<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
Registration Statement under the Securities Act of 1933
AZTEC MANUFACTURING CO.
(Exact name of issuer as specified in its charter)
Texas 75-0948250
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
400 North Tarrant Street, Crowley, Texas 76036
(Address of Principal Executive Offices) (ZIP Code)
AZTEC MANUFACTURING CO. EMPLOYEE BENEFIT PLAN AND TRUST
(Full title of the plan)
L. C. MARTIN
400 North Tarrant Road
Crowley, Texas 76036
(Name and address of agent for service)
(817) 297-4361
(Telephone number, including area code, of agent for service)
Copy to:
Shannon, Gracey, Ratliff & Miller, L.L.P.
1600 Bank One Tower
500 Throckmorton Street
Fort Worth, Texas 76102
Attention: Sam Rosen, Esq.
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Proposed Maximum Proposed Maximum Amount of
Securities to be Amount to be Offering Price Aggregate Registration Fee
Registered (1) Registered (1)(2) Per Share (1)(2) Offering Price (1)(2) (1)(2)
<S> <C> <C> <C> <C>
Aztec Manufacturing
Co. Common Stock 48,737 $ 9.375 $ 456,909 $ 127.02
</TABLE>
<PAGE>
(1) Estimated solely for purpose of calculating the registration fee pursuant
to Rule 457(b).
(2) Based on a market value of $9.375 per share, which is the average of the
high and low prices of Aztec Manufacturing Co. common stock on the New York
Stock Exchange on December 3, 1999, as reported in the Wall Street Journal.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents and all documents subsequently filed by Aztec
Manufacturing Co. ("Company" or "Registrant") pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Securities Exchange Act of 1934, prior to the filing of a
post-effective amendment to the Registration Statement which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and shall be deemed to be a part hereof from the date of
the filing of such documents:
(a) The Company's Annual Report on Form 10-K for the year ended
February 28, 1999;
(b) The Company's Quarterly Reports on Form 10-Q for the
quarters ended May 31, 1999 and August 31, 1999, and the
Company's Current Report on Form 8-K dated September 15,
1999, as amended on November 15, 1999;
(c) "Item 1. Description of Registrant's Securities to be
Registered" in the Company's Registration Statement on Form
8-A (File No. 001-12777) describing the Company's common
stock, as filed with the Securities and Exchange Commission
on February 24, 1997.
Item 4. Description of Securities
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Certain legal matters relating to the Plan have been passed upon for
the Registrant by Shannon, Gracey, Ratliff & Miller, L.L.P., 500 Throckmorton
Street, Suite 1600, Fort Worth, Texas 76102. At the time such legal matters were
undertaken, Mr. Sam Rosen, a partner in Shannon, Gracey, Ratliff & Miller,
L.L.P., was a director and the secretary of the Registrant and was the
beneficial owner of 14,339 shares of Registrant common stock and exercisable
options to purchase
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<PAGE>
an additional 4,100 shares of Registrant common stock. It is expected that this
amount may change from time to time.
Item 6. Indemnification of Directors and Officers.
Section 2.02-1 of the Texas Business Corporation Act (the "TBCA")
empowers a corporation to indemnify its directors and officers and to purchase
and maintain liability insurance for directors and officers. Section 2.02-1 of
the TBCA permits indemnification of directors and officers of corporations under
certain conditions and subject to certain limitations and, under certain
circumstances, requires such indemnification. The TBCA provides further that a
provision for indemnification of a director, whether contained in the articles
of incorporation, the bylaws, a resolution of shareholders or directors, an
agreement, or otherwise, is valid only to the extent it is consistent with
Article 2.02-1 of the TBCA, as limited by the articles of incorporation, if such
limitation exists. Article 11 of the Registrant's Articles of Incorporation
contains a provision providing for indemnification of directors and officers to
the full extent permitted by law. Section 8.01 of the Registrant's Bylaws, as
amended, contains a provision providing for indemnification to the full extent
permitted by law.
Item 7. Exemption from Registration Claimed
Not Applicable.
Item 8. Exhibits
Exhibit Number and Description Page Number
------------------------------ -----------
(4) Instruments defining the rights of security
holders, including indentures
(4.1) Aztec Manufacturing Co. Employee
Benefit Plan and Trust, effective
November 1, 1999
(4.2) 401(k) Profit Sharing Plan and Trust
(4.3) Addendum
(4.4) Adoption Agreement
(23) Consent of independent auditors
(23.1) Consent of Ernst & Young LLP
(24) Power of Attorney
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<PAGE>
The undersigned Registrant undertakes to submit the plan and any
amendment thereto to the Internal Revenue Service ("IRS") in a timely manner,
and has made or will make all changes required by the IRS in order to qualify
the plan.
Item 9. Undertakings
The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement to include any material information with respect
to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
(2) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof; and
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions summarized under Item 6, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Fort Worth, State of Texas, on December 7, 1999.
AZTEC MANUFACTURING CO.
By: /s/ Dana L. Perry
-----------------------------------------
Dana L. Perry, Principal Accounting
Officer, Principal Financial
Officer and Director
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
* /s/ L.C. Martin Principal Executive Officer December 7, 1999
- ------------------------
L.C. Martin and Director
/s/ Dana L. Perry Principal Accounting Officer, December 7, 1999
- ------------------------
Dana L. Perry Principal Financial Officer,
and Director
* /s/ David H. Dingus President, Chief Operating December 7, 1999
- ------------------------
David H. Dingus Officer and Director
* /s/ Robert H. Johnson Director December 7, 1999
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Robert H. Johnson
* /s/ Martin C. Bowen Director December 7, 1999
- ------------------------
Martin C. Bowen
* /s/ W. C. Walker Director December 7, 1999
- ------------------------
W.C. Walker
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<PAGE>
* /s/ R. J. Schumacher Director December 7, 1999
- ------------------------
R. J. Schumacher
* /s/ Sam Rosen Director December 7, 1999
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Sam Rosen
* /s/ Dr. H. Kirk Downey Director December 7, 1999
- ------------------------
Dr. H. Kirk Downey
* /s/ Kevern R. Joyce Director December 7, 1999
- ------------------------
Kevern R. Joyce
* Power of Attorney
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<PAGE>
EXHIBIT 4.1
AZTEC MANUFACTURING COMPANY
EMPLOYEE BENEFIT PLAN & TRUST
EFFECTIVE MARCH 1, 1993
ADOPTED NOVEMBER 15, 1993
<PAGE>
PLAN DOCUMENT
AZTEC MANUFACTURING COMPANY
EMPLOYEE BENEFIT PLAN & TRUST
<PAGE>
AZTEC MANUFACTURING COMPANY EMPLOYEE BENEFIT PLAN & TRUST
INDEX
PART I
ARTICLE DESCRIPTION PAGE
I INTRODUCTION 1
1.1.1 Adoption and Title 1
1.1.2 Effective Date 1
1.1.3 Purpose 1
II DEFINITIONS
PART II
ARTICLE DESCRIPTION PAGE
I PARTICIPATION 12
2.1.1 Eligibility Requirements 12
2.1.2 Commencement of Participation 12
2.1.3 Participation Upon Re-Employment 12
2.1.4 Termination of Participation 13
2.1.5 Determination of Eligibility 13
2.1.6 Omission of Eligible Employee 13
2.1.7 Inclusion of Ineligible Participants 13
2.1.8 Election Not to Participate 13
2.1.9 Change in Status 13
2.1.10 Existing Participants 14
II CONTRIBUTIONS 15
2.2.1 Employer Contributions 15
2.2.2 Employee Contributions 15
2.2.3 Return of Contributions 16
III ALLOCATIONS 17
2.3.1 Basic Allocation 17
2.3.2 Minimum Allocation 17
2.3.3 Fail-Safe Allocation 17
Effective: March 1, 1993
<PAGE>
IV BENEFITS 19
2.4.1 Distributable Benefit 19
2.4.2 Vesting 19
2.4.3 Leave of Absence 20
2.4.4 Re-Employment 20
2.4.5 Distribution Determination Date 21
2.4.6 Forfeitures 22
V DISTRIBUTIONS 24
2.5.1 Commencement of Distribution 24
2.5.2 Method of Distribution 30
2.5.3 Nature of Distributions 34
2.5.4 Advance Distributions 35
2.5.5 In Service Distributions 36
VI CONTINGENT TOP HEAVY PROVISIONS 37
2.6.1 Top Heavy Requirements 37
2.6.2 Top Heavy Definitions 38
PART III
ARTICLE DESCRIPTION PAGE
I ACCOUNTING 43
3.1.1 Accounts 43
3.1.2 Adjustments 43
II LIMITATIONS 46
3.2.1 Limitations on Annual Additions 46
3.2.2 Controlled Businesses 52
III FIDUCIARIES 54
3.3.1 Standard of Conduct 54
3.3.2 Individual Fiduciaries 54
3.3.3 Disqualification from Service 54
3.3.4 Bonding 54
3.3.5 Prior Acts 54
3.3.6 Insurance and Indemnity 54
3.3.7 Expenses 55
3.3.8 Agents, Accountants and Legal Counsel 55
3.3.9 Investment Manager 55
3.3.10 Finality of Decisions or Acts 56
3.3.11 Certain Custodial Accounts and
Contracts 56
Effective: March 1, 1993
<PAGE>
IV PLAN ADMINISTRATOR 57
3.4.1 Administration of Plan 57
3.4.2 Disclosure Requirements 58
3.4.3 Information Generally Available 58
3.4.4 Statement of Accrued Benefit 59
3.4.5 Explanation of Rollover Treatment 59
V TRUSTEE 60
3.5.1 Acceptance of Trust 60
3.5.2 Trustee Capacity - Co-Trustee 60
3.5.3 Resignation, Removal and Successors 60
3.5.4 Consultations 60
3.5.5 Rights, Powers and Duties 60
3.5.6 Trustee Indemnification 63
3.5.7 Changes in Trustee Authority 63
VI TRUST ASSETS 64
3.6.1 Trustee Exclusive Owner 64
3.6.2 Investments 64
3.6.3 Administration of Trust Assets 65
3.6.4 Segregated Funds 67
3.6.5 Investment Control Option 67
VII LOANS 68
3.7.1 Authorization 68
VIII BENEFICIARIES 69
3.8.1 Designation of Beneficiaries 69
3.8.2 Absence or Death of Beneficiaries 69
IX CLAIMS 70
3.9.1 Claim Procedure 70
3.9.2 Appeal 70
X AMENDMENT AND TERMINATION 72
3.10.1 Right to Amend 72
3.10.2 Manner of Amending 72
3.10.3 Limitations on Amendments 72
3.10.4 Voluntary Termination 73
3.10.5 Involuntary Termination 73
3.10.6 Withdrawal By Employer 73
3.10.7 Powers Pending Final Distribution 73
3.10.8 Delegation 73
Effective: March 1, 1993
<PAGE>
XI PORTABILITY 74
3.11.1 Continuance by Successor 74
3.11.2 Merger With Other Plan 74
3.11.3 Transfer From Other Plans 74
3.11.4 Transfer to Other Plans 75
XII MISCELLANEOUS 76
3.12.1 No Reversion to Employer 76
3.12.2 Employer Actions 76
3.12.3 Execution of Receipts and Releases 76
3.12.4 Rights of Participants Limited 76
3.12.5 Persons Dealing With Trustee Protected 76
3.12.6 Protection of Insurer 76
3.12.7 No Responsibility for Act of Insurer 77
3.12.8 Inalienability 77
3.12.9 Domestic Relations Orders 78
3.12.10 Authorization to Withhold Taxes 80
3.12.11 Missing Persons 80
3.12.12 Notices 80
3.12.13 Governing Law 80
3.12.14 Severability of Provisions 80
3.12.15 Gender and Number 81
3.12.16 Binding Effect 81
3.12.17 Qualification Under Internal
Revenue Laws 81
XIII APPENDIX MODEL LANGUAGE 82
3.13.1 Direct Rollovers 82
3.13.2 Definitions 82
XIV EXECUTION OF AGREEMENT 83
3.14.1 Counterparts 83
3.14.2 Acceptance by Trustee 83
3.14.3 Execution 83
Effective: March 1, 1993
<PAGE>
AZTEC MANUFACTURING COMPANY EMPLOYEE BENEFIT PLAN & TRUST
THIS AGREEMENT is made this 15th day of November, 1993, by and between
AZTEC MANUFACTURING COMPANY ("the Employer"), AZTEC INDUSTRIES, INC., AZTEC
INDUSTRIES, INC.- MOSS POINT, AUTOMATIC PROCESSING, INC., THE CALVERT CO., INC.,
AZTEC GROUP COMPANY, ARBOR-CROWLEY, INC., AZTEC MANUFACTURING PARTNERSHIP, LTD.,
AZTEC MANUFACTURING WASKOM PARTNERSHIP, LTD., RIG-A-LITE PARTNERSHIP, LTD.,
AZTEC HOLDINGS, INC., ATKINSON INDUSTRIES, INC. and ARIZONA GALVANIZING, INC.
("the Affiliate Employers"), and OVERTON BANK & TRUST, NATIONAL ASSOCIATION
(collectively "the Trustee").
PART I
ARTICLE I
INTRODUCTION
1.1.1 Adoption and Title. The Employer, each Affiliate Employer, and Trustee
hereby adopt and restate the Plan and Trust to be known as AZTEC MANUFACTURING
COMPANY EMPLOYEE BENEFIT PLAN & TRUST.
1.1.2 Effective Date. The provisions of this amended and restated Plan and
Trust which was originally effective March 1, 1969 shall be effective as of
March 1, 1993, hereinafter the Effective Date.
1.1.3 Purpose. This Plan and Trust is established for the purpose of
providing retirement benefits to eligible employees in accordance with the Plan
and Trust.
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<PAGE>
ARTICLE II
DEFINITIONS
As used in this Plan and Trust, the following terms shall have the
following meanings:
1.2.1 "Account": The Employer Account, Controlled Account, Voluntary Account,
or Segregated Account of a Participant, as the context requires, established and
maintained for accounting purposes.
1.2.2 "Act": The Employee Retirement Income Security Act of 1974, as amended
from time to time.
1.2.3 "Anniversary Date": The last day of each Plan Year.
1.2.4 "Beneficiary": The person or persons entitled to receive the benefits
which may be payable upon or after a Participant's death.
1.2.5 "Board of Directors": The board of directors of an incorporated
Employer.
1.2.6 "Break in Service": The failure of a Participant to complete more than
500 Hours of Service during any twelve (12) consecutive month Eligibility
Computation Period beginning with a Participant's first such computation period
after becoming a Participant. A Year of Service and a Break in Service for
vesting purposes shall be measured on the same computation period.
1.2.7 "Code": The Internal Revenue Code of 1986, as amended from time to
time.
1.2.8 "Compensation": All of a Participant's W-2 compensation (or Earned
Income in the case of a self-employed individual) which is actually paid to the
Participant by the Employer during the Plan Year; provided further that the
annual gross compensation taken into account for purposes of the Plan shall not
exceed $200,000, as such amount may be adjusted by the Secretary of the Treasury
at the same time and in the same manner as under Section 415(d) of the Code,
except that the dollar increase in effect on January 1 of any calendar year is
effective for years beginning in such calendar year and the first adjustment to
the $200,000 limitation is effected on January 1, 1990. If a plan determines
compensation on a period of time that contains less than twelve (12) calendar
months, then the annual compensation limit is an amount equal to the annual
compensation limit for the calendar year in which the compensation period begins
multiplied by the ratio obtained by dividing the number of full months in the
period by 12. For
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<PAGE>
purposes of this dollar limitation, the rules of Section 414(q) (6) of the Code
requiring the aggregation of the compensation of family members shall apply,
except that 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 nineteen (19) before the close of the year. If, as a result of
the application of such rules the adjusted $200,000 limitation is exceeded, then
(except for purposes of determining the portion of compensation up to the Social
Security 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 prior to
the application of this limitation. If compensation for any prior plan year is
taken into account in determining an employee's contributions or benefits for
the current year, the compensation for such prior year is subject to the
applicable annual compensation limit in effect for that prior year. For this
purpose, for years beginning before January 1, 1990, the applicable annual
compensation limit is $200,000.
For the initial year of participation, Compensation from the Participant's Entry
Date shall be considered.
1.2.9 "Controlled Account": An account established and maintained for a
Participant to account for his interest in a Segregated Fund over which he
exercises investment control.
1.2.10 "Distributable Benefit": The benefit to which a Participant is
entitled following termination of his employment.
1.2.11 "Distribution Determination Date": The date as of which the
Distributable Benefit of a Participant is determined.
1.2.12 "Early Retirement Age": The Plan does not provide an Early Retirement
Age.
1.2.13 "Early Retirement Date": The Plan does not provide an Early Retirement
Date.
1.2.14 "Earned Income": The net earnings from self-employment in the trade or
business with respect to which the Plan is established for which personal
services of the Participant are a material income--producing factor. Net
earnings shall be determined without regard to items not included in gross
income and the deductions allocable to such items but, in the case of taxable
years beginning after 1989, with regard to the deduction allowed by Section
164(f) of the Code. Net earnings shall be reduced by contributions to a
qualified Plan to the extent deductible under Section 404 of the Code.
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<PAGE>
1.2.15 "Eligibility Computation Period": For purposes of determining Years of
Service and Breaks in Service for purposes of eligibility, the initial
eligibility computation period is the twelve (12) consecutive month period
beginning with the employment commencement date on which the Employee first
renders an Hour of Service for the Employer and the subsequent eligibility
computation periods are each Plan Year commencing with the first Plan Year which
commences prior to the first anniversary of the Employee's employment
commencement date regardless of whether the Employee is entitled to be credited
with 1,000 Hours of Service during the initial eligibility computation period.
If the subsequent periods commence with the first Plan Year which commences
prior to the first anniversary of the Employee's employment commencement date,
an Employee who is credited with 1,000 Hours of Service in both the initial
eligibility computation period and the first Plan Year which commences prior to
the first anniversary of the Employee's initial eligibility computation period
shall be credited with two (2) years of service for purposes of eligibility to
participate.
1.2.16 "Employee": A person who is currently or hereafter employed by the
Employer, or by any other employer aggregated under Section 414 (b), (C), (m)
or (o) of the Code and the regulations thereunder, including:
- - self-employed individuals;
- - employees paid on an hourly basis;
- - employees paid on a salaried basis;
- - employees paid on a commissioned basis;
- - leased Employees subject to Section 414(n) of the Code;
but excluding:
- - employees who are included in the unit of employees covered by a collective
bargaining agreement, provided that retirement benefits were the subject of
good faith negotiations;
- - independent contractors;
- - an employee who is a non-resident alien deriving no earned income from the
Employer which constitutes income from sources within the United States.
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<PAGE>
1.2.17 "Employer": The Employer and, except where the context expressly
indicates to the contrary, each Affiliate Employer that is a party to this
Agreement, or any of their respective successors or assigns which adopt the
Plan; provided, however, that no mere change in the identity, form or
organization of the Employer shall affect its status under the Plan in any
manner, and, if the name of the Employer is hereinafter changed, references
herein to the Employer shall be deemed to refer to the Employer as it is then
known.
1.2.18 "Employer Account": An account established and maintained for a
Participant for accounting purposes to which his share of Employer contributions
and forfeitures are added.
1.2.19 "Entry Date": The date of satisfying the eligibility requirements.
1.2.20 "Excessive Annual Addition": The portion of the allocation of
contributions and forfeitures that cannot be added to a Participant's Accounts
due to the limitations on annual additions contained in the Plan.
1.2.21 "Fiduciary": The Plan Administrator, the Trustee and any other person
who has discretionary authority or control in the management of the Plan or the
disposition of Trust assets.
1.2.22 "Highly Compensated Employee": A highly compensated active employee
and a highly compensated former employee. A highly compensated active employee
includes: any Employee who performs service for the Employer during the
determination year and who, during the look-back year: (i) received compensation
from the Employer in excess of $75,000 (as adjusted pursuant to Section 415(d)
of the Code); (ii) received compensation from the Employer in excess of $50,000
(as adjusted pursuant to Section 415(d) of the Code) and was a member of the
top-paid group for such year; or (iii) was an officer of the Employer and
received compensation during such year that is greater than 50 percent of the
dollar limitation as in effect under Section 415(b) (1) (A) of the Code. The
term highly compensated employee also includes: (i) employees who are both
described in the preceding sentence if the term "determination year" is
substituted for the term "look--back year" and the employee is one of the 100
employees who received the most compensation from the Employer during the
determination year; and (ii) employees who are 5 percent owners at any time
during the look--back year or determination year.
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<PAGE>
If no officer has satisfied the compensation requirement of (iii) above during
either a determination year or look-back year, the highest paid officer for such
year shall be treated as a highly compensated employee.
For this purpose, the determination year shall be the Plan Year. The look--
back year shall be the twelve-month period immediately preceding the
determination year and compensation is as defined in Section 415(c) (3) of the
Code including amounts contributed by the Employer pursuant to a salary
reduction agreement and which is not includable in gross income under Sections
125, 402(a) (8), 402(h) or 403(b) of the Code.
A highly compensated former employee includes any employee who separated from
service (or was deemed to have separated) prior to the determination year,
performs no service for the employer during the determination year, and was a
highly compensated active employee for either the separation year or any
determination year ending on or after the employee's 55th birthday.
If an Employee is, during a Plan Year or the preceding Plan Year, a family
member of either a 5 percent owner who is an active or former employee or a
Highly Compensated Employee who is one of the 10 most highly compensated
employees ranked on the basis of compensation paid by the Employer during such
year, then the family member and the 5 percent owner or top-ten highly
compensated employee shall be aggregated. In such case, the family member and 5
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 5 percent owner or top--ten highly compensated employee. For purposes
of this section, family member includes the spouse, lineal ascendants and
descendants of the employee or former employee and the spouses of such lineal
ascendants and descendants.
The determination of who is a highly compensated employee, including the
determination 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 considered, will be made in accordance with Section 414(q)
of the Code and the regulations thereunder.
1.2.23 "Hour of Service": An hour for which (a) the Employee is paid, or
entitled to payment by the Employer for the performance of duties, (b) the
Employee is paid or entitled to payment by the Employer during which no duties
are performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity
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<PAGE>
(including disability), layoff, jury duty, military duty or leave of absence, or
(C) back pay, irrespective of mitigation of damages, has been either awarded or
agreed to by the Employer. Hours of Service shall be credited to the Employee
under (a), above, for the period in which the duties are performed, under (b),
above, in the period in which the period during which no duties are performed
occurs, beginning with the first Hour of Service to which the payment relates,
and under (c), above, for the period to which the award or agreement pertains
rather than the period in which the award, agreement or payment is made;
provided, however, that Hours of Service shall not be credited under both (a)
and (b), above, as the case may be, and under (c) above. Notwithstanding the
preceding sentences, (i) no more than five hundred one (501) Hours of Service
shall be credited under (b), above, 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, (ii) no Hours of Service shall be credited to
the Employee by reason of a payment made or due under a plan maintained solely
for the purpose of complying with applicable worker's compensation, or
unemployment compensation or disability insurance laws, and (iii) no Hours of
Service shall be credited by reason of a payment which solely reimburses an
Employee for medical or medically related expenses incurred by the Employee. The
determination of Hours of Service for reasons other than the performance of
duties and the crediting of Hours of Service to computation periods shall be
made in accord with the provisions of Labor Regulation Sections 2530.200b-2(b)
and (c) which are incorporated herein by reference.
Solely for purposes of determining whether an Employee has incurred a Break in
Service, an Employee shall be credited with the number of Hours of Service which
would otherwise have been credited to such individual but for the absence or in
any case in which such Hours cannot be determined with eight (8) Hours of
Service for any day that the Employee is absent from work by reason of the
Employee's pregnancy, the birth of a child of the Employee, the placement of a
child with the Employee in connection with the adoption of such child by the
Employee or for purposes of caring for such child for a period beginning
immediately following such birth or placement. Such Hours of Service shall be
credited only in the computation period in which the absence from work begins if
the Employee would be prevented from incurring a Break in Service in such
computation period solely because credit is given for such period of absence
and, in any other case, in the immediately following computation period.
Notwithstanding the foregoing, no credit shall be given for such service unless
the Employee furnishes to the Plan Administrator information to establish that
the absence from work is for the reasons indicated and the number of days for
which there was such an absence.
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In the event the Employer does not maintain records of the actual hours for
which an Employee is paid or entitled to payment, an Employee shall be credited
with 10 Hours of Service if he is credited with at least one (1) Hour of Service
during the day.
Service with another business entity that is, along with the Employer, a
member of a controlled group of corporations, an affiliated service group or
trades or businesses under common control, as defined in the applicable sections
of the Code, or which is otherwise required to be aggregated with the Employer
pursuant to Section 414(o) of the Code and the regulations issued thereunder
shall be treated as service for the Employer. Hours of Service shall be credited
for any individual considered an employee for purposes of this Plan under
Section 414(n) or Section 414(o) of the Code and the regulations issued
thereunder.
Except to the extent inconsistent with regulations issued by the Secretary of
the Treasury, service for a predecessor to the Employer, whether as an employee
or self-employed person, shall be treated as service for the Employer. If the
Employer maintains the plan of a predecessor employer, service with such
predecessor shall be treated as service for the Employer.
Service with the following entities shall be considered as service under this
plan:
RIG-A-LITE PARTNERSHIP, LTD., THE CALVERT COMPANY, INC. and ATKINSON
INDUSTRIES, INC.
Service with the above entities has been determined under the terms of the
following documents:
The employment and payroll records of each entity.
1.2.24 "Insurer": Any insurance company which has issued a Life Insurance
Policy.
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1.2.25 "Joint and Survivor Annuity": An immediate annuity for the life of the
Participant with a survivor annuity for the life of the spouse which is not less
than fifty (50%) percent and not more than one hundred (100%) percent of the
amount of the annuity which is payable during the joint lives of the Participant
and the spouse and which is the amount of benefit which can be purchased with
the Participant's vested Account balances.
1.2.26 "Leased Employee": Any person (other than an employee of the
recipient) who pursuant to an agreement between the recipient and any other
person 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 (1) year and
such services are of a type historically performed by employees in the business
field of the recipient employer; provided that any such person shall not be
taken into account if (a) such person is covered by a money purchase pension
plan providing (i) a nonintegrated employer contribution rate of at least ten
(10%) percent of compensation, as defined in Section 415(c) (3) of the Code, but
including amounts contributed by the employer pursuant to a salary reduction
agreement which are excludable from the person's gross income under Sections
125, 402(a) (8), 402(h) or 403(b) of the Code; (ii) immediate participation; and
(iii) full and immediate vesting; and (b) leased employees do not constitute
more than twenty (20%) percent of the work force of the recipient who are not
Highly Compensated Employees. 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.
1.2.27 "Life Insurance Policy": A life insurance, annuity or endowment policy
or contract which is owned by the Trust and is on the life of a Participant.
1.2.28 "Limitation Year": The Plan Year; provided that all qualified plans
maintained by the Employer must use the same Limitation Year.
1.2.29 "Normal Retirement Age": The date the Employee attains age 65.
1.2.30 "Normal Retirement Date": The date the Participant attains his Normal
Retirement Age.
1.2.31 "Owner--Employee": An individual who is a sole proprietor or who is a
partner owning more than ten percent (10%) of either the capital or profits
interest of the partnership.
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1.2.32 "Participant": Any eligible Employee who becomes entitled to
participate in the Plan.
1.2.33 "Plan": The profit sharing plan for Employees as set forth in this
Agreement, together with any amendments or supplements thereto.
1.2.34 "Plan Administrator": The person, persons or entity appointed by the
Employer to administer the Plan or, if the Employer fails to make such
appointment, the Employer.
1.2.35 "Plan Year" or "Year": The Plan's accounting year of twelve (12)
months commencing on March 1 and ending the following February 28.
1.2.36 "Preretirement Survivor Annuity": A survivor annuity for the life of
the surviving spouse of the Participant under which
(a) the payments to the surviving spouse are not less than the amounts which
would be payable under a Joint and Survivor Annuity (or the actuarial equivalent
thereof) if:
(i) in the case of a Participant who dies after the date on which the
Participant attained the earliest retirement age under the Plan on which he
could elect to receive retirement benefits, such Participant had retired
with an immediate Joint and Survivor Annuity on the day before the
Participant's date of death; or
(ii) in the case of a Participant who dies on or before such date, such
Participant had separated from service on the date of death (except that a
Participant who had actually separated from service prior to death shall be
treated as separating on the actual date of separation), survived to the
earliest retirement age, retired with an immediate Joint and Survivor
Annuity at the earliest retirement age and died on the day after the day on
which such Participant would have attained the earliest retirement age, and
(b) The earliest period for which the surviving spouse may receive a payment
under such annuity is not later than the month in which the Participant would
have attained the earliest retirement age under the Plan; and
(c) Any security interest held by the Plan by reason of a loan outstanding to
the Participant for which a valid spousal consent has been obtained, if
necessary, shall be taken into account.
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1.2.37 "Qualifying Employer Securities or Real Property": Securities or real
property of the Employer which the Trustee may acquire and hold pursuant to the
applicable provisions of the Code and Act.
1.2.38 "Segregated Account": An Account established and maintained for a
Participant to account for his interest in a Segregated Fund.
1.2.39 "Segregated Fund": Assets held in the name of the Trustee which have
been segregated from the Trust Fund in accordance with any of the provisions of
the Plan.
1.2.40 "Self-Employed Individual": An individual who has Earned Income for
the taxable year from the trade or business for which the Plan is established or
who would have had Earned Income but for the fact that the trade or business had
no net profit for the taxable year.
1.2.41 "Social Security Integration Level": Not applicable. This Plan does
not provide for integration with Social Security.
1.2.42 "Trust Fund": All money and property of every kind and character held
by the Trustee pursuant to the Plan, excluding assets held in Segregated Funds.
1.2.43 "Trustee": The persons, corporations, associations or combination of
them who shall at the time be acting as such from time to time hereunder.
1.2.44 "Valuation Date": The Anniversary Date.
1.2.45 "Voluntary Account": An Account established and maintained for a
Participant for accounting purposes to which his voluntary Employee
contributions have been added.
1.2.46 "Year of Service": Each 12--consecutive month Plan Year during which
the Employee completes at least 1,000 Hours of Service, including years prior to
the Effective Date.
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PART II
ARTICLE I
PARTICIPATION
2.1.1 Eligibility Requirements. Each Employee shall be eligible to
participate in this Plan upon the later of the following dates, provided that he
is an Employee on such date:
(a) the last day of the Eligibility Computation Period during which he has
completed 1,000 Hours of Service; or
(b) the date he attains age 18.
2.1.2 Commencement of Participation. An eligible Employee shall become a
Participant in the Plan on the applicable Entry Date.
2.1.3 Participation Upon Re-Employment. A Participant whose employment
terminates and who is subsequently re--employed shall re-enter the Plan as a
Participant immediately on the date of his re--employment. In the event that an
Employee completes the eligibility requirements set forth in Section 2.1.1
above, his employment terminates prior to becoming a Participant and he is
subsequently re-employed, such Employee shall be deemed to have met the
eligibility requirements as of the date of his re-employment and shall become a
Participant on the date of his re-employment; provided, however, that if he is
re-employed prior to the date he would have become a Participant if his
employment had not terminated, he shall become a Participant as of the date he
would have become a Participant if his employment had not terminated.
In the case of a Participant who does not have any vested and nonforfeitable
right under the Plan to an accrued benefit derived from Employer contributions,
Years of Service before any period of consecutive Breaks in Service shall not be
taken into account in the event of re--employment if the number of consecutive
Breaks in Service within the period equals or exceeds the greater of five (5) or
the aggregate number of Years of Service before such period. Any Years of
Service which are not taken into account by reason of such period of Breaks in
Service shall not be taken into account in applying the foregoing to a
subsequent period of Breaks in Service.
Any other Employee whose employment terminates, and who is subsequently re-
employed shall become a Participant in accordance with the provisions of
Sections 2.1.1 and 2.1.2.
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2.1.4 Termination of Participation. An Employee who has become a Participant
shall remain a Participant until the entire amount of his Distributable Benefit
is distributed to him or his Beneficiary in the event of his death.
2.1.5 Determination of Eligibility. In the event any question shall arise as
to the eligibility of any person to become a Participant or the commencement of
participation, the Plan Administrator shall determine such question from
information provided by the Employer and the Plan Administrator's decision shall
be conclusive and binding, except to the extent of a claimant's right to appeal
the denial of a claim.
2.1.6 Omission of Eligible Employee. If an Employee who should be included as
a Participant in the Plan is erroneously omitted and discovery of the omission
is made after the contribution by the Employer is made and allocated, the
Employer shall make an additional contribution on behalf of the omitted Employee
in the amount which the Employer would have contributed on his behalf had he not
been omitted.
2.1.7 Inclusion of Ineligible Participant. If any person is erroneously
included as a Participant in the Plan and discovery of the erroneous inclusion
is made after the contribution by the Employer is made and allocated, the
Employer may elect to treat the amount contributed on behalf of the ineligible
person plus any earnings thereon as a forfeiture for the Plan Year in which the
discovery is made and apply such amount in the manner specified in Section
2.4.6.
2.1.8 Election Not to Participate. Notwithstanding anything contained in the
Plan to the contrary, an Employee may elect with the approval of the Employer
not to participate in the Plan if the tax-exempt status of the Plan is not
jeopardized by the election. The Employee shall sign such documents as may be
reasonably required by the Employer to evidence the election. If it is
subsequently determined that the tax-exempt status of the Plan has been
jeopardized, the Employer may elect to treat such Employee as having been
erroneously omitted. An Employee may revoke the election only with respect to
any subsequent Plan Year by written notice of revocation to the Employer prior
to the end of the Plan Year for which the revocation is effective.
2.1.9 Change in Status. If any Participant continues in the employ of the
Employer or an affiliate for which service is required to be taken into account
but ceases to be an Employee for any reason (such as becoming covered by a
collective bargaining agreement unless the collective bargaining agreement
otherwise provides) the Participant shall continue to be a Participant until the
entire amount of his benefit is distributed but the individual shall not be
entitled to receive an allocation of contribution or forfeitures during the
period
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that the Participant is not an Employee for such reason. Such Participant shall
continue to receive credit for Years of Service completed during the period for
purposes of determining his vested and nonforfeitable interest in his Accounts.
In the event that the individual subsequently again becomes a member of an
eligible class of employees, the individual shall participate immediately upon
the date of such change in status. If such Participant incurs a Break in Service
and is subsequently reemployed, eligibility to participate shall be determined
in accordance with Section 2.1.3. In the event that an individual who is not a
member of an eligible class of employees becomes a member of an eligible class,
the individual shall participate immediately if such individual has satisfied
the eligibility requirements and would have otherwise previously become a
participant.
2.1.10 Existing Participants. An Employee who, on the Effective Date, was a
Participant under the provisions of the Plan as in effect immediately prior to
the Effective Date shall be a Participant on the Effective Date and the
provisions of Sections 2.1.1 and 2.1.2, pertaining to participation, shall not
be applicable to such Employee. The rights of a Participant whose employment
terminated prior to the Effective Date shall be determined under the provisions
of the Plan as in effect at the time of such termination.
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ARTICLE II
CONTRIBUTIONS
2.2.1 Employer Contributions.
(a) Amount of Contribution. The Employer shall contribute to the Trust Fund
each Plan Year such amounts not limited to profits as it may determine;
provided, however, that the contribution for any Year shall not exceed the
maximum amount deductible from the Employer's income for such Year for federal
income tax purposes under the applicable sections of the Code.
(b) Time of Contribution. All contributions by the Employer shall be
delivered to the Trustee not later than the date fixed by law for the filing of
the Employer's federal income tax return for the Year for which such
contribution is made (including any extensions of time granted by the Internal
Revenue Service for filing such return).
(c) Determination of Amount to be Final. The determination by the Employer as
to the amount to be contributed by the Employer hereunder shall be in all
respects final, binding, and conclusive on all persons or parties having or
claiming any rights under this Agreement or under the Plan and Trust created
hereby. Under no circumstances and in no event shall any Participant,
Beneficiary, or other person or party have any right to examine the books or
records of the Employer.
(d) Rights of Trustee as to Contributions. The Trustee shall have no duty to
require any contribution to be made or to determine whether contributions
delivered to the Trustee by the Employer comply with the provisions of this
Agreement. The Trustee shall be accountable only for funds actually received by
the Trustee.
2.2.2 Employee Contributions.
(a) Amount of Contribution. An Employee is neither required nor permitted to
contribute to the Plan for any Plan Year beginning after 1986. The Plan
Administrator shall not accept deductible employee contributions attributable to
any Plan Year.
(b) Withdrawal of Contributions. In accordance with the provisions of the
Plan as in effect prior to Plan Years beginning after 1986, all or any portion
of an Employee's contributions may be withdrawn by giving to the Plan
Administrator written notice of any proposed withdrawal. The
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Plan Administrator may adopt such procedures with respect to such withdrawals as
may be necessary or appropriate. At the Plan Administrator's direction, the
Trustee shall distribute any such withdrawal to the Participant in accordance
with the procedures adopted by the Plan Administrator. Such withdrawals shall
not include any interest or other increment earned on such contributions. No
forfeitures shall occur as a result of an Employee's withdrawal of voluntary
contributions. Notwithstanding the foregoing, a withdrawal of voluntary
contributions must be consented to in writing by the Participant's spouse.
2.2.3 Return of Contributions. Employer contributions shall be returned to
the Employer in the following instances:
(a) If the contribution is made by Employer by mistake of fact, then the
contribution shall be returned within one year after its payment upon the
Employer's written request.
(b) If the contribution is conditioned on initial qualification of the Plan
under the applicable sections of the Code, and the Commissioner of Internal
Revenue determines that the Plan does not qualify, then the contribution made
incident to the initial qualification by the Employer shall be returned within
one year after the date of denial of initial qualification of the Plan; provided
that the application for initial qualification is made by the time prescribed by
law for filing the Employer's tax return for the taxable year in which the Plan
is adopted, or such later date as the Secretary of the Treasury may prescribe.
(c) Each contribution by the Employer is conditioned upon the deductibility
of the contribution under the applicable sections of the Code, and to the extent
of disallowance of the deduction for part or all of the contribution, the
contribution shall be returned within one year after such disallowance upon the
Employer's written request.
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ARTICLE III
ALLOCATIONS
2.3.1 Basic Allocation. As of each Anniversary Date, the contribution made by
the Employer including any forfeitures with respect to the preceding Plan year
shall be allocated among the Employer Accounts of Participants who have
completed at least 1,000 Hours of Service during the Plan Year, in the following
manner:
(a) Employer contributions and forfeitures for the Plan Year shall be
allocated to each Participant's Employer Account in the ratio that each
Participant's Compensation for the Plan Year bears to all Participants'
Compensation for that year.
(b) Notwithstanding anything contained in this Section to the contrary, if
the employment of a Participant is terminated during a Plan Year by reason of
death, retirement, disability, resignation or discharge as provided in Section
2.4.2(f), no allocation of contributions or forfeitures shall be made to the
Employer Account of such Participant for the Plan Year during which his
employment is terminated.
2.3.2 Minimum Allocation. In the event the Plan becomes a Top-Heavy Plan
during any Plan Year, the provisions of Section 2.6.1(a) shall apply.
2.3.3 Fail-Safe Allocation. Notwithstanding any provision of the Plan to the
contrary, for Plan Years beginning after December 31, 1989, if the Plan would
otherwise fail to satisfy the requirements of Section 401(a)(26), 410(b)(1) or
410(b)(2) (A)(i) of the Code and the regulations thereunder because Employer
contributions have not been allocated to a sufficient number or percentage of
Participants for the Plan Year, an additional contribution shall be made by the
Employer and shall be allocated to the Employer Accounts of affected
Participants subject to the following provisions:
(a) The Participants eligible to share in the allocation of the
Employer's contribution shall be expanded to include the minimum number of
Participants who are not otherwise eligible to the extent necessary to
satisfy the applicable test under the relevant Section of the Code. The
specific Participants who shall become eligible are those Participants who
are actively employed on the last day of the Plan Year who have completed
the greatest number of Hours of Service during the Plan Year.
(b) If the applicable test is still not satisfied, the Participants
eligible to share in the allocation shall be
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further expanded to include the minimum number of Participants who are not
employed on the last day of the Plan Year as are necessary to satisfy the
applicable test. The specific Participants who shall become eligible are
those Participants who have completed the greatest number of Hours of
Service during the Plan Year.
(c) A Participant's accrued benefit shall not be reduced by any
reallocation of amounts that have previously been allocated. To the extent
necessary, the Employer shall make an additional contribution equal to the
amount such affected Participants would have received if they had
originally shared in the allocations without regard to the deductibility of
the contribution. Any adjustment to the allocations pursuant to this
paragraph shall be considered a retroactive amendment adopted by the last
day of the Plan Year.
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ARTICLE IV
BENEFITS
2.4.1 Distributable Benefit. At such time that the employment of a
Participant terminates for any reason, he or his Beneficiary shall be entitled
to a benefit equal to the vested and nonforfeitable interest in his Accounts as
of the Distribution Determination Date. The Accounts shall include the allocable
share of contributions and forfeitures, if any, which may be allocated to the
Accounts as of such Distribution Determination Date and shall be determined
after making the adjustments for which provision is made in the Plan.
2.4.2 Vesting. A Participant shall at all times be one hundred percent (100%)
vested and have a nonforfeitable interest in his Voluntary Account and
Segregated Account. The vested and nonforfeitable interest of the Participant in
his Controlled Account shall be determined by reference to the Account from
which the funds were originally transferred. The vested and nonforfeitable
interest in a Participant's Employer Account shall be determined as hereinafter
provided.
(a) Normal Retirement. If a Participant terminates employment at his
Normal Retirement Age or upon attainment of age sixty-five (65) if earlier,
he shall be one hundred percent (100%) vested and have a nonforfeitable
interest in his Employer Account.
(b) Deferred Retirement. If a Participant continues in active
employment following his Normal Retirement Age, he shall continue to
participate under the Plan. From and after his Normal Retirement Age, he
shall be one hundred percent (100%) vested and have a nonforfeitable
interest in his Employer Account.
(c) Disability. If the employment of a Participant is terminated prior
to his Normal Retirement Age as a result of a medically determinable
physical or mental impairment which may be expected to result in death or
to last for a continuous period of not less than twelve (12) months and
which renders him incapable of performing his duties, he shall be one
hundred percent (100%) vested and have a nonforfeitable interest in his
Employer Account. All determinations in connection with the permanence and
degree of such disability shall be made by the Plan Administrator in a
uniform, nondiscriminatory manner on the basis of medical evidence.
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(d) Death. In the event of the death of a Participant, he shall be one
hundred percent (100%) vested and have a nonforfeitable interest in his
Employer Account.
(e) Termination of Plan. In the event of termination of the Plan, each
Participant shall be one hundred percent (100%) vested and have a
nonforfeitable interest in his Employer Account. In the event of a partial
termination of the Plan, each Participant with respect to whom such partial
termination has occurred shall be one hundred percent (100%) vested and
have a nonforfeitable interest in his Employer Account.
(f) Early Retirement, Resignation or Discharge. If the employment of a
Participant terminates by reason of early retirement, resignation or
discharge prior to his Normal Retirement Age, he shall be vested and have a
nonforfeitable interest in a percentage of his Employer Account determined,
except as provided below, by taking into account all of his Years of
Service as of such termination date in accordance with the following
schedule:
Years of Service Percent Vested
Less than 1 0%
1 but less than 2 1%
2 but less than 3 1%
3 but less than 4 20%
4 but less than 5 40%
5 but less than 6 60%
6 but less than 7 80%
7 or more 100%
2.4.3 Leave of Absence. A temporary cessation from active employment with the
Employer pursuant to an authorized leave of absence in accordance with the
nondiscriminatory policy of the Employer, whether occasioned by illness,
military service or any other reason shall not be treated as either a
termination of employment or a Break in Service provided that the Employee
returns to employment prior to the end of the authorized leave of absence.
2.4.4 Re-Employment. In the event that the Participant is re-employed during
a Plan Year subsequent to the Plan Year encompassing the Distribution
Determination Date, he shall be given credit for Years of Service preceding the
Break in Service for the purpose of determining his vested and nonforfeitable
interest in his share of Employer contributions and forfeitures allocated to his
Employer Account after such re-employment. Years of Service completed by the
Participant after such re-employment shall not increase his vested and
nonforfeitable interest in his Employer Account on the Distribution
Determination Date as of which his Distributable Benefit is
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determined preceding such re-employment unless the Participant is re-employed
before he incurs five (5) consecutive Breaks in Service.
2.4.5 Distribution Determination Date. Subject to the necessity, if any, of
obtaining the consent of the Participant and spouse, the Distribution
Determination Date shall be determined as hereinafter provided.
(a) Less Than 100% Vested. If the employment of a Participant terminates and
the Participant has less than a one hundred percent (100%) vested and
nonforfeitable interest in his Employer Account as of the date of such
termination, the Distribution Determination Date shall be the Anniversary Date
of the Plan Year during which he terminates employment, provided that he is not
re-employed on the last day of such Plan Year.
(b) Fully Vested. For a Participant who is fully vested but who terminates
employment prior to death, total and permanent disability or retirement at his
retirement date, the Distribution Determination Date shall be as soon as
practical but prior to the Anniversary Date following the date of termination,
based on the preceding Valuation Date.
For a Participant who terminates employment as a result of death, total and
permanent disability or retirement at his retirement date, the Distribution
Determination Date shall be as soon as practical but prior to the Anniversary
Date following the date of termination, based on the preceding Valuation Date.
In the case of a Participant's interest in a Voluntary Account or a Segregated
Account attributable to a rollover contribution from another plan, the
Distribution Determination Date is as soon as practical but prior to the
Anniversary Date following the date of termination, based on the preceding
Valuation Date.
(c) Termination of Plan. In the event of termination of the Plan, the
Distribution Determination Date shall be the date of such termination. In the
event of a partial termination of the Plan, as to each Participant with respect
to whom such partial termination has occurred, the Distribution Determination
Date shall be the Anniversary Date coinciding with or immediately following the
date of such partial termination.
(d) Other. Except as provided above, the Distribution Determination Date
shall be the Anniversary Date coinciding with or next following the termination
of employment of the Participant.
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2.4.6 Forfeitures. If an Employee terminates service, and the value of the
Employees' vested account balance derived from employer and employee
contributions is not greater than $3,500 and the Employee receives a
distribution of the value of the entire vested portion of such account balance,
the nonvested portion shall be treated as a forfeiture as of the last day of the
Plan Year in which the Participant's entire nonforfeitable interest in such
Account is distributed from the Plan. If the value of an Employee's vested
account balance is zero, the Employee shall be deemed to have received a
distribution of such vested account balance. A participant's vested account
balance shall not include accumulated deductible employee contributions within
the meaning of Section 72(o)(5)(B) of the Code for plan years beginning prior
to January 1, 1989.
If an employee terminates service, and elects, in accordance with the
requirements of Section 2.5.2, to receive the value of the employee's vested
account balance, the nonvested portion shall be treated as a forfeiture. If the
employee elects to have distributed less than the entire vested portion of the
account balance derived from employer contributions, the part of the nonvested
portion that will 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 the vested employer derived account balance.
If an Employee receives a distribution and the Employee resumes employment
covered under the Plan, the Employee's employer-derived account balance shall
be restored to the amount on the date of distribution if the Employee repays to
the plan the full amount of the distribution attributable to Employer
contributions before the earlier of five (5) years after the first date on which
the Participant is subsequently re-employed by the Employer, or the date the
Participant incurs five (5) consecutive Breaks in Service following the date of
the distribution. If an Employee is deemed to receive a distribution pursuant to
this section, and the Employee resumes employment covered under the Plan before
the date the Participant incurs five (5) consecutive Breaks in Service, upon the
reemployment of such Employee, the employer-derived account balance of the
Employee will be restored to the amount on the date of such deemed distribution.
Any portion of a Participant's Employer Account with respect to which he is
not vested shall be deemed a forfeiture as of the last day of the Plan Year in
which the Participant's entire nonforfeitable interest his Employer Account is
distributed from the Plan.
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Such forfeiture shall be allocated to the Employer Accounts of Participants
who are entitled by reason of re--employment to restoration of a prior
forfeiture and any remaining forfeitures shall be allocated in proportion to
each Participant's Compensation.
Notwithstanding any provision herein to the contrary, forfeitures resulting
from contributions by an Employer shall not be reallocated for the benefit of
another adopting Employer, unless such adopting Employer is an Affiliate
Employer. If a Participant is entitled to a restoration of a forfeiture which
has not otherwise been provided for, the amount to be restored shall be restored
by allocating forfeitures arising in the Plan Year of restoration to the
Participant's Employer Account to the extent thereof and an additional
contribution by the Employer allocated to the Participant's Employer Account to
the extent that allocable forfeitures are insufficient.
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ARTICLE V
DISTRIBUTIONS
2.5.1 Commencement of Distribution.
(a) Immediate Distribution. If the employment of a Participant is
terminated for any reason other than resignation or discharge prior to
either his Early Retirement Date or his Normal Retirement Date,
distribution of his Distributable Benefit shall begin in accordance with
the Participant's election at any time after the earlier of the date
determined under subsection (b) below or within a reasonable period after
the Distribution Determination Date as of which his Distributable Benefit
is determined; provided that, if he has not incurred a Break in Service, he
is not re-employed prior to the date of the commencement of distributions.
(b) Deferred Distribution. Unless the Employee elects earlier
commencement in accordance with the provisions of the Plan, if the
employment of a Participant is terminated by reason of resignation or
discharge prior to either his Early Retirement Date or his Normal
Retirement Date, distribution of his Distributable Benefit shall be
deferred and commenced unless the Participant elects to further defer
distribution on the sixtieth (60th) day after the close of the later of the
following Plan Years:
(i) The Plan Year during which the Participant attains the earlier of
age sixty-five (65) or the Normal. Retirement Age;
(ii) The Plan Year during which the tenth (10th) anniversary of the
commencement of the Participant's participation in the Plan occurs; or
(iii) The Plan Year during which the Participant terminates service
with the Employer.
A Participant who terminates employment before satisfying the age requirement
for early retirement but has satisfied any service requirement shall be entitled
to a distribution of his Distributable Benefit in accordance with subsection (a)
above upon attaining such age.
If distribution is so deferred, unless otherwise determined by the Plan
Administrator, the Trustee at the Plan Administrator's direction shall transfer
the Distributable Benefit to a Segregated Fund from which distribution shall
thereafter be made. Such transfer
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shall be made as of the Distribution Determination Date. Notwithstanding the
foregoing, the failure of a Participant and spouse to consent to a distribution
while a benefit is immediately distributable, within the meaning of Section
2.5.2, shall be deemed to be an election to defer commencement of payment of any
benefit sufficient to satisfy this section.
(c) Required Distribution. Notwithstanding anything herein to the
contrary, unless the Participant has made an appropriate election by
December 31, 1983 to defer distribution which has not been revoked or
modified, the Participant's benefit shall be distributed to the Participant
not later than April 1 of the calendar year following the calendar year in
which he attains age 70-1/2 (the required beginning date) or shall be
distributed, commencing not later than April 1 of such calendar year in
accordance with regulations prescribed by the Secretary of the Treasury
over a period not extending beyond the life expectancy of the Participant
or the life expectancy of the Participant and a beneficiary designated by
the Participant. 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. Unless otherwise
elected by the Participant (or spouse, if distributions begin after death
and the spouse is the designated beneficiary) by the time distributions are
required to begin, the life expectancy of the Participant and the
Participant's spouse shall be recalculated annually. Other than for a life
annuity, such election shall be irrevocable as to the Participant or spouse
and shall apply to all subsequent years. The life expectancy of a non--
spouse beneficiary may not be recalculated. Life expectancy and joint and
last survivor expectancy shall be computed by use of the expected return
multiples in Tables V and VI of Section 1.72-9 of the Treasury Regulations.
For calendar years beginning after December 31, 1988, the amount to be
distributed each year, beginning with distributions for the first
distribution calendar year shall not be less than the quotient obtained by
dividing the Participant's benefit by the lesser of (1) the applicable life
expectancy or (2) if the Participant's spouse is not the designated
beneficiary, the applicable divisor then determined from the table set
forth in Q&A--4 of Section 1.401(a) (9)--2 of the proposed regulations.
Distributions after the death of the Participant shall be distributed using
the applicable life expectancy as the relevant divisor without regard to
Proposed Regulations Section 1.401(a) (9)-2. The minimum distribution for
subsequent calendar years,
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including the minimum distribution for the distribution calendar year in which
the Participant's required beginning date occurs, must be made on or before
December 31 of that distribution calendar year.
