<PAGE> 1
As filed with the Securities and Exchange Commission on January 9, 1997
Registration No. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-8
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
---------------
LIBBEY INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 34-1559357
(State of incorporation) (I.R.S. Employer Identification No.)
P.O. BOX 10060
300 MADISON AVENUE
TOLEDO, OHIO 43699-0060
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
LIBBEY INC. LONG-TERM SAVINGS PLAN & TRUST
(FULL TITLE OF THE PLAN)
------------------
Arthur H. Smith Copies to: Carl E. Witschy, Esq.
Vice President, General Counsel and Secretary Latham & Watkins
Libbey Inc. 233 South Wacker, Suite 5800
P.O. Box 10060 Chicago, Illinois 60606
300 Madison Avenue (312) 876-7700
Toledo, Ohio 43699-0060
(419) 325-2100
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
================================================================================================================================
Proposed maximum Proposed maximum
Amount to be offering price per aggregate offering Amount of registration
Title of securities to be registered (1) registered share (2) price fee
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.01 per share 200,000 shares $27.3125 $5,462,500 $1,655.30
================================================================================================================================
<FN>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
as amended (the "Securities Act"), this Registration Statement also
covers an indeterminate amount of interests to be offered or sold
pursuant to the employee benefit plan described herein.
(2) For purposes of computing the registration fee only. Pursuant to Rule
457(h), the Proposed Maximum Offering Price Per Share is based upon the
average of the high and low prices reported on the New York Stock
Exchange for the Company's Common Stock on January 6, 1997 as set forth
in Rule 457(c).
</TABLE>
<PAGE> 2
PART II
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which previously have been filed by Libbey
Inc. (the "Company") with the Securities and Exchange Commission (the
"Commission"), are incorporated herein by reference and made a part hereof:
(a) The Company's annual report on Form 10-K for the year ended
December 31, 1995;
(b) All other reports filed by the Company pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") since December 31, 1995.
(c) The description of the Company's Common Stock contained in its
Registration Statement on Form S-1 as filed with the
Commission on April 23, 1993 and all amendments thereto.
All reports and other documents subsequently filed by the Company or
the Libbey Inc. Long-Term Savings Plan & Trust (the "Plan") pursuant to Sections
13, 14 and 15(d) of the Exchange Act prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities remaining unsold, shall be deemed to be
incorporated by reference herein and to be part hereof from the date of the
filing of such reports and documents.
For purposes of this Registration Statement, any statement contained in
a document incorporated or deemed to be incorporated herein by reference shall
be deemed to be modified or superseded to the extent that a statement contained
herein or in any other subsequently filed document which also is or is deemed to
be incorporated herein by reference modifies or supersedes such statement in
such document. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Reference is made to Section 102(b)(7) of the Delaware General
Corporation law (the "DGCL"), which enables a corporation in its original
certificate of incorporation or an amendment thereto to eliminate or limit the
personal liability of a director for violations of the director's fiduciary
duty, except (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii)
pursuant to Section 174 of the DGCL (providing for liability of directors for
unlawful payment of dividends or unlawful stock purchases or redemptions) or
(iv) for any transaction from which a director derived an improper personal
benefit.
Reference also is made to Section 145 of the DGCL which provides that a
corporation may indemnify any persons, including officers and directors, who
are, or are threatened to be made, parties to
2
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any threatened, pending or completed legal action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of such corporation), by reason of the fact that such person was an
officer, director, employee or agent of such corporation, or is or was serving
at the request of such corporation as a director, officer, employee or agent of
another corporation or enterprise. The indemnity may include expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding, provided such officer, director, employee or agent acted in good
faith and in a manner he or she reasonably believed to be in or not opposed to
the corporation's best interests and, for criminal proceedings, had no
reasonable cause to believe that his or her conduct was unlawful. A Delaware
corporation may indemnify officers and directors in an action by or in the right
of the corporation under the same conditions, except that no indemnification is
permitted without judicial approval if the officer or director is adjudged to be
liable to the corporation. Where an officer or director is successful on the
merits or otherwise in the defense of any action referred to above, the
corporation must indemnify him or her against the expenses which such officer or
director actually and reasonably incurred.
The Certificate of Incorporation and the Bylaws of the Company provide
for indemnification of officers and directors to the fullest extent permitted by
applicable law.
The Company may enter into contracts with its officers and directors
requiring the Company to indemnify such persons and to advance litigation
expenses to such persons to the fullest extent permitted by applicable law.
Delaware law presently permits a Delaware corporation (i) to indemnify any
officer or director in any third-party or governmental actions against them for
expenses, judgments, fines and amounts paid in settlement and, in derivative
actions, for expenses, if the indemnitee acted in good faith and in the manner
he or she believed to be in or not opposed to the best interest of such
corporation, and (ii) to advance expenses in any action, provided that such
officer or director agrees to reimburse the corporation if it is ultimately
determined that he or she was not entitled to indemnification. The contracts
also require the Company to (i) indemnify such officers and directors upon
receipt of an opinion of counsel in certain cases, (ii) pay indemnity demands
pending a determination of entitlement thereto, and (iii) demonstrate, in any
action brought thereunder, that such officer or director was not entitled to
indemnification under applicable law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The undersigned registrant hereby undertakes to submit the Plan and any
amendments thereto to the Internal Revenue Service ("IRS") in order to secure a
determination letter in a timely manner and will make all changes required by
the IRS in order to qualify the Plan under Section 401 of the Internal Revenue
Code.
See Index to Exhibits.
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:
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(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the 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, Form S-8 or Form F-8, and the information required
to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or
furnished to the Commission by the registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act, 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 purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) 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 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
Securities 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 incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Toledo, Ohio on this 9th day of January, 1997.
Libbey Inc.
By: /s/ Arthur H. Smith
-----------------------------------------
Arthur H. Smith
Vice-President, General Counsel and
Secretary
POWER OF ATTORNEY
We the undersigned directors and officers of Libbey Inc. and
each of us, do hereby constitute and appoint Arthur H. Smith and Kenneth G.
Wilkes, or either of them, our true and lawful attorneys and agents, each with
full power of substitution, to do any and all acts and things in our name and
behalf in our capacities as directors and officers and to execute any and all
instruments for us and in our names in the capacities listed below, which
attorneys and agents or any of them may deem necessary or advisable to enable
said corporation to comply with the Securities Act of 1933, as amended, and any
rules, regulations, and requirements of the Securities and Exchange Commission,
in connection with this Registration Statement, including specifically, but
without limitation, power and authority to sign for us or any of us in our names
in the capacities indicated below, any and all amendments (including
post-effective amendments) hereto; and we do hereby ratify and confirm all that
said attorneys and agents, or their substitute or substitutes, or any of them,
shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ John F. Meier Chairman of the Board and January 9, 1997
- ------------------------- Chief Executive Officer
John F. Meier
/s/ Richard I. Reynolds Executive Vice President, January 9, 1997
- ------------------------- Chief Operating Officer and
Richard I. Reynolds Director
/s/ Kenneth G. Wilkes Vice President, Chief January 9, 1997
- ------------------------- Financial Officer and
Kenneth G. Wilkes Treasurer
/s/ William A. Foley Director January 6, 1997
- -------------------------
William A. Foley
/s/ Joseph H. Lemieux Director January 7, 1997
- -------------------------
Joseph H. Lemieux
</TABLE>
S-1
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<TABLE>
<CAPTION>
<S> <C> <C>
Director
- -----------------------------
Terry L. Wilkison
Director
- -----------------------------
Peter C. McC. Howell
/s/ Gary L. Moreau Director January 7, 1997
- -----------------------------
Gary L. Moreau
</TABLE>
S-2
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PLAN SIGNATURE
Pursuant to the requirements of the Securities Act, the Libbey Inc.
Long-Term Savings Plan & Trust has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Toledo, Ohio, on the 9th day of January, 1997.
LIBBEY INC. LONG-TERM SAVINGS PLAN & TRUST
By: Plan Administrator
By: /s/ George W. Templin
-------------------------------
George W. Templin
Libbey Inc. Employee Benefits Committee
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
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<S> <C>
4(a) Restated Certificate of Incorporation of the Company (filed as
Exhibit 3.1 to the Registration Statement of the Company on
Form S-1 (No. 33-61508) and incorporated herein by reference).
4(b) Restated By-laws of the Company (filed as Exhibit 3.2 to the
Registration Statement of the Company on Form S-1 (No.
33-61508) and incorporated herein by reference).
4(c) Libbey Inc. Long-Term Savings Plan & Trust.
4(d) Adoption Agreement for Libbey Inc. Long-Term Savings Plan &
Trust.
5 Opinion of Latham & Watkins regarding the legality of the
securities being offered.
23(a) Consent of Ernst & Young LLP.
23(b) Consent of Latham & Watkins (included in that opinion filed as
Exhibit 5).
24 Power of Attorney (included in the signature pages of the
Registration Statement).
</TABLE>
<PAGE> 1
Exhibit 4(c)
PRISM(R) PROTOTYPE RETIREMENT PLAN AND TRUST
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. Unless the context indicates otherwise, the following terms,
when used herein with initial capital letters, shall have the meanings set
forth below:
(A) ACCOUNTING DATE: The date which is the last business day of each month
of the Employer's Plan Year or such other date as may be agreed upon
between the Employer and the Trustee, but only if the Employer has
specifically requested the Trustee to prepare an accounting on or before
such date. Notwithstanding the foregoing, the Trustee shall value the
assets held in the Trust on each business day that the Trustee and the
New York Stock Exchange are open for business.
(B) ADOPTION AGREEMENT: The Adoption Agreement adopting this Plan which has
been executed by the Employer and accepted by the Trustee, including any
amendment thereof, which is incorporated herein by reference.
(C) BASIC PLAN DOCUMENT: This document, which, in connection with the
Adoption Agreement forms the Plan.
(D) BENEFICIARY: The person or persons to whom a deceased Participant's
benefits are payable under the Plan.
(E) BREAK IN SERVICE: A 12-consecutive month period during which the
Participant does not complete more than one-half of the Hours of Service
with the Employer required for a Year of Service, as elected in the
Adoption Agreement. For eligibility purposes, the initial 12-consecutive
month period is the period beginning on the Employees date of hire.
Subsequent 12-consecutive month periods for eligibility purposes will be
either the period ending on the annual anniversary of the Employee's
date of hire or the Plan Year, as selected in the Adoption Agreement.
For all other purposes, the 12-consecutive month period shall be the
Plan Year, or other computation period as selected in the Adoption
Agreement. If the elapsed time method of crediting service is elected in
the Adoption Agreement, "Break In Service" will mean a Period of
Severance of at least 12 consecutive months.
(F) CODE: The Internal Revenue Code of 1986, and amendments thereto.
(G) COMMITTEE: The Committee provided for in Article XI, which shall be a
Named Fiduciary as defined in the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"). To the extent that the Employer does
not appoint a Committee, the Employer shall have the duty of the day to
day administration of the Plan and shall be the Named Fiduciary for that
purpose.
(H) COMPENSATION: Compensation shall have the following various definitions,
as may be appropriate within the context of the Plan:
<PAGE> 2
(1) Compensation as that term is defined in Section 6.6(A) of the Plan.
For any Self-Employed Individual covered under the Plan,
Compensation will mean Earned Income. Compensation shall include
only that compensation which is actually paid to the Participant
during the determination period. Except as provided elsewhere in
this Plan, the determination period shall be the period elected by
the Employer in the Adoption Agreement. If the Employer makes no
election, the determination period shall be the Plan Year. For
purposes of allocations of Employer Profit Sharing or Matching
Contributions, the definition of Compensation in Section
6.6(A)(2)(a) shall be used, as modified in the Adoption Agreement.
Notwithstanding the above, if elected by the Employer in the
Adoption Agreement, Compensation for allocation purposes shall
include any amount which is contributed by the Employer pursuant to
a salary reduction agreement and which is not includible in the
gross income of the employee under Sections 125, 402(e)(3),
402(h)(1)(B) or 403(b) of the Code.
(2) For years beginning after December 31, 1988, and prior to January 1,
1994, the annual Compensation of each Participant taken into account
for determining all benefits provided under the Plan for any
determination period shall not exceed $200,000. This limitation
shall be adjusted by the Secretary at the same time and in the same
manner as under Section 415(d) of the Code except that the dollar
increase in effect on January 1 of any calendar year is effective
for plan years beginning in such calendar year and the first
adjustment to the $200,000 limitation is effective on January 1,
1990. After December 31, 1993, the annual Compensation of each
Participant taken into account for determining all benefits provided
under the Plan for any determination period shall not exceed
$150,000, or such other lesser amount as may be specified in the
Adoption Agreement. This limitation shall be adjusted by the
Secretary at the same time and in the same manner as under Section
415(d) of the Code. If a Plan determines Compensation on a period of
time that contains fewer than 12 calendar months, then the annual
Compensation limit is an amount equal to the annual Compensation
limit for the calendar year in which the Compensation period begins
multiplied by a ratio obtained by dividing the number of full months
in the period by 12.
In determining the Compensation of a Participant for purposes of
this limitation, the rules of Section 414(q)(6) of the Code shall
apply, except in applying such rules, the term "family" shall
include only the Spouse of the Participant and any lineal
descendants of the Participant who have not attained age 19 before
the close of the year. If, as a result of the application of such
rules the adjusted annual compensation limitation is exceeded, then
(except for purposes of determining the portion of Compensation up
to the integration level if this Plan provides for permitted
disparity), the limitation shall be prorated among the affected
individuals in proportion to each such individual's Compensation as
determined under this Section prior to the application of this
limitation.
If compensation for any prior determination period is taken into
account in determining an Employee's allocations or benefits for the
current determination period, the compensation for such prior year
is subject to the applicable annual compen-
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sation limit in effect for that prior year. For this purpose, for
years beginning before January 1, 1990, the applicable compensation
limit is $200,000. In addition, in determining allocations in plan
years beginning on or after January 1, 1994, the annual
compensation limit in effect for determination periods beginning
before that date is $150,000.
(I) DISABILITY: The inability to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment
which can be expected to result in death or which has lasted or can be
expected to last for a continuous period of not less than twelve (12)
months. The permanence and degree of such impairment shall be supported
by medical evidence. The Employer shall determine the existence of a
Disability based on its current disability policy, applied on a uniform
and nondiscriminatory basis.
(J) EARNED INCOME: The net earnings from self-employment in the trade or
business with respect to which the Plan is established, for which
personal services of the individual are a material income-producing
factor. Net earnings will be determined without regard to items not
included in gross income and the deductions allocable to such items. Net
earnings are reduced by contributions by the Employer to a qualified
Plan to the extent deductible under Section 404 of the Code. Net
earnings shall be determined with regard to the deduction allowed to the
taxpayer by Section 164(f) of the Code for taxable years beginning after
December 31, 1989.
(K) EARLY RETIREMENT DATE: The date specified in the Adoption Agreement at
which a participating Employee may receive an early retirement benefit.
(L) EFFECTIVE DATE: The date specified in the Adoption Agreement which shall
be the effective date of the provisions of this Plan, unless modified in
Item B(18) of the Adoption Agreement. If the Plan is a restatement of an
existing Plan, the original effective date of the Plan shall be as
specified in the Adoption Agreement.
(M) ELIGIBLE EMPLOYEE: Any Employee who is eligible to receive an Employer
contribution (including forfeitures), as defined in Item B(6) of the
Adoption Agreement.
(N) ELIGIBILITY COMPUTATION PERIOD: For purposes of determining Years of
Service and Breaks in Service for purposes of eligibility, the initial
Eligibility Computation Period is the 12-consecutive month period
beginning on the Employee's Employment Commencement Date.
(1) For plans in which the Eligibility Computation Periods commence on
the 12-consecutive month anniversary of the Employee's Employment
Commencement Date, the succeeding 12-consecutive month periods
commence with the first anniversary of the Employee's Employment
Commencement Date.
(2) For plans in which the Eligibility Computation Period shifts to the
Plan Year, the succeeding 12-consecutive month periods commence with
the first Plan Year which commences prior to the first anniversary
of the Employee's Employment Commencement Date regardless of whether
the Employee is entitled to be credited with number of Hours of
Service specified in the Adoption Agreement during the
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initial Eligibility Computation Period. An Employee who is credited
with number of Hours of Service specified in the Adoption Agreement
in both the initial Eligibility Computation Period and the first
Plan Year which commences prior to the first anniversary of the
Employee's initial Eligibility Computation Period will be credited
with two Years of Service for purposes of eligibility to
participate.
Years of Service and Breaks in Service will be measured on the same
Eligibility Computation Period.
(3) Notwithstanding any other provisions of this section, if the elapsed
time method of crediting service is elected in the Adoption
Agreement for purposes of eligibility, an Employee will receive
credit for the aggregate of all time periods completed (as may be
elected in the Adoption Agreement) beginning with the Employee's
Employment Commencement Date or Reemployment Commencement Date and
ending on the date a Break In Service begins. The Employee will
receive credit for any Period of Severance of less than 12
consecutive months.
(O) EMPLOYEE: Any employee, including any Self Employed Individual, of the
Employer maintaining the Plan or of any other employer required to be
aggregated with such Employer under Sections 414(b), (c), (m) or (o) of
the Code.
The term Employee shall also include any Leased Employee deemed to be an
Employee of any Employer described in the previous paragraph as provided
in Sections 414(n) or (o) of the Code. Page 4
(P) EMPLOYER: The Employer specified in the Adoption Agreement and any
successor to the business of the Employer establishing the Plan, which
shall be the Plan Administrator for purposes of Section 3(16) of ERISA,
a Named Fiduciary as defined in ERISA, and which may delegate all or any
part of its powers, duties and authorities in such capacity without
ceasing to be such Plan Administrator.
(Q) EMPLOYMENT COMMENCEMENT DATE: The date on which an Employee first
performs an Hour of Service for the Employer.
(R) ENTRY DATE: The date selected by the Employer in Item B(6)(d) of the
Adoption Agreement, which shall be:
(1) The Effective Date of the Plan, for any Employee who has satisfied
the eligibility requirements set forth in the Adoption Agreement;
(2) The first day of the month which coincides with or immediately
follows the date on which the Employee satisfies the eligibility
requirements set forth in the Adoption Agreement;
(3) The first day of the Plan Year or the fourth, seventh, or tenth
month of the Plan Year which coincides with or immediately follows
the date on which the Employee satisfies such eligibility
requirements;
PAGE 4
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(4) The first day of the Plan Year or the seventh month of the Plan Year
which coincides with or immediately follows the date on which the
Employee satisfies such eligibility requirements;
(5) The first day of the Plan Year, but only if the eligibility service
requirements specified in Item B(6)(d) are six months or less; or,
(6) As soon as practicable after the Employee satisfies such eligibility
requirements specified in the Adoption Agreement, but in no event
beyond the date which would be six months following the date on
which the Employee first completes the eligibility requirements
specified in the Adoption Agreement.
(S) ERISA: The Employee Retirement Income Security Act of 1974, as amended.
(T) HIGHLY COMPENSATED EMPLOYEE: The term Highly Compensated Employee
includes highly compensated active employees and highly compensated
former employees.
A highly compensated active employee includes any Employee who performs
service for the Employer during the determination year and who, during
the look-back year: (i) received Compensation from the Employer in
excess of $75,000 (as adjusted pursuant to Section 415(d) of the Code);
(ii) received Compensation from the Employer in excess of $50,000 (as
adjusted pursuant to Section 415(d) of the Code) and was a member of the
top-paid group for such year; or (iii) was an officer of the Employer
and received Compensation during such year that is greater than 50
percent of the dollar limitation in effect under section 415(b)(1)(A) of
the Code. The term Highly Compensated Employee also includes: (i)
Employees who are both described in the preceding sentence if the term
"determination year" is substituted for the term "look-back year" and
the Employee is one of the 100 Employees who receive the most
compensation from the Employer during the determination year; and (ii)
Employees who are 5 percent owners at any time during the look-back year
or determination year.
If no officer has satisfied the Compensation requirement of (iii) above
during either a determination year or look-back year, the highest paid
officer for such year shall be treated as a Highly Compensated Employee.
For this purpose, the determination year shall be the Plan Year. The
look-back year shall be the twelve-month period immediately preceding
the determination year. A highly compensated former employee includes
any Employee who separated from service (or was deemed to have
separated) prior to the determination year, performs no service for the
Employer during the determination year, and was a highly compensated
active employee for either the separation year or any determination year
ending on or after the Employee's 55th birthday.
If an Employee is, during a 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
PAGE 5
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treated as a single employee receiving Compensation and Plan
contributions or benefits equal to the sum of such Compensation and
contributions or benefits of the family member and 5 percent owner or
top-ten Highly Compensated Employee.
For purposes of this Section, family member includes the Spouse, lineal
ascendants and descendants of the employee or former employee and the
spouses of such lineal ascendants and descendants.
The determination of who is a Highly Compensated Employee, including
the determinations of the number and identity of Employees in the
top-paid group, the top 100 Employees, the number of Employees treated
as officers and the Compensation that is considered, will be made in
accordance with Section 414(q) of the Code and the regulations
thereunder.
(U) HOUR OF SERVICE:
(1) Each hour for which an Employee is paid, or entitled to payment, for
the performance of duties for the Employer. These hours shall be
credited to the Employee for the computation period in which the
duties are performed; and
(2) Each hour for which an Employee is paid, or entitled to payment, by
the Employer on account of a period of time during which no duties
are performed (irrespective of whether the employment relationship
has terminated) due to vacation, holiday, illness, incapacity
(including Disability), layoff, jury duty, military duty, or leave
of absence. No more than 501 Hours of Service shall be credited
under this paragraph for any single continuous period (whether or
not such period occurs in a single computation period). Hours under
this paragraph shall be calculated and credited pursuant to Section
2530.200b-2 of the Department of Labor Regulations which are
incorporated herein by reference; and
(3) 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 (1) or
subparagraph (2), as the case may be, and under this subparagraph
(3). These hours shall be credited to the Employee for the
computation period or periods to which the award or agreement
pertains rather than for the computation period in which the award,
agreement or payment is made.
Hours of Service will be credited for employment with other members
of an affiliated service group (under Section 414(m)), a controlled
group of corporations (under Section 414(b)), or a group of trades
or businesses under common control (under Section 414(c)) of which
the adopting Employer is a member, and any other entity required to
be aggregated with the Employer pursuant to Section 414(o).
Hours of Service will also be credited for any individual considered
an Employee for purposes of this Plan under Sections 414(n) or
414(o).
(4) Where the Employer maintains the Plan of a predecessor employer,
service for such predecessor employer shall be treated as service
for the Employer. If the Employer does not maintain the Plan of a
predecessor employer, the Plan does not credit
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service with the predecessor employer, unless the Employer
identifies the predecessor in its Adoption Agreement and specifies
the purposes for which the Plan will credit service with that
predecessor employer.
(5) Solely for purposes of determining whether a Break-in-Service, as
defined in Section 1.1(E), for participation and vesting purposes
has occurred in a computation period, an individual who is absent
from work for maternity or paternity reasons shall receive credit
for the Hours of Service which would otherwise have been credited to
such individual but for such absence, or in any case in which such
hours cannot be determined, 8 Hours of Service per day of such
absence. For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence (1) by reason of the
pregnancy of the individual, (2) by reason of a birth of a child of
the individual, (3) by reason of the placement of a child with the
individual in connection with the adoption of such child by such
individual, or (4) for purposes of caring for such child for a
period beginning immediately following such birth or placement. The
Hours of Service credited under this paragraph shall be credited (1)
in the computation period in which the absence begins if the
crediting is necessary to prevent a Break-in-Service in that period,
or (2) in all other cases, in the following computation period.
(6) Hours of Service will be determined on the basis of the method
selected in the Adoption Agreement.
(V) INVESTMENT FUND: One of the funds provided for in Section 10.7, and as
selected by the Employer, as a Named Fiduciary, on the Investment Fund
Designation portion of the Adoption Agreement.
(W) LEASED EMPLOYEE: Any person (other than an employee of the recipient)
who pursuant to an agreement between the recipient and any other person
("leasing organization") has performed services for the recipient (or
for the recipient and related persons determined in accordance with
Section 414(n)(6) of the Code) on a substantially full time basis for a
period of at least one year, and such services are of a type
historically performed by employees in the business field of the
recipient employer. Contributions or benefits provided a leased employee
by the leasing organization which are attributable to services performed
for the recipient employer shall be treated as provided by the recipient
employer.
A leased employee shall not be considered an employee of the recipient
if: (i) such employee is covered by a money purchase pension Plan
providing: (1) a nonintegrated employer contribution rate of at least 10
percent of compensation, as defined in Section 415(c)(3) of the Code,
but including amounts contributed pursuant to a salary reduction
agreement which are excludable from the employee's gross income under
Section 125, Section 402(e)(3), Section 402(h)(1)(B) or Section 403(b)
of the Code, (2) immediate participation, and (3) full and immediate
vesting; and (ii) leased employees do not constitute more than 20
percent of the recipient's nonhighly compensated workforce.
(X) NET PROFITS: Current and accumulated earnings of the Employer before
Federal and state taxes and contributions to this and any other
qualified Plan, determined by the Employer in accordance with generally
accepted accounting principles.
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(Y) NONHIGHLY COMPENSATED EMPLOYEE: An Employee of the Employer who is
neither a Highly Compensated Employee nor a Family Member.
(Z) NORMAL RETIREMENT DATE: The date specified in the Adoption Agreement at
which a participant shall become fully vested in his account balances,
as provided for in this document.
(AA) OWNER-EMPLOYEE: An individual who is a sole proprietor, or who is a
partner owning more than 10 percent of either the capital or profits
interest of the partnership.
(BB) PAIRED PLANS: The Employer has adopted Plan #001 and Plan # 003, both
using this basic Plan document, which constitutes a set of "paired
plans" as defined by the Internal Revenue Service in Revenue Procedure
89-9, or any successor thereto.
(CC) PARTICIPANT: A person who becomes eligible to participate in accordance
with the provisions of Article II, and whose participation has not been
terminated.
(DD) PERMITTED DISPARITY LEVEL: The level selected in the Adoption
Agreement, not to exceed the Taxable Wage Base in effect at the
beginning of the Plan Year. The Taxable Wage Base is the contribution
and benefit base under section 230 of the Social Security Act at the
beginning of the year.
(EE) PERIOD OF SERVICE: The period beginning on the Employee's Employment
Commencement Date or Reemployment Commencement Date, and ending on the
date a Period of Severance begins. The Employee will receive credit for
any Period of Service of less than 12 consecutive months. Fractional
periods of a year will be expressed in days.
(FF) PERIOD OF SEVERANCE: A continuous period of time during which the
Employee is not employed by the Employer. A Period of Severance begins
on the date the Employee retires, quits, or is discharged, or dies, or
if earlier, the twelve month anniversary of the date on which the
Employee was first absent from work for any other reason; provided,
that if an Employee is absent from work for any other reason and
retires, quits, is discharged, or dies within 12 months, the Period of
Severance begins on the day the Employee quits, retires, is discharged,
or dies.
(GG) PLAN: This Plan established by the Employer as embodied in this
agreement and in the Adoption Agreement, and all subsequent amendments
thereto.
(HH) PLAN YEAR: The 12-consecutive month period designated by the Employer
in the Adoption Agreement. In the event that the original Effective
Date is not the first day of the Plan Year, the first Plan Year shall
be a short Plan Year, beginning on the original Effective Date, and
ending on the last day of the Plan Year as specified in the Adoption
Agreement.
(II) QUALIFIED DISTRIBUTION DATE: For purposes of Section 7.13, the
Qualified Distribution Date, if selected in the Adoption Agreement,
shall be the earliest retirement date specified in Code Section 414(p)
and shall operate to allow a distribution to an Alternate Payee at the
time a domestic relations order is determined to be qualified.
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<PAGE> 9
(JJ) REEMPLOYMENT COMMENCEMENT DATE: The date on which an Employee completes
an Hour of Service with the Employer after a Break In Service or a
Period of Severance.
(KK) RELATED EMPLOYERS: Any employer related to the Employer as a controlled
group of corporations (as defined in Section Section 414(b) of the
Code), a group of trades or businesses (whether or not incorporated)
which are under common control (as defined in Section 414(c)) or an
affiliated service group (as defined in Section 414(m) or in Section
414(o) of the Code). If the Employer is a member of a related group,
the term "Employer" includes the related group members for purposes of
crediting Hours of Service, determining Years of Service and Breaks in
Service under Article II, applying participation and coverage testing,
applying the limitations on allocations in Section 6.6, applying the
top heavy rules and the minimum allocation requirements of Article IX,
the definitions of Employee, Highly Compensated Employee, Compensation
and Leased Employee, and for any other purpose required by the
applicable Code section or by a Plan provision. However, an Employer
may contribute to the Plan only by signing the Adoption Agreement or a
Participation Agreement to the Employer's Adoption Agreement. If one
or more of the Employer's related group members become Participating
Employers by executing a Participation Agreement to the Employer's
Adoption Agreement, the term "Employer" includes the participating
related group members for all purposes of the Plan, and "Plan
Administrator" means the Employer that is the signatory to the
Adoption Agreement.
If the Employer's Plan is a standardized Plan, all Employees of the
Employer or of any member of the Employer's related group, are eligible
to participate in the Plan, irrespective of whether the related group
member directly employing the Employee is a Participating Employer. If
the Employer's Plan is a nonstandardized Plan, the Employer must
specify in Item B(5) of its Adoption Agreement, whether the Employees
of related group members that are not Participating Employers are
eligible to participate in the Plan. Under a nonstandardized Plan, the
Employer may elect to exclude from the definition of "Compensation" for
allocation purposes any Compensation received from a related employer
that has not executed a Participation Agreement and whose Employees are
not eligible to participate in the Plan.
(LL) SELF-EMPLOYED INDIVIDUAL: An individual who has Earned Income for the
taxable year from the trade or business for which the Plan is
established; also, an individual who would have had Earned Income but
for the fact that the trade or business had no Net Profits for the
taxable year.
(MM) SPOUSE: The person to whom the Participant is legally married at the
relevant time. Notwithstanding the foregoing, if selected in the
Adoption Agreement, Spouse shall only refer to an individual to whom a
Participant has been married to for a period of at least one year,
ending at the relevant time.
(NN) STOCKHOLDER-EMPLOYEE: An employee or officer of an electing small
business (Subchapter S) corporation who owns (or is considered as
owning within the meaning of Section 318(a)(1) of the Code), on any day
during the taxable year of such corporation, more than 5% of the
outstanding stock of the corporation.
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(OO) TERMINATION DATE: The date on which a Participant's employment is
terminated as provided in Section 5.1.
(PP) TRUSTEE: The entity specified in Item B(17) of the Adoption Agreement,
which shall be any bank or trust company which is affiliated with
KeyCorp. within the meaning of Section 1504 of the Code, each of which
with full trust powers, and its successors by merger or reorganization.
(QQ) TRUST FUND: All assets held under the Plan by the Trustee.
(RR) VALUATION DATE. The date on which the assets of the Trust shall be
valued, as provided for herein, with earning or losses since the
previous Valuation Date being credited, as appropriate to Participant
accounts. Notwithstanding anything to the contrary in the Plan, the
Valuation date shall be each business day that the Trustee and the New
York Stock Exchange are each open for business, provided, however, that
the Trustee shall not be obligated to value the Trust in the event,
through circumstances beyond its control, appropriate prices may not be
obtained for the assets held in the Investment Funds.
(SS) VESTING COMPUTATION PERIOD. The Vesting Computation Period shall be the
12-consecutive month period selected by the Employer in the Adoption
Agreement.
(TT) YEAR OF PARTICIPATION: For purposes of vesting, a twelve (12) month
period in which an Employee has a balance in an account established
under a 401(k)/401(m) arrangement regardless of whether the Employee is
currently making contributions under the arrangement.
(UU) YEAR OF SERVICE: (i) If the elapsed time method of crediting service is
elected in the Adoption Agreement, a Year of Service will mean a
one-year Period of Service. If the actual hours method of crediting
service is elected in the Adoption Agreement, a Year of Service will
mean a 12-consecutive month period as specified in the Adoption
Agreement during which the Employee completes the number of Hours of
Service (not to exceed 1000) specified in the Adoption Agreement.
1.2 GENDER AND NUMBER. Unless the context indicates otherwise, the masculine
shall include the feminine, and the use of any words herein in the singular
shall include the plural and vice versa.
1.3 CONTROL OF TRADES OR BUSINESSES BY OWNER-EMPLOYEE. If this Plan provides
contributions or benefits for one or more Owner-Employees who control both
the business for which this Plan is established and one or more other trades
or businesses, this Plan and the Plan established for other trades or
businesses must, when looked at as a single Plan, satisfy Sections 401(a)
and (d) for the employees of this and all other trades or businesses.
If the Plan provides contributions or benefits for one or more
Owner-Employees who control one or more other trades or businesses, the
employees of the other trades or businesses must be included in a Plan which
satisfies Sections 401(a) and (d) and which provides contributions and
benefits not less favorable than provided for Owner-Employees under this
Plan.
If an individual is covered as an Owner-Employee under the plans of two or
more trades or businesses which are not controlled and the individual
controls a trade or business, then the contri-
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butions or benefits of the employees under the Plan of the trades or
businesses which are controlled must be as favorable as those provided for
him under the most favorable Plan of the trade or business which is not
controlled.
For purposes of the preceding paragraphs, an Owner-Employee, or two or more
Owner-Employees, will be considered to control a trade or business if the
Owner-Employee, or two or more Owner-Employees together:
(1) Own the entire interest in an unincorporated trade or business, or
(2) In the case of a partnership, own more than 50 percent of either capital
interest or the profits interest in the partnership.
For purposes of the preceding sentence, an Owner-Employee, or two or
more Owner-Employees shall be treated as owning any interest in a
partnership which is owned, directly or indirectly, by a partnership
which such Owner-Employee, or such two or more Owner-Employees, are
considered to control within the meaning of the preceding sentence.
ARTICLE II
ELIGIBILITY AND VESTING
2.1 ELIGIBILITY.
(A) PARTICIPATION. Every Employee who meets the eligibility requirements
specified by the Employer in the Adoption Agreement shall become
eligible to commence participation in this Plan.
(B) COMMENCEMENT OF PARTICIPATION.
(1) For purposes of Money Purchase Pension Plans, Profit Sharing Plans
and 401(k) Plans with Profit Sharing Contributions, each Eligible
Employee shall commence participation on the Entry Date.
(2) For purposes of 401(k) and 401(m) arrangements, an Eligible Employee
may, but is not required to, enroll as a Participant as of the Entry
Date on which such Employee is initially eligible by filing with the
Committee before such date, an enrollment form prescribed by the
Committee. The time period for filing an enrollment form shall be
determined by the Committee. The form shall include an authorization
and request to the Employer to deduct from such Participant's
Compensation in each pay period the designated After Tax
Contributions, and/or to reduce such Participant's Compensation in
each pay period by the amount of the designated Before Tax
Contributions.
