<PAGE>
As filed with the Securities and Exchange Commission on July 30, 1996
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
MHM SERVICES, INC.
--------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 52-1223048
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7601 Lewinsville Road, Suite 200, McLean, VA 22102
------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Mental Health Management, Inc. Employees' Savings Plan
------------------------------------------------------
(Full title of the plan)
Michael S. Pinkert, President
MHM Services, Inc.
7601 Lewinsville Road, Suite 200, McLean, VA 22102
(703) 749-4600
--------------------------------------
(Name, address, and telephone number,
including area code, of agent for service)
copy to:
Michael P. Gallagher, Esq. Steven J. Feder, Esq.
Ballard Spahr Andrews & Ingersoll Ballard Spahr Andrews & Ingersoll
1735 Market St., 51st Floor 1735 Market St., 51st Floor
Philadelphia, PA 19103 Philadelphia, PA 19103
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
Calculation of Registration Fee
- -------------------------------------------------------------------------------------------------------
Proposed maximum Proposed Maximum Amount of
Title of securities Amount to be registered offering price aggregate Registration
to be registered (1) per share (2) offering price fee
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
par value $.01 750,000 shares $(2) $1,101,562.50 $379.85
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 416(a) under the Securities Act of 1933, as amended, this
Registration Statement shall be deemed to cover an indeterminate number of
additional shares of Common Stock issuable in the event the number of
outstanding shares of MHM Services, Inc. is increased by split-up,
reclassification, stock dividend, or the like. In addition, pursuant to
Rule 416(c) under the Securities Act of 1933, as amended, this Registration
Statement also covers an indeterminate amount of interests to be offered
and sold pursuant to the employee benefit plan described herein.
(2) In accordance with Securities and Exchange Commission Rule 457(h)(1), the
price shown is based upon the average of the high and low price per share
of Common Stock on July 23, 1996, as reported by the American Stock
Exchange.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
- ----------------------------------------------------
The documents containing the information required to be included in
Part I of this Registration Statement will be provided to all persons who are
eligible to participate in the Mental Health Management, Inc. Employees'
Savings Plan (the "Plan").
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
--------------------------------------------------
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE
---------------------------------------
MHM Services, Inc. (the "Company") (File No. 1-12238) hereby
incorporates by reference into this Registration Statement the following
documents:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1995.
(b) The Company's Current Report on Form 8-K filed November 9, 1995.
(c) The Company's first amendment to its Annual Report, filed on Form
10-K/A on January 29, 1996.
(d) The Company's Quarterly Report on Form 10-Q for the quarter ended
December 31, 1995.
(e) The Company's Current Report on Form 8-K filed February 12, 1996.
(f) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996.
(g) The Company's Current Report on Form 8-K filed April 17, 1996 (as
amended by the Company's Current Report on Form 8-K/A filed June 19,
1996).
(h) The Company's Current Report on Form 8-K filed May 31, 1996.
(i) The Company's Current Report on Form 8-K filed June 17, 1996 (as
amended by the Company's Current Report on Form 8-K/A filed June 25,
1996).
(j) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-B, filed with the
Securities and Exchange Commission by the Company on January 27,
1995 (by which the Company succeeded to a Registration Statement on
Form 10, filed on August 19, 1993).
All reports and other documents subsequently filed by the Company or the
Plan pursuant to Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange
Act of 1934, as amended, prior to the filing of a post-effective amendment which
indicates that all securities offered hereby have been sold or which deregisters
all securities then remaining unsold, shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of filing of such
document.
II-1
<PAGE>
Item 4. DESCRIPTION OF SECURITIES
-------------------------
Not applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
--------------------------------------
Not applicable.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
-----------------------------------------
The Company has adopted the provisions of Section 102(b)(7) of the
Delaware General Corporation Act (the "Delaware Act") which eliminate or limit
the personal liability of a director to the Company or its stockholders for
monetary damages for breach of fiduciary duty under certain circumstances.
Furthermore, under Section 145 of the Delaware Act, the Company shall indemnify
each of its directors and officers against expenses (including reasonable costs,
disbursements, and counsel fees) in connection with any proceeding involving
such person by reason of having been an officer or director, to the extent such
person acted in good faith and in a manner reasonably believed to be in, or not
opposed to, the best interest of the Company, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe such person's conduct
was unlawful. The determination of whether indemnification is proper under the
circumstances, unless made by a court, shall be made by a majority of a quorum
of disinterested members of the Company's Board of Directors, independent legal
counsel, or the stockholders of the Company. The Company has purchased
directors' and officers' liability insurance in an amount totalling $5,000,000,
subject to certain deductibles.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted to directors, officers, and
controlling persons of the Company pursuant to the foregoing 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 of 1933, as amended, and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer, or controlling person of the Company 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 Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933, as amended, and will be
governed by the final adjudication of such issue.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED
-----------------------------------
Not applicable.
II-2
<PAGE>
Item 8. EXHIBITS
--------
4.1 Specimen copy of Common Stock Certificate (incorporated by reference
to the Company's Registration Statement on Form 8-B, filed by the
Company on January 27, 1995 (by which the Company succeeded to a
Registration Statement on Form 10, filed on August 19, 1993))
4.2 The Company's Restated Certificate of Incorporation (incorporated by
reference to the Company's Annual Report on Form 10-K for the fiscal
year ended September 30, 1995, as amended)
4.3 The Company's Amended Bylaws (incorporated by reference to the
Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1995, as amended)
5.1 Internal Revenue Service Determination Letter dated August 2, 1993
5.2 Opinion of Ballard Spahr Andrews & Ingersoll
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Ballard Spahr Andrews & Ingersoll (included in
Exhibit 5.2)
24 Power of Attorney (included on signature page)
99.1 Mental Health Management, Inc. Employees' Savings Plan
99.2 Mental Health Management, Inc. Employees' Savings Plan Adoption
Agreement
Item 9. UNDERTAKINGS
------------
The Company 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, as amended;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this 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 this Registration Statement.
Notwithstanding the foregoing, any increase or decrease in the
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and
any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with
the Securities and Exchange Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
Registration Statement.
II-3
<PAGE>
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in this
Registration Statement or any material change in such information in
this Registration Statement;
Provided, however, that paragraphs (1)(i) and (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 Securities and Exchange Commission by the
Company pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934, as amended, that are incorporated by reference
in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from any registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, as amended, each filing of the
Company's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934, as amended, that is incorporated by reference
in this Registration Statement shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing 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 of 1933, as amended, and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer or controlling person of the Company 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
Company will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933, as amended, and will be governed by the
final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
-----------
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Company 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 County of Fairfax, Commonwealth of Virginia, on the date
below:
Dated: July 29, 1996 MHM Services, Inc.
By: /s/ Michael S. Pinkert
------------------------------
Michael S. Pinkert, President
and Chief Executive Officer
By: /s/ Carolyn Zimmerman
------------------------------
Carolyn Zimmerman
Vice President and
Chief Financial Officer
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Michael S. Pinkert, as true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign the
Registration Statement and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto each said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ Michael S. Pinkert President, Chief Executive Officer, July 29, 1996
- ------------------------- and Director
Michael S. Pinkert (Principal Executive Officer)
/s/ Carolyn Zimmerman Vice President and July 29, 1996
- ------------------------- Chief Financial Officer
Carolyn Zimmerman (Principal Accounting Officer)
/s/ Abraham D. Gosman Director July 29, 1996
- -------------------------
Abraham D. Gosman
/s/ Kenneth A. Kessler Director July 29, 1996
- -------------------------
Kenneth A. Kessler, M.D.
/s/ H. Scott Miller Director July 29, 1996
- -------------------------
H. Scott Miller
/s/ Michael F. Sandler Director July 29, 1996
- -------------------------
Michael F. Sandler
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Trustees (or other 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 County of Fairfax,
Commonwealth of Virginia, on the date below:
Dated: July 29, 1996 Mental Health Management, Inc. Employees'
Savings Plan
By: /s/ Carolyn Zimmerman
---------------------------------
Carolyn Zimmerman, Vice President
and Chief Financial Officer
(Plan Administrator)
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ----------- ----
4.1 Specimen copy of Common Stock
Certificate (incorporated by
reference to the Company's
Registration Statement on Form
8-B, filed by the Company on
January 27, 1995 (by which the
Company succeeded to a
Registration Statement on Form
10, filed on August 19, 1993))
4.2 The Company's Restated
Certificate of Incorporation
(incorporated by reference to
the Company's Annual Report on
Form 10-K for the fiscal year
ended September 30, 1995, as
amended)
4.3 The Company's Amended Bylaws
(incorporated by reference to
the Company's Annual Report on
Form 10-K for the fiscal year
ended September 30, 1995, as
amended)
5.1 Internal Revenue Service
Determination Letter dated
August 2, 1993
5.2 Opinion of Ballard Spahr
Andrews & Ingersoll
23.1 Consent of Deloitte & Touche
LLP
23.2 Consent of Ballard Spahr Andrews
& Ingersoll (included in Exhibit 5.2)
24 Power of Attorney (included on
signature page)
99.1 Mental Health Management, Inc.
Employees' Savings Plan
99.2 Mental Health Management, Inc.
Employees' Savings Plan
Adoption Agreement
II-7
<PAGE>
EXHIBIT 5.1
INTERNAL REVENUE SERVICE Department of the Treasury
Plan Description: Prototype Standardized
Profit Sharing Plan
with CODA Washington, DC 20224
FFN: 50270630005-003 Case: 9307143
EIN: 13-1912900 Person to Contact: Mr. Dua
BPD: 05 Plan: 003
Letter Serial No: D261031a Telephone Number: (202) 622-8380
Refer Reply to: E:EP:Q:3
SMITH BARNEY SHEARSON INC
RETIREMENT PLAN SERVICES, 37TH FLOOR Date: 08/02/93
388 GREENWICH STREET
NEW YORK, NY 10013
Dear Applicant:
In our opinion, the form of the plan identified above is acceptable under
section 401 of the Internal Revenue Code for use by employers for the benefit of
their employees. This opinion relates only to the acceptability of the form of
the plan under the Internal Revenue Code. It is not an opinion of the effect of
other Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this plan.
You are also required to send a copy of the approved form of the plan, any
approved amendments and related documents to each Key District Director of
Internal Revenue Service in whose jurisdiction there are adopting employers.
Our opinion on the acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under Code section
401(a). An employer who adopts this plan will be considered to have a plan
qualified under Code section 401(a) provided all the terms of the plan are
followed, and the eligibility requirements and contribution or benefit
provisions are not more favorable for highly compensated employees than for
other employees. Except as stated below, the Key District Director will not
issue a determination letter with regard to this plan.
Our opinion does not apply to the form of the plan for purposes of Code section
401(a)(16) if: (1) an employer ever maintained another qualified plan for one
or more employees who are covered by this plan, other than a specified paired
plan within the meaning of section 7 of Rev. Proc. 89-9, 1989-1 C.B. 780; or (2)
after December 31, 1985, the employer maintains a welfare benefit fund defined
in Code section 419(e), which provides postretirement medical benefits allocated
to separate accounts for key employees as defined in Code section 419A(d)(3).
An employer that has adopted a standardized plan may not rely on this opinion
letter with respect to: (1) whether any amendment or series of amendments to
the plan satisfies the nondiscrimination requirements of section
1.401(a)(4)-5(a) of the regulations, except with respect to plan amendments
granting past service that meet the safe harbor described in section
1.401(a)(4)-5(a)(5) and are not part of a pattern of amendments that
significantly discriminates in favor of highly compensated employees; or (2)
whether the plan satisfies the effective availability requirement of section
1.401(a)(4)-4(c) of the regulations with respect to any benefit, right or
feature.
<PAGE>
An employer that has adopted a standardized plan as an amendment to a plan other
than a standardized plan may not rely on this opinion letter with respect to
whether a benefit, right or other feature that is prospectively eliminated
satisfies the current availability requirements of section 1.401(a)-4 of the
regulations.
The employer may request a determination (1) as to whether the plan, considered
with all related qualified plans and, if appropriate, welfare benefit funds,
satisfies the requirements of Code section 401(a)(16) as to limitations on
benefits and contributions in Code section 415; (2) regarding the
nondiscriminatory effect of grants of past service; and (3) with respect to
whether a prospectively eliminated benefit, right or feature satisfies the
current availability requirements.
Our opinion does not apply to the form of the plan for purposes of section
401(a) of the Code unless the terms of the plan, as adopted or amended, that
pertain to the requirements of sections 401(a)(4), 401(a)(5), 401(a)(17),
401(l), 410(b) and 414(s) of the Code, as amended by the Tax Reform Act of 1986
or subsequent legislation, (a) are made effective retroactively to the first day
of the first plan year beginning after December 31, 1988 (or such other date on
which these requirements first became effective with respect to this plan); or
(b) are made effective no later than the first day on which the employer is no
longer entitled, under regulations, to rely on a reasonable, good faith
interpretation of these requirements, and the prior provisions of the plan
constitute such an interpretation.
Because you submitted this plan for approval after March 31, 1991, the
continued, interim and extended reliance provisions of sections 13 and 17.03 of
Rev. Proc. 89-9, 1989-1 C.B. 780, are not applicable.
If you, the sponsoring organization, have any questions concerning the IRS
processing of this case, please call the above telephone number. This number is
only for use of the sponsoring organization. Individual participants and/or
adopting employers with questions concerning the plan should contact the
sponsoring organization. The plan's adoption agreement must include the
sponsoring organization's address and telephone number for inquiries by adopting
employers.
If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial
Number and File Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record. Please notify us if you
modify or discontinue sponsorship of this plan.
Sincerely yours,
/s/ John Swien
Chief, Employee Plans Qualifications Branch
<PAGE>
EXHIBIT 5.2
July 29, 1996
MHM Services, Inc.
7601 Lewinsville Road, Suite 200
McLean, VA 22101
Re: MHM Services, Inc. Employees' Savings Plan
Registration Statement on Form S-8
------------------------------------------
Gentlemen:
We have acted as counsel to MHM Services, Inc. (the "Company") in
connection with the registration under the Securities Act of 1933, as
amended, of 750,000 shares of common stock of the Company, par value $.01 per
share (the "Shares") and an indeterminate amount of interests in the Mental
Health Management, Inc. Employees' Savings Plan (the "Plan"), all to be
offered to participants of the Plan in accordance with the terms thereof.
In rendering our opinion, we have reviewed the Plan and such
certificates, documents, corporate records, and other instruments as in our
judgement are necessary or appropriate to enable us to render the opinion
expressed below. In giving this opinion, we are assuming the authenticity of
all instruments presented to us as originals, the conformity with the
originals of all instruments presented to us as copies and the genuineness of
all signatures.
Based upon the foregoing, we are of the opinion that the 750,000
Shares, when issued in accordance with the terms of the Plan, will be legally
issued, fully paid, and non-assessable.
We consent to the filing of this opinion as Exhibit 5.2 to the
Registration Statement.
Very truly yours,
/s/ Ballard Spahr Andrews & Ingersoll
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement,
relating to the Mental Health Management, Inc. Employees' Savings Plan on Form
S-8, of our report dated January 12, 1996 (which report expresses an unqualified
opinion and includes an explanatory paragraph relating to the Company's ability
to continue as a going concern), on our audit of the consolidated financial
statements and financial statement schedule appearing in the Annual Report on
Form 10-K of MHM Services, Inc. (formerly "Mental Health Management, Inc.") for
the year ended September 30, 1995.
DELOITTE & TOUCHE LLP
Washington, D.C.
July 19, 1996
<PAGE>
EXHIBIT 23.2
CONSENT OF COUNSEL
The consent of Ballard Spahr Andrews & Ingersoll is contained in
its opinion filed as Exhibit 5.2 to the Registration Statement.
<PAGE>
EXHIBIT 99.1
Smith Barney Shearson
Prototype Defined Contribution
Plan Document #05
and
Trust Agreement
Adopted by
MENTAL HEALTH MANAGEMENT, INC.
as the
MENTAL HEALTH MANAGEMENT, INC. EMPLOYEES' SAVINGS PLAN
<PAGE>
TABLE OF CONTENTS
Page
----
SECTION 1. INTRODUCTION AND CONSTRUCTION. . . . . . . . . . . . . . . . . . 1
1.1 INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . 1
1.2 CONTROLLING LAWS . . . . . . . . . . . . . . . . . . . . 1
1.3 CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . 1
1.4 TRA 86 AMENDMENTS. . . . . . . . . . . . . . . . . . . . 2
SECTION 2. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1 ACCOUNT. . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 ACTIVE PARTICIPANT . . . . . . . . . . . . . . . . . . . 2
2.3 ADOPTION AGREEMENT . . . . . . . . . . . . . . . . . . . 4
2.4 AFFILIATE. . . . . . . . . . . . . . . . . . . . . . . . 4
2.5 ALLOCATION DATE. . . . . . . . . . . . . . . . . . . . . 5
2.6 AVERAGE ANNUAL COMPENSATION. . . . . . . . . . . . . . . 5
2.7 BENEFICIARY. . . . . . . . . . . . . . . . . . . . . . . 5
2.8 BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.9 CODE . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.10 COMPENSATION . . . . . . . . . . . . . . . . . . . . . . 5
2.11 COVERED COMPENSATION . . . . . . . . . . . . . . . . . . 8
2.12 DISABILITY OR DISABLED . . . . . . . . . . . . . . . . . 8
2.13 EARLY RETIREMENT AGE . . . . . . . . . . . . . . . . . . 9
2.14 EARNED INCOME. . . . . . . . . . . . . . . . . . . . . . 9
2.15 EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . . . 9
2.16 ELECTION FORM. . . . . . . . . . . . . . . . . . . . . . 9
2.17 ELECTIVE DEFERRAL. . . . . . . . . . . . . . . . . . . . 9
2.18 ELECTIVE DEFERRAL ACCOUNT. . . . . . . . . . . . . . . . 9
2.19 ELIGIBLE EMPLOYEE. . . . . . . . . . . . . . . . . . . . 10
2.20 EMPLOYEE . . . . . . . . . . . . . . . . . . . . . . . . 10
2.21 EMPLOYEE ACCOUNT . . . . . . . . . . . . . . . . . . . . 10
2.22 EMPLOYEE CONTRIBUTION. . . . . . . . . . . . . . . . . . 11
2.23 EMPLOYER . . . . . . . . . . . . . . . . . . . . . . . . 11
2.24 EMPLOYER ACCOUNT . . . . . . . . . . . . . . . . . . . . 11
2.25 EMPLOYER CONTRIBUTION. . . . . . . . . . . . . . . . . . 11
2.26 ENTRY DATE . . . . . . . . . . . . . . . . . . . . . . . 11
2.27 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.28 FAMILY MEMBERS . . . . . . . . . . . . . . . . . . . . . 11
2.29 FINAL COMPLIANCE DATE. . . . . . . . . . . . . . . . . . 11
2.30 FORFEITURE . . . . . . . . . . . . . . . . . . . . . . . 11
2.31 401(k) PLAN. . . . . . . . . . . . . . . . . . . . . . . 12
2.32 FUND . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.33 FUND EARNINGS. . . . . . . . . . . . . . . . . . . . . . 12
2.34 HIGHLY COMPENSATED EMPLOYEE. . . . . . . . . . . . . . . 12
2.35 INTEGRATION LEVEL. . . . . . . . . . . . . . . . . . . . 12
2.36 LEASED EMPLOYEE. . . . . . . . . . . . . . . . . . . . . 12
2.37 MATCHING ACCOUNT . . . . . . . . . . . . . . . . . . . . 12
i
<PAGE>
2.38 MATCHING CONTRIBUTION. . . . . . . . . . . . . . . . . . 13
2.39 MAXIMUM DISPARITY RATE . . . . . . . . . . . . . . . . . 13
2.40 MONEY PURCHASE PENSION PLAN. . . . . . . . . . . . . . . 13
2.41 NET PROFITS. . . . . . . . . . . . . . . . . . . . . . . 13
2.42 NONHIGHLY COMPENSATED EMPLOYEE . . . . . . . . . . . . . 14
2.43 NORMAL RETIREMENT AGE. . . . . . . . . . . . . . . . . . 14
2.44 OWNER-EMPLOYEE . . . . . . . . . . . . . . . . . . . . . 15
2.45 PAIRED PLANS . . . . . . . . . . . . . . . . . . . . . . 15
2.46 PARTICIPANT. . . . . . . . . . . . . . . . . . . . . . . 15
2.47 PARTICIPATING AFFILIATE. . . . . . . . . . . . . . . . . 15
2.48 PARTICIPATION REQUIREMENT. . . . . . . . . . . . . . . . 15
2.49 PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.50 PLAN ADMINISTRATOR . . . . . . . . . . . . . . . . . . . 15
2.51 PLAN YEAR. . . . . . . . . . . . . . . . . . . . . . . . 16
2.52 PRE-EXISTING PLAN. . . . . . . . . . . . . . . . . . . . 16
2.53 PROFIT SHARING PLAN. . . . . . . . . . . . . . . . . . . 16
2.54 PROTOTYPE SPONSOR. . . . . . . . . . . . . . . . . . . . 16
2.55 QUALIFIED MATCHING CONTRIBUTION. . . . . . . . . . . . . 16
2.56 QUALIFIED MATCHING ACCOUNT . . . . . . . . . . . . . . . 16
2.57 QUALIFIED NONELECTIVE CONTRIBUTION . . . . . . . . . . . 16
2.58 QUALIFIED NONELECTIVE ACCOUNT. . . . . . . . . . . . . . 16
2.59 ROLLOVER ACCOUNT . . . . . . . . . . . . . . . . . . . . 16
2.60 ROLLOVER CONTRIBUTION. . . . . . . . . . . . . . . . . . 16
2.61 SELF-EMPLOYED INDIVIDUAL . . . . . . . . . . . . . . . . 17
2.62 SPOUSE . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.63 TARGET BENEFIT PENSION PLAN. . . . . . . . . . . . . . . 17
2.64 TAXABLE WAGE BASE. . . . . . . . . . . . . . . . . . . . 17
2.65 TRA 86 . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.66 TRUST AGREEMENT. . . . . . . . . . . . . . . . . . . . . 17
2.67 TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . 17
2.68 VALUATION DATE . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3. SERVICE DEFINITIONS AND RULES. . . . . . . . . . . . . . . . . . 18
3.1 HOUR OF SERVICE METHOD (STANDARD OPTION) . . . . . . . . 18
3.2 ELAPSED TIME METHOD (ALTERNATIVE). . . . . . . . . . . . 22
3.3 SERVICE BEFORE EFFECTIVE DATE. . . . . . . . . . . . . . 23
3.4 SERVICE WITH PREDECESSOR EMPLOYER. . . . . . . . . . . . 23
3.5 LEASED EMPLOYEES . . . . . . . . . . . . . . . . . . . . 24
3.6 SERVICE WITH AFFILIATES. . . . . . . . . . . . . . . . . 24
3.7 SPECIAL BREAK IN SERVICE RULES . . . . . . . . . . . . . 24
3.8 SERVICE EXCLUSIONS FOR VESTING PURPOSES. . . . . . . . . 26
ii
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SECTION 4. PARTICIPATION. . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.1 GENERAL RULE . . . . . . . . . . . . . . . . . . . . . . 26
4.2 SPECIAL RULES. . . . . . . . . . . . . . . . . . . . . . 27
4.3 PARTICIPATION INFORMATION. . . . . . . . . . . . . . . . 27
SECTION 5. CONTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.1 PROFIT SHARING PLAN. . . . . . . . . . . . . . . . . . . 27
5.2 MONEY PURCHASE PENSION PLAN. . . . . . . . . . . . . . . 28
5.3 401(k) PLAN. . . . . . . . . . . . . . . . . . . . . . . 28
5.4 TARGET BENEFIT PENSION PLAN. . . . . . . . . . . . . . . 32
5.5 ROLLOVER CONTRIBUTIONS . . . . . . . . . . . . . . . . . 39
5.6 NO EMPLOYEE OR MATCHING CONTRIBUTIONS. . . . . . . . . . 39
5.7 NO DEDUCTIBLE VOLUNTARY EMPLOYEE CONTRIBUTIONS . . . . . 39
5.8 GENERAL RULES APPLICABLE TO ALL CONTRIBUTIONS. . . . . . 39
SECTION 6. ALLOCATIONS TO ACCOUNTS. . . . . . . . . . . . . . . . . . . . . 41
6.1 ESTABLISHMENT AND MAINTENANCE OF ACCOUNTS. . . . . . . . 41
6.2 ALLOCATION OF FUND EARNINGS. . . . . . . . . . . . . . . 41
6.3 ALLOCATION OF CONTRIBUTIONS AND FORFEITURES. . . . . . . 42
6.4 ALLOCATION REPORT. . . . . . . . . . . . . . . . . . . . 46
6.5 ALLOCATION CORRECTIONS . . . . . . . . . . . . . . . . . 46
SECTION 7. STATUTORY LIMITATIONS ON ALLOCATIONS . . . . . . . . . . . . . . 46
7.1 EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . . . 46
7.2 LIMITATIONS ON ANNUAL ADDITIONS UNDER CODE
SECTION 415. . . . . . . . . . . . . . . . . . . . . . 46
7.3 INDIVIDUAL LIMITATION ON ELECTIVE DEFERRALS
UNDER CODE SECTION 402(g). . . . . . . . . . . . . . . 54
7.4 LIMITATIONS ON ELECTIVE DEFERRALS FOR HIGHLY
COMPENSATED EMPLOYEES UNDER CODE SECTION 401(k). . . . 56
7.5 LIMITATIONS ON EMPLOYEE CONTRIBUTIONS AND MATCHING
CONTRIBUTIONS UNDER CODE SECTION 401(m). . . . . . . . 61
SECTION 8. VESTING AND FORFEITURES. . . . . . . . . . . . . . . . . . . . . 66
8.1 DETERMINATION OF NONFORFEITABLE PERCENTAGE . . . . . . . 66
8.2 FORFEITURE AND SPECIAL REEMPLOYMENT RULES. . . . . . . . 67
SECTION 9. ACCOUNT DISTRIBUTION - GENERAL RULES . . . . . . . . . . . . . . 70
9.1 AFTER SEPARATION FROM SERVICE. . . . . . . . . . . . . . 70
9.2 BEFORE SEPARATION FROM SERVICE . . . . . . . . . . . . . 72
9.3 CONSENT. . . . . . . . . . . . . . . . . . . . . . . . . 76
9.4 FORM OF DISTRIBUTION . . . . . . . . . . . . . . . . . . 77
9.5 MINIMUM DISTRIBUTIONS. . . . . . . . . . . . . . . . . . 77
9.6 MISSING PERSON . . . . . . . . . . . . . . . . . . . . . 77
9.7 NO ESTOPPEL OF PLAN. . . . . . . . . . . . . . . . . . . 77
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9.8 ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . 78
SECTION 10. BENEFIT PAYMENT FORMS - JOINT AND SURVIVOR ANNUITY
REQUIREMENTS. . . . . . . . . . . . . . . . . . . . . . . . . 78
10.1 APPLICATION AND SPECIAL DEFINITIONS. . . . . . . . . . . 78
10.2 DISTRIBUTION TO PARTICIPANT. . . . . . . . . . . . . . . 81
10.3 DISTRIBUTION TO SURVIVING SPOUSE . . . . . . . . . . . . 81
10.4 NOTICE REQUIREMENTS. . . . . . . . . . . . . . . . . . . 81
10.5 SAFE HARBOR RULES. . . . . . . . . . . . . . . . . . . . 82
10.6 OPTIONAL FORMS . . . . . . . . . . . . . . . . . . . . . 83
10.7 ANNUITY CONTRACTS. . . . . . . . . . . . . . . . . . . . 85
10.8 TRANSITIONAL RULES . . . . . . . . . . . . . . . . . . . 85
10.9 DIRECT ROLLOVERS . . . . . . . . . . . . . . . . . . . . 86
SECTION 11. MINIMUM DISTRIBUTION REQUIREMENTS. . . . . . . . . . . . . . . . 87
11.1 GENERAL. . . . . . . . . . . . . . . . . . . . . . . . . 87
11.2 SPECIAL DEFINITIONS. . . . . . . . . . . . . . . . . . . 87
11.3 REQUIRED BEGINNING DATE. . . . . . . . . . . . . . . . . 89
11.4 LIMITS ON DISTRIBUTION PERIODS . . . . . . . . . . . . . 90
11.5 DETERMINATION OF AMOUNT TO BE DISTRIBUTED EACH
YEAR . . . . . . . . . . . . . . . . . . . . . . . . . 90
11.6 DEATH DISTRIBUTION PROVISIONS. . . . . . . . . . . . . . 91
11.7 SPECIAL PRE-TEFRA DISTRIBUTION ELECTION. . . . . . . . . 92
SECTION 12. TOP-HEAVY PLAN RULES . . . . . . . . . . . . . . . . . . . . . . 93
12.1 APPLICATION. . . . . . . . . . . . . . . . . . . . . . . 93
12.2 SPECIAL DEFINITIONS. . . . . . . . . . . . . . . . . . . 94
12.3 MINIMUM ALLOCATION . . . . . . . . . . . . . . . . . . . 97
12.4 VESTING SCHEDULE . . . . . . . . . . . . . . . . . . . . 100
12.5 401(k) PLAN. . . . . . . . . . . . . . . . . . . . . . . 100
SECTION 13. INSURANCE, INDIVIDUALLY DIRECTED INVESTMENTS AND
PARTICIPANT LOANS . . . . . . . . . . . . . . . . . . . . . . 101
13.1 INSURANCE CONTRACTS. . . . . . . . . . . . . . . . . . . 101
13.2 INDIVIDUALLY DIRECTED INVESTMENTS. . . . . . . . . . . . 103
13.3 PARTICIPANT LOANS. . . . . . . . . . . . . . . . . . . . 104
SECTION 14. ADOPTION, AMENDMENT, WITHDRAWAL AND CONVERSION, MERGER,
ASSET TRANSFERS AND TERMINATION . . . . . . . . . . . . . . . 108
14.1 ADOPTION . . . . . . . . . . . . . . . . . . . . . . . . 108
14.2 AMENDMENT. . . . . . . . . . . . . . . . . . . . . . . . 109
14.3 CERTAIN AMENDMENT RESTRICTIONS . . . . . . . . . . . . . 109
14.4 WITHDRAWAL AS A PROTOTYPE AND CONVERSION TO
INDIVIDUALLY DESIGNED PLAN . . . . . . . . . . . . . . 110
14.5 MERGER, CONSOLIDATION OR ASSET TRANSFERS . . . . . . . . 111
iv
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14.6 TERMINATION. . . . . . . . . . . . . . . . . . . . . . . 112
SECTION 15. ADMINISTRATION. . . . . . . . . . . . . . . . . . . . . . . . . 112
15.1 NAMED FIDUCIARIES. . . . . . . . . . . . . . . . . . . . 112
15.2 ADMINISTRATIVE POWERS AND DUTIES . . . . . . . . . . . . 113
15.3 AGENT FOR SERVICE OF PROCESS . . . . . . . . . . . . . . 113
15.4 REPORTING AND DISCLOSURE . . . . . . . . . . . . . . . . 113
SECTION 16. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 114
16.1 SPENDTHRIFT CLAUSE AND QUALIFIED DOMESTIC RELATIONS
ORDERS . . . . . . . . . . . . . . . . . . . . . . . . 114
16.2 BENEFITS SUPPORTED ONLY BY TRUST FUND. . . . . . . . . . 114
16.3 DISCRIMINATION . . . . . . . . . . . . . . . . . . . . . 114
16.4 CLAIMS . . . . . . . . . . . . . . . . . . . . . . . . . 114
16.5 NONREVERSION . . . . . . . . . . . . . . . . . . . . . . 115
16.6 EXCLUSIVE BENEFIT. . . . . . . . . . . . . . . . . . . . 115
16.7 EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . 115
16.8 SECTION 16 OF SECURITIES EXCHANGE ACT OF 1934. . . . . . 116
16.9 ARBITRATION. . . . . . . . . . . . . . . . . . . . . . . 116
PART II. SMITH BARNEY SHEARSON
PROTOTYPE DEFINED CONTRIBUTION PLAN TRUST AGREEMENT. . . . . . . . 118
SECTION 1. INTRODUCTION AND CONSTRUCTION. . . . . . . . . . . . . . . . . . 118
1.1 INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . 118
1.2 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . 118
1.3 CONTROLLING LAWS . . . . . . . . . . . . . . . . . . . . 118
1.4 CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . 118
SECTION 2. GENERAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
SECTION 3. CONTRIBUTIONS AND TRUST FUND . . . . . . . . . . . . . . . . . . 119
SECTION 4. MANAGEMENT OF TRUST FUND . . . . . . . . . . . . . . . . . . . . 120
4.1 PLAN ADMINISTRATOR . . . . . . . . . . . . . . . . . . . 120
4.2 TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . 120
4.3 INVESTMENT MANAGER . . . . . . . . . . . . . . . . . . . 123
4.4 PLAN ADMINISTRATOR OR EMPLOYER INVESTMENT
DIRECTIONS . . . . . . . . . . . . . . . . . . . . . . 124
4.5 PARTICIPANT INVESTMENT DIRECTIONS. . . . . . . . . . . . 124
4.6 CUSTODIAN. . . . . . . . . . . . . . . . . . . . . . . . 125
4.7 MULTIPLE TRUSTEES. . . . . . . . . . . . . . . . . . . . 125
4.8 COMMUNICATIONS . . . . . . . . . . . . . . . . . . . . . 126
4.9 PROTOTYPE SPONSOR. . . . . . . . . . . . . . . . . . . . 126
4.10 VOTING OF PROXIES. . . . . . . . . . . . . . . . . . . . 126
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SECTION 5. BENEFIT PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . 127
SECTION 6. VALUATION AND ACCOUNTING BY TRUSTEE. . . . . . . . . . . . . . . 128
SECTION 7. EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
SECTION 8. RESIGNATION OR REMOVAL OF TRUSTEE. . . . . . . . . . . . . . . . 129
SECTION 9. MERGERS, CONSOLIDATIONS AND ASSET TRANSFERS. . . . . . . . . . . 129
SECTION 10. SINGLE TRUST - SEPARATE FUNDS . . . . . . . . . . . . . . . . . 130
SECTION 11. NAMED FIDUCIARIES AND ADMINISTRATION. . . . . . . . . . . . . . 130
SECTION 12. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 131
12.1 SPENDTHRIFT CLAUSE AND QUALIFIED DOMESTIC RELATIONS
ORDERS . . . . . . . . . . . . . . . . . . . . . . . . 131
12.2 BENEFITS SUPPORTED ONLY BY TRUST FUND. . . . . . . . . . 131
12.3 CLAIMS . . . . . . . . . . . . . . . . . . . . . . . . . 131
12.4 NONREVERSION . . . . . . . . . . . . . . . . . . . . . . 132
12.5 EXCLUSIVE BENEFIT. . . . . . . . . . . . . . . . . . . . 132
vi
<PAGE>
SMITH BARNEY SHEARSON
PLAN DOCUMENT
SECTION 1. INTRODUCTION AND CONSTRUCTION
1.1 INTRODUCTION. This Smith Barney Shearson Prototype Defined Contribution
Plan is established and maintained as a prototype plan by the Prototype Sponsor
for its customers and the customers of its subsidiaries and affiliates. This
Plan shall be adopted as a prototype plan only with the consent of the Prototype
Sponsor or one of its subsidiaries or affiliates as set forth in the related
Adoption Agreements and shall be maintained as a prototype plan only in
accordance with the terms and conditions set forth in this Plan.
1.2 CONTROLLING LAWS. To the extent such laws are not preempted by federal
law, this Plan and the related Adoption Agreement and Trust Agreement shall be
construed and interpreted under the laws of the state specified in the Adoption
Agreement; provided, if Smith Barney Shearson Trust Company has been appointed
as Trustee, the Trust Agreement shall be governed by and construed in accordance
with the laws of the State of [Delaware].
1.3 CONSTRUCTION. The headings and subheadings in this Plan have been inserted
for convenience of reference only and are to be ignored in the construction of
its provisions. Wherever appropriate, the masculine shall be read as the
feminine, and the plural as the singular, and the singular as the plural.
References in this Plan to a section (Section) shall be to a section in this
Plan unless otherwise indicated. References in this Plan to a section of the
Code, ERISA or any other federal law shall also refer to the regulations issued
under such section. Unless an alternative option is specified in the Adoption
Agreement, the option identified as the "Standard Option" will control.
The Employer intends that this Plan and the related Trust Agreement and Adoption
Agreement which are part of this Plan satisfy the requirements for tax exempt
status under Code Section 401(a), Code Section 501(a) and related Code sections
and that the provisions of this Plan, the Trust Agreement and the Adoption
Agreement be construed and interpreted in accordance with the requirements of
the Code and the regulations under the Code.
Further, except as expressly stated otherwise, no provision of this Plan or the
related Trust Agreement or Adoption Agreement is intended to nor shall grant any
rights to Participants or Beneficiaries or any interest in the Fund in addition
to those minimum rights or interests required to be provided under ERISA and the
Code and the regulations under ERISA and the Code.
1
<PAGE>
Nothing in this Plan or the related Trust Agreement or Adoption Agreement shall
be construed to prohibit the adoption or the maintenance of this Plan or the
Trust Agreement as an individually designed plan or as a trust agreement which
is part of an individually designed plan, but in such event, the Employer may
not rely on the opinion letter issued to the Prototype Sponsor and the Prototype
Sponsor shall have absolutely no responsibility for such individually designed
plan.
Finally, in the event of any conflict between the terms of this Plan and the
terms of the Trust Agreement or the Adoption Agreement, the terms of this Plan
shall control.
1.4 TRA 86 AMENDMENTS. If this Plan is adopted as an amendment of a
Pre-Existing Plan in order to satisfy the requirements of TRA 86, the
retroactive effective date of any provision required under TRA 36 is intended
solely to comply with the Code and is not intended to grant any, substantive
rights under ERISA to the extent that such provision is different than the
Pre-Existing Plan as in effect between the applicable effective date of TRA 86
and the effective dates in the final regulations ("transition years").
SECTION 2. DEFINITIONS
The capitalized terms in this Plan and the related Adoption Agreement and Trust
Agreement shall have the meanings shown opposite those terms in this Section 2
and in Section 3 for purposes of this Plan.
2.1 ACCOUNT - means the bookkeeping account maintained under this Plan to show
as of any Valuation Date a Participant's interest in this Fund attributable to
the contributions made by or on behalf of such Participant and the Fund Earnings
on such contributions, and an Account shall cease to exist when exhausted
through forfeiture or distributions made in accordance with this Plan.
2.2 ACTIVE PARTICIPANT - means for purposes of eligibility to receive an
allocation of the Employer Contribution or Forfeitures for each Plan Year, each
Participant who is an Eligible Employee at any time during the Plan Year and who
satisfies the following conditions:
2.2(a) STANDARD OPTION.
2.2(a)(1) STANDARDIZED PLANS. If this Plan is adopted as a
standardized Plan, such Participant (i) is employed as an Eligible Employee (or
on an authorized leave of absence as an Eligible Employee) on the last day of
such Plan Year, (ii) terminated employment as an Eligible Employee during such
Plan Year on or after Normal Retirement Age or Early Retirement Age or by reason
of death or Disability, or (iii) such Participant is not employed on the last
day of such Plan Year but completed more than 800 Hours of Service during such
Plan Year (or the equivalent period described in Section 2.2(d) if the "Elapsed
Time" method is specified
2
<PAGE>
in the Adoption Agreement. Notwithstanding the foregoing, if the "Hours of
Service" method is specified in the Adoption Agreement for a Plan Year beginning
before the final Compliance Date, Section 2.2(a)(1)(iii) shall not apply and a
Participant who satisfies the requirements of Section 2.2(a)(1)(i) shall not be
eligible to receive an allocation of the Employer Contribution or Forfeitures
for such Plan Year unless such Participant also is credited with at least 1,000
Hours of Service in such Plan Year.
2.2(a)(2) NONSTANDARDIZED PLANS. If this Plan is adopted as a
Nonstandardized Plan, such Participant (i) is employed as an Eligible Employee
(or on an authorized leave of absence as an Eligible Employee) on the last day
of such Plan Year and, in the "Hours of Service" method is specified in the
Adoption Agreement, is credited with at least 1,000 Hours of Service in such
Plan Year, or (ii) terminated employment as an Eligible Employee during such
Plan Year on or after Normal Retirement Age or Early Retirement Age or by reason
of death or Disability.
2.2(b) ALTERNATIVE. Such Participant satisfies the alternative conditions
specified in the Adoption Agreement.
2.2(c) MINIMUM COVERAGE REQUIREMENT. If this Plan is adopted as a
nonstandardized Plan and fails to satisfy the minimum coverage and participation
requirements of Code Section 401(a)(26) and Section 410(b) for any Plan Year
beginning on and after the Final Compliance Date as a result of the application
of the minimum hours or last day employment requirements in this Section 2.2,
such minimum participation and coverage requirements shall be retroactively
amended by executing a new Adoption Agreement within the applicable retroactive
correction period in the regulations or, if no such amendment is made, shall be
satisfied as follows:
2.2(c)(1) If the Plan utilizes both the minimum hours and last day
employment requirements
(i) STEP 1 - Each Participant who completes at least 1,000
Hours of Service without regard to whether such Participant is employed on the
last day of the Plan Year shall be deemed to be an Active Participant for such
Plan Year.
(ii) STEP 2 - If the minimum participation and coverage
requirements are not satisfied after the application of Step 1, then each
Participant who completes more than 500 Hours of Service and who is employed on
the last day of the Plan Year shall be deemed to be an Active Participant for
such Plan Year.
(iii) STEP 3 - If the minimum participation and coverage
requirements are not satisfied after the application of Step 1 and Step 2, then
each Participant who is not employed on the last day of the Plan Year but who
completed more than 500 Hours of Service in such Plan Year also shall be deemed
to be an Active Participant.
3
<PAGE>
(iv) STEP 4 - If the minimum participation and coverage
requirements are not satisfied after the application of Steps 1 through 3, then
each Participant who satisfies the last day of employment requirement also shall
be deemed to be an Active Participant without regard to the number of Hours of
Service actually completed by such Participant during such Plan Year.
2.2(c)(2) If the Plan utilizes only the last day employment
requirement, each Participant who is not employed on the last day of the Plan
Year but who completed more than 500 Hours of Service in such Plan Year (or the
equivalent period described in Section 2.2(d) if the "Elapsed Time" method is
specified in the Adoption Agreement) also shall be deemed to be an Active
Participant.
2.2(c)(3) If the Plan utilizes only the minimum hours requirement:
(i) STEP 1 - Each Participant who completes more than 500
Hours of Service without regard to whether such Participant is employed on the
last day of the Plan Year shall be deemed to be an Above Participant.
(ii) STEP 2 - If the minimum participation and coverage
requirements are not satisfied after the application of Step 1, then each
Participant who is employed on the last day of the Plan Year shall be deemed to
be an Active Participant.
2.2(d) SPECIAL ELAPSED TIME EQUIVALENCY RULE. If the "Elapsed Time"
method is specified in the Adoption Agreement, a Participant shall be treated as
completing more than 500 Hours of Service during such Plan Year for purposes of
this Section 2.2 if, during such Plan Year, the Participant completes more than
(A) STANDARD OPTION - 91 consecutive calendar days of employment, or
(B) ALTERNATIVE - if so specified in the Adoption Agreement, 3
consecutive calendar months of employment.
2.3 ADOPTION AGREEMENT - means the agreement by which the Employer adopted this
Plan.
2.4 AFFILIATE - means at any time (a) any parent, subsidiary or sister
corporation which at such time is a member of a controlled group of corporations
(as defined in Code Section 414(b)) with the Employer, (b) any trade or
business, whether or not incorporated, which at such time is considered to be
under common control (as defined in Code Section 414(c)) with the Employer, (c)
any person or organization which at such time is a member of an affiliated
service group (as defined in Code Section 414(m)) with the Employer, and (d) any
other organization which at such time is required to be aggregated with the
Employer under Code Section 414(o).
4
<PAGE>
2.5 ALLOCATION DATE - means for a 401(k) Plan the respective dates specified in
the Adoption Agreement as of which Matching Contributions, Qualified Matching
Contributions and Qualified Nonelective Contributions, as applicable, are made.
2.6 AVERAGE ANNUAL COMPENSATION - means for a Target Benefit Plan the average
of an Employee's Compensation for the consecutive Plan Year period specified in
the Adoption Agreement during which such average is the highest, or if such
Employee's entire period of participation in the Plan is less than the number of
Plan Years so specified, the Employee's Average Annual Compensation shall be
determined by averaging (on an annual basis) the Employee's Compensation for his
or her actual period of participation. For purposes of determining a
Participant's Average Annual for any Plan Year beginning after the Final
Compliance Date, the Annual Compensation taken into account for any prior Plan
Year shall not exceed (a) for Plan Years beginning before January 1, 1990,
$200,000 and (b) for Plan Years beginning on or after January 1, 1990, the
annual Compensation limit described in Section 2.10(e) in effect for such prior
Plan Year.
2.7 BENEFICIARY - means for each Participant the person or persons so
designated in writing by the Participant on a property completed Election Form.
However, if no such designation is made, if no person so designated survives the
Participant, or if after checking the last known mailing address the whereabouts
of the person so designated is unknown and no death benefit claim is submitted
to the Plan Administrator by such person within one year after the Participant's
date of death, the Beneficiary shall be deemed to be (a) the Participant's
surviving Spouse, or if there is no surviving Spouse, (b) the personal
representative of such Participant in his or her fiduciary capacity, if any has
qualified within one year from the date of the Participant's death, or if no
personal representative has so qualified or remains so qualified, (c) any person
determined by a court of competent jurisdiction to be the Participant's
Beneficiary for this purpose. If a Beneficiary is not identified and located
within 3 years of the Participant's date of death, Section 9.6, MISSING PERSON,
shall control the distribution of the Participant's Account.
2.8 BOARD - means (a) for any Employer which is a corporation, the Board of
Directors of such Employer and (b) for any Employer which is not a corporation,
the person or persons duly authorized to act on behalf of such Employer.
2.9 CODE - means the Internal Revenue Code, as amended.
2.10 COMPENSATION.
2.10(a) COMMON LAW EMPLOYEES. For an Employee who is not a Self-Employed
Individual or a Leased Employee, the term "Compensation" means for any
determination period.
2.10(a)(1) STANDARD OPTION - the total compensation which is actually
paid (in cash or other benefits) by the Employer or any Participating Affiliate
to such Employee for such
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period and which is reportable to the Internal Revenue Service on Form W-2 as
wages within the meaning of Code Section 3401(a) and all other payments of
compensation to such Employee from the Employer or Participating Affiliate (in
the course of its trade or business) for which a written statement is required
to be furnished to the Employee under Code Section 6041(d), Code Section
6051(a)(3) and Code Section 6052. Such Compensation shall 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)), or
2.10(a)(2) ALTERNATIVE - if so specified in the Adoption Agreement,
the total compensation which is actually paid (in cash or other benefits) by the
Employer or any Participating Affiliate to such Employee for such period and
which is
(i) considered 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 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)),
(ii) considered as compensation within the meaning of Code
Section 415(c)(3) as described in Section 7.2(a)(2)(ii)(B),
(iii) for a nonintegrated nonstandardized Plan (other than a
Target Benefit Pension Plan), compensation identified on the payroll records of
the Employer or Participating Affiliate as regular or base salary or wages
(whether hourly, weekly monthly, annually or otherwise) and, if so specified in
the Adoption Agreement, overtime, bonuses, commissions, and/or other specific
compensation, or
(iv) as described in Section 2.10(a)(1), Section 2.10(a)(2)(i),
or Section 2.10(a)(2)(ii), reduced by all of the following items (even if
includable in gross income): reimbursements or other expense allowances, fringe
benefits (cash and noncash), moving expenses, deferred compensation and welfare
benefits, or
2.10(b) SELF EMPLOYED. For an Employee who is a Self-Employed Individual,
the term "Compensation" means the Employee's Earned Income for such period.
2.10(c) LEASED EMPLOYEES. All compensation paid by a leasing organization
to a Leased Employee for personal services rendered to the Employer or a
Participating Affiliate for such period shall be treated as Compensation to the
extent required under Code Section 414(n).
2.10(d) DETERMINATION PERIOD. For purposes of this definition and unless
otherwise specified in this Plan or the Adoption Agreement, the phrase
"determination period" means
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2.10(d)(1) STANDARD OPTION - the Plan Year or
2.10(d)(2) ALTERNATIVE - the calendar year or other 12 consecutive
month period ending with or within the Plan Year specified in the Adoption
Agreement.
2.10(e) LIMITATION. No more than $200,000 (as adjusted in accordance with
Code Section 401(a)(17) shall be taken into account under this Plan for any
determination period beginning on or after January 1, 1989. The annual
Compensation limit under this Section 2.10(e) for any determination period shall
be adjusted in accordance with Code Section 401(a)(17) for the calendar year in
which such determination period begins.
If the determination period is less than 12 months as a result of a short Plan
Year, the annual Compensation limit under this Section 2.10(e) shall equal the
annual limit for such determination period multiplied by a fraction, the
numerator of which is the number of full months in such period and the
denominator of which is 12.
For purposes of this Compensation limit, the family aggregation rules of Code
Section 414(q)(6) shall be applied by aggregating only the Participant's spouse
and lineal descendants who have not reached age 19 before the end of such
determination period. If the limit is exceeded for any determination period as
a result of the application of the family aggregation rule, the limit shall be
prorated among the individuals affected by this limit in proportion to each such
individual's Compensation for such determination period as determined under this
Section 2.10 before the application of this Section 2.10(e). However, if this
Plan is adopted as an integrated plan, the preceding sentence shall not apply
for purposes of determining the portion of Compensation which does not exceed
the Integration Level.
2.10(f) SALARY REDUCTIONS. Any amount which is contributed by the
Employer or any Participating Affiliate pursuant to a salary reduction agreement
which is not currently includable in an Employee's gross income under Code
Section 125, Section 402(e)(3), Section 402(h) or Section 403(b)
2.10(f)(1) STANDARD OPTION - shall be included in an Employee's
Compensation, or
2.10(f)(2) ALTERNATIVE - if so specified in the Adoption Agreement,
shall not be included in an Employee's Compensation.
2.10(g) SPECIAL RULES.
2.10(g)(1) If so specified in the Adoption Agreement, an Employee's
Compensation shall not include Compensation which is paid to the Employee for
periods ending before the Entry Date on which the Employee becomes a
Participant.
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2.10(g)(2) If this Plan is adopted as an amendment and restatement of
a Pre-Existing Plan, this definition shall be effective for Plan Years beginning
on or after January 1, 1989 unless a later effective date is specified in the
Adoption Agreement; provided, the $200,000 limitation of Section 2.10(e) shall
not be effective later than the first day of the first Plan Year beginning on or
after January 1, 1989 and any such later effective date specified in the
Adoption Agreement for the other provisions of this Section 2.10 shall not be
later than the Final Compliance Date.
2.10(g)(3) If so specified in the Adoption Agreement for a
nonstandardized Plan, a Participant's Compensation in excess of the dollar
amount or percentage specified in the Adoption Agreement shall not be taken into
account for purposes of determining the amount or allocation of any
contributions made by or on behalf of such Participant under this Plan.
2.10(g)(4) If so specified in the Adoption Agreement for a
nonstandardized Plan, the Compensation of a Participant who is a Highly
Compensated Employee shall not include the specific types of Compensation
specified in the Adoption Agreement.
