<PAGE> 1
As filed with the Securities and Exchange Commission on June 23, 1997
Registration Statement No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
SUMMIT CARE CORPORATION
(Exact Name of Issuer as Specified in Its Charter)
CALIFORNIA 95-3656297
(State of Incorporation) (I.R.S. Employer Identification Number)
2600 WEST MAGNOLIA BOULEVARD
BURBANK, CALIFORNIA 91505
(Address of Principal Executive Offices) (Zip Code)
SUMMIT CARE CORPORATION
401(K) SAVINGS PLAN
(Full Title of the Plan)
DERWIN L. WILLIAMS
Senior Vice President-Finance
Summit Care Corporation
22613 Old Canal Road
Yorba Linda, California 92887
(Name and Address of Agent for Service)
(714) 279-1450
(Telephone Number, including Area Code, of Agent for Service)
---------------
With a copy to:
PETER F. ZIEGLER, ESQ.
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue
Los Angeles, California 90071
(213) 229-7000
---------------
================================================================================
CALCULATION OF REGISTRATION FEE
================================================================================
<TABLE>
<CAPTION>
Proposed Maximum
Title of Securities Amount to be Registered(1) Proposed Maximum Offering Aggregate Offering Amount of
to be Registered Price Per Share(2) Price(2) Registration Fee(2)
<S> <C> <C> <C> <C>
Common Stock, no
par value 100,000 $13.625 $1,362,500 $412.88
- -----------------------------------------------------------------------------------------------------------------------------
Interests in the
Plan (3) (3) (3) (3)
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) There is also being registered hereunder such additional shares as may
be issued pursuant to the anti-dilution provisions of the Plan.
(2) Estimated solely for purpose of calculating the registration fee
pursuant to Rule 457(h) on the basis of the average of the high and low
prices of the Common Stock of Summit Care Corporation as reported on
the Nasdaq National Market on June 16, 1997.
(3) 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(s) described herein. In accordance with Rule 457(h)(2), no
separate fee calculation is made for Plan interests.
================================================================================
<PAGE> 2
EXPLANATORY NOTE
This Registration Statement on Form S-8 (the "Registration Statement") is being
filed under the Securities Act of 1933, as amended (the "Securities Act") by
Summit Care Corporation, a California corporation (the "Registrant"), in
relation to the Summit Care Corporation 401(k) Savings Plan (the "Plan"), as
effective July 1, 1997, in order to register the shares of common stock, no par
value (the "Common Stock"), of the Registrant and the Plan interests issuable
pursuant to the Plan.
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION.*
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.*
* The documents containing the information specified in Part I
of Form S-8 (plan information and registrant information) will
be sent or given to optionees as specified by Rule 428(b)(1)
of the Securities Act. Such documents need not be filed with
the Securities and Exchange Commission (the "Commission")
either as part of this Registration Statement or as
prospectuses or prospectus supplements pursuant to Rule 424 of
the Securities Act. These documents, which include the
statement of availability required by Item 2 of Form S-8, and
the documents incorporated by reference in this Registration
Statement pursuant to Item 3 of Form S-8 (Part II hereof),
taken together, constitute a prospectus that meets the
requirements of Section 10(a) of the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents of the Registrant and the Plan heretofore filed
with the Commission are hereby incorporated in this Registration Statement by
reference:
(1) The Registrant's quarterly report on Form 10-Q filed May 14,
1997 for the quarter ended March 31, 1997;
(2) The Registrant's quarterly report on Form 10-Q filed
February 2, 1997 for the quarter ended December 31, 1996;
(3) The Registrant's quarterly report on Form 10-Q filed
November 8, 1996 for the quarter ended September 30, 1996;
(4) The Registrant's annual report on Form 10-K filed September 6,
1996 for the fiscal year ended June 30, 1996; and
(5) The description of the Registrant's Common Stock contained in
the Registrant's Registration Statement on Form 8-A
(Registration No. 0-19411), as filed with the
2
<PAGE> 3
Commission on July 17, 1991, and any amendment or report filed
with the Commission for the purpose of updating such
description of the Common Stock.
All reports and other documents subsequently filed by the
Registrant and the Plan pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act prior to the termination of the Plan or the filing of a
post-effective amendment which indicates that all securities offered hereunder
have been sold or which deregisters all such securities then remaining unsold
shall be deemed to be incorporated by reference in this Registration Statement
and to be a part hereof from the date of filing of such reports and documents.
Any statement contained in this Registration Statement or any report or document
incorporated into this Registration Statement by reference, however, shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained in a subsequently dated report or
document that is also considered part of this Registration Statement, or in any
amendment to this Registration Statement, is inconsistent with such prior
statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As allowed by the California General Corporation Law, the
Registrant's Articles of Incorporation provide that the liability of the
directors of the Registrant for monetary damages shall be eliminated to the
fullest extent permissible under California law. This is intended to eliminate
the personal liability of a director for monetary damages in an action brought
by or in the right of the Registrant for breach of a director's duties to the
Registrant or its shareholders except for liability: (i) for acts or omissions
that involve intentional misconduct or a knowing and culpable violation of law;
(ii) for acts or omissions that a director believes to be contrary to the best
interests of the Registrant or its shareholders or that involve the absence of
good faith on the part of the director; (iii) for any transaction from which a
director derived an improper personal benefit; (iv) for acts or omissions that
show a reckless disregard for the director's duty to the Registrant or its
shareholders in circumstances in which the director was aware, or should have
been aware, in the ordinary course of performing a director's duties, of a risk
of serious injury to the Registrant or its shareholders; (v) for acts or
omissions that constitute an unexcused pattern of inattention that amounts to an
abdication of the director's duty to the Registrant or its shareholders; (vi)
with respect to certain transactions or the approval of transactions in which a
director has a material financial interest; and (vii) expressly imposed by
statute, for approval of certain improper distributions to shareholders of
certain loans or guarantees. This provision does not limit or eliminate the
rights of the Registrant or any shareholder to seek non-monetary relief such as
an injunction or rescission in the event of a breach of a director's duty of
care.
The Registrant's Bylaws permit it to indemnify its directors
and officers to the full extent permitted by law. In addition, the Registrant's
Articles of Incorporation expressly authorize the use of indemnification
agreements, and the Registrant has entered into separate indemnification
agreements with each of its directors and its executive officers. These
agreements
3
<PAGE> 4
require the Registrant to indemnify its officers and directors to the full
extent permitted by law, including circumstances in which indemnification would
otherwise be discretionary. Among other things, the agreements require the
Registrant to indemnify directors and officers against certain liabilities that
may arise by reason of their status or service as directors and officers and to
advance their expenses incurred as a result of any proceeding against them as to
which they could be indemnified.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 Summit Care Corporation 401(k) Savings Plan, as
effective July 1, 1997
4.2 Amended and Restated Articles of Incorporation of the
Registrant (incorporated by reference to Exhibit 3.1
to the Registrant's Form S-1 Registration Statement
No. 33-40778, filed with the Securities and Exchange
Commission on May 23, 1991)
4.3 Amended and Restated Bylaws of the Registrant
(incorporated by reference to Exhibit 3.3 to
Amendment No. 2 to the Registrant's Form S-1
Registration Statement No. 33-40778, filed with the
Securities and Exchange Commission on July 3, 1991)
23.1 Consent of Ernst & Young LLP
24.1 Powers of Attorney (included on the signature page of
this Registration Statement)
The Registrant hereby undertakes to submit the Plan and any
amendments thereto to the Internal Revenue Service ("IRS") in a timely manner
and undertakes to make all changes required by the IRS in order 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.
