<PAGE> 1
As filed with the Securities and Exchange Commission on June 30, 1997
Registration No. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------
BARNETT INC.
(Exact name of issuer as specified in its charter)
Delaware 59-1380437
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
3333 Lenox Avenue
Jacksonville, Florida 32254
(Address of principal executive offices) (Zip Code)
----------
BARNETT INC. PROFIT SHARING AND 401(K) RETIREMENT PLAN
(Full title of the Plan)
----------
William R. Pray
President and Chief Executive Officer
3333 Lenox Avenue
Jacksonville, Florida 32254
(904) 384-6530
(Name, address and telephone number,
including area code, of agent for service)
Copies to:
Scott M. Zimmerman, Esq.
Shereff, Friedman, Hoffman
& Goodman, LLP
919 Third Avenue
New York, New York 10022
(212) 758-9500
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Proposed Maximum Proposed Maximum
Title of Securities to be Amount Offering Price Aggregate Amount of
Registered to be Registered(1) Per Share Offering Price Registration Fee
- -------------------------- ------------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Common Stock, par value 300,000 $24.75 $7,425,000 $2,250
$0.01 per share
- ------------------------------------------------ --------------------------------------------------------------------
<FN>
(1) Pursuant to Rule 416, this Registration Statement also covers such
additional securities as may become issuable to prevent dilution resulting
from stock splits, stock dividends or similar transaction.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) and (h), on the basis of the average of the high
and low prices of the Registrant's Common Stock as quoted on The Nasdaq
National Market on June 25, 1997.
</TABLE>
<PAGE> 2
PART II
INFORMATION REQUIRED IN
THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
---------------------------------------
The following documents, which have been filed by Barnett Inc., a
Delaware corporation (the "Registrant"), with the Securities and Exchange
Commission (the "Commission"), are incorporated herein by reference:
(a) The Registrant's latest prospectus filed pursuant to Rule 424(b)
under the Securities Act of 1933, as amended, that contains audited financial
statements for the Registrant's latest fiscal year for which such statements
have been filed, which was declared effective by the Securities and Exchange
Commission on April 15, 1997 (Commission File No. 333-22453).
(b) The Registrant's Annual Report on Form 10-K for the fiscal year
ended June 30, 1996.
(c) The Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 1996.
(d) The Registrant's Proxy Statement for Annual Meeting of
Stockholders held on December 4, 1996.
(e) The Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended December 31, 1996.
(f) The Registrant's Current Report on Form 8-K dated February 27,
1997.
(g) The Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1997.
(h) The description of the Registrant's Common Stock, par value $0.01
per share, which is contained in Registrant's Registration Statement on Form 8-A
filed pursuant to Section 12 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), including any amendment or report filed for the purpose of
updating such description.
In addition, all documents subsequently filed by the Registrant
pursuant to Section 13(a), 13(c), 14 and 15(d) of the Exchange Act, 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 to be a part of this Prospectus
from the date of filing hereof.
Item 4. Description of Securities.
--------------------------
Not applicable.
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<PAGE> 3
Item 5. Interest of Named Experts and Counsel.
--------------------------------------
Not applicable.
Item 6. Indemnification of Directors and Officers.
------------------------------------------
The indemnification of officers and directors of the Registrant is
governed by Section 145 of the General Corporation Law of the State of Delaware
(the "DGCL") and the Amended and Restated Certificate of Incorporation of the
Registrant (the "Certificate"). Among other things, the DGCL permits
indemnification of a director, officer, employee or agent in civil, criminal,
administrative or investigative actions, suits or proceedings (other than an
action by or in the right of the corporation) to which such person is a party or
is threatened to be made a party by reason of the fact of such relationship with
the corporation or the fact that such person is or was serving in a similar
capacity with another entity at the request of the corporation against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action if such
person acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, if he had no reasonable cause to believe his
conduct was unlawful. No indemnification may be made in any such suit to any
person adjudged to be liable to the corporation unless and only to the extent
that the Delaware Court of Chancery or the court in which the action was brought
determines that, despite the adjudication of liability but in view of all
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such court shall deem proper. Under the DGCL,
to the extent that a director, officer, employee or agent is successful, on the
merits or otherwise, in the defense of any action, suit or proceeding or any
claim, issue or matter therein (whether or not the suit is brought by or in the
right of the corporation), he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith. In all cases in which indemnification is permitted (unless ordered by
a court), it may be made by the corporation only as authorized in the specific
case upon a determination that the applicable standard of conduct has been met
by the party to be indemnified. The determination must be made by a majority of
the directors who were not parties to the action, suit or proceeding, even
though less than a quorum, or if there are no such directors, or if such
directors so direct, by independent legal counsel in a written opinion, or by
the stockholders. The statute authorizes the corporation to pay expenses
(including attorneys' fees) incurred by an officer or director in advance of a
final disposition of a proceeding upon receipt of an undertaking by or on behalf
of the person to whom the advance will be made, to repay the advances if it
shall ultimately be determined that he was not entitled to indemnification. Such
expenses (including attorneys' fees) incurred by other employees and agents may
be paid upon such terms and conditions, if any, as the Board may determine. The
DGCL provides that indemnification and advances of expenses permitted thereunder
are not to be exclusive of any rights to which those seeking indemnification or
advancement of expenses may be entitled under any By-law, agreement, vote of
stockholders or disinterested directors, or otherwise. The DGCL also authorizes
the corporation to purchase and maintain liability insurance on behalf of its
directors, officers, employees and agents regardless of whether the corporation
would have the statutory power to indemnify such persons against the liabilities
insured.
The Certificate provides that directors, officers and others shall be
indemnified to the fullest extent authorized by the DGCL, as in effect (or, to
the extent indemnification is broadened, as it may be amended), against any and
all expense, liability and loss (including attorneys' fees, judgments, fines,
ERISA excise taxes or penalties paid or to be paid in settlement) reasonably
incurred by such person in
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<PAGE> 4
connection with such proceeding. The Certificate further provides that, to the
extent permitted by law, expenses so incurred by any such person in defending
any such proceeding shall, at his request, be paid by the Registrant in advance
of the final disposition of such action or proceeding.
The Certificate provides that the right to indemnification and the
payment of expenses incurred in defending a proceeding in advance of its final
disposition shall not be exclusive of any other right which any person may have
or acquire under any law, statute, provision of the Certificate, By-laws,
agreement, vote of stockholders or disinterested directors or otherwise.
The Registrant maintains directors and officers liability and company
reimbursement insurance which, among other things (i) provides for payment on
behalf of its officers and directors against loss as defined in the policy
stemming from acts committed by directors and officers in their capacity as such
and (ii) provides for payment on behalf of the Registrant against such loss but
only when the Registrant shall be required or permitted to indemnify directors
or officers for such loss pursuant to statutory or common law or pursuant to
duly effective certificate of incorporation or by-law provisions.
Item 7. Exemption from Registration Claimed.
------------------------------------
Not applicable.
Item 8. Exhibits
--------
The following exhibits are filed as part of this registration
statement:
4.1 Barnett Inc. Profit Sharing and 401(k) Retirement Plan.
5.1 Opinion of Shereff, Friedman, Hoffman & Goodman, LLP.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Shereff, Friedman, Hoffman & Goodman, LLP (included in
Exhibit 5.1).
24 Power of Attorney (included in signature page to this registration
statement).
Item 9. Undertakings.
-------------
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of
1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of
this Registration Statement (or the most
recent post-
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<PAGE> 5
effective amendment thereof) which,
individually or in the aggregate,
represent a fundamental change in the
information set forth in this
Registration Statement. Notwithstanding
the foregoing, any increase or decrease
in volume of securities offered (if the
total dollar value of securities offered
would not exceed that which was
registered) and any deviation from the
low or high end of the estimated maximum
offering range may be reflected in the
form of prospectus filed with the
Securities and Exchange Commission
pursuant to Rule 424(b) promulgated under
the Securities Act of 1933 in the
aggregate, the changes in volume and
price represent no more than a 20% change
in the maximum aggregate offering price
set forth in the "Calculation of
Registration Fee" table in this
Registration Statement;
(iii) 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;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the registration statement is on Form S-3 or S-8 and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference 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.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for the 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 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.
(c) 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 foregoing provisions, 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 Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurredor 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
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<PAGE> 6
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 Act and
will be governed by the final adjudication of such issue.
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<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Jacksonville, State of Florida, on this 30th day of
June, 1997.
BARNETT INC.
By: /s/ William R. Pray
-----------------------------------------
William R. Pray
President and Chief Executive Officer
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned whose
signature appears below constitutes and appoints William R. Pray and Andrea M.
Luiga and each of them (with full power of each of them to act alone), his true
and lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution for him and on his behalf, and in his name, place and stead, in
any all capacities to execute and sign any and all amendments or post-effective
amendments to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact or any of them or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof and the Registrant hereby confers like authority on its behalf.
Pursuant to the requirements of the Securities Act of 1933, the
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ William R. Pray President, Chief Executive Officer and
- ------------------------------ Director (Principal Executive Officer) June 30, 1997
William R. Pray
/s/ Melvin Waxman Chairman of the Board of Directors and
- ------------------------------ Director June 30, 1997
Melvin Waxman
/s/ Armond Waxman Vice-Chairman of the Board of
- ------------------------------ Directors and Director June 30, 1997
Armond Waxman
/s/ Andrea M. Luiga Vice President-Finance and Chief
- ------------------------------ Financial Officer (Principal Financial June 30, 1997
Andrea M. Luiga and Accounting Officer)
/s/ Sheldon Adelman Director
- ------------------------------
Sheldon Adelman June 30, 1997
/s/ Morry Weiss Director
- ------------------------------
Morry Weiss June 30, 1997
</TABLE>
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<PAGE> 8
BARNETT INC.
FORM S-8
REGISTRATION STATEMENT
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
EXHIBIT PAGE
- ------- ----
<S> <C> <C>
4.1 Barnett Inc. Profit Sharing and 401(k) Retirement Plan.
5.1 Opinion of Shereff, Friedman, Hoffman & Goodman, LLP.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Shereff, Friedman, Hoffman & Goodman, LLP (included in
Exhibit 5.1).
24 Power of Attorney (included in signature page to this registration
statement).
</TABLE>
-8-
<PAGE> 1
EXHIBIT 4.1
<PAGE> 2
Your plan is an important legal document. This sample plan has been prepared
based on our understanding of the desired provisions. It may not fit your
situation. You should consult with your lawyer on the plan's legal and tax
implications. Neither Principal Mutual Life Insurance Company nor its agents can
be responsible for the legal or tax aspects of the plan nor its appropriateness
for your situation. If you wish to change the provisions of this sample plan,
you may ask us to prepare new sample wording for you and your lawyer to review.
<PAGE> 3
BARNETT INC. PROFIT SHARING AND
401(K) RETIREMENT PLAN
Defined Contribution Plan 7.7
Restated June 1, 1997
<PAGE> 4
TABLE OF CONTENTS
INTRODUCTION
ARTICLE I FORMAT AND DEFINITIONS
Section 1.01 - - - - -
Format
Section 1.02 - - - - -
Definitions
ARTICLE II PARTICIPATION
Section 2.01 - - - - -
Active Participant
Section 2.02 - - - - -
Inactive Participant
Section 2.03 - - - - -
Cessation of Participation
ARTICLE III CONTRIBUTIONS
Section 3.01 - - - - -
Employer Contributions
Section 3.01A - - - - -
Voluntary Contributions by Participants
Section 3.01B - - - - -
Rollover Contributions
Section 3.02 - - - - -
Forfeitures
Section 3.03 - - - - -
Allocation
Section 3.04 - - - - -
Contribution Limitation
Section 3.05 - - - - -
Excess Amounts
ARTICLE IV INVESTMENT OF CONTRIBUTIONS
Section 4.01 - - - - -
Investment of Contributions
Section 4.01A - - - - -
Investment in Qualifying Employer Securities
Section 4.01B - - - - -
Limitation on Investment in Qualifying Employer Securities
by Some Participants
<PAGE> 5
ARTICLE V BENEFITS
Section 5.01 - - - - -
Retirement Benefits
Section 5.02 - - - - -
Death Benefits
Section 5.03 - - - - -
Vested Benefits
Section 5.04 - - - - -
When Benefits Start
Section 5.05 - - - - -
Withdrawal Privileges
Section 5.06 - - - - -
Loans to Participants
ARTICLE VI DISTRIBUTION OF BENEFITS
Section 6.01 - - - - -
Automatic Forms of Distribution
Section 6.02 - - - - -
Optional Forms of Distribution and Distribution Requirements
Section 6.02A - - - - -
Distributions in Qualifying Employer Securities
Section 6.03 - - - - -
Election Procedures
Section 6.04 - - - - -
Notice Requirements
Section 6.05 - - - - -
Distributions Under Qualified Domestic Relations Orders
ARTICLE VII TERMINATION OF PLAN
ARTICLE VIII ADMINISTRATION OF PLAN
Section 8.01 - - - - -
Administration
Section 8.02 - - - - -
Records
Section 8.03 - - - - -
Information Available
Section 8.04 - - - - -
Claim and Appeal Procedures
Section 8.05 - - - - -
Unclaimed Vested Account Procedure
Section 8.06 - - - - -
Delegation of Authority
ARTICLE IX GENERAL PROVISIONS
TABLE OF CONTENTS
4
<PAGE> 6
Section 9.01 - - - - -
Amendments
Section 9.02 - - - - -
Direct Rollovers
Section 9.03 - - - - -
Mergers and Direct Transfers
Section 9.04 - - - - -
Provisions Relating to the Insurer and Other Parties
Section 9.05 - - - - -
Employment Status
Section 9.06 - - - - -
Rights to Plan Assets
Section 9.07 - - - - -
Beneficiary
Section 9.08 - - - - -
Nonalienation of Benefits
Section 9.09 - - - - -
Construction
Section 9.10 - - - - -
Legal Actions
Section 9.11 - - - - -
Small Amounts
Section 9.12 - - - - -
Word Usage
Section 9.13 - - - - -
Transfers Between Plans
ARTICLE X TOP-HEAVY PLAN REQUIREMENTS
Section 10.01 - - - - -
Application
Section 10.02 - - - - -
Definitions
Section 10.03 - - - - -
Modification of Vesting Requirements
Section 10.04 - - - - -
Modification of Contributions
Section 10.05 - - - - -
Modification of Contribution Limitation
PLAN EXECUTION
TABLE OF CONTENTS
5
<PAGE> 7
INTRODUCTION
The Primary Employer previously established a profit sharing and 401(k)
plan on July 1, 1984.
The Primary Employer is of the opinion that the plan should be changed.
It believes that the best means to accomplish these changes is to completely
restate the plan's terms, provisions and conditions. The restatement, effective
June 1, 1997, is set forth in this document and is substituted in lieu of the
prior document.
The restated plan continues to be for the exclusive benefit of employees
of the Employer. All persons covered under the plan on May 31, 1997, shall
continue to be covered under the restated plan with no loss of benefits.
It is intended that the plan, as restated, shall qualify as a profit
sharing plan under the Internal Revenue Code of 1986, including any later
amendments to the Code.
INTRODUCTION
6
<PAGE> 8
ARTICLE I
FORMAT AND DEFINITIONS
SECTION 1.01--FORMAT.
Words and phrases defined in the DEFINITIONS SECTION of Article I shall
have that defined meaning when used in this Plan, unless the context clearly
indicates otherwise.
These words and phrases have an initial capital letter to aid in
identifying them as defined terms.
SECTION 1.02--DEFINITIONS.
ACCOUNT means, for a Participant, his share of the Investment Fund.
Separate accounting records are kept for those parts of his Account that
result from:
(a) Voluntary Contributions
(b) Elective Deferral Contributions
(c) Matching Contributions
(d) Other Employer Contributions
If the Employer elects to include any of these Contributions in
computing the percentages in the EXCESS AMOUNTS SECTION of
Article III, a separate accounting record shall be kept for any
part of his Account resulting from such Employer Contributions.
(e) Rollover Contributions
If the Participant's Vesting Percentage is less than 100% as to any of
the Employer Contributions, a separate accounting record will be kept
for any part of his Account resulting from such Employer Contributions
and, if there has been a prior Forfeiture Date, from such Contributions
made before a prior Forfeiture Date.
A Participant's Account shall be reduced by any distribution of his
Vested Account and by any Forfeitures. A Participant's Account will
participate in the earnings credited, expenses charged and any
appreciation or depreciation of the Investment Fund. His Account is
subject to any minimum guarantees applicable under the Group Contract or
other investment arrangement.
ACTIVE PARTICIPANT means an Eligible Employee who is actively
participating in the Plan according to the provisions in the ACTIVE
PARTICIPANT SECTION of Article II.
AFFILIATED SERVICE GROUP means any group of corporations, partnerships
or other organizations of which the Employer is a part and which is
affiliated within the meaning of Code Section 414(m) and regulations
thereunder. Such a group includes at least two organizations one of
which is either a service organization (that is, an organization the
principal business of which is performing services), or an organization
the principal business of which is performing management functions on a
regular and continuing basis. Such service is of a type
ARTICLE I
7
<PAGE> 9
historically performed by employees. In the case of a management
organization, the Affiliated Service Group shall include organizations
related, within the meaning of Code Section 144(a)(3), to either the
management organization or the organization for which it performs
management functions. The term Controlled Group, as it is used in this
Plan, shall include the term Affiliated Service Group.
ALTERNATE PAYEE means any spouse, former spouse, child or other
dependent of a participant who is recognized by a qualified domestic
relations order as having a right to receive all, or a portion of the
benefits payable under the Plan with respect to such Participant.
ANNUAL COMPENSATION means, on any given date, the Employee's
Compensation for the latest Compensation Year ending on or before the
given date.
ANNUITY STARTING DATE means, for a Participant, the first day of the
first period for which an amount is payable as an annuity or any other
form.
BENEFICIARY means the person or persons named by a Participant to
receive any benefits under this Plan upon the Participant's death. See
the BENEFICIARY SECTION of Article IX.
CLAIMANT means any person who has made a claim for benefits under this
Plan. See the CLAIM AND APPEAL PROCEDURES SECTION of Article VIII.
CODE means the Internal Revenue Code of 1986, as amended.
COMPENSATION means, except as modified in this definition, the total
earnings paid or made available to an Employee by the Employer during
any specified period.
"Earnings" in this definition means Compensation as defined in the
CONTRIBUTION LIMITATION SECTION of Article III.
Compensation shall also include elective contributions. Elective
contributions are amounts excludable from the Employee's gross income
under Code Sections 125, 402(e)(3), 402(h) or 403(b), and contributed by
the Employer, at the Employee's election, to a Code Section 401(k)
arrangement, a simplified employee pension, cafeteria plan or
tax-sheltered annuity. Elective contributions also include Compensation
deferred under a Code Section 457 plan maintained by the Employer and
Employee contributions "picked up" by a governmental entity and,
pursuant to Code Section 414(h)(2), treated as Employer contributions.
Compensation shall exclude earnings paid before the Employee's Entry
Date.
For Plan Years beginning after December 31, 1988, and before January 1,
1994, the annual Compensation of each Participant taken into account for
determining all benefits provided under the Plan for any year shall not
exceed $200,000. For Plan Years beginning on or after January 1, 1994,
the annual Compensation of each Participant taken into account for
determining all benefits provided under the Plan for any year shall not
exceed $150,000.
The $200,000 limit shall be adjusted by the Secretary at the same time
and in the same manner as under Code Section 415(d). The $150,000 limit
shall be 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 pay is determined (determination period)
beginning in such calendar year. If a determination period consists of
fewer than 12 months, the annual compensation limit will be multiplied
ARTICLE I
8
<PAGE> 10
by a fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is 12.
In determining the Compensation of a Participant for purposes of the
annual compensation limit, the rules of Code Section 414(q)(6) 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 19 before the close of the
year. If, as a result of the application of such rules the adjusted
annual compensation limit is exceeded, then (except for purposes of
determining the portion of Compensation up to the integration level if
this Plan 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 definition prior to
the application of this limitation.
If Compensation for any prior determination period is taken into account
in determining a Participant's benefits accruing in the current Plan
Year, the Compensation for that prior determination period is subject to
the 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, 1989,
which are used to determine benefits in Plan Years beginning after
December 31, 1988 and before January 1, 1994, the annual compensation
limit is $200,000. For this purpose, for determination periods beginning
before the first day of the first Plan Year beginning on or after
January 1, 1994, which are used to determine benefits in Plan Years
beginning on or after January 1, 1994, the annual compensation limit is
$150,000.
Compensation means, for an Employee who is a Leased Employee, the
Employee's Compensation for the services he performs for the Employer,
determined in the same manner as the Compensation of Employees who are
not Leased Employees, regardless of whether such Compensation would be
received directly from the Employer or from the leasing organization.
COMPENSATION YEAR means each one-year period ending on the last day of
the Plan Year, including corresponding periods before July 1, 1984.
CONTINGENT ANNUITANT means an individual named by the Participant to
receive a lifetime benefit after the Participant's death in accordance
with a survivorship life annuity.
CONTRIBUTION DATE means the date on which Matching Contributions will be
made. The Contribution Date will be the last day of each calendar month.
CONTRIBUTIONS means
Elective Deferral Contributions
Matching Contributions
Qualified Nonelective Contributions
Discretionary Contributions
Voluntary Contributions
Rollover Contributions
as set out in Article III, unless the context clearly indicates
otherwise.
CONTROLLED GROUP means any group of corporations, trades or businesses
of which the Employer is a part that are under common control. A
Controlled Group includes any group of corporations, trades or
businesses, whether or
ARTICLE I
9
<PAGE> 11
not incorporated, which is either a parent-subsidiary group, a
brother-sister group, or a combined group within the meaning of Code
Section 414(b), Code Section 414(c) and regulations thereunder and, for
purposes of determining contribution limitations under the CONTRIBUTION
LIMITATION SECTION of Article III, as modified by Code Section 415(h)
and, for the purpose of identifying Leased Employees, as modified by
Code Section 144(a)(3). The term Controlled Group, as it is used in this
Plan, shall include the term Affiliated Service Group and any other
employer required to be aggregated with the Employer under Code Section
414(o) and the regulations thereunder.
DIRECT ROLLOVER means a payment by the Plan to the Eligible Retirement
Plan specified by the Distributee.
DISCRETIONARY CONTRIBUTIONS means discretionary contributions made by
the Employer to fund this Plan. See the EMPLOYER CONTRIBUTIONS SECTION
of Article III.
DISTRIBUTEE means an Employee or former Employee. In addition, the
Employee's or former Employee's surviving spouse and the Employee's or
former Employee's spouse or former spouse who is the alternate payee
under a qualified domestic relations order, as defined in Code Section
414(p), are Distributees with regard to the interest of the spouse or
former spouse.
ELECTIVE DEFERRAL CONTRIBUTIONS means Contributions made by the Employer
to fund this Plan in accordance with a qualified cash or deferred
arrangement as described in Code Section 401(k). See the EMPLOYER
CONTRIBUTIONS SECTION of Article III.
ELIGIBILITY BREAK IN SERVICE means an Eligibility Computation Period in
which an Employee is credited with 500 or fewer Hours-of-Service. An
Employee incurs an Eligibility Break in Service on the last day of an
Eligibility Computation Period in which he has an Eligibility Break in
Service.
ELIGIBILITY COMPUTATION PERIOD means a 12-consecutive month period. The
first Eligibility Computation Period begins on an Employee's Employment
Commencement Date. Later Eligibility Computation Periods begin on
anniversaries of his Employment Commencement Date.
To determine an Eligibility Computation Period after an Eligibility
Break in Service, the Plan shall use the 12-consecutive month period
beginning on an Employee's Reemployment Commencement Date as if his
Reemployment Commencement Date were his Employment Commencement Date.
ELIGIBILITY SERVICE means one year of service for each Eligibility
Computation Period that has ended and in which an Employee is credited
with at least 1,000 Hours-of-Service.
However, Eligibility Service is modified as follows:
Predecessor Employer service included:
An Employee's service with a Predecessor Employer shall be
included as service with the Employer.
ARTICLE I
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Period of Military Duty included:
A Period of Military Duty shall be included as service with the
Employer to the extent it has not already been credited. For
purposes of crediting Hours-of-Service during the Period of
Military Duty, an Hour-of-Service shall be credited (without
regard to the 501 Hour-of-Service limitation) for each hour an
Employee would normally have been scheduled to work for the
Employer during such period.
