As filed with the Securities and Exchange Commission on January 22, 1998
Registration No. _______________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM S-8
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
--------------
ASAHI/AMERICA, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Massachusetts 04-2621836
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
35 Green Street, Malden, Massachusetts 02148
--------------------------------------------
(Address of Principal Executive Offices)
Asahi/America, Inc. 401(k) Plan
-------------------------------
(Full title of plan)
Leslie B. Lewis, President
Asahi/America, Inc.
35 Green Street
Malden, Massachusetts 02148
------------------------------------------------------------
(Name and address, including zip code, of agent for service)
(781) 321-5409
------------------------------------------------------------
(Telephone number, including area code of agent for service)
Copies to:
Marianne Gilleran, Esq.
Gadsby & Hannah LLP
225 Franklin Street
Boston, Massachusetts 02110
(617) 345-7000
<PAGE>
CALCULATION OF REGISTRATION FEE
================================================================================
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
Title of Proposed Proposed
Securities to be Amount to be Maximum Maximum Amount of
Registered(1) Registered(2) Offering Price Aggregate Registration Fee
Per Share(3) Offering
Price(3)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 100,000 $6.35 $635,000 $187.33
no par value per
share
- -------------------------------------------------------------------------------------------------------------
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
registration statement also covers an indeterminate amount of interests to
be offered or sold pursuant to the employee benefit plan described herein.
(2) The amount of shares registered hereunder is based upon an estimate of the
number of shares of Common Stock to be issued pursuant to the employee
benefit plan described herein. In addition, pursuant to Rule 416, there are
also being registered such additional shares of Common Stock as may become
issuable pursuant to stock splits, stock dividends or similar transactions.
(3) Estimated solely for the purpose of computing the registration fee,
pursuant to Rule 457(h), on the basis of the average of the high and low
prices of the Common Stock, approximately $6.56 and $6.13, respectively, as
reported on the Nasdaq National Market on January 16, 1998.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document(s) containing the information specified in Part I of Form
S-8 are not required to be filed with the Securities and Exchange Commission
(the "Commission") as part of this registration statement on Form S-8. Such
documents and the documents incorporated by reference in this registration
statement on Form S-8 pursuant to Item 3 of Part II hereof, as described below,
taken together, constitute a prospectus that meets the requirements of Section
10(a) of the Securities Act of 1933, as amended (the "Securities Act").
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents are incorporated by reference in this
registration statement:
(a) The Annual Report on Form 10-K for the fiscal year ended December
31, 1996 ("Fiscal 1996") filed by Asahi/America, Inc. (the "Company") pursuant
to Section 13(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act");
(b) All other reports filed by the Company and the Company's 401(k) Plan
(the "Plan") pursuant to Section 13(a) or 15(d) of the Exchange Act since the
end of Fiscal 1996; and
(c) The description of the Company's securities in the Company's Form
8-A Registration Statement filed with the Commission and dated April 25, 1996,
including any amendment or report filed for the purpose of updating such
description.
All documents subsequently filed by the Company or the Plan pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all securities offered in this
registration statement have been sold, or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
registration statement and to be a part hereof from the date of the filing of
such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
Company pursuant to the following provisions, or otherwise, the Company has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
<PAGE>
Section 67 of Chapter 156B of the Massachusetts Business Corporation Law
provides that a corporation may indemnify its directors and officers to the
extent specified in or authorized by (i) the articles of organization; (ii) a
by-law adopted by the stockholders; or (iii) a vote adopted by the holders of a
majority of the shares of stock entitled to vote on the election of directors.
In all instances, the extent to which a corporation provides indemnification to
its directors and officers under Section 67 is optional.
The Restated Articles of Organization and By-Laws of the Company permit
the Company to indemnify an officer or director in respect of claims made by
reason of his status with the Company including, all liabilities and expenses
imposed upon or incurred by such person in connection with or arising out of,
the defense or disposition of any action, suit or other proceeding. Expenses
incurred in defense of such action may be paid by the Company in advance of
final disposition upon receipt of an undertaking to repay if there is an
ultimate determination that he is not entitled to be indemnified.
The Company's Restated Articles of Organization eliminate the personal
liability of the Company's directors for monetary damages for the breach of
their fiduciary duty as directors to the Company and its stockholders,
notwithstanding any provision of law imposing such liability. The Company's
Restated Articles of Organization, however, do not eliminate liability of the
Company's directors for breach of the director's duty of loyalty to the Company
or its stockholders, acts or omissions not in good faith or involving
intentional misconduct or a knowing violation of law and actions leading to
improper personal benefit to the director, or under Section 61 or 62 of the
Massachusetts Business Corporation Law.
The Company's By-Laws, as amended, state that the Company shall provide
no indemnification with respect to any matter as to which any such director,
officer or other person shall be finally adjudicated in such action, suit or
proceeding not to have acted in good faith and the reasonable belief that his
action was in the best interest of the Company or, to the extent such a matter
relates to service with respect to an employee benefit plan, in the best
interests of the participants or beneficiaries of such employee benefit plan.
The Company shall provide no indemnification with respect to any matter settled
or compromised, pursuant to a consent decree or otherwise, unless such
settlement or compromise shall have been approved as in the best interest of the
Company or, to the extent such matter relates to service with respect to any
employee benefit plan, in the best interests of the participants or
beneficiaries of such employee benefit plan, after notice that indemnification
is involved by (i) a disinterested majority of the board of directors or (ii)
the holders of a majority of the outstanding stock entitled to elect directors,
voting as a single class, exclusive of any stock owned by any interested
director, officer or other person.
The Company has purchased directors and officers liability insurance
covering liabilities incurred by its officers and directors in connection with
the performance of their duties in the amount of $3,000,000.
Item 7. Exemption From Registration Claimed.
Not applicable.
Item 8. Exhibits.
The following exhibits are filed as part of this registration statement:
<PAGE>
Exhibit
Number Description
- -------- ---------------------------------------------------------------------
4.1 Asahi/America, Inc. 401(k) Plan, as amended.
4.2 Restated Articles of Organization of the Company (previously filed as
Exhibit 3.1.1 to the Company's Registration Statement on Form S-1
(File No. 333-2314) and hereby incorporated by reference).
4.3 Bylaws of the Company, as amended (previously filed as Exhibit 3.2.1
to the Company's Registration Statement on Form S-1 (File No.
333-2314) and hereby incorporated by reference).
23 Consent of Arthur Andersen LLP.
24 Power of Attorney.
The registrant has submitted or will submit the Plan and any amendment
thereto to the Internal Revenue Service ("IRS") in a timely manner, and has made
or will make all changes required by the IRS in order to qualify the Plan.
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of 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. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of a prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20 percent
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and
(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 Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement
<PAGE>
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses 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 Act and will
be governed by the final adjudication of such issue.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Malden, Commonwealth of Massachusetts, on
January 22, 1998.
ASAHI/AMERICA, INC.
By /s/ Leslie B. Lewis
---------------------------
Leslie B. Lewis, President
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 date indicated.
Signature Title Date
--------- ----- ----
/s/ Leslie B. Lewis President and Director January 22, 1998
- ----------------------------- (Principal Executive Officer)
Leslie B. Lewis
Director
- -----------------------------
Kazuyuki Sato
Director
- -----------------------------
Masashi Uesugi
/s/ Nannette S. Lewis Director January 22, 1998
- -----------------------------
Nannette S. Lewis
/s/ Jeffrey C. Bloomberg Director January 22, 1998
- -----------------------------
Jeffrey C. Bloomberg
/s/ Samuel J. Gerson Director January 22, 1998
- -----------------------------
Samuel J. Gerson
/s/ Kozo Terada Vice President and Treasurer January 22, 1998
- ----------------------------- (Principal Financial and
Kozo Terada Accounting Officer)
<PAGE>
SIGNATURES (continued)
Pursuant to the requirements of the Securities Act of 1933, the persons
who administer the employee benefit plan have duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Malden, Commonwealth of Massachusetts, on
January 22, 1998.
ASAHI/AMERICA, INC.
401(k) PLAN
/s/ Leslie B. Lewis
-------------------
By: Leslie B. Lewis, Plan Administrator
Duly Authorized
/s/ John E. Lawrence
---------------------
By: John E. Lawrence, Plan Administrator
Duly Authorized
/s/ Kozo Terada
----------------
By: Kozo Terada, Plan Administrator
Duly Authorized
<PAGE>
EXHIBIT INDEX
-------------
Exhibit
Number Description
- ------- -----------
4.1 Asahi/America, Inc. 401(k) Plan, as amended.
4.2 Restated Articles of Organization of the Company (previously filed as
Exhibit 3.1.1 to the Company's Registration Statement on Form S-1
(File No. 333-2314) and hereby incorporated by reference).
4.3 Bylaws of the Company, as amended (previously filed as Exhibit 3.2.1
to the Company's Registration Statement on Form S-1 (File No.
333-2314) and hereby incorporated by reference).
23 Consent of Arthur Andersen LLP.
24 Power of Attorney.
EXHIBIT 4.1
-----------
ASAHI/AMERICA, INC 401(K) PLAN
<PAGE>
Plan #002
NONSTANDARDIZED
ADOPTION AGREEMENT
PROTOTYPE CASH OR DEFERRED PROFIT-SHARING
PLAN AND TRUST/CUSTODIAL ACCOUNT
Sponsored by
BankBoston, N.A.
The Employer named below hereby establishes a Cash or Deferred
Profit-Sharing Plan for eligible Employees as provided in this Adoption
Agreement and the accompanying Basic Prototype Plan and Trust/Custodial
Account Basic Plan Document #04.
1. EMPLOYER INFORMATION
NOTE: If multiple Employers are adopting the Plan, complete this
section based on the lead Employer. Additional Employers may
adopt this Plan by attaching executed signature pages to the back
of the Employer's Adoption Agreement.
(a) NAME AND ADDRESS:
Asahi/America, Inc.
35 Green Street
Malden, MA 02148
(b) TELEPHONE NUMBER: (617)321-5409
(c) TAX ID NUMBER: 04-2621836
(d) FORM OF BUSINESS:
[ ] (i) Sole Proprietor
[ ] (ii) Partnership
[X] (iii) Corporation
[ ] (iv) "S" Corporation (formerly known as Subchapter S)
[ ] (v) Other: _______________________________
1
<PAGE>
Prototype Cash or
Deferred Profit-
Sharing Plan #002
(e) NAME OF INDIVIDUAL AUTHORIZED TO ISSUE
INSTRUCTIONS TO THE TRUSTEE/CUSTODIAN:
Lisa Fink, Leslie B. Lewis, Kozo Terada
(f) NAME OF PLAN: Asahi/America 401(k) Plan
(g) THREE DIGIT PLAN NUMBER
FOR ANNUAL RETURN/REPORT: 003
2. EFFECTIVE DATE
(a) This is a new Plan having an effective date of ________________.
(b) This is an amended Plan.
The effective date of the original Plan was October 1, 1990 .
The effective date of the amended Plan is July 1, 1997 .
(c) If different from above, the Effective Date for the Plan's
Elective Deferral provisions shall be ____________________.
3. DEFINITIONS
(a) "Collective or Commingled Funds" (Applicable to institutional
Trustees only.) Investment in collective or commingled funds as
permitted at paragraph 13.3(b) of the Basic Plan Document #04
shall only be made to the following specifically named fund(s):
Funds made available after the execution of this Adoption
Agreement will be listed on schedules attached to the end of this
Adoption Agreement.
(b) "Compensation" Compensation shall be determined on the basis of the:
[X] (i) Plan Year.
[ ] (ii) Employer's Taxable Year.
2
<PAGE>
Prototype Cash or
Deferred Profit-
Sharing Plan #002
[ ] (iii) Calendar Year.
Compensation shall be determined on the basis of the following
safe-harbor definition of Compensation in IRS Regulation Section
1.414(s)-1(c):
[ ] (iv) Code Section 6041 and 6051 Compensation,
[X] (v) Code Section 3401(a) Compensation, or
[ ] (vi) Code Section 415 Compensation.
Compensation [X] shall [ ] shall not include Employer
contributions made pursuant to a Salary Savings Agreement which
are not includable in the gross income of the Employee for the
reasons indicated in the definition of Compensation at 1.12 of
the Basic Plan Document #04.
For purposes of the Plan, Compensation shall be limited to
$_________, the maximum amount which will be considered for Plan
purposes. [If an amount is specified, it will limit the amount of
contributions allowed on behalf of higher compensated Employees.
Completion of this section is not intended to coordinate with the
$200,000 of Code Section 415(d), thus the amount should be less
than $200,000 as adjusted for cost-of-living increases.]
(iii) Exclusions From Compensation:
(1) overtime.
(2) bonuses.
(3) commissions.
(4) _____________________
<TABLE>
<CAPTION>
Type of Contribution(s) Exclusion(s)
----------------------- ------------
<S> <C>
Elective Deferrals [Section 7(b)] 1,2,3
--------
Matching Contributions [Section 7(c)] 1,2,3
--------
Qualified Non-Elective Contributions [Section 7(d)]
and Non-Elective Contributions [Section 7(e)] 1,2,3
--------
</TABLE>
(c) "Entry Date"
3
<PAGE>
Prototype Cash or
Deferred Profit-
Sharing Plan #002
[ ] (i) The first day of the Plan Year nearest the date on
which an Employee meets the eligibility requirements.
[ ] (ii) The earlier of the first day of the Plan Year or
the first day of the seventh month of the Plan Year
coinciding with or following the date on which an
Employee meets the eligibility requirements.
[ ] (iii) The first day of the Plan Year following the
date on which the Employee meets the eligibility
requirements. If this election is made, the Service
requirement at 4(a)(ii) may not exceed 1/2 year and the
age requirement at 4(b)(ii) may not exceed 20-1/2.
[ ] (iv) The first day of the month coinciding with or
following the date on which an Employee meets the
eligibility requirements.
[X] (v) The first day of the Plan Year, or the first day of
the fourth month, or the first day of the seventh month
or the first day of the tenth month, of the Plan Year
coinciding with or following the date on which an
Employee meets the eligibility requirements.
(d) "Hours of Service" Shall be determined on the basis of the method
selected below. Only one method may be selected. The method
selected shall be applied to all Employees covered under the Plan
as follows:
[X] (i) On the basis of actual hours for which an Employee
is paid or entitled to payment.
[ ] (ii) On the basis of days worked. An Employee shall
be credited with ten (10) Hours of Service if under
paragraph 1.42 of the Basic Plan Document #04 such
Employee would be credited with at least one (1) Hour
of Service during the day.
[ ] (iii) On the basis of weeks worked. An Employee shall
be credited with forty-five (45) Hours of Service if
under paragraph 1.42 of the Basic Plan Document #04
such Employee would be credited with at least one (1)
Hour of Service during the week.
[ ] (iv) On the basis of semi-monthly payroll periods. An
Employee shall be credited with ninety-five (95) Hours
of Service if under paragraph 1.42 of the Basic Plan
Document #04
4
<PAGE>
Prototype Cash or
Deferred Profit-
Sharing Plan #002
such Employee would be credited with at least one (1)
Hour of Service during the semi-monthly payroll period.
[ ] (v) On the basis of months worked. An Employee shall
be credited with one-hundred-ninety (190) Hours of
Service if under paragraph 1.42 of the Basic Plan
Document #04 such Employee would be credited with at
least one (1) Hour of Service during the month.
(e) "Limitation Year" The 12-consecutive month period commencing on
January 1 and ending on December 31.
If applicable, the Limitation Year will be a short Limitation
Year commencing on _____________________ and ending on
___________________. Thereafter, the Limitation Year shall end on
the date last specified above.
(f) "Net Profit"
[X] (i) Not applicable (profits will not be required for
any contributions to the Plan).
[ ] (ii) As defined in paragraph 1.49 of the Basic Plan
Document #04.
[ ] (iii) Shall be defined as:
____________________________________________
(Only use if definition in paragraph 1.49 of the Basic
Plan Document #04 is to be superseded.)
(g) "Plan Year" The 12-consecutive month period commencing on January
1 and ending on December 31.
If applicable, the Plan Year will be a short Plan Year commencing
on _____ and ending on _____. Thereafter, the Plan Year shall end
on the date last specified above.
(h) "Qualified Early Retirement Age" For purposes of making
distributions under the provisions of a Qualified Domestic
Relations Order, the Plan's Qualified Early Retirement Age with
regard to the Participant against whom the order is entered [X]
shall [ ] shall not be the date the order is determined to be
qualified. If "shall" is elected, this will only allow payout to
the alternate payee(s).
5
<PAGE>
Prototype Cash or
Deferred Profit-
Sharing Plan #002
(i) "Qualified Joint and Survivor Annuity" The safe-harbor provisions
of paragraph 8.7 of the Basic Plan Document #04 [X] are [ ] are
not applicable. If not applicable, the survivor annuity shall be
___% (50%, 66-2/3%, 75% or 100%) of the annuity payable during
the lives of the Participant and Spouse. If no answer is
specified, 50% will be used.
(j) "Taxable Wage Base" [paragraph 1.79]
[ ] (i) Not Applicable - Plan is not integrated with Social
Security.
[X] (ii) The maximum earnings considered wages for such
Plan Year under Code Section 3121(a).
[ ] (iii) ___% (not more than 100%) of the amount considered
wages for such Plan Year under Code Section 3121(a).
[ ] (iv) $________, provided that such amount is not in
excess of the amount determined under paragraph
3(j)(ii) above.
[ ] (v) For the 1989 Plan Year $10,000. For all subsequent Plan
Years, 20% of the maximum earnings considered wages for
such Plan Year under Code Section 3121(a).
NOTE: Using less than the maximum at (ii) may result in a
change in the allocation formula in Section 7.
(k) "Valuation Date(s)" Allocations to Participant Accounts will be
done in accordance with Article V of the Basic Plan Document #04:
(i) Daily (v) Quarterly
(ii) Weekly (vi) Semi-Annually
(iii) Monthly (vii) Annually
(iv) Bi-Monthly
Indicate Valuation Date(s) to be used by specifying option from
list above:
Type of Contribution(s) Valuation Date(s)
----------------------- -----------------
After-Tax Voluntary Contributions [Section 6] ---
6
<PAGE>
Prototype Cash or
Deferred Profit-
Sharing Plan #002
Elective Deferrals [Section 7(b)] i
----
Matching Contributions [Section 7(c)] i
----
Qualified Non-Elective Contributions [Section 7(d)] i
----
Non-Elective Contributions [Section 7(e), (f) and (g)] i
----
Minimum Top-Heavy Contributions [Section 7(i)] i
----
(l) "Year of Service"
(i) For Eligibility Purposes: The 12-consecutive month period
during which an Employee is credited with N/A (not more
than 1,000) Hours of Service.
(ii) For Allocation Accrual Purposes: The 12-consecutive month
period during which an Employee is credited with 1000
(not more than 1,000) Hours of Service.
(iii) For Vesting Purposes: The 12-consecutive month period
during which an Employee is credited with 1000 (not more
than 1,000) Hours of Service.
4. ELIGIBILITY REQUIREMENTS
(a) Service:
[ ] (i) The Plan shall have no service requirement.
[X] (ii) The Plan shall cover only Employees having
completed at least .25 [not more than three (3)] Years
of Service. If more than one (1) is specified, for Plan
Years beginning in 1989 and later, the answer will be
deemed to be one (1).
NOTE: If the eligibility period selected is less than one
year, an Employee will not be required to complete any
specified number of Hours of Service to receive credit
for such period.
(b) Age:
[X] (i) The Plan shall have no minimum age requirement.
7
<PAGE>
Prototype Cash or
Deferred Profit-
Sharing Plan #002
[ ] (ii) The Plan shall cover only Employees having
attained age (not more than age 21).
(c) Classification:
The Plan shall cover all Employees who have met the age ___ and
service requirements with the following exceptions:
[X] (i) No exceptions.
[ ] (ii) The Plan shall exclude Employees included in a
unit of Employees covered by a collective bargaining
agreement between the Employer and Employee
Representatives, if retirement benefits were the
subject of good faith bargaining. For this purpose, the
term "Employee Representative" does not include any
organization more than half of whose members are
Employees who are owners, officers, or executives of
the Employer.
[ ] (iii) The Plan shall exclude Employees who are nonresident
aliens and who receive no earned income from the
Employer which constitutes income from sources
within the United States.
[ ] (iv) The Plan shall exclude from participation any
nondiscriminatory classification of Employees
determined as follows:
_________________________________
(d) Employees on Effective Date:
[X] (i) Not Applicable. All Employees will be required to
satisfy both the age and Service requirements specified
above.
[ ] (ii) Employees employed on the Plan's Effective Date
do not have to satisfy the Service requirements
specified above.
[ ] (iii) Employees employed on the Plan's Effective Date
do not have to satisfy the age requirements specified
above.
5. RETIREMENT AGES
(a) Normal Retirement Age: If the Employer imposes a requirement that
Employees retire upon reaching a specified
8
<PAGE>
Prototype Cash or
Deferred Profit-
Sharing Plan #002
age, the Normal Retirement Age selected
below may not exceed the Employer
imposed mandatory retirement age.
[X] (i) Normal Retirement Age shall be 65 (not to exceed
age 65).
[ ] (ii) Normal Retirement Age shall be the later of
attaining age ___ (not to exceed age 65) or the ___
(not to exceed the 5th) anniversary of the first day of
the first Plan Year in which the Participant commenced
participation in the Plan.
(b) Early Retirement Age:
[ ] (i) Not Applicable.
[X] (ii) The Plan shall have an Early Retirement Age of 55
(not less than 55) and completion of 3 Years of
Service.
6. EMPLOYEE CONTRIBUTIONS
[X] (a) Participants shall be permitted to make Elective Deferrals
in any amount from 1% up to 17% of their Compensation.
If (a) is applicable, Participants shall be permitted to
amend their Salary Savings Agreements to change the
contribution percentage as provided below:
[ ] (i) On the Anniversary Date of the Plan,
[ ] (ii) On the Anniversary Date of the Plan and on the first
day of the seventh month of the Plan Year,
[ ] (iii) On the Anniversary Date of the Plan and on the first
day following any Valuation Date, or
[X] (iv) Upon 30 days notice to the Employer.
[ ] (b) Participants shall be permitted to make after tax Voluntary
Contributions.
9
<PAGE>
Prototype Cash or
Deferred Profit-
Sharing Plan #002
[ ] (c) Participants shall be required to make after tax Voluntary
Contributions as follows (Thrift Savings Plan):
[ ] (i) ___% of Compensation.
[ ] (ii) A percentage determined by the Employee on his
or her enrollment form.
[X] (d) If necessary to pass the Average Deferral Percentage Test,
Participants [ ] may [X] may not have Elective Deferrals
recharacterized as Voluntary Contributions.
NOTE:The Average Deferral Percentage Test will apply to
contributions under (a) above. The Average Contribution
Percentage Test will apply to contributions under (b) and
(c) above, and may apply to (a).
7. EMPLOYER CONTRIBUTIONS AND ALLOCATION THEREOF
NOTE:The Employer shall make contributions to the Plan in
accordance with the formula or formulas selected below. The
Employer's contribution shall be subject to the limitations
contained in Articles III and X. For this purpose, a
contribution for a Plan Year shall be limited for the
Limitation Year which ends with or within such Plan Year.
Also, the integrated allocation formulas below are for Plan
Years beginning in 1989 and later. The Employer's allocation
for earlier years shall be as specified in its Plan prior to
amendment for the Tax Reform Act of 1986.
(a) Profits Requirement:
(i) Current or Accumulated Net Profits are required for:
[ ] (A) Matching Contributions.
[ ] (B) Qualified Non-Elective Contributions.
[ ] (C) discretionary contributions.
(ii)No Net Profits are required for:
[X] (A) Matching Contributions.
[X] (B) Qualified Non-Elective Contributions.
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[X] (C) discretionary contributions.
NOTE: Elective Deferrals can always be contributed regardless of
profits.
[X] (b) Salary Savings Agreement:
The Employer shall contribute and allocate to each
Participant's account an amount equal to the amount withheld
from the Compensation of such Participant pursuant to his or
her Salary Savings Agreement. If applicable, the maximum
percentage is specified in Section 6 above.
An Employee who has terminated his or her election under the
Salary Savings Agreement other than for hardship reasons may
not make another Elective Deferral:
[ ] (i) until the first day of the next Plan Year.
[ ] (ii) until the first day of the next valuation period.
[X] (iii) for a period of 1 month(s) (not to exceed 12 months).
[X] (c) Matching Employer Contribution [See paragraphs (h) and (i)]:
[ ] (i) Percentage Match: The Employer shall contribute
and allocate to each eligible Participant's account an
amount equal to ____% of the amount contributed and
allocated in accordance with paragraph 7(b) above and
(if checked) ____% of [ ] the amount of Voluntary
Contributions made in accordance with paragraph 4.1 of
the Basic Plan Document #04. The Employer shall not
match Participant Elective Deferrals as provided above
in excess of $_____ or in excess of ____% of the
Participant's Compensation or if applicable, Voluntary
Contributions in excess of $____ or in excess of ____%
of the Participant's Compensation. In no event will the
match on both Elective Deferrals and Voluntary
Contributions exceed a combined amount of $____ or
____%.
[X] (ii) Discretionary Match: The Employer shall contribute
and allocate to each eligible Participant's account a
percentage of the Participant's Elective Deferral
contributed and allocated in accordance with paragraph
7(b) above. The Employer shall set such percentage
prior to the end of the Plan Year. The Employer shall
not match Participant Elective Deferrals in excess of
$N/A or in excess of 4 % of the Participant's
Compensation.
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[ ] (iii) Tiered Match: The Employer shall contribute and
allocate to each Participant's account an amount equal
to % of the first % of the Participant's Compensation,
to the extent deferred.
%____ of the next ____% of the Participant's
Compensation, to the extent deferred.
____% of the next ____% of the Participant's
Compensation, to the extent deferred.
NOTE: Percentages specified in (iii) above may not increase as
the percentage of Participant's contribution increases.
[ ] (iv) Flat Dollar Match: The Employer shall contribute
and allocate to each Participant's account $____ if the
Participant defers at least 1% of Compensation.
[ ] (v) Percentage of Compensation Match: The Employer
shall contribute and allocate to each Participant's
account ____% of Compensation if the Participant defers
at least 1% of Compensation.
[ ] (vi) Proportionate Compensation Match: The Employer
shall contribute and allocate to each Participant who
defers at least 1% of Compensation, an amount
determined by multiplying such Employer Matching
Contribution by a fraction the numerator of which is
the Participant's Compensation and the denominator of
which is the Compensation of all Participants eligible
to receive such an allocation. The Employer shall set
such discretionary contribution prior to the end of the
Plan Year.
[X] (vii) Qualified Match: Employer Matching Contributions
will be treated as Qualified Matching Contributions to
the extent specified below:
[ ] (A) All Matching Contributions.
[ ] (B) None.
[ ] (C) ___% of the Employer's Matching Contribution.
[ ] (D) Up to ___% of each Participant's Compensation.
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[X] (E) The amount necessary to meet the [ ] Average
Deferral Percentage (ADP) Test, [ ] Average
Contribution Percentage (ACP) Test, [X] Both the
ADP and ACP Tests.
(viii)Matching Contribution Computation Period: The time
period upon which matching contributions will be based
shall be
[ ] (A) weekly
[ ] (B) bi-weekly
[ ] (C) semi-monthly
[X] (D) monthly
[ ] (E) quarterly
[ ] (F) semi-annually
[ ] (G) annually
(ix) Eligibility for Match: Employer Matching Contributions,
whether or not Qualified, will only be made on Employee
Contributions not withdrawn prior to the end of the [X]
valuation period [ ] Plan Year.
[X] (d) Qualified Non-Elective Employer Contribution - [See
paragraphs (h) and (i)] These contributions are fully vested
when contributed.
The Employer shall have the right to make an additional
discretionary contribution which shall be allocated to each
eligible Employee in proportion to his or her Compensation
as a percentage of the Compensation of all eligible
Employees. This part of the Employer's contribution and the
allocation thereof shall be unrelated to any Employee
contributions made hereunder. The amount of Qualified
non-Elective Contributions taken into account for purposes
of meeting the ADP or ACP test requirements is:
[ ] (i) All such Qualified non-Elective Contributions.
