<PAGE> 1
As Filed with the Securities and Exchange Commission on July 1, 1996
Registration No. 333-________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
OASIS RESIDENTIAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEVADA 88-0297457
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
4041 EAST SUNSET ROAD
HENDERSON, NEVADA 89014
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES INCLUDING ZIP CODE)
----------------
OASIS RESIDENTIAL, INC.
401(K) RETIREMENT PLAN
(Full title of the plan)
---------------
ALLAN O. HUNTER, JR. COPY TO:
Executive Vice President, JEFFREY T. PERO, ESQ.
Secretary and Director LATHAM & WATKINS
OASIS RESIDENTIAL, INC. 650 TOWN CENTER DRIVE, TWENTIETH FLOOR
4041 East Sunset Road COSTA MESA, CALIFORNIA 92626
Henderson, Nevada 89014 (714) 540-1235
(702) 435-9800
(NAME AND ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
----------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------
PROPOSED
PROPOSED MAXIMUM
AMOUNT MAXIMUM AGGREGATE AMOUNT OF
TITLE OF SECURITIES TO BE OFFERING PRICE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE (1) PRICE (1) FEE
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock ............ 20,000 $21.813 $436,260 $151
- --------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(h). The Proposed Maximum Aggregate Offering
Price is the average of the high and low sales price of the Common
Stock in the over-the-countermarket, as reported on the New York
Stock Exchange, on June 27, 1996 (which were $22.00 and $21.625,
respectively).
(2) In addition, pursuant to Rule 416(c) under the Securities Act of
1933, this registration statement covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefits
plan described herein.
================================================================================
EXHIBIT INDEX ON PAGE 7
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PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The information called for in Part I of Form S-8 is not being filed
with or included in this Form S-8 (by incorporation by reference or otherwise)
in accordance with the rules and regulations of the Securities and Exchange
Commission (the "Commission").
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed with the Commission are incorporated
herein by reference:
(a) Annual Report on Form 10-K for the fiscal year ended
December 31, 1995, filed by Oasis Residential, Inc. (the "Company")
with the Commission.
(b) Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1996, filed by Oasis Residential, Inc. (the
"Company") with the Commission.
(c) The description of the Common Stock contained in the
Amendment No. 3 to Form S-11 Registration Statement (File No.
33-79564) dated July 18, 1994, including any subsequently filed
amendments and reports updating such description.
(d) Annual Report on Form 11-K of the Oasis Residential,
Inc. 401(k) Retirement Plan, for the plan year ended December 31,
1996, filed June 28, 1996.
In addition to the foregoing documents, all documents subsequently
filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), prior to the
filing of a post-effective amendment which indicates that all securities offered
hereby have been sold or which deregisters all securities then remaining unsold,
shall be deemed to be incorporated by reference herein and to be a part hereof
from the date of the filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
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ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Subsection 1 of Section 78.751 of the Nevada Revised Statues -
Chapter 78 Private Corporations (the "Nevada Law") empowers a corporation to
indemnify any person who was or is a party or is threatened to be made a party
of any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the corporation or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation or enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
Subsection 2 of Section 78.751 empowers a corporation to indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above against expenses,
including attorneys' fees, actually and reasonably incurred by him in connection
with the defense or settlement of such action or suit if he acted under similar
standards, except that no indemnification may be made in respect of any claim,
issue or matter as to which such person shall have been adjudged to be liable
for negligence or misconduct in the performance of his duty to the corporation
unless and only to the extent that the court in which such action or suit was
brought determines that, despite the adjudication of liability, such person is
fairly and reasonably entitled to indemnity for such expenses as the court deems
proper.
Section 78.751 further provides that to the extent a director or
officer of a corporation has been successful in the defense of any action, suit
or proceeding referred to in subsection (1) and (2) or in the defense of any
claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith; that indemnification provided for by Section 78.751 shall
not be deemed exclusive of any other rights to which the indemnified party may
be entitled; that the scope of indemnification shall continue as to directors,
officers, employees or agents who have ceased to hold such positions, and to
their heirs, executors and administrators; and empowers the corporation to
purchase and maintain insurance on behalf of a director, officer, employee or
agent of the corporation against any liability asserted against him or incurred
by him in any such capacity or arising out of his status as such whether or not
the corporation would have the power to indemnify him against such liabilities
under Section 78.751.
Article IX of the Articles of Incorporation of the Registrant
provides for indemnification of its officers and directors, substantially
identical in scope to that permitted under Section 78.751 of the Nevada Law. The
Bylaws provide, pursuant to Subsection 2 of Section 78.751, that the expenses of
officers and directors incurred in defending any action, suit or proceeding,
whether civil, criminal, administrative or investigative, must be paid by the
corporation as they are incurred and in advance of the final disposition of the
action, suit or proceeding, upon receipt of an undertaking by or on behalf of
the director of officer to repay all amounts so advanced if it is ultimately
determined by a court of competent jurisdiction that the officer or director is
not entitled to be indemnified by the corporation.
