio that each Participant's Compensation for the Plan Year bears
to the total Compensation of all Participants for the Plan Year, but not
exceeding 3% of each Participant's Compensation. Solely for purposes of
this first tier allocation, a "Participant" means, in addition to any
Participant who satisfies the requirements of Section 3.06 for the Plan
Year, any other Participant entitled to a top heavy minimum allocation
under Section 3.04(B) of the Plan.
As a second tier allocation, the Advisory Committee will allocate the
nonelective contributions in the same ratio that each Participant's Excess
Compensation for the Plan Year bears to the total Excess Compensation of
all Participants for the Plan Year, but not exceeding 3% of each
Participant's Excess Compensation.
As a third tier allocation, the Advisory Committee will allocate the annual
Employer contributions in the same ratio that each Participant's
Compensation plus Excess Compensation for the Plan Year bears to the total
Compensation plus Excess Compensation of all Participants for the Plan
Year. The allocation under this paragraph, as a percentage of each
Participant's Compensation plus Excess Compensation, must not exceed the
applicable percentage (2.7%, 2.4% or 1.3%) listed under the Maximum
Disparity Table following Option (i).
The Advisory Committee then will allocate any remaining nonelective
contributions in the same ratio that each Participant's Compensation for
the Plan Year bears to the total Compensation of all Participants for the
Plan Year.
[ ] (i) EXCESS COMPENSATION. For purposes of Option (f), (g) or (h), "Excess
Compensation" means Compensation in excess of the following Integration
Level: (CHOOSE (1) OR (2))
[ ] (1) ____% (not exceeding 100%) of the taxable wage base, as
determined under Section 230 of the Social Security Act, in
effect on the first day of the Plan Year: (CHOOSE ANY
COMBINATION OF (i) AND (ii) OR CHOOSE (iii))
[ ] (i) Rounded ___ (but not exceeding the taxable wage base).
[ ] (ii) But not greater than $__________.
[ ] (iii) Without any further adjustment or limitation.
[ ] (2) $____________________ [NOTE: NOT EXCEEDING THE TAXABLE WAGE
BASE FOR THE PLAN YEAR IN WHICH THIS ADOPTION AGREEMENT FIRST IS
EFFECTIVE.]
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<PAGE>
MAXIMUM DISPARITY TABLE. For purposes of Options (f), (g) and (h), the
applicable percentage is:
<TABLE>
<CAPTION>
Integration Level (as Applicable Percentages for Applicable Percentages
percentage of taxable wage base) Option (f) or Option (g) for Option (h)
- -------------------------------- -------------------------- ----------------------
<S> <C> <C>
100% 5.7% 2.7%
More than 80% but less than 100% 5.4% 2.4%
More than 20% (but not less than
$10,001) and not more than 80% 4.3% 1.3%
20% (or $10,000, if greater) or less 5.7% 2.7%
</TABLE>
[ ] (j) ALLOCATION OFFSET. The Advisory Committee will reduce a Participant's
allocation otherwise made under Part II of this Section 3.04 by the
Participant's allocation under the following qualified plan(s) maintained
by the Employer: _______________________________________________________.
The Advisory Committee will determine this allocation reduction:
(CHOOSE (1) OR (2))
[ ] (1) By treating the term "nonelective contribution" as including all
amounts paid or accrued by the Employer during the Plan Year to the
qualified plan(s) referenced under this Option (j). If a Participant
under this Plan also participates in that other plan, the Advisory
Committee will treat the amount the Employer contributes for or during
a Plan Year on behalf of a particular Participant under such other
plan as an amount allocated under this Plan to that Participant's
Account for that Plan Year. The Advisory Committee will make the
computation of allocation required under the immediately preceding
sentence before making any allocation of nonelective contributions
under this Section 3.04.
[ ] (2) In accordance with the formula provided in an addendum to this
Adoption Agreement, numbered 3.04(j).
TOP HEAVY MINIMUM ALLOCATION - METHOD OF COMPLIANCE. If a Participant's
allocation under this Section 3.04 is less than the top heavy minimum
allocation to which he is entitled under Section 3.04(B): (CHOOSE (k) OR (l))
[X] (k) The Employer will make any necessary additional contribution to the
Participant's Account, as described in Section 3.04(B)(7)(a) of the Plan.
[ ] (l) The Employer will satisfy the top heavy minimum allocation under the
following plan(s) it maintains: _______________________________. However,
the Employer will make any necessary additional contribution to satisfy the
top heavy minimum allocation for an Employee covered only under this Plan
and not under the other plan(s) designated in this Option (l). See Section
3.04(B)(7)(b) of the Plan.
If the Employer maintains another plan, the Employer may provide in an
addendum to this Adoption Agreement, numbered Section 3.04, any modifications
to the Plan necessary to satisfy the top heavy requirements under Code
Section 416.
RELATED EMPLOYERS. If two or more related employers (as defined in Section
1.30) contribute to this Plan, the Advisory Committee must allocate all
Employer nonelective contributions (and forfeitures treated as nonelective
contributions) to each Participant in the Plan, in accordance with the
elections in this Adoption Agreement Section 3.04: (CHOOSE (m) OR (n))
[ ] (m) Without regard to which contributing related group member employs the
Participant.
[X] (n) Only to the Participants directly employed by the contributing
Employer. If a Participant receives Compensation from more than one
contributing Employer, the Advisory Committee will determine the
allocations under this Adoption Agreement Section 3.04 by prorating among
the participating Employers the Participant's Compensation and, if
applicable, the Participant's Integration Level under Option (i).
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<PAGE>
3.05 FORFEITURE ALLOCATION. Subject to any restoration allocation
required under Sections 5.04 or 9.14, the Advisory Committee will allocate a
Participant forfeiture in accordance with Section 3.04: (CHOOSE (a) OR (b);
(c) AND (d) ARE OPTIONAL IN ADDITION TO (a) OR (b))
[ ] (a) As an Employer nonelective contribution for the Plan Year in which the
forfeiture occurs, as if the Participant forfeiture were an additional
nonelective contribution for that Plan Year.
[X] (b) To reduce the Employer matching contributions and nonelective
contributions for the Plan Year: (CHOOSE (1) OR (2))
[X] (1) in which the forfeiture occurs.
[ ] (2) immediately following the Plan Year in which the forfeiture
occurs.
[X] (c) To the extent attributable to matching contributions: (CHOOSE (1), (2)
OR (3))
[ ] (1) In the manner elected under Options (a) or (b).
[ ] (2) First to reduce Employer matching contributions for the Plan
Year: (CHOOSE (i) OR (ii))
[ ] (i) in which the forfeiture occurs,
[ ] (ii) immediately following the Plan Year in which the
forfeiture occurs, then as elected in Options (a) or (b).
[X] (3) As a discretionary matching contribution for the Plan Year
in which the forfeiture occurs, in lieu of the manner elected
under Options (a) or (b).
[ ] (d) First to reduce the Plan's ordinary and necessary administrative
expenses for the Plan Year and then will allocate any remaining forfeitures
in the manner described in Options (a), (b) or (c), whichever applies. If
the Employer elects Option (c), the forfeitures used to reduce Plan
expenses: (CHOOSE (1) OR (2))
[ ] (1) relate proportionately to forfeitures described in
Option (c) and to forfeitures described in Options (a) or (b).
[ ] (2) relate first to forfeitures described in Option _________.
ALLOCATION OF FORFEITED EXCESS AGGREGATE CONTRIBUTIONS. The Advisory
Committee will allocate any forfeited excess aggregate contributions (as
described in Section 14.09): (CHOOSE (e), (f) OR (g))
[ ] (e) To reduce Employer matching contributions for the Plan Year: (CHOOSE
(1) OR (2))
[ ] (1) in which the forfeiture occurs.
[ ] (2) immediately following the Plan Year in which the forfeiture
occurs.
[X] (f) As Employer discretionary matching contributions for the Plan Year in
which forfeited, except the Advisory Committee will not allocate these
forfeitures to the Highly Compensated Employees who incurred the
forfeitures.
[ ] (g) In accordance with Options (a) through (d), whichever applies, except
the Advisory Committee will not allocate these forfeitures under Option (a)
or under Option (c)(3) to the Highly Compensated Employees who incurred the
forfeitures.
3.06 ACCRUAL OF BENEFIT.
COMPENSATION TAKEN INTO ACCOUNT. For the Plan Year in which the Employee
first becomes a Participant, the Advisory Committee will determine the
allocation of any cash or deferred contribution, designated qualified
nonelective contribution or nonelective contribution by taking into account:
(CHOOSE (a) OR (b))
[X] (a) The Employee's Compensation for the entire Plan Year.
[ ] (b) The Employee's Compensation for the portion of the Plan Year in which
the Employee actually is
13
<PAGE>
a Participant in the Plan.
ACCRUAL REQUIREMENTS. Subject to the suspension of accrual requirements of
Section 3.06(E) of the Plan, to receive an allocation of cash or deferred
contributions, matching contributions, designated qualified nonelective
contributions, nonelective contributions and Participant forfeitures, if any,
for the Plan Year, a Participant must satisfy the conditions described in the
following elections: (CHOOSE (c) OR AT LEAST ONE OF (d) THROUGH (f))
[ ] (c) SAFE HARBOR RULE. If the Participant is employed by the Employer on
the last day of the Plan Year, the Participant must complete at least one
Hour of Service for that Plan Year. If the Participant is not employed by
the Employer on the last day of the Plan Year, the Participant must
complete at least 501 Hours of Service during the Plan Year.
[X] (d) HOURS OF SERVICE CONDITION. The Participant must complete the
following minimum number of Hours of Service during the Plan Year: (CHOOSE
AT LEAST ONE OF (1) THROUGH (5))
[ ] (1) 1,000 Hours of Service.
[X] (2) (SPECIFY, BUT THE NUMBER OF HOURS OF SERVICE MAY NOT EXCEED
1,000) 500 HOURS OF SERVICE.
[X] (3) No Hour of Service requirement if the Participant terminates
employment during the Plan Year on account of: (CHOOSE (i), (ii)
OR (iii))
[X] (i) Death.
[X] (ii) Disability.
[X] (iii) Attainment of Normal Retirement Age in the current
Plan Year or in a prior Plan Year.
[ ] (4) ________ Hours of Service (not exceeding 1,000) if the
Participant terminates employment with the Employer during the
Plan Year, subject to any election in Option (3).
[ ] (5) No Hour of Service requirement for an allocation of the
following contributions: _______________________________________.
[X] (e) EMPLOYMENT CONDITION. The Participant must be employed by the
Employer on the last day of the Plan Year, irrespective of whether he
satisfies any Hours of Service condition under Option (d), with the
following exceptions: (CHOOSE (1) OR AT LEAST ONE OF (2) THROUGH (5))
[ ] (1) No exceptions.
[X] (2) Termination of employment because of death.
[X] (3) Termination of employment because of disability.
[X] (4) Termination of employment following attainment of Normal
Retirement Age.
[ ] (5) No employment condition for the following contributions: .
[ ] (f) (SPECIFY OTHER CONDITIONS, IF APPLICABLE): __________________________.
SUSPENSION OF ACCRUAL REQUIREMENTS. The suspension of accrual requirements
of Section 3.06(E) of the Plan: (CHOOSE (g), (h) OR (i))
[X] (g) Applies to the Employer's Plan.
[ ] (h) Does not apply to the Employer's Plan.
[ ] (i) Applies in modified form to the Employer's Plan, as described in an
addendum to this Adoption Agreement, numbered Section 3.06(E).
SPECIAL ACCRUAL REQUIREMENTS FOR MATCHING CONTRIBUTIONS. If the Plan allocates
matching contributions on two or more allocation dates for a Plan Year, the
Advisory Committee, unless otherwise specified in Option (l), will apply
14
<PAGE>
any Hours of Service condition by dividing the required Hours of Service on a
pro rata basis to the allocation periods included in that Plan Year.
Furthermore, a Participant who satisfies the conditions described in this
Adoption Agreement Section 3.06 will receive an allocation of matching
contributions (and forfeitures treated as matching contributions) only if the
Participant satisfies the following additional condition(s): (CHOOSE (j) OR
AT LEAST ONE OF (k) OR (l))
[X] (j) No additional conditions.
[ ] (k) The Participant is not a Highly Compensated Employee for the Plan
Year. This Option (k) applies to: (CHOOSE (1) OR (2))
[ ] (1) All matching contributions.
[ ] (2) Matching contributions described in Option(s) __________ of
Adoption Agreement Section 3.01.
[ ] (l) (SPECIFY) ___________________________________________________________.
3.15 MORE THAN ONE PLAN LIMITATION. If the provisions of Section 3.15
apply, the Excess Amount attributed to this Plan equals: (CHOOSE (a), (b) OR
(c))
[X] (a) The product of:
(i) the total Excess Amount allocated as of such date (including any
amount which the Advisory Committee would have allocated but for the
limitations of Code Section 415), times
(ii) the ratio of (1) the amount allocated to the Participant as of
such date under this Plan divided by (2) the total amount allocated as
of such date under all qualified defined contribution plans
(determined without regard to the limitations of Code Section 415).
[ ] (b) The total Excess Amount.
[ ] (c) None of the Excess Amount.
3.18 DEFINED BENEFIT PLAN LIMITATION.
APPLICATION OF LIMITATION. The limitation under Section 3.18 of the Plan:
(CHOOSE (a) OR (b))
[X] (a) Does not apply to the Employer's Plan because the Employer does not
maintain and never has maintained a defined benefit plan covering any
Participant in this Plan.
[ ] (b) Applies to the Employer's Plan. To the extent necessary to satisfy
the limitation under Section 3.18, the Employer will reduce: (CHOOSE (1)
OR (2))
[ ] (1) The Participant's projected annual benefit under the defined
benefit plan under which the Participant participates.
[ ] (2) Its contribution or allocation on behalf of the Participant
to the defined contribution plan under which the Participant
participates and then, if necessary, the Participant's projected
annual benefit under the defined benefit plan under which the
Participant participates.
[NOTE: IF THE EMPLOYER SELECTS (a), THE REMAINING OPTIONS IN THIS SECTION 3.18
DO not APPLY TO THE EMPLOYER'S PLAN.]
COORDINATION WITH TOP HEAVY MINIMUM ALLOCATION. The Advisory Committee will
apply the top heavy minimum allocation provisions of Section 3.04(B) of the
Plan with the following modifications: (CHOOSE (c) OR AT LEAST ONE OF (d) OR
(e))
[ ] (c) No modifications.
[ ] (d) For Non-Key Employees participating only in this Plan, the top heavy
minimum allocation is the minimum allocation described in Section 3.04(B)
determined by substituting _________% (not less than 4%) for "3%," except:
(CHOOSE (i) OR (ii))
[ ] (i) No exceptions.
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[ ] (ii) Plan Years in which the top heavy ratio exceeds 90%.
[ ] (e) For Non-Key Employees also participating in the defined benefit plan,
the top heavy minimum is: (CHOOSE (1) OR (2))
[ ] (1) 5% of Compensation (as determined under Section 3.04(B) or
the Plan) irrespective of the contribution rate of any Key
Employee, except: (CHOOSE (i) OR (ii))
[ ] (i) No exceptions.
[ ] (ii) Substituting "7 1/2%" for "5%" if the top heavy ratio
does not exceed 90%.
[ ] (2) 0%. [NOTE: THE EMPLOYER MAY NOT SELECT THIS OPTION (2)
UNLESS THE DEFINED BENEFIT PLAN SATISFIES THE TOP HEAVY MINIMUM
BENEFIT REQUIREMENTS OF CODE SECTION 416 FOR THESE NON-KEY
EMPLOYEES.]
ACTUARIAL ASSUMPTIONS FOR TOP HEAVY CALCULATION. To determine the top heavy
ratio, the Advisory Committee will use the following interest rate and
mortality assumptions to value accrued benefits under a defined benefit plan:
____________________________________________________________________________.
If the elections under this Section 3.18 are not appropriate to satisfy the
limitations of Section 3.18, or the top heavy requirements under Code Section
416, the Employer must provide the appropriate provisions in an addendum to
this Adoption Agreement.
ARTICLE IV
PARTICIPANT CONTRIBUTIONS
4.01 PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS. The Plan: (CHOOSE (a) OR
(b); (c) IS AVAILABLE ONLY WITH (b))
[X] (a) Does not permit Participant nondeductible contributions.
[ ] (b) Permits Participant nondeductible contributions, pursuant to
Section 14.04 of the Plan.
[ ] (c) The following portion of the Participant's nondeductible contributions
for the Plan Year are mandatory contributions under Option (i)(3) of
Adoption Agreement Section 3.01: (CHOOSE (1) OR (2))
[ ] (1) The amount which is not less than: ________________________.
[ ] (2) The amount which is not greater than: _____________________.
ALLOCATION DATES. The Advisory Committee will allocate nondeductible
contributions for each Plan Year as of the Accounting Date and the following
additional allocation dates: (CHOOSE (d) OR (e))
[X] (d) No other allocation dates.
[ ] (e) (SPECIFY) ___________________________________________________________.
As of an allocation date, the Advisory Committee will credit all
nondeductible contributions made for the relevant allocation period. Unless
otherwise specified in (e), a nondeductible contribution relates to an
allocation period only if actually made to the Trust no later than 30 days
after that allocation period ends.
4.05 PARTICIPANT CONTRIBUTION - WITHDRAWAL/DISTRIBUTION. Subject to the
restrictions of Article VI, the following distribution options apply to a
Participant's Mandatory Contributions Account, if any, prior to his
Separation from Service: (CHOOSE (a) OR AT LEAST ONE OF (b) THROUGH (d))
[X] (a) No distribution options prior to Separation from Service.
[ ] (b) The same distribution options applicable to the Deferral Contributions
Account prior to the Participant's Separation from Service, as elected in
Adoption Agreement Section 6.03.
[ ] (c) Until he retires, the Participant has a continuing election to receive
all or any portion of his Mandatory Contributions Account if: (CHOOSE (1)
OR AT LEAST ONE OF (2) THROUGH (4))
[ ] (1) No conditions.
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[ ] (2) The mandatory contributions have accumulated for at least
__________Plan Years since the Plan Year for which contributed.
[ ] (3) The Participant suspends making nondeductible contributions
for a period of ______ months.
[ ] (4) (SPECIFY) _________________________________________________.
[ ] (d) (SPECIFY) ___________________________________________________________.
ARTICLE V
TERMINATION OF SERVICE - PARTICIPANT VESTING
5.01 NORMAL RETIREMENT. Normal Retirement Age under the Plan is:
(CHOOSE (a) OR (b))
[X] (a) 65 [STATE AGE, BUT MAY NOT EXCEED AGE 65].
[ ] (b) The later of the date the Participant attains ____________ (________)
years of age or the ____________ (________) anniversary of the first day of
the Plan Year in which the Participant commenced participation in the Plan.
[THE AGE SELECTED MAY NOT EXCEED AGE 65 AND THE ANNIVERSARY SELECTED MAY NOT
EXCEED THE 5TH.]
5.02 PARTICIPANT DEATH OR DISABILITY. The 100% vesting rule under
Section 5.02 of the Plan: (CHOOSE (a) OR CHOOSE ONE OR BOTH OF (b) AND (c))
[ ] (a) Does not apply.
[X] (b) Applies to death.
[ ] (c) Applies to disability.
5.03 VESTING SCHEDULE.
DEFERRAL CONTRIBUTIONS ACCOUNT/QUALIFIED MATCHING CONTRIBUTIONS
ACCOUNT/QUALIFIED NONELECTIVE CONTRIBUTIONS ACCOUNT/MANDATORY CONTRIBUTIONS
ACCOUNT. A Participant has a 100% Nonforfeitable interest at all times in
his Deferral Contributions Account, his Qualified Matching Contributions
Account, his Qualified Nonelective Contributions Account and in his Mandatory
Contributions Account.
REGULAR MATCHING CONTRIBUTIONS ACCOUNT/EMPLOYER CONTRIBUTIONS ACCOUNT. With
respect to a Participant's Regular Matching Contributions Account and
Employer Contributions Account, the Employer elects the following vesting
schedule: (CHOOSE (a) OR (b); (c) AND (d) ARE AVAILABLE ONLY AS ADDITIONAL
OPTIONS)
[ ] (a) Immediate vesting. 100% Nonforfeitable at all times. [NOTE: THE
EMPLOYER MUST ELECT OPTION (a) IF THE ELIGIBILITY CONDITIONS UNDER
ADOPTION AGREEMENT SECTION 2.01(c) REQUIRE 2 YEARS OF SERVICE OR MORE THAN
12 MONTHS OF EMPLOYMENT.]
[X] (b) Graduated Vesting Schedules.
TOP HEAVY SCHEDULE NON TOP HEAVY SCHEDULE
(MANDATORY) (OPTIONAL)
Years of Nonforfeitable Years of Nonforfeitable
Service Percentage Service Percentage
-------- -------------- -------- --------------
Less than 1 0% Less than 1 0%
1 0% 1 0%
2 100% 2 100%
3 100% 3 100%
4 100% 4 100%
5 100% 5 100%
6 or more 100% 6 100%
7 or more 100%
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[ ] (c) Special vesting election for Regular Matching Contributions Account.
In lieu of the election under Options (a) or (b), the Employer elects the
following vesting schedule for a Participant's Regular Matching
Contributions Account: (CHOOSE (1) OR (2))
[ ] (1) 100% Nonforfeitable at all times.
[ ] (2) In accordance with the vesting schedule described in the
addendum to this Adoption Agreement, numbered 5.03(c). [NOTE:
IF THE EMPLOYER ELECTS THIS OPTION (c)(2), THE ADDENDUM MUST
DESIGNATE THE APPLICABLE VESTING SCHEDULE(S) USING THE SAME
FORMAT AS USED IN OPTION (b).]
[NOTE: UNDER OPTIONS (b) AND (c)(2), THE EMPLOYER MUST COMPLETE A TOP HEAVY
SCHEDULE WHICH SATISFIES CODE SECTION 416. THE EMPLOYER, AT ITS OPTION, MAY
COMPLETE A NON TOP HEAVY SCHEDULE. THE NON TOP HEAVY SCHEDULE MUST SATISFY CODE
SECTION 411(a)(2). ALSO SEE SECTION 7.05 OF THE PLAN.]
[ ] (d) The Top Heavy Schedule under Option (b) (and, if applicable, under
Option (c)(2)) applies: (CHOOSE (1) OR (2))
[ ] (1) Only in a Plan Year for which the Plan is top heavy.
[ ] (2) In the Plan Year for which the Plan first is top heavy and
then in all subsequent Plan Years. [NOTE: THE EMPLOYER MAY NOT
ELECT OPTION (d) UNLESS IT HAS COMPLETED A NON TOP HEAVY
SCHEDULE.]
MINIMUM VESTING. (CHOOSE (e) OR (f))
[X] (e) The Plan does not apply a minimum vesting rule.
[ ] (f) A Participant's Nonforfeitable Accrued Benefit will never be less than
the lesser of $____ or his entire Accrued Benefit, even if the application
of a graduated vesting schedule under Options (b) or (c) would result in a
smaller Nonforfeitable Accrued Benefit.
LIFE INSURANCE INVESTMENTS. The Participant's Accrued Benefit attributable
to insurance contracts purchased on his behalf under Article XI is: (CHOOSE
(g) OR (h))
[ ] (g) Subject to the vesting election under Options (a), (b) or (c).
[X] (h) 100% Nonforfeitable at all times, irrespective of the vesting election
under Options (b) or (c)(2).
5.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS/
RESTORATION OF FORFEITED ACCRUED BENEFIT. The deemed cash-out rule described
in Section 5.04(C) of the Plan: (CHOOSE (a) OR (b))
[X] (a) Does not apply.
[ ] (b) Will apply to determine the timing of forfeitures for 0% vested
Participants. A Participant is not a 0% vested Participant if he has a
Deferral Contributions Account.
5.06 YEAR OF SERVICE - VESTING.
VESTING COMPUTATION PERIOD. The Plan measures a Year of Service on the basis
of the following 12 consecutive month periods: (CHOOSE (a) OR (b))
[X] (a) Plan Years.
[ ] (b) Employment Years. An Employment Year is the 12 consecutive month
period measured from the Employee's Employment Commencement Date and each
successive 12 consecutive month period measured from each anniversary of
that Employment Commencement Date.
HOURS OF SERVICE. The minimum number of Hours of Service an Employee must
complete during a vesting computation period to receive credit for a Year of
Service is: (CHOOSE (c) OR (d))
[X] (c) 500 Hours of Service.
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[ ] (d) _________ Hours of Service. [NOTE: THE HOURS OF SERVICE REQUIREMENT
MAY NOT EXCEED 1,000.]
5.08 INCLUDED YEARS OF SERVICE - VESTING. The Employer specifically
excludes the following Years of Service: (CHOOSE (a) OR AT LEAST ONE OF (b)
THROUGH (e))
[X] (a) None other than as specified in Section 5.08(a) of the Plan.
[ ] (b) Any Year of Service before the Participant attained the age of
____________ (________). [NOTE: THE AGE SELECTED MAY NOT EXCEED AGE 18.]
[ ] (c) Any Year of Service during the period the Employer did not maintain
this Plan or a predecessor plan.
[ ] (d) Any Year of Service before a Break in Service if the number of
consecutive Breaks in Service equals or exceeds the greater of 5 or the
aggregate number of the Years of Service prior to the Break. This
exception applies only if the Participant is 0% vested in his Accrued
Benefit derived from Employer contributions at the time he has a Break in
Service. Furthermore, the aggregate number of Years of Service before a
Break in Service do not include any Years of Service not required to be
taken into account under this exception by reason of any prior Break in
Service.
[ ] (e) Any Year of Service earned prior to the effective date of ERISA if the
Plan would have disregarded that Year of Service on account of an
Employee's Separation from Service under a Plan provision in effect and
adopted before January 1, 1974.
ARTICLE VI
TIME AND METHOD OF PAYMENTS OF BENEFITS
CODE Section 411(d)(6) PROTECTED BENEFITS. The elections under this Article
VI may not eliminate Code Section 411(d)(6) protected benefits. To the
extent the elections would eliminate a Code Section 411(d)(6) protected
benefit, see Section 13.02 of the Plan. Furthermore, if the elections
liberalize the optional forms of benefit under the Plan, the more liberal
options apply on the later of the Adoption date or the Effective Date of this
Adoption Agreement.
6.01 TIME OF PAYMENT OF ACCRUED BENEFIT.
DISTRIBUTION DATE. A distribution date under the Plan means every business
day of the Plan Year. [NOTE: THE EMPLOYER MUST SPECIFY THE APPROPRIATE DATE(S).
THE SPECIFIED DISTRIBUTION DATES PRIMARILY ESTABLISH ANNUITY STARTING DATES AND
THE NOTICE AND CONSENT PERIODS PRESCRIBED BY THE PLAN. THE PLAN ALLOWS THE
TRUSTEE AN ADMINISTRATIVELY PRACTICABLE PERIOD OF TIME TO MAKE THE ACTUAL
DISTRIBUTION RELATING TO A PARTICULAR DISTRIBUTION DATE.]
NONFORFEITABLE ACCRUED BENEFIT NOT EXCEEDING $3,500. Subject to the
limitations of Section 6.01(A)(1), the distribution date for distribution of
a Nonforfeitable Accrued Benefit not exceeding $3,500 is: (CHOOSE (a), (b),
(c), (d) OR (e))
[ ] (a) ______________________________ of the _______________________________
Plan Year beginning after the Participant's Separation from Service.
[X] (b) The first administratively practicable distribution date following
the Participant's Separation from Service.
[ ] (c) ______________________________ of the Plan Year after the Participant
incurs ______________________________ Break(s) in Service (as defined in
Article V).
[ ] (d) ______________________________ following the Participant's attainment
of Normal Retirement Age, but not earlier than ____________________________
following his Separation from Service.
[ ] (e) (SPECIFY) ______________________________.
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<PAGE>
NONFORFEITABLE ACCRUED BENEFIT EXCEEDS $3,500. See the elections under
Section 6.03.
DISABILITY. The distribution date, subject to Section 6.01(A)(3), is:
(CHOOSE (f), (g) OR (h))
[ ] (f) ______________________________ after the Participant terminates
employment because of disability.
[X] (g) The same as if the Participant had terminated employment without
disability.
[ ] (h) (SPECIFY) ___________________________________________________________.
HARDSHIP. (CHOOSE (i) OR (j))
[X] (i) The Plan does not permit a hardship distribution to a Participant who
has separated from Service.
[ ] (j) The Plan permits a hardship distribution to a Participant who has
separated from Service in accordance with the hardship distribution policy
stated in: (CHOOSE (1), (2) OR (3))
[ ] (1) Section 6.01(A)(4) of the Plan.
[ ] (2) Section 14.11 of the Plan.
[ ] (3) The addendum to this Adoption Agreement, numbered Section
6.01.
DEFAULT ON A LOAN. If a Participant or Beneficiary defaults on a loan made
pursuant to a loan policy adopted by the Advisory Committee pursuant to
Section 9.04, the Plan: (CHOOSE (k), (l) OR (m))
[X] (k) Treats the default as a distributable event. The Trustee, at the time
of the default, will reduce the Participant's Nonforfeitable Accrued
Benefit by the lesser of the amount in default (plus accrued interest) or
the Plan's security interest in that Nonforfeitable Accrued Benefit. To
the extent the loan is attributable to the Participant's Deferral
Contributions Account, Qualified Matching Contributions Account or
Qualified Nonelective Contributions Account, the Trustee will not reduce
the Participant's Nonforfeitable Accrued Benefit unless the Participant has
separated from Service or unless the Participant has attained age 59 1/2.
[ ] (l) Does not treat the default as a distributable event. When an
otherwise distributable event first occurs pursuant to Section 6.01 or
Section 6.03 of the Plan, the Trustee will reduce the Participant's
Nonforfeitable Accrued Benefit by the lesser of the amount in default (plus
accrued interest) or the Plan's security interest in that Nonforfeitable
Accrued Benefit.
[ ] (m) (SPECIFY) ___________________________________________________________.
6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT. The Advisory Committee will
apply Section 6.02 of the Plan with the following modifications: (CHOOSE (a)
OR AT LEAST ONE OF (b), (c), (d) AND (e))
[ ] (a) No modifications.
[ ] (b) Except as required under Section 6.01 of the Plan, a lump sum
distribution is not available: ___________________________________________.
[ ] (c) An installment distribution: (CHOOSE (1) OR AT LEAST ONE OF (2) OR (3))
[ ] (1) Is not available under the Plan.
[ ] (2) May not exceed the lesser of _________ years or the maximum
period permitted under Section 6.02.
[ ] (3) (SPECIFY) _________________________________________________.
[ ] (d) The Plan permits the following annuity options ______________________.
Any Participant who elects a life annuity Option is subject to the
requirements of Sections 6.04(A), (B), (C) and (D) of the Plan. See
Section 6.04(E). [NOTE: THE EMPLOYER MAY SPECIFY ADDITIONAL ANNUITY
OPTIONS IN AN ADDENDUM TO THIS ADOPTION AGREEMENT, NUMBERED 6.02(d).]
[X] (e) If the Plan invests in qualifying Employer securities, as described in
Section 10.03(F), a
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Participant eligible to elect distribution under Section 6.03 may elect
to receive that distribution in Employer securities only in accordance
with the provisions of the addendum to this Adoption Agreement, numbered
6.02(e).
6.03 BENEFIT PAYMENT ELECTIONS.
PARTICIPANT ELECTIONS AFTER SEPARATION FROM SERVICE. A Participant who is
eligible to make distribution elections under Section 6.03 of the Plan may
elect to commence distribution of his Nonforfeitable Accrued Benefit:
(CHOOSE AT LEAST ONE OF (a) THROUGH (c))
/ / (a) As of any distribution date, but not earlier than ___________________
of the _________________ Plan Year beginning after the Participant's
Separation from Service.
/x/ (b) As of the following date(s): (CHOOSE AT LEAST ONE OF OPTIONS (1)
THROUGH (6))
/ / (1) Any distribution date after the close of the Plan Year in
which the Participant attains Normal Retirement Age.
/ / (2) Any distribution date following his Separation from Service
with the Employer.
/ / (3) Any distribution date in the __________________________ Plan
Year(s) beginning after his Separation from Service.
/ / (4) Any distribution date in the Plan Year after the Participant
incurs ________ Break(s) in Service (as defined in Article V).
/ / (5) Any distribution date following attainment of age _________
and completion of at least ____________ Years of Service (as
defined in Article V).
/x/ (6) (SPECIFY) ANY DISTRIBUTION DATE FOLLOWING HIS OR HER
SEPARATION FROM SERVICE.
/x/ (c) (SPECIFY) ___________________________________________________________
________________________________________.
The distribution events described in the election(s) made under Options
(a), (b) or (c) apply equally to all Accounts maintained for the Participant
unless otherwise specified in Option (c).
PARTICIPANT ELECTIONS PRIOR TO SEPARATION FROM SERVICE - REGULAR MATCHING
CONTRIBUTIONS ACCOUNT AND EMPLOYER CONTRIBUTIONS ACCOUNT. Subject to the
restrictions of Article VI, the following distribution options apply to a
Participant's Regular Matching Contributions Account and Employer
Contributions Account prior to his Separation from Service: (CHOOSE (d) OR
AT LEAST ONE OF (e) THROUGH (h))
/ / (d) No distribution options prior to Separation from Service.
/x/ (e) Attainment of Specified Age. Until he retires, the Participant has
a continuing election to receive all or any portion of his
Nonforfeitable interest in these Accounts after he attains: (CHOOSE (1)
OR (2))
/ / (1) Normal Retirement Age.
/x/ (2) 59.5 years of age and is at least 100% vested in these
Accounts. [NOTE: IF THE PERCENTAGE IS LESS THAN 100%, SEE THE
SPECIAL VESTING FORMULA IN SECTION 5.03.]
/ / (f) After a Participant has participated in the Plan for a period of
not less than___________ years and he is 100% vested in these Accounts,
until he retires, the Participant has a continuing election to receive
all or any portion of the Accounts. [NOTE: THE NUMBER IN THE BLANK SPACE
MAY NOT BE LESS THAN 5.]
/ / (g) Hardship. A Participant may elect a hardship distribution prior to
his Separation from Service in accordance with the hardship distribution
policy: (CHOOSE (1), (2) OR (3); (4) IS AVAILABLE ONLY AS AN ADDITIONAL
OPTION)
/ / (1) Under Section 6.01(A)(4) of the Plan.
/ / (2) Under Section 14.11 of the Plan.
/ / (3) Provided in the addendum to this Adoption Agreement,
numbered Section 6.03.
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/ / (4) In no event may a Participant receive a hardship
distribution before he is at least _________% vested in these
Accounts. [NOTE: IF THE PERCENTAGE IN THE BLANK IS LESS THAN
100%, SEE THE SPECIAL VESTING FORMULA IN SECTION 5.03.]
/ / (h) (SPECIFY) ___________________________________________________________
__________________________________________________.
[NOTE: THE EMPLOYER MAY USE AN ADDENDUM, NUMBERED 6.03, TO PROVIDE ADDITIONAL
LANGUAGE AUTHORIZED BY OPTIONS (b)(6), (c), (g)(3) OR (h) OF THIS ADOPTION
AGREEMENT SECTION 6.03.]
PARTICIPANT ELECTIONS PRIOR TO SEPARATION FROM SERVICE-DEFERRAL CONTRIBUTIONS
ACCOUNT, QUALIFIED MATCHING CONTRIBUTIONS ACCOUNT AND QUALIFIED NONELECTIVE
CONTRIBUTIONS ACCOUNT. Subject to the restrictions of Article VI, the
following distribution options apply to a Participant's Deferral
Contributions Account, Qualified Matching Contributions Account and Qualified
Nonelective Contributions Account prior to his Separation from Service:
(CHOOSE (i) OR AT LEAST ONE OF (j) THROUGH (l))
/ / (i) No distribution options prior to Separation from Service.
/x/ (j) Until he retires, the Participant has a continuing election to
receive all or any portion of these Accounts after he attains: (CHOOSE
(1) OR (2))
/ / (1) The later of Normal Retirement Age or age 59 1/2.
/ / (2) Age 59.5 (at least 59-1/2).
/ / (k) Hardship. A Participant, prior to this Separation from Service, may
elect a hardship distribution from his Deferral Contributions Account in
accordance with the hardship distribution policy under Section 14.11 of
the Plan.
/ / (l) (SPECIFY) _____________________________________________.
[NOTE: OPTION (l) MAY NOT PERMIT IN SERVICE DISTRIBUTIONS PRIOR
TO AGE 59-1/2 (OTHER THAN HARDSHIP) AND MAY NOT MODIFY THE
HARDSHIP POLICY DESCRIBED IN SECTION 14.11.]
SALE OF TRADE OR BUSINESS/SUBSIDIARY. If the Employer sells substantially all
of the assets (within the meaning of Code Section 409(d)(2)) used in a trade
or business or sells a subsidiary (within the meaning of Code Section
409(d)(3)), a Participant who continues employment with the acquiring
corporation is eligible for distribution from his Deferral Contributions
Account, Qualified Matching Contributions Account and Qualified Nonelective
Contributions Account: (CHOOSE (m) OR (n))
/ / (m) Only as described in this Adoption Agreement Section 6.03 for
distributions prior to Separation from Service.
/x/ (n) As if he has a Separation from Service. After March 31, 1988, a
distribution authorized solely by reason of this Option (n) must
constitute a lump sum distribution, determined in a manner consistent
with Code Section 401(k)(10) and the applicable Treasury regulations.
6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING SPOUSES. The
annuity distribution requirements of Section 6.04: (CHOOSE (a) OR (b))
/x/ (a) Apply only to a Participant described in Section 6.04(E) of the
Plan (relating to the profit sharing exception to the joint and survivor
requirements).
/ / (b) Apply to all Participants.
ARTICLE IX
ADVISORY COMMITTEE - DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUNTS
9.10 VALUE OF PARTICIPANT'S ACCRUED BENEFIT. If a distribution (other
than a distribution from a segregated Account and other than a corrective
distribution described in Sections 14.07, 14.08, 14.09 or
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14.10 of the Plan) occurs more than 90 days after the most recent valuation
date, the distribution will include interest at: (CHOOSE (a), (b) OR (c))
/x/ (a) 0% per annum. [NOTE: THE PERCENTAGE MAY EQUAL 0%.]
/ / (b) The 90 day Treasury bill rate in effect at the beginning of the
current valuation period.
/ / (c) (SPECIFY) _____________________________________________.
9.11 ALLOCATION AND DISTRIBUTION OF NET INCOME GAIN OR LOSS. Pursuant to
Section 14.12, to determine the allocation of net income, gain or loss:
(COMPLETE ONLY THOSE ITEMS, IF ANY, WHICH ARE APPLICABLE TO THE EMPLOYER'S
PLAN)
/x/ (a) For salary reduction contributions, the Advisory Committee will:
(CHOOSE (1), (2), (3), (4) OR (5))
/x/ (1) Apply Section 9.11 without modification.