4
<PAGE> 5
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 information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by
the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in
the Registration Statement.
(2) That, for the purpose of determining any
liability under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter
5
<PAGE> 6
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
6
<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Burbank, California, on this 20th day of June, 1997.
SUMMIT CARE CORPORATION
By: /s/ WILLIAM C. SCOTT
------------------------------
William C. Scott
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints WILLIAM C. SCOTT and DERWIN L. WILLIAMS, or either of
them, his or her attorneys-in-fact and agents, with full power of substitution,
for him or her in any and all capacities, to sign any amendments to this
Registration Statement, including post-effective amendments, and to file the
same, with exhibits thereto and all other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, and hereby ratifying and confirming all that said
attorneys-in-fact, or their substitutes, may do or cause to be done by virtue
hereof. Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ WILLIAM C. SCOTT Chairman of the Board and Chief June 20 1997
- --------------------------------------------------- Executive Officer
William C. Scott (Principal Executive Officer)
/s/ DERWIN L. WILLIAMS Senior Vice President-Finance June 20 1997
- --------------------------------------------------- (Principal Financial Officer)
Derwin L. Williams
/s/ JOHN L. FARBER Vice President-Controller June 20 1997
- --------------------------------------------------- (Principal Accounting Officer)
John L. Farber
/s/ DONALD J. AMARAL Director June 20 1997
- ---------------------------------------------------
Donald J. Amaral
/s/ JOHN A. BRENDE Director June 20 1997
- ---------------------------------------------------
John A. Brende
/s/ WILLIAM J. CASEY Director June 20 1997
- ---------------------------------------------------
William J. Casey
</TABLE>
7
<PAGE> 8
<TABLE>
<S> <C> <C>
/s/ KEITH B. PITTS Director June 20 1997
- ---------------------------------------------------
Keith B. Pitts
/s/ GARY L. MASSIMINO Director June 20 1997
- ---------------------------------------------------
Gary L. Massimino
</TABLE>
Pursuant to the requirements of the Securities Act, the trustees (or
other persons who administer the Plan) have duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Francisco, State of California, on this 20th day
of June, 1997.
THE CHARLES SCHWAB TRUST COMPANY
By: /s/ ROSE HAUER
-----------------------
Name: Rose Hauer
Title: Officer
8
<PAGE> 9
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequentially
Number Description Numbered Page*
- ------ ----------- --------------
<S> <C> <C>
4.1 Summit Care Corporation 401(k) Savings Plan, as effective July 1, 1997
4.2 Amended and Restated Articles of Incorporation of the Registrant
(incorporated by reference to Exhibit 3.1 to the Registrant's
Form S-1 Registration Statement No. 33-40778, filed with the
Securities and Exchange Commission on May 23, 1991)
4.3 Amended and Restated Bylaws of the Registrant (incorporated by reference
to Exhibit 3.3 to Amendment No. 2 to the Registrant's Form S-1
Registration Statement No. 33-40778, filed with the Securities and
Exchange Commission on July 3, 1991)
23.1 Consent of Ernst & Young LLP
24.1 Powers of Attorney (included on the signature page of this Registration
Statement).
</TABLE>
- ----------
* This information appears only in the manually signed copy of this Registration
Statement filed with the Commission.
<PAGE> 1
EXHIBIT 4.1
SUMMIT CARE CORPORATION
401(k)
SAVINGS PLAN
<PAGE> 2
HUTCHISON AND ASSOCIATES, INC.
DEFINED CONTRIBUTION PROTOTYPE PLAN
AND
TRUST AGREEMENT
401 (k) Plan
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ALPHABETICAL LISTING OF DEFINITIONS............................... v
ARTICLE 1, DEFINITIONS
1.01 Employer........................................... 1.01
1.02 Trustee............................................ 1.01
1.03 Plan............................................... 1.01
1.04 Adoption Agreement................................. 1.01
1.05 Plan Administrator................................. 1.02
1.06 Administrative Committee........................... 1.02
1.07 Employee........................................... 1.02
1.08 Self-Employed Individual/Owner-Employee............ 1.02
1.09 Highly Compensated Employee........................ 1.02
1.10 Participant........................................ 1.03
1.11 Beneficiary........................................ 1.03
1.12 Compensation....................................... 1.03
1.13 Earned Income...................................... 1.05
1.14 Account............................................ 1.05
1.15 Accrued Benefit.................................... 1.05
1.16 Nonforfeitable..................................... 1.05
1.17 Plan Year/Limitation Year.......................... 1.05
1.18 Effective Date..................................... 1.05
1.19 Plan Entry Date.................................... 1.05
1.20 Accounting Date.................................... 1.05
1.21 Trust.............................................. 1.05
1.22 Trust Fund......................................... 1.05
1.23 Nontransferable Annuity............................ 1.05
1.24 ERISA.............................................. 1.06
1.25 Code............................................... 1.06
1.26 Service............................................ 1.06
1.27 Hour of Service.................................... 1.06
1.28 Disability......................................... 1.07
1.29 Service for Predecessor Employer................... 1.07
1.30 Related Employers.................................. 1.07
1.31 Leased Employees................................... 1.08
1.32 Special Rules for Owner-Employers.................. 1.08
1.33 Determination of Top Heavy Status.................. 1.09
1.34 Paired Plans....................................... 1.11
ARTICLE II, EMPLOYEE PARTICIPANTS
2.01 Eligibility........................................ 2.01
2.02 Year of Service - Participation.................... 2.01
2.03 Break in Service - Participation................... 2.01
2.04 Participation upon Re-employment................... 2.02
2.05 Change in Employee Status.......................... 2.02
2.06 Election Not to Participate........................ 2.02
</TABLE>
<PAGE> 4
<TABLE>
<S> <C> <C>
ARTICLE III, EMPLOYER CONTRIBUTIONS AND FORFEITURES
3.01 Amount............................................. 3.01
3.02 Determination of Contribution...................... 3.01
3.03 Time of Payment of Contribution.................... 3.01
3.04 Contribution Allocation............................ 3.01
3.05 Forfeiture Allocation.............................. 3.03
3.06 Accrual of Benefit................................. 3.03
3.07-3.16 Limitations on Allocations......................... 3.05
3.17 Special Allocation Limitation...................... 3.07
3.18 Defined Benefit Plan Limitation.................... 3.07
3.19 Definitions - Article III.......................... 3.08
ARTICLE IV, PARTICIPANT CONTRIBUTIONS
4.01 Participant Voluntary Contributions................ 4.01
4.02 Participant Deductible Contributions............... 4.01
4.03 Participant Rollover Contributions................. 4.01
4.04 Participant Contribution - Forfeitability.......... 4.02
4.05 Participant Contribution - Withdrawal/Distribution. 4.02
4.06 Participant Contribution - Accrued Benefit......... 4.02
ARTICLE V, TERMINATION OF SERVICE - PARTICIPANT VESTING
5.01 Normal Retirement Age.............................. 5.01
5.02 Participant Disability or Death.................... 5.01
5.03 Vesting Schedule................................... 5.01
5.04 Cash-Out Distributions to Partially-Vested
Participants/Restoration of Forfeited
Accrued Benefit.................................... 5.01
5.05 Segregated Account for Repaid Amount............... 5.03
5.06 Year of Service - Vesting.......................... 5.03
5.07 Break in Service - Vesting......................... 5.03
5.08 Included Years of Service - Vesting................ 5.03
5.09 Forfeiture Occurs.................................. 5.04
ARTICLE VI, TIME AND METHOD OF PAYMENT OF BENEFITS
6-01 Time of Payment of Accrued Benefit................. 6.01
6.02 Method of Payment of Accrued Benefit............... 6.03
6.03 Benefit Payment Elections.......................... 6.05
6.04 Annuity Distributions to Participants and
Surviving Spouses.................................. 6.06
6.05 Waiver Election - Qualified Joint and
Survivor Annuity................................... 6.08
6.06 Waiver Election - Preretirement Survivor Annuity... 6.09
6.07 Distributions Under Domestic Relations Orders...... 6.09
ARTICLE VII, EMPLOYER ADMINISTRATIVE PROVISIONS
7.01 Information to Committee........................... 7.01