The Company has entered into indemnification agreements with certain
of its directors and officers that require the Company to indemnify such
directors and officers to the fullest extent permitted by applicable provisions
of Nevada Law, provided that any settlement of a third party action against a
3
<PAGE> 4
director or officer is approved by the Company, and subject to limitations for
actions initiated by the director or officer, penalties paid by insurance, and
violations of section 16(b) of the Exchange Act and similar laws.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
See Index to Exhibits on page 7.
ITEM 9. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended (the
"Securities Act");
(ii) to reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement; and
(iii) to include any material information with respect
to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such
information in this Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13
or Section 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment shall be deemed to
be a new Registration Statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered which remain unsold
at termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
(and, where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in this Registration Statement shall
4
<PAGE> 5
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Henderson, State of Nevada, on this 28th day of June,
1996.
OASIS RESIDENTIAL, INC.
a Nevada corporation
By: /s/ Robert V. Jones
-----------------------------------------
Robert V. Jones
Chairman of the Board of Directors
and Chief Executive Officer
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POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes
and appoints Robert V. Jones, Scott S. Ingraham and Allan O. Hunter, Jr., as
attorneys-in-fact and agents, each acting alone, with full powers of
substitution to sign on his or her behalf, individually and in the capacities
stated below, and to file any and all amendments, including post-effective
amendments, to this Registration Statement and other documents in connection
therewith, with the Securities and Exchange Commission, granting to said
attorneys-in-fact and agents full power and authority to perform any other act
on behalf of the undersigned required to be done in the premises.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Robert V. Jones Chairman of the Board of Directors June 28, 1996
- ------------------------------ and Chief Executive Officer
Robert V. Jones
/s/ Scott S. Ingraham President, Chief Financial Officer and June 28, 1996
- ------------------------------ Director
Scott S. Ingraham
/s/ Allan O. Hunter, Jr. Executive Vice President, Secretary June 28, 1996
- ------------------------------ and Director
Allan O. Hunter, Jr.
/s/ Walter B. Eeds Executive Vice President and Director June 28, 1996
- ------------------------------
Walter B. Eeds
/s/ Alvin R. Garraway Vice President, Controller and June 28, 1996
- ------------------------------ Treasurer
Alvin R. Garraway
/s/ John M. Galvin Director June 28, 1996
- ------------------------------
John M. Galvin
/s/ Kenny C. Guinn Director June 28, 1996
- ------------------------------
Kenny C. Guinn
/s/ Edward R. Muller Director June 28, 1996
- ------------------------------
Edward R. Muller
/s/ Peter L. Rhein Director June 28, 1996
- ------------------------------
Peter L. Rhein
/s/ Robert H. Smith Director June 28, 1996
- ------------------------------
Robert H. Smith
</TABLE>
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INDEX TO EXHIBITS
EXHIBIT
- -------
4.1 The Oasis Residential, Inc. 401(k) Retirement Plan
4.2 Articles of Incorporation. Incorporated herein by reference to
the Company's Annual Report on Form 10-K for the period
ended December 31, 1995.
4.3 By-Laws. Incorporated herein by reference to the Company's
Annual Report on Form 10-K for the period ended December 31, 1995.
5.1 Opinion of Herbert L. Waldman, Esq.
23.1 Consent of Herbert L. Waldman, Esq. (included in Exhibit 5.1).
23.2 Consent of Coopers & Lybrand LLP.
23.3 Consent of Coopers & Lybrand LLP.
24 Power of Attorney (included on the signature page to this
Registration Statement).
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EXHIBIT 4.1
OASIS RESIDENTIAL, INC.
401(K) RETIREMENT PLAN
Defined Contribution Plan 7.7
Effective January 1, 1995
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
INTRODUCTION
ARTICLE I FORMAT AND DEFINITIONS
Section 1.01 - Format
Section 1.02 - Definitions
ARTICLE II PARTICIPATION
Section 2.01 - Active Participant
Section 2.02 - Inactive Participant
Section 2.03 - Cessation of Participation
ARTICLE III CONTRIBUTIONS
Section 3.01 - Employer Contributions
Section 3.01A - Rollover Contributions
Section 3.02 - Forfeitures
Section 3.03 - Allocation
Section 3.04 - Contribution Limitation
Section 3.05 - Excess Amounts
ARTICLE IV INVESTMENT OF CONTRIBUTIONS
Section 4.01 - Investment of Contributions
ARTICLE V BENEFITS
Section 5.01 - Retirement Benefits
Section 5.02 - Death Benefits
Section 5.03 - Vested Benefits
Section 5.04 - When Benefits Start
Section 5.05 - Withdrawal Privileges
Section 5.06 - Loans to Participants
ARTICLE VI DISTRIBUTION OF BENEFITS
Section 6.01 - Automatic Forms of Distribution
Section 6.02 - Optional Forms of Distribution and Distribution Requirements
Section 6.03 - Election Procedures
Section 6.04 - Notice Requirements
ARTICLE VII TERMINATION OF PLAN
</TABLE>
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<TABLE>
<S> <C>
ARTICLE VIII ADMINISTRATION OF PLAN
Section 8.01 - Administration
Section 8.02 - Records
Section 8.03 - Information Available
Section 8.04 - Claim and Appeal Procedures
Section 8.05 - Unclaimed Vested Account Procedure
Section 8.06 - Delegation of Authority
ARTICLE IX GENERAL PROVISIONS
Section 9.01 - Amendments
Section 9.02 - Direct Rollovers
Section 9.03 - Mergers and Direct Transfers
Section 9.04 - Provisions Relating to the Insurer and Other Parties
Section 9.05 - Employment Status
Section 9.06 - Rights to Plan Assets
Section 9.07 - Beneficiary
Section 9.08 - Nonalienation of Benefits
Section 9.09 - Construction
Section 9.10 - Legal Actions
Section 9.11 - Small Amounts
Section 9.12 - Word Usage
Section 9.13 - Transfers Between Plans
Section 9.14 - Qualification of Plan
ARTICLE X TOP-HEAVY PLAN REQUIREMENTS
Section 10.01 - Application
Section 10.02 - Definitions
Section 10.03 - Modification of Vesting Requirements
Section 10.04 - Modification of Contributions
Section 10.05 - Modification of Contribution Limitation
PLAN EXECUTION
</TABLE>
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INTRODUCTION
The Primary Employer is establishing a defined contribution 401(k)
retirement plan for the exclusive benefit of certain of its employees.