Controlled Group service included:
An Employee's service with a member firm of a Controlled Group
while both that firm and the Employer were members of the
Controlled Group shall be included as service with the Employer.
ELIGIBLE EMPLOYEE means any Employee of the Employer.
ELIGIBLE RETIREMENT PLAN means an individual retirement account
described in Code Section 408(a), an individual retirement annuity
described in Code Section 408(b), an annuity plan described in Code
Section 403(a) or a qualified trust described in Code Section 401(a),
that accepts the Distributee's Eligible Rollover Distribution.
However, in the case of an Eligible Rollover Distribution to the
surviving spouse, an Eligible Retirement Plan is an individual
retirement account or individual retirement annuity.
ELIGIBLE ROLLOVER DISTRIBUTION means any distribution of all or any
portion of the balance to the credit of the Distributee, except that an
Eligible Rollover Distribution does not include:
(a) 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.
(b) Any distribution to the extent such distribution is required
under Code Section 401(a)(9).
(c) The portion of any distribution that is not includible in gross
income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities).
EMPLOYEE means an individual who is employed by the Employer or any
other employer required to be aggregated with the Employer under Code
Sections 414(b), (c), (m) or (o). A Controlled Group member is required
to be aggregated with the Employer.
The term Employee shall also include any Leased Employee deemed to be an
employee of any employer described in the preceding paragraph as
provided in Code Sections 414(n) or 414(o).
EMPLOYER means the Primary Employer. This will also include any
successor corporation or firm of the Employer which shall, by written
agreement, assume the obligations of this Plan or any predecessor
corporation or firm of the Employer (absorbed by the Employer, or of
which the Employer was once a part) which became a predecessor because
of a change of name, merger, purchase of stock or purchase of assets and
which maintained this Plan.
EMPLOYER CONTRIBUTIONS means
ARTICLE I
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Elective Deferral Contributions
Matching Contributions
Qualified Nonelective Contributions
Discretionary Contributions
as set out in Article III, unless the context clearly indicates
otherwise.
EMPLOYMENT COMMENCEMENT DATE means the date an Employee first performs
an Hour-of-Service.
ENTRY DATE means the date an Employee first enters the Plan as an Active
Participant. See the ACTIVE PARTICIPANT SECTION of Article II.
FISCAL YEAR means the Primary Employer's taxable year. The last day of
the Fiscal Year is June 30.
FORFEITURE means the part, if any, of a Participant's Account that is
forfeited. See the FORFEITURES SECTION of Article III.
FORFEITURE DATE means, as to a Participant, the date the Participant
incurs five consecutive Vesting Breaks in Service. A Participant incurs
a Vesting Break in Service on the last day of the period used to
determine the Vesting Break in Service.
This is the date on which the Participant's Nonvested Account will be
forfeited unless an earlier forfeiture occurs as provided in the
FORFEITURES SECTION of Article III.
GROUP CONTRACT means the group annuity contract or contracts into which
the Trustee enters with the Insurer for the investment of Contributions
and the payment of benefits under this Plan. The term Group Contract as
it is used in this Plan is deemed to include the plural unless the
context clearly indicates otherwise.
HIGHLY COMPENSATED EMPLOYEE means a highly compensated active Employee
or a highly compensated former Employee.
A highly compensated active Employee means any Employee who performs
service for the Employer during the determination year and who, during
the look-back year is:
(a) An Employee who is a 5% owner, as defined in Section
416(i)(1)(B)(i), at any time during the determination year or the
look-back year.
(b) An Employee who receives compensation in excess of $75,000
(indexed in accordance with Section 415(d) during the look-back
year.
(c) An Employee who receives compensation in excess of $50,000
(indexed in accordance with Section 415(d) during the look-back
year and is a member of the top-paid group for the look-back
year.
(d) An Employee who is an officer, within the meaning of Section
416(i), during the look-back year and who receives compensation
in the look-back year greater than 50% of the dollar limitation
in effect under Section 415(b)(1)(A) for the calendar year in
which the look-back year begins. The number of officers is
limited to 50 (or, if lesser, the greater of 3 employees or 10%
of employees) excluding those employees who may be excluded in
determining the top-paid group.
ARTICLE I
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(e) An Employee who is both described in paragraph b, c or d above
when these paragraphs are modified to substitute the
determination year for the look-back year and one of the 100
Employees who receive the most compensation from the Employer
during the determination year.
If no officer has satisfied the compensation requirement of (c) 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.
A highly compensated former Employee means any Employee who separated
from service (or was deemed to have separated) prior to the
determination year, performs no service for the Employer during the
determination year, and was a highly compensated active Employee for
either the separation year or any determination year ending on or after
the Employee's 55th birthday.
If an Employee is, during a determination year or look-back year, a
family member of either a 5 percent owner who is an active or former
Employee or a Highly Compensated Employee who is one of the 10 most
highly compensated Employees ranked on the basis of compensation paid by
the Employer during such year, 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 definition, family member includes the spouse, lineal ascendants
and descendants of the Employee or former Employee and the spouses of
such lineal ascendants and descendants.
Compensation is compensation within the meaning of Code Section
415(c)(3), including elective or salary reduction contributions to a
cafeteria plan, cash or deferred arrangement or tax-sheltered annuity.
The top-paid group consists of the top 20% of employees ranked on the
basis of compensation received during the year.
Employers aggregated under Section 414(b), (c), (m) or (o) are treated
as a single Employer.
HOUR-OF-SERVICE means the following:
(a) Each hour for which an Employee is paid, or entitled to payment,
for performing duties for the Employer during the applicable
computation period.
(b) Each hour for which an Employee is paid, or entitled to payment,
by the Employer because of a period of time in which no duties
are performed (irrespective of whether the employment
relationship has terminated) due to vacation, holiday, illness,
incapacity (including disability), layoff, jury duty, military
duty or leave of absence. Notwithstanding the preceding
provisions of this subparagraph (b), no credit will be given to
the Employee
(1) for more than 501 Hours-of-Service under this subparagraph
(b) because of any single continuous period in which the
Employee performs no duties (whether or not such period
occurs in a single computation period); or
(2) for an Hour-of-Service for which the Employee is directly
or indirectly paid, or entitled to payment, because of a
period in which no duties are performed if such payment is
made or due under
ARTICLE I
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a plan maintained solely for the purpose of complying with
applicable worker's or workmen's compensation, or
unemployment compensation or disability insurance laws; or
(3) for an Hour-of-Service for a payment which solely
reimburses the Employee for medical or medically related
expenses incurred by him.
For purposes of this subparagraph (b), 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.
(c) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The same
Hours-of-Service shall not be credited both under subparagraph
(a) or subparagraph (b) above (as the case may be) and under this
subparagraph (c). Crediting of Hours-of-Service for back pay
awarded or agreed to with respect to periods described in
subparagraph (b) above will be subject to the limitations set
forth in that subparagraph.
The crediting of Hours-of-Service above shall be applied under the rules
of paragraphs (b) and (c) of the Department of Labor Regulation
2530.200b-2 (including any interpretations or opinions implementing said
rules); which rules, by this reference, are specifically incorporated in
full within this Plan. The reference to paragraph (b) applies to the
special rule for determining hours of service for reasons other than the
performance of duties such as payments calculated (or not calculated) on
the basis of units of time and the rule against double credit. The
reference to paragraph (c) applies to the crediting of hours of service
to computation periods.
Hours-of-Service shall be credited for employment with any other
employer required to be aggregated with the Employer under Code Sections
414(b), (c), (m) or (o) and the regulations thereunder for purposes of
eligibility and vesting. Hours-of-Service shall also be credited for any
individual who is considered an employee for purposes of this Plan
pursuant to Code Section 414(n) or Code Section 414(o) and the
regulations thereunder.
Solely for purposes of determining whether a one-year break in service
has occurred for eligibility or vesting purposes, during a Parental
Absence an Employee shall be credited with the Hours-of-Service which
otherwise would normally have been credited to the Employee but for such
absence, or in any case in which such hours cannot be determined, eight
Hours-of-Service per day of such absence. The Hours-of-Service credited
under this paragraph shall be credited in the computation period in
which the absence begins if the crediting is necessary to prevent a
break in service in that period; or in all other cases, in the following
computation period.
INACTIVE PARTICIPANT means a former Active Participant who has an
Account. See the INACTIVE PARTICIPANT SECTION of Article II.
INSURER means Principal Mutual Life Insurance Company and any other
insurance company or companies named by the Trustee or Primary Employer.
INVESTMENT FUND means the total assets held for the purpose of providing
benefits for Participants. These funds result from Contributions made
under the Plan.
INVESTMENT MANAGER means any fiduciary (other than a trustee or Named
Fiduciary)
ARTICLE I
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(a) who has the power to manage, acquire, or dispose of any assets of
the Plan; and
(b) who (1) is registered as an investment adviser under the
Investment Advisers Act of 1940, or (2) is a bank, as defined in
the Investment Advisers Act of 1940, or (3) is an insurance
company qualified to perform services described in subparagraph
(a) above under the laws of more than one state; and
(c) who has acknowledged in writing being a fiduciary with respect to
the Plan.
LATE RETIREMENT DATE means the first day of any month which is after a
Participant's Normal Retirement Date and on which retirement benefits
begin. If a Participant continues to work for the Employer after his
Normal Retirement Date, his Late Retirement Date shall be the earliest
first day of the month on or after he ceases to be an Employee. A later
Retirement Date may apply if the Participant so elects. An earlier
Retirement Date may apply if the Participant is age 70 1/2. See the WHEN
BENEFITS START SECTION of Article V.
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 service performed
for the recipient employer shall be treated as provided by the recipient
employer.
A Leased Employee shall not be considered an employee of the recipient
if:
(a) such employee is covered by a money purchase pension plan
providing (1) a nonintegrated employer contribution rate of at
least 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
(b) Leased Employees do not constitute more than 20 percent of the
recipient's nonhighly compensated workforce.
LOAN ADMINISTRATOR means the person or positions authorized to
administer the Participant loan program.
The Loan Administrator is the Vice President of Human Resources.
MATCHING CONTRIBUTIONS means matching contributions made by the Employer
to fund this Plan. See the EMPLOYER CONTRIBUTIONS SECTION of Article
III.
MONTHLY DATE means each Yearly Date and the same day of each following
month during the Plan Year beginning on such Yearly Date.
NAMED FIDUCIARY means the person or persons who have authority to
control and manage the operation and administration of the Plan.
The Named Fiduciary is the Employer.
ARTICLE I
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NONHIGHLY COMPENSATED EMPLOYEE means an Employee of the Employer who is
neither a Highly Compensated Employee nor a family member.
NONVESTED ACCOUNT means the part, if any, of a Participant's Account
that is in excess of his Vested Account.
NORMAL FORM means a straight life annuity.
NORMAL RETIREMENT AGE means the age at which the Participant's normal
retirement benefit becomes nonforfeitable. A Participant's Normal
Retirement Age is the older of (a) or (b) below:
(a) Age 60.
(b) His age on the date five years after his Employment Commencement
Date but not older than his age on the date five years after the
first day of the Plan Year in which his Entry Date occurred.
NORMAL RETIREMENT DATE means the earliest first day of the month on or
after the date the Participant reaches his Normal Retirement Age. Unless
otherwise provided in this Plan, a Participant's retirement benefits
shall begin on a Participant's Normal Retirement Date if he has ceased
to be an Employee on such date and has a Vested Account. However,
retirement benefits shall not begin before the later of age 62 or Normal
Retirement Age unless the qualified election procedures of the ELECTION
PROCEDURES SECTION of Article VI are met. An earlier Retirement Date may
apply if the Participant is age 70 1/2.
See the WHEN BENEFITS START SECTION of Article V.
PARENTAL ABSENCE means an Employee's absence from work which begins on
or after the first Yearly Date after December 31, 1984,
(a) by reason of pregnancy of the Employee,
(b) by reason of birth of a child of the Employee,
(c) by reason of the placement of a child with the Employee in
connection with adoption of such child by such Employee, or
(d) for purposes of caring for such child for a period beginning
immediately following such birth or placement.
PARTICIPANT means either an Active Participant or an Inactive
Participant.
PARTICIPANT CONTRIBUTIONS means Voluntary Contributions as set out in
Article III.
PERIOD OF MILITARY DUTY means, for an Employee
(a) who served as a member of the armed forces of the United States,
and
(b) who was reemployed by the Employer at a time when the Employee
had a right to reemployment in accordance with seniority rights
as protected under Section 2021 through 2026 of Title 38 of the
U. S. Code,
the period of time from the date the Employee was first absent from
active work for the Employer because of such military duty to the date
the Employee was reemployed.
ARTICLE I
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PLAN means the profit sharing and 401(k) plan of the Employer set forth
in this document, including any later amendments to it.
PLAN ADMINISTRATOR means the person or persons who administer the Plan.
The Plan Administrator is the Employer.
PLAN YEAR means a period beginning on a Yearly Date and ending on the
day before the next Yearly Date.
PREDECESSOR EMPLOYER means Barnett Brass and Copper.
PRIMARY EMPLOYER means BARNETT INC.
QUALIFIED JOINT AND SURVIVOR FORM means, for a Participant who has a
spouse, an immediate survivorship life annuity with installment refund,
where the survivorship percentage is 50% and the Contingent Annuitant is
the Participant's spouse. A former spouse will be treated as the spouse
to the extent provided under a qualified domestic relations order as
described in Code Section 414(p). If a Participant does not have a
spouse, the Qualified Joint and Survivor Form means the Normal Form.
The amount of benefit payable under the Qualified Joint and Survivor
Form shall be the amount of benefit which may be provided by the
Participant's Vested Account.
QUALIFIED MATCHING CONTRIBUTIONS means Matching Contributions which are
subject to the distribution and nonforfeitability requirements under
Code Section 401(k). See the EMPLOYER CONTRIBUTIONS SECTION of Article
III.
QUALIFIED NONELECTIVE CONTRIBUTIONS means contributions (other than
Employer Contributions made to the Plan on behalf of a Participant on
account of Elective Deferral Contributions or on account of
contributions made by the Participant) made by the Employer to fund this
Plan which an Employee may not elect to have paid to him in cash instead
of being contributed to the Plan and which are subject to the
distribution and nonforfeitability requirements under Code Section
401(k). See the EMPLOYER CONTRIBUTIONS SECTION of Article III.
QUALIFIED PRERETIREMENT SURVIVOR ANNUITY means a single life annuity
with installment refund payable to the surviving spouse of a Participant
who dies before his Annuity Starting Date. A former spouse will be
treated as the surviving spouse to the extent provided under a qualified
domestic relations order as described in Code Section 414(p).
QUALIFYING EMPLOYER SECURITY means any instrument issued by the Employer
and meeting the requirements of Section 4975(e) (8) of the Code.
QUALIFYING EMPLOYER SECURITIES ACCOUNT means for a Participant, his
share of Qualifying Employer Securities.
QUARTERLY DATE means each Yearly Date and the third, sixth and ninth
Monthly Date after each Yearly Date which is within the same Plan Year.
REEMPLOYMENT COMMENCEMENT DATE means the date an Employee first performs
an Hour-of-Service following an Eligibility or a Vesting Break in
Service, whichever applies.
ARTICLE I
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REENTRY DATE means the date a former Active Participant reenters the
Plan. See the ACTIVE PARTICIPANT SECTION of Article II.
RETIREMENT DATE means the date a retirement benefit will begin and is a
Participant's Normal or Late Retirement Date, as the case may be.
ROLLOVER CONTRIBUTIONS means the Rollover Contributions which are made
by or for a Participant according to the provisions of the ROLLOVER
CONTRIBUTIONS SECTION of Article III.
SEMI-YEARLY DATE means each Yearly Date and the sixth Monthly Date after
each Yearly Date which is within the same Plan Year.
TEFRA means the Tax Equity and Fiscal Responsibility Act of 1982.
TEFRA COMPLIANCE DATE means the date a plan is to comply with the
provisions of TEFRA. The TEFRA Compliance Date as used in this Plan is,
(a) for purposes of contribution limitations, Code Section 415,
(1) if the plan was in effect on July 1, 1982, the first day
of the first limitation year which begins after December
31, 1982, or
(2) if the plan was not in effect on July 1, 1982, the first
day of the first limitation year which ends after July 1,
1982.
(b) for all other purposes, the first Yearly Date after December 31,
1983.
TOTALLY AND PERMANENTLY DISABLED means that a Participant is incapable
of engaging in any substantial gainful activity because of a medically
determinable physical or mental impairment which can be expected to
result in death, or to be of long, continued and indefinite duration.
Such determination shall be made by the Plan Administrator with the
advise of competent medical authority. All Participants in similar
circumstances will be treated alike.
TRUST means an agreement of trust between the Primary Employer and
Trustee established for the purpose of holding and distributing the
Trust Fund under the provisions of the Plan. The Trust may provide for
the investment of all or any portion of the Trust Fund in the Group
Contract.
TRUST FUND means the total funds held under the Trust for the purpose of
providing benefits for Participants. These funds result from
Contributions made under the Plan which are forwarded to the Trustee to
be deposited in the Trust Fund.
TRUSTEE means the trustee or trustees under the Trust. The term Trustee
as it is used in this Plan is deemed to include the plural unless the
context clearly indicates otherwise.
VALUATION DATE means for the purposes of the date on which the value of
the Qualifying Employer Securities Account assets of the Trust is
determined. The value of each Qualifying Employer Securities Account
which is maintained under this Plan shall be determined on the Valuation
Date. In each Plan Year, the Valuation Date shall be the last day of
each month that the public exchange over which the Qualifying Employer
Security is traded is open for
ARTICLE I
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unrestricted trading. In addition, the Plan Administrator may designate
from time to time, so long as the Trustee agrees that another date or
dates shall be Valuation Dates with respect to a specific Plan Year.
VESTED ACCOUNT means the vested part of a Participant's Account. The
Participant's Vested Account is determined as follows.
If the Participant's Vesting Percentage is 100%, his Vested Account
equals his Account.
If the Participant's Vesting Percentage is less than 100%, his Vested
Account equals the sum of (a) and (b) below:
(a) The part of the Participant's Account that results from Employer
Contributions made before a prior Forfeiture Date and all other
Contributions which were 100% vested when made.
(b) The balance of the Participant's Account in excess of the amount
in (a) above multiplied by his Vesting Percentage.
If the Participant has withdrawn any part of his Account resulting from
Employer Contributions, other than the vested Employer Contributions
included in (a) above, the amount determined under this subparagraph (b)
shall be equal to P(AB + D) - D as defined below:
P The Participant's Vesting Percentage.
AB The balance of the Participant's Account in excess of the amount
in (a) above.
D The amount of withdrawal resulting from Employer Contributions,
other than the vested Employer Contributions included in (a)
above.
The Participant's Vested Account is nonforfeitable.
VESTING BREAK IN SERVICE means a Vesting Computation Period in which an
Employee is credited with 500 or fewer Hours-of-Service. An Employee
incurs a Vesting Break in Service on the last day of a Vesting
Computation Period in which he has a Vesting Break in Service.
VESTING COMPUTATION PERIOD means a 12-consecutive month period ending on
the last day of each Plan Year, including corresponding 12-consecutive
month periods before July 1, 1984.
VESTING PERCENTAGE means the percentage used to determine the
nonforfeitable portion of a Participant's Account attributable to
Employer Contributions which were not 100% vested when made.
A Participant's Vesting Percentage is shown in the following schedule
opposite the number of whole years of his Vesting Service.
VESTING SERVICE VESTING
(whole years) PERCENTAGE
Less than 1 0
1 20
2 40
ARTICLE I
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3 60
4 80
5 or more 100
However, the Vesting Percentage for a Participant who is an Employee on
or after the earliest of (i) the date he reaches his Normal Retirement
Age, (ii) the date of his death, or (iii) the date he becomes Totally
and Permanently Disabled,
If the schedule used to determine a Participant's Vesting Percentage is
changed, the new schedule shall not apply to a Participant unless he is
credited with an Hour-of-Service on or after the date of the change and
the Participant's nonforfeitable percentage on the day before the date
of the change is not reduced under this Plan. The amendment provisions
of the AMENDMENT SECTION of Article IX regarding changes in the
computation of the Vesting Percentage shall apply.
VESTING SERVICE means one year of service for each Vesting Computation
Period in which an Employee is credited with at least 1,000
Hours-of-Service.
However, Vesting Service is modified as follows:
Predecessor Employer service included:
An Employee's service with a Predecessor Employer shall be
included as service with the Employer.
Period of Military Duty included:
A Period of Military Duty shall be included as service with the
Employer to the extent it has not already been credited. For
purposes of crediting Hours-of-Service during the Period of
Military Duty, an Hour-of-Service shall be credited (without
regard to the 501 Hour-of-Service limitation) for each hour an
Employee would normally have been scheduled to work for the
Employer during such period.
Controlled Group service included:
An Employee's service with a member firm of a Controlled Group
while both that firm and the Employer were members of the
Controlled Group shall be included as service with the Employer.
VOLUNTARY CONTRIBUTIONS means contributions by a Participant that are
not required as a condition of employment or participation or for
obtaining additional benefits from the Employer Contributions. See the
VOLUNTARY CONTRIBUTIONS BY PARTICIPANTS SECTION of Article III.
YEARLY DATE means July 1, 1984, and the same day of each following year.
YEARS OF SERVICE means an Employee's Vesting Service disregarding any
modifications which exclude service.
ARTICLE I
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ARTICLE II
PARTICIPATION
SECTION 2.01--ACTIVE PARTICIPANT.
(a) An Employee shall first become an Active Participant (begin
active participation in the Plan) on the earliest Quarterly Date
on or after June 1, 1997, on which he is an Eligible Employee and
has met both of the eligibility requirements set forth below.
This date is his Entry Date.
(1) He has completed one year of Eligibility Service before
his Entry Date.
(2) He is age 21 or older.
Each Employee who was an Active Participant under the Plan on May
31, 1997, shall continue to be an Active Participant if he is
still an Eligible Employee on June 1, 1997, and his Entry Date
shall not change.
If a person has been an Eligible Employee who has met all the
eligibility requirements above, but is not an Eligible Employee
on the date which would have been his Entry Date, he shall become
an Active Participant on the date he again becomes an Eligible
Employee. This date is his Entry Date.
(b) An Inactive Participant shall again become an Active Participant
(resume active participation in the Plan) on the date he again
performs an Hour-of-Service as an Eligible Employee. This date is
his Reentry Date.
Upon again becoming an Active Participant, he shall cease to be
an Inactive Participant.
(c) A former Participant shall again become an Active Participant
(resume active participation in the Plan) on the date he again
performs an Hour-of-Service as an Eligible Employee. This date is
his Reentry Date.
There shall be no duplication of benefits for a Participant under this
Plan because of more than one period as an Active Participant.
SECTION 2.02--INACTIVE PARTICIPANT.
An Active Participant shall become an Inactive Participant (stop
accruing benefits under the Plan) on the earlier of the following:
(a) The date on which he ceases to be an Eligible Employee (on his
Retirement Date if the date he ceases to be an Eligible Employee
occurs within one month of his Retirement Date).
(b) The effective date of complete termination of the Plan.
An Employee or former Employee who was an Inactive Participant under the
Plan on May 31, 1997, shall continue to be an Inactive Participant on June 1,
1997. Eligibility for any benefits payable to him or on his behalf and the
amount of the benefits shall be determined according to the provisions of the
prior document, unless otherwise stated in this document.
ARTICLE I
21
<PAGE> 23
SECTION 2.03--CESSATION OF PARTICIPATION.
A Participant shall cease to be a Participant on the date he is no
longer an Eligible Employee and his Account is zero.
ARTICLE II
22
<PAGE> 24
ARTICLE III
CONTRIBUTIONS
SECTION 3.01--EMPLOYER CONTRIBUTIONS.
