<PAGE> 1
As Filed With the Securities and Exchange Commission
on October 2, 1996
Registration No. 333-
................................................................................
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
................................................................................
REGAL CINEMAS, INC.
(Exact name of registrant as specified in its charter)
TENNESSEE 62-1412720
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7132 COMMERCIAL PARK DRIVE
KNOXVILLE, TENNESSEE 37918
(Address of Principal Executive Offices) (Zip Code)
401(k) PROFIT SHARING PLAN
(Full title of the plan)
HERBERT S. SANGER, JR.
1801 PLAZA TOWER
KNOXVILLE, TENNESSEE 37929
(Name and address of agent for service)
(423) 525-4600
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of securities to Proposed maximum Proposed maximum
be registered Amount to be registered offering price per share aggregate offering price Amount of registration fee
====================================================================================================================================
<S> <C> <C> <C> <C>
Common Stock (1) 112,500 shares $23.69(2) $2,665,125 $807.61
====================================================================================================================================
</TABLE>
(1) Represents shares to be purchased with contributions to the Company's
401(k) Profit Sharing Plan.
(2) Estimated solely for the purpose of determining the amount of the
registration fee pursuant to Rule 457(h) under the Securities Act of
1933, as amended.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents previously filed by Regal Cinemas, Inc., a
Tennessee corporation (the "Registrant" or the "Company"), with the Securities
and Exchange Commission (the "Commission") pursuant to the Securities Exchange
Act of 1934 (the "Exchange Act") are hereby incorporated by reference:
1. The Registrant's Annual Report on Form 10-K for the fiscal
year ending December 28, 1995, as amended by Form 10-K/A as
filed with the Commission on April 29, 1996;
2. The Registrant's Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 28, 1996, and June 27, 1996;
3. The Registrant's Current Reports on Form 8-K filed with the
Commission on May 1, 1996, May 9, 1996, June 11, 1996, and
July 2, 1996; and
4. The description of the Registrant's Common Stock, $.01 par
value per share (the "Common Stock"), contained in the
Registration Statement on Form 8-A dated May 12, 1994, as
amended by Form 8-A/A dated June 21, 1994, and Form 8-A/A
dated September 12, 1994, including all amendments and reports
filed for the purpose of updating such description prior to
the termination of the offering of the Common Stock offered
hereby.
All documents and reports subsequently filed by the Registrant pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date hereof
and prior to the filing of a post-effective amendment to this Registration
Statement which indicates that all shares of Common Stock offered hereby have
been sold or which deregisters all shares of Common Stock then remaining unsold
shall be deemed to be incorporated by reference herein and to be a part hereof
from the date of filing of such documents. Any statements contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or replaced for purposes hereof to the extent that a
statement contained herein (or in any other subsequently filed document which
also is incorporated or deemed to be incorporated by reference herein) modifies
or replaces such statement. Any statement so modified or replaced shall not be
deemed, except as so modified or replaced, to constitute a part hereof.
Item 4. Description of Securities.
Inapplicable.
Item 5. Interests of Named Experts and Counsel.
Inapplicable.
Item 6. Indemnification of Directors and Officers.
The Tennessee Business Corporation Act ("TBCA") provides that a
corporation may indemnify any of its directors and officers against liability
incurred in connection with a proceeding if (i) the director or officer acted in
good faith, (ii) in the case of conduct in his or her official capacity with the
corporation, the director or officer reasonably believed such conduct was in the
corporation's best interests, (iii) in all other cases, the director of officer
reasonably believed that his or her conduct was not opposed to the best interest
of the corporation, and (iv) in connection with any criminal proceeding, the
director or officer had no reasonable cause to believe that his or her conduct
was unlawful. In actions brought by or in the right of the corporation, however,
the TBCA provides that no indemnification may be made if the director or officer
II-2
<PAGE> 3
was adjudged to be liable to the corporation. In cases where the director or
officer is wholly successful, on the merits or otherwise, in the defense of any
proceeding instigated because of his or her status as an officer or director of
a corporation, the TBCA mandates that the corporation indemnify the director or
officer against reasonable expenses incurred in the proceeding. The TBCA also
provides that in connection with any proceeding charging improper personal
benefit to an officer or director, no indemnification may be made if such
officer or director is adjudged liable on the basis that personal benefit was
improperly received. Notwithstanding the foregoing, the TBCA provides that a
court of competent jurisdiction, upon application, may order that an officer or
director be indemnified for reasonable expenses if, in consideration of all
relevant circumstances, the court determines that such individual is fairly and
reasonably entitled to indemnification, whether or not the standard of conduct
set forth above was met.
Article 8 of the Restated Charter (the "Charter") of the Company and
its Amended and Restated Bylaws provide that the Company shall indemnify against
liability, and advance expenses to, any present or former director or officer of
the Company to the fullest extent allowed by the TBCA, as amended from time to
time, or any subsequent law, rule or regulation adopted in lieu thereof.
Additionally, the Charter provides that no director of the Company shall be
personally liable to the Company or any of its shareholders for monetary damages
for breach of any fiduciary duty except for liability arising from (i) any
breach of a director's duty of loyalty to the Company or its shareholders, (ii)
acts or omissions not in good faith or which involved intentional misconduct or
a knowing violation of law, (iii) any unlawful distributions or (iv) receiving
any improper personal benefit. The Company has entered into indemnification
agreements with each of the Company's directors and executive officers.
Directors' and officers' liability insurance has also been obtained by
the Company, the effect of which is to indemnify the directors and officers of
the Company against certain damages and expenses because of certain claims made
against them caused by their negligent act, error or omission.
Item 7. Exemption From Registration Claimed.
Inapplicable.
Item 8. Exhibits.
See Exhibit Index following Signature pages.
Item 9. Undertakings.
A. The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act;
(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
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 15(d) of the Exchange Act
that are incorporated by reference in the Registration Statement.
II-3
<PAGE> 4
(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 the 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 that is incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at the 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 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.
II-4
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Knoxville, State of Tennessee, on this 30th day of
September, 1996.
REGAL CINEMAS, INC.
By: /s/ Michael L. Campbell
------------------------------------
Michael L. Campbell
Chairman of the Board, President and
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, each person whose signature appears
below hereby constitutes and appoints Michael L. Campbell and Lewis Frazer III,
and each of them, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place, and
stead, in any and all capacities, to sign any and all amendments to this
Registration Statement, and to file the same, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Michael L. Campbell Chairman of the Board, September 30, 1996
- ----------------------- President, Chief Executive
Michael L. Campbell Officer and Director (Principal
Executive Officer)
/s/ Lewis Frazer III Chief Financial Officer and September 30, 1996
- ----------------------- Treasurer (Principal Financial
Lewis Frazer III and Accounting Officer)
/s/ R. Neal Melton Vice President Construction- September 30, 1996
- ----------------------- Equipment, Secretary and
R. Neal Melton Director
/s/ Philip D. Borack Director September 30, 1996
- -----------------------
Philip D. Borack
/s/ Michael E. Gellert Director September 30, 1996
- -----------------------
Michael E. Gellert
/s/ J. David Grissom Director September 30, 1996
- -----------------------
J. David Grissom
</TABLE>
II-5
<PAGE> 6
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ William H. Lomicka Director September 30, 1996
- --------------------------
William H. Lomicka
/s/ Herbert S. Sanger, Jr. Director September 30, 1996
- --------------------------
Herbert S. Sanger, Jr.
/s/ Jack Tyrrell Director September 30, 1996
- --------------------------
Jack Tyrrell
</TABLE>
II-6
<PAGE> 7
EXHIBIT INDEX
Exhibit Number Description
-------------- ----------------------------------------------------------
4.1 401(k) Profit Sharing Plan
4.2 Restated Charter of the Company (incorporated by reference
to Exhibit 3.1 of the Company's Registration Statement on
Form S-1, Registration No. 33-62868)
4.3 Restated Bylaws of the Company (incorporated by reference
to Exhibit 3.2 of the Company's Registration Statement on
Form S-1, Registration No. 33-62868)
5.1 Opinion of Bass, Berry & Sims PLC
5.2 The Registrant has submitted the plan to the Internal
Revenue Service ("IRS") and has made and hereby undertakes
that it will make all changes required by the IRS in order
to qualify the plan.
23.1 Consents of Coopers & Lybrand, L.L.P.
23.2 Consent of Ernst & Young LLP
23.3 Consent of Deloitte & Touche LLP
23.4 Consent of Bass, Berry & Sims PLC (included in Exhibit 5)
24 Power of Attorney (included on pages II-5 and II-6)
II-7
<PAGE> 1
Exhibit 4.1
Your plan is an important legal document. This sample plan has been prepared
based on our understanding of the desired provisions. It may not fit your
situation. You should consult with your lawyer on the plan's legal and tax
implications. Neither Principal Mutual Life Insurance Company nor its agents can
be responsible for the legal or tax aspects of the plan nor its appropriateness
for your situation. If you wish to change the provisions of this sample plan,
you may ask us to prepare new sample wording for you and your lawyer to review.
<PAGE> 2
REGAL CINEMAS INC.
401(k) PROFIT SHARING PLAN
Defined Contribution Plan 7.7
Restated January 1, 1996
<PAGE> 3
TABLE OF CONTENTS
INTRODUCTION ............................................................. 4
ARTICLE I
FORMAT AND DEFINITIONS ............................................. 5
SECTION 1.01--FORMAT ............................................... 5
SECTION 1.02--DEFINITIONS .......................................... 5
ARTICLE II
PARTICIPATION ...................................................... 23
SECTION 2.01--ACTIVE PARTICIPANT ................................... 23
SECTION 2.02--INACTIVE PARTICIPANT ................................. 23
SECTION 2.03--CESSATION OF PARTICIPATION ........................... 24
SECTION 2.04--ADOPTING EMPLOYERS - SINGLE PLAN ..................... 24
ARTICLE III
CONTRIBUTIONS ...................................................... 26
SECTION 3.01--EMPLOYER CONTRIBUTIONS ............................... 26
SECTION 3.01A--VOLUNTARY CONTRIBUTIONS BY PARTICIPANTS ............. 27
SECTION 3.01B--ROLLOVER CONTRIBUTIONS .............................. 27
SECTION 3.02--FORFEITURES .......................................... 28
SECTION 3.03--ALLOCATION ........................................... 29
SECTION 3.04--CONTRIBUTION LIMITATION .............................. 31
SECTION 3.05--EXCESS AMOUNTS ....................................... 38
ARTICLE IV
INVESTMENT OF CONTRIBUTIONS ........................................ 48
SECTION 4.01--INVESTMENT OF CONTRIBUTIONS .......................... 48
SECTION 4.01A--INVESTMENT IN QUALIFYING EMPLOYER SECURITIES ........ 49
ARTICLE V
BENEFITS ........................................................... 52
SECTION 5.01 --RETIREMENT BENEFITS ................................. 52
SECTION 5.02--DEATH BENEFITS ....................................... 52
SECTION 5.03--VESTED BENEFITS ...................................... 52
SECTION 5.04--WHEN BENEFITS START .................................. 52
SECTION 5.05--WITHDRAWAL PRIVILEGES ................................ 53
1
<PAGE> 4
ARTICLE VI
DISTRIBUTION OF BENEFITS ........................................... 56
SECTION 6.01 --AUTOMATIC FORMS OF DISTRIBUTION ..................... 56
SECTION 6.02--OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION
REQUIREMENTS ................................................. 56
SECTION 6.03--ELECTION PROCEDURES .................................. 63
SECTION 6.04--NOTICE REQUIREMENTS .................................. 66
SECTION 6.05--DISTRIBUTIONS UNDER QUALIFIED DOMESTIC RELATIONS
ORDERS ....................................................... 67
ARTICLE VII
TERMINATION OF PLAN ................................................ 69
ARTICLE VIII
ADMINISTRATION OF PLAN ............................................. 70
SECTION 8.01 --ADMINISTRATION ...................................... 70
SECTION 8.02--RECORDS .............................................. 71
SECTION 8.03--INFORMATION AVAILABLE ................................ 71
SECTION 8.04--CLAIM AND APPEAL PROCEDURES .......................... 72
SECTION 8.05--UNCLAIMED VESTED ACCOUNT PROCEDURE ................... 72
SECTION 8.06--DELEGATION OF AUTHORITY .............................. 73
ARTICLE IX
GENERAL PROVISIONS ................................................. 74
SECTION 9.01 --AMENDMENTS .......................................... 74
SECTION 9.02--DIRECT ROLLOVERS ..................................... 75
SECTION 9.03--MERGERS AND DIRECT TRANSFERS ......................... 75
SECTION 9.04--PROVISIONS RELATING TO THE INSURER AND OTHER
PARTIES ...................................................... 76
SECTION 9.05--EMPLOYMENT STATUS .................................... 76
SECTION 9.06--RIGHTS TO PLAN ASSETS ................................ 76
SECTION 9.07--BENEFICIARY .......................................... 77
SECTION 9.08--NONALIENATION OF BENEFITS ............................ 77
SECTION 9.09--CONSTRUCTION ......................................... 78
SECTION 9.10--LEGAL ACTIONS ........................................ 78
SECTION 9.11 --SMALL AMOUNTS ....................................... 78
SECTION 9.12--WORD USAGE ........................................... 78
SECTION 9.13--TRANSFERS BETWEEN PLANS .............................. 78
2
<PAGE> 5
ARTICLE X
TOP-HEAVY PLAN REQUIREMENTS ........................................ 80
SECTION 10.01--APPLICATION ......................................... 80
SECTION 10.02--DEFINITIONS ......................................... 80
SECTION 10.03--MODIFICATION OF VESTING REQUIREMENTS ................ 84
SECTION 10.04--MODIFICATION OF CONTRIBUTIONS ....................... 85
SECTION 10.05--MODIFICATION OF CONTRIBUTION LIMITATION ............. 87
3
<PAGE> 6
INTRODUCTION
The Primary Employer previously established a 401(k) profit sharing plan
on January 1, 1993.
The Primary Employer is of the opinion that the plan should be changed. It
believes that the best means to accomplish these changes is to completely
restate the plan's terms, provisions and conditions. The restatement, effective
January 1, 1996, is set forth in this document and is substituted in lieu of the
prior document.
The restated plan continues to be for the exclusive benefit of the
employees of the Employer. All persons covered under the plan on December 31,
1995, shall continue to be covered under the restated plan with no loss of
benefits.
It is intended that the plan, as restated, shall qualify as a profit
sharing plan under the Internal Revenue Code of 1986, including any later
amendments to the Code.
4
<PAGE> 7
ARTICLE I
FORMAT AND DEFINITIONS
SECTION 1.01--FORMAT.
Words and phrases defined in the DEFINITIONS SECTION of Article I shall
have that defined meaning when used in this Plan, unless the context clearly
indicates otherwise.
These words and phrases have an initial capital letter to aid in
identifying them as defined terms.
SECTION 1.02--DEFINITIONS.
ACCOUNT means, for a Participant, his share of the Investment Fund. Separate
accounting records are kept for those parts of his Account that result from:
a) Voluntary Contributions.
b) Elective Deferral Contributions.
c) Matching Contributions.
d) Other Employer Contributions.
e) Rollover Contributions.
If the Participant's Vesting Percentage is less than 100% as to any of the
Employer Contributions, a separate accounting record will be kept for any part
of his Account resulting from such Employer Contributions and, if there has been
a prior Forfeiture Date, from such Contributions made before a prior Forfeiture
Date.
A Participant's Account shall be reduced by any distribution of his Vested
Account and by any Forfeitures. A Participant's Account will participate in the
earnings credited, expenses charged and any appreciation or depreciation of the
Investment Fund. His Account is subject to any minimum guarantees applicable
under the Group Contract or other investment arrangement.
ACCRUAL COMPUTATION PERIOD means a 12-consecutive month period ending on the
last day of each Plan Year, including corresponding 12-consecutive month periods
before January 1, 1993.
ACTIVE PARTICIPANT means an Eligible Employee who is actively participating in
the Plan according to the provisions in the ACTIVE PARTICIPANT SECTION of
Article II.
5
<PAGE> 8
ADOPTING EMPLOYER means an employer controlled by or affiliated with the
Employer and listed in the ADOPTING EMPLOYERS-SINGLE PLAN SECTION of Article II.
AFFILIATED SERVICE GROUP means any group of corporations, partnerships or other
organizations of which the Employer is a part and which is affiliated within the
meaning of Code Section 414(m) and regulations thereunder. Such a group includes
at least two organizations one of which is either a service organization (that
is, an organization the principal business of which is performing services), or
an organization the principal business of which is performing management
functions on a regular and continuing basis. Such service is of a type
historically performed by employees. In the case of a management organization,
the Affiliated Service Group shall include organizations related, within the
meaning of Code Section 144(a)(3), to either the management organization or the
organization for which it performs management functions. The term Controlled
Group, as it is used in this Plan, shall include the term Affiliated Service
Group.
ALTERNATE PAYEE means any spouse, former spouse, child or other dependent of a
Participant who is recognized by a qualified domestic relations order as having
a right to receive all, or a portion of the benefits payable under the Plan with
respect to such Participant.
ANNUAL COMPENSATION means, on any given date, the Employee's Compensation for
the latest Compensation Year ending on or before the given date.
ANNUITY STARTING DATE means, for a Participant, the first day of the first
period for which an amount is payable as an annuity or any other form.
BENEFICIARY means the person or persons named by a Participant to receive any
benefits under this Plan upon the Participant's death. See the BENEFICIARY
SECTION of Article IX.
CLAIMANT means any person who has made a claim for benefits under this Plan. See
the CLAIM AND APPEAL PROCEDURES SECTION of Article VIII.
CODE means the Internal Revenue Code of 1986, as amended.
COMPENSATION means, except as modified in this definition, the total earnings
paid or made available to an Employee by the Employer or a Predecessor Employer
during any specified period. If this Plan is not a continuation of a plan of
that Predecessor Employer, earnings from such Predecessor Employer shall be
counted only if service is continued with the Employer without interruption.
Earnings from a Predecessor Employer include earnings while a partner or
proprietor of such Predecessor Employer.
"Earnings" in this definition means Compensation as defined in the CONTRIBUTION
LIMITATION SECTION of Article III.
6
<PAGE> 9
Compensation shall also include elective contributions. Elective contributions
are amounts excludable from the Employee's gross income under Code Sections
125,402(e)(3), 402(h) or 403(b), and contributed by the Employer, at the
Employee's election, to a Code Section 401(k) arrangement, a simplified employee
pension, cafeteria plan or tax-sheltered annuity. Elective contributions also
include Compensation deferred under a Code Section 457 plan maintained by the
Employer and Employee contributions "picked up" by a governmental entity and,
pursuant to Code Section 414(h)(2), treated as Employer contributions.
For purposes of the EXCESS AMOUNTS SECTION of Article III, the Employer may
elect to use an alternative nondiscriminatory definition of Compensation in
accordance with the regulations under Code Section 414(s).
For Plan Years beginning after December 31, 1988, and before January 1, 1994,
the annual Compensation of each Participant taken into account for determining
all benefits provided under the Plan for any year shall not exceed $200,000. For
Plan Years beginning on or after January 1, 1994, the annual Compensation of
each Participant taken into account for determining all benefits provided under
the Plan for any year shall not exceed $150,000.
The $200,000 limit shall be adjusted by the Secretary at the same time and in
the same manner as under Code Section 415(d). The $150,000 limit shall be
adjusted by the Commissioner for increases in the cost of living in accordance
with Code Section 401(a)(17)(B). The cost of living adjustment in effect for a
calendar year applies to any period, not exceeding 12 months, over which pay is
determined (determination period) beginning in such calendar year. If a
determination period consists of fewer than 12 months, the annual compensation
limit will be multiplied by a fraction, the numerator of which is the number of
months in the determination period, and the denominator of which is 12.
In determining the Compensation of a Participant for purposes of the annual
compensation limit, the rules of Code Section 414(q)(6) shall apply, except that
in applying such rules, the term "family" shall include only the spouse of the
Participant and any lineal descendants of the Participant who have not attained
age 19 before the close of the year. If, as a result of the application of such
rules the adjusted annual compensation limit is exceeded, then (except for
purposes of determining the portion of Compensation up to the integration level
if this Plan provides for permitted disparity) the limitation shall be prorated
among the affected individuals in proportion to each such individual's
Compensation as determined under this definition prior to the application of
this limitation.
If Compensation for any prior determination period is taken into account in
determining a Participant's benefits accruing in the current Plan Year, the
Compensation for that prior determination period is subject to the annual
compensation limit in effect for that prior determination period. For this
purpose, for determination periods beginning before the first day of the first
Plan Year beginning on or after January 1, 1989, which are used to determine
benefits in Plan Years beginning after December 31, 1988 and before January 1,
1994, the annual compensation limit is $200,000. For this purpose, for
determination periods beginning before the first day of the first Plan
7
<PAGE> 10
Year beginning on or after January 1, 1994, which are used to determine benefits
in Plan Years beginning on or after January 1, 1994, the annual compensation
limit is $150,000.
Compensation means, for an Employee who is a Leased Employee, the Employee's
Compensation for the services he performs for the Employer, determined in the
same manner as the Compensation of Employees who are not Leased Employees,
regardless of whether such Compensation would be received directly from the
Employer or from the leasing organization.
COMPENSATION YEAR means each one-year period ending on the last day of the Plan
Year, including corresponding periods before January 1, 1993.
CONTINGENT ANNUITANT means an individual named by the Participant to receive a
lifetime benefit after the Participant's death in accordance with a survivorship
life annuity.
CONTRIBUTIONS means
Elective Deferral Contributions
Matching Contributions
Discretionary Contributions
Voluntary Contributions
Rollover Contributions
as set out in Article III, unless the context clearly indicates otherwise.
CONTROLLED GROUP means any group of corporations, trades or businesses of which
the Employer is a part that are under common control. A Controlled Group
includes any group of corporations, trades or businesses, whether or not
incorporated, which is either a parent-subsidiary group, a brother-sister group,
or a combined group within the meaning of Code Section 414(b), Code Section
414(c) and regulations thereunder and, for purposes of determining contribution
limitations under the CONTRIBUTION LIMITATION SECTION of Article III, as
modified by Code Section 415(h) and, for the purpose of identifying Leased
Employees, as modified by Code Section 144(a)(3). The term Controlled Group, as
it is used in this Plan, shall include the term Affiliated Service Group and any
other employer required to be aggregated with the Employer under Code Section
414(o) and the regulations thereunder.
DIRECT ROLLOVER means a payment by the Plan to the Eligible Retirement Plan
specified by the Distributee.
DISCRETIONARY CONTRIBUTIONS means discretionary contributions made by the
Employer to fund this Plan. See the EMPLOYER CONTRIBUTIONS SECTION of Article
III.
DISTRIBUTEE means an Employee or former Employee. In addition, the Employee's or
former Employee's surviving spouse and the Employee's or former Employee's
spouse or former spouse who
8
<PAGE> 11
is the alternate payee under a qualified domestic relations order, as defined in
Code Section 414(p), are Distributees with regard to the interest of the spouse
or former spouse.