It is intended that the plan qualify as a profit sharing plan under
the Internal Revenue Code of 1986, including any later amendments to the Code.
The Employer agrees to operate the plan according to the terms, provisions and
conditions set forth in this document.
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ARTICLE I
FORMAT AND DEFINITIONS
SECTION 1.01--FORMAT.
Words and phrases defined in the DEFINITIONS SECTION of Article I
shall have that defined meaning when used in this Plan, unless the context
clearly indicates otherwise.
These words and phrases have an initial capital letter to aid in
identifying them as defined terms.
SECTION 1.02--DEFINITIONS.
ACCOUNT means, for a Participant, his share of the Investment Fund.
Separate accounting records are kept for those parts of his Account
that result from:
a) Elective Deferral Contributions.
b) Matching Contributions.
c) Other Employer Contributions.
d) Rollover Contributions.
If the Participant's Vesting Percentage is less than 100% as to any of
the Employer Contributions, a separate accounting record will be kept
for any part of his Account resulting from such Employer Contributions
and, if there has been a prior Forfeiture Date, from such
Contributions made before a prior Forfeiture Date.
A Participant's Account shall be reduced by any distribution of his
Vested Account and by any Forfeitures. A Participant's Account will
participate in the earnings credited, expenses charged and any
appreciation or depreciation of the Investment Fund. His Account is
subject to any minimum guarantees applicable under the Group Contract
or other investment arrangement.
ACTIVE PARTICIPANT means an Eligible Employee who is actively
participating in the Plan according to the provisions in the ACTIVE
PARTICIPANT SECTION of Article II.
AFFILIATED SERVICE GROUP means any group of corporations, partnerships
or other organizations of which the Employer is a part and which is
affiliated within the meaning of Code Section 414(m) and regulations
thereunder. Such a group includes at least two organizations one of
which is either a service organization (that is, an organization the
principal business of which is performing services), or an
organization the principal business of which is performing management
functions on a regular and continuing basis. Such service is of a
type historically performed by employees. In the case of a management
organization, the Affiliated Service Group shall include organizations
related, within the meaning of Code Section 144(a)(3), to either the
management organization or the organization for which it performs
management functions. The term Controlled Group, as it is used in
this Plan, shall include the term Affiliated Service Group.
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ANNUAL COMPENSATION means, on any given date, the Employee's Compensation for
the latest Compensation Year ending on or before the given date.
ANNUITY STARTING DATE means, for a Participant, the first day of the first
period for which an amount is payable as an annuity or any other form.
BENEFICIARY means the person or persons named by a Participant to receive any
benefits under this Plan upon the Participant's death. See the BENEFICIARY
SECTION of Article IX.
CLAIMANT means any person who has made a claim for benefits under this Plan.
See the CLAIM AND APPEAL PROCEDURES SECTION of Article VIII.
CODE means the Internal Revenue Code of 1986, as amended.
COMPENSATION means, except as modified in this definition, the total earnings
paid or made available to an Employee by the Employer during any specified
period.
"Earnings" in this definition means Compensation as defined in the CONTRIBUTION
LIMITATION SECTION of Article III.
Compensation shall also include elective contributions. Elective contributions
are amounts excludable from the Employee's gross income under Code Sections
125, 402(e)(3), 402(h) or 403(b), and contributed by the Employer, at the
Employee's election, to a Code Section 401(k) arrangement, a simplified
employee pension, cafeteria plan or tax-sheltered annuity. Elective
contributions also include Compensation deferred under a Code Section 457 plan
maintained by the Employer and Employee contributions "picked up" by a
governmental entity and, pursuant to Code Section 414(h)(2), treated as
Employer contributions.