(C) YEARS OF SERVICE COUNTED TOWARDS ELIGIBILITY. All Years of Service with
the Employer are counted toward eligibility except the following:
(1) In a Plan which (a) requires an Employee to complete more than one
Year of Service as an eligibility requirement and (b) provides
immediate 100% vesting in a
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<PAGE> 12
Participant's Employer Contribution Account after not more than two
(2) Years of Service, if an Employee has a 1-year Break in Service
before satisfying the Plan's requirement for eligibility, service
before such break will not be taken into account.
(2) In the case of a Participant who does not have any nonforfeitable
right to the account balance derived from Employer contributions,
Years of Service before a period of consecutive 1-year Breaks in
Service will not be taken into account in computing eligibility
service if the number of consecutive 1-year Breaks in Service in
such period equals or exceeds the greater of 5 or the aggregate
number of Years of Service. Such aggregate number of Years of
Service will not include any Years of Service disregarded under the
preceding sentence by reason of prior Breaks in Service.
(3) If a Participant's Years of Service are disregarded pursuant to the
preceding paragraph, such Participant will be treated as a new
Employee for eligibility purposes. If a Participant's Years of
Service may not be disregarded pursuant to the preceding paragraph,
such Participant shall continue to participate in the Plan, or, if
terminated, shall participate immediately upon reemployment.
(D) ELIGIBILITY BREAK IN SERVICE, ONE YEAR HOLD-OUT RULE. If the Plan is a
nonstandardized Plan, then:
(1) In the case of any Participant who has a 1-year Break in Service or
Severance, years of eligibility service before such break will not
be taken into account until the Employee has completed a Year of
Service after returning to employment.
(2) For plans in which the eligibility computation is measured with
reference to the Employment Commencement Date, such Year of Service
will be measured beginning on the Employee's Reemployment
Commencement Date and, if necessary, subsequent 12-consecutive month
periods beginning on anniversaries of the Reemployment Commencement
Date.
(3) For plans which shift the Eligibility Computation Period to the Plan
Year, such Year of Service will be measured by the 12-consecutive
month period beginning on the Employee's Reemployment Commencement
Date and, if necessary, Plan Years beginning with the Plan Year
which includes the first anniversary of the Reemployment
Commencement Date.
(4) If a Participant completes a Year of Service in accordance with this
provision, his or her participation will be reinstated as a
Participant as of the Reemployment Commencement Date.
(E) PARTICIPATION UPON RETURN TO ELIGIBLE CLASS.
(1) In the event a Participant is no longer a member of an eligible
class of Employees and becomes ineligible to participate but has not
incurred a Break In Service, such Employee shall participate
immediately upon returning to an eligible class of Em-
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<PAGE> 13
ployees. If such Participant incurs a Break In Service eligibility
will be determined under the Break in Service rules of the Plan.
(2) In the event an Employee who is not a member of an eligible class of
Employees becomes a member of an eligible class, such Employee will
participate immediately if such Employee has satisfied the minimum
age and service requirements and would have otherwise previously
become a Participant.
2.2 VESTING.
(A) VESTING SCHEDULE. In the case of an Employee who terminates
participation under this Plan for any reason other than death,
Disability, or employment at the Normal Retirement Date, such
Participant, as of the last day of his participation under this Plan,
shall have a vested interest in his Employer Contribution Account
pursuant to the formula specified by the Employer in the Adoption
Agreement.
(B) VESTING UPON NORMAL RETIREMENT DATE. Notwithstanding the vesting
schedule elected by the Employer in Items B(7)(a) or C(4)(d) of the
Adoption Agreement, an Employee's right to his or her Employer
Contribution balance shall be nonforfeitable at the Employee's Normal
Retirement Date.
(C) VESTING BREAK IN SERVICE - 1 YEAR HOLDOUT. In the case of any
Participant who has incurred a 1-year Break in Service, Years of Service
before such break will not be taken into account until the Participant
has completed a Year of Service after such Break in Service.
(D) VESTING FOR PRE-BREAK AND POST-BREAK ACCOUNT. In the case of a
Participant who has 5 or more consecutive 1-year Breaks in Service, all
service after such Breaks in Service will be disregarded for the purpose
of vesting the employer-derived account balance that accrued before such
Breaks in Service. Such Participant's pre-break service will count in
vesting the post-break employer-derived account balance only if either:
(1) such Participant has any nonforfeitable interest in the account
balance attributable to employer contributions at the time of
separation from service; or
(2) upon returning to service the number of consecutive 1-year Breaks in
Service is less than the number of Years of Service. Separate
accounts will be maintained for the Participant's pre-break and
post-break Employer Contribution Account balance. Both accounts will
share in the earnings and losses of the Trust Fund.
(E) AMENDMENT OF VESTING SCHEDULE. If the Plan's vesting schedule is
amended, or the Plan is amended in any way that directly or indirectly
affects the computation of the Participant's nonforfeitable percentage
or if the Plan is deemed amended by an automatic change to or from a
top-heavy vesting schedule, each Participant with at least three (3)
Years of Service with the Employer may elect within a reasonable period
after the adoption of the amendment or change, to have the
nonforfeitable percentage computed under this Plan without regard to
such amendment or change. For Participants who do not have at least 1
Hour of Service in any Plan Year beginning after December 31, 1988, the
preceding sentence shall
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<PAGE> 14
be applied by substituting "5 Years of Service" for "3 Years of Service"
where such language appears.
This period during which the election may be made shall commence with
the date the amendment is adopted or deemed to be made and shall end on
the latest of:
(1) Sixty (60) days after the amendment is adopted;
(2) Sixty (60) days after the amendment becomes effective; or
(3) Sixty (60) days after the Participant is issued written notice of
the amendment by the Employer or Committee.
(F) AMENDMENT AFFECTING VESTED AND/OR ACCRUED BENEFITS. No amendment to the
Plan shall be effective to the extent that it has the effect of
decreasing a Participant's accrued benefit. Notwithstanding the
preceding sentence, a Participant's account balance may be reduced to
the extent permitted under Section 412(c)(8) of the Code. For purposes
of this paragraph, a Plan amendment which has the effect of decreasing a
Participant's account balance or eliminating an optional form of
benefit, with respect to benefits attributable to service before the
amendment shall be treated as reducing an accrued benefit. Furthermore,
if the vesting schedule of a 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 the percentage computed under the Plan
without regard to such amendment.
ARTICLE III
CODE 401(k) AND CODE 401(m) ARRANGEMENTS
3.1 PROVISION RELATING TO BOTH BEFORE TAX CONTRIBUTIONS AND AFTER TAX
CONTRIBUTIONS.
(A) DEFINITIONS: The following definitions are applicable to this Article of
the Plan.
(1) ACTUAL DEFERRAL PERCENTAGE OR ADP: for a specified group of
Participants for a Plan Year, the average of the ratios (calculated
separately for each Participant in such group) of (1) the amount of
Employer contributions actually paid over to the trust on behalf of
such Participant for the Plan Year to (2) the Participant's
Compensation for such Plan Year (whether or not the Employee was a
Participant for the entire Plan Year, but limited to that portion of
the Plan Year in which the Employee was an Eligible Participant if
the Employer so elects for such Plan Year to so limit Compensation
for all Eligible Employees). Employer contributions on behalf of any
Participant shall include (1) any Before Tax Contributions made
pursuant to the Participant's deferral election, including Excess
Before Tax Contributions, but excluding Before Tax Contributions
that are taken into account in the Contribution Percentage test
(provided the ADP test is satisfied both with and without exclusion
of these Before Tax Contributions); and (2) at the election of the
Employer, Qualified Non-elective Contributions and Qualified
Matching Contributions. For purposes of computing Actual Deferral
Percentages, an Employee who would be a Participant but for the
failure to make Before Tax Contributions shall be treated as a
participant on whose behalf no Before Tax Contributions are made.
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(2) AFTER TAX CONTRIBUTIONS ("EMPLOYEE CONTRIBUTIONS"): Any contribution
made to the Plan by or on behalf of a Participant that is included
in the Participant's gross income in the year in which made and that
is maintained under a separate account to which earnings and losses
are allocated.
(3) AGGREGATE LIMIT: The sum of (i) 125 percent of the greater of the
ADP of the Non-highly Compensated Employees for the Plan Year or the
ACP of Non-highly Compensated Employees under the Plan subject to
Code Section 401(m) for the Plan Year beginning with or within the
Plan Year of the cash or deferred arrangement and (ii) the lesser of
200% or two plus the lesser of such ADP or ACP. "Lesser" is
substituted for "greater" in "(i)", above, and "greater" is
substituted for "lesser" after "two plus the" in "(ii)" if it would
result in a larger Aggregate Limit.
(4) AVERAGE CONTRIBUTION PERCENTAGE OR ACP: the average (expressed as a
percentage) of the Contribution Percentages of the Eligible
Participants in a group.
(5) BEFORE TAX CONTRIBUTIONS ("ELECTIVE DEFERRALS"): Employer
contributions made to the Plan at the election of the Participant,
in lieu of cash compensation, which shall include contributions made
pursuant to a salary reduction agreement or other deferral
mechanism. With respect to any taxable year, a Participant's Before
Tax Contributions are the sum of all Employer contributions made on
behalf of such Participant pursuant to an election to defer under
any qualified cash or deferred arrangement as described in Section
401(k) of the Code, any simplified employee pension cash or deferred
arrangement as described in Code Section 402(h)(1)(B), any eligible
deferred compensation Plan under Code Section 457, any Plan as
described 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.
(6) CONTRIBUTION PERCENTAGE: The ratio (expressed as a percentage) of
the Participant's Contribution Percentage Amounts to the
Participant's Compensation for the Plan Year (whether or not the
Employee was a Participant for the entire Plan Year, but limited to
that portion of the Plan Year in which the Employee was an Eligible
Participant if the Employer so elects for such Plan Year to so limit
Compensation for all Eligible Employees).
(7) CONTRIBUTION PERCENTAGE AMOUNTS: The sum of the After Tax
Contributions, Matching Contributions, and Qualified Matching
Contributions (to the extent not taken into account for purposes of
the ADP test) made under the Plan on behalf of the Participant for
the Plan Year. Such 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 Before Tax Contributions, Excess
Contributions or Excess Aggregate Contributions. If so elected in
the Adoption Agreement the Employer may include Qualified
Non-elective Contributions in the Contribution Percentage Amounts.
The Employer also may elect to use Before Tax Contributions in the
Contribution Percentage
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Amounts so long as the ADP test is met before the Before Tax
Contributions are used in the ACP test and continues to be met
following the exclusion of those Before Tax Contributions that are
used to meet the ACP test.
(8) ELIGIBLE PARTICIPANT: Any Employee who is eligible to make an After
Tax Contribution or a Before Tax Contribution (if the Employer
takes such contributions into account in the calculation of the
Contribution Percentage), or to receive a Matching Contribution
(including forfeitures) or a Qualified Matching Contribution. If an
After Tax Contribution is required as a condition of participation
in the Plan, any Employee who would be a Participant in the Plan if
such Employee made such a contribution shall be treated as an
eligible Employee on behalf of whom no After Tax Contributions are
made.
(9) EXCESS AGGREGATE CONTRIBUTIONS: With respect to any Plan Year, the
excess of:
(a) The aggregate Contribution Percentage Amounts taken into
account in computing the numerator of the Contribution
Percentage actually made on behalf of Highly Compensated
Employees for such Plan Year, over
(b) The maximum Contribution Percentage Amounts permitted by the
ACP test (determined by reducing contributions made on behalf
of Highly Compensated Employees in order of their Contribution
Percentages beginning with the highest of such percentages).
Such determination shall be made after first determining Excess
Before Tax Contributions pursuant to Section 3.2(D) and (E) and
then determining Excess Contributions pursuant to section
3.2(F), (G) and (H).
(10) EXCESS BEFORE TAX CONTRIBUTIONS ("EXCESS ELECTIVE DEFERRALS"):
Those Before Tax Contributions that are includible in a
Participant's gross income under Section 402(g) of the Code to the
extent such Participant's Before Tax Contributions for a taxable
year exceed the dollar limitation under such Code section. Excess
Before Tax Contributions shall be treated as Annual Additions under
the Plan, unless such amounts are distributed no later than the
first April 15 following the close of the Participants taxable
year. Excess Before Tax Contributions shall be adjusted for income
or loss up to the end of the taxable year of the Employee, and if
elected in the Adoption Agreement, for the income or loss
attributable to the period from the end of the Employee's taxable
year to the date of distribution (the "Gap Period"). The income or
loss allocable to Excess Before Tax Contributions is (1) the income
or loss allocable to the Participant's Before Tax Contribution
Account for the taxable year multiplied by a fraction, the
numerator of which is such Participant's Excess Before Tax
Contributions for the year and the denominator is the Participant's
account balance attributable to Before Tax Contributions without
regard to any income or loss occurring during such taxable year
plus, (2) if Gap Period income or loss applies, ten percent of the
amount determined under (1) multiplied by the number of whole
calendar months between the end of the Participant's taxable year
and the date of distribution, counting the month of distribution if
distribution occurs after the 15th of such month.
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(11) EXCESS CONTRIBUTIONS: With respect to any Plan Year, the excess of:
(a) The aggregate amount of Employer contributions actually taken
into account in computing the ADP of Highly Compensated
Employee for such Plan Year, over
(b) The maximum amount of such contributions permitted by the ADP
test (determined by reducing contributions made on behalf of
Highly Compensated Employee in order of the ADPs, beginning
with the highest of such percentages).
(12) MATCHING CONTRIBUTIONS: An Employer contribution made to this or
any other defined contribution Plan on behalf of a Participant on
account of an After Tax Contribution made by such Participant, or
on account of a Participant's Before Tax Contribution, under a Plan
maintained by the Employer.
(13) QUALIFIED MATCHING CONTRIBUTIONS: Matching Contributions which are
subject to the distribution and nonforfeitability requirements
under Section 401(k) of the Code when made. Qualified Matching
Contributions shall be allocated, in the discretion of Employer, to
the accounts of all Employees, or only to the accounts of
Non-highly Compensated Employees.
(14) QUALIFIED NON-ELECTIVE CONTRIBUTIONS: Contributions (other than
Matching Contributions or Qualified Matching Contributions) made by
the Employer and allocated to Participants' accounts that the
Participants may not elect to receive in cash until distributed
from the Plan; that are nonforfeitable when made; and that are
distributable only in accordance with the distribution provisions
that are applicable to Before Tax Contributions and Qualified
Matching Contributions. Qualified Non-elective Contributions shall
be allocated, in the discretion of Employer, to the accounts of all
Employees, or only to the accounts of Non-highly Compensated
Employees.
(B) NONFORFEITABILITY AND VESTING. The Participant's accrued benefits
derived from Before Tax Contributions and After Tax Contributions are
nonforfeitable and fully vested.
(C) NOTICE TO COMMITTEE. The Committee shall set the time period during
which a Participant may provide written notice to increase, decrease or
terminate Before Tax Contributions and After Tax Contributions.
(D) SUSPENSION AFTER RECEIPT OF HARDSHIP DISTRIBUTION. If the Employer has
elected in the Adoption Agreement to have the "safe harbor" hardship
rules apply, an Employee's Before Tax Contributions and After Tax
Contributions shall be suspended for twelve months after the receipt by
such Employee of a Hardship distribution (as defined in Section 3.9)
from this Plan or any other Plan maintained by the Employer.
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(E) SEPARATE ACCOUNTS. Separate accounts for Before Tax Contributions and
After Tax Contributions will be maintained for each Participant. Each
account will be credited with the applicable contributions and earnings
thereon.
3.2 BEFORE TAX CONTRIBUTIONS. (ELECTIVE DEFERRALS).
(A) ALLOCATION OF BEFORE TAX CONTRIBUTIONS. If the Employer selects Item
C(2) in the Adoption Agreement, for each Plan Year the Employer will
contribute and allocate to each Participant's Before Tax Contribution
Account an amount equal to the amount of the Participant's Before Tax
Contributions. The provisions of the cash or deferred arrangement may be
made effective as of the first day of the Plan Year in which the cash or
deferred option is adopted, however, under no circumstances may a salary
reduction agreement or other deferral mechanism be adopted
retroactively. Before Tax Contributions must be contributed and
allocated to the Plan no later than thirty (30) days after the close of
the Plan Year for which the contributions are deemed to be made, or such
other time as provided in applicable regulations under the Code.
(B) BEFORE TAX CONTRIBUTIONS PURSUANT TO A SALARY REDUCTION AGREEMENT. To
the extent provided in the Adoption Agreement, a Participant may elect
to have Before Tax Contributions made under this Plan. Before Tax
Contributions shall be continuing contributions through payroll
deduction made pursuant to a salary reduction agreement.
(1) COMMENCEMENT OF BEFORE TAX CONTRIBUTIONS. An Employee may elect to
commence Before Tax Contributions as of his or her Entry Date as
described in Section 2.1(B). Such election shall not become
effective before the Entry Date. Such election may not be made
retroactively.
(2) MODIFICATION AND TERMINATION OF BEFORE TAX CONTRIBUTIONS. A
Participant's election to commence Before Tax Contributions shall
remain in effect until modified or terminated. A Participant may
increase or decrease his or her Before Tax Contributions as of any
date as selected by the Employer in Item C(3) of the Adoption
Agreement upon notice to the Committee. A Participant may terminate
his or her election to make Before Tax Contributions as of the
Participant's next wage payment date upon notice to the Committee.
Any Participant who terminates Before Tax Contributions may elect to
recommence making Before Tax Contributions as of the date selected
by the Employer in Item C(3) of the Adoption Agreement following his
or her suspension of contributions.
(C) CASH BONUSES. If Item C(2)(c) of the Adoption Agreement is selected,
a Participant may also enter into a salary reduction agreement on
cash bonuses that, directing that the amount of such salary
reduction be contributed to the Plan as a Before Tax Contribution,
or received by the Participant in cash. A Participant shall be
afforded a reasonable period to elect to defer amounts described in
this Section 3.2 to the Plan. Such election shall not become
effective before the Participant's Entry Date.
(D) MAXIMUM AMOUNT OF BEFORE TAX CONTRIBUTIONS. A Participant's Before
Tax Contributions are subject to any limitations imposed in Item
C(2) of the Adoption Agreement, calculated on an annual basis, and
any further limitations under the Plan. No
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Participant shall be permitted to have Before Tax Contributions 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. Furthermore, if an Employee receives a Hardship
distribution (as defined in Section 3.9, utilizing the "safe harbor"
rules) from this Plan or any other Plan maintained by the Employer,
the Employee may not make Before Tax Contributions for the
Employee's taxable year immediately following the taxable year of
the Hardship distribution in excess of the applicable limit under
Section 402(g) of the Code for such taxable year less the amount of
the Employee's Before Tax Contributions for the taxable year of the
Hardship distribution.
(E) DISTRIBUTION OF EXCESS BEFORE TAX CONTRIBUTIONS. If a Participant
makes Before Tax Contributions to this Plan and to another Plan, and
the Participant has made Excess Before Tax Contributions to one or
more of the plans, the Participant may assign the amount of any such
Excess Before Tax Contributions among the plans under which such
Before Tax Contributions were made. The Participant may assign to
this Plan any Excess Before Tax Contributions made during a taxable
year of the Participant to this Plan by notifying the Committee on
or before the date specified in the Adoption Agreement of the amount
of the Excess Before Tax Contributions to be assigned to the Plan. A
Participant is deemed to notify the Committee of any Excess Before
Tax Contributions that arise by taking into account only those
Before Tax Contributions made under the Plan or Plans of this
Employer.
Notwithstanding any other provision of the Plan, Excess Before Tax
Contributions, plus any income and minus any loss allocable thereto,
shall be distributed no later than April 15 to any Participant to
whose account Excess Before Tax Contributions were assigned for the
preceding year and who claims Excess Before Tax Contributions for
such taxable year.
The Participant's claim shall be in writing; shall be submitted to
the Committee not later than the date elected in Item CC of the
Adoption Agreement; shall specify the amount of the Participant's
Excess Before Tax Contribution for the preceding calendar year; and
shall be accompanied by the Participant's written statement that if
such amounts are not distributed, such Excess Before Tax
Contributions, when added to amounts deferred under other plans or
arrangements described in Sections 401(k), 408(k), or 403(b) of the
Code, will exceed the limit imposed on the Participant by Section
402(g) of the Code for the year in which the deferral occurred.
(F) ACTUAL DEFERRAL PERCENTAGE. The ADP for Participants who are Highly
Compensated Employees for each Plan Year and the ADP for Non-highly
Compensated Employees for the same Plan Year must satisfy one of the
following tests:
(1) 1.25 LIMIT. The ADP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ADP for
Participants who are Non-highly Compensated Employees for the
same Plan Year multiplied by 1.25; or
(2) 2.0 LIMIT. The ADP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ADP for
Participants who are Non-highly Compensated Employees for the
same Plan Year multiplied by 2.0, provided that the
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<PAGE> 20
ADP for Participants who are Highly Compensated Employees does
not exceed the ADP for Participants who are Non-highly
Compensated Employees by more than two (2) percentage points.
(3) SPECIAL RULES.
(a) The ADP for any Participant who is a Highly Compensated
Employee for the Plan Year and who is eligible to have
Before Tax Contributions (and Qualified Non-elective
Contributions, or Qualified Matching Contributions, or both,
if treated as Elective Deferrals for purposes of the ADP
test) allocated to his or her accounts under two or more
arrangements described in Section 401(k) of the Code, that
are maintained by the Employer, shall be determined as if
such Before Tax Contributions (and, if applicable, such
Qualified Non-elective 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.
(b) In the event that this Plan satisfies the requirements of
Sections 401(k), 401(a)(4), or 410(b) of the Code only if
aggregated with one or more other plans, or if one or more
other plans satisfy the requirements of such Sections of the
Code only if aggregated with this Plan, then this section
shall be applied by determining the ADP of Employees as if
all such plans were a single Plan. For Plan Years beginning
after December 31, 1989, plans may be aggregated in order to
satisfy Section 401(k) of the Code only if they have the
same Plan Year.
(c) For purposes of determining the ADP of a Participant who is
a 5-percent owner or one of the ten most highly-paid Highly
Compensated Employees, the Before Tax Contributions (and
Qualified Non-elective Contributions or Qualified Matching
Contributions, or both, if treated as Before Tax
Contributions for purposes of the ADP test) and Compensation
of such Participant shall include the Before Tax
Contributions (and, if applicable, Qualified Non-elective
Contributions) and Compensation for the Plan Year of Family
Members (as defined in Section 414(q)(6) of the Code).
Family Members, with respect to such Highly Compensated
Employees, shall be disregarded as separate employees in
determining the ADP both for Participants who are Non-highly
Compensated Employees and for Participants who are Highly
Compensated Employees.
(d) For purposes of determining the ADP test, Before Tax
Contributions if treated as Before Tax Contributions and
Qualified Non-elective Contributions must be made before the
last day of the twelve-month period immediately following
the Plan Year to which contributions relate.
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<PAGE> 21
(e) The Employer shall maintain records sufficient to
demonstrate satisfaction of the ADP test and the amount of
Qualified Non-elective Contributions used in such test.
(f) The determination and treatment of the ADP amounts of any
Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
(G) DISTRIBUTION OF EXCESS CONTRIBUTIONS. Notwithstanding any other
provision of the Plan, Excess Contributions, plus any income and minus
any loss allocable thereto, shall be distributed no later than the last
day of each Plan Year to Participants to whose accounts 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 to Highly Compensated
Employees on the basis of the respective portions of the Excess
Contributions attributable to each of such Employees. Excess
Contributions of Participants who are subject to the Family Member
aggregation rules shall be allocated among the Family Members in
proportion to the Before Tax Contributions (and amounts treated as
Before Tax Contributions) of each Family Member that is combined to
determine the combined ADP.
Excess Contributions (including the amounts recharacterized) shall be
treated as Annual Additions under the Plan.
(1) DETERMINATION OF INCOME OR LOSS. The Excess Contributions shall be
adjusted for income or loss up to the date of distribution. The
income or loss allocable to Excess Contributions is (1) the income
or loss allocable to the Participant's Before Tax Contribution
Account (and, if applicable, the Qualified Non-elective Contribution
Account or the Qualified Matching Contribution Account or both)
multiplied by a fraction, the numerator of which is such
Participant's Excess Contribution for the year and the denominator
is the Participant's account balance attributable to Before Tax
Contributions (and Qualified Non-Elective Contributions or Qualified
Matching Contributions or both, if any of such contributions are
included in the ADP test) without regard to any income or loss
occurring during such taxable year, plus, (2) if Gap Period income
or loss applies, as elected in the Adoption Agreement, ten percent
of the amount determined under (1) multiplied by the number of whole
calendar months between the end of the Plan Year and the date of
distribution, counting the month of distribution if distribution
occurs after the 15th of such month.
(2) ACCOUNTING FOR EXCESS CONTRIBUTIONS. Excess Contributions shall be
distributed from the Participant's Before Tax Contribution Account
and Qualified Matching Contribution Account (if applicable) in
proportion to the Participant's Before Tax Contributions and
Qualified Matching Contributions (to the extent used in the ADP
test) for the Plan Year. Excess Contributions shall be distributed
from the participant's Qualified Non-elective Contribution Account
only to the extent that
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<PAGE> 22
such Excess Contributions exceed the balance in the Participant's
Before Tax Contribution Account.
(H) RECHARACTERIZATION. If the Plan permits After Tax Contributions
(Employee Contributions), Excess Contributions may be recharacterized
pursuant to this subsection. Recharacterized amounts may be used in the
Plan from which Excess Contributions arose or in another Plan of the
employer with the same Plan Year.
(1) TREATMENT OF AMOUNTS RECHARACTERIZED. A Participant may treat his or
her Excess Contributions as an amount distributed to the Participant
and then contributed by the Participant to the Plan. Recharacterized
amounts will remain nonforfeitable and subject to the same
distribution requirements as Before Tax Contributions. Amounts may
not be recharacterized by a Highly Compensated Employee to the
extent that such amount in combination with other After Tax
Contributions made by that Employee would exceed any stated limit
under the Plan on After Tax Contributions.
(2) TIMING OF RECHARACTERIZATION. Recharacterization must occur no later
than two and one-half months after the last day of the Plan Year in
which such Excess Contributions arose and is deemed to occur no
earlier than the date the last Highly Compensated Employee is
informed in writing of the amount recharacterized and the
consequences thereof. Recharacterized amounts will be taxable to the
Participant for the Participant's tax year in which the Participant
would have received them in cash.
(I) ADJUSTMENTS TO BEFORE TAX CONTRIBUTION PERCENTAGES. Anything to the
contrary in this Article III notwithstanding, the Committee shall have
the right to reduce the percentages designated pursuant to Section
3.2(B), of any one or more Highly Compensated Employees in a manner
prescribed or approved by the Committee to the extent necessary or
convenient to ensure that at least one of the ADP tests set forth in
Section 3.2(F) is satisfied, but in no event shall such reduction result
in a percentage less than zero. Any such reduction shall be effected
quarterly, or more frequently as the Committee may determine and each
affected Highly Compensated Employee shall be deemed to have elected the
permissible percentage determined by the Committee. The Committee may,
on a prospective basis, and subject to the percentage limits of Section
3.3 below, treat amounts contributed to the Plan pursuant to a salary
reduction agreement as After Tax Contributions by each affected Highly
Compensated Employee; provided that if any such reduction cannot be so
treated because of the said percentage limits or because of the
nondiscrimination requirements of Code Section 401(m) or otherwise, then
the amount of such reduction (and any income allocable thereto) shall be
distributed to each affected Highly Compensated Employee pursuant to
Code Section 401(k)(8) or Code Section 401(m)(6), if applicable, not
later than the close of the first 2-1/2 months of the Plan Year
following the Plan Year in which the contribution was made.
3.3 AFTER TAX CONTRIBUTIONS. (EMPLOYEE CONTRIBUTIONS).
(A) ALLOCATION OF AFTER TAX CONTRIBUTIONS. If the Employer selects Item
C(2)(b) in the Adoption Agreement, the Employer will deduct from the
Participant's pay and allocate to
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<PAGE> 23
each Participant's After Tax Contribution Account an amount equal to the
percentage of Compensation authorized by the Participant as an After Tax
Contribution. The Employer shall transmit After Tax Contributions to the
Trustee within thirty (30) days after the month end in which such
deductions are made.
(B) EMPLOYEE AUTHORIZES AFTER TAX CONTRIBUTIONS. To the extent provided in
the Adoption Agreement, a Participant may elect to make After Tax
Contributions under the Plan.
(1) ELECTION TO MAKE AFTER TAX CONTRIBUTIONS. An Employee may elect to
make After Tax Contributions as of his or her Entry Date as
described in Section 2.1(B). Such election will not become effective
before the Entry Date.
(2) MODIFICATION AND TERMINATION OF AFTER TAX CONTRIBUTIONS. A
Participant's election to commence After Tax Contributions shall
remain in effect until modified or terminated. A Participant may
increase or decrease his or her After Tax Contributions as selected
by the Employer in Item C(3) of the Adoption Agreement upon written
notice to the Committee. A Participant may terminate his or her
election to make After Tax Contributions at any time as of the
Participant's next wage payment date upon written notice to the
Committee. Any Participant who terminates After Tax Contributions
may elect to recommence making After Tax Contributions as of the
date selected by the Employer in Item C(3) of the Adoption Agreement
following his or her suspension of contributions.
(C) MAXIMUM AMOUNT OF AFTER TAX CONTRIBUTIONS. A Participant's After Tax
Contributions are subject to any limitations imposed in Item C(3) of the
Adoption Agreement, calculated on an annual basis, and any further
limitations under the Plan.
(D) CASH BONUSES. If Item C(2)(c) of the Adoption Agreement is selected, a
Participant may also enter into a salary reduction agreement on cash
bonuses, directing that the amount of such salary reduction be
contributed to the Plan as an After Tax Contribution, or received by the
Participant in cash. A Participant shall be afforded a reasonable period
to elect to defer amounts described in this Section 3.3 to the Plan.
Such election shall not become effective before the Participant's Entry
Date.
3.4 EMPLOYER CONTRIBUTIONS.
(A) MATCHING CONTRIBUTIONS. If elected by the Employer in the Adoption
Agreement, the Employer will or may make Matching Contributions to the
Plan. The amount of such Matching Contributions shall be calculated by
reference to the Participants' Before Tax Contributions and/or After Tax
Contributions as specified by the Employer in the Adoption Agreement.
(B) QUALIFIED MATCHING CONTRIBUTIONS. If elected by the Employer in the
Adoption Agreement, the Employer may make Qualified Matching
Contributions to the Plan.
In addition, in lieu of distributing Excess Contributions as provided in
Section 3.2(G) of the Plan, or Excess Aggregate Contributions as
provided in Section 3.5(C) of the Plan, the Employer may make Qualified
Matching Contributions on behalf of Employees that are
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<PAGE> 24
sufficient to satisfy either the Actual Deferral Percentage or the
Average Contribution Percentage test, or both, pursuant to regulations
under the Code.
(C) QUALIFIED NON-ELECTIVE CONTRIBUTIONS. If elected by the Employer in the
Adoption Agreement, the Employer may make Qualified Non-elective
Contributions to the Plan.
In addition, in lieu of distributing Excess Contributions as provided in
Section 3.2(G) of the Plan, or Excess Aggregate Contributions as
provided in Section 3.5(C) of the Plan, the Employer may make Qualified
Non-elective Contributions on behalf of Employees that are sufficient to
satisfy either the Actual Deferral Percentage or the Average
Contribution Percentage test, or both, pursuant to regulations under the
Code.
(D) SEPARATE ACCOUNTS. An Employer Matching Account shall be maintained for
a Participant's accrued benefit attributable to Matching Contributions.
A Qualified Matching Contribution Account shall be maintained for a
Participant's accrued benefit attributable to Qualified Matching
Contributions. A Qualified Non-elective Contribution Account shall be
maintained for a Participant's accrued benefit attributable to Qualified
Non-elective Contributions. Such accounts shall be credited with the
applicable contributions, earnings and losses, distributions, and other
adjustments.
(E) VESTING. Matching Contributions will be vested in accordance with the
Employer's election in Items C(4)(d) and C(4)(e) of the Adoption
Agreement. In any event, Matching Contributions shall be fully vested at
Normal Retirement Date, upon the complete or partial termination of the
Plan, or upon the complete discontinuance of Matching Contributions, as
applicable. Qualified Non-elective Contributions and Qualified Matching
Contributions are nonforfeitable when made.
(F) FORFEITURES. Forfeitures of Matching Contributions shall be used to
reduce such contributions, or shall be allocated to Participants, in
accordance with the Employer's election in Item C(6) of the Adoption
Agreement.
(G) ALLOCATION OF DISCRETIONARY MATCHING CONTRIBUTIONS. If the Employer
selects Item C(4)(b) in the Adoption Agreement, any discretionary
Matching Contributions shall be allocated as of the allocation date
specified in Item C(4)(c)(ii) of the Adoption Agreement, to the Employer
Matching Account of each Participant who has made Before Tax
Contributions and/or After Tax Contributions eligible for matching. If
Item C(4)(c)(ii)(e) has been selected (imposing a last day of the Plan
Year requirement) the allocation shall be made to a Participant who (1)
if a Participant in a nonstandardized Plan, is employed or on leave of
absence on the last day of the Plan Year, and (2) if a Participant in a
standardized Plan, either completes more than 500 Hours of service
during the Plan Year or is employed on the last day of the Plan Year.
The following Participants will also share in the Matching Contributions
for the year, if elected in the Adoption Agreement: (1) Participants in
a nonstandardized Plan whose employment terminated before the end of the
Plan Year because of retirement, death, disability or as specified in
the Adoption Agreement, and (2) Participants in a standardized Plan
whose employment terminated before the end of the Plan Year because of
retirement, death, disability or as specified in the Adoption Agreement,
and completed 500 Hours of Service or less. Notwithstanding the
foregoing, if the Employer makes a contribution prior to the end of the
Plan Year, Participants shall be entitled to an
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<PAGE> 25
allocation of that contribution when made, without regard to any end of
the Plan Year requirement.
(H) LIMITATION ON EMPLOYER CONTRIBUTIONS. The Employer's contributions for
any Plan Year shall not exceed the maximum amount which the Employer may
deduct pursuant to Section 404 of the Code.
3.5 LIMITATIONS ON AFTER TAX CONTRIBUTIONS (EMPLOYEE CONTRIBUTIONS) AND MATCHING
CONTRIBUTIONS.
