<PAGE> 1
EXHIBIT 4.1
FIRST AMENDMENT OF THE NETWORKS ASSOCIATES, INC.
TAX DEFERRED SAVINGS PLAN
This First Amendment to the Networks Associates, Inc. Tax Deferred Savings Plan
is adopted effective as of January 1, 1998.
The Networks Associates, Inc. Tax Deferred Savings Plan, as amended and restated
effective January 1, 1998, is hereby amended as follows:
1. Section 1.1 is amended in its entirety to read in its entirety as follows:
"A `Predecessor Employer' means Progressive Computing, Inc., Protools,
Inc., Networks Associates Technology Corp., Aim Technology, Cinco Networks,
Inc., Network General Corporation, McAfee Associates, Inc., Saber Software
Corporation, Pretty Good Privacy, Inc., Magic Solutions, Inc., Trusted
Information Systems, Inc. and such other entities that have been or shall
be merged, consolidated, otherwise absorbed by the Employer, or of which
all or a substantial part of the assets of the business have been or shall
be acquired by the Employer and which have been designated by the Plan
Administrative Committee."
2. Section 16.1 is amended to add a new paragraph to read as follows:
"Notwithstanding the provisions of this Section 16.1, a former Cinco
Networks 401(k) Plan participant ("Cinco Participant") or his Beneficiary,
if the Cinco Participant has died, shall with respect to his Plan interest,
have the option to receive a distribution in installment payments over a
period certain, not to extend beyond the life expectancy of the Cinco
Participant or the joint life expectancy of the Cinco Participant and his
Beneficiary."
3. Section 6.4 is revised in its entirety to read as follows:
"The Employer shall make a Matching Contribution to the Plan for each
Contribution Period. The amount of any Matching Contribution allocated
pursuant to Section 6.5 shall be set by the Board from time to time in its
sole discretion."
4. Section 6.5 is revised in its entirety to read as follows:
"Participants who have made Tax-Deferred Contributions for the Contribution
Period who are eligible to participate in the allocation of Employer
Contributions for the Contribution Period, as determined under Section 6.8,
shall be eligible to receive an allocation of any Matching Contribution."
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This First Amendment is executed effective as of the date set forth above at
Santa Clara, California.
ADMINISTRATIVE COMMITTEE FOR THE
NETWORKS ASSOCIATES, INC. TAX
DEFERRED SAVINGS PLAN
By: /s/ LINDA GRECO
-----------------------------
2
<PAGE> 3
SECOND AMENDMENT TO THE
NETWORKS ASSOCIATES INC. TAX DEFERRED SAVINGS PLAN
WHEREAS, Networks Associates Inc. (the "Sponsor") adopted the Networks
Associates Inc. Tax Deferred Savings Plan (the "Plan"), most recently amended
and restated effective January 1, 1998; and
WHEREAS, the Sponsor desires to amend the Plan.
NOW, THEREFORE, the Sponsor amends the Plan as follows, effective January
1, 1998:
1. The name of the Sponsor each time it appears in the Plan, including in
the Plan name, is amended to read as follows: Networks Associates Inc.
2. Article I is amended by the addition of a definition of "Sponsor
Stock" reading as follows:
"Sponsor Stock" shall means shares of common stock issued by the Sponsor,
which is listed on either a national securities exchange or the national
market system of the National Association of Securities Dealers Automated
Quotation System ("NASDAQ").
3. Section 6.7 is amended and restated in its entirety to read as
follows:
Employer Contributions made for a Contribution Period shall be paid in
cash or in qualifying employer securities, as defined in Section 407(d)
(5) of ERISA, to the Trustee within the period of time required under the
Code in order for the contribution to be deductible by the Employer in
determining its Federal income taxes for the Plan Year.
4. Sections 8.1 is amended and restated in its entirety to read as
follows:
The Trustee shall maintain a General Fund as required to hold and
administer any assets of the Trust that are not allocated among the
separate Investment Funds as provided in the Plan or the Trust Agreement.
The General Fund shall be held and administered as a separate common
trust fund. The
<PAGE> 4
interest of each Participant or Beneficiary under the Plan in the General
Fund shall be an undivided interest. The General Fund may be invested in
whole or in part in equity securities issued by an Employer or a Related
Company that are publicly traded and are "qualifying employer securities"
as defined in Section 407(d)(5) of ERISA.
5. Sections 8.2 is amended by the addition of the following paragraph to
the end thereof:
The Sponsor may determine to offer one or more Investment Funds that are
invested in whole or in part in equity securities issued by an Employer
or a Related Company that are publicly traded and are "qualifying
employer securities" as defined in Section 407(d)(5) of ERISA.
6. Article VIII is amended by the addition of the following section to
the end thereof:
8.8 Sponsor Stock as Plan Asset
The Plan is established for the purposes, among others, of enabling
Employees to acquire capital ownership in the Sponsor through the
contribution of Sponsor Stock to the Plan and investment of cash
contributions to the Plan in Sponsor Stock. In the fulfillment of these
purposes, and subject to the provisions hereinafter set forth, any assets
of the Trust, up to 100% thereof, may be invested in or used to acquire
Sponsor Stock in such amount and at such prices as the Sponsor in its
judgment shall deem appropriate; provided, however the purchase of the
Sponsor Stock to be acquired by the Trust shall be made at a price, or at
prices, which do not exceed the fair market value of such shares of
Sponsor Stock.
7. Section 10.2 is amended and restated in its entirety to read as
follows:
A11 Tax-Deferred Contributions, Rollover Contributions, and Employer
Contributions shall be deposited in the Trust and allocated among the
Investment Funds in accordance with the Participant's currently effective
investment election; provided, however, that any contributions made to
the Plan in qualifying employer securities shall be allocated to the
Employer securities Investment Fund established by the
<PAGE> 5
Sponsor, pending directions to the Administrator regarding their future
investment. If no investment election is on file with the Administrator
at the time contributions are to be deposited to a Participant's Separate
Account, the Participant shall be notified and an investment election
form shall be provided to him. Until such Participant shall make an
effective election under this Section, his contributions shall be
allocated among the Investment Funds as directed by the Administrator.
8. Article XVI is amended by the addition of a new Section 16.4 reading
as follows:
16.4 DISTRIBUTION IN THE FORM OF SPONSOR STOCK
Notwithstanding any other provision of the Plan to the contrary, a
Participant may elect to receive distribution of the fair market value of
his Separate Account in the form of Sponsor stock.
IN WITNESS WHEREOF, the Sponsor has executed this instrument this 25 day
of November, 1998.
NETWORKS ASSOCIATES INC.
By: /s/ PRABHAT GOYAL
-------------------------------------
Title: Chief Financial Officer
----------------------------------
3
<PAGE> 6
THIRD AMENDMENT OF THE NETWORKS ASSOCIATES, INC.
TAX DEFERRED SAVINGS PLAN
Networks Associates, Inc. (the "Sponsor") adopted the Networks Associates, Inc.
Tax Deferred Savings Plan, amended and restated effective as of January 1, 1998
(the "Plan").
A. Effective January 1, 1999, the Sponsor hereby amends the definition of
"Employee" in Section 1.1 to read, in its entirety, as follows:
"An "EMPLOYEE" means a person currently employed by the Employer, any
portion of whose income is subject to withholding of income tax and/or for
whom Social Security contributions are made by the Employer, as well as any
other person qualifying as a common law employee of the Employer.
Notwithstanding the foregoing, an "Employee" shall not include:
(1) a member of a collective bargaining unit who is covered by a
collective bargaining agreement, which agreement does not
specifically provide for coverage of such employee under the
Plan;
(2) a non-resident alien who receives no earned income (within the
meaning of section 911(d)(2) of the Code) from the Employer which
constitutes income from sources within the United States (within
the meaning of section 861(a)(3) of the Code);
(3) any person employed in a "temporary employee" job classification
and who is not expected to complete more than one thousand
(1,000) hours of service during a Plan Year;
(4) any person performing services for the Employer through an
employment or leasing agency, including any leased employee
within the meaning of section 414(n) of the Code, regardless of
whether such individual is later determined to be an "employee"
by court of law or regulatory agency;
(5) any person performing services as an independent contractor or
consultant regardless of whether such individual is later
determined to be an "employee" by court of law or regulatory
agency; or
(6) any employee of a Related Company, except for a Related Company
which has adopted the Plan.
<PAGE> 7
B. Effective January 1, 2000, the Sponsor hereby amends the definition of
"Enrollment Date" in Section 1.1 to read, in its entirety, as follows:
"An "ENROLLMENT DATE" means the first day of each month."
This Third Amendment is executed on this 13th day of December 1999, at Santa
Clara, California.
NETWORKS ASSOCIATES, INC.
By: /s/ PRABHAT GOYAL
--------------------------------------
Prabhat Goyal
Title: Chief Financial Officer
----------------------------------
2
<PAGE> 8
NETWORK ASSOCIATES, INC.
TAX DEFERRED SAVINGS PLAN
(January 1, 1998 Restatement)
Fidelity Management Trust Company, its affiliates and employees may not provide
you with legal or tax advice in connection with the execution of this document.
It should be reviewed by your attorney and/or accountant prior to execution.
CORPORATE plan for RETIREMENT(SM)
VOLUME SUBMITTER
PLAN DOCUMENT SYSTEMS(TM)
<PAGE> 9
TABLE OF CONTENTS
PREAMBLE
<TABLE>
<S> <C>
ARTICLE I--DEFINITIONS
1.1 Plan Definitions
1.2 Interpretation
ARTICLE II--SERVICE
2.1 Definitions
2.2 Crediting of Hours of Service
2.3 Crediting of Continuous Service
2.4 Eligibility Service
2.5 Vesting Service
ARTICLE III--ELIGIBILITY
3.1 Eligibility
3.2 Transfers of Employment
3.3 Reemployment
3.4 Notification Concerning New Eligible Employees
3.5 Effect and Duration
ARTICLE IV--TAX-DEFERRED CONTRIBUTIONS
4.1 Tax-Deferred Contributions
4.2 Amount of Tax-Deferred Contributions
4.3 Changes in Reduction Authorization
4.4 Suspension of Tax-Deferred Contributions
4.5 Resumption of Tax-Deferred Contributions
4.6 Delivery of Tax-Deferred Contributions
4.7 Vesting of Tax-Deferred Contributions
ARTICLE V--AFTER-TAX AND ROLLOVER CONTRIBUTIONS
5.1 No After-Tax Contributions
5.2 Rollover Contributions
5.3 Vesting of Rollover Contributions
ARTICLE VI--EMPLOYER CONTRIBUTIONS
6.1 Contribution Period
6.2 Profit-Sharing Contributions
6.3 Allocation of Profit-Sharing Contributions
6.4 Matching Contributions
6.5 Allocation of Matching Contributions
6.6 Verification of Amount of Employer Contributions
by the Sponsor
</TABLE>
(i)
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<TABLE>
<S> <C>
6.7 Payment of Employer Contributions
6.8 Eligibility to Participate in Allocation
6.9 Vesting of Employer Contributions
6.10 Election of Former Vesting Schedule
6.11 Forfeitures to Reduce Employer Contributions
ARTICLE VII--LIMITATIONS ON CONTRIBUTIONS
7.1 Definitions
7.2 Code Section 402(g) Limit
7.3 Limitation on Tax-Deferred Contributions of Highly Compensated
Employees
7.4 Distribution of Excess Tax-Deferred Contributions
7.5 Limitation on Matching Contributions of Highly Compensated Employees
7.6 Forfeiture or Distribution of Excess Contributions
7.7 Multiple Use Limitation
7.8 Determination of Income or Loss
7.9 Code Section 415 Limitations on Crediting of Contributions and
Forfeitures
7.10 Coverage Under Other Qualified Defined Contribution Plan
7.11 Coverage Under Qualified Defined Benefit Plan
7.12 Scope of Limitations
ARTICLE VIII--TRUST FUNDS AND SEPARATE ACCOUNTS
8.1 General Fund
8.2 Investment Funds
8.3 Loan Investment Fund
8.4 Appointment of Investment Managers
8.5 Income on Trust
8.6 Separate Accounts
8.7 Sub-Accounts
ARTICLE IX--LIFE INSURANCE CONTRACTS
9.1 No Life Insurance Contracts
ARTICLE X--DEPOSIT AND INVESTMENT OF CONTRIBUTIONS
10.1 Future Contribution Investment Elections
10.2 Deposit of Contributions
10.3 Election to Transfer Between Funds
10.4 404(c) Plan
ARTICLE XI--CREDITING AND VALUING SEPARATE ACCOUNTS
11.1 Crediting Separate Accounts
</TABLE>
(ii)
<PAGE> 11
<TABLE>
<S> <C>
11.2 Valuing Separate Accounts
11.3 Plan Valuation Procedures
11.4 Finality of Determinations
11.5 Notification
ARTICLE XII--LOANS
12.1 Application for Loan
12.2 Reduction of Account Upon Distribution
12.3 Requirements to Prevent a Taxable Distribution
12.4 Administration of Loan Investment Fund
12.5 Default
12.6 Loans Granted Prior to October 19, 1989
ARTICLE XIII--WITHDRAWALS WHILE EMPLOYED
13.1 Withdrawals of Rollover Contributions
13.2 Withdrawals of Employer Contributions
13.3 Withdrawals of Tax-Deferred Contributions
13.4 Limitations on Withdrawals Other than Hardship Withdrawals
13.5 Order of Withdrawal from a Participant's Sub-Accounts
13.6 Conditions and Limitations on Hardship Withdrawals
ARTICLE XIV--TERMINATION OF EMPLOYMENT AND SETTLEMENT DATE
14.1 Termination of Employment and Settlement Date
14.2 Separate Accounting for Non-Vested Amounts
14.3 Disposition of Non-Vested Amounts
14.4 Recrediting of Forfeited Amounts
ARTICLE XV--DISTRIBUTIONS
15.1 Distributions to Participants
15.2 Distributions to Beneficiaries
15.3 Cash Outs and Participant Consent
15.4 Required Commencement of Distribution
15.5 Reemployment of a Participant
15.6 Restrictions on Alienation
15.7 Facility of Payment
15.8 Inability to Locate Payee
15.9 Distribution Pursuant to Qualified
Domestic Relations Orders
ARTICLE XVI--FORM OF PAYMENT
16.1 Form of Payment
16.2 Direct Rollover
</TABLE>
(iii)
<PAGE> 12
<TABLE>
<S> <C>
16.3 Notice Regarding Form of Payment
ARTICLE XVII--BENEFICIARIES
17.1 Designation of Beneficiary
17.2 Spousal Consent Requirements
ARTICLE XVIII--ADMINISTRATION
18.1 Authority of the Sponsor
18.2 Action of the Sponsor
18.3 Claims Review Procedure
18.4 Qualified Domestic Relations Orders
18.5 Indemnification
18.6 Actions Binding
ARTICLE XIX--AMENDMENT AND TERMINATION
19.1 Amendment
19.2 Limitation on Amendment
19.3 Termination
19.4 Reorganization
19.5 Withdrawal of as Employer
ARTICLE XX--ADOPTION BY OTHER EMPLOYERS
20.1 Adoption by Related Companies
20.2 Effective Plan Provisions
ARTICLE XXI--MISCELLANEOUS PROVISIONS
21.1 No Commitment as to Employment
21.2 Benefits
21.3 No Guarantees
21.4 Expenses
21.5 Precedent
21.6 Duty to Furnish Information
21.7 Withholding
21.8 Merger, Consolidation, or Transfer of Plan Assets
21.9 Back Pay Awards
21.10 Condition on Employer Contributions
21.11 Return of Contributions to an Employer
21.12 Validity of Plan
21.13 Trust Agreement
21.14 Parties Bound
21.15 Application of Certain Plan Provisions
21.16 Leased Employees
21.17 Transferred Funds
</TABLE>
(iv)
<PAGE> 13
<TABLE>
<S> <C>
ARTICLE XXII--TOP-HEAVY PROVISIONS
22.1 Definitions
22.2 Applicability
22.3 Minimum Employer Contribution
22.4 Adjustments to Section 415 Limitations
22.5 Accelerated Vesting
ARTICLE XXIII--EFFECTIVE DATE
23.1 Effective Date of Amendment and Restatement
ADDENDUM--Re: PLAN LOANS
01. Loans Restricted to Eligible Employees
02. Minimum Loan Amount
03. Maximum Number of Outstanding Loans
</TABLE>
(v)
<PAGE> 14
PREAMBLE
The Network Associates, Inc. Tax Deferred Savings Plan, originally effective as
of September 15, 1988, is hereby amended and restated in its entirety. The Plan,
as amended and restated hereby, is intended to qualify as a profit-sharing plan
under Section 401(a) of the Code, and includes a cash or deferred arrangement
that is intended to qualify under Section 401(k) of the Code. The Plan is
maintained for the exclusive benefit of eligible employees and their
beneficiaries.