(d) Distribution After Death. Unless the Participant has made an
appropriate election by December 31, 1983 to extend the period of
distribution after his death and the election has not been revoked or
modified, the following provisions shall apply. If distribution of the
Participant's benefit has begun and the Participant dies before his entire
benefit has been distributed to him, the remaining portion of such benefit
shall be distributed at least as rapidly as under the method of
distribution being used as of the date of the Participant's death.
If the Participant dies before the distribution of his benefit has begun, the
entire interest of the Participant shall be distributed by December 31 of the
calendar year containing the fifth (5th) anniversary of the death of such
Participant, provided that if any portion of the Participant's benefit is
payable to or for the benefit of a designated beneficiary and such portion is to
be distributed in accordance with regulations issued by the Secretary of the
Treasury over the life of, or over a period not extending beyond the life
expectancy of such designated beneficiary, such distributions shall begin not
later than December 31 of the calendar year immediately following the calendar
year of the Participant's death or such later date as may be provided by
regulations issued by the Secretary of the Treasury. If the designated
beneficiary is the surviving spouse of the Participant the date on which the
distributions are required to begin shall not be earlier than the later of
December 31 of the calendar year immediately following the calendar year in
which the Participant died and December 31 of the calendar year in which the
Participant would have attained age 70-1/2. If the surviving spouse thereafter
dies before the distributions to such spouse begin and any benefit is payable to
a contingent beneficiary, the date on which distributions are required to begin
shall be determined as if the surviving spouse were the Participant.
If the Participant has not specified the manner in which benefits are payable
by the time of his or her death, the Participant's designated beneficiary must
elect the method of distribution no later than the earlier of (1) December 31 of
the calendar year in which distributions would be required to begin under this
section, or (2) December 31 of the calendar year which
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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.
(e) Payments to Children. In accordance with regulations issued by the
Secretary of the Treasury, any amount paid to a child shall be treated as
if it has been paid to the surviving spouse if such amount shall become
payable to the surviving spouse upon such child reaching majority (or other
designated event permitted under such regulations.
(f) Incidental Death Benefit Distributions. Any distribution required by
the rules applicable to incidental death benefits shall be treated as a
distribution required by this Section. All distributions required under
this Section shall be determined and made in accordance with the proposed
regulations under Section 401(a)(9) of the Code, including the minimum
distribution incidental benefit requirement of Section l.401(a)-(9)-2 of
the proposed regulations.
(g) Distributions. For the purposes of this section, distribution of a
Participant's interest is considered to begin on the Participant's required
beginning date or the date distribution is required to begin to the
surviving spouse. If distribution in the form of an annuity irrevocably
commences to the Participant before the required beginning date, the date
distribution is considered to begin is the date distribution actually
commences.
(h) Definitions.
(1) Applicable life expectancy. 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.
(2) Designated beneficiary. The individual who is designated as the
beneficiary under the Plan in
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accordance with Section 401(a)(9) and the proposed regulations thereunder.
(3) Distribution calendar year. 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.
(4) Participant's benefit.
(i) 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.
(ii) Exception for second distribution calendar year. For purposes of
paragraph (i) above, if any portion of the minimum distribution for the
first distribution calendar year is made in the second distribution
calendar year on or before the required beginning date, the amount of
the minimum distribution made in the second distribution calendar year
shall be treated as if it had been made in the immediately preceding
distribution calendar year.
(5) Required beginning date.
(i) General rule. The required beginning date of a Participant is the
first day of April of the calendar year following the calendar year in
which the Participant attains age 70-1/2.
(ii) Transitional rules. The required beginning date of a Participant
who attains age 70-1/2 before January 1, 1988, shall be determined in
accordance with (I) or (II) below:
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(I) Non-5-percent owners. The required beginning date of a
Participant who is not a 5-percent owner is the first day of April of
the calendar year following the calendar year in which the later of
retirement or attainment of age 70-1/2 occurs.
(II) 5-percent owners. The required beginning date of a Participant
who is a 5-percent owner during any year beginning after December 31,
1979, is the first day of April following the later of:
(A) the calendar year in which the Participant attains age
70-1/2, or
(B) the earlier of the calendar year with or within which ends
the Plan Year in which the Participant becomes a 5-percent owner, or
the calendar year in which the Participant retires.
The required beginning date of a Participant who is not a 5-percent owner who
attains age 70-1/2 during 1988 and who has not retired as of January 1, 1989,
is April 1, 1990.
(iii) 5-percent owner. A Participant is treated as a 5-percent owner for
purposes of this section if such Participant is a 5-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 top-heavy) 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.
(iv) Once distributions have begun to a 5-percent owner under this section,
they must continue to be distributed, even if the Participant ceases to be a
5-percent owner in a subsequent year.
(i) Transitional rule.
(1) Notwithstanding the other requirements of this Section and subject
to the requirements of Section 2.5.2, distribution on behalf of any
employee, including a 5--percent owner, may be made in accordance with all
of the following requirements (regardless of when such distribution
commences):
(a) The distribution by the trust is one which would not have
disqualified such trust under Section
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401(a) (9) of the Internal Revenue Code as in effect prior to amendment
by the Deficit Reduction 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.
2.5.2 Method of Distribution. Subject to the provisions of Section 2.5.1 above
and any security interest in a loan from the Plan for which any necessary
spousal consent has been obtained (to the extent such security interest is used
as repayment of the loan), distribution shall be made by any one or combination
of the following methods, as determined in accordance with the election of the
Participant (or in the case of death, his Beneficiary) with such spousal
consents as may be required by law in any of the following methods:
(a) In a single distribution; provided that if the Employer has applied a
consistent policy since the first Plan Year beginning after 1988, the Employer
may require a Participant who is a Highly Compensated Employee or who is
otherwise entitled to receive a lump sum distribution in excess of $25,000.00 to
execute a covenant not to compete with the Employer which shall provide that the
Participant agrees that he shall not solicit the business of any person or
entity doing business with the Employer at any time within the twelve month
period prior to the date of termination of his employment and, in addition,
shall not engage in any business, whether as a sole proprietor, partner, joint
venturer, shareholder, employee, independent contractor, agent or otherwise,
which is in competition with the business of the Employer for a period not
exceeding two (2) years from the date of such distribution within fifty (50)
miles of the principal offices of the Employer or containing such alternative
provisions as determined by the Employer.
(b) In substantially equal annual, quarterly or monthly installments over a
fixed period of time, provided that such period is less than the life expectancy
of the Participant and the Participant's Beneficiary as of the annuity starting
date.
If distribution is to be made in installments, the Plan Administrator shall
cause the undistributed portion of the Distributable Benefit to be transferred
to a Segregated Fund
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from which installment payments shall thereafter be withdrawn from time to time.
(c) Any alternative method of equivalent value contained in the Plan at
anytime on or after the first day of the first Plan Year beginning after
1988 to which the Participant consents.
(d) Incidental Death Benefits. For calendar years beginning before
January 1, 1989, if the Participant's spouse is not the designated
Beneficiary, the method of distribution selected must assure that at least
fifty (50%) percent of the present value of the amount available for
distribution is paid within the life expectancy of the Participant.
(e) Consents. If the value of a Participant's vested account balance
derived from Employer and Employee contributions does not exceed (and at
the time of any prior distribution did not exceed) $3,500, the consent of
the Participant and his or her spouse shall not be required; provided that
if such value exceeds $3,500, the Participant and spouse (or where either
has died, the survivor) must consent to any distribution of such account
balance. The consent shall be obtained in writing within the 90 day period
ending on the annuity starting date. Neither the consent of the Participant
nor the Participant's spouse shall be required to the extent that a
distribution is required to satisfy Section 401(a)(9) or Section 415 of
the Code. In addition, upon termination of the Plan if the Plan does not
offer an annuity option (purchased from a commercial provider), the
Participant's account balance in the Plan may, without the Participant's
consent, be distributed to the Participant or transferred to another
defined contribution plan (other than an employee stock ownership plan as
defined in Section 4975(e)(7) of the Code) within the same controlled
group.
(f) Zero Benefits. If the value of the Participant's vested and
nonforfeitable interest in the Plan at the time of his termination of
employment is zero, the Participant shall be deemed to have received a
distribution of such interest.
(g) Restrictions on Immediate Distributions. The Plan Administrator
shall notify the Participant and the Participant's spouse of the right to
defer any distribution until the Participant's account balance in the Plan
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
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Code and shall be provided no less than 30 days and no more than 90 days prior
to the annuity starting date. Notwithstanding the foregoing, only the
Participant need consent to the commencement of a distribution in the form of a
qualified joint and survivor annuity while the Participant's account balance in
the Plan is immediately distributable. Furthermore, if payment in the form of a
qualified joint and survivor annuity is not required with respect to the
Participant pursuant to the Plan, only the Participant need consent to the
distribution of an account balance that is immediately distributable. The
Participant's account balance is immediately distributable if any part of the
Participant's account balance could be distributed to the Participant (or
surviving spouse) before the Participant attains (or would have attained if not
deceased) the later of age 62 or the Normal Retirement Age.
(h) Transitional Rules.
(1) Any living Participant not receiving benefits on August 23, 1984, who
would otherwise not receive the benefits prescribed by the previous sections of
the article must be given the opportunity to elect to have the prior sections of
this article apply if such Participant is credited with at least one hour of
service under this Plan or a predecessor plan in a Plan Year beginning on or
after January 1, 1976, and such Participant has at least 10 years of vesting
service when he or she separated from service.
(2) Any living Participant not receiving benefits on August 23, 1984, who was
credited with at least one hour of service under this Plan or a predecessor plan
on or after September 2, 1974, and who is not otherwise credited with any
service in a Plan Year beginning on or after January 1, 1976, must be given the
opportunity to have his or her benefits paid in accordance with Section (4)
below.
(3) The respective opportunities to elect (as described above) must be
afforded to the appropriate Participants during the period commencing on August
23, 1984, and ending on the date benefits would otherwise commence to said
Participants.
(4) Any Participant who has elected pursuant to Section (2) above and any
Participant who does not elect under Section (1) or who meets the requirements
of Section (1) except that such Participant does not have at least 10 years of
vesting service when he or she separates from service, shall have his or her
benefits distributed in accordance with all of the following requirements if
benefits would have been payable in the
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form of a life annuity:
(i) Automatic joint and survivor annuity. If benefits in the form a life
annuity become payable to a married Participant who:
(1) begins to receive payments under the Plan on or after normal
retirement age; or
(2) dies on or after normal retirement age while still working for the
Employer; or
(3) begins to receive payments on or after the qualified early
retirement age; or
(4) separates from service on or after attaining normal retirement age
(or the qualified early retirement age) and after satisfying the
eligibility requirements for the payment of benefits under the plan and
thereafter dies before beginning to receive such benefits;
then such benefits will be received under this Plan in the form of a
qualified joint and survivor annuity, unless the Participant has elected
otherwise during the election period. The election period must begin at least 6
months before the Participant attains qualified early retirement age and end not
more than 90 days before the commencement of benefits. Any election hereunder
will be in writing and may be changed by the Participant at any time.
(ii) Election of early survivor annuity. A Participant who is employed after
attaining the qualified early retirement age will be given the opportunity to
elect, during the election period, to have a survivor annuity payable on death.
If the Participant elects the survivor annuity, payments under such annuity must
not be less than the payments which would have been made to the spouse under the
qualified joint and survivor annuity if the Participant had retired on the day
before his or her death. Any election under this provision will be in writing
and may be changed by the Participant at any time. The election period begins on
the later of (1) the 90th day before the Participant attains the qualified early
retirement age, or (2) the date on which participation begins, and ends on the
date the Participant terminates employment.
(iii) For purposes of this Section (4):
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(1) Qualified early retirement age is the later of:
(i) the earliest date, under the Plan, on which the Participant may
elect to receive retirement benefits,
(ii) the first day of the 120th month beginning before the Participant
reaches normal retirement age, or
(iii) the date the Participant begins participation.
(2) Qualified joint and survivor annuity is an annuity for the life of
the Participant with a survivor annuity for the life of the spouse as
otherwise described in the Plan.
2.5.3 Nature of Distributions. The nature of the distribution of a
Participant's Distributable Benefit shall be as hereinafter provided.
(a) Trust Fund and Segregated Funds. Subject to the Joint and Survivor Annuity
requirements, except as provided in subsection (b), distribution of a
Participant's Distributable Benefit shall consist of cash or property, or an
annuity contract as provided in Section 5.2 above.
(b) Insurance Policies. In the event that the Trustee has purchased Life
Insurance Policies on the life of the Participant, the values and benefits
available with respect to each such Policy shall be distributed as follows:
(i) If the Participant's employment terminates for any reason other
than death, then the Trustee shall either surrender the Life Insurance
Policy for its available cash value and distribute the proceeds as
provided in subsection (a) above or, at the election of the Participant,
distribute the Life Insurance Policy to the Participant, provided the
Participant has a vested and nonforfeitable interest in his Accounts in
an amount at least equal to the cash value thereof.
(ii) If the Participant's employment terminates by reason of death,
the beneficiary designated by the Participant in accordance with the
terms of the Plan shall be entitled to receive from the Trustee the full
amount of the proceeds thereof.
The Trustee shall apply for and be the owner of any Policies purchased under
the terms of the Plan. The Policies
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<PAGE>
must provide that the proceeds are payable to the Trustee subject to the
Trustee's obligation to pay over the proceeds to the designated Beneficiary.
Under no circumstances shall the trust retain any part of the proceeds. In the
event of any conflict between the terms of the Plan and the terms of any
Policies purchased hereunder, the Plan provisions shall control.
2.5.4 Advance Distributions. After a fully vested Participant's employment has
terminated and before he is otherwise entitled to distribution of his
Distributable Benefit which shall be as soon as practical, but prior to the
Anniversary Date following the date of termination, based on the preceding
Valuation Date the Trustee upon the request of the Participant or Beneficiary
shall make advance distributions to him or to his Beneficiary. The aggregate of
such an advance distribution shall not exceed the sum of the vested and
nonforfeitable interest in the Participant's Accounts.
An Employee who terminates service and elects to receive the value of the
Employee's vested account balance shall forfeit the nonvested portion. If the
Employee elects to have distributed less than the entire vested portion of the
account balance derived from Employer contributions, the part of the nonvested
portion that is 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 the vested Employer derived account balance.
Except as provided in the preceding paragraph, if a Participant receives a
distribution which reduces the balance in his Employer Account when he has less
than a one hundred percent (100%) vested and nonforfeitable interest in the
Account, the amount, if any, of the Participant's vested and nonforfeitable
interest in the undistributed balance of said Account on his Accrual Date shall
be transferred to a Segregated Account and shall not be less than an amount
("X") determined by the formula: x=P(AB+(RxD) ) - (RxD). For purposes of
applying the formula: P is the vested percentage at the relevant time; AB is the
account balance at the relevant time; and D is the amount of the distribution;
and R is the ratio of the Account balance at the relevant time to the Account
balance after distribution.
A Participant who receives a distribution of an amount deducted from his
Employer Account when he has less than a one hundred percent (100%) vested and
nonforfeitable interest in his Employer Account and who subsequently again
becomes an Employee may repay the full amount of such distribution before he
incurs five (5) consecutive Breaks in Service following the date of the
distribution but in no event later than the fifth (5th) anniversary of the date
of his reemployment; provided, however, that in the event of repayment neither
the Trust nor the Employer shall be liable for any federal or state income tax
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resulting from the distribution and the Participant shall indemnify and hold
harmless the Trust and the Employer for and from any such liability. In the
event of such repayment, the Employer Account of the Participant shall be
credited with the full amount of such repayment and the previously undistributed
balance. In the event the Participant fails to repay the full amount of such
distribution within the time permitted for repayment, the non-vested and
forfeitable portion of the previously undistributed balance of his Employer
Account which had been transferred to a Segregated Account shall be deemed a
forfeiture as of the last day of such period. If a Participant is deemed to
receive a distribution because his vested and nonforfeitable interest at the
time of his termination of employment is zero and the Participant resumes
employment covered under the Plan before the date the Participant incurs five
(5) consecutive 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 the deemed distribution.
2.5.5 In Service Distribution. Prior to a Participant's termination of
employment or upon attainment of his Normal Retirement Date, provided the Plan
does not take into account contributions to provide Social Security benefits in
the allocation of Employer contributions, a Participant shall be entitled to
receive a distribution of all or part of his interest in the Plan upon filing a
written request with the Plan Administrator; provided that no distribution shall
be made unless the interest of the Participant in the plan is fully vested and
nonforfeitable and the individual has been a Participant for 5 Plan Years. In
service distributions are permitted at the election of the Participant for
amounts held in a Segregated Account attributable to a rollover from another
plan regardless of age or periods of participation. Any distribution shall be
subject to the written consent of the Participant`s spouse.
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ARTICLE VI
CONTINGENT TOP HEAVY PROVISIONS
2.6.1 Top Heavy Requirements. If the Plan becomes a Top Heavy Plan during any
Plan Year, the following provisions shall supersede any conflicting provisions
in the Plan or Trust and apply for such Plan Year and each subsequent Plan Year:
(a) Except as otherwise provided below, the Employer contributions and
forfeitures allocated on behalf of any Participant who is not a Key Employee
shall not be less than the lesser of three percent of such Participant's
Compensation or in the case where the Employer has no defined benefit plan which
designates this plan to satisfy Section 401 of the Code, the largest percentage
of Employer contributions and forfeitures, as a percentage of the first $200,000
of the Key Employee's compensation, allocated on behalf of any Key Employee for
that year. The minimum allocation is determined without regard to any Social
Security contribution. This minimum allocation shall be made even though, under
other plan provisions, the Participant would not otherwise be entitled to
receive an allocation, or would have received a lesser allocation for the year
because of (i) the Participant's failure to complete 1,000 Hours of Service (or
any equivalent provided in the plan), or (ii) the Participant's failure to make
mandatory employee contributions to the plan, or (iii) compensation less than, a
stated amount.
For purposes of computing the minimum allocation, Compensation shall mean a
Participant's W--2 compensation.
The minimum allocation provided above shall not apply to any Participant who
was not employed by the Employer on the last day of the Plan Year.
The minimum allocation provided above shall not apply to any Participant to
the extent the Participant is covered under any other plan or plans of the
Employer and the Employer has provided that the minimum allocation or benefit
requirement applicable to top-heavy plans will be met in the other plan or
plans.
(b) References in Section 3.2.1(d), pertaining to combined plan limitations,
to "1.25" shall be applied by substituting "1.0" for "1.25" therein. Reference
in Section 3.2.1(e), pertaining to a special transition rule, to "$51,875" shall
be applied by substituting "$41,500" for "$51,875" therein.
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(C) The vested and nonforfeitable interest of each Participant shall
be equal to the percentage determined under the following schedule if
greater than the percentage determined under Section 2.4.2:
Years of Service Percent Vested
Less than 1 0%
1 but less than 2 1%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
The top-heavy 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 becomes top--heavy.
If the Plan ceases to be a Top Heavy Plan, the vesting which occurs while the
Plan is a Top Heavy Plan shall not be cutback. Any minimum allocation required
(to the extent required to be nonforfeitable under Section 416(b)) may not be
forfeited under Section 411(a) (3) (B) or (D) of the Code.
2.6.2 Top Heavy Definitions. The following terms, as used in this Plan, shall
have the following meaning:
(a) "Key Employee": An Employee or former employee who, at any time
during the Determination Period is either:
(i) an officer of the Employer having an Annual Compensation greater
than fifty (50%) percent of the amount in effect under Section 415(b)
(1) (A) of the Code;
(ii) an owner (or a person considered an owner under Section 318 of
the Code) of one of the ten largest interests in the Employer if such
individual's Annual Compensation from the Employer is more than the
limitation in effect under Section 415(c) (1) (A) of the Code;
(iii) any person who owns directly or indirectly more than five (5%)
percent of the outstanding stock of the Employer or stock possessing
more than five (5%) percent of the total combined voting power of all
stock of the Employer or, in the case of an unincorporated Employer, the
capital or profits interest in the Employer;
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(iv) any person who owns directly or indirectly more than one (1%)
percent of the outstanding stock of the Employer or stock possessing
more than one (1%) percent of the total combined voting power of all
stock of the Employer or, in the case of an unincorporated Employer, the
capital or profits interest in the Employer and having an Annual
Compensation from the Employer of more than $150,000; or
(v) any beneficiary of a Key Employee.
The determination of who is a Key Employee shall be made in accordance with
Section 416(i)(1) of the Code and the regulations thereunder.
(b) "Aggregation Group": Each qualified retirement plan of the Employer
in which a Key Employee is a participant and each other qualified
retirement plan of the Employer which enables any plan in which a Key
Employee is a participant to meet the requirements of Section 401(a)(4) or
Section 410 of the Code.
(c) "Annual Compensation": Compensation as defined in Section 415(c)(3)
of the Code, but including amounts contributed by the Employer pursuant to
a salary reduction agreement which are excludable from the Employee's gross
income under Section 125, Section 402(a)(8), Section 402(h) or Section
403(b) of the Code.
(d) "Top-Heavy Plan": For any Plan Year beginning after December 31,
1983, the plan is top-heavy if any of the following conditions exists:
(i) If the top-heavy ratio for the plan exceeds 60 percent and the
plan is not part of any required aggregation group or permissive
aggregation group of plans.
(ii) If the plan is a part of a required aggregation group of plans
but not part of a permissive aggregation group and the top-heavy ratio
for the group of plans exceeds 60 percent.
(iii) If the plan is a part of a required aggregation group and part
of a permissive aggregation group of plans and the top-heavy ratio for
the permissive aggregation group exceeds 60 percent.
(e) "Top-Heavy Ratio":
(i) If the Employer maintains one or more defined contribution plans
(including any simplified employee pension plan) and the Employer has
not maintained any
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defined benefit plan which during the 5-year period ending on the Determination
Date(s) has or has had accrued benefits, the top-heavy ratio for this plan alone
or for the required or permissive aggregation group as appropriate is a
fraction, the numerator of which is the sum of the account balances of all Key
Employees as of the Determination Date(s) (including any part of any account
balance distributed in the 5-year period ending on the Determination Date(s)),
and the denominator of which is the sum of all account balances (including any
part of any account balance distributed in the 5-year period ending on the
Determination Date(s)), both computed in accordance with Section 416 of the Code
and the regulations thereunder. Both the numerator and denominator of the top-
heavy ratio are increased to reflect any contribution not actually made as of
the Determination Date, but which is required to be taken into account on that
date under Section 416 of the Code and the regulations thereunder.
(ii) If the Employer maintains one or more defined contribution plans
(including any simplified employee pension plan) and the Employer maintains or
has maintained one or more defined benefit plans which during the 5-year period
ending on the Determination Date(s) has or has had any accrued benefits, the
top-heavy ratio for any required or permissive aggregation group as appropriate
is a fraction, the numerator of which is the sum of account balances under the
aggregated defined contribution plan or plans for all Key Employees, determined
in accordance with (i) above, and the present value of accrued benefits under
the aggregated defined benefit plan or plans for all Key Employees as of the
Determination Date(s), and the denominator of which is the sum of the account
balances under the aggregated defined contribution plan or plans for all
Participants, determined in accordance with (i) above, and the present value of
accrued benefits under the defined benefit plan or plans for all Participants as
of the Determination Date(s), all determined in accordance with Section 416 of
the Code and the regulations thereunder. The accrued benefits under a defined
benefit plan in both the numerator and denominator of the top-heavy ratio are
increased for any distribution of an accrued benefit made in the five-year
period ending on the Determination Date.
(iii) For purposes of (i) and (ii) above, the value of account balances and
the present value of accrued benefits will be determined as of the most recent
valuation date that falls within or ends with the 12-month period ending on the
Determination Date, except as provided in Section 416 of the Code and the
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regulations thereunder for the first and second plan years of a defined benefit
plan. The account balances and accrued benefits of a Participant (1) who is not
a Key Employee but was a Key Employee in a prior year, or (2) who has not been
credited with at least one hour of service with any Employer maintaining the
plan at any time during the 5-year period ending on the Determination Date will
be disregarded. The calculation of the top-heavy ratio, and the extent to which
distributions, rollovers, and transfers are taken into account will be made in
accordance with Section 416 of the Code and the regulations thereunder.
Deductible employee contributions will not be taken into account for purposes of
computing the top-heavy ratio. When aggregating plans, the value of account
balances and accrued benefits will be calculated with reference to the
Determination Dates that fall within the same calendar year.
The accrued benefit of a Participant other than a Key Employee shall be
determined under (a) the method, if any, that uniformly applies for accrual
purposes under all defined benefit plans maintained by the Employer, or (b) if
there is no such method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional rule of Section 411(b)(1)(C)
of the Code.
(f) "Permissive Aggregation Group": The required aggregation group of
plans plus any other plan or plans of the Employer which, when considered
as a group with the required aggregation group, would continue to satisfy
the requirements of Sections 401(a)(4) and 410 of the Code.
(g) "Required Aggregation Group":
(i) Each qualified plan of the Employer in which at least one Key
Employee participates or participated at any time during the
Determination Period (regardless of whether the plan has terminated).
(ii) Any other qualified plan of the Employer which enables a plan
described in (i) to meet the requirements of Sections 401(a)(4) or 410
of the Code.
(h) "Determination Date": For any plan year subsequent to the first plan
year, the last day of the preceding plan year. For the first plan year of
the plan, the last day of that year.
(i) "Valuation Date": The date elected by the Employer as of which
account balances or accrued benefits are valued for purposes of calculating
the top-heavy ratio. The
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top-heavy valuation date shall be the first day of the Plan Year
(j) "Present Value": Present value shall be based only on the interest
and mortality rates.
(k) "Determination Period": The Plan Year containing the Determination
Date and the four (4) preceding Plan Years.
(1) "Non-Key Employee": An Employee who is not a Key Employee.
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PART III
ARTICLE I
ACCOUNTING
3.1.1 Accounts. All income, profits, recoveries, contributions and any and all
monies, securities and properties of any kind at any time received or held by
the Trustee shall be held as a commingled Trust Fund, except to the extent such
assets are transferred to a Segregated Fund. For accounting purposes, the Plan
Administrator shall establish and maintain certain Accounts for each
Participant. An Employer Account shall be established and maintained for each
Participant, to which shall be added the Participant's share of Employer
contributions and forfeitures. If a Participant has made voluntary nondeductible
contributions, the Plan Administrator shall establish and maintain a Voluntary
Account for the Participant. If, in accordance with any of the provisions of the
Plan, assets are either deposited initially or transferred to a Segregated Fund
for the benefit of a Participant, the Plan Administrator shall establish and
maintain a Segregated Account for the Participant. If a Participant elects to
exercise investment control over all or a portion of his Accounts, the Plan
Administrator shall establish and maintain a Controlled Account for the
Participant.
3.1.2 Adjustments. As of each Valuation Date each Participant's Accounts shall
be adjusted in the following order and manner.
(a) Distributions. Any distribution made to or on behalf of a
Participant since the last preceding Valuation Date shall be deducted from
the Participant's Account from which the distribution was made.
(b) Insurance Premiums. Payments made since the last preceding Valuation
Date for Life Insurance Policies on the life of a Participant (including
without limitation payments of premiums and interest on policy loans) shall
be deducted from the Account of the Participant from which the payment was
made.
(c) Adjustment to Fair Market Value. The value of all monies, securities
and other property in the Trust Fund, excluding Life Insurance Policies,
shall be appraised by the Trustee at the then fair market value. In
determining such value, all income and contributions, if any, received by
the Trustee from the Employer or Participants on account of such year
calculated under the method of accounting of the Trust shall be included
and there shall be deducted all expenses determined in accordance with the
method of accounting
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adopted by the Plan Administrator.
If the total net value of the Trust Fund so determined exceeds (or is less
than) the total amount in the affected Accounts of all Participants, the excess
(or deficiency) shall be added to (or deducted from) the respective Accounts of
all Participants in the ratio that each such Participant's Account bears to the
total amount in all such Accounts.
(d) Adjustment of Segregated and Controlled Accounts. The value of all
monies, securities and other property in each Participant's Segregated
Account or Controlled Account, if any, but exclusive of Life Insurance
Policies, shall be appraised by the Trustee at the then fair market value.
In determining such value, all income calculated under the method of
accounting of the Trust shall be included and all expenses shall be
deducted.
If the total net value of a Participant's Segregated Account or Controlled
Account, as the case may be, so determined exceeds (or is less than) the
previous balance in such Account, the excess (or deficiency) shall be added to
(or deducted from) the Participant's respective Account.
(e) Insurance Dividends. Dividends or credits received since the last
preceding Valuation Date on any Life Insurance Policy on the life of a
Participant shall be added to the Account of the Participant from which the
premiums for such Life Insurance Policy have been paid.
(f) Contributions and Forfeitures. Each Participant's Account shall be
increased by that portion of the contribution and forfeitures which is
allocated to him.
(g) Transfers from Trust Fund. To the extent that funds in the Trust
Fund attributable to a Participant's Account were transferred since the
last preceding Valuation Date or are to be transferred to a Segregated Fund
pursuant to any of the provisions of the Plan, the Account from which the
funds were transferred shall be decreased and the Account to which the
funds were transferred shall be increased.
(h) Transfers to Trust Fund. To the extent that funds are transferred
from a Segregated Fund of a Participant to the Trust Fund pursuant to any
of the provisions of the Plan, the Account from which the funds were
transferred shall be decreased and the Account of the Participant to which
the funds were transferred shall be increased.
(i) Time of Adjustments. Every adjustment to be made pursuant to this
Section shall be considered as having been made as of the applicable
Valuation Date regardless of the
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actual dates of entries, receipt by the Trustee of contributions by the
Participant or the Employer for such Year, or the transfers of funds to or from
Segregated Funds. The Trustee's determination as to valuation of trust assets
and charges or credits to the individual Accounts of the respective Participants
shall be conclusive and binding on all persons. If funds are transferred to a
Segregated Fund as of any date other than a Valuation Date pursuant to the terms
of the Plan, the adjustments to be made pursuant to this Section shall be made
as of the date as of which the transfer is made, as if such date is a Valuation
Date.
If any Participant receives a distribution pursuant to the terms of the Plan
as of any date other than a Valuation Date, then earnings will be credited
solely as of the immediately preceding Valuation Date.
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ARTICLE II
LIMITATIONS
3.2.1 Limitations on Annual Additions. If the Participant does not participate
in, and has never participated in another qualified plan maintained by the
Employer, or an individual medical account, as defined in Section 415(1)(2) of
the Code, maintained by the Employer, which provides an annual addition, subject
to the adjustments hereinafter set forth, the amount of annual additions which
may be credited to a Participant's Accounts during any Limitation Year shall in
no event exceed the lesser of (a) thirty thousand dollars ($30,000.00) or, if
greater, one-fourth of the dollar limitation in effect under Section
415(b)(1)(A) of the Code as in effect for the Limitation Year or (b) twenty-five
percent (25%) of the Participant's Compensation for the Plan Year. The
compensation limitation referred to in (b) shall not apply to any contribution
for medical benefits (within the meaning of Section 401(h) or Section
419A(f)(2) of the Code) which is otherwise treated as an annual addition under
Section 415(1)(1) or 419A(d)(2) of the Code. If the Employer contribution that
would otherwise be contributed or allocated to the Participant's Account would
cause the annual additions for the Limitation Year to exceed the maximum
permissible amount, the amount contributed or allocated shall be reduced so that
the annual additions for the Limitation Year shall equal the maximum permissible
amount.
For these purposes, the maximum permissible amount is the maximum annual
additions permitted on behalf of a Participant.
(a) Annual Additions. The term "annual additions" shall mean, the sum of
the following amounts credited to a Participant's Accounts for the
Limitation Year:
(i) Employer contributions;
(ii) Employee contributions;
(iii) Forfeitures; and
(iv) Amounts allocated after March 31, 1984, to an individual medical
account, as defined in Section 415(1)(2) of the Code, which is part of
a pension or annuity plan maintained by the Employer and amounts derived
from contributions paid or accrued after December 31, 1985, in taxable
years ending after such date, which are attributable to post-retirement
medical
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<PAGE>
benefits, allocated to the separate account of a key employee, as
defined in Section 4l9A(d) (3) of the Code, under a welfare benefit fund
as defined in Section 419(e) of the Code, maintained by the Employer.
Any excess amounts applied under subsections (b) and (c) below to reduce
Employer contributions are considered annual additions for such Limitation Year.
(b) Excessive Annual Additions. Prior to determining a Participant's
actual Compensation for a Limitation Year, the Employer may determine the
maximum permissible Annual Addition for the Participant on the basis of a
reasonable estimation of the Participant's Compensation for the Limitation
Year, uniformly determined for all Participants similarly situated. As soon
as is administratively feasible after the end of the Limitation Year, the
maximum permissible amount for the Limitation Year shall be determined on
the basis of the Participant's actual Compensation for the Limitation Year.
Any Excessive Annual Addition attributable to nondeductible voluntary
employee contributions made by a Participant to the extent they reduce the
excess amount shall be returned to the Participant before any other
adjustments are made.
If 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 shall be used to reduce Employer contributions (including any allocation
of forfeitures) for such Participant in the next Limitation Year, and each
succeeding Limitation Year, if necessary. If 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 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 particular
Limitation Year, all amounts in the suspense account must be allocated and
reallocated to Participants' Accounts before any Employer 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. If a suspense
account is in existence at any time during a Limitation Year, it shall not
participate in the allocation of the Trust's investment gains and losses.
(c) Participation in Certain Other Plans. If in addition to this Plan,
the Participant is covered under another qualified defined contribution
plan maintained by the Employer, a welfare benefit fund, as defined in
Section
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<PAGE>
419(e) of the code maintained by the Employer, or an individual medical account,
as defined in Section 415(1)(2) of the Code, maintained by the Employer, which
provides an Annual Addition during any Limitation Year, the annual additions
which may be credited to a Participant's account under this Plan for any such
Limitation Year shall not exceed the maximum permissible amount reduced by the
Annual Additions credited to a Participant's Account under the other plans and
welfare benefit funds for the same Limitation Year. If the Annual Additions with
respect to the Participant under other defined contribution plans and welfare
benefit funds maintained by the Employer are less than the maximum permissible
amount and the Employer contribution that would otherwise be contributed or
allocated to the Participant's Account under this Plan would cause the Annual
Additions for the Limitation Year to exceed this limitation, the amount
contributed or allocated shall be reduced so that the Annual Additions under all
such plans and funds for the Limitation Year shall equal the maximum permissible
amount. If the Annual Additions with respect to the Participant under such other
defined contribution plans and welfare benefit funds in the aggregate are equal
to or greater than the maximum permissible amount, no amount will be contributed
or allocated to the Participant's Account under this Plan for the Limitation
Year.
Prior to determining the Participant's actual Compensation for the Limitation
Year, the Employer may determine the maximum permissible amount for a
Participant in the manner described in subsection (b) above. As soon as is
administratively feasible after the end of the Limitation Year, the maximum
permissible amount for the Limitation Year shall be determined on the basis of
the Participant's actual Compensation for the Limitation Year.
If a Participant's Annual Additions under this Plan and such other plans would
result in an excess amount for a Limitation Year, the excess amount shall be
deemed to consist of the Annual Additions last allocated, except that Annual
Additions attributable to a welfare benefit fund or individual medical account
will be deemed to have been allocated first regardless of the actual allocation
date.
If the excess amount was allocated to a Participant on an allocation date of
this Plan which coincides with an allocation date of another plan, the excess
amount attributed to this Plan will be the product of:
(i) the total excess amount allocated as of such date, times
(ii) the ratio of (I) the Annual Additions allocated to the
Participant for the Limitation Year as of such date under this Plan to
(II) the total Annual Additions
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allocated to the Participant for the Limitation Year as of such date
under this and all the other qualified defined contribution plans. Any
excess amount attributed to this Plan will be disposed in the manner
described in subsection (b), above
For purposes hereof, the excess amount is the excess of the Participant's
annual additions for the Limitation Year over the maximum permissible amount.
If the Employer maintains, or at any time maintained, a qualified defined
benefit plan covering any Participant in this Plan, the sum of the Participant's
defined benefit plan fraction and defined contribution plan fraction will not
exceed 1.0 in any Limitation Year.
(d) Combined Plan Limitation. In the event that a Participant in this Plan
participates in a defined benefit plan (as defined in the applicable sections of
the Code) maintained by the Employer, the sum of the "defined benefit plan
fraction" plus the "defined contribution plan fraction" shall at no time exceed
1.0. Except to the extent that applicable law permits greater amounts to be
provided on behalf of a Participant, in which event such law is hereby
incorporated by reference, the foregoing fractions are defined as follows. The
"defined benefit plan fraction" for any year is a fraction (i) the numerator of
which is the projected annual benefit of the Participant under all the defined
benefit plans (whether or not terminated) maintained by the Employer (determined
as of the close of the year), and (ii) the denominator of which is the lesser of
(A) the product of 1.25 multiplied by the dollar limitation determined for the
Limitation Year under Sections 415(b) and (d) of the Code, or (B) the product of
1.4 multiplied by one hundred (100%) percent of the Participant's average
compensation for the three (3) consecutive Years of Service with the Employer
that produces the highest average, 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 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 for all Limitation Years beginning
before January 1, 1987. The "defined contribution fraction" for any year is a
fraction (i) the numerator of which is the sum of
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the annual additions to the Participant's accounts under all 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 and
individual medical accounts (as defined in Sections 419(e) and 415(1) (2) of the
Code) maintained by the Employer, and (ii) the denominator of which is the sum
of the lesser of the following amounts determined for the current year and for
all prior limitation years of service with the Employer, regardless of whether a
defined contribution plan was maintained by the Employer: (A) the product of
1.25 multiplied by the dollar limitation determined under Sections 415(b) and
(d) of the Code in effect under Section 415(c) (1) (A) of the Code, or (B)
thirty--five (35%) percent of the Participant's compensation from the Employer
for such plan year. If the Employee was a Participant as of the end of the first
day of the first Limitation Year beginning after December 31, 1986, in one or
more defined contribution plans maintained by the Employer which were in
existence on May 6, 1986, the numerator of this fraction will be adjusted if the
sum of this fraction and the defined benefit fraction would otherwise exceed 1.0
under the terms of this Plan. Under the adjustment, an amount equal to the
product of (1) the excess of the sum of the fractions over 1.0 times (2) the
denominator of this fraction, 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.
The projected annual benefits under a defined benefit plan is 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 the Participant continues employment until
normal retirement age under the plan (or current age, if later), and the
Participant's compensation for the current Limitation Year and all other
relevant factors used to determine benefits under the Plan remain constant for
all
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future Limitation Years.
(e) Special Transition Rule for Defined Contribution Fraction. At the
election of the Plan Administrator, in applying the provisions of
subsection (d) above with respect to the defined contribution plan fraction
for any year ending after December 31, 1982, the amount taken into account
for the denominator for each Participant for all years ending before
January 1, 1983 shall be an amount equal to the product of the amount of
the denominator determined under subsection (d) above for the year ending
in 1982, multiplied by the "transition fraction". The "transition fraction"
is a fraction (i) the numerator of which is the lesser of (A) $51,875 or
(B) 1.4 multiplied by twenty-five (25%) percent of the Participant's
compensation for the year ending in 1981, and (ii) the denominator of which
is the lesser of (A) $41,500 or (B) twenty-five (25%) percent of the
Participant's compensation for the year ending in 1981.
(f) Special Transition Rule for Excess Benefits. Provided that the Plan
satisfied the requirements of Section 415 of the Code for the last Plan
Year beginning before January 1, 1983, an amount shall be subtracted from
the numerator of the defined contribution plan fraction (not exceeding such
numerator) so that the sum of the defined benefit plan fraction and the
defined contribution fraction computed in accordance with Section 415(e)(1)
of the Code (as amended by the Tax Equity and Fiscal Responsibility Act of
1982) does not exceed 1.0 for such year, in accordance with regulations
issued by the Secretary of the Treasury pursuant to the applicable
provisions of the Code.
(g) Employer. For purposes of this Section, employer shall mean the
Employer that adopts this Plan and all members of a group of employers
which constitutes a controlled group of corporations or trades or
businesses under common control (as defined in Sections 414(b) and (c) of
the Code, as modified by Section 415(h) of the Code), or an affiliated
service group (as defined in Section 414(m) of the Code) of which the
adopting employer is part and any other entity required to be aggregated
with the Employer under Section 414(o) of the Code and the regulations
issued thereunder.
(h) Compensation. For purposes of this Section, Compensation shall mean
all of a Participant's:
(i) Section 415 Safe-harbor Compensation. Wages, salaries and fees for
professional services and other amounts received for personal services
actually rendered in the course of employment for the Employer (including
but not limited to commissions paid salesmen, compensation for services on
the basis of a percentage of profits,
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commissions on insurance premiums, tips, bonuses, fringe benefit, reimbursements
and expense allowances), but excluding:
(I) Employer contributions to a plan of deferred compensation which
are not includable in the Employee's gross income for the taxable year
in which contributed, or employer contributions under a simplified
employee pension plan to the extent such contributions are deductible by
the Employee or any distributions from a plan of deferred compensation;
(II) Amounts realized from the exercise of a non--qualified stock
option or when restricted stock or property held by the Employee is no
longer subject to a substantial risk of forfeiture or becomes freely
transferable.
(III) Amounts realized from the sale, exchange or other disposition of
stock acquired under an incentive stock option; and
(IV) Other amounts which received special tax benefits or
contributions made by the Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity described in
Section 403(b) of the Code (whether or not the amounts are actually
excludable from the gross income of the Employee).
For any self--employed individual, compensation shall mean earned income. For
limitation years beginning after December 31, 1991, for purposes of applying the
limitations of this Article, Compensation for a Limitation Year is the
Compensation actually paid or includable in gross income during such Limitation
Year.
(i) Short Limitation Year. If the Limitation Year is amended to a
different twelve (12) consecutive month period, the new Limitation Year
must begin within the Limitation Year in which the amendment is made. If a
short Limitation Year is created because of an amendment changing the
Limitation Year to a different twelve (12) consecutive month period, the
maximum annual addition shall not exceed the defined contribution dollar
limitation determined in accordance with Section 415(c) (1) (A) of the Code
then in effect multiplied by a fraction, the numerator of which is the
number of months in the short Limitation Year and the denominator of which
is twelve (12).
3.2.2 Controlled Businesses. If this plan provides contributions or benefits
for one or more owner-employees who control both the business for which this
plan is established and one or more other trades or businesses, this plan and
the plan
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established for other trades or businesses must, when looked at as a single
plan, satisfy sections 401(a) and (d) for the employees of this and all other
trades or businesses.
If the plan provides contributions or benefits for one or more owner--
employees who control one or more other trades or businesses, the employees of
the other trades or businesses must be included in a plan which satisfies
sections 401(a) and (d) and which provides contributions and benefits not less
favorable than provided for owner--employees under this plan.
If an individual is covered as an owner--employee under the plans of two or
more trades or businesses which are not controlled and the individual controls a
trade or business, then the contributions or benefits of the employees under the
plan of the trades or businesses which are controlled must be as favorable as
those provided for him under the most favorable plan of the trade or business
which is not controlled.
For purposes of the preceding paragraphs, an owner--employee, or two or more
owner--employees, will be considered to control a trade or business if the
owner--employee, or two or more owner--employees together:
(a) own the entire interest in an unincorporated trade or business, or
(b) in the case of a partnership, own more than 50 percent of either the
capital interest or the profits interest in the partnership.
For purposes of the preceding sentence, an owner--employee, or two or more
owner--employees shall be treated as owning any interest in a partnership which
is owned, directly or indirectly, by a partnership which such owner--employee,
or such two or more owner--employees, are considered to control within the
meaning of the preceding sentence.
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ARTICLE III
FIDUCIARIES
3.3.1 Standard of Conduct. The duties and responsibilities of the Plan
Administrator and the Trustee with respect to the Plan shall be discharged (a)
in a non--discriminatory manner; (b) for the exclusive benefit of Participants
and their Beneficiaries; (c) by defraying the reasonable expenses of
administering the Plan; (d) with the care, skill, prudence, and diligence under
the circumstances then prevailing that a prudent man acting in a like capacity
and familiar with such matters would use in the conduct of an enterprise of a
like character and with like aims; (e) by diversifying the investments of the
Plan so as to minimize the risk of large losses, unless under the circumstances
it is clearly prudent not to do so; and (f) in accordance with the documents and
instruments governing the Plan insofar as such documents and instruments are
consistent with the provisions of the Act.
3.3.2 Individual Fiduciaries. At any time that a group of individuals is
acting as Plan Administrator or Trustee, the number of such persons who shall
act in such capacity from time to time shall be determined by the Employer. Such
persons shall be appointed by the Employer and may or may not be Participants or
Employees of the Employer. Any action taken by a group of individuals acting as
either Plan Administrator or Trustee shall be taken at the direction of a
majority of such persons, or, if the number of such persons is two (2), by
unanimous consent.
3.3.3 Disqualification from Service. No person shall be permitted to serve as
a Fiduciary, custodian, counsel, agent or employee of the Plan or as a
consultant to the Plan who has been convicted of any of the criminal offenses
specified in the Act.
3.3.4 Bonding. Except as otherwise permitted by law, each Fiduciary or person
who handles funds or other property or assets of the Plan shall be bonded in
accordance with the requirements of the Act.
3.3.5 Prior Acts. No Fiduciary shall be liable for any acts occurring prior to
the period of time during which the Fiduciary was actually serving in such
capacity with respect to the Plan.
3.3.6 Insurance and Indemnity. The Employer may purchase or cause the Trustee
to purchase and keep current as an authorized expense liability insurance for
the Plan, its Fiduciaries, and any other person to whom any financial or other
administrative responsibility with respect to the Plan and Trust
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is allocated or delegated, from and 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 the duties, responsibilities and obligations
under the Plan and under the Act; provided that any such insurance policy
purchased with Plan assets permits subrogation by the insurer against the
Fiduciary in the case of breach by such Fiduciary. Unless otherwise determined
and communicated to affected parties by the Employer, the Employer shall
indemnify and hold harmless each such person, other than a corporate trustee,
for and from any such liabilities, costs and expenses which are not covered by
any such insurance, except to the extent that any such liabilities, costs or
expenses are judicially determined to be due to the gross negligence or willful
misconduct of such person. No Plan assets may be used for any such
indemnification.
3.3.7 Expenses. Expenses incurred by the Plan Administrator or the Trustee in
the administration of the Plan and the Trust, including fees for legal services
rendered, such compensation to the Trustee as may be agreed upon in writing from
time to time between the Employer and the Trustee, and all other proper charges
and expenses of the Plan Administrator or the Trustee and of their agents and
counsel shall be paid by the Employer, or at its election at any time or from
time to time, may be charged against the assets of the Trust, but until so paid
shall constitute a charge upon the assets of the Trust. The Trustee shall have
the authority to charge the Trust Fund for its compensation and reasonable
expenses unless paid or contested by written notice by the Employer within sixty
(60) days after mailing of the written billing by the Trustee. All taxes of any
and all kinds whatsoever which may be levied or assessed under existing or
future laws upon the assets of the Trust or the income thereof shall be paid
from such assets. Notwithstanding the foregoing, no compensation shall be paid
to any Employee for services rendered under the Plan and Trust as a Trustee.
3.3.8 Agents, Accountants and Legal Counsel. The Plan Administrator shall have
authority to employ suitable agents, custodians, investment counsel, accountants
and legal counsel who may, but need not be, legal counsel for the Employer. The
Plan Administrator and the Trustee shall be fully protected in acting upon the
advice of such persons. The Trustee shall at no time be obliged to institute any
legal action or to become a party to any legal action unless the Trustee has
been indemnified to the Trustee's satisfaction for any fees, costs and expenses
to be incurred in connection therewith.
3.3.9 Investment Manager. The Employer may employ as an investment manager or
managers to manage all or any part of the Trust Fund any (i) investment advisor
registered under the Investment Advisors Act of 1940; (ii) bank as defined in
said
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Act; or (iii) insurance company qualified to perform investment management
services in more than one state. Any investment manager shall have all powers of
the Trustee in the management of such part of the Trust Fund, including the
power to acquire or dispose of assets. In the event an investment manager is so
appointed, the Trustee shall not be liable for the acts or omissions of such
investment manager or be under any obligation to invest or otherwise manage that
part of the Trust Fund which is subject to the management of the investment
manager. The Employer shall notify the Trustee in writing of any appointment of
an investment manager, and shall provide the Trustee with the investment
manager's written acknowledgment that it is a fiduciary with respect to the
Plan.
3.3.10 Finality of Decisions or Acts. Except for the right of a Participant or
Beneficiary to appeal the denial of a claim, any decision or action of the Plan
Administrator or the Trustee made or done in good faith upon any matter within
the scope of authority and discretion of the Plan Administrator or the Trustee
shall be final and binding upon all persons. In the event of judicial review of
actions taken by any Fiduciary within the scope of his duties in accordance with
the terms of the Plan and Trust, such actions shall be upheld unless determined
to have been arbitrary and capricious.
3.3.11 Certain Custodial Accounts and Contracts. The term "Trustee" as used
herein will also include a person holding the assets of a custodial account, an
annuity contract or other contract which is treated as a qualified trust
pursuant to Section 401(f) of the Code and references to the Trust Fund shall be
construed to apply to such custodial account, annuity contract or other
contract.
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ARTICLE IV
PLAN ADMINISTRATOR
3.4.1 Administration of Plan. The Plan Administrator shall be designated by
the Employer from time to time. The primary responsibility of the Plan
Administrator is to administer the Plan for the exclusive benefit of the
Participants and their Beneficiaries, subject to the specific terms of the Plan.
The Plan Administrator shall administer the Plan and shall construe and
determine all questions of interpretation or policy in a manner consistent with
the Plan. The Plan Administrator may correct any defect, supply any omission, or
reconcile any inconsistency in such manner and to such extent as he shall deem
necessary or advisable to carry out the purpose of the Plan; provided, however,
that any interpretation or construction shall be done in a nondiscriminatory
manner and shall be consistent with the intent that the Plan shall continue to
be a qualified Plan pursuant to the Code, and shall comply with the terms of the
Act. The Plan Administrator shall have all powers necessary or appropriate to
accomplish his duties under the Plan.
(a) The Plan Administrator shall be charged with the duties of the general
administration of the Plan, including but not limited to the following:
(1) To determine all questions relating to the eligibility of an
Employee to participate in the Plan or to remain a Participant hereunder.
(2) To compute, certify and direct the Trustee with respect to the
amount and kind of benefits to which any Participant shall be entitled
hereunder.
(3) To authorize and direct the Trustee with respect to all
disbursements from the Trust Fund.
(4) To maintain all the necessary records for the administration
of the Plan.
(5) To interpret the provisions of the Plan and to make and
publish rules and regulations for the Plan as the Plan Administrator may
deem reasonably necessary for the proper and efficient administration of
the Plan and consistent with its terms.
(6) To select the Insurer to provide any Life Insurance Policy to
be purchased for any Participant hereunder.
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(7) To advise the Fiduciary with investment authority regarding the
short and long-term liquidity needs of the Plan in order that the Fiduciary
might direct its investment accordingly.
(8) To advise, counsel and assist any Participant regarding any
rights, benefits or elections available under the Plan.
(9) To instruct the Trustee as to the management, investment and
reinvestment of the Trust Fund unless the investment authority has been
delegated to the Trustee or an investment manager.
(b) The Plan Administrator shall also be responsible for preparing and
filing such annual disclosure reports and tax forms as may be required from
time to time by the Secretary of Labor, the Secretary of the Treasury or
other governmental authorities.
(c) Whenever it is determined by the Plan Administrator to be in the best
interest of the Plan and its Participants or Beneficiaries, the Plan
Administrator may request such variances, deferrals, extensions, or
exemptions or make such elections for the Plan as may be available under
the law.
(d) The Plan Administrator shall be responsible for procuring bonding for
all persons dealing with the Plan or its assets as may be required by law.
(e) In the event this Plan is required to file reports or pay premiums to
the Pension Benefit Guaranty Corporation, the Plan Administrator shall have
the duty to prepare and make such filings, to pay any premiums required,
whether for basic or contingent liability coverage, and shall be charged
with the responsibility of notifying all necessary parties of such events
and under such circumstances as may be required by law.
3.4.2 Disclosure Requirements. Every Participant covered under the Plan
and every Beneficiary receiving benefits under the Plan shall receive from the
Plan Administrator a summary plan description, and such other information as may
be required by law or by the terms of the Plan.