2.11 COVERED COMPENSATION - means for each Participant for each Plan Year
beginning on or after January 1, 1989, the average (without indexing) of the
Taxable Wage Bases in effect under the Social Security Act for each calendar
year during the 35-year period ending with the last day of the calendar year in
which the Participant attains (or will attain) Social Security Retirement Age,
determined by assuming that the Taxable Wage Base for all future years shall be
the same as the Taxable Wage Base in effect as of the beginning of such Plan
Year.
A Participant's Covered Compensation for a Plan Year beginning before the
35-year period ending with the last day of the calendar year in which the
Participant attains Social Security Retirement Age is the Taxable Wage Base in
effect as of the beginning of the Plan Year. A Participant's Covered
Compensation for a Plan Year beginning after such 35-year period is the
Participant's Covered Compensation for the Plan Year during which the 35-year
period ends.
However, a Participant's Covered Compensation shall automatically be adopted
each Plan Year and any increase in a Participant's Covered Compensation shall
not result in a decrease in the Participant's accrued benefit which would be
impermissible under Code Section 411(b)(1)(G) or Section 411(c)(6).
For purposes of this Section 2.11, Social Security Retirement Age means (a) age
65 in the case of a Participant who was born before January 1, 1938, (b) age 66
for a Participant who was born after December 31, 1937, but before January 1,
1955, and (c) age 67 for a Participant who was born after December 31, 1954.
2.12 DISABILITY OR DISABLED - means an individual's inability to engage in any
substantially gainful activity at the individual's customary level of
compensation or competence and
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responsibility as an Employee due to any medically determinable physical or
mental impairment or impairments which may be expected to result in death or to
last for a continuous period of at least 12 months as determined by a qualified
physician or other medical practitioner selected by the Plan Administrator for
this purpose in accordance with uniform and nondiscriminatory standards.
2.13 EARLY RETIREMENT AGE - means
2.13(a) STANDARD OPTION - the Normal Retirement Age or
2.13(b) ALTERNATIVE - the alterative Early Retirement Age specified in the
Adoption Agreement.
2.14 EARNED INCOME - means for any Self-Employed Individual for any period the
net earnings from self-employment (as defined in Code 1402(a)) for such period
from the Employer or any Participating Affiliate for which the personal services
of such Employee are a material income-producing factor, where such net earnings
are (a) determined without regard to items not included in gross income for
purposes of Chapter 1 of the Code and the deductions properly attributable to
such items, (b) determined with regard to the deduction allowed to the
Self-Employed Individual under Code Section 164(f) for taxable years beginning
after December 31, 1989, and (c) reduced by the contributions made on behalf of
such Employee to any qualified plan (as described in Code Section 401(a))
maintained by the Employer or any Participating Affiliate to the extent such
contributions are deductible under Code Section 404.
2.15 EFFECTIVE DATE - means the effective date of the Employer's adoption or
amendment of this Plan as specified in the Adoption Agreement. However, if this
Plan is adopted as an amendment and restatement of a Pre-Existing Plan, certain
provisions of this Plan may be effective retroactive to Plan Years beginning
before such Effective Date or may be effective at a date later than such
Effective Date as specified in this Plan document or in the Adoption Agreement.
2.16 ELECTION FORM - means the form or forms provided by or acceptable to the
Plan Administrator for making the elections and designations called for under
this Plan and no such form shall become effective unless properly completed and
timely delivered to the Plan Administrator in accordance with the terms of this
Plan and such rules as the Plan Administrator shall adopt from time to time.
2.17 ELECTIVE DEFERRAL - means the nonforfeitable contribution made to the Fund
by the Employer or a Participating Affiliate on a Participant's behalf under
Section 5.3(f).
2.18 ELECTIVE DEFERRAL ACCOUNT - means the subaccount established as part of a
Participant's Account to record the Participant's Elective Deferrals and the
Fund Earnings attributable to such contributions.
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2.19 ELIGIBLE EMPLOYEE - means
2.19(a) STANDARD OPTION - each Employee of the Employer or a Participating
Affiliate other than
2.19(a)(1) an Employee who is included in a unit of employees covered
by a collective bargaining agreement between the Employer and employee
representatives which agreement does not provide for participation in its Plan
if retirement benefits under this Plan were the subject of good faith
bargaining; provided, however, that
(i) the term "employee representatives" shall not include an
organization more than half of whose members are employees who are owners,
officers or executives of the Employer, and
(ii) an Employee shall not be treated as covered under
collective bargaining agreement if more than 2% of the Employees covered under
such agreement are "professionals" (as defined in Section 1.410(b)-9(g) of the
Federal Income Tax Regulations); and
2.19(a)(2) an Employee who is a nonresident alien (within the meaning
of Code Section 7701(b)(1)(B) and who receives no earned income (within the
meaning of Code Section 911(d)(2)) from the Employer or any Participating
Affiliate which constitutes income from sources within the United States (within
the meaning of Code Section 861(a)(3)).
2.19(b) ALTERNATIVE - If this Plan is adopted as a nonstandardized Plan,
the Employer may specify in the Adoption Agreement a category of Employees who
shall not be treated as Eligible Employees under this Plan. However, the Plan
must satisfy on a continuing basis the nondiscrimination rules under Code
Section 401(a)(4), the coverage rules under Code Section 410(b), and the minimum
participation rules under Code Section 401(a)(26).
2.20 EMPLOYEE - means each person who is treated as an employee of the Employer
or an Affiliate which is required to be aggregated with the Employer under Code
Section 414(b), Section 414(c), Section 414(m) or Section 414(o) including (a) a
common-law employee (whether full-time, part-time, regular, temporary or
otherwise), (b) a Self-Employed Individual, (c) an Owner-Employee, (d) a Leased
Employee and (e) each person who is deemed to be an employee under Code Section
414(o).
2.21 EMPLOYEE ACCOUNT - means the subaccount established as part of a
Participant's Account to record (1) the Participant's Employee Contributions
under this Plan, (2) the Participant's nondeductible employee contributions, if
any, under a Pre-Existing Plan of a plan which is merged into this Plan under
Section 14.5, and (3) the Fund Earnings attributable to such contributions. If
a separate account was not maintained for contributions under other plans as
described in clause (2) above, the account balance attributable to such
contributions shall be the Participant's total account balance under such other
plans multiplied by a fraction, the numerator of which
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is the total amount of the Participant's nondeductible employee contributions
(less withdrawals) and the denominator of which is the sum of the numerator and
the total contributions made by the Employer on behalf of the Participant (less
withdrawals). For purposes of calculating such fraction, contributed amounts
used to provide ancillary benefits shall be treated as contributions and only
amounts actually distributed to the Participant (but not amounts which reflect
the cost of any death benefits) shall be treated as withdrawals.
2.22 EMPLOYEE CONTRIBUTION - means any contribution made by or on behalf of a
Participant to the Fund under Section 5.3(g) that is includable in the
Participant's gross income for the year in which made.
2.23 EMPLOYER - means the sole proprietorship, partnership or corporation
identified as the Employer in the Adoption Agreement and any successor in
interest to such organization.
2.24 EMPLOYER ACCOUNT - means the subaccount established as part of a
Participant's Account to record the Participant's share of the Employer
Contributions and Forfeitures and the Fund Earnings attributable to such
amounts.
2.25 EMPLOYER CONTRIBUTION - means the contributions made by the Employer and
by any Participating Affiliate to the Fund under Section 5.1, Section 5.2,
Section 5.3(e) or Section 5.4.
2.26 ENTRY DATE - means
2.26(a) STANDARD OPTION - the first day of each Plan Year and the first
day of the 7th month in each Plan Year or
2.26(b) ALTERNATIVE - the alternative Entry Date specified in the Adoption
Agreement.
2.27 ERISA - means the Employee Retirement Income Security Act of 1974, as
amended.
2.28 FAMILY MEMBERS - means for any year, with respect to a Highly Compensated
Employee who is a 5% owner or who is in the group consisting of the 10 Highly
Compensated Employees paid the greatest Compensation during such year, (a) such
individual's spouse, (b) such individual's lineal ascendant and lineal
descendants and (c) the spouses of such lineal ascendant or descendants as
determined under Code Section 414(q)(6).
2.29 FINAL COMPLIANCE DATE - means the first day of the first Plan Year
beginning after December 31, 1993 or such other applicable effective date (of
the final nondiscrimination and other TRA 86 regulations.)
2.30 FORFEITURE - means the portion of an Account of a Participant which is
deducted from such Account in accordance with terms of this Plan.
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2.31 401(k) PLAN - means this Plan as adopted by entering into the Standardized
401(k) Plan Adoption Agreement or the Nonstandardized 401(k) Plan Adoption
Agreement.
2.32 FUND - means the trust fund created in accordance with this Plan and the
Trust Agreement which is a part of this Plan.
2.33 FUND EARNINGS - means for each period ending on a Valuation Date the
investment gains and losses (whether realized or unrealized), income and
expenses (other than expenses allocable directly to a specific Account) of the
Fund for such period as determined based on the fair market value of the assets
of the Fund of such Valuation Date.
2.34 HIGHLY COMPENSATED EMPLOYEE - means a highly compensated employee within
the meaning of Code Section 414(q) (as described in Section 7.4(a)(5)).
2.35 INTEGRATION LEVEL - means the amount of Compensation specified in the
Adoption Agreement at or below which the rate of contributions or benefits
(expressed as a percentage of such Compensation) provided under the Plan is less
than the rate of contributions or benefits (expressed as a percentage of such
Compensation) provided under the Plan with respect to Compensation above such
amount. The Integration Level for any Plan Year shall not exceed the Taxable
Wage Base in effect at the beginning of such Plan Year.
2.36 LEASED EMPLOYEE - means for each Plan Year beginning on or after
January 1, 1987, each person who is not a common-law employee of the Employer or
an Affiliate, but who, pursuant to an agreement between the Employer or an
Affiliate ("recipient") and any other person ("leasing organization"), has
performed services for the recipient or the recipient and a related person (as
determined in accordance with Code Section 414(n)(6)) on a substantially
full-time basis for a period of at least one year, which services are of a type
historically performed by employees in the business field of the recipient or
related person for whom such services are being performed. However, subject to
the rules set forth in the regulations under Code Section 414(n), such person
shall not be treated as a Leased Employee if (a) the total number of such
persons does not constitute more than 20% of the total nonhighly compensated
work force of the recipient and (b) such person is covered by a money purchase
pension plan which is maintained by the leasing organization and which provides
for (1) a nonintegrated employer contribution rate of at least 10% of
compensation (as defined in Code Section 415(c)(3) but including amounts
contributed pursuant to a salary reduction agreement which are excludable from
the individual's gross income under Code Section 125, Section 402(e)(3), Section
402(h) or Section 403(b)), (2) immediate participation and (3) full and
immediate vesting.
2.37 MATCHING ACCOUNT - means the subaccount established as part of a
Participant's Account to record the Matching Contributions made on the
Participant's behalf under this Plan and the Fund Earnings attributable to such
contributions.
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2.38 MATCHING CONTRIBUTION - means the contribution made by the Employer and by
any Participating Affiliate to the Fund under Section 5.3(b) by reason of a
Participant's Elective Deferrals or Employee Contributions.
2.39 MAXIMUM DISPARITY RATE - means
2.39(a) STANDARD OPTION - if the Integration Level is equal to the Taxable
Wage Base, the greater of 5.7% or the portion of the tax rate under Code Section
3111(a) which is attributable to old-age insurance as in effect on the first day
of such Plan Year, and
2.39(b) ALTERNATIVE - if the Integration Level is less than the Taxable
Wage Base, the applicable percentage determined in accordance with the following
table, where
X = the greater of $10,000 or 20% of the Taxable Wage Base
TWB = the Taxable Wage Base
IF THE INTEGRATION LEVEL
Is More Than But Not More Than Applicable Percentage
$0 X 5.7%
X 80% of TWB 4.3%
80% of TWB 100% of TWB 5.4%
or, if the portion of the tax rate under Code Section 3111(a) which is
attributable to old-age insurance as in effect on the first day of such Plan
Year is greater than 5.7%, the applicable percentage in the table above shall be
such portion of the tax rate, proportionately reduced in the same manner as the
5.7% amount in the table above.
2.40 MONEY PURCHASE PENSION PLAN - means this Plan as adopted by entering into
the Standardized Money Purchase Pension Plan Adoption Agreement or the
Nonstandardized Money Purchase Pension Plan Adoption Agreement.
2.41 NET PROFITS -
2.41(a) STANDARD OPTION. The term "Net Profits" means
2.41(a)(1) for an Employer or Participating Affiliate other than a
non-profit entity, the current or accumulated earnings for the taxable year for
which the Employer contribution is made as determined before federal and state
taxes and contributions to this Plan or any other qualified plan, or
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2.41(a)(2) for an Employer or Participating Affiliate which is
non-profit entity, the current or accumulated excess of receipts over
disbursements for the fiscal year for which the Employer contribution is made.
2.41(b) ALTERNATIVE. The Employer may specify in an alternative
definition of Net Profits in the Adoption Agreement.
2.42 NONHIGHLY COMPENSATED EMPLOYEE - means each Employee who is neither a
Highly Compensated Employee nor a Family Member.
2.43 NORMAL RETIREMENT AGE -
2.43(a) GENERAL. The term "Normal Retirement Age" means
2.43(a)(1) STANDARD OPTION - age 65 or
2.43(a)(2) ALTERNATIVE - the alternative Normal Retirement Age
specified in the Adoption Agreement.
2.43(b) SPECIAL RULES.
2.43(b)(1) MANDATORY RETIREMENT AGE. If, consistent with applicable
age discrimination law, the Employer enforces a mandatory retirement age, the
Normal Retirement Age shall be the earlier of (1) the date the Participant
reaches such mandatory retirement age or (2) the date the Participant reaches
age 65 or, if an alternative is specified in the Adoption Agreement, the date
the Participant reaches Normal Retirement Age as specified in the Adoption
Agreement.
2.43(b)(2) TRANSITIONAL RULE. If
(i) the normal retirement age under the terms of the
Pre-Existing Plan as in effect for Plan Years beginning before January 1, 1988
was determined with reference to an anniversary of the date on which a
Participant commenced participation in such plan ("participation commencement
date"),
(ii) such anniversary was later than the 5th anniversary of the
participation commencement date,
(iii) the Normal Retirement Age specified in the Adoption
Agreement is determined with reference to an anniversary of the participation
commencement date, and
(iv) this transitional rule is specified in the Adoption
Agreement,
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then the anniversary for any Participant whose participation commencement date
occurred in a Plan Year beginning before January 1, 1988 shall be the earlier of
(A) the anniversary under the terms of the Pre-Existing Plan, or (B) the 5th
anniversary of the first day of the first Plan Year beginning after December 31,
1987.
2.44 OWNER-EMPLOYEE - means each Self-Employed Individual who is (a) a sole
proprietor of the Employer or a Participating Affiliate or (b) a partner owning
more than 10% of either the capital or profits interest of the Employer or a
Participating Affiliate.
2.45 PAIRED PLANS - means (a) a combination of two or more standardized defined
contribution Plans under this Smith Barney Shearson Prototype Defined
Contribution Plan (Plan Document #05) or (b) a combination of one or more such
standardized defined contribution Plans with a standardized defined benefit plan
under the Smith Barney Shearson Prototype Defined Benefit Plan (Plan Document
#06). However, such Plans shall be treated as Paired Plans only if (1) such
Paired Plans have the same Plan Year, and (2) no more than one such plan is
integrated with social security.
2.46 PARTICIPANT - means (a) an Eligible Employee who has satisfied the
Participation Requirement specified in the Adoption Agreement and has become a
Participant in accordance with Section 4, and (b) any individual for whom an
Account continues to exist under the Plan.
2.47 PARTICIPATING AFFILIATE - means (a) if this Plan is a standardized Plan,
each Affiliate of the Employer or (b) if this Plan is a nonstandardized Plan,
each Affiliate which participates in this Plan, as set forth in Section 14.1(c)
of the Plan; provided, an Affiliate automatically shall cease to be a
Participating Affiliate if, and at the time, it ceases to be an Affiliate as set
forth in Section 14.6(a).
2.48 PARTICIPATION REQUIREMENT - means
2.48(a) STANDARD OPTION - attainment of age 21 and completion of a waiting
period equal to one Year of Service or
2.48(b) ALTERNATIVE - the alternative minimum age and waiting period
requirement specified in the Adoption Agreement.
2.49 PLAN - means this Smith Barney Shearson Prototype Defined Contribution
Plan, as adopted by the Employer in the form of a Profit Sharing Plan, a 401(k)
Plan, a Money Purchase Plan or a Target Benefit Pension Plan, and as amended
from time to time in accordance with Section 14.2
2.50 PLAN ADMINISTRATOR - means
2.50(a) STANDARD OPTION - the Employer or
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2.50(b) ALTERNATIVE - the person or persons designated in writing by the
Employer as the Plan Administrator for this Plan.
2.51 PLAN YEAR - means the 12 consecutive month period or the 52/53 week period
which ends on the date specified in the Adoption Agreement; provided, however,
if this Plan is adopted as a new Plan, the first Plan Year shall be the period
beginning on the Effective Date and ending on the date specified in Adoption
Agreement.
2.52 PRE-EXISTING PLAN - means the Employer's prior defined contribution plan
and the related trust agreement or other funding arrangement which is described
in the Adoption Agreement and which is amended and restated in the form of this
Plan.
2.53 PROFIT SHARING PLAN - means this Plan as adopted by entering into the
Standardized Profit Sharing Plan Adoption Agreement or the Nonstandardized
Profit Sharing Plan Adoption Agreement.
2.54 PROTOTYPE SPONSOR - means Smith Barney, Harris Upham & Co., Incorporated
and any successor to such corporation.
2.55 QUALIFIED MATCHING CONTRIBUTION - means the contribution made by the
Employer and by any Participating Affiliate to the Fund under Section 5.3(c) by
reason of a Participant's Elective Deferrals or Employee Contributions.
2.56 QUALIFIED MATCHING ACCOUNT - means the subaccount established as part of a
Participant's Account to record the Qualified Matching Contributions made on the
Participant's behalf under this Plan and the Fund Earnings attributable to such
contributions.
2.57 QUALIFIED NONELECTIVE CONTRIBUTION - means the contribution (other than
Matching Contributions, Qualified Matching Contributions and Employer
Contributions) made by the Employer and by an Participating Affiliate to the
Fund under Section 5.3(d).
2.58 QUALIFIED NONELECTIVE ACCOUNT - means the subaccount established as part
of a Participant's Account to record the Qualified Nonelective Contributions
made on the Participant's behalf under this Plan and the Fund Earnings
attributable to such contributions.
2.59 ROLLOVER ACCOUNT - means the subaccount established as part of a
Participant's Account to record the Participant's Rollover Contributions and
the Fund Earnings attributable to such contributions.
2.60 ROLLOVER CONTRIBUTION - means (a) a contribution of an amount, or more
than one amount, which satisfies the applicable rollover requirements under Code
Section 402 or Code Section 408 made by a Participant to the Fund under Section
5.5 and (b) effective January 1, 1993, an eligible rollover
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distribution which is directly transferred to the Fund on or after such date
pursuant to a Participant's election under Code Section 401(a)(31).
2.61 SELF-EMPLOYED INDIVIDUAL - means an individual who is self-employed and
who receives Earned Income from the Employer or a Participating Affiliate or who
would have received such Earned Income but for the fact that the Employer or the
Participating Affiliate did not have Net Profits.
2.62 SPOUSE - means the person who is lawfully married to the Participant on
the date the Participant's Account becomes payable under this Plan or, if a
Participant dies before such date, the person who was lawfully married to such
Participant on the Participant's date of death. However, a former spouse shall
be treated as the Spouse and a current spouse shall not be treated as the Spouse
to the extent provided under a qualified domestic relations order as described
in Section 414(p).
2.63 TARGET BENEFIT PENSION PLAN - means this Plan as adopted by entering into
the Standardized Target Benefit Pension Plan Adoption Agreement or the
Nonstandardized Target Benefit Pension Plan Adoption Agreement.
2.64 TAXABLE WAGE BASE - means for any Plan Year the contribution and benefit
base in effect under Section 230 of the Social Security Act at the beginning of
such Plan Year.
2.65 TRA 86 - means the Tax Reform Act of 1986 ("Act") and any other
legislation and related regulations, notices or other guidance for which
amendments are required to be made at the same time as amendments for such Act.
2.66 TRUST AGREEMENT - means the trust agreement between the Employer and the
Trustee which is established as part of this Plan and which is set forth in the
attached Smith Barney Shearson Prototype Defined Contribution Plan Trust
Agreement or, if so specified in the Adoption Agreement for a 401(k) Plan, the
Smith Barney Shearson Prototype Defined Contribution Plan Alternative Trust
Agreement for 401(k) Plans.
2.67 TRUSTEE - means the person or persons specified in the Adoption Agreement
who serve as the trustee for the Fund under the Trust Agreement and any
successor to such person or persons.
2.68 VALUATION DATE - means (a) the last day of each Plan Year and (b) each
other date, if any, agreed upon in advance by the Employer and the Trustee,
provided the selection of such other date does not result in discrimination in
favor of Highly Compensated Employees which would be prohibited under Code
Section 401(a).
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SECTION 3. SERVICE DEFINITIONS AND RULES
The definitions and rules in this Section 3 shall apply for purposes of
measuring an Employee's service (a) for participation purposes - to determine
when the Employee has satisfied the Participation Requirement and (b) for
vesting purposes - to determine the nonforfeitable interest in his or her
Account.
3.1 HOUR OF SERVICE METHOD (STANDARD OPTION). The definitions and rules in
this Section 3.1 shall apply unless the "Elapsed Time" method of crediting
service is specified in the Adoption Agreement.
3.1(a) BREAK IN SERVICE.
3.1(a)(1) GENERAL. The term "Break in Service" means each
Computation Period during which an Employee fails to complete more than 500
Hours of Service.
3.1(a)(2) MATERNITY/PATERNITY RULE. Solely for purposes of
determining whether an Employee has a Break in Service, an Employee who is
absent from work for "maternity or paternity reasons" and who timely furnishes
proof of the reason for such absence (in accordance with such nondiscriminatory
rules as may be established by the Plan Administrator and communicated to
Employees) shall be credited with each Hour of Service for which the Employee
would otherwise have been credited but for such absence, or if such Hours of
Service cannot be determined, with 8 Hours of Service for each day of such
absence. However, the total number of Hours of Service so credited to such
Employee shall not exceed 501 Hours of Service. The Hours of Service so
credited shall be credited to the Computation Period in which such absence
begins if such credit is necessary to prevent a Break in Service in such
Computation Period or, if such credit is necessary, in the immediately following
Computation Period. For purposes of this special maternity/paternity rule, an
absence for "maternity or paternity reasons" means an absence (i) by reason of
the pregnancy of the Employee, (ii) by reason of the birth of a child of the
Employee, (iii) by reason of the placement of a child with the Employee in
connection with the adoption of such child by such Employee, or (iv) for
purposes of caring for such child for a period beginning immediately following
such birth or placement.
3.1(b) COMPUTATION PERIOD.
3.1(b)(1) GENERAL. The term "Computation Period" for purposes of
determining Years of Service and Breaks in Service means the applicable period
described in this Section 3.1(b).
3.1(b)(2) VESTING. The relevant Computation Period for measuring
Years of Service and Breaks in Service for vesting purposes shall be
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(i) STANDARD OPTION - the Plan Year or
(ii) ALTERNATIVE - if so specified in the Adoption Agreement,
(A) the 12 consecutive month period which begins on the date the Employee first
performs an Hour of Service ("hire date") and ends on the date immediately
preceding the first anniversary of such hire date and (B) each 12 consecutive
month period thereafter beginning on each anniversary of such hire date and
ending on the date immediately preceding the next anniversary of such date.
3.1(b)(3) PARTICIPATION. The initial Computation Period for
measuring Years of Service and Breaks in Service for participation purposes
shall be the 12 consecutive month period which begins on the first day an
Employee first performs an Hour of Service as an Employee ("hire date") and ends
on the date immediately preceding the first anniversary of such date. Each
subsequent Computation Period shall be
(i) STANDARD OPTION - each Plan Year, beginning with the Plan
Year which begins before the first anniversary of the Employee's hire date
(regardless of whether the Employee is credited with 1,000 Hours of Service in
the Employee's initial Computation Period). An Employee shall be credited with
two Years of Service for participation purposes if the Employee completes 1,000
or more Hours of Service in both the initial Computation Period and the first
Plan Year which begins within such initial Computation Period, or
(ii) ALTERNATIVE - if so specified in the Adoption Agreement,
the 12 consecutive month period which begins on each anniversary of an
Employee's hire date and ends on the date immediately preceding the next
anniversary of the Employee's hire date.
For participation purposes, an Employee shall be credited with a Year of Service
(A) STANDARD OPTION - on the last day of the Computation Period
in which the Employee is credited with at least 1,000 Hours of Service (or such
lesser number of hours specified in the Adoption Agreement) or
(B) ALTERNATIVE - on the first date on which the Employee is
credited with at least 1,000 Hours of Service (or such lesser number of hours
specified in the Adoption Agreement) provided the Employee completes such
specified number of Hours of Service in one Computation Period.
Notwithstanding the foregoing, if the Participation Requirement includes a
partial Year of Service, no minimum number of Hours of Service shall be required
for such partial year and an Employee shall be credited with such partial Year
of Service on the date on which such partial period of service is completed.
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3.1(b)(4) CHANGE IN COMPUTATION PERIOD. If an amendment results in a
change in the Computation Period, the first Computation Period established under
such amendment shall begin before the last day of the preceding Computation
Period and each Employee to whom both such Computation Period and each Employee
to whom such Computation Periods apply and who completes 1,000 or more Hours of
Service in such Computation Periods shall be credited with one Year of Service
for each such Computation Period.
3.1(c) HOUR OF SERVICE
3.1(c)(1) GENERAL. The term "Hour of Service" means
(i) each hour for which an Employee is paid, or entitled to
payment, by the Employer or an Affiliate for the performance of duties as an
Employee, which hours shall be credited to the Employee for the relevant
Computation Period in which such duties are performed;
(ii) each hour for which an Employee is paid, or entitled to
payment, by the Employer or an Affiliate 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;
provided (A) no more than 501 hours shall be credited under this clause (ii) for
any single continuous period during which no duties are performed (whether or
not such period covers more than one relevant Computation Period) and (B) hours
under this clause (ii) shall be calculated and credited pursuant to Section
2530.200b-2 of the Department of Labor Regulations which are incorporated as
part of this Plan by this reference; and
(iii) each hour for which back pay, irrespective of mitigation
of damages, is either awarded or agreed to by the Employer or an Affiliate;
provided (A) no credit shall be given for an hour described in this clause (iii)
if credit also is given for such hour under clause (i) or clause (ii), and (B)
an hour described in this clause (iii) shall be credited to the Employee for the
relevant Computation Period or Computation Periods to which the award or
agreement pertains rather than to the Computation Period in which the award,
agreement or payment is made.
3.1(c)(2) DETERMINATION. The Employer shall determine an Employee's
Hours of Service
(i) STANDARD OPTION - by actually counting hours and
maintaining records which reflect the actual hours worked, or
(ii) ALTERNATIVE - if so specified in the Adoption Agreement,
by crediting each such Employee with
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(A) 10 Hours of Service for each day,
(B) 45 Hours of Service for each week,
(C) 95 Hours of Service for each semi-monthly payroll period, or
(D) 190 Hours of Service for each month
during which the Employee otherwise would be credited with at least one Hour of
Service.
3.1(d) YEAR OF SERVICE. The term "Year of Service" means each Computation
Period during which an Employee completes at least
3.1(d)(1) STANDARD OPTION - 1,000 Hours of Service or
3.1(d)(2) ALTERNATIVE - such lesser number of Hours of Service
specified in the Adoption Agreement.
Notwithstanding the foregoing, if the Participation Requirement includes a
partial Year of Service, no minimum number of Hours of Service shall be required
for such partial year.
3.1(e) CHANGE IN SERVICE CALCULATION METHOD. If an amendment changes the
method of crediting service from the "Elapsed Time" method of the "Hours of
Service" method, each Employee who was credited with service under the "Elapsed
Time" method shall be credited with service
3.1(e)(1) for the Employee's employment before the Computation Period
in which such amendment is adopted, as determined on the basis that one year of
Service credited to the Employee under the "Elapsed Time" method for such
employment shall equal one Year of Service under this Section 3.1,
3.1(e)(2) for the Employee's employment during the Computation Period
in which such amendment is adopted, for a number of Hours of Service determined
by uniformly applying one of the equivalencies set forth in Section
3.1(c)(2)(ii) to any fractional part of a year credited to the Employee under
the "Elapsed Time" method as of the effective date of the amendment, and
3.1(e)(3) for the Employee's employment on and after the effective
date of the amendment, as determined under the rules in this Section 3.1.
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3.2 ELAPSED TIME METHOD (ALTERNATIVE). If the "Elapsed Time" method of
crediting service is specified in the Adoption Agreement, the definitions and
rules in this Section 3.2 shall apply in lieu of the definitions and rules in
Section 3.1.
3.2(a) BREAK IN SERVICE.
3.2(a)(1) GENERAL. The term "Break in Service" means a Period of
Severance of at least 12 consecutive months.
3.2(a)(2) MATERNITY/PATERNITY RULE. If an Employee is absent from
service for "maternity or paternity reasons" and the Employee timely furnishes
proof of the reason for such absence (in accordance with such nondiscriminatory
rules as may be established by the Plan Administrator and communicated to
Employees), the 12 consecutive month period beginning on the first anniversary
of the first date of such absence shall not constitute a Break in Service. Such
12 consecutive month period shall be neither a Period of Severance nor a period
of Service. For purposes of this special maternity/paternity rule, an absence
for "maternity or paternity reasons" means an absence (i) by reason of pregnancy
of the Employee, (ii) by reason of the birth of a child of the Employee, (iii)
by reason of the placement of a child with the Employee in connection with the
adoption of such child by the Employee, or (iv) for purposes of caring for such
child for a period beginning immediately following such birth or placement.
3.2(b) HOUR OF SERVICE. The term "Hour of Service" means each hour for
which an Employee is paid, or entitled to payment, by the Employer or an
Affiliate for the performance of duties as an Employee during any period of
employment.
3.2(c) PERIOD OF SEVERANCE. The term "Period of Severance" means a
continuous period of time during which an Employee is not employed by the
Employer or an Affiliate beginning on the date the Employee retires, quits, or
is discharged, or if earlier, the 12 month anniversary of the date on which the
Employee was otherwise first absent from service.
3.2(d) PERIOD OF SERVICE
3.2(d)(1) GENERAL. For participation purposes and for vesting
purposes, the term "Period of Services" means an Employee's employment completed
as an Employee of the Employer and any Affiliate beginning on such Employee's
first day of employment or reemployment and ending on the date a Break in
Service begins. An Employee's first day of employment or reemployment shall be
the first day the Employee performs an Hour of Service. A Period of Service
also shall include any Period of Severance of less than 12 consecutive months.
3.2(d)(2) AGGREGATION. An Employee's employment completed in all
Periods of Service shall be aggregated (to the extent that such service is not
disregarded under Section 3.7 or
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Section 3.8) and the number of days in each Period of Service in excess of a
whole year of employment (or, if there is no whole year of employment in any
such period, the number of days in such period) shall be aggregated into
additional whole years of employment on the assumption that 365 days equals one
whole year of employment.
3.2(e) YEAR OF SERVICE. The term "Year of Service" means each 12
consecutive month period of employment completed in any Period of Service
beginning on the date an Employee first completes an Hour of Service ("hire
date") and ending on the date immediately preceding the anniversary of such hire
date. Subsequent Years of Service shall begin on each anniversary of the
Employee's hire date and end on the date immediately preceding the next
anniversary of such hire date.
3.2(f) CHANGE IN SERVICE CALCULATION METHOD. If an amendment changes the
method of crediting service from the "Hour of Service" method to the "Elapsed
Time" method, each Employee who had any service credit under the "Hour of
Service" method shall be credited with service
3.2(f)(1) for the Employee's employment before the Computation Period
in which such amendment is adopted, as determined on the basis that one Year of
Service credited to the Employee under the "Hour of Service" method for such
employment shall equal one Year of Service under this Section 3.2,
3.2(f)(2) for the Employee's employment during the Computation Period
in which such amendment is adopted, as determined under the rules in this
Section 3.2 or, if greater, as determined for such period under the "Hour of
Service" method as converted to Years of Service under the assumption that 365
days equals one Year of Service, and
3.2(f)(3) for the Employee's employment after the last day of the
Computation Period in which such amendment is adopted, as determined under the
rules in this Section 3.2.
3.3 SERVICE BEFORE EFFECTIVE DATE. For participation purposes all periods of
employment with the Employer or an Affiliate completed before the Employer
adopted this Plan or a predecessor plan ("pre-effective date employment") shall
be included (to the extent such service is not disregarded under Section 3.7).
For vesting purposes all periods of pre-effective date employment shall be
included unless such service is disregarded under Section 3.7 or Section 3.8.
Notwithstanding the foregoing, service credit for vesting purposes automatically
shall be granted for pre-effective date employment to the extent required by
Code Section 411(a) for periods during which the Employer or an Affiliate
maintained a predecessor plan.
3.4 SERVICE WITH PREDECESSOR EMPLOYER. All periods of employment with a
predecessor employer or employers shall be included in calculating an Employee's
service to the extent required by Code Section 414(a) if the Employer or an
Affiliate maintains a plan of such predecessor
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employer. However, if the Employer or an Affiliate does not maintain a plan of
such predecessor employer, periods of employment with such predecessor employer
shall be included in calculating an Employee's service
3.4(a) STANDARD OPTION - only to the extent required under regulations
under Code Section 414(a) or
3.4(b) ALTERNATIVE - only if so specified in the Adoption Agreement.
3.5 LEASED EMPLOYEES. A Leased Employee shall be credited with service as an
Employee of the Employer or an Affiliate in accordance with Code Section 414(n)
or Section 414(o).
3.6 SERVICE WITH AFFILIATES. An Employee shall be credited with all service
with any Affiliate and any other entity which is required to be aggregated with
the Employer under Code Section 414(o).
3.7 SPECIAL BREAK IN SERVICE RULES.
3.7(a) STANDARD OPTION. Except as provided in Section 3.7(c) and Section
8.2, an Employee who has a Break in Service shall be credited after such Break
in Service for both participation and vesting purposes with all Years of Service
completed before such Break in Service.
3.7(b) ALTERNATIVE. In addition to the exceptions in Section 3.7(c) and
Section 8.2, the Employer may specify in the Adoption Agreement that certain
service completed before a Break in Service may be disregarded under one or more
of the rules set forth in this Section 3.7(b).
3.7(b)(1) ONE YEAR HOLD-OUT RULE. If the "One Year Hold-Out Rule" is
specified in the Adoption Agreement for a nonstandardized Plan, an Employee who
has a Break in Service (two Breaks in Service if the Alternative
Maternity/Paternity Rule applies) shall not be credited after such Break in
Service for participation purposes or vesting purposes with any Year of Service
completed before such Break in Service until the Employee completes a Year of
Service after such Break in Service.
In applying this rule for participation purposes, such Year of Service shall be
measured by the Computation Period which begins on an Employee's "reemployment
commencement date" and, if necessary, subsequent Computation Periods beginning
(i) with the Plan Year which includes the first anniversary of
the "reemployment commencement date" if the standard Computation Period in
Section 3.1(b)(3)(i) is specified in the Adoption Agreement, or
(ii) on anniversaries of the "reemployment commencement date"
if the alternative Computation Period in Section 3.1(b)(3)(ii) is specified in
the Adoption Agreement.
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The "reemployment commencement date" shall be the first day on which the
Employee is credited with an Hour of Service for the performance of duties after
the first Computation Period in which the Employee incurs a Break in Service.
If an Employee who was a Participant before his or her Break in Service
completes a Year of Service in accordance with this provision, such Employee's
participation shall be reinstated as of his or her reemployment commencement
date.
3.7(b)(2) PRE-PARTICIPATION RULE. If the "Pre-Participation Rule" is
specified in the Adoption Agreement, an Employee who has a Break in Service (two
Breaks in Service if the Alternative Maternity/Paternity Rule applies) before
the Employee satisfies the Participation Requirement shall not be credited for
participation purposes with any Year of Service completed before such Break in
Service. However, this rule shall only apply if the Participation Requirement
for the Plan requires more than one Year of Service and the vesting schedule
specified in the Adoption Agreement provides for full and immediate vesting.
3.7(b)(3) RULE OF PARITY. If the "Rule of Parity" is specified in
the Adoption Agreement the following rules shall apply:
(i) GENERAL. If an Employee does not have any nonforfeitable
interest in the portion of the Employee's Account which is attributable to
Employer contributions, the Employee's Years of Service before a period of
consecutive Breaks in Service shall not be taken into account in computing
service for participation or vesting purposes if the number of consecutive
Breaks in Service in such period equals or exceeds the greater of 5 (6 if the
Alternative Maternity/Paternity Rule applies) or the aggregate number of Years
of Service completed before such Breaks in Service ("pre-break service"). Such
pre-break service shall not include any pre-break service disregarded under the
preceding sentence by reason of prior Breaks in Service.
(ii) PARTICIPATION. If an Employee's Years of Service are
disregarded under this rule of parity, the Employee shall be treated as a new
Employee for participation purposes. If the Employee's Years of Service are not
disregarded under this rule, the Employee shall continue to participate in the
Plan, or, if the Employee separated from service, shall participate immediately
upon the Employee's reemployment.
(iii) VESTING. If a Participant's Years of Service are
disregarded under this rule of parity, the Participant's pre-break Years of
Service shall be disregarded for purposes of determining the Participant's
nonforfeitable interest in the Participant's post-break Employer Account. If a
Participant's pre-break Years of Service are not disregarded under the rule of
parity, the Participant's pre-break Years of Service shall be counted for
purposes of determining the Participant's nonforfeitable interest in the
Participant's post-break Employer Account.
3.7(b)(4) ALTERNATIVE MATERNITY/PATERNITY RULE. If the "Alternative
Maternity/Paternity Rule" is specified in the Adoption Agreement, the special
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Maternity/Paternity rule set forth in Section 3.1(a)(2) shall not apply and the
minimum period of consecutive Breaks in Service required to disregard any
service or to deprive any Employee of any right under this Plan shall be
increased by one as specified in the parentheticals in this Section 3.7 and in
Section 8.2.
3.7(c) VESTING ON REEMPLOYMENT AFTER BREAK IN SERVICE. If a Participant
has 5 or more consecutive Breaks in Service (6 or more consecutive Breaks in
Service if the Alternative Maternity/Paternity Rule applies), all Years of
Service completed after such Breaks in Service shall be disregarded for purposes
of determining the Participant's nonforfeitable interest in the Participant's
Employer Account and Matching Account that accrued before such Breaks in
Service. Accordingly, as set forth in Section 8.2, the Employer shall not be
required to restore a Forfeiture upon such reemployment. Unless the Adoption
Agreement specifies the Rule of Parity, both the Participant's pre-break service
and post-break service shall count for purposes of determining the
nonforfeitable interest in the Participant's post-break Employer Account and
Matching Account. If the Adoption Agreement specifies the Rule of Parity and
the Participant's pre-break Years of Service are disregarded under that rule,
then the Participants pre-break Years of Service shall not count for purposes of
determining the nonforfeitable interest in the Participant's post-break Employer
Account and Matching Account. As provided in Section 8.2, separate accounts
shall be maintained for the Participant's pre-break and post-break Employer
Account and Matching Amount and such accounts shall share in Fund Earnings.
If a Participant does not have 5 consecutive Breaks in Service (6 or more
consecutive Breaks in Service if the Alternative Maternity/Paternity Rule
applies), both the Participant's pre-break and post-break Years of Service shall
count in determining the nonforfeitable interest in both the pre-break and
post-break Employer Account and Matching Account balance. However, unless the
Adoption Agreement specifies the "Alternative to the Buy Back Rule" (as
described in Section 8.2(b)), a Participant's pre-break Employer Account and
Matching Account balance shall be zero unless the Participant repays any
distribution as provided in Section 8.2(a).
3.8 SERVICE EXCLUSIONS FOR VESTING PURPOSES.
3.8(a) STANDARD OPTION - An Employee shall be credited with all Years of
Service for vesting purposes (to the extent such service is not disregarded
under Section 3.7 and Section 8.2).
3.8(b) ALTERNATIVE - The Employer may specify in the Adoption Agreement
service which is expressly excluded for vesting purposes.
SECTION 4. PARTICIPATION
4.1 GENERAL RULE. Each Eligible Employee shall become a Participant in this
Plan on the Entry Date which coincides with or immediately follows the date on
which the Eligible Employee
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satisfies the Participation Requirement (provided he or she is an Eligible
Employee on such Entry Date).
4.2 SPECIAL RULES.
4.2(a) PRE-EXISTING PLAN. Any Employee who was a participant in the
Pre-Existing Plan on the date immediately preceding the Effective Date or who
would have become a participant in the Pre-Existing Plan on the Effective Date
shall become a Participant under this Plan on such Effective Date. However, no
contributions shall be made by or on behalf of such Participant unless the
Participant is otherwise entitled to a contribution under Section 5.
4.2(b) REEMPLOYMENT BEFORE SATISFYING PARTICIPATION REQUIREMENT. If an
Employee separates from service prior to satisfying the Participation
Requirement and is thereafter reemployed, all employment completed by such
Employee prior to such separation shall be aggregated with such Employee's
employment completed after reemployment for purposes of satisfying the
Participation Requirement unless such prior employment is excluded under the
rules set forth in Section 3.
4.2(c) REEMPLOYMENT AFTER SATISFYING PARTICIPATION REQUIREMENT. If an
Employee satisfies the Participation Requirement before he or she separates from
service and the Employee thereafter is reemployed, the Employee shall become a
Participant on the later of (1) the first day he or she completes an Hour of
Service as an Eligible Employee upon reemployment or (2) the first Entry Date
following the date on which he or she satisfies the Participation Requirement.
However, any such Employee whose prior service is disregarded under Section 3
shall be treated as a new Employee for participation purposes.
4.2(d) STATUS CHANGE. If the status of an Eligible Employee for whom no
Account is maintained changes to that of an Employee (other than an Eligible
Employee) and such person's status thereafter changes back to that of an
Eligible Employee, such person shall become a Participant on the later of (1)
the date the status changes back to that of an Eligible Employee or (2) the
first Entry Date which coincides with or immediately follows the date on which
he or she satisfies the Participation Requirement.
4.3 PARTICIPATION INFORMATION. Each Participant shall file with the Plan
Administrator such personal information and data as the Plan Administrator deems
necessary for the orderly administration of this Plan.
SECTION 5. CONTRIBUTIONS
5.1 PROFIT SHARING PLAN. If this Plan is adopted as a Profit-Sharing Plan, the
Employer Contribution made by the Employer and each Participating Affiliate for
each Plan Year shall equal such amount, if any, as the Board determines in its
discretion that the Employer and each
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Participating Affiliate shall contribute for such year. Employer Contributions
under this Section 5.1 shall be made
5.1(a) STANDARD OPTION - from Net Profits or
5.1(b) ALTERNATIVE - if so specified in the Adoption Agreement, without
regard to Net Profits. Notwithstanding any such election, the Employer intends
that this Plan shall be a "profit-sharing plan" for purposes of the Code and
ERISA.
5.2 MONEY PURCHASE PENSION PLAN. If this Plan is adopted as a Money Purchase
Pension Plan, the Employer Contribution made by the Employer and each
Participating Affiliate for each Plan Year shall be an amount equal to the sum
of the contribution for each Active Participant as determined under the formula
specified in the Adoption Agreement. The Forfeitures for each Plan Year shall
be
5.2(a) STANDARD OPTION - applied to reduce the Employer Contribution for
such Plan Year or
5.2(b) ALTERNATIVE - if so specified in the Adoption Agreement, allocated
to the Employer Account of each Active Participant in accordance with Section
6.3(b). Notwithstanding any such election, the Employer intends that this Plan
shall be a "money purchase pension plan" for purposes of the Code and ERISA.
5.3 401(k) PLAN.
5.3(a) GENERAL. If this Plan is adopted as a 401(k) Plan, the
contributions made by the Employer and each Participating Affiliate shall be
determined in accordance with the elections made by the Employer in the Adoption
Agreement and the rules set forth in this Section 5.3. Contributions made under
this Section 5.3 other than Elective Deferrals and Employee Contributions shall
be made
5.3(a)(1) STANDARD OPTION - from Net Profits or
5.3(a)(2) ALTERNATIVE - if so specified in the Adoption Agreement,
without regard to Net Profits.
Elective Deferrals and Employee Contributions shall be made without regard to
Net Profits. Notwithstanding any such election, the Employer intends that this
Plan shall be a "profit-sharing plan" for purposes of the Code and ERISA.
5.3(b) MATCHING CONTRIBUTIONS. If the Employer specifies in the Adoption
Agreement that Matching Contributions shall be made to the Plan, the Employer
and each Participating
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Affiliate shall make a Matching Contribution for each eligible Participant based
on the Employee Contributions and Elective Deferrals made by or on behalf of
such eligible Participant in such amount and as of each Allocation Date as
specified in the Adoption Agreement. Notwithstanding the foregoing,
5.3(b)(1) for Plan Years beginning on or after the Final Compliance
Date, no Matching Contribution shall be made on account of a Participant's
Elective Deferrals or Employee Contributions which are Excess Elective Deferrals
under Section 7.3, Excess Aggregate Contributions under Section 7.4 or Excess
Aggregate Contributions under Section 7.5, and
5.3(b)(2) for Plan Years beginning before the Final Compliance Date,
no Matching Contribution shall be made on account of such excess amounts unless
specified in the formula for Matching Contributions set forth in the Adoption
Agreement.
5.3(c) QUALIFIED MATCHING CONTRIBUTIONS. If the Employer specifies in the
Adoption Agreement that Qualified Matching Contributions shall be made to the
Plan, the Employer and each Participating Affiliate shall make a Qualified
Matching Contribution for each eligible Participant based on the Employee
Contributions and Elective Deferrals made by or on behalf of such eligible
Participant in such amount and as of each Allocation Date as specified in the
Adoption Agreement. Qualified Matching Contributions shall be subject to the
following special rules:
5.3(c)(1) the Participant may not elect to receive such contributions
in cash until distributed from the Plan;
5.3(c)(2) such contributions shall be completely nonforfeitable when
made;
5.3(c)(3) such contributions shall be subject to the same
distribution and withdrawal restriction applicable to Elective Deferrals set
forth in Section 9.2(b);
5.3(c)(4) for Plan Years beginning on and after the Final Compliance
Date, no Qualified Matching Contribution shall be made on account of a
Participant's Elective Deferrals or Employee Contributions which are Excess
Elective Deferrals under Section 7.3, Excess Contributions under Section 7.4 or
Excess Aggregate Contributions under Section 7.5; and
5.3(c)(5) for Plan Years beginning before the Final Compliance Date,
no Qualified Matching Contribution shall be made on account of such excess
amount sunless specified in the formula for Qualified Matching Contributions set
forth in the Adoption Agreement.
5.3(d) QUALIFIED NONELECTIVE CONTRIBUTION. If the Employer specifies in
the Adoption Agreement that Qualified Nonelective Contributions shall be made to
the Plan, the Employer and
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each Participating Affiliate shall make Qualified Nonelective Contributions for
each eligible Participant in such amount and as of each Allocation Date
specified in the Adoption Agreement.
In addition, in lieu of distributing Excess Contributions as provided in Section
7.4(d) or Excess Aggregate Contributions as provided in Section 7.5(d), the
Employer and each Participating Affiliate may contribute on behalf of each
Participant who is a Nonhighly Compensated Employee on the last day of each Plan
Year such amount, if any, as the Employer and each Participating Affiliate
determine in their discretion to contribute for such Plan Year to satisfy the
ADP limit of Section 7.4(b) or the ACP limit of Section 7.5(b), or both,
pursuant to the regulations Code 401(k) and Code Section 401(m).
Qualified Nonelective Contributions shall be subject to the following special
rules:
5.3(d)(1) the Participant may not elect to receive such contributions
in cash until distributed from the Plan;
5.3(d)(2) such contributions shall be completely nonforfeitable when
made; and
5.3(d)(3) such contributions shall be subject to the same
distribution and withdrawal restrictions applicable to Elective Deferrals set
forth in Section 9.2(b).
5.3(e) DISCRETIONARY EMPLOYER CONTRIBUTION. If the Employer specifies in
the Adoption Agreement that discretionary Employer Contributions shall be made
by the Employer and each Participating Affiliate for each Plan Year shall equal
such amount, if any, as the Board determines in its discretion that the Employer
and each Participating Affiliate shall contribute for such year.
5.3(f) ELECTIVE DEFERRALS. If the Employer specifies in the Adoption
Agreement that Elective Deferrals may be made, each Participant who is an
Eligible Employee may elect pursuant to a cash or deferred election that the
Employer and each Participating Affiliate make Elective Deferrals to the Plan on
the Participant's behalf in lieu of cash compensation for each pay period ending
on any date on or after he or she becomes a Participant and on which he or she
is an Eligible Employee in such amounts as specified in the Adoption Agreement.
All Elective Deferrals shall be made exclusively through payroll withholding and
shall be transferred by the Employer or Participating Affiliate to the Trustee
as soon as practicable after the date such Elective Deferrals are withheld.
5.3(g) EMPLOYEE CONTRIBUTIONS. If the Employer specifies in the Adoption
Agreement that Employee Contributions may be made, each Participant who is an
Eligible Employee may elect to make Employee Contributions to the Plan for each
pay period ending on any date on or after he or she becomes a Participant and on
which he or she is an Eligible Employee in such amounts as specified in the
Adoption Agreement. All Employee Contributions shall be made
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exclusive through payroll withholding and shall be transferred by the Employer
or Participating Affiliate to the Trustee as soon as practicable after the date
such Employee Contributions are withheld.
5.3(h) ELECTION RULES AND LIMITATIONS.
5.3(h)(1) GENERAL. The Plan Administrator from time to time shall
establish and shall communicate in writing to Participants who are Eligible
Employees such reasonable nondiscriminatory deadlines, rules and procedures for
making the elections described in this Section 5.3 as the Plan Administrator
deems appropriate under the circumstances for the proper administration of this
Plan. A Participant's election shall be made on an Election Form and no
election shall be effective unless such Election Form is properly completed and
timely filed in accordance with such established deadlines, rules and
procedures. The Plan Administrator shall have the right at any time
unilaterally to reduce the amount or percentage of Elective Deferrals or
Employee Contributions elected under this Section 5.3 if the Plan Administrator
determines that such reduction is necessary to satisfy the limitations under
Section 7 of the Plan.
5.3(h)(2) COMMENCEMENT OF ELECTION. A Participant's initial election
to make Elective Deferrals or Employee Contributions under this Section 5.3 for
any period of employment may be effective as early as the Entry Date on which he
or she becomes a Participant in the Plan. If a Participant does not make a
proper election to make Elective Deferrals or Employee Contributions as of such
Entry Date, the Participant may thereafter make an election
(i) STANDARD OPTION - effective on any date or
(ii) ALTERNATIVE - effective only as of the dates specified in
the Adoption Agreement.
A Participant's election shall remain shall remain in effect until revised or
terminated in accordance with this Section 5.3(h).
5.3(h)(3) REVISION OF ELECTION. An election, once effective, can
thereafter be revised by a Participant
(i) STANDARD OPTION - effective on any date or
(ii) ALTERNATIVE - effective only as of the dates specified in
the Adoption Agreement.
