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EXHIBIT 4.7
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
FLEXINVEST(R)-PLUS PROTOTYPE PROFIT-SHARING/401(k) PLAN
PART I DEFINITIONS
PART II CREDITING SERVICE
PART III ELIGIBILITY AND PARTICIPATION
PART IV CONTRIBUTIONS
PART V LIMITATION ON ALLOCATIONS
PART VI PLAN INVESTMENT - CONTRACT
PART VII PLAN INVESTMENT - POLICIES
PART VIII PARTICIPANT'S ACCOUNT
PART IX VESTING
PART X IN-SERVICE WITHDRAWALS
PART XI PARTICIPANT LOANS
PART XII TERMINATION OF EMPLOYMENT
PART XIII FORFEITURES
PART XIV RETIREMENT BENEFITS
PART XV DEATH BENEFITS
PART XVI TOP-HEAVY REQUIREMENTS
PART XVII INSURANCE COMPANY
PART XVIII AMENDMENT, TERMINATION, MERGER, ETC. OF PLAN
PART XIX ADMINISTRATION OF PLAN
PART XX MISCELLANEOUS
PART XXI TRANSITIONAL RULE-RETIREMENT DISTRIBUTIONS
PART XXII TRANSITIONAL RULE-SURVIVOR ANNUITIES
(C)Copyright 1996 by Massachusetts Mutual Life Insurance Company.
All Rights Reserved. No reproduction of provisions in this document are
permitted without the express written consent of Massachusetts Mutual Life
Insurance Company, Springfield, Massachusetts 01111-0001.
Dated 12/96
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MASSACHUSETTS MUTUAL FLEXINVEST(R)-PLUS PROTOTYPE
PROFIT-SHARING/401(k) PLAN
Table of Contents
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INTRODUCTION PAGE
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Prototype Profit-Sharing 401(k) Plan and Adoption 1
Agreement
Purpose of Plan 1
PART I - DEFINITIONS
1.1 Administrator 2
1.2 Anniversary Date 2
1.3 Annual Additions 2
1.4 Automatic Joint and Survivor Annuity 2
1.5 Beneficiary 3
1.6 Benefiting 3
1.7 Business Day 3
1.8 Code 3
1.9 Company 3
1.10 Company Matching Contributions 3
1.11 Company Profit-Sharing Contributions 3
1.12 Company Qualified Matching Contributions 3
1.13 Company Qualified Nonelective Contributions 3
1.14 Compensation 4
1.15 Contract 6
1.16 Deferred Salary Agreement 6
1.17 Direct Rollover 6
1.18 Effective Date 6
1.19 Election Period 6
1.20 Elective Deferrals 6
1.21 Eligible Retirement Plan 6
1.22 Eligible Rollover Distribution 7
1.23 Employee 7
1.24 Employer 7
1.25 Entry Date 7
1.26 Excess Aggregate Contributions 7
1.27 Excess Annual Additions 8
1.28 Excess Contributions 8
1.29 Excess Deferrals 8
1.30 Highly Compensated Employee 8
1.31 Hour of Service 10
1.32 Insurance Company 11
1.33 Leased Employee 11
1.34 Limitation Year 11
1.35 Maximum Permissible Amount 12
1.36 One-Year Break in Service 12
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1.37 Participant 12
1.38 Participant Matched Contributions 12
1.39 Participant Nondeductible
Voluntary Contributions 12
1.40 Plan 13
1.41 Plan Year 13
1.42 Policy 13
1.43 Prototype Plan 13
1.44 Qualified Election 13
1.45 Spouse 13
1.46 Straight Life Annuity 13
1.47 Termination of Employment 14
1.48 Valuation Date 14
1.49 Year of Service 14
PART II - CREDITING SERVICE
2.1 General Method of Crediting Service 14
2.2 Equivalency Methods Based Upon Periods
of Employment 14
2.3 One Method of Crediting Service
for All Employees 14
2.4 Service With a Predecessor Employer 14
PART III - ELIGIBILITY AND PARTICIPATION
3.1 Eligibility 15
3.2 Eligibility Computation Period 15
3.3 Break in Service/Return to Service 15
3.4 Notification of Eligible Employees 16
3.5 Conditions of Continued Participation 16
PART IV - CONTRIBUTIONS
4.1 Contributions to the Plan 16
4.2 Limitations on Elective Deferrals 17
4.3 Excess Contributions 20
4.4 Limitations on Company and Participant
Contributions 21
4.5 Excess Aggregate Contributions 23
4.6 Multiple Use of Alternative Test 25
4.7 Permitted Disparity 25
4.8 Collection of Participant Contributions 26
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4.9 Company Contributions - Timing 26
4.10 Company Contributions - Profits 27
4.11 Return of Company Contributions 27
4.12 Rollover Contributions 27
4.13 Transfers of Amounts From Other Plans 28
4.14 Participant Deductible
Voluntary Contributions 28
4.15 Additional Requirements for Owner-Employees 28
PART V - LIMITATION ON ALLOCATIONS
5.1 Maximum Permissible Amount 29
5.2 Estimate of Maximum 29
5.3 Reconciliation 30
5.4 Excess Annual Additions 30
5.5 If Company Maintains Other
Defined Contribution Plans 31
5.6 If Company Maintains Other Plans 32
5.7 Controlled Group of Employers, Etc. 32
5.8 Definitions 32
PART VI - PLAN INVESTMENT - CONTRACT
6.1 Funding Policy 34
6.2 Contract 35
6.3 Insurance Company's Authority
to Direct Investments 35
6.4 Participant-Directed Investments 36
6.5 Combining Assets of More Than One Plan
in a Single Contract 36
PART VII - PLAN INVESTMENT - POLICIES
7.1 Request of Participant 37
7.2 Limitations on Purchase 37
7.3 Company is Owner 37
7.4 Premium Payments 37
7.5 Dividends 37
7.6 Distribution of Policies 38
7.7 Change in Amount of Insurance 38
7.8 Policies upon Termination of Employment 38
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PART VIII - PARTICIPANT'S ACCOUNTS
8.1 Participant's Account 38
8.2 Valuation of Accounts 39
PART IX - VESTING
9.1 Full Vesting in Certain Separate Accounts 40
9.2 Vesting in Participant's Accounts
Attributable to Company Matching
and Profit-Sharing Contributions 40
9.3 Vesting Years of Service/Breaks in Service 41
PART X - IN-SERVICE WITHDRAWALS
10.1 In General 41
10.2 Sequence and Conditions for Withdrawal 41
10.3 Financial Hardship 42
10.4 No Forfeiture of Participant's Account
Attributable to Participant Contributions 43
PART XI - PARTICIPANT LOANS
11.1 In General 43
11.2 Application for Loans 44
11.3 Amount of Loan 44
11.4 Interest Rate 45
11.5 Repayments 45
11.6 Default and/or Acceleration 45
PART XII - TERMINATION OF EMPLOYMENT
12.1 Notice of Termination of Employment 46
12.2 Amount of Participant's Benefit 46
12.3 Participant's Election of a Form of Benefit 46
12.4 Forfeiture of Nonvested Portion of
Participant's Account 47
12.5 Repayment 48
PART XIII - FORFEITURES
13.1 Occurrence of Forfeiture 49
13.2 Application of Forfeitures 49
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PART XIV - RETIREMENT BENEFITS
14.1 Normal Form of Retirement Benefit 49
14.2 Optional Forms of Benefit 50
14.3 Special Rule 50
14.4 Waiver of Thirty-Day Period for Consent 50
14.5 Amount of Retirement Benefit 51
14.6 Participant Election of a Retirement Date 51
14.7 Participant's Right to Defer Retirement 51
14.8 Distribution of Retirement Benefits 52
14.9 Minimum Amounts to be Distributed from
Participant Account 53
PART XV - DEATH BENEFITS
15.1 Preretirement Death of a Participant 53
15.2 Preretirement Survivor Annuity 55
15.3 Post-retirement Death of a Participant 55
15.4 Designation of a Beneficiary 56
PART XVI - TOP-HEAVY REQUIREMENTS
16.1 In General 56
16.2 Minimum Contribution Under a Top-Heavy Plan 56
16.3 Nonforfeitability of Minimum Contribution 57
16.4 Top-Heavy Vesting 57
16.5 Top-Heavy Definitions 57
PART XVII - INSURANCE COMPANY
17.1 Not a Party 60
17.2 Not Responsible for the Acts of
the Company or Administrator 60
17.3 Reliance on Signatures 60
17.4 Acquittance 60
17.5 Duties of the Insurance Company 60
17.6 Plan Controls 61
PART XVIII - AMENDMENT, TERMINATION, MERGER, ETC. OF PLAN
18.1 Permanency 61
18.2 Amendment by Insurance Company 61
18.3 Permissible Amendments by Company 61
18.4 Restrictions on Amendments 62
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18.5 Termination of Plan 62
18.6 Full Vesting Upon Termination 63
18.7 Merger, Consolidation or
Transfer of Plan Assets 63
PART XIX- ADMINISTRATION OF PLAN
19.1 Appointment of Administrator 64
19.2 Administrator's Powers and Duties 64
19.3 Delegation of Administrative
Responsibilities 65
19.4 Bonding 66
19.5 Fiduciary Liability Insurance
and Indemnification 66
19.6 Compensation of Administrator 66
19.7 Service of Legal Process 66
19.8 Company Census Report 66
19.9 Information About Plan 66
19.10 Information About Participants
and Beneficiaries 67
19.11 Claim for Benefits 67
19.12 Claims Review Procedure 67
19.13 Missing Participants or Beneficiaries 68
PART XX - MISCELLANEOUS
20.1 Assignment or Alienation 68
20.2 Responsibility for Qualification of Plan 68
20.3 Original Document 69
20.4 State Law 69
20.5 Not an Employment Contract 69
20.6 Word Usage 69
20.7 Interpretation of Plan 69
20.8 Headings 69
PART XXI - TRANSITIONAL RULE - Retirement Distributions 70
PART XXII - TRANSITIONAL RULE - Survivor Annuities 72
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ADOPTION AGREEMENT
A. Plan Name
B. Contract
C. Dates
D. Eligibility Requirements
E. Compensation
F. Retirement
G. Elective Deferrals
H. Company Qualified Nonelective Contributions
I. Company Matching and Company Qualified
Matching Contributions
J. Participant Contributions
K. Company Profit-Sharing Contributions
L. Forfeitures
M. Investment Allocation And Profit Requirement
N. Policies
O. In-Service Withdrawals
P. Loans
Q. Special Top-Heavy Elections
R. Vesting
S. Termination of Employment
T. Limitation on Allocating Contributions
U. Present Value of Accrued Benefits
V. Adoption Conditional Upon IRS Approval
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Massachusetts Mutual Life Insurance Company
FLEXINVEST(R) PROTOTYPE PROFIT-SHARING/401(k)
PLAN
Established Under Revenue Procedure 89-9
IRS Serial No. D265755a (Standardized) and D365756a (Non-standardized)
Massachusetts Mutual Life Insurance Company of Springfield, Massachusetts
(MassMutual) has prepared this Profit-Sharing/401(k) Plan for Employers
interested in providing retirement benefits for their Employees. Any Company may
adopt this Plan, provided that it executes an agreement, hereinafter referred to
as the Adoption Agreement, delivers a copy of the executed Adoption Agreement to
MassMutual and agrees to conform to and abide by all of the terms and provisions
of this Plan. The Company must also apply for and have issued to it a group
annuity contract to fund the Plan and to provide benefits under the Plan. The
Company may also apply for and have issued to it individual life insurance
Policies.
MassMutual has received a favorable Opinion Letter for this Prototype plan from
the Internal Revenue Service in accordance with Revenue Procedure 89-9. A copy
of that Opinion Letter is contained in the Adoption Agreement. MassMutual
strongly suggests that the Company adopting the non-standardized Plan file with
the appropriate Internal Revenue Service Key District Office for a Determination
Letter. If the Company adopting the standardized Plan maintains or later adopts
another Plan in addition to this Plan, MassMutual strongly suggests that the
adopting Company file with the appropriate Internal Revenue Service Key District
Office for a Determination Letter.
PURPOSE OF PLAN
The Company establishes this Plan to provide funds for its Employees' retirement
and to provide funds for their Beneficiaries in the event of death. The benefits
provided in this Plan shall be paid from a Group Annuity Contract and individual
life insurance policies issued to the Company. The Plan is established and shall
be maintained for the exclusive benefit of eligible Employees and their
Beneficiaries. If the Company adopts this Plan as an amendment to an existing
plan, the existing plan shall be superseded by this Plan.
This Plan and any related documents are instruments having IMPORTANT FINANCIAL,
LEGAL AND TAX IMPLICATIONS. Neither MassMutual nor its representatives can give
assurances that the adoption of this Plan shall create a qualified Plan for a
particular Company. Each Company must assume responsibility for the tax or legal
aspects pertaining to its Plan. EACH COMPANY SHOULD CONSULT ITS OWN ATTORNEY FOR
LEGAL ADVICE.
References to Parts and to numbered Paragraphs relate to the Plan document and
those made to Sections relate to the Adoption Agreement.
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PART I - DEFINITIONS
1.1 ADMINISTRATOR - The person or persons designated by the Company in
accordance with Paragraph 19.1 to manage the Plan. If no person is
appointed, the Administrator shall be the Company.
1.2 ANNIVERSARY DATE - The first day of each Plan Year designated in
Section (C) by the Company.
1.3 ANNUAL ADDITIONS - The sum of the following amounts credited to a
Participant's Account for the Limitation Year:
(a) Company contributions,
(b) Participant contributions,
(c) Forfeitures,
(d) Amounts allocated, after March 31, 1984, to an individual
medical account, as defined in Code Section 415(l)(2), which
is part of a pension or annuity plan maintained by the
Company, are treated as Annual Additions to a defined
contribution plan. Also, amounts derived from contributions
paid or accrued after December 31, 1985, in taxable years
ending after such date, which are attributable to
post-retirement medical benefits, allocated to the separate
account of a key employee, as defined in Code Section
419A(d)(3), under a welfare benefit fund, as defined in Code
Section 419(e), maintained by the Company, are treated as
Annual Additions to a defined contribution plan, and
(e) Allocations under a simplified employee pension plan.
For this purpose, any Excess Annual Additions applied under Paragraphs
5.4 or 5.5 in the Limitation Year to reduce Company contributions shall
be considered Annual Additions for such Limitation Year.
The Annual Addition for any Limitation Year beginning before January 1,
1987 shall not be recomputed to treat all Participant contributions as
an Annual Addition.
1.4 AUTOMATIC JOINT AND SURVIVOR ANNUITY - An immediate annuity for the
life of the Participant with a survivor annuity for the life of the
Participant's Spouse which is not less than 50 percent and not more
than 100 percent of the amount of the annuity which is payable during
the joint lives of the Participant and his Spouse, and which is the
amount of benefit which can be purchased with the Participant's vested
account balance. The percentage of the survivor annuity under the Plan
shall be 50 percent unless a different percentage is elected by a
Participant.
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1.5 BENEFICIARY - The person or persons designated under Paragraph 15.4 in
accordance with Code Section 401(a)(9) (and the Regulations
thereunder), to receive any benefits under the Plan on account of the
death of the Participant. If any Policy is issued hereunder on the life
of a Participant, the Beneficiary thereunder shall be designated
separately under such Policy.
1.6 BENEFITING - A Participant is treated as benefiting under the Plan for
any Plan Year during which the Participant received or is deemed to
receive an allocation in accordance with Code Section 1.410(b)-3(a).
1.7 BUSINESS DAY- A day on which the New York Stock Exchange is open for
business.
1.8 CODE - The Internal Revenue Code of 1986, as amended.
1.9 COMPANY - The employer adopting this Plan.
1.10 COMPANY MATCHING CONTRIBUTIONS - If elected in Section (I), the Company
may contribute money to match the Participant's Elective Deferrals
and/or Participant Matched Contributions. The amount of the
contribution shall be determined in accordance with the formula elected
in Section (I).
1.11 COMPANY PROFIT-SHARING CONTRIBUTIONS - If elected in Section (K), the
Company may make an extra contribution to the Plan. The amount of the
contribution is determined at the sole discretion of the Company. The
Administrator shall allocate Company Profit-Sharing Contributions to
Participants' Accounts in accordance with the allocation formula
elected in Section (K). Company Profit-Sharing Contributions shall be
allocated to the Account of each Participant who has completed the
requirements elected in Section (K). In the case of a Participant whose
Entry Date is other than the first day of the Plan Year, all Hours of
Service during the Plan Year in which participation commenced (or
recommenced), including Hours of Service credited to a Participant
prior to his Entry Date, shall be taken into account when determining
whether or not the Participant has met the Hours of Service requirement
during the Plan Year.
1.12 COMPANY QUALIFIED MATCHING CONTRIBUTIONS - If elected in Section (I),
the Company may contribute money to match the Participant's Elective
Deferrals and/or Participant Matched Contributions. These contributions
are subject to the distribution and nonforfeitability requirements
under Code Section 401(k) when made. The amount of the contribution
shall be determined in accordance with the formula elected in Section
(I).
1.13 COMPANY QUALIFIED NONELECTIVE CONTRIBUTIONS - If elected in Section
(H), the Company may elect to make an extra annual contribution to the
Plan. These contributions are nonforfeitable when made; and are
distributable only in accordance with the distribution provisions of
Code Section 401(k).
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In addition, in accordance with Paragraphs 4.3(a) and 4.5(a), a Company
may make Qualified Nonelective Contributions on behalf of non-Highly
Compensated Employees that are sufficient to satisfy either the Actual
Deferral Percentage test or the Actual Contribution Percentage test, or
both, pursuant to Regulations under the Code.
1.14 COMPENSATION - As elected by the Company in Section (E), for all
purposes of this Plan other than Part V, Limitation on Allocations,
Compensation shall mean all of each Participant's:
(a) INFORMATION REQUIRED TO BE REPORTED UNDER CODE SECTIONS 6041 AND
6051 (Wages, Tips and Other Compensation as reported on Form W-2).
Compensation is defined as wages within the meaning of Code Section
3401(a) and all other payments of compensation to an Employee by the
Company (in the course of the Company's trade or business) for which
the Company is required to furnish the Employee with a written
statement under Code Sections 6041(d), 6051(a)(3) and 6052.
Compensation must be determined without regard to any rules under Code
Section 3401(a) that limit the remuneration included in wages based on
the nature or location of the employment or the services performed
(such as the exception for agricultural labor in Code Section
3401(a)(2)).
(b) CODE SECTION 3401(A) WAGES. Compensation is defined as wages as
defined in Code Section 3401(a) for the purposes of income tax
withholding at the source, but determined without regard to any rules
that limit the remuneration included in wages based on the nature or
location of the employment or the services performed (such as the
exception for agricultural labor in Code Section 3401(a)(2)).
(c) CODE SECTION 415 SAFE-HARBOR COMPENSATION UNDER IRS REG. SECTION
415-2(d)(10). Compensation is defined as wages, salaries, and fees for
professional services and other amounts received (without regard to
whether or not an amount is paid in cash) for personal services
actually rendered in the course of employment with the Company to the
extent that the amounts are includible in gross income (including, but
not limited to, commissions paid to salesmen, compensation for services
on the basis of a percentage of profits, commissions on insurance
premiums, tips, bonuses, fringe benefits, and reimbursements and
expense allowances under a nonaccountable plan as described in IRS Reg.
Section 1.62-2(c)), and excluding all other amounts including the
following: (1) Company contributions to a plan of deferred compensation
which are not includible in the Employee's gross income for the taxable
year in which contributed, or Company contributions under a simplified
Employee pension plan to the extent such contributions are deductible
by the Employee, or any distributions from a plan or deferred
compensation; (2) Amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by the
Employee either becomes freely transferable or is no longer subject to
a substantial risk of forfeiture; (3) Amounts realized from the sale,
exchange or other disposition of stock acquired under a qualified stock
option; and (4) Other amounts which received special tax benefits, or
contributions made by the Company (whether or not under a salary
reduction agreement) towards the purchase of an annuity contract
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described in Code Section 403(b) (whether or not the contributions are
actually excludable from the gross income of the Employee).
(d) TOTAL COMPENSATION AS DEFINED UNDER IRS REG. SECTION 1.415-2(D)(1)
AND (2). Compensation is defined as immediately above in Subparagraph
1.14(c), but also including the following: (1) In the case of a
Participant who is an Employee within the meaning of Code Section
401(c)(1) and the regulations thereunder, the Participant's earned
income (as described in Code Section 401(c)(2) and the regulations
thereunder). (2) Amounts described in Code Sections 104(a)(3), 105(a)
and 105(h), but only to the extent that these amounts are includible in
the gross income of the Employee. (3) Amounts paid or reimbursed by the
Company for moving expenses incurred by an Employee, but only to the
extent that these amounts are not deductible by the Employee under Code
Section 217. (4) The value of a non-qualified stock option granted to
an Employee by the Company, but only to the extent that the value of
the option is includible in the gross income of the Employee for the
taxable year in which granted. (5) The amount includible in the gross
income of an Employee upon making the election described in Code
Section 83(b).
The Compensation of each Participant taken into account annually for
determining all benefits provided under the Plan for any Plan Year
shall not exceed $150,000, as adjusted for increases in the
cost-of-living in accordance with Code Section 401(a)(17)(B). The
cost-of-living adjustment in effect for a calendar year applies to the
plan year beginning in such calendar year. If a plan year consists of
fewer than 12 months, the Compensation limit is an amount equal to the
otherwise applicable annual compensation limit multiplied by a
fraction, the numerator of which is the number of months in the short
plan year, and the denominator of which is 12.
In determining the Compensation of a Participant for purposes of this
limitation, the rules of Code Section 414(q)(6) shall apply, except in
applying such rules, the term "family" shall include only the Spouse of
the Participant and any lineal descendants of the Participant who have
not attained age 19 before the close of the year. If, as a result of
the application of such rules, the adjusted $150,000 limitation is
exceeded, then (except for the purposes of determining the portion of
Compensation up to the integration level if this Plan provides for
permitted disparity), the limitation shall be prorated among the
affected individuals in proportion to each such individual's
Compensation as determined under this Paragraph prior to the
application of this limitation.
For any self-employed individual covered under the Plan, Compensation
shall mean earned income. Earned income means the net earnings from
self-employment in the trade or business with respect to which the Plan
is established, for which personal services of the individual are a
material income-producing factor. Net earnings shall be determined
without regard to items not included in gross income and the deductions
allocable to such items. Net earnings are reduced by contributions by
the Company to a qualified plan to the extent deductible under Code
Section 404. Net earnings shall be determined with regard to the
deduction allowed to the Company by Code Section 164(f) for taxable
years beginning after December 31, 1989.
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1.15 CONTRACT - The group annuity contract issued by the Insurance Company
to the Company or as specified in Section (B).
1.16 DEFERRED SALARY AGREEMENT - The agreement entered into by a Participant
with the Company to reduce his Compensation pursuant to Paragraph 1.20.
Any Deferred Salary Agreement or other deferral mechanism cannot be
adopted retroactively.
1.17 DIRECT ROLLOVER - A direct rollover is a payment by the plan to the
eligible retirement plan specified by the distributee.
1.18 EFFECTIVE DATE - The date elected in Section (C) as the first day of
the first Plan Year.
1.19 ELECTION PERIOD - The period during which a Participant may waive the
Preretirement Survivor Annuity under Paragraph 15.2. If Paragraph 14.3
is operative, this period begins on the first day of the Plan Year in
which the Participant attains age 35 and ends on the date of the
Participant's death. If a Participant separates from service prior to
the first day of the Plan Year in which age 35 is attained, with
respect to the account balance as of the date of separation, the
Election Period shall begin on the date of separation. In addition, a
Participant who has not yet attained age 35 as of the end of any
current Plan Year may make a special Qualified Election to waive the
Preretirement Survivor Annuity for the period beginning on the date of
such election and ending on the first day of the Plan Year in which the
Participant attains age 35. Such election shall not be valid unless the
Participant receives a written explanation of the Preretirement
Survivor Annuity in such terms as are comparable to the explanation
required under Paragraph 14.3. Preretirement Survivor Annuity coverage
shall be automatically reinstated as of the first day of the Plan Year
in which the Participant attains age 35. Any new waiver on or after
such date shall be subject to the full requirements of Paragraphs 1.44
and 15.2.
1.20 ELECTIVE DEFERRALS - If elected in Section (G), the Company may make
contributions to the Plan at the election of the Participant, in lieu
of cash Compensation. Elective Deferrals shall include contributions
made pursuant to a Deferred Salary Agreement or other deferral
mechanism. Elective Deferrals shall not include any deferrals properly
distributed as Excess Annual Additions.
1.21 ELIGIBLE RETIREMENT PLAN - An eligible retirement plan is an individual
retirement account described in Code Section 408(a), an individual
retirement annuity described in Code Section 408(b), an annuity plan
described in Code Section 403(a), or a qualified trust described in
Code Section 401(a), that accepts the Participant's Eligible Rollover
Distribution. However, in the case of an Eligible Rollover Distribution
to the surviving spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity. For purposes of
this definition, a former spouse who is the alternate payee under a
qualified domestic relations order, as defined in section 414(p) of the
Code may make an Eligible
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Rollover Distribution to an Eligible Retirement Plan described in Code
Section 402(c)(8)(B).
1.22 ELIGIBLE ROLLOVER DISTRIBUTION - An eligible rollover distribution is
any distribution of all or any portion of the balance to the credit of
the Participant or Spousal Beneficiary, except that an eligible
rollover distribution does not include: any distribution that is one of
a series of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
Participant or Spousal Beneficiary or the joint lives (or joint life
expectancies) of the Participant and the Participant's designated
beneficiary (if permitted in the Plan), or for a specified period of
ten years or more; any distribution to the extent such distribution is
required under Code Section 401(a)(9); and the portion of any
distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to
Employer securities).
1.23 EMPLOYEE - Any person employed by the Company or any other Company
required to be aggregated under Paragraph 1.24. The term Employee shall
also include an individual who is self-employed, an owner-Employee, or
a Leased Employee.
Self-employed individual means a person who has earned income for the
taxable year from the trade or business for which the Plan is
established; also, a person who would have had earned income but for
the fact that the trade or business had no net profits for the taxable
year.
Owner-Employee means a person who is sole proprietor, or who is a
partner owning more than 10 percent of either the capital or profits
interest in the partnership.
1.24 EMPLOYER - The entity that establishes or maintains this Plan; any
organization which has adopted this Plan with the consent of such
establishing Employer; and any successor of such Employer. Except as
provided for purposes of Limitation on Allocations in Paragraph 5.7,
and for separate lines of business in Code Section 414(r), all
Employees of all corporations which are members of a controlled group
of corporations (as defined in Code Section 414(b)), all trades or
businesses (whether or not incorporated) which are under common control
(as defined in Code Section 414(c)), all members of an affiliated
service group (as defined in Code Section 414(m)) and any other entity
required to be aggregated pursuant to Regulations under Code Section
414(o) shall be treated as employed by a single Employer.
1.25 ENTRY DATE - The date on which an Employee becomes a Participant as
designated in Section (D) after satisfying the eligibility requirements
of Section (D).
1.26 EXCESS AGGREGATE CONTRIBUTIONS - With respect to any Plan Year, the
excess of:
(a) The aggregate Actual Contribution Percentage amounts taken
into account in computing the numerator of the ACP actually
made on behalf of Highly Compensated Employees for such Plan
Year, over
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(b) The maximum Actual Contribution Percentage amounts permitted
by the ACP test (determined by reducing contributions made on
behalf of Highly Compensated Employees in order of their ACP,
beginning with the highest of such percentages).
Such determination shall be made after first determining Excess
Deferrals pursuant to Paragraph 4.2(a) and then determining Excess
Contributions pursuant to Paragraph 4.2(b).
1.27 EXCESS ANNUAL ADDITIONS - The excess of the Participant's Annual
Additions for the Limitation Year over the Maximum Permissible Amount.
1.28 EXCESS CONTRIBUTIONS - With respect to any Plan Year, the excess of:
(a) The aggregate amount of Company contributions actually taken
into account in computing the ADP of Highly Compensated
Employees for such Plan Year, over
(b) The maximum amount of such contributions permitted by the ADP
test (determined by reducing contributions made on behalf of
Highly Compensated Employees in order of their ADPs, beginning
with the highest of such percentages).
1.29 EXCESS DEFERRALS - A Participant's Elective Deferrals that are
includible in the Participant's gross income under Code Section 402(g)
to the extent such Participant's Elective Deferrals for a taxable year
exceed the dollar limitation under such Code Section. Excess Deferrals
shall be treated as Annual Additions under the Plan, unless such
amounts are distributed no later than the first April 15 following the
close of the Participant's taxable year.
1.30 HIGHLY COMPENSATED EMPLOYEE - The group of Highly Compensated Employees
("HCEs") includes any Employee who is employed by the Employer on the
snapshot day and who (i) is a 5-percent owner on the snapshot day, (ii)
receives compensation for the Plan Year in excess of the Code Section
414(q)(1)(B) amount for the Plan Year, (iii) receives compensation for
the Plan Year in excess of the Code Section 414(q)(1)(C) amount for the
Plan Year and is a member of the top paid group of Employees within the
meaning of Code Section 414(q)(4), or (iv) is an officer on the
snapshot day and receives compensation during the Plan Year that is
greater than 50 percent of the dollar limitation in effect under Code
Section 415(b)(1)(A). If no officer satisfies the compensation
requirement of (iv) above, the highest paid officer for such Plan Year
shall be treated as a HCE.
For purposes of determining who is a HCE, compensation means
compensation within the meaning of Code Section 415(c)(3) as set forth
in the Plan for purposes of determining the Code Section 415 limits,
except that amounts excluded pursuant to Code Sections 125, 402(e)(3),
402(h)(1)(B) and 403(b) are included. If compensation used for purposes
of determining the Code Section 415 limits under the Plan is not
defined as total compensation as provided under Code Section
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415(c)(3) and the regulations thereunder, then for purposes of
determining who is a HCE, compensation means compensation within the
meaning of Code Section 1.415-2(d)(11)(i) of the Income Tax
Regulations, except that amounts excluded pursuant to Code Sections
125, 402(e)(3), 402(h)(1)(B) and 403(b) are included.