(A) CONTRIBUTION PERCENTAGE. The ACP for Participants who are Highly
Compensated Employees for each Plan Year and the ACP for Participants
who are Non-highly Compensated Employees for the same Plan Year must
satisfy one of the following tests:
(1) 1.25 LIMIT. The ACP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ACP for
Participants who are Non-highly Compensated Employees for the same
Plan Year by 1.25, or
(2) 2.0 LIMIT. The ACP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ACP for
Participants who are Non-highly Compensated Employees for the same
Plan Year multiplied by two (2), provided that the ACP for
Participants who are Highly Compensated Employees does not exceed
the ACP for Participants who are Non-highly Compensated Employees by
more than two (2) percentage points.
(B) SPECIAL RULES.
(1) MULTIPLE USE. If one or more Highly Compensated Employees
participate in both a cash or deferred arrangement and a Plan
subject to the ACP test maintained by the Employer and the sum of
the ADP and ACP of those Highly Compensated Employees subject to
either or both tests exceeds the Aggregate Limit, then the ACP of
those Highly Compensated Employees who also participate in a cash or
deferred arrangement will be reduced (beginning with such Highly
Compensated Employee whose ACP is the highest) so that the limit is
not exceeded. The amount by which each Highly Compensated Employee's
Contribution Percentage amounts is reduced shall be treated as an
Excess Aggregate Contribution. The ADP and ACP of the Highly
Compensated Employees are determined after any corrections required
to meet the ADP and ACP tests. Multiple use does not occur if either
the ADP and ACP of the Highly Compensated Employees does not exceed
1.25 multiplied by the ADP and ACP of the Non-highly Compensated
Employees.
(2) AGGREGATION OF CONTRIBUTION PERCENTAGES. For purposes of this
section, the Contribution Percentage for any Participant who is a
Highly Compensated Employee and who is eligible to have Contribution
Percentage Amounts allocated to his or her accounts under two or
more plans described in Section 401(a) of the Code, or arrangements
described in Section 401(k) of the Code, that are maintained by the
Employer, 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
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<PAGE> 26
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 mandated to be disaggregated under regulations under
Section 401(m) of the Code.
(3) AGGREGATION OF PLANS. In the event that this Plan satisfies the
requirements of Sections 401(m), 401(a)(4) or 410(b) of the Code
only if aggregated with one or more other plans, or if one or more
other plans satisfy the requirements of such sections of the Code
only if aggregated with this Plan, then this section shall be
applied by determining the Contribution Percentage of Employees as
if all such plans were a single Plan. For Plan Years beginning after
December 31, 1989, plans may be aggregated in order to satisfy
Section 401(m) of the Code only if they have the same Plan Year.
(4) FAMILY AGGREGATION. For purposes of determining the Contribution
Percentage of a Participant who is a five-percent owner or one of
the ten most highly-paid Highly Compensated Employees, the
Contribution Percentage Amounts and Compensation of such Employee
shall include the Contribution Percentage Amounts and Compensation
for the Plan Year of Family Members, as defined in Section 414(q)(6)
of the Code. Family Members, with respect to Highly Compensated
Employees, shall be disregarded as separate employees in determining
the Contribution Percentage both for Participants who are Non-highly
Compensated Employees and for Participants who are Highly
Compensated Employees.
(5) TIME OF CONTRIBUTIONS. For purposes of determining the Contribution
Percentage test, After Tax Contributions are considered to have been
made in the Plan Year in which contributed to the Trust. Matching
Contributions and Qualified Non-elective Contributions will be
considered made for a Plan Year if made no later than the end of the
twelve-month period beginning on the day after the close of the Plan
Year.
(6) RECORDS. The Employer shall maintain records sufficient to
demonstrate satisfaction of the ACP test and the amount of Qualified
Non-elective Contributions or Qualified Matching Contributions, or
both, used in such test.
(7) REGULATIONS. 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.
(C) DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS.
(1) GENERAL RULE. Notwithstanding any other provision of this Plan,
Excess Aggregate Contributions, plus any income and minus any loss
allocable thereto, shall be forfeited, if forfeitable, or if not
forfeitable, distributed no later than the last day of each Plan
Year to Participants to whose accounts Excess Aggregate
Contributions were allocated for the preceding Plan Year. 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 After Tax and Matching Contributions
(or amounts treated as Matching Contributions) of each Family
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<PAGE> 27
Member that is combined to determine the combined ACP. 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 shall be treated as Annual Additions under
the Plan.
(2) DETERMINATION OF INCOME OR LOSS. Excess Aggregate Contributions
shall be adjusted for income or loss up to the date of distribution.
The income or loss allocable to Excess Aggregate Contributions is
the sum of: (1) income or loss allocable to the Participant's After
Tax Contribution Account, Matching Contribution Account, Qualified
Matching Contribution Account, (if any, and if all amounts therein
are not used in the ADP test) and, if applicable, the Qualified
Non-elective Contribution Account and Before Tax Contribution
Account for the Plan Year multiplied by a fraction, the numerator of
which is such Participant's Excess Aggregate Contributions for the
year and the denominator is the Participant's account balance(s)
attributable to Contribution Percentage Amounts without regard to
any income or loss occurring during such Plan Year; and (2) ten
percent of the amount determined under (1) multiplied by the number
of whole calendar months between the end of the Plan Year and the
date of distribution, counting the month of distribution if
distribution occurs after the 15th of such month.
(3) FORFEITURES OF EXCESS AGGREGATE CONTRIBUTIONS. Forfeitures of Excess
Aggregate Contributions may either be reallocated to the accounts of
Non-Highly Compensated Employees or applied to reduce Employer
Contributions, as elected by the Employer in Item C(6)(c) of the
Adoption Agreement.
(4) ACCOUNTING FOR EXCESS AGGREGATE CONTRIBUTIONS. Excess Aggregate
Contributions shall be forfeited, if forfeitable, or distributed on
a pro-rata basis from the Participant's After Tax Contribution
Account and Matching Contribution Account and Qualified Matching
Contribution Account (and, if applicable, the Participant's
Qualified Non-elective Contribution Account and Before Tax
Contribution Account, or both).
3.6 NET PROFITS NOT REQUIRED IF SO ELECTED IN ADOPTION AGREEMENT. If the
Employer elects, Matching Contributions may be made without regard to Net
Profits in accordance with Item C(4)(c)(iii) of the Adoption Agreement. If
the Plan is a profit-sharing Plan, the Plan shall continue to be designed to
qualify as a profit-sharing Plan for purposes of Sections 401(a), 402, 412,
and 417 of the Code. Net Profits shall not be required for Before Tax
Contributions or After Tax Contributions to be made to the Plan.
3.7 FORM, PAYMENT AND ALLOCATION OF CONTRIBUTIONS. All contributions under this
Article III made for a Plan Year shall be made in cash, and shall be
delivered to the Trustee at such time or times as shall be agreed upon
between the Committee and the Trustee. The Committee shall instruct the
Trustee as to the allocation of contributions to the Participant's accounts.
3.8 DISTRIBUTION REQUIREMENTS FOR BEFORE TAX CONTRIBUTION ACCOUNT. Before Tax
Contributions, Qualified Non-elective Contributions and Qualified Matching
Contributions, and income allocable
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to each are not distributable to a Participant or his or her Beneficiary or
Beneficiaries, in accordance with such Participant's, Beneficiary's or
Beneficiaries' election, earlier than upon separation from service, death,
disability, or as selected in the Adoption Agreement. Such amounts may not
be distributed unless in accordance with the Participant's election made
pursuant to rules established by the Committee as authorized in the Adoption
Agreement, and upon:
(A) Termination of the Plan without the establishment of another defined
contribution Plan, other than an employee stock ownership Plan (as
defined in Section 4975(e) or Section 409 of the Code) or a simplified
employee pension Plan as defined in Section 408(k).
(B) The disposition by a corporation to an unrelated corporation of
substantially all of the assets (within the meaning of Section 409(d)(2)
of the Code) used in a trade or business of such corporation if such
corporation continues to maintain this Plan after the disposition, but
only with respect to Employees who continue employment with the
corporation acquiring such assets.
(C) The disposition by a corporation to an unrelated entity of such
corporation's interest in a subsidiary (within the meaning of Section
409(d)(3) of the Code) if such corporation continues to maintain this
Plan, but only with respect to Employees who continue employment with
such subsidiary.
(D) The attainment of age 59-1/2 in the case of a profit-sharing Plan, or
the attainment of the Plan's Normal Retirement Date, if either or both
are selected in the Adoption Agreement.
(E) The Hardship of the Participant as described in Section 3.9, if selected
in the Adoption Agreement.
All distributions that may be made pursuant to one or more of the
foregoing distributable events are subject to the spousal and
Participant consent requirements (if applicable) contained in Sections
411(a)(11) and 417 of the Code. In addition, distributions after March
31, 1988, that are triggered by any of the first three events above, in
Sections 3.8(A), (B) and (C) must be made in a lump sum.
3.9 HARDSHIP DISTRIBUTION.
(A) AMOUNT AVAILABLE FOR WITHDRAWAL. Upon the written request of a
Participant received and approved by the Committee, a Participant may
withdraw, in cash, up to one hundred per cent (100%) of the amount of
such Participant's Before Tax Contributions (and any earnings credited
to a Participant's account as of the end of the last Plan Year ending
before July 1, 1989) or such lesser amount as the Committee may ap-
prove, in the event of Hardship. For purposes of this Section, Hardship
is defined as immediate and heavy financial need of the Employee where
such Employee lacks other available resources. Hardship distributions
are subject to the spousal consent requirements contained in Sections
411(a)(11) and 417 of the Code. The Committee is authorized to and shall
request from the Participant making such a request such evidence as the
Committee deems necessary and appropriate to substantiate a Hardship,
the amount of expenses resulting from such Hardship and the other
resources of the Participant reasonably available to meet such expenses.
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(B) SPECIAL RULES:
(1) IMMEDIATE AND HEAVY NEED. The following are the only financial
needs considered immediate and heavy: expenses incurred or
necessary for medical care, described in Section 213(d) of the
Code, of the Employee, the Employee's Spouse or dependents; the
purchase (excluding mortgage payments) of a principal residence for
the Employee; payment of tuition and related educational fees for
the next twelve months of post-secondary education for the
Employee, the Employee's Spouse, children or dependents; or the
need to prevent the eviction of the Employee from, or a foreclosure
on the mortgage of, the Employee's principal residence.
(2) SATISFACTION OF NEED. A distribution will be considered as
necessary to satisfy an immediate and heavy financial need of the
Employee only if:
(a) The Employee has obtained all distributions, other than
Hardship distributions, and all nontaxable loans under all
plans maintained by the Employer;
(b) All plans maintained by the Employer provide that the
Employee's Before Tax Contributions (and After Tax
Contributions) will be suspended for twelve months after the
receipt of the Hardship distribution;
(c) The distribution is not in excess of an immediate and heavy
financial need (including amounts necessary to pay any federal,
state or local income taxes or penalties reasonably anticipated
to result from the distribution); and
(d) All plans maintained by the Employer provide that the Employee
may not make Before Tax Contributions for the Employee's
taxable year immediately following the taxable year of the
Hardship distribution in excess of the applicable limit under
Section 402(g) of the Code for such taxable year less the
amount of such Employee's Before Tax Contributions for the
taxable year of the Hardship distribution.
(3) TAXES AND PENALTIES. The amount of an immediate and heavy financial
need may include any amounts necessary to pay any federal, state or
local income taxes or penalties reasonably anticipated to result
from the distribution.
3.10 WITHDRAWAL OF AFTER TAX CONTRIBUTIONS. Subject to the provisions of the
Plan, in accordance with rules for giving notice as determined by the
Committee, a Participant may withdraw as of the first Accounting Date
subsequent to receipt by the Committee of such notice:
(A) MAXIMUM AMOUNT. An amount equal to not more than 100% of the
Participant's After Tax Contribution Account determined as of such
Accounting Date. No Participant who has made any withdrawal of After
Tax Contributions in the twelve (12) months preceding the giving of
such notice may make a withdrawal under this Section. A Participant who
makes a withdrawal of After Tax Contributions shall be required to
suspend After Tax Contributions for a period of six (6) months,
commencing with the effective date of such withdrawal. A Participant
may, pursuant to Article III, elect to commence After Tax
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Contributions as of the first day of the first payroll period of the
month following the conclusion of such suspension period, or the first
payroll period of any month thereafter, upon advance written notice to
the Committee.
(B) MINIMUM AMOUNT. Notwithstanding anything to the contrary in this
Section 3.10, any withdrawal made pursuant to Section 3.10(A) shall be
for a minimum whole dollar amount not less than Five Hundred Dollars
($500.00); except that if the amount available for withdrawal is less
than Five Hundred Dollars ($500.00) then the minimum amount of the
withdrawal shall be the amount available.
(C) FORFEITURES. No forfeitures will occur solely as a result of an
Employee's withdrawal of After Tax Contributions.
(D) LOAN SECURITY. Notwithstanding anything to the contrary in this Section
3.10, a Participant may not make a withdrawal pursuant to this Section
of any portion of the Participants vested interest which has been
assigned to secure repayment of a loan in accordance with Section
11.10, below, until such time as the Committee shall have released said
portion so assigned.
3.11 WITHDRAWAL OF MATCHING CONTRIBUTIONS. Subject to the provisions of the
Plan, in accordance with rules for giving notice as determined by the
Committee, and as elected in the Adoption Agreement, a Participant may
withdraw as of the first Accounting Date subsequent to receipt by the
Committee of such notice:
(A) MAXIMUM AMOUNT. An amount equal to not more than 100% of the vested
amounts in the Participant's Matching Contribution Account determined
as of such Accounting Date. No Participant who has made any withdrawal
of Matching Contributions in the twelve (12) months preceding the
giving of such notice may make a withdrawal under this Section.
(B) MINIMUM AMOUNT. Notwithstanding anything to the contrary in this
Section 3.11, any withdrawal made pursuant to Section 3.11(A) shall be
for a minimum whole dollar amount not less than Five Hundred Dollars
($500.00); except that if the amount available for withdrawal is less
than Five Hundred Dollars ($500.00) then the minimum amount of the
withdrawal shall be the amount available.
(C) FORFEITURES. No forfeitures will occur solely as a result of an
Employee's withdrawal of Matching Contributions.
(D) LOAN SECURITY. Notwithstanding anything to the contrary in this Section
3.11, a Participant may not make a withdrawal, pursuant to this Section
of any portion of the Participant's vested interest which has been
assigned to secure repayment of a loan in accordance with Section
11.10, below, until such time as the Committee shall have released said
portion so assigned.
ARTICLE IV
OTHER CONTRIBUTIONS
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4.1 EMPLOYER CONTRIBUTIONS.
(A) MONEY PURCHASE PENSION PLANS ONLY. As elected by the Employer in the
Adoption Agreement, the Employer shall make contributions to the Plan.
(B) PROFIT SHARING PLANS AND 401(K) PLANS ONLY.
(1) EMPLOYER CONTRIBUTIONS. For each Plan Year, the Employer, shall or
may make contributions to the Plan in an amount as selected in the
Adoption Agreement or determined by Resolution of the Board of
Directors of the Employer.
(2) NET PROFITS NOT REQUIRED IF SO ELECTED IN ADOPTION AGREEMENT. If the
Employer elects, Employer Contributions under a profit sharing Plan
may be made without regard to Net Profits in accordance with Item
B(8)(a)(iii) of the Adoption Agreement. The Plan shall continue to
be designed to qualify as a profit-sharing Plan for purposes of
Sections 401(a), 402, 412, and 417 of the Code.
4.2 SEPARATE ACCOUNTS. An Employer Contribution Account shall be maintained for
each Participant to which will be credited the employer pension or profit
sharing contributions ("Employer Contributions"). Such accounts shall be
credited with the applicable contributions, earnings and losses,
distributions, and other adjustments.
4.3 VESTING. Employer Contributions will be vested in accordance with the
Employer's election in Item B(7), as applicable, of the Adoption Agreement.
In any event, Employer Contributions shall be fully vested at Normal
Retirement Date, upon the complete or partial termination of the Plan, and,
in profit sharing plans, upon the complete discontinuance of Employer
Contributions.
4.4 LIMITATION ON EMPLOYER CONTRIBUTIONS. The Employer's Contribution for any
Plan Year shall not exceed the maximum amount which the Employer may deduct
pursuant to Section 404 of the Code. The Employer Contributions shall be
payable not later than the time for filing the Employer's federal income tax
return, including extensions.
4.5 EMPLOYEE CONTRIBUTIONS.
(A) DISTRIBUTIONS FROM QUALIFIED PLANS - ROLLOVERS.
(1) If the Employer selects Item B(9) in the Adoption Agreement, an
Employee who is entitled to make a rollover contribution described
in Section 402(a)(5), Section 403(a)(4) or Section 408(d)(3) of the
Code ("Rollover Contribution"), may elect, with the approval of the
Committee, to make such a Rollover Contribution to the Plan. The
Employee shall deliver or cause to be delivered, to the Trustee the
cash which constitutes such Rollover Contribution at such time or
times and in such manner as shall be specified by the Committee. As
of the date of receipt of such property by the Trustee, a Rollover
Account shall be established in the name of the Employee who has
made a Rollover Contribution as provided in this Section 4.5 and
shall be credited with such assets on such date. A Rollover
Contribution shall not be deemed to be a contribution of such
Employee for any purpose of this Agreement.
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<PAGE> 32
All Rollover Contributions and the earnings on these contributions
shall be immediately fully vested and nonforfeitable.
(2) Subject to the provisions of the Plan, on advance notice given to
the Committee in accordance with rules established by the Committee
a Participant in a profit sharing Plan or 401(k) profit sharing Plan
may withdraw all or any part (in any whole dollar amount specified
by the Participant) of the value of any Rollover Account, provided
no Participant who has made any withdrawal under Section 4.5(A)
during the calendar year in which such notice is given may make an
additional withdrawal under this Section 4.5(A) during the remainder
of such year.
(B) NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS AND MATCHING CONTRIBUTIONS NO
LONGER ACCEPTED.
(1) This Plan will not accept nondeductible employee contributions and
matching contributions except pursuant to a 401(m) arrangement
described in Article III. Employee contributions for Plan Years
beginning after December 31, 1986, together with any matching
contributions as defined in Section 401(m) of the Code, will be
limited so as to meet the nondiscrimination test of Section 401(m).
(2) A separate account will be maintained by the Trustee for the
previously made nondeductible employee contributions of each
Participant.
(3) Employee contributions and earnings thereon will be nonforfeitable
at all times. No forfeitures will occur solely as a result of an
Employee's withdrawal of Employee contributions.
(C) DEDUCTIBLE EMPLOYEE CONTRIBUTIONS NO LONGER ACCEPTED. The Committee will
not accept deductible Employee contributions which are made for a
taxable year beginning after December 31, 1986. Contributions made prior
to that date will be maintained in a separate account which will be
nonforfeitable at all times. The account will share in the gains and
losses of the Trust Fund in the same manner as described in Article VI
of the Plan. No part of the deductible voluntary contribution account
will be used to purchase life insurance. Subject to Section 7.10, Joint
and survivor annuity requirements (if applicable), the Participant may
withdraw any part of the deductible voluntary contribution account by
making a written application to the Committee.
4.6 EXCLUSIVE BENEFIT. Except as provided in the Plan, the Employer has no
beneficial interest in the Trust Fund, and no part of the Trust Fund shall
revert or be repaid to the Employer, directly or indirectly, or diverted to
purposes other than for the exclusive benefit of Participants and their
Beneficiaries, except that (1) any contribution made by the Employer because
of a mistake of fact must be returned to the Employer within one year of the
contribution; (2) in the event the deduction of a contribution made by the
Employer is disallowed under Section 404 of the Code, such contribution (to
the extent disallowed) must be returned to the Employer within one year of
the disallowance of the deduction; and (3) in the event that the
Commissioner of Internal Revenue determines that the Plan is not initially
qualified under the Internal Revenue Code, any contribution made incident to
that initial qualification by the Employer must be returned to the Employer
within one year after the date the initial qualification is denied, but only
if the application for the
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qualification is made by the time prescribed by law for filing the
Employer's return for the taxable year in which the Plan is adopted or such
later date as the Secretary of the Treasury may prescribe.
4.7 FORM, PAYMENT AND ALLOCATION OF CONTRIBUTIONS. Contributions made for a Plan
Year shall be made in cash; provided, however, that if the Plan has an
Employer Stock Fund, contributions for the Employer Stock Fund may be made
in Employer Stock. Contributions shall be delivered to the Trustee at such
time or times as shall be agreed upon between the Committee and the Trustee.
The Committee shall instruct the Trustee as to the allocation of
contributions to the Participant's accounts pursuant to the elections made
in the Adoption Agreement. Employer Stock contributed to the Plan shall be
valued at fair market value at the time of its transfer to the Plan.
4.8 SAFE HARBOR ALLOCATION. Notwithstanding anything to the contrary in the
Adoption Agreement, in the event the requirements of Code Sections
401(a)(26) or 410(b) are not met during the Plan Year, Employer
Contributions will be allocated to Eligible Employees in the following order
until the applicable requirements are met:
(A) Eligible Employees employed by the Employer on the last day of the Plan
Year and who have completed more than 750 Hours of Service during the
Plan Year;
(B) Eligible Employees employed by the Employer on the last day of the Plan
Year and who have completed more than 500 but less than 750 Hours of
Service during the Plan Year;
(C) Eligible Employees employed by the Employer on the last day of the Plan
Year and who have completed 500 or fewer Hours of Service during the
Plan Year;
(D) Eligible Employees who have completed 750 or more Hours of Service
during the Plan Year;
(E) Eligible Employees who have completed more than 500 but less than 750
Hours of Service during the Plan Year.
In no event will Employees who have terminated employment with the
Employer during the Plan Year and who have completed 500 or fewer Hours
of Service during the Plan Year receive any allocation of Employer
Profit Sharing Contributions.
ARTICLE V
PERIOD OF PARTICIPATION
5.1 TERMINATION DATES. A Participant's Termination Date will be the date on
which his employment with the Employer is terminated because of the first to
occur of the following events:
(A) NORMAL RETIREMENT. The Participant retires from the employ of the
Employer upon attaining the Normal Retirement Date selected in the
Adoption Agreement. If the Employer enforces a mandatory retirement age
the Normal Retirement Date is the date the Participant attains the
lesser of that mandatory age or the age specified in the Adoption
Agreement.
(B) EARLY RETIREMENT. The Participant retires from the employ of the
Employer upon attaining the Early Retirement Date selected in the
Adoption Agreement. If a Participant terminates
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<PAGE> 34
employment prior to meeting any minimum age specified in the Adoption
Agreement but after having completed the specified minimum service
requirement, the terminated Participant shall be entitled to an early
retirement benefit upon attaining the minimum age required.
(C) LATE RETIREMENT. The Participant retires from the employ of the Employer
after the Normal Retirement Date. A Participant who continues to work
beyond the Normal Retirement Date shall continue participation in the
Plan on the same basis as the other Participants.
(D) DISABILITY RETIREMENT. The Participant is terminated from the employ of
the Employer because of Disability, as determined by the Committee, as
defined in Section 1.1(I), irrespective of his age.
(E) DEATH. The Participant's death.
(F) OTHER TERMINATION. The Participant terminates employment before Normal,
Early, Late or Disability Retirement.
If a Participant continues in the employ of the Employer but no longer
is a member of a class of Employees to which the Plan has been and
continues to be extended by the Employer, the Participant's Termination
Date nevertheless will be as stated above and his or her accounts will
be held as stated in Section 5.2.
5.2 RESTRICTED PARTICIPATION. When distribution of part or all of the benefits
to which a Participant is entitled under the Plan is deferred beyond or
cannot be made until after the Participant's Termination Date, or during any
period that a Participant continues in the employ of the Employer but no
longer is a member of a class of Employees to which the Plan has been and
continues to be extended by the Employer, the Participant, or in the event
of his or her death such Participant's Beneficiary, will be considered and
treated as a Participant for all purposes of the Plan, except that no share
of contributions or forfeitures will be credited to his or her Accounts (a)
for any period such Participant continues in the employ of the Employer but
no longer is a member of a class of Employees to which the Plan has been and
continues to be extended by the Employer, or (b) after the Participant's
Termination Date.
ARTICLE VI
ACCOUNTING
6.1 ACCOUNTS ESTABLISHED. There shall be established and maintained for each
Participant such accounts as are applicable, to reflect such Participant's
interest in each Investment Fund.
All income, expenses, gains and losses attributable to each account shall be
separately accounted for. The interest of each Participant in the Trust Fund
at any time shall consist of the amount credited to his or her accounts as
of the last preceding Valuation Date plus credits and minus debits to such
accounts since that date.
6.2 EMPLOYER CONTRIBUTIONS CONSIDERED MADE ON LAST DAY OF PLAN YEAR. Unless
otherwise elected in the Adoption Agreement, for purposes of this Article
VI, the Employer's Contribution under
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Article IV will be considered to have been made on the last day of the Plan
Year for which contributed.
6.3 ACCOUNTING STEPS. As of each Valuation Date, the Trustee shall:
(A) Charge to the prior account balances all previously uncharged payments
or distributions made from Participants' accounts since the last
preceding Valuation Date.
(B) Adjust the net credit balances in Participants' accounts upward or
downward, pro rata, so that the total of such net credit balances will
equal the then adjusted net worth of the Trust Fund;
(C) Allocate and credit Employer Contributions and any forfeitures (as
described in Section 7.3) that are to be allocated and credited as of
that date in accordance with Sections 6.5 and 6.6.
Notwithstanding the preceding, the Trustee shall be authorized to
utilize such other method of accounting for the gains or losses
experience by the Trust as may accurately reflect each Participant's
interest therein.
6.4 ALLOCATION OF EMPLOYER CONTRIBUTIONS.
(A) DISCRETIONARY PROFIT SHARING CONTRIBUTIONS.
(1) NONSTANDARDIZED PLANS. If the Plan is a nonstandardized Plan,
Employer Contributions for the Plan Year shall be allocated among
and credited to the Employer Contribution Accounts of each
Participant, including a Participant on leave of absence, who is
entitled to receive a contribution as elected by the Employer in the
Adoption Agreement, pursuant to the formula elected by the Employer
in Item B(8)(b) of the Adoption Agreement If elected in the Adoption
Agreement, Participants whose employment terminated because of
retirement, death or disability before the end of the Plan Year will
share in the contributions for the year if elected in the Adoption
Agreement.
(2) STANDARDIZED PLANS. Employer Contributions for the Plan Year shall
be allocated among and credited to the Employer Contribution Account
of each Participant who either completes more than 500 Hours of
Service during the Plan Year (or such lesser number of Hours of
Service as may be specified in the Adoption Agreement) or is
employed on the last day of the Plan Year pursuant to the formula
elected by the Employer in Item B(8)(b) of the Adoption Agreement.
If elected in the Adoption Agreement, Participants whose employment
terminated before the end of the Plan Year because of retirement,
death or disability will share in the contributions for the year if
elected in the Adoption Agreement.
(B) MONEY PURCHASE PENSION PLANS. Employer Contributions will be made and
allocated to the Employer Contribution Accounts of Participants for the
Plan Year as elected in the Adoption Agreement. Sections 6.4(A)(1) and
(2) above also apply to the Money Purchase Pension Plans.
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(C) PAIRED PLANS. Notwithstanding anything in the Plan to the contrary, if
the Employer maintains two plans which are Paired Plans, only one may
contain an allocation, as elected in the Adoption Agreement, utilizing
permitted disparity as defined in Code Section 401(l).
6.5 ALLOCATION OF FORFEITURES. As elected in Items B(11) and/or C(6) of the
Adoption Agreement, as of the last day of the Plan Year, any forfeitures
which arose under the Plan during that year shall be used to: (i) pay the
expenses of the Plan; (ii) reduce Employer Contributions; or, (iii) be
allocated to Participants accounts, as may be selected in the Adoption
Agreement. Forfeitures under (iii) shall be allocated as provided in Section
6.4.
6.6 LIMITATION ON ALLOCATIONS.
(A) DEFINITIONS: For purposes of limiting allocations pursuant to this
section, the following definitions shall apply:
(1) ANNUAL ADDITIONS: The sum of the following amounts credited to a
Participant's account for the Limitation Year:
(a) Employer Contributions;
(b) Employee Contributions;
(c) forfeitures;
(d) amounts allocated, after March 31, 1984, to an individual
medical account, as defined in Section 415 (l)(2) of the Code,
which is part of a pension or annuity Plan maintained by the
Employer are treated as Annual Additions to a defined
contribution Plan. Also amounts derived from contributions paid
or accrued after December 31, 1985, in taxable years ending
after such date, which are attributable to post-retirement
medical benefits, allocated to the separate account of a Key
Employee, as defined in Section 419A(d)(3) of the Code, under a
welfare benefit fund, as defined in Section 419(e) of the Code,
maintained by the Employer are treated as Annual Additions to a
defined contribution Plan; and,
(e) allocations under a simplified employee pension.
For this purpose, any Excess Amount applied under Sections
6.6(B)(4) or 6.6(C)(6) in the Limitation Year to reduce
Employer Contributions will be considered Annual Additions
for such Limitation Year.
(2) COMPENSATION: Compensation as described below, interpreted
consistently with the provisions of Code Section 414(s) and the
regulations issued thereunder, as may be selected by the Employer,
and uniformly applied for testing purpose:
(a) W-2 COMPENSATION (WAGES, TIPS, AND OTHER COMPENSATION REQUIRED
TO BE REPORTED UNDER SECTIONS 6041, 6051, AND 6052 OF THE CODE,
AS REPORTED ON FORM W-2). Compensation is defined as wages
within the meaning of
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Section 3401(a) and all other payments of compensation to an
Employee by the Employer (in the course of the Employer's trade
or business) for which the Employer is required to furnish the
Employee a written statement under Sections 6041(d), 6051(a)(3)
and 6052 of the Code. Compensation must be determined without
regard to any rules under Section 3401(a) that limit the
remuneration included in wages based on the nature or location
of the employment or the services performed (such as the
exception for agricultural labor in Section 3401(a)(2).
(b) WITHHOLDING COMPENSATION (SECTION 3401(A)). Compensation is
defined as wages within the meaning of Section 3401(a) for the
purposes of income tax withholding at the source but determined
without regard to any rules that limit the remuneration included
in wages based on the nature or location of the employment or
the services performed (such as the exception for agricultural
labor in Section 3401(a)(2)).
(c) SECTION 415 SAFE-HARBOR COMPENSATION. Compensation is defined as
wages, salaries, and fees for professional services and other
amounts received (without regard to whether or not an amount is
paid in cash) for personal services actually rendered in the
course of employment with the Employer maintaining the Plan to
the extent that the amounts are includible in gross income
(including, but not limited to, commissions paid salesman,
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 1.62-2(c)), and
excluding the following:
(i) Employer contributions to a Plan of deferred compensation
which are not includible in the Employee's gross income
for the taxable year in which contributed, or Employer
contributions under a simplified employee pension Plan to
the extent such contributions are deductible by the
Employee, or any distributions from a Plan of deferred
compensation;
(ii) 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;
(iii) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
(iv) other amounts which received special tax benefits, or
contributions made by the Employer (whether or not under a
salary reduction agreement) towards the purchase of an
annuity contract described in Section 403(b) of the Code
(whether or not the contributions are actually excludable
from the gross income of the Employee).
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Notwithstanding anything in the definitions of Compensation
preceding, at the discretion of the Employer, uniformly applied,
Compensation shall, for purposes of ADP and ACP testing as provided
for in Article III, include amounts not currently includible in
income pursuant to Code Sections 125, 402(a)(8), 402(h) and 403(b).
For allocation purposes, such amounts shall be includible as elected
in the Adoption Agreement.
For any self-employed Individual, Compensation will mean Earned
Income.
For Limitation Years beginning after December 31, 1991, for purposes
of applying the limitations of Section 6.6, Compensation for a
Limitation Year is the compensation actually paid or made available
during such Limitation Year.
Notwithstanding the preceding sentence, Compensation for a
Participant in a defined contribution Plan who is permanently and
totally disabled (as defined in Section 22(e)(3) of the Code) is the
Compensation such Participant would have received for the Limitation
Year if the Participant had been paid at the rate of Compensation
paid immediately before becoming permanently and totally disabled;
such imputed compensation for the disabled Participant may be taken
into account only if the Participant is not a Highly Compensated
Employee, (as defined in Section 414(q) of the Code), and
contributions made on behalf of such Participant are nonforfeitable
when made.
(3) DEFINED BENEFIT FRACTION: A fraction, the numerator of which is the
sum of the Participant's Projected Annual Benefits under all the
defined benefit plans (whether or not terminated) maintained by the
Employer, and the denominator of which is the lesser of 125 percent
of the dollar limitation determined for the Limitation Year under
Sections 415(b) and (d) of the Code or 140 percent of the
Participant's Highest Average Compensation, including any
adjustments under Section 415(b) of the Code.
Notwithstanding the above if the Participant was a participant as of
the first day of the first Limitation Year beginning after December
31, 1986, in one or more defined benefit plans maintained by the
Employer which were in existence on May 6, 1986, the denominator of
this fraction will not be less than 125 per cent of the sum of the
annual benefits under such plans which the Participant had accrued
as of the close of the last Limitation Year beginning before January
1, 1987, disregarding any changes in the terms and conditions of the
Plan after May 5, 1986. The preceding sentence applies only if the
defined benefit plans individually and in the aggregate satisfied
the requirements of Section 415 for all Limitation Years beginning
before January 1, 1987.
(4) DEFINED CONTRIBUTION DOLLAR LIMITATION: For purposes of calculating
the Maximum Permissible Amount: $30,000 or, if greater, one-fourth
of the defined benefit dollar limitation set forth in Section
415(b)(1) of the Code as in effect for the Limitation Year.
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(5) DEFINED CONTRIBUTION FRACTION: A fraction, the numerator of which is
the sum of the Annual Additions to the Participant's accounts under
all the defined contribution plans (whether or not terminated)
maintained by the Employer for the current and all prior Limitation
Years, (including the Annual Additions attributable to the
Participant's nondeductible employee contributions to all defined
benefit plans, whether or not terminated, maintained by the
Employer, and the Annual Additions attributable to all welfare
benefit funds, as defined in Section 419(e) of the Code, individual
medical accounts, as defined in Section 415(l)(2) of the Code, and
simplified employee pension, maintained by the Employer), and the
denominator of which is the sum of the maximum aggregate amounts for
the current and all prior Limitation Years of service with the
Employer (regardless of whether a defined contribution Plan was
maintained by the Employer). The maximum aggregate amount in any
Limitation Year is the lesser of 125 percent of the dollar
limitation determined under Sections 415(b) and (d) of the Code in
effect under Section 415(c)(1)(A) of the Code or 35 percent of the
Participant's Compensation for such year.
If the Employee was a participant as of the end of the first day of
the first Limitation Year beginning after December 31, 1986, in one
or more defined contribution plans maintained by the Employer which
were in existence on May 6, 1986, the numerator of this fraction
will be adjusted if the sum of this fraction and the Defined Benefit
Fraction would otherwise exceed 1.0 under the terms of this Plan.