Notwithstanding any other provision of the Plan to the contrary, a Participant's
vested interest in his Separate Account under the Plan on and after the
effective date of this amendment and restatement shall be not less than his
vested interest in his account on the day immediately preceding the effective
date. In addition, notwithstanding any other provision of the Plan to the
contrary, the forms of payment and other Plan provisions that were available
under the Plan immediately prior to the later of the effective date of this
amendment and restatement or the date this amendment and restatement is adopted
and that may not be eliminated under Section 411(d)(6) of the Code shall
continue to be available to Participants who had an account under the Plan on
the day immediately preceding the later of the effective date or the date this
amendment and restatement is adopted.
1
<PAGE> 15
ARTICLE I
DEFINITIONS
1.l Plan Definitions
As used herein, the following words and phrases have the meanings hereafter set
forth, unless a different meaning is plainly required by the context:
The "Administrator" means the Sponsor unless the Sponsor designates another
person or persons to act as such.
An "After-Tax Contribution" means any after-tax employee contribution made by a
Participant as may be permitted under Article V.
The "Beneficiary" of a Participant means the person or persons entitled under
the provisions of the Plan to receive distribution hereunder in the event the
Participant dies before receiving distribution of his entire interest under the
Plan.
The "Code" means the Internal Revenue Code of 1986, as amended from time to
time. Reference to a section of the Code includes such section and any
comparable section or sections of any future legislation that amends,
supplements, or supersedes such section.
The "Compensation" of a Participant for any period means the wages as defined
in Section 3401(a) of the Code, determined without regard to any rules that
limit compensation included in wages based on the nature or location of the
employment or services performed, and all other payments made to him for such
period for services as an Employee for which his Employer is required to furnish
the Participant a written statement under Sections 6041(d) and 6051(a)(3) of the
Code, and excluding reimbursements or other expense allowances, fringe benefits,
moving expenses, deferred compensation, and welfare benefits, but determined
prior to any exclusions for Tax-Deferred Contributions or amounts deferred under
Section 125, 402(e)(3), 402(h), 403(b), or 457(b) of the Code.
Notwithstanding the foregoing, Compensation shall not include the value of any
qualified or non-qualified stock option granted to he Participant by his
Employer to the extent such value is includible in the Participant's taxable
income.
In no event, however, shall the Compensation of a Participant taken into account
under the Plan for any Plan Year exceed (1) $200,000 for Plan Years beginning
prior to January 1, 1994, or (2) $150,000 for Plan Years beginning on or after
January 1, 1994
2
<PAGE> 16
(subject to adjustment annually as provided in Section 401(a)(17)(B) and
Section 415(d) of the Code; provided, however, that the dollar increase in
effect on January 1 of any calendar year, if any, is effective for Plan Years
beginning in such calendar year). If the Compensation of a Participant is
determined over a period of time that contains fewer than 12 calendar months,
then the annual compensation limitation described above shall be adjusted with
respect to that Participant by multiplying the annual compensation limitation in
effect for the Plan Year by a fraction the numerator of which is the number of
full months in the period and the denominator of which is 12; provided, however,
that no proration is required for a Participant who is covered under the Plan
for less than one full Plan Year if the formula for allocations is based on
Compensation for a period of at least 12 months. In determining the
Compensation, for purposes of applying the annual compensation limitation
described above, of a Participant who is five percent owner or among the ten
Highly Compensated Employees receiving the greatest Compensation for the Plan
Year, the Compensation of the Participant's spouse and of his lineal
descendants who have not attained age 19 as of the close of the Plan Year shall
be included as Compensation of the Participant for the Plan Year. If as a result
of applying the family aggregation rule described in the preceding sentence the
annual compensation limitation would be exceeded, the limitation shall be
prorated among the affected family members in proportion to each member's
Compensation as determined prior to application of the family aggregation rules.
A "Contribution Period" means the period specified in Article VI for which
Employer Contributions shall be made.
An "Eligible Employee" means any Employee who has met the eligibility
requirements of Article III to have Tax-Deferred Contributions made to the Plan
on his behalf.
The "Eligibility Service" of an employee means the period or periods of service
credited to him under the provisions of Article II for purposes of determining
his eligibility to participate in the Plan as may be required under Article III
or Article VI.
An "Employee" means all employees of the Employer except for non-resident
aliens, an employee classified as a temporary employee, and an employee of a
Related Company, except for a Related Company which has adopted the Plan.
An "Employer" means the Sponsor and any entity which has adopted the Plan as may
be provided under Article XX.
3
<PAGE> 17
An "Employer Contribution" means the amount, if any, that an Employer
contributes to the Plan as may be provided under Article VI or Article XXII.
An "Enrollment Date" means first day of each calendar quarter.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time. Reference to a section of ERISA includes such section and any
comparable section or sections of any future legislation that amends,
supplements, or supersedes such section.
The "General Fund" means a Trust Fund established by the Trustee as required to
hold and administer any assets of the Trust that are not allocated among any
separate Investment Funds as may be provided in the Plan or the Trust Agreement.
No General Fund shall be established if all assets of the Trust are allocated
among separate Investment Funds.
A "Highly Compensated Employee" means an Employee or former Employee who is a
highly compensated active employee or highly compensated former employee as
defined hereunder.
A "highly compensated active employee" includes any Employee who performs
services for an Employer during the determination year and who (i) was a five
percent owner at any time during the determination year or the look back year,
(ii) received compensation from an Employer during the look back year in excess
of $75,000 (subject to adjustment annually at the same time and in the same
manner as under Section 415(d) of the Code), (iii) was in the top paid group of
employees for the look back year and received compensation from an Employer
during the look back year in excess of $50,000 (subject to adjustment annually
at the same time and in the same manner as under Section 415(d) of the Code),
(iv) was an officer of an Employer during the look back year and received
compensation during that year in excess of 50 percent of the dollar limitation
in effect for that year under Section 415(b)(1)(A) of the Code or, if no
officer received compensation in excess of that amount for the look back year or
the determination year, received the greatest compensation for the look back
year of any officer, or (v) was one of the 100 employees paid the greatest
compensation by an Employer for the determination year and would be described in
(ii), (iii), or (iv) above if the term "determination year" were substituted for
"look back year".
A "highly compensated former employee" includes any Employee who separated from
service from an Employer and all Related Companies (or is deemed to have
separated from service from an Employer and all Related Companies) prior to the
determination year, performed no services for an Employer during the
determination year, and
4
<PAGE> 18
was a highly compensated active employee for either the separation year or any
determination year ending on or after the date the Employee attains age 55.
The determination of who is a Highly Compensated Employee hereunder, including
determinations as to the number and identity of employees in the top paid group,
the 100 employees receiving the greatest compensation from an Employer, the
number of employees treated as officers, and the compensation considered, shall
be made in accordance with the provisions of Section 414(q) of the Code and
regulations issued thereunder. For purposes of this definition, the following
terms have the following meanings:
(a) The "determination year" means the Plan Year or, if the Administrator
makes the election provided in paragraph (b) below, the period of time,
if any, which extends beyond the look back year and ends on the last day
of the Plan Year for which testing is being performed (the "lag period").
If the lag period is less than 12 months long the dollar amounts
specified in (ii), (iii), and (iv) above shall be prorated based upon the
number of months in the lag period.
(b) The "look back year" means the 12-month period immediately preceding the
determination year; provided, however, that the Administrator may elect
instead to treat the calendar year ending with or within the
determination year as the "look back year".
An "Hour of Service" with respect to a person means each hour, if any, that may
be credited to him in accordance with the provisions of Article II.
An "Investment Fund" means any separate investment Trust Fund established from
time to time by the Trustee as may be provided in the Plan or the Trust
Agreement or any separate investment fund maintained by the Trustee, to the
extent that there are Participant Sub-Accounts under such funds, to which assets
of the Trust may be allocated and separately invested.
The "Normal Retirement Date" of an employee means the date he attains age 65.
A "Participant" means any person who has a Separate Account in the Trust.
The "Plan" means the Network Associates Tax Deferred Savings Plan, as from time
to time in effect.
A "Plan Year" means the 12-consecutive month period ending each
5
<PAGE> 19
December 31.
A "Predecessor Employer" means Progressive Computing, Inc., Protools, Inc.,
Network Associates Technology Corp., and McAfee Associates.
A "Related Company" means any corporation or business, other than an Employer,
which would be aggregated with an Employer for a relevant purpose under Section
414 of the Code.
A "Rollover Contribution" means any rollover contribution to the Plan made by a
Participant as may be permitted under Article V.
A "Separate Account" means the account maintained by the Trustee in the name of
a Participant that reflects his interest in the Trust and any Sub-Accounts
established thereunder, as provided in Article VIII.
The "Settlement Date" of a Participant means the date on which a Participant's
interest under the Plan becomes distributable in accordance with Article XV.
The "Sponsor" means Network Associates, Inc., and any successor thereto.
A "Sub-Account" means any of the individual sub-accounts of a Participant's
Separate Account that is maintained as provided in Article VIII.
A "Tax-Deferred Contribution" means the amount contributed to the Plan on a
Participant's behalf by his Employer in accordance with his reduction
authorization executed pursuant to Article IV.
The "Trust" means the trust maintained by the Trustee under the Trust Agreement.
The "Trust Agreement" means the agreement entered into between the Sponsor and
the Trustee relating to the holding, investment, and reinvestment of the assets
of the Plan, together with all amendments thereto and shall include any
agreement establishing a custodial account, an annuity contract, or an insurance
contract (other than a life, health or accident, property, casualty, or
liability insurance contract) for the investment of assets if the custodial
account or contract would, except for the fact that it is not a trust,
constitute a qualified trust under Section 401 of the Code.
The "Trustee" means the trustee or any successor trustee which at the time shall
be designated, qualified, and acting under the Trust Agreement and shall include
any insurance company that
6
<PAGE> 20
issues an annuity or insurance contract pursuant to the Trust Agreement or any
person holding assets in a custodial account pursuant to the Trust Agreement.
A "Trust Fund" means any fund established under the Trust by the Trustee.
A "Valuation Date" means the date or dates designated by the Sponsor and
communicated in writing to the Trustee for the purpose of valuing the General
Fund and each investment Fund and adjusting Separate Accounts and Sub-Accounts
hereunder, which dates need not be uniform with respect to the General Fund,
each Investment Fund, Separate Account, or Sub-Account; provided, however, that
the General Fund and each Investment Fund shall be valued and each Separate
Account and Sub-Account shall be adjusted no less often than once annually.
The "Vesting Service" of an employee means the period or periods of service
credited to him under the provisions of Article II for purposes of determining
his vested interest in his Employer Contributions Sub-Account, if Employer
Contributions are provided for under either Article VI or Article XXII.
1.2 Interpretation
Where required by the context, the noun, verb, adjective, and adverb forms of
each defined term shall include any of its other forms. Wherever used herein,
the masculine pronoun shall include the feminine, the singular shall include
the plural, and the plural shall include the singular.
7
<PAGE> 21
ARTICLE II
SERVICE
2.1 Definitions
For purposes of this Article, the following terms have the following meanings:
(a) The "continuous service" of an employee means the service credited to him
in accordance with the provisions of Section 2.3 of the Plan.
(b) The "employment commencement date" of an employee means the date he first
completes an Hour of Service.
(c) A "maternity/paternity absence" means a person's absence from employment
with an Employer or a Related company because of the person's pregnancy,
the birth of the person's child, the placement of a child with the person
in connection with the person's adoption of the child, or the caring for
the person's child immediately following the child's birth or adoption. A
person's absence from employment will not be considered a
maternity/paternity absence unless the person furnishes the Administrator
such timely information as may reasonably be required to establish that
the absence was for one of the purposes enumerated in this paragraph and
to establish the number of days of absence attributable to such purpose.
(d) The "reemployment commencement date" of an employee means the first date
following a severance date on which he again completes an Hour of
Service.
(e) The "severance date" of an employee means the earlier of (i) the date on
which he retires, dies, or his employment with an Employer and all
Related Companies is otherwise terminated, or (ii) the first anniversary
of the first date of a period during which he is absent from work with an
Employer and all Related Companies for any other reason; provided,
however, that if he terminates employment with or is absent from work
with an Employer and all Related Companies on account of service with
the armed forces of the United States, he shall not incur a severance
date if he is eligible for reemployment rights under Federal law and he
returns to work with an Employer or a Related Company within the period
during which he retains such reemployment rights.
2.2 Crediting of Hours of Service
8
<PAGE> 22
A person shall be credited with an Hour of Service for each hour for which he is
paid, or entitled to payment, for the performance of duties for an Employer, a
Predecessor Employer, or any Related Company.
2.3 Crediting of Continuous Service
A person shall be credited with continuous service for the aggregate of the
periods of time between his employment commencement date or any reemployment
commencement date and the severance date that next follows such employment
commencement date or reemployment commencement date; provided, however, that an
employee who has a reemployment commencement date within the
12-consecutive-month period following the earlier of the first date of his
absence or his severance date shall be credited with continuous service for the
period between such severance date and reemployment commencement date.
2.4 Eligibility Service
There shall be no Eligibility Service credited under the Plan.
2.5 Vesting Service
Years of Vesting Service shall be determined in accordance with the following
provisions:
(a) An employee shall be credited with years of Vesting Service equal to his
period of continuous service.
(b) Notwithstanding the provisions of paragraph (a), continuous service
completed by an employee prior to a severance date shall not be included
in determining the employee's years of Vesting Service unless (1) the
employee has a reemployment commencement date within the
12-consecutive-month period following the severance date, (2) the
employee had a nonforfeitable right to any portion of his Separate
Account, excluding that portion of his Separate Account that is
attributable to Rollover Contributions, as of the severance date, or (3)
the period of time between the severance date and his reemployment
commencement date is less than the greater of five years or his period of
continuous service determined as of the severance date; and provided,
however, that solely for purposes of applying this paragraph, if a person
is on a maternity/paternity absence beyond the first anniversary of the
first day of such absence, his severance date shall be the second
anniversary of the first day of such maternity/paternity absence.
9
<PAGE> 23
ARTICLE III
ELIGIBILITY
3.1 Eligibility
Each Employee who was an Eligible Employee immediately prior to the effective
date of this amendment and restatement shall continue to be an Eligible
Employee. Each other Employee shall become an Eligible Employee as of the
Enrollment Date coinciding with or next following the date on which he becomes
an Employee.
3.2 Transfers of Employment
If a person is transferred directly from employment with an Employer or with a
Related Company in a capacity other than as an Employee to employment as an
Employee, he shall become an Eligible Employee as of the date he is so
transferred if prior to an Enrollment Date coinciding with or preceding such
transfer date he has met the eligibility requirements of Section 3.1 otherwise,
the eligibility of a person who is so transferred to elect to have Tax-Deferred
Contributions made to the Plan on his behalf shall be determined in accordance
with Section 3.1.
3.3 Reemployment
If a person who terminated employment with an Employer and all Related Companies
is reemployed as an Employee and if he had been an Eligible Employee prior to
his termination of employment, he shall again become an Eligible Employee on
the date he is reemployed. Otherwise, the eligibility of a person who terminated
employment with an Employer and all Related Companies and who is reemployed by
an Employer or a Related Company to elect to have Tax-Deferred Contributions
made to the Plan on his behalf shall be determined in accordance with Section
3.1 or 3.2.