Employer Contributions for Plan Years which end on or after June 1,
1997, may be made without regard to current or accumulated net income, earnings,
or profits of the Employer. Notwithstanding the foregoing, the Plan shall
continue to be designed to qualify as a profit sharing plan for purposes of Code
Sections 401(a), 402, 412, and 417. Such Contributions will be equal to the
Employer Contributions as described below:
(a) The amount of each Elective Deferral Contribution for a
Participant shall be equal to any percentage (not less than 1%
nor more than 15%) of his Compensation as elected in his elective
deferral agreement. An Employee who is eligible to participate in
the Plan may file an elective deferral agreement with the
Employer. The elective deferral agreement to start Elective
Deferral Contributions may be effective on a Participant's Entry
Date (Reentry Date, if applicable) or any following Quarterly
Date. The Participant shall make any change or terminate the
elective deferral agreement by filing a new elective deferral
agreement. A Participant's elective deferral agreement may be
changed by a Participant four times during the Plan Year, at any
time, by filing written notice thereof with the Plan
Administrator. Such notice shall be effective, and the elective
deferral agreement shall be changed on the date specified in such
notice or as soon as administratively possible, which date must
be at least 15 days after such notice is filed. A Participant's
elective deferral agreement to stop Elective Deferral
Contributions may be effective on any date. The elective deferral
agreement must be in writing and effective before the beginning
of the pay period in which Elective Deferral Contributions are to
start, change or stop.
Elective Deferral Contributions are fully (100%) vested and
nonforfeitable.
(b) The amount of each Matching Contribution for a Participant shall
be equal to a percentage as determined by the Employer, of the
Elective Deferral Contributions made for him for the month,
disregarding Elective Deferral Contributions in excess of 4% of
his Compensation for the month. A Matching Contribution shall be
made for Participants and former Participants who (i) are Active
Participants on the Contribution Date or (ii) were Active
Participants at any time since the last Contribution Date and
have died, retired or become Totally and Permanently Disabled.
An additional Matching Contribution shall be made for a
Participant whose Elective Deferral Contributions for the Plan
Year have been limited by Code Section 402(g). The amount of such
Matching Contribution shall be equal to the excess, if any of (i)
Matching Contributions that would have been made had Elective
Deferral Contributions been spread out evenly over the Plan Year,
less (ii) Matching Contributions previously made for such
Employee during the Plan Year.
Matching Contributions are subject to the Vesting Percentage.
The Employer may designate at the time of contribution that all
or a portion of such Matching Contributions be treated as
Qualified Matching Contributions. Such Qualified Matching
Contributions are fully (100%) vested and nonforfeitable.
ARTICLE III
23
<PAGE> 25
(c) The amount of each Qualified Nonelective Contribution shall be
equal to a fixed percentage of each eligible Participants'
Compensation as determined by the Employer. A Qualified
Nonelective Contribution shall be made for a Participant only if
he is a Nonhighly Compensated Employee. The fixed percentage
shall be equal to the minimum fixed percentage necessary to be
contributed by the Employer on behalf of each eligible Nonhighly
Compensated Employee who is a Participant so that the actual
deferred percentage test or the actual contribution percentage
test is satisfied.
Qualified Nonelective Contributions are fully (100%) vested and
nonforfeitable.
(d) The amount of each Discretionary Contribution shall be determined
by the Employer.
Discretionary Contributions are fully (100%) vested and
nonforfeitable.
The Employer may designate at the time of contribution that all
or a portion of such Discretionary Contribution be treated as a
Qualified Nonelective Contribution. Such Qualified Nonelective
Contributions are fully (100%) vested and nonforfeitable.
No Participant shall be permitted to have Elective Deferral
Contributions, as defined in the EXCESS AMOUNTS SECTION of Article III, made
under this Plan, or any other qualified plan maintained by the Employer, during
any taxable year, in excess of the dollar limitation contained in Code Section
402(g) in effect at the beginning of such taxable year.
The Employer shall pay to the Trustee its Contributions used to
determine the Actual Deferral Percentage, as defined in the EXCESS AMOUNTS
SECTION of Article III, to the Plan for each Plan Year not later than the end of
the twelve-month period immediately following the Plan Year for which they are
deemed to be paid. Any such Contributions accumulated through payroll deductions
shall be paid within 90 days of the date withheld or the date it is first
reasonably practical for the Employer to do so, if earlier.
A portion of the Plan assets resulting from Employer Contributions (but
not more than the original amount of those Contributions and reduced
proportionately for losses, if applicable) may be returned if the Employer
Contributions are made because of a mistake of fact or are more than the amount
deductible under Code Section 404 (excluding any amount which is not deductible
because the Plan is disqualified). The amount involved must be returned to the
Employer within one year after the date the Employer Contributions are made by
mistake of fact or the date the deduction is disallowed, whichever applies.
Except as provided under this paragraph and Article VII, the assets of the Plan
shall never be used for the benefit of the Employer and are held for the
exclusive purpose of providing benefits to Participants and their Beneficiaries
and for defraying reasonable expenses of administering the Plan.
SECTION 3.01A--VOLUNTARY CONTRIBUTIONS BY PARTICIPANTS.
No Voluntary Contributions may be made on or after October 1, 1994.
The part of the Participant's Account resulting from Voluntary
Contributions is fully (100%) vested and nonforfeitable at all times.
ARTICLE III
24
<PAGE> 26
SECTION 3.01B--ROLLOVER CONTRIBUTIONS.
A Rollover Contribution may be made by or for an Eligible Employee if
the following conditions are met:
(a) The Contribution is a rollover contribution which the Code
permits to be transferred to a plan that meets the requirements
of Code Section 401(a).
(b) If the Contribution is made by the Eligible Employee, it is made
within sixty days after he receives the distribution.
(c) The Eligible Employee furnishes evidence satisfactory to the Plan
Administrator that the proposed transfer is in fact a rollover
contribution that meets conditions (a) and (b) above.
The Rollover Contribution may be made by the Eligible Employee or the
Eligible Employee may direct the trustee or named fiduciary of another plan to
transfer the funds which would otherwise be a Rollover Contribution directly to
this Plan. Such transferred funds shall be called a Rollover Contribution. The
Contribution shall be made according to procedures set up by the Plan
Administrator.
If the Eligible Employee is not an Active Participant at the time the
Rollover Contribution is made, he shall be deemed to be a Participant only for
the purposes of investment of the Rollover Contribution. He shall not share in
the allocation of Employer Contributions or Forfeitures No Employer
Contributions shall be made for him until the time he meets all the requirements
to become an Active Participant.
Rollover Contributions received form an Employee who is not otherwise
eligible to participate in the Plan may not be withdrawn in accordance with the
withdrawal provisions of Article V until such Employee becomes an Active
Participant, except that such Employee may receive a distribution of his Account
resulting from Rollover Contributions if his termination of employment occurs.
Rollover Contributions made by or for an Eligible Employee shall be
credited to his Account. The part of the Participant's Account resulting from
Rollover Contributions is fully (100%) vested and nonforfeitable at all times. A
separate accounting record shall be maintained for that part of his Rollover
Contribution which consists of voluntary contributions that were deducted from
the Participant's gross income for Federal income tax purposes.
SECTION 3.02--FORFEITURES.
The Nonvested Account of a Participant shall be forfeited as of the
earlier of the following: the date of the Participant's death, if prior to such
date he had ceased to be an Employee; or his Forfeiture Date. All or a part of a
Participant's Nonvested Account will be forfeited if, after he ceases to be an
Employee, he receives a distribution of his entire Vested Account or a
distribution of his Vested Account derived from Employer Contributions which
were not 100% vested when made according to the provisions of the VESTED
BENEFITS SECTION of Article V or the SMALL AMOUNTS SECTION of Article IX. If a
Participant's Vested Account is zero on the date he ceases to be an Employee, he
shall be deemed to have received a distribution of his entire Vested Account on
such date. The forfeiture will occur as of the date he receives the distribution
or on the date such provision became effective, if later. If he receives a
distribution of his entire Vested Account, his entire Nonvested Account will be
forfeited. If he receives a distribution of his Vested Account from Employer
Contributions which were not 100% vested when made, but less than his entire
Vested Account, the amount to be forfeited will be determined by multiplying his
Nonvested Account by a fraction. The numerator of the fraction is the
ARTICLE III
25
<PAGE> 27
amount of the distribution derived from Employer Contributions which were not
100% vested when made and the denominator of the fraction is his entire Vested
Account derived from such Employer Contributions on the date of distribution.
A Forfeiture shall also occur as described in the EXCESS AMOUNTS SECTION
of Article III.
Forfeitures may first be applied to pay administrative expenses under
the Plan which would otherwise be paid by the Employer.
Forfeitures not used to pay administrative expenses shall be applied to
reduce the earliest Employer Contributions made after the Forfeitures are
determined. Forfeitures shall be determined at least once during each taxable
year of the Employer. Upon their application, such Forfeitures shall be deemed
to be Employer Contributions.
Forfeitures of Matching Contributions which relate to excess amounts
shall be applied as provided in the EXCESS AMOUNTS SECTION of Article III.
If a Participant again becomes an Eligible Employee after receiving a
distribution which caused his Nonvested Account to be forfeited, he shall have
the right to repay to the Plan the entire amount of the distribution he received
(excluding any amount of such distribution resulting from Contributions which
were 100% vested when made). The repayment must be made before the earlier of
the date five years after the date he again becomes an Eligible Employee or the
end of the first period of five consecutive Vesting Breaks in Service which
begin after the date of the distribution.
If the Participant makes the repayment provided above, the Plan
Administrator shall restore to his Account an amount equal to his Nonvested
Account which was forfeited on the date of distribution, unadjusted for any
investment gains or losses. If the amount of the repayment is zero dollars
because the Participant was deemed to have received a distribution or the plan
did not have repayment provisions in effect on the date the distribution was
made and he again performs an Hour-of-Service as an Eligible Employee within the
repayment period, the Plan Administrator shall restore the Participant's Account
as if he had made a required repayment on the date he performed such
Hour-of-Service. Restoration of the Participant's Account shall include
restoration of all Code Section 411(d)(6) protected benefits with respect to
that restored Account, according to applicable Treasury regulations. Provided,
however, the Plan Administrator shall not restore the Nonvested Account if a
Forfeiture Date has occurred after the date of the distribution and on or before
the date of repayment and that Forfeiture Date would result in a complete
forfeiture of the amount the Plan Administrator would otherwise restore.
The Plan Administrator shall restore the Participant's Account by the
close of the Plan Year following the Plan Year in which repayment is made.
Permissible sources for restoration are Forfeitures or Employer Contributions.
The Employer shall contribute, without regard to any requirement or condition of
the EMPLOYER CONTRIBUTIONS SECTION of Article III, such additional amount needed
to make the required restoration. The repaid and restored amounts are not
included in the Participant's Annual Addition, as defined in the CONTRIBUTION
LIMITATION SECTION of Article III.
SECTION 3.03--ALLOCATION.
The following Contributions for the Plan Year shall be allocated among
all eligible persons:
Discretionary Contributions
The eligible persons are all Participants and former Participants who (i) are
Active Participants on the last day of the Plan Year or (ii) were Active
Participants at any time in the Plan Year and have died, retired or become
Totally and Permanently Disabled. The amount allocated to such a person shall be
determined below and under Article X.
ARTICLE III
26
<PAGE> 28
The following Contributions for each Plan Year shall be allocated to
each Participant for whom such Contributions were made under the EMPLOYER
CONTRIBUTIONS SECTION of Article III:
Elective Deferral Contributions
Matching Contributions
These Contributions shall be allocated when made and credited to the
Participant's Account.
The following Contributions are allocated as of the last day of the Plan
Year to each eligible person for whom they are made and credited to his Account:
Qualified Nonelective Contributions are allocated as of the last day of
each Plan Year. For purposes of this allocation, only Nonhighly Compensated
Employees shall be eligible persons. The amount allocated to each eligible
person for the Plan Year shall be equal to the minimum fixed percentage
necessary to be contributed by the Employer on behalf of each eligible Nonhighly
Compensated Employee who is a participant so that the actual deferral percentage
test or the actual contribution percentage test is satisfied. This amount is
credited to his Account.
Discretionary Contributions are allocated as of the last day of each
Plan Year. The amount allocated to each eligible person for the Plan Year shall
be equal to the Discretionary Contributions for the Plan Year, multiplied by the
ratio of (a) his Annual Compensation as of the last day of the Plan Year to (b)
the total of such compensation for all eligible persons. This amount is credited
to his Account.
In determining the amount of Employer Contributions to be allocated to a
Participant who is a Leased Employee, contributions and benefits provided by the
leasing organization which are attributable to services such Leased Employee
performs for the Employer shall be treated as provided by the Employer and there
shall be no duplication of those contributions or benefits under this Plan.
SECTION 3.04--CONTRIBUTION LIMITATION.
(a) For the purpose of determining the contribution limitation set
forth in this section, the following terms are defined:
AGGREGATE ANNUAL ADDITION means, for a Participant with respect
to any Limitation Year, the sum of his Annual Additions under all
defined contribution plans of the Employer, as defined in this
section, for such Limitation Year. The nondeductible participant
contributions which the Participant makes to a defined benefit
plan shall be treated as Annual Additions to a defined
contribution plan. The Contributions the Employer, as defined in
this section, made for the Participant for a Plan Year
beginning on or after March 31, 1984, to an individual medical
benefit account, as defined in Code Section 415(l)(2), under a
pension or annuity plan of the Employer, as defined in this
section, shall be treated as Annual Additions to a defined
contribution plan. Also, amounts derived from contributions paid
or accrued after December 31, 1985, in Fiscal 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, as
defined in this section, are treated as Annual Additions to a
defined contribution plan. The 25% of Compensation limit under
Maximum Permissible Amount does not apply to Annual Additions
resulting from contributions made to an individual medical
account, as defined in Code Section 415(l)(2), or to Annual
Additions resulting from contributions for medical benefits,
within the meaning of Code Section 419A, after separation from
service.
ARTICLE III
27
<PAGE> 29
ANNUAL ADDITION means the amount added to a Participant's account
for any Limitation Year which may not exceed the Maximum
Permissible Amount. The Annual Addition under any plan for a
Participant with respect to any Limitation Year, shall be equal
to the sum of (1) and (2) below:
(1) Employer contributions and forfeitures credited to his
account for the Limitation Year.
(2) Participant contributions made by him for the Limitation
Year.
Before the first Limitation Year beginning after December 31,
1986, the amount under (2) above is the lesser of (i) 1/2 of his
nondeductible participant contributions made for the Limitation
Year, or (ii) the amount, if any, of his nondeductible
participant contributions made for the Limitation Year which is
in excess of six percent of his Compensation, as defined in this
section, for such Limitation Year.
COMPENSATION means all wages, salaries, fees for professional
services and other amounts received (whether or not paid in cash)
for personal services actually rendered in the course of
employment with the Employer, as defined in this section, who is
maintaining the plan, but only to the extent includable in gross
income. Compensation includes, but is not limited to, commissions
paid salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums, tips,
bonuses, fringe benefits and reimbursements or other expense
allowances under a nonaccountable plan (as described in section
1.62-2(c) of the regulations).
Compensation does not include:
(1) Contributions made by the Employer, as defined in this
section, to a plan of deferred compensation to the extent
contributions are not included in the gross income of the
Employee for the taxable year in which contributed, or on
behalf of the Employee to a simplified employee pension
plan to the extent such contributions are deductible by
the Employee, and any distributions from a plan of
deferred compensation whether or not includable in the
gross income of the Employee when distributed.
(2) Amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held
by an Employee 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.
(4) Other amounts which receive special tax benefits, or
contributions made by the Employer, as defined in this
section, (whether or not under a salary reduction
agreement) towards the purchase of an annuity contract
described in Code Section 403(b) (whether or not the
contributions are actually excludable from the gross
income of the Employee).
For any self-employed individual Compensation will mean earned
income.
For purposes of applying the limitations of this section,
Compensation for a Limitation Year is the Compensation actually
paid or made available during such Limitation Year.
DEFINED BENEFIT PLAN FRACTION means, with respect to a Limitation
Year for a Participant who is or has been a participant in a
defined benefit plan ever maintained by the Employer, as defined
in this section, the quotient, expressed as a decimal, of
ARTICLE III
28
<PAGE> 30
(1) the Participant's Projected Annual Benefit under all such
plans as of the close of such Limitation Year, divided by
(2) on and after the TEFRA Compliance Date, the lesser of (i)
or (ii) below:
(i) 1.25 multiplied by the maximum dollar limitation
which applies to defined benefit plans determined
for the Limitation Year under Code Sections 415(b)
or (d) or
(ii) 1.4 multiplied by the Participant's highest
average compensation as defined in the defined
benefit plan(s),
including any adjustments under Code Section 415(b).
Before the TEFRA Compliance Date, this denominator is the
Participant's Projected Annual Benefit as of the close of
the Limitation Year if the plan(s) provided the maximum
benefit allowable.
The Defined Benefit Plan Fraction shall be modified as follows:
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, as
defined in this section, 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 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.
DEFINED CONTRIBUTION PLAN FRACTION means, for a Participant with
respect to a Limitation Year, the quotient, expressed as a
decimal, of
(1) the Participant's Aggregate Annual Additions for such
Limitation Year and all prior Limitation Years, under all
defined contribution plans (including the Aggregate Annual
Additions attributable to nondeductible accounts under
defined benefit plans and attributable to all welfare
benefit funds, as defined in Code Section 419(e) and
attributable to individual medical accounts, as defined in
Code Section 415(l)(2)) ever maintained by the Employer,
as defined in this section, divided by
(2) on and after the TEFRA Compliance Date, the sum of the
amount determined for the Limitation Year under (i) or
(ii) below, whichever is less, and the amounts determined
in the same manner for all prior Limitation Years during
which he has been an Employee or an employee of a
predecessor employer:
(i) 1.25 multiplied by the maximum permissible dollar
amount for each such Limitation Year, or
(ii) 1.4 multiplied by the maximum permissible
percentage of the Participant's Compensation, as
defined in this section, for each such Limitation
Year.
ARTICLE III
29
<PAGE> 31
Before the TEFRA Compliance Date, this denominator is the
sum of the maximum allowable amount of Annual Addition to
his account(s) under all the plan(s) of the Employer, as
defined in this section, for each such Limitation Year.
The Defined Contribution Plan Fraction shall be modified as
follows:
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 contribution plans maintained by the Employer, as
defined in this section, which were in existence on May 6, 1986,
the numerator of this fraction shall be adjusted if the sum of
the Defined Contribution Plan Fraction and Defined Benefit Plan
Fraction would otherwise exceed 1.0 under the terms of this Plan.
Under the adjustment, the dollar amount determined below shall be
permanently subtracted from the numerator of this fraction. The
dollar amount is equal to the excess of the sum of the two
fractions, before adjustment, over 1.0 multiplied by the
denominator of his Defined Contribution Plan Fraction. The
adjustment is calculated using his Defined Contribution Plan
Fraction and Defined Benefit Plan Fraction 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 limitations 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.
For a plan that was in existence on July 1, 1982, for purposes of
determining the Defined Contribution Plan Fraction for any
Limitation Year ending after December 31, 1982, the Plan
Administrator may elect, in accordance with the provisions of
Code Section 415, that the denominator for each Participant for
all Limitation Years ending before January 1, 1983, will be equal
to
(1) the Defined Contribution Plan Fraction denominator which
would apply for the last Limitation Year ending in 1982 if
an election under this paragraph were not made, multiplied
by.
(2) a fraction, equal to (i) over (ii) below:
(i) the lesser of (A) $51,875, or (B) 1.4, multiplied
by 25% of the Participant's Compensation, as
defined in this section, for the Limitation Year
ending in 1981;
(ii) the lesser of (A) $41,500, or (B) 25% of the
Participant's Compensation, as defined in this
section, for the Limitation Year ending in 1981.
The election described above is applicable only if the plan
administrators under all defined contribution plans of the
Employer, as defined in this section, also elect to use the
modified fraction.
EMPLOYER means any employer that adopts this Plan and all
Controlled Group members and any other entity required to be
aggregated with the employer pursuant to regulations under Code
Section 414(o).
LIMITATION YEAR means the 12-consecutive month period within
which it is determined whether or not the limitations of Code
Section 415 are exceeded. Limitation Year means each
12-consecutive month period ending on the last day of each Plan
Year, including corresponding 12-consecutive month periods before
July 1, 1984. If the Limitation Year is other than the calendar
year, execution of this Plan (or any amendment
ARTICLE III
30
<PAGE> 32
to this Plan changing the Limitation Year) constitutes the
Employer's adoption of a written resolution electing the
Limitation Year. If the Limitation Year is changed, the new
Limitation Year shall begin within the current Limitation Year,
creating a short Limitation Year.
MAXIMUM PERMISSIBLE AMOUNT means, for a Participant with respect
to any Limitation Year, the lesser of (1) or (2) below:
(1) The greater of $30,000 or one-fourth of the maximum dollar
limitation which applies to defined benefit plans set
forth in Code Section 415(b)(1)(A) as in effect for the
Limitation Year. (Before the TEFRA Compliance Date,
$25,000 multiplied by the cost of living adjustment factor
permitted by Federal regulations.)
(2) 25% of his Compensation, as defined in this section, for
such Limitation Year.
The compensation limitation referred to in (2) shall not apply to
any contribution for medical benefits (within the meaning of Code
Section 401(h) or Code Section 419A(f)(2)) which is otherwise
treated as an annual addition under Code Section 415(l)(1) or
Code Section 419A(d)(2).
If there is a short Limitation Year because of a change in
Limitation Year, the Maximum Permissible Amount will not exceed
the maximum dollar limitation which would otherwise apply
multiplied by the following fraction:
Number of months in the short Limitation Year
---------------------------------------------
12
PROJECTED ANNUAL BENEFIT means a Participant's expected annual
benefit under all defined benefit plan(s) ever maintained by the
Employer, as defined in this section. The Projected Annual
Benefit shall be determined assuming that the Participant will
continue employment until the later of current age or normal
retirement age under such plan(s), and that the Participant's
compensation for the current Limitation Year and all other
relevant factors used to determine benefits under such plan(s)
will remain constant for all future Limitation Years. Such
expected annual benefit shall be adjusted to the actuarial
equivalent of a straight life annuity if expressed in a form
other than a straight life or qualified joint and survivor
annuity.
(b) The Annual Addition under this Plan for a Participant during a
Limitation Year shall not be more than the Maximum Permissible
Amount.
(c) Contributions which would otherwise be credited to the
Participant's Account shall be limited or reallocated to the
extent necessary to meet the restrictions of subparagraph (b)
above for any Limitation Year in the following order.
Discretionary Contributions shall be reallocated in the same
manner as described in the ALLOCATION SECTION of Article III to
the remaining Participants to whom the limitations do not apply
for the Limitation Year. The Discretionary Contributions shall
be limited if there are no such remaining Participants.
Qualified Nonelective Contributions shall be reallocated in the
same manner as described in the ALLOCATION SECTION of Article
III to the remaining Participants to whom the limitations do not
apply for the Limitation Year. The Qualified Nonelective
Contributions shall be limited if there are no such remaining
Participants. Elective Deferral Contributions that are not the
basis for Matching Contributions shall be limited. Matching
Contributions shall be limited to the extent necessary to limit
the Participant's Annual Addition under this Plan to his maximum
amount. If Matching Contributions are
ARTICLE III 31
<PAGE> 33
limited because of this limit, Elective Deferral Contributions
that are the basis for Matching Contributions shall be reduced
in proportion.
If, due to (i) an error in estimating a Participant's
Compensation as defined in this section, (ii) because the amount
of the Forfeitures to be used to offset Employer Contributions is
more than the amount of the Employer Contributions due for the
remaining Participants, (iii) as a result of 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 any individual under the limits of Code Section 415, or (iv)
other limited facts and circumstances, a Participant's Annual
Addition is greater than the amount permitted in (b) above, such
excess amount shall be applied as follows. Elective Deferral
Contributions which are not the basis for Matching Contributions
will be returned to the Participant. If an excess still exists,
Elective Deferral Contributions that are the basis for Matching
Contributions will be returned to the Participant. Matching
Contributions based on Elective Deferral Contributions which are
returned shall be forfeited. If after the return of Elective
Deferral Contributions, an excess amount still exists, and the
Participant is an Active Participant as of the end of the
Limitation Year, the excess amount shall be used to offset
Employer Contributions for him in the next Limitation Year. If
after the return of Elective Deferral Contributions, an excess
amount still exists, and the Participant is not an Active
Participant as of the end of the Limitation Year, the excess
amount will be held in a suspense account which will be used to
offset Employer Contributions for all Participants in the next
Limitation Year. No Employer Contributions that would
be included in the next Limitation Year's Annual Addition may be
made before the total suspense account has been used.
(d) A Participant's Aggregate Annual Addition for a Limitation Year
shall not exceed the Maximum Permissible Amount.