Under the adjustment, an amount equal to the product of (1) the
excess of the sum of the fractions over 1.0 times (2) the
denominator of this fraction, will be permanently subtracted from
the numerator of this fraction. The adjustment is calculated using
the fractions as they would be computed as of the end of the last
Limitation Year beginning before January 1, 1987, and disregarding
any changes in the terms and conditions of the Plan made after May
5, 1986, but using the Section 415 limitation applicable to the
first Limitation Year beginning on or after January 1, 1987.
The Annual Addition for any Limitation Year beginning before January
1, 1987, shall not be recomputed to treat all Employee contributions
as Annual Additions.
(6) EMPLOYER: For purposes of this Section 6.6: the Employer that adopts
this Plan, and all members of a controlled group of corporations (as
defined in section 414(b) of the Code as modified by Section 415(h),
all commonly controlled trades or businesses (as defined in Section
414(c) as modified by Section 415(h)) or affiliated service groups
(as defined in Section 414(m)) of which the adopting Employer is a
part, and any other entity required to be aggregated with the
Employer pursuant to regulations under Section 414(o) of the Code.
(7) EXCESS AMOUNT: The excess of the Participant's Annual Additions for
the Limitation Year over the Maximum Permissible Amount.
(8) HIGHEST AVERAGE COMPENSATION: For purposes of calculating the
Defined Benefit Fraction, the average compensation for the three (3)
consecutive Years of Service with the Employer that produces the
highest average. A Year of Service with the
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Employer is the twelve-consecutive month period defined in Item
B(4)(j) of the Adoption Agreement.
(9) LIMITATION YEAR: A calendar year or any other 12 consecutive month
period elected in Item B(4)(d) of the Adoption Agreement. All
qualified plans maintained by the Employer must use the same
Limitation Year. If the Limitation Year is amended to a different
12-consecutive month period, the new Limitation Year must begin on
a date within the Limitation Year in which the amendment is made.
(10) MASTER OR PROTOTYPE PLAN: A Plan the form of which is the subject
of a favorable opinion letter from the Internal Revenue Service.
(11) MAXIMUM PERMISSIBLE AMOUNT: The maximum Annual Addition that may be
contributed or allocated to a Participant's account under the Plan
for any Limitation Year shall not exceed the lesser of:
(a) the Defined Contribution Dollar Limitation, or
(b) 25 percent of the Participant's Compensation for the Limitation
Year.
The Compensation limitation referred to in (b) shall not apply
to any contribution for medical benefits (within the meaning of
Section 401(h) or Section 419A(f)(2) of the Code) which is
otherwise treated as an Annual Addition under Section 415(l)(1)
or 419A(d)(2) of the Code.
If a short Limitation Year is created because of an amendment
changing the Limitation Year to a different 12-consecutive
month period, the Maximum Permissible Amount will not exceed
the Defined Contribution Dollar Limitation multiplied by the
following fraction:
Number of months in the short Limitation Year
---------------------------------------------
12
(12) PROJECTED ANNUAL BENEFIT: For purposes of calculating the Defined
Benefit Fraction: the annual retirement benefit (adjusted to an
actuarially equivalent straight life annuity if such benefit is
expressed in a form other than a straight life annuity or qualified
joint and survivor annuity) to which the Participant would be
entitled under the terms of the Plan, assuming: (1) the Participant
will continue employment until Normal Retirement Date under the
Plan, (or current age, if later), and (2) the Participant's
Compensation for the current Limitation Year and all other relevant
factors used to determine benefits under the Plan will remain
constant for all future Limitation Years.
(B) ANNUAL ADDITION LIMITATIONS:
(1) If the Participant does not participate in, and has never
participated in another qualified Plan or welfare benefit fund, as
defined in Section 419(e) of the Code maintained by the Employer,
or an individual medical account, as defined in Section
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415(l)(2) of the Code, maintained by the Employer, or a simplified
employee pension, as defined in Section 408(K) of the Code,
maintained by the Employer which provides an Annual Addition as
defined in Section 6.6(E), the amount of Annual Additions which may
be credited to the Participant's account for any Limitation Year
will not exceed the lesser of the Maximum Permissible Amount
or any other limitation contained in this Plan. If the Employer
Contribution that would otherwise be contributed or allocated to
the Participant's account would cause the Annual Additions for the
Limitation Year to exceed the Maximum Permissible Amount, the
amount contributed or allocated will be reduced so that the Annual
Additions for the Limitation Year will equal the Maximum
Permissible Amount.
(2) Prior to determining the Participant's actual Compensation for the
Limitation Year, the Employer may determine the Maximum Permissible
Amount for a Participant on the basis of a reasonable estimation of
the Participant's Compensation for the Limitation Year, uniformly
determined for all Participants similarly situated.
(3) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the Limitation
Year will be determined on the basis of the Participant's actual
Compensation for the Limitation Year.
(4) If pursuant to Section 6.6(B)(3) or as result of the allocation of
forfeitures, there is an Excess Amount, the excess will be disposed
of as follows:
(a) Any nondeductible voluntary employee contributions, to the
extent they would reduce the Excess Amount, will be returned to
the Participant.
(b) If after the application of paragraph (a) an Excess Amount still
exists and the Participant is covered by the Plan at the end of
the Limitation Year, the Excess Amount in the Participant's
account will be used to reduce Employer Contributions (including
any allocation of forfeitures) for such Participant in the next
Limitation year, and each succeeding Limitation Year, if
necessary.
(c) If after the application of paragraph (a) an Excess Amount still
exists, and the Participant is not covered by the Plan at the
end of a Limitation Year, the Excess Amount will be held
unallocated in a suspense account. The suspense account will be
applied to reduce future Employer Contributions (including
allocation of any forfeitures) for all remaining Participants in
the next Limitation Year and each succeeding Limitation Year, if
necessary.
(d) If a suspense account is in existence at any time during a
Limitation Year pursuant to this Section 6.6(A), it will not
participate in the allocation of the trust's investment gains
and losses. If a suspense account is in existence at any time
during a particular Limitation Year, all amounts in the suspense
account must be allocated and reallocated to Participants'
accounts before any Employer Contributions or any Employee
contributions may be made to the Plan for that Limitation Year.
Excess Amounts may not be distributed to Participants or former
Participants.
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(C) MULTIPLE PLAN LIMITATION.
(1) This Section 6.6(C) applies if, in addition to this Plan, the
Participant is covered under another qualified Master or Prototype
defined contribution Plan maintained by the Employer, a welfare
benefit fund, as defined in Section 419(e) of the Code maintained by
the Employer, or an individual medical account, as defined in
Section 415(l)(2) of the Code, maintained by the Employer, or a
simplified employee pension maintained by the employer which
provides an Annual Addition as defined in Section 6.6(A) during any
Limitation Year. The Annual Additions which may be credited to a
Participant's accounts under this Plan for any such Limitation Year
shall not exceed the Maximum Permissible Amount reduced by the
Annual Additions credited to a Participant's accounts under the
other qualified master and prototype defined contribution plans,
welfare benefit funds, individual medical accounts, and simplified
employee pensions for the same Limitation Year. If the Annual
Additions with respect to the Participant under other qualified
master and prototype defined contribution plans and welfare benefit
funds, individual medical accounts, and simplified employee pension,
maintained by the Employer are less than the Maximum Permissible
Amount and the contributions that would otherwise be contributed or
allocated to the Participant's Employer Contribution Account under
this Plan would cause the Annual Additions for the Limitation Year
to exceed this limitation, the amount contributed or allocated will
be reduced so that the Annual Additions under all such plans and
funds for the Limitation Year will equal the Maximum Permissible
Amount. If the Annual Additions with respect to the Participant
under such other qualified master and prototype defined contribution
plans, welfare benefit funds individual medical accounts, and
simplified employee pension, in the aggregate are equal to or
greater than the Maximum Permissible Amount, no amount will be
contributed or allocated to the Participant's Employer Contribution
Account under this Plan for the Limitation Year.
(2) Prior to determining the Participant's actual Compensation for the
Limitation Year, the Employer may determine the Maximum Permissible
Amount for a Participant in the manner described in Section
6.6(B)(2).
(3) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the Limitation
Year will be determined on the basis of the Participant's actual
Compensation for the Limitation Year.
(4) If, pursuant to Section 6.6(C)(3) or as a result of the allocation
of forfeitures, a Participant's Annual Additions under this Plan and
all other plans result in an Excess Amount for a Limitation Year,
the Excess Amount shall be deemed to consist of the amounts last
allocated, except that Annual Additions attributable to a simplified
employee pension will be deemed to have been allocated first,
followed by annual additions to a welfare benefit fund or individual
medical account regardless of the actual allocation date.
(5) If an Excess Amount was allocated to a Participant on an allocation
date of this Plan which coincides with an allocation date of another
Plan, the Excess Amount attributed to this Plan will be the product
of:
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(a) the total Excess Amount allocated as of such date, times
(b) the ratio of (i) the Annual Additions allocated to the
Participant for the Limitation Year as of such date under this
Plan to (ii) the total Annual Additions allocated to the
Participant for the Limitation Year as of such date under this
and all other qualified Master or Prototype defined contribution
plans.
(6) Any Excess Amount attributed to this Plan should be disposed of as
provided in Section 6.6(C)(4).
(D) If the Participant is covered under another qualified defined
contribution Plan maintained by the Employer which is not a Master or
Prototype Plan, Annual Additions which may be credited to the
Participant's accounts under this Plan for any Limitation Year will be
limited in accordance with Section 6.6(C) (1-6) as though the Plan were
a Master or Prototype Plan unless the Employer provides other
limitations in Item B(12) of the Adoption Agreement.
(E) If the Employer maintains, or at any time maintained, a qualified
defined benefit Plan covering any Participant in this Plan, the sum of
the Participant's Defined Benefit Plan Fraction and Defined Contribution
Plan Fraction will not exceed 1.0 in any Limitation Year. The Annual
Additions which may be credited to the Participant's accounts under this
Plan for any Limitation Year will be limited in accordance with Item
B(12) of the Adoption Agreement.
6.7 REPORTS TO PARTICIPANTS. The Committee shall cause reports to be made at
least annually to each Participant and to the Beneficiary of each deceased
Participant as to the value of each such Participant's accounts, as of an
appropriate preceding Valuation Date.
ARTICLE VII
PAYMENT OF ACCOUNT BALANCES
7.1 TERMINATION OF EMPLOYMENT UPON DISABILITY OR DEATH. A Participant shall
become fully vested in his or her Employer Contribution Accounts if the
Participant becomes Disabled under Sections 5.1(A), (B), (C) or (D) or dies
while still employed. The accounts of a Participant who retires becomes
Disabled or dies will become distributable to the Participant or to his or
her Spouse or Beneficiary. If distributed immediately, subject to Section
7.4, the distributable balance, after adjustments, will be determined as
soon as practicable following the receipt by the Trustee of written notice
of the Participant's termination from the Committee.
7.2 TIMING FOR DETERMINING ACCOUNT BALANCE UPON TERMINATION OF EMPLOYMENT PRIOR
TO RETIREMENT, DISABILITY OR DEATH. If a Participant terminates employment
with the Employer before retirement under Sections 5.1(F) the vested portion
of the Participant's Employer Contribution Account and/or Matching Account
shall be determined and such Participant's accounts will be distributable to
the Participant. If distributed immediately, subject to Section 7.4, the
distributable balance, after adjustments, will be determined as soon as
practicable following receipt by the Trustee of written notice of the
Participant's termination from the Committee. The account balance
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shall be distributable at such time as elected in the Adoption Agreement,
but in no event shall an account balance not be distributable later than the
Participant's Normal Retirement Date.
7.3 VESTING ON DISTRIBUTION BEFORE BREAK-IN-SERVICE; CASH-OUTS.
(A) If an Employee terminates service, and the value of the Employee's
vested account balance derived from Employer and Employee contributions
is not greater than $3,500, the Employee will receive a distribution of
the value of the entire vested portion of such account balances, and
Rollover Account balance, if any. The nonvested portion will be treated
as a forfeiture. For purposes of this Section 7.3, if the value of an
Employee's vested account balance is zero, the Employee shall be deemed
to have received a distribution of such vested account balance. A
Participant's vested account balance shall not include accumulated
deductible employee contributions within the meaning of Section
72(o)(5)(B) of the Code for Plan Years beginning prior to January 1,
1989.
(B) If an Employee terminates service, and elects, in accordance with the
requirements of Section 7.4, to receive the value of the Employee's
vested account balance, the nonvested portion will be treated as a
forfeiture. If the Employee elects to have distributed less than the
entire vested portion of the balance in the Employer Contribution
Account, the part of the nonvested portion that will be treated as a
forfeiture is the total nonvested portion multiplied by a fraction, the
numerator of which is the amount of the distribution attributable to
Employer Contributions and the denominator of which is the total value
of the vested balance in the Employer Contribution Account.
(C) If an Employee receives a distribution pursuant to this Section 7.3 and
the Employee resumes employment covered under this Plan, the Employee's
Employer Contribution Account and/or Matching Account balance will be
restored to the amount on the date of distribution if the Employee
repays to the Plan the full amount of the distribution attributable to
Employer contributions before the earlier of 5 years after the first
date on which the Participant is subsequently reemployed by the
Employer, or the date the Participant incurs five (5) consecutive one
(1) year Breaks in Service following the date of the distribution. If an
Employee is deemed to receive a distribution pursuant to this Section
7.3, and the Employee resumes employment covered under this Plan before
the date the Participant incurs five (5) consecutive one (1) year Breaks
in Service, upon the reemployment of such Employee, the Employer
Contribution Account balance and/or Matching Account balance of the
Employee will be restored to the amount on the date of such deemed
distribution.
7.4 RESTRICTIONS ON IMMEDIATE DISTRIBUTIONS.
(A) If the value of a Participant's vested account balance derived from
Employer and Employee contributions exceeds (or at the time of any prior
distribution exceeded) $3,500, and the account balance is immediately
distributable, the Participant and the Participant's Spouse (or where
either the Participant or the Spouse has died, the survivor) must
consent to any distribution of such account balance. The consent of the
Participant and the Participant's Spouse shall be obtained in writing
within the 90-day period ending on the annuity starting date. The
annuity starting date is the first day of the first period for which an
amount is paid as an annuity or any other form. The Committee shall
notify the Participant and the
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Participant's Spouse of the right to defer any distribution until the
Participant's account balance is no longer immediately distributable.
Such notification shall include a general description of the material
features, and an explanation of the relative values of, the optional
forms of benefit available under the Plan in a manner that would satisfy
the notice requirements of Section 417(a)(3), and shall be provided no
less than 30 days and no more than 90 days prior to the annuity starting
date. However, distribution may commence less than 30 days after the
notice described in the preceding sentence is given, provided the
distribution is one to which sections 401(a)(11) and 417 of the Internal
Revenue Code do not apply, the plan administrator clearly informs the
participant that the participant has a right to a period of at least 30
days after receiving the notice to consider the decision of whether or
not to elect a distribution (and, if applicable, a particular
distribution option), and the participant, after receiving the notice,
affirmatively elects a distribution.
Notwithstanding the foregoing, only the Participant need consent to the
commencement of a distribution in the form of a Qualified Joint and
Survivor Annuity while the account balance is immediately distributable.
(Furthermore, if payment in the form of a Qualified Joint and Survivor
Annuity is not required with respect to the Participant pursuant to
Section 7.10 of the Plan, only the Participant need consent to the
distribution of an account balance that 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 Section 401(a)(9) or Section 415 of the Code. In addition, upon
termination of this Plan if the Plan does not offer an annuity option
(purchased from a commercial provider), and if the Employer or any
entity within the same controlled group as the Employer does not
maintain another defined contribution Plan (other than an employee stock
ownership Plan as defined in Section 4975(e)(7) of the Code), the
Participant's account balance will, without the Participant's consent,
be distributed to the Participant. However, if any entity within the
same controlled group as the Employer maintains another defined
contribution Plan (other than an employee stock ownership Plan as
defined in Section 4975(e)(7) of the Code) then the Participant's
account balance will be transferred, without the Participant's consent,
to the other Plan if the Participant does not consent to an immediate
distribution.
An account balance is immediately distributable if any part of the
account balance could be distributed to the Participant (or surviving
spouse) before the Participant attains or would have attained if not
deceased) the later of the Normal Retirement Date or age 62.
(B) For purposes of determining the applicability of the foregoing consent
requirements to distributions made before the first day of the first
Plan Year beginning after December 31, 1988, the Participant's vested
account balance shall not include amounts attributable to accumulated
deductible employee contributions within the meaning of Section
72(o)(5)(B) of the Code.
7.5 COMMENCEMENT OF BENEFITS. Unless the Participant elects otherwise, payments
will be made or commence to a Participant by the Trustee, as directed by the
Committee, no later than the sixtieth (60th) day after the latest of the
close of the Plan Year in which (1) the Participant attains age sixty-five
(65) (or Normal Retirement Date; if earlier); (2) occurs the tenth (10th)
anniversary of the year in which the Participant commenced participation in
the Plan; or (3) the Participant terminates his or her service with the
Employer.
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Notwithstanding the foregoing, the failure of a Participant and Spouse to
consent to a distribution while a benefit is immediately distributable,
within the meaning of Section 7.4 of the Plan, shall be deemed to be an
election to defer commencement of payment of any benefit sufficient to
satisfy this section.
7.6 TIMING AND MODES OF DISTRIBUTION.
(A) GENERAL RULES.
(1) Subject to Section 7.10, Joint and Survivor Annuity Requirements,
the requirements of this Section 7.6 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 7.6 apply to calendar years beginning
after December 31, 1984.
(2) All distributions required under this Section 7.6 shall be
determined and made in accordance with the Income Tax Regulations
under Section 401(a)(9), including the minimum distribution
incidental benefit requirement of Section 1.401(a)(9)-2 of the
regulations.
(3) The normal form of payment for a profit-sharing Plan satisfying the
requirements of Section 7.10(F) hereof shall be a single sum with no
option for annuity payments; provided, however, that distributions
may be made:
(a) In installment payments, if the Employer has elected installment
payments in Item B(10)(a) of the Adoption Agreement;
(b) Through such other form of benefit as may be identified in Item
B(10)(a) of the Adoption Agreement, which shall be available to
Participants as an optional form of benefit payment, and shall
preclude Employer discretion;
(c) Through such other form of benefits as may be required to be
protected as Section 411(d)(6) protected benefits.
(B) REQUIRED BEGINNING DATE. The entire interest of a Participant must be
distributed or begin to be distributed no later than the Participant's
required beginning date.
(C) LIMITS ON DISTRIBUTION PERIODS. As of the first distribution calendar
year, distributions, if not made in a single-sum, may only be made over
one of the following periods (or a combination thereof):
(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
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(4) a period certain not extending beyond the joint and last survivor
expectancy of the Participant and a designated Beneficiary.
(D) DETERMINATION OF AMOUNT TO BE DISTRIBUTED EACH YEAR. If the
Participant's interest is to be distributed in other than a single sum,
the following minimum distribution rules shall apply on or after the
required beginning date:
(1) INDIVIDUAL ACCOUNT.
(a) If a Participant's benefit is to be distributed over:
(i) 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
(ii) a period not extending beyond the life expectancy of the
designated Beneficiary, the amount required to be
distributed for each calendar year, beginning with
distributions for the first distribution calendar year,
must at least equal the quotient obtained by dividing the
Participant's benefit by the applicable life expectancy.
(b) 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.
(c) For calendar years beginning after December 31, 1988, the amount
to be distributed each year, beginning with distributions for
the first distribution calendar year shall not be less than the
quotient obtained by dividing the Participant's benefit by the
lesser of (1) the applicable life expectancy or (2) if the
Participant's Spouse is not the designated Beneficiary, the
applicable divisor determined from the table set forth in Q&A-4
of Section 1.401(a)(9)-2 of the Income Tax Regulations.
Distributions after the death of the Participant shall be
distributed using the applicable life expectancy in Section
(1)(a) above as the relevant divisor without regard to
Regulations Section 1.401(a)(9)-2.
(d) The minimum distribution required for the Participant's first
distribution calendar year must be made on or before the
Participant's required beginning date. The minimum distribution
for other calendar years, including the minimum distribution for
the distribution calendar year in which the Employee's required
beginning date occurs, must be made on or before December 31 of
that distribution calendar year.
(2) OTHER FORMS. If the Participant's benefit is distributed in the form
of an annuity purchased from an insurance company, distributions
thereunder shall be made in accordance with the requirements of
Section 401(a)(9) of the Code and the regulations thereunder.
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(E) DEATH DISTRIBUTION PROVISIONS
(1) DISTRIBUTION BEGINNING BEFORE DEATH. If the Participant dies after
distribution of his or her 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 or her interest begins, distribution of the
Participant's entire interest shall be completed by December 31 of
the calendar year containing the fifth anniversary of the
Participant's death except to the extent that an election is made to
receive distributions in accordance with (a) or (b) below:
(a) if any portion of the Participant's interest is payable to a
designated Beneficiary, distributions may be made over the life
or over a period certain not greater than the life expectancy of
the designated Beneficiary commencing on or before December 31
of the calendar year immediately following the calendar year in
which the Participant died;
(b) if the designated Beneficiary is the Participant's surviving
Spouse, the date distributions are required to begin in
accordance with (a) above shall not be earlier than the later of
(1) December 31 of the calendar year immediately following the
calendar year in which the Participant died and (2) December 31
of the calendar year in which the Participant would have
attained age 70-1/2.
If the Participant has not made an election pursuant to this
Section 7.6(E)(2) by the time of his or her death, the
Participant's designated Beneficiary must elect the method of
distribution no later than the earlier of (1) December 31 of the
calendar year in which distributions would be required to begin
under this section, or (2) December 31 of the calendar year in
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) SURVIVING SPOUSE'S DEATH. For purposes of Section (E)(2) above, if
the surviving Spouse dies after the Participant, but before payments
to such Spouse begin, the provisions of Section (E)(2) with the
exception of paragraph (b) therein, shall be applied as if the
surviving Spouse were the Participant.
(4) MINOR BENEFICIARY. For purposes of this Section (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.
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(5) DISTRIBUTION CONSIDERED TO BEGIN ON REQUIRED BEGINNING DATE. For the
purposes of this Section (E), distribution of a Participant's
interest is considered to begin on the Participant's required
beginning date (or, if Section (E)(3) above is applicable, the date
distribution is required to begin to the surviving Spouse pursuant
to Section (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.
(F) DEFINITIONS.
(1) APPLICABLE LIFE EXPECTANCY: The life expectancy (or joint and last
survivor expectancy) calculated using the attained age of the
Participant (or designated Beneficiary) as of the Participant's (or
designated Beneficiary's) birthday in the applicable calendar year
reduced by one for each calendar year which has elapsed since the
date life expectancy was first calculated. If life expectancy is
being recalculated, the applicable life expectancy shall be the life
expectancy as so recalculated. The applicable calendar year shall be
the first distribution calendar year, and if life expectancy is
being recalculated such succeeding calendar year.
(2) DESIGNATED BENEFICIARY: The individual who is designated as the
Beneficiary under the Plan in accordance with Section 401(a)(9) and
the proposed regulations thereunder.
(3) DISTRIBUTION CALENDAR YEAR: A calendar year for which a minimum
distribution is required. For distributions beginning before the
Participant's death, the first distribution calendar year is the
calendar year immediately preceding the calendar year which contains
the Participant's required beginning date. For distributions
beginning after the Participant's death, the first distribution
calendar year is the calendar year in which distributions are
required to begin pursuant to Section (E) above.
(4) LIFE EXPECTANCY: Life expectancy and joint and last survivor
expectancy are computed by use of the expected return multiples in
Tables V and VI of Section 1.72-9 of the Income Tax Regulations.
Unless otherwise elected by the Participant (or Spouse, in the case
of distributions described in Section (E)(2)(b) above) by the time
distributions are required to begin, life expectancies shall be
recalculated annually. Such election shall be irrevocable as to the
Participant (or Spouse) and shall apply to all subsequent years. The
life expectancy of a non-spouse Beneficiary may not be recalculated.
(5) PARTICIPANT'S BENEFIT:
(a) The account balance as of the last valuation date in the
calendar year immediately preceding the distribution calendar
year (valuation calendar year) increased by the amount of any
contributions or forfeitures allocated to the account balance as
of dates in the valuation calendar year after the
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valuation date and decreased by distributions made in the
valuation calendar year after the valuation date.
(b) Exception for second distribution calendar year. For purposes of
paragraph (a) 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.
(6) REQUIRED BEGINNING DATE:
(a) GENERAL RULE. The required beginning date of a Participant is
the first day of April of the calendar year following the
calendar year in which the Participant attains age 70-1/2.
(b) TRANSITIONAL RULES. The required beginning date of a Participant
who attains age 70-1/2 before January 1, 1988, shall be
determined in accordance with (1) or (2) below:
(i) Non-5-percent owners. The required beginning date of a
Participant who is not a 5-percent owner is the first day
of April of the calendar year following the calendar year
in which the later of retirement or attainment of age
70-1/2 occurs.
(ii) 5-percent owners. The required beginning date of a
Participant who is a 5-percent owner during any year
beginning after December 31, 1979, is the first day of
April following the later of:
(a) the calendar year in which the participant attains age
70-1/2, or
(b) the earlier of the calendar year with or within which
ends the Plan Year in which the Participant becomes a
5-percent owner, or the calendar year in which the
Participant retires.
The required beginning date of a Participant who is not a
5-percent owner who attains age 70-1/2 during 1988 and who has
not retired as of January 1, 1989, is April 1, 1990.
(c) 5-PERCENT OWNER. A Participant is treated as a 5-percent owner
for purposes of this Section if such Participant is a 5-percent
owner as defined in Section 416(i) of the Code (determined in
accordance with Section 416 but without regard to whether the
Plan is top-heavy) at any time during the Plan Year ending with
or within the calendar year in which such owner attains age
66-1/2 or any subsequent Plan Year.
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(d) 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.
(G) TRANSITIONAL RULE.
(1) DISTRIBUTIONS TO 5-PERCENT OWNERS. Notwithstanding the other
requirements of this Section 7.6 and subject to the requirements of
Section 7.10, Joint and Survivor Annuity Requirements, distributions
on behalf of any Employee, including a 5-percent owner, may be made
in accordance with all of the following requirements (regardless of
when such distribution commences):
(a) The distribution by the plan is one which would not have
disqualified such plan under Section 401(a)(9) of the Internal
Revenue Code as in effect prior to amendment by the Deficit
Reduction Act of 1984.
(b) The distribution is in accordance with a method of distribution
designated by the Employee whose interest in the plan is being
distributed or, if the Employee is deceased, by a Beneficiary of
such Employee.
(c) Such designation was in writing, was signed by the Employee or
the Beneficiary, and was made before January 1, 1984.
(d) The Employee had accrued a benefit under the Plan as of December
31, 1983.
(e) The method of distribution designated by the Employee or the
Beneficiary specifies the time at which distribution will
commence, the period over which distributions will be made, and
in the case of any distribution upon the Employee's death, the
Beneficiaries of the Employee listed in order of priority.
(2) DISTRIBUTION ON DEATH. A distribution upon death will not be covered
by this transitional rule unless the information in the designation
contains the required information described above with respect to
the distributions to be made upon the death of the Employee.
(3) DESIGNATION OF DISTRIBUTION METHOD. For any distribution which
commences before January 1, 1984, but continues after December 31,
1983, the Employee, or the Beneficiary, to whom such distribution is
being made, will be presumed to have designated the method of
distribution under which the distribution is being made if the
method of distribution was specified in writing and the distribution
satisfies the requirements in subsections (G)(1)(a) and (e).
(4) REVOCATION OF DESIGNATIONS. If a designation is revoked any
subsequent distribution must satisfy the requirements of Section
401(a)(9) of the Code and the regulations thereunder. If a
designation is revoked subsequent to the date distributions are
required to begin, the plan must distribute by the end of the
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calendar year following the calendar year in which the revocation
occurs the total amount not yet distributed which would have been
required to have been distributed to satisfy Section 401(a)(9) of
the Code and the regulations thereunder, but for the Section
242(b)(2) election. For calendar years beginning after December 31,
1988, such distributions must meet the minimum distribution
incidental benefit requirements in Section 1.401(a)(9)-2 of the
Income Tax Regulations. Any changes in the designation will be
considered to be a revocation of the designation. However, the mere
substitution or addition of another Beneficiary (one not named in
the designation) under the designation will not be considered to be
a revocation of the designation, so long as such substitution or
addition does not alter the period over which distributions are to
be made under the designation, directly or indirectly (for example,
by altering the relevant measuring life). In the case in which an
amount is transferred or rolled over from one Plan to another Plan,
the rules in Q&A J-2 and Q&A J-3 shall apply.
7.7 DESIGNATION OF BENEFICIARY.
(A) DEFAULT BENEFICIARY. In the case of a Participant who is married, the
Participant's Beneficiary shall be the Participant's Spouse, but if the
Participant's Spouse consents as provided in this Section 7.7, or if the
Participant is not married, then the Participant shall have the right
to designate that after such Participant's death such Participant's
accounts shall be distributed to a designated Beneficiary or
Beneficiaries.
(B) SPOUSAL CONSENT. Any consent of a Spouse given pursuant to this Section
must be in writing and given prior to the death of the Participant. Such
consent must acknowledge the effect of the Participant's Beneficiary
designation, the identity of any non-Spouse Beneficiary, including any
class of Beneficiaries and contingent Beneficiaries, and the consent
must be witnessed by a Plan representative or a Notary Public. The
Participant may not subsequently change the designation of his or her
Beneficiary unless his Spouse consents to the new designation in
accordance with the requirements set forth in the preceding sentence.
The consent of a Participant's Spouse shall not be required if the
Participant establishes to the satisfaction of the Committee that
consent may not be obtained because there is no Spouse, the Spouse
cannot be located or because of such other circumstances as the
Secretary of the Treasury may prescribe by regulations. A Spouse's
consent shall be irrevocable. Any consent by a Spouse, or establishment
that the consent of the Spouse may not be obtained, shall be effective
only with respect to that Spouse.
(C) CHANGING BENEFICIARIES. Subject to Subparagraphs (A) and (B) above, the
Participant's designation of Beneficiary may be made, changed or revoked
by the Participant at any time by a written instrument, in form
satisfactory to the Committee, and shall become effective only when
executed by such Participant (and, if applicable, consented to by the
Participant's Spouse as set forth in Section 7.7(B)) and filed with the
Committee prior to such Participant's death. If all of the Beneficiaries
named in such designation shall have predeceased such Participant, or
die prior to complete distribution of the Participant's accounts, or if
such Participant fails to execute and file a designation and is not
survived by a Spouse the payment of such Participant's accounts shall be
made pursuant to the Plan and to such Beneficiaries as required by state
law. Neither the Employer, the Committee, nor
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<PAGE> 53
the Trustee, shall have any duty to see that such Participant, any
Spouse or any Beneficiary executes and files any such designation with
the Committee.
7.8 OPTIONAL FORMS OF BENEFIT. The optional forms of benefit provided by this
Plan are not subject to Employer discretion and are made available to all
Participants on a nondiscriminatory basis. The optional forms of benefit
are described in Articles III and VII, as may be selected in the Adoption
Agreement. If selected in Item B(13) of the Adoption Agreement, the
Employer may attach to the Plan a list of the Section "411(d)(6) protected
benefits" that must be preserved from a individually designed Plan or other
prototype Plan which this Plan amends.
7.9 DISTRIBUTION UPON DISABILITY. In the event of the Disability of the
Participant, the Trustee, following receipt of notification of such
Disability from the Committee, shall make distributions from the Account.
7.10 JOINT AND SURVIVOR ANNUITY REQUIREMENTS.
(A) APPLICATION. The provisions of this Section 7.10 shall apply to any
Participant who is credited with at least one Hour of Service with the
Employer on or after August 23, 1984, and such other Participants as
provided in Section 7.10(G).
(B) QUALIFIED JOINT AND SURVIVOR ANNUITY. Unless an optional form of
benefit is selected pursuant to a Qualified Election within the
ninety-day period ending on the Annuity Starting Date, a married
Participant's Vested Account Balance will be paid in the form of a
Qualified Joint and Survivor Annuity and an unmarried Participant's
Vested Account Balance will be paid in the form of a life annuity. The
Participant may elect to have such annuity distributed upon attainment
of the Earliest Retirement Age under the Plan.
(C) QUALIFIED PRE-RETIREMENT SURVIVOR ANNUITY. Unless an optional form of
benefit has been selected within the election period pursuant to a
Qualified Election, if a Participant dies before the Annuity Starting
Date then the Participant's Vested Account Balance shall be applied
toward the purchase of an annuity for the life of the surviving Spouse.
The surviving Spouse may elect to have such annuity distributed within
a reasonable period after the Participant's death.
(D) DEFINITIONS.
(1) ELECTION PERIOD: The period which begins on the first day of the
Plan Year in which the Participant attains age 35 and ends on the
date of the Participant's death. If a Participant separates from
service prior to the first day of the Plan Year in which age 35 is
attained, with respect to the account balance as of the date of
separation, the election period shall begin on the date of
separation.
Pre-age 35 waiver: A Participant who will not yet attain age 35 as
of the end of any current Plan Year may make a special Qualified
Election to waive the Qualified Preretirement Survivor Annuity for
the period beginning on the date of such election and ending on the
first day of the Plan Year in which the Participant will attain age
35. Such election shall not be valid unless the Participant
receives a written explanation of the Qualified Preretirement
Survivor Annuity in such terms as are
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comparable to the explanation required under Section 7.10(E).
Qualified Preretirement Survivor Annuity coverage will be
automatically reinstated as of the first day of the Plan Year in
which the Participant attains age 35. Any new waiver on or after
such date shall be subject to the full requirements of this Section
7.10.
(2) EARLIEST RETIREMENT AGE: The earliest date on which, under the
Plan, the Participant could elect to receive retirement benefits.
(3) QUALIFIED ELECTION: A waiver of a Qualified Joint and Survivor
Annuity or a Qualified Preretirement Survivor Annuity. Any waiver
of a Qualified Joint and Survivor Annuity or a Qualified
Preretirement Survivor Annuity shall not be effective unless: (a)
the Participant's Spouse consents in writing to the election; (b)
the election designates a specific Beneficiary including any class
of Beneficiaries or any contingent Beneficiaries, which may not be
changed without spousal consent (or the Spouse expressly permits
designations by the Participant without any further spousal
consent); (c) the Spouse's consent acknowledges the effect of the
election; and (d) the Spouse's consent is witnessed by a Plan
representative or Notary Public. Additionally, a Participant's
waiver of the Qualified Joint and Survivor Annuity shall not be
effective unless the election designates a form of benefit payment
which may not be changed without spousal consent (or the spouse
expressly permits designations by the Participant without any
further spousal consent). If it is established to the satisfaction
of a Plan representative that there is no Spouse or that the Spouse
cannot be located, a waiver will be deemed a Qualified Election.