[X] (ii) The amount necessary to meet [ ] the ADP test, [ ] the
ACP test, [X] Both the ADP and ACP tests.
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Qualified non-Elective Contributions will be made to:
[ ] (iii) All Employees eligible to participate.
[X] (iv) Only non-Highly Compensated Employees eligible to
participate.
[ ] (e) Additional Employer Contribution Other Than Qualified
Non-Elective Contributions - Non-Integrated [See paragraphs
(h) and (i)]
The Employer shall have the right to make an additional
discretionary contribution which shall be allocated to each
eligible Employee in proportion to his or her Compensation
as a percentage of the Compensation of all eligible
Employees. This part of the Employer's contribution and the
allocation thereof shall be unrelated to any Employee
contributions made hereunder.
[X] (f) Additional Employer Contribution - Integrated Allocation
Formula [See paragraphs (h) and (i)]
The Employer shall have the right to make an additional
discretionary contribution. The Employer's contribution for
the Plan Year plus any forfeitures shall be allocated to the
accounts of eligible Participants as follows:
(i) First, to the extent contributions and forfeitures are
sufficient, all Participants will receive an allocation
equal to 3% of their Compensation.
(ii) Next, any remaining Employer Contributions and
forfeitures will be allocated to Participants who have
Compensation in excess of the Taxable Wage Base (excess
Compensation). Each such Participant will receive an
allocation in the ratio that his or her excess
compensation bears to the excess Compensation of all
Participants. Participants may only receive an
allocation of 3% of excess Compensation.
(iii) Next, any remaining Employer contributions and
forfeitures will be allocated to all Participants in
the ratio that their Compensation plus excess
Compensation bears to the total Compensation plus
excess Compensation of all Participants. Participants
may only receive an allocation of up to 2.7% of their
Compensation plus excess Compensation, under this
allocation method. If the Taxable Wage Base defined at
Section 3(j) is less than or equal to the greater of
$10,000 or 20% of the maximum, the 2.7% need not be
reduced. If the amount specified is greater than the
greater of $10,000 or 20% of the maximum Taxable Wage
Base, but not more than 80%, 2.7% must be reduced to
1.3%. If the amount specified
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Prototype Cash or
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is greater than 80% but less than 100% of the maximum
Taxable Wage Base, the 2.7% must be reduced to 2.4%.
NOTE: If the Plan is not Top-Heavy or if the Top-Heavy minimum
contribution or benefit is provided under another Plan [see
Section 11(c)(ii)] covering the same Employees,
sub-paragraphs (i) and (ii) above may be disregarded and
5.7%, 4.3% or 5.4% may be substituted for 2.7%, 1.3% or
2.4% where it appears in (iii) above.
(iv) Next, any remaining Employer contributions and
forfeitures will be allocated to all Participants
(whether or not they received an allocation under the
preceding paragraphs) in the ratio that each
Participant's Compensation bears to all Participants'
Compensation.
[ ] (g) Additional Employer Contribution-Alternative
Integrated Allocation Formula. [See paragraph (h) and (i)]
The Employer shall have the right to make an additional
discretionary contribution. To the extent that such
contributions are sufficient, they shall be allocated as
follows:
____% of each eligible Participant's Compensation plus ____%
of Compensation in excess of the Taxable Wage Base defined
at Section 3(j) hereof. The percentage on excess
compensation may not exceed the lesser of (i) the amount
first specified in this paragraph or (ii) the greater of
5.7% or the percentage rate of tax under Code Section
3111(a) as in effect on the first day of the Plan Year
attributable to the Old Age (OA) portion of the OASDI
provisions of the Social Security Act. If the Employer
specifies a Taxable Wage Base in Section 3(j) which is lower
than the Taxable Wage Base for Social Security purposes
(SSTWB) in effect as of the first day of the Plan Year, the
percentage contributed with respect to excess Compensation
must be adjusted. If the Plan's Taxable Wage Base is greater
than the larger of $10,000 or 20% of the SSTWB but not more
than 80% of the SSTWB, the excess percentage is 4.3%. If the
Plan's Taxable Wage Base is greater than 80% of the SSTWB
but less than 100% of the SSTWB, the excess percentage is
5.4%.
NOTE: Only one plan maintained by the Employer may be integrated
with Social Security.
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(h) Allocation of Excess Amounts (Annual Additions)
In the event that the allocation formula above results in an
Excess Amount, such excess shall be:
[ ] (i) placed in a suspense account accruing no gains or
losses for the benefit of the Participant.
[X] (ii) reallocated as additional Employer contributions
to all other Participants to the extent that they do
not have any Excess Amount.
(i) Minimum Employer Contribution Under Top-Heavy Plans:
For any Plan Year during which the Plan is Top-Heavy, the
sum of the contributions and forfeitures as allocated to
eligible Employees under paragraphs 7(d), 7(e), 7(f), 7(g)
and 9 of this Adoption Agreement shall not be less than the
amount required under paragraph 14.2 of the Basic Plan
document #04. Top- Heavy minimums will be allocated to:
[X] (i) all eligible Participants.
[ ] (ii) only eligible non-Key Employees who are Participants.
(j) Return of Excess Contributions and/or Excess Aggregate
Contributions:
In the event that one or more Highly Compensated Employees
is subject to both the ADP and ACP tests and the sum of such
tests exceeds the Aggregate Limit, the limit will be
satisfied by reducing the:
[ ] (i) the ADP of the affected Highly Compensated Employees.
[ ] (ii) the ACP of the affected Highly Compensated Employees.
[X] (iii) a combination of the ADP and ACP of the affected
Highly Compensated Employees.
8. ALLOCATIONS TO TERMINATED EMPLOYEES
[ ] (a) The Employer will not allocate Employer related
contributions to Employees who terminate during a Plan Year,
unless required to satisfy the requirements of Code Section
401(a)(26) and 410(b). (These requirements are effective for
1989 and subsequent Plan Years.)
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Prototype Cash or
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[X] (b) The Employer will allocate Employer matching and other
related contributions as indicated below to Employees who
terminate during the Plan Year as a result of:
Matching Other
-------- -----
[X] [X] (i) Retirement.
[X] [X] (ii) Disability.
[X] [X] (iii) Death.
[ ] [ ] (iv) Other termination of employment
provided that the Participant has
completed a Year of Service as
defined for Allocation Accrual
Purposes.
[X] [ ] (v) Other termination of employment even
though the Participant has not
completed a Year of Service.
[ ] [ ] (vi) Termination of employment (for any
reason) provided that the Participant
had completed a Year of Service for
Allocation Accrual Purposes.
9. ALLOCATION OF FORFEITURES
NOTE: Subsections (a), (b) and (c) below apply to forfeitures of
amounts other than Excess Aggregate Contributions.
(a) Allocation Alternatives:
If forfeitures are allocated to Participants, such
allocations shall be done in the same manner as the
Employer's contribution.
[ ] (i) Not Applicable. All contributions are always fully
vested.
[X] (ii) Forfeitures shall be allocated to Participants in the
same manner as the Employer's contribution.
If allocation to other Participants is selected, the
allocation shall be as follows:
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[1] Amount attributable to Employer discretionary
contributions and Top-Heavy minimums will be allocated
to:
[ ] all eligible Participants under the Plan.
[X] only those Participants eligible for an allocation
of Employer contributions in the current year.
[ ] only those Participants eligible for an allocation
of matching contributions in the current year.
[2] Amounts attributable to Employer Matching contributions
will be allocated to:
[ ] all eligible Participants.
[X] only those Participants eligible for allocations
of matching contributions in the current year.
[ ] (iii) Forfeitures shall be applied to reduce the
Employer's contribution for such Plan Year.
[ ] (iv) Forfeitures shall be applied to offset
administrative expenses of the Plan. If forfeitures
exceed these expenses, (iii) above shall apply.
(b) Date for Reallocation:
NOTE: If no distribution has been made to a former Participant,
sub-section (i) below will apply to such Participant even
if the Employer elects (ii), (iii) or (iv) below as its
normal administrative policy.
[ ] (i) Forfeitures shall be reallocated at the end of
the Plan Year during which the former Participant
incurs his or her fifth consecutive one year Break In
Service.
[ ] (ii) Forfeitures will be reallocated immediately (as
of the next Valuation Date).
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Prototype Cash or
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[ ] (iii) Forfeitures shall be reallocated at the end of
the Plan Year during which the former Employee incurs
his or her (1st, 2nd, 3rd, or 4th) consecutive one year
Break In Service.
[X] (iv) Forfeitures will be reallocated immediately (as of
the Plan Year end).
(c) Restoration of Forfeitures:
If amounts are forfeited prior to five consecutive 1-year Breaks
in Service, the Funds for restoration of account balances will be
obtained from the following resources in the order indicated
(fill in the appropriate number):
[1] (i) Current year's forfeitures.
[2] (ii) Additional Employer contribution.
[ ] (iii) Income or gain to the Plan.
(d) Forfeitures of Excess Aggregate Contributions shall be:
[X] (i) Applied to reduce Employer contributions.
[ ] (ii) Allocated, after all other forfeitures under the
Plan, to the Matching Contribution account of each
non-highly compensated Participant who made Elective
Deferrals or Voluntary Contributions in the ratio which
each such Participant's Compensation for the Plan Year
bears to the total Compensation of all Participants for
such Plan Year. Such forfeitures cannot be allocated to
the account of any Highly Compensated Employee.
Forfeitures of Excess Aggregate Contributions will be so applied
at the end of the Plan Year in which they occur.
10. CASH OPTION
[X] (a) The Employer may permit a Participant to elect to defer
to the Plan, an amount not to exceed 100 % of any Employer
paid cash bonus made for such Participant for any year. A
Participant must file an election to defer such contribution
at least fifteen (15) days prior to the end of the Plan
Year. If the Employee fails to make such an election, the
entire Employer paid cash bonus to which the Participant
would be entitled shall be paid as cash and not to the Plan.
Amounts deferred under this section shall be
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Prototype Cash or
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treated for all purposes as Elective Deferrals.
Notwithstanding the above, the election to defer must be
made before the bonus is made available to the Participant.
[ ] (b) Not Applicable.
11. LIMITATIONS ON ALLOCATIONS
[ ] This is the only Plan the Employer maintains or ever
maintained, therefore, this section is not applicable.
[X] The Employer does maintain or has maintained another Plan
(including a Welfare Benefit Fund or an individual medical
account (as defined in Code Section 415(l)(2)), under which
amounts are treated as Annual Additions) and has completed
the proper sections below.
Complete (a), (b) and (c) only if the Employer maintains or
ever maintained another qualified plan, including a Welfare
Benefit Fund or an individual medical account [as defined in
Code Section 415(l)(2)] in which any Participant in this
Plan is (or was) a participant or could possibly become a
participant.
(a) If the Participant is covered under another qualified
Defined Contribution Plan maintained by the Employer,
other than a Master or Prototype Plan:
[X] (i) the provisions of Article X of the Basic Plan
Document #04 will apply, as if the other plan were a
Master or Prototype Plan.
[ ] (ii) Attach provisions stating the method under which
the plans will limit total Annual Additions to the
Maximum Permissible Amount, and will properly reduce
any Excess Amounts, in a manner that precludes Employer
discretion.
(b) If a Participant is or ever has been a participant in a
Defined Benefit Plan maintained by the Employer:
Attach provisions which will satisfy the 1.0 limitation of
Code Section 415(e). Such language must preclude Employer
discretion. The Employer must also specify the interest and
mortality assumptions used in determining Present Value in
the Defined Benefit Plan.
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(c) The minimum contribution or benefit required under Code
Section 416 relating to Top-Heavy Plans shall be satisfied
by:
[X] (i) this Plan.
[ ] (ii) _______________________________________________
(Name of other qualified plan of the Employer).
[ ] (iii) Attach provisions stating the method under
which the minimum contribution and benefit provisions
of Code Section 416 will be satisfied. If a Defined
Benefit Plan is or was maintained, an attachment must
be provided showing interest and mortality assumptions
used in the Top-Heavy Ratio.
12. VESTING
Employees shall have a fully vested and nonforfeitable interest in any
Employer contribution and the investment earnings thereon made in
accordance with paragraphs (select one or more options) [ ] 7(c), [ ]
7(e), [ ] 7(f), [ ] 7(g) and [ ] 7(i) hereof. Contributions under
paragraph 7(b), 7(c)(vii) and 7(d) are always fully vested. If one or
more of the foregoing options are not selected, such Employer
contributions shall be subject to the vesting table selected by the
Employer.
Each Participant shall acquire a vested and nonforfeitable percentage
in his or her account balance attributable to Employer contributions
and the earnings thereon under the procedures selected below except
with respect to any Plan Year during which the Plan is Top-Heavy, in
which case the Two-twenty vesting schedule [Option (b)(iv)] shall
automatically apply unless the Employer has already elected a faster
vesting schedule. If the Plan is switched to option (b)(iv), because
of its Top-Heavy status, that vesting schedule will remain in effect
even if the Plan later becomes non-Top-Heavy until the Employer
executes an amendment of this Adoption Agreement indicating otherwise.
(a) Computation Period:
The computation period for purposes of determining Years of
Service and Breaks in Service for purposes of computing a
Participant's nonforfeitable right to his or her account balance
derived from Employer contributions:
[ ] (i) shall not be applicable since Participants are always
fully vested,
[ ] (ii) shall commence on the date on which an Employee
first performs an Hour of Service for the Employer and
each subsequent 12-con-
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Prototype Cash or
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secutive month period shall commence on the anniversary
thereof, or
[X] (iii) shall commence on the first day of the Plan Year
during which an Employee first performs an Hour of
Service for the Employer and each subsequent
12-consecutive month period shall commence on the
anniversary thereof.
A Participant shall receive credit for a Year of Service if he or she
completes at least 1,000 Hours of Service [or if lesser, the number of
hours specified at 3(l)(iii) of this Adoption Agreement] at any time
during the 12-consecutive month computation period. Consequently, a
Year of Service may be earned prior to the end of the 12-consecutive
month computation period and the Participant need not be employed at
the end of the 12-consecutive month computation period to receive
credit for a Year of Service.
(b) Vesting Schedules:
NOTE: The vesting schedules below only apply to a Participant
who has at least one Hour of Service during or after the
1989 Plan Year. If applicable, Participants who separated
from Service prior to the 1989 Plan Year will remain
under the vesting schedule as in effect in the Plan prior
to amendment for the Tax Reform Act of 1986.
(i) Full and immediate vesting.
Years of Service
1 2 3 4 5 6 7
-- --- -- -- -- -- --
(ii) % 100%
-----
(iii) 0 % 0 % 100%
----- -----
(iv) % 20% 40% 60% 80% 100%
-----
(v) % % 20% 40% 60% 80% 100%
----- -----
(vi) 10% 20% 30% 40% 60% 80% 100%
(vii) % % % % 100%
----- ----- ----- -----
(viii) % % % % % % 100%
----- ----- ----- ----- ----- -----
NOTE: The percentages selected for schedule (viii) may not be
less for any year than the percentages shown at schedule
(v).
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[X] All contributions other than those which are fully vested
when contributed will vest under schedule iii above.
[ ] Contributions other than those which are fully vested
when contributed will vest as provided below:
Vesting
Option Selected Type Of Employer Contribution
--------------- -----------------------------
_____ 7(c) Employer Match on Salary Savings
_____ 7(c) Employer Match on
Employee Voluntary
_____ 7(e) Employer Discretionary
_____ 7(f) & (g) Employer Discretionary -
Integrated
(c) Service disregarded for Vesting:
[X] (i) Not Applicable. All Service shall be considered.
[ ] (ii) Service prior to the Effective Date of this Plan
or a predecessor plan shall be disregarded when
computing a Participant's vested and nonforfeitable
interest.
[ ] (iii) Service prior to a Participant having attained
age 18 shall be disregarded when computing a
Participant's vested and nonfor feitable interest.
13. SERVICE WITH PREDECESSOR ORGANIZATION
For purposes of satisfying the Service requirements for eligibility,
Hours of Service shall include Service with the following predecessor
organization(s): (These hours will also be used for vesting purposes.)
Conant Controls, Inc.
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14. ROLLOVER/TRANSFER CONTRIBUTIONS
(a) Rollover Contributions, as described at paragraph 4.3 of the
Basic Plan Document
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Prototype Cash or
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#04, [X] shall [ ] shall not be permitted. If permitted,
Employees [X] may [ ] may not make Rollover Contributions
prior to meeting the eligibility requirements for
participation in the Plan.
(b) Transfer Contributions, as described at paragraph 4.4 of the
Basic Plan Document #04 [X] shall [ ] shall not be
permitted. If permitted, Employees [X] may [ ] may not make
Transfer Contributions prior to meeting the eligibility
requirements for participation in the Plan.
NOTE: Even if available, the Employer may refuse to accept such
contributions if its Plan meets the safe-harbor rules of
paragraph 8.7 of the Basic Plan Document #04.
15. HARDSHIP WITHDRAWALS
Hardship withdrawals, as provided for in paragraph 6.9 of the Basic
Plan Document #04, [X] are [ ] are not permitted.
16. PARTICIPANT LOANS
Participant loans, as provided for in paragraph 13.5 of the Basic Plan
Document #04, [X] are [ ] are not permitted. If permitted, repayments
of principal and interest shall be repaid to [X] the Participant's
segregated account or [ ] the general Fund.
17. RESERVED
18. EMPLOYER INVESTMENT DIRECTION
The Employer investment direction provisions, as set forth in
paragraph 13.7 of the Basic Plan Document #04, [ ] shall [X] shall not
be applicable.
19. EMPLOYEE INVESTMENT DIRECTION
(a) The Employee investment direction provisions, as set forth
in paragraph 13.8 of the Basic Plan Document #04, [X] shall
[ ] shall not be applicable.
If applicable, Participants may direct their investments
among funds offered by the Trustee.
[ ] (ii) among any allowable investments.
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Prototype Cash or
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(b) Participants may direct the following kinds of contributions
and the earnings thereon (check all applicable):
[X] (i) All Contributions
[ ] (ii) Elective Deferrals
[ ] (iii) Employee Voluntary Contributions (after-tax)
[ ] (iv) Employee Mandatory Contributions (after-tax)
[ ] (v) Employer Qualified Matching Contributions
[ ] (vi) Other Employer Matching Contributions
[ ] (vii) Employer Qualified Non-Elective Contributions
[ ] (viii)Employer Discretionary Contributions
[ ] (ix) Rollover Contributions
[ ] (x) Transfer Contributions
[ ] (xi) All of above which are checked, but only to the
extent that the Participant is vested in those
contributions.
NOTE: To the extent that Employee investment direction was
previously allowed, the Trustee shall have the right to
either make the assets part of the general Trust, or
leave them as separately invested subject to the rights
of paragraph 13.8.
The Plan [ ] is [ ] is not intended to constitute a plan
described in section 404(c) of the Employee Retirement
Income Security Act and regulations thereunder. If the
Plan is intended to constitute an ERISA section 404(c)
plan, the fiduciaries of the plan may be relieved of
liability for any losses which are the direct and
necessary result of investment instructions given by a
Participant.
20. EARLY PAYMENT OPTION
(a) A Participant who separates from Service prior to
retirement, death or Disability [X] may [ ] may not make
application to the Employer requesting an early payment of
his or her vested account balance.
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(b) A Participant who has attained age 59-1/2 and who has not
separated from Service [X] may [ ] may not obtain a
distribution of his or her vested Employer contributions.
Distribution can only be made if the Participant is 100%
vested.
(c) A Participant who has attained the Plan's Normal Retirement
Age and who has not separated from Service [X] may [ ] may
not receive a distribution of his or her vested account
balance.
NOTE: If the Participant has had the right to withdraw his or
her account balance in the past, this right may not be
taken away. Notwithstanding the above, to the contrary,
required minimum distributions will be paid. For timing
of distributions, see item 21(a) below.
21. DISTRIBUTION OPTIONS
(a) Timing of Distributions:
In cases of termination for other than death, Disability or
retirement, benefits shall be paid:
[ ] (i) As soon as administratively feasible, following
the close of the valuation period during which a
distribution is requested or is otherwise payable.
[ ] (ii) As soon as administratively feasible following
the close of the Plan Year during which a distribution
is requested or is otherwise payable.
[X] (iii) As soon as administratively feasible, following the
date on which a distribution is requested or is
otherwise payable.
[ ] (iv) As soon as administratively feasible, after the
close of the Plan Year during which the Participant
incurs _______ consecutive one-year Breaks in Service.
[ ] (v) Only after the Participant has achieved the
Plan's Normal Retirement Age, or Early Retirement Age,
if applicable.
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In cases of death, Disability or retirement, benefits shall be
paid:
[ ] (vi) As soon as administratively feasible, following the
close of the valuation period during which a
distribution is requested or is otherwise payable.
[ ] (vii) As soon as administratively feasible following
the close of the Plan Year during which a distribution
is requested or is otherwise payable.
[X] (viii)As soon as administratively feasible, following the
date on which a distribution is requested or is
otherwise payable.
(b) Optional Forms of Payment:
[X] (i) Lump Sum.
[ ] (ii) Installment Payments.
[ ] (iii) Life Annuity*.
[ ] (iv) Life Annuity Term Certain*.
Life Annuity with payments guaranteed for _____ years
(not to exceed 20 years, specify all applicable).
[ ] (v) Joint and [ ] 50%, [ ] 66-2/3%, [ ] 75% or [ ] 100%
survivor annuity* (specify all applicable).
[ ] (vi) Other form(s) specified: _____________________________
*Not available in Plan meeting provisions of paragraph 8.7 of
Basic Plan Document #04.
(c) Recalculation of Life Expectancy:
In determining required distributions under the Plan,
Participants and/or their Spouse (Surviving Spouse) [X] shall
[ ] shall not have the right to have their life expectancy
recalculated annually.
If "shall",
[ ] only the Participant shall be recalculated.
[ ] both the Participant and Spouse shall be recalculated.
28
<PAGE>
Prototype Cash or
Deferred Profit-
Sharing Plan #002
[X] who is recalculated shall be determined by the
Participant.
22. SPONSOR CONTACT
Employers should direct questions concerning the language contained in
and qualification of the Prototype to:
Daniel T. Notartomaso
(Job Title) Senior Manager
(Phone Number) (617)575-2151
In the event that the Sponsor amends, discontinues or abandons this
Prototype Plan, notification will be provided to the Employer's
address provided on the first page of this Agreement.
29
<PAGE>
Prototype Cash or
Deferred Profit-
Sharing Plan #002
23. SIGNATURES:
Due to the significant tax ramifications, the Sponsor recommends that
before you execute this Adoption Agreement, you contact your attorney
or tax advisor, if any.
(a) EMPLOYER:
Name and address of Employer if different than specified in
Section 1 above.
This agreement and the corresponding provisions of the Plan and
Trust/Custodial Account Basic Plan Document #04 were adopted by
the Employer the day of ____________, 19__.
Signed for the Employer by:
Title:
Signature: ___________________________________________________
The Employer understands that its failure to properly complete
the Adoption Agreement may result in disqualification of its
Plan.
Employer's Reliance: The adopting Employer may not rely on an
opinion letter issued by the National Office of the Internal
Revenue Service as evidence that the Plan is qualified under Code
Section 401. In order to obtain reliance with respect to Plan
qualification, the Employer must apply to the appropriate Key
District Office for a determination letter.
This Adoption Agreement may only be used in conjunction with
Basic Plan Document #04.
30
<PAGE>
Prototype Cash or
Deferred Profit-
Sharing Plan #002
[X] (b) TRUSTEE:
Name of Trustee:
BankBoston, NA
The assets of the Fund shall be invested in accordance with
paragraph 13.3 of the Basic Plan Document #04 as a Trust. As
such, the Employer's Plan as contained herein was accepted by the
Trustee the ___ day of ______________, 19__
Signed for the Trustee by:
Title:
Signature: _________________________ ___________________________
[ ] (c) CUSTODIAN:
Name of Custodian:
The assets of the Fund shall be invested in accordance with
paragraph 13.4 of the Basic Plan Document #04 as a Custodial
Account. As such, the Employer's Plan as contained herein was
accepted by the Custodian the ___ day of ______________, 19___.
Signed for the Custodian by:
Title:
Signature: _________________________ ___________________________
(d) SPONSOR:
The Employer's Agreement and the corresponding provisions of the
Plan and Trust/Custodial Account Basic Plan Document #04 were
accepted by the Sponsor the ___ day of _______________, 19__ .
Signed for the Sponsor by:
Title:
Signature: _________________________
31
<PAGE>
PROTOTYPE CASH OR DEFERRED PROFIT-SHARING PLAN
AND TRUST/CUSTODIAL ACCOUNT
Sponsored By
BankBoston, N.A.
Canton, Massachusetts
BASIC PLAN DOCUMENT #04
DECEMBER 1995
<PAGE>
COPYRIGHT 1993 McKAY HOCHMAN CO., INC.
THIS DOCUMENT IS COPYRIGHTED UNDER THE LAWS OF THE UNITED STATES. USE,
DUPLICATION OR REPRODUCTION, INCLUDING THE USE OF ELECTRONIC MEANS, IS
PROHIBITED BY LAW WITHOUT THE EXPRESS CONSENT OF THE AUTHOR.