If, for the Limitation Year, the Participant has an Annual
Addition under more than one defined contribution plan or a
welfare benefit fund, as defined in Code Section 419(e), or an
individual medical account, as defined in Code Section 415(l)(2),
maintained by the Employer, as defined in this section, and such
plans and welfare benefit funds and individual medical accounts
do not otherwise limit the Aggregate Annual Addition to the
Maximum Permissible Amount, any reduction necessary shall be made
first to the profit sharing plans, then to all other such plans
and welfare benefit funds and individual medical accounts and, if
necessary, by reducing first those that were most recently
allocated. Welfare benefit funds and individual medical accounts
shall be deemed to be allocated first. However, elective deferral
contributions shall be the last contributions reduced before the
welfare benefit fund or individual medical account is reduced.
If some of the Employer's defined contribution plans were not in
existence on July 1, 1982, and some were in existence on that
date, the Maximum Permissible Amount which is based on a dollar
amount may differ for a Limitation Year. The Aggregate Annual
Addition for the Limitation Year in which the dollar limit
differs shall not exceed the lesser of (1) 25% of Compensation as
defined in this section, (2) $45,475, or (3) the greater of
$30,000 or the sum of the Annual Additions for such Limitation
Year under all the plan(s) to which the $45,475 amount applies.
(e) If a Participant is or has been a participant in both defined
benefit and defined contribution plans (including a welfare
benefit fund or individual medical account) ever maintained by
the Employer, as defined in this section, the sum of the Defined
Benefit Plan Fraction and the Defined Contribution Plan Fraction
for any Limitation Year shall not exceed 1.0 (1.4 before the
TEFRA Compliance Date).
ARTICLE III 32
<PAGE> 34
After all other limitations set out in the plans and funds have
been applied, the following limitations shall apply so that the
sum of the Participant's Defined Benefit Plan Fraction and
Defined Contribution Plan Fraction shall not exceed 1.0 (1.4
before the TEFRA Compliance Date). The Projected Annual Benefit
shall be limited first. If the Participant's annual benefit(s)
equal his Projected Annual Benefit, as limited, then Annual
Additions to the defined contribution plan(s) shall be limited to
the extent needed to reduce the sum to 1.0 (1.4). First, the
voluntary contributions the Participant may make for the
Limitation Year shall be limited. Next, in the case of a profit
sharing plan, any forfeitures allocated to the Participant shall
be reallocated to remaining participants to the extent necessary
to reduce the decimal to 1.0 (1.4). Last, to the extent
necessary, employer contributions for the Limitation Year shall
be reallocated or limited, and any required and optional employee
contributions to which such employer contributions were geared
shall be reduced in proportion.
If, for the Limitation Year, the Participant has an Annual
Addition under more than one defined contribution plan or welfare
benefit fund or individual medical account maintained by the
Employer, as defined in this section, any reduction above shall
be made first to the profit sharing plans, then to all other such
plans and welfare benefit plans and individual medical accounts
and, if necessary, by reducing first those that were most
recently allocated. However, elective deferral contributions
shall be the last contributions reduced before the welfare
benefit fund or individual medical account is reduced. The
annual addition to the welfare benefit fund and individual
medical account shall be limited last.
SECTION 3.05--EXCESS AMOUNTS.
(a) For the purposes of this section, the following terms are
defined:
ACTUAL DEFERRAL PERCENTAGE means the ratio (expressed as a
percentage) of Elective Deferral Contributions under this Plan on
behalf of the Eligible Participant for the Plan Year to the
Eligible Participant's Compensation for the Plan Year. In
modification of the foregoing, Compensation shall be limited to
the Compensation received while an Active Participant. The
Elective Deferral Contributions used to determine the Actual
Deferral Percentage shall include Excess Elective Deferrals
(other than Excess Elective Deferrals of Nonhighly Compensated
Employees that arise solely from Elective Deferral Contributions
made under this Plan or any other plans of the Employer or a
Controlled Group member), but shall exclude Elective Deferral
Contributions that are used in computing the Contribution
Percentage (provided the Average Actual Deferral Percentage test
is satisfied both with and without exclusion of these Elective
Deferral Contributions). Under such rules as the Secretary of the
Treasury shall prescribe in Code Section 401(k)(3)(D), the
Employer may elect to include Qualified Nonelective Contributions
and Qualified Matching Contributions under this Plan in computing
the Actual Deferral Percentage. For an Eligible Participant for
whom such Contributions on his behalf for the Plan Year are zero,
the percentage is zero.
AGGREGATE LIMIT means the greater of (1) or (2) below:
(1) The sum of
(i) 125 percent of the greater of the Average Actual
Deferral Percentage of the Nonhighly Compensated
Employees for the Plan Year or the Average
Contribution Percentage of Nonhighly Compensated
Employees under the Plan subject to Code Section
401(m) for the Plan Year beginning with or within
the Plan Year of the cash or deferred arrangement
and
ARTICLE III
33
<PAGE> 35
(ii) the lesser of 200% or two plus the lesser of such
Average Actual Deferral Percentage or Average
Contribution Percentage.
(2) The sum of
(i) 125 percent of the lesser of the Average Actual
Deferral Percentage of the Nonhighly Compensated
Employees for the Plan Year or the Average
Contribution Percentage of Nonhighly Compensated
Employees under the Plan subject to Code Section
401(m) for the Plan Year beginning with or within
the Plan Year of the cash or deferred arrangement
and
(ii) the lesser of 200% or two plus the greater of such
Average Actual Deferral Percentage or Average
Contribution Percentage.
AVERAGE ACTUAL DEFERRAL PERCENTAGE means the average (expressed
as a percentage) of the Actual Deferral Percentages of the
Eligible Participants in a group.
AVERAGE CONTRIBUTION PERCENTAGE means the average (expressed as a
percentage) of the Contribution Percentages of the Eligible
Participants in a group.
CONTRIBUTION PERCENTAGE means the ratio (expressed as a
percentage) of the Eligible Participant's Contribution Percentage
Amounts to the Eligible Participant's Compensation for the Plan
Year. In modification of the foregoing, Compensation shall be
limited to the Compensation received while an Active Participant.
For an Eligible Participant for whom such Contribution Percentage
Amounts for the Plan Year are zero, the percentage is zero.
CONTRIBUTION PERCENTAGE AMOUNTS means the sum of the Participant
Contributions and Matching Contributions (that are not Qualified
Matching Contributions) under this Plan on behalf of the Eligible
Participant for the Plan Year. Such Contribution Percentage
Amounts shall not include Matching Contributions that are
forfeited either to correct Excess Aggregate Contributions or
because the Contributions to which they relate are Excess
Elective Deferrals, Excess Contributions or Excess Aggregate
Contributions. Under such rules as the Secretary of the Treasury
shall prescribe in Code Section 401(k)(3)(D), the Employer may
elect to include Qualified Nonelective Contributions and
Qualified Matching Contributions under this Plan which were not
used in computing the Actual Deferral Percentage in computing the
Contribution Percentage. The Employer may also elect to use
Elective Deferral Contributions in computing the Contribution
Percentage so long as the Average Actual Deferral Percentage test
is met before the Elective Deferral Contributions are used in the
Average Contribution Percentage test and continues to be met
following the exclusion of those Elective Deferral Contributions
that are used to meet the Average Contribution Percentage test.
ELECTIVE DEFERRAL CONTRIBUTIONS means employer contributions made
on behalf of a participant pursuant to an election to defer under
any qualified cash or deferred arrangement as described in Code
Section 401(k), any simplified employee pension cash or deferred
arrangement as described in Code Section 402(h)(1)(B), any
eligible deferred compensation plan under Code Section 457, any
plan as described under Code Section 501(c)(18), and any employer
contributions made on behalf of a participant for the purchase of
an annuity contract under Code Section 403(b) pursuant to a
salary reduction agreement. Elective Deferral Contributions shall
not include any deferrals properly distributed as excess Annual
Additions.
ELIGIBLE PARTICIPANT means, for purposes of the Actual Deferral
Percentage, any Employee who is eligible to make an Elective
Deferral Contribution, and shall include the following: any
Employee who would be a
ARTICLE III
34
<PAGE> 36
plan participant if he chose to make required contributions; any
Employee who can make Elective Deferral Contributions but who
has changed the amount of his Elective Deferral Contribution to
0%, or whose eligibility to make an Elective Deferral
Contribution is suspended because of a loan, distribution or
hardship withdrawal; and, any Employee who is not able to make
an Elective Deferral Contribution because of Code Section
415(c)(1) - Annual Additions limits. The Actual Deferral
Percentage for any such included Employee is zero.
Eligible Participant means, for purposes of the Average
Contribution Percentage, any Employee who is eligible to make a
Participant Contribution or to receive a Matching Contribution,
and shall include the following: any Employee who would be a
plan participant if he chose to make required contributions; any
Employee who can make a Participant Contribution or receive a
matching contribution but who has made an election not to
participate in the Plan; and any Employee who is not able to
make a Participant Contribution or receive a matching
contribution because of Code Section 415(c)(1) or 415(e) limits.
The Average Contribution Percentage for any such included
Employee is zero.
EXCESS AGGREGATE CONTRIBUTIONS means, with respect to any Plan
Year, the excess of:
(1) The aggregate Contributions taken into account in
computing the numerator of the Contribution Percentage
actually made on behalf of Highly Compensated Employees
for such Plan Year, over
(2) The maximum amount of such Contributions permitted by the
Average Contribution Percentage test (determined by
reducing Contributions made on behalf of Highly
Compensated Employees in order of their Contribution
Percentages beginning with the highest of such
percentages).
Such determination shall be made after first determining Excess
Elective Deferrals and then determining Excess Contributions.
EXCESS CONTRIBUTIONS means, with respect to any Plan Year, the
excess of:
(1) The aggregate amount of Contributions actually taken into
account in computing the Actual Deferral Percentage of
Highly Compensated Employees for such Plan Year, over
(2) The maximum amount of such Contributions permitted by the
Actual Deferral Percentage test (determined by reducing
Contributions made on behalf of Highly Compensated
Employees in order of the Actual Deferral Percentages,
beginning with the highest of such percentages).
A Participant's Excess Contributions for a Plan Year will be
reduced by the amount of Excess Elective Deferrals, if any,
previously distributed to the Participant for the taxable year
ending in that Plan Year.
EXCESS ELECTIVE DEFERRALS means those Elective Deferral
Contributions that are includible in a Participant's gross income
under Code Section 402(g) to the extent such Participant's
Elective Deferral Contributions for a taxable year exceed the
dollar limitation under such Code section. Excess Elective
Deferrals shall be treated as Annual Additions, as defined in the
CONTRIBUTION LIMITATION SECTION of Article III, under the Plan,
unless such amounts are distributed no later than the first April
15 following the close of the Participant's taxable year.
ARTICLE III
35
<PAGE> 37
FAMILY MEMBER means an Employee, or former employee; the spouse
of the Employee or former employee, and the lineal ascendants or
descendants and the spouses of such lineal ascendants or
descendants of any such Employee or former employee. In
determining if an individual is a family member as to an Employee
or former employee, legal adoptions are taken into account.
MATCHING CONTRIBUTIONS means employer contributions made to this
or any other defined contribution plan, or to a contract
described in Code Section 403(b), on behalf of a participant on
account of a Participant Contribution made by such participant,
or on account of a participant's Elective Deferral Contributions,
under a plan maintained by the employer.
PARTICIPANT CONTRIBUTIONS means contributions made to any plan by
or on behalf of a participant that are included in the
participant's gross income in the year in which made and that are
maintained under a separate account to which earnings and losses
are allocated.
QUALIFIED MATCHING CONTRIBUTIONS means Matching Contributions
which are subject to the distribution and nonforfeitability
requirements under Code Section 401(k) when made.
QUALIFIED NONELECTIVE CONTRIBUTIONS means any employer
contributions (other than Matching Contributions) which an
employee may not elect to have paid to him in cash instead of
being contributed to the plan and which are subject to the
distribution and nonforfeitability requirements under Code
Section 401(k) when made.
(b) A Participant may assign to this Plan any Excess Elective
Deferrals made during a taxable year by notifying the Plan
Administrator in writing on or before the first following March
1 of the amount of the Excess Elective Deferrals to be assigned
to the Plan. A Participant is deemed to notify the Plan
Administrator of any Excess Elective Deferrals that arise by
taking into account only those Elective Deferral Contributions
made to this Plan and any other plans of the Employer or a
Controlled Group member and reducing such Excess Elective
Deferrals by the amount of Excess Contributions, if any,
previously distributed for the Plan Year beginning in that
taxable year. The Participant's claim for Excess Elective
Deferrals shall be accompanied by the Participant's written
statement that if such amounts are not distributed, such Excess
Elective Deferrals, when added to amounts deferred under other
plans or arrangements described in Code Sections 401(k), 408(k)
or 403(b), will exceed the limit imposed on the Participant by
Code Section 402(g) for the year in which the deferral occurred.
The Excess Elective Deferrals assigned to this Plan can not
exceed the Elective Deferral Contributions allocated under this
Plan for such taxable year.
Notwithstanding any other provisions of the Plan, Elective
Deferral Contributions in an amount equal to the Excess Elective
Deferrals assigned to this Plan, plus any income and minus any
loss allocable thereto, shall be distributed no later than April
15 to any Participant to whose Account Excess Elective Deferrals
were assigned for the preceding year and who claims Excess
Elective Deferrals for such taxable year.
The income or loss allocable to such Excess Elective Deferrals
shall be equal to the income or loss allocable to the
Participant's Elective Deferral Contributions for the taxable
year in which the excess occurred multiplied by a fraction. The
numerator of the the Excess Elective Deferrals. The
denominator of the fraction is the closing balance without regard
to any income or loss occurring during such taxable year (as of
the end of such taxable year) of the Participant's Account
resulting from Elective Deferral Contributions.
ARTICLE III
36
<PAGE> 38
Any Matching Contributions which were based on the Elective
Deferral Contributions which are distributed as Excess Elective
Deferrals, plus any income and minus any loss allocable thereto,
shall be forfeited. These Forfeitures shall be used to offset
the earliest Employer Contribution due after the Forfeiture
arises.
(c) As of the end of each Plan Year after Excess Elective Deferrals
have been determined, one of the following tests must be met:
(1) The Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for the
Plan Year is not more than the Average Actual Deferral
Percentage for Eligible Participants who are Nonhighly
Compensated Employees for the Plan Year multiplied by
1.25.
(2) The Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for the
Plan Year is not more than the Average Actual Deferral
Percentage for Eligible Participants who are Nonhighly
Compensated Employees for the Plan Year multiplied by 2
and the difference between the Average Actual Deferral
Percentages is not more than 2.
The Actual Deferral Percentage for any Eligible Participant who
is a Highly Compensated Employee for the Plan Year and who is
eligible to have Elective Deferral Contributions (and Qualified
Nonelective Contributions or Qualified Matching Contributions, or
both, if used in computing the Actual Deferral Percentage)
allocated to his account under two or more plans or arrangements
described in Code Section 401(k) that are maintained by the
Employer or a Controlled Group member shall be determined as if
all such Elective Deferral Contributions (and, if applicable,
such Qualified Nonelective Contributions or Qualified Matching
Contributions, or both) were made under a single arrangement. If
a Highly Compensated Employee participates in two or more cash or
deferred arrangements that have different Plan Years, all cash or
deferred arrangements ending with or within the same calendar
year shall be treated as a single arrangement. Notwithstanding
the foregoing, certain plans shall be treated as separate if
mandatorily disaggregated under the regulations under Code
Section 401(k) or permissibly disaggregated as provided.
In the event that this Plan satisfies the requirements of Code
Sections 401(k), 401(a)(4), or 410(b) only if aggregated with one
or more other plans, or if one or more other plans satisfy the
requirements of such Code sections only if aggregated with this
Plan, then this section shall be applied by determining the
Actual Deferral Percentage of employees as if all such plans were
a single plan. Plans may be aggregated in order to satisfy Code
Section 401(k) only if they have the same Plan Year.
For purposes of determining the Actual Deferral Percentage of an
Eligible Participant who is a five-percent owner or one of the
ten most highly-paid Highly Compensated Employees, the Elective
Deferral Contributions (and Qualified Nonelective Contributions
or Qualified Matching Contributions, or both, if used in
computing the Actual Deferral Percentage) and Compensation of
such Eligible Participant include the Elective Deferral
Contributions (and, if applicable, Qualified Nonelective
Contributions or Qualified Matching Contributions, or both) and
Compensation for the Plan Year of Family Members. Family Members,
with respect to such Highly Compensated Employees, shall be
disregarded as separate employees in determining the Actual
Deferral Percentage both for Participants who are Nonhighly
Compensated Employees and for Participants who are Highly
Compensated Employees.
For purposes of determining the Actual Deferral Percentage,
Elective Deferral Contributions, Qualified Nonelective
Contributions and Qualified Matching Contributions must be made
before the last day of the 12-month period immediately following
the Plan Year to which contributions relate.
ARTICLE III
37
<PAGE> 39
The Employer shall maintain records sufficient to demonstrate
satisfaction of the Average Actual Deferral Percentage test and
the amount of Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, used in such test.
The determination and treatment of the Contributions used in
computing the Actual Deferral Percentage shall satisfy such other
requirements as may be prescribed by the Secretary of the
Treasury.
If the Plan Administrator should determine during the Plan Year
that neither of the above tests is being met, the Plan
Administrator may adjust the amount of future Elective Deferral
Contributions of the Highly Compensated Employees.
Notwithstanding any other provisions of this Plan, Excess
Contributions, plus any income and minus any loss allocable
thereto, shall be distributed no later than the last day of each
Plan Year to Participants to whose Accounts such Excess
Contributions were allocated for the preceding Plan Year. If such
excess amounts are distributed more than 2 1/2 months after the
last day of the Plan Year in which such excess amounts arose, a
ten (10) percent excise tax will be imposed on the employer
maintaining the plan with respect to such amounts. Such
distributions shall be made beginning with the Highly Compensated
Employee(s) who has the greatest Actual Deferral Percentage,
reducing his Actual Deferral Percentage to the next highest
Actual Deferral Percentage level. Then, if necessary, reducing
the Actual Deferral Percentage of the Highly Compensated
Employees at the next highest level, and continuing in this
manner until the average Actual Deferral Percentage of the Highly
Compensated Group satisfies the Actual Deferral Percentage test.
Excess Contributions of Participants who are subject to the
family member aggregation rules shall be allocated among the
Family Members in proportion to the Elective Deferral
Contributions (and amounts treated as Elective Deferral
Contributions) of each Family Member that is combined to
determine the combined Actual Deferral Percentage.
Excess Contributions shall be treated as Annual Additions, as
defined in the CONTRIBUTION LIMITATION SECTION of Article III,
under the Plan.
The Excess Contributions shall be adjusted for income or loss.
The income or loss allocable to such Excess Contributions shall
be equal to the income or loss allocable to the Participant's
Elective Deferral Contributions (and, if applicable, Qualified
Nonelective Contributions or Qualified Matching Contributions, or
both) for the Plan Year in which the excess occurred multiplied
by a fraction. The numerator of the fraction is the Excess
Contributions. The denominator of the fraction is the closing
balance without regard to any income or loss occurring during
such Plan Year (as of the end of such Plan Year) of the
Participant's Account resulting from Elective Deferral
Contributions (and Qualified Nonelective Contributions or
Qualified Matching Contributions, or both, if used in computing
the Actual Deferral Percentage).
Excess Contributions shall be distributed from the Participant's
Account resulting first from Elective Deferral Contributions not
the basis for Matching Contributions, then if necessary, from
Elective Deferral Contributions which are the basis for Matching
Contributions. If such Excess Contributions exceed the balance
in the Participant's Account resulting from Elective Deferral
Contributions, the balance shall be distributed from the
Participant's Account resulting from Qualified Matching
Contributions (if applicable) and Qualified Nonelective
Contributions, respectively.
Any Matching Contributions which were based on the Elective
Deferral Contributions which are distributed as Excess
Contributions, plus any income and minus any loss allocable
thereto, shall be forfeited. These
ARTICLE III
38
<PAGE> 40
Forfeitures shall be used to offset the earliest Employer
Contribution due after the Forfeiture arises.
(d) As of the end of each Plan Year, one of the following tests must
be met:
(1) The Average Contribution Percentage for Eligible
Participants who are Highly Compensated Employees for the
Plan Year is not more than the Average Contribution
Percentage for Eligible Participants who are Nonhighly
Compensated Employees for the Plan Year multiplied by
1.25.
(2) The Average Contribution Percentage for Eligible
Participants who are Highly Compensated Employees for the
Plan Year is not more than the Average Contribution
Percentage for Eligible Participants who are Nonhighly
Compensated Employees for the Plan Year multiplied by 2
and the difference between the Average Contribution
Percentages is not more than 2.
If one or more Highly Compensated Employees participate in both a
cash or deferred arrangement and a plan subject to the Average
Contribution Percentage test maintained by the Employer or a
Controlled Group member and the sum of the Average Actual
Deferral Percentage and Average Contribution Percentage of those
Highly Compensated Employees subject to either or both tests
exceeds the Aggregate Limit, then the Contribution Percentage of
those Highly Compensated Employees who also participate in a cash
or deferred arrangement will be reduced (beginning with such
Highly Compensated Employees whose Contribution Percentage is the
highest) so that the limit is not exceeded. The amount by which
each Highly Compensated Employee's Contribution Percentage is
reduced shall be treated as an Excess Aggregate Contribution. The
Average Actual Deferral Percentage and Average Contribution
Percentage of the Highly Compensated Employees are determined
after any corrections required to meet the Average Actual
Deferral Percentage and Average Contribution Percentage tests.
Multiple use does not occur if either the Average Actual Deferral
Percentage or Average Contribution Percentage of the Highly
Compensated Employees does not exceed 1.25 multiplied by the
Average Actual Deferral Percentage and Average Contribution
Percentage of the Nonhighly Compensated Employees.
The Contribution Percentage for any Eligible Participant who is
a Highly Compensated Employee for the Plan Year and who is
eligible to have Contribution Percentage Amounts allocated to
his account under two or more plans described in Code Section
401(a) or arrangements described in Code Section 401(k) that are
maintained by the Employer or a Controlled Group member shall be
determined as if the total of such Contribution Percentage
Amounts was made under each plan. If a Highly Compensated
Employee participates in two or more cash or deferred
arrangements that have different Plan Years, all cash or
deferred arrangements ending with or within the same calendar
year shall be treated as a single arrangement. Notwithstanding
the foregoing, certain plans shall be treated as separate if
mandatorily disaggregated under the regulations under Code
Section 401(m) or permissibly disaggregated as provided.
In the event that this Plan satisfies the requirements of Code
Sections 401(m), 401(a)(4), or 410(b) only if aggregated with one
or more other plans, or if one or more other plans satisfy the
requirements of Code sections only if aggregated with this Plan,
then this section shall be applied by determining the
Contribution Percentages of Eligible Participants as if all such
plans were a single plan. Plans may be aggregated in order to
satisfy Code Section 401(m) only if they have the same Plan Year.
For purposes of determining the Contribution Percentage of an
Eligible Participant who is a five-percent owner or one of the
ten most highly-paid Highly Compensated Employees, the
Contribution Percentage Amounts and Compensation of such
Participant shall include Contribution Percentage Amounts and
Compensation for
ARTICLE III
39
<PAGE> 41
the Plan Year of Family Members. Family Members, with respect to
Highly Compensated Employees, shall be disregarded as separate
employees in determining the Contribution Percentage both for
employees who are Nonhighly Compensated Employees and for
employees who are Highly Compensated Employees.
For purposes of determining the Contribution Percentage,
Participant Contributions are considered to have been made in the
Plan Year in which contributed to the Plan. Matching
Contributions and Qualified Nonelective Contributions will be
considered made for a Plan Year if made no later than the end of
the 12-month period beginning on the day after the close of the
Plan Year.
The Employer shall maintain records sufficient to demonstrate
satisfaction of the Average Contribution Percentage test and the
amount of Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, used in such test.
The determination and treatment of the Contribution Percentage of
any Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
Notwithstanding any other provisions of this Plan, Excess
Aggregate Contributions, plus any income and minus any loss
allocable thereto, shall be forfeited, if not vested, or
distributed, if vested, no later than the last day of each Plan
Year to Participants to whose Accounts such Excess Aggregate
Contributions were allocated for the preceding Plan Year. If such
Excess Aggregate Contributions are distributed more than 2 1/2
months after the last day of the Plan Year in which such excess
amounts arose, a ten (10) percent excise tax will be imposed on
the employer maintaining the plan with respect to those amounts.