/ / (2) Use the segregated account approach described in
Section 14.12.
/ / (3) Use the weighted average method described in Section 14.12,
based on a ______ weighting period.
/ / (4) Treat as part of the relevant Account at the beginning of
the valuation period _________% of the salary reduction
contributions: (CHOOSE (i) OR (ii))
/ / (i) made during that valuation period.
/ / (ii) made by the following specified time: ____________
______________________________________________________.
/ / (5) Apply the allocation method described in the addendum to
this Adoption Agreement numbered 9.11(a).
/x/ (b) For matching contributions, the Advisory Committee will: (CHOOSE
(1), (2), (3) OR (4))
/x/ (1) Apply Section 9.11 without modification.
/ / (2) Use the weighted average method described in Section 14.12,
based on a ____ period.
/ / (3) Treat as part of the relevant Account at the beginning of
the valuation period __________% of the matching contributions
allocated during the valuation period.
/ / (4) Apply the allocation method described in the addendum to
this Adoption Agreement numbered 9.11(b).
/ / (c) For Participant nondeductible contributions, the Advisory Committee
will: (CHOOSE (1), (2), (3), (4) OR (5))
/ / (1) Apply Section 9.11 without modification.
/ / (2) Use the segregated account approach described in
Section 14.12.
/ / (3) Use the weighted average method described in Section 14.12,
based on a ____ weighting period.
/ / (4) Treat as part of the relevant Account at the beginning of
the valuation period __________% of the Participant nondeductible
contributions: (CHOOSE (i) OR (ii))
/ / (i) made during that valuation period.
/ / (ii) made by the following specified time: _______________
__________________________________________________________.
/ / (5) Apply the allocation method described in the addendum to
this Adoption Agreement numbered 9.11(c).
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ARTICLE X
TRUSTEE AND CUSTODIAN, POWERS AND DUTIES
10.03 INVESTMENT POWERS. Pursuant to Section 10.03[F] of the Plan, the
aggregate investments in qualifying Employer securities and in qualifying
Employer real property: (CHOOSE (a) OR (b))
/ / (a) May not exceed 10% of Plan assets.
/x/ (b) May not exceed 100% of Plan assets. [NOTE: THE PERCENTAGE MAY NOT
EXCEED 100%.]
10.14 VALUATION OF TRUST. In addition to each Accounting Date, the
Trustee must value the Trust Fund on the following valuation date(s):
(CHOOSE (a) OR (b))
/ / (a) No other mandatory valuation dates.
/x/ (b) (SPECIFY) EVERY BUSINESS DAY OF THE PLAN YEAR.
24
<PAGE>
EFFECTIVE DATE ADDENDUM
(RESTATED PLANS ONLY)
The Employer must complete this addendum only if the restated Effective
Date specified in Adoption Agreement Section 1.18 is different than the
restated effective date for at least one of the provisions listed in this
addendum. In lieu of the restated Effective Date in Adoption Agreement
Section 1.18, the following special effective dates apply: (CHOOSE WHICHEVER
ELECTIONS APPLY)
/ / (a) COMPENSATION DEFINITION. The Compensation definition of Section
1.12 (other than the $200,000 limitation) is effective for Plan Years
beginning after _____________________________. [NOTE: MAY NOT BE
EFFECTIVE LATER THAN THE FIRST DAY OF THE FIRST PLAN YEAR BEGINNING
AFTER THE EMPLOYER EXECUTES THIS ADOPTION AGREEMENT TO RESTATE THE
PLAN FOR THE TAX REFORM ACT OF 1986, IF APPLICABLE.]
/ / (b) ELIGIBILITY CONDITIONS. The eligibility conditions specified in
Adoption Agreement Section 2.01 are effective for Plan Years beginning
after _______________________________________.
/ / (c) SUSPENSION OF YEARS OF SERVICE. The suspension of Years of Service
rule elected under Adoption Agreement Section 2.03 is effective for Plan
Years beginning after _____________.
/ / (d) CONTRIBUTION/ALLOCATION FORMULA. The contribution formula elected
under Adoption Agreement Section 3.01 and the method of allocation elected
under Adoption Agreement Section 3.04 is effective for Plan Years beginning
after _______________________________________.
/ / (e) ACCRUAL REQUIREMENTS. The accrual requirements of Section 3.06 are
effective for Plan Years beginning after ___________________.
/ / (f) EMPLOYMENT CONDITION. The employment condition of Section 3.06 is
effective for Plan Years beginning after ___________________.
/ / (g) ELIMINATION OF NET PROFITS. The requirement for the Employer not to
have net profits to contribute to this Plan is effective for Plan Years
beginning after . [NOTE: THE DATE SPECIFIED MAY NOT BE
EARLIER THAN DECEMBER 31, 1985.]
/ / (h) VESTING SCHEDULE. The vesting schedule elected under Adoption
Agreement Section 5.03 is effective for Plan Years beginning after
_______________________________________.
/ / (i) ALLOCATION OF EARNINGS. The special allocation provisions elected
under Adoption Agreement Section 9.11 are effective for Plan Years
beginning after ________________________.
/ / (j) (SPECIFY) PLAN YEAR. THE PLAN YEAR SPECIFIED IN SECTION 1.17(a) IS
EFFECTIVE FOR THE PLAN YEAR BEGINNING JANUARY 1, 1998 AND ENDING
DECEMBER 31, 1998. THE PLAN WILL HAVE A SHORT PLAN YEAR BEGINNING APRIL
1, 1997 AND ENDING DECEMBER 31, 1997.
For Plan Years prior to the special Effective Date, the terms of the
Plan prior to its restatement under this Adoption Agreement will control for
purposes of the designated provisions. A special Effective Date may not
result in the delay of a Plan provision beyond the permissible Effective Date
under any applicable law requirements.
25
<PAGE>
ADDENDUM 6.02(e)
DISTRIBUTIONS IN THE FORM OF EMPLOYER SECURITIES
A Participant may elect to receive a distribution in the form of the
Common Stock of Active Voice Corporation ("Employer securities") in
accordance with the following provisions.
1. A Participant may elect to receive all or a portion of any
distribution in the form of Employer securities, to the extent the
Participant's Accounts are invested in Employer securities at the time
the Participant's Accounts are valued for purposes of such
distribution. All such distributions will be made in the form of
whole shares. Any remaining fractional shares will be paid in the
form of cash.
2. A Participant who fails to elect a form of distribution within sixty
(60) days of receiving the appropriate election form will receive his
or her distribution in the form of cash.
3. If a participant elects an installment form of distribution, and
wishes to receive a portion of his or her distribution in the form of
Employer stock and a portion in cash, the installments will consist of
whole shares of Employer stock until all Employer stock that will be
distributed has been distributed, and then the remainder of the
distributions will be paid in the form of cash.
4. All shares of Employer securities distributed from the Plan will be
readily tradable on an established market; provided, however, that
such shares may include such legend restrictions on transferability as
the Plan Administrator may reasonably require in order to assure
compliance with applicable Federal and State securities laws.
5. Participants who are subject to Section 16 of the Securities Act of
1934 (the "Act") shall be subject to such withdrawal, investments and
other restrictions necessary to satisfy Rule 16b-3 under the Act as
may be imposed by the Plan Administrator, in its discretion.
6. All distributions of Employer stock are also subject to the Plan's
provisions relating to distributions generally, including requirements
with respect to notice, consent, and withholding for federal income
taxes.
26
<PAGE>
EXECUTION PAGE
The Trustee (and Custodian, if applicable), by executing this Adoption
Agreement, accepts its position and agrees to all of the obligations,
responsibilities and duties imposed upon the Trustee (or Custodian) under the
Prototype Plan and Trust. The Employer hereby agrees to the provisions of
this Plan and Trust, and in witness of its agreement, the Employer by its
duly authorized officers, has executed this Adoption Agreement, and the
Trustee (and Custodian, if applicable) signified its acceptance, as of April
1, 1997.
Name and EIN of Employer: ACTIVE VOICE CORPORATION
-----------------------------------------------------
By /s/ Jose S. David 6/13/97
----------------------- --------------------------
Its CFO Date signed
-----------------------
Name of Trustees: /s/ Debra Faulkner 6/13/97
----------------------- --------------------------
Debra Faulkner Date signed
/s/ Jose David 6/13/97
----------------------- --------------------------
Jose David Dated Signed
Name of Custodian: N/A
------------------------------------------------------------
Signed:
-----------------------------------------------------------------------
[NOTE: A TRUSTEE IS MANDATORY, BUT A CUSTODIAN IS OPTIONAL. SEE SECTION 10.03
OF THE PLAN.]
PLAN NUMBER. The 3-digit plan number the Employer assigns to this Plan for
ERISA reporting purposes (Form 5500 Series) is: 001.
---
USE OF ADOPTION AGREEMENT. Failure to complete properly the elections in this
Adoption Agreement may result in disqualification of the Employer's Plan. The
3-digit number assigned to this Adoption Agreement (see page 1) is solely for
the Regional Prototype Plan Sponsor's recordkeeping purposes and does not
necessarily correspond to the plan number the Employer designated in the
prior paragraph.
RELIANCE ON NOTIFICATION LETTER. The Employer may not rely on the Regional
Prototype Plan Sponsor's notification letter covering this Adoption
Agreement. For reliance on the Plan's qualification, the Employer must obtain
a determination letter from the applicable IRS Key District office.
27
<PAGE>
ACTIVE VOICE 401(K) PLAN
CHECKLIST OF EMPLOYER ADMINISTRATIVE ELECTIONS
The basic plan document permits the adopting employer (or the advisory
committee) operationally to make certain administrative elections not
reflected in the adoption agreement. This form lists those administrative
elections and provides a means of RECORDING your decisions.
1. SECTION 1.09 - Definition of highly compensated employee. The plan
permits the employer to make a calendar year election for purposes of
identifying highly compensated employees.
[ ] The plan will use the calendar year election.
[x] The plan will not use the calendar year election.
2. SECTION 1.12(B) - Nondiscrimination definition of compensation. When
testing discrimination under the plan, the plan permits the employer to elect
to "gross up" an employee's compensation by the amount of his elective
contributions for the year.
[x] The plan will "gross up" compensation for elective contributions.
[ ] The plan will exclude elective contributions.
[NOTE: This election solely is for purposes of testing discrimination. The
election does not affect the employer's election under Options (a) or (b) of
Adoption Agreement Section 1.12. The elections under Adoption Agreement Section
1.12 apply to the definition of compensation for purposes of make allocations
of employer contributions and participant forfeitures.]
3. SECTION 4.03. - Rollover contributions.
[x] The plan accepts rollover contributions.
[ ] The plan does not accept rollover contributions.
4. SECTION 7.04. - If your plan has discretionary trustee, Section 7.04
authorizes the employer to enter into a written agreement with the trustee
permitting the employer to direct investments. Legal counsel should assist
you with this agreement.
5. SECTION 8.10. If the trustee agrees, the plan authorizes participant
direction of investment. The adopting employer, the advisory committee and
the trustee should agree to the conditions and limitations of participant
direction of investment. Legal counsel should assist you with this election.
[x] The plan will permit participant direction of investment.
[ ] The plan will not permit participant direction of investment.
6. SECTION 9.04. - The plan authorizes the advisory committee to adopt a
written loan policy to permit participant loans.
[x] The plan will permit participant loans.
[ ] The plan will not permit participant loans.
28
<PAGE>
7. SECTION 11.01. - The plan may invest in life insurance on behalf of a
participant's account, subject to participant consent.
[ ] The plan will invest in life insurance contracts.
[X] The plan will not invest in life insurance contracts.
* * * * * * * * * * * * * *
Options Elected as of April 1, 1997
By Plan Administrator
ACTIVE VOICE CORPORATION
/s/ Jose S. David
By: ------------------------------
CFO
Its:------------------------------
29
<PAGE>
ACTIVE VOICE 401(K) PLAN
LOAN POLICY
Active Voice Corporation, acting in its capacity as Plan Administrator
of the Active Voice 401(k) Plan ("Plan"), hereby adopts the following loan
policy pursuant to Section 9.04 of the Plan. A Participant or beneficiary
under the Plan may receive a loan only as permitted by this loan policy.
1. LOAN APPLICATION. Loans will be made available on a
nondiscriminatory basis to participants who are active employees and other
"parties in interest" within the meaning of ERISA Section 3(14). A
participant must apply for each loan in writing on the form provided by the
Plan Administrator which specifies the amount of the loan desired and the
requested duration of the loan. An application for a married participant must
include Spousal Consent.
2. LIMITATION ON LOAN AMOUNT/PURPOSE OF LOAN. The Plan Administrator
will not approve any loan to a participant in an amount which exceeds 50% of
his or her nonforfeitable accrued benefit (account balance), as reflected by
the books and records of the Plan. The maximum aggregate dollar amount of
loans outstanding to any participant may not exceed $50,000 as aggregated
with all participant loans from other employer qualified plans, reduced by
the excess of the participant's highest outstanding participant loan balance
during the 12-month period ending on the date of the loan over the
participant's current outstanding participant loan balance on the date of the
loan. A participant may not request a loan for less than $1,000, nor may a
participant, at any time, have more than two loans outstanding at anytime.
3. SECURITY FOR LOAN. A participant must secure each loan with an
irrevocable pledge and assignment of 50% of the nonforfeitable amount of the
participant's account balance under the Plan. The Promissory Note described
below will provide for such security.
4. EVIDENCE AND TERMS OF LOAN. The Plan Administrator will document
every loan in the form of a Promissory Note. The Promissory Note shall be for
the face amount of the loan, bear interest at a rate equal to the "prime
rate" in effect on the date the loan application was submitted, as determined
by Merrill Lynch Corporation plus two percentage points, and provide for
monthly payments under a level amortization schedule, which shall be paid
through payroll deduction. The Promissory Note shall include participant
consent to payroll deduction.
The Plan Administrator will fix the term for repayment of any loan,
however, in no instance may the term of repayment be greater than five years,
unless the loan qualifies as a home loan. The Plan Administrator may fix the
term for repayment of a home loan for a period not to exceed 10 years. A
"home loan" is a loan used to acquire a dwelling unit which, within a
reasonable time, the participant will use as a principal residence. The Plan
Administrator may suspend payments for a period not exceeding one year which
occurs during an approved unpaid leave of absence.
Participants should note the law treats the amount of any loan (other
than a "home
30
<PAGE>
loan") not repaid five years after the date of the loan as a taxable
distribution on the last day of the five year period or, if sooner, at the
time the loan is in default. If a participant extends a non-home loan having
a five-year or less repayment term beyond five years, the balance of the loan
at the time of the extension is a taxable distribution to the participant.
5. DEFAULT/RISK OF LOSS. A loan will be in default:
(a) if any scheduled payment remains unpaid for more than sixty (60)
days;
(b) if an active employee revokes his or her consent to loan
payments through payroll deduction;
(c) if the participant's employment with the employer is terminated;
(d) if the Plan Administrator determines that the participant has
made or furnished any representation or statement to the Plan
that proves to have been false in any material respect when
made or furnished; or
(e) upon the death, dissolution, insolvency, business failure,
appointment of receiver of any part of the property of,
assignment for the benefit of creditors by, or the commencement
of any proceeding under any bankruptcy or insolvency laws of,
by or against the participant.
Upon default, the Plan Administrator may, to the extent a
distribution to the participant is permissible under the Plan, offset the
participant's vested account balance by the outstanding balance of the loan.
The Plan Administrator will treat the note as repaid to the extent of any
such offset. Pending final disposition of the note, the participant will
remain obligated for any unpaid principal and accrued interest.
If the loan remains in default at the end of the calendar quarter
following the calendar quarter in which the payment is due, the Plan
Administrator will report the remaining loan balance as a deemed distribution
for tax purposes.
All participant loans will be administered as a participant directed
investment of a portion of the participant's vested account balance equal to
the outstanding principal balance of the loan. In the absence of specific
participant direction, loan funds will be taken from each investment held in
the participant's account proportionately at the time the loan is made. Loan
payments will be invested in accordance with the participant's investment
election at the time each payment is made. The Plan will credit that portion
of the participant's interest with the interest earned on the note and with
principal payments received by the participant.
Dated this 13 day of June, 1997 PLAN ADMINISTRATOR
Active Voice Corporation
31
<PAGE>
By /s/ Jose S. David
--------------------------------
Its CFO
-------------------------------
32
<PAGE>
ACTIVE VOICE 401(K) PLAN
PARTICIPANT INVESTMENT DIRECTION PROCEDURES
Pursuant to Section 8.10 of the Active Voice 401(k) Plan (the "Plan"),
Active Voice Corporation, acting in its capacity as Plan Administrator of the
Plan, hereby adopts the following procedures to permit participant investment
direction upon the terms set forth herein. By execution hereof, the Trustees
consent to participant investment direction and approves these procedures.
Each Participant may, by written direction to the Plan Administrator, or
by telephonic direction to Merrill Lynch Trust Company ("Merrill Lynch")
consistent with prior written authorization, direct that his or her accounts
be invested in one or more of the investment funds provided under the Plan
and described in the Plan's Summary Plan Description or a supplement thereto.
Merrill Lynch will execute telephonic investment directions as soon as
administratively feasible after the participant communicates those directions
to Merrill Lynch along with the Participant's PIN number and other security
measures established by Merrill Lynch.
These procedures are intended to establish participant-directed
investment for all accounts under the Plan in accordance with ERISA Section
404(c). The Plan Administrator and the Trustees intend that Plan fiduciaries
will not be liable for any loss a participant incurs as a direct and
necessary consequence of the participant's exercise of investment direction.
These procedures shall be incorporated into the Plan document, and may
be modified from time to time by the Plan Administrator and the Trustee.
PLAN ADMINISTRATOR
Active Voice Corporation
By /s/ Jose S. David
--------------------------------
Its: CFO
--------------------------------
TRUSTEES
/s/ Debra Faulkner
-----------------------------------
Debra Faulkner
/s/ Jose S. David
-----------------------------------
Jose David
33
<PAGE>
<PAGE>
BOGLE & GATES
DEFINED CONTRIBUTION PROTOTYPE
PLAN AND TRUST AGREEMENT
BASIC PLAN DOCUMENT #1
<PAGE>
TABLE OF CONTENTS
ALPHABETICAL LISTING OF DEFINITIONS
iii
ARTICLE I, DEFINITIONS
1.01 Employer 1
1.02 Trustee 1
1.03 Plan 1
1.04 Adoption Agreement 1
1.05 Plan Administrator 1
1.06 Advisory Committee 2
1.07 Employee 2
1.08 Self-Employed Individual/Owner-Employee 2
1.09 Highly Compensated Employee 2
1.10 Participant 3
1.11 Beneficiary 3
1.12 Compensation 3
1.13 Earned Income 5
1.14 Account 5
1.15 Accrued Benefit 5
1.16 Nonforfeitable 5
1.17 Plan Year/Limitation Year 5
1.18 Effective Date 5
1.19 Plan Entry Date 6
1.20 Accounting Date 6
1.21 Trust 6
1.22 Trust Fund 6
1.23 Nontransferable Annuity 6
1.24 ERISA 6
1.25 Code 6
1.26 Service 6
1.27 Hour of Service 6
1.28 Disability 7
1.29 Service for Predecessor Employer 8
1.30 Related Employers 8
1.31 Leased Employees 8
1.32 Special Rules for Owner-Employees 9
1.33 Determination of Top Heavy Status 9
1.34 Paired Plans 11
ARTICLE II, EMPLOYEE PARTICIPANTS
2.01 Eligibility 12
2.02 Year of Service - Participation 12
2.03 Break in Service - Participation 12
2.04 Participation upon Re-employment 13
2.05 Change in Employee Status 13
2.06 Election Not to Participate 13
ARTICLE III, EMPLOYER CONTRIBUTIONS AND FORFEITURES
3.01 Amount 15
3.02 Determination of Contribution 15
3.03 Time of Payment of Contribution 15
3.04 Contribution Allocation 15
3.05 Forfeiture Allocation 18
3.06 Accrual of Benefit 18
3.07 - 3.16 Limitations on Allocations 19-21
3.17 Special Allocation Limitation 22
3.18 Defined Benefit Plan Limitation 22
3.19 Definitions - Article III 22
ARTICLE IV, PARTICIPANT CONTRIBUTIONS
4.01 Participant Nondeductible Contributions 26
4.02 Participant Deductible Contributions 26
4.03 Participant Rollover Contributions 26
4.04 Participant Contribution - Forfeitabity 27
4.05 Participant Contribution - Withdrawal/Distribution 27
4.06 Participant Contribution - Accrued Benefit 27
ARTICLE V, TERMINATION OF SERVICE - PARTICIPANT VESTING
5.01 Normal Retirement Age 28
5.02 Participant Disability or Death 28
5.03 Vesting Schedule 28
5.04 Cash-out Distributions to Partially-Vested
Participants/Restoration of Forfeited Accrued Benefit 28
5.05 Segregated Account for Repaid Amount 30
5.06 Year of Service - Vesting 30
5.07 Break in Service - Vesting 30
5.08 Included Years of Service - Vesting 30
5.09 Forfeiture Occurs 31
ARTICLE VI, TIME AND METHOD OF PAYMENT OF BENEFITS
6.01 Time of Payment of Accrued Benefit 32
6.02 Method of Payment of Accrued Benefit 34
6.03 Benefit Payment Elections 36
6.04 Annuity Distributions to Participants and Surviving Spouses 37
6.05 Waiver Election - Qualified Joint and Survivor Annuity 39
6.06 Waiver Election - Preretirement Survivor Annuity 39
6.07 Distributions Under Domestic Relations Orders 40
ARTICLE VII, EMPLOYER ADMINISTRATIVE PROVISIONS
7.01 Information to Committee 42
7.02 No Liability 42
7.03 Indemnity of Certain Fiduciaries 42
7.04 Employer Direction of Investment 42
7.05 Amendment to Vesting Schedule 42
ARTICLE VIII, PARTICIPANT ADMINISTRATIVE PROVISIONS
8.01 Beneficiary Designation 44
8.02 No Beneficiary Designation/Death of Beneficiary 44
8.03 Personal Data to Committee 45
8.04 Address for Notification 45
8.05 Assignment or Alienation 45
8.06 Notice of Change in Terms 45
8.07 Litigation Against the Trust 45
8.08 Information Available 45
8.09 Appeal Procedure for Denial of Benefits 45
8.10 Participant Direction of Investment 46
ARTICLE IX. ADVISORY COMMITTEE - DUTIES
i
<PAGE>
WITH RESPECT TO PARTICIPANTS' ACCOUNTS
9.01 Members' Compensation, Expenses 48
9.02 Term 48
9.03 Powers 48
9.04 General 48
9.05 Funding Policy 49
9.06 Manner of Action 49
9.07 Authorized Representative 49
9.08 Interested Member 49
9.09 Individual Accounts 49
9.10 Value of Participant's Accrued Benefit 50
9.11 Allocation and Distribution of Net Income Gain or Loss 50
9.12 Individual Statement 51
9.13 Account Charged 51
9.14 Unclaimed Account Procedure 51
ARTICLE X, TRUSTEE AND CUSTODIAN, POWERS AND DUTIES
10.01 Acceptance 52
10.02 Receipt of Contributions 52
10.03 Investment Powers 52
10.04 Records and Statements 57
10.05 Fees and Expenses from Fund 57
10.06 Parties to Litigation 57
10.07 Professional Agents 57
10.08 Distribution of Cash or Property 58
10.09 Distribution Directions 58
10.10 Third Party/Multiple Trustees 58
10.11 Resignation 58
10.12 Removal 58
10.13 Interim Duties and Successor Trustee 58
10.14 Valuation of Trust 59
10.15 Limitation on Liability - If Investment Manager,
Ancillary Trustee or Independent Fiduciary Appointed 59
10.16 Investment in Group Trust Fund 59
10.17 Appointment of Ancillary Trustee or Independent Fiduciary 60
ARTICLE XI, PROVISIONS RELATING TO INSURANCE AND INSURANCE COMPANY
11.01 Insurance Benefit 61
11.02 Limitation on Life Insurance Protection 61
11.03 Definitions 62
11.04 Dividend Plan 63
11.05 Insurance Company Not a Party to Agreement 63
11.06 Insurance Company Not Responsible for Trustee's Actions 63
11.07 Insurance Company Reliance on Trustee's Signature 63
11.08 Acquittance 63
11.09 Duties of Insurance Company 63
ARTICLE XII, MISCELLANEOUS
12.01 Evidence 64
12.02 No Responsibility for Employer Action 64
12.03 Fiduciaries Not Insurers 64
12.04 Waiver of Notice 64
12.05 Successors 64
12.06 Word Usage 64
12.07 State Law 64
12.08 Employer's Right to Participate 64
12.09 Employment Not Guaranteed 65
ARTICLE XIII, EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION
13.01 Exclusive Benefit 66
13.02 Amendment by Employer 66
13.03 Amendment by Regional Prototype Plan Sponsor 67
13.04 Discontinuance 67
13.05 Full Vesting on Termination 67
13.06 Merger/Direct Transfer 67
13.07 Termination 68
ARTICLE XIV, CODE SECTION 401(k) AND CODE SECTION 401(m) ARRANGEMENTS
14.01 Application 70
14.02 Code Section 401(k) Arrangement 70
14.03 Definitions 71
14.04 Matching Contributions Employee Contributions 73
14.05 Time of Payment of Contributions 73
14.06 Special Allocation Provisions - Deferral Contributions,
Matching Contributions and Qualified Nonelective
Contributions 73
14.07 Annual Elective Deferral Limitation 75
14.08 Actual Deferral Percentage ("ADP") Test 75
14.09 Nondiscrimination Rules for Employer Matching
Contributions/Participant Nondeductible Contributions 77
14.10 Multiple Use Limitation 80
14.11 Distribution Restrictions 80
14.12 Special Allocation Rules 82
ARTICLE A, APPENDIX TO BASIC PLAN DOCUMENT (Direct Rollovers) A-1
ARTICLE B, APPENDIX TO BASIC PLAN DOCUMENT ($150,000 Compensation Limit) B-1
ii
<PAGE>
ALPHABETICAL LISTING OF DEFINITIONS
Section Reference
Plan Definition (Page Number)
100% Limitation 3.19(1) (24)
Account 1.14 (5)
Accounting Date 1.20 (6)
Accrued Benefit 1.15 (5)
Actual Deferral Percentage ("ADP") Test 14.08 (75)
Adoption Agreement 1.04 (1)
Advisory Committee 1.06 (2)
Annual Addition 3.19(a) (22)
Average Contribution Percentage Test 14.09 (77)
Beneficiary 1.11 (3)
Break in Service for Eligibility Purposes 2.03 (12)
Break in Service for Vesting Purposes 5.07 (30)
Cash-out Distribution 5.04 (28)
Code 1.25 (6)
Code Section 411(d)(6) Protected Benefits 13.02 (66)
Compensation 1.12 (3)
Compensation for Code Section 401(k) Purpose 14.03(f) (71)
Compensation for Code Section 415 Purposes 3.19(b) (22)
Compensation for Top Heavy Purposes 1.33(B)(3) (11)
Contract(s) 11.03(c)(62)
Custodian Designation 10.03[B] (54)
Deemed Cash-out Rule 5.04(C) (29)
Deferal Contributions 14.03(g) (71)
Deferal Contributions Account 14.06(A) (73)
Defined Benefit Plan 3.19(i) (23)
Defined Benefit Plan Fraction 3.19(j) (23)
Defined Contribution Plan 3.19(h) (23)
Defined Contribution Plan Fraction 3.19(k) (24)
Determination Date 1.33(B)(7) (11)
Disability 1.28 (7)
Distribution Date 6.01 (32)
Distribution Restrictions 14.03(m) (72)
Earned Income 1.13 (5)
Effective Date 1.18 (5)
Elective Deferrals 14.03(h) (71)
Elective Transfer 13.06(A) (67)
Eligible Employee 14.03(c) (71)
Employee 1.07 (2)
Employee Contributions 14.03(n) (73)
Employer 1.01 (l)
Employer for Code Section 415 Purposes 3.19(c) (22)
Employer for Top Heavy Purposes 1.33(B)(6) (11)
Employer Commencement Date 2.02 (12)
ERISA 1.24 (6)
Excess Aggregate Contributions 14.09(D) (79)
Excess Amount 3.19(d) (22)
Excess Contributions 14.08 (77)
Exempt Participant 8.01 (44)
Forfeiture Break in Service 5.08 (30)
Group Trust Fund 10.16 (59)
Hardship 6.01(A)(4) (32)
Hardship for Code Section 401(k) Purposes 14.11(A) (80)
Highly Compensated Employee 1.09 (2)
Highly Compensated Group 14.03(d) (71)
Hour of Service 1.27 (6)
Incidental Insurance Benefits 11.01(A) (61)
Insurable Participant 11.03(d) (62)
Investment Manager 9.04(i) (48)
Issuing Insurance Company 11.03(b) (62)
Joint Survivor Annuity 6.04(A) (37)
Key Employee 1.33(B)(1) (10)
Leased Employees 1.31 (8)
Limitation Year 1.17 and 3.19(e) (5 and 22)
Loan Policy 9.04(A) (49)
Mandatory Contributions 14.04(A) (73)
Mandatory Contributions Account 14.04(A) (73)
Master or Prototype Plan 3.19(f) (23)
Matching Contributions 14.03(i) (72)
Maximum Permissible Account 3.19(g) (23)
Minimum Distribution Incidental Benefit 6.02(A) (34)
Multiple Use Limitation 14.10 (80)
Named Fiduciary 10.03[D] (56)
Nonelective Contributions 14.03(j) (72)
Nonforfeitable 1.16 (5)
Nonhighly Compensated Employee 14.03(b) (71)
Nonhighly Compensated Group 14.03(e) (71)
Non-Key Employee 1.33(B)(2) (11)
Nontransferable Annunity 1.23 (6)
Normal Retirement Age 5.01 (28)
Owner-Employee 1.08 (2)
Paired Plans 1.34 (11)
Participant 1.10 (3)
Participant Deductible Contributions 4.02 (26)
Participant Forfeiture 3.05 (18)
Participant Loans 10.03[E] (56)
Participant Nondeductible Contributions 4.01 (26)
Permissive Aggregation Group 1.33(B)(5) (11)
Plan 1.03 (1)
Plan Administrator 1.05 (1)
Plan Entry Date 1.19 (6)
Plan Year 1.17 (6)
Policy 11.03(a) (62)
Predecessor Employer 1.29 (8)
Preretirement Suvivor Annuity 6.04(B) (37)
Qualified Domestic Relations Order 6.07 (40)
Qualified Matching Contributions 14.03(k) (72)
Qualified Nonelective Contributions 14.03(l) (72)
Qualifying Employer Real Property 10.03[F] (57)
Qualifying Employer Securities 10.03[F] (57)
iii
<PAGE>
Section Reference
Plan Definition (Page Number)
Related Employers 1.30 (8)
Required Aggregation Group 1.33(B)(4) (11)
Required Beginning Date 6.01(B) (33)
Rollover Contributions 4.03 (26)
Self-Employed Individual 1.08 (2)
Service 1.26 (6)
Term Life Insurance Contract 11.03(a) (62)
Top Heavy Minimum Allocation 3.04(B) (15)
Top Heavy Ratio 1.33 (9)
Trust 1.21 (6)
Trustee 1.02 (1)
Trustee Designation 10.03[A] (52)
Trust Fund 1.22 (6)
Weighted Average Allocation Method 14.12 (82)
Year of Service for Eligibility Purposes 2.02 (12)
Year of Service for Vesting Purposes 5.06 (30)
iv
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BOGLE & GATES
DEFINED CONTRIBUTION PROTOTYPE PLAN AND TRUST AGREEMENT
BASIC PLAN DOCUMENT #1
BOGLE & GATES, in its capacity as Prototype Plan Sponsor, establishes
this Prototype Plan intended to conform to and qualify under Section 401 and
Section 501 of the Internal Revenue Code of 1986, as amended. An Employer
establishes a Plan and Trust under this Prototype Plan by executing an
Adoption Agreement. If the Employer adopts this Plan as a restated Plan in
substitution for, and in amendment of, an existing plan, the provisions of
this Plan, as a restated Plan, apply solely to an Employee whose employment
with the Employer terminates on or after the restated Effective Date of the
Employer's Plan. If an Employee's employment with the Employer terminates
prior to the restated Effective Date, that Employee is entitled to benefits
under the Plan as the Plan existed on the date of the Employee's termination
of employment.
ARTICLE I
DEFINITIONS
1.01 "Employer" means each employer who adopts this Plan by executing
an Adoption Agreement.
1.02 "Trustee" means the person or persons who as Trustee execute the
Employer's Adoption Agreement, or any successor in office who in writing
accepts the position of Trustee. The Employer must designate in its Adoption
Agreement whether the Trustee will administer the Trust as a discretionary
Trustee or as a nondiscretionary Trustee. If a person acts as a discretionary
Trustee, the Employer also may appoint a Custodian. See Article X.
1.03 "Plan" means the retirement plan established or continued by the
Employer in the form of this Agreement, including the Adoption Agreement
under which the Employer has elected to participate in this Prototype Plan.
The Employer must designate the name of the Plan in its Adoption Agreement.
An Employer may execute more than one Adoption Agreement offered under this
Prototype Plan, each of which will constitute a separate Plan and Trust
established or continued by that Employer. The Plan and the Trust created by
each adopting Employer is a separate Plan and a separate Trust, independent
from the plan and the trust of any other employer adopting this Prototype
Plan. All section references within the Plan are Plan section references
unless the context clearly indicates otherwise.
1.04 "Adoption Agreement" means the document executed by each Employer
adopting this Prototype Plan. The terms of this Prototype Plan as modified by
the terms of an adopting Employer's Adoption Agreement constitute a separate
Plan and Trust to be construed as a single Agreement. Each elective provision
of the Adoption Agreement corresponds by section reference to the section of
the Plan which grants the election. Each Adoption Agreement offered under
this Prototype Plan is either a Nonstandardized Plan or a Standardized Plan,
as identified in the preamble to that Adoption Agreement. The provisions of
this Prototype Plan apply equally to Nonstandardized Plans and to Standardized
Plans unless otherwise specified.
1.05 "Plan Administrator" is the Employer unless the Employer
designates another person to hold the position of Plan Administrator. In
addition to his other duties, the Plan Administrator has full
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responsibility for compliance with the reporting and disclosure rules under
ERISA as respects this Agreement.
1.06 "Advisory Committee" means the Employer's Advisory Committee as
from time to time constituted.
1.07 "Employee" means any employee (including a Self-Employed
Individual) of the Employer. The Employer must specify in its Adoption
Agreement any Employee, or class of Employees, not eligible to participate in
the Plan. If the Employer elects to exclude collective bargaining employees,
the exclusion applies to any employee of the Employer included in a unit of
employees covered by an agreement which the Secretary of Labor finds to be a
collective bargaining agreement between employee representatives and one or
more employers unless the collective bargaining agreement requires the
employee to be included within the Plan. The term "employee representatives"
does not include any organization more than half the members of which are
owners, officers, or executives of the Employer.
1.08 "Self-Employed Individual/Owner-Employee." "Self-Employed
Individual" means an individual who has Earned Income (or who would have had
Earned Income but for the fact that the trade or business did not have net
earnings) for the taxable year from the trade or business for which the Plan
is established. "Owner-Employee" means a Self-Employed Individual who is the
sole proprietor in the case of a sole proprietorship. If the Employer is a
partnership, "Owner-Employee" means a Self-Employed Individual who is a
partner and owns more than 10% of either the capital or profits interest of
the partnership.
1.09 "Highly Compensated Employee" means an Employee who, during the
Plan Year or during the preceding 12-month period:
(a) is a more than 5% owner of the Employer (applying the constructive
ownership rules of Code Section 318, and applying the principles of
Code Section 318, for an unincorporated entity);
(b) has Compensation in excess of $75,000 (as adjusted by the
Commissioner of Internal Revenue for the relevant year);
(c) has Compensation in excess of $50,000 (as adjusted by the
Commissioner of Internal Revenue for the relevant year) and is part
of the top-paid 20% group of employees (based on Compensation for
the relevant year); or
(d) has Compensation in excess of 50% of the dollar amount prescribed
in Code Section 415(b)(1)(A) (relating to defined benefit plans) and
is an officer of the Employer.
If the Employee satisfies the definition in clause (b), (c) or (d) in
the Plan Year but does not satisfy clause (b), (c) or (d) during the
preceding 12-month period and does not satisfy clause (a) in either period,
the Employee is a Highly Compensated Employee only if he is one of the 100
most highly compensated Employees for the Plan Year. The number of officers
taken into account under clause (d) will not exceed the greater of 3 or 10%
of the total number (after application of the Code Section 414(q) exclusions)
of Employees, but no more than 50 officers. If no Employee satisfies the
Compensation requirement in clause (d) for the relevant year, the Advisory
Committee will treat the highest paid officer as satisfying clause (d) for
that year.
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For purposes of this Section 1.09, "Compensation" means Compensation as
defined in Section 1.12, except any exclusions from Compensation elected in
the Employer's Adoption Agreement Section 1.12 do not apply, and Compensation
must include "elective contributions" (as defined in Section 1.12). The
Advisory Committee must make the determination of who is a Highly Compensated
Employee, including the determinations of the number and identity of the top
paid 20% group, the top 100 paid Employees, the number of officers includible
in clause (d) and the relevant Compensation, consistent with Code Section
414(q) and regulations issued under that Code section. The Employer may make
a calendar year election to determine the Highly Compensated Employees for
the Plan Year, as prescribed by Treasury regulations. A calendar year
election must apply to all plans and arrangements of the Employer. For
purposes of applying any nondiscrimination test required under the Plan or
under the Code, in a manner consistent with applicable Treasury regulations,
the Advisory Committee will treat a Highly Compensated Employee and all
family members (a spouse, a lineal ascendant or descendant, or a spouse of a
lineal ascendant or descendant) as a single Highly Compensated Employee, but
only if the Highly Compensated Employee is a more than 5% owner or is one of
the 10 Highly Compensated Employees with the greatest Compensation for the
Plan Year. This aggregation rule applies to a family member even if that
family member is a Highly Compensated Employee without family aggregation.
The term "Highly Compensated Employee" also includes any former Employee
who separated from Service (or has a deemed Separation from Service, as
determined under Treasury regulations) prior to the Plan Year, performs no
Service for the Employer during the Plan Year, and was a Highly Compensated
Employee either for the separation year or any Plan Year ending on or after
his 55th birthday. If the former Employee's Separation from Service occurred
prior to January 1, 1987, he is a Highly Compensated Employee only if he
satisfied clause (a) of this Section 1.09 or received Compensation in excess
of $50,000 during: (1) the year of his Separation from Service (or the prior
year); or (2) any year ending after his 54th birthday.
1.10 "Participant" is an Employee who is eligible to be and becomes a
Participant in accordance with the provisions of Section 2.01.