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PARAGRAPH PAGE
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<S> <C> <C>
ARTICLE I
DEFINITIONS
1.1 Actual Deferral Percentage 1
1.2 Adoption Agreement 1
1.3 Aggregate Limit 1
1.4 Annual Additions 2
1.5 Annuity Starting Date 2
1.6 Applicable Calendar Year 2
1.7 Applicable Life Expectancy 2
1.8 Average Contribution Percentage (ACP) 3
1.9 Average Deferral Percentage (ADP) 3
1.10 Break In Service 3
1.11 Code 3
1.12 Compensation 3
1.13 Contribution Percentage 5
1.14 Custodian 6
1.15 Defined Benefit Plan 6
1.16 Defined Benefit (Plan) Fraction 6
1.17 Defined Contribution Dollar Limitation 6
1.18 Defined Contribution Plan 6
1.19 Defined Contribution (Plan) Fraction 6
1.20 Designated Beneficiary 7
1.21 Disability 7
1.22 Distribution Calendar Year 7
1.23 Early Retirement Age 7
1.24 Earned Income 7
1.25 Effective Date 7
1.26 Election Period 7
1.27 Elective Deferral 7
1.28 Eligible Participant 8
1.29 Employee 8
1.30 Employer 8
1.31 Entry Date 8
1.32 Excess Aggregate Contributions 8
1.33 Excess Amount 8
1.34 Excess Contribution 9
1.35 Excess Elective Deferrals 9
1.36 Family Member 9
1.37 First Distribution Calendar Year 9
1.38 Fund 9
1.39 Hardship 9
1.40 Highest Average Compensation 9
<PAGE>
1.41 Highly Compensated Employee 9
1.42 Hour Of Service 10
1.43 Key Employee 11
1.44 Leased Employee 11
1.45 Limitation Year 11
1.46 Master Or Prototype Plan 11
1.47 Matching Contribution 11
1.48 Maximum Permissible Amount 12
1.49 Net Profit 12
1.50 Normal Retirement Age 12
1.51 Owner-Employee 12
1.52 Paired Plans 12
1.53 Participant 12
1.54 Participant's Benefit 12
1.55 Permissive Aggregation Group 12
1.56 Plan 13
1.57 Plan Administrator 13
1.58 Plan Year 13
1.59 Present Value 13
1.60 Projected Annual Benefit 13
1.61 Qualified Deferred Compensation Plan 13
1.62 Qualified Domestic Relations Order 13
1.63 Qualified Early Retirement Age 13
1.64 Qualified Joint And Survivor Annuity 14
1.65 Qualified Matching Contribution 14
1.66 Qualified Non-Elective Contributions 14
1.67 Qualified Voluntary Contribution 14
1.68 Required Aggregation Group 14
1.69 Required Beginning Date 14
1.70 Rollover Contribution 14
1.71 Salary Savings Agreement 15
1.72 Self-Employed Individual 15
1.73 Service 15
1.74 Shareholder Employee 15
1.75 Simplified Employee Pension Plan 15
1.76 Sponsor 15
1.77 Spouse (Surviving Spouse) 15
1.78 Super Top-Heavy Plan 15
1.79 Taxable Wage Base 15
1.80 Top-Heavy Determination Date 15
1.81 Top-Heavy Plan 15
1.82 Top-Heavy Ratio 16
1.83 Top-Paid Group 17
1.84 Transfer Contribution 18
1.85 Trustee 18
1.86 Valuation Date 18
1.87 Vested Account Balance 18
1.88 Voluntary Contribution 18
1.89 Welfare Benefit Fund 18
1.90 Year Of Service 18
<PAGE>
ARTICLE II
ELIGIBILITY REQUIREMENTS
2.1 Participation 19
2.2 Change In Classification Of Employment 19
2.3 Computation Period 19
2.4 Employment Rights 19
2.5 Service With Controlled Groups 19
2.6 Owner-Employees 19
2.7 Leased Employees 20
2.8 Thrift Plans 21
ARTICLE III
EMPLOYER CONTRIBUTIONS
3.1 Amount 22
3.2 Expenses And Fees 22
3.3 Responsibility For Contributions 22
3.4 Return Of Contributions 22
ARTICLE IV
EMPLOYEE CONTRIBUTIONS
4.1 Voluntary Contributions 23
4.2 Qualified Voluntary Contributions 23
4.3 Rollover Contribution 23
4.4 Transfer Contribution 24
4.5 Employer Approval Of Transfer Contributions 24
4.6 Elective Deferrals 24
4.7 Required Voluntary Contributions 25
4.8 Direct Rollover Of Benefits 25
ARTICLE V
PARTICIPANT ACCOUNTS
5.1 Separate Accounts 26
5.2 Adjustments To Participant Accounts 26
5.3 Allocating Employer Contributions 27
5.4 Allocating Investment Earnings And Losses 27
5.5 Participant Statements 27
ARTICLE VI
RETIREMENT BENEFITS AND DISTRIBUTIONS
6.1 Normal Retirement Benefits 28
6.2 Early Retirement Benefits 28
6.3 Benefits On Termination Of Employment 28
6.4 Restrictions On Immediate Distributions 29
<PAGE>
6.5 Normal Form Of Payment 30
6.6 Commencement Of Benefits 31
6.7 Claims Procedures 31
6.8 In-Service Withdrawals 32
6.9 Hardship Withdrawal 33
ARTICLE VII
DISTRIBUTION REQUIREMENTS
7.1 Joint And Survivor Annuity Requirements 35
7.2 Minimum Distribution Requirements 35
7.3 Limits On Distribution Periods 35
7.4 Required Distributions On Or After The
Required Beginning Date 35
7.5 Required Beginning Date 36
7.6 Transitional Rule 37
7.7 Designation Of Beneficiary For Death Benefit 38
7.8 Nonexistence Of Beneficiary 38
7.9 Distribution Beginning Before Death 39
7.10 Distribution Beginning After Death 39
7.11 Distribution Of Excess Elective Deferrals 40
7.12 Distributions Of Excess Contributions 40
7.13 Distribution Of Excess Aggregate Contributions 41
ARTICLE VIII
JOINT AND SURVIVOR ANNUITY REQUIREMENTS
8.1 Applicability Of Provisions 43
8.2 Payment Of Qualified Joint And Survivor
Annuity 43
8.3 Payment Of Qualified Pre-Retirement
Survivor Annuity 43
8.4 Qualified Election 43
8.5 Notice Requirements For Qualified Joint
And Survivor Annuity 44
8.6 Notice Requirements For Qualified Pre-
Retirement Survivor Annuity 44
8.7 Special Safe-Harbor Exception For
Certain Profit-Sharing Plans 45
8.8 Transitional Joint And Survivor
Annuity Rules 45
8.9 Automatic Joint And Survivor Annuity
And Early Survivor Annuity 46
8.10 Annuity Contracts 47
ARTICLE IX
VESTING
9.1 Employee Contributions 48
9.2 Employer Contributions 48
<PAGE>
9.3 Computation Period 48
9.4 Requalification Prior To Five Consecutive
One-Year Breaks In Service 48
9.5 Requalification After Five Consecutive
One-Year Breaks In Service 48
9.6 Calculating Vested Interest 48
9.7 Forfeitures 49
9.8 Amendment Of Vesting Schedule 49
9.9 Service With Controlled Groups 49
ARTICLE X
LIMITATIONS ON ALLOCATIONS AND
ANTIDISCRIMINATION TESTING
10.1 Participation In This Plan Only 50
10.2 Disposition Of Excess Annual Additions 50
10.3 Participation In This Plan And Another
Prototype Defined Contribution Plan,
Welfare Benefit Fund, Or Other Medical
Account Maintained By The Employer 51
10.4 Disposition Of Excess Annual Additions
Under Two Plans 52
10.5 Participation In This Plan And Another
Defined Contribution Plan Which Is Not
A Master Or Prototype Plan 52
10.6 Participation In This Plan And A Defined
Benefit Plan 52
10.7 Average Deferral Percentage (ADP) Test 52
10.8 Special Rules Relating To Application
Of ADP Test 53
10.9 Recharacterization 54
10.10 Average Contribution Percentage (ACP) Test 54
10.11 Special Rules Relating To Application
Of ACP Test 55
ARTICLE XI
ADMINISTRATION
11.1 Plan Administrator 57
11.2 Trustee/Custodian 57
11.3 Administrative Fees And Expenses 58
11.4 Division Of Duties And Indemnification 58
ARTICLE XII
TRUST FUND/CUSTODIAL ACCOUNT
12.1 The Fund 60
12.2 Control Of Plan Assets 60
12.3 Exclusive Benefit Rules 60
12.4 Assignment And Alienation Of Benefits 60
<PAGE>
12.5 Determination Of Qualified Domestic
Relations Order (QDRO) 60
ARTICLE XIII
INVESTMENTS
13.1 Fiduciary Standards 62
13.2 Funding Arrangement 62
13.3 Investment Alternatives Of The Trustee 62
13.4 Duties Of The Custodian 63
13.5 Participant Loans 64
13.6 Reserved 65
13.7 Employer Investment Direction 66
13.8 Employee Investment Direction 66
ARTICLE XIV
TOP-HEAVY PROVISIONS
14.1 Applicability Of Rules 68
14.2 Minimum Contribution 68
14.3 Minimum Vesting 68
14.4 Limitations On Allocations 69
ARTICLE XV
AMENDMENT AND TERMINATION
15.1 Amendment By Sponsor 70
15.2 Amendment By Employer 70
15.3 Termination 70
15.4 Qualification Of Employer's Plan 70
15.5 Mergers And Consolidations 71
15.6 Resignation And Removal 71
15.7 Qualification Of Prototype 71
ARTICLE XVI
GOVERNING LAW 72
</TABLE>
<PAGE>
PROTOTYPE CASH OR DEFERRED PROFIT-SHARING PLAN AND TRUST/CUSTODIAL
ACCOUNT
Sponsored By
BankBoston, N.A.
The Sponsor hereby establishes the following Prototype Retirement Plan and
Trust/Custodial Account for use by those of its customers who qualify and wish
to adopt a qualified retirement program. Any Plan and Trust/Custodial Account
established hereunder shall be administered for the exclusive benefit of
Participants and their beneficiaries under the following terms and conditions:
ARTICLE I
DEFINITIONS
1.1 Actual Deferral Percentage The ratio (expressed as a percentage and
calculated separately for each Participant) of:
(a) the amount of Employer contributions [as defined at (c) and (d)]
actually paid over to the Fund on behalf of such Participant for the
Plan Year to
(b) the Participant's Compensation for such Plan Year. Compensation will
only include amounts for the period during which the Employee was
eligible to participate.
Employer contributions on behalf of any Participant shall include:
(c) any Elective Deferrals made pursuant to the Participant's deferral
election, including Excess Elective Deferrals, but excluding Elective
Deferrals that are either taken into account in the Contribution
Percentage test (provided the ADP test is satisfied both with and
without exclusion of these Elective Deferrals) or are returned as
excess Annual Additions; and
(d) at the election of the Employer, Qualified Non-Elective Contributions
and Qualified Matching Contributions.
For purposes of computing Actual Deferral Percentages, an Employee who would be
a Participant but for the failure to make Elective Deferrals shall be treated as
a Participant on whose behalf no Elective Deferrals are made.
1.2 Adoption Agreement The document attached to this Plan by which an Employer
elects to establish a qualified retirement plan and trust/custodial account
under the terms of this Prototype Plan and Trust/Custodial Account.
1.3 Aggregate Limit The sum of:
(a) 125 percent of the greater of the ADP of the non-Highly Compensated
Employees for the Plan Year or the ACP of non-Highly Compensated
<PAGE>
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 as described in Code Section 401(k) or Code Section
402(h)(1)(B), and
(b) the lesser of 200% or two percent plus the lesser of such ADP or ACP.
Alternatively, the aggregate limit can be determined by substituting "the lesser
of 200% or 2 percent plus" for "125% of" in (a) above, and substituting "125%
of" for "the lesser of 200% or 2 percent plus" in (b) above.
1.4 Annual Additions The sum of the following amounts credited to a
Participant's account for the Limitation Year:
(a) Employer Contributions,
(b) Employee Contributions (under Article IV),
(c) forfeitures,
(d) amounts allocated after March 31, 1984 to an individual medical
account, as defined in Code Section 415(l)(2), which is part of a
pension or annuity plan maintained by the Employer (these amounts are
treated as Annual Additions to a Defined Contribution Plan though they
arise under a Defined Benefit Plan), and
(e) amounts derived from contributions paid or accrued after 1985, in
taxable years ending after 1985, which are either attributable to
post-retirement medical benefits allocated to the account of a Key
Employee, or to a Welfare Benefit Fund maintained by the Employer, are
also treated as Annual Additions to a Defined Contribution Plan. For
purposes of this paragraph, an Employee is a Key Employee if he or she
meets the requirements of paragraph 1.43 at any time during the Plan
Year or any preceding Plan Year. Welfare Benefit Fund is defined at
paragraph 1.89.
Excess amounts applied in a Limitation Year to reduce Employer contributions
will be considered Annual Additions for such Limitation Year, pursuant to the
provisions of Article X.
1.5 Annuity Starting Date The first day of the first period for which an amount
is paid as an annuity or in any other form.
1.6 Applicable Calendar Year The First Distribution Calendar Year, and in the
event of the recalculation of life expectancy, such succeeding calendar year. If
payments commence in accordance with paragraph 7.4(e) before the Required
Beginning Date, the Applicable Calendar Year is the year such payments commence.
If distribution is in the form of an immediate annuity purchased after the
Participant's death with the Participant's remaining interest, the Applicable
Calendar Year is the year of purchase.
1.7 Applicable Life Expectancy Used in determining the required minimum
distribution. The life expectancy (or joint and last survivor expectancy)
calculated using the attained age of the Participant (or Designated Beneficiary)
as of the Participant's (or Designated Beneficiary's) birthday in the Applicable
Calendar Year reduced by one for each calendar year which has elapsed since the
date life expectancy was first calculated. If life expectancy is being
recalculated, the Applicable Life Expectancy shall be the life expectancy as so
recalculated. The life expectancy of a non-Spouse Beneficiary may not be
recalculated.
1.8 Average Contribution Percentage (ACP) The average of the Contribution
Percentages for each Highly Compensated Employee and for each non-Highly
Compensated Employee.
<PAGE>
1.9 Average Deferral Percentage (ADP) The average of the Actual Deferral
Percentages for each Highly Compensated Employee and for each non-Highly
Compensated Employee.
1.10 Break In Service A 12-consecutive month period during which an Employee
fails to complete more than 500 Hours of Service.
1.11 Code The Internal Revenue Code of 1986, including any amendments.
1.12 Compensation The Employer may select one of the following three safe-harbor
definitions of Compensation in the Adoption Agreement. Compensation shall only
include amounts earned while a Participant if Plan Year is chosen as the
applicable computation period.
(a) Code Section 3401(a) Wages. Compensation is defined as wages within the
meaning of Code Section 3401(a) for the purposes of Federal income tax
withholding at the source but determined without regard to any rules
that limit the remuneration included in wages based on the nature or
location of the employment or the services performed [such as the
exception for agricultural labor in Code Section 3401(a)(2)].
(b) Code Section 6041 and 6051 Wages. Compensation is defined as wages as
defined in Code Section 3401(a) and all other payments of compensation
to an Employee by the Employer (in the course of the Employer's trade
or business) for which the Employer is required to furnish the employee
a written statement under Code Section 6041(d) and 6051(a)(3).
Compensation must be determined without regard to any rules under Code
Section 3401(a) that limit the remuneration included in wages based on
the nature or location of the employment or the services performed
[such as the exception for agricultural labor in Code Section
3401(a)(2)].
(c) Code Section 415 Compensation. For purposes of applying the limitations
of Article X and Top-Heavy Minimums, the definition of Compensation
shall be Code Section 415 Compensation defined as follows: a
Participant's Earned Income, wages, salaries, and fees for professional
services and other amounts received (without regard to whether or not
an amount is paid in cash) for personal services actually rendered in
the course of employment with the Employer maintaining the Plan to the
extent that the amounts are includible in gross income [including, but
not limited to, commissions paid salesmen, Compensation for services on
the basis of a percentage of profits, commissions on insurance
premiums, tips, bonuses, fringe benefits and reimbursements or other
expense allowances under a nonaccountable plan (as described in
Regulation 1.62-2(c)], and excluding the following:
1. Employer contributions to a plan of deferred compensation
which are not includible in the Employee's gross income for
the taxable year in which contributed, or Employer
contributions under a Simplified Employee Pension Plan or any
distributions from a plan of deferred compensation,
2. Amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by the
<PAGE>
Employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture,
3. Amounts realized from the sale, exchange or other disposition
of stock acquired under a qualified stock option; and
4. other amounts which received special tax benefits, or
contributions made by the Employer (whether or not under a
salary reduction agreement) towards the purchase of an annuity
contract described in Code Section 403(b) (whether or not the
contributions are actually excludible from the gross income of
the Employee).
For purposes of applying the limitations of Article X and Top-Heavy Minimums,
the definition of Compensation shall be Code Section 415 Compensation described
in this paragraph 1.12(c). Also, for purposes of applying the limitations of
Article X, Compensation for a Limitation Year is the Compensation actually paid
or made available during such Limitation Year. Notwithstanding the preceding
sentence, Compensation for a Participant in a defined contribution plan who is
permanently and totally disabled [as defined in Code Section 22(e)(3)] is the
Compensation such Participant would have received for the Limitation Year if the
Participant had been paid at the rate of Compensation paid immediately before
becoming permanently and totally disabled. Such imputed Compensation for the
disabled Participant may be taken into account only if the participant is not a
Highly Compensated Employee [as defined in Code Section 414(q)] and
contributions made on behalf of such Participant are nonforfeitable when made.
If the Employer fails to pick the applicable period in the Adoption Agreement,
the Plan Year shall be used. Unless otherwise specified by the Employer in the
Adoption Agreement, Compensation shall be determined as provided in Code Section
3401(a) [as defined in this paragraph 1.12(a)]. In nonstandardized Adoption
Agreement 002, the Employer may choose to eliminate or exclude categories of
Compensation which do not violate the provisions of Code Sections 401(a)(4),
414(s) the regulations thereunder and Revenue Procedure 89-65.
Beginning with 1989 Plan Years, the annual Compensation of each Participant
which may be taken into account for determining all benefits provided under the
Plan (including benefits under Article XIV) for any year shall not exceed
$200,000, as adjusted under Code Section 415(d). In determining the Compensation
of a Participant for purposes of this limitation, the rules of Code Section
414(q)(6) shall apply, except in applying such rules, the term "family" shall
include only the Spouse of the Participant and any lineal descendants of the
Participant who have not attained age 19 before the end of the Plan year. If, as
a result of the application of such rules the adjusted $200,000 limitation is
exceeded, then (except for purposes of determining the portion of Compensation
up to the integration level if this Plan provides for permitted disparity), the
limitation shall be prorated among the affected individuals in proportion to
each such individual's Compensation as determined under this section prior to
the application of this limitation.
If a Plan has a Plan Year that contains fewer than 12 calendar months, then the
annual Compensation limit for that period is an amount equal to the $200,000 as
adjusted for the calendar year in which the Compensation period begins,
multiplied by a fraction the numerator of which is the number of full months in
the Short Plan Year and the denominator of which is 12. If Compensation for any
prior Plan Year is taken into account in determining an Employee's contributions
or benefits for the current year, the Compensation for such prior year is
subject to the applicable annual Compensation limit in effect for that prior
year. For this purpose, for years beginning before January 1, 1990, the
applicable annual Compensation limit is $200,000. For 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
<PAGE>
for any Plan Year shall not exceed $150,000, as adjusted for increases in the
cost-of-living in accordance with Code Section 401(a)(17). The cost-of-living
adjustment in effect for a calendar year applies to any determination period
beginning in such calendar year.
Compensation shall not include deferred Compensation other than contributions
through a salary reduction agreement to a cash or deferred plan under Code
Section 401(k), a Simplified Employee Pension Plan under Code Section
402(h)(1)(B), a cafeteria plan under Code Section 125 or a tax-deferred annuity
under Code Section 403(b). Unless elected otherwise by the Employer in the
Adoption Agreement, these deferred amounts will be considered as Compensation
for Plan purposes. These deferred amounts are not counted as Compensation for
purposes of Articles X and XIV. When applicable to a Self-Employed Individual,
Compensation shall mean Earned Income.
1.13 Contribution Percentage The ratio (expressed as a percentage and calculated
separately for each Participant) of:
(a) the Participant's Contribution Percentage Amounts [as defined at
(c)-(f)] for the Plan Year, to
(b) the Participant's Compensation for the Plan Year. Compensation will
only include amounts for the period during which the Employee was
eligible to participate.
Contribution Percentage Amounts on behalf of any Participant shall include:
(c) the amount of Employee Voluntary Contributions, Matching Contributions,
and Qualified Matching Contributions (to the extent not taken into
account for purposes of the ADP test) made under the Plan on behalf of
the Participant for the Plan Year,
(d) forfeitures of Excess Aggregate Contributions or Matching Contributions
allocated to the Participant's account which shall be taken into
account in the year in which such forfeiture is allocated,
(e) at the election of the Employer, Qualified Non-Elective Contributions,
and
(f) the Employer also may elect to use Elective Deferrals in the
Contribution Percentage Amounts so long as the ADP test is met before
the Elective Deferrals are used in the ACP test and continues to be met
following the exclusion of those Elective Deferrals that are used to
meet the ACP test.
Contribution Percentage Amounts shall not include Matching Contributions,
whether or not Qualified, that are forfeited either to correct Excess Aggregate
Contributions, or because the contributions to which they relate are Excess
Deferrals, Excess Contributions, or Excess Aggregate Contributions.
1.14 Custodian The Sponsor of this Prototype, or, if applicable, an affiliate or
successor, shall serve as Custodian if a Custodian is appointed in the Adoption
Agreement.
1.15 Defined Benefit Plan A Plan under which a Participant's benefit is
determined by a formula contained in the Plan and no individual accounts are
maintained for Participants.
1.16 Defined Benefit (Plan) Fraction A fraction, the numerator of which is the
sum of the Participant's Projected Annual Benefits under all the Defined Benefit
Plans (whether or not terminated) maintained by the Employer, and the
denominator of which is the lesser of 125 percent of the dollar
<PAGE>
limitation determined for the Limitation Year under Code Sections 415(b) and (d)
or 140 percent of the Highest Average Compensation, including any adjustments
under Code Section 415(b).
Notwithstanding the above, if the Participant was a Participant as of the first
day of the first Limitation Year beginning after 1986, in one or more Defined
Benefit Plans maintained by the Employer which were in existence on May 6, 1986,
the denominator of this fraction will not be less than 125 percent of the sum of
the annual benefits under such plans which the Participant had accrued as of the
close of the last Limitation Year beginning before 1987, disregarding any
changes in the terms and conditions of the plan after May 5, 1986. The preceding
sentence applies only if the Defined Benefit Plans individually and in the
aggregate satisfied the requirements of Section 415 for all Limitation Years
beginning before 1987.
1.17 Defined Contribution Dollar Limitation Thirty thousand dollars ($30,000) or
if greater, one-fourth of the defined benefit dollar limitation set forth in
Code Section 415(b)(1) as in effect for the Limitation Year.
1.18 Defined Contribution Plan A Plan under which individual accounts are
maintained for each Participant to which all contributions, forfeitures,
investment income and gains or losses, and expenses are credited or deducted. A
Participant's benefit under such Plan is based solely on the fair market value
of his or her account balance.
1.19 Defined Contribution (Plan) Fraction A Fraction, the numerator of which is
the sum of the Annual Additions to the Participant's account under all the
Defined Contribution Plans (whether or not terminated) maintained by the
Employer for the current and all prior Limitation Years (including the Annual
Additions attributable to the Participant's nondeductible Employee contributions
to all Defined Benefit Plans, whether or not terminated, maintained by the
Employer, and the Annual Additions attributable to all Welfare Benefit Funds, as
defined in paragraph 1.89 and individual medical accounts, as defined in Code
Section 415(l)(2), maintained by the Employer), and the denominator of which is
the sum of the maximum aggregate amounts for the current and all prior
Limitation Years of service with the Employer (regardless of whether a Defined
Contribution Plan was maintained by the Employer). The maximum aggregate amount
in the Limitation Year is the lesser of 125 percent of the dollar limitation
determined under Code Sections 415(b) and (d) in effect under Code Section
415(c)(1)(A) or 35 percent of the Participant's Compensation for such year.
If the Employee was a Participant as of the end of the first day of the first
Limitation Year beginning after 1986, in one or more Defined Contribution Plans
maintained by the Employer which were in existence on May 6, 1986, the numerator
of this fraction will be adjusted if the sum of this fraction and the Defined
Benefit Fraction would otherwise exceed 1.0 under the terms of this Plan. Under
the adjustment, an amount equal to the product of (1) the excess of the sum of
the fractions over 1.0 times (2) the denominator of this fraction will be
permanently subtracted from the numerator of this fraction. The adjustment is
calculated using the fractions as they would be computed as of the end of the
last Limitation Year beginning before 1987, and disregarding any changes in the
terms and conditions of the Plan made after May 6, 1986, but using the Section
415 limitation applicable to the first Limitation Year beginning on or after
January 1, 1987. The Annual Addition for any Limitation Year beginning before
1987, shall not be re-computed to treat all Employee Contributions as Annual
Additions.
1.20 Designated Beneficiary The individual who is designated as the beneficiary
under the Plan in accordance with Code Section 401(a)(9) and the regulations
thereunder.
1.21 Disability An illness or injury of a potentially permanent nature, expected
to last for a continuous period of not less than 12 months, certified by a
physician selected by or satisfactory to the Employer, which prevents the
Employee from engaging in any occupation for wage or profit for which the
Employee is reasonably fitted by training, education or experience.
<PAGE>
1.22 Distribution Calendar Year A calendar year for which a minimum distribution
is required.
1.23 Early Retirement Age The age set by the Employer in the Adoption Agreement
(but not less than 55), which is the earliest age at which a Participant may
retire and receive his or her benefits under the Plan.
1.24 Earned Income Net earnings from self-employment in the trade or business
with respect to which the Plan is established, determined without regard to
items not included in gross income and the deductions allocable to such items,
provided that personal services of the individual are a material
income-producing factor. Earned income shall be reduced by contributions made by
an Employer to a qualified plan to the extent deductible under Code Section 404.
For tax years beginning after 1989, net earnings shall be determined taking into
account the deduction for one-half of self-employment taxes allowed to the
Employer under Code Section 164(f) to the extent deductible.
1.25 Effective Date The date on which the Employer's retirement plan or
amendment to such plan becomes effective. For amendments reflecting statutory
and regulatory changes post Tax Reform Act of 1986, the Effective Date will be
the earlier of the date upon which such amendment is first administratively
applied or the first day of the Plan Year following the date of adoption of such
amendment.
1.26 Election Period The period which begins on the first day of the Plan Year
in which the Participant attains age 35 and ends on the date of the
Participant's death. If a Participant separates from service prior to the first
day of the Plan Year in which age 35 is attained, the Election Period shall
begin on the date of separation, with respect to the account balance as of the
date of separation.
1.27 Elective Deferral Employer contributions made to the Plan at the election
of the Participant, in lieu of cash Compensation. Elective Deferrals shall also
include contributions made pursuant to a Salary Savings Agreement or other
deferral mechanism, such as a cash option contribution. With respect to any
taxable year, a Participant's Elective Deferral is the sum of all Employer
contributions made on behalf of such Participant pursuant to an election to
defer under any qualified cash or deferred arrangement as described in 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 the behalf of a Participant for the purchase
of an annuity contract under Code Section 403(b) pursuant to a Salary Savings
Agreement. Elective Deferrals shall not include any deferrals properly
distributed as Excess Annual Additions.
1.28 Eligible Participant Any Employee who is eligible to make a Voluntary
Contribution, or an Elective Deferral (if the Employer takes such contributions
into account in the calculation of the Contribution Percentage), or to receive a
Matching Contribution (including forfeitures) or a Qualified Matching
Contribution. If a Voluntary Contribution or Elective Deferral is required as a
condition of participation in the Plan, any Employee who would be a Participant
in the Plan if such Employee made such a contribution shall be treated as an
Eligible Participant even though no Voluntary Contributions or Elective
Deferrals are made.
1.29 Employee Any person employed by the Employer (including Self-Employed
Individuals and partners), all Employees of a member of an affiliated service
group [as defined in Code Section 414(m)], Employees of a controlled group of
corporations [as defined in Code Section 414(b)], all Employees of any
incorporated or unincorporated trade or business which is under common control
[as defined in Code Section 414(c)], Leased Employees [as defined in Code
Section 414(n)] and any Employee required to be
<PAGE>
aggregated by Code Section 414(o). All such Employees shall be treated as
employed by a single Employer.
1.30 Employer The Self-Employed Individual, partnership, corporation or other
organization which adopts this Plan including any firm that succeeds the
Employer and adopts this Plan. For purposes of Article X, Limitations on
Allocations, Employer shall mean the Employer that adopts this Plan, and all
members of a controlled group of corporations [as defined in Code Section 414(b)
as modified by Code Section 415(h)], all commonly controlled trades or
businesses [as defined in Code Section 414(c) as modified by Code Section
415(h)] or affiliated service groups [as defined in Code Section 414(m)] of
which the adopting Employer is a part, and any other entity required to be
aggregated with the Employer pursuant to regulations under Code Section 414(o).
1.31 Entry Date The date on which an Employee commences participation in the
Plan as determined by the Employer in the Adoption Agreement.
1.32 Excess Aggregate Contributions The excess, with respect to any Plan Year,
of:
(a) The aggregate Contribution Percentage Amounts taken into account in
computing the numerator of the Contribution Percentage actually made on
behalf of Highly Compensated Employees for such Plan Year, over
(b) The maximum Contribution Percentage Amounts permitted by the ACP test
(determined by reducing contributions made on behalf of Highly
Compensated Employees in order of their Contribution Percentages
beginning with the highest of such percentages).
Such determination shall be made after first determining Excess Elective
Deferrals pursuant to paragraph 1.35 and then determining Excess Contributions
pursuant to paragraph 1.34.
1.33 Excess Amount The excess of the Participant's Annual Additions for the
Limitation Year over the Maximum Permissible Amount.
1.34 Excess Contribution With respect to any Plan Year, the excess of:
(a) The aggregate amount of Employer contributions actually taken into
account in computing the ADP of Highly Compensated Employees for such
Plan Year, over
(b) The maximum amount of such contributions permitted by the ADP test
(determined by reducing contributions made on behalf of Highly
Compensated Employees in order of the ADPs, beginning with the highest
of such percentages).
1.35 Excess Elective Deferrals Those Elective Deferrals that are includible in a
Participant's gross income under Code Section 402(g) to the extent such
Participant's Elective Deferrals for a taxable year exceed the dollar limitation
under such Code Section. Excess Elective Deferrals shall be treated as Annual
Additions under the Plan, unless such amounts are distributed no later than the
first April 15th following the close of the Participant's taxable year.