7.02 No Liability....................................... 7.01
7.03 Indemnity of Plan Administrator and Committee...... 7.01
7.04 Employer Direction of Investment................... 7.01
7.05 Amendment to Vesting Schedule...................... 7.01
</TABLE>
<PAGE> 5
<TABLE>
<S> <C> <C>
ARTICLE VIII, PARTICIPANT ADMINISTRATIVE PROVISIONS
8.01 Beneficiary Designation............................ 8.01
8.02 No Beneficiary Designation/Death of Beneficiary.... 8.01
8.03 Personal Data to Committee......................... 8.02
8.04 Address for Notification........................... 8.02
8.05 Assignment of Alienation........................... 8.02
8.06 Notice of Change in Terms.......................... 8.02
8.07 Litigation Against the Trust....................... 8.02
8.08 Information Available.............................. 8.02
8.09 Appeal Procedure for Denial of Benefits............ 8.02
8.10 Participant Direction of Investment................ 8.03
ARTICLE IX, ADMINISTRATIVE COMMITTEE - DUTIES WITH RESPECT TO
PARTICIPANTS' ACCOUNTS
9.01 Members' Compensation, Expenses.................... 9.01
9.02 Term............................................... 9.01
9.03 Powers............................................. 9.01
9.04 General............................................ 9.01
9.05 Funding Policy..................................... 9.02
9.06 Manner of Action................................... 9.02
9.07 Authorized Representative.......................... 9.02
9.08 Interested Member.................................. 9.02
9.09 Individual Accounts................................ 9.02
9.10 Value of Participant's Accrued Benefit............. 9.02
9.11 Allocation and Distribution of Net Income
Gain or Loss....................................... 9.03
9.12 Individual Statement............................... 9.03
9.13 Account Charged.................................... 9.03
9.14 Unclaimed Account Procedure........................ 9.04
ARTICLE X, CUSTODIAN/TRUSTEE, POWERS AND DUTIES
10.01 Acceptance......................................... 10.01
10.02 Receipt of Contributions. ......................... 10.01
10.03 Investment Powers.................................. 10.01
10.04 Records and Statements............................. 10.06
10.05 Fees and Expenses from Fund........................ 10.06
10.06 Parties to Litigation.............................. 10.06
10.07 Professional Agents................................ 10.06
10.08 Distribution of Cash or Property................... 10.06
10.09 Distribution Directions............................ 10.06
10.10 Third Party/Multiple Trustees...................... 10.06
10.11 Resignation. ...................................... 10.07
10.12 Removal............................................ 10.07
10.13 Interim Duties and Successor Trustee............... 10.07
10.14 Valuation of Trust................................. 10.07
10.15 Trustee or Independent Fiduciary................... 10.07
10.16 Investment in Group Trust Fund..................... 10.08
10.17 Appointment of Ancillary Trustee or Independent
Fiduciary.......................................... 10.08
</TABLE>
<PAGE> 6
<TABLE>
<S> <C> <C>
ARTICLE XI, PROVISIONS RELATING TO INSURANCE AND INSURANCE COMPANY
11.01 Insurance Benefit.................................. 11.01
11.02 Limitation on Life Insurance Protection............ 11.01
11.03 Definitions........................................ 11.02
11.04 Dividend Plan...................................... 11.02
11.05 Insurance Company Not a Party to Agreement......... 11.02
11.06 Insurance Company Not Responsible for
Trustee's Actions.................................. 11.03
11.07 Insurance Company Reliance on Trustee's
Signature.......................................... 11.03
11.08 Acquittance........................................ 11.03
11.09 Duties of Insurance Company........................ 11.03
ARTICLE XII, MISCELLANEOUS
12.01 Evidence........................................... 12.01
12.02 No Responsibility for Employer Action.............. 12.01
12.03 Fiduciaries Not Insurers........................... 12.01
12.04 Waiver of Notice................................... 12.01
12.05 Successors......................................... 12.01
12.06 Word Usage......................................... 12.01
12.07 State Law.......................................... 12.01
12.08 Employer's Right to Participate.................... 12.02
12.09 Employment Not Guaranteed.......................... 12.02
ARTICLE XIII, EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION
13.01 Exclusive Benefit.................................. 13.01
13.02 Amendment By Employer.............................. 13.01
13.03 Amendment By Regional Prototype Plan Sponsor....... 13.02
13.04 Discontinuance..................................... 13.02
13.05 Full Vesting on Termination........................ 13.02
13.06 Merger/Direct Transfer............................. 13.02
13.07 Termination........................................ 13.03
ARTICLE XIV, CODE SECTION 401(k) ARRANGEMENTS
14.01 Application........................................ 14.01
14.02 Code Section 401(k) Arrangement................... 14.01
14.03 Definitions........................................ 14.02
14.04 Matching Contributions/Voluntary Contributions..... 14.03
14.05 Time of Payment of Contributions................... 14.04
14.06 Special Allocation Provisions - Deferral
Contributions, Matching Contributions and
Qualified Nonelective Contributions
(Also Called Basic Contributions).................. 14.04
14.07 Annual Elective Deferral Limitation................ 14.05
14.08 Actual Deferral Percentage ("ADP") Test............ 14.06
14.09 Nondiscrimination Rules for Employer Matching
Contributions and Participant Voluntary
Contributions...................................... 14.08
14.10 Multiple Use Limitation............................ 14.10
14.11 Distribution Restrictions.......................... 14.10
14.12 Special Allocation Rules........................... 14.11
</TABLE>
<PAGE> 7
ALPHABETICAL LISTING OF DEFINITIONS
<TABLE>
<CAPTION>
SECTION REFERENCE
PLAN DEFINITION (PAGE NUMBER)
<S> <C>
100% Limitation.............................................3.19(l) (3.10)
Account........................................................1.14 (1.05)
Accounting Date................................................1.20 (1.05)
Accrued Benefit................................................1.15 (1.05)
Actual Deferral Percentage ("ADP") Test......................14.08 (14.06)
Administrative Committee.......................................1.06 (1.02)
Adoption Agreement.............................................1.04 (1.01)
Annual Addition.............................................3.19(a) (3.08)
Average Contribution Percentage Test.........................14.09 (14.08)
Beneficiary....................................................1.11 (1.03)
Break in Service for Eligibility Purposes......................2.03 (2.01)
Break in Service for Vesting Purposes..........................5.07 (5.03)
Cash-out Distribution..........................................5.04 (5.01)
Code...........................................................1.25 (1.06)
Code Section 411(d)(6) Protected Benefits....................13.02 (13.01)
Compensation...................................................1.12 (1.03)
Compensation for Code Section 401(k) Purposes.............14.03(f) (14.02)
Compensation for Code Section 415 Purposes..................3.19(b) (3.08)
Compensation for Top Heavy Purposes......................1.33(B)(3) (1.10)
Contract(s)................................................11.03(c)(11.02)
Custodian Designation.....................................10.03[B] (10.03)
Deemed Cash-out Rule........................................5.04(C) (5.02)
Deferral Contributions....................................14.03(g) (14.02)
Tax Deferred Account.........................................14.06 (14.04)
Defined Benefit Plan........................................3.19(i) (3.09)
Defined Benefit Plan Fraction...............................3.19(j) (3.09)
Defined Contribution Plan...................................3.19(h) (3.08)
Defined Contribution Plan Fraction..........................3.19(k) (3.10)
Determination Date.......................................1.33(B)(7) (1.10)
Disability.....................................................1.28 (1.07)
Distribution Date..............................................6.01 (6.01)
Distribution Restrictions.................................14.03(m) (14.03)
Earned Income..................................................1.13 (1.05)
Effective Date.................................................1.18 (1.05)
Elective Deferrals........................................14.03(h) (14.02)
Elective Transfer.........................................13.06(A) (13.02)
Eligible Employee.........................................14.03(c) (14.02)
Employee.......................................................1.07 (1.02)