3.4 Notification Concerning New Eligible Employees
Each Employer shall notify the Administrator as soon as practicable of
Employees becoming Eligible Employees as of any date.
3.5 Effect and Duration
Upon becoming an Eligible Employee, an Employee shall be entitled to elect to
have Tax-Deferred Contributions made to the Plan on his behalf and shall be
bound by all the terms and conditions of the Plan and the Trust Agreement. A
person shall continue as an Eligible Employee eligible to have Tax-Deferred
Contributions made to the Plan on his behalf only so long as he continues
10
<PAGE> 24
employment as an Employee.
11
<PAGE> 25
ARTICLE IV
TAX-DEFERRED CONTRIBUTIONS
4.1 Tax-Deferred Contributions
Effective as of the date he becomes an Eligible Employee, or any subsequent
Enrollment Date, each Eligible Employee may elect in writing in accordance with
rules prescribed by the Administrator to have Tax-Deferred Contributions made to
the Plan on his behalf by his Employer as hereinafter provided. An Eligible
Employee's written election shall include his authorization for his Employer to
reduce his Compensation and to make Tax-Deferred Contributions on his behalf and
his election as to the investment of his contributions in accordance with
Article X. Tax-Deferred Contributions on behalf of an Eligible Employee shall
commence with the first payment of Compensation made on or after the date on
which his election is effective.
4.2 Amount of Tax-Deferred Contributions
The amount of Tax-Deferred Contributions to be made to the Plan on behalf of an
Eligible Employee by his Employer shall be an integral percentage of his
Compensation of not less than one percent nor more than 15 percent. In the event
an Eligible Employee elects to have his Employer make Tax-Deferred Contributions
on his behalf, his Compensation shall be reduced for each payroll period by the
percentage he elects to have contributed on his behalf to the Plan in accordance
with the terms of his currently effective reduction authorization.
4.3 Changes in Reduction Authorization
An Eligible Employee may change the percentage of his future Compensation that
his Employer contributes on his behalf as Tax-Deferred Contributions at such
time or times during the Plan Year as the Administrator may prescribe by filing
an amended reduction authorization with his Employer such number of days prior
to the date such change is to become effective as the Administrator shall
prescribe. An Eligible Employee who changes his reduction authorization shall be
limited to selecting a percentage of his Compensation that is otherwise
permitted under Section 4.2. Tax-Deferred Contributions shall be made on behalf
of such Eligible Employee by his Employer pursuant to his amended reduction
authorization filed in accordance with this Section commencing with Compensation
paid to the Eligible Employee on or after the date such filing is effective,
until otherwise altered or terminated in accordance with the Plan.
4.4 Suspension of Tax-Deferred Contributions
12
<PAGE> 26
An Eligible Employee on whose behalf Tax-Deferred Contributions are being made
may have such contributions suspended at any time by giving such number of days
advance written notice to his Employer as the Administrator shall prescribe. Any
such voluntary suspension shall take effect commencing with Compensation paid to
such Eligible Employee on or after the expiration of the required notice period
and shall remain in effect until Tax-Deferred Contributions are resumed as
hereinafter set forth.
4.5 Resumption of Tax-Deferred Contributions
An Eligible Employee who has voluntarily suspended his Tax-Deferred
Contributions in accordance with Section 4.4 may have such contributions resumed
at such time or times during the Plan Year as the Administrator may prescribe,
by filing a new reduction authorization with his Employer such number of days
prior to the date as of which such contributions are to be resumed as the
Administrator shall prescribe.
4.6 Delivery of Tax-Deferred Contributions
As soon after the date an amount would otherwise be paid to an Employee as it
can reasonably be separated from Employer assets, each Employer shall cause to
be delivered to the Trustee in cash all Tax-Deferred Contributions attributable
to such amounts.
4.7 Vesting of Tax-Deferred Contributions
A Participant's vested interest in his Tax-Deferred Contributions Sub-Account
shall be at all times 100 percent.
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<PAGE> 27
ARTICLE V
AFTER-TAX AND ROLLOVER CONTRIBUTIONS
5.1 No After-Tax Contributions
There shall be no After-Tax Contributions made to the Plan.
5.2 Rollover Contributions
An Employee who was a participant in a plan qualified under Section 401 or 403
of the Code and who receives a cash distribution from such plan that he elects
either (i) to roll over immediately to a qualified retirement plan or (ii) to
roll over into a conduit IRA from which he receives a later cash distribution,
may elect to make a Rollover Contribution to the Plan if he is entitled under
Section 402(c)(1), Section 403(a)(4), or Section 408(d)(3)(A) of the Code to
roll over such distribution to another qualified retirement plan. The
Administrator may require an Employee to provide it with such information as it
deems necessary or desirable to show that he is entitled to roll over such
distribution to another qualified retirement plan. An Employee shall make a
Rollover Contribution to the Plan by delivering, or causing to be delivered, to
the Trustee the cash that constitutes the Rollover Contribution amount within 60
days of receipt of the distribution from the plan or from the conduit IRA in the
manner prescribed by the Administrator. If the Employee does not already have
an investment election on file with the Administrator, the Employee shall also
deliver to the Administrator his election as to the investment of his
contributions in accordance with Article X.
5.3 Vesting of Rollover Contributions
A Participant's vested interest in his Rollover Contributions Sub-Account shall
be at all times 100 percent.
14
<PAGE> 28
ARTICLE VI
EMPLOYER CONTRIBUTIONS
6.1 Contribution Period
The Contribution Period for Matching Contributions under the Plan shall be each
calendar quarter. The Contribution Period for Profit-Sharing Contributions under
the Plan shall be each Plan Year.
6.2 Profit-Sharing Contributions
Each Employer may, in its discretion, make a Profit-Sharing Contribution to the
Plan for the Contribution in an amount determined by the Employer. An Employer
may make a Profit-Sharing Contribution even though its current or accumulated
earnings and profits are otherwise insufficient.
6.3 Allocation of Profit-Sharing Contributions
Any Profit-Sharing Contribution made by an Employer for a Contribution Period
shall be allocated among its Employees during the Contribution Period who are
eligible to participate in the allocation of Profit-Sharing Contributions for
the Contribution Period, as determined under this Article. The allocable share
of each such Employee shall be in the ratio which his Compensation from the
Employer for the Contribution Period bears to the aggregate of such
Compensation for all such Employees. Notwithstanding any other provision of the
Plan to the contrary, Compensation with respect to any period ending prior to
the date on which an Employee first became eligible to participate in the
allocation of Profit-Sharing Contributions shall be disregarded in determining
the amount of the Employee's allocable share.
6.4 Matching Contributions
Each Employer shall make a Matching Contribution to the Plan for each
Contribution Period in an amount equal to 100 percent of the aggregate
Tax-Deferred Contributions for the Contribution Period made on behalf of its
Employees during the Contribution Period who are eligible to participate in the
allocation of Employer Contributions for the Contribution Period, as determined
under Section 6.8 up to, but not exceeding, the "match level" and 25% of such
aggregate Tax-Deferred Contributions made on behalf of such Employees for the
Contribution Period in excess of the "match level." For purposes of this Section
and Section 6.5, the "match level"
15
<PAGE> 29
means $1,000.
6.5 Allocation of Matching Contributions
Any Matching Contribution made by an Employer for the Contribution Period shall
be allocated among its Employees during the Contribution Period who are eligible
to participate in the allocation of Employer Contributions for the Contribution
Period, as determined under Section 6.8. The allocable share of each such
Employee shall be an amount equal to 100 percent of the Tax-Deferred
Contributions made on his behalf for the Contribution Period up to, but not
exceeding, the "match level" and 25% of such aggregate Tax-Deferred
Contributions made on behalf of such Employees for the Contribution Period in
excess of the "match level."
6.6 Verification of Amount of Employer Contributions by the Sponsor
The Sponsor shall verify the amount of Employer Contributions to be made by each
Employer in accordance with the provisions of the Plan. Notwithstanding any
other provision of the Plan to the contrary, the Sponsor shall determine the
portion of the Employer Contribution to be made by each Employer with respect to
an Employee who transfers from employment with one Employer as an Employee to
employment with another Employer as an Employee.
6.7 Payment of Employer Contributions
Employer Contributions made for a Contribution Period shall be paid in cash to
the Trustee within the period of time required under the Code in order for the
contribution to be deductible by the Employer in determining its Federal income
taxes for the Plan Year.
6.8 Eligibility to Participate in Allocation
Each Employee shall be eligible to participate in the allocation of Employer
Contributions in accordance with Section 6.2 beginning on the date he becomes,
or again becomes, an Eligible Employee in accordance with the provisions of
Article III.
6.9 Vesting of Employer Contributions
A Participants vested interest in his Employer Contributions Sub-Account shall
be determined in accordance with the following schedule:
16
<PAGE> 30
<TABLE>
<CAPTION>
Years of Vesting Service Vested Interest
------------------------ ----------------
<S> <C>
Less than 1 0%
1 but less than 2 50%
2 but less than 3 75%
3 or more 100%
</TABLE>
Notwithstanding the foregoing, if a Participant is employed by an Employer or a
Related Company on his Normal Retirement Date, the date he becomes physically or
mentally disabled such that he can no longer continue in the service of his
Employer and is eligible to receive a disability benefit under the terms of the
Social Security Act or the date he dies, his vested interest in his Employer
Contributions Sub-Account shall be 100 percent.
6.10 Election of Former Vesting Schedule
If she Sponsor adopts an amendment to the Plan that directly or indirectly
affects the computation of a Participant's vested interest in his Employer
Contributions Sub-Account, any Participant with three or more years of Vesting
Service shall have a right to have his vested interest in his Employer
Contributions Sub-Account continue to be determined under the vesting provisions
in effect prior to the amendment rather than under the new vesting provisions,
unless the vested interest of the Participant in his Employer Contributions
Sub-Account under the Plan as amended is not at any time less than such vested
interest determined without regard to the amendment. A Participant shall
exercise his right under this Section by giving written notice of his exercise
thereof to the Administrator within 60 days after the latest of (i) the date he
receives notice of the amendment from the Administrator, (ii) the effective date
of the amendment, or (iii) the date the amendment is adopted. Notwithstanding
the foregoing, a Participant's vested interest in his Employer Contributions
Sub-Account on the effective date of such an amendment shall not be less than
his vested interest in his Employer Contributions Sub-Account immediately prior
to the effective date of the amendment.
6.11 Forfeitures to Reduce Employer Contributions
Notwithstanding any other provision of the Plan to the contrary, the amount of
the Employer Contribution required under this Article for a Plan Year shall be
reduced by the amount of any forfeitures occurring during the Plan Year that are
not used to pay Plan expenses.
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<PAGE> 31
ARTICLE VII
LIMITATIONS ON CONTRIBUTIONS
7.1 Definitions
For purposes of this Article, the following terms have the following meanings:
(a) The "actual deferral percentage" with respect to an Eligible Employee
for a particular Plan Year means the ratio of the Tax-Deferred
Contributions made on his behalf for the Plan Year to his test
compensation for the Plan Year; provided, however, that contributions
made on a Participant's behalf for a Plan Year shall be included in
determining his actual deferral percentage for such Plan Year only if
the contributions are made to the Plan prior to the end of the 12-month
period immediately following the Plan Year to which the contributions
relate. The determination and treatment of the actual deferral
percentage amounts for any Participant shall satisfy such other
requirements as may be prescribed by the Secretary of the Treasury.
(b) The "aggregate limit" means the sum of (i) 125 percent of the greater of
the average contribution percentage for eligible participants other than
Highly Compensated Employees or the average actual deferral percentage
for Eligible Employees other than Highly Compensated Employees and (ii)
the lesser of 200 percent or two plus the lesser of such average
contribution percentage or average actual deferral percentage, or, if it
would result in a larger aggregate limit, the sum of (iii) 125 percent
of the lesser of the average contribution percentage for eligible
participants other than Highly Compensated Employees or the average
actual deferral percentage for Eligible Employees other than Highly
Compensated Employees and (iv) the lesser of 200 percent or two plus the
greater of such average contribution percentage or average actual
deferral percentage.
(c) The "annual addition" with respect to a Participant for a limitation
year means the sum of the Tax-Deferred Contributions and Employer
Contributions allocated to his Separate Account for the limitation year
(including any excess contributions that are distributed pursuant to
this Article), the employer contributions, employee contributions, and
forfeitures allocated to his accounts for the
18
<PAGE> 32
limitation year under any other qualified defined contribution plan
(whether or not terminated) maintained by an Employer or a Related
Company concurrently with the Plan, and amounts described in Sections
415(1)(2) and 419A(d)(2) of the Code allocated to his account for the
limitation year.
(d) The "Code Section 402(g) limit" means the dollar limit imposed by
Section 402(g)(1) of the Code or established by the Secretary of the
Treasury pursuant to Section 402(g)(5) of the Code in effect on January
1 of the calendar year in which an Eligible Employee's taxable year
begins.
(e) The "contribution percentage" with respect to an eligible participant
for a particular Plan Year means the ratio of the matching contributions
made to the Plan on his behalf for the Plan Year to his test
compensation for such Plan Year, except that, to the extent permitted by
regulations issued under Section 401(m) of the Code, the Sponsor may
elect to take into account in computing the numerator of each eligible
participant's contribution percentage the Tax-Deferred Contributions
made to the Plan on his behalf for the Plan Year; provided, however,
that any Tax-Deferred Contributions that were taken into account in
computing the numerator of an eligible participant's actual deferral.
percentage may not be taken into account in computing the numerator of
his contribution percentage; and provided, further, that contributions
made by or on a Participant's behalf for a Plan Year shall be included
in determining his contribution percentage for such Plan Year only if
the contributions are made to the Plan prior to the end of the 12-month
period immediately following the Plan Year to which the contributions
relate. The determination and treatment of the contribution percentage
amounts for any Participant shall satisfy such other requirements as may
be prescribed by the Secretary of the Treasury.
(f) An "elective contribution" means any employer contribution made to a
plan maintained by an Employer or any Related Company on behalf of a
Participant in lieu of cash compensation pursuant to his written
election to defer under any qualified CODA as defined in Section 401(k)
of the Code, any simplified employee pension cash or deferred
arrangement as described in Section 402(h)(1)(B) of the Code, any
eligible deferred compensation plan under Section 457 of the Code, or
any plan as described in Section 501(c)(18) of the Code, and any
contribution made on
19
<PAGE> 33
behalf of the Participant by an Employer or a Related Company for the
purchase of an annuity contract under Section 403(b) of the Code
pursuant to a salary reduction agreement.
(g) An "eligible participant" means any Employee who is eligible to have
Tax-Deferred Contributions made on his behalf (if Tax-Deferred
Contributions are taken into account in computing contribution
percentages) or to participate in the allocation of matching
contributions.
(h) A "family member" of an Employee means the Employee's spouse, his lineal
ascendants, his lineal descendants, and the spouses of such lineal
ascendants and descendants.
(i) A "limitation year" means the Plan Year.
(j) A "matching contribution" means any employer contribution allocated to
an Eligible employee's account under the plan or any other plan of an
Employer or a Related Company solely on account of elective
contributions made on his behalf or employee contributions made by him.
(k) The "test compensation" of an Eligible Employee for a Plan Year means
compensation as defined in Section 414(s) of the Code and regulations
issued thereunder, limited, however, to (1) $200,000 for Plan Years
beginning prior to January 1, 1994, or (2) $150,000 for Plan Years
beginning on or after January 1, 1994 (subject to adjustment annually as
provided in Section 401(a)(17)(B) and Section 415(d) of the Code;
provided, however, that the dollar increase in effect on January 1 of
any calendar year, if any, is effective for Plan Years beginning in such
calendar year) and further limited solely to test compensation of an
Employee attributable to periods of time when he is an Eligible
Employee. If the test compensation of a Participant is determined over a
period of time that contains fewer than 12 calendar months, then the
annual compensation limitation described above shall be adjusted with
respect to that Participant by multiplying the annual compensation
limitation in effect for the Plan Year by a fraction the numerator of
which is the number of full months in the period and the denominator of
which is 12; provided, however, that no proration is required for a
Participant who is covered under the Plan for less than one full Plan
Year if the formula for allocations is based on Compensation for a
period of at least 12 months. In determining the test
20
<PAGE> 34
compensation for purposes of applying the annual compensation
limitation described above, of a Participant who is a five-percent owner
or among the ten Highly Compensated Employees receiving the greatest
test compensation for the limitation year the test compensation of the
Participant's spouse and of his lineal descendants who have not attained
age 19 as of the close of the limitation year shall be included as test
compensation of the Participant for the limitation year. If as a result
of applying the family aggregation rule described in the preceding
sentence the annual compensation limitation would be exceeded, the
limitation shall be prorated among the affected family members in
proportion to each member's test compensation as determined prior to
application of the family aggregation rules.