5.3(h)(4) TERMINATION OF ELECTION. A Participant shall have the
right to completely terminate an election under this Section 5.3 at any time,
and any such termination shall become effective as of the first day of the first
pay period following the date he or she timely
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files a properly completed Election Form terminating such election. Any
Participant whose status as an Eligible Employee terminates shall be deemed to
have completely terminated his or her election, if any, under this Section 5.3
as of the date the Participant's status as such so terminates.
5.3(h)(5) RESUMPTION AFTER TERMINATION. A Participant whose election
terminates may thereafter elect to resume contributions under this Section 5.3
(i) STANDARD OPTION - effective as of any date, or
(ii) ALTERNATIVE - effective only as of the dates specified in
the Adoption Agreement.
5.3(h)(6) EFFECTIVE DATES OF ELECTIONS. A Participant's initial
revised or resumed election shall be effective only if he or she is an Eligible
Employee on the effective date of such elections set forth in this Section
5.3(h). Elective Deferrals and Employee Contributions made pursuant to a
Participant's elections shall be withheld from Compensation which otherwise
would be paid on or after the effective date of such election and while he or
she is an Eligible Employee. Under no circumstances shall a Participant's
Elective Deferral election apply to defer Compensation which has been paid to
the Participant or which he or she is currently eligible to receive (in cash or
otherwise) at his or her discretion.
5.3(i) APPLICATION OF FORFEITURES - The Forfeitures attributable to
Matching Contributions and Employer Contributions shall be
5.3(i)(1) STANDARD OPTION - applied to reduce the Matching
Contributions, Qualified Matching Contributions and Qualified Nonelective
Contributions, if any, in accordance with Section 6.3(c)(ii)(A) or
5.3(i)(2) ALTERNATIVE - if so specified in the Adoption
Agreement,
(i) allocated to the Employer Account or Matching
Account, as applicable, of each Active Participant in accordance with Section
6.3(c)(2)(ii)(B)(l), or
(ii) for a nonstandardized Plan, allocated in
accordance with the formula specified in the Adoption Agreement.
5.4 TARGET BENEFIT PENSION PLAN.
5.4(a) GENERAL. If this Plan is adopted as a Target Benefit Pension Plan,
the Employer Contribution made by the Employer and each Participating Affiliate
for each Plan Year shall be an amount equal to the sum of the contributions
required to fund each Active Participant's "Target Benefit" specified in the
Adoption Agreement. The Forfeitures for each Plan Year shall
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be applied to reduce the Employer Contribution for such Plan Year. Such
contribution shall be determined as of the last day of such Plan Year under the
individual level premium funding method, using the interest rate and mortality
table specified in the Adoption Agreement, the Participant's age on his or her
last birthday and the assumption of a constant rate of future Compensation, in
accordance with the following:
5.4(a)(1) STEP 1. If the Participant has not reached the Plan's
Normal Retirement Age, calculate the present value of the "Target Benefit"
specified in the Adoption Agreement by multiplying the "Target Benefit" by the
product of (1) the applicable factor from Table I(a) or (b), whichever is
appropriate, in Exhibit A to the Adoption Agreement and (2) the applicable
factor from Table III(a) or (b), whichever is appropriate, in Exhibit A to the
Adoption Agreement. If the Participant is at or beyond the Plan's Normal
Retirement Age, calculate the present value of the "Target Benefit" specified in
the Adoption Agreement by multiplying the "Target Benefit" by the applicable
factor from Table IV(a) or (b), whichever is appropriate, in Exhibit A to the
Adoption Agreement.
5.4(a)(2) STEP 2. Calculate the excess, if any, of the amount
determined in Step 1 over the theoretical reserve.
5.4(a)(3) STEP 3. Amortize the result in Step 2 by multiplying it by
the applicable factor from Table II in Exhibit A to the Adoption Agreement. For
the Plan Year in which the Participant attains Normal Retirement Age and for
subsequent Plan Years, the applicable factor is 1.0.
5.4(b) THEORETICAL RESERVE. For purposes of this Section 5.4, the
theoretical reserve is determined as follows:
5.4(b)(1) A Participant's theoretical reserve as of the last day of
the first Plan Year in which the Participant participates in the Plan, and as of
the last day of the first Plan Year after any Plan Year in which the Plan either
did not satisfy the safe harbor in Section 1.401(a)(4)-8(b)(3) of the Federal
Income Tax Regulations or was not a Prior Safe Harbor Plan, is zero. In all
other cases, in the first Plan Year in which this theoretical reserve provision
is adopted or made effective, if later, as specified in the Adoption Agreement
("year 1"), the initial theoretical reserve is determined as follows:
(i) Calculate as of the last day of the Plan Year immediately
preceding year 1 the present value of the "Target Benefit", using the actuarial
assumptions, the provisions of the Plan, and the Participant's Average Annual
Compensation as of such date; provided, however, for a Participant who is beyond
Normal Retirement Age in year 1, the straight life annuity factor used for such
determination shall be the factor applicable for such Normal Retirement Age.
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(ii) Calculate as of the last day of the Plan Year immediately
preceding year 1 the present value of future Employer Contributions, I.E., the
contributions due each Plan Year using the actuarial assumptions, the provisions
of the Plan (disregarding those provisions of the Plan providing for the
limitations of Code Section 415 or the minimum contributions under Code Section
416), and the Participant's Average Annual Compensation as of such date,
beginning with year 1 through the end of the Plan Year in which the Participant
attains Normal Retirement Age.
(iii) Subtract the amount determined in clause (ii) from the
amount determined in clause (i).
5.4(b)(2) Accumulate the initial theoretical reserve in Section
5.4(b)(1) and the Employer Contribution (as limited by Code Section 415, but
without regard to any required minimum contributions under Code Section 416) for
each Plan Year beginning in year 1 up through the test day of the current Plan
Year (excluding contributions, if any, made for the current Plan Year) using the
Plan's interest assumption in effect for each such year. In any Plan Year
following the Plan Year in which the Participant attains Normal Retirement Age,
the accumulation is calculated assuming an interest rate of 0%.
5.4(b)(3) The calculations in this Section 5.4(b) shall be made as of
the test day of each Plan Year, on the basis of the Participant's age on his or
her birthday and the interest rate in effect on the test day of the prior Plan
Year.
5.4(c) PAST SERVICE CREDITS. If the Plan is adopted as a standardized
Plan, upon initial adoption of this Plan or upon a Plan amendment which is
effective on or after the Final Compliance Date, no more than 5 years of credit
shall be granted for service completed before the effective date of such
adoption or amendment, and any such past service credit shall be granted on a
uniform basis to all Participants in the Plan on such effective date.
5.4(d) TRA 86 AMENDMENT. A Participant's Account balance shall not be
reduced as a result of an amendment to this Plan or a Pre-Existing Plan to
satisfy the requirements of TRA 86. To the extent that contributions actually
made on a Participant's behalf for Plan Years beginning after December 31, 1988
exceed the contributions that would have been required under the formula as
effective for such years as a result of the amendment of this Plan or a
Pre-Existing Plan to satisfy TRA 86, such excess shall be applied to offset
contributions required to such Participant's Account for Plan Years beginning
after the date such TRA 86 amendment is adopted or, if later, the date such
TRA 86 amendment is effective consistent with ERISA Section 204(h).
5.4(e) SPECIAL DEFINITIONS AND RULES. The special definitions and rules
in this Section 5.4(e) shall apply for purposes of determining the Employer
Contributions under a Target Benefit Pension Plan.
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5.4(e)(1) CUMULATIVE DISPARITY LIMIT. For a Plan with a Unit Benefit
Formula, a Participant's Cumulative Disparity Limit is equal to 35 minus (1) the
number of the Participant's Years of Participation under this Plan during which
this Plan did not satisfy the safe harbor for target benefit plans in Section
1.401(a)(4)-8(b)(3) of the Federal Income Tax Regulations or was not a Prior
Safe Harbor Plan, and (2) the number of years during which the Participant
participated in one or more qualified plans or simplified employee pension plans
ever maintained by the Employer (other than years counted in clause (1) or
counted toward a Participant's total Years of Projected Participation). The
Cumulative Disparity Limit shall be determined taking into account only those
Years of Participation in this Plan beginning after December 31, 1988 when this
Plan had an integrated benefit formula and those years of participation in such
other qualified plans and simplified employee pension plans beginning after
December 31, 1988 during which the Participant actually received an allocation
under an integrated defined contribution plan (other than a target benefit
pension plan), during which the Participant was eligible to receive a benefit
under an integrated defined benefit pension plan or an integrated target benefit
pension plan), or during which the Participant received an allocation or accrued
a benefit under a plan which imputed permitted disparity pursuant to Section
1.401(a)-7 of the Federal Income Tax Regulations.
5.4(e)(2) CUMULATIVE DISPARITY REDUCTION. For a Plan with a Fixed
Benefit Formula, the Excess Benefit Percentage will further be reduced as set
forth in this Section 5.4(e)(2) for a Participant with more than 35 "cumulative
disparity years". A Participant's "cumulative disparity years" consist of the
sum of (1) the Participant's total Years of Projected Participation, (2) the
Participant's Years of Participation during which this Plan did not satisfy the
safe harbor for target benefit plans in regulations Section 1.401(a)(4)-8(b)(3)
of the Federal Income Tax Regulations or was not a Prior Safe Harbor Plan, and
(3) the number of years during which the Participant participated in one or more
qualified plans or simplified employee pension plans ever maintained by the
Employer (other than years in clause (1) or (2) above); provided that the
cumulative disparity years shall be determined taking into account only those
Years of Participation in this Plan beginning after December 31, 1988 when this
Plan had an integrated benefit formula and those years of participation in such
other qualified plans and simplified employee pension plans beginning after
December 31, 1968 during which the Participant actuary received an allocation
under an integrated defined contribution plan (other than a target benefit
pension plan), during which the Participant was eligible to receive a benefit
under an integrated defined benefit pension plan (or an integrated target
benefit pension plan), or during which the Participant received an allocation or
accrued a benefit under a plan which imputed permitted disparity pursuant to
Section 1.401(a)-7 of the Federal Income Tax Regulations.
If this Cumulative Disparity Reduction applies, the Excess Benefit Percentage
will be reduced as follows:
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(A) Subtract the Participant's Base Benefit Percentage from the
Participant's Excess Benefit Percentage (after modification as required in the
Adoption Agreement for less than 35 Years of Projected Participation).
(B) Multiply the results determined in (A) by a fraction (not less
than 0), the numerator of which is 35 minus the sum of the years in clauses (2)
and (3) of this Section 5.4(e)(2), and the denominator of which is 35.
(C) The Participant's Excess Benefit Percentage is equal to the sum
of the result in (B) and the Participant's Base Benefit Percentage, as otherwise
modified in the Adoption Agreement.
5.4(e)(3) CURRENT STATED BENEFIT. Each Participant's Current Stated
Benefit will be the product of (1) the amount derived from the formula specified
in the Adoption Agreement, and (2) a fraction, the numerator of which is the
Participant's number of Years of Participation from the latest Fresh-Start Date
(if any) through and including the later of the year in which the Participant
attains Normal Retirement Age or the current Plan Year, and the denominator of
which is the Participant's total Years of Projected Participation. If this Plan
has not had a Fresh-Start Date, such fraction will equal 1.0 for all
Participants. In any event, for those Participants who first participated in
the Plan after the latest Fresh-Start Date, such fraction will equal 1.0. For
purposes of determining the numerator of the fraction described in clause (2),
only those current and prior years during which a Participant was eligible to
receive a contribution under the Plan will be taken into account.
5.4(e)(4) FRESH-START DATE. Fresh-Start Date means the last day of a
Plan Year preceding a Plan Year for which provisions that would affect the
amount of the Current Stated Benefit are amended. If applicable, the latest
Fresh-Start Date of the Plan shall be designated in the Adoption Agreement.
5.4(e)(5) FROZEN ACCRUED STATED BENEFIT. A Participant's Frozen
Accrued Stated Benefit is determined as of the Plan's latest Fresh-Start Date as
if the Participant terminated employment with the Employer as of that date,
without regard to any amendment made by the Plan after that date except as
permitted under regulations.
A Participant's Frozen Accrued Stated Benefit is equal to the amount of the
Current Stated Benefit in effect on the latest Fresh-Start Date that a
Participant has accrued as of that date, assuming that such Current Stated
Benefit accrues ratably from the year in which the Participant first
participated in this Plan (or, if later, the immediately preceding Fresh-Start
Date under this Plan) through and including the Plan Year in which the
Participant attains Normal Retirement Age.
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The amount of the Current Stated Benefit in effect on the latest Fresh-Start
Date that a Participant is assumed to have ratably accrued is determined by
multiplying the Plan's Current Stated Benefit in effect on that date by a
fraction, the numerator of which is the number of Years of Participation from
the later of the Participant's first Year of Participation in this Plan or the
immediately preceding Fresh-Start Date (if any) through and including the year
that contains the latest Fresh-Start Date, and the denominator of which is the
number of Years of Participation from the later of the Participant's first Year
of Participation in this Plan or the immediately preceding Fresh-Start Date (if
any) through and including the later of the year in which the Participant
attains Normal Retirement Age or the current Plan Year. For purposes of this
paragraph, only those Years of Participation during which a Participant was
eligible to receive a contribution under the Plan will be taken into account.
If this Plan has had a preceding Fresh-Start Date, each Participant's Frozen
Accrued Stated Benefit as of the latest Fresh-Start Date will equal the sum of
the amount of the Current Stated Benefit in effect on the latest Fresh-Start
Date that a Participant is assumed to have ratably accrued as of that date under
the preceding paragraph, and the Frozen Accrued Stated Benefit determined as of
the preceding Fresh-Start Date(s).
If (1) the Current Stated Benefit formula in effect on the latest Fresh-Start
Date was not expressed as a straight life annuity for all Participants, and/or
(2) the Normal Retirement Age for any Participant on the latest Fresh-Start Date
was greater than the Normal Retirement Age for that Participant under the
Current Stated Benefit formula in effect after the latest Fresh-Start Date, the
Frozen Accrued Stated Benefit will be converted to an actuarially equivalent
straight life annuity commencing at the Participant's Normal Retirement Age
under the Current Stated Benefit formula in effect after the latest Fresh-Start
Date, using the actuarial assumption in effect after the latest Fresh-Start
Date, using the actuarial assumptions in effect under the Current Stated Benefit
formula in effect on the latest Fresh-Start Date.
Notwithstanding the above, if in the immediately preceding Plan Year this Plan
did not satisfy the safe harbor for target benefit plans in Section
1.401(a)(4)-8(b)(3) of the Federal Income Tax Regulations or was not a Prior
Safe Harbor Plan, the Frozen Accrued Stated Benefit for any Participant in the
Plan, determined for the next Plan Year during which Section 1.401(a)(4)-8(b)(3)
of the Federal Income Tax Regulations is satisfied until the year following the
next Fresh-Start Date, if any, will be zero.
5.4(e)(6) MAXIMUM EXCESS ALLOWANCE. The Maximum Excess Allowance is
equal to the lesser of the Base Benefit Percentage or
(1) for a Plan with a Unit Benefit Formula, the Applicable
Factor determined from Table A in Exhibit B to the Adoption Agreement, and
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(2) for a Plan with a Fixed Benefit Formula, 35 times the
Applicable Factor determined from Table A or Table B in Exhibit B to the
Adoption Agreement.
5.4(e)(7) OVERALL PERMITTED DISPARITY LIMIT. If for any Plan Year
this Plan benefits any Participant who also benefits under another qualified
plan or simplified employee pension plan maintained by the Employer that
provides for permitted disparity (or imputes permitted disparity), the Current
Stated Benefit for all Participants under this Plan will be equal to the Excess
Benefit Percentage set forth in the Adoption Agreement multiplied times
(1) for a Plan with a Unit Benefit Formula, the Participant's
total Average Annual Compensation times the Participant's total Years of
Projected Participation under the Plan up to the maximum total Years of
Projected Participation specified in the Adoption Agreement, and
(2) for a Plan with a Fixed Benefit Formula, the Participant's
total Average Annual Compensation (prorated for years less than 35).
If this paragraph is applicable, this Plan will have a Fresh-Start Date on the
last day of the Plan Year preceding the Plan Year in which this paragraph is
first applicable. In addition, if in any subsequent Plan Year this Plan no
longer benefits any Participant who also benefits under another plan of the
Employer, this Plan will have a Fresh-Start Date on the last day of the Plan
Year preceding the Plan Year in which this paragraph is no longer applicable.
5.4(e)(8) PRIOR SAFE HARBOR PLAN. Prior Safe Harbor Plan means a
Plan adopted and in effect on September 19, 1991, that satisfied the applicable
nondiscrimination requirements for target benefit plans on that date and in all
prior periods (taking into account no amendments of the Plan after September 19,
1991, other than amendments necessary to satisfy Code Section 401(1)).
5.4(e)(9) YEAR OF PARTICIPATION - means each Year of Service as
determined in the same manner as a Year of Service for vesting purposes)
completed after the Participant first becomes a Participant in this Plan or the
Pre-Existing Plan.
5.4(e)(10) YEARS OF PROJECTED PARTICIPATION. For purposes of
determining a Participant's Current Stated Benefit, a Participant's total Years
of Projected Participation under the Plan is the sum of the Participant's total
number of Years of Participation under this Plan for the years this Plan
consecutively satisfies the safe harbor for target benefit plans in Section
1.401(a)(4)-8(b)(3) of the Federal Income Tax Regulations or was a Prior Safe
Harbor Plan, if applicable, projected through the later of the end of the Plan
Year in which the Participant attains Normal Retirement Age or the end of the
current Plan Year. For purposes of determining a Participant's total Years of
Projected Participation, only those current and prior
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years during which a Participant was eligible to receive a contribution under
the Plan will be taken into account.
5.5 ROLLOVER CONTRIBUTIONS.
5.5(a) STANDARD OPTION - An Eligible Employee may contribute on his or her
own behalf (or elect a direct transfer of) a Rollover Contribution of the Fund,
provided (1) such contribution shall be made (or transferred) in cash or in a
form which is acceptable to the Trustee, (2) such contribution shall be made in
accordance with such rules as the Plan Administrator and the Trustee deem
appropriate under the circumstances, and (3) if so specified in the Adoption
Agreement, no Rollover Contribution may be made prior to the Entry Date on which
the Eligible Employee becomes a Participant in this Plan.
5.5(b) ALTERNATIVE - The Employer may specify in the Adoption Agreement
that no Rollover may be made.
5.6 NO EMPLOYEE OR MATCHING CONTRIBUTIONS. Unless this Plan is adopted as a
401(k) Plan which permits Employee Contributions, no nondeductible employee
contributions or matching contributions (as defined in Code Section 401(m))
shall be made to this Plan after the Plan Year in which this Plan is adopted by
the Employer. Any nondeductible employee contributions and matching
contributions made under a Pre-Existing Plan or under this Plan (in accordance
with the preceding sentence) for Plan Years beginning after December 31, 1986
shall be subject to the nondiscrimination limitations under Code Section 401(m)
as set forth in Section 7.5.
5.7 NO DEDUCTIBLE VOLUNTARY EMPLOYEE CONTRIBUTIONS. No voluntary deductible
employee contributions shall be made to this Plan for a taxable year beginning
after December 31, 1986. Any voluntary deductible employee contributions made
under a Pre-Existing Plan prior to such date shall be maintained in a separate
account under this Plan. Such account shall be nonforfeitable at all times and
shall share in the Fund Earnings in the same manner as described in Section 6.2.
No part of such account shall be used to purchase life insurance. Subject to
Section 10, JOINT AND SURVIVOR ANNUITY REQUIREMENT (if applicable), a
Participant may withdraw any part of the Participant's voluntary deductible
employee contribution account by making a written application to the Plan
Administrator.
5.8 GENERAL RULES APPLICABLE TO ALL CONTRIBUTIONS.
5.8(a) LIMITATIONS ON CONTRIBUTIONS. The contributions made under this
Section 5 and the allocation of those contributions under Section 6 shall be
subject to the limitations set forth in the Adoption Agreement, this Section 5
and Section 7.
5.8(b) CODE Section 415. The contributions for any Plan Year shall not
(based on the Employer's understanding of the facts at the time the contribution
is made) exceed the total
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amount allocable for such year among the Accounts of all Participants in light
of the restrictions in Code Section 415 as set forth in Section 7.2. If a
suspense account as described in Section 7.2(b) is in existence at any time
during a particular Limitation Year (1) no Employer Contribution shall be made
for such Limitation Year if (based on the Employer's understanding of the facts
at the time the contribution is made) the allocation of the amount in such
suspense account would be precluded by Code Section 415 for such Limitation Year
and (2) if this Plan is adopted as a Money Purchase Pension Plan or a Target
Benefit Pension Plan, the Employer Contribution required under this Section 5
shall be reduced by the amount in such suspense account.
5.8(c) CODE Section 416. If this Plan is a Top-Heavy Plan (as defined in
Section 12) for any Plan Year, the minimum allocation required under Code
Section 416 shall be made in accordance with Section 12.
5.8(d) LEASED EMPLOYEES. Contributions or benefits which are provided by
a leasing organization on behalf of a Participant who is a Leased Employee and
which are attributable to services performed by such Participant for the
Employer or a Participating Affiliate shall be credited against the
contribution, if any, due to be allocated to such Participant under this Plan in
accordance with Code Section 414(n).
5.8(e) OWNER-EMPLOYEES.
5.8(e)(1) GENERAL. If this Plan provides contributions or benefits
for one or more Owner-Employees who control the Employer or a Participating
Affiliate, then
(i) if such Owner-Employee, or Owner-Employees, also control one or
more other trades or businesses,
(A) this Plan and the plans established for such other trades or
businesses shall, when viewed as a single plan, satisfy the applicable
requirements of Code Section 401(a) and Code Section 401(d) for the employees of
the Employer or the Participating Affiliate and such other trades or businesses,
and
(B) the employees of such other trades or businesses shall be
included in a plan which satisfies the applicable requirements of Code Section
401(a) and Code Section 401(d) and which provides contributions and benefits
which are at least as favorable as those provided under this Plan for such
Owner-Employees, or
(ii) if such Owner-Employee is covered as an owner-employee (within
the meaning of Code Section 401(c)(3) under the plans of two or more other
trades or businesses which such Owner-Employee does not control, then the
contributions or benefits provided under this Plan must be at least as favorable
as those provided for such Owner-Employee under the most favorable plan of such
other trade or business.
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5.8(e)(2) CONTROL. For purposes of this Section 5.8(e), an
Owner-Employee, or two or more such Owner-Employees, shall be considered to
control a trade or business if such Owner-Employee, or such Owner-Employees
together.
(i) own the entire interest in an unincorporated trade or business,
or
(ii) in the case of a partnership, own more than 50% of either the
capital interest or the profits interest in such partnership. Such
Owner-Employee, or such Owner-Employees, shall be treated as owning any interest
in a partnership which is owned, directly or indirectly, by a partnership which
is controlled by such Owner-Employee, or such Owner-Employees, within the
meaning of clause (ii).
SECTION 6. ALLOCATIONS TO ACCOUNTS
6.1 ESTABLISHMENT AND MAINTENANCE OF ACCOUNTS. An Account shall be established
and maintained for each Participant under the Plan and the Plan Administrator
shall establish reasonable and nondiscretionary procedures under which (a) any
Forfeitures, insurance premium payments, loans, withdrawals, distributions and
other charges properly allocable to such Account shall be debited from such
Account and (b) any insurance contract dividends, insurance contract surrender
proceeds, loan repayments and other amounts properly allocable to such Account
(other than amounts described in Section 6.2 and Section 6.3) shall be credited
to such Account.
6.2 ALLOCATION OF FUND EARNINGS.
6.2(a) GENERAL. As of each Valuation Date the fair market value of the
Fund and the Fund Earnings for the period which ends on such Valuation Date
shall be determined. Such Fund Earnings shall be allocated (and posted) among
all Accounts in the proportion that the balance in each such Account (determined
in accordance with Section 6.2(b)) bears to the total balance in all such
Accounts in order that each Account shall proportionately benefit from any
earnings or appreciation in the value of the Fund assets in which such Account
is invested or proportionately suffer any losses or depreciation in the value of
the Fund assets in which such Account is invested. Subject to Section 13, each
Participant shall have a ratable interest in all assets of the Fund.
6.2(b) ALLOCATION PROCEDURES. The Plan Administrator shall establish
nondiscretionary allocation procedures for purposes of the allocation of Fund
Earnings under Section 6.2(a), which procedures shall be set forth in writing
with the records of this Plan. If so specified in such procedures, the balance
in each Account shall be determined after adjusting for all or a portion of the
contributions and other amounts credited to or debited from such Account since
the preceding Valuation Date. Further, if so provided in such allocation
procedures, Fund Earnings shall not be allocated to any Forfeiture or to the
balance in any suspense account described in Section 7.2(b).
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6.3 ALLOCATION OF CONTRIBUTIONS AND FORFEITURES. Subject to the limitations in
Section 7, the Forfeitures (and any amount deemed to be a Forfeiture under the
terms of this Plan) and the contributions shall be allocated (and posted) in
accordance with the following rules:
6.3(a) PROFIT SHARING PLAN.
6.3(a)(1) NONINTEGRATED. If this Plain is adopted as a Profit
Sharing Plan and the nonintegrated allocation formula is specified in the
Adoption Agreement, the Forfeitures and the Employer Contribution for each Plan
Year shall be allocated (and posted) as of the last day of such Plan Year to the
Employer Account of each Active Participant in the same ratio that each Active
Participant's Compensation for such Plan Year bears to the total Compensation of
all Active Participants for such Plan Year.
6.3(a)(2) INTEGRATED. If this Plan is adopted as an Profit Sharing
Plan and the integrated allocation formula is specified in the Adoption
Agreement, the Forfeitures and the Employer Contribution shall be allocated (and
posted) as of the last day of each Plan Year to the Employer Account of each
Active Participant in accordance with the following:
(i) STEP ONE - First, the lesser of (A) the sum of the Employer
Contribution and Forfeitures for such Plan Year or (B) the Integration Amount
for such Plan Year shall be allocated to the Employer Account of each Active
Participant in the same ratio that the sum of the total Compensation and Excess
Compensation of each Active Participant for such Plan Year bears to the sum of
the total Compensation and Excess Compensation of all Active Participants for
such Plan Year.
(ii) STEP TWO - Second, the remaining Employer Contribution and the
Forfeitures, if any, for such Plan Year shall be allocated to the Employer
Account of each Active Participant (whether or not he or she had Excess
Compensation) in the same ratio that each Active Participant's total
Compensation for such Plan Year bears to the total Compensation of all Active
Participants for such Plan Year.
(iii) SPECIAL DEFINITIONS - For purpose of this Section 6.3(a)(2),
(A) "Integration Amount" means the product of (1) the total
Compensation and the total Excess Compensation of all Active Participants and
(2) the Integration Percentage specified in the Adoption Agreement, but in no
event shall the integration Percentage exceed the Maximum Disparity Rate for any
Plan Year beginning after December 31, 1988.
(B) "Excess Compensation" means the amount, if any, of a
Participant's Compensation for such Plan Year which exceeds thee Integration
Level for such Plan Year.
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(iv) TOP-HEAVY. If this Plan is a Top-Heavy Plan for any Plan Year,
the allocation formula in Section 12.3(h)(1) shall apply in lieu of the formula
in this Section 6.3(a)(2) for such Plan Year.
6.3(b) MONEY PURCHASE PENSION PLAN. If this Plan is adopted as a Money
Purchase Pension Plan, the Forfeitures and the Employer Contribution actually
made under Section 5.2 (as adjusted, if applicable, in accordance with Section
12.3(h)(2) for a Top-Heavy Plan) shall be allocated (and posted) as of the last
day of each Plan Year to the Employer Account of each Active Participant in
accordance with the formula specified in the Adoption Agreement. If Forfeitures
are applied to reduce the Employer Contribution and the Forfeitures available
under Section 8.2(e) for any Plan Year exceed the contribution specified in the
Adoption Agreement for such Plan Year, such excess shall be held in a separate
account and shall be applied in full as a Forfeiture to offset such
contributions in the future until such account is exhausted under this Section
6.3(b). If Forfeitures are to be allocated to Active Participants, such
Forfeitures shall be allocated (and posted) to the Employer Account of each
Active Participant in the same ratio that such Active Participant's Compensation
for such Plan Year bears to the total Compensation of all such Active
Participants for such Plan Year.
6.3(c) 401(K) PLAN. If this Plan is adopted as a 401(k) Plan, Forfeitures
and contributions made under Section 5.3 shall be allocated (and posted) in
accordance with the following:
6.3(c)(1) ELECTIVE DEFERRALS AND EMPLOYEE CONTRIBUTIONS. Elective
Deferrals made on a Participant's behalf for the period ending on each Valuation
Date shall be credited to the Participant's Elective Deferral Account as of such
Valuation Date and the Employee Contributions made by a Participant for such
period shall be credited to the Participant's Employee Account as of such
Valuation Date.
6.3(c)(2) MATCHING CONTRIBUTIONS AND QUALIFIED MATCHING
CONTRIBUTIONS.
(i) ALLOCATION. Matching Contributions and Qualified Matching
Contributions made on a Participant's behalf shall be credited to the
Participant's Matching Account and Qualified Matching Account, respectively,
(A) STANDARD OPTION - as of the last day of each Plan Year or
(B) ALTERNATIVE - only as of each Allocation Date specified in
the Adoption Agreement.
(ii) FORFEITURES. Forfeitures attributable to Matching Accounts
shall be allocated or applied in accordance with the following rules; provided,
no Forfeitures attributable to Excess Aggregate Contributions under Section
7.5(d) shall be allocated to the Account of any Highly Compensated Employee:
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(A) FORFEITURES TO REDUCE MATCHING CONTRIBUTION (STANDARD
OPTION). Forfeitures attributable to Matching Accounts shall be applied to
reduce the Matching Contributions for the applicable Allocation Date (as
specified in Section 8.2 and the Adoption Agreement). If the Forfeitures exceed
the Matching Contribution specified in the Adoption Agreement for any Allocation
Date, such excess shall be held in a separate account and shall be applied in
full as a Forfeiture to offset Matching Contributions as of the next Allocation
Date (and succeeding Valuation Dates) until such account is exhausted under this
Section 6.3(c)(2).
(B) FORFEITURES TO BE ALLOCATED (ALTERNATIVE). If so specified
in the Adoption Agreement, Forfeitures attributable to Matching Accounts shall
be allocated (and posted)
(i) as of the last day of such Plan Year to the Matching
Account of each Active Participant in the same ratio that such Active
Participant's Compensation for such Plan Year bears to the total Compensation of
all such Active Participants for such Plan Year, or
(ii) in accordance with the formula specified in the Adoption
Agreement for a nonstandardized Plan.
6.3(c)(3) QUALIFIED NONELECTIVE CONTRIBUTIONS. Nonelective
Contributions made on behalf of a Participant shall be credited to the
Participant's Qualified Nonelective Account
(i) STANDARD OPTION - as of the last day of each Plan Year or
(ii) ALTERNATIVE - only as of each Allocation Date specified in the
Adoption Agreement
6.3(c)(4) DISCRETIONARY EMPLOYER CONTRIBUTION.
(i) ALLOCATION. As of the last day of each Plan Year, the Employer
Contribution, if any, for such Plan Year shall be allocated (and posted) to the
Employer Account of each Active Participant
(A) STANDARD OPTION - in the nonintegrated method described in
Section 6.3(a)(1).
(B) ALTERNATIVE - if so specified in the Adoption Agreement, in
the integrated method described in Section 6.3(a)(2).
(ii) FORFEITURES. Forfeitures attributable to Employer Accounts
shall be allocated or applied in accordance with the following:
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(A) STANDARD OPTION. Forfeitures attributable to Employer
Accounts shall be allocated (and posted) as of the last day of each Plan Year to
the Employer Account of each Active Participant in the same manner as the
Employer Contribution under Section 6.3(c)(4)(i).
(B) ALTERNATIVE - if so specified in the Adoption Agreement,
Forfeitures attributable to Employer Accounts shall be
(i) applied to reduce Matching Contributions,
Qualified Matching Contributions and Qualified Nonelective Contributions for the
applicable Allocation Date (as specified in Section 8.2 and the Adoption
Agreement) and succeeding Allocation Dates, if necessary, or
(ii) allocated (and posted) in accordance with the formula
specified in the Adoption Agreement for a nonstandardized Plan.
6.3(d) TARGET BENEFIT PENSION PLAN. If this Plan is adopted as a Target
Benefit Pension Plan, the Forfeitures and the Employer Contribution actually
made under Section 5.4 for each Plan Year shall be allocated (and posted) as of
the last day of each Plan Year to the Employer Account of each Active
Participant as specified in the Adoption Agreement. The Forfeitures for each
Plan Year shall be applied to reduce the Employer Contribution for such Plan
Year. If Forfeitures for any Plan Year exceed the Employer Contributions
determined under Section 5.4 for such Plan Year, such excess shall be held in a
separate account and shall be held in a separate account and shall be applied in
full to offset Employer Contributions in the future until such account is
exhausted under this Section 6.3(d).
6.3(e) TOP HEAVY MINIMUM ALLOCATION. If this Plan is a Top-Heavy Plan (as
defined in Section 12), the minimum allocation required to be made under this
Plan under Section 12.3, if any, shall be allocated (and posted) as of the last
day of this Plan Year (1) to the Employer Account of each Participant who is not
an Active Participant but for whom a minimum allocation is required under
Section 12.3 and (2) to each Active Participant for whom a minimum allocation is
required to be made in this Plan under Section 12.3 to the extent such minimum
allocation is not otherwise satisfied by the allocation under this Section 6.3.
If this Plan is adopted as a Profit Sharing Plan, the minimum allocation may be
made by reallocating the Employer Contribution and Forfeitures allocated under
Section 6.3(a) in a manner which satisfies this Section 6.3(e) or by
contributing an additional amount which will be allocated in accordance with
this Section 6.3(e). If this Plan is adopted as a Money Purchase Pension Plan,
a Target Benefit Pension Plan or a 401(k) Plan, an additional Employer
Contribution shall be made to satisfy this Section 6.3(e).
6.3(f) ROLLOVER CONTRIBUTIONS. Rollover Contributions made by a
Participant during the period ending on each Valuation Date shall be credited to
the Participant's Rollover Contribution Account as of such Valuation Date.
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6.4 ALLOCATION REPORT. The Plan Administrator shall maintain records of the
allocations and adjustments made to Accounts under this Section 6 and shall at
least annually prepare and forward to each such Participant and Beneficiary a
statement which shows the new balance in such person's Account.
6.5 ALLOCATION CORRECTIONS. If an error or omission is discovered in any
Account, then as of the first Valuation Date in the Plan Year in which the error
or omission is discovered, the Plan Administrator shall make (and post) an
adjustment to such Account as the Plan Administrator deems necessary to remedy
in an equitable manner such error or omission.
SECTION 7. STATUTORY LIMITATIONS ON ALLOCATIONS
7.1 EFFECTIVE DATE. Except as otherwise expressly provided, this Section 7
shall be effective retroactive to Plan Years beginning on or after January 1,
1987.
7.2 LIMITATIONS ON ANNUAL ADDITIONS UNDER CODE Section 415.
7.2(a) SPECIAL DEFINITIONS. For purposes of this Section 7.2, the terms
defined in this Section 7.2(a) shall have the meanings shown opposite such
terms.
7.2(a)(1) ANNUAL ADDITIONS - means for each Participant for any
Limitation Year
(i) the sum of the employer contributions, forfeitures, and
nondeductible employee contributions creditable (without regard to the
application of this Section 7.2) to the Participant's account under this Plan or
under any other defined contribution plan (including a Master or Prototype Plan
and any defined benefit plan which provides for employee contributions)
maintained by the Employer for such Limitation Year; and for this purpose, any
Excess Amount allocated under Section 7.2(b), any Excess Elective Deferrals
under Section 7.3 (unless such excess is distributed by the deadline set forth
in Section 7.3(d)), any Excess Contributions under Section 7.4 and any Excess
Aggregate Contributions under Section 7.5 shall be considered Annual Additions
for such Limitation Year;
(ii) amounts allocated on behalf of such Participant after March 31,
1984 to an individual medical account (as defined in Code Section 415(1)(2)
which is part of a pension or annuity plan maintained by the Employer; and
(iii) amounts derived from contributions paid or accrued after
December 31, 1985 in taxable years ending after such date which are attributable
to post-retirement medical benefits allocated to the separate account of a key
employee (as defined in Code Section 419A(d)(3) under a welfare benefit fund (as
described in Code Section 419(e)) maintained by the Employer; and
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(iv) allocations under a simplified employee pension (as defined in
Code Section 408(k).
7.2(a)(2) COMPENSATION - means for a Self-Employed Individual, such
individual's Earned Income, and for each other Employee
(i) STANDARD OPTION - compensation reportable on Form W-2 as
defined in Section 2.10(a)(1), or
(ii) ALTERNATIVE - if so specified in the Adoption Agreement,
(A) compensation subject to withholding as defined in Section
2.10(a)(2)(i), or
(B) the Employee's wages, salaries, 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 includable in gross income during the Limitation Year (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 Section 1.62-2(c) of the Federal Income Tax
Regulations). Compensation shall not include the following:
(i) Employer contributions to a plan of deferred compensation
which are not includable in the Participant's gross income for the taxable year
in which contributed, or Employer contributions under any simplified employee
pension plan, or any distributions from a plan of deferred compensation;
(ii) amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by the Participant
either becomes freely transferable or is no longer subject to a substantial risk
of forfeiture;
(iii) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option; and
(iv) other amounts which receive 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 excludable from the gross
income of the Participant).
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For purposes of applying the limitations of this Section 7.2, an Employee's
Compensation for Limitation Years beginning on and after the Final Compliance
Date shall not include any Compensation which is accrued for such Limitation
Year.
However, for purposes of applying the limitations of this Section 7.2 to a
Participant in a defined contribution plan who is permanently and totally
disabled (as defined in Code Section 22(e)(3)), the term "Compensation" shall
mean the compensation such Participant would have received for the Limitation
Year if the Participant had been paid at the Participant's rate of Compensation
(as defined in this Section 7.2(a)(2)) paid immediately before becoming
permanently and totally disabled, and, further, such imputed compensation for
the disabled Participant may be taken into account only if the Participant is
not a Highly Compensated Employee and contributions made on behalf of such
Participant are nonforfeitable when made.
7.2(a)(3) DEFINED BENEFIT FRACTION - means a fraction, (i) the
numerator of which shall be the sum of the Participant's Projected Annual
Benefits under all defined benefit plans (whether or not terminated) maintained
by the Employer, and (ii) the denominator of which shall be the lesser of
(A) 125% of the dollar limitation determined for the Limitation Year under Code
Section 415(b) and Section 415(d) or (B) 140% of the Participant's Highest
Average Compensation, including any adjustments under Code Section 415(b).
However, if the Participant was a participant as of the first day of the first
Limitation Year beginning after December 31, 1986 in one or more defined benefit
plans maintained by the Employer which were in existence on May 6, 1986 and
which individually and in the aggregate satisfied the requirements of Code
Section 415 for all Limitation Years beginning before January 1, 1987, the
denominator of such fraction shall be not less than 125% of the sum of the
annual benefits under such plans which the Participant had accrued as of the end
of the last Limitation Year beginning before January 1, 1987 disregarding any
changes in the terms and conditions in the plan after May 5, 1986.
Notwithstanding the foregoing, "100%" shall be substituted for "125%" in any
Limitation Year for which this Plan is a Top-Heavy Plan (as defined in Section
12) unless otherwise specified in the Adoption Agreement.
7.2(a)(4) DEFINED CONTRIBUTION DOLLAR LIMITATION - means for each
Limitation Year the greater of (i) $30,000 or (ii) one-fourth of the defined
benefit dollar limitation under Code Section 415(b)(1) as in effect for such
Limitation Year.
7.2(a)(5) DEFINED CONTRIBUTION FRACTION - means a fraction, (i) the
numerator of which shall (subject to the adjustment rules set forth below) be
the sum of the Annual Additions credited to the Participant's accounts under all
defined contribution plans (whether or not terminated) maintained by the
Employer for the current and all prior Limitation Years (including the Annual
Additions attributable to the Participant's nondeductible employee contributions
to all defined benefit plans, whether or not terminated) maintained by the
Employer and the Annual Additions attribute to all welfare benefit funds (as
described in Code Section 419(e)) and all individual medical accounts (as
described in Code Section 415(1)(2)) maintained by the Employer and (ii) the
denominator of which shall be the sum to the Maximum Aggregate
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Amounts for the current and all prior Limitation Years of service with the
Employer (without regard to whether a defined contribution plan was maintained
by the Employer). The numerator of such fraction shall be adjusted if the
Participant was a participant as of the first day to the first Limitation Year
beginning after December 31, 1986 in one or more defined contribution plans
maintained by the Employer which were in existence on May 6, 1986 and the sum of
this fraction and the Defined Benefit Fraction would otherwise exceed 1.0 under
the terms of this Plan. The adjustment shall be made by taking an amount equal
to the product of (A) the excess of the sum of the fractions over 1.0, times (B)
the denominator of this fraction, and by permanently subtracting such product
from the numerator of this fraction. The adjustment shall be calculated using
the fractions as they would be computed as of the end of the last Limitation
Year beginning before January 1, 1987 and disregarding any changes in the terms
and conditions of the Plan made after May 5, 1986 but using the Code Section 415
limitation applicable to the first Limitation Year beginning on or after
January 1, 1987. The Annual Addition for any Limitation Year beginning before
January 1, 1987 shall not be recomputed to treat all employee contributions as
an Annual Addition.
7.2(a)(6) EMPLOYER - means 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 the regulations under Code Section
414(o).
7.2(a)(7) EXCESS AMOUNT - means the excess of a Participant's Annual
Additions for the Limitation Year over the Maximum Permissible Amount.
7.2(a)(8) HIGHEST AVERAGE COMPENSATION - means the Participant's
average Compensation for the three consecutive Plan Years of employment with the
Employer (without regard to whether such Plan Years were before the Effective
Date) that produces the highest average.
7.2(a)(9) LIMITATION YEAR - means
(i) STANDARD OPTION - the Plan Year or
(ii) ALTERNATIVE - the alternative 12 consecutive month period
specified in the Adoption Agreement.
All qualified plans maintained by the Employer must use the same Limitation
Year. If the Limitation Year is amended to a different 12 consecutive month
period, the new Limitation Year must begin on a date within the Limitation Year
in which the amendment is made.
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7.2(a)(10) MASTER OR PROTOTYPE PLAN - means a plan the form of which
is the subject of a favorable opinion letter from the Internal Revenue Service.
7.2(a)(11) MAXIMUM AGGREGATE AMOUNT - means for any Limitation Year
the lesser of (i) 125% of the dollar limitation determined under Code Section
415(c)(1)(A) or (ii) 35% of the Participant's Compensation for such year.
Notwithstanding the foregoing, "100%" shall be substituted for 125% in any
Limitation year for which this Plan is a Top-Heavy Plan (as defined in Section
12) unless otherwise specified in the Adoption Agreement.
7.2(a)(12) MAXIMUM PERMISSIBLE AMOUNT - means the lesser of (i) the
Defined Contribution Dollar Limitation or (ii) 25% of a Participant's
Compensation for the Limitation Year, provided,
(A) the compensation limitation referred to in clause (ii) shall
not apply to any contribution for medical benefits (within the meaning of Code
Section 401(h) or Section 419(A)(f)(2)) which is otherwise treated as an Annual
Addition under Code Section 415(l)(1) or Section 419(A)(d)(2); and
(B) 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 shall not exceed the Defined Contribution
Dollar Limitation multiplied by a fraction, the numerator of which shall be the
number of months in the short Limitation Year and the denominator of which shall
be 12.
7.2(a)(13) PROJECTED ANNUAL BENEFIT - means the annual retirement
benefit (adjusted to an actuarially equivalent straight life annuity if such
benefit is expressed in a form other than a straight life annuity or qualified
joint and survivor annuity) to which a Participant would be entitled under the
terms of a defined benefit plan assuming:
(i) the Participant will continue employment until normal
retirement age under the plan (or current age, if later), and
(ii) the Participant's Compensation for the current Limitation Year
and all other relevant factors used to determine benefits under the plan will
remain constant for all future Limitation Years.
7.2(b) LIMITATION IF NO OTHER PLANS. If an Participant does not
participate in, and has never participated in, another qualified plan maintained
by the Employer or a welfare benefit fund (as described in Code Section 419(e))
or individual medical account (as described in Code Section 415(l)(2))
maintained by the Employer which provides an Annual Addition as defined in
Section 7.2(a)(1) or a simplified employee pension (as defined in Code Section
408(k) maintained by the Employer, the amount of Annual Additions which actually
may be credited to the Account of any Participant for any Limitation Year shall
not exceed the lesser of the Maximum Permissible
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Amount or any other limitation set forth in this Plan. If the Employer
Contribution that would otherwise be credited to the Participant's Account would
cause the Annual Additions for the Limitation Year to exceed the Maximum
Permissible Amount, such amount shall be reduced so that the Annual Additions
actuary credited for the Limitation Year shall equal the Maximum Permissible
Amount. If pursuant to Section 7.2(f) or as a result of the allocation of
Forfeitures a Participant's Annual Additions under this Plan would result in an
Excess Amount, such Excess Amount shall be disposed of as follows:
7.2(b)(1) PROFIT SHARING PLAN. If this Plan is adopted as a Profit
Sharing Plan,
(i) such Excess Amount shall be deemed a Forfeiture which shall be
allocated and reallocated as provided in Section 6.3(a) subject to the
restrictions of this Section 7.2 among the Employer Accounts of the remaining
Active Participants until such amount has been allocated in its entirety; and
(ii) if the restrictions in this Section 7.2 apply before such
amount has been reallocated in its entirety, as the final allocation step such
unallocable Excess Amount shall be transferred to a suspense account.
7.2(b)(2) MONEY PURCHASE PENSION PLAN OR TARGET BENEFIT PENSION PLAN.
If this Plan is adopted as a Money Purchase Pension Plan or Target Benefit
Pension Plan,
(i) STANDARD OPTION - such Excess Amount shall be held unallocated
in a suspense account which shall be applied to offset future Employer
Contributions for Active Participants in the next Limitation Year (and in each
succeeding Limitation Year if necessary).
(ii) ALTERNATIVE - if so specified in the Adoption Agreement,
(A) for any Participant who is an Active Participant a the end
of the Limitation Year, such Excess Amount shall be held unallocated in a
suspense account which shall be applied to offset the Employer Contribution for
such Active Participant in the next Limitation Year (and in each succeeding
Limitation Year if necessary); and
(B) for any Participant who is not an Active Participant at the
end of such Limitation Year, such Excess Amount shall be held unallocated in a
suspense account which shall be applied to offset future Employer Contributions
for all remaining Active Participants in the next Limitation Year (and in each
succeeding Limitation Year if necessary).
7.2(b)(3) 401(K) PLAN. If this Plan is adopted as a 401(k) Plan, any
Elective Deferrals and Employee Contributions made by the Participant during the
Limitation Year (and, to the extent required under regulations, gains
attributable to such Employee Contributions) shall
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be refunded to the extent such refund would reduce the Excess Amount and, if an
Excess Amount still exists after such refund,
(i) any such Excess Amount which is attributable to discretionary
Employer Contributions shall be disposed of in the same manner as an Excess
Amount under a Profit Sharing Plan as described in Section 7.2(b)(1), and
(ii) any such Excess Amount which is attributable to a Matching
Contribution, Qualified Nonelective Contribution or Qualified Matching
Contribution shall be held unallocated in a suspense account which shall be used
to offset future Matching Contributions, Qualified Nonelective Contributions or
Qualified Matching Contributions in the next Limitation Year (and in each
succeeding Limitation Year if necessary).
7.2(b)(4) SUSPENSE ACCOUNT. A suspense account established pursuant
to this Section 7.2(b) shall not be subject to any allocation of Fund Earnings
under Section 6.2, and the balance of such account shall be returned to the
Employer in the event this Plan is terminated prior to the date such account has
been allocated in its entirety as a Forfeiture. In no event shall Excess
Amounts be distributed to Participants or former Participants.
7.2(c) LIMITATION IF OTHER DEFINED CONTRIBUTION MASTER OR PROTOTYPE PLAN.
This Section 7.2(c) applies if, in addition to this Plan, a Participant is
covered under another defined contribution Master or Prototype Plan maintained
by the Employer or a welfare benefit fund (as described in Code Section 419(e))
or an individual medical account (as described in Code Section 415(l)(2))
maintained by the Employer which provides for an Annual Addition as defined in
Section 7.2(a)(1) or a simple employee pension (as defined in Code Section
408(k)) maintained by the Employer during any Limitation Year. The Annual
Additions which may be credited to a Participant's Account under this Plan by
any such Limitation Year shall not exceed the Maximum Permissible Amount reduced
by the Annual Additions credited to a Participant's account under such other
defined contribution Master or Prototype Plan and welfare benefit funds for the
same Limitation Year.
7.2(c)(1) If for any limitation Year (1) the Employer also maintains
another defined contribution Paired Plan, (2) the Employer does not maintain any
other defined contribution Master or Prototype Plan (other than such Paired
Plan) and (3) a participant's Annual Additions under such Paired Plans would
result in an Excess Amount for such Limitation Year, the allocation adjustment
required to satisfy the limitations of Code Section 415 shall be made under such
Plans in the following order:
(i) STANDARD OPTION - first, under the Profit Sharing Plan, if any;
second under the Money Purchase Pension Plan, if any; third under the Target
Benefit Pension Plan, if any; and finally, under the 401(k) Plan, if any; or
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(ii) ALTERNATIVE - in the alternative order specified in the
Adoption Agreement.
7.2(c)(2) If the Annual Additions with respect to any Participant
under such other defined contribution Master or Prototype Plan (other than a
defined contribution Paired Plan) and welfare benefit funds maintained by the
Employer are less than the Maximum Permissible Amount and the Employer
Contribution that would otherwise be contributed or allocated to the
Participant's Account under this Plan would cause the Annual Additions for the
Limitation Year to exceed this limitation, the amount contributed or allocated
shall be reduced so that the Annual Additions under all such plans and funds for
the Limitation Year shall equal the Maximum Permissible Amount.
7.2(c)(3) If the Annual Additions with respect to the Participant
under such other defined contribution Master and Prototype Plan (other than a
defined contribution Paired Plan) and welfare benefit funds in the aggregate are
equal to or greater than the Maximum Permissible Amount, no amount shall be
credited to the Participant's Account under this Plan for the Limitation Year.
7.2(c)(4) If pursuant to Section 7.2(f) or as a result of the
allocation of Forfeitures a Participant's Annual Additions under this Plan and
such other defined contribution Master or Prototype Plan (other than a Paired
Plan) and welfare benefit funds would result in an Excess Amount for any
Limitation Year,
(i) the Excess Amount shall be deemed to consist of the Annual
Additions last allocated and the Annual Additions attributable to a welfare
benefit fund or an individual medical account shall be deemed to have been
allocated prior to all other Annual Additions, and
(ii) if an Excess Amount was allocated to a Participant on an
allocation date of this Plan which coincides with an allocation date of such
other Master or Prototype Plans, then the Excess Amount attributed to this Plan
shall be the product of
(A) the total Excess Amount allocated as of such date, times
(B) a fraction, the numerator of which shall be the Annual
Additions allocated to the Participant for the Limitation Year as of such date
under this Plan and the denominator of which is the total Annual Additions
allocated to the Participant for the Limitation Year as of such date under this
and all such other defined contribution Master or Prototype Plans.