EARLY RETIREMENT DATE means the first day of any month before a Participant's
Normal Retirement Date which the Participant selects for the start of his
retirement benefit. This day shall be on or after the date on which he ceases to
be an Employee and the date he meets the following requirement(s):
a) He has attained age 55.
b) He has completed 10 years of Vesting Service.
ELECTIVE DEFERRAL CONTRIBUTIONS means Contributions made by the Employer to fund
this Plan in accordance with a qualified cash or deferred arrangement as
described in Code Section 401(k). See the EMPLOYER CONTRIBUTIONS SECTION of
Article III.
ELIGIBILITY BREAK IN SERVICE means an Eligibility Computation Period in which an
Employee is credited with 500 or fewer Hours-of-Service. An Employee incurs an
Eligibility Break in Service on the last day of an Eligibility Computation
Period in which he has an Eligibility Break in Service.
ELIGIBILITY COMPUTATION PERIOD means a 12-consecutive month period. The first
Eligibility Computation Period begins on an Employee's Employment Commencement
Date. Later Eligibility Computation Periods begin on anniversaries of his
Employment Commencement Date.
To determine an Eligibility Computation Period after an Eligibility Break in
Service, the Plan shall use the 12-consecutive month period beginning on an
Employee's Reemployment Commencement Date as if his Reemployment Commencement
Date were his Employment Commencement Date.
ELIGIBILITY SERVICE means one year of service for each Eligibility Computation
Period that has ended and in which an Employee is credited with at least 1,000
Hours-of-Service.
However, Eligibility Service is modified as follows:
Predecessor Employer service included:
An Employee's service with a Predecessor Employer shall be included as
service with the Employer. If this Plan is not a continuation of a plan of
that Predecessor Employer, an Employee's service with that Predecessor
Employer shall be counted only if service continued with the Employer
without interruption. This service includes service performed while a
proprietor or partner.
9
<PAGE> 12
Period of Military Duty included:
A Period of Military Duty shall be included as service with the Employer
to the extent it has not already been credited. For purposes of crediting
Hours-of-Service during the Period of Military Duty, an Hour-of-Service
shall be credited (without regard to the 501 Hour-of- Service limitation)
for each hour an Employee would normally have been scheduled to work for
the Employer during such period.
Controlled Group service included:
An Employee's service with a member firm of a Controlled Group while both
that firm and the Employer were members of the Controlled Group shall be
included as service with the Employer.
ELIGIBLE EMPLOYEE means any Employee of the Employer who meets the following
requirements. He is not employed as a non-resident alien who has no source of
U.S. income and he is not employed as an independent contractor. His employment
classification with the Employer is the following:
Nonbargaining class (not represented for collective bargaining purposes by
a bargaining unit which has bargained in good faith with the Employer on
the subject of retirement benefits).
ELIGIBLE RETIREMENT PLAN means an individual retirement account described in
Code Section 4O8(a), an individual retirement annuity described in Code Section
408(b), an annuity plan described in Code Section 403(a) or a qualified trust
described in Code Section 401(a), that accepts the Distributee's Eligible
Rollover Distribution.
However, in the case of an Eligible Rollover Distribution to the surviving
spouse, an Eligible Retirement Plan is an individual retirement account or
individual retirement annuity.
ELIGIBLE ROLLOVER DISTRIBUTION means any distribution of all or any portion of
the balance to the credit of the Distributee, except that an Eligible Rollover
Distribution does not include:
a) Any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the
life (or life expectancy) of the Distributee or the joint lives (or
joint life expectancies) of the Distributee and the Distributee's
designated Beneficiary, or for a specified period of ten years or
more.
b) Any distribution to the extent such distribution is required under
Code Section 401 (a)(9).
10
<PAGE> 13
c) The portion of any distribution that is not includible in gross
income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities).
EMPLOYEE means an individual who is employed by the Employer or any other
employer required to be aggregated with the Employer under Code Sections 414(b),
(c), (m) or (o). A Controlled Group member is required to be aggregated with the
Employer.
The term Employee shall also include any Leased Employee deemed to be an
employee of any employer described in the preceding paragraph as provided in
Code Sections 414(n) or 414(o).
EMPLOYER means the Primary Employer. This will also include any successor
corporation or firm of the Employer which shall, by written agreement, assume
the obligations of this Plan or any predecessor corporation or firm of the
Employer (absorbed by the Employer, or of which the Employer was once a part)
which became a predecessor because of a change of name, merger, purchase of
stock or purchase of assets and which maintained this Plan.
EMPLOYER CONTRIBUTIONS means
Elective Deferral Contributions
Matching Contributions
Discretionary Contributions
as set out in Article III, unless the context clearly indicates otherwise.
EMPLOYMENT COMMENCEMENT DATE means the date an Employee first performs an Hour-
of-Service.
ENTRY DATE means the date an Employee first enters the Plan as an Active
Participant. See the ACTIVE PARTICIPANT SECTION of Article II.
FAMILY MEMBER means an individual described in Code Section 414(q)(6)(B).
FISCAL YEAR means the Primary Employer's taxable year. The last day of the
Fiscal Year is December 31.
FORFEITURE means the part, if any, of a Participant's Account that is forfeited.
See the FORFEITURES SECTION of Article III.
FORFEITURE DATE means, as to a Participant, the date the Participant incurs five
consecutive Vesting Breaks in Service. A Participant incurs a Vesting Break in
Service on the last day of the period used to determine the Vesting Break in
Service.
11
<PAGE> 14
This is the date on which the Participant's Nonvested Account will be forfeited
unless an earlier forfeiture occurs as provided in the FORFEITURES SECTION of
Article III.
GROUP CONTRACT means the group annuity contract or contracts into which the
Primary Employer enters with the Insurer for the investment of Contributions and
the payment of benefits under this Plan. The term Group Contract as it is used
in this Plan is deemed to include the plural unless the context clearly
indicates otherwise.
HIGHLY COMPENSATED EMPLOYEE means a highly compensated active Employee or a
highly compensated former Employee.
A highly compensated active Employee means any Employee who performs service for
the Employer during the determination year and who, during the look-back year:
a) received compensation from the Employer in excess of $75,000 (as
adjusted pursuant to Code Section 415(d));
b) received compensation from the Employer in excess of $50,000 (as
adjusted pursuant to Code Section 415(d)) and was a member of the
top-paid group for such year; or
c) 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 Code Section 415(b)(1)(A).
The term Highly Compensated Employee also means:
d) Employees who are both described in the preceding sentence if the
term "determination year" is substituted for the term "look-back
year" and the Employee is one of the 100 Employees who received the
most compensation from the Employer during the determination year;
and
e) 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 (c) above during
either a determination year or look-back year, the highest paid officer for such
year shall be treated as a Highly Compensated Employee.
For this purpose, the determination year shall be the Plan Year. The look-back
year shall be the twelve-month period immediately preceding the determination
year.
A highly compensated former Employee means any Employee who separated from
service (or was deemed to have separated) prior to the determination year,
performs no service for the Employer
12
<PAGE> 15
during the determination year, and was a highly compensated active Employee for
either the separation year or any determination year ending on or after the
Employee's 55th birthday.
If an Employee is, during a determination year or look-back year, a family
member of either a 5 percent owner who is an active or former Employee or a
Highly Compensated Employee who is one of the 10 most highly compensated
Employees ranked on the basis of compensation paid by the Employer during such
year, then the family member and the 5 percent owner or top-ten highly
compensated Employee shall be aggregated. In such case, the family member and 5
percent owner or top-ten highly compensated Employee shall be treated as a
single Employee receiving compensation and Plan contributions or benefits equal
to the sum of such compensation and contributions or benefits of the family
member and 5 percent owner or top-ten highly compensated Employee. For purposes
of this definition, family member includes the spouse, lineal ascendants and
descendants of the Employee or former Employee and the spouses of such lineal
ascendants and descendants.
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 Code Section
414(q) and the regulations thereunder.
HOUR-OF-SERVICE means the following:
a) Each hour for which an Employee is paid, or entitled to payment, for
performing duties for the Employer during the applicable computation
period.
b) Each hour for which an Employee is paid, or entitled to payment, by
the Employer because of a period of time in which no duties are
performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of absence.
Notwithstanding the preceding provisions of this subparagraph (b),
no credit will be given to the Employee
1) for more than 501 Hours-of-Service under this subparagraph (b)
because of any single continuous period in which the Employee
performs no duties (whether or not such period occurs in a
single computation period); or
2) for an Hour-of-Service for which the Employee is directly or
indirectly paid, or entitled to payment, because of a period
in which no duties are performed if such payment is made or
due under a plan maintained solely for the purpose of
complying with applicable worker's or workmen's compensation,
or unemployment compensation or disability insurance laws; or
13
<PAGE> 16
3) for an Hour-of-Service for a payment which solely reimburses
the Employee for medical or medically related expenses
incurred by him.
For purposes of this subparagraph (b), a payment shall be deemed to
be made by, or due from the Employer, regardless of whether such
payment is made by, or due from the Employer, directly or indirectly
through, among others, a trust fund or insurer, to which the
Employer contributes or pays premiums and regardless of whether
contributions made or due to the trust fund, insurer or other entity
are for the benefit of particular employees or are on behalf of a
group of employees in the aggregate.
c) Each hour for which back pay, irrespective of mitigation of damages,
is either awarded or agreed to by the Employer. The same
Hours-of-Service shall not be credited under both subparagraph (a)
or subparagraph (b) above (as the case may be) and under this
subparagraph (c). Crediting of Hours-of-Service for back pay awarded
or agreed to with respect to periods described in subparagraph (b)
above will be subject to the limitations set forth in that
subparagraph.
The crediting of Hours-of-Service above shall be applied under the rules of
paragraphs (b) and (c) of the Department of Labor Regulation 2530.200b-2
(including any interpretations or opinions implementing said rules); which
rules, by this reference, are specifically incorporated in full within this
Plan. The reference to paragraph (b) applies to the special rule for determining
hours of service for reasons other than the performance of duties such as
payments calculated (or not calculated) on the basis of units of time and the
rule against double credit. The reference to paragraph (c) applies to the
crediting of hours of service to computation periods.
Hours-of-Service shall be credited for employment with any other employer
required to be aggregated with the Employer under Code Sections 414(b), (c), (m)
or (o) and the regulations thereunder for purposes of eligibility and vesting.
Hours-of-Service shall also be credited for any individual who is considered an
employee for purposes of this Plan pursuant to Code Section 414(n) or Code
Section 414(o) and the regulations thereunder.
Solely for purposes of determining whether a one-year break in service has
occurred for eligibility or vesting purposes, during a Parental Absence an
Employee shall be credited with the Hours-of-Service which otherwise would
normally have been credited to the Employee but for such absence, or in any case
in which such hours cannot be determined, eight Hours-of-Service per day of such
absence. The Hours-of-Service credited under this paragraph shall be credited in
the computation period in which the absence begins if the crediting is necessary
to prevent a break in service in that period; or in all other cases, in the
following computation period.
INACTIVE PARTICIPANT means a former Active Participant who has an Account. See
the INACTIVE PARTICIPANT SECTION of Article II.
14
<PAGE> 17
INSURER means Principal Mutual Life Insurance Company and any other insurance
company or companies named by the Trustee or Primary Employer.
INTEGRATION LEVEL means, for a Participant, the taxable wage base as in effect
on the latest Yearly Date.
"Taxable wage base" as used in this definition means the contribution and
benefit base in effect under section 230 of the Social Security Act.
If a Participant is also a participant in a plan of a Controlled Group member
which uses an integration level in determining the amount or allocation of
contributions, his Integration Level shall be adjusted based upon the ratio of
the Participant's Compensation from the Employer to his total compensation from
the Employer and the Controlled Group member.
INVESTMENT FUND means the total assets held for the purpose of providing
benefits for Participants. These funds result from Contributions made under the
Plan.
INVESTMENT MANAGER means any fiduciary (other than a trustee or Named Fiduciary)
a) who has the power to manage, acquire, or dispose of any assets of
the Plan; and
b) who (1) is registered as an investment adviser under the Investment
Advisers Act of 1940, or (2) is a bank, as defined in the Investment
Advisers Act of 1940, or (3) is an insurance company qualified to
perform services described in subparagraph (a) above under the laws
of more than one state; and
c) who has acknowledged in writing being a fiduciary with respect to
the Plan.
LATE RETIREMENT DATE means the first day of any month which is after a
Participant's Normal Retirement Date and on which retirement benefits begin. If
a Participant continues to work for the Employer after his Normal Retirement
Date, his Late Retirement Date shall be the earliest first day of the month on
or after he ceases to be an Employee. An earlier or a later Retirement Date may
apply if the Participant so elects. An earlier Retirement Date may apply if the
Participant is age 70 1/2. See the WHEN BENEFITS START SECTION of Article V.
LEASED EMPLOYEE means any person (other than an employee of the recipient) who
pursuant to an agreement between the recipient and any other person ("leasing
organization") has performed services for the recipient (or for the recipient
and related persons determined in accordance with Code Section 414(n)(6)) on a
substantially full time basis for a period of at least one year, and such
services are of a type historically performed by employees in the business field
of the recipient employer. Contributions or benefits provided a Leased Employee
by the leasing organization which are attributable to service performed for the
recipient employer shall be treated as provided by the recipient employer.
15
<PAGE> 18
A Leased Employee shall not be considered an employee of the recipient if:
a) such employee is covered by a money purchase pension plan providing
(1) a nonintegrated employer contribution rate of at least 10
percent of compensation, as defined in Code Section 415(c)(3), but
including amounts contributed pursuant to a salary reduction
agreement which are excludable from the employee's gross income
under Code Sections 125, 402(e)(3), 402(h) or 403(b), (2) immediate
participation, and (3) full and immediate vesting and
b) Leased Employees do not constitute more than 20 percent of the
recipient's nonhighly compensated workforce.
MATCHING CONTRIBUTIONS means matching contributions made by the Employer to fund
this Plan. See the EMPLOYER CONTRIBUTIONS SECTION of Article III.
MAXIMUM INTEGRATION RATE means the amount determined according to the following
schedule:
<TABLE>
<CAPTION>
MAXIMUM
INTEGRATION LEVEL INTEGRATION RATE
<S> <C>
100% of TWB 5.7%
Less than 100%, but more than 80% of TWB 5.4%
More than the greater of $10,000 or 20% of
TWB, but not more than 80% of TWB 4.3%
Not more than the greater of $10,000 or 20%
of TWB 5.7%
</TABLE>
"TWB" as used in this definition means the taxable wage base as in effect on the
latest Yearly Date. "Taxable wage base" as used in this definition means the
maximum amount of earnings which may be considered for wages for a year under
Code Section 3121 (a)(1).
On any date the portion of the rate of tax under Code Section 3111(a) (in effect
on the latest Yearly Date) which is attributable to old age insurance exceeds
5.7%, such rate shall be substituted for 5.7% and 5.4% and 4.3% shall be
increased proportionately.
MONTHLY DATE means each Yearly Date and the same day of each following month
during the Plan Year beginning on such Yearly Date.
16
<PAGE> 19
NAMED FIDUCIARY means the person or persons who have authority to control and
manage the operation and administration of the Plan.
The Named Fiduciary is the Employer.
NONHIGHLY COMPENSATED EMPLOYEE means an Employee of the Employer who is neither
a Highly Compensated Employee nor a Family Member.
NONVESTED ACCOUNT means the part, if any, of a Participant's Account that is in
excess of his Vested Account.
NORMAL FORM means a single life annuity with installment refund.
NORMAL RETIREMENT AGE means the age at which the Participant's normal retirement
benefit becomes nonforfeitable. A Participant's Normal Retirement Age is 65.
NORMAL RETIREMENT DATE means the earliest first day of the month on or after the
date the Participant reaches his Normal Retirement Age. Unless otherwise
provided in this Plan, a Participant's retirement benefits shall begin on a
Participant's Normal Retirement Date if he has ceased to be an Employee on such
date and has a Vested Account. Even if the Participant is an Employee on his
Normal Retirement Date, he may choose to have his retirement benefit begin on
such date. See the WHEN BENEFITS START SECTION of Article V.
PARENTAL ABSENCE means an Employee's absence from work which begins on or after
the first Yearly Date after December 31, 1984,
a) by reason of pregnancy of the Employee,
b) by reason of birth of a child of the Employee,
c) by reason of the placement of a child with the Employee in
connection with adoption of such child by such Employee, or
d) for purposes of caring for such child for a period beginning
immediately following such birth or placement.
PARTICIPANT means either an Active Participant or an Inactive Participant.
PARTICIPANT CONTRIBUTIONS means Voluntary Contributions as set out in Article
III.
PERIOD OF MILITARY DUTY means, for an Employee
a) who served as a member of the armed forces of the United States, and
17
<PAGE> 20
b) who was reemployed by the Employer at a time when the Employee had a
right to reemployment in accordance with seniority rights as
protected under Section 2021 through 2026 of Title 38 of the U.S.
Code.
the period of time from the date the Employee was first absent from active work
for the Employer because of such military duty to the date the Employee was
reemployed.
PLAN means the 401(k) profit sharing plan of the Employer set forth in this
document, including any later amendments to it.
PLAN ADMINISTRATOR means the person or persons who administer the Plan.
The Plan Administrator is the Employer.
PLAN YEAR means a period beginning on a Yearly Date and ending on the day before
the next Yearly Date.
PREDECESSOR EMPLOYER means a firm absorbed by the Employer by change of name,
merger, acquisition or a change of corporate status, which maintained a
qualified retirement plan or a firm of which the Employer was once a pan which
maintained a qualified retirement plan.
PRIMARY EMPLOYER means REGAL CINEMAS INC.
QUALIFIED JOINT AND SURVIVOR FORM means, for a Participant who has a spouse, an
immediate survivorship life annuity with installment refund, where the
survivorship percentage is 50% and the Contingent Annuitant is the Participant's
spouse. A former spouse will be treated as the spouse to the extent provided
under a qualified domestic relations order as described in Code Section 414(p).
If a Participant does not have a spouse, the Qualified Joint and Survivor Form
means the Normal Form.
The amount of benefits payable under the Qualified Joint and Survivor Form shall
be the amount of benefits which may be provided by the Participant's Vested
Account.
QUALIFIED PRERETIREMENT SURVIVOR ANNUITY means a single life annuity with
installment refund payable to the surviving spouse of a Participant who dies
before his Annuity Starting Date. A former spouse will be treated as the
surviving spouse to the extent provided under a qualified domestic relations
order as described in Code Section 414(p).
QUALIFYING EMPLOYER SECURITY means any instrument issued by the Employer and
meeting the requirements of Section 4975(e)(8) of the Code.
REEMPLOYMENT COMMENCEMENT DATE means the date an Employee first performs an
Hour-of-Service following an Eligibility Break in Service.
18
<PAGE> 21
REENTRY DATE means the date a former Active Participant reenters the Plan. See
the ACTIVE PARTICIPANT SECTION of Article II.
REGISTRATION TYPE QUALIFYING EMPLOYER SECURITY is a class of securities which
is required to be registered under Section 12 of the Securities Exchange Act of
1934 or which would be required to be so registered if it did not qualify for
the exemption from registration provided in Section 12(g)(2)(H) of said Act.
RETIREMENT DATE means the date a retirement benefit will begin and is a
Participant's Early, Normal or Late Retirement Date, as the case may be.
ROLLOVER CONTRIBUTIONS means the Rollover Contributions which are made by or for
a Participant according to the provisions of the ROLLOVER CONTRIBUTIONS SECTION
of Article III.
SEMI-YEARLY DATE means each Yearly Date and the sixth Monthly Date after each
Yearly Date which is within the same Plan Year.
TEFRA means the Tax Equity and Fiscal Responsibility Act of 1982.
TEFRA COMPLIANCE DATE means the date a plan is to comply with the provisions of
TEFRA. The TEFRA Compliance Date as used in this Plan is,
a) for purposes of contribution limitations, Code Section 415,
1) if the plan was in effect on July 1, 1982, the first day of
the first limitation year which begins after December 31,
1982, or
2) if the plan was not in effect on July 1, 1982, the first day
of the first limitation year which ends after July 1, 1982.
b) for all other purposes, the first Yearly Date after December 31,
1983.
TOTALLY AND PERMANENTLY DISABLED means that a Participant is disabled, as a
result of sickness or injury, to the extent that he is prevented from engaging
in any substantial gainful activity, and is eligible for and receives a
disability benefit under Title II of the Federal Social Security Act.
TRUST means an agreement of trust between the Primary Employer and Trustee
established for the purpose of holding and distributing the Trust Fund under the
provisions of the Plan. The Trust may provide for the investment of all or any
portion of the Trust Fund in the Group Contract.
19
<PAGE> 22
TRUST FUND means the total funds held under the Trust for the purpose of
providing benefits for Participants. These funds result from Contributions made
under the Plan which are forwarded to the Trustee to be deposited in the Trust
Fund.
TRUSTEE means the trustee or trustees under the Trust. The term Trustee as it is
used in this Plan is deemed to include the plural unless the context clearly
indicates otherwise.
VALUATION DATE means for purposes of the date on which the value of the assets
of the Trust is determined. The value of each Account which is maintained under
this Plan shall be determined on the Valuation Date. In each Plan Year the
Valuation Date shall be the last date of each calendar quarter. In addition, the
Plan Administrator may designate from time to time, so long as the Trustee
agrees, that another date or dates shall be Valuation Dates with respect to a
specific Plan Year.
VESTED ACCOUNT means the vested part of a Participant's Account. The
Participant's Vested Account is determined as follows.
If the Participant's Vesting Percentage is 100%, his Vested Account equals his
Account.
If the Participant's Vesting Percentage is less than 100%, his Vested Account
equals the sum of (a) and (b) below:
a) The part of the Participant's Account that results from Employer
Contributions made before a prior Forfeiture Date and all other
Contributions which were 100% vested when made.
b) The balance of the Participant's Account in excess of the amount in
(a) above multiplied by his Vesting Percentage.
If the Participant has withdrawn any part of his Account resulting from Employer
Contributions, other than the vested Employer Contributions included in (a)
above, the amount determined under this subparagraph (b) shall be equal to P(AB
+ D) - D as defined below:
P the Participant's Vesting Percentage.
AB The balance of the Participant's Account in excess of the amount in
(a) above.
D the amount of withdrawal resulting from Employer Contributions,
other than the vested Employer Contributions included in (a) above.
The Participant's Vested Account is nonforfeitable.
20
<PAGE> 23
VESTING BREAK IN SERVICE means a Vesting Computation Period in which an Employee
is credited with 500 or fewer Hours-of-Service. An Employee incurs a Vesting
Break in Service on the last day of a Vesting Computation Period in which he has
a Vesting Break in Service.
VESTING COMPUTATION PERIOD means a 12-consecutive month period ending on the
last day of each Plan Year, including corresponding 12-consecutive month periods
before January 1, 1993.