If, as of the snapshot day, an Employee is a family member of either a
5-percent owner (whether active or former) or a HCE who is one of the
10 most HCEs ranked on the basis of compensation paid by the Employer
during such year, then the family member and the 5-percent owner or
top-ten HCE shall be aggregated. In such case, the family member and
5-percent owner or top-ten HCE shall be treated as a single Employee
receiving compensation and Plan contributions or benefits equal to the
sum of the compensation and contributions and benefits of the family
member and 5-percent owner or top-ten HCE. For purposes of this
Section, family member includes the spouse, lineal ascendants and
descendants of the Employee or former Employee, and the spouses of such
ascendants and descendants.
The snapshot day selected in Section (C)(5) must be a single day during
the Plan Year that is reasonably representative of the Employer's
workforce and the Plan's coverage throughout the Plan Year. In
addition, if the Employer uses a snapshot day in substantiating
compliance with the nondiscrimination requirements of Code Sections
401(a)(4), 410(b), or 414(s), the same snapshot day must be used for
purposes of determining the HCEs.)
The group of HCEs will also include any Employee who during the Plan
Year:
(a) terminated employment prior to the snapshot day and was a HCE
in the prior Plan Year;
(b) terminated employment prior to the snapshot day and (i) was a
5-percent owner, or (ii) has compensation for the Plan Year
which is greater than or equal to the compensation of any
Employee who is treated as a HCE on the snapshot day (except
for Employees who are HCEs solely because they are 5-percent
owners or officers), or (iii) was an officer and has
compensation greater than or equal to the compensation of any
other officer who is a HCE on the snapshot day solely because
that person is an officer; or
(c) becomes employed subsequent to the snapshot day during the
Plan Year and (i) is a 5-percent owner, or (ii) has
compensation for the Plan Year that is greater than or equal
to the compensation of any Employee who is treated as a HCE on
the snapshot day (except Employees who are HCEs solely because
they are 5-percent owners or officers), or (iii) is an officer
and has compensation that is greater than or equal to the
compensation of any other officer who is a HCE on the snapshot
day solely because that person is an officer.
The determination of who is a HCE, including the determinations of the
number and identity of Employees in the top paid group, the number of
Employees treated as officers and the compensation that is taken into
account, will be made in accordance
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with Code Section 414(q) and Code Section 1.414(q)-1T of the temporary
Income Tax Regulations to the extent they are not inconsistent with the
method established above.
1.31 HOUR OF SERVICE -
(a) Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Company. These
hours shall be credited to the Employee for the computation
period in which the duties are performed;
(b) Each hour for which an Employee is paid, or entitled to
payment, by the Company on account of a period of time during
which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation,
holiday, illness, incapacity (including disability), layoff,
jury duty, military duty or leave of absence. No more than 501
Hours of Service shall be credited under this Paragraph for
any single continuous period (whether or not such period
occurs in a single computation period). Hours under this
Paragraph shall be calculated and credited pursuant to Section
2530.200b-2 of the Department of Labor Regulations which is
incorporated herein by this reference; and
(c) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Company. The
same Hours of Service shall not be credited both under
Subparagraph (a) or Subparagraph (b), as the case may be, and
under this Subparagraph (c). These Hours shall be credited to
the Employee for the computation period or periods to which
the award or agreement pertains rather than the computation
period in which the award, agreement or payment is made.
(d) Where an Employee leaves a non-temporary position with the
Company to enter the United States military service and
receives an honorable discharge upon completion of military
service, application for reemployment must be made within the
following time periods: if the military service is less than
31 days, the employee must report for reemployment on the
first full working day; if the service is from 31 to 181 days,
the employee must apply to the company within 14 days; and if
service is over 180 days, the employee must apply to the
Company within 90 days. If the employee is hospitalized or
injured, the time to apply to the Company is extended for two
years.
(e) Hours of Service shall be credited for employment with other
members of an affiliated service group (under Code Section
414(m)), a controlled group of corporations (under Code
Section 414(b)), a group of trades or businesses under common
control (under Code Section 414(c)), of which the adopting
Company is a member, and any other entity required to be
aggregated with the Company pursuant to Code Section 414(o)
and the Regulations thereunder. Hours of Service shall also be
credited for any individual considered an Employee for
purposes of this Plan under Code Section 414(n) or Section
414(o) and the Regulations thereunder.
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(f) Hours of Service shall be determined on the basis of the
method selected in Section (D).
(g) Solely for purposes of determining whether a Break in Service,
as defined in Paragraph 1.36, for participation and vesting
purposes has occurred in a computation period, an individual
who is absent from work for maternity or paternity reasons
shall receive credit for the Hours of Service which would
otherwise have been credited to such individual but for such
absence, or in any case in which such hours cannot be
determined, 8 Hours of Service per day of such absence. For
purposes of this Subparagraph, an absence from work for
maternity or paternity reasons means an absence (1) by reason
of the pregnancy of the individual, (2) by reason of a birth
of a child of the individual, (3) by reason of the placement
of a child with the individual in connection with the adoption
of such child by such individual, or (4) for purposes of
caring for such child for a period beginning immediately
following such birth or placement.
The Hours of Service credited under this Subparagraph shall be
credited (1) in the computation period in which the absence
begins if the crediting is necessary to prevent a Break in
Service in that period, or (2) in all other cases, in the
following computation period.
1.32 INSURANCE COMPANY - Massachusetts Mutual Life Insurance Company or MML
Pension Insurance Company, or with respect to Policies, any other legal
reserve life insurance company authorized to do business in the state
of policy issue.
1.33 LEASED EMPLOYEE - Any person (other than an Employee of the recipient)
who pursuant to an agreement between the recipient and any other person
("leasing organization"), has performed services for the recipient (or
for the recipient and related persons determined in accordance with
Code Section 414(n)(6)) on a substantially full-time basis for a period
of at least one year, and such services are of a type historically
performed by Employees in the business field of the recipient Company.
Contributions or benefits provided a leased Employee by the leasing
organization which are attributable to services performed for the
recipient Company shall be treated as provided by the recipient
Company.
A leased Employee shall not be considered an Employee of the recipient
if: (1) such Employee is covered by a money purchase pension plan
providing: (i) a non-integrated Company contribution rate of at least
10 percent of Compensation, as defined in Code Section 415(c)(3) but
including amounts contributed by the Company pursuant to a Deferred
Salary Agreement which are excludable from the Employee's gross income
under Code Sections 125, 402(e)(3), 402(h)(1)(B) or 403(b), (ii)
immediate participation, and (iii) full and immediate vesting; and (2)
leased Employees do not constitute more than 20 percent of the
recipient's non-Highly Compensated workforce.
1.34 LIMITATION YEAR - A calendar year or any other 12-consecutive month
period elected by the Company in Section (C). All qualified plans
maintained by the
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Company must use the same Limitation Year. If the Limitation Year is
amended to a different 12-consecutive month period, the new Limitation
Year must begin on a date within the Limitation Year in which the
amendment is made.
1.35 MAXIMUM PERMISSIBLE AMOUNT - The maximum Annual Addition that may be
contributed or allocated to a Participant's Account under the Plan for
any Limitation Year shall not exceed the lesser of: (a) the defined
contribution dollar limitation, or (b) 25 percent of the Participant's
Compensation for the Limitation Year.
The Compensation limit referred to in (b), shall not apply to any
contribution for medical benefits (within the meaning of Code Sections
401(h) or 419A(f)(2)) which is otherwise treated as an Annual Addition,
under Code Sections 415(l)(1) or 419A(d)(2).
The defined contribution dollar limitation is $30,000 or if greater,
one-fourth of the defined benefit dollar limitation set forth in Code
Section 415(b)(1) as in effect for the Limitation Year.
If a short Limitation Year is created because of an amendment changing
the Limitation Year to a different 12-consecutive month period, the
Maximum Permissible Amount shall not exceed the defined contribution
dollar limitation multiplied by the following fraction:
Number of months in the short Limitation Year
12
1.36 ONE-YEAR BREAK IN SERVICE - A 12-consecutive month period (computation
period) during which the Participant does not complete more than 500
Hours of Service with the Company.
1.37 PARTICIPANT - Any eligible active Employee of the Company who became a
member of this Plan on an Entry Date.
1.38 PARTICIPANT MATCHED CONTRIBUTIONS - The Company may elect in Section
(J) to allow Participants to contribute amounts to the Plan based on
nondeferred (after-tax) Compensation. Participants may or may not be
required to make the contribution to the Plan. However, if the
contribution is made, it shall cause the Company to contribute amounts
to the Plan on behalf of the Participant known as Company Matching
Contributions or Company Qualified Matching Contributions.
1.39 PARTICIPANT NONDEDUCTIBLE VOLUNTARY CONTRIBUTIONS - The Company may
elect in Section (J) to allow the Participant to contribute amounts to
the Plan based on non-deferred (after-tax) Compensation. The
Participant is not required to contribute to the Plan and the
contributions shall not cause the Company to contribute additional
amounts to the Plan on behalf of a Participant, but they provide
additional benefits for the Participant under the Plan.
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1.40 PLAN - The MassMutual FLEXINVEST(R) Prototype Profit-Sharing/401(k)
Plan as applied separately to the Company.
1.41 PLAN YEAR - The 12-consecutive month period designated by the Company
in Section (C).
1.42 POLICY - An individual life insurance policy issued by the Insurance
Company to the Company on the life of a Participant.
1.43 PROTOTYPE PLAN - A plan, the form of which is the subject of a
favorable opinion letter from the Internal Revenue Service.
1.44 QUALIFIED ELECTION - A waiver of an Automatic Joint and Survivor
Annuity or a Preretirement Survivor Annuity. A waiver shall not be
effective unless: (a) the Participant's Spouse consents in writing to
the election; (b) the election designates a specific Beneficiary,
including any class of Beneficiaries or any contingent Beneficiary,
which may not be changed without spousal consent (or the Spouse
expressly permits designations by the Participant without any further
spousal consent); (c) the Spouse's consent acknowledges the effect of
the election; and (d) the Spouse's consent is witnessed by a plan
representative or notary public. Additionally, a Participant's waiver
of the Automatic Joint and Survivor Annuity shall not be effective
unless the election designates a form of benefit payment which may not
be changed without spousal consent (or the Spouse expressly permits
designations by the Participant without any further spousal consent).
If it is established to the satisfaction of a plan representative that
there is no Spouse or that the Spouse cannot be located, a waiver shall
be deemed a Qualified Election.
Any consent by a Spouse obtained under this provision (or establishment
that the consent of a Spouse may not be obtained) shall be effective
only with respect to such Spouse. A consent that permits designations
by the Participant without any requirement of further consent by such
Spouse must acknowledge that the Spouse has the right to limit consent
to a specific Beneficiary, and a specific form of benefit where
applicable, and that the Spouse voluntarily elects to relinquish either
or both of such rights. A revocation of a prior waiver may be made by a
Participant without the consent of the Spouse at any time before the
commencement of benefits. The number of revocations shall not be
limited. No consent obtained under this provision shall be valid unless
the Participant has received notice as provided in Paragraph 14.3.
1.45 SPOUSE - The Spouse or surviving spouse of the Participant, provided
that a former spouse shall be treated as the Spouse or surviving spouse
and a current spouse shall not be treated as the Spouse or surviving
spouse to the extent provided under a qualified domestic relations
order as described in Code Section 414(p).
1.46 STRAIGHT LIFE ANNUITY - An annuity payable in equal installments for
the life of the Participant that terminates upon the Participant's
death.
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1.47 TERMINATION OF EMPLOYMENT - The separation from service of the
Participant before Normal Retirement Date other than by reason of
death, disability as determined under Section (F)or early retirement,
if elected in Section (F).
1.48 VALUATION DATE - Each Business Day.
1.49 YEAR OF SERVICE - A 12-consecutive month period (computation period)
during which the Employee completes at least 1,000 Hours of Service.
The applicable 12-consecutive month period for eligibility and
participation purposes can be found in Part III, and for vesting in
Part IX.
PART II - CREDITING SERVICE
2.1 GENERAL METHOD OF CREDITING SERVICE. The Administrator shall count
actual Hours of Service during the applicable 12-consecutive month
computation period as elected under Section (D). The Employee shall
receive credit for a Year of Service if the Employee is credited with
1000 or more Hours of Service during the computation period and shall
incur a One-Year Break in Service if the Participant is not credited
with more than 500 Hours of Service during the computation period. In
general, the Employee's entitlement with respect to participation and
vesting shall be determined by totaling the number of Years of Service
credited to the Employee.
2.2 EQUIVALENCY METHODS BASED UPON PERIODS OF EMPLOYMENT. The Administrator
shall credit the Employee with a specified number of Hours of Service
for each period of employment if the Employee would receive credit for
at least one Hour of Service in that period of employment as elected
under Section (D). The periods of employment on which equivalency may
be based, if applicable and subject to this election, are: days worked,
weeks worked, semi-monthly payroll period and months worked. The
Employee shall receive credit for a Year of Service if the Employee is
credited with 1000 or more equivalency Hours of Service during a
computation period and shall incur a One-Year Break in Service if the
Participant does not complete more than 500 equivalency Hours of
Service during the computation period. In general, the Employee's
entitlement with respect to participation and vesting shall be
determined by totaling the number of Years of Service credited to the
Employee.
2.3 ONE METHOD OF CREDITING SERVICE FOR ALL EMPLOYEES. The Administrator
shall credit Service for all classifications of Employees under the
Plan using the same method of crediting service set forth in Section
(D).
2.4 SERVICE WITH A PREDECESSOR EMPLOYER. Where the Company maintains the
plan of a predecessor employer, service for such predecessor employer
shall be treated as service for the Company for purposes of determining
an Employee's eligibility to participate in the Plan and vesting. Where
a Company establishes the Plan which was not maintained by a
predecessor employer, service with the
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predecessor employer, including a sole proprietorship or partnership,
shall be treated as service with the Company for eligibility to
participate and vesting only if elected by the Company in Section (D).
PART III - ELIGIBILITY AND PARTICIPATION
3.1 ELIGIBILITY. Each present and future Employee of the Company shall be
entitled to participate in this Plan on the Effective Date or on an
Entry Date coincident with or immediately following the date on which
he satisfies the classification, service, and age requirements set
forth in Section (D). If this Plan amends and restates a former plan
that was qualified under Code Sections 401(a) or 403(a), each Employee
who was a Participant (or entitled to participate) in the former plan
on the day before the Effective Date of this restated Plan shall
continue as a Participant (or continue to be entitled to participate)
in the Plan.
3.2 ELIGIBILITY COMPUTATION PERIOD. Years of Service and Breaks in Service
shall be measured on the same eligibility computation period. The
initial eligibility computation period is the 12-consecutive month
period beginning on the date the Employee first performs an Hour of
Service for the Company (employment commencement date).
The succeeding 12-consecutive month periods commence with the first
Plan Year which commences prior to the first anniversary of the
Employee's employment commencement date regardless of whether the
Employee is entitled to be credited with 1,000 Hours of Service during
the initial eligibility computation period. An Employee who is credited
with 1,000 Hours of Service in both the initial eligibility computation
period and the first Plan Year which commences prior to the first
anniversary of the Employee's initial eligibility computation period
shall be credited with two Years of Service for purposes of eligibility
to participate.
3.3 BREAK IN SERVICE/RETURN TO SERVICE. A former Participant shall become a
Participant immediately upon his return to the employ of the Company if
such former Participant had a nonforfeitable right to all or a portion
of his account balance derived from Company contributions at the time
of his termination.
For a former Participant who did not have any nonforfeitable right to
the account balance derived from Company contributions, Years of
Service before a period of consecutive One-Year Breaks in Service shall
not be taken into account in computing eligibility service if the
number of consecutive One-Year Breaks in Service in such period equals
or exceeds the greater of 5 or the aggregate number of Years of
Service. Such aggregate number of Years of Service shall not include
any Years of Service disregarded under the preceding sentence by reason
of prior Breaks in Service.
If a Participant's Years of Service are disregarded pursuant to the
preceding paragraph, such Participant shall be treated as a new
Employee for eligibility purposes. If a Participant's Years of Service
may not be disregarded pursuant to the
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preceding paragraph, such Participant shall continue to participate in
the Plan, or, if terminated, shall participate immediately upon
reemployment.
In the event a Participant is no longer a member of an eligible class
of Employees and becomes ineligible to participate but has not incurred
a Break in Service, such Employee shall participate immediately upon
returning to an eligible class of Employees. If such Participant incurs
a Break in Service, eligibility shall be determined pursuant to the
three preceding paragraphs.
In the event an Employee who is not a member of the eligible class of
Employees becomes a member of the eligible class, such Employee shall
participate immediately if such Employee has satisfied the minimum age
and service requirements and would have otherwise previously become a
Participant.
3.4 NOTIFICATION OF ELIGIBLE EMPLOYEES. The Administrator shall notify each
Employee of his right to participate in the Plan prior to the Entry
Date he first becomes entitled to participate. On the date of such
notification, the Administrator shall furnish such Employee with a
summary plan description of the Plan, the options available to him
under the Plan and an enrollment form. If a Participant requests to
have a Policy purchased on his behalf, the Participant shall also
complete an application for the Policy. To become a Participant as of
the Entry Date provided in Section (D), the Employee must complete the
form and file it with the Administrator not later than one week after
his Entry Date. If the Employee files the form later than one week
after his Entry Date, he shall become a Participant on the first day of
the second calendar month next following the date he files the form.
3.5 CONDITIONS OF CONTINUED PARTICIPATION. As a condition of continued
participation under the Plan, each Participant agrees to:
(a) Limit his recourse for payment of any benefits to which he is
entitled to the assets of the Plan;
(b) Complete and file with the Administrator an enrollment form, a
Deferred Salary Agreement and such other forms as required by
the Administrator or Insurance Company;
(c) Submit such evidence of insurability as may be required; and
(d) Provide the Administrator with such information about himself
and his Beneficiary as required by Paragraph 19.10.
PART IV - CONTRIBUTIONS
4.1 CONTRIBUTIONS TO THE PLAN. The Company shall contribute to the Plan,
for each Plan Year:
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(a) Elective Deferrals (if elected in Section (G));
(b) Company Matching Contributions (if elected in Section (I));
(c) Company Qualified Matching Contributions (if elected in
Section (I));
(d) Company Profit-Sharing Contributions (if elected in Section
(K)); and
(e) Company Qualified Nonelective Contributions (if elected in
Section (H)).
Each Participant may, by written direction to the Administrator, elect
to make to the Plan:
(a) Participant Matched Contributions (if permitted by Section
(J));
(b) Participant Nondeductible Voluntary Contributions (if
permitted by Section (J)).
The Participant may suspend his contributions, if allowed, during any
time period by filing a written notice with the Administrator.
4.2 LIMITATIONS ON ELECTIVE DEFERRALS.
(a) Maximum Amount of Elective Deferrals: No Participant shall be
permitted to have Elective Deferrals made under this Plan, or
any other qualified plan maintained by the Company, during the
Participant's taxable year, in excess of the dollar
limitations contained in Code Section 402(g) in effect at the
beginning of such taxable year. With respect to any taxable
year, a Participant's elective deferrals are the sum of all
Company contributions made on behalf of such Participant
pursuant to an election to defer under any qualified CODA as
described in Code Section 401(k), a simplified employee
pension cash or deferred arrangement as described in Code
Section 402(h)(1)(B), any eligible deferred compensation plan
under Code Section 457, any plan as described under Code
Section 501(c)(18), and any Company contributions made on
behalf of a Participant for the purchase of an annuity
contract under Code Section 403(b) pursuant to a Deferred
Salary Agreement. A Participant may assign to this Plan any
Excess Deferrals made during a taxable year by notifying the
Administrator in writing on or before March 1st of the amount
of the Excess Deferrals to be designated to the Plan. A
Participant is deemed to notify the Administrator of any
Excess Deferrals that arise by taking into account only those
Elective Deferrals made to this Plan and any other plans of
this Employer. Notwithstanding any other provision of the
Plan, Excess Deferrals, plus any income and minus any loss
allocable thereto, shall be distributed no later than April 15
to any Participant to whose account Excess Deferrals were
assigned for the preceding year and who claims Excess
Deferrals for such taxable year.
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Excess Deferrals shall be adjusted for any income or loss. The
income or loss allocable to Excess Deferrals is the sum of
income or loss allocable to the Participant's Elective
Deferral account for the taxable year multiplied by a
fraction, the numerator of which is such Participant's Excess
Deferrals for the year and the denominator is the
Participant's account balance attributable to Elective
Deferrals plus any withdrawals of Elective Deferrals without
regard to any income or loss occurring during such taxable
year. In the event that any Excess Deferrals returned under
this Paragraph were matched by Company Matching Contributions,
those Company Matching Contributions, together with earnings,
shall be forfeited and applied under Paragraph 4.5(b).
(b) Actual Deferral Percentage: The Actual Deferral Percentage
(hereinafter "ADP") for Participants who are Highly
Compensated Employees for each Plan Year and the ADP for
Participants who are non-Highly Compensated Employees for the
same Plan Year must satisfy one of the following tests:
(1) The ADP for the Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ADP for
Participants who are non-Highly Compensated Employees for the
same Plan Year multiplied by 1.25; or
(2) The ADP for the Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ADP for
Participants who are non-Highly Compensated Employees for the
same Plan Year multiplied by 2.0, provided that the ADP for
Participants who are Highly Compensated Employees does not
exceed the ADP for Participants who are non-Highly Compensated
Employees by more than two (2) percentage points.
"Actual Deferral Percentage" shall mean, for a specified group
of Participants for a Plan Year, the average of the ratios
(calculated separately for each Participant in such group) of
(1) the amount of Company contributions actually paid over to
the Plan on behalf of such Participant for the Plan Year to
(2) the Participant's Compensation for such Plan Year.
Compensation taken into account for this purpose may be
limited to Compensation received by an employee while the
employee is a Participant. Company contributions on behalf of
any Participant shall include: (1) any Elective Deferrals made
pursuant to the Participant's deferral election, including
Excess Deferrals of the Highly Compensated Employees, but
excluding Excess Deferrals of Non-Highly Compensated Employees
that arise solely from Elective Deferrals made under the Plan
or plans of this Employer and Elective Deferrals that are
taken into account in the Actual Contribution Percentage test
(provided the ADP test is satisfied both with and without
exclusion of these Elective Deferrals); and (2) at the
election of the Company, Company Qualified Nonelective
Contributions and Company Qualified Matching Contributions.
For purposes of computing ADP's, an Employee who would be a
Participant but for the failure to make Elective Deferrals
shall be treated as a Participant on whose behalf no Elective
Deferrals are made.
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The ADP for any Participant who is a Highly Compensated
Employee for the Plan Year and who is eligible to have
Elective Deferrals (and Company Qualified Nonelective
Contributions or Company Qualified Matching Contributions, or
both, if treated as Elective Deferrals for purposes of the ADP
test) allocated to his accounts under two or more arrangements
described in Code Section 401(k) that are maintained by the
Company, shall be determined as if such Elective Deferrals
(and, if applicable, such Company Qualified Nonelective
Contributions or Company Qualified Matching Contributions, or
both) were made under a single arrangement. If a Highly
Compensated Employee participates in two or more cash or
deferred arrangements that have different Plan years, all cash
or deferred arrangements ending with or within the same
calendar year shall be treated as a single arrangement.
In the event that this Plan satisfies the requirements of Code
Sections 401(k), 401(a)(4), or 410(b) only if aggregated with
one or more other plans, or if one or more other plans satisfy
the requirements of such Code Sections only if aggregated with
this Plan, then this Paragraph shall be applied by determining
the ADP of Employees as if all such plans were a single plan.
Plans may be aggregated to satisfy Code Section 401(k) only if
they have the same Plan Year.
For purposes of determining the ADP of a Participant who is a
5 percent owner or one of the ten most highly-paid Highly
Compensated Employees, the Elective Deferrals (and Company
Qualified Nonelective Contributions or Qualified Matching
Contributions, or both, if treated as Elective Deferrals for
purposes of the ADP test) and Compensation of such Participant
shall include the Elective Deferrals (and, if applicable,
Company Qualified Nonelective Contributions and Qualified
Matching Contributions, or both) and Compensation for the Plan
Year of the family members (as defined in Code Section
414(q)(6)). The combined actual deferral ratio for the family
group shall be the actual deferral ratio determined by
combining the Elective Deferrals, Compensation and amounts
treated as Elective Deferrals of all the eligible family
members. Family members with respect to such Highly
Compensated Employees, shall be disregarded as separate
Employees in determining the ADP both for Participants who are
non-Highly Compensated Employees and for Participants who are
Highly Compensated Employees.
For purposes of determining the ADP test, Elective Deferrals,
Qualified Nonelective Contributions, and Qualified Matching
Contributions must be made before the last day of the
twelve-month period immediately following the Plan Year to
which contributions relate.
The Company shall maintain records sufficient to demonstrate
satisfaction of the ADP test and the amount of Company
Qualified Nonelective Contributions or Company Qualified
Matching Contributions, or both, used in such test. The
determination and treatment of the ADP amounts of any
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Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
4.3 EXCESS CONTRIBUTIONS.
(a) Extra Contribution: If the ADP limitation in Paragraph 4.2(b)
is not met, the Company may elect to make an extra Company
Qualified Nonelective Contribution to eligible non-Highly
Compensated Employees sufficient to satisfy the ADP limit. The
contribution shall be subject to the distribution and
nonforfeitability requirements of Code Section 401(k).
If the Company does not make such a contribution, a corrective
distribution of Excess Contributions will be made in
accordance with Section 4.3(b) below.
(b) Corrective Distributions of Excess: The Company may also
satisfy Paragraph 4.2(b) by distributing the Excess
Contributions in accordance with this Paragraph. Excess
Contributions, plus any income and minus any loss allocable
thereto, shall be distributed no later than the last day of
each Plan Year to Participants to whose accounts such Excess
Contributions were allocated for the preceding Plan Year. If
such excess amounts are distributed more than 2 1/2 months
after the last day of the Plan Year in which such excess
amounts arose, a ten (10) percent excise tax shall be imposed
on the Company maintaining the Plan with respect to such
amounts. Such distributions shall be made to Highly
Compensated Employees on the basis of the respective portions
of the Excess Contributions attributable to each of such
Employees. Excess Contributions shall be allocated among
Participants who are subject to the family member aggregation
rules of Code Section 414(q)(6) in proportion to the Elective
Deferrals of each family member that are combined to determine
the actual deferral ratio. Excess Contributions (including the
amounts recharacterized) shall be treated as Annual Additions
under the Plan.
Excess Contributions shall be adjusted for any income or loss
up to the date of distribution. The income or loss allocable
to Excess Contributions is the income or loss allocable to the
Participant's Elective Deferral account (and, if applicable,
the Company Qualified Nonelective Contribution account or the
Company Qualified Matching Contribution account or both) for
the Plan Year multiplied by a fraction, the numerator of which
is such Participant's Excess Contributions for the year and
the denominator is the Participant's account balance
attributable to Elective Deferrals (and Company Qualified
Nonelective Contributions or Company Qualified Matching
Contributions, or both, if any of such contributions are
included in the ADP test) plus any withdrawals of these
contributions and without regard to any income or loss
occurring during such Plan Year.
Excess Contributions shall be distributed from the
Participant's Elective Deferral account and Company Qualified
Matching Contribution account (if
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<PAGE> 29
applicable) in proportion to the Participant's Elective
Deferrals and Company Qualified Matching Contributions (to the
extent used in the ADP test) for the Plan Year. Excess
Contributions shall be distributed from the Participant's
Company Qualified Nonelective Contribution account only to the
extent that such Excess Contributions exceed the balance in
the Participant's Elective Deferral account and Company
Qualified Matching Contribution account. In the event that any
Excess Contributions returned under this Paragraph were
matched by Company Matching Contributions, those Company
Matching Contributions, together with earnings, shall be
forfeited and applied under Paragraph 4.5(b).
(c) Recharacterization: If all Participants are eligible to make
Participant contributions under the Plan, the Company may also
satisfy Paragraph 4.2(b) by recharacterizing the Excess
Contributions. A Participant may treat his Excess
Contributions as an amount distributed to him and then
contributed by him to the Plan. Excess Contributions may only
be recharacterized in the Plan from which they arose.
Recharacterized amounts shall remain nonforfeitable and
subject to the same distribution requirements as Elective
Deferrals. Amounts may not be recharacterized by a Highly
Compensated Employee to the extent that such amount in
combination with other Participant contributions made by that
Employee would exceed any stated limit under the Plan on
Participant contributions.
Recharacterization must occur no later than 2 1/2 months after
the last day of the Plan Year in which such Excess
Contributions arose and is deemed to occur no earlier than the
date the last Highly Compensated Employee is informed in
writing of the amount recharacterized and the consequences
thereof. Recharacterized amounts shall be taxable to the
Participant for the Participant's tax year in which the
Participant would have received them in cash.
4.4 LIMITATIONS ON COMPANY AND PARTICIPANT CONTRIBUTIONS. The Actual
Contribution Percentage ("hereinafter ACP") for Participants who are
Highly Compensated Employees for each Plan Year and the ACP for
Participants who are non-Highly Compensated Employees for the same Plan
Year must satisfy one of the following tests:
(a) The ACP for Participants who are Highly Compensated Employees
for the Plan Year shall not exceed the ACP for Participants
who are non-Highly Compensated Employees for the same Plan
Year multiplied by 1.25; or
(b) The ACP for Participants who are Highly Compensated Employees
for the Plan Year shall not exceed the ACP for Participants
who are non-Highly Compensated Employees for the same Plan
Year multiplied by 2.0, provided that the ACP for Participants
who are Highly Compensated Employees does not exceed the ACP
for Participants who are non-Highly Compensated Employees by
more than two (2) percentage points.
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"Actual Contribution Percentage" shall mean, for a specified group of
Participants for a Plan Year, the average of the ratios (calculated
separately for each Participant in such group) of (1) the Participant's
Actual Contribution Percentage amounts to (2) the Participant's
Compensation for the Plan Year. Compensation taken into account for
this purpose may be limited to Compensation received by an Employee
while the Employee is a Participant. Actual Contribution Percentage
amounts are the sum of the Participant Nondeductible Voluntary
Contributions, recharacterized Elective Deferrals (Paragraph 4.3(c)),
Participant Matched Contributions, Company Matching Contributions, and
Company Qualified Matching Contributions (to the extent not taken into
account for purposes of the ADP test) made under the Plan on behalf of
the Participant for the Plan Year. Such Actual Contribution Percentage
amounts shall not include Matching Contributions that are forfeited
either to correct Excess Aggregate Contributions or because the
contributions to which they relate are forfeited due to Excess
Deferrals, Excess Contributions, or Excess Aggregate Contributions.