3.4.3 Information Generally Available. The Plan Administrator shall make
copies of this Plan and Trust, the summary plan description, latest annual
report, Life Insurance Policies, or other instruments under which the Plan was
established or is operated available for examination by any Participant or
Beneficiary in the principal office of the Plan Administrator and such other
locations as may be necessary to make such information reasonably accessible to
all interested
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parties. Subject to a reasonable charge to defray the cost of furnishing such
copies, the Plan Administrator shall, upon written request of any Participant or
Beneficiary, furnish a copy of any of the above documents to the respective
party.
3.4.4 Statement of Accrued Benefit. Upon written request to the Plan
Administrator once during any twelve (12) month period, a Participant or
Beneficiary shall be furnished with a written statement, based on the latest
available information, of his then vested accrued benefit and the earliest date
upon which the same will become fully vested and nonforfeitable. The statement
shall also include a notice to the Participant of any benefits which are
forfeitable if the Participant dies before a certain date.
3.4.5 Explanation of Rollover Treatment. The Plan Administrator shall, when
making a distribution eligible for rollover treatment, provide a written
explanation to the recipient of the provisions under which such distribution
will not be subject to tax if transferred to an eligible retirement plan within
sixty (60) days after the date on which the recipient received the distribution
and, if applicable, the provisions of law pertaining to the tax treatment of
lump sum distributions.
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ARTICLE V
TRUSTEE
3.5.1 Acceptance of Trust. The Trustee, by joining in the execution of the
Plan, agrees to act in accordance with the express terms and conditions hereof.
3.5.2 Trustee Capacity - Co-Trustees. The Trustee may be a bank, trust
company or other corporation possessing trust powers under applicable state or
federal law or one or more individuals or any combination thereof. When there
are two or more Trustees, they may allocate specific responsibilities,
obligations or duties among themselves by their written agreement. An executed
copy of such written agreement shall be delivered to and retained by the Plan
Administrator.
3.5.3 Resignation, Removal, and Successors. Any Trustee may resign at
any time by delivering to the Employer a written notice of resignation to take
effect at a date specified therein, which shall not be less than thirty (30)
days after the delivery thereof; the Employer may waive such notice. The Trustee
may be removed by the Employer with or without cause, by tendering to the
Trustee a written notice of removal to take effect at a date specified therein.
Upon such removal or resignation of a Trustee, the Employer shall either appoint
a successor Trustee who shall have the same powers and duties as those conferred
upon the resigning or discharged Trustee, or, if a group of individuals is
acting as Trustee, determine that a successor shall not be appointed and the
number of Trustees shall be reduced by one (1).
3.5.4 Consultations. The Trustee shall be entitled to advice of counsel,
which may be counsel for the Plan or the Employer, in any case in which the
Trustee shall deem such advice necessary. The Trustee shall not be liable for
any action taken or omitted in good faith reliance upon the advice of such
counsel. With the exception of those powers and duties specifically allocated to
the Trustee by the express terms of the Plan, it shall not be the responsibility
of the Trustee to interpret the terms of the Plan and the Trustee may request,
and is entitled to receive, guidance and written direction from the Plan
Administrator on any point requiring construction or interpretation of the Plan
documents.
3.5.5 Rights, Powers and Duties. The rights, powers and duties of the Trustee
shall be as follows:
(a) The Trustee shall be responsible for the safekeeping of the assets
of the Trust Fund in accordance with the provisions of the Plan and any
amendments hereto. The duties
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of the Trustee under the Plan shall be determined solely by the express
provisions hereof and no other further duties or responsibilities shall be
implied. Subject to the terms of this Plan, the Trustee shall be fully protected
and shall incur no liability in acting in reliance upon the written instructions
or directions of the Employer, the Plan Administrator, a duly designated
investment manager, or any other named Fiduciary.
(b) The Trustee shall have all powers necessary or convenient for the orderly
and efficient performance of its duties hereunder, including but not limited to
those specified in this Section. The Trustee shall have the power generally to
do all acts, whether or not expressly authorized, which the Trustee in the
exercise of its fiduciary responsibility may deem necessary or desirable for the
protection of the Trust Fund and the assets thereof.
(c) The Trustee shall have the power to collect and receive any and all
monies and other property due hereunder and to give full discharge and release
therefore; to settle, compromise or submit to arbitration any claims, debts or
damages due to or owing to or from the Trust Fund; to commence or defend suits
or legal proceedings wherever, in the Trustee's judgment, any interest of the
Trust Fund requires it; and to represent the Trust Fund in all suits or legal
proceedings in any court of law or equity or before any other body or tribunal.
(d) The Trustee shall cause any Life Insurance Policies or assets of the
Trust Fund to be registered in its name as Trustee and shall be authorized to
exercise any and all ownership rights regarding these assets, subject to the
terms of the Plan.
(e) The Trustee may temporarily hold cash balances and shall be entitled to
deposit any funds received in a bank account in the name of the Trust Fund in
any bank selected by the Trustee, including the banking department of a
corporate Trustee, if any, pending disposition of such funds in accordance with
the Plan. Any such deposit may be made with or without interest.
(f) The Trustee shall pay the premiums and other charges due and payable at
any time on any Life Insurance Policies as it may be directed by the Plan
Administrator, provided funds for such payments are then available in the Trust.
The Trustee shall be responsible only for such funds and Life Insurance Policies
as shall actually be received by it as Trustee hereunder, and shall have no
obligation to make payments other than from such funds and cash values of Life
Insurance Policies.
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(g) If the whole or any part of the Trust Fund shall become liable for the
payment of any estate, inheritance, income or other tax which the Trustee shall
be required to pay, the Trustee shall have full power and authority to pay such
tax out of any monies or other property in its hands for the account of the
person whose interest hereunder is so liable. Prior to making any payment, the
Trustee may require such releases or other documents from any lawful taxing
authority as it shall deem necessary. The Trustee shall not be liable for any
nonpayment of tax when it distributes an interest hereunder on instructions from
the Plan Administrator.
(h) The Trustee shall keep a full, accurate and detailed record of all
transactions of the Trust which the Employer and the Plan Administrator shall
have the right to examine at any time during the Trustee's regular business
hours. As of the close of each Plan Year, the Trustee shall furnish the Plan
Administrator with a statement of account setting forth all receipts,
disbursements and other transactions effected by the Trustee during the year.
The Plan Administrator shall promptly notify the Trustee in writing of his
approval or disapproval of the account. The Plan Administrator's failure to
disapprove the account within sixty (60) days after receipt shall be considered
an approval. Except as otherwise required by law, the approval by the Plan
Administrator shall be binding as to all matters embraced in any statement to
the same extent as if the account of the Trustee had been settled by judgment or
decree of a court of competent jurisdiction under which the Trustee, Employer
and all persons having or claiming any interest in the Trust Fund were parties;
provided, however, that the Trustee may have its account judicially settled if
it so desires.
(i) The Trustee is hereby authorized to execute all necessary receipts and
releases to any parties concerned; and shall be under a duty, upon being advised
by the Plan Administrator that the proceeds of any Life Insurance Policies are
payable, to give reasonable assistance to the Beneficiary designated therein in
collecting such sums as may appear to be due.
(j) If, at any time, as the result of the death of the Participant there
shall be a dispute as to the person to whom payment or delivery of monies or
property should be made by the Trustee, or regarding any action to be taken by
the Trustee, the Trustee may postpone such payment, delivery or action,
retaining the funds or property involved, until such dispute shall have been
resolved in a court of competent jurisdiction or the Trustee shall have been
indemnified to its satisfaction or until it has received written direction from
the Plan Administrator.
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(k) Anything in this instrument to the contrary notwithstanding, the Trustee
shall have no duty or responsibility with respect to the determination of
matters pertaining to the eligibility of any Employee to become or remain a
Participant hereunder, the amount of benefit to which any Participant or
Beneficiary shall be entitled hereunder, or the size and type of any Life
Insurance Policy to be purchased from any Insurer for any Participant hereunder;
all such responsibilities being vested in the Plan Administrator.
3.5.6 Trustee Indemnification. The Employer shall indemnify and hold
harmless the Trustee for and from the assertion or occurrence of any liability
to a Participant or Beneficiary for any action taken or omitted by the Trustee
pursuant to any written direction to the Trustee from the Employer or the Plan
Administrator. Such indemnification obligation of the Employer shall not be
applicable to the extent that any such liability is covered by insurance.
3.5.7 Changes in Trustee Authority. If a successor Trustee is
appointed, neither an Insurer nor any other person who has previously had
dealings with the Trustee shall be chargeable with knowledge of such appointment
or such change until furnished with notice thereof. Until such notice, the
Insurer and any other such party shall be fully protected in relying on any
action taken or signature presented which would have been proper in accordance
with that information previously received.
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ARTICLE VI
TRUST ASSETS
3.6.1 Trustee Exclusive Owner. All assets held by the Trustee, whether in the
Trust Fund or Segregated Funds, shall be owned exclusively by the Trustee and no
Participant or Beneficiary shall have any individual ownership thereof.
Participants and their Beneficiaries shall share in the assets of the Trust, its
net earnings, profits and losses, only as provided in this Plan.
3.6.2 Investments. The Trustee shall invest and reinvest the Trust Fund
without distinction between income or principal in one or more of the following
ways as the Trustee shall from time to time determine:
(a) The Trustee may invest the Trust Fund or any portion thereof in
obligations issued or guaranteed by the United States of America or of any
instrumentalities thereof, or in other bonds, notes, debentures, mortgages,
preferred or common stocks, options to buy or sell stocks or other securities,
mutual fund shares, limited partnership interests, commodities, or in such
other property, real or personal, as the Trustee shall determine.
(b) The Trustee may cause the Trust Fund or any portion thereof to be
invested in a common trust fund established and maintained by a national bank
for the collective investment of fiduciary funds, providing such common trust
fund is a qualified trust under the applicable section of the Code, or
corresponding provisions of future federal internal revenue laws and is exempt
from income tax under the applicable section of the Code. In the event any
assets of the Trust Fund are invested in such a common trust fund, the
Declaration of Trust creating such common trust fund, as it may be amended
from time to time, shall be incorporated into this Plan by reference and made
a part hereof.
(c) The Trustee may deposit any portion of the Trust Fund in savings
accounts in federally insured banks or savings and loan associations or invest
in certificates of deposit issued by any such bank or savings and loan
association. The Trustee may, without liability for interest, retain any
portion of the Trust Fund in cash balances pending investment thereof or
payment of expenses.
(d) The Trustee may buy and sell put and call options, covered or
uncovered, engage in spreads, straddles, ratio writing and other forms of
options trading, including sales of options against convertible bonds, and
sales of Standard & Poor futures contracts, and trade in and maintain a
brokerage account on a cash or margin basis.
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(e) The Trustee may invest any portion or all of the assets of the Trust Fund
which are attributable to the vested and nonforfeitable interest in the Accounts
of a Participant in the purchase of group or individual Life Insurance Policies
issued on the life of and for the benefit of the Participant with the consent of
the Participant, subject to the following conditions:
(i) The aggregate premiums paid for ordinary whole Life Insurance
Policies with both nondecreasing death benefits and nonincreasing premiums
on the life of any Participant shall not at any time exceed forty-nine
percent (49%) of the aggregate amount of Employer contributions which have
been allocated to the Accounts of such Participant.
(ii) The aggregate Premiums paid for Life Insurance Policies on the
life of any Participant which are either term, universal or any other
contracts which are not ordinary whole life Policies shall not at any time
exceed twenty-five percent (25%) of the aggregate amount of Employer
contributions which have been allocated to the Accounts of such
Participant.
(iii) The sum of one-half of the aggregate premiums for ordinary whole
Life Insurance Policies and all premiums for other Life Insurance Policies
shall not at any time exceed twenty-five percent (25%) of the aggregate
amount of Employer contributions which have been allocated to the Accounts
of such Participant.
(iv) If the Plan permits distributions to a Participant prior to his
termination of employment in accordance with Section 2.5.5 and the Plan
does not take into account contributions to provide Social Security
Benefits in the allocation of Employer contributions, the amount which may
be distributed to the Participant may be applied to the parties of Life
Insurance Policies.
(f) The Trustee may invest the Trust Fund or any portion thereof to acquire
or hold Qualifying Employer Securities or Real Property, provided that the
portion so invested shall not exceed the amount allowed as an investment under
the Act.
3.6.3 Administration of Trust Assets. Subject to the limitations herein
expressly set forth, the Trustee shall have the following powers and authority
in connection with the administration of the assets of the Trust:
(a) To hold and administer all contributions made by the
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Employer to the Trust Fund and all income or other property derived therefrom as
a single Trust Fund, except as otherwise provided in the Plan.
(b) To manage, control, sell, convey, exchange, petition, divide, subdivide,
improve, repair, grant options, sell upon deferred payments, lease without limit
as determined for any purpose, compromise, arbitrate or otherwise settle claims
in favor of or against the Trust Fund, institute, compromise and defend actions
and proceedings, and to take any other action necessary or desirable in
connection with the administration of the Trust Fund.
(c) To vote any stock, bonds, or other securities of any corporation or other
issuer; otherwise consent to or request any action on the part of any such
corporation or other issuer; to give general or special proxies or powers of
attorney, with or without power of substitution; to participate in any
reorganization, recapitalization, consolidation, merger or similar transaction
with respect to such securities; to deposit such stocks or other securities in
any voting trusts, or with any protective or like committee, or with the
trustee, or with the depositories designated thereby; to exercise any
subscription rights and conversion privileges or other options and to make any
payments incidental thereto; and generally to do all such acts, execute all such
instruments, take all such proceedings and exercise all such rights, powers and
privileges with respect to the stock or other securities or property
constituting the Trust Fund as if the Trustee were the absolute owner thereof.
(d) To apply for and procure, at the election of any Participant, Life
Insurance Policies on the life of the Participant; to exercise whatever rights
and privileges may be granted to the Trustee under such Policies, and to cash
in, receive and collect such Policies or the proceeds therefrom as and when
entitled to do so under the provisions thereof;
(e) To make, execute, acknowledge and deliver any and all documents of
transfer and conveyance and any and all other instruments that may be necessary
or appropriate to carry out the powers herein granted;
(f) To register any investment held in the Trust in the Trustee's own name or
in the name of a nominee and to hold any investment in bearer form, but the
books and records of the Trustee shall at all times show that all such
investments are part of the Trust;
(g) To borrow money for the purposes of the Plan in such
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amounts and upon such terms and conditions as the Trustee deems appropriate;
(h) To commingle the assets of the Trust Fund with the assets of other
similar trusts which are exempt from income tax, whether sponsored by the
Employer, an affiliate of the Employer or an unrelated employer, provided that
the books and records of the Trustee shall at all times show the portion of the
commingled assets which are part of the Trust; and
(i) To do all acts whether or not expressly authorized which the Trustee may
deem necessary or proper for the protection of the property held hereunder.
3.6.4 Segregated Funds. Unless otherwise determined by the Trustee to be
prudent, the Trustee shall invest and reinvest each Segregated Fund without
distinction between income or principal in one or more appropriately identified
interest-bearing accounts or certificates of deposit in the name of the Trustee
and subject solely to the dominion of the Trustee in a banking institution
(which may or may not be the Trustee, if the Trustee is a banking institution)
or savings and loan association. Any such account or certificate shall bear
interest at a rate not less than the rate of interest currently being paid upon
regular savings accounts by that banking corporation principally situated in the
community in which the Employer has its principal business location, which has
capital, surplus and undivided profits exceeding those of any other bank so
situated. Such accounts shall be held for the benefit of the Participant for
whom such Segregated Fund is established in accordance with the terms of the
Plan and the Segregated Account of the Participant shall be credited with any
interest earned in connection with such accounts. If the Trustee determines that
an alternative investment is appropriate, the Trustee may invest the Segregated
Fund in any manner permitted with respect to the Trust Fund and such Segregated
Fund shall be credited with the net income or loss or net appreciation or
depreciation in value of such investments. No Segregated Fund shall share in any
Employer contributions or forfeitures, any net income or loss from, or net
appreciation or depreciation in value of, any investments of the Trust Fund, or
any allocation for which provision is made in this Plan which is not
specifically attributable to the Segregated Fund.
3.6.5 Investment Control Option. Participants may not control their
investments.
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ARTICLE VII
LOANS
3.7.1 Authorization. Loans to Participants or Beneficiaries are not permitted
under this plan.
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ARTICLE VIII
BENEFICIARIES
3.8.1 Designation of Beneficiaries. Each Participant shall have the right to
designate a Beneficiary or Beneficiaries and contingent or successive
Beneficiaries to receive any benefits provided by this Plan which become payable
upon the Participant's death. The Beneficiaries may be changed at any time or
times by the filing of a new designation with the Plan Administrator, and the
most recent designation shall govern. Notwithstanding the foregoing and subject
to the provisions of Section 2.5.2, the designated Beneficiary shall be the
surviving spouse of the Participant, unless such surviving spouse consents in
writing to an alternate designation and the terms of such consent acknowledge
the effect of such alternate designation and the consent is witnessed by a
representative of the Plan or by a notary public. A spouse may not revoke the
consent without the approval of the Participant. The designation of a
Beneficiary other than the spouse of the Participant or a form of benefits with
the consent of such spouse may not be changed without the consent of such spouse
and any consent must acknowledge the specific non--spouse Beneficiary, including
any class of Beneficiaries or any contingent Beneficiaries.
3.8.2 Absence or Death of Beneficiaries. Except with respect to the process
of life insurance payable upon the death of the Participant, if a Participant
dies without having a beneficiary designation then in force, or if all of the
Beneficiaries designated by a Participant predecease him, his Beneficiary shall
be his surviving spouse, or if none, his surviving children, equally, or if
none, such other heirs, or the executor or administrator of his estate, as the
Plan Administrator shall select.
If a Participant dies survived by Beneficiaries designated by him and if all
such surviving Beneficiaries thereafter dies before complete distribution of
such deceased Participant's interest, the estate of the last of such designated
Beneficiaries to survive shall be deemed to be the Beneficiary of the
undistributed portion of such interest.
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ARTICLE IX
CLAIMS
3.9.1 Claim Procedure. Any Participant or Beneficiary who is entitled to a
payment of a benefit for which provision is made in this Plan shall file a
written claim with the Plan Administrator on such forms as shall be furnished to
him by the Plan Administrator and shall furnish such evidence of entitlement to
benefits as the Plan Administrator may reasonably require. The Plan
Administrator shall notify the Participant or Beneficiary in writing as to the
amount of benefit to which he is entitled, the duration of such benefit, the
time the benefit is to commence and other pertinent information concerning his
benefit. If a claim for benefit is denied by the Plan Administrator, in whole or
in part, the Plan Administrator shall provide adequate notice in writing to the
Participant or Beneficiary whose claim for benefit has been denied within ninety
(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 indicating the special circumstances and
the date by which a final decision is expected to be rendered shall be furnished
to the Participant or Beneficiary. In no event shall the period of extension
exceed one hundred eighty (180) days after receipt of the claim. The notice of
denial of the claim shall set forth (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) a statement that any appeal of the denial must
be made by giving to the Plan Administrator, within sixty (60) days after
receipt of the notice of the denial, written notice of such appeal, such notice
to include a full description of the pertinent issues and basis of the claim.
The Participant or Beneficiary (or his duly authorized representative) may
review pertinent documents and submit issues and comments in writing to the Plan
Administrator. If the Participant or Beneficiary fails to appeal such action to
the Plan Administrator in writing within the prescribed period of time, the Plan
Administrator's adverse determination shall be final, binding and conclusive.
3.9.2 Appeal. If the Plan Administrator receives from a Participant or a
Beneficiary, within the prescribed period of time, a notice of an appeal of the
denial of a claim for benefit, such notice and all relevant materials shall
immediately be submitted to the Employer. The Employer may hold a hearing or
otherwise ascertain such facts as it deems necessary and shall render a decision
which shall be binding upon both parties.
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The decision of the Employer shall be made within sixty (60) days after the
receipt by the Plan Administrator of the notice of appeal, unless special
circumstances require an extension of time for processing, in which case a
decision of the Employer shall be rendered as soon as possible but not later
than one hundred twenty (120) days after receipt of the request for review. If
such an extension of time is required, written notice of the extension shall be
furnished to the claimant prior to the commencement of the extension. The
decision of the Employer shall be in writing, shall include specific reasons for
the decision, written in a manner calculated to be understood by the claimant,
as well as specific references to the pertinent Plan provisions on which the
decision is based and shall be promptly furnished to the claimant.
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ARTICLE X
AMENDMENT AND TERMINATION
3.10.1 Right to Amend. The Employer may at any time or times amend the Plan
and Trust, in whole or in part. The Employer specifically reserves the right to
amend the Plan retroactively.
3.10.2 Manner of Amending. Each amendment of this Plan shall be made by
delivery to the Trustee of a copy of the resolution of the Employer which sets
forth such amendment.
3.10.3 Limitations On Amendments. No amendment shall be made to this Plan
which shall:
(a) Directly or indirectly operate to give the Employer any interest
whatsoever in the assets of the Trust or to deprive any Participant or
Beneficiary of his vested and nonforfeitable interest in the assets of the Trust
as then constituted, or cause any part of the income or corpus of the Trust to
be used for, or diverted to purposes other than the exclusive benefit of
Employees or their Beneficiaries;
(b) Increase the duties or liabilities of the Trustee without the Trustee's
prior written consent;
(c) Change the vesting schedule under the Plan if the nonforfeitable
percentage of the accrued benefit derived from Employer contributions
(determined as of the later of the date such amendment is adopted or the date
such amendment becomes effective) of any Participant is less than such
nonforfeitable percentage computed without regard to such amendment; or
(d) Reduce the accrued benefit of a Participant within the meaning of Section
411(d) (6) of the Code, except to the extent permitted under Section 412 (c) (8)
of the Code. An 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.
If a Plan amendment changes the vesting schedule or the Plan is amended in any
way that directly or indirectly affects the computation of the Participant's
nonforfeitable percentage, each Participant who has completed three (3) or, in
the case of Participants who do not have at least one (1) Hour of Service in any
Plan Year beginning after 1988, five (5) or more Years of Service may elect
within a reasonable period after the adoption of such amendment to have his
nonforfeitable percentage computed without regard to such amendment or change.
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The period during which the amendment may be made shall commence with the date
the amendment is adopted or deemed to be made and shall end on the latest of
sixty (60) days after:
(i) the amendment is adopted;
(ii) the amendment becomes effective; or
(iii) the Participant is issued written notice of the amendment by the
Employer or Plan Administrator.
3.10.4 Voluntary Termination. The Employer may terminate the Plan at any time
by delivering to the Trustee an instrument in writing which designates such
termination. Following termination of the Plan, the Trust will continue until
the Distributable Benefit of each Participant has been distributed.
3.10.5 Involuntary Termination. The Plan shall terminate if (a) the Employer
is dissolved or adjudicated bankrupt or insolvent in appropriate proceedings, or
if a general assignment is made by the Employer for the benefit of creditors, or
(b) the Employer loses its identity by consolidation or merger into one or more
corporations or organizations, unless within ninety (90) days after such
consolidation or merger, such corporations or organizations elect to continue
the Plan.
3.10.6 Withdrawal By Employer. The Employer may withdraw from participation
under the Plan without terminating the Trust upon making a transfer of the Trust
assets to another Plan which shall be deemed to constitute an amendment in its
entirety of the Trust.
3.10.7 Powers Pending Final Distribution. Until final distribution of the
assets of the Trust, the Plan Administrator and Trustee shall continue to have
all the powers provided under this Plan as are necessary for the orderly
administration, liquidation and distribution of the assets of the Trust.
3.10.8 Delegation. Each Affiliate Employer expressly delegates authority to
the Employer the right to amend any part of the Plan on its behalf. The Employer
shall submit a copy of the amendment to each Affiliate Employer who has adopted
the Plan. The Affiliate Employer may revoke the authority of the Employer to
amend the Plan on its behalf by written notice to the Employer of such
revocation.
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ARTICLE XI
PORTABILITY
3.11.1 Continuance by Successor. In the event of the dissolution,
consolidation or merger of the Employer, or the sale by the Employer of its
assets, the resulting successor person or persons, firm or corporations may
continue this Plan by (a) adopting the Plan by appropriate resolution; (b)
appointing a new Trustee as though the Trustee (including all members of a group
of individuals acting as Trustee) had resigned; and (c) executing a proper
agreement with the new Trustee. In such event, each Participant in this Plan
shall have an interest in the Plan after the dissolution, consolidation, merger,
or sale of assets, at least equal to the interest which he had in the Plan
immediately before the dissolution, consolidation, merger or sale of assets. Any
Participants who do not accept a position with such successor within a
reasonable time shall be deemed to be terminated. If, within ninety (90) days
from the effective date of such dissolution, consolidation, merger, or sale of
assets, such successor does not adopt this Plan, as provided herein, the Plan
shall automatically be terminated and deemed to be an involuntary termination.
3.11.2 Merger With Other Plan. In the event of the merger or consolidation
with, or transfer of assets or liabilities to, any other deferred compensation
plan and trust, each Participant shall have an interest in such other plan which
is equal to or greater than the interest which he had in this Plan immediately
before such merger, consolidation or transfer, and if such other plan thereafter
terminates, each Participant shall be entitled to a Distributable Benefit which
is equal to or greater than the Distributable Benefit to which he would have
been entitled immediately before such merger, consolidation or transfer if this
Plan had then been terminated.
3.11.3 Transfer From Other Plans. The Employer may cause all or any of the
assets held in connection with any other plan or trust which is maintained by
the Employer for the benefit of its employees and satisfies the applicable
requirements of the Code relating to qualified plans and trusts to be
transferred to the Trustee, whether such transfer is made pursuant to a merger
or consolidation of this Plan with such other plan or trust or for any other
allowable purpose.
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In addition, the Employer, may permit rollover to the Trustee of assets held for
the benefit of an Employee in a conduit Individual Retirement Account, a
terminated plan of the Employer, or any other plan or trust which is maintained
by some other employer for the benefit of its employees and satisfies the
applicable requirements of the Code relating to qualified plans and trusts
provided the employee has satisfied the conditions for participation in the
Plan. Any such assets so transferred to the Trustee shall be accompanied by
written instructions from the employer, or the trustee, custodian or individual
holding such assets, setting forth the name of each Employee for whose benefit
such assets have been transferred and showing separately the respective
contributions by the employer and by the Employee and the current value of the
assets attributable thereto. Upon receipt by the Trustee of such assets, the
Trustee shall place such assets in a Segregated Fund for the Participant and the
Employee shall be deemed to be one hundred percent (100%) vested and have a
nonforfeitable interest in any such assets. Notwithstanding any provisions
herein to the contrary, unless the Plan provides a life annuity distribution
option or the Participant and his spouse have signed a written waiver of their
rights to the annuity options in a form which satisfies the waiver requirements
of Section 417 of the Code, the Plan shall not be a direct or indirect
transferee of a defined benefit pension plan, money purchase pension plan,
target benefit pension plan, stock bonus or profit sharing plan which is subject
to the survivor annuity requirements of Section 401(a)(11) and Section 417 of
the Code.
3.11.4 Transfer to Other Plans. The Trustee, upon written direction by the
Employer, shall transfer some or all of the assets held under the Trust to
another plan or trust of the Employer meeting the requirements of the Code
relating to qualified plans and trusts, whether such transfer is made pursuant
to a merger or consolidation of this Plan with such other plan or trust or for
any other allowable purpose. In addition, upon the termination of employment of
any Participant and receipt by the Plan Administrator of a request in writing,
the Participant may request that any distribution from the Trust to which he is
entitled shall be transferred to an Individual Retirement Account, an Individual
Retirement Annuity, or any other plan or trust which is maintained by some other
employer for the benefit of its employees and satisfies the applicable
requirements of the Code relating to qualified plans and trusts. Upon receipt of
any such written request, the Plan Administrator shall cause the Trustee to
transfer the assets so directed and, as appropriate, shall direct the Insurer to
transfer to the new trustee any applicable insurance policies issued by it.
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ARTICLE XII
MISCELLANEOUS
3.12.1 No Reversion to Employer. Except as specifically provided in the Plan,
no part of the corpus or income of the Trust shall revert to the Employer or be
used for, or diverted to purposes other than for the exclusive benefit of
Participants and their Beneficiaries.
3.12.2 Employer Actions. Any action by the Employer pursuant to the
provisions of the Plan shall be evidenced by appropriate resolution or by
written instrument executed by any person authorized by the Employer to take
such action.
3.12.3 Execution of Receipts and Releases. Any payment to any person eligible
to receive benefits under this Plan, in accordance with the provisions of the
Plan, shall, to the extent thereof, be in full satisfaction of all claims
hereunder. The Plan Administrator may require such person, as a condition
precedent to such payment, to execute a receipt and release therefore in such
form as he shall determine.
3.12.4 Rights of Participants Limited. Neither the creation of this Plan and
Trust nor anything contained in the Plan shall be construed as giving any
Participant, Beneficiary or Employee any equity or other interest in the assets,
business or affairs of the Employer, or the right to complain about any action
taken by or about any policy adopted or pursued by, the Employer, or as giving
any Employee the right to be retained in the service of the Employer; and all
Employees shall remain subject to discharge to the same extent as if the Plan
had never been executed. Prior to the time that distributions are made in
conformity with the provisions of the Plan, neither the Participants, nor their
spouses, Beneficiaries, heirs-at-law, or legal representatives shall receive
or be entitled to receive cash or any other thing of current exchangeable value,
from either the Employer or the Trustee as a result of the Plan or the Trust.
3.12.5 Persons Dealing With Trustee Protected. No person dealing with the
Trustee shall be required or entitled to see to the application of any money
paid or property delivered to the Trustee, or determine whether or not the
Trustee is acting pursuant to the authorities granted to the Trustee hereunder
or to authorizations or directions herein required. The certificate of the
Trustee that the Trustee is acting in accordance with the Plan shall protect any
person relying thereon.
3.12.6 Protection of Insurer. An Insurer shall not be responsible for the
validity of the Plan or Trust and shall have no responsibility for action taken
or not taken by the Trustee, for determining the propriety of accepting premium
payments or
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other contributions, for making payments in accordance with the direction of the
Trustee, or for the application of such payments. The Insurer shall be fully
protected in dealing with any representative of the Employer or any one of a
group of individuals acting as Trustee. Until written notice of a change of
Trustee has been received by an Insurer at its home office, the Insurer shall be
fully protected in dealing with any party acting as Trustee according to the
latest information received by the Insurer at its home office.
3.12.7 No Responsibility for Act of Insurer. Neither the Employer, the Plan
Administrator nor the Trustee shall be responsible for any of the following, nor
shall they be liable for instituting action in connection with:
(a) The validity of policies or policy provisions;
(b) Failure or refusal by the Insurer to provide benefits under a policy;
(C) An act by a person which may render a policy invalid or unenforceable;
or
(d) Inability to perform or delay in performing an act, which inability or
delay is occasioned by a provision of a policy or a restriction imposed by
the Insurer.
3.12.8 Inalienability. The right of any Participant or his Beneficiary in any
distribution hereunder or to any separate Account shall not be subject to
alienation, assignment or transfer, voluntarily or involuntarily, by operation
of law or otherwise, except as may be expressly permitted herein. No Participant
shall assign, transfer, or dispose of such right nor shall any such right be
subjected to attachment, execution, garnishment, sequestration, or other legal,
equitable, or other process. The preceding shall also apply to the creation,
assignment, or recognition of a right to any benefit payable with respect to a
Participant pursuant to a domestic relations order, unless such order is
determined to be a qualified domestic relations order, as defined in Section
414(p) of the Code, or any domestic relations order entered before January 1,
1985.
In the event a Participant's benefits are attached by order of any court, the
Plan Administrator may bring an action for a declaratory judgment in a court of
competent jurisdiction to determine the proper recipient of the benefits to be
paid by the Plan. During the pendency of the action, the Plan Administrator
shall cause any benefits payable to be paid to the court for distribution by the
court as it considers appropriate.
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3.12.9 Domestic Relations Orders. The Plan Administrator shall adhere to the
terms of any judgment, decree or order (including approval of a property
settlement agreement) which relates to the provision of child support, alimony
payments, or marital property rights to a spouse, former spouse, child or other
dependent of a Participant and is made pursuant to a state domestic relations
law (including a community property law) and which creates or recognizes the
existence of an alternate payee's right to, or assigns to an alternate payee the
right to, receive all or a portion of the benefits payable with respect to a
Participant.
Any such domestic relations order must clearly specify the name and last known
mailing address of the Participant and the name and mailing address of each
alternate payee covered by the order, the amount or percentage of the
Participant's benefit to be paid by the Plan to each such alternate payee, or
the manner in which such amount or percentage is to be determined, the number of
payments or period to which such order applies, and each plan to which such
order applies.
Any such domestic relations order shall not require the Plan to provide any
type or form of benefit, or any option not otherwise provided under the Plan, to
provide increased benefits (determined on the basis of actuarial value) or the
payment of benefits to an alternate payee which are required to be paid to
another alternate payee under another order previously determined to be a
qualified domestic relations order.
Notwithstanding the foregoing sentence, a domestic relations order may require
the payment of benefits to an alternate payee before the Participant has
separated from service on or after the date on which the Participant attains or
would have attained the earliest retirement age under the Plan as if the
Participant had retired on the date on which such payment is to begin under such
order (but taking into account only the present value of the benefits actually
accrued and not taking into account the present value of any Employer subsidy
for early retirement) and in any form in which such benefits may be paid under
the Plan to the Participant (other than the form of a joint and survivor annuity
with respect to the alternate payee and his or her subsequent spouse). The
interest rate assumption used in determining the present value shall be five
(5%) percent. For these purposes, the earliest retirement age under the Plan
means the earlier of: (a) the date on which the Participant is entitled to a
distribution under the Plan, or (b) the later of the date the Participant
attains age 50, or the earliest date on which the Participant could begin
receiving benefits under the Plan if the Participant separated from service.
Distributions may be made to an alternate payee even though the Participant may
not receive a distribution because he
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continues to be employed by the Employer.
To the extent provided in the qualified domestic relations order, the former
spouse of a Participant shall be treated as a surviving spouse of such
Participant for purposes of Sections 401(a) (11) and 417 of the Code (and any
spouse of the Participant shall not be treated as a spouse of the Participant
for such purposes) and if married for at least one (1) year, the surviving
former spouse shall be treated as meeting the requirements of Section 417(d) of
the Code.
The Plan Administrator shall promptly notify the Participant and each
alternate payee of the receipt of a domestic relations order by the Plan and the
Plan's procedures for determining the qualified status of domestic relations
orders. Within a reasonable period after receipt of a domestic relations order,
the Plan Administrator shall determine whether such order is a qualified
domestic relations order and shall notify the Participant and each alternate
payee of such determination. If the Participant or any affected alternate payee
disagrees with the determinations of the Plan Administrator, the disagreeing
party shall be treated as a claimant and the claims procedure of the Plan shall
be followed. The Plan Administrator may bring an action for a declaratory
judgment in a court of competent jurisdiction to determine the proper recipient
of the benefits to be paid by the Plan.
During any period in which the issue of whether a domestic relations order is
a qualified domestic relations order is being determined (by the Plan
Administrator, by a court of competent jurisdiction or otherwise), the Plan
Administrator shall separately account for the amounts which would have been
payable to the alternate payee during such period if the order had been
determined to be a qualified domestic relations order. If, within the eighteen
(18) month period beginning on the date on which the first payment would be
required to be made under the domestic relations order, the order (or
modification thereof) is determined to be a qualified domestic relations order,
the Plan Administrator shall pay the segregated amounts, including any interest
thereon, to the person or persons entitled thereto. If within such eighteen (18)
month period it is determined that the order is not a qualified domestic
relations order or the issue as to whether such order is a qualified domestic
relations order is not resolved, then the Plan Administrator shall pay the
segregated amounts, including any interest thereon, to the person or persons who
would have been entitled to such amounts if there had been no order. Any
determination that an order is a qualified domestic relations order which is
made after the close of the eighteen (18) month period shall be applied
prospectively only.
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3.12.10 Authorization to Withhold Taxes. The Trustee is authorized in
accordance with applicable law to withhold from distribution to any payee such
sums as may be necessary to cover federal and state taxes which may be due with
respect to such distributions.
3.12.11 Missing Persons. If the Trustee mails by registered or certified mail,
postage prepaid, to the last known address of a Participant or Beneficiary, a
notification that the Participant or Beneficiary is entitled to a distribution
and if (a) the notification is returned by the post office because the addressee
cannot be located at such address and if neither the Employer, the Plan
Administrator nor the Trustee shall have any knowledge of the whereabouts of
such Participant or Beneficiary within three (3) years from the date such
notification was mailed, or (b) within three (3) years after such notification
was mailed to such Participant or Beneficiary, he does not respond thereto by
informing the Trustee of his whereabouts, the ultimate disposition of the then
undistributed balance of the Distributable Benefit of such Participant or
Beneficiary shall be determined in accordance with the then applicable Federal
laws, rules and regulations. If any portion of the Distributable Benefit is
forfeited because the Participant or Beneficiary cannot be found, such portion
shall be reinstated if a claim is made by the Participant or Beneficiary.
3.12.12 Notices. Any notice or direction to be given in accordance with the
Plan shall be deemed to have been effectively given if hand delivered to the
recipient or sent by certified mail, return receipt requested, to the recipient
at the recipient's last known address. At any time that a group of individuals
is acting as Trustee, notice to the Trustee may be given by giving notice to any
one or more of such individuals.
3.12.13 Governing Law. The provisions of this Plan shall be construed,
administered and enforced in accordance with the provisions of the Act and, to
the extent applicable, the laws of the state in which the Employer has its
principal place of business. All contributions to the Trust shall be deemed to
take place in such state.
3.12.14 Severability of Provisions. In the event that any provision of this
Plan shall be held to be illegal, invalid or unenforceable for any reason, said
illegality, invalidity or unenforceability shall not affect the remaining
provisions, but shall be fully severable and the Plan shall be construed and
enforced as if said illegal, invalid or unenforceable provisions had never been
inserted herein.
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3.12.15 Gender and Number. Whenever appropriate, words used in the singular
shall include the plural, and the masculine gender shall include the feminine
gender.
3.12.16 Binding Effect. The Plan, and all actions and decisions hereunder,
shall be binding upon the heirs, executors, administrators, successors and
assigns of any and all parties hereto and Participants, present and future.
3.12.17 Qualification Under Internal Revenue Laws. The Employer intends that
the Trust qualify under the applicable provisions of the Code. Until advised to
the contrary, the Trustee may assume that the Trust is so qualified and is
entitled to tax exemption under the Code.
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ARTICLE XIII
APPENDIX
MODEL LANGUAGE
3.13.1 This Article applies to distributions made on or after January 1,
1993. Notwithstanding any provision of the plan to the contrary that would
otherwise limit a distributee's election under this Article, a distributee may
elect, at the time and in the manner prescribes by the plan administrator, to
have any portion of an eligible rollover distribution paid directly to an
eligible retirement plan specified by the distributee in a direct rollover.
3.13.2 Definitions
(a) Eligible rollover distribution: An eligible rollover distribution is any
distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not include;
any distribution that is one of a series of substantially equal periodic
payments (not less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint life expectancies)
of the distributee and the distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent such
distribution is required under Section 401(a)(9) of the Code; and the portion
of any distribution that is not includable in gross income (determined without
regard to the exclusion of net unrealized appreciation with respect to the
employer securities).
(b) Eligible retirement plan: An eligible retirement plan is 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.
(c) Distributee: A distributee includes an employee or former employee. In
addition, the employee's or former employee's surviving spouse and the
employee's or former employee's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in Section 414(p)
of the Code, are distributees with regard to the interest of the spouse or
former spouse.
(d) Direct Rollover: A direct rollover is a payment by the plan to the
eligible retirement plan specified by the distributee.
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ARTICLE XIV
EXECUTION OF AGREEMENT
3.14 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be considered an original, and no other
counterpart need be produced.
3.14.2 Acceptance by Trustee. The Trustee, by joining in the execution of
this Agreement, hereby signifies the Trustee's acceptance thereof.
3.14.3 Execution. To record the adoption of this Plan the Employer and each
Affiliate Employer, if any, has caused this Agreement to be executed by its duly
qualified officers and the Trustee has executed this Agreement, as of the day
and year first written above.
**********
Name of Employer and EIN:
AZTEC MANUFACTURING COMPANY - 75-0948250
By:/s/
------------------------------------
DANA PERRY, VICE PRESIDENT FINANCE
Name of Affiliate Employer and EIN:
AZTEC INDUSTRIES, INC. -- 75--1318815
By:/s/
------------------------------------
DANA PERRY
Name of Affiliate Employer and EIN:
AZTEC INDUSTRIES, INC. -- MOSS POINT -- 75-2107319
By:/s/
------------------------------------
DANA PERRY
Name of Affiliate Employer and EIN:
AUTOMATED PROCESSING, INC. - 64-0594499
By:/s/
------------------------------------
DANA PERRY
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Page 2
Execution of Agreement
Aztec Manufacturing, Inc.
Name of Affiliate Employer and EIN:
THE CALVERT CO., INC. - 64-0792921
By: /s/
------------------------------------
DANA PERRY
Name of Affiliate Employer and EIN:
AZTEC GROUP COMPANY - 75-2403898
By: /s/
------------------------------------
DANA PERRY
Name of Affiliate Employer and EIN:
ARBOR--CROWLEY, INC. - 75-0337454
By: /s/
------------------------------------
DANA PERRY
Name of Affiliate Employer and EIN:
AZTEC MANUFACTURING PARTNERSHIP, LTD. - 75-2403896
By: /s/
------------------------------------
DANA PERRY
Name of Affiliate Employer and EIN:
AZTEC MANUFACTURING WASKOM PARTNERSHIP, LTD. - 75-2403909
By: /s/
------------------------------------
DANA PERRY
Name of Affiliate Employer and EIN:
RIG-A-LITE PARTNERSHIP, LTD. - 75-0353821
By: /s/
------------------------------------
DANA PERRY
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Page 3
Execution of Agreement
Aztec Manufacturing, Inc.
Name of Affiliate Employer and EIN:
AZTEC HOLDINGS, INC. - 51-0337457
By:/s/
------------------------------------
DANA PERRY
Name of Affiliate Employer and EIN:
ATKINSON INDUSTRIES, INC. - 48-0126010
By:/s/
------------------------------------
DANA PERRY
Name of Affiliate Employer and EIN:
ARIZONA GALVANIZING, INC. -
By:/s/
------------------------------------
DANA PERRY
Name of Trustee:
OVERTON BANK AND TRUST, NATIONAL ASSOCIATION
By:/s/
------------------------------------
Senior Vice President
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[SEAL]
MODEL SECTION 401(a)(17) AMENDMENT TO
AZTEC MANUFACTURING COMPANY
EMPLOYEE BENEFIT PLAN & TRUST
WHEREAS, Aztec Manufacturing Company (the "Employer") currently maintains Aztec
Manufacturing Company Employee Benefit Plan & Trust (the "Plan") and,
WHEREAS, the Omnibus Budget Reconciliation Act of 1993 amended section
401(a)(17) of the Internal Revenue code to limit compensation taken into account
under a plan in any year to $150,000, as adjusted for increases in the cost of
living; and,
WHEREAS, the Internal Revenue Service issued Revenue Procedure 94-13 providing a
simplified method to amend plans using Model Section 401(a)(17) Amendment, as
set forth below.
THEREFORE, the Plan is hereby amended to incorporate the Model Section
401(a)(17) Amendment as follows:
In addition to other applicable limitations set forth in the plan, and
notwithstanding any other provision of the plan to contrary, for plan years
beginning on or after January 1, 1994, the annual compensation of each employee
taken into account under the plan shall not exceed the OBRA `93 annual
compensation limit. The OBRA. `93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with section 401(a)(17)(B) of the Internal Revenue Code. The cost-of-living
adjustment in effect for a calendar year applies to any period, not exceeding 12
months, over which compensation is determined (determination period) beginning
in such calendar year. If a determination period consist of fewer than 12
months, the OBRA `93 annual compensation limit will be multiplied by a fraction,
the numerator of which is the number of months in the determination period, and
the denominator of which is 12.
For plan years beginning on or after January 1, 1994, any reference in this plan
to the limitation under section 401(a)(17) of the Code shall mean the OBRA `93
annual compensation limit set forth in the provision.
If compensation for any prior determination period is taken into account in
determining an employee's benefits accruing in the current plan year, the
compensation for that prior determination period is subject to the OBRA `93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first plan year beginning on or after January 1, 1994, the OBRA `93 annual
compensation limit is $150,000.
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NOTICE 93-26/REVENUE PROCEDURE 93-47 AMENDMENT TO
AZTEC MANUFACTURING COMPANY
EMPLOYEE BENEFIT PLAN & TRUST
WHEREAS, Aztec Manufacturing Company (the "Employer") currently maintains Aztec
Manufacturing Company Employee Benefit Plan & Trust (the "Plan") and,
WHEREAS, the Unemployment Compensation Amendments of 1992 added Section 401(a)
(31) to the Internal Revenue code to require a Plan to permit direct rollover of
eligible rollover distributions made after December 31, 1992; and,
WHEREAS, the Internal Revenue Service issued Notice 93-26 modifying the 30-day
notice requirement under section 1.411(a)-11(c); and
WHEREAS, the Internal Revenue Service issued Revenue Procedure 93-47 providing a
simplified method to amend plans using a Model Amendment, as set forth below.
THEREFORE, the Plan is hereby amended to incorporate the Revenue Procedure 93-47
Model Amendments as follows:
The following language, applicable to distributions made on or after January 1,
1993 is hereby inserted following the final sentence of section 2.5.2(g) of
Aztec Manufacturing Company Employee Benefit Plan & Trust.
"If a distribution is one to which sections 401(a) (11) and 417 of the
Internal Revenue Code do not apply, such distribution may commence less
than 30 days after the notice required under section 1.411(a)-11(c) of
the Income Tax Regulations is given, provided that:
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(1) the plan administrator clearly informs the participant that the
participant has a right to a period of at least 30 days after receiving the
notice to consider the decision of whether or not to elect a distribution (and
if applicable, a particular option), and
(2) the participant, after receiving the notice, affirmatively elects a
distribution."
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IN WITNESS WHEREOF, the undersigned has executed this Model Section 401(a) (17)
Amendment and Revenue Procedure 93-47 Amendment to the Plan on this 23 day of
June, 1994.
Name of Employer and EIN:
AZTEC MANUFACTURING COMPANY - 75-0948250
By:/s/ Dana Perry
-------------------------------------
DANA PERRY, VICE PRESIDENT FINANCE
Name of Affiliate Employer and EIN:
AZTEC INDUSTRIES, INC. 75-1318815
By:/s/ Dana Perry
-------------------------------------
DANA PERRY
Name of Affiliate Employer and EIN:
AZTEC INDUSTRIES, INC. - MOSS POINT - 75-2107319
/s/ Dana Perry
By:-------------------------------------
DANA PERRY
Name of Affiliate Employer and EIN:
AUTOMATED PROCESSING, INC. - 64-0594499
/s/ Dana Perry
By:-------------------------------------
DANA PERRY
Name of Affiliate Employer and EIN:
THE CALVERT CO., INC. - 64-0792921
/s/ Dana Perry
By:-------------------------------------
DANA PERRY
-89-
<PAGE>
Execution of Model Section 401(a) (17) and Revenue Procedure 93--47 Amendment
Aztec Manufacturing, Inc.
Name of Affiliate Employer and EIN:
AZTEC GROUP COMPANY - 75-2403898
By:/s/
--------------------------------
DANA PERRY
Name of Affiliate Employer and EIN:
ARBOR-CROWLEY, INC. - 75-0337454
By:/s/
--------------------------------
DANA PERRY
Name of Affiliate Employer and EIN:
AZTEC MANUFACTURING PARTNERSHIP, LTD. - 75-2403896
By:/s/
--------------------------------
DANA PERRY
Name of Affiliate Employer and EIN:
AZT MANUFACTURING WASKOM PARTNERSHIP, LTD. - 75-2403909
By:/s/
---------------------------------
DANA PERRY
Name of Affiliate Employer and EIN:
RIG-A-LITE PARTNERSHIP, LTD. - 75-0353821
By:/s/
---------------------------------
DANA PERRY
-90-
<PAGE>
Execution of Model Section 401(a) (17) and
Revenue Procedure 93--47 Amendment
Aztec Manufacturing, Inc.
Name of Affiliate Employer and EIN:
AZTEC HOLDINGS, INC. - 51-0337457
By:/s/
---------------------------------
DANA PERRY
Name of Affiliate Employer and EIN:
ATKINSON INDUSTRIES, INC. - 48-0126010
By:/s/
---------------------------------
DANA PERRY
Name of Affiliate Employer and EIN:
ARIZONA GALVANIZING, INC. - 75-2508628
By:/s/
---------------------------------
DANA PERRY
Name of Trustee:
OVERTON BANK AND TRUST, NATIONAL ASSOCIATION
By:/s/
---------------------------------
-91-
<PAGE>
EXHIBIT 4.2
MFS Fund Distributors, Inc.
401(k) Profit Sharing Plan and Trust
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
<TABLE>
<CAPTION>
<S> <C>
ARTICLE II
TOP HEAVY PROVISIONS AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS......................................... 6
2.2 DETERMINATION OF TOP HEAVY STATUS................................... 6
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER......................... 8
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY............................. 8
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES....................... 8
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR.............................. 8
2.7 RECORDS AND REPORTS................................................. 8
2.8 APPOINTMENT OF ADVISERS............................................. 8
2.9 INFORMATION FROM EMPLOYER........................................... 8
2.10 PAYMENT OF EXPENSES................................................. 9
2.11 MAJORITY ACTIONS.................................................... 9
2.12 CLAIMS PROCEDURE.................................................... 9
2.13 CLAIMS REVIEW PROCEDURE............................................. 9
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY........................................... 9
3.2 EFFECTIVE DATE OF PARTICIPATION..................................... 9
3.3 DETERMINATION OF ELIGIBILITY........................................ 9
3.4 TERMINATION OF ELIGIBLY............................................. 9
3.5 OMISSION OF ELIGIBLE EMPLOYEE....................................... 9
3.6 INCLUSION OF INELIGIBLE EMPLOYEE.................................... 9
3.7 ELECTION NOT TO PARTICIPATE......................................... 9
3.8 CONTROL OF ENTITIES BY OWNER-EMPLOYEE............................... 10
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION..................... 10
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION............................. 10
4.3 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION.......................... 12
4.4 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS................ 12
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS.................................... 14
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS...................... 15
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS................................ 16
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS.................. 18
4.9 MAXIMUM ANNUAL ADDITIONS............................................ 19
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS........................... 22
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
4.11 TRANSFERS FROM QUALIFIED PLANS...................................... 22
4.12 VOLUNTARY CONTRIBUTIONS............................................. 22
4.13 DIRECTED INVESTMENT ACCOUNT......................................... 23
4.14 QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS.......................... 23
4.15 INTEGRATION IN MORE THAN ONE PLAN................................... 23
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND......................................... 23
5.2 METHOD OF VALUATION................................................. 23
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT........................... 23
6.2 DETERMINATION OF BENEFITS UPON DEATH................................ 24
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY.................... 24
6.4 DETERMINATION OF BENEFITS UPON TERMINATION.......................... 24
6.5 DISTRIBUTION OF BENEFITS............................................ 26
6.6 DISTRIBUTION OF BENEFITS UPON DEATH................................. 27
6.7 TIME OF SEGREGATION OR DISTRIBUTION................................. 29
6.8 DISTRIBUTION FOR MINOR BENEFICIARY.................................. 29
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN...................... 29
6.10 PRE-RETIREMENT DISTRIBUTION......................................... 30
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP................................... 30
6.12 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS........................... 30
6.13 SPECIAL RULE FOR NON-ANNUITY PLANS.................................. 30
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE............................... 30
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE......................... 31
7.3 OTHER POWERS OF THE TRUSTEE......................................... 31
7.4 LOANS TO PARTICIPANTS............................................... 32
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS............................ 33
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES....................... 33
7.7 ANNUAL REPORT OF THE TRUSTEE........................................ 33
7.8 AUDIT............................................................... 33
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE...................... 34
7.10 TRANSFER OF INTEREST................................................ 34
7.11 TRUSTEE INDEMNIFICATION............................................. 34
7.12 EMPLOYER SECURITIES AND REAL PROPERTY............................... 34
7.13 PASSIVE TRUSTEE..................................................... 34
7.14 DIRECT ROLLOVER..................................................... 34
ARTICLE VIII
AMENDMENT, TERMINATION, AND MERGERS
8.1 AMENDMENT........................................................... 35
8.2 TERMINATION......................................................... 35
8.3 MERGER OR CONSOLIDATION............................................. 35
</TABLE>
ii
<PAGE>
ARTICLE IX
MISCELLANEOUS
<TABLE>
<S> <C>
9.1 EMPLOYER ADOPTIONS.................................................. 35
9.2 PARTICIPANT'S RIGHTS................................................ 35
9.3 ALIENATION.......................................................... 36
9.4 CONSTRUCTION OF PLAN................................................ 36
9.5 GENDER AND NUMBER................................................... 36
9.6 LEGAL ACTION........................................................ 36
9.7 PROHIBITION AGAINST DIVERSION OF FUNDS.............................. 36
9.8 BONDING............................................................. 36
9.9 INSURER'S PROTECTIVE CLAUSE......................................... 36
9.10 RECEIPT AND RELEASE FOR PAYMENTS.................................... 36
9.11 ACTION BY THE EMPLOYER.............................................. 36
9.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY.................. 36
9.13 HEADINGS............................................................ 37
9.14 APPROVAL BY INTERNAL REVENUE SERVICE................................ 37
9.15 UNIFORMITY.......................................................... 37
9.16 PAYMENT OF BENEFITS................................................. 37
ARTICLE X
PARTICIPATING EMPLOYERS
10.1 ELECTION TO BECOME A PARTICIPATING EMPLOYER......................... 37
10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS............................. 37
10.3 DESIGNATION OF AGENT................................................ 37
10.4 EMPLOYEE TRANSFERS.................................................. 37
10.5 PARTICIPATING EMPLOYER'S CONTRIBUTION AND FORFEITURES............... 37
10.6 AMENDMENT........................................................... 38
10.7 DISCONTINUANCE OF PARTICIPATION..................................... 38
10.8 ADMINISTRATOR'S AUTHORITY........................................... 38
10.9 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE................... 38
</TABLE>
iii
<PAGE>
ARTICLE I
DEFINITIONS
As used in this Plan, the following words and phrases shall have the meanings
set forth herein unless a different meaning is clearly required by the context:
1.1 "Act" means the Employee Retirement Income Security Act of 1974, as it may
be amended from time to time.
