<PAGE>
As filed with the Securities and
Exchange Commission on March 13, 1997. Registration No. 33-34089
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 2
to
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SHARED MEDICAL SYSTEMS CORPORATION
----------------------------------
(Exact name of registrant as specified in its charter)
Delaware 23-1704148
------------------------ ---------------------------------
(State of Incorporation) (IRS Employer Identification No.)
51 Valley Stream Parkway, Malvern, Pennsylvania 19355
----------------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
SHARED MEDICAL SYSTEMS CORPORATION RETIREMENT SAVINGS PLAN
----------------------------------------------------------
(FORMERLY
---------
SHARED MEDICAL SYSTEMS CORPORATION RETIREMENT AND SAVINGS PLAN)
---------------------------------------------------------------
(Full Title of the Plan)
Terrence W. Kyle
Senior Vice President
Shared Medical Systems Corporation
51 Valley Stream Parkway
Malvern, Pennsylvania 19355
---------------------------------------
(Name and address of agent for service)
(610) 219-6300
-------------------------------------------------------------
(Telephone number, including area code, of agent for service)
<PAGE>
AMENDMENT
This Post-Effective Amendment is being filed for the purpose of adding the
amended and restated text of the plan indicated below as an exhibit to the
Registration Statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 8. Exhibits
The following exhibit is filed as part of this Registration Statement
and shall supersede Exhibit 4 filed with the original Registration Statement, as
amended:
Exhibit 4 SMS Retirement Savings Plan (Effective as of January 1, 1995)
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
--------------
1933, the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Post-Effective Amendment to its registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Malvern, Pennsylvania,
on this 15th day of January, 1997.
SHARED MEDICAL SYSTEMS CORPORATION
By: /s/ R. James Macaleer
-----------------------------
R. James Macaleer,
Chairman of the Board
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment to a registration statement has been signed below by the
following persons in the capacities and on the dates indicated.
Name Title Date
- ---- ----- ----
/s/ Marvin S. Cadwell President and Chief January 17, 1997
- ---------------------------- Executive Officer
Marvin S. Cadwell
(Principal Executive Officer)
/s/ Terrence W. Kyle Senior Vice President January 17, 1997
- ---------------------------- and Chief Financial
Terrence W. Kyle Officer
(Principal Financial Officer)
/s/ Edward J. Grady Controller January 17, 1997
- ----------------------------
Edward J. Grady
(Principal Accounting Officer)
/s/ R. James Macaleer Chairman of the Board, January 17, 1997
- ---------------------------- Director
R. James Macaleer
/s/ Raymond K. Denworth, Jr. Director January 17, 1997
- ----------------------------
Raymond K. Denworth, Jr.
/s/ Frederick W. DeTurk Director January 17, 1997
- ----------------------------
Frederick W. DeTurk
/s/ Jeffrey S. Rubin Director January 17, 1997
- ----------------------------
Jeffrey S. Rubin
/s/ Josh S. Weston Director January 17, 1997
- ----------------------------
Josh S. Weston
/s/ Gail Wilensky Director January 17, 1997
- ----------------------------
Gail Wilensky
<PAGE>
Exhibit Index
Exhibit Number Description of Exhibit
- -------------- ----------------------
4 SMS Retirement Savings Plan (Effective as of January 1, 1995)
<PAGE>
SMS RETIREMENT SAVINGS PLAN
(EFFECTIVE AS OF JANUARY 1, 1995)
PREPARED BY
DRINKER BIDDLE & REATH
APRIL 1995
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TABLE OF CONTENTS
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ARTICLE I - DEFINITIONS...................................... 1
1.1 "Account" or "Accounts".......................... 1
1.2 "Accrual Computation Period"..................... 1
1.3 "Accrued Benefit"................................ 1
1.4 "Adjustment Factor".............................. 1
1.5 "Affiliated Company"............................. 2
1.6 "Base Contribution Account"...................... 2
1.7 "Base Contributions"............................. 2
1.8 "Beneficiary".................................... 2
1.9 "Benefits Selection Period"...................... 2
1.10 "Code"........................................... 2
1.11 "Committee"...................................... 2
1.12 "Company Stock".................................. 2
1.13 "Compensation"................................... 3
1.14 "Computation Period"............................. 3
1.15 "Co-op Employee"................................. 3
1.16 "Disability"..................................... 4
1.17 "Early Retirement Date".......................... 4
1.18 "Eligible Employee".............................. 4
1.19 "Employee"....................................... 4
1.20 "Employee After-Tax Contribution Account"........ 4
1.21 "Employee After-Tax Contributions"............... 4
1.22 "Employer"....................................... 4
1.23 "Employer After-Tax Matching Contribution
Account"........................................ 4
1.24 "Employer After-Tax Matching Contributions"...... 4
1.25 "Employer Matching Contribution Account"......... 5
1.26 "Employer Matching Contributions"................ 5
1.27 "Employer Profit-Sharing Contribution Account"... 5
1.28 "Employer Profit-Sharing Contributions".......... 5
1.29 "Employment Commencement Date"................... 5
1.30 "ERISA".......................................... 5
1.31 "Fund"........................................... 5
1.32 "Highly Compensated Employee".................... 5
1.33 "Hour of Service"................................ 7
1.34 "Leased Employee"................................ 9
1.35 "Limitation Compensation"........................ 10
1.36 "Nonresident Alien".............................. 10
1.37 "Normal Retirement Age".......................... 10
1.38 "Normal Retirement Date"......................... 10
1.39 "One-Year Break in Service"...................... 10
1.40 "Participant".................................... 10
1.41 "Participating Company".......................... 10
1.42 "Payroll Period"................................. 10
1.43 "Plan"........................................... 10
1.44 "Plan Year"...................................... 10
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1.45 "Prior ESOP"..................................... 10
1.46 "Prior Plan"..................................... 11
1.47 "Profit-Sharing Plan"............................ 11
1.48 "Qualified Domestic Relations Order"............. 11
1.49 "Quarter"........................................ 11
1.50 "Resident of Puerto Rico"........................ 11
1.51 "Salary Reduction Agreement"..................... 11
1.52 "Sponsoring Company"............................. 11
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1.53 "Summer Employee"................................ 11
1.54 "Supplemental Contribution Account".............. 11
1.55 "Supplemental Contributions"..................... 11
1.56 "Temporary Employee"............................. 12
1.57 "Trust".......................................... 12
1.58 "Trust Agreement"................................ 12
1.59 "Trustee"........................................ 12
1.60 "Union Employee"................................. 12
1.61 "Valuation Date"................................. 12
1.62 "Vested Accrued Benefit"......................... 12
1.63 "Vesting Computation Period"..................... 12
1.64 "Year of Credited Service"....................... 12
1.65 "Year of Vesting Service"........................ 12
ARTICLE II - PARTICIPATION.................................. 13
2.1 Eligibility Requirements......................... 13
2.2 Duration of Participation........................ 14
2.3 Resumption of Eligibility for Base Contributions
and Employer Matching Contributions.............. 14
2.4 Additional Rules Relating to Plan Participation.. 14
ARTICLE III - CONTRIBUTIONS................................. 15
3.1 Base Contributions............................... 15
3.2 Supplemental Contributions....................... 15
3.3 Employer Matching Contributions.................. 15
3.4 Employer Profit-Sharing Contribution............. 16
3.5 Deductibility Limitation......................... 16
3.6 Type of Plan and Profits Requirement............. 16
3.7 Rollover Contributions........................... 16
3.8 Direct Transfers of Assets from Other Plans
Prohibited....................................... 17
3.9 Transfers of Accounts to Other Qualified Plans... 17
3.10 Distribution of Excess Elective Deferrals........ 17
3.11 Return of Employer Contributions................. 18
3.12 Employee Contributions........................... 20
3.13 Employee After-Tax Contributions................. 20
3.14 Employer After-Tax Matching Contributions........ 20
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ARTICLE IV - LIMITATIONS ON CONTRIBUTIONS..................... 20
4.1 Definitions........................................ 20
4.2 Limitation Applicable Where No Other Employee
Pension Benefit Plan, Welfare Benefit Fund,
Individual Medical Benefit Account, or Simplified
Employee Pension Maintained........................ 25
4.3 Multi-Plan Limitations for Additional Defined
Contribution Plans, Welfare Benefit Funds,
Individual Medical Benefit Accounts, and
Simplified Employee Pensions ...................... 26
4.4 Multi-Plan Limitations for Additional Plan
Which Is a Defined Benefit Plan.................... 27
4.5 Aggregation Rules.................................. 29
4.6 Additional Limitations on Elective Deferrals
(Base Contributions)............................... 29
4.7 Distribution of Excess Contributions............... 30
4.8 Additional Limitations on Employer Matching
Contributions and Forfeitures...................... 31
4.9 Distribution of Excess Aggregate Contributions..... 32
ARTICLE V - PARTICIPANTS' ACCOUNTS; VALUATION................. 33
5.1 Separate Accounts.................................. 33
5.2 Investment of Participants' Accounts............... 33
5.3 Apportionment of Participants' Accounts Among
Funds.............................................. 34
5.4 Valuation.......................................... 35
5.5 Allocation of Increases and Decreases to Base,
Employee After-Tax, Supplemental, Employer
Profit-Sharing, Employer After-Tax Matching, and
Employer Matching Contribution Accounts............ 35
5.6 Net Value of Participants' Accounts................ 35
5.7 Accounts of Participants Transferred to an
Affiliated Company................................. 35
5.8 Allocation of Forfeitures.......................... 35
ARTICLE VI - BENEFITS......................................... 35
6.1 Vesting............................................ 35
6.2 Normal Retirement Benefits......................... 36
6.3 Death Benefit...................................... 37
6.4 Disability Benefit................................. 37
6.5 Early Retirement and Other Termination of
Employment......................................... 37
ARTICLE VII - PAYMENT OF BENEFITS............................. 37
7.1 Retirement, Death, Disability and Termination
Benefits........................................... 37
7.2 Form of Distribution............................... 44
7.3 Methods of Payment of Benefits..................... 44
7.4 Designation of Beneficiary and Election with
Respect to Death Benefit........................... 46
7.5 Incapacitated Beneficiaries........................ 47
7.6 Time of Forfeitures................................ 48
ARTICLE VIII - ALIENATION OF BENEFITS......................... 49
8.1 Alienation of Benefits Generally Prohibited........ 49
8.2 Special Provision with Respect to Qualified
Domestic Relations Orders.......................... 50
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ARTICLE IX - LOANS.......................................... 50
9.1 Limitations..................................... 50
9.2 Interest........................................ 51
9.3 Repayment - Collection.......................... 51
9.4 Exception for Home Loans........................ 52
9.5 Number of Loans................................. 52
9.6 Loans - Individual Investments.................. 52
9.7 Accounts Available for Loans.................... 52
ARTICLE X - WITHDRAWALS DURING EMPLOYMENT................... 53
10.1 Withdrawals after Age 59-1/2.................... 53
10.2 Withdrawals before Age 59-1/2................... 53
ARTICLE XI - ALLOCATION OF FIDUCIARY RESPONSIBILITIES 56
11.1 Allocation of Responsibility.................... 56
11.2 Responsibility Not Joint........................ 56
11.3 Act in Interest of Participants................. 56
11.4 Advisors........................................ 57
ARTICLE XII - THE ADMINISTRATIVE COMMITTEE.................. 57
12.1 Appointment of Committee........................ 57
12.2 Chairman and Secretary.......................... 57
12.3 Committee Procedures............................ 57
12.4 Powers of Committee............................. 57
12.5 Protection of Trustee........................... 58
12.6 Outside Consultants............................. 58
12.7 Funding Policy.................................. 58
12.8 Expenses........................................ 58
12.9 Indemnification and Insurance................... 58
12.10 Claims Procedure................................ 59
ARTICLE XIII - THE TRUSTEE.................................. 60
13.1 Trust Assets.................................... 60
13.2 Duties of Trustee............................... 60
13.3 Trust Purpose................................... 60
13.4 Removal and Resignation of Trustee.............. 60
ARTICLE XIV - PLAN AMENDMENT, MERGER, CONSOLIDATION, OR
TERMINATION................................... 60
14.1 Amendment....................................... 60
14.2 Merger, Consolidation or Transfer of Assets..... 62
14.3 Termination of Plan and Trust; Discontinuance
of Contributions................................ 62
14.4 Vesting and Distribution upon Termination....... 63
14.5 Limitations on Distributions of
Elective Deferrals.............................. 63
14.6 Distributions upon Plan Termination............. 65
14.7 Distributions upon Sale of Assets............... 65
14.8 Distributions upon Sale of Subsidiary........... 65
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ARTICLE XV - ADOPTION OF PLAN BY AFFILIATED COMPANY......... 65
15.1 Adoption of Plan and Trust...................... 65
15.2 Withdrawal from Plan............................ 66
15.3 Exclusive Purpose of Trust...................... 66
15.4 Application of Withdrawal Provisions............ 66
15.5 Single Plan..................................... 66
15.6 Sponsoring Company Appointed Agent of
Adopting Affiliated Companies................... 66
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ARTICLE XVI - MISCELLANEOUS................................. 66
16.1 Expenses of Plan................................ 66
16.2 Plan Responsibilities........................... 66
16.3 Employment May Be Terminated.................... 67
16.4 Rights under Plan............................... 67
16.5 Construction.................................... 67
16.6 Application of Plan............................. 67
16.7 Gender and Number............................... 67
16.8 Bonding......................................... 67
16.9 Headings........................................ 67
16.10 Unclaimed Benefits.............................. 67
16.11 Funding Entity.................................. 67
ARTICLE XVII - TOP-HEAVY PROVISIONS......................... 68
17.1 Definitions..................................... 68
17.2 Special Top-Heavy Provisions.................... 71
EXHIBIT A - (PLAN AND TRUST ADOPTION AGREEMENT)............. 74
EXHIBIT A-1 - LIST OF PARTICIPATING COMPANIES............... 76
PLAN AND TRUST ADOPTION AGREEMENT HEALTHCARE DATA EXCHANGE
CORPORATION........................................... 77
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<PAGE>
SMS RETIREMENT SAVINGS PLAN
(EFFECTIVE AS OF JANUARY 1, 1995)
---------------------------------
INTRODUCTION
------------
WHEREAS, SHARED MEDICAL SYSTEMS CORPORATION (the "Sponsoring Company")
maintains the SHARED MEDICAL SYSTEMS CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN
(the "PAYSOP") (formerly named the Shared Medical Systems Corporation Retirement
Savings Plan); and
WHEREAS, the PAYSOP was amended effective as of January 1, 1995 to
provide that assets and liabilities attributable to Base Contributions,
Supplemental Contributions, Employer Profit-Sharing Contributions, Employer
Matching Contributions, Employee After-tax Contributions and Employer After-Tax
Matching Contributions ("Non-PAYSOP Contributions") would no longer be held
under the PAYSOP in order to simplify administration of the PAYSOP; and
WHEREAS, the Sponsoring Company desires to establish the SMS
RETIREMENT SAVINGS PLAN, effective as of January 1, 1995 (the "Plan"), to accept
the transfer of Non-PAYSOP Contributions from the PAYSOP;
NOW, THEREFORE, effective as of January 1, 1995, subject to the
approval of the Internal Revenue Service, the Plan is hereby established as
follows:
ARTICLE I
DEFINITIONS
-----------
The following words and phrases, as used herein, shall have the
following meanings, unless the context clearly indicates otherwise:
1.1 "ACCOUNT" or "ACCOUNTS" shall mean a Participant's Base
--------- ----------
Contribution Account, Supplemental Contribution Account, Employer Profit-Sharing
Contribution Account, and/or Employer Matching Contribution Account, or for a
Resident of Puerto Rico, such Participant's Employee After-Tax Contribution
Account and/or Employer After-Tax Matching Contribution Account.
1.2 "ACCRUAL COMPUTATION PERIOD" shall mean the Computation Period
----------------------------
measured by the Plan Year. Years of Credited Service and One-Year Breaks in
Service for benefit accruals shall be measured by the Accrual Computation
Period.
1.3 "ACCRUED BENEFIT" shall mean the total amount credited to the
-----------------
Participant's Accounts.
1.4 "ADJUSTMENT FACTOR" shall mean the cost of living adjustment
-------------------
factor prescribed by the Secretary of the Treasury under section 415(d) of the
Code for years beginning after December 31, 1987, as applied to such items and
in such manner as the Secretary shall provide.
1.5 "AFFILIATED COMPANY" shall mean:
--------------------
(a) Any member of a controlled group of corporations (as defined
in section 414(b) of the Code) of which the Sponsoring Company is a member;
(b) Any trade or business (whether or not incorporated) which is
under common control (as defined in section 414(c) of the Code) with the
Sponsoring Company;
(c) Any trade or business (whether or not incorporated) which is
a member of an affiliated service group (as defined in section 414(m)(2) of
the Code) of which the Sponsoring Company is a member; and
<PAGE>
(d) Any other entity required to be aggregated with the
Sponsoring Company pursuant to regulations under section 414(o) of the
Code.
Solely for purposes of applying sections 414(b) and (c) of the Code to
the limitations on annual additions of Sections 4.1 through 4.5, the phrase
"more than 50 percent" shall be substituted for the phrase "at least 80 percent"
wherever the latter phrase appears in section 1563(a)(1) of the Code.
1.6 "BASE CONTRIBUTION ACCOUNT" shall mean the Account established by
---------------------------
the Committee for each Participant (other than for Residents of Puerto Rico),
which Account shall be invested as provided in Article V on behalf of the
Participant for whom such Account was established, and to which Base
Contributions, "Rollover Contributions" under Section 3.7, and transferred
assets credited under Section 3.1 ("Base Contributions") of the Prior Plan as of
January 1, 1995, on behalf of such Participant, and the earnings and losses
thereon, shall be allocated.
1.7 "BASE CONTRIBUTIONS" shall mean contributions made by a
--------------------
Participating Company on behalf of a Participant (other than Residents of Puerto
Rico) through salary reduction under Section 3.1.
1.8 "BENEFICIARY" shall mean the surviving spouse of a Participant,
-------------
but if there is no surviving spouse, or if the spouse previously consented in
the manner described in Section 7.4, then such other person or persons or legal
entity as may be designated by the Participant (or in the absence of a valid
designation, as provided in Section 7.4(d)) to receive benefits payable under
the Plan after the Participant's death.
1.9 "BENEFITS SELECTION PERIOD" shall mean such time specified by
---------------------------
the Committee each Quarter of each Plan Year and such other period or periods
designated by the Committee in its discretion but determined in a
nondiscriminatory manner.
1.10 "CODE" shall mean the Internal Revenue Code of 1986, as amended.
------
1.11 "COMMITTEE" shall mean the Administrative Committee appointed to
-----------
administer the Plan under Section 12.1.
1.12 "COMPANY STOCK" shall mean the common stock of the Sponsoring
---------------
Company, $.01 par value.
1.13 "COMPENSATION" shall mean the Participant's salary, overtime,
--------------
bonuses, commissions and all other cash payments for services rendered, for the
portion of the Plan Year that he was a Participant in the Plan. Compensation
shall also include any compensation that is not currently includible in the
Participant's gross income for income tax purposes under section 402(e)(3) of
the Code (i.e., any salary reductions elected by a Participant under the Plan)
and under section 125 of the Code (i.e., any salary reductions elected by a
Participant under any flexible benefits plan maintained by the Participating
Company). Compensation shall not include any expense reimbursements.
Compensation shall include only that Compensation which is actually paid to the
Participant during the determination period or if a Participant did not
participate in the Plan during the entire determination period, only that
Compensation which is actually paid to the Participant during the portion of the
determination period in which the Participant participated in the Plan. For
purposes of this Section 1.13, the determination period is the Plan Year.
The annual Compensation of each Participant taken into account under
the Plan shall not exceed $150,000, as adjusted by the Commissioner for
increases in the cost-of-living in accordance with section 401(a)(17)(B) of the
Code. The cost-of-living adjustment in effect for a calendar year applies to
any determination period beginning in such calendar year. If a determination
period consists of fewer than 12 months, the annual 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
determination period, and the denominator of which is 12.
-2-
<PAGE>
If Compensation for any prior determination period is taken into
account in determining a Participant's allocations for the current Plan Year,
the Compensation for such prior determination period is subject to the
applicable annual Compensation limit in effect for that prior determination
period. For this purpose, in determining allocations in Plan Years beginning on
or after January 1, 1989, the annual compensation limit in effect for
determination periods beginning before that date is $200,000. In addition, in
determining allocations in Plan Years beginning on or after January 1, 1994, the
annual compensation limit in effect for determination periods beginning before
that date is $150,000.
In determining the Compensation of a Participant for purposes of the
limitations set forth in this Section 1.13, the rules of section 414(q)(6) of
the Code shall apply, except in applying such rules, the term "family" shall
include only the spouse of the Participant and any lineal descendants of the
Participant who have not attained age 19 before the close of the year. If, as a
result of the application of such rules, the adjusted annual Compensation
limitation is exceeded, then (except for 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
Section 1.13 prior to the application of this limitation.
1.14 "COMPUTATION PERIOD" shall mean any 12-consecutive-month period.
--------------------
1.15 "CO-OP EMPLOYEE" shall mean an Employee who works in a full-time
----------------
temporary position as part of an undergraduate or graduate degree program but
only if such Employee does not complete more than 999 Hours of Service in the
Computation Period commencing on such Employee's Employment Commencement Date or
the anniversaries of such Employment Commencement Date or in any other
applicable Computation Period.
1.16 "DISABILITY" shall mean an impairment causing the employee,
------------
because of injury or sickness, to be continuously unable to perform the
substantial and material duties of his regular occupation, and to be under the
regular care of a licensed physician, and to be not gainfully employed in any
occupation for which he is or becomes qualified by education, training or
experience. The degree of such impairment shall be supported by medical
evidence satisfactory to the Committee, and all Participants in similar
circumstances shall be treated uniformly.
1.17 "EARLY RETIREMENT DATE" shall mean the first day of the month
-----------------------
coincident with or next following the first date on which an Employee has both
attained age 55 and completed seven Years of Vesting Service.
1.18 "ELIGIBLE EMPLOYEE" shall mean any Employee of a Participating
-------------------
Company, other than a Union Employee (except as provided in Section 2.1), a
Leased Employee, a Nonresident Alien, a Co-op Employee, a Temporary Employee or
a Summer Employee or a Resident of Puerto Rico (except with respect to Employee
After-Tax Contributions and Employer After-Tax Matching Contributions made under
the Prior Plan and transferred to the Plan as of January 1, 1995).
1.19 "EMPLOYEE" shall mean any person employed by an Employer,
----------
including a Leased Employee.
1.20 "EMPLOYEE AFTER-TAX CONTRIBUTION ACCOUNT" shall mean the Account
-----------------------------------------
established by the Committee for each Participant who is a Resident of Puerto
Rico and who made Employee After-Tax Contributions under the Prior Plan before
January 1, 1995, which Account shall be invested as provided in Article V on
behalf of the Participant for whom such Account was established under the Prior
Plan, and to which transferred assets credited under Section 19.2 ("Employee
After-Tax Contributions") of the Prior Plan as of January 1, 1995, on behalf of
such Participant, and the earnings and losses thereon, shall be allocated.
1.21 "EMPLOYEE AFTER-TAX CONTRIBUTIONS" shall mean after-tax
----------------------------------
contributions to the Prior Plan made by a Participant who is a Resident of
Puerto Rico under the Prior Plan before January 1, 1995.
-3-
<PAGE>
1.22 "EMPLOYER" shall mean any Participating Company. For purposes of
----------
applying the provisions of sections 401, 410, 411, 415 and 416 of the Code, the
term "Employer" shall also include any Affiliated Company whether or not it is a
Participating Company.
1.23 "EMPLOYER AFTER-TAX MATCHING CONTRIBUTION ACCOUNT" shall mean the
--------------------------------------------------
Account established by the Committee for each Participant who is a Resident of
Puerto Rico on whose behalf Employer After-Tax Matching Contributions were made
under the Prior Plan before January 1, 1995, which Account shall be invested as
provided in Article V on behalf of the Participant for whom such Account was
established under the Prior Plan, and to which transferred assets credited under
Section 19.3 ("Employer After-Tax Matching Contributions") of the Prior Plan as
of January 1, 1995, on behalf of such Participant, and the earnings and losses
thereon, shall be allocated.
1.24 "EMPLOYER AFTER-TAX MATCHING CONTRIBUTIONS" shall mean
-------------------------------------------
contributions made by a Participating Company under the Prior Plan and allocated
as of a date before January 1, 1995, on behalf of a Participant who is a
Resident of Puerto Rico, by reason of such Participant's Employee After-Tax
Contributions to the Prior Plan.
1.25 "EMPLOYER MATCHING CONTRIBUTION ACCOUNT" shall mean the Account
----------------------------------------
established by the Committee for each Participant (other than for Residents of
Puerto Rico), which Account shall be invested as provided in Article V on behalf
of the Participant for whom such Account was established, and to which Employer
Matching Contributions and transferred assets credited under Section 3.3
("Employer Matching Contributions") of the Prior Plan as of January 1, 1995, on
behalf of such Participant, and the earnings and losses thereon, shall be
allocated.
1.26 "EMPLOYER MATCHING CONTRIBUTIONS" shall mean contributions made
---------------------------------
by a Participating Company on behalf of a Participant (other than Residents of
Puerto Rico) by reason of such Participant's Base Contributions to the Plan, as
provided in Section 3.3.