Such Actual Contribution Percentage amounts shall include forfeitures
of Excess Aggregate Contributions or Company Matching Contributions
allocated to the Participant's Company Match Account, which shall be
taken into account in the year in which such forfeiture is allocated.
The Company may include in the ACP amounts, Elective Deferrals or
Company Qualified Nonelective Contributions, or both, so long as the
ADP test is met before the Elective Deferrals and Company Qualified
Nonelective Contributions are used in the ACP test and continues to be
met following the exclusion of these contributions that are used to
meet the ACP test. The inclusion of Company Qualified Nonelective
Contributions and Elective Contributions in the ACP amounts shall be
performed in a manner consistent with the provisions of Reg. Section
1.401(m)-1(b)(5).
For purposes of computing the ACP, any Employee is eligible if he can
make a Participant contribution, or an Elective Deferral (if the
Company takes such contributions into account in the calculation of the
Actual Contribution Percentage), or can receive a Company Matching
Contribution (including forfeitures) or a Company Qualified Matching
Contribution. If a Participant contribution is required as a condition
of participation in the Plan, any Employee who would be a Participant
in the Plan if such Employee made such a contribution shall be treated
as an eligible Participant on behalf of whom no Participant
contributions are made.
The ACP for any Participant who is a Highly Compensated Employee for
the Plan Year and who is eligible to have Actual Contribution
Percentage amounts allocated to his accounts under two or more plans
described in Code Section 401(a), or arrangements described in Code
Section 401(k) that are maintained by the Company, shall be determined
as if such Actual Contribution Percentage amounts were made under a
single plan. If a Highly Compensated Employee participates in two or
more plans described in Code Section 401(a) or arrangements described
in Code Section 401(m) that have different Plan Years, all such plans
or arrangements ending with or within the same calendar year shall be
treated as a single plan.
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<PAGE> 31
In the event that this Plan satisfies the requirements of Code Sections
401(m), 401(a)(4) or 410(b) only if aggregated with one or more other
plans, or if one or more other plans satisfy the requirements of such
Code Sections only if aggregated with this Plan, then this Paragraph
shall be applied by determining the ACP of Employees as if all such
plans were a single plan. Plans may be aggregated to satisfy Code
Section 401(m) only if they have the same Plan Year.
For purposes of determining the ACP of a Participant who is a 5 percent
owner or one of the ten most highly-paid Highly Compensated Employees,
the Actual Contribution Percentage amounts and Compensation of such
Participant shall include the Actual Contribution Percentage amounts
and Compensation for the Plan Year of family members (as defined in
Code Section 414(q)(6). The combined actual contribution ratio for the
family group shall be the actual contribution ratio determined by
combining the Participant contributions, Compensation, matching
contributions and amounts treated as matching contributions of all the
eligible family members. Family members, with respect to Highly
Compensated Employees, shall be disregarded as separate Employees in
determining the ACP both for Participants who are non-Highly
Compensated Employees and for Participants who are Highly Compensated
Employees.
For purposes of determining the ACP test, Participant contributions are
considered to have been made in the Plan Year in which contributed to
the Plan. Company Matching and Qualified Matching Contributions and
Company Qualified Nonelective Contributions shall be considered made
for a Plan Year if made no later than the end of the twelve-month
period beginning on the day after the close of the Plan Year.
The Company shall maintain records sufficient to demonstrate
satisfaction of the ACP test and the amount of Company Qualified
Nonelective Contributions or Qualified Matching Contributions, or both,
used in such test. The determination and treatment of the ACP amounts
of any Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
In addition, a Company shall not allocate contributions to a
Participant's Account which would result in an Excess Annual Addition
under Part V, Limitation on Allocations. The aggregate Company
contributions for any Plan Year may also be limited to the amount
deductible by the Company under Code Section 404 with reductions made,
in order, to Company Profit-Sharing, Company Matching, Company
Qualified Matching, Company Qualified Nonelective and Elective Deferral
Contributions.
4.5 EXCESS AGGREGATE CONTRIBUTIONS.
(a) Extra Contribution: If the ACP limitation in Paragraph 4.4 is
not met, the Company may elect to make an extra Company
Qualified Nonelective Contribution to eligible non-Highly
Compensated Employees sufficient to satisfy the ACP limit. The
contribution shall be subject to the distribution and
nonforfeitability requirements of Code Section 401(k).
(b) Corrective Distribution of Excess: The Company may also
satisfy Paragraph 4.4 by distributing or forfeiting the Excess
Aggregate Contributions in
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<PAGE> 32
accordance with this Paragraph. Excess Aggregate
Contributions, plus any income and minus any loss allocable
thereto, shall be forfeited, if forfeitable, or if not
forfeitable, distributed no later than the last day of each
Plan Year to Participants to whose accounts such Excess
Aggregate Contributions were allocated for the preceding Plan
Year. If such Excess Aggregate Contributions are distributed
more than 2 1/2 months after the last day of the Plan year in
which such excess amounts arose, a ten (10) percent excise
tax shall be imposed on the Company maintaining the Plan with
respect to such amounts. Any distribution or forfeiture of
Excess Aggregate Contributions for any Plan Year shall be
made on the basis of the respective portions of such amounts
attributable to each Highly Compensated Employee. Excess
Aggregate Contributions shall be allocated to Participants
who are subject to the family member aggregation rules of
Code Section 414(q)(6) in proportion to the Participant
contributions and matching contributions of each family
member that are combined to determine the actual contribution
ratio. Excess Aggregate Contributions shall be treated as
Annual Additions under the Plan. In the event that any Excess
Aggregate Contributions returned under this Paragraph were
matched by Company Matching Contributions, those Company
Matching Contributions, together with earnings, shall be
forfeited and applied under this Paragraph.
Excess Aggregate Contributions shall be adjusted for any
income or loss. The income or loss allocable to Excess
Aggregate Contributions is the income or loss allocable to the
Participant's Participant Contribution account, Company
Matching Contribution account (if any, and if all amounts
therein are not used in the ADP test) and, if applicable,
Company Qualified Nonelective Contribution account and
Elective Deferral account for the Plan Year multiplied by a
fraction, the numerator of which is such Participant's Excess
Aggregate Contributions for the year and the denominator is
the Participant's account balance(s) attributable to Actual
Contribution Percentage amounts plus any withdrawals of these
amounts and without regard to any income or loss occurring
during such Plan Year.
Forfeitures of Excess Aggregate Contributions shall be applied
to reduce Company contributions. Excess Aggregate
Contributions attributable to amounts other than Participant
contributions, including forfeited matching contributions,
shall be treated as Company contributions for purposes of Code
Sections 404 and 415, even if distributed from the Plan.
Excess Aggregate Contributions shall first be distributed from
the Participant Nondeductible Voluntary Contributions Account.
To the extent that Excess Aggregate Contributions exceed the
balance in the Participant Nondeductible Voluntary
Contribution Account, the Excess Aggregate Contributions shall
be forfeited, if forfeitable, or distributed on a pro rata
basis from the Participant Matched Contribution accounts and
Company Matching Contribution accounts.
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<PAGE> 33
4.6 MULTIPLE USE OF ALTERNATIVE TEST. If one or more Highly Compensated
Employees participate in both a CODA and a plan subject to the ACP test
maintained by the Company and the sum of the ADP and ACP of those
Highly Compensated Employees subject to either or both tests exceeds
the Aggregate Limit, then the ADP or ACP of those Highly Compensated
Employees who also participate in a CODA shall be reduced (beginning
with such Highly Compensated Employee whose ACP is the highest) so that
the limit is not exceeded. The amount by which each Highly Compensated
Employee's Actual Contribution Percentage Amounts is reduced shall be
treated as an Excess Aggregate Contribution. The ADP and ACP of the
Highly Compensated Employees are determined after any corrections
required to meet the ADP and ACP tests. Multiple use does not occur if
both the ADP and ACP of the Highly Compensated Employees does not
exceed 1.25 multiplied by the ADP and ACP of the non-Highly Compensated
Employees.
The "Aggregate Limit" shall mean the greater of:
(a) the sum of (i) 125 percent of the greater of the ADP of the
non-Highly Compensated Employees for the Plan Year or the ACP of
non-Highly Compensated Employees under the Plan subject to Code Section
401(m) for the Plan Year beginning with or within the Plan Year of the
CODA and (ii) two percentage points plus the lesser of the relevant ADP
or the relevant ACP. In no event, however, shall this amount exceed
twice the lesser of the relevant ADP or the relevant ACP; or
(b) (i) 125 percent of the lesser of the ADP of the non-Highly
Compensated Employees for the Plan Year or the ACP of non-Highly
Compensated Employees under the Plan subject to Code Section 401(m) for
the Plan Year beginning with or within the Plan Year of the CODA and
(ii) two percentage points plus the greater of the relevant ADP or the
relevant ACP. In no event, however, shall this amount exceed twice the
greater of the relevant ADP or the relevant ACP.
4.7 PERMITTED DISPARITY. Unless elected otherwise in Section (K), the
Company Profit-Sharing Contribution for the Plan Year shall be
allocated to each Participant's account:
First, in the ratio that each Participant's Compensation not in excess
of the integration level bears to all Participants' Compensation not in
excess of the integration level, but such allocation percentage shall
not be in excess of the profit-sharing maximum disparity rate.
Second, any remaining contribution shall be allocated to each
Participant's account in the ratio that each Participant's Compensation
for the Plan Year in excess of the integration level bears to the
excess Compensation of all Participants. This excess contribution, as a
percentage of excess Compensation, cannot exceed two times the
allocation percentage of the above paragraph.
Third, any remaining Company Profit-Sharing contribution shall be
allocated to each Participant's account in the ratio that each
Participant's total Compensation bears to the sum of all Participants'
total Compensation.
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The integration level shall be equal to the taxable wage base or such
lesser amount elected by the Company in Section (K). The taxable wage
base is the maximum amount of earnings which may be considered wages
for a year under Code Section 3121(a)(1) in effect as of the beginning
of the Plan Year.
The profit-sharing maximum disparity rate shall be as follows:
If the integration level is more than $0 but not more than 20
percent of the taxable wage base, the rate shall be 5.7
percent.
If the integration level is more than 20 percent of the
taxable wage base but not more than 80 percent of the taxable
wage base, the rate shall be 4.3 percent. If the integration
level is more than 80 percent of the taxable wage base, but
less than 100 percent of the taxable wage base, the rate shall
be 5.4 percent. If the integration level used is equal to the
taxable wage base, the rate shall be 5.7 percent.
The Company Profit-Sharing Contribution for top-heavy plans shall be
allocated in accordance with Paragraph 16.2, Minimum Contribution Under
a Top-Heavy Plan.
Notwithstanding the preceding paragraphs, for any Plan Year this Plan
benefits any Participant who benefits under another qualified plan or
simplified employee pension plan, as defined in Code Section 408(k),
maintained by the Company that provides for permitted disparity (or
imputes disparity), Company contributions and forfeitures will be
allocated to the account of each Participant in the ratio that such
Participant's Compensation bears to the Compensation of all
Participants.
Effective for Plan Years beginning on or after January 1, 1995, the
cumulative permitted disparity limit for a Participant is 35 total
cumulative permitted disparity years. Total cumulative permitted years
means the number of years credited to the Participant for allocation or
accrual purposes under this Plan, any other qualified plan or
simplified employee pension plan (whether or not terminated) ever
maintained by the Company. For purposes of determining the
Participant's cumulative permitted disparity limit, all years ending in
the same calendar year are treated as the same year. If the Participant
has not benefited under a defined benefit or target benefit plan for
any year beginning on or after January 1, 1994, the Participant has no
cumulative disparity limit.
4.8 COLLECTION OF PARTICIPANT CONTRIBUTIONS. Participant contributions
shall be collected by the Company through payroll deduction or
otherwise within the limits set forth in this Part. All such
contributions shall be paid over to the Insurance Company.
4.9 COMPANY CONTRIBUTIONS - TIMING. The Company shall pay its Contributions
for each Plan Year on or before the time required by law for filing the
Company's federal income tax return (including extensions) for the
taxable year with respect to which the contributions are made.
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<PAGE> 35
4.10 COMPANY CONTRIBUTIONS - PROFITS. If the Company elects in Section (M),
Company contributions, including Elective Deferrals, may be made
without regard to profits. The Plan shall continue to qualify as a
profit-sharing plan for purposes of Code Sections 401(a), 402, 412 and
417.
4.11 RETURN OF COMPANY CONTRIBUTIONS. Except as provided below, no part of
the Plan's assets shall revert to the Company or be diverted for
purposes other than the exclusive benefit of the Employees or their
Beneficiaries:
(a) Any contribution made by the Company because of a mistake of
fact shall be returned to the Company upon written notice to
the Insurance Company. A contribution shall not be refunded
more than one year after the payment of the contribution.
(b) In the event that the Commissioner of Internal Revenue
determines that the Plan is not initially qualified under the
Code, any contribution made incident to that initial
qualification by the Company must be returned to the Company
within one year of the date the initial qualification is
denied but only if the application for the qualification is
made by the time prescribed by law for filing the Company's
return for the taxable year in which the Plan is adopted, or
such later date as the Secretary of the Treasury may
prescribe. After the denial of qualification and upon receipt
of evidence thereof, the Contract, and Policies shall be
canceled and an amount equal to the value of all Participants'
Accounts as determined in accordance with the terms of the
Contract or Policies shall be paid to the Company.
(c) Any contribution made by the Company is conditioned on the
deductibility of such contribution, and shall be refunded to
the Company, to the extent disallowed, upon written notice to
the Insurance Company. A contribution shall not be returned
more than one year after the disallowance of the contribution.
If the Internal Revenue Service determines that the Plan is
not qualified, the amount returned shall be determined under
Paragraph 20.2.
4.12 ROLLOVER CONTRIBUTIONS. Subject to approval by the Administrator and
Insurance Company and if permitted in Section (M), an Employee who
satisfies the classification requirements of Section (D) may contribute
to the Plan an amount which qualifies as a rollover contribution within
the meaning of Code Sections 402(a)(5), 403(a)(4), or 408(d)(3)(A)(ii).
As such, the rollover contribution must have been distributed to the
Employee from a qualified employee trust or qualified annuity plan or
must be a directed rollover from such trust or plan to this Plan as
specified by the Employee; or from an individual retirement arrangement
("IRA"), but only if such funds originated from a qualified employee
trust or qualified annuity plan. The amount distributed to the Employee
from the qualified employee trust, qualified annuity plan or IRA must
be transferred to the Plan in cash within 60 days after the Employee
receives it. The maximum amount which the Employee may rollover is the
amount distributed to him less the sum of nondeductible employee
contributions made to the prior qualified employee trust or qualified
annuity plan. A
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<PAGE> 36
lesser amount may be rolled over and the difference retained by the
Employee. The amount retained shall be subject to tax.
The Rollover Contribution shall be paid to the Contract, and invested
as selected in Section (M). Rollover contributions shall be accounted
for separately and shall be fully vested at all times. The separate
account established for Rollover Contributions shall be withdrawn in
accordance with Section (O).
4.13 TRANSFERS OF AMOUNTS FROM OTHER PLANS. If the Plan amends and restates,
or replaces a former plan that was qualified under Code Sections 401(a)
or 403(a), the Company may cause amounts from such former plan to be
transferred into the Contract subject to consent of the Insurance
Company. At the discretion of the Administrator and subject to the
consent of the Insurance Company, the Plan may also accept other
plan-to-plan transfers. The amounts so transferred shall be accompanied
by written instructions from the Administrator identifying: the former
plan; this Plan; the name of each Participant; the amount of any
account balance transferred to the Plan from the former plan
attributable to the contributions of each Participant and of the
Company on his behalf; the vesting percentage for amounts attributable
to Company contributions; and any other information that may be
required by the Insurance Company.
The Administrator shall advise the Insurance Company in writing of the
allocation of such amounts within the Contract. The amounts so
transferred may be deposited in the Participant's Account in accordance
with the most recent allocation instructions or with special allocation
instructions. The amounts transferred shall be distributed to
Participants in accordance with the terms of the Plan.
4.14 PARTICIPANT DEDUCTIBLE VOLUNTARY CONTRIBUTIONS. The Administrator shall
not accept Participant Deductible Voluntary Contributions which are
made for a taxable year beginning after December 31, 1986.
Contributions made prior to that date shall be maintained in a separate
account which shall be nonforfeitable at all times. The account shall
share in the gains and losses of the Plan in the same manner as
described in Paragraph 8.1. No part of the Participant Deductible
Voluntary Contribution account shall be used to purchase life
insurance. Subject to Paragraphs 14.3 and 14.4, the Participant may
withdraw any part of the Deductible Voluntary Contribution account by
making a written application to the Administrator.
4.15 ADDITIONAL REQUIREMENTS FOR OWNER-EMPLOYEES. If this Plan provides
contributions for one or more owner-Employees who control both the
business for which this Plan is established and one or more other
trades or businesses, this Plan and the plan established for other
trades or businesses must, when looked at as a single plan, satisfy
Code Sections 401(a) and (d) for the Employees of this and all other
trades or businesses.
If this Plan provides contributions for one or more owner-Employees who
control one or more trades or businesses, the Employees of the other
trades or businesses
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<PAGE> 37
must be included in a plan which satisfies Code Sections 401(a) and (d)
and which provides contributions not less favorable than provided for
owner-Employees under this Plan.
If an individual is covered as an owner-Employee under the plans of two
or more trades or businesses which are not controlled and the
individual controls a trade or business, then the contributions of the
Employees under the plan of the trades or businesses which are
controlled must be as favorable as those provided for him under the
most favorable plan of the trade or business which is not controlled.
For purposes of the preceding Paragraphs, an owner-Employee or two or
more owner-Employees shall be considered to control a trade or business
if such owner-Employee, or such two or more owner-Employees together:
(a) own the entire interest in an unincorporated trade or
business, or
(b) in the case of a partnership, own more than 50 percent of
either the capital interest or the profits interest in such
partnership.
For purposes of the preceding sentence, an owner-Employee, or two or
more owner-Employees shall be treated as owning any interest in a
partnership which is owned, directly or indirectly, by a partnership
which the owner-Employee, or such two or more owner-Employees, are
considered to control within the meaning of the preceding sentence.
PART V - LIMITATION ON ALLOCATIONS
5.1 MAXIMUM PERMISSIBLE AMOUNT. If the Participant does not participate in,
and has never participated in another qualified plan maintained by the
Company, a welfare benefit fund, as defined in Code Section 419(e),
maintained by the adopting Company, or an individual medical account as
defined in Code Section 415(l)(2), maintained by the Company, which
provides an Annual Addition as defined in Paragraph 1.3, the amount of
Annual Additions which may be credited to the Participant's Account for
any Limitation Year shall not exceed the lesser of the Maximum
Permissible Amount or any other limitation contained in this Plan. If
the Company contribution that would otherwise be contributed or
allocated to the Participant's Account would cause the Annual Additions
for the Limitation Year to exceed the Maximum Permissible Amount, the
amount contributed or allocated shall be reduced so that the Annual
Additions for the Limitation Year shall equal the Maximum Permissible
Amount.
For purposes of applying Part V, Limitations on Allocations,
compensation for a Limitation Year is the compensation actually paid or
includible in gross income during such Limitation Year as defined in
Paragraph 1.14 only.
5.2 ESTIMATE OF MAXIMUM. Prior to determining the Participant's actual
Compensation for the Limitation Year, the Company may determine the
Maximum
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Permissible Amount for the Participant on the basis of a reasonable
estimation of the Participant's Compensation for the Limitation Year,
uniformly determined for all Participants similarly situated.
5.3 RECONCILIATION. As soon as is administratively feasible after the end
of the Limitation Year, the Maximum Permissible Amount for the
Limitation Year shall be determined on the basis of the Participant's
actual Compensation for the Limitation Year.
5.4 EXCESS ANNUAL ADDITIONS. If, pursuant to Paragraph 5.3 or as a result
of the allocation of Forfeitures, there is an Excess Annual Addition,
the excess shall be disposed of as follows:
(a) First, any Participant Nondeductible Voluntary Contributions,
and any earnings thereon, to the extent they reduce the Excess
Annual Additions, shall be returned to the Participant.
Second, any Participant Matched Contributions, and any
earnings thereon, shall be returned to the Participant.
(b) If after the application of Paragraph (a) Excess Annual
Additions still exist, any Elective Deferrals and any earnings
thereon shall be returned to the Participant.
(c) If after the application of Paragraphs (a) and (b) Excess
Annual Additions still exist and the Participant is covered by
the Plan at the end of the Limitation Year, the Excess Annual
Additions in the Participant's Account shall be held
unallocated in a suspense account and used to reduce Company
contributions (including any allocation of forfeitures) for
such Participant in the next Limitation Year, and each
succeeding Limitation Year if necessary.
If after the application of Paragraphs (a) and (b) Excess
Annual Additions still exist, and the Participant is not
covered by the Plan at the end of the Limitation Year, the
Excess Annual Additions shall be held unallocated in a
suspense account. The suspense account shall be applied to
reduce future Company contributions (including allocation of
any forfeitures) for all remaining Participants in the next
Limitation Year, and each succeeding Limitation Year if
necessary.
The Excess Annual Additions in a Participant's Account shall
be determined as being first from Company Profit-Sharing
Contributions, then from Company Nonelective Contributions,
then from Company Qualified Matching Contributions, and
finally from Company Matching Contributions. Neither the
consent of the Participant nor the Participant's Spouse shall
be required to the extent that the distribution is required to
satisfy Code Section 415.
If a suspense account is in existence at any time during the
Limitation Year pursuant to this Paragraph 5.4, it shall
participate in the allocation of the
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gains and losses. All amounts in a suspense account must be
allocated to Participants accounts before any Company or any
Participant contributions may be made to the Plan for that
Limitation year. Excess Annual Additions held in the suspense
account may not be distributed to Participants or Former
Participants.
5.5 IF COMPANY MAINTAINS OTHER DEFINED CONTRIBUTION PLANS. Prior to
determining the Participant's actual Compensation for the Limitation
Year, the Company may determine the Maximum Permissible Amount for a
Participant in the manner described in Paragraph 5.2. This Paragraph
applies if, in addition to this Plan, the Participant is covered under
another qualified master or Prototype defined contribution plan
maintained by the Company, a welfare benefit fund, as defined in Code
Section 419(e), maintained by the Company, or an individual medical
account, as defined in Code Section 415(l)(2), maintained by the
Company, which provides an Annual Addition as defined in Paragraph 1.3,
during any Limitation Year. The Annual Additions which may be credited
to the Participant's Account under this Plan for any such Limitation
Year shall be limited in accordance with this Paragraph, unless the
Company provides other limitations in Section (U). Annual Additions
shall not exceed the Maximum Permissible Amount reduced by the Annual
Additions credited to the Participant's Account under the other plans
and welfare benefit funds for the same Limitation Year. If the Annual
Additions with respect to the Participant under other defined
contribution plans and welfare benefit funds maintained by the Company
are less than the Maximum Permissible Amount and the Company
contribution that would otherwise be contributed or allocated to the
Participant's Account under this Plan would cause the Annual Additions
for the Limitation Year to exceed this limitation, the amount
contributed or allocated shall be reduced so that the Annual Additions
under all such plans and funds for the Limitation Year shall equal the
Maximum Permissible Amount.
If the Annual Additions with respect to the Participant under such
other defined contribution plans and welfare benefit funds in the
aggregate are equal to or greater than the Maximum Permissible Amount,
no amount shall be contributed or allocated to the Participant's
Account under this Plan for the Limitation Year.
As soon as is administratively feasible after the end of the Limitation
Year, the Maximum Permissible Amount for the Limitation Year shall be
determined on the basis of the Participant's actual Compensation for
the Limitation Year. If, pursuant to the preceding sentence or as a
result of the allocation of forfeitures, a Participant's Annual
Additions under this Plan and such other plans would result in Excess
Annual Additions for a Limitation Year, the Excess Annual Additions
shall be deemed to consist of the Annual Additions last allocated,
except that Annual Additions attributable to a welfare benefit fund or
individual medical account shall be deemed to have been allocated first
regardless of the actual allocation date.
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If an Excess Annual Addition was allocated to a Participant on an
allocation date of this Plan which coincides with an allocation date of
another plan, the Excess Annual Additions attributed to this Plan shall
be the product of:
(a) The total Excess Annual Additions allocated as of such date,
times
(b) The ratio of (i) the Annual Additions allocated to the
Participant for the Limitation Year as of such date under this
Plan to (ii) the total Annual Additions allocated to the
Participant for the Limitation Year as of such date under this
and all the other qualified Master or Prototype defined
contribution plans.
Any Excess Annual Additions attributed to the Plan shall be disposed of
in the manner described in Paragraph 5.4.
5.6 IF COMPANY MAINTAINS OTHER PLANS. If the Participant is covered under
another qualified defined contribution plan maintained by the Company
which is not a master or Prototype Plan, Annual Additions which may be
credited to the Participant's Account under this Plan for any
Limitation Year shall be limited in accordance with Paragraphs 5.1
through 5.6 as though the other plan were a master or Prototype Plan
unless the Company provides other limitations in Section (T).
If the Company maintains, or at any time maintained, a qualified
defined benefit plan covering any Participant in this Plan, the sum of
the Participant's Defined Benefit Plan Fraction and Defined
Contribution Plan Fraction shall not exceed 1.0 in any Limitation Year.
The Annual Additions which may be credited to the Participant's Account
under this Plan for any Limitation Year shall be limited in accordance
with Section (T).
5.7 CONTROLLED GROUP OF EMPLOYERS, ETC. For purposes of this Part, Employer
shall mean the Company that adopts this Plan, and all members of a
controlled group of corporations (as defined in Code Section 414(b) as
modified by Code Section 415(h)), all commonly controlled trades or
businesses (as defined in Code Section 414(c) as modified by Code
Section 415(h)), or affiliated service groups (as defined in Code
Section 414(m)), of which the adopting Company is a part, and any other
entity required to be aggregated with the Company pursuant to
Regulations under Code Section 414(o).
5.8 DEFINITIONS.
(a) Defined Benefit Fraction - A fraction, the numerator of which
is the sum of a Participant's Projected Annual Benefit under
all the defined benefit plans (whether or not terminated)
maintained by the Company, and the denominator of which is the
lesser of: 125 percent of the dollar limitation determined for
the Limitation Year under Code Section 415(b) and (d) or 140
percent of the highest average Compensation, including any
adjustments under Code Section 415(b).
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The highest average Compensation is the Participant's average
Compensation for the three consecutive Years of Service with
the Company that produces the highest average. A Year of
Service with the Company is the 12-consecutive month period
defined in Paragraph 1.49.
Notwithstanding the above, if the Participant was a
Participant as of the first day of the first Limitation Year
beginning after December 31, 1986, in one or more defined
benefit plans maintained by the Company which were in
existence on May 6, 1986, the denominator of this fraction
shall not be less than 125 percent of the sum of the annual
benefits under such plans which the Participant had accrued as
of the close of the last Limitation Year beginning before
January 1, 1987, disregarding any changes in the terms and
conditions of the Plan after May 5, 1986. The preceding
sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements
of Code Section 415 for all Limitation Years beginning before
January 1, 1987.
(b) Projected Annual Benefit - The annual retirement benefit
(adjusted to an actuarially equivalent straight life annuity
if such benefit is expressed in a form other than a straight
life annuity or qualified joint and survivor annuity) to which
the Participant would be entitled under the terms of the Plan
assuming:
(i) the Participant shall continue employment until
normal retirement date under the Plan (or current
age, if later) and
(ii) the Participant's Compensation for the current
Limitation Year and all other relevant factors used
to determine benefits under the Plan shall remain
constant for all future Limitation Years.
(c) Defined Contribution Fraction - A fraction, the numerator of
which is the sum of the Annual Additions to the Participant's
Accounts under all the defined contribution plans (whether or
not terminated) maintained by the Company for the current and
all prior Limitation Years (including the Annual Additions
attributable to the Participant's Nondeductible Voluntary
Contributions to all defined benefit plans, whether or not
terminated, maintained by the Company and the Annual Additions
attributable to all welfare benefit funds, as defined in Code
Section 419(e), and individual medical accounts, as defined in
Code Section 415(l)(2), maintained by the Company), and the
denominator of which is the sum of the maximum aggregate
amounts for the current and all prior Limitation Years of
Service with the Company (regardless of whether a defined
contribution plan was maintained by the Company). The maximum
aggregate amount in any Limitation Year is the lesser of: 125
percent of the dollar limitation determined under Code
Sections 415(b) and (d) in effect under Code Section
415(c)(1)(A) or 35 percent of the Participant's Compensation
for such year.
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If the Employee was a Participant as of the end of the first
day of the first Limitation Year beginning after December 31,
1986, in one or more defined contribution plans maintained by
the Company which were in existence on May 6, 1986, the
numerator of this fraction shall be adjusted if the sum of
this fraction and the defined benefit fraction would otherwise
exceed 1.0 under the terms of this Plan. Under the adjustment,
an amount equal to the product of (1) the excess of the sum of
the fractions over 1.0 times (2) the denominator of this
fraction, shall be permanently subtracted from the numerator
of this fraction. The adjustment is calculated using the
fractions as they would be computed as of the end of the last
Limitation Year beginning before January 1, 1987, and
disregarding any changes in the terms and conditions of the
Plan made after May 6, 1986, but using the Code Section 415
limitation applicable to the first Limitation Year beginning
on or after January 1, 1987.
PART VI - PLAN INVESTMENT - CONTRACT
6.1 FUNDING POLICY. Plan benefits shall be provided under a Contract owned
by the Company and any Policies purchased under Paragraph 7.1. The
Company shall have the duty to establish attending policy to carry out
the objectives of the Plan. The funding policy is intended to establish
a desired ratio of fixed income to equity risk for the Plan taking into
account plan liquidity and diversification needs, the type of qualified
plan and the financial stability of the Company. The funding policy
shall include the selection of investment funds offered by the
Insurance Company and a determination of the portion of contributions
and funds held under the Contract to be invested in the investment
funds selected. The general funding policy of the Plan shall be at all
times to maintain a balance between safety in capital investment and
investment return. The funding policy should consider anticipated
future contributions and rates of return on investments and should be
designed to meet the short and long-term financial needs of the Plan.