1.11 "Beneficiary" is a person designated by a Participant who is or
may become entitled to a benefit under the Plan. A Beneficiary who becomes
entitled to a benefit under the Plan remains a Beneficiary under the Plan
until the Trustee has fully distributed his benefit to him. A Beneficiary's
right to (and the Plan Administrator's, the Advisory Committee's or a
Trustee's duty to provide to the Beneficiary) information or data concerning
the Plan does not arise until he first becomes entitled to receive a benefit
under the Plan.
1.12 "Compensation" means, except as provided in the Employer's
Adoption Agreement, the Participant's Earned Income, wages, salaries, fees
for professional service 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). The Employer must elect
in its Adoption Agreement whether to include elective contributions in the
definition of Compensation. "Elective contributions" are amounts excludible
from the Employee's gross income under Code Sections 125, 402(a)(8), 402(h)
or 403(b), and contributed by the Employer, at the Employee's election, to a
Code Section 401(k) arrangement, a Simplified Employee Pension, cafeteria
plan or tax-sheltered annuity. The term "Compensation" does not include:
3
<PAGE>
(a) Employer contributions (other than "elective contributions," if
includible in the definition of Compensation under Section 1.12 of the
Employer's Adoption Agreement) to a plan of deferred compensation to
the extent the contributions are not included in the gross income of
the Employee for the taxable year in which contributed, on behalf of
an Employee to a Simplified Employee Pension Plan to the extent such
contributions are excludible from the Employee's gross income, and
any distributions from a plan of deferred compensation, regardless of
whether such amounts are includible in the gross income of the Employee
when distributed.
(b) Amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by an Employee
either becomes freely transferable or is no longer subject to a
substantial risk of forfeiture.
(c) Amounts realized from the sale, exchange or other disposition
of stock acquired under a stock option described in Part II, Subchapter
D, Chapter 1 of the Code.
(d) Other amounts which receive special tax benefits, such as
premiums for group term life insurance (but only to the extent that
the premiums are not includible in the gross income of the Employee),
or contributions made by an Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity contract
described in Code Section 403(b) (whether or not the contributions
are excludible from the gross income of the Employee), other than
"elective contributions," if elected in the Employer's Adoption
Agreement.
Any reference in this Plan to Compensation is a reference to the
definition in this Section 1.12, unless the Plan reference specifies a
modification to this definition. The Advisory Committee will take into
account only Compensation actually paid for the relevant period. A
Compensation payment includes Compensation by the Employer through another
person under the common paymaster provisions in Code Sections 3121 and 3306.
(A) LIMITATIONS ON COMPENSATION.
(1) COMPENSATION DOLLAR LIMITATION. For any Plan Year beginning after
December 31, 1988, the Advisory Committee must take into account only the
first $200,000 (or beginning January 1, 1990, such larger amount as the
Commissioner of Internal Revenue may prescribe) of any Participant's
Compensation. For any Plan Year beginning prior to January 1, 1989, this
$200,000 limitation (but not the family aggregation requirement described in
the next paragraph) applies only if the Plan is top heavy for such Plan Year
or operates as a deemed top heavy plan for such Plan Year.
(2) APPLICATION OF COMPENSATION LIMITATION TO CERTAIN FAMILY MEMBERS.
The $200,000 Compensation limitation applies to the combined Compensation of
the Employee and of any family member aggregated with the Employee under
Section 1.09 who is either (i) the Employee's spouse; or (ii) the Employee's
lineal descendant under the age of 19. If, for a Plan Year, the combined
Compensation of the Employee and such family members who are Participants
entitled to an allocation for that Plan Year exceeds the $200,000 (or
adjusted) limitation. "Compensation" for each such Participant, for purposes
of the contribution and allocation provisions of Article III, means his
Adjusted Compensation. Adjusted Compensation is the amount which bears the
same ratio to the $200,000 (or adjusted) limitation as the affected
Participant's Compensation (without regard to the $200,000 Compensation
limitation) bears to the combined Compensation of all the affected
Participants in the family unit. If the Plan uses permitted disparity, the
Advisory Committee must determine the integration
4
<PAGE>
level of each affected family member Participant prior to the proration of
the $200,000 Compensation limitation, but the combined integration level of
the affected Participants may not exceed $200,000 (or the adjusted
limitation). The combined Excess Compensation of the affected Participants in
the family unit may not exceed $200,000 (or the adjusted limitation) minus
the affected Participants' combined integration level (as determined under
the preceding sentence). If the combined Excess Compensation exceeds this
limitation, the Advisory Committee will prorate the Excess Compensation
limitation among the affected Participants in the family unit in proportion
to each such individual's Adjusted Compensation minus his integration level.
If the Employer's Plan is a Nonstandardized Plan, the Employer may elect to
use a different method in determining the Adjusted Compensation of the
affected Participants by specifying that method in an addendum to the
Adoption Agreement, numbered Section 1.12.
(B) NONDISCRIMINATION. For purposes of determining whether the Plan
discriminates in favor of Highly Compensated Employees, Compensation means
Compensation as defined in this Section 1.12, except: (1) the Employer may
elect to include or to exclude elective contributions, irrespective of the
Employer's election in its Adoption Agreement regarding elective
contributions; and (2) the Employer will not give effect to any elections
made in the "modifications to Compensation definition" section of Adoption
Agreement Section 1.12. The Employer's election described in clause (1) must
be consistent and uniform with respect to all Employees and all plans of the
Employer for any particular Plan Year. If the Employer's Plan is a
Nonstandardized Plan, the Employer, irrespective of clause (2), may elect to
exclude from this nondiscrimination definition of Compensation any items of
Compensation excludible Under Code Section 414(s) and the applicable Treasury
regulations, provided such adjusted definition conforms to the
nondiscrimination requirements of those regulations.
1.13 "Earned Income" means net earnings from self-employment in the
trade or business with respect to which the Employer has established the
Plan, provided personal services of the individual are a material income
producing factor. The Advisory Committee will determine net earnings without
regard to items excluded from gross income and the deductions allocable to
those items. The Advisory Committee will determine net earnings after the
deduction allowed to the Self-Employed Individual for all contributions made
by the Employer to a qualified plan and, for Plan years beginning after
December 31, 1989, the deduction allowed to the Self-Employed under Code
Section 164(f) for self-employment taxes.
1.14 "Account" means the separate account(s) which the Advisory
Committee or the Trustee maintains for a Participant under the Employer's
Plan.
1.15 "Accrued Benefit" means the amount standing in a Participant's
Account(s) as of any date derived from both Employer contributions and
Employee contributions, if any.
1.16 "Nonforfeitable" means a Participant's or Beneficiary's
unconditional claim, legally enforceable against the Plan, to the
Participant's Accrued Benefit.
1.17 "Plan Year" means the fiscal year of the Plan, the consecutive
month period specified in the Employer's Adoption Agreement. The Employer's
Adoption Agreement also must specify the "Limitation Year" applicable to the
limitations on allocations described in Article III. If the Employer
maintains Paired Plans, each Plan must have the same Plan Year.
1.18 "Effective Date" of this Plan is the date specified in the
Employer's Adoption Agreement.
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1.19 "Plan Entry Date" means the date(s) specified in Section 2.01 of
the Employer's Adoption Agreement.
1.20 "Accounting Date" is the last day of an Employer's Plan Year.
Unless otherwise specified in the Plan, the Advisory Committee will make all
Plan allocations for a particular Plan Year as of the Accounting Date of that
Plan Year.
1.21 "Trust" means the separate Trust created under the Employer's
Plan.
1.22 "Trust Fund" means all property of every kind held or acquired by
the Employer's Plan, other than incidental benefit insurance contracts.
1.23 "Nontransferable Annuity" means an annuity which by its terms
provides that it may not be sold, assigned, discounted, pledged as collateral
for a loan or security for the performance of an obligation or for any
purpose to any person other than the insurance company. If the Plan
distributes an annuity contract, the contract must be a Nontransferable Annuity.
1.24 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
1.25 "Code" means the Internal Revenue Code of 1986, as amended.
1.26 "Service" means any period of time the Employee is in the employ
of the Employer, including any period the Employee is on an unpaid leave of
absence authorized by the Employer under a uniform, nondiscriminatory policy
applicable to all Employees. "Separation from Service" means the Employee no
longer has an employment relationship with the Employer maintaining this Plan.
1.27 "Hour of Service" means:
(a) Each Hour of Service for which the Employer, either directly or
indirectly, pays an Employee, or for which the Employee is entitled to
payment, for the performance of duties. The Advisory Committee credits
Hours of Service under this paragraph (a) to the Employee for the
computation period in which the Employee performs the duties,
irrespective of when paid;
(b) Each Hour of Service for back pay, irrespective of mitigation of
damages, to which the Employer has agreed or for which the Employee has
received an award. The Advisory Committee credits Hours of Service under
this paragraph (b) to the Employee for the computation periods(s) to
which the award or the agreement pertains rather than for the
computation period in which the award, agreement or payment is made; and
(c) Each Hour of Service for which the Employer, either directly or
indirectly, pays an Employee, or for which the Employee is entitled to
payment (irrespective of whether the employment relationship is
terminated), for reasons other than for the performance of duties during
a computation period, such as leave of absence, vacation, holiday, sick
leave, illness, incapacity (including disability), layoff, jury duty or
military duty. The Advisory Committee will credit no more than 501 Hours
of Service under this paragraph (c) to an Employee on account of any
single continuous period during which the Employee does not perform any
duties (whether or not such period occurs during a single computation
period). The Advisory Committee credits Hours of Service under this
paragraph (c) in accordance with the rules of paragraphs (b) and (c)
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of Labor Reg. Section 2530.200b-2, which the Plan, by this reference,
specifically incorporates in full within this paragraph (c).
The Advisory Committee will not credit an Hour of Service under more
than one of the above paragraphs. A computation period for purposes of this
Section 1.27 is the Plan Year, Year of Service period, Break in Service
period or other period, as determined under the Plan provision for which the
Advisory Committee is measuring an Employee's Hours of Service. The Advisory
Committee will resolve any ambiguity with respect to the crediting of an Hour
of Service in favor of the Employee.
(A) METHOD OF CREDITING HOURS OF SERVICE. The Employer must elect in its
Adoption Agreement the method the Advisory Committee will use in crediting an
Employee with Hours of Service. For purposes of the Plan, "actual" method
means the determination of Hours of Service from records of hours worked and
hours for which the Employer makes payment or for which payment is due from
the Employer. If the Employer elects to apply an "equivalency" method, for
each equivalency period for which the Advisory Committee would credit the
Employee with at least one Hour of Service, the Advisory Committee will
credit the Employee with: (i) 10 Hours of Service for a daily equivalency;
(ii) 45 Hours of Service for a weekly equivalency; (iii) 95 Hours of Service
for a semimonthly payroll period equivalency; and (iv) 190 Hours of Service for
a monthly equivalency.
(B) MATERNITY/PATERNITY LEAVE. Solely for purposes of determining whether
the Employee incurs a Break in Service under any provision of this Plan, the
Advisory Committee must credit Hours of Service during an Employee's unpaid
absence period due to maternity or paternity leave. The Advisory Committee
considers an Employee on maternity or paternity leave if the Employee's
absence is due to the Employee's pregnancy, the birth of the Employee's
child, the placement with the Employee of an adopted child, or the care of
the Employee's child immediately following the child's birth or placement.
The Advisory Committee credits Hours of Service under this paragraph on the
basis of the number of Hours of Service the Employee would receive if he were
paid during the absence period or, if the Advisory Committee cannot determine
the number of Hours of Service the Employee would receive, on the basis of 8
hours per day during the absence period. The Advisory Committee will credit
only the number (not exceeding 501) of Hours of Service necessary to prevent
an Employee's Break in Service. The Advisory Committee credits all Hours of
Service described in this paragraph to the computation period in which the
absence period begins or, if the Employee does not need these Hours of Service
to prevent a Break in Service in the computation period in which his absence
period begins, the Advisory Committee credits these Hours of Service to the
immediately following computation period.
1.28 "Disability" means the Participant, because of a physical or
mental disability, will be unable to perform the duties of his customary
position of employment (or is unable to engage in any substantial gainful
activity) for an indefinite period which the Advisory Committee considers
will be of long continued duration. A Participant also is disabled if he
incurs the permanent loss or loss of use of a member or function of the body,
or is permanently disfigured, and incurs a Separation from Service. The Plan
considers a Participant disabled on the date the Advisory Committee
determines the Participant satisfies the definition of disability. The
Advisory Committee may require a Participant to submit to a physical
examination in order to confirm disability. The Advisory Committee will apply
the provisions of this Section 1.28 in a nondiscriminatory, consistent and
uniform manner. If the Employer's Plan is a Nonstandardized Plan, the
Employer may provide an alternate definition of disability in an addendum to
its Adoption Agreement, numbered Section 1.28.
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1.29 SERVICE FOR PREDECESSOR EMPLOYER. If the Employer maintains the
plan of a predecessor employer, the Plan treats service of the Employee with
the predecessor employer as service with the Employer. If the Employer does
not maintain the plan of a predecessor employer, the Plan does not credit
service with the predecessor employer, unless the Employer identifies the
predecessor in its Adoption Agreement and specifies the purposes for which
the Plan will credit service with that predecessor employer.
1.30 RELATED EMPLOYERS. A related group is a controlled group of
corporations (as defined in Code Section 414(b)), trades or businesses
(whether or not incorporated) which are under common control (as defined in
Code Section 414(c)) or an affiliated service group (as defined in Code
Section 414(m) or in Code Section 414(o)). If the Employer is a member of a
related group, the term "Employer" includes the related group members for
purposes of crediting Hours of Service, determining Years of Service and
Breaks in Service under Articles II and V, applying the Participation Test
and the Coverage Test under Section 3.06(E), applying the limitations on
allocations in Part 2 of Article III, applying the top heavy rules and the
minimum allocation requirements of Article III, the definitions of Employee,
Highly Compensated Employee, Compensation and Leased Employee, and for any
other purpose required by the applicable Code section or by a Plan provision.
However, an Employer may contribute to the Plan only by being a signatory to
the Execution Page of the Adoption Agreement or to a Participation Agreement
to the Employer's Adoption Agreement. If one or more of the Employer's
related group members become Participating Employers by executing a
Participation Agreement to the Employer's Adoption Agreement, the term
"Employer" includes the participating related group members for all purposes
of the Plan, and "Plan Administrator" means the Employer that is the
signatory to the Execution Page of the Adoption Agreement.
If the Employer's Plan is a Standardized Plan, all Employees of the
Employer or of any member of the Employer's related group, are eligible to
participate in the Plan, irrespective of whether the related group member
directly employing the Employee is Participating Employer. If the Employer's
Plan is a Nonstandardized Plan, the Employer must specify in Section 1.07 of
its Adoption Agreement, whether the Employees of related group members that
are not Participating Employers are eligible to participate in the Plan.
Under a Nonstandardized Plan, the Employer may elect to exclude from the
definition of "Compensation" for allocation purposes any Compensation
received from a related employer that has not executed a Participation
Agreement and whose Employees are not eligible to participate in the Plan.
1.31 LEASED EMPLOYEES. The Plan treats a Leased Employee as an Employee
of the Employer. A Leased Employee is an individual (who otherwise is not an
Employee of the Employer) who, pursuant to a leasing agreement between the
Employer and any other person, has performed services for the Employer (or
for the Employer and any persons related to the Employer within the meaning
of Code Section 144(a)(3)) on a substantially full time basis for at least one
year and who performs services historically performed by employees in the
Employer's business field. If a Leased Employee is treated as an Employee by
reason of this Section 1.31 of the Plan, "Compensation" includes Compensation
from the leasing organization which is attributable to services performed for
the Employer.
(A) SAFE HARBOR PLAN EXCEPTION. The Plan does not treat a Leased Employee as
an Employee if the leasing organization covers the employee in a safe harbor
plan and, prior to application of this safe harbor plan exception, 20% or
less of the Employer's Employees (other than Highly Compensated Employees)
are Leased Employees. A safe harbor plan is a money purchase pension plan
providing immediate participation, full and immediate vesting, and a
nonintegrated contribution formula equal to at least 10% of the employee's
compensation without regard to employment by the leasing organization on a
specified
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date. The safe harbor plan must determine the 10% contribution on the basis
of compensation as defined in Code Section 415(c)(3) plus elective
contributions (as defined in Section 1.12).
(B) OTHER REQUIREMENTS. The Advisory Committee must apply this Section 1.31
in a manner consistent with Code Sections 414(n) and 414(o) and the
regulations issued under those Code sections. The Employer must specify in
the Adoption Agreement the manner in which the Plan will determine the
allocation of Employer contributions and Participant forfeitures on behalf of
a Participant if the Participant is a Leased Employee covered by a plan
maintained by the leasing organization.
1.32 SPECIAL RULES FOR OWNER-EMPLOYEES. The following special
provisions and restrictions apply to Owner-Employees:
(a) If the Plan provides contributions or benefits for an
Owner-Employee or for a group of Owner-Employees who controls the trade or
business with respect to which this Plan is established and the
Owner-Employee or Owner-Employees also control as Owner-Employees one or
more other trades or businesses, plans must exist or be established with
respect to all the controlled trades or businesses so that when the plans
are combined they form a single plan which satisfies the requirements of
Code Section 401(a) and Code Section 401(d) with respect to the employees
of the controlled trades or businesses.
(b) The Plan excludes and Owner-Employee or group of Owner-Employees
if the Owner-Employee or group of Owner-Employees controls any other
trade or business, unless the employees of the other controlled trade or
business participate in a plan which satisfies the requirements of Code
Section 401(a) and Code Section 401(d). The other qualified plan must
provide contributions and benefits which are not less favorable than the
contributions and benefits provided for the Owner-Employee or group of
Owner-Employees under this Plan, or if an Owner-Employee is covered
under another qualified plan as an Owner-Employee, then the plan
established with respect to the trade or business he does control must
provide contributions or benefits as favorable as those provided under
the most favorable plan of the trade or business he does not control. If
the exclusion of this paragraph (b) applies and the Employer's Plan is a
Standardized Plan, the Employer may not participate or continue to
participate in this Prototype Plan and the Employer's Plan becomes an
individually-designed plan for purposes of qualification reliance.
(c) For purposes of paragraphs (a) and (b) of this Section 1.32, an
Owner-Employee or group of Owner-Employees controls a trade or business
if the Owner-Employee or Owner-Employees together (1) own the entire
interest in an unincorporated trade or business, or (2) in the case of a
partnership, own more than 50% of either the capital interest or the
profits interest in the partnership.
1.33 DETERMINATION OF TOP HEAVY STATUS. If this Plan is the only
qualified plan maintained by the Employer, the Plan is top heavy for a Plan
Year if the top heavy ratio as of the Determination Date exceeds 60%. The top
heavy ratio is a fraction, the numerator of which is the sum of the present
value of Accrued Benefits of all Key Employees as of the Determination Date
and the denominator of which is a similar sum determined for all Employees.
The Advisory Committee must include in the top heavy ratio, as part of the
present value of Accrued Benefits, any contribution not made as of the
Determination Date but includible under Code Section 416 and the applicable
Treasury regulations, and distributions made within the Determination Period.
The Advisory committee must calculate the top
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heavy ratio by disregarding the Accrued Benefit (and distributions, if any,
of the Accrued Benefit) of any Non-Key Employee who was formerly a Key
Employee, and by disregarding the Accrued Benefit (including distributions,
if any, of the Accrued Benefit) of an individual who has not received credit
for at least one Hour of Service with the Employer during the Determination
Period. The Advisory Committee must calculate the top heavy ratio, including
the extent to which it must take into account distributions, rollovers and
transfers, in accordance with Code Section 416 and the regulations under that
Code section.
If the Employer maintains other qualified plans (including a simplified
employee pension plan), or maintained another such plan which now is
terminated, this Plan is top heavy only if it is part of the Required
Aggregation Group, and the top heavy ratio for the Required Aggregation Group
and for the Permissive Aggregation Group, if any, each exceeds 60%. The
Advisory Committee will calculate the top heavy ratio in the same manner as
required by the first paragraph of this Section 1.33, taking into account all
plans within the Aggregation Group. To the extent the Advisory Committee must
take into account distributions to a Participant, the Advisory Committee must
include distributions from a terminated plan which would have been part of
the Required Aggregation Group if it were in existence on the Determination
Date. The Advisory Committee will calculate the present value of accrued
benefits under defined benefit plans or simplified employee pension plans
included within the group in accordance with the terms of those plans, Code
Section 416 and the regulations under that Code section. If a Participant in
a defined benefit plan is a Non-Key Employee, the Advisory Committee will
determine his accrued benefit under the accrual method, if any, which is
applicable uniformly to all defined benefit plans maintained by the Employer
or, if there is no uniform method, in accordance with the slowest accrual
rate permitted under the fractional rule accrual method described in Code
Section 411(b)(1)(C). If the Employer maintains a defined benefit plan, the
Employer must specify in Adoption Agreement Section 3.18 the actuarial
assumptions (interest and mortality only) the Advisory Committee will use to
calculate the present value of benefits from a defined benefit plan. If an
aggregated plan does not have a valuation date coinciding with the
Determination Date, the Advisory Committee must value the Accrued Benefits in
the aggregated plan as of the most recent valuation date falling within the
twelve-month period ending on the Determination Date, except as Code Section
416 and applicable Treasury regulations require for the first and second plan
year of a defined benefit plan. The Advisory Committee will calculate the top
heavy ratio with reference to the Determination Dates that fall within the
same calendar year.
(A) STANDARDIZED PLAN. If the Employer's Plan is a Standardized Plan, the Plan
operates as a deemed top heavy plan in all Plan Years, except, if the
Standardized Plan includes a Code Section 401(k) arrangement, the Employer
may elect to apply the top heavy requirements only in Plan Years for which
the Plan actually is top heavy. Under a deemed top heavy plan, the Advisory
Committee need not determine whether the Plan actually is top heavy. However,
if the Employer, in Adoption Agreement Section 3.18, elects to override the
100% limitation, the Advisory Committee will need to determine whether a
deemed top heavy Plan's to top heavy ratio for a Plan Year exceeds 90%.
(B) DEFINITIONS. For purposes of applying the provisions of this Section
1.33:
(1) "Key Employee" means, as of any Determination Date, any Employee
or former Employee (or Beneficiary of such Employee) who, for any Plan
Year in the Determination Period: (i) has Compensation in excess of 50%
of the dollar amount prescribed in Code Section 415(b)(1)(A) (relating to
defined benefit plans) and is an officer of the Employer; (ii) has
Compensation in excess of the dollar amount prescribed in Code Section
415(c)(1)(A) (relating to defined contribution plans) and is one of the
Employees owning the ten largest interests in the
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Employer; (iii) is a more than 5% owner of the Employer; or (iv) is a
more than 1% owner of the Employer and has Compensation of more than
$150,000. The constructive ownership rules of Code Section 318 (or the
principles of that section, in the case of an unincorporated Employer,)
will apply to determine ownership in the Employer. The number of officers
taken into account under clause (i) will not exceed the greater of 3 or
10% of the total number (after application of the Code Section 414(q)
exclusions) of Employees, but no more than 50 officers. The Advisory
Committee will make the determination of who is a Key Employee in
accordance with Code Section 416(i)(1) and the regulations under that
Code section.
(2) "Non-Key Employee" is an employee who does not meet the definition
of Key Employee.
(3) "Compensation" means Compensation as determined under Section 1.09
for purposes of identifying Highly Compensated Employees.
(4) "Required Aggregation Group" means: (i) each qualified plan of the
Employer in which at least one Key Employee participates at any time
during the Determination Period; and (ii) any other qualified plan of the
Employer which enables a plan described in clause (i) to meet the
requirements of Code Section 401(a)(4) or of Code Section 410.
(5) "Permissive Aggregation Group" is the Required Aggregation Group
plus any other qualified plans maintained by the Employer, but only if
such group would satisfy in the aggregate the requirements of Code Section
401(a)(4) and of Code Section 410. The Advisory Committee will determine
the Permissive Aggregation Group.
(6) "Employer" means the Employer that adopts this Plan and any related
employers described in Section 1.30.
(7) "Determination Date" for any Plan Year is the Accounting Date of
the preceding Plan Year or, in the case of the first Plan Year of the
Plan, the Accounting Date of that Plan Year. The "Determination Period"
is the 5 year period ending on the Determination Date.
1.34 "Paired Plans" means the Employer has adopted two Standardized
Plan Adoption Agreements offered with this Prototype Plan, one Adoption
Agreement being a Paired Profit Sharing Plan and one Adoption Agreement being
a Paired Pension Plan. A Paired Profit Sharing Plan may include a Code
Section 401(k) arrangement. A Paired Pension Plan must be a money purchase
pension plan or a target benefit pension plan. Paired Plans must be the
subject of a favorable opinion letter issued by the National Office of the
Internal Revenue Service. This Prototype Plan does not pair any of its
Standardized Plan Adoption Agreements with Standardized Plan Adoption
Agreements under a defined benefit prototype plan.
* * * * * * * * * * * * * * *
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ARTICLE II
EMPLOYEE PARTICIPANTS
2.01 ELIGIBILITY. Each Employee becomes a Participant in the Plan in
accordance with the participation option selected by the Employer in its
Adoption Agreement. If this Plan is a restated Plan, each Employee who was a
Participant in the Plan on the day before the Effective Date continues as a
Participant in the Plan, irrespective of whether he satisfies the
participation conditions in the restated Plan, unless otherwise provided in
the Employer's Adoption Agreement.
2.02 YEAR OF SERVICE - PARTICIPATION. For purposes of an Employee's
participation in the Plan under Adoption Agreement Section 2.01, the Plan
takes into account all of his Years of Service with the Employer, except as
provided in Section 2.03. "Year of Service" means an eligibility computation
period during which the Employee completes not less than the number of Hours
of Service specified in the Employer's Adoption Agreement. The initial
eligibility computation period is the first 12 consecutive month period
measured from the Employment Commencement Date. The Plan measures succeeding
eligibility computation periods in accordance with the option selected by the
Employer in its Adoption Agreement. If the Employer elects to measure
subsequent periods on a Plan Year basis, an Employee who receives credit for
the required number of Hours of Service during the initial eligibility
computation period and during the first applicable Plan Year will receive
credit for two Years of Service under Article II. "Employment Commencement
Date" means the date on which the Employee first performs an Hour of Service
for the Employer. If the Employer elects a service condition under Adoption
Agreement Section 2.01 based on months, the Plan does not apply any Hour of
Service requirement after the completion of the first Hour of Service.
2.03 BREAK IN SERVICE - PARTICIPATION. An Employee incurs a "Break in
Service" if during any 12 consecutive month period he does not complete more
than 500 Hours of Service with the Employer. The "12 consecutive month
period" under this Section 2.03 is the same 12 consecutive month period for
which the Plan measures "Years of Service" under Section 2.02.
(A) 2-YEAR ELIGIBILITY. If the Employer elects a 2 years of service condition
for eligibility purposes under Adoption Agreement Section 2.01, the Plan
treats an Employee who incurs a one year Break in Service and who has never
become a Participant as a new Employee on the date he first performs an Hour
of Service for the Employer after the Break in Service.
(B) SUSPENSION OF YEARS OF SERVICE. The Employer must elect in its Adoption
Agreement whether a Participant will incur a suspension of Years of Service
after incurring a one year Break in Service. If this rule applies under the
Employer's Plan, the Plan disregards a Participant's Years of Service (as
defined in Section 2.02) earned prior to a Break in Service until the
Participant completes another Year of Service and the Plan suspends the
Participant's participation in the Plan. If the Participant completes a Year
of Service following his Break in Service, the Plan restores that
Participant's pre-Break Years of Service (and the Participant resumes active
participation in the Plan) retroactively to the first day of the computation
period in which the Participant earns the first post-Break Year of Service.
The initial computation period under this Section 2.03(B) is the 12
consecutive month period measured from the date the Participant first
receives credit for an Hour of Service following the one year Break in
Service period. The Plan measures any subsequent periods, if necessary, in
a manner consistent with the computation period selection in Adoption
Agreement Section 2.02. This Section 2.03(B) does not affect a Participant's
vesting credit under Article V and, during a suspension period, the
Participant's Account continues to
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share fully in Trust Fund allocations under Section 9.11. Futhermore,
this Section 2.03(B) will not result in the restoration of any Year of
Service disregarded under the Break in Service rule of Section 2.03(A).
2.04 PARTICIPATION UPON RE-EMPLOYMENT. A Participant whose employment with
the Employer terminates will re-enter the Plan as a Participant on the date
of his re-employment, subject to the Break in Service rule, if applicable,
under Section 2.03(B). An Employee who satisfies the Plan's eligibility
conditions but who terminates employment with the Employer prior to becoming
a Participant will become a Participant on the later of the Plan Entry Date
on which he would have entered the Plan had he not terminated employment or
the date of his re-employment, subject to the Break in Service rule, if
applicable, under Section 2.03(B). Any Employee who terminates employment
prior to satisfying the Plan's eligibility conditions becomes a Participant
in accordance with Adoption Agreement Section 2.01.
2.05 CHANGE IN EMPLOYEE STATUS. If a Participant has not incurred a
Separation from Service but ceases to be eligible to participate in the Plan,
by reason of employment within an employment classification excluded by the
Employer under Adoption Agreement Section 1.07, the Advisory Committee must
treat the Participant as an Excluded Employee during the period such a
Participant is subject to the Adoption Agreement exclusion. The Advisory
Committee determines a Participant's sharing in the allocation of Employer
contributions and Participant forfeitures, if applicable, by disregarding his
Compensation paid by the Employer for services rendered in his capacity as an
Excluded Employee. However, during such period of exclusion, the Participant,
without regard to employment classification, continues to receive credit for
vesting under Article V for each included Year of Service and the Participant's
Account continues to share fully in Trust Fund allocations under Section 9.11.
If an Excluded Employee who is not a Participant becomes eligible to
participate in the Plan by reason of a change in employment classification,
he will participate in the Plan immediately if he has satisfied the
eligibility conditions of Section 2.01 and would have been a Participant had
he not been an Excluded Employee during his period of Service. Furthermore,
the Plan takes into account all of the Participant's included Years of
Service with the Employer as an Excluded Employee for purposes of vesting
credit under Article V.
2.06 ELECTION NOT TO PARTICIPATE. If the Employer's Plan is a
Standardized Plan, the Plan does not permit an otherwise eligible
Employee nor any Participant to elect not to participate in the Plan.
If the Employer's Plan is a Nonstandardized Plan, the Employer must specify
in its Adoption Agreement whether an Employee eligible to participate, or any
present Participant, may elect not to participate in the Plan. For an election
to be effective for a particular Plan Year, the Employee or Participant must
file the election in writing with the Plan Administrator not later than the
time specified in the Employer's Adoption Agreement. The Employer may not make
a contribution under the Plan for the Employee or for the Participant for the
Plan Year for which the election is effective, nor for any succeeding Plan
Year, unless the Employee or Participant re-elects to participate in the
Plan. After an Employee's or Participant's election not to participate has
been effective for at least the minimum period prescribed by the Employer's
Adoption Agreement, the Employee or Participant may re-elect to participate
in the Plan for any Plan Year and subsequent Plan Years. An Employee or
Participant may re-elect to participate in the Plan by filing his election
in writing with the Plan Administrator not later than the time specified in
the Employer's Adoption Agreement. An Employee or Participant who re-elects
to participate may again elect not to participate only as permitted in the
Employer's Adoption Agreement. If an Employee is a Self-Employed Individual,
the Employee's election (except as permitted by Treasury
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regulations without creating a Code Section 401(k) arrangement with respect to
that Self-Employed Individual) must be effective no later than the date the
Employee first would become a Participant in the Plan and the election is
irrevocable. The Plan administrator must furnish an Employee or a Participant
any form required for purposes of an election under this Section 2.06. An
election timely filed is effective for the entire Plan Year.
A Participant who elects not to participate may not receive a
distribution of his Accrued Benefit attributable either to Employer or to
Participant contributions except as provided under Article IV or under
Article VI. However, for each Plan Year for which a Participant's election
not to participate is effective, the Participant's Account, if any, continues
to share in Trust Fund allocations under Article IX. Furthermore, the
Employee or the Participant receives vesting credit under Article V for each
included Year of Service during the period the election not to participate is
effective.
* * * * * * * * * * * * * * *
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ARTICLE III
EMPLOYER CONTRIBUTIONS AND FORFEITURES
PART 1. AMOUNT OF EMPLOYER CONTRIBUTIONS AND PLAN ALLOCATIONS: SECTIONS 3.01
THROUGH 3.06
3.01 AMOUNT. For each Plan Year, the Employer contributes to the Trust
the amount determined by application of the contribution option selected by the
Employer in its Adoption Agreement. The Employer may not make a contribution
to the Trust for any Plan Year to the extent the contribution would exceed
the Participants' Maximum Permissible Amounts.
The Employer contributes to this Plan on the condition its contribution is
not due to a mistake of fact and the Revenue Service will not disallow the
deduction for its contribution. The Trustee, upon written request from the
Employer, must return to the Employer the amount of the Employer's
contribution made by the Employer by mistake of fact or the amount of the
Employer's contribution disallowed as a deduction under Code Section 404. The
Trustee will not return any portion of the Employer's contribution under the
provisions of this paragraph more than one year after:
(a) The Employer made the contribution by mistake of fact; or
(b) The disallowance of the contribution as a deduction, and then, only
to the extent of the disallowance.
The Trustee will not increase the amount of the Employer contribution
returnable under this Section 3.01 for any earnings attributable to the
contribution, but the Trustee will decrease the Employer contribution
returnable for any losses attributable to it. The Trustee may require the
Employer to furnish it whatever evidence the Trustee deems necessary to
enable the Trustee to confirm the amount the Employer has requested be
returned is properly returnable under ERISA.
3.02 DETERMINATION OF CONTRIBUTION. The Employer, from its records,
determines the amount of any contributions to be made by it to the Trust
under the terms of the Plan.
3.03 TIME OF PAYMENT OF CONTRIBUTION. The Employer may pay its
contribution for each Plan Year in one or more installments without interest.
The Employer must make its contribution to the Plan within the time
prescribed by the Code or applicable Treasury regulations. Subject to the
consent of the Trustee, the Employer may make its contribution in property
rather than in cash, provided the contribution of property is not a
prohibited transaction under the Code or under ERISA.
3.04 CONTRIBUTION ALLOCATION.
(A) METHOD OF ALLOCATION. The Employer must specify in its Adoption Agreement
the manner of allocating each annual Employer contribution to this Trust.
(B) TOP HEAVY MINIMUM ALLOCATION. The Plan must comply with the provisions of
this Section 3.04(B), subject to the elections in the Employer's Adoption
Agreement.
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(1) TOP HEAVY MINIMUM ALLOCATION UNDER STANDARDIZED PLAN. Subject to the
Employer's election under Section 3.04(B)(3), the top heavy minimum
allocation requirement applies to a Standardized Plan for each Plan Year,
irrespective of whether the Plan is top heavy.
(a) Each Participant employed by the Employer on the last day of
the Plan Year will receive a top heavy minimum allocation for that
Plan Year. The Employer may elect in Section 3.04 of its Adoption
Agreement to apply this paragraph (a) only to a Participant who is
a Non-Key Employee.
(b) Subject to any overriding elections in Section 3.18 of the
Employer's Adoption Agreement, the top heavy minimum allocation is the
lesser of 3% of the Participant's Compensation for the Plan Year or
the highest contribution rate for the Plan Year made on behalf of any
Participant for the Plan Year. However, if the Employee participates
in Paired Plans, the top heavy minimum allocation is 3% of his
Compensation. If, under Adoption Agreement Section 3.04, the Employer
elects to apply paragraph (a) only to a Participant who is a Non-Key
Employee, the Advisory Committee will determine the "highest
contribution rate" described in the first sentence of this
paragraph (b) by reference only to the contribution rates of
Participants who are Key Employees for the Plan Year.
(2) TOP HEAVY MINIMUM ALLOCATION UNDER NONSTANDARDIZED PLAN. The top heavy
minimum allocation requirement applies to a Nonstandardized Plan only in Plan
Years for which the Plan is top heavy. Except as provided in the Employer's
Adoption Agreement, if the Plan is top heavy in any Plan Year:
(a) Each Non-Key Employee who is a Participant and is employed by the
Employer on the last day of the Plan Year will receive a top heavy
minimum allocation for that Plan Year, irrespective of whether he
satisfies the Hours of Service condition under Section 3.06 of the
Employer's Adoption Agreement; and
(b) The top heavy minimum allocation is the lesser of 3% of the
Non-Key Employee's Compensation for the Plan Year or the highest
contribution rate for the Plan Year made on behalf of any Key
Employee. However, if a defined benefit plan maintained by the
Employer which benefits a Key Employee depends on this Plan to
satisfy the antidiscrimination rules of Code Section 401(a)(4) or
the coverage rules of Code Section 410 (or another plan benefiting
the Key Employee so depends on such defined benefit plan), the top
heavy minimum allocation is 3% of the Non-Key Employee's Compensation
regardless of the contribution rate for the Key Employees.
(3) SPECIAL ELECTION FOR STANDARDIZED CODE SECTION 401(k) PLAN. If the
Employer's Plan is a Standardized Code Section 401(k) Plan, the Employer may
elect in Adoption Agreement Section 3.04 to apply the top heavy minimum
allocation requirements of Section 3.04(B)(1) only for Plan Years in which
the Plan actually is a top heavy plan.
(4) SPECIAL DEFINITIONS. For purposes of this Section 3.04(B), the term
"Participant" includes any Employee otherwise eligible to participate in the
Plan but who is not a Participant because of his Compensation level or
because of his failure to make elective deferrals under a Code Section
401(k) arrangement or because of his failure to make mandatory contributions.
For purposes of subparagraph (1)(b) or (2)(b),
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"Compensation" means Compensation as defined in Section 1.12, except
Compensation does not include elective contributions, irrespective of whether
the Employer has elected to include these amounts in Section 1.12 of its
Adoption Agreement, any exclusion selected in Section 1.12 of the Adoption
Agreement (other than the exclusion of elective contributions) does not
apply, and any modification to the definition of Compensation in Section 3.06
does not apply.
(5) DETERMINING CONTRIBUTION RATES. For purposes of this Section
3.04(B), a Participant's contribution rate is the sum of all Employer
contributions (not including Employer contributions to Social Security) and
forfeitures allocated to the Participant's Account for the Plan Year divided
by his Compensation for the entire Plan Year. However, for purposes of
satisfying a Participant's top heavy minimum allocation in Plan Years
beginning after December 31, 1988, the Participant's contribution rate does
not include any elective contributions under a Code -section-401(k)
arrangement nor any Employer matching contributions allocated on the basis of
those elective contributions or on the basis of employee contributions,
except a Nonstandardized Plan may include in the contribution rate any
matching contributions not necessary to satisfy the nondiscrimination
requirements of Code -section-401(k) or of Code -section-401(m).
