As filed with the Securities and Exchange Commission on January 20, 1998
Registration No. 333-_______
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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VTEL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 74-2415696
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
108 Wild Basin Road
Austin, Texas 78746
(Address of principal executive offices) (Zip Code)
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VTEL Corporation
401(k) Plan
(Full title of the plan)
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RODNEY S. BOND
Chief Financial Officer
VTEL Corporation
108 Wild Basin Road
Austin, Texas 78746
(Name and address of agent for service)
(512) 314-2700
(Telephone number including area code, of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==========================================================================================================================
Amount Proposed maximum Proposed maximum
Title of securities to be offering price aggregate Amount of
to be registered registered(1) per share(2)(3) offering price(2)(3) registration fee
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Common Stock, par value $.01 per share...... 900,000 shares $6.6875 $6,018,750 $1,824
==========================================================================================================================
<FN>
(1) Consists of 900,000 shares of Common Stock available for purchase by
employees of VTEL Corporation and its subsidiaries pursuant to the VTEL
Corporation 401(k) Plan. Pursuant to a Rights Agreement, each share of
Common Stock also has an associated preferred stock purchase right. In
addition, pursuant to Rule 416(c) under the Securities Act of 1933, as
amended (the "Securities Act"), this Registration Statement also covers an
indeterminant amount of interests (including any associated preferred stock
purchase rights) to be offered or sold pursuant to the employee benefit
plan described herein.
(2) Estimated solely for the purpose of calculating the registration fee.
(3) Calculated pursuant to Rule 457(c) and (h) solely for the purposes of
computing the registration fee, based upon the average of the highest and
lowest selling price per share of the Common Stock on the NASDAQ National
Market on January 15, 1998 under the Securities Act.
</FN>
</TABLE>
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<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
Item 1. Plan Information*
Item 2. Registrant Information and Employee Plan Annual Information*
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The registrant hereby incorporates by reference in this registration
statement the following documents previously filed by the registrant with the
Securities and Exchange Commission (the "Commission"):
(1) the registrant's Annual Report on Form 10-K filed with the
Commission for the fiscal year ended July 31, 1997;
(2) the registrant's Quarterly Report on From 10-Q filed with the
Commission for the three months ended October 31, 1997;
(3) the description of the Common Stock of the registrant set
forth in the Registration Statement on Form 8-A, filed with the
Commission on March 31, 1992, including any amendment or report filed
for the purpose of updating such description; and
(4) the description of the Company's Rights contained in the
Company's Registration Statement on Form 8-A, filed with the
Commission on July 11, 1996, including any amendment or report filed
for the purpose of updating such description.
All documents filed by the registrant with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), subsequent to the date of this registration
statement shall be deemed to be incorporated herein by reference and to be a
part hereof from the date of the filing of such documents until such time as
there shall have been filed a post-effective amendment that indicates that all
securities offered hereby have been sold or that deregisters all securities
remaining unsold at the time of such amendment.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
None.
Item 6. Indemnification of Directors and Officers.
The Fourth Amended and Restated Certificate of Incorporation of
the registrant provides for indemnification as follows:
"NINTH: The Corporation shall indemnify any person:
(a) who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an
action by or in the right of the Corporation) by reason of the fact
that he is or was a director,
- --------
*Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from this Registration Statement in accordance with Rule
428 under the Securities Act of 1933 and the Note to Part I of Form S-8.
II-1
<PAGE>
officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reason-
ably incurred by him in connection with such action, suit or proceed-
ing if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Corporation, and,
with respect to any criminal action or proceeding, had no reasonable
cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of
itself create a presumption that the person did not act in good faith
and in a manner which he reasonably believed to be in or not opposed
to the best interests of the Corporation, and with respect to any
criminal action or proceeding, had reasonable cause to believe his
action was unlawful, or
(b) who was or is a party or is threatened to be made a party to
any threatened, pending or completed action or suit by or in the right
of the Corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as
a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Corporation and except that
no indemnification shall be made in respect of any claim, issue or
matters as to which such person shall have been adjudged to be liable
to the Corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which
the Court of Chancery or such other court shall deem proper.
To the extent that a director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in subparagraphs
(a) and (b) of this Article 9, or in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith.
Any indemnification under subparagraphs (a) and (b) of this
Article 9 (unless ordered by a court) shall be made by the Corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper
in the circumstances because he has met the applicable standard of
conduct set forth in subparagraphs (a) and (b) of this Article 9. Such
determination shall be made (i) by the Board of Directors by a
majority vote of the quorum consisting of directors who were not
parties to such action, suit or proceeding, or (ii) if such a quorum
is not obtainable, or, even if obtainable a quorum of disinterested
directors so directs, by independent legal counsel in a written
opinion, or (iii) by the stockholders.
Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or
investigative action, suit or proceeding shall be paid by the
Corporation in advance of the final disposition of such action, suit
or proceeding upon receipt of an undertaking by or on behalf of such
director or officer to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the
Corporation as authorized in this Article 9. Such expenses (including
attorneys' fees) incurred by other employees and agents may be so paid
upon such terms and conditions, if any, as the Board of Directors
deems appropriate.
The indemnification and advancement of expenses provided by, or
granted pursuant to, this Article 9 shall not be deemed exclusive of
any other rights to which those seeking indemnification or advancement
of expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to
action in his official capacity and as to action in another capacity
while holding such office.
The Corporation may purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as
a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any
liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such
liability under the provisions of this Article 9.
II-2
<PAGE>
For purposes of this Article 9, references to "the Corporation"
shall include, in addition to the resulting corporation, any
constituent corporation (including any constituent of a constituent)
absorbed in a consolidation or merger which, if its separate existence
had continued, would have had power and authority to indemnify its
directors, officers, and employees or agents, so that any person who
is or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
shall stand in the same position under this Article 9 with respect to
the resulting or surviving corporation as he would have with respect
to such constituent corporation if its separate existence had
continued.
For purposes of this Article 9, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on a person with respect to an
employee benefit plan; and references to "serving at the request of
the Corporation" shall include any service as a director, officer,
employee or agent of the Corporation which imposes duties on, or
involves services by, such director, officer, employee or agent with
respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have
acted in a manner "not opposed to the best interests of the
Corporation" as referred to in this Article 9.
The indemnification and advancement of expenses provided by, or
granted pursuant to, this Article 9 shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to
be a director, officer, employee or agent and shall inure to the
benefit of the heirs, executors and administrators of such a person."
Item 7. Exemption from Registration Claimed.
None.
Item 8. Exhibits.
(a) Exhibits.
The following documents are filed as a part of this
registration statement.
Exhibit Description of Exhibit
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4.1 - Fourth Amended and Restated Certificate of Incorporation, as
filed July 7, 1993 with the Secretary of State of Delaware
(incorporated by reference to Exhibit 3.1 to the Company's
quarterly report filed on Form 10-Q for the three months ended
June 30, 1993).
4.2 - Bylaws of the Company as adopted by the Board of Directors of
the Company effective as of June 11, 1989 (incorporated by
reference to Exhibit 3.3 to the Company's Registration Statement
on Form S-1, File No. 33-45876, as amended).
4.3 - Amendment to Bylaws of the Company as adopted by the Board of
Directors of the Company effective as of April 28, 1992
(incorporated by reference to Exhibit 19.1 to the Company's
Quarterly Report on Form 10-Q for the three months ended March
31, 1992).
4.4 - Amendment to the Bylaws of the Company as adopted by the Board
of Directors of the Company effective as of July 10, 1996
(incorporated by reference to Exhibit 4.5 to the Company's
Current Report on Form 8-K dated July 10, 1996).
4.5 - Specimen Certificate for the Common Stock (incorporated by
reference to Exhibit 4.1 to the Company's Registration Statement
on Form S-1, File No. 33-45876, as amended).
4.6 - Rights Agreement dated as of July 10, 1996 between VTEL
Corporation and First National Bank of Boston, which includes the
form of Certificate of Designations for Designating Series A
Preferred Stock, $.01 par value, the form of Rights Certificate,
and the Summary of Rights to Purchase Series A Preferred Stock
(incorporated by reference to Exhibit 4.1 to the Company's
Current Report on Form 8-K dated July 10, 1996).
II-3
<PAGE>
4.7 Basic Plan Document
4.8 Adoption Agreement -- Non-Standardized Profit Sharing/Thrift Plan
with 401(k) Feature
5.1 Internal Revenue Service Letter, dated September 4, 1997
23.1 Consent of Price Waterhouse LLP
23.2 Consent of KPMG Peat Marwick LLP
24.1 Power of Attorney (included in the signature page of this
Registration Statement)
The undersigned registrant hereby undertakes to submit, or has
submitted, the Plan and any amendments thereto to the Internal Revenue
Service ("IRS") in a timely manner and has made or will 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 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 this Registration
Statement;
(2) that, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof; and
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
B. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of
the Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of 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.
II-4
<PAGE>
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 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 Austin, Texas, on January 20, 1998.
VTEL CORPORATION
By: /s/ Dick Moeller
-------------------------------------------
F. H. (Dick) Moeller,
Chief Executive Officer and Chairman of the
Board of Directors
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints F.H. (Dick) Moeller and Rodney S. Bond
and each of them, each with full power to act without the other, his true and
lawful attorneys-in-fact and agents, each with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments to this Registration Statement, and
to file the same with all exhibits, thereto, and all documents in connection
therewith, with the SEC, granting unto each of said attorneys-in-fact and agents
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that each of said attorneys-in-fact and agents or his
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Capacity Date
--------- -------- ----
/s/ Dick Moeller Chief Executive Officer and January 20, 1998
- -------------------------- Chairman of the Board of
F.H. (Dick) Moeller Directors (Principal
Executive Officer)
/s/ Rodney S. Bond Chief Financial Officer, January 20, 1998
- -------------------------- Vice President - Finance,
Rodney S. Bond Treasurer and Secretary
(Principal Financial Officer
and Principal Accounting
Officer)
/s/ Jerry S. Bensen, Jr. Director January 20, 1998
- --------------------------
Jerry S. Bensen, Jr.
/s/ Eric L. Jones Director January 20, 1998
- --------------------------
Eric L. Jones
Director January 20, 1998
- ---------------------------
Gordon H. Matthews
/s/ Max D. Hopper Director January 20, 1998
- ---------------------------
Max D. Hopper
Director January 20, 1998
- ---------------------------
T. Gary Trimm
/s/ Dr. Arthur G. Anderson Director January 20, 1998
- ---------------------------
Dr. Arthur G. Anderson
Director January 20, 1998
- ---------------------------
Richard Snyder
<PAGE>
EXHIBIT INDEX
Sequential
Exhibit Page
Number Document Description Number
------- -------------------- ----------
4.7 Basic Plan Document
4.8 Adoption Agreement -- Non-Standardized Profit
Sharing/Thrift Plan with 401(k) Feature
5.1 Internal Revenue Service Letter, dated
September 4, 1997
23.1 Consent of Price Waterhouse LLP
23.2 Consent of KPMG Peat Marwick LLP
24.1 Power of Attorney (included on the signature
page of this Registration Statement)
<PAGE>
The Plan. Pursuant to the requirements of the Securities Act of 1933, as
amended, the trustee of the VTEL Corporation 401(k) Plan has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Austin, State of Texas, on January 20, 1998.
VTEL CORPORATION 401(K) PLAN
By: VTEL Corporation
Plan Administrator
By: /s/ Dianne Johnson
-------------------------
Name: Dianne Johnson
EXHIBIT 4.7
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
DEFINED CONTRIBUTION PLAN
BASIC PLAN DOCUMENT NUMBER 03
<PAGE>
TABLE OF CONTENTS
SECTION CONTENTS PAGE
ARTICLE I - DEFINITIONS.................................................... 1
1.1 ACCRUED BENEFIT.......................................... 1
1.2 ADDITIONAL MATCHING CONTRIBUTIONS........................ 1
1.3 ADOPTION AGREEMENT....................................... 1
1.4 ALTERNATE PAYEE.......................................... 1
1.5 ANNUITY.................................................. 1
1.6 ANNUITY CONTRACT......................................... 1
1.7 ANNUITY STARTING DATE.................................... 1
1.8 BENEFICIARY.............................................. 1
1.9 BOARD OF DIRECTORS....................................... 2
1.10 CODA..................................................... 2
1.11 CODE..................................................... 2
1.12 COMPENSATION............................................. 2
1.13 CONSIDERED NET PROFITS................................... 5
1.14 CONTRIBUTION PERIOD...................................... 6
1.15 DAVIS-BACON ACT.......................................... 6
1.16 DISABILITY............................................... 6
1.17 DISABILITY RETIREMENT DATE............................... 7
1.18 EARLY RETIREMENT DATE.................................... 7
1.19 EARNED INCOME............................................ 7
1.20 EFFECTIVE DATE........................................... 7
1.21 ELECTIVE DEFERRAL CONTRIBUTIONS.......................... 7
1.22 EMPLOYEE................................................. 8
1.23 EMPLOYEE CONTRIBUTIONS................................... 8
1.24 EMPLOYER................................................. 8
1.25 ENTRY DATE............................................... 8
1.26 ERISA.................................................... 8
1.27 FIDUCIARY................................................ 9
1.28 FORFEITURE............................................... 9
1.29 HIGHLY COMPENSATED EMPLOYEE.............................. 9
1.30 INSURANCE COMPANY........................................ 12
1.31 LATE RETIREMENT DATE..................................... 12
1.32 LEASED EMPLOYEE.......................................... 12
1.33 LIFE ANNUITY............................................. 13
1.34 LIFE INSURANCE POLICY.................................... 13
1.35 MATCHING CONTRIBUTIONS................................... 13
1.36 MONEY PURCHASE PENSION CONTRIBUTIONS..................... 13
1.37 NAMED FIDUCIARY.......................................... 14
1.38 NONELECTIVE CONTRIBUTIONS................................ 14
1.39 NON-TRUSTEED............................................. 14
1.40 NORMAL RETIREMENT AGE.................................... 14
1.41 NORMAL RETIREMENT DATE................................... 14
1.42 OWNER-EMPLOYEE........................................... 14
1.43 PARTICIPANT.............................................. 14
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<PAGE>
1.44 PARTICIPANT'S ACCOUNT.................................... 14
1.45 PARTICIPANT'S EMPLOYER STOCK ACCOUNT..................... 15
1.46 PARTNER.................................................. 16
1.47 PARTNERSHIP.............................................. 16
1.48 PERSON................................................... 16
1.49 PLAN..................................................... 16
1.50 PLAN ADMINISTRATOR....................................... 16
1.51 PLAN YEAR................................................ 16
1.52 PREVAILING WAGE LAW...................................... 17
1.53 PRIOR EMPLOYER CONTRIBUTIONS............................. 17
1.54 PRIOR REQUIRED EMPLOYEE CONTRIBUTIONS.................... 17
1.55 PRIOR VOLUNTARY EMPLOYEE CONTRIBUTIONS................... 17
1.56 QDRO..................................................... 17
1.57 QUALIFIED MATCHING CONTRIBUTIONS......................... 17
1.58 QUALIFIED NONELECTIVE CONTRIBUTIONS...................... 17
1.59 QVEC CONTRIBUTIONS....................................... 17
1.60 REQUIRED EMPLOYEE CONTRIBUTIONS.......................... 17
1.61 ROLLOVER CONTRIBUTION.................................... 17
1.62 SALARY DEFERRAL AGREEMENT................................ 18
1.63 SELF-EMPLOYED INDIVIDUAL................................. 18
1.64 SERIOUS FINANCIAL HARDSHIP............................... 18
1.65 SHAREHOLDER-EMPLOYEE..................................... 18
1.66 SOCIAL SECURITY INTEGRATION LEVEL........................ 18
1.67 SOCIAL SECURITY TAXABLE WAGE BASE........................ 18
1.68 SPONSORING ORGANIZATION.................................. 18
1.69 SPOUSE................................................... 18
1.70 STRAIGHT LIFE ANNUITY.................................... 18
1.71 TERMINATION OF EMPLOYMENT................................ 19
1.72 TRUE-UP CONTRIBUTIONS.................................... 19
1.73 TRUST.................................................... 19
1.74 TRUSTEE.................................................. 19
1.75 VESTED INTEREST.......................................... 19
1.76 VESTING PERCENTAGE....................................... 20
1.77 VOLUNTARY EMPLOYEE CONTRIBUTIONS......................... 20
ARTICLE II - GENERAL PROVISIONS............................................ 21
2A. SERVICE............................................................... 21
2A.1 SERVICE.................................................. 21
2A.2 ABSENCE FROM EMPLOYMENT.................................. 21
2A.3 HOUR OF SERVICE.......................................... 21
2A.4 1-YEAR BREAK-IN-SERVICE.................................. 22
2A.5 YEAR(S) OF SERVICE....................................... 22
2A.6 DETERMINING VESTING PERCENTAGE........................... 23
2A.7 EXCLUDED YEARS OF SERVICE FOR VESTING.................... 24
2A.8 CHANGE IN PLAN YEARS..................................... 24
2A.9 ELAPSED TIME............................................. 25
2A.10 EXCLUDED-PERIODS OF SERVICE FOR VESTING.................. 26
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<PAGE>
2B. ELIGIBILITY, ENROLLMENT AND PARTICIPATION.............................. 26
2B.1 ELIGIBILITY.............................................. 26
2B.2 ENROLLMENT............................................... 27
23.3 REEMPLOYED PARTICIPANT................................... 27
2B.4 ELIGIBLE CLASS........................................... 27
2B.5 WAIVER OF PARTICIPATION.................................. 28
2B.6 TRADES OR BUSINESSES CONTROLLED BY OWNER-EMPLOYEES....... 28
2C. CONTRIBUTIONS AND ALLOCATIONS......................................... 29
2C.1 PROFIT SHARING/THRIFT PLAN WITH 401(k) FEATURE........... 29
2C.2 MONEY PURCHASE PENSION PLAN.............................. 38
2C.3 ROLLOVER CONTRIBUTIONS................................... 41
2C.4 CONTRIBUTIONS SUBJECT TO DAVIS-BACON ACT................. 41
2C.5 QVEC CONTRIBUTIONS....................................... 41
ARTICLE III - DISTRIBUTIONS................................................ 42
3A. TIMING AND FORM OF BENEFITS........................................... 42
3A.1 PAYMENT OF BENEFITS...................................... 42
3A.2 COMMENCEMENT OF BENEFITS................................. 44
3A.3 FROM LIFE INSURANCE POLICIES............................. 45
3A.4 NONTRANSFERABLE.......................................... 45
3A.5 ALTERNATE PAYEE SPECIAL DISTRIBUTION..................... 45
3B. MINIMUM DISTRIBUTION REQUIREMENTS..................................... 46
3B.1 DEFINITIONS.............................................. 46
3B.2 DISTRIBUTION REQUIREMENTS................................ 48
3B.3 DEATH DISTRIBUTION PROVISIONS............................ 49
3B.4 TRANSITIONAL RULE........................................ 50
3C. JOINT AND SURVIVOR ANNUITY REQUIREMENTS............................... 51
3C.1 APPLICABILITY............................................ 51
3C.2 DEFINITIONS.............................................. 52
3C.3 QUALIFIED JOINT AND SURVIVOR ANNUITY..................... 53
3C.4 QUALIFIED PRERETIREMENT SURVIVOR ANNUITY................. 53
3C.5 NOTICE REQUIREMENTS...................................... 53
3C.6 SAFE HARBOR RULES........................................ 54
3C.7 TRANSITIONAL RULES....................................... 55
3D. TERMINATION OF EMPLOYMENT............................................. 57
3D.1 DISTRIBUTION............................................. 57
3D.2 REPAYMENT OF PRIOR DISTRIBUTION.......................... 58
3D.3 LIFE INSURANCE POLICY.................................... 60
3D.5 FORFEITURE............................................... 60
3D.6 LOST PARTICIPANT......................................... 60
3D.7 DEFERRAL OF DISTRIBUTION................................. 60
3E. WITHDRAWALS........................................................... 61
3E.1 WITHDRAWAL-EMPLOYEE CONTRIBUTIONS........................ 61
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<PAGE>
3E.2 WITHDRAWAL - ELECTIVE DEFERRAL CONTRIBUTIONS............. 62
3E.3 WITHDRAWAL - EMPLOYER CONTRIBUTIONS...................... 62
3E.4 WITHDRAWAL FOR SERIOUS FINANCIAL HARDSHIP OF
CONTRIBUTIONS OTHER THAN ELECTIVE DEFERRAL
CONTRIBUTIONS............................................ 62
3E.5 WITHDRAWAL FOR SERIOUS FINANCIAL HARDSHIP OF ELECTIVE
DEFERRAL CONTRIBUTIONS................................... 63
3E.6 WITHDRAWAL - QVEC CONTRIBUTIONS and ROLLOVER
CONTRIBUTIONS............................................ 64
3E.7 NOTIFICATION............................................. 64
3E.8 VESTING CONTINUATION..................................... 64
3E.9 WITHDRAWAL - PARTICIPANT'S EMPLOYER STOCK ACCOUNT........ 65
3E.10 WITHDRAWAL BY TERMINATED PARTICIPANTS.................... 65
3F. DIRECT ROLLOVERS...................................................... 65
3F.1 DEFINITIONS.............................................. 65
3F.2 DIRECT ROLLOVERS......................................... 65
ARTICLE IV - LEGAL LIMITATIONS ON CONTRIBUTIONS............................ 67
4A. NONDISCRIMINATION TESTS............................................... 67
4A.1 DEFINITIONS.................................................. 67
4A.2 ACTUAL DEFERRAL PERCENTAGE TEST.......................... 68
4A.3 SPECIAL RULES - ADP TEST................................. 68
4A.4 ACTUAL CONTRIBUTION PERCENTAGE TEST...................... 70
4A.5 SPECIAL RULES - ADP/ACP TESTS............................ 70
4B. LIMITATIONS ON ALLOCATIONS............................................ 71
4B.1 DEFINITIONS.............................................. 71
4B.2 BASIC LIMITATION......................................... 76
4B.3 ESTIMATED MAXIMUM PERMISSIBLE AMOUNT..................... 77
4B.4 ACTUAL MAXIMUM PERMISSIBLE AMOUNT........................ 77
4B.5 PARTICIPANTS COVERED BY ANOTHER PROTOTYPE DEFINED
CONTRIBUTION PLAN........................................ 77
4B.6 PARTICIPANTS COVERED BY NON-PROTOTYPE DEFINED
CONTRIBUTION PLAN........................................ 78
4B.7 PARTICIPANTS COVERED BY DEFINED BENEFIT PLAN............. 78
4C. TREATMENT OF EXCESSES................................................. 79
4C.1 DEFINITIONS.............................................. 79
4C.2 EXCESS ELECTIVE DEFERRAL CONTRIBUTIONS................... 79
4C.3 EXCESS ANNUAL ADDITIONS.................................. 80
4C.4 EXCESS CONTRIBUTIONS..................................... 81
4C.5 EXCESS AGGREGATE CONTRIBUTIONS........................... 82
ARTICLE V - PARTICIPANT PROVISIONS......................................... 84
5A. ANNUITY CONTRACT AND PARTICIPANT'S ACCOUNT............................ 84
5A.1 PARTICIPANT'S ACCOUNT.................................... 84
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<PAGE>
5A.2 INVESTMENT TRANSFERS..................................... 84
5A.3 PARTICIPANT'S ACCOUNT VALUATION.......................... 84
5B. LIFE INSURANCE POLICIES................................................ 85
5B.1 OPTIONAL PURCHASE OF LIFE INSURANCE...................... 85
5B.2 PREMIUMS ON LIFE INSURANCE POLICIES...................... 85
5B.3 LIMITATIONS ON PREMIUMS.................................. 85
5B.4 DISPOSAL................................................. 86
5B.5 RIGHTS UNDER POLICIES.................................... 86
5B.6 LOANS.................................................... 86
5B.7 CONDITIONS OF COVERAGE................................... 86
5B.8 POLICY NOT YET IN FORCE.................................. 86
5B.9 VALUE OF POLICY.......................................... 86
5B.10 DIVIDENDS................................................ 86
5B.11 DISTRIBUTION............................................. 86
5B.12 APPLICATION.............................................. 87
5C. LOANS................................................................. 87
5C.1 LOANS TO PARTICIPANTS.................................... 87
5C.2 LOAN PROCEDURES.......................................... 88
5D. PARTICIPANTS RIGHTS................................................... 89
5D.1 GENERAL RIGHTS OF PARTICIPANTS AND BENEFICIARIES......... 89
5D.2 FILING A CLAIM FOR BENEFITS.............................. 89
5D.3 DENIAL OF CLAIM.......................................... 89
5D.4 REMEDIES AVAILABLE TO PARTICIPANTS....................... 89
5D.5 LIMITATION OF RIGHTS..................................... 90
5D.6 100% VESTED CONTRIBUTIONS................................ 90
5D.7 REINSTATEMENT OF BENEFIT................................. 90
5D.8 NON-ALIENATION........................................... 90
ARTICLE VI - OVERSEER PROVISIONS........................................... 91
6A. FIDUCIARY DUTIES AND RESPONSIBILITIES................................. 91
6A.1 GENERAL FIDUCIARY STANDARD OF CONDUCT.................... 91
6A.2 SERVICE IN MULTIPLE CAPACITIES........................... 91
6A.3 LIMITATIONS ON FIDUCIARY LIABILITY....................... 91
6A.4 INVESTMENT MANAGER....................................... 91
6B. THE PLAN ADMINISTRATOR................................................ 91
6B.1 DESIGNATION AND ACCEPTANCE............................... 91
6B.2 DUTIES AND RESPONSIBILITY................................ 91
6B.3 SPECIAL DUTIES........................................... 92
6B.4 EXPENSES AND COMPENSATION................................ 92
6B.5 INFORMATION FROM EMPLOYER................................ 92
6B.6 ADMINISTRATIVE COMMITTEE; MULTIPLE SIGNATURES............ 92
6B.7 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR........ 93
6B.8 INVESTMENT MANAGER....................................... 93
6B.9 DELEGATION OF DUTIES..................................... 93
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<PAGE>
6C. TRUST AGREEMENT....................................................... 93
6C.1 CREATION AND ACCEPTANCE OF TRUST......................... 93
6C.2 TRUSTEE CAPACITY; CO-TRUSTEES............................ 93
6C.3 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR
TRUSTEE.................................................. 94
6C.4 TAXES, EXPENSES AND COMPENSATION OF TRUSTEE.............. 94
6C.5 TRUSTEE ENTITLED TO CONSULTATION......................... 94
6C.6 RIGHTS, POWERS AND DUTIES OF TRUSTEE..................... 95
6C.7 EVIDENCE OF TRUSTEE ACTION............................... 97
6C.8 INVESTMENT POLICY........................................ 97
6C.9 PERIOD OF THE TRUST...................................... 97
6D. THE INSURANCE COMPANY................................................. 97
6D.1 DUTIES AND RESPONSIBILITIES.............................. 97
6D.2 RELATION TO EMPLOYER, PLAN ADMINISTRATOR AND
PARTICIPANTS............................................. 97
6D.3 RELATION TO TRUSTEE...................................... 98
6E. ADOPTING EMPLOYER..................................................... 98
6E.1 ELECTION TO BECOME ADOPTING EMPLOYER..................... 98
6E.2 DEFINITION............................................... 98
6E.3 EFFECTIVE DATE OF PLAN................................... 98
6E.4 FORFEITURES.............................................. 98
6E.5 CONTRIBUTIONS............................................ 98
6E.6 EXPENSES................................................. 98
6E.7 SUBSTITUTION OF PLANS.................................... 99
6E.8 TERMINATION OF PLANS..................................... 99
6E.9 AMENDMENT................................................ 99
6E.10 PLAN ADMINISTRATOR'S AUTHORITY........................... 99
ARTICLE VII -- SPECIAL CIRCUMSTANCES WHICH MAY AFFECT THE PLAN............. 100
7A. TOP-HEAVY PROVISIONS.................................................. 100
7A.1 DEFINITIONS.............................................. 100
7A.2 MINIMUM ALLOCATION....................................... 102
7A.3 MINIMUM VESTING SCHEDULE................................. 103
7B. AMENDMENT, TERMINATION OR MERGER OF THE PLAN.......................... 104
7B.1 AMENDMENT OF ELECTIONS UNDER ADOPTION AGREEMENT
BY EMPLOYER.............................................. 104
7B.2 AMENDMENT OF PLAN, TRUST, AND FORM OF ADOPTION
AGREEMENT................................................ 105
7B.3 CONDITIONS OF AMENDMENT.................................. 105
7B.4 TERMINATION OF THE PLAN.................................. 105
7B.5 FULL VESTING............................................. 105
7B.6 APPLICATION OF FORFEITURES............................... 106
7B.7 MERGER WITH OTHER PLAN................................... 106
7B.8 TRANSFER FROM OTHER PLANS................................ 106
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<PAGE>
7B.9 TRANSFER TO OTHER PLANS.................................. 107
7B.10 APPROVAL BY THE INTERNAL REVENUE SERVICE................. 107
7B.11 SUBSEQUENT UNFAVORABLE DETERMINATION..................... 107
7C. SUBSTITUTION OF PLANS................................................. 107
7C.1 SUBSTITUTION OF PLANS.................................... 107
7C.2 TRANSFER OF ASSETS....................................... 108
7C.3 SUBSTITUTION FOR PRE-EXISTING MASTER OR
PROTOTYPE PLAN........................................... 108
7C.4 PARTIAL SUBSTITUTION OR PARTIAL TRANSFER OF THE PLAN
OR ASSETS................................................ 108
ARTICLE VIII - MISCELLANEOUS............................................... 109
8.1 NONREVERSION............................................. 109
8.2 GENDER AND NUMBER........................................ 109
8.3 REFERENCE TO THE INTERNAL REVENUE CODE AND ERISA......... 109
8.4 GOVERNING LAW............................................ 109
8.5 COMPLIANCE WITH THE INTERNAL REVENUE CODE
AND ERISA................................................ 109
8.6 CONTRIBUTION RECAPTURE................................... 109
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<PAGE>
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
DEFINED CONTRIBUTION PLAN
BASIC PLAN DOCUMENT NUMBER 03
The Plan set forth herein may be adopted by an Employer and accepted by the Plan
Administrator and, if applicable, the Trustee by executing an Adoption
Agreement, which together shall constitute the Employer's Plan, for the
exclusive benefit of its eligible Employees and their Beneficiaries, as fully as
if set forth in said Adoption Agreement; provided, however, no Employer may
adopt this Plan except with the consent of Connecticut General Life Insurance
Company.
ARTICLE I - DEFINITIONS
1.1 ACCRUED BENEFIT. The term Accrued Benefit means the value of the
Participant's Account on any applicable date.
1.2 ADDITIONAL MATCHING CONTRIBUTIONS. The term Additional Matching
Contributions means additional discretionary Matching Contributions made to
the Plan by the Employer, as authorized by its Board of Directors by
resolution. Additional Matching Contributions shall be treated as Matching
Contributions for nondiscrimination testing and allocation purposes.
1.3 ADOPTION AGREEMENT. The term Adoption Agreement means the prescribed
agreement by which the Employer adopts this Plan, and which sets forth the
elective provisions of this Plan as specified by the Employer.
1.4 ALTERNATE PAYEE. The term Alternate Payee means a person, other than the
Participant, identified under a QDRO to be a recipient of part or all of
the Participant's benefit under the Plan.
1.5 ANNUITY. The term Annuity means a series of payments made over a specified
period of time.
1.6 ANNUITY CONTRACT. The term Annuity Contract means the group annuity
contract form issued by the Insurance Company to fund the benefits provided
under this Plan, as such contract may be amended from time to time in
accordance with the terms thereof. The Employer will specify and
communicate to its Employees the types of investments available under this
Plan and Annuity Contract.
1.7 ANNUITY STARTING DATE. The term Annuity Starting Date means the first day
of the first period for which an amount is paid as an Annuity or any other
form.
1.8 BENEFICIARY. The term Beneficiary means the beneficiary or beneficiaries
entitled to any benefits under a Participant's Account hereunder upon the
death of a Participant, Beneficiary or Alternate Payee pursuant to a QDRO.
If any Life Insurance Policy is purchased on the life of a Participant
hereunder, the Beneficiary under such Policy shall be designated separately
Article I - Definitions 1 October 27, 1995
<PAGE>
therein. However, any such Beneficiary designation shall be subject to the
terms of Section 3C.
A Participant's Beneficiary shall be his Spouse, if any, unless the
Participant designates a person or persons other than his Spouse as
Beneficiary with his Spouse's written consent. A Participant may designate
a Beneficiary on the form approved by the Plan Administrator.
If any distribution is made to a Beneficiary in the form of an Annuity, and
if such Annuity provides for a death benefit, then such Beneficiary shall
also have a right to designate a beneficiary and to change that beneficiary
from time to time. As an alternative to receiving the benefit in the form
of an Annuity, the Beneficiary may elect to receive a single cash payment
or any other form of payment provided by the Employer's election in the
Adoption Agreement.
If no Beneficiary has been designated pursuant to the provisions of this
Section, or if no Beneficiary survives the Participant and he has no
surviving Spouse, then the Beneficiary under the Plan shall be the deceased
Participant's surviving children in equal shares or, if there are no
surviving children, the Participant's estate. If a Beneficiary dies after
becoming entitled to receive a distribution under the Plan but before
distribution is made to him in full, and if no other Beneficiary has been
designated to receive the balance of the distribution in that event, the
estate of the deceased Beneficiary shall be the Beneficiary for the balance
of the distribution.
If the Employer so elects in the Adoption Agreement, an Alternate Payee
and/or Beneficiary shall be allowed to direct the investment of his
segregated portion of the Participant's Account, pursuant to Section 5A. An
individual who is designated as an Alternate Payee in a QDRO relating to a
Participant's benefits under this Plan shall be treated as a Beneficiary
hereunder, to the extent provided by such order.
1.9 BOARD OF DIRECTORS. The term Board of Directors means the Employer's board
of directors or other comparable governing body.
1.10 CODA. The term CODA means cash or deferred arrangement as described in Code
section 401(k) and the regulations thereunder.
1.11 CODE. The term Code means the Internal Revenue Code of 1986, as amended
from time to time.
1.12 COMPENSATION. The term Compensation means Compensation as defined below.
For any Self-Employed Individual covered under the Plan, Compensation shall
mean Earned Income. Compensation shall include only that Compensation which
is actually paid to the Participant during the applicable Determination
Period. Except as provided elsewhere in this Plan, the "Determination
Period" shall be the period elected by the Employer in the Adoption
Agreement. If the Employer makes no election, the Determination Period
shall be the Plan Year.
Article I - Definitions 2 October 26, 1995
<PAGE>
An Employer may elect in the Adoption Agreement to use one of the following
definitions of Compensation for purposes of allocating all contributions:
(a) Wages, Tips, and Other Compensation Box on Form W-2. (Information
required to be reported under Code sections 6041, 6051 and 6052).
Wages within the meaning of Code section 3401(a) and all other
payments of compensation to an Employee by the Employer (in the course
of the Employer's trade or business) for which the Employer is
required to furnish the Employee a written statement under Code
sections 6041(d), 6051(a)(3), and 6052. Compensation must be
determined without regard to any rules under Code section 3401(a) that
limit the remuneration included in wage's based on the nature or
location of the employment or the services performed (such as the
exception for agricultural labor in Code section 3401(a)(2)).
(b) Section 3401(a) wages. Wages as defined in Code section 3401(a) for
the purposes of income tax withholding at the source but determined
without regard to any rules that limit the remuneration included in
wages based on the nature or location of the employment or the
services performed (such as the exception for agricultural labor in
Code section 3401(a)(2)).
(c) 415 safe-harbor compensation. Wages, salaries, and fees for
professional services and other amounts received (without regard to
whether or not an amount is paid in cash) for personal services
actually rendered in the course of employment with the Employer
maintaining the Plan to the extent that the amounts are includable in
gross income (including, but not limited to, commissions paid
salesmen, compensation for services on the basis of a percentage of
profits, commissions on insurance premiums, tips, bonuses, fringe
benefits, and reimbursements or other expense allowances under a
nonaccountable plan as described in Code section 1.62-2(c)), and
excluding the following:
(1) Employer contributions to a plan of deferred compensation which
are not includable in the Employee's gross income for the taxable
year in which contributed, or Employer contributions under a
simplified employee pension plan to the extent such contributions
are deductible by the Employee, or any distributions from a plan
of deferred compensation;
(2) Amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by the
Employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
(3) Amounts realized from the sale, exchange or other disposition of
stock acquired under a qualified stock option; and
(4) Other amounts which received special tax benefits, or
contributions made by the Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity contract
described in Code section 403(b) (whether
Article I - Definitions 3 May 16, 1997
<PAGE>
or not the contributions are actually excludable from the gross
income of the Employee).
(d) Modified Wages, Tips, and Other Compensation Box on Form
W-2.Compensation as defined in subsection (a) above, but reduced by
all of the following items (even if includable in gross income):
reimbursements or other expense allowances, fringe benefits (cash or
noncash), moving expenses, deferred compensation, and welfare
benefits. This definition may not be used by standardized plans or
plans using a contribution or allocation formula that is integrated
with Social Security.
(e) Modified Section 3401 (a) wages. Compensation as defined in subsection
(b) above, but reduced by all of the following items (even if
includable in gross income): reimbursements or other expense
allowances, fringe benefits (cash or noncash), moving expenses,
deferred compensation, and welfare benefits. This definition may not
be used by standardized plans or plans using a contribution or
allocation formula that is integrated with Social Security.
(f) Modified 415 safe-harbor compensation. Compensation as defined in
subsection (c) above, but reduced by all of the following items (even
if includable in gross income): reimbursements or other expense
allowances, fringe benefits (cash or noncash), moving expenses,
deferred compensation, and welfare benefits. This definition may not
be used by standardized plans or plans using a contribution or
allocation formula that is integrated with Social Security.
(g) Regular or base salary or wages. Regular or base salary or wages
(excluding overtime and bonuses) received during the applicable period
by the Employee from the Employer. This definition may not be used by
standardized plans or plans using a contribution or allocation formula
that is integrated with Social Security.
(h) Regular or base salary wages plus overtime and/or bonuses. Regular or
base salary or wages, plus either or both overtime and/or bonuses, as
elected by the Employer in the Adoption Agreement, received during the
applicable period by the Employee from the Employer. This definition
may not be used by standardized plans or plans using a contribution or
allocation formula that is integrated with Social Security.
(i) A reasonable alternative definition of Compensation, as that term is
used in Code section 414(s)(3) and the regulations thereunder,
provided that the definition does not favor Highly Compensated
Employees and satisfies the nondiscrimination requirements under Code
section 414(s). This definition may not be used by standardized plans
or plans using a contribution or allocation formula that is integrated
with Social Security.
Notwithstanding the above, if elected by the Employer in the Adoption
Agreement, Compensation shall include any amount which is contributed by
the Employer pursuant to a salary reduction agreement and which is not
includable in the gross income of the Employee under Code sections 125,
402(e)(3), 402(h)(1)(B) or 403(b).
Article I - Definitions 4 October 26, 1995
<PAGE>
For years beginning on or after January 1, 1989, and before January 1,
1994, the annual Compensation of each Participant taken into account for
determining all benefits provided under the Plan for any Plan Year shall
not exceed $200,000. This limitation shall be adjusted by the Secretary at
the same time and in the same manner as under Code section 415(d) (unless a
lesser amount is elected by the Employer in the Adoption Agreement), except
that the dollar increase in effect on January I of any calendar year is
effective for Plan Years beginning in such calendar year and the first
adjustment to the $200,000 limitation is effective on January 1, 1990.
For Plan Years beginning on or after January 1, 1994, the annual
Compensation of each Participant taken into account for determining all
benefits provided under the Plan for any Plan Year shall not exceed
$150,000, as adjusted for increases in the cost-of-living in accordance
with Code section 401(a)(17)(B). The cost-of-living adjustment in effect
for a calendar year applies to any Determination Period beginning in such
calendar year.
If a Determination Period consists of fewer than 12 calendar months, then
the annual compensation limit is an amount equal to the annual compensation
limit for the calendar year in which the compensation period begins,
multiplied by the ratio obtained by dividing the number of full months in
the period by 12.
In determining the Compensation of a Participant for purposes of this
limit, the rules of Code section 414(q)(6) shall apply, except in applying
such rules, the term "family" shall include only the spouse of the
Participant and any lineal descendants of the Participant who have not
attained age 19 before the close of the year. If, as a result of the
application of such rules, the adjusted annual Compensation limit is
exceeded, then (except for purposes of determining the portion of
Compensation up to the integration level if this Plan uses a contribution
or allocation formula that is integrated with Social Security), the limit
shall be prorated among the affected individuals in proportion to each such
individual's Compensation as determined under this Section prior to the
application of this limit.
If Compensation for any prior Determination Period is taken into account in
determining an Employee's contributions or benefits for the current year,
the Compensation for such prior Determination Period is subject to the
applicable annual compensation limit in effect for that prior period. For
this purpose, in determining allocations in Plan Years beginning on or
before January 1, 1989, the annual compensation limit in effect for
Determination Periods before that date is $200,000. In addition, in
determining allocations in Plan Years beginning on or after January 1,
1994, the annual compensation limit in effect for Determination Periods
beginning before that date is $150,000.
1.13 CONSIDERED NET PROFITS. The term Considered Net Profits means the entire
amount of the accumulated or current operating profits (excluding capital
gains from the sale or involuntary conversion of capital or business
assets) of the Employer after all expenses and charges other than (1) the
Employer contribution to this and any other qualified plan, and (2)
federal, state or local taxes based upon or measured by income, as
determined by the Employer, either on an estimated basis or a final basis,
in accordance with the generally accepted accounting principles used by the
Employer. When, for any Plan Year, the amount of Considered Net Profits has
Article I - Definitions 5 October 26, 1995
<PAGE>
been determined by the Employer, and the Employer contribution made on the
basis of such determination, such determination and contribution shall be
final and conclusive and shall not be subject to change because of any
adjustments in income or expense which may be required by the Internal
Revenue Service or otherwise. Such determination and contribution shall.
not be open to question by any Participant either before or after the
Employer contribution has been made.
In the case of an Employer that is a non-profit entity, the term Considered
Net Profits means the entire amount of the accumulated or current operating
surplus (excluding capital gains from the sale or involuntary conversion of
capital or business assets) of the Employer after all expenses and charges
other than (1) the contribution made by the Employer to the Plan, and (2)
federal, state or local taxes based upon or measured by income, in
accordance with the generally accepted accounting principles used by the
Employer.
1.14 CONTRIBUTION PERIOD. The term Contribution Period means that regular
period, specified by the Employer in its Adoption Agreement, for which the
Employer shall make Employer contributions, if any, and that regular period
specified by the Employer in its Adoption Agreement, for which Participants
may make Employee Contributions, if any, and Elective Deferral
Contributions, if any. The first Contribution Period may be an irregular
period, not longer than one month, commencing not prior to the Effective
Date. However, the first Contribution Period for Elective Deferral
Contributions may not commence before the later of the Plan's Effective
Date or adoption date.
1.15 DAVIS-BACON ACT. The term Davis-Bacon Act means the Davis-Bacon Act (40
U.S.C. section 276(a) et seq., as amended from time to time), which
guarantees minimum wages to laborers and mechanics employed on Federal
government contracts for the construction, alteration,'or repair of public
buildings or works. The minimums are the amounts found by the Secretary of
Labor to be prevailing for similar workers in the area in which the work is
to be done.
The term "wages" as used in the Davis-Bacon Act includes, in addition to
the basic hourly rate of pay, contributions irrevocably made to trustees
for pension benefits for laborers and mechanics employed on Federal
government contracts and the cost of other fringe benefits. However,
overtime pay is to be computed only on the basis of the basic hourly rate
of pay.