Employee Contributions....................................14.03(n) (14.03)
Employer.......................................................1.01 (1.01)
Employer Contribution Account................................14.06 (14.04)
Employer for Code Section 415 Purposes......................3.19(c) (3.08)
Employer for Top Heavy Purposes..........................1.33(B)(6) (1.10)
Employment Commencement Date...................................2.02 (2.01)
ERISA..........................................................1.24 (1.06)
</TABLE>
<PAGE> 8
<TABLE>
<S> <C>
Excess Aggregate Contributions............................14.09(D) (14.09)
Excess Amount...............................................3.19(d) (3.08)
Excess Contributions......................................14.08(E) (14.07)
Exempt Participant.............................................8.01 (8.01)
Forfeiture Break in Service....................................5.08 (5.03)
Group Trust Fund.............................................10.16 (10.08)
Hardship.................................................6.01(A)(4) (6.02)
Hardship for Code Section 401(k) Purposes....................14.11 (14.10)
Highly Compensated Employee....................................1.09 (1.02)
Highly Compensated Group..................................14.03(d) (14.02)
Hour of Service................................................1.27 (1.06)
Incidental Insurance Benefits................................11.01 (11.01)
Insurable Participant.....................................11.03(d) (11.02)
Investment Manager..........................................9.04(i) (9.01)
Issuing Insurance Company.................................11.03(b) (11.02)
Joint and Survivor Annuity..................................6.04(A) (6.06)
Key Employee.............................................1.33(B)(1) (1.10)
Leased Employees...............................................1.31 (1.08)
Limitation Year.........................1.17 and 3.19(e) (1.05) and (3.08)
Loan Policy.................................................9.04(A) (9.02)
Mandatory Contributions......................................14.04 (14.03)
Mandatory Contributions Account..............................14.04 (14.03)
Master or Prototype Plan....................................3.19(f) (3.08)
Matching Contributions....................................14.03(i) (14.02)
Maximum Permissible Amount..................................3.19(g) (3.08)
Minimum Distribution Incidental Benefit (MDIB)..............6.02(A) (6.03)
Multiple Use Limitation......................................14.10 (14.10)
Named Fiduciary...........................................10.03[D] (10.05)
Nonelective (Also Called Profit
Sharing) Contributions..................................14.03(j) (14.03)
Nonforfeitable.................................................1.16 (1.05)
Nonhighly Compensated Employee............................14.03(b) (14.02)
Nonhighly Compensated Group...............................14.03(e) (14.02)
Non-Key Employee.........................................1.33(B)(2) (1.10)
Nontransferable Annuity........................................1.23 (1.05)
Normal Retirement Age..........................................5.01 (5.01)
Owner-Employee.................................................1.08 (1.02)
Paired Plans...................................................1.34 (1.11)
Participant....................................................1.10 (1.03)
Participant Deductible Contributions...........................4.02 (4.01)
Participant Forfeiture.........................................3.05 (3.03)
Participant Loans.........................................10.03[E] (10.05)
Participant Nondeductible (Also Called Voluntary)
Contributions................................................4.01 (4.01)
Permissive Aggregation Group.............................1.33(B)(5) (1.10)
Plan...........................................................1.03 (1.01)
Plan Administrator.............................................1.05 (1.02)
Plan Entry Date................................................1.19 (1.05)
Plan Year......................................................1.17 (1.05)
Policy.....................................................11.03(a)(11.02)
Predecessor Employer...........................................1.29 (1.07)
Preretirement Survivor Annuity...............................6.04(B)(6.07)
Qualified Domestic Relations Order.............................6.07 (6.09)
Qualified Matching Contributions...........................14.03(k)(14.03)
</TABLE>
<PAGE> 9
<TABLE>
<S> <C>
Qualified Nonelective (Also Called Basic)
Contributions...........................................14.03(l) (14.03)
Qualifying Employer Real Property.........................10.03[F] (10.05)
Qualifying Employer Securities............................10.03[F] (10.05)
Related Employers..............................................1.30 (1.07)
Required Aggregation Group...............................1.33(B)(4) (1.10)
Required Beginning Date.....................................6.01(B) (6.02)
Rollover Contributions.........................................4.03 (4.01)
Self-Employed Individual.......................................1.08 (1.02)
Service........................................................1.26 (1.06)
Term Life Insurance Contract.................................11.03 (11.02)
Top Heavy Minimum Allocation................................3.04(B) (3.01)
Top Heavy Ratio................................................1.33 (1.09)
Trust..........................................................1.21 (1.05)
Trustee........................................................1.02 (1.01)
Trustee Designation.......................................10.03[A] (10.01)
Trust Fund.....................................................1.22 (1.05)
Weighted Average Allocation Method...........................14.12 (14.11)
Year of Service for Eligibility Purposes.......................2.02 (2.01)
Year of Service for Vesting Purposes...........................5.06 (5.03)
</TABLE>
<PAGE> 10
HUTCHISON AND ASSOCIATES, INC.
DEFINED CONTRIBUTION PROTOTYPE PLAN AND TRUST AGREEMENT
BASIC PLAN DOCUMENT #01
Hutchison and Associates, Inc., in its capacity as Regional 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.
1.01
<PAGE> 11
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 responsibility for compliance with
the reporting and disclosure rules under ERISA as respects this Agreement.
1.06 "Administrative Committee" means the Employer's Administrative
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 413(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 Administrative Committee
will treat the highest paid officer as satisfying clause (d) for that year.
1.02
<PAGE> 12
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
Administrative 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 Administrative
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 Administrative 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:
(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
1.03
<PAGE> 13
(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 Administrative 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 Administrative 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 Administrative Committee must determine the integration 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 Administrative
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.
1.04
<PAGE> 14
(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 Administrative Committee will determine net earnings without regard
to items excluded from gross income and the deductions allocable to those items.
The Administrative 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 Administrative
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.
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 Administrative 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 Nontrasferable Annuity.
1.05
<PAGE> 15
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 Administrative 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 Administrative Committee credits Hours of Service
under this paragraph (b) to the Employee for the computation period(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 Administrative 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 Administrative Committee credits Hours of Service under this
paragraph (c) in accordance with the rules of paragraphs (b) and (c) of
Labor Reg. Section 2530.200b-2, which the Plan, by this reference,
specifically incorporates in full within this paragraph (c).
The Administrative 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
Administrative Committee is measuring an Employee's Hours of Service. The
Administrative 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 Administrative 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 Administrative Committee would credit the
Employee with at least one Hour of Service, the Administrative 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.