7.2(c)(5) Any Excess Amount attributed to this Plan will be disposed
of in the manner described in Section 7.2(b).
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7.2(d) LIMITATION IF OTHER DEFINED CONTRIBUTION PLAN. If any Participant
is covered under another qualified defined contribution plan maintained by the
Employer which is not a Master or Prototype Plan, the Annual Additions which may
be credited to the Participants Account under this Plan for any Limitation Year
shall be limited
7.2(d)(1) STANDARD OPTION - as specified in Section 7.2(c) as though
the other plan was a Master or Prototype Plan or
7.2(d)(2) ALTERNATIVE - under the alternative method specified in the
Adoption Agreement for limiting the Annual Additions under this Plan.
7.2(e) LIMITATION IF OTHER DEFINED BENEFIT PLAN. If the Employer
maintains, or at any time maintained, a qualified defined benefit plan (other
than a defined benefit Paired Plan) covering any Participant in this Plan, the
sum of the Participant's Defined Benefit Fraction and Defined Contribution
Fraction shall not exceed 1.0 in any Limitation Year. The Annual Additions
which may be credited to any Participants Account under this Plan for any
Limitation Year shall be limited as specified in the Adoption Agreement. If the
Employer maintains a defined benefit Paired Plan, any adjustments to satisfy the
requirements of Code Section 415(e) shall be made only under such defined
benefit Paired Plan.
7.2(f) COMPENSATION FOR DETERMINATION OF MAXIMUM PERMISSIBLE AMOUNT.
Prior to determining a Participant's actual Compensation for the Limitation
Year, the Employer may determine the Maximum Permissible Amount for a
Participant on the basis of a reasonable estimation of the Participants
Compensation for the Limitation Year, and, if applicable, a reasonable
estimation of the amount of elective deferrals (within the meaning of Code
Section 402(g)(3)) that the Participant may make for the Limitation Year,
uniformly determined for all similarly situated Participants. As soon as is
administratively feasible after the end of the Limitation Year, the Maximum
Permissible Amount for the Limitation Year shall be determined on the basis of
the Participant's actual Compensation for the Limitation Year.
7.3 INDIVIDUAL LIMITATION ON ELECTIVE DEFERRALS UNDER CODE Section 402(G).
7.3(a) GENERAL. A Participant's Elective Deferrals under this Plan and
all other qualified plans, contracts and arrangements maintained by the Employer
or an Affiliate during any taxable year of the Participant shall not exceed the
dollar limitation under Code Section 402(g) in effect at the beginning of such
taxable year.
7.3(b) ELECTIVE DEFERRALS. For purposes of the dollar limitation under
Code Section 402(g) and this Section 7.3, the term "Elective Deferrals" shall
include all employer contributions made on behalf of a Participant pursuant to
an election to defer under any qualified cash or deferred arrangement as
described in Code Section 401(k), any simplified employee pension cash or
deferred arrangement as described in Code Section 402(h)(1)(B), any plan
described under Code Section 401(c)(18), and any salary
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reduction agreement for the purchase of an annuity contract under Code Section
403(b). However, the term shall not include Elective Deferrals which are
properly distributed to the Participant from this Plan under Section 7.2 or such
other plans or arrangements to correct for excess annual additions.
7.3(c) EXCESS ELECTIVE DEFERRALS. For purposes of this Section 7.3, the
term "Excess Elective Deferrals" means for each Participant the Elective
Deferrals that are includable in gross income under Code Section 402(g) to the
extent the Participant's Elective Deferrals for a taxable year exceed the dollar
limitations under Code Section 402(g) for such taxable year.
7.3(d) DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS. Notwithstanding any
other provision of this Plan restricting the timing of distributions, Excess
Elective Deferrals, plus any income and minus any loss allocable thereto, shall
be distributed no later than April 15 of any calendar year to Participants (1)
whose Excess Elective Deferrals for the preceding taxable year were assigned to
this Plan and (2) who claim (or are deemed to have claimed) such allocable
Excess Elective Deferrals for such taxable year in accordance with the claims
procedure set forth in Section 7.3(f).
7.3(e) DETERMINATION OF INCOME OR LOSS. A corrective distribution of
Excess elective Deferrals under this Section 7.3 shall include the income or
loss allocable to such Excess Elective Deferrals for the Participant's taxable
year in which such excess occurred and, if so specified in the Adoption
Agreement, for the period between the end of such taxable year and the date of
distribution ("gap period"). The income or loss for such taxable year and gap
period, if applicable, shall be determined in accordance with the regulations
under Code Section 402(g). In lieu of using the safe harbor method or the
alternative method in the regulations for allocating such income or loss, the
Plan Administrator may use any reasonable method for computing such income or
loss, provided that such method does not violate Code Section 401(a)(4), is used
consistently for all Participants and for all corrective distributions under the
Plan for the Plan Year, and is used by the Plan for allocating income or loss to
Participant's Accounts.
7.3(f) CLAIMS PROCEDURE.
7.3(f)(1) GENERAL. A Participant may assign to this Plan any Excess
Elective Deferral made during a taxable year by filing a claim with the Plan
Administrator on or before
(i) STANDARD OPTION - March 1 or
(ii) ALTERNATIVE - the alternative date for filing such claims
specified in the Adoption Agreement.
Unless otherwise provided in administrative procedures established by the Plan
Administrator, such claim shall be in writing, shall specify the dollar amount
of the Participant's Excess Elective Deferrals assigned to this Plan for such
taxable year, and shall be accompanied by the
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Participant's written statement that such amounts, if not distributed to such
Participant, will exceed the limit imposed on the Participant by Code Section
402(g) for the taxable year in which the deferral occurred.
7.3(f)(2) DEEMED CLAIM. A Participant automatically shall be deemed
to have filed a claim under this Section 7.3(f) to the extent that such Excess
Elective Deferrals occurred solely as a result of Elective Deferrals under this
Plan and any other plans of the Employer and the Affiliates, unless the Employer
specifies in the Adoption Agreement that such Excess Elective Deferrals shall be
distributed from one or more of such other plans.
7.4 LIMITATIONS ON ELECTIVE DEFERRALS FOR HIGHLY COMPENSATED EMPLOYEES UNDER
CODE SECTION 401(K).
7.4(a) SPECIAL DEFINITIONS. For purposes of this Section 7.4, the terms
defined in this Section 7.4(a) shall have the meanings shown opposite such
terms.
7.4(a)(1) ACTUAL DEFERRAL PERCENTAGE - means for each Plan Year for
each Participant who is an Eligible Employee at any time during such Plan Year
the ratio (expressed as a percentage and determined in accordance with Section
7.4(c)) of Employer Contributions made on behalf of such Participant for such
Plan Year to such Participant's Compensation for such Plan Year. The Actual
Deferral Percentage of a Participant who is an Eligible Employee, but does not
make an Elective Deferral and does not receive an allocation of a Qualified
Nonelective Contribution or a Qualified Matching Contribution, shall be zero.
7.4(a)(2) ADP (OR AVERAGE ACTUAL DEFERRAL PERCENTAGE) - means for
each Plan Year separately for the group of Participants who are Highly
Compensated Employees during such Plan Year and for the group of Participants
who are Nonhighly Compensated Employees during such Plan Year, the average
(expressed as a percentage) of the Actual Deferral Percentages of the
Participants in each such group who are Eligible Employees at any time during
such Plan Year.
7.4(a)(3) EMPLOYER CONTRIBUTIONS - means for purposes of determining
a Participant's Actual Deferral Percentage for each Plan Year, the sum of (i)
the Elective Deferrals made pursuant to the Participant's deferral election,
including Excess Elective Deferrals (as defined in Section 7.3(c)) of Highly
Compensated Employees, but excluding Excess Elective Deferrals of Nonhighly
Compensated Employees that arise solely from Elective Deferrals made under this
Plan or any other plans of the Employer and the Affiliates, and excluding
Elective Deferrals that are taken into account in the ACP test described in
Section 7.5(b) (provided the ADP test is satisfied both with and without
exclusion of such Elective Deferrals), and (ii) at the election of the Employer,
Qualified Nonelective Contributions and Qualified Matching Contributions.
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7.4(a)(4) EXCESS CONTRIBUTIONS - means for each Plan year for each
Highly Compensated Employee the excess of the aggregate amount of Employer
Contributions actually taken into account in computing the Average Deferral
Percentage of such Highly Compensated Employee for such Plan Year over the
maximum amount of such contributions permitted for such Plan Year under the ADP
limit as set forth in Section 7.4(b) (determined by reducing Elective Deferrals,
Qualified Nonelective Contributions and Qualified Matching Contributions made on
behalf of Highly Compensated Employees in order of their Actual Deferral
Percentages, beginning with the highest of such percentages).
7.4(a)(5) HIGHLY COMPENSATED EMPLOYEE - means any Employee who is
either a "highly compensated active employee" or a "highly compensated former
employee" as described below.
(i) A "highly compensated active employee" means any Employee who
performs services for the Employer or any Affiliate during the "determination
year" and who, during the "look-back year": (A) received compensation from the
Employer or any Affiliate in excess of $75,000 (as adjusted pursuant to Code
Section 415(d)); (B) received compensation from the Employer or any Affiliate 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 or
any Affiliate and received compensation during such year that is greater than
50% of the dollar limitation in effect under Code Section 415(b)(1)(A). The
term "highly compensated employee" shall also include: (1) an Employee who is
both described in the preceding sentence if the term "determination year" is
substituted for the term "look-back year" and is one of the 100 Employees who
received the most compensation from the Employer or any Affiliate during the
determination year; and (2) an Employee who is a 5% owner at any time during the
look-back year or determination year. If no officer has satisfied the
compensation requirement of clause (C) above during either a determination year
or look-back year, the highest paid officer for each such year shall be treated
as a Highly Compensated Employee.
(ii) A "highly compensated former employee" means any Employee who
separated (or was deemed to have separated) from service prior to the
determination year, performs no services for the Employer or any Affiliate
during the determination year, and was a highly compensated active employee for
either the separation year or any determination year ending on or after the
Employee's 55th birthday.
(iii) For purposes of this definition, the "determination year" shall
mean the Plan Year and the "look-back year" shall mean the 12-month period
immediately preceding the determination year.
(iv) If an Employee is, during a determination year or look-back
year, a Family Member of either a 5% owner who is an active or former Employee
or a Highly Compensated Employee who is one of the 10 most Highly Compensated
Employees ranked on
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the basis of compensation paid by the Employer during such year ("top-ten Highly
Compensated Employee"), then the Family Member and the 5% owner or top-ten
Highly Compensated Employees shall be treated as a single Employee receiving
compensation and Plan contributions or benefits equal to the sum of such
compensation and contributions or benefits of the Family Member and the 5% owner
or top-ten Highly Compensated Employee.
(v) The determination of who is a Highly Compensated Employee,
including the determination of the number and identity of Employees in the top
paid group, the top 100 Employees, the number of Employees treated as officers
and the compensation that is considered, shall be made in accordance with Code
Section 414(q) including any available operational transition rules and any
elections provided by the regulations under Code Section 414(q) and specified in
the Adoption Agreement.
7.4(b) ADP LIMIT. The ADP for Highly Compensated Employees for any Plan
Year shall not exceed
7.4(b)(1) the ADP for Nonhighly Compensated Employees for such Plan
Year multiplied by 1.25, or
7.4(b)(2) the ADP for Nonhighly Compensated Employees for such Plan
Year multiplied by 2, provided that the ADP for Highly Compensated Employees
does not exceed the ADP for Nonhighly Compensated Employees by more than 2
percentage points.
7.4(c) SPECIAL RULES.
7.4(c)(1) OTHER PLANS. The Actual Deferral Percentage for any
Participant who is a Highly Compensated Employee for the Plan Year and who is
eligible to participate in more than one cash or deferred arrangement maintained
by the Employer or an Affiliate shall be determined by treating all such
arrangements as a single arrangement. If a Highly Compensated Employee
participates in two or more cash or deferred arrangements that have different
plan years, all such arrangements ending with or within the same calendar year
shall be treated as a single arrangement. Notwithstanding the foregoing, plans
which are mandatorily disaggregated under regulations under Code Section 401(k)
shall be treated as separate.
7.4(c)(2) AGGREGATION. In the event that this Plan satisfies the
requirements of Code Section 410(b) only if aggregated with one or more other
plans, or if one or more other plans satisfy the requirements of such Code
section only if aggregated with this Plan, then this Section 7.4 shall be
applied by determining the Actual Deferral Percentages and ADP as if all such
plans were a single plan. For Plan Years beginning on and after the Final
Compliance Date, such plans may be aggregated only if they have the same plan
years and are not mandatorily disaggregated under regulations under Code Section
401(k).
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7.4(c)(3) FAMILY MEMBERS. For purposes of determining the Actual
Deferral Percentage of a Participant who is a 5% owner or one of the 10 most
highly paid Highly Compensated Employees and who is an Eligible Employee at any
time during Plan Year, the Employer Contributions and Compensation of such
Participant shall include the Employer Contributions and Compensation of his or
her Family Members, and such Family Members shall be disregarded as separate
Participants in determining the ADP both for Nonhighly Compensated Employees and
for Highly Compensated Employees.
7.4(c)(4) TIMING. For purposes of determining the Actual Deferral
Percentages for any Plan Year, Elective Deferrals, Qualified Nonelective
Contributions and Qualified Matching Contributions shall be considered made for
such Plan Year only if such contributions are allocated as of a date within such
Plan Year and are actually paid to the Fund by the last day of the 12 month
period immediately following such Plan Year.
7.4(c)(5) RECORDS. The Plan Administrator shall maintain records
which are sufficient to demonstrate that the Plan complied with the ADP limits,
including the extent to which Qualified Nonelective Contributions and Qualified
Matching Contributions are taken into account to satisfy such ADP limits.
7.4(c)(6) OTHER REQUIREMENTS. The determination and treatment of the
Elective Deferrals and Actual Deferral Percentage of any Participant shall
satisfy such other requirements as may be prescribed by the Secretary of the
Treasury.
7.4(d) DISTRIBUTION OF EXCESS CONTRIBUTIONS.
7.4(d)(1) GENERAL. Notwithstanding any other provision of this Plan
restricting the timing of distributions, Excess Contributions for any Plan Year,
plus any income and minus any loss allocable thereto, shall be distributed no
later than the last day of the immediately following Plan Year to Participants
on whose behalf such Excess Contributions were made. If such Excess
Contributions are distributed more than 2 1/2 months after the last day of the
Plan Year in which such excess occurred, a 10% excise tax shall be imposed under
code Section 4979 on the Employer with respect to such excess. Such
distributions shall be made to such Participants on the basis of the respective
portions of the Excess Contributions attributable to each such Participant.
Excess Contributions shall be allocated to Participants who are subject to the
Family Member aggregation rules under code Section 414(q)(6) in the manner
prescribed by the regulations under Code Section 401(k).
7.4(d)(2) DETERMINATION OF INCOME OR LOSS. A corrective distribution
of Excess Contributions under this Section 7.4 shall include the income or loss
allocable to such Excess Contributions for the Plan Year in which such excess
occurred and, if so specified in the Adoption Agreement, for the period between
the end of such Plan Year and the date of distribution ("gap period"). The
income or loss for such Plan Year and gap period, if
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applicable, shall be determined in accordance with the regulations under Code
Section 401(k). In lieu of using the safe harbor method or the alternative
method in the regulations for allocating such income or loss, the Plan
Administrator may use any reasonable method for computing such income or loss,
provided that such method does not violate Code Section 401(a)(4), is used
consistently for all Participants and for all corrective distributions under the
Plan for the Plan Year, and is used by the Plan for allocating income or loss to
Participant's Accounts.
7.4(d)(3) ORDER FOR DETERMINING EXCESS CONTRIBUTIONS. Excess
Contributions shall be determined after first determining Excess Elective
Deferrals under Section 7.3. The Excess Contributions which would otherwise be
distributed to the Participant shall be reduced, in accordance with regulations,
by the Excess Elective Deferrals distributed to the Participant under Section
7.3.
7.4(d)(4) ACCOUNTING FOR EXCESS CONTRIBUTIONS. Excess Contributions
shall be distributed proportionately from the Participant's Elective Deferral
Account on Qualified Matching Account in the same ratio that such Participant's
Elective Deferrals and Qualified Matching Contributions for the Plan Year in
which such Excess Contributions were made bears to the sum of the Participant's
Elective Deferrals and Qualified Matching Contributions for such Plan Year.
Excess Contributions shall be distributed from the Participant's Qualified
Nonelective Account only to the extent that such Excess Contributions exceed the
balance in the Participant's Elective Deferral Account and Qualified Matching
Account. Notwithstanding the foregoing, Excess Contributions may be distributed
from the applicable subaccounts in accordance with procedures established by the
Plan Administrator provided such procedures do not result in discrimination in
favor of Highly Compensated Employees which would be prohibited under Code
Section 401(a)(4).
7.4(e) RECHARACTERIZATION. If the Employer specifies in the Adoption
Agreement that Excess Contributions may be recharacterized, a Participant may
elect to treat Excess Contributions as an amount distributed to the Participant
and then contributed as an Employee Contribution to the Plan. Any such Excess
Contribution which is so recharacterized as an Employee Contribution shall
remain nonforfeitable and shall thereafter be subject to the same distribution
restrictions applicable to Elective Deferrals under Section 9.2(b). Excess
Contributions shall not be recharacterized by a Participant to the extent that
such amounts, in combination with other Employee Contributions, would exceed any
limits on Employee Contributions set forth in the Plan or in the Adoption
Agreement.
Any such recharacterization must occur no later than 2 1/2 months after the end
of the Plan Year in which such Excess Contribution occurred and shall be deemed
to occur no earlier than the date on which the last Highly Compensated Employee
is informed in writing of the amount recharacterized and the consequences of
such recharacterization. Any Excess Contributions which are so recharacterized
shall be taxable to the Participant for the taxable Year in which the
Participant would have received such amount in cash but for the deferral
election.
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7.5 LIMITATIONS ON EMPLOYEE CONTRIBUTIONS AND MATCHING CONTRIBUTIONS UNDER CODE
SECTION 401(m).
7.5(a) SPECIAL DEFINITIONS. For purposes of this Section 7.5, the terms
defined in this Section 7.5(a) shall have the meanings shown opposite such
terms.
7.5(a)(1) AGGREGATE LIMIT - means the sum of
(i) 125% of the greater (or lesser, if it would result in a larger
Aggregate Limit) of
(A) the ADP for Nonhighly Compensated Employees under the plan
subject to Code Section 401(k) for the plan year or
(B) the ACP for Nonhighly Compensated Employees under the plan
subject to Code Section 401(m) for the plan year beginning with or within the
plan year of the plan which is subject to Code Section 401(k) and
(ii) the lesser of
(A) 200% of such ADP or ACP or
(B) two plus the lesser (or greater, if it would result in a
larger Aggregate Limit) of such ADP or ACP.
7.5(a)(2) ACP(OR AVERAGE CONTRIBUTION PERCENTAGE) - means for each
Plan Year separately for the group of Participants who are Highly Compensated
Employees during such Plan Year and for the group of Participants who are
Nonhighly Compensated Employees during such Plan Year, the average (expressed as
a percentage) of the Contribution Percentages of the Participants in each such
group who are Eligible Employees at any time during such Plan Year.
7.5(a)(3) CONTRIBUTION PERCENTAGE - means for each Plan Year for each
Participant who is an Eligible Employee at any time during such Plan Year, the
ratio (expressed as a percentage and determined in accordance with Section
7.5(c)) of such Participant's Contribution Percentage Amount for such Plan Year
to such Participant's Compensation for such Plan Year. The Contribution
Percentage of a Participant who is eligible to, but does not, make Employee
Contributions or Elective Deferrals and who, as a result of such failure to make
such contributions does not receive an allocation of a Matching Contribution or
Qualified Matching Contribution shall be zero.
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7.5(a)(4) CONTRIBUTION PERCENTAGE AMOUNT - means for each Plan Year
for each Participant who is an Eligible Employee at any time during such Plan
Year the sum of
(i) the Employee Contributions, Matching Contributions and
Qualified Matching Contributions (to the extent not taken into account for
purposes of the ADP test described in Section 7.4) made on behalf of such
Participant for such Plan Year, other than Matching Contributions which are
forfeited either to correct Excess Aggregate Contributions or because the
contributions to which they relate are Excess Elective Deferrals, Excess
Contributions or Excess Aggregate Contributions.
(ii) the Forfeitures allocated to such Participant's Account for
such Plan Year which are attributable to Matching Contributions and Excess
Aggregate Contributions.
(iii) at the election of the Employer, the Qualified Nonelective
Contributions made on behalf of such Participant for such Plan Year (to the
extent not taken into account for purposes of the ADP test described in Section
7.4), and
(iv) at the election of the Employer, Elective Deferrals (provided
the ADP limit described in Section 7.4 is met both including and excluding the
Elective Deferrals that are used to meet the ACP limit).
7.5(a)(5) EMPLOYEE CONTRIBUTION - means for purposes of determining a
Participant's Contribution Percentage Amount any contributions made by the
Participant which are included in gross income for the taxable year in which
made and which are maintained in a separate account to which earnings and losses
are allocated.
7.5(a)(6) EXCESS AGGREGATE CONTRIBUTION - means for each Plan Year
for each Highly Compensated Employee the excess of the aggregate Contribution
Percentage Amounts actually taken into account in computing the ACP of such
Highly Compensated Employee for such Plan Year over the maximum Contribution
Percentage Amounts permitted for such Plan Year under the ACP limit as set forth
in Section 7.5(b) (determined by reducing contributions and Forfeitures on
behalf of Highly Compensated Employees in order of their Contribution
Percentages, beginning with the highest of such percentages).
7.5(a)(7) MATCHING CONTRIBUTION - means for purposes of determining a
Participant's Contribution Percentage Amount any Employer contribution made to
this Plan or any other defined contribution plan on account of an Employee
Contribution or Elective Deferral made by or on behalf of the Participant under
a plan maintained by the Employer.
7.5(b) ACP LIMIT. The ACP for Participants who are Highly Compensated
Employees for any Plan Year shall not exceed
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7.5(b)(1) the ACP for Participants who are Nonhighly Compensated
Employees for such Plan Year multiplied by 1.25, or
7.5(b)(2) the ACP for Participants who are Nonhighly Compensated
Employees for such Plan Year multiplied by 2, provided that the ACP for
Participants who are Highly Compensated Employees does not exceed the ACP for
Participants who are Nonhighly Compensated Employees by more than 2 percentage
points.
7.5(c) SPECIAL RULES.
7.5(c)(1) MULTIPLE USE. For Plan Years beginning after the Final
Compliance Date, if
(i) one or more Highly Compensated Employees participates both in a
plan with a qualified cash or deferred arrangement which is subject to the ADP
limitations under Code Section 401(k) as described in Section 7.4 and in a plan
which is subject to the ACP limitations under Code Section 401(m) as described
in this Section 7.5,
(ii) the sum of the ADP of the eligible Highly Compensated Employees
in the plan subject to Code Section 401(k) and the ACP of the eligible Highly
Compensated Employees in the plan subject to Code Section 401(m) exceeds the
Aggregate Limit, and
(iii) both the ADP and the ACP of the eligible Highly Compensated
Employees in such plans exceed 125% of the ADP or ACP respectively of the
eligible Nonhighly Compensated Employees in such plans,
then the Contribution Percentages of the Highly Compensated Employees who
participate in both such plans shall be reduced (beginning with the highest of
such percentages) so that the Aggregate Limit for such plans is not exceeded.
Any such reduction shall be treated as an Excess Aggregate Contribution. The
determination of the limitations under this special rule shall be made after any
corrections required to meet the ADP limits and the ACP limits and in accordance
with the regulations under Code Section 401(m).
7.5(c)(2) OTHER PLANS. The Contribution Percentage for any
Participant who is a Highly Compensated Employee for the Plan Year and who is
eligible to participate in more than one plan maintained by the Employer or an
Affiliate to which "employee contributions" (within the meaning of Code Section
401(m)) or "matching contributions" (as described in Code Section 401(m)(4)) are
made shall be determined by treating all such plans as one plan. If a Highly
Compensated Employee participates in two or more such plans that have different
plan years, all such plans ending with or within the same calendar year shall be
treated as a single plan. Notwithstanding the foregoing, plans which are
mandatorily disaggregated under regulations under Code Section 401(m) shall be
treated as separate.
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7.5(c)(3) AGGREGATION. In the event that this Plan satisfies the
requirements of Code Section 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 7.5 shall be
applied by determining the Contribution Percentages and ACP as if all such plans
were a single plan. For Plan Years beginning on and after the Final Compliance
Date, such plans may be aggregated only if they have the same plan years and
they are not mandatorily disaggregated under regulations under Code Section
401(m).
7.5(c)(4) FAMILY OF MEMBERS. For purposes of determining the
Contribution Percentage of a Participant who is a 5% owner or one of the 10 most
highly paid Highly Compensated Employees, the Contribution Percentage Amounts
and compensation of such Participant shall include the Contribution Percentage
Amounts and Compensation of his or her Family Members, and such Family Members
shall be disregarded as separate Participants in determining the ACP both for
Participants who are Nonhighly Compensated Employees and for Participants who
are Highly Compensated Employees.
7.5(c)(5) TIMING. For purposes of determining the ACP for any Plan
Year, Employee Contributions shall be considered made in the Plan Year in which
they are actually contributed to the Fund and Matching Contributions (and, if
applicable, Qualified Matching Contributions and Qualified Nonelective
Contributions) shall be considered made for such Plan Year only if such
contributions are allocated as of a date within such Plan Year and are actually
paid to the Fund by the last day of the 12-month period immediately following
such Plan Year.
7.5(c)(6) RECORDS. The Plan Administrator shall maintain records
which are sufficient to demonstrate that the Plan complied with the ACP limits,
including the extent to which Elective Deferrals, Qualified Nonelective
Contributions and Qualified Matching Contributions are taken into account to
satisfy such ACP limits.
7.5(c)(7) OTHER REQUIREMENTS. 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.
7.5(d) DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS.
7.5(d)(1) GENERAL. Notwithstanding any other provision of this Plan
restricting the timing of distributions, Excess Aggregate Contributions for any
Plan Year, plus any income and minus any loss allocable thereto, shall be
forfeited (if otherwise forfeitable under the Plan) or distributed (if not
forfeitable) from the Accounts of Participants on whose behalf such Excess
Aggregate Contributions were made no later than the last day of the immediately
following Plan Year. If such Excess Aggregate Contributions are distributed
more than 21/2 months after the last day of the Plan Year in which such excess
occurred, a 10% excise tax shall be imposed under Code Section 4979 on the
Employer with respect to such excess. Excess Aggregate
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Contributions shall be allocated to Participants who are subject to the Family
Member aggregation rules under Code Section 414(q)(6) in the manner prescribed
by the regulations under Code Section 401(m).
7.5(d)(2) DETERMINATION OF INCOME OR LOSS. A corrective distribution
of Excess Aggregate Contributions under this Section 7.5 shall include the
income or loss allocable to such Excess Aggregate Contributions for the Plan
Year in which such excess occurred and, if so specified in the Adoption
Agreement, for the period between the end of such Plan Year and the date of
distribution ("gap period"). The income or loss for such Plan Year and gap
period, if applicable, shall be determined in accordance with the regulations
under Code Section 401(m). In lieu of using the safe harbor method or the
alternative method in the regulations for allocating such income or loss, the
Plan Administrator may use any reasonable method for computing such income or
loss, provided that such method does not violate Code Section 401(a)(4), is used
consistently for all Participants and for all corrective distributions under the
Plan for the Plan Year, and is used by the Plan for allocating income or loss to
Participant's Accounts.
7.5(d)(3) ORDER FOR DETERMINING EXCESS AGGREGATE CONTRIBUTIONS.
Excess Aggregate Contributions shall be determined after first determining
Excess Elective Deferrals under Section 7.3 and then determining Excess
Contributions under Section 7.4.
7.5(d)(4) ACCOUNTING FOR EXCESS AGGREGATE CONTRIBUTIONS. Excess
Aggregate Contributions shall be forfeited (if otherwise forfeitable) or
distributed (if not forfeitable) to the Highly Compensated Employee from the
Participant's Employee Account, Matching Account, Qualified Matching Account,
Qualified Nonelective Account and Elective Deferral Account in the same ratio
that the contributions made on the Participant's behalf to such account (to the
extent such contributions are used in the ACP test) for the Plan Year in which
such Excess Aggregate Contributions were made bears to the total of all such
contributions. Notwithstanding the foregoing, Excess Aggregate Contributions
may be distributed from the applicable subaccounts in accordance with procedures
established by the Plan Administrator provided such procedures do not result in
discrimination in favor of Highly Compensated Employees which would be
prohibited under Code Section 401(a)(4).
7.5(d)(5) ALLOCATION OF FORFEITURES. Amounts forfeited by Highly
Compensated Employees under this Section 7.5 shall be allocated or applied in
accordance with Section 6.3(c)(2); provided, no Forfeitures arising under this
Section 7.5 shall be allocated or applied in accordance with Section 6.3(c)(2);
provided, no Forfeitures arising under this Section 7.5 shall be allocated to
the Account of any Highly Compensated Employee.
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SECTION 8. VESTING AND FORFEITURES
8.1 DETERMINATION OF NONFORFEITABLE PERCENTAGE.
8.1(a) FULLY VESTED ACCOUNTS. Each Rollover Account, Employee Account,
Elective Deferral Account, Qualified Matching Account and Qualified Nonelective
Account shall be completely nonforfeitable at all times.
8.1(b) DEATH, DISABILITY AND RETIREMENT. The Employer Account and
Matching Account of each Participant who reaches Early Retirement Age or Normal
Retirement Age while an Employee shall become completely nonforfeitable on such
date. The Employer Account and Matching Account of each Participant who dies
while an Employee or who becomes Disabled while an Employee.
8.1(b)(1) STANDARD OPTION - shall become completely nonforfeitable on
such date.
8.1(b)(2) ALTERNATIVE - if so specified in the Adoption Agreement,
shall be determined in accordance with the vesting schedule under Section
8.1(c).
8.1(c) OTHER SEPARATION FROM SERVICE. Subject to Section 12.4, the
nonforfeitable percentage of the Employer Account and Matching Account of a
Participant other than a Participant described in Section 8.1(b) shall be based
on the Participant's Years of Service and on the following vesting schedule:
8.1(c)(1) STANDARD OPTION - the full and immediate vesting schedule.
8.1(c)(2) ALTERNATIVE - the alternative vesting schedule specified in
the Adoption Agreement;
provided, however, if the Participation Requirement (or the requirement to
receive an allocation of Employer contributions under a 401(k) Plan) consists of
a minimum period of service which exceeds one year, the full and immediate
vesting schedule shall automatically apply notwithstanding any election to the
contrary in the Adoption Agreement.
8.1(d) EMPLOYEE CONTRIBUTION WITHDRAWALS. No Forfeiture shall occur
solely as a result of a Participant's withdrawal of Employee Contributions.
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8.2 FORFEITURE AND SPECIAL REEMPLOYMENT RULES.
8.2(a) BUY BACK RULE (STANDARD OPTION).
8.2(a)(1) FORFEITURE. The forfeitable portion, if any, of the
Employer Account and Matching Account of a Participant who separates from
service shall become a Forfeiture on the earlier of
(i) the date as of which the Participant receives (or is deemed to
receive under Section 8.2(c)) a distribution of the Participant's entire
nonforfeitable Account balance derived from Employer Contributions, or
(ii) the date he or she has 5 consecutive Breaks in Service (6
consecutive Breaks in Service if the Alternative Maternity/Paternity Rule
apples).
If a Participant elects to have distributed less than the entire nonforfeitable
balance of the Participant's Employer Account and Matching Account, the part of
such accounts that shall be treated as a Forfeiture is the total forfeitable
portion of such Accounts multiplied by a fraction, the numerator of which is the
amount of the distribution from the Participant's Employer Account or Matching
Account and the denominator of which shall be the total nonforfeitable balance
of the Participant's Employer Account or Matching Account at the time of the
distribution.
Any such Forfeiture shall be allocated or applied in accordance with Section 6
on the Valuation Date specified in Section 8.2(e).
8.2(a)(2) REEMPLOYMENT. If a Participant receives a distribution and
resumes employment covered under this Plan before the Participant has 5
consecutive Breaks in Service (6 consecutive Breaks in Service if the
Alternative Maternity/Paternity Rule applies), the Employer shall restore to the
Participant's Employer Account and Matching Account an amount equal to the
dollar amount of the Forfeitures from such accounts if the Participant repays to
the Plan an amount equal to the dollar amount of the distributions from the
Participant's Employer Account and Matching Account in accordance with this
Section 8.2(a). Such repayment must be made before the earlier of (a) 5 years
after the first date on which the Participant is subsequently reemployed by the
Employer or a Participating Affiliate or (b) the date the Participant incurs 5
consecutive Breaks in Service (6 consecutive Breaks in Service if the
Alternative Maternity/Paternity Rule applies) following the date of the
distribution.
If a Participant whose nonforfeitable Account balance is zero is deemed to
receive a distribution under Section 8.2(c) and he or she resumes employment
covered under this Plan before he or she has 5 consecutive Breaks in Service (6
consecutive Breaks in Service if the Alternative Maternity/Paternity Rule
applies), the forfeitable portion of the Participant's Employer Account
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and Matching Account shall automatically be restored by the Employer upon the
Participant's reemployment.
Any amount restored by the Employer under this Section 8.2(a) shall be restored
upon repayment from the sources specified in Section 8.2(d). Such restored or
repaid amount shall not be treated as an Annual Addition under Section 7.2 and
shall be credit to the Participant's Employer Account and Matching Account in
the same proportion as the distribution was made from such accounts.
8.2(b) AUTOMATIC RESTORATION (ALTERNATIVE). This Section 8.2(b) shall
apply if the Employer specifies the use of the "Alternative to the Buy Back
Rule" in the Adoption Agreement.
8.2(b)(1) FORFEITURE. The forfeitable portion, if any, of the
Employer Account and Matching Account of a Participant who separates from
service shall become a Forfeiture on the earlier of
(i) the date as of which payment of the nonforfeitable percentage
of the Participant's Account derived from Employer contributions begins or is
deemed to begin under Section 8.2(c) or
(ii) the date he or she has 5 consecutive Breaks in Service (6
consecutive Breaks in Service if the Alternative Maternity/Paternity Rule
applies)
and such Forfeiture shall be allocated or applied in accordance with Section 6
on the allocation date specified in Section 8.2(e) unless he or she is
reemployed on or before such allocation date.
8.2(b)(2) REEMPLOYMENT. If a Participant is reemployed before the
Participant incurs 5 consecutive Breaks in Service (6 consecutive Breaks in
Service if the Alternative Maternity/Paternity Rule applies) but after the date
of a Forfeiture under Section 8.2(b)(1), the Employer shall restore to such
Participant as of the last day of the Plan Year in which he or she is reemployed
an amount equal to the dollar amount of such Forfeiture.
Any amount restored by the Employer under this Sections 8.2(b) shall be restored
from the sources specified in Section 8.2(d). Such restored amount shall not be
treated as an Annual Addition under Section 7.2 for such Plan Year. The
restored amount, together with any remaining balance of the nonforfeitable
portion of the Employer Account and Matching Account attributable to the
Participant's service prior to reemployment, shall be maintained thereafter as
separate special subaccounts of the Participant's Employer Account and Matching
Account (until such time as it becomes completely nonforfeitable or again
becomes a Forfeiture), and the dollar amount of the Participant's nonforfeitable
percentage in each such special subaccount thereafter shall be determined in
accordance with Formula A unless Formula B is specified in the Adoption
Agreement.
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(i) FORMULA A (STANDARD OPTION):
X = P(AB +D) - D
(ii) FORMULA B (ALTERNATIVE):
X = P(AB + (R x D)) - (R x D)
For purposes of these formulas:
X = The current dollar amount, if any, of the nonforfeitable percentage in
the Participant's special subaccount;
P = The Participant's current nonforfeitable percentage as determined
under Section 8.1;
AB = Such dollar amount, if any, as evidenced by the last balance posted to
the Participant's special subaccount;
D = The dollar amount previously paid to the Participant under Section 9
from the Participant's original Employer Account or Matching Account,
as applicable; and
R = The ratio of AB to the dollar amount, if any, posted to the
Participant's Employer Account or Matching Account, as applicable,
immediately after the distribution.
8.2(c) DEEMED DISTRIBUTION. If the nonforfeitable portion of a
Participant's Account balance derived from Employer and Employee contributions
is zero, the Participant shall be deemed to have received a distribution of the
nonforfeitable portion of the Participant's Account upon the Participant's
separation from service.
A Participant's nonforfeitable Account balance derived from Employee
contributions shall not include accumulated deductible employee contributions
within the meaning of Code Section 72(o)(5)(B) for Plan Years beginning prior to
January 1, 1989.
8.2(d) RESTORATION SOURCES. Any amount restored under this Section 8.2
shall be restored from the following sources in the following order: first,
from Forfeitures occurring in the Plan Year in which such amounts are restored,
if any; second, from Employer Contributions for such Plan Year, if any; third
from Fund Earnings for such Plan Year; and finally, from additional Employer
Contributions. However, at the election of the Employer, such amounts shall be
restored entirely from additional Employer Contributions.
8.2(e) DATE FORFEITURES APPLIED OR ALLOCATED. Any amounts which become a
Forfeiture under this Section 8.2 shall be allocated or applied as of the
allocation date specified in Section 6 which coincides with or immediately
follows the date such Forfeiture occurs, except that the Employer may specify in
the Adoption Agreement that Forfeitures which are applied to reduce
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Employer Contributions, Matching Contributions, Qualified Matching Contributions
or Qualified Nonelective Contributions shall be so applied as of the allocation
date for such contributions which immediately follows the last day of the Plan
Year in which such Forfeiture occurs.
8.2(f) IN-SERVICE DISTRIBUTIONS. The provisions of this Section 8.2(f)
shall apply if the Plan permits in-service distribution under Section 9.2.
If a distribution is made at a time when a Participant has a nonforfeitable
right to less than 100% of his or her Employer Account or Matching Account and
the Participant may increase the nonforfeitable percentage in such Account:
8.2(f)(1) A separate special subaccount of the Participant's Employer
Account and Matching Account shall be established to record the Participant's
interest in such accounts as of the time of the distribution; and
8.2(f)(2) At any relevant time the Participant's nonforfeitable
portion of each such special subaccount shall be determined in accordance with
the formula specified in Section 8.2(b).
SECTION 9. ACCOUNT DISTRIBUTION - GENERAL RULES
9.1 AFTER SEPARATION FROM SERVICE. Subject to the rules in this Section 9,
Section 10, Benefit Payment Forms - JOINT AND SURVIVOR ANNUITY REQUIREMENTS, and
Section 11, MINIMUM DISTRIBUTION REQUIREMENTS, the nonforfeitable portion of
each Participant's Account (as determined in accordance with Section 8) shall
not be payable to such Participant before he or she separates from service with
the Employer and all Affiliates.
9.1(a) TIMING. A Participant who has separated from service with the
Employer and all Affiliates
9.1(a)(1) STANDARD OPTION - may request a distribution of the
nonforfeitable portion of his or her Account as soon as practicable after such
separation from service.
9.1(a)(2) ALTERNATIVE - if so specified in the Adoption Agreement,
may not request a distribution of the nonforfeitable portion of his or her
Account until Normal Retirement Age, Early Retirement Age or Disability,
whichever is earlier.
9.1(b) REEMPLOYMENT. Except as required in Section 11, no payment shall
be made under this Section 9.1 if the Participant who separates from service is
reemployed as an Employee before payment is made. If a Participant is
reemployed as an Employee after payment of the nonforfeitable portion of the
Participant's Account has begun but before the entire balance attributable to
such nonforfeitable portion has been paid (or applied to purchase an annuity),
payments to the Participant from such balance shall be terminated on the date he
or she is so reemployed and no
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further payments shall be made to the Participant until her or she is
subsequently entitled to such payments in accordance with the terms of this
Plan.
9.1(c) $3500 CASHOUT. The nonforfeitable portion of a Participant's
Account shall be distributed in a single sum to such Participant (or to the
Participant's Beneficiary in the event of the Participant's death) as soon as
administratively practicable following the Participant's separation from service
with the Employer and all Affiliates for any reason if the nonforfeitable
portion of such Account is (and at the time of any prior distribution was) $3500
or less. Any such distributions made on or after January 1, 1993 shall be made
in accordance with any applicable rules regarding the period for providing
notice under Code Section 402(f) and for making direct rollover elections under
Code Section 401(a)(31).
9.1(d) CLAIM. Except as provided in this Section 9 and Section 11, no
payment shall be made until a written claim for such payment is filed with the
Plan Administrator on an Election Form. The Plan Administrator shall process
each such claim in accordance with the claims procedure described in the summary
plan description for this Plan. If no such claim is submitted and the
Participant does not defer payment pursuant to Section 9.1(e), payment may be
made as soon as the benefit is not immediately distributable (within the meaning
of Section 9.3) and shall, in any event, begin no later than 60 days following
the end of the Plan Year in which
9.1(d)(1) The Participant separates from service as an Employee;
9.1(d)(2) The Participant reaches age 65 or Normal Retirement Age, if
earlier, or
9.1(d)(3) Occurs the 10th anniversary of the year in which the
Participant commenced participation in the Plan, whichever occurs last.
9.1(e) ELECTION TO DEFER PAYMENT. If a Participant has separated from
service with the Employer and all Affiliates and the nonforfeitable portion of
the Participant's Account is (or at the time of any prior distribution was) more
than $3500, the Participant may defer distribution of that nonforfeitable
portion, but in no event beyond
9.1(e)(1) STANDARD OPTION - the Participant's Required Beginning Date
(as defined in Section 11)
9.1(e)(2) ALTERNATIVE - if so specified in the Adoption Agreement,
the later of the Participant's Normal Retirement Age or age 62.
The failure of a Participant and his or her Spouse, if applicable, to consent to
a distribution or make a written request to defer payment while a benefit is
immediately distributable (within the meaning of Section 9.3) shall be deemed to
be an election to defer commencement of payment of any
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benefit under this Section 9 until the benefit is no longer immediately
distributable or, if Section 9.1(e)(1) applies, until the Required Beginning
Date.
Nothing in this Section 9.1(e) shall prevent the Plan Administrator from paying
in the normal form a benefit which is not immediately distributable without
regard to whether the Participant and his or her Spouse consent to such
distribution, unless the Participant has requested a deferral pursuant to
Section 9.1(e)(2).
9.1(f) EARLY RETIREMENT AGE. If the Early Retirement Age includes both an
age and service requirement, any Participant who separates from service before
satisfying such age requirement, but after the Participant has satisfied the
service requirement, may request a distribution of the nonforfeitable portion of
his or her Account upon satisfaction of such age requirement.
9.1(g) DEATH. In the event of the Participant's death, the nonforfeitable
portion of the Participant's Account shall be payable to the Participant's
Beneficiary as soon as administratively practicable after the Participant's
death.
9.2 BEFORE SEPARATION FROM SERVICE. Subject to the rules in this Section 9,
Section 10, JOINT AND SURVIVOR ANNUITY REQUIREMENTS, and Section 11, MINIMUM
DISTRIBUTION REQUIREMENTS, the nonforfeitable portion of a Participant's Account
may be paid to the Participant before he or she separates from service with the
Employer and all Affiliates if so specified in the Adoption Agreement or by the
Board in accordance with Section 9.2(b)(2) or Section 9.2(e).
9.2(a) MONEY PURCHASE PENSION PLAN OR TARGET BENEFIT PENSION PLAN. If
this Plan is adopted as a Money Purchase Pension Plan or a Target Benefit
Pension Plan,
9.2(a)(1) STANDARD OPTION - except as provided in Section 9.2(d) or
(e), no distributions shall be made before a Participant separates from service
with the Employer and all Affiliates, or
9.2(a)(2) ALTERNATIVE - if so specified in the Adoption Agreement, a
Participant may request a distribution of all or a portion of the nonforfeitable
portion of the Participant's Account on or after he or she reaches Normal
Retirement Age without regard to whether he or she has separated from service.
9.2(b) 401(k) PLAN.
9.2(b)(1) DISTRIBUTION RESTRICTIONS. If this Plan is adopted as a
401(k) Plan, then, except as provided in this Section 9.2(b), a Participant's
Elective Deferral Account, Qualified Nonelective Account and Qualified Matching
Account shall not be distributable to the Participant
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or the Participant's Beneficiary earlier than upon the Participant's separation
from service with the Employer and all Affiliates, death, or Disability.
9.2(b)(2) TERMINATION OF PLAN OR DISPOSITION OF ASSETS OR SUBSIDIARY.
Notwithstanding Section 9.2(b)(1) and subject to the Participant and spousal
consent rules in Section 9.3 and Section 10, the Employer may, by action of its
Board make lump sum distributions (within the meaning of Code Section
401(k)(10)(B)(ii) of a Participant's Account, including the Participant's
Elective Deferral Account, Qualified Nonelective Account and Qualified Matching
Account in accordance with Code Section 401(k) by reason of
(i) the termination of the Plan without the establishment of
another defined contribution plan (other than an employee stock ownership plan
as defined in Code Section 4975(e) or Code Section 409 or a simplified employee
pension as defined in Code Section 408(k);
(ii) the disposition by the Employer or a Participating Affiliate to
an unrelated entity of substantially all of the assets (within the meaning of
Code Section 409(d)(2)) used by the Employer or such Participating Affiliate in
a trade or business of the Employer or a Participating Affiliate, if the
transferor continues to maintain this Plan after such disposition, but such
distributions shall be made only with respect to a Participant who continues
employment with the entity acquiring such assets; or
(iii) the disposition by the Employer or a Participating Affiliate
which is a corporation to an unrelated entity of interest in a subsidiary
(within the meaning of Code Section 409(d)(3)), if the transferor continues to
maintain this Plan after such disposition but such distributions shall be made
only with respect to a participant who continues employment with such former
subsidiary.
9.2(b)(3) HARDSHIP DISTRIBUTION.
(i) GENERAL. If the Employer specifies in the Adoption Agreement
that hardship distributions shall be permitted, a Participant may request a
hardship distribution before he or she separates from service from the
Participant's Elective Deferral Account (and, if applicable, from the
nonforfeitable portion of the other subaccounts of such Account specified in the
Adoption Agreement). The Plan Administrator shall grant such request if, and to
the extent that, the Plan Administrator determines that such distribution is
"necessary to satisfy an immediate and heavy financial need" of the Participant
as determined in accordance with this Section 92(b)(3). Any such request shall
be made in writing, shall set forth in detail the nature of such hardship and
the amount of the distribution needed as a result of such hardship, and shall
include adequate documentation of the type of financial need and the amount of
the need. If the Plan Administrator grants such request, such application shall
be processed and such distribution shall be made in a single sum as soon as
administratively practicable.
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(ii) SAFE HARBOR TEST FOR FINANCIAL NEED. An "immediate and heavy
financial need" shall mean one or more of the following, as specified in the
Adoption Agreement,
(A) expenses for medical care described in Code Section 213(d)
incurred by the Participant or the Participant's spouse or dependents (as
defined in Code Section 152) and amounts necessary for such individuals to
obtain such care,
(B) the purchase of (but not the mortgage payments for a
principal residence of the Participant,
(C) the payment of tuition and related educational fees for the
next 12 months of post-secondary education for the Participant or the
Participant's spouse, children or dependents (as defined in Code Section 152),
(D) the prevention of the eviction of the Participant from the
Participant's principal residence or the foreclosure on the mortgage of the
Participant's principal residence, or
(E) such other events as the Internal Revenue Service deems to
constitute an "immediate and heavy financial need" under Code Section 401(k).
(iii) SAFE HARBOR TEST FOR DISTRIBUTION NECESSARY TO SATISFY NEED. A
distribution shall be deemed to be "necessary" to satisfy an immediate and heavy
financial need only if all of the following requirements are satisfied:
(A) the distribution is not in excess of the amount of such
need, including any amounts necessary to pay any federal, state or local income
taxes or penalties reasonably anticipated to result from such withdrawal;
(B) the Participant has obtained all distributions (other than
hardship distributions) and all nontaxable loans currently available under this
Plan and all other plans maintained by the Employer or an Affiliate;
(C) the Participant's Elective Deferrals and Employee
Contributions under this Plan and elective deferrals and employee contributions
under all other plans maintained by the Employer or an Affiliate shall be
suspended for the 12-month period following the date of receipt of such hardship
distribution; and
(D) the Participant's Elective Deferrals under this Plan and
elective deferrals under all other plans maintained by the Employer or an
Affiliate for the Participant's taxable year immediately following the taxable
year in which such hardship distribution was
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made shall not exceed the applicable dollar limitation under Code Section 402(g)
for such following taxable year less the amount of the Participant's Elective
Deferrals under this Plan and elective deferrals under all such other plans for
the taxable year in which such hardship distribution was made.
(iv) ACCOUNT LIMITATIONS. For Plan Years beginning after
December 31, 1988, no hardship distribution shall be made under this Section
9.2(b)(3) to a Participant from
(A) the Participant's Qualified Nonelective Account,
(B) the Participant's Qualified Matching Account, or
(C) the Fund Earnings allocated to the Participant's Elective
Deferral Account
except to the extent of amounts credited to such Accounts as of the end of the
last Plan Year ending before July 1, 1989.
9.2(b)(4) DISTRIBUTIONS ON OR AFTER AGE 59-1/2. If the Employer
specifies in the Adoption Agreement that distributions shall be permitted on or
after age 59-1/2, a Participant may request a distribution of all or a portion
of the nonforfeitable portion of the subaccounts of the Participant's Account
specified in the Adoption Agreement at any time on or after he or she reaches
age 59-1/2. Any such request shall be made in writing on an Election Form and
such distribution shall be made in a single sum as soon as practicable in
accordance with such reasonable nondiscretionary procedures as the Plan
Administrator deems appropriate under the circumstances for the proper
administration of the Plan.
9.2(b)(5) EMPLOYER ACCOUNT AND MATCHING ACCOUNT. If so specified in
the Adoption Agreement, a Participant may request in accordance with reasonable
and nondiscriminatory procedures a distribution of all or a portion of the
nonforfeitable portion of the Participant's Employer Account and Matching
Account after a fixed number of years, the attainment of a stated age or upon
the occurrence of some prior event as specified in the Adoption Agreement.
9.2(c) PROFIT SHARING PLAN. If this Plan is adopted as a Profit Sharing
Plan, then, if so specified in the Adoption Agreement, a Participant may request
in accordance with reasonable and nondiscriminatory procedures a distribution of
all or a portion of the nonforfeitable portion of the Participant's Account
after a fixed number of years, the attainment of a stated age or upon the
occurrence of some prior event as specified in the Adoption Agreement.
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9.2(d) WITHDRAWALS FROM EMPLOYEE ACCOUNT.
9.2(d)(1) STANDARD OPTION. A Participant may request a withdrawal of
all or a portion of the Participant's Employee Account at any time. Any such
request shall be made in writing on an Election Form and such withdrawal shall
be made in a single sum as soon as administratively practicable in accordance
with such reasonable nondiscretionary procedures as the Plan Administrator deems
appropriate under the circumstances for the proper administration of this Plan.
9.2(d)(2) ALTERNATIVE. The Employer may specify in the Adoption
Agreement that withdrawals from Employee Accounts shall not be permitted before
the nonforfeitable portion of a Participant's Account otherwise becomes
distributable under this Section 9 or under Section 11 or may specify other
rules and conditions under which such withdrawals may be made.