1.27 "EMPLOYER PROFIT-SHARING CONTRIBUTION ACCOUNT" shall mean the
---------------------------------------------
Account established by the Committee for each Participant (other than for
Residents of Puerto Rico), which Account shall be invested as provided in
Article V on behalf of the Participant for whom such Account was established,
and to which Employer Profit-Sharing Contributions and transferred assets
credited under Section 3.5 ("Employer Profit-Sharing Contribution") of the Prior
Plan as of January 1, 1995, on behalf of such Participant, and the earnings and
losses thereon, shall be allocated.
1.28 "EMPLOYER PROFIT-SHARING CONTRIBUTIONS" shall mean contributions
---------------------------------------
made by a Participating Company on behalf of a Participant (other than Residents
of Puerto Rico) under Section 3.4.
1.29 "EMPLOYMENT COMMENCEMENT DATE" shall mean the day on which an
------------------------------
Employee first performs an hour of service (within the meaning of 29 CFR (S)
2530.200b-2(a)(1)) for an Employer.
1.30 "ERISA" shall mean the Employee Retirement Income Security Act of
-------
1974, as amended.
1.31 "FUND" shall mean Fund A, B, C, D, E, F, or G as described in
------
Section 5.2.
1.32 "HIGHLY COMPENSATED EMPLOYEE" shall mean any highly compensated
-----------------------------
active Employee or highly compensated former Employee, determined under the
following provisions of this Section 1.32.
-4-
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(a) ACTIVE EMPLOYEE.
---------------
(1) A highly compensated active Employee is any Employee
who performs services for the Employer during the determination year
(i.e., the Plan Year for which the determination is being made) and
who, during the look-back year (also the Plan Year for which the
determination is being made if the Employer has elected to determine
the testing period under Section 1.32(c)(1) for that Plan Year):
(i) Received compensation from the Employer in
excess of $75,000 (as adjusted by the Adjustment Factor);
(ii) Received compensation from the Employer in
excess of $50,000 (as adjusted by the Adjustment Factor) and was
a member of the top-paid group; or
(iii) Was an officer of the Employer and received
compensation greater than 50 percent of the dollar limitation in
effect under section 415(b)(1)(A) of the Code for such look-back
year.
If no officer has satisfied the compensation requirement of Section
1.32(a)(1)(iii) above during either a determination year or a look-
back year, then the highest-paid officer for such year shall be
treated as a highly compensated active Employee.
(2) A highly compensated active Employee is also any
Employee who would be described in Section 1.32(a)(1)(i), (ii), or
(iii) if the term "determination year" were substituted for the term
"look-back year" and who was one of the 100 Employees who received the
greatest compensation from the Employer during the determination year.
(3) A highly compensated active Employee is also any
Employee who is a five-percent owner at any time during the look-back
year or determination year.
(b) FORMER EMPLOYEE. A highly compensated former Employee is
---------------
any Employee who separated from service (or was deemed to have separated
from service) prior to the determination year, who performs no service for
the Employer during the determination year, and who was a highly
compensated active Employee for either the separation year or any
determination year ending on or after such Employee's 55th birthday.
(c) TESTING PERIOD. For purposes of this Section 1.32, the
---------------
testing period shall be either (1) or (2) below as the Sponsoring Company
shall elect for any Plan Year:
(1) The calendar year (i.e., the Plan Year for which the
deter-mination is being made) shall be the look-back year and, because
the Plan Year is the calendar year and the determination year is the
same as the look-back year, a separate determination year shall not be
required, in accordance with Q&A-14(b) of Treas. Reg. (S) 1.414(q)-1T;
or
(2) The determination year shall be the Plan Year for which
the determination is being made, and the look-back year shall be the
12-month period immediately preceding the determination year.
The election made under this Section 1.32(c) for any Plan Year
with respect to this Plan shall apply with respect to all plans, entities,
and arrangements of the Employer.
(d) COMPENSATION. For purposes of this Section 1.32,
-------------
compensation shall mean compensation as described in section 414(q)(7) of
the Code.
If an Employee is, during a determination year or look-back year, a
family member
-5-
<PAGE>
(within the meaning of section 414(q)(6) of the Code) of either a five-percent
owner who is an active or former Employee or a highly compensated Employee who
is one of the ten most highly compensated Employees ranked on the basis of
compensation paid by the Employer during such year, then the family member and
the five-percent owner or top-ten highly compensated Employee shall be
aggregated. In such case, the family member and five-percent owner or top-ten
Highly Compensated Employee shall be treated as a single Employee receiving
compensation and plan contributions or benefits equal to the sum of such
compensation and contributions or benefits of the family member and five-percent
owner or top-ten highly compensated Employee. For purposes of this Section 1.32,
"family member" includes the spouse, lineal ascendants and descendants of the
Employee or former Employee and the spouses of such lineal ascendants and
descendants.
The determination of who is a Highly Compensated Employee, including
the determinations of the number and identity of Employees in the top-paid
group, the top 100 Employees, the number of Employees treated as officers, and
the compensation that is taken into account, shall be made in accordance with
section 414(q) of the Code and Treasury regulations thereunder.
1.33 "HOUR OF SERVICE" shall mean an hour of service determined as
-----------------
follows:
(a) GENERAL RULE. An "Hour of Service" shall mean:
------------
(1) Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for an Employer;
(2) Each hour for which an Employee is paid, or entitled to
payment, by an Employer on account of a period of time during which no
duties are performed (irrespective of whether the employment
relationship has terminated) due to vacation, holiday, illness,
incapacity (including disability), layoff, jury duty, military duty or
leave of absence (including a leave of absence under the Family
Medical Leave Act);
(3) Each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by an Employer,
provided that the same Hours of Service shall not be credited under
Section 1.33(a)(1) or Section 1.33(a)(2) and under this Section
1.33(a)(3).
(b) EXCEPTIONS. Notwithstanding Section 1.33(a)(2):
----------
(1) No more than 501 Hours of Service shall be credited
under Section 1.33(a)(2) to an Employee on account of any single
continuous period during which the Employee performs no duties
(whether or not such period occurs in a single Computation Period);
(2) Hours of Service shall not be credited under Section
1.33(a)(2) to an Employee for payments made or due under a plan
maintained solely for the purpose of complying with any applicable
workers' compensation, unemployment compensation or disability
insurance laws;
(3) Hours of Service shall not be credited under Section
1.33(a)(2) to an Employee for any payment which solely reimburses him
for medical or medically related expenses he has incurred; and
(4) Hours of Service shall not be credited under Section
1.33(a)(2) to an Employee for any payments made or due to him under
this Plan or any other pension or profit-sharing plan maintained by an
Employer.
(c) MATERNITY OR PATERNITY LEAVE. Solely for purposes of
----------------------------
determining whether a One-Year Break in Service for participation and
vesting has occurred in a Computation Period, an Employee who is absent
from work for maternity or paternity reasons
-6-
<PAGE>
shall receive credit for the Hours of Service which would otherwise have
been credited to such Employee but for such absence, or, in any case in
which such Hours of Service cannot be determined, eight Hours of Service
per day of such absence. For purposes of this Section 1.33(c), an absence
from work for maternity or paternity reasons means an absence:
(1) By reason of the pregnancy of the Employee;
(2) By reason of a birth of a child of the Employee;
(3) By reason of the placement of a child with the Employee
in connection with the adoption of such child by such Employee; 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 Section 1.33(c) shall be credited
(i) in the Computation Period in which the absence begins if the crediting
is necessary to prevent a One-Year Break In Service in that Computation
Period, or (ii) in all other cases, in the following Computation Period.
(d) OTHER RULES.
-----------
(1) In the case of a payment which is made, or due, on
account of a period during which an Employee performs no duties, and
which results in the crediting of Hours of Service under Section
1.33(a)(2), or in the case of an award or agreement for back pay, to
the extent that such award or agreement is made with respect to a
period described in Section 1.33(a)(2), the number of Hours of Service
to be credited shall be determined in accordance with 29 CFR (S)
2530.200b-2(b).
(2) Hours of Service described in Section 1.33(a)(1) shall
be credited to the Employee for the Computation Period in which the
duties are performed. Hours of Service under Section 1.33(a)(2) shall
be calculated and credited to Computation Periods in accordance with
29 CFR (S) 2530.200b-2 which is incorporated herein by this reference.
Hours of Service under Section 1.33(a)(3) shall be credited to the
Employee for the Computation Period(s) to which the award or agreement
pertains rather than to the Computation Period in which the award,
agreement or payment is made.
(3) This Section 1.33 shall not be construed so as to
alter, amend, modify, invalidate, impair or supersede any law of the
United States or any rule or regulation issued under any such law. The
nature and extent of credit for Hours of Service recognized under this
Section 1.33 shall be determined under such law.
(4) In the case of an Employee who is on leave of absence
for service on active duty in the Armed Forces of the United States,
such Employee shall receive upon return to the service of an Employer,
in addition to credit for Hours of Service to which such Employee is
entitled under this Section 1.33, such other credit as may be
prescribed by Federal laws relating to military service and veterans'
reemployment rights.
(5) Except as otherwise provided in Section 1.33(c), the
number of Hours of Service to be credited to an Employee in a
Computation Period shall be determined in the following manner:
(A) In the case of an Employee for whom an Employer
maintains records of his hours worked and hours for which payment
is made or due, the number of Hours of Service to be credited to
such Employee in a Computation Period shall be determined from
such records.
(B) In the case of an Employee for whom an Employer
-7-
<PAGE>
does not maintain records of his hours worked and hours for which
payment is made or due, the number of Hours of Service to be
credited to such Employee in a Computation Period shall be
determined on the basis of periods of employment which shall be
the payroll periods of such Employer applicable to such Employee.
An Employee shall be credited with a number of Hours of Service,
determined in accordance with the following table, for each of
his payroll periods in which he actually has at least one Hour of
Service:
PAYROLL PERIOD HOURS OF SERVICE CREDITED
-------------- -------------------------
Daily 10
Weekly 45
Semimonthly 95
Monthly 190
1.34 "LEASED EMPLOYEE" shall mean 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 section
414(n)(6) of the Code) on a substantially full-time basis for a period of at
least one year, provided such services are of a type historically performed by
employees in the business field of the recipient employer. Contributions or
benefits provided a Leased Employee by the leasing organization which are
attributable to services performed for the recipient employer shall be treated
as provided by the recipient employer.
A Leased Employee shall not be considered an employee of the
recipient if:
(a) Such employee is covered by a money purchase pension plan
providing:
(1) A nonintegrated employer contribution rate of at least
ten percent of compensation, as defined in section 415(c)(3) of the
Code, but including amounts contributed pursuant to a salary reduction
agreement which are excludable from the employee's gross income under
section 125, 402(e)(3), 402(h)(1)(B) or 403(b) of the Code;
(2) Immediate participation; and
(3) Full and immediate vesting; and
(b) Leased Employees do not constitute more than 20 percent of
the recipient's nonhighly compensated workforce.
1.35 "LIMITATION COMPENSATION" shall mean wages within the meaning of
-------------------------
section 3401(a) of the Code for 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 services
performed (such as the exception for agricultural labor in section 3401(a)(2) of
the Code).
For purposes of this Section 1.35, Limitation Compensation for a
Limitation Year shall only include compensation actually paid or made available
in gross income during such Limitation Year.
1.36 "NONRESIDENT ALIEN" shall mean any nonresident alien (within the
-------------------
meaning of section 7701(b)(1)(B) of the Code) who receives no earned income
(within the meaning of section 911(d)(2) of the Code) which constitutes United
States source income (within the meaning of section 861(a)(3) of the Code) all
as described in Treas. Reg. (S) 1.410(b)-6(c)(1).
-8-
<PAGE>
1.37 "NORMAL RETIREMENT AGE" shall mean age 65.
-----------------------
1.38 "NORMAL RETIREMENT DATE" shall mean the first day of the month
------------------------
coincident with or next following an Employee's attainment of Normal Retirement
Age.
1.39 "ONE-YEAR BREAK IN SERVICE" shall mean a Computation Period
---------------------------
during which a Participant has not completed more than 500 Hours of Service.
1.40 "PARTICIPANT" shall mean an Employee participating in the Plan in
-------------
accordance with the provisions of Article II.
1.41 "PARTICIPATING COMPANY" shall mean the Sponsoring Company and any
-----------------------
Affiliated Company that adopts the Plan for the benefit of its employees
pursuant to Article XV.
1.42 "PAYROLL PERIOD" shall mean the interval between pay days as
----------------
established by a Participating Company.
1.43 "PLAN" shall mean the SMS RETIREMENT SAVINGS PLAN, effective as
------
of January 1, 1995.
1.44 "PLAN YEAR" shall mean a period of 12 consecutive calendar months
-----------
beginning on January 1 of each year during which the Plan is in effect.
1.45 "PRIOR ESOP" shall mean the Shared Medical Systems Corporation
------------
Employee Stock Ownership and Savings Plan as in effect prior to its amendment
and restatement as the SHARED MEDICAL SYSTEMS CORPORATION RETIREMENT AND SAVINGS
PLAN, effective January 1, 1989 (name changed to SHARED MEDICAL SYSTEMS
CORPORATION RETIREMENT SAVINGS PLAN, effective January 1, 1994).
1.46 "PRIOR PLAN" shall mean the SHARED MEDICAL SYSTEMS CORPORATION
------------
RETIREMENT SAVINGS PLAN, as amended and restated effective January 1, 1989 (name
changed to the SHARED MEDICAL SYSTEMS CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN,
effective January 1, 1995).
1.47 "PROFIT-SHARING PLAN" shall mean the SHARED MEDICAL SYSTEMS
---------------------
CORPORATION PROFIT-SHARING PLAN as in effect prior to January 1, 1990.
Effective January 1, 1990, the Profit-Sharing Plan was merged into the Prior
Plan.
1.48 "QUALIFIED DOMESTIC RELATIONS ORDER" shall mean any judgment,
------------------------------------
decree or order (including approval of a property settlement agreement) which
relates to the provision of child support, alimony payment or marital property
rights to a spouse, former spouse, child or other dependent of a Participant, is
made pursuant to a state domestic relations law, and satisfies the requirements
of section 414(p) of the Code.
1.49 "QUARTER" shall mean any Plan Year (calendar year) quarter.
---------
1.50 "RESIDENT OF PUERTO RICO" shall mean an individual who is a
-------------------------
Puerto Rican resident employed by a Participating Company in Puerto Rico.
1.51 "SALARY REDUCTION AGREEMENT" shall mean an agreement in writing
----------------------------
executed by a Participant on the form provided by the Committee to the
Participant for use in designating the amount of his Base Contributions.
1.52 "SPONSORING COMPANY" shall mean SHARED MEDICAL SYSTEMS
--------------------
CORPORATION.
-9-
<PAGE>
1.53 "SUMMER EMPLOYEE" shall mean a college student enrolled in a
-----------------
degree program or a high school graduate who is matriculating in a degree
program who assumes temporary employment with an Employer during the summer
months but only if such Employee does not complete more than 999 Hours of
Service in the Computation Period commencing on such Employee's Employment
Commencement Date or the anniversaries of such Employment Commencement Date or
in any other applicable Computation Period.
1.54 "SUPPLEMENTAL CONTRIBUTION ACCOUNT" shall mean the Account
-----------------------------------
established by the Committee for each Participant who made Supplemental
Contributions under the Prior ESOP, which Account shall be invested as provided
in Article V on behalf of the Participant for whom such Account was established
under the Prior ESOP, and to which transferred assets credited under Section 3.2
("Supplemental Contributions") of the Prior Plan as of January 1, 1995, on
behalf of such Participant, and the earnings and losses thereon, shall be
allocated.
1.55 "SUPPLEMENTAL CONTRIBUTIONS" shall mean Supplemental
----------------------------
Contributions made by a Participant under the Prior ESOP before January 1, 1989.
1.56 "TEMPORARY EMPLOYEE" shall mean an Employee who is hired for a
--------------------
limited period of no more than 12 consecutive months but only if such Employee
does not complete more than 999 Hours of Service in the Computation Period
commencing on such Employee's Employment Commencement Date or the anniversaries
of such Employment Commencement Date or in any other applicable Computation
Period.
1.57 "TRUST" shall mean the trust maintained pursuant to the Plan.
-------
1.58 "TRUST AGREEMENT" shall mean an agreement between a Trustee and
-----------------
the Sponsoring Company entered into for the purpose of holding, managing, and
administering under the Trust all property held by the Trustee for the exclusive
benefit of Participants and their Beneficiaries under the Plan.
1.59 "TRUSTEE" shall mean THE VANGUARD FIDUCIARY TRUST COMPANY, or its
---------
duly appointed successor.
1.60 "UNION EMPLOYEE" shall mean any Employee who is included in a
----------------
unit of employees covered by an agreement which the Secretary of Labor finds to
be a collective bargaining agreement between a Participating Company or an
Affiliated Company and a bargaining representative of such person, if there is
evidence that retirement benefits were the subject of good faith bargaining
between such bargaining representative and the Participating Company or
Affiliated Company.
1.61 "VALUATION DATE" shall mean March 31, June 30, September 30, and
----------------
December 31 of each Plan Year and such other date or dates as the Committee
shall direct on a nondiscriminatory basis.
1.62 "VESTED ACCRUED BENEFIT" shall mean that portion of a
------------------------
Participant's Accrued Benefit which has become nonforfeitable under the Plan and
which, as of January 1, 1995, shall be no less than the Participant's Vested
Accrued Benefit under the Prior Plan, excluding amounts credited to the
Participant's Employer PAYSOP Contribution Account, as of December 31, 1994.
1.63 "VESTING COMPUTATION PERIOD" shall mean the Computation Period
----------------------------
measured by the Plan Year, including 12-consecutive-month periods beginning on
any January 1 prior to establishment of the Plan. Years of Vesting Service and
One-Year Breaks in Service for vesting shall be measured by the Vesting
Computation Period.
1.64 "YEAR OF CREDITED SERVICE" shall mean any Accrual Computation
--------------------------
Period during which a Participant has completed not less than 1,000 Hours of
Service with the Participating Companies; provided, however, that in determining
a Participant's Years of Credited Service, any period which is not required to
be taken into account in determining such Participant's Years of Vesting Service
under Section 1.65 shall be disregarded.
-10-
<PAGE>
1.65 "YEAR OF VESTING SERVICE" shall mean any Vesting Computation
-------------------------
Period during which an Employee has completed not less than 1,000 Hours of
Service with the Employers; provided, however, that Hours of Service with an
Affiliated Company shall be counted only during the period in which the
Affiliated Company was an Affiliated Company; and further provided that if an
Employee is reemployed by an Employer following five consecutive One-Year Breaks
in Service, and such Employee had no vested interest in his Accrued Benefit
derived from Employer contributions prior to such One-Year Breaks in Service and
the number of consecutive One-Year Breaks in Service equals or exceeds the
aggregate Years of Vesting Service completed prior to such One-Year Breaks in
Service, such Years of Vesting Service completed prior to such One-Year Breaks
in Service shall be disregarded.
For purposes of this Section 1.65, (a) the Years of Vesting Service
with respect to any period ending on or before December 31, 1988, of any person
who, on January 1, 1989, was a participant in the Profit-Sharing Plan shall not
be less than his Years of Service under the Profit-Sharing Plan as in effect on
such date, and (b) the Years of Vesting Service with respect to any period
ending on or before December 31, 1994, of any Participant who, on December 31,
1994, was a participant in the Prior Plan, shall not be less than his Years of
Vesting Service under the Prior Plan as in effect on such date.
ARTICLE II
PARTICIPATION
-------------
2.1 ELIGIBILITY REQUIREMENTS.
------------------------
(a) BASE CONTRIBUTIONS AND EMPLOYER MATCHING CONTRIBUTIONS. Any
------------------------------------------------------
individual who was a Participant in the Prior Plan on December 31, 1994,
with respect to Base Contributions and Employer Matching Contributions
shall become a Participant in the Plan on January 1, 1995, with respect to
such Contributions, provided he is in the service of a Participating
Company as an Eligible Employee on January 1, 1995. Any Eligible Employee
of a Participating Company who was not a Participant in the Prior Plan on
December 31, 1994, and who is not a Resident of Puerto Rico, shall be
eligible to participate in, and shall become a Participant in, the Plan,
with respect to Base Contributions and Employer Matching Contributions, as
of such Employee's Employment Commencement Date. However, in order to be
eligible to make Base Contributions to the Plan and to receive any Employer
Matching Contributions with respect thereto, the Eligible Employee must
complete and file with the Committee a Salary Reduction Agreement before
the first day of the Payroll Period for which the Salary Reduction
Agreement is first effective in accordance with the procedures set forth in
Section 3.1. Notwithstanding any other provision of the Plan, no Resident
of Puerto Rico shall be eligible to participate in the Plan with respect to
Base Contributions and Employer Matching Contributions.
(b) EMPLOYER PROFIT-SHARING CONTRIBUTIONS. Any Eligible
-------------------------------------
Employee of a Participating Company who was a Participant in the Prior Plan
on December 31, 1994, with respect to Employer Profit-Sharing Contributions
shall become a Participant in the Plan on January 1, 1995, with respect to
such Contributions, provided he is in the service of a Participating
Company as an Eligible Employee on January 1, 1995. Any Eligible Employee
of a Participating Company who was not a Participant in the Prior Plan on
December 31, 1994, and who is not a Resident of Puerto Rico, shall be
eligible to participate in, and shall become a Participant in, the Plan,
with respect to Employer Profit-Sharing Contributions, on the January 1
coincident with or immediately following such Employee's Employment
Commencement Date, provided he is an Eligible Employee on such January 1.
Notwithstanding any other provision of the Plan, no Resident of Puerto Rico
shall be eligible to participate in the Plan with respect to Employer
Profit-Sharing Contributions.
(c) UNION EMPLOYEES. Notwithstanding the foregoing, any
---------------
Employee who is covered under the terms and conditions of a collective
bargaining agreement to which a Participating Company is a party shall be
eligible to be a Participant if such collective bargaining agreement
provides for the participation of such individual in this Plan.
-11-
<PAGE>
2.2 DURATION OF PARTICIPATION. After an Employee becomes a
-------------------------
Participant in the Plan, the Employee's participation shall continue until the
earlier of:
(a) The Participant's death, retirement, Disability, or other
termination of employment with the Participating Company; or
(b) The Participant's ceasing to satisfy the eligibility
requirements of Section 2.1.
Although a Participant otherwise eligible to participate in the Plan
shall continue to participate in the Plan, such Participant shall not be
eligible to make Base Contributions and to receive Employer Matching
Contributions with respect thereto during the suspension of the Participant's
Base Contributions under Section 3.1(d).
2.3 RESUMPTION OF ELIGIBILITY FOR BASE CONTRIBUTIONS AND EMPLOYER
-------------------------------------------------------------
MATCHING CONTRIBUTIONS. A former Participant in this Plan or the Prior Plan who
- ----------------------
satisfies the eligibility requirements set forth in Section 2.1 shall again
become eligible to make Base Contributions and to receive Employer Matching
Contributions on the first day of the Payroll Period coincident with or next
following the date on which he files a new Salary Reduction Agreement with the
Committee or its designated agent, provided that a Participant whose Base
Contributions have been suspended under Section 3.1(d) may not again become
eligible to make Base Contributions and receive Employer Matching Contributions
until the first day of the Benefits Selection Period next following such
suspension.
2.4 ADDITIONAL RULES RELATING TO PLAN PARTICIPATION.
------------------------------------------------
(a) REHIRED FORMER PARTICIPANTS OR FORMER EMPLOYEES. A former
-----------------------------------------------
Participant in this Plan or the Prior Plan or former Employee who meets the
eligibility requirements of Section 2.1 (other than the requirement that he
be employed on January 1) shall become a Participant immediately upon his
return to the employ of a Participating Company if he is then an Eligible
Employee.
(b) PARTICIPANTS WHO BECOME INELIGIBLE EMPLOYEES. In the event
--------------------------------------------
a Participant in this Plan or the Prior Plan becomes ineligible to
participate because he is no longer an Eligible Employee, such Employee
shall participate immediately upon his again becoming an Eligible Employee.
(c) INELIGIBLE EMPLOYEES WHO BECOME ELIGIBLE. In the event an
----------------------------------------
Employee who is not an Eligible Employee becomes an Eligible Employee, such
Employee shall participate immediately, if such Employee has satisfied the
eligibility requirements and would have previously become a Participant in
this Plan or the Prior Plan had he been an Eligible Employee.
ARTICLE III
CONTRIBUTIONS
-------------
-12-
<PAGE>
3.1 BASE CONTRIBUTIONS.
------------------
(a) AMOUNT OF CONTRIBUTIONS. Subject to the limitations imposed
-----------------------
in Article IV, a Participant (other than a Resident of Puerto Rico) may
elect, by filing a Salary Reduction Agreement with the Committee or its
designated agent, to have Base Contributions equal to any whole percentage
from one percent to 15 percent of his Compensation for such Plan Year made
to the Plan on his behalf. In no event, however, shall such Base
Contributions, when added to any Elective Deferrals (within the meaning of
Section 3.10(c)(1)) under any other qualified plan of the Employer exceed
the dollar limitation contained in section 402(g) of the Code in effect at
the beginning of the Participant's taxable year in which such Base
Contribution or other Elective Deferrals are made (i.e., $7,000, as
adjusted pursuant to section 402(g)(5) of the Code for such taxable year).
(b) MANNER OF MAKING CONTRIBUTIONS. The Participant shall
------------------------------
designate on his Salary Reduction Agreement the percentage of his
Compensation which shall be withheld by the Participating Company at the
end of each Payroll Period as a Base Contribution. Such Base Contribution
shall be paid by the Participating Company to the Trustee as soon as
possible after the end of each calendar month. Participants may also elect
to make lump-sum Base Contributions by payroll deduction during the second
and fourth quarters of any Plan Year, but not more than twice in any Plan
Year; provided, however, that such election applies only to amounts not yet
earned at the time of such election, and that the total of the Base
Contributions for a Participant for a Plan Year does not exceed the amount
determined under Section 3.1(a). All Base Contributions made on behalf of
a Participant must be contributed to the Plan within 90 days of the date on
which they would otherwise have been paid to the Participant, but in no
event later than 30 days after the end of the Plan Year for which such Base
Contributions are made.