Once the Company has directed the investment of Plan assets under the
Contract to achieve the basic assets mix objective, the Company shall
monitor the Plan's participation in investment funds under the
Contract. The Company shall meet periodically for the purpose of
reviewing and, if necessary, revising the funding policy of the Plan.
The Company may request the Insurance Company to amend the Contract to
change the investment funds offered under the Contract. Any actions
taken by the Company shall be communicated in writing to the
Administrator and shall be recorded in the official records of the
Company. The Company may delegate the responsibility for allocation of
Plan assets among investment funds maintained by the Insurance Company
to an investment manager by entering into an agreement for
discretionary asset management services. An investment manager named by
the Company shall serve at the pleasure of the Company, but may resign
by a written resignation to the Company. The Company shall periodically
review the performance of the investment manager.
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<PAGE> 43
6.2 CONTRACT. The Plan shall be funded by a Contract issued by the
Insurance Company. The Company shall execute the application for the
Contract and shall be the owner of such Contract. The Contract shall
provide for investment of contributions in the general investment
account and/or separate investment accounts offered by the Insurance
Company. The Contract shall provide for the valuation of assets and
Participants' Accounts as of each Valuation Date. The Contract shall
provide the terms and conditions by which sums may be transferred
between such investment funds or withdrawn from the Contract.
6.3 INSURANCE COMPANY'S AUTHORITY TO DIRECT INVESTMENTS. The Insurance
Company shall be the fiduciary with authority to carry out the funding
policy of the Plan subject to the following limitations:
(a) All contributions made under the Plan by and for a
Participant, less applicable Plan and Contract expenses, and
premiums to provide Policies shall be invested, as directed by
the Company (or investment manager, if appointed) in written
allocation instructions to the Insurance Company in the
general investment account and/or separate investment accounts
of the Insurance Company to the extent permissible under the
Contract.
(b) The Insurance Company shall follow directions of the Company
(or investment manager, if appointed) concerning the exercise
or non-exercise of any power or options concerning the
Contract and any Policies held under the Plan. However, if
sums under the Contract are invested in the separate
investment accounts of the Insurance Company, the Insurance
Company retains the right to, in its sole discretion, exercise
any of the powers of an owner with respect to stocks, bonds,
securities or other property held in the separate investment
accounts. Sums held under the Contract may be transferred in
accordance with its terms among investment funds within the
Contract by direction of the Company (or investment manager,
if appointed).
(c) The Insurance Company shall follow the directions of each
Participant to the extent provided in Paragraph 6.4.
(d) The Insurance Company shall invest funds according to the
stated objectives of its various investment funds. The Company
may obtain a description of such stated objectives from the
Insurance Company. The Insurance Company does not make
investments with a view to the needs of a particular plan. The
Company (or investment manager, if appointed) retains the
responsibility for allocation of funds between the investment
funds.
(e) For purposes of determining the fiduciary responsibilities of
the Insurance Company, the Contract is the Plan asset with
respect to contributions invested in the general investment
account. To the extent the Contract also invests in separate
investment accounts of the Insurance Company, the Plan assets
shall be the assets held by the separate investment accounts.
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6.4 PARTICIPANT-DIRECTED INVESTMENTS. If permitted in Section (M)(1), each
Participant shall designate in writing the investment funds under the
Contract in which his Participant contributions and Company
contributions on his behalf are to be invested. The investment funds
which shall be available shall be stated in the Contract. Subject to
the terms of the Contract, such Participant direction may be to
allocate 100 percent of such contributions to one of the investment
funds or to allocate such contributions among more than one investment
fund, provided that such allocation shall be integral percentages. The
Administrator may establish minimum percentages for any contribution on
account of any Participant that may be allocated to each investment
fund. If permitted in Section L, forfeitures shall be reallocated in
the same percentages and in the same investment funds allocable to
Company contributions. A Participant may elect in writing to change his
allocation of future contributions. Such election shall become
effective upon receipt by the Insurance Company. Subject to any
restrictions in the Contract, a Participant may elect in writing to
transfer all or a portion of his Participant's Account between
investment funds as often as permitted by the Contract. If a
Participant fails to make an initial written election, his
Participant's Account shall be allocated to an investment fund
designated by the Company and if none is designated, to the Guaranteed
Interest Account under the Contract.
6.5 COMBINING ASSETS OF MORE THAN ONE PLAN IN A SINGLE CONTRACT. With the
consent of the Insurance Company, the assets of the Plan may be
combined with the assets of any other qualified retirement plan of the
Company, or an affiliated Employer which is a member of the same
controlled group of corporations (as defined in Code Section 414(b)),
the same controlled group of trades or businesses (as defined in Code
Section 414(c)) or the same affiliated service group (as defined in
Code Section 414(m)) as the Company; in a single Contract for
investment purposes without terminating the separateness of such Plan;
provided that, in such event:
(a) Accounting records shall be maintained so that the assets of
each Plan can be separately determined.
(b) All contributions to the Contract shall be accompanied by
written instructions from the Company designating the amount
or amounts allocable to each Plan in which such Company
participates.
(c) None of the contributions and assets attributable to one Plan
shall be used to pay benefits or expenses under any other
plan.
So long as the foregoing provisions are complied with, the
provisions of Paragraph 18.7 shall not be deemed to apply to
such combining of assets in one Contract.
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PART VII - PLAN INVESTMENT - POLICIES
7.1 REQUEST OF PARTICIPANT. At the Participant's request and if permitted
by Section (N), the Company shall purchase life insurance Policies from
the Insurance Company for the benefit of a Participant and his
Beneficiary and charged against the Participant's Account. The premiums
for the Policies shall be paid with Company contributions as elected in
Section (N).
7.2 LIMITATIONS ON PURCHASE. In the event a Participant directs the Company
to purchase a Policy or Policies on the Participant's life, the Company
shall limit the amount of Company contributions to be invested in the
Policies as follows:
(a) Ordinary life - For purposes of these incidental insurance
provisions, ordinary life insurance policies are policies with
both nondecreasing death benefits and nonincreasing premiums.
If such policies are purchased, less than 1/2 of the aggregate
Company contributions allocated to any Participant shall be
used to pay the premiums attributable to them.
(b) Term and universal life - No more than 1/4 of the aggregate
Company contributions allocated to any Participant shall be
used to pay the premiums on term life insurance policies,
universal life insurance policies, and all other life
insurance policies which are not ordinary life.
(c) Combination - The sum of 1/2 of the ordinary life insurance
premiums and all other life insurance premiums shall not
exceed 1/4 of the aggregate Company contributions allocated to
any Participant.
7.3 COMPANY IS OWNER. The Company shall apply for and shall be the owner of
any Policies purchased under the terms of this Plan. The Policies must
provide that proceeds shall be payable to the Company, however the
Company shall be required to pay over all proceeds of the policies to
the Participant's designated Beneficiary in accordance with the
distribution provisions of this Plan. A Participant's Spouse shall be
the designated Beneficiary of the proceeds in all circumstances unless
a Qualified Election has been made in accordance with Paragraph 1.44.
Under no circumstances shall the Plan retain any part of the proceeds.
In the event of any conflict between the terms of this Plan and the
terms of any Policy purchased hereunder, the Plan provisions shall
control.
7.4 PREMIUM PAYMENTS. All Policies shall, as far as is practical, have a
common premium due date. The Company shall pay the initial and renewal
premiums under the Policies on any Participant's life. If no
contribution is to be made at the time a policy premium is due, the
Company may pay the premium by a policy loan or by withdrawing the
amount from the Participant's Account under the Contract if the limits
set forth in Paragraph 7.2 are not exceeded.
7.5 DIVIDENDS. At the discretion of the Company, a Policy may provide that:
(i) dividends be applied to accumulate with interest, or to purchase
annual additions, in which case dividends shall be added to the
proceeds of the Policy for the benefit of
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<PAGE> 46
the Participant or his Beneficiary, or (ii) dividends shall be used to
reduce premiums. Any dividends paid after retirement, however, shall be
paid to the Participant; and any dividends paid after the Participant's
death shall be added to and become a part of the proceeds of the
Policy.
7.6 DISTRIBUTION OF POLICIES. Subject to Paragraph 14.3, if applicable, the
Policies on the Participant's life shall be converted to cash or an
annuity or distributed to the Participant upon commencement of
benefits.
7.7 CHANGE IN AMOUNT OF INSURANCE. When an increase or decrease of the
amount of insurance is required because of a change in the amount of
contributions allocated to the Participant or because the aggregate
Policy premiums would exceed the limits in Paragraph 7.2, the Company
shall advise the Insurance Company to adjust the amount of the
Participant's Policies.
7.8 POLICIES UPON TERMINATION OF EMPLOYMENT. In the event a terminated
Participant is entitled to the full value of a Policy on his life, the
Participant may request the Administrator to transfer and distribute
the Policy to him. In the event a terminating Participant is not
entitled to the full value of the Policy, the Administrator after
consulting with the Participant, may:
(a) Surrender the Participant's Policy and pay the Participant's
vested portion to him;
(b) Obtain a policy loan equal to the nonvested portion of its
value and distribute the Policy to him; or
(c) Sell the Policy to the Participant for an amount equal to its
cash surrender value. The proceeds of the sale shall be
credited to the Participant's Account. If the Participant
declines to purchase the Policy, the Policy may also be sold
to: (i) a relative of the Participant who is a Beneficiary
under the Policy, (ii) the Company, or (iii) to another
employee benefit plan in which he is a Participant.
PART VIII - PARTICIPANT'S ACCOUNT
8.1 PARTICIPANT'S ACCOUNT. A separate account shall be maintained for each
Participant to which shall be credited the Company contributions and
earnings thereon. At any time, a Participant's Account shall equal: (i)
the sum of the value of accounts established and maintained under the
Contract on behalf of the Participant as of the latest Valuation Date,
and (ii) the value of any Policies on the life of the Participant.
Contributions of a Participant shall be accounted for separately from
the Company's contributions. The Insurance Company shall maintain
appropriate contribution
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accounts for each type of contribution referred to in Part IV and made
to the Plan, including accounts for:
(a) Elective Deferrals (if elected in Section (G));
(b) Company Matching Contributions (if elected in Section (I)) and
reallocated Matching Contribution forfeitures;
(c) Company Profit-Sharing Contributions (if elected in Section
(K)) and reallocated Profit-Sharing Contribution forfeitures;
(d) Company Qualified Nonelective Contributions (if elected in
Section (H));
(e) Company Qualified Matching Contributions (if elected in
Section (I));
(f) Participant Matched Contributions (if elected in Section (J));
(g) Participant Nondeductible Voluntary Contributions (if elected
in Section (J));
(h) Rollover Contributions, if permitted under Section (M); and
(i) Direct transfers from other plans.
Contributions made by or for a Participant shall be credited to the
Participant's Account as of the date such contributions are applied
under the Contract. The amount of any premium for Policies purchased by
the Company shall be charged against the value of the Participant's
separate accounts under this Plan. Administrative expenses shall be
charged against the value of the Participants' accounts, unless the
Company agrees to pay them. Such administrative expenses, if charged
against the value of the Participants' accounts, shall be allocated on
a pro rata basis among the investment funds under the Contract.
Premiums for Policies on the life of the Participant shall be paid for
with Company contributions as elected in Section (N). If premiums for
Policies are paid for with both Elective Deferrals and other Company
contributions, then the cash surrender value of the Policies derived
from Elective Deferrals shall equal the value which bears the same
ratio to the cash surrender value of the Policies as the total amount
of Elective Deferrals used to pay Policy premiums bears to the total
amount of premiums paid. The value of the Policies derived from Company
Matching and/or Company Profit-Sharing Contributions is the cash
surrender value of the Policies on the Participant's life less the cash
surrender value of the Policies derived from Elective Deferrals.
8.2 VALUATION OF ACCOUNTS. The Administrator shall determine the value of
each Participant's Account at least annually as of the last Valuation
Date on or prior to the last day of the Plan Year.
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PART IX - VESTING
9.1 FULL VESTING IN CERTAIN SEPARATE ACCOUNTS. Each Participant shall at
all times have a 100 percent vested interest in the following accounts:
(a) Elective Deferral account (if elected in Section (G));
(b) Participant Matched Contribution account (if elected in
Section (J));
(c) Participant Nondeductible Voluntary Contribution account (if
elected in Section (J));
(d) Company Qualified Nonelective Contribution account (if elected
in Section (H));
(e) Company Qualified Matching Contribution account (if elected in
Section (I));
(f) Rollover Contributions account if permitted under Section (M);
and
(g) Account for direct transfers from other plans.
In addition, each Participant shall be fully vested in the cash
surrender value of any Policy on his life derived from Elective
Deferrals.
9.2 VESTING IN PARTICIPANT'S ACCOUNTS ATTRIBUTABLE TO COMPANY MATCHING AND
PROFIT-SHARING CONTRIBUTIONS. Each Participant shall be vested in the
value of his: (i) Company Matching Contribution account, if any; (ii)
Company Profit-Sharing Contribution account, if any; and reallocated
forfeitures (if reallocated under Section (L)); and (iii) the cash
surrender value of any Policy on his life derived from Company
Profit-Sharing and/or Matching Contributions as follows:
(a) 100 percent upon attainment of Participant's Normal Retirement
Date (as elected in Section (F));
(b) 100 percent upon retirement on or after Participant's Early
Retirement Date (if elected in Section (F));
(c) 100 percent upon Participant's death prior to the date an
annuity becomes effective;
(d) 100 percent upon Participant's Disability Retirement Date (if
elected in Section (F)); and
(e) at any other time, including Termination of Employment, the
percentage determined in accordance with the vesting schedule
specified in Section (R).
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9.3 VESTING YEARS OF SERVICE/BREAKS IN SERVICE. All Years of Service with
the Company shall be included for purposes of determining the
Participant's vested interest under Paragraph 9.2(e), except that Years
of Service shall not include Service disregarded in Section (R). For
purposes of computing a Participant's nonforfeitable right to the
Account balance derived from Company contributions, the Years of
Service and Breaks in Service shall be the Plan Year.
In the case of a Participant who incurred a One-Year Break in Service,
Years of Service before such Break shall not be taken into account
until the Participant has completed a Year of Service after such Break
in Service.
In the case of a Participant who has 5 or more consecutive One-Year
Breaks in Service, all service after such Breaks in Service shall be
disregarded for the purpose of vesting the Company-derived account
balance that accrued before such Breaks in Service. Such Participant's
pre-break service shall count in vesting the post-break Company-derived
account balance only if either:
(a) such Participant has any nonforfeitable interest in the
account balance attributable to Company contributions at the
time of separation from service; or
(b) upon returning to service the number of consecutive One-Year
Breaks In Service is less than the number of Years Of Service.
Separate accounts shall be maintained for the Participant's pre-break
and post-break Company-derived account balance. Both accounts shall
share in the earnings and losses of the fund.
PART X - IN-SERVICE WITHDRAWALS
10.1 IN GENERAL. A Participant or former Participant may request cash
withdrawals or a Direct Rollover of an Eligible Rollover Distribution,
under the Plan in accordance with Paragraph 14.4, if operative, and
procedures established by the Administrator, subject to the sequence
and conditions for withdrawal set forth in Paragraph 10.2. The minimum
amount of withdrawal shall be set by the Administrator. If Paragraph
14.3 is operative, withdrawals that may be made are subject to the
spousal and Participant consent requirements contained in Code Sections
401(a)(11) and 417.
10.2 SEQUENCE AND CONDITIONS FOR WITHDRAWAL. A Participant shall request the
Administrator to effect a cash withdrawal and such amounts shall be
debited from his Participant's Account. The Administrator shall
withdraw amounts in the following sequence and upon the following
conditions:
(a) First (if permitted by Section (O)), a Participant may
withdraw all or part of the value from his contribution
accounts for Participant Nondeductible Voluntary Contributions
and for Participant Matched Contributions.
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(b) Second (if permitted by Section (O)), a Participant may
withdraw all or part of the value of his contribution account
for Rollover Contributions.
(c) Third (if permitted by Section (O)), a Participant may
withdraw all or part of the full value of his vested interest
determined under Section (R) in his contribution accounts for:
Company Matching Contributions; Company Profit-Sharing
Contributions; and transfers from Employer-provided benefits
from other plans.
If a Participant receives a withdrawal attributable to Company
contributions, the Participant's future vested interest after
the distribution shall be equal to an amount ("X") determined
by the formula:
X = P(AB + D) - D
For purposes of applying the formula: P is the nonforfeitable
percentage at the relevant time, AB is the account balance at
the relevant time, and D is the amount of the withdrawal.
(d) Fourth (if permitted by Section (O)), a Participant may
withdraw all or part of the value of his account for Elective
Deferrals, Company Qualified Matching Contributions and
Company Qualified Nonelective Contributions if the Participant
is age 59 1/2 or older. If a Participant is less than age
59 1/2, a Participant may withdraw upon written request to the
Administrator all or part of his Elective Deferrals (and
earnings thereon accrued as of December 31, 1988) due to
financial hardship.
10.3 FINANCIAL HARDSHIP. A withdrawal shall be on account of financial
hardship if it is based on an immediate and heavy financial need of the
Participant where such Participant lacks other available resources. The
following are the only financial needs considered immediate and heavy:
(1) expenses incurred or necessary for medical care, described in Code
Section 213(d) of the Participant, his Spouse, children or dependents;
(2) the purchase (excluding mortgage payments) of a principal residence
for the Participant; (3) payment of tuition and related educational
fees and room and board expenses for the next 12 months of
post-secondary education for the Participant, his Spouse, children or
dependents; or (4) the need to prevent eviction of the Participant
from, or a foreclosure on the mortgage of, the Participant's principal
residence.
A withdrawal shall be considered necessary to satisfy an immediate and
heavy financial need of the Participant only if:
a. The Participant has obtained all distributions other than
hardship distributions, and all non-taxable loans under all
plans maintained by the Company;
b. All plans maintained by the Company provide that the
Participant's Elective Deferrals (and Participant
contributions) shall be suspended for twelve months after
receipt of the hardship distribution;
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c. The distribution is not in excess of the amount of an
immediate and heavy financial need (including amounts
necessary to pay any Federal, state, or local income taxes or
penalties reasonably anticipated to result from the
distribution); and
d. All plans maintained by the Company provide that the
Participant may not make Elective Deferrals for the
Participant's taxable year immediately following the taxable
year of the hardship distribution in excess of the applicable
limit under Code Section 402(g) for such taxable year less the
amount of such Participant's Elective Deferrals for the
taxable year of the hardship distribution.
10.4 NO FORFEITURE OF PARTICIPANT'S ACCOUNT ATTRIBUTABLE TO PARTICIPANT
CONTRIBUTIONS. No forfeiture of the Participant's account shall occur
solely as a result of the withdrawal of Participant contributions.
PART XI - PARTICIPANT LOANS
11.1 IN GENERAL. If permitted in Section (P) and if the Company has
designated Trustees for this loan program pursuant to the Trust, a
Participant or beneficiary who is a party-in-interest with respect to
the Plan may request a loan under the Plan. All loans made by the
Trustees shall be subject to the terms and conditions set forth in this
Part and the Trust. A loan to a Participant is considered a
Participant-directed investment.
The Trustee shall have the responsibility to develop rules regarding
the financial ability of the Participant to repay the amount he seeks
to borrow and the authority to adopt additional terms and conditions,
provided that all such rules, terms and conditions shall apply to all
Participants uniformly. Loans shall be made available to all
Participants on a reasonably equivalent basis and such availability
shall be communicated to all Participants. The amount available to
Highly Compensated Employees shall not be in an amount greater than the
amount made available to other Employees.
No loan shall be made to any owner-Employee or shareholder-Employee
unless such Participant has applied for and received a prohibited
transaction exemption. For purposes of this requirement, a
shareholder-Employee means an Employee or officer of an electing small
business (Subchapter S) corporation who owns (or is considered as
owning within the meaning of Code Section 318(a)(1), on any day during
the taxable year of such corporation, more than 5 percent of the
outstanding stock of the corporation.
The order of withdrawal from contribution accounts for loans are:
Deferred Salary/Deferred Bonus, Qualified Nonelective/Qualified
Elective, Rollover/Transfer, Company Profit-Sharing, Company Matching
and Participant Nondeductible Voluntary Contributions, to the extent
there are assets in the contribution accounts.
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The amount withdrawn from the Participant's accounts shall be prorated
across all funds in which the accounts are invested.
11.2 APPLICATION FOR LOANS. The Participant shall make written application
for a loan to the Trustee, on a form provided by the Administrator and
executed by the Participant. The Participant shall execute a promissory
note in the amount of the loan including interest, payable to the
Trustee, which indicates the repayment period, the amount of loan, the
rate of interest and other provisions pertaining to repayment of the
loan.
Loans must be adequately secured. At the time each new loan is made, in
no event shall the sum of the new loan and remaining principal balance
of any loan outstanding be secured by less than one-half of the
Participant's current vested account balance under the Plan.
Additionally, no more than 50 percent of the Participant's vested
account balance will be considered by the Plan as security for the
outstanding loan balance of all Plan loans made to that Participant.
If Paragraph 14.3 is operative, a Participant must obtain the consent
of his Spouse, if any, to use the account balance as security for the
loan. Spousal consent shall be obtained no earlier than the beginning
of the 90-day period that ends on the date on which the loan is to be
so secured. The consent must be in writing, must acknowledge the effect
of the loan, and must be witnessed by a plan representative or notary
public. Such consent shall thereafter be binding with respect to the
consenting Spouse or any subsequent Spouse with respect to that loan. A
new consent shall be required if the account balance is used for
renegotiation, extension, renewal, or other revision of the loan.
If valid spousal consent has been obtained in accordance with the prior
Paragraph, then, notwithstanding any other provision of this Plan, the
portion of the Participant's vested account balance used as a security
interest held by the Plan by reason of a loan outstanding to the
Participant shall be taken into account for purposes of determining the
amount of the account balance payable at the time of death or
distribution, but only if the reduction is used as repayment of the
loan.
11.3 AMOUNT OF LOAN. The minimum loan shall be $1,000. The aggregate amount
of any new loan and of all other outstanding loans made to the
Participant shall be limited to the lesser of:
(a) $50,000 reduced by the excess (if any) of the highest
outstanding balance of loans during the 1-year period ending
on the day before the loan application is approved by the
Trustee over the outstanding balance of loans from the Plan on
the date the loan application is approved, or
(b) One-half the present value of the nonforfeitable accrued
benefit of the Participant.
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For the purpose of the above limitation, all loans from all plans of
the Company and other members of a group of Employers described in Code
Sections 414(b), 414(c) and 414(m) are aggregated.
11.4 INTEREST RATE. Loans must bear a reasonable rate of interest. The rate
of interest shall be the prevailing rate used by commercial lending
institutions.
11.5 REPAYMENTS. The loan repayment period shall not exceed five years. If
elected in Section (P), this 5-year requirement shall not apply to any
loan used to acquire a principal residence for the Participant. The
maximum repayment period for such home loans shall be a reasonable
number of years.
Repayment of loans (principal and interest) shall be by payroll
deduction, on a level amortization basis over the term of the loan. All
loan repayments shall be transmitted monthly to the Insurance Company,
and invested in accordance with Section (M). Subject to approval by the
Insurance Company, a Participant may prepay all or a portion of the
loan principal prior to separation from service.
Loan repayments returned to the Participant's account(s) shall be
prorated based on the amount of the loan withdrawn from the account(s).
The money shall be placed in the Contract's funds and/or invested in
Shares of the Fund based on the Participant's and/or Company's current
investment selections, unless otherwise stipulated in a prepayment
agreement with the Insurance Company and/or Fund. In no event shall any
part of a Participant's loan repayment be allocated to an alternate
payee's account.
As of such valuation dates as the Trustee may set from time to time,
but not less frequently than once every twelve months, the Trustee
shall report to the Company the outstanding balance of such loans and
the fair market value of the other assets held in the Trust.
11.6 DEFAULT AND/OR ACCELERATION. Default shall be defined in the
Participant's promissory note or other loan documents. The Trustee must
notify the Insurance Company when a Participant defaults on a loan
repayment. In the event the Participant defaults on a loan repayment,
the Trustee shall notify the Participant that the loan is immediately
due and payable. The Trustee may also direct the Administrator to
refuse to make any Plan benefit payment otherwise due to the
Participant or Beneficiary until scheduled loan repayments are made, or
to offset overdue loan repayments against the amount of benefits which
otherwise may be due. In the event of default, attachment of security
shall not occur until a distributable event occurs in the Plan.
The loan must be paid in full upon the Participant's death, disability
or separation from service, upon the Participant's failure to make loan
repayments for three consecutive months or failure to receive
Compensation in an amount at least equivalent to the periodic loan
repayment amount for over three consecutive months, or upon termination
of this Plan or the Trust. The Trustee may also direct the
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Administrator to offset the remaining loan balance against the amount
of benefits which otherwise may be due the Participant or Beneficiary.
PART XII - TERMINATION OF EMPLOYMENT
12.1 NOTICE OF TERMINATION OF EMPLOYMENT. If the Termination of Employment
of a Participant occurs, the Company shall immediately give written
notice to the Administrator of the date of Termination of Employment of
such Participant. Upon receipt of such notice, the Administrator shall
determine the Participant's vested interest in his Participant's
Account pursuant to Part IX, Vesting, or if the Plan is or was
top-heavy pursuant to Part XVI.
12.2 AMOUNT OF PARTICIPANT'S BENEFIT. The amount of a Participant's Plan
benefit upon Termination of Employment shall equal his vested
Participant's Account. A Participant whose Termination of Employment
occurs prior to the end of the Plan Year shall share in Company
contributions and reallocations of forfeitures credited prior to his
Termination of Employment, but shall or shall not share in Company
contributions and reallocated forfeitures for such Plan Year credited
after the date of his Termination of Employment as elected in Section
(K) and (L).
12.3 PARTICIPANT'S ELECTION OF A FORM OF BENEFIT. If Termination of
Employment occurs, the Participant shall receive his vested
Participant's Account in a form of benefit elected by him, subject to
the provisions of Paragraph 14.3 or 14.4, whichever is operative. The
Participant's election shall occur within 60 days after the forms of
benefit first become available to him. Written notice shall be made on
such forms provided by the Administrator, including a form necessary to
comply with Paragraph 14.3 or 14.4, whichever is operative. The forms
of benefit are:
(a) Option A. The Participant may elect to continue his Account
until age 70 1/2 (if elected in Section (S)(1)), his Normal
Retirement Date or earlier, at which time he may elect Option
B, Option C, Option D, or Option E (if permitted in Section
(S)(1)). If the Participant dies prior to commencement of
retirement benefits, the value of the Participant's Account
shall be paid in one sum to his Beneficiary.
(b) Option B. The Participant may elect to receive an annuity in
accordance with Part XIV, Retirement Benefits, to commence on
his Early Retirement Date, if permitted in Section (F)(2), or
on his Normal Retirement Date as specified in Section (F)(1).
Once made this election shall be irrevocable.
(c) Option C. If permitted in Section (S)(1), the Participant may
elect a one-sum cash payment. Such election is subject to a
Qualified Election if Paragraph 14.3 is operative. One-sum
cash payments or a partial cash payment in addition to any of
the other options shall be made during the Plan Year in which
the event which gives rise to the distribution occurs or as
soon thereafter as is reasonably practical.
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(d) Option D. If permitted in Section (S)(1), the Participant may
elect installment payments, in accordance with Paragraph 14.2,
to commence upon separation from service. Such election is
subject to a Qualified Election if Paragraph 14.3 is
operative.
(e) Option E. Subject to the consent of the Administrator and the
Insurance Company, and in accordance with procedures set forth
in the recipient plan, the Participant may elect a
plan-to-plan transfer. The account balance shall be
transferred to the Participant's account under a plan
maintained by his new employer that is qualified under Code
Sections 401(a) or 403(a).
(f) A Participant may elect to have any portion of an Eligible
Rollover Distribution paid directly to an Eligible Retirement
Plan specified by the Participant in a Direct Rollover.
If the value of the Participant's vested account balance derived from
Company and Participant contributions exceeds (or at the time of any
prior distribution exceeded) $3,500, and the account balance is
immediately distributable, the Participant and the Participant's Spouse
(if Paragraph 14.3 is operative), (or where either the Participant or
the Spouse has died, the survivor) must consent to any distributions of
such Account balance. Consent is not valid unless the Administrator
notifies the Participant and the Participant's Spouse of the right to
defer any distribution until the Participant's Account balance is no
longer immediately distributable. The notice shall acknowledge the
right, if any, to defer distributions and must describe the investment
features.
Notwithstanding any form of benefit permitted under this Paragraph, if
a distribution from a Participant's Account would cause the remaining
account balance to equal or to be less than $3,500, such distribution
will only be permitted if the entire vested account balance is
distributed.
An amount distributed to a Participant prior to his attaining age
59 1/2 (except for amounts distributed due to disability, death,
separation from service on or after attaining age 55 or equal periodic
payments made for the life or life expectancy of the Participant and
Spouse) may be deemed to be a premature distribution made during a
taxable year. The distribution is subject to a 10 percent excise tax on
the portion of the amount received which is includible in his gross
income for the taxable year.
12.4 FORFEITURE OF NONVESTED PORTION OF PARTICIPANT'S ACCOUNT. If a
Participant terminates employment, the amounts which were in excess of
his vested interest shall be withdrawn from the appropriate investment
funds under the Contract and under the Funds and any Policies and shall
be allocated to the fixed investment option under the Contract. If the
value of the Participant's vested account balance derived from Company
and the Participant contributions is not greater than $3,500, the
Participant shall receive a distribution of the value of the entire
vested portion of such account balance and the nonvested portion shall
be treated as a forfeiture. For purposes of this Paragraph and
Paragraph 12.5, if the value of a Participant's vested
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account balance is zero, the Participant shall be deemed to have
received a distribution of such vested account balance. A Participant's
vested account balance shall not include accumulated Participant
Deductible Voluntary Contributions within the meaning of Code Section
72(o)(5)(B) for Plan Years beginning prior to January 1, 1989.