For purposes of the EXCESS AMOUNTS SECTION of Article III, the Employer may
elect to use an alternative nondiscriminatory definition of Compensation in
accordance with the regulations under Code Section 414(s).
For purposes of determining the amount of Elective Deferral Contributions,
Compensation shall exclude reimbursements or other expense allowances, fringe
benefits (cash and noncash), moving expenses, deferred compensation and welfare
benefits.
For Plan Years beginning after December 31, 1988, and before January 1, 1994,
the annual Compensation of each Participant taken into account for determining
all benefits provided under the Plan for any year shall not exceed $200,000.
For Plan Years beginning on or after January 1, 1994, the annual Compensation
of each Participant taken into account for determining all benefits provided
under the Plan for any year shall not exceed $150,000.
The $200,000 limit shall be adjusted by the Secretary at the same time and in
the same manner as under Code Section 415(d). The $150,000 limit shall be
adjusted by the Commissioner for increases in the cost of living in accordance
with Code Section 401(a)(17)(B). The cost of living adjustment in effect for a
calendar year applies to any period, not exceeding 12 months, over which pay is
determined (determination period) beginning in such calendar year. If a
determination period consists of fewer than 12 months, the annual compensation
limit will be multiplied by a fraction, the numerator of which is the number of
months in the determination period, and the denominator of which is 12.
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In determining the Compensation of a Participant for purposes of the annual
compensation limit, the rules of Code Section 414(q)(6) shall apply, except
that in applying such rules, the term "family" shall include only the spouse of
the Participant and any lineal descendants of the Participant who have not
attained age 19 before the close of the year. If, as a result of the
application of such rules the adjusted annual compensation limit is exceeded,
then (except for purposes of determining the portion of Compensation up to the
integration level if this Plan provides for permitted disparity) the limitation
shall be prorated among the affected individuals in proportion to each such
individual's Compensation as determined under this definition prior to the
application of this limitation.
If Compensation for any prior determination period is taken into account in
determining a Participant's benefits accruing in the current Plan Year, the
Compensation for that prior determination period is subject to the annual
compensation limit in effect for that prior determination period. For this
purpose, for determination periods beginning before the first day of the first
Plan Year beginning on or after January 1, 1989, which are used to determine
benefits in Plan Years beginning after December 31, 1988 and before January 1,
1994, the annual compensation limit is $200,000. For this purpose, for
determination periods beginning before the first day of the first Plan Year
beginning on or after January 1, 1994, which are used to determine benefits in
Plan Years beginning on or after January 1, 1994, the annual compensation limit
is $150,000.
Compensation means, for an Employee who is a Leased Employee, the Employee's
Compensation for the services he performs for the Employer, determined in the
same manner as the Compensation of Employees who are not Leased Employees,
regardless of whether such Compensation would be received directly from the
Employer or from the leasing organization.
COMPENSATION YEAR means each one-year period ending on the last day of the Plan
Year, including corresponding periods before January 1, 1995.
CONTINGENT ANNUITANT means an individual named by the Participant to receive a
lifetime benefit after the Participant's death in accordance with a
survivorship life annuity.
CONTRIBUTIONS means
Elective Deferral Contributions
Matching Contributions
Discretionary Contributions
Rollover Contributions
as set out in Article III, unless the context clearly indicates otherwise.
CONTROLLED GROUP means any group of corporations, trades or businesses of which
the Employer is a part that are under common control. A Controlled Group
includes any group of corporations, trades or businesses, whether or not
incorporated, which is either a parent-subsidiary group, a brother-sister
group, or a combined group within the meaning of Code Section 414(b), Code
Section 414(c) and regulations thereunder and, for purposes of determining
contribution limitations under the CONTRIBUTION LIMITATION SECTION of Article
III, as modified by Code Section 415(h) and, for the purpose of identifying
Leased Employees, as modified by Code Section 144(a)(3). The term Controlled
Group, as it is used in this Plan, shall include the term Affiliated Service
Group and any other employer required to be aggregated with the Employer under
Code Section 414(o) and the regulations thereunder.
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<PAGE> 8
DIRECT ROLLOVER means a payment by the Plan to the Eligible Retirement Plan
specified by the Distributee.
DISCRETIONARY CONTRIBUTIONS means discretionary contributions made by the
Employer to fund this Plan. See the EMPLOYER CONTRIBUTIONS SECTION of Article
III.
DISTRIBUTEE means an Employee or former Employee. In addition, the Employee's
or former Employee's surviving spouse and the Employee's or former Employee's
spouse or former spouse who is the alternate payee under a qualified domestic
relations order, as defined in Code Section 414(p), are Distributees with
regard to the interest of the spouse or former spouse.
EARLY RETIREMENT DATE means the first day of any month before a Participant's
Normal Retirement Date which the Participant selects for the start of his
retirement benefit. This day shall be on or after the date on which he ceases
to be an Employee and the date he meets the following requirements):
a) He has attained age 55.
b) He has completed 5 years of Vesting Service.