1.2 "Administrator" means the person(s) or entity designated by the Employer
pursuant to Section 2.4 to administer the Plan on behalf of the Employer.
1.3 "Adoption Agreement" means the separate Agreement which is executed by the
Employer and accepted by the Trustee which sets forth the elective provisions of
this Plan and Trust as specified by the Employer.
1.4 "Affiliated Employer" means the Employer and any corporation which is a
member of a controlled group of corporations (as defined in Code Section
414(b)) which includes the Employer, any trade or business (whether or not
incorporated) which is under common control (as defined in Code Section 414(c))
with the Employer, any organization (whether or not incorporated) which is a
member of an affiliated service group (as defined in Code Section 414(m)) which
includes the Employer, and any other entity required to be aggregated with the
Employer pursuant to Regulations under Code Section 414(o).
1.5 "Aggregate Account" means with respect to each Participant, the value of
all accounts maintained on behalf of a Participant, whether attributable to
Employer or Employee contributions, subject to the provisions of Section 2.2.
1.6 "Anniversary Date" means the anniversary date specified in C3 of the
Adoption Agreement.
1.7 "Beneficiary" means the person to whom a share of a deceased Participant's
interest in the Plan is payable, subject to the restrictions of Sections 6.2 and
6.6.
1.8 "Code" means the Internal Revenue Code of 1986, as amended or replaced from
time to time.
1.9 "Compensation" with respect to any Participant means one of the following:
(a) Compensation on Form W-2. Compensation is defined as wages, as defined
in Code Section 3401(a), and all other payments of Compensation to an
Employee by the Employer (in the course of the Employer's trade or
business) for which the Employer is required to furnish the Employee a
written statement under Code Sections 6041(d) and 6051(a)(3).
Compensation must be determined without regard to any rules under Code
Section 3401(a) that limit the remuneration included in wages based on
the nature or location of the employment or the services performed
(such as the exception for agricultural labor in Section 3401(a)(2).
Compensation for any Self-Employed Individual shall be equal to his
Earned Income.
(b) Code Section 3401(a) wages. Compensation is defined as wages within the
meaning of Code Section 3401(a) for the purposes of income tax
withholding at the source but determined without regard to any rules
that limit the remuneration included in wages based on the nature or
location of the employment or the services performed (such as the
exception for agricultural labor in Code Section 3401(a)2)).
(c) 415 safe-harbor compensation. Compensation is defined as wages,
salaries, and fees for professional services and other amounts received
(without regard to whether or not an amount is paid in cash) for
personal services actually rendered in the course of employment with
the Employer maintaining the Plan to the extent that the amounts are
includible in gross income (including, but not limited to, commissions
paid salesmen, compensation for services on the basis of a percentage
of profits, commissions on insurance premiums, tips, bonuses, fringe
benefits, and reimbursements, or other expense allowances under a non-
accountable plan (as described in Regulation Section 1.62-2(c)), and
excluding the following:
(1) Employer contributions to a plan of Deferred Compensation which are
not includible in the Employee's gross income for the taxable year
in which contributed, or Employer contributions under a simplified
employee pension plan to the extent such contributions are
deductible by the Employee, or any distributions from a plan of
Deferred Compensation;
(2) Amounts realized from the exercise of a nonqualified stock option,
or when restricted stock (or property) held by the Employee either
becomes freely transferable or is no longer subject to a
substantial risk of forfeiture;
(3) Amounts realized from the sale, exchange or other disposition of
stock acquired under a qualified stock option; and
(4) other amounts which received special tax benefits, or contributions
made by the Employer (whether or not under a salary reduction
agreement) towards the purchase of an annuity contract described in
section 403(b) of the Internal Revenue Code (whether or not the
contributions are actually excludable from the gross income of the
Employee).
In addition, if specified in the Adoption Agreement, Compensation for all Plan
purposes shall also include compensation which is not currently includible in
the Participant's gross income by reason of the application of Code Sections
125, 402(e)(3), 402(h)(1)(B), or 403(b).
Compensation in excess of $200,000 shall be disregarded. Such amount shall be
adjusted at the same time and in such manner as permitted under Code Section
415(d).
Notwithstanding the above, for Plan Years beginning on or after January 1, 1994,
the Compensation of each Employee taken into account under the Plan shall not
exceed the OBRA `93 annual compensation limit. The OBRA `93 annual compensation
limit is $150,000, as adjusted by the Commissioner for increases in the cost of
living in accordance with Code Section 401(a)(17)(B). The cost-of-living
adjustment in effect for a calendar year applies to any period, not exceeding 12
months, over which Compensation is determined (determination period) beginning
in such calendar year. If a determination period consists of fewer than 12
months, the OBRA `93 annual compensation limit will be multiplied by a fraction,
the numerator of which is the number of months in the determination period, and
the denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any reference in this Plan
to the limitation under Code Section 401(a)(17) shall mean the OBRA '93 annual
compensation limit set forth in this Section.
In applying these limitations, the family group of a Highly Compensated
Participant who is subject to the Family Member aggregation rules of Code
Section 414(q)(6) because such Participant is either a "five percent owner" of
the Employer or one of the ten (10) Highly Compensated Employees paid the
greatest "415 Compensation" during the year, shall be treated as a single
Participant, except that for this purpose Family Members shall include only the
affected Participant's spouse and any lineal descendants who have not attained
age nineteen (19) before the close of the year. If, as a result of the
application of such rules, the adjusted 1imitation is exceeded, then (except for
purposes of determining the portion of Compensation up to the integration level
if this plan is integrated), the limitation shall be prorated among the affected
individuals in proportion to each such individual's Compensation as determined
under this Section prior to the application of this limitation.
1
<PAGE>
For Plan Years beginning prior to January 1, 1989, the $200,000 limit (without
regard to Family Member aggregation) shall apply only for Top Heavy Plan Years
and shall not be adjusted.
1.10 "Contract" or "Policy" means any life insurance policy, retirement income
policy, or annuity contract (group or individual) issued by the Insurer. In the
event of any conflict between the terms of this Plan and the terms of any
insurance contract purchased hereunder, the Plan provisions shall control.
1.11 "Deferred Compensation" means that portion of a Participant's total
Compensation that such Participant has elected to defer for a Plan Year pursuant
to Section 4.2.
1.12 "Early Retirement Date" means the date specified in the Adoption Agreement
on which a Participant or Former Participant has satisfied the age and service
requirements specified in the Adoption Agreement (Early Retirement Age). A
Participant shall become fully Vested upon satisfying this requirement if still
employed at his Early Retirement Age.
A Former Participant who terminates employment after satisfying the service
requirement for Early Retirement and who thereafter reaches the age requirement
contained herein shall be entitled to receive his benefits under this Plan.
1.13 "Earned Income" means with respect to a Self-Employed Individual, the net
earnings from self-employment in the trade or business with respect to which the
Plan is established, for which the personal services of the individual are a
material income-producing factor. Net earnings will be determined without regard
to items not included in gross income and the deductions allocable to such
items. Net earnings are reduced by contributions by the Employer to a qualified
Plan to the extent deductible under Code Section 404. In addition, for Plan
Years beginning after December 31, 1989, net earnings shall be determined with
regard to the deduction allowed to the Employer by Code Section 164(f).
1.14 "Elective Contribution" means the Employer's contributions to the Plan that
are made pursuant to the Participant's deferral election pursuant to Section
4.2. In addition, if selected in E3 of the Adoption Agreement, the
Employer's matching contribution made pursuant to Section 4.1(b) shall be
considered an Elective Contribution for purposes of the Plan. Elective
Contributions shall be subject to the requirements of Sections 4.2(b) and 4.2(c)
and shall further be required to satisfy the discrimination requirements of
Regulation 1.401(k)-1(b)(3), the provisions of which are specifically
incorporated herein by reference.
1.15 "Eligible Employee" means any Employee specified in DI of the Adoption
Agreement.
1.16 "Employee" means any person who is employed by the Employer, but excludes
any person who is employed as an independent contractor. The term Employee shall
also include Leased Employees as provided in Code Section 414(n) or (o).
Except as provided in the Non-Standardized Adoption Agreement, all Employees of
all entities which are an Affiliated Employer will be treated as employed by
a single employer.
1.17 "Employer" means the entity specified in the Adoption Agreement, any
Participating Employer (as defined in Section 10.1) which shall adopt this
Plan, any successor which shall maintain this Plan and any predecessor which
has maintained this Plan.
1.18 "Excess Compensation" means, with respect to a Plan that is integrated with
Social Security, a Participant's Compensation which is in excess of the amount
set forth in the Adoption Agreement.
1.19 "Excess Contributions" means, with respect to a Plan Year, the excess
of Elective Contributions and Qualified Non-Elective Contributions made on
behalf of Highly Compensated Participants for the Plan Year over the maximum
amount of such contributions permitted under Section 4.5(a).
1.20 "Excess Deferred Compensation" means, with respect to any taxable year of a
Participant, the excess of the aggregate amount of such Participant's Deferred
Compensation and the elective deferrals pursuant to Section 4.2(f) actually made
on behalf of such Participant for such taxable year, over the dollar limitation
provided for in Code Section 402(g), which is incorporated herein by reference.
1.21 "Family Member" means, with respect to an affected Participant, such
Participant's spouse, and such Participant's lineal descendants and ascendants
and their spouses, all as described in Code Section 414(q)(6)(B).
1.22 "Fiduciary" means any person who (a) exercises any discretionary authority
or discretionary control respecting management of the Plan or exercises any
authority or control respecting management or disposition of its assets, (b)
renders investment advice for a fee or other compensation, direct or indirect,
with respect to any monies or other property of the Plan or has any authority or
responsibility to do so, or (c) has any discretionary authority or discretionary
responsibility in the administration of the Plan, including, but not limited to,
the Trustee, the Employer and its representative body, and the Administrator.
1.23 "Fiscal Year" means the Employer's accounting year as specified in the
Adoption Agreement.
1.24 "Forfeiture" means that portion of a Participant's Account that is not
Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion of a Participant's
Account, or
(b) the last day of the Plan Year in which the Participant incurs five (5)
consecutive 1-Year Breaks in Service.
Furthermore, for purposes of paragraph (a) above, in the case of a Terminated
Participant whose Vested benefit is zero, such Terminated Participant shall be
deemed to have received a distribution of his Vested benefit upon his
termination of employment. In addition, the term Forfeiture shall also include
amounts deemed to be Forfeitures pursuant to any other provision of this Plan.
1.25 "Former Participant" means a person who has been a Participant, but who has
ceased to be a Participant for any reason.
1.26 "414(s) Compensation" with respect to any Employee means his Compensation
as defined in Section 1.9. However, for purposes of this Section, Compensation
shall be Compensation paid and shall be determined by including, in the case of
a non-standardized Adoption Agreement, any items that are excluded from
Compensation pursuant to the Adoption Agreement. The amount of "414(s)
Compensation" with respect to any Employee shall include "414(s) Compensation"
during the entire twelve (12) month period ending on the last day of such Plan
Year, except that for Plan Years beginning prior to the later of January 1,
1992, or the date that is sixty (60) days after the date final Regulations are
issued, "414(s) Compensation" shall only be recognized as of an Employee's
effective date of participation.
In addition, if specified in the Adoption Agreement, "414(s) Compensation" shall
also include compensation which is not currently includible in the Participant's
gross income by reason of the application of Code Sections 125, 402(e)(3),
402(h)(1)(B), or 403(b), plus Elective Contributions attributable to Deferred
Compensation recharacterized as voluntary Employee contributions pursuant to
4.6(a).
1.27 "415 Compensation" means compensation as defined in Section 4.9(f)(2).
1.28 "Highly Compensated Employee" means an Employee described in Code Section
414(q) and the Regulations thereunder and generally means an Employee who
performed services for the Employer during the "determination year" and is in
one or more of the following groups:
(a) Employees who at any time during the "determination year" or "look-
back year" were "five percent owners" as defined in Section 1.35(c).
2
<PAGE>
(b) Employees who received "415 Compensation" during the "look-back year"
from the Employer in excess of $75.000.
(c) Employees who received "415 Compensation" during the "look-back year"
from the Employer in excess of $50.000 and were in the Top Paid Group
of Employees for the Plan Year.
(d) Employees who during the "look-back year" were officers of the
Employer (as that term is defined within the meaning of the
Regulations under Code Section 416) and received "415 Compensation"
during the look-back year" from the Employer greater than 50 percent
of the limit in effect under Code Section 415(b)(1)(A) for any such
Plan Year. The number of officers shall be limited to the lesser of
(i) 50 employees: or (ii) the greater of 3 employees or 10 percent of
all employees. If the Employer does not have at least one officer
whose annual "415 Compensation" is in excess of 50 percent of the Code
Section 415(b)(1)(A) limit, then the highest paid officer of the
Employer will be treated as a Highly Compensated Employee.
(e) Employees who are in the group consisting of the 100 Employees paid
the greatest "415 Compensation" during the "determination year" and
are also described in (b), (c) or (d) above when these paragraphs are
modified to substitute "determination year" for "look-back year".
The "determination year" shall be the Plan Year for which testing is
being performed, and the "look-back year" shall be the immediately
preceding twelve-month period. However, if the Plan Year is a calendar
year, or if another Plan of the Employer so provides, then the "look-
back year" shall be the calendar year ending with or within the Plan
Year for which testing is being performed, and the "determining year"
(if applicable) shall be the period of time, if any, which extends
beyond the "look-back year" and ends on the last day of the Plan Year
for which testing is being performed (the "lag period"). With respect
to this election, it shall be applied on a uniform and consistent
basis to all plans, entities, and arrangements of the Employer.
For purposes of this Section, the determination of "415 Compensation" shall be
made by including amounts that would otherwise be excluded from a Participant's
gross income by reason of the application of Code Sections 125, 402(e)(3),
402(h)(1)(B) and, in the case of Employer contributions made pursuant to a
salary reduction agreement, Code Section 403(b). Additionally, the dollar
threshold amounts specified in (b) and (c) above shall be adjusted at such time
and in such manner as is provided in Regulations. In the case of such an
adjustment, the dollar limits which shall be applied are those for the calendar
year in which the "determination year" or look back year" begins.
In determining who is a Highly Compensated Employee, Employees who are non-
resident aliens and who received no earned income (within the meaning of Code
Section 911(d)) from the Employer constituting United States source income
within the meaning of Code Section 861(a)(3) shall not be treated as Employees.
Additionally, all Affiliated Employers shall be taken into account as a single
employer and Leased Employees within the meaning of Code Sections 414(n)(2) and
414(o)(2) shall be considered Employees unless such Leased Employees are
covered by a plan described in Code Section 414(n)(5) and are not covered in
any qualified plan maintained by the Employer. The exclusion of Leased
Employees for this purpose shall be applied on a uniform and consistent basis
for all of the Employer's retirement plans. In addition, Highly Compensated
Former Employees shall be treated as Highly Compensated Employees without
regard to whether they performed services during the "determination year".
1.29 "Highly Compensated Former Employee" means a former Employee who had a
separation year prior to the "determination year" and was a Highly Compensated
Employee in the year of separation from service or in any "determination year"
after attaining age 55. Notwithstanding the foregoing, an Employee who separated
from service prior to 1987 will be treated as a Highly Compensated Former
Employee only if during the separation year (or year preceding the separation
year) or any year after the Employee attains age 55 (or the last year ending
before the Employee's 55th birthday), the Employee either received "415
Compensation" in excess of $50,000 or was a "five percent owner". For purposes
of this Section, "determination year", "415 Compensation" and five percent
owner" shall be determined in accordance with Section 1.28. Highly Compensated
Former Employees shall be treated as Highly Compensated Employees. The method
set forth in this Section for determining who is a "Highly Compensated Former
Employee" shall be applied on a uniform and consistent basis for all purposes
for which the Code Section 414(q) definition is applicable.
1.30 "Highly Compensated Participant" means any Highly Compensated Employee who
is eligible to participate in the Plan.
1.31 "Hour of Service" means (l) each hour for which an Employee is directly or
indirectly compensated or entitled to compensation by the Employer for the
performance of duties during the applicable computation period: (2) each hour
for which an Employee is directly or indirectly compensated or entitled to
compensation by the Employer (irrespective of whether the employment
relationship has terminated) for reasons other than performance of duties (such
as vacation, holidays, sickness, jury duty, disability, lay-off, military duty
or leave of absence) during the applicable computation period: (3) each hour for
which back pay is awarded or agreed to by the Employer without regard to
mitigation of damages. The same Hours of Service shall not be credited both
under (1) or (2), as the case may be, and under (3).
Notwithstanding the above, (i) no more than 501 Hours of Service are required to
be credited 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); (ii) an hour for which an Employee is directly or
indirectly paid, or entitled to payment, on account of a period during which no
duties are performed is not required to be credited to the Employee if such
payment is made or due under a plan maintained solely for the purpose of
complying with applicable worker's compensation, or unemployment compensation or
disability insurance laws; and (iii) Hours of Service are not required to be
credited for a payment which solely reimburses an Employee for medical or
medically related expenses incurred by the Employee.
For purposes of this Section, a payment shall be deemed to be made by or due
from the Employer regardless of whether such payment is made by or due from the
Employer directly, or indirectly through among others, a trust fund, or insurer,
to which the Employer contributes or pays premiums and regardless of whether
contributions made or due to the trust fund, insurer, or other entity are for
the benefit of particular Employees or are on behalf of a group of Employees
in the aggregate.
An Hour of Service must be counted for the purpose of determining a Year of
Service, a year of participation for purposes of accrued benefits, a 1-Year
Break in Service, and employment commencement date (or reemployment commencement
date). The provisions of Department of Labor regulations 2530.200b-2(b) and (c)
are incorporated herein by reference.
Hours of Service will be credited for employment with all Affiliated Employers
and for any individual considered to be a Leased Employee pursuant to Code
Sections 414(n) or 414(o) and the Regulations thereunder.
Hours of Service will be determined on the basis of the method selected in the
Adoption Agreement.
1.32 "Insurer" means any legal reserve insurance company which shall issue one
or more policies under the Plan.
1.33 "Investment Manager" means an entity that (a) has the power to manage,
acquire, or dispose of Plan assets and (b) acknowledges fidu-
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ciary responsibility to the Plan in writing. Such entity must be a person, firm,
or corporation registered as an investment adviser under the Investment Advisers
Act of 1940, a bank, or an insurance company.
1.34 "Joint and Survivor Annuity" means an annuity for the life of a
Participant with a survivor annuity for the life of the Participant's spouse
which is not less than 1/2, nor greater than the amount of the annuity payable
during the joint lives of the Participant and the Participant's spouse. The
Joint and Survivor Annuity will be the amount of benefit which can be purchased
with the Participant's Vested interest in the Plan.
1.35 "Key Employee" means an Employee as defined in Code Section 416(1) and the
Regulations thereunder. Generally, any Employee or former Employee (as well as
each of his Beneficiaries) is considered a Key Employee if he, at any time
during the Plan Year that contains the "Determination Date" or any of the
preceding four (4) Plan Years, has been included in one of the following
categories:
(a) an officer of the Employer (as that term is defined within the meaning
of the Regulations under Code Section 416) having annual "415
Compensation" greater than 50 percent of the amount in effect under
Code Section 415(b)(1)(A) for any such Plan Year.
(b) one of the ten employees having annual "415 Compensation" from the
Employer for a Plan Year greater than the dollar limitation in effect
under Code Section 415(c)(1)(A) for the calendar year in which such
Plan Year ends and owning (or considered as owning within the meaning
of Code Section 318) both more than one-half percent interest and the
largest interests in the Employer.
(c) a "five percent owner" of the Employer. "Five percent owner" means any
person who owns (or is considered as owning within the meaning of Code
Section 318) more than five percent (5%) of the outstanding stock of
the Employer or stock possessing more than five percent (5%) of the
total combined voting power of all stock of the Employer or, in the
case of an unincorporated business, any person who owns more than five
percent (5%) of the capital or profits interest in the Employer. In
determining percentage ownership hereunder, employers that would
otherwise be aggregated under Code Sections 414(b), (c), (m) and (o)
shall he treated as separate employers.
(d) a "one percent owner" of the Employer having an annual "415
Compensation" from the Employer of more than $150,000. "One percent
owner" means any person who owns (or is considered as owning within the
meaning of Code Section 318) more than one percent (1%) of the
outstanding stock of the Employer or stock possessing more than one
percent (1%) of the total combined voting power of all stock of the
Employer or, in the case of an unincorporated business, any person who
owns more than one percent (1%) of the capital or profits interest in
the Employer. In determining percentage ownership hereunder, employers
that would otherwise be aggregated under Code Sections 414(b), (c), (m)
and (o) shall be treated as separate employers. However, in determining
whether an individual has "415 Compensation" of more than $l50.000.
"415 Compensation" from each employer required to be aggregated under
Code Sections 414(b), (c), (m) and (o) shall be taken into account.
For purposes of this Section, the determination of "415 Compensation" shall be
made by including amounts that would otherwise be excluded from a Participant's
gross income by reason of the application of Code Sections 125. 402(e)(3),
402(h)(I)(B) and, in the case of Employer contributions made pursuant to a
salary reduction agreement, Code Section 403(b).
1.36 "Late Retirement Date" means the date of, or the first day of the month or
the Anniversary Date coinciding with or next following, whichever corresponds to
the election made for the Normal Retirement Date, a Participant's actual
retirement after having reached his Normal Retirement Date.
1.37 "Leased Employee" means any person (other than an Employee of the
recipient) who pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the recipient (or for
the recipient and related persons determined in accordance with Code Section
414(n)(6)) on a substantially full time basis for a period of at least one year,
and such services are of a type historically performed by employees in the
business field of the recipient 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:
(i)such employee is covered by a money purchase pension plan providing: (1) a
nonintegrated employer contribution rate of at least 10 percent of compensation,
as defined in Code Section 415(c)(3), but including amounts contributed pursuant
to a salary reduction agreement which are excludable from the employee's gross
income under Code Sections 125, 402(e)(3), 402(h), or 403(b), (2) immediate
participation, and (3) full and immediate vesting: and (ii) leased employees do
not constitute more than 20 percent of the recipient's nonhighly compensated
workforce.
1.38 "Net Profit" means with respect to any Fiscal Year the Employer's net
income or profit for such Fiscal Year determined upon the basis of the
Employer's books of account in accordance with generally accepted accounting
principles, without any reduction for taxes based upon income, or for
contributions made by the Employer to this Plan and any other qualified plan.
1.39 "Non-Elective Contribution" means the Employer's contributions to the Plan
other than those made pursuant to the Participant's deferral election made
pursuant to Section 4.2 and any Qualified Non-Elective Contribution. In
addition, if selected in E3 of the Adoption Agreement, the Employer's Matching
Contribution made pursuant to Section 4.1(b) shall be considered a Non-Elective
Contribution for purposes of the Plan.
1.40 "Non-Highly Compensated Participant" means any Participant who is neither a
Highly Compensated Employee nor a Family Member.
1.41 "Non-Key Employee" means any Employee or former Employee (and his
Beneficiaries) who is not a Key Employee.
1.42 "Normal Retirement Age" means the age specified in the Adoption Agreement
at which time a Participant shall become fully Vested in his Participant's
Account.
1.43 "Normal Retirement Date" means the date specified in the Adoption Agreement
on which a Participant shall become eligible to have his benefits distributed to
him.
1.44 "1-Year Break in Service" means the applicable computation period during
which an Employee has not completed more than 500 Hours of Service with the
Employer. Further solely for the purpose of determining whether a Participant
has incurred a 1-Year Break in Service. Hours of Service shall be recognized for
"authorized leaves of absence" and "maternity and paternity leaves of absence."
"Authorized leave of absence" means an unpaid temporary cessation from active
employment with the Employer pursuant to an established nondiscriminatory
policy, whether occasioned by illness, military service, or any other reason.
A "maternity or paternity leave of absence" means, for Plan Years beginning
after December 31, 1984, an absence from work for any period by reason of the
Employee's pregnancy, birth of the Employee's child placement of a child with
the Employee in connection with the adoption of such child, or any absence for
the purpose of caring for such child for a period immediately following such
birth or placement. For this purpose, Hours of Service shall be credited for the
computation period in which the absence from work begins, only if credit
therefore is necessary to prevent the Employee
4
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from incurring a 1-Year Break in Service, or, in any other case, in the
immediately following computation period. The Hours of Service credited for a
"maternity or paternity leave of absence" shall be those which would normally
have been credited but for such absence, or, in any case in which the
Administrator is unable to determine such hours normally credited, eight (8)
Hours of Service per day. The total Hours of Service required to be credited for
a "maternity or paternity leave of absence" shall not exceed 501.
1.45 "Owner-Employee" means a sole proprietor who owns the entire interest in
the Employer or a partner who owns more than 10% of either the capital interest
or the profits interest in the Employer and who receives income for personal
services from the Employer.
1.46 "Participant" means any Eligible Employee who participates in the Plan as
provided in Section 3.2 and has not for any reason become ineligible to
participate further in the Plan.
1.47 "Participant's Account" means the account established and maintained by the
Administrator for each Participant with respect to his total interest under the
Plan resulting from the Employer's Non-Elective Contributions. A separate
accounting shall be maintained for matching contributions if they are deemed to
be Non-Elective Contributions.
1.48 "Participant's Combined Account" means the total aggregate amount of each
Participant's Elective Account, Qualified Non-Elective Account, and
Participant's Account.
1.49 "Participant's Elective Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan and Trust resulting from the Employer's Elective
Contributions. A separate accounting shall be maintained with respect to that
portion of the Participant's Elective Account attributable to Elective
Contributions made pursuant to Section 4.2. Employer matching contributions if
they are deemed to be Elective Contributions, and any Qualified Non-Elective
Contributions.
1.50 "Participant's Rollover Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan resulting from amounts transferred from another qualified
plan or "conduit" Individual Retirement Account in accordance with Section 4.11.
1.51 "Plan" means this instrument (hereinafter referred to as MFS Fund
Distributors, Inc. 401(k) Profit Sharing Plan and Trust Basic Plan Document #02)
including all amendments thereto, and the Adoption Agreement as adopted by the
Employer.
1.52 "Plan Year" means the Plan's accounting year as specified in C2 of the
Adoption Agreement.
1.53 "Pre-Retirement Survivor Annuity" means an immediate annuity for the life
of the Participant's spouse, the payments under which must be equal to the
actuarial equivalent of 50% of the Participant's Vested interest in the Plan as
of the date of death.
1.54 "Qualified Non-Elective Account" means the account established hereunder to
which Qualified Non-Elective Contributions are allocated.
1.55 "Qualified Non-Elective Contribution" means the Employer's contributions
to the Plan that are made pursuant to Section 4.1(d) and Section 4.6(b) which
are used to satisfy the "Actual Deferral Percentage" tests. Qualified Non-
Elective Contributions are nonforfeitable when made and are distributable only
as specified in Sections 4.2(c) and 6.11. In addition, the Employer's
contributions to the Plan that are made pursuant to Section 4.8(h) and which are
used to satisfy the "Actual Contribution Percentage" tests shall be considered
Qualified Non-Elective Contributions.
1.56 "Qualified Voluntary Employee Contribution Account" means the account
established and maintained by the Administrator for each Participant with
respect to his total interest under the Plan resulting from the Participant's
tax deductible qualified voluntary employee contributions made pursuant to
Section 4.14.
1.57 "Regulation" means the Income Tax Regulations as promulgated by the
Secretary of the Treasury or his delegate, and as amended from time to time.
1.58 "Retired Participant" means a person who has been a Participant, but who
has become entitled to retirement benefits under the Plan.
1.59 "Retirement Date" means the date as of which a Participant retires for
reasons other than Total and Permanent Disability, whether such retirement
occurs on a Participant's Normal Retirement Date. Early or Late Retirement Date
(see Section 6.1).
1.60 "Self-Employed Individual" means an individual who has earned income for
the taxable year from the trade or business for which the Plan is established,
and, also, an individual who would have had earned income but for the fact that
the trade or business had no net profits for the taxable year. A Self-Employed
Individual shall be treated as an Employee.
1.61 "Shareholder-Employee" means a Participant who owns more than five percent
(5%) of the Employer's outstanding capital stock during any year in which the
Employer elected to be taxed as a Small Business Corporation under the
applicable Code Section.
1.62 "Short Plan Year" means, if specified in the Adoption Agreement, that the
Plan Year shall be less than a 12 month period. If chosen, the following rules
shall apply in the administration of this Plan. In determining whether an
Employee has completed a Year of Service for benefit accrual purposes in the
Short Plan Year, the number of the Hours of Service required shall be
proportionately reduced based on the number of days in the Short Plan Year. The
determination of whether an Employee has completed a Year of Service for vesting
and eligibility purposes shall be made in accordance with Department of Labor
Regulation 2530.203-2(c). In addition, if this Plan is integrated with Social
Security, the integration level shall also be proportionately reduced based on
the number of days in the Short Plan Year.
1.63 "Super Top Heavy Plan" means a plan described in Section 2.2(b)
1.64 "Taxable Wage Base" means, with respect to any year, the maximum amount of
earnings which may be considered wages for such year under Code Section
3121(a)(1).
1.65 "Terminated Participant" means a person who has been a Participant, but
whose employment has been terminated other than by death, Total and Permanent
Disability or retirement.
1.66 "Top Heavy Plan" means a plan described in Section 2.2(a).
1.67 "Top Heavy Plan Year" means a Plan Year commencing after December 31, 1983
during which the Plan is a Top Heavy Plan.
1.68 "Top Paid Group" shall be determined pursuant to Code Section 414(q) and
the Regulations thereunder and generally means the top 20 percent of Employees
who performed services for the Employer during the applicable year, ranked
according to the amount of "415 Compensation" (as determined pursuant to
Section 1.28) received from the Employer during such year. All Affiliated
Employers shall be taken into account as a single employer, and Leased Employees
shall be treated as Employees pursuant to Code Section 414(n) or (o). Employees
who are non-resident aliens who received no earned income (within the meaning of
Code Section 911(d)(2)) from the Employer constituting United States source
income within the meaning of Code Section 861(a)(3) shall not be treated as
Employees. Additionally, for the purpose of determining the number of active
Employees in any year, the following additional Employees shall also be
excluded, however, such Employees shall still be considered for the purpose of
identifying the particular Employees in the Top Paid Group:
(a) Employees with less than six (6) months of service
(b) Employees who normally work less than 17 1/2 hours per week;
(c) Employees who normally work less than six (6) months
during a year and
(d) Employees who have not yet attained age 21.
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In addition, if 90 percent or more of the Employees of the Employer are covered
under agreements the Secretary of Labor finds to be collective bargaining
agreements between Employee representatives and the Employer, and the Plan
covers only Employees who are not covered under such agreements; then Employees
covered by such agreements shall be excluded from both the total number of
active Employees as well as from the identification of particular Employees in
the Top Paid Group.
The foregoing exclusions set forth in this Section shall be applied on a uniform
and consistent basis for all purposes for which the Code Section 414(q)
definition is applicable.
1.69 "Total and Permanent Disability" means the inability to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment that can be expected to result in death or which has lasted or
can be expected to last for a continuous period of not less than 12 months. The
disability of a Participant shall be determined by a licensed physician chosen
by the Administrator. However, if the condition constitutes total disability
under the federal Social Security Acts, the Administrator may rely upon such
determination that the Participant is Totally and Permanently Disabled for the
purposes of this Plan. The determination shall be applied uniformly to all
Participants.
1.70 "Trustee" means the person or entity named in B6 of the Adoption Agreement
and any successors.
1.71 "Trust Fund" means the assets of the Plan and Trust as the same shall
exist from time to time.
1.72 "Vested" means the nonforfeitable portion of any account maintained on
behalf of a Participant.
1.73 "Voluntary Contribution Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan resulting from the Participant's nondeductible voluntary
contributions made pursuant to Section 4.12.
Amounts recharacterized as voluntary Employee contributions pursuant to Section
4.6(a) shall remain subject to the limitations of Sections 4.2(b) and 4.2(c).
Therefore, a separate accounting shall be maintained with respect to that
portion of the Voluntary Contribution Account attributable to voluntary Employee
contributions made pursuant to Section 4.12.
1.74 "Year of Service" means the computation period of twelve (12) consecutive
months, herein set forth, and during which an Employee has completed at least
1000 Hours of Service.
For purposes of eligibility for participation, the initial computation period
shall begin with the date on which the Employee first performs an Hour of
Service (employment commenence date). The computation period beginning after a
1-Year Break in Service shall be measured from the date on which an Employee
again performs an Hour of Service. The succeeding computation periods shall
begin with the first anniversary of the Employee's employment commencement date.
However, if one (1) Year of Service or less is required as a condition of
eligibility, then after the initial eligibility computation period, the
eligibility computation period shall shift to the current Plan Year which
includes the anniversary of the date on which the Employee first performed an
Hour of Service. An Employee who is credited with 1,000 Hours of Service in both
the initial eligibility computation period and the first Plan Year which
commences prior to the first anniversary of the Employee's initial eligibility
computation period will be credited with two Years of Service for purposes of
eligibility to participate.
For vesting purposes, and all other purposes not specifically addressed in this
Section, the computation period shall be the Plan Year including periods prior
to the Effective Date of the Plan unless specifically excluded pursuant to the
Adoption Agreement.
Years of Service and breaks in service will be measured on the same computation
period.
Years of Service with any predecessor Employer which maintained this Plan shall
be recognized. Years of Service with any other predecessor Employer shall be
recognized as specified in the Adoption Agreement.
Years of Service with any Affiliated Employer shall be recognized.
ARTICLE II
TOP HEAVY PROVISIONS AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall provide the special vesting
requirements of Code Section 416(b) pursuant to Section 6.4 of the Plan and the
special minimum allocation requirements of Code Section 416(c) pursuant to
Section 4.4(i) of the Plan.
2.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan Year beginning after
December 31, 1983, in which, as of the Determination Date. (1) the
Present Value of Accrued Benefits of Key Employees and (2) the sum of
the Aggregate Accounts of Key Employees under this Plan and all plans
of an Aggregation Group, exceeds sixty percent (60%) of the Present
Value of Accrued Benefits and the Aggregate Accounts of all Key and
Non-Key Employees under this Plan and all plans of an Aggregation
Group.
If any Participant is a Non-Key Employee for any Plan Year, but such
Participant was a Key Employee for any prior Plan Year, such
Participant's Present Value of Accrued Benefit and/or Aggregate Account
balance shall not be taken into account for purposes of determining
whether this Plan is a Top Heavy or Super Top Heavy Plan (or whether
any Aggregation Group which includes this Plan is a Top Heavy Group).
In addition, if a Participant or Former Participant has not performed
any services for any Employer maintaining the Plan at any time during
the five year period ending on the Determination Date, any accrued
benefit for such Participant or Former Participant shall not be taken
into account for the purposes of determining whether this Plan is a Top
Heavy or Super Top Heavy Plan.
(b) This Plan shall be a Super Top Heavy Plan for any Plan Year beginning
after December 31, 1983, in which, as of the Determination Date, (1)
the Present Value of Accrued Benefits of Key Employees and (2) the sum
of the Aggregate Accounts of Key Employees under this Plan and all
plans of an Aggregation Group, exceeds ninety percent (90%) of the
Present Value of Accrued Benefits and the Aggregate Accounts of all Key
and Non-Key Employees under this Plan and all plans of an Aggregation
Group.
(c) Aggregate Account: A Participant's Aggregate Account as of the
Determination Date is the sum of:
(1) his Participant's Combined Account balance as of the most recent
valuation occurring within a twelve (12) month period ending on the
Determination Date;
(2) an adjustment for any contributions due as of the Determination
Date. Such adjustment shall be the amount of any contributions
actually made after the valuation date but on or before the
Determination Date, except for the first Plan Year when such
adjustment shall also reflect the amount of any contributions made
after the Determination Date that are allocated as of a date in
that first Plan Year.
(3) any Plan distributions made within the Plan Year that includes the
Determination Date or within the four (4) preceding Plan Years.
However, in the case of distributions made after the valuation date
and prior to the Determination Date, such distributions are not
included
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as distributions for top heavy purposes to the extent that such
distributions are already included in the Participant's Aggregate
Account balance as of the valuation date. Notwithstanding anything
herein to the contrary, all distributions, including distributions
made prior to January 1, 1984, and distributions under a terminated
plan which if it had not been terminated would have been required
to be included in an Aggregation Group, will be counted. Further,
distributions from the Plan (including the cash value of life
insurance policies) of a Participant's account balance because of
death shall be treated as a distribution for the purposes of this
paragraph.
(4) any Employee contributions, whether voluntary or mandatory.
However, amounts attributable to tax deductible qualified voluntary
employee contributions shall not be considered to be a part of the
Participant's Aggregate Account balance.
(5) with respect to unrelated rollovers and plan-to-plan transfers
(ones which are both initiated by the Employee and made from a
plan maintained by one employer to a plan maintained by another
employer), if this Plan provides the rollovers or plan-to-plan
transfers, it shall always consider such rollovers or plan-to-plan
transfers as a distribution for the purposes of this Section. If
this Plan is the plan accepting such rollovers or plan-to-plan
transfers it shall not consider such rollovers or plan-to-plan
transfers accepted after December 31, 1983 as part of the
Participant's Aggregate Account balance. However, rollovers or
plan-to-plan transfers accepted prior to January 1, 1984 shall be
considered as part of the Participant's Aggregate Account balance.
(6) with respect to related rollovers and plan-to-plan transfers (ones
either not initiated by the Employee or made to a plan maintained
by the same employer), if this Plan provides the rollover or plan-
to-plan transfer, it shall not be counted as a distribution for
purposes of this Section. If this Plan is the plan accepting such
rollover or plan-to-plan transfer, it shall consider such rollover
or plan-to-plan transfer as part of the Participant's Aggregate
Account balance, irrespective of the date on which such rollover or
plan-to-plan transfer is accepted.
(7) For the purposes of determining whether two employers are to be
treated as the same employer in 2.2(c)(5) and 2.2(c)(6) above, all
employers aggregated under Code Section 414(b),(c),(m) and (o) are
treated as the same employer.
(d) "Aggregation Group" means either a Required Aggregation Group or a
Permissive Aggregation Group as hereinafter determined.
(1) Required Aggregation Group: In determining a Required Aggregation
Group hereunder, each qualified plan of the Employer, including any
Simplified Employee Pension Plan, in which a Key Employee is a
participant in the Plan Year containing the Determination Date or
any of the four preceding Plan Years, and each other qualified plan
of the Employer which enables any qualified plan in which a Key
Employee participates to meet the requirements of Code Sections
401(a)(4)or 4l0, will be required to be aggregated. Such group
shall be known as a Required Aggregation Group.
In the case of a Required Aggregation Group, each plan in the group
will be considered a Top Heavy Plan if the Required Aggregation
Group is a Top Heavy Group. No plan in the Required Aggregation
Group will be considered a Top Heavy Plan if the Required
Aggregation Group is not a Top Heavy Group.
(2) Permissive Aggregation Group: The Employer may also include any
other plan of the Employer, including any Simplified Employee
Pension Plan, not required to be included in the Required
Aggregation Group, provided the resulting group, taken as a whole,
would continue to satisfy the provisions of Code Sections 401(a)(4)
and 410. Such group shall be known as a Permissive Aggregation
Group.
In the case of a Permissive Aggregation Group, only a plan that is
part of the Required Aggregation Group will be considered a Top
Heavy Plan if the Permissive Aggregation Group is a Top Heavy
Group. No plan in the Permissive Aggregation Group will be
considered a Top Heavy Plan if the Permissive Aggregation Group is
not a Top Heavy Group.
(3) Only those plans of the Employer in which the Determination Dates
fall within the same calendar year shall be aggregated in order to
determine whether such plans are Top Heavy Plans.
(4) When aggregating plans, the value of Aggregate Accounts and Accrued
Benefits will be calculated with reference to the Determination
Dates that fall within the same calendar year.
(5) An Aggregation Group shall include any terminated plan of the
Employer if it was maintained within the last five (5) years ending
on the Determination Date.
(e) "Determination Date" means (a) the last day of the preceding Plan Year,
or (b) in the case of the first Plan Year, the last day of such Plan
Year.
(f) Present Value of Accrued Benefit: In the case of a defined benefit
plan, the Present Value of Accrued Benefit for a Participant other than
a Key Employee shall be as determined using the single accrual method
used for all plans of the Employer and Affiliated Employers, or if no
such single method exists, using a method which results in benefits
accruing not more rapidly than the slowest accrual rate permitted under
Code Section 411(b)(1)(C). The determination of the Present Value of
Accrued Benefit shall be determined as of the most recent valuation
date that falls within or ends with the 12-month period ending on the
Determination Date, except as provided in Code Section 416 and the
Regulations thereunder for the first and second plan years of a defined
benefit plan.
However, any such determination must include present value of accrued
benefit attributable to any Plan distributions referred to in Section
2.2(c)(3) above, any Employee contributions referred to in Section
2.2(c)(4) above or any related or unrelated rollovers referred to in
Sections 2.2(c)(5) and 2.2(c)(6) above.
(g) "Top Heavy Group" means an Aggregation Group in which, as of the
Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key Employees under all
defined benefit plans included in the group, and
(2) the Aggregate Accounts of Key Employees under all defined
contribution plans included in the group, exceeds sixty percent
(60%) of a similar sum determined for all Participants.
(h) The Administrator shall determine whether this Plan is a Top Heavy Plan
on the Anniversary Date specified in the Adoption Agreement. Such
determination of the top heavy ratio shall be in accordance with Code
Section 416 and the Regulations thereunder.
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2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) The Employer shall be empowered to appoint and remove the Trustee and
the Administrator from time to time as it deems necessary for the
proper administration of the Plan to assure that the Plan is being
operated for the exclusive benefit of the Participants and their
Beneficiaries in accordance with the terms of the Plan, the Code, and
the Act.
(b) The Employer shall establish a "funding policy and method", i.e., it
shall determine whether the Plan has a short run need for liquidity
(e.g., to pay benefits) or whether liquidity is a long run goal and
investment growth (and stability of same) is a more current need, or
shall appoint a qualified person to do so. The Employer or its delegate
shall communicate such needs and goals to the Trustee, who shall
coordinate such Plan needs with its investment policy. The
communication of such a "funding policy and method" shall not however,
constitute a directive to the Trustee as to investment of the Trust
Funds. Such "funding policy and method" shall be consistent with the
objectives of this Plan and with the requirements of Title I of the
Act.
(c) The Employer may, in its discretion, appoint an Investment Manager to
manage all or a designated portion of the assets of the Plan. In such
event, the Trustee shall follow the directive of the Investment Manager
in investing the assets of the Plan managed by the Investment Manager.
(d) The Employer shall periodically review the performance of any
Fiduciary or other person to whom duties have been delegated or
allocated by it under the provisions of this Plan or pursuant to
procedures established hereunder. This requirement may be satisfied by
formal periodic review by the Employer or by a qualified person
specifically designated by the Employer, through day-to-day conduct and
evaluation, or through other appropriate ways.
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall appoint one or more Administrators. Any person, including,
but not limited to, the Employees of the Employer, shall be eligible to serve as
an Administarator. Any person so appointed shall signify his acceptance by
filing written acceptance with the Employer. An Administrator may resign by
delivering his written resignation to the Employer or be removed by the Employer
by delivery of written notice of removal, to take effect at a date specified
therein, or upon delivery to the Administrator if no date is specified.
The Employer upon the resignation or removal of an Administrator, shall promptly
designate in writing a successor to this position. If the Employer does not
appoint an Administrator, the Employer will function as the Administrator.
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES
If more than one person is appointed as Administrator, the responsibilities of
each Administrator may be specified by the Employer and accepted in writing by
each Administrator. In the event that no such delegation is made by the
Employer, the Administrators may allocate the responsibilities among themselves,
in which event the Administrators shall notify the Employer and the Trustee in
writing of such action and specify the responsibilities of each Administrator.
The Trustee thereafter shall accept and rely upon any documents executed by the
appropriate Administrator until such time as the Employer or the Administrators
file with the Trustee a written revocation of such designation.
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to administer the Plan for
the exclusive benefit of the Participants and their Beneficiaries, subject to
the specific terms of the Plan. The Administrator shall administer the Plan in
accordance with its terms and shall have the power and discretion to construe
the terms of the Plan and determine all questions arising in connection with the
administration, interpretation, and application of the Plan. Any such
determination by the Administrator shall be conclusive and binding upon all
persons. The Administrator may establish procedures, correct any defect, supply
any information, or reconcile any inconsistency in such manner and to such
extent as shall be deemed necessary or advisable to carry out the purpose of the
Plan, provided, however, that any procedure, discretionary act, interpretation
or construction shall be done in a nondiscriminatory manner based upon uniform
principles consistently applied and shall be consistent with the intent that the
Plan shall continue to be deemed a qualified plan under the terms of Code
Section 401(a), and shall comply with the terms of the Act and all regulations
issued pursuant thereto. The Administrator shall have all powers necessary or
appropriate to accomplish his duties under this Plan.
The Administrator shall be charged with the duties of the general administration
of the Plan, including, but not limited to, the following:
(a) the discretion to determine all questions relating to the eligibility
of Employees to participate or remain a Participant hereunder and to
receive benefits under the Plan;
(b) to compute, certify, and direct the Trustee with respect to the amount
and the kind of benefits to which any Participant shall be entitled
hereunder;
(c) to authorize and direct the Trustee with respect to all
nondiscretionary or otherwise directed disbursements from the Trust
Fund;
(d) to maintain all necessary records for the administration of the Plan;
(e) to interpret the provisions of the Plan and to make and publish such
rules for regulation of the Plan as are consistent with the terms
hereof;
(f) to determine the size and type of any Contract to be purchased from any
Insurer, and to designate the Insurer from which such Contract shall be
purchased;
(g) to compute and certify to the Employer and to the Trustee from time to
time the sums of money necessary or desirable to be contributed to
the Trust Fund;
(h) to consult with the Employer and the Trustee regarding the short and
long-term liquidity needs of the Plan in order that the Trustee can
exercise any investment discretion in a manner designed to accomplish
specific objectives;
(i) to prepare and distribute to Employees a procedure for notifying
Participants and Beneficiaries of their rights to elect Joint and
Survivor Annuities and Pre-Retirement Survivor Annuities if required
by the Code and Regulations thereunder;
(j) to prepare and implement a procedure to notify Eligible Employees that
they may elect to have a portion of their Compensation deferred or paid
to them in cash;
(k) to assist any Participant regarding his rights, benefits, or elections
available under the Plan.
2.7 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken and shall keep all
other books of account, records, and other data that may be necessary for proper
administration of the Plan and shall be responsible for supplying all
information and reports to the Internal Revenue Service, Department of Labor,
Participants, Beneficiaries and others as required by law.
2.8 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the Administrator, may
appoint counsel, specialists, advisers, and other persons as the Administrator
or the Trustee deems necessary or desirable in connection with the
administration of this Plan.
2.9 INFORMATION FROM EMPLOYER
To enable the Administrator to perform his functions, the Employer
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shall supply full and timely information to the Administrator on all matters
relating to the Compensation of all Participants, their Hours of Service, their
Years of Service, their retirement, death, disability, or termination of
employment, and such other pertinent facts as the Administrator may require; and
the Administrator shall advise the Trustee of such of the foregoing facts as may
be pertinent to the Trustee's duties under the Plan. The Administrator may rely
upon such information as is supplied by the Employer and shall have no duty or
responsibility to verify such information.
2.10 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust Fund unless paid by
the Employer. Such expenses shall include any expenses incident to the
functioning of the Administrator, including, but not limited to, fees of
accountants, counsel, and other specialists and their agents, and other costs of
administering the Plan. Until paid, the expenses shall constitute a liability of
the Trust Fund. However, the Employer may reimburse the Trust Fund for any
administration expense incurred. Any administration expense paid to the Trust
Fund as a reimbursement shall not be considered an Employer contribution.
2.11 MAJORITY ACTIONS
Except where there has been an allocation and delegation of administrative
authority pursuant to Section 2.5, if there shall be more than one
Administrator, they shall act by a majority of their number, but may authorize
one or more of them to sign all papers on their behalf.
2.12 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing with the
Administrator. Written notice of the disposition of a claim shall be furnished
to the claimant within 90 days after the application is filed. In the event the
claim is denied, the reasons for the denial shall be specifically set forth
in the notice in language calculated to be understood by the claimant, pertinent
provisions of the Plan shall be cited, and, where appropriate, an explanation as
to how the claimant can perfect the claim will be provided. In addition, the
claimant shall be furnished with an explanation of the Plan's claims review
procedure.
2.13 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of either, who has been denied a
benefit by a decision of the Administrator pursuant to Section 2.12 shall be
entitled to request the Administrator to give further consideration so his claim
by filing with the Administrator a written request for a hearing. Such request,
together with a written statement of the reasons why the claimant believes his
claim should be allowed, shall be filed with the Administrator no later than 60
days after receipt of the written notification provided for in Section 2.12. The
Administrator shall then conduct a hearing within the next 60 days, at which the
claimant may be represented by an attorney or any other representative of his
choosing and expense and at which the claimant shall have an opportunity to
submit written and oral evidence and arguments in support of his claim. At the
hearing (or prior thereto upon 5 business days written notice to the
Administrator) the claimant or his representative shall have an opportunity to
review all documents in the possession of the Administrator which are pertinent
to the claim at issue and its disallowance. Either the claimant or the
Administrator may cause a court reporter to attend the hearing and record the
proceedings. In such event, a complete written transcript of the proceedings
shall be furnished to both parties by the court reporter. The full expense of
any such court reporter and such transcripts shall be borne by the party causing
the court reporter to attend the hearing. A final decision as to the allowance
of the claim shall be made by the Administrator within 60 days of receipt of the
appeal (unless there has been an extension of 60 days due to special
circumstances, provided the delay and the special circumstances occasioning it
are communicated to the claimant within the 60 day period). Such communication
shall be written in a manner calculated to be understood by the claimant and
shall include specific reasons for the decision and specific references to the
pertinent Plan provisions on which the decision is based.
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee shall be eligible to participate hereunder on the date he
has satisfied the requirements specified in the Adoption Agreement.
3.2 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee who has become eligible to be a Participant shall become a
Participant effective as of the day specified in the Adoption Agreement.
In the event an Employee who has satisfied the Plan's eligibility requirements
and would otherwise have become a Participant shall go from a classification of
a noneligible Employee to an Eligible Employee, such Employee shall become a
Participant as of the date he becomes an Eligible Employee.