Notwithstanding the foregoing, any portion of a Participant's Employee Account
which is attributable to recharacterized Excess Contributions under Section
7.4(e) may only be withdrawn in accordance with the rules set forth in Section
9.2(b) applicable to an Elective Deferral Account.
9.2(e) PLAN TERMINATION. If this Plan is terminated under Section
14.6 and if the Board so specifies in its written action effecting such
termination, distribution of the nonforfeitable portion of each Account shall be
made as soon as administratively practical after the Plan is terminated subject
to the rules in Section 9.2(b) and to Code Section 411.
9.3 CONSENT.
9.3(a) GENERAL. If the nonforfeitable portion of a Participant's Account
exceeds (or at the time of any prior distribution exceeded) $35,000 and such
Account is "immediately distributable", the Participant and the Participant's
Spouse, if any, (or where the Participant has died, the surviving Spouse, if
any) must consent to any distribution from such Account. The consent of the
Participant and the Participant's Spouse shall be obtained in writing within the
90 day period ending on the Annuity Starting Date (as defined in Section 10.1).
The Plan Administrator shall notify the Participant and the Participant's Spouse
of the right to defer any distribution until the Participant's Account is no
longer "immediately distributable". Such notification shall include a general
description of the material features, and an explanation of the relative values
of, the optional forms of benefit available under the Plan in a manner that
would satisfy the notice requirements of 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.
9.3(b) EXCEPTIONS. Notwithstanding the foregoing, only the Participant
need consent to the commencement of a distribution in the form of a Qualified
Joint and Survivor Annuity while the Participant's Account is immediately
distributable. Furthermore, if payment in the form of a Qualified Joint and
Survivor Annuity is not required with respect to the Participant
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pursuant to Section 10, only the Participant need consent to the distribution
from an Account that is immediately distributable. The consent of the
Participant and the Participant's Spouse shall not be required to the extent
that a distribution is required to satisfy Code Section 401(a)(9), Section
401(k), Section 401(m), Section 402(g) or Section 415. In addition, upon
termination of this Plan if the Plan is not required to offer an annuity option
(purchased from a commercial provider) the nonforfeitable portion of the
Participant's Account shall, without the Participant's consent, be distributed
to the Participant unless the Employer or an Affiliate maintains another defined
contribution plan (other than an employee stock ownership plan as defined in
Code Section 4975(e)(7)), in which event, the Account of a Participant who does
not consent to an immediate distribution shall be transferred to such other
plan.
9.3(c) IMMEDIATELY DISTRIBUTABLE. An Account is "immediately
distributable" if any part of the Account could be distributed to the
Participant (or the surviving Spouse) before the Participant reaches (or would
have reached if not deceased) the later of Normal Retirement Age or age 62.
9.3(d) ACCUMULATED DEDUCTIBLE EMPLOYEE CONTRIBUTIONS. For purposes of
determining the applicability of the consent requirements under this Section 9.3
to distributions made before the first day of the first Plan Year beginning
after December 31, 1988, the nonforfeitable portion of the Participant's Account
shall not include amounts attributable to accumulated deductible employee
contributions within the meaning of Code Section 72(o)(5)(B).
9.4 FORM OF DISTRIBUTION. All distributions (including distributions before
separation from service under Section 9.2 but excluding corrective distributions
under Section 7) shall be made in the form specified in Section 10.
9.5 MINIMUM DISTRIBUTIONS. The Plan shall satisfy the minimum distribution
requirements of Code Section 401(a)(9) as set forth in Section 11.
9.6 MISSING PERSON. In the event that an Account becomes payable under this
Plan pursuant to Section 9.1(c), Section 9.1(d) or Section 9.1(e) and the Plan
Administrator is unable to locate the Participant or his or her Beneficiary
after sending written notice to the last known mailing address and to the United
States Social Security Administration, such Participant or Beneficiary shall be
presumed dead and such Account shall become a Forfeiture on the third
anniversary of the date such Account first becomes payable under this Plan.
However, the amount of such Forfeiture shall be paid to such missing Participant
or Beneficiary in the event that such person files a claim for such benefit
while this Plan remains in effect and demonstrates to the satisfaction of the
Plan Administrator that such person in fact is such missing Participant or
Beneficiary.
9.7 NO ESTOPPEL OF PLAN. No person is entitled to any benefit under this Plan
except and to the extent expressly provided under this Plan. The fact that
payments have been made from this Plan in connection with any claim for benefits
under this Plan does not (1) establish the validity
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of the claim, (2) provide any right to have such benefits continue for any
period of time, or (3) prevent this Plan from recovering the benefits paid to
the extent that the Plan Administrator determines that there was no right to
payment of the benefits under this Plan. Thus, if a benefit is paid under this
Plan and it is thereafter determined by the Plan Administrator that such benefit
should not have been paid (whether or not attributable to an error by the
Participant, the Plan Administrator, the Employer or any other person), then the
Plan Administrator may take such action as the Plan Administrator deems
necessary or appropriate to remedy such situation, including without limitation
by (1) deducing the amount of any overpayment theretofore made to or on behalf
of such Participant from any succeeding payments to or on behalf of such
Participant under this Plan or from any amounts due or owing to such Participant
by the Employer or any Affiliate or under any other plan, program or arrangement
benefiting the employees or former employees of the Employer or any Affiliate,
or (2) otherwise recovering such overpayment from whoever has benefitted from
it.
If the Plan Administrator determines that an underpayment of benefits has been
made, the Plan Administrator shall take such action as it deems necessary or
appropriate to remedy such situation. However, in no event shall interest be
paid on the amount of any underpayment other than the investment gains (or
losses) credited to the Participant's Account pending payment.
9.8 ADMINISTRATION. All distributions shall be made in accordance with such
uniform and nondiscriminatory administrative and operational procedures for
Account distributions as the Plan Administrator deems appropriate under the
circumstances for the proper administration of the Plan.
SECTION 10. BENEFIT PAYMENT FORMS - JOINT AND SURVIVOR ANNUITY REQUIREMENTS
10.1 APPLICATION AND SPECIAL DEFINITIONS. This Section 10 shall apply to a
Participant who is vested at the time of death or at the time of a distribution
from the Participant's Account in any portion of the Participant's Account,
whether such portion is attributable to Employer contributions, Employee
contributions, or both. For purposes of this Section 10, the terms defined in
this Section 10.1 shall have the meanings shown opposite such terms.
10.1(a) ANNUITY STARTING DATE - means the first day of the first period
for which an amount is paid as an annuity or any other form.
10.1(b) EARLIEST RETIREMENT AGE - means
10.1(b)(1) if distributions are permitted only upon separation from
service, the earliest age at which the Participant could separate from service
and receive a distribution;
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10.1(b)(2) if distributions are permitted before separation from
service, the earliest age at which such distribution could be made; or
10.1(b)(3) if clauses (1) and (2) do not apply, the Early Retirement
Age.
10.1(c) ELECTION PERIOD - means
10.1(c)(1) for a Qualified Preretirement Survivor Annuity, the period
which begins on the earlier of (i) the first day of the Plan Year in which the
Participant attains age 35 or (ii) the date such Participant separates from
service and ends on the date of the Participant's death and
10.1(c)(2) for a Qualified Joint and Survivor Annuity or a Life
Annuity, the 90 day period ending on the Annuity Starting Date.
Notwithstanding the foregoing, a Participant who has not yet reached age 35 (and
who will not reach age 35 as of the end of the current Plan Year) may make a
special Qualified Election to waive the Qualified Preretirement Survivor Annuity
for the period beginning on the date of such election and ending on the first
day of the Plan year in which the Participant will reach age 35. Such election
shall not be valid unless the Participant receives a written explanation of the
Qualified Preretirement Survivor Annuity in such terms as are comparable to the
explanation required under Section 10.4. Qualified Preretirement Survivor
Annuity Coverage shall be automatically reinstated as of the first day of the
Plan Year in which the Participant reaches age 35. Any new waiver on or after
such date shall be subject to the full requirements of this Section 10.
10.1(d) LIFE ANNUITY - means a nontransferable immediate annuity payable
for the life of the Participant, which is the amount of benefit which can be
purchased with such Participant's Vested Account Balance as of the Annuity
Starting Date.
10.1(e) QUALIFIED ELECTION - means a Participant's election to waive the
Qualified Joint and Survivor Annuity or the Qualified Preretirement Survivor
Annuity which election shall not be effective unless (1) the election designates
a specific Beneficiary (including any class of Beneficiaries or any contingent
Beneficiaries) and, for an election to waive a Qualified Joint and Survivor
Annuity, the particular form of benefit payment, which designations cannot be
changed without the Spouse's consent (or the Spouse expressly permits
designations by the Participant without any further spousal consent); (2) such
Participant's Spouse consents in writing to such election on an Election Form;
(3) such consent acknowledges the effect of such election; and (4) such consent
is witnessed by a notary public; provided,
(i) if the Participant establishes to the satisfaction of a Plan
representative that such written consent may not be obtained because there is no
Spouse or the Spouse cannot
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be located or because of such other circumstances as may be described in the
regulations under Code Section 417, a Participant's election shall be deemed to
be Qualified Election;
(ii) a Spouse's written consent under this Section 10.1(e) shall be
irrevocable as to such Spouse and shall be binding only as against such Spouse;
(iii) no consent shall be valid unless the Participant received
notice as provided in Section 10.4;
(iv) a consent that permits designations by the Participant without
any further spousal consent must acknowledge that the Spouse has the right to
limit consent to a specific Beneficiary, and, if applicable, a specific form of
benefit payment, and that the Spouse voluntarily elects to relinquish either or
both of such rights; and
(v) a Participant may revoke (without the consent of his or her
Spouse) an election to waive the Qualified Joint and Survivor Annuity or the
Qualified Preretirement Survivor Annuity on an Election Form at any time prior
to the date as of which the Participant's Account becomes payable under Section
9.
10.1(f) QUALIFIED JOINT AND SURVIVOR ANNUITY - means a nontransferable
immediate annuity payable for the life of the Participant which is the amount of
benefit which can be purchased with the Participant's Vested Account Balance on
the Annuity Starting Date with a survivor annuity payable for the life of the
Participant's surviving Spouse which is
10.1(f)(1) STANDARD OPTION - 50% or
10.1(f)(2) ALTERNATIVE - such greater percentage (not to exceed 100%)
specified in the Adoption Agreement
of the amount of the annuity which is payable during the joint lives of the
Participant and such Spouse.
10.1(g) QUALIFIED PRERETIREMENT SURVIVOR ANNUITY - means a nontransferable
annuity payable for the life of the surviving Spouse, which is the amount of
benefit which can be purchased with
10.1(g)(1) STANDARD OPTION - 100% of the Participant's Vested Account
Balance as of the Annuity Starting Date or
10.1(g)(2) ALTERNATIVE - such lesser percentage (not less than 50%)
specified in the Adoption Agreement of such Participant's Vested Account Balance
(determined by allocating
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the portion of such balance which is attributable to employee contributions
proportionately to such annuity and to the remainder of such balance).
10.1(h) VESTED ACCOUNT BALANCE - means the nonforfeitable portion of a
Participant's Account derived from Employer contributions and Employee
contributions (including Rollover Contributions), whether vested before or upon
death, including the proceeds of insurance contracts, if any, on the
Participant's life and reduced, if applicable, for outstanding loans in
accordance with Section 13.3(d)(1)(iv).
10.2 DISTRIBUTION TO PARTICIPANT. Unless a Participant waives the Qualified
Joint and Survivor Annuity and elects an optional method of distribution (as
described in Section 10.6) on an Election Form pursuant to a Qualified Election
within the Election Period, any distribution of such Participant's Vested
Account Balance shall be paid in the form of (a) a Qualified Joint and Survivor
Annuity for each such married Participant and his or her Spouse or (b) a Life
Annuity for each such unmarried Participant. A Participant may elect that such
annuity be distributed upon attainment of the Earliest Retirement Age.
10.3 DISTRIBUTION TO SURVIVING SPOUSE. Unless a Participant waives the
Qualified Preretirement Survivor Annuity and elects an optional method of
distribution (as described in Section 10.6) on an Election Form pursuant to a
Qualified Election within the Election Period, such Participant's Vested Account
Balance shall, in the event of the Participant's death before the Participant's
Annuity Starting Date, be applied to purchase a Qualified Preretirement Survivor
Annuity for the surviving Spouse. If the Qualified Preretirement Survivor
Annuity is less than 100%, the remaining portion of the Participant's Vested
Account Balance shall be payable to the Participant's Beneficiary under Section
9. The surviving Spouse may elect that such Qualified Preretirement Survivor
Annuity be distributed to such Spouse within a reasonable period following the
death of the Participant. Notwithstanding the foregoing, a surviving Spouse
entitled to a Qualified Preretirement Survivor Annuity may elect in writing
after the Participant's death to have the Participant's Vested Account Balance
distributed in an optional form of benefit in accordance with Section 10.6.
10.4 NOTICE REQUIREMENTS.
10.4(a) QUALIFIED JOINT AND SURVIVOR ANNUITY AND LIFE ANNUITY. The Plan
Administrator shall no less than 30 days and no more than 90 days before the
Annuity Starting Date provide each Participant with a written explanation of the
Qualified Joint and Survivor Annuity and the Life Annuity, which explanation
shall describe
10.4(a)(1) the terms and conditions of such annuity;
10.4(a)(2) the Participant's right to make a Qualified Election to
waive such annuity and the effect of such election;
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10.4(a)(3) the rights of the Participant's Spouse, if any;
10.4(a)(4) the right to revoke such election and the effect of such a
revocation; and
10.4(a)(5) the relative values of the various optional forms of
benefits under the Plan.
10.4(b) QUALIFIED PRERETIREMENT SURVIVOR ANNUITY. The Plan Administrator
shall provide to each Participant within the "applicable period" for such
Participant a written explanation of the Qualified Preretirement Survivor
Annuity which includes the type of information described in Section 10.4(a).
The "applicable period" for a Participant is
10.4(b)(1) the period beginning on the first day of the Plan Year in
which such Participant attains age 32 and ending with the close of the Plan Year
preceding the Plan Year in which the Participant attains age 35,
10.4(b)(2) a reasonable period ending after he or she becomes a
Participant, or
10.4(b)(3) a reasonable period ending after this Section 10 applies
to such Participant,
whichever period ends last. However, if a Participant separates from service
before he or she reaches age 35, such notice shall be provided within the two
year period beginning one year before the Participant's separation from service
and ending one year after such separation and if such Participant is
subsequently reemployed, the applicable period for such Participant shall be
redetermined under Section 10.4(b)(1) through Section 10.4(b)(3). For purposes
of Section 10.4(b)(2) and Section 10.4(b)(3), a "reasonable period" is the two
year period which begins one year prior to the occurrence of the event and ends
one year after the occurrence of the event.
10.5 SAFE HARBOR RULES.
10.5(a) APPLICATION. If so specified in the Adoption Agreement, the
provisions in this Section 10.5 shall apply in lieu of Section 10.1 through
Section 10.4 to (1) a Participant in a Profit Sharing Plan or a 401(k) plan, and
(2) to any distribution made on or after the first day of the first Plan Year
beginning after December 31, 1988 from or under a separate account attributable
solely to accumulated deductible employee contributions (as defined in Code
Section 72(o)(5)(B)) and maintained on behalf of a Participant in a Money
Purchase Pension Plan or Target Benefit Pension Plan provided that the
conditions specified in Section 10.5(b) are satisfied.
10.5(b) CONDITIONS. In order to fit within this safe harbor (1) the
Participant does not or cannot elect payments in the form of a Life Annuity with
respect to the Participant's Vested Account Balance; (2) on the death of a
Participant, the Participant's Vested Account Balance
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shall be paid to the Participant's surviving Spouse, or if there is no surviving
Spouse or if the surviving Spouse has consented in a manner conforming to a
Qualified Election, to the Participant's Beneficiary; and (3) with respect to a
Participant in a Profit Sharing Plan or a 401(k) Plan, the Plan is not a direct
or indirect transferee of a defined benefit plan, money purchase pension plan,
target benefit pension 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 ("Transferee Plan"), or the Plan maintains separate bookkeeping
accounts for such Participant's Transferee Plan benefits and all other benefits
of the Participant under the Plan and gains, losses, withdrawals, contributions,
forfeitures, and other credits or charges are allocated on a reasonable and
consistent basis between the Transferee Plan benefits (which are subject to the
survivor annuity requirements in Section 10.1 through Section 10.4) and the
other Plan benefits (which are subject to the safe harbor rule in this Section
10.5).
10.5(c) SURVIVING SPOUSE. 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 Vested Account Balance shall
be adjusted for Fund Earnings occurring after the Participant's death in
accordance with Section 6.2 in the same manner that Accounts are adjusted for
other types of distributions.
10.5(d) WAIVER OF SPOUSAL BENEFIT. The Participant may waive the spousal
death benefit described in this Section 10.5 at any time; provided, no such
waiver shall be effective unless it satisfies the conditions described in
Section 10.1(e) (other than the notification requirement referred to in such
section) that would apply to the Participant's Qualified Election to waive the
Qualified Preretirement Survivor Annuity.
10.5(e) VESTED ACCOUNT BALANCE. For purposes of this Section 10.5, Vested
Account Balance shall mean, (1) in the case of a Money Purchase Pension Plan or
Target Benefit Pension Plan, the Participant's separate account balance
attributable solely to accumulated deductible employee contributions within the
meaning of Code Section 72(o)(5)(B) and (2) in the case of a Profit Sharing Plan
or 401(k) Plan, the Participant's Vested Account Balance as defined in Section
10.1(h), excluding the portion of such Vested Account Balance which is
attributable to Transferee Plan benefits described in Section 10.5(b).
10.6 OPTIONAL FORMS.
10.6(a) GENERAL. If a Participant properly and timely waives the
Qualified Joint and Survivor Annuity as described in Section 10.2 or to the
extent the safe harbor rules of Section 10.5 apply to a distribution, such
distribution shall be made in the form specified in this Section 10.6 as
selected by the Participant (or his or her Beneficiary in the event of the
Participant's death).
10.6(b) BEFORE SEPARATION FROM SERVICE. Any distribution made pursuant to
Section 9.2 shall, subject to Section 10.2, be made in a single sum.
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10.6(c) AFTER SEPARATION FROM SERVICE.
10.6(c)(1) STANDARD OPTION. The optional benefit form available
to any Participant after separation from service with the Employer and all
Affiliates or to his or her Beneficiary in the event of the Participant's death
shall be a single sum.
10.6(c)(2) ALTERNATIVE. If specified in the Adoption Agreement,
the following optional benefit forms shall be available to any Participant or to
his or her Beneficiary in the event of the Participant's death):
(i) SINGLE SUM - by payment in a single sum.
(ii) INSTALLMENTS - by payment in annual installments (or more
frequent installments) over a specified period in accordance with the minimum
distribution rules in Section 11.
(iii) ANNUITY - in the form of an annuity contract under which
the amount of benefits shall be that which can be provided by applying the
nonforfeitable portion of such Participant's Account to the applicable
settlement option or annuity purchase rate under such contract; or
(iv) OTHER FORMS - under one of the optional forms of
distribution, if any, under the Pre-Existing Plan or a plan described in Section
14.5 which are required to be preserved under Code Section 411(d)(6). Such
optional forms shall be described in the Adoption Agreement and, unless
otherwise specified in the Adoption Agreement, such other forms shall apply to
the Participant's entire Account balance. Notwithstanding the foregoing, if the
Plan Administrator separately accounts for benefits under a Pre-Existing Plan or
a plan described under Section 14.5 or, if applicable, under Section 10.5, the
optional forms may be limited to such separate accounts.
10.6(d) NO METHOD SELECTED. If the safe harbor rules of Section 10.5
apply to a distribution, but the Participant or the Participant's Spouse or
Beneficiary fails to specify the method of distribution, then any distribution
made to such Participant, Spouse or Beneficiary shall be made in a single sum.
10.6(e) SINGLE SUM. A distribution made on account of a Participant's
death or separation from service with the Employer and all Affiliates which is
made in more than one payment shall be deemed to be a single sum distribution
for purposes of this Plan if the additional payment or payments are necessary to
reflect allocations completed following the Participant's death or separation
from service.
10.6(f) IN KIND DISTRIBUTIONS. A distribution shall be made in kind only
to the extent provided in the Adoption Agreement and only to the extent an "in
kind" distribution is permissible under ERISA.
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10.7 ANNUITY CONTRACTS. Any annuity contract distributed by the Plan to a
Participant or a Beneficiary shall be nontransferable and the terms of such
contract shall comply with the applicable requirements of this Plan and the
Code.
10.8 TRANSITIONAL RULES.
10.8(a) Any living Participant not receiving benefits on August 23, 1984,
who would otherwise not receive the benefits prescribed by the previous sections
of this Section 10 must be given the opportunity to elect to have such sections
apply (1) 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 (2) such Participant had at least 10 years of vesting
service when he or she separated from service.
10.8(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 Section 10.8(d).
10.8(c) The respective opportunities to elect (as described in Section
10.8(a) and (b) above) must be afforded to the appropriate Participants during
the period commencing on August 23, 1984, and ending on the date benefits would
otherwise commence to such Participants.
10.8(d) Any Participant who has elected pursuant to Section 10.8(b) and
any Participant who does not elect under Section 10.8(a) or who meets the
requirements of Section 10.8(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:
10.8(d)(1) If benefits in the form of a life annuity become payable
to a married Participant who:
(i) begins to receive payments under the Plan on or after
Normal Retirement Age; or
(ii) dies on or after Normal Retirement Age while still working
for the Employer; or
(iii) begins to receive payments on or after the "qualified early
retirement age"; or
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(iv) separates from service on or after attaining Normal
Retirement Age (or the "qualified early retirement age") and after satisfying
the eligibility requirements for the payment of benefits under the Plan and
thereafter dies before beginning to receive such benefits; then such benefits
shall 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 such election shall be in writing and may be
changed by the Participant at any time.
10.8(d)(2) A Participant who is employed after attaining the
qualified early retirement age shall be given the opportunity to elect, during
the election period, to have a survivor annuity payable on death. The election
period begins on the later of (i) the 90th day before the Participant attains
the "qualified early retirement age", or (ii) the date on which participation
begins, and ends on the date the Participant separates from service. Any such
election shall be in writing and may be changed by the Participant at any time.
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 the Participant's death.
10.8(d)(3) For purposes of this Section 10.8(d), "qualified early
retirement age" means the latest of:
(i) the earliest date under the Plan on which the Participant
may elect to receive retirement benefits,
(ii) the first day of the 120th month beginning before the
Participant reaches Normal Retirement Age, or
(iii) the date the Participant begins participation.
10.9 DIRECT ROLLOVERS.
10.9(a) GENERAL. This Section 10.9 applies to distributions made on or
after January 1, 1993. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a Distributee's election under this Section
10, a Distributee may elect, at the time and in the manner prescribed by the
Plan Administrator, to have any portion of an Eligible Rollover Distribution
paid directly by the Plan to an Eligible Retirement Plan specified by the
Distributee in a direct rollover in accordance with Code Section 401(a)(31).
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10.9(b) DEFINITIONS.
10.9(b)(1) ELIGIBLE ROLLOVER DISTRIBUTION. An Eligible Rollover
Distribution is any distribution of all or any portion of the balance to the
credit of the Distributee, except that an Eligible Rollover Distribution does
not include: any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or life
expectancy) of the Distributee or the joint lives (or joint life expectancies)
of the Distributee and the Distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent such
distribution is required under Code Section 401(a)(9); and the portion of any
distribution that is not includable in gross income (determined without regard
to the exclusion for net unrealized appreciation with respect to employer
securities).
10.9(b)(2) ELIGIBLE RETIREMENT PLAN. An Eligible Retirement Plan
is an individual retirement account described in Code Section 408(a), an
individual retirement annuity described in Code Section 408(b), an annuity plan
described in Code Section 403(a), or a qualified trust described in Code Section
401(a), that accepts the Distributee's Eligible Rollover Distribution. However,
in the case of an Eligible Rollover Distribution to the surviving spouse, an
Eligible Retirement Plan is an individual retirement account or individual
retirement annuity.
10.9(b)(3) DISTRIBUTEE. A Distributee includes an Employee or
former Employee. In addition, the Employee's or former Employee's surviving
spouse and the Employee's or former Employee's spouse or former spouse who is
the alternate payee under a qualified domestic relations order, as defined in
Code Section 414(p), are Distributees with regard to the interest of the spouse
or former spouse.
SECTION 11. MINIMUM DISTRIBUTION REQUIREMENTS
11.1 GENERAL. Subject to Section 10, BENEFIT PAYMENT FORMS - JOINT AND
SURVIVOR ANNUITY REQUIREMENTS, the requirements of this Section 11 shall apply
to any distribution of a Participant's Account and shall take precedence over
any inconsistent provisions of this Plan. Unless otherwise specified, the
provisions of this Section 11 shall apply to calendar years beginning after
December 31, 1984. All distributions required under this Section 11 shall be
determined and made in accordance with the proposed regulations under Code
Section 401(a)(9), including the minimum distribution incidental benefit
requirement of Section 1.401(a)(9)-2 of the proposed regulations.
11.2 SPECIAL DEFINITIONS.
11.2(a) APPLICABLE CALENDAR YEAR - means the first Distribution Calendar
Year, and if life expectancy is being recalculated, each succeeding calendar
year.
11.2(b) APPLICABLE LIFE EXPECTANCY - means the life expectancy (or joint
and last survivor expectancy) calculated using the attained age of the
Participant (or Designated
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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.
11.2(c) DESIGNATED BENEFICIARY - means the individual who is designated
as the Beneficiary under this Plan in accordance with Code Section 401(a)(9) and
the regulations under such Code section.
11.2(d) DISTRIBUTION CALENDAR YEAR - means a calendar year for which a
minimum distribution is required. For distributions beginning before the
Participant's death, the first Distribution Calendar Year shall be 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 shall be the calendar year in which
distributions are required to begin pursuant to Section 11.6.
11.2(e) LIFE EXPECTANCY - means the life expectancy (or joint and last
survivor expectancy) as computed by use of the expected return multiples in
Tables V and VI of Section 1.72-9 of the Federal Income Tax Regulations. Unless
otherwise elected by the Participant (or Spouse in the case of distributions
described in Section 11.6(b)(2)) by the time distributions are required to
begin, life expectancies shall be recalculated annually. Such election shall be
irrevocable as to the Participant (or Spouse) and shall apply to all subsequent
years. The life expectancy of a nonspouse Beneficiary may not be recalculated.
11.2(f) PARTICIPANT'S BENEFIT - means the nonforfeitable portion of a
Participant's Account determined 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 as of dates in the valuation calendar year after such Valuation Date
and decreased by distributions made in the valuation calendar year after such
Valuation Date. 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.
11.2(g) REQUIRED BEGINNING DATE.
11.2(g)(1) GENERAL RULE. The Required Beginning Date of a
Participant who reaches age 70 1/2 after December 31, 1987 is the first day of
April of the calendar year following the calendar year in which the Participant
reaches age 70 1/2.
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11.2(g)(2) AGE 70 1/2 BEFORE 1988. The Required Beginning Date of
a Participant who reaches age 70 1/2 before January 1, 1988 shall be,
(i) for a Participant who is not a 5% owner, the first day of
April of the calendar year following the calendar year in which occurs the later
of retirement or reaching age 70 1/2; or
(ii) for a Participant who is a 5% owner during any year
beginning after December 31, 1979, the first day of April following the later
of:
(A) the calendar year in which the Participant reaches age
70 1/2, or
(B) the earlier of the calendar year with or within which
ends the Plan Year in which the Participant becomes a 5% owner, or the calendar
year in which the Participant retires.
11.2(g)(3) AGE 70 1/2 DURING 1988. The Required Beginning Date of
a Participant who is not a 5% owner, who reaches age 70 1/2 during 1988 and who
has not retired before January 1, 1989 shall be April 1, 1990. The Required
Beginning Date of a Participant who is a 5% owner or who retired before
January 1, 1989 and who reaches age 70 1/2 during 1988 shall be determined in
accordance with Section 11.2(g)(1).
11.2(g)(4) 5% OWNER. A Participant shall be treated as a 5% owner
for purposes of this Section 11.2(g) if such Participant is a 5% 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 individual attains
age 66 1/2 or any subsequent Plan Year. Once distributions have begun to a 5%
owner under this Section 11, they must continue to be distributed, even if the
Participant ceases to be a 5% owner in a subsequent year.
11.3 REQUIRED BEGINNING DATE. The entire nonforfeitable interest of a
Participant must be distributed or begin to be distributed no later than the
Participant's Required Beginning Date. Such distribution shall be made
11.3(a) in the form of a Qualified Joint and Survivor Annuity as
described in Section 10.2, or
11.3(b) if the Qualified Joint and Survivor Annuity is properly waived or
to the extent the safe harbor rules in Section 10.5 apply, in the optional
benefit form in Section 10.6 selected by the Participant.
Notwithstanding the foregoing, even if installment distributions are not
otherwise available as an optional benefit form, a Participant who has not
separated from service with the Employer
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and all Affiliates as of the Required Beginning Date (or as of the end of any
Distribution Calendar Year thereafter) may elect to receive the minimum
distribution amount for each such Distribution Calendar Year as described in
Section 11.5.
11.4 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):
11.4(a) the life of the Participant,
11.4(b) the life of the Participant and a Designated Beneficiary,
11.4(c) a period certain not extending beyond the life expectancy of the
Participant, or
11.4(d) a period certain not extending beyond the joint and last survivor
expectancy of the Participant and a Designated Beneficiary.
11.5 DETERMINATION OF AMOUNT TO BE DISTRIBUTED EACH YEAR. If the Participant's
interest is to be distributed in other than a single sum, the following minimum
distribution rules shall apply on or after the Required Beginning Date:
11.5(a) INDIVIDUAL ACCOUNT.
11.5(a)(1) GENERAL. If a Participant's Benefit is to be
distributed over (i) a period not extending beyond the life expectancy of the
Participant or the joint life and last survivor expectancy of the Participant
and the Participant's Designated Beneficiary or (ii) a period not extending
beyond the life expectancy of the Designated Beneficiary, the amount required to
be distributed for each calendar year, beginning with distributions for the
first Distribution Calendar Year, must at least equal the quotient obtained by
dividing the Participant's Benefit by the Applicable Life Expectancy.
11.5(a)(2) INCIDENTAL DEATH BENEFIT RULES.
(i) For calendar years beginning before January 1, 1989, if the
Participant's Spouse is not the Designated Beneficiary, the method of
distribution selected must assure that at least 50% of the present value of the
amount available for distribution is paid within the life expectancy of the
Participant.
(ii) For calendar years beginning after December 31, 1988, the
amount to be distributed each year, beginning with distributions for the first
Distribution Calendar Year, shall not be less than the quotient obtained by
dividing the Participant's Benefit by the lesser of (A) the Applicable Life
Expectancy or (B) if the Participant's Spouse is not the Designated
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Beneficiary, the applicable divisor determined from the table set forth in Q&A-4
of Section 1.401(a)(9)-2 of the proposed regulations. Distributions after the
death of the Participant shall be distributed using the Applicable Life
Expectancy in Section 11.5(a)(1) as the relevant divisor without regard to
Section 1.401(a)(9)-2 of the proposed regulations.
11.5(a)(3) TIMING. 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 subsequent
Distribution 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.
11.5(b) ANNUITY CONTRACTS. If the Participant's Benefit is distributed
in the form of an annuity purchased from an insurance company, distributions
under such annuity shall be made in accordance with the requirements of Code
Section 401(a)(9).
11.6 DEATH DISTRIBUTION PROVISIONS.
11.6(a) DISTRIBUTION BEGINNING BEFORE DEATH. If the Participant dies
after distribution of his or her nonforfeitable interest has begun, the
remaining portion of such nonforfeitable interest shall continue to be
distributed at least as rapidly as under the method of distribution being used
prior to the Participant's death.
11.6(b) DISTRIBUTION BEGINNING AFTER DEATH. If the Participant dies
before distribution of his or her nonforfeitable interest begins distribution of
the Participant's entire nonforfeitable 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 (1) or (2) below:
11.6(b)(1) if any portion of the Participant's nonforfeitable
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 and shall commence on or before December 31 of the
calendar year immediately following the calendar year in which the Participant
died;
11.6(b)(2) if the Designated Beneficiary is the Participant's
Surviving Spouse, distributions may be made over the period described in clause
(1) above but the required commencement date may be deferred until the later of
(i) December 31 of the calendar year immediately following the calendar year in
which the Participant died or (ii) December 31 of the calendar year in which the
Participant would have reached age 70 1/2.
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If the Participant has not made an election pursuant to this Section 11.6(b) by
the time of the Participant's death, the Participant's Designated Beneficiary
must elect the method of distribution no later than the earlier of (A) December
31 of the calendar year in which distributions would be required to begin under
this Section 11.6, or (B) December 31 of the calendar year which contains the
fifth anniversary of the date of death of the Participant. If the Participant
has no Designated Beneficiary, or if the Designated Beneficiary does not elect a
method of distribution, distribution of the Participant's entire interest must
be completed by December 31 of the calendar year containing the fifth
anniversary of the Participant's death.
11.6(c) SPECIAL RULES.
11.6(c)(1) For purposes of Section 11.6(b), if the Surviving
Spouse dies after the Participant, but before payments to such Spouse begin, the
provisions of Section 11.6(b), with the exception of Section 11.6(b)(2), shall
be applied as if the surviving Spouse were the Participant.
11.6(c)(2) For purposes of this Section 11.6, any amount paid to a
child of the Participant shall be treated as if it had been paid to the
Surviving Spouse if the amount becomes payable to the Surviving Spouse when the
child reaches the age of majority.
11.6(c)(3) For the purposes of this Section 11.6, distribution of
a Participant's interest shall be considered to begin on the Participant's
Required Beginning Date (or, if Section 11.6(c)(1) above is applicable, the date
distribution is required to begin to the Surviving Spouse pursuant to Section
11.6(b)). If distribution in the form of an annuity irrevocably commences to
the Participant before the Required Beginning Date, the date distribution is
considered to begin shall be the date distribution actually commences.
11.7 SPECIAL PRE-TEFRA DISTRIBUTION ELECTION.
11.7(a) GENERAL RULE. Subject to Section 10, BENEFIT PAYMENT FORMS-JOINT
AND SURVIVOR ANNUITY REQUIREMENTS, the nonforfeitable percentage of the Account
of any Participant (including a "5% owner" as described in Section 11.2(g)(4))
who has in effect a Special Pre-TEFRA Distribution Election (as described in
Section 11.7(b)) shall be paid only to the Participant, or in the case of the
Participant's death, only to his or her beneficiary in accordance with the
method of distribution specified in such election without regard to the
distribution rules set forth in Section 11.1 through Section 11.6.
11.7(b) SPECIAL PRE-TEFRA DISTRIBUTION ELECTION. For purposes of this
Section 11.7, a Special Pre-TEFRA Distribution Election means a designation in
writing, signed by the Participant or his or her beneficiary, made before
January 1, 1984 by a Participant in this Plan or a Participant in a Pre-Existing
Plan who had accrued a benefit under such plan as of December 31, 1983 which
designation specifies
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11.7(b)(1) a distribution method which was permissible under Code
Section 401(a)(9) as in effect prior to amendment by the Deficit Reduction Act
of 1984,
11.7(b)(2) the time at which such distribution will commence,
11.7(b)(3) the period over which such distribution will be made,
and
11.7(b)(4) if such designation is to be effective for a
beneficiary, the beneficiaries of the Participant in order of priority.
A distribution to be made upon the death of a Participant shall not be covered
under this Section 11.7(b) unless the information in the designation with
respect to such distribution satisfies the requirements of this Section 11.7(b).
11.7(c) CURRENT DISTRIBUTIONS. Any distribution which began before
January 1, 1984 and continues after such date shall be deemed to be made
pursuant to a Special Pre-TEFRA Distribution Election if the method of
distribution was set forth in writing and such method satisfies the requirements
of Section 11.7(b)(1) through (4).
11.7(d) REVOCATION. A Participant who made a Special Pre-TEFRA
Distribution Election shall have the right to revoke such election by completing
and filing a distribution Election Form under Section 9. Furthermore, any
change (other than the mere substitution or addition of a beneficiary not
originally designated in such election which does not directly or indirectly
alter the period over which distributions are to be made) to a Special Pre-TEFRA
Distribution Election shall be deemed to be a revocation of such election. Upon
revocation, any subsequent distribution shall be made in accordance with Code
Section 401(a)(9). If a designation is revoked subsequent to the date
distributions are required to begin, the Plan 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), but for the Special Pre-TEFRA
Distribution Election. For calendar years beginning after December 31, 1988,
such distributions must meet the minimum distribution incidental benefit
requirements in Section 1.401(a)(9)-2 of the proposed regulations. If 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 Section 1.401(a)(9)-1 of the proposed regulations shall
apply.
SECTION 12. TOP-HEAVY PLAN RULES
12.1 APPLICATION. The rules set forth in this Section 12 shall supersede any
provisions of this Plan or the Adoption Agreement which are inconsistent with
these rules as of the first day of the first Plan Year beginning after
December 31, 1983 during which the Plan is or becomes a Top-Heavy Plan and such
rules shall continue to supersede such provisions for so long as the Plan is a
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Top-Heavy Plan unless the Code permits such rules to cease earlier or requires
them to remain in effect for a longer period.
12.2 SPECIAL DEFINITIONS. For purposes of this Section 12, the terms defined
in this Section 12.2 shall have the meanings shown opposite such terms.
12.2(a) DETERMINATION DATE - means
12.2(a)(1) for the first Plan Year of a Plan which is adopted as a
new Plan under the Adoption Agreement, the last day of such Plan Year, and
12.2(a)(2) for any subsequent Plan Year, the last day of the
immediately preceding Plan Year, and
12.2(a)(3) for any plan year of each other qualified plan
maintained by the Employer or an Affiliate which is part of a Permissive
Aggregation Group or a Required Aggregation Group, the date determined under
this Section 12.2(a) as if the term "Plan Year" means the plan year for each
such qualified plan.
12.2(b) KEY EMPLOYEE - means any Employee or former Employee (and the
Beneficiaries of such Employee) (as determined in accordance with Code Section
416(i)(1)) who at any time during the Plan Year or any of the 4 immediately
preceding Plan Years was
12.2(b)(1) an officer of the Employer or an Affiliate whose
compensation for such Plan Year exceeds 50% of the dollar limitation under Code
Section 415(b)(1)(A),
12.2(b)(2) an owner (or considered to be an owner within the
meaning of Code Section 318) of one of the 10 largest interests in the Employer
or an Affiliate whose compensation for such Plan Year exceeds the 100% of the
dollar limitation under Code Section 415(c)(1)(A); provided that the value of
such Employee's ownership interests is more than one-half of one percent,
12.2(b)(3) a 5% owner of the Employer or an Affiliate, or
12.2(b)(4) a 1% owner of the Employer or an Affiliate whose
compensation for such Plan Year exceeds $150,000.
For purposes of this Section 12.2(b), an Employee's compensation means
compensation within the meaning of Code Section 415(c)(3) (as defined in Section
7.2(a)(2)) but including amounts contributed by the Employer or an Affiliate
pursuant to a salary reduction agreement which are excluded from gross income
under Code Section 125, Section 402(e)(3), Section 402(h) or Section 403(b).
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12.2(c) PERMISSIVE AGGREGATION GROUP - means a Required Aggregation Group
and any other qualified plan or plans (as described in Code Section 401(a))
maintained by the Employer or an Affiliate which, when considered with the
Required Aggregation Group, would continue to satisfy the requirements of Code
Section 401(a)(4) and Code Section 410.
12.2(d) REQUIRED AGGREGATION GROUP - means (1) each qualified plan (as
described in Code Section 401(a)) maintained by the Employer or an Affiliate in
which at least one Key Employee participates or participated at any time during
the 5 year period ending on the Determination Date (without regard to whether
such plan has terminated) and (2) any other qualified plan maintained by the
Employer or an Affiliate which enables any such plan to satisfy the requirements
of Code Section 401(a)(4) or Code Section 410.
12.2(e) TOP-HEAVY PLAN - means this Plan if, for any Plan Year beginning
after December 31, 1983, either
12.2(e)(1) this Plan is not part of a Required Aggregation Group
or a Permissive Aggregation Group and the Top-Heavy Ratio for this Plan exceeds
60%;
12.2(e)(2) this Plan is part of a Required Aggregation Group but
not part of a Permissive Aggregation Group and the Top-Heavy Ratio for the
Required Aggregation Group exceeds 60%; or
12.2(e)(3) this Plan is part of a Required Aggregation Group and
part of a Permissive Aggregation Group and the Top-Heavy Ratio for the
Permissive Aggregation Group exceeds 60%.
12.2(f) TOP-HEAVY RATIO.
12.2(f)(1) If the Employer or an Affiliate maintains one or more
defined contribution plans (including any simplified employee pension plan) and
the Employer or an Affiliate has never maintained a defined benefit plan under
which benefits have been accrued for a Participant in this Plan during the 5
year period ending on the Determination Date, "Top-Heavy Ratio" means for this
Plan alone or for the Required Aggregation Group or Permissive Aggregation
Group, as appropriate, a fraction, the numerator of which shall be the sum of
the account balances of all Key Employees as of the Determination Date under
this and all other such defined contribution plans and the denominator of which
shall be the sum of the account balances of all employees as of the
Determination Date under this and all other such defined contribution plans.
12.2(f)(2) If the Employer or an Affiliate maintains one or more
definer contribution plans (including any simplified employee pension plan) and
the Employer or an Affiliate maintains or has ever maintained one or more
defined benefit plans under which
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benefits have been accrued for a Participant in this Plan during the 5 year
period ending on the Determination Date, "Top-Heavy Ratio means for the Required
Aggregation Group or the Permissive Aggregation Group, as appropriate, a
fraction, the numerator of which shall be the sum of the account balances for
all Key Employees as of the Determination Date under this and all other such
defined contribution plans and the sum of the present value of the accrued
benefits for all Key Employees as of the Determination Date under all defined
benefit plans maintained by the Employer or an Affiliate and the denominator of
which shall be the sum of the account balances for all employees as of the
Determination Date under this and all other such defined contribution plans and
the sum of the present value of the accrued benefits for all employees as of the
Determination Date under all defined benefit plans maintained by the Employer or
an Affiliate.
12.2(f)(3) The following rules shall apply for purposes of
calculating the Top-Heavy Ratio:
(i) The value of any account balance and the present value of any
accrued benefit shall be determined as of the most recent Top-Heavy Valuation
Date that falls within, or ends with, the 12 month period ending on the
Determination Date (or, if plans are aggregated, the Determination Dates that
fall within the same calendar year), except as provided under the regulations
under Code Section 416 for the first and second years of a defined benefit plan;
(ii) The value of any account balance and the present value of any
accrued benefit shall include the value of any distributions made during the 5
year period ending on such Determination Date and any contributions due but as
yet unpaid as of the Determination Date which are required to be taken into
account on that date under Code Section 416;
(iii) The present value of an accrued benefit under a defined benefit
plan shall be determined in accordance with the interest rate and mortality
assumptions specified in the Adoption Agreement or, if this Plan and such
defined benefit plan are Paired Plans, as specified in the Adoption Agreement
for such defined benefit Paired Plan;
(iv) The account balance or accrued benefit of a Participant who is
not a Key Employee for the current Plan Year but who was a Key Employee in a
prior Plan Year or who has not performed an Hour of Service for the Employer or
any Affiliate at any time during the 5 year period ending on the Determination
Date shall be disregarded;
(v) Deductible employee contributions shall be disregarded;
(vi) The calculation of the Top-Heavy Ratio and the extent to which
contributions, distributions, rollovers, and transfers are taken into account
shall be determined in accordance with Code Section 416; and
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(vii) If the Employer maintains more than one defined benefit plan,
the accrued benefit of a Participant other than a Key Employee shall be
determined under the method, if any, that uniformly applies for accrual purposes
under all such defined benefit plans maintained by the Employer or an Affiliate,
or 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).
12.2(g) TOP-HEAVY VALUATION DATE - means for this Plan, the last day of
each Plan Year and for each other qualified plan maintained by the Employer or
an Affiliate,
12.2(g)(1) STANDARD OPTION - the most recent valuation date for
such plan or
12.2(g)(2) ALTERNATIVE - the valuation date specified in the
Adoption Agreement.
12.3 MINIMUM ALLOCATION.
12.3(a) GENERAL. Except as otherwise provided in this Section 12.3, for
any Plan Year in which this Plan is a Top-Heavy Plan, the "minimum allocation"
for each Participant who is not a Key Employee means an allocation of Employer
Contributions and Forfeitures made in accordance with Section 12.3(d) which
shall not be less than the lesser of
12.3(a)(1) 3% of such Participant's Compensation for such Plan
Year or,
12.3(a)(2) if the Employer or an Affiliate has no defined benefit
plan which uses this Plan to satisfy the requirements of Code Section 401(a)(4)
or Code 410, the largest percentage of the Employer Contributions and
Forfeitures allocated on behalf of any Key Employee (expressed as a percentage
of the first $200,000 of Compensation) for such Plan Year.
12.3(b) DEFINED BENEFIT PAIRED PLAN. If this Plan is adopted in
combination with a defined benefit Paired Plan, the Employer and the
Participating Affiliates shall make a contribution under this Plan (or, if this
Plan is adopted in combination with another defined contribution Paired Plan,
under any combination of defined contribution Paired Plans) for each Participant
who is an Eligible Employee at any time during such Plan Year who is also a
Participant in the defined benefit Paired Plan equal to at least 5% (or such
greater percentage as is specified in the adoption agreement for the defined
benefit Paired Plan) of Compensation for such Plan Year unless the Employer
elects under such defined benefit Paired Plan to provide the minimum benefit
accrual under such defined benefit Paired Plan.
If this Section 12.3(b) applies and the Employer has not elected to provide the
minimum benefit actual under the defined benefit Paired Plan the minimum
allocation required under this Section 12.3(b) for Plan Years beginning on and
after the Final Compliance Date shall, subject to the ordering rules in Section
12.3(c), be made under this Plan without regard to whether the Participant also
benefits
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under the defined benefit Paired Plan. Further, if this Plan and the defined
benefit Paired Plan do not benefit the same participants for such Plan Year, the
minimum allocation described in Section 12.3(a) shall, subject to the ordering
rules in Section 12.3(c), be made under this Plan for each Participant described
in Section 12.3(d)(1) and the minimum benefit accrual shall be made for each
participant in the defined Benefit Paired Plan in accordance with the terms of
such Paired Plan.
12.3(c) DEFINED CONTRIBUTION PAIRED PLAN. If this Plan is adopted in
combination with one or more defined contribution Paired Plans, the minimum
allocation required under this Section 12.3, if any, shall be made under such
Paired Plans in the following order:
12.3(c)(1) STANDARD OPTION - First, under the Money Purchase
Pension Plan, if any; second, under the Target Benefit Pension Plan, if any;
third under the Profit Sharing Plan; if any, and finally, under the 401(k) Plan,
if any.
12.3(c)(2) ALTERNATIVE - in the order specified in the Adoption
Agreement.
12.3(d) PARTICIPANTS ENTITLED TO ALLOCATION. The minimum allocation
required for any Plan Year under this Section 12.3
12.3(d)(1) shall be made for each Participant who is not a Key
EmploYee and who is employed as an Eligible Employee (or on an authorized leave
of absence as an Eligible Employee) on the last day of such Plan Year, without
regard to the number of Hours of Service actually completed by such Participant
in such Plan Year; and
12.3(d)(2) shall not apply to any Participant (i) who is covered
under any other plan or plans maintained by the Employer or an Affiliate and the
Employer has specified in the Adoption Agreement that the minimum allocation or
the minimum benefit required under Code Section 416 for any Plan Year for which
this Plan is a Top-Heavy Plan shall be made under such other plan or plans or
(ii) to the extent such Participant receives such minimum allocation or minimum
benefit under this Plan or any other plans maintained by the Employer or an
Affiliate.
Notwithstanding Section 12.3(d)(2), if this Plan is adopted as a nonstandardized
Plan that intends to satisfy the safe harbor in the Code Section 401(a)(4)
regulations, the minimum allocation required under Section 12.3 for Plan Years
beginning on and after the Final Compliance Date must be made for each
Participant described in Section 12.3(d)(1) without regard to whether the
Participant also benefits under another plan, but only to the extent that such
minimum allocation is not otherwise received under this Plan.
12.3(e) NONFORFEITABILITY. The minimum allocation required under this
Section 12.3 (to the extent required to be nonforfeitable under Code Section
416(b)) shall not be forfeited under Code Section 411(a)(3)(B) or Code Section
411(a)(3)(D).
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12.3(f) COMPENSATION. For purposes of computing the minimum allocation
under this Section 12.3, the term "Compensation" shall mean Compensation within
the meaning of Code Section 415(c)(3) as described in Section 7.2(a)(2).
12.3(g) MULTIPLE PLANS. If the Employer or an Affiliate also maintains
another plan, the Employer shall specify in the Adoption Agreement how the
minimum allocation, if any, required under Code Section 416 will be satisfied
and, if the Employer or an Affiliate maintains or has maintained a defined
benefit plan, the method of satisfying Code Section 416(h).
12.3(h) INTEGRATED PLANS.
12.3(h)(1) PROFIT SHARING PLAN. If this Plan is adopted as an
integrated Profit Sharing Plan, the following allocation formula shall apply in
lieu of the formula in Section 6.3(a)(2) for each Plan Year in which such Plan
is a Top-Heavy Plan.
The Forfeitures and the Employer Contribution shall be allocated (and posted) as
of the last day of such Plan Year to the Employer Account of each Active
Participant and each other Participant for whom a minimum allocation is required
to be made under this Section 12.3 in accordance with the following:
STEP ONE - First, the lesser of (A) the sum of the Employer Contribution
and Forfeitures for such Plan Year or (B) the product of the Top-Heavy
Percentage and the total Compensation of all such Participants shall be
allocated in the same ratio that each such Participant's total
Compensation for such Plan Year bears to the total Compensation of all
such Participants for such Plan Year.
STEP TWO - Second, the lesser of (A) the remaining Employer Contribution
and Forfeitures for such Plan Year or (B) the product of the Top-Heavy
Percentage (or the Maximum Disparity Rate, if less) and the total Excess
Compensation of all such Participants shall be allocated in the same ratio
that each such Participant's Excess Compensation for such Plan Year bears
to the total Excess Compensation of all such Participants for such Plan
Year.
STEP THREE - Third, the lesser of (A) the remaining Employer Contribution
and Forfeitures for such Plan Year or (B) the Integration Amount shall be
allocated in the same ratio that the sum of the total Compensation and
Excess Compensation of each such Participant for such Plan Year bears to
the sum of the total Compensation and Excess Compensation of all such
Participants for such Plan Year.
STEP FOUR - Finally, the remaining Employer Contribution and Forfeitures
for such Plan Year shall be allocated in the same ratio that each such
Participant's total Compensation
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for such Plan Year bears to the total Compensation of all such
Participants for such Plan Year.
12.3(h)(2) MONEY PURCHASE PENSION PLAN. If this Plan is adopted
as an integrated Money Purchase Pension Plan, (i) the "Base Contribution
Percentage" specified in the Adoption Agreement, if less than the Top-Heavy
Percentage, shall be increased to equal the Top-Heavy Percentage and (ii) the
Employer Contribution required under Section 5.2 (as adjusted in (i) above)
shall be made for each Active Participant and each other Participant for whom an
allocation is required to be made under this Section 12.3.