1.16 DISABILITY. The term Disability means a Participant's incapacity to engage
in any substantial gainful activity because of a medically determinable
physical or mental impairment which can be expected to result in death, or
which has lasted or can be expected to last for a continuous period of not
less than 12 months. The performance and degree of such impairment shall be
supported by medical evidence. All Participants in similar circumstances
shall be treated alike.
If elected by the Employer in the Adoption Agreement, nonforfeitable
contributions will be made to the Plan on behalf of each disabled
Participant who is not a Highly Compensated Employee (within the meaning of
Section 1.29 of the Plan).
Article I - Definitions 6 October 26, 1995
<PAGE>
1.17 DISABILITY RETIREMENT DATE. The term Disability Retirement Date means the
first day of the month after the Plan Administrator has determined that a
Participant's incapacity is a Disability. A Participant who retires from
the Service of the Employer as of his Disability Retirement Date shall have
a Vesting Percentage of 100% and shall be entitled to receive a
distribution of the entire value of his Participant's Account and any Life
Insurance Policies, or the values thereof, as of his Disability Retirement
Date, subject to the provisions of Section 3A and Section 3C.
1.18 EARLY RETIREMENT DATE. If the Employer has specified in its Adoption
Agreement that Early Retirement is permitted, then the term Early
Retirement Date means the first day of the month coinciding with or next
following the date a Participant is separated from Service with the
Employer for any reason other than death or Disability, provided that on
such date the Participant has attained the conditions specified by the
Employer in its Adoption Agreement and has not attained his Normal
Retirement Age. A Participant who retires from the Service of the Employer
on his Early Retirement Date shall have a Vesting Percentage of 100% and
shall be entitled to receive a distribution of the entire value of his
Participant's Account and any Life Insurance Policies, or the values
thereof, as of his Early Retirement Date, subject to the provisions of
Section 3A and Section 3C.
If a Participant separates from Service before satisfying the age
requirement for Early Retirement, but has satisfied the Service
requirement, the Participant shall be 100% vested as of his Termination of
Employment date, but he will not be eligible for a distribution of the
entire value of his Participant's Account until satisfying such age
requirement.
1.19 EARNED INCOME. The term Earned Income means the net earnings from
self-employment in the trade or business With respect to which the Plan is
established, and for which the personal services of the individual are a
material income-producing factor. Net earnings will be determined without
regard to items not included in gross income and the deductions allocable
to such items. Net earnings are reduced by contributions made by the
Employer to a qualified plan to the extent deductible under Code section
404.
Net earnings shall be determined with regard to the deductions allowed to
the taxpayer by Code section 164(f) for taxable years beginning after
December 31, 1989.
1.20 EFFECTIVE DATE. The term Effective Date means the date specified by the
Employer in its Adoption Agreement as the Effective Date of the Plan.
1.21 ELECTIVE DEFERRAL CONTRIBUTIONS. The term Elective Deferral Contributions
means contributions made by the Employer to the Plan at the election of the
Participant, in lieu of cash compensation, and shall include contributions
made pursuant to a Salary Deferral Agreement or other-deferral mechanism.
With respect to any taxable year, a Participant's elective deferral is the
sum of all Employer contributions made on behalf of such Participant
pursuant to an election to defer under any CODA, any simplified employee
pension cash or deferred arrangement as described in section 402(h)(1)(B),
any eligible deferred compensation plan as described in section 457, any
plan described in section 501(c)(18), and any Employer contributions made
Article I - Definitions 7 October 29, 1996
<PAGE>
on the behalf of a Participant for the purchase of an annuity contract
under section 403(b) pursuant to a salary reduction agreement.
Elective Deferral Contributions shall not include those contributions
properly distributed as Excess Annual Additions, as defined in Section
4C.1(b).
1.22 EMPLOYEE. The term Employee means any employee of the Employer maintaining
the Plan or any other employer required to be aggregated with such Employer
under Code sections 414(b), (c), (m), or (o).
The term Employee also includes any Leased Employee deemed to be an
Employee of the Employer in accordance with Code sections 414(n) or (o).
1.23 EMPLOYEE CONTRIBUTIONS. The term Employee Contributions means contributions
to this Plan or any other plan, that are designated or treated at the time
of contribution as after-tax contributions made by the Employee and are
allocated to a separate account to which attributable earnings and losses
are allocated. Such term includes Required Employee Contributions,
Voluntary Employee Contributions, Prior Required Employee Contributions,
and Prior Voluntary Employee Contributions.
1.24 EMPLOYER. The term Employer means the employer that adopts this Plan. In
the case of a group of Employers that constitutes a controlled group of
corporations (as defined in Code section 414(b)) or that constitutes trades
or businesses (whether or not incorporated) that are under common control
(as defined in section 414(c)) or that constitutes an affiliated service
group (as defined in section 414(m)), Service with all such employers shall
be considered Service with the Employer for purposes of eligibility and
vesting. The term Employer shall also mean any Adopting Employer as defined
in Section 6E.2. A state or local government or political subdivision
thereof, or any agency or instrumentality thereof, or any organization
exempt from tax under Subtitle A of the code, may not elect a 401(k) option
(CODA) in the Adoption Agreement.
1.25 ENTRY DATE. The term Entry Date means either the Effective Date or each
applicable date thereafter as specified by the Employer in its Adoption
Agreement, when an Employee who has fulfilled the eligibility requirements
commences participation in the Plan.
If an Employee is not in the active Service of the Employer as of his
initial Entry Date, his subsequent Entry Date shall be the date he returns
to the active Service of the Employer, provided he still meets the
eligibility requirements. If an Employee does not enroll as a Participant
as of his initial Entry Date, his subsequent Entry Date shall be the
applicable Entry Date as specified by the Employer in the Adoption
Agreement when the Employee actually enrolls as a Participant.
1.26 ERISA. The term ERISA means the Employee Retirement Income Security Act of
1974 (PL93-406) as it may be amended from time to time, and any regulations
issued pursuant thereto as such Act and such regulations affect this Plan
and Trust.
Article I - Definitions 8 October 26, 1995
<PAGE>
1.27 FIDUCIARY. The term Fiduciary means any or all of the following, as
applicable:
(a) Any Person who exercises any discretionary authority or control
respecting the management of the Plan or its assets;
(b) Any Person who renders investment advice for a fee or other
compensation, direct or indirect, respecting any monies or other
property of the Plan or has authority or responsibility to do so;
(c) Any Person who has discretionary authority or responsibility in the
administration of
the Plan;
(d) Any Person who has been designated by a Named Fiduciary pursuant to
authority granted by the Plan, who acts to carry out a fiduciary
responsibility, subject to any exceptions granted directly or
indirectly by ERISA.
1.28 FORFEITURE. The term Forfeiture means the amount, if any, by which the
value of, a Participant's Account exceeds his Vested Interest upon the
occurrence of an immediate Break-in-Service, a 1-Year Break-in-Service or 5
consecutive 1-Year Breaks-in-Service, as elected by the Employer in its
Adoption Agreement pursuant to Section 3D.5, following such Participant's
Termination of Employment.
1.29 HIGHLY COMPENSATED EMPLOYEE. The term Highly Compensated Employee includes
both Highly Compensated Active Employees and Highly Compensated Former
Employees.
As elected by the Employer in the Adoption Agreement, the method to
determine Highly Compensated Employees shall be:
(a) Traditional Method: A "Highly Compensated Active Employee" includes
any Employee who performs service for the Employer during the
Determination Year and who, during the Look-Back Year;
(1) Received Compensation from the Employer in excess of $75,000 (as
adjusted pursuant to Code section 415(d)); or
(2) Received Compensation from the Employer in excess of $50,000 (as
adjusted pursuant to Code section 415(d)) and was a member of the
top-paid group for such year; or
(3) Was an officer of the Employer and received Compensation during
such year that is greater than 50 percent of the dollar
limitation in effect under Code section 415(b)(1)(A).
The term Highly Compensated Employee also includes: (1) Employees who
are described in the preceding sentence if the term "Determination
Year" is substituted for the term "Look-Back Year" and who are one of
Article I - Definitions 9 October 26, 1995
<PAGE>
the 100 employees who received the most Compensation from the Employer
during the Determination Year; and (2) Employees who are 5-percent
owners at any time during the Look-Back Year or Determination Year.
If no officer has satisfied the Compensation requirement of (3) above
during either a Determination Year or Look-Back Year, the highest paid
officer for such year shall be treated as a Highly Compensated
Employee.
For this purpose, the Determination Year shall be the Plan Year. The
Look-Back Year shall be the period elected by the Employer in the
Adoption Agreement.
A "Highly Compensated Former Employee" includes any Employee who
separated from Service (or was deemed to have separated) prior to the
Determination Year, performs no service for the Employer during the
Determination Year, and was a highly compensated active employee for
either the separation year or any Determination Year ending on or
after the Employee's 55th birthday.
If an Employee is, during a Determination Year or Look-Back Year, a
family member of either a 5-percent owner who is an active or former
Employee or a Highly Compensated Employee who is one of the 10 most
Highly Compensated Employees ranked on the basis of Compensation paid
by the Employer during such year (a "Top 10 Highly Compensated
Employee"), then the family member and the 5-percent owner or Top 10
Highly Compensated Employee shall be aggregated. In such case, the
family member and 5-percent owner or Top 10 Highly Compensated
Employee shall be treated as a single Employee receiving Compensation
and Plan contributions or benefits equal to the sum of such
Compensation and contributions or benefits of the family member and
5-percent owner or Top 10 Highly Compensated Employee. For purposes of
this Section, the term "family member" includes the Spouse, lineal
ascendants and descendants of the Employee or former Employee and the
spouses of such lineal ascendants and descendants.
The determination of who is a Highly Compensated Employee, including
the determinations of the number and identity of the Employees in the
top-paid group, the top 100 Employees, the number of Employees treated
as officers and the Compensation that is considered, will be made in
accordance with Code section 414(q) and the regulations thereunder.
For purposes of this definition, Compensation shall mean compensation
as defined in Code section 415(c)(3) except that elective or salary
reduction contributions to a cafeteria plan, CODA or tax-sheltered
annuity shall be included in Compensation.
(b) Simplified Method For Employers In More than One Geographic Area: If
elected by the Employer in the Adoption Agreement, the Traditional
Method above will be modified by substituting $50,000 for $75,000 in
(1) and by disregarding (2). This simplified definition of Highly
Compensated Employee will apply to Employers that maintain significant
Article I - Definitions 10 October 26, 1995
<PAGE>
business activities (and employ Employees) in at least two
significant, separate geographic areas.
(c) Alternative Simplified Method: If elected by the Employer in the
Adoption Agreement, Highly Compensated Employees shall be determined
as follows: A Highly Compensated Active Employee includes any Employee
who performs service for the Employer during the Determination Year
and who:
(1) Is a 5-percent owner; or
(2) Received Compensation from the Employer in excess of $75,000 (as
adjusted pursuant to Code section 415(d)), or
(3) Received Compensation from the Employer in excess of $50,000 (as
adjusted pursuant to Code section 415(d)) and was a member of the
top-paid group for such year; or
(4) Was an officer of the Employer and received Compensation during
such year that is greater than 50 percent of the dollar
limitation in effect under Code section 415(b)(1)(A).
Under this simplified definition, the look-back provisions of Code
section 414(q) do not apply.
(d) Alternative Simplified Method With Snapshot: If the Alternative
Simplified Method of determining Highly Compensated Employees is
selected by the Employer, the Employer may elect in the Adoption
Agreement to substantiate that the Plan complies with the
nondiscrimination requirements on the basis of the Employer's work
force on a single day during the Plan Year, provided that day is
reasonably representative of the Employer's work force and the Plan's
coverage throughout the Plan Year. The day elected by the Employer and
indicated on the Adoption Agreement shall be the "Snapshot Day."
To apply the Alternative Simplified Method on a snapshot basis:
(1) The Employer determines who is a Highly Compensated Employee on
the basis of the data as of the Snapshot Day, except as provided
in (3) below.
(2) If the determination of who is a Highly Compensated Employee is
made earlier than the last day of the Plan Year, the Employee's
Compensation that is used to determine an Employee's status must
be projected for the Plan Year under a reasonable method
established by the Employer.
(3) If there are Employees not employed on the Snapshot Day who are
taken into account in testing, they must be determined to be
either Highly Compensated Employees or non-Highly Compensated
Employees. In addition to those Employees who are determined to
Article I - Definitions 11 October 26, 1995
<PAGE>
be Highly Compensated Employees on the Plan's Snapshot Day, the
Employer must treat as a Highly Compensated Employee any eligible
Employee for the Plan Year who:
(a) Terminated employment prior to the Snapshot Day and was a
Highly Compensated Employee in the prior Plan Year;
(b) Terminated employment prior to the Snapshot Day and (i) was
a 5- percent owner, or (ii) has Compensation for the Plan
Year greater than or equal to the projected Compensation of
any Employee who is treated as a Highly Compensated Employee
on the Snapshot Day (except for Employees who are Highly
Compensated Employees solely because they are 5-percent
owners or officers), or (iii) was an officer and has
Compensation greater than or equal to the projected
Compensation of any other officer who is a Highly
Compensated Employee on the Snapshot Day solely because that
person is an officer; or
(c) Becomes employed after the Snapshot Day and (i) is a
5-percent owner, or (ii) has Compensation for the Plan Year
greater than or equal to the projected Compensation of any
Employee who is treated as a Highly Compensated Employee on
the Snapshot Day (except for Employees who are Highly
Compensated Employees solely because they are 5-percent
owners or officers), or (iii) is an officer and has
Compensation greater than or equal to the projected
Compensation of any officer who is a Highly Compensated
Employee on the Snapshot Day solely because that person is
an officer.
1.30 INSURANCE COMPANY. The term Insurance Company means Connecticut General
Life Insurance Company, a legal reserve life insurance company of Hartford,
Connecticut. If any company other than Connecticut General Life Insurance
Company has issued any Life Insurance Policy held by the Trustee under the
Plan, then with respect to such Policy only and matters pertaining directly
thereto, the term Insurance Company shall be deemed to refer to such other
issuing company.
1.31 LATE RETIREMENT DATE. The term Late Retirement Date means the first day of
the month coinciding with or next following the date a Participant is
separated from Service with the Employer after his Normal Retirement Age,
for any reason other than death.
1.32 LEASED EMPLOYEE. The term Leased Employee means any person (other than an
Employee of the recipient Employer) who, pursuant to an agreement between
the recipient Employer and any other person ("leasing organization"), has
performed services for the recipient Employer (or for the recipient
Employer and related persons determined in accordance with Code section
414(n)(6)) on a substantially full-time basis for a period of at least one
year, and such services are of a type historically performed by employees
in the business field of the recipient Employer. Contributions or benefits
provided a Leased
Article I - Definitions 12 October 26, 1995
<PAGE>
Employee by the leasing organization which are attributable to services
performed for the recipient Employer shall be treated as provided by the
recipient Employer.
A Leased Employee shall not be considered an Employee of the recipient
Employer if: such employee is covered by a money purchase pension plan of
the leasing organization providing: (a) a nonintegrated employer
contribution rate of at least 10 percent of compensation, as defined in
Code section 415(c)(3), but including amounts contributed by the employer
pursuant to a salary reduction agreement which are excludable from the
Leased Employee's gross income under Code section 125, section 402(e)(3),
section 402(h)(1)(B) or section 403(b), (b) immediate participation, and
(c) full and immediate vesting; and Leased Employees do not constitute more
than 20 percent of the recipient's non-highly compensated work force.
1.33 LIFE ANNUITY. The term Life Annuity means an Annuity payable over the life
or life expectancy of one or more individuals.
1.34 LIFE INSURANCE POLICY. The term Life Insurance Policy (or Policy) means a
policy of individual life insurance purchased from the Insurance Company on
the life of any Participant.
1.35 MATCHING CONTRIBUTIONS. The term Thatching Contributions means
contributions made by the Employer to the Plan for a Participant on account
of either Elective Deferral Contributions or Required Employee
Contributions. In addition, any Forfeiture reallocated as a Matching
Contribution shall be considered a Matching Contribution for purposes of
this Plan. If elected by the Employer in the Adoption Agreement, Matching
Contributions shall be made out of Considered Net Profits in an amount
specified by the Employer in its Adoption Agreement for each $1.00
contributed as either an Elective Deferral Contribution or a Required
Employee Contribution, as further specified by the Employer in its Adoption
Agreement. The term Matching Contributions shall include Additional
Matching Contributions.
Should there be insufficient Considered Net Profits of the Employer for
such Employer contribution, the amount of such Matching Contributions may
be diminished to the amount that can be made from the Employer's Considered
Net Profits.
The Employer may designate at the time of contribution that all or a
portion of such Matching Contributions be treated as Qualified Thatching
Contributions.
If elected by the Employer in the Adoption Agreement, Partners shall not be
entitled to receive Matching Contributions. If Partners are entitled to
receive Matching Contributions, such Contributions shall be considered
Elective Deferral Contributions for all purposes under this Plan.
1.36 MONEY PURCHASE PENSION CONTRIBUTIONS. The term Money Purchase Pension
Contributions means contributions made to the Plan by the Employer in
accordance with a definite formula as specified in the Adoption Agreement.
Article I - Definitions 13 July 17, 1996
<PAGE>
1.37 NAMED FIDUCIARY. The term Named Fiduciary means the Administrator and any
other Fiduciary designated by the Employer, and any successor thereto.
1.38 NONELECTIVE CONTRIBUTIONS. The term Nonelective Contributions means
contributions made to the Plan by the Employer in accordance with a
definite formula as specified in the Adoption Agreement. The Employer may
designate at the time of contribution that the Nonelective Contribution
shall be treated as a Qualified Nonelective Contribution.
1.39 NON-TRUSTEED. The term Non-Trusteed means that the Employer has specified
in the Adoption Agreement that there will not be a Trust as a part of the
Plan. Contributions under a Non-Trusteed plan will be made directly to the
Insurance Company. If the Employer specifies in the Adoption Agreement that
the Plan is Non-Trusteed, then the terms and provisions of this Plan
relating to the Trust shall be of no force or effect.
1.40 NORMAL RETIREMENT AGE. The term Normal Retirement Age means the age
selected in the Adoption Agreement. If the Employer enforces a mandatory
retirement age, the Normal Retirement Age is the lesser of that mandatory
age or the age specified in the Adoption Agreement.
Notwithstanding the vesting schedule elected by the Employer in the
Adoption Agreement, an Employee's right to his or her account balance shall
be nonforfeitable upon the attainment of Normal Retirement Age.
1.41 NORMAL RETIREMENT DATE. The term Normal Retirement Date means the first day
of the-month coinciding with or next following the date a Participant
attains his Normal Retirement Age. If a Participant retires from the
Service of the Employer on his Normal Retirement Date, he shall receive a
distribution of the entire value of his Participant's Account, as of his
Normal Retirement Date, subject to the provisions of Section 3A and Section
3C.
1.42 OWNER-EMPLOYEE. The term Owner-Employee means an individual who is a sole
proprietor, or who is a Partner owning more than 10 percent of either the
capital or profits interest of the Partnership.
1.43 PARTICIPANT. The term Participant means any person who has a Participant's
Account in the Plan and/or Trust.
If elected by the Employer in the Adoption Agreement, for purposes of the
investment of contributions as described in Section SA, the term
Participant shall include former Participants, Beneficiaries, and Alternate
Payees. Former Participants shall include those Participants who upon
Termination of Employment elected to defer distribution in accordance with
Section 3A of the Plan.
1.44 PARTICIPANT'S ACCOUNT. The term Participant's Account means the sum of the
following sub-accounts maintained on behalf of each Participant.
Article I - Definitions 14 October 27, 1995
<PAGE>
(a) Money Purchase Pension Contributions, if any, plus any income and
minus any loss thereon;
(b) Nonelective Contributions, if any, plus any income and minus any loss
thereon;
(c) Matching Contributions, if any, plus any income and minus any loss
thereon;
(d) Qualified Nonelective Contributions, if any, plus any income and minus
any loss thereon;
(e) Qualified Matching Contributions, if any, plus any income and minus
any loss thereon;
(f) Prior Employer Contributions, if any, plus any income and minus any
loss thereon;
(g) Elective Deferral Contributions, if any, plus any income and minus any
loss thereon;
(h) Employee Contributions, if any, plus any income and minus any loss
thereon;
(i) QVEC Contributions, if any, plus any income and minus any loss
thereon.
(j) Rollover Contributions, if any, plus any income and minus any loss
thereon;
A Participant's Account shall be invested in accordance with rules
established by the Plan Administrator that shall be applied in a
consistent and nondiscriminatory manner.
1.45 PARTICIPANT'S EMPLOYER STOCK ACCOUNT. The term Participant's Employer Stock
Account means that portion, if any, of the Participant's Account which is
invested in shares of the Employer's stock. Such Participant's Employer
Stock Account shall be credited with dividends paid, if any. Such
Participant's Employer Stock Account will be valued on each day that the
public exchange, over which the Employer's stock is traded, is open for
unrestricted trading.
Amounts that are invested in the Participant's Employer Stock Account may
be invested in any short term account prior to actual investment in the
Participant's Employer Stock Account.
As elected by the Employer in the Adoption Agreement:
(a) The Trustee will vote the shares of the Employer's stock invested in
the Participant's Employer Stock Account; or
(b) The Trustee will vote the shares of the Employer's stock in accordance
with any instructions received by the Trustee from the Participant.
The Trustee may request voting instructions from the Participants
provided this is done in a consistent and nondiscriminatory manner.
Article I - Definitions 15 October 27, 1995
<PAGE>
The ability of a Participant who is subject to the reporting requirements
of section 16(a) of the Securities Exchange Act of 1934 (the "Act") to make
withdrawals or investment changes involving the Participant's Employer
Stock Account may be restricted by the Plan Administrator to comply with
the rules under section 16(b) of the Act.
A money purchase pension plan making an initial investment in shares of the
Employer's stock after December 31, 1974, may not acquire shares to the
extent that the aggregate fair market value of the Employer's stock held by
the Plan will exceed 10 percent of the fair market value of the assets of
the Plan.
1.46 PARTNER. The term Partner means a member of a Partnership.
1.47 PARTNERSHIP. The term Partnership means a partnership as defined in Code
section 7701(a)(2) and the regulations thereunder and includes a syndicate,
group, pool, joint venture, or other unincorporated organization through or
by means of which any business, financial operation, or venture is carried
on, and which is not a corporation or a trust or estate within the meaning
of the Code- A joint undertaking merely to share expenses is not a
Partnership. In addition, mere co-ownership of property which is
maintained, kept in repair, and rented or leased does not constitute a
Partnership.
1.48 PERSON. The term Person means any natural person, partnership, corporation,
trust or estate.
1.49 PLAN. The term Plan means this Connecticut General Life Insurance Company
Defined Contribution Plan and the Adoption Agreement as adopted by the
Employer and as both may be amended from time to time.
1.50 PLAN ADMINISTRATOR. The term Plan Administrator means the Person or Persons
designated by the Employer in its Adoption Agreement and any successors
thereto. If more than one Person shall be designated, the committee thus
formed shall be known as the Administrative Committee and all references in
the Plan to the Plan Administrator shall be deemed to apply to the
Administrative Committee. The Plan Administrator shall signify in writing
his acceptance of his responsibility as a Named Fiduciary.
1.51 PLAN YEAR. The term Plan Year means the Inconsecutive month period
specified by the Employer in the Adoption Agreement.
If the Plan Year changes to a different 12-consecutive month period, the
first new Plan Year shall begin before the end of the last old Plan Year.
In this event, the period beginning on the first day of the last old Plan
Year and ending on the day before the first day of the first new Plan Year
shall be treated as a short Plan Year for purposes of determining Highly
Compensated Employees, performing the Nondiscrimination Tests set forth in
Section 4A, and applying the Top-Heavy provisions of Section 7A. However,
Service will be credited in accordance with the provisions of Section 2A.8.
Article I - Definitions 16 March 27, 1996
<PAGE>
1.52 PREVAILING WAGE LAW. The term Prevailing Wage Law means any statute or
ordinance that requires the Employer to pay its Employees working on public
contracts at wage rates not less than those determined pursuant to that
statute classes of workers in the geographical area where the contract is
performed, including the Davis-Bacon Act and similar Federal, state, or
municipal prevailing wage statutes.
1.53 PRIOR EMPLOYER CONTRIBUTIONS. The term Prior Employer Contributions means
contributions made by the Employer prior to the date indicated on the
Adoption Agreement.
1.54 PRIOR REQUIRED EMPLOYEE CONTRIBUTIONS. The term Prior Required Employee
Contributions means Employee post-tax contributions that the Employer
required as either a condition of participation, or for receiving an
Employer contribution, prior to the date indicated on the Adoption
Agreement.
1.55 PRIOR VOLUNTARY EMPLOYEE CONTRIBUTIONS. The term Prior Voluntary Employee
Contributions means post-tax contributions made voluntarily by an Employee
prior to the date indicated on the Adoption Agreement.
1.56 QDRO. The term QDRO means a Qualified Domestic Relations Order as
determined in accordance with Code section 414(p) and regulations
thereunder.
1.57 QUALIFIED MATCHING CONTRIBUTIONS. The term Qualified Matching Contributions
means Matching Contributions which are subject to the distribution and
nonforfeitability requirements of Code section 401(k) when made.
1.58 QUALIFIED NONELECTIVE CONTRIBUTIONS. The term Qualified Nonelective
Contributions means Nonelective Contributions made by the Employer and
allocated to Participants' accounts that the Participants may not elect to
receive in cash until distributed from the Plan; that are nonforfeitable
when made; and that are distributable only in accordance with the
distribution provisions that are applicable to Elective Deferral
Contributions and Qualified Matching Contributions.
1.59 QVEC CONTRIBUTIONS. The term QVEC Contributions means voluntary amounts
contributed by the Participant prior to January 1, 1987, which the
Participant designated in writing were eligible for a tax deduction under
Code section 219(a).
QVEC Contributions will be maintained in a separate account, which will be
nonforfeitable (i.e., 100% vested) at all times. The account will share in
the gains and losses under the Plan in the same manner as described in
Section SA.3 of the Plan.
1.60 REQUIRED EMPLOYEE CONTRIBUTIONS. The term Required Employee Contributions
means Employee post-tax contributions that the Employer requires either as
a condition of participation or for receipt of an Employer contribution.
1.61 ROLLOVER CONTRIBUTION. The term Rollover Contribution means an amount
representing all or part of a distribution from a pension or profit sharing
plan meeting the requirements of Code section 401(a), which is eligible for
Article I - Definitions 17 March 27, 1996
<PAGE>
rollover to this Plan in accordance with the requirements set forth in Code
section 402 (including Direct Rollovers) or Code section 408(d)(3),
whichever is applicable.
1.62 SALARY DEFERRAL AGREEMENT. The term Salary Deferral Agreement means an
agreement between a Participant and the Employer to defer receipt of a
portion of the Participant's Compensation by making Elective Deferral
Contributions to the Plan.
1.63 SELF-EMPLOYED INDIVIDUAL. The term Self-Employed Individual means an
individual who has Earned Income for the taxable year from the trade or
business for which the Plan is established; also, an individual who would
have Earned Income but for the fact that the trade or business had no net
profits for the taxable year.
1.64 SERIOUS FINANCIAL HARDSHIP. The term Serious Financial Hardship means an
immediate and heavy financial need of the Participant where such
Participant lacks the available resources to meet the hardship. The Plan
Administrator shall make a determination of whether a Serious Financial
Hardship exists in accordance with the applicable provisions of Section 3E.
1.65 SHAREHOLDER-EMPLOYEE. The term Shareholder-Employee means an Employee or
officer of an electing small business S corporation who owns (or is
considered as owning within the meaning of Code section 318(a)(1)), on any
day during the taxable year of such corporation, more than 5% of the
outstanding stock of the corporation.
1.66 SOCIAL SECURITY INTEGRATION LEVEL. The term Social Security Integration
Level means the Social Security Taxable Wage Base or such lesser amount
specified by the Employer in the Adoption Agreement. If the Social Security
Taxable Wage Base is amended, the Social Security Integration Level will be
deemed to have been amended.
1.67 SOCIAL SECURITY TAXABLE WAGE BASE. The term Social Security Taxable Wage
Base means the contribution and benefit base in effect under section 230 of
the Social Security Act at the beginning of the Plan Year.
1.68 SPONSORING ORGANIZATION. The term Sponsoring Organization means Connecticut
General Life Insurance Company, a legal reserve life insurance company of
Hartford, Connecticut.
1.69 SPOUSE. The term Spouse means the lawful wife of a male Participant, or the
lawful husband of a female Participant. However, a former Spouse will be
treated as the Spouse or surviving Spouse and a current Spouse will not be
treated as the Spouse or surviving Spouse to the extent provided under a
QDRO.
1.70 STRAIGHT LIFE ANNUITY. The term Straight Life Annuity means an annuity
payable in equal installments for the life of the Participant, and that
terminates upon the Participant's death.
Article I - Definitions 18 March 27, 1996
<PAGE>
1.71 TERMINATION OF EMPLOYMENT. The term Termination of Employment means a
severance of the Employer-Employee relationship which occurs prior to a
Participant's Normal Retirement Age for any reason other than Early
Retirement, Disability, or death.
1.72 TRUE-UP CONTRIBUTIONS. The term True-Up Contributions means Additional
Matching Contributions made to the Plan by the Employer so that total
Matching Contributions for each Participant are calculated on an annual
basis rather than on the basis selected by the Employer in the Adoption
Agreement.
1.73 TRUST. The term Trust means the Trust Agreement if the Employer specifies
in the Adoption Agreement that the Plan is Trusteed. The Trust Agreement is
entered into by the Employer, the Plan Administrator and the Trustee by
completing and signing the Adoption Agreement, which Trust Agreement forms
a part of, and implements the provisions of the Plan as it applies to the
Employer. If the Employer specifies in the Adoption Agreement that the Plan
is Non-Trusteed, then the terms and provisions of this Plan relating to the
Trust shall be of no force and effect.
1.74 TRUSTEE. The term Trustee means the trustee(s) designated by the Employer
in its Adoption Agreement, if applicable, and any successors thereto.
1.75 VESTED INTEREST. The term Vested Interest means the nonforfeitable right to
an immediate or deferred benefit on any date in the amount which is equal
to the sum of (a), (b) and (c) below:
(a) The value on that date of that portion of the Participant's Account
that is attributable to and derived from Employee Contributions, if
any;
(b) The value on that date of the portion of the Participant's Account
attributable to Elective Deferral Contributions, if any; Qualified
Nonelective Contributions, if any; QVEC Contributions, if any;
Rollover Contributions, if any; and Qualified Matching Contributions,
if any;
(c) The value on that date of that portion of the Participant's Account
that is attributable to and derived from contributions made by the
Employer (and Forfeitures, if any), multiplied by his Vesting
Percentage determined on the date applicable.
Employer contributions described in subsection (c), plus the earnings
thereon, shall be, at any relevant time, a part of the Participant's Vested
Interest equal to an amount ("X") determined by the following formula:
X = P(AB+D)-D
For purposes of applying this formula:
P = The Participant's Vesting Percentage at the relevant time.
Article I - Definitions 19 March 27, 1996
<PAGE>
AB = The account balance attributable to such contributions, plus the
earnings thereon, at the relevant time.
D = The amount of any distribution.
1.76 VESTING PERCENTAGE. The term Vesting Percentage means the Participant's
nonforfeitable interest in Money Purchase Pension Contributions, Matching
Contributions, Nonelective Contributions, or Prior Employer Contributions
credited to his Participant's Account, plus any income and minus any loss
thereon. The Vesting Percentage for each such Employer contribution is
computed in accordance with one of the schedules listed below, based on
Years of Service with the Employer, as specified by the Employer in its
Adoption Agreement:
(a) 100% full and immediate;
(b) 100% after 3 Years of Service;
(c) 20% per Year of Service, 100% at S Years of Service;
(d) 20% after 3 Years of Service, 20% per Year of Service thereafter, 100%
at 7 Years of Service;
(e) 20% after 2 Years of Service, 20% per Year of Service thereafter, 100%
at 6 Years of Service;
(f) 100% after 5 Years of Service;
(g) 25% after 1 Year of Service, 100% after 4 Years of Service;
(h) Other.
However, if a Participant dies prior to attaining his Normal Retirement
Age, his Vesting Percentage shall be 100%.
1.77 VOLUNTARY EMPLOYEE CONTRIBUTIONS. The term Voluntary Employee Contributions
means post-tax contributions made voluntarily by an Employee.
Article I - Definitions 20 March 27, 1996
<PAGE>
ARTICLE II - GENERAL PROVISIONS
2A. SERVICE
2A.1 SERVICE. The term Service means active employment with the Employer as an
Employee.
2A.2 ABSENCE FROM EMPLOYMENT. Absence from employment on account of a leave of
absence authorized by the Employer pursuant to the Employer's established
leave policy will be counted as employment with the Employer provided that
such leave of absence is of not more than two years duration. Absence from
employment on account of active duty with the Armed Forces of the United
States will be counted as employment with the Employer. If the Employee
does not return to active employment with the Employer, his Service will be
deemed to have ceased on the date the Plan Administrator receives notice
that the Employee will not return. The Employer's leave policy shall be
applied in a uniform and nondiscriminatory manner to all Participants under
similar circumstances.
For purposes of determining an Employee's eligibility and vesting status
for periods while the Employee is absent from work for reasons covered
under the Family and Medical Leave Act, Service will be credited in
accordance with and to the extent required by the provisions of the Family
and Medical Leave Act.
If the Employer has elected in the Adoption Agreement to determine Service based
upon 1,000 Hours, then the following Sections 2A.3 through 2A.8 shall apply.
2A.3 HOUR OF SERVICE. The term Hour of Service means:
(a) Each hour for which an Employee is directly or indirectly paid, or
entitled to payment, by the Employer for the performance of duties.
These hours shall be credited to the Employee for the Computation
Period or Periods, as defined in Section 2A.5, in which the duties
were performed; and
(b) Each hour for which an Employee is paid or entitled to payment, by the
Employer on account of a period of time during which no duties are
performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of absence. No
more than 501 Hours of Service will be credited under this paragraph
for a single Computation Period (whether or not the period occurs in a
single Computation Period). Hours under this paragraph will be
calculated and credited pursuant to section 2530.200b-2 of the
Department of Labor regulations which are incorporated herein by this
reference; and
(c) Each hour for which back pay, irrespective of mitigation of damages,
has been either awarded or agreed to by the Employer. The same Hours
of Service will not be credited under subsection (a) or subsection
(b), as the case may be, and under this subsection (c). These hours
shall be credited to the Employee for the Computation Period or
periods to which the award or agreement pertains rather than the
Article II - General Provisions 21 October 26, 1995
<PAGE>
Computation Period in which the award, agreement or payment is made;
and Hours of Service will be credited for employment with other
members of an affiliated service group (under Code section 414(m)), a
controlled group of corporations (under Code section 414(b)), or a
group of trades or businesses under common control (under Code section
414(c)), of which the adopting Employer is a member, and any other
entity required to be aggregated with the Employer pursuant to Code
section 414(o).
Hours of Service will also be credited for any individual considered an
Employee for purposes of this Plan under Code sections 414(n) or 414(o).
Solely for purposes of determining whether a 1-Year Break-in-Service, as
defined in Section 2A.4, for participation and vesting purposes has
occurred in a Computation Period, an individual who is absent from work for
maternity or paternity reasons shall receive credit for the Hours of
Service which would otherwise have been credited to such individual but for
such absence, or in any case in which such hours cannot be determined,
eight (8) Hours of Service per day of such absence. For purposes of this
paragraph, an absence from work for maternity or paternity reasons means an
absence (1) by reason of the pregnancy of the individual, (2) by reason of
a birth of a child of the individual, (3) by reason of the placement of a
child with the individual in connection with the adoption of such child by
such individual, or (4) for purposes of caring for such child for a period
beginning immediately following such birth or placement. The Hours of
Service credited under this paragraph shall be credited (1) in the
Computation Period in which the absence begins if the crediting is
necessary to prevent a Break-in-Service in that period, or (2) in all other
cases, in the following Computation Period.
Service shall be determined on the basis of the method selected in the
Adoption Agreement.
2A.4 1-YEAR BREAK-IN-SERVICE. The term 1-Year Break-in-Service means any
Computation Period during which an Employee fails to complete more than 500
Hours of Service.
2A.5 YEAR(S) OF SERVICE. The term Year(s) of Service means a 12-consecutive
month period ("Computation Period") during which an Employee has completed
at least 1,000 Hours of Service.
(a) Eligibility Computation Period. For purposes of determining Years of
Service and Breaks-in-Service for eligibility, the 12-consecutive
month period shall begin with the date on which the Employee first
performs an Hour of Service for the Employer and, where additional
periods are necessary, succeeding anniversaries of his employment
commencement date. The employment commencement date is the date on
which the Employee first performs an Hour of Service for the Employer
maintaining the Plan.
(b) Vesting Computation Period. As elected by the Employer in the Adoption
Agreement, for computing Years of Service and Breaks-in-Service for
vesting, the Inconsecutive month period:
(1) Shall be the Plan Year; or
Article II - General Provisions 22 October 26, 1995
<PAGE>
(2) Shall begin with the date on which the Employee first performs an
Hour of Service for the Employer and, where additional periods
are necessary, succeeding anniversaries of that date.
However, active participation as of the last day of the Plan Year is
not required in order for a Participant to be credited with a Year of
Service for vesting purposes.
(c) Contribution Computation Period. If the Employer specifies an annual
Contribution Period in its Adoption Agreement for the purpose of
determining a Participant's eligibility to receive a contribution, the
Inconsecutive month period shall be any Plan Year during which the
Participant is credited with at least 1,000 Hours of Service. However,
when an Employee first becomes a Participant or resumes active
participation in the Plan following a 1-Year Break-in-Service on a
date other than the first day of the Plan Year, all Hours of Service
credited to the Participant during that Plan Year, including those
Hours credited prior to the date the Employee enrolls (or reenrolls)
as an Participant in the Plan shall be counted. Furthermore, the
Employer may require in its Adoption Agreement that a Participant be a
Participant as of the last day of the Plan Year in order to be
eligible to receive a contribution for a Plan Year.
(d) If in its Adoption Agreement the Employer permits Early Retirement,
the Inconsecutive month period for determining Early Retirement shall
be the Plan Year. However, active participation as of the last day of
the Plan Year is not required in order for a Participant to be
credited with a Year of Service.
Service with a predecessor organization of the Employer shall be treated as
Service with the Employer for the purposes of subsections (a), (b) and (d)
above in any case in which the Employer maintains the plan of such
predecessor organization. In addition, if elected by the Employer in the
Adoption Agreement, service with a predecessor organization of the Employer
shall be treated as Service with the Employer, even if the Employer does
not maintain the plan of such predecessor organization.
If elected in the Adoption Agreement, service with a subsidiary or
affiliate of the Employer that is not related to the Employer under the
provisions of Code sections 414(b), (c) or (m) shall be treated as Service
with the Employer for purposes of (a), (b) and (d) above.
2A.6 DETERMINING VESTING PERCENTAGE. Vesting credit shall be given for each Year
of Service except those periods specifically excluded in the Adoption
Agreement.
If a Participant completes less than 1,000 Hours of Service during a Plan
Year while remaining in the service of the Employer, his Vesting Percentage
shall not be increased for such Plan Year. However, at such time as the
Participant again completes at least 1,000 Hours of Service in any
subsequent Plan Year, his Vesting Percentage shall then take into account
all Years of Service with the Employer except those specifically excluded
in the Adoption Agreement.
Article II - General Provisions 23 October 26, 1995
<PAGE>
If an individual who ceases to be an Employee and, is subsequently rehired
as an Employee enrolls (or reenrolls) in the Plan, upon his participation
(or reparticipation) his Vesting Percentage shall then take into account
all Years of Service except those specifically excluded in the Adoption
Agreement.
In the case of a Participant who has 5 consecutive 1-Year
Breaks-in-Service, all Years of Service after such Breaks-in-Service will
be disregarded for the purpose of vesting the Employer-derived account
balance that accrued before such breaks. However, both pre-break and
post-break Service will count for the purpose of vesting the
Employer-derived account balance that accrues after such Breaks-in-Service.
Both accounts will share in the earnings and losses of the fund.
In the case of a Participant who does not have 5-consecutive 1-Year
Breaks-in-Service, both the pre-break and post-break Service will count in
vesting both the pre-break and post-break Employer-derived account balance.
2A.7 EXCLUDED YEARS OF SERVICE FOR VESTING. In determining the Vesting
Percentage of an Employee, all Years of Service with the Employer(s)
maintaining the Plan shall be taken into account, except that the following
periods may be excluded, as specified by the Employer in its Adoption
Agreement:
(a) Years of Service prior to the time a Participant attained age 18;
(b) Years of Service during which the Employer did not maintain the Plan
or a predecessor plan;
(c) Years of Service during a period for which the Employee made no
Required Employee Contributions;
(d) Years of Service prior to any 1-Year Break-in-Service, until the
Employee completes one Year of Service following such 1-Year
Break-in-Service.
(e) in the case of an Employee who has no Vested Interest in Employer
contributions, Years of Service before any period of consecutive
1-Year Breaks-in-Service if the number of such consecutive 1-Year
Breaks-in-Service equals or exceeds the greater of (i) 5, or (ii) the
total number of Years of Service before such break.
For the purposes of this Section, a predecessor plan shall mean a plan of
the Employer that was terminated within five years preceding or following
the Effective Date of this Plan.
2A.8 CHANGE IN PLAN YEARS. If the Plan Year is changed, the following special
rules shall apply.
(a) Vesting Computation Periods. If the Vesting Computation Period is the
Plan Year, Years of Service and 1-Year Breaks-in-Service shall be
measured over two overlapping 12-consecutive month periods. The first
such period shall begin on the first day of the last old Plan Year and
Article II - General Provisions 24 March 27, 1996
<PAGE>
the second such period shall begin on the first day of the first new
Plan Year, thereby creating an overlap. All Hours of Service performed
during the overlap period must be counted in both Vesting Computation
Periods. A Participant who completes at least 1,000 Hours of Service
during each such period shall be credited with two Years of Service
for Vesting.
(b) Contribution Computation Periods. To determine a Participant's
eligibility to receive a contribution for a short Plan Year, the 1,000
Hours of Service requirement shall be prorated by multiplying by a
fraction, the numerator of which is the number of full months in the
short Plan Year and the denominator of which is 12.
If the Employer has elected in the Adoption Agreement to determine Service based
upon Elapsed Time, then the following Sections 2A.9 and 2A.10 shall apply.
2A.9 ELAPSED TIME. If the Employer has selected an eligibility requirement in
the Adoption Agreement that is or includes a fractional Year(s) of Service
requirement, the provisions of this Section shall apply.
(a) For purposes of determining an Employee's initial or continued
eligibility to participate in the Plan, or the Participant's Vested
Interest in Employer contributions, an Employee will receive credit
for the aggregate of all time period(s) commencing with the Employee's
first day of employment or reemployment and ending on the date a
Break-in-Service (as defined in this Section) begins. The first day of
employment or reemployment is the first day the Employee performs an
Hour of Service. An Employee will also receive credit for any Period
of Severance of less than Inconsecutive months. Fractional periods of
a year will be expressed in terms of days.
(b) For purposes of this Section, "Hour of Service" shall mean each hour
for which an Employee is paid or entitled to payment for the
performance of duties for the Employer.
(c) For purposes of this Section, a "Break-in-Service" is a, Period of
Severance of at least 12 consecutive months.
(d) A "Period of Severance" is a continuous period of time during which
the Employee is not employed by the Employer. Such period begins on
the date the Employee retires, quits or is discharged, or if earlier,
the 12-month anniversary of the date on which the Employee was
otherwise first absent from Service.
(e) In the case of an individual who is absent from work for maternity or
paternity reasons, the 12-consecutive month period beginning on the
first anniversary of the first day of such absence shall not
constitute a Break-in-Service. For purposes of this paragraph, an
absence from work for maternity or paternity reasons means an absence
(1) by reason of the pregnancy of the individual, (2) by reason of the
birth of a child of the individual, (3) by reason of the placement of
a child with the individual in connection with the adoption of such
child by such individual, or (4) for purposes of for purposes of
Article II - General Provisions 25 October 26, 1995
<PAGE>
caring for such child for a period beginning immediately following
such birth or placement.