7.2 COde Section 402(g) Limit
In no event shall the amount of the Tax-Deferred Contributions made on behalf of
an Eligible Employee for his taxable year, when aggregated with any elective
contributions made on behalf of the Eligible Employee under any other plan of an
Employer or a Related Company for his taxable year, exceed the Code Section
402(g) limit. In the event that the Administrator determines that the reduction
percentage elected by an Eligible Employee will result in his exceeding the Code
Section 402(g) limit, the Administrator may adjust the reduction authorization
of such Eligible Employee by reducing the percentage of his Tax-Deferred
Contributions to such smaller percentage that will result in the Code Section
402(g) limit not being exceeded. If the Administrator determines that the
Tax-Deferred Contributions made on behalf of an Eligible Employee would exceed
the Code Section 402(g) limit for his taxable year, the Tax-Deferred
Contributions for such Participant shall be automatically suspended for the
remainder, if any, of such taxable year.
If an Employer notifies the Administrator that the Code Section 402(g) limit has
nevertheless been exceeded by an Eligible Employee for his taxable year, the
Tax-Deferred Contributions that, when aggregated with elective contributions
made on behalf of the Eligible Employee under any other plan of an Employer or a
Related Company, would exceed the Code Section 402(g) limit, plus any income and
minus any losses attributable thereto, shall be distributed to the Eligible
Employee no later than the April 15 immediately following such taxable year. Any
Tax-Deferred Contributions that are distributed to an Eligible Employee in
accordance with this Section shall not be taken into
21
<PAGE> 35
account in computing the Eligible Employee's actual deferral percentage for the
Plan Year in which the Tax-Deferred Contributions were made, unless the Eligible
Employee is a Highly Compensated Employee. If an amount of Tax-Deferred
Contributions is distributed to a Participant in accordance with this Section,
matching contributions that are attributable solely to the distributed
Tax-Deferred Contributions, plus any income and minus any losses attributable
thereto, shall be forfeited by the Participant. Any such forfeited amounts shall
be treated as a forfeiture under the Plan in accordance with the provisions of
Article XIV as of the last day of the month in which the distribution of
Tax-Deferred Contributions pursuant to this Section occurs.
7.3 Limitation on Tax-Deferred Contributions of Highly Compensated
Employees
Notwithstanding any other provision of the plan to the contrary, the
Tax-Deferred Contributions made with respect to a Plan Year on behalf of
Eligible Employees who are Highly Compensated Employees may not result in an
average actual deferral percentage for such Eligible Employees that exceeds the
greater of:
(a) a percentage that is equal to 125 percent of the average
actual deferral percentage for all other Eligible Employees; or
(b) a percentage that is not more than 200 percent of the average actual
deferral percentage for all other Eligible Employees and that is not
more than two percentage points higher than the average actual deferral
percentage for all other Eligible Employees.
In order to assure that the limitation contained herein is not exceeded with
respect to a Plan Year, the Administrator is authorized to suspend completely
further Tax-Deferred Contributions on behalf of Highly Compensated Employees for
any remaining portion of a Plan Year or to adjust the projected actual deferral
percentages of Highly Compensated Employees by reducing their percentage
elections with respect to Tax-Deferred Contributions for any remaining portion
of a Plan Year to such smaller percentages that will result in the limitation
set forth above not being exceeded. In the event of any such suspension or
reduction, Highly Compensated Employees affected thereby shall be notified of
the reduction or suspension as soon as possible and shall be given an
opportunity to make a new Tax-Deferred Contribution election to be effective the
first day of the next following Plan Year. In the absence of such an election,
the election
22
<PAGE> 36
in effect immediately prior to the suspension or adjustment described
above shall be reinstated as of the first day of the next following Plan Year.
For purposes of applying the limitation contained in this Section, the
Tax-Deferred Contributions and test compensation of any Eligible Employee who is
a family member of another Eligible Employee who is a five percent owner or
among the ten Highly Compensated Employees receiving the greatest test
compensation for the Plan Year shall be aggregated with the Tax-Deferred
Contributions and test compensation of such other Eligible Employee, and such
family member shall not be considered an Eligible Employee for purposes of
determining the average actual deferral percentage for all other Eligible
Employees.
In determining the actual deferral percentage for any Eligible Employee who is a
Highly Compensated Employee for the Plan Year, elective contributions made to
his accounts under any other plan of an Employer or a Related Company shall be
treated as if all such contributions were made to the Plan; provided, however,
that if such a plan has a plan year different from the Plan Year, any such
contributions made to the Highly Compensated Employee's accounts under the plan
for the plan year ending with or within the same calendar year as the Plan Year
shall be treated as if such contributions were made to the Plan. Notwithstanding
the foregoing, such contributions shall not be treated as if they were made to
the Plan if regulations issued under Section 401(k) of the Code do not permit
such plan to be aggregated with the Plan.
If one or more plans of an Employer or Related Company are aggregated with the
Plan for purposes of satisfying the requirements of Section 401(a)(4) or
410(b) of the Code, then actual deferral percentages under the Plan shall be
calculated as if the Plan and such one or more other plans were a single plan.
For Plan Years beginning after December 31, 1991, plans may be aggregated to
satisfy Section 401(k) of the Code only if they have the same plan year.
The Administrator shall maintain records sufficient to show that the limitation
contained in this Section was not exceeded with respect to any Plan Year.
7.4 Distribution of Excess Tax-Deferred Contributions
Notwithstanding any other provision of the Plan to the contrary, in the event
that the limitation contained in Section 7.3 is exceeded in any Plan Year, the
Tax-Deferred Contributions made with respect to a Highly Compensated
23
<PAGE> 37
Employee that exceed the maximum amount permitted to be contributed to the Plan
on his behalf under Section 7.3, plus any income and minus any losses
attributable thereto, shall be distributed to the Highly Compensated Employee
prior to the end of the next succeeding Plan Year. If excess amounts are
attributable to Participants aggregated under the family aggregation rules
described in Section 7.3, the excess shall be allocated among family members in
proportion to the Tax-Deferred Contributions made with respect to each family
member. If such excess amounts are distributed more than 2 1/2 months after the
last day of the Plan Year for which the excess occurred, an excise tax may be
imposed under Section 4979 of the Code on the Employer maintaining the Plan with
respect to such amounts.
The maximum amount permitted to be contributed to the Plan on a Highly
Compensated Employee's behalf under Section 7.3 shall be determined by reducing
Tax-Deferred contributions made on behalf of Highly Compensated Employees in
order of their actual deferral percentages beginning with the highest of such
percentages.
If an amount of Tax-Deferred Contributions is distributed to a Participant in
accordance with this Section, matching contributions that are attributable
solely to the distributed Tax-Deferred Contributions, plus any income and minus
any losses attributable thereto, shall be forfeited by the Participant. Any such
forfeited amounts shall be treated as a forfeiture under the Plan in accordance
with the provisions of Article XIV as of the last day of the month in which the
distribution of Tax-Deferred Contributions pursuant to this Section occurs.
7.5 Limitation on Matching Contributions of Highly Compensated Employees
Notwithstanding any other provision of the Plan to the contrary, the matching
contributions made with respect to a Plan Year on behalf of eligible
participants who are Highly Compensated Employees may not result in an average
contribution percentage for such eligible participants that exceeds the greater
of:
(a) a percentage that is equal to 125 percent of the average contribution
percentage for all other eligible participants; or
(b) a percentage that is not more than 200 percent of the average
contribution percentage for all other eligible participants and that is
not more than two percentage points higher than the average
24
<PAGE> 38
contribution percentage for all other eligible participants.
For purposes of applying the limitation contained in this Section, the matching
contributions, Tax-Deferred Contributions to the extent that such Tax-Deferred
Contributions are taken into account in computing contribution percentages and
test compensation of any eligible participant who is a family member of another
eligible participant who is a five percent owner or among the ten Highly
Compensated Employees receiving the greatest test compensation for the Plan
Year shall be aggregated with the matching contributions, Tax-Deferred
Contributions, and test compensation of such other eligible participant, and
such family member shall not be considered an eligible participant for purposes
of determining the average contribution percentage for all other eligible
participants.
In determining the contribution percentage for any eligible participant who is a
Highly Compensated Employee for the Plan Year; matching contributions, employee
contributions, and elective contributions (to the extent that elective
contributions are taken into account in computing contribution percentages) made
to his accounts under any other plan of an Employer or a Related Company shall
be treated as if all such contributions were made to the Plan; provided, however
that if such a plan has a plan year different from the Plan Year, any such
contributions made to the Highly Compensated Employee's accounts under the plan
for the plan year ending with or within the same calendar year as the Plan Year
shall be treated as if such contributions were made to the Plan. Notwithstanding
the foregoing, such contributions shall not be treated as if they were made to
the Plan if regulations issued under Section 401(m) of the Code do not permit
such plan to be aggregated with the Plan.
If one or more plans of an Employer or a Related Company are aggregated with the
Plan for purposes of satisfying the requirements of Section 401(a)(4) or 410(b)
of the Code, the contribution percentages under the Plan shall be calculated as
if the Plan and such one or more other plans were a single plan. For Plan Years
beginning after December 31, 1989, plans may be aggregated to satisfy Section
401(m) of the Code only if they have the same plan year.
The Administrator shall maintain records sufficient to show that the limitation
contained in this Section was not exceeded with respect to any Plan Year and the
amount of the elective contributions taken into account in computing
contribution percentages for any Plan Year.
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7.6 Forfeiture or Distribution of Excess Contributions
Notwithstanding any other provision of the Plan to the contrary, in the event
that the limitation contained in Section 7.5 is exceeded in any Plan Year, the
matching contributions made on behalf of a Highly Compensated Employee that
exceed the maximum amount permitted to be contributed to the Plan on behalf of
such Highly Compensated Employee under Section 7.5, plus any income and minus
any losses attributable thereto, shall be forfeited, to the extent forfeitable,
or distributed to the Participant prior to the end of the next succeeding Plan
Year as hereinafter provided. If excess amounts are attributable to participants
aggregated under the family aggregation rules described in Section 7.5, the
excess shall be allocated among family members in proportion to the matching
contributions made with respect to each family member. If such excess amounts
are distributed more than 2 1/2 months after the last day of the Plan Year for
which the excess occurred, an excise tax may be imposed under Section 4979 of
the Code on the Employer maintaining the Plan with respect to such amounts.
The maximum amount permitted to be contributed to the Plan on behalf of a Highly
Compensated Employee under Section 7.5 shall be determined by reducing matching
contributions made on behalf of Highly Compensated Employees in order of their
contribution percentages beginning with the highest of such percentages.
Any amounts forfeited with respect to a Participant pursuant to this Section
shall be treated as a forfeiture under the Plan in accordance with the
provisions of Article XIV as of the last day of the month in which the
distribution of contributions pursuant to this Section occurs. Excess matching
contributions shall be distributable to the extent the Participant has a vested
interest in his Employer Contributions Sub-Account that is attributable to
matching contributions. The determination of the amount of excess matching
contributions shall be made after application of Section 7.4, if applicable.
7.7 Multiple Use Limitation
Notwithstanding any other provision of the Plan to the contrary, the following
multiple use limitation as required under Section 401(m) of the Code shall
apply the sum of the average actual deferral percentage for Eligible Employees
who are Highly Compensated Employees and the average contribution percentage for
eligible participants who are Highly Compensated Employees may not exceed the
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aggregate limit. In the event that, after satisfaction of Section 7.4 and
Section 7.6, it is determined contributions under the Plan fail to satisfy the
multiple use limitation contained herein, the multiple use limitation shall be
satisfied by further reducing the actual deferral percentages of Eligible
Employees who are Highly Compensated Employees (beginning with the highest such
percentage) to the extent necessary to eliminate the excess, with such further
reductions to be treated as excess Tax-Deferred Contributions and disposed of as
provided in Section 7.4, or in an alternative manner, consistently applied, that
may be permitted by regulations issued under Section 401(m) of the Code.
7.8 Determination of Income or Loss
The income or loss attributable to excess contributions that are distributed
pursuant to this Article shall be determined for the preceding Plan Year under
the method otherwise used for allocating income or loss to Participant's
Separate Accounts.
7.9 Code Section 415 Limitations on Crediting of Contributions and
Forfeitures
Notwithstanding any other provision of the Plan to the contrary, the
annual addition with respect to a Participant for a limitation year shall in no
event exceed the lesser of (i) the greater of $30,000 or 25 percent of the
defined benefit dollar limitation set forth in Section 415(b)(1) of the Code
in effect for the limitation year or (ii) 25 percent of the Participant's
compensation, as defined in Section 415(c)(3) of the Code and regulations issued
thereunder, for the limitation year. If the annual addition to the Separate
Account of a Participant in any limitation year would otherwise exceed the
amount that may be applied for his benefit under the limitation contained in
this Section, the limitation shall be satisfied by reducing contributions made
on behalf of the Participant to the extent necessary in the following order:
Tax-Deferred Contributions made on the Participant's behalf for the
limitation year that have not been matched, if any, shall be reduced.
Tax-Deferred Contributions made on the Participant's behalf for the
limitation year that have been matched and the matching contributions
attributable thereto, if any, shall be reduced pro rata.
The amount of any reduction of Tax-Deferred Contributions
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(plus any income attributable thereto) shall be returned to the Participant. For
purposes of this Article, excesses shall result only from the allocation of
forfeitures, a reasonable error in estimating a Participant's annual
compensation (as defined in Section 415(c)(3) of the Code and regulations
issued thereunder), a reasonable error in determining the amount of Tax-Deferred
Contributions that may be made with respect to any Participant under the limits
of Section 415 of the Code, or other limited facts and circumstances that
justify the availability of the provisions set forth above.
7.10 Coverage Under Other Qualified Defined Contribution Plan
If a Participant is covered by any other qualified defined contribution plan
(whether or not terminated) maintained by an Employer or a Related Company
concurrently with the Plan, and if the annual addition for the limitation year
would otherwise exceed the amount that may be applied for the Participant's
benefit under the limitation contained in Section 7.9, such excess shall be
reduced first by returning the employee contributions made by the Participant
for the limitation year under all of the defined contribution plans other than
the Plan and the income attributable thereto to the extent necessary. If the
limitation contained in Section 7.9 is still not satisfied after returning all
of the employee contributions made by the Participant under all such other
plans, the procedure set forth in Section 7.9 shall be invoked to eliminate any
such excess. If the limitation contained in Section 7.9 is still not satisfied
after invocation of the procedure set forth in Section 7.9, the portion of the
employer contributions and of forfeitures for the limitation year under all such
other plans that has been allocated to the Participant thereunder, but which
exceeds the limitation set forth in Section 7.9, shall be deemed a forfeiture
for the limitation year and shall be disposed of as provided in such other
plans; provided, however, that if the Participant is covered by a money purchase
pension plan, the forfeiture shall be effected first under any other defined
contribution plan that is not a money purchase pension plan and, if the
limitation is still not satisfied, then under such money purchase pension plan.
7.11 Coverage Under Qualified Defined Benefit Plan
If a Participant in the Plan is also covered by a qualified defined benefit plan
(whether or not terminated) maintained by an Employer or a Related Company, in
no event shall the sum of the defined benefit plan fraction (as defined in
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Section 415(e)(2) of the Code) and the defined contribution plan fraction (as
defined in Section 415(e)(3) of the Code) exceed 1.0 in any limitation year.