1.06
<PAGE> 16
(B) MATERNITY/PATERNITY LEAVE. Solely for purposes of determining whether the
Employee incurs a Break in Service under any provision of this Plan, the
Administrative Committee must credit Hours of Service during Employee's unpaid
absence period due to maternity or paternity leave. The Administrative 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 Administrative
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 Administrative 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 Administrative Committee will credit only the
number (not exceeding 501) of Hours of Service necessary to prevent an
Employee's Break in Service. The Administrative 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 Administrative 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 Administrative 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 Administrative Committee determines the
Participant satisfies the definition of disability. The Administrative Committee
may require a Participant to submit to a physical examination in order to
confirm disability. The Administrative 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.
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 11
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 111,
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.
1.07
<PAGE> 17
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 a Participating Employer. If the Employer's
Plan 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 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 Administrative 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 an 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
0wner-Employees under this Plan, or if an
1.08
<PAGE> 18
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 Administrative
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 Administrative Committee
must calculate the top 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 Administrative 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 Administrative 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 Administrative Committee must take into
account distributions to a Participant, the Administrative 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 Administrative 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 Administrative 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
41l(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 Administrative 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
Administrative Committee must value the Accrued Benefits in the aggregated plan
as of the most recent valuation date falling within the twelve-month period
ending with 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 Administrative committee will calculate the top heavy ration
with reference to the Determination Dates that fall within the same calendar
year.
1.09
<PAGE> 19
(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 Administrative
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 Administrative Committee will need to determine whether a deemed
top heavy Plan's 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: (1) 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 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 Administrative 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 (11) 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 Administrative 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.
1.10
<PAGE> 20
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.
* * * * * * * * * *
1.11
<PAGE> 21
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
2.01
<PAGE> 22
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 share fully
in Trust Fund allocations under Section 9.11. Furthermore, 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 reemployment, 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 Administrative Committee
must treat the Participant as an Excluded Employee during the period such a
Participant is subject to the Adoption Agreement exclusion. The Administrative
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
participate in the Plan by filing his election in writing with the Plan
Administrator not later than the time specified in 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 Employer's Adoption Agreement. An Employee or
Participant who re-elects to participate may again
2.02
<PAGE> 23
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 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.
* * * * * * * * * * * *
2.03
<PAGE> 24
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.
(1) TOP HEAVY 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.
3.01
<PAGE> 25
(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 Administrative 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), "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.
3.02
<PAGE> 26
(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 Administrative
Committee will consider the Paired Plans as a single Plan to determine a
Participant's contribution rate and to determine whether the Plans satisfy this
top heavy minimum allocation requirement. To determine a Participant's
contribution rate under a Nonstandardized Plan, the Administrative 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 Administrative 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
tile Participant's contribution rate to the top heavy minimum allocation. The
Administrative 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 Administrative Committee will allocated the annual
Employer contributions (and Participant forfeitures) under the Plan solely in
accordance with the allocation method selected under Adoption Agreement
Section 3.04.
3.05 FORFEITURE ALLOCATION. The amount of a Participant's Accrued Benefit
forfeited under the Plan is a Participant forfeiture. The Administrative
committee will allocate Participant forfeitures in the manner specified by the
Employer in its Adoption Agreement. The Administrative Committee will continue
to hold the undistributed, non-vested portion of a terminated Participant's
Accrued Benefit in his Account soley 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 this Accrued Benefit.
3.06 ACCRUAL OF BENEFIT. The Administrative 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.
3.03
<PAGE> 27
(A) COMPENSATION TAKEN INTO ACCOUNT. The Employer must specify in its Adoption
Agreement the Compensation the Administrative 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 Administrative 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 Administrative 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 Administrative 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 Administrative 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 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.
3.04
<PAGE> 28
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 Administrative 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 Administrative 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
Administrative 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
Employees 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 Administrative 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 apply 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 Administrative 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 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 Administrative 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 Administrative 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.
3.05
<PAGE> 29
3.08 Prior to the determination of the Participant's actual Compensation for
a Limitation Year, the Administrative Committee may determine the Maximum
Permissible Amount on the basis of the Participant's estimated annual
Compensation for such Limitation Year. The Administrative Committee must make
this determination on a reasonable and uniform basis for all Participants
similarly situated. The Administrative 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 Administrative 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 Administrative Committee will dispose of such Excess Amount
as follows:
(a) The Administrative Committee will return any voluntary 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 Administrative 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 Administrative Committee will hold the Excess
Amount unallocated in a suspense account. The Administrative 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 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 Administrative Committee will not distribute any Excess Amount(s) to
Participants or to former Participants.
[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 Administrative 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
3.06
<PAGE> 30
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
Administrative 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 Administrative 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 Administrative 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 Administrative Committee will make
this determination on a reasonable and uniform basis for all Participants
similarly situated. The Administrative 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 Administrative 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
plans result in an Excess Amount, such Excess Amount will consist of the Amounts
last allocated. The Administrative 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 Administrative 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 Administrative Committee will dispose of any Excess Amounts
attributed to this Plan as provided in Section 3.10.
[Note: Section 3.17 applies only to Participants who, in addition 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.]
3.17 SPECIAL ALLOCATION LIMITATION. The amount of Annual Additions which the
Administrative 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 Section 416 after taking
into account the existence (or prior maintenance) of the defined benefit plan.
3.07
<PAGE> 31
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 Section 401(k), excess aggregate contributions described in Code Section
401(m) and excess deferrals described in Code Section 402(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 Section 415(l)(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 Section 419A(d)(3)) under a welfare benefit fund
(as defined in Code Section 419(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 111, the Administrative Committee will determine related
employers described in Section 1.30 by modifying Code Sections 414(b) and
(c) in accordance with Code Section 415(h).
(d) "Excess Amount" - The excess of the Participant's Annual Additions for the
Limitation Year over the Maximum Permissible 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 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
Section 415(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 Administrative 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 Administrative Committee must
treat all defined contribution plans (whether or rot terminated) maintained by
the Employer as a single plan. Solely for purposes of the limitations of Part 2
of this Article III, the Administrative Committee will treat employee
contributions made to a defined
3.08
<PAGE> 32
benefit plan maintained by the Employer as a separate defined contribution plan.
The Administrative Committee also will treat as a defined contribution plan an
individual medical account (as defined in Code Section 415(l)(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 Section 419(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
Section 419A(d)(3)).
(i)"Defined benefit plan" - A retirement plan which does not provide for
individual accounts for Employer contributions. The Administrative 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 Administrative Committee
will make any adjustment required under Code Section 415(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 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 Section 415 as in effect at the end of the 1986 Limitation Year.
3.09
<PAGE> 33
(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 Section 415(c)(1)(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
Administrative 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 Section 415 for Limitation Years
beginning prior to January 1, 1987, the Administrative 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
Administrative 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 Administrative
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 Administrative
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 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 Section 416(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
Section 416(h)(2).
* * * * * * * *
3.10
<PAGE> 34
ARTICLE IV
PARTICIPANT CONTRIBUTIONS
4.01 PARTICIPANT VOLUNTARY CONTRIBUTIONS. This Plan does not permit
Participant voluntary contributions (which are nondeductible employee
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 voluntary 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 voluntary 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 Administrative Committee must maintain a separate accounting for
the Participant's Accrued Benefit attributable to DECs, including DECs which are
part of a rollover contribution described in Section 4.03. The Administrative
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 Administrative 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
Administrative 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 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 Administrative 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.
4.01
<PAGE> 35
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 Administrative
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 Administrative 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 Administrative 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).