Each Employee will share in Employer contributions for the period
beginning on the date the Employee commences participation under the
Plan and ending on the date on which such Employee severs employment
with the Employer or is no longer a member of an eligible class of
Employees.
(f) If the Employer is a member of an affiliated service group (under Code
section 414(m)), a controlled group of corporations (under Code
section 414(b)), a group of trades or businesses under common control
(under Code section 414(c)) or any other entity required to be
aggregated with the Employer pursuant to Code section 414(o), Service
will be credited for any employment for any period of time for any
other member of such group. Service will also be credited for any
individual required under Code section 414(n) or Code section 414(o)
to be considered an Employee of any Employer aggregated under Code
sections 414(b), (c), or (m) of such group.
2A.10EXCLUDED-PERIODS OF SERVICE FOR VESTING. In determining the Vesting
Percentage of an Employee, all Periods of Service with the Employer(s)
maintaining the Plan shall be taken into account, except that the following
Periods may be excluded, as specified by the Employer in its Adoption
Agreement:
(a) Periods of Service prior to the time a Participant attained age 18;
(b) Periods of Service during which the Employer did not maintain the Plan
or a predecessor plan;
(c) Periods of Service during which the Employee made no Required Employee
Contributions;
(d) Periods of Service prior to any one-year Period of Severance, until
the Employee completes a one-year period of Service following such
Period of Severance;
(e) In the case of an Employee who has no Vested Interest in Employer
contributions, Periods of Service before any Period of Severance if
the number of consecutive one-year Periods of Severance equals or
exceeds the greater of (i) 5, or (ii) the total number of one-year
Periods of Service before such Period of Severance.
For the purposes of this Section, a predecessor plan shall mean a plan of
the Employer that was terminated within five years preceding or following
the Effective Date of this Plan.
2B. ELIGIBILITY, ENROLLMENT AND PARTICIPATION
2B.1 ELIGIBILITY. Each Employee shall be eligible to participate in the Plan and
receive an appropriate allocation of Employer contributions as of the Entry
Date following the day he
Article II - General Provisions 26 October 26, 1995
<PAGE>
meets the following requirements,-if any, specified by the Employer in its
Adoption Agreement, relating to:
(a) Required service;
(b) Minimum attained age;
(c) Job class requirements.
In addition to the eligibility conditions stated above, the Employer may
specify in the Adoption Agreement certain groups of Employees who are not
eligible to participate in the Plan.
Notwithstanding the foregoing, if the Employer's Plan as set forth herein
replaces or amends a preceding plan, then those Employees participating
under the Plan as written prior to such replacement or amendment shall be
eligible to be Participants hereunder without regard to length of Service
or minimum attained age otherwise required herein.
2B.2 ENROLLMENT. Each eligible Employee may enroll as of his Entry Date by
completing and delivering to the Plan Administrator an enrollment form and,
if applicable, a payroll deduction authorization and/or a Salary Deferral
Agreement.
23.3 REEMPLOYED PARTICIPANT. In the case of an individual who ceases to be an
Employee and is subsequently rehired as an Employee, the following
provisions shall apply in determining eligibility to again participate in
the Plan:
(a) If the Employee had met the eligibility requirements as specified in
Section 2B.1, such Employee will become a Participant in the Plan in
accordance with Section 2B.2 as of the date he is reemployed as an
Employee.
(b) If the Employee had not formerly met the eligibility requirements
specified in Section 2B.1, such Employee will become a Participant in
the Plan after meeting the requirements of Section 2B.1 in accordance
with Section 2B.2.
2B.4 ELIGIBLE CLASS. If a Participant becomes ineligible to participate because
he is no longer a member of an eligible class of Employees, such Employee
shall participate immediately upon his return to an eligible class of
Employees. If such Participant incurs a Break-in-Service, eligibility will
be determined under the Break-in-Service rules of the Plan.
If an Employee who is not a member of the eligible class of Employees
becomes a member of the eligible class, such Employee shall participate
immediately if such Employee has satisfied the minimum age and Service
requirements and would have previously become a Participant had he been in
the eligible class. If such Participant incurs a Break-in-Service,
eligibility will be determined under the Break-in-Service rules of the
Plan.
Article II - General Provisions 27 October 26, 1995
<PAGE>
2B.5 WAIVER OF PARTICIPATION. Notwithstanding any provision of the Plan to the
contrary, if Required Employee Contributions are elected by the Employer in
the Adoption Agreement, any Employee in accordance with the rules of the
Plan may decline to become a Participant or cease to be a Participant by
filing a written waiver of participation with the Plan Administrator in the
manner prescribed. Such waiver must be filed prior to the date such
Employee is eligible to become a Participant, or in the case of a current
Participant, in the last month of the Plan Year immediately preceding the
Plan Year for which he wishes to cease being a Participant.
Any Employee who files such a waiver shall not become a Participant, or if
a current Participant, shall elect to cease to be such as of the first day
of the succeeding Plan Year; and such Employee shall not receive any
additional Compensation or other sums by reason of his waiver of
participation.
Any such waiver may be rescinded by an Employee who is not a Partner
effective on the first day of the first Plan Year following one or more
Plan Years commencing after the filing of such waiver in which he was not a
Participant, in which event he shall become a Participant, or again become
a Participant, as the case may be, effective as of such date. A Partner may
make a one-time irrevocable waiver of participation upon the later of his
commencement of employment with the Employer or the date he is first
eligible to participate in the Plan.
No Employee who is eligible to participate in a standardized plan may waive
participation or voluntarily reduce his or her Compensation for purposes of
this Plan.
2B.6 TRADES OR BUSINESSES CONTROLLED BY OWNER-EMPLOYEES. If this Plan provides
contributions or benefits for one or more Owner-Employees who control both
the business for which this Plan is established and one or more other
trades or businesses, this Plan and any plans established for other trades
or businesses must, when looked at as a single plan, satisfy Code sections
401(a) and (d) for the Employees of this and all other trades or
businesses. If the Plan provides contributions or benefits for one or more
Owner-Employees who control one or more other trades or businesses, the
employees of the other trades or businesses must be included in a plan
which satisfies Code sections 401(a) and (d) and which provides
contributions and benefits not less favorable than those provided for
ownerEmployees under this Plan.
If an individual is covered as an Owner-Employee under the plans of two or
more trades or businesses which he does not control and the individual
controls a trade or business, then the contributions or benefits of the
Employees under the plan of the trades or businesses which he does control
must be as favorable as those provided for him under the most favorable
plan of the trade or business which he does not control.
For purposes of the preceding paragraphs, an Owner-Employee or two or more
OwnerEmployees will be considered to control a trade or business if the
Owner-Employee or two or more Owner-Employees together:
(1) own the entire interest in an unincorporated trade or business, or
Article II - General Provisions 28 October 26, 1995
<PAGE>
(2) in the case of a partnership, own more than 50 percent of either the
capital interest or the profits interest in the partnership.
For purposes of the preceding sentence, an Owner-Employee or two or more
OwnerEmployees shall be treated as owning any interest in a Partnership
that is owned, directly or indirectly, by a Partnership which such
Owner-Employee or such two or more OwnerEmployees are considered to control
within the meaning of the preceding sentence.
2C. CONTRIBUTIONS AND ALLOCATIONS
2C.1 PROFIT SHARING/THRIFT PLAN WITH 401(k) FEATURE.
(a) Contributions - Employer.
For each Plan Year, as specified in the Adoption Agreement, the
Employer shall make one or more of the following contributions.
(1) Elective Deferral Contributions.
(2) Matching Contributions.
(3) Nonelective Contributions.
(b) Contributions - Participant.
For each Plan Year, as specified in the Adoption Agreement, each
Participant may make periodic Required Employee Contributions or
Voluntary Employee Contributions.
For Plans that contain a CODA, a Participant may elect to make a
Voluntary Employee Contribution in a lump sum. Such lump sum Voluntary
Employee Contribution may be made (1) as of the Effective Date, or (2)
as elected by the Employer in the Adoption Agreement. Voluntary
Employee Contributions shall be subject to the terms of Section 4B.
(c) Fail-Safe Contribution.
The Employer reserves the right to make a discretionary Nonelective
Contribution to the Plan for any Plan Year, if the Employer determines
that such a contribution is necessary to ensure the Actual Deferral
Percentage test or the Actual Contribution Percentage test will be
satisfied for that Plan Year. Such amount shall be designated by the
Employer at the time of contribution as a Qualified Nonelective
Contribution and shall be known as a Fail-Safe Contribution.
The Fail-Safe Contribution shall be made on behalf of all eligible
non-Highly Compensated Employees who are Participants and who are
considered under the Actual Deferral Percentage test or, if
Article II - General Provisions 29 October 26, 1995
<PAGE>
applicable, the Actual Contribution Percentage test, and shall be
allocated to the Participant's Account of each such Participant in an
amount equal to a fixed percentage of such Participant's Compensation.
The fixed percentage shall be equal to the minimum fixed percentage
necessary to be contributed by the Employer on behalf of each eligible
non-Highly Compensated Employee who is a Participant so that the
Actual Deferral Percentage test or, if applicable, the Actual
Contribution Percentage test, is satisfied.
(d) Contributions - Changes.
For each Plan Year, a Participant may change the amount of his
Required Employee Contributions, Voluntary Employee Contributions, or
Elective Deferral Contributions as often as the Plan Administrator
allows (on a consistent and nondiscriminatory basis), on certain dates
prescribed by the Plan Administrator.
(e) Contributions - Timing.
(1) Elective Deferral Contributions shall be paid by the Employer to
the Trust or the Insurance Company, as elected by the Employer in
the Adoption Agreement, but never later than 90 days following
the date of deferral.
(2) Matching Contributions made on other than an annual basis shall
be paid to the Trust or Insurance Company, as elected by the
Employer in the Adoption Agreement. Matching Contributions,
including Additional Matching Contributions, made on an annual
basis shall be paid to the Trust or the Insurance Company, as
applicable, at the end of the Plan Year, or as soon as possible
on or after the last day of such Plan Year, but in no event later
than the date prescribed by law for filing the Employer's income
tax return, including any extension thereof. To the extent that
Matching Contributions are used to purchase Life Insurance
Policies, then such contributions for any Plan Year may be paid
to the Trust when premiums for such Policies are due during the
Plan Year.
(3) Nonelective Contributions made on other than an annual basis
shall be paid to the Trust or Insurance Company, as applicable,
as elected by the Employer in the Adoption Agreement. Nonelective
Contributions made on an annual basis shall be paid to the Trust
or the Insurance Company, as applicable, at the end of the Plan
Year, or as soon as possible on or after the last day of such
Plan Year, but in any event not later than the date prescribed by
law for filing the Employer's income tax return, including any
extension thereof. To the extent that Nonelective Contributions
are used to purchase Life Insurance Policies, then such
contributions for any Plan Year may be paid to the Trust when
premiums for such Policies are due during the Plan Year.
(4) Employee Contributions shall be transferred by the Employer to
the Trust or the Insurance Company, as elected by the Employer in
the Adoption Agreement, but never later than 90 days following
the date such contributions are made by the Employee.
Article II - General Provisions 30 October 26, 1995
<PAGE>
(5) The Fail-Safe Contribution for any Plan Year as determined above
shall be paid to the Insurance Company at the end of the Plan
Year, or as soon as possible on or after the last day of such
Plan Year, but in no event later than the date which is
prescribed by law for filing the Employer's income tax return,
including any extensions thereof.
(f) Contributions - Allocations.
The allocation of Nonelective Contributions shall be made in
accordance with (1), (2), (3) or (4) below, as specified by the
Employer in the Adoption Agreement.
(1) Formula A: Compensation Ratio - Not Integrated with Social
Security.
The allocation to each Participant shall be made in the
proportion that the Compensation paid to each Participant
eligible to receive an allocation bears to the Compensation paid
to all Participants eligible to receive an allocation.
(2) Formula B: Integrated with Social Security - Step Rate Method.
Base Contribution: An amount equal to a percentage (as specified
in the Adoption Agreement) of the Compensation of each
Participant up to the Social Security Integration Level;
Excess Contribution: In addition, an amount equal to a percentage
(as specified in the Adoption Agreement) of the Participant's
Compensation which is in excess of the Social Security
Integration Level, subject to the Limitations on Allocations in
accordance with Section 4B. This Excess Contribution percentage
shall not exceed the lesser of:
(A) twice -the Base Contribution or
(B) the Base Contribution plus the greater of:
(i) the old age insurance portion of the Old Age Survivor
Disability (OASDI) tax rate; or
(ii) 5.7%.
If the Employer has elected in the Adoption Agreement to use a
Social Security Integration Level that in any Plan Year is the
greater of $ 10,000 or 20% but less than 100% of the Social
Security Taxable Wage Base, then the 5.7% limitation specified in
2C.1(0(2)(B)(ii) shall be adjusted in accordance with the
following table:
Article II - General Provisions 31 October 29, 1996
<PAGE>
- --------------------------------------------------------------------------------
If the Social Security integration Level Adjust
- ------------------------------------------------------------------ 5.7% to
is more than but not more than
- --------------------------------------------------------------------------------
the greater of $10,000 or 20% of 80% of the Social Security 4.3%
the Social Security Taxable Taxable Wage Base
Wage Base
80% of the Social Security 100% of the Social Security 5.4%
Taxable Wage Base Taxable Wage Base
- --------------------------------------------------------------------------------
In the case of any Participant who has exceeded the Cumulative
Permitted Disparity Limit described in Section 2C.1(g),
Nonelective Contributions shall be allocated in an amount equal
to the Excess Contribution percentage of two times such
Participant's total Compensation for the Plan Year.
Any remaining Nonelective Contributions or Forfeitures will be
allocated to each Participant's Account in the ratio that each
Participant's total Compensation for the Plan Year bears to all
Participants' total Compensation for that Plan Year.
(3) Formula B: Integrated with Social Security - Maximum Disparity
Method.
Subject to the Limitations on Allocations specified in Section
4B, for each Plan Year the allocation to each Participant shall
be made in accordance with the following:
(A) An amount equal to 5.7% of the sum of each Participant's
total Compensation plus Compensation that is in excess of
the Social Security Integration Level shall be allocated to
each Participant's Account. If the Employer does not
contribute such amount for all Participants, an amount shall
be allocated to each Participant's Account equal to the same
proportion that each Participant's total Compensation plus
Compensation that is in excess of the Social Security
Integration Level bears to the total Compensation plus
Compensation in excess of the Social Security Integration
Level of all Participants in the Plan. In the case of any
Participant who has exceeded the Cumulative Permitted
Disparity Limit described in Section 2C.1(g), two times such
Participant's total Compensation for the Plan Year will be
taken into account.
If the Employer has elected in the Adoption Agreement to use
a Social Security Integration Level that in any Plan Year is
the greater of $10,000 or 20% but less than 100% of the
Social Security Taxable Wage Base, then the 5.7% limitation
specified in this subsection shall be adjusted in accordance
with the following table:
Article II - General Provisions 32 October 26, 1995
<PAGE>
- --------------------------------------------------------------------------------
If the Social Security integration Level Adjust
- ------------------------------------------------------------------ 5.7% to
is more than but not more than
- --------------------------------------------------------------------------------
the greater of $10,000 or 20% of 80% of the Social Security 4.3%
the Social Security Taxable Taxable Wage Base
Wage Base
80% of the Social Security 100% of the Social Security 5.4%
Taxable Wage Base Taxable Wage Base
- --------------------------------------------------------------------------------
(B) The balance of the Nonelective Contribution (if any), shall
be allocated to the Participant's Account in the proportion
that each Participant's Compensation bears to the total
Compensation of all Participants.
(4) Formula C: Flat Dollar Amount.
The allocation to each Participant shall be a flat dollar amount as
elected by the Employer in the Adoption Agreement. Formula C may not
be elected under a standardized plan.
(g) Allocation Requirements.
Employer contributions shall be allocated to the accounts of
Participants in accordance with the allocation requirement as
specified by the Employer in its Adoption Agreement. If the Employer
has adopted a standardized plan, the allocation of any nonannual
contribution made by the Employer shall be made to each Participant
who is a Participant on any day of the Contribution Period regardless
of Hours of Service.
Annual Overall Permitted Disparity Limit. Notwithstanding the
preceding paragraph, for any Plan Year this Plan benefits any
Participant who benefits under another qualified plan or simplified
employee pension plan, as defined in Code section 408(k), maintained
by the Employer that provides for permitted disparity (or imputes
disparity), Employer contributions and Forfeitures will be allocated
to the account of each Participant who either completes more than 500
Hours of Service during the Plan Year or who is employed as of the
last day of the Plan Year in the ratio that such Participant's total
Compensation bears to the total Compensation of all Participants.
Cumulative Permitted Disparity Limit. Effective for Plan Years
beginning on or after January 1, 1995, the Cumulative Permitted
Disparity Limit for a Participant is 35 total cumulative permitted
disparity years. Total cumulative permitted years mean the number of
years credited to the Participant for allocation or accrual purposes
under this Plan, any other qualified plan or simplified employee
pension plan (whether or not terminated) ever maintained by the
Employer. For purposes of determining the Participant's Cumulative
Permitted Disparity Limit, all years ending in the same calendar year
Article II - General Provisions 33 October 27, 1995
<PAGE>
are treated as the same year. If the Participant has not benefitted
under a defined benefit or target benefit plan for any year beginning
on or after January 1, 1994, the Participant has no Cumulative
Permitted Disparity Limit.
(h) Forfeitures.
Forfeitures will be used in the manner elected in the Adoption
Agreement as follows:
(1) To reduce Employer contributions or pay Plan expenses; or
(2) Allocated in accordance with the allocation formula elected in
the Adoption Agreement; or
(3) First, to reduce Employer contributions or pay Plan expenses,
with any remaining Forfeitures allocated in accordance with the
allocation formula elected in the Adoption Agreement.
(i) Expenses.
The Employer may contribute to the Plan the amount necessary to pay
any reasonable expenses of administering the Plan. In lieu of the
Employer contributing the amount necessary to pay such charges, these
expenses may be paid from Plan assets.
(j) Special Rules - Elective Deferral Contributions.
(1) Each Participant may elect to defer his Compensation in an amount
specified in the Adoption Agreement, subject to the limitations
of this Section. A Salary Deferral Agreement (or modification of
an earlier Salary Deferral Agreement) may not be made with
respect to Compensation which is currently available on or before
-the date the Participant executed such election, or if later,
the later of the date the Employer adopts this CODA, or the date
such arrangement first becomes effective. Any elections made
pursuant to this Section shall become effective as soon as
administratively feasible.
(2) If elected by the Employer in the Adoption Agreement, each
Participant may elect to defer and have allocated for a Plan Year
all or a portion of any cash bonus paid during the Plan Year. A
deferral election may not be made with respect to cash bonuses
which are currently available on or before the date the
Participant executed such election.
(3) Elective Deferral Contributions will be allocated to the
Participant's Account and shall be 100 percent vested and
nonforfeitable at all times.
(4) During any taxable year, no Participant shall be permitted to
have Elective Deferral Contributions made under this Plan, or any
other qualified plan maintained by the Employer, in excess of the
Article II - General Provisions 34 October 29, 1996
<PAGE>
maintained by the Employer, in excess of the dollar limitation
contained in Code section 402(g) in effect at the beginning of
such taxable year. If a Participant takes a withdrawal of
Elective Deferral Contributions due to a Serious Financial
Hardship, as provided in Section 3E.5, his Elective Deferral
Contributions for his taxable year immediately following the
taxable year of such distribution may not exceed the Code section
402(g) limit for such taxable year less the amount of Elective
Deferral Contributions made for the Participant in the taxable
year of the distribution.
(5) Elective Deferral Contributions that are not in excess of the
limits described in subsection (4) above shall be subject to the
Limitations on Allocations in accordance with Section 4B.
Elective Deferral Contributions that are in excess of the limits
described in (4) above shall also be subject to the Section 4B
limitations, as further provided in Section 4C.2.
(6) An Employee's eligibility to make Elective Deferral Contributions
under a CODA may not- be conditioned upon the completion of more
than one (1) Year-of-Service or the attainment of more than age
twenty-one (21).
(7) A Participant may modify the amount of Elective Deferral
Contributions such Participant makes to the Plan as often as the
Plan Administrator allows, as specified in the Adoption
Agreement, but in no event not less frequently than once per
calendar year. . Such modification may be made by filing a
written notice with the Plan Administrator within the time period
prescribed by the Plan Administrator.
(k) Suspension of Contributions.
(1) Elective Deferral Contributions. The following provisions shall
apply with respect to suspension of Elective Deferral
Contributions.
(A) Voluntary Suspension. A Participant may elect to suspend his
Salary Deferral Agreement for Elective Deferral
Contributions by filing a written notice thereof with the
Plan Administrator. Such Contributions shall be suspended on
the date specified in such notice, which date must be at
least 15 days after such notice is filed. The notice shall
specify the period for which such suspension shall be
effective.
(B) Suspension for Leave. A Participant who is absent from
employment on account of an authorized unpaid leave of
absence or military leave shall have his Salary Deferral
Agreement suspended during such leave. Such suspension of
contributions shall be effective on the date payment of
Article II - General Provisions 35 October 27, 1995
<PAGE>
Compensation by the Employer to him ceases, and shall remain
in effect until payment of Compensation resumes.
(C) Withdrawal Suspension. A Participant who elects a withdrawal
in accordance with Section 3E may have his Elective Deferral
Contributions suspended on the date such election becomes
effective. Such suspension shall remain in effect for the
number of months specified therein.
(D) Non-Elective Suspension. A Participant who ceases to meet
the eligibility requirements as specified in Section 2B.1
but who remains in the employ of the Employer shall have his
Elective Deferral Contributions suspended, effective as of
the date he ceases to meet the eligibility requirements.
Such suspension shall remain in effect until he again meets
such eligibility requirements.
The Participant may elect to reactivate his Salary Deferral
Agreement for Elective Deferral Contributions by filing a written
notice thereof with the Plan Administrator. The Salary Deferral
Agreement shall be reactivated following the expiration of the
suspension period described above.
(2) Required Employee Contributions. The following provisions shall
apply with respect to suspension of Required Employee
Contributions by Participants. In the event that a Participant
suspends his Required Employee Contributions, he shall
automatically have his Voluntary Employee Contributions suspended
for the same period of time.
(A) Voluntary Suspension. A Participant may elect to suspend his
payroll deduction authorization for his Required Employee
Contributions by filing a written notice thereof with the
Plan Administrator. Such notice shall be effective, and his
applicable contributions shall be suspended, on the date
specified in such notice, which date must be at least 15
days after such notice is filed. The notice shall specify
the period for which such suspension shall be effective.
Such period must be a minimum of one month and may extend
indefinitely.
(B) Suspension for Leave. A Participant who is absent from
employment on account of an authorized unpaid leave of
absence or military leave shall have his payroll deduction
authorization for Required Employee Contributions suspended
during such leave. Such suspension of contributions shall be
effective on the date payment of Compensation by the
Employer to him ceases, and shall remain in effect until
payment of Compensation resumes.
(C) Withdrawal Suspension. A Participant who elects a withdrawal
in accordance with Section 3E may have his Required Employee
Article II - General Provisions 36 October 29, 1996
<PAGE>
Contributions suspended on the date such election becomes
effective. Such suspension shall remain in effect for the
number of months specified under the provisions of Section
3E.
(D) Involuntary Suspension. A Participant who ceases to meet the
eligibility requirements as specified in Section 2B. I but
who remains in the employ of the Employer shall have his
Required Employee Contributions suspended, effective as of
the date he ceases to meet the eligibility requirements.
Such suspension shall remain in effect until he again meets
such eligibility requirements.
The Participant may elect to reactivate his payroll deduction
authorization by filing a written notice thereof with the Plan
Administrator. The payroll deduction authorization shall be
reactivated following the expiration of the suspension period
described above.
(3) Voluntary Employee Contributions. The following provisions apply
with respect to suspension of Voluntary Employee Contributions by
Participants.
(A) Voluntary Suspension. A Participant may elect to suspend his
payroll deduction authorization for his Voluntary Employee
Contributions by filing a written notice thereof with the
Plan Administrator. Such notice shall be effective, and his
applicable contributions shall be suspended, on the date
specified in such contributions shall be suspended, on the
date specified in such notice, which date must be at least
15 days after such notice is filed. The notice shall specify
the period for which such suspension shall be effective.
(B) Suspension for Leave. A Participant who is absent from
employment on account of an authorized unpaid leave of
absence or military leave shall have his payroll deduction
order for Voluntary Employee Contributions suspended during
such leave. Such suspension of contributions shall be
effective on the date payment of Compensation by the
Employer to him ceases, and shall remain in effect until
payment of Compensation resumes.
(C) Withdrawal Suspension. A Participant who elects a withdrawal
in accordance with Section 3E may have his Voluntary
Employee Contributions suspended on the date such election
becomes effective. Such suspension shall remain in effect
for the number of months specified therein.
(D) Involuntary Suspension. A Participant who ceases to meet the
eligibility requirements as specified in Section 2B.1 but
who remains in the employ of the Employer shall have his
Voluntary Employee Contributions suspended, effective as of
the date he ceases to meet the eligibility requirements.
Article II - General Provisions 37 October 27, 1995
<PAGE>
Such suspension shall remain in effect until he again meets
such eligibility requirements.
The Participant may elect to reactivate his payroll deduction
authorization by filing a written notice thereof with the Plan
Administrator. The payroll deduction authorization shall be
reactivated following the expiration of the suspension period
described above.
2C.2 MONEY PURCHASE PENSION PLAN.
(a) Contributions - Employer. As specified in the Adoption Agreement, the
Employer shall contribute an amount equal to a fixed percentage of
each Participant's Compensation, a flat dollar amount, or an amount
integrated with Social Security in accordance with (1), (2) or (3)
below:
(1) Formula A: Not Integrated with Social Security. An amount equal
to a percentage from 1% to 25% of the Compensation of each
Participant, as elected by the Employer in the Adoption
Agreement, subject to the Limitations on Allocations in
accordance with Section 4B.
(2) Formula B: Flat Dollar Amount. An amount, as elected by the
Employer in the Adoption Agreement. Formula B may not be elected
under a standardized plan.
(3) Formula C: Integrated with Social Security.
Base Contribution: An amount equal to a percentage (as specified
in the Adoption Agreement) of Compensation of each Participant up
to the Social Security Integration Level;
Excess Contribution: In addition, an amount equal to a percentage
(as specified in the Adoption Agreement) of the Participant's
Compensation which is in excess of the Social Security
Integration Level, subject to the Limitations on Allocations in
accordance with Section 4B. This Excess Contribution percentage
shall not exceed the lesser of:
(A) twice the Base Contribution or
(B) the Base Contribution plus the greater of:
(i) old age insurance portion of the Old Age Survivor
Disability (OASDI) tax rate; or
(ii) 5.7%.
Article II - General Provisions 38 October 27, 1995
<PAGE>
If the Employer has elected in the Adoption Agreement to use a
Social Security Integration Level that in any Plan Year is the
greater of $10,000 or 20% but less than 100% of the Social
Security Taxable Wage Base, then the 5.7% limitation specified in
2C.2(a)(3)(B)(ii) shall be adjusted in accordance with the
following table:
- --------------------------------------------------------------------------------
If the Social Security integration Level Adjust
- ------------------------------------------------------------------ 5.7% to
is more than but not more than
- --------------------------------------------------------------------------------
the greater of $10,000 or 20% of 80% of the Social Security 4.3%
the Social Security Taxable Taxable Wage Base
Wage Base
80% of the Social Security 100% of the Social Security 5.4%
Taxable Wage Base Taxable Wage Base
- --------------------------------------------------------------------------------
However, in the case of any Participant who has exceeded the
Cumulative Permitted Disparity Limit described below, the
Employer will contribute for each Participant who either
completes more than 500 Hours of Service during the Plan Year or
is employed on the last day of the Plan Year, an amount equal to
the Excess Contribution percentage multiplied by the
Participant's total Compensation.
Annual Overall Permitted Disparity Limit. Notwithstanding the
preceding provisions of this Section 2C.2(a), for any Plan Year this
Plan benefits any Participant who benefits under another qualified
plan or simplified employee pension plan, as defined in Code section
408(k), maintained by the Employer that provides for permitted
disparity (or imputes disparity), Employer contributions and
Forfeitures will be allocated to the account of each Participant who
either completes more than 500 Hours of Service during the Plan Year
or who is employed as of the last day of the Plan Year in the ratio
that such Participant's total Compensation bears to the total
Compensation of all Participants.
Cumulative Permitted Disparity Limit. Effective for Plan Years
beginning on or after January 1, 1995, the Cumulative Permitted
Disparity Limit for a Participant is 3S total cumulative permitted
disparity years. Total cumulative permitted years mean the number of
years credited to the Participant for allocation or accrual purposes
under this Plan, any other qualified plan or simplified employee
pension plan (whether or not terminated) ever maintained by the
Employer. For purposes of determining the Participant's Cumulative
Permitted Disparity Limit, all years ending in the same calendar year
are treated as the same year. If the Participant has not benefitted
under a defined benefit or target benefit plan for any year beginning
on or after January 1, 1994, the Participant has no Cumulative
Permitted Disparity Limit.
Article II - General Provisions 39 October 27, 1995
<PAGE>
(b) Contributions - Participant.
The Plan Administrator will not accept Required Employee Contributions
or Voluntary Employee Contributions that are made for Plan Years
beginning after the Plan Year in which this document is being adopted
by the Employer. Required Employee Contributions and Voluntary
Employee Contributions for Plan Years beginning after December 31,
1986, but before the Plan Year in which this document is adopted, will
be limited so as to meet the nondiscrimination test of Code section
401(m) as provided in Section 4A.4.
(c) Contributions - Timing.
Contributions made on other than an annual basis shall be paid to the
Trust or Insurance Company, as applicable, not less frequently than
monthly or every four weeks. Contributions made on an annual basis
shall be paid to the Trust or the Insurance Company, as applicable, at
the end of the Plan Year, or as soon as possible on or after the last
day of such Plan Year, but in any event not later than the date
prescribed by law for filing the Employer's income tax return,
including any extension thereof. To the extent that contributions are
used to purchase Life Insurance Policies, such contributions for any
Plan Year may be paid to the Trust when premiums for such Policies are
due during the Plan Year.
(d) Contributions - Allocation.
Employer Contributions shall be allocated to the Participants' Account
in accordance with the allocation requirements as specified by the
Employer in the Adoption Agreement. If the Employer has adopted a
standardized plan, the allocation of any nonannual contribution made
by the Employer shall be made for each Participant who is a
Participant on any day of the Contribution Period regardless of Hours
of Service.
(e) Forfeitures.
Forfeitures will be used in the manner elected in the Adoption
Agreement as follows:
(1) To reduce Employer contributions or pay Plan expenses; or
(2) Allocated in the same manner elected in the Adoption Agreement
for the allocation of Employer contributions; or
(3) First, to reduce Employer contributions or pay Plan expenses,
with any remaining Forfeitures allocated in the same manner
elected in the Adoption Agreement for the allocation of Employer
contributions.
(f) Expenses.
The Employer may contribute to the Plan the amount necessary to pay
any applicable expense charges and administration charges. In lieu of
the Employer contributing the amount necessary to pay such charges,
these expenses may be paid from Plan assets.
Article II - General Provisions 40 October 27, 1995
<PAGE>
2C.3 ROLLOVER CONTRIBUTIONS.
If elected by the Employer in the Adoption Agreement, and without regard to
the limitations imposed under Section 4B, the Plan may receive Rollover
Contributions on behalf of an Employee, if the Employee is so entitled
under Code sections 402(c), 403(a)(4), or 408(d)(3)(A). Contributions may
be rolled over either directly or indirectly, in the form of cash, and may
be all or a portion of the funds eligible for rollover. Receipt of Rollover
Contributions shall be subject to the approval of the Plan Administrator.
Before approving the receipt of a Rollover Contribution, the Plan
Administrator may request any documents or other information from an
Employee or opinions of counsel which the Plan Administrator deems
necessary to establish that such amount is a Rollover Contribution.
If Rollover Contributions are elected by the Employer in the Adoption
Agreement, they may be received from an Employee who is not otherwise
eligible to participate in the Plan. Rollover Contributions may be
withdrawn by such Employee pursuant to the provisions of the Adoption
Agreement and Section 3E. In addition, such Employee may direct the
investment and transfer of amounts in his Participant's Account pursuant to
the terms of Section 5A. Upon Termination of Employment, such Employee
shall be entitled to a distribution of his Participant's Account.
2C.4 CONTRIBUTIONS SUBJECT TO DAVIS-BACON ACT.
If the Employer designates under the Adoption Agreement that Employer
contributions are to be made in different amounts for different contracts
subject to the Davis-Bacon Act or other Prevailing Wage Law, the Employer
shall file with the Plan Administrator an irrevocable written designation
for each Prevailing Wage Law project, stating the hourly contribution rate
to be contributed to the Plan by the Employer for each class of Employees
working on the project in order to comply with the Prevailing Wage Law
applicable to the project. The contribution rate designation shall be
irrevocable with respect to work on that project, although the hourly
contribution rate may be increased prospectively by the filing of a new
written contribution rate designation with the Plan Administrator.
2C.5 QVEC CONTRIBUTIONS.
The Plan Administrator will not accept QVEC Contributions which are made
for a taxable year beginning after December 31, 1986. Contributions made
prior to that date will be maintained in a separate account that will be
nonforfeitable at all times. The account will share in the gains and losses
under the Plan in the same manner as described in Section SA.3 of the Plan.
No part of the QVEC Contributions portion of the Participant's Account will
be used to purchase Life Insurance Policies. No part of the QVEC
Contributions portion of the Participant's Account will be available for
loans. Subject to Section 3C, joint and Survivor Annuity Requirements (if
applicable), the Participant may withdraw any part of his QVEC
Contributions by making a written application to the Plan Administrator.
Article II - General Provisions 41 October 27, 1995
<PAGE>
ARTICLE III - DISTRIBUTIONS
3A. TIMING AND FORM OF BENEFITS
3A.1 PAYMENT OF BENEFITS. The rules and procedures for electing the timing and
form of distribution effective for each Participant or Beneficiary shall be
formulated and administered by the Plan Administrator in a consistent
manner for all Participants in similar circumstances. For money purchase
and target benefit plans, the normal form of distribution shall be a Life
Annuity. For a profit sharing plan, the normal form of distribution shall
be cash. For any plan, the distribution shall be made within an
administratively reasonable time following the date the application for
distribution is filed with the Plan Administrator.
If elected by the Employer in the Adoption Agreement, a Participant, or his
Beneficiary as the case may be, may elect to receive distribution of all or
a portion of his Vested Interest in one or a combination of the following
forms of payment:
(a) Single sum cash payment;
(b) Life Annuity;
(c) Installment Payments (i.e., a series of periodic single-sum cash
payments over time, with no life contingency);
(d) Installment Refund Annuity (i.e., an Annuity that provides for fixed
monthly payments for a period certain of not less than 3 nor more than
15 years. If a Participant dies before the period certain expires, the
Annuity will be paid to the Participant's Beneficiary for the
remainder of the period certain. The period certain shall be chosen by
the Participant at the time the Annuity is purchased with the
Participant's Vested Interest. The Installment Refund Annuity is not a
Life Annuity and in no event shall the period certain extend to a
period which equals or exceeds the life expectancy of the
Participant);
(e) Employer stock, to the extent the Participant is invested therein.
All distributions are subject to the provisions of Section 3C, joint
and Survivor Annuity Requirements.
If the value of a Participant's Vested Interest has never exceeded
$3,500 at anytime, the Employer shall indicate in the Adoption
Agreement whether a distribution shall be made in the form of a single
sum cash payment upon such Participant's Termination of Employment and
may not be deferred or the Participant may elect to defer distribution
until the April 1 following the calendar year in which he reaches age
70-1/2. If the Employer permits Participants to defer such
distributions, failure to make an election will be deemed to be an
election to defer to the April I following the calendar year in which
the Participant reaches age 70-1/2.
Article III - Distributions 42 October 27, 1995
<PAGE>
If the Participant's Vested Interest exceeds (or at the time of any
prior distribution exceeded) $3,500, and such amount is immediately
distributable, the Participant and the Participant's Spouse, if
required, (or where either the Participant or the Spouse has died, the
survivor) must consent to any distribution of such account balance.
The consent of the Participant and the Participant's Spouse, if
required, shall be obtained in writing within the 90-day period ending
on the Annuity Starting Date. The "Annuity Starting Date" is the first
day of the first period for which an amount is paid as an Annuity or
any other form.
An account balance is considered immediately distributable if any part
of the account balance could be distributed to the Participant (or
surviving Spouse) before the Participant attains (or would have
attained if not deceased) the later of Normal Retirement Age or age
62.
Instead of consenting to a distribution, the Participant may elect to
defer the distribution until the April 1 following the calendar year
in which he reaches age 70-1/2. Failure to make an election will be
deemed to be an election to defer to the April 1 following the
calendar year in which he reaches age 70-1/2.
The Plan Administrator shall notify the Participant and the
Participant's Spouse of the right to defer any distribution. Such
notification shall include a general description of the material
features and an explanation of the relative values of the optional
forms of benefit available under the Plan in a manner that would
satisfy the notice requirements of Code section 417(a)(3), and shall
be provided no less than 30 days and no more than 90 days prior to the
Annuity Starting ate.
If the distribution is one to which Code sections 401(a)(11) and 417
do not apply, such distribution may commence less than 30 days after
the notice required under Code regulation section 1.411(a)-11(c) is
given, provided that:
(a) The Plan Administrator clearly informs the Participant that the
Participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not
to elect a distribution (and, if applicable, a particular
distribution option); and
(b) The Participant, after receiving the notice, affirmatively elects
a distribution.
Notwithstanding the foregoing, only the Participant need consent to
the commencement of a distribution in the form of a Qualified Joint
and Survivor Annuity while the account balance is immediately
distributable. Furthermore, if payment in the form of a Qualified
joint and Survivor Annuity is not required with respect to the
Participant pursuant to Section 3C.6 of the Plan, only the Participant
need consent to the distribution of an account balance that is
immediately distributable. Neither the consent of the Participant nor
the Participant's Spouse shall be required to the extent that a
distribution is required to satisfy Code section 401(a)(9) or section
415. In addition, upon termination of this Plan, if the Plan does not
offer an annuity option (purchased from a commercial provider) and if
the Employer or any entity within the same controlled group as the
Employer does not maintain another defined contribution plan (other
than an employee stock ownership plan as defined in Code section
Article III - Distributions 43 October 27, 1995
<PAGE>
4975(e)(7)), the Participant's account balance will, without the
Participant's consent, be distributed to the Participant. However, if
any entity within the same controlled group as the Employer maintains
another defined contribution plan (other than an employee stock
ownership plan as defined in Code section 4975(e)(7), then the
Participant's account balance will be transferred without the
Participant's consent to the other plan if the Participant does not
consent to an immediate distribution.
For purposes of determining the applicability of the foregoing consent
requirements to distributions made before the first day of the first
Plan Year beginning after December 31, 1988, the Participant's vested
account balance shall not include amounts attributable to QVEC
Contributions made between December 31, 1981 and January 1, 1987, plus
gains and minus losses thereon ("accumulated QVEC Contributions").
The terms of any annuity contract purchased and distributed by the
Plan to a Participant or Spouse shall comply with the requirements of
this Plan.
A Participant who terminates employment and does not consent to an
immediate distribution shall have his distribution deferred. Such a
distribution shall commence no later than the April I following the
date the Participant attains age of 70-1/2. Loans may not be initiated
for Participants covered by this paragraph except if, after his
Termination of Employment, the Participant is still a
party-in-interest (as defined in ERISA). A Participant who continues
to maintain an account balance under the Plan may elect to withdraw an
amount which is equal to any whole percentage (not to exceed 100%)
from his Participant's Account. Such an election shall be made in
accordance with Section 3E. Such Participant as described herein shall
have the authority to direct the transfer of his Vested Interest in
accordance with Section SA.2. The election to defer distribution may
be revoked at any time by submitting a written request to the Plan
Administrator. Any Forfeiture attributable to withdrawals shall be
subject to the requirements of Sections 3D.1 and 3E.8 of the Plan. A
Participant whose Termination of Employment is on or after his Early
Retirement Date may elect to defer the distribution subject to the
requirements of Section 3B.
3A.2 COMMENCEMENT OF BENEFITS. Unless the Participant elects otherwise,
distribution of benefits will begin no later than the 60th day after the
latest of the close of the Plan Year in which:
(a) The Participant attains age 65 (or Normal Retirement Age, if earlier);
(b) The 10th anniversary of the year in which the Participant commenced
participation in the Plan occurs; or,
(c) The Participant terminates Service with the Employer.
Notwithstanding the foregoing, the failure of a Participant and Spouse to
consent to a distribution, if required, while a benefit is immediately
distributable within the meaning of Section 3A.1 of the Plan, shall be
deemed to be an election to defer distribution to the date the Participant
attains age 70-1/2.
Article III - Distributions 44 October 29, 1996
<PAGE>
However, in no event shall distribution of that portion of a Participant's
Account attributable to Elective Deferral Contributions, Qualified Matching
Contributions, and Qualified Nonelective Contributions be made prior to the
earliest of the Participant's Retirement, death, Disability, separation
from Service, attainment of age 59-1/2, or, with respect to Elective
Deferral Contributions only, due to Serious Financial Hardship, unless such
distribution is made on account of:
(a) The Employer's sale, to an unrelated entity, of its interest in a
subsidiary (within the meaning of Code section 409(d)(3)), where the
Employer continues to maintain this Plan and the Participant continues
employment with the subsidiary; or
(b) The Employer's sale, to an unrelated corporation, of substantially all
assets (within the meaning of Code section 409(d)(2)) used in its
trade or business, where the Employer continues to maintain this Plan
and the Participant continues employment with the employer acquiring
such assets; or
(c) The termination of the Plan, as provided in Section 7B, without the
establishment of another defined contribution plan, other than an
employee stock ownership plan (as defined in Code sections 4975(e) or
409) or a simplified employee pension plan as defined in Code section
408(k).
All distributions that may be made in accordance with one or more of the
preceding distributable events are subject to the spousal and Participant
consent requirements (if applicable) of Code sections 401(a)(11) and 417.
In addition, distributions made after March 31, 1988, which are triggered
by any of the events described in the immediately preceding paragraphs (a),
(b), or (c), must be made in a lump sum.
3A.3 FROM LIFE INSURANCE POLICIES. The Trustee shall arrange with the Insurance
Company any distribution due to any Participant during his lifetime from
any Life Insurance Policy or Policies on his life. The manner of
distribution shall be a transfer of the values of said Policy or Policies
to the Participant's Account for distribution as a portion thereof in
accordance with this Section.
Subject to Section 3C, joint and Survivor Annuity Requirements, the
Policies on a Participant's life will be converted to cash or an Annuity or
distributed to the Participant upon commencement of benefits.
In the event of any conflict between the terms of this Plan and the terms
of any Life Insurance Policy purchased hereunder, the Plan provisions shall
control.
3A.4 NONTRANSFERABLE. Any Annuity Contract distributed herefrom must be
nontransferable.
3A.5 ALTERNATE PAYEE SPECIAL DISTRIBUTION. Distributions pursuant to Section
5D.8 may be made without regard to the age or employment status of the
Participant.
Article III - Distributions 45 October 29, 1996
<PAGE>
3B. MINIMUM DISTRIBUTION REQUIREMENTS
3B.1 DEFINITIONS.