In the event an Employee who has satisfied the Plan's eligibility requirements
and would otherwise become a Participant shall go from a classification of an
Eligible Employee to a noneligible Employee and becomes ineligible to
participate and has not incurred a 1-Year Break in Service, such Employee shall
participate in the Plan as of the date he returns to an eligible class of
Employees. If such Employee does incur a 1-Year Break in Service, eligibility
will be determined under the Break in Service rules of the Plan.
3.3 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each Employee for
participation in the Plan based upon information furnished by the Employer. Such
determination shall be conclusive and binding upon all persons, as long as the
same is made pursuant to the Plan and the Act. Such determination shall be
subject to review per Section 2.13.
3.4 TERMINATION OF ELIGIBILITY
In the event a Participant shall go from a classification of an Eligible
Employee to an ineligible Employee, such Former Participant shall continue to
vest in his interest in the Plan for each Year of Service completed while a
noneligible Employee, until such time as his Participant's Account shall be
forfeited or distributed pursuant to the terms of the Plan. Additionally, his
interest in the Plan shall continue to share in the earnings of the Trust Fund.
3.5 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be included as a Participant in
the Plan is erroneously omitted and discovery of such omission is not made until
after a contribution by his Employer for the year has been made, the Employer
shall make a subsequent contribution, if necessary after the application of
Section 4.4(e), so that the omitted Employee receives a total amount which the
said Employee would have received had he not been omitted. Such contribution
shall be made regardless of whether or not it is deductible in whole or in part
in any taxable year under applicable provisions of the Code.
3.6 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have been included as a
Participant in the Plan is erroneously included and discovery of such incorrect
inclusion is not made until after a contribution for the year has been made, the
Employer shall not be entitled to recover the contribution made with respect to
the ineligible person regardless of whether or not a deduction is allowable
with respect to such contribution. In such event, the amount contributed with
respect to the ineligible person shall constitute a Forfeiture for the Plan Year
in which the discovery is made.
3.7 ELECTION NOT TO PARTICIPATE
An Employee may, subject to the approval of the Employer, elect voluntarily not
to participate in the Plan. The election not to participate must be communicated
to the Employer, in writing, at least thirty (30) days before the beginning of a
Plan Year. For Standardized
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Plans, a Participant or an Eligible Employee may not elect not to participate.
Furthermore, the foregoing election not to participate shall not be available
with respect to partners in a partnership.
3.8 CONTROL OF ENTITIES BY OWNER-EMPLOYEE
(a) If this Plan provides contributions or benefits for one or more Owner-
Employees who control both the business for which this Plan is
established and one or more other entities, this Plan and the plan
established for other trades or businesses must, when looked at as a
single Plan, satisfy Code Sections 401(a) and (d) for the Employees of
this and all other entities.
(b) If the Plan provides contributions or benefits for one or more Owner-
Employees who control one or more other trades or businesses, the
employees of the other trades or businesses must be included in a plan
which satisfies Code Sections 401(a) and (d) and which provides
contributions and benefits not less favorable than provided for Owner-
Employees under this Plan.
(c) If an individual is covered as an Owner-Employee under the plans of two
or more trades or businesses which are not controlled and the individual
controls a trade or business, then the benefits or contributions of the
employees under the plan of the trades or businesses which are controlled
must be as favorable as those provided for him under the most favorable
plan of the trade or business which is not controlled.
(d) For purposes of the preceding paragraphs, an Owner-Employee, or two or
more Owner-Employees, will be considered to control an entity if the
Owner-Employee, or two or more Owner-Employees together.
(1) own the entire interest in an unincorporated entity, or
(2) in the case of a partnership, own more than 50 percent of either the
capital interest or the profits interest in the partnership.
(e) For purposes of the preceding sentence, an Owner-Employee, or two or more
Owner-Employees shall be treated as owning any interest in a partnership
which is owned, directly or indirectly, by a partnership which such
Owner-Employee, or such two or more Owner-Employees, are considered to
control within the meaning of the preceding sentence.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
For each Plan Year, the Employer shall contribute to the Plan:
(a) The amount of the total salary reduction elections of all Participants
made pursuant to Section 4.2(a), which amount shall be deemed an
Employer's Elective Contribution, plus
(b) If specified in E3 of the Adoption Agreement, a matching contribution
equal to the percentage specified in the Adoption Agreement of the
Deferred Compensation of each Participant eligible to share in the
allocations of the matching contribution, which amount shall be deemed an
Employer's Non-Elective or Elective Contribution as selected in the
Adoption Agreement, plus
(c) If specified in E4 of the Adoption Agreement, a discretionary amount, if
any, which shall be deemed an Employer's Non-Elective Contribution, plus
(d) If specified in E5 of the Adoption Agreement, a Qualified Non-Elective
Contribution.
(e) Notwithstanding the foregoing, however, the Employer's contributions for
any Fiscal Year shall not exceed the maximum amount allowable as a
deduction to the Employer under the provisions of Code Section 404. All
contributions by the Employer shall be made in cash or in such property
as is acceptable to the Trustee.
(f) Except, however, to the extent necessary to provide the top heavy minimum
allocations, the Employer shall make a contribution even if it exceeds
current or accumulated Net Profit or the amount which is deductible under
Code Section 404.
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION
(a) Each Participant may elect to defer his Compensation which would have
been received in the Plan Year, but for the deferral election, subject to
the limitations of this Section and the Adoption Agreement. A deferral
election (or modification of an earlier election) may not be made with
respect to Compensation which is currently available on or before the
date the Participant executed such election, or if later, the latest of
the date the Employer adopts this cash or deferred arrangement, or the
date such arrangement first became effective. Any elections made pursuant
to this Section shall become effective as soon as is administratively
feasible.
Additionally, if elected in the Adoption Agreement, each Participant may
elect to defer and have allocated for a Plan Year all or a portion of any
cash bonus attributable to services performed by the Participant for the
Employer during such Plan Year and which would have been received by the
Participant on or before two and one-half months following the end of the
Plan Year but for the deferral. A deferral election may not be made with
respect to cash bonuses which are currently available on or before the
date the Participant executed such election. Notwithstanding the
foregoing, cash bonuses attributable to services performed by the
Participant during a Plan Year but which are to be paid to the
Participant later than two and one-half months after the close of such
Plan Year will be subjected to whatever deferral election is in effect at
the time such cash bonus would have otherwise been received.
The amount by which Compensation and/or cash bonuses are reduced shall be
that Participant's Deferred Compensation and be treated as an Employer
Elective Contribution and allocated to that Participant's Elective
Account.
Once made, a Participant's election to reduce Compensation shall remain
in effect until modified or terminated. Modifications may be made as
specified in the Adoption Agreement, and terminations may be made at any
time. Any modification or termination of an election will become
effective as soon as is administratively feasible.
(b) The balance in each Participant's Elective Account shall be fully Vested
at all times and shall not be subject to Forfeiture for any reason.
(c) Amounts held in the Participant's Elective Account and Qualified Non-
Elective Account may be distributable as permitted under the Plan, but in
no event prior to the earlier of:
(1) a Participant's termination of employment. Total and Permanent
Disability, or death;
(2) a Participant's attainment of age 59 1/2;
(3) the proven financial hardship of a Participant, subject to the
limitations of Section 6.11;
(4) the termination of the Plan without the existence at the time of Plan
termination of another defined contribution plan (other than an
employee stock ownership plan as defined in Code Section 4975(e)(7))
or the
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establishment of a successor defined contribution plan (other than an
employee stock ownership plan as defined in Code Section 4975(e)(7))
by the Employer or an Affiliated Employer within the period ending
twelve months after distribution of all assets from the Plan
maintained by the Employer;
(5) the date of the sale by the Employer to an entity that is not an
Affiliated Employer of substantially all of the assets (within the
meaning of Code Section 409(d)(2)) with respect to a Participant who
continues employment with the corporation acquiring such assets; or
(6) the date of the sale by the Employer or an Affiliated Employer of its
interest in a subsidiary (within the meaning of Code Section
409(d)(3)) to an entity that is not an Affiliated Employer with
respect to a Participant who continues employment with such
subsidiary.
(d) In any Plan Year beginning after December 31, 1987, a Participant's
Deferred Compensation made under this Plan and all other plans, contracts
or arrangements of the Employer maintaining this Plan shall not exceed
the limitation imposed by Code Section 402(g), as in effect for the
calendar year in which such Plan Year began. If such dollar limitation is
excluded solely from elective deferrals under this Plan or any other Plan
maintained by the Employer, a Participant will be deemed to have notified
the Administrator of such excess amount which shall be distributed in a
manner consistent with Section 4.2(f). This dollar limitation shall be
adjusted annually pursuant to the method provided in Code Section 415(d)
in accordance with Regulations.
(e) In the event a Participant has received a hardship distribution pursuant
to Regulation 1.401(k)-1(d)(2)(iii)(B) from any other plan maintained by
the Employer or from his Participant's Elective Account pursuant to
Section 6.11(c), then such Participant shall not be permitted to elect to
have Deferred Compensation contributed to the Plan on his behalf for a
period of twelve (12) months following the receipt of the distribution.
Furthermore, the dollar limitation under Code Section 402(g) shall be
reduced with respect to the Participant's taxable year following the
taxable year in which the hardship distribution was made, by the amount
of such Participant's Deferred Compensation, if any, made pursuant to
this Plan (and any other plan maintained by the Employer) for the taxable
year of the hardship distribution.
(f) If a Participant's Deferred Compensation under this Plan together with
any elective deferrals (as defined in Regulation 1.402(g)-1(b)) under
another qualified cash or deferred arrangement (as defined in Code
Section 401(k)), a simplified employee pension (as defined in Code
Section 408(k)), a salary reduction arrangement (within the meaning of
Code Section 3121(a)(5)(D)), a deferred compensation plan under Code
Section 457, or a trust described in Code Section 501(c)(l8) cumulatively
exceed the limitation imposed by Code Section 402(g) (as adjusted
annually in accordance with the method provided in Code Section 415(d)
pursuant to Regulations) for such Participant's taxable year, the
Participant may, not later than March 1st following the close of his
taxable year, notify the Administrator in writing of such excess and
request that his Deferred Compensation under this Plan be reduced by an
amount specified by the Participant. In such event, the Administrator
shall direct the Trustee to distribute such excess amount (and airy
Income allocable to such excess amount) to the Participant not later than
the first April 15th following the close of the Participant's taxable
year. Distributions in accordance with this paragraph may be made for any
taxable year of the Participant which begins after December 31, 1986. Any
distribution of less than the entire amount of Excess Deferred
Compensation and Income shall be treated as a pro rata distribution of
Excess Deferred Compensation and Income. The amount distributed shall not
exceed the Participant's Deferred Compensation under the Plan for the
taxable year. Any distribution on or before the last day of the
Participant's taxable year must satisfy each of the following conditions.
(1) the Participant shall designate the distribution as Excess Deferred
Compensation;
(2) the distribution must be made after the date on which the Plan
received the Excess Deferred Compensation; and
(3) the Plan must designate the distribution as a distribution of Excess
Deferred Compensation.
(4) Any distribution made pursuant to this Section shall be made first
from unmatched Deferred Compensation and, thereafter, simultaneously
from Deferred Compensation which is matched and matching
contributions which relate to such Deferred Compensation. However,
any such matching contributions which are not Vested shall be
forfeited in lieu of being distributed.
Any distribution under this Section shall be made first from unmatched
Deferred Compensation and, thereafter, simultaneously from Deferred
Compensation which is matched and matching contributions which relate
to such Deferred Compensation. However, any such matching contributions
which are not Vested shall be forfeited in lieu of being distributed.
For the purpose of this Section, "Income" means the amount of income or
loss allocable to a Participant's Excess Deferred Compensation and shall
be equal to the sum of the allocable gain or loss for the taxable year
of the Participant and the allocable gain or loss for the period between
the end of the taxable year of the Participant and the date of
distribution ("gap period"). The income or loss allocable to each such
period is calculated separately and is determined by multiplying the
income or loss allocable to the Participant's Deferred Compensation for
the respective period by a fraction. The numerator of the fraction is
the Participant's Excess Deferred Compensation for the taxable year of
the Participant. The denominator is the balance, as of the last day of
the respective period, of the Participant's Elective Account that is
attributable to the Participant's Deferred Compensation reduced by the
gain allocable to such total amount for the respective period and
increased by the loss allocable to such total amount for the respective
period.
In lieu of the "fractional method" described above, a "safe harbor
method" may be used to calculate the allocable income or loss for the
"gap period". Under such "safe harbor method", allocable income or loss
for the "gap period" shall be deemed to equal ten percent (10%) of the
income or loss allocable to a Participant's Excess Deferred Compensation
for the taxable year of the Participant multiplied by the number of
calendar months in the "gap period". For purposes of determining the
number of calendar months in the "gap period", a distribution occurring
on or before the fifteenth day of the month shall be treated as having
been made on the last day of the preceding month and a distribution
occurring after such fifteenth day shall be treated as having been made
on the first day of the next subsequent month.
Income or loss allocable to any distribution of Excess Deferred
Compensation on or before the last day of the taxable year of the
Participant shall be calculated from the
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first day of the taxable year of the Participant to the date on which the
distribution is made pursuant to either the "fractional method" or the
"safe harbor method".
Notwithstanding the above, for the 1987 calendar year, and for Plan Years
beginning on or after the date this Plan is adopted. Income during the
"gap period" shall not be taken into account.
(g) Notwithstanding Section 4.2(f) above, a Participant's Excess Deferred
Compensation shall be reduced, but not below zero, by any distribution
and/or recharacterization of Excess Contributions pursuant to Section
4.6(a) for the Plan Year beginning with or within the taxable year of the
Participant.
(h) At Normal Retirement Date, or such other date when the Participant shall
be entitled to receive benefits, the fair market value of the
Participant's Elective Account shall be used to provide benefits to the
Participant or his Beneficiary.
(i) Employer Elective Contributions made pursuant to this Section may be
segregated into a separate account for each Participant in a federally
insured savings account, certificate of deposit in a bank or savings and
loan association, money market certificate, or other short-term debt
security acceptable to the Trustee until such time as the allocations
pursuant to Section 4.4 have been made.
(j) The Employer and the Administrator shall adopt a procedure necessary to
implement the salary reduction elections provided for herein.
4.3 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION
The Employer shall generally pay to the Trustee its contribution to the Plan
for each Plan Year within the time prescribed by law, including extensions of
time, for the filing of the Employer's federal income tax return for the Fiscal
Year.
However, Employer Elective Contributions accumulated through payroll deductions
shall be paid to the Trustee as of the earliest date on which such contributions
can reasonably be segregated from the Employer's general assets, but in any
event within ninety (90) days from the date on which such amounts would
otherwise have been payable to the Participant in cash. The provisions of
Department of Labor regulations 2510.3-102 are incorporated herein by reference.
Furthermore, any additional Employer contributions which are allocable to the
Participant's Elective Account for a Plan Year shall be paid to the Plan no
later than the twelve-month period immediately following the close of such Plan
Year.
4.4 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and maintain an account in the name of
each Participant to which the Administrator shall credit as of each
Anniversary Date, or other valuation date, all amounts allocated to each
such Participant as set forth herein.
(b) The Employer shall provide the Administrator with all information
required by the Administrator to make a proper allocation of the
Employer's contributions for each Plan Year. Within a reasonable period
of time after the date of receipt by the Administrator of such
information, the Administrator shall allocate such contribution as
follows:
(1) With respect to the Employer's Elective Contribution made pursuant to
Section 4.1(a), to each Participant's Elective Account in an amount
equal to each such Participant's Deferred Compensation for the year.
(2) With respect to the Employer's Matching Contribution made pursuant to
Section 4.1(b), to each Participant's Account or Participant's
Elective Account as selected in E3 of the Adoption Agreement, in
accordance with Section 4.1(b).
Except, however, a Participant who is not credited with a Year of
Service during any Plan Year shall or shall not share in the
Employer's Matching Contribution for that year as provided in E3 of
the Adoption Agreement. However, for Plan Years beginning after 1989,
if this is a standardized Plan, a Participant shall share in the
Employer's Matching Contribution regardless of Hours of Service.
(3) With respect to the Employer's Non-Elective Contribution made
pursuant to Section 4.1(c), to each Participant's Account in
accordance with the provisions of E4 of the Adoption Agreement.
However, if an integrated allocation formula is selected at E4 of the
Adoption Agreement, then such contribution shall be allocated to each
Participant's Combined Account in a dollar amount equal to 5.7% of
the sum of each Participant's total Compensation plus Excess
Compensation. If the Employer does not contribute such amount for all
Participants, each Participant will be allocated a share of the
contribution in the same proportion that his total Compensation plus
his total Excess Compensation for the Plan Years bears to the total
Compensation plus the total Excess Compensation of all Participants
for that year. The balance of the contribution, if any, will be
allocated in the same proportion that his total Compensation bears to
the total Compensation of all Participant's eligible to share in the
allocation.
Regardless of the preceding, 4.3% shall be substituted for 5.7% above
if Excess Compensation is based on more than 20% and less than or
equal to 80% of the Taxable Wage Base. If Excess Compensation is
based on less than 100% and more than 80% of the Taxable Wage Base,
then 5.4% shall be substituted for 5.7% above.
(4) With respect to the Employer's Qualified Non-Elective Contribution
made pursuant to Section 4.1(d), to each Participant's Qualified
Non-Elective Contribution Account in the same proportion that each
such Participant's Compensation for the year bears to the total
Compensation of all Participants for such year.
(5) Regardless of the preceding, a Participant who is not credited with a
Year of Service during a Plan Year shall not share in the allocation
of the Employer's Non-Elective Contribution made pursuant to Section
4.1(c) and the Employer's Qualified Non-Elective Contribution made
pursuant to Section 4.1(d), unless reduced pursuant to Section
4.4(h). However, for Plan Years beginning after 1989, for a
standardized plan, and if elected in the non-standardized Adoption
Agreement, a Participant shall share in the allocation of such
contributions regardless of whether a Year of Service was completed
during the Plan Year.
(c) As of each Anniversary Date or other valuation date, before allocation of
Employer contributions and Forfeitures, any earnings or losses (net
appreciation or net depreciation) of the Trust Fund shall be allocated
in the same proportion that each Participant's and Former Participant's
nonsegregated accounts bear to the total of all Participants' and Former
Participants' nonsegregated accounts as of such date. If any
nonsegregated account of a Participant has been distributed prior to the
Anniversary Date or other valuation date subsequent to a Participant's
termination of employment, no earnings or losses shall be credited to
such account.
Notwithstanding the above, with respect to contributions made to a 401(k)
Plan after the previous Anniversary Date
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or allocation date, the method specified in the Adoption Agreement shall
be used.
(d) Participants' Accounts shall be debited for any insurance or annuity
premiums paid, if any, and credited with any dividends or interest
received on insurance contracts.
(e) As of each Anniversary Date any amounts which became Forfeitures since
the last Anniversary Date shall first be made available to reinstate
previously forfeited account balances of Former Participants, if any, in
accordance with Section 6.4(g)(2) or be used to satisfy any contribution
that may be required pursuant to Section 3.5 and/or 6.9. The remaining
Forfeitures, if any, shall be treated in accordance with the Adoption
Agreement. Provided, however, that in the event the allocation of
Forfeitures provided herein shall cause the "annual addition" (as defined
in Section 4.9) to any Participant's Account to exceed the amount
allowable by the Code, the excess shall be reallocated in accordance
with Section 4.10. Except, however, for any Plan Year beginning prior to
January 1, 1990, and if elected in the non-standardized Adoption
Agreement for any Plan Year beginning on or after January 1, 1990, a
Participant who performs less than a Year of Service during any Plan Year
shall not share in the Plan Forfeitures for that year, unless there is a
Short Plan Year or a contribution required pursuant to Section 4.4(h).
(f) Minimum Allocations Required for Top Heavy Plan Years: Notwithstanding
the foregoing, for any Top Heavy Plan Year, the sum of the Employer's
contributions and Forfeitures allocated to the Participant's Combined
Account of each Non-Key Employee shall be equal to at least three percent
(3%) of such Non-Key Employee's "415 Compensation" (reduced by
contributions and forfeitures, if any, allocated to each Non-Key Employee
in any defined contribution plan included with this plan in a Required
Aggregation Group). However if (i) the sum of the Employer's
contributions and Forfeitures allocated to the Participant's Combined
Account of each Key Employee for such Top Heavy Plan Year is less than
three percent (3%) of each Key Employee's "415 Compensation" and (ii)
this Plan is not required to be included in an Aggregation Group to
enable a defined benefit plan to meet the requirements of Code Section
401(a)(4) or 410, the sum of the Employer's contributions and Forfeitures
allocated to the Participant's Combined Account of each Non-Key Employee
shall be equal to the largest percentage allocated to the Participant's
Combined Account of any Key Employee. However, for Plan Years beginning
after December 31, 1988, in determining whether a Non-Key Employee has
received the required minimum allocation, such Non-Key Employee's
Deferred Compensation and matching contributions used to satisfy the
"Actual Deferral Percentage" test pursuant to Section 4.5(a) or the
"Actual Contribution Percentage" test of Section 4.7(a) shall not be
taken into account.
If this is an integrated Plan, then for any Top Heavy Plan Year the
Employer's contribution shall be allocated as follows:
(1) An amount equal to 3% multiplied by each Participant's Compensation
for the Plan Year shall be allocated to each Participant's Account.
If the Employer does not contribute such amount for all Participants,
the amount shall be allocated to each Participant's Account in the
same proportion that his total Compensation for the Plan Year bears
to the total Compensation of all Participants for such year.
(2) The balance of the Employer's contribution over the amount allocated
under subparagraph (1) hereof shall be allocated to each
Participant's Account in a dollar amount equal to 3% multiplied by a
Participant's Excess Compensation. If the Employer does not
contribute such amount for all Participants, each Participant will be
allocated a share of the contribution in the same proportion that his
Excess Compensation bears to the total Excess Compensation of all
Participants for that year.
(3) The balance of the Employer's contribution over the amount allocated
under subparagraph (2) hereof shall be allocated to each
Participant's Account in a dollar amount equal to 2.7% multiplied by
the sum of each Participant's total Compensation plus Excess
Compensation. If the Employer does not contribute such amount for all
Participants, each Participant will be allocated a share of the
contribution in the same proportion that his total Compensation plus
his total Excess Compensation for the Plan Year bears to the total
Compensation plus the total Excess Compensation of all Participants
for that year.
Regardless of the preceding, 1.3% shall be substituted for 2.7% above
if Excess Compensation is based on more than 20% and less than or
equal to 80% of the Taxable Wage Base. If Excess Compensation is
based on less than 100% and more than 80% of the Taxable Wage Base,
then 2.4% shall be substituted for 2.7% above.
(4) The balance of the Employer's contributions over the amount allocated
above, if any, shall be allocated to each Participant's Account in
the same proportion that his total Compensation for the Plan Year
bears to the total Compensation of all Participants for such year.
For each Non-Key Employee who is a Participant in this Plan and
another non-paired defined contribution plan maintained by the
Employer, the minimum 3% allocation specified above shall be provided
as specified in F3 of the Adoption Agreement.
(g) For purposes of the minimum allocations set forth above, the percentage
allocated to the Participant's Combined Account of any Key Employee shall
be equal to the ratio of the sum of the Employer's contributions and
Forfeitures allocated on behalf of such Key Employee divided by the "415
Compensation" for such Key Employee.
(h) For any Top Heavy Plan Year, the minimum allocations set forth above
shall be allocated to the Participant's Combined Account of all Non-Key
Employees who are Participants and who are employed by the Employer on
the last day of the Plan Year, including Non-Key Employees who have (1)
failed to complete a Year of Service; or (2) declined to make mandatory
contributions (if required) or salary reduction contributions to the
Plan.
(i) Notwithstanding anything herein to the contrary, in any Plan Year in
which the Employer maintains both this Plan and a defined benefit pension
plan included in a Required Aggregation Group which is top heavy, the
Employer shall not be required to provide a Non-Key Employee with both
the full separate minimum defined benefit plan benefit and the full
separate defined contribution plan allocations. Therefore, if the
Employer maintains both a Defined Benefit and a Defined Contribution Plan
that are a Top Heavy Group, the top heavy minimum benefits shall be
provided as follows:
Applies if F1b of the Adoption Agreement is selected -
(1) The requirements of Section 2.1 shall apply except that each Non-Key
Employee who is a Participant in this Plan or a Money Purchase Plan
and who is also a Participant in the Defined Benefit Plan shall
receive a minimum allocation of five percent (5%) of such
13
<PAGE>
Participant's "415 Compensation" from the applicable Defined
Contribution Plan(s).
(2) For each Non-Key Employee who is a Participant only in the Defined
Benefit Plan, the Employer will provide a minimum non-integrated
benefit in the Defined Benefit Plan equal to 2% of his highest five
consecutive year average "415 Compensation" for each Year of Service
while a Participant in the Plan, in which the Plan is top heavy, not
to exceed ten.
(3) For each Non-Key Employee who is a Participant only in this Defined
Contribution Plan, the Employer will provide a contribution equal to
3% of his "415 Compensation".
Applies if F1c of the Adoption Agreement is selected -
(4) The minimum allocation specified in Section 4.4(i)(1) shall be 7 1/2%
for years in which the Plan is Top Heavy, but not Super Top Heavy.
(5) The minimum benefit specified in Section 4.4(i)(2) shall be 3% for
years in which the Plan is Top Heavy, but not Super Top Heavy.
(6) The minimum allocation specified in Section 4.4(i)(3) shall be 4% for
years in which the Plan is Top Heavy, but not Super Top Heavy.
(j) For the purposes of this Section, "415 Compensation" shall be limited to
the same dollar limitations set forth in Section 1.9. However, for Plan
Years beginning prior to January 1, 1989, the $200,000 limit shall apply
only for Top Heavy Plan Years and shall not be adjusted.
(k) Notwithstanding anything herein to the contrary, participants who
terminated employment during the Plan Year shall share in the salary
reduction contributions made by the Employer for the year of termination
without regard to the Hours of Service credited.
(l) Notwithstanding anything herein to the contrary (other than Sections
4.4(k) and 6.6(h)(1)), any Participant who terminated employment during
the Plan Year for reasons other than death. Total and Permanent
Disability, or retirement shall or shall not share in the allocations of
the Employer's Matching Contribution made pursuant to Section 4.1(b), the
Employer's Non-Elective Contributions made pursuant to Section 4.1(c).
the Employer's Qualified Non-Elective Contribution made pursuant to
Section 4.1(d), and Forfeitures as provided in the Adoption Agreement.
Notwithstanding the foregoing, for Plan Years beginning after 1989, if
this is a standardized Plan, any such terminated Participant shall share
in such allocations provided the terminated Participant completed more
than 500 Hours of Service.
(m) Notwithstanding anything herein to the contrary, Participants terminating
for reasons of death, Total and Permanent Disability, or retirement shall
share in the allocation of the Employer's Matching Contribution made
pursuant to Section 4.1(b), the Employer's Non-Elective Contributions
made pursuant to Section 4.1(c), the Employer's Qualified Non-Elective
Contribution made pursuant to Section 4.1(d), and Forfeitures as provided
in this Section regardless of whether they completed a Year of Service
during the Plan Year.
(n) If a Former Participant is reemployed after five (5) consecutive 1-Year
Breaks in Service, then separate accounts shall be maintained as follows:
(1) one account for nonforfeitable benefits attributable to
pre-break service; and
(2) one account representing his status in the Plan attributable so
post-break service.
(o) Notwithstanding any election in the Adoption Agreement to the contrary,
if this is a non-standardized Plan that would otherwise fail to meet the
requirements of Code Sections 401(a)(26), 410(b)(1), or 410(b)(2)(A)(i)
and the Regulations, thereunder because Employer matching Contributions
made pursuant so Section 4.1(b). Employer Non-Elective Contributions made
pursuant to Section 4.1(c) or Employer Qualified Non-Elective
Contributions made pursuant to Section 4.1(d) have not been allocated to
a sufficient number or percentage of Participants for a Plan Year, then
the following rules shall apply:
(1) Allocations of the respective contribution and Forfeitures shall
first be made to all active Participants who are employed on the last
day of the Plan Year, regardless of the number of Hours of Service
completed; and
(2) If after application of paragraph (1) above, the applicable test is
still not satisfied, then the group of Participants eligible to share
in the Employer's contribution and Forfeitures for the Plan Year
shall be further expanded so include the minimum number of
Participants who are not actively employed on the last day of the
Plan Year as are necessary to satisfy the applicable test. The
specific Participants who shall become eligible to share shall be
those Participants, when compared to similarly situated Participants,
who have completed the greatest number of Hours of Service in the
Plan Year before terminating employment.
Nothing in this Section shall permit the reduction of a Participant's
accrued benefit. Therefore any amounts that have previously been allocated to
Participants may not be reallocated to satisfy requirements. In such event, the
Employer shall make an additional contribution equal to the amount such affected
Participants would have received had they been included in the allocations, even
if it exceeds the amount which would be deductible under Code Section 404. Any
adjustment to the allocations pursuant to this paragraph shall be considered a
retroactive amendment adopted by the last day of the Plan Year.
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS
(a) Maximum Annual Allocation: For each Plan Year beginning after December
31, 1986, the annual allocation derived from Employer Elective
Contributions and Qualified Non-Elective Contributions to a Participant's
Elective Account and Qualified Non-Elective Account shall satisfy one of
the following tests:
(1) The "Actual Deferral Percentage" for the Highly Compensated
Participant group shall not be more than the "Actual Deferral
Percentage" of the Non-Highly Compensated Participant group
multiplied by 1.25, or
(2) The excess of the "Actual Deferral Percentage" for the Highly
Compensated Participant group over the "Actual Deferral Percentage"
for the Non-Highly Compensated Participant group shall not be more
than two percentage points. Additionally, the "Actual Deferral
Percentage" for the Highly Compensated Participant group shall nor
exceed the "Actual Deferral Percentage" for the Non-Highly
Compensated Participant group multiplied by 2. The provisions of
Code Section 401(k)(3) and Regulation 1.40l(k)-1(b) are incorporated
herein by reference.
However, for Plan Years beginning after December 31, 1988, to prevent
the multiple use of the alternative method described in (2) above and
Code Section 401(m)(9)(A), any Highly Compensated Participant
eligible to make elective deferrals pursuant to Section 4.2 and to
make Employee contributions or to receive matching contributions
under this Plan or under any other plan maintained by the Employer or
an Affil-
14
<PAGE>
iated Employer shall have his actual contribution ratio reduced
pursuant to Regulation 1.401(m)-2, the provisions of which are
incorporated herein by reference.
(b) For the purposes of this Section "Actual Deferral Percentage" means,
with respect to the Highly Compensated Participant group and Non-
Highly Compensated Participant group for a Plan Year, the average of
the ratios, calculated separately for each Participant in such group,
of the amount of Employer Elective Contributions and Qualified Non-
Elective Contributions allocated to each Participants Elective
Account and Qualified Non-Elective Account for such Plan Year, to
such Participant's "414(s) Compensation" for such Plan Year. The
actual deferral ratio for each Participant and the "Actual Deferral
Percentage" for each group, for Plan Years beginning after December
31, 1988, shall be calculated to the nearest one-hundredth of one
percent of the Participant's "414(s) Compensation". Employer Elective
Contributions allocated to each Non-Highly Compensated Participant's
Elective Account shall be reduced by Excess Deferred Compensation to
the extent such excess amounts are made under this Plan or any plan
maintained by the Employer.
(c) For the purpose of determining the actual deferral ratio of a Highly
Compensated Participant who is subject to the Family Member
aggregation rules of Code Section 414(a)(6) because such Participant
is either a "five percent owner" of the Employer or one of ten
percent (10) Highly Compensated Employees paid the greatest "415
Compensation" during the year, the following shall apply:
(1) The combined actual deferral ratio for the family group (which
shall be determined by aggregating Employer Elective
Contributions and "414(s) Compensation" of all eligible Family
Members (including Highly Compensated Participants). However, in
applying the $200,000 limit to "414(s) Compensation" for Plan
Years beginning after December 31, 1988. Family Members shall
include only the affected Employee's spouse and any lineal
descendants who have not attained age 19 before the close of the
Plan Year.
(2) The Employer Elective Contributions and "414(s) Compensation" of
all Family Members shall be disregarded for purposes of
determining the "Actual Deferral Percentage" of the Non-Highly
Compensated Participant group except to the extent taken into
account in paragraph (1) above.
(3) If a Participant is required to be aggregated as a member of more
than one family group in a plan, all Participants who are members
of those family groups that include the Participant are
aggregated as one family group in accordance with paragraphs
(1)and (2) above.
(d) For the purposes of Section 4.5(a) and 4.6, a Highly Compensated
Participant and a Non-Highly Compensated Participant shall include any
Employee eligible to make a deferral election pursuant to Section 4.2,
whether or not such deferral election was made or suspended pursuant to
Section 4.2.
(e) For the purposes of this Section and Code Sections 401(a)(4), 410(b) and
401(k), if two or more plans which include cash or deferred arrangements
are considered one plan for the purposes of Code Section 401(a)(4) or
410(b) (other than Code Section 401(b)(2)(A)(ii) as in effect for Plan
Years beginning after December 31, 1988), the cash, or deferred
arrangements included in such plans shall be treated as one arrangement.
In addition, two or more cash or deferred arrangements may be considered
as a single arrangement for purposes of determining whether or not such
arrangements satisfy Code Sections 401(a)(4), 410(b) and 401(k). In such
a case, the cash or deferred arrangements included in such plans and the
plans including such arrangements shall be treated as one arrangement and
as one plan for purposes of this Section and Code Sections 401(a)(4),
410(b) and 401(k). For plan years beginning after December 31, 1989,
plans may be aggregated under this paragraph (e) only if they have the
same plan years.
Notwithstanding the above, for Plan Years beginning after December 31,
1988, an employee stock ownership plan described in Code Section
4975(e)(7) may not be combined with this Plan for purposes of determining
whether the employee stock ownership plan or this Plan satisfies this
Section and Code Sections 401(a)(4), 410(b) and 401(k).
(f) For the purposes of this Section, if a Highly Compensated Participant is
a Participant under two (2) or more cash or deferred arrangements (other
than a cash or deferred arrangement which is part of an employee stock
ownership plan as defined in Code Section 4975(e)(7) for Plan Years
beginning after December 31, 1988) of the Employer or an Affiliate
Employer, all such cash or deferred arrangements shall be treated as one
cash or deferred arrangement for the purpose of determining the actual
deferral ratio with respect to such Highly Compensated Participant.
However, for Plan Years beginning after December 31, 1988, if the cash or
deferred arrangements have different Plan Years, this paragraph shall be
applied by treating all cash or deferred arrangements ending with or
within the same calendar year as a single arrangement.
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
In the event that the initial allocations of the Employer's Elective
Contributions and Qualified Non-Elective Contributions made pursuant to Section
4.4 do not satisfy one of the tests set forth in Section 4.5, for Plan Years
beginning after December 31, 1986, the Administrator shall adjust Excess
Contributions pursuant to the options set forth be1ow:
(a) On or before the fifteenth day of the third month following the end of
each Plan Year, the Highly Compensated Participant having the highest
actual deferral ratio shall have his portion of Excess Contributions
distributed to him and/or at his election recharacterized as a voluntary
Employee contribution pursuant to Section 4.12 until one of the tests set
forth in Section 4.5 is satisfied, or until his actual deferral ratio
equals the actual deferral ratio of the Highly Compensated Participant
having the second highest actual deferral ratio. This process shall
continue until one of the tests set forth in Section 4.5 is satisfied.
For each Highly Compensated Participant, the amount of Excess
Contributions is equal to the Elective Contributions and Qualified Non-
Elective Contributions made on behalf of such Highly Compensated
Participant (determined prior to the application of this paragraph) minus
the amount determined by multiplying the Highly Compensated Participant's
actual deferral ratio (determined after application of this paragraph) by
his "414(s) Compensation". However, in determining the amount of Excess
Contributions to be distributed and/or recharacterized with respect to an
affected Highly Compensated Participant as determined herein, such amount
shall be reduced by any Excess Deferred Compensation previously
distributed to such affected Highly Compensation Participant for his
taxable year ending with or within such Plan Year. Any distribution and/
or recharacterization of Excess Contributions shall be made in accordance
with the following:
(1) With respect to the distribution of Excess Contributions pursuant to
(a) above, such distribution:
15
<PAGE>
(i) may be postponed but not later than the close of the Plan Year
following the Plan Year to which they are allocable:
(ii) shall be made first from unmatched Deferred Compensation and,
thereafter, simultaneously from Deferred Compensation which is
matched and matching contributions which relate to such
Deferred Compensation. However, any such matching contributions
which are not Vested shall be forfeited in lieu of being
distributed.
(iii) shall be made from Qualified Non-Elective Contributions only to
the extent that Excess Contributions exceed the balance in the
Participants Elective Account attributable to Deferred
Compensation and Employer marching contributions.
(iv) shall be adjusted for Income: and
(v) shall be designated by the Employer as a distribution of Excess
Contributions (and Income).
(2) With respect to the recharacterization of Excess Contributions
pursuant to (a) above, such recharacterized amounts:
(i) shall be deemed to have occurred on the date on which the last
of those Highly Compensated Participants with Excess
Contributions to be recharacterized is notified of the
recharacterization and the tax consequences of such
recharacterization;
(ii) for Plan Years ending on or before August 8, 1988, may be
postponed but not later than October 24, 1988;
(iii) shall not exceed the amount of Deferred Compensation on behalf
of any Highly Compensated Participant for any Plan Year;
(iv) shall be treated as voluntary Employee contributions for
purposes of Code Section 401(a)(4) and Regulation l.401(k)-
l(b). However, for purposes of Sections 2.2 and 4.4(f);
recharacterized Excess Contributions continue to be treated as
Employer contributions that are Deferred Compensation. For Plan
Years beginning after December 31, 1988. Excess Contributions
recharacterized as voluntary Employee contributions shall
continue to be nonforfeitable and subject to the same
distribution rules provided for in Section 4.9(f);
(v) which relate to Plan Years ending on or before October 24,
1988, may be treated as either Employer contributions or
voluntary Employee contributions and therefore shall not be
subject to the restrictions of Section 4.2(c);
(vi) are not permitted if the amount recharacterized plus voluntary
Employee contributions actually made by such Highly Compensated
Participant, exceed the maximum amount of voluntary Employee
contributions (determined prior to application of Section
4.7(a)) that such Highly Compensated Participant is permitted
to make under the Plan in the absence of recharacterization;
(vii) shall be adjusted for Income.
(3) Any distribution and/or recharacterization of less than the entire
amount of Excess Contributions shall be treated as a pro rata
distribution and/or recharacterization of Excess Contributions and
Income.
(4) The determination and correction of Excess Contributions of a Highly
Compensated Participant whose actual deferral ratio is determined
under the family aggregation rules shall be accomplished by reducing
the actual deferral ratio as required herein and the Excess
Contributions for the family unit shall be allocated among the Family
Members in proportion to the Elective Contributions of each Family
Member that were combined to determine the group actual deferral
ratio.
(b) Within twelve (12) months after the end of the Plan Year, the Employer
shall make a special Qualified Non-Elective Contribution on behalf of
Non-Highly Compensated Participants in an amount sufficient to satisfy
one of the tests set forth in Section 4.5(a). Such contribution shall be
allocated to the Participant's Qualified Non-Elective Account of each
Non-Highly Compensated Participant in the same proportion that each Non-
Highly Compensated Participant's Compensation for the year bears to the
total Compensation of all Non-Highly Compensated Participants.
(c) For purposes of this Section, "Income" means the income or loss allocable
to Excess Contributions which shall equal the sum of the allocable gain
or loss for the Plan Year and the allocable gain or loss for the period
between the end of the Plan Year and the date of distribution ("gap
period"). The income or loss allocable to Excess Contributions for the
Plan Year and the "gap period" is calculated separately and is determined
by multiplying the income or loss for the Plan Year or the "gap period"
by a fraction. The numerator of the fraction is the Excess Contributions
for the Plan Year. The denominator of the fraction is the total of the
Participant's Elective Account attributable to Elective Contributions and
the Participant's Qualified Non-Elective Accounts as of the end of the
Plan Year or the "gap period", reduced by the gain allocable to total
amount for the Plan Year or the "gap period" and increased by the loss
allocable to such total amount for the Plan Year or the "gap period".
In lieu of the "fractional method" described above, a "safe harbor
method" may be used to calculate the allocable Income for the "gap
period". Under such safe harbor method", allocable Income for the "gap
period" shall be deemed to equal ten percent (10%) of the Income
allocable to Excess Contributions for the Plan Year of the Participant
multiplied by the number of calendar months in the "gap period". For
purposes of determining the number of calendar months in the "gap
period", a distribution occurring on or before the fifteenth day of the
month shall be treated as having been made on the last day of the
preceding month and a distribution occurring after such fifteenth day
shall be treated as having been made on the first day of the next
subsequent month.
Notwithstanding the above, for Plan Years which began in 1987, and for
Plan Years beginning on or after the date this Plan is adopted, Income
during the "gap period" shall not be taken into account.
(d) Any amounts not distributed or recharacterized within 2 1/2 months after
the end of the Plan Year shall be subject to the 10% Employer excise tax
imposed by Code Section 4979.
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) The "Actual Contribution Percentage", for Plan Years beginning after the
later of the Effective Date of this Plan or December 31, 1986, for the
Highly Compensated Participant group shall not exceed the greater of:
(1) 125 percent of such percentage for the Non-Highly Compensated
Participant group; or
16
<PAGE>
(2) the lesser of 200 percent of such percentage for the Non-Highly
Compensated Participant group, or such percentage for the Non-Highly
Compensated Participant group plus 2 percentage points. However, for
Plan Years beginning after December 31, 1988, to prevent the multiple
use of the alternative method described in this paragraph and Code
Section 40l(m)(9)(A) any Highly Compensated Participant eligible to make
elective deferrals pursuant to Section 4.2 or any other cash or deferred
arrangement maintained by the Employer or an Affiliated Employer and to
make Employee contributions or to receive matching contributions under
any plan maintained by the Employer or an Affiliated Employer shall have
his actual contribution ratio reduced pursuant to Regulation 1401(m)-2.
The provisions of Code Section 401(m) and Regulations 1.401(m)-1(b) and
1401(m)-2 are incorporated herein by reference.
(b) For the purposes of this Section and Section 4.8. "Actual Contribution
Percentage" for a Plan Year means with respect to the Highly Compensated
Participant group and Non-Highly Compensated Participant group, the average
of the ratios (calculated separately for each Participant in each group) of:
(1) the sum of Employer matching contributions pursuant to Section 4.1(b)
(to the extent such matching contributions are not used to satisfy the
tests set forth in Section 4.5), voluntary Employee contributions made
pursuant to Section 4.12 and Excess Contributions recharacterized as
voluntary Employee contributions pursuant to Section 4.6(a) contributed
under the Plan on behalf of each such Participant for such Plan Year: to
(2) the Participant's "414(s) Compensation" for such Plan Year.
(c) For purposes of determining the "Actual Contribution Percentage" and the
amount of Excess Aggregate Contributions pursuant to Section 4.8(e), only
Employer matching contributions contributed to the Plan prior to the end of
the succeeding Plan Year shall be considered. In addition, the Administrator
may elect to take into account, with respect to Employees eligible to have
Employer matching contributions made pursuant to Section 4.1(b) or voluntary
Employee contributions made pursuant to Section 4.12 allocated to their
accounts, elective deferrals (as defined in Regulation 1.402(g)-1(b)) and
qualified non-elective contributions (as defined in Code Section 401(m)4(C))
contributed to any plan maintained by the Employer. Such elective deferrals
and qualified non-elective contributions shall be treated as Employer
matching contributions subject to Regulation 1.401(m)-1(b)(2) which is
incorporated herein by reference. However, for Plan Years beginning after
December 31, 1988, the Plan Year must be the same as the plan year of the
plan to which the elective deferrals and the qualified non-elective
contributions are made.
(d) For the purpose of determining the actual contribution ratio of a Highly
Compensated Employee who is subject to the Family Member aggregation rules
of Code Section 414(q)(6) because such Employee is either a "five percent
owner" of the Employer or one of ten (10). Highly Compensated Employees
paid the greatest "415 Compensation" during the year, the following shall
apply:
(1) The combined actual contribution ratio for the family group (which shall
be treated as one Highly Compensated Participant) shall be the ratio
determined by aggregating Employer matching contributions made pursuant
to Section 4.1(b) (to the extent such matching contributions are not
used to satisfy the tests set forth in Section 4.5), voluntary Employee
contributions made pursuant to Section 4.12. Excess Contributions
recharacterized as voluntary Employee contributions pursuant to Section
4.6(a) and "414(s) Compensation" of all eligible Family Members
(including Highly Compensated Participants). However, in applying the
$200,000 limit to "414(s) Compensation" for Plan Years beginning
after December 31, 1988. Family Members shall include only the affected
Employee's spouse and any lineal descendants who have not attained age
19 before the close of the Plan Year.
(2) The Employer matching contributions made pursuant to Section 4.1(b) (to
the extent such matching contributions are not used to satisfy the tests
set forth in Section 4.5), voluntary Employee contributions made
pursuant to Section 4.12. Excess Contributions recharacterized as
voluntary Employee contributions pursuant to Section 4.6(a) and "414(s)
Compensation" of all Family Members shall be disregarded for purposes of
determining the "Actual Contribution Percentage" of the Non-Highly
Compensated Participant group except to the extent taken into account in
paragraph (1) above.
(3) If a Participant is required to be aggregated as a member of more than
one family group in a plan, all Participants who are members of those
family groups that include the Participant are aggregated as one family
group in accordance with paragraphs (1) and (2) above.
(e) For purposes of this Section and Code Sections 401(a)(4), 410(b) and 401(m),
if two or more plans of the Employer to which matching contributions.
Employee contributions, or both, are made are treated as one plan for
purposes of Code Sections 401(a)(4) or 410(b) (other than the average
benefits test under Code Section 410(b)(2)(A)(ii) as in effect for Plan
Years beginning after December 31, 1988), such plans shall be treated as one
plan. In addition, two or more plans of the Employer to which matching
contributions, Employee contributions, or both, are made may be considered
as a single plan for purposes of determining whether or not such plans
satisfy Code Sections 401(a)(4), 410(b) and 401(m). In such a case, the
aggregated plans must satisfy this Section and Code Sections 401(a)(4),
410(b) and 401(m) as though such aggregated plans were a single plan. For
plan years beginning after December 31, 1989, plans may be aggregated under
this paragraph only if they have the same plan year.
Notwithstanding the above, for Plan Years beginning after December 31, 1988,
an employee stock ownership plan described in Code Section 4975(e)(7) may
not be aggregated with this Plan for purposes of determining whether the
employee stock ownership plan or this Plan satisfies this Section and Code
Sections 401(a)(4), 410(b) and 401(m).
If a Highly Compensated Participant is a Participant under two or more
plans (other than an employee stock ownership plan as defined in Code
Section 4975(e)(7) for Plan Years beginning after December 31, 1988) which
are maintained by the Employer or an Affiliated Employer to which matching
contributions, Employee contributions, or both, are made, all such
contributions on behalf of such Highly Compensated Participant shall be
aggregated for purposes of determining such Highly Compensated Participant's
actual contribution ratio. However, for Plan Years beginning after December
31, 1988, if the plans have different plan years, this paragraph shall be
applied by treating all plans ending with or within the same calendar year
as a single plan.
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(g) For purposes of Section 4.7(a) and 4.8, a Highly Compensated Participant
and a Non-Highly Compensated Participant shall include any Employee
eligible to have matching contributions made pursuant to Section 4.1(b)
(whether or not a deferred election was made or suspended pursuant to
Section 4.2(e)) allocated to his account for the Plan Year or to make
salary deferrals pursuant to Section 4.2 (if the Employer uses salary
deferrals to satisfy the provisions of this Section) or voluntary
Employee contributions pursuant to Section 4.12 (whether or not
voluntary Employee contributions are made) allocated to his account for
the Plan Year.
(h) For purposes of this Section, "Matching Contributions" shall mean an
Employer contribution made to the Plan, or to a contract described in
Code Section 403(b), on behalf of a Participant on account of an
Employee contribution made by such Participant, or on account of a
participant's deferred compensation, under a plan maintained by the
Employer.
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event that for Plan Years beginning after December 31, 1986, the
"Actual Contribution Percentage" for the Highly Compensated Participant
group exceeds the "Actual Contribution Percentage" for the Non-Highly
Compensated Participant group pursuant to Section 4.7(a), the
Administrator (on or before the fifteenth day of the third month
following the end of the Plan Year, but in no event later than the close
of the following Plan Year) shall direct the Trustee to distribute to
the Highly Compensated Participant having the highest actual
contribution ratio, his portion of Excess Aggregate Contributions (and
Income allocable to such contributions) or, if forfeitable, forfeit such
non-Vested Excess Aggregate Contributions attributable to Employer
matching contributions (and Income allocable to such Forfeitures) until
either one of the tests set forth in Section 4.7(a) is satisfied, or
until his actual contribution ratio equals the actual contribution ratio
of the Highly Compensated Participant having the second highest actual
contribution ratio. This process shall continue until one of the tests
set forth in Section 4.7(a) is satisfied. The distribution and/or
Forfeiture of Excess Aggregate Contributions shall be made in the
following order:
(1) Employer matching contributions distributed and/or forfeited
pursuant to Section 4.6(a)(1);
(2) Voluntary Employee contributions including Excess Contributions
recharacterized as voluntary Employee contributions pursuant to
Section 4.6(a)(2);
(3) Remaining Employer matching contributions.
(b) Any distribution or Forfeiture of less than the entire amount of Excess
Aggregate Contributions (and Income) shall be treated as a pro rata
distribution of Excess Aggregate Contributions and Income. Distribution
of Excess Aggregate Contributions shall be designated by the Employer as
a distribution of Excess Aggregate Contributions (and Income).
Forfeitures of Excess Aggregate Contributions shall be treated in
accordance with Section 4.4. However, no such Forfeiture may be
allocated to a Highly Compensated Participant whose contributions are
reduced pursuant to this Section.
(c) Excess Aggregate Contributions attributable to amounts other than
voluntary Employee contributions, including forfeited matching
contributions, shall be treated as Employer contributions for purposes
of Code Sections 404 and 415 even if distributed from the Plan.
(d) For the purposes of this Section and Section 4.7. "Excess Aggregate
Contributions" means, with respect to any Plan Year, the excess of:
(1) the aggregate amount of Employer matching contributions made
pursuant to Section 4.1(b) (to the extent such contributions are
taken into account pursuant to Section 4.7(b)), voluntary Employee
contributions made pursuant to Section 4.12, Excess Contributions
recharacterized as voluntary Employee contributions pursuant to
Section 4.6(a) and any Qualified Non-Elective Contributions or
elective deferrals taken into account pursuant to Section 4.7(c)
actually made on behalf of the Highly Compensated Participant group
for such Plan Year, over
(2) the maximum amount of such contributions permitted under the
limitations of Section 4.7(a).
(e) For each Highly Compensated Participant, the amount of Excess Aggregate
Contributions is equal to the total Employer matching contributions made
pursuant to Section 4.1(b) (to the extent taken into account pursuant to
Section 4.7(b)), voluntary Employee contributions made pursuant to
Section 4.12. Excess Contributions recharacterized as voluntary Employee
contributions pursuant to Section 4.6(a) and any Qualified Non-Elective
Contributions or elective deferrals taken into account pursuant to
Section 4.7(c) on behalf of the Highly Compensated Participant
(determined prior to the application of this paragraph) minus the amount
determined by multiplying the Highly Compensated Participant's actual
contribution ratio (determined after application of this paragraph) by
his "414(s) Compensation". The actual contribution ratio must be rounded
to the nearest one-hundredth of one percent for Plan Years beginning
after December 31, 1988. In no case shall the amount of Excess Aggregate
Contribution with respect to any Highly Compensated Participant exceed
the amount of Employer matching contributions made pursuant to Section
4.1(b) (to the extent taken into account pursuant to Section 4.7(b)),
voluntary Employee contributions made pursuant to Section 4.12. Excess
Contributions recharacterized as voluntary Employee contributions
pursuant to Section 4.6(a) and any Qualified Non-Elective Contributions
or elective deferrals taken into account pursuant to Section 4.7(c) on
behalf of such Highly Compensated Participant for such Plan Year.