If, before October 3, 1973, the Participant was an active participant in a
qualified defined benefit plan maintained by an Employer or a Related Company
and otherwise satisfies the requirements of Section 2004(d)(2) of ERISA, then
for purposes of applying this Section, the defined benefit plan fraction shall
not exceed 1.0. In the event the special limitation contained in this Section is
exceeded, the benefits otherwise payable to the Participant under any such
qualified defined benefit plan shall be reduced to the extent necessary to meet
such limitation.
7.12 Scope of Limitations
The limitations contained in Sections 7.9, 7.10, and 7.11 shall be applicable
only with respect to benefits provided pursuant to defined contribution plans
and defined benefit plans described in Section 415(k) of the Code.
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ARTICLE VIII
TRUST FUNDS AND SEPARATE ACCOUNTS
8.1 General Rend
The Trustee shall establish a General Fund as required to hold and administer
any assets of the Trust that are not allocated among the Investment Funds as
provided in the Plan or the Trust Agreement. The General Fund shall be held and
administered as a separate common trust fund. The interest of each Participant
or Beneficiary under the Plan in the General Fund shall be an undivided
interest.
8.2 Investment Funds
The Sponsor shall determine the number and type of Investment Funds and select
the investments for such Investment Funds. The Sponsor shall communicate the
same and any changes therein in writing to the Administrator and the Trustee.
Each Investment Fund shall be held and administered as a separate common trust
fund. The interest of each Participant or Beneficiary under the Plan in any
Investment Fund shall be an undivided interest.
8.3 Loan Investment Fund
If a loan from the Plan to a Participant is approved in accordance with the
provisions of Article XII, the Sponsor shall direct the establishment and
maintenance of a loan Investment Fund in the Participant's name. The assets of
the loan Investment Fund shall be held as a separate trust fund. A Participant's
loan Investment Fund shall be invested in the note reflecting the loan that is
executed by the Participant in accordance with the provisions of Article XII.
Notwithstanding any other provision of the Plan to the contrary, income received
with respect to a Participant's loan Investment Fund shall be allocated and the
loan Investment Fund shall be administered as provided in Article XII.
8.4 Appointment of Investment Managers
As provided in the Trust Agreement, the Sponsor may appoint one or more
investment managers (as defined in Section 3(38) of ERISA) with respect to any
portion of any Trust Fund.
8.5 Income on Trust
Any dividends, interest, distributions, or other income
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received by the Trustee with respect to any Trust Fund established hereunder
shall be allocated by the Trustee to the Trust Fund for which the income was
received.
8.6 Separate Accounts
As of the first date a contribution is made by or on behalf of an Employee,
there shall be established a Separate Account in his name reflecting his
interest in the Trust. Each Separate Account shall be maintained and
administered for each Participant and Beneficiary in accordance with the
provisions of the Plan. The balance of each Separate Account shall be the
balance of the account after all credits and charges thereto, for and as of such
date, have been made as provided herein.
8.7 Sub-Accounts
A Participant's Separate Account shall be divided into individual Sub-Accounts
reflecting the portion of the Participant's Separate Account that is derived
from Tax-Deferred Contributions, Rollover Contributions, or Employer
Contributions. Each Sub-Account shall reflect separately contributions allocated
to each Trust Fund established hereunder and the earnings and losses
attributable thereto. Such other Sub-Accounts may be established as are
necessary or appropriate to reflect a Participant's interest in the Trust.
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ARTICLE IX
LIFE INSURANCE CONTRACTS
9.1 No Life Insurance Contracts
There shall be no life insurance contracts purchased under the Plan.
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ARTICLE X
DEPOSIT AND INVESTMENT OF CONTRIBUTIONS
10.1 Future Contribution Investment Elections
Each Eligible Employee shall make an investment election in the manner and form
prescribed by the Administrator directing the manner in which his Tax-Deferred
Contributions, Rollover Contributions, and Employer Contributions shall be
invested. An Eligible Employee's investment election shall specify the
percentage, in the percentage increments prescribed by the Administrator, of
such contributions that shall be allocated to one or more of the Investment
Funds with the sum of such percentages equaling 100 percent. The investment
election by a Participant shall remain in effect until his entire interest under
the Plan is distributed or forfeited in accordance with the provisions of the
Plan or until he files a change of investment election with the Administrator,
in such form as the Administrator shall prescribe. A Participant's change of
investment election may be made effective as of the date or dates designated by
the Administrator.
10.2 Deposit of Contributions
All Tax-Deferred Contributions, Rollover Contributions, and Employer
Contributions shall be deposited in the Trust and allocated among the Investment
Funds in accordance with the Participant's currently effective investment
election. If no investment election is on file with the Administrator at the
time contributions are to be deposited to a Participant's Separate Account, the
Participant shall be notified and an investment election form shall be provided
to him. Until such Participant shall make an effective election under this
Section, his contributions shall be allocated among the Investment Funds as
directed by the Administrator.
10.3 Election to Transfer Between Funds
A Participant may elect to transfer investments from any Investment Fund to any
other Investment Fund. The Participant's transfer election shall specify either
(i) a percentage, in the percentage increments prescribed by the Administrator,
of the amount eligible for transfer, which percentage may not exceed 100
percent, or (ii) a dollar amount that is to be transferred. Subject to any
restrictions pertaining to a particular Investment Fund, a Participant's
transfer election may be made effective as of the date or dates designated by
the Administrator.
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10.4 404(c) Plan
The Plan is intended to constitute a plan described in Section 404(c) of ERISA
and regulations issued thereunder. The fiduciaries of the Plan may be relieved
of liability for any losses that are the direct and necessary result of
investment instructions given by a Participant, his Beneficiary, or an alternate
payee under a qualified domestic relations order.
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ARTICLE XI
CREDITING AND VALUING SEPARATE ACCOUNTS
11.1 Crediting Separate Accounts
All contributions made under the provisions of the Plan shall be credited to
Separate Accounts in the Trust Funds by the Trustee, in accordance with
procedures established in writing by the Administrator, either when received or
on the succeeding Valuation Date after valuation of the Trust Fund has been
completed for such Valuation Date as provided in Section 11.2, as shall be
determined by the Administrator.
11.2 Valuing Separate Accounts
Separate Accounts in the Trust Funds shall be valued by the Trustee on the
Valuation Date, in accordance with procedures established in writing by the
Administrator, either in the manner adopted by the Trustee and approved by the
Administrator or in the manner set forth in Section 11.3 as Plan valuation
procedures, as determined by o the Administrator.
11.3 Plan Valuation Procedures
With respect to the Trust Funds, the Administrator may determine that the
following valuation procedures shall be applied. As of each Valuation Date
hereunder, the portion of any Separate Accounts in a Trust Fund shall be
adjusted to reflect any increase or decrease in the value of the Trust Fund for
the period of time occurring since the immediately preceding Valuation Date for
the Trust Fund (the "valuation period") in the following manner:
(a) First, the value of the Trust Fund shall be, determined by valuing all
of the assets of the Trust Fund at fair market value.
(b) Next, the net increase or decrease in the value of the Trust Fund
attributable to net income and all profits and losses, realized and
unrealized, during the valuation period shall be determined on the basis
of the valuation under paragraph (a) taking into account appropriate
adjustments for contributions, loan payments, and transfers to and
distributions, withdrawals, loans, and transfers from such Trust Fund
during the valuation period.
(c) Finally, the net increase or decrease in the value of the Trust Fund
shall be allocated among Separate
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Accounts in the Trust Fund in the ratio of the balance of the portion of
such Separate Account in the Trust Fund as of the preceding Valuation
Date less any distributions, withdrawals, loans, and transfers from such
Separate Account balance in the Trust Fund since the Valuation Date to
the aggregate balances of the portions of all Separate Accounts in the
Trust Fund similarly adjusted, and each Separate Account in the Trust
Fund shall be credited or charged with the amount of its allocated
share. Notwithstanding the foregoing, the Administrator may adopt such
accounting procedures as it considers appropriate and equitable to
establish a proportionate crediting of net increase or decrease in the
value of the Trust Fund for contributions, loan payments, and transfers
to and distributions, withdrawals, loans, and transfers from such Trust
Fund made by or on behalf of a Participant during the valuation period.
11.4 Finality of Determinations
The Trustee shall have exclusive responsibility for determining the balance of
each Separate Account maintained hereunder. The Trustee's determinations thereof
shall be conclusive upon all interested parties.
11.5 Notification
Within a reasonable period of time after the end of each Plan Year, the
Administrator shall notify each Participant and Beneficiary of the balances of
his Separate Account and Sub-Accounts as of the last day of such Plan Year.
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ARTICLE XII
LOANS
12.1 Application for Loan
A Participant who is a party in interest may make written application to the
Administrator for a loan from Separate Account. Loans shall be made to
Participants in accordance with written rules prescribed by the Administrator
which are set forth in an Addendum to the Plan.
As collateral for any loan granted hereunder, the Participant shall grant to the
Plan a security interest in his vested interest under the Plan equal to the
amount of the loans; provided, however, that in no event may the security
interest exceed 50 percent of the Participant's vested interest under the Plan
determined as of the date as of which the loan is originated in accordance
with Plan provisions. In the case of a Participant who is an active employee,
the Participant also shall enter into an agreement to repay the loan by payroll
withholding. No loan in excess of 50 percent of the Participant's vested
interest under the Plan shall be made from the Plan. Loans shall not be made
available to Highly Compensated. Employees in an amount greater than the amount
made available to other employees.
A loan shall not be granted unless the Participant consents in writing to the
charging of his Separate Account in accordance with the provisions of Section
12.4 for unpaid principal and interest amounts in the event the loan is declared
to be in default.
12.2 Reduction of Account Upon Distribution
Notwithstanding any other provision of the Plan, the amount of a Participant's
Separate Account that is distributable to the Participant or his Beneficiary
under Article XIII or XV shall be reduced by the portion of his vested interest
that is held by the Plan as security for any loan outstanding to the
Participant, provided that the reduction is used to repay the loan. If
distribution is made because of the Participant's death prior to the
commencement of distribution of his Separate Account and less than 100 percent
of the Participant's vested interest in his Separate Account (determined
without regard to the preceding sentence) is payable to his surviving spouse,
then the balance of the Participant's vested interest in his Separate Account
shall be adjusted by reducing the vested account balance by the amount of the
security used to repay the
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loan, as provided in the preceding sentence, prior to determining the amount of
the benefit payable to their surviving spouse.
12.3 Requirements to Prevent a Taxable Distribution
Notwithstanding any other provision of the Plan to the contrary, the following
terms and conditions shall apply to any loan made to a Participant under this
Article:
(a) The interest rate on any loan to a Participant shall be a reasonable
interest rate commensurate with current interest rates charged for
loans made under similar circumstances by persons in the business of
lending money.
(b) The amount of any loan to a Participant (when added to the outstanding
balance of all other loans to the Participant from the Plan or any other
plan maintained by an Employer or a Related Company) shall not exceed
the lesser of:
(i) $50,000, reduced by the excess, if any, of the highest
outstanding balance of any other loan to the Participant from
the Plan or any other plan maintained by an Employer or a
Related Company during the preceding 12-month period over the
outstanding balance of such loans on the date a loan is made
hereunder; or
(ii) 50 percent of the vested portions of the Participant's Separate
Account and his vested interest under all other plans maintained
by an Employer or a Related Company.
(c) The term of any loan to a Participant shall be no greater than five
years, except in the case of a loan used to acquire any dwelling unit
which within a reasonable period of time is to be used (determined at
the time the loan is made) as a principal residence of the Participant.
(d) Except as otherwise permitted under Treasury regulations, substantially
level amortization shall be required over the term of the loan with
payments made not less frequently than quarterly.
12.4 Administration of Loan Investment Fund
Upon approval of a loan to a Participant, the Administrator shall direct the
Trustee to transfer an amount equal to the
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loan amount from the Investment Funds in which it is invested, as directed by
the Administrator, to the loan Investment Fund established by the Trustee in
the Participant's name. Any loan approved by the Administrator shall be made to
the Participant out of the Participant's loan Investment Fund. All principal and
interest paid by the Participant on a loan made under this Article shall be
deposited to his Separate Account and shall be allocated upon receipt among the
Investment Funds in accordance with the Participant's currently effective
investment election. The balance of the Participant's loan Investment Fund shall
be decreased by the amount of principal payments and the loan Investment Fund
shall be terminated when the loan has been repaid in full.
12.5 Default
If a Participant fails to make or cause to be made, any payment required under
the terms of the loan within 90 days following the date on which such payment
shall become due or there is an outstanding principal balance existing on a
loan after the last scheduled repayment date, the Administrator may direct the
Trustee to declare the loan to be in default, and the entire unpaid balance of
such loan, together with accrued interest, shall be immediately due and payable.
In any such event, if such balance and interest thereon is not then paid, the
Trustee shall charge the Separate Account of the borrower with the amount of
such balance and interest as of the earliest date a distribution may be made
from the Plan to the borrower without adversely affecting the tax
qualification of the Plan or of the cash or deferred arrangement.
12.6 Loans Granted Prior to October 19, 1989
Notwithstanding any other provision of this Article to the contrary, any loan
made under the provisions of the Plan as in effect prior to October 19, 1989
shall remain outstanding until repaid in accordance with its terms or the
otherwise applicable Plan provisions.
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ARTICLE XIII
WITHDRAWALS WHILE EMPLOYED
13.1 Withdrawals of Rollover Contributions
A Participant who is employed by an Employer or a Related Company and has
attained age 59 1/2 may elect in writing, subject to the limitations and
conditions prescribed in Section 13.4, to make a cash withdrawal from his
Rollover Contributions Sub-Account.
13.2 Withdrawals of Employer Contributions
A Participant who is employed by an Employer or a Related Company and has
attained age 59 1/2 or is determined by the Administrator to have incurred a
hardship as defined in Section 13.6 may elect in writing, subject to the
limitations and conditions prescribed in Section 13.4 or 13.6, as appropriate,
to make a cash withdrawal from his vested interest in his Employer Contributions
Sub-Account. The maximum amount that a Participant may withdraw pursuant to this
Section shall be an amount ("X") determined by the following formula:
X = P (AB + (R x D)) - (R x D)
For purposes of the formula:
P = The Participant's vested interest in his Employer
Contributions Sub-Account on the date distribution is to be
made.
AB= The balance of the Participant's Employer Contributions
Sub-Account as of the Valuation Date immediately preceding
the date distribution is to be made.
R = The ratio of (i) the balance of the Participant's Employer
Contributions Sub-Account as of the Valuation Date immediately
preceding the date distribution is to be made (ii) the balance
of the Participant's Employer Contribution Sub-Account after
distribution is made.
D = The amount of all prior withdrawals from the Participant's
Employer Contributions Sub-Account made pursuant to this
Section.
13.3 Withdrawals of Tax-Deferred Contributions
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A Participant who is employed by an Employer or a Related Company and who has
attained age 59 1/2 or is determined by the Administrator to have incurred a
hardship as defined in Section 13.6 may elect in writing, subject to the
limitations and conditions prescribed in Section 13.4 or 13.6, as appropriate,
to make a cash withdrawal from his Tax-Deferred Contributions Sub-Account. The
maximum amount that a Participant may withdraw pursuant to this Section because
of a hardship is the balance of his Tax-Deferred Contributions Sub-Account,
exclusive of any earnings credited to such Sub-Account as of a date that is
after December 31, 1988.
13.4 Limitations on withdrawals Other than Hardship Withdrawals
Withdrawals made pursuant to this Article; other than hardship withdrawals,
shall be subject to the following conditions and limitations:
A Participant must file a written withdrawal application with the
Administrator such number of days prior to the date as of which it is to
be effective as the Administrator shall prescribe.
Withdrawals may be made effective as soon as reasonably practicable
following the Administrator's receipt of the Participant's directions.
13.5 Order of Withdrawal from a Participant's Sub-Accounts
Distribution of a withdrawal amount shall be made from a Participant's
Sub-Accounts, to the extent necessary, in the following order:
The balance of the Participant's Rollover Contributions Sub-Account, if
any, shall be distributed.
The balanceof the Participant's Employer Contributions Sub-Account shall
be distributed.
The balance of the Participant's Tax-Deferred Contributions Sub-Account
shall be distributed, but if the distribution is because of hardship,
only to the extent permitted under Section 13.3.