1.36 Family Member The Employee's Spouse, any lineal descendants and ascendants
and the Spouse of such lineal descendants and ascendants.
<PAGE>
1.37 First Distribution Calendar Year For distributions beginning before the
Participant's death, the First Distribution Calendar Year is the calendar year
immediately preceding the calendar year which contains the Participant's
Required Beginning Date. For distributions beginning after the Participant's
death, the First Distribution Calendar Year is the calendar year in which
distributions are required to begin pursuant to paragraph 7.10.
1.38 Fund All contributions received by the Trustee/Custodian under this Plan
and Trust/Custodial Account, investments thereof and earnings and appreciation
thereon.
1.39 Hardship An immediate and heavy financial need of the Employee where such
Employee lacks other available resources.
1.40 Highest Average Compensation The average Compensation for the three
consecutive Years of Service with the Employer that produces the highest
average. A Year of Service with the Employer is the 12-consecutive month period
defined in the Adoption Agreement.
1.41 Highly Compensated Employee Any Employee who performs service for the
Employer during the determination year and who, during the immediate prior year:
(a) received Compensation from the Employer in excess of $75,000 [as
adjusted pursuant to Code Section 415(d)]; or
(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).
Notwithstanding (a), (b) and (c), an Employee who was not Highly Compensated
during the preceding Plan Year shall not be treated as a Highly Compensated
Employee with respect to the current Plan Year unless such Employee is a member
of the 100 Employees paid the greatest Compensation during the year for which
such determination is being made.
(d) Employees who are five percent (5%) Owners at any time during the
immediate prior year or determination year.
Highly Compensated Employee includes Highly Compensated active Employees and
Highly Compensated former Employees.
1.42 Hour Of Service
(a) Each hour for which an Employee is paid, or entitled to payment, for
the performance of duties for the Employer. These hours shall be
credited to the Employee for the computation period in which the duties
are performed; and
(b) Each hour for which an Employee is paid, or entitled to payment, by the
Employer on account of a period of time during which no duties are
performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of absence. No
more than 501 Hours of Service shall be credited under this paragraph
for any single continuous period (whether or not such period occurs in
a single computation period). Hours under this paragraph
<PAGE>
shall be calculated and credited pursuant to Section 2530.200b-2 of the
Department of Labor Regulations which are incorporated herein by this
reference; and
(c) Each hour for which back pay, irrespective of mitigation of damages, is
either awarded or agreed to by the Employer. The same Hours of Service
shall not be credited both under paragraph (a) or paragraph (b), as the
case may be, and under this paragraph (c). These hours shall be
credited to the Employee for the computation period or periods to which
the award or agreement pertains rather than the computation period in
which the award, agreement or payment is made.
(d) Hours of Service shall be credited for employment with the Employer and
with other members of an affiliated service group [as defined in Code
Section 414(m)], a controlled group of corporations [as defined in Code
Section 414(b)], or a group of trades or businesses under common
control [as defined in Code Section 414(c)] of which the adopting
Employer is a member, and any other entity required to be aggregated
with the Employer pursuant to Code Section 414(o) and the regulations
thereunder. Hours of Service shall also be credited for any individual
considered an Employee for purposes of this Plan under Code Section
414(n) or Code Section 414(o) and the regulations thereunder.
(e) Solely for purposes of determining whether a Break in Service, as
defined in paragraph 1.10, for participation and vesting purposes has
occurred in a computation period, an individual who is absent from work
for maternity or paternity reasons shall receive credit for the Hours
of Service which would otherwise have been credited to such individual
but for such absence, or in any case in which such hours cannot be
determined, 8 Hours of Service per day of such absence. For purposes of
this paragraph, an absence from work for maternity or paternity reasons
means an absence by reason of the pregnancy of the individual, by
reason of a birth of a child of the individual, by reason of the
placement of a child with the individual in connection with the
adoption of such child by such individual, or for purposes of caring
for such child for a period beginning immediately following such birth
or placement. The Hours of Service credited under this paragraph shall
be credited 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. No
more than 501 hours will be credited under this paragraph.
(f) Hours of Service shall be determined on the basis of the method
selected in the Adoption Agreement.
1.43 Key Employee Any Employee or former Employee (and the beneficiaries of such
employee) who at any time during the determination period was an officer of the
Employer if such individual's annual compensation exceeds 50% of the dollar
limitation under Code Section 415(b)(1)(A) (the defined benefit maximum annual
benefit), an owner (or considered an owner under Code Section 318) of one of the
ten largest interests in the employer if such individual's compensation exceeds
100% of the dollar limitation under Code Section 415(c)(1)(A), a 5% owner of the
Employer, or a 1% owner of the Employer who has an annual compensation of more
than $150,000. For purposes of determining who is a Key Employee, annual
compensation shall mean Compensation as defined for Article X, but including
amounts deferred through a salary reduction agreement to a cash or deferred plan
under Code Section 401(k), a Simplified Employee Pension Plan under Code Section
408(k), a cafeteria plan under Code Section 125 or a tax-deferred annuity under
Code Section 403(b). The determination period is the Plan
<PAGE>
Year containing the Determination Date and the four preceding Plan Years. The
determination of who is a Key Employee will be made in accordance with Code
Section 416(i)(1) and the regulations thereunder.
1.44 Leased Employee Any person (other than an Employee of the recipient) who,
pursuant to an agreement between the recipient and any other person ("leasing
organization"), has performed services for the recipient [or for the recipient
and related persons determined in accordance with 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.
1.45 Limitation Year The calendar year or such other 12-consecutive month period
designated by the Employer in the Adoption Agreement for purposes of determining
the maximum Annual Addition to a Participant's account. All qualified plans
maintained by the Employer must use the same Limitation Year. If the Limitation
Year is amended to a different 12-consecutive month period, the new Limitation
Year must begin on a date within the Limitation Year in which the amendment is
made.
1.46 Master Or Prototype Plan A plan, the form of which is the subject of a
favorable opinion letter from the Internal Revenue Service.
1.47 Matching Contribution An Employer contribution made to this or any other
defined contribution plan on behalf of a Participant on account of an Employee
Voluntary Contribution made by such Participant, or on account of a
Participant's Elective Deferral, under a Plan maintained by the Employer.
1.48 Maximum Permissible Amount The maximum Annual Addition that may be
contributed or allocated to a Participant's account under the plan for any
Limitation Year shall not exceed the lesser of:
(a) the Defined Contribution Dollar Limitation, or
(b) 25% of the Participant's Compensation for the Limitation Year.
The compensation limitation referred to in (b) shall not apply to any
contribution for medical benefits [within the meaning of 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 419(d)(2). If a short Limitation Year is created
because of an amendment changing the Limitation Year to a different
12-consecutive month period, the Maximum Permissible Amount will not exceed the
Defined Contribution Dollar Limitation multiplied by the following fraction:
Number of months in the short Limitation Year divided by 12.
1.49 Net Profit The current and accumulated operating earnings of the Employer
before Federal and State income taxes, excluding nonrecurring or unusual items
of income, and before contributions to this and any other qualified plan of the
Employer. Alternatively, the Employer may fix another definition in the Adoption
Agreement.
1.50 Normal Retirement Age The age, set by the Employer in the Adoption
Agreement, at which a Participant may retire and receive his or her benefits
under the Plan.
1.51 Owner-Employee A sole proprietor, or a partner owning more than 10% of
either the capital or profits interest of the partnership.
1.52 Paired Plans Two or more Plans maintained by the Sponsor designed so that a
single or any combination of Plans adopted by an Employer will meet the
antidiscrimination rules, the contribution and benefit limitations, and the
Top-Heavy provisions of the Code.
<PAGE>
1.53 Participant Any Employee who has met the eligibility requirements and is
participating in the Plan.
1.54 Participant's Benefit 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. A special exception exists
for the second distribution Calendar Year. For purposes of this paragraph, 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.
1.55 Permissive Aggregation Group Used for Top-Heavy testing purposes, it is the
Required Aggregation Group of plans plus any other plan or plans of the Employer
which, when considered as a group with the Required Aggregation Group, would
continue to satisfy the requirements of Code Sections 401(a)(4) and 410.
1.56 Plan The Employer's retirement plan as embodied herein and in the Adoption
Agreement.
1.57 Plan Administrator The Employer.
1.58 Plan Year The 12-consecutive month period designated by the Employer in the
Adoption Agreement.
1.59 Present Value Used for Top-Heavy test and determination purposes, when
determining the Present Value of accrued benefits, with respect to any Defined
Benefit Plan maintained by the Employer, interest and mortality rates shall be
determined in accordance with the provisions of the respective plan. If
applicable, interest and mortality assumptions will be specified in Section 11
of the Adoption Agreement.
1.60 Projected Annual Benefit Used to test the maximum benefit which may be
obtained from a combination of retirement plans, it is the annual retirement
benefit (adjusted to an actuarial equivalent straight life annuity if such
benefit is expressed in a form other than a straight life annuity or Qualified
Joint and Survivor Annuity) to which the Participant would be entitled under the
terms of a Defined Benefit Plan or plans, assuming:
(a) the Participant will continue employment until Normal Retirement Age
under the plan (or current age, if later), and
(b) the Participant's Compensation for the current Limitation Year and all
other relevant factors used to determine benefits under the plan will
remain constant for all future Limitation Years.
1.61 Qualified Deferred Compensation Plan Any pension, profit-sharing, stock
bonus, or other plan which meets the requirements of Code Section 401 and
includes a trust exempt from tax under Code Section 501(a) or any annuity plan
described in Code Section 403(a).
An Eligible Retirement Plan is an individual retirement account (IRA) as
described in Code Section 408(a), an individual retirement annuity (IRA) as
described in Code Section 408(b), an annuity plan as described in Code Section
403(a), or a qualified trust as described in Code Section 401(a), which accepts
<PAGE>
Eligible Rollover Distributions. However in the case of an Eligible Rollover
Distribution to a Surviving Spouse, an Eligible Retirement Plan is an individual
retirement account or individual retirement annuity.
1.62 Qualified Domestic Relations Order A QDRO is a signed Domestic Relations
Order issued by a State Court which creates, recognizes or assigns to an
alternate payee(s) the right to receive all or part of a Participant's Plan
benefit and which meets the requirements of Code Section 414(p). An alternate
payee is a Spouse, former Spouse, child, or other dependent who is treated as a
beneficiary under the Plan as a result of the QDRO.
1.63 Qualified Early Retirement Age For purposes of paragraph 8.9, Qualified
Early Retirement Age is the latest of:
(a) the earliest date, under the Plan, on which the Participant may elect
to receive retirement benefits, or
(b) the first day of the 120th month beginning before the Participant
reaches Normal Retirement Age, or
(c) the date the Participant begins participation.
1.64 Qualified Joint And Survivor Annuity An immediate annuity for the life of
the Participant with a survivor annuity for the life of the Participant's Spouse
which is at least one-half of but not more than the amount of the annuity
payable during the joint lives of the Participant and the Participant's Spouse.
The exact amount of the Survivor Annuity is to be specified by the Employer in
the Adoption Agreement. If not designated by the Employer, the Survivor Annuity
will be 1/2 of the amount paid to the Participant during his or her lifetime.
The Qualified Joint and Survivor Annuity will be the amount of benefit which can
be provided by the Participant's Vested Account Balance.
1.65 Qualified Matching Contribution Matching Contributions which when made are
subject to the distribution and nonforfeitability requirements under Code
Section 401(k).
1.66 Qualified Non-Elective Contributions Contributions (other than Matching
Contributions or Qualified Matching Contributions) made by the Employer and
allocated to Participants' accounts that the Participants may not elect to
receive in cash until distributed from the Plan; that are nonforfeitable when
made; and that are distributable only in accordance with the distribution
provisions that are applicable to Elective Deferrals and Qualified Matching
Contributions.
1.67 Qualified Voluntary Contribution A tax-deductible voluntary Employee
contribution. These contributions may no longer be made to the Plan.
1.68 Required Aggregation Group Used for Top-Heavy testing purposes, it consists
of:
(a) each qualified plan of the Employer in which at least one Key Employee
participates or participated at any time during the determination
period (regardless of whether the plan has terminated), and
(b) any other qualified plan of the Employer which enables a plan described
in (a) to meet the requirements of Code Sections 401(a)(4) or 410.
1.69 Required Beginning Date The date on which a Participant is required to take
his or her first minimum distribution under the Plan. The rules are set forth at
paragraph 7.5.
<PAGE>
1.70 Rollover Contribution A contribution made by a Participant of an amount
distributed to such Participant from another Qualified Deferred Compensation
Plan in accordance with Code Sections 402(a)(5), (6), and (7).
An Eligible Rollover Distribution is any distribution of all or any portion of
the balance to the credit of the Participant 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 Participant or the joint lives (or joint
life expectancies) of the Participant and the Participant'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); and
(c) the portion of any distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to Employer securities).
A Direct Rollover is a payment by the plan to the Eligible Retirement Plan
specified by the Participant.
1.71 Salary Savings Agreement An agreement between the Employer and a
participating Employee where the Employee authorizes the Employer to withhold a
specified percentage of his or her Compensation for deposit to the Plan on
behalf of such Employee.
1.72 Self-Employed Individual An individual who has Earned Income for the
taxable year from the trade or business for which the Plan is established
including an individual who would have had Earned Income but for the fact that
the trade or business had no Net Profit for the taxable year.
1.73 Service The period of current or prior employment with the Employer. If the
Employer maintains a plan of a predecessor employer, Service for such
predecessor shall be treated as Service for the Employer.
1.74 Shareholder Employee An Employee or Officer who owns [or is considered as
owning within the meaning of Code Section 318(a)(1)], on any day during the
taxable year of an electing small business corporation (S Corporation), more
than 5% of such corporation's outstanding stock.
1.75 Simplified Employee Pension Plan An individual retirement account which
meets the requirements of Code Section 408(k), and to which the Employer makes
contributions pursuant to a written formula. These plans are considered for
contribution limitation and Top-Heavy testing purposes.
1.76 Sponsor BankBoston, N.A. or any successor(s) or assign(s).
1.77 Spouse (Surviving Spouse) The Spouse or Surviving Spouse of the
Participant, provided that a former Spouse will be treated as the Spouse or
Surviving Spouse and a current Spouse will not be treated as the Spouse or
Surviving Spouse to the extent provided under a Qualified Domestic Relations
Order as described in Code Section 414(p).
1.78 Super Top-Heavy Plan A Plan described at paragraph 1.81 under which the
Top-Heavy Ratio [as defined at paragraph 1.82] exceeds 90%.
<PAGE>
1.79 Taxable Wage Base For plans with an allocation formula which takes into
account the Employer's contribution under the Federal Insurance Contributions
Act (FICA), the maximum amount of earnings which may be considered wages for
such Plan Year under the Social Security Act [Code Section 3121(a)(1)], or the
amount elected by the Employer in the Adoption Agreement.
1.80 Top-Heavy Determination Date For any Plan Year subsequent to the first Plan
Year, the last day of the preceding Plan Year. For the first Plan Year of the
Plan, the last day of that year.
1.81 Top-Heavy Plan For any Plan Year beginning after 1983, the Employer's Plan
is top-heavy if any of the following conditions exist:
(a) If the Top-Heavy Ratio for the Employer's Plan exceeds 60% and this
Plan is not part of any required Aggregation Group or Permissive
Aggregation Group of Plans.
(b) If the Employer's plan is a part of a Required Aggregation Group of
plans but not part of a Permissive Aggregation Group and the Top-Heavy
Ratio for the group of plans exceeds 60%.
(c) If the Employer's plan is a part of a Required Aggregation Group and
part of a Permissive Aggregation Group of plans and the Top-Heavy Ratio
for the Permissive Aggregation Group exceeds 60%.
1.82 Top-Heavy Ratio
(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 5-year period
ending on the Determination Date(s) has or has had accrued benefits,
the Top-Heavy Ratio for this Plan alone, or for the Required or
Permissive Aggregation Group as appropriate, is a fraction,
(1) the numerator of which is the sum of the account balances of
all Key Employees as of the Determination Date(s) [including
any part of any account balance distributed in the 5-year
period ending on the Determination Date(s)], and
(2) the denominator of which is the sum of all account balances
[including any part of any account balance distributed in the
5-year period ending on the Determination Date(s)], both
computed in accordance with Code Section 416 and the
regulations thereunder.
Both the numerator and denominator of the Top-Heavy Ratio are
increased to reflect any contribution not actually made as of the
Determination Date, but which is required to be taken into account on
that date under 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 5-year period ending on the Determination Date(s) has or has
had any accrued benefits, the Top-Heavy Ratio for any Required or
Permissive Aggregation Group as
<PAGE>
appropriate is a fraction, the numerator of which is the sum of account
balances under the aggregated Defined Contribution Plan or Plans for
all Key Employees, determined in accordance with (a) above, and the
Present Value of accrued benefits under the aggregated Defined Benefit
Plan or Plans for all Key Employees as of the Determination Date(s),
and the denominator of which is the sum of the account balances under
the aggregated Defined Contribution Plan or Plans for all Participants,
determined in accordance with (a) above, and the Present Value of
accrued benefits under the Defined Benefit Plan or Plans for all
Participants as of the Determination Date(s), all determined in
accordance with Code Section 416 and the regulations thereunder. The
accrued benefits under a Defined Benefit Plan in both the numerator and
denominator of the Top-Heavy Ratio are increased for any distribution
of an accrued benefit made in the 5-year period ending on the
Determination Date.
(c) For purposes of (a) and (b) above, the value of account balances and
the Present Value of accrued benefits will be determined as of the most
recent Valuation Date that falls within or ends with the 12-month
period ending on the Determination Date, except as provided in Code
Section 416 and the regulations thereunder for the first and second
plan years of a Defined Benefit Plan. The account balances and accrued
benefits of a participant (1) who is not a Key Employee but who was a
Key Employee in a prior year, or (2) who has not been credited with at
least one hour of service with any Employer maintaining the Plan at any
time during the 5-year period ending on the Determination Date, will be
disregarded. The calculation of the Top-Heavy Ratio, and the extent to
which distributions, rollovers, and transfers are taken into account
will be made in accordance with Code Section 416 and the regulations
thereunder. Qualified Voluntary Employee Contributions will not be
taken into account for purposes of computing the Top-Heavy Ratio. When
aggregating plans the value of account balances and accrued benefits
will be calculated with reference to the Determination Dates that fall
within the same calendar year. The accrued benefit of a Participant
other than a Key Employee shall be determined under (1) the method, if
any, that uniformly applies for accrual purposes under all Defined
Benefit Plans maintained by the Employer, or (2) if there is no such
method, as if such benefit accrued not more rapidly than the slowest
accrual rate permitted under the fractional rule of Code Section
411(b)(1)(C).
1.83 Top-Paid Group The group consisting of the top 20% of Employees when ranked
on the basis of Compensation paid during such year. For purposes of determining
the number of Employees in the group (but not who is in it), the following
Employees shall be excluded:
(a) Employees who have not completed 6 months of Service.
(b) Employees who normally work less than 17-1/2 hours per week.
(c) Employees who normally do not work more than 6 months during any year.
(d) Employees who have not attained age 21.
(e) Employees included in a collective bargaining unit, covered by an
agreement between employee representatives and the Employer, where
retirement benefits were the subject of good faith bargaining and
provided that 90% or more of the Employer's Employees are covered by
the agreement.
<PAGE>
(f) Employees who are nonresident aliens and who receive no earned income
which constitutes income from sources within the United States.
1.84 Transfer Contribution A non-taxable transfer of a Participant's benefit
directly from a Qualified Deferred Compensation Plan to this Plan.
1.85 Trustee The Sponsor of this Prototype or the individual(s) appointed by the
Employer in the Adoption Agreement.
1.86 Valuation Date The last day of the Plan Year or such other date as agreed
to by the Employer and the Trustee/Custodian on which Participant accounts are
revalued in accordance with Article V hereof. For Top-Heavy purposes, the date
selected by the Employer as of which the Top-Heavy Ratio is calculated.
1.87 Vested Account Balance The aggregate value of the Participant's Vested
Account Balances derived from Employer and Employee contributions (including
Rollovers), whether vested before or upon death, including the proceeds of
insurance contracts, if any, on the Participant's life. The provisions of
Article VIII shall apply to a Participant who is vested in amounts attributable
to Employer contributions, Employee contributions (or both) at the time of death
or distribution.
1.88 Voluntary Contribution An Employee contribution made to the Plan by or on
behalf of a Participant that is included in the Participant's gross income in
the year in which made and that is maintained under a separate account to which
earnings and losses are allocated.
1.89 Welfare Benefit Fund Any fund that is part of a plan of the Employer, or
has the effect of a plan, through which the Employer provides welfare benefits
to Employees or their beneficiaries. For these purposes, Welfare Benefits means
any benefit other than those with respect to which Code Section 83(h) (relating
to transfers of property in connection with the performance of services), Code
Section 404 (relating to deductions for contributions to an Employee's trust or
annuity and Compensation under a deferred payment plan), Code Section 404A
(relating to certain foreign deferred compensation plans) apply. A "Fund" is any
social club, voluntary employee benefit association, supplemental unemployment
benefit trust or qualified group legal service organization described in Code
Section 501(c)(7), (9), (17) or (20); any trust, corporation, or other
organization not exempt from income tax, or to the extent provided in
regulations, any account held for an Employer by any person.
1.90 Year Of Service A 12-consecutive month period during which an Employee is
credited with not less than 1,000 (or such lesser number as specified by the
Employer in the Adoption Agreement) Hours of Service.
<PAGE>
ARTICLE II
ELIGIBILITY REQUIREMENTS
2.1 Participation Employees who meet the eligibility requirements in the
Adoption Agreement on the Effective Date of the Plan shall become Participants
as of the Effective Date of the Plan. If so elected in the Adoption Agreement,
all Employees employed on the Effective Date of the Plan may participate, even
if they have not satisfied the Plan's specified eligibility requirements. Other
Employees shall become Participants on the Entry Date coinciding with or
immediately following the date on which they meet the eligibility requirements.
The Employee must satisfy the eligibility requirements specified in the Adoption
Agreement and be employed on the Entry Date to become a Participant in the Plan.
In the event an Employee who is not a member of the eligible class of Employees
becomes a member of the eligible class, such Employee shall participate
immediately if such Employee has satisfied the minimum age and service
requirements and would have previously become a Participant had he or she been
in the eligible class. A former Participant shall again become a Participant
upon returning to the employ of the Employer at the next Entry Date or if
earlier, the next Valuation Date. For this purpose, Participant's Compensation
and Service shall be considered from date of rehire.
2.2 Change In Classification Of Employment In the event a Participant becomes
ineligible to participate because he or she is no longer a member of an eligible
class of Employees, such Employee shall participate upon his or her return to an
eligible class of Employees.
2.3 Computation Period To determine Years of Service and Breaks in Service for
purposes of eligibility, the 12-consecutive month period shall commence on the
date on which an Employee first performs an Hour of Service for the Employer and
each anniversary thereof, such that the succeeding 12-consecutive month period
commences with the employee's first anniversary of employment and so on. If,
however, the period so specified is one year or less, the succeeding
12-consecutive month period shall commence on the first day of the Plan Year
prior to the anniversary of the date they first performed an Hour of Service
regardless of whether the Employee is entitled to be credited with 1,000 (or
such lesser number as specified by the Employer in the Adoption Agreement) Hours
of Service during their first employment year.
2.4 Employment Rights Participation in the Plan shall not confer upon a
Participant any employment rights, nor shall it interfere with the Employer's
right to terminate the employment of any Employee at any time.
2.5 Service With Controlled Groups All Years of Service with other members of a
controlled group of corporations [as defined in Code Section 414(b)], trades or
businesses under common control [as defined in Code Section 414(c)], or members
of an affiliated service group [as defined in Code Section 414(m)] shall be
credited for purposes of determining an Employee's eligibility to participate.
2.6 Owner-Employees If this Plan provides contributions or benefits for one or
more Owner-Employees who control both the business for which this Plan is
established and one or more other trades or businesses, this Plan and the Plan
established for other trades or businesses must, when looked at as a single
Plan, satisfy Code Sections 401(a) and (d) for the Employees of this and all
other trades or businesses.
<PAGE>
If the Plan provides contributions or benefits for one or more Owner-Employees
who control one or more other trades or businesses, the Employees of the other
trades or businesses must be included in a Plan which satisfies Code Sections
401(a) and (d) and which provides contributions and benefits not less favorable
than provided for Owner-Employees under this Plan.
If an individual is covered as an Owner-Employee under the plans of two or more
trades or businesses which are not controlled, and the individual controls a
trade or business, then the contributions or benefits of the Employees under the
plan of the trades or businesses which are controlled must be as favorable as
those provided for him or her under the most favorable plan of the trade or
business which is not controlled.
For purposes of the preceding sentences, an Owner-Employee, or two or more
Owner-Employees, will be considered to control a trade or business if the
Owner-Employee, or two or more Owner-Employees together:
(a) own the entire interest in an unincorporated trade or business, or
(b) in the case of a partnership, own more than 50% of either the capital
interest or the profits interest in the partnership.
For purposes of the preceding sentence, an Owner-Employee, or two or more
Owner-Employees shall be treated as owning any interest in a partnership which
is owned, directly or indirectly, by a partnership which such Owner-Employee, or
such two or more Owner-Employees, are considered to control within the meaning
of the preceding sentence.
2.7 Leased Employees Any Leased Employee shall be treated as an Employee of the
recipient Employer; however, contributions or benefits provided by the leasing
organization which are attributable to services performed for the recipient
Employer shall be treated as provided by the recipient Employer. A Leased
Employee shall not be considered an Employee of the recipient if such Employee
is covered by a money purchase pension plan providing:
(a) a non-integrated Employer contribution rate of at least 10% of
Compensation, [as defined in Code Section 415(c)(3) but including
amounts contributed by the Employer pursuant to a salary reduction
agreement, which are excludable from the Employee's gross income under
a cafeteria plan covered by Code Section 125, a cash or deferred
profit-sharing plan under Section 401(k) of the Code, a Simplified
Employee Pension Plan under Code Section 402(h)(1)(B ) and a
tax-sheltered annuity under Code Section 403(b)],
(b) immediate participation, and
(c) full and immediate vesting.
This exclusion is only available if Leased Employees do not constitute more than
twenty percent (20%) of the recipient's non-highly compensated work force.
<PAGE>
2.8 Thrift Plans If the Employer makes an election in the Adoption Agreement to
require Voluntary Contributions to participate in this Plan, the Employer shall
notify each eligible Employee in writing of his or her eligibility for
participation at least 30 days prior to the appropriate Entry Date. The Employee
shall indicate his or her intention to join the Plan by authorizing the Employer
to withhold a percentage of his or her Compensation as provided in the Plan.
Such authorization shall be returned to the Employer at least 10 days prior to
the Employee's Entry Date. The Employee may decline participation by so
indicating on the enrollment form or by failure to return the enrollment form to
the Employer prior to the Employee's Entry Date. If the Employee declines to
participate, such Employee shall be given the opportunity to join the Plan on
the next Entry Date. The taking of a Hardship Withdrawal under the provisions of
paragraph 6.9 will impact the Participant's ability to make these contributions.
<PAGE>
ARTICLE III
EMPLOYER CONTRIBUTIONS
3.1 Amount The Employer intends to make periodic contributions to the Plan in
accordance with the formula or formulas selected in the Adoption Agreement.
However, the Employer's contribution for any Plan Year shall be subject to the
limitations on allocations contained in Article X.
3.2 Expenses And Fees The Employer shall also be authorized to reimburse the
Fund for all expenses and fees incurred in the administration of the Plan or
Trust/Custodial Account and paid out of the assets of the Fund. Such expenses
shall include, but shall not be limited to, fees for professional services,
printing and postage. Brokerage commissions may not be reimbursed.
3.3 Responsibility For Contributions Neither the Trustee/Custodian nor the
Sponsor shall be required to determine if the Employer has made a contribution
or if the amount contributed is in accordance with the Adoption Agreement or the
Code. The Employer shall have sole responsibility in this regard. The
Trustee/Custodian shall be accountable solely for contributions actually
received by it, within the limits of Article XI.