If a Participant terminates service, and elects, in accordance with
Section (T), to receive the value of the Participant's vested account
balance, the nonvested portion shall be treated as a forfeiture. If the
Participant elects to have distributed less than the entire vested
portion of the account balance derived from Company contributions, the
part of the nonvested portion that shall be treated as a forfeiture is
the total nonvested portion multiplied by a fraction, the numerator of
which is the amount of the distribution attributable to Company
contributions and the denominator of which is the total value of the
vested Company derived account balance.
In the case of a Participant who receives a distribution of part of his
Account attributable to Company contributions and does not repay under
Paragraph 12.5, the Participant's future nonforfeitable interest at any
relevant time shall be equal to an amount ("X") determined by the
formula:
X = P(AB + D) - D
For purposes of applying the formula: P is the nonforfeitable
percentage at the relevant time, AB is the account balance at the
relevant time, and D is the amount of the distribution.
12.5 REPAYMENT. In accordance with Section (S), a returning Participant may
repay the full amount of any distribution from the Plan attributable to
Company contributions made on account of Termination of Employment. All
or part of the amount of the distribution attributable to Participant
contributions may also be repaid. Such repayment, if any, must be made
before the earlier of:
(a) five years after the first date on which the Participant is
subsequently reemployed by the Company; or
(b) the date the Participant incurs five consecutive One-Year
Breaks in Service following the date of distribution.
If a Participant receives or is deemed to receive a distribution
pursuant to this Part and the Participant resumes employment covered
under this Plan before incurring five consecutive One-Year Breaks in
Service, the amount so forfeited, unadjusted for subsequent gains and
losses, shall be restored to the Participant's Account at the end of
the Plan Year, subject to the repayment requirement if elected in
Section (S). Permissible sources for restoration of the Participant's
Account are amounts forfeited from his Account, other forfeitures, and
if necessary an extraordinary Company contribution sufficient when
added to the forfeiture to restore the Participant's Account.
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Any Policy distributed to the Participant that is still in effect on a
premium-paying basis on the date of repayment may be transferred to the
Plan, and the cash value shall be counted as part of the amount repaid.
PART XIII - FORFEITURES
13.1 OCCURRENCE OF FORFEITURE. In accordance with Paragraph 12.4, a
forfeiture shall occur as of the date a Participant terminates
employment with the Company and receives a distribution. If the
Participant does not receive a distribution, forfeiture shall occur
after five (5) consecutive One-Year Breaks in Service. The forfeiture
shall be the Participant's account attributable to Company Matching and
Profit-Sharing Contributions which has not become vested under Part IX.
In addition, a Highly Compensated Participant shall forfeit his
nonvested Company contributions (and earnings thereon) in excess of the
amount permitted under the Actual Contribution Percentage limits of
Paragraph 4.4 and such forfeitures shall be applied under Paragraph
4.5(b). A Participant shall not forfeit any part of his nonvested
Participant's account attributable to Company contributions solely as a
result of a withdrawal prior to retirement under Part X. Furthermore, a
Participant shall not forfeit any part of his Participant's account for
any other cause.
The nonvested portion of a Company contribution or a forfeiture
allocation credited to a Participant's account in a Plan Year following
his Termination of Employment shall be allocated at the next allocation
date.
13.2 APPLICATION OF FORFEITURES. Forfeitures shall first be allocated to the
accounts of Participants whose benefits are entitled to be restored
under Paragraph 12.4. The remaining forfeitures shall then be applied
in the manner elected in Section (L). If forfeitures are reallocated, a
Participant whose employment is terminated before the end of the Plan
Year, but after he has completed 1,000 Hours of Service or more during
the Plan Year shall or shall not share in reallocated forfeitures for
the Plan Year allocated after the date of his Termination of Employment
as elected in Section (L). Forfeitures derived from Company Matching
Contributions and Company Profit-Sharing Contributions shall be
reallocated to the account for Company Profit-Sharing Contributions of
each Participant who is entitled to share in the forfeitures.
Forfeitures shall not be reallocated to a Participant to the extent it
would be an Excess Annual Addition under Part V, Limitation on
Allocations. If more than one Company adopts the Plan, any forfeitures
reallocated will be applied in accordance with Section (L).
PART XIV - RETIREMENT BENEFITS
14.1 NORMAL FORM OF RETIREMENT BENEFIT. The Normal Form of benefit shall be
a one-sum cash distribution or, at the election of the Participant, the
form of benefit described in Paragraph 14.2.
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14.2 OPTIONAL FORMS OF BENEFIT. The Participant may elect a form of
distribution consisting of installments, any form of annuity provided
by the Insurance Company, a Direct Rollover of an Eligible Rollover
Distribution or a partial cash payment in addition to the optional form
of benefits described in this section, instead of the Normal Form
described in Paragraph 14.1.
Installment payments shall be made over a period not to exceed the
Participant's (or the Participant's and Spouse's) life expectancy.
Any annuity contract distributed herefrom must be nontransferable. The
terms of any annuity contract purchased and distributed by the Plan to
a Participant and Spouse shall comply with the requirements of this
Plan.
14.3 SPECIAL RULE. This Paragraph shall be operative with respect to the
Participant if it is determined that this Plan is a direct or indirect
transferee of a defined benefit plan, money purchase plan, target
benefit plan, stock bonus or profit-sharing plan which is subject to
the survivor annuity requirements of Code Sections 401(a)(11) and 417.
In addition, this Paragraph applies to the Participant if at least one
of the following two conditions are met: (1) the Participant elects
retirement benefits in the form of a life annuity under Paragraph 14.2,
and (2) on the death of the Participant, the Participant's vested
account balance is not paid to the Participant's surviving Spouse in
accordance with Paragraph 15.1.
If this Paragraph is operative, the Normal Form of benefit shall be a
life annuity. The Normal Form shall be paid to a Participant who is not
married and does not elect a one-sum cash payment or an optional form
of benefit under Paragraph 14.2. A married Participant's entire account
balance (attributable to both Company and Participant contributions)
shall be paid in the form of an Automatic Joint and Survivor Annuity,
unless a one-sum cash payment or an optional form of benefit is
selected (pursuant to a Qualified Election) within the 90-day period
ending on the annuity starting date. The annuity starting date is the
first day of the first period for which an amount is paid as an annuity
or any other form.
In the case of an Automatic Joint and Survivor Annuity, the
Administrator shall provide each Participant no less than 30 days and
no more than 90 days prior to the annuity starting date a written
explanation of: (i) the terms and conditions of an Automatic Joint and
Survivor Annuity; (ii) the Participant's right to make and effect of an
election to waive the Automatic Joint and Survivor Annuity form of
benefit; (iii) the rights of a Participant's Spouse; and (iv) the right
to make, and the effect of, a revocation of a previous election to
waive the Automatic Joint and Survivor Annuity.
14.4 WAIVER OF THIRTY-DAY PERIOD FOR CONSENT
If the provisions of Paragraph 14.3 are not operative, a distribution
may commence less than 30 days after the notice required under Section
1.411(a)-11(c) of the Income Tax Regulations is given, that: (1) the
Administrator clearly informs the Participant that the Participant has
a right to a period of at least 30 days after
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receiving the notice to consider the decision of whether or not to
elect a distribution (and, if applicable, a particular distribution
option); and (2) the Participant, after receiving the notice,
affirmatively elects a distribution.
14.5 AMOUNT OF RETIREMENT BENEFIT. The amount of a Participant's retirement
benefit shall equal the Participant's vested account balance. The
vested account balance is the aggregate value of the Participant's
vested Account balances derived from Company and Participant
contributions (including rollovers), including the proceeds of
insurance contracts, if any, on the Participant's life.
Upon retirement, contributions by or on behalf of a Participant shall
cease. If a Participant retires prior to the end of a Plan Year, any
contributions credited prior to retirement to his Participant's Account
for the Plan Year shall be applied for him as part of his retirement
benefit.
14.6 PARTICIPANT ELECTION OF A RETIREMENT DATE. A Participant shall be
entitled to a retirement benefit upon separation from service:
(a) On or after his Normal Retirement Date as designated in
Section (F);
(b) On his Early Retirement Date as permitted in Section (F);
(c) On his Disability Retirement Date as permitted in Section (F).
The Participant's Account shall be paid in a form and on a Retirement
Date elected by the Participant. A Participant shall give the
Administrator written notice of his intention to retire on a Retirement
Date within 90 days prior to separation from service. Written notice
shall be made on a form required by the Administrator.
If a Participant separates from service before satisfying the age
requirement for early retirement, if elected in Section (F), but has
satisfied the Service requirement, the Participant shall be entitled to
elect an early retirement benefit upon satisfaction of such age
requirement.
14.7 PARTICIPANT'S RIGHT TO DEFER RETIREMENT. A Participant may defer
retirement without Company approval. If, however, any Participant after
the age of 65 is employed in a bona-fide executive or high policymaking
position during the two-year period immediately before his retirement
date and if such Participant is entitled to an immediate nonforfeitable
annual retirement benefit from this Plan and from all other pension,
profit-sharing, savings or deferred compensation plans of the Company,
or any combination of such plans, which equals, in aggregate $44,000 or
more, then the Company may provide for the retirement of such
Participant on or after Normal Retirement Date without such
Participant's consent.
In the case of continued employment after Normal Retirement Date,
Company contributions and forfeitures shall continue to be allocated on
behalf of Participants. Investment gains and losses shall continue to
be credited to the Participant's
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Account. A Participant who defers retirement after his Normal
Retirement Date shall defer distribution of his Participant's Account,
in accordance with Paragraph 14.8.
14.8 DISTRIBUTION OF RETIREMENT BENEFITS. If the Participant's Account
balance is $3,500 or less, the entire Participant's Account shall be
distributed. No one-sum cash distribution shall be made under the
preceding sentence after the annuity starting date.
Unless the Participant elects otherwise, distribution of benefits shall
begin the first day of the calendar month coincident with or,
otherwise, next following the later of:
(a) the Participant attaining age 65 (or Normal Retirement Date,
if earlier);
(b) the 10th anniversary of the year in which the Participant
commenced participation in the Plan; or,
(c) the Participant terminates service with the Company; provided,
however, that if the Participant's vested account balance
derived from Company and Participant contributions exceeds
$3,500, no distribution shall be made without the consent of
the Participant (and, if Paragraph 14.3 is operative,
surviving Spouse) before the Participant attains or would have
attained, if not deceased, the later of the Normal Retirement
Date or age 62. Failure to consent shall be deemed an election
to defer commencement of payment of any benefit.
If allowed in Section (F), a retired Participant may also elect to
defer payment of any benefit after retirement. However, the entire
interest of the Participant must be distributed or begin to be
distributed no later than the Participant's required beginning date.
The required beginning date of a retired or active Participant is the
first day of April following the calendar year in which such individual
attains age 70 1/2, except as otherwise elected in accordance with Part
XXI. Notwithstanding the prior sentence, if an active Participant
attained age 70 1/2 in 1987 or earlier, and was not a 5 percent owner
in any year since attaining age 66 1/2, the Participant's account
balance can be distributed upon retirement. The minimum distribution
for other calendar years, including the minimum distribution for the
distribution calendar year in which the Participant's required
beginning date occurs, must be made on or before December 31 of that
distribution calendar year. A distribution calendar year is a calendar
year for which a minimum distribution is required. The first
distribution calendar year is the calendar year immediately preceding
the calendar year which contains the Participant's required beginning
date. Neither the consent of the Participant nor of the Participant's
Spouse shall be required to the extent that a distribution is required
to satisfy this Paragraph.
All distributions required under this Part shall be determined and made
in accordance with the Income Tax Regulations under Code Section
401(a)(9), including the minimum distribution incidental benefit
requirement of Section 1.401(a)(9)-2 of the Proposed Regulations.
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14.9 MINIMUM AMOUNTS TO BE DISTRIBUTED FROM PARTICIPANT ACCOUNT. If a
Participant has attained age 70 1/2, benefits to be distributed in
installment payments will not exceed a period beyond the life
expectancy of the Participant or the joint life and last survivor
expectancy of the Participant and the Participant's Spouse. The amount
required to be distributed for each calendar year, beginning with
distributions for the first distribution calendar year, shall not be
less than the quotient obtained by dividing the Participant's benefit
by the applicable life expectancy. If elected by the Participant, life
expectancies shall be recalculated annually. Such election shall be
irrevocable as to the Participant (or Spouse) and shall apply to all
subsequent years.
The Participant's benefit is the account balance as of the last
Valuation Date in the calendar year immediately preceding the
distribution calendar year (valuation calendar year) increased by the
amount of any contributions or forfeitures allocated to the account
balance as of dates in the valuation calendar year after the Valuation
Date and decreased by distributions made in the valuation calendar year
after the Valuation Date. For purposes of this Paragraph, if any
portion of the minimum distribution for the first distribution calendar
year is made in the second distribution calendar year on or before the
required beginning date, the amount of the minimum distribution made in
the second distribution calendar year shall be treated as if it had
been made in the immediately preceding distribution calendar year.
Unless the Administrator directs in writing an alternative method of
determining life expectancy in accordance with IRS Reg. Sections
1.401(a)(9)-1 and 1.401(a)(9)-2, the life expectancy (or joint and last
survivor expectancy) calculated using the attained age of the
Participant (or Participant and Spouse) as of the Participant's (or
Participant's and Spouse's) birthday in the applicable calendar year
shall be reduced by one for each calendar year which has elapsed since
the date life expectancy was first calculated. If life expectancy is
being recalculated, the applicable life expectancy shall be the life
expectancy as so recalculated. The applicable calendar year shall be
the first distribution calendar year, and if life expectancy is being
recalculated, such succeeding calendar year. If installment payments
commence before the required beginning date, the date distribution is
considered to begin is the date distribution actually commences.
Life expectancy and joint and last survivor expectancy are computed by
use of the expected return multiples in Tables V and VI of Section
1.72-9 of the Income Tax Regulations.
PART XV - DEATH BENEFITS
15.1 PRERETIREMENT DEATH OF A PARTICIPANT. If the Participant dies before
distribution of his interest begins, the Participant's account balance
shall become fully vested. The account balance shall be paid to the
Participant's surviving Spouse. The Spouse may elect whether to receive
the Participant's account balance in the form of a Preretirement
Survivor Annuity, installments, a one-sum cash payment, or
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as a Direct Rollover of an Eligible Rollover Distribution. If the
surviving Spouse elects the latter option as the form of benefit, the
requirements of Paragraph 12.3(f) shall apply.
If there is no surviving Spouse, or, if the surviving Spouse has
already consented in a manner conforming to a Qualified Election, the
account balance shall be paid to the Participant's designated
Beneficiary. Unless otherwise elected by the Participant, any portion
of the Participant's interest payable to a designated Beneficiary other
than the Participant's surviving Spouse shall be paid in the form of an
annuity, installments, or a one-sum cash payment. A Qualified Election
is not required with respect to the amount at risk portion of any
Policies. For purposes of the foregoing consent requirements, the
Participant's vested account balance shall not include amounts
attributable to accumulated Participant Deductible Voluntary
Contributions within the meaning of Code Section 72(o)(5)(B).
Distribution of the Participant's entire interest shall be completed by
December 31 of the calendar year containing the fifth anniversary of
the Participant's death except to the extent that an election is made
to receive distributions in accordance with (a) or (b) below:
(a) If any portion of the Participant's interest is payable to a
designated Beneficiary, distributions may be made over the
life or over a period certain not greater than the life
expectancy of the designated Beneficiary commencing on or
before December 31 of the calendar year immediately following
the calendar year in which the Participant died;
(b) If the designated Beneficiary is the Participant's surviving
Spouse, the date distributions are required to begin in
accordance with (a) above shall not be earlier than the later
of (1) December 31 of the calendar year immediately following
the calendar year in which the Participant died and (2)
December 31 of the calendar year in which the Participant
would have attained age 70 1/2.
If the Participant has not made an election pursuant to this Paragraph
by the time of his death, the Participant's designated Beneficiary must
elect the method of distribution no later than the earlier of (1)
December 31 of the calendar year in which distributions would be
required to begin under this Paragraph, or (2) December 31 of the
calendar year which contains the fifth anniversary of the date of death
of the Participant. If the Participant has no designated Beneficiary,
or if the designated Beneficiary does not elect a method of
distribution, distribution of the Participant's entire interest must be
completed by December 31 of the calendar year containing the fifth
anniversary of the Participant's death.
For purposes of this Paragraph, if the surviving Spouse dies after the
Participant, but before payments to such Spouse begin, the provisions
of this Paragraph, with the exception of Paragraph (b) therein, shall
be applied as if the surviving Spouse were the Participant.
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For the purposes of this Paragraph, distribution of a Participant's
interest is considered to begin on the Participant's required beginning
date (or, if the Spouse dies after the Participant, the date
distribution is required to begin to the surviving Spouse). If
distribution in the form of an annuity irrevocably commences to the
Participant before the required beginning date, the date distribution
is considered to begin is the date distribution actually commences.
The entire Participant's Account shall be distributed if the
Participant's Account is $3,500 or less. No one-sum cash distribution
shall be made to the surviving Spouse under the preceding sentence
after the annuity starting date or if the Account exceeds $3,500 unless
the surviving Spouse consents in writing to such distribution.
15.2 PRERETIREMENT SURVIVOR ANNUITY. The Preretirement Survivor Annuity is
an annuity for the life of the surviving Spouse. The surviving Spouse
may elect to have such annuity distributed within a reasonable period
after the Participant's death. If Paragraph 14.3 or 14.4 is operative,
the Administrator shall provide each Participant a written explanation
of the Preretirement Survivor Annuity in such terms and in such manner
as would be comparable to the explanation provided for meeting the
requirements applicable to an Automatic Joint and Survivor Annuity.
The applicable period for a Participant is whichever of the following
periods end last:
(a) The period beginning with the first day of the Plan Year in
which the Participant attains age 32 and ending with the close
of the Plan Year preceding the Plan Year in which the
Participant attains age 35;
(b) A reasonable period ending after the Employee becomes a
Participant;
(c) A reasonable period ending after Paragraph 14.3 first applies
to the Participant.
Notwithstanding the foregoing, notice must be provided within a
reasonable period ending after Termination of Employment in the case of
a Participant who separates from service before attaining age 35.
For purposes of applying the preceding Paragraph, a reasonable period
ending after the enumerated events is the end of the two-year period
beginning one year prior to the date of the applicable event occurs,
and ending one year after that date.
In the case of a Participant who separates from service before the Plan
Year in which age 35 is attained, notice shall be provided within the
two-year period beginning one year prior to separation and ending one
year after separation. If such a Participant thereafter returns to
employment with the Company, the applicable period for such Participant
shall be redetermined.
15.3 POST-RETIREMENT DEATH OF A PARTICIPANT. If the Participant dies after
distribution of his interest has begun, the remaining portion of such
interest shall
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continue to be distributed at least as rapidly as under the method of
distribution being used prior the Participant's death. In the case of
an installment payment option, installment payments remaining at the
Participant's death shall be distributed as a one-sum cash payment.
15.4 DESIGNATION OF A BENEFICIARY. Subject to Code Sections 401(a)(11) and
417, the Participant shall have the right to designate his Beneficiary
and to change his Beneficiary in accordance with the terms of the
Contract and Policy. The Participant shall also have the right to
designate or change the form of death benefit to his Beneficiary in
accordance with the terms of the Contract and Policy. Any such right
may be exercised by filing written notice(s) with the Insurance
Company, and the effective date thereof shall be as provided in the
Contract or Policy, whichever is applicable. If no Beneficiary is
named, the payment of death benefits shall be made in accordance with
the terms of the Contract and the Policy. A designation of a
Beneficiary other than the Spouse of a married Participant may be made
only as a Qualified Election.
PART XVI - TOP-HEAVY REQUIREMENTS
16.1 IN GENERAL. If the Plan is or becomes top-heavy in any Plan Year, the
provisions of this Part XVI shall supersede any conflicting provisions
in the Plan or Adoption Agreement. For purposes of this Part,
compensation shall mean Compensation as defined in Section (E)(1) of
the Adoption Agreement, but including amounts contributed by the
Company pursuant to a Deferred Salary Agreement which are excludable
from the Employee's gross income under Code Section 125, 402(e)(3),
402(h)(1)(B) or 403(b).
16.2 MINIMUM CONTRIBUTION UNDER A TOP-HEAVY PLAN. Company contributions and
forfeitures allocated on behalf of any Participant who is a non-Key
Employee shall not be less than the lesser of 3 percent of such
Participant's compensation or in the case where the Company has no
defined benefit plan which designates this Plan to satisfy Code Section
401, the largest percentage of Company contributions and forfeitures,
as a percentage of the first $150,000 of the Key Employee's
compensation, allocated on behalf of any Key Employee for that year.
This minimum contribution is determined without regard to any Social
Security contribution. The minimum contribution shall be made even
though, under other Plan provisions, the Participant would not
otherwise be entitled to receive a contribution, or would have received
a lesser contribution for the year because of:
(a) the Participant's failure to complete 1,000 Hours of Service
(or any equivalent provided in the Plan),
(b) the Participant's failure to make Elective Deferrals, as
described in Section (G), or
(c) compensation less than a stated amount.
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Notwithstanding the above, the provision contained in the preceding
Subparagraph shall not apply to any Participant who was not employed by
the Company on the last day of the Plan Year. Also, such provision
shall not apply to any Participant to the extent provided by Section
(R).
Elective Deferrals, Company Qualified Matching, and Company Matching on
behalf of Key Employees shall be taken into account in determining the
minimum contribution. However, Elective Deferrals on behalf of non-Key
Employees may not be taken into account for the purpose of satisfying
the minimum top-heavy contribution requirements. Further, Company
Matching and Company Qualified Matching Contributions cannot be
utilized to satisfy the minimum contribution requirements for Plan
Years beginning after 1988.
16.3 NONFORFEITABILITY OF MINIMUM CONTRIBUTION. The minimum contribution
required (to the extent required to be nonforfeitable under Code
Section 416(b)) may not be forfeited under Code Section 411(a)(3)(B) or
411(a)(3)(D).
16.4 TOP-HEAVY VESTING. During and subsequent to the first Plan Year in
which this Plan is top-heavy, one of the minimum vesting schedules as
elected by the Company in Section (R) shall automatically apply to the
Plan. The minimum vesting schedule applies to all benefits within the
meaning of Code Section 411(a)(7) except those attributable to
Participant contributions and Elective Deferrals, including benefits
accrued before the effective date of Code Section 416 and benefits
accrued before the Plan became top-heavy. However, this Paragraph does
not apply to the account balances of any Participant who does not have
an Hour of Service after the Plan has initially become top-heavy and
such Participant's account balance attributable to Company
contributions and forfeitures shall be determined without regard to
this Paragraph.
16.5 TOP-HEAVY DEFINITIONS.
(a) KEY EMPLOYEE: Any Employee or former Employee (and the
Beneficiaries of such Employee) who at any time during the
determination period was an officer of the Company if such
individual's annual compensation exceeded 50 percent of the
dollar limitation under Code Section 415(b)(1)(A), an owner
(or considered an owner under Code Section 318) of one of the
ten largest interests in the Company if such individual's
compensation exceeds 100 percent of the dollar limitation
under Code Section 415(c)(1)(A), a 5 percent owner of the
Company, or a 1 percent owner of the Company who has annual
compensation of more than $150,000.
For purposes of determining the number of officers taken into
account, Employees described in Code Section 414(q)(8) shall
be excluded. The determination period is the Plan Year
containing the Determination Date and the four preceding Plan
Years. The determination of who is a Key Employee shall be
made in accordance with Code Section 416(i)(1) and the
Regulations thereunder. For purposes of determining whether a
plan is top-heavy under Code Section 416, Elective Deferrals
are considered Company contributions.
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(b) TOP-HEAVY PLAN: For any Plan Year beginning after December 31,
1983, this Plan is top-heavy if any of the following
conditions exists:
(i) If the top-heavy ratio for this Plan exceeds 60
percent and this Plan is not part of any required
aggregation group or permissive aggregation group of
plans.
(ii) If this Plan is a part of a required aggregation
group of plans but not part of a permissive
aggregation group and the top-heavy ratio for the
group of plans exceeds 60 percent.
(iii) If this Plan is a part of a required aggregation
group and part of a permissive aggregation group of
plans and the top-heavy ratio for the permissive
aggregation group exceeds 60 percent.
(c) TOP-HEAVY RATIO
(i) Defined Contribution Plan Only:
If the Company maintains one or more defined
contribution plans (including any simplified employee
pension plan) and the Company has never maintained
any defined benefit plan which during the 5-year
period ending on the Determination Date(s) has or has
had accrued benefits, the top-heavy ratio for this
Plan alone or for the required or permissive
aggregation group as appropriate is a fraction, the
numerator of which is the sum of the account balances
of all Key Employees as of the Determination Date(s)
(including any part of any account balance
distributed in the 5-year period ending on the
Determination Date(s)), and the denominator of which
is the sum of all account balances (including any
part of any account balance distributed in the 5-year
period ending on the Determination Date(s)), both
computed in accordance with Code Section 416 and the
Regulations thereunder.
Both the numerator and denominator of the top-heavy
ratio are increased to reflect any contribution not
actually made as of the Determination Date, but which
is required to be taken into account on that date
under Code Section 416 and the Regulations
thereunder.
(ii) Defined Contribution and Defined Benefit Plan:
If the Company maintains one or more defined
contribution plans (including any simplified employee
pension plan) and the Company maintains or has
maintained one or more defined benefit plans which
during the 5-year period ending on the Determination
Date(s) has or has had any accrued benefits, the
top-heavy ratio for any required or permissive
aggregation group as appropriate is a fraction, the
numerator of which is the sum of account balances
under the aggregated defined contribution plan
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or plans for all Key Employees determined in
accordance with (i) above, and the present value of
accrued benefits under the aggregated defined benefit
plan or plans for all Key Employees as of the
Determination Date(s), and the denominator of which
is the sum of the account balances under the
aggregated defined contribution plan or plans for all
Participants determined in accordance with (i) above,
and the present value of accrued benefits under the
defined benefit plans for all Participants as of the
Determination Date(s), all determined in accordance
with Code Section 416 and the Regulations thereunder.
The accrued benefits under a defined benefit plan in
both the numerator and denominator of the top-heavy
ratio are adjusted for any distribution of an accrued
benefit made in the 5-year period ending on the
Determination Date.
(iii) For purposes of (i) and (ii) above, the value of
account balances and the present value of accrued
benefits shall be determined as of the most recent
Valuation Date that falls within or ends with the
12-month period ending on the Determination Date,
except as provided in Code Section 416 and the
Regulations thereunder for the first and second plan
years of a defined benefit plan. The account balances
and accrued benefits of a Participant (1) who is a
non-Key Employee but who was a Key Employee in a
prior year or (2) who has not been credited with at
least one Hour of Service with any Employer
maintaining the Plan at any time during the 5-year
period ending on the Determination Date shall be
disregarded. The calculation of the top-heavy ratio,
and the extent to which distributions, rollovers, and
transfers are taken into account shall be made in
accordance with Code Section 416(g)(4)(A) and the
Regulations thereunder. For purposes of determining
whether a plan is top-heavy under Code Section 416,
Elective Deferrals are considered Company
contributions.
When aggregating plans, the value of account balances
and accrued benefits shall be calculated with
reference to the Determination Dates that fall within
the same calendar year. The accrued benefit of an
Employee other than a Key Employee shall be
determined under (a) the method, if any, that
uniformly applies for accrual purposes under all
plans maintained by the Company, or (b) if there is
no such method, as if such benefit accrued not more
rapidly than the slowest accrual rate permitted under
the fractional accrual rate of Code Section
411(b)(1)(C).
(d) PERMISSIVE AGGREGATION GROUP: The required aggregation group
of plans plus any other plan or plans of the Company which,
when considered as a group with the required aggregation
group, would continue to satisfy the requirements of Code
Sections 401(a)(4) and 410(b).
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(e) REQUIRED AGGREGATION GROUP:
(i) Each qualified plan of the Company in which at least
one Key Employee participates, or participated at any
time during the determination period (regardless of
whether the Plan has terminated), and
(ii) any other qualified plan of the Company which enables
a plan described in (i) to meet the requirements of
Code Sections 401(a)(4) or 410(b).
(f) DETERMINATION DATE: For any Plan Year subsequent to the first
Plan Year, the last day of the preceding Plan Year. For the
first Plan Year of the Plan, the last day of that year.
(g) VALUATION DATE: The date stated in Section (C)(4) as of which
account balances or accrued benefits are valued for purposes
of calculating the top-heavy ratio.
(h) PRESENT VALUE: Present value shall be based only on the
interest and mortality rates specified in Section (U).
PART XVII - INSURANCE COMPANY
17.1 NOT A PARTY. The Insurance Company is not a party to the Plan and is
not responsible for the validity of the Plan as adopted by the Company
or the qualification of the Plan under the tax laws.
17.2 NOT RESPONSIBLE FOR THE ACTS OF THE COMPANY OR ADMINISTRATOR. The
Insurance Company shall not be responsible to look to the terms of the
Plan to determine whether or not any action of the Company or
Administrator is authorized by its terms.
17.3 RELIANCE ON SIGNATURES. Any instruments executed by the Administrator
or officers of the Company may be accepted by the Insurance Company as
the duly authorized act of the Administrator or the Company.
17.4 ACQUITTANCE. The Insurance Company shall be discharged from all
liability for any amount paid to the Company or paid in accordance with
the direction of the Company and shall not be obliged to see to the
distribution or further application of any monies by it.
17.5 DUTIES OF THE INSURANCE COMPANY. The obligations of the Insurance
Company shall be determined solely by the terms of its Contracts,
Policies and other agreements executed by it. The Insurance Company
shall maintain records concerning its Contracts and Policies and shall
supply such records to the Administrator when necessary to assure
proper administration of the Plan. The
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Insurance Company also shall perform such duties as are directed by the
Administrator pursuant to an executed services agreement on behalf of
the Plan.
17.6 PLAN CONTROLS. In the event of any conflict between the provisions of
the Plan and the terms of any Contract or Policy, the provisions of the
Plan shall control, provided that the mutual rights and obligations of
the parties to any Contract, agreement or Policy shall not thereby be
altered.