(a) APPLICABLE LIFE EXPECTANCY. The term Applicable Life Expectancy means
the Life Expectancy (or joint and last survivor expectancy) calculated
using the attained age of the Participant (or Designated Beneficiary)
as of the Participant's (or Designated Beneficiary's) birthday in the
applicable calendar year reduced by one for each calendar year which
has elapsed since the date Life Expectancy was first calculated. If
Life Expectancy is being recalculated, the Applicable Life Expectancy
shall be the Life Expectancy so recalculated. The applicable calendar
year shall be the first Distribution Calendar Year, and if Life
Expectancy is being recalculated, such succeeding calendar year.
(b) DESIGNATED BENEFICIARY. The term Designated Beneficiary means the
individual who is designated as the Beneficiary under the Plan in
accordance with Code section 401(a)(9) and the regulations thereunder.
If a Participant's Beneficiary, as determined in accordance with
Section 1.8, is his estate, such Participant shall be treated as
having no Designated Beneficiary.
(c) DISTRIBUTION CALENDAR YEAR. The term Distribution Calendar Year means
a calendar year for which a minimum distribution is required. For
distributions beginning before the Participant's death, the first
Distribution Calendar Year is the calendar year immediately preceding
the calendar year which contains the Participant's Required Beginning
Date. For distributions beginning after the Participant's death, the
first Distribution Calendar Year is the calendar year in which
distributions are required to begin pursuant to Section 3B.3 below.
(d) 5-PERCENT OWNER. For purposes of this Section, the term 5-Percent
Owner means a 5-percent owner as defined in Code section 416(i)
(determined in accordance with section 416 but without regard to
whether the Plan is Top-Heavy) at any time during the Plan Year ending
with or within the calendar year in which such Employee attains age
66-1/2 or any later Plan Year.
(e) LIFE EXPECTANCY. The term Life Expectancy means life expectancy and
joint and last survivor expectancy as computed by use of the expected
return multiples in Table V and VI of section 1.72-9 of the Income Tax
Regulations.
Unless otherwise elected by the Participant (or Spouse, in the case of
distributions described in Section 3B.3(b)(2)) by the time
distributions are required to begin, Life Expectancies shall be
recalculated annually. Such election shall be irrevocable as to the
Participant (or Spouse) and shall apply to all subsequent years. The
Life Expectancy of a non-Spouse Beneficiary may not be recalculated.
Article III - Distributions 46 October 29, 1996
<PAGE>
(f) PARTICIPANT'S BENEFIT. The term Participant's Benefit means:
(1) The Participant's Vested Interest as of the last valuation date
in the calendar year immediately preceding the Distribution
Calendar Year ("Valuation Calendar Year") increased by the amount
of any contributions or Forfeitures allocated to the
Participant's Account as of dates in the Valuation Calendar Year
after the valuation date and decreased by distributions made in
the Valuation Calendar Year after the valuation date.
(2) Exception for second Distribution Calendar Year. For purposes of
paragraph (1) above, if any portion of the minimum distribution
for the first Distribution Calendar Year is made in the second
Distribution Calendar Year on or before the Required Beginning
Date, the amount of the minimum distribution made in the second
Distribution Calendar Year shall be treated as if it had been
made in the immediately preceding Distribution Calendar Year.
(g) REQUIRED BEGINNING DATE. The term Required Beginning Date means:
(1) General Rule. The first Required Beginning Date of a Participant
is the first day of April of the calendar year following the
calendar year in which the Participant attains age 70-1/2.
(2) Transitional Rules. The Required Beginning Date of a Participant
who attains age 70-1/2 before January 1, 1988, shall be
determined in accordance with (A) or (B) below:
(A) Non-5-Percent Owners. The Required Beginning Date of a
Participant who is not a 5-Percent Owner is the first day of
April of the calendar year following the calendar year in
which the later of retirement or attainment of age 70-1/2
occurs.
(B) 5-Percent Owners. The Required Beginning Date of a
Participant who is a 5-Percent Owner during any year
beginning after December 31, 1979 is the first day of April
following the later of:
(i) The calendar year in which the Participant attains age
70-1/2; or
(ii) The earlier of the calendar year which ends with or
within the Plan Year in which the Participant becomes a
5-Percent Owner, or the calendar year in which the
Participant retires.
The Required Beginning Date of a Participant who is not a
5-Percent Owner who attained age 70-1/2 during 1988 and who
has not retired as of January 1, 1989 is April 1, 1990.
Article III - Distributions 47 October 27, 1995
<PAGE>
(3) Once distributions have begun to a 5-Percent Owner under this
Section, they must continue to be distributed, even if the
Participant ceases to be a 5-Percent Owner in a later year.
3B.2 DISTRIBUTION REQUIREMENTS.
(a) Except as otherwise provided in Section 3C, joint and Survivor Annuity
Requirements, the requirements of this Section 3B shall apply to any
distribution of a Participant's Accrued Benefit and will take
precedence over any inconsistent provisions of this Plan. Unless
otherwise specified, the provisions of this Section apply to calendar
years beginning after December 31, 1984.
(b) All distributions required under this Section 3B shall be determined
and made in accordance with regulations under section 401(a)(9),
including the minimum distribution incidental benefit requirement of
regulations section 1.401(a)(9)-2.
A Participant's entire Vested Interest must be distributed or begin to
be distributed no later than the Participant's Required Beginning
Date.
(c) Limits on Distribution Periods. As of the first Distribution Calendar
Year, distributions, if not made in a single sum, may only be made
over one of the following periods (or a combination thereof):
(1) The life of the Participant;
(2) The life of the Participant and a Designated Beneficiary;
(3) A period certain not extending beyond the Life Expectancy of the
Participant; or
(4) A period certain not extending beyond the joint and last survivor
expectancy of the Participant and a Designated Beneficiary.
(d) Determination of amount to be distributed each year. If the
Participant's Vested Interest is to be distributed in other than a
single sum, the following minimum distribution rules shall apply on or
after the Required Beginning Date:
(1) If the Participant's entire Vested Interest is to be distributed
over (1) a period not extending beyond the Life Expectancy of the
Participant or the joint life and last survivor expectancy of the
Participant and the Participant's Designated Beneficiary or (2) a
period not extending beyond the Life Expectancy of the Designated
Beneficiary, the amount required to be distributed for each
calendar year, beginning with distributions for the first
Distribution Calendar Year, must at least equal the quotient
obtained by dividing the Participant's benefit by the Applicable
Life Expectancy.
Article III - Distributions 48 October 27, 1995
<PAGE>
(2) For calendar years beginning before January 1, 1989, if the
Participant's Spouse is not the Designated Beneficiary, the
method of distribution selected must assure that at least 50% of
the present value of the amount available for distribution is
paid within the Life Expectancy of the Participant.
(3) For calendar years beginning after December 31, 1988, the amount
to be distributed each year, beginning with distributions for the
first Distribution Calendar Year, shall not be less than the
quotient obtained by dividing the Participant's benefit by the
lesser of (1) the Applicable Life Expectancy or (2) if the
Participant's Spouse is not the Designated Beneficiary, the
applicable divisor determined from the table set forth in
regulations section 1.401(a)(9)- 2, Q&A-4. Distributions after
the death of the Participant shall be distributed using the
Applicable Life Expectancy in Section 3B.2(d)(1) above, as the
relevant divisor without regard to regulations section
1.401(a)(9)-2.
(4) The minimum distribution required for the Participant's first
Distribution Calendar Year must be made on or before the
Participant's Required Beginning Date. The minimum distribution
for other calendar years, including the minimum distribution for
the Distribution Calendar Year in which the Employee's Required
Beginning Date occurs, must be made on or before December 31 of
that Distribution Calendar Year.
(e) Other Forms. If the Participant's benefit is distributed in the form
of an Annuity purchased from an Insurance Company, distributions
thereunder shall be made in accordance with the requirements of Code
section 401(a)(9) and the regulations thereunder.
3B.3 DEATH DISTRIBUTION PROVISIONS. Upon the death of the Participant, the
following distribution provisions shall take effect:
(a) Distributions Beginning Before Death. If the Participant dies after
distribution of his entire Vested Interest has begun, the remaining
portion of such entire Vested Interest will continue to be distributed
at least as rapidly as under the method of distribution being used
prior to the Participant's death.
(b) Distributions Beginning After Death. If the Participant dies before
distribution of his entire Vested Interest begins, distribution of the
Participant's entire Vested Interest shall be completed by December 31
of the calendar year containing the fifth anniversary of the
Participant's death except to the extent that an election is made to
receive distributions in accordance with (1) or (2) below:
(1) If any portion of the Participant's entire Vested Interest is
payable to a Designated Beneficiary, distributions may be made
over the Life Expectancy of the Designated Beneficiary commencing
on or before December 31 of the calendar year immediately
following the calendar year in which the Participant died;
Article III - Distributions 49 October 27, 1995
<PAGE>
(2) If the Designated Beneficiary is the Participant's surviving
Spouse, the date distributions are required to begin in
accordance with (1) above shall not be earlier than the later of
(i) December 31 of the calendar year immediately following the
calendar year in which the Participant died and (ii) December 31
of the calendar year in which the Participant would have attained
age 70-1/2.
If the Participant has not made an election pursuant to this Section
3B.3(b) by the time of his or her death, the Participant's Designated
Beneficiary must elect the method of distribution no later than the
earlier of (1) December 31 of the calendar year in which distributions
would be required to begin under this Section, or (2) December 31 of
the calendar year which contains the fifth anniversary of the
Participant's date of death. If the Participant has no Designated
Beneficiary, or if the Designated Beneficiary does not elect a method
of distribution, distribution of the Participant's entire Vested
Interest must be completed by December 31 of the calendar year
containing the fifth anniversary of the Participant's death and will
be paid in the form of a single sum cash payment.
(c) For purposes of Section 3B.3(b) above, if the surviving Spouse dies
after the Participant, but before payments to such Spouse begin, the
provisions of this Section, with the exception of paragraph (b)(2)
therein, shall be applied as if the surviving Spouse were the
Participant.
(d) For purposes of this Section, distribution of a Participant's entire
Vested Interest pursuant to Section 3B.3(b) is considered to begin on
the Participant's Required Beginning Date (or, if paragraph (c) above
is applicable, the date distribution is required to begin to the
Surviving Spouse). If distribution in the form of an Annuity
irrevocably commences to the Participant before the Required Beginning
Date, the date distribution is considered to begin is the date
distribution actually commences.
3B.4 TRANSITIONAL RULE.
(a) Notwithstanding the other requirements of this Section 3B and subject
to the requirements of Section 3C, joint and Survivor Annuity
Requirements, distribution on behalf of any Employee, including a
5-Percent Owner, may be made in accordance with all of the following
requirements (regardless of when such distribution commences):
(1) The distribution by the Plan is one which would not have
disqualified such Plan under Code section 401(a)(9) as in effect
prior to amendment by the Deficit Reduction Act of 1984.
(2) The distribution is in accordance with a method of distribution
designated by the Employee whose entire Vested Interest in the
Plan is being distributed or, if the Employee is deceased, by a
Beneficiary of such Employee.
Article III - Distributions 50 October 27, 1995
<PAGE>
(3) Such designation was in writing, was signed by the Employee or
the Beneficiary, and was made before January 1, 1984.
(4) The Employee had accrued a benefit under the Plan as of December
31, 1983.
(5) The method of distribution designated by the Employee or the
Beneficiary specifies the time at which distribution will
commence, the period over which distributions will be made, and
in the case of any distribution upon the Employee's death, the
Beneficiaries of the Employee listed in order of priority.
(b) A distribution upon death will not be covered by this transitional
rule unless the information in the designation contains the required
information described above with respect to the distribution to be
made upon the death of the Employee.
(c) For any distribution that commences before January 1, 1984, but
continues after December 31, 1983, the Employee or the Beneficiary, to
whom such distribution is being made, will be presumed to have
designated the method of distribution under which the distribution is
being made if the method of distribution was specified in writing and
the distribution satisfies the requirements in subsections (a)(1) and
(5).
(d) If a designation is revoked, any subsequent distribution must satisfy
the requirements of Code section 401(a)(9) and related regulations. If
a designation is revoked subsequent to the date distributions are
required to begin, the Plan must distribute by the end of the calendar
year following the calendar year in which the revocation occurs the
total amount not yet distributed which would have been required to
have been distributed to satisfy Code section 401(a)(9) and related
regulations, except for the TEFRA section 242(b)(2) election. For
calendar years beginning after December 31, 1988; such distributions
must meet the minimum distribution incidental benefit requirements in
regulations section 1.401(a)(9)-2. Any changes in the designation will
be considered to be a revocation of the designation. However, the mere
substitution or addition of another Beneficiary (one not named in the
designation) under the designation will not be considered to be a
revocation of the designation, so long as such substitution or
addition does not alter the period over which distributions are to be
made under the designation, directly or indirectly (for example, by
altering the relevant measuring life). In the case in which an amount
is transferred or rolled from one plan to another plan, the rules in
Q&A J-2 and Q&A J-3 shall apply.
3C. JOINT AND SURVIVOR ANNUITY REQUIREMENTS
3C.1 APPLICABILITY. Except as provided in Section 3C.6, the provisions of this
Section 3C shall apply to any Participant who is credited with at least one
Hour of Service with the Employer on or after August 23, 1984, and such
other Participants as provided in Section 3C.7.
Article III - Distributions 51 October 27, 1995
<PAGE>
3C.2 DEFINITIONS. The following definitions shall apply to this Section 3C.
(a) EARLIEST RETIREMENT AGE. The term Earliest Retirement Age means the
earliest date on which, under the Plan, the Participant could elect to
receive retirement benefits.
(b) ELECTION PERIOD. The term Election Period means the period which
begins on the first day of the Plan Year in which the Participant
attains age 35 and ends on the date of the Participant's death. If a
Participant separates from service prior to the first day of the Plan
Year in which he attains age 35, with respect to the Vested Account
Balance as of the date of separation, the election period shall begin
on the date of separation.
Pre-age 35 waiver: A Participant who will not yet attain age 35 as of
the end of any current Plan Year may make a special Qualified Election
to waive the Qualified Preretirement Survivor Annuity for the period
beginning on the date of such election and ending on the first day of
the Plan Year in which the Participant will attain age 35. Such
election shall not be valid unless the Participant receives a written
explanation of the Qualified Preretirement Survivor Annuity in such
terms as are comparable to the explanation required under Section
3C.5(a). Except as provided in Section 3C.6, Qualified Preretirement
Survivor coverage will be automatically reinstated as of the first day
of the Plan Year in which the Participant attains age 35. Any new
waiver on or after such date shall be subject to the full requirements
of this Section 3C.
(c) QUALIFIED ELECTION. The term Qualified Election means a waiver of a
Qualified Joint and Survivor Annuity or a Qualified Preretirement
Survivor Annuity. Any waiver of a Qualified Joint and Survivor Annuity
or a Qualified Preretirement Survivor Annuity shall not be effective
unless: (a) the Participant's Spouse consents in writing to the
election; (b) the election designates a specific Beneficiary,
including any class of beneficiaries or any contingent beneficiaries,
which may not be changed without spousal consent (or the Spouse
expressly permits designations by the Participant without any further
spousal consent); (c) the Spouse's consent acknowledges the effect of
the election; and (d) the Spouse's consent is witnessed by a Plan
representative or notary public.
Additionally, a Participant's waiver of the Qualified Joint and
Survivor Annuity shall not be effective unless the election designates
a form of benefit payment which may not be changed without spousal
consent (or the Spouse expressly permits designations by the
Participant without any further spousal consent). If it is established
to the satisfaction of a Plan representative that there is no Spouse
or that the Spouse cannot be located, a waiver will be deemed a
Qualified Election.
Any consent by a Spouse obtained under this provision (or
establishment that the consent of a Spouse may not be obtained) shall
be effective only with respect to such Spouse. A consent that permits
designations by the Participant without any requirement of further
consent by such Spouse must acknowledge that the Spouse has the right
to limit consent to a specific Beneficiary, and a specific form of
benefit where applicable, and that the Spouse voluntarily elects to
relinquish either or both of such rights. A revocation of a prior
Article III - Distributions 52 October 27, 1995
<PAGE>
waiver may be made by a Participant without the consent of the Spouse
at any time before the commencement of benefits. The number of
revocations shall not be limited. No consent obtained under this
provision shall be valid unless the Participant has received notice as
provided in Section 3C.5 below.
(d) QUALIFIED JOINT AND SURVIVOR ANNUITY. The term Qualified Joint and
Survivor Annuity means an immediate Annuity for the life of the
Participant with a survivor Annuity for the life of the Spouse which
is not less than 50 percent and not more than 100 percent of the
amount of the Annuity which is payable during the joint lives of the
Participant and the Spouse and which is the amount of benefit which
can be purchased with the Participant's Vested Account Balance. The
percentage of the survivor annuity under the Plan shall be 50 percent
(unless a different percentage is elected by the Participant).
(e) VESTED ACCOUNT BALANCE. The term Vested Account Balance means the
aggregate value of the Participant's vested account balances derived
from contributions made by both the Participant and Employer, whether
vested before or upon death, including the proceeds of insurance
contracts, if any, on the Participant's life and Rollover
Contributions. The provisions of this Section 3C shall apply to a
Participant who is vested in amounts attributable to Employer
contributions, Employee Contributions (or both) made under this Plan
at the time of death or distribution.
3C.3 QUALIFIED JOINT AND SURVIVOR ANNUITY. Unless an optional form of benefit is
selected pursuant to a Qualified Election within the 90-day period ending
on the Annuity Starting Date, a married Participant's Vested Account
Balance will be paid in the form of a Qualified joint and Survivor Annuity
and an unmarried Participant's Vested Account Balance will be paid in the
form of a Life Annuity. The Participant may elect to have such Annuity
distributed upon attainment of the Earliest Retirement Age under the Plan.
3C.4 QUALIFIED PRERETIREMENT SURVIVOR ANNUITY. Unless an optional form of
benefit has been selected within the Election Period pursuant to a
Qualified Election, if a Participant dies before the Annuity Starting Date,
then no less than 50 percent (or 100 percent if so elected in the Adoption
Agreement) of the Participant's Vested Account Balance shall be applied
toward the purchase of an Annuity for the life of the surviving Spouse. If
less than 100 percent is selected, then the remaining portion of the Vested
Account Balance shall be paid to the Participant's Beneficiary. If less
than 100 percent of the Vested Account Balance is paid to the surviving
Spouse, the amount of Employee Contributions allocated to the surviving
Spouse will be in the same proportion as the Employee Contributions bears
to the total Vested Account Balance of the Participant. The surviving
Spouse may elect to have such Annuity distributed within a reasonable
period after the Participant's death.
3C.5 NOTICE REQUIREMENTS.
(a) In the case of a Qualified joint and Survivor Annuity, the Plan
Administrator shall no less than 30 days and no more than 90 days
prior to the Annuity Starting Date provide each Participant with a
Article III - Distributions 53 October 27, 1995
<PAGE>
written explanation of: (i) the terms and conditions of a Qualified
joint and Survivor Annuity; (ii) the Participant's right to make and
the effect of an election to waive the Qualified Joint and Survivor
Annuity form of benefit; (iii) the rights of a Participant's Spouse;
and (iv) the right to make, and the effect of, a revocation of a
previous election to waive the Qualified Joint and Survivor Annuity.
(b) In the case of a Qualified Preretirement Survivor Annuity, the Plan
Administrator shall provide each Participant within the applicable
period (described in subsection (c) below) for such Participant a
written -explanation of the Qualified Preretirement Survivor Annuity
in such terms and in such manner as would be comparable to the
explanation provided for meeting the requirements of Section 3C.S(a)
applicable to a Qualified joint and Survivor Annuity.
(c) The "applicable period" for a Participant is whichever of the
following periods ends last: (i) the period beginning with the first
day of the Plan Year in which the Participant attains age 32 and
ending with the close of the Plan Year preceding the Plan Year in
which the Participant attains age 35; (ii) a reasonable period ending
after the individual becomes a Participant; (iii) a reasonable period
ending after the Qualified joint and Survivor Annuity is no longer
fully subsidized; (iv) a reasonable period ending after this Section
3C first applies to the Participant. Notwithstanding the foregoing,
notice must be provided within a reasonable period ending after
separation from Service before attaining age 35.
For purposes of applying the preceding paragraph, a reasonable period
ending after the enumerated events described in (ii), (iii) and (iv)
is the end of the two-year period beginning one year prior to the date
the applicable ,event occurs, and ending one year after that date. In
the case of a Participant who separates from Service before the Plan
Year in which he attains age 35, notice shall be provided within the
two-year period beginning one year prior to separation and ending one
year after separation. If such a Participant thereafter returns to
employment with the Employer, the applicable period for such
Participant shall be redetermined.
(d) Notwithstanding the other requirements of this Section, the respective
notices prescribed by this Section need not be given to a Participant
if (1) the Plan 'fully subsidizes' the costs of a Qualified Joint and
Survivor Annuity or Qualified Preretirement Survivor Annuity, and (2)
the Plan does not allow the Participant to waive the Qualified joint
and Survivor Annuity or Qualified Preretirement Survivor Annuity and
does not allow a married Participant to designate a nonspouse
Beneficiary. For purposes of this Section 3C.S(d), a Plan fully
subsidizes the costs of a benefit if no increase in cost or decrease
in benefits to the Participant may result from the Participant's
failure to elect another benefit.
3C.6 SAFE HARBOR RULES.
(a) This Section shall apply to a Participant in a profit sharing plan,
and to any distribution made on or after the first day of the first
Plan Year beginning after December 31, 1988, from or under a separate
Article III - Distributions 54 October 29, 1996
<PAGE>
account attributable solely to accumulated QVEC Contributions (as
described in Section 3A.1), and maintained on behalf of a Participant
in a money purchase pension plan (including a target benefit plan), if
the following conditions are met: (1) the Participant does not or
cannot elect payments in the form of a Life Annuity; and (2) on the
death of a Participant, the Participant's Vested Account Balance will
be paid to the Participant's surviving Spouse, but if there is no
surviving Spouse, or if the surviving Spouse has consented in a manner
conforming to a Qualified Election, then to the Participant's
designated Beneficiary.
(b) The surviving Spouse may elect to have distribution of the Vested
Account Balance commence within the 90-day period following the date
of the Participant's death. The account balance shall be adjusted for
gains or losses occurring after the Participant's death in accordance
with the provisions of the Plan governing the adjustment of account
balances for other types of distributions.
(c) The Participant may waive the spousal death benefit described in this
Section 3C.6 at any time provided that no such waiver shall be
effective unless it satisfies the conditions of Section 3C.2(c) (other
than the notification requirement referred to therein) that would
apply to the Participant's waiver of the Qualified Preretirement
Survivor Annuity.
(d) If this Section 3C.6 is operative, then the other provisions of this
Section 3C, other than Section 3C.7, shall be inoperative.
This Section 3C.6 shall not be operative with respect to a Participant
in a profit sharing plan if the plan is a direct or indirect
transferee of a defined benefit plan, money purchase plan, a target
benefit plan, stock bonus, or profit sharing plan that is subject to
the survivor annuity requirements of Code sections 401(a)(11) and 417.
(e) For purposes of this Section 3C.6, the term Vested Account Balance
shall mean, in the case of a money purchase pension plan or a target
benefit plan, the Participant's separate account balance attributable
solely to accumulated QVEC Contributions (as described in Section
3A.1). In the case of a profit sharing plan, the term Vested Account
Balance shall have the same meaning as provided in Section 3C.2(e).
3C.7 TRANSITIONAL RULES.
(a) Any living Participant not receiving benefits on August 23, 1984, who
would otherwise not receive the benefits prescribed by the previous
Sections of this Section 3C must be given the opportunity to elect to
have the prior Sections of this Section 3C a ply if such Participant
is credited with at least one Hour of Service under this Plan or a
predecessor plan in a Plan Year beginning on or after January 1, 19
76, and such Participant had at least 10 years of vesting Service when
he separated from Service.
Article III - Distributions 55 October 29, 1996
<PAGE>
(b) Any living Participant not receiving benefits on August 23, 1984, who
was credited with at least one Hour of Service under this Plan or a
predecessor plan on or after September 2, 1974, and who is not
otherwise credited with any Service in a Plan Year beginning on or
after January 1, 1976, must be given the opportunity to have his
benefits paid in accordance with Section 3 C.7(d).
(c) The respective opportunities to elect (as described in Sections
3C.7(a) and 3C.7(b) above) must be afforded to the appropriate
Participants during the period commencing on August 23, 1984, and
ending on the date benefits would otherwise commence to said
Participants.
(d) Any Participant who has elected pursuant to Section 3C.7(b), and any
Participant who does not elect under Section 3C.7(a), or who meets the
requirements of Section 3C.7(a), except that such Participant does not
have at least 10 years of vesting Service when he separates from
Service, shall have his benefits distributed in accordance with all of
the following requirements if benefits would have been payable in the
form of a Life Annuity:
(1) Automatic joint and Survivor Annuity.. If benefits in the form of
a Life Annuity become payable to a married Participant who:
(A) Begins to receive payments under the Plan on or after Normal
Retirement Age; or
(B) Dies on or after Normal Retirement Age while still working
for the Employer; or
(C) Begins to receive payments on or after the Qualified Early
Retirement Age; or
(D) Separates from Service on or after attaining Normal
Retirement Age (or the Qualified Early Retirement Age) and
after satisfying the eligibility requirements for the
payment of benefits under the Plan and thereafter dies
before beginning to receive such benefits;
then such benefits will be received under this Plan in the form
of a Qualified Joint and Survivor Annuity, unless the Participant
has elected otherwise during the Election Period. The Election
Period must begin at least 6 months before the Participant
attains Qualified Early Retirement Age and end not more than 90
days before the commencement of benefits. Any election hereunder
will be in writing and may be changed by the Participant at any
time.
(2) Election of Early Survivor Annuity. A Participant who is employed
after attaining the Qualified Early Retirement Age will be given
the opportunity to elect, during the Election Period, to have a
survivor Annuity payable on death. If the Participate elects the
Article III - Distributions 56 October 29, 1996
<PAGE>
survivor Annuity, payments under such Annuity must not be less
than the payments which would have been made to the Spouse under
the Qualified joint and Survivor Annuity if the Participant had
retired on the day before his or her death. Any election under
this provision will be in writing and may be changed by the
Participant at any time. The Election Period begins on the later
of (1) the 90th day before the Participant attains the Qualified
Early Retirement Age, or (2) the date on which participation
begins, and ends on the date the Participant terminates
employment.
(3) For purposes of this Section 3C.7(d):
(A) Qualified Early Retirement Age is the latest of:
(i) The earliest date, under the Plan, on which the
Participant may elect to receive retirement benefits;
(ii) The first day of the 120th month beginning before the
Participant reaches Normal Retirement Age; or
(iii) The date the Participant begins participation.
(B) Qualified Joint and Survivor Annuity is an Annuity for the
life of the Participant with a survivor Annuity for the life
of the Spouse as described in Section 3C.2(d).
3D. TERMINATION OF EMPLOYMENT
3D.1 DISTRIBUTION. A Participant who terminates employment shall be entitled to
receive a distribution of his entire Vested Interest. Such distribution
shall be further subject to the terms and conditions of Section 3C. The
method used, as elected by the Employer in the Adoption Agreement, is one
of the following:
(a) Immediate (Cash-Out Method).
If at the time of his Termination of Employment the Participant is not
100% vested and does not take a distribution from the portion of his
Vested Interest that is attributable to contributions made by the
Employer, the non-vested portion of his Participant's Account will
become a Forfeiture upon the date such terminated Participant incurs 5
consecutive 1-Year Breaks-in-Service.
However, if at the time of his Termination of Employment the
Participant is not 100% vested and does take a distribution from the
portion of his Vested Interest that is attributable to contributions
made by the Employer, or if the Participant is 0% vested, the
non-vested portion of his Participant's Account will become a
Forfeiture immediately upon the Participant's Termination of
Employment date.
Article III - Distributions 57 October 29, 1996
<PAGE>
If a Participant whose non-vested portion of his Participant's Account
became a Forfeiture in accordance with the terms of the preceding
paragraph is later rehired by the Employer and re-enrolls in the Plan
before incurring 5 consecutive 1-Year Breaksin-Service, then the
amount of the Forfeiture shall be restored to the Participant's
Account by the Employer in accordance with the repayment provision
elected by the Employer in the Adoption Agreement and described in
Section 3D.2.
(b) 1-Year Break-in-Service (Cash-Out Method).
If at the time of his Termination of Employment the Participant is not
100% vested and does not take a distribution from the portion of his
Vested Interest that is attributable to contributions made by the
Employer, the non-vested portion of his Participant's Account will
become a Forfeiture upon the date such terminated Participant incurs 5
consecutive 1-Year Breaks-in-Service.
However, if at the time of his Termination of Employment the
Participant is not 100% vested and does take a distribution from the
portion of his Vested Interest that is attributable to contributions
made by the Employer, or if the Participant is 0% vested, the
non-vested portion of his Participant's Account will become a
Forfeiture upon the date such terminated Participant incurs a 1-Year
Break-in-Service.
If a terminated Participant, whose non-vested portion of his
Participant's Account became a Forfeiture in accordance with the terms
of the preceding paragraph, is later rehired by the Employer and
re-enrolls in the Plan before incurring 5 consecutive 1- Year
Breaks-in-Service, then the amount of the Forfeiture shall be restored
to the Participant's Account by the Employer in accordance with the
repayment provision elected by the Employer in the Adoption Agreement
and described in Section 3D.2.
(c) 5 Consecutive 1-Year Breaks-in-Service.
If at the time of his Termination of Employment the Participant is not
100% vested, the non-vested portion of his Participant's Account will
become a Forfeiture upon the date the terminated Participant incurs 5
consecutive 1-Year Breaks-in-Service.
3D.2 REPAYMENT OF PRIOR DISTRIBUTION.
If a terminated Participant is later rehired by the Employer and re-enrolls
in the Plan, the following Optional Payback or Required Payback provisions,
as elected by the Employer in the Adoption Agreement, will apply:
(a) Optional Payback:
(1) If the Participant was 0% vested at his Termination of Employment
and did not incur 5 consecutive 1-Year Breaks-in-Service after
such date, the amount which became a Forfeiture, if any, shall be
restored by the Employer at the time such Participant re-enrolls
in the Plan.
Article III - Distributions 58 October 31, 1995
<PAGE>
(2) If the Participant was vested but not 100% vested at his
Termination of Employment and did not incur 5 consecutive 1-Year
Breaks-in-Service after such date, the amount which became a
Forfeiture, if any, shall be restored by the Employer at the time
such Participant re-enrolls in the Plan. In addition, the
Participant may repay the full amount of the distribution
attributable to Employer contributions, if any, made at his
Termination of Employment. Such repayment of Employer
contributions, however, must be made before the Participant has
incurred 5 consecutive 1-Year Breaks-in-Service following the
date he received the distribution or five years after the
Participant is rehired by the Employer, whichever is earlier.
(3) If the Participant had incurred 5 consecutive 1-Year
Breaks-in-Service after his termination of Employment, the amount
of the Participant's Account that became a Forfeiture shall
remain a Forfeiture and such Participant shall be prohibited from
repaying a distribution made at his Termination of Employment.
(b) Required Payback:
(1) If the Participant was 0% vested at his Termination of Employment
and did not incur 5 consecutive 1-Year Breaks-in-Service after
such date, the amount which became a Forfeiture, if any, shall be
restored by the Employer at the time such Participant re-enrolls
in the Plan.
(2) If the Participant was vested but not 100% vested at his
Termination of Employment and did not incur 5 consecutive 1-Year
Breaks-in-Service after such date, the Participant shall be
required to repay the full amount of the distribution
attributable to Employer contributions, if any, made at his
Termination of Employment. Such repayment of Employer
contributions, however, must be made before the Participant has
incurred 5 consecutive 1- Year Breaks-in-Service following the
date he received the distribution or five years after the
Participant is rehired by the Employer, whichever is earlier.
When the Participant makes such repayment, the amount which
became a Forfeiture, if any, shall be restored by the Employer at
the same time such repayment is made. However, if the Participant
does not repay the distribution made in accordance with this
Section 3D within the period of time specified above, that
Forfeiture shall remain a Forfeiture.
(3) If the Participant had incurred 5 consecutive 1-Year
Breaks-in-Service after his Termination of Employment, the amount
of the Participant's Account that became a Forfeiture shall
remain a Forfeiture and such Participant shall be prohibited from
repaying the distribution made at his Termination of Employment.
Article III - Distributions 59 October 27, 1995
<PAGE>
3D.3 LIFE INSURANCE POLICY. If all or any portion of the value of any Life
Insurance Policy on the Participant's life will become a Forfeiture, the
Participant shall have the right to buy such policy from the Trustee for
the then value of such policy less the value of any Vested Interest
therein, within 30 days after written notice from the Trustee is mailed to
his last known address.
3D.4 NO FURTHER RIGHTS OR INTEREST. A Participant shall have no further interest
in or any rights to any portion of his Participant's Account that becomes a
Forfeiture due to his Termination of Employment once the Participant incurs
5 consecutive 1-Year Breaks-inService in accordance with Section 2A.4.
3D.5 FORFEITURE. Any Forfeiture arising in accordance with the provisions of
Section 3D.1 shall be treated as follows:
Any amount of Forfeitures shall be used in accordance with (a), (b), or (c)
below, in the manner set forth in Section 2C.
(a) Employer Credit. Forfeitures shall be used by the Employer to reduce
and in lieu of the Employer contribution next due under Section 2C, or
to pay Plan expenses, at the earliest opportunity after such
Forfeiture becomes available.
(b) Reallocation. Forfeitures shall be allocated in accordance with the
allocation formula of the contributions from which they arose.
(c) Employer Credit and Reallocation of Remainder. Forfeitures shall first
be used to reduce and in lieu of the Employer contribution next due
under Section 2C, or to pay Plan expenses, at the earliest opportunity
after such Forfeiture becomes available. Any Forfeitures remaining
following use as an Employer credit shall be allocated in accordance
with the allocation formula of the contributions from which they
arose.
Notwithstanding anything above to the contrary, if Forfeitures are
generated immediately or upon the occurrence of a 1-Year Break-in-Service,
and a former Participant returns to employment with the Employer after
Forfeitures are generated but prior to the occurrence of 5 consecutive
1-Year Breaks-in-Service, Forfeitures, if any, will first be used to make
whole the nonve5ted account of such Participant, equal to the value of the
nonvested account at the time the Participant terminated employment with
the Employer in accordance with the applicable provisions of Section 3D.2.
In the event that the available Forfeitures are not sufficient to make
whole the nonvested account, the Employer will make an additional
contribution sufficient to make the nonvested account whole.
3D.6 LOST PARTICIPANT. If a benefit is forfeited because the Participant or
Beneficiary cannot be found, as discussed in Section 5D.7, such benefit
will be reinstated if a claim is made by the Participant or Beneficiary.
3D.7 DEFERRAL OF DISTRIBUTION. If elected by the Employer, and as discussed in
Section 3A.1, a Participant who terminates employment and does not consent
to an immediate distribution shall have his distribution deferred (and may
Article III - Distributions 60 October 27, 1995
<PAGE>
be responsible for all fees and expenses associated with maintaining his
account in a deferred status).
3E. WITHDRAWALS
3E.1 WITHDRAWAL-EMPLOYEE CONTRIBUTIONS.
(a) Required Employee Contributions. If the Employer has elected in its
Adoption Agreement to allow for a withdrawal of Required Employee
Contributions and earnings thereon, then a Participant may elect to
withdraw from his Participant's Account an amount equal to any whole
percentage (not exceeding 100%) of his entire Vested Interest in his
Participant's Account attributable to Required Employee Contributions
plus any income and minus any loss thereon. On the date the election
becomes effective, the Participant shall be suspended from making any
further contributions to the Plan, and from having any Matching
Contributions made on his behalf for a period, as elected by the
Employer in its Adoption Agreement.
(b) Voluntary Employee Contributions. If the Employer has elected in its
Adoption Agreement to allow for withdrawal of Voluntary Employee
Contributions and earnings thereon, then a Participant may elect to
withdraw from his Participant's Account an amount which is equal to
any whole percentage (not exceeding 100%) of the entire Vested
Interest in his Participant's Account attributable to Voluntary
Employee Contributions plus any income and minus any loss thereon.
(c) Prior Required Employee Contributions. If the Employer has elected in
its Adoption Agreement to allow for a withdrawal of Prior Required
Employee Contributions and earnings thereon, then a Participant may
elect to withdraw from his Participant's Account an amount equal to
any whole percentage (not exceeding 100%) of his entire Vested
interest in his Participant's Account attributable to Prior Required
Employee Contributions plus any income and minus any loss thereon.
(d) Prior Voluntary Employee Contributions. If the Employer has elected in
its Adoption Agreement to allow for withdrawal of Prior Voluntary
Employee Contributions and earnings thereon, then a Participant may
elect to withdraw from his Participant's Account an amount which is
equal to any whole percentage (not exceeding 100%) of the entire
Vested Interest in his Participant's Account attributable to Prior
Voluntary Employee Contributions plus any income and minus any loss
thereon.
If a Participant elects a withdrawal under the provisions of this Section,
he may not elect another withdrawal under this Section for an additional
period specified by the Employer in its Adoption Agreement.
The Participant shall notify the Plan Administrator in writing of his
election to make a withdrawal under this Section. Any such election shall
be effective as of the date specified in such notice, which date must be at
least 15 days after notice is filed.
Article III - Distributions 61 October 27, 1995
<PAGE>
No Forfeitures will occur solely as a result of an Employee's withdrawal of
Employee Contributions.
3E.2 WITHDRAWAL - ELECTIVE DEFERRAL CONTRIBUTIONS. If the Participant has
attained age 59-1/2, and if selected by the Employer in its Adoption
Agreement, the Participant may elect to withdraw from his Participant's
Account an amount which is equal to any whole percentage (not exceeding
100%) of his Vested Interest in his Participant's Account attributable to
his Elective Deferral Contributions and earnings thereon.
The Participant shall notify the Plan Administrator in writing of his
election to make a withdrawal under this Section. Any such election shall
be effective as of the date specified in such notice, which date must be at
least 15 days after notice is filed.
3E.3 WITHDRAWAL - EMPLOYER CONTRIBUTIONS. If the Employer has specified in its
Adoption Agreement that withdrawals of Matching Contributions, Nonelective
Contributions, or Prior Employer Contributions, if applicable, are
permitted, a Participant, who has been a Participant for at least 60
consecutive months, may elect to withdraw from his Participant's Account an
amount equal to a whole percentage (not to exceed 100%) of his Vested
Interest in his Participant's Account attributable to Matching
Contributions (and reallocated Forfeitures, if applicable), Nonelective
Contributions, (and reallocated Forfeitures, if applicable), or Prior
Employer Contributions (and reallocated Forfeitures, if applicable), along
with earnings. On the date the election becomes effective, the Participant
may be suspended from making Employee Contributions and Elective Deferral
Contributions, if any, and from having Employer contributions made on his
behalf for a period of time, as selected by the Employer in its Adoption
Agreement. In lieu of or in addition to the 60-months of participation
requirement, the Employer-may specify in the Adoption Agreement that
withdrawal of Employer contributions, to the extent vested, shall be
available upon or following the attainment of age 59-1/2.
In the event a Participant's suspension period occurs during a year (or
years) when no Employer contributions are made, such suspension shall be
taken into account when the next Employer contributions) is made.
The Participant shall notify the Plan Administrator in writing of his
election to make a withdrawal under this Section. Any such election shall
be effective as of the date specified in such notice, which date must be at
least 15 days after notice is filed.
3E.4 WITHDRAWAL FOR SERIOUS FINANCIAL HARDSHIP OF CONTRIBUTIONS OTHER THAN
ELECTIVE DEFERRAL CONTRIBUTIONS. Except as provided in Sections 7B.1 and
7B.7(e), if the Plan is a profit sharing plan or a thrift plan, and if the
Employer has elected in its Adoption Agreement to permit withdraws due to
the occurrence of events that constitute Serious Financial Hardships to a
Participant, such Participant may withdraw all or a portion of his Vested
Interest (excluding Elective Deferral Contributions, Qualified Nonelective
Contributions, Qualified Matching Contributions, and earnings on these
contributions). Such Serious Financial Hardship must be shown by positive
evidence submitted to the Plan Administrator that the hardship is of
sufficient magnitude to impair the Participant's financial security.
Article III - Distributions 62 March 27, 1996
<PAGE>
Withdrawals shall be determined in a consistent and nondiscriminatory
manner, and shall not affect the Participant's rights under the Plan to
make additional withdrawals or to continue to be a Participant.
3E.5 WITHDRAWAL FOR SERIOUS FINANCIAL HARDSHIP OF ELECTIVE DEFERRAL
CONTRIBUTIONS. If the Employer has selected in its Adoption Agreement, a
distribution may be made on account of Serious Financial Hardship if
subparagraphs (a) and (b) of this Section are satisfied. The funds
available for withdrawal shall be the portion of a Participant's Account
attributable to Elective Deferral Contributions, including any earnings
credited to such contributions as of the end of the last Plan Year ending
before July 1, 1989 ("pre-1989 earnings"), and if applicable, Qualified
Matching Contributions credited to the Participant's Account as of the end
of the last Plan Year ending before July 1, 1989, Qualified Nonelective
Contributions credited to the Participant's Account as of the end of the
last Plan Year ending before July 1, 1989, and any pre-1989 earnings
attributable to Qualified Matching Contributions, or Qualified Nonelective
Contributions. Qualified Matching Contributions credited to the
Participant's Account after the end of the last Plan Year ending before
July 1, 1989, Qualified Nonelective Contributions credited to the
Participant's Account after the end of the last Plan Year ending before
July 1, 1989, and earnings on Elective Deferral Contributions, Qualified
Matching Contributions, and Qualified Nonelective Contributions credited
after the end of the last Plan Year ending before July 1, 1989 shall not be
eligible for withdrawal under this Section. For purposes of this Section, a
distribution may be made on account of a hardship only if the distribution
is made on account of an immediate and heavy financial need of the Employee
where such Employee lacks other available resources.
(a) The following are. the only financial needs considered immediate and
heavy for purposes of this Section:
(i) Expenses for medical care described in Code section 213(d)
previously incurred by the Employee, the Employee's Spouse, or
any dependents of the Employee (as defined in Code section 152)
or necessary for these persons to obtain medical care described
in Code section 213(d);
(ii) Costs directly related to the purchase of a principal residence
for the Employee (excluding mortgage payments);
(iii)Payments necessary to prevent the eviction of the Employee from
the Employee's principal residence or foreclosure on the mortgage
on that residence; or
(iv) Tuition payments, related educational fees and amounts
distributed for the payment of room-and-board expenses for the
next 12 months of post-secondary education for the Employee, his
or her Spouse, or any of his or her dependents.
(b) To the extent the amount of distribution requested does not exceed the
amount required to relieve the Participant's financial need, such
distribution will be considered as necessary to satisfy an immediate
and heavy financial need of the Employee only if:
Article III - Distributions 63 March 27, 1996
<PAGE>
(i) The Employee has obtained all distributions, other than hardship
distributions, and all nontaxable loans under all plans
maintained by the Employer;
(ii) All plans maintained by the Employer provide that the Employee's
Elective Deferral Contributions and if applicable, Employee
Contributions, will be suspended for 12 months after the receipt
of the hardship distribution;
(iii)The distribution is not in excess of the amount-of the immediate
and heavy financial need (including amounts necessary to pay any
federal, state, or local income taxes or penalties reasonably
anticipated to result from the distribution); and
(iv) All plans maintained by the Employer provide that the Employee
may not make Elective Deferral Contributions for the Employee's
taxable year immediately following the taxable year of the
hardship distribution in excess of the applicable limit under
Code section 402(g) for such taxable year less the amount of such
Employee's Elective Deferral Contributions for the taxable year
of the hardship distribution.
3E.6 WITHDRAWAL - QVEC CONTRIBUTIONS and ROLLOVER CONTRIBUTIONS. If selected by
the Employer in its Adoption Agreement, a Participant may elect to withdraw
from his Participant's Account as often during each Plan Year as elected by
the Employer in the Adoption Agreement, any amount up to 100% of his entire
Vested Interest in his Participant's Account attributable to his QVEC
Contributions or Rollover Contributions along with earnings thereon.