* * * * * * * * *
4-02
<PAGE> 36
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 Administrative Committee will
establish a separate Account for the Participant's Accrued Benefit. At any
relevant time following the distribution, the Administrative 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 Administrative Committee, subject to the
5.01
<PAGE> 37
conditions of this Section 5.04(A), must restore his Accrued Benefit
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 Date, 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
Administrative 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 Administrative 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 Administrative
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 Administrative Committee, to the
extent necessary, will allocate to the Participant's Account:
(1) First, the amount, if any, of Participant forfeitures the Administrative
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
Administrative 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 Administrative Committee to make the
required restoration. If, for a particular Plan Year, the Administrative
Committee must restore the Accrued Benefit of more than one re-employed
Participant, then the Administrative 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 Administrative 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. For this purpose, a Participant's vested Account shall not include
accumulated deductible employee contributions within the meaning of Code Section
72(o)(5)(B) for Plan Years prior to January 1, 1989. 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
5.02
<PAGE> 38
Administrative Committee will apply the deemed cash-out 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 Administrative 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 Administrative 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 Administrative 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 Administrative 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 Administrative 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 Administrative 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 no 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 falls 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 loan takes into 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.
5.03
<PAGE> 39
The Plan does not apply the Break in Service rule under Code
Section 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 Administrative 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.
5.04
<PAGE> 40
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 Administrative 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 Administrative 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
Administrative 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
Administrative 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 Administrative 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 Administrative 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 requirements of this Article VI and subject to the applicable mandatory
commencement dates described in Paragraphs (1) and (2).
6.01
<PAGE> 41
(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 from his Nonforfeitable Accrued 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
Administrative 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 Administrative 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 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 Administrative 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 Administrative 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 Administrative 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 Administrative Committee receives notification of or otherwise confirms the
Participant's death.
6.02
<PAGE> 42
(2) DECEASED PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT EXCEEDS
$3,500. The Administrative 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 Administrative 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 Administrative 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 Administrative
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 Administrative
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
Administrative 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 Administrative 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
6.03
<PAGE> 43
computing a minimum distribution, the Administrative Committee must use the
unisex life expectancy multiples under Treas. Reg. Section 1.72-9. The
Administrative 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
redetermining the applicable life expectancy. However, the Administrative
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
Administrative Committee direction) may not provide more than 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
Administrative 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 Administrative 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 Administrative 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 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
Beneficiary's life expectancy. The Administrative 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
Administrative Committee must use the unisex life expectancy multiples under
Treas. Reg.
6.04
<PAGE> 44
Section 1.72-9 for purposes of applying this paragraph. The Administrative
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 Administrative
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
Administrative 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 then 30 days, before the Participant's annuity starting date, the
Administrative 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 Administrative 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 filing his
election with the Administrative 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
Administrative 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
with the Trustee. The Trustee
6.05
<PAGE> 45
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. If the annuity and spousal consent
requirements of Section 6.04 apply to a Participant, and if the present value
of the Participant's Nonforfeitable Accrued Benefit exceeds $3,500, any
distribution to the Participant prior to Separation from Service may be made
only if made in accordance with the requirements of Section 6.04.
(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 Administrative 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 Administrative 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 designation. 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 Administrative 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 Administrative 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 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 Administrative 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
6.06
<PAGE> 46
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 Administrative 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,
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
Administrative 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
Administrative Committee must direct the Trustee to distribute the preretirement
survivor 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 Administrative 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 Administrative 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 Administrative 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 Administrative 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
6.07
<PAGE> 47
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 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 Administrative 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 the 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 alternate 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 consents 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 Administrative Committee will accept as valid a waiver election
which does not satisfy the spousal consent requirement if the Administrative
Committee establishes the Participant does not have a spouse, the Administrative
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
Administrative
6.08
<PAGE> 48
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
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
Administrative 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 Administrative 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 Administrative 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
Administrative 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 consents 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.
6.09
<PAGE> 49
The Administrative Committee must establish reasonable procedures to
determine the qualified status of a domestic relations order. Upon receiving a
domestic relations order, the Administrative 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 Administrative Committee must determine the
qualified status of the order and must notify the Participant and each alternate
payee, in writing, of its determination. The Administrative Committee must
provide notice under this paragraph by 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 Administrative Committee is making its determination of
the qualified status of the domestic relations order, the Administrative
Committee must make a separate accounting of the amounts payable. If the
Administrative 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 Administrative Committee will direct the Trustee to distribute
the payable amounts in accordance with the order. If the Administrative
Committee does not make its determination of the qualified status of the order
within the 18-month determination period, the Administrative 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 Administrative 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 Administrative 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).
* * * * * * * * * *
6.10
<PAGE> 50
ARTICLE VII
EMPLOYER ADMINISTRATIVE PROVISIONS
7.01 INFORMATION TO COMMITTEE. The Employer must supply current
information to the Administrative 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 Administrative Committee considers necessary. The
Employer's records as to the current information the Employer furnishes to the
Administrative 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 Administrative Committee (unless the
Employer is the Administrative 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 Administrative
Committee, and each of them, from and against any and all loss resulting from
liability to which the Plan Administrator and the Administrative Committee, or
the members of the Administrative 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 Administrative
Committee member from any liability he may have under ERISA for breach of a
fiduciary duty. Furthermore, the Plan Administrator and the Administrative
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 Administrative 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. And 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.
7.01
<PAGE> 51
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 Administrative 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 Administrative 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 Administrative 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.
* * * * * * * * * *
7.02
<PAGE> 52
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
Administrative Committee will prescribe the form for the written designation of
Beneficiary and, upon the Participant's filing the form with the Administrative
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 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 Administrative Committee will direct the
Trustee as to the method and to whom the Trustee will make payment under this
Section 8.02.
8.01
<PAGE> 53
8.03 PERSONAL DATA TO COMMITTEE. Each Participant and each Beneficiary of a
deceased Participant must furnish to the Administrative Committee such evidence,
data or information as the Administrative 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 Administrative Committee, provided
the Administrative 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 Administrative 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 Administrative
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 this 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 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 Administrative 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 Administrative Committee must render a decision on the claim 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 Administrative 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 provisions on which the Administrative
Committee based its denial;
8.02
<PAGE> 54
(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 Administrative 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 Administrative Committee in writing within the
75-day period will render the Administrative Committee's determination final,
binding and conclusive.
If the Claimant should appeal to the Administrative 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
Administrative 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 Administrative 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
Administrative 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 Administrative Committee and the name and address of the
Administrative 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 Administrative
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 Administrative 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 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.
* * * * * * * * * * * * * * *
8.03
<PAGE> 55
ARTICLE IX
ADMINISTRATIVE COMMITTEE - DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUNTS
9.01 MEMBERS' COMPENSATION, EXPENSES. The Employer must appoint an
Administrative 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 Administrative Committee appointment, the Plan
Administrator assumes the powers, duties and responsibilities of the
Administrative Committee. The members of the Administrative Committee will serve
without compensation for services as such, but the Employer will pay all
expenses of the Administrative Committee, except to the extent the Trust
properly pays for such expenses, pursuant to Article X.
9.02 TERM. Each member of the Administrative Committee serves until the
appointment of his successor.
9.03 POWERS. In case of a vacancy in the membership of the Administrative
Committee, the remaining members of the Administrative Committee may exercise
any and all of the powers, authority, duties and discretion conferred upon the
Administrative Committee pending the filling of the vacancy.
9.04 GENERAL. The Administrative Committee has the following powers and
duties:
(a) To select a Secretary, who need not be a member of the Administrative
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;
(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 Administrative Committee must exercise all of its powers, duties and
discretion under the Plan in a uniform and nondiscriminatory manner.