VESTING PERCENTAGE means the percentage used to determine the nonforfeitable
portion of a Participant's Account attributable to Employer Contributions which
were not 100% vested when made.
A Participant's Vesting Percentage is shown in the following schedule opposite
the number of whole years of his Vesting Service.
<TABLE>
<CAPTION>
VESTING SERVICE VESTING
(whole years) PERCENTAGE
<S> <C>
Less than 2 0
2 20
3 40
4 60
5 80
6 or more 100
</TABLE>
However, the Vesting Percentage for a Participant who is an Employee on or after
the earliest of (i) the date he reaches his Normal Retirement Age, (ii) the date
of his death, (iii) the date he meets the requirement(s) for an Early Retirement
Date, or (iv) the date he becomes Totally and Permanently Disabled, shall be
100% on such date.
If the schedule used to determine a Participant's Vesting Percentage is changed,
the new schedule shall not apply to a Participant unless he is credited with an
Hour-of-Service on or after the date of the change and the Participant's
nonforfeitable percentage on the day before the date of the change is not
reduced under this Plan. The amendment provisions of the AMENDMENT SECTION of
Article IX regarding changes in the computation of the Vesting Percentage shall
apply.
VESTING SERVICE means one year of service for each Vesting Computation Period in
which an Employee is credited with at least 1,000 Hours-of-Service.
However, Vesting Service is modified as follows:
Predecessor Employer service included:
21
<PAGE> 24
An Employee's service with a Predecessor Employer shall be included as
service with the Employer. If this Plan is not a continuation of a plan of
that Predecessor Employer, an Employee's service with that Predecessor
Employer shall be counted only if service continued with the Employer
without interruption. This service includes service performed while a
proprietor or partner.
Period of Military Duty included:
A Period of Military Duty shall be included as service with the Employer
to the extent it has not already been credited. For purposes of crediting
Hours-of-Service during the Period of Military Duty, an Hour-of-Service
shall be credited (without regard to the 501 Hour-of-Service limitation)
for each hour an Employee would normally have been scheduled to work for
the Employer during such period.
Controlled Group service included:
An Employee's service with a member firm of a Controlled Group while both
that firm and the Employer were members of the Controlled Group shall be
included as service with the Employer.
VOLUNTARY CONTRIBUTIONS means contributions by a Participant that are not
required as a condition of employment or participation or for obtaining
additional benefits from the Employer Contributions. See the VOLUNTARY
CONTRIBUTIONS BY PARTICIPANTS SECTION of Article III.
YEARLY DATE means January 1, 1993, and the same day of each following year.
YEARS OF SERVICE means an Employee's Vesting Service disregarding any
modifications which exclude service.
22
<PAGE> 25
ARTICLE II
PARTICIPATION
SECTION 2.01--ACTIVE PARTICIPANT.
a) An Employee shall first become an Active Participant (begin active
participation in the Plan) on the earliest Semi-yearly Date on or
after January 1, 1996, on which he is an Eligible Employee and has
met both of the eligibility requirements set forth below. This date
is his Entry Date.
1) He has completed one year of Eligibility Service before his
Entry Date.
2) He is age 21 or older.
Each Employee who was an Active Participant under the Plan on
December 31, 1995, shall continue to be an Active Participant if he
is still an Eligible Employee on January 1, 1996, and his Entry Date
shall not change.
If a person has been an Eligible Employee who has met all the
eligibility requirements above, but is not an Eligible Employee on
the date which would have been his Entry Date, he shall become an
Active Participant on the date he again becomes an Eligible
Employee. This date is his Entry Date.
b) An Inactive Participant shall again become an Active Participant
(resume active participation in the Plan) on the date he again
performs an Hour-of-Service as an Eligible Employee. This date is
his Reentry Date
Upon again becoming an Active Participant, he shall cease to be an
Inactive Participant.
c) A former Participant shall again become an Active Participant
(resume active participation in the Plan) on the date he again
performs an Hour-of-Service as an Eligible Employee. This date is
his Reentry Date.
There shall be no duplication of benefits for a Participant under this
Plan because of more than one period as an Active Participant.
SECTION 2.02--INACTIVE PARTICIPANT.
An Active Participant shall become an Inactive Participant (stop accruing
benefits under the Plan) on the earlier of the following:
23
<PAGE> 26
a) The date on which he ceases to be an Eligible Employee (on his
Retirement Date if the date he ceases to be an Eligible Employee
occurs within one month of his Retirement Date).
b) The effective date of complete termination of the Plan.
An Employee or former Employee who was an Inactive Participant under the
Plan on December 31, 1995, shall continue to be an inactive Participant on
January l, 1996. Eligibility for any benefits payable to him or on his behalf
and the amount of the benefits shall be determined according to the provisions
of the prior document, unless otherwise stated in this document.
SECTION 2.03--CESSATION OF PARTICIPATION.
A Participant shall cease to be a Participant on the date he is no longer
an Eligible Employee and his Account is zero.
SECTION 2.04--ADOPTING EMPLOYERS - SINGLE PLAN
Each of the employers controlled by or affiliated with the Employer and
listed below is an Adopting Employer. Each Adopting Employer listed below
participates with the Employer in this Plan. An Adopting Employer's agreement to
participate in this Plan shall be in writing.
If the Adopting Employer did not maintain its plan before its date of
adoption specified below, its date of adoption shall be the Entry Date for any
of its employees who have met the requirements in the ACTIVE PARTICIPANT SECTION
of Article II as of that date. Service with and earnings from an Adopting
Employer shall be included as service with and earnings from the Employer.
Transfer of employment, without interruption, between an Adopting Employer and
another Adopting Employer or the Employer shall not be considered an
interruption of service.
Contributions made by an Adopting Employer shall be treated as
Contributions made by the Employer. Forfeitures arising from those Contributions
shall be used for the benefit of all Participants.
An employer shall not be an Adopting Employer if it ceases to be
controlled by or affiliated with the Employer. Such an employer may continue a
retirement plan for its employees in the form of a separate document. This Plan
shall be amended to delete a former Adopting Employer from the list below.
If an employer ceases to be an Adopting Employer and does not continue a
retirement plan for the benefit of its employees, partial termination may result
and the provisions of Article VII apply.
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ADOPTING EMPLOYERS
NAME FISCAL YEAR END DATE OF ADOPTION
LITCHFIELD THEATRES LTD December 31 January 1, 1995
NEIGHBORHOOD ENTERTAINMENT INC. December 31 April 17, 1995
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ARTICLE III
CONTRIBUTIONS
SECTION 3.01--EMPLOYER CONTRIBUTIONS.
Employer Contributions for Plan Years which end on or after January 1,
1996, may be made without regard to current or accumulated net income, earnings,
or profits of the Employer. Notwithstanding the foregoing, the Plan shall
continue to be designed to qualify as a profit sharing plan for purposes of Code
Sections 401 (a), 402, 412, and 417. Such Contributions will be equal to the
Employer Contributions as described below:
a) The amount of each Elective Deferral Contribution for a Participant
shall be equal to any percentage of his Compensation as elected in
his elective deferral agreement. An Employee who is eligible to
participate in the Plan may file an elective deferral agreement with
the Employer. The elective deferral agreement to start Elective
Deferral Contributions may be effective on a Participant's Entry
Date (Reentry Date, if applicable) or any following Monthly Date.
The Participant shall make any change or terminate the elective
deferral agreement by filing a new elective deferral agreement. A
Participant's elective deferral agreement making a change may be
effective on any date an elective deferral agreement to start
Elective Deferral Contributions could be effective. A Participant's
elective deferral agreement to stop Elective Deferral Contributions
may be effective on any date. The elective deferral agreement must
be in writing and completed before the beginning of the pay period
in which Elective Deferral Contributions are to start, change or
stop.
Elective Deferral Contributions are fully (100%) vested and
nonforfeitable.
b) The amount of each Matching Contribution for a Participant shall be
equal to 40% of the Elective Deferral Contributions made for him,
disregarding any Elective Deferral Contributions in excess of 6% of
his Compensation.
Matching Contributions are subject to the Vesting Percentage.
c) The amount of each Discretionary Contribution shall be determined by
the Employer.
Discretionary Contributions are subject to the Vesting Percentage.
No Participant shall be permitted to have Elective Deferral Contributions,
as defined in the EXCESS AMOUNTS SECTION of Article III, made under this Plan,
or any other qualified plan maintained by the Employer, during any taxable year,
in excess of the dollar limitation contained in Code Section 402(g) in effect at
the beginning of such taxable year.
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The Employer shall pay to the Insurer its Contributions used to determine
the Actual Deferral Percentage, as defined in the EXCESS AMOUNTS SECTION of
Article III, to the Plan for each Plan Year not later than the end of the
twelve-month period immediately following the Plan Year for which they are
deemed to be paid. Any such Contributions accumulated through payroll deductions
shall be paid within 90 days of the date withheld or the date it is first
reasonably practical for the Employer to do so, if earlier.
A portion of the Plan assets resulting from Employer Contributions (but
not more than the original amount of those Contributions and reduced
proportionately for losses, if applicable) may be returned if the Employer
Contributions are made because of a mistake of fact or are more than the amount
deductible under Code Section 404 (excluding any amount which is not deductible
because the Plan is disqualified). The amount involved must be returned to the
Employer within one year after the date the Employer Contributions are made by
mistake of fact or the date the deduction is disallowed, whichever applies.
Except as provided under this paragraph and Article VII, the assets of the Plan
shall never be used for the benefit of the Employer and are held for the
exclusive purpose of providing benefits to Participants and their Beneficiaries
and for defraying reasonable expenses of administering the Plan.
SECTION 3.01A--VOLUNTARY CONTRIBUTIONS BY PARTICIPANTS.
No Voluntary Contributions may be made on or after January 1, 1996.
The part of the Participant's Account resulting from Voluntary
Contributions is fully (100%) vested and nonforfeitable at all times.
SECTION 3.01B--ROLLOVER CONTRIBUTIONS.
A Rollover Contribution may be made by or for an Eligible Employee if the
following conditions are met:
a) The Contribution is a rollover contribution which the Code permits
to be transferred to a plan that meets the requirements of Code
Section 401(a).
b) If the Contribution is made by the Eligible Employee, it is made
within sixty days after he receives the distribution.
c) The Eligible Employee furnishes evidence satisfactory to the Plan
Administrator that the proposed transfer is in fact a rollover
contribution that meets conditions (a) and (b) above.
The Rollover Contribution may be made by the Eligible Employee or the
Eligible Employee may direct the trustee or named fiduciary of another plan to
transfer the funds which would otherwise be a Rollover Contribution directly to
this Plan. Such transferred funds shall be called a
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Rollover Contribution. The Contribution shall be made according to procedures
set up by the Plan Administrator.
If the Eligible Employee is not an Active Participant at the time the
Rollover Contribution is made, he shall be deemed to be a Participant only for
the purposes of investment and distribution of the Rollover Contribution. He
shall not share in the allocation of Employer Contributions and he may not make
nondeductible Participant Contributions until the time he meets all the
requirements to become an Active Participant.
Rollover Contributions made by or for an Eligible Employee shall be
credited to his Account. The part of the Participant's Account resulting from
Rollover Contributions is fully (100%) vested and nonforfeitable at all times. A
separate accounting record shall be maintained for that part of his Rollover
Contribution which consists of voluntary contributions that were deducted from
the Participant's gross income for Federal income tax purposes.
SECTION 3.02--FORFEITURES.
The Nonvested Account of a Participant shall be forfeited as of the
earlier of the following: the date of the Participant's death, if prior to such
date he had ceased to be an Employee; or his Forfeiture Date. All or a part of a
Participant's Nonvested Account will be forfeited if, after he ceases to be an
Employee, he receives a distribution of his entire Vested Account or a
distribution of his Vested Account derived from Employer Contributions which
were not 100% vested when made according to the provisions of the VESTED
BENEFITS SECTION of Article V or the SMALL AMOUNTS SECTION of Article IX. If a
Participant's Vested Account is zero on the date he ceases to be an Employee, he
shall be deemed to have received a distribution of his entire Vested Account on
such date. The forfeiture will occur as of the date he receives the distribution
or on the date such provision became effective, if later. If he receives a
distribution of his entire Vested Account, his entire Nonvested Account will be
forfeited. If he receives a distribution of his Vested Account from Employer
Contributions which were not 100% vested when made, but less than his entire
Vested Account, the amount to be forfeited will be determined by multiplying his
Nonvested Account by a fraction. The numerator of the fraction is the amount of
the distribution derived from Employer Contributions which were not 100% vested
when made and the denominator of the fraction is his entire Vested Account
derived from such Employer Contributions on the date of distribution.
A Forfeiture shall also occur as described in the EXCESS AMOUNTS SECTION
of Article III.
Forfeitures may first be applied to pay administrative expenses under the
Plan which would otherwise be paid by the Employer.
Forfeitures not used to pay administrative expenses shall be applied to
reduce the earliest Employer Contributions made after the Forfeitures are
determined. Forfeitures shall be determined
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at least once during each taxable year of the Employer. Upon their application,
such Forfeitures shall be deemed to be Employer Contributions.
Forfeitures of Matching Contributions which relate to excess amounts shall
be applied as provided in the EXCESS AMOUNTS SECTION of Article III.
If a Participant again becomes an Eligible Employee after receiving a
distribution which caused his Nonvested Account to be forfeited, he shall have
the right to repay to the Plan the entire amount of the distribution he received
(excluding any amount of such distribution resulting from Contributions which
were 100% vested when made). The repayment must be made before the earlier of
the date five years after the date he again becomes an Eligible Employee or the
end of the first period of five consecutive Vesting Breaks in Service which
begin after the date of the distribution.
If the Participant makes the repayment provided above, the Plan
Administrator shall restore to his Account an amount equal to his Nonvested
Account which was forfeited on the date of distribution, unadjusted for any
investment gains or losses. If the amount of the repayment is zero dollars
because the Participant was deemed to have received a distribution or the plan
did not have repayment provisions in effect on the date the distribution was
made and he again performs an Hour-of-Service as an Eligible Employee within
the repayment period, the Plan Administrator shall restore the Participant's
Account as if he had made a required repayment on the date he performed such
Hour-of-Service. Restoration of the Participant's Account shall include
restoration of all Code Section 411(d)(6) protected benefits with respect to
that restored Account, according to applicable Treasury regulations. Provided,
however, the Plan Administrator shall not restore the Nonvested Account if a
Forfeiture Date has occurred after the date of the distribution and on or before
the date of repayment and that Forfeiture Date would result in a complete
forfeiture of the amount the Plan Administrator would otherwise restore.
The Plan Administrator shall restore the Participant's Account by the
close of the Plan Year following the Plan Year in which repayment is made.
Permissible sources for restoration are Forfeitures or Employer Contributions.
The Employer shall contribute, without regard to any requirement or condition of
the EMPLOYER CONTRIBUTIONS SECTION of Article III, such additional amount needed
to make the required restoration. The repaid and restored amounts are not
included in the Participant's Annual Addition, as defined in the CONTRIBUTION
LIMITATION SECTION of Article III.
SECTION 3.03--ALLOCATION.
The following Contributions for the Plan Year shall be allocated among all
eligible persons:
Discretionary Contributions
The eligible persons are all Participants and former Participants who (i) are
Active Participants on the last day of the Plan Year or (ii) were Active
Participants at any time in the Plan Year and had 501
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<PAGE> 32
or more Hours-of-Service in the Accrual Computation Period that ends in the Plan
Year. The amount allocated to such a person shall be determined below and under
Article X.
An Employee's service with a Predecessor Employer shall be included as
service with the Employer for the purpose of determining his Hours-of-Service to
be eligible for an allocation. If this Plan is not a continuation of a plan of
that Predecessor Employer, an Employee's service with that Predecessor Employer
shall be counted only if service continued with the Employer without
interruption. This service includes service performed while a proprietor or
partner.
The following Contributions for each Plan Year shall be allocated to each
Participant for whom such Contributions were made under the EMPLOYER
CONTRIBUTIONS SECTION of Article III:
Elective Deferral Contributions
Matching Contributions
These Contributions shall be allocated when made and credited to the
Participant's Account.
Discretionary Contributions are allocated as of the last day of each Plan
Year. The amount allocated to each eligible person for the Plan Year shall be
equal to the sum of the amounts determined in (a) and (b) below:
a) First, an amount equal to Discretionary Contributions for the Plan
Year, multiplied by the ratio of
1) the sum of (A) his Annual Compensation not in excess of his
Integration Level as of the last day of the Plan Year plus (B)
2 times the amount of such compensation in excess of his
Integration Level to
2) the total of such sums for all eligible persons.
However, the amount allocated in this manner shall not be more than
a percentage (equal to the Maximum Integration Rate) of his Annual
Compensation not in excess of his Integration Level as of the last
day of the Plan Year plus a percentage (equal to 2 times the Maximum
Integration Rate) of the amount of such compensation in excess of
his Integration Level. The effect of this allocation under (a) is
such that when the amount as a percentage of each person's Annual
Compensation below the Integration Level reaches the Maximum
Integration Rate any remaining unallocated amount will be allocated
under (b) below.
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b) Second, an amount equal to the product of any unallocated amount
still remaining, multiplied by the ratio of
1) his Annual Compensation as of the last day of the Plan Year to
2) the total of such compensation for all eligible persons.
This amount shall be credited to his Account.
In determining the amount of Employer Contributions to be allocated to a
Participant who is a Leased Employee, contributions and benefits provided by the
leasing organization which are attributable to services such Leased Employee
performs for the Employer shall be treated as provided by the Employer and there
shall be no duplication of those contributions or benefits under this Plan.
SECTION 3.04--CONTRIBUTION LIMITATION.
a) For the purpose of determining the contribution limitation set forth
in this section, the following terms are defined:
Aggregate Annual Addition means, for a Participant with respect to
any Limitation Year, the sum of his Annual Additions under all
defined contribution plans of the Employer, as defined in this
section, for such Limitation Year. The nondeductible participant
contributions which the Participant makes to a defined benefit plan
shall be treated as Annual Additions to a defined contribution plan.
The Contributions the Employer, as defined in this section, made for
the Participant for a Plan Year beginning on or after March 31,
1984, to an individual medical benefit account, as defined in Code
Section 415(l)(2) under a pension or annuity plan of the Employer,
as defined in this section, shall be treated as Annual Additions to
a defined contribution plan. Also, amounts derived from
contributions paid or accrued after December 31,1985, in Fiscal
Years ending after such date, which are attributable to
post-retirement medical benefits allocated to the separate account
of a key employee, as defined in Code Section 419A(d)(3), under a
welfare benefit fund, as defined in Code Section 419(e), maintained
by the Employer, as defined in this section, are treated as Annual
Additions to a defined contribution plan. The 25% of Compensation
limit under Maximum Permissible Amount does not apply to Annual
Additions resulting from contributions made to an individual medical
account, as defined in Code Section 415(l)(2), or to Annual
Additions resulting from contributions for medical benefits, within
the meaning of Code Section 419A, after separation from service.
Annual Addition means the amount added to a Participant's account
for any Limitation Year which may not exceed the Maximum Permissible
Amount. The
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Annual Addition under any plan for a Participant with respect to any
Limitation Year, shall be equal to the sum of (1) and (2) below:
1) Employer contributions and forfeitures credited to his account
for the Limitation Year.
2) Participant contributions made by him for the Limitation Year.
Before the first Limitation Year beginning after December 31, 1986,
the amount under (2) above is the lesser of (i) 1/2 of his
nondeductible participant contributions made for the Limitation
Year, or (ii) the amount, if any, of his nondeductible participant
contributions made for the Limitation Year which is in excess of six
percent of his Compensation, as defined in this section, for such
Limitation Year.
Compensation means all wages for Federal income tax withholding
purposes, as defined under Code Section 3401(a) (for purposes of
income tax withholding at the source), disregarding any rules
limiting the remuneration included as wages based on the nature or
location of the employment or the services performed.
For any self-employed individual Compensation will mean earned
income.
For purposes of applying the limitations of this section,
Compensation for a Limitation Year is the Compensation actually paid
or made available during such Limitation Year.
Defined Benefit Plan Fraction means, with respect to a Limitation
Year for a Participant who is or has been a participant in a defined
benefit plan ever maintained by the Employer, as defined in this
section, the quotient, expressed as a decimal, of
1) the Participant's Projected Annual Benefit under all such
plans as of the close of such Limitation Year, divided by
2) on and after the TEFRA Compliance Date, the lesser of (i) or
(ii) below:
i) 1.25 multiplied by the maximum dollar limitation which
applies to define benefit plans determined for the
Limitation Year under Code Sections 415(b) or (d) or
ii) 1.4 multiplied by the Participant's highest average
compensation as defined in the defined benefit plan(s),
including any adjustments under Code Section 415(b).
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Before the TEFRA Compliance Date, this denominator is the
Participant's Projected Annual Benefit as of the close of the
Limitation Year if the plan(s) provided the maximum benefit
allowable.
The Defined Benefit Plan Fraction shall be modified as follows:
If the Participant was a participant as of the first day of the
first Limitation Year beginning after December 31, 1986, in one or
more defined benefit plans maintained by the Employer, as defined in
this section, which were in existence on May 6, 1986, the
denominator of this fraction will not be less than 125 percent of
the sum of the annual benefits under such plans which the
Participant had accrued as of the close of the last Limitation Year
beginning before January 1, 1987, disregarding any changes in the
terms and conditions of the plan after May 5, 1986. The preceding
sentence applies only if the defined benefit plans individually and
in the aggregate satisfied the requirements of Code Section 415 for
all Limitation Years beginning before January 1, 1987.
Defined Contribution Plan Fraction means, for a Participant with
respect to a Limitation Year, the quotient, expressed as a decimal,
of
1) the Participant's Aggregate Annual Additions for such
Limitation Year and all prior Limitation Years, under all
defined contribution plans (including the Aggregate Annual
Additions attributable to nondeductible accounts under defined
benefit plans and attributable to all welfare benefit funds,
as defined in Code Section 419(e) and attributable to
individual medical accounts, as defined in Code Section
415(l)(2)) ever maintained by the Employer as defined in this
section, divided by
2) on and after the TEFRA Compliance Date, the sum of the amount
determined for the Limitation Year under (i) or (ii) below,
whichever is less, and the amounts determined in the same
manner for all prior Limitation Years during which he has been
an Employee or an employee of a predecessor employer:
i) 1.25 multiplied by the maximum permissible dollar amount
for each such Limitation Year, or
ii) 1.4 multiplied by the maximum permissible percentage of
the Participant's Compensation, as defined in this
section, for each such Limitation Year.
Before the TEFRA Compliance Date, this denominator is the sum
of the maximum allowable amount of Annual Addition to his
account(s) under all
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<PAGE> 36
the plan(s) of the Employer, as defined in this section, for
each such Limitation Year.