If the Employee is a Participant in Paired Plans, the Advisory Committee
will consider the Paired Plans as a single Plan to determine a Participant's
contribution rate and so determine whether the Plans satisfy this top heavy
minimum allocation requirement. To determine a Participant's contribution
rate under a Nonstandardized Plan, the Advisory Committee must treat all
qualified top heavy defined contribution plans maintained by the Employer (or
by any related Employers described in Section 1.30) as a single plan.
(6) NO ALLOCATIONS. If, for a Plan Year, there are no allocations of
Employer contributions or forfeitures for any Participant (for purposes of
Section 3.04(B)(1)(b)) or for any Key Employee (for purposes of Section
3.04(B)(2)(b)), the Plan does not require any top heavy minimum allocation
for the Plan Year, unless a top heavy minimum allocation applies because of
the maintenance by the Employer of more than one plan.
(7) ELECTION OF METHOD. The Employer must specify in its Adoption
Agreement the manner in which the Plan will satisfy the top heavy minimum
allocation requirement.
(a) If the Employer elects to make any necessary additional
contribution to this Plan, the Advisory Committee first will allocate
the Employer contributions (and Participant forfeitures, if any) for the
Plan Year in accordance with the provisions of Adoption Agreement
Section 3.04. The Employer then will contribute an additional amount for
the Account of any Participant entitled under this Section 3.04(B) to a
top heavy minimum allocation and whose contribution rate for the Plan
Year, under this Plan and any other plan aggregated under paragraph (5),
is less than the top heavy minimum allocation. The additional amount is
the amount necessary to increase the Participant's contribution rate to
the top heavy minimum allocation. The Advisory Committee will allocate
the additional contribution to the Account of the Participant on whose
behalf the Employer makes the contribution.
(b) If the Employer elects to guarantee the top heavy minimum
allocation under another plan, this Plan does not provide the top heavy
minimum allocation and the Advisory Committee will allocate the annual
Employer contributions (and Participant forfeitures) under the Plan
solely in accordance with the allocation method selected under Adoption
Agreement Section 3.04.
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3.05 FORFEITURE ALLOCATION. The amount of a Participant's Accrued
Benefit forfeited under the Plan is a Participant forfeiture. The Advisory
Committee will allocate Participant forfeitures in the manner specified by
the Employer in its Adoption Agreement. The Advisory Committee will continue
to hold the undistributed, non-vested portion of a terminated Participant's
Accrued Benefit in his Account solely for his benefit until a forfeiture
occurs at the time specified in Section 5.09 or if applicable, until the time
specified in Section 9.14. Except as provided under Section 5.04, a
Participant will not share in the allocation of a forfeiture of any portion
of his Accrued Benefit.
3.06 ACCRUAL OF BENEFIT. The Advisory Committee will determine the
accrual of benefit (Employer contributions and Participant forfeitures) on
the basis of the Plan Year in accordance with the Employer's elections in its
Adoption Agreement.
(A) COMPENSATION TAKEN INTO ACCOUNT. The Employer must specify in its
Adoption Agreement the Compensation the Advisory Committee is to take into
account in allocating an Employer contribution to a Participant's Account for
the Plan Year in which the Employee first becomes a Participant. For all
other Plan Years, the Advisory Committee will take into account only the
Compensation determined for the portion of the Plan Year in which the
Employee actually is a Participant. The Advisory Committee must take into
account the Employee's entire Compensation for the Plan Year to determine
whether the Plan satisfies the top heavy minimum allocation requirement of
Section 3.04(B). The Employer, in an addendum to its Adoption Agreement
numbered 3.06(A), may elect to measure Compensation for the Plan Year for
allocation purposes on the basis of a specified period other than the Plan
Year.
(B) HOURS OF SERVICE REQUIREMENT. Subject to the applicable minimum
allocation requirement of Section 3.04, the Advisory Committee will not
allocate any portion of an Employer contribution for a Plan Year to any
Participant's Account if the Participant does not complete the applicable
minimum Hours of Service requirement specified in the Employer's Adoption
Agreement.
(C) EMPLOYMENT REQUIREMENT. If the Employer's Plan is a Standardized Plan,
a Participant who, during a particular Plan Year, completes the accrual
requirements of Adoption Agreement Section 3.06 will share in the allocation
of Employer contributions for that Plan Year without regard to whether he is
employed by the Employer on the Accounting Date of that Plan Year. If the
Employer's Plan is a Nonstandardized Plan, the Employer must specify in its
Adoption Agreement whether the Participant will accrue a benefit if he is not
employed by the Employer on the Accounting Date of the Plan Year. If the
Employer's Plan is a money purchase plan or a target benefit plan, whether
Nonstandardized or Standardized, the Plan conditions benefit accrual on
employment with the Employer on the last day of the Plan Year for the Plan
Year in which the Employer terminates the Plan.
(D) OTHER REQUIREMENTS. If the Employer's Adoption Agreement includes
options for other requirements affecting the Participant's accrual of
benefits under the Plan, the Advisory Committee will apply this Section 3.06
in accordance with the Employer's Adoption Agreement selections.
(E) SUSPENSION OF ACCRUAL REQUIREMENTS UNDER NONSTANDARDIZED PLAN. If the
Employer's Plan is a Nonstandardized Plan, the Employer may elect in its
Adoption Agreement to suspend the accrual requirements elected under Adoption
Agreement Section 3.06 if, for any Plan Year beginning after December 31,
1989, the Plan fails to satisfy the Participation Test or the Coverage Test.
A Plan satisfies the Participation Test if, on each day of the Plan Year, the
number of Employees who benefit under the Plan is at least equal to the
lesser of 50 or 40% of the total number of Includible Employees as of such
day. A Plan satisfies the Coverage Test if, on the last day of each quarter of
the Plan Year, the number
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of Nonhighly Compensated Employees who benefit under the Plan is at least
equal to 70% of the total number of Includible Nonhighly Compensated
Employees as of such day. "Includible" Employees are all Employees other
than: (1) those Employees excluded from participating in the Plan for the
entire Plan Year by reason of the collective bargaining unit exclusion or the
nonresident alien exclusion under Adoption Agreement Section 1.07 or by
reason of the participation requirements of Sections 2.01 and 2.03; and (2)
any Employee who incurs a Separation from Service during the Plan Year and
fails to complete at least 501 Hours of Service for the Plan Year. A
"Nonhighly Compensated Employee" is an Employee who is not a Highly
Compensated Employee and who is not a family member aggregated with a Highly
Compensated Employee pursuant to Section 1.09 of the Plan.
For purposes of the Participation Test and the Coverage Test, an
Employee is benefiting under the Plan on a particular date if, under Adoption
Agreement Section 3.04, he is entitled to an allocation for the Plan Year.
Under the Participation Test, when determining whether an Employee is
entitled to an allocation under Adoption Agreement Section 3.04, the Advisory
Committee will disregard any allocation required solely by reason of the top
heavy minimum allocation, unless the top heavy minimum allocation is the only
allocation made under the Plan for the Plan Year.
If this Section 3.06(E) applies for a Plan Year, the Advisory Committee
will suspend the accrual requirements for the Includible Employees who are
Participants, beginning first with the Includible Employee(s) employed with
the Employer on the last day of the Plan Year, then the Includible
Employee(s) who have the latest Separation from Service during the Plan Year,
and continuing to suspend in descending order the accrual requirements for
each Includible Employee who incurred an earlier Separation from Service,
from the latest to the earliest Separation from Service date, until the Plan
satisfies both the Participation Test and the Coverage Test for the Plan
Year. If two or more Includible Employees have a Separation from Service on
the same day, the Advisory Committee will suspend the accrual requirements
for all such Includible Employees, irrespective of whether the Plan can
satisfy the Participation Test and the Coverage Test by accruing benefits for
fewer than all such Includible Employees. If the Plan suspends the accrual
requirements for an Includible Employee, that Employee will share in the
allocation of Employer contributions and Participant forfeitures, if any,
without regard to the number of Hours of Service he has earned for the Plan
Year and without regard to whether he is employed by the Employer on the last
day of the Plan Year. If the Employer's Plan includes Employer matching
contributions subject to Code -section-401(m), this suspension of accrual
requirements applies separately to the Code -section-401(m) portion of the
Plan, and the Advisory Committee will treat an Employee as benefiting under
that portion of the Plan if he is an Eligible Employee for purposes of the
Code -section-401(m) nondiscrimination test. The Employer may modify the
operation of this Section 3.06(E) by electing appropriate modifications in
Section 3.06 of its Adoption Agreement.
PART 2. LIMITATIONS ON ALLOCATIONS: SECTIONS 3.07 THROUGH 3.19
[NOTE: Sections 3.07 through 3.10 aply only to Participants in this Plan
who do not participate, and who have never participated, in another qualified
plan or in a welfare benefit fund (as defined in Code Section 419(e))
maintained by the Employer.]
3.07 The amount of Annual Additions which the Advisory Committee may
allocate under this Plan on a Participant's behalf for a Limitation Year may
not exceed the Maximum Permissible Amount. If the amount the Employer
otherwise would contribute to the Participant's Account would cause the
Annual Additions for the Limitation Year to exceed the Maximum Permissible
Amount, the Employer will reduce the amount of its contribution so the Annual
Additions for the Limitation Year will equal the
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Maximum Permissible Amount. If an allocation of Employer contributions,
pursuant to Section 3.04, would result in an Excess Amount (other than an
Excess Amount resulting from the circumstances described in Section 3.10) to
the Participant's Account, the Advisory Committee will reallocate the Excess
Amount to the remaining Participants who are eligible for an allocation of
Employer contributions for the Plan Year in which the Limitation Year ends.
The Advisory Committee will make this reallocation on the basis of the
allocation method under the Plan as if the Participant whose Account otherwise
would receive the Excess Amount is not eligible for an allocation of Employer
contributions.
3.08 Prior to the determination of the Participant's actual Compensation
for a Limitation Year, the Advisory Committee may determine the Maximum
Permissible Amount on the basis of the Participant's estimated annual
Compensation for such Limitation Year. The Advisory Committee must make this
determination on a reasonable and uniform basis for all Participants similarly
situated. The Advisory Committee must reduce any Employer contributions
(including any allocation of forfeitures) based on estimated annual
Compensation by any Excess Amounts carried over from prior years.
3.09 As soon as is administratively feasible after the end of the
Limitation Year, the Advisory Committee will determine the Maximum
Permissible Amount for such Limitation Year on the basis of the Participant's
actual Compensation for such Limitation Year.
3.10 If, pursuant to Section 3.09, or because of the allocation of
forfeitures, there is an Excess Amount with respect to a Participant for a
Limitation Year, the Advisory Committee will dispose of such Excess Amount as
follows:
(a) The Advisory Committee will return any nondeductible voluntary
Employee contributions to the Participant to the extent the return
would reduce the Excess Amount.
(b) If, after the application of paragraph (a), an Excess Amount
still exists, and the Plan covers the Participant at the end of the
Limitation Year, then the Advisory Committee will use the Excess
Amount(s) to reduce future Employer contributions (including any
allocation of forfeitures) under the Plan for the next Limitation
Year and for each succeeding Limitation Year, as is necessary, for
the Participant. If the Employer's Plan is a profit sharing plan,
the Participant may elect to limit his Compensation for allocation
purposes to the extent necessary to reduce his allocation for the
Limitation Year to the Maximum Permissible Amount and eliminate the
Excess Amount.
(c) If, after the application of paragraph (a), an Excess amount
still exists, and the Plan does not cover the Participant at the end
of the Limitation Year, then the Advisory Committee will hold the
Excess Amount unallocated in a suspense account. The Advisory
Committee will apply the suspense account to reduce Employer
Contributions (including allocation of forfeitures) for all remaining
Participants in the next Limitation Year, and in each succeeding
Limitation Year if necessary. Neither the Employer nor any Employee
may contribute to the Plan for any Limitation Year in which the Plan
is unable to allocate fully a suspense account maintained pursuant
to this paragraph (c).
(d) The Advisory Committee will not distribute any Excess Amount(s)
to Participants or to former Participants.
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[NOTE: Sections 3.11 through 3.16 apply only to Participants who, in
addition to this Plan, participate in one or more plans (including Paired
Plans), all of which are qualified Master or Prototype defined contribution
plans or welfare benefit funds (as defined in Code Section 419(e)) maintained
by the Employer during the Limitation Year.]
3.11 The amount of Annual Additions which the Advisory Committee may
allocate under this Plan on a Participant's behalf for a Limitation Year may
not exceed the Maximum Permissible Amount, reduced by the sum of any Annual
Additions allocated to the Participant's Accounts for the same Limitation Year
under this Plan and such other defined contribution plan. If the amount the
Employer otherwise would contribute to the Participant's Account under this
Plan would cause the Annual Additions for the Limitation Year to exceed this
limitation, the Employer will reduce the amount of its contribution so the
Annual Additions under all such plans for the Limitation Year will equal the
Maximum Permissible Amount. If an allocation of Employer contributions,
pursuant to Section 3.04, would result in an Excess Amount (other than an
Excess Amount resulting from the circumstances described in Section 3.10) to
the Participant's Account, the Advisory Committee will reallocate the Excess
Amount to the remaining Participants who are eligible for an allocation of
Employer contributions for the Plan Year in which the Limitation Year ends.
The Advisory Committee will make this reallocation on the basis of the
allocation method under the Plan as if the Participant whose Account
otherwise would receive the Excess Amount is not eligible for an allocation of
Employer contributions.
3.12 Prior to the determination of the Participant's actual Compensation
for the Limitation Year, the Advisory Committee may determine the amounts
referred to in 3.11 above on the basis of the Participant's estimated annual
Compensation for such Limitation Year. The Advisory Committee will make this
determination on a reasonable and uniform basis for all Participants similarly
situated. The Advisory Committee must reduce any Employer contribution
(including allocation of forfeitures) based on estimated annual Compensation
by any Excess Amounts carried over from prior years.
3.13 As soon as is administratively feasible after the end of the
Limitation Year, the Advisory Committee will determine the amounts referred
to in 3.11 on the basis of the Participant's actual Compensation for such
Limitation Year.
3.14 If pursuant to Section 3.13, or because of the allocation of
forfeitures, a Participant's Annual Additions under this Plan and all such
other plan result in an Excess Amount, such Excess Amount will consist of the
Amounts last allocated. The Advisory Committee will determine the Amounts
last allocated by treating the Annual Additions attributable to a welfare
benefit fund as allocated first, irrespective of the actual allocation date
under the welfare benefit fund.
3.15 The Employer must specify in its Adoption Agreement the Excess
Amount attributed to this Plan, if the Advisory Committee allocates an
Excess Amount to a Participant on an allocation date of this Plan which
coincides with an allocation date of another plan.
3.16 The Advisory Committee will dispose of any Excess Amounts
attributed to this Plan as provided in Section 3.10.
[NOTE: Section 3.17 applies only to Paricipants who, in addtion to this
Plan, participate in one or more qualified plans which are qualified defined
contribution plans other than a Master or Prototype plan maintained by the
Employer during the Limitation Year.]
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3.17 SPECIAL ALLOCATION LIMITATION. The amount of Annual Additions
which the Advisory Committee may allocate under this Plan on behalf of any
Participant are limited in accordance with the provisions of Section 3.11
through 3.16, as though the other plan were a Master or Prototype plan,
unless the Employer provides other limitations in an addendum to the Adoption
Agreement, numbered Section 3.17.
3.18 DEFINED BENEFIT PLAN LIMITATION. If the Employer maintains a
defined benefit plan, or has ever maintained a defined benefit plan which the
Employer has terminated, then the sum of the defined benefit plan fraction
and the defined contribution plan fraction for any Participant for any
Limitation Year must not exceed 1.0. The Employer must provide in Adoption
Agreement Section 3.18 the manner in which the Plan will satisfy this
limitation. The Employer also must provide in its Adoption Agreement Section
3.18 the manner in which the Plan will satisfy the top heavy requirements of
Code Section416 after taking into account the existence (or prior
maintenance) of the defined benefit plan.
3.19 DEFINITIONS - ARTICLE III. For purposes of Article III, the
following terms mean:
(a) "Annual Addition" - The sum of the following amounts allocated on
behalf of a Participant for a Limitation Year, of (i) all Employer
contributions; (ii) all forfeitures; and (iii) all Employee
contributions. Except to the extent provided in Treasury regulations,
Annual Additions include excess contributions described in Code
Section401(k), excess aggregate contributions described in Code
Section401(m) and excess deferrals described in Code Section402(g),
irrespective of whether the plan distributes or forfeits such excess
amounts. Annual Additions also include Excess Amounts reapplied to
reduce Employer contributions under Section 3.10. Amounts allocated
after March 31, 1984, to an individual medical account (as defined in
Code Section415(1)(2)) included as part of a defined benefit plan
maintained by the Employer are Annual Additions. Furthermore, Annual
Additions include contributions paid or accrued after December 31, 1985,
for taxable years ending after December 31, 1985, attributable to
post-retirement medical benefits allocated to the separate account of a
key employee (as defined in Code Section419A(d)(3)) under a welfare
benefit fund (as defined in Code Section419(e)) maintained by the
Employer.
(b) "Compensation" - For purposes of applying the limitations of Part
2 of this Article III, "Compensation" means Compensation as defined in
Section 1.12, except Compensation does not include elective
contributions, irrespective of whether the Employer has elected to
include these amounts as Compensation under Section 1.12 of its Adoption
Agreement, and any exclusion selected in Section 1.12 of the Adoption
Agreement (other than the exclusion of elective contributions) does not
apply.
(c) "Employer" - The Employer that adopts this Plan and any related
employers described in Section 1.30. Solely for purposes of applying the
limitations of Part 2 of this Article III, the Advisory Committee will
determine related employers described in Section 1.30 by modifying Code
Sections414(b) and (c) in accordance with Code Section415(h).
(d) "Excess Amount" - The excess of the Participant's Annual Additions
for the Limitation Year over the Maximum Permissable Amount.
(e) "Limitation Year" - The period selected by the Employer under
Adoption Agreement Section 1.17. All qualified plans of the Employer
must use the same Limitation Year. If the Employer amends the Limitation
Year to a different 12 consecutive month period, the new
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Limitation Year must begin on a date within the Limitation Year for
which the Employer makes the amendment, creating a short Limitation Year.
(f) "Master or Prototype Plan" - A plan the form of which is the
subject of a favorable notification letter or a favorable opinion letter
from the Internal Revenue Service.
(g) "Maximum Permissible Amount" - The lesser of (i) $30,000 (or, if
greater, one-fourth of the defined benefit dollar limitation under Code
Section415(b)(1)(A)), or (ii) 25% of the Participant's Compensation for
the Limitation Year. If there is a short Limitation Year because of a
change in Limitation Year, the Advisory Committee will multiply the $30,000
(or adjusted) limitation by the following fraction:
Number of months in the short Limitation Year
-----------------------------------------------
12
(h) "Defined contribution plan" - A retirement plan which provides for
an individual account for each participant and for benefits based solely
on the amount contributed to the participant's account, and any income,
expenses, gains and losses, and any forfeitures of accounts of other
participants which the plan may allocate to such participant's account.
The Advisory Committee must treat all defined contribution plans
(whether or not terminated) maintained by the Employer as a single plan.
Solely for purposes of the limitations of Part 2 of this Article III,
the Advisory Committee will treat employee contributions made to a
defined benefit plan maintained by the Employer as a separate defined
contribution plan. The Advisory Committee also will treat as a defined
contribution plan an individual medical account (as defined in Code
Section415(1)(2)) included as part of a defined benefit plan maintained
by the Employer and, for taxable years ending after December 31, 1985, a
welfare benefit fund under Code Section419(e) maintained by the Employer
to the extent there are post-retirement medical benefits allocated to
the separate account of a key employee (as defined in Code
Section419A(d)(3)).
(i) "Defined benefit plan" - A retirement plan which does not provide
for individual accounts for Employer contributions. The Advisory
Committee must treat all defined benefit plans (whether or not
terminated) maintained by the Employer as a single plan.
[NOTE: The definitions in paragraphs (j), (k) and (l) apply only if the
limitation described in Section 3.18 applies to the Employer's Plan.]
(j) "Defined benefit plan fraction" -
Projected annual benefit of the Participant under the defined benefit plan(s)
-----------------------------------------------------------------------------
The lesser of (i) 125% (subject to the "100% limitation" in paragraph (l))
of the dollar limitation in effect under Code Section 415(b)(1)(A) for
the Limitation Year, or (ii) 140% of the Participant's average
Compensation for his high three (3) consecutive Years
of Service
To determine the denominator of this fraction, the Advisory
Committee will make any adjustment required under Code Section415(b) and
will determine a Year of Service, unless otherwise provided in an
addendum to Adoption Agreement Section 3.18, as a Plan Year in which the
Employee completed at least 1,000 Hours of Service. The "projected
annual benefit" is the annual
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retirement benefit (adjusted to an actuarially equivalent straight life
annuity if the plan expresses such benefit in a form other than a
straight life annuity or qualified joint and survivor annuity) of the
Participant under the terms of the defined benefit plan on the
assumptions he continues employment until his normal retirement age (or
current age, if later) as stated in the defined benefit plan, his
compensation continues at the same rate as in effect in the Limitation
Year under consideration until the date of his normal retirement age and
all other relevant factors used to determine benefits under the defined
benefit plan remain constant as of the current Limitation Year for all
future Limitation Years.
CURRENT ACCRUED BENEFIT. If the Participant accrued benefits in
one or more defined benefit plans maintained by the Employer which were
in existence on May 6, 1986, the dollar limitation used in the
denominator of this fraction will not be less than the Participant's
Current Accrued Benefit. A Participant's Current Accrued Benefit is the
sum of the annual benefits under such defined benefit plans which the
Participant had accrued as of the end of the 1986 Limitation Year (the
last Limitation Year beginning before January 1, 1987), determined
without regard to any change in the terms or conditions of the Plan made
after May 5, 1986, and without regard to any cost of living adjustment
occurring after May 5, 1986. This Current Accrued Benefit rule applies
only if the defined benefit plans individually and in the aggregate
satisfied the requirements of Code Section415 as in effect at the end of
the 1986 Limitation Year.
(k) "Defined contribution plan fraction" -
The sum, as of the close of the Limitation Year, of the Annual Additions
to the Participant's Account under the defined contribution plan(s)
-------------------------------------------------------------------------
The sum of the lesser of the following amounts determined
for the Limitation Year and for each prior Year of Service with the
Employer:(i) 125% (subject to the "100% limitation" in paragraph (l)) of the
dollar limitation in effect under Code Section415(c)(l)(A) for the Limitation
Year (determined without regard to the special dollar limitations for employee
stock ownership plans), or
(ii) 35% of the Participant's Compensation for the Limitation Year
For purposes of determining the defined contribution plan fraction,
the Advisory Committee will not recompute Annual Additions in Limitation
Years beginning prior to January 1, 1987, to treat all Employee
contributions as Annual Additions. If the Plan satisfied Code Section415
for Limitation Years beginning prior to January 1, 1987, the Advisory
Committee will redetermine the defined contribution plan fraction and
the defined benefit plan fraction as of the end of the 1986 Limitation
Year, in accordance with this Section 3.19. If the sum of the
redetermined fractions exceeds 1.0, the Advisory Committee will subtract
permanently from the numerator of the defined contribution plan fraction
an amount equal to the product of (1) the excess of the sum of the
fractions over 1.0, times (2) the denominator of the defined
contribution plan fraction. In making the adjustment, the Advisory
Committee must disregard any accrued benefit under the defined benefit
plan which is in excess of the Current Accrued Benefit. This Plan
continues any transitional rules applicable to the determination of the
defined contribution plan fraction under the Employer's Plan as of the
end of the 1986 Limitation Year.
(l) "100% limitation." If the 100% limitation applies, the Advisory
Committee must determine the denominator of the defined benefit plan
fraction and the denominator of the defined contribution plan fraction
by substituting 100% for 125%. If the Employer's Plan is a
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Standardized Plan, the 100% limitation applies in all Limitation Years,
subject to any override provisions under Section 3.18 of the Employer's
Adoption Agreement. If the Employer overrides the 100% limitation under
a Standardized Plan, the Employer must specify in its Adoption Agreement
the manner in which the Plan satisfies the extra minimum benefit
requirement of Code Section416(h) and the 100% limitation must continue
to apply if the Plan's top heavy ratio exceeds 90%. If the Employer's
Plan is a Nonstandardized Plan, the 100% limitation applies only if: (i)
the Plan's top heavy ratio exceeds 90%; or (ii) the Plan's top heavy
ratio is greater than 60%, and the Employer does not elect in its
Adoption Agreement Section 3.18 to provide extra minimum benefits which
satisfy Code Section416(h)(2).
* * * * * * * * * * * * * * * * * * *
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<PAGE>
ARTICLE IV
PARTICIPANT CONTRIBUTIONS
4.01 PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS. This Plan does not permit
Participant nondeductible contributions unless the Employer maintains its
Plan under a Code Section 401(k) Adoption Agreement. If the Employer does not
maintain its Plan under a Code Section 401(k) Adoption Agreement and, prior
to the adoption of this Prototype Plan, the Plan accepted Participant
nondeductible contributions for a Plan Year beginning after December 31,
1986, those contributions must satisfy the requirements of Code Section
401(m). This Section 4.01 does not prohibit the Plan's acceptance of
Participant nondeductible contributions prior to the first Plan Year
commencing after the Plan Year in which the Employer adopts this Prototype
Plan.
4.02 PARTICIPANT DEDUCTIBLE CONTRIBUTIONS. A qualified Plan may not
accept Participant deductible contributions after April 15, 1987. If the
Employer's Plan includes Participant deductible contributions ("DECs") made
prior to April 16, 1987, the Advisory Committee must maintain a separate
accounting for the Participant's Accrued Benefit attributable to DECs,
including DECs which are a part of a rollover contribution described in
Section 4.03. The Advisory Committee will treat the accumulated DECs as part
of the Participant's Accrued Benefit for all purposes of the Plan, except for
purposes of determining the top heavy ratio under Section 1.33. The Advisory
Committee may not use DECs to purchase life insurance on the Participant's
behalf.
4.03 PARTICIPANT ROLLOVER CONTRIBUTIONS. Any Participant, with the
Employer's written consent and after filing with the Trustee the form
prescribed by the Advisory Committee, may contribute cash or other property
to the Trust other than as a voluntary contribution if the contribution is a
"rollover contribution" which the Code permits an employee to transfer either
directly or indirectly from one qualified plan to another qualified plan.
Before accepting a rollover contribution, the Trustee may require an Employee
to furnish satisfactory evidence that the proposed transfer is in fact a
"rollover contribution" which the Code permits an employee to make to a
qualified plan. A rollover contribution is not an Annual Addition under
Part 2 of Article III.
The Trustee will invest the rollover contribution in a segregated
investment Account for the Participant's sole benefit unless the Trustee (or
the Named Fiduciary, in the case of a nondiscretionary Trustee designation),
in its sole discretion, agrees to invest the rollover contribution as a part
of the Trust Fund. The Trustee will not have any investment responsibility
with respect to a Participant's segregated rollover Account. The Participant,
however, from time to time, may direct the Trustee in writing as to the
investment of his segregated rollover Account in property, or property
interests, of any kind, real, personal or mixed; provided however the
Participant may not direct the Trustee to make loans to his Employer. A
Participant's segregated rollover Account alone will bear any extraordinary
expenses resulting from investments made at the direction of the Participant.
As of the Accounting Date (or other valuation date) for each Plan Year, the
Advisory Committee will allocate and credit the net income (or net loss) from
a Participant's segregated rollover Account and the increase or decrease in
the fair market value of the assets of a segregated rollover Account solely
to that Account. The Trustee is not liable nor responsible for any loss
resulting to any Beneficiary, nor to any Participant, by reason of any sale
or investment made or other action taken pursuant to and in accordance with
the direction of the Participant. In all other respects, the Trustee will
hold, administer and distribute a rollover contribution in the same manner as
any Employer contribution made to the Trust.
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An eligible Employee, prior to satisfying the Plan's eligibility
conditions, may make a rollover contribution to the Trust to the same extent
and in the same manner as a Participant. If an Employee makes a rollover
contribution to the Trust prior to satisfying the Plan's eligibility
conditions, the Advisory Committee and Trustee must treat the Employee as a
Participant for all purposes of the Plan except the Employee is not a
Participant for purposes of sharing in Employer contributions or Participant
forfeitures under the Plan until he actually becomes a Participant in the
Plan. If the Employee has a Separation from Service prior to becoming a
Participant, the Trustee will distribute his rollover contribution Account to
him as if it were an Employer contribution Account.
4.04 PARTICIPANT CONTRIBUTION - FORFEITABILITY. A Participant's Accrued
Benefit is, at all times, 100% Nonforfeitable to the extent the value of his
Accrued Benefit is derived from his Participant contributions described in
this Article IV.
4.05 PARTICIPANT CONTRIBUTION - WITHDRAWAL/DISTRIBUTION. A Participant,
by giving prior written notice to the Trustee, may withdraw all or any part
of the value of his Accrued Benefit derived from his Participant
contributions described in this Article IV. A distribution of Participant
contributions must comply with the joint and survivor requirements described
in Article VI, if those requirements apply to the Participant. A Participant
may not exercise his right to withdraw the value of his Accrued Benefit
derived from his Participant contributions more than once during any Plan
Year. The Trustee, in accordance with the direction of the Advisory
Committee, will distribute a Participant's unwithdrawn Accrued Benefit
attributable to his Participant contributions in accordance with the
provisions of Article VI applicable to the distribution of the Participant's
Nonforfeitable Accrued Benefit.
4.06 PARTICIPANT CONTRIBUTION - ACCRUED BENEFIT. The Advisory Committee
must maintain a separate Account(s) in the name of each Participant to
reflect the Participant's Accrued Benefit under the Plan derived from his
Participant contributions. A Participant's Accrued Benefit derived from his
Participant contributions as of any applicable date is the balance of his
separate participant contribution Account(s).
* * * * * * * * * * * * * * *
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<PAGE>
ARTICLE V
TERMINATION OF SERVICE - PARTICIPANT VESTING
5.01 NORMAL RETIREMENT AGE. The Employer must define Normal Retirement
Age in its Adoption Agreement. A Participant's Accrued Benefit derived from
Employer contributions is 100% Nonforfeitable upon and after his attaining
Normal Retirement Age (if employed by the Employer on or after that date).
5.02 PARTICIPANT DISABILITY OR DEATH. The Employer may elect in its
Adoption Agreement to provide a Participant's Accrued Benefit derived from
Employer contributions will be 100% Nonforfeitable if the Participant's
Separation from Service is a result of his death or his disability.
5.03 VESTING SCHEDULE. Except as provided in Sections 5.01 and 5.02,
for each Year of Service, a Participant's Nonforfeitable percentage of his
Accrued Benefit derived from Employer contributions equals the percentage in
the vesting schedule completed by the Employer in its Adoption Agreement.
(A) ELECTION OF SPECIAL VESTING FORMULA. If the Trustee makes a
distribution (other than a cash-out distribution described in Section 5.04)
to a partially-vested Participant, and the Participant has not incurred a
Forfeiture Break in Service at the relevant time, the Advisory Committee will
establish a separate Account for the Participant's Accrued Benefit. At any
relevant time following the distribution, the Advisory Committee will
determine the Participant's Nonforfeitable Accrued Benefit derived from
Employer contributions in accordance with the following formula:
P(AB + (R x D)) - (R x D).
To apply this formula, "P" is the Participant's current vesting
percentage at the relevant time, "AB is the Participant's Employer-derived
Accrued Benefit at the relevant time, "R" is the ratio of "AB" to the
Participant's Employer-derived Accrued Benefit immediately following the
earlier distribution and "D" is the amount of the earlier distribution. If,
under a restated Plan, the Plan has made distribution to a partially-vested
Participant prior to its restated Effective Date and is unable to apply the
cash-out provisions of Section 5.04 to that prior distribution, this special
vesting formula also applies to that Participant's remaining Account. The
Employer, in an addendum to its Adoption Agreement, numbered Section 5.03,
may elect to modify this formula to read as follows: P(AB + D) - D.
5.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY VESTED PARTICIPANTS/RESTORATION
OF FORFEITED ACCRUED BENEFIT. If, pursuant to Article VI, a partially-vested
Participant receives a cash-out distribution before he incurs a Forfeiture
Break in Service (as defined in Section 5.08), the cash-out distribution will
result in an immediate forfeiture of the nonvested portion of the
Participant's Accrued Benefit derived from Employer contributions. See
Section 5.09. A partially-vested Participant is a Participant whose
Nonforfeitable Percentage determined under Section 5.03 is less than 100%. A
cash-out distribution is a distribution of the entire present value of the
Participant's Nonforfeitable Accrued Benefit.
(A) RESTORATION AND CONDITIONS UPON RESTORATION. A partially-vested
Participant who is re-employed by the Employer after receiving a cash-out
distribution of the Nonforfeitable percentage of his Accrued Benefit may
repay the Trustee the amount of the cash-out distribution attributable to
Employer contributions, unless the Participant no longer has a right to
restoration by reason of the conditions of this Section 5.04(A). If a
partially-vested Participant makes the cash-out distribution repayment, the
Advisory Committee, subject to the conditions of this Section 5.04(A), must
restore his Accrued Benefit
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<PAGE>
attributable to Employer contributions to the same dollar amount as the
dollar amount of his Accrued Benefit on the Accounting Date, or other
valuation date, immediately preceding the date of the cash-out distribution,
unadjusted for any gains or losses occurring subsequent to that Accounting
ate, or other valuation date. Restoration of the Participant's Accrued
Benefit includes restoration of all Code Section 411(d)(6) protected benefits
with respect to that restored Accrued Benefit, in accordance with applicable
Treasury regulations. The Advisory Committee will not restore a re-employed
Participant's Accrued Benefit under this paragraph if:
(1) 5 years have elapsed since the Participant's first re-employment
date with the Employer following the cash-out distribution; or
(2) The Participant incurred a Forfeiture Break in Service (as defined
in Section 5.08). This condition also applies if the Participant makes
repayment within the Plan Year in which he incurs the Forfeiture Break in
Service and that Forfeiture Break in Service would result in a complete
forfeiture of the amount the Advisory Committee otherwise would restore.
(B) TIME AND METHOD OF RESTORATION. If neither of the two conditions
preventing restoration of the Participant's Accrued Benefit applies, the
Advisory Committee will restore the Participant's Accrued Benefit as of the
Plan Year Accounting Date coincident with or immediately following the
repayment. To restore the Participant's Accrued Benefit, the Advisory
Committee, to the extent necessary, will allocate to the Participant's
Account:
(1) First, the amount, if any, of Participant forfeitures the Advisory
Committee would otherwise allocate under Section 3.05;
(2) Second, the amount, if any, of the Trust Fund net income or gain
for the Plan Year; and
(3) Third, the Employer contribution for the Plan Year to the extent
made under a discretionary formula.
In an addendum to its Adoption Agreement numbered 5.04(B), the Employer
may eliminate as a means of restoration any of the amounts described in
clauses (1), (2) and (3) or may change the order of priority of these
amounts. To the extent the amounts described in clauses (1), (2) and (3) are
insufficient to enable the Advisory Committee to make the required
restoration, the Employer must contribute, without regard to any requirement
or condition of Section 3.01, the additional amount necessary to enable the
Advisory Committee to make the required restoration. If, for a particular
Plan Year, the Advisory Committee must restore the Accrued Benefit of more
than one re-employed Participant, then the Advisory Committee will make the
restoration allocations to each such Participant's Account in the same
proportion that a Participant's restored amount for the Plan Year bears to
the restored amount for the Plan Year of all re-employed Participants. The
Advisory Committee will not take into account any allocation under this
Section 5.04 in applying the limitation on allocations under Part 2 of
Article III.
(C) 0% VESTED PARTICIPANT. The Employer must specify in its Adoption
Agreement whether the deemed cash-out rule applies to a 0% vested
Participant. A 0% vested Participant is a Participant whose Accrued Benefit
derived from Employer contributions is entirely forfeitable at the time of
his Separation from Service. If the Participant's Account is not entitled to
an allocation of Employer contributions for the Plan Year in which he has a
Separation from Service, the Advisory Committee will apply the deemed cash-out
29
<PAGE>
rule as if the 0% vested Participant received a cash-out distribution on the
date of the Participant's Separation from Service. If the Participant's
Account is entitled to an allocation of Employer contributions or Participant
forfeitures for the Plan Year in which he has a Separation from Service, the
Advisory Committee will apply the deemed cash-out rule as if the 0% vested
Participant received a cash-out distribution on the first day of the first
Plan Year beginning after his Separation from Service. For purposes of
applying the restoration provisions of this Section 5.04, the Advisory
Committee will treat the 0% vested Participant as repaying his cash-out
"distribution" on the first date of his re-employment with the Employer. If
the deemed cash-out rule does not apply to the Employer's Plan, a 0% vested
Participant will not incur a forfeiture until he incurs a Forfeiture Break in
Service.
5.05 SEGREGATED ACCOUNT FOR REPAID AMOUNT. Until the Advisory Committee
restores the Participant's Accrued Benefit, as described in Section 5.04, the
Trustee will invest the cash-out amount the Participant has repaid in a
segregated Account maintained solely for that Participant. The Trustee must
invest the amount in the Participant's segregated Account in Federally
insured interest bearing savings account(s) or time deposit(s) (or a
combination of both), or in other fixed income investments. Until commingled
with the balance of the Trust Fund on the date the Advisory Committee
restores the Participant's Accrued Benefit, the Participant's segregated
Account remains a part of the Trust, but it alone shares in any income it
earns and it alone bears any expense or loss it incurs. Unless the repayment
qualifies as a rollover contribution, the Advisory Committee will direct the
Trustee to repay to the Participant as soon as is administratively practicable
the full amount of the Participant's segregated Account if the Advisory
Committee determines either of the conditions of Section 5.04(A) prevents
restoration as of the applicable Accounting Date, notwithstanding the
Participant's repayment.
5.06 YEAR OF SERVICE - VESTING. For purposes of vesting under Section
5.03, Year of Service means any 12-consecutive month period designated in the
Employer's Adoption Agreement during which an Employee completes not less
than the number of Hours of Service (not exceeding 1,000) specified in the
Employer's Adoption Agreement. A Year of Service includes any Year of Service
earned prior to the Effective Date of the plan, except as provided in Section
5.08.
5.07 BREAK IN SERVICE - VESTING. For purposes of this Article V, a
Participant incurs a "Break in Service" if during any vesting computation
period he does not complete more than 500 Hours of Service. If, pursuant to
Section 5.06, the Plan does not require more than 500 Hours of Service to
receive credit for a Year of Service, a Participant incurs a Break in Service
in a vesting computation period in which he fails to complete a Year of
Service.