(c) INCREASE IN CONTRIBUTIONS. A Participant may increase the
-------------------------
percentage of his Compensation designated under Section 3.1(a) by filing
written notice of such change on a form provided by the Committee during a
Benefits Selection Period; provided, however, no more than one such
increase shall be permitted in any calendar quarter. Such change shall
take effect within a reasonable period of time following such filing.
(d) DECREASE IN OR SUSPENSION OF CONTRIBUTIONS. A Participant
------------------------------------------
may decrease the percentage of his Compensation designated under Section
3.1(a) or may suspend the making of Base Contributions as of the first day
of any Payroll Period by filing written notice of such change on a form
provided by the Committee not less than 15 days prior to the effective date
of a decrease or 30 days prior to the effective date of a suspension;
provided, however, no more than one such decrease shall be permitted in any
calendar quarter; and further provided, that the number of suspensions
shall not be limited.
3.2 SUPPLEMENTAL CONTRIBUTIONS. No Supplemental Contributions shall
--------------------------
be permitted. Effective January 1, 1989, no Supplemental Contributions were
permitted under the Prior Plan.
3.3 EMPLOYER MATCHING CONTRIBUTIONS. The Participating Companies
-------------------------------
shall, for each Payroll Period, subject to the limitations of Article IV, make
Employer Matching Contributions on behalf of each Participant (other than
Residents of Puerto Rico) who has elected to make Base Contributions for such
Payroll Period in an amount to be determined annually by the Board of Directors
of the Sponsoring Company based upon the amount of such Participant's Base
Contributions. Employer Matching Contributions for any Plan Year shall be paid
to the Trustee no later than the due date (including extensions of time) for
filing the Participating Company's Federal income tax return for the taxable
year which ends with or within such Plan Year.
3.4 EMPLOYER PROFIT-SHARING CONTRIBUTION. Each Participating Company
------------------------------------
shall make an Employer Profit-Sharing Contribution for each Plan Year in such
amount (if any) as its Board of Directors shall determine in its sole
discretion. Such Contribution shall be allocated to the Employer Profit-Sharing
Contribution Account of each Participant (other than Residents of Puerto Rico)
who is in the employ of a Participating Company on December 31 of such Plan
Year, in an amount equal to
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<PAGE>
such Employer Profit-Sharing Contribution multiplied by a fraction, the
numerator of which is the Participant's Compensation for the Plan Year and the
denominator of which is the total Compensation for the Plan Year of all
Participants in the employ of a Participating Company on December 31 of such
Plan Year (other than Residents of Puerto Rico). Such Contribution shall be paid
to the Trustee no later than the due date (including extensions of time) for
filing the Participating Company's Federal income tax return for the taxable
year which ends with or within the Plan Year for which such Contribution is
made.
3.5 DEDUCTIBILITY LIMITATION. Notwithstanding the preceding
------------------------
provisions of this Article III, Base Contributions, Employer Matching
Contributions, and Employer Profit-Sharing Contributions shall be made to the
Plan on behalf of a Participant for any Plan Year only to the extent such Base
Contributions, Employer Matching Contributions, and Employer Profit-Sharing
Contributions are deductible by the Participating Company under section 404 of
the Code for the taxable year of the Participating Company which ends with or
within such Plan Year.
3.6 TYPE OF PLAN AND PROFITS REQUIREMENT.
------------------------------------
(a) PROFITS NOT REQUIRED. Base Contributions, Employer Matching
--------------------
Contributions, and Employer Profit-Sharing Contributions may be made on
behalf of a Participant without regard to the Participating Company's
current or accumulated earnings and profits for the taxable year or years
ending with or within the Plan Year.
(b) TYPE OF PLAN. Pursuant to section 401(a)(27) of the Code,
------------
the Plan is designated as a profit-sharing plan.
3.7 ROLLOVER CONTRIBUTIONS.
----------------------
(a) CREDITING ROLLOVER CONTRIBUTIONS. Any Participant (other
--------------------------------
than a Resident of Puerto Rico) may, with the Committee's approval, or in
accordance with procedures established by the Committee, make a Rollover
Contribution (as defined in Section 3.7(b)). The Trustee shall credit the
amount of any Rollover Contribution to the Participant's Base Contribution
Account as of the date the Rollover Contribution is made. A Rollover
Contribution shall be fully vested on the date of contribution. The
limitations of Article IV shall not apply to Rollover Contributions. All
Rollover Contributions shall be in cash and/or other property acceptable to
the Trustee.
(b) DEFINITION OF "ROLLOVER CONTRIBUTION". "Rollover
------------------------------------
Contributions" mean eligible rollover distributions within the meaning of
section 402(c)(4) or section 402(f)(2) of the Code, provided such eligible
rollover distributions are transferred to the Plan within 60 days of the
date received by the Participant. "Rollover Contributions" shall also mean
such eligible rollover distributions within the meaning of section
402(f)(2)(A) and which are made in the form of a direct trustee-to-trustee
transfer described in section 401(a)(31) of the Code.
(c) TREATMENT OF ROLLOVER CONTRIBUTIONS. Except with respect to
-----------------------------------
the limitations of Article IV, Rollover Contributions shall be treated in
the same manner as Base Contributions.
3.8 DIRECT TRANSFERS OF ASSETS FROM OTHER PLANS PROHIBITED. No
------------------------------------------------------
direct or indirect transfers of assets from other plans to this Plan shall be
permitted other than (a) Rollover Contributions as described in Section 3.7, and
(b) the transfer from the Prior Plan as of January 1, 1995, of assets
attributable to Base Contributions, Supplemental Contributions, Employer Profit-
Sharing Contributions, Employer Matching Contributions, Employee After-Tax
Contributions and Employer After-Tax Matching Contributions made under the Prior
Plan.
3.9 TRANSFERS OF ACCOUNTS TO OTHER QUALIFIED PLANS. Upon the request
----------------------------------------------
of a Participant who has terminated his employment with all the Participating
Companies, or in accordance with procedures established by the Committee, the
Trustee shall transfer all amounts held in the Plan for the account of such
Participant to another plan or plans, provided such other plan or
-14-
<PAGE>
plans meet the requirements of section 401(a) of the Code and such other plan or
plans are maintained by the employer of such Participant and further provided
that any such request is accompanied by an acceptance letter from the trustee of
the transferee plan or plans. Neither the Trustee nor the Committee shall have
any further liability under this Plan with respect to amounts so transferred.
3.10 DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS.
-----------------------------------------
(a) IN GENERAL. A Participant may assign to this Plan any
----------
Excess Elective Deferrals made during a taxable year of such Participant by
notifying the Committee in the manner provided below during the taxable
year such Excess Elective Deferrals are made or on or before the March 1
immediately following such taxable year of the amount of the Excess
Elective Deferrals to be assigned to the Plan. A Participant shall be
deemed to notify the Committee of any Excess Elective deferrals that arise
by taking into account only those Elective Deferrals made to this Plan and
any other plans of the Employer.
Notwithstanding any other provision of this Plan, Excess Elective
Deferrals, plus any income and minus any loss allocable thereto, shall be
distributed no later than April 15 of each year to any Participant to whose
account Excess Elective Deferrals were assigned for the preceding taxable
year of such Participant and who claims Excess Elective Deferrals for such
taxable year.
(b) CLAIMS. The Participant's claim shall be in writing; shall
------
be submitted to the Committee no later than March 1; shall specify the
Participant's Excess Elective Deferrals which the Participant assigns to
this Plan for the year of such Deferrals or the preceding taxable year of
such Participant (which shall not exceed the amount of the Participant's
Elective Deferrals under this Plan for such taxable year); and shall be
accompanied by the Participant's written statement that if such amounts are
not distributed, such Excess Elective Deferrals, when added to other
Elective Deferrals made on behalf of the Participant, will exceed the limit
imposed on the Participant by section 402(g) of the Code for the taxable
year of the Participant for which such Elective Deferrals were made.
(c) DEFINITIONS. The following additional definitions apply to
-----------
this Section 3.10:
(1) "ELECTIVE DEFERRALS" shall mean any employer
--------------------
contributions (e.g., Base Contributions) made to a plan at the
election of the Participant, in lieu of cash compensation, and shall
include contributions made pursuant to a salary reduction agreement or
other deferral mechanism. With respect to any taxable year of a
Participant, such Participant's Elective Deferrals are the sum of all
employer contributions made on behalf of such Participant pursuant to
an election to defer under any qualified cash or deferred arrangement
as described in section 401(k) of the Code, any simplified employee
pension cash or deferred arrangement as described in section
402(h)(1)(B) of the Code, any eligible deferred compensation plan
under section 457 of the Code, or any plan described under section
501(c)(18) of the Code, and any employer contributions made on the
behalf of a Participant for the purchase of an annuity contract under
section 403(b) of the Code pursuant to a salary reduction agreement.
Elective Deferrals shall not include any deferrals properly
distributed as excess Annual Additions.
(2) "EXCESS ELECTIVE DEFERRALS" shall mean those Elective
---------------------------
Deferrals that are includible in a Participant's gross income under
section 402(g) of the Code to the extent such Elective Deferrals for a
taxable year exceed the dollar limitation under such Code section.
Excess Elective Deferrals distributed under Section 3.10 no later than
the first April 15 following the close of the Participant's taxable
year shall NOT be treated as Annual Additions for purposes of Section
---
4.1(h). Otherwise, Excess Elective Deferrals shall be treated as
Annual Additions under Section 4.1(h).
(d) DETERMINATION OF INCOME OR LOSS. Excess Elective Deferrals
-------------------------------
shall be
-15-
<PAGE>
adjusted for any income or loss for the Plan Year in which such Excess
Deferrals arose in the same manner as described in Section 5.5. The income
or loss allocable to the period between the end of the Plan Year in which
such Excess Elective Deferrals arose and the date of distribution shall be
disregarded.
(e) FORFEITURE OF EMPLOYER MATCHING CONTRIBUTIONS. Employer
---------------------------------------------
Matching Contributions shall be forfeited if the contributions to which
they relate are Excess Elective Deferrals, Excess Contributions or Excess
Aggregate Contributions (except as otherwise provided in Section 4.9) and
shall be used to reduce future Employer Matching Contributions.
3.11 RETURN OF EMPLOYER CONTRIBUTIONS.
--------------------------------
(a) EXCLUSIVE BENEFIT RULE; EXCEPTIONS THERETO. The Trust
------------------------------------------
assets shall be held by the Trustee for the exclusive purpose of providing
benefits to Participants in the Plan and their Beneficiaries and defraying
reasonable expenses of administering the Plan. No part of the Trust Fund
shall at any time inure to the benefit of a Participating Company;
provided, however, that Base Contributions, Employer Profit-Sharing
Contributions, and Employer Matching Contributions to the Trust shall be
refunded to a Participating Company, to the extent such refunds do not, in
themselves, deprive the Plan of its qualified status, under the following
circumstances and subject to the following limitations:
(1) DISALLOWANCE OF DEDUCTION. To the extent that a
-------------------------
Federal income tax deduction is claimed by a Participating Company and
is disallowed by the Internal Revenue Service for any Base
Contribution, Employer Profit-Sharing Contribution, or Employer
Matching Contribution, the Trustee shall refund to such Participating
Company the amount so disallowed, upon presentation of evidence of
disallowance and a demand by the Participating Company for such
refund. Demand and repayment must be effected within one year after
the date of disallowance.
(2) MISTAKE OF FACT. In the case of a Base Contribution,
---------------
Employer Profit-Sharing Contribution, or Employer Matching
Contribution which is made, in whole or in part, by reason of a
mistake of fact (for example, incorrect information as to the
eligibility or Compensation of a Participant, or a mathematical
error), so much of such Base Contribution, Employer Profit-Sharing
Contribution, or Employer Matching Contribution as is attributable to
the mistake of fact shall be returned to the Participating Company on
demand, upon presentation to the Trustee of evidence of the mistake of
fact and calculations as to the impact of such mistake. Demand and
repayment must be effected within one year after the date of payment
of the Base Contribution, Employer Profit-Sharing Contribution, or
Employer Matching Contribution to which the mistake applies.
(b) REFUND TO BE DEDUCTED AS INVESTMENT LOSS WITH CERTAIN
-----------------------------------------------------
EXCEPTIONS. In the event that any refund is paid to a Participating
----------
Company hereunder, such refund shall be made without interest and shall be
deducted from the Base Contribution, Employer Profit-Sharing Contribution,
and Employer Matching Contribution Accounts of the Participants as an
investment loss except to the extent that the amount of the refund can be
attributed to one or more specific Participants (as in the case of certain
mistakes of fact and disallowances of Compensation resulting in reduction
of deductible Base Contributions, Employer Profit-Sharing Contributions, or
Employer Matching Contributions) in which case the amount of the refund
attributable to each such Participant's Base Contribution, Employer Profit-
Sharing Contribution, or Employer Matching Contribution Account shall be
deducted directly from such Base Contribution, Employer Profit-Sharing
Contribution, or Employer Matching Contribution Account.
(c) LIMITATIONS ON REFUNDS. Notwithstanding any other
----------------------
provisions of this Section 3.11, no refund shall be made to a Participating
Company:
(1) To the extent such refund is specifically chargeable to
the Base Contribution, Employer Profit-Sharing Contribution, or
Employer Matching
-16-
<PAGE>
Contribution Account(s) of any Participant(s) in excess of 100 percent
of the amount in such Account(s);
(2) If the amount otherwise subject to refund hereunder has
been distributed to Participants and/or their Beneficiaries (in which
case the Participating Company shall have a claim directly against the
distributees to the extent of the refund to which it is entitled);
(3) To the extent the amount is not in excess of the amount
which would have been contributed had no mistake of fact or mistake in
determining the deduction occurred (in which case the amount subject
to refund shall be limited to the excess of (i) the amount of the Base
Contribution, Employer Profit-Sharing Contribution, or Employer
Matching Contribution, over (ii) the amount that the Employer would
have contributed had there not occurred a mistake of fact or a mistake
in determining the amount of the deduction);
(4) Of earnings attributable to the excess Base
Contribution, Employer Profit-Sharing Contribution, or Employer
Matching Contribution;
(5) To the extent there are losses attributable to the
amount subject to refund (in which case the losses shall reduce the
amount to be returned); and
(6) To the extent the amount subject to refund would cause
the balance of the Base Contribution, Employer Profit-Sharing
Contribution, or Employer Matching Contribution Account of any
Participant to be reduced to less than the balance which would have
been in such Base Contribution, Employer Profit-Sharing Contribution,
or Employer Matching Contribution Account had the amount subject to
refund not been contributed (in which case the amount to be refunded
to the Employer shall be limited so as to avoid such reduction).
(d) FURTHER LIMITATIONS ON REFUNDS. All refunds under this
------------------------------
Section 3.11 shall be limited in amount, circumstance and timing as
required by section 403(c) of ERISA, and no such refund shall be made if,
solely on account of such refund, the Plan would cease to be a qualified
plan under section 401(a) of the Code or to meet the requirements of
section 401(k) of the Code.
3.12 EMPLOYEE CONTRIBUTIONS. No voluntary Employee contributions to
----------------------
the Plan are required or are permitted.
3.13 EMPLOYEE AFTER-TAX CONTRIBUTIONS. No Employee After-Tax
--------------------------------
Contributions shall be permitted.
3.14 EMPLOYER AFTER-TAX MATCHING CONTRIBUTIONS. No Employer After-Tax
-----------------------------------------
Matching Contributions shall be permitted.
ARTICLE IV
LIMITATIONS ON CONTRIBUTIONS
----------------------------
4.1 DEFINITIONS. For purposes of this Article IV, the following
-----------
additional definitions shall apply:
(a) "ACP TEST" shall mean the Actual Contribution Percentage
----------
test set forth in Section 4.8(a).
(b) "ACTUAL CONTRIBUTION PERCENTAGE" (ACP) shall mean the
--------------------------------------
average of the Actual Contribution Ratios of the Eligible Participants in a
group.
-17-
<PAGE>
(c) "ACTUAL CONTRIBUTION RATIO" shall mean the ratio (expressed
---------------------------
as a percentage) of the Participant's Contribution Percentage Amounts to
the Participant's Applicable Compensation for the Plan Year . The Committee
may elect, for any Plan Year, to take into account for any Participant only
Applicable Compensation received while a Plan Participant.
(d) "ACTUAL DEFERRAL PERCENTAGE" (ADP) shall mean the average of
----------------------------------
the Actual Deferral Ratios of the Eligible Participants in a group.
(e) "ACTUAL DEFERRAL RATIO" shall mean the ratio (expressed as a
-----------------------
percentage) of a Participant's Elective Deferrals and any Employer
contributions treated as Elective Deferrals for purposes of Section 4.6(a)
made under the Plan on behalf of the Participant for the Plan Year to the
Participant's Applicable Compensation for such Plan Year. The Committee
may elect, for any Plan Year, to take into account for any Participant only
Applicable Compensation received while a Plan Participant. Employer
contributions on behalf of any Participant shall include any Elective
Deferrals made pursuant to the Participant's deferral election, including
Excess Elective Deferrals (as described in Section 3.10(c)(2)) of Highly
Compensated Employees, but excluding Excess Elective Deferrals of Non-
Highly Compensated Employees that arise solely from Elective Deferrals made
under the Plan or plans of the Employer and Elective Deferrals that are
taken into account in the ACP Test (provided the ADP Test is satisfied both
with and without exclusion of these Elective Deferrals). For purposes of
computing Actual Deferral Percentages, an Employee who would be a
Participant but for failure to make Elective Deferrals shall be treated as
a Participant on whose behalf no Elective Deferrals are made.
(f) "ADP TEST" shall mean the Actual Deferral Percentage test
--------
set forth in Section 4.6(a).
(g) "AGGREGATE LIMIT" shall mean the greater of:
---------------
(1) The sum of:
(i) 1.25 times the greater of (AA) the Relevant
Actual Deferral Percentage or (BB) the Relevant Actual
Contribution Percentage; and
(ii) Two percentage points plus the lesser of the
Relevant Actual Deferral Percentage or the Relevant Actual
Contribution Percentage, but in no event shall this amount exceed
twice the lesser of the Relevant Actual Deferral Percentage or
the Relevant Actual Contribution Percentage; or
(2) The sum of:
(i) 1.25 times the lesser of (AA) the Relevant
Actual Deferral Percentage or (BB) the Relevant Actual
Contribution Percentage; and
(ii) Two percentage points plus the greater of the
Relevant Actual Deferral Percentage or the Relevant Actual
Contribution Percentage, but in no event shall this amount exceed
twice the greater of the Relevant Actual Deferral Percentage or
the Relevant Actual Contribution Percentage.
(h) "ANNUAL ADDITION" shall mean the amounts allocated to a
---------------
Participant's accounts during the Limitation Year that constitute:
(1) Employer contributions (other than Excess Elective
Deferrals distributed in accordance with Treas. Reg. (S) 1.402(g)-
1(e)(2) or (3));
(2) Employee contributions;
(3) Forfeitures;
-18-
<PAGE>
(4) Amounts allocated, after March 31, 1984, to an
individual medical benefit account, as defined in section 415(l)(2) of
the Code, which is part of a pension or annuity plan maintained by the
Employer;
(5) Amounts derived from contributions paid or accrued
after December 31, 1985, in taxable years ending after that date,
which are attributable to post-retirement medical benefits, allocated
to the separate account of a key employee, as defined in section
419A(d)(3) of the Code, under a Welfare Benefit Fund maintained by the
Employer;
(6) Allocations under a simplified employee pension; and
(7) Any Excess Amount applied under Section 4.2(b) or
4.3(d) in the Limitation Year to reduce Employer contributions for
such Limitation Year.
(i) "APPLICABLE COMPENSATION" shall mean Limitation Compensation
-------------------------
for the Plan Year for which a determination is being made under Section 4.6
and/or 4.8 plus any amount which is not includible in an Employee's gross
income by reason of the application of section 125, 402(e)(3),
402(h)(1)(B), or 403(b) of the Code.
(j) "CONTRIBUTION PERCENTAGE AMOUNTS" shall mean the sum of
---------------------------------
Employee Contributions (none are permitted) and Employer Matching
Contributions made under the Plan on behalf of the Participant for the Plan
Year. Such Contribution Percentage Amounts shall not include Employer
Matching Contributions that are forfeited either to correct Excess
Aggregate Contributions or because the contributions to which they relate
are Excess Elective Deferrals, Excess Contributions, or Excess Aggregate
Contributions. The Employer also may elect to treat Elective Deferrals as
Contribution Percentage Amounts so long as the requirements of Section
4.6(a) are met both with and without the inclusion of Elective Deferrals
which are treated as Contribution Percentage Amounts.
(k) "DEFINED BENEFIT PLAN" shall mean any Employee Pension
----------------------
Benefit Plan which is not a Defined Contribution Plan.
(l) "DEFINED CONTRIBUTION DOLLAR LIMITATION" shall mean $30,000,
----------------------------------------
as adjusted by the Secretary of the Treasury pursuant to section 415(d) of
the Code.
(m) "DEFINED CONTRIBUTION PLAN" shall mean any Employee Pension
---------------------------
Benefit Plan which provides for an individual account for each Participant
and for benefits based solely upon the amount contributed to the
Participant's account and any income, expenses, gains, and losses, and any
forfeitures of accounts of other Participants which may be allocated to
such Participant's account.
(n) "ELECTIVE DEFERRALS" shall have the meaning set forth in
--------------------
Section 3.10(c)(1).
(o) "ELIGIBLE PARTICIPANT" shall mean any Employee of an
----------------------
Employer who is eligible to make an Employee Contribution (none are
permitted) or an Elective Deferral under the Plan (if the Employer treats
Elective Deferrals as Contribution Percentage Amounts), or to receive an
Employer Matching Contribution (including forfeitures). If an Elective
Deferral or Employee Contribution is required as a condition of
participation in the Plan, any Employee who would be a Participant in the
Plan if such Employee made such an Elective Deferral or Employee
Contribution shall be treated as an Eligible Participant on behalf of whom
no Elective Deferrals or Employee Contributions are made.
(p) "EMPLOYEE PENSION BENEFIT PLAN" shall mean any plan
-------------------------------
described in section 415(k)(1) of the Code.
(q) "EMPLOYEE CONTRIBUTION" shall mean any contribution made to
-----------------------
the Plan by or on behalf of a Participant that is included in the
Participant's gross income in the year in
-19-
<PAGE>
which made and is maintained under a separate account to which earnings and
losses are allocated. This Plan does not permit Employee Contributions.
(r) "EXCESS AGGREGATE CONTRIBUTIONS" shall mean, with respect to
--------------------------------
any Plan Year, the excess of:
(1) The aggregate Contribution Percentage Amounts actually
taken into account in computing the Actual Contribution Ratio of a
Highly Compensated Employee for such Plan Year; over
(2) The maximum Contribution Percentage Amounts permitted
by the ACP Test (determined by reducing contributions made on behalf
of Highly Compensated Employees in order of their Actual Contribution
Ratios, beginning with the highest of such Actual Contribution
Ratios).
Such determination shall be made after first determining Excess Elective
Deferrals under Section 3.10 and then determining Excess Contributions
under Section 4.7.
(s) "EXCESS AMOUNT" shall mean the excess of the Participant's
---------------
Annual Additions over the Maximum Permissible Amount, less loading and
other administrative charges allocable to such excess.
(t) "EXCESS CONTRIBUTIONS" shall mean, with respect to any Plan
----------------------
Year, the excess of:
(1) The aggregate amount of Elective Deferrals and any
Employer contributions actually taken into account under Section
4.1(e) in computing the Actual Deferral Ratio of a Highly Compensated
Employee for such Plan Year; over
(2) The maximum amount of such Elective Deferrals and
Employer contributions permitted by the ADP Test (determined by
reducing contributions made on behalf of Highly Compensated Employees
in order of their Actual Deferral Ratios, beginning with the highest
of such Actual Deferral Ratios).
(u) "FAMILY MEMBER" shall mean an individual described in
---------------
section 414(q)(6)(B) of the Code.
(v) "LIMITATION YEAR" shall mean the 12-consecutive-month period
-----------------
ending on December 31.
(w) "MAXIMUM PERMISSIBLE AMOUNT" shall mean the maximum Annual
----------------------------
Addition that may be contributed or allocated to a Participant's accounts
for any Limitation Year, which maximum is the lesser of:
(1) The Defined Contribution Dollar Limitation; or
(2) 25 percent of the Participant's Limitation Compensation
for the Limitation Year.
The Limitation Compensation limitation referred to in Section
4.1(w)(2) shall not apply to any contribution for medical benefits (within
the meaning of section 419A(f)(2) of the Code) after separation from
service which is otherwise treated as an Annual Addition or any amount
otherwise treated as an Annual Addition under section 415(l)(1) of the
Code.
If a short Limitation Year is created because of an amendment
changing the Limitation Year to a different Computation 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
---------------------------------------------
-20-
<PAGE>
12
(x) "NON-HIGHLY COMPENSATED EMPLOYEE" shall mean an Employee of
---------------------------------
an Employer who is neither a Highly Compensated Employee nor a Family
Member.
(y) "RELEVANT ACTUAL CONTRIBUTION PERCENTAGE" shall mean the
-----------------------------------------
Actual Contribution Percentage of the group of Non-Highly Compensated
Employees eligible under the plan subject to section 401(m) of the Code for
the plan year beginning with or within the plan year of the arrangement
subject to section 401(k) of the Code.