The Participant shall notify the Plan Administrator in writing of his
election to make a withdrawal under this Section. Any such election shall
be effective as of the date specified in such notice, which date must be at
least 15 days after notice is filed.
3E.7 NOTIFICATION. The Participant shall notify the Plan Administrator in
writing of his election to make a withdrawal under Section 3E. Any such
election shall be effective as of the date specified in such notice, which
date must be at least 15 days after such notice is filed. Payment of the
withdrawal shall be subject to the terms and conditions of Section 3A. All
withdrawals made under the provisions of Section 3E shall be subject to the
spousal consent requirements of Section 3C, as applicable.
3E.8 VESTING CONTINUATION. In the event a partially vested Participant takes a
withdrawal of less than 100% of his Vested Interest in accordance with
Section 3E.3 or 3E.4 or 3E.5, the remaining portion of his Participant's
Account attributable to Employer contributions shall vest according to the
formula as set forth in Section 1.75.
Article III - Distributions 64 October 29, 1996
<PAGE>
3E.9 WITHDRAWAL - PARTICIPANT'S EMPLOYER STOCK ACCOUNT. The ability of a
Participant who is subject to the reporting requirements of section 16(a)
of the Securities Exchange Act of 1934 (the "Act") to make withdrawals or
investment changes involving the Participant's Employer Stock Account may
be restricted by the Plan. Administrator to comply with the rules under
section 16(b) of the Act.
3E.10WITHDRAWAL BY TERMINATED PARTICIPANTS. Terminated Participants who have
deferred distribution of their benefit may make withdrawals from the Plan
in the same manner as selected by the Employer in its Adoption Agreement
for withdrawals preceding termination.
3F. DIRECT ROLLOVERS
3F.1 DEFINITIONS.
(a) DIRECT ROLLOVER. The term Direct Rollover means a payment by the Plan
to the Eligible Retirement Plan specified by the Distributee.
(b) DISTRIBUTEE. The term Distributee means an Employee or former
Employee. In addition, the Employee's or former Employee's surviving
Spouse and the Employee's or former Employee's Spouse who is the
Alternate Payee under a QDRO, are Distributees with regard to the
interest of the Spouse or former Spouse.
(c) ELIGIBLE RETIREMENT PLAN. The term Eligible Retirement Plan means an
individual retirement account described in Code section 408(a), an
individual retirement annuity described in Code section 408(b), an
annuity plan described in Code section 403(a), or a qualified plan
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 an individual retirement
annuity.
(d) ELIGIBLE ROLLOVER DISTRIBUTION. The term Eligible Rollover
Distribution means any distribution of all or any portion of the
balance to the credit of the Distributee, except that an Eligible
Rollover Distribution does not include: any distribution that is one
of a series of substantially equal periodic payments (not less
frequently than annually) made for the life (or Life Expectancy) of
the Distributee or the joint lives (or joint life expectancies) of the
Distributee and the Distributee's designated Beneficiary, or for a
specified period of ten years or more; any distribution to the extent
such distribution is required under Code section 401(a)(9);. and the
portion of any distribution that is not includable in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities); and any other
distributions) that is reasonably expected to total less than $200
during a year.
3F.2 DIRECT ROLLOVERS. This Section applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the Plan to the contrary
that would otherwise limit a Distributee's election under this Section, a
Article III - Distributions 65 October 27, 1995
<PAGE>
Distributee may elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an Eligible Rollover Distribution
that is equal to at least $500 paid directly to an Eligible Retirement Plan
specified by the Distributee in a Direct Rollover.
Article III - Distributions 66 October 27, 1995
<PAGE>
ARTICLE IV - LEGAL LIMITATIONS ON CONTRIBUTIONS
4A. NONDISCRIMINATION TESTS
4A.1 DEFINITIONS.
(a) ACTUAL CONTRIBUTION PERCENTAGE. The term Actual Contribution
Percentage (ACP) means the average of the Actual Contribution Ratios
of the Eligible Participants in a group.
(b) ACTUAL CONTRIBUTION RATIO. The term Actual Contribution Ratio means
the ratio (expressed as a percentage) of a Participant's Contribution
Percentage Amounts to that Participant's Compensation for the Plan
Year (whether or not the Employee was a Participant for the entire
Plan Year).
(c) ACTUAL DEFERRAL PERCENTAGE. The term Actual Deferral Percentage (ADP)
means the average of the Actual Deferral Ratios for a specified group
of Participants.
(d) ACTUAL DEFERRAL RATIO. The term Actual Deferral Ratio means the ratio
(expressed as a percentage) of a Participant's Deferral Percentage
Amounts to that Participant's Compensation for such Plan Year. The
Actual Deferral Ratio for an Employee who is eligible to be a
Participant but fails to make Elective Deferral Contributions shall be
zero.
(e) AGGREGATE LIMIT. The term Aggregate Limit means the sum of: (i) 125
percent of the greater of the ADP of the non-Highly Compensated
Employees for the Plan Year or the ACP of non-Highly Compensated
Employees under the plan subject to Code section 401(m) for the Plan
Year beginning with or within the Plan Year of the CODA and (ii) the
lesser of 200% or two plus the lesser of such ADP or ACP. "Lesser" is
substituted for greater" in "(i)", above, and "greater" is substituted
for "lesser" after "two plus the" in "(ii)" if it would result in a
larger Aggregate Limit.
(f) CONTRIBUTION PERCENTAGE AMOUNTS. The term Contribution Percentage
Amounts means the sum of the Employee Contributions, Matching
Contributions, Qualified Matching Contributions (to the extent not
taken into account for purposes of the ADP test) and Qualified
Nonelective Contributions (to the extent not taken into account for
purposes of the ADP test) made under the Plan on behalf of the
Participant for the Plan Year. Such Contribution Percentage Amounts
shall not include Matching Contributions that are forfeited either to
correct Excess Aggregate Contributions or because the contributions to
which they relate are Excess Elective Deferral Contributions, Excess
Contributions, or Excess Aggregate Contributions. The Employer may
elect to use Elective Deferrals in the Contribution Percentage Amounts
as long as the ADP test (as described in Section 4A.2) is met before
the Elective Deferrals are used in the ACP test (as described in
Section 4A.4) and the ADP test continues to be met following the
exclusion of those Elective Deferrals that are used to meet the ACP
test.
Article IV - Legal Limitations on 67 October 27, 1995
Contributions
<PAGE>
(g) DEFERRAL PERCENTAGE AMOUNTS. The term Deferral Percentage Amounts
means any Elective Deferral Contributions made pursuant to the
Participant's deferral election, including Excess Elective Deferral
Contributions of Highly Compensated Employees, but excluding Elective
Deferral Contributions that are taken into account in the ACP test
(provided the ADP test is satisfied both with and without exclusion of
these Elective Deferral Contributions). In addition, the Employer may
choose to make Qualified Nonelective Contributions and Qualified
Matching Contributions.
(h) ELIGIBLE PARTICIPANT. The term Eligible Participant means any Employee
who is eligible to make an Employee Contribution or Elective Deferral
Contribution (if the Employer takes such contributions into account in
the calculation of the Actual Contribution Ratio), or to receive a
Matching Contribution (including Forfeitures) or a Qualified Matching
Contribution. If an Employee Contribution is required as a condition
of participation in the Plan, any Employee who would be a Participant
in the Plan if such Employee made the Required Employee Contribution
shall be treated as an Eligible Participant on behalf of whom no
Employee Contributions are made.
If the Employer has elected in its Adoption Agreement to provide for Elective
Deferral Contributions, then Sections 4A.2 through 4A.5 shall apply.
4A.2 ACTUAL DEFERRAL PERCENTAGE TEST. The ADP for Participants who are Highly
Compensated Employees for each Plan Year and the ADP for Participants who
are nonHighly Compensated Employees for the same Plan Year must satisfy one
of the following tests:
(a) The ADP for Participants who are Highly Compensated Employees for the
Plan Year shall not exceed the ADP for Participants who are non-Highly
Compensated Employees for the same Plan Year multiplied by 1.25; or
(b) The ADP for Participants who are Highly Compensated Employees for the
Plan Year shall not exceed the ADP for Participants who are non-Highly
Compensated Employees for the same Plan Year multiplied by 2.0,
provided that the ADP for Participants who are Highly Compensated
Employees does not exceed the ADP for Participants who are non-Highly
Compensated Employees by more than two (2) percentage points.
4A.3 SPECIAL RULES - ADP TEST.
(a) The ADP for any Participant who is a Highly Compensated Employee for
the Plan Year and who is eligible to have Elective Deferral
Contributions (and Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, if treated as Elective Deferrals for
purposes of the ADP test) allocated to his accounts under two or more
CODAs maintained by the Employer, shall be determined as if such
Elective Deferral Contributions (and,. if applicable, such Qualified
Nonelective Contributions or Qualified Matching Contributions, or
both) were made under a single CODA. If a Highly Compensated Employee
participates in two or more CODAs that have different Plan Years, such
Article IV - Legal Limitations on 68 October 27, 1995
Contributions
<PAGE>
CODAs are treated as a single CODA with respect to the Plan Years
ending with or within the same calendar year. Notwithstanding the
foregoing, certain plans shall be treated as separate if mandatorily
disaggregated under regulations under Code section 401(k).
(b) If this Plan satisfies the requirements of Code sections 401(k),
401(a)(4), or 410(b) only if aggregated with one or more other plans,
or if one or more other plans satisfy the requirements of such Code
sections only if aggregated with this Plan, then this Section shall be
applied by determining the ADP of Employees as if all such plans were
a single plan. For Plan Years beginning after December 31, 1989, plans
may be aggregated in order to satisfy Code section 401(k) only if they
have the same Plan Year.
(c) If a Highly Compensated Employee is subject to the family aggregation
rules of section 414(q)(6) because that Participant is either a
5-percent owner or one of the top 10 Highly Compensated Employees, the
combined Actual Deferral Ratio for the family group (which is treated
as one Highly Compensated Employee) must be determined by combining
the Elective Deferral Contributions (and Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, if treated
as Elective Deferral Contributions for purposes of the ADP test), and
Compensation for the Plan Year of all the family members (as defined
in section 414(q)(6)). Such family members shall be disregarded as
separate Employees in determining the ADP for both Highly Compensated
Employees and non-Highly Compensated Employees.
(d) For purposes of determining the ADP test, Elective Deferral
Contributions, Qualified Nonelective Contributions and Qualified
Matching Contributions must be made before the last day of the
12-month period immediately following the Plan Year to which such
contributions relate.
(e) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ADP test and the amount of Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, used in
such test.
(f) The determination and treatment of the Deferral Percentage Amounts of
any Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
(g) If the Employer determines before the end of the Plan Year that the
Plan may not satisfy the ADP test for the Plan Year, the Employer may
require that the amounts of Elective Deferral Contributions being
allocated to the accounts of Highly Compensated Employees be reduced
to the extent necessary to prevent Excess Contributions from being
made to the Plan.
Although the Employer may reduce the amounts of Elective Deferral
Contributions that may be allocated to the Participant's Accounts of
Highly Compensated Employees, the affected Employees shall continue to
participate in the Plan. When the situation that resulted in the
Article IV - Legal Limitations on 69 October 27, 1995
Contributions
<PAGE>
reduction of Elective Deferral Contributions ceases to exist, the
Employer shall reinstate the amounts of Elective Deferral
Contributions elected by the affected Participants in their Salary
Deferral Agreement to the fullest extent possible.
If the Employer has elected in its Adoption Agreement, to provide for Employee
Contributions and/or Matching Contributions required to be tested under Code
section 401(m), then Sections 4A.4 and 4A.5 shall apply.
4A.4 ACTUAL CONTRIBUTION PERCENTAGE TEST. The ACP for Participants who are
Highly Compensated Employees for each Plan Year and the ACP for
Participants who are non-Highly Compensated Employees for the same Plan
Year must satisfy one of the following tests:
(a) The ADP for Participants who are Highly Compensated Employees for the
Plan Year shall not exceed the ACP for Participants who are non-Highly
Compensated Employees for the same Plan Year multiplied by 1.25; or
(b) The ACP for Participants who are Highly Compensated Employees for the
Plan Year shall not exceed the ACP for Participants who are non-Highly
Compensated Employees for the same Plan Year multiplied by two (2),
provided that the ACP for Participants who are Highly Compensated
Employees does not exceed the ACP for Participants who are non-Highly
Compensated Employees by more than two (2) percentage points.
4A.5 SPECIAL RULES - ADP/ACP TESTS.
(a) Multiple Use: If one or more Highly Compensated Employees participates
in both a CODA and a plan subject to the ACP test maintained by the
Employer, and the sum of the ADP and ACP of those Highly Compensated
Employees subject to either or both tests exceeds the Aggregate Limit,
then the ACP of those Highly Compensated Employees who also
participate in a CODA will be reduced (beginning with such Highly
Compensated Employee whose Actual Contribution Ratio is the highest)
so that the limit is not exceeded. The amount by which each Highly
Compensated Employee's Contribution Percentage Amounts are reduced
shall be treated as an Excess Aggregate Contribution. The ADP and ACP
of the Highly Compensated Employees are determined after any
corrections required to meet the ADP and ACP tests. Multiple use does
not occur if both the ADP and ACP of the Highly Compensated Employees
does not exceed 1.25 multiplied by the ADP and ACP of the non-Highly
Compensated Employees.
(b) For purposes of this Section, the Actual Contribution Ratio for any
Participant who is a Highly Compensated Employee and who is eligible
to have Contribution Percentage Amounts allocated to his account under
two or more plans described in Code section 401(a), or CODAs that are
maintained by the Employer, shall be determined as if the total of
such Contribution Percentage Amounts was made under each plan. If a
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Highly Compensated Employee participates in two or more CODAs that
have different Plan Years, all CODAs ending with or within the same
calendar year are treated as a single CODA. Notwithstanding the
foregoing, certain plans shall be treated as separate if mandatorily
disaggregated under regulations under Code section 401(m).
(c) If this Plan satisfies the requirements of Code sections 401(m),
401(a)(4) or 410(b) only if aggregated with one or more other plans,
or if one or more other plans satisfy the requirements of such
sections of the Code only if aggregated with this Plan, then this
Section shall be applied by determining the Actual Contribution Ratio
of Employees as if all such plans were a single plan. For Plan Years
beginning after December 3 1, 1989, plans may be aggregated in order
to satisfy Code section 401(m) only if they have the same Plan Year.
(d) For purposes of determining the Actual Contribution Ratio of a
Participant who is a 5-percent owner or one of the Top 10 Highly
Compensated Employees, the Contribution Percentage Amounts and
Compensation for such Participant shall include the Contribution
Percentage Amounts and Compensation for the Plan Year of family
members (as defined in Code section 414(q)(6)). Such family members
shall be disregarded as separate Employees in determining the ACP for
Highly Compensated Employees and non-Highly Compensated Employees.
(e) For purposes of determining the ACP test, Employee Contributions are
considered to have been made in the Plan Year in which contributed to
the Plan. Qualified Matching Contributions and Qualified Nonelective
Contributions are considered made for a Plan Year if made no later
than the end of the 12-month period beginning on the day after the
close of the Plan Year.
(f) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ACP test and the amount of Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, used in
such test.
(g) The determination and treatment of the Contribution Percentage Amounts
of any Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
4B. LIMITATIONS ON ALLOCATIONS
4B.1 DEFINITIONS. The following definitions apply for purposes of Section 4B.
(a) ANNUAL ADDITIONS. The term Annual Additions means the sum of the
following amounts credited to a Participant's Account for the
Limitation Year:
(1) All contributions made by the Employer which shall include:
Elective Deferral Contributions;
Money Purchase Pension Contributions
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Matching Contributions;
Nonelective Contributions;
Qualified Nonelective Contributions;
Qualified Matching Contributions;
Prior Employer Contributions;
(2) Employee Contributions;
(3) Forfeitures; and
(4) Amounts allocated after March 31, 1984 to an individual medical
account, as defined in Code section 415(l)(2), which is part of a
pension or annuity plan maintained by the Employer, are treated
as Annual Additions to a defined contribution plan. Also, amounts
derived from contributions paid or accrued after December 31,
1985 in taxable years ending after such date, which are
attributable to post-retirement medical benefits allocated to 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, are treated as Annual
Additions to a defined contribution plan; and
(5) Allocations under a simplified employee pension plan.
For this purpose, any Excess Annual Additions applied under Sections
4C.3 or 4B.5(f) in the Limitation Year to reduce Employer
contributions will be considered Annual Additions for such Limitation
Year.
(b) COMPENSATION. As elected by the Employer in the Adoption Agreement,
the term Compensation means all of a Participant's:
(1) Wages, Tips, and Other Compensation Box on Form W-2. (Information
required to be reported under Code sections 6041, 6051 and 6052).
Wages within the meaning of Code section 3401(a) and all other
payments of compensation to an Employee by the Employer (in the
course of the Employer's trade or business) for which the
Employer is required to furnish the Employee a written statement
under Code sections 604 1 (d), 605 1 (a) (3), and 605 2.
Compensation must be determined without regard to any rules under
Code section 3401(a) that limit the remuneration included in
wages based on the nature or location of the employment or the
services performed (such as the exception for agricultural labor
in Code section 3401(a)(2)).
(2) Section 3401(a) wages. Wages as defined in Code section 3401(a)
for the purposes of income tax withholding at the source but
determined without regard to any rules that limit the
remuneration included in wages based on the nature or location of
the employment or the services performed (such as the exception
for agricultural labor in Code section 3401(a)(2)).
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(3) 415 safe-harbor compensation. Wages, salaries, and fees for
professional services and other amounts received (without regard
to whether or not an amount is paid in cash) for personal
services actually rendered in the course of employment with the
Employer maintaining the Plan to the extent that the amounts are
includable in gross income (including, but not limited to,
commissions paid salesmen, compensation for services on the basis
of a percentage of profits, commissions on insurance premiums,
tips, bonuses, fringe benefits, and reimbursements or other
expense allowances under a nonaccountable plan as described in
Code section 1.62-2(c)), and excluding the following:
(A) Employer contributions to a plan of deferred compensation
which are not includable in the Employee's gross income for
the taxable year in which contributed, or Employer
contributions under a simplified employee pension plan to
the extent such contributions are deductible by the
Employee, or any distributions from a plan of deferred
compensation;
(B) Amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by the
Employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
(C) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
(D) Other amounts which received special tax benefits, or
contributions made by the Employer (whether or not under a
salary reduction agreement) towards the purchase of an
annuity contract described in Code section 403(b) (whether
or not the contributions are actually excludable from the
gross income of the Employee).
For any Self-Employed Individual, Compensation means Earned Income.
For Limitation Years beginning after December 31, 1991, for purposes
of applying the limitations of this Section 4B, Compensation for a
Limitation Year is the Compensation actually paid or includable in
gross income during such Limitation Year.
Notwithstanding the preceding sentence, Compensation for a Participant
in a defined contribution plan who is permanently and totally disabled
(as defined in Code section 22(e)(3)) is the Compensation such
Participant would have received for the Limitation Year if the
Participant had been paid at the rate of Compensation paid immediately
before becoming permanently and totally disabled; such imputed
Compensation for the disabled Participant may be taken into account
only if the Participant is not a Highly Compensated Employee and
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contributions made on behalf of such Participant are nonforfeitable
when made.
(c) DEFINED BENEFIT FRACTION. The term Defined Benefit Fraction means a
fraction, the numerator of which is the sum of the Participant's
Projected Annual Benefits under all the defined benefit plans (whether
or not terminated) maintained by the Employer, and the denominator of
which is the lesser of 125 percent of the dollar limitation determined
for the Limitation Year under Code sections 415(b) and (d), or 140
percent of the Highest Average Compensation including any adjustments
under Code section 4.15(b).
Notwithstanding the above, if the Participant was a Participant as of
the first day of the Limitation Year beginning after December 31, 1986
in one or more defined benefit plans maintained by the Employer which
were in existence on May 6, 1986, the denominator of this fraction
will not be less than 125 percent of the sum of the annual benefits
under such plans which the Participant had accrued as of the later of
the close of the last Limitation Year beginning before January 1,
1987, disregarding any changes in the terms and conditions of the Plan
after May 5, 1986. The preceding sentence applies only if the defined
benefit plans individually and in. the aggregate satisfied the
requirements of Code section 415 for all Limitation Years beginning
before January 1, 1987.
Notwithstanding the foregoing, for any Top-Heavy Plan Year, 100 shall
be substituted for 125 unless the extra minimum allocation is being
made pursuant to the Employer's election in the Adoption Agreement.
However, for any Plan Year in which this Plan is a Super Top-Heavy
Plan, 100 shall be substituted for 125 in any event.
(d) DEFINED CONTRIBUTION DOLLAR LIMITATION. The term Defined Contribution
Dollar Limitation means $30,000 or if greater, one-fourth of the
defined benefit dollar limitation set forth in Code section 415(b)(1)
as in effect for the Limitation Year.
(e) DEFINED CONTRIBUTION FRACTION. The term Defined Contribution Fraction
means a fraction, the numerator of which is the sum of the Annual
Additions to the Participant's accounts under all the defined
contribution plans (whether or not terminated) maintained by the
Employer for the current and all prior Limitation Years (including the
Annual Additions attributable to the Participant's nondeductible
employee contributions to all defined benefit plans, whether or not
terminated, maintained by the Employer, and the Annual Additions
attributable to all welfare benefit funds, as defined in Code section
419(e), individual medical accounts, as defined in Code section
415(l)(2), and simplified employee pension plans, as defined in Code
section 408(k), maintained by the Employer), and the denominator of
which is the sum of the maximum aggregate amounts for the current and
all prior Limitation Years of service with the Employer (regardless of
whether a defined contribution plan was maintained by the Employer).
The maximum aggregate amount in any Limitation Year is the lesser of
125 percent of the dollar limitation determined under Code sections
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415(b) and (d) in effect under Code section 415(c)(1)(A) or 35 percent
of the Participant's Compensation for such year.
If the Employee was a Participant as of the end of the first day of
the first Limitation Year beginning after December 31, 1986, in one or
more defined contribution plans maintained by the Employer which were
in existence on May 6, 1986, the numerator of this fraction will be
adjusted if the sum of this fraction and the Defined Benefit Fraction
would otherwise exceed 1.0 under the terms of this Plan. Under the
adjustment, an amount equal to the product of (1) the excess of the
sum of the fractions over 1.0 times (2) the denominator of this
fraction, will be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they
would be computed as of the end of the last Limitation Year beginning
before January 1, 198 7, and disregarding any changes in the terms and
conditions of the Plan made after May 5, 1986, but using the section
415 limitation applicable to the first Limitation Year beginning on or
after January 1, 1987.
Notwithstanding the foregoing, for any Top-Heavy Plan Year, 100 shall
be substituted for 125 unless the extra minimum allocation is being
made pursuant to the Employer's election in the Adoption Agreement.
However, for any Plan Year in which this Plan is a Super Top-Heavy
Plan, 100 shall be substituted for 125 in any event.
The Annual Additions for any Limitation Year beginning before January
1, 1987 shall not be recomputed to treat all Employee Contributions as
Annual Additions.
(f) EMPLOYER. For purposes of this Section 4B, the term Employer means the
Employer that adopts this Plan, and all members of a controlled group
of corporations (as defined in Code section 414(b) as modified by
section 415(h)), a group of commonly controlled trades or businesses
(as defined in Code section 414(c) as modified by section 415(h)) or
affiliated service groups (as defined in Code section 414(m)) of which
the adopting Employer is a part and any other entity required to be
aggregated with the Employer pursuant to regulations under Code
section 414(o).
(g) HIGHEST AVERAGE COMPENSATION. The term Highest Average Compensation
means the average Compensation for the three consecutive Years of
Service with the Employer that produces the highest average. A Year of
Service with the Employer is the Inconsecutive month period defined in
Section 2A.5.
(h) LIMITATION YEAR. The term Limitation Year means a calendar year, or
the Inconsecutive month period elected by the Employer in the
Limitation Year section of the Adoption Agreement. All qualified plans
maintained by the Employer must use the same Limitation Year. If the
Limitation Year is amended to a different 12- consecutive month
period, the new Limitation Year must begin on a date within the
Limitation Year in which the amendment is made.
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(i) MASTER OR PROTOTYPE PLAN. The term Master or Prototype Plan means a
plan the form of which is the subject of a favorable opinion letter
from the national office of the Internal Revenue Service.
(j) MAXIMUM PERMISSIBLE AMOUNT. The term Maximum Permissible Amount means
the maximum Annual Additions that may be contributed or allocated to a
Participant's Account under the Plan for any Limitation Year, which
shall not exceed the lesser of:
(1) The Defined Contribution Dollar Limitation, or
(2) 25 percent of the Participant's Compensation for the Limitation
Year.
The Compensation limitation referred to in (2) above, shall not apply
to any contribution for medical benefits (within the meaning of Code
section 401(h) or 419A(f)(2)) which is otherwise treated as Annual
Additions under Code sections 415(l)(1) or 419A(d)(2).
If a short Limitation Year is created because of an amendment changing
the Limitation Year to a different Inconsecutive month period, the
Maximum Permissible Amount will not exceed the Defined Contribution
Dollar Limitation multiplied by the following fraction:
Number of months in the short Limitation Year
---------------------------------------------
12
(k) PROJECTED ANNUAL BENEFIT. The term Projected Annual Benefit means the
annual retirement benefit (adjusted to an actuarially equivalent
Straight Life Annuity if such benefit is expressed in a form other
than a Straight Life Annuity or Qualified Joint and Survivor Annuity)
to which the Participant would be entitled under the terms of the Plan
assuming:
(1) The Participant will continue employment until Normal Retirement
Age under the Plan (or current age, if later); and
(2) The Participant's Compensation for the current Limitation Year
and all other relevant factors used to determine benefits under
the Plan will remain constant for all future Limitation Years.
4B.2 BASIC LIMITATION. If the Participant does not participate in, and has never
participated in another qualified plan or welfare benefit fund maintained
by the Employer, as defined in Code section 419(e), or an individual
medical account, as defined in Code section 415(l)(2), maintained by the
Employer, or a simplified employee pension, as defined in Code section
408(k), maintained by the Employer, which provides Annual Additions as
defined in Section 4B.I(a), the amount of Annual Additions which may be
credited to the Participant's Account for any Limitation Year will not
exceed the lesser of the Maximum Permissible Amount or any other limitation
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contained in this Plan. If the Employer contributions that would otherwise
be contributed or allocated to the Participant's Account would cause the
Annual Additions for the Limitation Year to exceed the Maximum Permissible
Amount, the amount contributed or allocated will be reduced so that the
Annual Additions for the Limitation Year will equal the Maximum Permissible
Amount.
4B.3 ESTIMATED MAXIMUM PERMISSIBLE AMOUNT. Prior to determining the
Participant's actual Compensation for the Limitation Year, the Employer may
determine the Maximum Permissible Amount for a Participant on the basis of
a reasonable estimation of the Participant's Compensation for the
Limitation Year, uniformly determined for all Participants similarly
situated.
4B.4 ACTUAL MAXIMUM PERMISSIBLE AMOUNT. As soon as administratively feasible
after the end of the Limitation Year, the Maximum Permissible Amount for
the Limitation Year will be determined on the basis of the Participant's
actual Compensation for the Limitation Year.
4B.5 PARTICIPANTS COVERED BY ANOTHER PROTOTYPE DEFINED CONTRIBUTION PLAN.
(a) This Section applies if, in addition to this Plan, the Participant is
covered under another qualified Master or Prototype defined
contribution Plan maintained by the Employer, or a welfare benefit
fund, as defined in Code section 419(e), maintained by the Employer,
or an individual medical account as defined in Code section 415(l)(2),
maintained by the Employer, or a simplified employee pension plan, as
defined in Code section 408(k), that provides Annual Additions as
defined in Section 4B.I(a), during any Limitation Year. The Annual
Additions which may be credited to a Participant's Account under this
Plan for any such Limitation Year will not exceed the Maximum
Permissible Amount reduced by the Annual Additions credited to a
Participant's account under the other qualified Master and Prototype
defined contribution Plans, welfare benefit funds, individual medical
accounts, and simplified employee pension plans for the same
Limitation Year. If the Annual Additions with respect to the
Participant under other qualified Master and Prototype defined
contribution Plans, welfare benefit funds, individual medical
accounts, and simplified employee pension plans maintained by the
Employer are less than the Maximum Permissible Amount and the Employer
contributions that would otherwise be contributed or allocated to the
Participant's Account under this Plan would cause the Annual Additions
for the Limitation Year to exceed this limitation, the amount
contributed or allocated will be reduced so that the Annual Additions
under all such plans and funds for the Limitation Year will equal the
Maximum Permissible Amount. If the Annual Additions with respect to
the Participant under such other qualified master and prototype
defined contribution plans, welfare benefit funds, individual medical
accounts, and simplified employee pension plans, in the aggregate are
equal to or greater than the Maximum Permissible Amount, no amount
will be contributed or allocated to the Participant's Account under
this Plan for the Limitation Year.
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(b) Prior to determining the Participant's actual Compensation for the
Limitation Year, the Employer may determine the estimated Maximum
Permissible Amount for a Participant in the manner described in
Section 4B.3.
(c) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the Limitation
Year will be determined on the basis of the Participant's actual
Compensation for the Limitation Year.
(d) If, pursuant to Section 4B.5(c), or as a result of the allocation of
Forfeitures, a Participant's Annual Additions under this Plan and such
other plans Would result in Excess Annual Additions as defined in
Section 4C.1(b) for a Limitation Year, the Excess Annual Additions
will be deemed to consist of the Annual Additions last allocated,
except that Annual Additions attributable to a simplified employee
pension plan will be deemed to have been allocated first, followed by
Annual Additions to a welfare benefit fund or individual medical
account, regardless of the actual allocation date.
(e) If Excess Annual Additions were allocated to a Participant on an
allocation date of this Plan which coincides with an allocation date
of another plan, the Excess Annual Additions attributed to this Plan
will be the product of:
(1) The total Excess Annual Additions allocated as of such date,
multiplied by
(2) The ratio of (i) the Annual Additions allocated to the
Participant for the Limitation Year as of such date under this
Plan to (ii) the total Annual Additions allocated to the
Participant for the Limitation Year as of such date under this
and all the other qualified Master or Prototype defined
contribution Plans.
(f) Any Excess Annual Additions attributed to this Plan will be disposed
of in the manner described in Section 4C.3.
4B.6 PARTICIPANTS COVERED BY NON-PROTOTYPE DEFINED CONTRIBUTION PLAN. If the
Participant is covered under another qualified defined contribution plan
maintained by the Employer which is not a Master or Prototype Plan, Annual
Additions which may be credited to the Participant's Account under this
Plan for any Limitation Year will be limited in accordance with Section
4B.5 as though the other plan were a Master or Prototype Plan, unless the
Employer provides other limitations in the Limitations on Allocations
section of the Adoption Agreement.
4B.7 PARTICIPANTS COVERED BY DEFINED BENEFIT PLAN. If the Employer maintains, or
at any time maintained, a qualified defined benefit plan covering any
Participant in this Plan, the sum of the Participant's Defined Benefit Plan
Fraction and Defined Contribution Plan Fraction will not exceed 1.0 in any
Limitation Year. The Annual Additions which may be credited to the
Participant's Account under this Plan for any Limitation Year will be
limited in accordance with the Limitations on Allocations section of the
Adoption Agreement.
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4C. TREATMENT OF EXCESSES
4C.1 DEFINITIONS.
(a) EXCESS AGGREGATE CONTRIBUTIONS. The term Excess Aggregate
Contributions means, with respect to any Plan Year, the excess of:
(1) The aggregate Contribution Percentage Amounts taken into account
in computing the ACP of Highly Compensated Employees for such
Plan Year, over
(2) The maximum Contribution Percentage Amounts permitted by the ACP
test (determined by reducing the Contribution Percentage Amounts
made on behalf of Highly Compensated Employees in order of their
Actual Contribution Ratios beginning with the highest of such
ratios). Such determination shall be made after first determining
Excess Elective Deferral Contributions, pursuant to Section
4C.2(a) and then determining Excess Contributions pursuant to
Section 4C.4.
(b) EXCESS ANNUAL ADDITIONS. The term Excess Annual Additions means the
excess of the Participant's Annual Additions for the Limitation Year
over the Maximum Permissible Amount.
(c) EXCESS CONTRIBUTIONS. The term Excess Contributions means, with
respect to any Plan Year, the excess of:
(1) The aggregate Deferral Percentage Amounts taken into account in
computing the ADP of Highly Compensated Employees for such Plan
Year, over
(2) The maximum Deferral Percentage Amounts permitted by the ADP test
(determined by reducing the Deferral Percentage Amounts made on
behalf of Highly Compensated Employees in order of their Actual
Deferral Ratios, beginning with the highest of such ratios).
(d) EXCESS ELECTIVE DEFERRAL CONTRIBUTIONS. The term Excess Elective
Deferral Contributions means those Elective Deferral Contributions
that are includable in a Participant's gross income under Code section
402(g) to the extent such Participant's Elective Deferral
Contributions for a taxable year exceed the dollar limitation under
such Code section. Excess Elective Deferral Contributions shall be
treated as Annual Additions under the Plan pursuant to Section 4B,
unless such amounts are distributed in accordance with the provisions
of Section 4C.2(a), below.
4C.2 EXCESS ELECTIVE DEFERRAL CONTRIBUTIONS.
(a) In the event that Elective Deferral Contributions made during a
calendar year exceed the limit specified in Section 2C.1(j)(4), then
the Excess Elective Deferral Contributions, plus any income and minus
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any loss allocable thereto, shall be distributed to the Participant by
the April 15 following the calendar year in which such amount was
contributed, provided that the Participant notifies the Plan
Administrator no later than 30 days in advance of his intent to
withdraw such Excess Elective Deferral Contributions, or is deemed to
notify the Plan Administrator. A Participant is deemed to notify the
Plan Administrator of any Excess Elective Deferral Contributions that
arise by taking into account only those Elective Deferrals made to
this Plan and any other plans of this Employer. The spousal consent
provisions of Section 3C shall not apply to any distribution of Excess
Elective Deferral Contributions.
(b) Excess Elective Deferral Contributions shall be adjusted for any
income or loss for the Employee's tax year. The income or loss
allocable to excess Elective Deferral Contributions is an amount
determined by multiplying the sum of the income or loss allocable to
the Participant's Elective Deferral Contribution account for the
taxable year by a fraction, the numerator of which is such
Participant's Excess Elective Deferral Contributions for the taxable
year, and the denominator of which is equal to the sum of the
Participant's Account balance attributable to Elective Deferral
Contributions as of the beginning of the taxable year plus the
Participant's Elective Deferral Contributions for the taxable year.
Income for the gap period (the period from the end of the taxable year
to the date of distribution) shall not be allocated to Excess Elective
Deferral Contributions.
(c) Matching Contributions, as defined in Section 1.35, that are
attributable to Excess Elective Deferral Contributions shall be
forfeited, and as such, shall be applied to reduce Employer
contributions or pay Plan expenses.
4C.3 EXCESS ANNUAL ADDITIONS. If, pursuant to Section 4B.4 or as a result of the
allocation of Forfeitures, there are Excess Annual Additions, the excess
will be disposed of using any of the following methods:
(a) Employee Contributions or Elective Deferral Contributions or both, to
the extent they would reduce the Excess Annual Additions, will be
returned to the Participant. The Contributions returned in accordance
with the preceding shall include any gains or losses attributable to
such Contributions.
Employee Contributions so returned will be disregarded with respect to
the ACP test. Elective Deferral Contributions so returned will be
disregarded with respect to the Elective Deferral limitation described
in Section 2C.l(i)(4) of the Plan and the ADP test.
(b) If, after the application of paragraph (a), Excess Annual Additions
still exist and the Participant is covered by the Plan at the end of
the Limitation Year, the Excess Annual Additions in the Participant's
Account, other than Employee Contributions and Elective Deferral
Contributions, will be used to reduce Employer contributions
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(including any allocation of Forfeitures) for such Participant in the
next Limitation Year, and each succeeding Limitation Year, if
necessary.
(c) If, after the application of paragraph (a), Excess Annual Additions
still exist and the Participant is not covered by the Plan at the end
of a Limitation Year, the Excess Annual Additions will be held
unallocated in a suspense account. The suspense account will be
applied to reduce future Employer contributions (including allocation
of any Forfeiture) for all remaining Participants in the next
Limitation Year, and each succeeding Limitation Year if necessary.
(d) If a suspense account is in existence at any time during the
Limitation Year pursuant to this Section, it will not participate in
the allocation of the Trust or Insurance Company's gains and losses.
If a suspense account is in existence at any time during a particular
Limitation Year, all amounts in the suspense account must be allocated
and reallocated to the Participants' Account before any Employer or
Employee Contributions may be made to the Plan for that Limitation
Year. Except as provided in Section 4C.3(a), Excess Annual Additions
may not be distributed to Participants or former Participants.
4C.4 EXCESS CONTRIBUTIONS.
(a) Notwithstanding any other provision of this Plan, Excess
Contributions, plus any income and minus any loss allocable thereto,
shall be distributed no later than the last day of each Plan Year to
Participants to whose Participants' Accounts such Excess Contributions
were allocated for the preceding Plan Year. If such excess amounts are
distributed more than 2-1/2 months after the last day of the Plan Year
in which such excess amounts arose, a ten percent excise tax will be
imposed on the Employer maintaining the Plan with respect to such
amounts.
Such distributions shall be made to Highly Compensated Employees on
the basis of the respective portions of the Excess Contributions
attributable to each of such Employees.
The distribution of Excess Contributions made to the family members of
a family group that was combined for purposes of determining a Highly
Compensated Employee's Actual Deferral Ratio shall be allocated among
the family members in proportion to the Deferral Percentage Amounts
(including any amounts required to be taken into account under
Sections 4A.3(a) and (b) of the Plan) of each family member that is
combined to determine the Actual Deferral Ratio.
(b) Excess Contributions shall be treated as Annual Additions, as defined
in Section 4B.1, under the Plan in the Limitation Year in which they
arose.
(c) Excess Contributions shall be adjusted for any income or loss for the
Plan Year. The income or loss allocable to Excess Contributions is an
amount determined by multiplying the sum of the income or loss
allocable to the Participant's Account for Deferral Percentage Amounts
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for the Plan Year, by a fraction, the numerator of which is such
Participant's Excess Contributions for the Plan Year and the
denominator of which is equal to the sum of the Participant's Account
balance attributable to Deferral Percentage Amounts as of the
beginning of the Plan Year plus the Participant's Deferral Percentage
Amounts for the Plan Year. Income for the gap period (the period from
the end of the Plan Year to the date of distribution) shall not be
allocated to Excess Contributions.
(d) Excess Contributions shall be distributed from the Participant's
Account for Elective Contributions and Qualified Matching
Contributions (if applicable) in proportion to the Participant's
Elective Deferral Contributions and Qualified Matching Contributions
(to the extent used in the ADP test) for the Plan Year. Excess
Contributions shall be distributed from the Participant's Qualified
Nonelective Contribution Account only to the extent that such Excess
Contributions exceed the balance in the Participant's Account for
Elective Contributions and Qualified Matching Contributions.
(e) Matching Contributions, as defined in Section 1.35, that are
attributable to Excess Contributions, shall be forfeited, and as such,
shall be applied to reduce Employer contributions or pay Plan
expenses.
4C.5 EXCESS AGGREGATE CONTRIBUTIONS.
(a) Notwithstanding any other provision of this Plan, Excess Aggregate
Contributions, plus any income and minus any loss allocable thereto,
shall be forfeited, if forfeitable, or if not forfeitable, distributed
no later than the last day of each Plan Year to Participants to whose
Participants' Accounts such Excess Aggregate Contributions were
allocated for the preceding Plan Year. If such Excess Aggregate
Contributions are distributed more than 2-1/2 months after the last
day of the Plan Year in which such excess amounts arose, a ten percent
excise tax will be imposed on the Employer maintaining the Plan with
respect to those amounts.
The distribution of Excess Aggregate Contributions made to the family
members of a family group that was combined for purposes of
determining a Highly Compensated Employee's Actual Contribution Ratio
shall be allocated among the family members in proportion to the
Contribution Percentage Amounts (including any amounts required to be
taken into account under Sections 4A.5 (a) and (b) of the Plan) of
each family member that is combined to determine the Actual
Contribution Ratio.
(b) Excess Aggregate Contributions shall be treated as Annual Additions,
as defined in Section 4B.1, in the Limitation Year in which they
arose.
(c) Excess Aggregate Contributions shall be adjusted for any income or
loss for the Plan Year. The income or loss allocable to Excess
Aggregate Contributions is an amount determined by multiplying the sum
of the income or loss allocable to the Participant's Account for
Contribution Percentage Amounts for the Plan Year by a fraction, the
numerator of which is such Participant's Excess Aggregate
Contributions for the Plan Year, and the denominator of which is equal
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Contributions
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to the sum of the Participant's Account balance attributable to
Contribution Percentage Amounts as of the beginning of the Plan Year
plus the Participant's Contribution Percentage Amounts for the Plan
Year. Income for the gap period (the period from the end of the Plan
Year to the date of distribution) shall not be allocated to Excess
Aggregate Contributions.
(d) Excess Aggregate Contributions shall be forfeited, if forfeitable, or
distributed on a pro-rata basis from the Participant's Account for
Employee Contributions, Matching Contributions, and Qualified Matching
Contributions (and, if applicable, the Participant's Qualified
Nonelective Contributions or Elective Deferral Contributions, or
both).
(e) Forfeitures of Excess Aggregate Contributions shall be applied to
reduce Employer contributions or pay Plan expenses.
(f) Matching Contributions as defined in Section 1.35 that are
attributable to Excess Aggregate Contributions shall be forfeited, and
as such, shall be applied to reduce Employer contributions or pay Plan
expenses.
Article IV - Legal Limitations on 83 October 27, 1995
Contributions
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ARTICLE V - PARTICIPANT PROVISIONS
5A. ANNUITY CONTRACT AND PARTICIPANT'S ACCOUNT
5A.1 PARTICIPANT'S ACCOUNT. A Participant's Account shall be maintained on
behalf of each Participant until such Account is distributed in accordance
with the terms of this Plan.
Each Participant shall have the exclusive authority to direct the
investment of Employee Contributions, Elective Deferral Contributions, QVEC
Contributions and Rollover Contributions, if applicable, from among the
investment options selected by the Employer.
If selected by the Employer in its Adoption Agreement, the Participant,
Beneficiary and/or Alternate Payee additionally shall have the exclusive
authority to direct the investment of contributions made by the Employer
from among the investment choices selected by the Employer.
5A.2 INVESTMENT TRANSFERS. Each Participant, Beneficiary, and/or Alternate Payee
shall have the exclusive authority to direct the transfer of amounts
between the investment funds designated by the Employer, attributable to
his Employee Contributions, Elective Deferral Contributions, QVEC
Contributions and Rollover Contributions, if applicable.
If the Employer selects in its Adoption Agreement to grant the Participant
exclusive authority to direct the investment of contributions made by the
Employer, the Participant, Beneficiary, and/or Alternate Payee shall also
have the exclusive authority to transfer contributions made by the Employer
from among the investment choices selected by the Employer.
The transfer of amounts between investment funds shall be subject to the
rules of the investment funds in which the Participant's Account is
invested or is to be invested.
The Plan Administrator or the Participant, Beneficiary, and/or Alternate
Payee as the case may be, may change such amounts as often as the Plan
Administrator may allow in accordance with the terms of the investment
funds in which the Participant's Account is being invested.
The ability of a Participant who is subject to the reporting requirements
of section 16(a) of the Securities and Exchange Act of 1934 (the "Act") to
make withdrawals or investment changes involving the Participant's Employer
Stock Account may be restricted by the Plan Administrator to comply with
rules under section 16(b) of the Act.