Excess Aggregate Contributions will be distributed beginning with
the Highly Compensated Employee(s) who has the greatest
Contribution Percentage, reducing his contribution percentage to
the next highest level. Then, if necessary, reducing the
Contribution Percentage of the Highly Compensated Employee at the
next highest level, and continuing in this manner until the
Actual Contribution Percentage of the Highly Compensated Group
satisfies the Actual Contribution Percentage Test. Excess
Aggregate Contributions of Participants who are subject to the
family member aggregation rules shall be allocated among the
Family Members in proportion to the Employee and Matching
Contributions (or amounts treated as Matching Contributions) of
each Family Member that is combined to determine the combined
Contribution Percentage. Excess Aggregate Contributions shall be
treated as Annual Additions, as defined in the CONTRIBUTION
LIMITATION SECTION of Article III, under the Plan.
The Excess Aggregate Contributions shall be adjusted for income
or loss. The income or loss allocable to such Excess Aggregate
Contributions shall be equal to the income or loss allocable to
the Participant's Contribution Percentage Amounts for the Plan
Year in which the excess occurred multiplied by a fraction. The
numerator of the fraction is the Excess Aggregate Contributions.
The denominator of the fraction is the closing balance without
regard to any income or loss occurring during such Plan Year (as
of the end of such Plan Year) of the Participant's Account
resulting from Contribution Percentage Amounts.
Excess Aggregate Contributions shall be distributed from the
Participant's Account resulting from Participant Contributions
that are not required as a condition of employment or
participation or for obtaining additional benefits from Employer
Contributions. If such Excess Aggregate Contributions exceed the
balance in the Participant's Account resulting from such
Participant Contributions, the balance shall be forfeited, if not
vested, or distributed, if vested, on a pro-rata basis from the
Participant's Account resulting from Contribution Percentage
Amounts. These Forfeitures shall be used to offset the earliest
Employer Contribution due after the Forfeiture arises.
ARTICLE III
40
<PAGE> 42
ARTICLE IV
INVESTMENT OF CONTRIBUTIONS
SECTION 4.01--INVESTMENT OF CONTRIBUTIONS.
All Contributions are forwarded by the Employer to the Trustee to be
deposited in the Trust Fund.
Investment of Contributions is governed by the provisions of the Trust,
the Group Contract and any other funding arrangement in which the Trust Fund is
or may be invested. To the extent permitted by the Trust, Group Contract or
other funding arrangement, the parties named below shall direct the
Contributions to any of the accounts available under the Trust or Group Contract
and may request the transfer of assets resulting from those Contributions
between such accounts. A Participant may not direct the Trustee to invest the
Participant's Account in collectibles. Collectibles means any work of art, rug
or antique, metal or gem, stamp or coin, alcoholic beverage or other tangible
personal property specified by the Secretary of Treasury. To the extent that a
Participant does not direct the investment of his Account, such Account shall be
invested ratably in the accounts available under the Trust or Group Contract in
the same manner as the undirected Accounts of all other Participants. The Vested
Accounts of all Inactive Participants may be segregated and invested separately
from the Accounts of all other Participants.
The Trust Fund shall be valued at current fair market value as of the
last day of the last calendar month ending in the Plan Year and, at the
discretion of the Trustee, may be valued more frequently. The valuation shall
take into consideration investment earnings credited, expenses charged, payments
made and changes in the value of the assets held in the Trust Fund. The Account
of a Participant shall be credited with its share of the gains and losses of the
Trust Fund. That part of a Participant's Account invested in a funding
arrangement which establishes an account or accounts for such Participant
thereunder shall be credited with the gain or loss from such account or
accounts. That part of a Participant's Account which is invested in other
funding arrangements shall be credited with a proportionate share of the gain or
loss of such investments. The share shall be determined by multiplying the gain
or loss of the investment by the ratio of the part of the Participant's Account
invested in such funding arrangement to the total of the Trust Fund invested in
such funding arrangement.
At least annually, the Named Fiduciary shall review all pertinent
Employee information and Plan data in order to establish the funding policy of
the Plan and to determine appropriate methods of carrying out the Plan's
objectives. The Named Fiduciary shall inform the Trustee and any Investment
Manager of the Plan's short-term and long-term financial needs so the investment
policy can be coordinated with the Plan's financial requirements.
(a) Employer Contributions other than Elective Deferral
Contributions: The Participant shall direct the investment of
such Employer Contributions and transfer of assets resulting from
those Contributions.
(b) Elective Deferral Contributions: The Participant shall direct
the investment of Elective Deferral Contributions and transfer
of assets resulting from those Contributions.
(c) Participant Contributions: The Participant shall direct the
investment of Participant Contributions and transfer of assets
resulting from those Contributions.
(d) Rollover Contributions: The Participant shall direct the
investment of Rollover Contributions and transfer of assets
resulting from those Contributions.
ARTICLE IV
41
<PAGE> 43
However, the Named Fiduciary may delegate to the Investment Manager
investment discretion for Contributions and Plan assets which are not subject to
Participant direction.
SECTION 4.01A--INVESTMENT IN QUALIFYING EMPLOYER SECURITIES.
Participants in the Plan shall be entitled to invest all or any portion
of their Account in Qualifying Employer Securities.
Once investment in Qualifying Employer Securities is made available to
Eligible Employees, then it shall continue to be available unless the Plan and
Trust is amended to disallow such available investment.
Participants shall be entitled to have all or any portion of their
Account invested in Qualifying Employer Securities. In the absence of such
election, such Eligible Employees shall be deemed to have elected to have their
Accounts invested wholly in the Investment Funds. Once an election is made, it
shall be considered to continue until a new election is made..
Any dividends payable on the Qualifying Employer Securities shall,
unless otherwise directed by the Participant, be reinvested in additional shares
of Qualifying Employer Securities hereunder.
If the securities of the Employer are not publicly traded and if no
market or an extremely thin market exists for the Qualifying Employer
Securities, so that a reasonable valuation may not be obtained from the market
place, then such Qualifying Employer Securities must be valued at least annually
by an independent appraiser who is not associated with the Employer, the Plan
Administrator, the Trustee, or any person related to any fiduciary under the
Plan. The independent appraiser may be associated with a person who is merely a
contract administrator with respect to the Plan, but who exercises no
discretionary authority and is not a Plan fiduciary.
If there is a public market for Qualifying Employer Securities of the
type held by the Plan, then the Plan Administrator may use as the value of the
shares the price at which such shares traded in such market, or an average of
the bid and asked prices for such share in such market, provided that such value
is representative of the fair market value of such shares in the opinion of the
Plan Administrator. If the Qualifying Employer Securities do not trade on the
annual valuation date or if the market is very thin on such date, then the Plan
Administrator may use the average of trade prices for a period of time ending on
such date, provided that such value is representative of the fair market value
of such shares in the opinion of the Plan Administrator. The value of a
Participant's Qualifying Employer Securities Account may be expressed in units.
For purposes of determining the annual valuation of the Plan and for
reporting to Participants and regulatory authorities, the assets of the Plan
shall be valued at least annually on the Valuation Date which corresponds to the
last day of the Plan Year. The fair market value of Qualifying Employer
Securities shall be determined on such a Valuation Date. The average of the bid
and asked prices of Qualifying Employer Securities as of the date of the
transaction shall apply for purposes of valuing distributions and other
transactions of the Plan to the extent such value is representative of the fair
market value of such shares int he opinion of the Plan Administrator.
All purchases of Qualifying Employer Securities shall be made at a
price, or prices, which, in the judgment of the Plan Administrator, do not
exceed the fair market value of such Qualifying Employer Securities.
In the event that the Trustee acquires shares of Qualifying Employer
Securities by purchase from a "disqualified person" as defined in Code Section
4975(e)(2), in exchange for cash or other assets of the Trust, the terms of such
purchase shall contain the provision that in the event that there is a final
determination by the Internal Revenue Service
ARTICLE IV
42
<PAGE> 44
or court of competent jurisdiction that the fair market value of such shares of
Qualifying Employer Securities as of the date of purchase was less than the
purchase price paid by the Trustee, then the seller shall pay or transfer, as
the case may be, to the Trustee an amount of cash, shares of Qualifying Employer
Securities, or any combination thereof equal in value to the difference between
the purchase price and said fair market value for all such shares. In the event
that cash and/or shares of Qualifying Employer Securities are paid and/or
transferred to the Trustee under this provision, shares of Qualifying Employer
Securities shall be valued at their fair market value as of the date of said
purchase, and interest at a reasonable rate from the date of purchase to the
date of payment shall be paid by the seller on the amount of cash paid.
The Plan Administrator may direct the Trustee to sell, resell or
otherwise dispose of Qualifying Employer Securities to any person, including the
Employer, provided that any such sales to any disqualified person, including the
Employer, will be made at not less than the fair market value and no commission
is charged. Any such sale shall be made in conformance with Section 408(e) of
ERISA.
In the event the Plan Administrator directs the Trustee to dispose of
any Qualifying Employer Securities held as Trust Assets under circumstances
which require registration and/or qualification of the securities under
applicable Federal or state securities laws, then the Employer, at its own
expense, will take or cause to be taken any and all such action as may be
necessary or appropriate to effect such registration and/or qualification.
SECTION 4.01B--LIMITATION ON INVESTMENT IN QUALIFYING EMPLOYER SECURITIES BY
SOME PARTICIPANTS.
Participants who are directors, officers, 10% stockholders of the
Employer, and other persons subject to Section 16 of the Securities Exchange Act
of 1934 (the "1934 Act") will be permitted to change the level of investment in
the Qualifying Employer Securities Account only once every six months.
Additionally, Participants who are directors, officers, 10% stockholders of the
Employer, and other persons subject to Section 16 of the 1934 Act who cease
participation in the Qualifying Employer Securities Account, or who reduce their
participation in such account to a nominal level, may not participate (e.g.,
direct that investments be made on their behalf) under the Qualifying Employer
Securities Account again for at least six months. Intra-plan transfers by such
Participants between the Qualifying Employer Securities Account and the other
investment accounts available under the Plan may only be made pursuant to an
investment election made during the period beginning on the third business day
following the date of release of annual or quarterly financial information by
the Employer and ending on the twelfth business day following such date. Subject
to certain limited exceptions, Participants who are directors, officers, 10%
stockholders of the Employer, and other persons subject to Section 16 of the
1934 act making withdrawals of investments under the Qualifying Employer
Securities Account must cease further purchases/investment under the Qualifying
Employer Securities Account for six months.
An election by Participants who are directors, officers, 10%
stockholders of the Employer or other persons subject to Section 16 of the 1934
Act to receive a withdrawal under the Plan shall be effective with respect to
any amounts invested in Qualifying Employer Securities only if the election is
irrevocably made and submitted at least six months in advance of the effective
date of the withdrawal, and any election to receive or defer receipt of any
other Plan distribution with respect to Participants who are directors,
officers, 10% stockholders of the Employer or other persons subject to Section
16 of the 1934 Act must be incident on such Employee's death, retirement,
disability or termination of employment.
Participants who are directors, officers, 10% stockholders of the
Employer or other persons subject to Section 16 of the 1934 Act shall not be
permitted to receive a loan under Article V derived from amounts invested in
Qualifying Employer Securities, any loan repayments shall not be permitted to be
invested in Qualifying Employer Securities.
ARTICLE IV
43
<PAGE> 45
With respect to Participants who are directors, officers, 10%
stockholders of the Employer, and other persons subject to the 1934 Act,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the 1934 Act. To the extent any
provisions of the Plan or action by the Plan Administrator fails to so comply,
it shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Plan Administrator.
ARTICLE IV
44
<PAGE> 46
ARTICLE V
BENEFITS
SECTION 5.01--RETIREMENT BENEFITS.
On a Participant's Retirement Date, his Vested Account shall be
distributed to him according to the distribution of benefits provisions of
Article VI and the provisions of the SMALL AMOUNTS SECTION of Article IX.
SECTION 5.02--DEATH BENEFITS.
If a Participant dies before his Annuity Starting Date, his Vested
Account shall be distributed according to the distribution of benefits
provisions of Article VI and the provisions of the SMALL AMOUNTS SECTION of
Article IX.
SECTION 5.03--VESTED BENEFITS.
A Participant may receive a distribution of his Vested Account at any
time after he ceases to be an Employee, provided he has not again become an
Employee. If such amount is not payable under the provisions of the SMALL
AMOUNTS SECTION of Article IX, it will be distributed only if the Participant so
elects. The Participant's election shall be subject to the requirements in the
ELECTION PROCEDURES SECTION of Article VI for a qualified election of a
retirement benefit.
If a Participant does not receive an earlier distribution according to
the provisions of this section or the SMALL AMOUNTS SECTION of Article IX, upon
his Retirement Date or death, his Vested Account shall be applied according to
the provisions of the RETIREMENT BENEFITS SECTION or the DEATH BENEFITS SECTION
of Article V.
The Nonvested Account of a Participant who has ceased to be an Employee
shall remain a part of his Account until it becomes a Forfeiture; provided,
however, if the Participant again becomes an Employee so that his Vesting
Percentage can increase, the Nonvested Account may become a part of his Vested
Account.
SECTION 5.04--WHEN BENEFITS START.
Benefits under the Plan begin when a Participant retires, dies or ceases
to be an Employee, whichever applies, as provided in the preceding sections of
this article. Benefits which begin before Normal Retirement Date for a
Participant who became Totally and Permanently Disabled when he was an Employee
shall be deemed to begin on the first day of the month after the Plan
Administrator has determined that he is Totally and Permanently Disabled. The
start of benefits is subject to the qualified election procedures of Article VI.
Unless otherwise elected, benefits shall begin before the sixtieth day
following the close of the Plan Year in which the latest date below occurs:
(a) The date the Participant attains age 65 (Normal Retirement Age,
if earlier).
(b) The tenth anniversary of the Participant's Entry Date.
(c) The date the Participant ceases to be an Employee.
ARTICLE V
45
<PAGE> 47
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 the ELECTION PROCEDURES SECTION of Article VI, shall be
deemed to be an election to defer commencement of payment of any benefit
sufficient to satisfy this section.
The Participant may elect to have his benefits begin after the latest
date for beginning benefits described above, subject to the provisions of this
section. The Participant shall make the election in writing and deliver the
signed statement of election to the Plan Administrator before Normal Retirement
Date or the date he ceases to be an Employee, if later. The election must
describe the form of distribution and the date the benefits will begin. The
Participant shall not elect a date for beginning benefits or a form of
distribution that would result in a benefit payable when he dies which would be
more than incidental within the meaning of governmental regulations.
Benefits shall begin by the Participant's Required Beginning Date, as
defined in the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION REQUIREMENTS
SECTION of Article VI.
Contributions which are used to compute the Actual Deferral Percentage,
as defined in the EXCESS AMOUNTS SECTION of Article III, may be distributed upon
disposition by the Employer of substantially all of the assets (within the
meaning of Code Section 409(d)(2)) used by the Employer in a trade or business
or disposition by the Employer of the Employer's interest in a subsidiary
(within the meaning of Code Section 409(d)(3)) if the transferee corporation is
not a Controlled Group member, the Employee continues employment with the
transferee corporation and the transferor corporation continues to maintain the
Plan. Such distributions made after March 31, 1988, must be made in a single
sum.
SECTION 5.05--WITHDRAWAL PRIVILEGES.
A Participant may withdraw that part of his Vested Account resulting
from his Rollover Contributions. A Participant may make only one such withdrawal
in any 12-month period. Withdrawals must be a minimum of $100.
A Participant who has attained age 59 1/2 may withdraw an amount which
is equal to any whole percentage (not exceeding 100%) of his Vested Account
which results from the following Contributions:
Elective Deferral Contributions
Matching Contributions
Qualified Matching Contributions
Qualified Nonelective Contributions
Discretionary Contributions
Rollover Contributions
Voluntary Contributions
Withdrawals must be a minimum of $100. A Participant may make only one such
withdrawal in any 12-month period.
A Participant may withdraw all or any portion of his Vested Account
which results from the following Contributions
Elective Deferral Contributions
in the event of hardship only if the distribution is made both on account of an
immediate and heavy financial need of the Employee and is necessary to satisfy
the financial need. Withdrawals from the Participant's Account resulting from
Elective Deferral Contributions shall be limited to the amount of the
Participant's Elective Deferral Contributions plus income allocable thereto
credited to his Account as of December 31, 1988. Immediate and heavy financial
need shall be limited to: (i) expenses incurred or necessary for medical care,
described in Code Section 213(d), of the Participant,
ARTICLE V
46
<PAGE> 48
the Participant's spouse, or any dependents of the Participant (as defined in
Code Section 152); (ii) purchase (excluding mortgage payments) of a principal
residence for the Participant; (iii) payment of tuition and related educational
fees and the payment of room and board expenses for the next 12 months of
post-secondary education for the Participant, his spouse, children or
dependents; (iv) the need to prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage of the Participant's
principal residence; or (v) any other distribution which is deemed by the
Commissioner of Internal Revenue to be made on account of immediate and heavy
financial need as provided in Treasury regulations. The Participant's request
for a withdrawal shall include his written statement that an immediate and heavy
financial need exists and explain its nature.
No withdrawal shall be allowed which is not necessary to satisfy such
immediate and heavy financial need. Such withdrawal shall be deemed necessary
only if all of the following requirements are met: (i) the distribution is not
in excess of the amount of the immediate and heavy financial need of the
Participant (including amounts necessary to pay any Federal, state or local
income taxes or penalties reasonably anticipated to result from the
distribution); (ii) the Participant has obtained all distributions, other than
hardship distributions, and all nontaxable loans currently available under all
plans maintained by the Employer; (iii) the Plan, and all other plans maintained
by the Employer, provide that the Participant's elective contributions and
employee contributions will be suspended for at least 12 months after receipt of
the hardship distribution; and (iv) the Plan, and all other plans maintained by
the Employer, provide that the Participant may not make elective contributions
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
contributions for the taxable year of the hardship distribution. The Plan will
suspend elective contributions and employee contributions for 12 months and
limit elective deferrals as provided in the preceding sentence. A Participant
shall not cease to be an Eligible Participant, as defined in the EXCESS AMOUNTS
SECTION of Article III, merely because his elective contributions or employee
contributions are suspended.
The minimum withdrawal amount is the lesser of $1,000 or 100% of the
Participants vested account balance.
A Participant may withdraw all or any portion of his Vested Account
which results from the following Contributions
Matching Contribution that are not designated as Qualified Matching
Contributions
Discretionary Contributions
Rollover Contributions
in the event of hardship due to an immediate financial need created by the
hardship. Such hardship must be shown by positive evidence submitted to the Plan
Administrator that the hardship is of sufficient magnitude to impair the
Participant's financial security.
In no event may such withdrawal exceed the amount required to meet the
immediate financial need created by the hardship. The minimum withdrawal amount
is the lesser of $1,000 or 100% or the Participant's vested account balances.
A request for withdrawal shall be in writing on a form furnished for
that purpose and delivered to the Plan Administrator before the withdrawal is to
occur. The Participant's request shall be subject to the requirements in the
ELECTION PROCEDURES SECTION of Article VI for a qualified election of a
retirement benefit payable in a form other than a Qualified Joint and Survivor
Form.
A forfeiture shall not occur solely as a result of a withdrawal.
SECTION 5.06--LOANS TO PARTICIPANTS.
ARTICLE V
47
<PAGE> 49
Loans shall be made available to all Participants on a reasonably
equivalent basis.
Loans may only be made to a Participant in the event of financial
hardship. For purposes of this section, a distribution is made on account of
hardship only if the distribution is made both on account of an immediate and
heavy financial need of the Employee and is necessary to satisfy the financial
need.
The following are the only financial needs considered immediate and
heavy for purposes of this section:
(1) Expenses for medical care described in section 213(d) of the Code
previously incurred by the Employee, the Employee's spouse, or
any dependents of the Employee (as defined in section 152 of the
Code) or necessary for these persons to obtain medical care
described in section 213(d) of the Code;
(2) Payment of tuition and related educational fees for the next 12
months of post-secondary education for the Employee, his spouse,
children, or dependents (as defined in section 152 of the Code);
(3) Costs directly related to the purchase of a principal residence
for the Employee (excluding mortgage payments); or
(4) Payments necessary to prevent the eviction of the Employee from
the Employee's principal residence or foreclosure on the mortgage
on that residence.
For purposes of this section, Participant means any Participant or
Beneficiary who is a party-in-interest, within the meaning of Section 3(14) of
the Employee Retirement Income Security Act of 1974 (ERISA). Loans shall not be
made to highly compensated employees, as defined in Code Section 414(q), in an
amount greater than the amount made available to other Participants.
No loans will be made to any shareholder-employee or owner-employee.
For purposes of this requirement, a shareholder-employee means an employee or
officer of an electing small business (Subchapter S) corporation who owns (or is
considered as owning within the meaning of Code Section 318(a)(1)), on any day
during the taxable year of such corporation, more than 5% of the outstanding
stock of the corporation.
A loan to a Participant shall be a Participant-directed investment of
his Account. No Account other than the borrowing Participant's Account shall
share in the interest paid on the loan or bear any expense or loss incurred
because of the loan.
A portion of one or more investment funds in which the Participant's
Accounts are invested shall be liquidated to provide the proceeds for any loan
to the Participant. The amount of each such investment fund to be liquidated
shall be equal to the loan amount multiplied by the percentage of the
Participant's Accounts which are invested in each such investment fund as of the
valuation date as of which the loan is made, or among such investment funds as
may be requested by the Participant and approved by the Administrator. As the
Participant's loan is repaid, the amount of repayment shall be invested in the
investment funds according to the Participant's designation under the Plan.
The number of outstanding loans shall be limited to one. The minimum
amount of any loan shall be $1,000.
Loans must be adequately secured and bear a reasonable rate of interest.
Each loan shall be secured by assignment of the individual's account in the plan
and/or such other collateral as determined by the Loan Administrator.
ARTICLE V
48
<PAGE> 50
The amount of the loan shall not exceed the maximum amount that may be
treated as a loan under Code Section 72(p) (rather than a distribution) to the
Participant and shall be equal to the lesser of (a) or (b) below:
(a) $50,000 reduced by the highest outstanding loan balance of loans
during the one-year period ending on the day before the new loan
is made.
(b) The greater of (1) or (2), reduced by (3) below:
(1) One-half of the Participant's Vested Account.
(2) $10,000.
(3) Any outstanding loan balance on the date the new loan is
made.
For purposes of this maximum, a Participant's Vested Account does not include
any accumulated deductible employee contributions, as defined in Code Section
72(o)(5)(B), and all qualified employer plans, as defined in Code Section
72(p)(4), of the Employer and any Controlled Group member shall be treated as
one plan.
The foregoing notwithstanding, the amount of such loan shall not exceed
50% of the amount of the Participant's Vested Account reduced by any outstanding
loan balance on the date the new loan is made. For purposes of this maximum, a
Participant's Vested Account does not include any accumulated deductible
employee contributions, as defined in Code Section 72(o)(5)(B).
A Participant must obtain the consent of the Participant's spouse, if
any, to the use of the Vested Account as security for the loan. Spousal consent
shall be obtained no earlier than the beginning of the 90-day period that ends
on the date on which the loan to be so secured is made. The consent must be in
writing, must acknowledge the effect of the loan, and must be witnessed by a
plan representative or a notary public. Such consent shall thereafter be binding
with respect to the consenting spouse or any subsequent spouse with respect to
that loan. A new consent shall be required if the Vested Account is used for
collateral upon renegotiation, extension, renewal, or other revision of the
loan.
If a valid spousal consent has been obtained in accordance with the
above, then, notwithstanding any other provision of this Plan, the portion of
the Participant's Vested Account used as a security interest held by the Plan by
reason of a loan outstanding to the Participant shall be taken into account for
purposes of determining the amount of the Vested Account payable at the time of
death or distribution, but only if the reduction is used as repayment of the
loan. If less than 100% of the Participant's Vested Account (determined without
regard to the preceding sentence) is payable to the surviving spouse, then the
Vested Account shall be adjusted by first reducing the Vested Account by the
amount of the security used as repayment of the loan, and then determining the
benefit payable to the surviving spouse.
Each loan shall bear a reasonable fixed rate of interest to be
determined by the Loan Administrator. In determining the interest rate, the Loan
Administrator shall take into consideration fixed interest rates currently being
charged by commercial lenders for loans of comparable risk on similar terms and
for similar durations, so that the interest will provide for a return
commensurate with rates currently charged by commercial lenders for loans made
under similar circumstances. The Loan Administrator shall not discriminate among
Participants in the matter of interest rates; but loans granted at different
times may bear different interest rates in accordance with the current
appropriate standards.