3.4 Return Of Contributions Contributions made to the Fund by the Employer shall
be irrevocable except as provided below:
(a) Any contribution forwarded to the Trustee/Custodian because of a
mistake of fact, provided that the contribution is returned to the
Employer within one year of the contribution.
(b) In the event that the Commissioner of Internal Revenue determines that
the Plan is not initially qualified under the Internal Revenue Code,
any contribution made incident to that initial qualification by the
Employer must be returned to the Employer within one year after the
date the initial qualification is denied, but only if the application
for the qualification is made by the time prescribed by law for filing
the Employer's return for the taxable year in which the Plan is
adopted, or such later date as the Secretary of the Treasury may
prescribe.
(c) Contributions forwarded to the Trustee/Custodian are presumed to be
deductible and are conditioned on their deductibility. Contributions
which are determined to not be deductible will be returned to the
Employer.
<PAGE>
ARTICLE IV
EMPLOYEE CONTRIBUTIONS
4.1 Voluntary Contributions An Employee may make Voluntary Contributions to the
Plan established hereunder if so authorized by the Employer in a uniform and
nondiscriminatory manner. Such contributions are subject to the limitations on
Annual Additions and are subject to antidiscrimination testing.
4.2 Qualified Voluntary Contributions A Participant may no longer make Qualified
Voluntary Contributions to the Plan. Amounts already contributed may remain in
the Trust Fund/Custodial Account until distributed to the Participant. Such
amounts will be maintained in a separate account which will be nonforfeitable at
all times. The account will share in the gains and losses of the Trust in the
same manner as described at paragraph 5.4 of the Plan. No part of the Qualified
Voluntary Contribution account will be used to purchase life insurance. Subject
to Article VIII, Joint and Survivor Annuity Requirements (if applicable), the
Participant may withdraw any part of the Qualified Voluntary Contribution
account by making a written application to the Plan Administrator.
4.3 Rollover Contribution Unless provided otherwise in the Adoption Agreement, a
Participant may make a Rollover Contribution to any Defined Contribution Plan
established hereunder of all or any part of an amount distributed or
distributable to him or her from a Qualified Deferred Compensation Plan
provided:
(a) the amount distributed to the Participant is deposited to the Plan no
later than the sixtieth day after such distribution was received by the
Participant,
(b) the amount distributed is not one of a series of substantially equal
periodic payments made for the life (or life expectancy) of the
Participant or the joint lives (or joint life expectancies) of the
Participant and the Participant's Designated Beneficiary, or for a
specified period of ten years or more;
(c) the amount distributed is not required under Code Section 401(a)(9);
(d) if the amount distributed included property such property is rolled
over, or if sold the proceeds of such property may be rolled over,
(e) the amount distributed is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation with
respect to employer securities).
In addition, if the Adoption Agreement allows Rollover Contributions, the Plan
will also accept any Eligible Rollover Distribution (as defined at paragraph
1.70) directly to the Plan.
Rollover Contributions, which relate to distributions prior to January 1, 1993,
must be made in accordance with paragraphs (a) through (e) and additionally meet
the requirements of paragraph (f):
(f) The distribution from the Qualified Deferred Compensation Plan
constituted the Participant's entire interest in such Plan and was
distributed within one taxable year to the Participant:
(1) on account of separation from Service, a Plan termination, or
in the case of a profit-sharing or stock bonus plan, a
complete
<PAGE>
discontinuance of contributions under such plan within the
meaning of Code Section 402(a)(6)(A), or
(2) in one or more distributions which constitute a qualified lump
sum distribution within the meaning of Code Section
402(e)(4)(A), determined without reference to subparagraphs
(B) and (H).
Such Rollover Contribution may also be made through an individual retirement
account qualified under Code Section 408 where the IRA was used as a conduit
from the Qualified Deferred Compensation Plan, the Rollover Contribution is made
in accordance with the rules provided under paragraphs (a) through (e) and the
Rollover Contribution does not include any regular IRA contributions, or
earnings thereon, which the Participant may have made to the IRA. Rollover
Contributions, which relate to distributions prior to January 1, 1993, may be
made through an IRA in accordance with paragraphs (a) through (f) and additional
requirements as provided in the previous sentence. The Trustee/Custodian shall
not be held responsible for determining the tax-free status of any Rollover
Contribution made under this Plan.
4.4 Transfer Contribution Unless provided otherwise in the Adoption Agreement a
Participant may, subject to the provisions of paragraph 4.5, also arrange for
the direct transfer of his or her benefit from a Qualified Deferred Compensation
Plan to this Plan. For accounting and record keeping purposes, Transfer
Contributions shall be treated in the same manner as Rollover Contributions.
In the event the Employer accepts a Transfer Contribution from a Plan in which
the Employee was directing the investments of his or her account, the Employer
may continue to permit the Employee to direct his or her investments in
accordance with paragraph 13.7 with respect only to such Transfer Contribution.
Notwithstanding the above, the Employer may refuse to accept such Transfer
Contributions.
4.5 Employer Approval Of Transfer Contributions The Employer maintaining a
Safe-Harbor Profit-Sharing Plan in accordance with the provisions of paragraph
8.7, acting in a nondiscriminatory manner, may in its sole discretion refuse to
allow Transfer Contributions to its profit-sharing plan, if such contributions
are directly or indirectly being transferred from a defined benefit plan, a
money purchase pension plan (including a target benefit plan), a stock bonus
plan, or another profit-sharing plan which would otherwise provide for a life
annuity form of payment to the Participant.
4.6 Elective Deferrals A Participant may enter into a Salary Savings Agreement
with the Employer authorizing the Employer to withhold a portion of such
Participant's Compensation not to exceed $7,000 per calendar year as adjusted
under Code Section 415(d) or, if lesser, the percentage of Compensation
specified in the Adoption Agreement and to deposit such amount to the Plan. No
Participant shall be permitted to have Elective Deferrals 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. Thus, the $7,000 limit may be reduced if a
Participant contributes pre-tax contributions to qualified plans of this or
other Employers. Any such contribution shall be credited to the Employee's
Salary
Savings Account. Unless otherwise specified in the Adoption Agreement, a
Participant may amend his or her Salary Savings Agreement to increase, decrease
or terminate the percentage upon 30 days written notice to the Employer. If a
Participant terminates his or her agreement, such Participant shall not be
permitted to put a new Salary Savings Agreement into effect until the first pay
period in the next Plan Year, unless otherwise stated in the Adoption Agreement.
The Employer may also amend or terminate said agreement on written notice to the
Participant. If a Participant has not authorized the Employer to withhold at the
maximum rate and desires to increase the total withheld for a Plan Year, such
Participant may authorize the Employer upon 30 days notice to withhold a
supplemental amount up to 100% of his or her Compensation for one or more pay
periods. In no event may the sum of the amounts withheld under the Salary
Savings Agreement plus the
<PAGE>
supplemental withholding exceed 25% of a Participant's Compensation for a Plan
Year. The Employer may also recharacterize as after-tax Voluntary Contributions
all or any portion of amounts previously withheld under any Salary Savings
Agreement within the Plan Year as provided for at paragraph 10.9. This may be
done to insure that the Plan will meet one of the antidiscrimination tests under
Code Section 401(k). Elective Deferrals shall be deposited in the Trust within
30 days after being withheld from the Participant's pay.
4.7 Required Voluntary Contributions If the Employer makes a thrift election in
the Adoption Agreement, each eligible Participant shall be required to make
Voluntary Contributions to the Plan for credit to his or her account as provided
in the Adoption Agreement. Such Voluntary Contributions shall be withheld from
the Employee's Compensation and shall be transmitted by the Employer to the
Trustee/Custodian as agreed between the Employer and Trustee/Custodian. A
Participant may discontinue participation or change his or her Voluntary
Contribution percentage by so advising the Employer at least 10 days prior to
the date on which such discontinuance or change is to be effective. If a
Participant discontinues his or her Voluntary Contributions, such Participant
may not again authorize Voluntary Contributions for a period of one year from
the date of discontinuance. A Participant may voluntarily change his or her
Voluntary Contribution percentage once during any Plan Year and may also agree
to have a reduction in his or her contribution, if required to satisfy the
requirements of the ACP test.
4.8 Direct Rollover Of Benefits Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a Participant's election under this
paragraph, for distributions made on or after January 1, 1993, a Participant 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 Participant in a Direct Rollover. Any
portion of a distribution which is not paid directly to an Eligible Retirement
Plan shall be distributed to the Participant. For purposes of this paragraph, a
Surviving Spouse or a Spouse or former Spouse who is an alternate payee under a
Qualified Domestic Relations Order as defined in Code Section 414(p), will be
permitted to elect to have any Eligible Rollover Distribution paid directly to
an individual retirement account (IRA) or an individual retirement annuity
(IRA).
The plan provisions otherwise applicable to distributions continue to apply to
Rollover and Transfer Contributions.
<PAGE>
ARTICLE V
PARTICIPANT ACCOUNTS
5.1 Separate Accounts The Employer shall establish a separate bookkeeping
account for each Participant showing the total value of his or her interest in
the Fund. Each Participant's account shall be separated for bookkeeping purposes
into the following sub-accounts:
(a) Employer contributions.
(1) Matching Contributions.
(2) Qualified Matching Contributions.
(3) Qualified Non-Elective Contributions.
(4) Discretionary Contributions.
(5) Elective Deferrals.
(b) Voluntary Contributions (and additional amounts including required
contributions and, if applicable, either repayments of loans previously
defaulted on and treated as "deemed distributions" on which a tax
report has been issued, and amounts paid out upon a separation from
service which have been included in income and which are repaid after
being re-hired by the Employer).
(c) Qualified Voluntary Contributions (if the Plan previously accepted
these).
(d) Rollover Contributions and Transfer Contributions.
5.2 Adjustments To Participant Accounts As of each Valuation Date of the Plan,
the Employer shall add to each account:
(a) the Participant's share of the Employer's contribution and forfeitures
as determined in the Adoption Agreement,
(b) any Elective Deferrals, Voluntary, Rollover or Transfer Contributions
made by the Participant,
(c) any repayment of amounts previously paid out to a Participant upon a
separation from Service and repaid by the Participant since the last
Valuation Date, and
(d) the Participant's proportionate share of any investment earnings and
increase in the fair market value of the Fund since the last Valuation
Date, as determined at paragraph 5.4.
<PAGE>
The Employer shall deduct from each account:
(e) any withdrawals or payments made from the Participant's account since
the last Valuation Date, and
(f) the Participant's proportionate share of any decrease in the fair
market value of the Fund since the last Valuation Date, as determined
at paragraph 5.4.
5.3 Allocating Employer Contributions The Employer's contribution shall be
allocated to Participants in accordance with the allocation formula selected by
the Employer in the Adoption Agreement, and the minimum contribution and
allocation requirements for Top-Heavy Plans. Beginning with the 1990 Plan Year
and thereafter, for plans on Standardized Adoption Agreement 001, Participants
who are credited with more than 500 Hours of Service or are employed on the last
day of the Plan Year must receive a full allocation of Employer contributions.
In Nonstandardized Adoption Agreement 002, Employer contributions shall be
allocated to the accounts of Participants employed by the Employer on the last
day of the Plan Year unless indicated otherwise in the Adoption Agreement. In
the case of a non-Top-Heavy, Nonstandardized Plan, Participants must also have
completed a Year of Service unless otherwise specified in the Adoption
Agreement. For Nonstandardized Adoption Agreement 002, the Employer may only
apply the last day of the Plan Year and Year of Service requirements if the Plan
satisfies the requirements of Code Sections 401(a)(26) and 410(b) and the
regulations thereunder including the exception for 401(k) plans. If, when
applying the last day and Year of Service requirements, the Plan fails to
satisfy the aforementioned requirements, additional Participants will be
eligible to receive an allocation of Employer Contributions until the
requirements are satisfied. Participants who are credited with a Year of
Service, but not employed at Plan Year end, are the first category of additional
Participants eligible to receive an allocation. If the requirements are still
not satisfied, Participants credited with more than 500 Hours of Service and
employed at Plan Year end are the next category of Participants eligible to
receive an allocation. Finally, if necessary to satisfy the said requirements,
any Participant credited with more than 500 Hours of Service will be eligible
for an allocation of Employer Contributions. The Service requirement is not
applicable with respect to any Plan Year during which the Employer's Plan is
Top-Heavy.
5.4 Allocating Investment Earnings And Losses A Participant's share of
investment earnings and any increase or decrease in the fair market value of the
Fund shall be based on the proportionate value of all active accounts (other
than accounts with segregated investments) as of the last Valuation Date less
withdrawals since the last Valuation Date. If Employer and/or Employee
contributions are made monthly, quarterly, or on some other systematic basis,
the adjusted value of such accounts for allocation of investment income and
gains or losses shall include one-half the contributions for such period. If
Employer and/or Employee contributions are not made on a systematic basis, it is
assumed that they are made at the end of the valuation period and therefore will
not receive an allocation of investment earnings and gains or losses for such
period. Account balances not yet forfeited shall receive an allocation of
earnings and/or losses. Accounts with segregated investments shall receive only
the income or loss on such segregated investments.
5.5 Participant Statements Upon completing the allocations described above for
the Valuation Date coinciding with the end of the Plan Year, the Employer shall
prepare a statement for each Participant showing the additions to and
subtractions from his or her account since the last such statement and the fair
market value of his or her account as of the current Valuation Date. Employers
so choosing may prepare Participant statements for each Valuation Date.
<PAGE>
ARTICLE VI
RETIREMENT BENEFITS AND DISTRIBUTIONS
6.1 Normal Retirement Benefits A Participant shall be entitled to receive the
balance held in his or her account from Employer contributions upon attaining
Normal Retirement Age or at such earlier dates as the provisions of this Article
VI may allow. If the Participant elects to continue working past his or her
Normal Retirement Age, he or she will continue as an active Plan Participant and
no distribution shall be made to such Participant until his or her actual
retirement date unless the employer elects otherwise in the Adoption Agreement,
or a minimum distribution is required by law. Settlement shall be made in the
normal form, or if elected, in one of the optional forms of payment provided
below.
6.2 Early Retirement Benefits If the Employer so provides in the Adoption
Agreement, an Early Retirement Benefit will be available to individuals who meet
the age and Service requirements. An individual who meets the Early Retirement
Age requirements and separates from Service, will become fully vested,
regardless of any vesting schedule which otherwise might apply. If a Participant
separates from Service before satisfying the age requirements, but after having
satisfied the Service requirement, the Participant will be entitled to elect an
Early Retirement benefit upon satisfaction of the age requirement.
6.3 Benefits On Termination Of Employment
(a) If a Participant terminates employment prior to Normal Retirement Age,
such Participant shall be entitled to receive the vested balance held
in his or her account payable at Normal Retirement Age in the normal
form, or if elected, in one of the optional forms of payment provided
hereunder. If applicable, the Early Retirement Benefit provisions may
be elected. Notwithstanding the preceding sentence, a former
Participant may, if allowed in the Adoption Agreement, make application
to the Employer requesting early payment of any deferred vested and
nonforfeitable benefit due.
(b) If a Participant terminates employment, and the value of that
Participant's Vested Account Balance derived from Employer and Employee
contributions is not greater than $3,500, the Participant may receive a
lump sum distribution of the value of the entire vested portion of such
account balance and the non-vested portion will be treated as a
forfeiture. The Employer shall continue to follow their consistent
policy, as may be established, regarding immediate cash-outs of Vested
Account Balances of $3,500 or less. For purposes of this Article, if
the value of a Participant's Vested Account Balance is zero, the
Participant shall be deemed to have received a distribution of such
Vested Account Balance immediately following termination. Likewise, if
the Participant is reemployed prior to incurring 5 consecutive 1-year
Breaks in Service they will be deemed to have immediately repaid such
distribution. For Plan Years beginning prior to 1989, a Participant's
Vested Account Balance shall not include Qualified Voluntary
Contributions. Notwithstanding the above, if the Employer maintains or
has maintained a policy of not distributing any amounts until the
Participant's Normal Retirement Age, the Employer can continue to
uniformly apply such policy.
(c) If a Participant terminates employment with a Vested Account Balance
derived from Employer and Employee contributions in excess of $3,500,
and elects (with his or her Spouse's consent, if required) to receive
100% of the value of his or
<PAGE>
her Vested Account Balance in a lump sum, the non-vested portion will
be treated as a forfeiture. The Participant (and his or her Spouse, if
required) must consent to any distribution, when the Vested Account
Balance described above exceeds $3,500 or if at the time of any prior
distribution it exceeded $3,500. For purposes of this paragraph, for
Plan Years beginning prior to 1989, a Participant's Vested Account
Balance shall not include Qualified Voluntary Contributions.
(d) Distribution of less than 100% of the Participant's Vested Account
Balance shall only be permitted if the Participant is fully vested upon
termination of employment.
(e) If a Participant who is not 100% vested receives or is deemed to
receive a distribution pursuant to this paragraph and resumes
employment covered under this Plan, the Participant shall have the
right to repay to the Plan the full amount of the distribution
attributable to Employer contributions on or before the earlier of the
date that the Participant incurs 5 consecutive 1-year Breaks in Service
following the date of distribution or five years after the first date
on which the Participant is subsequently reemployed. In such event, the
Participant's account shall be restored to the value thereof at the
time the distribution was made and may further be increased by the
Plan's income and investment gains and/or losses on the undistributed
amount from the date of distribution to the date of repayment.
(f) A Participant shall also have the option, to postpone payment of his or
her Plan benefits until the first day of April following the calendar
year in which he or she attains age 70-1/2. Any balance of a
Participant's account resulting from his or her Employee contributions
not previously withdrawn, if any, may be withdrawn by the Participant
immediately following separation from Service.
(g) If a Participant ceases to be an active Employee as a result of a
Disability as defined at paragraph 1.21, such Participant shall be able
to make an application for a disability retirement benefit payment. The
Participant's account balance will be deemed "immediately
distributable" as set forth in paragraph 6.4, and will be fully vested
pursuant to paragraph 9.2.
6.4 Restrictions On Immediate Distributions
(a) An account balance is immediately distributable if any part of the
account balance could be distributed to the Participant (or Surviving
Spouse) before the Participant attains (or would have attained if not
deceased) the later of the Normal Retirement Age or age 62.
(b) If the value of a Participant's Vested Account Balance derived from
Employer and Employee Contributions exceeds (or at the time of any
prior distribution exceeded) $3,500, and the account balance is
immediately
distributable, the Participant and his or her Spouse (or where either
the Participant or the Spouse has died, the survivor) must consent to
any distribution of such account balance. The consent of the
Participant and the Spouse shall be obtained in writing within the
90-day period ending on the annuity starting date, which is the first
day of the first period for which an amount is paid as an annuity or
any other form. The Plan Administrator shall notify the Participant and
the Participant's Spouse of the right to defer any distribution until
the Participant's account balance is no longer
<PAGE>
immediately distributable. Such notification shall include a general
description of the material features, and an explanation of the
relative values of, the optional forms of benefit available under the
plan in a manner that would satisfy the notice requirements of Code
Section 417(a)(3), and shall be provided no less than 30 days and no
more than 90 days prior to the annuity starting date.
(c) Notwithstanding the foregoing, only the Participant need consent to the
commencement of a distribution in the form of a qualified Joint and
Survivor Annuity while the account balance is immediately
distributable. Furthermore, if payment in the form of a Qualified Joint
and Survivor Annuity is not required with respect to the Participant
pursuant to paragraph 8.7 of the Plan, only the Participant need
consent to the distribution of an account balance that is immediately
distributable. Neither the consent of the Participant nor the
Participant's Spouse shall be required to the extent that a
distribution is required to satisfy 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.
(d) For purposes of determining the applicability of the foregoing consent
requirements to distributions made before the first day of the first
Plan Year beginning after 1988, the Participant's Vested Account
Balance shall not include amounts attributable to Qualified Voluntary
Contributions.
(e) If a distribution is one to which Code Sections 401(a)(11) and 417 do
not apply, such distribution may commence less than 30 days after the
notice required under Regulations Section 1.411(a)-11(c) is given,
provided that:
(1) the Participant is clearly informed of his or her right to a
period of at least 30 days after receiving the notice to
consider the decision of whether or not to elect a
distribution (and, if applicable, a particular distribution
option), and
(2) the Participant, after receiving the notice, affirmatively
elects to receive a distribution.
6.5 Normal Form Of Payment The normal form of payment for a profit- sharing plan
satisfying the requirements of paragraph 8.7 hereof shall be a lump sum with no
option for annuity payments. For all other plans, the normal form of payment
hereunder shall be a Qualified Joint and Survivor Annuity as provided under
Article VIII. A Participant whose Vested Account Balance derived from Employer
and Employee contributions exceeds $3,500, or if at the time of any prior
distribution it exceeded $3,500, shall (with the consent of his or her Spouse)
have the right to receive his or her benefit in a lump sum or in monthly,
quarterly, semi-annual or annual payments from the Fund over any period not
extending beyond the life expectancy of the Participant and his or her
Beneficiary. For purposes of this paragraph, for Plan Years prior to 1989, a
Participant's Vested Account Balance shall not include Qualified Voluntary
Contributions. The normal form of payment shall be automatic, unless the
Participant files a written request with the Employer prior to the date on which
the benefit is automatically payable, electing a lump sum or installment payment
option. No amendment to the Plan may eliminate one of the optional distribution
forms listed above.
<PAGE>
6.6 Commencement Of Benefits
(a) Unless the Participant elects otherwise, distribution of benefits will
begin no later than the 60th day after the close of the Plan Year in
which the latest of the following events occurs:
(1) the Participant attains age 65 (or normal retirement age if
earlier),
(2) the 10th anniversary of the year in which the Participant
commenced participation in the Plan, or
(3) the Participant terminates Service with the Employer.
(b) Notwithstanding the foregoing, the failure of a Participant and Spouse
(if necessary) to consent to a distribution while a benefit is
immediately distributable, within the meaning of paragraph 6.4 hereof,
shall be deemed an election to defer commencement of payment of any
benefit sufficient to satisfy this paragraph.
6.7 Claims Procedures Upon retirement, death, or other severance of employment,
the Participant or his or her representative may make application to the
Employer requesting payment of benefits due and the manner of payment. If no
application for benefits is made, the Employer shall automatically pay any
vested benefit due hereunder in the normal form at the time prescribed at
paragraph 6.4. If an application for benefits is made, the Employer shall
accept, reject, or modify such request and shall notify the Participant in
writing setting forth the response of the Employer and in the case of a denial
or modification the Employer shall:
(a) state the specific reason or reasons for the denial,
(b) provide specific reference to pertinent Plan provisions on which the
denial is based,
(c) provide a description of any additional material or information
necessary for the Participant or his representative to perfect the
claim and an explanation of why such material or information is
necessary, and
(d) explain the Plan's claim review procedure as contained in this Plan.
In the event the request is rejected or modified, the Participant or his or her
representative may within 60 days following receipt by the Participant or
representative of such rejection or modification, submit a written request for
review by the Employer of its initial decision. Within 60 days following such
request for review, the Employer shall render its final decision in writing to
the Participant or representative stating specific reasons for such decision. If
the Participant or representative is not satisfied with the Employer's final
decision, the Participant or representative can institute an action in a federal
court of competent jurisdiction; for this purpose, process would be served on
the Employer.
6.8 In-Service Withdrawals An Employee may withdraw all or any part of the fair
market value of his or her Mandatory Contributions, Voluntary Contributions,
Qualified Voluntary Contributions or Rollover Contributions, upon written
request to the Employer. Transfer Contributions, which originate from a Plan
meeting the safe-harbor provisions of paragraph 8.7, may also be withdrawn by an
Employee upon written request to the Employer. Transfer Contributions not
meeting the safe-harbor provisions may only be withdrawn upon retirement, death,
Disability, termination or termination of the Plan, and will be subject to
Spousal consent requirements contained in Code Sections 411(a)(11) and 417. No
such
<PAGE>
withdrawals are permitted from a money purchase plan until the participant
reaches Normal Retirement Age. Such request shall include the Participant's
address, social security number, birthdate, and amount of the withdrawal. If at
the time a distribution of Qualified Voluntary Contributions is received the
Participant has not attained age 59-1/2 and is not disabled, as defined at Code
Section 22(e)(3), the Participant will be subject to a federal income tax
penalty, unless the distribution is rolled over to a qualified plan or
individual retirement plan within 60 days of the date of distribution. A
Participant may withdraw all or any part of the fair market value of his or her
pre-1987 Voluntary Contributions with or without withdrawing the earnings
attributable thereto. Post-1986 Voluntary Contributions may only be withdrawn
along with a portion of the earnings thereon. The amount of the earnings to be
withdrawn is determined by using the formula: DA[1-(V / V + E)], where DA is the
distribution amount, V is the amount of Voluntary Contributions and V + E is the
amount of Voluntary Contributions plus the earnings attributable thereto. A
Participant withdrawing his or her other contributions prior to attaining age
59-1/2, will be subject to a federal tax penalty to the extent that the
withdrawn amounts are includible in income. Unless the Employer provides
otherwise in the Adoption Agreement, any Participant in a profit-sharing plan
who is 100% fully vested in his or her Employer contributions may withdraw all
or any part of the fair market value of any of such contributions that have been
in the account at least two years, plus the investment earnings thereon, after
attaining age 59-1/2 without separation from Service. Such distributions shall
not be eligible for redeposit to the Fund. A withdrawal under this paragraph
shall not prohibit such Participant from sharing in any future Employer
Contribution he or she would otherwise be eligible to share in. A request to
withdraw amounts pursuant to this paragraph must if applicable, be consented to
by the Participant's Spouse. The consent shall comply with the requirements of
paragraph 6.4 relating to immediate distributions.
Elective Deferrals, Qualified Non-elective Contributions, and Qualified Matching
Contributions, and income allocable to each are not distributable to a
Participant or his or her Beneficiary or Beneficiaries, in accordance with such
Participant's or Beneficiary's or Beneficiaries' election, earlier than upon
separation from Service, death, or Disability. Such amounts may also be
distributed upon:
(a) Termination of the Plan without the establishment of another Defined
Contribution Plan.
(b) The disposition by a corporation to an unrelated corporation of
substantially all of the assets [within the meaning of Code Section
409(d)(2)] used in a trade or business of such corporation if such
corporation continues to maintain this Plan after the disposition, but
only with respect to Employees who continue employment with the
corporation acquiring such assets.
(c) The disposition by a corporation to an unrelated entity of such
corporation's interest in a subsidiary [within the meaning of Code
Section 409(d)(3)] if such corporation continues to maintain this plan,
but only with respect to Employees who continue employment with such
subsidiary.
(d) The attainment of age 59-1/2.
(e) The Hardship of the Participant as described in paragraph 6.9.
All distributions that may be made pursuant to one or more of the foregoing
distributable events are subject to the Spousal and Participant consent
requirements, if applicable, contained in Code Sections 401(a)(11) and 417.
6.9 Hardship Withdrawal If permitted by the Trustee/Custodian and the Employer
in the Adoption Agreement, a Participant may request a Hardship withdrawal prior
to attaining age 59-1/2. If the Participant has not attained age 59-1/2, the
Participant may be subject to a federal income tax penalty.
<PAGE>
Such request shall be in writing to the Employer who shall have sole authority
to authorize a Hardship withdrawal, pursuant to the rules below. Hardship
withdrawals may include Elective Deferrals regardless of when contributed and
any earnings accrued and credited thereon as of the last day of the Plan Year
ending before July 1, 1989 and Employer related contributions, including but not
limited to Employer Matching Contributions, plus the investment earnings thereon
to the extent vested. Qualified Matching Contributions, Qualified Non-Elective
Contributions and Elective Deferrals reclassified as Voluntary Contributions
plus the investment earnings thereon are only available for Hardship withdrawal
prior to age 59-1/2 to the extent that they were credited to the Participant's
Account as of the last day of the Plan Year ending prior to July 1, 1989. The
Plan Administrator may limit withdrawals to Elective Deferrals and the earnings
thereon as stipulated above. Hardship withdrawals are subject to the Spousal
consent requirements contained in Code Sections 401(a)(11) and 417. Only the
following reasons are valid to obtain Hardship withdrawal:
(a) medical expenses [within the meaning of Code Section 213(d)], incurred
or necessary for the medical care of the Participant, his or her
Spouse, children and other dependents,
(b) the purchase (excluding mortgage payments) of the principal residence
for the Participant,
(c) payment of tuition and related educational expenses for the next twelve
(12) months of post-secondary education for the Participant, his or her
Spouse, children or other dependents, or
(d) the need to prevent eviction of the Employee from or a foreclosure on
the mortgage of, the Employee's principal residence.