5A.3 PARTICIPANT'S ACCOUNT VALUATION. A Participant's Account shall be
maintained on behalf of each Participant until such Account is distributed
in accordance with the terms of this Plan. At least once per year, as of
the last day of the Plan Year, each Participant's Account shall be
adjusted, in the ratio that the Participant's Account balance bears to all
account balances invested into the same investment vehicle, for any
earnings, gains, losses, contributions, withdrawals, expenses, and loans
attributable to such Plan Year, in order to obtain a new valuation of the
Article V - Participant Provisions 84 October 27, 1995
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Participant's Account. The assets of the Plan will be valued annually at
fair market value as of the last day of each Plan Year.
5B. LIFE INSURANCE POLICIES
5B.1 OPTIONAL PURCHASE OF LIFE INSURANCE. If the Employer in its Adoption
Agreement shall permit the purchase of life insurance on the lives of some
or all Participants hereunder, each eligible Participant may elect that a
portion of the Contribution made on his behalf shall be applied to the
purchase of a Life Insurance Policy or Policies on his life. The
application for each Policy shall be signed by the Participant and by the
Trustee and shall conform to the requirements of the Insurance Company,
including any requested evidence of insurability, and the requirements of
this Section. All Life Insurance Policies shall be issued so as to permit a
common billing date. Any Policy on the life of a Participant who can
qualify for waiver of premium thereunder and participant account
contribution disability benefits thereunder may include such benefits if
applied for by the Participant. The Plan Administrator may adopt reasonable
rules regarding the purchase of Life Insurance Policies provided such rules
are administered in a consistent and nondiscriminatory manner. No
application shall be made hereunder for any Life Insurance Policy on the
life of a Participant acceptable to the Insurance Company at standard
premium rates for a face amount of less that $1,000 for the first, or any
additional Policy issued on the Participant's life.
5B.2 PREMIUMS ON LIFE INSURANCE POLICIES. The premiums on all Life Insurance
Policies on the life of a Participant shall be paid from the portion of his
Participant's Account attributable to contributions made by the Employer,
to the extent sufficient therefor, otherwise in one of the following
manners:
(a) By a loan against the Participant's Policy or Policies, under the
automatic premium loan provision thereof, or
(b) By payment out of his Participant's Account.
If the Participant is not acceptable to the Insurance Company as a standard
risk at standard rates, a Policy with the same premium but a lesser death
benefit may be purchased.
5B.3 LIMITATIONS ON PREMIUMS. In no case shall the cumulative total premiums
paid on all Policies held on the life of a Participant hereunder exceed an
amount equal to the applicable percentage set forth below of all
Contributions (other than Employee Contributions) and Forfeitures
theretofore allocated or currently due on his behalf:
(a) 49% in the case of ordinary life insurance or similar policies.
(b) 25% in the case of term insurance policies or a combination of
policies, with premiums on ordinary life insurance or similar policies
being given half weight.
If such cumulative total premiums would otherwise exceed this amount, the
necessary steps to avoid this result shall be taken by reduction of the
Participant's life insurance coverage by changing all or a portion of his
Article V - Participant Provisions 85 October 27, 1995
<PAGE>
coverage to paid-up life insurance or by selling the excess portion to the
Participant.
5B.4 DISPOSAL. A Participant who no longer wishes to have any part of his
allocable share of Contributions used to pay the premiums for any Life
Insurance Policy or Policies may withdraw a prior election by written
notice to the Trustee to that effect. Any Policy shall be disposed of in
accordance with its provisions as the Trustee shall direct.
5B.5 RIGHTS UNDER POLICIES. Each Policy shall provide that the Trustee shall
have the right to receive any or all payments that may be due during the
Participant's lifetime. Any death benefit shall be payable directly to the
Beneficiary named in the Policy and the Participant shall have the right,
subject to the terms of Section 3C, either directly or through the Trustee,
to change the Beneficiary from time to time and to elect settlement options
under the policy for the benefit of the Beneficiary. The Trustee shall have
the right to exercise all other options and privileges contained in the
policy and shall exercise such rights and privileges in a manner consistent
with the terms of the Plan.
5B.6 LOANS. No loans shall be made against any of the Policies hereunder either
from the Insurance Company or any other source unless such loans are made
in order to pay amounts then due as premiums thereon.
5B.7 CONDITIONS OF COVERAGE. Except as may be otherwise provided in any
conditional or binding receipt issued by the Insurance Company, there shall
be no coverage and no death benefit payable under any Policy to be
purchased from the Insurance Company until such Policy shall have been
delivered and the premium therefor shall have been paid to the Insurance
Company as a premium for that Policy. Neither the Employer nor the Trustee
shall have any responsibility as to the effectiveness of any Life Insurance
Policy purchased from the Insurance Company hereunder nor be under any
liability or obligation to pay any amount to any Participant or his
Beneficiary by reason of any failure or refusal by the Insurance Company to
make such payment.
5B.8 POLICY NOT YET IN FORCE. If at the death of any Participant, the Trustee
shall be holding any amount intended for the purchase of any Life Insurance
Policy on the Participant's life, but coverage under such Policy shall not
yet be in force, the Trustee shall credit such amount to the Participant's
Account to be disposed of as a portion thereof.
5B.9 VALUE OF POLICY. The value of any Policy on the life of a living
Participant for any purpose under this Plan shall be that amount which the
Insurance Company would pay upon surrender of such Policy in accordance
with its usual rules and practices.
5B.10DIVIDENDS. If dividends are allowed on any Life Insurance Policy, they
shall be used to provide additional benefits under the Policy.
5B.11DISTRIBUTION. No life insurance protection shall continue in force under
the Plan subsequent to a Participant's retirement or Termination of
Employment, whichever occurs first. As of such date, any Life Insurance
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Policy shall be distributed to the Participant in accordance with its terms
and the terms of Section 3C.3.
5B.12APPLICATION. The Trustee, if the Plan is trusteed, or custodian, if the
Plan has a custodial account, shall apply for and will be the owner of any
Life Insurance Policy purchased under the terms of this Plan. The Life
insurance Policy(ies) must provide that proceeds will be payable to the
Trustee (or custodian, if applicable). However, the Trustee (or custodian)
shall be required to pay over all proceeds of the Life Insurance
Policy(ies) to the Participant's designated Beneficiary in accordance with
the distribution provisions of this Plan. A Participant's Spouse will be
the designated Beneficiary of the proceeds in all circumstances unless a
Qualified Election has been made in accordance with Section 3C.2(c), joint
and Survivor Annuity Requirements, if applicable. Under no circumstances
shall the Trust (or custodial account) retain any part of the proceeds.
In the event of any conflict between the provisions of this Plan and any
Life insurance Policies or annuity contracts issued pursuant to the Plan,
the Plan provisions shall control.
5C. LOANS
5C.1 LOANS TO PARTICIPANTS. If the Employer has specified in its Adoption
Agreement that loans are permitted, then the Plan Administrator may make a
bona fide loan to a Participant, in an amount which, when added to the
outstanding balance of all other loans to the Participant from all
qualified plans of the Employer, does not exceed the lesser of $50,000
reduced by the excess of the Participant's highest outstanding loan balance
during the 12 months preceding the date on which the loan is made over the
outstanding loan balance on the date the new loan is made, or 50% of the
Participant's Vested Interest in his Participant's Account excluding
amounts attributable to QVEC Contributions. Notwithstanding any provision
in this paragraph to the contrary, loans may not exceed a Participant's
Vested Interest attributable to such contributions.
In the event of default, foreclosure on the note and attachment of security
will not occur until a distributable event occurs in the Plan.
No loans will be made to any Shareholder-Employee or Owner-Employee or to
family members of Shareholder-Employees or Owner-Employees, as defined in
Code section 267(c)(4).
The loan shall be made under such terms, security interest, and conditions
as the Plan Administrator deems appropriate, provided, however, that:
(a) Loans shall be made available to all Participants and
parties-in-interest (as defined in ERISA and including Employees and
Beneficiaries), on a reasonably equivalent basis.
(b) Loans shall not be made available to Highly Compensated Employees on a
basis greater than the basis made available to other Employees.
Article V - Participant Provisions 87 October 27, 1995
<PAGE>
(c) Loans must bear a reasonable rate of interest.
(d) Loans are adequately secured.
(e) Unless the provisions of Section 3C.6 apply to a Participant, loans
may be made only after a Participant obtains the consent of his
Spouse, if any, to use his Participant's Account as security for the
loan. Spousal consent shall be obtained no earlier than the beginning
of the 90-day period that ends on the date on which the loan is to be
so secured. The consent must be in writing, must acknowledge the
effect of the loan, and must be witnessed by a Plan representative or
notary public. Such consent shall thereafter be binding with respect
to the consenting Spouse or any subsequent Spouse with respect to that
loan. A new consent shall be required if the Participant's Account is
used for renegotiation, extension, renewal or other revision of the
loan.
(f) Loans must be made in accordance with and subject to all of the
provisions of this Section SC.
If a valid spousal consent has been obtained in accordance with (e),
then, notwithstanding any other provision of this Plan, the portion of
the Participant's Vested Interest used as a security interest held by
the Plan by reason of a loan outstanding to the Participant shall be
taken into account for purposes of determining the amount of the
account balance payable at the time of death or distribution, but only
if the reduction is used as repayment of the loan. If less than 100%
of the Participant's Vested Interest in his Participant's Account
(determined without regard to the preceding sentence) is payable to
the surviving Spouse, then the Participant's Account shall be adjusted
by first reducing the Vested Interest by the amount of the security
used as repayment of the loan, and then determining the benefit
payable to the surviving Spouse.
5C.2 LOAN PROCEDURES. The Plan Administrator shall establish a written set of
procedures, set forth in the summary plan description or any other
established set of procedures, which becomes a part of such Plan by which
all loans will be administered. Such rules, which are incorporated herein
by reference, will include, but not be limited to the following:
(a) The person or persons authorized to administer the loan program,
identified by name or position;
(b) The loan application procedure;
(c) The basis for approving or denying loans;
(d) Any limits on the types of loans permitted;
(e) The procedure for determining a "reasonable" interest rate;
(f) Acceptable collateral;
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(g) Default conditions; and
(h) Steps - which will be taken to preserve Plan assets in the event of
default.
5D. PARTICIPANTS RIGHTS
5D.1 GENERAL RIGHTS OF PARTICIPANTS AND BENEFICIARIES. The Plan is established
and the Plan or Trust assets are held for the exclusive purpose of
providing benefits for such Employees and their Beneficiaries as have
qualified to participate under the terms of the Plan.
5D.2 FILING A CLAIM FOR BENEFITS. A Participant or Beneficiary, or the Employer
acting in his behalf, shall notify the Plan Administrator of a claim of
benefits under the Plan. Such request shall be in writing to the Plan
Administrator and shall set forth the basis of such claim and shall
authorize the Plan Administrator to conduct such examinations as may be
necessary to determine the validity of the claim and to take such steps as
may be necessary to facilitate the payment of any benefits to which the
Participant or Beneficiary may be entitled under the terms of the Plan.
5D.3 DENIAL OF CLAIM. Whenever a claim for benefits by any Participant or
Beneficiary has been denied by a Plan Administrator, a written notice,
prepared in a manner calculated to be understood by the Participant, must
be provided, setting forth (1) the specific reasons for the denial; (2) the
specific reference to pertinent Plan provisions on which the denial is
based; (3) a description of any additional material or information
necessary for the claimant to perfect the claim and an explanation of why
such material or information is necessary; and (4) an explanation of the
Plan's claim review procedure.
5D.4 REMEDIES AVAILABLE TO PARTICIPANTS. A Participant or Beneficiary (1) may
request a review by a Named Fiduciary, other than the Plan Administrator,
upon written application to the Plan; (2) may review pertinent Plan
documents; and (3) may submit issues and comments in writing to a Named
Fiduciary. A Participant or Beneficiary shall have 60 days after receipt by
the claimant of written notification of a denial of a claim to request a
review of a denied claim.
A decision by a Named Fiduciary shall be made promptly and not later than
60 days after the Named Fiduciary's receipt of a request for review, unless
special circumstances require an extension of the time for processing in
which case a decision shall be rendered as soon as possible, but not later
than 120 days after receipt of a request for review. The decision on review
by a Named Fiduciary shall be in writing and shall include specific reasons
for the decision, written in a manner calculated to be understood by the
claimant, and specific references to the pertinent Plan provisions on which
the decision is based.
A Participant or Beneficiary shall be entitled, either in his own name or
in conjunction with any other interested parties, to bring such actions in
law or equity or to undertake such administrative actions or to seek such
relief as may be necessary or appropriate to compel the disclosure of any
required information, to enforce or protect his rights, to recover present
benefits due to him or to clarify his rights to future benefits under the
Plan.
Article V - Participant Provisions 89 October 27, 1995
<PAGE>
5D.5 LIMITATION OF RIGHTS. Participation hereunder shall not grant any
Participant the right to be retained in the Service of the Employer or any
other rights or interest in the Plan or Trust fund other than those
specifically herein set forth.
5D.6 100% VESTED CONTRIBUTIONS. Each Participant, regardless of his length of
Service with the Employer, shall be fully vested (100%) at all times in any
portion of his Participant's Account attributable to the following
contributions, as applicable:
(a) Employee Contributions and earnings thereon;
(b) Elective Deferral Contributions and earnings thereon;
(c) Qualified Matching Contributions and earnings thereon;
(d) Qualified Nonelective Contributions and earnings thereon;
(e) Rollover Contributions and earnings thereon;
(f) QVEC Contributions and earnings thereon.
5D.7 REINSTATEMENT OF BENEFIT. In the event any portion of a benefit which is
payable to a Participant or a Beneficiary shall remain unpaid on account of
the inability of the Plan Administrator, after diligent effort, to locate
such Participant or Beneficiary, the amount so distributable shall be
treated as a Forfeiture under Section 3D. If a claim is made by the
Participant or Beneficiary for any benefit forfeited under this Section,
such benefit must be reinstated by the Employer.
5D.8 NON-ALIENATION. It is a condition of the Plan, and all rights of each
Participant shall be subject thereto, that no right or interest of any
Participant in the Plan shall be assignable or transferable in whole or in
part, either directly or by operation of law or otherwise, including, but
without limitation, execution, levy, garnishment, attachment, pledge,
bankruptcy or in any other manner, and no right or interest of any
Participant in the Plan shall be liable for or subject to any obligation or
liability of such Participant. The preceding sentence shall not preclude
the enforcement of a federal tax levy made pursuant to Code section 6331 or
the collection by the United States on a judgement resulting from an unpaid
tax assessment.
The preceding paragraph shall also apply to the creation, assignment, or
recognition of a right to any benefit payable with respect to a Participant
pursuant to a domestic relations order, unless such order is determined to
be a QDRO. A domestic relations order entered before January 1, 1985 will
be treated as a QDRO if payment of benefits pursuant to the order has
commenced as of such date, and may be treated as a QDRO if payment of
benefits has not commenced as of such date, even though the order does not
satisfy the requirements of Code section 414(p).
Article V - Participant Provisions 90 October 27, 1995
<PAGE>
ARTICLE VI - OVERSEER PROVISIONS
6A. FIDUCIARY DUTIES AND RESPONSIBILITIES
6A.1 GENERAL FIDUCIARY STANDARD OF CONDUCT. Each fiduciary of the Plan shall
discharge his duties hereunder solely in the interest of the Participants
and their Beneficiaries and for the exclusive purpose of providing benefits
to Participants and their Beneficiaries and defraying reasonable expenses
of administering the Plan. Each Fiduciary shall act with the care, skill,
prudence and diligence under the circumstances that a prudent man acting in
a like capacity and familiar with such matters would use in conducting an
enterprise of like character and with like aims, in accordance with the
documents and instruments governing this Plan, insofar as such documents
and instruments are consistent with this standard.
6A.2 SERVICE IN MULTIPLE CAPACITIES. Any Person or group of Persons may serve in
more than one Fiduciary capacity with respect to this Plan, specifically
including service both as Trustee and Plan Administrator.
6A.3 LIMITATIONS ON FIDUCIARY LIABILITY. Nothing in this Plan shall be construed
to prevent any Fiduciary from receiving any benefit to which he may be
entitled as a Participant or Beneficiary in this Plan, so long as the
benefit is computed and paid on a basis which is consistent with the terms
of this Plan as applied to all other Participants and Beneficiaries. Nor
shall this Plan be interpreted to prevent any Fiduciary from receiving any
reasonable compensation for services rendered, or for the reimbursement of
expenses properly and actually incurred in the performance of his duties
with the Plan; except that no Person so serving who already receives
full-time pay from an Employer shall receive compensation from this Plan,
except for reimbursement of expenses properly and actually incurred.
6A.4 INVESTMENT MANAGER. If an Investment Manager has been appointed pursuant to
Section 6B.7 of this Plan, he is required to acknowledge in writing that he
has undertaken a Fiduciary responsibility with respect to the Plan. The
Insurance Company's liability as a Fiduciary is limited to that arising
from its management of any assets of the Plan held by the Insurance Company
in its separate accounts.
6B. THE PLAN ADMINISTRATOR
6B.1 DESIGNATION AND ACCEPTANCE. The Employer shall designate a Person or
Persons to serve as Plan Administrator under the Plan and such Persons, by
joining in the execution of the Adoption Agreement, accepts such
appointment and agrees to act in accordance with the terms of the Plan.
6B.2 DUTIES AND RESPONSIBILITY. The Plan Administrator shall administer the Plan
for the exclusive benefit of the Participants and their Beneficiaries in a
nondiscriminatory manner subject to the specific terms of the Plan. The
Plan Administrator shall perform all such duties as are necessary to
operate, administer, and manage the Plan in accordance with the terms
thereof. This shall include notification to the Insurance Company of any
adjustment made to a Participant's Account as a result of Excess Annual
Additions as defined in Section 4C.1(b).
Article VI - Overseer Provisions 91 October 27, 1995
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The Plan Administrator shall comply with the regulatory provisions of ERISA
and shall furnish to each Participant (a) a summary plan description, (b)
upon written request, a statement of his total benefits accrued and his
vested benefits if any and (c) the information necessary to elect the
benefits available under the Plan. The Plan Administrator shall also file
the appropriate annual reports and any other data which may be required by
appropriate regulatory agencies.
Furthermore, the Plan Administrator shall take the necessary steps to
notify the appropriate interested parties whenever an application is made
to the Secretary of the Treasury for a determination letter in accordance
with Code section 7476 as amended.
6B.3 SPECIAL DUTIES. If the Employer that adopts this Plan is not the Plan.
Administrator, and the Plan provides for either Employee Contributions or
Patching Contributions to be made, the Plan Administrator shall:
(a) Maintain records that enable it to monitor the adopting Employer's
compliance with the requirements of Code section 401(m);
(b) Perform the ACP test, as described in Section 4A.4, for the Employer
on an annual basis; and
(c) Notify the Employer if it is required to correct Excess Aggregate
Contributions.
6B.4 EXPENSES AND COMPENSATION. The expenses necessary to administer the Plan
shall be taken from Participants' Accounts unless paid by the Employer,
including but not limited to those involved in retaining necessary
professional assistance from an attorney, an accountant, an actuary, or an
investment advisor. Nothing shall prevent the Plan Administrator from
receiving reasonable compensation for services rendered in administering
this Plan, provided the Plan Administrator is not a full-time Employee of
any Employer adopting this Plan.
6B.5 INFORMATION FROM EMPLOYER. To enable the Plan Administrator to perform his
functions, the Employer shall supply full and timely information to the
Plan Administrator on all matters relating to this Plan as the Plan
Administrator may require.
6B.6 ADMINISTRATIVE COMMITTEE; MULTIPLE SIGNATURES. In the event that more than
one Person has been duly nominated to serve on the Administrative Committee
and has signified in writing the acceptance of such designation, the
signatures of one or more Persons may be accepted by an interested party as
conclusive evidence that the Administrative Committee has duly authorized
the action therein set forth and as representing the will of and binding
upon the whole Administrative Committee. No Person receiving such documents
or written instructions and acting in good faith and in reliance thereon
shall be obliged to ascertain the validity of such action under the terms
of this Plan. The Administrative Committee shall act by a majority of its
members at the time in office, and such action may be taken either by a
vote at a meeting or in writing without a meeting.
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<PAGE>
6B.7 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. The Plan Administrator,
or any member of the Administrative Committee, may resign at any time by
delivering to the Employer a written notice of resignation, to take effect
at a date specified therein, which shall not be less than 30 days after the
delivery thereof, unless such notice shall be waived.
The Plan Administrator may be removed with or without cause by the Employer
by delivery of written notice of removal, to take effect at a date
specified therein, which shall be not less than thirty (30) days after
delivery thereof, unless such notice shall be waived.
The Employer, upon receipt of or giving notice of the resignation or
removal of the Plan Administrator, shall promptly designate a successor
Plan Administrator who must signify acceptance of this position in writing.
In the event no successor is appointed, the Board of Directors of the
Employer will function as the Administrative Committee until a new Plan
Administrator has been appointed and has accepted such appointment.
6B.8 INVESTMENT MANAGER. The Plan Administrator may appoint, in writing, an
Investment Manager or Managers to whom is delegated the authority to
manage, acquire, invest or dispose of all or any part of the Plan or Trust
assets. With regard to the assets entrusted to his care, the Investment
Manager shall provide written instructions and directions to the Employer
or Trustee, as applicable, who shall in turn be entitled to rely upon such
written direction. This appointment and delegation shall be evidenced by a
signed written agreement.
6B.9 DELEGATION OF DUTIES. The Plan Administrator shall have the power, to the
extent permitted by law, to delegate the performance of such Fiduciary and
non-Fiduciary duties, responsibilities and functions as the Plan
Administrator shall deem advisable for the proper management and
administration of the Plan in the best interests of the Participants and
their Beneficiaries.
6C. TRUST AGREEMENT
This agreement entered into by and among the Employer, the Plan Administrator
and the Trustee pursuant to the Adoption Agreement completed and signed by the
Employer, the Plan Administrator and Trustee, hereby establishes the Trust with
the following provisions to form a part of and implement the provisions of the
Plan:
6C.1 CREATION AND ACCEPTANCE OF TRUST. The Trustee, by joining in the execution
of the Adoption Agreement, accepts the Trust hereby created and agrees to
act in accordance with the express terms and conditions herein stated.
6C.2 TRUSTEE CAPACITY; CO-TRUSTEES. The Trustee may be a Bank, Trust Company or
other corporation possessing trust powers under applicable State or Federal
law or one or more individuals or any combination thereof
When two or more persons serve as Trustee, they are specifically
authorized, by a written agreement between themselves, to allocate specific
responsibilities, obligations or duties among themselves. An original copy
of such written agreement is to be delivered to the Plan Administrator.
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6C.3 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR TRUSTEE. Any Trustee may
resign at any time by delivering to the Plan Administrator a written notice
of resignation, to take effect at a date specified therein, which shall not
be less than 30 days after the delivery thereof, unless such notice shall
be waived.
The Trustee may be removed with or without cause by the Board of Directors
by delivery of a written notice of removal, to take effect at a date
specified therein, which shall not be less than 30 days after delivery
thereof, unless such notice shall be waived.
In the case of the resignation or removal of a Trustee, the Trustee shall
have the right to a settlement of its account, which may be made, at the
option of the Trustee, either (1) by judicial settlement in an action
instituted by the Trustee in a court of competent jurisdiction, or (2) by
written agreement of settlement between the Trustee and the Plan
Administrator.
Upon such settlement, all right, title and interest of such Trustee in the
assets of the Trust and all rights and privileges under this Agreement
theretofore vested in such Trustee shall vest in the successor Trustee, and
thereupon all future liability of such Trustee shall terminate; provided,
however, that the Trustee shall execute, acknowledge and deliver all
documents and written instruments which are necessary to transfer and
convey the right, title and interest in the Trust assets, and all rights
and privileges to the successor Trustee.
The Board of Directors, upon receipt of notice of the resignation or
removal of the Trustee, shall promptly designate a successor Trustee, whose
appointment is subject to acceptance of this Trust in writing and shall
notify the Insurance Company in writing of such successor Trustee.
6C.4 TAXES, EXPENSES AND COMPENSATION OF TRUSTEE. The Trustee shall deduct from
and charge against the Trust fund any taxes paid by it which may be imposed
upon the Trust fund or the income thereof or which the Trustee is required
to pay with respect to the interest of any person therein.
The Employer shall pay the Trustee annually its expenses in administering
the Trust and a reasonable compensation for its service as Trustee
hereunder if the Trustee is not an Employee of the Plan, at a rate to be
agreed upon from time to time. The reasonable compensation shall include
that for any extraordinary services.
6C.5 TRUSTEE ENTITLED TO CONSULTATION. The Trustee shall be entitled to advice
of counsel, which may be counsel for the Plan or the Employer, in any case
in which the Trustee shall deem such advice necessary. With the exception
of those powers and duties specifically allocated to the Trustee by the
express terms of this Plan, it shall not be the responsibility of the
Trustee to interpret the terms of the Plan or Trust and the Trustee may
request, and is entitled to receive guidance and written direction from the
Plan Administrator on any point requiring construction or interpretation of
the Plan documents.
Article VI - Overseer Provisions 94 October 27, 1995
<PAGE>
6C.6 RIGHTS, POWERS AND DUTIES OF TRUSTEE. The Trustee shall have the following
rights, powers, and duties:
(a) The Trustee shall be responsible for the safekeeping and administering
of the assets of this Plan and Trust in accordance with the provisions
of this Agreement and any amendments thereto. The duties of the
Trustee under this Agreement shall be determined solely by the express
provisions of this Agreement and no other further duties or
responsibilities shall be implied. Subject to the terms of this Plan
and Trust, the Trustee shall be fully protected and shall incur no
liability in acting in reliance upon the written instructions or
directions of the Plan Administrator or a duly designated Investment
Manager or any other Named Fiduciary.
(b) The Trustee shall have all powers necessary or convenient for the
orderly and efficient performance of its duties hereunder, including
but not limited to those specified in this Section. The Trustee may
appoint one or more administrative agents or contract for the
performance of such administrative and service functions as it may
deem necessary for the effective installation and operation of the
Plan and Trust.
(c) The Trustee shall have the power to collect and receive any and all
monies and other property due hereunder and to give full discharge and
acquittance therefor; to settle, compromise or submit to arbitration
any claims, debts or damages due or owing to or from the Trust; to
commence or defend suits or legal proceedings wherever, in its
judgment, any interest of the Trust requires it; and to represent the
Trust in all suits or legal proceedings in any court of law or equity
or before any other body or tribunal. it shall have the power
generally to do all acts, whether or not expressly authorized, which
the Trustee in the exercise of its Fiduciary responsibility may deem
necessary or desirable for the protection of the Trust and the assets
thereof.
(d) The Trustee shall make application to the Insurance Company for the
Annuity Contract required hereunder and shall take all necessary steps
to obtain any Life Insurance Policies elected on the lives of
Participants hereunder. In applying for the Annuity Contract, the
Trustee may indicate that, unless it directs the Insurance Company
otherwise, it shall be entitled to receive all cash payments for
further distribution to Participants and Beneficiaries.
(e) The Trustee may temporarily hold cash balances and shall be entitled
to deposit any such funds received in a bank account or bank accounts
in the name of the Trust in any bank or banks selected by the Trustee,
including the banking department of the Trustee, pending disposition
of such funds in accordance with the Trust. Any such deposit may be
made with or without interest.
(f) The Trustee shall obtain and deal with any Life Insurance Policies or
other assets of this Trust held or received under this Plan only in
accordance with the written directions from the Plan Administrator.
The Trustee shall be under no duty to determine any facts or the
propriety of any action taken or omitted by it in good faith pursuant
to instructions from the Plan Administrator.
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(g) All contributions made to the Trust fund under this Plan shall be paid
by the Trustee to the Insurance Company under the Annuity Contract
within 30 days after the date such contributions were ' due under the
Plan. However, in lieu of holding any contributions made to the Trust
fund, the Trustee may direct that all such contributions be made
directly to the Insurance Company under the Annuity Contract or any
Life Insurance Policy. The Employer shall keep the Trustee informed of
all contributions made directly to the Insurance Company in accordance
with the Trustee's instructions.
(h) If the whole or any part of the Trust shall become liable for the
payment of any estate, inheritance, income or other tax which the
Trustee shall be required to pay, the Trustee shall have full power
and authority to pay such tax out of any monies or other property in
its hands for the account of the person whose interest hereunder is so
liable. Prior to making any payment, the Trustee may require such
releases or other documents from any lawful taxing authority as it
shall deem necessary. The Trustee shall not be liable for any
nonpayment of tax when it distributes an interest hereunder on
instructions from the Plan Administrator.
(i) The Trustee shall keep a full, accurate and detailed record of all
transactions of the Trust which the Plan Administrator shall have the
right to examine at any time during the Trustee's regular business
hours. Following the close of the fiscal year of the Trust, or as soon
as practical thereafter, the Trustee shall furnish the Plan
Administrator with a statement of account. This account shall set
forth all receipts, disbursements and other transactions effected by
the Trustee during said year.
The Plan Administrator shall promptly notify the Trustee in writing of
its approval or disapproval of the account. The Plan Administrator's
failure to disapprove the account within 60 days after receipt shall
be considered an approval. The approval by the Plan Administrator
shall be binding as to all matters embraced in any statement to the
same extent as if the account of the Trustee had been settled by
judgment or decree of a court of competent jurisdiction under which
the Trustee, Plan Administrator, Employer and all persons having or
claiming any interest in the Trust were parties; provided, however,
that the Trustee may have its account judicially settled if it so
desires.
(j) If, at any time, there shall be a dispute as to the person to whom
payment or delivery of monies or property should be made by the
Trustee, or regarding any action to be taken by the Trustee, the
Trustee may postpone such payment, delivery or action, retaining the
fun@s or property involved, until such dispute shall have been
resolved in a court of competent jurisdiction or the Trustee shall
have been indemnified to its satisfaction or until it has received
written direction from the Plan Administrator.
(k) Anything in this instrument to the contrary notwithstanding, it shall
be understood that the Trustee shall have no duty or responsibility
with respect to the determination of matters pertaining to the
eligibility of any Employee to become or remain a Participant
hereunder, the amount of benefit to which any Participant or
Beneficiary shall be entitled hereunder, all such responsibilities
Article VI - Overseer Provisions 96 October 27, 1995
<PAGE>
being vested in the Plan Administrator. The Trustee shall have no duty
to collect any contribution from the Employer and shall not be
concerned with the amount of any contribution nor the application of
any contribution formula.
6C.7 EVIDENCE OF TRUSTEE ACTION. In the event that the Trustee comprises two or
more Trustees, then those Trustees may designate one such Trustee to
transmit all decisions of the Trustee and to sign all necessary notices and
other reports on behalf of the Trustee. All notices and other reports
bearing the signature of the individual Trustee so designated shall be
deemed to bear the signatures of all the individual Trustees and all
parties dealing with the Trustee are entitled to rely on any such notices
and other reports as authentic and as representing the action of the
Trustee.
6C.8 INVESTMENT POLICY. This Plan has been established for the sole purpose of
providing benefits to the Participants and their Beneficiaries. In
determining its investments hereunder, the Trustee shall take account of
the advice provided by the Plan Administrator as to funding policy and the
short and long-range needs of the Plan based on the evident and probable
requirements of the Plan as to the time benefits shall be payable and the
requirements therefor.
6C.9 PERIOD OF THE TRUST. If it shall be determined that the applicable State
law requires a limitation on the period during which the Employer's Trust
shall continue, then such Trust shall not continue for a period longer than
21 years following the death of the last of those Participants including
future Participants who are living at the Effective Date hereof. At least
180 days prior to the end of the twenty-first year as described in the
first sentence of this Section the Employer, the Plan Administrator and the
Trustee shall provide for the establishment of a successor trust and
transfer of Plan assets to the Trustee. If applicable State law requires no
such limitation, then this Section shall not be operative.
6D. THE INSURANCE COMPANY
6D.1 DUTIES AND RESPONSIBILITIES. The Insurance Company shall issue the Annuity
Contract and any Policies hereunder and thereby assumes all the duties and
responsibilities set forth therein. The terms of the Annuity Contract may
be changed as provided therein without amending this Plan, provided such
changes shall conform (1) to the requirements for qualification under Code
section 401(a), as amended from time to time and (2) to ERISA, as amended
from time to time.
6D.2 RELATION TO EMPLOYER, PLAN ADMINISTRATOR AND PARTICIPANTS. The Insurance
Company may receive the statement of the Plan Administrator or, if the Plan
Administrator so designates, the Employer or the Trustee, as conclusive
evidence of any of the matters decided in the Plan, and the Insurance
Company shall be fully protected in taking or permitting any action on the
basis thereof and shall incur no liability or responsibility for so doing.
The Insurance Company shall not be required to look into the terms of the
Plan, to question any action by the Employer or the Plan Administrator or
any Participant nor to determine that such action is properly taken under
the Plan. The Insurance Company shall be fully discharged from any and all
liability with respect to any payment to any Participant hereunder in
Article VI - Overseer Provisions 97 October 27, 1995
<PAGE>
accordance with the terms of the Annuity Contract or of any Policies under
the Plan. The Insurance Company shall not be required to take any action
contrary to its normal rules and practices.
6D.3 RELATION TO TRUSTEE. The Insurance Company shall not be required to look
into the terms of the Plan or question any action of the Trustee, and the
Insurance Company shall not be responsible for seeing that any action of
the Trustee is authorized by the terms hereof. The Insurance Company shall
be under no obligation to take notice of any change in Trustee until
evidence of such change satisfactory to the Insurance Company shall have
been given to the Insurance Company in writing at its home office.
6E. ADOPTING EMPLOYER
6E.1 ELECTION TO BECOME ADOPTING EMPLOYER. With the consent of the Employer and
Trustee, if any, any employer, which along with the Employer is included in
a group of employers which constitute a controlled group of corporations
(as defined in Code section 414(b)) or which constitutes trade or
businesses (whether or not incorporated) which are under common control (as
defined in section 414(c)) or which constitutes an affiliated service group
as defined in section 414(m) and is identified as an Adopting Employer in
the Adoption Agreement, may adopt this Plan and all of its provisions.
6E.2 DEFINITION. Any employer eligible to adopt this Plan under the provisions
of Section 6E.1 and which adopts this Plan and all of its provisions, shall
be known as an Adopting Employer and shall be included within the term
Employer,'as defined in Section 1.24.
6E.3 EFFECTIVE DATE OF PLAN. The effective date of the Plan for an Adopting
Employer on other than the date specified in the Adoption Agreement shall
be the first day of the Plan Year in which such Adopting Employer adopts
this Plan.
6E.4 FORFEITURES. Forfeitures of any nonvested portion of a Participant's
Account, as selected by the Employer in the Adoption Agreement, shall be
allocated only to other Participants who are employed by the Adopting
Employer who made the contributions to such Participant's Account, or shall
be used as a credit only for such Adopting Employer.
6E.5 CONTRIBUTIONS. All contributions made by an Adopting Employer shall be
determined separately by each Adopting Employer and shall be paid to and
held by the Plan for the exclusive benefit of the Employees of such
Adopting Employer and the Beneficiaries of such Employees, subject to all
the terms and conditions of this Plan. The Plan Administrator shall keep
separate books and records concerning the affairs of each Adopting Employer
and as to the accounts and credits of the Employees of each Adopting
Employer.
6E.6 EXPENSES. Subject to Section 6B.3, the expenses necessary to administer the
Plan of any Adopting Employer shall be taken from accounts of Participants
who are Employees of such Adopting Employer unless paid for by such
Adopting Employer. The expenses necessary to administer the Plan for each
Adopting Employer shall be determined by the ratio of the value of all
Article VI - Overseer Provisions 98 October 27, 1995
<PAGE>
Participants' Accounts of such Adopting Employers to the total value of all
Participants' Accounts of each Adopting Employer.
6E.7 SUBSTITUTION OF PLANS. Subject to the provisions of Section 7C, any
Adopting Employer shall be permitted to withdraw from its participation in
this Plan. The consent of the Employer or any other Adopting Employer shall
not be required.
6E.8 TERMINATION OF PLANS. If any Adopting Employer elects to terminate its Plan
pursuant to Sections 7B.4, 7B.5 and 7B.6, such termination shall in no way
affect the Plan of any other Adopting Employer.
6E.9 AMENDMENT. Amendment of this Plan by the Employer or any Adopting Employer
shall only be by the written consent of the Employer and each and every
Adopting Employer and with the consent of the Trustee, if any, where such
consent is necessary in accordance with the terms of this Plan.
6E.10PLAN ADMINISTRATOR'S AUTHORITY. The Plan Administrator shall have
authority to make any and all necessary rules or regulations, binding upon
all Adopting Employers and all Participants, to effectuate the purpose of
this Section 6E.
Article VI - Overseer Provisions 99 October 27, 1995
<PAGE>
ARTICLE VII -- SPECIAL CIRCUMSTANCES WHICH MAY AFFECT THE PLAN
7A. TOP-HEAVY PROVISIONS
7A.1 DEFINITIONS.
(a) ANNUAL COMPENSATION. The term Annual Compensation means Compensation
as defined in the Compensation section of the Adoption Agreement, but
including amounts contributed by the Employer pursuant to a salary
reduction agreement which are excludable from the Employee's gross
income under Code section 125, section 402(e)(3), section 402(h)(1)(B)
or section 403(b).
(b) DETERMINATION DATE. The term Determination Date means for any Plan
Year subsequent to the first Plan Year, the last day of the preceding
Plan Year. For the first Plan Year of the Plan, it means the last day
of that year.
(c) DETERMINATION PERIOD. The term Determination Period means the Plan
Year containing the Determination Date and the four preceding Plan
Years.
(d) KEY EMPLOYEE. The term Key Employee means any Employee or former
Employee (and the Beneficiaries of such Employee) who at any time
during the Determination Period was:
(1) An officer of the Employer if such individual's Annual
Compensation exceeds 50 percent of the dollar limitation under
Code section 415(b)(1)(A); or
(2) An owner (or considered an owner under Code section 318) of one
of the ten largest interests in the Employer if such individual's
Annual Compensation exceeds 100 percent of the dollar limitation
under Code section 415(c)(1)(A); or
(3) A 5-percent owner of the Employer; or
(4) A 1-percent owner of the Employer who has Annual Compensation of
more than $150,000.
The determination of who is a Key Employee will be made in accordance
with Code section 416(l)(1) and related regulations.
(e) PERMISSIVE AGGREGATION GROUP. The term Permissive Aggregation Group
means the Required Aggregation Group of plans plus any other plan or
plans of the Employer which, when considered as a group with the
Required Aggregation Group, would continue to satisfy the requirements
of Code sections 401(a)(4) and 410.
(f) PRESENT VALUE. Present Value shall be based only on the interest and
mortality rates specified in the Adoption Agreement.
Article VII - Special Circumstances 100 October 27, 1995
<PAGE>
(g) REQUIRED AGGREGATION GROUP. The term Required Aggregation Group means
(1) each qualified plan of the Employer in which at least one Key
Employee participates or participated at any time during the
Determination Period (regardless of whether the plan has terminated),
and (2) any other qualified plan of the Employer which enables a plan
described in (1) to meet the requirements of Code sections 401(a)(4)
or 410.
(h) TOP-HEAVY PLAN. For any Plan Year beginning after December 31, 1983,
this Plan is Top-Heavy if any of the following conditions exists:
(1) If the Top-Heavy Ratio for this Plan exceeds 60 percent and this
Plan is not part of any Required Aggregation Group or Permissive
Aggregation Group of plans.
(2) If this Plan is a part of a Required Aggregation Group of plans
but not part of a Permissive Aggregation Group and the Top-Heavy
Ratio for the group of plans exceeds 60 percent.
(3) If this Plan is a part of a Required Aggregation Group and part
of a Permissive Aggregation Group of plans and the Top-Heavy
Ratio for the Permissive Aggregation Group exceeds 60 percent.
(i) TOP-HEAVY RATIO. The term Top-Heavy Ratio means:
(1) If the Employer maintains one or more defined contribution plans
(including any simplified employee pension plan) and the Employer
has not maintained any defined benefit plan which during the
5-year period ending on the Determination Date(s) has or has had
accrued benefits, the Top-Heavy Ratio for this Plan alone or for
the Required or Permissive Aggregation Group, as appropriate, is
a fraction, the numerator of which is the sum of the account
balances of all Key Employees as of the Determination Date(s)
(including any part of any account balance distributed in the
5-year period ending on the Determination Date(s)), and the
denominator of which is the sum of all account balances
(including any part of any account balance distributed in the
5-year period ending on the Determination Date(s)), both computed
in accordance with Code section 416 and related regulations. Both
the numerator and denominator of the Top-Heavy Ratio are
increased to reflect any contribution not actually made as of the
Determination Date, but which is required to be taken into
account on that date under Code section 416 and related
regulations.
(2) If the Employer maintains one or more defined contribution plans
(including any simplified employee pension plans as defined in
Code section 408(k)) and the Employer maintains or has maintained
one or more defined benefit plans, which during the 5-year period
ending on the Determination Date(s) has or has had any accrued
benefits, the Top-Heavy Ratio for any Required or Permissive
Article VII - Special Circumstances 101 October 27, 1995
<PAGE>
Aggregation Group as appropriate is a fraction, the numerator of
which is the sum of account balances under the aggregated defined
contribution plan or plans for all Key Employees, determined in
accordance with (1) above, and the Present Value of accrued
benefits under the aggregated defined benefit plan or plans for
all Key Employees as of the Determination Date(s), and the
denominator of which is the sum of the account balances under the
aggregated defined contribution plan or plans for all
Participants, determined in accordance with (1) above, and the
Present Value of accrued benefits under the defined benefit plan
or plans for all Participants as of the Determination Date(s),
all determined in accordance with Code section 416 and related
regulations. The accrued benefits under a defined benefit plan in
both the numerator and denominator of the Top-Heavy Ratio are
increased for any distribution of an accrued benefit made in the
5- year period ending on the Determination Date.
(3) For purposes of (1) and (2) above, the value of account balances
and the Present Value of accrued benefits will be determined as
of the most recent Valuation Date that falls within or ends with
the 12-month period ending on the Determination Date, except as
provided in Code section 416 and the regulations thereunder for
the first and second plan years of a defined benefit plan. The
account balances and accrued benefits of a Participant (1) who is
not a Key Employee but who was a Key Employee in a prior year, or
(ii) who has not been credited with at least one Hour of Service
with any. Employer maintaining the Plan at any time during the
5-year period ending on the Determination Date shall be
disregarded. The calculation of the Top-Heavy Ratio, and the
extent to which distributions, rollovers, and transfers are taken
into account, will be made in accordance with Code section 416
and the regulations thereunder. QVEC Contributions will not be
taken into account for purposes of computing the Top-Heavy Ratio.
When aggregating plans, the value of account balances and accrued
benefits will be calculated with reference to the Determination
Dates that fall within the same calendar year. The accrued
benefit of a Participant other than a Key Employee shall be
determined under (a) the method, if any, that uniformly applies
for accrual purposes under all defined benefit plans maintained
by the Employer, or (b) if there is no such method, as if such
benefit accrued not more rapidly than the slowest accrual rate
permitted under the fractional rule of Code section 411(b)(1)(C).
(j) VALUATION DATE. The term Valuation Date means the date specified in
the TopHeavy Provisions section of the Adoption Agreement as of which
account balances or accrued benefit are valued for purposes of
calculating the Top-Heavy Ratio.