ELECTIVE DEFERRAL CONTRIBUTIONS means Contributions made by the Employer to
fund this Plan in accordance with a qualified cash or deferred arrangement as
described in Code Section 401(k). See the EMPLOYER CONTRIBUTIONS SECTION of
Article III.
ELIGIBILITY BREAK IN SERVICE means an Eligibility Computation Period in which
an Employee is credited with 500 or fewer Hours-of-Service. An Employee incurs
an Eligibility Break in Service on the last day of an Eligibility Computation
Period in which he has an Eligibility Break in Service.
ELIGIBILITY COMPUTATION PERIOD means a 12-consecutive month period. The first
Eligibility Computation Period begins on an Employee's Employment Commencement
Date. Later Eligibility Computation Periods begin on anniversaries of his
Employment Commencement Date.
To determine an Eligibility Computation Period after an Eligibility Break in
Service, the Plan shall use the 12-consecutive month period beginning on an
Employee's Reemployment Commencement Date as if his Reemployment Commencement
Date were his Employment Commencement Date.
ELIGIBILITY SERVICE means one year of service for each Eligibility Computation
Period that has ended and in which an Employee is credited with at least 1,000
Hours-of-Service.
However, Eligibility Service is modified as follows:
Period of Military Duty included:
A Period of Military Duty shall be included as service with the
Employer to the extent it has not already been credited. For purposes
of crediting Hours-of-Service during the Period of Military Duty, an
Hour-of-Service shall be credited (without regard to the 501 Hour-
of-Service limitation) for each hour an Employee would normally have
been scheduled to work for the Employer during such period.
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Controlled Group service included:
An Employee's service with a member firm of a Controlled Group while
both that firm and the Employer were members of the Controlled Group
shall be included as service with the Employer.
ELIGIBLE EMPLOYEE means any Employee of the Employer.
ELIGIBLE RETIREMENT PLAN means an individual retirement account described in
Code Section 408(a), an individual retirement annuity described in Code Section
408(b), an annuity plan described in Code Section 403(a) or a qualified trust
described in Code Section 401(a), that accepts the Distributee's Eligible
Rollover Distribution.
However, in the case of an Eligible Rollover Distribution to the surviving
spouse, an Eligible Retirement Plan is an individual retirement account or
individual retirement annuity.
ELIGIBLE ROLLOVER DISTRIBUTION means any distribution of all or any portion of
the balance to the credit of the Distributee, except that an Eligible Rollover
Distribution does not include:
a) Any distribution that is one of a series of substantially
equal periodic payments (not less frequently than annually)
made for the life (or life expectancy) of the Distributee or
the joint lives (or joint life expectancies) of the
Distributee and the Distributee's designated Beneficiary, or
for a specified period of ten years or more.
b) Any distribution to the extent such distribution is required
under Code Section 401(a)(9).
c) The portion of any distribution that is not includible in
gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer
securities).
EMPLOYEE means an individual who is employed by the Employer or any other
employer required to be aggregated with the Employer under Code Sections
414(b), (c), (m) or (o). A Controlled Group member is required to be
aggregated with the Employer.
The term Employee shall also include any Leased Employee deemed to be an
employee of any employer described in the preceding paragraph as provided in
Code Sections 414(n) or 414(o).
EMPLOYER means the Primary Employer. This will also include any successor
corporation or firm of the Employer which shall, by written agreement, assume
the obligations of this Plan or any predecessor corporation or firm of the
Employer (absorbed by the Employer, or of which the Employer was once a part)
which became a predecessor because of a change of name, merger, purchase of
stock or purchase of assets and which maintained this Plan.
EMPLOYER CONTRIBUTIONS means
Elective Deferral Contributions
Matching Contributions
Discretionary Contributions
as set out in Article III, unless the context clearly indicates otherwise.
8
<PAGE> 10
EMPLOYMENT COMMENCEMENT DATE means the date an Employee first performs an
Hour-of-Service.
ENTRY DATE means the date an Employee first enters the Plan as an Active
Participant. See the ACTIVE PARTICIPANT SECTION of Article II.
FAMILY MEMBER means an individual described in Code Section 414(q)(6)(B).
FISCAL YEAR means the Primary Employer's taxable year. The last day of the
Fiscal Year is December 31.
FORFEITURE means the part, if any, of a Participant's Account that is
forfeited. See the FORFEITURES SECTION of Article III.
FORFEITURE DATE means, as to a Participant, the last day of five consecutive
one-year Periods of Severance.
This is the date on which the Participant's Nonvested Account will be forfeited
unless an earlier forfeiture occurs as provided in the FORFEITURES SECTION of
Article III.
GROUP CONTRACT means the group annuity contract or contracts into which the
Trustee enters with the Insurer for the investment of Contributions and the
payment of benefits under this Plan. The term Group Contract as it is used in
this Plan is deemed to include the plural unless the context clearly indicates
otherwise.
HIGHLY COMPENSATED EMPLOYEE means a highly compensated active Employee or a
highly compensated former Employee.