(f) The determination of the amount of Excess Aggregate Contributions with
respect to any Plan Year shall be made after first determining the
Excess Contributions, if any, to be treated as voluntary Employee
contributions due to recharacterization for the plan year of any other
qualified cash or deferred arrangement (as defined in Code Section
401(k)) maintained by the Employer that ends with or within the Plan
Year or which are treated as voluntary Employee contributions due to
recharacterization pursuant to Section 4.6(a).
(g) The determination and correction of Excess Aggregate Contributions of a
Highly Compensated Participant whose actual contribution ratio is
determined under the family aggregation rules shall be accomplished by
reducing the actual contribution percentage ratio as required herein and
the Excess Aggregate Contributions for the family unit shall be
allocated among the Family Members in proportion to the sum of Employer
matching contributions made pursuant to Section 4.1(b) (to the extent
taken into account pursuant to Section), voluntary Employee
contributions made pursuant to Section 4.12, Excess Contributions
recharacterized as voluntary Employee contributions pursuant to Section
and any Qualified Non-Elective Contributions or elective deferrals taken
into account pursuant to Section 5.1 of each Family Member that were
combined to determine the group actual contribution ratio.
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<PAGE>
(h) Notwithstanding the above, within twelve (12) months after the end of
the Plan Year, the Employer may make a special Qualified Non-Elective
Contribution on behalf of Non-Highly Compensated Participants in an
amount sufficient to satisfy one of the tests set forth in Section
4.7(a). Such contribution shall be allocated to the Participant's
Qualified Non-Elective Account of each Non-Highly Compensated
Participant in the same proportion that each Non-Highly Compensated
Participant's Compensation for the year bears to the total Compensation
of all Non-Highly Compensated Participants. A separate accounting shall
be maintained for the purpose of excluding such contributions from the
"Actual Deferral Percentage" tests pursuant to Code Section 4.5(a).
(i) For purposes of this Section. "Income" means the income or loss
allocable to Excess Aggregate Contributions which shall equal the sum of
the allocable gain or loss for the Plan Year and the allocable gain or
loss for the period between the end of the Plan Year and the date of
distribution ("gap period"). The income or loss allocable to Excess
Aggregate Contributions for the Plan Year and the "gap period" is
calculated separately and is determined by multiplying the income or
loss for the Plan Year or the "gap period" by a fraction. The numerator
of the fraction is the Excess Aggregate Contributions for the Plan Year.
The denominator of the fraction is the total Participant's Account and
Voluntary Contribution Account attributable to Employer matching
contributions subject to Section 4.7, voluntary Employee contributions
made pursuant to Section 4.12, and any Qualified Non-Elective
Contributions and elective deferrals taken into account pursuant to
Section 4.7(c) as of the end of the Plan Year or the "gap period",
reduced by the gain allocable to such total amount for the Plan Year or
the "gap period" and increased by the loss allocable to such total
amount for the Plan Year or the "gap period".
In lieu of the "fractional method" described above, a "safe harbor
method" may be used to calculate the allocable Income for the "gap
period". Under such "safe harbor method", allocable Income for the "gap
period" shall be deemed to equal ten percent (10%) of the Income
allocable to Excess Aggregate Contributions for the Plan Year of the
Participant multiplied by the number of calendar months in the "gap
period". For purposes of determining the number of calendar months in
the "gap period", a distribution occurring on or before the fifteenth
day of the month shall be treated as having been made on the last day of
the preceding month and a distribution occurring after such fifteenth
day shall be treated as having been made on the first day of the next
subsequent month.
The Income allocable to Excess Aggregate Contributions resulting from
recharacterization of Elective Contributions shall be determined and
distributed as if such recharacterized Elective Contributions had been
distributed as Excess Contributions.
Notwithstanding the above, for Plan Years which began in 1987, and for
Plan Years beginning on or after the date this Plan is adopted. Income
during the "gap period" shall not be taken into account.
4.9 MAXIMUM ANNUAL ADDITIONS
(a) (1) If the Participant does not participate in, and has never
participated in another qualified plan maintained by the Employer,
or a welfare benefit fund (as defined in Code Section 419(e)),
maintained by the Employer, or an individual medical account (as
defined in Code Section 415(1)(2)), maintained by the Employer,
which provides Annual Additions, the amount of Annual Additions
which may be credited to the Participant's accounts for any
Limitation Year shall not exceed the lesser of the Maximum
Permissible Amount or any other limitation contained in this Plan.
If the Employer contribution that would otherwise be contributed or
allocated to the Participant's accounts would cause the Annual
Additions for the Limitation Year to exceed the Maximum Permissible
Amount, the amount contributed or allocated will be reduced so that
the Annual Additions for the Limitation Year will equal the Maximum
Permissible Amount.
(2) Prior to determining the Participant's actual Compensation for the
Limitation Year, the Employer may determine the Maximum Permissible
Amount for a Participant on the basis of a reasonable estimation of
the Participant's Compensation for the Limitation Year, uniformly
determined for all Participants similarly situated.
(3) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for such Limitation
Year shall be determined on the basis of the Participant's actual
compensation for such Limitation Year.
(4) If pursuant to Section 4.9(a)(2) or Section 4.5, there is an Excess
Amount, the excess will be disposed of in one of the following
manners, as uniformly determined by the Administrator for all
Participants similarly situated.
(i) Any Deferred Compensation or nondeductible Voluntary Employee
Contributions, to the extent they would reduce the Excess
Amount, will be distributed to the Participant;
(ii) If after the application of subparagraph (i), 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 will be used to reduce Employer
contributions (including any allocation of Forfeitures) for
such Participant in the next Limitation Year, and each
succeeding Limitation Year if necessary;
(iii) If, after the application of subparagraph (i), an Excess
Amount still exists, and the Participant is not covered by the
Plan at the end of a Limitation Year, the Excess Amount will
be held unallocated in a suspense account. The suspense
account will be applied to reduce future Employer
contributions (including allocation of any Forfeitures) for
all remaining Participants in the next Limitation Year,
and each succeeding Limitation Year if necessary:
(iv) If a suspense account is in existence at any time during a
Limitation Year pursuant to this Section, it will not
participate in the allocation of 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 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.
(b) (1) This subsection applies if, in addition to this Plan, the
Participant is covered under another qualified Prototype defined
contribution plan maintained by the Employer, or a welfare benefit
fund (as defined in Code Section 419(c)) maintained by the Employer,
or
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<PAGE>
an individual medical account (as defined in Code Section 415(1)(2))
maintained by the Employer, which provides Annual Additions, during
any Limitation Year. The Annual Additions which may be credited to a
Participant's accounts under this Plan for any such Limitation Year
shall not exceed the Maximum Permissible Amount reduced by the
Annual Additions credited to a Participant's accounts under the
other plans and welfare benefit funds for the same Limitation Year.
If the Annual Additions with respect to the Participant under other
defined contribution plans and welfare benefit funds maintained by
the 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 will be reduced so
that the Annual Additions under all such plans and welfare benefit
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 will be contributed or allocated to
the Participant's account under this Plan for the Limitation Year.
(2) Prior to determining the Participant's actual Compensation for the
Limitation Year, the Employer may determine the Maximum Permissible
Amount for a Participant in the manner described in Section
4.9(a)(2).
(3) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the Limitation
Year will be determined on the basis of the Participant's actual
Compensation for the Limitation Year.
(4) If, pursuant to Section 4.9(b)(2) or Section 4.5, a Participant's
Annual Additions under this Plan and such other plans would result
in an Excess Amount for a Limitation Year, the Excess Amount will be
deemed to consist of the Annual Additions last allocated, except
that Annual Additions attributable to a welfare benefit fund or
individual medical account will be deemed to have been allocated
first regardless of the actual allocation date.
(5) If an Excess Amount was allocated to a Participant on an allocation
date of this Plan which coincides with an allocation date of another
plan, the Excess Amount attributed to this Plan will be the product
of:
(i) the total Excess Amount allocated as of such date, times
(ii) the ratio of (1)the Annual Additions allocated to the
Participant for the Limitation Year as of such date under
this Plan to (2) the total Annual Additions allocated to the
Participant for the Limitation Year as of such date under
this and all the other qualified defined contribution plans.
(6) Any Excess Amount attributed to this Plan will be disposed in the
manner described in Section 4.9(a)(4).
(c) If the Participant is covered under another qualified defined
contribution plan maintained by the Employer which is not a Prototype
Plan, Annual Additions which may be credited to the Participant's
account under this Plan for any Limitation Year will be limited in
accordance with Section 4.9(b), unless the Employer provides other
limitations in the Adoption Agreement.
(d) If the Employer maintains, or at any time maintained, a qualified
defined benefit plan covering any Participant in this Plan the sum of
the Participant's Defined Benefit Plan Fraction and Defined Contribution
Plan Fraction will not exceed 1.0 in any Limitation Year. The Annual
Additions which may be credited to the Participant's account under this
Plan for any Limitation Year will be limited in accordance with the
Limitation on Allocations Section of the Adoption Agreement.
(e) For purposes of applying the limitations of Code Section 415, the
transfer of funds from one qualified plan to another is not an "annual
addition". In addition, the following are not Employee contributions
for the purposes of Section 4.9(f)(1)(2): (1) rollover contributions (as
defined in Code Sections 402(a)(5), 403(a)(4), 403(b)(8) and 408(d)(3)):
(2) repayments of loans made to a Participant from the Plan: (3)
repayments of distributions received by an Employee pursuant to Code
Section 411(a)(7)(B) (cashouts): (4) repayments of distributions
received by an Employee pursuant to Code Section 411(a)(3)(D)
(mandatory contributions): and (5) Employee contributions to a
simplified employee pension excludable from gross income under Code
Section 408(k)(6).
(f) For purposes of this Section, the following terms shall be defined as
follows:
(1) Annual Additions means the sum credited to a Participant's accounts
for any Limitation Year of (1) Employer contributions, (2) effective
with respect to "limitation years" beginning after December 31,
1986. Employee contributions, (3) forfeitures, (4) amounts
allocated, after March 31, 1984, to an individual medical account,
as defined in Code Section 415(1)(2), which is part of a pension or
annuity plan maintained by the Employer and (5) amounts derived
from contributions paid or accrued after December 31, 1985, in
taxable years ending after such date, which are attributable to
post-retirement medical benefits allocated to the separate account
of a key employee (as defined in Code Section 419A(d)(3)) under a
welfare benefit fund (as defined in Code Section 419(e)) maintained
by the Employer. Except, however, the "415 Compensation" percentage
limitation referred to in paragraph (a)(2) above shall not apply to:
(1) any contribution for medical benefits (within the meaning of
Code Section 419A(f)(2)) after separation from service which is
otherwise treated as an "annual addition", or (2) any amount
otherwise treated as an "annual addition" under Code Section
415(1)(1). Notwithstanding the foregoing, for "limitation years"
beginning prior to January 1, 1987, only that portion of Employee
contributions equal to the lesser of Employee contributions in
excess of six percent (6%) of "415 Compensation" or one-half of
Employee contributions shall be considered an "annual addition".
For this purpose, any Excess Amount applied under Sections 4.9(a)(4)
and 4.9(b)(6) in the Limitation Year to reduce Employer
contributions shall be considered Annual Additions for such
Limitation Year.
(2) Compensation means a Participant's Compensation as defined in
Section E1 of the Adoption Agreement.
For purposes of applying the limitations of this Section 4.9.
Compensation for any Limitation Year is the Compensation actually
paid or includible in gross income during such year. Notwithstanding
the preceding sentence. Compensation for a Participant in a
profit-sharing plan who is permanently and totally disabled (as
defined in Code Section 22(e)(3)) is the Compen-
20
<PAGE>
sation such Participant would have received for the Limitation Year
if the Participant had been paid at the rate of Compensation paid
immediately before becoming permanently and totally disabled such
imputed Compensation for the disabled Participant may be taken into
account only if the Participant is not a Highly Compensated
Employee and contributions made on behalf of such Participant are
nonforfeitable when made.
(3) Defined Benefit Fraction means a fraction, the numerator of which
is the sum of the Participant's Projected Annual Benefits under all
the defined benefit plans (whether or not terminated) maintained by
the Employer, and the denominator of which is the lesser of 125
percent of the dollar limitation determined for the Limitation Year
under Code Sections 415(b) and (d) or 140 percent of his Highest
Average Compensation including any adjustments under Code Section
415(b).
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 will not be less than 125 percent of
the sum of the annual benefits under such plans which the
Participant had accrued as of the end of the close of the last
Limitation Year beginning before January 1, 1987, disregarding any
changes in the terms and conditions of the plan after May 5, 1986.
The preceding sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements of
Code Section 415 for all Limitation Years beginning before January
1, 1987.
Notwithstanding the foregoing, for any Top Heavy Plan Year, 100
shall be substituted for 125 unless the extra minimum allocation is
being made pursuant to the Employer's election in F1 of the
Adoption Agreement. However, for any Plan Year in which this Plan
is a Super Top Heavy Plan, 100 shall be substituted for 125 in any
event.
(4) Defined Contribution Dollar Limitation means $30,000, or, if
greater, one-fourth of the defined benefit dollar limitation set
forth in Code Section 415(b)(1) as in effect for the Limitation
Year.
(5) Defined Contribution Fraction means 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 voluntary employee
contributions to any defined benefit plans, whether or not
terminated, maintained by the Employer and the annual additions
attributable to all welfare benefit funds, as defined in Code
Section 419(e), and individual medical accounts, as defined in Code
Section 415(1)(2), 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 Defined Contribution
Dollar Limitation or 35 percent of the Participant's Compensation
for such year. For Limitation Years beginning prior to January 1,
1987, the "annual addition" shall not be recomputed to treat all
Employee contributions as an Annual Addition.
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 5, 1986, the numerator of this fraction
will be adjusted if the sum of this fraction and the Defined
Benefit Fraction would otherwise exceed 1.0 under the terms of this
Plan. Under the adjustment, an amount equal to the product of
(1) the excess of the sum of the fractions over 1.0 times (2) the
denominator of this fraction, will be permanently subtracted from
the numerator of this fraction. The adjustment is calculated using
the fractions as they would be computed as of the end of the last
Limitation Year beginning before January 1, 1987, and disregarding
any changes in the terms and conditions of the plan made after May
5, 1986, but using the Code Section 415 limitation applicable to
the first Limitation Year beginning on or after January 1, 1987.
Notwithstanding the foregoing, for any Top Heavy Plan Year, 100
shall be substituted for 125 unless the extra minimum allocation is
being made pursuant to the Employer's election in F1 of the
Adoption Agreement. However, for any Plan Year in which this Plan
is a Super Top Heavy Plan, 100 shall be substituted for 125 in any
event.
(6) Employer means the Employer that adopts this Plan and all
Affiliated Employers, except that for purposes of this Section.
Affiliated Employers shall be determined pursuant to the
modification made by Code Section 415(b).
(7) Excess Amount means the excess of the Participant's Annual
Additions for the Limitation Year over the Maximum Permissible
Amount.
(8) Highest Average Compensation means the average Compensation for the
three consecutive Years of Service with the Employer that produces
the highest average. A Year of Service with the Employer is the 12
consecutive month period defined in Section E1 of the Adoption
Agreement which is used to determine Compensation under the Plan.
(9) Limitation Year means the Compensation Year (a 12 consecutive month
period) as elected by the Employer in the Adoption Agreement. All
qualified plans maintained by the Employer must use the same
Limitation Year. If the Limitation Year is amended to a different
12 consecutive month period, the new Limitation Year must begin on
a date within the Limitation Year in which the amendment is made.
(10) Master or Prototype Plan means a plan the form of which is the
subject of a favorable opinion letter from the Internal Revenue
Service.
(11) Maximum Permissible Amount means the maximum Annual Addition that
may be contributed or allocated to a Participant's account under
the plan for any Limitation Year, which shall not exceed the lesser
of:
(i) the Defined Contribution Dollar Limitation, or
(ii) 25 percent of the Participant's Compensation for the
Limitation Year.
The Compensation Limitation referred to in (ii) shall not apply to
any contribution for medical benefits (within the meaning of Code
Sections 401(h) or 419A(f)(2)) which is otherwise treated as an
annual addition under Code Sections 415(I)(1)or4l9A(d)(2).
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If a short Limitation Year is created because of an amendment
changing the Limitation Year to a different 12 consecutive month
period, the Maximum Permissible Amount will not exceed the Defined
Contribution Dollar Contribution multiplied by the following
fraction:
number of months in the short Limitation Year 12
(12) Projected Annual Benefit means the annual retirement benefit
(adjusted to an actuarially equivalent straight life annuity if
such benefit is expressed in a form other than a straight life
annuity or qualified Joint and Survivor Annuity) to which the
Participant would be entitled under the terms of the plan
assuming:
(i) the Participant will continue employment until Normal
Retirement Age (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.
(g) Notwithstanding anything contained in this Section to the contrary, the
limitations, adjustments and other requirements prescribed in this
Section shall at all times comply with the provisions of Code Section
415 and the Regulations thereunder, the terms of which are specifically
incorporated herein by reference.
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If as a result of the allocation of Forfeitures, a reasonable error in
estimating a Participant's annual Compensation, a reasonable error in
determining the amount of elective deferrals (within the meaning of
Code Section 402(g)(3), that may be made with respect to a Participant,
or other facts and circumstances to which Regulation 1,415-6(b)(6)
shall be applicable, the "annual additions" under this Plan would cause
the maximum provided in Section 4.9 to be exceeded, the Administrator
shall treat the excess in accordance with Section 4.9(a)(4).
4.11 TRANSFERS FROM QUALIFIED PLANS
(a) If specified in the Adoption Agreement and with the consent of the
Administrator, amounts may be transferred from other qualified plans,
provided that the trust from which such funds are transferred permits
the transfer to be made and the transfer will not jeopardize the tax
exempt status of the Plan or create adverse tax consequences for the
Employer. The amounts transferred shall be set up in a separate account
herein referred to as a "Participant's Rollover Account. Such account
shall be fully Vested at all times and shall not be subject to
forfeiture for any reason.
(b) Amounts in a Participant's Rollover Account shall be held by the
Trustee pursuant to the provisions of this Plan and may not be
withdrawn by, or distributed to the Participant, in whole or in part,
except as provided in Paragraphs (c) and (d) of this Section.
(c) Amounts attributable to elective contributions (as defined in
Regulation 1.401(k)-1(g)(4)), including amounts treated as elective
contributions, which are transferred from another qualified plan in a
plan-to-plan transfer shall be subject to the distribution limitations
provided for in Regulation 1.401(k)-1(d).
(d) At Normal Retirement Date, or such other date when the Participant or
his Beneficiary shall be entitled to receive benefits, the fair market
value of the Participant's Rollover Account shall be used to provide
additional benefits to the Participant or his Beneficiary. Any
distributions of amounts held in a Participant's Rollover Account
shall be made in a manner which is consistent with and satisfies the
provisions of Section 6.5, including, but not limited to, all notice
and consent requirements of Code Sections 411(a)(11) and 417 and the
Regulations thereunder. Furthermore, such amounts shall be considered
as part of a Participant's benefit in determining whether an
involuntary cash-out of benefits without Participant consent may be
made.
(e) The Administrator may direct that employee transfers made after a
valuation date be segregated into a separate account for each
Participant until such time as the allocations pursuant to this Plan
have been made, at which time they may remain segregated or be invested
as part of the general Trust Fund, to be determined by the
Administrator.
(f) For purposes of this Section, the term "qualified plan" shall mean any
tax qualified plan under Code Section 401(a). The term "amounts
transferred from other qualified plans" shall mean: (i) amounts
transferred to this Plan directly from another qualified plan: (ii)
lump-sum distributions received by an Employee from another qualified
plan which are eligible for tax free rollover to a qualified plan and
which are transferred by the Employee to this Plan within sixty (60)
days following his receipt thereof: (iii) amounts transferred to this
Plan from a conduit individual retirement account provided that the
conduit individual retirement account has no assets other than assets
which (A) were previously distributed to the Employee by another
qualified plan as a lump-sum distribution (B) were eligible for
tax-free rollover to a qualified plan and (C) were deposited in such
conduit individual retirement account within sixty (60) days of receipt
thereof and other than earnings on said assets and (iv) amounts
distributed to the Employee from a conduit individual retirement
account meeting the requirements of clause (iii) above, and transferred
by the Employee to this Plan within sixty (60) days of his receipt
thereof from such conduit individual retirement account.
(g) Prior to accepting any transfers to which this Section applies, the
Administrator may require the Employee to establish that the amounts to
be transferred to this Plan meet the requirements of this Section and
may also require the Employee to provide an opinion of counsel
satisfactory to the Employer that the amounts to be transferred meet
the requirements of this Section.
(h) Notwithstanding anything herein to the contrary, a transfer directly
to this Plan from another qualified plan (or a transaction having the
effect of such a transfer) shall only be permitted if it will not
result in the elimination or reduction of any "Section 411(d)(6)
protected benefit" as described in Section 8.1.
4.12 VOLUNTARY CONTRIBUTIONS
(a) If elected in the Adoption Agreement, each Participant may, at the
discretion of the Administrator in a nondiscriminatory manner, elect
to voluntarily contribute a portion of his compensation earned while a
Participant under this Plan. Such contributions shall be paid to the
Trustee within a reasonable period of time but in no event later than
90 days after the receipt of the contribution.
(b) The balance in each Participant's Voluntary Contribution Account shall
be fully Vested at all times and shall not be subject to Forfeiture for
any reason.
(c) A Participant may elect to withdraw his voluntary contributions from
his Voluntary Contribution Account and the actual earnings thereon in a
manner which is consistent with and satisfies the provisions of Section
6.5, including, but not limited to, all notice and consent requirements
of Code Sections 411(a)(11) and 417 and the Regulations thereunder. If
the Administrator maintains sub-accounts with respect to voluntary
contributions (and earnings
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thereon) which were made on or before a specified date, a Participant
shall be permitted to designate which sub-account shall be the source
for his withdrawal. No Forfeitures shall occur solely as a result of an
Employee's withdrawal of Employee contributions.
In the event such a withdrawal is made, or in the event a Participant
has received a hardship distribution pursuant to Regulation
1.401(k)-1(d)(2)(iii)(B) from any other plan maintained by the Employer
or from his Participant's Elective Account pursuant to Section 6.11,
then such Participant shall be barred from making any voluntary
contributions to the Trust Fund for a period of twelve (12) months
after receipt of the withdrawal or distribution.
(d) At Normal Retirement Date, or such other date when the Participant or
his Beneficiary shall be entitled to receive benefits, the fair market
value of the Voluntary Contribution Account shall be used to provide
additional benefits to the Participant or his Beneficiary.
(e) The Administrator may direct that voluntary contributions made after a
valuation date be segregated into a separate account until such time as
the allocations pursuant to this Plan have been made, at which time
they may remain segregated or be invested as part of the general Trust
Fund, to be determined by the Administrator.
4.13 DIRECTED INVESTMENT ACCOUNT
(a) If elected in the Adoption Agreement, all Participants may direct the
Trustee as to the investment of all or a portion of any one or more of
their individual account balances. Participants may direct the Trustee
in writing to invest their account in specific assets as permitted by
the Administrator provided such investments are in accordance with the
Department of Labor regulations and are permitted by the Plan. That
portion of the account of any Participant so directing will thereupon
be considered a Directed Investment Account.
(b) A separate Directed Investment Account shall be established for each
Participant who has directed an investment. Transfers between the
Participant's regular account and their Directed Investment Account
shall be charged and credited as the case may be to each account. The
Directed Investment Account shall not share in Trust Fund Earnings, but
it shall be charged or credited as appropriate with the net earnings,
gains, losses and expenses as well as any appreciation or depreciation
in market value during each Plan Year atttributable to such account.
(c) The Administrator shall establish a procedure, to be applied in a
uniform and nondiscriminatory manner, setting forth the permissible
investment options under this Section, how often changes between
investments may be made, and any other limitations that the
Administrator shall impose on a Participant's right to direct
investments.
4.14 QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS
(a) If this is an amendment to a Plan that previously permitted deductible
voluntary contributions, then each Participant who made a "Qualified
Voluntary Employee Contribution" within the meaning of Code Section
219(e)(2) as it existed prior to the enactment of the Tax Reform Act of
1986, shall have his contribution held in a separate Qualified
Voluntary Employee Contribution Account which shall be fully Vested at
all times. Such contributions, however, shall not be permitted if they
are attributable to taxable years beginning after December 31, 1986.
(b) A Participant may, upon written request delivered to the Administrator,
make withdrawals from his Qualified Voluntary Employee Contribution
Account. Any distribution shall be made in a manner which is consistent
with and satisfies the provisions of Section 6.5, including, but not
limited to, all notice and consent requirements of Code Sections
411(a)(11) and 417 and the Regulations thereunder.
(c) At Normal Retirement Date, or such other date when the Participant or
his Beneficiary shall be entitled to receive benefits, the fair market
value of the Qualified Voluntary Employee Contribution Account shall be
used to provide additional benefits to the Participant or his
Beneficiary.
(d) Unless the Administrator directs Qualified Voluntary Employee
Contributions made pursuant to this Section be segregated into a
separate account for each Participant, they shall be invested as part
of the general Trust Fund and share in earnings and losses.
4.15 INTEGRATION IN MORE THAN ONE PLAN
If the Employer and/or an Affiliated Employer maintain qualified retirement
plans integrated with Social Security such that any Participant in this Plan is
covered under more than one of such plans, then such plans will be considered to
be one plan and will be considered to be integrated if the extent of the
integration of all such plans does not exceed 100%. For purposes of the
preceding sentence, the extent of integration of a plan is the ratio, expressed
as a percentage, which the actual benefits, benefit rate, offset rate, or
employer contribution rate, whatever is applicable, under the Plan bears to the
limitation applicable to such Plan. If the Employer maintains two or more
standardized paired plans, only one plan may be integrated with Social Security.
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each Anniversary Date, and at
such other date or dates deemed necessary by the Administrator, herein called
"valuation date", to determine the net worth of the assets comprising the Trust
Fund as it exists on the "valuation date". In determining such net worth, the
Trustee shall value the assets comprising the Trust Fund at their fair market
value as of the "valuation date" and shall deduct all expenses for which the
Trustee has not yet obtained reimbursement from the Employer or the Trust Fund.
5.2 METHOD OF VALUATION
In determining the fair market value of securities held in the Trust Fund which
are listed on a registered stock exchange, the Administrator shall direct the
Trustee to value the same at the prices they were last traded on such exchange
preceding the c1ose of business on the "valuation date". If such securities were
not traded on the "valuation date", or if the exchange on which they are traded
was not open for business on the "valuation date", then the securities shall
be valued at the prices at which they were last traded prior to the "valuation
date". Any unlisted security held in the Trust Fund shall be valued at its bid
price next preceding the close of business on the "valuation date", which bid
price shall be obtained from a registered broker or an investment banker. In
determining the fair market value of assets other than securities for which
trading or bid prices can be obtained, the Trustee may appraise such assets
itself, or in its discretion, employ one or more appraisers for that purpose and
rely on the values established by such appraiser or appraisers.
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate his employment with the Employer and retire for
the purposes hereof on or after his Normal Retirement
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Date or Early Retirement Date. Upon such Normal Retirement Date or Early
Retirement Date, all amounts credited to such Participant's Combined Account
shall become distributable. However, a Participant may postpone the termination
of his employment with the Employer to a later date, in which event the
participation of such Participant in the Plan, including the right to receive
allocations pursuant to Section 4.4, shall continue until his Late Retirement
Date. Upon a Participant's Retirement Date, or as soon thereafter as is
practicable, the Administrator shall direct the distribution of all amounts
credited to such Participant's Combined Account in accordance with Section 6.5.
6.2 DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before his Retirement Date or other
termination of his employment, all amounts credited to such
Participant's Combined Account shall become fully Vested. The
Administrator shall direct, in accordance with the provisions of
Sections 6.6 and 6.7, the distribution of the deceased Participant's
accounts to the Participant's Beneficiary.
(b) Upon the death of a Former Participant, the Administrator shall direct,
in accordance with the provisions of Sections 6.6 and 6.7, the
distribution of any remaining amounts credited to the accounts of such
deceased Former Participant to such Former Participant's Beneficiary.
(c) The Administrator may require such proper proof of death and such
evidence of the right of any person to receive payment of the value of
the account of a deceased Participant or Former Participant as the
Administrator may deem desirable. The Administrator's determination of
death and of the right of any person to receive payment shall be
conclusive.
(d) Unless otherwise elected in the manner prescribed in Section 6.6, the
Beneficiary of the Pre-Retirement Survivor Annuity shall be the
Participant's spouse. Except, however, the Participant may designate a
Beneficiary other than his spouse for the Pre-Retirement Survivor
Annuity if:
(1) the Participant and his spouse have validly waived the
Pre-Retirement Survivor Annuity in the manner prescribed
in Section 6.6, and the spouse has waived his or her right to be
the Participant's Beneficiary, or
(2) the Participant is legally separated or has been abandoned (within
the meaning of local law) and the Participant has a court order to
such effect (and there is no "qualified domestic relations order"
as defined in Code Section 414(p) which provides otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a Beneficiary shall be made on a form
satisfactory to the Administrator. A Participant may at any time revoke
his designation of a Beneficiary or change his Beneficiary by filing
written notice of such revocation or change with the Administrator.
However, the Participant's spouse must again consent in writing to any
change in Beneficiary unless the original consent acknowledged that the
spouse had the right to limit consent only to a specific Beneficiary
and that the spouse voluntarily elected to relinquish such right. The
Participant may, at any time, designate a Beneficiary for death
benefits payable under the Plan that are in excess of the
Pre-Retirement Survivor Annuity. In the event no valid designation of
Beneficiary exists at the time of the Participant's death, the death
benefit shall be payable to his estate.
(e) If the Plan provides an insured death benefit and a Participant dies
before any insurance coverage to which he is entitled under the Plan is
effected, his death benefit from such insurance coverage shall be
limited to the standard rated premium which was or should have been
used for such purpose.
(f) In the event of any conflict between the terms of this Plan and the
terms of any Contract issued hereunder, the Plan provisions shall
control.
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
In the event of a Participant's Total and Permanent Disability prior to his
Retirement Date or other termination of his employment, all amounts credited to
such Participant's Combined Account shall become fully Vested. In the event of a
Participant's Total and Permanent Disability, the Administrator, in accordance
with the provisions of Sections 6.5 and 6.7, shall direct the distribution to
such Participant of all amounts credited to such Participant's Combined Account
as though he had retired.
6.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) On or before the Anniversary Date coinciding with or subsequent to the
termination of a Participant's employment for any reason other than
retirement, death, or Total and Permanent Disability, the Administrator
may direct the Trustee to segregate the amount of the Vested portion of
such Terminated Participant's Combined Account and invest the aggregate
amount thereof in a separate, federally insured savings account,
certificate of deposit, common or collective trust fund of a bank or a
deferred annuity. In the event the Vested portion of a Participant's
Combined Account is not segregated, the amount shall remain in a
separate account for the Terminated Participant and share in
allocations pursuant to Section 4.4 until such time as a distribution
is made to the Terminated Participant. The amount of the portion of the
Participant's Combined Account which is not Vested may be credited to a
separate account (which will always share in gains and losses of the
Trust) and at such time as the amount becomes a Forfeiture shall be
treated in accordance with the provisions of the Plan regarding
Forfeitures.
Regardless of whether distributions in kind are permitted, in the event
that the amount of the Vested portion of the Terminated Participant's
Combined Account equals or exceeds the fair market value of any
insurance Contracts, the Trustee, when so directed by the Administrator
and agreed to by the Terminated Participant, shall assign, transfer,
and set over to such Terminated Participant all Contracts on his life
in such form or with such endorsements, so that the settlement options
and forms of payment are consistent with the provisions of Section 6.5.
In the event that the Terminated Participant's Vested portion does not
at least equal the fair market value of the Contracts, if any, the
Terminated Participant may pay over to the Trustee the sum needed to
make the distribution equal to the value of the Contracts being
assigned or transferred, or the Trustee, pursuant to the Participant's
election, may borrow the cash value of the Contracts from the Insurer
so that the value of the Contracts is equal to the Vested portion of
the Terminated Participant's Combined Account and then assign the
Contracts to the Terminated Participant.
Distribution of the funds due to a Terminated Participant shall be made
on the occurrence of an event which would result in the distribution
had the Terminated Participant remained in the employ, of the Employer
(upon the Participant's death, Total and Permanent Disability, Early or
Normal Retirement). However, at the election of the Participant, the
Administrator shall direct that the entire Vested portion of the
Terminated Participant's Combined Account to be payable to such
Terminated Participant pro-
24
<PAGE>
vided the conditions, if any, set forth in the Adoption Agreement have been
satisfied. Any distribution under this paragraph shall be made in a manner
which is consistent with and satisfies the provisions of Section 6.5,
including but not limited to, all notice and consent requirements of Code
Sections 41l(a)(11) and 417 and the Regulations thereunder.
Notwithstanding the above, if the value of a Terminated Participant's
Vested benefit derived from Employer and Employee contributions does not
exceed, and at the time of any prior distribution, has never exceeded
$3,500, the Administrator shall direct that the entire Vested benefit be
paid to such Participant in a single lump-sum without regard to the consent
of the Participant or the Participant's spouse. A Participant's Vested
benefit shall not include Qualified Voluntary Employee Contributions within
the meaning of Code Section 72(o)(5)(B) for Plan Years beginning prior to
January l, 1989.
(b) The Vested portion of any Participant's Account shall be a percentage of
such Participant's Account determined on the basis of the Participant's
number of Years of Service according to the vesting schedule specified in
the Adoption Agreement.
(c) For any Top Heavy Plan Year, one of the minimum top heavy vesting schedules
as elected by the Employer in the Adoption Agreement will automatically
apply to the Plan. The minimum top heavy vesting schedule applies to all
benefits within the meaning of Code Section 411(a)(7) except those
attributable to Employee contributions, including benefits accrued before
the effective date of Code Section 416 and benefits accrued before the Plan
became top heavy. Further, no decrease in a Participant's Vested percentage
may occur in the event the Plan's status as top heavy changes for any Plan
Year. However, this Section does not apply to the account balances of any
Employee who does not have an Hour of Service after the Plan has initially
become top heavy and the Vested percentage of such Employee's Participant's
Account shall be determined without regard to this Section 6.4(c).
If in any subsequent Plan Year, the Plan ceases to be a Top Heavy Plan, the
Administrator shall continue to use the vesting schedule in effect while
the Plan was a Top Heavy Plan for each Employee who had an Hour of Service
during a Plan Year when the Plan was Top Heavy.
(d) Notwithstanding the vesting schedule above, upon the complete
discontinuance of the Employer's contributions to the Plan or upon any
full or partial termination of the Plan, all amounts credited to the
account of any affected Participant shall become 100% Vested and shall
not thereafter be subject to Forfeiture.
(e) If this is an amended or restated Plan, then notwithstanding the vesting
schedule specified in the Adoption Agreement, the Vested percentage of a
Participant's Account shall not be less than the Vested percentage attained
as of the later of the effective date or adoption date of this amendment
and restatement. The computation of a Participant's nonforfeitable
percentage of his interest in the Plan shall not be reduced as the result
of any direct or indirect amendment to this Article, or due to changes in
the Plan's status as a Top Heavy Plan.
(f) If the Plan's vesting schedule is amended, or if the Plan is amended in any
way that directly or indirectly affects the computation of the
Participant's nonforfeitable percentage or if the Plan is deemed amended by
an automatic change to a top heavy vesting schedule, then each Participant
with at least 3 Years of Service as of the expiration date of the election
period may elect to have his nonforfeitable percentage computed under the
Plan without regard to such amendment or change. Notwithstanding the
foregoing, for Plan Years beginning before January 1, 1989, or with respect
to Employees who fail to complete at least one (1) Hour of Service in a
Plan Year beginning after December 31, 1988, five (5) shall be substituted
for three (3) in the preceding sentence. If a Participant fails to make
such election, then such Participant shall be subject to the new vesting
schedule. The Participant's election period shall commence on the adoption
date of the amendment and shall end 60 days after the latest of:
(1) the adoption date of the amendment.
(2) the effective date of the amendment, or
(3) the date the Participant receives written notice of the amendment from
the Employer or Administrator.
(g) (1) If any Former Participant shall be reemployed by the Employer before a
1-Year Break in Service occurs, he shall continue to participate in
the Plan in the same manner as if such termination had not occurred.
(2) If any Former Participant shall be reemployed by the Employer before
five (5) consecutive 1-Year Breaks in Service, and such Former
Participant had received a distribution of his entire Vested interest
prior to his reemployment, his forfeited account shall be reinstated
only if he repays the full amount distributed to him before the
earlier of five (5) years after the first date on which the
Participant is subsequently reemployed by the Employer or the close of
the first period of 5 consecutive 1-Year Breaks in Service commencing
after the distribution. If a distribution occurs for any reason other
than a separation from service, the time for repayment may not end
earlier than five (5) years after the date of separation. In the event
the Former Participant does repay the full amount distributed to him,
the undistributed portion of the Participant's Account must be
restored in full, unadjusted by any gains or losses occurring
subsequent to the Anniversary Date or other valuation date preceding
his termination. If an employee receives a distribution pursuant to
this section and the employee resumes employment covered under this
plan, the employee's employer-derived account balance will be restored
to the amount on the date of distribution if the employee repays to
the plan the full amount of the distribution attributable to employer
contributions before the earlier of 5 years after the first date on
which the participant is subsequently re-employed by the employer, or
the date the participant incurs 5 consecutive 1-year breaks in service
following the date of the distribution. If a non-Vested Former
Participant was deemed to have received a distribution and such Former
Participant is reemployed by the Employer before five (5) consecutive
1-Year Breaks in Service, then such Participant will be deemed to have
repaid the deemed distribution as of the date of reemployment.
(3) If any Former Participant is reemployed after a 1-Year Break in
Service has occurred. Years of Service shall include Years of
Service prior to his 1-Year Break in Service subject to the following
rules:
(i) Any Former Participant who under the Plan does not have a
nonforfeitable right to any interest in the Plan resulting from
Employer contributions shall lose credits if his consecutive 1-
Year Breaks in Service equal or exceed the greater of (A) five
(5) or (B) the aggregate number of his pre-break Years of
Service;
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<PAGE>
(ii) After five (5) consecutive 1-Year Breaks in Service, a Former
Participant's Vested Account balance attributable to pre-break
service shall not be increased as a result of post-break
service:
(iii) A Former Participant who is reemployed and who has not had his
Years of Service before a 1-Year Break in Service disregarded
pursuant to (i) above, shall participate in the Plan as of his
date of reemployment:
(iv) If a Former Participant completes a Year of Service (a 1-Year
Break in Service previously occurred, but employment had not
terminated), he shall participate in the Plan retroactively
from the first day of the Plan Year during which he completes
one (1) Year of Service.
(h) In determining Years of Service for purposes of vesting under the
Plan, Years of Service shall be excluded as specified in the Adoption
Agreement.
6.5 DISTRIBUTION OF BENEFITS
(a) (1) Unless otherwise elected as provided below, a Participant who is
married on the "annuity starting date" and who does not die before
the "annuity starting date" shall receive the value of all of his
benefits in the form of a Joint and Survivor Annuity. The Joint
and Survivor Annuity is an annuity that commences immediately and
shall be equal in value to a single life annuity. Such joint and
survivor benefits following the Participant's death shall continue
to the spouse during the spouse's lifetime at a rate equal to 50%
of the rate at which such benefits were payable to the
Participant. This Joint and Survivor Annuity shall be considered
the designated qualified Joint and Survivor Annuity and automatic
form of payment for the purposes of this Plan. However, the
Participant may elect to receive a smaller annuity benefit with
continuation of payments to the spouse at a rate of seventy-five
percent (75%) or one hundred percent (100%) of the rate payable to
a Participant during his lifetime which alternative Joint and
Survivor Annuity shall be equal in value to the automatic Joint
and 50% Survivor Annuity. An unmarried Participant shall receive
the value of his benefit in the form of a life annuity. Such
unmarried Participant, however, may elect in writing to waive the
life annuity. The election must comply with the provisions of this
Section as if it were an election to waive the Joint and Survivor
Annuity by a married Participant but without the spousal consent
requirement. The Participant may elect to have any annuity
provided for in this Section distributed upon the attainment of
the "earliest retirement age" under the Plan. The "earliest
retirement age" is the earliest date on which, under the Plan, the
Participant could elect to receive retirement benefits.
(2) Any election to waive the Joint and Survivor Annuity must be made
by the Participant in writing during the election period and be
consented to by the Participant's spouse. If the spouse is legally
incompetent to give consent, the spouse's legal guardian, even if
such guardian is the Participant, may give consent. Such election
shall designate a Beneficiary (or a form of benefits) that may not
be changed without spousal consent (unless the consent of the
spouse expressly permits designations by the Participant without
the requirement of further consent by the spouse). Such spouse's
consent shall be irrevocable and must acknowledge the effect of
such election and be witnessed by a Plan representative or a
notary public. Such consent shall not be required if it is
established to the satisfaction of the Administrator that the
required consent cannot be obtained because there is no spouse,
the spouse cannot be located, or other circumstances that may be
prescribed by Regulations. The election made by the Participant
and consented to by his spouse may be revoked by the Participant
in writing without the consent of the spouse at any time during
the election period. The number of revocations shall not be
limited. Any new election must comply with the requirements of
this paragraph. A former spouse's waiver shall not be binding on a
new spouse.
(3) The election period to waive the Joint and Survivor Annuity shall
be the 90 day period ending on the "annuity starting date."
(4) For purposes of this Section and Section 6.6. the "annuity
starting date" means the first day of the first period for which
an amount is paid as an annuity, or, in the case of a benefit not
payable in the form of an annuity, the first day on which all
events have occurred which entitles the Participant to such
benefit.
(5) With regard to the election, the Administrator shall provide to
the Participant no less than 30 days and no more than 90 days
before the "annuity starting date" a written explanation of:
(i) the terms and conditions of the Joint and Survivor Annuity,
and
(ii) the Participant's right to make and the effect of an
election to waive the Joint and Survivor Annuity, and
(iii) the right of the Participant's spouse to consent to any
election to waive the Joint and Survivor Annuity, and
(iv) the right of the Participant to revoke such election, and
the effect of such revocation.
(b) In the event a married Participant duly, elects pursuant to paragraph
(a)(2) above not to receive his benefit in the form of a Joint and
Survivor Annuity, or if such Participant is not married, in the form
of a life annuity, the Administrator, pursuant to the election of the
Participant, shall direct the distribution to a Participant or his
Beneficiary any amount to which he is entitled under the Plan in one
or more of the following methods which are permitted pursuant to the
Adoption Agreement.
(1) One lump-sum payment in cash or in property:
(2) Payments over a period certain in monthly, quarterly, semiannual,
or annual cash installments. In order to provide such installment
payments, the Administrator may direct that the Participant's
interest in the Plan be segregated and invested separately, and
that the funds in the segregated account be used for the payment
of the installments. The period over which such payment is to be
made shall not extend beyond the Participant's life expectancy (or
the life expectancy of the Participant and his designated
Beneficiary):
(3) Purchase of or providing an annuity. However, such annuity may not
be in any form that will provide for payments over a period
extending beyond either the life of the Participant (or the lives
of the Participant and his designated Beneficiary) or the life
expectancy of the Participant (or the life expectancy of the
Participant and his designated Beneficiary).
(c) The present value of a Participant's Joint and Survivor Annuity
derived from Employer and Employee contributions may not be paid
without his written consent if the value exceeds, or has ever exceeded
at the time of any prior distribution, $3,500. Further, the spouse of
a
26
<PAGE>
Participant must consent in writing to any immediate distribution. If
the value of the Participant's benefit derived from Employer and
Employee contributions does not exceed $3,500 and has never exceeded
$3,500 at the time of any prior distribution, the Administrator may
immediately distribute such benefit without such Participant's
consent. No distribution may be made under the preceding sentence
after the "annuity starting date" unless the Participant and his
spouse consent in writing to such distribution. Any written consent
required under this paragraph must be obtained not more than 90 days
before commencement of the distribution and shall be made in a manner
consistent with Section 6.5(a)(2).
(d) Any distribution to a Participant who has a benefit which exceeds, or
has ever exceeded at the time of any prior distribution, $3,500 shall
require such Participant's consent if such distribution commences
prior to the later of his Normal Retirement Age or age 62. With regard
to this required consent:
(1) No consent shall be valid unless the Participant has received a
general description of the material features and an explanation
of the relative values of the optional forms of benefit available
under the Plan that would satisfy the notice requirements of Code
Section 417.
(2) The Participant must be informed of his right to defer receipt of
the distribution. If a Participant fails to consent, it shall be
deemed an election to defer the commencement of payment of any
benefit. However, any election to defer the receipt of benefits
shall not apply with respect to distributions which are required
under Section 6.5(e).
(3) Notice of the rights specified under this paragraph shall be
provided no less than 30 days and no more than 90 days before the
"annuity starting date".
(4) Written consent of the Participant to the distribution must not
be made before the Participant receives the notice and must not
be made more than 90 days before the "annuity starting date".
(5) No consent shall be valid if a significant detriment is imposed
under the plan on any Participant who does not consent to the
distribution.
(e) Notwithstanding any provision in the entire Plan to the contrary, the
distribution of a Participant's benefits, made on or after January 1,
1985, whether under the Plan or through the purchase of an annuity
Contract, shall be made in accordance with the following requirements
and shall otherwise comply with Code Section 401(a)(9) and the
Regulations thereunder (including Regulation Section 1.401(a)(9)-2),
the provisions of which are incorporated herein by reference.
(1) A Participant's benefits shall be distributed to him not later
than April 1st of the calendar year following the later of (i)
the calendar year in which the Participant attains age 70 l/2 or
(ii) the calendar year in which the Participant retires,
provided, however, that this clause (ii) shall not apply in the
case of a Participant who is a "five (5) percent owner" at any
time during the five (5) Plan Year period ending in the calendar
year in which he attains age 70 1/2 or, in the case of a
Participant who becomes a "five (5) percent owner" during any
subsequent Plan Year, clause (ii) shall no longer apply and the
required beginning date shall be the April 1st of the calendar
year following the calendar year in which such subsequent Plan
Year ends. Alternatively, distributions to a Participant must
begin no later than the applicable April 1st as determined under
the preceding sentence and must be made over the life of the
Participant (or the lives of the Participant and the
Participant's designated Beneficiary) or, if benefits are paid in
the form of a Joint and Survivor Annuity, the life expectancy of
the Participant (or the life expectancies of the Participant and
his designated Beneficiary) in accordance with Regulations. For
Plan Years beginning after December 31, 1988, clause (ii) above
shall not apply to any Participant unless the Participant had
attained age 70 1/2 before January 1, 1988 and was not a "five
(5) percent owner" at any time during the Plan Year ending with
or within the calendar year in which the Participant attained age
66 1/2 or any subsequent Plan Year.
(2) Distributions to a Participant and his Beneficiaries shall only
be made in accordance with the incidental death benefit
requirements of Code Section 401(a)(9)(G) and the Regulations
thereunder.
Additionally, for calendar years beginning before 1989,
distributions may also be made under an alternative method which
provides that the then present value of the payments to be made
over the period of the Participant's life expectancy exceeds
fifty percent (50%) of the then present value of the total
payments to be made to the Participant and his Beneficiaries.
(f) For purposes of this Section, the life expectancy of a Participant and
a Participant's spouse (other than in the case of a life annuity)
shall be redetermined annually in accordance with Regulations if
permitted pursuant to the Adoption Agreement. If the Participant or
the Participant's spouse may elect whether recalculations will be
made, then the election, once made, shall be irrevocable. If no
election is made by the time distributions must commence, then the
life expectancy of the Participant and the Participant's spouse shall
not be subject to recalculation. Life expectancy and joint and last
survivor expectancy shall be computed using the return multiples in
Tables V and VI of Regulation 1.72-9.
(g) All annuity Contracts under this Plan shall be non-transferable when
distributed. Furthermore, the terms of any annuity Contract purchased
and distributed to a Participant or spouse shall comply with all of
the requirements of this Plan.
(h) Subject to the spouse's right of consent afforded under the Plan, the
restrictions imposed by this Section shall not apply if a Participant
has, prior to January 1, 1984, made a written designation to have his
retirement benefit paid in an alternative method acceptable under Code
Section 401(a) as in effect prior to the enactment of the Tax Equity
and Fiscal Responsibility Act of 1982.
(i) If a distribution is made at a time when a Participant who has not
terminated employment is not fully Vested in his Participant's Account
and the Participant may increase the Vested percentage in such
account.
(1) A separate account shall be established for the Participant's
interest in the Plan as of the time of the distribution, and
(2) At any relevant time the Participant's Vested portion of the
separate account shall be equal to an amount ("X") determined by
the formula:
X equals P(AB plus (RxD))-(R x D)
For purposes of applying the formula: P is the Vested percentage
at the relevant time. AB is the account balance at the relevant
time, D is the amount of distribution, and R is the ratio of the
account balance at the relevant time to the account balance after
distribution.
6.6 DISTRIBUTION OF BENEFITS UPON DEATH
(a) Unless otherwise elected as provided below, a Vested
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Participant who dies before the annuity starting date and who has a
surviving spouse shall have the Pre-Retirement Survivor Annuity paid to his
surviving spouse. The Participant's spouse may direct that payment of the
Pre-Retirement Survivor Annuity commence within a reasonable period after
the Participant's death. If the spouse does not so direct, payment of such
benefit will commence at the time the Participant would have attained the
later of his Normal Retirement Age or age 62. However, the spouse may elect
a later commencement date. Any distribution to the Participant's spouse
shall be subject to the rules specified in Section 6.6(h).
(b) Any election to waive the Pre-Retirement Survivor Annuity before the
Participant's death must be made by the Participant in writing during the
election period and shall require the spouse's irrevocable consent in the
same manner provided for in Section 65(a)(2). Further, the spouse's consent
must acknowledge the specific nonspouse Beneficiary. Notwithstanding the
foregoing, the nonspouse Beneficiary need not be acknowledged, provided the
consent of the spouse acknowledges that the spouse has the right to limit
consent only to a specific Beneficiary and that the spouse voluntarily
elects to relinquish such right.
(c) The election period to waive the Pre-Retirement Survivor Annuity shall
begin on the first day of the Plan Year in which the Participant attains
age 35 and end on the date of the Participant's death. An earlier waiver
(with spousal consent) may be made provided a written explanation of the
Pre-Retirement Survivor Annuity is given to the Participant and such waiver
becomes invalid at the beginning of the Plan Year in which the Participant
turns age 35. In the event a Vested Participant separates from service
prior to the beginning of the election period, the election period shall
begin on the date of such separation from service.
(d) With regard to the election, the Administrator shall provide each
Participant within the applicable period, with respect to such Participant
(and consistent with Regulations), a written explanation of the Pre-
Retirement Survivor Annuity containing comparable information to that
required pursuant to Section 6.5(a)(5). For the purposes of this paragraph,
the term "applicable period" means, with respect to a Participant,
whichever of the following periods ends last:
(1) The period beginning with the first day of the Plan Year in which the
Participant attains age 32 and ending with the close of the Plan Year
preceding the Plan Year in which the Participant attains age 35;
(2) A reasonable period after the individual becomes a Participant. For
this purpose, in the case of an individual who becomes a Participant
after age 32, the explanation must be provided by the end of the
three-year period beginning with the first day of the first Plan Year
for which the individual is a Participant;
(3) A reasonable period ending after the Plan no longer fully subsidizes
the cost of the Pre-Retirement Survivor Annuity with respect to the
Participant;
(4) A reasonable period ending after Code Section 401(a)(11) applies to
the Participant; or
(5) A reasonable period after separation from service in the case of a
Participant who separates before attaining age 35. For this purpose,
the Administrator must provide the explanation beginning one year
before the separation from service and ending one year after
separation.
(e) The Pre-Retirement Survivor Annuity provided for in this Section shall
apply only to Participants who are credited with an Hour of Service on or
after August 23, 1984. Former Participants who are not credited with an
Hour of Service on or after August 23, 1984 shall be provided with rights
to the Pre-Retirement Survivor Annuity in accordance with Section 303(e)(2)
of the Retirement Equity Act of 1984.
(f) If the value of the Pre-Retirement Survivor Annuity derived from Employer
and Employee contributions does not exceed $3,500 and has never exceeded
$3,500 at the time of any prior distribution, the Administrator shall
direct the immediate distribution of such amount to the Participant's
spouse. No distribution may be made under the preceding sentence after the
annuity starting date unless the spouse consents in writing. If the value
exceeds, or has ever exceeded at the time of any prior distribution,
$3,500, an immediate distribution of the entire amount may be made to the
surviving spouse, provided such surviving spouse consents in writing to
such distribution. Any written consent required under this paragraph must
be obtained not more than 90 days before commencement of the distribution
and shall be made in a manner consistent with Section 6.5(a)(2).