5.08 INCLUDED YEARS OF SERVICE - VESTING. For purposes of determining
"Years of Service" under Section 5.06, the Plan takes in to account all Years
of Service an Employee completes with the Employer except:
(a) For the sole purpose of determining a Participant's Nonforfeitable
percentage of his Accrued Benefit derived from Employer contributions which
accrued for his benefit prior to a Forfeiture Break in Service, the Plan
disregards any Year of Service after the Participant first incurs a
Forfeiture Break in Service. The Participant incurs a Forfeiture Break
in Service when he incurs 5 consecutive Breaks in Service.
(b) The Plan disregards any Year of Service excluded under the
Employer's Adoption Agreement.
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The Plan does not apply the Break in Service rule under Code Sections
411(a)(6)(B). Therefore, an Employee need not complete a Year of Service
after a Break in Service before the Plan takes into account the Employee's
otherwise includible Years of Service under this Article V.
5.09 FORFEITURE OCCURS. A Participant's forfeiture, if any, of his
Accrued Benefit derived from Employer contributions occurs under the Plan on
the earlier of:
(a) The last day of the vesting computation period in which the
Participant first incurs a Forfeiture Break in Service; or
(b) The date the Participant receives a cash-out distribution.
The Advisory Committee determines the percentage of a Participant's
Accrued Benefit forfeiture, if any, under this Section 5.09 solely by
reference to the vesting schedule of Section 5.03. A Participant does not
forfeit any portion of his Accrued Benefit for any other reason or cause
except as expressly provided by this Section 5.09 or as provided under
Section 9.14
* * * * * * * * * * * * * * *
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ARTICLE VI
TIME AND METHOD OF PAYMENT OF BENEFITS
6.01 TIME OF PAYMENT OF ACCRUED BENEFIT. Unless, pursuant to Section
6.03, the Participant or the Beneficiary elects in writing to a different
time or method of payment, the Advisory Committee will direct the Trustee to
commence distribution of a Participant's Nonforfeitable Accrued Benefit in
accordance with this Section 6.01. A Participant must consent, in writing, to
any distribution required under this Section 6.01 if the present value of the
Participant's Nonforfeitable Accrued Benefit, at the time of the distribution
to the Participant, exceeds $3,500 and the Participant has not attained the
later of Normal Retirement Age or age 62. Furthermore, the Participant's
spouse also must consent, in writing, to any distribution, for which Section
6.04 requires the spouse's consent. For all purposes of this Article VI, the
term "annuity starting date" means the first day of the first period for which
the Plan pays an amount as an annuity or in any other form. A distribution
date under this Article VI, unless otherwise specified within the Plan, is
the date or dates the Employer specifies in the Adoption Agreement, or as
soon as administratively practicable following that distribution date. For
purposes of the consent requirements under this Article VI, if the present
value of the Participant's Nonforfeitable Accrued Benefit, at the time of any
distribution, exceeds $3,500, the Advisory Committee must treat that present
value as exceeding $3,500 for purposes of all subsequent Plan distributions
to the Participant.
(A) SEPARATION FROM SERVICE FOR A REASON OTHER THAN DEATH.
(1) PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT NOT EXCEEDING
$3,500. If the Participant's Separation from Service is for any reason other
than death, the Advisory Committee will direct the Trustee to distribute the
Participant's Nonforfeitable Accrued Benefit in a lump sum, on the
distribution date the Employer specifies in the Adoption Agreement, but in no
event later than the 60th day following the close of the Plan Year in which
the Participant attains Normal Retirement Age. If the Participant has
attained Normal Retirement Age at the time of his Separation from Service,
the distribution under this paragraph will occur no later than the 60th day
following the close of the Plan Year in which the Participant's Separation
from Service occurs.
(2) PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT EXCEEDS $3,500. If
the Participant's Separation from Service is for any reason other than death,
the Advisory Committee will direct the Trustee to commence distribution of the
Participant's Nonforfeitable Accrued Benefit in a form and at the time elected
by the Participant, pursuant to Section 6.03. In the absence of an election
by the Participant, the Advisory Committee will direct the Trustee to
distribute the Participant's Nonforfeitable Accrued Benefit in a lump sum
(or, if applicable, the normal annuity form of distribution required under
Section 6.04), on the 60th day following the close of the Plan Year in which
the latest of the following events occurs: (a) the Participant attains Normal
Retirement Age; (b) the Participant attains age 62; or (c) the Participant's
Separation from Service.
(3) DISABILITY. If the Participant's Separation from Service is because
of his disability, the Advisory Committee will direct the Trustee to pay the
Participant's Nonforfeitable Accrued Benefit in lump sum, on the distribution
date the Employer specifies in the Adoption Agreement, subject to the notice
and consent requirement of this Article VI and subject to the applicable
mandatory commencement dates described in Paragraphs (1) and (2).
(4) HARDSHIP. Prior to the time at which the Participant may receive
distribution under Paragraphs (1), (2) or (3), the Participant may request a
distribution form his Nonforfeitable Accrued
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Benefit in an amount necessary to satisfy a hardship, if the Employer elects
in the Adoption Agreement to permit hardship distributions. Unless the
Employer elects otherwise in the Adoption Agreement, a hardship distribution
must be on account of any of the following: (a) medical expenses; (b) the
purchase (excluding mortgage payments) of the Participant's principal
residence; (c) post-secondary education tuition, for the next semester or
quarter, for the Participant or for the Participant's spouse, children or
dependents; (d) to prevent the eviction of the Participant from his
principal residence or the foreclosure on the mortgage of the Participant's
principal residence; (e) funeral expenses of the Participant's family member;
or (f) the Participant's disability. A partially-vested Participant may not
receive a hardship distribution described in this Paragraph (A)(4) prior to
incurring a Forfeiture Break in Service, unless the hardship distribution is
a cash-out distribution (as defined in Article V). The Advisory Committee
will direct the Trustee to make the hardship distribution as soon as
administratively practicable after the Participant makes a valid request for
the hardship distribution.
(B) REQUIRED BEGINNING DATE. If any distribution commencement date described
under Paragraph (A) of this Section 6.01, either by Plan provision or by
Participant election (or nonelection), is later than the Participant's
Required Beginning Date, the Advisory Committee instead must direct the
Trustee to make distribution on the Participant's Required Beginning Date,
subject to the transitional election, if applicable, under Section 6.03(D). A
Participant's Required Beginning Date is the April 1 following the close of
the calendar year in which the Participant attains age 70 1/2. However, if
the Participant, prior to incurring a Separation from Service, attained age
70 1/2 by January 1, 1988, and, for the five Plan Year period ending in the
calendar year in which he attained age 70 1/2 and for all subsequent years,
the Participant was not a more than 5% owner, the Required Beginning Date is
the April 1 following the close of the calendar year in which the Participant
separates from Service or, if earlier, the April 1 following the close of the
calendar year in which the Participant becomes a more than 5% owner.
Furthermore, if a Participant who was not a more than 5% owner attained age
70 1/2 during 1988 and did not incur a Separation from Service prior to
January 1, 1989, his Required Beginning Date is April 1, 1990. A mandatory
distribution at the Participant's Required Beginning Date will be in lump sum
(or, if applicable, the normal annuity form of distribution required under
Section 6.04) unless the Participant, pursuant to the provisions of this
Article VI, makes a valid election to receive an alternative form of payment.
(C) DEATH OF THE PARTICIPANT. The Advisory Committee will direct the Trustee,
in accordance with this Section 6.01(C), to distribute to the Participant's
Beneficiary the Participant's Nonforfeitable Accrued Benefit remaining in the
Trust at the time of the Participant's death. Subject to the requirements of
Section 6.04, the Advisory Committee will determine the death benefit by
reducing the Participant's Nonforfeitable Accrued Benefit by any security
interest the Plan has against that Nonforfeitable Accrued Benefit by reason
of an outstanding Participant loan.
(1) DECEASED PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT DOES NOT
EXCEED $3,500. The Advisory Committee, subject to the requirements of Section
6.04, must direct the Trustee to distribute the deceased Participant's
Nonforfeitable Accrued Benefit in a single sum, as soon as administratively
practicable following the Participant's death or, if later, the date on which
the Advisory Committee receives notification of or otherwise confirms the
Participant's death.
(2) DECEASED PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT EXCEEDS
$3,500. The Advisory Committee will direct the Trustee to distribute the
deceased Participant's Nonforfeitable Accrued Benefit at the time and in the
form elected by the Participant or, if applicable by the Beneficiary, as
permitted under this Article VI. In the absence of an election, subject to
the requirements of Section 6.04, the
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Advisory Committee will direct the Trustee to distribute the Participant's
undistributed Nonforfeitable Accrued Benefit in a lump sum on the first
distribution date following the close of the Plan Year in which the
Participant's death occurs or, if later, the first distribution date
following the date the Advisory Committee receives notification of or
otherwise confirms the Participant's death.
If the death benefit is payable in full to the Participant's surviving
spouse, the surviving spouse, in addition to the distribution options
provided in this Section 6.01(C), may elect distribution at any time or in
any form (other than a joint and survivor annuity) this Article VI would
permit for a Participant.
6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT. Subject to the annuity
distribution requirements, if any, prescribed by Section 6.04, and any
restrictions prescribed by Section 6.03, a Participant or Beneficiary may
elect distribution under one, or any combination, of the following methods:
(a) by payment in a lump sum; or (b) by payment in monthly, quarterly or
annual installments over a fixed reasonable period of time, not exceeding the
life expectancy of the Participant, or the joint life and last survivor
expectancy of the Participant and his Beneficiary. The Employer may elect in
its Adoption Agreement to modify the methods of payment available under this
Section 6.02.
The distribution options permitted under this Section 6.02 are
available only if the present value of the Participant Nonforfeitable Accrued
Benefit, at the time of the distribution to the Participant, exceeds $3,500.
To facilitate installment payments under this Article VI, the Advisory
Committee may direct the Trustee to segregate all or any part of the
Participant's Accrued Benefit in a separate Account. The Trustee will invest
the Participant's segregated Account in Federally insured interest bearing
savings account(s) or time deposit(s) (or a combination of both), or in other
fixed income investments. A segregated Account remains a part of the Trust,
but it alone shares in any income it earns, and it alone bears any expense or
loss it incurs. A Participant or Beneficiary may elect to receive an
installment distribution in the form of a Nontransferable Annuity Contract.
Under an installment distribution, the Participant or Beneficiary, at any
time, may elect to accelerate the payment of all, or any portion, of the
Participant's unpaid Nonforfeitable Accrued Benefit, subject to the
requirements of Section 6.04.
(A) MINIMUM DISTRIBUTION REQUIREMENTS FOR PARTICIPANTS. The Advisory
Committee may not direct the Trustee to distribute the Participant's
Nonforfeitable Accrued Benefit, nor may the Participant elect to have the
Trustee distribute his Nonforfeitable Accrued Benefit, under a method of
payment which, as of the Required Beginning Date, does not satisfy the
minimum distribution requirements under Code Section 401(a)(9) and the
applicable Treasury regulations. The minimum distribution for a calendar year
equals the Participant's Nonforfeitable Accrued Benefit as of the latest
valuation date preceding the beginning of the calendar year divided by the
Participant's life expectancy or, if applicable, the joint and last survivor
expectancy of the Participant and his designated Beneficiary (as determined
under Article VIII, subject to the requirements of the Code Section 401(a)(9)
regulations). The Advisory Committee will increase the Participant's
Nonforfeitable Accrued Benefit, as determined on the relevant valuation date,
for contributions or forfeitures allocated after the valuation date and by
December 31 of the valuation calendar year, and will decrease the valuation
by distributions made after the valuation date and by December 31 of the
valuation calendar year. For purposes of this valuation, the Advisory
Committee will treat any portion of the minimum distribution for the first
distribution calendar year made after the close of that year as a
distribution occurring in that first distribution calendar year. In computing
a minimum distribution, the Advisory Committee must use the unisex life
expectancy multiples under Treas. Reg. Section 1.72-9. The Advisory
Committee, only upon the Participant's written request, will compute the
minimum distribution for a calendar year subsequent to the first calendar
year for which the Plan requires a minimum distribution by the applicable
life expectancy. However, the Advisory
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Committee may not redetermine the joint life and last survivor expectancy of
the Participant and a nonspouse designated Beneficiary in a manner which
takes into account any adjustment to a life expectancy other than the
Participant's life expectancy.
If the Participant's spouse is not his designated Beneficiary, a method
of payment to the Participant (whether by Participant election or by Advisory
Committee direction) may not provide more the incidental benefits to the
Beneficiary. For Plan Years Beginning after December 31, 1988, the Plan must
satisfy the minimum distribution incidental benefit ("MDIB") requirement in
the Treasury regulations issued under Code Section 401(a)(9) for
distributions made on or after the Participant's Required Beginning Date and
before the Participant's death. To satisfy the MDIB requirement, the Advisory
Committee will compute the minimum distribution required by this Section
6.02(A) by substituting the applicable MDIB divisor for the applicable life
expectancy factor, if the MDIB divisor is a lesser number. Following the
Participant's death, the Advisory Committee will compute the minimum
distribution required by this Section 6.02(A) solely on the basis of the
applicable life expectancy factor and will disregard the MDIB factor. For
Plan Years beginning prior to January 1, 1989, the Plan satisfies the
incidental benefits requirement if the distributions to the Participant
satisfied the MDIB requirement or if the present value of the retirement
benefits payable solely to the Participant is greater than 50% of the present
value of the total benefits payable to the Participant and his Beneficiaries.
The Advisory Committee must determine whether benefits to the Beneficiary are
incidental as of the date the Trustee is to commence payment of the
retirement benefits to the Participant, or as of any date the Trustee
redetermines the payment period to the Participant.
The minimum distribution for the first distribution calendar year is
due by the Participant's Required Beginning Date. The minimum distribution
for each subsequent distribution calendar year, including the calendar year
in which the Participant's Required Beginning Date occurs, is due by December
31 of that year. If the Participant's receives distribution in the form of a
Nontransferable Annuity Contract, the distribution satisfies this Section
6.02(A) if the contract complies with the requirements of Code Section
401(a)(9) and the applicable Treasury regulations.
(B) MINIMUM DISTRIBUTION REQUIREMENTS FOR BENEFICIARIES. The method of
distribution to the Participant's Beneficiary must satisfy Code Section
401(a)(9) and the applicable Treasury regulations. If the Participant's death
occurs after his Required Beginning Date or, if earlier, the date the
Participant commences an irrevocable annuity pursuant to Section 6.04, the
method of payment to the Beneficiary must provide for completion of payment
over a period which does not exceed the payment period which had commenced
for the Participant. If the Participant's death occurs prior to his Required
Beginning Date, and the Participant had not commenced an irrevocable annuity
pursuant to Section 6.04, the method of payment to the Beneficiary, subject
to Section 6.04, must provide for completion of payment to the Beneficiary
over a period not exceeding: (i) 5 years after the date of the Participant's
death: or (ii) if the Beneficiary is a designated Beneficiary, the designated
Beneficary's life expectancy. The Advisory Committee may not direct payment
of the Participant's Nonforfeitable Accrued Benefit over a period described
in clause (ii) unless the Trustee will commence payment to the designated
Beneficiary no later than the December 31 following the close of the calendar
year in which the Participant's death occurred or, if later, and the
designated Beneficiary is the Participant's surviving spouse, December 31 of
the calendar year in which the Participant would have attained age 70 1/2. If
the Trustee will make distribution in accordance with clause (ii), the
minimum distribution for a calendar year equals the Participant's
Nonforfeitable Accrued Benefit as of the latest valuation date preceding the
beginning of the calendar year divided by the designated Beneficiary's life
expectancy. The Advisory Committee must use the unisex life expectancy
multiples under Treas. Reg Section 1.72-9 for purposes of applying this
paragraph. The
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Advisory Committee, only upon the written request of the Participant or of
the Participant's surviving spouse, will recalculate the life expectancy of
the Participant's surviving spouse not more frequently than annually, but may
not recalculate the life expectancy of a nonspouse designated Beneficiary
after the Trustee commences payment to the designated Beneficiary. The
Advisory Committee will apply this paragraph by treating any amount paid to
the Participant's child, which becomes payable to the Participant's surviving
spouse upon the child's attaining the age of majority, as paid to the
Participant's surviving spouse. Upon the Beneficiary's written request, the
Advisory Committee must direct the Trustee to accelerate payment of all, or
any portion, of the Participant's unpaid Accrued Benefit, as soon as
administratively practicable following the effective date of that request.
6.03 BENEFIT PAYMENT ELECTIONS. Not earlier than 90 days, but not later than
30 days, before the Participant's annuity starting date, the Advisory
Committee must provide a benefit notice to a Participant who is eligible to
make an election under this Section 6.03. The benefit notice must explain the
optional forms of benefit in the Plan, including the material features and
relative values of those options, and the Participant's right to defer
distribution until he attains the later of Normal Retirement Age or age 62.
If a Participant or Beneficiary makes an election prescribed by this
Section 6.03, the Advisory Committee will direct the Trustee to distribute
the Participant's Nonforfeitable Accrued Benefit in accordance with that
election. Any election under this Section 6.03 is subject to the requirements
of Section 6.02 and of Section 6.04. The Participant or Beneficiary must make
an election under this Section 6.03 by filling his election with the Advisory
Committee at any time before the Trustee otherwise would commence to pay a
Participant's Accrued Benefit in accordance with the requirements of Article
VI.
(A) PARTICIPANT ELECTIONS AFTER SEPARATION FROM SERVICE. If the present value
of a Participant's Nonforfeitable Accrued Benefit exceeds $3,500, he may
elect to have the Trustee commence distribution as of any distribution date
permitted under the Employer's Adoption Agreement Section 6.03. The
Participant may reconsider an election at any time prior to the annuity
starting date and elect to commence distribution as of any other
distribution date permitted under the Employer's Adoption Agreement Section
6.03. If the Participant is partially-vested in his Accrued Benefit, an
election under this Paragraph (A) to distribute prior to the Participant's
incurring a Forfeiture Break in Service (as defined in Section 5.08), must be
in the form of a cash-out distribution (as defined in Article V). A
Participant may not receive a cash-out distribution if, prior to the time the
Trustee actually makes the cash-out distribution, the Participant returns
to employment with the Employer. Following his attainment of Normal Retirement
Age, a Participant who has separated from Service may elect distribution as
of any distribution date, irrespective of the elections under Adoption
Agreement Section 6.03.
(B) PARTICIPANT ELECTIONS PRIOR TO SEPARATION FROM SERVICE. The Employer must
specify in its Adoption Agreement the distribution election rights, if any, a
Participant has prior to his Separation from Service. A Participant must
make an election under this Section 6.03(B) on a form prescribed by the
Advisory Committee at any time during the Plan Year for which his election is
to be effective. In his written election, the Participant must specify the
percentage or dollar amount he wishes the Trustee to distribute to him. The
Participant's election relates solely to the percentage or dollar amount
specified in his election form and his right to elect to receive an amount,
if any, for a particular Plan Year greater than the dollar amount or
percentage specified in his election form terminates on the Accounting Date.
The Trustee must make a distribution to a Participant in accordance with his
election under this Section 6.03(B) within the 90 day period (or as soon as
administratively practicable) after the Participant files his written
election
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with the Trustee. The Trustee will distribute the balance of the
Participant's Accrued Benefit not distributed pursuant to his election(s) in
accordance with the other distribution provisions of this Plan.
(C) DEATH BENEFIT ELECTIONS. If the present value of the deceased
Participant's Nonforfeitable Accrued Benefit exceeds $3,500, the
Participant's Beneficiary may elect to have the Trustee distribute the
Participant's Nonforfeitable Accrued Benefit in a form and within a period
permitted under Section 6.02. The Beneficiary's election is subject to any
restrictions designated in writing by the Participant and not revoked as of
his date of death.
(D) TRANSITIONAL ELECTIONS. Notwithstanding the provisions of Sections 6.01
and 6.02, if the Participant (or Beneficiary) signed a written distribution
designation prior to January 1, 1984, the Advisory Committee must distribute
the Participant's Nonforfeitable Accrued Benefit in accordance with that
designation, subject however, to the survivor requirements, if applicable, of
Sections 6.04, 6.05 and 6.06. This Section 6.03(D) does not apply to a
pre-1984 distribution designation, and the Advisory Committee will not comply
with that designation, if any of the following applies: (1) the method of
distribution would have disqualified the Plan under Code Section 401(a)(9) as
in effect on December 31, 1983; (2) the Participant did not have an Accrued
Benefit as of December 31, 1983; (3) the distribution designation does not
specify the timing and form of the distribution and the death Beneficiaries
(in order of priority); (4) the substitution of a Beneficiary modifies the
payment period of the distribution; or, (5) the Participant (or Beneficiary)
modifies or revokes the distribution destination. In the event of a
revocation, the Plan must distribute, no later than December 31 of the
calendar year following the year of revocation, the amount which the
Participant would have received under Section 6.02(A) if the distribution
designation had not been in effect or, if the Beneficiary revokes the
distribution designation, the amount which the Beneficiary would have
received under Section 6.02(B) if the distribution designation had not been
in effect. The Advisory Committee will apply this Section 6.03(D) to
rollovers and transfers in accordance with Part J of the Code Section
401(a)(9) Treasury regulations.
6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING SPOUSES.
(A) JOINT AND SURVIVOR ANNUITY. The Advisory Committee must direct the
Trustee to distribute a married or unmarried Participant's Nonforfeitable
Accrued Benefit in the form of a qualified joint and survivor annuity, unless
the Participant makes a valid waiver election (described in Section 6.05)
within the 90 day period ending on the annuity starting date. If, as of the
annuity starting date, the Participant is married, a qualified joint and
survivor annuity is an immediate annuity which is purchasable with the
Participant's Nonforfeitable Accrued Benefit and which provides a life
annuity for the Participant and a survivor annuity payable for the remaining
life of the Participant's surviving spouse equal to 50% of the amount of the
annuity payable during the life of the Participant. If, as of the annuity
starting date, the Participant is not married, a qualified joint and survivor
annuity is an immediate life annuity for the Participant which is purchasable
with the Participant's Nonforfeitable Accrued Benefit. On or before the
annuity starting date, the Advisory Committee, without Participant or spousal
consent, must direct the Trustee to pay the Participant's Nonforfeitable
Accrued Benefit in a lump sum, in lieu of a qualified joint and survivor
annuity, in accordance with Section 6.01, if the Participant's Nonforfeitable
Accrued Benefit is not greater than $3,500. This Section 6.04(A) applies only
to a Participant who has completed at least one Hour of Service with the
Employer after August 22, 1984.
(B) PRERETIREMENT SURVIVOR ANNUITY. If a married Participant dies prior to
his annuity starting date, the Advisory Committee will direct the Trustee to
distribute a portion of the Participant's Nonforfeitable Accrued Benefit to
the Participant's surviving spouse in the form of a preretirement survivor
annuity,
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unless the Participant has a valid waiver election (as described in Section
6.06) in effect, or unless the Participant and his spouse were not married
throughout the one year period ending on the date of his death. A
preretirement survivor annuity is an annuity which is purchasable with 50% of
the Participant's Nonforfeitable Accrued Benefit (determined as of the date
of the Participant's death) and which is payable for the life of the
Participant's surviving spouse. The value of the preretirement survivor
annuity is attributable to Employer contributions and to Employee
contributions in the same proportion as the Participant's Nonforfeitable
Accrued Benefit is attributable to those contributions. The portion of the
Participant's Nonforfeitable Accrued Benefit not payable under this paragraph
is payable to the Participant's Beneficiary, in accordance with the other
provisions of this Article VI. If the present value of the preretirement
survivor annuity does not exceed $3,500, the Advisory Committee, on or before
the annuity starting date, must direct the Trustee to make a lump sum
distribution to the Participant's surviving spouse, in lieu of a
preretirement survivor annuity. This Section 6.04(B) applies only to a
Participant who dies after August 22, 1984, and either (i) completes at least
one Hour of Service with the Employer after August 22, 1984 or (ii) separated
from Service with at least 10 Years of Service (as defined in Section 5.06)
and completed at least one Hour of Service with the Employer in a Plan Year
beginning after December 31, 1975.
(C) SURVIVING SPOUSE ELECTIONS. If the present value of the preretirement
survivor annuity exceeds $3,500, the Participant's surviving spouse may elect
to have the Trustee commence payment of the preretirement survivor annuity at
any time following the date of the Participant's death, but not later than
the mandatory distribution periods described in Section 6.02, and may elect
any of the forms of payment described in Section 6.02, in lieu of the
preretirement survivor annuity. In the absence of an election by the
surviving spouse, the Advisory Committee must direct the Trustee to
distribute the preretirement survivors annuity on the first distribution date
following the close of the Plan Year in which the latest of the following
events occurs: (i) the Participant's death; (ii) the date the Advisory
Committee receives notification of or otherwise confirms the Participant's
death; (iii) the date the Participant would have attained Normal Retirement
Age; or (iv) the date the Participant would have attained age 62.
(D) SPECIAL RULES. If the Participant has in effect a valid waiver election
regarding the qualified joint and survivor annuity or the preretirement
survivor annuity, the Advisory Committee must direct the Trustee to
distribute the Participant's Nonforfeitable Accrued Benefit in accordance
with Sections 6.01, 6.02 and 6.03. The Advisory Committee will reduce the
Participant's Nonforfeitable Accrued Benefit by any security interest
(pursuant to any offset rights authorized by Section 10.03[E]) held by the
Plan by reason of a Participant loan to determine the value of the
Participant's Nonforfeitable Accrued Benefit distributable in the form of a
qualified joint and survivor annuity or preretirement survivor annuity,
provided any post-August 18, 1985, loan satisfied the spousal consent
requirement described in Section 10.03[E] of the Plan. For purposes of
applying this Article VI, the Advisory Committee treats a former spouse as
the Participant's spouse or surviving spouse to the extent provided under a
qualified domestic relations order described in Section 6.07. The provisions
of this Section 6.04, and of Sections 6.05 and 6.06, apply separately to the
portion of the Participant's Nonforfeitable Accrued Benefit subject to the
qualified domestic relations order and to the portion of the Participant's
Nonforfeitable Accrued Benefit not subject to that order.
(E) PROFIT SHARING PLAN ELECTION. If this Plan is a profit sharing plan, the
Employer must elect the extent to which the preceding provisions of Section
6.04 apply. If the Employer elects to apply this Section 6.04 only to a
Participant described in this Section 6.04(E), the preceding provisions of
this Section 6.04 apply only to the following participants: (1) a Participant
as respects whom the Plan is a direct or indirect transferee from a plan
subject to the Code Section 417 requirements and the Plan received the
transfer after
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December 31, 1984, unless the transfer is an elective transfer described in
Section 13.06; (2) a Participant who elects a life annuity distribution (if
Section 6.02 or Section 13.02 of the Plan requires the Plan to provide a life
annuity distribution option); and (3) a Participant whose benefits under a
defined benefit plan maintained by the Employer are offset by benefits
provided under this Plan. If the Employer elects to apply this Section 6.04
to all Participants, the preceding provisions of this Section 6.04 apply to
all Participants described in the first two paragraphs of this Section 6.04,
without regard to the limitations of this Section 6.04(E). Sections 6.05 and
6.06 only apply to Participants to whom the preceding provisions of this
Section 6.04 apply.
6.05 WAIVER ELECTION - QUALIFIED JOINT AND SURVIVOR ANNUITY. Not earlier
than 90 days, but not later than 30 days, before the Participant's annuity
starting date, the Advisory Committee must provide the Participant a written
explanation of the terms and conditions of the qualified joint and survivor
annuity, the Participant's right to make, and the effect of, an election to
waive the joint and survivor form of benefit, the rights of the Participant's
spouse regarding the waiver election and the Participant's right to make, and
the effect of, a revocation of a waiver election. The Plan does not limit the
number of times the Participant may revoke a waiver of the qualified joint
and survivor annuity or make a new waiver during the election period.
A married Participant's waiver election is not valid unless (a) the
Participant's spouse (to whom the survivor annuity is payable under the
qualified joint and survivor annuity), after Participant has received the
written explanation described in this Section 6.05, has consented in writing
to the waiver election, the spouse's consent acknowledges the effect of the
election, and a notary public or the Plan Administrator (or his
representative) witnesses the spouse's consent, (b) the spouse consents to
the alternative form of payment designated by the Participant or to any
change in that designated form of payment, and (c) unless the spouse is the
Participant's sole primary Beneficiary, the spouse consent to the
Participant's Beneficiary designation or to any change in the Participant's
Beneficiary designation. The spouse's consent to a waiver of the qualified
joint and survivor annuity is irrevocable, unless the Participant revokes the
waiver election. The spouse may execute a blanket consent to any form of
payment designation or to any Beneficiary designation made by the
Participant, if the spouse acknowledges the right to limit that consent to a
specific designation but, in writing, waives that right. The consent
requirements of this Section 6.05 apply to a former spouse of the
Participant, to the extent required under a qualified domestic relations
order described in Section 6.07.
The Advisory Committee will accept as valid a waiver election which does
not satisfy the spousal consent requirements if the Advisory Committee
establishes the Participant does not have a spouse, the Advisory Committee is
not able to locate the Participant's spouse, the Participant is legally
separated or has been abandoned (within the meaning of State law) and the
Participant has a court order to that effect, or other circumstances exist
under which the Secretary of the Treasury will excuse the consent
requirement. If the Participant's spouse is legally incompetent to give
consent, the spouse's legal guardian (even if the guardian is the
Participant) may give consent.
6.06 WAIVER ELECTION - PRERETIREMENT SURVIVOR ANNUITY. The Advisory
Committee must provide a written explanation of the preretirement survivor
annuity to each married Participant, within the following period which ends
last: (1) the period beginning on the first day of the Plan Year in which the
Participant attains age 32 and ending on the last day of the Plan Year in
which the Participant attains age 34; (2) a reasonable period after an
Employee becomes a Participant; (3) a reasonable period after the joint and
survivor rules become applicable to the Participant; or (4) a reasonable
period after a fully subsidized preretirement survivor annuity no longer
satisfies the
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requirements for a fully subsidized benefit. A reasonable period described in
clauses (2), (3) and (4) is the period beginning one year before and ending
one year after the applicable event. If the Participant separates from
Service before attaining age 35, clauses (1), (2), (3) and (4) do not apply
and the Advisory Committee must provide the written explanation within the
period beginning one year before and ending one year after the Separation
from Service. The written explanation must describe, in a manner consistent
with Treasury regulations, the terms and conditions of the preretirement
survivor annuity comparable to the explanation of the qualified joint and
survivor annuity required under Section 6.05. The Plan does not limit the
number of times the Participant may revoke a waiver of the preretirement
survivor annuity or make a new waiver during the election period.
A Participant's waiver election of the preretirement survivor annuity is
not valid unless (a) the Participant makes the waiver election no earlier
than the first day of the Plan Year in which he attains age 35 and (b) the
Participant's spouse (to whom the preretirement survivor annuity is payable)
satisfies the consent requirements described in Section 6.05, except the
spouse need not consent to the form of benefit payable to the designated
Beneficiary. The spouse's consent to the waiver of the preretirement survivor
annuity is irrevocable, unless the Participant revokes the waiver election.
Irrespective of the time of election requirement described in clause (a), if
the Participant separates from Service prior to the first day of the Plan
Year in which he attains age 35, the Advisory Committee will accept a waiver
election as respects the Participant's Accrued Benefit attributable to his
Service prior to his Separation from Service. Furthermore, if a Participant
who has not separated from Service makes a valid waiver election, except for
the timing requirement of clause(a), the Advisory Committee will accept that
election as valid, but only until the first day of the Plan Year in which the
Participant attains age 35. A waiver election described in this paragraph is
not valid unless made after the Participant has received the written
explanation described in this Section 6.06.
6.07 DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS. Nothing contained in
this Plan prevents the Trustee, in accordance with the direction of the
Advisory Committee, from complying with the provisions of a qualified
domestic relations order (as defined in Code Section 414(p)). This Plan
specifically permits distribution to an alternate payee under a qualified
domestic relations order at any time, irrespective of whether the Participant
has attained his earliest retirement age (as defined under Code Section
414(p)) under the Plan. A distribution to an alternate payee prior to the
Participant's attainment of earliest retirement age is available only if: (1)
the order specifies distribution at that time or permits an agreement between
the Plan and the alternate payee to authorize an earlier distribution; and
(2) if the present value of the alternate payee's benefits under the Plan
exceeds $3,500, and the order requires, the alternate payee consent to any
distribution occurring prior to the Participant's attainment of earliest
retirement age. The Employer, in an addendum to its Adoption Agreement
numbered 6.07, may elect to limit distribution to an alternate payee only
when the Participant has attained his earliest retirement age under the Plan.
Nothing in this Section 6.07 gives a Participant a right to receive
distribution at a time otherwise not permitted under the Plan nor does it
permit the alternate payee to receive a form of payment not otherwise
permitted under the Plan.
The Advisory Committee must establish reasonable procedures to determine
the qualified status of a domestic relations order. Upon receiving a domestic
relations order, the Advisory Committee promptly will notify the Participant
and any alternate payee named in the order, in writing, of the receipt of the
order and the Plan's procedures for determining the qualified status of the
order. Within a reasonable period of time after receiving the domestic
relations order, the Advisory Committee must determine the qualified status
of the order and must notify the Participant and each alternate payee, in
writing, of its determination. The Advisory Committee must provide notice
under this paragraph by
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mailing to the individual's address specified in the domestic relations
order, or in a manner consistent with Department of Labor regulations.
If any portion of the Participant's Nonforfeitable Accrued Benefit is
payable during the period the Advisory Committee is making its determination
of the qualified status of the domestic relations order, the Advisory
committee must make a separate accounting of the amount payable. If the
Advisory Committee determines the order is a qualified domestic relations
order within 18 months of the date amounts first are payable following
receipt of the order, the Advisory Committee will direct the Trustee to
distribute the payable amount in accordance with the order. If the Advisory
Committee does not make its determination of the qualified status of the
order within the 18-month determination period, the Advisory Committee will
direct the Trustee to distribute the payable amounts in the manner the Plan
would distribute if the order did not exist and will apply the order
prospectively if the Advisory Committee later determines the order is a
qualified domestic relations order.
To the extent it is not inconsistent with the provisions of the
qualified domestic relations order, the Advisory Committee may direct the
Trustee to invest any partitioned amount in a segregated subaccount or
separate account and to invest the account in Federally insured,
interest-bearing savings account(s) or time deposit(s) (or a combination of
both), or in other fixed income investments. A segregated subaccount remains
a part of the Trust, but it alone shares in any income it earns, and it alone
bears any expense or loss it incurs. The Trustee will make any payments or
distributions required under this Section 6.07 by separate benefit checks or
other separate distribution to the alternate payee(s).
* * * * * * * * * * * * * * *
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ARTICLE VII
EMPLOYER ADMINISTRATIVE PROVISIONS
7.01 INFORMATION TO COMMITTEE. The Employer must supply current
information to the Advisory Committee as to the name, date of birth, date of
employment, annual compensation, leaves of absence, Years of Service and date
of termination of employment of each Employee who is, or who will be eligible
to become, a Participant under the Plan, together with any other information
which the Advisory Committee considers necessary. The Employer's records as to
the current information the Employer furnishes to the Advisory Committee are
conclusive as to all persons.
7.02 NO LIABILITY. The Employer assumes no obligation or responsibility
to any of its Employees, Participants or Beneficiaries for any act of, or
failure to act, on the part of its Advisory Committee (unless the Employer is
the Advisory Committee), the Trustee, the Custodian, if any, or the Plan
Administrator (unless the Employer is the Plan Administrator).
7.03 INDEMNITY OF CERTAIN FIDUCIARIES. The Employer indemnifies and saves
harmless the Plan Administrator and the members of the Advisory Committee,
and each of them, from and against any and all loss resulting from liability
to which the Plan Administrator and the Advisory Committee, or the members of
the Advisory Committee, may be subjected by reason of any act or conduct
(except willful misconduct or gross negligence) in their official capacities
in the administration of this Trust or Plan or both, including all expenses
reasonably incurred in their defense, in case the Employer fails to provide
such defense. The indemnification provisions of this Section 7.03 do not
relieve the Plan Administrator or any Advisory Committee member from any
liability he may have under ERISA for breach of a fiduciary duty.
Furthermore, the Plan Administrator and the Advisory Committee members and
the Employer may execute a letter agreement further delineating the
indemnification agreement of this Section 7.03, provided the letter agreement
must be consistent with and does not violate ERISA. The indemnification
provisions of this Section 7.03 extend to the Trustee (or to a Custodian, if
any) solely to the extent provided by a letter agreement executed by the
Trustee (or Custodian) and the Employer.
7.04 EMPLOYER DIRECTION OF INVESTMENT. The Employer has the right to
direct the Trustee with respect to the investment and re-investment of assets
comprising the Trust Fund only if the Trustee consents in writing to permit
such direction. If the Trustee consents to Employer direction of investment,
the Trustee and the Employer must execute a letter agreement as a part of
this Plan containing such conditions, limitations and other provisions they
deem appropriate before the Trustee will follow any Employer direction as
respects the investment or re-investment of any part of the Trust Fund.
7.05 AMENDMENT TO VESTING SCHEDULE. Though the Employer reserves the
right to amend the vesting schedule at any time, the Advisory Committee will
not apply the amended vesting schedule to reduce the Nonforfeitable
percentage of any Participant's Accrued Benefit derived from Employer
contributions (determined as of the later of the date the Employer adopts the
amendment, or the date the amendment becomes effective) to a percentage less
than the Nonforfeitable percentage computed under the Plan without regard to
the amendment. An amended vesting schedule will apply to a Participant only
if the Participant receives credit for at least one Hour of Service after the
new schedule becomes effective.
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If the Employer makes a permissible amendment to the vesting schedule,
each Participant having at least 3 Years of Service with the Employer may
elect to have the percentage of his Nonforfeitable Accrued Benefit computed
under the Plan without regard to the amendment. For Plan Years beginning
prior to January 1, 1989, the election described in the preceding sentence
applies only to Participants having at least 5 Years of Service with the
Employer. The Participant must file his election with the Advisory Committee
within 60 days of the latest of (a) the Employer's adoption of the amendment;
(b) the effective date of the amendment; or (c) his receipt of a copy of the
amendment. The Advisory Committee, as soon as practicable, must forward a
true copy of any amendment to the vesting schedule to each affected
Participant, together with an explanation of the effect of the amendment, the
appropriate form upon which the Participant may make an election to remain
under the vesting schedule provided under the Plan prior to the amendment and
notice of the time within which the Participant must make an election to
remain under the prior vesting schedule. The election described in this
Section 7.05 does not apply to a Participant if the amended vesting schedule
provides for vesting at least as rapid at all times as the vesting schedule
in effect prior to the amendment. For purposes of this Section 7.05, an
amendment to the vesting schedule includes any Plan amendment which directly
or indirectly affects the computation of the Nonforfeitable percentage of an
Employee's rights to his Employer derived Accrued Benefit. Furthermore, the
Advisory Committee must treat any shift in the vesting schedule, due to a
change in the Plan's top heavy status, as an amendment to the vesting
schedule for purposes of this Section 7.05.