A highly compensated active Employee means any Employee who performs service
for the Employer during the determination year and who, during the look-back
year:
a) received compensation from the Employer in excess of $75,000
(as adjusted pursuant to Code Section 415(d));
b) received compensation from the Employer in excess of $50,000
(as adjusted pursuant to Code Section 415(d)) and was a member
of the top-paid group for such year; or
c) was an officer of the Employer and received compensation
during such year that is greater than 50 percent of the dollar
limitation in effect under Code Section 415(b)(1)(A).
The term Highly Compensated Employee also means:
d) Employees who are both described in the preceding sentence if
the term "determination year" is substituted for the term
"look-back year" and the Employee is one of the 100 Employees
who received the most compensation from the Employer during
the determination year; and
e) Employees who are 5 percent owners at any time during the
look-back year or determination year.
9
<PAGE> 11
If no officer has satisfied the compensation requirement of (c) above during
either a determination year or look-back year, the highest paid officer for
such year shall be treated as a Highly Compensated Employee.
For this purpose, the determination year shall be the Plan Year. The look-back
year shall be the twelve-month period immediately preceding the determination
year.
A highly compensated former Employee means any Employee who separated from
service (or was deemed to have separated) prior to the determination year,
performs no service for the Employer during the determination year, and was a
highly compensated active Employee for either the separation year or any
determination year ending on or after the Employee's 55th birthday.
If an Employee is, during a determination year or look-back year, a family
member of either a 5 percent owner who is an active or former Employee or a
Highly Compensated Employee who is one of the 10 most highly compensated
Employees ranked on the basis of compensation paid by the Employer during such
year, then the family member and the 5 percent owner or top-ten highly
compensated Employee shall be aggregated. In such case, the family member and
5 percent owner or top-ten highly compensated Employee shall be treated as a
single Employee receiving compensation and Plan contributions or benefits equal
to the sum of such compensation and contributions or benefits of the family
member and 5 percent owner or top-ten highly compensated Employee. For
purposes of this definition, family member includes the spouse, lineal
ascendants and descendants of the Employee or former Employee and the spouses
of such lineal ascendants and descendants.
The determination of who is a Highly Compensated Employee, including the
determinations of the number and identity of Employees in the top-paid group,
the top 100 Employees, the number of Employees treated as officers and the
compensation that is considered, will be made in accordance with Code Section
414(q) and the regulations thereunder.
HOUR-OF-SERVICE means, for the elapsed time method of crediting service in this
Plan, each hour for which an Employee is paid, or entitled to payment, for
performing duties for the Employer. Hour-of-Service means, for the hours
method of crediting service in this Plan, the following:
a) Each hour for which an Employee is paid, or entitled to
payment, for performing duties for the Employer during the
applicable computation period.
b) Each hour for which an Employee is paid, or entitled to
payment, by the Employer because of a period of time in which
no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation,
holiday, illness, incapacity (including disability), layoff,
jury duty, military duty or leave of absence. Notwithstanding
the preceding provisions of this subparagraph (b), no credit
will be given to the Employee
1. for more than 501 Hours-of-Service under this
subparagraph (b) because of any single continuous
period in which the Employee performs no duties
(whether or not such period occurs in a single
computation period); or
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<PAGE> 12
2. for an Hour-of-Service for which the Employee is
directly or indirectly paid, or entitled to payment,
because of a period in which no duties are performed
if such payment is made or due under a plan
maintained solely for the purpose of complying with
applicable worker's or workmen's compensation, or
unemployment compensation or disability insurance
laws; or
3. for an Hour-of-Service for a payment which solely
reimburses the Employee for medical or medically
related expenses incurred by him.
For purposes of this subparagraph (b), a payment shall be
deemed to be made by, or due from the Employer, regardless of
whether such payment is made by, or due from the Employer,
directly or indirectly through, among others, a trust fund or
insurer, to which the Employer contributes or pays premiums
and regardless of whether contributions made or due to the
trust fund, insurer or other entity are for the benefit of
particular employees or are on behalf of a group of employees
in the aggregate.
c) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The
same Hours-of-Service shall not be credited under both
subparagraph (a) or subparagraph (b) above (as the case may
be) and under this subparagraph (c). Crediting of
Hours-of-Service for back pay awarded or agreed to with
respect to periods described in subparagraph (b) above will be
subject to the limitations set forth in that subparagraph.
The crediting of Hours-of-Service above shall be applied under the rules of
paragraphs (b) and (c) of the Department of Labor Regulation 2530.200b-2
(including any interpretations or opinions implementing said rules); which
rules, by this reference, are specifically incorporated in full within this
Plan. The reference to paragraph (b) applies to the special rule for
determining hours of service for reasons other than the performance of duties
such as payments calculated (or not calculated) on the basis of units of time
and the rule against double credit. The reference to paragraph (c) applies to
the crediting of hours of service to computation periods.
Hours-of-Service shall be credited for employment with any other employer
required to be aggregated with the Employer under Code Sections 414(b), (c),
(m) or (o) and the regulations thereunder for purposes of eligibility and
vesting. Hours-of-Service shall also be credited for any individual who is
considered an employee for purposes of this Plan pursuant to Code Section
414(n) or Code Section 414(o) and the regulations thereunder.