Any consent by a Spouse obtained under this provision (or
establishment that the consent of a Spouse may not be obtained)
shall be effective only with respect to such Spouse. A consent that
permits designations by the Participant without any requirement of
further consent by such Spouse must acknowledge that the Spouse has
the right to limit consent to a specific Beneficiary, and a
specific form of benefit where applicable, and that the Spouse
voluntarily elects to relinquish either or both of such rights. A
revocation of a prior waiver may be made by a Participant without
the consent of the Spouse at any time before the commencement of
benefits. The number of revocations shall not be limited. No
consent obtained under this provision shall be valid unless the
Participant has received notice as provided in Paragraph (E) below.
(4) QUALIFIED JOINT AND SURVIVOR ANNUITY: An immediate annuity for the
life of the Participant with a survivor annuity for the life of the
Spouse which is not less than 50 percent and not more than 100
percent of the amount of the annuity which is payable during the
joint lives of the Participant and the Spouse and which is the
amount of benefit which can be purchased with the Participant's
vested account balance. The percentage of the survivor annuity
under the Plan shall be 50%.
(5) SPOUSE (SURVIVING SPOUSE): the Spouse or surviving Spouse of the
Participant, provided that a former Spouse will be treated as the
Spouse or surviving Spouse and the current Spouse will not be
treated as the Spouse or surviving Spouse to the extent provided
under a qualified domestic relations order as described in Section
414(p) of the Code.
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(6) ANNUITY STARTING DATE: The first day of the first period for which
an amount is payable as an annuity or any other form.
(7) VESTED ACCOUNT BALANCE: The aggregate value of the Participant's
vested account balances derived from Employer and Employee
contributions (including rollovers), whether vested before or upon
death. The provisions of this Section 7.10 shall apply to a
Participant who is vested in amounts attributable to Employer
contributions, Employee contributions (or both) at the time of
death or distribution.
(E) NOTICE REQUIREMENTS.
(1) QUALIFIED JOINT AND SURVIVOR ANNUITY. In the case of a Qualified
Joint and Survivor Annuity as described in Section 7.10(B), the
Committee shall no less than 30 days and no more than 90 days prior
to the Annuity Starting Date provide each Participant a written
explanation of: (i) the terms and conditions of a Qualified Joint
and Survivor Annuity; (ii) the Participant's right to make and the
effect of an election to waive the Qualified Joint and Survivor
Annuity form of benefit; (iii) the rights of a Participant's
Spouse; and (iv) the right to make, and the effect of, a revocation
of a previous election to waive the Qualified Joint and Survivor
Annuity.
(2) QUALIFIED PRE-RETIREMENT SURVIVOR ANNUITY. In the case of a
Qualified Pre-Retirement Survivor Annuity as described in Section
7.10(C), the Committee shall provide each Participant within the
applicable period for such Participant a written explanation of the
Qualified Pre-Retirement Survivor Annuity in such terms and in such
manner as would be comparable to the explanation provided for
meeting the requirements of Section 7.10(E) applicable to a
Qualified Joint and Survivor Annuity.
The applicable period for a Participant is whichever of the
following periods ends last: (i) the period beginning with the
first day of the Plan Year preceding the Plan Year in which the
Participant attains age thirty-two (32) and ending with the close
of the Plan Year in which the Participant attains age thirty-five
(35); (ii) a reasonable period ending after the individual becomes
a Participant; (iii) a reasonable period ending after Section
7.10(E)(3) ceases to apply to the Participant; and (iv) a
reasonable period ending after Section 7.10 first applies to the
Participant. Notwithstanding the foregoing, notice must be provided
within a reasonable period ending after separation from service in
the case of a Participant who separates from service before
attaining age thirty-five (35).
For purposes of applying the preceding paragraph, a reasonable
period ending after the enumerated events described in (ii), (iii)
and (iv) is the end of the two-year period beginning one year prior
to the date the applicable event occurs, and ending one year after
that date. In the case of a Participant who separates from service
before the Plan Year in which age 35 is attained, notice shall be
provided within the two-year period beginning one-year prior to
separation and ending one year after separation. If such a
Participant thereafter returns to employment with the Employer, the
applicable period for such participant shall be redetermined.
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(3) SUBSIDIZED ANNUITY DISTRIBUTIONS. Notwithstanding the other
requirements of this Section 7.10(E), the respective notices
prescribed by this Section 7.10(E) need not be given to a
Participant if (1) the Plan "fully subsidizes" the cost of a
Qualified Joint and Survivor Annuity or Qualified Pre-Retirement
Survivor Annuity, and (2) the Plan does not allow the Participant
to waive the Qualified Joint and Survivor Annuity or Qualified
Preretirement Survivor Annuity and does not allow a married
Participant to designate a non-Spouse Beneficiary. For purposes of
this Section 7.10(E), a Plan fully subsidizes the cost of a benefit
if no increase in cost, or decrease in benefits to the Participant
may result from the Participant's failure to elect another benefit.
(F) SAFE HARBOR RULES.
(1) APPLICATION. This Section shall apply to a Participant in a
profit-sharing Plan, and to any distribution, made on or after the
first day of the first Plan Year beginning after December 31, 1988,
from or under a separate account attributable solely to accumulated
deductible employee contributions, as defined in Section
72(o)(5)(B) of the Code, and maintained on behalf of a Participant
in a money purchase pension Plan, (including a target benefit Plan)
if the following conditions are satisfied: (1) the Participant does
not or cannot elect payments in the form of a life annuity, and (2)
on the death of the Participant, the Participant's vested account
balance will be paid to the Participant's surviving Spouse, but if
there is no surviving Spouse or, if the surviving Spouse has
already consented in a manner conforming to a Qualified Election,
then to the Participant's designated Beneficiary. The surviving
Spouse may elect to have distribution of the vested account balance
commence within the 90-day period following the date of the
Participant's death. The account balance shall be adjusted for
gains or losses occurring after the Participant's death in
accordance with the provisions of the Plan governing the adjustment
of account balances for other types of distributions. This Section
7.10(F) shall not be operative with respect to a Participant in a
profit-sharing Plan if the Plan is a direct or indirect transferee
of a defined benefit Plan, money purchase Plan, a target benefit
Plan, stock bonus, or profit-sharing Plan which is subject to the
survivor annuity requirements of Section 401(a)(11) and Section 417
of the Code. If this Section 7.10(F) is operative, then the
provisions of this Section 7.10, other than in Section 7.10(G),
shall be inoperative.
(2) WAIVER. The Participant may waive the spousal death benefit
described in this section at any time provided that no such waiver
shall be effective unless it satisfies the conditions of Section
7.10(D)(3) (other than the notification requirement referred to
therein) that would apply to the Participant's waiver of the
Qualified Preretirement Survivor Annuity.
(3) VESTED ACCOUNT BALANCE. For purposes of this Section 7.10(F),
vested account balance shall mean, in the case of a money purchase
pension Plan or a target benefit Plan, the Participant's separate
account balance attributable solely to accumulated deductible
employee contributions within the meaning of Section 72(o)(5)(B) of
the
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Code. In the case of a profit-sharing Plan, vested account balance
shall have the same meaning as provided in Section 7.10(D)(7).
(G) TRANSITIONAL RULES.
(1) Any living Participant not receiving benefits on August 23, 1984,
who would otherwise not receive the benefits prescribed by the
previous sections of this Section 7.10 must be given the
opportunity to elect to have the prior sections of this Section
7.10 apply if such Participant is credited with at least one Hour
of Service under this Plan or a predecessor Plan in a Plan Year
beginning on or after January 1, 1976, and such Participant had at
least ten (10) years of vesting service when he or she separated
from service.
(2) Any living Participant not receiving benefits on August 23, 1984
who was credited with at least one Hour of Service under this Plan
or predecessor Plan on or after September 2, 1974, and who is not
otherwise credited with any service in a Plan Year beginning on or
after January 1, 1976 must be given the opportunity to have his or
her benefits paid in accordance with Section 7.10(G)(4).
(3) The respective opportunities to elect (as described in Section
7.10(G)(1) and (2) above) must be afforded to the appropriate
Participants during the period commencing on August 23, 1984 and
ending on the date benefits would otherwise commence to these
Participants.
(4) Any Participant who has elected pursuant to Section 7.10(G)(2) and
any Participant who does not elect under Section 7.10(G)(1) or who
meets the requirements of Section 7.10(G)(1) except that such
Participant does not have at least ten (10) years of vesting
service when he or she separates from service, shall have his or
her benefits distributed in accordance with all of the following
requirements of benefits would have been payable in the form of a
life annuity:
a) Automatic joint and survivor annuity. If benefits in the form of
a life annuity become payable to a married participant who:
(i) begins to receive payments under the Plan on or after
Normal Retirement Date; or
(ii) dies on or after Normal Retirement Date while still
working for the Employer; or
(iii) begins to receive payments on or after the Qualified Early
Retirement Age; or
(iv) separates from service on or after attaining Normal
Retirement Date (or the Qualified Early Retirement Age)
and after satisfying the eligibility requirements for the
payment of benefits under the Plan and thereafter dies
before beginning to receive such benefits;
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then such benefits will be received under this Plan in the form
of a Qualified Joint and Survivor Annuity, unless the
Participant has elected otherwise during the election period.
The election period must begin at least 6 months before the
Participant attains Qualified Early Retirement Age and end not
more than 90 days before the commencement of benefits. Any
election hereunder will be in writing and may be changed by the
Participant at any time.
b) Election of early survivor annuity. A Participant who is
employed after attaining the Qualified Early Retirement Age will
be given the opportunity to elect, during the election period,
to have a survivor annuity payable on death. If the Participant
elects the survivor annuity, payments under such annuity must
not be less than the payments which would have been made to the
Spouse under the Qualified Joint and Survivor Annuity if the
Participant had retired on the day before his or her death. Any
election under this provision will be in writing and may be
changed by the Participant at any time. The election period
begins on the later of (1) the 90th day before the Participant
attains the Qualified Early Retirement Age, or (2) the date on
which participation begins, and ends on the date the Participant
terminates employment.
c) For purposes of this Section 7.10(G)(4):
(i) Qualified Early Retirement Age is the latest of: (i) the
earliest date, under the Plan, on which the Participant may
elect to receive retirement benefits, (ii) the first day of
the 120th month beginning before the Participant reaches
Normal Retirement Date, or (iii) the date the Participant
begins participation.
(ii) Qualified Joint and Survivor Annuity is an annuity for the
life of the participant with a survivor annuity for the
life of the Spouse as described in Section 7.10(D)(4).
(H) NONTRANSFERABILITY. Any annuity distributed from the Plan must be
nontransferable.
(I) INCORPORATION OF TERMS. 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.
7.11 DISTRIBUTIONS TO QUALIFIED PLANS. In the event a former Employee whose
accounts have not been fully distributed becomes an active participant in a
Plan qualified under Section 401(a) of the Code, the Committee may direct
the Trustee to transfer the amount in such Participant's account(s) to any
such Plan provided the Plan to receive such transfers authorizes accepting
the transfer, provides that assets transferred shall be held in a separate
account and requires that the assets transferred shall not be subject to
any forfeiture provisions.
7.12 PROFIT SHARING PLANS AND 401(K) PROFIT SHARING PLANS ONLY WITHDRAWAL OF
EMPLOYER CONTRIBUTIONS. Subject to the provisions of the Plan, in
accordance with rules for giving notice as deter-
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mined by the Committee, and as elected in the Adoption Agreement, a
Participant may withdraw as of the first Accounting Date subsequent to
receipt by the Committee of such notice:
(A) An amount equal to not more than 100% of the Participant's Employer
Contribution Account determined as of such Accounting Date. No
Participant who has made any withdrawal of Employer Contributions in
the twelve (12) months preceding the giving of such notice may make a
withdrawal under this Section.
(B) Notwithstanding anything to the contrary in this Section 7.12, any
withdrawal made pursuant to Section 7.12(A) shall be for a minimum
whole dollar amount not less than Five Hundred Dollars ($500.00);
except that if the amount available for withdrawal is less than Five
Hundred Dollars ($500.00) then the minimum amount of the withdrawal
shall be the amount available.
(C) No forfeitures will occur solely as a result of an Employee's
withdrawal of Employer Contributions.
(D) Notwithstanding anything to the contrary in this Section 7.12, a
Participant may not make a withdrawal, pursuant to this Section of any
portion of the Participant's vested interest which has been assigned to
secure repayment of a loan in accordance with Section 10.10, below,
until such time as the Committee shall have released said portion so
assigned.
7.13. PROHIBITION AGAINST ALIENATION.
(A) Except as provided in Sections 401(a)(13) and 414(p) of the Code, no
benefit or interest available under this Plan will be subject to
assignment or alienation, either voluntarily or involuntarily.
(B) The preceding sentence shall also apply to the creation, assignment, or
recognition of a right to any benefit payable with respect to a
Participant pursuant to a domestic relations order, unless the
Committee determines that such order is a qualified domestic relations
order, as defined in Section 414(p) of the Code, or any domestic
relations order entered before January 1, 1985.
(C) All rights and benefits, including elections, provided to a Participant
in this Plan shall be subject to the rights afforded to any "alternate
payee" under a "qualified domestic relations order." Furthermore, an
immediate distribution to an "alternate payee" shall be permitted if
such distribution is authorized by a "qualified domestic relations
order," even if the affected Participant has not reached the "earliest
retirement age" under the Plan, provided that in no event will any such
distribution accelerate the repayment of any loan made to the affected
Participant under the Plan, unless such Participant consents thereto in
writing. For purposes of this Section 7.13, "alternate payee,"
"qualified domestic relations order" and "earliest retirement age"
shall have the meaning set forth under Code Section 414(p), unless a
Qualified Distribution Date has been selected in the Adoption
Agreement, in which case the earliest retirement age shall be the date
on which the domestic relations order is determined to be qualified.
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7.14 MISSING PARTICIPANT OR BENEFICIARY. Each Participant and/or each
Beneficiary must file with the Committee from time to time in writing his
or her post office address and each change of post office address. Any
communication, statement or notice addressed to a Participant and/or
Beneficiary at such last post office address filed with the Committee or if
no address is filed with the Committee then at the last post office address
as shown on the Employer's records, will be binding on the Participant
and/or Beneficiary for all purposes of the Plan. Neither the Committee nor
the Trustee shall be required to search for or locate a Participant or
Beneficiary.
Any other provision of the Plan to the contrary notwithstanding, if any
application for a benefit has not been filed by a Participant otherwise
eligible therefor within ninety (90) days after the Plan Year in which
occurred his or her termination date, the Committee shall mail to such
Participant and/or Beneficiary at his or her last known address an
application for benefit and a reminder that he or she is eligible for such
benefit. If such application is not filed with the Committee in accordance
with the provisions of the Plan within ninety (90) days after it is so
mailed to such Participant or his or her termination date, whichever is
later, the benefit shall be forfeited and shall be used to reduce future
Employer Contributions as though the Participant were not vested in his or
her accounts as of the end of said ninety (90) day period. Upon the
subsequent filing of an application therefor by the Participant and/or his
Beneficiary, such accounts shall be immediately reinstated pursuant to this
provision as though the Participant were 100% vested in his or her accounts
in an amount equal to the cash value of the accounts on the date forfeited.
To the extent forfeited amounts are not available, the Employer shall
contribute the amount required to reinstate the Participant's account
balance.
7.15 LIMITATION ON CERTAIN DISTRIBUTIONS. Notwithstanding anything contained
herein to the contrary, the Trustee may, in its discretion, delay
satisfying requests for distributions for up to one year where
distributions require amounts to be withdrawn from the Guaranteed
Investment Contract Fund; provided, however, that in no event shall the
Trustee delay distributions to a Participant beyond the legally required
time for distribution as set forth in Section 7.5.
7.16 FORM OF DISTRIBUTIONS AND WITHDRAWALS. The Trustee shall make all
distributions and withdrawals under the Plan, including Hardship
withdrawals, other withdrawals while the Participant is still employed, and
distributions upon retirement, disability, death and separation from
service, pro rata, from all accounts and Investment Funds, as follows:
(A) In a Plan with no Employer Stock Fund, all withdrawals and
distributions under the Plan shall be made in cash.
(B) In a Plan with an Employer Stock Fund:
(1) Withdrawals and distributions under the Plan from the other
Investment Fund(s) shall be made in cash.
(2) Withdrawals and distributions under the Plan from the Employer
Stock Fund may be made in cash or in full shares of Employer Stock,
with any fractional share paid in cash, as elected by the
Participant. For the cash portion of any distribution or
withdrawal, the Participant will receive the cash proceeds from the
sale of shares of Employer Stock as of the sale date.
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ARTICLE VIII
DIRECT ROLLOVERS
8.1 GENERAL. This Article applies to distributions made on or after January 1,
1993. Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's election under this Article, a distributee
may elect, at the time and in the manner 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.
8.2 DEFINITIONS.
(A) ELIGIBLE ROLLOVER DISTRIBUTION: An eligible rollover distribution is any
distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not
include: any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life
(or life expectancy) of the distributee or the joint lives (or joint
life expectancies) of the distributee and the distributee's designated
Beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under section
401(a)(9) of the Code; and the portion of any distribution that is not
includible in gross income (determined without regard to the exclusion
for net unrealized appreciation with respect to employer securities).
(B) ELIGIBLE RETIREMENT PLAN: An eligible retirement Plan is an individual
retirement account described in section 408(a) of the Code, an
individual retirement annuity described in section 408(b) of the Code,
an annuity Plan described in section 403(a) of the Code, or a qualified
trust described in section 401(a) of the Code, that accepts the
distributee's eligible rollover distribution. However, in the case of an
eligible rollover distribution to the surviving spouse, an eligible
retirement Plan is an individual retirement account or individual
retirement annuity.
(C) DISTRIBUTEE: A distributee includes an Employee or former Employee. In
addition, the Employee's or former Employee's surviving Spouse and the
Employee's or former Employee's Spouse or former Spouse who is the
alternate payee under a qualified domestic relations order, as defined
in section 414(p) of the Code, are distributees with regard to the
interest of the Spouse or former Spouse.
(D) DIRECT ROLLOVER: A direct rollover is a payment by the Plan to the
eligible retirement Plan specified by the distributee.
(E) WAIVER OF NOTICE. If a distribution is one to which Sections 401(a)(11)
and 417 of the Internal Revenue Code do not apply, such distribution may
commence less than 30 days after the notice required under Section
1.411(a)-(11)(c) of the Income Tax Regulations is given, provided that:
(1) the plan administrator clearly informs the Participant that the
Participant has a right to a period of at least 30 days after receiving
the notice to consider the decision of whether or not to elect a
distribution (and, if applicable, a particular distribution option), and
(2) the Participant, after receiving the notice, affirmatively elects a
distribution.
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ARTICLE IX
TOP-HEAVY PROVISIONS
9.1 USE OF TOP-HEAVY PROVISIONS. If the Plan becomes a Top-Heavy Plan in any
Plan Year after December 31, 1983, the provisions of this Article IX will
supersede any conflicting provision in the Plan or the Adoption Agreement.
The Committee has sole responsibility to make the determination as to the
top-heavy status of the Plan.
9.2 TOP-HEAVY DEFINITIONS.
(A) KEY EMPLOYEE: Any Employee or former Employee (and the Beneficiaries of
such Employee) who at any time during the determination period was an
officer of the Employer if such individual's annual Compensation exceeds
50% of the dollar limitation under Section 415(b)(1)(A) of the Code, an
owner (or considered an owner under Section 318 of the Code) of one of
the ten largest interests in the Employer if such individual's
Compensation exceeds 100% of the dollar limitation under Section
415(c)(1)(A) of the Code, a 5 per cent owner of the Employer, or a 1 per
cent owner of the Employer who has an annual Compensation of more than
$150,000. Annual compensation means compensation as defined in Item
B(4)(a) of the Adoption Agreement, but including amounts contributed by
the Employer pursuant to a salary reduction agreement which are
excludable from the Employee's gross income under Section 125, Section
402(e)(3), Section 402(h)(1)(B) or Section 403(b) of the Code. The
determination period is the Plan Year containing the Determination Date
and the 4 preceding Plan Years.
The determination of who is Key Employee will made by the Committee in
accordance with Section 416(i)(1) of the Code and the regulations
thereunder.
(B) TOP-HEAVY PLAN: This Plan, for any Plan Year beginning after December
31, 1983, if any of the following conditions exists:
(1) If the Top-Heavy Ratio for this Plan exceeds 60 percent and this
Plan is not part of any Required Aggregation Group or Permissive
Aggregation Group of plans.
(2) If this Plan is a part of a Required Aggregation Group of plans but
not part of a Permissive Aggregation Group and the Top-Heavy Ratio
for the group of plans exceeds 60 percent.
(3) If this Plan is a part of a Required Aggregation Group and part of a
Permissive Aggregation Group of plans and the Top-Heavy Ratio for
the Permissive Aggregation Group exceeds 60 percent.
(C) TOP-HEAVY RATIO: For purposes of determining if the Plan is a Top-Heavy
Plan:
(1) 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 5-year
period ending on the Determination Date(s) has or has had accrued
benefits, the Top-Heavy Ratio for this Plan alone or for the
Required or Permissive Aggregation Group as appropriate is a
fraction, the numerator
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of which is the sum of the account balances of all Key Employees as
of the Determination Date(s) (including any part of any account
balance distributed in the 5-year period ending on the Determination
Date(s)), and the denominator of which is the sum of all account
balances (including any part of any account balance distributed in
the 5-year period ending on the Determination Date(s), both computed
in accordance with Section 416 of the Code and the regulations
thereunder. Both the numerator and denominator of the Top-Heavy
Ratio are increased to reflect any contribution not actually made as
of the Determination Date, but which is required to be taken into
account on that date under Section 416 of the Code and the
regulations thereunder.
(2) If the Employer maintains one or more defined contribution plans
(including any Simplified Employee Pension Plan) and the Employer
maintains or has maintained one or more defined benefit plans which
during the 5-year period ending on the Determination Date(s) has or
has had any accrued benefits, the Top-Heavy Ratio for any Required
or Permissive Aggregation Group as appropriate is a fraction, the
numerator of which is the sum of account balances under the
aggregated defined contribution plan or plans for all Key Employees
determined in accordance with (1) above, and the Present Value of
accrued benefits under the aggregated defined benefit plan or plans
for all Key Employees as of the Determination Date(s), and the
denominator of which is the sum of the account balances under the
aggregated defined contribution plan or plans for all Participants,
determined in accordance with (1) above, and the Present Value of
accrued benefits under the defined benefit plan or plans for all
Participants as of the Determination Date(s), all determined in
accordance with Section 416 of the Code and regulations thereunder.
The accrued benefits under a defined benefit plan in both the
numerator and denominator of the Top-Heavy Ratio are increased for
any distribution of an accrued benefit made in the five-year period
ending on the Determination Date.
(3) For purposes of (1) and (2) above, the value of account balances and
the Present Value of accrued benefits will be determined as of the
most recent Valuation Date that falls within or ends with the
12-month period ending on the Determination Date, except as provided
in Section 416 of the Code and the regulations thereunder for the
first and second Plan years of a defined benefit Plan. The account
balances and accrued benefits of a Participant (a) who is not a Key
Employee but who was a Key Employee in a prior year, or (b) who has
not been credited with at least one Hour of Service with any
Employer maintaining the Plan at any time during the five-year
period ending on the Determination Date will be disregarded. The
calculation of the Top-Heavy Ratio, and the extent to which
distributions, rollovers, and transfers are taken into account will
be made in accordance with Section 416 of the Code and the
regulations thereunder. Voluntary deductible employee contributions
will not be taken into account for purposes of computing the
Top-Heavy Ratio. When aggregating plans the value of account
balances and accrued benefits will be calculated with reference to
the Determination Dates that fall within the same calendar year.
The accrued benefit of a Participant other than a Key Employee shall
be determined under (a) the method, if any, that uniformly applies
for accrual purposes under all
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defined benefit plans maintained by the Employer, or (b) if there is
no such method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional rule of Section
411(b)(1)(C) of the Code.
(D) PERMISSIVE AGGREGATION GROUP: The Required Aggregation Group of plans
plus any other Plan or plans of the Employer which, when considered as a
group with the Required Aggregation Group, would continue to satisfy the
requirements of Section 401(a)(4) and Section 410 of the Code.
(E) REQUIRED AGGREGATION GROUP: (1) Each qualified Plan of the Employer in
which at least one Key Employee participates or participated at any time
during the determination period (regardless of whether the Plan has
terminated), and (2) any other qualified Plan of Employer which enables
a Plan described in (1) to meet the requirements of Section 401(a)(4) or
Section 410 of the Code.
(F) DETERMINATION DATE: For purposes of determining if there is a Key
Employee and for calculating the Top-Heavy Ratio: 1) for any Plan Year
subsequent to the first Plan Year, the last day of the preceding Plan
Year, and 2) for the first Plan Year of the Plan, the last day of that
year.
(G) VALUATION DATE: The date specified in Item B(14)(c) of the Adoption
Agreement as of which account balances or accrued benefits are valued
for purposes of calculating the Top-Heavy Ratio.
(H) PRESENT VALUE: Present Value shall be based only on the interest and
mortality rates specified in the Adoption Agreement.
9.3 MINIMUM ALLOCATION.
(A) Except as otherwise provided in Section 9.3(C) and (D) below, the
Employer Contributions and forfeitures allocated on behalf of any
Participant who is not a Key Employee shall not be less than the lesser
of three per cent (3%) of such Participant's Compensation or in the case
where the Employer has no defined benefit Plan which designates this
Plan to satisfy Section 401 of the Code, the largest percentage of
Employer contributions and forfeitures, as a percentage of the Key
Employee's Compensation, as limited by Section 401(a)(17) of the Code,
allocated on behalf of any Key Employee for that year. The minimum
allocation is determined without regard to any Social Security
contribution. This minimum allocation shall be made even though, under
other Plan provisions, the Participant would not otherwise be entitled
to receive an allocation or would have received a lesser allocation for
the year because of (i) such Participants failure to complete 1,000
Hours of Service (or any other equivalent provided in the Plan) or (ii)
the Employee's failure to make mandatory contributions or (iii)
Compensation less than a stated amount.
(B) For purposes of computing the minimum allocation, Compensation shall
mean Compensation as defined in Section 6.6(A) as limited by Section
401(a)(17) of the Code.
(C) Section 9.3(A) shall not apply to any Participant who was not employed
by the Employer on the last day of the Plan Year.
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(D) Section 9.3(A) shall not apply to any Participant to the extent the
Participant is covered under any other plan or plans of the Employer
and the Employer has provided in Item B(14) of the Adoption Agreement
that the minimum allocation or benefit requirement applicable to
Top-Heavy Plans will be met in the other plan or plans.
(E) The minimum allocation required (to the extent required to be
nonforfeitable under Section 416(b) of the Code) may not be forfeited
under Section 411(a)(3)(B) or Section 411(a)(3)(D) of the Code.
(F) For each Plan Year in which the Paired Plans are Top-Heavy, the
Top-Heavy requirements set forth in Article VIII of the Plan and Item
B(14) of the Adoption Agreement shall apply.
(G) Neither Before Tax Contributions nor Matching Contributions may be
taken into account for the purpose of satisfying the minimum Top-Heavy
contribution requirements.
9.4 MINIMUM VESTING SCHEDULES. For any Plan Year in which this Plan is a
Top-Heavy Plan, the vesting schedule elected by the Employer in Item B(14)
and/or C(4)(d) of the Adoption Agreement will automatically apply to the
Plan. The minimum vesting schedule applies to all benefits within the
meaning of Section 411(a)(7) of the Code except those attributable to
Employee contributions, including benefits accrued before the effective
date of Section 416 and benefits accrued before the Plan became a Top-Heavy
Plan. Further, no decrease in a Participant's nonforfeitable percentage may
occur in the event the Plan's status as a Top-Heavy Plan changes for any
Plan Year. However, this Section 9.4 does not apply to the account balance
of any Employee who does not have an Hour of Service after the Plan has
initially become a Top-Heavy Plan and such Employee's account balance
attributable to employer contributions and forfeitures will be determined
without regard to this Section 9.4.
ARTICLE X
TRUSTEE
10.1 TRUSTEE. The Trustee shall receive, hold, invest, administer and distribute
the Trust Fund in accordance with the provisions of the Plan as herein set
forth.
10.2 RECORDS AND ACCOUNTS OF TRUSTEE. The Trustee shall maintain accurate and
detailed records and accounts of all its transactions of the Trust Fund,
which shall be available at all reasonable times for inspection or audit by
any person designated by the Employer and by any other person or entity to
the extent required by law.
10.3 REPORTS TO EMPLOYER. As soon as practicable following the close of each
accounting period and following the effective date of the termination of
the Plan, the Trustee shall file a written report with the Employer. The
report shall set forth all transactions with respect to the Trust Fund
during the period listing the Trust Fund assets with their market value as
of the close of the period covered by the report.
10.4 POWERS OF TRUSTEE. The Trustee shall administer the Trust Fund as a
nondiscretionary Trustee, and the Trustee shall not have any discretion or
authority with regard to the investment of the Trust Fund and shall act
solely as a directed Trustee of the fund contributed to it. The Trustee, as
a
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nondiscretionary Trustee, as may be directed by the Employer (or the
Participants to the extent provided herein) is authorized and empowered, by
way of limitation, with the following powers, rights and duties, each of
which the Trustee shall exercise in a nondiscretionary manner as directed
in accordance with the direction of the Employer (or the Participants) as a
Named Fiduciary (except to the extent that Plan assets are subject to the
control and management of a properly appointed Investment Manager):
(A) At the direction of the Named Fiduciary, to sell, write options on,
convey or transfer, invest and reinvest any part thereof in each and
every kind of property, whether real, personal or mixed, tangible or
intangible, whether income or non-income producing and wherever
situated, including, but not limited to, time deposits (including time
deposits in the Trustee or its affiliates, or any successor thereto, if
the deposits bear a reasonable rate of interest), fee simple, leasehold
or lesser estates in real estate, shares of common and preferred stock,
mortgages, bonds, leases, notes, debentures, equipment or collateral
trust certificates, rights, warrants, convertible or exchangeable, and
other corporate, individual or government securities or obligations,
annuity, retirement or other insurance contracts, mutual funds
(including funds for which the Trustee or its affiliates serve as
investment advisor), units of group or collective trusts established to
permit the pooling of funds of separate pension and profit sharing
trusts, provided the Internal Revenue Service has ruled such group
trust to be qualified under Code Section 401(a) and exempt under Code
Section 501(a) (or the applicable corresponding provision of any other
Revenue Act) or in units of any other common, collective or commingled
trust fund heretofore or hereafter established and maintained by the
Trustee or its affiliates; as long as the Trustee holds any units
hereunder, the instrument establishing such common trust fund
(including all amendments thereto) shall be deemed to have been adopted
and made a part of this Plan, and such other investments as the Named
Fiduciary shall direct the Trustee to invest Plan assets or hold as an
Investment Fund for the investment of Plan assets pursuant to
Participant direction.
(B) At the direction of the Named Fiduciary, to sell, convert, redeem,
exchange, grant options for the purchase or exchange of, or otherwise
dispose of any property held hereunder, at public or private sale, for
cash or upon credit with or without security, without obligation on the
part of any person dealing with the Trustee to see to the application
of the proceeds of or to inquire into the validity, expediency, or
propriety of any such disposal;
(C) At the direction of the Named Fiduciary, to manage, operate, repair,
partition and improve and mortgage or lease (with or without an option
to purchase) for any length of time any property held in the Trust
Fund; to renew or extend any mortgage or lease, upon such terms as the
Trustee may deem expedient; to agree to reduction of the rate of
interest on any mortgage; to agree to any modification in the terms of
any lease or mortgage, or of any guarantee pertaining to Page 75 either
of them; to exercise and enforce any right of foreclosure; to bid in
property on foreclosure; to take a deed in lieu of foreclosure with or
without paying consideration therefor and in connection therewith to
release the obligation on the bond secured by the mortgage; and to
exercise and enforce in any action, suit or proceeding at law or in
equity any rights, covenants, conditions, or remedies with respect to
any lease or mortgage or to any guarantee pertaining to either of them
or to waive any default in the performance thereof;
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(D) In accordance with the direction of a Named Fiduciary, to vote,
personally or by general or limited proxy, any shares of stock or other
securities held in the Trust Fund, provided that all voting rights
pertaining to shares of any financial institution in the state where
the Trustee is located shall be exercised by the trustee only if and as
directed in writing by the Committee; provided further, that the
Trustee and the Employer may agree in writing that such voting rights
be passed through to the Participant's in proportion to their interest
in the Investment Funds, to delegate discretionary voting power to the
trustees of a voting trust for any period of time; and to exercise or
sell, personally or by power of attorney, any conversion or
subscription or other rights appurtenant to any securities or other
property held in the Trust Fund;
(E) As may be directed by the Named Fiduciary, to join in or oppose any
reorganization, recapitalization, consolidation, merger or liquidation,
or any Plan therefor, or any lease (with or without an option to
purchase), mortgage or sale of the property of any organization the
securities of which are held in the Trust Fund; to pay from the Trust
Fund any assessments, charges, or compensation specified in any Plan of
reorganization, recapitalization, consolidation, merger or liquidation;
to deposit any property with any committee or depository; and to retain
any property allotted to the Trust Fund in any reorganization,
recapitalization, consolidation, merger or liquidation;
(F) In accordance with the written instructions of a Named Fiduciary, to
settle, compromise or commit to arbitration any claim, debt or
obligation of or against the Trust Fund; to enforce or abstain from
enforcing any right, claim, debt, or obligation; and to abandon any
property determined by it to be worthless;
(G) As may be directed by the Named Fiduciary, to continue to hold any
property of the Trust Fund, whether or not productive of income; to
reserve from investment and keep unproductive of income, without
liability for interest, such cash as it deems advisable and, consistent
with its obligations as Trustee hereunder, to hold such cash in a
demand deposit in the Trustee bank, its affiliates, or any successor
thereto;
(H) To hold property of the Trust Fund in its own name, or in the name of
nominee, without disclosure of this trust, or in bearer form so that it
may pass by delivery, and to deposit property with any depository, but
no such holding or depositing shall relieve the Trustee of its
responsibility for the safe custody and disposition of the Trust Fund
in accordance with the provisions of this agreement as may be directed
by the Named Fiduciary, and the Trustee's records shall at all times
show that such property is part of the Trust Fund;
(I) As directed by the Named Fiduciary, to make, execute and deliver, as
Trustee, any deeds, conveyances, leases (with or without option to
purchase), mortgages, options, contracts, waivers, or other instruments
that the Trustee shall deem necessary or desirable in the exercise of
its powers under this agreement;
(J) To employ, at the expense of the Employer or the Trust Fund, agents and
delegate to them such duties as the Trustee sees fit; the Trustee shall
not be responsible for any loss occasioned by any such agents selected
by it with reasonable care; the Trustee may consult with legal counsel
(who may be counsel for the Employer) concerning any questions which
may arise with reference to its power or duties under this Plan, and
the written opinion of
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such counsel shall be full and complete protection with respect to any
action taken or not taken by the Trustee in good faith and in
accordance with the written opinion of such counsel;
(K) To pay out of the Trust Fund any taxes imposed or levied with respect
to the Trust Fund and may contest the validity or amount of any tax,
assessment, penalty, claim or demand respecting the Trust Fund;
however, unless the Trustee shall have first been indemnified to its
satisfaction, it shall not be required to contest the validity of any
tax, or to institute, maintain or defend against any other action or
proceeding either at law or in equity;
(L) To make loans to Participants in accordance with policies established
by the Committee and in accordance with the terms of the Plan and the
and to segregate or otherwise identify property of the Trust Fund as
directed by the Committee for such purpose including providing
collateral for loans made pursuant to the Plan.