(z) "RELEVANT ACTUAL DEFERRAL PERCENTAGE" shall mean the Actual
-------------------------------------
Deferral Percentage of the group of Non-Highly Compensated Employees
eligible under the arrangement subject to section 401(k) of the Code for
the plan year.
(aa) "WELFARE BENEFIT FUND" shall mean a welfare benefit fund as
----------------------
defined in section 419(e) of the Code.
4.2 LIMITATION APPLICABLE WHERE NO OTHER EMPLOYEE PENSION BENEFIT
-------------------------------------------------------------
PLAN, WELFARE BENEFIT FUND, INDIVIDUAL MEDICAL BENEFIT ACCOUNT, OR SIMPLIFIED
- -----------------------------------------------------------------------------
EMPLOYEE PENSION MAINTAINED.
- ---------------------------
(a) BASIC LIMITATION. If the Participant does not participate
----------------
in, and has never participated in, any other Employee Pension Benefit Plan
maintained by the Employer, Welfare Benefit Fund maintained by the
Employer, an individual medical benefit account, as defined in section
415(l)(2) of the Code, maintained by the Employer, or simplified employee
pension, as defined in section 408(k) of the Code, maintained by the
Employer, that provides an Annual Addition by the Employer, the amount of
the Annual Additions which may be allocated under this Plan to such
Participant's accounts during any Limitation Year shall not exceed the
lesser of the Maximum Permissible Amount or any other limitation contained
in the Plan.
(b) DISPOSITION OF EXCESS AMOUNTS. If, as a result of a
-----------------------------
reasonable error in estimating a Participant's annual Limitation
Compensation, or as a result of the allocation of forfeitures, or under
other limited facts and circumstances satisfactory to the Commissioner of
Internal Revenue, there is an Excess Amount with respect to a Participant
for a Limitation Year, such Excess Amount shall be disposed of as follows:
(1) Any Employee Contributions, to the extent they would
reduce the Excess Amount, shall be returned to the Participant.
(2) If, after the application of Section 4.2(b)(1), an
Excess Amount still exists, and the Participant is covered by the Plan
at the end of the Limitation Year, the Excess Amount in the
Participant's Account(s) shall not be distributed to the Participant,
but shall be reapplied to reduce future Employer contributions
(including any allocation of forfeitures) under this Plan for the next
Limitation Year (and for each succeeding Limitation Year as necessary)
for such Participant.
(3) If, after the application of Section 4.2(b)(1), an
Excess Amount still exists, and the Participant is not covered by the
Plan at the end of a Limitation Year, the Excess Amount shall not be
distributed to the Participant but shall be held unallocated in a
suspense account. The suspense account shall be applied to reduce
future Employer contributions for all remaining Participants in the
next Limitation Year and each succeeding Limitation Year, if
necessary.
If a suspense account is in existence at any time during a
Limitation Year pursuant to this Section 4.2(b)(3), it shall not
participate in the allocation of the Trust's investment gains and
losses. If a suspense account is in existence at any time during a
particular Limitation Year, all amounts in the suspense account must
be allocated and reallocated to Participants' accounts before any
Employer contributions
-21-
<PAGE>
or any Employee contributions may be made to the Plan for that
Limitation Year. Excess amounts may not be distributed to Participants
or former Participants.
(4) Upon termination of this Plan, any Excess Amounts which
cannot be allocated pursuant to this Section 4.2(b) shall revert to
the Employer.
4.3 MULTI-PLAN LIMITATIONS FOR ADDITIONAL DEFINED CONTRIBUTION PLANS,
-----------------------------------------------------------------
WELFARE BENEFIT FUNDS, INDIVIDUAL MEDICAL BENEFIT ACCOUNTS, AND SIMPLIFIED
- --------------------------------------------------------------------------
EMPLOYEE PENSIONS.
- -----------------
(a) LIMITATION. If, in addition to this Plan, the Employer
----------
maintains or has maintained any other Defined Contribution Plan, Welfare
Benefit Fund, individual medical benefit account, as defined in section
415(l)(2) of the Code, or simplified employee pension that provides an
Annual Addition during any Limitation Year in which a Participant
participates the Annual Additions which may be allocated under this Plan to
such Participant's Accounts for any such Limitation Year shall not exceed
the lesser of:
(1) The Maximum Permissible Amount reduced by the sum of
any Annual Additions allocated to such Participant's accounts under
such other Defined Contribution Plan or Plans and under such Welfare
Benefit Fund or Funds and under such individual medical benefit
account or accounts and under such simplified employee pension for
such Limitation Year; or
(2) Any other limitation contained in this Plan.
If the Annual Additions with respect to the Participant under
other Defined Contribution Plans and Welfare Benefit Funds maintained by
the Employer are less than the Maximum Permissible Amount and the Employer
contribution that would otherwise be contributed or allocated to the
Participant's Accounts 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 will 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 Accounts under this
Plan for the Limitation Year.
(b) ORDER OF DETERMINING EXCESS AMOUNTS. If a Participant's
-----------------------------------
Annual Additions result in an Excess Amount, for the reasons set forth in
Section 4.2(b) above, such Excess Amount shall be deemed to consist of the
amounts last allocated, except that Annual Additions attributable to a
Welfare Benefit Fund or individual medical benefit account shall be deemed
to have been allocated first regardless of the actual allocation date.
(c) SIMULTANEOUS ALLOCATION OF EXCESS AMOUNTS. If an Excess
-----------------------------------------
Amount was allocated to a Participant on an allocation date of this Plan
which coincides with an allocation date of another Defined Contribution
Plan, the Excess Amount attributed to this Plan shall be the product of:
(1) The total Excess Amount allocated as of such date
(including any amount which would have been allocated but for the
limitations of section 415 of the Code); multiplied by
(2) The ratio of (i) the total Annual Additions allocated
to the Participant for the Limitation Year as of such date under this
Plan, divided by (ii) the total amount allocated as of such date under
this Plan and all the other Defined Contribution Plans (determined
without regard to the limitations of section 415 of the Code).
(d) DISPOSITION OF EXCESS AMOUNTS. Any Excess Amounts
-----------------------------
attributed to this Plan shall be disposed of in accordance with Section
4.2(b).
-22-
<PAGE>
4.4 MULTI-PLAN LIMITATIONS FOR ADDITIONAL PLAN WHICH IS A DEFINED
-------------------------------------------------------------
BENEFIT PLAN.
- ------------
(a) LIMITATION. If, in addition to this Plan, the Employer
----------
maintains or has maintained another plan which is a Defined Benefit Plan,
and a Participant under this Plan is also covered by such Defined Benefit
Plan, the amount of the Annual Additions which may be allocated to such
Participant's Accounts under this Plan shall not exceed the limitations in
Sections 4.2 and 4.3 and, in addition, shall be reduced to the extent
necessary to prevent the decimal equivalent of the sum of the "Defined
Benefit Fraction" and of the "Defined Contribution Fraction" with respect
to such Participant for any Limitation Year beginning after December 31,
1982, from exceeding 1.0.
(b) ORDER OF ANNUAL ADDITIONS REDUCTIONS. If, as a result of
------------------------------------
this Section 4.4, the amount of the Annual Additions which may be allocated
to the Accounts of any Participant under this Plan is reduced for any
Limitation Year, then the Employer Profit-Sharing Contributions, the
Employer Matching Contributions and the Base Contributions (in that order)
on behalf of such Participant for such Limitation Year shall be reduced.
(c) TREATMENT OF ANNUAL ADDITIONS REDUCTIONS. If, as a result
----------------------------------------
of this Section 4.4, the amount of the Annual Additions which may be
allocated under this Plan to any Participant's Accounts for any Limitation
Year is reduced, such reduction shall be treated as an Excess Amount and
disposed of in accordance with Section 4.2(b).
(d) DEFINITIONS. The following additional definitions apply for
-----------
purposes of this Section 4.4:
(1) "DEFINED BENEFIT FRACTION" shall mean a fraction, the
--------------------------
numerator of which is the sum of the Participant's Projected Annual
Benefits under all the Defined Benefit Plans (whether or not
terminated) maintained by the Employer, and the denominator of which
is the lesser of 125 percent of the dollar limitation determined for
the Limitation Year under sections 415(b) and 415(d) of the Code or
140 percent of the Participant's Highest Average Compensation,
including any adjustments under section 415(b) of the Code.
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 Employer 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 Defined Benefit Plan after May 5, 1986. The preceding sentence
applies only if the Defined Benefit Plans individually and in the
aggregate satisfied the requirements of section 415 of the Code for
all Limitation Years beginning before January 1, 1987.
(2) "DEFINED CONTRIBUTION FRACTION" shall mean a fraction,
-------------------------------
the numerator of which is the sum of the Annual Additions to the
Participant's account under all the Defined Contribution Plans
(whether or not terminated) maintained by the Employer for the current
and all prior Limitation Years (including the Annual Additions
attributable to the Participant's nondeductible employee contributions
to all Defined Benefit Plans, whether or not terminated, maintained by
the Employer, and the Annual Additions attributable to all Welfare
Benefit Funds or individual medical benefit accounts (as defined in
section 415(l)(2) of the Code) and simplified employee pensions
maintained by the Employer), and the denominator of which is the sum
of the maximum aggregate amounts for the current and all prior
Limitation Years of service with the Employer (regardless of whether a
Defined Contribution Plan was maintained by the Employer). The maximum
aggregate amount in any Limitation Year is the lesser of 125 percent
of the dollar limitation determined under sections 415(b) and 415(d)
of the Code in effect under section 415(c)(1)(A) of the Code or 35
percent of the Participant's Limitation Compensation for such
Limitation Year.
-23-
<PAGE>
If the Employee was a Participant as of the end of the first
day of the first Limitation Year beginning after December 31, 1986, in
one or more Defined Contribution Plans maintained by the Employer
which were in existence on May 6, 1986, the numerator of this fraction
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 (i) the excess
of the sum of the fractions over 1.0 times (ii) 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 5, 1986, but using the
section 415 limitation applicable to the first Limitation Year
beginning on or after January 1, 1987.
The Annual Addition for any Limitation Year beginning before
January 1, 1987, shall not be recomputed to treat all Employee
contributions as Annual Additions.
(3) "HIGHEST AVERAGE COMPENSATION" shall mean the average
------------------------------
compensation for the three consecutive Accrual Computation Periods
with the Employer that produce the highest average.
(4) "PROJECTED ANNUAL BENEFIT" shall mean 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 will continue employment until
normal retirement age 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 will remain constant for all future
Limitation Years.
4.5 AGGREGATION RULES. For purposes of applying the limitations of
-----------------
Sections 4.2 through 4.4, the Sponsoring Company and all Affiliated Companies
shall be considered as a single employer.
4.6 ADDITIONAL LIMITATIONS ON ELECTIVE DEFERRALS (BASE
--------------------------------------------------
CONTRIBUTIONS).
- ---------------
(a) ACTUAL DEFERRAL PERCENTAGE TEST. The Actual Deferral
-------------------------------
Percentage (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 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 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 percentage
points.
(b) SPECIAL RULES. The following special rules apply:
-------------
-24-
<PAGE>
(1) MULTIPLE CODAS TREATED AS SINGLE CODA. In determining
-------------------------------------
the ADP for Highly Compensated Employees, the Actual Deferral Ratio
for any Participant who is a Highly Compensated Employee for the Plan
Year and who is eligible to have Elective Deferrals allocated to his
accounts under two or more cash or deferred arrangements described in
section 401(k) of the Code (CODAs) that are maintained by the Employer
shall be determined as if such Elective Deferrals were made under a
single CODA. If a Highly Compensated Employee participates in two or
more CODAs that have different Plan Years, all CODAs ending with or
within the same calendar year shall be treated as a single CODA.
Notwithstanding the foregoing, certain plans shall be treated as
separate if mandatorily disaggregated pursuant to Treasury regulations
under section 401(k) of the Code.
(2) AGGREGATION. In the event that this Plan satisfies the
-----------
requirements of section 401(k), 401(a)(4), or 410(b) of the Code only
if aggregated with one or more other plans, or if one or more other
plans satisfy the requirements of such sections of the Code only if
aggregated with this Plan, then this Section 4.6 shall be applied by
determining the ADP of Employees as if all such plans were a single
plan. Plans may be aggregated in order to satisfy section 401(k) of
the Code only if they have the same Plan Year.
(3) FAMILY AGGREGATION. For purposes of determining the
------------------
ADP of Participants who are Highly Compensated Employees, the Elective
Deferrals and Applicable Compensation of any such Participants who are
five-percent owners or among the ten most highly paid Highly
Compensated Employees shall include the Elective Deferrals and
Applicable Compensation for the Plan Year of Family Members of such
Participants. 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.
(4) TIMING. For purposes of the ADP Test, Elective
------
Deferrals must be made before the last day of the 12-month period
immediately following the Plan Year to which the contributions relate.
(5) RECORDS. The Participating Companies shall maintain
-------
records sufficient to demonstrate satisfaction of the ADP Test.
(6) OTHER REQUIREMENTS. The determination and treatment of
------------------
the Actual Deferral Ratio of any Participant shall satisfy such other
requirements as may be prescribed by the Secretary of the Treasury.
4.7 DISTRIBUTION OF EXCESS CONTRIBUTIONS.
------------------------------------
(a) IN GENERAL. Notwithstanding any other provision of the
----------
Plan, Excess Contributions, plus any income and minus any loss allocable
thereto, shall be distributed no later than the last day of each Plan Year
to Participants to whose Accounts such Excess Contributions were allocated
for the preceding Plan Year. If such Excess Contributions are distributed
more than two and one-half months after the last day of the Plan Year in
which such Excess Contributions arose, a ten-percent excise tax will be
imposed on the Participating Companies 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 of Participants who are subject to the
Family Member aggregation rules of section 414(q)(6) of the Code shall be
allocated among the Family Members in proportion to the Elective Deferrals
(and amounts treated as Elective Deferrals) of each Family Member that are
combined to determine the combined Actual Deferral Ratio. Excess
Contributions shall be treated as Annual Additions (within the meaning of
Section 4.1(h)) under the Plan.
(b) DETERMINATION OF INCOME OR LOSS. Excess Contributions shall
-------------------------------
be
-25-
<PAGE>
adjusted for any income or loss for the Plan Year in which such Excess
Contributions arose in the same manner as described in Section 5.5. The
income or loss allocable to the period between the end of the Plan Year in
which such Excess Contributions arose and the date of distribution shall be
disregarded.
(c) ACCOUNTING FOR EXCESS CONTRIBUTIONS. Excess Contributions
-----------------------------------
shall be distributed from the Participant's Elective Deferral account
(i.e., Base Contribution Account) in proportion to the Participant's
Elective Deferrals (i.e., Base Contributions) for the Plan Year.
(d) REDUCTION FOR EXCESS ELECTIVE DEFERRALS DISTRIBUTED. The
---------------------------------------------------
Excess Contributions which would otherwise be distributed to the
Participant shall be reduced, in accordance with Treasury regulations, by
the amount of Excess Elective Deferrals distributed to the Participant
under Section 3.10.
4.8 ADDITIONAL LIMITATIONS ON EMPLOYER MATCHING CONTRIBUTIONS AND
-------------------------------------------------------------
FORFEITURES.
- -----------
(a) ACTUAL CONTRIBUTION PERCENTAGE TEST. The Actual
-----------------------------------
Contribution Percentage (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:
(1) 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
(2) 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 percentage
points.
(b) SPECIAL RULES. The following special rules apply:
-------------
(1) MULTIPLE USE. If the Plan satisfies the tests
------------
described in Section 4.6(a)(2) and Section 4.8(a)(2) for a Plan Year
but does not satisfy either of the tests described in Section
4.6(a)(1) and Section 4.8(a)(1) for such Plan Year, then the sum of
the ADP (as determined under Section 4.6(a)) and the ACP (as
determined under Section 4.8(a)) for Eligible Participants who are
Highly Compensated Employees for the Plan Year shall not exceed the
Aggregate Limit. If the Aggregate Limit would otherwise be exceeded,
such excess shall be corrected by reducing the Actual Deferral Ratios
of such Eligible Participants through the distribution of Excess
Contributions under Section 4.7 and/or by reducing the Actual
Contribution Ratios of such Eligible Participants through the
distribution of Excess Aggregate Contributions under Section 4.9, at
the election of the Sponsoring Company, in accordance with Treas. Reg.
(S) 1.401(m)-2(c).
(2) MULTIPLE PLANS. The Actual Contribution Ratio for any
--------------
Participant who is a Highly Compensated Employee for the Plan Year and
who is eligible to have Contribution Percentage Amounts allocated to
his Account under two or more plans described in section 401(a) of the
Code or CODAs that are maintained by an Employer shall be determined
as if the total of such Contribution Percentage Amounts were made
under a single plan or arrangement. If a Highly Compensated Employee
participates in two or more CODAs that have different plan years, all
CODAs ending with or within the same calendar year shall be treated as
a single CODA. Notwithstanding the foregoing, certain plans shall be
treated as separate if mandatorily disaggregated pursuant to Treasury
regulations under section 401(m) of the Code.
-26-
<PAGE>
(3) AGGREGATION. In the event that this Plan satisfies the
-----------
requirements of sections 401(m), 401(a)(4) or 410(b) of the Code only
if aggregated with one or more other plans, or if one or more other
plans satisfy the requirements of such sections of the Code only if
aggregated with this Plan, then this Section 4.8 shall be applied by
determining the ACP of Employees as if all such plans were a single
plan. Plans may be aggregated in order to satisfy section 401(m) of
the Code only if they have the same plan year.
(4) FAMILY AGGREGATION. For purposes of determining the
------------------
Actual Contribution Ratio of a Participant who is a five-percent owner
or one of the ten most highly paid Highly Compensated Employees, the
Contribution Percentage Amounts and Applicable Compensation of such
Participant shall include the Contribution Percentage Amounts and
Applicable Compensation for the Plan Year of Family Members. Such
Family Members 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.
(5) TIMING. For purposes of the ACP Test, Employee
------
Contributions are considered to have been made in the Plan Year in
which contributed to the Trust. Employer Matching Contributions shall
be considered made for a Plan Year only if made no later than the end
of the 12-month period beginning on the day after the close of the
Plan Year.
(6) RECORDS. The Employer shall maintain records
-------
sufficient to demonstrate satisfaction of the ACP Test.
(7) OTHER REQUIREMENTS. The determination and treatment of
------------------
the Actual Contribution Ratio of any Participant shall satisfy such
other requirements as may be prescribed by the Secretary of the
Treasury.
4.9 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS.
----------------------------------------------
(a) IN GENERAL. Notwithstanding any other provision of this
----------
Plan, Excess Aggregate Contributions, plus any income and minus any loss
allocable thereto, shall be forfeited, if forfeitable, or, if not
forfeitable, distributed no later than the last day of each Plan Year to
Participants to whose Accounts such Excess Aggregate Contributions were
allocated for the preceding Plan Year. If such Excess Aggregate
Contributions are distributed more than two and one-half months after the
last day of the Plan Year in which such Excess Aggregate Contributions
arose, a ten-percent excise tax will be imposed on the Participating
Companies with respect to such amounts. Such distributions shall be made
to Highly Compensated Employees on the basis of the respective portions of
the Excess Aggregate Contributions attributable to each of such Employees.
Excess Aggregate Contributions shall be allocated to Participants who are
subject to the Family Member aggregation rules of section 414(q)(6) of the
Code in proportion to the Employee Contributions and Employer Matching
Contributions (or amounts treated as Employer Matching Contributions) of
each Family Member that is combined to determine the combined Actual
Contribution Ratio. Excess Aggregate Contributions shall be treated as
Annual Additions (within the meaning of Section 4.1(h)) under the Plan.
(b) DETERMINATION OF INCOME OR LOSS. Excess Aggregate
-------------------------------
Contributions shall be adjusted for any income or loss for the Plan Year in
which some Excess Aggregate Contributions arose in the same manner as
described in Section 5.5. The income or loss allocable to the period
between the end of the Plan Year in which such Excess Aggregate
Contributions arose and the date of distribution shall be disregarded.
(c) FORFEITURES OF EXCESS AGGREGATE CONTRIBUTIONS. Forfeitures
---------------------------------------------
of Excess Aggregate Contributions shall be applied to reduce Employer
Matching Contributions.
-27-
<PAGE>
(d) ACCOUNTING FOR EXCESS AGGREGATE CONTRIBUTIONS. Excess
---------------------------------------------
Aggregate Contributions shall be forfeited, if forfeitable, or, if not
forfeitable, distributed on a pro-rata basis from the Participant's
Employee Contribution account (if any), Employer Matching Contribution
Account, and, if applicable, the Participant's Elective Deferral account
(i.e., Base Contribution Account).
ARTICLE V
PARTICIPANTS' ACCOUNTS; VALUATION
---------------------------------
5.1 SEPARATE ACCOUNTS. The Committee shall maintain within its
-----------------
records, for each Participant (other than Residents of Puerto Rico) a separate
Base Contribution Account to which Base Contributions and "Rollover
Contributions" under Section 3.7 shall be credited, a separate Supplemental
Contribution Account to which Supplemental Contributions have been credited, a
separate Employer Profit-Sharing Contribution Account to which Employer Profit-
Sharing Contributions shall be credited, and a separate Employer Matching
Contribution Account to which Employer Matching Contributions shall be credited.
The Committee shall also maintain within its records, for each Participant who
was a participant in the Prior Plan and who is a Resident of Puerto Rico, a
separate Employee After-Tax Contribution Account to which Employee After-Tax
Contributions and "Rollover Contributions" were credited under the Prior Plan
and a separate Employer After-Tax Matching Contribution Account to which
Employer After-Tax Matching Contributions were credited under the Prior Plan.
All payments to a Participant or his Beneficiaries shall be charged against the
Accounts of such Participant.
5.2 INVESTMENT OF PARTICIPANTS' ACCOUNTS. All Employee After-Tax
------------------------------------
Contributions, Employer After-Tax Matching Contributions, Base Contributions,
Employer Profit-Sharing Contributions, and Employer Matching Contributions
transferred to the Trustee from the Prior Plan shall be held by the Trustee in
one or more of the Funds set forth below, as the Participant shall direct in
accordance with Section 5.3. All future Base Contributions, Employer Profit-
Sharing Contributions, and Employer Matching Contributions shall be paid to the
Trustee and shall be held by the Trustee in one or more of the Funds set forth
below, as the Participant shall direct in accordance with Section 5.3.
(a) FUND A (Company Stock). This Fund is invested in Company
------
Stock.
(b) FUND B (Vanguard Money Market Reserves - Prime Portfolio).
------
This Portfolio invests in certificates of deposit of major U.S. banks,
prime commercial paper, high quality short-term corporate obligations, and
short-term U.S. Government and agency securities. This Portfolio maintains
$1.00 constant share value.
(c) FUND C (Vanguard Fixed Income Securities Fund - Investment
------
Grade Bond Portfolio). This Portfolio includes corporate bonds from
Moody's four highest ratings.
(d) FUND D (Vanguard Index Trust - 500 Portfolio). This
------
Portfolio matches the stock market's performance by owning all 500 stocks
of the Standard & Poor's 500 Composite Stock Price Index in proportion to
their weightings in the index.
(e) FUND E (W.L. Morgan Growth Fund). This Fund has a three-tier
------
structure that includes stocks of established growth, cyclical growth, and
emerging companies. Emphasis varies with anticipated economic trends.
(f) FUND F (Windsor I). This Fund includes common stocks of
------
companies with good fundamentals and growth potential but currently over-
looked, misunderstood or out of favor in the marketplace.
(g) FUND G (Wellington Fund). The Fund follows a diversified and
------
balanced program of investing in bonds and common stocks. The bonds are
held for relative stability of income and principal, while the common
stocks are held for potential growth of
-28-
<PAGE>
capital and income. The Fund's objectives are conservation of principal,
reasonable income return and profits without undue risks.
The Committee and the Trustee, in their sole discretion, may offer to
all Participants additional investment funds and may at any time or times cease
to offer such investment funds as they deem appropriate.
5.3 APPORTIONMENT OF PARTICIPANTS' ACCOUNTS AMONG FUNDS.
---------------------------------------------------
(a) APPORTIONMENT OF CONTRIBUTIONS. Each Participant shall, by
------------------------------
written instrument filed with the Committee before any Base Contributions,
Employer Profit-Sharing Contributions, or Employer Matching Contributions
are made, designate the Fund or Funds in which such Contributions shall be
invested. Contributions shall be invested in accordance with the
Participant's most recent such designation. The minimum percentage of each
Base Contribution, Employer Profit-Sharing Contribution, or Employer
Matching Contribution which a Participant may designate to be invested in
any Fund is 10 percent. Absent any such direction from the Participant the
amount of any Base Contribution, Employer Profit-Sharing Contribution, or
Employer Matching Contribution credited to his account shall be allocated
to Fund B.
(b) REAPPORTIONMENT OF ASSETS HELD IN FUNDS. A Participant may,
---------------------------------------
by written instrument filed with the Committee during a Benefits Selection
Period, direct that the amount credited to his Accounts (including, with
respect to Residents of Puerto Rico, Employee After-Tax Contribution
Accounts and Employer After-Tax Matching Contribution Accounts) be
reapportioned among the various Funds. Each such reapportionment direction
shall be applied to all of a Participant's Accounts, shall be made in
percentages only with a minimum reapportionment of 10 percent, and shall be
equally applied to all of a Participant's Accounts.
Any such reapportionment shall be made as soon as administratively
possible following the next Valuation Date, and shall be based on market value
on the dates on which the reapportionment transactions occur.