The loan shall by its terms require that repayment (principal and
interest) be amortized in level payments, not less frequently than quarterly,
over a period not extending beyond five years from the date of the loan. A loan
is not
ARTICLE V
49
<PAGE> 51
subject to this five-year repayment requirement if it is used to buy any
dwelling unit, which within a reasonable time, is to be used as the principal
residence of the Participant. The "reasonable time" will be determined at the
time the loan is made. The period of repayment for any loan shall be arrived at
by mutual agreement between the Loan Administrator and the Participant.
The Participant shall make a written application for a loan from the
Plan on forms provided by the Loan Administrator. The application must specify
the amount and duration requested. No loan will be approved unless the
Participant is creditworthy. The Participant must grant authority to the Loan
Administrator to investigate the Participant's creditworthiness so that the loan
application may be properly considered.
Information contained in the application for the loan concerning the
income, liabilities, and assets of the Participant will be evaluated to
determine whether there is a reasonable expectation that the Participant will be
able to satisfy payments on the loan as due. Additionally, the Loan
Administrator will pursue any appropriate further investigations concerning the
creditworthiness and/or credit history of the Participant to determine whether a
loan should be approved.
Each loan shall be fully documented in the form of a promissory note
signed by the Participant for the face amount of the loan, together with
interest determined as specified above.
There will be an assignment of collateral to the Plan executed at the
time the loan is made.
In those cases where repayment through payroll deduction by the Employer
is available, installments are so payable, and a payroll deduction agreement
will be executed by the Participant at the time of making the loan.
Where payroll deduction is not available, payments are to be timely
made.
Any payment that is not by payroll deduction shall be made payable to
the Employer or Trustee, as specified in the promissory note, and delivered to
the Loan Administrator, including prepayments, service fees and penalties, if
any, and other amounts due under the note.
The promissory note may provide for reasonable late payment penalties
and/or service fees. Any penalties or service fees shall be applied to all
Participants in a nondiscriminatory manner. If the promissory note so provides,
such amounts may be assessed and collected from the Account of the Participant
as part of the loan balance.
Each loan may be paid prior to maturity, in part or in full, without
penalty or service fee, except as may be set out in the promissory note.
If any amount remains unpaid for more than 31 days after due, a default
is deemed to occur.
Upon default, the Plan has the right to pursue any remedy available by
law to satisfy the amount due, along with accrued interest, including the right
to enforce its claim against the security pledged and execute upon the
collateral as allowed by law.
If any payment of principal or interest or any other amount due under
the promissory note, or any portion thereof, is not made for a period of 90 days
after due, the entire principal balance whether or not otherwise then due, shall
become immediately due and payable without demand or notice, and subject to
collection or satisfaction by any lawful means, including specifically but not
limited to the right to enforce the claim against the security pledged and to
execute upon the collateral as allowed by law.
ARTICLE V
50
<PAGE> 52
In the event of default, foreclosure on the note and attachment of
security or use of amounts pledged to satisfy the amount then due, will not
occur until a distributable event occurs in accordance with the Plan, and will
not occur to an extent greater than the amount then available upon any
distributable event which has occurred under the Plan.
All reasonable costs and expenses, including but not limited to
attorney's fees, incurred by the Plan in connection with any default or in any
proceeding to enforce any provision of a promissory note or instrument by which
a promissory note for a Participant loan is secured, shall be assessed and
collected from the Account of the Participant as part of the loan balance.
If payroll deduction is being utilized, in the event that a
Participant's available payroll deduction amounts in any given month are
insufficient to satisfy the total amount due, there will be an increase in the
amount taken subsequently, sufficient to make up the amount that is then due. If
the subsequent deduction is also insufficient to satisfy the amount due within
31 days, a default is deemed to occur as above. If any amount remains past due
more than 90 days, the entire principal amount, whether or not otherwise then
due, along with interest then accrued and any other amount then due under the
promissory note, shall become due and payable, as above.
If the Participant ceases to be a party-in-interest (as defined in this
section) the balance of the outstanding loan becomes due and payable, and the
Participant's Vested Account will be used as available for distribution(s) to
pay the outstanding loan. The Participant's Vested Account will not be used to
pay any amount due under the outstanding loan before the date which is 31 days
after the date he ceased to be an Employee, and the Participant may elect to
repay the outstanding loan with interest on the day of repayment. If no
distributable event has occurred under the Plan at the time that the
Participant's Vested Account would otherwise be used under this provision to pay
any amount due under the outstanding loan, this will not occur until the time,
or in excess of the extent to which, a distributable event occurs under the
Plan.
ARTICLE V
51
<PAGE> 53
ARTICLE VI
DISTRIBUTION OF BENEFITS
SECTION 6.01--AUTOMATIC FORMS OF DISTRIBUTION.
Unless a qualified election of an optional form of benefit has been made
within the election period (see the ELECTION PROCEDURES SECTION of Article VI),
the automatic form of benefit payable to or on behalf of a Participant is
determined as follows:
(a) The automatic form of retirement benefit for a Participant who
does not die before his Annuity Starting Date shall be the
Qualified Joint and Survivor Form.
(b) The automatic form of death benefit for a Participant who dies
before his Annuity Starting Date shall be:
(1) A Qualified Preretirement Survivor Annuity for a
Participant who has a spouse to whom he has been
continuously married throughout the one-year period ending
on the date of his death. The spouse may elect to start
receiving the death benefit on any first day of the month
on or after the Participant dies and before the date the
Participant would have been age 70 1/2. If the spouse dies
before benefits start, the Participant's Vested Account,
determined as of the date of the spouse's death, shall be
paid to the spouse's Beneficiary.
(2) A single-sum payment to the Participant's Beneficiary for
a Participant who does not have a spouse who is entitled
to a Qualified Preretirement Survivor Annuity.
Before a death benefit will be paid on account of the death of a
Participant who does not have a spouse who is entitled to a
Qualified Preretirement Survivor Annuity, it must be established
to the satisfaction of a plan representative that the Participant
does not have such a spouse.
SECTION 6.02--OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION
REQUIREMENTS.
(a) For purposes of this section, the following terms are defined:
APPLICABLE LIFE EXPECTANCY means Life Expectancy (or Joint and
Last Survivor Expectancy) calculated using the attained age of
the Participant (or Designated Beneficiary) as of the
Participant's (or Designated Beneficiary's) birthday in the
applicable calendar year reduced by one for each calendar year
which has elapsed since the date Life Expectancy was first
calculated. If Life Expectancy is being recalculated, the
Applicable Life Expectancy shall be the Life Expectancy so
recalculated. The applicable calendar year shall be the first
Distribution Calendar Year, and if Life Expectancy is being
recalculated such succeeding calendar year.
DESIGNATED BENEFICIARY means the individual who is designated as
the beneficiary under the Plan in accordance with Code Section
401(a)(9) and the regulations thereunder.
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DISTRIBUTION CALENDAR YEAR means a calendar year for which a
minimum distribution is required. For distributions beginning
before the Participant's death, the first Distribution Calendar
Year is the calendar year immediately preceding the calendar year
which contains the Participant's Required Beginning Date. For
distributions beginning after the Participant's death, the first
Distribution Calendar Year is the calendar year in which
distributions are required to begin pursuant to (e) below.
JOINT AND LAST SURVIVOR EXPECTANCY means joint and last survivor
expectancy computed by use of the expected return multiples in
Table VI of section 1.72-9 of the Income Tax Regulations.
Unless otherwise elected by the Participant (or spouse, in the
case of distributions described in (e)(2)(ii) below) by the time
distributions are required to begin, life expectancies shall be
recalculated annually. Such election shall be irrevocable as to
the Participant (or spouse) and shall apply to all subsequent
years. The life expectancy of a nonspouse Beneficiary may not be
recalculated.
LIFE EXPECTANCY means life expectancy computed by use of the
expected return multiples in Table V of section 1.72-9 of the
Income Tax Regulations.
Unless otherwise elected by the Participant (or spouse, in the
case of distributions described in (e)(2)(ii) below) by the time
distributions are required to begin, life expectancies shall be
recalculated annually. Such election shall be irrevocable as to
the Participant (or spouse) and shall apply to all subsequent
years. The life expectancy of a nonspouse Beneficiary may not be
recalculated.
PARTICIPANT'S BENEFIT means
(1) 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 the dates in the valuation
calendar year after the valuation date and decreased by
distributions made in the valuation calendar year after
the valuation date.
(2) For purposes of (1) above, if any portion of the minimum
distribution for the first Distribution Calendar Year is
made in the second Distribution Calendar Year on or before
the Required Beginning Date, the amount of the minimum
distribution made in the second Distribution Calendar Year
shall be treated as if it had been made in the immediately
preceding Distribution Calendar Year.
REQUIRED BEGINNING DATE means, for a Participant, the first day
of April of the calendar year following the calendar year in
which the Participant attains age 70 1/2, unless otherwise
provided in (1), (2) or (3) below:
(1) The Required Beginning Date for a Participant who attains
age 70 1/2 before January 1, 1988, and 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.
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(2) The Required Beginning Date for a Participant who attains
age 70 1/2 before January 1, 1988, and who is a 5-percent
owner is the first day of April of the calendar year
following the later of
(i) the calendar year in which the Participant attains
age 70 1/2, or
(ii) the earlier of the calendar year 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.
(3) The Required Beginning Date of a Participant who is not a
5-percent owner and who attains age 70 1/2 during 1988 and
who has not retired as of January 1, 1989, is April 1,
1990.
A Participant is treated as a 5-percent owner for purposes of
this section if such Participant is a 5-percent owner as defined
in Code Section 416(i) (determined in accordance with Code
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.
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.
(b) The optional forms of retirement benefit shall be the following:
a straight life annuity; single life annuities with certain
periods of five, ten or fifteen years; a single life annuity
with installment refund; survivorship life annuities with
installment refund and survivorship percentages of 50, 66 2/3 or
100; fixed period annuities for any period of whole months which
is not less than 60 and does not exceed the Life Expectancy of
the Participant and the named Beneficiary as provided in (d)
below where the Life Expectancy is not recalculated; and a
series of installments chosen by the Participant with a minimum
payment each year beginning with the year the Participant turns
age 70 1/2. The payment for the first year in which a minimum
payment is required will be made by April 1 of the following
calendar year. The payment for the second year and each
successive year will be made by December 31 of that year. The
minimum payment will be based on a period equal to the Joint and
Last Survivor Expectancy of the Participant and the
Participant's spouse, if any, as provided in (d) below where the
Joint and Last Survivor Expectancy is recalculated. The balance
of the Participant's Vested Account, if any, will be payable on
the Participant's death to his Beneficiary in a single sum. The
Participant may also elect to receive his Vested Account in a
single-sum payment.
Election of an optional form is subject to the qualified
election provisions of Article VI.
Any annuity contract distributed shall be nontransferable. The
terms of any annuity contract purchased and distributed by the
Plan to a Participant or spouse shall comply with the
requirements of this Plan.
(c) The optional forms of death benefit are a single-sum payment and
any annuity that is an optional form of retirement benefit.
However, a series of installments shall not be available if the
Beneficiary is not the spouse of the deceased Participant.
(d) Subject to the AUTOMATIC FORMS OF DISTRIBUTION SECTION of Article
VI, joint and survivor annuity requirements, the requirements of
this section shall apply to any distribution of a Participant's
interest and will take precedence over any inconsistent
provisions of this Plan. Unless otherwise specified, the
provisions of this section apply to calendar years beginning
after December 31, 1984.
ARTICLE VI
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All distributions required under this section shall be determined
and made in accordance with the proposed regulations under Code
Section 401(a)(9), including the minimum distribution incidental
benefit requirement of section 1.401(a)(9)-2 of the proposed
regulations.
The entire interest of a Participant must be distributed or begin
to be distributed no later than the Participant's Required
Beginning Date.
As of the first Distribution Calendar Year, distributions, if not
made in a single sum, may only be made over one of the following
periods (or combination thereof):
(1) the life of the Participant,
(2) the life of the Participant and a Designated Beneficiary,
(3) a period certain not extending beyond the Life
Expectancy of the Participant, or
(4) a period certain not extending beyond the Joint and Last
Survivor Expectancy of the Participant and a Designated
Beneficiary.
If the Participant's interest is to be distributed in other than
a single sum, the following minimum distribution rules shall
apply on or after the Required Beginning Date:
(5) Individual account:
(i) If a Participant's Benefit is to be distributed
over
(a) a period not extending beyond the Life
Expectancy of the Participant or the Joint
Life and Last Survivor Expectancy of the
Participant and the Participant's
Designated Beneficiary or
(b) a period not extending beyond the Life
Expectancy of the Designated Beneficiary,
the amount required to be distributed for each
calendar year beginning with the distributions for
the first Distribution Calendar Year, must be at
least equal to the quotient obtained by dividing
the Participant's Benefit by the Applicable Life
Expectancy.
(ii) For calendar years beginning before January 1,
1989, if the Participant's spouse is not the
Designated Beneficiary, the method of distribution
selected must assure that at least 50% of the
present value of the amount available for
distribution is paid within the Life Expectancy
of the Participant.
(iii) 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
(a) the Applicable Life Expectancy or
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55
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(b) if the Participant's spouse is not the
Designated Beneficiary, the applicable
divisor 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 in (5)(i) above as the relevant divisor
without regard to Proposed Regulations section
1.401(a)(9)-2.
(iv) The minimum distribution required for the
Participant's first Distribution Calendar Year
must be made on or before the Participant's
Required Beginning Date. The minimum distribution
for the Distribution Calendar Year for other
calendar years, including the minimum distribution
for the Distribution Calendar Year in which the
Participant's Required Beginning Date occurs, must
be made on or before December 31 of that
Distribution Calendar Year.
(6) Other forms:
(i) If the Participant's Benefit is distributed in the
form of an annuity purchased from an insurance
company, distributions thereunder shall be made in
accordance with the requirements of Code Section
401(a)(9) and the proposed regulations thereunder.
(e) Death distribution provisions:
(1) Distribution beginning before death. If the Participant
dies after distribution of his interest has begun, the
remaining portion of such interest will continue to be
distributed at least as rapidly as under the method of
distribution being used prior to the Participant's death.
(2) Distribution beginning after death. If the Participant
dies before distribution of his interest begins,
distribution of the Participant's entire interest shall be
completed by December 31 of the calendar year containing
the fifth anniversary of the Participant's death except to
the extent that an election is made to receive
distributions in accordance with (i) or (ii) below:
(i) if any portion of the Participant's interest is
payable to a Designated Beneficiary, distributions
may be made over the life or over a period certain
not greater than the Life Expectancy of the
Designated Beneficiary commencing on or before
December 31 of the calendar year immediately
following the calendar year in which the
Participant died;
(ii) if the Designated Beneficiary is the Participant's
surviving spouse, the date distributions are
required to begin in accordance with (i) above
shall not be earlier than the later of
(a) December 31 of the calendar year
immediately following the calendar year in
which the Participant died and
(b) December 31 of the calendar year in which
the Participant would have attained
age 70 1/2.
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If the Participant has not made an election pursuant to
this (e)(2) by the time of his death, the Participant's
Designated Beneficiary must elect the method of
distribution no later than the earlier of
(iii) December 31 of the calendar year in which
distributions would be required to begin
under this subparagraph, or
(iv) December 31 of the calendar year which contains
the fifth anniversary of the date of death of the
Participant.
If the Participant has no Designated Beneficiary, or if
the Designated Beneficiary does not elect a method of
distribution, distribution of the Participant's entire
interest must be completed by December 31 of the calendar
year containing the fifth anniversary of the Participant's
death.
(3) For purposes of (e)(2) above, if the surviving spouse dies
after the Participant, but before payments to such spouse
begin, the provisions of (e)(2) above, with the exception
of (e)(2)(ii) therein, shall be applied as if the
surviving spouse were the Participant.
(4) For purposes of this (e), any amount paid to a child of
the Participant will be treated as if it had been paid to
the surviving spouse if the amount becomes payable to the
surviving spouse when the child reaches the age of
majority.
(5) For purposes of this (e), distribution of a Participant's
interest is considered to begin on the Participant's
Required Beginning Date (or if (e)(3) above is applicable,
the date distribution is required to begin to the
surviving spouse pursuant to (e)(2) above). 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.
SECTION 6.02A--DISTRIBUTIONS IN QUALIFYING EMPLOYER SECURITIES.
In lieu of the distributions permitted under Section 6.02 above, any
portion of the Participant's Vested Account held in Qualifying Employer
Securities may be distributed in kind. Fractional shares shall be paid in cash
valued as of the most recent Valuation Date; the distribution shall include any
dividends (cash or stock) on such whole shares or any additional shares received
as a result of a stock split or any other adjustment to such whole shares since
the Valuation Date preceding the date of distribution.
SECTION 6.03--ELECTION PROCEDURES.
The Participant, Beneficiary, or spouse shall make any election under
this section in writing. The Plan Administrator may require such individual to
complete and sign any necessary documents as to the provisions to be made. Any
election permitted under (a) and (b) below shall be subject to the qualified
election provisions of (c) below.
(a) Retirement Benefits. A Participant may elect his Beneficiary or
Contingent Annuitant and may elect to have retirement benefits
distributed under any of the optional forms of retirement benefit
described in the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION
REQUIREMENTS SECTION of Article VI.
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(b) Death Benefits. A Participant may elect his Beneficiary and may
elect to have death benefits distributed under any of the
optional forms of death benefit described in the OPTIONAL FORMS
OF DISTRIBUTION AND DISTRIBUTION REQUIREMENTS SECTION of Article
VI.
If the Participant has not elected an optional form of
distribution for the death benefit payable to his Beneficiary,
the Beneficiary may, for his own benefit, elect the form of
distribution, in like manner as a Participant.
The Participant may waive the Qualified Preretirement Survivor
Annuity by naming someone other than his spouse as Beneficiary.
In lieu of the Qualified Preretirement Survivor Annuity described
in the AUTOMATIC FORMS OF DISTRIBUTION SECTION of Article VI, the
spouse may, for his own benefit, waive the Qualified
Preretirement Survivor Annuity by electing to have the benefit
distributed under any of the optional forms of death benefit
described in the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION
REQUIREMENTS SECTION of Article VI.
(c) Qualified Election. The Participant, Beneficiary or spouse may
make an election at any time during the election period. The
Participant, Beneficiary, or spouse may revoke the election made
(or make a new election) at any time and any number of times
during the election period. An election is effective only if it
meets the consent requirements below.
The election period as to retirement benefits is the 90-day
period ending on the Annuity Starting Date. An election to waive
the Qualified Joint and Survivor Form may not be made before the
date he is provided with the notice of the ability to waive the
Qualified Joint and Survivor Form. If the Participant elects the
series of installments, he may elect on any later date to have
the balance of his Vested Account paid under any of the optional
forms of retirement benefit available under the Plan. His
election period for this election is the 90-day period ending on
the Annuity Starting Date for the optional form of retirement
benefit elected.
A Participant may make an election as to death benefits at any
time before he dies. The spouse's election period begins on the
date the Participant dies and ends on the date benefits begin.
The Beneficiary's election period begins on the date the
Participant dies and ends on the date benefits begin. An election
to waive the Qualified Preretirement Survivor Annuity may not be
made by the Participant before the date he is provided with the
notice of the ability to waive the Qualified Preretirement
Survivor Annuity. A Participant's election to waive the
Qualified Preretirement Survivor Annuity which is made before
the first day of the Plan Year in which he reaches age 35 shall
become invalid on such date. An election made by a Participant
after he ceases to be an Employee will not become invalid on the
first day of the Plan Year in which he reaches age 35 with
respect to death benefits from that part of his Account
resulting from Contributions made before he ceased to be an
Employee.
If the Participant's Vested Account has at any time exceeded
$3,500, any benefit which is (1) immediately distributable or (2)
payable in a form other than a Qualified Joint and Survivor Form
or a Qualified Preretirement Survivor Annuity requires the
consent of the Participant and the Participant's spouse (or where
either the Participant or the spouse has died, the survivor). The
consent of the Participant or spouse to a benefit which is
immediately distributable must not be made before the date the
Participant or spouse is provided with the notice of the ability
to defer the distribution. Such consent shall be made in writing.
The consent shall not be made more than 90 days before the
Annuity Starting Date. Spousal consent is not required for a
benefit which is immediately distributable in a Qualified Joint
and Survivor
ARTICLE VI
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Form. Furthermore, if spousal consent is not required because
the Participant is electing an optional form of retirement
benefit that is not a life annuity pursuant to (d) below, only
the Participant need consent to the distribution of a benefit
payable in a form that is not a life annuity and which is
immediately distributable. Neither the consent of the
Participant nor the Participant's spouse shall be required to
the extent that a distribution is required to satisfy Code
Section 401(a)(9) or Code Section 415. In addition, upon
termination of this Plan if the Plan does not offer an annuity
option (purchased from a commercial provider), the Participant's
Account balance 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 Code Section 4975(e)(7)) within the same
Controlled Group. A benefit is immediately distributable if any
part of the benefit could be distributed to the Participant (or
surviving spouse) before the Participant attains (or would have
attained if not deceased) the older of Normal Retirement Age or
age 62. If the Qualified Joint and Survivor Form is waived, the
spouse has the right to limit consent only to a specific
Beneficiary or a specific form of benefit. The spouse can
relinquish one or both such rights. Such consent shall be made
in writing. The consent shall not be made more than 90 days
before the Annuity Starting Date. If the Qualified Preretirement
Survivor Annuity is waived, the spouse has the right to limit
consent only to a specific Beneficiary. Such consent shall be in
writing. The spouse's consent shall be witnessed by a plan
representative or notary public. The spouse's consent must
acknowledge the effect of the election, including that the
spouse had the right to limit consent only to a specific
Beneficiary or a specific form of benefit, if applicable, and
that the relinquishment of one or both such rights was
voluntary. Unless the consent of the spouse expressly permits
designations by the Participant without a requirement of further
consent by the spouse, the spouse's consent must be limited to
the form of benefit, if applicable, and the Beneficiary
(including any Contingent Annuitant), class of Beneficiaries, or
contingent Beneficiary named in the election. Spousal consent is
not required, however, if the Participant establishes to the
satisfaction of the plan representative that the consent of the
spouse cannot be obtained because there is no spouse or the
spouse cannot be located. A spouse's consent under this
paragraph shall not be valid with respect to any other spouse. A
Participant may revoke a prior election without the consent of
the spouse. Any new election will require a new spousal consent,
unless the consent of the spouse expressly permits such election
by the Participant without further consent by the spouse. A
spouse's consent may be revoked at any time within the
Participant's election period.
(d) Special Rule for Profit Sharing Plan. As provided in the
preceding provisions of the Plan, if a Participant has a spouse
to whom he has been continuously married throughout the one-year
period ending on the date of his death, the Participant's Vested
Account shall be paid to such spouse. However, if there is no
such spouse or if the surviving spouse has already consented in a
manner conforming to the qualified election requirements in (c)
above, the Vested Account shall be payable to the Participant's
Beneficiary in the event of the Participant's death.
The Participant may waive the spousal death benefit described
above at any time provided that no such waiver shall be effective
unless it satisfies the conditions of (c) above (other than the
notification requirement referred to therein) that would apply to
the Participant's waiver of the Qualified Preretirement Survivor
Annuity.
Because this is a profit sharing plan which pays death benefits
as described above, this subsection (d) applies if the following
condition is met: with respect to the Participant, this Plan is
not a direct or indirect transferee after December 31, 1984, of a
defined benefit plan, money purchase plan (including a target
plan), stock bonus plan or profit sharing plan which is subject
to the survivor annuity requirements of Code Section 401(a)(11)
and Code Section 417. If the above condition is met, spousal
consent is not
ARTICLE VI
59
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required for electing a benefit payable in a form that is not a
life annuity. If the above condition is not met, the consent
requirements of this article shall be operative.
SECTION 6.04--NOTICE REQUIREMENTS.
(a) Optional forms of retirement benefit. The Plan Administrator
shall furnish to the Participant and the Participant's spouse a
written explanation of the optional forms of retirement benefit
in the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION
REQUIREMENTS SECTION of Article VI, including the material
features and relative values of these options, in a manner that
would satisfy the notice requirements of Code Section 417(a)(3)
and the right of the Participant and the Participant's spouse to
defer distribution until the benefit is no longer immediately
distributable. The Plan Administrator shall furnish the written
explanation by a method reasonably calculated to reach the
attention of the Participant and the Participant's spouse no
less than 30 days and no more than 90 days before the Annuity
Starting Date.