10.5 TRUSTEE'S FEES AND EXPENSES. The Trustee shall be entitled to receive
reasonable fees for its services hereunder in accordance with its schedule
of fees then in effect and shall be entitled to receive reimbursement for
all reasonable expenses incurred by it in the administration of this Plan.
Except to the extent that the Employer shall pay such fees and expenses,
they shall be charged to and collected by the Trustee from each
Participant's accounts. The Trustee's fees and expenses for extraordinary
services in connection with any Participant's accounts may be charged to
and collected by the Trustee from such accounts.
10.6 TRUSTEE MAY RESIGN OR BE REMOVED. The Trustee may resign by written notice
to the Employer which shall be effective sixty (60) days after delivery
unless the Trustee and the Employer agree to an earlier effective date. The
Trustee may be removed by the Employer by written notice to the Trustee
which shall be effective sixty (60) days after delivery unless the Trustee
and the Employer agree to an earlier effective date. Prior to the effective
date of such resignation or removal, the Employer shall amend its Plan to
eliminate any reference to the PRISM(R) PROTOTYPE RETIREMENT PLAN AND
TRUST, and appoint a new trustee. The Trustee shall deliver the Trust
Fund to its successor on the effective date of resignation or removal, or
as soon after such effective date as practicable. However, the Trustee may
first subtract any amounts owed it from the Trust Fund for compensation,
expenses and taxes due.
If the Employer fails to so amend the Plan and appoint a successor trustee
within the sixty (60) days, or longer period as the Trustee permits in
writing, the Trustee shall apply to a court of competent jurisdiction for
appointment of a successor trustee.
10.7 SEPARATE INVESTMENT FUNDS.
(A) The assets of the Trust Fund shall be held in such number of Investment
Funds as the Employer and the Trustee may agree, plus an Employer Stock
Fund if selected by the Employer in the Adoption Agreement, as the
Employer shall designate in writing on the Investment Fund Designation
form affixed to the Adoption Agreement. Such Investment Funds shall be
selected by the Employer from among the funds offered by the Trustee
for use as Investment Funds in the PRISM(R) PROTOTYPE RETIREMENT PLAN &
TRUST. The Trustee reserves the right to change the funds available for
use as Investment Funds in the PRISM(R) PROTOTYPE RETIREMENT PLAN &
TRUST, from time to time, and the Employer agrees to
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execute an amended Investment Fund Designation form to reflect any such
changes as may impact the Investment Funds available to the Employer's
Plan. The Employer hereby acknowledges that, available as Investment
Funds are interests in registered investment companies (i.e. mutual
funds) for which the sponsoring organization, its parent, affiliates or
successors may serve as investment advisor and receive compensation
from the registered investment company for its services as investment
advisor. The Employer acknowledges that it, as Named Fiduciary, has the
sole responsibility for selection of the Investment Funds offered under
the Plan, and it has done so on the basis of the Employer's
determination, after due inquiry, of the appropriateness of the
selected Investment Funds as vehicles for the investment of Plan assets
pursuant to the terms of the Plan, considering all relevant facts and
circumstances, including but not limited to (i) the investment policy
and philosophy of the Employer developed pursuant to ERISA Section
402(b)(1); (ii) the Participants, including average level of
investment experience and sophistication; (iii) the ability of
Participants, using an appropriate mix of Investment Funds, to
diversify the investment of Plan assets held for their benefit; (iv)
the ability of Participants to, utilizing an appropriate mix of
Investment Funds, to structure an investment portfolio within their
account in the Plan with risk and return characteristics within the
normal range of risk and return characteristics for individuals with
similar investment backgrounds, experience and expectations; and, (v)
in making the selection of Investment Funds, the Employer did not rely
on any representations or recommendations from the Trustee or any of
its employees, except as may have been provided through written
materials, including marketing materials provided by the various
sponsors or distributors of the Investment Funds, and that the
Investment Fund selection has not be influenced, approved, or
encouraged through the actions of the Trustee or its employees.
For purposes of the Plan, "Employer Stock" shall mean common stock
listed on a recognized securities exchange issued by an Employer of
Employees covered by the Plan or by an affiliate of such Employer and
which shall be a "qualifying employer security" as defined in ERISA.
The Employer Stock Fund shall be invested and reinvested in shares of
Employer Stock, which stock shall be purchased by the Trustee to the
extent not contributed to the Plan by the Employer, except for amounts
which may reasonably be expected to be necessary to satisfy
distributions to be made in cash. No Employer Stock shall be acquired
or held in any Investment Fund other than the Employer Stock Fund. Up
to 100% of the assets of the Trust Fund may be invested in Employer
Stock.
All contributions shall be allocated by the Trustee to the Plan's
Investment Funds specified by the Employer. Dividends, interest and
other distributions shall be reinvested in the same Investment Fund
from which received.
Employers sponsoring 401(k) profit sharing plans may elect to determine
the Investment Funds, including an Employer Stock Fund, if applicable,
into which Matching Contributions and/or Employer Contributions will be
invested and/or into which Participants may not direct contributions.
By making these designations, the Employer shall be deemed to have
advised the Trustee in writing regarding the retention of investment
powers.
Notwithstanding the foregoing provisions of this Section 10.7(A), the
Trustee may, in its discretion, accept certain investments which have
been, and are, held as part of the Trust Fund prior to the date the
Employer adopted this Plan. Such investments shall be
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considered investments directed by the Employer or an Investment
Committee for the Plan ("Investment Committee"), if one is acting. The
Trustee shall hold, administer and dispose of such investments in
accordance with directions to the Trustee contained in a written notice
from the Employer or Investment Committee. Any such notice shall advise
the Trustee regarding the retention of investment powers by the
Employer or the Investment Committee and shall be of a continuing
nature or otherwise, and may be revoked in writing by the Employer or
Investment Committee.
The Trustee shall not be liable but shall be fully protected by reason
of its taking or refraining from taking any action at the direction of
the Employer or Investment Committee, nor shall the Trustee be liable
but shall be fully protected by reason of its refraining from taking
any action because of the failure of the Employer or the Investment
Committee to give a direction or order. The Trustee shall be under no
duty to question or make inquiry as to any direction, notification or
order or failure to give a direction, notification or order by the
Employer or the Investment Committee. The Trustee shall be under no
duty to make any review of investments directed by the Employer or
Investment Committee acquired for the Trust Fund and under no duty at
any time to make any recommendation with respect to disposing of or
continuing to retain any such investments. While the Employer may
direct the Trustee with respect to Plan investments, the Employer may
not (1) borrow from the Fund or pledge any assets of the Fund as
security for a loan; (2) buy property or assets from or sell property
or assets to the Fund; (3) charge any fee for services rendered to the
Fund; or (4) receive any services from the Fund on a preferential
basis.
The Employer hereby indemnifies and holds the Trustee or its nominee
harmless from any and all actions, claims, demands, liabilities,
losses, damages or reasonable expenses of whatsoever kind and nature in
connection with or arising out of (1) any action taken or omitted in
good faith or any investment or disbursement of any part of the Trust
Fund made by the Trustee in accordance with the directions of the
Employer or the Investment Committee or any inaction with respect to
any Employer or Investment Committee directed investment or with
respect to any investment previously made at the direction of the
Employer or Investment Committee in the absence of directions from the
Employer or Investment Committee therefor, or (2) any failure by the
Trustee to pay for any property purchased by the Employer or the
Investment Committee for the Trust Fund by reason of the insufficiency
of funds in the Trust Fund.
Anything hereinabove to the contrary notwithstanding, the Employer
shall have no responsibility to the Trustee under the foregoing
indemnification if the Trustee knowingly participated in or knowingly
concealed any act or omission of the Employer or Investment Committee
knowing that such act or omission constituted a breach of fiduciary
responsibility, or if the Trustee fails to perform any of the duties
undertaken by it under the provisions of this Plan, or if the Trustee
fails to act in conformity with the directions of an authorized
representative of the Employer or the Investment Committee.
(B) Each Participant shall by such mechanism as may be agreed upon between
the Trustee and Employer, direct that the contributions made to his or
her accounts for which the Participant may direct investments, as
selected by the Employer in the Adoption Agreement, be invested in one
or more of the Investment Funds, including the Employer Stock Fund, if
applicable. At the time an Employee becomes eligible for the Plan, he
or she shall specify
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the percentage of his or her accounts (expressed in percentage
increments as may be agreed to between the Employer and the Trustee) to
be invested pro-rata in each such Investment Fund.
(C) Upon prior written notice to the Trustee, or other form of notice
acceptable to the Trustee, a Participant may change an investment
direction with respect to future contributions. Through acceptable
notice to the Trustee, the Participant may elect to transfer all or a
portion of such Participant's interest in each Investment Fund (based
on the value of such interest on the Valuation Date immediately
preceding such election), including an Employer Stock Fund, if
applicable, to any other of the Investment Funds selected by the
Employer so that the Participant's interest in the said Investment
Funds immediately after the transfer is allocated in percentage
increments as may be agreed to by the Employer and the Trustee.
Notwithstanding any Participant's election to change Investment Funds,
the Trustee may, in its discretion, delay satisfaction of requests to
change from a guaranteed investment contract fund for up to one year,
or delay satisfaction of changes in Investment Funds pending settlement
of prior changes in Investment Funds.
(D) The Employer will be responsible when transmitting Employer and
Employee contributions to show the dollar amount to be credited to each
Investment Fund for each Employee.
(E) Except as otherwise provided in the Plan, neither the Trustee, nor the
Employer, nor any fiduciary of the Plan shall be liable to the
Participant or any of his or her beneficiaries for any loss resulting
from action taken at the direction of the Participant.
(F) In a 401(k) profit sharing Plan where the Employer has elected to
invest a portion or all of the Matching Contributions and/or Employer
Contributions in the Employer Stock Fund, then the following shall
apply:
If selected by the Employer in the Adoption Agreement, a Participant
who is fifty-five (55) years of age or older and who is 100% vested in
his Matching Contribution account and/or Employer Contribution account
may elect to have the Employer Stock (and any earnings thereon)
attributable to such Matching Contributions and/or Employer
Contributions diversified in the other Investment Funds under the Plan
in accordance with the following rules and limitations. The amount of
Employer Stock which may be diversified each Plan Year shall be
determined in accordance with the following schedule:
================================================================================
THEN THE PERCENT OF THE NUMBER OF WHOLE
SHARES (ROUNDED TO THE NEAREST WHOLE NUMBER)
CREDITED TO THE PARTICIPANTS' MATCHING
ACCOUNT AND/OR EMPLOYER CONTRIBUTION ACCOUNT
IF THE AGE ATTAINED BY THE ON THE LAST DAY OF THE PRECEDING PLAN YEAR
PARTICIPANT DURING THE PLAN WHICH MAY BE DIVERSIFIED PURSUANT TO THE
YEAR IS: RULES BELOW MAY NOT EXCEED
- --------------------------------------------------------------------------------
55 25%
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56 25%
57 30%
58 40%
59 50%
60 60%
61 70%
62 80%
63 90%
64 100%
================================================================================
The election to diversify may only be made once each Plan Year. The
election may be made in any month by providing notice to the Committee
in accordance with the frequency selected by the Employer for other
Investment Fund changes under the Plan. Each election to make a
transfer pursuant to this Section shall specify the Investment Fund(s)
into which the shares subject to diversification will be reinvested so
that the Participant's interest in the said Investment Fund(s),
immediately after the transfer, is allocated in increments as may be
allowed by the Trustee. Thereafter, the Participant's interest in said
Investment Fund(s) shall be subject to transfer in accordance with this
Section.
(G) Forfeitures arising under the Plan will be invested in an Investment
Fund as may be selected in the discretion of the Employer.
(H) In the event the Trust holds life insurance, the following restrictions
shall apply:
(1) Limitations on Premium Payments
(a) If ordinary or whole life insurance contracts are purchased on
the life of a Participant, less than one-half of the insured
Participant's current allocation of contributions will be used
to pay premiums attributable to such insurance. Ordinary or
whole life insurance contracts are those with both
nondecreasing benefits and nonincreasing premiums.
(b) If term or universal life insurance contracts are purchased, no
more than one-quarter of the insured Participant's current
allocation of contributions will be used to pay premiums
attributable to such insurance.
(c) If a combination of ordinary or whole life insurance contracts
and term or universal life insurance contracts are purchased,
the sum of one-half of the ordinary life insurance premiums and
all other life insurance premiums will not exceed one-fourth of
the aggregate employer contributions allocated to any
participant.
(2) The Plan Administrator will direct the Trustee to convert the
entire value of any life insurance contract at or before the
Participant's actual retirement or distribution on termination of
employment, but not later than the Participant's Required Beginning
Date to provide cash values or retirement annuity income, or,
subject to the Joint and Survivor Annuity waiver requirements of
Section 7.10, the Plan Administrator may direct the Trustee to
distribute the insurance contract directly to the Participant.
(3) The Trustee, at the direction of the Employer shall be entitled to
exercise all rights and options with respect to any such life
insurance contracts held by the Plan.
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10.8 REGISTRATION, DISTRIBUTION AND VOTING OF EMPLOYER STOCK AND PROCEDURES
REGARDING TENDER OFFERS.
(A) All voting rights on shares of Employer Stock held in the Employer
Stock Fund shall be exercised by the Trustee only as directed by the
Participants acting in their capacity as "Named Fiduciaries" (as
defined in Section 402 of the Act) in accordance with the following
provisions of this Section 10.8(A):
(1) As soon as practicable before each annual or special shareholders'
meeting of the Employer, the Trustee shall furnish to each
Participant sufficient copies of the proxy solicitation material
sent generally to shareholders, together with a form requesting
confidential instructions on how the shares of Employer Stock
allocated to such Participant's account, and, separately, such
shares of Employer Stock as may be unallocated ("Unallocated
Shares") or allocated to Participant accounts but for which the
Trustee does not receive timely voting instruction from the
Participant ("Non-Directed Shares"), (including fractional shares
to 1/1000th of a share) are to be voted. The direction with respect
to Non-Directed Shares and Unallocated Shares shall apply to such
number of votes equal to the total number of votes attributable to
Non-Directed Shares and Unallocated Shares multiplied by a
fraction, the numerator of which is the number of shares of
Employer Stock credited to the Participant's account and the
denominator of which is the total number of shares credited to the
accounts of all such Participants who have timely provided
directions to the Trustee with respect to Non-Directed Shares and
Unallocated Shares under this Section 10.8(A)(1). The Employer and
the Committee will cooperate with the Trustee to ensure that
Participants receive the requisite information in a timely manner.
The materials furnished to the Participants shall include a notice
from the Trustee that the Trustee will vote any shares for which
timely instructions are not received by the Trustee as may be
directed by those voting Participants, acting in their capacity as
Named Fiduciaries of the Plan as provided above. Upon timely
receipt of such instructions, the Trustee shall vote the shares as
instructed. The instructions received by the Trustee from
Participants or Beneficiaries shall be held by the Trustee in
strict confidence and shall not be divulged or released to any
person including directors, officers or employees of the Employer,
or of any other company, except as otherwise required by law.
(2) With respect to all corporate matters submitted to shareholders,
all shares of Employer Stock shall be voted only in accordance with
the directions of such Participants as Named Fiduciaries as given
to the Trustee as provided in Section 10.8(A)(1). With respect to
shares of Employer Stock allocated to the account of a deceased
Participant, such Participant's Beneficiary, as Named Fiduciary,
shall be entitled to direct the voting of shares of Employer Sock
as if such Beneficiary were the Participant.
(B) All tender or exchange decisions with respect to Employer Stock held in
the Employer Stock Fund shall be made only by the Participants acting
in their capacity as Named Fiduciaries with respect to the Employer
Stock allocated to their accounts in accordance with the following
provisions of this Section 10.8(B):
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(1) In the event an offer shall be received by the Trustee (including a
tender offer for shares of Employer Stock subject to Section
14(d)(1) of the Securities Exchange Act of 1934 or subject to Rule
13e-4 promulgated under that Act, as those provisions may from time
to time be amended) to purchase or exchange any shares of Employer
Stock held by the Trust, the Trustee will advise each Participant
who has shares of Employer Stock credited to such Participant's
account in writing of the terms of the offer as soon as practicable
after its commencement and will furnish each Participant with a
form by which he may instruct the Trustee confidentially whether or
not to tender or exchange shares allocated to such Participant's
account, and, separately, Unallocated Shares and Non-Directed
Shares (including fractional shares to 1/1000th of a share). The
directions with respect to Non-Directed Shares and Unallocated
Shares shall apply to such number of Non-Directed Shares and
Unallocated Shares equal to the total number of Non-Directed Shares
and Unallocated Shares multiplied by a fraction, the numerator of
which is the number of shares of Employer Stock credited to the
Participant's account and the denominator of which is the total
number of shares credited to the accounts of all such Participants
who have timely provided directions to the Trustee with respect to
Non-Directed Shares and Unallocated Shares under this Section
10.8(B). The materials furnished to the Participants shall include
(i) a notice from the Trustee that, except as provided in this
Section 10.8(B), the Trustee will not tender or exchange any shares
for which timely instructions are not received by the Trustee and
(ii) such related documents as are prepared by any person and
provided to the shareholders of the Employer pursuant to the
Securities Exchange Act of 1934. The Committee and the Trustee may
also provide Participants with such other material concerning the
tender or exchange offer as the Trustee or the Committee in its
discretion determines to be appropriate; provided, however, that
prior to any distribution of materials by the Committee, the
Trustee shall be furnished with sufficient numbers of complete
copies of all such materials. The Employer and the Committee will
cooperate with the Trustee to ensure that Participants receive the
requisite information in a timely manner.
(2) The Trustee shall tender or not tender shares or exchange shares of
Employer Stock (including fractional shares to 1/1000th of a share)
only as and to the extent instructed by the Participants as Named
Fiduciaries as provided in Section 10.8(B)(1). With respect to
shares of Employer Stock allocated to the account of a deceased
Participant, such Participant's Beneficiary, as a Named Fiduciary,
shall be entitled to direct the Trustee whether or not to tender or
exchange such shares as if such Beneficiary were the Participant.
If tender or exchange instructions for shares of Employer Stock
allocated to the account of any Participant are not timely received
by the Trustee, the Trustee will treat the non-receipt as a
direction not to tender or exchange such shares. The instructions
received by the Trustee from Participants or Beneficiaries shall be
held by the Trustee in strict confidence and shall not be divulged
or released to any person, including directors, officers or
employees of the Employer, or of any other company, except as
otherwise required by law.
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(3) In the event, under the terms of a tender offer or otherwise, any
shares of Employer Stock tendered for sale, exchange or transfer
pursuant to such offer may be withdrawn from such offer, the
Trustee shall follow such instructions respecting the withdrawal of
such securities from such offer in the same manner and the same
proportion as shall be timely received by the Trustee from the
Participants, as Named Fiduciaries, entitled under this Section
10.8(B) to give instructions as to the sale, exchange or transfer
of securities pursuant to such offer.
(4) In the event an offer shall be received by the Trustee and
instructions shall be solicited from Participants pursuant to
Section 10.8(B)(1-3) regarding such offer, and prior to termination
of such offer, another offer is received by the Trustee for the
securities subject to the first offer, the Trustee shall use its
best efforts under the circumstances to solicit instructions from
the Participants to the Trustee (i) with respect to securities
tendered for sale, exchange or transfer pursuant to the first
offer, whether to withdraw such tender, if possible, and, if
withdrawn, whether to tender any securities so withdrawn for sale,
exchange or transfer pursuant to the second offer and (ii) with
respect to securities not tendered for sale, exchange or transfer
pursuant to the first offer, whether to tender or not to tender
such securities for sale, exchange or transfer pursuant to the
second offer. The Trustee shall follow all such instructions
received in a timely manner from Participants in the same manner
and in the same proportion as provided in Section 10.8(B)(1-3).
With respect to any further offer for any Employer Stock received
by the Trustee and subject to any earlier offer (including
successive offers from one or more existing offerors), the Trustee
shall act in the same manner as described above.
(5) A Participant's instructions to the Trustee to tender or exchange
shares of Employer Stock will not be deemed a withdrawal or
suspension from the Plan or a forfeiture of any portion of the
Participant's interest in the Plan. Funds received in exchange for
tendered shares will be credited to the account of the Participant
whose shares were tendered and will be used by the Trustee to
purchase Employer Stock, as soon as practicable. In the interim,
the Trustee will invest such funds in short-term investments
permitted under the Plan, and in the same manner in which forfeited
amounts are invested.
(6) In the event the Employer initiates a tender or exchange offer, the
Trustee may, in its sole discretion, enter into an agreement with
the Employer not to tender or exchange any shares of Employer Stock
in such offer, in which event, the foregoing provisions of this
Section 10.8(B) shall have no effect with respect to such offer and
the Trustee shall not tender or exchange any shares of Employer
Stock in such offer.
(C) The Trustee acting with respect to the Employer Stock Fund may with the
consent of the Committee designate any Employee or other Trustee as
agent to solicit the instructions to vote provided for in Subsection
(A) of this Section, and shall be held harmless in relying upon such
agent's written advice as to how shares are to be voted, and said
Trustee may, with the consent of the Committee, designate any Employee
as agent to solicit instructions from Participants regarding such a
tender offer, as required under Subsection (B) above, and shall be held
harmless in relying upon such agent's written advice as to whether
shares of Employer Stock are to be tendered.
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(D) The Employer shall be responsible for complying with applicable federal
and state securities laws and regulations.
10.9 VALUATION OF INVESTMENT FUNDS AND ACCOUNTS.
(A) As of each Valuation Date, the Trustee shall determine the fair market
value of each Investment Fund, including an Employer Stock Fund, if
any, being administered by the Trustee. With respect to each such
Investment Fund, the Trustee shall determine (a) the change in value
between the current Valuation Date and the then last preceding
Valuation Date, (b) the net gain or loss resulting from expenses paid
(including fees and expenses, if any, which are to be charged to such
Fund) and (c) realized and unrealized gains and losses.
The transfer of funds to or from an Investment Fund pursuant to Section
10.7(C) and payments, distributions and withdrawals from an Investment
Fund to provide benefits under the Plan for Participants or
Beneficiaries shall not be deemed to be gains, expenses or losses of an
Investment Fund.
After each Valuation Date, the Trustee shall allocate the net gain or
loss of each Investment Fund as of such Valuation Date to the accounts
of Participants participating in such Investment Fund on such Valuation
Date. Contributions, forfeitures and rollovers received and credited to
Participants' accounts as of such Valuation Date, or as of any earlier
date since the last preceding Valuation Date shall not be considered in
allocating gains or losses allocated to Participants' accounts.
(B) The reasonable and equitable decision of the Trustee as to the value of
each Investment Fund, including an Employer Stock Fund, if any, and of
any account as of each Valuation Date shall be conclusive and binding
upon all persons having any interest, direct or indirect, in the
Investment Funds or in any account.
ARTICLE XI
ADMINISTRATION
11.1 COMMITTEE MEMBERSHIP. The Employer shall appoint a Committee which shall
consist of at least one member. The Committee members will be named in the
Adoption Agreement and may be, but are not required to be, Employees of the
Employer. All members of the Committee shall serve at the pleasure of the
Employer. In the event that the Committee has more than one member, one
member shall serve as Chairman and one as Secretary. Any member of the
Committee may resign by notice in writing to the Employer. Any vacancy in
the Committee shall be filled by the Employer as soon as practicable after
a vacancy. If the Employer does not designate a Committee, the Employer
shall assume all of the duties of the Committee.
11.2 POWERS AND DUTIES OF COMMITTEE. The Committee shall have all powers and
duties and only the powers and duties as are specifically conferred upon it
by this Plan or as the Employer may delegate to or impose upon it
consistent with the provisions of this Plan, ERISA and the Code. Without
limiting the generality of the foregoing, the Committee shall have the
following powers and duties:
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(A) to interpret and construe the terms and provisions of this Plan and to
decide any questions which may arise hereunder, including but not
limited to --
(1) the amount of a Participant's Compensation,
(2) a Participant's Years of Service,
(3) the age of any person who might be entitled to receive benefits,
(4) the right of any person to receive benefits,
(5) the amount of any benefits to be paid to any persons;
(B) to cause to be maintained all necessary records and accounts under this
Plan and to keep in convenient form any data as may be necessary for
valuation of the assets and liabilities;
(C) to rely upon the records of the Employer or upon any certificate,
statement or other representation made to it by a Participant, a
Beneficiary, the authorized representative of the Participant or
Beneficiary, or the Trustee concerning any fact required to be
determined under any of the provisions of this Plan, and the Committee
shall not be required to make inquiry into the propriety of any action
by the Employer or the Trustee;
(D) to give written notice to a Participant, a Beneficiary, or the
authorized representative of the Participant or Beneficiary, of the
amount of benefits payable under this Plan;
(E) to make and enforce any rules, not inconsistent with this Plan, as it
shall deem necessary or proper for the efficient administration of this
Plan;
(F) to have and exercise such other authority as it deems necessary to
carry out the purposes and provisions of this Plan, provided that any
act of discretion permitted shall be exercised in a uniform
non-discriminatory manner with respect to individuals in like or
similar circumstances;
(G) to adopt rules and guidelines for the administration of this Plan,
provided that they are not inconsistent with the terms of this Plan and
are uniformly applicable to all persons similarly situated and to
delegate in accordance with Section 11.8 such functions and duties as
the Committee deems advisable;
(H) to establish a funding policy and investment objectives consistent with
the purposes of the Plan and the requirements of law;
(I) to employ such attorneys, accountants and agents as it shall determine
to assist it in carrying out its duties hereunder.
Except as otherwise provided in this Plan or determined by the Employer,
any action or determination taken or made by the Committee or any
interpretation or construction made by the Committee shall be final and
shall be binding upon all persons. The Committee shall at all times
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exercise the power and authority given to it under this Plan in a fair,
reasonable and non-discriminatory manner.
11.3 ACTIONS OF THE COMMITTEE. Any act authorized or required to be taken by the
Committee shall be taken by a decision of the majority of the members
acting at the time. Any decision of the Committee may be expressed by a
vote at a Committee meeting or in writing, signed by all members of the
Committee, without a meeting. All allocation statements, notices,
directions, approvals, instructions and all other communications required
or authorized to be given by the Committee under this Plan shall be in
writing and signed by a majority of the members of the Committee. The
Committee may, however, by an instrument in writing signed by all the
members and filed with the Trustee, designate one or more if its members as
having the authority to sign all such communications on behalf of the
Committee. Until notified in writing to the contrary, the Trustee shall be
fully protected in acting in accordance with all communications which it
considers genuine and to have been signed on behalf of the Committee by the
members authorized to sign communications. If at any time for any reason
the Committee shall be unable to act with respect to any matter, the
Employer shall act with respect to that matter and its action shall be
final and it shall be binding upon all persons.
11.4 RESIGNATION, Removal and Designation of Successors. Any member of the
Committee may resign at any time and any member may be removed by the
Employer with or without cause. In case of resignation, death, removal or
inability or failure for any cause of any member of the Committee to serve
or to continue to serve, a successor shall be appointed by the Employer.
The Committee shall promptly notify the Trustee of any change in its
membership.
11.5 COMMITTEE REVIEW. If any Participant, Spouse, Beneficiary, or other
authorized representative of a Participant, Spouse or Beneficiary shall
file an application with the Committee for benefits under the Plan and the
application is denied, in whole or in part, such applicant shall be
notified of the denial in writing within ninety (90) days of receipt of the
claim. The notice to the applicant shall state that the Committee has
denied the application pursuant to the exercise of its discretionary
powers. This notice shall set forth the specific reasons for the denial,
specific reference to pertinent Plan provisions upon which the denial is
based, a description of any additional information needed to perfect the
claim with an explanation of why it is necessary and an explanation of
procedure for appeal.
Any Participant, Spouse, Beneficiary, or other authorized representative of
the Participant, Spouse or Beneficiary whose application for benefits has
been denied may, within sixty (60) days after receiving the notification,
make a written application to the Committee to review the denial. The
applicant may request that the review be made by written statements
submitted by the applicant and the Committee, at a hearing, or by both. Any
hearing shall be held in the main offices of the Employer on a date and
time as the Employer shall designate with at least seven (7) days notice to
the applicant unless the applicant accepts shorter notice. Within sixty
(60) days after the review has been completed, the Employer shall render a
written decision and shall send a copy to the applicant. This decision
shall include specific reasons for the decision, as well as specific
references to the pertinent Plan provisions upon which the decision is
based.
If the Participant, Spouse, Beneficiary, or other authorized representative
of a Participant, Spouse or Beneficiary does not file written notice with
the Employer at the times set forth above, the
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individual shall have waived all benefits under this Plan other than as
set forth in the notice from the Committee.
11.6 RECORDS. The Committee shall keep or cause to be kept records of all
meetings, proceedings and actions held, undertaken or performed by it and
shall furnish to the Employer reports as the Employer may request.
11.7 COMPENSATION. The members of the Committee shall serve without
compensation for services as such, but all reasonably incurred fees and
expenses shall be paid by the Employer.
11.8 DESIGNATION OF NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY AMONG
FIDUCIARIES. The Employer, the Committee and the Trustee shall be "Named
Fiduciaries" with respect to this Plan as that term is defined in ERISA.
The Named Fiduciaries shall have only those specific powers, duties,
responsibilities and obligations as are given to them under this Plan. The
Named Fiduciaries may designate any person or persons as a fiduciary and
may delegate to such person or persons any one or more of their powers,
functions, duties and responsibilities with respect to the Plan as set
forth in this Plan, authorizing or providing for such direction,
information or action. Any such designation shall be made in writing and
shall become effective upon written acceptance. No such designation or
delegation by the Employer or the Committee of any of its powers,
authority or responsibilities to the Trustee shall become effective unless
such designation or delegation shall first be accepted by the Trustee in a
writing signed by it and delivered to the Employer or the Committee, as
applicable. Furthermore, each Named Fiduciary may rely upon any such
direction, information or action of another Named Fiduciary as being
proper under this Plan and is not required to inquire into the propriety
of any such direction, information or action. It is intended that under
this Plan each Named Fiduciary shall be responsible for the proper
exercise of its own powers, duties, responsibilities and obligations and
shall not be responsible for act or failure to act of another fiduciary.
11.9 NOTICE BY COMMITTEE OR EMPLOYER. Any communication or notice to any person
by the Committee or the Employer shall be in writing and may be given by
delivery to the person or by first class mail with postage prepaid
addressed to the person at the last address on file with the Committee or
the Employer. Any notice delivered as provided above shall be deemed to
have been given when delivered, and any notice mailed as provided above
shall be deemed to have been given when mailed.
11.10 LOANS TO PARTICIPANTS.
(A)(1) In accordance with Section 11.8 above, the Committee is hereby
designated as the named fiduciary with sole authority and
responsibility to approve or deny loans and, except as provided in
subsections (G) and (H) of this Section, collect unpaid loans, in
accordance with the provisions of this Section 11.10. This Section
11.10 shall apply if the Employer is eligible to and elects Item
B(16) of the Adoption Agreement.
(2) Subject to the consent of the Committee, loans may be made upon
approval of the written application of a Participant or Beneficiary
submitted to the Committee. Such application shall be submitted
during a specified period established by the Committee prior to the
date the loan is to be made. The Committee shall notify the
Participant or Beneficiary whether the loan has been approved or
denied. Loans
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shall be made available to all Participants and Beneficiaries on a
reasonably equivalent basis, except that no loans will be made to
any Stockholder-Employee or Owner-Employee and no loan shall be
made to any Participant which the Committee, upon reviewing the
Participant's written application determines may be reasonably
expected to be unable to repay the loan. Loans shall not be made
available to Highly Compensated Employees (as defined in Section
414(q) of the Code) in an amount greater than the amount made
available to other Employees. Except for loans made prior to the
date this Plan is adopted, a Participant or Beneficiary shall have
no more than five loans outstanding at any given time.
(3) All loans will be adequately secured and will bear a reasonable
rate of interest. Rates of interest will be determined daily by the
Trustee for Plan loans. The Committee will determine the minimum
loan amount for the Plan.
(B) In reviewing and approving or denying loan applications hereunder, the
Committee shall bear sole responsibility for ensuring compliance with
all applicable federal or state laws and regulations, including the
federal Truth In Lending Act (15 U.S.C. Section 1601 et seq.), and
Equal Credit Opportunity Act (15 U.S.C. Section 1691 et seq.). The
Committee shall upon request supply the Trustee with evidence that it
has complied with such federal or state law.
(C) Notwithstanding Section 7.13 above, each loan made hereunder shall be
secured by a written assignment, in favor of the Plan, of that portion
of the Participant's accounts which the Committee determines to be
necessary to adequately secure repayment of the loan.
(D) A Participant must obtain the consent of his or her Spouse, if any, to
use the account balance as security for the loan. Spousal consent
shall be obtained no earlier than the beginning of the ninety (90) day
period that ends on the date the loan is to be so secured. The consent
must be in writing and must be witnessed by a Plan representative or
Notary Public. Such consent shall thereafter be binding with respect
to the consenting spouse or any subsequent spouse with respect to that
loan. A new consent shall be required if the account balance is used
for renegotiation, extension, renewal, or other revision of the loan.
Notwithstanding the preceding paragraph, no spousal consent is
required for the use of the account balance as security for a Plan
loan to the Participant under a safe-harbor profit sharing Plan as
described in Section 7.10(F).
(E) No loan shall be approved by the Committee to any Participant or
Beneficiary in any amount which exceeds the lesser of
(1) $50,000, reduced by the excess (if any) of -
(a) the highest outstanding balance of loans from the Plan during
the one-year period ending on the day before the date on which
such loan was made, over,
(b) the outstanding balance of loans from the Plan on the date on
which such loan was made, or
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(2) fifty percent (50%) of the present value of the Participant's
nonforfeitable accrued benefit.
For purposes of the above limitation, all loans from all plans of the
Employer and other members of a group of employers described in
Sections 414(b), (c), (m) and (o) of the Code are aggregated.