Regardless of any fluctuations which may occur in the relative value
of the amounts credited to a Participant in the Funds, no reapportionment shall
be made except upon the direction of the Participant, and no Participant may
direct that a reapportionment be made more frequently than permitted herein.
5.4 VALUATION. The Trustee shall, as of the close of business on
---------
each Valuation Date, cause a valuation to be made of the assets of the Trust and
of each Participant's Accounts at their current fair market value. In each such
valuation, the Trustee shall credit all income and profits realized since the
preceding Valuation Date and shall deduct all losses, costs, charges and
expenses of administering the Trust since the preceding Valuation Date, in
accordance with Section 5.5.
The Trustee shall furnish the Committee with a report of each such
valuation.
5.5 ALLOCATION OF INCREASES AND DECREASES TO BASE, EMPLOYEE AFTER-
-------------------------------------------------------------
TAX, SUPPLEMENTAL, EMPLOYER PROFIT-SHARING, EMPLOYER AFTER-TAX MATCHING, AND
- ----------------------------------------------------------------------------
EMPLOYER MATCHING CONTRIBUTION ACCOUNTS. On the basis of the valuation as of a
- ---------------------------------------
Valuation Date, the Trustee shall allocate the increase or decrease in the fair
market value of the assets of each of the Funds to the Accounts of Participants
in the proportion that the amount in each Account of each Participant investing
in such Fund bears to the total amount in the Accounts of all Participants
investing in such Fund; provided, however, that lump-sum Base Contributions made
by a Participant during a quarter (and any Employer Matching Contributions made
with respect to such Base Contributions) shall not be taken into consideration
for purposes of allocating increases.
5.6 NET VALUE OF PARTICIPANTS' ACCOUNTS. The net value of a
-----------------------------------
Participant's Accounts shall be determined as of the Valuation Date specified,
or, where no Valuation Date is specified, as of the Valuation Date coincident
with or next following the event requiring such
-29-
<PAGE>
determination.
5.7 ACCOUNTS OF PARTICIPANTS TRANSFERRED TO AN AFFILIATED COMPANY.
-------------------------------------------------------------
If a Participant is transferred to an Affiliated Company which has not adopted
the Plan, or if a participant in the Prior Plan is not in the service of a
Participating Company as an Eligible Employee on or after January 1, 1995, the
amount in the Trust which is credited to his Accounts shall continue to share in
the earnings or losses of the Trust, and such Participant's rights and
obligations with respect to such Accounts shall continue to be governed by the
provisions of the Plan and Trust Agreement.
5.8 ALLOCATION OF FORFEITURES. All amounts forfeited by separated
-------------------------
Participants of a Participating Company in accordance with Section 7.6 shall be
debited to the Employer Profit-Sharing Contribution or Employer Matching
Contribution Account (as applicable) of the respective Participants employed by
such Participating Company who are subject to such forfeitures.
Subject to the limitations of Article IV, forfeitures of amounts in a
Participant's Employer Profit-Sharing Contributions or Employer Matching
Contribution Account shall be used first to restore amounts to the Employer
Profit-Sharing Contribution Account or Employer Matching Contribution Account
(as applicable) of any Participant who has been reemployed after a separation
from service and become entitled to a restoration under Section 7.6. The
balance of any forfeitures of amounts in a Participant's Employer Profit-Sharing
Contribution Account or Employer Matching Contribution Account (as applicable)
shall be used to reduce Employer Profit-Sharing Contributions or Employer
Matching Contributions (as applicable) for the Plan Year in which such
forfeitures occur.
ARTICLE VI
BENEFITS
--------
6.1 VESTING. A Participant's interest in his Base Contribution
-------
Account, Employee After-Tax Contribution Account, and Supplemental Contribution
Account shall be fully vested (nonforfeitable) at all times. Effective January
1, 1995, a Participant's interest in his Employer After-Tax Matching
Contribution Account shall be fully vested (nonforfeitable) at all times. A
Participant's interest in his Employer Profit-Sharing Contribution Account and
Employer Matching Contribution Account shall become vested (nonforfeitable) in
accordance with the following schedule:
<TABLE>
<CAPTION>
YEARS OF VESTING SERVICE NONFORFEITABLE PERCENTAGE
------------------------ -------------------------
<S> <C>
Less than 3 0
3 20
4 40
5 60
6 80
7 or more 100
</TABLE>
6.2 NORMAL RETIREMENT BENEFITS.
--------------------------
(a) GENERAL. A Participant shall be fully vested in his Accrued
-------
Benefit when he attains his Normal Retirement Age. Subject to the
following provisions of this Section 6.2, if a Participant retires on his
Normal Retirement Date, payment of his Accrued Benefit shall begin no later
than 180 days thereafter. If the Participant continues in the
Participating Company's employ after his Normal Retirement Date, he shall
continue to be a Participant in the Plan until his actual retirement. Such
Participant shall be entitled to receive, upon actual retirement, his
Accrued Benefit as of his actual retirement date.
(b) LATEST DATE OF COMMENCEMENT OF PAYMENTS. Payment of a
---------------------------------------
Participant's normal retirement benefit shall be made in accordance with
the provisions of Article VII, and, unless the Participant elects otherwise
in writing, in no event shall commence later than the 60th day after the
latest of:
(1) The close of the Plan Year in which the Participant
attains his Normal Retirement Age;
-30-
<PAGE>
(2) The close of the Plan Year in which occurs the tenth
anniversary of the date on which the Participant commenced
participation; or
(3) The close of the Plan Year in which the Participant
terminates his employment with a Participating Company.
Notwithstanding the preceding sentence, the failure of a Participant to consent
to a distribution while a benefit is immediately distributable within the
meaning of Section 7.1(a) of the Plan shall be deemed to be an election to defer
commencement of payment of any benefit sufficient to satisfy the preceding
sentence.
(c) INABILITY TO LOCATE PARTICIPANT OR DETERMINE AMOUNT OF
------------------------------------------------------
DISTRIBUTION. If the amount of payment required otherwise to commence on a
------------
date determined under this Section 6.2 or under any other Section of the
Plan cannot be ascertained by such date or if the Committee is unable to
locate a Participant or Beneficiary after making reasonable efforts to do
so, a payment retroactive to such date may be made no later than 60 days
after the later of:
(1) The earliest date on which the amount of such payment
can be ascertained under the Plan; or
(2) The earliest date on which the Participant or
Beneficiary is located.
6.3 DEATH BENEFIT. Upon the death of a Participant while in the
-------------
employ of a Participating Company or on authorized leave of absence, his Accrued
Benefit shall be fully vested, and his designated Beneficiary shall be entitled
to receive a benefit equal to such Accrued Benefit, as determined in accordance
with the provisions of Section 5.6. Upon the death of a former Participant
before distribution of his Vested Accrued Benefit has commenced, his designated
Beneficiary shall be entitled to receive a benefit equal to the Participant's
Vested Accrued Benefit. Such death benefit shall be paid in accordance with the
provisions of Article VII.
6.4 DISABILITY BENEFIT. If, prior to his Normal Retirement Date, a
------------------
Participant in the service of a Participating Company suffers a Disability, such
Participant shall become fully vested in his Accrued Benefit and shall be
entitled to receive such Accrued Benefit. Such Disability benefit shall be paid
in accordance with the provisions of Article VII.
6.5 EARLY RETIREMENT AND OTHER TERMINATION OF EMPLOYMENT. A
----------------------------------------------------
Participant who reaches his Early Retirement Date while employed by a
Participating Company shall be fully vested in his Accrued Benefit and may
retire as of his Early Retirement Date or the first day of any month thereafter
which is prior to his Normal Retirement Date and shall be entitled to receive
his Accrued Benefit. If a Participant's employment with a Participating Company
is terminated prior to his Early or Normal Retirement Date for any reason other
than death or Disability, such Participant shall be entitled to receive his
Vested Accrued Benefit. All benefits payable under this Section 6.5 shall be
paid in accordance with the provisions of Article VII.
ARTICLE VII
PAYMENT OF BENEFITS
-------------------
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<PAGE>
7.1 RETIREMENT, DEATH, DISABILITY AND TERMINATION BENEFITS.
------------------------------------------------------
(a) DISTRIBUTION. Except as provided in the next succeeding
------------
sentence, the Committee shall make distribution of the benefits payable to
a Participant or his Beneficiary upon his death, retirement, Disability or
other termination of employment, based upon his Vested Accrued Benefit as
of the Valuation Date immediately preceding the date on which distribution
is made or commences (based on the Participant's Years of Vesting Service
as of the date of such Participant's death, retirement, Disability, or
other termination of employment). Notwithstanding the preceding sentence,
if the present value (i.e., the amount in the Participant's Accounts) of
the Participant's Vested Accrued Benefit exceeds (or at the time of any
prior distribution exceeded) $3,500, and the Vested Accrued Benefit is
immediately distributable, the Participant must consent to any distribution
of such Vested Accrued Benefit. If a Participant separates from service
prior to his Early or Normal Retirement Date with a Vested Accrued Benefit
the present value of which exceeds (or at the time of any prior
distribution exceeded) $3,500, and such Participant does not consent to
distribution of his Vested Accrued Benefit, no distribution shall be made
until the Participant does so consent but in no event shall distribution be
made later than the earlier of the Participant's Normal Retirement Date, or
the Participant's death. No consent is required for distribution to be made
upon the Participant's Normal Retirement Date or death, if earlier. The
consent of the Participant shall be obtained in writing within the 90-day
period ending on the annuity starting date. The annuity starting date is
the first day of the first period for which an amount is paid in any form
under the Plan. The Committee shall notify the Participant of the right to
defer any distribution until the Participant's Vested Accrued Benefit is no
longer immediately distributable.
Such notification shall include a general description of the
material features, and an explanation of the relative values of, the
optional forms of benefit available under the Plan in a manner that would
satisfy the notice requirements of section 417(a)(3) of the Code and shall
be provided no less than 30 days and no more than 90 days prior to the
annuity starting date. The consent of the Participant shall not be
required to the extent that a distribution is required to satisfy section
401(a)(9) or 415 of the Code. Moreover, if the distribution is one to
which sections 401(a)(11) and 417 of the Code do not apply, such
distribution may commence less than 30 days after the notice required under
Treas. Reg. (S) 1.411(a)-11(c) is given, provided that:
(1) The Committee clearly informs the Participant that the
Participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not to
elect a distribution (and, if applicable, a particular distribution
option); and
(2) The Participant, after receiving the notice,
affirmatively elects a distribution.
In addition, upon termination of the Plan, if the Plan does not
offer an annuity option (purchased from a commercial provider), the
Participant's Accrued Benefit may, without the Participant's consent, be
distributed to the Participant if the Employer does not maintain another
Defined Contribution Plan (other than an employee stock ownership plan as
defined in section 4975(e)(7) of the Code). If the Employer does maintain
another such Defined Contribution Plan, the Participant's Accrued Benefit
may be transferred to such other plan without his consent if he does not
consent to an immediate distribution from this Plan, as provided in Treas.
Reg. (S) 1.411(a)-11(e). An Accrued Benefit is immediately distributable
if any part of the Accrued Benefit could be distributed to the Participant
before the Participant attains (or would have attained if not deceased) the
later of Normal Retirement Age or age 62.
(b) DEFERRAL. A Participant may elect the deferral of the
--------
payment of benefits upon retirement on or after his Normal Retirement Date
by submitting to the Committee a written statement, signed by such
Participant, describing the benefit and the date on which payment of such
benefit shall commence. Such statement must be filed with the Committee no
later than 30 days prior to such Participant's termination of employment on
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<PAGE>
or after his Normal Retirement Date.
(c) MINIMUM DISTRIBUTION RULES. The following minimum
--------------------------
distribution rules apply on and after January 1, 1984:
(1) GENERAL RULES. The requirements of this Section 7.1(c)
-------------
shall apply to any distribution of a Participant's interest and shall
take precedence over any inconsistent provisions of this Plan. All
distributions required under this Section 7.1(c) shall be determined
and made in accordance with the proposed Treasury regulations under
section 401(a)(9) of the Code, including the minimum distribution
incidental benefit requirement of Prop. Treas. Reg. (S) 1.401(a)(9)-2.
(2) REQUIRED BEGINNING DATE. The entire interest of a
-----------------------
Participant must be distributed or begin to be distributed no later
than the Participant's Required Beginning Date.
(3) LIMITS ON DISTRIBUTION PERIODS. As of the first
------------------------------
Distribution Calendar Year, distributions, if not made in a single
sum, may only be made over one of the following periods (or a
combination thereof):
(i) A period certain not extending beyond the Life
Expectancy of the Participant; or
(ii) A period certain not extending beyond the Joint
and Last Survivor Expectancy of the Participant and a Designated
Beneficiary.
(4) DETERMINATION OF AMOUNT TO BE DISTRIBUTED EACH YEAR. If
---------------------------------------------------
the Participant's interest is to be distributed in other than a single
sum, the following minimum distribution rules shall apply on or after
the Required Beginning Date:
(i) INDIVIDUAL ACCOUNT.
------------------
(A) If a Participant's Benefit is to be
distributed over (AA) a period not extending beyond the Life
Expectancy of the Participant or the Joint Life and Last
Survivor Expectancy of the Participant and the Participant's
Designated Beneficiary or (BB) a period not extending beyond
the Life Expectancy of the Designated Beneficiary, the
amount required to be distributed for each calendar year,
beginning with distributions for the first Distribution
Calendar Year, must at least equal the quotient obtained by
dividing the Participant's Benefit by the Applicable Life
Expectancy.
(B) The amount to be distributed each year,
beginning with distributions for the first Distribution
Calendar Year, shall not be less than the quotient obtained
by dividing the Participant's Benefit by the lesser of (AA)
the Applicable Life Expectancy or (BB) if the Participant's
spouse is not the Designated Beneficiary, the applicable
divisor determined from the table set forth in Q&A-4 of
Prop. Treas. Reg. (S) 1.401(a)(9)-2. Distributions after
the death of the Participant shall be distributed using the
Applicable Life Expectancy in Section 7.1(c)(4)(i)(A) as the
relevant divisor without regard to Prop. Treas. Reg. (S)
1.401(a)(9)-2.
(C) The minimum distribution required for the
Participant's first Distribution Calendar Year must be made
on or before the Participant's Required Beginning Date. The
minimum distribution for other calendar years, including the
minimum distribution for the Distribution Calendar Year in
which the Employee's Required Beginning Date occurs, must be
made on or before
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<PAGE>
December 31 of that Distribution Calendar Year.
(ii) OTHER FORMS. If the Participant's Benefit is
-----------
distributed in the form of an annuity purchased from an insurance
company, distributions thereunder shall be made in accordance
with the requirements of section 401(a)(9) of the Code and the
proposed Treasury regulations thereunder.
(5) DEATH DISTRIBUTION PROVISIONS.
-----------------------------
(i) DISTRIBUTION BEGINNING BEFORE DEATH. If the
-----------------------------------
Participant dies after distribution of his interest has begun,
the remaining portion of such interest shall continue to be
distributed at least as rapidly as under the method of
distribution being used prior to the Participant's death.
(ii) DISTRIBUTION BEGINNING AFTER DEATH. If the
----------------------------------
Participant dies before distribution of his interest begins,
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 (AA) December 31 of the calendar
year immediately following the calendar year in which the
Participant died or (BB) December 31 of the calendar year in
which the Participant would have attained age 70-1/2.
If the Participant has not made an election pursuant to
this Section 7.1(c)(5)(ii) by the time of his death, the
Participant's Designated Beneficiary must elect the method of
distribution no later than the earlier of December 31 of the
calendar year in which distributions would be required to begin
under this Section 7.1, or 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.
(iii) DEATH OF SURVIVING SPOUSE PRIOR TO BENEFIT
------------------------------------------
COMMENCE-MENT. For purposes of Section 7.1(c)(5)(ii), if the
-------------
surviving spouse dies after the Participant, but before payments
to such spouse begin, the provisions of Section 7.1(c)(5)(ii),
with the exception of Section 7.1(c)(5)(ii)(B), shall be applied
as if the surviving spouse were the Participant.
(iv) TREATMENT OF AMOUNTS PAID TO CHILDREN. For
-------------------------------------
purposes of this Section 7.1(c)(5), any amount paid to a child of
the Participant shall be treated as if it had been paid to the
surviving spouse if the amount becomes payable when the child
reaches the age of majority.
(v) DEEMED BENEFIT COMMENCEMENT. For purposes of
---------------------------
this Section 7.1(c)(5), distribution of a Participant's interest
is considered to begin
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<PAGE>
on the Participant's Required Beginning Date (or, if Section
7.1(c)(5)(iii) is applicable, the date distribution is required
to begin to the surviving spouse pursuant to Section
7.1(c)(5)(ii)). 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.
(6) DEFINITIONS. The following additional definitions apply
-----------
to this Section 7.1(c):
(i) "APPLICABLE LIFE EXPECTANCY" shall mean the Life
----------------------------
Expectancy (or Joint and Last Survivor Expectancy) calculated
using the attained age of the Participant (or Designated
Beneficiary) as of the Participant's (or Designated
Beneficiary's) birthday in the applicable calendar year reduced
by one for each calendar year which has elapsed since the date
Life Expectancy was first calculated. If Life Expectancy is
being recalculated, the Applicable Life Expectancy shall be the
Life Expectancy 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.
(ii) "DESIGNATED BENEFICIARY" shall mean the individual
------------------------
who is designated as the Beneficiary under the Plan in accordance
with section 401(a)(9) of the Code and the Treasury regulations
thereunder.
(iii) "DISTRIBUTION CALENDAR YEAR" shall mean a
---------------------------
calendar year for which a minimum distribution is required. For
distributions beginning before the Participant's death, the first
Distribution Calendar Year is the calendar year immediately
preceding the calendar year which contains the Participant's
Required Beginning Date. For distributions beginning after the
Participant's death, the first Distribution Calendar Year is the
calendar year in which distributions are required to begin
pursuant to Section 7.1(c)(5) above.
(iv) "LIFE EXPECTANCY" shall mean the life expectancy
-----------------
and Joint and Last Survivor Expectancy as computed by use of the
expected return multiples in Tables V and VI of Treas. Reg. (S)
1.72-9. Unless otherwise elected by the Participant (or spouse,
in the case of distributions described in Section
7.1(c)(5)(ii)(B) above) by the time distributions are required to
begin, Life Expectancies shall be recalculated annually. Such
election shall be irrevocable as to the Participant (or spouse)
and shall apply to all subsequent years. The Life Expectancy of a
nonspouse Beneficiary may not be recalculated.
(v) "PARTICIPANT'S BENEFIT" shall mean 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 Section 7.1(c)(6)(v), 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.
(vi) "REQUIRED BEGINNING DATE" shall mean, with respect
------------------------
to any Participant, except as provided below, the first day of
April of the calendar year following the calendar year in which
the Participant attains age 70-1/2.
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<PAGE>
Notwithstanding the foregoing, the Required Beginning
Date of a Participant who attained age 70-1/2 before January 1,
1988, shall be determined in accordance with (A) or (B) below:
(A) NON-FIVE-PERCENT OWNERS. The Required
-----------------------
Beginning Date of a Participant who is not a five-percent
owner is the first day of April of the calendar year
following the calendar year in which the later of retirement
or attainment of age 70-1/2 occurs.
(B) FIVE-PERCENT OWNERS. The Required Beginning
-------------------
Date of a Participant who is a five-percent owner during any
year beginning after December 31, 1979, is the first day of
April following the later of:
(AA) The calendar year in which the
Participant attains age 70-1/2; or
(BB) The earlier of the calendar year with
or within which ends the Plan Year in which the
Participant becomes a five-percent owner, or the
calendar year in which the Participant retires.
The Required Beginning Date of a Participant who is not
a five-percent owner, who attained age 70-1/2 during 1988, and
who has not retired as of January 1, 1989, is April 1, 1990.
A Participant is treated as a five-percent owner for
purposes of this Section 7.1(c)(6)(vi) if such Participant is a
five-percent owner as defined in section 416(i) of the Code
(determined in accordance with section 416 but without regard to
whether the Plan is a Top-Heavy Plan within the meaning of
Section 17.1(g)) at any time during the Plan Year ending with or
within the calendar year in which such owner attains age 66-1/2
or any subsequent Plan Year.
Once distributions have begun to a five-percent owner
under this Section 7.1(c), they must continue to be distributed,
even if the Participant ceases to be a five-percent owner in a
subsequent year.
(7) TRANSITIONAL RULE.
-----------------
(i) Notwithstanding the other requirements of this
Section 7.1(c), distribution on behalf of any Employee, including
a five-percent owner, may be made in accordance with all of the
following requirements (regardless of when such distribution
commences):
(A) The distribution by the Trust is one which
would not have disqualified such Trust under section
401(a)(9) of the Code as in effect prior to amendment by the
Tax Reform Act of 1984.
(B) The distribution is in accordance with a
method of distribution designated by the Employee whose
interest in the Trust is being distributed or, if the
Employee is deceased, by a Beneficiary of such Employee.
(C) Such designation was in writing, was signed
by the Employee or the Beneficiary, and was made before
January 1, 1984.
(D) The Employee had accrued a benefit under the
Plan as of December 31, 1983.
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<PAGE>
(E) The method of distribution designated by the
Employee or the Beneficiary specifies the time at which
distribution will commence, the period over which
distributions will be made, and, in the case of any
distribution upon the Employee's death, the Beneficiaries of
the Employee listed in order of priority.
(ii) 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 Employee.
(iii) For any distribution which commences before
January 1, 1984, but continues after December 31, 1983, the
Employee, 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 requirements in Sections
7.1(c)(7)(i)(A) and (E).
(iv) If a designation is revoked, any subsequent
distribution must satisfy the requirements of section 401(a)(9)
of the Code and the proposed Treasury regulations thereunder. If
a designation is revoked subsequent to the date distributions are
required to begin, the Trust 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 section
401(a)(9) of the Code and the proposed Treasury regulations
thereunder, but for the election under section 242(b)(2) of the
Tax Equity and Fiscal Responsibility Act of 1982. For calendar
years beginning after December 31, 1988, such distributions must
meet the minimum distribution incidental benefit requirements in
Prop. Treas. Reg. (S) 1.401(a)(9)-2. Any changes in the
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 of Prop. Treas. Reg. (S)
1.401(a)(9)-1 shall apply.
7.2 FORM OF DISTRIBUTION. All distributions from this Plan shall be
--------------------
made in cash unless the Participant elects, on a form provided by the Committee,
to receive so much of his Base Contribution Account, Employee After-Tax
Contribution Account, Employer Profit-Sharing Contribution Account, Employer
After-Tax Matching Contribution Account, and Employer Matching Contribution
Account as is invested in Fund A in Company Stock. In any case in which a
portion of an Account of a Participant is to be distributed in Company Stock,
any part of such portion of such Account which is represented by other assets
shall be applied to acquire additional Company Stock to the fullest extent
possible, but no fractional shares of Company Stock shall be distributed. Any
amount remaining in such portion of such Account which is insufficient to
purchase a whole share of Company Stock shall be distributed in cash.
-37-
<PAGE>
7.3 METHODS OF PAYMENT OF BENEFITS.
------------------------------
(a) METHODS OF DISTRIBUTION. Subject to the requirements of
-----------------------
Section 7.1, if the present value (i.e., the amount in his Accounts) of a
Participant's Vested Accrued Benefit, including Employer and Employee
contributions, does not exceed (and has not at the time of any prior
distribution exceeded) $3,500, such Participant's benefit shall be
distributed to the Participant in a lump sum no later than 180 days after
the Valuation Date coincident with or next following his termination of
employment, or such earlier date as required by Section 6.2. In any other
case, the Trustee shall make distribution of such Vested Accrued Benefit
becoming payable pursuant to Article VI in accordance with the methods of
distribution set forth in this Section 7.3(a), as determined by the
Participant, former Participant, or Beneficiary. Subject to the
requirements of Section 7.1, the available methods of distribution, in the
event the present value of a Participant's Vested Accrued Benefit exceeds
(or at the time of any prior distribution exceeded) $3,500, are as
follows:
(1) INSTALLMENT PAYMENTS. Benefits which accrued under the
--------------------
Profit-Sharing Plan prior to January 1, 1990, benefits which accrued
under the Prior Plan prior to April 13, 1989, and benefits paid to a
Participant terminating employment on or after his Early or Normal
Retirement Date (regardless of the date accrued), may, at the election
of the Participant, be paid:
(i) In the form of approximately equal annual,
semiannual or quarterly installments, over a fixed period of
time, as elected by the Participant, not to exceed the life
expectancy of the Participant or the joint life expectancy of the
Participant and his spouse or other Beneficiary, or for a fixed
period of time which does not violate the requirements of Section
7.1(c); or
(ii) In the form of annual payments over a specified
period of years, as elected by the Participant, not to exceed the
life expectancy of the Participant or the joint life expectancy
of the Participant and his spouse or other Beneficiary, or for a
specified period of years which does not violate the requirements
of Section 7.1(c), in an amount for each year equal to the value
of the Participant's Vested Accrued Benefit as of the Valuation
Date for such year multiplied by a fraction whose numerator is
one and whose denominator is the number of years remaining in
such specified period of years.
(2) LUMP-SUM DISTRIBUTION. Benefits shall, unless the
---------------------
Participant elects otherwise, be paid to a Participant or Beneficiary
in the form of a total distribution of the amount payable, in cash, or
partially in cash and partially in Company Stock.
(b) DIRECT ROLLOVERS.
----------------
(1) GENERAL RULE. Notwithstanding any provision of the Plan
------------
to the contrary that would otherwise limit a Distributee's election, a
Distributee may elect, at the time and in the manner prescribed by the
Committee, to have any portion of an Eligible Rollover Distribution
paid directly to an Eligible Retirement Plan specified by the
Distributee in a Direct Rollover.