7A.2 MINIMUM ALLOCATION. For any Plan Year in which the Plan is Top-Heavy, the
following will apply:
Article VII - Special Circumstances 102 October 27, 1995
<PAGE>
(a) Except as otherwise provided in (c) and (d) below, the Employer
contributions and Forfeitures allocated on behalf of any Participant
who is not a Key Employee shall not be less than the lesser of three
percent of such Participant's Compensation or in the case where the
Employer has no defined benefit plan which designates this Plan to
satisfy Code section 401, the largest percentage of Employer
contributions and Forfeitures, as limited by Code section 401(a)(17),
allocated on behalf of any Key Employee for that year. The Minimum
Allocation is determined without regard to any Social Security
contribution. This Minimum Allocation shall be made even though, under
other Plan provisions, the Participant would not otherwise be entitled
to receive an allocation, or would have received a lesser allocation
for the year because of (1) the Participant's failure to complete
1,000 Hours of Service (or any equivalent provided in the Plan), or
(2) the Participant's failure to make Required Employee Contributions
to the Plan, or (3) Compensation less than a stated amount.
(b) For purposes of computing the Minimum Allocation, Compensation shall
mean Compensation as defined in the Compensation section of the
Adoption Agreement as limited by Code section 401 (a) (17).
Notwithstanding the above, if elected by the Employer in the Adoption
Agreement, Compensation shall include any amount which is contributed
by the Employer pursuant to a salary reduction agreement and which is
not includable in the Employee's gross income under Code sections 125,
401(a)(8), 402(h) or 403(b).
(c) The provision in (a) above shall not apply to any Participant who was
not employed by the Employer on the last day of the Plan Year.
(d) The provision in (a) above shall not apply to any Participant to the
extent the Participant is covered under any other plan or plans of the
Employer and the Employer has provided in the Top-Heavy Provisions
section of the Adoption Agreement that the Minimum Allocation or
benefit requirement applicable to TopHeavy plans will be met in the
other plan or plans.
(e) The Minimum Allocation required (to the extent required to be
nonforfeitable under Code section 416(b)) may not be forfeited under
Code sections 411(a)(3)(B) or 411(a)(3)(D).
(f) Neither Elective Deferral Contributions nor Matching Contributions may
be taken into account for the purpose of satisfying this Minimum
Allocation Requirement.
7A.3 MINIMUM VESTING SCHEDULE. For any Plan Year in which this Plan is
Top-Heavy, one of the minimum vesting schedules as elected by the Employer
in the Adoption Agreement will automatically apply to the Plan. The minimum
vesting schedule applies to all benefits within the meaning of Code section
411(a)(7) except those attributable to Employee Contributions, Elective
Deferral Contributions,. QVEC Contributions and Rollover Contributions
including benefits accrued before the effective date of Code section 416
and benefits accrued before the Plan became Top-Heavy. Further, no decrease
in a Participant's nonforfeitable percentage may occur in the event the
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<PAGE>
Plan's status as Top-Heavy changes for any Plan Year. However, this Section
does not apply to the account balances of any Employee who does not have an
Hour of Service after the Plan has initially become TopHeavy. Such
Employee's account balance attributable to Employer contributions and
Forfeitures will be determined without regard to this Section.
7B. AMENDMENT, TERMINATION OR MERGER OF THE PLAN
7B.1 AMENDMENT OF ELECTIONS UNDER ADOPTION AGREEMENT BY EMPLOYER. The party
elected by the Employer in the Adoption Agreement shall have the right from
time to time to change the elections under its Adoption Agreement in a
manner consistent with the Plan, provided that such amendment or
modification shall be in accordance with the Board of Director's
resolution, if applicable, that describes the amendment procedure and
provided further that the written amendment or modification is signed by
the party elected by the Employer in the Adoption Agreement. The amendment
must be accepted by the Sponsoring Organization. Upon any such change in
the Elections under the Adoption Agreement, the Plan Administrator, the
Trustee and the Sponsoring Organization shall be furnished a copy thereof.
If the Plan's vesting schedule is amended, or the Plan is amended in any
way that directly or indirectly affects the computation of the
Participant's nonforfeitable percentage or if the Plan is deemed amended by
an automatic change to a top-heavy vesting schedule, each Participant with
at least 3 years of Service with the Employer may elect, in writing, within
a reasonable period after the adoption of the amendment or change, to have
the nonforfeitable percentage computed under the Plan without regard to
such amendment or change. for Participants who do not have at least 1 Hour
of Service in any Plan Year beginning after December 31, 1988, the
preceding sentence shall be applied by substituting "5 years of Service"
for "3 years of Service" where such language appears.
The period during which the election must be made by the Participant shall
begin no later than the date the Plan amendment is adopted and end no later
than after the latest of the following dates:
(a) The date which is 60 days after the day the amendment is adopted;
(b) The date which is 60 days after the day the amendment becomes
effective; or
(c) The date which is 60 days after the day the Participant is issued
written notice of the amendment by the Employer or Plan Administrator.
Such written election by a Participant shall be made to the Plan
Administrator, who shall then give written notice to the Insurance Company.
No amendment to the Plan shall be effective to the extent that it has the
effect of decreasing a Participant's Accrued Benefit. Notwithstanding the
preceding sentence, a Participant's Account balance may be reduced to the
extent permitted under Code section 412(c)(8). For purposes of this
paragraph, a Plan amendment which has the effect of decreasing a
Participant's Account balance or eliminating an optional form of benefit,
with respect to benefits attributable to service before the amendment,
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<PAGE>
shall be treated as reducing an Accrued Benefit. Furthermore, if the
vesting schedule of a Plan is amended, in the case of an Employee who is a
Participant as of the later of the date such amendment is adopted or the
date it. becomes effective, the nonforfeitable percentage (determined as of
such date) of such Employee's Employer-derived Accrued Benefit will not be
less than the percentage computed under the Plan without regard to such
amendment.
In the event of an amendment to a money purchase pension plan (including a
target benefit plan) to convert it to a profit sharing plan (including a
thrift plan or plan with a 401(k) feature), the resulting plan shall
separately account in each affected Participant's Account for amounts
attributable to coverage under the money purchase plan, including future
earnings on such amounts. On and after the date of such amendment, these
money purchase plan amounts shall remain subject to the money purchase plan
restrictions on distribution.
The Employer may (1) change the choice of options in the Adoption
Agreement, (2) add overriding language in the Adoption Agreement when such
language is necessary to satisfy Code sections 415 or 416 because of the
required aggregation of multiple plans, and (3) add certain model
amendments published by the Internal Revenue Service which specifically
provide that their adoption will not cause the Plan to be treated as
individually designed. An Employer that amends the Plan for any other
reason, including a waiver of the minimum funding requirements under Code
section 412(d), will no longer participate in this prototype plan and will
be considered to have an individually designed plan.
7B.2 AMENDMENT OF PLAN, TRUST, AND FORM OF ADOPTION AGREEMENT. The Sponsoring
Organization may amend this Plan and Trust, and the form of the Adoption
Agreement, and the Employer in adopting this Plan and the Plan
Administrator and the Trustee in accepting appointment as Plan
Administration and as Trustee, shall be deemed to have consented to any
such amendment by executing the Adoption Agreement, provided that the
written consent of the Trustee and the Plan Administrator to any change
affecting their duties or responsibilities shall first be obtained. Upon
any such amendment by the Sponsoring Organization, the Plan Administrator,
the Employer and the Trustee shall be furnished with a copy thereof.
7B.3 CONDITIONS OF AMENDMENT. Neither the Sponsoring Organization nor the
Employer shall make any amendment which would cause the Plan to lose its
status as a qualified plan within the meaning of Code section 401(a).
7B.4 TERMINATION OF THE PLAN. The Employer intends to continue the Plan
indefinitely for the benefit of its Employees, but reserves the right to
terminate the Plan at any time by resolution of its Board of Directors.
Upon such termination, the liability of the Employer to make Employer
contributions hereunder shall terminate. The Plan shall terminate
automatically upon ,complete discontinuance of Employer contributions
hereunder, if the Plan is a profit sharing plan or a thrift plan.
7B.5 FULL VESTING. Upon the termination or partial termination of the Plan, or
upon complete discontinuance of Employer contributions, the rights of all
affected Participants in and to the amounts credited to each such
Article VII - Special Circumstances 105 October 27, 1995
<PAGE>
Participant's Account and to any Policies on each Participant's life shall
be 100% vested and nonforfeitable. Thereupon, each Participant shall
receive a total distribution of his Participant's Account (including any
amounts in the Forfeiture Account allocated in accordance with Section
7B.6) in accordance with the terms and conditions of Section 2A. If the
Plan terminates, the assets will be distributed from the Trust as soon as
administratively feasible.
7B.6 APPLICATION OF FORFEITURES. Upon the termination of the Plan, any amount in
the Forfeiture account which has not been applied as of such termination to
reduce the Employer contribution, or has not been allocated as of such
termination, shall be credited on a pro-rata basis to each Participant's
Account in the same manner as the last Employer contribution made under the
Plan.
7B.7 MERGER WITH OTHER PLAN. In the case of any merger with or transfer of
assets or liabilities to any other qualified plan after September 2, 1974:
(a) The sum of the account balances in each plan shall equal the fair
market value (determined as of the date of the merger or transfer as
if the plan had then terminated) of the entire plan assets.
(b) The assets or liabilities of each plan shall be combined to form the
assets of the plan as merged (or transferred), and each Participant in
the plan merged (or transferred) shall have an account balance equal
to the sum of the account balances the Participant had in the plans
immediately prior to the merger (or transfer).
(c) Immediately after the merger (or transfer), each Participant in the
plan merged (or transferred) shall have an account balance equal to
the sum of the account balances the Participant had in the plans
immediately prior to the merger (or transfer).
(d) Immediately after the merger (or transfer), each Participant in the
plan merged (or transferred) shall be entitled to the same optional
benefit forms as they were entitled to immediately prior to the merger
(or transfer).
(e) In the event of a merger (or transfer) of a money purchase pension
plan (including a target benefit plan) and a profit sharing plan
(including a thrift plan or plan with a 401(k) feature), the resulting
plan shall separately account in each affected Participant's Account
for amounts attributable to coverage under the money purchase plan,
including future earnings on such amounts. On and after the date of
such merger (or transfer), these money purchase plan amounts shall
remain subject to the money purchase plan restrictions on
distribution.
7B.8 TRANSFER FROM OTHER PLANS. If elected in the Adoption Agreement, the
Employer may cause all or any of the assets held in another qualified
pension or profit sharing plan meeting the requirements of Code section
401(a) to be transferred to the Plan pursuant to a merger or consolidation
of this Plan with such other plan or for any other allowable purpose. Upon
receipt of such assets, the Plan shall separately account for such amounts
in each affected Participant's Account. Such transfer shall be made
without regard to the Limitations on Allocations imposed in Section 4B.
Article VII - Special Circumstances 106 October 27, 1995
<PAGE>
7B.9 TRANSFER TO OTHER PLANS. Upon written direction from the Employer, the Plan
shall transfer some or all of the assets held under this Plan to another
qualified pension or profit sharing plan meeting the requirements of Code
section 401(a) and sponsored by the Employer.
7B.10APPROVAL BY THE INTERNAL REVENUE SERVICE. Notwithstanding any other
provisions of this Plan, the Employer's adoption of this Plan is subject to
the condition precedent that the Employer's Plan shall be approved and
qualified by the Internal Revenue Service as meeting the requirements of
Code section 401(a) and, if applicable, that the Trust established
hereunder shall be entitled to exemption under the provisions of Code
section 501(a). In the event the Plan initially fails to qualify and the
Internal Revenue Service issues a final ruling that the Employer's Plan or
Trust fails to so qualify as of the Effective Date, all liability of the
Employer to make further Employer contributions hereunder shall cease. The
Insurance Company, Plan Administrator, Trustee and any other Named
Fiduciary shall be notified immediately by the Employer, in writing, of
such failure to qualify. Upon such notification, the value of the
Participants' Accounts, including the then value of any Life Insurance
Policies, shall be distributed in cash subject to the terms and conditions
of Section 5B. That portion of such distribution which is attributable to
Participant's Employee Contributions, if any, shall be paid to the
Participant, and the balance of such distribution shall be paid to the
Employer. Upon the death of any Participant prior to the actual surrender
of a Life Insurance Policy or Policies on his life, the death benefit shall
be payable to the Participant's Beneficiary.
If the Employer's Plan fails to attain or retain qualification, such Plan
will no longer participate in this prototype plan and will be considered an
individually designed plan.
7B.11SUBSEQUENT UNFAVORABLE DETERMINATION. If the Employer is notified
subsequent to initial favorable qualification that the Plan is no longer
qualified within the meaning of Code section 401(a) or, if applicable, that
the Trust is no longer entitled to exemption under the provisions of Code
section 501(a), and if the Employer shall fail within a reasonable time to
make any necessary changes in order that the Plan shall so qualify, the
Participants' Accounts, including any Life Insurance Policies or the values
thereof, shall be fully vested and nonforfeitable and shall be disposed of
in the manner set forth in Sections 7B.5 and 7B.6 above.
7C. SUBSTITUTION OF PLANS
7C.1 SUBSTITUTION OF PLANS. Subject to the provisions of Section 7B.7, the
Employer may substitute an individually designed plan or a master or
another prototype plan for this Plan without terminating this Plan as
embodied herein, and this shall be deemed to constitute an amendment and
restatement in its entirety of this Plan as heretofore adopted by the
Employer; provided, however that the Employer shall have certified to the
Insurance Company and the Trustee, if applicable, that this Plan is being
Article VII - Special Circumstances 107 October 29, 1996
<PAGE>
continued on a restated basis which meets the requirements of Code section
401 (a) and ERISA.
Any such changes shall be subject to the provisions of Sections 7B.1 and
7B.2 of the Plan.
7C.2 TRANSFER OF ASSETS. Upon 90 days' written notification from the Employer
and the Trustee (unless the Insurance Company shall accept a shorter period
of notification) that a different plan meeting the requirements set forth
in Section 7C.1 above has been executed and entered into by the Plan
Administrator and the Employer, and after the Insurance Company and the
Trustee have been furnished the Employer's certification in writing that
the Employer intends to continue the Plan as a qualified plan under Code
section 401(a) and ERISA, the Insurance Company shall transfer the value of
all Participants' Accounts under the Annuity Contract to the Trustee or
such person or persons as may be entitled to receive the same, in
accordance with the terms of the Annuity Contract. The Trustee shall
likewise make a similar transfer, including all Life Insurance Policies, or
the values thereof, to such person or persons as may be entitled to receive
same. The Insurance Company and the Trustee may rely fully on the
representations or directions of the Employer with respect to any such
transfer and shall be fully protected and discharged with respect to any
such transfer made in accordance with such representations, instructions,
or directions.
7C.3 SUBSTITUTION FOR PRE-EXISTING MASTER OR PROTOTYPE PLAN. This Plan is
designed:
(a) For adoption by an Employer not previously covered under a master or
prototype plan sponsored by Connecticut General Life Insurance
Company; or
(b) For adoption by an Employer in substitution for a pre-existing master
or prototype plan sponsored by Connecticut General Life Insurance
Company.
If this Plan is adopted in substitution for such a pre-existing master or
prototype plan, it shall be deemed to amend the Employer's prior Plan in
its entirety effective as of the date specified in the Employer's Adoption
Agreement. The Employer's Plan as so amended shall continue in full force
and effect and no termination thereof shall be deemed to have occurred.
7C.4 PARTIAL SUBSTITUTION OR PARTIAL TRANSFER OF THE PLAN OR ASSETS. In the
event this Plan is adopted as the result of a partial substitution or
partial transfer of the Plan or the assets under the prior Plan as a result
of a merger, spinoff, consolidation or any other allowable purpose, the
Plan and all transactions allowable under it are subject to the rules
established by the Employer to address the orderly transition of the Plan
or assets.
Article VII - Special Circumstances 108 October 27, 1995
<PAGE>
ARTICLE VIII - MISCELLANEOUS
8.1 NONREVERSION. This Plan has been adopted by the Employer for the exclusive
benefit of the Participants and their Beneficiaries. Except as otherwise
provided in Section 7B.10 and Section 8.6, under no circumstances shall any
funds contributed hereunder at any time revert to or be used by the
Employer, nor shall any such funds or assets of any kind be used other than
for the benefit of the Participants or their Beneficiaries.
8.2 GENDER AND NUMBER. When necessary to the meaning hereof, and except when
otherwise indicated by the context, either the masculine or the neuter
pronoun shall be deemed to include the masculine, the feminine, and the
neuter, and the singular shall be deemed to include the plural.
8.3 REFERENCE TO THE INTERNAL REVENUE CODE AND ERISA. Any reference herein to
any section of the Internal Revenue, Code, ERISA, or to any other statute
or law shall be deemed to include any successor law of similar import.
8.4 GOVERNING LAW. The Plan and Trust, if applicable, shall be governed and
construed in accordance with the laws of the state where the Employer or
Trustee has its principal office in the United States.
8.5 COMPLIANCE WITH THE INTERNAL REVENUE CODE AND ERISA. This Plan is intended
to comply with all requirements for qualification under the Internal
Revenue Code and ERISA, and if any provision hereof is subject to more than
one interpretation or any term used herein is subject to more than one
construction, such ambiguity shall be resolved in favor of that
interpretation or construction which is consistent with the Plan being so
qualified. If any provision of the Plan is held invalid or unenforceable,
such invalidity or unenforceability shall not affect any other provisions,
and this Plan shall be construed and enforced as if such provision had not
been included.
8.6 CONTRIBUTION RECAPTURE. Notwithstanding any other provisions of this Plan,
(1) in the case of a contribution which is made by an Employer by a mistake
of fact, Section 8.1 shall not prohibit the return of such contribution to
the Employer within one year after the payment of the contribution, and (2)
if a contribution is conditioned upon the deductibility of the contribution
under Code section 404, then, to the extent the deduction is disallowed,
Section 8.1 shall not prohibit the return to the Employer of such
contribution (to the extent disallowed) within one year after the
disallowance of the deduction. The amount which may be returned to the
Employer is the excess of (1) the amount contributed over (2) the amount
that would have been contributed had there not occurred a mistake of fact
or a mistake in determining the deduction. Earnings attributable to the
excess contribution may not be returned to the Employer, but losses
attributable thereto must reduce the amount to be so returned. Furthermore,
if the withdrawal of the amount attributable to the mistaken contribution
would cause the balance of any Participant's Account to be reduced to less
than the balance which would have been in the Participant's Account had the
mistaken amount not been contributed, then the amount to be returned to the
Employer would have to be limited so as to avoid such reduction.
Article VIII - Miscellaneous 109 October 29, 1996
<PAGE>
In the event that the Commissioner of the Internal Revenue determines that the
Plan is not initially qualified under the Internal Revenue Code, any
contribution made incident to that initial qualification by the Employer must be
returned to the Employer within one year after the date the initial
qualification is denied, but only if the application for the qualification is
made by the time prescribed by law for filing the Employer's return for the
taxable year in which the Plan is adopted, or such later date as the Secretary
of the Treasury may prescribe.
Notwithstanding the above, any excess or returned contribution shall not be
returned to the Employer if the Employer has taken Davis-Bacon Act credit for
such contribution. These excess or mistaken contributions shall be paid to the
Employee for whom such credit is taken.
Article VIII - Miscellaneous 110 October 27, 1995
EXHIBIT 4.8
Non-Standardized Profit Sharing/Thrift Plan With 401(k) Feature
Adoption Agreement Number 001-03
This Adoption Agreement, when executed by the Employer and accepted by the Plan
Administrator, and the Trustee, if applicable, and accepted by Connecticut
General Life Insurance Company, establishes the Employer's Plan and Trust, if
applicable, for the benefit of its eligible Employees and their Beneficiaries.
The terms of the Connecticut General Life Insurance company Defined Contribution
Plan are expressly incorporated therein and shall form a part hereof as fully as
if set forth herein except that if more than one election is provided, only the
election made by the Employer shall be so incorporated. The terms of the Plan so
incorporated together with the terms of this Adoption Agreement shall constitute
the sole terms of the Employer's Plan and Trust, if applicable, and no further
trust instrument or other instrument of any nature whatsoever shall be required.
The Employer's participation under the Plan shall be subject to all the terms
set forth therein and in this Adoption Agreement.
* Note: Section 414(d) governmental plans and section 414(e) nonelecting church
plans that do not wish to provide ERISA-required benefits should not adopt this
document.
Plan Document GENERAL INFORMATION
Section
Legal Name of Employer: VTEL Corporation
----------------------------------
- --------------------------------------------------------------------------------
Address: 108 Wild Basin Road
---------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
City: Austin State: TX Zip: 78746
--------------- ------- ----------
- --------------------------------------------------------------------------------
Plan Name: VTEL Corporation 401(k) Plan
------------------------------------------------
- --------------------------------------------------------------------------------
Plan Number: 001
--------------------
*To be assigned by the Employer. For example: 001, 002,
and so on.
- --------------------------------------------------------------------------------
Employer's EIN: 7402415696
-------------------------------------------
- --------------------------------------------------------------------------------
Classification of Business:
|X| C Corporation |_| S Corporation |_| Partnership
|_| Sole Proprietorship |_| Tax-Exempt/Nonprofit
Organization
|_| Other:
--------------------------------------
- --------------------------------------------------------------------------------
September 24, 1997
<PAGE>
Plan Document GENERAL INFORMATION
Section
Employer Tax Status:
Tax Year Ends (MM/DD): 12/31
Tax Basis: |X| Cash |_| Accrual
- --------------------------------------------------------------------------------
1.20 Effective Date
The adoption of the CONNECTICUT GENERAL LIFE INSURANCE
COMPANY Non-Standardized Profit Sharing/Thrift Plan with
401(k) Feature shall:
|_| A. Establish a new Plan effective as of (MM/DD/YY):
|X| B. Constitute an amendment and restatement in its
entirety of a previously established Qualified
Plan of the Employer which was effective 1 / 1 /
90 (hereinafter called the "Effective Date"). The
effective date of this amendment and restatement
is 12 / 31 / 97.
- --------------------------------------------------------------------------------
Merger Data
This Plan includes funds from a prior or coincidental
merger of a:
|_| A. Money Purchase Plan
|_| B. Target Benefit Plan
|X| C. Not Applicable
- --------------------------------------------------------------------------------
Sponsoring Organization:
Connecticut General Life Insurance Company
P.O. Box 2975
Hartford, CT 06104
(860) 725-2274
- --------------------------------------------------------------------------------
September 24, 1997
- 2 -
<PAGE>
Table of Contents
Article Page
I. NONTRUSTEED, TRUST AND TRUSTEE................................. 4
II. PLAN ADMINISTRATOR............................................. 4
III. PLAN YEAR...................................................... 5
IV. COMPENSATION................................................... 6
V. HIGHLY COMPENSATED EMPLOYEE.................................... 7
VI. SERVICE........................................................ 8
VII. ELIGIBILITY REQUIREMENTS....................................... 10
VIII. ENTRY DATE..................................................... 13
IX. VESTING........................................................ 15
X. CONTRIBUTIONS.................................................. 18
XI. CONTRIBUTION PERIOD............................................ 28
XII. ALLOCATION OF CONTRIBUTIONS.................................... 29
XIII. LIMITATIONS ON ALLOCATION...................................... 31
XIV. INVESTMENT OF PARTICIPANT'S ACCOUNTS........................... 32
XV. LIFE INSURANCE................................................. 32
XVI. EMPLOYER STOCK................................................. 33
XVII. WITHDRAWALS PRECEDING TERMINATION.............................. 34
XVIII. LOANS TO PARTICIPANTS, BENEFICIARIES AND PARTIES-IN-INTEREST... 38
XIX. RETIREMENT AND DISABILITY...................................... 39
XX. DISTRIBUTION OF BENEFITS....................................... 40
XXI. QUALIFIED PRERETIREMENT SURVIVOR ANNUITY....................... 41
XXII. AMENDMENT TO THE PLAN.......................................... 41
XXIII. TOP-HEAVY PROVISIONS........................................... 42
XXIV. OTHER ADOPTING EMPLOYER........................................ 44
September 24, 1997
- 3 -
<PAGE>
Plan Document I. NONTRUSTEED, TRUST AND TRUSTEE.
Section
* The Plan must have a Trustee if the Employer has elected Employer Stock,
Loans, investment in Life Insurance, and/or any investment other than through a
contract with Connecticut General Life Insurance Company.
* If the plan is trusteed, the Employer must apply for a Trust Tax
Identification Number, unless the Trust already has obtained one, even if CG
Trust Company has been appointed as the Plan's Trustee.
- --------------------------------------------------------------------------------
The Plan is:
1.39 |_| A. Nontrusteed.
- --------------------------------------------------------------------------------
1.73, 1.74 |_| B. Trusteed and Trustees are:
Trustee(s)
Name(s):
----------------------------------------
Address:
----------------------------------------
--------------------------------------------------
City: St: Zip:
--------------- --------- ----------
Trust EIN:
----------------------------------------
- --------------------------------------------------------------------------------
1.73, 1.74 |X| C. Trustee and CG Trust Company has been appointed
as the Plan's Trustee.
Trust
Name: CG Trust Company
Address: 525 West Monroe St., Suite 1800
Chicago, IL 60661-3629
Employer's Trust EIN: 362-755954
----------------
Plan Document II. PLAN ADMINISTRATOR
Section
1.50 The Plan Administrator is:
Name: Sheila Meyer
--------------------------------------------------
Address: VTEL Corporation
--------------------------------------------------
108 Wild Basin Road
-----------------------------------------------------------
-----------------------------------------------------------
City: Austin State: TX Zip: 78746
------------------- ----------- ---------
- --------------------------------------------------------------------------------
September 24, 1997
- 4 -
<PAGE>
Plan Document III. PLAN YEAR
Section
1.51 A. The Plan Year will mean:
|_| 1. The 12-consecutive-month period commencing
on (MM/DD/YY) / / and each anniversary
-- -- --
thereof except that the first plan year will
commence on (MM/DD/YY) / / .
-- -- --
*This election may be made only for new
plans.
|X| 2. The 12-consecutive-month period commencing
on (MM/DD/YY) 1/ 1/98 and each anniversary
-- -- -- thereof.
- --------------------------------------------------------------------------------
September 24, 1997
- 5 -
<PAGE>
Plan Document IV. COMPENSATION
Section
* (i) Election of options 1-6 below does not require a separate nondiscrimi-
nation test.
* (ii) If option 1, 2, or 3 is elected, you must elect the same definition of
Compensation in Section XIII, Limitations on Allocations.
* (iii) Options 1-6 include lump sum amounts and/or cash bonuses. These
amounts are included in compensation in the year in which paid.
* (iv) This compensation definition is for purposes of allocating g contribu-
tions under the Plan. For nondiscrimination testing, the Employer may
use any definition of compensation that is based upon Code section
414(s) or 415(c)(3). Use of options 7, 8, or 9 for nondiscrimination
testing requires that the employer satisfy a separate compensation
nondiscrimination test.
- --------------------------------------------------------------------------------
A. Indicate the number of the Compensation definition
that will be used for allocating each type of
contribution.
Elective Deferral Contributions: 4
---------
Matching Contributions: 4
---------
Nonelective Contributions: 4
---------
Employee Contributions: 4
---------
1.12 For purposes of allocating contributions, Compensa-
tion means:
1.12(a) 1. Wages, Tips and Other Compensation Box on Form
W-2.
1.12(b) 2. Section 3401(a) wages.
1.12(c) 3. 415 safe-harbor compensation.
1.12(d) 4. Modified Wages, Tips, and Other Compensation Box
on Form W-2.
1.12(e) 5. Modified section 3401(a) wages.
1.12(f) 6. Modified 415 safe-harbor compensation.
1.12(g) 7. Regular or base salary or wages.
1.12(h) 8. Regular or base salary or wages plus |_| over-
time and/or |_| bonuses.
1.12(i) 9. A "reasonable alternative definition of Compen-
sation," as that term is used under Code section
414(s)(3) and the regulations thereunder.
The definition of Compensation is:
--------------
------------------------------------------------
------------------------------------------------
* Lump sum amounts and/or cash bonuses may be
excluded only if specified in this definition.
Also see note (v) above.
- --------------------------------------------------------------------------------
September 24, 1997
- 6 -
<PAGE>
Plan Document IV. COMPENSATION
Section
1.12 B. Compensation shall be determined over the following
determination period:
|X| 1. The Plan Year.
|_| 2. A 12-consecutive-month period beginning
on (MM/DD) / and ending with or within the
-- --
Plan Year. For Employees whose date of hire
is less than 12 months before the end of the
designated 12-month period, Compensation
will be determined over the Plan Year.
|_| 3. The Plan Year. However, for the Plan Year
in which an Employee's participation begins,
the application period is the portion of the
Plan Year during which the Employee is
eligible to participate in the Plan.
- --------------------------------------------------------------------------------
1.12 C. Compensation shall/shall not include Employer con-
tributions made pursuant to a salary reduction
agreement, which are not includable in the gross
income of the Employee under Code section 125, 402
(e)(3), 402(h)(1)(B) or 403(b).
|_| Shall |X| Shall Not
- --------------------------------------------------------------------------------
1.12 C. The highest annual Compensation to be used in deter-
mining allocations to a Participant's Account shall
be:
$ 160,000
-------------
* Enter an amount if less than the $150,000 (as indexed)
limitation on compensation.
- --------------------------------------------------------------------------------
Plan Document V. HIGHLY COMPENSATED EMPLOYEE
Section
1.29 A. Highly Compensation Employees shall be determined
using:
1.29(a) |X| 1. The Traditional Method.
1.29(b) |_| 2. The Simplified Method for Employers in more
than one geographical area.
1.29(c) |_| 3. The alternative Simplified Method.
1.29(d) |_| 4. The alternative Simplified Method with
Snapshot Day basis.
The Snapshot Day is (fill in).
-------------
- --------------------------------------------------------------------------------
September 24, 1997
- 7 -
<PAGE>
Plan Document V. HIGHLY COMPENSATED EMPLOYEE
Section
1.29(a) B. If A.1. or A.2. is chosen above, the Look-Back Year
shall be:
|X| 1. The 12-month period immediately preceding
the Determination Year.
|_| 2. The calendar year ending with or within the
Determination Year.
* If B.2. is selected and the Determination Year
(Plan Year) is the calendar year, then the LookBack
Year is the same 12-month period as the
Determination Year. This avoids having to look back
at data from a prior year.
However, if the Determination Year is not the
calendar year, the Determination Year calculation
must be made on the basis of a lag period (the
period running from the end of the Look-Back Year to
the end of the Determination Year), with the
applicable dollar amounts adjusted on a pro rata
basis for the number of months in the lag period.
- --------------------------------------------------------------------------------
Plan Document VI. SERVICE
Section
* Check off appropriate basis for determining service.
- --------------------------------------------------------------------------------
2A.3, 2A.9 A. Hours of Service or Elapsed Time
1. Years of Service shall be determined on the
following basis:
a. Eligibility: |_| Hours of
Service
|_| Elapsed
Time
b. Vesting: |X| Hours of
Service
|_| Elapsed
Time
c. Allocation of Contributions: |X| Hours of
Service
|_| Elapsed
Time
2. If service is based on Hours of Service, Hours
shall be determined on the basis of:
|X| a. Actual hours for which paid or entitled
to payment.
|_| b. Days Worked (10 Hours of Service).
|_| c. Weeks Worked (45 Hours of Service).
|_| d. Semimonthly payroll periods (95 Hours
or Service).
|_| e. Months Worked (190 Hours of Service).
* For options b, c, d, and e: If the Employee would
be credited with 1 Hour of Service during the
period, the Employee shall be credited with the
number of Hours of Service indicated in parentheses.
- --------------------------------------------------------------------------------
September 24, 1997
- 8 -
<PAGE>
Plan Document VI. SERVICE
Section
1.24 B. Service with other employers.
1. Service with members of the Employer's
controlled group of corporations, affiliated
service group, or group of business under common
control ("controlled group").
* Service for an employer while the employer is part
of the controlled group must be taken into account.
a. Service with a member of the controlled
group prior to it becoming part of the
controlled group will be included for all
purposes.
|_| Yes |_| No
- --------------------------------------------------------------------------------
2A.5 2. Service with a predecessor organization.
* Service with a predecessor organization of the
Employer must be taken into account if the Employer
maintains the Plan of the predecessor organization.
a. Service with a predecessor organization will
be included for all purposes even if the
Employer does not maintain the plan of the
predecessor organization.
|X| Yes |_| No
- --------------------------------------------------------------------------------
2A.6 3. Service with the following subsidiary(ies) or
affiliated organization, not related to the
Employer under the rules of Code sections
414(b), (c) or (m), shall be considered Service
for all purposes of this plan:
------------------------------------------------
------------------------------------------------
------------------------------------------------
* Service credited under 1.a, 2.a and 3 must apply
to all similarly situated Employees, must be
credited for a legitimate business reason, and must
not be design or operation discriminate
significantly in favor of Highly Compensated
Employees.
- --------------------------------------------------------------------------------
September 24, 1997
- 9 -
<PAGE>
Plan Document VII. ELIGIBILITY REQUIREMENTS
Section
* Check or fill out appropriate requirements for each type of contribution in
the Plan.
- --------------------------------------------------------------------------------
2A.5(a), 2B.1 A. Eligibility Requirements
1. If Employer is a Partnership or Sole Proprietor-
ship: Self-Employed Individuals are eligible to
participate in the Plan.
|_| Yes |X| No
2. Immediate Participation.
* No age or service requirement.
|_| Elective Deferral Contributions
|_| Matching Contributions
|_| Nonelective Contributions
|_| Employee Contributions
3. Service Requirement.
* Not to exceed 1 year if graded vesting; not to
exceed 2 years if 100% immediate vesting. Not to
exceed 1/2 year if graded vesting or 1 1/2 years
if 100% immediate vesting if annual Entry Date
is chosen in Section VIII "Entry Date." Not to
exceed 1 year for Elective Deferral
Contributions.
|X| Elective Deferral Contributions: 0
----
(indicate number of years)
|X| Matching Contributions: 1
------
(indicate number of years)
|X| Nonelective Contributions: 1
---
(indicate number of years)
|_| Employee Contributions:
----
(indicate number of years)
4. Age Requirement.
* Not greater than 21 years. If annual entry
date is chosen in Section VIII "Entry Date," not
greater than 20 1/2 years.
|X| Elective Deferral Contributions: 21
----
(indicate number of years)
|X| Matching Contributions: 21
-----
(indicate number of years)
|X| Nonelective Contributions: 21
----
(indicate number of years)
|_| Employee Contributions:
----
(indicate number of years)
5. Employees who were employed on or before the
initial Effective Date of the Plan or the
Effective Date of the amendment and restatement
of the Plan, as indicated on page 2, shall/shall
not be immediately eligible without regard to
any Age and/or Service requirements specified in
2 or 3 above.
|_| Shall |X| Shall Not
- --------------------------------------------------------------------------------
September 24, 1997
- 10 -
<PAGE>
Plan Document VII. ELIGIBILITY REQUIREMENTS
Section
2B.1 B. Job Class Requirements
An Employee must be a member of one or more of the
following selected classifications:
1. No Job Class Requirements:
|X| Elective Deferral Contributions
|X| Matching Contributions
|X| Nonelective Contributions
|_| Employee Contributions
2. Salaried:
|_| Elective Deferral Contributions
|_| Matching Contributions
|_| Nonelective Contributions
|_| Employee Contributions
3. Hourly:
|_| Elective Deferral Contributions
|_| Matching Contributions
|_| Nonelective Contributions
|_| Employee Contributions
4. Clerical:
|_| Elective Deferral Contributions
|_| Matching Contributions
|_| Nonelective Contributions
|_| Employee Contributions
5. Employees whose employment is governed by a
collective bargaining agreement represented by
the following union:
----------------------------
|_| Elective Deferral Contributions
|_| Matching Contributions
|_| Nonelective Contributions
|_| Employee Contributions
6. Other (fill in):
------------------------------
|_| Elective Deferral Contributions
|_| Matching Contributions
|_| Nonelective Contributions
|_| Employee Contributions
* "Part-time" Employees may not be excluded.
- --------------------------------------------------------------------------------
September 24, 1997
- 11 -
<PAGE>
Plan Document VII. ELIGIBILITY REQUIREMENTS
Section
2B.1 C. Additional Requirements
An Employee must be in the following designated
division(s) of the Employer:
----------------------------------------------------
----------------------------------------------------
|_| Elective Deferral Contributions
|_| Matching Contributions
|_| Nonelective Contributions
|_| Employee Contributions
- --------------------------------------------------------------------------------
2B.1 D. An Employee must not be a member of any one of the
following groups:
1. Union.
* Employees who are members of a union are
defined as: Employees included in a unit of
Employees covered by a collective bargaining
agreement between the Employer and employee
representatives, if retirement benefits were the
subject of good faith bargaining and if two
percent or less of the employees of the Employer
who are covered pursuant to that agreement are
professional employees as defined in section
1.410(b)-9 of the regulations. For this purpose,
the term "employee representatives" does not
include any organization more than half of whose
members are Employees who are owners, officers,
or executives of the Employer, unless the
collective bargaining agreement provides for
coverage under the Plan.
|X| Elective Deferral Contributions
|X| Matching Contributions
|X| Nonelective Contributions
|_| Employee Contributions
2. Nonresident aliens (within the meaning of Code
section 7701(b)(1)(B)) who receive no earned
income (within the meaning of Code section
911(d)(2)) from the Employer that constitutes
income from sources within the United States
(within the meaning of Code section 861(a)(3)).
|X| Elective Deferral Contributions
|X| Matching Contributions
|X| Nonelective Contributions
|_| Employee Contributions
- --------------------------------------------------------------------------------
September 24, 1997
- 12 -
<PAGE>
Plan Document VII. ELIGIBILITY REQUIREMENTS
Section
3. Employees covered by the following designated
qualified employee benefit plans:
------------------------------------------------
------------------------------------------------
|_| Elective Deferral Contributions
|_| Matching Contributions
|_| Nonelective Contributions
|_| Employee Contributions
- --------------------------------------------------------------------------------
1.15 E. The Plan covers Employees whose conditions of
employment are mandated under the Davis-Bacon Act.
|_| Yes |X| No
- --------------------------------------------------------------------------------
Plan Document VIII. ENTRY DATE
Section
* Check the appropriate requirement for Entry Date.
- --------------------------------------------------------------------------------
1.25 A. Immediately.
|X| Elective Deferral Contributions
|X| Matching Contributions
|X| Nonelective Contributions
|_| Employee Contributions
- --------------------------------------------------------------------------------
1.25 B. The first day of any month.
|_| Elective Deferral Contributions
|_| Matching Contributions
|_| Nonelective Contributions
|_| Employee Contributions
- --------------------------------------------------------------------------------
1.25 C. Quarterly (that is, three months apart) on each:
(MM/DD) / , or (MM/DD) / , or
--- --- --- ---
(MM/DD) / , or (MM/DD) / .
--- --- --- ---
*o Fill in dates.
|_| Elective Deferral Contributions
|_| Matching Contributions
|_| Nonelective Contributions
|_| Employee Contributions
- --------------------------------------------------------------------------------
September 24, 1997
- 13 -
<PAGE>
Plan Document VIII. ENTRY DATE
Section
1.25 D. Semiannually (that is, six months apart) on each:
(MM/DD) / , or (MM/DD) / .
--- --- --- ---
* Fill in dates.
|_| Elective Deferral Contributions
|_| Matching Contributions
|_| Nonelective Contributions
|_| Employee Contributions
- --------------------------------------------------------------------------------
1.25 E. Annually, on each (MM/DD) / .
----- -----
* Fill in dates.
|_| Elective Deferral Contributions
|_| Matching Contributions
|_| Nonelective Contributions
|_| Employee Contributions
- --------------------------------------------------------------------------------
1.25 F. The first day nearest to the date(s) selected in B,
C, D or E above, whether before or after that date,
that the Participant meets the Eligibility Require-
ments.
|_| Elective Deferral Contributions
|_| Matching Contributions
|_| Nonelective Contributions
|_| Employee Contributions
* Allows retroactive entry into the Plan. This may have
an effect on various nondiscrimination tests for the
Plan.
- --------------------------------------------------------------------------------
September 24, 1997
- 14 -
<PAGE>
Plan Document IX. VESTING
Section
1.76 A. Vesting Percentage.
The Vesting Schedule, based on number of Years or
Periods of Service, shall be as indicated below.
Indicate the number of the vesting schedule that
applies to any Nonelective Contributions, Matching
Contributions, and Prior Employer Contributions. The
vesting schedules are depicted in 1 through 8,
below.
Nonelective Contributions are subject to vesting
schedule: 3
---
Matching Contributions are subject to vesting
schedule: 3
---
Prior Employer Contributions are subject to
vesting schedule: 2, 7
------
1. Immediately = 100%
2. 0-3 Years = 0%
3 Years = 100%
3. 1 Year = 20%
2 Years = 40%
3 Years = 60%
4 Years = 80%
5 Years = 100%
4. 0-3 Years = 0%
3 Years = 20%
4 Years = 40%
5 Years = 60%
6 Years = 80%
7 Years = 100%
5. 0-2 Years = 0%
2 Years = 20%
3 Years = 40%
4 Years = 60%
5 Years = 80%
6 Years = 100%
6. 0-5 Years = 0%
5 Years = 100%
7. 1 Year = 25%
2 Years = 50%
3 Years = 75%
4 Years = 100%
- --------------------------------------------------------------------------------
September 24, 1997
- 15 -
<PAGE>
Plan Document IX. VESTING
Section
8. Other. Must be at least as liberal as #4 or #6
above.
=
------------------- --------------------
=
------------------- --------------------
=
------------------- --------------------
=
------------------- --------------------
=
------------------- --------------------
- --------------------------------------------------------------------------------
2A.5(b) B. The vesting computation period shall be based on the
Employee's service in the:
|X| Plan Year |_| Employment year
- --------------------------------------------------------------------------------
2A.7, 2A.10 C. Excluded Years or Periods of Service.
The vesting percentage shall be based on all Years
of Service (i.e., completing 1000 Yours of Service)
or Periods of Service (i.e., Elapsed Time), EXCEPT
that the following shall be excluded:
Years or Periods of Service:
|_| 1. Prior to the time the Participant attained
age 18.
|_| 2. During which the Employer did not maintain
the plan or predecessor plan.
|_| 3. During which the Participant elected not to
contribute to a plan which required Employee
Contributions.
|_| 4. Rule of Parity (Elapsed Time).
* Rule of Parity (Elapsed Time): IN the
event a reemployed Employee has no vested
interest in Employer Contributions at the
time the break occurred, and has since
incurred 5 consecutive 1-year Breaks-in-
Service, and has a Period of Severance
which equals or exceeds his prior Period of
Service, such prior Service may be disre-
garded.
|_| 5. Rule of Parity (Hours of Service).
* Rule of Parity (Hours of Service): Years
of Service prior to a Break-in-Service may
be disregarded if the participant had no
vested interest in Employer Contributions at
the time the break occurred, and the
Participant has since incurred 5 consecutive
1-year Breaks-inService, and the number of
consecutive 1-year Breaks-in-Service is at
least as great as the Years of Service
before the break occurred.
|_| 6. Prior to any 1-Year Break-in-Service until
the Employee completes a Year of Service
following reemployment.
|X| 7. None of the above.
- --------------------------------------------------------------------------------
September 24, 1997
- 16 -
<PAGE>
Plan Document IX. VESTING
Section
3D.1, 3D.2, D. Forfeitures.
2A.7, 2A.10
1. Forfeitures will occur:
|_| a. Immediately.
|_| (1Optional Payback Method.
|_| (2Required Payback Method.
|X| b. Upon a 1-Year Break-in-Service.
|X| (1) Optional Payback Method.
|_| (2Required Payback Method.
|_| c. Upon 5 consecutive 1-Year Breaks-in-
Service.
2. Forfeitures will be:
|X| a. Used as an Employer Credit.
|_| b. Reallocated to Participants' Accounts.
|_| c. Used as an Employer Credit and then, to
the extent any Forfeitures remain, re-
allocated to Participants' Accounts.
* If choice IX.D.2.b or c is selected and the
Plan provides Matching Contributions, the
Actual Contribution Percentage (ACP) Test will
be affected.