* * * * * * * * * * * * * * *
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ARTICLE VIII
PARTICIPANT ADMINISTRATIVE PROVISIONS
8.01 BENEFICIARY DESIGNATION. Any Participant may from time to time
designate, in writing, any person or persons, contingently or successively, to
whom the Trustee will pay his Nonforfeitable Accrued Benefit (including any
life insurance proceeds payable to the Participant's Account) in the event of
his death and the Participant may designate the form and method of payment.
The Advisory Committee will prescribe the form for the written designation
of Beneficiary and, upon the Participant's filing the form with the Advisory
Committee, the form effectively revokes all designations filed prior to that
date by the same Participant.
(A) COORDINATION WITH SURVIVOR REQUIREMENTS. If the joint and survivor
requirements of Article VI apply to the Participant, this Section 8.01 does
not impose any special spousal consent requirements on the Participant's
Beneficiary designation. However, in the absence of spousal consent (as
required by Article VI) to the Participant's Beneficiary designation: (1) any
waiver of the joint and survivor annuity or of the preretirement survivor
annuity is not valid; and (2) if the Participant dies prior to his annuity
starting date, the Participant's Beneficiary designation will apply only to the
portion of the death benefit which is not payable as a preretirement survivor
annuity. Regarding clause (2), if the Participant's surviving spouse is a
primary Beneficiary under the Participant's Beneficiary designation, the
Trustee will satisfy the spouse's interest in the Participant's death benefit
first from the portion which is payable as a preretirement survivor annuity.
(B) PROFIT SHARING PLAN EXCEPTION. If the Plan is a profit sharing plan, the
Beneficiary designation of a married Exempt Participant is not valid unless
the Participant's spouse consents (in a manner described in Section 6.05) to
the Beneficiary designation. An "Exempt Participant" is a Participant who is
not subject to the joint and survivor requirements of Article VI. The
spousal consent requirement in this paragraph does not apply if the Exempt
Participant and his spouse are not married throughout the one year period
ending on the date of the Participant's death, or if the Participant's spouse
is the Participant's sole primary Beneficiary.
8.02 NO BENEFICIARY DESIGNATION/DEATH OF BENEFICIARY. If a Participant
fails to name a Beneficiary in accordance with Section 8.01, or if the
Beneficiary named by a Participant predeceases him, then the Trustee will pay
the Participant's Nonforfeitable Accrued Benefit in accordance with Section
6.02 in the following order of priority, unless the Employer specifies a
different order of priority in an addendum to its Adoption Agreement, to:
(a) The Participant's surviving spouse;
(b) The Participant's surviving children, including adopted children, in
equal shares;
(c) The Participant's surviving parents, in equal shares; or
(d) The Participant's estate.
If the Beneficiary does not predecease the Participant, but dies prior to
distribution of the Participant's entire Nonforfeitable Accrued Benefit, the
Trustee will pay the remaining Nonforfeitable Accrued Benefit to the
Beneficiary's estate unless the Participant's Beneficiary designation
provides otherwise or unless the Employer provides otherwise in its Adoption
Agreement. If the Plan is a profit
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<PAGE>
sharing plan, and the Plan includes Exempt Participants, the Employer may not
specify a different order of priority in the Adoption Agreement unless the
Participant's surviving spouse will be first in the different order of
priority. The Advisory Committee will direct the Trustee as to the method and
to whom the Trustee will make payment under this Section 8.02.
8.03 PERSONAL DATA TO COMMITTEE. Each Participant and each Beneficiary of
a deceased Participant must furnish to the Advisory Committee such evidence,
data or information as the Advisory Committee considers necessary or
desirable for the purpose of administering the Plan. The provisions of this
Plan are effective for the benefit of each Participant upon the condition
precedent that each Participant will furnish promptly full, true and complete
evidence, data and information when requested by the Advisory Committee,
provided the Advisory Committee advises each Participant of the effect of his
failure to comply with its request.
8.04 ADDRESS FOR NOTIFICATION. Each Participant and each Beneficiary of a
deceased Participant must file with the Advisory Committee from time to time,
in writing, his post office address and any change of post office address.
Any communication, statement or notice addressed to a Participant, or
Beneficiary, at his last post office address filed with the Advisory
Committee, or as shown on the records of the Employer, binds the Participant,
or Beneficiary, for all purposes of this Plan.
8.05 ASSIGNMENT OR ALIENATION. Subject to Code Section 414(p) relating to
qualified domestic relations orders, neither a Participant nor a Beneficiary
may anticipate, assign or alienate (either at law or in equity) any benefit
provided under the Plan, and the Trustee will not recognize any such
anticipation, assignment or alienation. Furthermore, a benefit under the Plan
is not subject to attachment, garnishment, levy, execution or other legal or
equitable process.
8.06 NOTICE OF CHANGE IN TERMS. The Plan Administrator, within the time
prescribed by ERISA and the applicable regulations, must furnish all
Participants and Beneficiaries a summary description of any material
amendment to the Plan or notice of discontinuance of the Plan and all other
information required by ERISA to be furnished without charge.
8.07 LITIGATION AGAINST THE TRUST. A court of competent jurisdiction may
authorize any appropriate equitable relief to redress violations of ERISA or
to enforce any provisions of ERISA or the terms of the Plan. A fiduciary may
receive reimbursement of expenses properly and actually incurred in the
performance of his duties with the Plan.
8.08 INFORMATION AVAILABLE. Any Participant in the Plan or any
Beneficiary may examine copies of the Plan description, latest annual report,
any bargaining agreement, this Plan and Trust, contract or any other
instrument under which the Plan was established or is operated. The Plan
Administrator will maintain all of the items listed in this Section 8.08 in
his office, or in such other place or places as he may designate from time to
time in order to comply with the regulations issued under ERISA, for
examination during reasonable business hours. Upon the written request of a
Participant or Beneficiary of the Plan Administrator must furnish him with a
copy of any item listed in this Section 8.08. The Plan Administrator may make
a reasonable charge to the requesting person for the copy so furnished.
8.09 APPEAL PROCEDURE FOR DENIAL OF BENEFITS. A Participant or a
Beneficiary ("Claimant") may file with the Advisory Committee a written claim
for benefits, if the Participant or Beneficiary determines the distribution
procedures of the Plan have not provided him his proper Nonforfeitable
Accrued Benefit. The Advisory Committee must render a decision on the claim
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within 60 days of the Claimant's written claim for benefits. The Plan
Administrator must provide adequate notice in writing to the Claimant whose
claim for benefits under the Plan the Advisory Committee has denied. The Plan
Administrator's notice to the Claimant must set forth:
(a) The specific reason for the denial;
(b) Specific references to pertinent Plan provisions on which the
Advisory Committee based its denial;
(c) A description of any additional material and information needed for
the Claimant to perfect his claim and an explanation of why the material or
information is needed; and
(d) That any appeal the Claimant wishes to make of the adverse
determination must be in writing to the Advisory Committee within 75 days
after receipt of the Plan Administrator's notice of denial of benefits. The
Plan Administrator's notice must further advise the Claimant that his
failure to appeal the action to the Advisory Committee in writing within
the 75-day period will render the Advisory Committee's determination final,
binding and conclusive.
If the Claimant should appeal to the Advisory Committee, he, or his duly
authorized representative, may submit, in writing, whatever issues and
comments he, or his duly authorized representative, feels are pertinent. The
Claimant, or his duly authorized representative, may review pertinent Plan
documents. The Advisory Committee will re-examine all facts related to the
appeal and make a final determination as to whether the denial of benefits is
justified under the circumstances. The Advisory Committee must advise the
Claimant of its decision within 60 days of the Claimant's written request for
review, unless special circumstances (such as a hearing) would make the
rendering of a decision within the 60-day limit unfeasible, but in no event
may the Advisory Committee render a decision respecting a denial for a claim
for benefits later than 120 days after its receipt of a request for review.
The Plan Administrator's notice of denial of benefits must identify the
name of each member of the Advisory Committee and the name and address of the
Advisory Committee member to whom the Claimant may forward his appeal.
8.10 PARTICIPANT DIRECTION OF INVESTMENT. A Participant has the right to
direct the Trustee with respect to the investment or re-investment of the
assets comprising the Participant's individual Account only if the Trustee
consents in writing to permit such direction. If the Trustee consents to
Participant direction of investment, the Trustee will accept direction from
each Participant on a written election form (or other written agreement), as a
part of this Plan, containing such conditions, limitations and other
provisions the parties deem appropriate. The Trustee or, with the Trustee's
consent, the Advisory Committee, may establish written procedures,
incorporated specifically as part of this Plan, relating to Participant
direction of investment under this Section 8.10. The Trustee will maintain a
segregated investment Account to the extent a Participant's Account is
subject to Participant self-direction. The Trustee is not liable for any
loss, nor is the Trustee liable for any breach, resulting from a
Participant's direction of the investment of any part of his directed Account.
The Advisory Committee, to the extent provided in a written loan policy
adopted under Section 9.04, will treat a loan made to a Participant as a
Participant direction of investment under this Section 8.10. To the extent of
the loan outstanding at any time, the borrowing Participant's Account alone
shares
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in any interest paid on the loan, and it alone bears any expense or loss it
incurs in connection with the loan. The Trustee may retain any principal or
interest paid on the borrowing Participant's loan in an interest bearing
segregated Account on behalf of the borrowing Participant until the Trustee
(or the Named Fiduciary, in the case of a nondiscretionary Trustee) deems it
appropriate to add the amount paid to the Participant's separate Account
under the Plan.
If the Trustee consents to Participant direction of investment of his
Account, the Plan treats any post-December 31, 1981, investment by a
Participant's directed Account in collectibles (as defined by Code Section
408(m)) as a deemed distribution to the Participant for Federal income tax
purposes.
* * * * * * * * * * * * * * *
47
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ARTICLE IX
ADVISORY COMMITTEE - DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUNTS
9.01 MEMBERS' COMPENSATION, EXPENSES. The Employer must appoint an
Advisory Committee to administer the Plan, the members of which may or may
not be Participants in the Plan, or which may be the Plan Administrator
acting alone. In the absence of an Advisory Committee appointment, the Plan
Administrator assumes the powers, duties and responsibilities of the Advisory
Committee. The members of the Advisory Committee will serve without
compensation for services as such, but the Employer will pay all expenses of
the Advisory Committee, except to the extent the Trust properly pays for such
expenses, pursuant to Article X.
9.02 TERM. Each member of the Advisory Committee serves until the
appointment of his successor.
9.03 POWERS. In case of a vacancy in the membership of the Advisory
Committee, the remaining members of the Advisory Committee may exercise any
and all of the powers, authority, duties and discretion conferred upon the
Advisory Committee pending the filling of the vacancy.
9.04 GENERAL. The Advisory Committee has the following powers and
duties:
(a) To select a Secretary, who need not be a member of the Advisory
Committee;
(b) To determine the rights of eligibility of an Employee to
participate in the Plan, the value of a Participant's Accrued Benefit
and the Nonforfeitable percentage of each Participant's Accrued Benefit;
(c) To adopt rules of procedure and regulations necessary for the
proper and efficient administration of the Plan provided the rules are
not inconsistent with the terms of this Agreement;
(d) To construe and enforce the terms of the Plan and the rules and
regulations it adopts, including interpretation of the Plan documents
and documents related to the Plan's operation;
(e) To direct the Trustee as respects the crediting and distribution
of the Trust;
(f) To review and render decisions respecting a claim for (or denial
of a claim for) a benefit under the Plan;
(g) To furnish the Employer with information which the Employer may
require for tax or other purposes;
(h) To engage the service of agents whom it may deem advisable to
assist it with the performance of its duties;
(i) To engage the services of an Investment Manager or Managers (as
defined in ERISA Section 3(38)), each of whom will have full power and
authority to manage, acquire or dispose (or direct the Trustee with
respect to acquisition or disposition) of any Plan asset under its
control;
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(j) To establish, in its sole discretion, a nondiscriminatory policy
(see Section 9.04(A)) which the Trustee must observe in making loans,
if any, to Participants and Beneficiaries; and
(k) To establish and maintain a funding standard account and to make
credits and charges to the account to the extent required by and in
accordance with the provisions of the Code.
The Advisory Committee must exercise all of its powers, duties and
discretion under the Plan in a uniform and nondiscriminatory manner.
(A) LOAN POLICY. If the Advisory Committee adopts a loan policy, pursuant to
paragraph (j), the loan policy must be a written document and must include:
(1) the identity of the person or positions authorized to administer the
participant loan program; (2) a procedure for applying for the loan; (3) the
criteria for approving or denying a loan; (4) the limitations, if any, on the
types and amounts of loans available; (5) the procedure for determining a
reasonable rate of interest; (6) the types of collateral which may secure the
loan; and (7) the events constituting default and the steps the Plan will
take to preserve plan assets in the event of default. This Section 9.04
specifically incorporates a written loan policy as part of the Employer's
Plan.
9.05 FUNDING POLICY. The Advisory Committee will review, not less
often than annually, all pertinent Employee information and Plan data in
order to establish the funding policy of the Plan and to determine the
appropriate methods of carrying out the Plan's objectives. The Advisory
Committee must communicate periodically, as it deems appropriate, to the
Trustee and to any Plan Investment Manager the Plan's short-term and
long-term financial needs so investment policy can be coordinated with Plan
financial requirements.
9.06 MANNER OF ACTION. The decision of a majority of the members
appointed and qualified controls.
9.07 AUTHORIZED REPRESENTATIVE. The Advisory Committee may authorize
any one of its members, or its Secretary, to sign on its behalf any notices,
directions, applications, certificates, consents, approvals, waivers, letters
or other documents. The Advisory Committee must evidence this authority by an
instrument signed by all members and filed with the Trustee.
9.08 INTERESTED MEMBER. No member of the Advisory Committee may
decide or determine any matter concerning the distribution, nature or method
of settlement of his own benefits under the Plan, except in exercising an
election available to that member in his capacity as a Participant, unless
the Plan Administrator is acting alone in the capacity of the Advisory
Committee.
9.09 INDIVIDUAL ACCOUNTS. The Advisory Committee will maintain, or
direct the Trustee to maintain, a separate Account, or multiple Accounts, in
the name of each Participant to reflect the Participant's Accrued Benefit
under the Plan. If a Participant re-enters the Plan subsequent to his having
a Forfeiture Break in Service, the Advisory Committee, or the Trustee, must
maintain a separate Account for the Participant's pre-Forfeiture Break in
Service Accrued Benefit and a separate Account for his post-Forfeiture Break
in Service Accrued Benefit, unless the Participant's entire Accrued Benefit
under the Plan is 100% Nonforfeitable.
The Advisory Committee will make its allocations, or request the
Trustee to make its allocations, to the Accounts of the Participants in
accordance with the provisions of Section 9.11. The Advisory
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Committee may direct the Trustee to maintain a temporary segregated
investment Account in the name of a Participant to prevent a distortion of
income, gain or loss allocations under Section 9.11. The Advisory Committee
must maintain records of its activities.
9.10 VALUE OF PARTICIPANT'S ACCRUED BENEFIT. The value of each
Participant's Accrued Benefit consists of the portion of the net worth (at
fair market value) of the Employer's Trust Fund which the net credit balance
in his Account (exclusive of the cash value of incidental benefit insurance
contracts) bears to the total net credit balance in the Accounts (exclusive
of the cash value of the incidental benefit insurance contracts) of all
Participants plus the cash surrender value of any incidental benefit
insurance contracts held by the Trustee on the Participant's life.
For the purposes of a distribution under the Plan, the value of a
Participant's Accrued Benefit is its value as of the valuation date
immediately preceding the date of the distribution. Any distribution (other
than a distribution from a segregated Account) made to a Participant (or to
his Beneficiary) more than 90 days after the most recent valuation date may
include interest on the amount of the distribution as an expense of the Trust
Fund. The interest, if any, accrues from such valuation date to the date of
the distribution at the rate established in the Employer's Adoption
Agreement.
9.11 ALLOCATION AND DISTRIBUTION OF NET INCOME GAIN OR LOSS. A
"valuation date" under this Plan is each Accounting Date and each interim
valuation date determined under Section 10.14. As of each valuation date the
Advisory Committee must adjust Accounts to reflect net income, gain or loss
since the last valuation date. The valuation period is the period beginning
the day after the last valuation date and ending on the current valuation
date.
(A) TRUST FUND ACCOUNTS. The allocation provisions of this paragraph apply
to all Participant Accounts other than segregated investment Accounts. The
Advisory Committee first will adjust the Participant Accounts, as those
Accounts stood at the beginning of the current valuation period, by reducing
the Accounts for any forfeitures arising under Section 5.09 or under
Section 9.14, for amounts charged during the valuation period to the Accounts
in accordance with Section 9.13 (relating to distributions) and Section 11.01
(relating to insurance premiums), and for the cash value of incidental
benefit insurance contracts. The Advisory Committee then, subject to the
restoration allocation requirements of Section 5.04 or of Section 9.14, will
allocate the net income, gain or loss pro rata to the adjusted Participant
Accounts. The allocable net income, gain or loss is the net income (or net
loss), including the increase or decrease in the fair market value of assets,
since the last valuation date.
(B) SEGREGATED INVESTMENT ACCOUNTS. A segregated investment Account
receives all income it earns and bears all expense or loss it incurs. The
Advisory Committee will adopt uniform and nondiscriminatory procedures for
determining income or loss of a segregated investment Account in a manner
which reasonably reflects investment directions relating to pooled
investments and investment directions occurring during a valuation period. As
of the valuation date, the Advisory Committee must reduce a segregated
Account for any forfeiture arising under Section 5.09 after the Advisory
Committee has made all other allocations, changes or adjustments to the
Account for the Plan Year.
(C) ADDITIONAL RULES. An Excess Amount or suspense account described in
Part 2 of Article III does not share in the allocation of net income, gain or
loss described in this Section 9.11. If the Employer maintains its Plan under
a Code Section 401(k) Adoption Agreement, the Employer may specify in its
Adoption Agreement alternate valuation provisions authorized by that
Adoption Agreement. This Section 9.11
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applies solely to the allocation of net income, gain or loss of the Trust.
The Advisory Committee will allocate the Employer contributions and
Participant forfeitures, if any, in accordance with Article III.
9.12 INDIVIDUAL STATEMENT. As soon as practicable after the Accounting
Date of each Plan Year, but within the time prescribed by ERISA and the
regulations under ERISA, the Plan Administrator will deliver to each
Participant (and to each Beneficiary) a statement reflecting the condition of
his Accrued Benefit in the Trust as of that date and such other information
ERISA requires be furnished the Participant or Beneficiary. No Participant,
except a member of the Advisory Committee, has the right to inspect the
records reflecting the Account of any other Participant.
9.13 ACCOUNT CHARGED. The Advisory Committee will charge a
Participant's Account for all distributions made from the Account to the
Participant, to his Beneficiary or to an alternate payee. The Advisory
Committee also will charge a Participant's Account for any administrative
expenses incurred by the Plan directly related to that Account.
9.14 UNCLAIMED ACCOUNT PROCEDURE. The Plan does not require either the
Trustee or the Advisory Committee to search for, or to ascertain the
whereabouts of, any Participant or Beneficiary. At the time the Participant's
or Beneficiary's benefit become distributable under Article IV, the Advisory
Committee, by certified or registered mail addressed to his last known
address of record with the Advisory Committee or the Employer, must notify
any Participant, or Beneficiary, that he is entitled to a distribuiton under
this Plan. The notice must quote the provisions of this Section 9.14 and
otherwise must comply with the notice requirements of Article VI. If the
Participant, or Beneficiary, fails to claim his distributive share or make
his whereabouts known in writing to the Advisory Committee within 6 months
from the date of mailing of the notice, the Advisory Committee will treat the
Participant's or Beneficiary's unclaimed payable Accrued Benefit as forfeited
and will reallocate the unclaimed payable Accrued Benefit in accordance with
Section 3.05. A forfeiture under this paragraph will occur at the end of the
notice period or, if later, the earliest date applicable Treasury regulations
would permit the forfeiture. Pending forfeiture, the Advisory Committee,
following the expiration of the notice period, may direct the Trustee to
segregate the Nonforfeitable Accrued Benefit in a segregated Account and to
invest that segregated Account in Federally insured interest bearing savings
accounts or time deposits (or in a combination of both), or in other fixed
income investments.
If a Participant or Beneficiary who has incurred a forfeiture of his
Accrued Benefit under the provisions of the first paragraph of this Section
9.14 makes a claim, at any time, for his forfeited Accrued Benefit, the
Advisory Committee must report the Participant's or Beneficiary's forfeited
Accrued Benefit to the same dollar amount as the dollar amount of the Accrued
Benefit forfeited, unadjusted for any gains or losses occurring subsequent to
the date of the forfeiture. The Advisory Committee will make the restoration
during the Plan Year in which the Participant or Beneficiary makes the claim,
first from the amount, if any, of Participant forfeitures the Advisory
Committee otherwise would allocate for the Plan Year, then from the amount,
if any, of the Trust Fund net income or gain for the Plan Year and then from
the amount, or additional amount, the Employer contributes to enable the
Advisory Committee to make the required restoration. The Advisory Committee
must direct the Trustee to distribute the Participant's or Beneficiary's
restored Accrued Benefit to him not later than 60 days after the close of the
Plan Year in which the Advisory Committee restores the forfeited Accrued
Benefit. The forfeiture provisions of this Section 9.14 apply solely to the
Participant's or to the Beneficiary's Accrued Benefit derived from Employer
contributions.
* * * * * * * * * * * * * * *
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ARTICLE X
TRUSTEE AND CUSTODIAN, POWERS AND DUTIES
10.01 ACCEPTANCE. The Trustee accepts the Trust created under the Plan
and agrees to perform the obligations imposed. The Trustee must provide bond
for the faithful performance of its duties under the Trust to the extent
required by ERISA.
10.02 RECEIPT OF CONTRIBUTIONS. The Trustee is accountable to the
Employer for the funds contributed to it by the Employer, but does not have
any duty to see that the contributions received comply with the provisions of
the Plan. The Trustee is not obliged to collect any contributions from
the Employer, nor is obliged to see that funds deposited with it are deposited
according to the provisions of the Plan.
10.03 INVESTMENT POWERS.
[A] DISCRETIONARY TRUSTEE DESIGNATION. If the Employer, in Adoption
Agreement Section 1.02, designates the Trustee to administer the Trust as a
discretionary Trustee, then the Trustee has full discretion and authority
with regard to the investment of the Trust Fund, except with respect to a
Plan asset under the control or direction of a properly appointed Investment
Manager or with respect to a Plan asset properly subject to Employer,
Participant or Advisory Committee direction of investment. The Trustee must
coordinate its investment policy with Plan financial needs as communicated to
it by the Advisory Committee. The Trustee is authorized and empowered, but
not by way of limitation, with the following powers, rights and duties:
(a) To invest any part or all of the Trust Fund in any common or
preferred stocks, open-end or closed-end mutual funds, put and call
options traded on a national exchange, United States retirement plan
bonds, corporate bonds, debentures, convertible debentures, commercial
paper, U.S. Treasury bills, U.S. Treasury notes and other direct or
indirect obligations of the United States Government or its agencies,
improved or unimproved real estate situated in the United States,
limited partnerships, insurance contracts of any type, mortgages, notes
or other property of any kind, real or personal, to buy or sell options
on common stock on a nationally recognized exchange with or without
holding the underlying common stock, to buy and sell commodities,
commodity options and contracts for the future delivery of commodities,
and to make any other investments the Trustee deems appropriate, as a
prudent man would do under like circumstances with due regard for the
purposes of this Plan. Any investment made or retained by the Trustee in
good faith is proper but must be of a kind constituting a diversification
considered by law suitable for trust investments.
(b) To retain in cash so much of the Trust Fund as it may deem
advisable to satisfy liquidity needs of the Plan and to deposit any cash
held in the Trust Fund in a bank account at reasonable interest.
(c) To invest, if the Trustee is a bank or similar financial
institution supervised by the United States or by a State, in any type of
deposit of the Trustee (or of a bank related to the Trustee within the
meaning of Code Section 414(b)) at a reasonable rate of interest or in a
common trust fund, as described in Code Section 584, or in a collective
investment fund, the provisions of which govern the investment of such
assets and which the Plan incorporates by this reference, which the
Trustee
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(or its affiliate, as defined in Code Section 1504) maintains
exclusively for the collective investment of money contributed by the
bank (or the affiliate) in its capacity as trustee and which conforms to
the rules of the Comptroller of the Currency.
(d) To manage, sell, contract to sell, grant options to purchase,
convey, exchange, transfer, abandon, improve, repair, insure, lease for
any term even though commencing in the future or extending beyond the
term of the Trust, and otherwise deal with all property, real or
personal, in such manner, for such considerations and on such terms and
conditions as the Trustee decides.
(e) To credit and distribute the Trust as directed by the Advisory
Committee. The Trustee is not obliged to inquire as to whether any
payee or distributee is entitled to any payment or whether the
distribution is proper or within the terms of the Plan, or as to the
manner of making any payment or distribution. The Trustee is
accountable only to the Advisory Committee for any payment or
distribution made by it in good faith on the order or direction of the
Advisory Committee.
(f) To borrow money, to assume indebtedness, extend mortgages and
encumber by mortgage or pledge.
(g) To compromise, contest, arbitrate or abandon claims and demands,
in its discretion.
(h) To have with respect to the Trust all of the rights of an
individual owner, including the power to give proxies, to participate in
any voting trusts, mergers, consolidations or liquidations, and to
exercise or sell stock subscriptions or conversion rights.
(i) To lease for oil, gas and other mineral purposes and to create
mineral severances by grant or reservation; to pool or unitize
interests in oil, gas and other minerals; and to enter into operating
agreements and to execute division and transfer orders.
(j) To hold any securities or other property in the name of the
Trustee or its nominee, with depositories or agent depositories or in
another form as it may deem best, with or without disclosing the trust
relationship.
(k) To perform any and all other acts in its judgment necessary or
appropriate for the proper and advantageous management, investment and
distribution of the Trust.
(l) To retain any funds or property subject to any dispute without
liability for the payment of interest, and to decline to make payment or
delivery of the funds or property until final adjudication is made by a
court of competent jurisdiction.
(m) To file all tax returns required of the Trustee.
(n) To furnish to the Employer, the Plan Administrator and the
Advisory Committee an annual statement of account showing the condition
of the Trust Fund and all investments, receipts, disbursements and other
transactions effected by the Trustee during the Plan Year covered by the
statement and also stating the assets of the Trust held at the end of
the Plan Year, which accounts are conclusive on all persons, including
the Employer, the Plan Administrator and the Advisory Committee, except
as to any act or transaction concerning which the Employer, the
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Plan Administrator or the Advisory Committee files with the Trustee
written exceptions or objections within 90 days after the receipt of
the accounts or for which ERISA authorizes a longer period within which
to object.
(o) To begin, maintain or defend any litigation necessary in
connection with the administration of the Plan, except that the Trustee
is not obliged or required to do so unless indemnified to its
satisfaction.
[B] NONDISCRETIONARY TRUSTEE DESIGNATION/APPOINTMENT OF CUSTODIAN. If the
Employer, in its Adoption Agreement Section 1.02, designates the Trustee to
administer the Trust as a nondiscretionary Trustee, then the Trustee will not
have any discretion or authority with regard to the investment of the Trust
Fund, but must act solely as a directed trustee of the funds contributed to
it. A nondiscretionary Trustee, as directed trustee of the funds held by it
under the Employer's Plan, is authorized and empowered, by way of limitation,
with the following powers, rights and duties, each of which the
nondiscretionary Trustee exercises solely as directed trustee in accordance
with the written direction of the Named Fiduciary (except to the extent a
Plan asset is subject to the control and management of a properly appointed
Investment Manager or subject to Advisory Committee or Participant direction
of investment):
(a) To invest any part or all of the Trust Fund in any common or
preferred stocks, open-end or closed-end mutual funds, put and call
options traded on a national exchange, United States retirement plan
bonds, corporate bonds, debentures, convertible debentures, commercial
paper, U.S. Treasury bills, U.S. Treasury notes and other direct or
indirect obligations of the United States Government or its agencies,
improved or unimproved real estate situated in the United States,
limited partnerships, insurance contracts of any type, mortgages, notes
or other property of any kind, real or personal, to buy or sell options
on common stock on a nationally recognized options exchange with or
without holding the underlying common stock, to buy and sell commodities,
commodity options and contracts for the future delivery of commodities,
and to make any other investments the Named Fiduciary deems appropriate.
(b) To retain in cash so much of the Trust Fund as the Named
Fiduciary may direct in writing to satisfy liquidity needs of the Plan
and to deposit any cash held in the Trust Fund in a bank account at
reasonable interest, including, specific authority to invest in any type
of deposit of the Trustee (or of a bank related to the Trustee within
the meaning of Code Section 414(b)) at a reasonable rate of interest.
(c) To sell, contract to sell, grant options to purchase, convey,
exchange, transfer, abandon, improve, repair, insure, lease for any term
even though commencing in the future or extending beyond the term of the
Trust, and otherwise deal with all property, real or personal, in such
manner, for such considerations and on such terms and conditions as the
Named Fiduciary directs in writing.
(d) To credit and distribute the Trust as directed by the Advisory
Committee. The Trustee is not obliged to inquire as to whether any
payee or distributee is entitled to any payment or whether the
distribution is proper or within the terms of the Plan, or as to the
manner of making any payment or distribution. The Trustee is
accountable only to the Advisory Committee for any payment or
distribution made by it in good faith on the order or direction of the
Advisory Committee.
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(e) To borrow money, to assume indebtedness, extend mortgages and
encumber by mortgage or pledge.
(f) To have with respect to the Trust all of the rights of an
individual owner, including the power to give proxies, to participate in
any voting trusts, mergers, consolidations or liquidations, and to
exercise or sell stock subscriptions or conversion rights, provided the
exercise of any such powers is in accordance with and at the written
direction of the Named Fiduciary.
(g) To lease for oil, gas and other mineral purposes and to create
mineral severances by grant or reservation; to pool or unitize interests
in oil, gas and other minerals; and to enter into operating agreements
and to execute division and transfer orders, provided the exercise of
any such powers is in accordance with and at the written direction of
the Named Fiduciary.
(h) To hold any securities or other property in the name of the
nondiscretionary Trustee or its nominee, with depositories or agent
depositories or in another form as the Named Fiduciary may deem best,
with or without disclosing the custodial relationship.
(i) To retain any funds or property subject to any dispute without
liability for the payment of interest, and to decline to make payment or
delivery of the funds or property until a court of competent
jurisdiction makes final adjudication.
(j) To file all tax returns required of the Trustee.
(k) To furnish to the Named Fiduciary, the Employer, the Plan
Administrator and the Advisory Committee an annual statement of account
showing the condition of the Trust Fund and all investments, receipts,
disbursements and other transactions effected by the nondiscretionary
Trustee during the Plan Year covered by the statement and also stating
the assets of the Trust held at the end of the Plan Year, which accounts
are conclusive on all persons, including the Named Fiduciary, the
Employer, the Plan Administrator and the Advisory Committee, except as
to any act or transaction concerning which the Named Fiduciary, the
Employer, the Plan Administrator or the Advisory Committee files with
the nondiscretionary Trustee written exceptions or objections within 90
days after the receipt of the accounts or for which ERISA authorizes a
longer period within which to object.
(l) To begin, maintain or defend any litigation necessary in
connection with the administration of the Plan, except that the Trustee
is not obliged or required to do so unless indemnified to its
satisfaction.
APPOINTMENT OF CUSTODIAN. The Employer may appoint a Custodian under
the Plan, the acceptance by the Custodian indicated on the execution page of
the Employer's Adoption Agreement. If the Employer appoints a Custodian, the
Employer's Plan must have a discretionary Trustee, as described in Section
10.03[A]. A Custodian has the same powers, rights and duties as a
nondiscretionary Trustee, as described in this Section 10.03[B]. The
Custodian accepts the terms of the Plan and Trust by executing the Employer's
Adoption Agreement. Any reference in the Plan to a Trustee also is a
reference to a Custodian where the context of the Plan dictates. A
limitation of the Trustee's liability by Plan provision also acts as a
limitation of the Custodian's liability. Any action taken by the Custodian
at the discretionary Trustee's direction satisfies any provision in the Plan
referring to the Trustee's taking that action.
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MODIFICATION OF POWERS/LIMITED RESPONSIBILITY. The Employer and the
Custodian or nondiscretionary Trustee, by letter agreement, may limit the
powers of the Custodian or nondiscretionary Trustee to any combination of
powers listed within this Section 10.03[B]. If there is a Custodian or a
nondiscretionary Trustee under the Employer's Plan, then the Employer, in
adopting this Plan acknowledges the Custodian or nondiscretionary Trustee has
no discretion with respect to the investment or re-investment of the Trust
Fund and that the Custodian or nondiscretionary Trustee is acting solely as
custodian or as directed trustee with respect to the assets comprising the
Trust Fund.
[C] LIMITATION OF POWERS OF CERTAIN CUSTODIANS. If a Custodian is a bank
which, under its governing state law, does not possess trust powers, then
paragraphs (a), (c), (e), (f), (g) of Section 10.03[B], Section 10.16 and
Article XI do not apply to that bank and that bank only has the power and
authority to exercise the remaining powers, rights and duties under Section
10.03[B].
[D] NAMED FIDUCIARY/LIMITATION OF LIABILITY OF NONDISCRETIONARY TRUSTEE OR
CUSTODIAN. Under a nondiscretionary Trustee designation, the Named Fiduciary
under the Employer's Plan has the sole responsibility for the management and
control of the Employer's Trust Fund, except with respect to a Plan asset
under the control or direction of a properly appointed Investment Manager or
with respect to a Plan asset properly subject to Participant or Advisory
Committee direction of investment. If the Employer appoints a Custodian, the
Named Fiduciary is the discretionary Trustee. Under a nondiscretionary
Trustee designation, unless the Employer designates in writing another person
or persons to serve as Named Fiduciary, the Named Fiduciary under the Plan is
the president of a corporate Employer, the managing partner of a partnership
Employer or the sole proprieter, as appropriate. The Named Fiduciary will
exercise its management and control of the Trust Fund through its written
direction to the nondiscretionary Trustee or to the Custodian, whichever
applies to the Employer's Plan.
The nondiscretionary Trustee or Custodian has no duty to review or to
make recommendations regarding investments made at the written direction of
the Named Fiduciary. The nondiscretionary Trustee or Custodian must retain
any investment obtained at the written direction of the Named Fiduciary until
further directed in writing by the Named Fiduciary to dispose of such
investment. The nondiscretionary Trustee or Custodian is not liable in any
manner or for any reason for making, retaining or disposing of any investment
pursuant to any written direction described in this paragraph. Furthermore,
the Employer agrees to indemnify and to hold the nondiscretionary Trustee or
Custodian harmless from any damages, costs or expenses, including reasonable
counsel fees, which the nondiscretionary Trustee or Custodian may incur as a
result of any claim asserted against the nondiscretionary Trustee, the
Custodian or the Trust arising out of the nondiscretionary Trustee's or
Custodian's compliance with any written direction described in this paragraph.
[E] PARTICIPANT LOANS. This Section 10.03[E] specifically authorizes the
Trustee to make loans on a nondiscriminatory basis to a Participant or to a
Beneficiary in accordance with the loan policy established by the Advisory
Committee, provided: (1) the loan policy satisfies the requirements of
Section 9.04; (2) loans are available to all Participants and Beneficiaries
on a reasonably equivalent basis and are not available in a greater amount
for Highly Compensated Employees than for other Employees; (3) any loan is
adequately secured and bears a reasonable rate of interest; (4) the loan
provides for repayment within a specified time; (5) the default provisions of
the note prohibit offset of the Participant's Nonforfeitable Accrued Benefit
prior to the time the Trustee otherwise would distribute the Participant's
Nonforfeitable accrued Benefit; (6) the amount of the loan does not exceed
(at the time the Plan extends the loan) the present value of the
Participant's Nonforfeitable Accrued Benefit; and (7) the loan otherwise
conforms to the exemption provided by Code Section 4975(d)(1). If the joint
and survivor requirements of Article VI
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apply to the Participant, the Participant may not pledge any portion of his
Accrued Benefit as security for a loan made after August 18, 1985, unless,
within the 90 day period ending on the date the pledge becomes effective, the
Participant's spouse, if any, consents (in a manner described in Section 6.05
other than the requirement relating to the consent of a subsequent spouse) to
the security or, by separate consent, to an increase in the amount of
security. If the Employer is an unincorporated trade or business, a
Participant who is an Owner-Employee may not receive a loan from the Plan,
unless he has obtained a prohibited transaction exemption from the Department
of Labor. If the Employer is an "S Corporation," a Participant who is a
shareholder-employee (an employee or an officer) who, at any time during the
Employer's taxable year, owns more than 5%, either directly or by
attribution under Code section 318(a)(1), of the Employer's outstanding
stock may not receive a loan from the Plan, unless he has obtained a
prohibited transaction exemption from the Department of Labor. If the
Employer is not an unincorporated trade or business nor an "S Corporation,"
this Section 10.03[E] does not impose any restrictions on the class of
Participants eligible for a loan from the Plan.
[F] INVESTMENT IN QUALIFYING EMPLOYER SECURITIES AND QUALIFYING EMPLOYER REAL
PROPERTY. The investment options in this Section 10.03[F] include the ability
to invest in qualifying Employer securities or qualifying Employer real
property, as defined in and as limited by ERISA. If the Employer's Plan is a
Nonstandardized profit sharing plan, it may elect in its Adoption Agreement
to permit the aggregate investments in qualifying Employer securities and in
qualifying Employer real property to exceed 10% of the value of Plan assets.
10.04 RECORDS AND STATEMENTS. The records of the Trustee pertaining to
the Plan must be open to the inspection of the Plan Administrator, the
Advisory Committee and the Employer at all reasonable times and may be
audited from time to time by any person or persons as the Employer, Plan
Administrator or Advisory Committee may specify in writing. The Trustee must
furnish the Plan Administrator or Advisory Committee with whatever information
relating to the Trust Fund the Plan Administrator or Advisory Committee
considers necessary.
10.05 FEES AND EXPENSES FROM FUND. A Trustee or Custodian will receive
reasonable annual compensation as may be agreed upon from time to time
between the Employer and the Trustee or Custodian. No person who is
receiving full pay from the Employer may receive compensation for services as
Trustee or as Custodian. The Trustee will pay from the Trust Fund all fees
and expenses reasonably incurred by the Plan, to the extent such fees and
expenses are for the ordinary and necessary administration and operation of
the Plan, unless the Employer pays such fees and expenses. Any fee or
expense paid, directly or indirectly, by the Employer is not an Employer
contribution to the Plan, provided the fee or expense relates to the ordinary
and necessary administration of the Fund.