PART XVIII - AMENDMENT, TERMINATION, MERGER, ETC. OF PLAN
18.1 PERMANENCY. The expectation of the Company is that the Plan and the
payment of contributions hereunder, shall be continued indefinitely,
but continuance of the Plan is not assured as a contractual obligation
of the Company. This Plan may be amended or terminated only as provided
in this Part. All Plan amendments, including one to terminate the Plan,
shall be adopted in writing by the Company's board of directors. Any
material modification of the Plan by amendment or termination shall be
communicated to all interested parties, the Department of Labor, and
the Internal Revenue Service in the time and manner prescribed by law.
18.2 AMENDMENT BY INSURANCE COMPANY. The Company hereby delegates to the
Insurance Company, the Sponsoring Organization, the right to amend the
Plan and its Adoption Agreement and the Company and Administrator shall
be deemed to have consented to such amendment. Such delegation shall be
limited to the right to amend and shall not be construed to make the
Insurance Company a party to this Plan or the Adoption Agreement. The
Insurance Company shall, after amendment, contact each Company of
record who has previously adopted the Prototype Plan and give the
Company the opportunity to continue under the amended Prototype Plan.
18.3 PERMISSIBLE AMENDMENTS BY COMPANY. Subject to Paragraph 18.4, the
Company, through its duly authorized management committee or by such
persons as the committee delegates its authority, may (1) change the
choice of options in the Adoption Agreement, (2) add overriding
language in the Adoption Agreement when such language is necessary to
satisfy Code Sections 415 or 416 because of the required aggregation of
multiple plans, and (3) add certain model amendments published by the
Internal Revenue Service which specifically provide that their adoption
shall not cause the Plan to be treated as individually designed. A
Company that amends the Plan for any other reason, including a waiver
of the minimum funding requirement under Code Section 412(d), shall no
longer participate in this master or Prototype Plan and shall be
considered to have an individually designed plan.
Any amendment shall be stated by executing an amended Adoption
Agreement and delivering a copy of such amendment to the Administrator
and the Insurance Company. Upon execution and delivery of the executed
Adoption Agreement, the Participants and Beneficiaries shall be bound
thereby.
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18.4 RESTRICTIONS ON AMENDMENTS. No amendment:
(a) Shall increase the duties of the Administrator without his
written consent.
(b) To the vesting schedule under Section (R) shall deprive a
Participant of his nonforfeitable rights to benefits accrued
to the date of the amendment. Further, if the vesting schedule
of the Plan is amended, if the Plan is amended in any way that
directly or indirectly affects the computation of a
Participant's nonforfeitable percentage, or if the Plan is
deemed amended by an automatic change to a top-heavy vesting
schedule, each Participant with at least 3 Years of Service
with the Company may elect, within a reasonable period after
the adoption of the amendment, to have his nonforfeitable
percentage computed under the Plan without regard to such
amendment or changes. The period during which the election may
be made shall commence with the date the amendment is adopted
and shall end on the later of:
(i) 60 days after the amendment is adopted;
(ii) 60 days after the amendment becomes effective; or
(iii) 60 days after the Participant is issued written
notice of the amendment by the Company or
Administrator.
(c) Shall be effective to the extent that it has the effect of
decreasing a Participant's accrued benefit. Notwithstanding
the preceding sentence, a Participant's account balance may be
reduced to the extent permitted under Code Section 412(c)(8).
For purposes of this Paragraph, a Plan amendment which has the
effect of decreasing a Participant's account balance or
eliminating an optional form of benefit, with respect to
benefits attributable to service before the amendment, shall
be treated as reducing an accrued benefit. Furthermore, if the
vesting schedule of the Plan is amended, in the case of an
Employee who is a Participant as of the later of the date of
the date such amendment is adopted or the date it becomes
effective, the nonforfeitable percentage (determined as of
such date) of such Employee's Employer-derived accrued benefit
shall not be less than the percentage computed under the Plan
without regard to such amendment.
(d) Shall change the funding method unless the new funding method
has been approved by the Internal Revenue Service.
(e) Shall change the Plan Year unless the new Plan Year has been
approved by the Internal Revenue Service or is permitted by
IRS Revenue Procedure 87-27.
18.5 TERMINATION OF PLAN. The Company expressly reserves the right to
terminate the Plan in whole or in part at any time without the consent
of any Participant or Beneficiary. The Company shall give written
notice of termination of this Plan to
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the Administrator and the Insurance Company. The Plan shall terminate
upon the first of the following events:
(a) The date terminated by the Company without establishment of
another defined contribution plan;
(b) The date the Company is judicially determined bankrupt or
insolvent;
(c) The date of the disposition by a corporation to an unrelated
corporation of substantially all of the assets (within the
meaning of Code Section 409(d)(2)) used in a trade or business
of such corporation if such corporation continues to maintain
this Plan after the disposition, but only with respect to
Employees who continue employment with the corporation
acquiring such assets; or
(d) The date of the disposition by a corporation to an unrelated
corporation of such corporation's interest in a subsidiary
(within the meaning of Code Section 409(d)(3)) if such
corporation continues to maintain this Plan after the
disposition, but only with respect to Employees who continue
employment with such subsidiary.
18.6 FULL VESTING UPON TERMINATION. If this Plan is terminated or partially
terminated or upon a complete discontinuance of contributions, each
affected Participant shall be fully vested in his Participant's
Account. Upon termination of this Plan, all unallocated forfeitures
shall be reallocated among Participants' Accounts of those Participants
then entitled to share in current allocations, without the restrictions
of Section (L)(2). Following this final allocation, if any forfeiture
causes a Participant's Account to be in excess of the limitation on
allocations provided in Code Section 415, such excess will be disposed
of in accordance with Part V of the Plan.
The value of the Participants' accounts shall be distributed to all
affected Participants as one-sum cash payments. However, if elected by
the Administrator, all affected Participants shall have their benefits
distributed to them in the form of an annuity under the Contract.
If one-sum cash payments are made to the Participants and the Contract
values include allocations to the general investment account of the
Insurance Company, the amounts distributed shall be less any investment
loss charges and other deductions authorized by the Contract. Any
distributions pursuant to this Paragraph are subject to the spousal and
Participant consent requirements (if Paragraph 14.3 is operative)
contained in Code Sections 401(a)(11) and 417.
Notwithstanding the above provision, if any affected Participant had
commenced to receive annuity payments upon separation from service, he
shall continue to receive payments in the form elected.
18.7 MERGER, CONSOLIDATION, OR TRANSFER OF PLAN ASSETS. No merger or
consolidation of this Plan with, or transfer of assets or liabilities
to any other plan
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shall become effective until at least 30 days after the Company or
Administrator has filed with the Secretary of the Treasury such
statement as shall be required by law. In the case of any such merger,
consolidation or transfer of assets to any other plan, each Participant
shall receive a benefit immediately after the merger, etc., (as if the
plan then terminated) which is at least equal to the benefit the
Participant was entitled to immediately before such merger, etc., (as
if the Plan had terminated).
PART XIX - ADMINISTRATION OF PLAN
19.1 APPOINTMENT OF ADMINISTRATOR. The Company shall appoint an
Administrator. A written appointment shall be filed in the Company's
official records. The Insurance Company may not be appointed as
Administrator. The Administrator may be a person, organization, or Plan
committee. Any person so appointed shall accept by filing a written
acceptance with the Company. The Administrator shall serve at the
discretion of the Company, but may resign by filing a written
resignation with the Company.
The discharge of an Administrator shall be made in writing by the
Company, delivered to the person and filed in the official records of
the Company. A new Administrator shall be appointed as soon as possible
after an Administrator resigns or is discharged. If no appointment is
effective at any time, the Administrator shall be the Company. The
Secretary of the Company shall certify in writing the name and
signature of the Administrator, or person acting on behalf of the
Administrator, his address and telephone number to the Insurance
Company. The Insurance Company may assume that such person continues to
hold office until a new certificate is received from the Company. The
Company agrees to fully protect and to indemnify the Insurance Company
in relying upon any authorization or direction the Insurance Company
reasonably believes to be authentic.
19.2 ADMINISTRATOR'S POWERS AND DUTIES. The Administrator shall be
responsible for the day-to-day administration of this Plan and for the
exercise of all fiduciary responsibilities provided for in the Plan
that are not assigned to other parties pursuant to the terms of the
Plan. The Administrator's duties shall include, but not be limited to
the following:
(a) To construe and interpret the provisions of the Plan;
(b) To decide all questions of eligibility for Plan participation
and for the payment of benefits;
(c) To provide appropriate parties, including government agencies,
with such returns, reports, schedules, descriptions, and
individual statements as are required by law within the times
prescribed by law; and to furnish to the Company, upon
request, copies of any or all such materials, and further, to
make copies of such instruments, reports, and descriptions as
are required by law to be available for examination by
Participants and such of their Beneficiaries who are or may be
entitled to benefits under the Plan in such
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places and in such manner as required by law; (the
Administrator may make a reasonable charge for copies);
(d) To furnish to each Participant and each Beneficiary receiving
benefits under the Plan a copy of a summary plan description
and a summary of any material modifications thereof at the
time and in the manner prescribed by law;
(e) To obtain from the Company, the Employees and the Insurance
Company such information as shall be necessary for the proper
administration of the Plan;
(f) To determine the amount, manner and time of payment of
benefits thereunder;
(g) Subject to the approval of the Company only as to any
additional expense, to appoint and retain such agents,
counsel, and accountants for the purpose of properly
administering the Plan;
(h) To take all actions and to communicate to the Insurance
Company in writing all necessary information to carry out the
terms of the Plan;
(i) To notify the Insurance Company in writing of a termination, a
partial termination or a complete discontinuance of
contributions to the Plan;
(j) To direct the Insurance Company to distribute benefits of the
Plan to each Participant and Beneficiary in accordance with
the terms of the Plan;
(k) To provide each Participant within the time period set forth
in Paragraphs 14.3 and 15.2, if applicable, a written
explanation of: the Automatic Joint and Survivor Annuity and
the Preretirement Survivor Annuity; and
(l) To do such other acts reasonably required to administer the
Plan in accordance with its provisions or as may be provided
for or required by law.
The Administrator and each other fiduciary shall discharge their duties
with respect to the Plan in accordance with the provisions of the Plan,
including the Adoption Agreement.
19.3 DELEGATION OF ADMINISTRATIVE RESPONSIBILITIES. The Administrator may
appoint other persons to perform any of his administrative functions.
Such appointment shall be made in writing and shall be effective upon
the written approval of the Company. The Administrator and any such
appointee may employ advisors and other persons necessary to help the
Administrator carry out his functions, including fiduciary functions.
The Administrator shall monitor the work and review the performance of
each such appointee, and he shall remove any such appointee from his
position if the Administrator determines that his performance is
unsatisfactory. Any person or group of persons may serve in more than
one
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fiduciary capacity. The Administrator may delegate one or more of his
responsibilities to the Insurance Company by a written administrative
services agreement entered into with the Insurance Company. The
Insurance Company's administrative responsibilities shall be limited to
those services set forth in such agreement.
19.4 BONDING. The Administrator, and any other fiduciary, officer of the
Company and Employee of the Company who handles funds of the Plan shall
be bonded as required by ERISA. Such bond shall protect the Plan
against loss by reason of acts of fraud or dishonesty by such persons
directly or through the connivance of others. The amount of the bond
shall not be less than 10 percent of the value of the Contract at the
beginning of the Year nor more than $500,000. In no event shall the
bond be less than $1000. If the Secretary of the U.S. Department of
Labor prescribes an amount in excess of $500,000, however, a bond in
the prescribed amount shall be obtained.
19.5 FIDUCIARY LIABILITY INSURANCE AND INDEMNIFICATION. The Company may
purchase fiduciary liability insurance or agree to indemnify and hold
harmless the Administrator and persons appointed by the Administrator
or Company to carry out fiduciary functions against any and all claims,
loss, damage, expense or liability arising from their official
capacities in the administration of the Plan, unless the same is
determined to be due to gross negligence or willful misconduct.
19.6 COMPENSATION OF ADMINISTRATOR. The Company shall reimburse the
Administrator for any reasonable costs and expenses, including
fiduciary liability insurance, incurred by the Administrator as a
result of performance of his duties or functions. The Company shall
compensate the Administrator for services rendered under this Plan,
except that no Administrator who receives full-time compensation from
the Company shall be so compensated.
19.7 SERVICE OF LEGAL PROCESS. The Administrator is the designated agent to
receive service of legal process on behalf of the Plan, unless the
Company designates some other party in writing in the summary plan
description.
19.8 COMPANY CENSUS REPORT. To enable the Administrator to perform his
functions, the Company shall furnish the Administrator full and timely
information on or before each Plan Year (and more frequently, if
required) on all matters relating to classification of Employees, their
dates of employment, ages, Hours of Service, Compensation, dates of
retirement, death, disability or Termination of Employment, causes of
Termination of Employment and such other census data as may be required
to administer the Plan. The Administrator shall advise the Insurance
Company in writing of such information about Participants' and
Beneficiaries' status, including changes in status, pertinent to
determining benefit entitlements under the Contract or Policies.
19.9 INFORMATION ABOUT PLAN. Any Participant in the Plan, or any Beneficiary
receiving benefits under the Plan, may examine copies of the Plan, the
Contract, any Policies on his life, the summary plan description, the
latest annual report, any
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collective bargaining agreement, Contract or any other instrument under
which this Plan is maintained or operated. The Administrator shall
maintain all items listed in this Paragraph in his office, or in other
places as he may designate from time to time to comply with regulations
issued under ERISA, for examination during normal business hours. Upon
written request of a Participant or Beneficiary receiving benefits
under this Plan, the Administrator shall furnish him with a copy of any
item listed in this Paragraph. The Administrator may impose a charge
equal to the costs of reproduction, but in no event shall the costs
exceed 25 cents per page.
19.10 INFORMATION ABOUT PARTICIPANTS AND BENEFICIARIES. Each Participant and
each Beneficiary of a deceased Participant shall file with the
Administrator from time to time in writing his current post office
address. Any communication, statement, or notice addressed to a
Participant or a Beneficiary at his last post office address filed with
the Administrator or as shown on the Company's records, shall bind the
Participant or Beneficiary for all purposes of this Plan. Each
Participant shall file with the Administrator his name, Social Security
number, date of birth, and marital status. Each married Participant
shall file, upon request, with the Administrator the name, date of
birth, and date of marriage to his Spouse. The Administrator may
require satisfactory evidence of any personal information required to
administer the Plan. The information provided by the Participant
concerning his Spouse shall bind the Participant, the Participant's
Spouse and their heirs for all purposes of the Plan. The Participant
shall be required to notify the Administrator of any changes in
information previously filed.
19.11 CLAIM FOR BENEFITS. All applications for benefits under the Plan shall
be submitted to the Administrator in writing on forms prescribed by the
Administrator. The application shall be signed by the Participant, and
the Participant's Spouse if required by the Administrator, or in the
case of a death benefit by the Beneficiary or legal representative of
the deceased Participant. Each Participant and each Beneficiary of a
deceased Participant must furnish the Administrator with such evidence,
data or other information as the Administrator or Insurance Company
considers necessary or desirable for purposes of administering the
Plan. The provisions of this Plan are effective for the benefit of each
Participant subject to the condition that each Participant or
Beneficiary shall furnish promptly full, true and complete evidence,
data or other information when requested by the Administrator, provided
the Participant or Beneficiary is advised of the affect of his failure
to comply with the request. The Administrator shall make all
determinations as to the right of any person to a benefit under the
Plan. The Administrator shall notify the claimant of the acceptance or
denial of any claim within 90 days, unless special circumstances are
deemed by the Administrator to require an additional period of no more
than 90 days. If an extension is necessary, the Administrator shall
notify the claimant in writing explaining why more time is needed and
indicate a date by which the Administrator expects to render a
decision.
19.12 CLAIMS REVIEW PROCEDURE. The Administrator shall provide to any
claimant whose claim for benefits under the Plan has been fully or
partially denied a written notice setting forth the specific reasons
for such denial. Such notice shall state that the claimant is entitled
to request a review by the Administrator of the decision
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denying the claim, the reasons for denial, the Plan provisions upon
which the denial is based, a description and reason for needing any
additional information needed to consider the claim, and an explanation
of the review procedure. The claimant or his authorized representative
may within 60 days of the denial of the claim: request a claim review
by the Administrator, review pertinent documents relating to the
denial, and submit issues and comments in writing to the Administrator.
The Administrator must make a final decision on a claim reviewed within
sixty days. The Administrator shall make a full and fair review of such
claim and any written materials submitted by the claimant and may
require the claimant or the Company to submit such additional evidence
as the Administrator deems necessary or advisable to make a claims
review.
On the basis of the review, the Administrator shall make an independent
determination of the claimant's entitlement to benefits under the Plan.
The decision of the Administrator upon review, if supported by
substantial evidence in the record, shall be final and conclusive on
all parties to the Plan. The Administrator shall give the claimant
written notice of his decision upon review which shall include specific
reasons and references to the Plan provision upon which his decision is
based. The 60-day review period may be extended for another 60 days if
the Administrator finds that special circumstances require an extension
of time. If after such review the Administrator concludes that the
denial of benefits was erroneous or contrary to the Plan or to the law,
the Administrator shall take such action as shall be appropriate to
provide such benefit.
19.13 MISSING PARTICIPANTS OR BENEFICIARIES. In the event a person entitled
to a benefit is unable to be found after a diligent one-year search by
the Administrator, the benefit payable to that person shall be
forfeited and applied to reduce the Company's contributions under the
Plan, provided, however, that the Administrator shall reinstate the
benefit in the event the person entitled thereto is found or makes a
claim. The sources for restoration of the benefit shall be forfeitures
or an additional Company contribution.
PART XX - MISCELLANEOUS
20.1 ASSIGNMENT OR ALIENATION. No benefit or interest available hereunder
shall be subject to assignment or alienation, either voluntarily or
involuntarily. The preceding sentence shall also apply to the creation,
assignment, or recognition of a right to any benefit payable with
respect to a Participant pursuant to a domestic relations order, unless
such order is determined to be a qualified domestic relations order, as
defined in Code Section 414(p), or any domestic relations order entered
before January 1, 1985. Notwithstanding any other provision to the Plan
and as directed in writing by the Administrator, a distribution shall
be made immediately to an alternate payee pursuant to such qualified
domestic relations order.
20.2 RESPONSIBILITY FOR QUALIFICATION OF PLAN. The Company is solely
responsible for the qualification of the Plan under the Code. Should
the Plan fail to initially attain qualified plan status, the Plan shall
terminate and contributions shall
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be returned to the Company and to Participants in accordance with
Subparagraph 4.11(b). If an initially qualified plan fails to retain
qualified plan status, the Plan shall terminate and the interest of
each Participant shall be distributed in the same manner as provided
under Paragraph 18.6.
20.3 ORIGINAL DOCUMENT. The Plan may be executed in any number of
counterparts, each of which shall be deemed an original, and said
counterparts shall constitute but one and the same instrument and may
be sufficiently evidenced by any one counterpart.
20.4 STATE LAW. The Plan is to be regulated and construed in accordance with
the laws of the State in which the Company maintains its principal
office, except to the extent such laws are preempted by Federal law.
20.5 NOT AN EMPLOYMENT CONTRACT. No Employee of the Company nor anyone else
shall have any rights against the Company as a result of this Plan,
except those expressly granted hereunder. Nothing herein shall be
construed to give any Participant the right to remain in the employ of
the Company.
20.6 WORD USAGE. Words when used herein are used irrespective of number or
gender unless the context clearly requires otherwise.
20.7 INTERPRETATION OF PLAN. The intention of the Company is that the Plan
shall comply with the provisions of the Code, the Employee Retirement
Income Security Act, the Tax Equity and Fiscal Responsibility Act, and
the corresponding provisions of any subsequent laws, and the provisions
of the Plan shall be construed to effectuate such intention.
In the event any provision or provisions shall be determined to be
illegal or invalid for any reason, the illegal or invalid provision
shall not affect the remaining parts of the Plan and the Company,
Administrator, or Trustee may perform such alternative acts which most
clearly carry out the intent and purpose of the Plan.
20.8 HEADINGS. The headings of the Parts, Paragraphs and Sections of this
Plan are for convenience and reference only, and any conflict between
such headings and the text shall be resolved in favor of the text.
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PART XXI
Transitional Rule - Retirement Distributions
Subject to Part XIV and XV, distributions on behalf of any Participant,
including a 5-percent owner, may be made in accordance with all of the following
requirements (regardless of when such distribution commences):
(1) The distribution by the Plan is one which would not have disqualified
such Plan under Code Section 401(a)(9) as in effect prior to amendment
by DEFRA.
(2) The distribution is in accordance with a method of distribution
designated by the Participant whose interest in the Plan is being
distributed or, if the Participant is deceased, by a Beneficiary of
such Participant.
(3) Such designation was in writing, was signed by the Participant or the
Beneficiary, and was made before January 1, 1984.
(4) The Participant had accrued a benefit under the Plan as of December 31,
1983.
(5) The method of distribution designated by the Participant or the
Beneficiary specifies the time at which distribution shall commence,
the period over which distributions shall be made, and in the case of
any distribution upon the Participant's death, the Beneficiaries of the
Participant listed in order of priority.
A distribution upon death shall not be covered by this transitional rule unless
the information in the designation contains the required information described
above with respect to the distributions to be made upon the death of the
Participant.
For any distribution which commences before January 1, 1984, but continues after
December 31, 1983, the Participant, or the Beneficiary, to whom such
distribution is being made, shall be presumed to have designated the method of
distribution under which the distribution is being made if the method of
distribution was specified in writing and the distribution satisfies the
requirement in Subparagraph (5) above.
If a designation is revoked any subsequent distribution must satisfy the
requirements of Code Section 401(a)(9) and the Regulations thereunder. If a
designation is evoked subsequent to the date distributions are required to
begin, the Plan must distribute by the end of the calendar year following the
calendar year in which the revocation occurs the total amount not yet
distributed which would have been required to have been distributed to satisfy
Code Section 401(a)(9) and the Regulations thereunder, but for the Section
242(b)(2) election. For calendar years beginning after December 31, 1988, such
distributions must meet the minimum distribution incidental benefit requirements
in Section 1.401(a)-2 of the Income Tax Regulations. Any changes in the
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designation shall be considered to be a revocation of the designation. However,
the mere substitution or addition of another Beneficiary (one not named in the
designation) under the designation shall not be considered to be a revocation of
the designation, so long as such substitution or addition does not alter the
period over which distributions are to be made under the designation, directly
or indirectly (for example, by altering the relevant measuring life). In the
case in which an amount is transferred or rolled over from one plan to another
plan, the rules in Q&A J-2 and Q&A J-3 shall apply.
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<PAGE> 80
PART XXII
Transitional Rules - Survivor Annuities
B1. Any living Participant not receiving benefits on August 23, 1984, who
would otherwise not receive the benefits prescribed by Paragraphs 14.3
and 15.2 of the Plan must be given the opportunity to elect to have
such Paragraphs apply if the Participant is credited with at least one
Hour Of Service under this Plan or a predecessor Plan in a Plan Year
beginning on or after January 1, 1976, and such Participant had at
least 10 years of vesting service when he separated from Service.
B2. Any living Participant not receiving benefits on August 23, 1984, who
was credited with at least one Hour Of Service under this Plan or a
predecessor Plan on or after September 2, 1974, and who is not
otherwise credited with any Service in a Plan Year beginning on or
after January 1, 1976, must be given the opportunity to have his
benefits paid in accordance with Paragraph B4.
B3. The respective opportunities to elect (as described in Paragraphs B1
and B2 above) must be afforded to the appropriate Participants during
the period commencing on August 23, 1984, and ending on the date
benefits would otherwise commence to said Participants.
B4. Any Participant who has elected pursuant to Paragraph B2 and any
Participant who does not elect under Paragraph B1 or who meets the
requirements except that such Participant does not have at least 10
years of vesting Service when he separates from Service, shall have his
benefits distributed in accordance with all of the following
requirements if benefits would have been payable in the form of a life
annuity:
(a) Automatic Joint and Survivor Annuity. If benefits in the form
of a life annuity become payable to a married Participant who:
(i) begins to receive payments under the Plan on
or after Normal Retirement Date;
(ii) dies on or after Normal Retirement Date
while still working for the Company;
(iii) begins to receive payments on or after the
Qualified Early Retirement Date; or
(iv) separates from service on or after attaining
Normal Retirement Date (or the Qualified
Early Retirement Date) and after satisfying
the eligibility requirements for the payment
of benefits under the
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<PAGE> 81
Plan and thereafter dies before beginning to
receive such benefits; then such benefits
shall be received under this Plan in the
form of an Automatic Joint and Survivor
Annuity, unless the Participant has elected
otherwise during the Election Period. The
Election Period must begin at least 6 months
before the Participant attains Qualified
Early Retirement Date and end not more than
90 days before the commencement of benefits.
Any election hereunder shall be in writing
and may be changed by the Participant at any
time.
(b) Election of Early Survivor Annuity. A Participant who is
employed after attaining the Qualified Early Retirement Date
shall be given the opportunity to elect, during the Election
Period, to have a survivor annuity payable on death. If the
Participant elects the survivor annuity, payments under such
annuity must not be less than the payments which would have
been made to the Spouse under the Automatic Joint and Survivor
Annuity if the Participant had retired on the day before his
death. Any election under this provision shall be in writing
and may be changed by the Participant at any time. The
election period begins on the later of (1) the 90th day before
the Participant attains the Qualified Early Retirement Date,
or (2) the date on which participation begins, and ends on the
date the Participant terminates employment.
(c) For purposes of this Paragraph B4, Qualified Early Retirement
Date is the latest of:
(i) the earliest date, under the Plan, on which the
Participant may elect to receive retirement benefits,
(ii) the first day of the 120th month beginning before the
Participant reaches Normal Retirement Date, or
(iii) the date the Participant begins participation.
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PROTOTYPE SF 51344-001
--------------------------------------------------------------------------------
FLEXINVEST(R)
--------------------------
PROFIT SHARING/401(k) PLAN
ADOPTION AGREEMENT
FOR NON-STANDARDIZED PLANS
<PAGE> 83
<TABLE>
<CAPTION>
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
<S> <C>
Plan Description: Prototype Non-Standardized Profit Sharing Plan with CODA
FFN: 50338830007-002 Case: 9500848 EIN: 04-1590850 WASHINGTON, DC 20224
BPD: 07 Plan: 002 Letter Serial No: D365756a
MASSACHUSETTS MUTUAL LIFE INSURANCE CO PERSON TO CONTACT: Ms. Arrington
1295 STATE STREET TELEPHONE NUMBER: (202) 622-8173
SPRINGFIELD, MA 01111 REFER REPLY TO: CP:E:EP:T1
DATE: 12/02/96
</TABLE>
Dear Applicant:
In our opinion, the form of the plan identified above is acceptable under
section 401 of the Internal Revenue Code for use by employers for the benefit of
their employees. This opinion relates only to the acceptability of the form of
the plan under the Internal Revenue Code. It is not an opinion of the effect of
other Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this plan.
You are also required to send a copy of the approved form of the plan, any
approved amendments and related documents to each Key District Director of
Internal Revenue Service in whose jurisdiction there are adopting employers.
Our opinion on the acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under Code section
401(a). Therefore, an employer adopting the form of the plan should apply for a
determination letter by filing an application with the Key District Director of
Internal Revenue Service on Form 5307, Short Form Application for Determination
for Employee Benefit Plan.
Because you submitted this plan for approval after March 31, 1991, the
continued, interim and extended reliance provisions of sections 13 and 17.03 of
Rev. Proc. 89-9, 1989-1 C.B. 780, are not applicable.
Because you submitted this plan on or after July 1, 1994, it does not meet the
requirements for the extention of the remedial amendment period provided by Rev.
Proc. 95-12, 1995-3 I.R.B. 24.
This letter may not be relied upon with respect to whether the plan satisfies
the qualification requirements as amended by Uruguay Round Agreements Act, Pub.
L. 103-465.
If you, the sponsoring organization, have any questions concerning the IRS
processing of this case, please call the above telephone number. This number is
only for use of the sponsoring organization. Individual participants and/or
adopting employers with questions concerning the plan should contact the
sponsoring organization. The plan's adoption agreement must include the
sponsoring organization's address and telephone number for inquiries by adopting
employers.
If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial Number
and File folder Number shown in the heading of this letter.
You should keep this letter as a permanent record. Please notify us if you
modify or discontinue sponsorship of this plan.
Sincerely yours,
/s/ ILLEGIBLE
Chief, Employee Plans Technical Branch 1
<PAGE> 84
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
FLEXINVEST(R) PROTOTYPE PROFIT-SHARING/401(k) PLAN
PROFIT-SHARING/401(k) PLAN ADOPTION AGREEMENT
For Non-Standardized Plans
In accordance with and as permitted by the provisions of the Massachusetts
Mutual Life Insurance Company FLEXINVEST(R) Prototype Profit-Sharing/401(k)
Plan, herein called the Plan, a copy of which is hereto attached, the
undersigned Company pursuant to vote of its Board of Directors hereby adopts the
Plan to provide retirement and incidental benefits for its Employees, and agrees
1. to conform to and abide by all of the terms, provisions and
requirements of the Plan;
2. that any action taken or to be taken in accordance with or as
required by the Plan or any action taken in conjunction with
the Plan as required by any law or regulations is and will be
its sole responsibility;
3. that the liability of Massachusetts Mutual Life Insurance
Company is limited to the obligations under the terms of the
Contract and the Policies.
Sponsoring Organization: Massachusetts Mutual Life Insurance Company
Defined Contribution Operations
1295 State Street
Springfield, MA 01111-0001
(413) 788-8411
The Sponsoring Organization will notify the undersigned Company of any
amendments made to the Plan or of the discontinuance or abandonment of
the Plan.
PLEASE NOTE: Failure to properly fill out this Adoption Agreement may
result in disqualification of the Plan.
(C)Copyright 1996 by Massachusetts Mutual Life Insurance Company. All Rights
Reserved. No reproduction of provisions in this document are permitted without
the express written consent of Massachusetts Mutual Life Insurance Company,
Springfield, MA 01111-0001.
<PAGE> 85
The undersigned Company elects as follows:
(A) Plan Name
The Plan will be known as THE SCI 401(k) RETIREMENT SAVINGS PLAN.