(g) (1) In the event there is an election to waive the Pre-Retirement Survivor
Annuity, and for death benefits in excess of the Pre-Retirement
Survivor Annuity, such death benefits shall be paid to the
Participant's Beneficiary by either of the following methods, as
elected by the Participant (or if no election has been made prior to
the Participant's death, by his Beneficiary) subject to the rules
specified in Section 6.6(h) and the selections made in the Adoption
Agreement:
(i) One lump-sum payment in cash or in property;
(ii) Payment in monthly, quarterly, semi-annual, or annual cash
installments over a period to be determined by the Participant or
his Beneficiary. After periodic installments commence, the
Beneficiary shall have the right to reduce the period over which
such periodic installments shall be made, and the cash amount of
such periodic installments shall be adjusted accordingly.
(iii) If death benefits in excess of the Pre-Retirement Survivor
Annuity are to be paid to the surviving spouse, such benefits may
be paid pursuant to (i) or (ii) above, or used to purchase an
annuity so as to increase the payments made pursuant to the Pre-
Retirement Survivor Annuity;
(2) In the event the death benefit payable pursuant to Section 6.2 is
payable in installments, then, upon the death of the Participant, the
Administrator may direct that the death benefit be segregated and
invested separately, and that the funds accumulated in the segregated
account be used for the payment of the installments.
(h) Notwithstanding any provision in the Plan to the contrary, distributions
upon the death of a Participant made on or after January 1, 1985, shall be
made in accordance with the following requirements and shall otherwise
comply with Code Section 401(a)(9) and the Regulations thereunder.
(1) If it is determined, pursuant to Regulations, that the distribution of
a Participant's interest has begun and the Participant dies before his
entire interest has been distributed to him, the remaining portion of
such interest shall be distributed at least as rapidly as under the
method of distribution selected pursuant to Section 6.5 as of his date
of death.
(2) If a Participant dies before he has begun to receive any distributions
of his interest in the Plan or before distri-
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butions are deemed to have begun pursuant to Regulations, then his
death benefit shall be distributed to his Beneficiaries in
accordance with the following rules subject to the selections made
in the Adoption Agreement and Subsections 6.6(h)(3) and 6.6(i)
below:
(i) The entire death benefit shall be distributed to the
Participant's Beneficiaries by December 31st of the calendar
year in which the fifth anniversary of the Participant's
death occurs:
(ii) The 5-year distribution requirement of (i) above shall not
apply to any portion of the deceased Participant's interest
which is payable to or for the benefit of a designated
Beneficiary. In such event, such portion shall be
distributed over the life of such designated Beneficiary
(or over a period not extending beyond the life expectancy
of such designated Beneficiary) provided such distribution
begins not later than December 31st of the calendar year
immediately following the calendar year in which the
Participant died:
(iii) However, in the event the Participant's spouse (determined
as of the date of the Participant's death) is his
designated Beneficiary, the provisions of (ii) above shall
apply except that the requirement that distributions
commence within one year of the Participant's death shall
not apply. In lieu thereof, distributions must commence on
or before the later of: (1) December 31st of the calendar
year immediately following the calendar year in which the
Participant died: or (2) December 31st of the calendar year
in which the Participant would have attained age 70 1/2. If
the surviving spouse dies before distributions to such
spouse begin, then the 5-year distribution requirement of
this Section shall apply as if the spouse was the
Participant.
(3) Notwithstanding subparagraph (2) above, or any selections made in
the Adoption Agreement, if a Participant's death benefits are to
be paid in the form of a Pre-Retirement Survivor Annuity, then
distributions to the Participant's surviving spouse must commence
on or before the later of: (1) December 31st of the calendar year
immediately following the calendar year in which the Participant
died; or (2) December 31st of the calendar year in which the
Participant would have attained age 70 1/2.
(i) For purposes of Section 6.6(h)(2), the election by a designated
Beneficiary to be excepted from the 5-year distribution requirement
(if permitted in the Adoption Agreement) must be made no later than
December 31st of the calendar year following the calendar year of the
Participant's death. Except, however, with respect to a designated
Beneficiary who is the Participant's surviving spouse, the election
must be made by the earlier of: (1) December 31st of the calendar year
immediately following the calendar year in which the Participant died
or, if later, the calendar year in which the Participant would have
attained age 70 1/2: or (2) December 31st of the ca1endar year which
contains the fifth anniversary of the date of the Participant's death.
An election by a designated Beneficiary must be in writing and shall
be irrevocable as of the last day of the election period stated
herein. In the absence of an election by the Participant or a
designated Beneficiary, the 5-year distribution requirement shall
apply.
(j) For purposes of this Section, the life expectancy of a Participant and
a Participant's spouse (other than in the case of a life annuity)
shall or shall not be redetermined annually as provided in the
Adoption Agreement and in accordance with Regulations. If the
Participant or the Participant's spouse may elect, pursuant to the
Adoption Agreement, to have life expectancies recalculated, then the
election, once made shall be irrevocable. If no election is made by
the time distributions must commence, then the life expectancy of the
Participant and the Participant's spouse shall not be subject to
recalculation. Life expectancy and joint and last survivor expectancy
shall be computed using the return multiples in Tables V and VI of
Regulation Section 1.72-9.
(k) In the event that less than 100% of a Participant's interest in the
Plan is distributed to such Participant's spouse, the portion of the
distribution attributable to the Participant's Voluntary Contribution
Account shall be in the same proportion that the Participant's
Voluntary Contribution Account bears to the Participant's total
interest in the Plan.
(l) Subject to the spouse's right of consent afforded under the Plan, the
restrictions imposed by this Section shall not apply if a Participant
has, prior to January 1, 1984, made a written designation to have his
death benefits paid in an alternative method acceptable under Code
Section 401(a) as in effect prior to the enactment of the Tax Equity
and Fiscal Responsibility Act of 1982.
6.7 TIME OF SEGREGATION OR DISTRIBUTION
Except as limited by Sections 6.5 and 6.6. whenever a distribution is to be
made, or a series of payments are to commence, on or as of an Anniversary Date,
the distribution or series of payments may be made or begun on such date or as
soon thereafter as is practicable, but in no event later than 180 days after the
Anniversary Date. However, unless a Former Participant elects in writing to
defer the receipt of benefits (such election may not result in a death benefit
that is more than incidental), the payment of benefits shall begin not later
than the 60th day after the close of the Plan Year in which the latest of the
following events occurs: (a) the date on which the Participant attains the
earlier of age 65 or the Normal Retirement Age specified herein: (b) the 10th
anniversary of the year in which the Participant commenced participation in the
Plan; or (c) the date the Participant terminates his service with the Employer.
Notwithstanding the foregoing, the failure of a Participant and, if applicable,
the Participant's spouse, to consent to a distribution pursuant to Section 6.5
(d), shall be deemed to be an election to defer the commencement of payment of
any benefit sufficient to satisfy this Section.
6.8 DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor, then the Administrator may
direct that such distribution be paid to the legal guardian, or if none, to a
parent of such Beneficiary or a responsible adult with whom the Beneficiary
maintains his residence, or to the custodian for such Beneficiary under the
Uniform Gift to Minors Act or Gift to Minors Act, if such is permitted by the
laws of the state in which said Beneficiary resides. Such a payment to the legal
guardian, custodian or parent of a minor Beneficiary shall fully discharge the
Trustee, Employer, and Plan from further liability on account thereof.
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution payable to a
Participant or his Beneficiary hereunder shall, at the later of the
Participant's attainment of age 62 or his Normal Retirement Age, remain unpaid
solely by reason of the inability of the Administrator, after sending a
registered letter, return receipt requested, to the last known address, and
after further diligent effort, to ascertain the whereabouts of such Participant
or his Beneficiary, the amount so distributable shall be treated as a Forfeiture
pursuant to the Plan. In the event a Participant or Beneficiary is located
subsequent to his benefit being reallocated, such benefit shall be restored,
first from
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Forfeitures, if any, and then from an additional Employer contribution if
necessary.
6.10 PRE-RETIREMENT DISTRIBUTION
If elected in the Adoption Agreement, at such time as a Participant shall have
attained the age specified in the Adoption Agreement, the Administrator, at the
election of the Participant, shall direct the Trustee to distribute up to the
entire amount then credited to the accounts maintained on behalf of the
Participant. However, no such distribution may be made to any Participant unless
his Participant's Account has become fully Vested. In the event that the
Administrator makes such a distribution, the Participant shall continue to be
eligible to participate in the Plan on the same basis as any other Employee. Any
distribution made pursuant to this Section shall be made in a manner consistent
with Section 6.5, including but not limited to, all notice and consent
requirements required by Code Sections 411(a)(11) and 417 and the Regulations
thereunder.
Notwithstanding the above, pre-retirement distributions from a Participant's
Elective Account and Qualified Non-Elective Account shall not be permitted prior
to the Participants attaining 59 1/2 except as otherwise permitted under the
terms of the Plan.
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) The Administrator, at the election of the Participant, shall direct
the Trustee to distribute to any Participant in any one Plan Year up
to the lesser of (1) 100% of his accounts as specified in the Adoption
Agreement valued as of the last Anniversary Date or other valuation
date or (2) the amount necessary to satisfy the immediate and heavy
financial need of the Participant. Any distribution made pursuant to
this Section shall be deemed to be made as of the first day of the
Plan Year or, if later, the valuation date immediately preceding the
date of distribution, and the account from which the distribution is
made shall be reduced accordingly. Withdrawal under this Section
shall be authorized only if the distribution is on account of one of
the following or any other items permitted by the Internal Revenue
Service:
(1) Medical expenses described in Code Section 213(d) incurred by the
Participant, his spouse, or any of his dependents (as defined in
Code Section 152);
(2) The purchase (excluding mortgage payments) of a principal
residence for the Participant;
(3) Payment of tuition and related educational fees for the next 12
months of post-secondary education for the Participant, his
spouse, children, or dependents; or
(4) The need to prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage of the
Participant's principal residence.
(b) No such distribution shall be made from the Participant's Account
until such Account has become fully Vested.
(c) No distribution shall be made pursuant to this Section unless the
Administrator, based upon the Participant's representation and such
other facts as are known to the Administrator, determines that all of
the following conditions are satisfied:
(1) The distribution is not in excess of the amount of the immediate
and heavy financial need of the Participant (including any amounts
necessary to pay any federal, state, or local taxes or penalties
reasonably anticipated to result from the distribution);
(2) The Participant has obtained all distributions, other than
hardship distributions, and all nontaxable loans currently
available under all plans maintained by the Employer;
(3) The Plan, and all other plans maintained by the Employer, provide
that the Participant's elective deferrals and voluntary Employee
contributions will be suspended for at least twelve (12) months
after receipt of the hardship distribution; and
(4) The Plan, and all other plans maintained by the Employer, provide
that the Participant may not make elective deferrals for the
Participant's taxable year immediately following the taxable year
of the hardship distribution in excess of the applicable limit
under Code Section 402(g) for such next taxable year less the
amount of such Participant's elective deferrals for the taxable
year of the hardship distribution.
(d) Notwithstanding the above, distributions from the Participant's
Elective Account and Qualified Non-Elective Account pursuant to this
Section shall be limited solely to the Participant's Deferred
Compensation and any income attributable thereto credited to the
Participant's Elective Account as of December 31, 1988.
(e) Any distribution made pursuant to this Section shall be made in a
manner which is consistent with and satisfies the provisions of
Section 6.5, including, but not limited to, all notice and consent
requirements of Code Sections 411(a)(ll) and 417 and the Regulations
thereunder.
6.12 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS
All rights and benefits, including elections, provided to a Participant in this
Plan shall be subject to the rights afforded to any "alternate payee" under a
"qualified domestic relations order." Furthermore, a distribution to an
"alternate payee" shall be permitted if such distribution is authorized by a
"qualified domestic relations order," even if the affected Participant has not
reached the "earliest retirement age" under the Plan. For the purposes of this
Section, "alternate payee," "qualified domestic relations order" and "earliest
retirement age" shall have the meaning set forth under Code Section 414(p).
6.13 SPECIAL RULE FOR NON-ANNUITY PLANS
If elected in the Adoption Agreement, the following shall apply to a Participant
in a Profit Sharing Plan and to any distribution, made on or after the first day
of the first plan year beginning after December 31, 1988, from or under a
separate account attributable solely to accumulated deductible employee
contributions, as defined in Code Section 72(o)(5)(B), and maintained on behalf
of a participant in a money purchase pension plan, (including a target benefit
plan):
(a) The Participant shall be prohibited from electing benefits in the form
of a life annuity;
(b) Upon the death of the Participant, the Participant's entire Vested
account balances will be paid to his or her surviving spouse, or, if
there is no surviving spouse or the surviving spouse has already
consented to waive his or her benefit, in accordance with Section 6.6,
to his designated Beneficiary; and
(c) Except to the extent otherwise provided in this Section and Section
6.5(h), the other provisions of Sections 6.2, 6.5 and 6.6 regarding
spousal consent and the forms of distributions shall be inoperative
with respect to this Plan.
This Section shall not apply to any Participant if it is determined that this
Plan is a direct or indirect transferee of a defined benefit plan or money
purchase plan, or a target benefit plan, stock bonus or profit sharing plan
which would otherwise provide for a life annuity form of payment to the
Participant.
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE
The Trustee shall have the following categories of responsibilities:
(a) Consistent with the "funding policy and method" determined by the
Employer to invest, manage, and control the
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Plan assets subject, however, to the direction of an Investment Manager
if the Employer should appoint such manager as to all or a portion of
the assets of the Plan:
(b) At the direction of the Administrator, to pay benefits required under
the Plan to be paid to Participants, or, in the event of their death,
to their Beneficiaries;
(c) To maintain records of receipts and disbursements and furnish to the
Employer and/or Administrator for each Plan Year a written annual
report per Section 7.7; and
(d) If there shall be more than one Trustee, they shall act by a majority
of their number, but may authorize one or more of them to sign papers
on their behalf.
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE
(a) The Trustee shall, except as provided in the Adoption Agreement, invest
and reinvest the Trust Fund to keep the Trust Fund invested without
distinction between principal and income and in such securities or
property, real or personal, wherever situated, as the Trustee shall
deem advisable, including, but not limited to, stocks, common or
preferred, bonds and other evidences of indebtedness or ownership, and
real estate or any interest therein. The Trustee shall at all times in
making investments of the Trust Fund consider, among other factors, the
short and long-term financial needs of the Plan on the basis of
information furnished by the Employer. In making such investments, the
Trustee shall not be restricted to securities or other property of the
character expressly authorized by the applicable law for trust
investments; however, the Trustee shall give due regard to any
limitations imposed by the Code or the Act so that at all times this
Plan may qualify as a qualified Plan and Trust.
(b) The Trustee may employ a bank or trust company pursuant to the terms of
its usual and customary bank agency agreement, under which the duties
of such bank or trust company shall be of a custodial, clerical and
record-keeping nature.
(c) The Trustee may from time to time transfer to a common, collective, or
pooled trust fund maintained by any corporate Trustee hereunder
pursuant to Revenue Ruling 81-100, all or such part of the Trust Fund
as the Trustee may deem advisable, and or such part or all of the Trust
Fund so transferred shall be subject to all the terms and provisions of
the common, collective, or pooled trust fund which contemplate the
commingling for investment purposes of such trust assets with trust
assets of other trusts. The Trustee may withdraw from such common,
collective, or pooled trust fund all or such part of the Trust Fund as
the Trustee may deem advisable.
(d) The Trustee, at the direction of the Administrator and pursuant to
instructions from the individual designated in the Adoption Agreement
for such purpose and subject to the conditions set forth in the
Adoption Agreement shall ratably apply for, own, and pay all premiums
on Contracts on the lives of the Participants. Any initial or
additional Contract purchased on behalf of a Participant shall have a
face amount of not less than $1,000, the amount set forth in the
Adoption Agreement, or the limitation of the Insurer, whichever is
greater. If a life insurance Contract is to be purchased for a
Participant, the aggregate premium for ordinary life insurance for each
Participant must be less than 50% of the aggregate contributions and
Forfeitures allocated to a Participant's Combined Account. For purposes
of this limitation, ordinary life insurance Contracts are Contracts
with both non-decreasing death benefits and non-increasing premiums. If
term insurance or universal life insurance is purchased with such
contributions, the aggregate premium must be 25% or less of the
aggregate contributions and Forfeitures allocated to a Participant's
Combined Account. If both term insurance and ordinary life insurance
are purchased with such contributions, the amount expended for term
insurance plus one-half of the premium for ordinary life insurance may
not in the aggregate exceed 25% of the aggregate Employer contributions
and Forfeitures allocated to a Participant's Combined Account. The
Trustee must distribute the Contracts to the Participant or convert the
entire value of the Contracts at or before retirement into cash or
provide for a periodic income so that no portion of such value may be
used to continue life insurance protection beyond retirement.
Notwithstanding the above, the limitations imposed herein with respect
to the purchase of life insurance shall not apply, in the case of a
Profit Sharing Plan, to the portion of a Participant's Account that has
accumulated for at least two (2) Plan Years.
Notwithstanding anything hereinabove to the contrary, amounts credited
to a Participant's Qualified Voluntary Employee Contribution Account
pursuant to Section 4.14, shall not be applied to the purchase of life
insurance contracts.
(e) The Trustee will be the owner of any life insurance Contract purchased
under the terms of this Plan. The Contract must provide that the
proceeds will be payable to the Trustee; however, the Trustee shall be
required to pay over all proceeds of the Contract to the Participant's
designated Beneficiary in accordance with the distribution provisions
of Article VI.A Participant's spouse will be designated Beneficiary
pursuant to Section 6.2. unless a qualified election has been made in
accordance with Sections 6.5 and 6.6 of the Plan, if applicable. Under
no circumstances shall the Trust retain any part of the proceeds.
However, the Trustee shall not pay the proceeds in a method that would
violate the requirements of the Retirement Equity Act, as stated in
Article VI of the Plan, or Code Section 401(a)(9) and the Regulations
hereunder.
7.3 OTHER POWERS OF THE TRUSTEE
The Trustee, in addition to all powers and authorities under common
law, statutory authority, including the Act, and other provisions of this Plan,
shall have the following powers and authorities, except as provided in the
Adoption Agreement to be exercised in the Trustee's sole discretion:
(a) To purchase, or subscribe for, any securities or other property and to
retain the same. In conjunction with the purchase of securities, margin
accounts may be opened and maintained;
(b) To sell, exchange, convey, transfer, grant options to purchase, or
otherwise dispose of any securities or other property held by the
Trustee, by private contract or at public auction. No person dealing
with the Trustee shall be bound to see to the application of the
purchase money or to inquire into the validity, expediency, or
propriety of any such sale or other disposition, with or without
advertisement;
(c) To vote upon any stocks, bonds, or other securities: to give general or
special proxies or powers of attorney with or without power of
substitution; to exercise any conversion privileges, subscription
rights or other options, and to make any payments incidental thereto;
to oppose, or to consent to, or otherwise participate in, corporate
reorganizations or other changes affecting corporate securities, and to
delegate discretionary powers, and to pay any assessments or charges in
connection therewith; and generally to exercise any of the powers of
an owner with respect to stocks, bonds, securities, or other property;
(d) To cause any securities or other property to be registered in the
Trustee's own name or in the name of one or more
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of the Trustee's nominees, and to hold any investments in bearer form,
but the books and records of the Trustee shall at all times show that
all such investments are part of the Trust Fund:
(e) To borrow or raise money for the purposes of the Plan in such amount,
and upon such terms and conditions, as the Trustee shall deem advisable;
and for any sum so borrowed, to issue a promissory note as Trustee, and
to secure the repayment thereof by pledging all, or any part, of the
Trust Fund; and no person lending money to the Trustee shall be bound to
see to the application of the money lent or to inquire into the
validity, expediency, or propriety of any borrowing;
(f) To keep such portion of the Trust Fund in cash or cash balances as the
Trustee may, from time to time, deem to be in the best interests of the
Plan, without liability for interest thereon;
(g) To accept and retain for such time as the Trustee may deem advisable any
securities or other property received or acquired as Trustee hereunder,
whether or not such securities or other property would normally be
purchased as investments hereunder;
(h) To make, execute, acknowledge, and deliver any and all documents of
transfer and conveyance and any and all other instruments that may be
necessary or appropriate to carry out the powers herein granted;
(i) To settle, compromise, or submit to arbitration any claims, debts, or
damages due or owing to or from the Plan, to commence or defend suits
or legal or administrative proceedings, and to represent the Plan in all
suits and legal and administrative proceedings;
(j) To employ suitable agents and counsel and to pay their reasonable
expenses and compensation, and such agent or counsel may or may not be
agent or counsel for the Employer;
(k) To apply for and procure from the Insurer as an investment of the Trust
Fund such annuity, or other Contracts (on the life of any Participant)
as the Administrator shall deem proper: to exercise, at any time or from
time to time, whatever rights and privileges may be granted under such
annuity, or other Contracts; to collect, receive, and settle for the
proceeds of all such annuity, or other Contracts as and when entitled to
do so under the provisions thereof;
(l) To invest funds of the Trust in time deposits or savings accounts
bearing a reasonable rate of interest in the Trustee's bank;
(m) To invest in Treasury Bills and other forms of United States government
obligations;
(n) To sell, purchase and acquire put or call options if the options are
traded on and purchased through a national securities exchange
registered under the Securities Exchange Act of 1934, as amended, or, if
the options are not traded on a national securities exchange, are
guaranteed by a member firm of the New York Stock Exchange;
(o) To deposit monies in federally insured savings accounts or certificates
of deposit in banks or savings and loan associations;
(p) To pool all or any of the Trust Fund, from time to time, with assets
belonging to any other qualified employee pension benefit trust created
by the Employer or any Affiliated Employer, and to commingle such assets
and make joint or common investments and carry joint accounts on behalf
of this Plan and such other trust or trusts, allocating undivided shares
or interests in such investments or accounts or any pooled assets of the
two or more trusts in accordance with their respective interests;
(q) To do all such acts and exercise all such rights and privileges,
although not specifically mentioned herein, as the Trustee may deem
necessary to carry out the purposes of the Plan.
(r) Directed Investment Account. The powers granted to the Trustee shall be
exercised in the sole fiduciary discretion of the Trustee. However, if
elected in the Adoption Agreement, each Participant may direct the
Trustee to separate and keep separate all or a portion of his interest
in the Plan; and further each Participant is authorized and empowered,
in his sole and absolute discretion, to give directions to the Trustee
in such form as the Trustee may require concerning the investment of the
Participant's Directed Investment Account, which directions must be
followed by the Trustee subject, however, to restrictions on payment of
life insurance premiums. Neither the Trustee nor any other persons
including the Administrator or otherwise shall be under any duty to
question any such direction of the Participant or to review any
securities or other property, real or personal, or to make any
suggestions to the Participant in connection therewith, and the Trustee
shall comply as promptly as practicable with directions given by the
Participant hereunder. Any such direction may be of a continuing nature
or otherwise and may be revoked by the Participant at any time in such
form as the Trustee may require. The Trustee may refuse to comply with
any direction from the Participant in the event the Trustee, in its sole
and absolute discretion, deems such directions improper by virtue of
applicable law, and in such event, the Trustee shall not be responsible
or liable for any loss or expense which may result. Any costs and
expenses related to compliance with the Participant's directions shall
be borne by the Participant's Directed Investment Account.
Notwithstanding anything hereinabove to the contrary, the Trustee shall
not, at any time after December 31, 1981, invest any portion of a
Directed Investment Account in "collectibles" within the meaning of that
term as employed in Code Section 408(m).
7.4 LOANS TO PARTICIPANTS
(a) If specified in the Adoption Agreement, the Trustee may, in the
Trustee's sole discretion, make loans to Participants or Beneficiaries
under the following circumstances: (1) loans shall be made available to
all Participants and Beneficiaries on a reasonably equivalent basis; (2)
loans shall not be made available to Highly Compensated Employees in an
amount greater than the amount made available to other Participants; (3)
loans shall bear a reasonable rate of interest: (4) loans shall be
adequately secured: and (5) shall provide for periodic repayment over a
reasonable period of time.
(b) Loans shall not be made to any Shareholder-Employee or Owner-Employee
unless an exemption for such loan is obtained pursuant to Act Section
408 and further provided that such loan would not be subject to tax
pursuant to Code Section 4975.
(c) Loans shall not be granted to any Participant that provide for a
repayment period extending beyond such Participant's Normal Retirement
Date.
(d) Loans made pursuant to this Section (when added to the outstanding
balance of all other loans made by the Plan to the Participant) shall be
limited to the lesser of:
(1) $50,000 reduced by the excess (if any) of the highest outstanding
balance of loans from the Plan to the Participant during the one
year period ending on the day before the date on which such loan is
made, over the outstanding balance of loans from the Plan to the
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Participant on the date on which such loan was made, or
(2) the greater of (A) one-half (1/2) of the present value of the non-
forfeitable accrued benefit of the Employee under the Plan, or (B),
if permitted pursuant to the Adoption Agreement, $10,000.
For purposes of this limit, all plans of the Employer shall be
considered one plan. Additionally, with respect to any loan made
prior to January 1, 1987, the $50,000 limit specified in (1) above
shall be unreduced.
(e) No Participant loan shall take into account the present value of such
Participant's Qualified Voluntary Employee Contribution Account.
(f) Loans shall provide for level amortization with payments to be made not
less frequently than quarterly over a period not to exceed five (5)
years. However, loans used to acquire any dwelling unit which, within a
reasonable time, is to be used (determined at the time the loan is made)
as a principal residence of the Participant shall provide for periodic
repayment over a reasonable period of time that may exceed five (5)
years. Notwithstanding the foregoing, loans made prior to January 1,
1987 which are used to acquire, construct, reconstruct or substantially
rehabilitate any dwelling unit which, within a reasonable period of time
is to be used (determined at the time the loan is made) as a principal
residence of the Participant or a member of his family (within the
meaning of Code Section 267(c)(4)) may provide for periodic repayment
over a reasonable period of time that may exceed five (5) years.
Additionally, loans made prior to January 1, 1987, may provide for
periodic payments which are made less frequently than quarterly and
which do not necessarily result in level amortization.
(g) An assignment or pledge of any portion of a Participant's interest in
the Plan and a loan, pledge, or assignment with respect to any insurance
Contract purchased under the Plan, shall be treated as a loan under this
Section.
(h) Any loan made pursuant to this Section after August 18, 1985 where the
vested interest of the Participant is used to secure such loan shall
require the written consent of the Participant's spouse in a manner
consistent with Section 6.5(a) provided the spousal consent requirements
of such Section apply to the Plan. Such written consent must be obtained
within the 90-day period prior to the date the loan is made. Any
security interest held by the Plan by reason of an outstanding loan to
the Participant shall be taken into account in determining the amount of
the death benefit or Pre-Retirement Survivor Annuity. However, no
spousal consent shall be required under this paragraph if the total
accrued benefit subject to the security is not in excess of $3,500.
(i) With regard to any loans granted or renewed on or after the last day of
the first Plan Year beginning after December 31, 1988, a Participant
loan program shall be established which must inc1ude, but need not be
limited to, the following:
(1) the identity of the person or positions authorized to administer the
Participant loan program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or denied;
(4) limitations, if any, on the types and amounts of loans offered,
including what constitutes a hardship or financial need if selected
in the Adoption Agreement;
(5) the procedure under the program for determining a reasonable rate of
interest;
(6) the types of collateral which may secure a Participant loan; and
(7) the events constituting default and the steps that will be taken to
preserve plan assets,
Such Participant loan program shall be contained in a separate written
document which, when properly executed, is hereby incorporated by
reference and made a part of this plan. Furthermore, such Participant
loan program may be modified or amended in writing from time to time
without the necessity of amending this Section of the Plan.
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS
At the direction of the Administrator, the Trustee shall, from time to time, in
accordance with the terms of the Plan, make payments out of the Trust Fund. The
Trustee shall not be responsible in any way for the application of such
payments.
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES
The Trustee shall be paid such reasonable compensation as set forth in the
Trustee's fee schedule (if the Trustee has such a schedule) or as agreed upon in
writing by the Employer and the Trustee. An individual serving as Trustee who
already receives full-time pay from the Employer shall not receive compensation
from this Plan. In addition, the Trustee shall be reimbursed for any reasonable
expenses, including reasonable counsel fees incurred by it as Trustee. Such
compensation and expenses shall be paid from the Trust Fund unless paid or
advanced by the Employer. All taxes of any kind and all kinds whatsoever that
may be levied or assessed under existing or future laws upon, or in respect of,
the Trust Fund or the income thereof, shall be paid from the Trust Fund.
7.7 ANNUAL REPORT OF THE TRUSTEE
Within a reasonable period of time after the later of the Anniversary Date or
receipt of the Employer's contribution for each Plan Year, the Trustee, or its
agent, shall furnish to the Employer and Administrator a written statement of
account with respect to the Plan Year for which such contribution was made
setting forth:
(a) the net income, or loss, of the Trust Fund;
(b) the gains, or losses, realized by the Trust Fund upon sales or other
disposition of the assets;
(c) the increase, or decrease, in the value of the Trust Fund;
(d) all payments and distributions made from the Trust fund; and
(e) such further information as the Trustee and/or Administrator deems
appropriate. The Employer, forthwith upon its receipt of each such
statement of account, shall acknowledge receipt thereof in writing and
advise the Trustee and/or Administrator of its approval or disapproval
thereof. Failure by the Employer to disapprove any such statement of
account within thirty (30) days after its receipt thereof shall be
deemed an approval thereof. The approval by the Employer of any
statement of account shall be binding as to all matters embraced therein
as between the Employer and the Trustee to the same extent as if the
account of the Trustee had been settled by judgement or decree in an
action for a judicial settlement of its account in a court of competent
jurisdiction in which the Trustee, the Employer and all persons having
or claiming an interest in the Plan were parties; provided, however,
that nothing herein contained shall deprive the Trustee of its right to
have its accounts judicially settled if the Trustee so desires.
7.8 AUDIT
(a) If an audit of the Plan's records shall be required by the Act and the
regulations thereunder for any Plan Year, the Administrator shall direct
the Trustee to engage on behalf of all Participants an independent
qualified public accountant for that purpose. Such accountant shall,
after an audit
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of the books and records of the Plan in accordance with generally
accepted auditing standards, within a reasonable period after the close
of the Plan Year, furnish to the Administrator and the Trustee a report
of his audit setting forth his opinion as to whether any statements,
schedules or lists, that are required by Act Section 103 or the
Secretary of Labor to be filed with the Plan's annual report, are
presented fairly in conformity with generally accepted accounting
principles applied consistently.
(b) All auditing and accounting fees shall be an expense of and may, at the
election of the Administrator, be paid from the Trust Fund.
(c) If some or all of the information necessary to enable the Administrator
to comply with Act Section 103 is maintained by a bank, insurance
company, or similar institution, regulated and supervised and subject
to periodic examination by a state or federal agency, it shall transmit
and certify the accuracy of that information to the Administrator as
provided in Act Section 103(b) within one hundred twenty (120) days
after the end of the Plan Year or such other date as may be prescribed
under regulations of the Secretary of Labor.
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE
(a) The Trustee may resign at any time by delivering to the Employer, at
least thirty (30) days before its effective date, a written notice of
his resignation.
(b) The Employer may remove the Trustee by mailing by registered or
certified mail, addressed to such Trustee at his last known address, at
least thirty (30) days before its effective date, a written notice of
his removal.
(c) Upon the death, resignation, incapacity, or removal of any Trustee, a
successor may be appointed by the Employer, and such successor, upon
accepting such appointment in writing and delivering same to the
Employer, shall, without further act, become vested with all the
estate, rights, powers, discretions, and duties of his predecessor with
like respect as if he were originally named as a Trustee herein. Until
such a successor is appointed, the remaining Trustee or Trustees shall
have full authority to act under the terms of the Plan.
(d) The Employer may designate one or more successors prior to the death,
resignation, incapacity, or removal of a Trustee. In the event a
successor is so designated by the Employer and accepts such
designation, the successor shall, without further act, become vested
with all the estate, rights, powers, discretions, and duties of his
predecessor with the like effect as if he were originally named as
Trustee herein immediately upon the death, resignation, incapacity, or
removal of his predecessor.
(e) Whenever any Trustee hereunder ceases to serve as such he shall furnish
to the Employer and Administrator a written statement of account with
respect to the portion of the Plan Year during which he served as
Trustee. This statement shall be either (i) included as part of the
annual statement of account for the Plan Year required under Section
7.7 or (ii) set forth in a special statement. Any such special
statement of account should be rendered to the Employer no later than
the due date of the annual statement of account for the Plan Year.
The procedures set forth in Section 7.7 for the approval by the
Employer of annual statements of account shall apply to any special
statement of account rendered hereunder and approval by the Employer of
any such special statement in the provided in Section 7.7 shall have
the same effect upon the statement as the Employer's approval of an
annual statement of account. No successor to the Trustee shall have any
duty or responsibility to investigate the acts or transactions of any
predecessor who has rendered all statements of account required by
Section 7.7 and this subparagraph.
7.10 TRANSFER OF INTEREST
Notwithstanding any other provision contained in this Plan, the Trustee at the
direction of the Administrator shall transfer the Vested interest, if any, of
such Participant in his account to another trust forming part of a pension,
profit sharing, or stock bonus plan maintained by such Participant's new
employer and represented by said employer in writing as meeting the requirements
of Code Section 401(a), provided that the trust to which such transfers are made
permits the transfer to be made.
7.11 TRUSTEE INDEMNIFICATION
The Employer agrees to indemnify and save harmless the Trustee against any and
all claims, losses, damages, expenses and liabilities the Trustee may incur in
the exercise and performance of the Trustee's powers and duties hereunder,
unless the same are determined to be due to gross negligence or willful
misconduct
7.12 EMPLOYER SECURITIES AND REAL PROPERTY
The Trustee shall be empowered to acquire and hold "qualifying Employer
securities" and "qualifying Employer real property," as those terms are defined
in the Act. However, no more than 100% of the fair market value of all the
assets in the Trust Fund may be invested in "qualifying Employer securities" and
"qualifying Employer real property".
7.13 PASSIVE TRUSTEE
Notwithstanding any other provisions of this Plan to the contrary and to the
extent permitted under applicable law, in the event The First National Bank of
Boston is Trustee (or any successor Trustee is appointed by the prototype
sponsoring organization), such Trustee shall exercise powers of the Trustee
under the Plan only at the direction and upon the instructions of the Plan
Administrator and the duties and obligations of The First National Bank of
Boston (or any successor Trustee appointed by the prototype sponsoring
organization) as Trustee shall be limited to holding title to the Plan
assets and all other duties of the Trustee set forth in the Plan shall be the
obligation of the Plan Administrator. The provisions of the Plan applicable to
The First National Bank of Boston shall apply to any successor appointed
by the prototype sponsoring organization.
7.14 DIRECT ROLLOVER
(a) This Section applies to distributions made on or after January 1, 1993.
Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's election under this Section, a
distributee may elect, at the time and in the manner prescribed by the
Plan Administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by
the distributee in a direct rollover.
(b) An eligible rollover distribution is any distribution of all or any
portion of the balance to the credit of the distributee, except that
an eligible rollover distribution does not include; any distribution
that is one of a series of substantially equal periodic payments (not
less frequently than annually) made for the life (or life expectancy)
of the distributee or the joint lives (or joint life expectancies) of
the distributee and the distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent
such distribution is required under section 401(a)(9) of the Code; and
the portion of any distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
(c) An eligible retirement plan is 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
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the Code, or the 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 an individual retirement annuity.
(d) 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.
(e) A direct rollover is a payment by the Plan to the eligible retirement
plan specified by the distributee.
ARTICLE VIII
AMENDMENT, TERMINATION, AND MERGERS
8.1 AMENDMENT
(a) The Employer shall have the right at any time to amend this Plan
subject to the limitations of this Section. However, any amendment
which affects the rights, duties or responsibilities of the Trustee and
Administrator may only be made with the Trustee's and Administrator's
written consent. Any such amendment shall become effective as provided
therein upon its execution. The Trustee shall not be required to
execute any such amendment unless the amendment affects the duties of
the Trustee hereunder.
(b) The Employer may (1) change the choice of options in the Adoption
Agreement (2) add overriding language in the Adoption Agreement when
such language is necessary to satisfy Code Sections 415 or 416 because
of the required aggregation of multiple plans, and (3) add certain
model amendments published by the Internal Revenue Service which
specifically provide that their adoption will not cause the Plan to be
treated as an individually designed plan. An Employer that amends the
Plan for any other reason, including a waiver of the minimum funding
requirement under Code Section 412(d), will no longer participate in
this Prototype Plan and will be considered to have an individually
designed plan.
Furthermore, an Employer may not use this Plan and will be deemed to
have an individually designed plan if the Employer does not maintain a
product of the sponsor of the Plan or any of its affiliates or
subsidiaries.
(c) The Employer expressly delegates authority to the sponsoring
organization of this Plan, the right to amend this Plan by submitting
a copy of the amendment to each Employer who has adopted this Plan
after first having received a ruling or favorable determination from
the Internal Revenue Service that the Plan as amended qualifies under
Code Section 401(a) and the Act. For purposes of this Section, the mass
submitter shall be recognized as the agent of the sponsoring
organization. If the sponsoring organization does not adopt the
amendments made by the mass submitter, it will no longer be identical
to or a minor modifier of the mass submitter plan.
(d) No amendment to the Plan shall be effective if it authorizes or permits
any part of the Trust Fund (other than such part as is required to pay
taxes and administration expenses) to be used for or diverted to any
purpose other than for the exclusive benefit of the Participants or
their Beneficiaries or estates; or causes any reduction in the amount
credited to the amount of any Participant; or causes or permits any
portion of the Trust Fund to revert to or become property of the
Employer.
(e) Except as permitted by Regulations (including Regulation 1.411(d)-4) no
Plan amendment or transaction having the effect of a Plan amendment
(such as a merger, plan transfer or similar transaction) shall be
effective if it eliminates or reduces any "Section 411(d)6) protected
benefit" or adds or modifies conditions relating to "Section 411(d)(6)
protected benefits" the result of which is a further restriction on
such benefit unless such protected benefits are preserved with respect
to benefits accrued as of the later of the adoption date or effective
date of the amendment. "Section 411(d)(6) protected benefits" are
benefits described in Code Section 411(d)(6)(A), early retirement
benefits and retirement-type subsidies, and optional forms of benefit.
82 TERMINATION
(a) The Employer shall have the right at any time to terminate the Plan by
delivering to the Trustee and Administrator written notice of such
termination. Upon any full or partial termination all amounts credited
to the affected Participants' Combined Accounts shall become 100%
Vested and shall not thereafter be subject to forfeiture, and all
unallocated amounts shall be allocated to the accounts of all
Participants in accordance with the provisions hereof.
(b) Upon the full termination of the Plan, the Employer shall direct the
distribution of the assets to Participants in a manner which is
consistent with and satisfies the provisions of Section 6.5.
Distributions to a Participant shall be made in (or in property if
permitted in the Adoption Agreement) or through the purchase of
irrevocable non-transferable deferred commitments from the Insurer.
Except as permitted by Regulations, the termination of the Plan shall
not result in the reduction of "Section 411(d)(6) protected benefits"
as described in Section 8.1.
8.3 MERGER OR CONSOLIDATION
This Plan may be merged or consolidated with, or its assets and/or liabilities
may be transferred to any other plan only if the benefits which would be
received by a Participant of this Plan, in the event of a termination of the
plan immediately after such transfer, merger or consolidation, are at least
equal to the benefits the Participant would have received if the Plan had
terminated immediately before the transfer, merger or consolidation and such
merger or consolidation does not otherwise result in the elimination or
reduction of any "Section 411(d)(6) protected benefits" as described in Section
8.1(e).
ARTICLE IX
MISCELLANEOUS
9.1 EMPLOYER ADOPTIONS
(a) Any organization may become the Employer hereunder by executing the
Adoption Agreement in form satisfactory to the Trustee, and it shall
provide such additional information as the Trustee may require. The
consent of the Trustee to act as such shall be signified by its
execution of the Adoption Agreement.
(b) Except as otherwise provided in this Plan, the affiliation of the
Employer and the participation of its Participants shall be separate
and apart from that of any other employer and its participants
hereunder.
9.2 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract between the Employer and
any Participant or to be a consideration or an inducement for the employment of
any Participant or Employee. Nothing contained in this Plan shall be deemed to
give any Participant or
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Employee the right to be retained in the service of the Employer or to interfere
with the right of the Employer to discharge any Participant or Employee at any
time regardless of the effect which such discharge shall have upon him as a
Participant of this Plan.
9.3 ALIENATION
(a) Subject to the exceptions provided below, no benefit which shall be
payable to any person (including a Participant or his Beneficiary)
shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, or charge, and any attempt
to anticipate, alienate, sell, transfer, assign, pledge, encumber, or
charge the same shall be void; and no such benefit shall in any
manner be liable for, or subject to, the debts, contracts,
liabilities, engagements, or torts of any such person, nor shall it be
subject to attachment or legal process for or against such person, and
the same shall not be recognized except to such extent as may be
required by law.
(b) This provision shall not apply to the extent a Participant or
Beneficiary is indebted to the Plan, for any reason, under any
provision of this Plan. At the time a distribution is to be made to or
for a Participant's or Beneficiary's benefit, such proportion of the
amount to be distributed as shall equal such indebtedness shall be
paid to the Plan, to apply against or discharge such indebtedness.
Prior to making a payment, however, the Participant or Beneficiary
must be given written notice by the Administrator that such
indebtedness is to be so paid in whole or part from his Participant's
Combined Account. If the Participant or Beneficiary does not agree
that the indebtedness is a valid claim against his Vested
Participant's Combined Account, he shall be entitled to a review of
the validity of the claim in accordance with procedures provided in
Sections 2.12 and 2.13.
(c) This provision shall not apply to a "qualified domestic relations
order" defined in Code Section 414(p), and those other domestic
relations orders permitted to be so treated by the Administrator under
the provisions of the Retirement Equity Act of 1984. The Administrator
shall establish a written procedure to determine the qualified stams
of domestic relations orders and to administer distributions under
such qualified orders. Further, to the extent provided under a
"qualified domestic relations order", a former spouse of a Participant
shall be treated as the spouse or surviving spouse for all purposes
under the Plan.
9.4 CONSTRUCTION OF PLAN
This Plan and Trust shall be construed and enforced according to the Act and the
laws of the State or Commonwealth in which the Employer's principal office is
located, other than its laws respecting choice of law, to the extent not pre-
empted by the Act.
9.5 GENDER AND NUMBER
Wherever any words are used herein in the masculine, feminine or neuter gender,
they shall be construed as though they were also used in another gender in all
cases where they would so apply, and whenever any words are used herein in the
singular or plural form, they shall be construed as though they were also used
in the other form in all cases where they would so apply.
9.6 LEGAL ACTION
In the event any claim, suit, or proceeding is brought regarding the Trust
and/or Plan established hereunder to which the Trustee or the Administrator may
be a party, and such claim, suit, or proceeding is resolved in favor of the
Trustee or Administrator, they shall be entitled to be reimbursed from the Trust
Fund for any and all costs, attorney's fees, and other expenses pertaining
thereto incurred by them for which they shall have become liable.
9.7 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise specifically permitted by law,
it shall be impossible by operation of the Plan or of the Trust, by
termination of either, by power of revocation or amendment, by the
happening of any contingency, by collateral arrangement or by any
other means, for any part of the corpus or income of any Trust Fund
maintained pursuant to the Plan or any funds contributed thereto to be
used for, or diverted to, purposes other than the exclusive benefit of
Participants, Retired Participants, or their Beneficiaries.
(b) In the event the Employer shall make a contribution under a mistake of
fact pursuant to Section 403(c)(2)(A) of the Act, the Employer may
demand repayment of such contribution at any time within one (1) year
following the time of payment and the Trustees shall return such
amount to the Employer within the one (1) year period. Earnings of the
Plan attributable to the contributions may not be returned to the
Employer but any losses attributable thereto must reduce the amount so
returned.
9.8 BONDING
Every Fiduciary, except a bank or an insurance company, unless exempted by the
Act and regulations thereunder, shall be bonded in an amount not less than 10%
of the amount of the funds such Fiduciary handles; provided, however, that the
minimum bond shall be $1.000 and the maximum bond, $500.000. The amount of
funds handled shall be determined at the beginning of each Plan Year by the
amount of funds handled by such person, group, or class to be covered and their
predecessors, if any, during the preceding Plan Year, or if there is no
preceding Plan Year, then by the amount of the funds to be handled during the
then current year. The bond shall provide protection to the Plan against any
loss by reason of acts of fraud or dishonesty by the Fiduciary alone or in
connivance with others. The surety shall be a corporate surety company (as such
term is used in Act Section 412(a)(2)), and the bond shall be in a form approved
by the Secretary of Labor. Notwithstanding anything in the Plan to the
contrary, the cost of such bonds shall be an expense of and may, at the
election of the Administrator, be paid from the Trust Fund or by the Employer.
9.9 INSURER'S PROTECTIVE CLAUSE
The Insurer who shall issue Contracts hereunder shall not have any
responsibility for the validity of this Plan or for the tax or legal aspects of
this Plan. The Insurer shall be protected and held harmless in acting in
accordance with any written direction of the Trustee, and shall have no duty to
see to the application of any funds paid to the Trustee, nor be required to
question any actions directed by the Trustee. Regardless of any provision of
this Plan, the Insurer shall not be required to take or permit any action or
allow any benefit or privilege contrary to the terms of any Contract which it
issues hereunder, or the rules of the Insurer.
9.10 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, his legal representative, Beneficiary, or to any
guardian or committee appointed for such Participant or Beneficiary in
accordance with the provisions of this Plan, shall, to the extent thereof, be in
full satisfaction of all claims hereunder against the Trustee and the Employer.
9.11 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is permitted or required to do
or perform any act or matter or thing, it shall be done and performed by a
person duly authorized by its legally constituted authority.
9.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are (1) the Employer, (2) the
Administrator, (3) the Trustee, and (4) any Investment Manager appointed
hereunder. The named Fiduciaries shall have only those specific powers, duties,
responsibilities, and obligations as are specifically given them under the
Plan. In general, the Employer shall have the sole responsibility for making the
contributions provided
36
<PAGE>
for under Section 4.1: and shall have the sole authority to appoint and remove
the Trustee and the Administrator, to formulate the Plan's "funding policy and
method"; and to amend the elective provisions of the Adoption Agreement or
terminate, in whole or in part, the Plan. The Administrator shall have the sole
responsibility for the administration of the Plan, which responsibility is
specifically described in the Plan. The Trustee shall have the sole
responsibility of management of the assets held under the Trust, except those
assets, the management of which has been assigned to an Investment Manager, who
shall be solely responsible for the management of the assets assigned to it
all as specifically provided in the Plan. Each named Fiduciary warrants that any
directions given, information furnished, or action taken by it shall be in
accordance with the provisions of the Plan, authorizing or providing for such
direction, information or action. Furthermore, each named Fiduciary may rely
upon any such direction, information or action of another named Fiduciary as
being proper under the Plan, and is not required under the Plan to inquire into
the propriety of any such direction, information or action. It is intended under
the Plan that each named Fiduciary shall be responsible for the proper exercise
of its own powers, duties, responsibilities and obligations under the Plan. No
named Fiduciary shall guarantee the Trust Fund in any manner against investment
loss or depreciation in asset value. Any person or group may serve in more than
one Fiduciary capacity.
9.13 HEADINGS
The headings and subheadings of this Plan have been inserted for convenience of
reference and are to be ignored in any construction of the provisions hereof.
9.14 APPROVAL BY INTERNAL REVENUE SERVICE
(a) Notwithstanding anything herein to the contrary, if, pursuant to a
timely application filed by or in behalf of the Plan, the Commissioner
of Internal Revenue Service or his delegate should determine that the
Plan does not initially qualify as a tax-exempt plan under Code
Sections 401 and 501, and such determination is not contested, or if
contested, is finally upheld, then if the Plan is a new plan, it shall
be void ab initio and all amounts contributed to the Plan, by the
Employer, less expenses paid, shall be returned within one year and
the Plan shall terminate, and the Trustee shall be discharged from all
further obligations. If the disqualification relates to an amended
plan, then the Plan shall operate as if it had not been amended and
restated.
(b) Notwithstanding any provisions to the contrary, except Sections 3.5,
3.6. and 4.1(f), any contribution by the Employer to the Trust Fund is
conditioned upon the deductibility of the contribution by the
Employer under the Code and, to the extent any such deduction is
disallowed, the Employer may within one (1) year following the
disallowance of the deduction, demand repayment of such disallowed
contribution and the Trustee shall return such contribution within one
(1) year following the disallowance. Earnings of the Plan attributable
to the excess contribution may not be returned to the Employer, but
any losses attributable thereto must reduce the amount so returned.
(c) If an Employer's Plan fails to attain or retain qualification, then
such Plan will no longer participate in this Prototype Plan and will
be considered an individually designed plan.
9.15 UNIFORMITY
All provisions of this Plan shall be interpreted and applied in a uniform,
nondiscriminatory manner.
9.16 PAYMENT OF BENEFITS
Benefits under this Plan shall be paid, subject to Section 6.10 and Section 6.11
only upon death. Total and Permanent Disability, normal or early retirement,
termination of employment, or upon Plan Termination.
ARTICLE X
PARTICIPATING EMPLOYERS
10.1 ELECTION TO BECOME A PARTICIPATING EMPLOYER
Notwithstanding anything herein to the contrary, with the consent of the
Employer and Trustee, any Affiliated Employer may adopt this Plan and all of the
provisions hereof, and participate herein and be known as a Participating
Employer, by a properly executed document evidencing said intent and will of
such Participating Employer.
10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS
(a) Each Participating Employer shall be required to select the same
Adoption Agreement provisions as those selected by the Employer other
than the Plan Year, the Fiscal Year, and such other items that must,
by necessity, vary among employers.
(b) Each such Participating Employer shall be required to use the same
Trustee as provided in this Plan.
(c) The Trustee may, but shall not be required to, commingle, hold and
invest as one Trust Fund all contributions made by Participating
Employers, as well as all increments thereof.
(d) The transfer of any Participant from or to an Employer participating
in this Plan, whether he be an Employee of the Employer or a
Participating Employer, shall not affect such Participant's rights
under the Plan, and all amounts credited to such Participant's
Combined Account as well as his accumulated service time with the
transferor or predecessor, and his length of participation in the
Plan, shall continue to his credit.
(e) Any expenses of the Plan which are to be paid by the Employer or borne
by the Trust Fund shall be paid by each Participating Employer in the
same proportion that the total amount standing to the credit of all
Participants employed by such Employer bears to the total standing to
the credit of all Participants.
10.3 DESIGNATION OF AGENT
Each Participating Employer shall be deemed to be a part of this Plan; provided,
however, that with respect to all of its relations with the Trustee and
Administrator for the purpose of this Plan, each Participating Employer shall be
deemed to have designated irrevocably the Employer as its agent. Unless the
context of the Plan clearly indicates the contrary, the word "Employer" shall be
deemed to include each Participating Employer as related to its adoption of the
Plan.
10.4 EMPLOYEE TRANSFERS
It is anticipated that an Employee may be transferred between Participating
Employers, and in the event of any such transfer, the Employee involved shall
carry with him his accumulated service and eligibility. No such transfer shall
effect a termination of employment hereunder, and the Participating Employer to
which the Employee is transferred shall thereupon become obligated hereunder
with respect to such Employee in the same manner as was the Participating
Employer from whom the Employee was transferred.
10.5 PARTICIPATING EMPLOYER'S CONTRIBUTION AND FORFEITURES
Any contribution or Forfeiture subject to allocation during each Plan Year shall
be allocated among all Participants of all Participating Employers in accordance
with the provisions of this Plan. On the basis of the information furnished by
the Administrator, the Trustee shall keep separate books and records concerning
the affairs of each Participating Employer hereunder and as to the accounts and
credits of the Employees of each Participating Employer. The Trustee may, but
need not, register Contracts so as to evidence that a particular Participating
Employer is the interested Employer hereunder, but in the event of an Employee
transfer from one Participating Employer to another, the employing Employer
shall immediately notify the Trustee thereof.