12.3(h)(3) SPECIAL DEFINITIONS. For purposes of this Section
12.3(h),
(i) "Excess Compensation" means the amount, if any, of a
Participant's Compensation for such Plan Year which exceeds the Integration
Level for such Plan Year.
(ii) "Integration Amount" means the product of (1) the total
Compensation and the total Excess Compensation of all such Participants and (2)
the excess, if any, of the Integration Percentage specified in the Adoption
Agreement over the Top-Heavy Percentage.
(iii) "Top-Heavy Percentage" means 3% or such greater percentage
required under this Section 12.3 or specified in the Adoption Agreement.
12.4 VESTING SCHEDULE. For any Plan Year in which this Plan is a Top-Heavy
Plan, the Top-Heavy vesting schedule specified in the Adoption Agreement
automatically shall apply to all benefits under the Plan within the meaning of
Code Section 411(a)(7) (other than benefits which are attributable to Employee
Contributions or Rollover Contributions or other contributions which are
nonforfeitable when made), including benefits accrued before the effective date
of Code Section 416 and before this Plan became a Top-Heavy Plan, unless the
regular vesting schedule is at least as favorable as such Top-Heavy vesting
schedule. However, the provisions of this Section 12.4 shall not apply to the
Account balance of any Participant who does not complete an Hour of Service
after the Plan first becomes a Top-Heavy Plan and such Participant's Account
balance attributable to Employer contributions and Forfeitures shall be
determined without regard to this Section 12.4. Further, no change in the
vesting schedule as a result of a change in this Plan's status to a Top-Heavy
Plan or to a plan which is not a Top-Heavy Plan shall deprive a Participant of
the nonforfeitable percentage of the Participant's Account balance accrued to
the date of the change, and any such change to the vesting schedule shall be
subject to the provisions of Section 14.3(c).
12.5 401(k) PLAN. Notwithstanding any contrary provision, the following rules
shall apply if this Plan adopted as a 401(k) Plan:
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12.5(a) Qualified Nonelective Contributions shall be treated as Employer
contributions for purposes of satisfying the minimum allocation under Section
12.3.
12.5(b) Matching Contributions allocated to the Account of a Key Employee
shall be treated as Employer contributions for purposes of determining the
amount of the minimum allocation required under Section 12.3. The Plan may use
Matching Contributions allocated on behalf of a non-Key Employee to satisfy the
minimum allocation under Section 12.3; provided, however, that for Plan Years
beginning on and after the Final Compliance Date, such contributions shall not
be treated as Matching Contributions for purposes of satisfying the limitations
of Section 7.4 and Section 7.5 but shall instead be subject to the general
nondiscrimination rules of Code Section 401(a)(4).
12.5(c) Elective Deferrals allocated to the Account of a Key Employee
shall be treated as Employer contributions for purposes of determining the
amount of the minimum allocation required under Section 12.3. However, for Plan
Years beginning on and after the Final Compliance Date, Elective Deferrals
allocated on behalf of non-Key Employees shall not be treated as Employer
contributions for purposes of satisfying the minimum allocation required under
Section 12.3.
SECTION 13. INSURANCE, INDIVIDUALLY DIRECTED INVESTMENTS AND PARTICIPANT LOANS
13.1 INSURANCE CONTRACTS.
13.1(a) ELECTIONS AND EXISTING LIFE INSURANCE CONTRACTS.
13.1(a)(1) STANDARD OPTION. No Participant shall have the right
to elect to have the Trustee purchase an insurance contract on his or her life
for his or her Account under this Plan; however, any life insurance contract
purchased under the terms of a Pre-Existing Plan, which is acceptable to the
Trustee, shall continue to be held by the Trustee for the benefit of the
Participant subject to the conditions of this Section 13.1.
13.1(a)(2) ALTERNATIVE. If so specified in the Adoption Agreement
each Participant who is an Eligible Employee may elect (subject to this Section
13.1) to have the Trustee purchase an insurance contract on his or her life for
his or her Account under the Plan by completing and filing an Election Form with
the Plan Administrator.
13.1(b) PREMIUMS. The aggregate annual premiums on any life insurance
contracts held for a Participant's Account under this Plan shall be subject to
the following limitations:
13.1(b)(1) ORDINARY LIFE. If the life insurance contracts are
ordinary whole life insurance contracts which are contracts with both
nondecreasing death benefits and nonincreasing premiums, such premiums shall be
less than one-half of the aggregate Employer Contributions plus Forfeitures
credited to the Participant's Employer Account and Matching Account.
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13.1(b)(2) TERM AND UNIVERSAL LIFE. If the life insurance
contracts are term life insurance contracts, universal life insurance contracts
and any other life insurance contracts (other than whole life), then such
premiums shall not exceed one-fourth of the aggregate Employer Contributions
plus Forfeitures credited to the Participant's Employer Account and Matching
Account.
13.1(b)(3) COMBINATION. If the life insurance contracts either
combine features of ordinary whole life and other life insurance or consist of
ordinary whole life and other life insurance contracts, the sum of one-half of
the ordinary whole life premiums plus all other life insurance premiums shall
not exceed one-fourth of the aggregate Employer Contributions plus Forfeitures
credited to the Participant's Employer Account and Matching Account.
13.1(c) OWNER AND BENEFICIARY. The Trustee shall apply for and be the
owner of each life insurance contract held under this Plan and also shall be
named as the beneficiary of each such life insurance contract. In the event of
the Participant's death prior to the date as of which the Participant's Account
becomes payable under the Plan, the Trustee, as beneficiary, shall pay the
entire proceeds of such life insurance contracts to the Participant's Account
which shall then be distributed to the surviving Spouse or, if applicable, to
the Participant's Beneficiary in accordance with Section 10. Under no
circumstances shall the Fund retain any part of the proceeds of any life
insurance contracts. In the event of a conflict between the terms of the Plan
and the terms of any life insurance contracts held under this Plan, the Plan
provisions shall control.
13.1(d) ALLOCATIONS. Any dividends or credits earned on a life insurance
contract held under this Plan shall be allocated to the Account of the
Participant for whom the contract was purchased and may be applied to pay the
annual premium on such life insurance contract. The amount of the annual
premium on each such insurance contract shall be charged against the Account of
the insured Participant. The value of any such insurance contract shall be
deemed to be zero for the purposes of allocating the Employer Contribution,
Forfeitures or the Fund Earnings for any Plan Year as provided in Section 6.
13.1(e) DISTRIBUTION TO PARTICIPANT. Subject to Section 10, JOINT AND
SURVIVOR ANNUITY REQUIREMENTS, the life insurance contracts held as part of a
Participant's Account shall be distributed in kind to the Participant upon
retirement or other termination of employment as an Employee for reasons other
than death (1) if such Account is completely nonforfeitable or (2) if the cash
surrender value of such contracts is equal to or less than the nonforfeitable
portion of the Participant's Account. If neither one of these conditions is
satisfied and the Participant does not elect to purchase the life insurance
contracts under Section 13.1(f), the Trustee shall surrender such contracts, add
the proceeds to the Participant's Account and distribute the nonforfeitable
percentage of the Participant's Account in accordance with Section 10.
13.1(f) TERMINATION OF INSURANCE ELECTION. A Participant may direct the
Trustee to stop making premium payments on a life insurance contract held as
part of the Participants
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Account and to surrender such contract or to sell such contract to the
Participant by completing and filing an Election Form with the Plan
Administrator. If the Participant purchases the contract, he or she shall
prepare and deliver to the Trustee all papers needed to properly effect that
purchase and shall pay to the Trustee an amount equal to the cash surrender
value of the contract at the time of the purchase. The amount paid either by
the Participant for the purchase or by the insurance company in connection with
the surrender of a contract shall be credited to the Participant's Account as of
the date payment is made to the Trustee. A Participant automatically shall be
deemed to have directed the Trustee to stop premium payments and to surrender a
life insurance contract immediately before a premium due date if the premium due
on that date would exceed the premium payment limits in Section 13.1(b).
13.2 INDIVIDUALLY DIRECTED INVESTMENTS.
13.2(a) GENERAL.
13.2(a)(1) STANDARD OPTION. No Participant or a Beneficiary may
direct the investment of such individual's Account.
13.2(a)(2) ALTERNATIVE. If so specified in the Adoption
Agreement, a Participant or a Beneficiary may elect how such individual's
Account shall be invested between the investment alternatives available under
the Plan from time to time. The Plan Administrator shall furnish to each
Participant and Beneficiary sufficient information to make informed decisions
with regard to investment alternatives and, if this Plan is intended to satisfy
ERISA Section 404(c), information which satisfies the requirements of the
regulations under ERISA Section 404(c). An individual's investment direction
shall apply
(i) STANDARD OPTION - to the individual's entire Account or
(ii) ALTERNATIVE - only to the portion of the individual's
Account specified in the Adoption Agreement.
13.2(b) ELECTION RULES. The Plan Administrator from time to time shall
establish and shall communicate in writing to such individuals such reasonable
restrictions and procedures for making individual investment elections as the
Plan Administrator deems appropriate under the circumstances for the proper
administration of this Plan. Such restrictions and procedures shall be applied
on a uniform and nondiscriminatory basis to all similarly situated individuals
and, if this Plan is intended to satisfy ERISA Section 404(c), shall be in
accordance with the regulations under ERISA Section 404(c).
13.2(c) NO ELECTION. The Account of an individual for whom no investment
election is in effect under this Section 13.2, either because such individual
failed to make a proper election or
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terminated an election under this Section 13.2, shall be invested as designated
by the Plan Administrator.
13.3 PARTICIPANT LOANS. This Section 13.3 shall apply only if the Employer
specifies in the Adoption Agreement that loans shall be permitted. However, if
loans are not permitted in the Adoption Agreement, any outstanding loans made
under the terms of the Pre-Existing Plan shall be subject to this Section 13.3.
13.3(a) ADMINISTRATION AND PROCEDURES. The Plan Administrator shall
establish objective nondiscriminatory written procedures for the administration
of the loan Program under this Section 13.3 (which written procedures, together
with any written amendments to such procedures, hereby are expressly
incorporated by reference as a part of this Plan), including, but not limited
to,
13.3(a)(1) the class of Participants and Beneficiaries who are
eligible for a loan;
13.3(a)(2) the identity of the person or position authorized to
administer the loan program;
13.3(a)(3) the procedures for applying for a loan;
13.3(a)(4) the basis on which loans will be approved or denied;
13.3(a)(5) the limitations, if any, on the types and amounts of
loans offered;
13.3(a)(6) the procedures for determining a reasonable rate of
interest;
13.3(a)(7) the types of collateral which may be used as security
for a loan; and
13.3(a)(8) the events constituting default and the steps that will
be taken to preserve Plan assets in the event of such default.
13.3(b) NO LOANS TO CERTAIN OWNERS AND FAMILY MEMBERS. No loan shall be
made under this Plan to a Participant or Beneficiary who is
13.3(b)(1) an Owner-Employee,
13.3(b)(2) an employee or officer of an Employer or an Affiliate
which is an electing small business corporation within the meaning of Code
Section 1361 ("S Corporation") who owns (or is considered to own within the
meaning of Code Section 318(a)(1)) on any day during any taxable year of such
corporation for which it is an S Corporation more than 5% of the outstanding
stock of such corporation, or
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13.3(b)(3) a member of the family (as defined in Code Section
267(c)(4)) of a Participant or Beneficiary described in clause (1) or (2).
13.3(c) GENERAL CONDITIONS. If loans are made available after
October 18, 1989 to any Participant or Beneficiary who is a "party in interest"
(as defined in ERISA Section 3(14)) with respect to the Plan, then loans shall
be made available to all Participants and Beneficiaries who are parties in
interest with respect to the Plan. All loans which are made under this Plan
shall comply with the following requirements under Code Section 4975(d)(1) and
ERISA Section 408(b)(1):
13.3(c)(1) such loans shall be made available to Participants and
Beneficiaries who are eligible for a loan on a reasonably equivalent basis;
13.3(c)(2) such loans shall not be made available to Highly
Compensated Employees in an amount greater than the amount made available to
other Employees;
13.3(c)(3) such loans shall be made in accordance with specific
provisions regarding such loans set forth in the Plan and the written procedures
described in Section 13.3(a);
13.3(c)(4) such loans shall bear a reasonable rate of interest;
and
13.3(c)(5) such loans shall be adequately secured.
13.3(d) OTHER CONDITIONS. All loans made under this Plan shall be
subject to the following conditions:
13.3(d)(1) If the loan is secured by any portion of the
Participant's Account and Section 10.5 does not apply to any portion of the
Participant's Account, the Participant's Spouse, if any, must consent in writing
to the granting of such security interest or to any increase in the amount of
security no earlier than the beginning of the 90 day period before such loan is
made; provided
(i) such consent must be in writing before a notary public and
must acknowledge the effect of such loan;
(ii) such consent shall be irrevocable and shall be binding
against the person, if any, identified as the Participant's Spouse at the time
of such consent and any individual who may subsequently become the
Participant's Spouse;
(iii) a new consent shall be required in the event of any
renegotiation, extension, renewal, or other revision of such a loan; and
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(iv) 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 (and may reduce) 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 vested 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.
13.3(d)(2) The loan shall provide for the repayment of principal
and interest in substantially level installments with payments not less
frequently than quarterly over a period of 5 years or less unless such loan is
classified as a "home loan" (as described in Code Section 72(p));
13.3(d)(3) If the loan is secured by any portion of the
Participant's Account, such Account balance shall not be reduced as a result of
a default until a distributable event occurs under the Plan; and
13.3(d)(4) The Participant or Beneficiary shall agree to such
other terms and conditions as are required under the written procedures
described in Section 13.3(a).
13.3(e) CREDITING OF LOAN PAYMENTS.
13.3(e)(1) ACCOUNT ASSET (STANDARD OPTION). The loan to a
Participant whose loan request is granted under this Section 13.3 shall be made
from, and shall be an asset of, the Participant's Account and all principal and
interest payments on such loan shall be credited exclusively to the
Participant's Account.
13.3(e)(2) FUND ASSET (ALTERNATIVE). If the Employer specifies in
the Adoption Agreement that loans shall be treated as an asset of the Fund or,
if any loan which was made under a Pre-Existing Plan was treated as an asset of
the Fund, such loans shall be treated under this Plan as a general Fund
investment and an asset of the Fund, and all principal and interest payments on
such loan shall be credited exclusively to the Fund as a general Fund
investment.
13.3(f) LIMITATIONS ON AMOUNTS. The principal amount of any loan (when
added to the outstanding principal balance of any outstanding loans made under
this Plan or under any other plan which is tax exempt under Code Section 401 and
which is maintained by the Employer or an Affiliate) to the Participant shall
not exceed the lesser of (1) and (2) below:
13.3(f)(1) DOLLAR LIMIT - $50,000 reduced by the excess, if any,
of
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(i) the highest outstanding principal balance of previous loans
to the Participant from the Plans (and any other plan maintained by the Employer
or an Affiliate) during the one year period ending immediately before the date
such current loan is made, over
(ii) the current outstanding principal balance of such previous
loans on the date such current loan is made, or
13.3(f)(2) ACCOUNT LIMIT -
(i) STANDARD OPTION - 50% of the nonforfeitable interest in the
Participant's Account at the time the loan is made or
(ii) ALTERNATIVE - if so specified in the Adoption Agreement,
the greater of $10,000 or the amount specified in Section 13.3(f)(2)(i), but in
no event more than the nonforfeitable interest in the Participant's Account.
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 shall be treated as a loan for purposes of the
limitations in this Section 13.3(f).
13.3(g) FAILURE TO REPAY. If (1) the terms of the loan provide that it
shall become due and payable in full if the Participant's or Beneficiary's
obligation to repay the loan has been discharged through a bankruptcy or any
other legal process or action which did not actually result in payment in full
and (2) such loan is not actually repaid in full, such loan shall be cancelled
on the Fund's books and records and the amount otherwise distributable to such
Participant or Beneficiary under this Plan shall be reduced by the principal
amount of the loan plus accrued but unpaid interest due as determined without
regard to whether the loan had been discharged through a bankruptcy or any other
legal process or action which did not actually result in payment in full. The
Plan Administrator shall have the power to direct the Trustee to take such
action as the Plan Administrator deems necessary or appropriate to stop the
payment of an Account to or on behalf of a Participant who fails to repay a loan
(without regard to whether the obligation to repay such loan had been discharged
through a bankruptcy or any other legal process or action) until the
Participant's Account has been reduced by the principal plus accrued but unpaid
interest due (without regard to such discharge) on such loan or to distribute
the note which evidences such loan in full satisfaction of that portion of such
Account which is represented by the value of such note. Notwithstanding the
foregoing, in the event of default, foreclosure on the note and execution of the
Plan's security interest in the Account shall not occur until a distributable
event occurs under this Plan and interest shall continue to accrue only to the
extent permissible under applicable law.
13.3(h) DISTRIBUTIONS. In the event the Participant's Account becomes
distributable before the loan is repaid in full, then the vested Account balance
shall be adjusted by first
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reducing the vested Account balance by the amount of the security interest in
the Account and then determining the benefit payable. Nothing shall preclude
the Trustee from cancelling the Plan's security interest in the Account and
distributing the note in lieu of any other Plan assets in full satisfaction of
that portion of the Participant's Account represented by the value of the
outstanding balance of the loan or the amount which would have been outstanding
but for a discharge in bankruptcy or through any other legal process.
SECTION 14. ADOPTION, AMENDMENT, WITHDRAWAL AND CONVERSION, MERGER, ASSET
TRANSFERS AND TERMINATION
14.1 ADOPTION.
14.1(a) GENERAL. Subject to the terms and conditions of this Plan, the
Trust Agreement and the Adoption Agreement, any sole proprietorship, partnership
or corporation may adopt this Plan by completing and executing the Adoption
Agreement. The Plan as adopted by the Employer shall be effective for all
purposes (other than as a "prototype plan") as of the Effective Date. However,
the status of the Plan as a "prototype plan" shall be conditioned upon
acceptance of the Adoption Agreement by the Prototype Sponsor and, upon such
acceptance, such status as a "prototype plan" shall be effective retroactive to
the Effective Date except as provided in Section 14.4.
14.1(b) PRE-EXISTING PLAN. If this Plan is adopted as an amendment and
restatement of a Pre-Existing Plan, (1) the Trust Agreement shall be substituted
for the trust or other funding arrangement under the Pre-Existing Plan, (2) the
assets held under such trust or other funding arrangement shall become assets of
the Fund, (3) an Account shall be established for each person who is a
participant or beneficiary in the Pre-Existing Plan, and (4) the dollar value
assigned to such participant's or beneficiary's Pre-Existing Plan account or
accounts shall be credited to such person's Account under this Plan (or to one
or more subaccounts under such Account). All optional forms of benefit
available under the Pre-Existing Plan which must be preserved under Code Section
411(d)(6) shall be available to the Participant under this Plan. Further, such
optional forms shall be described in the Adoption Agreement and shall apply to
the Participant's entire Account balance. Notwithstanding the foregoing, if the
Employer so specifies in the Adoption Agreement and separately accounts for the
benefits attributable to the Pre-Existing Plan as described in Section 14.5(c)
or, if applicable, Section 10.5, the optional forms which must be preserved may
be limited to such separate accounts.
14.1(c) PARTICIPATING AFFILIATES. If this Plan is adopted as a
standardized Plan, each Affiliate shall automatically become a Participating
Affiliate effective as of the later of the Effective Date or the date such
entity first becomes an Affiliate. If this Plan is adopted as a nonstandardized
Plan, an Affiliate of the Employer may adopt the Employer's Plan effective as of
any date on or after the Effective Date. An Affiliate's execution of the
Adoption Agreement (or a separate signature page to the Adoption Agreement)
shall evidence the Participating
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Affiliate's adoption of the Plan and the effective date of such adoption. In
adopting this Plan, each Participating Affiliate is deemed to have authorized
the Employer to effect all actions under this Plan on its behalf, including but
not limited to the powers reserved to the Employer under this Section 14 and the
power to enter into such agreements with the Trustee or others as may be
necessary or appropriate under the Plan.
14.2 AMENDMENT.
14.2(a) PROTOTYPE SPONSOR. Subject to the restrictions of Section 14.3,
the Prototype Sponsor shall have the right at any time and from time to time to
amend this Plan in any respect whatsoever in writing. To the extent required
under the procedures and rules in effect for master and prototype plans at the
time of any such amendment, notice of such amendment shall be given to the
Employer by the Prototype Sponsor as soon as practicable under the
circumstances.
14.2(b) EMPLOYER. Subject to the restrictions of Section 14.3, the
Employer shall have no right to amend this Plan except (1) by entering into a
new Adoption Agreement with the Prototype Sponsor, (2) by adding such language
to the Adoption Agreement as is necessary to allow the Plan to continue to
satisfy the requirements of Code Section 415 or Code Section 416 because of the
required aggregation of multiple plans, (3) by adopting certain model amendments
published by the Internal Revenue Service which specifically provide that such
adoption would not cause the Plan to be treated as an individually designed
plan, or (4) by withdrawing this Plan as a prototype and converting it into an
individually designed plan as provided in Section 14.4.
14.3 CERTAIN AMENDMENT RESTRICTIONS.
14.3(a) GENERAL. No amendment to the Plan shall be made which would (1)
deprive a Participant of the nonforfeitable percentage of his or her Account
balance accrued to the later of the effective date of the amendment or the date
the amendment is adopted, or (2) decrease a Participant's Account balance or
eliminate an optional form of benefit except to the extent permissible under
Code Section 412(c)(8), Section 401(a)(4) and Section 411(d)(6) and the
regulations under those sections.
14.3(b) CHANGE IN SERVICE CALCULATION METHOD. If an amendment changes
the method of calculating service, each Employee who had any service credit
under such prior method shall be credited with any service for any computation
period during which such amendment was effective in accordance with the rules in
Section 3.
14.3(c) CHANGE IN VESTING SCHEDULE. If an amendment directly or
indirectly affects the computation of a Participant's nonforfeitable percentage
of his or her Account or if the Plan's vesting schedule changes as a result of a
change in the Plan's status as a Top-Heavy Plan (as described in Section 12.4),
each Participant with at least 3 years of service with the Employer or an
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Affiliate may elect, within a reasonable period after the adoption of the
amendment, to have the nonforfeitable percentage of his or her Account computed
under this Plan without regard to such amendment. In the case of a Participant
who does not have at least one Hour of Service in any Plan Year beginning after
December 31, 1988, the preceding sentence shall be applied by substituting
5 years of service for 3 years of service. 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
14.3(c)(1) 60 days after the amendment is adopted;
14.3(c)(2) 60 days after the amendment becomes effective; or
14.3(c)(3) 60 days after the Participant is issued written notice
of the amendment by the Plan Administrator.
Furthermore, if an amendment changes the Plan's vesting schedule, the
nonforfeitable percentage (determined as of the later of the date the amendment
is adopted or the date it becomes effective) of the employer-derived Account
balance of each Employee who is a Participant as of such date shall not be less
than the percentage computed under the Plan without regard to such amendment.
14.4 WITHDRAWAL AS A PROTOTYPE AND CONVERSION TO INDIVIDUALLY DESIGNED PLAN.
14.4(a) VOLUNTARY CONVERSION. The Employer may voluntarily withdraw this
Plan as a "prototype plan" and convert it to an individually designed plan by
written notice filed with the Trustee and the Prototype Sponsor. For purposes
of this Section 14.4, such withdrawal shall be effective with respect to the
Employer's plan and the Trustee as of the effective date of such withdrawal, but
such withdrawal shall not relieve the Employer of any responsibilities or
liabilities to the Prototype Sponsor until 60 days after the date the Prototype
Sponsor receives written notice of such withdrawal unless the Prototype Sponsor
agrees in writing to an earlier effective date for such withdrawal.
14.4(b) INVOLUNTARY CONVERSION. The Employer shall be deemed to have
withdrawn this Plan as a "prototype plan" and converted it to an individually
designed plan effective as of the earlier of the date
14.4(b)(1) the Internal Revenue Service or a court determines that
this Plan fails to meet the requirements of Code Section 401;
14.4(b)(2) the Trustee ceases to maintain a brokerage account for
the Plan with the Prototype Sponsor or with an approved subsidiary of the
Prototype Sponsor;
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14.4(b)(3) the Prototype Sponsor notifies the Employer in writing
that the Prototype Sponsor for reasons sufficient to the Prototype Sponsor has
terminated its sponsorship of its prototype plan program or of this Plan for the
Employer; or
14.4(b)(4) the Employer amends any provision of this Plan or the
Adoption Agreement (other than in accordance with Section 14.2(b)(1) through
(3)) including an amendment because of a waiver of the minimum funding
requirement under Code Section 412(d).
14.4(c) EFFECT OF WITHDRAWAL AND CONVERSION. If this Plan is withdrawn
as a prototype and converted to an individually designed Plan under this Section
14.4, the Employer as of the effective date of such withdrawal shall assume the
right and responsibility to amend the Plan under Section 14.2(a) and thereafter
only the Employer shall make amendments to this Plan; provided, (1) no such
amendment shall affect the Trustee's rights or duties under this Plan without
the Trustee's prior written consent and (2) any such amendment shall be subject
to the restrictions of Section 14.3.
14.5 MERGER, CONSOLIDATION OR ASSET TRANSFERS.
14.5(a) GENERAL. In the case of any Plan merger or consolidation with,
or transfer of assets or liabilities to or from, any other employee benefit
plan, each person for whom an Account then is maintained shall be entitled to
receive a benefit from such plan, if it is then terminated, which is equal to or
greater than the benefit such person would have been entitled to receive
immediately before such merger, consolidation or transfer, if this Plan then had
been terminated.
14.5(b) AUTHORIZATION. The Plan Administrator may authorize the Trustee
to accept a transfer of assets from or transfer Fund assets to the trustee,
custodian or insurance company of any other plan which satisfies the
requirements of Code Section 401(a) in connection with a merger or consolidation
with, or other transfer of assets and liabilities to or from any such plan,
provided that the transfer will not affect the qualification of this Plan under
Code Section 401(a) and the assets to be transferred are acceptable to the
Trustee.
14.5(c) SEPARATE ACCOUNT. The Plan Administrator may establish separate
bookkeeping accounts for any assets transferred to the Trustee under this
Section 14.5 and shall establish such separate bookkeeping accounts if required
under this Plan. If separate accounts are maintained with respect to
transferred assets, no contributions or Forfeitures under this Plan shall be
credited to such separate accounts, but such accounts shall share in the Fund
Earnings on the same basis as each other Account under Section 6.2. Any
individual for whom an Account is established under this Section 14.5 shall
become a Participant in this Plan as of the effective date of the merger,
consolidation or asset transfer; however, no contributions shall be made by or
on behalf of such individual under this Plan unless such individual is otherwise
entitled to such contributions under the terms of this Plan.
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14.5(d) CODE SECTION 411(D)(6) PROTECTED BENEFITS. All optional forms of
benefit available under the transferor plan which must be preserved under Code
Section 411(d)(6) shall be available to the Participant under this Plan unless
such transfer meets the requirements of Code Section 414(1) and the Participant
has made an elective transfer which satisfies the requirements set forth in
Q&A-3(b) of Section 1.411(d)-4 of the Federal Income Tax Regulations. Further,
such optional forms shall be described in the Adoption Agreement and, generally,
shall apply to the Participant's entire Account balance. Notwithstanding the
foregoing, if the Employer so specifies in the Adoption Agreement and separately
accounts for such transferred assets, the optional forms which must be preserved
may be limited to such separate account.
14.6 TERMINATION.
14.6(a) RIGHT TO TERMINATE. The Employer may terminate or partially
terminate this Plan or discontinue contributions to this Plan at any time by
written action of the Board filed with the Trustee and the Prototype Sponsor.
The Employer reserves the right to terminate the participation in this Plan by
any Participating Affiliate at any time by written action. Furthermore, a
Participating Affiliate's participation in this Plan automatically shall
terminate if (and at such time as) its status as an Affiliate terminates for any
reason whatsoever (other than through a merger or consolidation into another
Participating Affiliate). However, a Participating Affiliate's termination of
participation in this Plan shall not be deemed to be a termination or partial
termination of the Plan except to the extent required under the Code. Upon
complete termination of this Plan, any unallocated amounts (other than amounts
in a Code Section 415 suspense account described in Section 7.2(b)) shall be
allocated in accordance with the Plan terms but, if the Plan terms do not
address the allocation of such amounts, they shall be allocated in a
nondiscriminatory manner prior to distribution of Plan assets.
14.6(b) FULL VESTING UPON TERMINATION. If this Plan is terminated or
partially terminated under this Section 14.6 or if there is a complete
discontinuance of contributions under this Plan, the Account of each affected
Employee of the Employer or an Affiliate shall become nonforfeitable on the
effective date of such termination or partial termination or complete
discontinuance of contributions, as the case may be. In the event of a complete
termination of this Plan or a complete discontinuance of contributions, each
other Account (except to the extent otherwise nonforfeitable under the terms of
this Plan) shall become a Forfeiture and shall be allocated as such under
Section 6.3 as of the effective date of such complete termination or complete
discontinuance as if such date was the last day of a Plan Year.
SECTION 15. ADMINISTRATION
15.1 NAMED FIDUCIARIES. The Plan Administrator and the Employer (if the Plan
Administrator is not the Employer) shall be the Named Fiduciaries responsible to
the extent of their powers and responsibilities assigned in the Plan for the
control, management and administration of the Plan. The Plan Administrator, the
Employer and the Trustee (other than Smith Barney Shearson
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Trust Company) shall be the Named Fiduciaries responsible to the extent of their
respective powers and responsibilities assigned to them in the Trust Agreement
for the safekeeping, control, management, investment and administration of the
assets of the Fund. Any power or responsibility for the control, management or
administration of the Plan or the Fund which is not expressly assigned to a
Named Fiduciary under the Plan or the Trust Agreement, or with respect to which
the proper assignment is in doubt, shall be deemed to have been assigned to the
Employer as a Named Fiduciary. One Named Fiduciary shall have no responsibility
to inquire into the acts and omissions of another Named Fiduciary in the
exercise of powers or the discharge of responsibilities assigned to such other
Named Fiduciary under the Plan or the Trust Agreement. Any person may serve in
more than one fiduciary capacity under the Plan or the Trust Agreement and a
fiduciary may be a Participant provided such individual otherwise satisfies the
requirements of Section 4.
A Named Fiduciary, by written instrument filed by the Plan Administrator with
the records of the Plan, may designate a person who is not a Named Fiduciary to
carry out any of its responsibilities under the Plan or Trust Agreement, other
than the responsibilities of the Trustee for the safekeeping, control,
management, investment and administration of the assets of the Fund, except to
the extent the Trustee's responsibility for investment decisions is delegated to
the Employer, the Plan Administrator, or an investment manager.
15.2 ADMINISTRATIVE POWERS AND DUTIES. Except to the extent expressly reserved
under the Plan or the Trust Agreement to the Employer, the Board, or the
Trustee, the Plan Administrator shall have the exclusive responsibility and
complete discretionary authority to control the operation, management and
administration of the Plan with all powers necessary to enable it properly to
carry out such responsibilities, including (but not limited to) the power to
construe the Plan, the related Adoption Agreement, and the Trust Agreement, to
determine eligibility for benefits and to resolve all interpretative, equitable
or other questions that arise under the Plan or the Trust Agreement. The
decisions of the Plan Administrator on all matters within the scope of its
authority shall be final and binding. To the extent a discretionary power or
responsibility under the Plan or Trust Agreement is expressly assigned to a
person other than the Plan Administrator, such person shall have complete
discretionary authority to carry out such power or responsibility and such
person's decisions on all matters within the scope of such person's authority
shall be final and binding.
15.3 AGENT FOR SERVICE OF PROCESS. The agent for service of process for this
Plan shall be the person who is identified as the agent for service of process
in the summary plan description for this Plan. Neither the Prototype Sponsor
nor any of its affiliates shall be the agent for service of process for the
Plan.
15.4 REPORTING AND DISCLOSURE. All records regarding the operation, management
and administration of this Plan shall be maintained by the Plan Administrator.
The Plan Administrator shall satisfy any federal or state requirement to report
and disclose any
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information regarding this Plan to any federal or state department or agency, or
to any Participant or Beneficiary.
SECTION 16. MISCELLANEOUS
16.1 SPENDTHRIFT CLAUSE AND QUALIFIED DOMESTIC RELATIONS ORDERS. Except to the
extent permitted by law, no Account, benefit, payment or distribution under this
Plan or Trust Agreement shall be subject to attachment, garnishment, levy,
execution or any claim or legal process of any creditor of a Participant or
Beneficiary, and no Participant or Beneficiary shall have any right to alienate,
commute, anticipate, or assign all or any part of such individual's Account,
benefit, payment or distribution under this Plan or Trust Agreement. The
preceding sentence also shall apply to the creation, alienation, 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 ("QDRO") within the meaning of Code Section
414(p) and such order is entered on or after January 1, 1985. The Plan
Administrator shall establish uniform and nondiscriminatory procedures regarding
the determination of whether a domestic relations order constitutes a QDRO, the
timing of distributions made pursuant to a QDRO and the treatment of any
separate account established under this Plan pursuant to a QDRO. Unless
otherwise expressly specified in such procedures, (1) the Plan Administrator
shall treat a domestic relations order entered before January 1 1985 as a QDRO
in accordance with Code Section 414(p) and (2) a distribution may be made to an
alternate payee pursuant to a QDRO prior to the earliest date that a
distribution could be made to a Participant under the terms of this Plan and
prior to a Participant's "earliest retirement age" under Code Section 414(p).
The determinations and the distributions made by, or at the direction of, the
Plan Administrator under this Section 16.1 shall be final and binding on the
Participant and on all other persons interested in such order.
16.2 BENEFITS SUPPORTED ONLY BY TRUST FUND. Any person having any claim for
any benefit under this Plan shall look solely to the assets of the Fund for the
satisfaction of that claim. In no event shall the Prototype Sponsor, the
Trustee, the Plan Administrator, the Employer or a Participating Affiliate or
any of their employees, officers, directors or their agents be liable in their
individual capacities to any person whomsoever for the payment of any benefits
under this Plan.
16.3 DISCRIMINATION. The Plan Administrator shall administer the Plan in a
manner which it deems equitable under the circumstances for all similarly
situated Employees, Participants, Spouses and Beneficiaries; provided, the Plan
Administrator shall not permit discrimination in favor of Highly Compensated
Employees of the Employer or any Participating Affiliate which would be
prohibited under Code Section 401(a).
16.4 CLAIMS. Any payment to a Participant or Beneficiary or to the legal
representative or heirs-at-law of any such person made in accordance with the
provisions of this Plan shall to the
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extent of such payment be in full satisfaction of all claims under this Plan
against the Trustee, Plan Administrator, a Named Fiduciary, the Employer and any
Participating Affiliate, any of whom may require such person, such person's
legal representative or heirs-at-law, as a condition precedent to such payment,
to execute a receipt and release in such form as shall be determined by the
Trustee, Plan Administrator, a Named Fiduciary, the Employer or a Participating
Affiliate, as the case may be.
16.5 NONREVERSION. Except as provided in Section 7.2(b) and in this Section
16.5 neither the Employer nor any Participating Affiliate shall have any present
or prospective right, claim, or interest in the Fund or in any Employer
contribution made to the Trustee.
To the extent permitted by the Code and ERISA, the Employer contributions
described in this Section 16.5, less any losses on such contributions, shall be
returned by the Trustee to the Employer or to any Participating Affiliate upon
the written direction of the Plan Administrator in the event that:
16.5(a) an Employer contribution is made by a mistake of fact, provided
such return is effected within one year after the payment of such contribution;
16.5(b) a final judicial or Internal Revenue Service determination is
made that this Plan fails to satisfy the requirements of Code Section 401 with
respect to its initial qualification (provided, if the Employer is not entitled
to rely on the Prototype Sponsor's opinion letter, the application for the
initial qualification of the Plan is made on or before the date 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), in
which event all Employer contributions made before such judicial or
administrative determination (whichever last occurs) plus any earnings and minus
any losses shall be returned within one year after such determination, all such
contributions being hereby conditioned upon this Plan satisfying all applicable
requirements under Code Section 401 from and after its adoption; or
16.5(c) a deduction for an Employer contribution is disallowed under Code
Section 404, in which event such contribution shall be returned within one year
after such disallowance, all such contributions being hereby conditioned upon
being deductible under Code Section 404.
16.6 EXCLUSIVE BENEFIT. The corpus or income of the Fund shall not be diverted
to or used for any purpose other than the exclusive benefit of Participants or
Beneficiaries.
16.7 EXPENSES. Any expenses of the Fund which are properly allocable to an
individual's Account (including, but not limited to, expenses related to an
individual's investment directions, annuity contract purchases and other
transactional fees for processing distributions) may be charged directly against
such individual's Account if so provided in the administrative procedures
established by the Plan Administrator.
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16.8 SECTION 16 OF SECURITIES EXCHANGE ACT OF 1934. If this Plan is invested
in employer securities and this Plan permits employees of the Employer who are
subject to the reporting requirements of Section 16 of the Securities Act of
1934, as amended ("Act") to receive awards, then notwithstanding any other
provision of this Plan, the provisions of this Plan that set forth the formula
or formulas that determine the amount, price or timing of awards to such persons
and any other provisions of this Plan of the type referred to in Section
16b-3(c)(2)(ii) of the Act shall not be amended more than once every six months,
other than to comport with changes in the Code, ERISA, or the rules thereunder.
Further, to the extent required, the employees described in the preceding
sentence shall be subject to such withdrawal, investment and other restrictions
necessary to satisfy Rule 16b-3 under the Act. This Section 16.8 is intended to
comply with Rule 16b-3 under the Act and shall be effective only to the extent
required by such rule and shall be interpreted and administered in accordance
with such rule.
16.9 ARBITRATION. Any claims or controversies with the Prototype Sponsor
related to this Plan are subject to arbitration in accordance with the
arbitration provisions of the Smith Barney Shearson Qualified Retirement Plan
and IRA Client Agreement or any successor to such agreement, which provisions
hereby are expressly incorporated herein by reference.
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PART II
SMITH BARNEY SHEARSON
PROTOTYPE DEFINED CONTRIBUTION
TRUST AGREEMENT
<PAGE>
PART II. SMITH BARNEY SHEARSON
PROTOTYPE DEFINED CONTRIBUTION PLAN TRUST AGREEMENT
SECTION 1. INTRODUCTION AND CONSTRUCTION
1.1 INTRODUCTION. This Trust Agreement is a part of the Smith Barney Shearson
Prototype Defined Contribution Plan and is entered into between the Employer and
the Trustee effective as of the date the Adoption Agreement is executed by the
Employer and the Trustee. If the Plan is adopted as an amendment and
restatement of a Pre-Existing Plan, this Trust Agreement shall amend and restate
the trust agreement or other funding arrangement for the Pre-Existing Plan.
1.2 DEFINITIONS. The terms in this Trust Agreement which begin with a capital
letter shall have the meanings set forth in Section 2 of the Plan. For purposes
of this Trust Agreement, "SBSTC" shall mean Smith Barney Shearson Trust Company
and any successor in interest to Smith Barney Shearson Trust Company.
1.3 CONTROLLING LAWS. To the extent such laws are not preempted by federal
law, this Trust Agreement shall be construed and interpreted under the laws of
the state specified in the Adoption Agreement; provided, if SBSTC has been
appointed as Trustee, this Trust Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
1.4 CONSTRUCTION. The headings and subheadings in this Trust Agreement have
been inserted for convenience of reference only and are to be ignored in the
construction of its provisions. Wherever appropriate the masculine shall be
read as the feminine. the plural as the singular, and the singular as the
plural. References in this Trust Agreement to a section (Section) shall be to
a section in this Trust Agreement unless otherwise indicated. References in
this Trust Agreement to a section of the Code, ERISA or any other federal law
shall also refer to the regulations issued under such section.
The Employer intends that the Plan and this Trust Agreement and the related
Adoption Agreement which are part of the Plan satisfy the requirements for tax
exempt status under Code Section 401(a), Code Section 501(a) and related Code
sections and that the provisions of this Trust Agreement, the Plan and the
related Adoption Agreement be construed and interpreted in accordance with the
requirements of the Code and the regulations under the Code.
Further, except as expressly stated otherwise, no provision of the Plan or this
Trust Agreement or the related Adoption Agreement is intended to nor shall grant
any rights to Participants or Beneficiaries or any interest in the Fund in
addition to those minimum rights or interests required to be provided under
ERISA and the Code and the regulations under ERISA and the Code.
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Nothing in the Plan or this Trust Agreement or the related Adoption Agreement
shall be construed to prohibit the adoption or the maintenance of the Plan and
Trust Agreement as an individually designed plan and trust agreement or the
adoption of this Trust Agreement in connection with an individually designed
plan, but in such event, the Employer may not rely on the opinion letter issued
to the Prototype Sponsor and the Prototype Sponsor shall have absolutely no
responsibility for such individually designed plan and trust agreement.
Finally, in the event of any conflict between the terms of the Plan and the
terms of this Trust Agreement or the Adoption Agreement, the terms of the Plan
shall control.
SECTION 2. GENERAL
All the Trustee's rights, power, authorities, duties and responsibilities of any
kind or description whatsoever respecting the Fund shall be solely and
exclusively as expressly stated in the Plan and in this Trust Agreement. Except
to the extent the Employer or Plan Administrator also is the Trustee for the
Plan, the Trustee shall have no responsibility whatsoever with respect to the
maintenance, operation and administration of the Plan. No right, power,
authority, duty or responsibility of any kind or description whatsoever
respecting the Fund or the maintenance, operation or administration of the Plan
shall be attributed to the Trustee on account of any ambiguity or inference
which might be interpreted by any person to exist in the terms of the Plan or
this Trust Agreement. Finally, if SBSTC is Trustee, any discretionary powers,
duties or responsibilities assigned to the Trustee in this Trust Agreement shall
be exercised or performed by SBSTC only upon the direction of the Plan
Administrator, the Employer or an Investment Manager, and SBSTC shall exercise
no discretion with respect to the investment or management of the Fund except to
the extent that Fund assets are invested in a common or collective group trust
maintained by SBSTC or an affiliate of SBSTC.
SECTION 3. CONTRIBUTIONS AND TRUST FUND
The Employer and the Trustee shall establish reasonable procedures for making
and accepting contributions to the Fund and any asset transfers pursuant to
Section 9 of this Trust Agreement. The Trustee shall accept any contributions
the Trustee reasonably believes are paid to it in accordance with such
procedures, except that the Trustee may refuse to accept any non-cash
contributions or assets which either are not acceptable to the Trustee or the
acceptance of which the Trustee reasonably believes would constitute a
prohibited transaction under ERISA or the Code. If this Trust Agreement is an
amendment and restatement of a trust agreement or other funding arrangement for
a Pre-Existing Plan, the assets held under such pre-existing trust agreement or
other funding arrangement shall (to the extent acceptable to the Trustee and
permissible under the prohibited transaction rules of ERISA and the Code) be
transferred to the Trustee pursuant to reasonable transfer procedures
established by the Trustee, the Employer and any predecessor trustee, custodian
or insurance carrier and shall become assets of the Fund. The Trustee shall
have no responsibility with respect to such transferred assets except to receive
such
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assets and to hold and administer the same thereafter in accordance with this
Trust Agreement. The Trustee shall not be responsible for any act or omission
of a predecessor trustee or any other person with respect to assets that are
transferred to the Trustee when the Fund is a continuation of a trust fund or
other funding arrangement under a Pre-Existing Plan and shall not be required to
make any claim or demand against any of such persons unless the Employer
requests in writing that the Trustee make such claim or demand. The Fund shall
consist of all such contributions and assets together with the income or gains
on such contributions and assets, less any payments, distributions, transfers,
assessments and losses from or on such contributions and assets. The Fund shall
be managed and controlled by the Trustee pursuant to the terms of this Trust
Agreement without distinction between principal and income and without liability
for the payment of any interest on such assets. The Trustee shall not be
responsible for the amount or the collection of any contributions to the Fund or
for the determination of the amount or frequency of any contribution required by
the Plan, ERISA or the Code and such responsibilities shall be borne solely by
the Employer and the Participating Affiliates. Further, the Trustee, for
investment purposes, may combine into one fund the Funds created under each Plan
maintained by the Employer and Participating Affiliates and (unless otherwise
specified) all references to the Fund in this Trust Agreement shall be
references to the combined Funds; provided that (a) the Trustee shall maintain
separate books and records of the assets, contributions, distributions and
income or losses allocable to each such Fund and (b) no part of one Fund shall
be used to pay the expenses, benefits or liabilities attributable to any other
Fund.
SECTION 4. MANAGEMENT OF TRUST FUND
4.1 PLAN ADMINISTRATOR. With respect to the Fund, the Plan Administrator shall
have those duties and responsibilities specified in this Trust Agreement and,
additionally, shall have the duty to advise the Trustee and any other person of
such facts and issue such directions as may be required to enable the Trustee
and such other person to execute their duties and responsibilities under this
Agreement.
4.2 TRUSTEE. The Trustee shall have the sole and exclusive power (except as
otherwise provided in this Trust Agreement) in the management and control of the
Fund to do all things and execute such instruments as may be deemed necessary or
proper, including the powers described in this section, all of which may be
exercised without order of or report to any court. To the extent the exercise
of any such power would require the exercise of discretion by SBSTC as the
Trustee (other than the management and control of any assets invested in any
common or collective trust maintained by SBSTC or its affiliates), SBSTC as
Trustee shall exercise such power only in accordance with the specific direction
of the Plan Administrator, the Employer or an Investment Manager.
4.2(a) To sell, exchange, or otherwise dispose of any property at any time
held or acquired by the Fund, at public or private sale, for cash or on terms,
without advertisement, including the right to lease for any term notwithstanding
the period of the Trust Agreement;
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4.2(b) To vote in person or by proxy any corporate stock or other security
and to agree to or take, or refrain from taking, any other action necessary or
appropriate for a shareholder or owner in regard to any reorganization, merger,
consolidation, liquidation, bankruptcy or other procedure or proceeding
affecting any stock, bond, note or other property;
4.2(c) To compromise, settle or adjust any claim or demand by or against
the Fund and to agree to any rescission or modification of any contract or
agreement affecting the Fund;
4.2(d) To borrow money, and to secure the same by mortgaging, pledging, or
conveying the property of the Fund;
4.2(e) To deposit any stock, bond or other security in any depository or
other similar institution and to register any stock, bond or other security in
the name of a nominee or in street name provided such securities are held on
behalf of the Fund by a bank or trust company, subject to supervision by the
United States or a State, a broker or dealer registered under the Securities
Exchange Act of 1934 ("Act") or a "clearing agency" as defined in the Act, or
their nominees, without the addition of words indicating that such security is
held in a fiduciary capacity, but accurate records shall be maintained showing
that such security is a Fund asset and the Trustee shall be responsible for the
acts of such nominee;
4.2(f) To hold cash in such amounts as may be in its opinion reasonable
for the proper operation of the Fund;
4.2(g) To invest any and all monies in such stocks, bonds, securities,
investment company or trust shares or mutual funds, including mutual funds which
invest in commodities, mortgages, notes, choses in action, real estate,
improvements thereon, and other property as the Trustee may deem appropriate,
including "employer securities" (whether or not such securities are "qualifying
employer securities") or "employer real property" (whether or not such property
is "qualifying employer real property"), as such terms are defined for purposes
of ERISA Section 407, except to the extent prohibited under ERISA or the Code;
4.2(h) To grant, sell, purchase, or exercise any option of any kind or
description whatsoever to purchase or sell any security or other property which
is a permissible investment under this Section 4(b), provided the Trustee in no
event shall grant or sell any option under which any person can require the Fund
to sell any security or other property which the Fund at the time of such grant
or sale does not hold in an amount sufficient to cover such option and any other
outstanding option granted or sold by the Trustee, and the Trustee in no event
shall dispose of any such security or other property covering any such option
until such option is exercised or otherwise expires;
4.2(i) To invest all, or any part, of the assets of the Fund in any
common, collective or group trust fund maintained under Code Section 584 or
Revenue Ruling 81-100, 1981-1 C.B. 326
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exclusively for the investment of the assets of tax exempt pension and from
sharing plans, the provisions of which upon such investment shall automatically
be adopted and made a part of this Trust Agreement for the period such
investment is made in such common, collective or group trust fund; provided, if
SBSTC is the Trustee,
4.2(i)(1) the Trustee shall, upon receipt of written investment
directions, invest some or all of the Fund in one or more collective trust funds
(including, without limitation, any collective trust fund maintained by the
Trustee or by any affiliate of the Trustee) that are exempt from taxation under
Code Section 501(a);
4.2(i)(2) any such investment shall be subject to all the provisions
of the declaration of trust creating such collective trust fund which is adopted
in its entirety as an integral part of the Plan and of this Trust Agreement;
4.2(i)(3) the Employer, Plan Administrator or Investment Manager
shall not have any right to vote or otherwise in any manner control the
operation and management of any such collective trust fund, the operation of any
party to any such collective trust fund, or any beneficiary of any such
collective trust fund;
4.2(i)(4) the Trustee (or its affiliate) is authorized to utilize
investment advice received from investment advisers for any collective trust
fund maintained by the Trustee (or its affiliate) including, without limitation,
such advice received from [SLH Capital Management and SLH Asset Management, each
of which is a division of] an affiliate of the Trustee, and to utilize the
brokerage services of the Prototype Sponsor, an affiliate of the Trustee; and
4.2(i)(5) the Employer, Plan Administrator or Investment Manager, as
applicable, shall determine, prior to any direction by either of them to invest
the Fund in any such collective trust fund, that the services provided to the
Plan through the collective trust fund including, without limitation, any
investment advisory services provided by the Trustee (or its affiliate) by [SLH
Capital Management or SLH Asset Management] an brokerage services provided by
the Prototype Sponsor are (A) necessary to the operation of the Plan, (B)
furnished under a declaration of trust which is reasonable and (C) furnished for
reasonable compensation;
4.2(j) To purchase, hold, sell, surrender or distribute any investment
contract, life insurance contract or annuity contract as directed by a
Participant or the Plan Administrator in accordance with the Plan;
4.2(k) To make a participant loan as directed by the Plan Administrator;
and
4.2(l) To make such other investments as the Trustee in its discretion
shall deem best or if SBSTC is the Trustee or if the Trustee is subject to the
direction of another person, as
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directed by someone other than the Trustee, without regard to any law now or
hereafter in force (other than ERISA) limiting the investments of trustees or
other fiduciaries.
The Trustee shall not be required to make any inventory or appraisal or report
to any court, nor to secure any order of court for the exercise of any power
contained in this Trust Agreement, and shall not be required to give bond
(except as required by ERISA).
Notwithstanding the foregoing, if SBSTC is the Trustee, SBSTC shall invest all
assets of the Fund which are to be invested on an interim basis pending
reinvestment, distribution or other disbursement either (1) in depository
accounts bearing a reasonable rate of interest which are maintained by SBSTC or
by any affiliate of SBSTC or (2) in commingled short-term investment funds which
are maintained by SBSTC or by any affiliate of SBSTC, in which event the
provisions of Section 4(b)(9) of this Trust Agreement shall apply.