Amended (or Restated) Plans: N/A
The Plan is adopted by amendment in substitution for N/A, the Company's
pre-existing Plan, which is hereby replaced.
(B) CONTROLLED GROUPS/AFFILIATED EMPLOYERS (Paragraph 6.5)
Check if applicable:
[ ] The Plan will be funded through the Contract of an affiliated
Employer's Plan, Contract No. ____________________, issued by
the Insurance Company to _____________________.
(C) DATES
(1) The Effective Date of the Plan is JULY 1, 2000 (The original
effective date of the Plan prior to any amendment.)
Amended (or Restated) Plans: The Effective Date of this
Amendment is _____________________.
Notwithstanding any other plan provision, this Effective Date
applies to all current and future Participants including
terminated vested Participants who return to employment with
the Company.
(2) The Plan Year is a period beginning on JULY 1, 2000, and
ending on DECEMBER 31, 2000. Subsequent Plan Years will be
consecutive 12-month periods ending on the same date each year
thereafter.
(3) In the case of a top-heavy plan, the Determination Date will
be the last day of the Plan Year for the first Plan Year, and
for any other Plan Year, the last day of the preceding Plan
Year.
(4) The Valuation Date, for purposes of Part XVI, will be the most
recent Valuation Date occurring within the 12-month period
ending on the Determination Date.
(5) For purposes of determining Highly Compensated Employees
(Paragraph 1.30) and notwithstanding any Plan provision to the
contrary, the lookback provisions of Code Section 414(q) shall
not apply.
The snapshot day of DECEMBER 31ST (month and day) will be used
for purposes of determining Highly Compensated Employees.
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(C) DATES (continued)
(6) Limitation Year will mean:
(a) [X] the calendar year.
(b) [ ] the 12-consecutive month period coinciding with the Plan Year.
(c) [ ] the 12-consecutive month period from _____ to _____.
NOTE: If the Company is a member of a controlled group of corporations, a controlled group of trades or businesses
or an affiliated service group, the Limitation Year must be the same for all members of the group.
(D) ELIGIBILITY FOR PARTICIPATION (Part III)
(1) Classification(s) of eligible employees:
(a) [X] All
[ ] Salaried
[ ] Hourly
[ ] Commissioned
[ ] All non-Highly Compensated Employees
(b) [ ] Division, Plant, Location or Other (specify). _______________________
(c) [X] Employees not covered by a collective bargaining agreement.
(2) Present Employees:
(a) [ ] An Employee who is employed on the Effective Date (or Amendment Date, if later) will become a
Participant on the Effective Date (or Amendment Date, if later).
(b) [X] An Employee who is employed on the Effective Date (or Amendment Date, if later) will become a
Participant upon meeting the requirements in (D)(3).
(3) Future Employees: An Employee who becomes employed after the Effective Date (or the Amendment Date, if
later) will become a Participant upon meeting the following requirements:
(a) Service Requirement
(i) [ ] None
(ii) [X] Completion of 0.25 Years of Service (401(k) Plans: Not to exceed 1, or if (D)(7)(a) is
elected, 1/2. Profit-Sharing Plans: Not to exceed 2, or if (D)(7)(a) is elected, 1 1/2.
If years exceed 1, (R)(1)(a) must be elected.)
</TABLE>
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(D) ELIGIBILITY FOR PARTICIPATION (continued)
NOTE: If a fractional year is elected, an Employee will not be required to complete any specified number of Hours of
Service to receive credit for such fractional year.
(b) Age Requirement
(i) [ ] None
(ii) [X] Attainment of age 21 (not to exceed 21, or if (D)(7)(a) is elected, 20 1/2)
(4) Employees eligible for participation under another plan qualified under Code Sections 401 or 403 to which the
Company contributes will be eligible for participation in this Plan.
[X] Yes [ ] No [ ] Not Applicable. There is no other Plan.
Name of other plan: THE SCI CASH BALANCE PLAN.
(5) If the Company has acquired the trade or business from another Company, including a sole proprietorship or
partnership, service with the predecessor Company (name of predecessor Company: ANY PREDECESSOR ENTITY WHICH
BECOMES PART OF SERVICE CORPORATION INTERNATIONAL) which did not maintain this Plan will be considered Service
with the Company for purposes of determining:
(a) [ ] Initial and continued eligibility to participate in the Plan.
(b) [ ] A Participant's vested interest in his Participant's Account.
(c) [X] No credit for prior service.
(d) [ ] Not Applicable. There was no predecessor Company, or the predecessor Company maintained this
Plan.
(6) Hours of Service will be determined on the basis of the method selected below. Only one method may be selected.
The method selected will be applied to all Employees covered under the Plan.
(a) [X] On the basis of actual hours for which an Employee is paid or entitled to payment.
(b) [ ] On the basis of days worked. An Employee will be credited with ten (10) Hours of Service if
under Paragraph 1.31 of the Plan such Employee would be credited with at least one (1) Hour of
Service during the day.
(c) [ ] On the basis of weeks worked. An Employee will be credited with forty-five (45) Hours of Service
if under Paragraph 1.31 of the Plan such Employee would be credited with at least one (1) Hour
of Service during the week.
</TABLE>
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<PAGE> 88
<TABLE>
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(D) ELIGIBILITY FOR PARTICIPATION (continued)
(d) [ ] On the basis of semi-monthly payroll periods. An Employee will be credited with ninety-five (95)
Hours of Service if under Paragraph 1.31 of the Plan such Employee would be credited with at
least one (1) Hour of Service during the semi-monthly payroll period.
(e) [ ] On the basis of months worked. An Employee will be credited with one hundred ninety (190) Hours
of Service if under Paragraph 1.31 of the Plan such Employee would be credited with at least one
(1) Hour of Service during the month.
(7) The Entry Date will be:
(a) [ ] an Anniversary Date of the Plan.
(b) [ ] semi-annually, i.e., an Anniversary Date or the first day of the sixth month following an
Anniversary Date.
(c) [ ] quarterly, i.e., an Anniversary Date or the first day of the third, sixth, or ninth month
following an Anniversary Date.
(d) [X] the first day of any calendar month.
(E) COMPENSATION (Paragraph 1.14)
(1) Compensation will mean all of each Participant's:
(a) (i) [ ] Compensation required to be reported under Code Sections 6041 and 6051 (Wages, Tips, and
Other Compensation on Form W-2).
(ii) [ ] Wages as defined in Code Section 3401(a).
(iii) [X] 415 safe-harbor compensation.
(iv) [ ] Total compensation as defined in Treas. Reg. Section 1.415-2(d)(1) and (2).
(b) The definition selected above shall exclude the following items (even if includible in gross income):
reimbursements or other expense allowances, fringe benefits (cash and noncash), moving expenses, and
welfare benefits.
[X] yes [ ] no
</TABLE>
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(E) COMPENSATION (continued)
(c) (i) [ ] The definition selected in (a) and (b) above will apply to integrated contributions, the
operation of the ADP and ACP tests and the minimum contribution in a top-heavy plan.
However, for all other Plan purposes, including forfeiture allocation, Compensation will
mean all of each Participant's Regular or Base Salary or Wages including:
[ ] bonuses
[ ] overtime
[ ] commissions
[ ] discretionary bonuses
[ ] none of the above
(ii) [X] Not applicable. The definition selected in (a) will apply for all Plan purposes.
NOTE: If (i) above is elected, the Compensation percentage for the Highly Compensated Employees cannot be
greater than the Compensation percentage for other Employees. The Compensation percentage for a group of
Employees may be calculated by averaging the separately calculated Compensation ratios for each Employee
in the group. An Employee's Compensation ratio is calculated by dividing the Employee's Compensation
under (c) by the Employee's Compensation under (a).
(2) Compensation will:
[X] include
[ ] not include
Company contributions made pursuant to deferred salary agreements which are not includible in the gross income of
the Employees under Code Sections 125, 402(e)(3), 402(h)(l) or 403(b).
(F) RETIREMENT (Part XIV)
(1) The Normal Retirement Date of a Participant will be:
(a) [ ] Age (not to exceed 65).
----
(b) [X] The later of age 65 (not to exceed 65) or the 3.0 (not to exceed 5th) anniversary of the
participation commencement date. The participation commencement date is the first day of the
first plan year in which the Participant commences participation in the Plan.
(c) [ ] Age _____ (not to exceed 65) and ______ (not to exceed 5th) anniversary of the commencement date
of service with the Employer.
NOTE: The Normal Retirement Date, as elected above, may not exceed any mandatory retirement age enforced by the
Company.
</TABLE>
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(F) RETIREMENT (continued)
(2) The Early Retirement Date of a Participant will be:
(a) [X] None.
(b) [ ] The first day of any calendar month after his 60 birthday.
(c) [ ] The first day of any calendar month after his ___ birthday and his completion of:
(i) _____ Years of Service.
(ii) _____ Years of Service following commencement of participation.
(d) [ ] The first day of any calendar month after his completion of:
(i) _____ Years of Service.
(ii) _____ Years of Service following commencement of participation.
(3) The Disability Retirement Date of a Participant will be:
(a) [X] None.
(b) [ ] The first day of any calendar month after his _____ birthday.
(c) [ ] The first day of any calendar month after his _____ birthday and his completion of
______ Years of Service.
(d) [ ] The first day of any calendar month.
(4) Determination of Disability:
(a) [ ] If entitled to disability benefits under the Federal Social Security Act.
(b) [ ] Determined by the Company in accordance with its normal personnel practice applied in
a uniform and nondiscriminatory manner.
(c) [ ] Determined by the Company in accordance with the collective bargaining agreement.
(d) [ ] If entitled to disability benefits under the Company's Long Term Disability Insurance
Plan.
(e) [X] Not Applicable. Disability Retirement is not allowed.
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C>
(F) RETIREMENT (continued)
(5) Benefit Option
Continuation of retired Participant's Account until the first day of April following the calendar year in which
the retired Participant attains age 70 1/2 is:
[X] Permitted.
[ ] Not Permitted.
If permitted under (M)(1), the retired Participant's account balance will be invested in accordance with the
Participant's direction as permitted under the Plan.
(G) ELECTIVE DEFERRALS (Paragraph 1.20)
For each Plan Year the Company will make available the following amounts to the Plan:
(1) [X] Deferred Salary - An amount not to exceed 15% of a Participant's Compensation pursuant to a Deferred
Salary Agreement.
(a) A Participant may elect to commence Elective Deferrals as of his Entry Date or any other date
thereafter elected below:
[ ] the first day of the Plan Year.
[X] the first day of any month.
[ ] .
-------------
Such election will become effective as soon as administratively feasible thereafter.
(b) A Participant's election to have Elective Deferrals made pursuant to a Deferred Salary Agreement
will remain in effect until modified or terminated. A Participant may modify the amount of
Elective Deferrals as of:
[ ] the first day of the Plan Year.
[ ] the first day of any month.
[X] DAILY.
Such election will become effective as soon as administratively feasible thereafter.
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C>
(G) ELECTIVE DEFERRALS (continued)
(2) [ ] Deferred Bonus - An amount under this Plan of:
--------------
[ ] _____% of Compensation of each Participant.
[ ] A uniform percentage of the Compensation of each Participant, which the Company, in its
sole discretion, determines.
[ ] A percentage of Compensation of a Participant, which the Company, in its sole discretion,
determines.
A Participant will be afforded a reasonable period to elect to defer all, part or none of the amount
described above. Such election will become effective as soon as administratively feasible thereafter.
(3) [ ] Elective Deferrals will not be contributed to the Plan. The Plan is a profit-sharing plan only, without
a 401(k) feature.
(H) COMPANY QUALIFIED NONELECTIVE CONTRIBUTIONS (Paragraph 1.13)
(1) The Company [X] will [ ] will not make Qualified Nonelective Contributions to the Plan. If the
Company does make such contributions to the Plan, then the amount of such contributions for each Plan
Year will be: SEE ADDENDUM A.
(a) [ ] _____% (not to exceed 15 percent) of the Compensation of all Participants eligible to
share in the allocation.
(b) [ ] _____% of the net profits, but in no event more than $_______ for any Plan Year.
(c) [X] An amount determined by the Company.
(2) (a) Allocation of Company Qualified Nonelective Contributions will be made to the accounts of:
[ ] All Participants.
[X] All non-Highly Compensated Participants.
(b) Allocation of Company Qualified Nonelective Contributions will be made:
[X] In the ratio in which each Participant's Compensation for the Plan Year bears to the
total Compensation of all Participants for such Plan Year.
[ ] In the ratio in which each Participant's Compensation not in excess of $_______ for the
Plan Year bears to the total Compensation of all Participants not in excess of $_______ for such
Plan Year.
[ ] Not Applicable. No Company Qualified Nonelective Contributions will be made.
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C>
(I) COMPANY MATCHING AND COMPANY QUALIFIED MATCHING CONTRIBUTIONS (Paragraphs 1.10 and 1.12)
(1) The Company will:
(a) [X] Make Company Matching Contributions to the Plan. SEE ADDENDUM A.
(b) [ ] Make Company Qualified Matching Contributions to the Plan.
(c) [ ] Not make any Company Matching or Qualified Matching Contributions to the Plan.
(2) The Formula for determining the Company Matching or Qualified Matching Contribution will be:
(a) [ ] FIXED PERCENTAGE - An amount equal to the percentages of the Elective Deferrals
and Participant Matched Contributions designated below, the total contribution not
to exceed the lesser of $_______ or ______% of Compensation.
</TABLE>
<TABLE>
<CAPTION>
ELECTIVE DEFERRALS AND
PARTICIPANT MATCHED CONTRIBUTION PERCENTAGE MATCH
-------------------------------- ----------------
<S> <C>
up to 1% of Compensation _____%
over 1% up to 2% of Compensation _____%
over 2% up to 3% of Compensation _____%
over 3% up to 4% of Compensation _____%
over 4% up to 5% of Compensation _____%
over 5% up to 6% of Compensation _____%
over 6% up to 7% of Compensation _____%
over 7% up to 8% of Compensation _____%
over 8% up to 9% of Compensation _____%
over 9% up to 10% of Compensation _____%
over 10% of Compensation _____%
</TABLE>
(b) [X] DISCRETIONARY PERCENTAGE MATCH - An
amount between the minimum and maximum
percentages designated below of the Elective
Deferrals and Participant Matched
Contributions. The actual percentage will be
determined by the Company prior to the
beginning of each Plan Year, the total
contribution not to exceed the lesser of $
N/A or 6.0% of Compensation.
<TABLE>
<CAPTION>
ELECTIVE DEFERRALS AND
PARTICIPANT MATCHED CONTRIBUTION PERCENTAGE MATCH
-------------------------------- ----------------
<S> <C>
up to 1% of Compensation 0 % to 100 %
----------- -------
over 1% up to 2% of Compensation 0 % to 100 %
----------- -------
over 2% up to 3% of Compensation 0 % to 100 %
----------- -------
over 3% up to 4% of Compensation 0 % to 100 %
----------- -------
over 4% up to 5% of Compensation 0 % to 100 %
----------- -------
over 5% up to 6% of Compensation 0 % to 100 %
----------- -------
over 6% up to 7% of Compensation % to %
----------- -------
over 7% up to 8% of Compensation % to %
----------- -------
over 8% up to 9% of Compensation % to %
----------- -------
over 9% up to 10% of Compensation % to %
----------- -------
over 10% of Compensation % to %
----------- -------
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C>
(I) COMPANY MATCHING AND COMPANY QUALIFIED MATCHING CONTRIBUTIONS (continued)
(c) [ ] GRADUATED MATCH - An amount equal to a specified percentage of the Elective Deferrals and
Participant Matched Contributions, the total contribution not to exceed the lesser of $______ or
______% of Compensation. The specified percentage will vary with the Years of Service credited
to the Participant as follows:
</TABLE>
<TABLE>
<CAPTION>
YEAR OF SERVICE PERCENTAGE MATCH
--------------- ----------------
<S> <C>
1 _____%
2 _____%
3 _____%
4 _____%
5 _____%
6 _____%
7 _____%
8 _____%
9 _____%
10 or more _____%
</TABLE>
NOTE: If a Graduated Match is elected, this
contribution must satisfy all applicable
nondiscrimination requirements.
<TABLE>
<S> <C> <C> <C> <C>
(J) PARTICIPANT CONTRIBUTIONS (Paragraphs 1.38 and 1.39)
(1) Participant Matched Contributions:
(a) [ ] Will be accepted by the Plan if the Participant elects to make such a contribution, of no more
than ______% of the Participant's Compensation.
(b) [X] None
(c) [ ] Will be required as a:
[ ] condition of employment
[ ] condition of participation
The amount that a Participant must contribute is:
(i) [ ] an amount equal to _____% of the Participant's Compensation.
(ii) [ ] _____ cents per hour worked by the Participant.
(iii) [ ] a flat dollar amount of $_________ per Plan Year, due ratably each pay period.
</TABLE>
These contributions [ ] may [ ] may not be suspended by the
Participant. No Company Matched Contribution will be allocated
on behalf of a Participant during a time period in which he
suspends his contribution.
-11-
<PAGE> 95
<TABLE>
<S> <C> <C> <C> <C> <C>
(J) PARTICIPANT CONTRIBUTIONS (continued)
(2) Participant Nondeductible Voluntary Contributions:
(a) [X] Not Permitted
(b) [ ] Plan has frozen Participant Nondeductible Voluntary Contributions. Ongoing
Participant Nondeductible Voluntary Contributions not permitted.
(c) [ ] Plan permits an amount equal to a percentage of the Participant's Compensation
elected by him which is not more than _____% (not to exceed 10 percent).
(K) COMPANY PROFIT-SHARING CONTRIBUTIONS (Paragraph 1.11)
(1) (a) The Company:
(i) [X] May make Company Profit-Sharing Contributions for any Plan Year at its
discretion.
(ii) [ ] Will not make any Company Profit-Sharing Contributions to the Plan.
(b) Company Profit-Sharing Contributions for any Plan Year will be allocated to the Accounts of all
Participants except:
(i) [X] Those Participants who have not been credited with 1000 or more Hours of
Service during the Plan Year.
(ii) [X] Those Participants whose employment with the Company terminated prior
to the end of the Plan Year will not share in contributions allocated
after the date of Termination of Employment.
(iii) [ ] No exceptions.
NOTE 1: If (i) or (ii) above are elected, contributions cannot be made more frequently
than annually.
NOTE 2: A zero dollar allocation to a Participant under (1)(b)(ii) may result in prohibited
discrimination in favor of Highly Compensated Employees and thereby disqualify the Plan. See
Rev. Rul. 76-250.
(c) Notwithstanding (K)(1)(b)(i) or (ii), if a Participant terminates employment due to death,
disability or retirement, Company Profit-Sharing Contributions [X] will [ ] will not be
allocated to the Participant in that Plan Year.
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C>
(K) COMPANY PROFIT-SHARING CONTRIBUTIONS (continued)
(2) For Non-Integrated Plans: Company Profit Sharing Contributions, for the Plan Year, will be allocated to each
Participant's Account as follows:
(a) [ ] ______% of Compensation for each Participant.
(b) [X] The ratio which a Participant's Compensation bears to the total Compensation of all Participants
(calculated to the nearest dollar).
(c) [ ] The ratio which the units allocated to a Participant bear to the total units allocated to all
Participants, with one unit allocated for each $100 of Compensation and [ ] no units [ ] one
unit [ ] two units for each completed Year of Service.
NOTE: If this method is elected, this contribution must satisfy all applicable
nondiscrimination requirements.
(d) [ ] Not Applicable. The Plan is integrated.
(3) For Integrated Plans: Company Profit Sharing Contributions, for the Plan Year, will be allocated to each
Participant's Account as follows:
(a) (i) [ ] Based on the provisions of Paragraph 4.7, with the initial contribution amount
determined by the Company prior to the end of the Plan Year.
(ii) [ ] Based on the provisions of Paragraph 4.7, except that the limit of Compensation in the
first step will be _______% (an amount not in excess of the profit-sharing permitted
disparity rate).
NOTE: If this integrated contribution is to be used as the top-heavy minimum
contribution, the percentage selected cannot be lower than 3%.
(iii) [X] Not Applicable. The Plan is non-integrated.
(b) The integration level is equal to:
(i) [ ] The Taxable Wage Base in effect on the first day of the Plan Year. It is the maximum
amount of earnings which may be considered wages for such year under Code Section
3121(a)(1).
(ii) [ ] $_____________ (a dollar amount less than the Taxable Wage Base).
(iii) [ ] ______% of the Taxable Wage Base (not to exceed 100%).
(iv) [X] Not Applicable. Plan is non-integrated.
</TABLE>
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<PAGE> 97
<TABLE>
<S> <C> <C> <C>
(L) FORFEITURES (Paragraph 13.2)
(1) All forfeitures will be:
(a) [X] Applied first to reduce expenses related to the administration of the Plan and then to reduce
Company contributions to the Plan. (Elect this if any plan expenses will be billed to the
Company.)
(b) [ ] Applied to reduce Company contributions to the Plan. (Elect this if plan expenses
will be deducted from Participant accounts.)
(c) [ ] Reallocated among Participants in the ratio that the Compensation of each Participant
bears to the total Compensation of all Participants.
(d) [ ] Not Applicable. The Plan has 100% immediate vesting.
NOTE: Amounts forfeited by Highly Compensated Employees as a result of Excess Aggregate Contributions
will only be applied under (a) or (b).
(2) If forfeitures will be reallocated in (1)(c) above for any Plan Year, the allocation will be made to
Accounts of all Participants except:
(a) [ ] Those Participants who have not been credited with 1000 or more Hours of Service
during the Plan Year.
(b) [ ] Those Participants whose employment with the Company terminated prior to the end of the Plan
Year will not share in forfeitures allocated after the date of Termination of Employment.
(c) [ ] No exceptions.
(3) Notwithstanding (L)(2)(a) or (b), if a Participant terminates employment due to death, disability or retirement,
forfeitures [ ] will [ ] will not be allocated to the Participant in that Plan Year.
(4) If more than one Company adopts the Plan, and forfeitures will be reallocated in (1)(c) above for any
Plan Year:
(a) [ ] The allocation will be made to the Accounts of the remaining Participants of the
Company in which the forfeiting Participant was employed.
(b) [ ] The allocation will be made to all Participant Accounts of companies who are members
of an affiliated or controlled group.
(c) [X] Not applicable. This Plan has been adopted by a single employer.
</TABLE>
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<PAGE> 98
<TABLE>
<S> <C> <C> <C>
(M) INVESTMENT ALLOCATION AND PROFIT REQUIREMENT (Paragraphs 4.10, 4.12 and 6.4)
(1) Investment allocation instructions will be made by the:
(a) [ ] Administrator
(b) [X] Participant
(c) [ ] Administrator for Company contributions, and Participant for Participant contributions
and Elective Deferrals
Note: Investment rights granted to Participants under Paragraph 6.4 may be suspended by the Company by providing prior
written notice to such affected Participants and the Insurance Company. Upon such notice, the Company or trustees, if
applicable, shall control the investment of plan assets within the Participants' Accounts in accordance with their
fiduciary obligations until such time as subsequent written notice is provided to the Participants and the Insurance
Company specifying that Participants shall designate in writing the investment funds in which contributions are to be
invested.
(2) Rollover contributions will be invested:
(a) [X] The same as all other contributions in the Plan.
(b) [ ] The same as Participant Contributions and Elective Deferrals.
(c) [ ] The same as Company Matching and Company Profit-Sharing Contributions.
(d) [ ] By a separate election of the Participant.
(e) [ ] Not applicable. Plan does not accept rollover contributions.
(3) The Company will make contributions to the Plan based on current or accumulated earnings and profits for the
taxable year or years ending with or within the Plan Year.
[ ] Yes [X] No
Contributions will be made from:
[ ] current profits only.
[X] current and accumulated profits.
(N) POLICIES [ ] will [X] will not be purchased under the Plan. If Policies will be purchased at the request
of a Participant, the premium for the Policies will be paid with: (Paragraph 7.1)
(1) [ ] Elective Deferrals
(2) [ ] Company Matching Contributions
(3) [ ] Company Profit-Sharing Contributions
</TABLE>
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<PAGE> 99
<TABLE>
<S> <C> <C> <C> <C> <C>
(O) IN-SERVICE WITHDRAWALS (Part X)
(1) Participant Contributions - The Participant may withdraw:
(a) [ ] His separate account attributable to Participant Nondeductible Voluntary Contributions.
(b) [ ] His separate account attributable to Participant Matched Contributions.
(c) [ ] No withdrawals permitted.
(d) [X] Not Applicable. No Participant contributions are permitted in Plan.
(2) Rollover Contributions - The Participant may withdraw his separate account attributable to Rollover Contributions.
[X] Yes [ ] No [ ] Not Applicable
If "Yes," withdrawal restrictions will be as follows:
(a) [ ] Same restrictions as Company contributions in (O)(3)(a).
(b) [X] Same restrictions as Elective Deferrals in (O)(3)(b) and (c).
(c) [ ] No restrictions.
(3) Company Contributions - If withdrawal of all Participant contributions and the earnings attributable to them is
permitted in (O)(1), or if no Participant contributions are allowed in the Plan, the Participant may withdraw:
(a) [X] The vested portion of the Participant's Account attributable to Company Matching Contributions
and Company Profit-Sharing Contributions (only in a non-integrated plan). Participants may only
withdraw this portion if:
(i) [ ] The Participant has 5 or more years of Plan participation.
[ ] The Company contributions and their earnings have been in the Plan for at least two
years.
[ ] Amended/Restated Plans: The Participant has 5 or more years of Plan participation.
However, if the Participant was employed on the Amendment Date, the Participant may
withdraw the Company Contributions and their earnings that have accrued up until the
Amendment Date after they have been in the Participant's Account for at least two years.
NOTE: Only one or no election may be made in (i).
(ii) [X] The withdrawal is based on financial hardship as defined by Paragraph 10.3
notwithstanding any of the restrictions elected above.
</TABLE>
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<PAGE> 100
<TABLE>
<S> <C> <C> <C> <C>
(O) IN-SERVICE WITHDRAWALS (continued)
(iii) [X] The withdrawal is based on the Participant attaining age 59 1/2 notwithstanding
any of the restrictions elected above.
(iv) [ ] The election under (i) [ ] will [ ] will not apply to (ii) and (iii) above.
(b) [X] Any amount not in excess of the sum of the Participant's Elective Deferrals:
[X] excluding
[ ] including
pre-1989 earnings based on financial hardship as defined in Paragraph 10.3.
(c) [X] The portion of the Participant's Account attributable to:
[X] Elective Deferrals
[X] Company Qualified Matching Contributions
[X] Company Qualified Nonelective Contributions
based on the Participant's attainment of age 59 1/2.
(d) [ ] Company Contributions cannot be withdrawn.
NOTE: If (a), (b), or (c) is elected, (d) should not be elected.
(4) Suspension - If Company contributions may be withdrawn in (O)(3)(a), will the Participant, upon withdrawal,
forfeit the right to future Company Matching Contributions or Company Profit-Sharing Contributions (in a
non-integrated plan) for 12-consecutive months beginning from the date of withdrawal?
[X] Yes [ ] No [ ] Not Applicable
NOTE: Notwithstanding the elections made in this Section, a Participant who has attained age 70 1/2 may withdraw
all or a portion of his vested account balance.
(P) LOANS (Part XI)
(1) Loans [X] will [ ] will not be permitted to Participants. A Participant may have up to 2 (not to exceed 5)
loan(s) outstanding at any one time.
(2) The Repayment Period for loans to purchase a principal residence [X] can [ ] cannot exceed 5 years.
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C> <C> <C>
(Q) SPECIAL TOP-HEAVY ELECTIONS (Paragraph 16.2)
(1) If Employees Participate in Multiple Plans of the Company: If the Company maintains one or more plans in addition
to this Plan and if one or more Employees participate in this Plan and in another plan, the minimum top-heavy
contribution or benefit will be determined as follows:
(a) [ ] a Minimum Contribution will be made to this Plan of:
(i) [ ] 3% of Compensation (for Participants in defined contribution plans only).
(ii) [ ] 5% of Compensation (for Participants in this Plan and in an active or defined
benefit plan or a defined benefit plan that has terminated within five years of
the Determination Date).
(b) [X] the Minimum Contribution or benefit will be satisfied by the Plan named hereafter: THE SCI CASH
BALANCE PLAN.
(c) [ ] Not Applicable. Company has only this Plan and has not maintained a defined benefit plan within
five years of the Determination Date.
(2) Maximum Defined Contribution and Defined Benefit Fractions: If the Plan becomes top-heavy, the dollar limitation
factor in the denominators of the Defined Benefit Fraction and Defined Contribution Fraction is computed by
substituting a factor of 1.0 for 1.25. The dollar limitation factor can be restored under this Plan to 1.25 by
electing one of the following options. This election will be effective in any year in which the top-heavy ratio is
more than 60 percent but not more than 90 percent. (Paragraphs 5.8(a) and 5.8(c))
(a) [ ] the Minimum Contribution under this Plan will be 4 percent of Compensation (if additional
benefits are provided under this Plan and the defined benefit plan of the Company).
(b) [ ] the Minimum Contribution under this Plan will be: 7 1/2 percent of Compensation for Participants
entitled to minimum benefits under both this Plan and the Company's defined benefit plan, and
4 percent of Compensation for Participants who are not entitled to minimum benefits under the
defined benefit plan.
(c) [X] Other (specify) 1.0 Factor.
-----------
(d) [ ] Not Applicable. Company does not have an active or terminated defined benefit plan.
(3) The Company may set forth in the space provided below any provisions to override Plan provisions in order to
comply with the rules regarding required aggregation of multiple plans under Code Sections 415 and 416.
</TABLE>
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<PAGE> 102
<TABLE>
<S> <C> <C> <C> <C>
(R) VESTING (Part IX)
Prior to retirement or Plan termination, the value of a Participant's Account attributable to Company Matching and Company
Profit-Sharing Contributions is as follows: (Select one option each under (1) and (2) below.) (Paragraphs 9.2 and 16.4)
(1) Regular Vesting Schedule.
(a) [ ] 100%
(b) [X] 100% upon completion of 3 Years of Service (not more than 5).