The Defined Contribution Plan Fraction shall be modified as follows:
If the Participant was a participant as of the first day of the
first Limitation Year beginning after December 31, 1986, in one or
more defined contribution plans maintained by the Employer, as
defined in this section, which were in existence on May 6, 1986, the
numerator of this fraction shall be adjusted if the sum of the
Defined Contribution Plan Fraction and Defined Benefit Plan Fraction
would otherwise exceed 1.0 under the terms of this Plan. Under the
adjustment, the dollar amount determined below shall be permanently
subtracted from the numerator of this fraction. The dollar amount is
equal to the excess of the sum of the two fractions, before
adjustment, over 1.0 multiplied by the denominator of his Defined
Contribution Plan Fraction. The adjustment is calculated using his
Defined Contribution Plan Fraction and Defined Benefit Plan Fraction
as they would be computed as of the end of the last Limitation Year
beginning before January 1, 1987, and disregarding any changes in
the terms and conditions of the plan made after May 5, 1986 but
using the Code Section 415 limitations applicable to the first
Limitation Year beginning on or after January 1, 1987.
The Annual Addition for any Limitation Year beginning before January
1, 1987, shall not be recomputed to treat all employee contributions
as Annual Additions.
For a plan that was in existence on July 1, 1982, for purposes of
determining the Defined Contribution Plan Fraction for any
Limitation Year ending after December 31, 1982, the Plan
Administrator may elect, in accordance with the provisions of Code
Section 415, that the denominator for each Participant for all
Limitation Years ending before January 1, 1983, will be equal to
1) the Defined Contribution Plan Fraction denominator which would
apply for the last Limitation Year ending in 1982 if an
election under this paragraph were not made, multiplied by
2) a fraction, equal to (i) over (ii) below:
i) the lesser of (A) $51,875, or (B) 1.4, multiplied by 25%
of the Participant's Compensation, as defined in this
section, for the Limitation Year ending in 1981;
ii) the lesser of (A) $41,500, or (B) 25% of the
Participant's Compensation, as defined in this section,
for the Limitation Year ending in 1981.
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The election described above is applicable only if the plan
administrators under all defined contribution plans of the Employer,
as defined in this section, also elect to use the modified fraction.
Employer means any employer that adopts this Plan and all Controlled
Group members and any other entity required to be aggregated with
the employer pursuant to regulations under Code Section 414(o).
Limitation Year means the 12-consecutive month period within which
it is determined whether or not the limitations of Code Section 415
are exceeded. Limitation Year means each 12-consecutive month period
ending on the last day of each Plan Year, including corresponding
12-consecutive month periods before January 1, 1993. If the
Limitation Year is other than the calendar year, execution of this
Plan (or any amendment to this Plan changing the Limitation Year)
constitutes the Employer's adoption of a written resolution electing
the Limitation Year. If the Limitation Year is changed, the new
Limitation Year shall begin within the current Limitation Year,
creating a short Limitation Year.
Maximum Permissible Amount means, for a Participant with respect to
any Limitation Year, the lesser of (1) or (2) below:
1) The greater of $30,000 or one-fourth of the maximum dollar
limitation which applies to defined benefit plans set forth in
Code Section 415(b)(1) as in effect for the Limitation Year.
(Before the TEFRA Compliance Date, $25,000 multiplied by the
cost of living adjustment factor permitted by Federal
regulations.)
2) 25% of his Compensation, as defined in this section, for such
Limitation Year.
The compensation limitation referred to in (2) shall not apply to
any contribution for medical benefits (within the meaning of Code
Section 401(h) or Code Section 419A(f)(2)) which is otherwise
treated as an annual addition under Code Section 415(l)(1) or Code
Section 419A(d)(2).
If there is a short Limitation Year because of a change in
Limitation Year, the Maximum Permissible Amount will not exceed the
maximum dollar limitation which would otherwise apply multiplied by
the following fraction:
Number of months in the short Limitation Year
12
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Projected Annual Benefit means a Participant's expected annual
benefit under all defined benefit plan(s) ever maintained by the
Employer, as defined in this section. The Projected Annual Benefit
shall be determined assuming that the Participant will continue
employment until the later of current age or normal retirement age
under such plan(s), and that the Participant's compensation for the
current Limitation Year and all other relevant factors used to
determine benefits under such plan(s) will remain constant for all
future Limitation Years. Such expected annual benefit shall be
adjusted to the actuarial equivalent of a straight life annuity if
expressed in a form other than a straight life or qualified joint
and survivor annuity.
b) The Annual Addition under this Plan for a Participant during a
Limitation Year shall not be more than the Maximum Permissible
Amount.
c) Contributions which would otherwise be credited to the Participant's
Account shall be limited or reallocated to the extent necessary to
meet the restrictions of subparagraph (b) above for any Limitation
Year in the following order. Discretionary Contributions shall be
reallocated in the same manner as described in the ALLOCATION
SECTION of Article III to the remaining Participants to whom the
limitations do not apply for the Limitation Year. The Discretionary
Contributions shall be limited if there are no such remaining
Participants. Elective Deferral Contributions that are not the basis
for Matching Contributions shall be limited. Matching Contributions
shall be limited to the extent necessary to limit the Participant's
Annual Addition under this Plan to his maximum amount. If Matching
Contributions are limited because of this limit, Elective Deferral
Contributions that are the basis for Matching Contributions shall be
reduced in proportion.
If, due to (i) an error in estimating a Participant's Compensation
as defined in this section, (ii) because the amount of the
Forfeitures to be used to offset Employer Contributions is more than
the amount of the Employer Contributions due for the remaining
Participants, (iii) as a result of a reasonable error in determining
the amount of elective deferrals (within the meaning of Code Section
402(g)(3)) that may be made with respect to any individual under the
limits of Code Section 415, or (iv) other limited facts and
circumstances, a Participant's Annual Addition is greater than the
amount permitted in (b) above, such excess amount shall be applied
as follows. Elective Deferral Contributions which are not the basis
for Matching Contributions will be returned to the Participant. If
an excess still exists, Elective Deferral Contributions that are the
basis for Matching Contributions will be returned to the
Participant. Matching Contributions based on Elective Deferral
Contributions which are returned shall be forfeited. If after the
return of Elective Deferral Contributions, an excess amount still
exists, and the Participant is an Active Participant as of the end
of the Limitation Year, the excess amount shall be used to offset
Employer Contributions for him in the next Limitation Year. If after
the return of Elective Deferral Contributions, an excess amount
still exists, and the Participant is not an
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<PAGE> 39
Active Participant as of the end of the Limitation Year, the excess
amount will be held in a suspense account which will be used to
offset Employer Contributions for all Participants in the next
Limitation Year. No Employer Contributions that would be included in
the next Limitation Year's Annual Addition may be made before the
total suspense account has been used.
d) A Participant's Aggregate Annual Addition for a Limitation Year
shall not exceed the Maximum Permissible Amount.
If, for the Limitation Year, the Participant has an Annual Addition
under more than one defined contribution plan or a welfare benefit
fund, as defined in Code Section 419(e), or an individual medical
account as defined in Code Section 415(l)(2), maintained by the
Employer, as defined in this section, and such plans and welfare
benefit funds and individual medical accounts do not otherwise limit
the Aggregate Annual Addition to the Maximum Permissible Amount, any
reduction necessary shall be made first to the profit sharing plans,
then to all other such plans and welfare benefit funds and
individual medical accounts and, if necessary, by reducing first
those that were most recently allocated. Welfare benefit funds and
individual medical accounts shall be deemed to be allocated first.
However, elective deferral contributions shall be the last
contributions reduced before the welfare benefit fund or individual
medical account is reduced.
If some of the Employer's defined contribution plans were not in
existence on July 1, 1982, and some were in existence on that date,
the Maximum Permissible Amount which is based on a dollar amount may
differ for a Limitation Year. The Aggregate Annual Addition for the
Limitation Year in which the dollar limit differs shall not exceed
the lesser of (1) 25% of Compensation as defined in this section,
(2) $45,475, or (3) the greater of $30,000 or the sum of the Annual
Additions for such Limitation Year under all the plan(s) to which
the $45,475 amount applies.
e) If a Participant is or has been a participant in both defined
benefit and defined contribution plans (including a welfare benefit
fund or individual medical account) ever maintained by the Employer,
as defined in this section, the sum of the Defined Benefit Plan
Fraction and the Defined Contribution Plan Fraction for any
Limitation Year shall not exceed 1.0 (1.4 before the TEFRA
Compliance Date).
After all other limitations set out in the plans and funds have been
applied, the following limitations shall apply so that the sum of
the Participant's Deferred Benefit Plan Fraction and Defined
Contribution Plan Fraction shall not exceed 1.0 (1.4 before the
TEFRA Compliance Date). The Projected Annual Benefit shall be
limited first. If the Participant's annual benefit(s) equal his
Projected Annual Benefit, as limited, then Annual Additions to the
defined contribution plan(s) shall be limited to the extent needed
to reduce the sum to 1.0 (1.4). First, the voluntary contributions
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the Participant may make for the Limitation Year shall be limited.
Next, in the case of a profit sharing plan, any forfeitures
allocated to the Participant shall be reallocated to remaining
participants to the extent necessary to reduce the decimal to 1.0
(1.4). Last, to the extent necessary, employer contributions for the
Limitation Year shall be reallocated or limited, and any required
and optional employee contributions to which such employer
contributions were geared shall be reduced in proportion.
If, for the Limitation Year, the Participant has an Annual Addition
under more than one defined contribution plan or welfare benefit
fund or individual medical account maintained by the Employer, as
defined in this section, any reduction above shall be made first to
the profit sharing plans, then to all other such plans and welfare
benefit plans and individual medical accounts and, if necessary, by
reducing first those that were most recently allocated. However,
elective deferral contributions shall be the last contributions
reduced before the welfare benefit fund or individual medical
account is reduced. The annual addition to the welfare benefit fund
and individual medical account shall be limited last.
SECTION 3.05--EXCESS AMOUNTS.
a) For the purposes of this section, the following terms are defined:
Actual Deferral Percentage means the ratio (expressed as a
percentage) of Elective Deferral Contributions under this Plan on
behalf of the Eligible Participant for the Plan Year to the Eligible
Participant's Compensation for the Plan Year. The Elective Deferral
Contributions used to determine the Actual Deferral Percentage shall
include Excess Elective Deferrals (other than Excess Elective
Deferrals of Nonhighly Compensated Employees that arise solely from
Elective Deferral Contributions made under this Plan or any other
plans of the Employer or a Controlled Group Member), but shall
exclude Elective Deferral Contributions that are used in computing
the Contribution Percentage (provided the Average Actual Deferral
Percentage test is satisfied both with and without exclusion of
these Elective Deferral Contributions). Under such rules as the
Secretary of the Treasury shall prescribe in Code Section
401(k)(3)(D), the Employer may elect to include Qualified
Nonelective Contributions and Qualified Matching Contributions under
this Plan in computing the Actual Deferral Percentage. For an
Eligible Participant for whom such Contributions on his behalf for
the Plan Year are zero, the percentage is zero.
Aggregate Limit means the greater of (1) or (2) below:
1) The sum of
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i) 125 percent of the greater of the Average Actual
Deferral Percentage of the Nonhighly Compensated
Employees for the Plan Year or the Average Contribution
Percentage of Nonhighly Compensated Employees under the
Plan subject to Code Section 401(m) for the Plan Year
beginning with or within the Plan Year of the cash or
deferred arrangement and
ii) the lesser of 200% or two plus the lesser of such
Average Actual Deferral Percentage or Average
Contribution Percentage.
2) The sum of
i) 125 percent of the lesser of the Average Actual Deferral
Percentage of the Nonhighly Compensated Employees for
the Plan Year or the Average Contribution Percentage of
Nonhighly Compensated Employees under the Plan subject
to Code Section 401(m) for the Plan Year beginning with
or within the Plan Year of the cash or deferred
arrangement and
ii) the lesser of 200% or two plus the greater of such
Average Actual Deferral Percentage or Average
Contribution Percentage.
Average Actual Deferral Percentage means the average (expressed as a
percentage) of the Actual Deferral Percentages of the Eligible
Participants in a group.
Average Contribution Percentage means the average (expressed as a
percentage) of the Contribution Percentages of the Eligible
Participants in a group.
Contribution Percentage means the ratio (expressed as a percentage)
of the Eligible Participant's Contribution Percentage Amounts to the
Eligible Participant's Compensation for the Plan Year. For an
Eligible Participant for whom such Contribution Percentage Amounts
for the Plan Year are zero, the percentage is zero.
Contribution Percentage Amounts means the sum of the Participant
Contributions and Matching Contributions (that are not Qualified
Matching Contributions) under this Plan on behalf of the Eligible
Participant for the Plan Year. Such Contribution Percentage Amounts
shall not include Matching Contributions that are forfeited either
to correct Excess Aggregate Contributions or because the
Contributions to which they relate are Excess Elective Deferrals,
Excess Contributions or Excess Aggregate Contributions. Under such
rues as the Secretary of the Treasury shall prescribe in Code
Section 401(k)(3)(D), the Employer may elect to include Qualified
Nonelective Contributions and Qualified Matching Contributions under
this Plan which were not used in computing the Actual Deferral
Percentage in computing the
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<PAGE> 42
Contribution Percentage. The Employer may also elect to use Elective
Deferral Contributions in computing the Contribution Percentage so
long as the Average Actual Deferral Percentage test is met before
the Elective Deferral Contributions are used in the Average
Contribution Percentage test and continues to be met following the
exclusion of those Elective Deferral Contributions that are used to
meet the Average Contribution Percentage test.
Elective Deferral Contributions means employer contributions made on
behalf of a participant pursuant to an election to defer under any
qualified cash or deferred arrangement as described in Code Section
401(k), any simplified employee pension cash or deferred arrangement
as described in Code Section 402(h)(1)(B), any eligible deferred
compensation plan under Code Section 457, any plan as described
under Code Section 501(c)(18), and any employer contributions made
on behalf of a participant for the purchase of an annuity contract
under Code Section 403(b) pursuant to a salary reduction agreement.
Elective Deferral Contributions shall not include any deferrals
properly distributed as excess Annual Additions.
Eligible Participant means, for purposes of determining the Actual
Deferral Percentage, any Employee who is otherwise authorized under
the terms of the Plan to have Elective Deferral Contributions made
on his behalf for the Plan Year. Eligible Participant means, for
purposes of determining the Average Contribution Percentage, any
Employee who is otherwise authorized under the terms of the Plan to
have Participant Contributions or Matching Contributions made on his
behalf for the Plan Year.
Excess Aggregate Contributions means, with respect to any Plan Year,
the excess of:
1) The aggregate Contributions taken into account in computing
the numerator of the Contribution Percentage actually made on
behalf of Highly Compensated Employees for such Plan Year,
over
2) The maximum amount of such Contributions permitted by the
Average Contribution Percentage test (determined by reducing
Contributions made on behalf of Highly Compensated Employees
in order of their Contribution Percentages beginning with the
highest of such percentages).
Such determination shall be made after first determining Excess
Elective Deferrals and then determining Excess Contributions.
Excess Contributions means, with respect to any Plan Year, the
excess of:
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<PAGE> 43
1) The aggregate amount of Contributions actually taken into
account in computing the Actual Deferral Percentage of Highly
Compensated Employees for such Plan Year, over
2) The maximum amount of such Contributions permitted by the
Actual Deferral Percentage test (determined by reducing
Contributions made on behalf of Highly Compensated Employees
in order of the Actual Deferral Percentages, beginning with
the highest of such percentages).
Participant's Excess Contributions for a Plan Year will be reduced
by the amount of Excess Elective Deferrals, if any, previously
distributed to the Participant for the taxable year ending in that
Plan Year.
Excess Elective Deferrals means those Elective Deferral
Contributions that are includable in a Participant's gross income
under Code Section 402(g) to the extent such Participant's Elective
Deferral Contributions for a taxable year exceed the dollar
limitation under such Code section. Excess Elective Deferrals shall
be treated as Annual Additions, as defined in the CONTRIBUTION
LIMITATION SECTION of Article III, under the Plan, unless such
amounts are distributed no later than the first April 15 following
the close of the Participant's taxable year.
Participant Contributions means contributions made to any plan by or
on behalf of a participant that are included in the participant's
gross income in the year in which made and that are maintained under
a separate account to which earnings and losses are allocated.
Matching Contributions means employer contributions made to this or
any other defined contribution plan, or to a contract described in
Code Section 403(b), on behalf of a participant on account of a
Participant Contribution made by such participant, or on account of
a participant's Elective Deferral Contributions, under a plan
maintained by the employer.
Qualified Matching Contributions means Matching Contributions which
are subject to the distribution and nonforfeitability requirements
under Code Section 401(k) when made.
Qualified Nonelective Contributions means any employer contributions
(other than Matching Contributions) which an employee may not elect
to have paid to him in cash instead of being contributed to the plan
and which are subject to the distribution and nonforfeitability
requirements under Code Section 401(k).
b) A Participant may assign to this Plan any Excess Elective Deferrals
made during a taxable year by notifying the Plan Administrator in
writing on or before the first
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<PAGE> 44
following March 1 of the amount of the Excess Elective Deferrals to
be assigned to the Plan. A Participant is deemed to notify the Plan
Administrator of any Excess Elective Deferrals that arise by taking
into account only those Elective Deferral Contributions made to this
Plan and any other plans of the Employer or a Controlled Group
member and reducing such Excess Elective Deferrals by the amount of
Excess Contributions, if any, previously distributed for the Plan
Year beginning in that taxable year. The Participant's claim for
Excess Elective Deferrals shall be accompanied by the Participant's
written statement that if such amounts are not distributed, such
Excess Elective Deferrals, when added to amounts deferred under
other plans or arrangements described in Code Sections 401(k),
408(k) or 403(b), will exceed the limit imposed on the Participant
by Code Section 402(g) for the year in which the deferral occurred.
The Excess Elective Deferrals assigned to this Plan can not exceed
the Elective Deferral Contributions allocated under this Plan for
such taxable year.
Notwithstanding any other provisions of the Plan, Elective Deferral
Contributions in an amount equal to the Excess Elective Deferrals
assigned to this Plan, plus any income and minus any loss allocable
thereto, shall be distributed no later than April 15 to any
Participant to whose Account Excess Elective Deferrals were assigned
for the preceding year and who claims Excess Elective Deferrals for
such taxable year.
The income or loss allocable to such Excess Elective Deferrals shall
be equal to the income or loss allocable to the Participant's
Elective Deferral Contributions for the taxable year in which the
excess occurred multiplied by a fraction. The numerator of the
fraction is the Excess Elective Deferrals. The denominator of the
fraction is the closing balance without regard to any income or loss
occurring during such taxable year (as of the end of such taxable
year) of the Participant's Account resulting from Elective Deferral
Contributions.
Any Matching Contributions which were based on the Elective Deferral
Contributions which are distributed as Excess Elective Deferrals,
plus any income and minus any loss allocable thereto, shall be
forfeited. These Forfeitures shall be used to offset the earliest
Employer Contribution due after the Forfeiture arises.
c) As of the end of each Plan Year after Excess Elective Deferrals have
been determined, one of the following tests must be met:
1) The Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan
Year is not more than the Average Actual Deferral Percentage
for Eligible Participants who are Nonhighly Compensated
Employees for the Plan Year multiplied by 1.25.
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<PAGE> 45
2) The Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan
Year is not more than the Average Actual Deferral Percentage
for Eligible Participants who are Nonhighly Compensated
Employees for the Plan Year multiplied by 2 and the difference
between the Average Actual Deferral Percentages is not more
than 2.
The Actual Deferral Percentage for any Eligible Participant who is a
Highly Compensated Employee for the Plan Year and who is eligible to
have Elective Deferral Contributions (and Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, if used
in computing the Actual Deferral Percentage) allocated to his
account under two or more plans or arrangements described in Code
Section 401(k) that are maintained by the Employer or a Controlled
Group member shall be determined as if all such Elective Deferral
Contributions (and, if applicable, such Qualified Nonelective
Contributions or Qualified Matching Contributions, or both) were
made under a single arrangement. If a Highly Compensated Employee
participates in two or more cash or deferred arrangements that have
different Plan Years, all cash or deferred arrangements ending with
or within the same calendar year shall be treated as a single
arrangement. Notwithstanding the foregoing, certain plans shall be
treated as separate if mandatorily disaggregated under the
regulations under Code Section 401(k) or permissibly disaggregated
as provided.
In the event that this Plan satisfies the requirements of Code
Sections 401(k), 401(a)(4), or 410(b) only if aggregated with one or
more other plans, or if one or more other plans satisfy the
requirements of such Code sections only if aggregated with this
Plan, then this section shall be applied by determining the Actual
Deferral Percentage of employees as if all such plans were a single
plan. Plans may be aggregated in order to satisfy Code Section
401(k) only if they have the same Plan Year.
For purposes of determining the Actual Deferral Percentage of an
Eligible Participant who is a five-percent owner or one of the ten
most highly-paid Highly Compensated Employees, the Elective Deferral
Contributions (and Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, if used in computing the Actual
Deferral Percentage) and Compensation of such Eligible Participant
include the Elective Deferral Contributions (and, if applicable,
Qualified Nonelective Contributions or Qualified Matching
Contributions, or both) and Compensation for the Plan Year of Family
Members. Family Members, with respect to such Highly Compensated
Employees, shall be disregarded as separate employees in determining
the Actual Deferral Percentage both for Participants who are
Nonhighly Compensated Employees and for Participants who are Highly
Compensated Employees.
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<PAGE> 46
For purposes of determining the Actual Deferral Percentage, Elective
Deferral Contributions, Qualified Nonelective Contributions and
Qualified Matching Contributions must be made before the last day of
the 12-month period immediately following the Plan Year to which
contributions relate.
The Employer shall maintain records sufficient to demonstrate
satisfaction of the Average Actual Deferral Percentage test and the
amount of Qualified Nonelective Contributions or Qualified Matching
Contributions, or both, used in such test.
The determination and treatment of the Contributions used in
computing the Actual Deferral Percentage shall satisfy such other
requirements as may be prescribed by the Secretary of the Treasury.
If the Plan Administrator should determine during the Plan Year that
neither of the above tests is being met, the Plan Administrator may
adjust the amount of future Elective Deferral Contributions of the
Highly Compensated Employees.
Notwithstanding any other provisions of this Plan, Excess
Contributions, plus any income and minus any loss allocable thereto,
shall be distributed no later than the last day of each Plan Year to
Participants to whose Accounts such Excess Contributions were
allocated for the preceding Plan Year. If such excess amounts are
distributed more than 2 1/2 months after the last day of the Plan
Year in which such excess amounts arose, a ten (10) percent excise
tax will be imposed on the employer maintaining the plan with
respect to such amounts. Such distributions shall be made 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 Elective Deferral Contributions (and amounts
treated as Elective Deferral Contributions) of each Family Member
that is combined to determine the combined Actual Deferral
Percentage.
Excess Contributions shall be treated as Annual Additions, as
defined in the CONTRIBUTION LIMITATION SECTION of Article III, under
the Plan.