Except as agreed to in writing by the Trustee and the Employer, the Trustee
shall not be liable and shall be indemnified and held harmless by the Employer
for any liability, loss, damage, expense, assessment or other cost of any kind
or description whatsoever, which the Trustee incurs as a result of or arising
out of (1) any action taken at the direction of the Employer, the Plan
Administrator or an Investment Manager, (2) any failure to act if, under the
terms of this Trust Agreement, action can be taken only after receipt from the
Employer, the Plan Administrator or an Investment Manager of specific
directions, (3) any action or failure to act based on advice of legal counsel to
the Employer or the Plan Administrator, or (4) any failure to act pending the
receipt of direction from the Employer, the Plan Administrator or an Investment
Manager, when the Trustee has made a written request for such direction,
provided such action or failure to act is not attributable to fraud, misconduct,
negligence or error by the Trustee. Further, if SBSTC is the Trustee SBSTC may
from time to time request the advice of counsel on any legal matter, including
the interpretation of the Plan and this Trust Agreement, and shall be
indemnified and held harmless for any and all liability, loss, damage, expense,
assessment or other cost of any kind or description resulting from or on account
of its services as Trustee under the Plan, including but not limited to, any
co-fiduciary liability under ERISA Section 405 and any liability, damage,
expense, assessment or other cost arising out of its actions in accordance with
advice of counsel. Except as agreed to in writing by the Trustee and the
Employer, the provisions of this paragraph shall survive the term of this Trust
Agreement and may not be amended by any person or entity other than the
Prototype Sponsor or terminated except with the consent of the Trustee.
4.3 INVESTMENT MANAGER. The Plan Administrator as a Named Fiduciary at any
time may appoint in writing a person, or more than one person, including,
subject to Section 4(i) of this Trust Agreement, the Prototype Sponsor or any of
its affiliates, who either (1) is registered as an investment adviser under the
Investment Advisers Act of 1940 ("Act"), (2) is a bank, as defined in the Act,
or (3) is an insurance company which, within the meaning of ERISA Section 3(38),
is qualified to manage, acquire and dispose of the assets of an employee benefit
plan under the
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laws of more than one state, as an investment manager pursuant to ERISA Section
3(38) ("Investment Manager") for all of the Fund or for a specified portion of
the Fund allocated by the Plan Administrator to such Investment Manager's
management account ("Management Account").
The Plan Administrator shall notify the Trustee of such appointment and of the
date such appointment becomes effective, and such Investment Manager shall have
the sole responsibility and duty and the sole power, without prior consultation
with the Board, the Employer, the Plan Administrator, the Trustee, or any other
person, to manage and direct or effect the acquisition and disposition of the
assets of the Fund allocated to such Management Account from the date the
appointment as Investment Manager becomes effective. The Plan Administrator as
a Named Fiduciary also may terminate the appointment of any person as an
Investment Manager and may cause assets of the Fund to be added to or deleted
from any Management Account.
The Investment Manager may exercise his or her power through procedures as
agreed upon with the Trustee which satisfy the requirements of the securities
laws and the rules of the New York Stock Exchange (and any other exchange on
which securities are traded for such manager's Management Account), and the
Trustee shall not be liable in any respect to any person, and shall be
indemnified and held harmless by the Employer, for acting in accordance with
such procedures. Pending receipt of directions from the Investment Manager, any
cash received by the Trustee from time to time for such manager's Management
Account may be retained in the Fund in cash. If an Investment Manager ceases to
have investment responsibility for the Management Account, the Plan
Administrator or the Employer, as authorized in accordance with Section 4(d) of
this Trust Agreement, shall manage such assets in accordance with Section 4(d)
or shall appoint another Investment Manager to manage such assets.
4.4 PLAN ADMINISTRATOR OR EMPLOYER INVESTMENT DIRECTIONS. The Board at any
time may authorize in writing the Plan Administrator or the Employer as a Named
Fiduciary to manage and direct the investment of all or any specified portion of
the assets of the Fund as determined by the Board, and the Board at any time may
modify or terminate such authorization in writing. If SBSTC is appointed as
Trustee, the Employer shall automatically be deemed to be so authorized to
manage and direct the investment of the entire Fund; provided, the Employer may
specify in the Adoption Agreement that such direction shall be made by the Plan
Administrator. In the event the Plan Administrator or the Employer is
authorized to manage and direct the investment of Fund assets under this Section
4(d), the provisions of Section 4(c) of this Trust Agreement shall apply in all
respects as if the Plan Administrator or the Employer, as applicable, was an
Investment Manager and the portion of the assets subject to such management and
direction was a Management Account.
4.5 PARTICIPANT INVESTMENT DIRECTIONS. If the Plan permits a Participant or a
Beneficiary to direct the investment of such individual's Account, the Plan
Administrator shall direct the Trustee to establish the investment alternatives
designated by the Plan Administrator and to accept directions to invest all or
any specified portion of the Participant's Account among such
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alternatives. The Plan Administrator in consultation with the trustee shall
establish such reasonable rules for effecting the investment elections as the
Plan Administrator deems necessary or appropriate and such rules shall be
applied on a uniform and nondiscriminatory basis to all similarly situated
individuals. Except as required under ERISA, neither the Plan Administrator,
the Employer nor the trustee shall be responsible for any investment decisions
made by a Participant or a Beneficiary. If a Participant or Beneficiary fails
to direct the investment of the Account, then the Employer or Plan Administrator
(as authorized in accordance with Section 4(d) of this Trust Agreement) shall
assume the investment responsibility for such Account.
4.6 CUSTODIAN. The Trustee (including SBSTC) at any time and from time to time
may appoint one, or more than one, person, including, subject to Section 4(i) of
this Trust Agreement, the Prototype Sponsor or any of its affiliates, to perform
such custodial safekeeping, record keeping, securities execution and other
nondiscretionary functions of the Trustee as the Trustee deems appropriate, and
any person who is appointed to perform a custodial safekeeping function may (in
connection with the performance of that function) hold Fund securities in a
street name, provided that the Trustee shall remain the beneficial owner of all
assets held by such person and such person in no event shall be granted any
discretionary authority in the capacity as a custodian to manage and direct the
acquisition and disposition of Fund assets.
4.7 MULTIPLE TRUSTEES. More than one person can serve at the same time as the
Trustee, including any combination of individuals and banks or similar
institutions, and in the event that more than one person does serve at the same
time as Trustee under the Plan and this Trust Agreement, the references to
"Trustee" in the Plan and this Trust Agreement wherever applicable shall be
deemed to be to "Trustees" and such Trustees may allocate among themselves by
unanimous written consent (signed by all Trustees) such specific Trustee duties,
responsibilities and functions in the management of the Fund and otherwise under
the Plan and this Trust Agreement as the Trustees deem appropriate under the
circumstances. The Trustees in all unallocated duties, responsibilities and
functions shall act by majority vote at a meeting at which a majority of the
Trustees are present or by unanimous written consent (signed by all Trustees) in
lieu of a meeting. Any person shall be entitled to rely conclusively upon any
written action signed by all Trustees or by any one or more Trustees to whom the
power to take such action has been allocated by unanimous written consent signed
by all Trustees. Finally, the provisions of Section 8 of this Trust Agreement
shall apply to the resignation or removal of any one of the Trustees, provided
that (1) all notices required in such Section 8 also shall be given to any
remaining Trustees, (2) the Employer only shall be required to appoint successor
Trustees upon the resignation or removal of all Trustees then serving, and (3)
the Employer or the remaining Trustees may demand and receive an accounting upon
the resignation or removal of one or more of the Trustees. Notwithstanding the
foregoing, if SBSTC is not the sole Trustee under the Plan, SBSTC shall serve in
a nondiscretionary, custodial capacity only subject to the directions of the
Employer or the Plan Administrator and SBSTC shall have no duties with respect
to assets held by any other person including, without limitation, any other
Trustee for the Fund. Further,
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the Employer hereby agrees that SBSTC shall not serve as, and shall not be
deemed to be, a co-trustee under any circumstances.
4.8 COMMUNICATIONS. The Employer, the Plan Administrator and each Investment
Manager shall establish with the Trustee such oral, written or electronic
communication procedures (or any combination of such communication procedures)
or such other Procedures as such persons and the Trustee deem reasonable and
prudent under the circumstances for the orderly administration of the Fund. The
Trustee and each other person shall be entitled to rely conclusively upon any
and all communication from the Employer, the Plan Administrator and each
Investment Manager reasonably believed to be communicated in accordance with
such established procedures.
If the Trustee receives a direction which in the Trustee's determination is
incomplete, was not communicated in accordance with established procedures or
otherwise cannot reasonably be executed, the Trustee shall promptly inform the
person responsible for such direction and shall take no further action pending
receipt of proper directions from such person.
4.9 PROTOTYPE SPONSOR. Nothing in the Plan or this Trust Agreement shall
prevent the Prototype Sponsor or any of its affiliates from engaging in any
transaction with the Plan or the Fund, provided that such transaction does not
(in the opinion of the Prototype Sponsor) constitute a "prohibited transaction"
under ERISA Section 406 or Code Section 4975, and the Employer shall provide
such written documentation as the Prototype Sponsor deems necessary or
appropriate to determine that any such transaction would not be a "prohibited
transaction".
To the extent that ERISA or a prohibited transaction exemption requires action
by an individual independent of the Plan Sponsor and its affiliates or their
employers, officers and directors, then the Employer, the Plan Administrator, an
Investment Manager, a Participant or a Beneficiary shall have full power and
authority to take action on behalf of the Fund as necessary to satisfy ERISA or
such exemption provided such person otherwise is authorized to act under this
Trust Agreement.
4.10 VOTING OF PROXIES. Except as provided in this Section 4(j), the person
with the responsibility to manage and invest all or a portion of the Fund shall
have the exclusive authority and responsibility for voting proxies with respect
to investments held for such portion of the Fund and the Trustee shall be
obligated to vote such proxies only in accordance with the directions of such
person and shall be precluded from voting such proxies except in accordance with
such directions.
However, the Plan Administrator, as a named fiduciary, may reserve to itself the
right to vote proxies with respect to any investments which are otherwise
subject to the management and control of an Investment Manager and, in such
event, the Investment Manager shall be precluded from voting such proxies.
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SECTION 5. BENEFIT PAYMENTS
No disbursement from the Fund shall be made by the Trustee for purposes of the
payment of any Plan benefit except on the written direction of the Plan
Administrator, and the Trustee shall have no duty or obligation whatsoever to
inquire as to the accuracy of such direction or its propriety in light of the
provisions of the Plan, ERISA or the Code. Upon written direction (which may be
a continuing direction) from the Plan Administrator as to the name of any person
to whom payment is to be made from the Fund and when such payment is to be made
and the amount and manner of such payment, and consistent with the income tax
withholding requirements, the Trustee shall draw checks, purchase annuity
contracts or distribute other assets from the Fund in the name of the person
designated by the Employer and deliver such checks, contracts or other assets in
such manner and in such amounts and at such times as the Plan Administrator
shall direct or, if appropriate, the Trustee shall make an electronic transfer
to the account of such person designated by the Plan Administrator in such
amounts and at such times as the Plan Administrator shall direct.
If SBSTC is the Trustee, all payments to be paid by means of a check from the
Trustee shall be paid from a non-interest bearing checking account to be
maintained with an affiliate of the Trustee. Prior to executing this Trust
Agreement, the Employer shall determine that such checking account services are
(1) necessary to the operation of the Plan, (2) furnished under an arrangement
which is reasonable and (3) furnished for reasonable compensation.
In the event the Trustee shall deem it necessary to withhold any distribution
pending compliance with legal requirements with respect to probate of wills,
appointment of personal representatives, payment or provision for estate or
inheritance taxes, or for death duties or otherwise, the Trustee shall notify
the Plan Administrator and shall thereafter take no action pending receipt of
the Plan Administrator's instructions to distribute and an agreement from the
Plan Administrator, in form satisfactory to the Trustee, protecting it from any
liability arising out of noncompliance with such requirements.
The Plan Administrator may in its discretion direct, and the Trustee shall make
payment on such direction, that Plan payments be made (1) directly to an
incompetent or disabled person, whether because of minority or mental or
physical disability, (2) to the guardian or to the person having custody of such
person if a court of competent jurisdiction has appointed such guardian or
custodian, or (3) to any person designated or authorized under any state statute
to receive such payments on behalf of such incompetent or disabled person
without further liability either on the part of the Employer, the Plan
Administrator or the Trustee for the amount of such payment to the person on
whose account such payment is made.
In the case of a termination, partial termination, a complete discontinuance of
contributions or the termination of participation by a Participating Affiliate
as described in Section 14.5 of the Plan, the Plan Administrator shall direct
the Trustee precisely as to what action to take and the Trustee
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(subject to the terms of this Trust Agreement and the Plan and to such terms and
conditions, if any, as agreed upon between the Plan Administrator and the
Trustee) shall follow such directions.
The Plan Administrator shall determine anticipated liquidity requirements to
meet projected benefit payments for each Plan Year and, if any adjustment from
the practices and policies agreed upon between the Plan Administrator and the
Trustee at the adoption of this Trust Agreement is deemed appropriate, notice of
such adjustment shall be communicated by the Plan Administrator in writing as
soon as practicable to the Trustee. The Trustee shall be under no duty to make
any such adjustment prior to receiving such notice.
SECTION 6. VALUATION AND ACCOUNTING BY TRUSTEE
The Trustee as of each Valuation Date shall determine the fair market value of
the assets of the Fund (or, if more than one Fund is combined for investment
purposes, of each such Fund) based upon such reasonable accounting principles,
practices and procedures as the Trustee shall adopt and consistently apply for
this purpose, which determination shall be final and binding. At such times as
agreed upon between the Trustee and the Plan Administrator, the Trustee shall
file with the Plan Administrator a written report setting forth such fair market
value and all investments, receipts and disbursements and other transactions of
the Fund since the date of the last such report.
Upon the expiration of 90 days from the filing of the Trustee's report and
except as provided under ERISA, the Trustee shall be forever relieved and
discharged from any liability or accountability to anyone with respect to the
propriety of its actions or the transactions shown by such report except with
respect to those acts or transactions to which the Plan Administrator or the
Employer shall, within such 90 day period, have filed with the Trustee its
written disapproval, and neither the Plan Administrator nor the Employer nor any
other person shall have the right to demand or be entitled to any further or
different accounting by the Trustee.
SECTION 7. EXPENSES
All reasonable and proper expenses of the Plan and the Fund (within the meaning
of ERISA Section 403(c)(1) and Section 404(a)(1)(A)), including any taxes which
may be levied or assessed against the Trustee on account of the Fund and the
Trustee's compensation as agreed upon from time to time by the Employer and the
Trustee, shall be paid from the Fund unless (a) the payment of such expense
would constitute a "prohibited transaction" within the meaning of ERISA Section
406 or Code Section 4975 or (b) the Employer pays such expenses. Any such
expenses of the Fund which are properly allocable to an individual's Account
(including, but not limited to, expenses related to an individual's investment
directions, annuity contract purchases and other transactional fees for
processing distributions) may be charged directly against such individual's
Account if so provided in administrative procedures established by the Plan
Administrator. No payments shall
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be made to a Trustee who also receives full-time pay from the Employer or from a
Participating Affiliate except for his or her benefits, if any, from the Plan
and the reimbursement of his or her reasonable and proper expenses as a Trustee
which are not reimbursed by any other person.
SECTION 8. RESIGNATION OR REMOVAL OF TRUSTEE
The Trustee may resign at any time by delivering its written resignation to the
Employer. The Employer shall within 60 days after receipt of such resignation
appoint a successor trustee in writing (acceptable for this purpose to the
Employer and the successor trustee) delivered to the Trustee and to such
successor trustee. The Employer may remove the Trustee at any time and appoint
a successor trustee or trustees upon 60 days written notice to the Trustee
unless the Trustee agrees to a shorter notice period. In either event, on the
appointment of such successor, the Trustee shall promptly turn over to such
successor all assets held by the Trustee and shall make a final accounting to
the Plan Administrator and the Employer. The successor trustee shall have no
responsibility except to receive such money and property from the Trustee and to
hold and administer the same thereafter in accordance with this Trust Agreement
and shall not be responsible for any act or omission of the Trustee, and shall
not be required to make any claim or demand against the Trustee unless the Plan
Administrator or the Employer shall in writing request the successor trustee to
make a claim or demand against the Trustee. Any such successor trustee shall
have and may exercise all the rights, powers, and duties of the Trustee as fully
and to the same extent as if it had originally been named Trustee herein.
SECTION 9. MERGERS, CONSOLIDATIONS AND ASSET TRANSFERS
The Trustee upon written direction of the Plan Administrator shall transfer and
deliver Fund assets to or accept the transfer to the Fund of assets acceptable
to it from any trustee, custodian or insurance carrier maintaining any
investment medium of a pension or profit sharing plan which is tax exempt under
Code Section 401(a) into which the Plan (or any portion thereof) shall be merged
or consolidated.
In the case of any Plan merger or consolidation with, or transfer of assets or
liabilities to or from, any other employee benefit plan, each person for whom an
Account then is maintained shall be entitled to receive a benefit from such
plan, if it is then terminated, which is equal to or greater than the benefit
such person would have been entitled to receive immediately before such merger,
consolidation or transfer, if the Plan then had been terminated. The Trustee in
connection with either of the above described transfers shall have no liability
or responsibility (1) to determine whether such transfer shall be in conformity
with the provisions of the Plan, any other plan, ERISA or the Code or (2) to
determine the effect of such transfer upon any Accounts. Any direction of the
Plan Administrator respecting any of the foregoing shall constitute a
certification that the transfer so directed is in conformity with the provisions
of the Plan or any other plan, this Trust Agreement, ERISA and the Code, and the
Trustee shall act in accordance with such direction.
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SECTION 10. SINGLE TRUST - SEPARATE FUNDS
The assets of the Fund (or, if more than one Fund is combined for investment
purposes, of each such Fund) shall be held, administered, invested and managed
by the Trustee (except to the extent investment responsibility is allocated to
another person under the terms of this Trust Agreement) consistent with the
terms of this Trust Agreement in all respects as a single trust even though
portions of such assets may be attributable to different employers or may be
allocable to the payment of benefits for different employee groups. The Plan
Administrator shall be responsible to maintain and determine the appropriate
portion of the Fund held in respect of any such group of employees in the event
that such maintenance or determination shall become necessary. The
determination by the Plan Administrator of the portion of the Fund held in
respect of any such employee group shall be final and conclusive upon all
persons.
SECTION 11. NAMED FIDUCIARIES AND ADMINISTRATION
The Plan Administrator and the Employer (if the Plan Administrator is not the
Employer) shall be the Named Fiduciaries responsible to the extent of their
powers and responsibilities assigned in the Plan for the control, management and
administration of the Plan. The Plan Administrator, the Employer and the
Trustee (other than SBSTC) shall be the Named Fiduciaries responsible to the
extent of their respective powers and responsibilities assigned to them in the
Trust Agreement for the safekeeping, control, management, investment and
administration of the assets of the Fund. Any power or responsibility for the
control, management or administration of the Plan or the Fund which is not
expressly assigned to a Named Fiduciary under the Plan or the Trust Agreement,
or with respect to which the proper assignment is in doubt, shall be deemed to
have been assigned to the Employer as a Named Fiduciary. One Named Fiduciary
shall have no responsibility to inquire into the acts and omissions of another
Named Fiduciary in the exercise of powers or the discharge of responsibilities
assigned to such other Named Fiduciary under the Plan or the Trust Agreement.
Any person may serve in more than one fiduciary capacity under the Plan or the
Trust Agreement and a fiduciary may be a Participant provided such individual
otherwise satisfies the requirements of Section 4.
A Named Fiduciary, by written instrument filed by the Plan Administrator with
the records of the Plan, may designate a person who is not a Named Fiduciary to
carry out any of its responsibilities under the Plan or Trust Agreement, other
than the responsibilities of the Trustee for the safekeeping, control,
management, investment and administration of the assets of the Fund, except to
the extent the Trustee's responsibility for investment decisions is delegated to
the Employer, the Plan Administrator, or an Investment Manager.
Except to the extent expressly reserved under the Plan or the Trust Agreement to
the Employer, the Board, or the Trustee, the Plan Administrator shall have the
exclusive responsibility and complete discretionary authority to control the
operation, management and administration of the Plan, with all powers necessary
to enable it properly to carry out such responsibilities, including
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(but not limited to) the power to construe the Plan, the related Adoption
Agreement, and the Trust Agreement, to determine eligibility for benefits and to
resolve all interpretative, equitable or other questions that arise under the
Plan or the Trust Agreement. The decisions of the Plan Administrator on all
matters within the scope of its authority shall be final and binding. To the
extent a discretionary power or responsibility under the Plan or Trust Agreement
is expressly assigned to a person other than the Plan Administrator, such person
shall have complete discretionary authority to carry out such power or
responsibility and such persons's decisions on all matters within the scope of
such person's authority shall be final and binding.
SECTION 12. MISCELLANEOUS
12.1 SPENDTHRIFT CLAUSE AND QUALIFIED DOMESTIC RELATIONS ORDERS. Except to the
extent permitted by law, no Account, benefit, payment or distribution under the
Plan or this Trust Agreement shall be subject to attachment, garnishment, levy,
execution, or any claim or legal process of any creditor of a Participant or
Beneficiary, and no Participant or Beneficiary shall have any right to alienate,
commute, anticipate, or assign all or any part of such individual's Account,
benefit, payment or distribution under the Plan or this Trust Agreement. The
preceding sentence also shall apply to the creation, alienation, 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 ("QDRO") within the meaning of Code Section
414(p) and such order is entered on or after January 1, 1985. Notwithstanding
the foregoing, the Plan Administrator may treat a domestic relations order
entered before January 1, 1985 as a QDRO in accordance with Code Section 414(p)
and Section 16.1 of the Plan.
12.2 BENEFITS SUPPORTED ONLY BY TRUST FUND. Any person having any claim for
any benefit under the Plan shall look solely to the assets of the Fund for the
satisfaction of that claim. In no event will the Prototype Sponsor, the
Trustee, the Plan Administrator, the Employer or a Participating Affiliate or
any of their employees, officers, directors or their agents be liable in their
individual capacities to any person whomsoever for the payment of any benefits
under the Plan.
12.3 CLAIMS. Any payment to a Participant or Beneficiary, or to the legal
representative or heirs-at-law of any such person made in accordance with the
provisions of the Plan shall to the extent of such payment be in full
satisfaction of all claims under the Plan against the Trustee, Plan
Administrator, a Named Fiduciary, the Employer and any Participating Affiliate,
any of whom may require such person, such person's legal representative or
heirs-at-law, as a condition precedent to such payment, to execute a receipt and
release in such form as shall be determined by the Trustee, Plan Administrator,
a Named Fiduciary, the Employer or a Participating Affiliate, as the case may
be.
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<PAGE>
12.4 NONREVERSION. Except as provided in Section 7.2(b) of the Plan and in
this Section 12(d), neither the Employer nor any Participating Affiliate shall
have any present or prospective right, claim, or interest in the Fund or in any
Employer contribution made to the Trustee.
To the extent permitted by the Code and ERISA, the Employer contributions
described in this Section 12(d), less any losses on such contributions, shall be
returned by the Trustee to the Employer or to any Participating Affiliate upon
the written direction of the Plan Administrator in the event that:
12.4(a) an Employer contribution is made by a mistake of fact, provided
such return is effected within one year after the payment of such contribution;
12.4(b) a final judicial or Internal Revenue Service determination is made
that the Plan fails to satisfy the requirements of Code Section 401 with respect
to its initial qualification (provided, if the Employer is not entitled to rely
on the Prototype Sponsor's opinion letter, the application for the initial
qualification of the Plan 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), in which event all
Employer contributions made before such judicial or administrative determination
(whichever last occurs) plus any earnings and minus any losses shall be returned
within one year after such determination, all such contributions being hereby
conditioned upon the Plan satisfying all applicable requirements under Code
Section 401 from and after its adoption; or
12.4(c) a deduction for an Employer contribution is disallowed under Code
Section 404, in which event such contribution shall be returned within one year
after such disallowance, all such contributions being hereby conditioned upon
being deductible under Code Section 404.
The Trustee shall have no obligation or responsibility whatsoever to determine
whether the return of any such Employer contributions is permitted by the Code
or ERISA and shall (to the extent permissible under law) be indemnified and held
harmless by the Employer for acting in accordance with written directions given
by the Plan Administrator pursuant to this Section 12(d).
12.5 EXCLUSIVE BENEFIT. The corpus or income of the Fund shall not be diverted
to or used for any purpose other than the exclusive benefit of Participants or
Beneficiaries.
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<PAGE>
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
Plan Description: Prototype Standardized
Profit Sharing Plan
FFN: 50270630005-001 Case: 9307141
EIN: 13-1912900 BPD: 05 Plan: 001 Washington, DC 20224
Letter Serial No: D261029a
Person to Contact: Mr. Dua
SMITH BARNEY SHEARSON INC Telephone Number: (202) 622-8380
RETIREMENT PLAN SERVICES, 37TH FLOOR Refer Reply to: E:EP:Q:3
388 GREENWICH STREET
NEW YORK, NY 10013 Date: 08/02/93
Dear Applicant:
In our opinion, the form of the plan identified above is acceptable under
section 401 of the Internal Revenue Code for use by employers for the benefit of
their employees. This opinion relates only to the acceptability of the form of
the plan under the Internal Revenue Code. It is not an opinion of the effect of
other Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this plan.
You are also required to send a copy of the approved form of the plan, any
approved amendments and related documents to each Key District Director of
Internal Revenue Service in whose jurisdiction there are adopting employers.
Our opinion on the acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under Code section
401(a). An employer who adopts this plan will be considered to have a plan
qualified under Code section 401(a) provided all the terms of the plan are
followed, and the eligibility requirements and contribution or benefit
provisions are not more favorable for highly compensated employees than for
other employees. Except as stated below, the Key District Director will not
issue a determination letter with regard to this plan.
Our opinion does not apply to the form of the plan for purposes of Code section
401(a)(16) if: (1) an employer ever maintained another qualified plan for one
or more employees who are covered by this plan, other than a specified paired
plan within the meaning of section 7 of Rev. Proc. 89-9, 1989-1 C.B. 780; or (2)
after December 31, 1985, the employer maintains a welfare benefit fund defined
in Code section 419(e), which provides postretirement medical benefits allocated
to separate accounts for key employees as defined in Code section 419A(d)(3).
An employer that has adopted a standardized plan may not rely on this opinion
letter with respect to: (1) whether any amendment or series of amendments to
the plan satisfies the nondiscrimination requirements of section
1.401(a)(4)-5(a) of the regulations, except with respect to plan amendments
granting past service that meet the safe harbor described in section
1.401(a)(4)-5(a)(5) and are not part of a pattern of amendments that
significantly discriminates in favor of highly compensated employees; or (2)
whether the plan satisfies the effective availability requirement of section
1.401(a)(4)-4(c) of the regulations with respect to any benefit, right or
feature.
An employer that has adopted a standardized plan as an amendment to a plan other
than a standardized plan may not rely on this opinion letter with respect to
whether a benefit, right or other feature that is prospectively eliminated
satisfies the current availability requirements of section 1.401(a)-4 of the
regulations.
The employer may request a determination (1) as to whether the plan, considered
with all related qualified plans and, if appropriate, welfare benefit funds,
satisfies the requirements of Code section 401(a)(16) as to limitations on
benefits and contributions in Code section 415; (2) regarding the
nondiscriminatory effect of grants of past service;
<PAGE>
SMITH BARNEY SHEARSON INC
FFN: 50270630005-001
Page 2
and (3) with respect to whether a prospectively eliminated benefit, right or
feature satisfies the current availability requirements.
Our opinion does not apply to the form of the plan for purposes of section
401(a) of the Code unless the terms of the plan, as adopted or amended, that
pertain to the requirements of sections 401(a)(4), 401(a)(5), 401(a)(17),
401(l), 410(b) and 414(s) of the Code, as amended by the Tax Reform Act of 1986
or subsequent legislation, (a) are made effective retroactively to the first day
of the first plan year beginning after December 31, 1988 (or such other date on
which these requirements first became effective with respect to this plan); or
(b) are made effective no later than the first day on which the employer is no
longer entitled, under regulations, to rely on a reasonable, good faith
interpretation of these requirements, and the prior provisions of the plan
constitute such an interpretation.
Because you submitted this plan for approval after March 31, 1991, the
continued, interim and extended reliance provisions of sections 13 and 17.03 of
Rev. Proc. 89-9, 1989-1 C.B. 780, are not applicable.
If you, the sponsoring organization, have any questions concerning the IRS
processing of this case, please call the above telephone number. This number is
only for use of the sponsoring organization. Individual participants and/or
adopting employers with questions concerning the plan should contact the
sponsoring organization. The plan's adoption agreement must include the
sponsoring organization's address and telephone number for inquiries by adopting
employers.
If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial
Number and File Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record. Please notify us if you
modify or discontinue sponsorship of this plan.
Sincerely yours,
/s/ John Swien
Chief, Employee Plans Qualifications Branch
<PAGE>
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
Plan Description: Prototype Standardized
Money Purchase
Pension Plan Washington, DC 20224
FFN: 50270630005-002 Case: 9307142
EIN: 13-1912900 BPD: 05 Plan: 002
Letter Serial No: D261030a Person to Contact: Mr. Dua
Telephone Number: (202) 622-8380
SMITH BARNEY SHEARSON INC
Refer Reply to: E:EP:Q:3
RETIREMENT PLAN SERVICES, 37TH FLOOR
388 GREENWICH STREET Date: 08/02/93
NEW YORK, NY 10013
Dear Applicant:
In our opinion, the form of the plan identified above is acceptable under
section 401 of the Internal Revenue Code for use by employers for the benefit of
their employees. This opinion relates only to the acceptability of the form of
the plan under the Internal Revenue Code. It is not an opinion of the effect of
other Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this plan.
You are also required to send a copy of the approved form of the plan, any
approved amendments and related documents to each Key District Director of
Internal Revenue Service in whose jurisdiction there are adopting employers.
Our opinion on the acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under Code section
401(a). An employer who adopts this plan will be considered to have a plan
qualified under Code section 401(a) provided all the terms of the plan are
followed, and the eligibility requirements and contribution or benefit
provisions are not more favorable for highly compensated employees than for
other employees. Except as stated below, the Key District Director will not
issue a determination letter with regard to this plan.
Our opinion does not apply to the form of the plan for purposes of Code section
401(a)(16) if: (1) an employer ever maintained another qualified plan for one
or more employees who are covered by this plan, other than a specified paired
plan within the meaning of section 7 of Rev. Proc. 89-9, 1989-1 C.B. 780; or (2)
after December 31, 1985, the employer maintains a welfare benefit fund defined
in Code section 419(e), which provides postretirement medical benefits allocated
to separate accounts for key employees as defined in Code section 419A(d)(3).
An employer that has adopted a standardized plan may not rely on this opinion
letter with respect to: (1) whether any amendment or series of amendments to
the plan satisfies the nondiscrimination requirements of section
1.401(a)(4)-5(a) of the regulations, except with respect to plan amendments
granting past service that meet the safe harbor described in section
1.401(a)(4)-5(a)(5) and are not part of a pattern of amendments that
significantly discriminates in favor of highly compensated employees; or (2)
whether the plan satisfies the effective availability requirement of section
1.401(a)(4)-4(c) of the regulations with respect to any benefit, right or
feature.
An employer that has adopted a standardized plan as an amendment to a plan other
than a standardized plan may not rely on this opinion letter with respect to
whether a benefit, right or other feature that is prospectively eliminated
satisfies the current availability requirements of section 1.401(a)-4 of the
regulations.
The employer may request a determination (1) as to whether the plan, considered
with all related qualified plans and, if appropriate, welfare benefit funds,
satisfies the requirements of Code section 401(a)(16) as to limitations on
benefits and contributions in Code section 415; (2) regarding the
nondiscriminatory effect of grants of past service;
<PAGE>
SMITH BARNEY SHEARSON INC
FFN: 50270630005-002
Page 2
and (3) with respect to whether a prospectively eliminated benefit, right or
feature satisfies the current availability requirements.
Our opinion does not apply to the form of the plan for purposes of section
401(a) of the Code unless the terms of the plan, as adopted or amended, that
pertain to the requirements of sections 401(a)(4), 401(a)(5), 401(a)(17),
401(l), 410(b) and 414(s) of the Code, as amended by the Tax Reform Act of 1986
or subsequent legislation, (a) are made effective retroactively to the first day
of the first plan year beginning after December 31, 1988 (or such other date on
which these requirements first became effective with respect to this plan); or
(b) are made effective no later than the first day on which the employer is no
longer entitled, under regulations, to rely on a reasonable, good faith
interpretation of these requirements, and the prior provisions of the plan
constitute such an interpretation.
Because you submitted this plan for approval after March 31, 1991, the
continued, interim and extended reliance provisions of sections 13 and 17.03 of
Rev. Proc. 89-9, 1989-1 C.B. 780, are not applicable.
If you, the sponsoring organization, have any questions concerning the IRS
processing of this case, please call the above telephone number. This number is
only for use of the sponsoring organization. Individual participants and/or
adopting employers with questions concerning the plan should contact the
sponsoring organization. The plan's adoption agreement must include the
sponsoring organization's address and telephone number for inquiries by adopting
employers.
If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial
Number and File Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record. Please notify us if you
modify or discontinue sponsorship of this plan.
Sincerely yours,
/s/ John Swien
Chief, Employee Plans Qualifications Branch
<PAGE>
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
Plan Description: Prototype Standardized
Profit Sharing
Plan with CODA Washington, DC 20224
FFN: 50270630005-003 Case: 9307143
EIN: 13-1912900 BPD: 05 Plan: 003
Letter Serial No: D261031a Person to Contact: Mr. Dua
Telephone Number: (202) 622-8380
SMITH BARNEY SHEARSON INC
Refer Reply to: E:EP:Q:3
RETIREMENT PLAN SERVICES, 37TH FLOOR
388 GREENWICH STREET Date: 08/02/93
NEW YORK, NY 10013
Dear Applicant:
In our opinion, the form of the plan identified above is acceptable under
section 401 of the Internal Revenue Code for use by employers for the benefit of
their employees. This opinion relates only to the acceptability of the form of
the plan under the Internal Revenue Code. It is not an opinion of the effect of
other Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this plan.
You are also required to send a copy of the approved form of the plan, any
approved amendments and related documents to each Key District Director of
Internal Revenue Service in whose jurisdiction there are adopting employers.
Our opinion on the acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under Code section
401(a). An employer who adopts this plan will be considered to have a plan
qualified under Code section 401(a) provided all the terms of the plan are
followed, and the eligibility requirements and contribution or benefit
provisions are not more favorable for highly compensated employees than for
other employees. Except as stated below, the Key District Director will not
issue a determination letter with regard to this plan.
Our opinion does not apply to the form of the plan for purposes of Code section
401(a)(16) if: (1) an employer ever maintained another qualified plan for one
or more employees who are covered by this plan, other than a specified paired
plan within the meaning of section 7 of Rev. Proc. 89-9, 1989-1 C.B. 780; or (2)
after December 31, 1985, the employer maintains a welfare benefit fund defined
in Code section 419(e), which provides postretirement medical benefits allocated
to separate accounts for key employees as defined in Code section 419A(d)(3).
An employer that has adopted a standardized plan may not rely on this opinion
letter with respect to: (1) whether any amendment or series of amendments to
the plan satisfies the nondiscrimination requirements of section
1.401(a)(4)-5(a) of the regulations, except with respect to plan amendments
granting past service that meet the safe harbor described in section
1.401(a)(4)-5(a)(5) and are not part of a pattern of amendments that
significantly discriminates in favor of highly compensated employees; or (2)
whether the plan satisfies the effective availability requirement of section
1.401(a)(4)-4(c) of the regulations with respect to any benefit, right or
feature.
An employer that has adopted a standardized plan as an amendment to a plan other
than a standardized plan may not rely on this opinion letter with respect to
whether a benefit, right or other feature that is prospectively eliminated
satisfies the current availability requirements of section 1.401(a)-4 of the
regulations.
The employer may request a determination (1) as to whether the plan, considered
with all related qualified plans and, if appropriate, welfare benefit funds,
satisfies the requirements of Code section 401(a)(16) as to limitations on
benefits and contributions in Code section 415; (2) regarding the
nondiscriminatory effect of grants of past service;
<PAGE>
SMITH BARNEY SHEARSON INC
FFN: 5027630005-003
Page 2
and (3) with respect to whether a prospectively eliminated benefit, right or
feature satisfies the current availability requirements.
Our opinion does not apply to the form of the plan for purposes of section
401(a) of the Code unless the terms of the plan, as adopted or amended, that
pertain to the requirements of sections 401(a)(4), 401(a)(5), 401(a)(17),
401(l), 410(b) and 414(s) of the Code, as amended by the Tax Reform Act of 1986
or subsequent legislation, (a) are made effective retroactively to the first day
of the first plan year beginning after December 31, 1988 (or such other date on
which these requirements first became effective with respect to this plan); or
(b) are made effective no later than the first day on which the employer is no
longer entitled, under regulations, to rely on a reasonable, good faith
interpretation of these requirements, and the prior provisions of the plan
constitute such an interpretation.
Because you submitted this plan for approval after March 31, 1991, the
continued, interim and extended reliance provisions of sections 13 and 17.03 of
Rev. Proc. 89-9, 1989-1 C.B. 780, are not applicable.
If you, the sponsoring organization, have any questions concerning the IRS
processing of this case, please call the above telephone number. This number is
only for use of the sponsoring organization. Individual participants and/or
adopting employers with questions concerning the plan should contact the
sponsoring organization. The plan's adoption agreement must include the
sponsoring organization's address and telephone number for inquiries by adopting
employers.
If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial
Number and File Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record. Please notify us if you
modify or discontinue sponsorship of this plan.
Sincerely yours,
/s/ John Swien
Chief, Employee Plans Qualifications Branch
<PAGE>
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
Plan Description: Prototype Standardized
Target Benefit Plan
FFN: 50270630005-004 Case: 9307144 Washington, DC 20224
EIN: 13-1912900 BPD: 05 Plan: 004
Letter Serial No: D261032a Person to Contact: Mr. Dua
SMITH BARNEY SHEARSON INC Telephone Number: (202) 622-8380
RETIREMENT PLAN SERVICES, 37TH FLOOR Refer Reply to: E:EP:Q:3
388 GREENWICH STREET
NEW YORK, NY 10013 Date: 08/02/93
Dear Applicant:
In our opinion, the form of the plan identified above is acceptable under
section 401 of the Internal Revenue Code for use by employers for the benefit of
their employees. This opinion relates only to the acceptability of the form of
the plan under the Internal Revenue Code. It is not an opinion of the effect of
other Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this plan.
You are also required to send a copy of the approved form of the plan, any
approved amendments and related documents to each Key District Director of
Internal Revenue Service in whose jurisdiction there are adopting employers.
Our opinion on the acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under Code section
401(a). An employer who adopts this plan will be considered to have a plan
qualified under Code section 401(a) provided all the terms of the plan are
followed, and the eligibility requirements and contribution or benefit
provisions are not more favorable for highly compensated employees than for
other employees. Except as stated below, the Key District Director will not
issue a determination letter with regard to this plan.
Our opinion does not apply to the form of the plan for purposes of Code section
401(a)(16) if: (1) an employer ever maintained another qualified plan for one
or more employees who are covered by this plan, other than a specified paired
plan within the meaning of section 7 of Rev. Proc. 89-9, 1989-1 C.B. 780; or (2)
after December 31, 1985, the employer maintains a welfare benefit fund defined
in Code section 419(e), which provides postretirement medical benefits allocated
to separate accounts for key employees as defined in Code section 419A(d)(3).
An employer that has adopted a standardized plan may not rely on this opinion
letter with respect to: (1) whether any amendment or series of amendments to
the plan satisfies the nondiscrimination requirements of section
1.401(a)(4)-5(a) of the regulations, except with respect to plan amendments
granting past service that meet the safe harbor described in section
1.401(a)(4)-5(a)(5) and are not part of a pattern of amendments that
significantly discriminates in favor of highly compensated employees; or (2)
whether the plan satisfies the effective availability requirement of section
1.401(a)(4)-4(c) of the regulations with respect to any benefit, right or
feature.
An employer that has adopted a standardized plan as an amendment to a plan other
than a standardized plan may not rely on this opinion letter with respect to
whether a benefit, right or other feature that is prospectively eliminated
satisfies the current availability requirements of section 1.401(a)-4 of the
regulations.
The employer may request a determination (1) as to whether the plan, considered
with all related qualified plans and, if appropriate, welfare benefit funds,
satisfies the requirements of Code section 401(a)(16) as to limitations on
benefits and contributions in Code section 415; (2) regarding the
nondiscriminatory effect of grants of past service;
<PAGE>
SMITH BARNEY SHEARSON INC
FFN: 50270630005-004
Page 2
and (3) with respect to whether a prospectively eliminated benefit, right or
feature satisfies the current availability requirements.
Our opinion does not apply to the form of the plan for purposes of section
401(a) of the Code unless the terms of the plan, as adopted or amended, that
pertain to the requirements of sections 401(a)(4), 401(a)(5), 401(a)(17),
401(l), 410(b) and 414(s) of the Code, as amended by the Tax Reform Act of 1986
or subsequent legislation, (a) are made effective retroactively to the first day
of the first plan year beginning after December 31, 1988 (or such other date on
which these requirements first became effective with respect to this plan); or
(b) are made effective no later than the first day on which the employer is no
longer entitled, under regulations, to rely on a reasonable, good faith
interpretation of these requirements, and the prior provisions of the plan
constitute such an interpretation.
Because you submitted this plan for approval after March 31, 1991, the
continued, interim and extended reliance provisions of sections 13 and 17.03 of
Rev. Proc. 89-9, 1989-1 C.B. 780, are not applicable.
If you, the sponsoring organization, have any questions concerning the IRS
processing of this case, please call the above telephone number. This number is
only for use of the sponsoring organization. Individual participants and/or
adopting employers with questions concerning the plan should contact the
sponsoring organization. The plan's adoption agreement must include the
sponsoring organization's address and telephone number for inquiries by adopting
employers.
If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial
Number and File Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record. Please notify us if you
modify or discontinue sponsorship of this plan.
Sincerely yours,
/s/ John Swien
Chief, Employee Plans Qualifications Branch
<PAGE>
APPENDIX ONE TO THE SMITH BARNEY SHEARSON
PROTOTYPE DEFINED CONTRIBUTION PLAN
______________________________________________________________________________
OBRA '93 ANNUAL COMPENSATION LIMIT
The Plan is amended by adding the following to the end of Section 2.10:
2.10(h) OBRA '93 ANNUAL COMPENSATION LIMIT. In addition to other applicable
limitations set forth in the Plan, and notwithstanding any other
provision of the Plan to the contrary, for Plan Years beginning on or
after January 1, 1994, the annual Compensation of each Employee taken
into account under the Plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is
$150,000, as adjusted by the Commissioner for increases in the cost of
living in accordance with Section 401(a)(17)(B) of the Internal
Revenue Code. The cost-of-living adjustment in effect for a calendar
year applies to any period, not exceeding 12 months, over which
Compensation is determined (determination period) beginning in such
calendar year. If a determination period consists of fewer than 12
months, the OBRA '93 annual compensation limit will be multiplied by a
fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any reference in
this Plan to the limitation under Section 401(a)(17) of the Code shall
mean the OBRA '93 annual compensation limit set forth in this
provision.
If Compensation for any prior determination period is taken into
account in determining an Employee's benefits accruing in the current
Plan Year, the Compensation for that prior determination period is
subject to the OBRA '93 annual compensation limit in effect for that
prior determination period. For this purpose, for determination
periods beginning before the first day of the first Plan Year
beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
WAIVER OF 30-DAY NOTICE PERIOD
[NOTE TO EMPLOYER: THE FOLLOWING AMENDMENT WILL APPLY ONLY TO DISTRIBUTIONS FROM
A PROFIT SHARING PLAN OR 401(k) PLAN THAT ARE NOT SUBJECT TO THE QUALIFIED JOINT
AND SURVIVOR ANNUITY RULES OF CODE SECTION 401(A)(11) AND CODE SECTION 417. IN
ORDER FOR THIS AMENDMENT TO APPLY TO A PLAN, THE EMPLOYER MUST HAVE SELECTED
OPTION IX.D.3 IN THE ADOPTION AGREEMENT AND THE DISTRIBUTION MUST SATISFY THE
SAFE HARBOR RULES IN SECTION 10.5.]
The Plan is amended by adding the following to the end of Section 9.3:
9.3(e) Waiver of 30-Day Notice Period. If a distribution is one to which
Sections 401(a)(11) and 417 of the Internal Revenue Code do not apply,
such distribution
1
<PAGE>
may commence less than 30 days after the notice required under Section
1.41l(a)-1l(c) of the Income Tax Regulations is given, provided that:
9.3(e)(1) the Plan Administrator clearly informs the
Participant that the Participant has a right to a
period of at least 30 days after receiving the
notice to consider the decision of whether or not
to elect a distribution (and, if applicable, a
particular distribution option), and
9.3(e)(2) the Participant, after receiving the notice,
affirmatively elects a distribution.
2
<PAGE>
EXHIBIT 99.2
SMITH BARNEY SHEARSON PROTOTYPE
STANDARDIZED 401(K) PLAN
ADOPTION AGREEMENT #003
FOR THE
MENTAL HEALTH MANAGEMENT, INC. EMPLOYEES' SAVINGS PLAN
Adoption of a qualified plan has important legal and tax implications.
Failure to properly fill out the Adoption Agreement may result in
disqualification of the Plan. Employers should consult with their counsel
concerning the adoption of this Plan. To obtain further information about the
Plan, contact Smith Barney Shearson through your Financial Consultant.
NOTE: Under the terms of the Plan, options marked "STANDARD" AUTOMATICALLY
will apply unless another option is selected. If additional space is needed to
provide information requested in this Adoption Agreement, the information may be
provided in an addendum attached to this Adoption Agreement which contains a
reference to the appropriate Part(s) of the Adoption Agreement.
Adoption Agreement #003 may only be used in conjunction with THE SMITH
BARNEY SHEARSON PROTOTYPE DEFINED CONTRIBUTION PLAN - PLAN DOCUMENT #05.
Capitalized terms refer to defined terms in Plan Document #05. "Section "
refers to sections of Plan Document #05; "Part" refers to provisions in this
Adoption Agreement. The instructions and descriptions in this Adoption
Agreement generally summarize the Plan Document provisions, but the Plan
Document terms will be controlling in the event of any conflict.
TO BE COMPLETED BY SMITH BARNEY SHEARSON
FINANCIAL CONSULTANT: Christopher J. Poch
Telephone Number: 202-331-2598
Address: 1825 Eye Street NW Suite 1000 Washington, DC 2006
Smith Barney Shearson Inc. Account # for Plan: __________________
1
<PAGE>
I. EMPLOYER INFORMATION
Name: Mental Health Management, Inc.
Address: 6701 Lewinsville Road, Suite 200
McLean, Virginia 22102
Taxable Year: December 31 EIN: 52-1223084
II. PLAN INFORMATION
A. PLAN NAME: Mental Health Management, Inc. Employees' Savings Plan
B. PLAN YEAR: the period which ends on December 31
C. CONSTRUCTION. Except as provided in Section 1.2, the Plan and the
Trust Agreement will be subject to the laws of the Commonwealth of Virginia.
D. PLAN ADOPTION. The Plan is hereby adopted as [CHECK ONE. SEE SECTION
14.1.]
/x/ a new profit sharing plan (with cash or deferred arrangement).
/ / an amendment and restatement of the _______________
_______________________________________________________________
("Pre-Existing Plan") which was originally effective
_________________________________________, 19__.
E. EFFECTIVE DATE OF THIS ADOPTION AGREEMENT: December 31, 1995.
III. ELIGIBILITY AND PARTICIPATION. [IF THE EMPLOYER MAINTAINS ANOTHER
DEFINED CONTRIBUTION PAIRED PLAN, THE ELIGIBILITY AND PARTICIPATION REQUIREMENTS
SPECIFIED IN THIS PART III FOR PLAN YEARS BEGINNING ON AND AFTER THE FINAL
COMPLIANCE DATE MUST BE THE SAME AS THOSE SPECIFIED IN THE ADOPTION AGREEMENT
FOR SUCH OTHER PAIRED PLAN.]
A. ELIGIBLE EMPLOYEES. All Employees of the Employer and all Employees
of all Affiliates who satisfy the Participation Requirement generally are
eligible to participate in the Plan except certain nonresident aliens. However,
notwithstanding any contrary language, participation in this Plan by Employees
who are covered by a collective bargaining agreement and the extent of such
participation, if any, will be determined by collective bargaining. [SEE
SECTION 2.19].
B. PARTICIPATION REQUIREMENT. In order to participate in this Plan, an
Eligible Employee must [CHECK ONE. SEE SECTION 2.46, SECTION 4 AND PART V.B.1.
ENTER "N/A" IF THERE WILL BE NO MINIMUM AGE OR NO WAITING PERIOD, AS
APPLICABLE.]
2
<PAGE>
1. /x/ STANDARD: reach minimum age of 21 and complete waiting period of 1
Year of Service.
2. / / no minimum age or waiting period.
3. / / reach minimum age of _______ [NOT TO EXCEED 21] and complete
waiting period of _______ Year of Service [NOT TO EXCEED 1].
4. / / reach minimum age of _____ [NOT TO EXCEED 21] and complete waiting
period of ____ Year of Service [NOT TO EXCEED 1]; however, each Employee who is
an Eligible Employee on the Effective Date will be deemed to satisfy the
Participation Requirement on the Effective Date regardless of such Employee's
actual age or service.
C. ENTRY DATE: [CHECK ONE. SEE Section 2.26 AND Section 4.]
1. / / STANDARD: the first day of each Plan Year and the first day of the
seventh month of each Plan Year.
2. / / the date on which the Participant satisfies the Participation
Requirement.
3. /x/ other: _____________________________________.[SPECIFY DATE(S). IF
A SINGLE ENTRY DATE IS ENTERED, THE MINIMUM AGE IN PART III.B CANNOT EXCEED
201/2 AND THE MAXIMUM WAITING PERIOD IN PART III.B CANNOT EXCEED 1/2 YEAR.]
IV. VESTING.
A. DEATH, DISABILITY OR RETIREMENT. [SEE SECTION 8.1(B)].
1. / / STANDARD: A Participant's Employer Account and Matching Account
will be 100% vested if, while an Employee, that Participant dies, become
Disabled, or reaches Normal Retirement Age or, if applicable, Early Retirement
Age.
2. /x/ A Participant's Employer Account and Matching Account will be 100%
vested if, while an Employee, that Participant reaches Normal Retirement Age or
if the Participant satisfies the following condition: [CHECK ONE OR MORE ONLY
IF DESIRED.]
a. / / dies while an Employee.
b. / / becomes Disabled while an Employee.
c. / / reaches Early Retirement Age while an Employee.
3
<PAGE>
B. GENERAL VESTING SCHEDULE. [See Section 8.1 and Section 14.3(c).
Generally, the vesting schedule under this Plan must be at least as favorable at
the completion of each year as the vesting schedule under the Pre-Existing Plan.
The Top-Heavy Vesting Schedule selected in Part XI.A will apply for all Plan
Years in which the Plan is a Top-Heavy Plan. See Section 12.4.]
1. MATCHING ACCOUNT. [CHECK ONE. "FULL AND IMMEDIATE VESTING" MUST BE
SELECTED IF THE 2-YEAR REQUIREMENT FOR MATCHING CONTRIBUTIONS IS SELECTED IN
PART VII.A.2.B.3.]
a. /x/ STANDARD: Full and Immediate Vesting. 100% at all times.
b. / / Cliff Vesting. 100% after completion of ______ Years of Service
[NOT TO EXCEED 5].
c. / / Graded Vesting.