Solely for purposes of determining whether a one-year break in service has
occurred for eligibility or vesting purposes, during a Parental Absence an
Employee shall be credited with the Hours-of-Service which otherwise would
normally have been credited to the Employee but for such absence or in any
case in which such hours cannot be determined, eight Hours-of-Service per day
of such absence. The Hours-of-Service credited under this paragraph shall be
credited in the computation period in which the absence begins if the crediting
is necessary to prevent a break in service in that period; or in all other
cases, in the following computation period.
INACTIVE PARTICIPANT means a former Active Participant who has an Account. See
the INACTIVE PARTICIPANT SECTION of Article II.
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<PAGE> 13
INSURER means Principal Mutual Life insurance Company and any other insurance
company or companies named by the Trustee or Primary Employer.
INVESTMENT FUND means the total assets held for the purpose of providing
benefits for Participants. These funds result from Contributions made under
the Plan.
INVESTMENT MANAGER means any fiduciary (other than a trustee or Named
Fiduciary)
a) who has the power to manage, acquire, or dispose of any assets
of the Plan; and
b) who (1) is registered as an investment adviser under the
Investment Advisers Act of 1940, or (2) is a bank, as
defined in the Investment Advisers Act of 1940, or (3) is an
insurance company qualified to perform services described in
subparagraph (a) above under the laws of more than one state;
and
c) who has acknowledged in writing being a fiduciary with respect
to the Plan.
LATE RETIREMENT DATE means the first day of any month which is after a
Participant's Normal Retirement Date and on which retirement benefits begin.
If a Participant continues to work for the Employer after his Normal Retirement
Date, his Late Retirement Date shall be the earliest first day of the month on
or after he ceases to be an Employee. An earlier or a later Retirement Date
may apply if the Participant so elects. An earlier Retirement Date may apply
if the Participant is age 70 1/2. See the WHEN BENEFITS START SECTION of
Article V.
LEASED EMPLOYEE means any person (other than an employee of the recipient) who
pursuant to an agreement between the recipient and any other person ("leasing
organization") has performed services for the recipient (or for the recipient
and related persons determined in accordance with Code Section 414(n)(6)) on a
substantially full time basis for a period of at least one year, and such
services are of a type historically performed by employees in the business
field of the recipient employer. Contributions or benefits provided a Leased
Employee by the leasing organization which are attributable to service
performed for the recipient employer shall be treated as provided by the
recipient employer.
A Leased Employee shall not be considered an employee of the recipient if:
a) such employee is covered by a money purchase pension plan
providing (1) a nonintegrated employer contribution rate of at
least 10 percent of compensation, as defined in Code Section
415(c)(3), but including amounts contributed pursuant to a
salary reduction agreement which are excludable from the
employee's gross income under Code Sections 125, 402(e)(3),
402(h) or 403(b), (2) immediate participation, and (3) full
and immediate vesting and
b) Leased Employees do not constitute more than 20 percent of the
recipient's nonhighly compensated workforce.
LOAN ADMINISTRATOR means the person or positions authorized to administer the
Participant loan program.
The Loan Administrator is MARILYN SHULLO.
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<PAGE> 14
MATCHING CONTRIBUTIONS means matching contributions made by the Employer to
fund this Plan. See the EMPLOYER CONTRIBUTIONS SECTION of Article III.
MONTHLY DATE means each Yearly Date and the same day of each following month
during the Plan Year beginning on such Yearly Date.
NAMED FIDUCIARY means the person or persons who have authority to control and
manage the operation and administration of the Plan.
The Named Fiduciary is the Employer.
NONHIGHLY COMPENSATED EMPLOYEE means an Employee of the Employer who is neither
a Highly Compensated Employee nor a Family Member.
NONVESTED ACCOUNT means the part, if any, of a Participant's Account that is in
excess of his Vested Account.
NORMAL FORM means a single life annuity with installment refund.
NORMAL RETIREMENT AGE means the age at which the Participant's normal
retirement benefit becomes nonforfeitable. A Participant's Normal Retirement
Age is 65.
NORMAL RETIREMENT DATE means the earliest first day of the month on or after
the date the Participant reaches his Normal Retirement Age. Unless otherwise
provided in this Plan, a Participant's retirement benefits shall begin on a
Participant's Normal Retirement Date if he has ceased to be an Employee on such
date and has a Vested Account. Even if the Participant is an Employee on his
Normal Retirement Date, he may choose to have his retirement benefit begin on
such date. See the WHEN BENEFITS START SECTION of Article V.
PARENTAL ABSENCE means an Employee's absence from work which begins on or after
the first Yearly Date after December 31, 1984,
a) by reason of pregnancy of the Employee,
b) by reason of birth of a child of the Employee,
c) by reason of the placement of a child with the Employee in
connection with adoption of such child by such Employee, or
d) for purposes of caring for such child for a period beginning
immediately following such birth or placement.