(b) Qualified Joint and Survivor Form. The Plan Administrator shall
furnish to the Participant a written explanation of the
following: the terms and conditions of the Qualified Joint and
Survivor Form; the Participant's right to make, and the effect
of, an election to waive the Qualified Joint and Survivor Form;
the rights of the Participant's spouse; and the right to revoke
an election and the effect of such a revocation. The Plan
Administrator shall furnish the written explanation by a method
reasonably calculated to reach the attention of the Participant
no less than 30 days and no more than 90 days before the Annuity
Starting Date.
After the written explanation is given, a Participant or spouse
may make written request for additional information. The written
explanation must be personally delivered or mailed (first class
mail, postage prepaid) to the Participant or spouse within 30
days from the date of the written request. The Plan Administrator
does not need to comply with more than one such request by a
Participant or spouse.
The Plan Administrator's explanation shall be written in
nontechnical language and will explain the terms and conditions
of the Qualified Joint and Survivor Form and the financial effect
upon the Participant's benefit (in terms of dollars per benefit
payment) of electing not to have benefits distributed in
accordance with the Qualified Joint and Survivor Form.
(c) Qualified Preretirement Survivor Annuity. As required by the
Code and Federal regulation, the Plan Administrator shall
furnish to the Participant a written explanation of the
following: the terms and conditions of the Qualified
Preretirement Survivor Annuity; the Participant's right to make,
and the effect of, an election to waive the Qualified
Preretirement Survivor Annuity; the rights of the Participant's
spouse; and the right to revoke an election and the effect of
such a revocation. The Plan Administrator shall furnish the
written explanation by a method reasonably calculated to reach
the attention of the Participant within the applicable period.
The applicable period for a Participant is whichever of the
following periods ends last:
(1) the period beginning one year before the date the
individual becomes a Participant and ending one year after
such date; or
(2) the period beginning one year before the date the
Participant's spouse is first entitled to a Qualified
Preretirement Survivor Annuity and ending one year after
such date.
ARTICLE VI
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If such notice is given before 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, an additional
notice shall be given within such period. If a Participant ceases
to be an Employee before attaining age 35, an additional notice
shall be given within the period beginning one year before the
date he ceases to be an Employee and ending one year after such
date.
After the written explanation is given, a Participant or spouse
may make written request for additional information. The written
explanation must be personally delivered or mailed (first class
mail, postage prepaid) to the Participant or spouse within 30
days from the date of the written request. The Plan Administrator
does not need to comply with more than one such request by a
Participant or spouse.
The Plan Administrator's explanation shall be written in
nontechnical language and will explain the terms and conditions
of the Qualified Preretirement Survivor Annuity and the financial
effect upon the spouse's benefit (in terms of dollars per benefit
payment) of electing not to have benefits distributed in
accordance with the Qualified Preretirement Survivor Annuity.
SECTION 6.05--DISTRIBUTIONS UNDER QUALIFIED DOMESTIC RELATIONS ORDERS.
The Plan specifically permits distributions to an Alternate Payee under a
qualified domestic relations order as defined in Code Section 414(p), at any
time, irrespective of whether the Participant has attained his earliest
retirement age as defined in Code Section 414(p), under the Plan. A distribution
to an Alternate Payee before the participant's attainment of earliest retirement
age, as defined in Code Section 414(p), is available only if:
(a) the order specifies distributions at that time or permits an
agreement between the Plan and the Alternate Payee to authorize
an earlier distribution; and
(b) if the present value of the Alternate Payee's benefits under the
Plan exceeds $3500, and the order requires the Alternate Payee
consents to any distribution occurring before the Participant's
attainment of earliest retirement age, as defined in Code Section
414(p).
Nothing in this section shall permit a Participant a right to receive a
distribution at a time otherwise not permitted under the Plan nor shall it
permit the Alternate Payee to receive a form of payment not permitted under the
plan.
The Plan Administrator shall establish reasonable procedures to
determine the qualified status of a domestic relations order. Upon receiving a
domestic relations order, the Plan Administrator promptly shall notify the
Participant and an Alternate Payee named in the order, in writing, of the
receipt of the order and the Plan's procedures for determining the qualified
status of the order. Within a reasonable period of time after receiving the
domestic relations order, the Plan Administrator shall determine the qualified
status of the order and shall notify the Participant and each Alternate Payee,
in writing, of its determination. The Plan Administrator shall provide notice
under this paragraph by mailing to the individual's address specified in the
domestic relations order, or in a manner consistent with Department of Labor
regulations, The Plan Administrator may treat as qualified any domestic
relations order entered before January 1, 1985, irrespective or whether it
satisfies all the requirements described in Code Section 414(p).
If any portion of the Participant's Vested Account is payable during the
period the Plan Administrator is making its determination of the qualified
status of the domestic relations order, a separate accounting shall be made of
the amount payable. If the Plan Administrator determines the order is a
qualified domestic relations order within 18 months of the date amounts are
first payable following receipt of the order, the payable amounts shall be
distributed in accordance with the order. If the Plan Administrator does not
make its determination of the qualified status of the order
ARTICLE VI
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within the 18 month determination period, the payable amounts shall be
distributed int he manner the Plan would distribute if the order did not exist
and the order shall apply prospectively if the Plan Administrator later
determines the order is a qualified domestic relations order.
The Plan shall make payments or distributions required under this
section by separate benefit checks or other separate distribution to the
Alternate Payee(s).
ARTICLE VI
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ARTICLE VII
TERMINATION OF PLAN
The Employer expects to continue the Plan indefinitely but reserves the
right to terminate the Plan in whole or in part at any time upon giving written
notice to all parties concerned. Complete discontinuance of Contributions under
the Plan constitutes complete termination of Plan.
The Account of each Participant shall be fully (100%) vested and
nonforfeitable as of the effective date of complete termination of Plan. The
Account of each Participant who is included in the group of Participants deemed
to be affected by the partial termination of the Plan shall be fully (100%)
vested and nonforfeitable as of the effective date of the partial Plan
termination. The Participant's Account shall continue to participate in the
earnings credited, expenses charged and any appreciation or depreciation of the
Investment Fund until the Vested Account is distributed. A distribution under
this article will be a retirement benefit and shall be distributed to the
Participant according to the provisions of Article VI.
A Participant's Account which does not result from Contributions which
are used to compute the Actual Deferral Percentage, as defined in the EXCESS
AMOUNTS SECTION of Article III, may be distributed to the Participant after the
effective date of the complete or partial Plan termination. A Participant's
Account resulting from Contributions which are used to compute such percentage
may be distributed upon termination of the Plan without the establishment or
maintenance of another defined contribution plan, other than an employee stock
ownership plan (as defined in Code Section 4975(e) or Code Section 409) or a
simplified employee pension plan (as defined in Code Section 408(k)). Such a
distribution made after March 31, 1988, must be in a single sum.
Upon complete termination of Plan, no more Employees shall become
Participants and no more Contributions shall be made.
The assets of this Plan shall not be paid to the Employer at any time,
except that, after the satisfaction of all liabilities under the Plan, any
assets remaining may be paid to the Employer. The payment may not be made if it
would contravene any provision of law.
ARTICLE VII
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ARTICLE VIII
ADMINISTRATION OF PLAN
SECTION 8.01--ADMINISTRATION.
Subject to the provisions of this article, the Plan Administrator has
complete control of the administration of the Plan. The Plan Administrator has
all the powers necessary for it to properly carry out its administrative duties.
Not in limitation, but in amplification of the foregoing, the Plan Administrator
has the power to construe the Plan, including ambiguous provisions, and to
determine all questions that may arise under the Plan, including all questions
relating to the eligibility of Employees to participate in the Plan and the
amount of benefit to which any Participant, Beneficiary, spouse or Contingent
Annuitant may become entitled. The Plan Administrator's decisions upon all
matters within the scope of its authority shall be final.
Unless otherwise set out in the Plan or Group Contract, the Plan
Administrator may delegate recordkeeping and other duties which are necessary
for the administration of the Plan to any person or firm which agrees to accept
such duties. The Plan Administrator shall be entitled to rely upon all tables,
valuations, certificates and reports furnished by the consultant or actuary
appointed by the Plan Administrator and upon all opinions given by any counsel
selected or approved by the Plan Administrator.
The Plan Administrator shall receive all claims for benefits by
Participants, former Participants, Beneficiaries, spouses, and Contingent
Annuitants. The Plan Administrator shall determine all facts necessary to
establish the right of any Claimant to benefits and the amount of those benefits
under the provisions of the Plan. The Plan Administrator may establish rules and
procedures to be followed by Claimants in filing claims for benefits, in
furnishing and verifying proofs necessary to determine age, and in any other
matters required to administer the Plan.
Each Participant shall be entitled to direct the Trustee as to the
exercise of all voting powers over shares allocated to his Account with respect
to any corporate matter which involves the voting of such shares allocated to
the Participant's Account with respect to the approval or disapproval of any
corporate merger or consolidation, recapitalization, reclassification,
liquidation, dissolution, sale of substantially all assets of a trade or
business, or such similar transaction as may be prescribed in the Treasury
Regulations.
In the event that a tender offer is made for some or all of the shares
of the Employer, each Participant shall have the right to direct whether those
shares allocated to his Account, whether or not vested, shall be tendered. This
right shall be exercised in the manner set forth herein. In the absence of a
written directive from or election by a Participant to the Plan Administrator,
the Plan Administrator shall direct the Trustee not to tender such shares.
Because the choice is to be given to the Participants, the Plan Administrator
and the Trustee shall not have fiduciary responsibility with respect to the
decision to tender or not or whether to tender all of such shares or only a
portion thereof.
In order to facilitate the decision of Participants whether to tender
their shares in a tender offer (or how many shares to tender), the Plan
Administrator shall provide election forms for the Participants, whereby they
may elect to tender or not and whereby they may elect to tender all or a portion
of such shares. Unless otherwise limited by Federal securities law, such
election may be made or changed at any time prior to the date before the
expiration date of the tender offer (with extensions); any election or change in
election must be received by the Plan Administrator, or designated
representative of the Plan Administrator, on or before the day preceding the
expiration date of the tender offer (with extensions, if any). The Plan
Administrator may develop procedures to facilitate Participant's choices, such
as the use of facsimile transmissions for the Employees located in areas
physically remote from the Plan Administrator. The
ARTICLE VIII
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election shall be binding on the Plan Administrator and the Trustee. The Plan
Administrator shall make every effort to distribute the notice of the tender,
election forms and other communications related to the tender offer to all
Participants as soon as practicable following the announcement of the tender
offer, including mailing such notice and form to Participants and posting such
notice in places designed to be received by Participants.
As to shares which are not allocated to the Accounts of any Participant,
all such shares (in the aggregate) shall be tendered or not as the majority of
the shares held by Participants and directed by Participants are tendered or
not. The Plan Administrator shall direct the Trustee to tender all such
unallocated shares or not, in accordance with the elections of the Participants
having an allocation of the majority of the shares under the Plan.
SECTION 8.02--RECORDS.
All acts and determinations of the Plan Administrator shall be duly
recorded. All these records, together with other documents necessary for the
administration of the Plan, shall be preserved in the Plan Administrator's
custody.
Writing (handwriting, typing, printing), photostating, photographing,
microfilming, magnetic impulse, mechanical or electrical recording or other
forms of data compilation shall be acceptable means of keeping records.
SECTION 8.03--INFORMATION AVAILABLE.
Any Participant in the Plan or any Beneficiary may examine copies of the
Plan description, latest annual report, any bargaining agreement, this Plan, the
Group Contract or any other instrument under which the Plan was established or
is operated. The Plan Administrator shall maintain all of the items listed in
this section in its office, or in such other place or places as it may designate
in order to comply with governmental regulations. These items may be examined
during reasonable business hours. Upon the written request of a Participant or
Beneficiary receiving benefits under the Plan, the Plan Administrator will
furnish him with a copy of any of these items. The Plan Administrator may make a
reasonable charge to the requesting person for the copy.
SECTION 8.04--CLAIM AND APPEAL PROCEDURES.
A Claimant must submit any required forms and pertinent information when
making a claim for benefits under the Plan.
If a claim for benefits under the Plan is denied, the Plan Administrator
shall provide adequate written notice to the Claimant whose claim for benefits
under the Plan has been denied. The notice must be furnished within 90 days of
the date that the claim is received by the Plan Administrator. The Claimant
shall be notified in writing within this initial 90-day period if special
circumstances require an extension of time needed to process the claim and the
date by which the Plan Administrator's decision is expected to be rendered. The
written notice shall be furnished no later than 180 days after the date the
claim was received by the Plan Administrator.
The Plan Administrator's notice to the Claimant shall specify the reason
for the denial; specify references to pertinent Plan provisions on which denial
is based; describe any additional material and information needed for the
Claimant to perfect his claim for benefits; explain why the material and
information is needed; inform the Claimant that any appeal he wishes to make
must be in writing to the Plan Administrator within 60 days after receipt of the
Plan Administrator's notice of denial of benefits and that failure to make the
written appeal within such 60-day period shall render the Plan Administrator's
determination of such denial final, binding and conclusive.
ARTICLE VIII
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If the Claimant appeals to the Plan Administrator, the Claimant, or his
authorized representative, may submit in writing whatever issues and comments
the Claimant, or his representative, feels are pertinent. The Claimant, or his
authorized representative may review pertinent Plan documents. The Plan
Administrator shall reexamine all facts related to the appeal and make a final
determination as to whether the denial of benefits is justified under the
circumstances. The Plan Administrator shall advise the Claimant of its decision
within 60 days of his written request for review, unless special circumstances
(such as a hearing) would make rendering a decision within the 60-day limit
unfeasible. The Claimant must be notified within the 60-day limit if an
extension is necessary. The Plan Administrator shall render a decision on a
claim for benefits no later than 120 days after the request for review is
received.
SECTION 8.05--UNCLAIMED VESTED ACCOUNT PROCEDURE.
At the time the Participant's Vested Account is distributable to the
Participant, spouse or Beneficiary without his consent according to the
provisions of Article VI or Article IX, the Plan Administrator, by certified or
registered mail addressed to his last known address and in accordance with the
notice requirements of Article VI, will notify him of his entitlement to a
benefit. If the Participant, spouse or Beneficiary fails to claim the Vested
Account or make his whereabouts known in writing within six months from the date
of mailing the notice, the Plan Administrator may treat such unclaimed Vested
Account as a forfeiture and apply it according to the forfeiture provisions of
Article III. If Article III contains no forfeiture provisions, such amount will
be applied to reduce the earliest Employer Contributions due after the
forfeiture arises.
If a Participant's Vested Account is forfeited according to the
provisions of the above paragraph and the Participant, his spouse or his
Beneficiary at any time make a claim for benefits, the forfeited Vested Account
shall be reinstated, unadjusted for any gains or losses occurring after the date
it was forfeited. The reinstated Vested Account shall then be distributed to the
Participant, spouse or Beneficiary according to the preceding provisions of the
Plan.
SECTION 8.06--DELEGATION OF AUTHORITY.
All or any part of the administrative duties and responsibilities under
this article may be delegated by the Plan Administrator to a retirement
committee. The duties and responsibilities of the retirement committee shall be
set out in a separate written agreement.
ARTICLE VIII
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ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01--AMENDMENTS.
The Employer may amend this Plan at any time, including any remedial
retroactive changes (within the specified period of time as may be determined by
Internal Revenue Service regulations) to comply with the requirements of any law
or regulation issued by any governmental agency to which the Employer is
subject. An amendment may not diminish or adversely affect any accrued interest
or benefit of Participants or their Beneficiaries or eliminate an optional form
of distribution with respect to benefits attributable to service before the
amendment nor allow reversion or diversion of Plan assets to the Employer at any
time, except as may be necessary to comply with the requirements of any law or
regulation issued by any governmental agency to which the Employer is subject.
No amendment to this Plan shall be effective to the extent that it has the
effect of decreasing a Participant's accrued benefit. However, a Participant's
Account may be reduced to the extent permitted under Code Section 412(c)(8). For
purposes of this paragraph, a Plan amendment which has the effect of decreasing
a Participant's Account or eliminating an optional form of benefit, with respect
to benefits attributable to service before the amendment shall be treated as
reducing an accrued benefit. Furthermore, if the vesting schedule of the Plan is
amended, in the case of an Employee who is a Participant as of the later of the
date such amendment is adopted or the date it becomes effective, the
nonforfeitable percentage (determined as of such date) of such Employee's
employer-derived accrued benefit will not be less than his percentage computed
under the Plan without regard to such amendment.
An amendment shall not decrease a Participant's vested interest in the
Plan. If an amendment to the Plan, or a deemed amendment in the case of a change
in top-heavy status of the Plan as provided in the MODIFICATION OF VESTING
REQUIREMENTS SECTION of Article X, changes the computation of the percentage
used to determine that portion of a Participant's Account attributable to
Employer Contributions which is nonforfeitable (whether directly or indirectly),
each Participant or former Participant
(a) who has completed at least three Years of Service on the date the
election period described below ends (five Years of Service if
the Participant does not have at least one Hour-of-Service in a
Plan Year beginning after December 31, 1988) and
(b) whose nonforfeitable percentage will be determined on any date
after the date of the change
may elect, during the election period, to have the nonforfeitable percentage of
his Account that results from Employer Contributions determined without regard
to the amendment. This election may not be revoked. An election does not need to
be provided for any Participant or former Participant whose nonforfeitable
percentage, determined according to the Plan provisions as changed, cannot at
any time be less than the percentage determined without regard to such change.
The election period shall begin no later than the date the Plan amendment is
adopted, or deemed adopted in the case of a change in the top-heavy status of
the Plan, and end no earlier than the sixtieth day after the latest of the date
the amendment is adopted (deemed adopted) or becomes effective, or the date the
Participant is issued written notice of the amendment (deemed amendment) by the
Employer or the Plan Administrator.
ARTICLE IX
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SECTION 9.02--DIRECT ROLLOVERS.
This section applies to distributions made on or after January 1, 1993.
Notwithstanding any provision of the Plan to the contrary that would otherwise
limit a Distributee's election under this section, a 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.
SECTION 9.03--MERGERS AND DIRECT TRANSFERS.
The Plan may not be merged or consolidated with, nor have its assets or
liabilities transferred to, any other retirement plan, unless each Participant
in the plan would (if the plan then terminated) receive a benefit immediately
after the merger, consolidation or transfer which is equal to or greater than
the benefit the Participant would have been entitled to receive immediately
before the merger, consolidation or transfer (if this Plan had then terminated).
The Employer may enter into merger agreements or direct transfer of assets
agreements with the employers under other retirement plans which are qualifiable
under Code Section 401(a), including an elective transfer, and may accept the
direct transfer of plan assets, or may transfer plan assets, as a party to any
such agreement. The Employer shall not consent to, or be a party to a merger,
consolidation or transfer of assets with a defined benefit plan if such action
would result in a defined benefit feature being maintained under this Plan.
The Plan may accept a direct transfer of plan assets on behalf of an
Eligible Employee. If the Eligible Employee is not an Active Participant when
the transfer is made, the Eligible Employee shall be deemed to be an Active
Participant only for the purpose of investment and distribution of the
transferred assets. Employer Contributions shall not be made for or allocated to
the Eligible Employee, until the time he meets all of the requirements to become
an Active Participant.
The Plan shall hold, administer and distribute the transferred assets as
a part of the Plan. The Plan shall maintain a separate account for the benefit
of the Employee on whose behalf the Plan accepted the transfer in order to
reflect the value of the transferred assets. Unless a transfer of assets to the
Plan is an elective transfer, the Plan shall apply the optional forms of benefit
protections described in the AMENDMENTS SECTION of Article IX to all transferred
assets. A transfer is elective if: (1) the transfer is voluntary, under a fully
informed election by the Participant; (2) the Participant has an alternative
that retains his Code Section 411(d)(6) protected benefits (including an option
to leave his benefit in the transferor plan, if that plan is not terminating);
(3) if the transferor plan is subject to Code Sections 401(a)(11) and 417, the
transfer satisfies the applicable spousal consent requirements of the Code; (4)
the notice requirements under Code Section 417, requiring a written explanation
with respect to an election not to receive benefits in the form of a qualified
joint and survivor annuity, are met with respect to the Participant and spousal
transfer election; (5) the Participant has a right to immediate distribution
from the transferor plan under provisions in the plan not inconsistent with Code
Section 401(a); (6) the transferred benefit is equal to the Participant's entire
nonforfeitable accrued benefit under the transferor plan, calculated to be at
least the greater of the single sum distribution provided by the transferor plan
(if any) or the present value of the Participant's accrued benefit under the
transferor plan payable at the plan's normal retirement age and calculated using
an interest rate subject to the restrictions of Code Section 417(e) and subject
to the overall limitations of Code Section 415; (7) the Participant has a 100%
nonforfeitable interest in the transferred benefit; and (8) the transfer
otherwise satisfies applicable Treasury regulations.
ARTICLE IX
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SECTION 9.04--PROVISIONS RELATING TO THE INSURER
AND OTHER PARTIES.
The obligations of an Insurer shall be governed solely by the provisions
of the Group Contract. The Insurer shall not be required to perform any act not
provided in or contrary to the provisions of the Group Contract. See the
CONSTRUCTION SECTION of this article.
Any issuer or distributor of investment contracts or securities is
governed solely by the terms of its policies, written investment contract,
prospectuses, security instruments, and any other written agreements entered
into with the Trustee.
Such Insurer, issuer or distributor is not a party to the Plan, nor
bound in any way by the Plan provisions. Such parties shall not be required to
look to the terms of this Plan, nor to determine whether the Employer, the Plan
Administrator, the Trustee, or the Named Fiduciary have the authority to act in
any particular manner or to make any contract or agreement.
Until notice of any amendment or termination of this Plan or a change in
Trustee has been received by the Insurer at its home office or an issuer or
distributor at their principal address, they are and shall be fully protected in
assuming that the Plan has not been amended or terminated and in dealing with
any party acting as Trustee according to the latest information which they have
received at their home office or principal address.
SECTION 9.05--EMPLOYMENT STATUS.
Nothing contained in this Plan gives an Employee the right to be
retained in the Employer's employ or to interfere with the Employer's right to
discharge any Employee.
SECTION 9.06--RIGHTS TO PLAN ASSETS.
No Employee shall have any right to or interest in any assets of the
Plan upon termination of his employment or otherwise except as specifically
provided under this Plan, and then only to the extent of the benefits payable to
such Employee in accordance with Plan provisions.
Any final payment or distribution to a Participant or his legal
representative or to any Beneficiaries, spouse or Contingent Annuitant of such
Participant under the Plan provisions shall be in full satisfaction of all
claims against the Plan, the Named Fiduciary, the Plan Administrator, the
Trustee, the Insurer, and the Employer arising under or by virtue of the Plan.
SECTION 9.07--BENEFICIARY.
Each Participant may name a Beneficiary to receive any death benefit
(other than any income payable to a Contingent Annuitant) that may arise out of
his participation in the Plan. The Participant may change his Beneficiary from
time to time. Unless a qualified election has been made, for purposes of
distributing any death benefits before Retirement Date, the Beneficiary of a
Participant who has a spouse who is entitled to a Qualified Preretirement
Survivor Annuity shall be the Participant's spouse. The Participant's
Beneficiary designation and any change of Beneficiary shall be subject to the
provisions of the ELECTION PROCEDURES SECTION of Article VI. It is the
responsibility of the Participant to give written notice to the Insurer of the
name of the Beneficiary on a form furnished for that purpose.
ARTICLE IX
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With the Employer's consent, the Plan Administrator may maintain records
of Beneficiary designations for Participants before their Retirement Dates. In
that event, the written designations made by Participants shall be filed with
the Plan Administrator. If a Participant dies before his Retirement Date, the
Plan Administrator shall certify to the Insurer the Beneficiary designation on
its records for the Participant.
If, at the death of a Participant, there is no Beneficiary named or
surviving, any death benefit under the Group Contract shall be paid under the
applicable provisions of the Group Contract.
SECTION 9.08--NONALIENATION OF BENEFITS.