37
<PAGE>
10.6 AMENDMENT
Amendment of this Plan by the Employer at any time when there shall be a
Participating Employer hereunder shall only be by the written action of each and
every Participating Employer and with the consent of the Trustee where such
consent is necessary in accordance with the terms of this Plan.
10.7 DISCONTINUANCE OF PARTICIPATION
Except in the case of a Standardized Plan, any Participating Employer shall be
permitted to discontinue or revoke its participation in the Plan at any time. At
the time of any such discontinuance or revocation, satisfactory evidence thereof
and of any applicable conditions imposed shall be delivered to the Trustee. The
Trustee shall thereafter transfer, deliver and assign Contracts and other Trust
Fund assets allocable to the Participants of such Participating Employer to such
new Trustee as shall have been designated by such Participating Employer, in the
event that it has established a separate pension plan for its Employees
provided, however, that no such transfer shall be made if the result is the
elimination or reduction of any "Section 411(d)(6) protected benefits" in
accordance with Section 8.1(e). If no successor is designated, the Trustee shall
retain such assets for the Employees of said Participating Employer pursuant to
the provisions of Article VII hereof. In no such event shall any part of the
corpus or income of the Trust Fund as it relates to such Participating Employer
be used for or diverted for purposes other than for the exclusive benefit of the
Employees of such Participating Employer.
10.8 ADMINISTRATOR'S AUTHORITY
The Administrator shall have authority to make any and all necessary rules or
regulations, binding upon all Participating Employers and all Participants, to
effectuate the purpose of this Article.
10.9 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE
If any Participating Employer is prevented in whole or in part from making a
contribution which it would otherwise have made under the Plan by reason of
having no current or accumulated earnings or profits, or because such earnings
or profits are less than the contribution which it would otherwise have made,
then, pursuant to Code Section 404(a)(3)(B), so much of the contribution which
such Participating Employer was so prevented from making may be made, for the
benefit of the participating employees of such Participating Employer, by other
Participating Employers who are members of the same affiliated group within the
meaning of Code Section 1504 to the extent of their current or accumulated
earnings or profits, except that such contribution by each such other
Participating Employer shall be limited to the proportion of its total current
and accumulated earnings or profits remaining after adjustment for its
contribution to the Plan made without regard to this paragraph which the total
prevented contribution bears to the total current and accumulated earnings or
profits of all the Participating Employers remaining after adjustment for all
contributions made to the Plan without regard to this paragraph.
A Participating Employer on behalf of whose employees a contribution is made
under this paragraph shall not be required to reimburse the contributing
Participating Employers.
38
<PAGE>
EXHIBIT 4.3
AZTEC MANUFACTURING CO. EMPLOYEE BENEFIT PLAN AND TRUST
Addendum
By the adoption of the MFS Fund Distributors, Inc. 401(k) Profit Sharing Plan
and Trust, Serial Numbers D263832a and D363831a (the "Prototype Plan Document")
and related Adoption Agreement (the "Adoption Agreement") (the Prototype Plan
Document and the Adoption Agreement collectively referred to as the "Prototype
Documents"), Aztec Manufacturing Co. (the "Employer") has adopted, for the
benefit of its eligible employees, the Aztec Manufacturing Co. Employee Benefit
Plan and Trust (the "Plan"), effective November 1, 1999. Such Plan is an
amendment and restatement in its entirety of a previously established plan of
the Employer which was effective March 1, 1969, and as subsequently amended and
restated, effective March 1, 1993.
This Addendum to the Prototype Documents is hereby adopted by the Employer as
follows:
1. The Plan shall henceforth consist of the Prototype Documents and this
Addendum, as the same may be amended from time to time.
2. The effective Date of this Addendum shall be December 1, 1999.
3. Section 7.12 of the Prototype Plan Document is hereby amended by
adding the following subsections:
a. The Trustee will restrict the investment in qualifying Employer
securities to publicly-traded common stock of the Employer or any
other affiliate of the Employer.
b. Notwithstanding the provisions of Section 7.3(c), each plan
participant shall have the right to direct the Trustee as to the
manner in which to vote that number of shares of Employer stock
credited to his accounts. The number of shares deemed credited to
plan participants' accounts shall be determined as of the date of
record determined by the Employer for which an allocation has
been completed under Section 4.4 and Employer stock has actually
been credited to plan participants' accounts. To facilitate the
voting right, the Employer shall deliver to each participant a
copy of all proxies, notices and other information which it
distributes to shareholders generally. The Employer will, in
addition, establish procedures for the collection and timely
transmission of participants' voting directions to the Trustee.
The directions of each plan participant shall be communicated in
writing and shall be held in confidence by the Trustee and not
divulged to the Employer or any officer or employee thereof. Upon
receipt of the directions, the Trustee shall vote as directed by
the plan participant. The Trustee shall not vote those shares of
Employer stock credited to plan participants' accounts for which
no voting directions have been received. The Trustee will retain
pursuant to
AZTEC MANUFACTURING CO. EMPLOYEE BENEFIT PLAN AND TRUST Page 1
<PAGE>
Section 7.3(c) the right to vote any shares of Employer stock
which have not been credited to plan participants' accounts.
c. Notwithstanding the provisions of Section 7.3(c), in the event of
a tender offer or exchange offer, each plan participant shall
have the right to direct the Trustee as to whether the shares of
Employer stock credited to his accounts shall be tendered or
exchanged in response to such offer. The number of shares
credited to a plan participants' accounts shall be determined as
of the date of record determined by the Employer for which an
allocation has been completed under Section 4.4 and Employer
stock has actually been credited to plan participants accounts.
To facilitate the right to direct the Trustee as to a tender or
exchange offer, the Employer shall utilize its best efforts to
distribute to each plan participant the same information as may
be distributed to the stockholders of the Employer in connection
with such offer. The Employer will, in addition, establish
procedures for the collection and timely transmission of the
participants' tender or exchange offer directions to the Trustee.
The directions of each plan participant shall be communicated in
writing and shall be held in confidence by the Trustee and not
divulged to the Employer, or any officer or employee thereof.
Upon receipt of the directions, the Trustee shall vote as
directed by the plan participant. The Trustee shall not tender or
exchange those shares of Employer stock credited to plan
participants' accounts for which no directions have been
received. Pursuant to Section 7.3(c), the Trustee will retain the
right to tender or exchange those shares of Employer stock which
have not been credited to plan participants' accounts.
d. In addition to its duties as described in Section 2.6 of the
Prototype Plan Document, the Plan Administrator will be
responsible for filing all reports required under federal or
state securities laws with respect to the Plan's ownership
interest in Employer stock. The Plan Administrator will establish
such procedures as it shall deem necessary for compliance with
such reporting requirements and to monitor and restrict transfers
into and out of Employer stock pursuant to the requirements of
Section 16 of the Securities Exchange Act of 1934 and ERISA
Section 404(c).
4. Section 6.10 of the Prototype Plan Document entitled "Pre-Retirement
Distribution" is hereby amended by adding the following to Section 6.10:
"For Participants in the Plan prior to December 1, 1999, a
Participant shall be entitled to receive a distribution of all or
part of his interest in the Plan upon filing a written request
with the Plan Administrator, provided that no distribution shall
be made unless the Participant in the Plan is 100% vested and the
Participant has been a participant in the Plan for 5 years.
In-service distributions are permitted from rollover accounts."
AZTEC MANUFACTURING CO. EMPLOYEE BENEFIT PLAN AND TRUST Page 2
<PAGE>
IN WITNESS WHEREOF, the Employer and Trustees hereby cause this Addendum to the
Prototype Plan Document to be executed on this _____ of November, 1999. This
Plan, however, may not be adopted unless acknowledged by MFS Fund Distributors,
Inc.
EMPLOYER: TRUSTEE:
Aztec Manufacturing Co. First Nebraska Trust Company
By:_______________________________ By:_________________________________
PARTICIPATING EMPLOYER: PARTICIPATING EMPLOYER:
Aztec Industries, Inc. Automatic Processing, Inc.
By: ___________________________ By:____________________________
The Calvert Co., Inc. Gulf Coast Galvanizing, Inc.
By:___________________________ By: ____________________________
Arkansas Galvanizing, Inc. Aztec Manufacturing Waskom
Partnership, Ltd.
By:___________________________ By: ____________________________
Rig-A-Lit Partnership, Ltd. International Galvanizers
Partnership, Ltd.
By:___________________________ By: ____________________________
Drilling Rig Electrical Systems Atkinson Industries, Inc.
Partnership, Ltd.
By:___________________________ By: ____________________________
Arizona Galvanizing, Inc. Hobson Galvanizing Inc.
By:___________________________ By: ____________________________
AZTEC MANUFACTURING CO. EMPLOYEE BENEFIT PLAN AND TRUST Page 3
<PAGE>
CGIT, Westboro, Inc. Aztec Group Company
By:___________________________ By: ____________________________
Aztec Manufacturing Partnership, Ltd.
By: ____________________________
This Addendum may not be adopted unless an authorized representative of MFS Fund
Distributors, Inc. has acknowledged the adoption of the Addendum. Such
acknowledgment is for administerial purposes only. This Addendum only
acknowledges that the Employer adopted this Addendum, but does not represent
that this Plan is a qualified retirement plan under Section 401(a) of the
Internal Revenue Code.
MFS Fund Distributors, Inc.
By: ___________________
AZTEC MANUFACTURING CO. EMPLOYEE BENEFIT PLAN AND TRUST Page 4
<PAGE>
EXHIBIT 4.4
ADOPTION AGREEMENT FOR
MFS FUND DISTRIBUTORS, INC.
NON-STANDARDIZED 401(K) PROFIT SHARING
PLAN AND TRUST
The undersigned Employer adopts the MFS Fund Distributors, Inc. Non-
Standardized 401(k) Profit Sharing Plan and Trust for those Employees who shall
qualify as Participants hereunder, to be known as the
A1 Aztec Manufacturing Co. Employee Benefit Plan & Trust
----------------------------------------------------------------------
(Enter Plan Name)
It shall be effective as of the date specified below. The Employer hereby
selects the following Plan specifications:
CAUTION: The failure to properly fill out this Adoption Agreement may result
in disqualification of the Plan.
EMPLOYER INFORMATION
B1 Name of Employer Aztec Manufacturing Co.
------------------------------------------------
------------------------------------------------
B2 Address 400 N. Tarrant; P.O. Box 668
------------------------------------------------------------
Crowley , TX 76036
------------------------- ------------ -----------------
City State Zip
Telephone (817)297-4361
---------------------------
B3 Employer Identification Number 75-0948250
-------------------------
B4 Date Business Commenced ______________________________
B5 TYPE OF ENTITY
a. ( ) S Corporation
b. ( ) Professional Service Corporation
c. (X) Corporation
d. ( ) Sole Proprietorship
e. ( ) Partnership
f. ( ) Other
AND, is the Employer a member of...
g. a controlled group? (X) Yes ( ) No
h. an affiliated service group? (X) Yes ( ) No
1
<PAGE>
B6 NAME(S) OF TRUSTEE(S)
a. First Nebraska Trust Company
-------------------------------------------------------------------
b. ___________________________________________________________________
c. ___________________________________________________________________
d. ___________________________________________________________________
e. ___________________________________________________________________
f. ___________________________________________________________________
g. ___________________________________________________________________
( ) If checked, MFS Heritage Trust Company is selected as Trustee.
NOTE: MFS Heritage Trust Company will act as Trustee only when
Plan assets are invested exclusively in mutual funds
distributed by MFS Fund Distributors, Inc. If the
Trustee is another corporation or an individual, at
least 50% of Plan assets must be so invested, unless
MFS Fund Distributors, Inc. otherwise agrees in writing.
B7 TRUSTEES' ADDRESS
a. ( ) Use Employer Address
b. (X) P.O. box 81667 13th and K Street
------------------------------------------------------------
Street
Lincoln , Nebraska 68501-1667
----------------------- ---------------- -------------
City State Zip
c. ( ) The address of MFS Heritage Trust Company is:
c/o MFS Service Center, Inc.
P.O. Box 2281
Boston, MA 02107-9906
2
<PAGE>
B8 LOCATION OF EMPLOYER'S PRINCIPAL OFFICE:
a. (X) State b. ( ) Commonwealth of c. Texas and this Plan and Trust shall
-----
be governed under the same.
B9 EMPLOYER FISCAL YEAR means the 12 consecutive month period:
Commencing on a. March 1 (e.g., January 1st) and
------------------------
month day
ending on b. February 28 .
-------------------------------------
month day
3
<PAGE>
PLAN INFORMATION
C1 EFFECTIVE DATE
This Adoption Agreement of the MFS Fund Distributors, Inc. Non-
Standardized 401(k) Profit Sharing Plan and Trust shall:
a. ( ) establish a new Plan and Trust effective as of (hereinafter
---
called the "Effective Date").
b. (X) constitute an amendment and restatement in its entirety of a
previously established qualified Plan and Trust of the Employer
which was effective March 1, 1969 (hereinafter called the
-------------
"Effective Date"). Except as specifically provided in the Plan,
the effective date of this amendment and restatement is
December 1, 1999 (For TRA '86 amendments, enter the first day
----------------
of the first Plan Year beginning in 1989).
C2 PLAN YEAR means the 12 consecutive month period:
Commencing on a. March 1 (e.g., January 1st)
-------
and ending on b. February 28.
-----------
IS THERE A SHORT PLAN YEAR?
c. (X) No
d. ( ) Yes, beginning_______
and ending ____________________.
C3 ANNIVERSARY DATE of Plan (Annual Valuation Date)
a. February 28
--------------------------
month day
C4 PLAN NUMBER assigned by the Employer (select one)
a. (X) 001 b. ( ) 002 c. ( ) 003 d. ( ) Other _________
4
<PAGE>
C5 NAME OF PLAN ADMINISTRATOR (Document provides for the Employer to
appoint an Administrator. If none is named, the Employer will become
the Administrator.)
a. (X) Employer (Use Employer Address)
b. ( ) Name ______________________________________________________
Address ( ) Use Employer Address
_________________________________________________
_______________, _____________ ______________
City State Zip
Telephone ______________________
Administrator's I.D. Number _______________________________
C6 PLAN'S AGENT FOR SERVICE OF LEGAL PROCESS
a. (X) Employer (Use Employer Address)
b. ( ) Name _____________________________________________________
Address __________________________________________________
__________________________________________________
5
<PAGE>
ELIGIBILITY, VESTING AND RETIREMENT AGE
D1 ELIGIBLE EMPLOYEES (Plan Section 1.15) shall mean:
a. ( ) all Employees who have satisfied the eligibility requirements.
b. (X) all Employees who have satisfied the eligibility requirements
except those checked below:
1. ( ) Employees paid by commissions only.
2. ( ) Employees hourly paid.
3. ( ) Employees paid by salary.
4. (X) Employees whose employment is governed by a collective
bargaining agreement between the Employer and "employee
representatives" under which retirement benefits were the
subject of good faith bargaining. For this purpose, the term
"employee representatives" does not include any organization
more than half of whose members are employees who are
owners, officers, or executives of the Employer.
5. ( ) Highly Compensated Employees.
6. (X) Employees who are non-resident aliens who received no earned
income (within the meaning of Code Section 911(d)(2)) from
the Employer which constitutes income from sources within
the United States (within the meaning of Code Section
861(a)(3)).
7. ( ) Other___
NOTE: For purposes of this section, the term Employee shall include all
Employees of this Employer and any leased employees deemed to be
Employees under Code Section 414(n) or 414(o).
D2 EMPLOYEES OF AFFILIATED EMPLOYERS (Plan Section 1.16)
Employees of Affiliated Employers:
a. ( ) will not or N/A
b. (X) will
be treated as Employees of the Employer adopting the Plan.
NOTE: If D2b is elected, each Affiliated Employer should execute this
Adoption Agreement as a Participating Employer.
6
<PAGE>
D3 HOURS OF SERVICE (Plan Section 1.31) will be determined on the basis of the
method selected below. Only one method may be selected. The method selected
will be applied to all Employees covered under the Plan.
a. (X) On the basis of actual hours for which an Employee is paid or
entitled to payment.
b. ( ) On the basis of days worked. An Employee will be credited with
ten (10) Hours of Service if under the Plan such Employee would
be credited with at least one (1) Hour of Service during the day.
c. ( ) On the basis of weeks worked. An Employee will be credited forty-
five (45) Hours of Service if under the Plan such Employee would
be credited with at least one (1) Hour of Service during the
week.
d. ( ) On the basis of semi-monthly payroll periods. An Employee will be
credited ninety-five (95) Hours of Service if under the Plan such
Employee would be credited with at least one (1) Hour of Service
during the semi-monthly payroll period.
e. ( ) On the basis of months worked. An Employee will be credited one
hundred ninety (190) Hours of Service if under the Plan such
Employee would be credited with at least one (1) Hour of Service
during the month.
D4 CONDITIONS OF ELIGIBILITY (Plan Section 3.1)
(Check either a OR b and c, and if applicable, d)
Any Eligible Employee will be eligible to participate in the Plan if such
Eligible Employee has satisfied the service and age requirements, if any,
specified below:
a. ( ) NO AGE OR SERVICE REQUIRED.
b. (X) SERVICE REQUIREMENT. (may not exceed 1 year)
1. ( ) None
2. ( ) 1/2 Year of Service
3. (X) 1 Year of Service
4. ( ) Other __________
NOTE: If the Year(s) of Service selected is or includes a fractional
year, an Employee will not be required to complete any specified
number of Hours of Service to receive credit for such fractional
year. If expressed in Months of Service, an Employee will not be
required to complete any specified number of Hours of Service in
a particular month.
c. (X) AGE REQUIREMENT. (may not exceed 21)
1. ( ) N/A - No Age Requirement.
2. ( ) 20 1/2
3. ( ) 21
4. (X) Other 18
---------
d. ( ) FOR NEW PLANS ONLY - Regardless of any of the above age or
service requirements, any Eligible Employee who was employed on
the Effective Date of the Plan shall be eligible to participate
hereunder and shall enter the Plan as of such date.
7
<PAGE>
D5 EFFECTIVE DATE OF PARTICIPATION (Plan Section 3.2)
An Eligible Employee shall become a Participant as of:
a. ( ) the first day of the Plan Year in which he met the
requirements.
b. ( ) the first day of the Plan Year in which he met the
requirements, if he met the requirements in the first 6
months of the Plan Year, or as of the first day of the next
succeeding Plan Year if he met the requirements in the last
6 months of the Plan Year.
c. ( ) the earlier of the first day of the seventh month or the
first day of the Plan Year coinciding with or next following
the date on which he met the requirements.
d. ( ) the first day of the Plan Year next following the date on
which he met the requirements. (Eligibility must be 1/2 Year
of Service or less and age 20 1/2 or less.)
e. ( ) the first day of the month coinciding with or next following
the date on which he met the requirements.
f. (X) Other: the day in which he met the requirement_____________,
provided that an Employee who has satisfied the maximum age
and service requirements that are permissible in Section D4
above and who is otherwise entitled to participate, shall
commence participation no later than the earlier of (a) 6
months after such requirements are satisfied, or (b) the
first day of the first Plan Year after such requirements are
satisfied, unless the Employee separates from service before
such participation date.
8
<PAGE>
D6 VESTING OF PARTICIPANT'S INTEREST (Plan Section 6.4(b))
The vesting schedule, based on number of Years of Service, shall be as
follows:
a. ( ) 100% upon entering Plan. (Required if eligibility requirement
is greater than one (1) Year of Service.)
b. ( ) 0-2 years 0% c. ( ) 0-4 years 0%
3 years 100% 5 years 100%
d. ( ) 0-1 year 0% e. ( ) 1 year 25%
2 years 20% 2 years 50%
3 years 40% 3 years 75%
4 years 60% 4 years 100%
5 years 80%
6 years 100%
f. ( ) 1 year 20% g. (X) 0-2 years 0%
2 years 40% 3 years 20%
3 years 60% 4 years 40%
4 years 80% 5 years 60%
5 years 100% 6 years 80%
7 years 100%
h. ( ) Other - Must be at least as liberal as either c. or g. above.
Years of Service Percentage
________________________ ________________
________________________ ________________
________________________ ________________
________________________ ________________
________________________ ________________
________________________ ________________
________________________ ________________
D7 FOR AMENDED PLANS (Plan Section 6.4(f)) If the vesting schedule has
been amended to a less favorable schedule, enter the pre-amended
schedule below:
a. ( ) Vesting schedule has not been amended or amended schedule is
more favorable in all years.
b. (X) Years of Service Percentage
less than 1 0%
------------------- ---------------
1-2 1%
------------------- ---------------
2-3 1%
------------------- ---------------
3-4 20%
------------------- ---------------
4-5 40%
------------------- ---------------
5-6 60%
------------------- ---------------
6-7 80%
9
<PAGE>
7+ 100%
------------------- ---------------
D8 TOP HEAVY VESTING (Plan Section 6.4(c)) If this Plan becomes a Top
Heavy Plan, the following vesting schedule, based on number of Years of
Service, for such Plan Year and each succeeding Plan Year, whether or
not the Plan is a Top Heavy Plan, shall apply and shall be treated as a
Plan amendment pursuant to this Plan. Once effective, this schedule
shall also apply to any contributions made prior to the effective date
of Code Section 416 and/or before the Plan became a Top Heavy Plan.
a. ( ) N/A (D6a, b, d, e or f was selected)
b. (X) 0-1 year 0% c. ( ) 0-2 years 0%
2 years 20% 3 years 100%
3 years 40%
4 years 60%
5 years 80%
6 years 100%
NOTE: This section does not apply to the Account balances of any
Participant who does not have an Hour of Service after the
Plan has initially become top heavy. Such Participant's
Account balance attributable to Employer contributions and
Forfeitures will be determined without regard to this
section.
D9 VESTING (Plan Section 6.4(h)) In determining Years of Service for
vesting purposes, Years of Service attributable to the following shall
be EXCLUDED:
a. ( ) Service prior to the Effective Date of the b. (X) N/A.
Plan or a predecessor plan.
c. ( ) Service prior to the time an Employee d. (X) N/A.
attained age 18.
D10 PLAN SHALL RECOGNIZE SERVICE WITH PREDECESSOR EMPLOYER
a. ( ) No.
b. (X) Yes: Years of Service with Rig-A-Lit Partnership, Ltd.,
----------------------------
Calvert Company, Inc., Atkinson Industries and CGIT Westboro,
-------------------------------------------------------------
Inc. shall be recognized for the purpose of this Plan.
----
NOTE: If the predecessor Employer maintained this qualified Plan,
then Years of Service with such predecessor Employer shall be
recognized pursuant to Section 1.74, and b. must be marked.
D11 NORMAL RETIREMENT AGE ("NRA") (Plan Section 1.42) means:
a. (X) the date a Participant attains his 65th birthday. (not to
----
exceed 65th)
b. ( ) the later of the date a Participant attains his ___ birthday
(not to exceed 65th) or the c.___ (not to exceed 5th)
anniversary of the first day of the Plan Year in which
participation in the Plan commenced.
10
<PAGE>
D12 NORMAL RETIREMENT DATE (Plan Section 1.43) shall commence:
a. (X) as of the Participant's "NRA."
OR (must select b. or c. AND 1. or 2.)
b. ( ) as of the first day of the month...
c. ( ) as of the Anniversary Date...
1. ( ) coinciding with or next following the Participant's
"NRA."
2. ( ) nearest the Participant's "NRA".
D13 EARLY RETIREMENT DATE (Plan Section 1.12) means the:
a. (X) No Early Retirement provision provided.
b. ( ) date on which a Participant...
c. ( ) first day of the month coinciding with or next following the
date on which a Participant...
d. ( ) Anniversary Date coinciding with or next following the date on
which a Participant...
AND, if b., c. or d. was selected...
1. ( ) attains his ____ birthday and has
2. ( ) completed at least ____ Years of Service.
11
<PAGE>
CONTRIBUTIONS, ALLOCATIONS AND DISTRIBUTIONS
E1 a. COMPENSATION (Plan Section 1.9) with respect to any Participant means:
1. (X) Wages, tips and other Compensation on Form W-2.
2. ( ) Code Section 3401(a) wages.
3. ( ) 415 safe-harbor compensation.
b. COMPENSATION shall be
1. (X) actually paid (must be selected if Plan is integrated)
2. ( ) accrued
c. HOWEVER, for non-integrated plans, Compensation shall exclude (select
all that apply):
1. (X) N/A. No exclusions
2. ( ) overtime
3. ( ) bonuses
4. ( ) commissions
5. ( ) other ____
d. FOR PURPOSES OF THIS SECTION E1, Compensation shall be based on:
1. (X) the Plan Year.
2. ( ) the Fiscal Year coinciding with or ending within the Plan
Year.
3. ( ) the Calendar Year coinciding with or ending within the Plan
Year.
NOTE: The Limitation Year shall be the same as the year on which
Compensation is based.
e. HOWEVER, for an Employee's first year of participation, Compensation
shall be recognized as of:
1. ( ) the first day of the Plan Year.
2. (X) the date the Participant entered the Plan.
f. IN ADDITION, COMPENSATION and "414(s) Compensation"
1. ( ) shall
2. (X) shall not include compensation which is not currently
includible in the Participant's gross income by reason of
the application of Code Sections 125, 402(a)(8),
402(h)(1)(B) or 403(b).
g. AND, COMPENSATION
1. ( ) shall
2. (X) shall not include (even if includible in gross income)
reimbursements or other expense allowances, fringe benefits
(cash or noncash), moving expenses, deferred compensation,
and welfare benefits.
12
<PAGE>
E2 SALARY REDUCTION ARRANGEMENT - ELECTIVE CONTRIBUTION
(Plan Section 4.2) Each Employee may elect to have his Compensation reduced
by:
a. ( ) ____%
b. ( ) up to ____%
c. (X) from 1 % to 12%
--- ---
d. ( ) up to the maximum percentage allowable not to exceed the limits
of Code Sections 401(k), 404 and 415.
AND...
e. (X) A Participant may elect to commence salary reductions as of
November 1, 1999 and thereafter on March 1; June 1; September 1;
----------------------------------------------------------------
and December 1 (ENTER AT LEAST ONE DATE OR PERIOD). A Participant
--------------
may modify the amount of salary reductions as of March 1; June 1;
----------------
September 1; and December 1 (ENTER AT LEAST ONE DATE OR PERIOD).
---------------------------
AND...
Shall cash bonuses paid within 2 1/2 months after the end of the Plan
Year be subject to the salary reduction election?
f. ( ) Yes
g. (X) No
E3 FORMULA FOR DETERMINING EMPLOYER'S MATCHING CONTRIBUTION
(Plan Section 4.1(b))
a. ( ) N/A. There shall be no matching contributions.
b. ( ) The Employer shall make matching contributions equal to % (e.g.
50%) of the Participant's salary reductions.
c. (X) The Employer may make matching contributions equal to a
discretionary percentage, to be determined by the Employer, of
the Participant's salary reductions.
d. ( ) The Employer shall make matching contributions equal to the sum
of ____% of the portion of the Participant's salary reduction
which does not exceed ____% of the Participant's Compensation
plus ____% of the portion of the Participant's salary reduction
which exceeds ____% of the Participant's Compensation, but does
not exceed ____% of the Participant's Compensation.
e. ( ) The Employer shall make matching contributions equal to the
percentage determined under the following schedule:
Participant's Total Matching Percentage
Years of Service
__________ __________
__________ __________
__________ __________
13
<PAGE>
FOR PLANS WITH MATCHING CONTRIBUTIONS
f. (X) Matching contributions g. ( ) shall h. (X) shall not be used in
satisfying the deferral percentage tests. (If used, full vesting
and restrictions on withdrawals will apply and the match will be
deemed to be an Elective Contribution).
i. (X) Shall a Year of Service be required in order to share in the
matching contribution?
With respect to Plan Years beginning after 1989...
1. (X) Yes (Could cause Plan to violate minimum participation and
coverage requirements under Code Sections 401(a)(26) and
410)
2. ( ) No
With respect to Plan Years beginning before 1990...
1. (X) N/A, new Plan, or same as years beginning after 1989.
2. ( ) Yes
3. ( ) No
j. ( ) In determining matching contributions, only salary reductions up
to ____% of a Participant's Compensation will be matched.
k. (X) N/A
l. ( ) The matching contribution made on behalf of a Participant for any
Plan Year shall not exceed $ ____. m. (X) N/A
n. (X) Matching contributions shall be made on behalf of
1. (X) all Participants.
2. ( ) only Non-Highly Compensated Employees.
o. (X) Notwithstanding anything in the Plan to the contrary, all
matching contributions which relate to distributions of Excess
Deferred Compensation, Excess Contributions, and Excess Aggregate
Contributions shall be Forfeited. (Select this option only if it
is applicable.)
14
<PAGE>
E4 WILL A DISCRETIONARY EMPLOYER CONTRIBUTION BE PROVIDED (OTHER THAN A
DISCRETIONARY MATCHING OR QUALIFIED NON-ELECTIVE CONTRIBUTION) (Plan
Section 4.1)?
a. ( ) No.
b. (X) Yes, the Employer may make a discretionary contribution out of
its current or accumulated Net Profit.
c. ( ) Yes, the Employer may make a discretionary contribution which is
not limited to its current or accumulated Net Profit.
IF YES (b. or c. is selected above), the Employer's discretionary
contribution shall be allocated as follows:
d. (X) FOR A NON-INTEGRATED PLAN
The Employer discretionary contribution for the Plan Year shall be
allocated in the same ratio as each Participant's Compensation bears to the
total of such Compensation of all Participants.
e. ( ) FOR AN INTEGRATED PLAN
The Employer discretionary contribution for the Plan Year shall be
allocated in accordance with Plan Section 4.4(b)(3) based on a
Participant's Compensation in excess of:
f. ( ) The Taxable Wage Base.
g. ( ) The greater of $10,000 or 20% of the Taxable Wage Base.
h. ( ) ____% of the Taxable Wage Base. (See Note below)
i. ( ) $____. (see Note below)
NOTE: The integration percentage of 5.7% shall be reduced to:
1. 4.3% if h. or i. above is more than 20% and less than or
equal to 80% of the Taxable Wage Base.
2. 5.4% if h. or i. above is less than 100% and more than 80%
of the Taxable Wage Base.
E5 QUALIFIED NON-ELECTIVE CONTRIBUTIONS (Plan Section 4.1)
a. (X) N/A. There shall be no Qualified Non-Elective Contributions
except as provided in Sections 4.6 and 4.8.
b. ( ) The Employer shall make a Qualified Non-Elective Contribution
equal to % of the total Compensation of all Participants eligible
to share in the allocations.
c. ( ) The Employer may make a Qualified Non-Elective Contribution in an
amount to be determined by the Employer.
15
<PAGE>
E6 FORFEITURES (Plan Section 4.4(e))
a. Forfeitures of contributions other than matching contributions shall
be...
1. (X) added to the Employer's contribution under the Plan.
2. ( ) allocated to all Participants eligible to share in the
allocations in the same proportion that each Participant's
Compensation for the year bears to the Compensation of all
Participants for such year.
b. Forfeitures of matching contributions shall be...
1. ( ) N/A. No matching contributions or match is fully vested.
2. ( ) used to reduce the Employer's matching contribution.
3. (X) allocated to all Participants eligible to share in the
allocations in proportion to each such Participant's
Compensation for the year.
4. ( ) allocated to all Non-Highly Compensated Employee's eligible
to share in the allocations in proportion to each such
Participant's Compensation for the year.
E7 ALLOCATIONS TO ACTIVE PARTICIPANTS (Plan Section 4.4)
With respect to Plan Years beginning after 1989, a Participant...
a. (X) shall (Plan may become discriminatory)
b. ( ) shall not
be required to complete a Year of Service in order to share in any Non-
Elective Contributions (other than matching contributions) or Qualified
Non-Elective Contributions. For Plan Years beginning before 1990, the Plan
provides that a Participant must complete a Year of Service to share in the
allocations.
16
<PAGE>
E8 ALLOCATIONS TO TERMINATED PARTICIPANTS (Plan Section 4.4(l))
Any Participant who terminated employment during the Plan Year (i.e.
not actively employed on the last day of the Plan Year) for reasons
other than death, Total and Permanent Disability or retirement:
a. With respect to Employer Non-Elective Contributions (other than
matching), Qualified Non-Elective Contributions, and Forfeitures:
1. For Plan Years beginning after 1989,
i. ( ) N/A, Plan does not provide for such contributions.
ii. ( ) shall share in the allocations provided such
Participant completed more than 500 Hours of
Service.
iii. ( ) shall share in such allocations provided such
Participant completed a Year of Service.
iv. (X) shall not share in such allocations, regardless of
Hours of Service.
2. For Plan Years beginning before 1990,
i. (X) N/A, new Plan, or same as for Plan Years beginning
after 1989.
ii. ( ) shall share in such allocations provided such
Participant completed a Year of Service.
iii. ( ) shall not share in such allocations, regardless
of Hours of Service.
NOTE: If a.1.iii or iv is selected, the Plan could violate minimum
participation and coverage requirements under Code Sections
401(a)(26) and 410.
b. With respect to the allocation of Employer Matching Contributions,
a Participant:
1. For Plan Years beginning after 1989,
i. ( ) N/A, Plan does not provide for matching
contributions.
ii. ( ) shall share in the allocations, regardless of
Hours of Service.
iii. ( ) shall share in the allocations provided such
Participant completed more than 500 Hours of
Service.
iv. ( ) shall share in such allocations provided such
Participant completed a Year of Service.
v. (X) shall not share in such allocations, regardless
of Hours of Service.
2. For Plan Years beginning before 1990,
i. (X) N/A, new Plan, or same as years beginning after
1989.
ii. ( ) shall share in the allocations, regardless of
Hours of Service.
iii. ( ) shall share in such allocations provided such
Participant completed a Year of Service.
iv. ( ) shall not share in such allocations, regardless
of Hours of Service.
NOTE: If b.1.iv or v is selected, the Plan could violate minimum
participation and coverage requirements under Code Section
401(a)(26) and 410.
17
<PAGE>
E9 ALLOCATIONS OF EARNINGS (Plan Section 4.4(c))
Allocations of earnings with respect to amounts contributed to the Plan
after the previous Anniversary Date or other valuation date shall be
determined...
a. ( ) by using a weighted average.
b. ( ) by treating one-half of all such contributions as being a part
of the Participant's nonsegregated account balance as of the
previous Anniversary Date or valuation date.
c. ( ) by using the method specified in Section 4.4(c).
d. (X) other: by using the actual investment experience of individual
-------------------------------------------------------
accounts
--------
E10 LIMITATIONS ON ALLOCATIONS (Plan Section 4.9)
a. If any Participant is or was covered under another qualified defined
contribution plan maintained by the Employer, other than a Master or
Prototype Plan or if the Employer maintains a welfare benefit fund,
as defined in Code Section 419(e), or an individual medical account,
as defined in Code Section 415(l)(2), under which amounts are
treated as Annual Additions with respect to any Participant in this
Plan:
1. (X) N/A.
2. ( ) The provisions of Section 4.9(b) of the Plan will apply as
if the other plan were a Master or Prototype Plan.
3. ( ) Provide the method under which the Plans will limit total
Annual Additions to the Maximum Permissible Amount, and
will properly reduce any Excess Amounts, in a manner that
precludes Employer discretion.
b. If any Participant is or ever has been a Participant in a defined
benefit plan maintained by the Employer:
1. (X) N/A.
2. ( ) In any Limitation Year, the Annual Additions credited to
the Participant under this Plan may not cause the sum of
the Defined Benefit Plan Fraction and the Defined
Contribution Fraction to exceed 1.0. If the Employer's
contribution that would otherwise be made on the
Participant's behalf during the limitation year would cause
the 1.0 limitation to be exceeded, the rate of contribution
under this Plan will be reduced so that the sum of the
fractions equals 1.0. If the 1.0 limitation is exceeded
because of an Excess Amount, such Excess Amount will be
reduced in accordance with Section 4.9(a)(4) of the Plan.
3. ( ) Provide the method under which the Plans involved will
satisfy the 1.0 limitation in a manner that precludes
Employer discretion.
E11 DISTRIBUTIONS UPON DEATH (Plan Section 6.6(h))
Distributions upon the death of a Participant prior to receiving any
benefits shall...
a. (X) be made pursuant to the election of the Participant or
beneficiary.
b. ( ) begin within 1 year of death for a designated beneficiary and
be payable over the life (or over a period not exceeding the
life expectancy) of such beneficiary, except that if the
beneficiary is the Participant's spouse, begin within the time
the Participant would have attained a ge 70 1/2.
c. ( ) be made within 5 years of death for all beneficiaries.
d. ( ) other
----
18
<PAGE>
E12 LIFE EXPECTANCIES (Plan Section 6.5(f)) for minimum distributions
required pursuant to Code Section 401(a)(9) shall...
a. (X) be recalculated at the Participant's election.
b. ( ) be recalculated.
c. ( ) not be recalculated.
E13 CONDITIONS FOR DISTRIBUTIONS UPON TERMINATION
Distributions upon termination of employment pursuant to Section 6.4(a)
of the Plan shall not be made unless the following conditions have been
satisfied:
a. (X) N/A. Immediate distributions may be made at Participant's
election.
b. ( ) The Participant has incurred___ 1-Year Break(s) in Service.
c. ( ) The Participant has reached his or her Early or Normal
Retirement Age.
d. ( ) Distributions may be made at the Participant's election on
or after the Anniversary Date following termination of
employment.
e. ( ) Other ____
E14 FORM OF DISTRIBUTIONS (Plan Sections 6.5 and 6.6)
Distributions under the Plan may be made...
a. 1. ( ) in lump sums.
2. (X) in lump sums or installments.
b. AND, pursuant to Plan Section 6.13,
1. ( ) no annuities are allowed (avoids Joint and Survivor
rules).
2. (X) annuities are allowed (Plan Section 6.13 shall not
apply).
NOTE: b.1. above may not be elected if this is an amendment to a
plan which permitted annuities as a form of distribution or
if this Plan has accepted a plan to plan transfer of assets
from a plan which permitted annuities as a form of
distribution.
c. AND may be made in...
1. (X) cash only (except for insurance or annuity contracts).
2. ( ) cash or property.
19
<PAGE>
TOP HEAVY REQUIREMENTS
F1 TOP HEAVY DUPLICATIONS (Plan Section 4.4(i)): When a Non-Key Employee is a
Participant in this Plan and a Defined Benefit Plan maintained by the
Employer, indicate which method shall be utilized to avoid duplication of
top heavy minimum benefits.
a. (X) The Employer does not maintain a Defined Benefit Plan.
b. ( ) A minimum, non-integrated contribution of 5% of each Non-Key
Employee's total Compensation shall be provided in this Plan, as
specified in Section 4.4(i). (The Defined Benefit and Defined
Contribution Fractions will be computed using 100% if this choice
is selected.)
c. ( ) A minimum, non-integrated contribution of 7 1/2% of each Non-Key
Employee's total Compensation shall be provided in this Plan, as
specified in Section 4.4(i). (If this choice is selected, the
Defined Benefit and Defined Contribution Fractions will be
computed using 125% for all Plan Years in which the Plan is Top
Heavy, but not Super Top Heavy.)
d. ( ) Specify the method under which the Plans will provide top heavy
minimum benefits for Non-Key Employees that will preclude Employer
discretion and avoid inadvertent omissions, including any
adjustments required under Code Section 415(e).
F2 PRESENT VALUE OF ACCRUED BENEFIT (Plan Section 2.2) for Top Heavy purposes
where the Employer maintains a Defined Benefit Plan in addition to this
Plan, shall be based on...
a. (X) N/A. The Employer does not maintain a defined benefit plan.
b. ( ) Interest Rate:__
Mortality Table: __
F3 TOP HEAVY DUPLICATIONS: Employer maintaining two (2) or more Defined
Contribution Plans.
a. (X) N/A.
b. ( ) A minimum, non-integrated contribution of 3% of each Non-Key
Employee's total Compensation shall be provided in the Money
Purchase Plan (or other plan subject to Code Section 412), where
the Employer maintains two (2) or more non-paired Defined
Contribution Plans.
c. ( ) Specify the method under which the Plans will provide top heavy
minimum benefits for Non-Key Employees that will preclude
Employer discretion and avoid inadvertent omissions, including
any adjustments required under Code Section 415(e).
20
<PAGE>
MISCELLANEOUS
G1 LOANS TO PARTICIPANTS (Plan Section 7.4)
a. ( ) Yes, loans may be made up to $50,000 or 1/2 Vested interest.
b. (X) No, loans may not be made.
If YES, (check all that apply)...
c. ( ) loans shall be treated as a Directed Investment.
d. ( ) loans shall only be made for hardship or financial necessity.
e. ( ) the minimum loan shall be $1,000.
f. ( ) $10,000 de minimis loans may be made regardless of Vested
interest. (If selected, Plan may need security in addition to
Vested interest.)
NOTE: Department of Labor Regulations require the adoption of a separate
written loan program setting forth the requirements outlined in
Plan Section 7.4.
G2 DIRECTED INVESTMENT ACCOUNTS (Plan Section 4.13) are permitted for the
interest in any one or more accounts.
a. (X) Yes, regardless of the Participant's Vested interest in the Plan.
b. ( ) Yes, but only with respect to the Participant's Vested interest
in the Plan.
c. ( ) Yes, but only with respect to those accounts which are 100%
Vested.
d. ( ) No directed investments are permitted.
G3 TRANSFERS FROM QUALIFIED PLANS (Plan Section 4.11)
a. (X) Yes, transfers from qualified plans (and rollovers) will be
allowed.
b. ( ) No, transfers from qualified plans (and rollovers) will not be
allowed.
AND, transfers shall be permitted...
c. (X) from any Employee, even if not a Participant.
d. ( ) from Participants only.
G4 EMPLOYEES' VOLUNTARY CONTRIBUTIONS (Plan Section 4.12)
a. ( ) Yes, Voluntary Contributions are allowed subject to the limits
of Section 4.7.
b. (X) No, Voluntary Contributions will not be allowed.
NOTE: TRA '86 subjects voluntary contributions to strict discrimination
rules.
21
<PAGE>
G5 HARDSHIP DISTRIBUTIONS (Plan Section 6.11)
a. ( ) Yes, from any accounts which are 100% Vested.
b. (X) Yes, from Participant's Elective Account only.
c. ( ) Yes, but limited to the Participant's Account only.
d. ( ) No.
NOTE: Distributions from a Participant's Elective Account are limited to
the portion of such account attributable to such Participant's
Deferred Compensation and earnings attributable thereto up to
December 31, 1988. Also hardship distributions are not permitted
from a Participant's Qualified Non-Elective Account.
G6 PRE-RETIREMENT DISTRIBUTION (Plan Section 6.10)
a. (X) If a Participant has reached the age of 59 1/2 , distributions may
be made, at the Participant's election, from any accounts which
are 100% Vested without requiring the Participant to terminate
employment.
b. ( ) No pre-retirement distribution may be made.
NOTE: Distributions from a Participant's Elective Account and Qualified
Non-Elective Account are not permitted prior to age 59 1/2.
22
<PAGE>
G7 TRUST INVESTMENTS: (Plan Section 7.2) Assets under this Plan shall be
invested as follows (select all that apply):
a. ( ) Life Insurance Contracts (must also select b. and/or c.)
1. ( ) shall be purchased at the option of the Administrator.
2. ( ) shall be purchased at the option of the Participant.
AND (select all that apply)...
3. ( ) Each initial Contract shall have a minimum face amount of
$__ .
4. ( ) Each additional life insurance contract shall have a
minimum face amount of $__.
5. ( ) No initial or additional life insurance shall be purchased
for any Participant who is under age __ on the contract
issue date
6. ( ) No life insurance shall be purchased until the Participant
has been credited with __ Years of Service.
7. ( ) No life insurance shall be purchased until the Participant
has been credited with __ Years of Service while a
Participant in the Plan.
8. ( ) The maximum amount of all Contracts purchased on behalf of
a Participant shall not exceed $__.
9. ( ) Waiver of premium is included on all life insurance
contracts and is paid with the Employer Contributions
allocated to the Participant's Accounts.
b. ( ) Annuity Contracts (as permitted by the Insurer) shall be
purchased...
1. ( ) at the option of the Administrator
2. ( ) at the option of the Participant
c. (X) Investments may be made in any investments permitted pursuant to
Plan Sections 7.2 and 7.3 other than those permitted by a. or b.
above unless so elected.
23
<PAGE>
The adopting Employer may not rely on an opinion letter issued by the National
Office of the Internal Revenue Service as evidence that the plan is qualified
under Code Section 401. In order to obtain reliance with respect to plan
qualification, the Employer must apply to the appropriate Key District Office
for a determination letter.
The Employer may not rely on the opinion letter issued by the National Office of
the Internal Revenue Service as evidence that this Plan is qualified under Code
Section 401 unless the terms of the Plan, as herein adopted or amended, that
pertain to the requirements of Code Sections 401(a)(4), 401(a)(17), 401(l),
401(a)(5), 410(b) and 414(s), as amended by the Tax Reform Act of 1986, or later
laws, (a) are made effective retroactively to the first day of the first Plan
Year beginning after December 31, 1988 (or such later date on which these
requirements first become effective with respect to this Plan); or (b) are made
effective no later than the first day on which the Employer is no longer
entitled, under regulations, to rely on a reasonable, good faith interpretation
of these requirements, and the prior provisions of the Plan constitute such an
interpretation.
This Adoption Agreement may be used only in conjunction with basic Plan document
#02. This Adoption Agreement and the basic Plan document shall together be known
as MFS Fund Distributors, Inc. Non-Standardized 401(k) Profit Sharing Plan and
Trust #02-001.
The adoption of this Plan, its qualification by the IRS, and the related tax
consequences are the responsibility of the Employer and its independent tax and
legal advisors.
This Plan may be used only in conjunction with a product purchased from MFS Fund
Distributors, Inc. or any of its affiliates or subsidiaries.
MFS Fund Distributors, Inc. will notify the Employer of any amendments made to
the Plan or of the discontinuance or abandonment of the Plan provided this Plan
has been acknowledged by MFS Fund Distributors, Inc. or its authorized
representative. Furthermore, in order to be eligible to receive such
notification, we agree to notify MFS Fund Distributors, Inc. of any change in
address.
24
<PAGE>
IN WITNESS WHEREOF, the Employer and Trustee hereby cause this Plan to be
executed on this ________________ day of ________________________,
_______________. Furthermore, this Plan may not be used unless acknowledged by
MFS Fund Distributors, Inc. or its authorized representative.
EMPLOYER:
Aztec Manufacturing Co.
By: _______________________________
Employer Representative
____________________________________ ______________________________
TRUSTEE First Nebraska Trust Company TRUSTEE
PARTICIPATING EMPLOYER:
Aztec Industries, Inc.
- ------------------------------------
(enter name)
By: _______________________________
PARTICIPATING EMPLOYER:
Automatic Processing, Inc.
- ------------------------------------
(enter name)
By: _______________________________
PARTICIPATING EMPLOYER:
The Calvert Co., Inc.
- ------------------------------------
(enter name)
By: _______________________________
PARTICIPATING EMPLOYER:
Gulf Coast Galvanizing, Inc.
- ------------------------------------
(enter name)
By: _______________________________
PARTICIPATING EMPLOYER:
Arkansas Galvanizing, Inc.
- ------------------------------------
(enter name)
By: _______________________________
25
<PAGE>
PARTICIPATING EMPLOYER:
CGIT Westboro, Inc.
- --------------------------------------------
(enter name)
By: _______________________________________
PARTICIPATING EMPLOYER:
International Galvanizers Partnership, Ltd.CGIT Westboro, Inc.
- --------------------------------------------------------------
(enter name)
By: _______________________________________
PARTICIPATING EMPLOYER:
Drilling Rig Electrical Systems Partnership, Ltd.CGIT Westboro, Inc.
- --------------------------------------------------------------------
(enter name)
By: _______________________________________
PARTICIPATING EMPLOYER:
Atkinson Industries, Inc.CGIT Westboro, Inc.
--------------------------------------------
(enter name)
By: _______________________________________
PARTICIPATING EMPLOYER:
Arizona Galvanizing, Inc.CGIT Westboro, Inc.
--------------------------------------------
(enter name)
By: _______________________________________
PARTICIPATING EMPLOYER:
Hobson Galvanizing, Inc.CGIT Westboro, Inc.
-------------------------------------------
(enter name)
By: _______________________________________
PARTICIPATING EMPLOYER:
Aztec Group Company
- --------------------------------------------
(enter name)
By:_________________________________________
26
<PAGE>
PARTICIPATING EMPLOYER:
Aztec Manufacturing Partnership, Ltd.
- --------------------------------------------
(enter name)
By:_________________________________________
PARTICIPATING EMPLOYER:
Aztec Manufacturing Waskom Partnership, Ltd.
- --------------------------------------------
(enter name)
By:_________________________________________
PARTICIPATING EMPLOYER:
Rig-A-Lit Partnership, Ltd.
- ---------------------------------------------
(enter name)
By:__________________________________________
The following Acceptance of MFS Heritage Trust Company will be completed if the
Bank is named as Trustee:
MFS Heritage Trust Company
By:____________________________
Authorized Officer
NOTE: MFS Heritage Trust Company will act as Trustee only
when Plan assets are invested exclusively in mutual
funds distributed by MFS Fund Distributors, Inc. If the
Trustee is another corporation or an individual, at
least 50% of Plan assets must be so invested, unless
MFS Fund Distributors, Inc. otherwise agrees in
writing.
This Plan may not be used, and shall not be deemed to be a Prototype Plan,
unless an authorized representative of MFS Fund Distributors, Inc. has
acknowledged the use of the Plan. Such acknowledgment is for administerial
purposes only. It acknowledges that the Employer is using the Plan but does not
represent that this Plan, including the choices selected on the Adoption
Agreement, has been reviewed by a representative of the sponsor or constitutes a
qualified retirement plan.
MFS Fund Distributors, Inc.
By:_________________________
27
<PAGE>
With regard to any questions regarding the provisions of the Plan, adoption of
the Plan, or the effect of an opinion letter from the IRS, call or write (this
information must be completed by the sponsor of this Plan or its designated
representative):
Name Otto E. Rogelstad, Esq.
-------------------------------------------------
Address MFS Fund Distributors, Inc.
-------------------------------------------------
500 Boylston Street
-------------------------------------------------
Boston, Massachusetts 02166
-------------------------------------------------
Telephone (800) 637-1044
-------------------------------------------------
28
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 33-___________) pertaining to the Aztec Manufacturing Co. Employee
Benefit Plan and Trust of our report dated March 29, 1999, with respect to the
consolidated financial statements and schedules of Aztec Manufacturing Co.
incorporated by reference in its Annual Report on Form 10-K for the year ended
February 28, 1999, filed with the Securities and Exchange Commission.
Fort Worth, Texas
December 3, 1999
Ernst & Young LLP
<PAGE>
EXHIBIT 24
SPECIAL POWER OF ATTORNEY
THE STATE OF TEXAS (S)
(S) KNOW ALL MEN BY THESE PRESENTS
COUNTY OF TARRANT (S)
THAT WE, the undersigned, of Tarrant County, Texas, have made, constituted,
and appointed, and by these presents do make, constitute, and appoint L.C.
MARTIN, DANA L. PERRY, and SAM ROSEN, and each of them severally, our true and
lawful attorneys and agents to execute in our name, place, and stead (in such
capacity) the Form S-8 of AZTEC MANUFACTURING CO. and all amendments and
additions thereto ("Form S-8"), each of said attorneys and agents to have power
to act with or without the other and to have full power and authority to do and
perform in the name of and on behalf of each of the undersigned, as the case may
be, every act whatsoever necessary or advisable to be done in the premises as
fully and to all intents and purposes as any of the undersigned might or could
do in person, such power to extend to the execution of any amendment to the Form
S-8.
WITNESS OUR HANDS this 22/nd/ day of September, 1999.
/s/ L.C. MARTIN
-----------------------
L.C. MARTIN
/s/ DAVID H. DINGUS
-----------------------
DAVID H. DINGUS
/s/ ROBERT H. JOHNSON
-----------------------
ROBERT H. JOHNSON
/s/ MARTIN C. BOWEN
-----------------------
MARTIN C. BOWEN
/s/ DR. H. KIRK DOWNEY
-----------------------
DR. H. KIRK DOWNEY
/s/ SAM ROSEN
-----------------------
SAM ROSEN
/s/ KEVERN R. JOYCE
-----------------------
KEVERN R. JOYCE
/s/ DANA L. PERRY
-----------------------
DANA L. PERRY
/s/ R. J. SCHUMACHER
-----------------------
R. J. SCHUMACHER
/s/ W. C. WALKER
-----------------------
W. C. WALKER