10.06 PARTIES TO LITIGATION. Except as otherwise provided by ERISA, no
Participant or Beneficiary is a necessary party or is required to receive
notice of process in any court proceeding involving the Plan, the Trust Fund
or any fiduciary of the Plan. Any final judgment entered in any proceeding
will be conclusive upon the Employer, the Plan Administrator, the Advisory
Committee, the Trustee, Custodian, Participants and Beneficiaries.
10.07 PROFESSIONAL AGENTS. The Trustee may employ and pay from the
Trust Fund reasonable compensation to agents, attorneys, accountants and
other persons to advise the Trustee as in its opinion may be necessary. The
Trustee may delegate to any agent, attorney, accountant or other person
selected by it any non-Trustee power or duty vested in it by the Plan, and
the Trustee
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may act or refrain from acting on the advice or opinion of any agent,
attorney, accountant or other person so selected.
10.08 DISTRIBUTION OF CASH OR PROPERTY. The Trustee may make
distribution under the Plan in cash or property, or partly in each, at its
fair market value as determined by the Trustee. For purposes of a
distribution to a Participant or to a Participant's designated Beneficiary or
surviving spouse, "property" includes a Nontransferable Annuity Contract,
provided the contract satisfies the requirements of this Plan.
10.09 DISTRIBUTION DIRECTIONS. If no one claims a payment or
distribution made from the Trust, the Trustee must promptly notify the
Advisory Committee and then dispose of the payment in accordance with the
subsequent direction of the Advisory Committee.
10.10 THIRD PARTY/MULTIPLE TRUSTEES. No person dealing with the
Trustee is obligated to see to the proper application of any money paid or
property delivered to the Trustee, or to inquire whether the Trustee has
acted pursuant to any of the terms of the Plan. Each person dealing with the
Trustee may act upon any notice, request or representation in writing by the
Trustee, or by the Trustee's duly authorized agent, and is not liable to any
person in so acting. The certificate of the Trustee that it is acting in
accordance with the Plan will be conclusive in favor of any person relying on
the certificate. If more than two persons act as Trustee, a decision of the
majority of such persons controls with respect to any decision regarding the
administration or investment of the Trust Fund or of any portion of the Trust
Fund with respect to which such persons act as Trustee. However, the
signature of only one Trustee is necessary to effect any transaction on
behalf of the Trust.
10.11 RESIGNATION. The Trustee or Custodian may resign its position at
any time by giving 30 days' written notice in advance to the Employer and to the
Advisory Committee. If the Employer fails to appoint a successor Trustee
within 60 days of its receipt of the Trustee's written notice of resignation,
the Trustee will treat the Employer as having appointed itself as Trustee and
as having filed its acceptance of appointment with the former Trustee. The
Employer, in its sole discretion, may replace a Custodian. If the Employer
does not replace a Custodian, the discretionary Trustee will assume possession
of Plan assets held by the former Custodian.
10.12 REMOVAL. The Employer, by giving 30 days' written notice in
advance to the Trustee, may remove any Trustee or Custodian. In the event of
the resignation or removal of a Trustee, the Employer must appoint a
successor Trustee if it intends to continue the Plan. If two or more persons
hold the position of Trustee, in the event of the removal of one such person,
during any period the selection of a replacement is pending, or during any
period such person is unable to serve for any reason, the remaining person or
persons will act as the Trustee.
10.13 INTERIM DUTIES AND SUCCESSOR TRUSTEE. Each successor Trustee
succeeds to the title to the Trust vested in his predecessor by accepting in
writing his appointment as successor Trustee and by filing the acceptance
with the former Trustee and the Advisory Committee without the signing or
filing of any further statement. The resigning or removed Trustee, upon
receipt of acceptance in writing of the Trust by the successor Trustee, must
execute all documents and do all acts necessary to vest the title of record
in any successor Trustee. Each successor Trustee has and enjoys all of the
powers, both discretionary and ministerial, conferred under this Agreement
upon his predecessor. A successor Trustee is not personally liable for any
act or failure to act of any predecessor Trustee, except as required under
ERISA. With the approval of the Employer and the Advisory Committee, a
successor
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Trustee, with respect to the Plan, may accept the account rendered and the
property delivered to it by a predecessor Trustee without incurring any
liability or responsibility for so doing.
10.14 VALUATION OF TRUST. The Trustee must value the Trust Fund as of
each Accounting Date to determine the fair market value of each Participant's
Accrued Benefit in the Trust. The Trustee also must value the Trust Fund on
such other valuation dates as directed in writing by the Advisory Committee
or as required by the Employer's Adoption Agreement.
10.15 LIMITATION ON LIABILITY - IF INVESTMENT MANAGER, ANCILLARY
TRUSTEE OR INDEPENDENT FIDUCIARY APPOINTED. The Trustee is not liable for
the acts or omissions of any Investment Manager the Advisory Committee may
appoint, nor is the Trustee under any obligation to invest or otherwise
manage any asset of the Plan which is subject to the management of a properly
appointed Investment Manager. The Advisory Committee, the Trustee and any
properly appointed Investment Manager may execute a letter agreement as a
part of this Plan delineating the duties, responsibilities and liabilities of
the Investment Manager with respect to any part of the Trust Fund under the
control of the Investment Manager.
The limitation on liability described in this Section 10.15 also applies
to the acts or omissions of any ancillary trustee or independent fiduciary
properly appointed under Section 10.17 of the Plan. However, if a
discretionary Trustee, pursuant to the delegation described in Section 10.17
of the Plan, appoints an ancillary trustee, the discretionary Trustee is
responsible for the periodic review of the ancillary trustee's actions and
must exercise its delegated authority in accordance with the terms of the
Plan and in a manner consistent with ERISA. The Employer, the discretionary
Trustee and an ancillary trustee may execute a letter agreement as a part of
this Plan delineating any indemnification agreement between the parties.
10.16 INVESTMENT IN GROUP TRUST FUND. The Employer, by adopting this
Plan, specifically authorizes the Trustee to invest all or any portion of
the assets comprising the Trust Fund in any group trust fund which at the
time of the investment provides for the pooling of the assets of plans
qualified under Code Section 401(a). This authorization applies solely to a
group trust fund exempt from taxation under Code Section 501(a) and the trust
agreement of which satisfies the requirements of Revenue Ruling 81-100. The
provisions of the group trust fund agreement, as amended from time to time,
are by this reference incorporated within this Plan and Trust. The provisions
of the group trust fund will govern any investment of Plan assets in that
fund. The Employer must specify in an attachment to its adoption agreement
the group trust fund(s) to which this authorization applies. If the Trustee
is acting as a nondiscretionary Trustee, the investment in the group trust
fund is available only in accordance with a proper direction, by the Named
Fiduciary, in accordance with Section 10.03[B]. Pursuant to paragraph (c) of
Section 10.03[A] of the Plan, a Trustee has the authority to invest in
certain common trust funds and collective investment funds without the need
for the authorizing addendum described in this Section 10.16.
Furthermore, at the Employer's direction, the Trustee, for collective
investment purposes, may combine into one trust fund the Trust created under
this Plan with the Trust created under any other qualified retirement plan
the Employer maintains. However, the Trustee must maintain separate records
of account for the assets of each Trust in order to reflect properly each
Participant's Accrued Benefit under the plan(s) in which he is a Participant.
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10.17 APPOINTMENT OF ANCILLARY TRUSTEE OR INDEPENDENT FIDUCIARY. The
Employer, in writing, may appoint any person in any State to act as ancillary
trustee with respect to a designated portion of the Trust Fund. An ancillary
trustee must acknowledge in writing its acceptance of the terms and
conditions of its appointment as ancillary trustee and its fiduciary status
under ERISA. The ancillary trustee has the rights, powers, duties and
discretion as the Employer may delegate, subject to any limitations or
directions specified in the instrument evidencing appointment of the
ancillary trustee and to the terms of the Plan or of ERISA. The investment
powers delegated to the ancillary trustee may include any investment powers
available under Section 10.03 of the Plan including the right to invest any
portion of the assets of the Trust Fund in a common trust fund, as described
in Code Section 584, or in any collective investment fund, the provisions of
which govern the investment of such assets and which the Plan incorporates by
this reference, but only if the ancillary trustee is a bank or similar
financial institution supervised by the United States or by a State and the
ancillary trustee (or its affiliate, as defined in Code Section 1504)
maintains the common trust fund or collective investment fund exclusively for
the collective investment of money contributed by the ancillary trustee (or
its affiliate) in a trustee capacity and which conforms to the rules of the
Comptroller of the Currency. The Employer also may appoint as an ancillary
trustee, the trustee of any group trust fund designated for investment
pursuant to the provisions of Section 10.16 of the Plan.
The ancillary trustee may resign its position at any time by providing
at least 30 days' advance written notice to the Employer, unless the Employer
waives this notice requirement. The Employer, in writing, may remove an
ancillary trustee at any time. In the event of resignation or removal, the
Employer may appoint another ancillary trustee, return the assets to the
control and management of the Trustee or receive such assets in the capacity
of ancillary trustee. The Employer may delegate its responsibilities under
this Section 10.17 to a discretionary Trustee under the Plan, but not to a
nondiscretionary Trustee or to a Custodian, subject to the acceptance by the
discretionary Trustee of that delegation.
If the U.S. Department of Labor ("the Department") requires engagement
of an independent fiduciary to have control or management of all or a portion
of the Trust Fund, the Employer will appoint such independent fiduciary, as
directed by the Department. The independent fiduciary will have the duties,
responsibilities and powers prescribed by the Department and will exercise
those duties, responsibilities and powers in accordance with the terms,
restrictions and conditions established by the Department and, to the extent
not inconsistent with ERISA, the terms of the Plan. The independent fiduciary
must accept its appointment in writing and must acknowledge its status as a
fiduciary of the Plan.
* * * * * * * * * * * * * * *
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ARTICLE XI
PROVISIONS RELATING TO INSURANCE AND INSURANCE COMPANY
11.01 INSURANCE BENEFIT. The Employer may elect to provide incidental
life insurance benefits for insurance Participants who consent to life
insurance benefits by signing the appropriate insurance company application
form. The Trustee will not purchase any incidental life insurance benefit for
any Participant prior to an allocation to the Participant's Account. At an
insured Participant's written direction, the Trustee will use all or any
portion of the Participant's nondeductible voluntary contributions, if any,
to pay insurance premiums covering the Participant's life. This Section 11.01
also authorizes the purchase of life insurance, for the benefit of the
Participant, on the life of a family member of the Participant or on any
person in whom the Participant has an insurable interest. However, if the
policy is on the joint lives of the Participant and another person, the
Trustee may not maintain that policy if that other person predeceases the
Participant.
The Employer will direct the Trustee as to the insurance company and
insurance agent through which the Trustee is to purchase the insurance
contracts, the amount of the coverage and the applicable dividend plan. Each
application for a policy, and the policies themselves, must designate the
Trustee as sole owner, with the right reserved to the Trustee to exercise
any right or option contained in the policies, subject to the terms and
provisions of this Agreement. The Trustee must be the named beneficiary for
the Account of the insured Participant. Proceeds of insurance contracts paid
to the Participant's Account under this Article XI are subject to the
distribution requirements of Article V and Article VI. The Trustee will not
retain any such proceeds for the benefit of the Trust.
The Trustee will charge the premiums on any incidental benefit insurance
contract covering the life of a Participant against the Account of that
Participant. The Trustee will hold all incidental benefit insurance contracts
issued under the Plan as assets of the Trust created under the Plan.
(A) INCIDENTAL INSURANCE BENEFITS. The aggregate of life insurance premiums
paid for the benefit of a Participant, at all times, may not exceed the
following percentages of the aggregate of the Employer's contributions
allocated to any Participant's Account: (i) 49% in the case of the purchase
of ordinary life insurance contracts; or (ii) 25% in the case of the purchase
of term life insurance or universal life insurance contracts. If the Trustee
purchases a combination of ordinary life insurance contract(s) and term life
insurance or universal life insurance contract(s), then the sum of one-half
of the premiums paid for the ordinary life insurance contract(s) and the
premiums paid for the term life insurance or universal life insurance
contract(s) may not exceed 25% of the Employer contributions allocated to any
Participant's Account.
(B) EXCEPTION FOR CERTAIN PROFIT SHARING PLANS. If the Employer's Plan
is a profit sharing plan, the incidental insurance benefits requirement does
not apply to the Plan if the Plan purchases life insurance benefits only from
Employer contributions accumulated in the Participant's Account for at least
two years (measured from the allocation date).
11.02 LIMITATION ON LIFE INSURANCE PROTECTION. The Trustee will not
continue any life insurance protection for any Participant beyond his
annuity starting date (as defined in Article VI). If the Trustee holds any
incidental benefit insurance contract(s) for the benefit of a Participant
when he terminates his employment (other than by reason of death), the Trustee
must proceed as follows:
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(a) If the entire cash value of the contract(s) is vested in the
terminating Participant, or if the contract(s) will have no cash value at the
end of the policy year in which termination of employment occurs, the
Trustee will transfer the contract(s) to the Participant endorsed so as to
vest in the transferee all right, title and interest to the contract(s), free
and clear of the Trust; subject however, to restrictions as to surrender or
payment of benefits as the issuing insurance company may permit and as the
Advisory Committee directs;
(b) If only part of the cash value of the contract()s is vested in the
terminating Participant, the Trustee, to the extent the Participant's
interest in the cash value of the contract(s) is not vested, may adjust the
Participant's interest in the value of his Account attributable to Trust
assets other than incidental benefit insurance contracts and proceed as in
(a), or the Trustee must effect a loan from the issuing insurance company on
the sole security of the contract(s) for an amount equal to the difference
between the cash value of the contract(s) at the end of the policy year in
which termination of employment occurs and the amount of the cash value that
is vested in the terminating Participant, and the Trustee must transfer the
contract(s) endorsed so as to vest in the transferee all right, title and
interest to the contract(s), free and clear of the Trust; subject however, to
the restrictions as to surrender or payment of benefits as the issuing
insurance company may permit and the Advisory Committee directs;
(c) If no part of the cash value of the contract(s) is vested in the
terminating Participant, the Trustee must surrender the contract(s) for cash
proceeds as may be available.
In accordance with the written direction of the Advisory Committee, the
Trustee will make any transfer of contract(s) under this Section 11.02 on the
Participant's annuity starting date (or as soon as administratively
practicable after that date). The Trustee may not transfer any contract under
this Section 11.02 which contains a method of payment not specifically
authorized by Article VI or which fails to comply with the joint and survivor
annuity requirements, if applicable, of Article VI. In this regard, the
Trustee either must convert such a contract to cash and distribute the cash
instead of the contract, or before making the transfer, require the issuing
company to delete the unauthorized method of payment option from the contract.
11.03 DEFINITIONS. For purposes of the Article XI:
(a) "Policy" means an ordinary life insurance contract or a term life
insurance contract issued by an insurer on the life of a Participant.
(b) "Issuing insurance company" is any life insurance company which
has issued a policy upon application by the Trustee under the terms of this
Agreement.
(c) "Contract" or "Contracts" means a policy of insurance. In the
event of any conflict between the provisions of this Plan and the terms
of any contract or policy of insurance issued in accordance with this
Article XI, the provisions of the Plan control.
(d) "Insurable Participant" means a Participant to whom an insurance
company, upon an application being submitted in accordance with the
Plan, will issue insurance coverage, either as a standard risk or as a
risk in an extra mortality classification.
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11.04 DIVIDEND PLAN. The dividend plan is premium reduction unless the
Advisory Committee directs the Trustee to the contrary. The Trustee must use
all dividends for a contract to purchase insurance benefits or additional
insurance benefits for the Participant on whose life the insurance company
has issued the contract. Furthermore, the Trustee must arrange, where
possible, for all policies issued on the lives of Participants under the Plan
to have the same premium due date and all ordinary life insurance contracts
to contain guaranteed cash values with as uniform basic options as are
possible to obtain. The term "dividends" includes policy dividends, refunds
of premiums and other credits.
11.05 INSURANCE COMPANY NOT A PARTY TO AGREEMENT. No insurance
company, solely in its capacity as an issuing insurance company, is a party to
this Agreement nor is the company responsible for its validity.
11.06 INSURANCE COMPANY NOT RESPONSIBLE FOR TRUSTEE'S ACTIONS. No
insurance company, solely in its capacity as an issuing insurance company,
need examine the terms of this Agreement nor is responsible for any action
taken by the Trustee.
11.07 INSURANCE COMPANY RELIANCE ON TRUSTEE'S SIGNATURE. For the
purpose of making application to an insurance company and in the exercise of
any right or option contained in any policy, the insurance company may rely
upon the signature of the Trustee and is saved harmless and completely
discharged in acting at the direction and authorization of the Trustee.
11.08 ACQUITTANCE. An insurance company is discharged from all
liability for any amount paid to the Trustee or paid in accordance with the
direction of the Trustee, and is not obliged to see to the distribution or
further application of any moneys it so pays.
11.09 DUTIES OF INSURANCE COMPANY. Each insurance company must keep
such records, make such identification of contracts, funds and accounts
within funds, and supply such information as may be necessary for the proper
administration of the Plan under which it is carrying insurance benefits.
NOTE: The provisions of the Article XI are not applicable, and the Plan
may not invest in insurance contracts, if a Custodian signatory of the
Adoption Agreement is a bank which has not acquired trust powers from its
governing state banking authority.
* * * * * * * * * * * * * * * *
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ARTICLE XII
MISCELLANEOUS
12.01 EVIDENCE. Anyone required to give evidence under the terms of
the Plan may do so by certificate, affidavit, document or other information
which the person to act in reliance may consider pertinent, reliable and
genuine, and to have been signed, made or presented by the proper party or
parties. The Advisory Committee and the Trustee are fully protected in acting
and relying upon any evidence described under the immediately preceding
sentence.
12.02 NO RESPONSIBILITY FOR EMPLOYER ACTION. Neither the Trustee nor
the Advisory Committee has any obligation or responsibility with respect to
any action required by the Plan to be taken by the Employer, any Participant
or eligible Employee, or for the failure of any of the above persons to act or
make any payment or contribution, or to otherwise provide any benefit
contemplated under this Plan. Furthermore, the Plan does not require the
Trustee or the Advisory Committee to collect any contribution required under
the Plan, or to determine the correctness of the amount of any Employer
contribution. Neither the Trustee nor the Advisory Committee need inquire
into or be responsible for any action or failure to act on the part of the
others, or on the part of any other person who has any responsibility
regarding the management, administration or operation of the Plan, whether by
the express terms of the Plan or by a separate agreement authorized by the
Plan or by the applicable provisions of ERISA. Any action required of a
corporate Employer must be by its Board of Director or its designate.
12.03 FIDUCIARIES NOT INSURERS. The Trustee, the Advisory Committee,
the Plan Administrator and the Employer in no way guarantee the Trust Fund
from loss or depreciation. The Employer does not guarantee the payment of any
money which may be or becomes due to any person from the Trust Fund.
The liability of the Advisory Committee and the Trustee to make any payment
from the Trust Fund at any time and all times is limited to the then
available assets of the Trust.
12.04 WAIVER OF NOTICE. Any person entitled to notice under the Plan
may waive the notice, unless the Code or Treasury regulations prescribe the
notice or ERISA specifically or impliedly prohibits such a waiver.
12.05 SUCCESSORS. The plan is binding upon all persons entitled to
benefits under the Plan, their respective heirs and legal representatives,
upon the Employer, its successors and assigns, and upon the Trustee, the
Advisory Committee, the Plan Administrator and their successors.
12.06 WORD USAGE. Words used in the masculine also apply to the
feminine where applicable, and wherever the context of the Employer's Plan
dictates, the plural includes the singular and the singular includes the
plural.
12.07 STATE LAW. The law of the state of the Employer's principal
place of business (unless otherwise designated in an addendum to the
Employer's Adoption Agreement) will determine all questions arising with
respect to the provisions of Agreement except to the extent superseded by
Federal law.
12.08 EMPLOYER'S RIGHT TO PARTICIPATE. If the Employer's Plan fails to
qualify or to maintain qualification or if the Employer makes any amendment
or modification to a provision of this Plan (other than a proper completion
of an elective provision under the Adoption Agreement or the
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attachment of an addendum authorized by the Plan or by the Adoption
Agreement), the Employer may no longer participate under this Prototype Plan.
Furthermore, if the Employer no longer is a client of the Regional Prototype
Sponsor, pursuant to Section 13.03 of the Plan, will result in the
discontinuance of the Employer's participation in this Prototype Plan unless
it resumes its client relationship with the Regional Prototype Sponsor. If
the Employer is not entitled to participate under this Prototype Plan, the
Employer's Plan is an individually-designed plan and the reliance procedures
specified in the applicable Adoption Agreement no longer will apply.
12.09 EMPLOYMENT NOT GUARANTEED. Nothing contained in this Plan, or
with respect to the establishment of the Trust, or any modification or
amendment to the Plan or Trust, or in the creation of any Account, or the
payment of any benefit, gives any Employee, Employee-Participant or any
Beneficiary any right to continue employment, any legal or equitable right
against the Employer, or Employee of the Employer, or against the Trustee, or
its agents or employees, or against the Plan Administrator, except as
expressly provided by the Plan, the Trust, ERISA or by a separate agreement.
* * * * * * * * * * * * * * * *
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ARTICLE XIII
EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION
13.01 EXCLUSIVE BENEFIT. Except as provided under Article III, the
Employer has no beneficial interest in any asset of the Trust and no part of
any asset in the Trust may ever revert to or be repaid to an Employer, either
directly or indirectly; nor, prior to the satisfaction of all liabilities
with respect to the Participants and their Beneficiaries under the Plan, may
any part of the corpus or income of the Trust Fund, or any asset of the
Trust, be (at any time) used for, or diverted to, purposes other than the
exclusive benefit of the Participants or their Beneficiaries. However, if the
Commissioner of Internal Revenue, upon the Employer's request for initial
approval of this Plan, determines the Trust created under the Plan is not a
qualified trust exempt from Federal income tax, then (and only then) the
Trustee, upon written notice from the Employer, will return the Employer's
contributions (and increment attributable to the contributions) to the
Employer. The Trustee must make the return of the Employer contribution under
this Section 13.01 within one year of a final disposition of the Employer's
request for initial approval of the Plan. The Employer's Plan and Trust will
terminate upon the Trustee's return of the Employer's contributions.
13.02 AMENDMENT BY EMPLOYER. The Employer has the right at any time and
from time to time:
(a) To amend the elective provisions of the Adoption Agreement in any
manner it deems necessary or advisable in order to qualify (or maintain
qualification of) this Plan and the Trust created under it under the
provisions of Code Section 401(a);
(b) To amend the Plan to allow the Plan to operate under a waiver of the
minimum funding requirement; and
(c) To amend this Agreement in any other manner.
No amendment may authorize or permit any of the Trust Fund (other than
the part which is required to pay taxes and administration expenses) to be
used for or diverted to purposes other than for the exclusive benefit of the
Participants or their Beneficiaries or estates. No amendment may cause or
permit any portion of the Trust Fund to revert to or become a property of the
Employer. The Employer also may not make any amendment which affects the
rights, duties or responsibilities of the Trustee, the Plan Administrator or
the Advisory Committee without the written consent of the affected Trustee,
the Plan Administrator or the affected member of the Advisory Committee. The
Employer must make all amendments in writing. Each amendment must state the
date to which it is either retroactively or prospectively effective. See
Section 12.08 for the effect of certain amendments adopted by the Employer.
(A) CODE SECTION 411(d)(6) PROTECTED BENEFITS. An amendment (including the
adoption of this Plan as a restatement of an existing plan) may not decrease
a Participant's Accrued Benefit, except to the extent permitted under Code
Section 412(c)(8), and may not reduce or eliminate Code Section 411(d)(6)
protected benefits determined immediately prior to the adoption date (or, if
later, the effective date) of the amendment. An amendment reduces or
eliminates Code Section 411(d)(6) protected benefits if the amendment has the
effect of either (1) eliminating or reducing an early retirement benefit or a
retirement-type subsidy (as defined in Treasury regulations), or (2) except
as provided by Treasury regulations, eliminating an optional form of benefit.
The Advisory Committee must disregard an amendment to the extent application
of the
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amendment would fail to satisfy this paragraph. If the Advisory Committee
must disregard an amendment because the amendment would violate clause (1) or
clause (2), the Advisory Committee must maintain a schedule of the early
retirement option or other optional forms of benefit the Plan must continue
for the affected Participants.
13.03 AMENDMENT BY REGIONAL PROTOTYPE PLAN SPONSOR. The Regional
Prototype Plan Sponsor, without the Employer's consent, may amend the Plan
and Trust, from time to time, in order to conform the Plan and Trust to any
requirement for qualification of the Plan and Trust under the Internal
Revenue Code. The Regional Prototype Plan Sponsor may not amend the Plan in
any manner which would modify any election made by the Employer under the
Plan without the Employer's written consent. Furthermore, the Regional
Prototype Plan Sponsor may not amend the Plan in any manner which would
violate the proscription of Section 13.02. A Trustee does not have the power
to amend the Plan or Trust.
13.04 DISCONTINUANCE. The Employer has the right, at any time, to
suspend or discontinue its contributions under the Plan, and to terminate, at
any time, this Plan and the Trust created under this Agreement. The Plan will
terminate upon the first to occur of the following:
(a) The date terminated by action of the Employer;
(b) The dissolution or merger of the Employer, unless the successor
makes provision to continue the Plan, in which event the successor
must substitute itself as the Employer under this Plan. Any termination
of the Plan resulting from this paragraph (b) is not effective until
compliance with any applicable notice requirements under ERISA.
13.05 FULL VESTING ON TERMINATION. Upon either full or partial
termination of the Plan, or, if applicable, upon complete discontinuance of
profit sharing plan contributions to the Plan, an affected Participant's
right to his Accrued Benefit is 100% Nonforfeitable, irrespective of the
Nonforfeitable percentage which otherwise would apply under Article V.
13.06 MERGER/DIRECT TRANSFER. The Trustee may not consent to, or be a
party to, any merger or consolidation with another plan, or to a transfer of
assets or liabilities to another plan, unless immediately after the merger,
consolation or transfer, the surviving Plan provides each Participant a
benefit equal to or greater than the benefit each Participant would have
received had the Plan terminated immediately before the merger or
consolidation or transfer. The Trustee possesses the specific authority to
enter into merger agreements or direct transfer of assets agreements with the
trustees of other retirement plans described in Code Section 401(a),
including an elective transfer, and to accept the direct transfer of plan
assets, or to transfer plan assets, as a party to any such agreement.
The Trustee may accept a direct transfer of plan assets on behalf of an
Employee prior to the date the Employee satisfies the Plan's eligibility
conditions. If the Trustee accepts such a direct transfer of plan assets, the
Advisory Committee and Trustee must treat the Employees as a Participant for
all purposes of the Plan except the Employee is not a participant for
purposes of sharing in Employer contributions or Participant forfeitures
under the Plan until he actually becomes a Participant in the Plan.
(A) ELECTIVE TRANSFERS. The Trustee, after August 9, 1988, may not consent
to, or be a party to a merger, consolidation or transfer of assets with a
defined benefit plan, except with respect to an elective transfer, or unless
the transferred benefits are in the form of paid-up individual annuity
contracts
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guaranteeing the payment of the transferred benefits in accordance with the
terms of the transferor plan and in a manner consistent with the Code and
with ERISA. The Trustee will hold, administer and distribute the transferred
assets as a part of the Trust Fund and the Trustee must maintain a separate
Employer contribution Account for the benefit of the Employee on whose behalf
the Trustee accepted the transfer in order to reflect the value of the
transferred assets. Unless a transfer of assets to this Plan is an elective
transfer, the Plan will preserve all Code Section 411(d)(6) protected
benefits with respect to those transferred assets, in the manner described in
Section 13.02. A transfer is an elective transfer if: (1) the transfer
satisfies the first paragraph of this Section 13.06; (2) the transfer is
voluntary, under a fully informed election by the Participant; (3) the
Participant has an alternative that retains his Code Section 411(d)(6)
protected benefits (including an option to leave his benefit in the
transferor plan, if that plan is not terminating); (4) the transfer satisfies
the applicable spousal consent requirements of the Code; (5) the transferor
plan satisfies the joint and survivor notice requirements of the Code, if the
Participant's transferred benefit is subject to those requirements; (6) the
Participant has a right to immediate distribution from the transferor plan,
in lieu of the elective transfer; (7) the transferred benefit is at least the
greater of the single sum distribution provided by the transferor plan for
which the Participant is eligible or the present value of the Participant's
accrued benefit under the transferor plan payable at that plan's normal
retirement age; (8) the Participant has a 100% Nonforfeitable interest in the
transferred benefit; and (9) the transfer otherwise satisfies applicable
Treasury regulations. An elective transfer may occur between qualified plans
of any type. Any direct transfer of assets from a defined benefit plan after
August 9, 1988, which does not satisfy the requirements of this paragraph
will render the Employer's Plan individually-designed. See Section 12.08.
(B) DISTRIBUTION RESTRICTIONS UNDER CODE SECTION 401(k). If the Plan
receives a direct transfer (by merger or otherwise) of elective contributions
(or amounts treated as elective contributions) under a Plan with a Code
Section 401(k) arrangement, the distribution restrictions of Code
Sections 401(k)(2) and (10) continue to apply to those transferred elective
contributions.
13.07 TERMINATION.
(A) PROCEDURE. Upon termination of the Plan, the distribution provisions of
Article VI remain operative, with the following exceptions:
(1) if the present value of the Participant's Nonforfeitable Accrued
Benefit does not exceed $3,500, the Advisory Committee will direct the
Trustee to distribute the Participant's Nonforfeitable Accrued Benefit
to him in lump sum as soon as administratively practicable after the
Plan terminates; and
(2) if the present value of Participant's Nonforfeitable Accrued Benefit
exceeds $3,500, the Participant or the Beneficiary, in addition to the
distribution events permitted under Article VI, may elect to have the
Trustee commence distribution of his Nonforfeitable Accrued Benefit as
soon as administratively practicable after the Plan terminates.
To liquidate the Trust, the Advisory Committee will purchase a deferred
annuity contract for each Participant which protects the Participant's
distribution rights under the Plan, if the Participant's Nonforfeitable
Accrued Benefit exceeds $3,500 and the Participant does not elect an
immediate distribution pursuant to Paragraph (2).
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If the Employer's Plan is a profit sharing plan, in lieu of the
preceding provisions of this Section 13.07 and the distribution provisions of
Article VI, the Advisory Committee will direct the Trustee to distribute each
Participant's Nonforfeitable Accrued Benefit, in lump sum, as soon as
administratively practicable after the termination of the Plan, irrespective
of the present value of the Participant's Nonforfeitable Accrued Benefit and
whether the Participant consents to that distribution. This paragraph does
not apply if: (1) the Plan provides an annuity option; or (2) as of the
period between the Plan termination date and the final distribution of
assets, the Employer maintains any other defined contribution plan (other
than an ESOP). The Employer, in an addendum to its Adoption Agreement
numbered 13.07, may elect not to have this paragraph apply.
The Trust will continue until the Trustee in accordance with the
direction of the Advisory Committee has distributed all of the benefits under
the Plan. On each valuation date, the Advisory Committee will credit any part
of a Participant's Accrued Benefit retained in the Trust with its
proportionate share of the Trust's income, expenses, gains and losses, both
realized and unrealized. Upon termination of the Plan, the amount, if any, in
a suspense account under Article III will revert to the Employer, subject to
the conditions of the Treasury regulations permitting such a reversion. A
resolution or amendment to freeze all future benefit accrual but otherwise to
continue maintenance of this Plan, is not a termination for purposes of this
Section 13.07.
(B) DISTRIBUTION RESTRICTIONS UNDER CODE SECTION 401(k). If the Employer's
Plan includes a Code Section 401(k) arrangement or if transferred assets
described in Section 13.06 are subject to the distribution restrictions of
Code Sections 401(k)(2) and (10), the special distribution provisions of
this Section 13.07 are subject to the restrictions of this paragraph. The
portion of the Participant's Nonforfeitable Accrued Benefit attributable to
elective contributions (or to amounts treated under the Code Section 401(k)
arrangement as elective contributions) is not distributable on account of
Plan termination, as described in this Section 13.07, unless: (a) the
Participant otherwise is entitled under the Plan to a distribution of that
portion of his Nonforfeitable Accrued Benefit; or (b) the Plan termination
occurs without the establishment of a successor plan. A successor plan under
clause (b) is a defined contribution plan (other than an ESOP) maintained by
the Employer (or by a related employer) at the time of the termination of the
Plan or within the period ending twelve months after the final distribution
of assets. A distribution made after March 31, 1988, pursuant to clause (b),
must be part of a lump sum distribution to the Participant of his
Nonforfeitable Accrued Benefit.
* * * * * * * * * * * * * * * * *
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ARTICLE XIV
CODE SECTION 401(k) AND CODE SECTION 401(m) ARRANGEMENTS
14.01 APPLICATION. This Article XIV applies to an Employer's Plan only
if the Employer is maintaining its Plan under a Code Section 401(k) Adoption
Agreement.
14.02 CODE SECTION 401(k) ARRANGEMENT. The Employer will elect in
Section 3.01 of its Adoption Agreement the terms of the Code Section 401(k)
arrangement, if any, under the Plan. If the Employer's Plan is a Standardized
Plan, the Code Section 401(k) arrangement must be a salary reduction
arrangement. If the Employer's Plan is a Nonstandardized Plan, the Code
Section 401(k) arrangement may be a salary reduction arrangement or a cash or
deferred arrangement.
(A) SALARY REDUCTION ARRANGEMENT. If the Employer elects a salary reduction
arrangement, any Employee eligible to participate in the Plan may file a
salary reduction agreement with the Advisory Committee. The salary reduction
agreement may not be effective earlier than the following date which occurs
last: (i) the Employee's Plan Entry Date (or, in the case of a reemployed
Employee, his reparticipation date under Article II); (ii) the execution date
of the Employee's salary reduction agreement; (iii) the date the Employer
adopts the Code Section 401(k) arrangement by executing the Adoption
Agreement; or (iv) the effective date of the Code Section 401(k) arrangement,
as specified in the Employer's Adoption Agreement. Regarding clause (i), an
Employee subject to the Break in Service rule of Section 2.03(B) of the Plan
may not enter into a salary reduction agreement until the Employee has
completed a sufficient number of Hours of Service to receive credit for a
Year of Service (as defined in Section 2.02) following his reemployment
commencement date. A salary reduction agreement must specify the amount of
Compensation (as defined in Section 1.2) or percentage of Compensation the
Employee wishes to defer. The salary reduction agreement will apply only to
Compensation which becomes currently available to the Employee after the
effective date of the salary reduction agreement. The Employer will apply a
reduction election to all Compensation (and to increases in such
Compensation) unless the Employee specifies in his salary reduction agreement
to limit the election to certain Compensation. The Employer will specify in
Adoption Agreement Section 3.01 the rules and restrictions applicable to the
Employees salary reduction agreements.
(B) CASH OR DEFERRED ARRANGEMENT. If the Employer elects a cash or deferred
arrangement, a Participant may elect to make a cash election against his
proportionate share of the Employer's Cash or Deferred Contribution, in
accordance with the Employer's elections in Adoption Agreement Section 3.01.
A Participant's proportionate share of the Employer's Cash or Deferred
Contribution is the percentage of the total Cash or Deferred Contribution
which bears the same ratio that the Participant's Compensation for the Plan
Year bears to the total Compensation of all Participants for the Plan Year.
For purposes of determining each Participant's proportionate share of the
Cash or Deferred Contribution, a Participant's Compensation is his
Compensation as determined under Section 1.12 of the Plan (as modified by
Section 3.06 for allocation purposes), excluding any effect the proportionate
share may have on the Participant's Compensation for the Plan Year. The
Advisory Committee will determine the proportionate share prior to the
Employer's actual contribution to the Trust, to provide the Participants the
opportunity to file cash elections. The Employer will pay directly to the
Participant the portion of his proportionate share the Participant has
elected to receive in cash.
(C) ELECTION NOT TO PARTICIPATE. A Participant's or Employee's election not
to participate, pursuant to Section 2.06, includes his right to enter into a
salary reduction agreement or to share in the allocation
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of a Cash or Deferred Contribution, unless the Participant or Employee limits
the effect of the election to the non-401(k) portions of the Plan.
14.03 DEFINITIONS. For purposes of this Article XIV:
(a) "Highly Compensated Employee" means an Eligible Employee who
satisfies the definition in Section 1.09 of the Plan. Family members
aggregated as a single Employee under Section 1.09 constitute a single
Highly Compensated Employee, whether a particular family member is a
Highly Compensated Employee or a Nonhighly Compensated Employee without
the application of family aggregation.
(b) "Nonhighly Compensated Employee" means an Eligible Employee who is
not a Highly Compensated Employee and who is not a family member treated
as a Highly Compensated Employee.
(c) "Eligible Employee" means, for purposes of the ADP test described
in Section 14.08, an Employee who is eligible to enter into a salary
reduction agreement for the Plan Year, irrespective of whether he
actually enters into such an agreement, and a Participant who is
eligible for an allocation of the Employer's Cash or Deferred
Contribution for the Plan Year. For purposes of the ACP test described
in Section 14.09, an "Eligible Employee" means a Participant who is
eligible to receive an allocation of matching contributions (or would be
eligible if he made the type of contributions necessary to receive an
allocation of matching contributions) and a Participant who is eligible
to make nondeductible contributions, irrespective of whether he actually
makes nondeductible contributions. An Employee continues to be an
Eligible Employee during a period the Plan suspends the Employee's right
to make elective deferrals or nondeductible contributions following a
hardship distribution.
(d) "Highly Compensated Group" means the group of Eligible Employees
who are Highly Compensated Employees for the Plan Year.
(e) "Nonhighly Compensated Group" means the group of Eligible
Employees who are Nonhighly Compensated Employees for the Plan Year.
(f) "Compensation" means, except as specifically provided in this Article
XIV, Compensation as defined for nondiscrimination purposes in Section
1.12(B) of the Plan. To compute an Employee's ADP or ACP, the Advisory
Committee may limit Compensation taken into account to Compensation
received only for the portion of the Plan Year in which the Employee was
an Eligible Employee and only for the portion of the Plan Year in which
the Plan or the Code Section 401(k) arrangement was in effect.
(g) "Deferral contributions" are Salary Reduction Contributions and
Cash or Deferred Contributions the Employer contributes to the Trust on
behalf of an Eligible Employee, irrespective of whether, in the case of
Cash or Deferred Contributions, the contribution is at the election of
the Employee. For Salary Reduction Contributions, the terms "deferral
contributions" and "elective deferrals" have the same meaning.
(h) "Elective deferrals" are all Salary Reduction Contributions and
that portion of any Cash or Deferred Contribution which the Employer
contributes to the Trust at the election of an
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Eligible Employee. Any portion of a Cash or Deferred Contribution
contributed to the Trust because of the Employee's failure to make a
cash election is an elective deferral. However, any portion of a Cash or
Deferred Contribution over which the Employee does not have a cash
election is not an elective deferral. Elective deferrals do not include
amounts which have become currently available to the Employee prior to
the election nor amounts designed as nondeductible contributions at the
time of deferral or contribution.