If the Sub-Account from which a Participant is receiving a withdrawal is
invested in more than one Investment Fund, the withdrawal shall be charged
against the Investment Funds as
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directed by the Administrator.
13.6 Conditions and Limitations on Hardship Withdrawals
A Participant must file a written application for a hardship withdrawal with the
Administrator such number of days prior to the date as of which it is to be
effective as the Administrator may prescribe. Hardship withdrawals may be made
effective as soon as reasonably practicable following the Administrator's
receipt of the Participant's directions. The Administrator shall grant a
hardship withdrawal only if it determines that the withdrawal is necessary to
meet an immediate and heavy financial need of the Participant. An immediate and
heavy financial need of the Participant means a financial need on account of:
(a) expenses previously incurred by or necessary to obtain for the
Participant, the Participant's spouse, or any dependent of the
Participant (as defined in Section 152 of the Code) medical care
described in Section 213 (d) of the Code;
(b) costs directly related to the purchase (excluding mortgage payments) of
a principal residence for the Participant;
(c) payment of tuition, related educational fees, and room and board
expenses for the next 12 months of post-secondary education for the
Participant, the Participant's spouse, or any dependent of the
Participant; or
(d) the need to prevent the eviction of the Participant from his principal
residence or foreclosure on the mortgage of the Participant's principal
residence.
A withdrawal shall be deemed to be necessary to satisfy an immediate and heavy
financial need of a Participant only if all of the following requirements are
satisfied:
The withdrawal is not in excess of the amount of the immediate and
heavy financial need of the Participant.
The Participant has obtained all distributions, other than hardship
distributions, and all non-taxable loans currently available under all
plans maintained by an Employer or any Related Company.
The Participant's Tax-Deferred Contributions and the Participant's
elective tax-deferred contributions and employee after-tax contributions
under all other
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tax-qualified plans maintained by an Employer or any Related Company
shall be suspended for at least twelve months after his receipt of the
withdrawal.
The Participant shall not make Tax-Deferred Contributions or elective
tax-deferred contributions under any other tax-qualified plan maintained
by an Employer or any Related Company for the Participant's taxable year
immediately following the taxable year of the withdrawal in excess of
the applicable limit under Section 402 (g) of the Code for such next
taxable year less the amount of the Participant's Tax-Deferred
Contributions and elective tax-deferred contributions under any other
plan maintained by an Employer or any Related Company for the taxable
year of the withdrawal.
The minimum hardship withdrawal that a participant may make is $1,000. The
amount of a hardship withdrawal shall include any amounts necessary to pay any
Federal, state or local income taxes or penalties reasonably anticipated to
result from the distribution. A Participant shall not fail to be treated as an
Eligible Employee for purposes of applying the limitations contained in Article
VIII of the Plan merely because his Tax-Deferred Contributions are suspended in
accordance with this Section.
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ARTICLE XIV
TERMINATION OF EMPLOYMENT AND SETTLEMENT DATE
14.1 Termination of Employment and Settlement Date
A Participant's Settlement Date shall occur on the date he terminates employment
with an Employer and all Related Companies because of death, disability,
retirement, or other termination of employment. Written notice of a
Participant's Settlement Date shall be given by the Administrator to the
Trustee.
14.2 Separate Accounting for Non-Vested Amounts
If as of a Participant's Settlement Date the Participant's vested interest in
his Employer Contributions Sub-Account is less than 100 percent, that portion of
his Employer Contributions Sub-Account that is not vested shall be accounted for
separately from the vested portion and shall be disposed of as provided in
Section 14.3. If prior to his Settlement Date such a Participant made a
withdrawal in accordance with the provisions of Article XIII, the vested portion
of his Employer Contributions Sub-Account shall be equal to the maximum
withdrawable amount as determined under Article XIII attributable to Employer
Contributions that may be taken into account to satisfy the limitations on
contributions for Highly Compensated Employees contained in Article VII.
14.3 Disposition of Non-Vested Amounts
That portion of a Participant's Employer Contributions Sub-Account that is not
vested upon the occurrence of his Settlement Date shall be disposed of as
follows:
(a) If the Participant has no vested interest in his Separate Account upon
the occurrence of his Settlement Date or the aggregate value as of the
date of distribution does not exceed $3,500 resulting in the
Participant's receipt of a single sum payment of his vested interest in
his Separate Account, the non-vested balance remaining in the
Participant's Employer Contributions Sub-Account will be forfeited and
his Separate Account closed as of (i) the Participant's Settlement
Date, if the Participant has no vested interest in his Separate Account,
or (ii) the date the single sum payment occurs.
(b) If the aggregate value of the Participant's vested interest in his
Separate Account exceeds $3,500 and
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the Participant is eligible for and consents in writing to a single sum
payment of his vested interest in his Separate Account, the non-vested
balance remaining in the Participant's Employer Contributions
Sub-Account will be forfeited and his Separate Account closed as of the
date the single sum payment occurs, provided that such distribution
occurs prior to the end of the second Plan Year beginning on or after
the Participant's Settlement Date.
(c) If neither paragraph (a) nor paragraph (b) is applicable, the non-vested
portion of the Participant's Employer Contributions Sub-Account will
continue to be held in such Sub-Account and will not be forfeited until
the end of the five-year period beginning on his Settlement Date.
Whenever the non-vested portion of a Participant's Employer Contributions
Sub-Account is forfeited under the provisions of the Plan with respect to a Plan
Year, the amount of such forfeiture, as of the last day of the Plan Year, shall
be applied against the Employer Contribution obligations for the Plan Year of
the Employer for which the Participant last performed services as an Employee.
Notwithstanding the foregoing, however, should the amount of all such
forfeitures for any Plan Year with respect to any Employer exceed the amount of
such Employer's Employer Contribution obligation for the Plan Year, the excess
amount of such forfeitures shall be held unallocated in a suspense account
established with respect to the Employer and shall for all Plan purposes be
applied against the Employer's Employer Contribution obligations for the
following Plan Year.
14.4 Recrediting of Forfeited Amounts
A former Participant who forfeited the non-vested portion of his Employer
Contributions Sub-Account in accordance with the provisions of Section 14.3 and
who is reemployed by an Employer or a Related Company shall have such forfeited
amounts recredited to a new Separate Account in his name, without adjustment for
interim gains or losses experienced by the Trust, if:
(a) he returns to employment with an Employer or a Related Company before
the end of the five-year period beginning on the later of his Settlement
Date or the date he received distribution of his vested interest in his
Separate Account;
(b) he resumes employment covered under the Plan before
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the end of the five-year period beginning on the date he is reemployed;
and
(c) if he received distribution of his vested interest in his Separate
Account, he repays to the Plan the full amount of such distribution
before the end of the five-year period beginning on the date he is
reemployed.
Funds needed in any Plan Year to recredit the Separate Account of a Participant
with the amounts of prior forfeitures in accordance with the preceding sentence
shall come first from forfeitures that arise during such Plan Year, and then
from Trust income earned in such Plan Year, with each Trust Fund being charged
with the amount of such income proportionately, unless his Employer chooses to
make an additional Employer Contribution, and shall finally be provided by his
Employer by way of a separate Employer Contribution.
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ARTICLE XV
DISTRIBUTIONS
15.1 Distributions to Participants
A Participant whose Settlement Date occurs shall receive distribution of his
vested interest in his Separate Account in the form provided under Article XVI
beginning as soon as reasonably practicable following his Settlement Date or
the date his application for distribution is filed with the Administrator, if
later. In addition, a Participant who continues in employment with an Employer
or a Related Company after his Normal Retirement Date may elect to receive
distribution of all or any portion of his Separate Account in the form provided
under Article XVI at any time following his Normal Retirement Date.
15.2 Distributions to Beneficiaries
If a Participant dies prior to the date distribution of his vested interest in
his Separate Account begins under this Article, his Beneficiary shall receive
distribution of the Participant's vested interest in his Separate Account in the
form provided under Article XVI beginning as soon as reasonably practicable
following the date the Beneficiary's application for distribution is filed with
the Administrator. Unless distribution is to be made over the life or over
a period certain not greater than the life expectancy of the Beneficiary,
distribution of the Participant's entire vested interest shall be made to the
Beneficiary no later than the end of the fifth calendar year beginning after the
Participant's death. If distribution is to be made over the life or over a
period certain no greater than the life expectancy of the Beneficiary,
distribution shall commence no later than:
(a) If the Beneficiary is not the Participant's spouse, the end of the first
calendar year beginning after the Participant's death; or
(b) If the Beneficiary is the Participant's spouse, the later of (i) the
end of the first calendar year beginning after the Participant's death
or (ii) the end of the calendar year in which the Participant would have
attained age 70 1/2.
If distribution is to be made to a Participant's spouse, it shall be made
available within a reasonable period of time after the Participant's death that
is no less favorable than the period of time applicable to other distributions.
If a
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Participant dies after the date distribution of his vested interest in his
Separate Account begins under this Article, but before his entire vested
interest in his Separate Account is distributed, his Beneficiary shall receive
distribution of the remainder of the Participant's vested interest in his
Separate Account beginning as soon as reasonably practicable following the
Participant's date of death in a form that provides for distribution at least
as rapidly as under the form in which the Participant was receiving
distribution.
15.3 Cash Outs and Participant Consent
Notwithstanding any other provision of the Plan to the contrary, if a
Participant's vested interest in his Separate Account does not exceed $3,500,
distribution of such vested interest shall be made to the Participant in a
single sum payment as soon as reasonably practicable following his Settlement
Date. If a Participant's vested interest in his Separate Account exceeds
$3,500, distribution shall not commence to such Participant prior to his Normal
Retirement Date without the Participant's written consent. If a Participant made
a withdrawal in accordance with the provisions of Article XIII or was in default
on a loan for which a portion of his Separate Account was pledged as security as
provided in Article XII and his vested interest in his Separate Account on the
date immediately preceding the withdrawal or default exceeded $3,500, then for
purposes of this Section, his vested interest in his Separate Account shall be
deemed to exceed $3,500.
15.4 Required Commencement of Distribution
Notwithstanding any other provision of the Plan to the contrary, distribution of
a Participant's vested interest in his Separate Account shall commence to the
Participant no later than the earlier of:
(a) 60 days after the close of the Plan Year in which (i) the Participant's
Normal Retirement Date occurs, (ii) the tenth anniversary of the year in
which he commenced participation in the Plan occurs, or (iii) his
Settlement Date occurs, whichever is latest; or
(b) the April 1 following the close of the calendar year in which he attains
age 70 1/2, whether or not his Settlement Date has occurred, except
that if a Participant attained age 70 1/2 prior to January 1, 1988, and
was not a five-percent owner (as defined in Section 416 of the Code) at
any time during the five-Plan-Year period ending within the calendar
year
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in which he attained age 70 1/2, distribution of such Participant's
vested interest in his Separate Account shall commence no later than
the April 1 following the close of the calendar year in which he
attains age 70 1/2 or retires, whichever is later.
Distributions required to commence under this Section shall be made in the form
provided under Article XVI and in accordance with Section 401(a)(9) of the
Code and regulations issued thereunder, including the minimum distribution
incidental benefit requirements.
15.5 Reemployment of a Participant
If a Participant whose Settlement Date has occurred is reemployed by an Employer
or a Related Company, he shall lose his right to any distribution or further
distributions from the Trust arising from his prior Settlement Date and his
interest in the Trust shall thereafter be treated in the same manner as that of
any other Participant whose Settlement Date has not occurred.
15.6 Restrictions on Alienation
Except as provided in Section 401(a)(13) of the Code relating to qualified
domestic relations orders and Section 1.401(a)-13(b)(2) of Treasury regulations
relating to Federal tax levies and judgments, no benefit under the Plan at any
time shall be subject in any manner to anticipation, alienation, assignment
(either at law or in equity), encumbrance, garnishment, levy, execution, or
other legal or equitable process; and no person shall have power in any manner
to anticipate, transfer, assign (either at law or in equity), alienate or
subject to attachment, garnishment, levy, execution, or other legal or equitable
process, or in any way encumber his benefits under the Plan, or any part
thereof, and any attempt to do so shall be void.
15.7 Facility of Payment
If the Administrator finds that any individual to whom an amount is payable
hereunder is incapable of attending to his financial affairs because of any
mental or physical condition, including the infirmities of advanced age, such
amount (unless prior claim therefor shall have been made by a duly qualified
guardian or other legal representative) may, in the discretion of the
Administrator, be paid to another person for the use or benefit of the
individual found incapable of attending to his financial affairs or in
satisfaction of legal obligations incurred by or on behalf of such individual.
The Trustee shall make such payment
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only upon receipt of written instructions to such effect from the Administrator.
Any such payment shall be charged to the Separate Account from which any such
payment would otherwise have been paid to the individual found incapable of
attending to his financial affairs and shall be a complete discharge of any
liability therefor under the Plan.
15.8 Inability to Locate Payee
If any benefit becomes payable to any person, or to the executor or
administrator of any deceased person, and if that person or his executor or
administrator does not present himself to the Administrator within five years
after the Administrator mails written notice of his eligibility to receive a
distribution hereunder to his last known address, that benefit will be
forfeited. However, if the payee later files a claim for that benefit, the
benefit will be restored.
15.9 Distribution Pursuant to Qualified Domestic Relations Orders
Notwithstanding any other provision of the Plan to the contrary, if a qualified
domestic relations order so provides, distribution may be made to an alternate
payee pursuant to a qualified domestic relations order, as defined in Section
414(p) of the Code, regardless of whether the Participant's Settlement Date has
occurred or whether the Participant is otherwise entitled to receive a
distribution under the Plan.
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ARTICLE XVI
FORM OF PAYMENT
16.1 Form of Payment
Distribution shall be made to a Participant, or his Beneficiary, if the
Participant has died, in a single sum payment. Notwithstanding the foregoing, if
a Participant continues in employment with an Employer or a Related Company
after the date as of which distribution of his vested interest must commence in
accordance with the requirements of Section 401(a)(9) of the Code, such
Participant may elect to receive distribution in periodic payments, made not
less frequently than annually, equal to the minimum amount necessary to satisfy
the distribution requirements of Section 401(a)(9) of the Code and regulations
issued thereunder for the remainder of the period that he continues in
employment with an Employer or a Related Company. Distribution shall be made in
cash or in kind at the Participant's, or his Beneficiary's, election.
16.2 Direct Rollover
Notwithstanding any other provision of the Plan to the contrary, in lieu of
receiving distribution in the form of payment provided under this Article, a
"qualified distributee" may elect in writing, in accordance with rules
prescribed by the Administrator, to have any portion or all of a distribution
made on or after January 1, 1993, that is an "eligible rollover distribution"
paid directly by the Plan to the "eligible retirement plan" designated by the
"qualified distributee"; provided, however, that this provision shall not apply
if the total distribution is less than $200 and that a "qualified distributee"
may not elect this provision with respect to a portion of a distribution that is
less than $500. Any such payment by the Plan to another "eligible retirement
plan" shall be a direct rollover. For purposes of this Section, the following
terms have the following meanings:
(a) An "eligible retirement plan" means an individual retirement account
described in Section 408(a) of the Code, an individual retirement
annuity described in section 408(b) of the Code, an annuity plan
described in Section 403(a) of the Code, or a qualified trust described
in Section 401(a) of the Code that accepts rollovers; provided, however,
that, in the case of a direct rollover by a surviving spouse, an
eligible retirement plan does not include a qualified trust described in
Section 401(a) of the Code.
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(b) An "eligible rollover distribution" means any distribution of all or any
portion of the balance of a Participant's Separate Account; provided,
however, that an eligible rollover distribution does not include any
distribution to the extent such distribution is required under Section
401(a)(9) of the Code.
(c) A "qualified distributee" means a Participant, his surviving spouse, or
his spouse or former spouse who is an alternate payee under a qualified
domestic relations order, as defined in Section 414(p) of the Code.