9.01
<PAGE> 56
(A) LOAN POLICY. If the Administrative 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 Administrative 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 Administrative 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 Administrative 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 Administrative 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 Administrative 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 Administrative Committee.
9.09 INDIVIDUAL ACCOUNTS. The Administrative 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 Administrative 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 Administrative 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 Administrative 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 Administrative 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 that proportion 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.
9.02
<PAGE> 57
For 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 Administrative
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
Administrative 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 Administrative 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 Administrative
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
Administrative Committee must reduce a segregated Account for any forfeiture
arising under Section 5.09 after the Administrative 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 applies solely to the allocation of net income, gain or loss
of the Trust. The Administrative 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
Administrative Committee, has the right to inspect the records reflecting the
Account of any other Participant.
9.13 ACCOUNT CHARGED. The Administrative Committee will charge a
Participant's Account for all distributions made from that Account to the
Participant, to his Beneficiary or to an alternate payee. The Administrative
Committee also will charge a Participant's Account for any administrative
expenses Incurred by the Plan directly related to that Account.
9-03
<PAGE> 58
9.14 UNCLAIMED ACCOUNT PROCEDURE. The Plan does not require either the
Trustee or the Administrative Committee to search for, or to ascertain the
whereabouts of, any Participant or Beneficiary. At the time the Participant's or
Beneficiary's benefit becomes distributable under Article VI, the Administrative
Committee, by certified or registered mail addressed to his last known address
of record with the Administrative Committee or the Employer, must notify any
Participant, or Beneficiary, that he is entitled to a distribution 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 Administrative Committee within 6 months from the date of
mailing of the notice, the Administrative 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 Administrative 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 Administrative
Committee must restore 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 Administrative 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 Administrative 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 Administrative
Committee to make the required restoration. The Administrative 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 Administrative 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.
***************
9.04
<PAGE> 59
ARTICLE X
CUSTODIAN/TRUSTEE, 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 Administrative
Committee direction of investment. The Trustee must coordinate its investment
policy with Plan financial needs as communicated to it by the Administrative
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 (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.
10.01
<PAGE> 60
(e) To credit and distribute the Trust as directed by the Administrative
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 Administrative Committee
for any payment or distribution made by it in good faith on the order or
direction of the Administrative 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.
(1) 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 Administrative
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 Administrative Committee, except as to any act or
transaction concerning which the Employer, the Plan Administrator or the
Administrative 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.
10.02
<PAGE> 61
[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 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 Administrative 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 of 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 Administrative
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
Administrative Committee for any payment or distribution made by it in
good faith on the order or directing of the Administrative Committee.
(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.
10.03
<PAGE> 62
(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 Administrative 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 Administrative
Committee, except as to any act or transaction concerning which the
Named Fiduciary, the Employer, the Plan Administrator or the
Administrative 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.
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 Employee'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].
10.04
<PAGE> 63
[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 Administrative
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 proprietor, 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 Administrative
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
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.
10.05
<PAGE> 64
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
Administrative 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 Administrative Committee may specify in writing. The Trustee
must furnish the Plan Administrator or Administrative Committee with whatever
information relating to the Trust Fund the Plan Administrator or Administrative
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 Administrative
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 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
Administrative Committee and then dispose of the payment in accordance with the
subsequent direction of the Administrative 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.
10.06
<PAGE> 65
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 Administrative 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 Administrative 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 Administrative Committee, a successor
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 Administrative
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 Administrative 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 Administrative 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.
10.07
<PAGE> 66
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.
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.
* * * * * * * * * * * * * * *
10.08
<PAGE> 67
ARTICLE XI
PROVISIONS RELATING TO INSURANCE AND INSURANCE COMPANY
11.01 INSURANCE BENEFIT. The Employer may elect to provide incidental life
insurance benefits for insurable 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 of 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:
(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
Administrative Committee directs;
11.01
<PAGE> 68
(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 Administrative 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 Administrative 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 this 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.
11.04 DIVIDEND PLAN. The dividend plan is premium reduction unless the
Administrative 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.
11.02
<PAGE> 69
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 this Article XI are not applicable, and the Plan may
not invest in insurance contracts, if a Custodian signatory to the Adoption
Agreement is a bank which has not acquired trust powers from its governing state
banking authority.
* * * * * * * * * * * * * * * *
11.03
<PAGE> 70
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
Administrative 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
Administrative 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
Administrative 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 Administrative 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 Directors or its designate.
12.03 FIDUCIARIES NOT INSURERS. The Trustee, the Administrative 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 Administrative 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 Administrative
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 this Agreement except to the extent superseded by Federal law.
12.01
<PAGE> 71
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 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, subsequent amendments to this
Prototype Plan by 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.
* * * * * * * * * * * * * * * *
12.02
<PAGE> 72
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 administrative 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 Administrative
Committee without the written consent of the affected Trustee, the Plan
Administrator or the affected member of the Administrative 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
Administrative Committee must disregard an amendment to the extent application
of the amendment would fail to satisfy this paragraph. If the Administrative
Committee must disregard an amendment because the amendment would violate clause
(1) or clause (2), the Administrative Committee must maintain a schedule of the
early retirement option or other optional forms of benefit the Plan must
continue for the affected Participants.
13.01
<PAGE> 73
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, consolidation
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
Administrative 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.
(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
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
13.02
<PAGE> 74
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 Administrative 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 the 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 Administrative 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).
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 Administrative Committee will direct the Trustee to distribute each
Participant's Nonforfeitable Accrued Benefit, in lump sum, as soon as
administratively practicable after the
13.03
<PAGE> 75
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 Administrative Committee has distributed all of the benefits under the Plan.
On each valuation date, the Administrative 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.
* * * * * * * * * * * * * * * *
13.04
<PAGE> 76
ARTICLE XIV
CODE SECTION 401(k) 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 Administrative 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 1.12) 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 Administrative 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 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.
14.01
<PAGE> 77
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 voluntary
contributions, irrespective of whether he actually makes voluntary
contributions. An Employee continues to be an Eligible Employee during a period
the Plan suspends the Employee's night to make elective deferrals or voluntary
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 complete an Employee's ADP or ACP, the Administrative 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 Tax Deferred 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 Tax
Deferred Contributions, the terms "deferral contributions" and "elective
deferrals" have the same meaning.
(h) "Elective deferrals" are all Tax Deferred Contributions and that portion of
any Cash or Deferred Contribution which the Employer contributes to the Trust at
the election of an 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
designated as voluntary 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.
14.02
<PAGE> 78
(j) "Nonelective contributions" (also called profit sharing 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" (which are also called "basic
contributions" in the Plan) 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 Basic Contributions
Account under the Plan automatically satisfy the definition of qualified
nonelective contributions (also called basic 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),
(4) or (5), if made after March 31, 1988, 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 voluntary
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 voluntary contributions.
(A) MANDATORY CONTRIBUTIONS. Any Participant voluntary contributions eligible
for matching contributions arc mandatory contributions. The Administrative
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.
14.03
<PAGE> 79
14.05 TIME OF PAYMENT CONTRIBUTIONS. The Employer must make Tax Deferred
Contributions to the Trust with an administratively reasonable period of time
after withholding the corresponding Compensation from the Participant.
Furthermore, the Employer must make Tax Deferred Contributions, Cash or Deferred
Contributions, Employer matching contributions (including qualified Employer
matching contributions) and basic contributions no later than the time
prescribed by the Code or by applicable Treasury regulations. Tax Deferred
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 (ALSO CALLED BASIC
CONTRIBUTIONS). To make allocations under the Plan, the Administrative Committee
must establish a Tax Deferred Account, a Qualified Matching Contributions
Account, a Regular Matching Contributions Account, a Basic Contributions Account
and an Employer Contributions Account for each Participant.