The term of the loan shall be determined by the Committee.
Furthermore, any 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, except that the Committee, in its
discretion, may permit a repayment period in excess of five years for
loans made to a Participant or Beneficiary used to acquire a dwelling
unit which, within a reasonable time (determined at the time the loan
is made) will be used as a principal residence of the borrower.
An assignment or pledge of any portion of the participant's interest
in the Plan will be treated as a loan under this paragraph.
(F) Each loan hereunder shall be made pro rata from the borrowing
Participant's available accounts and Investment Funds. Loan repayments
shall generally be made via payroll deduction, except that the
repayment of outstanding principal at maturity, in the event the loan
is called, or in the event the Participant chooses to prepay the loan
shall be made in such manner as the Committee shall determine. Loan
repayments and interest thereon shall be credited to the Investment
Funds and accounts in accordance with current elections. No loan shall
be considered a general investment of the Trust Fund. Each loan shall
be evidenced by a written agreement, evidencing the Participant's
obligation to repay the borrowed amount to the Plan, in such form and
with such provisions consistent with this Section 11.10 as is
acceptable to the Trustee. All loan agreements shall be deposited with
the Trustee.
(G) In the event a Participant does not repay the principal of such loan
or interest thereon at such times as are required by the terms of the
loan or if the Participant ceases to be an Employee while such
Participant has a loan made hereunder which is outstanding, the
Committee, in its discretion, may direct the Trustee to take such
action as the Committee may reasonably determine, including:
(1) demand repayment of the loan and, subject to Section 10.4(K),
institute legal action against the Participant to enforce
collection of any balance due from the Participant, or
(2) demand repayment of the loan, and charge the total amount of the
unpaid loan and unpaid interest against the balance credited to
the Participant's vested account balance which was assigned as
security for the loan and reduce any payment or distribution from
the Trust Fund to which the Participant or the Participant's
Beneficiary may become entitled to the extent necessary to
discharge the obligation on the loan.
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Notwithstanding the foregoing provisions of this Paragraph (G), in the
event of default, foreclosure on the note and attachment of security
will not occur until a distributable event occurs in the Plan.
(H) In the event the Committee fails or refuses for any reason to direct
the Trustee as provided in Paragraph (G) above or if the Trustee
otherwise reasonably concludes that the collectibility of a loan
hereunder is in jeopardy, the Trustee is authorized to take such
action as it may reasonably determine to enforce repayment and
satisfaction of the loan. The Employer shall be responsible for costs
and expenses incurred in collecting any loan balance.
(I) In the event that the amount of any payment or distribution from the
Trust Fund is insufficient to repay the balance due on any loan, the
Participant shall be liable for and continue to make repayments on
such balance.
(J) If a valid spousal consent has been obtained in accordance with
Paragraph (D), then, notwithstanding any other provision of this Plan,
the portion of the Participant's vested account balance used as a
security interest held by the Plan by reason of a loan outstanding to
the Participant shall be taken into account for purposes of
determining the amount of the account balance payable at the time of
death or distribution, but only if the reduction is used as repayment
of the loan. If less than 100% of the Participant's vested account
balance (determined without regard to the preceding sentence) is
payable to the surviving Spouse, then the account balance shall be
adjusted by first reducing the vested account balance by the amount of
the security used as repayment of the loan, and then determining the
benefit payable to the surviving Spouse.
ARTICLE XII
FAILURE TO ATTAIN OR RETAIN QUALIFIED STATUS
12.1 FAILURE TO QUALIFY AS A PROTOTYPE. This Plan is established with the
intent that it shall qualify under Section 401 of the Code and that it
shall comply with ERISA and all other applicable laws, regulations and
rulings. It may be modified and amended retroactively, if necessary, to
secure such qualification. Should the Internal Revenue Service determine
that this Plan does not qualify under the Code or any statute of similar
import, or fails or refuses to issue an opinion, and if the Plan is not
amended, as required to qualify, before the time allowed by law for the
Employer to file its corporate federal tax return for the taxable year in
which the Effective Date occurs, the Plan shall be considered to be
rescinded and of no force and effect. Any assets attributable to
contributions made by the Employer shall be returned to the Employer by
the Trustee as soon as administratively feasible. The Employer shall
refund to the Participant any contributions made by the Participant to the
Plan.
12.2 FAILURE OF EMPLOYER TO ATTAIN OR RETAIN QUALIFICATION. If the Employer's
Plan fails to attain or retain qualification, such Plan will no longer
participate in this prototype Plan and will be considered an individually
designed Plan.
ARTICLE XIII
MISCELLANEOUS
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13.1 EMPLOYER ACTION. Except as may be specifically provided herein, any action
required or permitted to be taken by the Employer may be taken on behalf
of the Employer by any officer of the Employer.
13.2 NO GUARANTEE OF INTERESTS. Neither the Trustee, the Employer nor any other
named fiduciary in any way guarantees the Trust Fund from loss or
depreciation, nor do they guarantee any payment to any person. The
liability of the Trustee, the Employer and a named fiduciary to make any
payments hereunder is limited to the available assets of the Trust Fund.
13.3 EMPLOYMENT RIGHTS. The Plan is not a contract of employment. Participation
in the Plan will not give any Participant the right to be retained in the
Employer's employ, nor any right or claim to any benefit under the Plan,
unless the right or claim has specifically accrued under the Plan.
13.4 INTERPRETATIONS AND ADJUSTMENTS. To the extent permitted by law, an
interpretation of the Plan and a decision on any matter within a named
fiduciary's discretion made in good faith is binding on all persons. A
misstatement or other mistake of fact shall be corrected when it becomes
known and the person responsible shall make such adjustment on account
thereof as he or she considers equitable and practicable.
13.5 UNIFORM RULES. In the administration of the Plan, uniform rules will be
applied to all Participants similarly situated.
13.6 EVIDENCE. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person
acting on it considers pertinent and reliable and signed, made or
presented by the proper party or parties.
13.7 WAIVER OF NOTICE. Any notice required under the Plan may be waived by the
person entitled to notice.
13.8 CONTROLLING LAW. The law of the state where the Trustee is located shall
be the controlling state law in all matters relating to the Plan and shall
apply to the extent that it is not preempted by the laws of the United
States of America.
13.9 TAX EXEMPTION OF TRUST. The trust herein created is designated as
constituting a part of a Plan intended to qualify under Sections 401(a) of
the Code and to be tax-exempt under Section 501(a) of the Code.
13.10 COUNTERPARTS. The Plan may be executed in two or more counterparts, any
one of which will be an original without reference to the others.
13.11 ANNUAL STATEMENT OF ACCOUNT. The assets of the Trust Fund will be valued
annually at fair market as of the last day of each Plan Year. On such date
the earning and losses of the Trust Fund will be allocated to each
Participant's accounts in the ratio that such account balance bears to all
account balances. The Trustee will deliver to the Employer a statement of
each Participant's account balances as of the last day of Plan Year.
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13.12 NO DUTY TO INQUIRE. No person shall have any duty to make any inquiry as
to the application or use of the Trust Fund, or any part thereof, or to
inquire into the validity, expediency or propriety of any matter or thing
done or proposed to be done by the Trustee.
13.13 INVALIDITY. In case any provisions of this Plan shall be invalid, this
fact shall not affect the validity of any other provision.
13.14 TITLES. Titles to Articles and Sections are for convenience only and shall
have no bearing upon the construction or interpretation of this Plan.
13.15 NO DUTY OF TRUSTEE TO COLLECT CONTRIBUTIONS. The Trustee shall be
accountable for all contributions received but shall have no duty to
require any contributions to be delivered or to determine if the
contributions received comply with the Plan or with any Board of Directors
resolution of the Employer providing for contributions.
13.16 TRUSTEE DISTRIBUTES BY COMMITTEE DIRECTION. The Trustee shall make
distributions only through Committee direction. The Trustee shall have no
responsibility to see how distributions are applied or to ascertain
whether the Committee's directions comply with the Plan. Notwithstanding
anything in the Plan to the contrary, payments made in accordance with
these provisions will continue only so long as amounts remain in the
Participant's accounts.
ARTICLE XIV
AMENDMENT OR TERMINATION
14.1 AMENDMENT BY THE SPONSOR. Society National Bank, the sponsoring
organization, reserves the right without being required to obtain the
approval of the Employer to amend any part of the Plan from time to time,
subject to the provisions of Article XII, Section 14.2 and the following:
(A) Except as provided in Section 14.1(B) and (C), no amendment shall
become effective until at least thirty (30) days' prior written notice
(unless the Employer agrees to shorter notice) has been given to the
Employer, nor shall any such amendment reduce Participants' benefits
to less than the benefits to which they would have been entitled if
they had resigned from the employ of the Employer on the effective
date of the amendment;
(B) An amendment of the Plan and Trust which the sponsor deems necessary
to enable the Plan and Trust to meet the requirements of Section
401(a) of the Code may be made effective as of the date the Plan and
Trust was established by the sponsor or as of any subsequent date;
(C) An amendment of the Plan and Trust to conform the Plan and Trust to
any change in the law, regulations or rulings of the United States may
take effect as of the date such amendment is required to be effective.
Any amendment executed pursuant to the provisions of this Section 14.1
shall be executed by an authorized officer of the sponsor, or its
successor. For purposes of this Section 14.1, the Employer shall be
deemed to have been furnished a copy of any amendment on the business
day next following the mailing by the sponsor or the Trustee.
14.2 AMENDMENT BY ADOPTING EMPLOYER. The Employer may (1) change the choice of
options in the Adoption Agreement, (2) add overriding language in the
Adoption Agreement when such language
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is necessary to satisfy Section 415 or Section 416 of the Code because of
the required aggregation of multiple plans, and (3) add certain model
amendments published by the Internal Revenue Service which specifically
provide that their adoption will not cause the Plan to be treated as
individually designed. An Employer that amends the Plan for any other
reason, including a waiver of the minimum funding requirement under
Section 412(d) of the Code, will no longer participate in this Master or
Prototype Plan and will be considered to have an individually designed
Plan.
14.3 VESTING - PLAN TERMINATION. In the event of termination or partial
termination of the Plan, the account balance of each affected Participant
will be nonforfeitable.
14.4 VESTING - COMPLETE DISCONTINUANCE OF CONTRIBUTIONS. In the event of a
complete discontinuance of contributions under the Plan, the account
balance of each affected Participant will be nonforfeitable.
14.5 PLAN MERGER - MAINTENANCE OF BENEFIT. In the event of a merger or
consolidation with, or transfer of assets to any other Plan, each
Participant will receive a benefit immediately after the merger,
consolidation or transfer (if the Plan then terminated) which is at least
equal to the benefit the Participant was entitled to immediately before
such merger, consolidation or transfer (if the Plan had then terminated).
14.6 DIRECT TRANSFER. In its discretion, the Trustee may accept the direct
transfer of Plan assets from the trustee of other retirement plans
described in Code Section 401(a). If the Plan receives a direct transfer
of elective deferrals (or amounts treated as elective deferrals) under a
Plan with a Code Section 401(k) arrangement, the distribution restrictions
of Code Sections 401(k)(2) and (10) continue to apply to those transferred
elective deferrals.
14.7 TERMINATION OF PARTICIPATION BY EMPLOYER. The Employer expects to continue
its participation in this Plan indefinitely but reserves the right to
terminate this Plan as to its Employees at any time by written instrument
filed with the Trustee. In the event of such termination, partial
termination or complete discontinuance of contributions, or termination as
provided in Section 13.3, the account balance of each affected Participant
will be nonforfeitable. Distribution to Participants who have theretofore
become entitled to the payment of any benefits hereunder or to Spouses or
Beneficiaries of deceased Participants shall be made in the same manner as
if the Employer's participation had not terminated or contributions had
not been discontinued.
The account(s) of each such Participant, in the event of payment in other
than a single sum, need not be converted into cash, but may continue to
remain in the trust, with a right and obligation thereafter to participate
in the net earnings, losses, taxes and expenses of the trust.
If any Participant shall die after the termination of the Employer's
participation and before all of said Participant's interest has been paid,
then, upon the written direction of Employer, the entire undistributed
portion shall be paid in a single sum to the Participant's Beneficiary.
In the event of complete discontinuance of contributions, the Employer
shall terminate this Plan as to its Employees and each Participant's
interest shall be distributed to such Participant.
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14.8 NOTICE OF AMENDMENT, TERMINATION OR PARTIAL TERMINATION. The Committee
will notify affected Participants of an amendment, termination or partial
termination of the Plan within a reasonable time.
14.9 SUBSTITUTION OF TRUSTEE. Any corporation or association into which the
Trustee may be converted, merged or with which it may be consolidated, or
any corporation or association resulting from any conversion, merger,
reorganization or consolidation to which the Trustee may be a party, shall
be the successor of the Trustee hereunder without the execution or filing
of any instrument or the performance of any further act.
ARTICLE XV
DISCHARGE OF DUTIES BY FIDUCIARIES
15.1 DISCHARGE OF DUTIES. Subject to the provisions of Articles IX and X, the
Named Fiduciaries and any other fiduciary shall discharge their respective
duties set forth in the Plan solely in the interest of the Participants
and their Spouses and Beneficiaries and:
(A) for the exclusive purpose of:
(1) providing benefits to Participants and their Spouses and
Beneficiaries; and
(2) defraying reasonable expenses of administering the Plan;
(B) with the care, skill, prudence and diligence under the circumstances
then prevailing that a prudent person acting in a like capacity and
familiar with such matters would use in the conduct of an enterprise
of a like character and with like aims; and
(C) by diversifying the investments of the Plan so as to minimize the risk
of large losses, unless under the circumstances it is clearly prudent
not to do so.
ARTICLE XVI
AMENDMENT AND CONTINUATION OF ORIGINAL PLAN
16.1 AMENDMENT AND CONTINUATION. Notwithstanding any of the foregoing
provisions of the Plan to the contrary, an Employer which has previously
established a profit sharing Plan and trust or money purchase pension Plan
and trust, as applicable, (the "Original Plan") may, in accordance with
the provisions of the Original Plan, amend and continue that Plan in the
form of this Plan and Trust and become an Employer hereunder, subject to
the following:
(A) Subject to the conditions and limitations of the Plan, each person who
is a Participant or former Participant under the Original Plan
immediately prior to the Effective Date of the amendment and
continuation thereof in the form of this Plan will continue as a
Participant under this Plan;
(B) The words "Original Plan" shall be substituted for the word "Plan"
where the word appears in Section 2.2 of the Plan;
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(C) No election may be made in the Adoption Agreement if such election
will reduce the benefits of a Participant under the Original Plan to
less than the benefits to which he would have been entitled if he had
resigned from the employ of the Employer on the date of the amendment
and continuation of the Original Plan in the form of this Plan;
(D) The amounts, if any, credited to a Participant's or former
Participant's accounts, immediately prior to the Effective Date of the
amendment and continuation of the Original Plan in the form of this
Plan shall constitute the opening balances in his or her accounts, as
appropriate, under this Plan and Trust;
(E) Amounts being paid to a former Participant or Beneficiary in
accordance with the provisions of the Original Plan shall continue to
be paid in accordance with such provisions; and
(F) Any Beneficiary designation in effect under the Original Plan
immediately before its amendment and continuation in the form of this
Plan shall be deemed to be a valid Beneficiary designation filed with
the Employer under Section 7.7 of this Plan, to the extent consistent
with the provisions of this Plan, unless and until the Participant or
former Participant revokes such Beneficiary designation or makes a new
Beneficiary designation under this Plan.
IN WITNESS WHEREOF, Society National Bank has established this prototype
Plan as of the 24th day of March, 1995.
SOCIETY NATIONAL BANK
By:
------------------------------------------------
Title: Senior Vice President and General Counsel
-----------------------------------------
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<PAGE> 1
Exhibit 4(d)
Basic Plan Document #05
Plan #002
IRS Letter Serial No.: D363689a
PRISM(R) PROTOTYPE RETIREMENT PLAN & TRUST
SECTION 401(K) PROFIT SHARING PLAN
(NONSTANDARDIZED)
ADOPTION AGREEMENT(1)
The Employer(2), designated below, hereby establishes a profit-sharing plan
(optionally including a cash or deferred arrangement (as defined in Section
401(k) of the Internal Revenue Code)) for all Eligible Employees as defined in
this Adoption Agreement pursuant to the terms of the PRISM(R) PROTOTYPE
RETIREMENT PLAN & TRUST BASIC PLAN DOCUMENT #05.
A. EMPLOYER INFORMATION:
1. NAME: Libbey Inc.
-----------
2. ADDRESS: P.O. Box 10060
--------------
3. ADDRESS: Toledo, OH 43699-0060
----------------------
4. ATTENTION: Christine L. Dreps TELEPHONE: (419) 325-2100
------------------ --------------
5. EMPLOYER TAXPAYER IDENTIFICATION NUMBER(3): 34-1559357
----------
B. BASIC PLAN PROVISIONS:
1. PLAN NAME (SELECT ONE):
a.[X] This plan is established effective 1/1, 1997, (the "Effective
Date") as a profit sharing plan and trust (optionally with a
"cash or deferred arrangement" as defined in Code Section 401(k))
to be known as LIBBEY LONG-TERM SAVINGS PLAN and Trust (the
"Plan") in the form of the PRISM(R) PROTOTYPE RETIREMENT PLAN &
TRUST.
- -------------
1 Footnotes in this Adoption Agreement are not to be construed as part of the
Plan provisions but are explanatory only. To the extent a footnote is
inconsistent with the provisions of the Basic Plan Document or applicable
law, the provisions of the Plan shall be construed in conformity with the
Basic Plan Document or law.
2 Terms that are capitalized are defined in the PRISM(R) PROTOTYPE RETIREMENT
PLAN & TRUST BASIC PLAN DOCUMENT.
3 The Plan will have an individual TIN, distinct from the Employer TIN.
<PAGE> 2
b.[ ] This plan is an amendment and restatement in the form of the
PRISM(R) PROTOTYPE RETIREMENT PLAN & TRUST, effective _______,
19__, (the "Effective Date") of the _________ Plan and Trust
(the "Plan"), originally effective as of ________, 19__ (the
"Original Effective Date").
2. EMPLOYER'S THREE DIGIT PLAN NUMBER: 007
---
3. COMMITTEE MEMBERS(4):
Libbey Inc. Employee Benefits Committee
---------------------------------------
4. DEFINITIONS:
A. COMPENSATION for allocation purposes:
I Will be determined over the following applicable period (select
only one):
(A)[X] the Plan Year
(B)[ ] the period of Plan participation during the Plan Year
(C)[ ] a consecutive 12 month period commencing on and ending
with, or within, the Plan Year.
II [X] If selected, Compensation will include Employer contributions
made pursuant to a Salary Reduction Agreement, or other
arrangement, which are not includible in the gross income of the
Employee under Section Section 125, 402(e)(3), 402(h)(1)(B) or
403(b) of the Internal Revenue Code.
III Shall NOT include (select as many as desired):
(A)[X] Bonuses
(B)[X] Commissions
(C)[ ] Taxable fringe benefits identified below:
(D)[X] Other items of remuneration identified below:
SAFETY BONUS PAY, DRAWINGS/AWARDS, TOOL ALLOWANCE PAY,
EDUCATIONAL ASSISTANCE
IV Shall be limited to $________, which shall be the maximum amount of
compensation considered for plan allocation purposes (but not for
testing purposes), and may not be an amount in excess of the
Internal
- ------------
4 Committee members direct the day to day operation of the Plan. Committee
members serve at the pleasure of the Employer. See Section 11.4 for
changes in Committee membership. If no Committee members are specified,
the Employer shall assume responsibility for the operations of the Plan.
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<PAGE> 3
Revenue Code Section 401(a)(17) limit in effect for the Plan Year
(5). If no amount is specified, Compensation shall be limited to
the Internal Revenue Code Section 401(a)(17) amount, as adjusted
by the Secretary of the Treasury from time to time.
B. EARLY RETIREMENT DATE:
I [X] is not applicable to this Plan
II [ ] is the latter of the date on which the Participant attains
age (not less than 55) and the date on which the
Participant completes ___ Years of Service.
C. HOUR OF SERVICE shall be determined on the basis of the method
selected below. Only one method may be selected. The method shall
be applied to all Employees covered under the Plan as follows
(select only one):
I [ ] On the basis of actual hours for which an
Employee is paid, or entitled to be paid.
II [X] On the basis of days worked. An Employee
shall be credited with ten (10) Hours of
Service if under Section 1.1(U) of the Plan
such Employee would be credited with at
least one (1) Hour of Service during the day.
III [ ] On the basis of weeks worked. An Employee
shall be credited with forty-five (45) Hours
of Service if under Section 1.1(U) of the
Plan such Employee would be credited with
at least one (1) Hour of Service during the
week.
IV [ ] On the basis of semi-monthly payroll
periods. An Employee shall be credited with
ninety-five (95) Hours of Service if under
Section 1.1(U) of the Plan such Employee
would be credited with at least one (1) Hour
of Service during the semi-monthly payroll
period.
V [ ] On the basis of months worked. An Employee
shall be credited with one hundred ninety
(190) Hours of Service if under Section
1.1(U) of the Plan such Employee would be
credited with at least one (1) Hour of
Service during the month.
D. LIMITATION YEAR shall mean the 12 month period commencing on
1/1 and ending on 12/31.
- ----------------
5 If no amount is specified, the maximum amount of Compensation
allowed under Code Section 401(a)(17) (the "$150,000 limit"
("$200,000 limit" prior to the Plan Year beginning before January
1, 1994)), as adjusted from time to time, shall be used.
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<PAGE> 4
E. NORMAL RETIREMENT DATE for each Participant shall
mean (select one):
I [X] the date the Participant attains age: 65
(not to exceed 65)
II [ ] the latter of the date the Participant
attains age ___ (not to exceed 65) or the
___ (not to exceed 5th) anniversary of the
participation commencement date. If for the
Plan Years beginning before January 1, 1988,
Normal Retirement Date was determined with
reference to the anniversary of the
participation commencement date (more than 5
but not to exceed 10 years), the anniversary
date for Participants who first commenced
participation under the Plan before the first
Plan Year beginning on or after January 1,
1988 shall be the earlier of (A) the tenth
anniversary of the date the Participant
commenced participation in the Plan (or such
anniversary as had been elected by the
employer, if less than 10) or (B) the fifth
anniversary of the first day of the first
Plan Year beginning on or after January 1,
1988. Notwithstanding any other provisions of
the Plan, the participant commencement date
is the first day of the first Plan Year in
which the Participant commenced participation
in the Plan.
F. PERMITTED DISPARITY LEVEL, for purposes of allocating
Employer Contributions, shall mean (select only one):
I [X] Not applicable - the Plan does not use
permitted disparity.
II [ ] The Taxable Wage Base, which is the
contribution and benefit base under section
230 of the Social Security Act at the
beginning of the year.
III [ ] _________ % (not greater than 100%) of the
Taxable Wage Base as defined in B(4)(f)(ii)
above.
IV $_______, provided that the amount does not
exceed the Taxable Wage Base as defined in
B(4)(f)(ii) above.
G. PLAN YEAR shall mean (select and complete only one
of the following):
I [ ] the 12-consecutive month period which
coincides with the Limitation Year. The
first Plan Year shall be the period
commencing on the Effective Date and
ending on the last day of the Limitation
Year.
II [ ] the 12-consecutive month period commencing on
_________, 19__, and each annual
anniversary thereof.
III [X] the calendar year (January 1 through
December 31).
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<PAGE> 5
H. QUALIFIED DISTRIBUTION DATE, for purposes of
making distributions under the provisions of a
Qualified Domestic Relations Order (as defined in
Internal Revenue Code Section 414(p)), [X] SHALL
[ ] SHALL NOT be the date the order is determined
to be qualified. If SHALL is selected, the Alternate
Payee will be entitled to an immediate distribution of
benefits as directed by the Qualified Domestic
Relations Order. If SHALL NOT is selected, the
Alternate Payee may only take a distribution on the
earliest date that the Participant is entitled to a
distribution.
I. SPOUSE:
[X] If selected, Spouse shall mean only that person
who has actually been the Participant's spouse
for at least one year.
J. YEAR OF SERVICE shall mean:
I For ELIGIBILITY purposes (select one of the
following):
(A) [ ] the 12 consecutive months during which an
Employee is credited with
(not more than 1000) Hours of Service.
(B) [X] a Period of Service (using the elapsed time
method of counting Service, as described in
Section 1.1(N)(3) of the Plan).
II For ALLOCATION accrual purposes (select one of the
following):
(A) [ ] the 12 consecutive months during which an
Employee is credited with
(not more than 1000) Hours of Service.
(B) [X] a Period of Service (using the elapsed time
method of counting Service, as described
in Section 1.1(N)(3) of the Plan).
III For VESTING service purposes (select one of the
following):
(A) [ ] the 12 consecutive months during which an
Employee is credited with
(not more than 1000) Hours of Service.
(B) [X] a Period of Service (using the elapsed time
method of counting Service, as described
in Section 1.1(N)(3) of the Plan).
IV For purpose of computing Years of Service in plans
N/A where Year of Service is defined in terms of Hours
of Service), the consecutive 12 month period shall
be:
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<PAGE> 6
(A) For ELIGIBILITY purposes, the first Year of
Service shall be computed using the 12 month
N/A period commencing on the Employee's date of hire
and ending on the first annual anniversary of the
Employee's date of hire (the "Initial Computation
Period"). In the event an employee does not
complete an eligibility Year of Service during
this initial computation period, the computation
period shall be (select only one):
(1) [ ] the period commencing on each annual
anniversary of the Employee's date of
hire and ending on the next annual
anniversary of the Employee's date of
hire.
(2) [ ] the Plan Year, commencing with the Plan
Year in which the Initial Computation
Period ends.
(B) For VESTING purposes, Years of Service shall be
computed on the basis of:
(1) [ ] the period commencing on each annual
anniversary of the Employee's date of
N/A hire and ending on the next annual
anniversary of the Employee's date of
hire.
(2) [ ] the Plan Year, commencing with the first
Plan Year an Employee completes an Hour
of Service.
(C) For ALLOCATION accrual purposes, Year of Service
shall be computed on the basis of the Plan Year.
V [ ] For ELIGIBILITY purposes, Years of Service
with the following Predecessor Employers
N/A shall count in fulfilling the eligibility
requirements for this Plan:
VI [ ] For VESTING purposes, Years of Service with
the following Predecessor Employers shall
N/A count for purposes of determining the
nonforfeitable amount of a Participant's
account:
5. COVERAGE:
This Plan is extended by the Employer to the following
Employees who have met the eligibility requirements (select
as many as appropriate):
I [ ] All Employees
II [ ] Salaried Employees
PAGE 6
<PAGE> 7
III [ ] Sales Employees
IV [ ] Hourly Employees
V [ ] Leased Employees
VI [ ] All Employees except (select as
applicable):
(A) [ ] those who are members of a
unit of Employees covered by a
collective bargaining agreement
between the Employer and Employee
representatives, if retirement
benefits were the subject of good
faith bargaining and if two percent or
less of the Employees who are covered
pursuant to that agreement are
professionals as defined in Section
1.410(b)-9 of the Regulations. For
this purpose, the term "Employee
representative" does not include any
organization more than half of whose
members are Employees who are owners,
officers, or executives of the
Employer.
(B) [ ] those who are nonresident
aliens (within the meaning of
Internal Revenue Code Section
7701(b)(1)(B)) and who receive
no earned income (within the
meaning of Internal Revenue Code
Section 911(d)(2)) from the Employer
which constitutes income from
sources within the United States
(within the meaning of Internal
Revenue Code Section 861(a)(3)).
VII [X] Union Employees (who are members of the
following unions or union affiliates:
GLASS, MOLDERS, POTTERY, PLASTICS & ALLIED
WORKERS, INTERNATIONAL UNION AFL-CIO, CLC
LOCAL UNION NO. 381
VIII [ ] Other Employees, described as follows:
---------
6. ELIGIBILITY:
An Employee covered by the Plan may become a Participant
upon completion of the following eligibility requirements:
A. SERVICE(6):
- -------------
6 If a fractional year is elected, the elapsed time method of computing
service shall be used for the fractional year. Eligibility provisions for
optional cash or deferred arrangements are contained in Item C of this
Adoption Agreement.
PAGE 7
<PAGE> 8
I [ ] There shall be no minimum service requirement
for an Employee to become a Participant.
II [X] The Employee must complete 60 Working Days
of Employment of Service (not more than
2 years) to be a Participant for purposes
of receiving allocations of Employer
Profit Sharing Contributions.
B. AGE:
I [X] There shall be no minimum age requirement for
an Employee to become a Participant.
II [ ] The Employee must attain age ______ (not more
than 21) to be a Participant in the Plan.
C. WAIVER OF AGE AND SERVICE REQUIREMENTS:
I [ ] Notwithstanding the provisions of Items
B(6)(a) and (b), Employees who have not
satisfied the age and service requirements,
but would otherwise be eligible to
participate in the plan, shall be eligible to
N/A participate on the Effective Date.
II [ ] For new Plans, notwithstanding the provisions
of Items B(6)(a) and (b), Employees who have
not satisfied the age and service
requirements, but would otherwise be eligible
to participate in the plan, shall be eligible
to participate on the Effective Date.
D. ENTRY DATES:
Upon completion of the eligibility requirements,
an Employee shall commence participation in the
Plan (select only one):
I [ ] As soon as practicable under the payroll
practices utilized by the Employer, and
consistently applied to all Employees, or if
earlier, the first day of the Plan Year (7).
II [X] As of the first day of the month following
the completion of the eligibility
requirements.
III [ ] As of the earliest of the first day of the
Plan Year, fourth, seventh or tenth month of
the Plan Year next following completion of
the eligibility requirements.
IV [ ] As of the earliest of the first day of the
Plan Year or seventh month of the Plan Year
next following completion of the eligibility
requirements.
- -------------
7 Notwithstanding the foregoing, an Employee who has met the eligibility
requirements may not enter the Plan later than six months following the
date on which the Employee first completes the eligibility requirements.
PAGE 8
<PAGE> 9
V [ ] As of the first day of the Plan Year
next following completion of the
eligibility requirements (may only
be selected if the eligibility year
of service requirement is 6 months
or less).
7. VESTING:
A. The percentage of a Participant's Employer
Contribution Account (attributable to Employer Profit
Sharing Contributions) to be vested in him or her
upon termination of employment prior to attainment of
the Plan's Normal Retirement Date shall be (8):
COMPLETED YEARS OF SERVICE
<TABLE>
<CAPTION>
1 2 3 4 5 6 7
-------- --------- -------- ------- -------- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
I [ ] 100%
-----
II [ ] 100%
-----
III [ ] 20% 40% 60% 80% 100%
----- ------ ----- ---- -----
IV [ ] 20% 40% 60% 80% 100%
----- ----- ----- ----- -----
V [ ] 10% 20% 30% 40% 60% 80% 100%
----- ----- ----- ----- ----- ----- -----
VI [ ] 100%
-----
VII [X] 100%
-----
VII [ ] Full and immediate vesting upon entry into the Plan(9)
</TABLE>
Notwithstanding anything to the contrary in
the Plan, the amount inserted in the blanks
above shall not exceed the limits specified
in Code Section 411(a)(2).
B. For purposes of computing a Participant's vested
account balance, Years of Service for vesting
purposes [ ]SHALL [ ]SHALL NOT include Years of
Service before the Employer maintained this Plan or
any predecessor plan, and [ ]SHALL [ ]SHALL NOT
include Years of Service before the Employee attained
age 18.
C. Notwithstanding the provisions of this Item B(7)(c)
of the Adoption Agreement, a Participant shall become
fully vested in his Participant's Employer
Contribution if: (10)
I [ ] the Participant's job is eliminated
without the Participant being
offered a comparable position
elsewhere with the Employer.
II [ ] for such reason as is described
below:
- --------------
8 Notwithstanding the selection made in this Item B(7)(a), a Participant
shall be fully vested in his or her Employer Contribution Accounts if the
Participant dies or becomes Disabled while in the employ of the Employer.
9 If more than one Year of Service is an eligibility requirement, Item viii
must be selected.
10 The provisions of this section will be administered by the Employer on a
consistent and nondiscriminatory basis.
PAGE 9
<PAGE> 10
8. EMPLOYER PROFIT SHARING CONTRIBUTIONS:
A. CONTRIBUTIONS:
I [ ] In its discretion, the Employer may
contribute Employer Profit Sharing
Contributions to the Plan.
II [ ] The Employer shall contribute
Employer Profit Sharing
Contributions to the Plan in the
amount of % of the Compensation of
all Eligible Participants under the
Plan.
III [ ] If selected, the Employer may make
Employer Profit Sharing
Contributions without regard to
current or accumulated Net Profits
of the Employer for the taxable year
ending with, or within the Plan
Year.
IV [ ] If selected, the Employer may
designate all or any part of the
Employer Profit Sharing
Contributions as Qualified
Nonelective Contributions, provided,
however, that contributions so
designated will be subject to the
same vesting, distribution, and
withdrawal restrictions as Before
Tax Contributions(11).
B. ALLOCATIONS:
Employer Profit Sharing Contributions shall be
allocated to the accounts of eligible Participants
according to the following selected allocation
formula:
I [ ] The Employer Profit Sharing
Contributions shall be allocated to
each eligible Participant's account
in the ratio which the Participant's
Compensation bears to the
Compensation of all eligible
Participants. Employer Profit
Sharing Plan Contributions, shall be
allocated to the accounts of
Participants who have completed a
Year of Service(12) (select one):
(A) [ ] as of the last day of
the month preceding the
month in which the
contribution was made.
(B) [ ] as of the last day of
the Plan quarter
preceding the quarter in
which the contribution
was made.
- --------------
11 Amounts designated as Qualified Nonelective Contributions will be allocated
pursuant to Section 3.1(A)(14) of the Basic Plan Document.
12 In the event contributions are allocated on a basis other than a full plan
year, the Year of Service shall be based on the elapsed time method of
calculation, and a Participant shall be deemed to have completed an
appropriate Period of Service for allocation purposes if the Participant
has completed a pro-rata Period of Service corresponding to the interval on
which contributions are allocated.
PAGE 10
<PAGE> 11
(C) [ ] as of the last day of
the Plan Year.
II [ ] The Employer Profit Sharing
Contributions shall be allocated in
accordance with the following
formula:
(A) If the Plan is Top-Heavy, the
contribution shall be first
credited to each eligible
Participant's Account in the
ratio which the Participant's
Compensation bears to the total
Compensation of all eligible
Participants, up to 3% of each
Participant's Compensation.
(B) If the Plan is Top-Heavy, any
Employer Profit Sharing
Contribution remaining after
the allocation in (a) above
shall be credited to each
eligible Participant's account
in the ratio which the
Participant's Excess
Compensation(13) bears to the
total Excess Compensation of
all eligible Participants, up
to 3% of each eligible
Participant's Excess
Compensation.