16.3 Notice Regarding Form of Payment
Within the 60 day period ending 30 days before the date as of which
distribution of a Participant's Separate Account commences, the Administrator
shall provide the Participant with a written explanation of his right to defer
distribution until his Normal Retirement Date, his right to make a direct
rollover, and the form of payment provided under the Plan. Distribution of the
Participant's Separate Account may commence less than 30 days after such notice
is provided to the Participant if (i) the Administrator clearly informs the
Participant of his right to consider his election of whether or not to make a
direct rollover or to receive a distribution prior to his Normal Retirement
Date for a period of at least 30 days following his receipt of the notice and
(ii) the Participant, after receiving the notice, affirmatively elects an early
distribution.
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ARTICLE XVII
BENEFICIARIES
17.1 Designation of Beneficiary
A married Participant's Beneficiary shall be his spouse, 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
prescribed by the Administrator. 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
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 as to the balance of the distribution.
17.2 Spousal Consent Requirements
Any written spousal consent given pursuant to this Article must acknowledge the
effect of the action taken and must be witnessed by a Plan representative or a
notary public. The spouse's written consent may be a general consent that
permits the Participant to change the designated Beneficiary without the
spouse's further consent. A Participant's spouse will be deemed to have given
written consent to the Participant's designation of Beneficiary if the
Participant establishes to the satisfaction of a Plan representative that such
consent cannot be obtained because the spouse cannot be located or because of
other circumstances set forth in Section 401(a)(11) of the Code and regulations
issued thereunder. Any written consent given or deemed to have been given by a
Participant's spouse hereunder shall be valid only with respect to the spouse
who signs the consent.
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ARTICLE XVIII
ADMINISTRATION
18.1 Authority of the Sponsor
The Sponsor, which shall be the administrator for purposes of ERISA and the plan
administrator for purposes of the Code, shall be responsible for the
administration of the Plan and, in addition to the powers and authorities
expressly conferred upon it in the Plan shall have all such powers and
authorities as may be necessary to carry out the provisions of the Plan,
including the power and authority to interpret and construe the provisions of
the Plan, to make benefit determinations, and to resolve any disputes which
arise under the Plan. The Sponsor may employ such attorneys, agents, and
accountants as it may deem necessary or advisable to assist in carrying out its
duties hereunder. The Sponsor and the Trustee shall be "named fiduciaries" as
that term is defined in Section 402(a)(2) of ERISA. The Sponsor may:
(a) allocate any of the powers, authority, or responsibilities for the
operation and administration of the Plan, which are retained by it or
granted to it by this Article, to the Trustee; and
(b) designate a person or persons other than the Sponsor to carry out any
of such powers, authority, or responsibilities;
except that no power, authority, or responsibility of the Trustee shall be
subject to the provisions of paragraph (b) of this Section, and except that no
allocation or delegation by the Sponsor of any of its powers, authority, or
responsibilities to the Trustee shall become effective unless such allocation or
delegation shall first be accepted by the Trustee in a writing signed by it and
delivered to the Sponsor.
18.2 Action of the Sponsor
Any act authorized, permitted, or required to be taken under the Plan by the
Sponsor and which has not been delegated in accordance with Section 18.1, may be
taken by a majority of the members of the board of directors of the Sponsor,
either by vote at a meeting, or in writing without a meeting, or by the employee
or employees of the Sponsor designated by the board of directors to carry out
such acts on behalf of the Sponsor. All notices, advice, directions,
certifications, approvals, and instructions required or authorized to be
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given by the Sponsor as under the Plan shall be in writing and signed by either
(i) a majority of the members of the board of directors of the Sponsor or by
such member or members as may be designated by an instrument in writing, signed
by all the members thereof, as having authority to, execute such documents on
its behalf, or (ii) the employee or employees authorized to act for the Sponsor
in accordance with the provisions of this Section.
18.3 Claims Review Procedure
Whenever a claim for benefits under the Plan filed by any person (herein
referred to as the "Claimant") is denied, whether in whole or in part, the
Sponsor shall transmit a written notice of such decision to the Claimant within
90 days of the date the claim was filed or, if special circumstances require an
extension, within 180 days of such date, which notice shall be written in a
manner calculated to be understood by the Claimant and shall contain a statement
of (i) the specific reasons for the denial of the claim, (ii) specific reference
to pertinent Plan provisions on which the denial is based, and (iii) a
description of any additional material or information necessary for the
Claimant to perfect the claim and an explanation of why such information is
necessary. The notice shall also include a statement advising the Claimant that,
within 60 days of the date on which he receives such notice, he may obtain
review of such decision in accordance with the procedures hereinafter set forth.
Within such 60-day period, the Claimant or his authorized representative may
request that the claim denial be reviewed by filing with the Sponsor a written
request therefor, which request shall contain the following information:
(a) the date on which the Claimant's request was filed with the Sponsor;
provided, however, that the date on which the Claimant's request for
review was in fact filed with the Sponsor shall control in the event
that the date of the actual filing is later than the date stated by the
Claimant pursuant to this paragraph;
(b) the specific portions of the denial of his claim which the Claimant
requests the Sponsor to review;
(c) a statement by the Claimant setting forth the basis upon which he
believes the Sponsor should reverse the previous denial of his claim for
benefits and accept his claim as made; and
(d) any written material (offered as exhibits) which the
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Claimant desires the Sponsor to examine in its consideration of his
position as stated pursuant to paragraph (c) of this Section.
Within 60 days of the date determined pursuant to paragraph (a) of this Section
or, if special circumstances require an extension, within 120 days of such date,
the Sponsor shall conduct a full and fair review of the decision denying the
Claimant's claim for benefits and shall render its written decision on review to
the Claimant. The Sponsor's decision on review shall be written in a manner
calculated to be understood by the Claimant and shall specify the reasons and
Plan provisions upon which the Sponsor's decision was based.
18.4 Qualified Domestic Relations Orders
The Sponsor shall establish reasonable procedures to determine the status of
domestic relations orders and to administer distributions under domestic
relations orders which are deemed to be qualified orders. Such procedures shall
be in writing and shall comply with the provisions of Section 414(p) of the
Code and regulations issued thereunder.
18.5 Indemnification
In addition to whatever rights of indemnification the Trustee or the members of
the board of directors of the Sponsor or any employee or employees of the
Sponsor to whom any power, authority, or responsibility is delegated pursuant to
Section 18.2, may be entitled under the articles of incorporation or regulations
of the Sponsor, under any provision of law, or under any other agreement, the
Sponsor shall satisfy any liability actually and reasonably incurred by any such
person or persons, including expenses, attorneys' fees, judgments, fines, and
amounts paid in settlement (other than amounts paid in settlement not approved
by the Sponsor), in connection with any threatened, pending or completed action,
suit, or proceeding which is related to the exercising or failure to exercise by
such person or persons of any of the powers, authority, responsibilities, or
discretion as provided under the Plan, or reasonably believed by such person or
persons to be provided hereunder, and any action taken by such person or persons
in connection therewith, unless the same is judicially determined to be the
result of such person's or persons' gross negligence or willful misconduct.
18.6 Actions Binding
Subject to the provisions of Section 18.3, any action taken by the Sponsor which
is authorized, permitted, or required
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under the Plan shall be final and binding upon the Employers, the Trustee, all
persons who have or who claim an interest under the Plan, and all third parties
dealing with the Employers or the Trustee.
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ARTICLE XIX
AMENDMENT AND TERMINATION
19.1 Amendment
Subject to the provisions of Section 19.2, the Sponsor may at any time and from
time to time, by action of its board of directors, or such officers of the
Sponsor as are authorized by its board of directors, amend the Plan, either
prospectively or retroactively. Any such amendment shall be by written
instrument executed by the Sponsor.
19.2 Limitation on Amendment
The Sponsor shall make no amendment to the Plan which shall decrease the accrued
benefit of any Participant or Beneficiary, except that nothing contained herein
shall restrict the right to amend the provisions of the plan relating to the
administration of the Plan and Trust. Moreover, no such amendment shall be made
hereunder which shall permit any part of the Trust to revert to an Employer or
any Related Company or be used or be diverted to purposes other than the
exclusive, benefit of Participants and Beneficiaries.
19.3 Termination
The Sponsor reserves the right, by action of its board of directors, to
terminate the Plan as to all Employers at any time (the effective date of such
termination being hereinafter referred to as the "termination date"). Upon any
such termination of the Plan, the following actions shall be taken for the
benefit of Participants and Beneficiaries:
(a) As of the termination date, each Investment Fund shall be valued and all
Separate Accounts and Sub-Accounts shall be adjusted in the manner
provided in Article XI, with any unallocated contributions or
forfeitures being allocated as of the termination date in the manner
otherwise provided in the Plan. The termination date shall become a
Valuation Date for purposes of Article XI. In determining the net worth
of the Trust, there shall be included as a liability such amounts as
shall be necessary to pay all expenses in connection with the
termination of the Trust and the liquidation and distribution of the
property of the Trust, as well as other expenses, whether or not
accrued, and shall include as an asset all accrued income.
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(b) All Separate Accounts shall then be disposed of to or for the benefit of
each Participant or Beneficiary in accordance with the provisions of
Article XV as if the termination date were his Settlement Date;
provided, however, that notwithstanding the provisions of Article XV, if
the Plan does not offer an annuity option and if neither his Employer
nor a Related Company establishes or maintains another defined
contribution plan (other than an employee stock ownership plan as
defined in Section 4975(e)(7) of the Code), the Participant's written
consent to the commencement of distribution shall not be required
regardless of the value of the Participant's vested interest in his
Separate Account.
(c) Notwithstanding the provisions of paragraph (b) of this Section, no
distribution shall be made to a Participant of any portion of the
balance of his Tax-Deferred Contributions Sub-Account prior to his
separation from service (other than a distribution made in accordance
with Article XIII or required in accordance with Section 401(a)(9) of
the Code) unless (i) neither his Employer nor a Related Company
establishes or maintains another defined contribution plan (other than
an employee stock ownership plan as defined in Section 4975(e)(7) of
the Code, a tax credit employee stock ownership plan as defined in
Section 409 of the Code, or a simplified employee pension as defined in
Section 408(k) of the Code) either at the time the plan is terminated
or at any time during the period ending 12 months after distribution of
all assets from the Plan; provided, however, that this provision shall
not apply if fewer than two percent of the Eligible Employees under the
Plan were eligible to participate at any time in such other defined
contribution plan during the 24-month period beginning 12 months before
the Plan termination, and (ii) the distribution the Participant receives
is a "lump sum distribution" as defined in Section 402(e)(4) of the
Code, without regard to clauses (i), (ii), (iii), and (iv) of
sub-paragraph (A), sub-paragraph (B), or sub-paragraph (H) thereof.
Notwithstanding anything to the contrary contained in the Plan, upon any such
Plan termination, the vested interest of each Participant and Beneficiary in his
Employer Contributions Sub-Account shall be 100 percent; and, if there is a
partial termination of the Plan, the vested interest of each Participant and
Beneficiary who is affected by the partial termination in his Employer
Contributions
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Sub-Account shall be 100 percent. For purposes of the preceding sentence only,
the Plan shall be deemed to terminate automatically if there shall be a complete
discontinuance of contributions hereunder by all Employers.
19.4 Reorganization
The merger, consolidation, or liquidation of any Employer with or into any other
Employer or a Related Company shall not constitute a termination of the Plan as
to such, Employer. If an Employer disposes of substantially all of the assets
used by the Employer in a trade or business or disposes of a subsidiary and in
connection therewith one or more Participants terminates employment but
continues in employment with the purchaser of the assets or with such
subsidiary, no distribution from the Plan shall be made to any such Participant
prior to his separation from service (other than a distribution made in
accordance with Article XIII or required in accordance with Section 401(a)(9) of
the Code), except that a distribution shall be permitted to be made in such a
case, subject to the Participant's consent (to the extent required by law), if
(i) the distribution would constitute a "lump sum distribution" as defined in
section 402(e)(4) of the Code, without regard to clauses (i), (ii), (iii), or
(iv) of sub-paragraph (A), sub-paragraph (B), or sub-paragraph (H) thereof, (ii)
the Employer continues to maintain the Plan after the disposition, (iii) the
purchaser does not maintain the Plan after the disposition, and (iv) the
distribution is made by the end of the second calendar year after the calendar
year in which the disposition occurred.
19.5 Withdrawal of an Employer
An Employer other than the Sponsor may withdraw from the Plan at any time upon
notice in writing to the Administrator (the effective date of such withdrawal
being hereinafter referred to as the "withdrawal date"), and shall thereupon
cease to be an Employer for all purposes of the Plan. An Employer shall be
deemed automatically to withdraw from the Plan in the event of its complete
discontinuance of contributions, or, subject to Section 19.4 and unless the
Sponsor otherwise directs, it ceases to be a Related Company of the Sponsor or
any other Employer. The withdrawal of an Employer shall be treated as a
termination of the Plan with respect to Participants who at the time are
employed by such Employer. In the event of any such withdrawal of an Employer,
the action specified in Section 19.3 shall be taken as of the withdrawal date,
as on a termination of the Plan, but with respect only to Participants who are
employed solely by the withdrawing Employer, and who, upon such withdrawal, are
neither transferred to nor continued in
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employment with any other Employer or a Related Company. The interest of any
Participant employed by the withdrawing Employer who is transferred to or
continues in employment with any other Employer or a Related Company, and the
interest of any Participant employed solely by an Employer or a Related Company
other than the withdrawing Employer, shall remain unaffected by such withdrawal;
no adjustment to his Separate Accounts shall be made by reason of the
withdrawal; and he shall continue as a Participant hereunder subject to the
remaining provisions of the Plan.
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ARTICLE XX
ADOPTION BY OTHER EMPLOYERS
20.1 Adoption by Related Companies
A Related Company that is not an Employer may, with the consent of the Sponsor,
adopt the Plan and become an Employer hereunder by causing an appropriate
written instrument evidencing such adoption to be executed in accordance with
the requirements of its organizational authority. Any such instrument shall
specify the effective date of the adoption.
20.2 Effective Plan Provisions
An Employer who adopts the Plan shall be bound by the provisions of the Plan in
effect at the time of the adoption and as subsequently in effect because of any
amendment to the Plan.
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ARTICLE XXI
MISCELLANEOUS PROVISIONS
21.1 No Commitment as to Employment
Nothing contained herein shall be construed as a commitment or agreement upon
the part of any person to continue his employment with an Employer or Related
Company, or as a commitment on the part of any Employer or Related Company to
continue the employment, compensation, or benefits of any person for any period.
21.2 Benefits
Nothing in the Plan nor the Trust Agreement shall be construed to confer any
right or claim upon any person, firm, or corporation other than the Employers,
the Trustee, Participants, and Beneficiaries.
21.3 No Guarantees
The Employers, the Administrator, and the Trustee do not guarantee the Trust
from loss or depreciation, nor do they guarantee the payment of any amount which
may become due to any person hereunder.
21.4 Expenses
The expenses of administration of the Plan, including the expenses of the
Administrator and fees of the Trustee, shall be paid from the Trust or by the
Sponsor or another Employer as the Sponsor shall direct. Notwithstanding the
foregoing, administrative expenses that are allocable to the Separate Account of
a specific Participant shall be paid from that Separate Account or by the
Sponsor or another Employer as the Sponsor shall direct.
21.5 Precedent
Except as otherwise specifically provided, no action taken in accordance with
the Plan shall be construed or relied upon as a precedent for similar action
under similar circumstances.
21.6 Duty to Furnish Information
The Employers, the Administrator, and the Trustee shall furnish to any of the
others any documents, reports, returns, statements, or other information that
the other
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reasonably deems necessary to perform its duties hereunder or otherwise imposed
by law.
21.7 Withholding
The Trustee shall withhold any tax which by any present or future later is
required to be withheld, and which the Administrator notifies the Trustee in
writing is to be so withheld, from any payment to any Participant or Beneficiary
hereunder.
21.8 Merger, Consolidation, or Transfer of Plan Assets
The Plan shall not be merged or consolidated with any other plan, nor shall any
of its assets or liabilities be transferred to another plan, unless, immediately
after such merger, consolidation, or transfer of assets or liabilities, each
Participant in the Plan would receive a benefit under the Plan which is at least
equal to the benefit he would have received immediately prior to such merger,
consolidation, or transfer of assets or liabilities (assuming in each instance
that the Plan had then terminated).