(2) DEFINITIONS. For purposes of this Section 7.3(b), the
-----------
following definitions shall apply:
(i) ELIGIBLE ROLLOVER DISTRIBUTION: Any distribution of
------------------------------
all or any portion of the balance to the credit of the
Distributee, except that an Eligible Rollover Distribution does
not include:
(A) Any distribution that is one of a series of
substantially equal periodic payments (not less frequently
than
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<PAGE>
annually) made for the life (or life expectancy) of the
Distributee or the joint lives (or joint life expectancies)
of the Distributee and the Distributee's designated
beneficiary, or for a specified period of ten years or more;
(B) Any distribution to the extent such
distribution is required under section 401(a)(9) of the
Code; and
(C) 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).
(ii) ELIGIBLE RETIREMENT PLAN: An individual
------------------------
retirement account described in section 408(a) of the Code, an
individual retirement annuity described in section 408(b) of the
Code, an annuity plan described in section 403(a) of the Code, or
a qualified trust described in section 401(a) of the Code, that
accepts the Distributee's Eligible Rollover Distribution.
However, in the case of an Eligible Rollover Distribution to the
surviving spouse, an Eligible Retirement Plan is an individual
retirement account or individual retirement annuity.
(iii) DISTRIBUTEE: A Distributee includes an employee
-----------
or former employee. In addition, the Employee's or former
Employee's surviving spouse and the Employee's or former
Employee's spouse or former spouse who is the alternate payee
under a qualified domestic relations order, as defined in section
414(p) of the Code, are Distributees with regard to the interest
of the spouse or former spouse.
(iv) DIRECT ROLLOVER: A Direct Rollover is a payment
---------------
by the Plan to the Eligible Retirement Plan specified by the
Distributee.
(c) DEFERRED PAYMENTS. Subject to the requirements of Section
-----------------
7.1, in the event that benefits are distributed in the form of installments
pursuant to Section 7.3(a)(1) above, the installment payments shall be paid
over the period provided in Section 7.3(a)(1) as elected by the
Participant. In no event may the Trustee pay to a Participant or his
Beneficiary interest only on his benefits.
If benefits are distributed in deferred or installment payments,
and if the Participant's Base, Employee After-Tax, Supplemental, Employer
Profit-Sharing, Employer After-Tax Matching, and Employer Matching
Contribution Accounts are invested in more than one Fund, the Participant
shall designate the approximate percentage of the installment or deferred
payments which shall be made from each of the Funds in which such Accounts
are invested. Such designation shall be made at the time the Participant
elects to receive his benefits under the Plan in installment or deferred
payments. In the absence of such designation, payments shall be made on a
pro-rata basis from all of a Participant's Accounts.
-39-
<PAGE>
7.4 DESIGNATION OF BENEFICIARY AND ELECTION WITH RESPECT TO DEATH
-------------------------------------------------------------
BENEFIT.
- -------
(a) DESIGNATION OF BENEFICIARY. In the event a Participant has a
--------------------------
surviving spouse at his death, such surviving spouse shall be the
Participant's Beneficiary, unless the Participant's spouse has previously
consented during the election period provided in Section 7.4(c), in a
manner conforming to a qualified election, as described in Section 7.4(b),
to the payment of the Participant's Accrued Benefit to a Participant-
designated Beneficiary other than the surviving spouse, except as otherwise
provided in the next succeeding sentence. In the event the Participant has
no surviving spouse at his death, the Beneficiary shall be the Beneficiary
designated by the Participant or, in the event no Beneficiary has been
designated or survives the Participant, the Beneficiary shall be determined
in accordance with Section 7.4(d). Such Beneficiary (other than a surviving
spouse) must be designated on the appropriate form furnished by the
Committee, executed by the Participant and returned to the Committee. Any
such designation of Beneficiary may include contingent or successive
Beneficiaries, and need not designate individuals. Except as otherwise
provided with respect to a surviving spouse, a Participant may, at any
time, change his designation of Beneficiary by completing a new designation
form, but a designation of Beneficiary shall remain in effect until such
new form is received by the Committee.
(b) QUALIFIED ELECTION. For the consent by a spouse to payment
------------------
of a Participant's Accrued Benefit to a Beneficiary other than the spouse
upon the Participant's death to be valid, such consent must be made in
writing on the appropriate form filed with the Committee during the
election period provided in Section 7.4(c) and must be witnessed by a
notary public (or, in the discretion of the Committee, by a Plan
representative designated by the Committee). Notwithstanding this consent
requirement, if the Participant establishes to the satisfaction of the
Committee that such written consent may not be obtained because there is no
spouse or the spouse cannot be located, the spouse shall be deemed to have
consented to the payment of the Participant's Accrued Benefit to a
Beneficiary other than the spouse. Any consent necessary under this
provision shall be valid only with respect to the spouse who signs the
consent, or in the event of a deemed consent, with respect to the spouse
who is deemed to have so consented. Any spousal consent must acknowledge
the specific nonspouse Beneficiary or contingent Beneficiary, including any
class of Beneficiaries or contingent Beneficiaries, and if a Beneficiary,
contingent Beneficiary, or class of Beneficiaries or contingent
Beneficiaries is changed, the spouse must consent to such change in the
manner provided above. Additionally, a revocation of a prior consent may
be made by a Participant without the consent of the spouse at any time
before the commencement of benefits. The number of revocations or consents
shall not be limited.
(c) ELECTION PERIOD. The election period for purposes of the
---------------
consent of the spouse provided for in Section 7.4(b) shall be the period
which begins on the first day of the Plan Year in which the Participant
commences to participate in the Plan and ends on the date of the
Participant's death.
(d) RECIPIENT OF DEATH BENEFIT WHERE NO BENEFICIARY DESIGNATED
----------------------------------------------------------
OR SURVIVES. If a Participant fails to designate a Beneficiary, or if no
-----------
designated Beneficiary survives a Participant or survives to receive all of
the benefits to which the Participant or the Beneficiary was entitled, the
Beneficiary shall be deemed to be, in the following order of priority, and
only if then surviving, the Participant's: (1) spouse; (2) children,
including adopted children and stepchildren, in equal shares; (3) parents,
in equal shares; and (4) estate.
7.5 INCAPACITATED BENEFICIARIES. If the Committee deems any person
---------------------------
incapable of receiving benefits to which he is entitled by reason of minority,
illness, infirmity or other incapacity, it may direct the Trustee to make
payment directly for the benefit of such person or to any legally appointed
guardian for such person, whose receipt shall be a complete acquittance
therefor. Such payments shall, to the extent thereof, discharge all liability
of the Participating Company, the Committee, the Trustee and the Trust.
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<PAGE>
7.6 TIME OF FORFEITURES.
-------------------
(a) WHERE PAYMENT OF VESTED ACCRUED BENEFIT NOT MADE UPON
-----------------------------------------------------
TERMINATION OF EMPLOYMENT.
------------ -------------
(1) In the event the present value (i.e., the vested amount
in a Participant's Accounts) of a Participant's Vested Accrued Benefit
exceeds (or at the time of a prior distribution exceeded) $3,500 at
the time of his termination of employment and such Participant did not
consent to the distribution to him of his entire Vested Accrued
Benefit in accordance with the prior provisions of this Article VII,
any portion of such Participant's Employer Profit-Sharing Contribution
or Employer Matching Contribution Account which is not vested in
accordance with Article VI at the time of his separation from service
with the Employer shall be forfeited (unless forfeited earlier
pursuant to Section 7.6(b)) as of the last day of the Plan Year in
which the Participant incurs five consecutive One-Year Breaks in
Service and applied in accordance with the provisions of Section 5.8.
(2) If a distribution of a Participant's entire Vested
Accrued Benefit is made to him at the time of his separation from
service, the rules of Section 7.6(b) and not this Section 7.6(a) shall
apply. If a distribution of less than a Participant's entire Vested
Accrued Benefit is made to such Participant at a time when such
Participant has a nonforfeitable right to less than 100 percent of his
Employer Profit-Sharing Contribution or Employer Matching Contribution
Account and, at the time of such distribution, the Participant has not
incurred five consecutive One-Year Breaks in Service, the Trustee
shall retain the nonvested portion (to the extent it has not been
forfeited under Section 7.6(b)) of the Participant's Employer Profit-
Sharing or Employer Matching Contribution Account in his Employer
Profit-Sharing or Employer Matching Contribution Account. In such
case, the Participant's vested interest in the Employer Profit-Sharing
or Employer Matching Contribution Account at any relevant time shall
not be less than an amount ("X") determined by the formula: X = P(AB
+ (RxD)) -(RxD), where "P" is the vested percentage at the relevant
time; "AB" is the account balance (i.e., the amount in the Employer
Profit-Sharing or Employer Matching Contribution Account) at the
relevant time; "D" is the amount of the payment; "R" is the ratio of
the account balance at the relevant time to the account balance after
payment; and the relevant time is the time at which, under the Plan,
the Participant's vested interest in the amount in the Employer
Profit-Sharing or Employer Matching Contribution Account cannot
increase.
(3) If the Participant returns to service of the Employer
before incurring five consecutive One-Year Breaks in Service, the
Participant shall continue to vest in the amount in his Employer
Profit-Sharing or Employer Matching Contribution Account in accordance
with the provisions set forth above.
(4) If the Participant incurs five consecutive One-Year
Breaks in Service, the amount in the Participant's Employer Profit-
Sharing or Employer Matching Contribution Account, as determined under
Section 7.6(a)(2), shall be forfeited under Section 7.6(a) and shall
be applied in accordance with Section 5.8, as of the last day of the
Plan Year in which the Participant incurs five consecutive One-Year
Breaks in Service.
(b) WHERE PAYMENT OF VESTED ACCRUED BENEFIT MADE UPON
-------------------------------------------------
TERMINATION OF EMPLOYMENT. If a Participant separates from the service of
-------------------------
the Employer, and the present value (i.e., the vested amount in a
Participant's Accounts) of the Participant's Vested Accrued Benefit derived
from Employer contributions does not exceed (and has not at the time of any
prior distribution exceeded) $3,500, the Participant shall receive a
distribution of the value of his entire Vested Accrued Benefit (and if his
entire Vested Accrued Benefit is $0, he shall be deemed to have received,
as a cash-out of his Vested Accrued Benefit under the Plan, such $0), and
the nonvested portion of his Accrued Benefit shall be forfeited at the time
of such distribution; if the value of the Participant's Vested Accrued
Benefit derived from Employer
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<PAGE>
contributions exceeds (or at the time of any prior distribution exceeded)
$3,500 and if the Participant separates from the service of the Employer
and elects to receive no less than the entire value of the Participant's
Vested Accrued Benefit derived from Employer contributions, the nonvested
portion shall be treated as a forfeiture at the time of distribution to the
Participant of his Vested Accrued Benefit; if the Participant elects,
pursuant to the provisions of Section 7.3, to have distributed less than
his entire Vested Accrued Benefit derived from Employer 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 Employer contributions and
the denominator of which is the total value of his Vested Accrued Benefit
derived from Employer contributions. To the extent the nonvested portion is
not or cannot be forfeited at the time of a Participant's separation from
service because of the rules set forth in this Section 7.6(b), the rules of
Section 7.6(a) shall apply. If a Participant receives a distribution
pursuant to this Section 7.6(b) (except as otherwise provided in the
immediately preceding sentence) and resumes employment covered under the
Plan, the Participant's Accrued Benefit derived from Employer contributions
shall be restored to the amount on the date of distribution if the
Participant repays to the Plan the full amount of the distribution
attributable to Employer contributions on or before the earlier of:
(1) The fifth anniversary of the Participant's resumption of
covered employment; or
(2) The date the Participant incurs five consecutive One-
Year Breaks in Service.
If a Participant is deemed to receive a distribution pursuant to this
Section 7.6(b), and the Participant resumes employment covered under this Plan
before the date the Participant incurs five consecutive One-Year Breaks in
Service, upon the reemployment of such Participant, the Employer-derived account
balance of the Participant shall be restored to the amount on the date of such
deemed distribution.
Forfeitures under this Section 7.6(b) shall be applied in accordance
with Section 5.8 for the Plan Year in which the forfeiture occurs under this
Section 7.6(b).
ARTICLE VIII
ALIENATION OF BENEFITS
----------------------
8.1 ALIENATION OF BENEFITS GENERALLY PROHIBITED. The right of any
-------------------------------------------
Participant or Beneficiary to any benefit payment shall not be subject to any
voluntary or involuntary alienation or assignment. 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 a Qualified Domestic Relations Order, or is a domestic
relations order entered before January 1, 1985.
8.2 SPECIAL PROVISION WITH RESPECT TO QUALIFIED DOMESTIC RELATIONS
--------------------------------------------------------------
ORDERS. If the Qualified Domestic Relations Order so provides:
- ------
(a) Plan assets allocated to an alternate payee shall be placed
in a separate account established for such alternate payee, and such
alternate payee shall be entitled, with respect to such separate account,
to all the rights of a Participant under the Plan, including, but not
limited to, the investment direction rights, if any, of such Participant;
and
(b) Distribution of the vested amount in such separate account
shall be made to such alternate payee at such time as the Qualified
Domestic Relations Order provides, even if such date precedes the date on
which a Participant is entitled to payment under the Plan, but such
distribution shall only be made in one lump-sum payment if made prior to
the date on which the Participant would otherwise first be entitled to
receive payment.
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<PAGE>
ARTICLE IX
LOANS
-----
9.1 LIMITATIONS. Upon the filing of an application with the
-----------
Committee by a Participant or Beneficiary who is a party in interest with
respect to the Plan (within the meaning of section 3(14) of ERISA) on the
appropriate form, the Committee shall, within 90 days from the date of receipt
of such application, direct the Trustee to make a loan to such Participant or
Beneficiary, provided such loan:
(a) Is available to all such Participants and Beneficiaries on
a reasonably equivalent basis;
(b) Is not made available to Highly Compensated Employees and
their Beneficiaries in an amount greater than the amount made available to
other Employees and Beneficiaries;
(c) Bears a reasonable rate of interest within the meaning of
29 CFR (S) 2550.408b-1;
(d) Is adequately secured within the meaning of 29 CFR (S)
2550.408b-1;
(e) Does not exceed (when added to the outstanding balance of
all other loans to the same Participant or Beneficiary from the Plan) the
lesser of:
(1) $50,000 (reduced by the excess (if any) of (i) the
highest outstanding balance of loan(s) from the Plan during the one-
year period ending on the day before the date on which the loan was
made over (ii) the outstanding balance of loans from the Plan on the
date on which such loan was made); or
(2) One-half of the present value of the Participant's
Vested Accrued Benefit attributable to the Participant's or
Beneficiary's Base Contribution Account, Employee After-Tax
Contribution Account, Employer After-Tax Matching Contribution
Account, and his Employer Matching Contribution Account;
(f) Is repayable, except as otherwise provided in Section 9.4,
by its terms within the whole number of years, not to exceed five years
from the date of the loan, elected by the Participant or Beneficiary;
(g) Shall not be made to any owner-employee (within the meaning
of section 401(c)(3) of the Code) or shareholder-employee (as defined in
section 1379 of the Code, as in effect on the date before the date of the
enactment of the Subchapter S Revision Act of 1982);
(h) Requires amortization in level payments of principal and
interest made not less frequently than quarterly over the term of the loan;
(i) Is in an amount not less than $1,000; and
(j) Complies with any other limitation on loans specified in
this Article IX.
In the event of default, to the extent security for the loan is the
Participant's Vested Accrued Benefit, foreclosure on the note and attachment of
security shall not occur until a distributable event occurs under the Plan.
An assignment or pledge of any portion of the Participant's or
Beneficiary's interest in the Plan and a loan, pledge or assignment with respect
to any insurance contract purchased by the Plan shall be treated as a loan under
this Section 9.1.
For purposes of this Section 9.1, the rules of section 414(b), (c),
(m), and (o) shall apply, and all plans of the Sponsoring Company and the
Affiliated Companies shall be treated as one
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<PAGE>
plan.
The Committee, provided the above requirements are met, shall grant
such request. In such event the Committee shall be responsible for complying
with any legal requirements affecting said loan, such as Federal Reserve
regulations.
9.2 INTEREST. All such loans shall bear a reasonable rate of
--------
interest, which shall, in accordance with 29 CFR (S) 2550.408b-1, provide the
Plan with a return commensurate with the interest rates charged by persons
engaged in the business of lending money for loans which would be made under
similar circumstances. The Committee has determined that such rate of interest
shall be one percentage point above the prime rate at CORESTATES BANK, N.A.,
Philadelphia, Pennsylvania (or any successor thereto) for the first business day
of the month in which the loan is granted. Every loan applicant shall receive a
clear statement of the charges involved in each loan transaction. This
statement shall include the dollar amount and the annual interest rate of the
finance charge.
9.3 REPAYMENT - COLLECTION. Any such loan or loans shall be repaid
----------------------
by the Participant or Beneficiary within a period certain requested by the
Participant or Beneficiary but not to exceed, except in the case of loans
subject to Section 9.4, a period of five years from the date the loan or loans
are made, and such loan or loans shall by their terms require repayment within
such period. The loan or loans shall be evidenced by a promissory note and shall
be secured by payroll deduction if the Participant is in the active service of
the Employer and shall be secured by the Participant's or Beneficiary's Vested
Accrued Benefit but not to exceed 50 percent of the present value of such Vested
Accrued Benefit. In the event the Participant or Beneficiary does not repay the
loan within the period certain, the Trustee shall deduct the total amount of
such loan or loans or any portion thereof from that portion of the Vested
Accrued Benefit which serves as collateral for the loan, but only when a
distributable event occurs under the Plan. In the event the amount of any such
payment, distribution or other collateral is insufficient to repay the remaining
balance on the loan or loans including interest, the Participant or Beneficiary
shall be liable for, and continue to make, payments on any balance still due
from such Participant or Beneficiary. Subject to the terms of the Plan, the
Participant or Beneficiary shall repay the loan or loans in installments in such
manner as shall comply with Section 9.1.
9.4 EXCEPTION FOR HOME LOANS. Notwithstanding Section 9.1(f) and
------------------------
Section 9.3, any loan used to acquire any dwelling unit which within a
reasonable time is to be used (determined at the time the loan is made) as the
principal residence of the Participant may be repayable within a period in
excess of five years.
9.5 NUMBER OF LOANS. A Participant or Beneficiary may not have more
---------------
than one loan outstanding at any time. A Participant who repays a loan may not
receive a new loan until six months have elapsed since the date of final
repayment of the previous loan.
9.6 LOANS - INDIVIDUAL INVESTMENTS. Until a loan to a Participant or
------------------------------
Beneficiary is repaid, the outstanding balance of the loan shall be treated as
an investment by such Participant or Beneficiary for his Accounts only, and the
interest paid by such Participant or Beneficiary shall be credited to the
Accounts, as applicable, of such Participant or Beneficiary. Such Participant's
or Beneficiary's Accounts shall not share in any other earnings of the Plan with
respect to the amount of the loan. The amount of each repayment shall be
invested in accordance with the regular investment provisions selected under
Section 5.3.
9.7 ACCOUNTS AVAILABLE FOR LOANS. Any loan made to a Participant or
----------------------------
Beneficiary under this Article IX shall be made first (in the case of a
Participant or Beneficiary who is not a Resident of Puerto Rico) from the
Participant's or Beneficiary's Base Contribution Account, or (in the case of a
Participant or Beneficiary who is a Resident of Puerto Rico) from the
Participant's or Beneficiary's Employee After-Tax Contribution Account, then, to
the extent the amount of the loan exceeds the amount which may be borrowed from
the Participant's or Beneficiary's Base Contribution or Employee After-Tax
Contribution Account (as applicable), from the vested portion of his Employer
Matching Contribution Account, or if the Participant or Beneficiary is a
Resident of Puerto Rico, from his Employer After-Tax Matching Contribution
Account. No loans may be made from a Participant's or Beneficiary's Employer
Profit-Sharing Contribution Account. Loan amounts from each Account
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<PAGE>
shall be taken PRO RATA from the Funds in which such Account is invested.
ARTICLE X
WITHDRAWALS DURING EMPLOYMENT
-----------------------------
Withdrawals by a Participant of his Vested Accrued Benefit while such
Participant is employed by an Employer shall be permitted only in accordance
with the rules set forth in this Article X.
10.1 WITHDRAWALS AFTER AGE 59-1/2. A Participant who has attained age
----------------------------
59-1/2 may, upon request at any time, withdraw part or all of the amount
credited to his Supplemental Contribution Account, his Base Contribution
Account, his Employee After-Tax Contribution Account, his Employer Profit-
Sharing Contribution Account, his Employer After-Tax Matching Contribution
Account, and his Employer Matching Contribution Account, valued as of the most
recent Valuation Date.
10.2 WITHDRAWALS BEFORE AGE 59-1/2. Except as provided in this
-----------------------------
Section 10.2, no withdrawals shall be permitted of a Participant's Vested
Accrued Benefit, while such Participant is employed by an Employer if the
Participant has not attained age 59-1/2.
(a) HARDSHIP WITHDRAWALS.
--------------------
(1) AMOUNTS SUBJECT TO WITHDRAWAL; TIMING OF
----------------------------------------
WITHDRAWAL ELECTION. A Participant who:
-------------------
(i) Incurs a Hardship, as defined in Section
10.2(a)(2)(i) below;
(ii) Demonstrates, in accordance with Sections
10.2(a)(3) and (4) below, that a withdrawal is necessary to meet
such Hardship; and
(iii) Satisfies the additional requirements set
forth in Section 10.2(a)(5) below,
may elect to withdraw, as of any Valuation Date in the Plan Year, any
portion or all of the amount then credited to:
(A) If the Participant is not a Resident of
Puerto Rico, his Base Contribution Account (but not the
earnings thereon); if the Participant is a Resident of
Puerto Rico, his Employee After-Tax Contribution Account;
(B) If he has withdrawn, or also elects to
withdraw, the amounts described in Section
10.2(a)(1)(iii)(A), the vested amounts credited to his
Employer Matching Contribution Account (if the Participant
is not a Resident of Puerto Rico), or the amounts credited
to his Employer After-Tax Matching Contribution Account (if
the Participant is a Resident of Puerto Rico); and
(C) If he has withdrawn, or also elects to
withdraw, the amounts described in Section
10.2(a)(1)(iii)(A) and (B), the vested amount credited to
his Employer Profit-Sharing Contribution Account (if the
Participant is not a Resident of Puerto Rico);
provided, however, that he has withdrawn, or also elects to withdraw,
100 percent of the amount credited to his Supplemental Contribution
Account under Section 10.2(b), and that he has borrowed all amounts
which he is entitled to borrow from this Plan or any other plan. A
financial need shall not fail to qualify as an Immediate
-45-
<PAGE>
and Heavy Financial Need merely because such need was reasonably
foreseeable or voluntarily incurred by the Participant. Such
withdrawal shall only be permitted if the Committee determines that
the requirements set forth in Section 10.2(a)(2), (3), (4), and (5)
below are satisfied. If the Committee determines that the requirements
of Section 10.2(a)(2), (3), (4), and (5) are satisfied, the Committee
shall direct that the requested amount be paid to the Participant as
soon as practicable. The withdrawal election shall be made at least 30
days prior to the effective date of the withdrawal on the appropriate
form furnished by the Committee for such purpose.
(2) DEFINITIONS. The following definitions apply for
-----------
purposes of this Section 10.2(a):
(i) "HARDSHIP" shall mean an Immediate and Heavy
--------
Financial Need of the Participant where such Participant lacks
other available resources.
(ii) "IMMEDIATE AND HEAVY FINANCIAL NEED" shall
----------------------------------
mean:
(A) Expenses for medical care described in
section 213(d) of the Code previously incurred by the
Participant, the Participant's spouse, or his dependents
(within the meaning of section 152 of the Code) or necessary
for such persons to obtain medical care described in section
213(d) of the Code;
(B) Costs directly related to the purchase
of a principal residence for the Participant (excluding
mortgage payments);
(C) Payment of tuition, related educational
fees, and room and board expenses, for the next 12 months of
post-secondary education for the Participant, the
Participant's spouse, or the Participant's children or
dependents (within the meaning of section 152 of the Code);
(D) Payments necessary to prevent the
eviction of the Participant from his principal residence or
foreclosure on the mortgage of the Participant's principal
residence; or
(E) Amounts necessary to pay any Federal,
state, or local income tax liabilities, including any
interest or penalties thereon reasonably anticipated to
result from the distribution.
(3) WITHDRAWAL NECESSARY TO SATISFY HARDSHIP. The Committee
----------------------------------------
shall only permit a Hardship withdrawal if the Committee determines
that the withdrawal is necessary to meet one or more of the Immediate
and Heavy Financial Needs set forth in Section 10.2(a)(2)(ii) above. A
withdrawal shall be determined by the Committee to be necessary to
meet such Immediate and Heavy Financial Need only if both of the
following conditions are satisfied:
(i) The requested withdrawal is not in excess of the
amount of the Immediate and Heavy Financial Need of the
Participant. The amount of an Immediate and Heavy Financial Need
may include any amounts necessary to pay any Federal, state, or
local income taxes or penalties reasonably anticipated to result
from the distribution.
(ii) The Participant has obtained all distributions,
other than Hardship distributions, and all nontaxable (at the
time of the loan) loans currently available under all plans
maintained by the Employers.
(iii) The Plan and all other plans maintained by the
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<PAGE>
Employers limit the Participant's elective contributions for the
next taxable year to the applicable limit under section 402(g) of
the Code for that year minus the Participant's elective
contributions for the year of the hardship distribution.