(i) "Matching contributions" are contributions made by the Employer on
account of elective deferrals under a Code Section 401(k) arrangement or
on account of employee contributions. Matching contributions also
include Participant forfeitures allocated on account of such elective
deferrals or employee contributions.
(j) "Nonelective contributions" are contributions made by the Employer
which are not subject to a deferral election by an Employee and which
are not matching contributions.
(k) "Qualified matching contributions" are matching contributions
which are 100% Nonforfeitable at all times and which are subject to the
distribution restrictions described in paragraph (m). Matching
contributions are not 100% Nonforfeitable at all times if the Employee
has a 100% Nonforfeitable interest because of his Years of Service taken
into account under a vesting schedule. Any matching contributions
allocated to a Participant's Qualified Matching Contributions Account
under the Plan automatically satisfy the definition of qualified
matching contributions.
(l) "Qualified nonelective contributions" are nonelective
contributions which are 100% Nonforfeitable at all times and which are
subject to the distribution restrictions described in paragraph (m).
Nonelective contributions are not 100% Nonforfeitable at all times if
the Employee has a 100% Nonforfeitable interest because of his Years of
Service taken into account under a vesting schedule. Any nonelective
contributions allocated to a Participant's Qualified Nonelective
Contributions Account under the Plan automatically satisfy the
definition of qualified nonelective contributions.
(m) "Distribution restrictions" means the Employee may not receive a
distribution of the specified contributions (nor earnings on those
contributions) except in the event of (1) the Participant's death,
disability, termination of employment or attainment of age 59 1/2, (2)
financial hardship satisfying the requirements of Code Section 401(k)
and the applicable Treasury regulations, (3) a plan termination, without
establishment of a successor defined contribution plan (other than an
ESOP), (4) a sale of substantially all of the assets (within the meaning
of Code Section 409(d)(2)) used in a trade or business, but only to an
employee who continues employment with the corporation acquiring those
assets, or (5) a sale by a corporation of its interest in a subsidiary
(within the meaning of Code Section 409(d)(3)) but only to an employee
who continues employment with the subsidiary. For Plan Years beginning
after December 31, 1988, a distribution on account of financial
hardship, as described in clause (2), may not include earnings on
elective deferrals credited as of a date later than December 31, 1988,
and may not include qualified matching contributions and qualified
nonelective contributions, nor any earnings on such contributions,
credited after December 31, 1988. A plan does not violate the
distribution restrictions if, instead of the December 31, 1988, date in
the preceding sentence the plan specifies a date not later than the end
of the last Plan Year ending before July 1, 1989. A distribution
described in clauses (3),
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(4) or (5), if made after March 31, 1998, must be a lump sum
distribution, as required under Code Section 401(k)(10).
(n) "Employee contributions" are contributions made by a Participant
on an after-tax basis, whether voluntary or mandatory, and designated,
at the time of contribution, as an employee (or nondeductible)
contribution. Elective deferrals and deferral contributions are not
employee contributions. Participant nondeductible contributions, made
pursuant to Section 4.01 of the Plan, are employee contributions.
14.04 MATCHING CONTRIBUTIONS/EMPLOYEE CONTRIBUTIONS. The Employer may
elect in Adoption Agreement Section 3.01 to provide matching contributions.
The Employer also may elect in Adoption Agreement Section 4.01 to permit or
to require a Participant to make nondeductible contributions.
(A) MANDATORY CONTRIBUTIONS. Any Participant nondeductible contributions
eligible for matching contributions are mandatory contributions. The Advisory
Committee will maintain a separate accounting, pursuant to Section 4.06 of
the Plan, to reflect the Participant's Accrued Benefit derived from his
mandatory contributions. The Employer, under Adoption Agreement Section 4.05,
may prescribe special distribution restrictions which will apply to the
Mandatory Contributions Account prior to the Participant's Separation from
Service. Following his Separation from Service, the general distribution
provisions of Article VI apply to the distribution of the Participant's
Mandatory Contributions Account.
14.05 TIME OF PAYMENT OF CONTRIBUTIONS. The Employer must make Salary
Reduction Contributions to the Trust within an administratively reasonable
period of time after withholding the corresponding Compensation from the
Participant. Furthermore, the Employer must make Salary Reduction
Contributions, Cash or Deferred Contributions, Employer matching
contributions (including qualified Employer matching contributions) and
qualified Employer nonelective contributions no later than the time
prescribed by the Code or by applicable Treasury regulations. Salary
Reduction Contributions and Cash or Deferred Contributions are Employer
contributions for all purposes under this Plan, except to the extent the Code
or Treasury regulations prohibit the use of these contributions to satisfy
the qualification requirements of the Code.
14.06 SPECIAL ALLOCATION PROVISIONS -- DEFERRAL CONTRIBUTIONS MATCHING
CONTRIBUTIONS AND QUALIFIED NONELECTIVE CONTRIBUTIONS. To make allocations
under the Plan, the Advisory Committee must establish a Deferral
Contributions Account, a Qualified Matching Contributions Account, a Regular
Matching Contributions Account, a Qualified Nonelective Contributions Account
and an Employer Contributions Account for each Participant.
(A) DEFERRAL CONTRIBUTIONS. The Advisory Committee will allocate to each
Participant's Deferral Contributions Account the amount of Deferral
Contributions the Employer makes to the Trust on behalf of the Participant.
The Advisory Committee will make this allocation as of the last day of each
Plan Year unless, in Adoption Agreement Section 3.04, the Employer elects
more frequent allocation dates for salary reduction contributions.
(B) MATCHING CONTRIBUTIONS. The Employer must specify in its Adoption
Agreement whether the Advisory Committee will allocate matching contributions
to the Qualified Matching Contributions Account or to the Regular Matching
Contributions Account of each Participant. The Advisory Committee will
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make this allocation as of the last day of each Plan Year unless, in Adoption
Agreement Section 3.04, the Employer elects more frequent allocation dates
for matching contributions.
(1) To the extent the Employer makes matching contributions under a
fixed matching contribution formula, the Advisory Committee will
allocate the matching contribution to the Account of the Participant on
whose behalf the Employer makes that contribution. A fixed matching
contribution formula is a formula under which the Employer contributes a
certain percentage or dollar amount on behalf of a Participant based on
that Participant's deferral contributions or nondeductible contributions
eligible for a match, as specified in Section 3.01 of the Employer's
Adoption Agreement. The Employer may contribute on a Participant's
behalf under a specific matching contribution formula only if the
Participant satisfies the accrual requirements for matching
contributions specified in Section 3.06 of the Employer's Adoption
Agreement and only to the extent the matching contribution does not
exceed the Participant's annual additions limitation in Part 2 of
Article III.
(2) To the extent the Employer makes matching contributions under a
discretionary formula, the Advisory Committee will allocate the
discretionary matching contributions to the Account of each Participant
who satisfies the accrual requirements for matching contributions
specified in Section 3.06 of the Employer's Adoption Agreement. The
allocation of discretionary matching contributions to a Participant's
Account is in the same proportion that each Participant's eligible
contributions bear to the total eligible contributions of all
Participants. If the discretionary formula is a tiered formula, the
Advisory Committee will make this allocation separately with respect to
each tier of eligible contributions, allocating in such manner the
amount of the matching contributions made with respect to that tier.
"Eligible contributions" are the Participant's deferral contributions or
nondeductible contributions eligible for an allocation of matching
contributions, as specified in Section 3.01 of the Employer's Adoption
Agreement.
If the matching contribution formula applies both to deferral
contributions and to Participant nondeductible contributions, the matching
contributions apply first to deferral contributions. Furthermore, the
matching contribution formula does not apply to deferral contributions that
are excess deferrals under Section 14.07. For this purpose: (a) excess
deferrals relate first to deferral contributions for the Plan Year not
otherwise eligible for a matching contribution; and (2) if the Plan Year is
not a calendar year, the excess deferrals for a Plan Year are the last
elective deferrals made for a calendar year. Under a Standardized Plan, an
Employee forfeits any matching contribution attributable to an excess
contribution or to an excess aggregate contribution, unless distributed
pursuant to Sections 14.08 or 14.09. Under a Nonstandardized Plan, this
forfeiture rule applies only if specified in Adoption Agreement Section 3.06.
The provisions of Section 3.05 govern the treatment of any forfeiture
described in this paragraph, and the Advisory Committee will compute a
Participant's ACP under 14.09 by disregarding the forfeiture.
(C) QUALIFIED NONELECTIVE CONTRIBUTIONS. If the Employer, at the time of
contribution, designates a contribution to be a qualified nonelective
contribution for the Plan Year, the Advisory Committee will allocate that
qualified nonelective contribution to the Qualified Nonelective Contributions
Account of each Participant eligible for an allocation of that designated
contribution, as specified in Section 3.04 of the Employer's Adoption
Agreement. The Advisory Committee will make the allocation to each eligible
Participant's Account in the same ratio that the Participant's Compensation
for the Plan Year bears to the total Compensation of all eligible
Participants for the Plan Year. The Advisory Committee will determine a
Participant's Compensation in accordance with the general definition of
Compensation under Section 1.12 of the Plan, as modified by the Employer in
Sections 1.12 and 3.06 of its Adoption Agreement.
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(D) NONELECTIVE CONTRIBUTIONS. To the extent the Employer makes nonelective
contributions for the Plan Year which, at the time of contribution, it does
not designate as qualified nonelective contributions, the Advisory Committee
will allocate those contributions in accordance with the elections under
Section 3.04 of the Employer's Adoption Agreement. For purposes of the
special nondiscrimination tests described in Sections 14.08 and 14.09, the
Advisory Committee may treat nonelective contributions allocated under this
paragraph as qualified nonelective contributions, if the contributions
otherwise satisfy the definition of qualified nonelective contributions.
14.07 ANNUAL ELECTIVE DEFERRAL LIMITATION.
(A) ANNUAL ELECTIVE DEFERRAL LIMITATION. An Employee's elective deferrals
for a calendar year beginning after December 31, 1986, may not exceed the
402(g) limitation. The 402(g) limitation is the greater of $7,000 or the
adjusted amount determined by the Secretary of the Treasury. If, pursuant to
a salary reduction agreement or pursuant to a cash or deferral election, the
Employer determines the Employee's elective deferrals to the Plan for a
calendar year would exceed the 402(g) limitation, the Employer will suspend
the Employee's salary reduction agreement, if any, until the following
January 1 and pay in cash the portion of a cash or deferral election which
would result in the Employee's elective deferrals for the calendar year
exceeding the 402(g) limitation. If the Advisory Committee determines an
Employee's elective deferrals already contributed to the Plan for a calendar
year exceed the 402(g) limitation, the Advisory Committee will distribute the
amount in excess of the 402(g) limitation (the "excess deferral"), as
adjusted for allocable income, no later than April 15 of the following
calendar year. If the Advisory Committee distributes the excess deferral by
the appropriate April 15, it may make the distribution irrespective of any
other provision under this Plan or under the Code. The Advisory Committee
will reduce the amount of excess deferrals for a calendar year distributable
to the Employee by the amount of excess contributions (as determined in
Section 14.08), if any, previously distributed to the Employee for the Plan
Year beginning in that calendar year.
If an Employee participates in another plan under which he makes
elective deferrals pursuant to a Code Section 401(k) arrangement, elective
deferrals under a Simplified Employee Pension, or salary reduction
contributions to a tax-sheltered annuity, irrespective of whether the
Employer maintains the other plan, he may provide the Advisory Committee a
written claim for excess deferrals made for a calendar year. The Employee
must submit the claim no later than the March 1 following the close of the
particular calendar year and the claim must specify the amount of the
Employee's elective deferrals under this Plan which are excess deferrals. If
the Advisory Committee receives a timely claim, it will distribute the excess
deferral (as adjusted for allocable income) the Employee has assigned to this
Plan, in accordance with the distribution procedure described in the
immediately preceding paragraph.
(B) ALLOCABLE INCOME. For purposes of making a distribution of excess
deferrals pursuant to this Section 14.07, allocable income means net income
or net loss allocable to the excess deferrals for the calendar year in which
the Employee made the excess deferral, determined in a manner which is
uniform, nondiscriminatory and reasonably reflective of the manner used by
the Plan to allocate income to Participants' Accounts.
14.08 ACTUAL DEFERRAL PERCENTAGE ("ADP") TEST. For each Plan Year, the
Advisory Committee must determine whether the Plan's Code Section 401(k)
arrangement satisfies either of the following ADP tests:
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(i) The average ADP for the Highly Compensated Group does not exceed
1.25 times the average ADP of the Nonhighly Compensated Group, or
(ii) The average ADP for the Highly Compensated Group does not exceed
the average ADP for the Nonhighly Compensated Group by more than two
percentage points (or the lesser percentage permitted by the multiple
use limitation in Section 14.10) and the average ADP for the Highly
Compensated Group is not more than twice the average ADP for the
Nonhighly Compensated Group.
(A) CALCULATION OF ADP. The average ADP for a group is the average of the
separate ADPs calculated for each Eligible Employee who is a member of that
group. An Eligible Employee's ADP for a Plan Year is the ratio of the
Eligible Employee's deferral contributions for the Plan Year to the
Employee's Compensation for the Plan Year. For aggregated family members
treated as a single Highly Compensated Employee, the ADP of the family unit
is the ADP determined by combining the deferral contributions and
Compensation of all aggregated family members. A Nonhighly Compensated
Employee's ADP does not include elective deferrals made to this Plan or to
any other Plan maintained by the Employer, to the extent such elective
deferrals exceed the 402(g) limitation described in Section 14.07(A).
The Advisory Committee, in a manner consistent with Treasury
regulations, may determine the ADPs of the Eligible Employees by taking into
account qualified nonelective contributions or qualified matching
contributions, or both, made to this Plan or to any other qualified Plan
maintained by the Employer. The Advisory Committee may not include qualified
nonelective contributions in the ADP test unless the allocation of
nonelective contributions is nondiscriminatory when the Advisory Committee
takes into account all nonelective contributions (including the qualified
nonelective contributions) and also when the Advisory Committee takes into
account only the nonelective contributions not used in either the ADP test
described in this Section 14.08 or the ACP test described in Section 14.09.
For Plan Years beginning after December 31, 1989, the Advisory Committee may
not include in the ADP test any qualified nonelective contributions or
qualified matching contributions under another qualified plan unless that
plan has the same plan year as this Plan. The Advisory Committee must
maintain records to demonstrate compliance with the ADP test, including the
extent to which the Plan used qualified nonelective contributions or
qualified matching contributions to satisfy the test.
For Plan Years beginning prior to January 1, 1992, the Advisory
Committee may elect to apply a separate ADP test to each component group
under the Plan. Each component group separately must satisfy the commonality
requirement of the Code Section 401(k) regulations and the minimum coverage
requirements of Code Section 410(b). A component group consists of all the
allocations and other benefits, rights and features provided that group of
Employees. An Employee may not be part of more than one component group. The
correction rules described in this Section 14.08 apply separately to each
component group.
(B) SPECIAL AGGREGATION RULE FOR HIGHLY COMPENSATED EMPLOYEES. To determine
the ADP of any Highly Compensated Employee, the deferral contributions taken
into account must include any elective deferrals made by the Highly
Compensated Employee under any other Code Section 401(k) arrangement
maintained by the Employer, unless the elective deferrals are to an ESOP. If
the plans containing the Code Section 401(k) arrangements have different plan
years, the Advisory Committee will determine the combined deferral
contributions on the basis of the plan years ending in the same calendar year.
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(C) AGGREGATION OF CERTAIN CODE SECTION 401(k) ARRANGEMENTS. If the Employer
treats two plans as a unit for coverage or nondiscrimination purposes, the
Employer must combine the Code Section 401(k) arrangements under such plans
to determine whether either plan satisfies the ADP test. This aggregation
rule applies to the ADP determination for all Eligible Employees,
irrespective of whether an Eligible Employee is a Highly Compensated Employee
or a Nonhighly Compensated Employee. For Plan Years beginning after December
31, 1989, an aggregation of Code Section 401(k) arrangements under this
paragraph does not apply to plans which have different plan years and, for
Plan Years beginning after December 31, 1988, the Advisory Committee may not
aggregate an ESOP (or the ESOP portion of a plan) with a non-ESOP plan (or
non-ESOP portion of a plan).
(D) CHARACTERIZATION OF EXCESS CONTRIBUTIONS. If, pursuant to this Section
14.08, the Advisory Committee has elected to include qualified matching
contributions in the average ADP, the Advisory Committee will treat excess
contributions as attributable proportionately to deferral contributions and
to qualified matching contributions allocated on the basis of those deferral
contributions. If the total amount of a Highly Compensated Employee's excess
contributions for the Plan Year exceeds his deferral contributions or
qualified matching contributions for the Plan Year, the Advisory Committee
will treat the remaining portion of his excess contributions as attributable
to qualified nonelective contributions. The Advisory Committee will reduce
the amount of excess contributions for a Plan Year distributable to a Highly
Compensated Employee by the amount of excess deferrals (as determined in
Section 14.07), if any, previously distributed to that Employee for the
Employee's taxable year ending in that Plan Year.
(E) DISTRIBUTION OF EXCESS CONTRIBUTIONS. If the Advisory Committee
determines the Plan fails to satisfy the ADP test for a Plan Year, it must
distribute the excess contributions, as adjusted for allocable income, during
the next Plan Year. However, the Employer will incur an excise tax equal to
10% of the amount of excess contributions for a Plan Year not distributed to
the appropriate Highly Compensated Employees during the first 2 1/2 months of
that next Plan Year. The excess contributions are the amount of deferral
contributions made by the Highly Compensated Employees which causes the Plan
to fail to satisfy the ADP test. The Advisory Committee will distribute to
each Highly Compensated Employee his respective share of the excess
contributions. The Advisory Committee will determine the respective shares of
excess contributions by starting with the Highly Compensated Employee(s) who
has the greatest ADP, reducing his ADP (but not below the next highest ADP),
then, if necessary, reducing the ADP of the Highly Compensated Employee(s) at
the next highest ADP level (including the ADP of the Highly Compensated
Employee(s) whose ADP the Advisory Committee already has reduced), and
continuing in this manner until the average ADP for the Highly Compensated
Group satisfies the ADP test. If the Highly Compensated Employee is part of
an aggregated family group, the Advisory Committee, in accordance with the
applicable Treasury regulations, will determine each aggregated family
member's allocable share of the excess contributions assigned to the family
unit.
(F) ALLOCABLE INCOME. To determine the amount of the corrective distribution
required under this Section 14.08, the Advisory Committee must calculate the
allocable income for the Plan Year in which the excess contributions arose.
"Allocable income" means net income or net loss. To calculate allocable
income for the Plan Year, the Advisory Committee will use a uniform and
nondiscriminatory method which reasonably reflects the manner used by the
Plan to allocate income to Participants' Accounts.
14.09 NONDISCRIMINATION RULES FOR EMPLOYER MATCHING
CONTRIBUTIONS/PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS. For Plan Years
beginning after December 31, 1986, the Advisory Committee must determine
whether the annual Employer matching contributions (other than qualified
matching contributions used in the ADP under
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Section 14.08), if any, and the Employee contributions, if any, satisfy
either of the following average contribution percentage ("ACP") tests:
(i) The ACP for the Highly Compensated Group does not exceed 1.25
times the ACP of the Nonhighly Compensated Group; or
(ii) The ACP for the Highly Compensated Group does not exceed the ACP
for the Nonhighly Compensated Group by more than two percentage points
(or the lesser percentage permitted by the multiple use limitation in
Section 14.10) and the ACP for the Highly Compensated Group is not more
than twice the ACP for the Nonhighly Compensated Group.
(A) CALCULATION OF ACP. The average contribution percentage for a group is
the average of the separate contribution percentages calculated for each
Eligible Employee who is a member of that group. An Eligible Employee's
contribution percentage for a Plan Year is the ratio of the Eligible
Employee's aggregate contributions for the Plan Year to the Employee's
Compensation for the Plan Year. "Aggregate contributions" are Employer
matching contributions (other than qualified matching contributions used in
the ADP test under Section 14.08) and employee contributions (as defined in
Section 14.03). For aggregated family members treated as a single Highly
Compensated Employee, the contribution percentage of the family unit is the
contribution percentage determined by combining the aggregate contributions
and Compensation of all aggregated family members.
The Advisory Committee, in a manner consistent with Treasury
regulations, may determine the contribution percentages of the Eligible
Employees by taking into account qualified nonelective contributions (other
than qualified nonelective contributions used in the ADP test under Section
14.08) or elective deferrals, or both, made to this Plan or to any other
qualified Plan maintained by the Employer. The Advisory Committee may not
include qualified nonelective contributions in the ACP test unless the
allocation of nonelective contributions is nondiscriminatory when the
Advisory Committee takes into account all nonelective contributions
(including the qualified nonelective contributions) and also when the
Advisory Committee takes into account only the nonelective contributions not
used in either the ADP test described in Section 14.08 or the ACP test
described in this Section 14.09. The Advisory Committee may not include
elective deferrals in the ACP test, unless the Plan which includes the
elective deferrals satisfies the ADP test both with and without the elective
deferrals included in this ACP test. For Plan Years beginning after December
31, 1989, the Advisory Committee may not include in the ACP test any
qualified nonelective contributions or elective deferrals under another
qualified plan unless that plan has the same plan year as this Plan. The
Advisory Committee must maintain records to demonstrate compliance with the
ACP test, including the extent to which the Plan used qualified nonelective
contributions or elective deferrals to satisfy the test. For Plan Years
beginning prior to January 1, 1992, the component group testing rule
permitted under Section 14.08(A) also applies to the ACP test under this
Section 14.09.
(B) SPECIAL AGGREGATION RULE FOR HIGHLY COMPENSATED EMPLOYEES. To determine
the contribution percentage of any Highly Compensated Employee, the aggregate
contributions taken into account must include any matching contributions
(other than qualified matching contributions used in the ADP test) and any
Employee contributions made on his behalf to any other plan maintained by the
Employer, unless the other plan is an ESOP. If the plans have different plan
years, the Advisory Committee will determine the combined aggregate
contributions on the basis of the plan years ending in the same calendar year.
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(C) AGGREGATION OF CERTAIN PLANS. If the Employer treats two plans as a unit
for coverage or nondiscrimination purposes, the Employer must combine the
plans to determine whether either plan satisfies the ACP test. This
aggregation rule applies to the contribution percentage determination for all
Eligible Employees, irrespective of whether an Eligible Employee is a Highly
Compensated Employee or a Nonhighly Compensated Employee. For Plan Years
beginning after December 31, 1989, an aggregation of plans under this
paragraph does not apply to plans which have difference plan years and, for
Plan Years beginning after December 31, 1988, the Advisory Committee may not
aggregate an ESOP (or the ESOP portion of a plan) with an non-ESOP plan (or
non-ESOP portion of a plan).
(D) DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS. The Advisory Committee
will determine excess aggregate contributions after determining excess
deferrals under Section 14.07 and excess contributions under Section 14.08.
If the Advisory Committee determines the Plan fails to satisfy the ACP test
for a Plan Year, it must distribute the excess aggregate contributions, as
adjusted for allocable income, during the next Plan Year. However, the
Employer will incur an excise tax equal to 10% of the amount of excess
aggregate contributions for a Plan Year not distributed to the appropriate
Highly Compensated Employees during the first 2 1/2 months of that next Plan
Year. The excess aggregate contributions are the amount of aggregate
contributions allocated on behalf of the Highly Compensated Employees which
causes the Plan to fail to satisfy the ACP test. The Advisory Committee will
distribute to each Highly Compensated Employee his respective share of the
excess aggregate contributions. The Advisory Committee will determine the
respective shares of excess aggregate contributions by starting with the
Highly Compensated Employee(s) who has the greatest contribution percentage,
reducing his contribution percentage (but not below the next highest
contribution percentage), then, if necessary, reducing the contribution
percentage of the Highly Compensated Employee(s) at the next highest
contribution percentage level (including the contribution percentage of the
Highly Compensated Employee(s) whose contribution percentage the Advisory
Committee already has reduced), and continuing in this manner until the ACP
for the Highly Compensated Group satisfies the ACP test. If the Highly
Compensated Employee is part of an aggregated family group, the Advisory
Committee, in accordance with the applicable Treasury regulations, will
determine each aggregated family member's allocable share of the excess
aggregate contributions assigned to the family unit.
(E) ALLOCABLE INCOME. To determine the amount of the corrective distribution
required under this Section 14.09, the Advisory Committee must calculate the
allocable income for the Plan Year in which the excess aggregate
contributions arose. "Allocable income" means net income or net loss. The
Advisory Committee will determine allocable income in the same manner as
described in Section 14.08(F) for excess contributions.
(F) CHARACTERIZATION OF EXCESS AGGREGATE CONTRIBUTIONS. The Advisory
Committee will treat a Highly Compensated Employee's allocable share of
excess aggregate contributions in the following priority: (1) first as
attributable to his Employee contributions which are voluntary contributions,
if any; (2) then as matching contributions allocable with respect to excess
contributions determined under the ADP test described in Section 14.08; (3)
then on a pro rata basis to matching contributions and to the deferral
contributions relating to those matching contributions which the Advisory
Committee has included in the ACP test; (4) then on a pro rata basis to
Employee contributions which are mandatory contributions, if any, and to the
matching contributions allocated on the basis of those mandatory
contributions; and (5) last to qualified nonelective contributions used in
the ACP test. To the extent the Highly Compensated Employee's excess
aggregate contributions are attributable to matching contributions, and he is
not 100% vested in his Accrued Benefit attributable to matching
contributions, the Advisory Committee will distribute only the vested portion
and forfeit the nonvested portion. The
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vested portion of the Highly Compensated Employee's excess aggregate
contributions attributable to Employer matching contributions is the total
amount of such excess aggregate contributions (as adjusted for allocable
income) multiplied by his vested percentage (determined as of the last day of
the Plan Year for which the Employer made the matching contribution). The
Employer will specify in Adoption Agreement Section 3.05 the manner in which
the Plan will allocate forfeited excess aggregate contributions.
14.10 MULTIPLE USE LIMITATION. For Plan Years beginning after December
31, 1988, if at least one Highly Compensated Employee is includible in the
ADP test under Section 14.08 and in the ACP test under Section 14.09, the sum
of the Highly Compensated Group's ADP and ACP may not exceed the multiple use
limitation.
The multiple use limitation is the sum of (i) and (ii):
(i) 125% of the greater of: (a) the ADP of the Nonhighly Compensated
Group under the Code Section 401(k) arrangement; or (b) the ACP of the
Nonhighly Compensated Group for the Plan Year beginning with or within
the Plan Year of the Code Section 401(k) arrangement.
(ii) 2% plus the lesser of (i)(a) or (i)(b), but no more than twice the
lesser of (i)(a) or (i)(b).
The Advisory Committee, in lieu of determining the multiple use
limitation as the sum of (i) and (ii), may elect to determine the multiple
use limitation as the sum of (iii) and (iv):
(iii) 125% of the lesser of: (a) the ADP of the Nonhighly Compensated
Group under the Code Section 401(k) arrangement; or (b) the ACP of the
Nonhighly Compensated Group for the Plan Year beginning with or within
the Plan Year of the Code Section 401(k) arrangement.
(iv) 2% plus the greater of (iii)(a) or (iii)(b), but no more than
twice the greater of (iii)(a) or (iii)(b).
The Advisory Committee will determine whether the Plan satisfies the
multiple use limitation after applying the ADP test under Section 14.08 and
the ACP test under Section 14.09 and after making any corrective
distributions required by those Sections. If, after applying this Section
14.10, the Advisory Committee determines the Plan has failed to satisfy the
multiple use limitation, the Advisory Committee will correct the failure by
treating the excess amount as excess contributions under Section 14.08 or as
excess aggregate contributions under Section 14.09, as it determines in its
sole discretion. This Section 14.10 does not apply unless, prior to
application of the multiple use limitation, the ADP and the ACP of the Highly
Compensated Group each exceeds 125% of the respective percentages for the
Nonhighly Compensated Group.
14.11 DISTRIBUTION RESTRICTIONS. The Employer must elect in Section 6.03
the Adoption Agreement the distribution events permitted under the Plan. The
distribution events applicable to the Participant's Deferral Contributions
Account, Qualified Nonelective Contributions Account and Qualified Matching
Contributions Account must satisfy the distribution restrictions described in
paragraph (m) of Section 14.03.
(A) HARDSHIP DISTRIBUTIONS FROM DEFERRAL CONTRIBUTIONS ACCOUNT. The Employer
must elect in Adoption Agreement Section 6.03 whether a Participant may
receive hardship distributions from his Deferral Contributions Account prior
to the Participant's Separation from Service. Hardship distributions
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from the Deferral Contributions Account must satisfy the requirements of this
Section 14.11. A hardship distribution option may not apply to the
Participant's Qualified Nonelective Contributions Account or Qualified
Matching Contributions Account, except as provided in paragraph (3).
(1) DEFINITION OF HARDSHIP. A hardship distribution under this Section
14.11 must be on account of one or more of the following immediate and heavy
financial needs: (1) medical care described in Code Section 213(d) incurred
by the Participant, by the Participant's spouse, or by any of the
Participant's dependents, or necessary to obtain such medical care; (2) the
purchase (excluding mortgage payments) of a principal residence for the
Participant; (3) the payment of post-secondary education tuition and related
educational fees, for the next 12-month period, for the Participant, for the
Participant's spouse, or for any of the Participant's dependents (as defined
in Code Section 152); (4) to prevent the eviction of the Participant from his
principal residence or the foreclosure on the mortgage of the Participant's
principal residence; or (5) any need prescribed by the Revenue Service in a
revenue ruling, notice or other document of general applicability which
satisfies the safe harbor definition of hardship.
(2) RESTRICTIONS. The following restrictions apply to a Participant
who receives a hardship distribution: (a) the Participant may not make
elective deferrals or employee contributions to the Plan for the 12-month
period following the date of his hardship distribution; (b) the distribution
is not in excess of the amount of the immediate and heavy financial need
(including any amounts necessary to pay any federal, state or local income
taxes or penalties reasonably anticipated to result from the distribution);
(c) the Participant must have obtained all distributions, other than hardship
distributions, and all nontaxable loans (determined at the time of the loan)
currently available under this Plan and all other qualified plans maintained
by the Employer; and (d) the Participant agrees to limit elective deferrals
under this Plan and under any other qualified Plan maintained by the
Employer, for the Participant's taxable year immediately following the
taxable year of the hardship distribution, to the 402(g) limitation (as
described in Section 14.07), reduced by the amount of the Participant's
elective deferrals made in the taxable year of the hardship distribution. The
suspension of elective deferrals and employee contributions described in
clause (a) also must apply to all other qualified plans and to all
nonqualified plans of deferred compensation maintained by the Employer, other
than any mandatory employee contribution portion of a defined benefit plan,
including stock option, stock purchase and other similar plans, but not
including health or welfare benefit plans (other than the cash or deferred
arrangement portion of a cafeteria plan).
(3) EARNINGS. For Plan Years beginning after December 31, 1988, a
hardship distribution under this Section 14.11 may not include earnings on an
Employee's elective deferrals credited after December 31, 1988. Qualified
matching contributions and qualified nonelective contributions, and any
earnings on such contributions, credited as of December 31, 1988, are subject
to the hardship withdrawal only if the Employer specifies in an addendum to
this Section 14.11. The addendum may modify the December 31, 1988, date for
purposes of determining credited amount provided the date is not later than
the end of the last Plan Year ending before July 1, 1989.
(B) DISTRIBUTIONS AFTER SEPARATION FROM SERVICE. Following the Participant's
Separation from Service, the distribution events applicable to the
Participant apply equally to all of the Participant's Accounts, except as
elected in Section 6.03 of the Employer's Adoption Agreement.
(C) CORRECTION OF ANNUAL ADDITIONS LIMITATION. If, as a result of a
reasonable error in determining the amount of elective deferrals an Employee
may make without violating the limitations of Part 2 of Article III, an
Excess Amount results, the Advisory Committee will return the Excess Amount
(as adjusted for allocable income) attributable to the elective deferrals.
The Advisory Committee will make
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this distribution before taking any corrective steps pursuant to Section 3.10
or to Section 3.16. The Advisory Committee will disregard any elective
deferrals returned under this Section 14.11(C) for purposes of Sections
14.07, 14.08 and 14.09.
14.12 SPECIAL ALLOCATION RULES. If the Code Section 401(k) arrangement
provides for salary reduction contributions, if the Plan accepts Employee
contributions, pursuant to Adoption Agreement Section 4.01, or if the Plan
allocates matching contributions as of any date other than the last day of
the Plan Year, the Employer must elect in Adoption Agreement 9.11 whether any
special allocation provisions will apply under Section 9.11 of the Plan. For
purposes of the elections:
(a) A "segregated Account" direction means the Advisory Committee will
establish a segregated Account for the applicable contributions made on
the Participant's behalf during the Plan Year. The Trustee must invest
the segregated Account in Federally insured interest bearing savings
account(s) or time deposits, or a combination of both, or in any other
fixed income investments, unless otherwise specified in the Employer's
Adoption Agreement. As of the last day of each Plan Year (or, if
earlier, an allocation date coinciding with a valuation date described
in Section 9.11), the Advisory Committee will reallocate the segregated
Account to the Participant's appropriate Account, in accordance with
Section 3.04 or Section 4.06, whichever applies to the contributions.
(b) A "weighted average allocation" method will treat a weighted
portion of the applicable contributions as if includible in the
Participant's Account as of the beginning of the valuation period. The
weighted portion is a fraction, the numerator of which is the number of
months in the valuation period, excluding each month in the valuation
period which begins prior to the contribution date of the applicable
contributions, and the denominator of which is the number of months in
the valuation period. The Employer may elect in its Adoption Agreement
to substitute a weighting period other than months for purposes of this
weighted average allocation.
* * * * * * * * * * * * * * *
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ARTICLE A
APPENDIX TO BASIC PLAN DOCUMENT
This Article is necessary to comply with the Unemployment Compensation
Amendments Act of 1992 and is an integral part of the basic plan document.
Section 12.08 applies to any modification or amendment of this Article.
A-1. APPLICATIONS. This Article applies to distributions made on or
after January 1, 1993. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee's election under this
Article, a distributee may elect, at the time and in the manner prescribed by
the Plan Administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the
distributee in a direct rollover.
A-2. DEFINITIONS.
(a) "Eligible rollover distribution." An eligible rollover
distribution is any distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover distribution does
not include: any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or
life expectancy) of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's designated
beneficiary, or for a specified period of ten years or more; any distribution
to the extent such distribution is required under Code Section 401(a)(9); and
the portion of any distribution that is not includible in gross income
(determined without regard to the exclusion of net unrealized appreciation
with respect to employer securities).
(b) "Eligible retirement plan." An eligible retirement plan is an
individual retirement account described in Code Section 408(a), an individual
retirement annuity described in Code Section 408(b), an annuity plan
described in Code Section 403(a), or a qualified trust described in Code
Section 401(a), that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible rollover distribution to
the surviving spouse, an eligible retirement plan is an individual retirement
account or individual retirement annuity.
(c) "Distributee." A distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's surviving spouse
and the employee's or former Employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as defined in
Code Section 414(p), are distributees with regard to the interest of the
spouse or former spouse.
(d) "Direct rollover." A direct rollover is a payment by the Plan
to the eligible retirement plan specified by the distributee.
A-1
<PAGE>
ARTICLE B
APPENDIX TO BASIC PLAN DOCUMENT
This Article is necessary to comply with the Omnibus Budget
Reconciliation Act of 1933 (OBRA '93) and is an integral part of the basic
plan document. Section 12.08 applies to any modification or amendment of this
Article.
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
first plan year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
B-1
<PAGE>
BOGLE & GATES DEFINED CONTRIBUTION PROTOTYPE PLAN
APPENDIX TO BASIC PLAN DOCUMENT
ARTICLE C
Rev. Rul. 94-76 Model Amendment
This amendment is effective on March 12, 1995.
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 benefits 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 Code Section 414(1), to this Plan from a
money purchase pension plan qualified under Code Section 401(a) (other than
any portion of those assets and liabilities attributable to voluntary
Employee contributions).
ARTICLE D
USERRA Model Amendment
This amendment is effective as of December 12, 1994.
Notwithstanding any provision of this Plan to the contrary,
contributions, benefits and service credit with respect to qualified military
service will be provided in accordance with Code Section 414(u). Loan
repayments will be suspended under this Plan as permitted under Code Section
414(u)(4).
* * * * * * * * * * * * * * *
-1-
<PAGE>
DATE
Active Voice Corporation
2901 Third Avenue, Suite 500
Seattle, WA 98121-9800
Re: Form S-8 Registration Statement
Ladies and Gentlemen:
We are delivering this opinion in connection with the Registration Statement
on Form S-8 (the "Registration Statement") of Active Voice Corporation, a
Washington corporation (the "Company"), to be filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the "Act"),
with respect to certain shares of the Company's common stock, no par value
(the "Common Stock"), to be delivered to participants in the Active Voice
Corporation 401(k) Plan (the "Plan").
We have examined and are familiar with originals or copies, certified or
otherwise identified to our satisfaction, of such corporate documents and
records as we have deemed relevant and necessary for the purpose of this
opinion.
For purposes of this opinion, we have assumed that the trustee of the Plan
(the "Trustee") will acquire up to 100,000 shares of the Company's Common
Stock from the available pool of issued and outstanding shares of Common
Stock through purchases on the open market (the 100,000 shares so purchased
being herein referred to as the "Plan Shares").
Based upon and subject to the foregoing and to such further limitations and
qualifications as set forth below, we are of the opinion that:
(1) As of June 30, 1997, a total of 4,611,037 shares of the
Company's Common Stock were duly authorized and validly issued
and outstanding, all of which were fully paid and nonassessable.
(2) The Plan Shares, when purchased and delivered in accordance with
the provisions of the Plan, will constitute duly authorized,
validly issued, fully paid and nonassessable shares of the
Company's Common Stock.
<PAGE>
We express no opinion with respect to any shares that may be purchased by the
Trustee other than from the shares of Common Stock that were issued and
outstanding as of June 30, 1997.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not admit that we are
in the category of persons whose consent is required under section 7 of the
Act.
Very truly yours,
/s/ John M. Steel
John M. Steel
of
GRAHAM & JAMES LLP/RIDDELL WILLIAMS P.S.
<PAGE>
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement on Form S-8 pertaining to the registration of 100,000 shares of
common stock of Active Voice Corporation under the Active Voice 401(k) Plan
of our report dated May 5, 1997, with respect to the consolidated financial
statements and schedule of Active Voice Corporation included in its Annual
Report on Form 10-K for the year ended March 31, 1997, filed with the
Securities Exchange Commission.
ERNST & YOUNG LLP
Seattle, Washington
June 26, 1997