The Excess Contributions shall be adjusted for income or loss. The
income or loss allocable to such Excess Contributions shall be equal
to the income or loss allocable to the Participant's Elective
Deferral Contributions (and, if applicable, Qualified Nonelective
Contributions or Qualified Matching Contributions, or both) for the
Plan Year in which the excess occurred multiplied by a fraction. The
numerator of the fraction is the Excess Contributions. The
denominator of the fraction is the closing balance without regard to
any income or loss occurring during such Plan Year (as of the end of
such Plan Year) of the Participant's Account resulting from Elective
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<PAGE> 47
Deferral Contributions (and Qualified Nonelective Contributions or
Qualified Matching Contributions, or both, if used in computing the
Actual Deferral Percentage).
Excess Contributions shall be distributed from the Participant's
Account resulting first from Elective Deferral Contributions not the
basis for Matching Contributions, then if necessary, from Elective
Deferral Contributions which are the basis for Matching
Contributions. If such Excess Contributions exceed the balance in
the Participant's Account resulting from Elective Deferral
Contributions, the balance shall be distributed from the
Participant's Account resulting from Qualified Matching
Contributions (if applicable) and Qualified Nonelective
Contributions, respectively.
Any Matching Contributions which were based on the Elective Deferral
Contributions which are distributed as Excess Contributions, plus
any income and minus any loss allocable thereto, shall be forfeited.
These Forfeitures shall be used to offset the earliest Employer
Contribution due after the Forfeiture arises.
d) As of the end of each Plan Year, one of the following tests must be
met:
1) The Average Contribution Percentage for Eligible Participants
who are Highly Compensated Employees for the Plan Year is not
more than the Average Contribution Percentage for Eligible
Participants who are Nonhighly Compensated Employees for the
Plan Year multiplied by 1.25.
2) The Average Contribution Percentage for Eligible Participants
who are Highly Compensated Employees for the Plan Year is not
more than the Average Contribution Percentage for Eligible
Participants who are Nonhighly Compensated Employees for the
Plan Year multiplied by 2 and the difference between the
Average Contribution Percentages is not more than 2.
If one or more Highly Compensated Employees participate in both a
cash or deferred arrangement and a plan subject to the Average
Contribution Percentage test maintained by the Employer or a
Controlled Group member and the sum of the Average Actual Deferral
Percentage and Average Contribution Percentage of those Highly
Compensated Employees subject to either or both tests exceeds the
Aggregate Limit, then the Contribution Percentage of those Highly
Compensated Employees who also participate in a cash or deferred
arrangement will be reduced (beginning with such highly Compensated
Employees whose Contribution Percentage is the highest) so that the
limit is not exceeded. The amount by which each Highly Compensated
Employee's Contribution Percentage is reduced shall be treated as an
Excess Aggregate Contribution. The Average Actual Deferral
Percentage and Average Contribution Percentage of the Highly
Compensated Employees are determined after any corrections required
to meet the Average Actual Deferral
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<PAGE> 48
Percentage and Average Contribution Percentage tests. Multiple use
does not occur if both the Average Actual Deferral Percentage and
Average Contribution Percentage of the Highly Compensated Employees
does not exceed 1.25 multiplied by the Average Actual Deferral
Percentage and Average Contribution Percentage of the Nonhighly
Compensated Employees.
The Contribution Percentage for any Eligible Participant who is a
Highly Compensated Employee for the Plan Year and who is eligible to
have Contribution Percentage Amounts allocated to his account under
two or more plans described in Code Section 401(a) or arrangements
described in Code Section 401(k) that are maintained by the Employer
or a Controlled Group member shall be determined as if the total of
such Contribution Percentage Amounts was made under each plan. If a
Highly Compensated Employee participates in two or more cash or
deferred arrangements that have different Plan Years, all cash or
deferred arrangements ending with or within the same calendar year
shall be treated as a single arrangement. Notwithstanding the
foregoing, certain plans shall be treated as separate if mandatorily
disaggregated under the regulations under Code Section 401(m) or
permissibly disaggregated as provided.
In the event that this Plan satisfies the requirements of Code
Sections 401(m), 401(a)(4), or 410(b) only if aggregated with one or
more other plans, or if one or more other plans satisfy the
requirements of such Code sections only if aggregated with this
Plan, then this section shall be applied by determining the
Contribution Percentages of Eligible Participants as if all such
plans were a single plan. Plans may be aggregated in order to
satisfy Code Section 401(m) only if they have the same Plan Year.
For purposes of determining the Contribution Percentage of an
Eligible Participant who is a five-percent owner or one of the ten
most highly-paid Highly Compensated Employees, the Contribution
Percentage Amounts and Compensation of such Participant shall
include Contribution Percentage Amounts and Compensation for the
Plan Year of Family Members. Family Members, with respect to Highly
Compensated Employees, shall be disregarded as separate employees in
determining the Contribution Percentage both for employees who are
Nonhighly Compensated Employees and for employees who are Highly
Compensated Employees.
For purposes of determining the Contribution Percentage, Participant
Contributions are considered to have been made in the Plan Year in
which contributed to the Plan. Matching Contributions and Qualified
Nonelective Contributions will be considered made for a Plan Year if
made no later than the end of the 12-month period beginning on the
day after the close of the Plan Year.
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<PAGE> 49
The Employer shall maintain records sufficient to demonstrate
satisfaction of the Average Contribution Percentage test and the
amount of Qualified Nonelective Contributions or Qualified Matching
Contributions, or both, used in such test.
The determination and treatment of the Contribution Percentage of
any Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
Notwithstanding any other provisions of this Plan, Excess Aggregate
Contributions, plus any income and minus any loss allocable thereto,
shall be forfeited, if not vested, or distributed, if vested, no
later than the last day of each Plan Year to Participants to whose
Accounts such Excess Aggregate Contributions were allocated for the
preceding Plan Year. Excess Aggregate Contributions of Participants
who are subject to the family member aggregation rules shall be
allocated among the Family Members in proportion to the Employee and
Matching Contributions (or amounts treated as Matching
Contributions) of each Family Member that is combined to determine
the combined Contribution Percentage. 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, as defined in the CONTRIBUTION
LIMITATION SECTION of Article III, under the Plan.
The Excess Aggregate Contributions shall be adjusted for income or
loss. The income or loss allocable to such Excess Aggregate
Contributions shall be equal to the income or loss allocable to the
Participant's Contribution Percentage Amounts for the Plan Year in
which the excess occurred multiplied by a fraction. The numerator of
the fraction is the Excess Aggregate Contributions. The denominator
of the fraction is the closing balance without regard to any income
or loss occurring during such Plan Year (as of the end of such Plan
Year) of the Participant's Account resulting from Contribution
Percentage Amounts.
Excess Aggregate Contributions shall be distributed from the
Participant's Account resulting from Participant Contributions that
are not required as a condition of employment or participation or
for obtaining additional benefits from Employer Contributions. If
such Excess Aggregate Contributions exceed the balance in the
Participant's Account resulting from such Participant Contributions,
the balance shall be forfeited, if not vested, or distributed, if
vested, on a pro-rata basis from the Participant's Account resulting
from Contribution Percentage Amounts. These Forfeitures shall be
used to offset the earliest Employer Contribution due after the
Forfeiture arises.
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ARTICLE IV
INVESTMENT OF CONTRIBUTIONS
SECTION 4.01--INVESTMENT OF CONTRIBUTIONS.
All Contributions are forwarded by the Employer to the Insurer to be
deposited under the Group Contract or forwarded to the Trustee to be deposited
in the Trust Fund.
Investment of Contributions is governed by the provisions of the Trust,
the Group Contract and any other funding arrangement in which the Trust Fund is
or may be invested. To the extent permitted by the Trust, Group Contract or
other funding arrangement, the parties named below shall direct the
Contributions to any of the accounts available under the Trust or Group Contract
and may request the transfer of assets resulting from those Contributions
between such accounts. A Participant may not direct the Trustee to invest the
Participant's Account in collectibles. Collectibles means any work of art, rug
or antique, metal or gem, stamp or coin, alcoholic beverage or other tangible
personal property specified by the Secretary of Treasury. To the extent that a
Participant does not direct the investment of his Account, such Account shall be
invested ratably in the accounts available under the Trust or Group Contract in
the same manner as the undirected Accounts of all other Participants. The Vested
Accounts of all Inactive Participants may be segregated and invested separately
from the Accounts of all other Participants.
The Trust Fund shall be valued at current fair market value as of the last
day of the last calendar month ending in the Plan Year and, at the discretion of
the Trustee, may be valued more frequently. The valuation shall take into
consideration investment earnings credited, expenses charged, payments made and
changes in the value of the assets held in the Trust Fund. The Account of a
Participant shall be credited with its share of the gains and losses of the
Trust Fund. That part of a Participant's Account invested in a funding
arrangement which establishes an account or accounts for such Participant
thereunder shall be credited with the gain or loss from such account or
accounts. That part of a Participant's Account which is invested in other
funding arrangements shall be credited with a proportionate share of the gain or
loss of such investments. The share shall be determined by multiplying the gain
or loss of the investment by the ratio of the part of the Participant's Account
invested in such funding arrangement to the total of the Trust Fund invested in
such funding arrangement.
At least annually, the Named Fiduciary shall review all pertinent Employee
information and Plan data in order to establish the funding policy of the Plan
and to determine appropriate methods of carrying out the Plan's objectives. The
Named Fiduciary shall inform the Trustee and any Investment Manager of the
Plan's short-term and long-term financial needs so the investment policy can be
coordinated with the Plan's financial requirements.
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<PAGE> 51
a) Employer Contributions other than Elective Deferral Contributions:
The Participant shall direct the investment of such Employer
Contributions and transfer of assets resulting from those
Contributions.
b) Elective Deferral Contributions: The Participant shall direct the
investment of Elective Deferral Contributions and transfer of assets
resulting from those Contributions.
c) Participant Contributions: The Participant shall direct the
investment of Participant Contributions and transfer of assets
resulting from those Contributions.
d) Rollover Contributions: The Participant shall direct the investment
of Rollover Contributions and transfer of assets resulting from
those Contributions.
However, the Named Fiduciary may delegate to the Investment Manager
investment discretion for Contributions and Plan assets which are not subject to
Participant direction.
SECTION 4.01A--INVESTMENT IN QUALIFYING EMPLOYER SECURITIES.
Participants in the Plan shall be entitled to invest in Qualifying
Employer Securities.
Once investment in Qualifying Employer Securities is made available to
Eligible Employees, then it shall continue to be available unless the Plan and
Trust is amended to disallow such available investment.
Participants shall be entitled to elect to have their Elective Deferral
Contributions and other portions of their Accounts invested in Qualifying
Employer Securities. In the absence of such election, such Eligible Employees
shall be deemed to have elected to have their Accounts invested wholly in the
Investment Funds. Once an election is made, it shall be considered to continue
until a new election is made. An Eligible Employee may elect to have any portion
of his Elective Deferral Contributions which corresponds to an integral
percentage of his Compensation to be invested in Qualifying Employer Securities.
If an Eligible Employee elects to have his Elective Deferral Contributions
withheld in Qualifying Employer Securities, then the Matching Contribution
associated with such Elective Deferral Contributions will be invested in
Qualifying Employer Securities.
If the securities of the Employer are not publicly traded and if no market
or an extremely thin market exists for the Qualifying Employer Securities, so
that a reasonable valuation may not be obtained from the marketplace, then such
Qualifying Employer Securities must be valued at least annually by an
independent appraiser who is not associated with the Employer, the Plan
Administrator, the Trustee, or any person related to any fiduciary under the
Plan. The independent appraiser may be associated with a person who is merely a
contract administrator with respect to the Plan, but who exercises no
discretionary authority and is not a Plan fiduciary.
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If there is a public market for Qualifying Employer Securities of the
type held by the Plan, then the Plan Administrator may use as the value of the
shares the price at which such shares traded in such market, or an average of
the bid and asked prices for such shares in such market, provided that such
value is representative of the fair market value of such shares in the opinion
of the Plan Administrator. If the Qualifying Employer Securities do not trade on
the annual valuation date or if the market is very thin on such date, then the
Plan Administrator may use the average of trade prices for a period of time
ending on such date, provided that such value is representative of the fair
market value of such shares in the opinion of the Plan Administrator.
For purposes of determining the annual valuation of the Plan and for
reporting to Participants and regulatory authorities, the assets of the Plan
shall be valued at least annually on the Valuation Date which corresponds to the
last day of the Plan Year. The fair market of Qualifying Employer Securities
shall be determined on such a Valuation Date. The average of the bid and asked
prices of Qualifying Employer Securities as of the date of the transaction shall
apply for purposes of valuing distributions and other transactions of the Plan
to the extent such value is representative of the Fair Market Value of such
shares in the opinion of the Plan Administrator.
All purchases of Qualifying Employer Securities shall be made at a
price, or prices, which, in the judgment of the Plan Administrator, do not
exceed the fair market value of such Qualifying Employer Securities.
In the event that the Trustee acquires shares of Qualifying Employer
Securities by purchase from a "disqualified person" as defined in Code Section
4975(e)(2), in exchange for cash or other assets of the Trust, the terms of such
purchase shall contain the provision that in the event that there is a final
determination by the Internal Revenue Service or court of competent jurisdiction
that the fair market value of such shares of Qualifying Employer Security as of
the date of purchase was less than the purchase price paid by the Trustee, then
the seller shall pay or transfer, as the case may be, to the Trustee an amount
of cash, shares of Qualifying Employer Security, or any combination thereof
equal in value to the difference between the purchase price and said fair market
value for all such shares. In the event that cash and/or shares of Qualifying
Employer Security are paid and/or transferred to the Trustee under this
provision, shares of Qualifying Employer Security shall be valued at their fair
market value as of the date of said purchase, and interest at a reasonable rate
from the date of purchase to the date of payment shall be paid by the seller on
the amount of cash paid.
The Plan Administrator may direct the Trustee to sell, resell or
otherwise dispose of Qualifying Employer Securities to any person, including the
Employer, provided that any such sales to any disqualified person, including the
Employer, will be made at not less than the fair market value and no commission
is charged. Any such sale shall be made in conformance with Section 408(e) of
ERISA.
In the event the Plan Administrator directs the Trustee to dispose of
any Qualifying Employer Securities held as Trust Assest under circumstances
which require registration and/or qualification of the securities under
applicable Federal or state securities laws, then the Employer, at its own
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expense, will take or cause to be taken any and all such action as may be
necessary or appropriate to effect such registration and/or qualification.
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ARTICLE V
BENEFITS
SECTION 5.01 --RETIREMENT BENEFITS.
On a Participant's Retirement Date, his Vested Account shall be
distributed to him according to the distribution of benefits provisions of
Article VI and the provisions of the SMALL AMOUNTS SECTION of Article IX.
SECTION 5.02--DEATH BENEFITS.
If a Participant dies before his Annuity Starting Date, his Vested
Account shall be distributed according to the distribution of benefits
provisions of Article VI and the provisions of the SMALL AMOUNTS SECTION of
Article IX.
SECTION 5.03--VESTED BENEFITS.
A Participant may receive a distribution of his Vested Account at any
time after he ceases to be an Employee, provided he has not again become an
Employee. If such amount is not payable under the provisions of the SMALL
AMOUNTS SECTION of Article IX, it will be distributed only if the Participant so
elects. The Participant's election shall be subject to the requirements in the
ELECTION PROCEDURES SECTION of Article VI for a qualified election of a
retirement benefit.
If a Participant does not receive an earlier distribution according to
the provisions of this section or the SMALL AMOUNTS SECTION of Article IX, upon
his Retirement Date or death, his Vested Account shall be applied according to
the provisions of the RETIREMENT BENEFITS SECTION or the DEATH BENEFITS SECTION
of Article V.
The Nonvested Account of a Participant who has ceased to be an Employee
shall remain a part of his Account until it becomes a Forfeiture; provided,
however, if the Participant again becomes an Employee so that his Vesting
Percentage can increase, the Nonvested Account may become a part of his Vested
Account.
SECTION 5.04--WHEN BENEFITS START.
Benefits under the Plan begin when a Participant retires, dies or
ceases to be an Employee, whichever applies, as provided in the preceding
sections of this article. Benefits which begin before Normal Retirement Date for
a Participant who became Totally and Permanently Disabled when he was an
Employee shall be deemed to begin because he is Totally and Permanently
Disabled. The start of benefits is subject to the qualified election procedures
of Article VI.
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Unless otherwise elected, benefits shall begin before the sixtieth day
following the close of the Plan Year in which the latest date below occurs:
a) The date the Participant attains age 65 or (Normal Retirement
Age, if earlier).
b) The tenth anniversary of the Participant's Entry Date.
c) The date the Participant ceases to be an Employee.
Notwithstanding the foregoing, the failure of a Participant and spouse
to consent to a distribution while a benefit is immediately distributable,
within the meaning of the ELECTION PROCEDURES SECTION of Article VI, shall be
deemed to be an election to defer commencement of payment of any benefit
sufficient to satisfy this section.
The Participant may elect to have his benefits begin after the latest
date for beginning benefits described above, subject to the provisions of this
section. The Participant shall make the election in writing and deliver the
signed statement of election to the Plan Administrator before Normal Retirement
Date or the date he ceases to be an Employee, if later. The election must
describe the form of distribution and the date the benefits will begin. The
Participant shall not elect a date for beginning benefits or a form of
distribution that would result in a benefit payable when he dies which would be
more than incidental within the meaning of governmental regulations.
Benefits shall begin by the Participant's Required Beginning Date, as
defined in the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION REQUIREMENTS
SECTION of Article VI.
Contributions which are used to compute the Actual Deferral Percentage,
as defined in the EXCESS AMOUNTS SECTION of Article III, may be distributed upon
disposition by the Employer of substantially all of the assets (within the
meaning of Code Section 409(d)(3)) used by the Employer in a trade or business
or disposition by the Employer of the Employer's interest in a subsidiary
(within the meaning of Code Section 409(d)(3)) if the transferee corporation is
not a Controlled Group member, the Employee continues employment with the
transferee corporation and the transferor corporation continues to maintain the
Plan. Such distributions made after March 31, 1988, must be made in a single
sum.
SECTION 5.05--WITHDRAWAL PRIVILEGES.
A Participant may withdraw that part of his Vested Account resulting
from his Voluntary Contributions. A Participant may make only two such
withdrawals in any 12-month period.
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A Participant who has attained age 59 1/2 may withdraw all or any
portion of his Vested Account which results from the following Contributions:
Elective Deferral Contributions
Matching Contributions
Discretionary Contributions
Rollover Contributions
A Participant may make only two such withdrawals in any 12-month period.
A Participant may withdraw all or any portion of his Vested Account
which results from the following Contributions
Elective Deferral Contributions
in the event of hardship due to an immediate and heavy financial need.
Withdrawals from the Participant's Account resulting from Elective Deferral
Contributions shall be limited to the amount of the Participant's Elective
Deferral Contributions. Immediate and heavy financial need shall be limited to:
(i) expenses incurred or necessary for medical care, described in Code Section
213(d), of the Participant, the Participant's spouse, or any dependents of the
Participant (as defined in Code Section 152); (ii) purchase (excluding mortgage
payments) of a principal residence for the Participant; (iii) payment of tuition
and related educational fees and the payment of room and board expenses for the
next 12 months of post-secondary education for the Participant, his spouse,
children or dependents; (iv) the need to prevent the eviction of the Participant
from his principal residence or foreclosure on the mortgage of the Participant's
principal residence; or (v) any other distribution which is deemed by the
Commissioner of Internal Revenue to be made on account of immediate and heavy
financial need as provided in Treasury regulations. The Participant's request
for a withdrawal shall include his written statement that an immediate and heavy
financial need exists and explain its nature.
No withdrawal shall be allowed which is in excess of the amount
required to relieve the financial need or if such need can be satisfied from
other resources that are reasonably available to the Participant. The amount of
an immediate and heavy financial need may include any amount necessary to pay
any Federal, state or local income taxes or penalties reasonably anticipated to
result from the distribution. The Participant's request for a withdrawal shall
include his written statement that the amount requested does not exceed the
amount needed to meet the financial need. The Participant's request for a
withdrawal shall include his written statement that the need cannot be relieved:
(i) through reimbursement or compensation by insurance or otherwise; (ii) by
reasonable liquidation of the Participant's assets, to the extent such
liquidation would not itself cause immediate and heavy financial need (iii) by
cessation of elective contributions or employee contributions under the Plan; or
(iv) by other distributions or nontaxable (at the time of the loan) loans
currently available from plans maintained by the Employer or any other employer,
or by borrowing from commercial sources on reasonable commercial terms.
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A request for withdrawal shall be in writing on a form furnished for
that purpose and delivered to the Plan Administrator before the withdrawal is to
occur. The Participant's request shall be subject to the requirements in the
ELECTION PROCEDURES SECTION of Article VI for a qualified election of a
retirement benefit payable in a form other than a Qualified Joint and Survivor
Form.
A forfeiture shall not occur solely as a result of a withdrawal.
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ARTICLE VI
DISTRIBUTION OF BENEFITS
SECTION 6.01 --AUTOMATIC FORMS OF DISTRIBUTION.
Unless a qualified election of an optional form of benefit has been
made within the election period (see the ELECTION PROCEDURES SECTION of Article
VI), the automatic form of benefit payable to or on behalf of a Participant is
determined as follows:
a) The automatic form of retirement benefit for a Participant who
does not die before his Annuity Starting Date shall be the
Qualified Joint and Survivor Form.
b) The automatic form of death benefit for a Participant who dies
before his Annuity Starting Date shall be:
1) A Qualified Preretirement Survivor Annuity for a
Participant who has a spouse to whom he has been
continuously married throughout the one-year period
ending on the date of his death. The spouse may elect
to start receiving the death benefit on any first day
of the month on or after the Participant dies and
before the date the Participant would have been age
70 1/2. If the spouse dies before benefits start, the
Participant's Vested Account, determined as of the
date of the spouse's death, shall be paid to the
spouse's Beneficiary.
2) A single-sum payment to the Participant's Beneficiary
for a Participant who does not have a spouse who is
entitled to a Qualified Preretirement Survivor
Annuity.
Before a death benefit will be paid on account of the death of
a Participant who does not have a spouse who is entitled to a
Qualified Preretirement Survivor Annuity, it must be
established to the satisfaction of a plan representative that
the Participant does not have such a spouse.
SECTION 6.02--OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION
REQUIREMENTS.
a) For purposes of this section, the following terms are defined:
Applicable Life Expectancy means Life Expectancy (or Joint and
Last Survivor Expectancy) calculated using the attained age of
the Participant (or Designated Beneficiary) as of the
Participant's (or Designated Beneficiary's) birthday in the
applicable calendar year reduced by one for each calendar year
which has elapsed
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since the date Life Expectancy was first calculated. If Life
Expectancy is being recalculated, the Applicable Life
Expectancy shall be the Life Expectancy so recalculated. The
applicable calendar year shall be the first Distribution
Calendar Year, and if Life Expectancy is being recalculated
such succeeding calendar year.