(C) Any contributions remaining
after the allocation in (b)
above shall be credited to each
eligible Participant's account
in the ratio which the sum of
the Participant's total
Compensation and Excess
Compensation bears to the sum
of the total Compensation and
Excess Compensation of all
eligible Participants, up to an
amount equal to the maximum
Excess Percentage times the sum
of the Participant's
Compensation and Excess
Compensation. If the Plan is
Top-Heavy, the maximum Excess
Percentage is N/A% (insert
percentage). If the Plan is not
Top-Heavy, the maximum Excess
Percentage is N/A% (insert
percentage, which shall not
exceed the prior Excess
Percentage limitation specified
by more than 3).
NOTE: If the Permitted Disparity
Level defined at Item B(4)(f)
is the Taxable Wage Base (which
is the contribution and benefit
base under section 230 of the
Social Security Act at the
beginning of the year), then
the maximum Excess Percentage
should be 2.7% if the Plan is
Top-Heavy and 5.7% if the Plan
is not Top-Heavy.
If the Permitted Disparity
Level defined at Item B(4)(f)
is greater than 80% but less
than 100% of the Taxable Wage
Base, then the maximum Excess
Percentage should be 2.4% if
the Plan is Top-Heavy and 5.4%
if the Plan is not Top-Heavy.
- -------------------
13 Excess Compensation means a Participant's Compensation in excess of the
Permitted Disparity Level specified in the Definitions section of this
Adoption Agreement.
PAGE 11
<PAGE> 12
If the Permitted Disparity
Level defined at Item B(4)(f)
is greater than the greater of
$10,000 or 20% of the Taxable
Wage Base, but not more than
80%, then the maximum Excess
Percentage should be 1.3% if
the Plan is Top-Heavy and 4.3%
if the Plan is not Top-Heavy.
(D) Any remaining Employer Profit
Sharing Contribution shall be
allocated among eligible
Participants' accounts in the
ratio which the Participant's
Compensation bears to the total
Compensation of all
Participants.
III [ ] If selected, and the Employer has
elected to allocate Employer Profit
Sharing Plan Contributions as of the
last day of the Plan Year, a
Participant must be employed by the
Employer on the last day of the Plan
Year in order to receive an
allocation(14).
IV [ ] A Participant who terminates before
the end of the period for which
contributions are allocated shall
share in the allocation of Employer
Profit Sharing Contributions if
termination of employment was the
result of (select all that apply):
(A) [ ] retirement
(B) [ ] disability
(C) [ ] death
(D) [ ] other, as specified below:
9. ROLLOVER & TRANSFER CONTRIBUTIONS (SELECT ONE):
A. [ ] Subject to policies, applied in a consistent
and nondiscriminatory manner, adopted by the
Committee, each Employee, who would
otherwise be eligible to participate in the
Plan except that such Employee has not yet
met the eligibility requirements, and each
Participant may make a Rollover Contribution
as described in Internal Revenue Code
Section Section 402(a)(5), 403(a)(4) or
408(d)(3).
B. [X] Subject to policies, applied in a consistent
and nondiscriminatory manner, adopted by the
Committee, each Participant may make a
Rollover Contribution as described in
Internal Revenue Code Section Section
402(a)(5), 403(a)(4) or 408(d)(3).
C. [ ] No Employee shall make Rollover
Contributions to the Plan.
10. DISTRIBUTIONS:
- -----------------
14 This option shall only be effective if Item 8(b)(i)(c) has been selected.
Even if this Item is selected, the provisions of Section 4.8 of the Basic
Plan Document may supersede this requirement if necessary to satisfy Code
Sections 401(a)(26) and 410(b).
PAGE 12
<PAGE> 13
A. DISTRIBUTIONS UPON SEPARATION FROM SERVICE:
The Normal Form of Benefit under the Plan shall be a
single lump sum distribution, made [X] (if selected)
as soon as administratively practical after receipt
of a distribution request from a Participant
entitled to a distribution or [ ] (if selected) upon
the Participant's attainment of the Plan's Early
Retirement Date or the Plan's Normal Retirement
Date, whichever is earlier.
In addition to the Normal Form of Benefit, the
Participant shall be entitled to select from among
the following optional forms of benefit specified by
the employer (select as many as apply):
I [X] Installment payments
II [ ] Such other forms as may be specified
below:
------------
B. IN-SERVICE DISTRIBUTIONS (SELECT AS MAY BE
APPROPRIATE):
I [ ] There shall be no in-service
distribution of Participant account
balances derived from Employer
Profit Sharing Contributions.
II [ ] Participants may request an
in-service distribution of their
account balance attributable to
N/A Employer Profit Sharing
Contributions, for the following
reasons:
(A) [ ] For purposes of satisfying
a financial hardship, as
determined in accordance
with the uniform
nondiscriminatory policy
of the Committee;
(B) [ ] Attainment of age 59 1/2
by the Participant; or
(C) [ ] Attainment of the Plan's
Normal Retirement Date by
the Participant.
11. FORFEITURES:
A. Forfeitures of amounts attributable to Employer
Profit Sharing Contributions shall be reallocated as
of:
N/A I [ ] the last day of the Plan Year in
which the Forfeiture occurred.
II [ ] the last day of the Plan Year
following the Plan Year in which the
Forfeiture occurred.
PAGE 13
<PAGE> 14
III [ ] the last day of the Plan Year in
which the Participant suffering the
Forfeiture has incurred five
consecutive One Year Breaks in
Service.
B. Forfeitures of Employer Profit Sharing Contributions
shall be reallocated as follows:
I [ ] Not applicable as Employer Profit
Sharing Contributions are always
100% vested and nonforfeitable.
II [ ] Used first to pay the expenses of
administering the Plan, and then
allocated pursuant to one of the
following two options(15):
III [ ] Forfeitures shall be allocated to
Participant's accounts in the same
manner as Employer Profit Sharing
Contributions, Employer Matching
Contributions, Qualified Nonelective
Contributions or Qualified Matching
Contributions, in the discretion of
the Employer, for the year in which
the Forfeiture arose.
IV [ ] Forfeitures shall be applied to
reduce the Employer Profit Sharing
Contributions, Employer Matching
Contributions, Qualified Nonelective
Contributions or Qualified Matching
Contributions, in the discretion of
the Employer, for the Plan Year
following the Plan Year in which the
Forfeiture arose.
12. LIMITATIONS ON ALLOCATIONS:
If the Employer maintains or ever maintained another qualified
retirement plan in which any Participant in this Plan is (or
was) a participant, or could possibly become a participant,
the Employer must complete the following:
A. If the Participant is covered under another qualified
defined contribution plan maintained by the Employer
other than a Master or Prototype Plan:
I [ ] The provisions of this Plan shall
N/A apply as if the other plan were a
Master or Prototype plan; or,
II [ ] The following provisions will be
effective to limit the total Annual
Additions to the Maximum Permissible
Amount, and will properly reduce any
Excess Amounts, in a manner that
precludes Employer discretion:
B. If the Participant is or ever has been a participant
in a qualified defined benefit plan maintained by the
Employer, the following provisions will be
- ---------------
15 If this option is selected, iii or iv must be selected to reallocate
Forfeitures of Employer Profit Sharing Contributions remaining after
expenses of administering the Plan have been paid.
PAGE 14
<PAGE> 15
effective to satisfy the 1.0 limitation of Internal
Revenue Code Section 415(e), in a manner that
precludes Employer discretion:
SEE ATTACHED ADDENDUM
13. INTERNAL REVENUE CODE SECTION 411(D)(6) PROTECTED BENEFITS:
N/A [ ] If selected, the Plan has Internal Revenue Code
Section 411(d)(6) Protected Benefits from a prior
plan that this Plan amends, that must be protected.
14. TOP-HEAVY PLAN PROVISIONS:
For each Plan Year in which the Plan is a Top-Heavy Plan the
following provisions will apply:
A. The percentage of a Participant's Employer
Contribution Account to be vested in him upon
termination of employment prior to retirement shall
be:
I [ ] a percentage determined in
accordance with the following
schedule:
<TABLE>
<CAPTION>
YEARS OF SERVICE PERCENTAGE
---------------- ----------
<S> <C> <C>
Less than two 0
Two but less than three 20
Three but less than four 40
Four but less than five 60
Five but less than six 80
Six or more 100;
</TABLE>
II [ ] 100% vesting after ___ (not to
exceed 3) Years of Service;
provided, however, that Years of
Service may not exceed two (2) if
the service requirement for
eligibility exceeds 1 year; or
III [X] computed in accordance with the
vesting schedule selected by the
Employer in Items B(7)(a) or
C(4)(d), as long as the benefits
under the vesting schedule in Items
B(7)(a) or C(4)(d) vest at least as
rapidly as the two options specified
in this Item B(14)(a), above.
If the vesting schedule under the Plan shifts in or
out of the schedules above for any Plan Year because
of the Plan's Top-Heavy status, such shift is an
amendment to the vesting schedule and the election in
Section 2.2 of the Basic Plan Document applies.
B. For purposes of minimum Top-Heavy allocations,
contributions and forfeitures equal to 3% (not less
than 3%) of each Non-key Employee's Compensation will
be allocated to each Participant's Contribution
Account
PAGE 15
<PAGE> 16
when the Plan is a Top-Heavy Plan, except as
otherwise provided in the Basic Plan Document. This
Item 14 will not apply to any Participant to the
extent the Participant is covered under any other
plan or plans of the Employer and the Employer
completes the following: (Insert the name of the plan
or plans which will meet the minimum allocation or
benefit requirement applicable to Top-Heavy plans.)
C. The Valuation Date as of which account balances or
accrued benefits are valued for purposes of computing
the Top-Heavy Ratio shall be the last day of each
Plan Year.
D. If the Employer maintains or has ever maintained one
or more defined benefit plans which have covered or
could cover a Participant in this Plan, complete the
following:
Present Value: For purposes of establishing Present
Value to compute the Top-Heavy Ratio, any benefit
shall be discounted only for mortality and interest
based on the following:
Interest rate 6 % Mortality table 1971 TPF&C
Mortality Table without
setback & used for both men
and women
15. INVESTMENTS:
A. Investments made pursuant to the investment direction
provisions of the Basic Plan Document shall be made
into any appropriate Investment Fund as selected by
the Employer. In addition, investment of Plan assets
is expressly authorized, as required by Revenue
Ruling 81-100, in each of the following common or
collective funds sponsored by the Trustee, or an
affiliate of the Trustee (16):
SOCIETY NATIONAL BANK EB MANAGED GUARANTEED
INCOME CONTRACT FUND, THE SOCIETY NATIONAL BANK
MULTIPLE INVESTMENT TRUST FOR EMPLOYEE BENEFIT
TRUSTS, AND OTHER COLLECTIVE TRUSTS EXEMPT FROM
TAX UNDER IRC SECTION 501 AND AS DESCRIBED IN
REV. RUL. 81-100.
B. [X] If selected, an Employer Stock Fund shall be
available as an Investment Fund pursuant to
the terms of the Basic Plan Document.
[ ] If selected, and an Employer Stock
Fund is available as an Investment
Fund, Participants will have the
right, notwithstanding any other
provisions of the Plan, to direct
that a portion of the Plan assets
held for their benefit and invested
in the Employer Stock Fund be
diversified pursuant to the
provisions of Section 10.7(F) of the
Basic Plan Document.
- ------------------
16 This Item is for use in identifying collective trust funds, which, pursuant
to Revenue Ruling 81-100 must be specifically referenced in the Plan.
Actual Investment Funds are referenced on the Investment Fund Designation
form attached to this Adoption Agreement.
PAGE 16
<PAGE> 17
C. Participants may make changes of existing account
balances and future contributions from among the
Investment Funds offered:
I [X] Once during each business day that
the Trustee and the New York Stock
Exchange are open.
II [ ] Once during each calendar month.
III [ ] Once during each quarter of the Plan
Year.
IV [ ] Once during each rolling day
period.
D. [ ] If selected, the Participant shall be
restricted in making changes of existing
account balances from any Investment Fund,
as specified in the terms or conditions of
such Investment Fund, and the Employer shall
attach an addendum specifying such
restriction.
E. The Participant will designate into which Investment
Funds all contributions to their accounts are made,
EXCEPT the following:
I [ ] Employer Profit Sharing
Contributions
II [X] Employer Mandatory Matching
Contributions
III [ ] Employer Discretionary Matching
Contributions
IV [ ] Qualified Matching Contributions
V [ ] Qualified Nonelective Contributions
F. [ ] If selected, and to the extent a selection
is made above, the Employer shall attach an
Investment Direction Addendum specifying how
the contributions so specified shall be
invested among the Investment Fund.
G. [ ] If selected, the Participant shall be
restricted in the use of the Employer Stock
Fund as an Investment Fund for designating
the investment of contributions in the
Participant's account, as follows:
I [ ] The Participant may not
direct the investment of
Plan assets held in their
account into the Employer
Stock Fund.
II [ ] The Participant may direct
_____% of the following
contributions into the
Employer Stock Fund:
(A) [ ] Employer Profit
Sharing
Contributions
(B) [ ] Employer Mandatory
Matching
Contributions
(C) [ ] Employer
Discretionary
Matching
Contributions
(D) [ ] Qualified Matching
Contributions
(E) [ ] Qualified
Nonelective
Contributions
PAGE 17
<PAGE> 18
III [ ] ______% of the following
contributions will be
invested into the Employer
Stock Fund, with the
balance invested among:
(A) [ ] the other
Investment Funds,
including the
Employer Stock
Fund
(B) [ ] the other
Investment Funds,
NOT including the
Employer Stock
Fund
16. LOANS (SELECT ONE):
A. [X] Loans may be made from the Plan in
accordance with the Basic Plan Document and
such policies and procedures as the
Committee may adopt and apply on a
consistent and nondiscriminatory basis (17).
B. [ ] No loans shall be made from the Plan.
17. TRUSTEE:
The Trustee of this Plan shall be KEY TRUST COMPANY OF OHIO (a
bank or trust company affiliated with KeyCorp within the
meaning of Internal Revenue Code Section 1504).
18. EFFECTIVE DATE ADDENDUM:
[X] If selected, the following provisions shall have
the specified effective dates (which are
different from the date specified in Item B(1)):
EMPLOYER MANDATORY MATCHING CONTRIBUTIONS AS
SPECIFIED ON PAGE 20 SECTION 4AI EFFECTIVE
1/1/99.
- ------------
17 If this option is selected, the Employer must establish appropriate
procedures for implementation of the Plan's loan program.
PAGE 18
<PAGE> 19
C. SECTION 401(K) PLAN PROVISIONS:
1. SERVICE:
An Eligible Employee shall be required to fulfill the
following eligibility service requirements in order to
participate in the Plan through a salary reduction agreement
and for purposes of receiving an allocation of Employer
Matching Contributions:
Effective 1/1/99
A. [X] The Employee must complete 60 Working Days
of Employment of Service (not more than 1
year) to be a Participant for purposes of
receiving allocations of Employer Matching
Contributions.
Effective 1/1/97
B. [X] The Employee must complete 60 Working Days
of Employment of Service (not more than 1
year) to be a Participant for purposes of
entering into a Salary Reduction Agreement
and having Employee Before Tax Contributions
or Employee After Tax Contributions
contributed to the Plan on the Employee's
behalf.
2. EMPLOYEE SALARY DEFERRALS: See Attached Addendum
A. [X] Participants shall be entitled to enter into
a Salary Reduction Agreement providing for
Before Tax Contributions to be made to the
Plan.
I The minimum Before Tax Contribution
shall be ____% of the Participant's
Compensation.
II The maximum Before Tax Contribution
shall be ____% of the Participant's
Compensation.
B. [X] Participants shall be entitled to enter into
a Salary Reduction Agreement providing for
After Tax Contributions to be made to the
Plan.
I The minimum After Tax Contribution shall
be ____% of the Participant's
Compensation.
II The maximum After Tax Contribution shall
be ____% of the Participant's
Compensation.
III [ ] If selected, notwithstanding the
above, a Participant shall not
be able to enter into a Salary
Reduction Agreement providing for
After Tax Contributions to be
made to the Plan unless the
Participant has entered into a
Salary Reduction Agreement that
provides for Before Tax
Contributions to be made to the
Plan in an amount of at least
____% of the Participant's
Compensation.
PAGE 19
<PAGE> 20
C. [ ] If selected, a Participant shall be entitled
to enter into a Salary Reduction Agreement
providing that any extraordinary item of
compensation, not yet payable (including
bonuses), be withheld from the Participant's
Compensation and contributed to the Plan as
either a Before Tax Contribution, or After
Tax Contribution (provided such
contributions are authorized above, and to
the extent that such contribution, when
aggregated with either the Participants
other Before Tax Contributions or After Tax
Contributions do not exceed the limitations
specified above, on an annual basis).
3. CONTRIBUTION CHANGES:
A. Participants may increase or decrease the amount of
contributions made to the Plan pursuant to a Salary
Reduction Agreement once each:
I [ ] Plan Year
II [ ] Semi-annual period, based on the
Plan Year
III [ ] Quarter, based on the Plan Year
IV [X] Month
V [ ] Other, as specified below (provided
that it is at least once per year):
-------
B. Claims for returns of Excess Before Tax Contributions
for the Participant's preceding taxable year must be
made in writing, and submitted to the Committee by
3/15 (specify a date between March 1 and April
15).(18)
4. EMPLOYER MATCHING CONTRIBUTIONS(19):
Effective 1/1/99
A. MANDATORY MATCHING CONTRIBUTIONS:
The Employer shall make contributions to the Plan, in
an amount as specified below:
I [X] An amount, equal to 1/4% of each
Participant's Before Tax
Contributions, however, no match
shall be made on Participant's
Before Tax Contributions in excess
of 1 % (or $______ ) of the
Participant's Compensation.
- ------------
18 The date specified is for the refund of amount deferred in excess of the
Code Section 402(g) limit (the $7,000 limit) for the Participant's taxable
year.
19 The Employer shall have the right to designate all, or any portion of
Employer Matching Contributions as Qualified Matching Contributions, which
shall then be subject to the same vesting, distribution, and withdrawal
restrictions as Before Tax Contributions.
PAGE 20
<PAGE> 21
II [ ] An amount, equal to ____% of each
Participant's After Tax
Contributions, but not to exceed
______% of the Participant's
Compensation, or $ .
III [ ] An amount, equal to _____% of each
Participant's contributions made
pursuant to a Salary Reduction
Agreement (including both Before Tax
Contributions and After Tax
Contributions), but only if the
Participant has entered into a
Salary Reduction Agreement providing
for Before Tax Contributions of at
least _____% of the Participant's
Compensation, but not to exceed
_____% of the Participant's
Compensation, or $_______.
IV [ ] An amount equal to the sum of the
following:
(A) _____% of the first ____% of
the Participant's
Compensation deferred
pursuant to a Salary
Reduction Agreement;
plus,
(B) _____% of the next ____% of the
Participant's
Compensation deferred
N/A pursuant to a Salary
Reduction Agreement;
plus,
(C) _____% of the next ____% of the
Participant's
Compensation deferred
pursuant to a Salary
Reduction Agreement, but
not to exceed ____% of
the Participant's
Compensation, or $_____.
V [ ] An amount equal to $______, for each
Participant who enters into a Salary
Reduction Agreement providing for
[ ] Before Tax Contributions, [ ]
After Tax Contributions, or [ ]
either Before Tax Contributions or
After Tax Contributions (or a
combination of both) equal to or
exceeding ____% of the Participant's
Compensation. Such contributions
shall be made and allocated:
(A) [ ] only during the first
Plan Year the Plan is
in effect, or if
a restatement, for
the first Plan Year
beginning with, or
containing the
restatement Effective
Date.
(B) [ ] each Plan Year that a
Participant has in
force a Salary
Reduction Agreement
meeting the criteria
specified above.
(C) [ ] during the first Plan
Year that the
participant
participates through a
Salary Reduction
Agreement meeting the
criteria specified
above.
B. DISCRETIONARY MATCHING CONTRIBUTIONS:
N/A
PAGE 21
<PAGE> 22
[ ] The Employer shall make contributions to the
Plan, in an amount determined by resolution
of the Board of Directors on an annual
basis. The Board resolution shall provide
for the percentage and/or amount of Before
Tax Contributions and/or After Tax
Contributions to be matched and the maximum
percentage and/or amount of Before Tax
Contributions and/or After Tax Contributions
eligible for matching.
C. ALLOCATION OF MATCHING CONTRIBUTIONS:
Employer Matching Contributions shall be allocated
pursuant to the terms of the Basic Plan Document,
notwithstanding the foregoing:
I [X] A Participant who terminates before
the end of the period for which
contributions are allocated shall
share in the allocation of Employer
Matching Contributions if
termination of employment was the
result of (select all that apply):
(A) [X] retirement
(B) [ ] disability
(C) [X] death
(D) [ ] other, as specified below:
----
II [X] Employer Matching Contributions
shall be allocated to the accounts
of Participants (select one):
(A) [X] as of each pay period for
which a contribution was
made pursuant to a Salary
Reduction Agreement.
(B) [ ] semi-monthly.
(C) [ ] as of the last day of the
month preceding the month
in which the contribution
was made.
(D) [ ] as of the last day of the
Plan quarter preceding the
quarter in which the
contribution was made.
(E) [ ] as of the last day of the
Plan year.
PAGE 22
<PAGE> 23
III [X] If selected, the Employer may make
Employer Matching Contributions
without regard to current or
accumulated Net Profits of the
Employer for the taxable year ending
with, or within the Plan Year(20).
D. The percentage of a Participant's Employer Matching
Contribution Account(21) (attributable to Employer
Matching Contributions) to be vested in him or her
upon termination of employment prior to attainment of
the Plan's Normal Retirement Date shall be(22):
COMPLETED YEARS OF SERVICE
<TABLE>
<CAPTION>
1 2 3 4 5 6 7
--------- -------- -------- ------- -------- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
I [ ] 100%
----- -----
II [ ] 100%
----- ----- -----
III [ ] 20% 40% 60% 80% 100%
----- ----- ------ ----- ---- -----
IV [ ] 20% 40% 60% 80% 100%
----- ----- ----- ----- ----- ----- -----
V [ ] 10% 20% 30% 40% 60% 80% 100%
----- ----- ----- ----- ----- ----- -----
VI [ ] 100%
----- ----- ----- ----- -----
VII [ ] 100%
----- ----- ----- ----- ----- ----- -----
VII [X] Full and immediate vesting upon entry into the Plan
</TABLE>
Notwithstanding anything to the contrary in
the Plan, the amount inserted in the blanks
above shall not exceed the limits specified
in Code Section 411(a)(2).
E. Notwithstanding the provisions of this Item C(4)(e)
of the Adoption Agreement, a Participant shall become
fully vested in his Participant's Employer Matching
Contribution Account if(23):
I [ ] the Participant's job is eliminated
without the Participant being
N/A offered a comparable position
elsewhere with the Employer.
II [ ] for such reason as is described
below:
------
- ----------------
20 Net Profits will never be required for the contribution of Before Tax
Contributions, After Tax Contributions, Qualified Nonelective Contributions
or Qualified Matching Contributions.
21 Notwithstanding anything in the Adoption Agreement to the contrary, amounts
in a Participant's account attributable to Before Tax Contributions,
Qualified Nonelective Contributions, and Qualified Matching Contributions
shall be 100% vested and nonforfeitable at all time.
22 Notwithstanding the selection made in this Item B(7)(b), a Participant
shall be fully vested in his or her Employer Contribution Accounts if the
Participant dies or becomes Disabled while in the employ of the Employer.
23 The provisions of this section will be administered by the Employer on a
consistent and nondiscriminatory basis.
PAGE 23
<PAGE> 24
F. CORRECTIVE CONTRIBUTIONS:
I [X] If selected, the Employer shall be
authorized to make Qualified
Matching Contributions, subject to
the terms of the Basic Plan
Document, in an amount determined by
resolution of the Board of Directors
on an annual basis.
II [X] If selected, the Employer shall be
authorized to make Qualified
Nonelective Contributions, subject
to the terms of the Basic Plan
Document, in an amount determined by
resolution of the Board of Directors
on an annual basis.
5. GAP EARNINGS:
[X] If selected, Gap Earnings, as defined in
Section 3.2(G)(1) of the Basic Plan Document,
will be calculated for Excess Elective Deferrals,
Excess Contributions and Excess Aggregate
Contributions, and refunded to the Participant
as provided for in Article III of the Basic Plan
Document.
6. FORFEITURES:
A. Forfeitures of amounts attributable to Employer Matching
Contributions shall be reallocated as of:
I [ ] the last day of the Plan Year in
which the Forfeiture occurred.
II [ ] the last day of the Plan Year
following the Plan Year in which the
N/A Forfeiture occurred.
III [ ] the last day of the Plan Year in
which the Participant suffering the
Forfeiture has incurred the fifth
consecutive One Year Break in
Service.
B. Forfeitures of Employer Matching Contributions shall
be reallocated as follows:
I [ ] Not applicable as Employer Matching
Contributions are always 100% vested
and nonforfeitable.
II [ ] Used first to pay the expenses of
administering the Plan, and then
N/A allocated pursuant to one of the
following two options:
III [ ] Forfeitures shall be allocated to
Participant's accounts in the same
manner as Employer Profit Sharing
Contributions, Employer Matching
Contributions, Qualified Nonelective
Contributions or Qualified Matching
Contributions, in the discretion of
the Employer, for the year in which
the Forfeiture arose.
PAGE 24
<PAGE> 25
IV [ ] Forfeitures shall be applied to
reduce the Employer Profit Sharing
Contributions, Employer Matching
Contributions, Qualified Nonelective
Contributions or Qualified Matching
Contributions, in the discretion of
the Employer, for the Plan Year
following the Plan Year in which the
Forfeiture arose.
C. Forfeitures of Excess Aggregate Contributions shall
be:
I [ ] Applied to reduce Employer
contributions for the Plan Year in
which the excess arose, but
allocated as below, to the extent
the excess exceeds Employer
contributions for the Plan Year, or
N/A the Employer has already contributed
for such Plan Year.
II [ ] Allocated after all other
forfeitures under the Plan:
(A) [ ] to the Matching
Contribution account of
each Non-highly
Compensated Participant
who made Before Tax
Contributions or After Tax
Contributions in the ratio
which each such
Participant's Compensation
for the Plan Year bears to
the total Compensation of
all such Participants for
the Plan Year; or,
(B) [ ] to the Matching
Contribution account of
each Non-highly
Compensated Eligible
Participant in the ratio
which each Eligible
Participant's Compensation
for the Plan Year bears to
the total Compensation of
all Eligible Participants
for the Plan Year.
7. IN-SERVICE DISTRIBUTIONS (SELECT AS MAY BE APPROPRIATE):
A. [ ] There shall be no in-service distribution of
Participant account balances derived from
Before Tax Contributions (including
Qualified Nonelective Contributions and
Qualified Matching Contributions treated as
Before Tax Contributions under the terms of
the Basic Plan Document), or Employer
Matching Contributions.
B. [X] Participants may request an in-service
distribution of their account balance
attributable to Employer Matching
Contributions, for the following reasons:
I [X] For purposes of satisfying
a financial hardship, as
determined in accordance
with the uniform
nondiscriminatory policy of
the Committee;
II [X] Attainment of age 59 1/2 by
the Participant; or
PAGE 25
<PAGE> 26
III [X] Attainment of the Plan's
Normal Retirement Date by
the Participant.
C. [X] Participants may request an in-service
distribution of their account balance
attributable to Employee Before Tax
Contributions, for the following reasons:
I [X] For purposes of satisfying
a financial hardship, as
determined by the facts and
circumstances of an
Employee's situation, in
accordance with the
provisions of Section 3.9
of the Basic Plan Document;
II [ ] For purposes of satisfying
a financial hardship, using
the "safe harbor"
provisions of Section 3.9
of the Basic Plan Document.
III [X] Attainment of age 59 1/2 by
the Participant; or
IV [X] Attainment of the Plan's
Normal Retirement Date by
the Participant.
PAGE 26
<PAGE> 27
NOTICE: The adopting Employer may not rely on an opinion letter issued by the
National Office of the Internal Revenue Service as evidence that the Plan is
qualified under the provisions of ss.401 of the Internal Revenue Code. In order
to obtain reliance with respect to the Plan's qualification, the Employer must
apply to the Key District Office of the Internal Revenue Service for a
determination letter.
This Adoption Agreement may only be used in conjunction with Basic Plan Document
# 05.
This Plan document may only be used under the express authority of KeyCorp, its
subsidiaries and affiliates, and is not effective as completed until executed by
a duly authorized officer of KeyCorp, one of its subsidiaries or affiliates, and
approved by KeyCorp's counsel.
KeyCorp, as sponsor, may amend or discontinue this prototype plan document upon
proper notification to all adopting Employers pursuant to Revenue Ruling 89-13.
Failure to properly fill out an Adoption Agreement may result in
disqualification of the Plan, and adverse tax consequences to the Employer and
Plan Participants.
This Plan is sponsored by:
KeyCorp, on behalf of its operating subsidiaries,
banking and trust company affiliates
127 Public Square
Cleveland, Ohio 44114
(800) 982-3811
PAGE 27
<PAGE> 28
IN WITNESS WHEREOF, the Employer and the Trustee, by their respective
duly authorized officers, have caused this Adoption Agreement to be executed on
this ______day of _________ , 19__ .
EMPLOYER:
--------
By:
----------------------------
Title:
-------------------------
TRUSTEE:
By:
----------------------------
Title:
-------------------------
and
By:
----------------------------
Title:
-------------------------
APPROVED ON BEHALF OF TRUSTEE:
Initials:____________ Date:____________
PAGE 28
<PAGE> 29
LIBBEY INC.
ADDENDUM
12.B. SECTION 415 LIMITATIONS.
(A) LIMITS IMPOSED. In addition to any other limits set forth in
the Plan, and notwithstanding any other provision of the Plan,
in no event shall the annual amount payable with respect to a
Participant under a Retirement Benefit Exceed the maximum
annual amount permitted by section 415 of the Code for a
benefit payable in the form and commencing at the age provided
for under the Retirement Benefit. The determination in the
preceding sentence shall be made after taking into account the
annual additions with respect to the Participant under all
other defined contribution plans required to be aggregated
with this Plan under section 415(f)(1)(B) of the Code, and
after taking into account the benefits payable with respect to
the Participant under all defined benefit plans required to be
aggregated under section 415 (f)(1)(A) of the Code. Where an
Employee is a Participant under a defined benefit plan and a
defined contribution plan maintained by the Employer, the sum
of the defined benefit fraction and the defined contribution
fraction for any Plan Year may not exceed 1.0 as computed
under the terms and conditions as set forth under section
415(e) of the Code.
(B) ADJUSTMENTS WHERE LIMITS OTHERWISE EXCEEDED. If the limits
imposed by Section 2.07(a) hereof (Limits Imposed) with
respect to a Participant would otherwise be exceeded, the
benefits and the annual additions with respect to the
Participant under the plans described in Section 2.07(a)
hereof (Limits Imposed) shall be reduced until those limits
are satisfied. For purposes of applying the preceding
sentence, the benefits payable with respect to the Participant
under this Plan shall not be reduced until the annual
additions with respect to such Participant under all other
defined contribution plans have first been reduced.
Furthermore, the benefits payable with respect to the
Participant under this Plan shall not be reduced before the
benefits payable with respect to such Participant are reduced
under any defined benefit plan.
(C) CERTAIN RULES FOR APPLYING LIMITS. The limits imposed by
Section 2.07(a) hereof (Limits Imposed) shall be applied on
the basis of:
(1) an interest rate assumption of 5% per annum,
compounded annually,
<PAGE> 30
(2) the definition of compensation in section 1.415-2
(d)(11)(ii) of the Treasury Regulations,
(3) Any cost-of-living increase that the Plan is
permitted to take into account under section 415(d)
of the Code,
(4) any applicable transition rule prescribed in section
1106(I) of the Tax Reform Act of 1986,
(5) Any other applicable transition rule that preserves a
Participant's Accrued Benefit under the Plan as of
the effective date on an amendment to section 415 of
the Code.
C. 2. EMPLOYEE SALARY DEFERRALS:
Effective 1/1/97
<TABLE>
<CAPTION>
Maximum Contribution
Pre-Tax After-Tax TOTAL
------- --------- -----
<S> <C> <C>
0-9% 3% 0-12%
10% 2% 12%
11% 1% 12%
12% 0% 12%
</TABLE>
<PAGE> 1
Exhibit 5
[LATHAM & WATKINS LETTERHEAD]
January 9, 1997
Libbey Inc.
300 Madison Avenue
Toledo, Ohio 43699-0060
Re: Registration Statement on Form S-8 for
Libbey Inc. Long-Term Savings Plan & Trust
------------------------------------------
Ladies and Gentlemen:
We have acted as your special counsel in connection with the
above-captioned Registration Statement (the "Registration Statement") with
respect to the offer and sale of up to 200,000 shares of Common Stock of Libbey
Inc., par value $.01 per share (the "Stock"), pursuant to the Libbey Inc.
Long-Term Savings Plan & Trust (the "Plan").
We are familiar with the proceedings taken and proposed to be
taken by you in connection with the authorization, issuance and sale of the
Stock, and for the purposes of this opinion, have assumed such proceedings will
be timely completed in the manner presently proposed. In addition, we have made
such legal and factual examinations and inquiries, including an examination of
originals or copies certified or otherwise identified to our satisfaction, of
such documents, corporate records and instruments as we have deemed necessary or
appropriate for purposes of this opinion.
In our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, and
the conformity to authentic original documents of all documents submitted to us
as copies.
We are opining herein as to the effect on the subject
transaction only of the federal laws of the United States, the internal laws of
the State of Illinois and the General Corporation Law of the State of Delaware,
and we express no opinion with respect to the applicability thereto, or the
effect thereon, of any other laws.
Based on the foregoing, it is our opinion that the Stock, when
and if issued by the Company and sold in accordance with the terms of the Plan,
will be duly authorized, validly issued, fully paid and
<PAGE> 2
Libbey Inc.
January 8, 1997
Page 2
nonassessable, except as may be limited by the effect of bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to or affecting the rights or remedies of creditors; and the effect of
general principles of equity including without limitation concepts of
materiality, reasonableness, good faith and fair dealing and the possible
unavailability of specific performance or injunctive relief regardless of
whether considered in a proceeding in equity or at law.
We consent to your filing this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Latham & Watkins
<PAGE> 1
Exhibit 23(a)
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration Statement
(Form S-8) pertaining to the Libbey Inc. Long-Term Savings Plan and Trust of our
report dated February 2, 1996, with respect to the consolidated financial
statements and schedule of Libbey Inc. included in its Annual Report (Form 10-K)
appearing in and for the year ended December 31, 1995, filed with the Securities
and Exchange Commission.
/s/ ERNST & YOUNG LLP
Toledo, Ohio
January 8, 1997