- --------------------------------------------------------------------------------
September 24, 1997
- 17 -
<PAGE>
Plan Document X. CONTRIBUTIONS
Section
2C.1(k)(1) A. Elective Deferral Contributions
1. Availability/Amount
|_| Not Available under the Plan.
|X| Available under the Plan (complete the
following).
Each Participant MAY elect to have his
Compensation actually paid during the
Plan Year reduced by:
|_| a. %.
---
|_| b. up to %.
---
|X| c. from 1 % to 20 %
------- --------
|_| d. up to the maximum percent-
age allowable, not to
exceed the limits of Code
sections 402(g) and 415.
* Lump sum amounts and/or cash bonuses
must be subject to the salary deferral
election unless the definition of
compensation in Section IV.A.9 has been
elected and these amounts have been
specifically excluded from that
compensation definition. Lump sum
amounts and cash bonuses are deferred
upon and tested in the Plan Year in
which paid.
2. Modification
A Participant may change the amount of
Elective Deferral contrigu5ions the
Participant makes to the Plan (complete a and
b):
|_| a. per calendar year (may not be less
---- frequent than once).
|X| b. As of the following date(s) (MM/DD):
Daily
--------------------------
--------------------------
--------------------------
--------------------------
- --------------------------------------------------------------------------------
September 24, 1997
- 18 -
<PAGE>
Plan Document X. CONTRIBUTIONS
Section
2C.1(b) B. Required Employee Contributions
1. Availability/Amount
|X| Not Available under the Plan.
|_| Available under the Plan and must
be made as a condition of receiving an
Employer Contribution.
* Required Employee Contributions are NOT
AVAILABLE unless Elective Deferral
Contributions are available.
Required Contributions shall be in the amount
of:
|_| a. % of Compensation actually paid
-----
during the Contribution Period.
|_| b. Not less than % nor more than
--------
% of Compensation actually paid during
the Contribution Period.
- --------------------------------------------------------------------------------
2C.1(k)(1) 2. Modification
A Participant may suspend Required Employee
Contributions for a minimum period of:
|_| a. 1 month
|_| b. 2 months
|_| c. 3 months
* The suspension period may be of indefinite
duration. A Participant's reentry into the Plan
shall be as of the first Entry Date following the
end of the suspension period.
- --------------------------------------------------------------------------------
September 24, 1997
- 19 -
<PAGE>
Plan Document X. CONTRIBUTIONS
Section
2C.1 C. Matching Contributions
Availability/Amount
|_| Not Available Under the Plan.
|X| Available under the Plan (elect one from
option 1 and, if applicable, elect one from
option 2).
1. |X| a. Matching Contributions SHALL be based
upon a percentage of Considered Net
Profits.
|_| b. Matching Contributions SHALL NOT be
based upon a percentage of Considered
Net Profits.
2. Partnership Plans.
|_| a. The Employer SHALL make Matching Con-
tributions to Partners.
* Matching Contributions to Partners
are treated in all respects as
Elective Deferral Contributions.
|_| b. The Employer SHALL NOT make Matching
Contributions to Partners.
For each $1.00 of either Elective Deferral
Contributions or Required Employee Contributions, as
selected above, the Employer will contribute and
allocate to each Participant's Matching Contribution
Account an amount equal to:
|_| 1.$ (e.g., $.50).
-----------------
|X| 2.A discretionary percentage, to be determined
by the Employer.
* If option 2 is elected, the amount of the
discretionary percentage should be determined
by an annual Board of Directors resolution
setting the percentage.
|_| 3.Graded Match.
* If a or b is elected, the minimum and
maximum percentages must be within the
parameters of the Elective Deferral election
in Section X.A or the Required Employee
Contribution election in Section X.B of this
Adoption Agreement.
* Percentages for higher amounts must be lower
than the percentages for lower amounts. For
example: 100% of the first $500, plus 75% of
the next $500, plus 50% of the next $500.
|_| a. Graded based upon the dollar
amount of each Participant's
Elective Deferral Contribu-
tions or Required Employee
Contributions as follows:
% of the first $ plus
---- ----
% of the first $ plus
---- ----
% of the first $ plus
---- ----
% of the first $ .
---- ----
-------------------------------------------------------------------------------
September 24, 1997
- 20 -
<PAGE>
Plan Document X. CONTRIBUTIONS
Section
|_| b. Graded based upon the
percentage of Compensation of
each participant's Elective
Deferral Contribution or Required
Employee Contribution as follows:
% of the first $ plus
---------- ----------
% of the first $ plus
---------- ----------
% of the first $ plus
---------- ----------
% of the first $
----------
* If 3.a or b is elected, additional
testing will be required to prove that
the different contributions are
available on a nondiscriminatory basis.
|_| 4. Separate specific dollar amounts for
different employees (e.g., employees in
different job classifications):
* This option is available only for
Plans covering Employees whose
conditions of employment are mandated
under the Davis-Bacon Act.
$ (e.g., $.50) to employees in (fill in)
---------- ------------------
$ (e.g., $.50) to employees in (fill in)
---------- ------------------
$ (e.g., $.50) to employees in (fill in)
---------- ------------------
$ (e.g., $.50) to employees in (fill in)
---------- ------------------
$ (e.g., $.50) to employees in (fill in)
---------- ------------------
Additional Formulas (fill in below):
* Formulas must be the same type as above.
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
* If 4 is selected, additional testing will be required to prove
that the different contributions are available on a nondiscrimina-
tory basis.
- --------------------------------------------------------------------------------
September 24, 1997
- 21 -
<PAGE>
Plan Document X. CONTRIBUTIONS
Section
|_|5. Different graded matches for different
employees (e.g., employees in different job
classifications, divisions, organizations,
members of a controlled group of corporations,
etc.):
* This option is available only for Plans
covering Employees whose conditions of
employment are mandated under the Davis-Bacon
Act.
* Percentages for higher amounts must be lower
than the percentages for lower amounts. For
example: 100% of the first $500, plus 75% of
the next $500, plus 50% of the next $500.
|_| a. Graded based upon the dollar amount
of Elective Deferral Contributions or
Required Contributions of each
Participant as follows:
Employees in (fill in)
-----------------
% of the first $ plus
----- -------
% of the next $ plus
----- --------
% of the next $ plus
----- --------
% of the next $
----- --------
Employees in (fill in)
-----------------
% of the first $ plus
----- -------
% of the next $ plus
----- --------
% of the next $ plus
----- --------
% of the next $
----- --------
Employees in (fill in)
-----------------
% of the first $ plus
----- -------
% of the next $ plus
----- --------
% of the next $ plus
----- --------
% of the next $
----- --------
Additional Formulas (fill in below):
* Formulas must be the same type as
above.
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
- --------------------------------------------------------------------------------
September 24, 1997
- 22 -
<PAGE>
Plan Document X. CONTRIBUTIONS
Section
|_| b. Graded based upon the percentage of
compensation of the Elective Deferral
Contributions or Required Contributions
of each Participant as follows:
* This option is available only for
Plans covering Employees whose
conditions of employment are mandated
under the Davis-Bacon Act.
* Matching percentages for higher
compensation percentages must be lower
than matching percentages for lower
compensation percentages. For example:
100% of the first 100% of the first 3%,
plus 75% of the next 2%, plus 50% of
the next 2%.
Employees in (fill in)
-----------------
% of the first $ plus
----- -------
% of the next $ plus
----- --------
% of the next $ plus
----- --------
% of the next $
----- --------
Employees in (fill in)
-----------------
% of the first $ plus
----- -------
% of the next $ plus
----- --------
% of the next $ plus
----- --------
% of the next $
----- --------
Employees in (fill in)
-----------------
% of the first $ plus
----- -------
% of the next $ plus
----- --------
% of the next $ plus
----- --------
% of the next $
----- --------
Additional Formulas (fill in below):
* Formulas must be the same type as
above.
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
- --------------------------------------------------------------------------------
September 24, 1997
- 23 -
<PAGE>
Plan Document X. CONTRIBUTIONS
Section
The Elective Deferral or Required Employee
Contributions, upon which Matching Contributions are
made by the Employer, shall not exceed:
|_| 1. $ for the Plan Year.
--------
|_| 2. % of Participant's Compensation
---------
for the Contribution Period.
|X| 3. N/A.
True-Up Contributions:
The Employer may/may not contribute a True-Up
Contribution for each Participant at the end of the
Plan Year so that the total Matching Contribution
for each Participant is calculated on an annual
basis.
|X| May |_| May not
Additional Matching Contributions:
In addition, at the end of the Plan Year, the
Employer may contribute Additional Matching
Contributions to be allocated in the same proportion
that the Matching Contribution made on behalf of
each Participant during the Plan year bears to the
Matching Contribution made on behalf of all
Participants during the Plan Year.
|X| Yes |_| No
- --------------------------------------------------------------------------------
September 24, 1997
- 24 -
<PAGE>
Plan Document X. CONTRIBUTIONS
Section
2C.1 D. Nonelective Contributions
* If you choose to make a Nonelective Contribution ,
each Employee eligible to participate in the Plan
and who satisfies the Annual Allocation Requirement
of Section XII.A or XII.B MUST be given an
allocation, regardless of whether they make Elective
Deferral Contributions.
Availability/Amount
|_| Not Available under the Plan.
|X| Available under the Plan (complete the
following).
The Contribution for each Contribution Period shall
be:
|_| 1. % of Considered Net Profits.
|_| 2. % of Compensation of each Participant.
|_| 3.The Employer will contribute an amount equal
to $ for each Participant.
-----------
|X| 4.Discretionary.
* If option 4 is elected, the amount of the
discretionary contribution should be determined by
an annual Board of Directors resolution setting a
fixed amount of contribution or a formula by which a
fixed amount can be determined.
|_| 5.The Employer will contribute an amount equal
to $ /hour or unit of each participant
-------
(indicate dollar or cents amount).
* Option 5 may be chosen ONLY for Employees who are
subject to a Collective Bargaining Agreement.
|_| 6. % of Considered Net Profits to (fill in)
-- -----
% of Considered Net Profits to (fill in)
-- -----
% of Considered Net Profits to (fill in)
-- -----
% of Considered Net Profits to (fill in)
-- -----
% of Considered Net Profits to (fill in)
-- -----
* Fill in job classification.
- --------------------------------------------------------------------------------
September 24, 1997
- 25 -
<PAGE>
Plan Document X. CONTRIBUTIONS
Section
Additional Formulas (fill in below):
* Formulas must be the same type as above.
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
|_| 7. % of Compensation to each
---------------------
Participant in (fill in)
-----------
% of Compensation to each
---------------------
Participant in (fill in)
-----------
% of Compensation to each
---------------------
Participant in (fill in)
-----------
% of Compensation to each
---------------------
Participant in (fill in)
-----------
% of Compensation to each
---------------------
Participant in (fill in)
-----------
* Fill in job classification.
Additional Formulas (fill in below):
* Formulas must be the same type as above.
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
* Options 6 and 7 may be selected ONLY when a
Plan covers Employees whose conditions of
employment are mandated under the Davis-Bacon
Act.
* If option 6 or 7 is selected, subsection A.1
(Compensation to Compensation allocation) MUST
be chosen in Section XIII, "Allocation of
Contributions."
* If option 6 or 7 is selected, additional
testing will be required to prove that the
different contributions are available on a
nondiscriminatory basis.
Nonelective Contributions shall/shall not be based
on Considered Net Profits.
* "Shall" must be chosen if option 1 is selected.
|X| Shall |_| Shall not
- --------------------------------------------------------------------------------
September 24, 1997
- 26 -
<PAGE>
Plan Document X. CONTRIBUTIONS
Section
2.C.1(b) E. Voluntary Employee Contributions
Availability/Amount
|X| Not Available under the Plan.
|_| Available under the Plan (complete the
following).
|_| Voluntary Employee Contributions
SHALL be permitted up to % of
Compensation actually paid during
the Plan Year.
|_| Voluntary Employee Contributions
made in a Lump Sum SHALL be
permitted.
* Voluntary Employee Contributions are NOT
AVAILABLE unless Elective Deferral
Contributions are available.
- --------------------------------------------------------------------------------
2.C.3 F. Rollover Contributions
Availability
|X| 1. Rollover Contributions out of the Plan are
always available.
|X| Cash only.
|_| Cash and Loan Notes from this and/or a
prior plan.
|X| 2. Rollover Contributions into the Plan:
|_| Not Available under the Plan.
|X| Available under the Plan (complete the
following).
Cash Only or Cash and Loan Notes:
|X| Cash only.
|_| Cash and Loan Notes from prior
plan.
Rollover contributions into the Plan
may be made by:
|X| Both eligible Employees and
Employees who would be eli-
gible except they do not
yet meet the Plan's age
and/or service requirement.
|_| Eligible Employees only.
- --------------------------------------------------------------------------------
September 24, 1997
- 27 -
<PAGE>
Plan Document X. CONTRIBUTIONS
Section
7B.8, 7B.9 G. Transfers of Account Balances
Availability
|X| 1. Transfers of account balances out of the Plan
are always available.
|X| 2. Transfers of Account Balances into the Plan:
|_| Not Available under the Plan.
|X| Available under the Plan.
- --------------------------------------------------------------------------------
Plan Document XI. CONTRIBUTION PERIOD
Section
1.14 a. The regular Contribution Period (by contribution type)
shall be:
* For 1 and 2 below, "Other" Contribution Period may not be
longer than annual, but may be shorter than 4-weekly.
* For 3 below, "Other" Contribution Period may not be
longer than monthly, but may be shorter than 4- weekly.
1. Matching Contributions:
|X| Annual |_| 4-Weekly
|_| Monthly |_| Other (specify)
2. Nonelective Contributions:
|X| Annual |X| 4-Weekly
|X| Monthly |X| Other (specify)
3. Elective Deferral Contributions, Required
Employee Contributions, and/or Voluntary
Employee Contributions:
* Annual contribution period is not available for
contributions in #3.
|_| Monthly |_| 4-Weekly
|X| Other (specify) Semi-monthly
-----------------
- --------------------------------------------------------------------------------
September 24, 1997
- 28 -
<PAGE>
Plan Document XII. ALLOCATION OF CONTRIBUTIONS
Section
2C.1(f) A. Allocation Formula for Nonelective Contribution
Complete the following ONLY if Section X.D is 1, 4,
6 or 7.
* If Section X.D is 6 or 7, the Compensation to
Compensation allocation formula (1 below) must be
chosen.
The Nonelective Contribution will be allocated to
Participants who meet the requirements of Section
XII.B or C as follows:
|X| 1. Compensation to Compensation:
In the same ratio as each Participant's
Compensation bears to the total Compensation
of all Participants.
|_| 2. Integrated with Social Security:
a. Choose one of the following methods:
|_| Step-Rate Method
For each Plan Year, the Employer
will contribute an amount equal
to % of each Participant's
Compensation up to the Social
Security Integration Level, plus
% of each Participant's
Compensation in excess of the
Social Security Integration
Level. However, in no event will
the Excess Contribution
percentage exceed the amount
specified in Section
2C.1(f)(2)(B) of the Plan.
|_| Maximum Disparity Method
For each Plan Year, the
Employer's Nonelective
Contribution shall be allocated
in the manner stated in Section
2C.1(f)(3) of the Plan in order
to maximize permitted disparity.
b. Social Security Integration Level:
|_| i. $ (not to exceed the Social
----- Security Taxable Wage
Base).
|_| ii. The Social Security Taxable
Wage Base in effect on the
first day of the Plan Year.
|_| iii. % of the Social Security
------- Taxable Wage Base (not
to exceed 100%).
- --------------------------------------------------------------------------------
September 24, 1997
- 29 -
<PAGE>
Plan Document XII. ALLOCATION OF CONTRIBUTIONS
Section
2C.1(g) B. Annual Allocation Requirements
An allocation of the annual Nonelective
Contribution, annual Matching Contribution, and/or
Additional matching Contribution made by the
Employer will be made to each Participant who:
|_|1. Is a Participant on ANY day during the Plan
year regardless of Service credited during the
Plan Year.
|_|2. Is credited with a Year of Service in the
Plan Year for which the contribution is made.
|_|3. Is a participant on the last day of the Plan
Year.
|X|4. Is credited with a Year of Service in the
Plan Year for which the contribution is made
and is a Participant on the last day of the
Plan Year.
In addition, an allocation will be made by the
Employer on behalf of any Participant who retires,
dies or becomes disabled during the Plan Year,
regardless of the number of Hours of Service
credited to such Participant and regardless of
whether such Participant is a participant on the
last day of the Plan Year.
Annual Nonelective Contribution |X| Yes |_| No
Annual Matching Contribution |X| Yes |_| No
Annual Matching Contribution |X| Yes |_| No
- --------------------------------------------------------------------------------
2C.1(g) C. Nonannual Allocation Requirement
An allocation of the nonannual Matching Contribution
or nonannual Nonelective Contribution made by the
Employer will be made to each Participant who:
|_|1. Is a Participant on any day of the Contribu-
tion Period.
|_|2. Is a Participant as of the last day of the
Contribution Period.
In addition, an allocation will be made by the
Employer on behalf of any Participant who retires,
dies, or becomes disabled during the Contribution
Period, regardless of whether such Participant is a
Participant as of the last day of the Contribution
Period.
Nonannual Nonelective Contribution |_| Yes |_| No
Nonannual Matching Contribution |_| Yes |_| No
- --------------------------------------------------------------------------------
September 24, 1997
- 30 -
<PAGE>
Plan Document XIII. LIMITATIONS ON ALLOCATION
Section
4B A. If any Participant is covered by another qualified
defined contribution plan maintained by the Employer,
other than a Master or Prototype plan:
* Complete part A if you: (1) maintain, or at any time
maintained, another qualified retirement plan in which any
Participant in this Plan is, was, or could be, a
participant; or (2) maintain a Code section 415(l)(2)
individual medical account, for which amounts are treated
as Annual Additions for any Participant in this Plan.
|X| 1. N/A. The Employer has no other defined
contribution plan(s).
|_| 2. The provisions of Section 4B.5 of the Plan
will apply, as if the other plan were a
Master or Prototype plan.
|_| 3. The plans will limit total Annual Additions
to the Maximum Permissible Amount, and will
reduce any Excess Amounts in a manner that
precludes Employer discretion, in the
following manner:
--------------------------------------------
--------------------------------------------
- --------------------------------------------------------------------------------
4B B. If any Participant is or ever has been a Participant in
a qualified defined benefit plan maintained by the
Employer:
* Complete part B if you maintain, or at any time
maintained, another qualified retirement plan in which any
Participant in this Plan is, was, or could be a
participant.
|X|1. N/A. The Employer has no defined plan(s).
|_|2. In any Limitation Year, the Annual Additions
credited to the Participant under this Plan
may not cause the sum of the Defined Benefit
Plan Fraction and the Defined Contribution
Fraction to exceed 1.0. If the Employer
contributions that would otherwise be
allocated to the Participant's account during
such year would cause the 1.0 limitation to be
exceeded, the allocation will be reduced so
that the sum of the fraction equals 1.0. Any
contributions not allocated because of the
preceding sentence will be allocated to the
remaining Participants according to the Plan's
allocation formula. If the 1.0 limitation is
exceeded because of an Excess Amount, such
Excess Amount will be reduced in accordance
with Section 4B.4 of the Plan.
|_|3. Provide the method under which the Plan
involved will satisfy the 1.0 limitation in a
manner that precludes Employer discretion.
----------------------------------------------
----------------------------------------------
- --------------------------------------------------------------------------------
September 24, 1997
- 31 -
<PAGE>
Plan Document XIII. LIMITATIONS ON ALLOCATION
Section
C. Compensation will mean all of each Participant's:
* Everyone must complete Section C. If option 1, 2, or 3
was selected in Section IV.A., you must make the same
selection here.
4B.1(b)(1) |X|1. Wages, Tips, and Other Compensation Box on Form
W-2.
4B.1(b)(2) |_|2. Section 3401(a) wages.
4B.1(b)(3) |_|3. 415 safe harbor compensation.
- --------------------------------------------------------------------------------
4B.1(h) D. The Limitation Year shall be:
* Everyone must complete Section D.
|X|1. The Calendar Year.
|_|2. The 12-month period coinciding with the Plan
Year.
|_|3. The 12-month period beginning on (MM/DD): / .
-- --
- --------------------------------------------------------------------------------
Plan Document XIV. INVESTMENT OF PARTICIPANT'S ACCOUNTS
Section
5A.1 A. The Participant shall/shall not have the authority to
direct the Investment of Contributions made by the
Employer.
|X| Shall |_| Shall Not
- --------------------------------------------------------------------------------
5A.1 B. If SHALL is elected above, complete the following.
Those having authority to direct the investment of the
Participant's Account are (choose all that apply):
|X|1. Participants who are active Employees.
|X|2. Participants who are former employees and
continue to maintain an account in the Plan or
Trust.
|X|3. Beneficiaries.
|X|4. Alternate Payees.
- --------------------------------------------------------------------------------
Plan Document XV. LIFE INSURANCE
Section
5B.1 A. Available as a Participant investment:
|_| Yes |X| No
- --------------------------------------------------------------------------------
September 24, 1997
- 32 -
<PAGE>
Plan Document XV. LIFE INSURANCE
Section
B. If yes is elected above, Life Insurance shall be
available to:
|_|1. All Participants.
|_|2. Only to the specified group of Participants
(fill in below):
------------------------------------------------
------------------------------------------------
------------------------------------------------
* If subsection 2 is checked, separate nondiscrimina-
tion testing will be required.
- --------------------------------------------------------------------------------
Plan Document XVI. EMPLOYER STOCK
Section
* Before electing Employer Stock as an investment option, you should consult
your legal counsel on any federal or state securities law requirements arising
from offering Employer Stock as an investment option under your Plan and whether
use of this document is appropriate for you under those laws. Neither
Connecticut General Life Insurance Company nor any of its employees can advise
you on these matters.
- --------------------------------------------------------------------------------
1.45 A. Investment in Employer Stock is:
|X| Permitted
|_| Not Permitted.
* You must complete the following subsections B and
C if investment in Employer Stock is permitted and
Participants have the authority to direct the
investment of Employer Contributions.
- --------------------------------------------------------------------------------
1.45 B. Investment in Employer Stock within the Plan by
officers or directors of the Employer or by an
individual who owns more than 10% of the Employer's
Stock is:
|X| Permitted
|_| Not Permitted.
- --------------------------------------------------------------------------------
1.45 C. The Trustee:
|_|1. Will vote the shares of the Employer Stock.
|X|2. Will vote the shares of the Employer Stock in
accordance with any instructions received by the
Trustee from the Participant.
* Option 2 must be selected if CG Trust Company
is the Trustee.
|_|3. May request voting instructions from the Partici-
pants.
- --------------------------------------------------------------------------------
September 24, 1997
- 33 -
<PAGE>
Plan Document XVII. WITHDRAWALS PRECEDING TERMINATION
Section
* Complete only the sections for the type of contributions in your plan.
- --------------------------------------------------------------------------------
3E.1(a) A. Withdrawal of Required Employee Contributions.
* Withdrawal may be for any reason.
|X| Not Available under the Plan.
|_| Available under the Plan.
If available, Required Employee Contributions may
be withdrawn:
|_| Once each 6 months.
|_| Once each 12 months.
|_| Other (specify)
-------------------------
The Contribution suspension period following a
withdrawal of Required Employee Contributions shall
be:
* You must choose one of the suspension periods
shown. Related Employer Contributions will be
suspended for the same period.
|_| 6 Months.
|_| 12 months.
|_| 24 Month.
3E.1(b) B. Withdrawal of Voluntary Employee Contributions.
* Withdrawal may be for any reason.
|X| Not Available under the Plan.
|_| Available under the Plan.
If available, Voluntary Employee Contributions
may be withdrawn:
|_| Once each 6 months.
|_| Once each 12 months.
|_| Other (specify)
--------------------
- --------------------------------------------------------------------------------
September 24, 1997
- 34 -
<PAGE>
Plan Document XVII. WITHDRAWALS PRECEDING TERMINATION
Section
C. Withdrawal of Elective Deferral Contributions.
|_| Not Available under the Plan.
|X| Available under the Plan.
If available, select the conditions for withdrawal:
3E.2 |X| Withdrawal upon Participant's attainment
of age 59 1/2.
3E.5 |X| Withdrawal for Serious Financial Hard-
ship.
* If a Participant makes a withdrawal of Elective
Deferral Contributions due to a Serious Financial Hard-
ship, the Participant must be suspended from making any
additional Elective Deferral Contributions for a period
of 12 months.
D. Withdrawal of Employer Contributions (Matching, Non-
elective and/or Prior Employer Contributions).
|_| Not Available under the Plan.
|X| Available under the Plan.
* If Prior Employer Contributions are money purchase
plan contributions, they may not be withdrawn.
If available, select the conditions for withdrawal:
|X|1. Withdrawal upon Participant's attainment
of age 59 1/2.
Available from:
|X|a. Matching Contributions.
|X|b. Nonelective Contributions.
|X|c. Prior Employer Contributions.
- --------------------------------------------------------------------------------
September 24, 1997
- 35 -
<PAGE>
Plan Document XVII. WITHDRAWALS PRECEDING TERMINATION
Section
3E.3 |_|2. Withdrawals to active Participants who have been
Participants for a minimum of 60 consecutive
months.
Available from:
|_|a. Matching Contributions.
|_|b. Nonelective Contributions
|_|c. Prior Employer Contributions.
Frequency of withdrawal:
|_| Once each 6 months.
|_| Once each 12 months.
|_| Other (specify)
Suspension Period following withdrawal:
|X| N/A
|_| 6 months.
|_| 12 months.
|_| 24 months.
3E.4 |X|3. Withdrawals for Serious Financial Hardship.
Available from:
|X|a. Matching Contributions.
|X|b. Nonelective Contributions
|X|c. Prior Employer Contributions.
Prior Employer Contributions:
Prior Employer Contributions are contributions made to the
Plan by the Employer prior to the Plan's original conver-
sion and/or restatement on
--------------------------------
(fill in date).
-------------
- --------------------------------------------------------------------------------
September 24, 1997
- 36 -
<PAGE>
Plan Document XVII. WITHDRAWALS PRECEDING TERMINATION
Section
3E.6 E. Withdrawal of Rollover Contributions:
|_| Not Available under the Plan.
|X| Available under the Plan.
If available, Rollover Contributions may be
withdrawn:
|_| Once per Plan Year.
|_| Every 6 Months.
|_| Every 3 Months.
|_| Every Month.
|X| Anytime.
- --------------------------------------------------------------------------------
3E.6 F. Withdrawal of Qualified Voluntary Employee Contribu-
tions (QVEC Contributions)
* Applicable only if this is a readoption of an existing
plan. If selected, Contributions may be withdrawn for
any reason.
|X| Not Available under the Plan.
|_| Available under the Plan.
If available, Qualified Voluntary Employee Con-
tributions may be withdrawn:
|_| Once per Plan Year.
|_| Every 6 Months.
|_| Every 3 Months.
|_| Every Month.
|_| Anytime.
- --------------------------------------------------------------------------------
September 24, 1997
- 37 -
<PAGE>
Plan Document XVII. WITHDRAWALS PRECEDING TERMINATION
Section
3E.1(c) G. Withdrawal of Prior Required Employee Contributions.
* Withdrawal may be for any reason.
|X| Not Available under the Plan.
|_| Available under the Plan.
If available, Prior Required Employee Contribu-
tions may be withdrawn:
|_| Once each 6 months.
|_| Once each 12 months.
|_| Other (specify)
--------------
Prior Required Employee Contributions are posttax
contributions made by Employees in order to receive
an Employer contribution and which were made before
the Plan's original conversion and/or restatement on
(fill in date).
--------------
- --------------------------------------------------------------------------------
3E.1(d) H. Withdrawal of Prior Voluntary Employee Contributions.
* Withdrawal may be for any reason and may be taken at any
time.
|X| Not Available under the Plan.
|_| Available under the Plan.
Prior Voluntary Employee Contributions are voluntary
contributions made by Employees prior to these types of
contribution being eliminated as a plan option on
(fill in date).
-------------------
- --------------------------------------------------------------------------------
Plan Document XVIII. LOANS TO PARTICIPANTS, BENEFICIARIES AND
Section PARTIES-IN-INTEREST
5C A. Loans are permitted.
|X| Yes
* If yes, Plan must be trusteed.
|_| No
- --------------------------------------------------------------------------------
September 24, 1997
- 38 -
<PAGE>
Plan Document XVIII. LOANS TO PARTICIPANTS, BENEFICIARIES AND
Section PARTIES-IN-INTEREST
5C B. Loans are available only from the following sources:
* Qualified Voluntary Employee Contributions (QVEC
Contributions) may not be taken in a loan.
|X| All Sources.
|_| List Sources:
----------------------------------------------
----------------------------------------------
----------------------------------------------
- --------------------------------------------------------------------------------
Plan Document XIX. RETIREMENT AND DISABILITY
Section
1.40 A. Normal Retirement Age is:
|X|1. The date the Participant attains age 65 (not
--------
to exceed 65).
|_|2. The later of:
a. The date the Participant attains age
--------
(not to exceed 65), or
b. The (not to exceed 5th) anniver-
------------
sary of the Participation Commencement Date.
* Note regarding 2.b above: If, for Plan Years
beginning before January 1, 1988, Normal Retire-
ment Age was deter mined with reference to the
anniversary of the Participation Commencement
Date (more than 5 but not to exceed 10 years),
the anniversary date for Participants who first
commenced participation under the Plan before the
first Plan Year beginning on or after January 1,
1988 shall be the earlier of (A) the tenth anni-
versary of the date the Participant commenced
participation in the Plan (or such anniversary as
had been elected by the Employer, if less than
10) or (B) the fifth anniversary of the first day
of the first Plan Year beginning on or after
January 1, 1988. The Participation Commencement
Date is the first day of the first Plan Year in
which the Participant commenced participation in
the Plan.
- --------------------------------------------------------------------------------
September 24, 1997
- 39 -
<PAGE>
Plan Document XIX. RETIREMENT AND DISABILITY
Section
1.18 B. Early Retirement by Participants
1. Early Retirement by Participants is:
|X| a. Not Permitted.
|_| b. Permitted. Subject to the following condi-
tions:
|_| i. Age (not to exceed 65).
-------------
|_| ii. Years of Service .
|_| iii. Age (not to exceed 65) and
----------
Years of Service.
|_| iv, Age (not to exceed 65) and
----------
Years of Participation.
- --------------------------------------------------------------------------------
1.16 C. Disability
1. The Employer shall/shall not make contributions on
behalf of disabled Participants who are Nonhighly
Compensated Employees on the basis of the Compensa-
tion each such Participant would have received for
the Limitation Year if the Participant had been
paid at the rate of Compensation paid immediately
before becoming permanently and totally disabled.
|X| Shall |_| Shall Not
*All such contributions are 100% vested and nonfor-
feitable when made.
- --------------------------------------------------------------------------------
Plan Document XX. DISTRIBUTION OF BENEFITS
Section
3A.1 A. Distribution of benefits should be in the form of
(check all that apply):
|X|1. Single Sum.
|X|2. Life Annuity.
|X|3. Installment Payments.
|X|4. Installment Refund Annuity.
[X|5. Employer Stock, to the extent the Participant is
invested therein.
- --------------------------------------------------------------------------------
B. Distribution Timing
[X|1. All Participants may elect to defer their dis-
tributions.
|_|2. Participants who terminate employment and whose
account balances never exceeded $3,500 shall
receive an immediate, lump sum cash distribu-
tion.
- --------------------------------------------------------------------------------
September 24, 1997
- 40 -
<PAGE>
Plan Document XX. DISTRIBUTION OF BENEFITS
Section
C. Expenses - Deferred Participants.
1. Participants who elect to defer distribution of
their benefits shall/shall not pay for all fees
associated with administration of their deferral
payment.
|X| Shall |_| Shall Not
- --------------------------------------------------------------------------------
Plan Document XXI. QUALIFIED PRERETIREMENT SURVIVOR ANNUITY
Section
3C.4 The Qualified Preretirement Survivor Annuity shall be:
* 100% is required for Plans allowing only single sum dis-
tribution.
|X| 100% to the surviving spouse.
|_| 50% to the surviving spouse.
- --------------------------------------------------------------------------------
Plan Document XXII. AMENDMENT TO THE PLAN
Section
7B A. The party having the authority to amend the Adoption
Agreement is the:
|_|1. Trustee(s).
*Trustee(s) cannot be chosen if the Trustee is CG
Trust.
|X|2. Plan Administrator.
|_|3. Plan Committee.
|_|4. Designated Representative of the Employer.
- --------------------------------------------------------------------------------
September 24, 1997
- 41 -
<PAGE>
Plan Document XXIII. TOP-HEAVY PROVISIONS
Section
7A.1(i) A. Method to be used to avoid duplication of Top-Heavy
Minimum benefits when a non-Key Employee is a Partici-
pant in both this Plan and a defined benefit plan main-
tained by the Employer (select one response):
|_|1. N/A. The Employer has no other plan(s).
|X|2. Single Plan Minimum Top-Heavy Allocation. A
minimum Top-Heavy contribution will be allocated
to each non-Key Employee's Participant Account
in an amount equal to:
|_|a. The lesser of 3% of Compensation or the
highest percentage allocated to any Key
Employee.
|X|b. 3 % of Compensation (must be at least
------
3%).
|_|3. Multiple Plans Top-Heavy Allocation. In order
to satisfy Code sections 415 and 416, and
because of the required aggregation of multiple
plans, a minimum Top-Heavy contribution will be
allocated to each non-Key Employee in an amount
equal to:
|_|a. Not Applicable. No other plan was in
existence prior to the Effective Date of
this Adoption Agreement.
|_|b. 5% of Compensation, to be provided in a
defined contribution plan of the
Employer.
|_|c. 7 1/2% of Compensation, to be noninte-
grated, and provided in this Plan.
*If c is chosen, for all Plan Years in which
this Plan is Top-Heavy (but not Super Top-
Heavy), the Defined Benefit and Defined Contri-
bution fractions shall be computed using 125%.
|_|4. Enter the name of the plan(s) and specify the
method under which the plan(s) will provide Top-
Heavy Minimum Benefits to non-Key Employees
[include any adjustments required under Code
section 415(c)]:
------------------------------------------------
------------------------------------------------
* If 4 is selected, the method specified must preclude
Employer discretion and inadvertent omissions.
- --------------------------------------------------------------------------------
September 24, 1997
- 42 -
<PAGE>
Plan Document XXIII. TOP-HEAVY PROVISIONS
Section
7A.1 B. Present Value: In order to establish the present value
to compute the Top-Heavy Ratio, any benefit shall be
discounted only for mortality and interest, based on:
* Complete B only if response to A is 2, 3, or 4. Fill in
all blanks.
|_|1. Interest Rate %.
--------------
|_|2. Mortality Table .
-----------
|_|3. Valuation Date .
-----------
- --------------------------------------------------------------------------------
7A.2 C. Where a non-Key Employee is a Participant in this and
another defined contribution plan(s) of the Employer,
choose which plan will provide the minimum Top-Heavy
contribution:
|X|1. N/A. The Employer has no other plan.
|_|2. The minimum allocation will be met in this Plan.
|_|3. The minimum allocation will be met in the other
defined contribution plan. Enter the name of
the plan:
------------------------------------------------
------------------------------------------------
- --------------------------------------------------------------------------------
7A.3 D. Top-Heavy Vesting Schedule. In the event the plan
becomes Top-Heavy, the vesting schedule shall be:
*Must meet one of the schedules below and must be at
least as liberal as the vesting schedule elected in
Section IX.A.
|_|1. 100% vesting after (not to exceed 3)
-------------
years of Service.
|_|2. %vesting after 1 Years of Service
----------
%(not less than 20) vesting after 2 Years
------- of Service
%(not less than 40) vesting after 2 Years
------- of Service
%(not less than 60) vesting after 2 Years
------- of Service
%(not less than 80) vesting after 2 Years
------- of Service
100% vesting after 6 Years of Service
|_|3. Same vesting schedule(s) as elected in Adoption
Agreement Section IX (already meets Top-Heavy
minimum vesting requirements).
*If the vesting schedule under the Plan shifts into the
above schedule for any Plan Year because of the Plan's Top-
Heavy status, such shift is an amendment to the vesting
schedule and the election provisions in Section 7B.1 of the
Plan shall apply.
*The Top-Heavy vesting schedule will remain in effect even
if the Plan ceases to be Top Heavy.
- --------------------------------------------------------------------------------
September 24, 1997
- 43 -
<PAGE>
Plan Document XXIV. OTHER ADOPTING EMPLOYER
Section
6E.1, 6E.2 A. The following Adopting Employer(s) also adopt this plan
and have executed this Adoption Agreement:
*Fill in below the names and the Employer Identification
Numbers (EINs) of Adopting Employers.
*Must meet requirements of Plan definition of Employer,
Plan Section 1.24
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
- --------------------------------------------------------------------------------
September 24, 1997
- 44 -
<PAGE>
The Employer hereby adopts the Connecticut General Life Insurance Company
Defined Contribution Prototype Profit Sharing/Thrift Plan with 401(k) Feature,
including all elections made in this Non-Standardized Adoption Agreement, and
the Employer agrees to be bound by all terms of the Plan and by all the terms of
this Adoption Agreement and of the Annuity Contract. The Employer further agrees
that it will furnish promptly all information required by the Trustee, if
applicable, the Plan Administrator and the Insurance Company in order to carry
out their functions. The Employer shall notify the Trustee, if applicable, the
Plan Administrator and the Insurance Company promptly of any changes in the
status of the Employer which might affect the Employer's duties and
responsibilities hereunder.
The elections under this Adoption Agreement may be changed by the Employer from
time to time by a written instrument signed by the Employer, the Plan
Administrator and the Trustee, if applicable, and accepted by the Plan Sponsor.
The Employer consents to the exercise by the Plan Sponsor of the right to amend
the Plan and the Annuity Contract from time to time as it may deem necessary or
advisable.
By signing this Adoption Agreement, the Employer specifically acknowledges that
the Insurance Company has no authority: (1) to answer legal questions and that
all such questions shall be answered by legal counsel for the Employer; and (2)
to make determinations involved in the administration of the Plan and that all
such determination shall be answered by the Employer's Plan Administrator or
other designated representative.
Upon execution of this Adoption Agreement by the Employer, the Plan shall be
effective with respect to that Employer as of the Effect Date specified herein,
provided the Plan Administrator and the Trustee, if applicable, shall then or
thereafter execute this Adoption Agreement to signify their acceptance of their
duties and responsibilities hereunder and provided further, the Plan Sponsor
will indicate its acceptance of their duties and responsibilities hereunder and
provided further, the Plan Sponsor will indicate its acceptance of the Employer
in accordance with its usual rules and practices.
The Adopting Employer may not rely on an opinion letter issued by the National
Office of the Internal Revenue Service as evidence that the Plan is qualified
under Internal Revenue Code section 401. In order to obtain reliance with
respect to plan qualification, the Employer must apply to the appropriate key
district office for a determination letter.
Connecticut General Life Insurance Company will inform the Employer of any
amendments made to the Plan or of the discontinuance or abandonment of such
Plan.
CAUTION: You should very carefully examine the elections you have made in this
Adoption Agreement and discuss them with your legal counsel. Failure to properly
fill out the Adoption Agreement may result in disqualification of your plan.
This Adoption Agreement may only be used in conjunction with Basic Plan Document
Number 03.
(Note: The Employer, Plan Administrator and Trustee, if applicable, must all
sign below.)
Executed at this day of , 19 .
------------- ----- -------------- -----
Employer's Exact Name:
------------------------------
Witness: By:
----------------------- ----------------------------------------
Title:
--------------------------------------
Additional Adopting Employer's Exact Name:
-------------------------
Witness: By:
----------------------- ----------------------------------------
Title:
--------------------------------------
September 24, 1997
- 45 -
<PAGE>
Additional Adopting Employer's Exact Name:
-------------------------
Witness: By:
----------------------- ----------------------------------------
Title:
--------------------------------------
Additional Adopting Employer's Exact Name:
-------------------------
Witness: By:
----------------------- ----------------------------------------
Title:
--------------------------------------
Additional Adopting Employer's Exact Name:
-------------------------
Witness: By:
----------------------- ----------------------------------------
Title:
--------------------------------------
ACCEPTED this day of , 19 .
----------- ---------------------------- ----
Witness: By (Plan Administrator):
----------------------- --------------------
Witness: By (Plan Administrator):
----------------------- --------------------
Witness: By (Plan Administrator):
----------------------- --------------------
Witness: By (Trustee):
----------------------- ------------------------------
Witness: By (Trustee):
----------------------- ------------------------------
Witness: By (Trustee):
----------------------- ------------------------------
ACCEPTED this day of , 19 .
-------- ------------------------ ----------
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By (Authorized Representative):
-------------------------------
September 24, 1997
- 46 -
EXHIBIT 5.1
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
Plan Description: Prodotype Non-standardized Washington, DC 20224
Profit Sharing Plan with CODA
FFN: 50315620003-001 Case: 9401285
EIN: 06-0303370
BPD: 03 Plan: 001 Letter Serial No.: D365331a
Person to Contact: Ms. Arrington
*CONNECTICUT GENERAL LIFE
INSURANCE CO. Telephone Number: (202) 622-8173
350 CHURCH STREET M-92 Refer Reply to: CP:E:EP:T4
HARTFORD, CT. 06067 Date: 05/07/96
Dear Applicant:
In our opinion, the form of the plan identified above is acceptable under
section 401 of the Internal Revenue Code for use by employers for the benefit of
their employees. This opinion relates only to the acceptability of the form of
the plan under the Internal Revenue Code. It is not an opinion of the effect of
other Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this plan.
You are also required to send a copy of the approved form of the plan, any
approved amendments and related documents to each Key District Director of
Internal Revenue Service in whose jurisdiction there are adopting employers.
Our opinion on the acceptability of the form of the plan is not a ruling or
dermination as to whether an employer's plan qualifies under Code section
401(a). Therefore, an employer adopting the form of the plan should apply for a
determination letter by filing an application with the Key District Director of
Internal Revenue Service on Form 5307. Short Form Application for Determination
for Employer Benefit Plan.
Because you submitted this plan for approval after March 31, 1991, the
continued, interim and extended reliance provisions of sections 13 and 17.03 of
Rev. Proc. 89-9, 1989-1 C.B. 780, are not applicable
Because you submitted this plan on or after July 1, 1994, it does not meet the
requirements for the extention of the remedial amendment period provided by Rev.
Proc. 55-12, 1995-3 I.R.S. 24.
This letter may not be relied upon with respect to whether the plan satisfies
the qualification requirements as amended by Uruguay Round Agreements Act. Pub.
L. 103-465.
If you, the sponsoring organization, have any questions concerning the IRS
procession of this case, please call the above telephone number. This number is
only for use of the sponsoring organization. individual participants and/or
adopting employers with questions concerning the plan should contact the
sponsoring organization. The plan's adoption agreement must include the
sponsoring organization's address and telephone number for inquiries by adopting
employers.
If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial Number
and File Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record. Please notify us if you
modify or discontinue sponsorship of this plan.
Sincerely yours,
/s/ John G. Reoder, Jr.
---------------------------------------------
Chief, Employee Plans Technical Branch 4
September 24, 1997
- 47 -
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of VTEL Corporation of our report dated September 24, 1997
appearing on page 28 of VTEL Corporation's Annual Report on Form 10-K for the
year ended July 31, 1997.
/s/ Price Waterhouse LLP
- ------------------------
Austin, Texas
January 14, 1998
- 48 -
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
We consent to the incorporation by reference in the report on Form S-8 of VTEL
Corporation of our report dated March 13, 1996 with respect to the consolidated
financial statements of Compression Labs, Inc. as of December 31, 1995 and 1994,
and the related consolidated statements of operations, stockholders' equity, and
cash flows for each of the years in the two year period ended December 31, 1995,
which report is included in the Annual Report on Form 10-K of VTEL Corporation.
/s/ KPMG Peat Marwick LLP
---------------------------
San Jose, California
January 14, 1998
- 49 -