(4) REPRESENTATIONS OF PARTICIPANT. A Participant making
------------------------------
such withdrawal election shall represent in writing to the Committee
that he has an Immediate and Heavy Financial Need, that the amount
requested to be withdrawn is necessary to relieve such Need, and that
such Need cannot be relieved:
(i) Through reimbursement or compensation by
insurance or otherwise;
(ii) By reasonable liquidation of the Participant's
assets, including those assets of his spouse and minor children
that are reasonably available to him, to the extent such
liquidation would not itself cause an Immediate and Heavy
Financial Need;
(iii) By cessation of Base Contributions; or
(iv) By other distributions or nontaxable (at the
time of the loan) loans from this Plan or any other plan
maintained by the Employers or other employer, or by borrowing
from commercial sources on reasonable commercial terms.
(5) ADDITIONAL REQUIREMENTS. A Participant who receives a
-----------------------
Hardship distribution of Base Contributions under this Section 10.2(a)
shall not be permitted to make any Base Contributions under this Plan,
or any elective deferrals or employee contributions under any other
qualified or nonqualified plan of deferred compensation maintained by
the Employers (including a stock option, stock purchase, or similar
plan, or a cash or deferred arrangement that is part of a cafeteria
plan described in section 125 of the Code, but not including the
mandatory employee contribution portion of a defined benefit plan or
any health or welfare benefit plan, including one that is part of a
cafeteria plan) for a period of 12 months following receipt of such
distribution. If a Participant receives a distribution of Base
Contributions under this Section 10.2(a), the dollar limitation of
section 402(g) of the Code, as described in Section 3.1(a), shall be
reduced with respect to such Participant, for the calendar year
following the calendar year in which such distribution is received, by
an amount equal to the amount of such distribution, under this Plan
and under any other plan maintained by the Employers to which such
limitation applies.
(b) WITHDRAWAL OF SUPPLEMENTAL CONTRIBUTIONS. A Participant may,
by filing a written request with the Committee, elect to withdraw up to
100% of the amount credited to his Supplemental Contribution Account
(valued as of the most recent Valuation Date); provided, however, that no
more than three such withdrawals shall be made during any Plan Year, and
that no withdrawal of less than $200 shall be permitted.
ARTICLE XI
ALLOCATION OF FIDUCIARY RESPONSIBILITIES
----------------------------------------
11.1 ALLOCATION OF RESPONSIBILITY. Authority and responsibility for
----------------------------
management of the Plan and Trust shall be allocated among the following persons:
(a) The Board of Directors of the Sponsoring Company shall be a
"named fiduciary" of the Plan for purposes of section 402(a)(1) of ERISA
with the exclusive authority to appoint, remove and replace the members of
the Committee described in Article XII. Said Board of Directors shall also
have the authority to appoint, remove and replace the Trustee, as
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<PAGE>
provided in Section 13.4.
(b) The Committee shall be a "named fiduciary" of the Plan for
purposes of section 402(a)(1) of ERISA with sole responsibility for the
administration of the Plan, as set forth in Article XII.
(c) The Trustee shall be a fiduciary of the Plan and shall have
sole responsibility for the management, control and investment of the Trust
assets in accordance with the direction of the Committee and Participants.
11.2 RESPONSIBILITY NOT JOINT. It is the purpose of the Plan and the
------------------------
Trust Agreement to allocate to each of the fiduciaries identified in Section
11.1 exclusive responsibility for prudent execution of the functions assigned
thereto and no responsibility for execution of functions assigned to any other
fiduciary. Whenever one such fiduciary is required by the Plan or the Trust
Agreement to follow the directions of another such fiduciary, the two
fiduciaries shall not be deemed to have been assigned a shared responsibility,
but the fiduciary giving the directions shall have sole responsibility for the
functions assigned to him, including issuing such directions, and the fiduciary
receiving the directions shall have sole responsibility for the functions
assigned to him, including following such directions insofar as they are on
their face proper under the Plan and the Trust Agreement and under applicable
law.
11.3 ACT IN INTEREST OF PARTICIPANTS. In carrying out the
-------------------------------
responsibilities allocated to him under the Plan and the Trust Agreement, each
fiduciary shall act solely in the interests of the Plan's Participants and their
Beneficiaries and to defray the reasonable expenses of administering the Plan.
11.4 ADVISORS. A fiduciary identified in Section 11.1 may employ one
--------
or more persons to render advice with regard to such fiduciary's
responsibilities under the Plan, in which case the expense of such advisor or
the advisors shall be paid either out of the Trust assets or by the
Participating Companies, as the Sponsoring Company shall determine.
ARTICLE XII
THE ADMINISTRATIVE COMMITTEE
----------------------------
12.1 APPOINTMENT OF COMMITTEE. The Committee shall consist of not
------------------------
less than three persons appointed by the Board of Directors of the Sponsoring
Company, who shall serve during the pleasure of such Board. Any member of the
Committee may resign at any time by giving 30 days' written notice to the
Committee, the Trustee, and the Sponsoring Company. Any member of the Committee
may be removed by the Board, which shall fill all vacancies in the Committee
occurring upon the death, resignation, expiration of term or removal of a member
of the Committee. The Sponsoring Company shall notify the Trustee of the
appointment of members of the Committee, and of any subsequent changes in its
membership.
12.2 CHAIRMAN AND SECRETARY. The Committee members shall elect a
----------------------
chairman and a secretary. The chairman shall preside at all meetings, and the
secretary shall keep records of all meetings, and shall notify the Trustee of
all necessary communications.
12.3 COMMITTEE PROCEDURES. A majority of the members of the Committee
--------------------
shall constitute a quorum for the purpose of taking action at any meeting.
Action at a meeting taken by a majority of all Committee members then in office
shall be the action of the Committee. Resolutions may be adopted or other
action taken without a meeting upon written consent signed by all of the members
of the Committee. The Committee may designate one of its members or any other
individual to sign any documents on its behalf. No member of the Committee
shall act on any matter which involves his personal interest or benefit under
the Plan as distinguished from the general interest of all Participants. Any
action taken on matters within the discretion of the Committee shall be final
and conclusive as to the parties hereto and as to all Participants or
Beneficiaries claiming any right under the Plan.
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<PAGE>
12.4 POWERS OF COMMITTEE. The Committee shall have sole
-------------------
responsibility for administration of this Plan, and shall supervise and control
the operation of the Plan in accordance with its terms. It shall have the
responsibility, the discretion, the power and the authority to do all things
necessary to accomplish that purpose, including, but not limited to, the
responsibility, discretion, power and authority to do the following:
(a) To construe and interpret the terms and provisions of the
Plan, including disputed or doubtful terms;
(b) To adopt such rules and regulations under the Plan as it may
consider desirable for the administration of the Plan;
(c) To determine all questions of eligibility for participation
under the Plan;
(d) To determine all questions concerning the amount, time and
manner of payment of benefits under the Plan;
(e) To prescribe procedures to be followed by Employees,
Participants and Beneficiaries under the Plan;
(f) To prepare and distribute appropriate information concerning
the Plan;
(g) To issue written directions to the Trustees concerning all
benefits which are to be paid from the Trust pursuant to the Plan; and
(h) To keep such records, make such reports, and do such other
acts as it deems necessary or appropriate in order to comply with the
requirements of the Plan, the Code, ERISA, and governmental regulations
thereunder.
To the maximum extent permitted by law, the Committee's determinations on all
such matters shall be final and binding upon the Sponsoring Company, the
Participating Companies, Participants and other Employees, and all other
parties.
12.5 PROTECTION OF TRUSTEE. The Trustee shall be fully protected in
---------------------
accepting and relying upon a certification in writing by the Committee, signed
by the Secretary or by any two members thereof, to the occurrence or happening
of any event contemplated in this Plan, and the Trustee shall incur no liability
or responsibility for so doing.
12.6 OUTSIDE CONSULTANTS. The Committee may from time to time consult
-------------------
with counsel (who may also be counsel for the Sponsoring Company), and the
opinion of such counsel with respect to legal matters shall be full and complete
authorization and protection in respect to any action taken or suffered by the
Committee in good faith and in accordance with the opinion of such counsel.
The Committee may also engage or consult with accountants (who may
also be accountants for the Sponsoring Company), and the opinion of such
accountants with respect to accounting matters shall be full and complete
authorization and protection in respect to any action taken or suffered by the
Committee in good faith and in accordance with the opinion of such accountants.
12.7 FUNDING POLICY. The Committee shall, at least annually, estimate
--------------
the amount of the benefit payments which the Plan will be required to make,
taking into account anticipated employee retirements and terminations and all
other relevant factors, and, on the basis of such estimate, determine the Plan's
need for liquidity. The Committee shall report each such determination in
writing to the Trustee for consideration in the formulation of investment policy
for the Trust.
12.8 EXPENSES. The members of the Committee shall serve without
--------
compensation for services as such, but all expenses of the Committee shall be
paid by the Sponsoring Company.
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12.9 INDEMNIFICATION AND INSURANCE.
-----------------------------
(a) INSURANCE. The Sponsoring Company may, in its discretion,
---------
obtain, pay for, and keep current a policy or policies of insurance,
insuring members of the Committee and any other employee to whom
responsibilities under the Plan have been assigned against any and all
liabilities, costs, and expenses incurred by such persons as a result of
any act, or omission to act, in connection with the performance of their
duties, responsibilities, and obligations under the Plan and any applicable
Federal or state law.
(b) INDEMNITY. If the Sponsoring Company does not obtain,
---------
pay for, and keep current the type of insurance policy or policies referred
to in Section 12.9(a), or if such insurance is provided but any of the
members of the Committee or other employee to whom responsibilities under
the Plan have been assigned incurs any costs or expenses which are not
covered under such policies, then, in either event, the Sponsoring Company
shall, to the extent permitted by law, indemnify such member of the
Committee or other such employee against any and all claims, loss, damages,
expense (including legal fees) and liability arising from any action or
failure to act, except when the same is judicially determined to be due to
the gross negligence or willful misconduct of such member or other
employee.
12.10 CLAIMS PROCEDURE. The Committee shall make all determinations
----------------
as to the right of any person to a benefit under the Plan. If the Committee
denies in whole or in part any claim for a benefit under the Plan by a
Participant or a Beneficiary, the Committee shall furnish the claimant with
notice of the decision not later than 90 days after receipt of the claim, unless
special circumstances require an extension of time for processing the claim. If
such an extension of time for processing is required, written notice of the
extension shall be furnished to the claimant prior to the termination of the
initial 90-day period. In no event shall such extension exceed the period of 90
days from the end of such initial period. The extension notice shall indicate
the special circumstances requiring an extension of time and the date by which
the Committee expects to render the final decision.
The written notice which the Committee shall provide to every claimant
who is denied a claim for benefits shall set forth in a manner calculated to be
understood by the claimant:
(a) The specific reason or reasons for the denial;
(b) Specific reference to pertinent Plan provisions on which the
denial is based;
(c) A description of any additional material or information
necessary for the claimant to perfect the claim and an explanation of why
such material or information is necessary; and
(d) Appropriate information as to the steps to be taken if the
claimant wishes to submit his claim for review.
A claimant or his authorized representative may request a review of
the denied claim by the Committee. Such request shall be made in writing and
shall be presented to the Committee not more than 60 days after receipt by the
claimant of written notification of the denial of a claim. The claimant shall
have the right to review pertinent documents and to submit issues and comments
in writing. The claimant may, if he so desires, request a hearing before a
decision is made by the Committee, in which case the Committee may designate one
of its members to conduct such hearing and report to the full Committee. Any
such hearing shall be held within 60 days of the claimant's request therefor.
If a hearing is not requested by a claimant, the Committee shall review the
claim based upon the pertinent documents and upon the consideration of such
issues and comments as the claimant may direct in writing to the Committee. The
Committee shall make its decision on review not later than 60 days after receipt
of the claimant's request for review, unless special circumstances (such as the
holding of a hearing at the claimant's request) require an extension of time, in
which case a decision shall be rendered as soon as possible but not later than
120 days after receipt of the request for review. If an extension of time for
review is required because of special circumstances, written notice of the
extension shall be furnished to the claimant prior to the commencement of the
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extension. The decision on review shall be in writing and shall include specific
reasons for the decision, written in a manner calculated to be understood by the
claimant, and specific references to the pertinent Plan provisions on which the
decision is based.
It is intended that the claims procedure of this Plan be administered
in accordance with the claims procedure regulations of the Department of Labor
as set forth in 29 CFR (S) 2560.503-1.
ARTICLE XIII
THE TRUSTEE
-----------
13.1 TRUST ASSETS. The Trust which is a part of this Plan shall
------------
consist of all amounts contributed under the Plan and transferred to it as of
January 1, 1995, from the Prior Plan, and the earnings and appreciation thereon,
less depreciation thereon and less payments made by the Trustee under the Trust
Agreement entered into pursuant to the Plan.
13.2 DUTIES OF TRUSTEE. The Trustee shall hold, invest, reinvest and
-----------------
administer the Trust assets, under the Plan, as fully set forth in the Trust
Agreement entered into pursuant to the Plan.
13.3 TRUST PURPOSE. Except as provided in Sections 3.11 and
-------------
4.2(b)(4), all contributions are made for the exclusive benefit of the
Participants and their Beneficiaries, and such contributions shall not be used
for, or diverted to, purposes other than for the exclusive benefit of the
Participants and their Beneficiaries (including the costs of maintaining and
administering the Plan and Trust).
13.4 REMOVAL AND RESIGNATION OF TRUSTEE. The Board of Directors of
----------------------------------
the Sponsoring Company may remove the Trustee at any time upon delivery of
written notice as provided in the Trust Agreement; and the Trustee may resign at
any time upon delivery of such notice to the Sponsoring Company, as provided in
the Trust Agreement. Upon such removal or resignation of the Trustee, the
Sponsoring Company shall appoint a successor trustee.
ARTICLE XIV
PLAN AMENDMENT, MERGER, CONSOLIDATION, OR TERMINATION
-----------------------------------------------------
14.1 AMENDMENT.
---------
(a) GENERAL. Subject to the provisions of Article XV and the
-------
limitations set forth below in this Section 14.1, the Sponsoring Company
shall have the right to amend the Plan and the Trust Agreement with respect
to all Participating Companies by action of the Board of Directors at any
time and from time to time, to the extent it may deem advisable or
appropriate.
(b) LIMITATIONS. No amendment shall cause or permit:
-----------
(1) The duties or liabilities of the Trustee to be
increased without its written consent;
(2) Any part of the corpus of the Trust or of the income
thereof to be used for, or diverted to, purposes other than the
exclusive benefit of the Participants or their Beneficiaries, except
as provided in Sections 3.11 and 4.2(b)(4);
(3) Any Participant or his Beneficiary to be deprived of
any benefit to which he was entitled under the Plan by reason of
contributions made by a Participating Company or Participant prior to
such amendment, unless such amendment is necessary either to conform
the Plan to, or to satisfy the conditions of, any law, governmental
regulation, or ruling, or to permit the Plan to meet the
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requirements of the Code or ERISA; or
(4) In the case of an Employee who is a Participant on (i)
the date the amendment is adopted, or (ii) the date the amendment is
effective, if later, the nonforfeitable percentage (determined as of
the date specified in (i) or (ii)) of such Employee's right to his
Accrued Benefit derived from Participating Company contributions to be
less than such percentage computed under the Plan without regard to
such amendment.
(c) AMENDMENT OF VESTING SCHEDULE. If the Plan's vesting
-----------------------------
schedule is amended or 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 or
from a top-heavy vesting schedule, each Participant with at least three
years of service with the Employer may elect, within a reasonable period
after the amendment or change, to have his nonforfeitable percentage
computed under the Plan without regard to such amendment or change.
The period during which the election may be made shall commence
with the date the amendment is adopted or deemed to be made and shall end
on the latest of:
(1) 60 days after the amendment is adopted;
(2) 60 days after the amendment becomes effective; or
(3) 60 days after the Participant is issued a written
notice of the amendment by the Employer or Committee as Plan
administrator.
(d) FURTHER LIMITATIONS UPON AMENDMENT. No amendment to the Plan
----------------------------------
shall be effective to the extent that it has the effect of decreasing a
Participant's Accrued Benefit. For purposes of this Section 14.1(d), 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 such amendment is adopted or the date it becomes
effective, the nonforfeitable percentage (determined as of such date) of
any Employee's right to his Employer-derived Accrued Benefit shall not be
less than his percentage computed under the Plan without regard to such
amendment.
(e) AMENDMENT PROCEDURE. Any amendment shall be made only
-------------------
pursuant to resolution(s) of the Board of Directors of the Sponsoring
Company adopted at a duly held meeting of said Board of Directors or by
unanimous written consent of said Board of Directors. A certified copy of
the resolutions adopting any amendment and a copy of the adopted amendment
as executed by the Sponsoring Company shall be delivered to the Committee
and to the Trustee.
Upon the taking of such action by the Board of Directors, the
Plan or Trust Agreement shall be deemed amended as of the date specified as
the effective date by such Board of Directors action or in the instrument
of amendment. The effective date of any amendment may be before, on, or
after the date of such Board of Directors action.
14.2 MERGER, CONSOLIDATION OR TRANSFER OF ASSETS. The Plan and Trust
-------------------------------------------
shall not be merged or consolidated with, nor shall any assets or liabilities be
transferred to, any other plan and trust, unless the benefits payable to each
Participant if the Plan or other plan were terminated immediately after such
action would be equal to or greater than the benefits which would have been
payable to each Participant if the Plan or other plan had been terminated
immediately before such action.
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14.3 TERMINATION OF PLAN AND TRUST; DISCONTINUANCE OF CONTRIBUTIONS.
--------------------------------------------------------------
(a) RIGHT TO TERMINATE PLAN AND/OR TO DISCONTINUE CONTRIBUTIONS.
-----------------------------------------------------------
Each Participating Company contemplates that the Plan shall be permanent
and that it shall be able to make contributions to the Plan. Nevertheless,
if a Participating Company determines by its Board of Directors by
resolution(s) adopted at a duly held meeting of said Board of Directors or
by unanimous written consent of said Board of Directors or, if not
incorporated, by its governing entity, by appropriate written action, for
reasons not now foreseen, to terminate (as to such Participating Company)
the Plan and Trust completely, they shall be terminated insofar as they are
applicable to such Participating Company as of the date specified by such
Participating Company. A certified copy of such resolution(s), if it is
incorporated, or of such appropriate written action, if it is not
incorporated, shall be delivered to the Committee and the Trustee. The
Sponsoring Company by its Board of Directors by resolution(s) adopted at a
duly held meeting of said Board of Directors or by unanimous written
consent of said Board of Directors may also terminate the Plan and Trust
completely with respect to all Participating Companies. A certified copy
of such resolution(s) shall be delivered to the Committee and the Trustee
and to each Participating Company.
If a Participating Company by its Board of Directors or other
governing entity determines that it is impossible or inadvisable for it to
make further contributions as provided in the Plan, such Participating
Company may by its Board of Directors by resolution(s) adopted at a duly
held meeting of said Board of Directors or by unanimous written consent of
said Board of Directors or, if it is not incorporated, by its governing
entity, by appropriate written action, without terminating the Trust,
permanently discontinue all further contributions by such Participating
Company. The Sponsoring Company by its Board of Directors, by
resolution(s) adopted at a duly held meeting of said Board of Directors or
by unanimous written consent of said Board of Directors may similarly
discontinue all further contributions by all Participating Companies
without terminating the Trust. A certified copy of such resolution(s) shall
be delivered to the Committee and the Trustee. Thereafter, the Committee
and the Trustee shall continue to administer all the provisions of the Plan
which are necessary and remain in force, other than the provisions relating
to contributions by such Participating Company. However, the Trust shall
remain in existence with respect to such Participating Company and all of
the provisions of the Trust Agreement shall remain in force.
(b) CONTINUANCE OF TRUST AFTER COMPLETE DISCONTINUANCE OF
-----------------------------------------------------
CONTRIBUTIONS TO PLAN AND VESTING OF AFFECTED EMPLOYEES. Upon complete
-------------------------------------------------------
discontinuance of contributions to the Plan, the rights of affected
Employees under the Plan and Trust shall become fully vested and
nonforfeitable, notwithstanding any other provisions of the Plan, but in
all other respects the Plan and Trust shall continue in effect and be
administered in accordance with the provisions of the Plan and Trust
Agreement.
14.4 VESTING AND DISTRIBUTION UPON TERMINATION.
-----------------------------------------
(a) VESTING AND DISTRIBUTION OF TRUST ASSETS UPON TERMINATION OR
------------------------------------------------------------
PARTIAL TERMINATION. Upon termination or partial termination of the Plan,
-------------------
notwithstanding any other provisions of the Plan, the rights under the Plan
and Trust of the affected Employees or, in the case of a partial
termination, of the affected Employees in the terminated portion of the
Plan, shall become vested and nonforfeitable. The Trustee, at the
direction of the Committee, shall make payment of such amounts in
accordance with the terms of the Plan. Upon final termination of the
Trust, at such time as shall be determined by the Sponsoring Company after
notification to the Committee, the Committee shall direct the Trustee to
liquidate the assets held in the Participant's Accounts and, after payment
of all expenses and proportional adjustment of each Participant's Accounts
to reflect income or losses to the date of termination, to distribute in
one lump sum the balance of each Participant's Accrued Benefit to each
Participant, retired Participant, or, if appropriate, to the Participant's
Beneficiary.
(b) DISTRIBUTEES WHOSE WHEREABOUTS ARE UNKNOWN. In the case of
------------------------------------------
any distributee described herein at the time of distribution upon
termination of the Plan or Trust whose whereabouts are unknown, the
Committee shall notify such individual at the last
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known address by certified mail with return receipt requested advising such
individual of the right to such a benefit. If the distributee cannot be
located in this manner, the Trustee shall establish a custodial account for
such individual's benefit in a Federally insured bank, savings and loan
association or credit union in which the individual's account balance shall
be deposited. Upon the distribution of all Plan assets, the Trustee shall
be discharged from all obligations under the Plan and Trust and no
Participant or Beneficiary shall have any further rights or claims
thereunder.
14.5 LIMITATIONS ON DISTRIBUTIONS OF ELECTIVE DEFERRALS.
--------------------------------------------------
(a) GENERAL RULES. Notwithstanding any other provision in the
-------------
Plan, no Elective Deferral (within the meaning of Section 3.10(c)(1)) or
the income allocable thereto shall be distributable earlier than upon one
of the following events:
(1) The Participant's retirement, death, disability or
separation from service;
(2) The termination of the Plan without the maintenance or
establishment of another defined contribution plan (as defined in
section 414(i) of the Code), other than an employee stock ownership
plan (as defined in section 4975(e)(7) or section 409(a) of the Code)
or a simplified employee pension (as defined in section 408(k) of the
Code);
(3) The disposition by the Employer (provided the Employer
is a corporation) to an unrelated corporation of substantially all of
the assets (within the meaning of section 409(d)(2) of the Code) used
by such Employer in a trade or business of such Employer if such
Employer continues to maintain the Plan after the disposition, but
only with respect to a Participant who continues employment with the
corporation acquiring such assets; the sale of 85 percent of the
assets used in a trade or business shall be deemed a sale of
"substantially all" of the assets used in such trade or business;
(4) The disposition by an Employer (provided the Employer
is a corporation) of such Employer's interest in a subsidiary (within
the meaning of section 409(d)(3) of the Code) to an unrelated entity,
if such Employer continues to maintain the Plan after the disposition,
but only with respect to a Participant who continues employment with
such subsidiary ;
(5) The Participant's attainment of age 59-1/2; or
(6) In the case of distributions of Elective Deferrals (and
of income allocable thereto credited to a Participant's account as of
December 31, 1988) but not of amounts treated as Elective Deferrals
(and of income allocable thereto), the Participant's Hardship, as
described in Section 10.2(a).
(b) OTHER RULES.
-----------
(1) RULES APPLICABLE TO DISTRIBUTIONS UPON PLAN
-------------------------------------------
TERMINATION. A distribution may not be made under Section 14.5(a)(2)
-----------
if the Employer establishes or maintains a successor plan. The
definition of "Employer" contained in Section 1.22 is applied as of
the date of Plan termination and a successor plan is any other defined
contribution plan maintained by the same Employer. However, if at all
times during the 24-month period beginning 12 months before the
termination, fewer than two percent of the employees who were eligible
under the defined contribution plan that includes the cash or deferred
arrangement as of the date of Plan termination are eligible under the
other defined contribution plan, the other defined contribution plan
is not a successor plan. The term "defined contribution plan" means a
defined contribution plan as defined in section 414(i) of the Code but
does not include an employee stock ownership plan as defined in
section 4975(e)(7) or section 409(a) of
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the Code or a simplified employee pension (as defined in section
408(k) of the Code. A plan is a successor plan only if it exists at
any time during the period beginning on the date of Plan termination
and ending 12 months after distribution of all assets from the
terminated Plan.
(2) LIMITATIONS APPLY AFTER TRANSFER. The limitations of
--------------------------------
this Section 14.5 shall continue to apply to amounts attributable to
Elective Deferrals (including amounts treated as Elective Deferrals)
and income allocated thereto even if such amounts are transferred to
another qualified plan of any employer except as otherwise provided in
Treas. Reg. (S) 1.401(k)-1(d)(6)(iv).
(c) OTHER BENEFITS NOT CONTINGENT UPON ELECTIVE DEFERRALS. No
-----------------------------------------------------
other employer benefit (other than Employer Matching Contributions) may be
conditioned (directly or indirectly) within the meaning of section 401(k)
the Code and the Treasury regulations issued thereunder upon the Employee's
electing to make or not to make Elective Deferrals under the Plan.