Designated Beneficiary means the individual who is designated
as the beneficiary under the Plan in accordance with Code
Section 401(a)(9) and the regulations thereunder.
Distribution Calendar Year means a calendar year for which a
minimum distribution is required. For distributions beginning
before the Participant's death, the first Distribution
Calendar Year is the calendar year immediately preceding the
calendar year which contains the Participant's Required
Beginning Date. For distributions beginning after the
Participant's death, the first Distribution Calendar Year is
the calendar year in which distributions we required to begin
pursuant to (e) below.
Joint and Last Survivor Expectancy means joint and last
survivor expectancy computed by use of the expected return
multiples Table VI of section 1.72-9 of the Income Tax
Regulations.
Unless otherwise elected by the Participant (or spouse, in the
case of distributions described in (e)(2)(ii) below) by the
time distributions are required to begin, life expectancies
shall be recalculated annually. Such election shall be
irrevocable as to the Participant (or spouse) and shall apply
to all subsequent years. The life expectancy of a nonspouse
Beneficiary may not be recalculated.
Life Expectancy means life expectancy computed by use of the
expected return multiples in Tables V of section 1.72-9 of the
Income Tax Regulations.
Unless otherwise elected by the Participant (or spouse, in the
case of distributions described in (e)(2)(ii) below) by the
time distributions are required to begin, life expectancies
shall be recalculated annually. Such election shall be
irrevocable as to the Participant (or spouse) and shall apply
to all subsequent years. The life expectancy of nonspouse
Beneficiary may not be recalculated.
Participant's Benefit means
1) The Account Balance as of the last valuation date in
the calendar year immediately preceding the
Distribution Calendar Year (valuation calendar year)
increased by the amount of any contributions or
forfeitures allocated to the Account balance as of
the dates in the valuation calendar year after the
valuation date and decreased by distributions made in
the valuation calendar year after the valuation date.
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2) For purposes of (1) above, if any portion of the
minimum distribution for the first Distribution
Calendar Year is made in the second Distribution
Calendar Year on or before the Required Beginning
Date, the amount of the minimum distribution made in
the second Distribution Calendar Year shall be
treated as if it had been made in the immediately
preceding Distribution Calendar Year.
Required Beginning Date means, for a Participant, the first
day of April of the calendar year following the calendar year
in which the Participant attains age 70 1/2, unless otherwise
provided in (1), (2) or (3) below:
1) The Required Beginning Date for a Participant who attains
age 70 1/2 before January 1, 1988, and who is not a 5-percent
owner is the first day of April of the calendar year following
the calendar year in which the later of retirement or
attainment of age 70 1/2 occurs.
2) The Required Beginning Date for a Participant who
attains age 70 1/2 before January 1, 1988, and who is
a 5-percent owner is the first day of April of the
calendar year following the later of
i) the calendar year in which the Participant
attains age 70 1/2, or
ii) the earlier of the calendar year with or
within which ends the Plan Year in which the
Participant becomes a 5-percent owner, or
the calendar year in which the Participant
retires.
3) The Required Beginning Date of a Participant who is
not a 5-percent owner and who attains age 70 1/2
during 1988 and who has not retired as of January 1,
1989, is April 1, 1990.
A Participant is treated as a 5-percent owner for purposes of
this section if such Participant is a 5-percent owner as
defined in Code Section 416(i) (determined in accordance with
Code Section 416 but without regard to whether the Plan is
top-heavy) at any time during the Plan Year ending with or
within the calendar year in which such owner attains age 66
1/2 or any subsequent Plan Year.
Once distributions have begun to a 5-percent owner under this
section, they must continue to be distributed, even if the
Participant ceases to be a 5-percent owner in a subsequent
year.
b) The optional forms of retirement benefit shall be the
following: a straight life annuity; single life annuities with
certain periods of five, ten or fifteen years; a single life
annuity with installment refund; survivorship life annuities
with installment
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refund and survivorship percentages of 50, 66 2/3 or 100;
fixed period annuities for any period of whole months which is
not less than 60 and does not exceed the Life Expectancy of
the Participant and the named Beneficiary as provided in (d)
below where the Life Expectancy is not recalculated; and a
series of installments chosen by the Participant with a
minimum payment each year beginning with the year the
Participant turns age 70 1/2. The payment for the first year
in which a minimum payment is required will be made by April 1
of the following calendar year. The payment for the second
year and each successive year will be made by December 31 of
that year. The minimum payment will be based on a period equal
to the Joint and Last Survivor Expectancy of the Participant
and the Participant's spouse, if any, as provided in (d) below
where the Joint and Last Survivor Expectancy is recalculated.
The balance of the Participant's Vested Account, if any, will
be payable on the Participant's death to his Beneficiary in a
single sum. The Participant may also elect to receive his
Vested Account in a single-sum payment.
Election of an optional form is subject to the qualified
election provisions of Article VI.
Any annuity contract distributed shall be nontransferable. The
terms of any annuity contract purchased and distributed by the
Plan to a Participant or spouse shall comply with the
requirements of this Plan.
c) The optional forms of death benefit are a single-sum payment
and any annuity that is an optional form of retirement
benefit. However, a series of installments shall not be
available if the Beneficiary is not the spouse of the deceased
Participant.
d) Subject to the AUTOMATIC FORMS OF DISTRIBUTION SECTION of
Article VI, joint and survivor annuity requirements, the
requirements of this section shall apply to any distribution
of a Participant's interest and will take precedence over any
inconsistent provisions of this Plan. Unless otherwise
specified, the provisions of this section apply to calendar
years beginning after December 31, 1984.
All distributions required under this section shall be
determined and made in accordance with the proposed
regulations under Code Section 401(a)(9), including the
minimum distribution incidental benefit requirement of section
1.401(a)(9)-2 of the proposed regulations.
The entire interest of a Participant must be distributed or
begin to be distributed no later than the Participant's
Required Beginning Date.
As of the first Distribution Calendar Year, distributions, if
not made in a single sum, may only be made over one of the
following periods (or combination thereof):
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1) the life of the Participant,
2) the life of the Participant and a Designated
Beneficiary,
3) a period certain not extending beyond the Life
Expectancy of the Participant, or
4) a period certain not extending beyond the Joint and
Last Survivor Expectancy of the Participant and a
Designated Beneficiary.
If the Participant's interest is to be distributed in other
than a single sum, the following minimum distribution rules
shall apply on or after the Required Beginning Date:
5) Individual account:
i) If a Participant's Benefit is to be
distributed over
a) a period not extending beyond the
Life Expectancy of the Participant
or the Joint Life and Last Survivor
Expectancy of the Participant and
the Participant's Designated
Beneficiary or
b) a period not extending beyond the
Life Expectancy of the Designated
Beneficiary,
the amount required to be distributed for
each calendar year beginning with the
distributions for the first Distribution
Calendar Year, must be at least equal to the
quotient obtained by dividing the
Participant's Benefit by the Applicable Life
Expectancy.
ii) For calendar years beginning before January
1, 1989, if the Participant's spouse is not
the Designated Beneficiary, the method of
distribution selected must assure that at
least 50% of the present value of the amount
available for distribution is paid within
the Life Expectancy of the Participant.
iii) For calendar years beginning after December
31, 1988, the amount to be distributed each
year, beginning with distributions for the
first Distribution Calendar Year shall not
be less than the quotient obtained by
dividing the Participant's Benefit by the
lesser of
a) the Applicable Life Expectancy or
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b) if the Participant's spouse is not
the Designated Beneficiary, the
applicable divisor determined from
the table set forth in Q&A-4 of
section 1.401(a)(9)-2 of the
proposed regulations.
Distributions after the death of the
Participant shall be distributed using the
Applicable Life Expectancy in (5)(i) above
as the relevant divisor without regard to
proposed regulations section 1.401(a)(9)-2.
iv) The minimum distribution required for the
Participant's first Distribution Calendar
Year must be made on or before the
Participant's Required Beginning Date. The
minimum distribution for the Distribution
Calendar Year for other calendar years,
including the minimum distribution for the
Distribution Calendar Year in which the
Participant's Required Beginning Date
occurs, must be made on or before December
31 of that Distribution Calendar Year.
6) Other forms:
i) If the Participant's Benefit is distributed
in the form of an annuity purchased from an
insurance company, distributions thereunder
shall be made in accordance with the
requirements of Code Section 401(a)(9) and
the proposed regulations thereunder.
e) Death distribution provisions:
1) Distribution beginning before death. If the
Participant dies after distribution of his interest
has begun, the remaining portion of such interest
will continue to be distributed at least as rapidly
as under the method of distribution being used prior
to the Participant's death.
2) Distribution beginning after death. If the
Participant dies before distribution of his interest
begins, distribution of the Participant's entire
interest shall be completed by December 31 of the
calendar year containing the fifth anniversary of the
Participant's death except to the extent that an
election is made to receive distributions in
accordance with (i) or (ii) below:
i) if any portion of the Participant's interest
is payable to a Designated Beneficiary,
distributions may be made over the life or
over a period certain not greater than the
Life Expectancy of the Designated
Beneficiary commencing on or before December
31 of the calendar year immediately
following the calendar year in which the
Participant died;
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ii) if the Designated Beneficiary is the
Participant's surviving spouse, the date
distributions are required to begin in
accordance with (i) above shall not be
earlier than the later of
a) December 31 of the calendar year
immediately following the calendar
year in which the Participant died
and
b) December 31 of the calendar year in
which the Participant would have
attained age 70 1/2.
If the Participant has not made an election pursuant
to this (e)(2) by the time of his death, the
Participant's Designated Beneficiary must elect the
method of distribution no later than the earlier of
iii) December 31 of the calendar year in which
distributions would be required to begin
under this subparagraph, or
iv) December 31 of the calendar year which
contains the fifth anniversary of the date
of death of the Participant.
If the Participant has no Designated Beneficiary, or
if the Designated Beneficiary does not elect a method
of distribution, distribution of the Participant's
entire interest must be completed by December 31 of
the calendar year containing the fifth anniversary of
the Participant's death.
3) For purposes of (e)(2) above, if the surviving spouse
dies after the Participant, but before payments to
such spouse begin, the provisions of (e)(2) above,
with the exception of (e)(2)(ii) therein, shall be
applied as if the surviving spouse were the
Participant.
4) For purposes of this (e), any amount paid to a child
of the Participant will be treated as if it had been
paid to the surviving spouse if the amount becomes
payable to the surviving spouse when the child
reaches the age of majority.
5) For purposes of this (e), distribution of a
Participant's interest is considered to begin on the
Participant's Required Beginning Date (or if (e)(3)
above is applicable, the date distribution is
required to begin to the surviving spouse pursuant to
(e)(2) above). If distribution in the form of an
annuity irrevocably commences to the Participant
before the Required Beginning Date, the date
distribution is considered to begin is the date
distribution actually commences.
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SECTION 6.03--ELECTION PROCEDURES.
The Participant, Beneficiary, or spouse shall make any election under
this section in writing. The Plan Administrator may require such individual to
complete and sign any necessary documents as to the provisions to be made. Any
election permitted under (a) and (b) below shall be subject to the qualified
election provisions of (c) below.
a) Retirement Benefits. A Participant may elect his Beneficiary
or Contingent Annuitant and may elect to have retirement
benefits distributed under any of the optional forms of
retirement benefit described in the OPTIONAL FORMS OF
DISTRIBUTION AND DISTRIBUTION REQUIREMENTS SECTION of Article
VI.
b) Death Benefits. A Participant may elect his Beneficiary and
may elect to have death benefits distributed under any of the
optional forms of death benefit described in the OPTIONAL
FORMS OF DISTRIBUTION AND DISTRIBUTION REQUIREMENTS SECTION of
Article VI.
If the Participant has not elected an optional form of
distribution for the death benefit payable to his Beneficiary,
the Beneficiary may, for his own benefit, elect the form of
distribution, in like manner as a Participant.
The Participant may waive the Qualified Preretirement Survivor
Annuity by naming someone other than his spouse as
Beneficiary.
In lieu of the Qualified Preretirement Survivor Annuity
described in the AUTOMATIC FORMS OF DISTRIBUTION SECTION of
Article VI, the spouse may, for his own benefit, waive the
Qualified Preretirement Survivor Annuity by electing to have
the benefit distributed under any of the optional forms of
death benefit described in the OPTIONAL FORMS OF DISTRIBUTION
AND DISTRIBUTION REQUIREMENTS SECTION of Article VI.
c) Qualified Election. The Participant, Beneficiary or spouse may
make an election at any time during the election period. The
Participant, Beneficiary or spouse may revoke the election
made (or make a new election) at any time and any number of
times during the election period. An election is effective
only if it meets the consent requirements below.
The election period as to retirement benefits is the 90-day
period ending on the Annuity Starting Date. An election to
waive the Qualified Joint and Survivor Form may not be made
before the date he is provided with the notice of the ability
to waive the Qualified Joint and Survivor Form. If the
Participant elects the series of installments, he may elect on
any later date to have the balance of his Vested
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Account paid under any of the optional forms of retirement
benefit available under the Plan. His election period for this
election is the 90-day period ending on the Annuity Starting
Date for the optional form of retirement benefit elected.
A Participant may make an election as to death benefits at any
time before he dies. The spouse's election period begins on
the date the Participant dies and ends on the date benefits
begin. The Beneficiary's election period begins on the date
the Participant dies and ends on the date benefits begin. An
election to waive the Qualified Preretirement Survivor Annuity
may not be made by the Participant before the date he is
provided with the notice of the ability to waive the Qualified
Preretirement Survivor Annuity. A Participant's election to
waive the Qualified Preretirement Survivor Annuity which is
made before the first day of the Plan Year in which he reaches
age 35 shalt become invalid on such date. An election made by
a Participant after he ceases to be an Employee will not
become invalid on the first day of the Plan Year in which he
reaches age 35 with respect to death benefits from that part
of his Account resulting from Contributions made before he
ceased to be an Employee.
If the Participant's Vested Account has at any time exceeded
$3500, any benefit which is (1) immediately distributable or
(2) payable in a form other than a Qualified Joint and
Survivor Form or a Qualified Preretirement Survivor Annuity
requires the consent of the Participant and the Participant's
spouse (or where either the Participant or spouse has died,
the survivor). The consent of the Participant or spouse to a
benefit which is immediately distributable must not be made
before the date the Participant or spouse is provided with the
notice of the ability to defer the distribution. Such consent
shall be made in writing. The consent shall not be made more
than 90 days before the Annuity Starting Date. Spousal consent
is not required for a benefit which is immediately
distributable in a Qualified Joint and Survivor Form.
Furthermore, if spousal consent is not required because the
Participant is electing an optional form of retirement benefit
that is not a life annuity pursuant to (d) below, only the
Participant need consent to the distribution of a benefit
payable in a form that is not a life annuity and which is
immediately distributable. Neither the consent of the
Participant nor the Participant's spouse shall be required to
the extent that a distribution is required to satisfy Code
Section 401 (a)(9) or Code Section 415. In addition, upon
termination of this Plan if the Plan does not offer an annuity
option (purchased from a commercial provider), the
Participant's Account balance may, without the Participant's
consent, be distributed to the Participant or transferred to
another defined contribution plan (other than an employee
stock ownership plan as defined in Code Section 4975(e)(7))
within the same Controlled Group. A benefit is immediately
distributable if any part of the benefit could be distributed
to the Participant (or surviving spouse) before the
Participant attains (or would have attained if not deceased)
the older of Normal Retirement Age or age 62. If the Qualified
Joint and Survivor Form is waived, the spouse has the right to
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consent only to a specific Beneficiary or a specific form of
benefit. The spouse can relinquish one or both such rights.
Such consent shall be made in writing. The consent shall not
be made more than 90 days before the Annuity Starting Date. If
the Qualified Preretirement Survivor Annuity is waived, the
spouse has the right to limit consent only to a specific
Beneficiary. Such consent shall be in writing. The spouse's
consent shall be witnessed by a plan representative or notary
public. The spouse's consent must acknowledge the effect of
the election, including that the spouse had the right to limit
consent only to a specific Beneficiary or a specific form of
benefit, if applicable, and that the relinquishment of one or
both such rights was voluntary. Unless the consent of the
spouse expressly permits designations by the Participant
without a requirement of further consent by the spouse, the
spouse's consent must be limited to the form of benefit, if
applicable, and the Beneficiary (including any Contingent
Annuitant), class of Beneficiaries, or contingent Beneficiary
named in the election. Spousal consent is not required,
however, if the Participant establishes to the satisfaction of
the plan representative that the consent of the spouse cannot
be obtained because there is no spouse or the spouse cannot be
located. A spouse's consent under this paragraph shall not be
valid with respect to any other spouse. A Participant may
revoke a prior election without the consent of the spouse. Any
new election will require a new spousal consent, unless the
consent of the spouse expressly permits such election by the
Participant without further consent by the spouse. A spouse's
consent may be revoked at any time within the Participant's
election period.
d) Special Rule for Profit Sharing Plan. As provided in the
preceding provisions of the Plan, if a Participant has a
spouse to whom he has been continuously married throughout the
one-year period ending on the date of his death, the
Participant's Vested Account shall be paid to such spouse.
However, if there is no such spouse or if the surviving spouse
has already consented in a manner conforming to the qualified
election requirements in (c) above, the Vested Account shall
be payable to the Participant's Beneficiary in the event of
the Participant's death.
The Participant may waive the spousal death benefit described
above at any time provided that no such waiver shall be
effective unless it satisfies the conditions of (c) above
(other than the notification requirement referred to therein)
that would apply to the Participant's waiver of the Qualified
Preretirement Survivor Annuity.
Because this is a profit sharing plan which pays death
benefits as described above, this subsection (d) applies if
the following condition is met: with respect to the
Participant, this Plan is not a direct or indirect transferee
after December 31, 1984, of a defined benefit plan, money
purchase plan (including a target plan), stock bonus plan or
profit sharing plan which is subject to the survivor annuity
requirements of Code Section 401 (a)(11) and Code Section 417.
If the above condition is met, spousal consent is not required
for electing a benefit payable in a form that is not a
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life annuity. If the above condition is not met, the consent
requirements of this article shall be operative.
SECTION 6.04--NOTICE REQUIREMENTS.
a) Optional forms of retirement benefit. The Plan Administrator
shall furnish to the Participant and the Participant's spouse
a written explanation of the optional forms of retirement
benefit in the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION
REQUIREMENTS SECTION of Article VI, including the material
features and relative values of these options, in a manner
that would satisfy the notice requirements of Code Section
417(a)(3) and the right of the Participant and the
Participant's spouse to defer distribution until the benefit
is no longer immediately distributable. The Plan Administrator
shall furnish the written explanation by a method reasonably
calculated to reach the attention of the Participant and the
Participant's spouse no less than 30 days and no more than 90
days before the Annuity Starting Date.
b) Qualified Joint and Survivor Form. The Plan Administrator
shall furnish to the Participant a written explanation of the
following: the terms and conditions of the Qualified Joint and
Survivor Form; the Participant's right to make, and the effect
of, an election to waive the Qualified Joint and Survivor
Form; the rights of the Participant's spouse; and the right to
revoke an election and the effect of such a revocation. The
Plan Administrator shall furnish the written explanation by a
method reasonably calculated to reach the attention of the
Participant no less than 30 days and no more than 90 days
before the Annuity Starting Date.
After the written explanation is given, a Participant or
spouse may make written request for additional information.
The written explanation must be personally delivered or mailed
(first class mail, postage prepaid) to the Participant or
spouse within 30 days from the date of the written request.
The Plan Administrator does not need to comply with more than
one such request by a Participant or spouse.
The Plan Administrator's explanation shall be written in
nontechnical language and will explain the terms and
conditions of the Qualified Joint and Survivor Form and the
financial effect upon the Participant's benefit (in terms of
dollars per benefit payment) of electing not to have benefits
distributed in accordance with the Qualified Joint and
Survivor Form.
c) Qualified Preretirement Survivor Annuity. As required by the
Code and Federal regulation, the Plan Administrator shall
furnish to the Participant a written explanation of the
following: the terms and conditions of the Qualified
Preretirement Survivor Annuity; the Participant's right to
make, and the effect of, an election to waive the Qualified
Preretirement Survivor Annuity; the rights of the
Participant's
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spouse; and the right to revoke an election and the effect of
such a revocation. The Plan Administrator shall furnish the
written explanation by a method reasonably calculated to reach
the attention of the Participant within the applicable period.
The applicable period for a Participant is whichever of the
following periods ends last:
1) the period beginning one year before the date the
individual becomes a Participant and ending one year
after such date; or
2) the period beginning one year before the date the
Participant's spouse is first entitled to a Qualified
Preretirement Survivor Annuity and ending one year
after such date.
If such notice is given before the period beginning with the
first day of the Plan Year in which the Participant attains
age 32 and ending with the close of the Plan Year preceding
the Plan Year in which the Participant attains age 35, an
additional notice shall be given within such period. If a
Participant ceases to be an Employee before attaining age 35,
an additional notice shall be given within the period
beginning one year before the date he ceases to be an Employee
and ending one year after such date.
After the written explanation is given, a Participant or
spouse may make written request for additional information.
The written explanation must be personally delivered or mailed
(first class mail, postage prepaid) to the Participant or
spouse within 30 days from the date of the written request.
The Plan Administrator does not need to comply with more than
one such request by a Participant or spouse.
The Plan Administrator's explanation shall be written in
nontechnical language and will explain the terms and
conditions of the Qualified Preretirement Survivor Annuity and
the financial effect upon the spouse's benefit (in terms of
dollars per benefit payment) of electing not to have benefits
distributed in accordance with the Qualified Preretirement
Survivor Annuity.
SECTION 6.05--DISTRIBUTIONS UNDER QUALIFIED DOMESTIC RELATIONS
ORDERS.
The Plan specifically permits distributions to an alternate payee under
a qualified domestic relations order, as defined in Code Section 414(p), at any
time, irrespective of whether the Participant has attained his earliest
retirement age, as defined in Code Section 414(p), under the Plan. A
distribution to an Alternate Payee before the Participant's attainment of
earliest retirement age, as defined in Code Section 414(p), is available only
if:
a) the order specifies distributions at that time or permits an
agreement between the Plan and the alternate payee to
authorize an earlier distribution; and
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b) if the present value of the Alternate Payee's benefits under
the Plan exceeds $3,500, and the order requires, the Alternate
Payee consents to any distribution occurring before the
Participant's attainment of earliest retirement age, as
defined in Code Section 414(p).
Nothing in this section shall permit a Participant a right to receive a
distribution at a time otherwise not permitted under the Plan nor shall it
permit the Alternate Payee to receive a form of payment not permitted under the
Plan.
The Plan Administrator shall establish reasonable procedures to
determine the qualified status of a domestic relations order. Upon receiving a
domestic relations order, the Plan Administrator promptly shall notify the
Participant and an Alternate Payee named in the order, in writing, of the
receipt of the order and the Plan's procedures for determining the qualified
status of the order. Within a reasonable period of time after receiving the
domestic relations order, the Plan Administrator shall determine the qualified
status of the order and shall notify the Participant and each Alternate Payee,
in writing, of its determination. The Plan Administrator shall provide notice
under this paragraph by mailing to the individual's address specified in the
domestic relations order, or in a manner consistent with Department of Labor
regulations. The Plan Administrator may treat as qualified any domestic
relations order entered before January 1, 1985, irrespective of whether it
satisfies all the requirements described in Code Section 414(p).