21.9 Back Pay Awards
The provisions of this Section shall apply only to an Employee or former
Employee who becomes entitled to back pay by an award or agreement of an
Employer without regard to mitigation of damages. If a person to whom this
Section applies was or would have become an Eligible Employee after such back
pay award or agreement has been effected, and if any such person who had not
previously elected to make Tax-Deferred. Contributions pursuant to Section 4.1
shall within 30 days of the date he receives notice of the provisions of this
Section make an election to make Tax-Deferred Contributions in accordance with
such Section 4.1 (retroactive to any Enrollment Date as of which he was or has
become eligible to do so), then such Participant may elect that any Tax-Deferred
Contributions not previously made on his behalf but which, after application of
the foregoing provisions of this Section, would have been made under the
provisions of Article IV, shall be made out of the proceeds of such back pay
award or agreement. In addition, if any such Employee or former Employee would
have been eligible to participate in the allocation of Employer Contributions
under the provisions of Article VI for any prior Plan Year after such back pay
award or agreement has been effected, his Employer shall make an Employer
Contribution equal to the amount of the Employer Contribution which would have
been allocated to such
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Participant under the provisions of Article VI as in effect during each such
Plan Year. The amounts of such additional contributions shall be credited to
the Separate Account of such Participant. Any additional contributions made by
such Participant and by an Employer pursuant to this Section shall be made in
accordance with, and subject to the. limitations of the applicable provisions of
Articles IV, VI, and VII.
21.10 Condition on Employer Contributions
Notwithstanding anything to the contrary contained in the Plan or the Trust
Agreement, any contribution of an Employer hereunder is conditioned upon the
continued qualification of the Plan under Section 401(a) of the Code, the exempt
status of the Trust under Section 501 (a) of the Code, and the deductibility of
the contribution under Section 404 of the Code. Except as otherwise provided in
this Section and Section 21.11, however, in no event shall any portion of the
property of the Trust ever revert to or otherwise inure to the benefit of an
Employer or any Related Company.
21.11 Return of Contributions to an Employer
Notwithstanding any other provision of the Plan or the Trust Agreement to the
contrary, in the event any contribution of an Employer made hereunder:
(a) is made under a mistake of fact, or
(b) is disallowed as a deduction under Section 404 of the Code,
such contribution may be returned to the Employer within one year after the
payment of the contribution or the disallowance of the deduction to the extent
disallowed, whichever is applicable. In the event the Plan does not initially
qualify under Section 401(a) of the Code, any contribution of an Employer made
hereunder may be returned to the Employer within one year of the date of denial
of the initial qualification of the Plan, but only if an application for
determination was made within the period of time prescribed under Section 403
(c) (2) (13) of ERISA.
21.12 Validity of Plan
The validity of the Plan shall be determined and the Plan shall be construed and
interpreted in accordance with the laws of the Commonwealth of Massachusetts,
except as preempted by applicable Federal law. The invalidity or illegality of
any provision of the Plan shall not affect the
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legality or validity of any other part thereof.
21.13 Trust Agreement
The Trust Agreement and the Trust maintained thereunder shall be deemed to be a
part of the Plan as-if fully set forth herein and the provisions of the Trust
Agreement are hereby incorporated by reference into the Plan.
21.14 Parties Bound
The Plan shall be binding upon the Employers, all Participants and Beneficiaries
hereunder, and, as the case may be, the heirs, executors, administrators,
successors, and assigns of each of them.
21.15 Application of Certain Plan Provisions
A Participant's Beneficiary, if the Participant has died, or alternate payee
under a qualified domestic relations order shall be treated as a Participant for
purposes of directing investments as provided in Article X. For purposes of the
general administrative provisions and limitations of the Plan, a Participant's
Beneficiary or alternate payee under a qualified domestic relations order shall
be treated as any other person entitled to receive benefits under the Plan. Upon
any termination of the Plan, any such Beneficiary or alternate payee under a
qualified domestic relations order who has an interest under the Plan at the
time of such termination, which does not cease by reason thereof, shall be
deemed to be a Participant for all purposes of the Plan.
21.16 Leased Employees
Any leased employee, other than an excludable leased employee, shall be treated
as an employee of the Employer for which he performs services for all purposes
of the Plan with respect to the provisions of Sections 401 (a) (3), (4), (7),
and (16), and 408 (k), 410, 411,415, and 416 of the Code; provided, however,
that no leased employee shall accrue a benefit hereunder based on service as a
leased employee except as otherwise specifically provided in the Plan. A "leased
employee" means any person who performs services for an Employer or a Related
Company (the "recipient") (other than an employee of the recipient) pursuant to
an agreement between the recipient and any other person (the "leasing
organization") on a substantially full time basis for a period of at least one
year, provided that such services are of a type historically performed, in the
business field of the recipient, by employees. An "excludable leased employee"
means any leased employee of
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the recipient who is covered by a money purchase pension plan maintained by the
leasing organization which provides for (i) a nonintegrated employer
contribution on behalf of each participant in the plan equal to at least ten
percent of compensation, (ii) full and immediate vesting, and (iii) immediate
participation by employees of the leasing organization (other than employees who
perform substantially, all of their services for the leasing organization or
whose compensation from the leasing organization in each plan year during the
four-year period ending with the plan year is less than $1,000); provided,
however, that leased employees do not constitute more than 20 percent of the
recipient's nonhighly compensated work force. For purposes of this Section,
contributions or benefits provided to a leased employee by the leasing
organization that are attributable to services performed for the recipient shall
be treated as provided by the recipient.
21.17 Transferred Funds
If funds from another qualified plan are transferred or merged into the Plan,
such funds shall be held and administered in accordance with any restrictions
applicable to them under such other plan to the extent required by law and shall
be accounted for separately to the extent necessary to accomplish the foregoing.
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ARTICLE XXII
TOP-HEAVY PROVISIONS
22.1 Definitions
For purposes of this Article, the following terms have the following meanings:
(a) The "compensation" of an employee means compensation as defined in
Section 415 of the Code and regulations issued thereunder. In no
event, however, shall the compensation of a Participant taken into
account under the Plan for any Plan Year exceed (1) $200,000 for Plan
Years beginning prior to January 1, 1994, or (2) $150,000 for Plan Years
beginning on or after January 1, 1994 (subject to adjustment annually as
provided in Section 401(a)(17)(B) and Section 415(d) of the Code;
provided, however, that the dollar increase in effect on January 1 of
any calendar year, if any, is effective for Plan Years beginning in such
calendar year). If the compensation of a Participant is determined over
a period of time that contains fewer than 12 calendar months, then the
annual compensation limitation described above shall be adjusted with
respect to that Participant by multiplying the annual compensation
limitation in effect for the Plan Year by a fraction the numerator of
which is the number of full months in the period and the denominator of
which is 12; provided, however, that no proration is required for a
Participant who is covered under the Plan for less than one full Plan
Year if the formula for allocations is based on Compensation for a
period of at least 12 months. In determining the compensation, for
purposes of applying the annual compensation limitation described above,
of a Participant who is a five-percent owner or one of the ten Highly
Compensated Employees receiving the greatest compensation for the Plan
Year, the compensation of the Participant's spouse and of his lineal
descendants who have not attained age 19 as of the close of the Plan
Year shall be included as compensation of the Participant for the Plan
Year. If as a result of applying the family aggregation rule described
in the preceding sentence the annual compensation limitation would be
exceeded, the limitation shall be prorated among the affected family
members in proportion to each member's compensation as determined prior
to application of the family aggregation rules.
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(b) The "determination date" with respect to any Plan Year means the last
day of the preceding Plan Year, except that the determination date with
respect to the first Plan Year of the Plan, shall mean the last day of
such Plan Year.
(c) A "key employee" means any Employee or former Employee who is a key
employee pursuant to the provisions of Section 416(i)(1) of the Code and
any Beneficiary of such Employee or former Employee.
(d) A "non-key employee" means any Employee who is not a key employee.
(e) A "permissive aggregation group" means those plans included in each
Employer's required aggregation group together with any other plan or
plans of the Employer, so long as the entire group of plans would
continue to meet the requirements of Sections 401(a)(4) and 410 of the
Code.
(f) A "required aggregation group" means the group of tax qualified plans
maintained by an Employer or a Related Company consisting of each plan
in which a key employee participates and each other plan that enables a
plan in which a key employee participates to meet the requirements of
Section 401(a)(4) or Section 410 of the Code, including any plan that
terminated within the five-year period ending on the relevant
determination date.
(g) A "super top-heavy group" with respect to a particular Plan Year means a
required or permissive aggregation group that, as of the determination
date, would qualify as a top-heavy group under the definition in
paragraph (i) of this Section with "90 percent" substituted for "60
percent" each place where "60 percent" appears in the definition.
(h) A "super top-heavy plan" with respect to a particular Plan Year means a
plan that, as of the determination date, would qualify as a top-heavy
plan under the, definition in paragraph (j) of this Section with "90
percent" substituted for "60 percent" each place where "60 percent"
appears in the definition. A plan is also a "super top-heavy plan" if it
is part of a super top-heavy group.
(i) A "top-heavy group" with respect to a particular Plan Year means a
required or permissive aggregation group if the sum, as of the
determination date, of the
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present value of the cumulative accrued benefits for key employees under
all defined benefit plans included in such group and the aggregate of
the account balances of key employees under all defined contribution
plans included in such group exceeds 60 percent of a similar sum
determined for all employees covered by the plans included in such
group.
(j) A "top-heavy plan" with respect to a particular Plan Year means (i), in
the case of a defined contribution plan (including any simplified
employee pension plan), a plan for which, as of the determination date,
the aggregate of the accounts (within the meaning of Section 416(g) of
the Code and the regulations and rulings thereunder) of key employees
exceeds 60 percent of the aggregate of the accounts of all participants
under the plan, with the accounts valued as of the relevant valuation
date and increased for any distribution of an account balance made in
the five-year period ending on the determination date, (ii), in the case
of a defined benefit plan, a plan for which, as of the determination
date, the present value of the cumulative accrued benefits payable under
the plan (within the meaning of Section 416(g) of the Code and the
regulations and rulings thereunder) to key employees exceeds 60 percent
of the present value of the cumulative accrued benefits under the plan
for all employees, with the present value of accrued benefits to be
determined under the accrual method uniformly used under all plans
maintained by an Employer or, if no such method exists, under the
slowest accrual method permitted under the fractional accrual rate of
Section 411(b)(1)(C) of the Code and including the present value of
any part of any accrued benefits distributed in the five-year period
ending on the determination date, and (iii) any plan (including any
simplified employee pension plan) included in a required aggregation
group that is a top-heavy group. For purposes of this paragraph, the
accounts and accrued benefits of any employee who has not performed
services for an Employer or a Related Company during the five-year
period ending on the determination date shall be disregarded. For
purposes of this paragraph, the present value of cumulative accrued
benefits under a defined benefit plan for purposes of top-heavy
determinations shall be calculated using the actuarial assumptions
otherwise employed under such plan, except that the same actuarial
assumptions shall be used for all plans within a required or permissive
aggregation group. A Participant's interest in the Plan
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attributable to any Rollover Contributions, except Rollover
Contributions made from a plan maintained by an Employer or a Related
Company, shall not be considered in determining whether the Plan is
top-heavy. Notwithstanding the foregoing, if a plan is included in a
require or permissive aggregation group that is not a top-heavy group,
such plan shall not be a top-heavy plan.
(k) The "valuation date" with respect to any determination date means the
most recent Valuation Date occurring within the 12-month period ending
on the determination date.
22.2 Applicability
Notwithstanding any other provision of the Plan to the contrary, the provisions
of this Article shall be applicable during any Plan Year in which the Plan is
determined to be a top-heavy plan as hereinafter defined. If the Plan is
determined to be a top-heavy plan and upon a subsequent determination date is
determined no longer to be a top-heavy plan, the vesting provisions of Article
VI shall again become applicable as of such subsequent determination date;
provided, however, that if the prior vesting provisions do again become
applicable, any Employee with three or more years of Vesting Service may elect
in accordance with the provisions of Article VI, to continue to have his vested
interest in his Employer Contributions Sub-Account determined in accordance with
the vesting schedule specified in Section 22.5.
22.3 Minimum Employer Contribution
If the Plan is determined to be a top-heavy plan, the Employer Contributions
allocated to the Separate Account of each non-key employee who is an Eligible
Employee and who is employed by an Employer or a Related Company on the last day
of such top-heavy Plan Year shall be no less than the lesser of (i) three
percent of his compensation or (ii) the largest percentage of compensation that
is allocated as an Employer contribution and/or Tax-Deferred Contribution for
such Plan Year to the Separate Account of any key employee; except that, in the
event the Plan is part of a required aggregation group, and the Plan enables a
defined benefit plan included in such group to meet the requirements of Section
401(a)(4) or 410 of the Code, the minimum allocation of Employer Contributions
to each such non-key employee shall be three percent of the compensation. of
such non-key employee. Any minimum allocation to a non-key employee required by
this Section shall be made without regard to any
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social security contribution made on behalf of the non-key employee, his number
of hours of service, his level of compensation, or whether he declined to make
elective or mandatory contributions. Notwithstanding the minimum top-heavy
allocation requirements of this Section, if the Plan is a top-heavy plan, each
non-key employee who is an Eligible Employee and who is employed by an Employer
or a Related Company on the last day of a top-heavy Plan Year and who is also
covered under any other top-heavy plan or plans of an Employer will receive the
top-heavy benefits provided under such other plan in lieu of the minimum
top-heavy allocation under the Plan.
22.4 Adjustments to Section 415 Limitations
If the Plan is determined to be a top-heavy plan and an Employer maintains a
defined benefit plan covering some or all of the Employees that are covered by
the Plan, the defined benefit plan fraction and the defined contribution plan
fraction, described in Article VII, shall be determined as provided in Section
415 of the Code by substituting "1.0" for "1.25" each place where "1.25"
appears, except that such substitutions shall not be applied to the Plan if (i)
the Plan is not a super top-heavy plan, (ii) the Employer Contribution for such
top-heavy Plan Year for each non-key employee who is to receive a minimum
top-heavy benefit hereunder is not less than four percent of such non-key
employee's compensation, and (iii) the minimum annual retirement benefit accrued
by a non-key employee who participates under one or more defined benefit plans
of an Employer or a Related Company for such top-heavy Plan Year is not less
than the lesser of three percent times years of service with an Employer or a
Related Company or thirty percent.
22.5 Accelerated Vesting
If the Plan is determined to be a top-heavy plan, a Participant's vested
interest in his Employer Contributions Sub-Account shall be determined no less
rapidly than in accordance with the following vesting schedule:
<TABLE>
<CAPTION>
Years of Vesting Service Vested Interest
------------------------ ---------------
<S> <C>
Less than 1 0%
1 but less than 2 50%
2 but less than 3 75%
3 or more 100%
</TABLE>
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ARTICLE XXIII
EFFECTIVE DATE
23.1 Effective Date of Amendment and Restatement
This amendment and restatement is effective as of January 1, 1998.
EXECUTED AT 4500 Bohannon Drive, Menlo Park, CA 94025 this 3 day of
March, 1998.
NETWORK ASSOCIATES, INC.
By: /s/ LINDA GRECO
--------------------------------
Title: Manager, Benefits
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ADDENDUM
Re: PLAN LOANS
01. Loans Restricted to Eligible Employees
No loans shall be made to an Employee who makes a Rollover Contribution in
accordance with Article IV, but who is not an Eligible Employee as provided in
Article III.
02. Minimum Loan Amount
A Participant may not request a loan for less than $1,000.
03. Maximum Number of Outstanding Loans
A Participant with an outstanding loan may not apply for another loan until the
existing loan is paid in full and may not refinance an existing loan or attain a
second loan for the purpose of paying off the existing loan. A Participant may
not apply for more than one loan during the Plan Year.
The provisions of this Section shall not apply to any loans made prior to the
effective date of this amendment and restatement; provided, however, that a
Participant may not apply for a new loan hereunder until all outstanding loans
made to the Participant prior to the effective date of this amendment and
restatement have been paid in full.
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