(d) DISTRIBUTION MUST BE LUMP-SUM DISTRIBUTION. An event shall
------------------------------------------
not be treated as described in Section 14.5(a)(2), (3) or (4) with respect
to any Participant unless such Participant receives a lump-sum distribution
within the meaning of section 401(k)(10)(B)(ii) of the Code by reason of
the event.
(e) TRANSFEROR CORPORATION MUST MAINTAIN PLAN. An event shall
-----------------------------------------
not be treated as described in Section 14.5(a)(3) or (4) unless the
transferor corporation continues to maintain the Plan after the
distribution.
14.6 DISTRIBUTIONS UPON PLAN TERMINATION. Subject to Section 14.5,
-----------------------------------
the balances of Participants' Base Contribution Accounts shall be distributed to
Participants or their Beneficiaries as soon as administratively feasible after
the termination of the Plan.
14.7 DISTRIBUTIONS UPON SALE OF ASSETS. Subject to Section 14.5, the
---------------------------------
balances of Participants' Base Contribution Accounts shall be distributed to
Participants as soon as administratively feasible after the disposition, to an
entity that is not a Participating or Affiliated Company, of substantially all
of the assets (within the meaning of section 409(d)(2) of the Code) used by the
Participating Company in the trade or business in which the Participant is
employed, but only if the Participant continues employment with the corporation
acquiring such assets.
14.8 DISTRIBUTIONS UPON SALE OF SUBSIDIARY. Subject to Section 14.5,
-------------------------------------
the balances of Participants' Base Contribution Accounts shall be distributed as
soon as administratively feasible after the disposition, to an entity that is
not a Participating or Affiliated Company, of an incorporated Participating or
Affiliated Company's interest in a subsidiary (within the meaning of section
409(d)(3) of the Code) to Participants who continue employment with such
subsidiary.
ARTICLE XV
ADOPTION OF PLAN BY AFFILIATED COMPANY
--------------------------------------
15.1 ADOPTION OF PLAN AND TRUST. Any Affiliated Company may adopt
--------------------------
this Plan and Trust by action of the Board of Directors or other governing
entity of such Affiliated Company. In addition, the Affiliated Company shall
execute a Plan and Trust Adoption Agreement, in the form attached hereto as
Exhibit A, and may elect in such Adoption Agreement to have special provisions
apply with respect to the Employees of the Affiliated Company which may differ
from the provisions of the Plan applicable to other Employees. An Affiliated
Company which adopts the Plan is thereafter a Participating Company with respect
to its Employees for purposes of the Plan except that such adopting Affiliated
Company delegates to the Board of Directors of the Sponsoring Company the power
to amend and terminate the Plan and Trust Agreement as set forth in Section
15.6. The terms of the Plan, as the same may be modified by the Adoption
Agreement, shall govern the rights of employees of the Participating Company.
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15.2 WITHDRAWAL FROM PLAN. Any Participating Company by its Board of
--------------------
Directors or other governing entity may at any time withdraw from the Plan upon
giving the Committee and the Trustee at least 30 days' notice in writing of its
intention to withdraw. Upon the withdrawal of a Participating Company pursuant
to this Section 15.2, the Trustee shall segregate a portion of the assets in the
Trust, the value of which shall equal the total amount credited to the accounts
of Participants of the withdrawing Participating Company. The determination of
which assets are to be so segregated shall be made by the Trustee in its sole
discretion.
15.3 EXCLUSIVE PURPOSE OF TRUST. Neither the segregation and transfer
--------------------------
of the Trust assets upon the withdrawal of a Participating Company nor the
execution of a new trust agreement by such withdrawing Participating Company
shall operate to permit any part of the Trust to be used for or directed to
purposes other than for the exclusive benefit of the Participants.
15.4 APPLICATION OF WITHDRAWAL PROVISIONS. The withdrawal provisions
------------------------------------
contained in Sections 15.2 and 15.3 shall be applicable only if the withdrawing
Participating Company continues to cover its Participants and eligible Employees
in another profit-sharing plan and trust qualified under sections 401 and 501 of
the Code. Otherwise, the termination provisions of the Plan and Trust shall
apply.
15.5 SINGLE PLAN. Notwithstanding any other provision set forth
-----------
herein, the Plan, as adopted pursuant to this Article XV by the Sponsoring
Company and each adopting Affiliated Company, shall constitute a single plan, as
such term is defined in Treas. Reg. (S) 1.414(l)-1(b)(1), as to the Sponsoring
Company and each adopting Affiliated Company.
15.6 SPONSORING COMPANY APPOINTED AGENT OF ADOPTING AFFILIATED
---------------------------------------------------------
COMPANIES. Each adopting Affiliated Company appoints the Board of Directors of
- ---------
the Sponsoring Company as its agent to exercise on its behalf all of the power
and authority conferred upon the Sponsoring Company by this Plan and Trust
Agreement, including, without limitation, the power to amend this Plan and Trust
Agreement as set forth in Article XIV and the power to terminate this Plan
and/or the Trust Agreement as set forth in Article XIV. The authority of the
Board of Directors of the Sponsoring Company to act as agent of any adopting
Affiliated Company shall terminate only if the part of the Plan's assets held
for the benefit of the employees of such adopting Affiliated Company shall be
segregated in a separate trust as provided in Section 15.2 and such adopting
Affiliated Company thereupon withdraws from the Plan in accordance with Section
15.2.
ARTICLE XVI
MISCELLANEOUS
-------------
16.1 EXPENSES OF PLAN. Except as provided in the Trust Agreement, the
----------------
expenses of the Plan shall be paid either out of the Trust Fund or by the
Participating Companies, as the Sponsoring Company shall determine.
16.2 PLAN RESPONSIBILITIES. The Trustee shall have sole
---------------------
responsibility for the administration of the Trust Fund. The Participating
Companies shall be responsible only to pay over to the Trustee the contributions
as provided in the Plan, and shall have no other responsibility for the
administration of the Trust. Each Participant or his Beneficiary shall look
solely to the Trust for any payments or benefits under the Plan.
16.3 EMPLOYMENT MAY BE TERMINATED. The establishment of the Plan and
----------------------------
of the Trust Agreement shall not confer upon any Employee or Participant the
right to continue in the employ of a Participating Company, and each
Participating Company expressly reserves the right to terminate the employment
of any Employee, whether or not a Participant, whenever, in the Participating
Company's sole judgment, the interest of the Participating Company may so
require.
16.4 RIGHTS UNDER PLAN. No Participant shall have any right to, or
-----------------
interest in, any assets of the Trust, except as provided under the Plan, and
then only to the extent of the benefits payable under the Plan to such
Participant out of assets of the Trust. All payments of benefits as
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provided for in this Plan shall be made solely out of the assets of the Trust.
16.5 CONSTRUCTION. Construction and administration of this Plan and
------------
of the Trust Agreement shall be governed by Federal law under ERISA and, to the
extent not governed by Federal law, by Pennsylvania law.
16.6 APPLICATION OF PLAN. Except as otherwise required under other
-------------------
provisions of the Plan, this Plan shall not apply to any Employee who retired or
otherwise separated from service with a Participating Company before January 1,
1995.
16.7 GENDER AND NUMBER. Whenever any words are used herein in any
-----------------
specific gender, they shall be construed as though they were also used in any
other applicable gender. The singular form, whenever used herein, shall mean or
include the plural form where applicable.
16.8 BONDING. Except as provided in section 412 of ERISA with
-------
respect to certain banks and other financial institutions, every fiduciary of
the Plan and every person who handles funds or other property of the Plan shall
be bonded as provided in such section 412. The amount of such bond shall be
fixed at the beginning of each Plan Year and shall not be less than ten percent
of the amount of funds handled. In no case shall the bond be less than $1,000
nor more than $500,000, except as otherwise prescribed by the Secretary of
Labor, after due notice and opportunity for hearing to all interested parties.
16.9 HEADINGS. The headings are for reference only. In the event
--------
of a conflict between a heading and the content of an Article or Section or
portion thereof, the content of the Article or Section or portion thereof shall
control.
16.10 UNCLAIMED BENEFITS. Except as otherwise provided in Section
------------------
14.4(b), any benefits payable to a Participant or Beneficiary which are not
claimed for a period of five years from the date of entitlement as determined by
the Committee and following a diligent effort to locate such Participant or
Beneficiary, with the approval of the Committee, shall be forfeited and applied
in accordance with the terms of Section 5.8; provided, however, that such
forfeited benefits shall be reinstated if a claim for such forfeited benefits is
made by the Participant or Beneficiary.
16.11 FUNDING ENTITY. The Trust shall be the funding entity for the
--------------
Plan.
ARTICLE XVII
TOP-HEAVY PROVISIONS
--------------------
17.1 DEFINITIONS. For purposes of this Article XVII, the following
-----------
terms shall have the following meanings:
(a) "DETERMINATION DATE" shall mean, with respect to any Plan
--------------------
Year, the Top-Heavy Valuation Date of the preceding Plan Year.
(b) "DETERMINATION PERIOD" shall mean the Plan Year containing
----------------------
the Determination Date and the four preceding Plan Years.
(c) "KEY EMPLOYEE" shall mean any Employee or former Employee
--------------
(and the beneficiaries of any such Employee) who at any time during the
Determination Period is:
(1) An officer of the Employer having annual compensation
greater than 50 percent of the dollar limitation under section
415(b)(1)(A) of the Code;
(2) An owner (or a deemed owner under section 318 of the
Code) of one of the ten largest interests in the Employer, if such
individual's compensation from the Employer exceeds 100 percent of the
dollar limitation in effect under section 415(c)(1)(A) of the Code;
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<PAGE>
(3) A five-percent owner of the Employer; or
(4) A one-percent owner of the Employer having annual
compensation from the Employer of more than $150,000.
Annual compensation means Limitation Compensation, but including
amounts contributed by the Employer pursuant to a salary reduction
arrangement which are excludable from the Employee's gross income under
sections 125, 402(e)(3), 402(h)(1)(B) or 403(b) of the Code.
For purposes of Section 17.1(c)(1), no more than 50 Employees
(or, if less, the greater of three or ten percent of the Employees) shall
be treated as officers.
For purposes of Section 17.1(c)(2), if two Employees have the
same interest in the Employer, the Employee having the greater annual
compensation from the Employer shall be treated as having the larger
interest.
The determination of who is a Key Employee shall be made in
accordance with section 416(i)(1) of the Code and the Treasury regulations
thereunder.
(d) "NON-KEY EMPLOYEE" shall mean any Employee who is not a Key
------------------
Employee.
(e) "PERMISSIVE AGGREGATION GROUP" shall mean the Required
------------------------------
Aggregation Group plus any other plan or plans of the Participating
Companies and Affiliated Companies which, when considered as a group with
the Required Aggregation Group, would continue to satisfy the requirements
of sections 401(a)(4) and 410 of the Code.
(f) "REQUIRED AGGREGATION GROUP" shall mean:
----------------------------
(1) Each qualified retirement plan of the Participating
Companies and Affiliated Companies in which at least one Key Employee
participates or participated at any time during the Determination
Period (regardless of whether such plan has terminated); and
(2) Any other qualified retirement plan of the
Participating Companies and Affiliated Companies which enables a plan
described in Section 17.1(f)(1) to meet the requirements of section
401(a)(4) or 410 of the Code .
(g) "TOP-HEAVY PLAN" shall mean this Plan if any of the
----------------
following conditions exists:
(1) The Top-Heavy Ratio for this Plan exceeds 60 percent,
and this Plan is not part of a Required Aggregation Group or a
Permissive Aggregation Group;
(2) This Plan is a part of a Required Aggregation Group but
not part of a Permissive Aggregation Group, and the Top-Heavy Ratio
for the Required Aggregation Group exceeds 60 percent; or
(3) This Plan is a part of a Required Aggregation Group and
part of a Permissive Aggregation Group, and the Top-Heavy Ratio for
the Permissive Aggregation Group exceeds 60 percent.
(h) "TOP-HEAVY RATIO" shall mean a fraction determined as
-----------------
follows:
(1) If the Employer maintains one or more Defined
Contribution Plans (within the meaning of Section 4.1(m)) (including
any simplified employee
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<PAGE>
pension) and the Employer has not maintained any Defined Benefit Plan
(within the meaning of Section 4.1(k)) which, during the five-year
period ending on the Determination Date, has or has had accrued
benefits, the Top-Heavy Ratio for this Plan alone or for the Required
or Permissive Aggregation Group, as applicable, shall mean 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 during the five-year period ending on the
Determination Date), and the denominator of which is the sum of all
account balances (including any part of any account balance
distributed during the five-year period ending on the Determination
Date), both determined in accordance with section 416 of the Code and
the Treasury regulations thereunder. Both the numerator and
denominator of the Top-Heavy Ratio shall be 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 section 416 of
the Code and the Treasury regulations thereunder.
(2) If the Employer maintains one or more Defined
Contribution Plans (including any Simplified Employee Pension) and the
Employer maintains or has maintained one or more Defined Benefit Plans
which, during the five-year period ending on the Determination
Date,has or has had any accrued benefits, the Top-Heavy Ratio for any
Required or Permissive Aggregation Group, as applicable, shall be a
fraction, the numerator of which is the sum of account balances under
the aggregated Defined Contribution Plan or Plans for all Key
Employees, determined in accordance with Section 17.1(h)(1), plus the
present value of accrued benefits under the aggregated Defined Benefit
Plan or Plans for all Key Employees as of the Determination Date, 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 Section 17.1(h)(1), plus the present
value of accrued benefits under the Defined Benefit Plan or Plans for
all Participants as of the Determination Date, all determined in
accordance with section 416 of the Code and the Treasury regulations
thereunder. The accrued benefits under a Defined Benefit Plan in both
the numerator and denominator of the Top-Heavy Ratio shall include any
accrued benefits distributed during the five-year period ending on the
Determination Date.
(3) For purposes of Section 17.1(h)(1) and Section
17.1(h)(2), the value of account balances and the present value of
accrued benefits shall be determined as of the most recent Top-Heavy
Valuation Date that falls within or ends with the 12-month period
ending on the Determination Date, except as provided in section 416 of
the Code and the Treasury regulations thereunder for the first and
second plan years of a Defined Benefit Plan. The account balances and
accrued benefits of a Participant (i) who is not a Key Employee but
who was a Key Employee in a prior year, or (ii) who has not been
credited with at least one hour of service with any Employer
maintaining the plan at any time during the five-year period ending on
the Determination Date shall be disregarded. The calculation of the
Top-Heavy Ratio, including the extent to which distributions,
rollovers, and transfers are taken into account, shall be made in
accordance with section 416 of the Code and the Treasury regulations
thereunder. Deductible employee contributions shall not be taken into
account for purposes of computing the Top-Heavy Ratio. 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.
(4) The accrued benefit of a Participant other than a Key
Employee shall be determined under (i) the method, if any, that
uniformly applies for accrual purposes under all Defined Benefit Plans
maintained by the Employer, or (ii) if there is no such method, as if
such benefit accrued not more rapidly than the slowest accrual rate
permitted under the fractional rule of section 411(b)(1)(C) of the
Code.
(5) For purposes of establishing the present value to
compute the Top-Heavy Ratios of Section 17.1(h), any benefit shall be
discounted only for mortality and interest based on the following:
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<PAGE>
(i) INTEREST RATE. The interest rate used shall be
-------------
the interest rate or rates which would be used, as of the date
distribution commences under a Defined Benefit Plan, by the
Pension Benefit Guaranty Corporation for purposes of determining
the present value of a participant's benefits under such Defined
Benefit Plan if such Defined Benefit Plan had terminated on the
date distribution commences with insufficient assets to provide
benefits guaranteed by the Pension Benefit Guaranty Corporation
on that date. For purposes of this provision, the "date
distribution commences" shall mean the Top-Heavy Valuation Date.
(ii) MORTALITY TABLE. The mortality table used shall
---------------
be the 1984 Unisex Mortality Table.
(i) "TOP-HEAVY VALUATION DATE" shall mean, for purposes of
--------------------------
calculating the Top-Heavy Ratios, the last day of each Plan Year.
17.2 SPECIAL TOP-HEAVY PROVISIONS. Notwithstanding any other
----------------------------
provision of the Plan to the contrary, the following provisions of this Section
17.2 shall automatically become operative and shall supersede any conflicting
provisions of the Plan if, in any Plan Year, the Plan is a Top-Heavy Plan:
(a) MINIMUM ALLOCATION.
------------------
(1) GENERAL. Except as otherwise provided in Section
-------
17.2(a)(3), the Employer contributions (but not including for this
purpose Employer Matching or Base Contributions) and forfeitures
allocated for any Plan Year in which the Plan is a Top-Heavy Plan on
behalf of any Participant who is a Non-Key Employee shall not be less
than the lesser of either three percent of such Participant's
Limitation Compensation for such Plan Year (reduced by any Employer
contribution and/or forfeiture allocated to such Non-Key Employee
under any other qualified defined contribution plan of the Employers),
as limited by section 401(a)(17) of the Code or, in the case where the
Employer has no Defined Benefit Plan which designates this Plan to
satisfy section 401 of the Code, the largest percentage of Employer
contributions (including for this purpose Employer Matching and/or
Base Contributions) and forfeitures, as a percentage of the Key
Employee's Limitation Compensation, as limited by section 401(a)(17)
of the Code, allocated on behalf of any Key Employee for that Plan
Year under this Plan or under any other qualified Defined Contribution
Plan of the Employers. The minimum allocation shall be determined
without regard to any Social Security contribution. This minimum
allocation shall be made even though, under other Plan provisions, the
Participant would not otherwise be entitled to receive an allocation,
or would have received a lesser allocation in the Plan Year because :
(i) The Participant failed to complete a year of
service for benefit accrual;
(ii) The Participant failed to make mandatory
employee contributions to the Plan; or
(iii) The Participant's Limitation Compensation was
less than a stated amount.
(2) NONFORFEITABILITY OF MINIMUM ALLOCATION. The minimum
---------------------------------------
allocation required (to the extent required to be nonforfeitable under
section 416(b) of the Code) may not be forfeited under section
411(a)(3)(B) or 411(a)(3)(D) of the Code.
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<PAGE>
(3) EXCEPTIONS.
----------
(i) LAST PAY OF PLAN YEAR RULE. The provisions in
--------------------------
Section 17.2(a)(1) shall not apply to any Participant who was not
employed by the Employer on the last day of the Plan Year.
(ii) MINIMUM ALLOCATION OR BENEFIT PROVIDED UNDER
--------------------------------------------
ANOTHER PLAN. The provisions in Section 17.2(a)(1) shall also
------------
not apply to any Participant to the extent the Participant is
covered under any other qualified plan(s) of the Employer and the
Employer has provided that the minimum allocation or benefit
requirements applicable to Top-Heavy Plans shall be met in the
other qualified plan(s).
(b) VESTING. The Participant shall at all times have a
-------
nonforfeitable right to all of his Accrued Benefit under the Plan
attributable to Base Contributions, Employee After-Tax Contributions, and
Supplemental Contributions. Effective January 1, 1995, a Participant's
interest in his Employer After-Tax Matching Contribution Account shall be
fully vested at all times. For any Plan Year in which the Plan is a Top-
Heavy Plan, the minimum vesting schedule set forth below shall
automatically apply to the Plan. Under said minimum vesting schedule the
Participant shall have a nonforfeitable right to a percentage of his
Accrued Benefit attributable to Employer Profit-Sharing Contributions and
Employer Matching Contributions determined under the following table:
YEARS OF VESTING SERVICE NONFORFEITABLE PERCENTAGE
------------------------ -------------------------
Less than 2 0
2 20
3 40
4 60
5 80
6 or more 100
The minimum vesting schedule applies to all benefits within the
meaning of section 411(a)(7) of the Code except those attributable to
Employee contributions, including benefits accrued before the effective
date of section 416 of the Code and benefits accrued before the Plan became
a Top-Heavy Plan. Further, no decrease in a Participant's nonforfeitable
percentage may occur in the event the Plan's status as a Top-Heavy Plan
changes for any Plan Year. However, this Article XVII does not apply to
the account balances of any Employee who does not have an Hour of Service
after the Plan has initially become a Top-Heavy Plan, and such Employee's
account balance attributable to Employer contributions and forfeitures
shall be determined without regard to this Article XVII.
(c) ADJUSTMENT TO CODE SECTION 415 LIMITS. For any Plan Year in
-------------------------------------
which the Plan is a Top-Heavy Plan, Section 4.4(d)(1) and 4.4(d)(2) shall
be applied by substituting 100 percent for 125 percent where such percent
appears therein.
(d) CESSATION OF APPLICATION OF PROVISIONS. In the event that
--------------------------------------
Congress should provide by statute, or the Treasury Department should
provide by regulation or ruling, that the limitations provided in this
Article XVII are no longer necessary for the Plan to meet the requirements
of section 401 of the Code or other applicable law then in effect, such
limitations shall become void and shall no longer apply, without the
necessity of further amendment to the Plan.
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<PAGE>
IN WITNESS WHEREOF, SHARED MEDICAL SYSTEMS CORPORATION has caused
these presents to be duly executed as of this _____ day of ________________,
1995.
ATTEST: SHARED MEDICAL SYSTEMS CORPORATION
[CORPORATE SEAL]
____________________________ By:________________________________________
Bonnie L. Shuman, Assistant R. James Macaleer, Chairman and
Secretary Chief Executive Officer
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<PAGE>
EXHIBIT A
(PLAN AND TRUST ADOPTION AGREEMENT)
NOTE: Exhibit A is not to be completed or executed. If an Affiliated Company
adopts the Plan and Trust Agreement, a separate instrument following the form of
this Exhibit A shall be completed and filed with the Committee.
ADOPTION OF
SMS RETIREMENT SAVINGS PLAN AND TRUST AGREEMENT
BY
[NAME OF AFFILIATED COMPANY]
--------------------------
By executing this Adoption Agreement, [NAME OF AFFILIATED COMPANY], an
--------------------------
Affiliated Company, as defined in the Plan, on this _______ day of __________,
19___, hereby adopts the SMS RETIREMENT SAVINGS PLAN ("Plan") and the SMS
RETIREMENT SAVINGS PLAN TRUST AGREEMENT (the "Trust Agreement"), the terms of
which Plan and Trust Agreement are incorporated herein by reference, and by
adopting said Plan and Trust Agreement hereby becomes a Participating Company in
said Plan and Trust Agreement.
1. The effective date of the adoption of the Plan and Trust Agreement by
the Affiliated Company is ___________________, 19___.
2. [NAME OF AFFILIATED COMPANY] adopted the Plan and Trust Agreement on
--------------------------
_______________________, 19___.
3. An Affiliated Company may elect to have special provisions apply with
respect to Employees of the Affiliated Company. Check if applicable:
[_] Modifications:______________________________________________________
ATTEST: [NAME OF AFFILIATED COMPANY]
[SEAL] --------------------------
_________________ By: __________________________
Secretary President
ADOPTION AGREED TO BY:
SPONSORING COMPANY:
ATTEST: SHARED MEDICAL SYSTEMS CORPORATION
[CORPORATE SEAL]
___________________________ By:___________________________________
James C. Kelly, Secretary R. James Macaleer, Chairman and
Chief Executive Officer
TRUSTEE:
ATTEST: THE VANGUARD FIDUCIARY TRUST COMPANY
COMPANY
[CORPORATE SEAL]
___________________ By:________________________
Trust Officer Vice President
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<PAGE>
EXHIBIT A-1
LIST OF PARTICIPATING COMPANIES
-------------------------------
The following is a list of the Participating Companies:
(1) SHARED MEDICAL SYSTEMS CORPORATION
(2) HEALTHCARE DATA EXCHANGE CORPORATION
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<PAGE>
PLAN AND TRUST ADOPTION AGREEMENT
HEALTHCARE DATA EXCHANGE CORPORATION
ADOPTION OF
SMS RETIREMENT SAVINGS PLAN AND TRUST AGREEMENT
BY
HEALTHCARE DATA EXCHANGE CORPORATION
------------------------------------
(NAME OF AFFILIATED COMPANY)
By executing this Adoption Agreement, HEALTHCARE DATA EXCHANGE CORPORATION,
------------------------------------
an Affiliated Company, as defined in the Plan, as of January 1, 1995, hereby
adopts the SMS RETIREMENT SAVINGS PLAN ("Plan") and the SMS RETIREMENT SAVINGS
PLAN TRUST AGREEMENT (the "Trust Agreement"), the terms of which Agreement are
incorporated herein by reference, and by adopting said Plan and Trust Agreement
hereby becomes a Participating Company in said Plan and Trust Agreement.
1. The effective date of the adoption of the Plan and Trust Agreement by
the Affiliated Company is January 1, 1995.
2. HEALTHCARE DATA EXCHANGE CORPORATION adopted the Plan and Trust
Agreement as of January 1, 1995.
3. An Affiliated Company may elect to have special provisions apply with
respect to Employees of the Affiliated Company. Check if applicable:
[_] Modifications:____________________________________________
ATTEST: HEALTHCARE DATA EXCHANGE CORPORATION
------------------------------------
Name of Affiliated Company
[CORPORATE SEAL]
__________________________ By:_______________________________
Secretary President
ATTEST: ADOPTION AGREED TO BY:
SPONSORING COMPANY:
[CORPORATE SEAL] SHARED MEDICAL SYSTEMS CORPORATION
__________________________ By:________________________________
James C. Kelly, Secretary R. James Macaleer, Chairman and
Chief Executive Officer
ATTEST: Trustee:
THE VANGUARD FIDUCIARY TRUST COMPANY
[CORPORATE SEAL]
_________________________ By:________________________________
Trust Officer Vice-President
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