If any portion of the Participant's Vested Account is payable during
the period the Plan Administrator is making its determination of the qualified
status of the domestic relations order, a separate accounting shall be made of
the amount payable. If the Plan Administrator determines the order is a
qualified domestic relations order within 18 months of the date amounts are
first payable following receipt of the order, the payable amounts shall be
distributed in accordance with the order. If the Plan Administrator does not
make its determination of the qualified status of the order within the 18 month
determination period, the payable amounts shall be distributed in the manner the
Plan would distribute if the order did not exist and the order shall apply
prospectively if the Plan Administrator later determines the order is a
qualified domestic relations order.
The Plan shall make payments or distributions required under this
section by separate benefit checks or other separate distribution to the
Alternate Payee(s).
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ARTICLE VII
TERMINATION OF PLAN
The Employer expects to continue the Plan indefinitely but reserves the
right to terminate the Plan in whole or in part at any time upon giving written
notice to all parties concerned. Complete discontinuance of Contributions under
the Plan constitutes complete termination of Plan.
The Account of each Participant shall be fully (100%) vested and
nonforfeitable as of the effective date of complete termination of Plan. The
Account of each Participant who is included in the group of Participants deemed
to be affected by the partial termination of the Plan shall be fully (100%)
vested and nonforfeitable as of the effective date of the partial Plan
termination. The Participant's Account shall continue to participate in the
earnings credited, expenses charged and any appreciation or depreciation of the
Investment Fund until the Vested Account is distributed. A distribution under
this article will be a retirement benefit and shall be distributed to the
Participant according to the provisions of Article VI.
A Participant's Account which does not result from Contributions which
are used to compute the Actual Deferral Percentage, as defined in the EXCESS
AMOUNTS SECTION of Article III, may be distributed to the Participant after the
effective date of the complete or partial Plan termination. A Participant's
Account resulting from Contributions which are used to compute such percentage
may be distributed upon termination of the Plan without the establishment or
maintenance of another defined contribution plan, other than an employee stock
ownership plan (as defined in Code Section 4975(e) or Code Section 409) or a
simplified employee pension plan (as defined in Code Section 408(k)). Such a
distribution made after March 31, 1988, must be in a single sum.
Upon complete termination of Plan, no more Employees shall become
Participants and no more Contributions shall be made.
The assets of this Plan shall not be paid to the Employer at any time,
except that, after the satisfaction of all liabilities under the Plan, any
assets remaining may be paid to the Employer. The payment may not be made if it
would contravene any provision of law.
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ARTICLE VIII
ADMINISTRATION OF PLAN
SECTION 8.01 --ADMINISTRATION.
Subject to the provisions of this article, Plan Administrator has
complete control of the administration of the Plan. The Plan Administrator has
all the powers necessary for it to properly carry out its administrative duties.
Not in limitation, but in amplification of the foregoing, the Plan Administrator
has the power to construe the Plan, including ambiguous provisions, and to
determine all questions that may arise under the Plan, including all questions
relating to the eligibility of Employees to participate in the Plan and the
amount of benefit to which any Participant, Beneficiary, spouse or Contingent
Annuitant may become entitled. The Plan Administrator's decisions upon all
matters within the scope of its authority shall be final.
Unless otherwise set out in the Plan or Group Contract, the Plan
Administrator may delegate recordkeeping and other duties which are necessary
for the administration of the Plan to any person or firm which agrees to accept
such duties. The Plan Administrator shall be entitled to rely upon all tables,
valuations, certificates and reports furnished by the consultant or actuary
appointed by the Plan Administrator and upon all opinions given by any counsel
selected or approved by the Plan Administrator.
The Plan Administrator shall receive all claims for benefits by
Participants, former Participants, Beneficiaries, spouses, and Contingent
Annuitants. The Plan Administrator shall determine all facts necessary to
establish the right of any Claimant to benefits and the amount of those benefits
under the provisions of the Plan. The Plan Administrator may establish rules and
procedures to be followed by Claimants in filing claims for benefits, in
furnishing and verifying proofs necessary to determine age, and in any other
matters required to administer the Plan.
Except as provided for hereinafter, the Plan Administrator shall direct
the Trustee as to the exercise of all voting powers over any shares of
Qualifying Employer Securities. Effective for Plan Years beginning after
December 31, 1991, each Participant shall be entitled to direct the Trustee as
to the exercise of all voting powers over shares allocated to his Account that
are Registration Type Qualifying Employer Securities. The participant shall be
entitled to direct the Trustee as to the manner in which the voting rights will
be exercised over shares allocated to his Account that are not Registration Type
Qualifying Employer Securities with respect to any corporate manner which
involves the voting of such shares allocated to the Participant's Account with
respect to the approval or disapproval of any corporate merger or consolidation,
recapitalization, reclassification, liquidation, dissolution, sale of
substantially all assets of a trade or business, or such similar transaction as
may be prescribed in Treasure Regulations.
In the event that a tender offer is made for some or all of the shares
of the Employer, each Participant shall have the right to direct whether those
shares allocated to his Account, whether or
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not vested, shall be tendered. This right shall be exercised in the manner set
forth herein. In the absence of a written directive from or election by a
Participant to the Plan Administrator, the Plan Administrator shall direct the
Trustee not to tender such shares. Because the choice is to be given to the
Participants, the Plan Administrator and the Trustee shall not have fiduciary
responsibility with respect to the decision to tender or not or whether to
tender all of such shares or only a portion thereof.
In order to facilitate the decision of Participants whether to tender
their shares in a tender offer (or how many shares to tender), the Plan
Administrator shall provide election forms for the Participants, whereby they
may elect to tender or not and whereby they may elect to tender all or a portion
of such shares. Unless otherwise limited by Federal securities law, such
election may be made or changed at any time prior to the date before the
expiration date of the tender offer (with extension); any election or change in
election must be received by the Plan Administrator, or a designated
representative of the Plan Administrator, on or before the day preceding the
expiration date of the tender offer (with extensions, if any). The Plan
Administrator may develop procedures to facilitate Participants' choices, such
as the use of facsimile transmissions for Employees located in areas physically
remote from the Plan Administrator. The election shall be binding on the Plan
Administrator and the Trustee. The Plan Administrator shall make every effort to
distribute the notice of the tender, election forms and other communications
related to the tender offer to all Participants as soon as practicable following
the announcement of the tender offer, including mailing such notice and form to
Participants and posting such notice in places designed to be reviewed by
Participants.
As to shares which are not allocated to the Accounts of any
Participant, all such shares (in the aggregate) shall be tendered or not as the
majority of the shares held by Participants and directed by Participants are
tendered or not. The Plan Administrator shall direct the Trustee to tender all
such unallocated shares or not, in accordance with the elections of the
Participants having an allocation of a majority of the shares under the Plan.
SECTION 8.02--RECORDS.
All acts and determinations of the Plan Administrator shall be duly
recorded. All these records, together with other documents necessary for the
administration of the Plan, shall be preserved in the Plan Administrator's
custody.
Writing (handwriting, typing, printing), photostating, photographing,
microfilming, magnetic impulse, mechanical or electrical recording or other
forms of data compilation shall be acceptable means of keeping records.
SECTION 8.03--INFORMATION AVAILABLE.
Any Participant in the Plan or any Beneficiary may examine copies of
the Plan description, latest annual report, any bargaining agreement, this Plan,
the Group Contract or any other instrument
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under which the Plan was established or is operated. The Plan Administrator
shall maintain all of the items listed in this section in its office, or in such
other place or places as it may designate in order to comply with governmental
regulations. These items may be examined during reasonable business hours. Upon
the written request of a Participant or Beneficiary receiving benefits under the
Plan, the Plan Administrator will furnish him with a copy of any of these items.
The Plan Administrator may make a reasonable charge to the requesting person for
the copy.
SECTION 8.04--CLAIM AND APPEAL PROCEDURES.
A Claimant must submit any required forms and pertinent information
when making a claim for benefits under the Plan.
If a claim for benefits under the Plan is denied, the Plan
Administrator shall provide adequate written notice to the Claimant whose claim
for benefits under the Plan has been denied. The notice must be furnished within
90 days of the date that the claim is received by the Plan Administrator. The
Claimant shall be notified in writing within this initial 90-day period if
special circumstances require an extension of time needed to process the claim
and the date by which the Plan Administrator's decision is expected to be
rendered. The written notice shall be furnished no later than l80 days after the
date the claim was received by the Plan Administrator.
The Plan Administrator's notice to the Claimant shall specify the
reason for the denial; specify references to pertinent Plan provisions on which
denial is based; describe any additional material and information needed for the
Claimant to perfect his claim for benefits; explain why the material and
information is needed; inform the Claimant that any appeal he wishes to make
must be made in writing to the Plan Administrator within 60 days after receipt
of the Plan Administrator's notice of denial of benefits and that failure to
make the written appeal within such 60-day period shall render the Plan
Administrator's determination of such denial final, binding and conclusive.
If the Claimant appeals to the Plan Administrator, the Claimant, or his
authorized representative, may submit in writing whatever issues and comments
the Claimant, or his representative, feels are pertinent. The Claimant, or his
authorized representative may review pertinent Plan documents. The Plan
Administrator shall reexamine all facts related to the appeal and make a final
determination as to whether the denial of benefits is justified under the
circumstances. The Plan Administrator shall advise the Claimant of its decision
within 60 days of his written request for review, unless special circumstances
(such as a hearing) would make rendering a decision within the 60-day limit
unfeasible. The Claimant must be notified within the 60-day limit if an
extension is necessary. The Plan Administrator shall render a decision on a
claim for benefits no later than 120 days after the request for review is
received.
SECTION 8.05--UNCLAIMED VESTED ACCOUNT PROCEDURE.
At the time the Participant's Vested Account is distributable to the
Participant, spouse or Beneficiary without his consent according to the
provisions of Article VI or Article IX, the Plan
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Administrator, by certified or registered mail addressed to his last known
address and in accordance with the notice requirements of Article VI, will
notify him of his entitlement to a benefit. If the Participant, spouse or
Beneficiary fails to claim the Vested Account or make his whereabouts known in
writing within six months from the date of mailing the notice, the Plan
Administrator may treat such unclaimed Vested Account as a forfeiture and apply
it according to the forfeiture provisions of Article III. If Article III
contains no forfeiture provisions, such amount will be applied to reduce the
earliest Employer Contributions due after the forfeiture arises.
If a Participant's Vested Account is forfeited according to the
provisions of the above paragraph and the Participant, his spouse or his
Beneficiary at any time make a claim for benefits, the forfeited Vested Account
shall be reinstated, unadjusted for any gains or losses occurring after the date
it was forfeited. The reinstated Vested Account shall then be distributed to the
Participant, spouse or Beneficiary according to the preceding provisions of the
Plan.
SECTION 8.06--DELEGATION OF AUTHORITY.
All or any part of the administrative duties and responsibilities under
this article may be delegated by the Plan Administrator to a retirement
committee. The duties and responsibilities of the retirement committee shall be
set out in a separate written agreement.
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ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01 --AMENDMENTS.
The Employer may amend this Plan at any time, including any remedial
retroactive changes (within the specified period of time as may be determined by
Internal Revenue Service regulations) to comply with the requirements of any law
or regulation issued by any governmental agency to which the Employer is
subject. An amendment may not diminish or adversely affect any accrued interest
or benefit of Participants or their Beneficiaries or eliminate an optional form
of distribution with respect to benefits attributable to service before the
amendment nor allow reversion or diversion of Plan assets to the Employer at any
time, except as may be necessary to comply with the requirements of any law or
regulation issued by any governmental agency to which the Employer is subject.
No amendment to this Plan shall be effective to the extent that it has the
effect of decreasing a Participant's accrued benefit. However, a Participant's
Account may be reduced to the extent permitted under Code Section 412(c)(8). For
purposes of this paragraph, a Plan amendment which has the elect of decreasing a
Participant's Account or eliminating an optional form of benefit, with respect
to benefits attributable to service before the amendment shall be treated as
reducing an accrued benefit. Furthermore, if the vesting schedule of the Plan is
amended, in the case of an Employee who is a Participant as of the later of the
date such amendment is adopted or the date it becomes effective, the
nonforfeitable percentage (determined as of such date) of such Employee's
employer-derived accrued benefit will not be less than his percentage computed
under the Plan without regard to such amendment.
An amendment shall not decrease a Participant's vested interest in the
Plan. If an amendment to the Plan, or a deemed amendment in the case of a change
in top-heavy status of the Plan as provided in the MODIFICATION OF VESTING
REQUIREMENTS SECTION of Article X, changes the computation of the percentage
used to determine tha portion of a Participant's Account attributable to
Employer Contributions which is nonforfeitable (whether directly or indirectly),
each Participant or former Participant
a) who has completed at least three years of Service on the date
the election period described below ends (five Years of
Service if the Participant does not have at least one
Hour-of-Service in a Plan Year beginning after December 31,
1988) and
b) whose nonforfeitable percentage will be determined on any date
after the date of the change
may elect, during the election period, to have the nonforfeitable percentage of
his Account that results from Employer Contributions determined without regard
to the amendment. This election may not be revoked. An election does not need to
be provided for any Participant or former Participant whose nonforfeitable
percentage, determined according to the Plan provisions as
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changed, cannot at any time be less than the percentage determined without
regard to such change. The election period shall begin no later than the date
the Plan amendment is adopted, or deemed adopted in the case of a change in the
top-heavy status of the Plan, and end no earlier than the sixtieth day after the
latest of the date the amendment is adopted (deemed adopted) or becomes
effective, or the date the Participant is issued written notice of the amendment
(deemed amendment) by the Employer or the Plan Administrator.
SECTION 9.02--DIRECT ROLLOVERS.
This section applies to distributions made on or after January 1, 1993.
Notwithstanding any provision of the Plan to the contrary that would otherwise
limit a Distributee's election under this section, a Distributee may elect, at
the time and in the manner prescribed by the Plan Administrator, to have any
portion of an Eligible Rollover Distribution paid directly to an Eligible
Retirement Plan, specified by the Distributee, in a Direct Rollover.
SECTION 9.03--MERGERS AND DIRECT TRANSFERS.
The Plan may not be merged or consolidated with, nor have its assets or
liabilities transferred to, any other retirement plan unless each Participant in
the plan would (if the plan then terminated) receive a benefit immediately after
the merger, consolidation or transfer which is equal to or greater than the
benefit the Participant would have been entitled to receive immediately before
the merger, consolidation or transfer (if this Plan had then terminated). The
Employer may enter into merger agreements or direct transfer of assets
agreements with the employers under other retirement plans which are qualifiable
under Code Section 401(a), including an elective transfer, and may accept the
direct transfer of plan assets, or may transfer plan assets, as a party to any
such agreement. The Employer shall not consent to, or be a party to a merger,
consolidation or transfer of assets with a defined benefit plan if such action
would result in a defined benefit feature being maintained under this Plan.
The Plan may accept a direct transfer of plan assets on behalf of an
Eligible Employee. If the Eligible Employee is not an Active Participant when
the transfer is made, the Eligible Employee shall be deemed to be an Active
Participant only for the purpose of investment and distribution of the
transferred assets. Employer Contributions shall not be made for or allocated to
the Eligible Employee until the time he meets all of the requirements to become
an Active Participant.
The Plan shall hold, administer and distribute the transferred assets
as a part of the Plan. The Plan shall maintain a separate account for the
benefit of the Employee on whose behalf the Plan accepted the transfer in order
to reflect the value of the transferred assets. Unless a transfer of assets to
the Plan is an elective transfer, the Plan shall apply the optional forms of
benefit protections described in the AMENDMENTS SECTION of Article IX to all
transferred assets. A transfer is elective if: 1) the transfer is voluntary,
under a fully informed election by the Participant; (2) the Participant has an
alternative that retains his Code Section 411 (d)(6) protected benefits
(including an option to leave his benefit in the transferor plan, if that plan
is not terminating); (3) if the
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transferor plan is subject to Code Sections 401(a)(11) and 417, the transfer
satisfies the applicable spousal consent requirements of the Code; (4) the
notice requirements under Code Section 417, requiring a written explanation with
respect to an election not to receive benefits in the form of a qualified joint
and survivor annuity, are met with respect to the Participant and spousal
transfer election; (5) the Participant has a right to immediate distribution
from the transferor plan under provisions in the plan not inconsistent with Code
Section 401(a); (6) the transferred benefit is equal to the Participant's entire
nonforfeitable accrued benefit under the transferor plan, calculated to be at
least the greater of the single sum distribution provided by the transfer or
plan (if any) or the present value of the Participant's accrued benefit under
the transferor plan payable at the plan's normal retirement age and calculated
using an interest rate subject to the restrictions of Code Section 417(e) and
subject to the overall limitations of Code Section 415 (7) the Participant has a
100% nonforfeitable interest in the transferred benefit; and (8) the transfer
otherwise satisfies applicable Treasury regulations.
SECTION 9.04--PROVISIONS RELATING TO THE INSURER AND OTHER PARTIES.
The obligations of an Insurer shall be governed solely by the
provisions of the Group Contact. The Insurer shall not be required to perform
any act not provided in or contrary to the provisions of the Group Contract. See
the CONSTRUCTION SECTION of this article.
Any issuer or distributor of investment contracts or securities is
governed solely by the terms of its policies, written investment contract,
prospectuses, security instruments, and any other written agreements entered
into with the Trustee.
Such Insurer, issuer or distributor is not a party to the Plan, nor
bound in any way by the Plan provisions. Such partes shall not be required to
look to the terms of this Plan, nor to determine whether the Employer, the Plan
Administrator, the Trustee, or the Named Fiduciary have the authority to act in
any particular manner or to make any contract or agreement.
Until notice of any amendment or termination of this Plan or a change
in Trustee has been received by the Insurer at its home office or an issuer or
distributor at their principal address, they are and shall be fully protected in
assuming that the Plan has not been amended or terminated and in dealing with
any party acting as Trustee according to the latest information which they have
received at their home office or principal address.
SECTION 9.05--EMPLOYMENT STATUS.
Nothing contained in this Plan gives an Employee the right to be
retained in the Employer's employ or to interfere with the Employer's right to
discharge any Employee.
SECTION 9.06--RIGHTS TO PLAN ASSETS.
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No Employee shall have any right to or interest in any assets on the
Plan upon termination of his employment or otherwise except as specifically
provided under this Plan, and then only to the extent of the benefits payable to
such Employee in accordance with Plan provisions.
Any final payment or distribution to a Participant or his legal
representative or to any Beneficiaries, spouse or Contingent Annuitant of such
Participant under the Plan provisions shall be in full satisfaction of all
claims against the Plan, the Named Fiduciary, the Plan Administrator, the
Trustee, the Insurer, and the Employer arising under or by virtue of the Plan.
SECTION 9.07--BENEFICIARY.
Each Participant may name a Beneficiary to receive any death benefit
(other than any income payable to a Contingent Annuitant) that may arise out of
his participation in the Plan. The Participant may change his Beneficiary from
time to time. Unless a qualified election has been made, for purposes of
distributing any death benefits before Retirement Date, the Beneficiary of a
Participant who has a spouse who is entitled to a Qualified Preretirement
Survivor Annuity shall be the Participant's spouse. The Participant's
Beneficiary designation and any change of Beneficiary shall be subject to the
provisions of the ELECTION PROCEDURES SECTION of Article VI. It is the
responsibility of the Participant to give written notice to the Insurer of the
name of the Beneficiary on a form furnished for that purpose.
With the Employer's consent, the Plan Administrator may maintain
records of Beneficiary designations for Participants before their Retirement
Dates. In that event, the written notice designations made by Participants shall
be filed with the Plan Administrator. If a Participant dies before his
Retirement Date, the Plan Administrator shall certify to the Insurer the
Beneficiary designation on its records for the Participant.
If, at the death of a Participant, there is no Beneficiary named or
surviving, any death benefit under the Group Contract shall be paid under the
applicable provisions of the Group Contract.
SECTION 9.08--NONALIENATION OF BENEFITS.
Benefits payable under the Plan are not subject to the claims of any
creditor of any Participant, Beneficiary, spouse or Contingent Annuity. A
Participant, Beneficiary, spouse or Contingent Annuitant does not have any
rights to alienate, anticipate, commute, pledge, encumber or assign any of such
benefits. The preceding sentences shall also apply to the creation, assignment,
or recognition of a right to any benefit payable with respect to a Participant
according to a domestic relations order, unless such order is determined by the
Plan Administrator to be a qualified domestic relations order, as defined in
Code Section 414(p), or any domestic relations order entered before January 1,
1985.
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SECTION 9.09--CONSTRUCTION.
The validity of the Plan or any of its provisions is determined under
and construed according to Federal law and, to the extent permissible, according
to the laws of the state in which the Employer has its principal office. In case
any provision of this Plan is held illegal or invalid for any reason, such
determination shall not affect the remaining provisions of this Plan, and the
Plan shall be construed and enforced as if the illegal or invalid provision had
never been included.
In the event of any conflict between the provisions of the Plan and the
terms of any contract or policy issued hereunder, the provisions of the Plan
control the operation and administration of the Plan.
SECTION 9.10--LEGAL ACTIONS.
The Plan, the Plan Administrator, the Trustee and the Named Fiduciary
are the necessary parties to any action or proceeding involving the assets held
with respect to the Plan or administration of the Plan or Trust. No person
employed by the Employer, no Participant, former Participant or their
Beneficiaries or any other person having or claiming to have an interest in the
Plan is entitled to any notice of process. A final judgment entered in any such
action or proceeding shall be binding and conclusive on all persons having or
claiming to have an interest in the Plan.
SECTION 9.11 --SMALL AMOUNTS.
If the Vested Account of a Participant has never exceeded $3,500, the
entire Vested Account shall be payable in a single sum as of the earliest of his
Retirement Date, the date he dies, or the date he ceases to be an Employee for
any other reason. This is a small amounts payment. If a small amount is payable
as of the date the Participant dies, the small amounts payment shall be made to
the Participant's Beneficiary (spouse if the death benefit is payable to the
spouse). If a small amounts payment is payable while the Participant is living,
the small amounts payment shall be made to the Participant. The small amounts
payment is in full settlement of all benefits otherwise payable.
No other small amounts payments shall be made.
SECTION 9.12--WORD USAGE.
The masculine gender, where used in this Plan, shall include the
feminine gender and the singular words as used in this Plan may include the
plural, unless the context indicates otherwise.
SECTION 9.13--TRANSFERS BETWEEN PLANS.