Furthermore, the following conditions must be met in order for a withdrawal to
be authorized:
(e) the Participant has obtained all distributions, other than hardship
distributions, and all nontaxable loans under all plans maintained by
the Employer,
(f) all plans maintained by the Employer, other than flexible benefit plans
under Code Section 125 providing for current benefits, provide that the
Employee's Elective Deferrals and Voluntary Contributions will be
suspended for twelve months after the receipt of the Hardship
distribution,
(g) the distribution is not in excess of the amount of the immediate and
heavy financial need [(a) through (d) above], including amounts
necessary to pay any federal, state or local income tax or penalties
reasonably anticipated to result from the distribution, and
(h) all plans maintained by the Employer provide that an Employee may not
make Elective Deferrals for the Employee's taxable year immediately
following the taxable year of the Hardship distribution in excess of
the applicable limit under Code Section 402(g) for such taxable year,
less the amount of such Employee's pre-tax contributions for the
taxable year of the Hardship distribution.
If a distribution is made at a time when a Participant has a nonforfeitable
right to less than 100% of the account balance derived from Employer
contributions and the Participant may increase the nonforfeitable percentage in
the account:
<PAGE>
(a) A separate account will be established for the Participant's interest
in the Plan as of the time of the distribution, and
(b) At any relevant time the Participant's nonforfeitable portion of the
separate account will be equal to an amount ("X") determined by the
formula:
X = P [AB + D] - D
For purposes of applying the formula: "P" is the nonforfeitable percentage at
the relevant time, "AB" is the account balance at the relevant time and "D" is
the amount of the distribution.
<PAGE>
ARTICLE VII
DISTRIBUTION REQUIREMENTS
7.1 Joint And Survivor Annuity Requirements All distributions made under the
terms of this Plan must comply with the provisions of Article VIII including, if
applicable, the safe harbor provisions thereunder.
7.2 Minimum Distribution Requirements All distributions required under this
Article shall be determined and made in accordance with the minimum distribution
requirements of Code Section 401(a)(9) and the regulations thereunder, including
the minimum distribution incidental benefit rules found at Regulations Section
1.401(a)(9)-2. The entire interest of a Participant must be distributed or begin
to be distributed no later than the Participant's Required Beginning Date. Life
expectancy and joint and last survivor life expectancy are computed by using the
expected return multiples found in Tables V and VI of Regulations Section
1.72-9.
7.3 Limits On Distribution Periods As of the First Distribution Calendar Year,
distributions if not made in a single-sum, may only be made over one of the
following periods (or a combination thereof):
(a) the life of the Participant,
(b) the life of the Participant and a Designated Beneficiary,
(c) a period certain not extending beyond the life expectancy of the
participant, or
(d) a period certain not extending beyond the joint and last survivor
expectancy of the Participant and a designated beneficiary.
7.4 Required Distributions On Or After The Required Beginning Date
(a) If a participant's benefit is to be distributed over (1) 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 (2) a period not extending
beyond the life expectancy of the Designated Beneficiary, the amount
required to be distributed for each calendar year, beginning with
distributions for the First Distribution Calendar Year, must at least
equal the quotient obtained by dividing the Participant's benefit by
the Applicable Life Expectancy.
(b) For calendar years beginning before 1989, if the Participant's Spouse
is not the Designated Beneficiary, the method of distribution selected
must have assured that at least 50% of the Present Value of the amount
available for distribution was to be paid within the life expectancy of
the Participant.
(c) For calendar years beginning after 1988, the amount to be distributed
each year, beginning with distributions for the First Distribution
Calendar Year shall not be less than the quotient obtained by dividing
the Participant's benefit by the lesser of (1) the Applicable Life
Expectancy or (2) if the
Participant's Spouse is not the Designated Beneficiary, the applicable
divisor determined from the table set forth in Q&A-4 of Regulations
Section 1.401(a)(9)-2. Distributions after the death of the Participant
shall be distributed using the Applicable Life
<PAGE>
Expectancy as the relevant divisor without regard to Regulations
Section 1.401(a)(9)-2.
(d) The minimum distribution required for the Participant's First
Distribution Calendar Year must be made on or before the Participant's
Required Beginning Date. The minimum distribution for other calendar
years, including the minimum distribution for the Distribution Calendar
Year in which the Participant's Required Beginning Date occurs, must be
made on or before December 31 of that Distribution Calendar Year.
(e) 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 Regulations thereunder.
(f) For purposes of determining the amount of the required distribution for
each Distribution Calendar Year, the account balance to be used is the
account balance determined as of the last valuation preceding the
Distribution Calendar Year. This balance will be increased by the
amount of any contributions or forfeitures allocated to the account
balance after the valuation date in such preceding calendar year. Such
balance will also be decreased by distributions made after the
Valuation Date in such preceding Calendar Year.
(g) For purposes of subparagraph 7.4(f), 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.
7.5 Required Beginning Date
(a) General Rule. The Required Beginning Date of a Participant is the first
day of April of the calendar year following the calendar year in which
the Participant attains age 70-1/2.
(b) Transitional Rules. The Required Beginning Date of a Participant who
attains age 70-1/2 before 1988, shall be determined in accordance with
(1) or (2) below:
(1) Non-5-percent owners. The Required Beginning Date of a
Participant who is not a 5-percent owner is the first day of
April of the calendar year following the calendar year in
which the later of retirement or attainment of age 70-1/2
occurs. In the case of a Participant who is not a 5-percent
owner who attains age 70-1/2 during 1988 and who has not
retired as of January 1, 1989, the Required Beginning Date is
April 1, 1990.
(2) 5-percent owners. The Required Beginning Date of a Participant
who is a 5-percent owner during any year beginning after 1979,
is the first day of April following the later of:
(i) the calendar year in which the Participant attains
age 70-1/2, or
<PAGE>
(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.
(c) A Participant is treated as a 5-percent owner for purposes of this
Paragraph 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.
(d) Once distributions have begun to a 5-percent owner under this
paragraph, they must continue to be distributed, even if the
Participant ceases to be a 5-percent owner in a subsequent year.
7.6 Transitional Rule
(a) Notwithstanding the other requirements of this Article and subject to
the requirements of Article VIII, Joint and Survivor Annuity
Requirements, distribution on behalf of any Employee, including a
5-percent owner, may be made in accordance with all of the following
requirements (regardless of when such distribution commences):
(1) The distribution by the Trust is one which would not have
disqualified such Trust under Code Section 401(a)(9) as in
effect prior to amendment by the Deficit Reduction Act of
1984.
(2) The distribution is in accordance with a method of
distribution designated by the Employee whose interest in the
Trust is being distributed or, if the Employee is deceased, by
a beneficiary of such Employee.
(3) Such designation was in writing, was signed by the Employee or
the beneficiary, and was made before 1984.
(4) The Employee had accrued a benefit under the Plan as of
December 31, 1983.
(5) The method of distribution designated by the Employee or the
beneficiary specifies the time at which distribution will
commence, the period over which distributions will be made,
and in the case of any distribution upon the Employee's death,
the beneficiaries of the Employee listed in order of priority.
(b) A distribution upon death will not be covered by this transitional rule
unless the information in the designation contains the required
information described above with respect to the distributions to be
made upon the death of the Employee.
(c) For any distribution which commences before 1984, but continues after
1983, the Employee or the beneficiary, to whom such distribution is
being made, will be presumed to have designated the method of
distribution under which the distribution is being made if the method
of distribution was specified in writing
<PAGE>
and the distribution satisfies the requirements in subparagraphs (a)(1)
and (5) above.
(d) If a designation is revoked, any subsequent distribution must satisfy
the requirements of Code Section 401(a)(9) and the regulations
thereunder. If a designation is revoked subsequent to the date
distributions are required to begin, the Trust must distribute by the
end of the calendar year following the calendar year in which the
revocation occurs the total amount not yet distributed which would have
been required to have been distributed to satisfy Code Section
401(a)(9) and the regulations thereunder, but for the section 242(b)(2)
election of the Tax Equity and Fiscal Responsibility Act of 1982. For
calendar years beginning after 1988, such distributions must meet the
minimum distribution incidental benefit requirements in section
1.401(a)(9)-2 of the Income Tax Regulations. Any changes in the
designation will be considered to be a revocation of the designation.
However, the mere substitution or addition of another beneficiary (one
not named in the designation) under the designation will not be
considered to be a revocation of the designation, so long as such
substitution or addition does not alter the period over which
distributions are to be made under the designation, directly or
indirectly (for example, by altering the relevant measuring life). In
the case in which an amount is transferred or rolled over from one plan
to another plan, the rules in Q&A J-2 and Q&A J-3 of the regulations
shall apply.
7.7 Designation Of Beneficiary For Death Benefit Each Participant shall file a
written designation of beneficiary with the Employer upon qualifying for
participation in this Plan. Such designation shall remain in force until revoked
by the Participant by filing a new beneficiary form with the Employer. The
Participant may elect to have a portion of his or her account balance invested
in an insurance contract. If an insurance contract is purchased under the Plan,
the Trustee must be named as Beneficiary under the terms of the contract.
However, the Participant shall designate a Beneficiary to receive the proceeds
of the contract after settlement is received by the Trustee. Under a
profit-sharing plan satisfying the requirements of paragraph 8.7, the Designated
Beneficiary shall be the Participant's Surviving Spouse, if any, unless such
Spouse properly consents otherwise.
7.8 Nonexistence Of Beneficiary Any portion of the amount payable hereunder
which is not disposed of because of the Participant's or former Participant's
failure to designate a beneficiary, or because all of the Designated
Beneficiaries predeceased the Participant, shall be paid to his or her Spouse.
If the Participant had no Spouse at the time of death, payment shall be made to
the personal representative of his or her estate in a lump sum.
7.9 Distribution Beginning Before Death If the Participant dies after
distribution of his or her interest has begun, the remaining portion of such
interest will continue to be distributed at least as rapidly as under the method
of distribution being used prior to the Participant's death.
7.10 Distribution Beginning After Death If the Participant dies before
distribution of his or her interest begins, distribution of the Participant's
entire interest shall be completed by December 31 of the calendar year
containing the fifth anniversary of the Participant's death except to the extent
that an election is made to receive distributions in accordance with (a) or (b)
below:
(a) If any portion of the Participant's interest is payable to a Designated
Beneficiary, distributions may be made over the life or over a period
certain not greater than the life expectancy of the Designated
Beneficiary commencing on or before December 31 of the calendar year
immediately following the calendar year in which the Participant died;
<PAGE>
(b) If the Designated Beneficiary is the Participant's surviving Spouse,
the date distributions are required to begin in accordance with (a)
above shall not be earlier than the later of (1) December 31 of the
calendar year immediately following the calendar year in which the
participant died or (2) December 31 of the calendar year in which the
Participant would have attained age 70-1/2.
If the Participant has not made an election pursuant to this paragraph 7.10 by
the time of his or her death, the Participant's Designated Beneficiary must
elect the method of distribution no later than the earlier of (1) December 31 of
the calendar year in which distributions would be required to begin under this
section, or (2) December 31 of the calendar year which 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, then 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.
For purposes of this paragraph if the Surviving Spouse dies after the
Participant, but before payments to such Spouse begin, the provisions of this
paragraph with the exception of paragraph (b) therein, shall be applied as if
the Surviving Spouse were the Participant. For the purposes of this paragraph
and paragraph 7.9, distribution of a Participant's interest is considered to
begin on the Participant's Required Beginning Date (or, if the preceding
sentence is applicable, the date distribution is required to begin to the
Surviving Spouse). If distribution in the form of an annuity described in
paragraph 7.4(e) irrevocably commences to the Participant before the Required
Beginning Date, the date distribution is considered to begin is the date
distribution actually commences.
For purposes of paragraph 7.9 and this paragraph, if an amount is payable to
either a minor or an individual who has been declared incompetent, the benefits
shall be paid to the legally appointed guardian for the benefit of said minor or
incompetent individual, unless the court which appointed the guardian has
ordered otherwise.
7.11 Distribution Of Excess Elective Deferrals
(a) Notwithstanding any other provision of the Plan, Excess Elective
Deferrals plus any income and minus any loss allocable thereto, shall
be distributed no later than April 15, 1988, and each April 15
thereafter, to Participants to whose accounts Excess Elective Deferrals
were allocated for the preceding taxable year, and who claim Excess
Elective Deferrals for such taxable year. Excess Elective Deferrals
shall be treated as Annual Additions under the Plan, unless such
amounts are distributed no later than the first April 15th following
the close of the Participant's taxable year. A Participant is deemed to
notify the Plan Administrator of any Excess Elective Deferrals that
arise by taking into account only those Elective Deferrals made to this
Plan and any other plans of this Employer.
(b) Furthermore, a Participant who participates in another plan allowing
Elective Deferrals may assign to this Plan any Excess Elective
Deferrals made during a taxable year of the Participant, by notifying
the Plan Administrator of the amount of the Excess Elective Deferrals
to be assigned. The Participant's claim shall be in writing; shall be
submitted to the Plan Administrator not later than March 1 of each
year; shall specify the amount of the Participant's Excess Elective
Deferrals for the preceding taxable year; and shall be accompanied by
the Participant's written statement that if such amounts are not
distributed, such Excess Elective Deferrals, when added to amounts
deferred under other plans or arrangements described in Code Sections
401(k), 408(k) [Simplified Employee
<PAGE>
Pensions], or 403(b) [annuity programs for public schools and
charitable organizations] will exceed the $7,000 limit as adjusted
under Code Section 415(d) imposed on the Participant by Code Section
402(g) for the year in which the deferral occurred.
(c) Excess Elective Deferrals shall be adjusted for any income or loss up
to the end of the taxable year, during which such excess was deferred.
Income or loss will be calculated under the method used to calculate
investment earnings and losses elsewhere in the Plan.
(d) If the Participant receives a return of his or her Elective Deferrals,
the amount of such contributions which are returned must be brought
into the Employee's taxable income.
7.12 Distributions of Excess Contributions
(a) Notwithstanding any other provision 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 of Code Section 414(q)(6) shall be allocated among
the Family Members in proportion to the Elective Deferrals (and amounts
treated as Elective Deferrals) of each Family Member that is combined
to determine the Average Deferral Percentage.
(b) Excess Contributions (including the amounts recharacterized) shall be
treated as Annual Additions under the Plan.
(c) Excess Contributions shall be adjusted for any income or loss up to the
end of the Plan Year. Income or loss will be calculated under the
method used to calculate investment earnings and losses elsewhere in
the Plan.
(d) Excess Contributions shall be distributed from the Participant's
Elective Deferral account and Qualified Matching Contribution account
(if applicable) in proportion to the Participant's Elective Deferrals
and Qualified Matching Contributions (to the extent used in the ADP
test) for the Plan Year. Excess Contributions shall be distributed from
the Participant's Qualified Non-Elective Contribution account only to
the extent that such Excess Contributions exceed the balance in the
Participant's Elective Deferral account and Qualified Matching
Contribution account.
7.13 Distribution Of Excess Aggregate Contributions
(a) Notwithstanding any other provision of this Plan, Excess Aggregate
Contributions, plus any income and minus any loss allocable thereto,
shall be forfeited, if forfeitable, or if not forfeitable, distributed
no later than the last day of each Plan Year to Participants to whose
accounts such Excess Aggregate
<PAGE>
Contributions were allocated for the preceding Plan Year. Excess
Aggregate Contributions shall be allocated to Participants who are
subject to the Family Member aggregation rules of Code Section
414(q)(6) in the manner prescribed by the regulations. If such Excess
Aggregate Contributions are distributed more than 2-1/2 months after
the last day of the Plan Year in which such excess amounts arose, a ten
(10) percent excise tax will be imposed on the Employer maintaining the
Plan with respect to those amounts. Excess Aggregate Contributions
shall be treated as Annual Additions under the plan.
(b) Excess Aggregate Contributions shall be adjusted for any income or loss
up to the end of the Plan Year. The income or loss allocable to Excess
Aggregate Contributions is the sum of income or loss for the Plan Year
allocable to the Participant's Voluntary Contribution account, Matching
Contribution account (if any, and if all amounts therein are not used
in the ADP test) and, if applicable, Qualified Non-Elective
Contribution account and Elective Deferral account. Income or loss will
be calculated under the method used to calculate investment earnings
and losses elsewhere in the Plan.
(c) Forfeitures of Excess Aggregate Contributions may either be reallocated
to the accounts of non-Highly Compensated Employees or applied to
reduce Employer contributions, as elected by the employer in the
Adoption Agreement.
(d) Excess Aggregate Contributions shall be forfeited if such amount is not
vested. If vested, such excess shall be distributed on a pro-rata basis
from the Participant's Voluntary Contribution account (and, if
applicable, the Participant's Qualified Non-Elective Contribution
account, Matching Contribution account, Qualified Matching Contribution
account, or Elective Deferral account, or both).
<PAGE>
ARTICLE VIII
JOINT AND SURVIVOR ANNUITY REQUIREMENTS
8.1 Applicability Of Provisions The provisions of this Article shall apply to
any Participant who is credited with at least one Hour of Service with the
Employer on or after August 23, 1984 and such other Participants as provided in
paragraph 8.8.
8.2 Payment Of Qualified Joint And Survivor Annuity Unless an optional form of
benefit is selected pursuant to a Qualified Election within the 90-day period
ending on the Annuity Starting Date, a married Participant's Vested Account
Balance will be paid in the form of a Qualified Joint and Survivor Annuity and
an unmarried Participant's Vested Account Balance will be paid in the form of a
life annuity. The Participant may elect to have such annuity distributed upon
attainment of the Early Retirement Age under the Plan.
8.3 Payment Of Qualified Pre-Retirement Survivor Annuity Unless an optional form
of benefit has been selected within the Election Period pursuant to a Qualified
Election, if a Participant dies before benefits have commenced then the
Participant's Vested Account Balance shall be paid in the form of an annuity for
the life of the Surviving Spouse. The Surviving Spouse may elect to have such
annuity distributed within a reasonable period after the Participant's death.
A Participant who does not meet the age 35 requirement set forth in the Election
Period as of the end of any current Plan Year may make a special qualified
election to waive the qualified Pre-retirement Survivor Annuity for the period
beginning on the date of such election and ending on the first day of the Plan
Year in which the Participant will attain age 35. Such election shall not be
valid unless the Participant receives a written explanation of the Qualified
Pre-retirement Survivor Annuity in such terms as are comparable to the
explanation required under paragraph 8.5. Qualified Pre-retirement Survivor
Annuity coverage will be automatically reinstated as of the first day of the
Plan Year in which the Participant attains age 35. Any new waiver on or after
such date shall be subject to the full requirements of this Article.
8.4 Qualified Election A Qualified Election is an election to either waive a
Qualified Joint and Survivor Annuity or a qualified pre-retirement survivor
annuity. Any such election shall not be effective unless:
(a) the Participant's Spouse consents in writing to the election;
(b) the election designates a specific beneficiary, including any class of
beneficiaries or any contingent beneficiaries, which may not be changed
without spousal consent (or the Spouse expressly permits designations
by the Participant without any further spousal consent);
(c) the Spouse's consent acknowledges the effect of the election; and
(d) the Spouse's consent is witnessed by a Plan representative or notary
public.
Additionally, a Participant's waiver of the Qualified Joint and Survivor Annuity
shall not be effective unless the election designates a form of benefit payment
which may not be changed without spousal consent (or the Spouse expressly
permits designations by the Participant without any further spousal consent). If
it is established to the satisfaction of the Plan Administrator that
there is no Spouse or that the Spouse cannot be located, a waiver will be deemed
a Qualified Election. Any consent by a Spouse obtained under this provision (or
establishment that the consent of a Spouse may not be obtained) shall
<PAGE>
be effective only with respect to such Spouse. A consent that permits
designations by the Participant without any requirement of further consent by
such Spouse must acknowledge that the Spouse has the right to limit consent to a
specific beneficiary, and a specific form of benefit where applicable, and that
the Spouse voluntarily elects to relinquish either or both of such rights. A
revocation of a prior waiver may be made by a Participant without the consent of
the Spouse at any time before the commencement of benefits. The number of
revocations shall not be limited. No consent obtained under this provision shall
be valid unless the Participant has received notice as provided in paragraphs
8.5 and 8.6 below.
8.5 Notice Requirements For Qualified Joint And Survivor Annuity In the case of
a Qualified Joint and Survivor Annuity, the Plan Administrator shall, no less
than 30 days and no more than 90 days prior to the Annuity Starting date,
provide each Participant a written explanation of:
(a) the terms and conditions of a Qualified Joint and Survivor Annuity;
(b) the Participant's right to make and the effect of an election to waive
the Qualified Joint and Survivor Annuity form of benefit;
(c) the rights of a Participant's Spouse; and
(d) the right to make, and the effect of, a revocation of a previous
election to waive the Qualified Joint and Survivor Annuity.
8.6 Notice Requirements For Qualified Pre-Retirement Survivor Annuity In the
case of a qualified pre-retirement survivor annuity as described in paragraph
8.3, the Plan Administrator shall provide each Participant within the applicable
period for such Participant a written explanation of the qualified
pre-retirement survivor annuity in such terms and in such manner as would be
comparable to the explanation provided for meeting the requirements of paragraph
8.5 applicable to a Qualified Joint and Survivor Annuity. The applicable period
for a Participant is whichever of the following periods ends last:
(a) 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;
(b) a reasonable period ending after the individual becomes a Participant;
(c) a reasonable period ending after this Article first applies to the
Participant. Notwithstanding the foregoing, notice must be provided
within a reasonable period ending after separation from Service in the
case of a Participant who separates from Service before attaining age
35.
For purposes of applying the preceding paragraph, a reasonable period ending
after the events described in (b) and (c) is the end of the two-year period
beginning one-year prior to the date the applicable event occurs, and ending
one-year after that date. In the case of a Participant who separates from
Service before the Plan Year in which age 35 is attained, notice shall be
provided within the two-year period beginning one year prior to separation and
ending one year after separation. If such a Participant subsequently returns to
employment with the Employer, the applicable period for such Participant shall
be re-determined.
8.7 Special Safe-Harbor Exception For Certain Profit-Sharing Plans
(a) This paragraph shall apply to a Participant in a profit-sharing plan,
and to any distribution, made on or after the first day of the first
plan year beginning after 1988, from or under a separate account
attributable solely to Qualified Voluntary
<PAGE>
contributions, as maintained on behalf of a Participant in a money
purchase pension plan, (including a target benefit plan) if the
following conditions are satisfied:
(1) the Participant does not or cannot elect payments in the form
of a life annuity; and
(2) on the death of a Participant, the Participant's Vested
Account Balance will be paid to the Participant's Surviving
Spouse, but if there is no Surviving Spouse, or if the
Surviving Spouse has consented in a manner conforming to a
Qualified Election, then to the Participant's Designated
Beneficiary.
The Surviving Spouse may elect to have distribution of the
Vested Account Balance commence within the 90-day period following the
date of the Participant's death. The account balance shall be adjusted
for gains or losses occurring after the Participant's death in
accordance with the provisions of the Plan governing the adjustment of
account balances for other types of distributions. These safe-harbor
rules shall not be operative with respect to a Participant in a
profit-sharing plan if that plan is a direct or indirect transferee of
a Defined Benefit Plan, money purchase plan, a target benefit 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, and would therefore have a Qualified Joint and Survivor
Annuity as its normal form of benefit.
(b) The Participant may waive the spousal death benefit described in this
paragraph at any time provided that no such waiver shall be effective
unless it satisfies the conditions (described in paragraph 8.4) that
would apply to the Participant's waiver of the Qualified Pre-Retirement
Survivor Annuity.
(c) If this paragraph 8.7 is operative, then all other provisions of this
Article other than paragraph 8.8 are inoperative.
8.8 Transitional Joint And Survivor Annuity Rules Special transition rules apply
to Participants who were not receiving benefits on August 23, 1984.
(a) Any living Participant not receiving benefits on August 23, 1984, who
would otherwise not receive the benefits prescribed by the previous
paragraphs of this Article, must be given the opportunity to elect to
have the prior paragraphs of this Article apply if such Participant is
credited with at least one Hour of Service under this Plan or a
predecessor Plan in a Plan Year beginning on or after January 1, 1976
and such Participant had at least 10 Years of Service for vesting
purposes when he or she separated from Service.
(b) Any living Participant not receiving benefits on August 23, 1984, who
was credited with at least one Hour of Service under this Plan or a
predecessor Plan on or after September 2, 1974, and who is not
otherwise credited with any Service in a Plan Year beginning on or
after January 1, 1976, must be given the opportunity to have his or her
benefits paid in accordance with paragraph 8.9.
(c) The respective opportunities to elect [as described in (a) and (b)
above] must be afforded to the appropriate Participants during the
period commencing on
<PAGE>
August 23, 1984 and ending on the date benefits would otherwise
commence to said Participants.
8.9 Automatic Joint And Survivor Annuity And Early Survivor Annuity Any
Participant who has elected pursuant to paragraph 8.8(b) and any Participant who
does not elect under paragraph 8.8(a) or who meets the requirements of paragraph
8.8(a), except that such Participant does not have at least 10 years of vesting
Service when he or she separates from Service, shall have his or her benefits
distributed in accordance with all of the following requirements if benefits
would have been payable in the form of a life annuity.
(a) Automatic Joint and Survivor Annuity. If benefits in the form of a life
annuity become payable to a married Participant who:
(1) begins to receive payments under the Plan on or after Normal
Retirement Age, or
(2) dies on or after Normal Retirement Age while still working for
the Employer, or
(3) begins to receive payments on or after the Qualified Early
Retirement Age, or
(4) separates from Service on or after attaining Normal Retirement
(or the Qualified Early Retirement Age) and after satisfying
the eligibility requirements for the payment of benefits under
the Plan and thereafter dies before beginning to receive such
benefits, then such benefits will be received under this Plan
in the form of a Qualified Joint and Survivor Annuity, unless
the Participant has elected otherwise during the Election
Period. The Election Period must begin at least 6 months
before the Participant attains Qualified Early Retirement Age
and end not more than 90 days before the commencement of
benefits. Any election will be in writing and may be changed
by the Participant at any time.
(b) Election of Early Survivor Annuity. A Participant who is employed after
attaining the Qualified Early Retirement Age will be given the
opportunity to elect, during the Election Period, to have a survivor
annuity payable on death. If the Participant elects the survivor
annuity, payments under such annuity must not be less than the payments
which would have been made to the Spouse under the Qualified Joint and
Survivor Annuity if the Participant had retired on the day before his
or her death. Any election under this provision will be in writing and
may be changed by the Participant at any time. The Election Period
begins on the later of:
(1) the 90th day before the Participant attains the Qualified
Early Retirement Age, or
(2) the date on which participation begins,
and ends on the date the Participant terminates employment.
<PAGE>
8.10 Annuity Contracts Any annuity contract distributed under this Plan must 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.
<PAGE>
ARTICLE IX
VESTING
9.1 Employee Contributions A Participant shall always have a 100% vested and
nonforfeitable interest in his or her Elective Deferrals, Voluntary
Contributions, Qualified Voluntary Contributions, Rollover Contributions, and
Transfer Contributions plus the earnings thereon. No forfeiture of Employer
related contributions (including any minimum contributions made under paragraph
14.2) will occur solely as a result of an Employee's withdrawal of any Employee
contributions.
9.2 Employer Contributions A Participant shall acquire a vested and
nonforfeitable interest in his or her account attributable to Employer
contributions in accordance with the table selected in the Adoption Agreement,
provided that if a Participant is not already fully vested, he or she shall
become so upon attaining Normal Retirement Age, Early Retirement Age, on death
prior to normal retirement, on retirement due to Disability, or on termination
of the Plan.