Benefits payable under the Plan are not subject to the claims of any
creditor of any Participant, Beneficiary, spouse or Contingent Annuitant. A
Participant, Beneficiary, spouse or Contingent Annuitant does not have any
rights to alienate, anticipate, commute, pledge, encumber or assign any of such
benefits, except in the case of a loan as provided in the LOANS TO PARTICIPANTS
SECTION of Article V. The preceding sentences shall also apply to the creation,
assignment, or recognition of a right to any benefit payable with respect to a
Participant according to a domestic relations order, unless such order is
determined by the Plan Administrator to be a qualified domestic relations order,
as defined in Code Section 414(p), or any domestic relations order entered
before January 1, 1985.
SECTION 9.09--CONSTRUCTION.
The validity of the Plan or any of its provisions is determined under
and construed according to Federal law and, to the extent permissible, according
to the laws of the state in which the Employer has its principal office. In case
any provision of this Plan is held illegal or invalid for any reason, such
determination shall not affect the remaining provisions of this Plan, and the
Plan shall be construed and enforced as if the illegal or invalid provision had
never been included.
In the event of any conflict between the provisions of the Plan and the
terms of any contract or policy issued hereunder, the provisions of the Plan
control the operation and administration of the Plan.
SECTION 9.10--LEGAL ACTIONS.
The Plan, the Plan Administrator, the Trustee and the Named Fiduciary
are the necessary parties to any action or proceeding involving the assets held
with respect to the Plan or administration of the Plan or Trust. No person
employed by the Employer, no Participant, former Participant or their
Beneficiaries or any other person having or claiming to have an interest in the
Plan is entitled to any notice of process. A final judgment entered in any such
action or proceeding shall be binding and conclusive on all persons having or
claiming to have an interest in the Plan.
SECTION 9.11--SMALL AMOUNTS.
If the Vested Account of a Participant has never exceeded $3,500, the
entire Vested Account shall be payable in a single sum as of the earliest of his
Retirement Date, the date he dies, or the date he ceases to be an Employee for
any other reason. This is a small amounts payment. If a small amount is payable
as of the date the Participant dies, the small amounts payment shall be made to
the Participant's Beneficiary (spouse if the death benefit is payable to the
spouse). If a small amount is payable while the Participant is living, the small
amounts payment shall be made to the Participant. The small amounts payment is
in full settlement of all benefits otherwise payable. The service credited to a
Participant who is reemployed by the Employer is not diminished as a result of
receiving a small amounts payment.
ARTICLE IX
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No other small amounts payments shall be made.
SECTION 9.12--WORD USAGE.
The masculine gender, where used in this Plan, shall include the
feminine gender and the singular words as used in this Plan may include the
plural, unless the context indicates otherwise.
SECTION 9.13--TRANSFERS BETWEEN PLANS.
If an Employee previously participated in another plan of the Employer
which credited service under the elapsed time method for any purpose which under
this Plan is determined using the hours method, then the Employee's service
shall be equal to the sum of (a), (b) and (c) below:
(a) The number of whole years of service credited to him under the
other plan as of the date he became an Eligible Employee under
this Plan.
(b) One year or a part of a year of service for the applicable
service period in which he became an Eligible Employee if he is
credited with the required number of Hours-of-Service. If the
Employer does not have sufficient records to determine the
Employee's actual Hours-of-Service in that part of the service
period before the date he became an Eligible Employee, the
Hours-of-Service shall be determined using an equivalency. For
any month in which he would be required to be credited with one
Hour-of-Service, the Employee shall be deemed for purposes of
this section to be credited with 190 Hours-of-Service.
(c) The Employee's service determined under this Plan using the hours
method after the end of the applicable service period in which he
became an Eligible Employee.
If an Employee previously participated in another plan of the Employer
which credited service under the hours method for any purpose which under this
Plan is determined using the elapsed time method, then the Employee's service
shall be equal to the sum of (d), (e) and (f) below:
(d) The number of whole years of service credited to him under the
other plan as of the beginning of the applicable service period
under that plan in which he became an Eligible Employee under
this Plan.
(e) The greater of (1) the service that would be credited to him for
that entire service period using the elapsed time method or (2)
the service credited to him under the other plan as of the date
he became an Eligible Employee under this Plan.
(f) The Employee's service determined under this Plan using the
elapsed time method after the end of the applicable service
period under the other plan in which he became an Eligible
Employee.
Any modification of service contained in this Plan shall be applicable
to the service determined pursuant to this section.
If the Employee previously participated in the plan of a Controlled
Group member which credited service under a different method than is used in
this Plan, for purposes of determining eligibility and vesting the provisions
above shall apply as though the plan of the Controlled Group member were a plan
of the Employer.
ARTICLE IX
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ARTICLE X
TOP-HEAVY PLAN REQUIREMENTS
SECTION 10.01--APPLICATION.
The provisions of this article shall supersede all other provisions in
the Plan to the contrary.
For the purpose of applying the Top-heavy Plan requirements of this
article, all members of the Controlled Group shall be treated as one Employer.
The term Employer as used in this article shall be deemed to include all members
of the Controlled Group unless the term as used clearly indicates only the
Employer is meant.
The accrued benefit or account of a participant which results from
deductible voluntary contributions shall not be included for any purpose under
this article.
The minimum vesting and contribution provisions of the MODIFICATION OF
VESTING REQUIREMENTS and MODIFICATION OF CONTRIBUTIONS SECTIONS of Article X
shall not apply to any Employee who is included in a group of Employees covered
by a collective bargaining agreement which the Secretary of Labor finds to be a
collective bargaining agreement between employee representatives and one or more
employers, including the Employer, if there is evidence that retirement benefits
were the subject of good faith bargaining between such representatives. 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.
SECTION 10.02--DEFINITIONS.
The following terms are defined for purposes of this article.
AGGREGATION GROUP means
(a) each of the Employer's retirement plans in which a Key Employee
is a participant during the Year containing the Determination
Date or one of the four preceding Years,
(b) each of the Employer's other retirement plans which allows the
plan(s) described in (a) above to meet the nondiscrimination
requirement of Code Section 401(a)(4) or the minimum coverage
requirement of Code Section 410, and
(c) any of the Employer's other retirement plans not included in (a)
or (b) above which the Employer desires to include as part of the
Aggregation Group. Such a retirement plan shall be included only
if the Aggregation Group would continue to satisfy the
requirements of Code Section 401(a)(4) and Code Section 410.
The plans in (a) and (b) above constitute the "required" Aggregation
Group. The plans in (a), (b) and (c) above constitute the "permissive"
Aggregation Group.
COMPENSATION means, as to an Employee for any period, compensation as
defined in the CONTRIBUTION LIMITATION SECTION of Article III. For
purposes of determining who is a Key Employee, Compensation shall
include, in addition to compensation as defined in the CONTRIBUTION
LIMITATION SECTION of Article III, elective contributions.
ARTICLE X
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Elective contributions are amounts excludable from the Employee's gross
income under Code Sections 125, 402(e)(3), 402(h) or 403(b), and
contributed by the Employer, at the Employee's election, to a Code
Section 401(k) arrangement, a simplified employee pension, cafeteria
plan or tax-sheltered annuity.
For purposes of Compensation as defined in this section, Compensation
shall be limited to the maximum dollar amount, as adjusted, in the same
manner and in the same time as the Compensation defined in the
DEFINITION SECTION of Article I.
DETERMINATION DATE means as to this Plan for any Year, the last day of
the preceding Year. However, if there is no preceding Year, the
Determination Date is the last day of such Year.
KEY EMPLOYEE means any Employee or former Employee (including
Beneficiaries of deceased Employees) who at any time during the
determination period was
(a) one of the Employer's officers (subject to the maximum below)
whose Compensation (as defined in this section) for the Year
exceeds 50 percent of the dollar limitation under Code Section
415(b)(1)(A),
(b) one of the ten Employees who owns (or is considered to own, under
Code Section 318) more than a half percent ownership interest and
one of the largest interests in the Employer during any Year of
the determination period if such person's Compensation (as
defined in this section) for the Year exceeds the dollar
limitation under Code Section 415(c)(1)(A),
(c) a five-percent owner of the Employer, or
(d) a one-percent owner of the Employer whose Compensation (as
defined in this section) for the Year is more than $150,000.
Each member of the Controlled Group shall be treated as a separate
employer for purposes of determining ownership in the Employer.
The determination period is the Year containing the Determination Date
and the four preceding Years. If the Employer has fewer than 30
Employees, no more than three Employees shall be treated as Key
Employees because they are officers. If the Employer has between 30 and
500 Employees, no more than ten percent of the Employer's Employees (if
not an integer, increased to the next integer) shall be treated as Key
Employees because they are officers. In no event will more than 50
Employees be treated as Key Employees because they are officers if the
Employer has 500 or more Employees. The number of Employees for any Plan
Year is the greatest number of Employees during the determination
period. Officers who are employees described in Code Section 414(q)(8)
shall be excluded. If the Employer has more than the maximum number of
officers to be treated as Key Employees, the officers shall be ranked by
amount of annual Compensation (as defined in this section), and those
with the greater amount of annual Compensation during the determination
period shall be treated as Key Employees. To determine the ten Employees
owning the largest interests in the Employer, if more than one Employee
has the same ownership interest, the Employee(s) having the greater
annual Compensation shall be treated as owning the larger interest(s).
The determination of who is a Key Employee shall be made according to
Code Section 416(i)(1) and the regulations thereunder.
NON-KEY EMPLOYEE means a person who is a non-key employee within the
meaning of Code Section 416 and regulations thereunder.
ARTICLE X
73
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PRESENT VALUE means the present value of a participant's accrued benefit
under a defined benefit plan as of his normal retirement age (attained
age if later) or, if the plan provides non-proportional subsidies, the
age at which the benefit is most valuable. The accrued benefit of any
Employee (other than a Key Employee) shall be determined under the
method which is used for accrual purposes for all plans of the Employer
or if there is no one method which is used for accrual purposes for all
plans of the Employer, as if such benefit accrued not more rapidly than
the slowest accrual rate permitted under Code Section 411(b)(1)(C). For
purposes of establishing Present Value, any benefit shall be discounted
only for 7.5% interest and mortality according to the 1971 Group Annuity
Table (Male) without the 7% margin but with projection by Scale E from
1971 to the later of (a) 1974, or (b) the year determined by adding the
age to 1920, and wherein for females the male age six years younger is
used. If the Present Value of accrued benefits is determined for a
participant under more than one defined benefit plan included in the
Aggregation Group, all such plans shall use the same actuarial
assumptions to determine the Present Value.
TOP-HEAVY PLAN means a plan which is a top-heavy plan for any plan year
beginning after December 31, 1983. This Plan shall be a Top-heavy Plan
if
(a) the Top-heavy Ratio for this Plan alone exceeds 60 percent and
this Plan is not part of any required Aggregation Group or
permissive Aggregation Group.
(b) this Plan is a part of a required Aggregation Group, but not part
of a permissive Aggregation Group, and the Top-heavy Ratio for
the required Aggregation Group exceeds 60 percent.
(c) this Plan is a part of a required Aggregation Group and part of a
permissive Aggregation Group and the Top-heavy Ratio for the
permissive Aggregation Group exceeds 60 percent.
TOP-HEAVY RATIO means the ratio calculated below for this Plan or for
the Aggregation Group.
(a) If the Employer maintains one or more defined contribution plans
(including any simplified employee pension plan) and the
Employer has not maintained any defined benefit plan which
during the five-year period ending on the determination date has
or has had accrued benefits, the Top-heavy Ratio for this Plan
alone or for the required or permissive Aggregation Group as
appropriate is a fraction, the numerator of which is the sum of
the account balances of all Key Employees as of the
determination date and the denominator of which is the sum of
all account balances of all employees as of the determination
date. Both the numerator and denominator of the Top-heavy Ratio
are adjusted for any distribution of an account balance
(including those made from terminated plan(s) of the Employer
which would have been part of the required Aggregation Group had
such plan(s) not been terminated) made in the five-year period
ending on the determination date. Both the numerator and
denominator of the Top-heavy Ratio are increased to reflect any
contribution not actually made as of the Determination Date, but
which is required to be taken into account on that date under
Code Section 416 and the regulations thereunder.
(b) 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 five-year period ending on the
determination date has or has had 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 the account balances under the defined contribution plan(s)
of all Key Employees and the Present Value of accrued benefits
under the defined benefit plan(s) for all Key Employees, and the
denominator of which is the sum of the account balances under
the defined contribution plan(s) for all employees and the
Present Value of accrued benefits under the defined benefit
plans for all employees. Both the numerator
ARTICLE X
74
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and denominator of the Top-heavy Ratio are adjusted for any
distribution of an account balance or an accrued benefit
(including those made from terminated plan(s) of the Employer
which would have been part of the required Aggregation Group had
such plan(s) not been terminated) made in the five-year period
ending on the determination date.
(c) For purposes of (a) and (b) above, the value of account balances
and the Present Value of accrued benefits will be determined as
of the most recent valuation date that falls within or ends with
the 12-month period ending on the determination date, except as
provided in Code Section 416 and the regulations thereunder for
the first and second plan years of a defined benefit plan. The
account balances and accrued benefits of an employee who is not
a Key Employee but who was a Key Employee in a prior year will
be disregarded. The calculation of the Top-heavy Ratio and the
extent to which distributions, rollovers and transfers during
the five-year period ending on the determination date are to be
taken into account, shall be determined according to the
provisions of Code Section 416 and regulations thereunder. The
account balances and accrued benefits of an individual who has
performed no service for the Employer during the five-year
period ending on the determination date shall be excluded from
the Top-heavy Ratio until the time the individual again performs
service for the Employer. 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.
Account, as used in this definition, means the value of an employee's
account under one of the Employer's retirement plans on the latest
valuation date. In the case of a money purchase plan or target benefit
plan, such value shall be adjusted to include any contributions made for
or by the employee after the valuation date and on or before such
determination date or due to be made as of such determination date but
not yet forwarded to the insurer or trustee. In the case of a profit
sharing plan, such value shall be adjusted to include any contributions
made for or by the employee after the valuation date and on or before
such determination date. During the first Year of any profit sharing
plan such adjustment in value shall include contributions made after
such determination date that are allocated as of a date in such Year.
The nondeductible employee contributions which an employee makes under a
defined benefit plan of the Employer shall be treated as if they were
contributions under a separate defined contribution plan.
VALUATION DATE means, as to this Plan, the last day of the last calendar
month ending in a Year.
YEAR means the Plan Year unless another year is specified by the
Employer in a separate written resolution in accordance with regulations
issued by the Secretary of the Treasury or his delegate.
SECTION 10.03--MODIFICATION OF VESTING REQUIREMENTS.
If a Participant's Vesting Percentage determined under Article I is not
at least as great as his Vesting Percentage would be if it were determined under
a schedule permitted in Code Section 416, the following shall apply. During any
Year in which the Plan is a Top-heavy Plan, the Participant's Vesting Percentage
shall be the greater of the Vesting Percentage determined under Article I or the
schedule below.
VESTING SERVICE NONFORFEITABLE
(whole years) PERCENTAGE
Less than 2 0
2 20
ARTICLE X
75
<PAGE> 77
3 40
4 60
5 80
6 or more 100
The schedule above shall not apply to Participants who are not credited
with an Hour-of-Service after the Plan first becomes a Top-heavy Plan. The
Vesting Percentage determined above applies to all of the Participant's Account
resulting from Employer Contributions, including Contributions the Employer
makes before the TEFRA Compliance Date or when the Plan is not a Top-heavy Plan.
If, in a later Year, this Plan is not a Top-heavy Plan, a Participant's
Vesting Percentage shall be determined under Article I. A Participant's Vesting
Percentage determined under either Article I or the schedule above shall never
be reduced and the election procedures of the AMENDMENTS SECTION of Article IX
shall apply when changing to or from the schedule as though the automatic change
were the result of an amendment.
The part of the Participant's Vested Account resulting from the minimum
contributions required pursuant to the MODIFICATION OF CONTRIBUTIONS SECTION of
Article X shall not be forfeited because of a period of reemployment after
benefit payments have begun.
SECTION 10.04--MODIFICATION OF CONTRIBUTIONS.
During any Year in which this Plan is a Top-heavy Plan, the Employer
shall make a minimum contribution or allocation on the last day of the Year for
each person who is a Non-key Employee on that day and who either was or could
have been an Active Participant during the Year. A Non-key Employee is not
required to have a minimum number of hours-of-service or minimum amount of
Compensation, or to have had any Elective Deferral Contributions made for him in
order to be entitled to this minimum. The minimum contribution or allocation for
such person shall be equal to the lesser of (a) or (b) below:
(a) Three percent of such person's Compensation (as defined in this
article).
(b) The "highest percentage" of Compensation (as defined in this
article) for such Year at which the Employer's contributions are
made for or allocated to any Key Employee. The highest percentage
shall be determined by dividing the Employer Contributions made
for or allocated to each Key Employee during such Year by the
amount of his Compensation (as defined in this article), which is
not more than the maximum set out above, and selecting the
greatest quotient (expressed as a percentage). To determine the
highest percentage, all of the Employer's defined contribution
plans within the Aggregation Group shall be treated as one plan.
The provisions of this paragraph shall not apply if this Plan
and a defined benefit plan of the Employer are required to be
included in the Aggregation Group and this Plan enables the
defined benefit plan to meet the requirements of Code Section
401(a)(4) or Code Section 410.
If the Employer's contributions and allocations otherwise required under
the defined contribution plan(s) are at least equal to the minimum above, no
additional contribution or reallocation shall be required. If the Employer's
contributions and allocations are less than the minimum above and Employer
Contributions under this Plan are allocated to Participants, any Employer
Contributions (other than those which are allocated on the basis of the amount
made for such person) shall be reallocated to provide the minimum. The remaining
Contributions shall be allocated as provided in the preceding articles of this
Plan taking into account any amount which was reallocated to provide the
minimum. If the Employer's total contributions and allocations are less than the
minimum above after any reallocation provided above, the Employer shall
contribute the difference for the Year.
ARTICLE X
76
<PAGE> 78
The minimum contribution or allocation applies to all of the Employer's
defined contribution plans in the aggregate which are Top-heavy Plans. If an
additional contribution or allocation is required to meet the minimum above, it
shall be provided in this Plan.
A minimum allocation under a profit sharing plan shall be made without
regard to whether or not the Employer has profits.
If a person who is otherwise entitled to a minimum contribution or
allocation above is also covered under a defined benefit plan of the Employer's
which is a Top-heavy Plan during that same Year, the minimum benefits for him
shall not be duplicated. The defined benefit plan shall provide an annual
benefit for him on, or adjusted to, a straight life basis of the lesser of (c)
two percent of his average pay multiplied by his years of service or (d) twenty
percent of his average pay. Average pay and years of service shall have the
meaning set forth in such defined benefit plan for this purpose.
For purposes of this section, any employer contribution made according
to a salary reduction or similar arrangement shall not apply before the first
Yearly Date in 1985. On and after the first Yearly Date in 1989, any such
employer contributions and employer contributions which are matching
contributions, as defined in Code Section 401(m), shall not apply in determining
if the minimum contribution requirement has been met, but shall apply in
determining the minimum contribution required. Forfeitures credited to a
Participant's Account are treated as employer contributions.
The requirements of this section shall be met without regard to
contributions under Chapter 2 of the Code (relating to tax on self-employment),
Chapter 21 of the Code (relating to Federal Insurance Contributions Act), Title
II of the Social Security Act or any other Federal or state law.
SECTION 10.05--MODIFICATION OF CONTRIBUTION LIMITATION.
If the provisions of subsection (e) of the CONTRIBUTION LIMITATION
SECTION of Article III are applicable for any Limitation Year during which this
Plan is a Top-heavy Plan, the benefit limitations shall be modified. The
definitions of Defined Benefit Plan Fraction and Defined Contribution Plan
Fraction in the CONTRIBUTION LIMITATION SECTION of Article III shall be modified
by substituting "1.0" in lieu of "1.25." The optional denominator for
determining the Defined Contribution Plan Fraction shall be modified by
substituting "$41,500" in lieu of "$51,875." In addition, an adjustment shall be
made to the numerator of the Defined Contribution Plan Fraction. The adjustment
is a reduction of that numerator similar to the modification of the Defined
Contribution Plan Fraction described in the CONTRIBUTION LIMITATION SECTION of
Article III, and shall be made with respect to the last Plan Year beginning
before January 1, 1984.
The modifications in the paragraph above shall not apply with respect to
a Participant so long as employer contributions, forfeitures or nondeductible
employee contributions are not credited to his account under this or any of the
Employer's other defined contribution plans and benefits do not accrue for such
Participant under the Employer's defined benefit plan(s), until the sum of his
Defined Contribution and Defined Benefit Plan Fractions is less than 1.0.
ARTICLE X
77
<PAGE> 79
By executing this Plan, the Primary Employer acknowledges having
counseled to the extent necessary with selected legal and tax advisors regarding
the Plan's legal and tax implications.
Executed this 27th day of June, 1997.
BARNETT INC.
By: /s/ Paul Janke
-----------------------------------------
Trustee
-----------------------------------------
Title
PLAN EXECUTION
78
<PAGE> 1
EXHIBIT 5.1
OPINION OF SHEREFF, FRIEDMAN, HOFFMAN & GOODMAN, LLP
June 30, 1997
Barnett Inc.
3333 Lenox Avenue
Jacksonville, Florida 32254
Ladies and Gentlemen:
On the date hereof, Barnett Inc., a Delaware corporation (the
"Company"), intends to transmit for filing with the Securities and Exchange
Commission, a Registration Statement on Form S-8 (the "Registration Statement"),
relating to an aggregate of up to 300,000 shares (the "Shares") of common stock,
par value $.01 per share (the "Common Stock"), of the Company which may be
issued from time to time pursuant to the Barnett Inc. Profit Sharing and 401(k)
Retirement Plan (the "Plan"). This opinion is an exhibit to the Registration
Statement.
We have at times acted as counsel to the Company with respect
to certain corporate and securities matters, and in such capacity we are
familiar with the various corporate and other proceedings taken by or on behalf
of the Company in connection with the proposed offer and sale of the Shares as
contemplated by the Registration Statement. We have examined copies (in each
case signed, certified or otherwise proven to our satisfaction to be genuine) of
the Company's Certificate of Incorporation as presently in effect, its By-Laws
as presently in effect, minutes and other instruments evidencing actions taken
by its directors and stockholders, the Plan and such other documents and
instruments relating to the Company and the proposed offering as we have deemed
necessary under the circumstances. Insofar as this opinion relates to securities
to be issued in the future, we have assumed that all applicable laws, rules and
regulations in effect at the time of such issuance are the same as such laws,
rules and regulations in effect as of the date hereof.
We note that we are members of the Bar of the State of New
York and that we are not admitted to the Bar in the State of Delaware. To the
extent that the opinions expressed herein involve the law of the State of
Delaware, such opinions are based solely upon our reading of the Delaware
General Corporation Law as reported by CSC Networks Prentice-Hall Legal and
Financial Services.
Based on and subject to the foregoing, and subject to and in
reliance on the accuracy and completeness of the information relevant thereto
provided to us, it is our opinion that the Shares to be issued pursuant to the
Plan have been duly authorized and, subject to the effectiveness of the
Registration Statement and compliance with applicable state securities laws,
when issued in
<PAGE> 2
Barnett Inc.
June 30, 1997
Page 2
accordance with the terms set forth in the Plan, will be legally and validly
issued, fully paid and nonassessable.
It should be understood that nothing in this opinion is
intended to apply to any disposition of the Shares which any participant in the
Plan might propose to make in the future.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and as an exhibit to any filing made by the
Company under the securities or "Blue Sky" laws of any state.
This opinion is furnished to you in connection with the filing
of the Registration Statement, and is not to be used, circulated, quoted or
otherwise relied upon for any other purpose, except as expressly provided in the
preceding paragraph, without our express written consent, and no party other
than you is entitled to rely on it. This opinion is rendered to you as of the
date hereof and we undertake no obligation to advise you of any change, whether
legal or factual, after the date hereof.
Very truly yours,
SHEREFF, FRIEDMAN, HOFFMAN & GOODMAN, LLP
SFH&G, LLP:SMZ:DSR:KLL
<PAGE> 1
[ARTHUR ANDERSEN LOGO]
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated August 2, 1996
included in Barnett Inc.'s Form 10-K for the year ended June 30, 1996 and to all
references to our Firm included in this Registration Statement.
/s/ Arthur Andersen LLP
Cleveland, Ohio,
June 30, 1997