YEARS OF SERVICE NONFORFEITABLE PERCENTAGE
Less than 1 ___%
1 ___%
2 ___%
3 ___% [AT LEAST 20%]
4 ___% [AT LEAST 40%]
5 ___% [AT LEAST 60%]
6 ___% [AT LEAST 80%]
7 or more 100%
d. / / Top-Heavy. The Top-Heavy Vesting Schedule in Part XI.A will
apply for all Plan Years.
2. EMPLOYER ACCOUNT. [CHECK ONE. "FULL AND IMMEDIATE VESTING" MUST BE
SELECTED IF THE 2-YEAR REQUIREMENT FOR EMPLOYER CONTRIBUTIONS IS SELECTED IN
PART VII.D.2.B.2]
a. /x/ Standard: Full and Immediate Vesting. 100% at all times.
b. / / Cliff Vesting. 100% after completion of ___ Years of Service
[NOT TO EXCEED 5].
c. / / Graded Vesting.
YEARS OF SERVICE NONFORFEITABLE PERCENTAGE
Less than 1 ___%
4
<PAGE>
1 ___%
2 ___%
3 ___% [AT LEAST 20%]
4 ___% [AT LEAST 40%]
5 ___% [AT LEAST 60%]
6 ___% [AT LEAST 80%]
7 or more 100%
d. Top-Heavy. The Top-Heavy Vesting Schedule in Part XI.A will apply
for all Plan Years.
C. NORMAL RETIREMENT AGE: [CHECK ONE. SEE SECTION 2.43 AND PART
XIII.B.]
1. /x/ STANDARD: age 65.
2. / / age ___ [NOT TO EXCEED 65].
3. / / the later of age ____ [NOT TO EXCEED 65] or the ___ [NOT TO
EXCEED 5TH] anniversary of the date on which the Participant commenced
participation in the Plan.
D. EARLY RETIREMENT AGE: [THE DESIGNATION OF AN EARLY RETIREMENT AGE MAY
ACCELERATE VESTING AND DISTRIBUTION. EARLY RETIREMENT AGE CANNOT EXCEED NORMAL
RETIREMENT AGE. CHECK ONE. SEE SECTION 2.13 AND SECTION 9.1.]
1. /x/ STANDARD: No Early Retirement Age.
2. / / age ___
3. / / the later of age ___ or the completion of ___ Years of Service
(for vesting purposes).
V. SERVICE FOR PARTICIPATION AND VESTING.
A. METHOD FOR CREDITING SERVICE. [Check ONE. See Section 3.]
1. /x/ STANDARD: "Hour of Service" method. [See Section 3.1.]
a. Crediting Hours. Hours will be credited during each Computation
Period [CHECK ONE. SEE SECTION 3.1(C).]
(1) /x/ STANDARD: by maintaining records of the actual hours worked. [SEE
SECTION 3.1(C)(2)(I).]
(2) / / by using the following equivalency [CHECK ONE. SEE SECTION
3.1(C)(2)(II).]
5
<PAGE>
/ / 10 Hours of Service for each day.
/ / 45 Hours of Service for each week.
/ / 95 Hours of Service for each semi-monthly payroll period.
/ / 190 Hours of Service for each month.
B. Vesting Computation Period. The Computation Period for vesting
purposes will be [CHECK ONE. SEE SECTION 3.1(B)(2).]
(1) /X/ STANDARD: the Plan Year.
(2) / / the 12 month period beginning on the Participant's hire date and
each anniversary of that hire date.
c. Participation Computation Period. The initial Computation Period for
participation purposes will be the 12 month period beginning on the
Participant's hire date. Each subsequent Computation Period after the initial 12
months of employment will be [CHECK ONE. SEE SECTION 3.1(B)(3).]
(1) /x/ STANDARD: Plan Years beginning after the Participant's hire
date.
(2) / / subsequent 12 month periods beginning on the anniversaries of the
Participant's hire date.
d. Year of Service for Vesting. For vesting purposes, an Employee will be
credited with a Year of Service if, during a Computation Period, the Employee
completes at least [CHECK ONE. SEE SECTION 3.1(D).]
(1) /x/ STANDARD: 1,000 Hours of Service.
(2) / / _________ [not more than 1,000] Hours of Service.
d. Year of Service for Participation. For participation purposes, an
Employee will be credited with a Year of Service [CHECK ONE. SEE SECTION
3.1(B)(3) AND SECTION 3.1(D).]
(1) /x/ STANDARD: at the end of the Computation Period in which the
Employee completes at least 1,000 Hours of Service.
(2) / / on the date on which the Employee completes at least _________
[NOT MORE THAN 1,000] Hours of Service.
6
<PAGE>
(3) / / at the end of the Computation Period on which the Employee
completes at least ___ [NOT MORE THAN 1,000] Hours of Service.
Notwithstanding the foregoing, if a partial Year of Service is selected in
Part III.B, no minimum number of Hours of Service will be required.
2. / / "Elapsed Time" method. [SEE SECTION 3.2.]
For purposes of determining whether a Participant is entitled to an
allocation of contributions or forfeitures, the Participant will be deemed to
have completed more than 500 Hours of Service in a Plan Year if the Participant
completes the following period of employment in the Plan Year: [CHECK ONE. SEE
Section 2.2(D) AND PART VII.]
a. / / STANDARD: more than 91 consecutive calendar days.
b. / / more than 3 consecutive months.
B. SPECIAL RULES.
1. VESTING SERVICE EXCLUSIONS. [See Section 3.8.] In addition to any
service that is disregarded under the Break in Service Rules described below and
in Section 3.7(c), the following service will be excluded for vesting purposes:
a. /x/ STANDARD: No other exclusions.
b. / / Years of Service before age 18.
c. / / Years of Service before the Employer or an Affiliate maintained
this Plan or a predecessor plan.
d. / / Years of Service during a period for which the Employee made no
mandatory contributions under a Pre-Existing Plan.
2. PREDECESSOR EMPLOYER SERVICE (VESTING AND PARTICIPATION). Generally,
unless the Employer maintains the plan of a predecessor employer (for example,
an acquired company), service for a predecessor employer will not be credited as
service under this Plan. [CHECK AND ATTACH APPROPRIATE ADDENDUM ONLY IF DESIRED.
SEE SECTION 3.4.]
/x/ Service credit will be given under this Plan for certain
predecessor employers for participation and/or vesting purposes to the extent
provided in Addendum V.B.2.
3. BREAK IN SERVICE RULES. [See Section 3.7 and Section 8.2.] Generally,
all service completed before a Break in Service will be credited upon
reemployment. Certain service may be excluded under the following rules:
7
<PAGE>
a. /x/ STANDARD: No exclusions. [See Section 3.7(a).]
b. / / "Rule of Parity." [See Section 3.7(b)(3).] This rule, generally,
disregards vesting and participation service completed before 5 uninterrupted
Breaks in Service.
c. / / "Alterative Maternity/Paternity Rule." [Not applicable if
"Elapsed Time" is selected. See Section 3.7(b)(4).] This Rule, generally,
increases the number of Breaks in Service from 5 to 6 for all Employees in lieu
of crediting service for maternity/paternity leave.
d. / / Alternative to "Buy Back Rule." [See Section 8.2(b).] This rule,
generally, does not require former participants (less than 100% vested) to pay
back previous distributions upon reemployment (vesting only). A rehired
Participant's vested interest in restored amounts will be determined under:
[Check ONE. See Section 8.2(a), Section 8.2(b) and Section 8.2(c).]
(1) / / STANDARD: Formula A
(2) / / Formula B
VI. EMPLOYEE CONTRIBUTIONS.
A. ELECTIVE DEFERRALS. Elective Deferrals [SEE SECTION 5.3(F). CHECK
ONE.]
1. / / STANDARD: will be allowed. [COMPLETE FORMULA BELOW; ENTER "N/A"
IF NOT APPLICABLE.]
a. Minimum Amount. Not less than ____% of a Participant's Compensation or
$______.
b. Maximum Amount. For Plan Years ending on and before __________, not
more than ___________% of a Participant's Compensation or $___________________,
and for each Plan Year thereafter, not more than ___________% of a Participant's
Compensation or $__________
2. / / will not tee allowed.
B. EMPLOYEE CONTRIBUTIONS. Employee Contributions [See Section 5.3(g).
Check ONE.]
1. / / STANDARD: will not be allowed.
2. / / will be allowed. [COMPLETE FORMULA BELOW; ENTER "N/A" IF NOT
APPLICABLE.]
8
<PAGE>
a. Minimum Amount. Not less than ______% of a Participant's Compensation
or $__________.
b. Maximum Amount. For Plan Years ending on and before __________, not
more than ______% of a Participant's Compensation or $__________, and for each
Plan Year thereafter, not more than ______% of a Participant's Compensation or
$__________.
C. ELECTION RULES. [CHECK ONE. SEE SECTION 5.3(H).]
1. / / STANDARD: If a Participant does not elect to begin Elective
Deferrals or Employee Contributions on the Participant's Entry Date, the
Participant may elect to begin such contributions as of any following pay date.
A Participant's election can be revised (prospectively only) as of any pay date.
A Participant who terminates contributions may elect to resume contributions
prospectively as of any pay date.
2. / / Alternatives to Standard: A Participant's elections may be made
as follows: [MUST INCLUDE AT LEAST ONE DAY IN EACH CALENDAR YEAR.]
a. / / COMMENCEMENT. [See Section 5.3(h)(2).] effective only as of any
_______________ following the Participant's Entry Date.
b. /x/ REVISION. [See Section 5.3(h)(3).] effective only as of any
following the first day of Calendar Quarter.
c. /x/ RESUMPTION. [See Section 5.3(h)(5).] effective only as of any
following first day of each Calendar Quarter.
D. ROLLOVER CONTRIBUTIONS. Rollover Contributions [Check ONE. See Section
5.4.]
1. /x/ STANDARD: will be allowed and may be made by [Check ONE.]
a. /x/ STANDARD: any Eligible Employee.
b. / / any Eligible Employee who is a Participant.
2. / / will not be allowed.
E. LIMITATIONS ON ELECTIVE DEFERRALS. / /
1. CLAIMS. Claims for a refund of Excess Elective Deferrals must be made
no later than [See Section 7.3(f). Check ONE.]
a. /x/ STANDARD: March 1.
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b. / / _______________ [no earlier then March 1 and no later than April
15.]
2. DEEMED CLAIMS. Corrections of Excess Elective Deferrals will be made
[See Section 7.3(f)(2). Check ONE.]
a. /x/ STANDARD: from this Plan.
b. / / from the following plan(s):______________.
3. "GAP PERIOD" INCOME. The income or loss allocable to the "gap period"
[Check ONE. See Section 7.3(e), Section 7.4(d)(2) and Section 7.5(d)(2).]
a. /x/ STANDARD: shall not be distributed.
b. / / shall be distributed.
4. HIGHLY COMPENSATED EMPLOYEES. The following special rules in the
temporary Code Section 414(q) regulations and in Code Section 414(q)(12) will
apply: [Check ONE. See Section 7.4(a)(5)(v).]
a. /x/ STANDARD: no special rules.
b. / / The special rules set forth in Addendum V.E.3.
5. RECHARACTERIZATION. Recharacterization of Excess Contributions as
Employee Contributions [See Section 7.4(e). Service Check ONE.]
a. /x/ STANDARD: will not be allowed.
b. / / [DO NOT CHECK THIS OPTION 2 IF EMPLOYEE CONTRIBUTIONS ARE NOT
ALLOWED IN PART VI.B.] will be allowed.
VII. EMPLOYER CONTRIBUTIONS.
A. MATCHING CONTRIBUTIONS. [See Section 5.3(b) and Part VII.F.]
1. FORMULA. [Check ONE.]
a. /x/ STANDARD: No Matching Contributions will be made.
b. /x/ Matching Contributions will be made on account of: [CHECK ONE OR
BOTH.]
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/x/ Elective Deferrals
/ / Employee Contributions
under the following formula: [CHECK AND COMPLETE ONE. ENTER "N/A" IF NOT
APPLICABLE. THE FORMULA SELECTED AND COMPLETED MUST NOT PROVIDE A HIGHER RATE OF
MATCHING CONTRIBUTIONS FOR PARTICIPANTS WHO MAKE A HIGHER AMOUNT OF
CONTRIBUTIONS.]
/x/ 50% of the Participant's contributions which do not exceed $n/a
or 3% of the Participant's Compensation plus n/a% of the Participant's
contributions which exceed $n/a or n/a%, but contributions in excess of $n/a or
n/a% of the Participant's Compensation will not be matched.
/ / such percentage of the Participant's contributions as determined
by the Employer in its discretion for each Plan Year.
/ / in an amount equal to ______________________
___________________________________________________________.
2. ELIGIBLE PARTICIPANT. The Matching Contribution for any Allocation
Date will be made only for each Participant who makes Elective Deferrals or
Employee Contributions, as applicable, during the period ending on the
Allocation Date and who satisfies all of the following requirements: [Check
ONE.]
a. /x/ STANDARD: no additional requirements.
b. Alternative: [CHECK ONE OR MORE.]
(1) / / the Participant is employed (or on an authorized leave of
absence) on the last day of the Plan Year or (b) is not employed as of the last
day of the Plan Year but is credited with more than 500 Hours of Service in such
Plan Year. [DO NOT CHECK IF ALLOCATION DATE IS NOT STANDARD OPTION. SPECIAL HOUR
OF SERVICE EQUIVALENCIES APPLY IF "ELAPSED TIME" IS SELECTED. SEE PART V.A.2.]
However, a Participant who died, retired or became disabled during the Plan Year
will be eligible: [Check ONE.]
/ / without regard to the number of Hours of Service.
/ / only if the Participant completes the Hours of Service specified
above.
(2) / / the Participant is a Nonhighly Compensated Employee.
(3) / / the Participant is credited with at least 2 Years of Service (for
participation purposes) on such Allocation Date.
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<PAGE>
(4) / / for Plan Years beginning before the __________ [NOT LATER THAN
FINAL COMPLIANCE DATE], the Participant [CHECK ONE OR MORE ONLY IF ALLOCATION
DATE IS STANDARD OPTION.]
/ / is employed (or on an authorized leave of absence) on the last
day of the Plan Year;
/ / is not employed on the last day of the Plan Year because the
Participant died, retired or became disabled during such Plan Year;
/ / if the "Hours of Service" method is selected, is credited with
more than 1,000 Hours of Service during such Plan Year.
3. ALLOCATION DATE. Matching Contributions will be made and allocated as
of [Check ONE.]
a. / / STANDARD: the last day of each Plan Year.
b. / / each ________________________.
4. FORFEITURES. Forfeitures attributable to Matching Accounts [Check one
See Section 6.3(c)(2)(ii).]
a. /x/ STANDARD: will be applied to reduce Matching Contributions as of
the Allocation Date: [Check ONE. See Section 8.2(e).]
(1) /X/ STANDARD: which immediately follows the date the Forfeiture
occurs.
(2) / / which immediately follows the last day of the Plan Year in which
the Forfeiture occurs.
b. / / will be reallocated to Active Participants as of the last day of
each Plan Year. [COMPLETE PART VII.D.2. TO SPECIFY WHO IS AN ACTIVE PARTICIPANT
FOR THIS PURPOSE.]
B. QUALIFIED MATCHING CONTRIBUTIONS. [See Section 5.3(c) and Part VII.F.]
1. FORMULA. [Check ONE.]
a. / / STANDARD: No Qualified Matching Contributions will be made.
b. / / Qualified Matching Contributions will be made on account of:
[CHECK ONE OR BOTH.]
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<PAGE>
/ / Elective Deferrals
/ / Employee Contributions
under the following formula: [CHECK AND COMPLETE ONE. ENTER "N/A" IF NOT
APPLICABLE. THE FORMULA SELECTED AND COMPLETED MUST NOT PROVIDE A HIGHER RATE OF
QUALIFIED MATCHING CONTRIBUTIONS FOR PARTICIPANTS WHO MAKE A HIGHER AMOUNT OF
CONTRIBUTIONS.]
/ / ______% of the Participant's contributions which do not exceed
$__________ or _______% of the Participant's Compensation plus ______% of the
Participant's contributions which exceed $___________or _____%, but
contributions in excess of $__________ or ______% of the Participant's
Compensation will not be matched.
/ / such percentage of the Participant's contributions as determined
by the Employer in its discretion for each Plan Year.
/ / in an amount equal to _________________.
2. ELIGIBLE PARTICIPANT. The Qualified Matching Contribution for any
Allocation Date will be made only for each Participant who makes Elective
Deferrals or Employee Contributions, as applicable, during the period ending on
the Allocation Date and who satisfies all of the following requirements: [Check
ONE.]
a. / / STANDARD: no additional requirements.
b. / / Alternative: [CHECK ONE OR MORE.]
(1) / / the Participant is employed (or on an authorized leave of
absence) on the last day of the Plan Year or (b) is not employed as of the last
day of the Plan Year but is credited with more than 500 Hours of Service in such
Plan Year. [DO NOT CHECK IF ALLOCATION DATE IS NOT STANDARD OPTION. SPECIAL HOUR
OF SERVICE EQUIVALENCIES APPLY IF "ELAPSED TIME" IS SELECTED. SEE PART V.A.2.]
However, a Participant who died, retired or became disabled during the Plan Year
will be eligible: [Check ONE.]
/ / without regard to the number of Hours of Service.
/ / only if the Participant completes the Hours of Service specified
above.
(2) / / the Participant is a Nonhighly Compensated Employee.
(3) / / the Participant is credited with at least 2 Years of Service (for
participation purposes) on such Allocation Date.
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<PAGE>
(4) / / for Plan Years beginning before the _______________ [NOT LATER
THAN FINAL COMPLIANCE DATE], the Participant [CHECK ONE OR MORE ONLY IF
ALLOCATION DATE IS STANDARD OPTION.]
/ / is employed (or on an authorized leave of absence) on the last
day of the Plan Year;
/ / is not employed on the last day of the Plan Year because the
Participant died, retired or became disabled during such Plan Year;
/ / if the "Hours of Service" method is selected, is credited with
more than 1,000 Hours of Service during such Plan Year.
3. ALLOCATION DATE. Qualified Matching Contributions will be made and
allocated as of [Check ONE.]
a. / / STANDARD: the last day of each Plan Year.
b. / / each ___________________.
C. QUALIFIED NONELECTIVE CONTRIBUTIONS. [SEE SECTION 5.3(D) AND PART
VII.F.]
1. FORMULA. In addition to the Qualified Nonelective Contributions which
may be made for Nonhighly Compensated Employees to satisfy the ADP or ACP
limits, [Check ONE.]
a. /x/ STANDARD: no additional Qualified Nonelective Contributions will
be made.
b. / / additional Qualified Nonelective Contributions will be made in an
amount equal to: [SPECIFY NONDISCRIMINATORY FORMULA THAT SATISFIES CODE SECTION
401(A)(4) SAFE HARBORS.]
______________________________________________________________
______________________________________________________________
2. ELIGIBLE PARTICIPANT. The Additional Qualified Nonelective
Contribution described in this Part VII.C for any Allocation Date will be made
only for each Participant who is an Eligible Employee at any time during the
period ending on the Allocation Date and who satisfies all of the following
requirements: [Check ONE.]
a. / / STANDARD: no additional requirements.
b. / / Alternative: [CHECK ONE OR MORE.]
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<PAGE>
(1) / / the Participant is employed (or on an authorized leave of
absence) on the last day of the Plan Year or (b) is not employed as of the last
day of the Plan Year but is credited with more than 500 Hours of Service in such
Plan Year. [DO NOT CHECK IF ALLOCATION DATE IS NOT STANDARD OPTION. SPECIAL
HOUR OF SERVICE EQUIVALENCIES APPLY IF "ELAPSED TIME " IS SELECTED. SEE PART
V.A.2.] However, a participant who died, retired or became disabled during the
plan year will be ELIGIBLE: [Check ONE.]
/ / without regard to the number of Hours of Service.
/ / only if the Participant completes the Hours of Service specified
above.
(2) / / the Participant is a Nonhighly Compensated Employee.
(3) / / the Participant is credited with at least 2 Years of Service for
participation purposes) on such Allocation Date.
(4) / / for Plan Years beginning before the _________ [NOT LATER THAN
FINAL COMPLIANCE DATE], the Participant [CHECK ONE OR MORE ONLY IF ALLOCATION
DATE IS STANDARD OPTION.]
/ / is employed (or on an authorized leave of absence) on the last
day of the Plan year;
/ / is not employed on the last day of the plan year because the
participant died, retired or became disabled during such plan
year;
/ / if the "Hours of Service" method is selected, is credited with
more than 1,000 hours of service during such plan year.
3. ALLOCATION DATE. The qualified nonelective contributions described in
this part vii.C will be made and allocated as of [CHECK ONE.]
a. / / STANDARD: the last day of each Plan Year.
b. / / each ______________________.
D. DISCRETIONARY EMPLOYER CONTRIBUTIONS.
1. ALLOCATION FORMULA. The discretionary Employer Contributions will be
allocated among Active Participants as follows: [CHECK ONE. SEE SECTION 5.3(E),
Section 6.3(A), Section 6.3(C)(4) END PART VII.F. DO NOT SELECT AN INTEGRATED
FORMULA FOR PLAN YEARS BEGINNING ON AND AFTER THE FINAL COMPLIANCE DATE IF THE
EMPLOYER ALSO MAINTAINS ANOTHER INTEGRATED PLAN FOR SUCH PLAN YEAR.]
15
<PAGE>
a. / / STANDARD: Nonintegrated. [See Section 6.3(a)(1) and Section
6.3(c)(4)(i)(A).]
b. Integrated. [See Section 6.3(a)(2), Section 6.3(c)(4)(i)(B) and
Section 12.3(h).]
(1) Integration Percentage. [Check ONE. IF THE INTEGRATION LEVEL is less
than the Taxable Wage Base, the Maximum Disparity Rate must be reduced. See
Section 2.39.]
/ / STANDARD: the Maximum Disparity Rate.
/ / [NOT TO EXCEED THE MAXIMUM DISPARITY RATE.]
(2) Integration Level. [Check ONE. See Section 2.35.]
/ / STANDARD: the Taxable Wage Base.
/ / $_______ or _________% of the Taxable Wage Base [NOT TO EXCEED
THE TAXABLE WAGE BASE.]
2. ACTIVE PARTICIPANT.
a. GENERAL. The discretionary Employer Contributions and Forfeitures, if
applicable, will only be allocated to: [IF THE EMPLOYER MAINTAINS ANOTHER
DEFINED CONTRIBUTION PAIRED PLAN, THE ALLOCATION REQUIREMENTS SPECIFIED IN THIS
PART VII.D.2 FOR PLAN YEARS BEGINNING ON AND AFTER THE FINAL COMPLIANCE DATE
MUST BE THE SAME AS THOSE SPECIFIED IN THE ADOPTION AGREEMENT FOR SUCH OTHER
PAIRED PLAN. CHECK ONE. SEE SECTION 2.2, SECTION 5.3(E) AND PART VII.F.]
(1) / / STANDARD: each Participant who is an Eligible Employee at any
time during the Plan Year and who (1) is employed (or on an authorized leave of
absence) on the last day of the Plan Year, (2) terminated employment during the
Plan Year due to death, disability or retirement, or (3) was not employed on the
last day of the Plan Year but was credited with more than 500 Hours of Service
during the Plan Year. [SPECIAL HOUR OF SERVICE EQUIVALENCIES APPLY IF "ELAPSED
TIME" IS SELECTED.]
(2) / / Alternatives to Standard: [CHEEK ONE OR MORE.]
/ / The Participant must also be credited with at least 2 Years of
Service by the last day of the Plan Year.
/ / The last day employment requirement will not apply.
/ / The 500 hours requirement will not apply.
/ / The exceptions for death, disability and retirement will not
apply.
16
<PAGE>
b. Years Before Final Compliance Date. For Plan Years beginning before
__________ [NOT LATER THAN THE FINAL COMPLIANCE DATE], the discretionary
Employer Contributions and Forfeitures will only be allocated to: [COMPLETE ONLY
IF DESIRED. SEE Section 2.2. CHECK ONE.]
(1) / / STANDARD: each Participant who is an Eligible Employee at any
time during the Plan Year and (1) who is employed (or on an authorized leave of
absence) on the last day of the Plan Year and (H the "Hours of Service" method
is selected) who is credited with 1,000 Hours of Service during the Plan Year or
(2) who died, retired or became disabled during the Plan Year.
(2) / / Alternatives to Standard [CHECK ONE OR MORE.]
/ / The last day employment requirement will not apply.
/ / The 1,000 hours requirement will not apply. [NOT APPLICABLE IF
"ELAPSED TIME" IS SELECTED.]
/ / The Participant must also be credited with at least 2 Years of
Service by the last day of the Plan Year.
/ / The exceptions for death, disability and retirement will not
apply.
3. FORFEITURES. Forfeitures attributable to Employer Accounts [CHECK ONE.
SEE SECTION 5.3(I) AND SECTION 6.3(C)(4)(II).]
a. /x/ STANDARD: will be reallocated to Active Participants as of the
last day of each Plan Year in the same manner as Employer Contributions.
b. / / will be applied to reduce Matching Contributions, Qualified
Matching Contributions and/or Qualified Nonelective Contributions.
E. NET PROFITS.
1. GENERAL. [Check ONE. See Section 5.3(a).]
a. / / STANDARD: All Employer contributions other than Elective
Deferrals will be made out of Net Profits.
b. /x/ Alternatives to Standard: In addition to Elective Deferrals, the
following contributions will be made without regard to Net Profits: [CHECK ONE
OR MORE.]
(1) /x/ Matching Contributions
17
<PAGE>
(2) / / Qualified Matching Contributions
(3) / / Qualified Nonelective Contributions
(4) /x/ Discretionary Employer Contributions
(5) DEFINITION. For this purpose, Net Profits will be as defined [CHECK
ONE. SEE SECTION 2.41.]
c. /x/ STANDARD: in Section 2.41(a).
d. / / in the attached Addendum VII.E.2.
F. MINIMUM ALLOCATIONS. Each Active Participant (determined without
regard to the Participant's completed Hours of Service) who is not a Key
Employee, generally, will receive the minimum top-heavy allocation if the Plan
is top-heavy. [SEE SECTION 6.3(E) AND SECTION 12.]
VIII. COMPENSATION. Compensation for any Plan Year generally means total
compensation (not to exceed $200,000 indexed for inflation after 1989) actually
paid to a Participant during such Plan Year (unless another determination period
is selected). [See Section 2.10.]
A. BASIC DEFINITION: Total compensation means: [Check ONE. See Section
2.10(a).]
1. /x/ STANDARD: wages, tips and other compensation reportable on Form
W-2. [See Section 2.10(a)(1).]
2. / / wages subject to federal income tax withholding. [See Section
2.10(a)(2)(i).]
3. / / general Code Section 415 compensation. [See Section
2.10(a)(2)(ii) and Section 7.2(a)(2)(ii)(B) ]
Reimbursements or other expense allowances, fringe benefits (cash and
noncash), moving expenses, deferred compensation and welfare benefits (even if
includible in gross income) : [Check ONE. See Section 2.10(a)(2)(iv).]
/ / STANDARD: will
/x/ will not
be included in Compensation as determined in accordance with the definition
selected above.
18
<PAGE>
B. DETERMINATION PERIOD: [Check ONE. See Section 2.10(d).]
1. /x/ STANDARD: the Plan Year.
2. / / the calendar year ending in the Plan Year.
3. / / a period beginning each _________________ [ENTER THE DAY AND
MONTH THE PERIOD BEGINS. THE DETERMINATION PERIOD MUST END WITH OR WITHIN THE
PLAN YEAR, MUST BE AT LEAST 12 CONSECUTIVE MONTHS IN DURATION AND MUST APPLY
UNIFORMLY TO ALL EMPLOYEES IN THE PLAN.]
C. SALARY REDUCTIONS. Participant salary reduction contributions (for
example, Section 401 (k) or benefit plan contributions) [CHECK ONE. SEE SECTION
2.10(F).]
1. /x/ STANDARD: will
2. / / will not
be included in total compensation.
D. SPECIAL RULES. [COMPLETE ONLY IF DESIRED. SEE SECTION 2.10(9)]
1. /x/ Compensation for periods ending before the Entry Date on which an
Eligible Employee becomes a Participant will be excluded. [SEE, Section
2.10(G)(1).]
2. / / If this is an amendment to a Pre-Existing Plan, the definition of
Compensation will be effective as of ____________ [NO LATER THAN THE FIRST DAY
OF ME FIRST PLAN YEAR AFTER THIS PLAN IS ADOPTED. SEE SECTION 2.10(G)(2). THE
DEFINITION IN THE PRE-EXISTING PLAN WILL CONTINUE TO APPLY UNTIL THAT DATE.]
IX. DISTRIBUTIONS.
A. TIMING. Vested Plan benefits, generally, will be distributed as
follows: [CHECK ONE. SEE SECTION 9.1(A).]
1. /x/ STANDARD: as soon as practical after the Participant separates
from service subject to the Participant's consent, if required.
2. / / no earlier than the Participant's Normal Retirement Age, Early
Retirement Age or Disability, whichever is earlier.
B. ELECTIONS TO DEFER. A Participant whose Account is more than $3500 may
elect that distribution of vested Plan benefits be deferred until: [CHECK ONE.
SEE SECTION 9.1(E).]
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<PAGE>
1. / / STANDARD: the Participant's Required Beginning Date (generally
age 701/2).
2. /x/ the later of the Participant's Normal Retirement Age or age 62.
C. IN-SERVICE DISTRIBUTIONS. [See Section 9.2(b).]
1. ELECTIVE DEFERRAL ACCOUNTS. In-service distributions from Elective
Deferral Accounts will be allowed as follows: [CHECK APPLICABLE BOX(ES).]
a. / / STANDARD: no distributions before separation from service.
b. /x/ on or after age 591/2. [SEE Section 9.2(B)(4).]
c. /x/ for the following financial hardship(s): [SEE Section 9.2(B)(3).
CHECK ONE OR MORE.]
(1) /x/ medical expenses [SEE Section 9.2(B)(3)(II)(A).]
(2) /x/ purchase of principal residence [SEE Section 9.2(B)(3)(II)(B).]
(3) /x/ tuition [SEE Section 9.2(B)(3)(II)(C).]
(4) /X/ foreclosure or eviction [SEE Section 9.2(B)(3)(II)(D).]
(5) /X/ other IRS "deemed" financial hardship [SEE Section
9.2(B)(3)(II)(E).]
2. MATCHING ACCOUNTS. In-service distributions from Matching Accounts
will be allowed as follows: [CHECK APPLICABLE BOX(ES).]
a. /x/ STANDARD: no distributions before separation from service.
b. / / on or after age ________.
c. / / after the ________ anniversary of Plan participation.
d. / / for a financial hardship under the safe harbor tests. [SEE
SECTION 9.2(B)(3).]
e. / / in accordance with the rules set forth in Addendum IX.C.2. [SEE
SECTION 9.2(B)(5). THE ADDENDUM SHOULD DESCRIBE NONDISCRIMINATORY OBJECTIVE
STANDARDS FOR AN IN-SERVICE DISTRIBUTION AFTER A FIXED NUMBER OF YEARS OR UPON
THE PRIOR OCCURRENCE OF SOME EVENT SUCH AS LAYOFF, ILLNESS OR HARDSHIP.]
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<PAGE>
3. EMPLOYER ACCOUNTS. In-service distributions from Employer Accounts
will be allowed as follows: [Check applicable box(es).]
a. /x/ STANDARD: no distributions before separation from service.
b. / / on or after age
c. / / after the anniversary of Plan participation.
d. / / for a financial hardship under the safe harbor tests. [See
Section 9.2(b)(3).]
e. / / in accordance with the rules set forth in Addendum IX.C.3. [See
Section 9.2(b)(5). The addendum should describe nondiscriminatory objective
standards for an in service distribution after a fixed number of years or upon
the prior occurrence of some event such as layoff, illness or hardship.]
4. QUALIFIED NONELECTIVE AND QUALIFIED MATCHING ACCOUNTS. In-service
distributions from Qualified Nonelective and Qualified Matching Accounts will be
allowed as follows: [Check applicable box(es).]
a. / / STANDARD: no distributions before separation from service.
b. /x/ on or after age 591/2.
c. / / for financial hardship (pre-89 amounts only). [See Section
9.2(b)(3).]
5. EMPLOYEE ACCOUNTS. Withdrawals from Employee Accounts [SEE SECTION
9.2(D). CHECK ONE.]
a. / / STANDARD: will be allowed.
b. /x/ will not be allowed.
D. JOINT AND SURVIVOR ANNUITY RULES. [CHECK ONE. SEE SECTION 10.]
1. /x/ STANDARD: The entire vested balance will be paid (a) to married
Participants as a 50% joint and survivor annuity, (b) to single Participants as
a 100% life annuity and (c) to the surviving Spouse of a married Participant who
dies before retirement as a 100% preretirement survivor annuity.
2. The entire vested balance will be paid under the standard joint and
survivor annuity rules except the percentages will be: [Percentages must be not
less than 50% nor more than 100%.]
a. Qualified Joint and Survivor Annuity: ______% [SEE SECTION 10. 1(F).]
21
<PAGE>
b. Qualified Preretirement Survivor Annuity: _____% [SEE Section
10.1(G).]
3. / / The standard joint and survivor annuity rules will not apply.
[CHECK ONLY IF THE SAFE HARBOR RULE DESCRIBED IN Section 10.5 WILL BE
SATISFIED. THIS OPTION GENERALLY IS NOT AVAILABLE IF THIS PLAN OR A
PRE-EXISTING PLAN PROVIDES ANNUITIES AND SEPARATE ACCOUNTS ARE NOT MAINTAINED
FOR SUCH PRE-EXISTING PLAN BALANCES. UNDER THIS OPTION, THE ENTIRE VESTED
BALANCE ELIGIBLE FOR THE SAFE HARBOR WILL BE PAID TO THE SURVIVING SPOUSE OF A
MARRIED PARTICIPANT WHO DIES BEFORE RETIREMENT. SEE Section 10.5]
E. OPTIONAL DISTRIBUTION FORMS. [See Section 10.6(c).] In addition to
single sum distributions in cash, Participants may also request:
1. / / installments [SEE Section 10.6(C)(2)(II).]
2. / / Annuity contracts [SEE Section 10.6(C)(2)(III).]
3. / / The optional forms or in kind distribution offered under a
Pre-Existing Plan as described in addendum XIII.A.
4. /x/ Single sum distributions in kind [SEE Section 10.6(E).]
X. INVESTMENT PROVISIONS.
A. INDIVIDUALLY DIRECTED INVESTMENTS. An individual's direction of the
investment of that individual's Account [CHECK ONE. SEE Section 13.2.]
1. / / STANDARD: will not be allowed
2. /x/ will be allowed and will apply: [Check ONE.]
a. /x/ STANDARD: to the entire Account
b. / / only to the following: ___________________.
B. PARTICIPANT LOANS. Participant loans [CHECK ONE. SEE Section 13.3.]
1. / / STANDARD: will not be allowed.
2. /x/ will be allowed.
a. Accounting. Loans will be treated as an asset of [See Section 13.3(e).
Check ONE.]
(1) /x/ STANDARD: the Participant's Account.
22
<PAGE>
(2) / / the Fund.
b. Amounts. The $10,000 exception for loans in excessof 50% of Account
value [CHECK ONE. SEE Section 13.3(F)(2).]
(1) /x/ STANDARD: shall not apply.
(2) / / shall apply. [Note: Loans under this exception must be secured by
collateral in addition to the Participant's vested Account.]
C. INSURANCE. A Participant's direction to purchase insurance contracts
[CHECK ONE. SEE Section 13.1.]
1. /x/ STANDARD: will not be allowed.
2. / / will be allowed.
XI. TOP-HEAVY RULES. [SEE Section 12.]
A. TOP-HEAVY VESTING SCHEDULE. The vesting schedule for any Plan Year in
which this Plan is a Top-Heavy Plan will be: [Check ONE. See Section 2.4.]
1. /x/ STANDARD: Full and Immediate. 100% of times.
2. / / CLIFF. 100% after completion of _____ Years of Service [NOT TO
EXCEED 3].
3. / / GRADED.
YEARS OF SERVICE NONFORFEITABLE PERCENTAGE
Less than 1 ____%
1 ____%
2 ____% [AT LEAST 20%]
3 ____% [AT LEAST 40%]
4 ____% [AT LEAST 60%]
5 ____% [AT LEAST 80%]
6 or more 100%
B. OTHER PAIRED PLAN. [COMPLETE ONLY IF THE EMPLOYER MAINTAINS ANOTHER
SMITH BARNEY SHEARSON DEFINED CONTRIBUTION PAIRED PLAN. SEE Section 2.45 AND
Section 12.3(C).] The minimum top-heavy contributions or benefit, if any, will
be made under the following Paired Plans in the following order: [CHECK ONE.]
23
<PAGE>
1. /x/ STANDARD: Money Purchase Pension Plan, Target Benefit Pension
Plan, Profit Sharing Plan, 401(k) Plan.
2. / / Other: ____________________.
C. OTHER PLANS. [COMPLETE ONLY IF THE EMPLOYER MAINTAINS OR HAS EVER
MAINTAINED ANOTHER PLAN THAT IS NOT A PAIRED PLAN.]
1. MINIMUM ALLOCATION. The minimum top-heavy contributions or benefit, if
any, will be made under [CHECK ONE. SEE Section 12.3(D) AND (9).]
a. /x/ STANDARD: this Plan.
b. / / the following plan(s): ____________________
2. PRESENT VALUE. [SEE Section 12.2(F)(3)(III). COMPLETE ONLY IF EMPLOYER
MAINTAINS A DEFINED BENEFIT PLAN.] "Present value" will be determined using an
interest rate of ____% and the following mortality table:
UP-1984
3. VALUATION DATE. The Top-Heavy Valuation Date for each other plan will
be: [SEE Section 12.2(9). CHECK ONE.]
a. /x/ STANDARD: the most recent valuation date.
b. / / Other: ____________________
XII. LIMITATIONS ON ALLOCATIONS (CODE Section 415). [SEE Section 7.2.]
A. COMPENSATION. For Code Section 415 purposes, Compensation means:
[CHECK ONE. SEE Section 7.2(A)(2).]
1. /x/ STANDARD: wages, tips and other compensation reportable on Form
W-2. [SEE Section 7.2(A)(2)(I).]
2. / / wages subject to federal income tax withholding. [SEE Section
7.2(A)(2)(II)(A) AND Section 2.10(A)(2)(I).]
3. / / general Code Section 415 compensation. [SEE Section 7.2(A)(2)
(II)(B).]
B. LIMITATION YEAR. The Limitation Year will be: [CHECK ONE. SEE Section
7.2(A)(9).]
1. /x/ STANDARD: the Plan Year.
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2. / / the 12 consecutive month period which ends on each
____________________
C. OTHER PAIRED PLAN. [COMPLETE ONLY IF THE EMPLOYER MAINTAINS ANOTHER
SMITH BARNEY SHEARSON DEFINED CONTRIBUTION PAIRED PLAN. SEE Section 2.45 AND
Section 7.2(C)(1).] The allocation adjustment will be made under the following
plans in the following order: [CHECK ONE.]
1. / / STANDARD: Profit Sharing Plan, Money Purchase Pension Plan,
Target Benefit Pension Plan, 401(k) Plan.
2. / / Other: ____________________
D. OTHER PLANS. [COMPLETE ONLY IF THE EMPLOYER MAINTAINS OR HAS EVER
MAINTAINED ANOTHER PLAN THAT IS NOT A PAIRED PLAN.]
1. OTHER DEFINED CONTRIBUTION PLAN. The Annual Additions attributable to
this Plan will be determined: [CHECK ONE. SEE Section 7.2(D).]
a. / / STANDARD: BY TREATING THE OTHER PLAN AS A MASTER OR PROTOTYPE
PLAN.
b. / / BY USING THE METHOD DESCRIBED IN ADDENDUM XII.D.1.B.
2. DEFINED BENEFIT PLAN. [CHECK AND ATTACH APPROPRIATE ADDENDUM ONLY IF
APPLICABLE. SEE Section 7.2(A)(3), 7.2(A)(11), Section 7.2(E) AND Section
12.3(G).]
/ / The Annual Additions attributable to this Plan will be limited by
using the method described in Addendum XII.D.2.
XIII. SPECIAL PROVISIONS FOR AMENDMENT AND RESTATEMENT OF PRE-EXISTING PLAN,
MERGERS OR TRANSFERS.
A. VESTING OR DISTRIBUTION RULES. [CHECK AND ATTACH APPROPRIATE
DESCRIPTION ONLY IF APPLICABLE. SEE Section 10.6, Section 14.1(B) AND Section
14.5.]
/ / The special vesting or distribution rules which must be preserved
under Code Section 411 are described in Addendum XIII.A.
B. NORMAL RETIREMENT AGE. [CHECK ONLY IF THE NORMAL RETIREMENT AGE UNDER
THE PRE-EXISTING PLAN WAS DETERMINED WITH REFERENCE TO THE PARTICIPATION
COMMENCEMENT DATE AND THE SPECIAL TRANSITIONAL RULE IN Section 2.43 IS DESIRED.
SEE Section 2.43.]
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<PAGE>
/ / The Normal Retirement Age of a Participant who commenced
participation in the Pre-Existing Plan in a Plan Year beginning before 1988 will
be determined under the transitional rule described in Section 2.43.
C. EFFECTIVE DATES. [CHECK AND ATTACH APPROPRIATE ADDENDUM ONLY IF ANY OF
THE SELECTIONS MADE IN THIS ADOPTION AGREEMENT WILL BECOME EFFECTIVE AS OF A
DATE OTHER THAN THE EFFECTIVE DATE SET FORTH IN PART II.E. HOWEVER, THE ADDENDUM
SHALL IN NO EVENT DELAY THE EFFECTIVE DATE OF ANY PLAN PROVISIONS BEYOND THE
LATEST EFFECTIVE DATE REQUIRED FOR SUCH PROVISION UNDER TRA 86 OR OTHER
APPLICABLE LAW OR REGULATIONS.]
/ / Certain elections in this Adoption Agreement shall be effective
as of the date(s) specified in Addendum XIII.C.
XIV. TRUSTEE APPOINTMENT AND TRUST AGREEMENT. [CHECK ONE. SEE Section 2.66 AND
Section 2.68.]
A. /x/ STANDARD TRUST AGREEMENT. The standard Trust Agreement will apply
and the Trustee will be the following individual(s), bank(s) or other person(s)
who can serve as a fiduciary and trustee under the laws of the State shown in
Part II.C.
__________________________________________________
__________________________________________________
[IF SMITH BARNEY SHEARSON TRUST COMPANY ("SBSTC" 7) IS THE TRUSTEE, SBSTC
WILL CHARGE A FEE AND MAY REQUIRE THE EMPLOYER TO COMPLETE OTHER DOCUMENTS PRIOR
TO ACCEPTING ITS APPOINTMENT AS TRUSTEE. FURTHER, SBSTC WILL ACT ONLY AS A
NONDISCRETIONARY TRUSTEE AND THE INVESTMENT OF THE FUND WILL BE MADE AS DIRECTED
BY THE PLAN ADMINISTRATOR OR THE EMPLOYER. SEE Section 15 AND THE TRUST
AGREEMENT.]
B. / / ALTERNATE TRUST AGREEMENT. The alternate Trust Agreement for
401(k) Plans will apply and the Trustee will be ____________________, which is a
bank or trust company organized under the laws of the State of
____________________ and which is authorized to serve as a fiduciary and trustee
under the laws of such State.
[THE TRUSTEE WILL CHARGE A FEE AND WILL REQUIRE THE EMPLOYER TO COMPLETE
OTHER DOCUMENTS, INCLUDING EXECUTION OF THE ALTERNATE TRUST AGREEMENT, PRIOR TO
ACCEPTING ITS APPOINTMENT AS TRUSTEE. EXCEPT AS DESCRIBED IN THE TRUST
AGREEMENT, THE TRUSTEE WILL ACT ONLY AS A NONDISCRETIONARY TRUSTEE AND WILL BE
SUBJECT TO THE DIRECTIONS OF THE PLAN ADMINISTRATOR AS A NAMED FIDUCIARY UNDER
THE PLAN IN THE CONTROL AND MANAGEMENT OF THE ASSETS OF THE FUND. SUCH
DIRECTIONS WILL BE COMMUNICATED TO THE TRUSTEE BY THE RECORDKEEPER AS DESCRIBED
IN THE TRUST AGREEMENT.]
XV. IRS APPROVAL.
This Plan is designed to operate as a "standardized" plan and an adopting
Employer may rely on the opinion letter issued to the Prototype Sponsor and may
not have to apply
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<PAGE>
for a favorable determination letter on this Plan if the only plans ever
maintained (or later adopted) by the Employer are Paired Plans which satisfy
Section 2.45.
Any Employer who has ever maintained or who later adopts any plan
(including, after December 31, 1985, a welfare benefit fund, as defined in Code
Section 419(e), which provides post-retirement medical benefits allocated to
separate accounts for key employees, as defined in Code Section 419A(d)(3), or
an individual medical account as defined in Code Section 415(1)(2)) in addition
to this Plan (other than a Paired Plan which satisfies Section 2.45) may not
rely on the opinion letter issued to the Prototype Sponsor by the National
Office of the Internal Revenue Service as evidence that this Plan is qualified
under Code Section 401.
Any Employer who adopts or maintains multiple plans (other than Paired
Plans) must apply to the appropriate Key District Office for a favorable
determination letter on this Plan to obtain reliance that this Plan as adopted
by the Employer is qualified.
An Employer may not rely on the opinion letter issued by the National
Office of the Internal Revenue Service as evidence that this Plan is qualified
under Code Section 401 unless the terms of the Plan, as herein adopted or
amended, that pertain to the requirements of Code Section 401(a)(4), Section
401(a)(17), Section 401(l), Section 401(a)(5), Section 410(b) and Section
414(s), as amended by the Tax Reform Act of 1986, or later laws, (a) are made
effective retroactively to the first day of the first Plan Year beginning after
December 31,1988 (or such later date on which these requirements first become
effective with respect to this Plan) or (b) are made effective no later than the
first day on which the Employer is no longer entitled, under regulations, to
rely on a reasonable, good faith interpretation of these requirements, and the
prior provisions of the plan constitute such an interpretation.
Smith Barney Shearson will notify each adopting Employer of any amendments
that have been made to the Plan by Smith Barney Shearson as Prototype Sponsor or
of any intention to discontinue or abandon its sponsorship of the Plan as a
prototype plan.
SIGNATURES
IMPORTANT:
In order to have a valid plan and trust, this Adoption Agreement must be
signed by individuals authorized to sign for the Employer and, if applicable,
the Trustee and each Participating Affiliate. If the alternate Trust Agreement
is specified in Part XIV.B., the Trust Agreement must be signed by the Employer,
the Trustee and, if applicable, each Participating Affiliate.
This Adoption Agreement will not become effective as a prototype plan
unless and until it is accepted by Smith Barney Shearson as the Prototype
Sponsor but, upon such acceptance, will be effective as a prototype plan
retroactive to the Effective Date.
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<PAGE>
Each Affiliate (i.e., each member of a controlled group of corporations,
commonly controlled group of trades or businesses, or an affiliated service
group within the meaning of Code Section 414) must adopt this Plan as a
Participating Affiliate.
EMPLOYER REPRESENTATIONS. The undersigned hereby certifies that the
adoption of the Plan and the Trust Agreement is authorized by (1) a Board of
Directors' resolution for an Employer which is a corporation, or (2) a written
authorization by the person or persons duly authorized to act on behalf of an
Employer which is not a corporation. If this Adoption Agreement amends and
restates a Pre-Existing Plan, the undersigned hereby certifies that such
amendment is duly authorized by the Employer. The undersigned hereby
acknowledges that the Prototype Sponsor (1) is not responsible for the elections
made in this Adoption Agreement, (2) shall have no responsibility whatsoever
with respect to the Fund or the operation and administration of this Plan, and
(3) has advised the Employer to consult with legal counsel for the Employer
regarding the adoption and operation of this Plan. The undersigned further
acknowledges that the Employer is solely responsible for the elections made in
this Adoption Agreement and for the operation and administration of this Plan.
Finally, the undersigned acknowledges that the Prototype Sponsor will charge an
annual prototype maintenance fee and hereby authorizes the Prototype Sponsor to
charge such fees against any brokerage account maintained for the Plan.
EMPLOYER EXECUTION. Subject to the terms and conditions of the Plan, the
Trust Agreement and this Adoption Agreement, the undersigned hereby has executed
this Adoption Agreement to evidence its adoption (or, if applicable, amendment)
of the Plan and the Trust Agreement.
Signature: /s/Vicki S. Hammond
--------------------
Title: CFO Date: 12-22-95
---------------------
TRUSTEE EXECUTION. Subject to the terms and conditions of the Plan, the
Trust Agreement and this Adoption Agreement, the undersigned hereby accepts its
appointment as Trustee and has executed this Adoption Agreement to evidence its
adoption of the Trust Agreement. [ATTACH ADDITIONAL SIGNATURE PAGES IF THERE ARE
MORE THAN THREE TRUSTEES. IF THE ALTERNATE TRUST AGREEMENT IS SPECIFIED IN PART
XIV.B., THE TRUSTEE SHOULD EXECUTE THE ALTERNATE TRUST AGREEMENT IN LIEU OF
EXECUTING THE ADOPTION AGREEMENT IN THIS SECTION.]
Signature: /s/Vicki S. Hammond Date: 12/19/95
-------------------- ---------
Signature: Date:
-------------------- ---------
Signature: Date:
-------------------- ---------
PARTICIPATING AFFILIATES EXECUTION. [ATTACH ADDITIONAL SIGNATURE PAGES IF
THERE ARE MORE THAN THREE PARTICIPATING AFFILIATES. AN ORGANIZATION WHICH
BECOMES AN AFFILIATE AFTER THIS ADOPTION AGREEMENT IS EXECUTED SHOULD EVIDENCE
ITS ADOPTION OF THIS PLAN BY EXECUTING AND ATTACHING TO THIS ADOPTION AGREEMENT
A SIGNATURE PAGE WHICH INCLUDES THE INFORMATION SET FORTH BELOW.]
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<PAGE>
Subject to the terms and conditions of the Plan, the Trust Agreement and this
Adoption Agreement, the undersigned hereby has executed this Adoption Agreement
to evidence its adoption (or, if applicable, amendment) of the Plan and the
Trust Agreement.
AFFILIATE NAME:
Signature:--------------------
Date:----------------------------
Effective Date of Adoption of Plan by Affiliate (if different from the Effective
Date in Part II.E.):
AFFILIATE NAME:
Signature:
---------------------
Date:
----------------------------
Effective Date of Adoption of Plan by Affiliate (if different from the Effective
Date in Part II.E.):
Effective Date of Adoption of Plan by Affiliate (if different from the Effective
Date in Part II.E.):
AFFILIATE NAME:
Signature:
---------------------
Date:
----------------------------
PROTOTYPE SPONSOR ACCEPTANCE. Subject to the terms and conditions of the Plan,
the Trust Agreement and this Adoption Agreement, this Adoption Agreement is
accepted by the Prototype Sponsor.
Authorized Signature: /s/ H. Wayne Hutton
-----------------------------
Date: 7/29/96
--------------------------------------
29