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If an Employee previously participated in another plan of the Employer
which credited service under the elapsed time method for any purpose which under
this Plan is determined using the hours method, then the Employee's service
shall be equal to the sum of (a), (b) and (c) below:
a) The number of whole years of service credited to him under the
other plan as of the date he became an Eligible Employee under
this Plan.
b) One year or a part of a year of service for the applicable
service period in which he became an Eligible Employee if he
is credited with the required number of Hours-of-Service. If
the Employer does not have sufficient records to determine the
Employee's actual Hours-of-Service in that part of the
service period before the date he became an Eligible Employee,
the Hours-of-Service shall be determined using an equivalency.
For any month in which he would be required to be credited
with one Hour-of-Service, the Employee shall be deemed for
purposes of this section to be credited with 190
Hours-of-Service.
c) The Empbyee's service determined under this Plan using the
hours method after the end of the applicable service period in
which he became an Eligible Employee.
If an Employee previously participated in another plan of the Employer
which credited service under the hours method for any purpose which under this
Plan is determined using the elapsed time method, then the Employee's service
shall be equal to the sum of (d), (e) and (f) below:
d) The number of whole years of service credited to him under the
other plan as of the beginning of the applicable service
period under that plan in which he became an Eligible Employee
under this Plan.
e) The greater of (1) the service that would be credited to him
for that entire service period using the elapsed time method
or (2) the service credited to him under the other plan as of
the date he became an Eligible Employee under this Plan.
f) The Employee's service determined under this Plan using the
elapsed time method after the end of the applicable service
period under the other plan in which he became an Eligible
Employee.
Any modification of service contained in this Plan shall be applicable
to the service determined pursuant to this section.
If the Employee previously participated in the plan of a Controlled
Group member which credited service under a different method than is used in
this Plan, for purposes of determining eligibility and vesting the provisions
above shall apply as though the plan of the Controlled Group member were a plan
of the Employer.
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ARTICLE X
TOP-HEAVY PLAN REQUIREMENTS
SECTION 10.01--APPLICATION.
The provisions of this article shall supersede all other provisions in
the Plan to the contrary.
For the purpose of applying the Top-heavy Plan requirements of this
article, all members of the Controlled Group shall be treated as one Employer.
The term Employer as used in this article shall be deemed to include all members
of the Controlled Group unless the term as used clearly indicates only the
Employer is meant.
The accrued benefit or account of a participant which results from
deductible voluntary contributions shall not be included for any purpose under
this article.
The minimum vesting and contribution provisions of the MODIFICATION OF
VESTING REQUIREMENTS and MODIFICATION OF CONTRIBUTIONS SECTIONS of Article X
shall not apply to any Employee who is included in a group of Employees covered
by a collective bargaining agreement which the Secretary of Labor finds to be a
collective bargaining agreement between employee representatives and one or more
employers, including the Employer, if there is evidence that retirement benefits
were the subject of good faith bargaining between such representatives. For this
purpose, the term "employee representatives" does not include any organization
more than half of whose members are employees who are owners, officers, or
executives.
SECTION 10.02--DEFINITIONS.
The following terms are defined for purposes of this article.
Aggregation Group means
a) each of the Employer's retirement plans in which a Key
Employee is a participant during the Year containing the
Determination Date or one of the four preceding Years,
b) each of the Employer's other retirement plans which allows the
plan(s) described in (a) above to meet the nondiscrimination
requirement of Code Section 401(a)(4) or the minimum coverage
requirement of Code Section 410, and
c) any of the Employer's other retirement plans not included in
(a) or (b) above which the Employer desires to include as part
of the Aggregation Group. Such a retirement
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plan shall be included only if the Aggregation Group would
continue to satisfy the requirements of Code Section 401(a)(4)
and Code Section 410.
The plans in (a) and (b) above constitute the "required" Aggregation Group. The
plans in (a), (b) and (c) above constitute the "permissive" Aggregation Group.
Compensation means, as to an Employee for any period, compensation as defined in
the CONTRIBUTION LIMITATION SECTION of Article III. For purposes of determining
who is a Key Employee, Compensation shall include, in addition to compensation
as defined in the CONTRIBUTION LIMITATION SECTION of Article III, elective
contributions. Elective contributions are amounts which are excludible from the
Employee's gross income under Code Sections 125, 402(e)(3), 402(h) or 403(b),
and contributed by the Employer, at the Employee's election, to a Code Section
401(k) arrangement, a simplified employee pension, cafeteria plan or
tax-sheltered annuity.
For purposes of Compensation as defined in this section, Compensation shall be
limited in the same manner and in the same time as the Compensation defined in
the DEFINITION SECTION of Article I.
Determination Date means as to this Plan for any Year, the last day of the
preceding Year. However, if there is no preceding Year, the Determination Date
is the last day of such Year.
Key Employee means any Employee or former Employee (including Beneficiaries of
deceased Employees) who at any time during the determination period was
a) one of the Employer's officers (subject to the maximum below)
whose Compensation (as defined in this section) for the Year
exceeds 50 percent of the dollar limitation under Code Section
415(b)(1)(A),
b) one of the ten Employees who owns (or is considered to own,
under Code Section 318) more than a half percent ownership
interest and one of the largest interests in the Employer
during any Year of the determination period if such person's
Compensation (as defined in this section) for the Year exceeds
the dollar limitation under Code Section 415(c)(1)(A),
c) a five-percent owner of the Employer, or
d) a one-percent owner of the Employer whose Compensation (as
defined in this section) for the Year is more than $150,000.
Each member of the Controlled Group shall be treated as a separate employer for
purposes of determining ownership in the Employer.
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The determination period is the Year containing the Determination Date and the
four preceding Years. If the Employer has fewer than 30 Employees, no more than
three Employees shall be treated as Key Employees because they are officers. If
the Employer has between 30 and 500 employees, no more than ten percent of the
Employer's Employees (if not an integer, increased to the next integer) shall be
treated as Key Employees because they are officers. In no event will more than
50 Employees be treated as Key Employees because they are officers if the
Employer has 500 or more Employees. The number of Employees for any Plan Year is
the greatest number of Employees during the determination period. Officers who
are employees described in Code Section 414(q)(8) shall be excluded. If the
Employer has more than the maximum number of officers to be treated as Key
Employees, the officers shall be ranked by amount of annual Compensation (as
defined in this section), and those with the greater amount of annual
Compensation during the determination period shall be treated as Key Employees.
To determine the ten Employees owning the largest interests in the Employer, if
more than one Employee has the same ownership interest, the Employee(s) having
the greater annual Compensation shall be treated as owning the larger
interests). The determination of who is a Key Employee shall be made according
to Code Section 416(i)(1) and the regulations thereunder
Non-key Employee means a person who is a non-key employee within the meaning of
Code Section 416 and regulations thereunder.
Present Value means the present value of a participant's accrued benefit under a
defined benefit plan as of his normal retirement age (attained age if later) or,
if the plan provides non-proportional subsidies, the age at which the benefit is
most valuable. The accrued benefit of any Employee (other than a Key Employee)
shall be determined under the method which is used for accrual purposes for all
plans of the Employer or if there is no one method which is used for accrual
purposes for all plans of the Employer, as if such benefit accrued not more
rapidly than the slowest accrual rate permitted under Code Section 41l(b)(1)(C).
For purposes of establishing Present Value, any benefit shall be discounted only
for 7.5% interest and mortality according to the 1971 Group Annuity Table (Male)
without the 7% margin but with projection by Scale E from 1971 to the later of
(a) 1974, or (b) the year determined by adding the age to 1920, and wherein for
females the male age six years younger is used. If the Present Value of accrued
benefits is determined for a participant under more than one defined benefit
plan included in the Aggregation Group, all such plans shall use the same
actuarial assumptions to determine the Present Value.
Top-heavy Plan means a plan which is a top-heavy plan for any plan year
beginning after December 31, 1981. This Plan shall be a Top-heavy Plan if
a) the Top-heavy Ratio for this Plan alone exceeds 60 percent and
this Plan is not part of any required Aggregation Group or
permissive Aggregation Group.
b) this Plan is a part of a required Aggregation Group, but not
part of a permissive Aggregation Group, and the Top-heavy
Ratio for the required Aggregation Group exceeds 60 percent.
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c) this Plan is a part of a required Aggregation Group and part
of a permissive Aggregation Group and the Top-heavy Ratio for
the permissive Aggregation Group exceeds 60 percent.
Top-heavy Ratio means the ratio calculated below for this Plan or for the
Aggregation Group.
a) If the Employer maintains one or more defined contribution
plans (including any simplified employee pension plan) and the
Employer has not maintained any defined benefit plan which
during the five-year period ending on the determination date
has or has had accrued benefits, the Top-heavy Ratio for this
Plan alone or for the required or permissive Aggregation Group
as appropriate is a fraction, the numerator of which is the
sum of the account balances of all Key Employees as of the
determination date and the denominator of which is the sum of
all account balances of all employees as of the determination
date. Both the numerator and denominator of the Top-heavy
Ratio are adjusted for any distribution of an account balance
(including those made from terminated plan(s) of the Employer
which would have been part of the required Aggregation Group
had such plan(s) not been terminated) made in the five-year
period ending on the determination date. Both the numerator
and denominator of the Top-heavy Ratio are increased to
reflect any contribution not actually made as of the
Determination Date, but which is required to be taken into
account on that date under Code Section 416 and the
regulations thereunder.
b) If the Employer maintains one or more defined contribution
plans (including any simplified employee pension plan) and the
Employer maintains or has maintained one or more defined
benefit plans which during the five-year period ending on the
determination date has or has had accrued benefits, the
Top-heavy Ratio for any required or permissive Aggregation
Group as appropriate is a fraction, the numerator of which is
the sum of the account balances under the defined contribution
plan(s) of all Key Employees and the Present Value of accrued
benefits under the defined benefit plan(s) for all Key
Employees, and the denominator of which is the sum of the
account balances under the defined contribution plan(s) for
all employees and the Present Value of accrued benefits under
the defined benefit plans for all employees. Both the
numerator and denominator of the Top-heavy Ratio are adjusted
for any distribution of an account balance or an accrued
benefit (including those made from terminated plan(s) of the
Employer which would have been part of the required
Aggregation Group had such plan(s) not been terminated) made
in the five-year period ending on the determination date.
c) For purposes of (a) and (b) above, the value of account
balances and the Present Value of accrued benefits will be
determined as of the most recent valuation date that falls
within or ends with the 12-month period ending on the
determination date, except as provided in Code Section 416 and
the regulations thereunder for the first and second plan years
of a defined benefit plan. The account balances and accrued
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benefits of an employee who is not a Key Employee but who was
a Key Employee in a prior year will be disregarded. The
calculation of the Top-heavy Ratio and the extent to which
distributions, rollovers and transfers during the five-year
period ending on the determination date are to be taken into
account, shall be determined according to the provisions of
Code Section 416 and regulations thereunder. The account
balances and accrued benefits of an individual who has
performed no service for the Employer during the five-year
period ending on the determination date shall be excluded from
the Top-heavy Ratio until the time the individual again
performs service for the Employer. Deductible employee
contributions will not be taken into account for purposes of
computing the Top-heavy Ratio. When aggregating plans, the
value of account balances and accrued benefits will be
calculated with reference to the determination dates that fall
within the same calendar year.
Account, as used in this definition, means the value of an employee's account
under one of the Employer's retirement plans on the latest valuation date. In
the case of a money purchase plan or target benefit plan, such value shall be
adjusted to include any contributions made for or by the employee after the
valuation date and on or before such determination date or due to be made as of
such determination date but not yet forwarded to the insurer or trustee. In the
case of a profit sharing plan, such value shall be adjusted to include any
contributions made for or by the employee after the valuation date and on or
before such determination date. During the first Year of any profit sharing plan
such adjustment in value shall include contributions made after such
determination date that are allocated as of a date in such Year. The
nondeductible employee contributions which an employee makes under a defined
benefit plan of the Employer shall be treated as if they were contributions
under a separate defined contribution plan.
Valuation Date means, as to this Plan, the last day of the last calendar month
ending in a Year.
Year means the Plan Year unless another year is specified by the Employer in a
separate written resolution in accordance with regulations issued by the
Secretary of the Treasury or his delegate.
SECTION 10.03--MODIFICATION OF VESTING REQUIREMENTS.
If a Participant's Vesting Percentage determined under Article I is not
at least as great as his Vesting Percentage would be if it were determined under
a schedule permitted in Code Section 416, the following shall apply. During any
Year in which the Plan is a Top-heavy Plan, the Participant's Vesting Percentage
shall be the greater of the Vesting Percentage determined under Article I or the
schedule below.
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VESTING SERVICE NONFORFEITABLE
(whole years) PERCENTAGE
Less than 2 0
2 20
3 40
4 60
5 80
6 or more 100
The schedule above shall not apply to Participants who are not credited
with an Hour-of-Service after the Plan first becomes a Top-heavy Plan. The
Vesting Percentage determined above applies to all of the Participant's Account
resulting from Employer Contributions, including Contributions the Employer
makes before the TEFRA Compliance Date or when the Plan is not a Top-heavy Plan.
If, in a later Year, this Plan is not a Top-heavy Plan, a Participant's
Vesting Percentage shall be determined under Article I. A Participant's Vesting
Percentage determined under either Article I or the schedule above shall never
be reduced and the election procedures of the AMENDMENTS SECTION of Article IX
shall apply when changing to or from the schedule as though the automatic change
were the result of an amendment.
The part of the Participant's Vested Account resulting from the minimum
contributions required pursuant to the MODIFICATION OF CONTRIBUTIONS SECTION of
Article X shall not be forfeited because of a period of reemployment after
benefit payments have begun.
SECTION 10.04--MODIFICATION OF CONTRIBUTIONS.
During any Year in which this Plan is a Top-heavy Plan, the Employer
shall make a minimum contribution or allocation on the last day of the Year for
each person who is an Employee on that day and who either was or could have been
an Active Participant during the Year. An Employee is not required to have a
minimum number of hours-of-service or minimum amount of Compensation, or to have
had any Elective Deferral Contributions made for him in order to be entitled to
this minimum. The minimum contribution or allocation for such person shall be
equal to the lesser of (a) or (b) below:
a) Three percent of such person's Compensation (as defined in
this article).
b) The "highest percentage" of Compensation (as defined in this
article) for such Year at which the Employer's contributions
are made for or allocated to any Key Employee. The highest
percentage shall be determined by dividing the Employer
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Contributions made for or allocated to each Key Employee
during such Year by the amount of his Compensation (as defined
in this article), which is not more than the maximum set out
above, and selecting the greatest quotient (expressed as a
percentage). To determine the highest percentage, all of the
Employer's defined contribution plans within the Aggregation
Group shall be treated as one plan. The provisions of this
paragraph shall not apply if this Plan and a defined benefit
plan of the Employer are required to be included in the
Aggregation Group and this Plan enables the defined benefit
plan to meet the requirements of Code Section 401 (a)(4) or
Code Section 410.
If the Employer's contributions and allocations otherwise required
under the defined contribution plan(s) are at least equal to the minimum above,
no additional contribution or reallocation shall be required. If the Employer's
contributions and allocations are less than the minimum above and Employer
Contributions under this Plan are allocated to Participants, any Employer
Contributions (other than those which are allocated on the basis of the amount
made for such person) shall be reallocated to provide the minimum. The remaining
Contributions shall be allocated as provided in the preceding articles of this
Plan taking into account any amount which was reallocated to provide the
minimum. If the Employer's total contributions and allocations are less than the
minimum above after any reallocation provided above, the Employer shall
contribute the difference for the Year.
The minimum contribution or allocation applies to all of the Employer's
defined contribution plans in the aggregate which are Top-heavy Plans. If an
additional contribution or allocation is required to meet the minimum above, it
shall be provided in this Plan.
A minimum allocation under a profit sharing plan shall be made without
regard to whether or not the Employer has profits.
If a person who is otherwise entitled to a minimum contribution or
allocation above is also covered under a denied benefit plan of the Employer's
which is a Top-heavy Plan during that same Year, the minimum benefits for him
shall not be duplicated. The defined benefit plan shall provide an annual
benefit for him on, or adjusted to, a straight life basis of the lesser of (c)
two percent of his average pay multiplied by his years of service or (d) twenty
percent of his average pay. Average pay and years of service shall have the
meaning set forth in such defined benefit plan for this purpose.
For purposes of this section, any employer contribution made according
to a salary reduction or similar arrangement shall not apply before the first
Yearly Date in 1985. On and after the first Yearly Date in 1989, any such
employer contributions and employer contributions which are matching
contributions, as defined in Code Section 401(m), shall not apply in determining
if the minimum contribution requirement has been met, but shall apply in
determining the minimum contribution required. Forfeitures credited to a
Participant's Account are treated as employer contributions.
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The requirements of this section shall be met without regard to
contributions under Chapter 2 of the Code (relating to tax on self-employment),
Chapter 21 of the Code (relating to Federal Insurance Contributions Act), Title
II of the Social Security Act or any other Federal or state law.
SECTION 10.05--MODIFICATION OF CONTRIBUTION LIMITATION.
If the provisions of subsection (e) of the CONTRIBUTION LIMITATION
SECTION of Article III are applicable for any Limitation Year during which this
Plan is a Top-heavy Plan, the benefit limitations shall be modified. The
definitions of Defined Benefit Plan Fraction and Defined Contribution Plan
Fraction in the CONTRIBUTION LIMITATION SECTION of Article III shall be modified
by substituting "1.0" in lieu of "1.25." The optional denominator for
determining the Defined Contribution Plan Fraction shall be modified by
substituting "$41,500" in lieu of "$51,875." In addition, an adjustment shall be
made to the numerator of the Defined Contribution Plan Fraction. The adjustment
is a reduction of that numerator similar to the modification of the Defined
Contribution Plan Fraction described in the CONTRIBUTION LIMITATION SECTION of
Article III, and shall be made with respect to the last Plan Year beginning
before January 1, 1984.
The modifications in the paragraph above shall not apply with respect
to a Participant so long as employer contributions, forfeitures or nondeductible
employee contributions are not credited to his account under this or any of the
Employer's other defined contribution plans and benefits do not accrue for such
Participant under the Employer's defined benefit plan(s), until the sum of his
Defined Contribution and Defined Benefit Plan Fractions is less than 1.0.
By executing this Plan, the Primary Employer acknowledges having
counseled to the extent necessary with selected legal and tax advisors regarding
the Plan's legal and tax implications.
Executed this 2nd day of October, 1996.
REGAL CINEMAS INC.
By: /s/ Michael L. Campbell
-------------------------------------
President and Chief Executive Officer
Title
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The Adopting Employer must agree to participate in or adopt the Plan in
writing. If this has not already been done, it may be done by signing below.
LITCHFIELD THEATRES LTD
By: Michael L. Campbell
-----------------------
President
Title
October 2, 1996
Date
NEIGHBORHOOD ENTERTAINMENT INC.
By: Michael L. Campbell
-----------------------
President
Title
October 2, 1996
Date
88
<PAGE> 1
EXHIBIT 5.1
[BASS, BERRY & SIMS PLC LETTERHEAD]
October 2, 1996
Regal Cinemas, Inc.
7132 Commercial Park Drive
Knoxville, TN 37918
Re: REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have acted as your counsel in the preparation of the Registration
Statement on Form S-8 (the "Registration Statement") relating to the Company's
401(k) Profit Sharing Plan (the "Plan") filed by you with the Securities and
Exchange Commission covering 112,500 shares (the "Shares") of common stock, no
par value, issuable pursuant to the Plan.
In so acting we have examined and relied upon such records, documents,
and other instruments as in our judgment are necessary or appropriate in order
to express the opinions hereinafter set forth and have assumed the genuineness
of all signatures, the authenticity of all documents submitted to us as
originals, and the conformity to original documents of all documents submitted
to us as certified or photostatic copies.
Based on the foregoing, we are of the opinion that any issued Shares
are, and any unissued Shares, when issued pursuant to and in accordance with the
Plan, will be validly issued, fully paid, and non-assessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Bass, Berry & Sims PLC
<PAGE> 1
EXHIBIT 23.1
<PAGE> 2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement of
Regal Cinemas, Inc. on Form S-8 of our report dated February 8, 1996, on our
audits of the consolidated financial statements of Regal Cinemas, Inc. as of
December 29, 1994 and December 28, 1995, and for each of the three years in the
period ended December 28, 1995, included in the Regal Cinemas, Inc. Annual
Report on Form 10-K/A for the fiscal year ended December 28, 1995. We also
consent to the incorporation by reference in this Registration Statement on Form
S-8 of our report dated February 8, 1996, except for the combination described
in Note 1, as to which the date is May 30, 1996, and the two transactions
described in Note 14, as to which the dates are May 31, 1996 and June 6, 1996,
respectively, on our audits of the supplemental consolidated financial
statements of Regal Cinemas, Inc. as of December 29, 1994 and December 28, 1995,
and for each of the three years in the period ended December 28, 1995, included
in the Current Report on Form 8-K of Regal Cinemas, Inc., dated July 1, 1996.
/s/ Coopers & Lybrand L.L.P.
Knoxville, Tennessee
September 27, 1996
<PAGE> 3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement of
Regal Cinemas, Inc. on Form S-8 of our report dated February 23, 1996, on our
audit of the consolidated financial statements of Georgia State Theatres, Inc.
as of December 29, 1994 and December 28, 1995, and for each of the three years
in the period ended December 28, 1995, included in the Current Report on Form
8-K of Regal Cinemas, Inc., dated July 1, 1996.
/s/ Coopers & Lybrand L.L.P.
Atlanta, Georgia
September 27, 1996
<PAGE> 4
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement of
Regal Cinemas, Inc. on Form S-8 of our report dated March 8, 1996, on our audit
of the combined historical summaries of net theatre assets acquired by Regal
Cinemas, Inc. from Krikorian Theatres and the combined direct theatre operating
revenues and expenses as of and for the year ended December 31, 1995, included
in the Current Report on Form 8-K of Regal Cinemas, Inc., dated May 1, 1996.
/s/ Coopers & Lybrand L.L.P.
Los Angeles, California
October 2, 1996
<PAGE> 1
EXHIBIT 23.2
<PAGE> 2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration Statement on
Form S-8 pertaining to Regal Cinemas, Inc. 401(k) Profit Sharing Plan of our
report dated March 21, 1995 (with respect to the financial statements of
Neighborhood Entertainment, Inc. not separately presented), appearing in the
Current Report on Form 8-K dated July 2, 1996 of Regal Cinemas, Inc. filed with
the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Richmond, Virginia
September 27, 1996
<PAGE> 1
EXHIBIT 23.3
<PAGE> 2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration Statement on
Form S-8 pertaining to Regal Cinemas, Inc. 401(k) Profit Sharing Plan
of our report dated March 22, 1994 (with respect to the financial statements of
Litchfield Theatres, Ltd. for the year ended December 31, 1993 which are not
separately presented), appearing in the Current Report on Form 8-K dated July
2, 1996, of Regal Cinemas, Inc. filed with the Securities and Exchange
Commission.
/s/ Deloitte & Touche LLP
Columbia, South Carolina
October 1, 1996