(A) DEFERRAL CONTRIBUTIONS. The Administrative Committee will allocate to each
Participant's Tax Deferred Account the amount of Deferral Contributions the
Employer makes to the Trust on behalf of the Participant. The Administrative
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 tax deferred contributions.
(B) MATCHING CONTRIBUTIONS. The Employer must specify in its Adoption Agreement
whether the Administrative Committee will allocate matching contributions to the
Qualified Matching Contributions Account or to the Regular Matching
Contributions Account of each Participant. The Administrative 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
matching contributions.
(1) To the extent the Employer makes matching contributions under a fixed
matching contribution formula, the Administrative 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 voluntary 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 Administrative 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 Administrative 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 voluntary contributions eligible for an allocation of
matching contributions, as specified in Section 3.01 of the Employer's
Adoption Agreement.
14.04
<PAGE> 80
If the matching contribution formula applies both to deferral
contributions and to participant voluntary 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 Administrative Committee
will compute a Participant's ACP under 14.09 by disregarding the forfeiture.
(C) BASIC CONTRIBUTIONS. If the employer, at the time of contribution,
designates a contribution to be a basic contribution for the Plan Year, the
Administrative committee will allocate that basic contribution to the Basic
Contributions Account of each Participant eligible for all allocation of that
designated contribution, as specified in Section 3.04 of the Employer's Adoption
Agreement. The Administrative 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 Administrative 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.
(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 basic contributions, the Administrative 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
Administrative Committee may treat nonelective contributions allocated under
this paragraph as basic contributions, if the contributions otherwise satisfy
the definition of basic 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 Administrative Committee determines an Employee's elective
deferrals already contributed to the Plan for a calendar year exceed the 402(g)
limitation, the Administrative 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
Administrative 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 Administrative 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.
14.05
<PAGE> 81
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 Administrative 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 Administrative
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 Administrative Committee must determine whether the Plan's Code Section
401(k) arrangement satisfies either the following ADP tests:
(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
singly 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 Administrative Committee, in a manner consistent with Treasury
regulations, may determine the ADPs of the Eligible Employees by taking into
account basic contributions or qualified matching contributions, or both, made
to this Plan or to any other qualified Plan maintained by the Employer. The
Administrative Committee may not include basic contributions in the ADP test
unless the allocation of nonelective contributions is nondiscriminatory when
the Administrative Committee takes into account all nonelective contributions
(including the basic contributions) and also when the Administrative 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 Administrative
Committee may not include in the ADP test any basic contributions or qualified
matching contributions under another qualified plan unless that plan has the
same plan year as this Plan. The Administrative Committee must maintain
records to demonstrate compliance with the ADP test, including the extent to
which the Plan used basic contributions or qualified matching contributions to
satisfy the test.
14.06
<PAGE> 82
For Plan Years beginning prior to January 1, 1992, the Administrative
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
Administrative Committee will determine the combined deferral contributions on
the basis of the plan years ending in the same calendar year.
(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 Administrative 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 Administrative Committee has elected to include qualified matching
contributions in the average ADP, the Administrative 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 Administrative Committee will
treat the remaining portion of his excess contributions as attributable to basic
contributions. The Administrative 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 Administrative 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 Administrative Committee will distribute to
each Highly Compensated Employee his respective share of the excess
contributions. The Administrative 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 Administrative 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 Administrative 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.
14.07
<PAGE> 83
(F) ALLOCABLE INCOME. To determine the amount of the corrective distribution
required under this Section 14.08, the Administrative 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 Administrative 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 VOLUNTARY CONTRIBUTIONS. For Plan Years beginning
after December 31, 1986, the Administrative Committee must determine whether
the annual Employer matching contributions (other than qualified matching
contributions used in the ADP under 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 Administrative Committee, in a manner consistent with Treasury
regulations, may determine the contribution percentages of the Eligible
Employees by taking into account basic contributions (other than basic
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 Administrative Committee may not include basic contributions in
the ACP test unless the allocation of nonelective contributions is
nondiscriminatory when the Administrative Committee takes into account all
nonelective contributions (including the basic contributions) and also when the
Administrative 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 Administrative 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 Administrative Committee may not include in the ACP test any basic
contributions or elective deferrals under another qualified plan unless that
plan has the same plan year as this Plan. The Administrative Committee must
maintain records to demonstrate compliance with the ACP test, including the
extent to which the Plan used basic 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.
14.08
<PAGE> 84
(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
Administrative Committee will determine the combined aggregate contributions on
the basis of the plan years ending in the same calendar year.
(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 different plan years and, for Plan Years beginning after December 31, 1988,
the Administrative 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) DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS. The Administrative Committee
will determine excess aggregate contributions after determining excess deferrals
under Section 14.07 and excess contributions under Section 14.08. If the
Administrative 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 Administrative Committee will distribute to each Highly
Compensated Employee his respective share of the excess aggregate contributions.
The Administrative 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 Administrative 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
Administrative 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 Administrative 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
Administrative 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 Administrative
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 not mandatory 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 deferral contributions relating to
those matching contributions which the Administrative 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 matching contributions allocated on the
basis of those mandatory contributions; and (5) last to basic contributions used
in the ACP test.
14.09
<PAGE> 85
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 Administrative
Committee will distribute only the vested portion and forfeit the nonvested
portion. The 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 Administrative 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 Administrative 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
Administrative Committee determines the Plan has failed to satisfy the multiple
use limitation, the Administrative Committee will correct the failure by
treating the excess amount as excess contributions under Section 14.09 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 of the Adoption Agreement the distribution events permitted under the
Plan. The distribution events applicable to the Participant's Tax Deferred
Account, Basic Contributions Account and Qualified Matching Contributions
Account must satisfy the distribution restrictions described in paragraph (m)
of Section 14.03.
(A) HARDSHIP DISTRIBUTIONS FROM TAX DEFERRED ACCOUNT. The Employer must elect
in Adoption Agreement Section 6.03 whether a Participant may receive hardship
distributions from his Tax Deferred Account prior to the Participant's
Separation from Service. Hardship distributions 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 Basic Contributions
Account or Qualified Matching Contributions Account.
14.10
<PAGE> 86
(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; (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
amount 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 basic 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 amounts
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 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 Administrative Committee will return the Excess Amount (as adjusted
for allocable income) attributable to the elective deferrals. The Administrative
Committee will make this distribution before taking any corrective steps
pursuant to Section 3.10 or to Section 3.16. The Administrative 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 tax deferred contributions, if the Plan accepts Employee
contributions, pursuant to Adoption Agreement Section 4.01, of 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:
14.11
<PAGE> 87
(a) A "segregated Account" direction means the Administrative 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 Administrative 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.
14.12
<PAGE> 88
ARTICLE A
APPENDIX TO BASIC PLAN DOCUMENT
This Article is necessary to comply with the Unemployment Compensation
Amendments of 1992 and is an integral part of the basic plan document.
A-1. APPLICATION. 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 401(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.
<PAGE> 89
ARTICLE B
APPENDIX TO BASIC PLAN DOCUMENT
This Article is necessary to comply with the Omnibus Budget Reconciliation
Act of 1993 (0BRA '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.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-XXXXX) pertaining to the Summit Care Corporation 401(k) Savings,
effective as of July 1, 1997 of our report dated August 19, 1996, with respect
to the consolidated financial statements and schedule of Summit Care Corporation
included in its Annual Report (Form 10-K) for the year ended June 30, 1996,
filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Los Angeles, California
June 19, 1997