-
(c) [ ] ______% after 1 Year of Service
______% after 2 Years of Service
______% after 3 Years of Service
______% after 4 Years of Service
______% after 5 Years of Service
(no less than 100%)
(d) [ ] _____% after 1 Year of Service
_____% after 2 Years of Service
_____% after 3 Years of Service
(no less than 20%)
_____% after 4 Years of Service
(no less than 40%)
_____% after 5 Years of Service
(no less than 60%)
_____% after 6 Years of Service
(no less than 80%)
_____% after 7 or more Years of Service
(no less than 100%)
(e) [ ] Not applicable. No Company contributions will be made to this Plan.
(2) Top-Heavy Vesting Schedule.
During and subsequent to the first Plan Year for which the Plan is a Top-Heavy Plan, the following vesting
schedule will apply notwithstanding the vesting schedule elected in Section (R)(1). (Paragraph 16.4)
(a) [ ] 100%
(b) [ ] _____% after 1 Year of Service
_____% after 2 Years of Service
_____% after 3 Years of Service
(no less than 100%)
</TABLE>
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<PAGE> 103
<TABLE>
<S> <C> <C> <C> <C>
(R) VESTING (continued)
(c) [ ] _____% after 1 Year of Service
_____% after 2 Years of Service
(no less than 20%)
_____% after 3 Years of Service
(no less than 40%)
_____% after 4 Years of Service
(no less than 60%)
_____% after 5 Years of Service
(no less than 80%)
_____% after 6 or more Years of Service
(no less than 100%)
(d) [X] Not Applicable. Plan's schedule elected in (R)(1) has the same or more rapid vesting than the
above schedules.
(3) For purposes of this Section, "Years of Service" will not include: (Paragraph 9.3)
(a) [X] Years of Service before age 18.
(b) [ ] Years of Service during a period for which the Employee made no Participant Matched
Contributions, if required by Section (J)(1)(c).
(c) [ ] Years of Service before the Company maintained this Plan or a predecessor plan.
(S) Participant's Account Upon TERMINATION OF EMPLOYMENT (Paragraph 12.3)
(1) Benefit Options:
OPTION A -
(a) Continuation of Account. If permitted under (M)(1), the Participant's vested interest will be
invested in accordance with the Participant's direction as permitted under the Plan.
(b) Continuation of terminated Participant's Account until the first day of April following the
calendar year in which the terminated Participant attains age 70 1/2 is:
[ ] Permitted
[X] Not Permitted
OPTION B - Deferred Annuity. N/A
OPTION C - One-Sum Cash Distribution is:
(a) [X] Permitted immediately upon Termination of Employment of a Participant.
(b) [ ] Permitted 12 months following the date on which the Participant terminates employment.
</TABLE>
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<PAGE> 104
<TABLE>
<S> <C> <C> <C> <C>
(S) Participant's Account Upon TERMINATION OF EMPLOYMENT (continued)
(c) [ ] Permitted only for distribution of Participant Nondeductible Voluntary Contributions and
Elective Deferrals, if any.
OPTION D - Immediate installment payments are:
[ ] Permitted
[X] Not Permitted
OPTION E - Direct Rollover.
NOTE: If the vested Participant's Account is $3,500 or less, the entire vested Participant's Account will be
distributed with or without the Participant's consent.
(2) Forfeiture Restoration (Paragraph 12.5):
A reinstated Participant must repay the full amount distributed to him attributable to Company contributions at
Termination of Employment prior to restoration of any forfeited nonvested Account balance.
[X] Yes [ ] No [ ] Not Applicable. Plan provides immediate 100% vesting.
(T) LIMITATION ON ALLOCATING CONTRIBUTIONS (Paragraphs 5.5 and 5.6)
This Section will apply if the Company maintains or ever maintained another qualified plan in which any Participant in this
Plan is (or was) a Participant or could become a Participant. It also applies if the Company maintains a welfare benefit
fund, as defined in Code Section 419(e) or an individual medical account, as defined in Code Section 415(l)(2), under which
amounts are treated as Annual Additions with respect to any Participant in this Plan.
(l) If the Participant is covered under another qualified defined contribution plan maintained by the Company, other
than a master or Prototype plan:
(a) [ ] Annual Additions under this Plan will be reduced until the plans satisfy the Maximum Permissible
Amount limit.
(b) [ ] The Annual Additions under the other plan(s) will be reduced until the plans satisfy the Maximum
Permissible Amount limit.
(Name of Plan)
(c) [ ] The provisions of Paragraph 5.5 will apply as if the other plan were a master or Prototype plan.
(d) [ ] Other method of limiting Annual Additions (describe below).
-----------------------------------------------------------------
-----------------------------------------------------------------
</TABLE>
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<PAGE> 105
<TABLE>
<S> <C> <C> <C> <C>
(T) LIMITATION ON ALLOCATING CONTRIBUTIONS (continued)
(e) [X] Not Applicable. Company has only this Plan.
(2) If the Participant is or has ever been a Participant in a defined benefit plan maintained by the Company:
(a) [ ] The Annual Additions will be limited to this and/or other qualified defined contribution plans
for the Limitation Year so that the sum of the Defined Contribution Fraction and the Defined
Benefit Fraction does not exceed 1.0. (State which plan will be limited and describe below if
limitation is not under this Plan.)
-------------------------------------------------------------
-------------------------------------------------------------
(b) [ ] The Projected Annual Benefit will be reduced in one or more of the qualified defined benefit
plans so that the sum of the Defined Contribution Fraction and the Defined Benefit Fraction does
not exceed 1.0 as described below.
-------------------------------------------------------------
-------------------------------------------------------------
(c) [ ] The Annual Additions will be limited and the Projected Annual Benefit will be reduced as
described below.
-------------------------------------------------------------
-------------------------------------------------------------
(d) [X] Not Applicable. Company does not maintain a defined benefit plan. COMPANY MAINTAINS A CASH
BALANCE PLAN.
(U) PRESENT VALUE OF ACCRUED BENEFITS (Paragraph 16.5)
If the Company has maintained one or more qualified defined benefit plans for purposes of establishing present value to
compute the top-heavy ratio, any benefit will be discounted only for mortality and interest based on the following:
(l) [ ] Interest Rate ________% Mortality Rate _________%
(2) [X] Not Applicable. The Company never maintained a defined benefit plan. COMPANY MAINTAINS A CASH BALANCE
PLAN.
</TABLE>
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<PAGE> 106
(V) ADOPTION CONTINGENT ON IRS APPROVAL
The opinion letter issued to MassMutual by the National Office of the
Internal Revenue Service evidences the acceptability of the form of the
Prototype Plan under Code Section 401. The adopting Company may not
rely on an opinion letter issued by the National Office of the Internal
Revenue Service as evidence that the Plan is qualified under Code
Section 401. To obtain reliance with respect to plan qualification, the
Company must apply to the appropriate Key District Office of the
Internal Revenue Service for a determination letter.
The adoption of the Plan and contributions thereto are subject to the
condition that the Internal Revenue Service will determine that
initially the Plan, as it relates to the undersigned Company, meets the
requirements of the Internal Revenue Code and Regulations issued
thereunder and, until the Company has received a favorable
determination letter from the Internal Revenue Service, no Participant
will have any vested interest in any equity created by contributions
made by the Company. As soon as reasonably possible, after the
execution of this Adoption Agreement, the Administrator will submit to
the Internal Revenue Service the documents required to obtain a
determination as to the qualified status of this Plan as it relates to
the Company. Up on receipt of a determination letter, the Administrator
will submit evidence thereof to the Insurance Company.
Upon receipt of evidence that the Plan is not so qualified or if
evidence is not received within one year after adoption of the Plan, or
such longer period as may be agreed to by the Insurance Company, the
Contract will be canceled and the Insurance Company will pay to the
Company an amount equal to the value of the total of all the
Participant's Accounts as determined by the Insurance Company in
accordance with the terms of the Contract and Policies.
This Adoption Agreement may be used only in conjunction with basic plan
document #002, IRS Serial No. D365756a.
Has the Company terminated another plan, including a cash or deferred
arrangement within the last 12 months of the Effective Date of the
Plan, making this Plan the successor plan as defined under Code Section
401(k) and the Regulations thereunder?
[ ] Yes [X] No
The Company is [X] incorporated [ ] unincorporated.
Plan Serial Number is 002
---
Company's Fiscal Year is: JANUARY 1ST to DECEMBER 31ST
-23-
<PAGE> 107
The undersigned has consulted its own tax-counsel in completing this document.
Signed this _______________________ day of ____________________/______ at
Houston, Texas, on behalf of the Plan Sponsor, Service Corporation International
and all Employers which are members of a controlled group of corporations (as
defined in Code Section 414(b)), all trades or businesses (whether or not
incorporated) which are under common control (as defined in Code Section
414(c)), all members of an affiliated service group (as defined in Code Section
414(m)) and any other entity required to be aggregated pursuant to Regulations
under Code Section 414(o).
SCI 401(k) RETIREMENT SAVINGS PLAN
BY: SCI MANAGEMENT L. P., PLAN ADMINISTRATOR
BY: SCI ADMINISTRATIVE SERVICES, LLC, ITS GENERAL PARTNER
BY: /S/____________________________________
HELEN DUGAND, PRESIDENT
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<PAGE> 108
ADDENDUM A TO THE
SCI 401(k) RETIREMENT SAVINGS PLAN
FLEXINVEST(R) PROFIT SHARING/401(k) PLAN
----------------------------------------
ADOPTION AGREEMENT FOR NON-STANDARDIZED PLANS
The classification of Employees eligible to participate in the Plan
shall include all Employees of Marsellus Casket Company located at 101 Richmond
Avenue, Syracuse, New York 13221 ("Marsellus") except those Employees of
Marsellus covered by a collective bargaining agreement if such agreement does
not specifically provide for participation in the Plan and provided, however,
that Employees of Marsellus shall not be eligible to participate in any Company
Qualified Nonelective Contributions, Company Matching Contributions, Company
Qualified Matching Contributions, or Company Profit Sharing Contributions.
<PAGE> 109
ADDENDUM B TO THE
FLEXINVEST(R) PROTOTYPE PROFIT-SHARING/401(k) PLAN
PROFIT-SHARING/401(k) PLAN ADOPTION AGREEMENT
For Non-Standardized Plans
The following additional provisions concerning qualifying Employer
securities are included as an addendum to Part VI of the Adoption Agreement to
the SCI 401(k) Retirement Savings Plan (the "Plan") completed by Service
Corporation International (the "Company"). The purpose of this addendum is to
establish written procedures (which are hereby incorporated into and made part
of the Plan) to permit Participants to direct the investment of their accounts
in qualifying employer securities (described below) and to allow the Company
(and any adopting Employer) to make Employer contributions in qualifying
employer securities, subject to the terms and provisions set forth below. All
capitalized terms not defined herein shall have the meanings set forth in the
Plan.
6.4 ESTABLISHMENT OF THE SCI COMMON STOCK FUND.
(a) Establishment of Company Stock Fund. The investment options
available to Participants under the Plan shall include the ability to invest in
"qualifying employer securities," as defined in section 401(d)(5) of the
Employee Retirement Income Security Act of 1974 ("ERISA"). Accordingly, in
addition to any other investment options available under the Plan, Participants
may direct that amounts allocated to their respective Accounts be invested in a
unitized fund that holds cash and shares of the common stock, $1.00 par value,
of the Employer (the "Company Stock Fund"). In addition, the Employer may make
any Company Qualified Nonelective Contributions, Company Matching Contributions
or Company Profit Sharing Contributions in qualifying employer securities
("Company Stock") which shall be held in the Company Stock Fund and allocated to
Participants' Accounts according to the relevant allocation provisions of the
Plan applicable to such contributions.
(b) Management by Applicable Fiduciary. An ancillary trustee or
Investment Manager (appointed in accordance with applicable provisions of the
Plan) who shall qualify as an agent independent of the issuer (as such term is
defined in Rule 10b-18 promulgated under the Securities Exchange Act of 1934
(the "Act")) shall establish and maintain the Company Stock Fund in accordance
with the terms of the Plan and this Addendum. The above-described ancillary
trustee or Investment Manager shall hereinafter be referred to as the
"Applicable Fiduciary". In the event that the Applicable Fiduciary is not
independent of the issuer, any purchase of Company Stock shall be effected in
accordance with provisions of rule 10b-18 of the Act. When the Applicable
Fiduciary (i) receives funds to be invested or determines that assets from those
funds, if applicable, should be sold and the proceeds held for a period of time
pending reinvestment or other purpose, or (ii) has notice that required or
appropriate filings with the Securities and Exchange Commission have not been
timely accepted as filed and funds received have been designated to be invested
in shares of Company Stock, then prior to completion of required or appropriate
filings with the Securities and Exchange Commission, such funds may be held in
cash, or invested in short-term investments such as U.S. Treasury bills,
commercial paper, demand notes, money market funds, any savings accounts, money
market accounts,
<PAGE> 110
certificates of deposit or like investments with the commercial department of
any bank (including any bank serving as the Applicable Fiduciary, as long as
they bear a reasonable rate of interest and the bank is supervised by the United
States or a state) any common, pooled or collective trust funds which any bank,
including any bank serving as the Applicable Fiduciary, or any other corporation
may now have or in the future may adopt for such short-term investments (the
governing document of such common, pooled or collective trust fund(s) being
hereby incorporated herein by reference), and other similar assets which may be
offered by the federal government, or any national or state bank (whether or not
serving as the Applicable Fiduciary hereunder), and as may be determined by the
Applicable Fiduciary, in its discretion, which assets will remain a part of the
fund to which they would otherwise relate.
(c) Participants' Investment Elections. As soon as practical after the
establishment of the Company Stock Fund is completed, including the completion
of all applicable governmental filings, the Administrator will notify
Participants of the availability of such investment fund and will provide them
with information on the procedures established by the Administrator for the
direction of investment of contributions into such fund. The investment
directions of Participants shall be made in accordance with the procedures and
limitations described in procedures maintained under and in connection with the
Plan as generally applicable to Participants' investment directions except to
the extent that the Administrator has prescribed different procedures and/or
limitations that apply with respect to such Company Stock Fund; or except as
otherwise provided herein.
(d) Transfers Among Investment Funds. A Participant's transfer into or
out of the Company Stock Fund of amounts previously invested in any other
investment funds available under the Plan will be governed by the procedures and
limitations described in procedures maintained under and in connection with the
Plan as generally applicable to Participants' investment transfer directions
except to the extent that the Administrator has prescribed different procedures
and/or limitations that apply with respect to such Company Stock Fund or except
as otherwise provided herein. Transfers out of the Company Stock Fund of Company
Qualified Nonelective Contributions, Company Matching Contributions or Company
Profit Sharing Contributions shall also be governed by such procedures and
limitations which may differ from the procedures and limitations applicable to
transfers of Participant's Elective Salary Deferrals, but shall be applied in a
non-discriminatory manner to all Participants.
(e) Participants' Directions. All elections and investment directions
by Participants concerning the investment of their Accounts shall be in such
form as is prescribed by the Administrator. Each Participant shall designate the
percentage of his various Accounts, or any combination of such Accounts (as such
Accounts presently exist and the percentage of future contributions, if any, to
be allocated to such Accounts) to be invested in the Company Stock Fund and any
one or more funds, as such funds may be established from time to time under the
Plan. At such times as shall be prescribed by the Administrator in its
discretion, the percentage elected to be placed in any one fund may be changed
by the Participant, which change will be effective after such period of times as
shall be established by the Administrator. The Administrator shall determine
whether any such change as to investments will change the Participant's Account
as it presently exists or whether it will only be effective as to succeeding
investments of contributions; however, any such change, when made, shall
continue to be
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<PAGE> 111
effective until revoked or changed in a like manner. The rules established and
the discretion exercised by the Administrator hereunder shall apply to all
Participants on a nondiscriminatory basis. As soon as administratively feasible
after receipt of investment directions of a Participant, the Administrator shall
direct the Applicable Fiduciary to implement all such proper directions received
from a Participant. Each Participant and each Beneficiary of a deceased
Participant is hereby designated as a "named fiduciary" (within the meaning of
Sections 402(a)(2) and 403(a)(1) of ERISA with respect to his investment
directions made pursuant to this Subsection.
(f) Beneficiaries of Deceased Participant. All provisions of this
Subsection pertaining to a Participant shall be equally applicable to a
Beneficiary of a deceased Participant whose Account remains in the Plan.
(g) Form and Method of Payment of Funds Invested in the Company Stock
Fund. Notwithstanding any other provision of this Plan and Trust to the
contrary, with respect to any amounts invested in Company Stock, distribution
shall be paid in cash in an amount equal to the value (as of the date or dates
shares of Company Stock credited to the Participant's Account are converted into
cash) of the Participant's vested interest in shares of Stock credited to such
Participant's Account, or in whole shares of Company Stock, or in any
combination thereof as elected by the Participant. Any fractional shares of
Company Stock to which the Participant may be entitled shall be valued and paid
in cash.
(h) Purchases and Sales of Common Stock. Purchases and sales of Company
Stock shall be handled in accordance with the following rules and such
additional procedures, consistent with such rules, that the Administrator may
establish from time to time:
(1) The Plan will acquire shares of Company Stock from the
Company through original issuance of shares, purchase of shares from
the Service Corporation International treasury or through national
securities exchange, or pursuant to other arrangements mutually agreed
upon by the Company and the Applicable Fiduciary. In making purchases
of Company Stock, the Applicable Fiduciary shall exercise its
discretion with respect to the timing of such purchases and the
determination of the prices assigned to shares of Company Stock as the
Trustee deems appropriate.
(2) With respect to any transaction that involves a party in
interest (as defined in Section 3(14) of ERISA), purchases and sales of
shares of Company Stock for which there is a generally recognized
market shall be made by the Applicable Fiduciary either (i) at the
price of such shares prevailing on a national securities exchange which
is registered under section 6 of the Securities Exchange Act of 1934
("National Securities Exchange") or, (ii) if such shares are not traded
on any National Securities Exchange, at a price equal to the mean of
the current bid and asked prices of such shares on any generally
recognized market on the same day of such purchase or sale as quoted by
persons independent of the issuer and of any parties in interest (as
defined in this Subsection), or on the last trading day during which
there were sales of such shares if there are no sales on the same day
of such purchase or sale. In the event that purchases and sales involve
a party in interest (as defined in this Subsection) and are made with
respect to shares of Company Stock for which there is no generally
recognized market,
3
<PAGE> 112
the price shall be in the case of a purchase no more than, and in the
case of a sale no less than, the fair market value of such shares as
determined in good faith by the Applicable Fiduciary pursuant to the
terms of the Plan and in accordance with applicable provisions of ERISA
or other applicable federal law and regulatory guidance issued
thereunder. The Applicable Fiduciary may, in its discretion, defer the
purchase of Company Stock or limit the daily volume of its purchase of
such stock to the extent that such action is deemed by it to be in the
best interests of Participants or as is required by applicable law or
regulatory authority.
(3) The Applicable Fiduciary may, in its discretion, make
separate trades or match the purchase and sale orders scheduled for a
transaction and transact the net purchase or sale, whichever the case
may be. The price per share allocated to each purchase or sale order
shall be the price transacted for the "net" shares on the transaction
date selected by the Applicable Fiduciary. The price transacted for a
"net" transaction shall be the price paid or obtained in the case of a
single transaction, and the weighted average of the prices paid or
obtained, as applicable, in the case of multiple transactions.
(4) Any brokerage commissions, transfer fees and other
expenses actually incurred in any such sale or purchase shall be
equitably allocated and added to the cost or subtracted from the
proceeds of all purchases or sales, as the case may be, effected on a
transaction day, whether pursuant to the netting process described
above, or pursuant to actual separate transactions in accordance with a
Participant's direction. No commissions or other fees shall be payable
with respect to any transaction that is not on the open market and
involves the Plan and a party in interest.
(5) Allocations to Participants' Accounts will be made in full
and fractional shares.
(6) A Participant may direct the Administrator (or its
delegate) to use any available cash or funds held for him under the
Plan and Trust to exercise any options, rights or warrants issued with
respect to Company Stock in his Account. In the absence of such
direction, or if there are no available funds, any such option, right
or warrant having a market value shall be sold for the Participant's
Account.
(i) Dividends. All dividends or other distributions attributable to
shares of Company Stock held in the Company Stock Fund shall be allocated to the
Participant whose Account is credited with such shares.
(j) Distribution of Accrued Benefits. To the extent invested in
Company Stock, a Participant's Account which is payable under the Plan may be
distributed in Company Stock or in cash or partly in Company Stock and partly in
cash. To reduce such Company Stock to cash, the Trustee may sell such Company
Stock to the Employer on the open market on a recognized exchange with which the
Company Stock is registered. The proceeds of such sales of Company Stock shall
be included in such Participant's Account. In making sales of Company Stock for
distribution the Trustee shall exercise its discretion with respect to the
timing of such sales. If Stock is sold to the Employer, the sales price shall be
determined in the manner set forth above
4
<PAGE> 113
for determining the price of Company Stock sold to the Employer. No commissions
or other fees shall be payable with respect to any transaction with the
Employer.
(k) A Participant (other than an Insider subject to the provisions of
6.6 below) may liquidate any or all of the balance in his Company Stock Fund and
transfer the proceeds to any other investment funds available in the Plan and a
Participant may transfer the proceeds of other investment funds into the Company
Stock Fund with the same frequency and according to the same procedure that such
Participant invests in any other investment fund offered by the Plan.
6.5 VOTING AND TENDER OF COMPANY STOCK.
The Applicable Fiduciary's voting, tender, and exercise of rights other
than voting rights with respect to Company Stock shall be governed by the
following provisions:
(a) Each Participant (or Beneficiary of a deceased Participant) is
hereby designated as a "named fiduciary" (within the meaning of Sections
402(a)(2) and 403(a)(1) of ERISA) with respect to (i) the shares of Company
Stock allocated to his Account, and (ii) a pro rata portion of the shares of
Company Stock allocated to the Accounts of Participants who do not direct the
Applicable Fiduciary as to how such shares should be voted, and shall have the
right to direct the Applicable Fiduciary with respect to the vote of the shares
of Company Stock allocated to his Account, on each matter brought before any
meeting of the stockholders of the Employer. Upon timely receipt of such
directions, the Applicable Fiduciary shall vote as directed the number of shares
(including fractional shares (which shall be aggregated into whole shares of the
Company's Common Stock and voted only to the extent of the last whole share)) of
Company Stock allocated to such Participant's Account. The Applicable Fiduciary
shall have no discretion in such matter. The instructions received by the
Applicable Fiduciary from Participants (or Beneficiaries) shall be held by the
Applicable Fiduciary in confidence and shall not be divulged to any person
including the Plan Administrator or any officer or employee of the Employer. The
Applicable Fiduciary shall vote allocated shares of Company Stock for which it
has not received direction in the same proportion as directed shares are voted
and the Applicable Fiduciary shall have no discretion in such matter. In
determining such proportion, the Applicable Fiduciary shall under all
circumstances include in its calculation the votes of Participants (or
Beneficiaries) on all shares allocated to Participants' Accounts, giving effect
to all affirmative directions by Participants (or Beneficiaries), including
directions to vote for or against, to abstain or to withhold the vote, but shall
exclude from its calculation all allocated shares of such stock for which no
direction has been received.
(b) Each Participant (or Beneficiary of a deceased Participant) is
hereby designated as a "named fiduciary" (within the meaning of Sections
402(a)(2) and 403(a)(1) of ERISA) with respect to the (i) shares of Company
Stock allocated to his Account and shall have the right, to the extent of the
number of whole shares of Company Stock allocated to his Account, to direct the
Applicable Fiduciary in writing as to the manner in which to exercise rights
(other than voting rights with respect to such shares) with respect to any
decisions or elections involving warrants, conversion rights, "poison pill"
rights, elections with respect to rights offerings or any other rights similar
to the foregoing. Upon timely receipt of such directions, the Applicable
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<PAGE> 114
Fiduciary shall respond as instructed with respect to such shares of Company
Stock. The instructions received by the Applicable Fiduciary from Participants
(or Beneficiaries) shall be held by the Applicable Fiduciary in confidence and
shall not be divulged to any person, including the Plan Administrator or any
officer or employee of the Employer. If the Applicable Fiduciary shall not
receive timely instruction from a Participant (or Beneficiary) as to the manner
in which to exercise a right other than a voting right, the Applicable Fiduciary
shall not exercise any such right with respect to an allocated share of Company
Stock with respect to which such Participant (or Beneficiary) has the right to
direction, and the Applicable Fiduciary shall have no discretion in such matter.
(c) Subject to the specific requirements applicable to Tender Offers as
set forth below, the Applicable Fiduciary shall notify the Participants (or
Beneficiaries of deceased Participants) of each occasion for the exercise of
voting rights and rights other than voting rights within a reasonable time
before such rights are to be exercised. This notification shall include all the
information (including any proxy solicitation materials) that the Employer
distributes to shareholders regarding the exercise of such rights, as well as a
form requesting confidential directions to the Applicable Fiduciary on how such
shares of Company Stock allocated to such Participant's Account shall be voted
on each such matter. The proxy solicitation materials described in the preceding
sentence shall be the same as those for shareholders of Company Stock generally,
and shall comply with applicable state and federal law and the Employer's
charter and bylaws as generally applicable to shareholders of such stock. The
Applicable Fiduciary shall not make recommendations to Participants (or
Beneficiaries) on whether to vote or how to vote. The instructions received by
the Applicable Fiduciary from Participants (or Beneficiaries) shall be held by
the Applicable Fiduciary in confidence and shall not be divulged to any person,
including the Plan Administrator, or any officer or employee of the Employer;
provided, however, that the Applicable Fiduciary shall advise any officer of the
Employer at any time upon request, of the total number of shares of such Company
Stock that it has been instructed to vote in favor of each matter for which a
vote was solicited, the total number of shares of such stock that it has been
instructed not to vote in favor of each such matter and the total number of
shares in respect of which it has received no instructions.
(d) In the event of a Tender Offer, as defined herein, the
Administrator shall direct the Applicable Fiduciary to take those steps
reasonably necessary to furnish information to, and request instructions from,
each Participant (or Beneficiary) who has shares of Company Stock allocated to
his Account in substantially the same manner as with respect to the shareholders
of such stock generally. In that regard, the Applicable Fiduciary shall:
(1) Inform each Participant (or Beneficiary) as to the
existence of the Tender Offer; provided, however, the Applicable
Fiduciary shall not make any recommendations with respect to such
Tender Offer;
(2) Transmit to each Participant (or Beneficiary) such written
information and other materials relative to the Tender Offer as are
made available by the persons or entities making such Tender Offer to
the shareholders of such stock generally;
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<PAGE> 115
(3) Request written instructions from each Participant (or
Beneficiary) as to whether or not to tender or exchange the shares of
such stock allocated to his Account; and
(4) Use reasonably diligent efforts to effect, on a
nondiscriminatory basis, the tender or exchange of allocated shares of
such stock in accordance with the written instructions received from
the Participants and Beneficiaries.
The number of shares to which a Participant's (or Beneficiary's)
instructions apply will be the total number of shares allocated to his
Account, regardless of whether the shares are vested, as of the close
of business on the day preceding the date on which the Tender Offer
commences. In accordance with the terms and conditions of the Tender
Offer, the Applicable Fiduciary will tender or exchange those shares of
stock that it has been properly instructed to tender or exchange, and
it will not tender or exchange those shares that it has not been
properly instructed to tender or exchange. Instructions to the
Applicable Fiduciary from a Participant (or Beneficiary) to tender or
exchange shares will not be deemed to be a withdrawal or suspension
from the Plan or a forfeiture of any portion of such person's interest
in the Plan. Shares of Company Stock that are not tendered or exchanged
pursuant to valid instructions shall remain invested in such stock.
For purposes of this Subsection C-3(d), the term "Tender Offer" means
collectively (a) a cash tender offer, which includes a tender offer
for, or request or invitation for tenders of, shares of Company Stock
in exchange for cash as made to the Applicable Fiduciary or to the
shareholders of such stock generally, and (b) an exchange offer, which
includes a tender offer for, or request or invitation for tenders of
any shares of Company Stock in exchange for any consideration other
than all cash, as made to the Applicable Fiduciary or to the
shareholders of such stock generally.
6.6 SECTION 16(b) RESTRICTIONS ON INSIDERS:
In accordance with Rule 16b-3 promulgated under Section 16 of the Act
and notwithstanding any other provisions of the Plan or this Addendum to the
contrary, the following rules shall apply, to any officer, director or 10%
shareholder of the Employer (an "Insider").
(a) New Investment in Company Stock Fund. An Insider shall be allowed
to invest in the Company Stock Fund on the same basis as other Participants with
respect to any Elective Deferrals, or Company contributions allocated to his
Account, whether vested or non-vested and with respect to any loan repayments
and without regard to any transfers of previously invested contributions into or
out of the Company Stock Fund.
(b) Transfer from Other Investments Into the Company Stock Fund. An
Insider shall be allowed to sell any other investment option offered by the Plan
and elect to transfer the proceeds of such sale in his Accounts to the Company
Stock Fund provided that such election is made at least six months following the
date of the most recent election to transfer amounts out of
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<PAGE> 116
the Company Stock Fund or take a cash distribution or loan from any plan of the
Employer which holds Company Stock.
(c) Transfer Out of the Company Stock Fund to Another Investment. An
Insider shall be allowed to sell an investment in the Company Stock Fund and
transfer the proceeds of such sale to an investment in any other investment
option offered by the Plan provided that such investment in the Company Stock
Fund is effected pursuant to an election made at least six months following the
date of the most recent election by such Insider to transfer money into the
Company Stock Fund from any other investment.
(d) In-service Withdrawal or Loan From Company Stock Fund. To the
extent that an Insider would otherwise be allowed to take an in-service
withdrawal or loan from the Plan, such in-service cash withdrawal or loan may be
made from the Insider's investment in the Company Stock Fund only if made six
months after the Insider's most recent election to transfer money from another
investment option offered by the Plan to the Company Stock Fund.
(e) Distributions and QDROs. Notwithstanding the above provisions, an
Insider may take an in-service withdrawal in Company Stock (to the extent that
such withdrawal would otherwise be allowed) and may take a distribution in
either cash or Company Stock upon termination of employment with the Employer or
Disability. Any distribution pursuant to a qualified domestic relations order
will not be subject to any restrictions on sale or distribution of Company
Stock.
8