9.3 Computation Period The computation period for purposes of determining Years
of Service and Breaks in Service for purposes of computing a Participant's
nonforfeitable right to his or her account balance derived from Employer
contributions shall be determined by the Employer in the Adoption Agreement. In
the event a former Participant with no vested interest in his or her Employer
contribution account requalifies for participation in the Plan after incurring a
Break in Service, such Participant shall be credited for vesting with all
pre-break and post-break Service.
9.4 Requalification Prior To Five Consecutive One-Year Breaks In Service The
account balance of such Participant shall consist of any undistributed amount in
his or her account as of the date of re-employment plus any future contributions
added to such account plus the investment earnings on the account. The Vested
Account Balance of such Participant shall be determined by multiplying the
Participant's account balance (adjusted to include any distribution or redeposit
made under paragraph 6.3) by such Participant's vested percentage. All Service
of the Participant, both prior to and following the break, shall be counted when
computing the Participant's vested percentage.
9.5 Requalification After Five Consecutive One-Year Breaks In Service If such
Participant is not fully vested upon re-employment, a new account shall be
established for such Participant to separate his or her deferred vested and
nonforfeitable account, if any, from the account to which new allocations will
be made. The Participant's deferred account to the extent remaining shall be
fully vested and shall continue to share in earnings and losses of the Fund.
When computing the Participant's vested portion of the new account, all
pre-break and post-break Service shall be counted. However, notwithstanding this
provision, no such former Participant who has had five consecutive one-year
Breaks in Service shall acquire a larger vested and nonforfeitable interest in
his or her prior account balance as a result of requalification hereunder.
9.6 Calculating Vested Interest A Participant's vested and nonforfeitable
interest shall be calculated by multiplying the fair market value of his or her
account attributable to Employer contributions on the Valuation Date preceding
distribution by the decimal equivalent of the vested percentage as of his or her
termination date. The amount attributable to Employer contributions for purposes
of the calculation includes amounts previously paid out pursuant to paragraph
6.3 and not repaid. The Participant's vested and nonforfeitable interest, once
calculated above, shall be reduced to reflect those amounts previously paid out
to the Participant and not repaid by the Participant. The Participant's vested
and nonforfeitable interest so determined shall continue to share in the
investment earnings and any increase or decrease in the fair market value of the
Fund up to the Valuation Date preceding or coinciding with payment.
<PAGE>
9.7 Forfeitures Any balance in the account of a Participant who has separated
from Service to which he or she is not entitled under the foregoing provisions,
shall be forfeited and applied as provided in the Adoption Agreement. A
forfeiture may only occur if the Participant has received a distribution from
the Plan or if the Participant has incurred five consecutive 1-year Breaks in
Service. Furthermore, a Highly Compensated Employee's Matching Contributions may
be forfeited, even if vested, if the contributions to which they relate are
Excess Deferrals, Excess Contributions or Excess Aggregate Contributions.
9.8 Amendment Of Vesting Schedule No amendment to the Plan shall have the effect
of decreasing a Participant's vested interest determined without regard to such
amendment as of the later of the date such amendment is adopted or the date it
becomes effective. Further, if the vesting schedule of the Plan is amended, or
the Plan is amended in any way that directly or indirectly affects the
computation of any Participant's nonforfeitable percentage or if the Plan is
deemed amended by an automatic change to or from a Top-Heavy vesting schedule,
each Participant with at least three Years of Service with the Employer may
elect, within a reasonable period after the adoption of the amendment, to have
his or her nonforfeitable percentage computed under the Plan without regard to
such amendment. For Participants who do not have at least one Hour of Service in
any Plan Year beginning after 1988, the preceding sentence shall be applied by
substituting "Five Years of Service" for "Three Years of Service" where such
language appears. The period during which the election may be made shall
commence with the date the amendment is adopted and shall end on the later of:
(a) 60 days after the amendment is adopted;
(b) 60 days after the amendment becomes effective; or
(c) 60 days after the Participant is issued written notice of the amendment
by the Employer or the Trustee/Custodian. If the Trustee/Custodian is
asked to so notify, the Fund will be charged for the costs thereof.
No amendment to the Plan shall be effective to the extent that it has the effect
of decreasing a Participant's accrued benefit. Notwithstanding the preceding
sentence, a Participant's account balance may be reduced to the extent permitted
under section 412(c)(8) of the Code (relating to financial hardships). For
purposes of this paragraph, a Plan amendment which has the effect of decreasing
a Participant's account balance or eliminating an optional form of benefit, with
respect to benefits attributable to service before the amendment, shall be
treated as reducing an accrued benefit.
9.9 Service With Controlled Groups All Years of Service with other members of a
controlled group of corporations [as defined in Code Section 414(b)], trades or
businesses under common control [as defined in Code Section 414(c)], or members
of an affiliated service group [as defined in Code Section 414(m)] shall be
considered for purposes of determining a Participant's nonforfeitable
percentage.
<PAGE>
ARTICLE X
LIMITATIONS ON ALLOCATIONS
AND ANTIDISCRIMINATION TESTING
10.1 Participation In This Plan Only If the Participant does not participate in
and has never participated in another qualified plan, a Welfare Benefit Fund (as
defined in paragraph 1.89) or an individual medical account, as defined in Code
Section 415(l)(2), maintained by the adopting Employer, which provides an Annual
Addition as defined in paragraph 1.4, the amount of Annual Additions which may
be credited to the Participant's account for any Limitation Year will not exceed
the lesser of the Maximum Permissible Amount or any other limitation contained
in this Plan. If the Employer contribution that would otherwise be contributed
or allocated to the Participant's account would cause the Annual Additions for
the Limitation Year to exceed the Maximum Permissible Amount, the amount
contributed or allocated will be reduced so that the Annual Additions for the
Limitation Year will equal the Maximum Permissible Amount. Prior to determining
the Participant's actual Compensation for the Limitation Year, the Employer may
determine the Maximum Permissible Amount for a Participant on the basis of a
reasonable estimate of the Participant's Compensation for the Limitation Year,
uniformly determined for all Participants similarly situated. As soon as is
administratively feasible after the end of the Limitation Year, the Maximum
Permissible Amount for the Limitation Year will be determined on the basis of
the Participant's actual Compensation for the Limitation Year.
10.2 Disposition Of Excess Annual Additions If, pursuant to paragraph 10.1 or as
a result of the allocation of forfeitures, there is an Excess Amount, the excess
will be disposed of under one of the following methods as determined in the
Adoption Agreement. If no election is made in the Adoption Agreement then method
"(a)" below shall apply.
(a) Suspense Account Method
(1) Any nondeductible Employee Voluntary, Required Voluntary
Contributions and unmatched Elective Deferrals to the extent
they would reduce the Excess Amount will be returned to the
Participant. To the extent necessary to reduce the Excess
Amount, non-Highly Compensated Employees will have all
Elective Deferrals returned whether or not there was a
corresponding match.
(2) If after the application of paragraph (1) an Excess Amount
still exists, and the Participant is covered by the Plan at
the end of the Limitation Year, the Excess Amount in the
Participant's account will be used to reduce Employer
contributions (including any allocation of forfeitures) for
such Participant in the next Limitation Year, and each
succeeding Limitation Year if necessary.
(3) If after the application of paragraph (1) an Excess Amount
still exists, and the Participant is not covered by the Plan
at the end of the Limitation Year, the Excess Amount will be
held unallocated in a suspense account. The suspense account
will be applied to reduce future Employer contributions
(including allocation of any forfeitures) for all remaining
Participants in the next Limitation Year, and each succeeding
Limitation Year if necessary.
<PAGE>
(4) If a suspense account is in existence at any time during the
Limitation Year pursuant to this paragraph, it will not
participate in the allocation of investment gains and losses.
If a suspense account is in existence at any time during a
particular Limitation Year, all amounts in the suspense
account must be allocated and reallocated to Participants'
accounts before any Employer contributions or any Employee
Contributions may be made to the Plan for that Limitation
Year. Excess amounts may not be distributed to Participants or
former Participants.
(b) Spillover Method
(1) Any nondeductible Employee Voluntary, Required Voluntary
Contributions and unmatched Elective Deferrals to the extent
they would reduce the Excess Amount will be returned to the
Participant. To the extent necessary to reduce the Excess
Amount, non-Highly Compensated Employees will have all
Elective Deferrals returned whether or not there was a
corresponding match.
(2) Any Excess Amount which would be allocated to the account of
an individual Participant under the Plan's allocation formula
will be reallocated to other Participants in the same manner
as other Employer contributions. No such reallocation shall be
made to the extent that it will result in an Excess Amount
being created in such Participant's own account.
(3) To the extent that amounts cannot be reallocated under (1)
above, the suspense account provisions of (a) above will
apply.
10.3 Participation In This Plan And Another Master and Prototype Defined
Contribution Plan, Welfare Benefit Fund Or Individual Medical Account Maintained
By The Employer The Annual Additions which may be credited to a Participant's
account under this Plan for any Limitation Year will not exceed the Maximum
Permissible Amount reduced by the Annual Additions credited to a Participant's
account under the other Master or Prototype Defined Contribution Plans, Welfare
Benefit Funds, and individual medical accounts as defined in Code Section
415(l)(2), maintained by the Employer, which provide an Annual Addition as
defined in paragraph 1.4 for the same Limitation Year. If the Annual Additions,
with respect to the Participant under other Defined Contribution Plans and
Welfare Benefit Funds maintained by the Employer, are less than the Maximum
Permissible Amount and the Employer contribution that would otherwise be
contributed or allocated to the Participant's account under this Plan would
cause the Annual Additions for the Limitation Year to exceed this limitation,
the amount contributed or allocated will be reduced so that the Annual Additions
under all such plans and funds for the Limitation Year will equal the Maximum
Permissible Amount. If the Annual Additions with respect to the Participant
under such other Defined Contribution Plans and Welfare Benefit Funds in the
aggregate are equal to or greater than the Maximum Permissible Amount, no amount
will be contributed or allocated to the Participant's account under this Plan
for the Limitation Year. Prior to determining the Participant's actual
Compensation for the Limitation Year, the Employer may determine the Maximum
Permissible Amount for a Participant in the manner described in paragraph 10.1.
As soon as administratively feasible after the end of the Limitation Year, the
Maximum Permissible Amount for the Limitation Year will be determined on the
basis of the Participant's actual Compensation for the Limitation Year.
<PAGE>
10.4 Disposition Of Excess Annual Additions Under Two Plans If, pursuant to
paragraph 10.3 or as a result of forfeitures, a Participant's Annual Additions
under this Plan and such other plans would result in an Excess Amount for a
Limitation Year, the Excess Amount will be deemed to consist of the Annual
Additions last allocated except that Annual Additions attributable to a Welfare
Benefit Fund or Individual Medical Account as defined in Code Section 415(l)(2)
will be deemed to have been allocated first regardless of the actual allocation
date. If an Excess Amount was allocated to a Participant on an allocation date
of this Plan which coincides with an allocation date of another plan, the Excess
Amount attributed to this Plan will be the product of:
(a) the total Excess Amount allocated as of such date, times
(b) the ratio of:
(1) the Annual Additions allocated to the Participant for the
Limitation Year as of such date under the Plan, to
(2) the total Annual Additions allocated to the Participant for
the Limitation Year as of such date under this and all the
other qualified Master or Prototype Defined Contribution
Plans.
Any Excess Amount attributed to this Plan will be disposed of in the manner
described in paragraph 10.2.
10.5 Participation In This Plan And Another Defined Contribution Plan Which Is
Not A Master Or Prototype Plan If the Participant is covered under another
qualified Defined Contribution Plan maintained by the Employer which is not a
Master or Prototype Plan, Annual Additions which may be credited to the
Participant's account under this Plan for any Limitation Year will be limited in
accordance with paragraphs 10.3 and 10.4 as though the other plan were a Master
or Prototype Plan, unless the Employer provides other limitations in the
Adoption Agreement.
10.6 Participation In This Plan And A Defined Benefit Plan If the Employer
maintains, or at any time maintained, a qualified Defined Benefit Plan covering
any Participant in this Plan, the sum of the Participant's Defined Benefit Plan
Fraction and Defined Contribution Plan Fraction will not exceed 1.0 in any
Limitation Year. For any Plan Year during which the Plan is Top-Heavy, the
Defined Benefit and Defined Contribution Plan Fractions shall be calculated in
accordance with Code Section 416(h). The Annual Additions which may be credited
to the Participant's account under this Plan for any Limitation Year will be
limited in accordance with the provisions set forth in the Adoption Agreement.
10.7 Average Deferral Percentage (ADP) Test With respect to any Plan Year, the
Average Deferral Percentage for Participants who are Highly Compensated
Employees and the Average Deferral Percentage for Participants who are
non-Highly Compensated Employees must satisfy one of the following tests:
(a) Basic Test - The Average Deferral Percentage for Participants who are
Highly Compensated Employees for the Plan Year is not more than 1.25
times the Average Deferral Percentage for Participants who are
non-Highly Compensated Employees for the same Plan Year, or
(b) Alternative Test - The Average Deferral Percentage for Participants who
are Highly Compensated Employees for the Plan Year does not exceed the
Average Deferral Percentage for Participants who are non-Highly
Compensated Employees for the same Plan Year by more than 2 percentage
points provided
<PAGE>
that the Average Deferral Percentage for Participants who are Highly
Compensated Employees is not more than 2.0 times the Average Deferral
Percentage for Participants who are non-Highly Compensated Employees.
10.8 Special Rules Relating To Application Of ADP Test
(a) The Actual Deferral Percentage for any Participant who is a Highly
Compensated Employee for the Plan Year and who is eligible to have
Elective Deferrals (and Qualified Non-Elective Contributions or
Qualified Matching Contributions, or both, if treated as Elective
Deferrals for purposes of the ADP test) allocated to his or her
accounts under two or more arrangements described in Code Section
401(k), that are maintained by the Employer, shall be determined as if
such Elective Deferrals (and, if applicable, such Qualified
Non-Elective Contributions or Qualified Matching Contributions, or
both) were made under a single arrangement. If a Highly Compensated
Employee participates in two or more cash or deferred arrangements that
have different Plan Years, all cash or deferred arrangements ending
with or within the same calendar year shall be treated as a single
arrangement.
(b) In the event that this Plan satisfies the requirements of 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. For Plan Years
beginning after 1989, plans may be aggregated in order to satisfy Code
Section 401(k) only if they have the same Plan Year.
(c) For purposes of determining the Actual Deferral Percentage of a
Participant who is a 5-percent owner or one of the ten most highly-paid
Highly Compensated Employees, the Elective Deferrals (and Qualified
Non-Elective Contributions or Qualified Matching Contributions, or
both, if treated as Elective Deferrals for purposes of the ADP test)
and Compensation of such Participant shall include the Elective
Deferrals (and, if applicable, Qualified Non-Elective Contributions and
Qualified Matching Contributions, or both) for the Plan Year of Family
Members as defined in paragraph 1.36 of this Plan. Family Members, with
respect to such Highly Compensated Employees, shall be disregarded as
separate Employees in determining the ADP both for Participants who are
non-Highly Compensated Employees and for Participants who are Highly
Compensated Employees. In the event of repeal of the family aggregation
rules under Code Section 414(q)(6), all applications of such rules
under this Plan will cease as of the effective date of such repeal.
(d) For purposes of determining the ADP test, Elective Deferrals, Qualified
Non-Elective Contributions and Qualified Matching Contributions must be
made before the last day of the twelve-month period immediately
following the Plan Year to which contributions relate.
(e) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ADP test and the amount of Qualified Non-Elective
Contributions or Qualified Matching Contributions, or both, used in
such test.
<PAGE>
(f) The determination and treatment of the Actual Deferral Percentage
amounts of any Participant shall satisfy such other requirements as may
be prescribed by the Secretary of the Treasury.
10.9 Recharacterization If the Employer allows for Voluntary Contributions in
the Adoption Agreement, a Participant may treat his or her Excess Contributions
as an amount distributed to the Participant and then contributed by the
Participant to the Plan. Recharacterized amounts will remain nonforfeitable and
subject to the same distribution requirements as Elective Deferrals. Amounts may
not be recharacterized by a Highly Compensated Employee to the extent that such
amount in combination with other Employee Contributions made by that Employee
would exceed any stated limit under the Plan on Voluntary Contributions.
Recharacterization must occur no later than two and one-half months after the
last day of the Plan Year in which such Excess Contributions arose and is deemed
to occur no earlier than the date the last Highly Compensated Employee is
informed in writing of the amount recharacterized and the consequences thereof.
Recharacterized amounts will be taxable to the Participant for the Participant's
tax year in which the Participant would have received them in cash.
10.10 Average Contribution Percentage (ACP) Test If the Employer makes Matching
Contributions or if the Plan allows Employees to make Voluntary Contributions
the Plan must meet additional nondiscrimination requirements provided under Code
Section 401(m). If Employee Contributions (including any Elective Deferrals
recharacterized as Voluntary Contributions) are made pursuant to this Plan, then
in addition to the ADP test referenced in paragraph 10.7, the Average
Contribution Percentage test is also applicable. The Average Contribution
Percentage for Participants who are Highly Compensated Employees for each Plan
Year and the Average Contribution Percentage for Participants who are Non-Highly
Compensated Employees for the same Plan Year must satisfy one of the following
tests:
(a) Basic Test - The Average Contribution Percentage for Participants who
are Highly Compensated Employees for the Plan Year shall not exceed the
Average Contribution Percentage for Participants who are non-Highly
Compensated Employees for the same Plan Year multiplied by 1.25; or
(b) Alternative Test - The ACP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the Average Contribution
Percentage for Participants who are non-Highly Compensated Employees
for the same Plan Year multiplied by two (2), provided that the Average
Contribution Percentage for Participants who are Highly Compensated
Employees does not exceed the Average Contribution Percentage for
Participants who are non-Highly Compensated Employees by more than two
(2) percentage points.
10.11 Special Rules Relating To Application Of ACP Test
(a) If one or more Highly Compensated Employees participate in both a cash
or deferred arrangement and a plan subject to the ACP test maintained
by the Employer and the sum of the ADP and ACP of those Highly
Compensated Employees subject to either or both tests exceeds the
Aggregate Limit, then the ADP or ACP of those Highly Compensated
Employees who also participate in a cash or deferred arrangement will
be reduced (beginning with such Highly Compensated Employee whose ADP
or ACP is the highest) as set forth in the Adoption Agreement so that
the limit is not exceeded. The amount by which each Highly Compensated
Employee's Contribution Percentage Amounts is reduced shall be treated
as an Excess Aggregate Contribution. The ADP and ACP of the Highly
Compensated Employees are determined after any corrections required to
meet the ADP and ACP tests. Multiple use does not occur if both the
<PAGE>
ADP and ACP of the Highly Compensated Employees does not exceed 1.25
multiplied by the ADP and ACP of the non-Highly Compensated Employees.
(b) For purposes of this Article, the Contribution Percentage for any
Participant who is a Highly Compensated Employee and who is eligible to
have Contribution Percentage Amounts allocated to his or her 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, 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.
(c) In the event that this Plan satisfies the requirements of Code Sections
401(a)(4), 401(m), 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 Percentage of
Employees as if all such plans were a single plan. For plan years
beginning after 1989, plans may be aggregated in order to satisfy Code
Section 401(m) only if the aggregated plans have the same Plan Year.
(d) For purposes of determining the Contribution percentage of a
Participant who is a five-percent owner or one of the ten most
highly-paid, Highly Compensated Employees, the Contribution Percentage
Amounts and Compensation of such Participant shall include the
Contribution Percentage Amounts and Compensation for the Plan Year of
Family Members as defined in Paragraph 1.36 of this Plan. Family
Members, with respect to Highly Compensated Employees, shall be
disregarded as separate Employees in determining the Contribution
Percentage both for Participants who are non-Highly Compensated
Employees and for Participants who are Highly Compensated Employees. In
the event of repeal of the family aggregation rules under Code Section
414(q)(6), all applications of such rules under this Plan will cease as
of the effective date of such repeal.
(e) For purposes of determining the Contribution Percentage test, Employee
Contributions are considered to have been made in the Plan Year in
which contributed to the trust. Matching Contributions and Qualified
Non-Elective Contributions will be considered made for a Plan Year if
made no later than the end of the twelve-month period beginning on the
day after the close of the Plan Year.
(f) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ACP test and the amount of Qualified Non-Elective
Contributions or Qualified Matching Contributions, or both, used in
such test.
(g) 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.
(h) Qualified Matching Contributions and Qualified Non-Elective
Contributions used to satisfy the ADP test may not be used to satisfy
the ACP test.
<PAGE>
ARTICLE XI
ADMINISTRATION
11.1 Plan Administrator The Employer shall be the named fiduciary and Plan
Administrator. These duties shall include:
(a) appointing the Plan's attorney, accountant, actuary, or any other party
needed to administer the Plan,
(b) directing the Trustee/Custodian with respect to payments from the Fund,
(c) communicating with Employees regarding their participation and benefits
under the Plan, including the administration of all claims procedures,
(d) filing any returns and reports with the Internal Revenue Service,
Department of Labor, or any other governmental agency,
(e) reviewing and approving any financial reports, investment reviews, or
other reports prepared by any party appointed by the Employer under
paragraph (a),
(f) establishing a funding policy and investment objectives consistent with
the purposes of the Plan and the Employee Retirement Income Security
Act of 1974, and
(g) construing and resolving any question of Plan interpretation. The Plan
Administrator's interpretation of Plan provisions including eligibility
and benefits under the Plan is final, and unless it can be shown to be
arbitrary and capricious will not be subject to "de novo" review.
11.2 Trustee/Custodian The Trustee/Custodian shall be responsible for the
administration of investments held in the Fund. These duties shall include:
(a) receiving contributions under the terms of the Plan, but not
determining the amount or enforcing the payment thereof.
(b) making distributions from the Fund in accordance with written
instructions received from an authorized representative of the
Employer,
(c) keeping accurate records reflecting its administration of the Fund and
making such records available to the Employer for review and audit.
Within 90 days after each Plan Year, and within 90 days after its
removal or resignation, the Trustee/Custodian shall file with the
Employer an accounting of its administration of the Fund during such
year or from the end of the preceding Plan Year to the date of removal
or resignation. Such accounting shall include a statement of cash
receipts and disbursements since the date of its last accounting and
shall contain an asset list showing the fair market value of
investments held in the Fund as of the end of the Plan Year. The value
of marketable investments shall be determined using the most recent
price quoted on a national securities exchange or over the counter
market. The value of non-marketable investments shall be determined in
the sole judgement of the
<PAGE>
Trustee/Custodian which determination shall be binding and conclusive.
The value of investments in securities or obligations of the Employer
in which there is no market shall be determined in the sole judgement
of the Employer and the Trustee/Custodian shall have no responsibility
with respect to the valuation of such assets. The Employer shall review
the Trustee/Custodian's accounting and notify the Trustee/Custodian in
the event of its disapproval of the report within 90 days, providing
the Trustee/Custodian with a written description of the items in
question. The Trustee/Custodian shall have 60 days to provide the
Employer with a written explanation of the items in question. If the
Employer again disapproves, the Trustee/Custodian shall file its
accounting in a court of competent jurisdiction for audit and
adjudication. If the Employer fails to provide such written
disapproval, the Trustee/Custodian shall be forever released and
discharged from all liability and accountability with respect to the
actions and transactions shown in such report.
(d) employing such agents, attorney's or other professionals as the Trustee
may deem necessary or advisable in the performance of its duties.
The Trustee's/Custodian's duties shall be limited to those described above. The
Employer shall be responsible for any other administrative duties required under
the Plan or by applicable law.
11.3 Administrative Fees And Expenses All reasonable costs, charges and expenses
incurred by the Trustee/Custodian in connection with the administration of the
Fund and all reasonable costs, charges and expenses incurred by the Plan
Administrator in connection with the administration of the Plan (including fees
for legal services rendered to the Trustee/Custodian or Plan Administrator) may
be paid by the Employer, but if not paid by the Employer when due, shall be paid
from the Fund. Such reasonable compensation to the Trustee/Custodian as may be
agreed upon from time to time between the Employer and the Trustee/Custodian and
such reasonable compensation to the Plan Administrator as may be agreed upon
from time to time between the Employer and Plan Administrator may be paid by the
Employer, but if not paid by the Employer when due shall be paid by the Fund.
The Trustee shall have the right to liquidate trust assets to cover its fees.
Notwithstanding the foregoing, no compensation other than reimbursement for
expenses shall be paid to a Plan Administrator who is the Employer or a
full-time Employee of the Employer. In the event any part of the Trust/Custodial
Account becomes subject to tax, all taxes incurred will be paid from the Fund
unless the Plan Administrator advises the Trustee/Custodian not to pay such tax.
11.4 Division Of Duties And Indemnification
(a) The Trustee/Custodian shall have the authority and discretion to manage
and govern the Fund to the extent provided in this instrument, but does
not guarantee the Fund in any manner against investment loss or
depreciation in asset value, or guarantee the adequacy of the Fund to
meet and discharge all or any liabilities of the Plan.
(b) The Trustee/Custodian shall not be liable for the making, retention or
sale of any investment or reinvestment made by it, as herein provided,
or for any loss to, or diminution of the Fund, or for any other loss or
damage which may result from the discharge of its duties hereunder
except to the extent it is judicially determined that the
Trustee/Custodian has failed to exercise the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent person
acting in a like capacity and familiar with such matters would use in
the conduct of an enterprise of a like character with like aims.
<PAGE>
(c) The Employer warrants that all directions issued to the
Trustee/Custodian by it or the Plan Administrator will be in accordance
with the terms of the Plan and not contrary to the provisions of the
Employee Retirement Income Security Act of 1974 and regulations issued
thereunder.
(d) The Trustee/Custodian shall not be answerable for any action taken
pursuant to any direction, consent, certificate, or other paper or
document on the belief that the same is genuine and signed by the
proper person. All directions by the Employer, Participant or the Plan
Administrator shall be in writing. The Employer shall deliver to the
Trustee/Custodian certificates evidencing the individual or individuals
authorized to act as set forth in the Adoption Agreement or as the
Employer may subsequently inform the Trustee/Custodian in writing and
shall deliver to the Trustee/Custodian specimens of their signatures.
(e) The duties and obligations of the Trustee/Custodian shall be limited to
those expressly imposed upon it by this instrument or subsequently
agreed upon by the parties. Responsibility for administrative duties
required under the Plan or applicable law not expressly imposed upon or
agreed to by the Trustee/Custodian, shall rest solely with the
Employer.
(f) The Trustee shall be indemnified and saved harmless by the Employer
from and against any and all liability to which the Trustee/Custodian
may be subjected, including all expenses reasonably incurred in its
defense, for any action or failure to act resulting from compliance
with the instructions of the Employer, the employees or agents of the
Employer, the Plan Administrator, or any other fiduciary to the Plan,
and for any liability arising from the actions or non-actions of any
predecessor Trustee/Custodian or fiduciary or other fiduciaries of the
Plan.
(g) The Trustee/Custodian shall not be responsible in any way for the
application of any payments it is directed to make or for the adequacy
of the Fund to meet and discharge any and all liabilities under the
Plan.
<PAGE>
ARTICLE XII
TRUST FUND/CUSTODIAL ACCOUNT
12.1 The Fund The Fund shall consist of all contributions made under Article III
and Article IV of the Plan and the investment thereof and earnings thereon. All
contributions and the earnings thereon less payments made under the terms of the
Plan, shall constitute the Fund. The Fund shall be administered as provided in
this document.
12.2 Control Of Plan Assets The assets of the Fund or evidence of ownership
shall be held by the Trustee/Custodian under the terms of the Plan and
Trust/Custodial Account. If the assets represent amounts transferred from
another trustee/custodian under a former plan, the Trustee/Custodian named
hereunder shall not be responsible for the propriety of any investment under the
former plan.
12.3 Exclusive Benefit Rules No part of the Fund shall be used for, or diverted
to, purposes other than for the exclusive benefit of Participants, former
Participants with a vested interest, and the beneficiary or beneficiaries of
deceased Participants having a vested interest in the Fund at death.
12.4 Assignment And Alienation Of Benefits No right or claim to, or interest in,
any part of the Fund, or any payment from the Fund, shall be assignable,
transferable, or subject to sale, mortgage, pledge, hypothecation, commutation,
anticipation, garnishment, attachment, execution, or levy of any kind. The
Trustee/Custodian shall not recognize any attempt to assign, transfer, sell,
mortgage, pledge, hypothecate, commute, or anticipate the same, except to the
extent required by law. The preceding sentences shall also apply to the
creation, assignment, or recognition of a right to any benefit payable with
respect to a Participant pursuant to a domestic relations order, unless such
order is determined to be a qualified domestic relations order, as defined in
Code Section 414(p), or any domestic relations order entered before January 1,
1985 which the Plan attorney and Plan Administrator deem to be qualified.
12.5 Determination Of Qualified Domestic Relations Order (QDRO) A Domestic
Relations Order shall specifically state all of the following in order to be
deemed a Qualified Domestic Relations Order ("QDRO"):
(a) The name and last known mailing address (if any) of the Participant and
of each alternate payee covered by the QDRO. However, if the QDRO does
not specify the current mailing address of the alternate payee, but the
Plan Administrator has independent knowledge of that address, the QDRO
will still be valid.
(b) The dollar amount or percentage of the Participant's benefit to be paid
by the Plan to each alternate payee, or the manner in which the amount
or percentage will be determined.
(c) The number of payments or period for which the order applies.
(d) The specific plan (by name) to which the Domestic Relations Order
applies.
The Domestic Relations Order shall not be deemed a QDRO if it requires the Plan
to provide:
(e) any type or form of benefit, or any option not already provided for in
the Plan;
(f) increased benefits, or benefits in excess of the Participant's vested
rights;
<PAGE>
(g) payment of a benefit earlier than allowed by the Plan's earliest
retirement provisions or in the case of a profit-sharing plan, prior to
the allowability of in-service withdrawals, or
(h) payment of benefits to an alternate payee which are required to be paid
to another alternate payee under another QDRO.
Promptly, upon receipt of a Domestic Relations Order ("Order") which may or may
not be "Qualified", the Plan Administrator shall notify the Participant and any
alternate payee(s) named in the Order of such receipt, and include a copy of
this paragraph 12.5. The Plan Administrator shall then forward the Order to the
Plan's legal counsel for an opinion as to whether or not the Order is in fact
"Qualified" as defined in Code Section 414(p). Within a reasonable time after
receipt of the Order, not to exceed 60 days, the Plan's legal counsel shall make
a determination as to its "Qualified" status and the Participant and any
alternate payee(s) shall be promptly notified in writing of the determination.
If the "Qualified" status of the Order is in question, there will be a delay in
any payout to any payee including the Participant, until the status is resolved.
In such event, the Plan Administrator shall segregate the amount that would have
been payable to the alternate payee(s) if the Order had been deemed a QDRO. If
the Order is not Qualified, or the status is not resolved (for example, it has
been sent back to the Court for clarification or modification) within 18 months
beginning with the date the first payment would have to be made under the Order,
the Plan Administrator shall pay the segregated amounts plus interest to the
person(s) who would have been entitled to the benefits had there been no Order.
If a determination as to the Qualified status of the Order is made after the
18-month period described above, then the Order shall only be applied on a
prospective basis. If the Order is determined to be a QDRO, the Participant and
alternate payee(s) shall again be notified promptly after such determination.
Once an Order is deemed a QDRO, the Plan Administrator shall pay to the
alternate payee(s) all the amounts due under the QDRO, including segregated
amounts plus interest which may have accrued during a dispute as to the Order's
qualification.
Unless specified otherwise in the Adoption Agreement, the earliest retirement
age with regard to the Participant against whom the order is entered shall be
the date the order is determined to be qualified. This will only allow payouts
to alternate payee(s) and not the Participant.
<PAGE>
ARTICLE XIII
INVESTMENTS
13.1 Fiduciary Standards The Trustee/Custodian shall invest and reinvest
principal and income in the same Fund in accordance with the investment
objectives established by the Employer, provided that:
(a) such investments are prudent under the Employee Retirement Income
Security Act of 1974 and the regulations thereunder,
(b) such investments are sufficiently diversified or otherwise insured or
guaranteed to minimize the risk of large losses, and
(c) such investments are similar to those which would be purchased by
another professional money manager for a like plan with similar
investment objectives.
13.2 Funding Arrangement The Employer shall appoint the Sponsor or an individual
or individuals as Trustee under the Employer's Plan. Such appointment shall be
made in the Adoption Agreement. If the Sponsor is not named Trustee it will
serve as Custodian under the Plan as provided at paragraph 13.4.
13.3 Investment Alternatives Of The Trustee As Trustee, the Sponsor shall
implement an investment program based on the Employer's investment objectives
and the Employee Retirement Income Security Act of 1974. In addition to powers
given by law, the Trustee may:
(a) invest the Fund in any form of property, including common and preferred
stocks, exchange traded put and call options, bonds, money market
instruments, mutual funds (including funds for which the Trustee or its
affiliates serve as investment advisor), savings accounts, certificates
of deposit, Treasury bills, insurance policies and contracts, or in any
other property, real or personal, having a ready market. The Trustee
may invest in time deposits (including, if applicable, its own or those
of affiliates) which bear a reasonable interest rate. No portion of any
Qualified Voluntary Contribution, or the earnings thereon, may be
invested in life insurance contracts or, as with any
Participant-directed investment, in tangible personal property
characterized by the IRS as a collectible,
(b) invest any assets of the Fund in a group or collective trust
established to permit the pooling of funds of separate pension and
profit-sharing trusts, provided the Internal Revenue Service has ruled
such group or collective trust to be qualified under Code Section
401(a) and exempt under Code Section 501(a) (or the applicable
corresponding provision of any other Revenue Act) or to any other
common, collective, or commingled trust fund which has been or may
hereafter be established and maintained by the Trustee and/or
affiliates of the Trustee. Such commingling of assets of the Fund with
assets of other qualified trusts is specifically authorized, and to the
extent of the investment of the Fund in such a group or collective
trust, the terms of the instrument establishing the group or collective
trust shall be a part hereof as though set forth herein, The Employer
expressly understands and agrees that any such collective fund may
provide for the lending of its securities by the collective fund
trustee and that such collective fund's trustee will receive
compensation from such collective fund for the lending of securities
that is separate from any compensation of the Trustee
<PAGE>
hereunder, or any compensation of the collective fund trustee for the
management of such collective fund;
(c) invest up to 100% of the Fund in the common stock, debt obligations, or
any other security issued by the Employer or by an affiliate of the
Employer within the limitations provided under Sections 406, 407, and
408 of the Employee Retirement Income Security Act of 1974 and further
provided that such investment does not constitute a prohibited
transaction under Code Section 4975. Any such investment in Employer
securities shall only be made upon written direction of the Employer
who shall be solely responsible for propriety of such investment,
(d) hold cash uninvested and deposit same with any banking or savings
institution, including its own banking department,
(e) hold uninvested cash awaiting investment or distribution, and such
additional cash balances as it shall deem reasonable or necessary,
without incurring any liability for the payment of interest thereon,
notwithstanding the Trustee's receipt of "float" from such uninvested
cash,
(f) join in or oppose the reorganization, recapitalization, consolidation,
sale or merger of corporations or properties, including those in which
it is interested as Trustee, upon such terms as it deems wise,
(g) hold investments in nominee or bearer form; hold securities
unregistered, or register them in its own name or in the names of
nominees. The Trustee may hold securities or other property in the name
of any one or more nominees, domestic or foreign, and may appoint
domestic or foreign custodians to hold investments in the United States
of America or abroad. The Trustee may deposit securities with stock
clearing corporations or depositories or similar organizations,
(h) vote proxies and, if appropriate, pass them on to any investment
manager which may have directed the investment in the equity giving
rise to the proxy. See paragraph 13.8 for Participant-directed voting
of Employer Stock,
(i) exercise all ownership rights with respect to assets held in the Fund,
except as delegated in accordance with paragraph 13.8 hereof.
13.4 Duties Of The Custodian As Custodian, the Sponsor shall be depository of
all or part of the Fund and shall, at the direction of the Trustee hold any
assets received from the Trustee or its agents. The Custodian shall receive and
deliver assets as instructed by the Trustee or its agents. To the extent that
the Custodian holds title to Plan assets and such ownership requires action on
the part of the registered owner, such action will be taken by the Custodian
only upon receipt of specific instructions from the Trustee or its agents.
Proxies shall be voted by or pursuant to the express direction of the Trustee or
authorized agent of the Trustee. As Custodian, the Sponsor shall not give any
investment advice, including any opinion on the prudence of directed
investments. The Employer and Trustee and the agents thereof assume all
responsibility for adherence to fiduciary standards under the Employee
Retirement Income Security Act of 1974 (ERISA) and all amendments thereof, and
regulations thereunder.
13.5 Participant Loans If agreed upon by the Trustee and permitted by the
Employer in the Adoption Agreement, a Plan Participant may make application to
the Employer requesting a loan from
<PAGE>
the Fund. The Employer shall have the sole right to approve or disapprove a
Participant's application provided that loans shall be made available to all
Participants on a reasonably equivalent basis. Loans shall not be made available
to Highly Compensated Employees [as defined in Code Section 414(q)] in an amount
greater than the amount made available to other Employees. Any loan granted
under the Plan shall be made subject to the following rules:
(a) No loan, when aggregated with any outstanding Participant loan(s),
shall exceed the lesser of (i) $50,000 reduced by the excess, if any,
of the highest outstanding balance of loans during the one year period
ending on the day before the loan is made, over the outstanding balance
of loans from the Plan on the date the loan is made or (ii) one-half of
the fair market value of a Participant's Vested Account Balance built
up from Employer Contributions, Voluntary Contributions, and Rollover
Contributions. If the Participant's Vested Account Balance is $20,000
or less, the maximum loan shall not exceed the lesser of $10,000 or
100% of the Participant's Vested Account Balance. For the purpose of
the above limitation, all loans from all plans of the Employer and
other members of a group of employers described in Code Sections
414(b), 414(c), and 414(m) are aggregated. An assignment or pledge of
any portion of the Participant's interest in the Plan and a loan,
pledge, or assignment with respect to any insurance contract purchased
under the Plan, will be treated as a loan under this paragraph.
(b) All applications must be made on forms provided by the Employer and
must be signed by the Participant.
(c) Any loan shall bear interest at a rate reasonable at the time of
application, considering the purpose of the loan and the rate being
charged by representative commercial banks in the local area for a
similar loan unless the Employer sets forth a different method for
determining loan interest rates in its loan procedures. The loan
agreement shall also provide that the payment of principal and interest
be amortized in level payments not less than quarterly.
(d) The term of such loan shall not exceed five years except in the case of
a loan for the purpose of acquiring any house, apartment, condominium,
or mobile home (not used on a transient basis) which is used or is to
be used within a reasonable time as the principal residence of the
Participant. The term of such loan shall be determined by the Employer
considering the maturity dates quoted by representative commercial
banks in the local area for a similar loan.
(e) The principal and interest paid by a Participant on his or her loan
shall be credited to the Fund in the same manner as for any other Plan
investment. If elected in the Adoption Agreement, loans may be treated
as segregated investments of the individual Participants. This
provision is not available if its election will result in
discrimination in operation of the Plan.
(f) If a Participant's loan application is approved by the Employer, such
Participant shall be required to sign a note, loan agreement, and
assignment of 50% of his or her interest in the Fund as collateral for
the loan. The Participant, except in the case of a profit-sharing plan
satisfying the requirements of paragraph 8.7 must obtain the consent of
his or her Spouse, if any, within the 90 day period before the time his
or her account balance is used as security for the loan. A new consent
is required if the account balance is used for any renegotiation,
extension, renewal or other revision of the loan, including an increase
in the amount thereof. The consent must be written, must acknowledge
the effect of
<PAGE>
the loan, and must be witnessed by a plan representative or notary
public. Such consent shall subsequently be binding with respect to the
consenting Spouse or any subsequent Spouse.
(g) If a valid Spousal consent has been obtained, then, notwithstanding any
other provision of this Plan, the portion of the Participant's Vested
Account Balance used as a security interest held by the Plan by reason
of a loan outstanding to the Participant shall be taken into account
for purposes of determining the amount of the account balance payable
at the time of death or distribution, but only if the reduction is used
as repayment of the loan. If less than 100% of the Participant's Vested
Account Balance (determined without regard to the preceding sentence)
is payable to the Surviving Spouse, then the account balance shall be
adjusted by first reducing the Vested Account Balance by the amount of
the security used as repayment of the loan, and then determining the
benefit payable to the Surviving Spouse.
(h) The Employer may also require additional collateral in order to
adequately secure the loan.
(i) A Participant's loan shall immediately become due and payable if such
Participant terminates employment for any reason or fails to make a
principal and/or interest payment as provided in the loan agreement. If
such Participant terminates employment, the Employer shall immediately
request payment of principal and interest on the loan. If the
Participant refuses payment following termination, the Employer shall
reduce the Participant's Vested Account Balance by the remaining
principal and interest on his or her loan. If the Participant's Vested
Account Balance is less than the amount due, the Employer shall take
whatever steps are necessary to collect the balance due directly from
the Participant. However, no foreclosure on the Participant's note or
attachment of the Participant's account balance will occur until a
distributable event occurs in the Plan.
(j) No loans will be made to Owner-Employees (as defined in paragraph 1.51)
or Shareholder-Employees (as defined in paragraph 1.74), unless the
Employer obtains a prohibited transaction exemption from the Department
of Labor.
13.6 Reserved
13.7 Employer Investment Direction If agreed upon by the Trustee and approved by
the Employer in the Adoption Agreement, the Employer shall have the right to
direct the Trustee with respect to investments of the Fund, may appoint an
investment manager (registered as an investment advisor under the Investment
Advisors Act of 1940) to direct investments, or may give the Trustee sole
investment management responsibility. The Employer may purchase and sell
interests in a registered investment company (i.e., mutual funds) for which the
Sponsor, its parent, affiliates, or successors, may serve as investment advisor
and receive compensation from the registered investment company for its services
as investment advisor. The Employer shall advise the Trustee in writing
regarding the retention of investment powers, the appointment of an investment
manager, or the delegation of investment powers to the Trustee. Any investment
directive under this Plan shall be made in writing by the Employer or investment
manager, as the case may be. In the absence of such written directive, the
Trustee shall automatically invest the available cash in its discretion in an
appropriate interim investment until specific investment directions are
received. Such instructions regarding the delegation of investment
responsibility shall remain in force until revoked or amended in writing. The
Trustee shall not be responsible for the propriety of any directed investment
made and shall not be required to consult with or
<PAGE>
advise the Employer regarding the investment quality of any directed investment
held hereunder. If the Employer fails to designate an investment manager, the
Trustee shall have full investment authority. If the Employer does not issue
investment directions, the Trustee shall have authority to invest the Fund in
its sole discretion. While the Employer may direct the Trustee with respect to
Plan investments, the Employer may not:
(a) borrow from the Fund or pledge any of the assets of the Fund as
security for a loan,
(b) buy property or assets from or sell property or assets to the Fund,
(c) charge any fee for services rendered to the Fund, or
(d) receive any services from the Fund on a preferential basis.
13.8 Employee Investment Direction If agreed to by the Trustee and approved by
the Employer in the Adoption Agreement, Participants shall be given the option
to direct the investment of their personal contributions and their share of the
Employer's contribution among alternative investment funds established as part
of the overall Fund. Unless otherwise specified by the Employer in the Adoption
Agreement, such investment funds shall be restricted to funds offered by the
Trustee. In this connection, Participants shall direct the Trustee as to the
manner in which to vote all shares of Employer stock [as described in paragraph
13.3(c)], including fractional shares, which are allocated to that Participant's
account. In the event any person or entity makes a tender offer for, or a
request or invitation for tenders of Employer stock, the Trustee shall tender or
not tender all of the shares of Employer stock, including fractional shares,
allocated to a Participant's account in the manner directed by the Participant
to whose account those shares are allocated. The following rules shall apply to
the administration of such funds.
(a) At the time an Employee becomes eligible for the Plan, he or she shall
complete an investment designation form stating the percentage of his
or her contributions to be invested in the available funds.
(b) A Participant may change his or her election with respect to future
contributions by filing a new investment designation form with the
Employer in accordance with the procedures established by the Plan
Administrator.
(c) A Participant may elect to transfer all or part of his or her balance
from one investment fund to another by filing an investment designation
form with the Employer in accordance with the procedures established by
the Plan Administrator.
(d) The Employer shall be responsible when transmitting Employee and
Employer contributions to show the dollar amount to be credited to each
investment fund for each Employee.
(e) The Plan Administrator shall establish and maintain procedures by which
Participants shall be (i) timely notified of their right to direct the
voting and tender of Employer stock allocated to their accounts and the
manner in which any such directions are to be conveyed to the Trustee,
and (ii) given information relevant to making such decisions.
(f) If a Participant fails to direct the voting of shares of Employer stock
allocated to his or her account, the Trustee shall vote such shares of
stock at the direction of the Plan Administrator. If a Participant
fails to direct the Trustee as to whether
<PAGE>
or not to tender shares of Employer stock allocated to the
Participant's account, the Trustee shall tender or not tender such
stock at the direction of the Plan Administrator.
(g) Except as otherwise provided in the Plan, neither the Trustee, nor the
Employer, nor any fiduciary of the Plan shall be liable to the
Participant or any of his or her beneficiaries for any loss resulting
from action taken at the direction of the Participant.
<PAGE>
ARTICLE XIV
TOP-HEAVY PROVISIONS
14.1 Applicability Of Rules If the Plan is or becomes Top-Heavy in any Plan Year
beginning after 1983, the provisions of this Article will supersede any
conflicting provisions in the Plan or Adoption Agreement.
14.2 Minimum Contribution Notwithstanding any other provision in the Employer's
Plan, for any Plan Year in which the Plan is Top-Heavy or Super Top-Heavy, the
aggregate Employer contributions and forfeitures allocated on behalf of any
Participant (without regard to any Social Security contribution) under this Plan
and any other Defined Contribution Plan of the Employer shall be lesser of 3% of
such Participant's Compensation or the largest percentage of Employer
contributions and forfeitures, as a percentage of the first $200,000, as
adjusted under Code Section 415(d), of the Key Employee's Compensation,
allocated on behalf of any Key Employee for that year.
Each Participant who is employed by the Employer on the last day of the Plan
Year shall be entitled to receive an allocation of the Employer's minimum
contribution for such Plan Year. The minimum allocation applies even though
under other Plan provisions the Participant would not otherwise be entitled to
receive an allocation, or would have received a lesser allocation for the year
because the Participant fails to make Mandatory Contributions to the Plan, the
Participant's Compensation is less than a stated amount, or the Participant
fails to complete 1,000 Hours of Service (or such lesser number designated by
the Employer in the Adoption Agreement) during the Plan Year. A Paired
profit-sharing plan designated to provide the minimum Top-Heavy contribution
must do so regardless of profits. An Employer may make the minimum Top-Heavy
contribution available to all Participants or just non-Key Employees.
For purposes of computing the minimum allocation, Compensation shall mean
Compensation as defined in paragraph 1.12(c) of the Plan.
The Top-Heavy minimum contribution does not apply to any Participant to the
extent the Participant is covered under any other plan(s) of the Employer and
the Employer has provided in Section 11 of the Adoption Agreement that the
minimum allocation or benefit requirements applicable to Top-Heavy Plans will be
met in the other plan(s).
If a Key Employee makes an Elective Deferral or has an allocation of Matching
Contributions made to his or her account, a Top-Heavy minimum will be required
for non-Key Employees who are Participants, however, neither Elective Deferrals
by nor Matching Contributions to non-Key Employees may be taken into account for
purposes of satisfying the top-heavy Minimum Contribution requirement.
14.3 Minimum Vesting For any Plan Year in which this Plan is Top-Heavy, the
minimum vesting schedule elected by the Employer in the Adoption Agreement will
automatically apply to the Plan. If the vesting schedule selected by the
Employer in the Adoption Agreement is less liberal than the allowable schedule,
the schedule will automatically be modified. If the vesting schedule under the
Employer's Plan shifts in or out of the Top-Heavy schedule for any Plan Year,
such shift is an amendment to the vesting schedule and the election in paragraph
9.8 of the Plan applies. The minimum vesting schedule applies to all accrued
benefits within the meaning of Code Section 411(a)(7) except those attributable
to Employee contributions, including benefits accrued before the
effective date of Code Section 416 and benefits accrued before the Plan became
Top-Heavy. Further, no reduction in vested benefits may occur in the event the
Plan's status as Top-Heavy changes for any Plan Year. However, this paragraph
does not apply to the account balances of any Employee who does not have an Hour
of Service after the Plan initially
<PAGE>
becomes Top-Heavy and such Employee's account balance attributable to Employer
contributions and forfeitures will be determined without regard to this
paragraph.
14.4 Limitations On Allocations In any Plan Year in which the Top-Heavy Ratio
exceeds 90% (i.e., the Plan becomes Super Top-Heavy), the denominators of the
Defined Benefit Fraction (as defined in paragraph 1.16) and Defined Contribution
Fraction (as defined in paragraph 1.19) shall be computed using 100% of the
dollar limitation instead of 125%.
<PAGE>
ARTICLE XV
AMENDMENT AND TERMINATION
15.1 Amendment By Sponsor The Sponsor may amend any or all provisions of this
Plan and Trust/Custodial Account at any time without obtaining the approval or
consent of any Employer which has adopted this Plan and Trust/Custodial Account
provided that no amendment shall authorize or permit any part of the corpus or
income of the Fund to be used for or diverted to purposes other than for the
exclusive benefit of Participants and their beneficiaries, or eliminate an
optional form of distribution. In the case of a mass-submitted plan, the
mass-submitter shall amend the Plan on behalf of the Sponsor.
15.2 Amendment By Employer The Employer may amend any option in the Adoption
Agreement, and may include language as permitted in the Adoption Agreement,
(a) to satisfy Code Section 415, or
(b) to avoid duplication of minimums under Code Section 416
because of the required aggregation of multiple plans.
The Employer may add certain model amendments published by the Internal Revenue
Service which specifically provide that their adoption will not cause the Plan
to be treated as an individually designed plan for which the Employer must
obtain a separate determination letter.
If the Employer amends the Plan and Trust/Custodial Account other than as
provided above, the Employer's Plan shall no longer participate in this
Prototype Plan and will be considered an individually designed plan.
15.3 Termination Employers shall have the right to terminate their Plans upon 60
days notice in writing to the Trustee/Custodian. If the Plan is terminated,
partially terminated, or if there is a complete discontinuance of contributions
under a profit-sharing plan maintained by the Employer, all amounts credited to
the accounts of Participants shall vest and become nonforfeitable. In the event
of a partial termination, only those who are affected by such partial
termination shall be fully vested. In the event of termination, the Employer
shall direct the Trustee/Custodian with respect to the distribution of accounts
to or for the exclusive benefit of Participants or their beneficiaries. The
Trustee/Custodian shall dispose of the Fund in accordance with the written
directions of the Plan Administrator, provided that no liquidation of assets and
payment of benefits, (or provision therefor), shall actually be made by the
Trustee/Custodian until after it is established by the Employer in a manner
satisfactory to the Trustee/Custodian, that the applicable requirements, if any,
of the Employee Retirement Income Security Act of 1974 and the Internal Revenue
Code governing the termination of employee benefit plans, have been or are
being, complied with, or that appropriate authorizations, waivers, exemptions,
or variances have been, or are being obtained.
15.4 Qualification Of Employer's Plan If the adopting Employer fails to attain
or retain Internal Revenue Service qualification, such Employer's Plan shall no
longer participate in this Prototype Plan and will be considered an individually
designed plan.
<PAGE>
15.5 Mergers And Consolidations
(a) In the case of any merger or consolidation of the Employer's Plan with,
or transfer of assets or liabilities of the Employer's Plan to, any
other plan, Participants in the Employer's Plan shall be entitled to
receive benefits immediately after the merger, consolidation, or
transfer which are equal to or greater than the benefits they would
have been entitled to receive immediately before the merger,
consolidation, or transfer if the Plan had then terminated.
(b) Any corporation into which the Trustee/Custodian or any successor
trustee/custodian may be merged or with which it may be consolidated,
or any corporation resulting from any merger or consolidation to which
the Trustee/Custodian or any successor trustee/custodian may be a
party, or any corporation to which all or substantially all the trust
business of the Trustee/Custodian or any successor trustee/custodian
may be transferred, shall be the successor of such Trustee/Custodian
without the filing of any instrument or performance of any further act,
before any court.
15.6 Resignation And Removal The Trustee/Custodian may resign by written notice
to the Employer which shall be effective 60 days after delivery. The Employer
may discontinue its participation in this Prototype Plan and Trust/Custodial
Account effective upon 60 days written notice to the Sponsor. In such event the
Employer shall, prior to the effective date thereof, amend the Plan to eliminate
any reference to this Prototype Plan and Trust/Custodial Account and appoint a
successor trustee or custodian or arrange for another funding agent. The
Trustee/Custodian shall deliver the Fund to its successor on the effective date
of the resignation or removal, or as soon thereafter as practicable, provided
that this shall not waive any lien the Trustee/Custodian may have upon the Fund
for its compensation or expenses. If the Employer fails to amend the Plan and
appoint a successor trustee, custodian, or other funding agent within the said
60 days, or such longer period as the Trustee/Custodian may specify in writing,
the Plan shall be deemed individually designed and the Employer shall be deemed
the successor trustee/custodian. The Employer must then obtain its own
determination letter.
15.7 Qualification Of Prototype The Sponsor intends that this Prototype Plan
will meet the requirements of the Code as a qualified Prototype Retirement Plan
and Trust/Custodial Account. Should the Commissioner of Internal Revenue or any
delegate of the Commissioner at any time determine that the Plan and
Trust/Custodial Account fails to meet the requirements of the Code, the Sponsor
will amend the Plan and Trust/Custodial Account to maintain its qualified
status.
<PAGE>
ARTICLE XVI
GOVERNING LAW
Construction, validity and administration of the Prototype Plan and
Trust/Custodial Account, and any Employer Plan and Trust/Custodial Account as
embodied in the Prototype document and accompanying Adoption Agreement, shall be
governed by Federal law to the extent applicable and to the extent not
applicable by the laws of the State/Commonwealth in which the principal office
of the Sponsor is located.
EXHIBIT 23
----------
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accounts, we hereby consent to the incorporation
by reference in this registration statement of our report dated February 21,
1997 included in Asahi/America, Inc.'s Annual Report on Form 10-K for the year
ended December 31, 1996 and to all references to our Firm included in this
registration statement.
/s/ ARTHUR ANDERSEN LLP
-----------------------------
Boston, Massachusetts
- ---------------------
January 20, 1998
Exhibit 24
----------
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints each of Leslie B. Lewis and Kozo Terada,
individually, his attorneys-in-fact, with the power of substitution, for him in
any and all capacities, to sign any and all amendments to this Registration
Statement (including post-effective amendments), and to file the same, with
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact, or their respective substitutes, may do or cause to be
done by virtue hereof.
Signature Title Date
--------- ----- ----
/s/ Leslie B. Lewis President and Director January 22, 1998
- ---------------------------- (Principal Executive Officer)
Leslie B. Lewis
Director
- ----------------------------
Kazuyuki Sato
Director
- ----------------------------
Masashi Uesugi
/s/ Nannette S. Lewis Director January 22, 1998
- ----------------------------
Nannette S. Lewis
/s/ Jeffrey C. Bloomberg Director January 22, 1998
- ----------------------------
Jeffrey C. Bloomberg
/s/ Samuel J. Gerson Director January 22, 1998
- ----------------------------
Samuel J. Gerson
/s/ Kozo Terada Vice President and Treasurer January 22, 1998
- ---------------------------- (Principal Financial and
Kozo Terada Accounting Officer)
/s/ John E. Lawrence Plan Administrator January 22, 1998
- ----------------------------
John E. Lawrence