PARTICIPANT means either an Active Participant or an Inactive Participant.
PERIOD OF MILITARY DUTY means, for an Employee
a) who served as a member of the armed forces of the United
States, and
13
<PAGE> 15
b) who was reemployed by the Employer at a time when the Employee
had a right to reemployment in accordance with seniority
rights as protected under Section 2021 through 2026 of Title
38 of the U.S. Code,
the period of time from the date the Employee was first absent from active work
for the Employer because of such military duty to the date the Employee was
reemployed.
PERIOD OF SERVICE means a period of time beginning on an Employee's Employment
Commencement Date or Reemployment Commencement Date (whichever applies) and
ending on his Severance from Service Date.
PERIOD OF SEVERANCE means a period of time beginning on an Employee's Severance
from Service Date and ending on the date he again performs an Hour-of-Service.
A one-year Period of Severance means a Period of Severance of 12 consecutive
months.
Solely for purposes of determining whether a one-year Period of Severance has
occurred for eligibility or vesting purposes, the 12-consecutive month period
beginning on the first anniversary of the first date of a Parental Absence
shall not be a one-year Period of Severance.
PLAN means the 401(k) retirement plan of the Employer set forth in this
document, including any later amendments to it.
PLAN ADMINISTRATOR means the person or persons who administer the Plan.
The Plan Administrator is the Employer.
PLAN YEAR means a period beginning on a Yearly Date and ending on the day
before the next Yearly Date.
PRIMARY EMPLOYER means OASIS RESIDENTIAL, INC..
QUALIFIED JOINT AND SURVIVOR FORM means, for a Participant who has a spouse, an
immediate survivorship life annuity with installment refund, where the
survivorship percentage is 50% and the Contingent Annuitant is the
Participant's spouse. A former spouse will be treated as the spouse to the
extent provided under a qualified domestic relations order as described in Code
Section 414(p). If a Participant does not have a spouse, the Qualified Joint
and Survivor Form means the Normal Form.
The amount of benefit payable under the Qualified Joint and Survivor Form shall
be the amount of benefit which may be provided by the Participant's Vested
Account.
QUALIFIED PRERETIREMENT SURVIVOR ANNUITY means a single life annuity with
installment refund payable to the surviving spouse of a Participant who dies
before his Annuity Starting Date. A former spouse will be treated as the
surviving spouse to the extent provided under a qualified domestic relations
order as described in Code Section 414(p).
QUARTERLY DATE means each Yearly Date and the third, sixth and ninth Monthly
Date after each Yearly Date which is within the same Plan Year.
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<PAGE> 16
REEMPLOYMENT COMMENCEMENT DATE means the date an Employee first performs an
Hour-of-Service following
a) an Eligibility Break in Service, for the hours method of
crediting service in this Plan, or
b) a Period of Severance, for the elapsed time method of
crediting service in this Plan.
REENTRY DATE means the date a former Active Participant reenters the Plan. See
the ACTIVE PARTICIPANT SECTION of Article II.
RETIREMENT DATE means the date a retirement benefit will begin and is a
Participant's Early, Normal or Late Retirement Date, as the case may be.
ROLLOVER CONTRIBUTIONS means the Rollover Contributions which are made by or
for a Participant according to the provisions of the ROLLOVER CONTRIBUTIONS
SECTION of Article III.
SEVERANCE FROM SERVICE DATE means the earlier of
a) the date on which an Employee quits, retires, dies or is
discharged, or
b) the first anniversary of the date an Employee begins a
one-year absence from service (with or without pay). This
absence may be the result of any combination of vacation,
holiday, sickness, disability, leave of absence or layoff.
Solely to determine whether a one-year Period of Severance has occurred for
eligibility or vesting purposes for an Employee who is absent from service
beyond the first anniversary of the first day of a Parental Absence, Severance
from Service Date is the second anniversary of the first day of the Parental
Absence. The period between the first and second anniversaries of the first
day of the Parental Absence is not a Period of Service and is not a Period of
Severance.
TEFRA means the Tax Equity and Fiscal Responsibility Act of 1982.
TEFRA COMPLIANCE DATE means the date a plan is to comply with the provisions of
TEFRA. The TEFRA Compliance Date as used in this Plan is,
a) for purposes of contribution limitations, Code Section 415,
1. if the plan was in effect on July 1, 1982, the first
day of the first limitation year which begins after
December 31, 1982, or
2. if the plan was not in effect on July 1, 1982, the
first day of the first limitation year which ends
after July 1, 1982.
b) for all other purposes, the first Yearly Date after December
31, 1983.
15
<PAGE> 17
TOTALLY AND PERMANENTLY DISABLED means that a Participant is disabled, as a
result of sickness or injury, to the extent that he is prevented from engaging
in any substantial gainful activity, and is eligible for and receives a
disability benefit under Title 11 of the Federal Social Security Act.
TRUST means an agreement of trust between the Primary Employer and Trustee
established for the purpose of holding and distributing the Trust Fund under
the provisions of the Plan. The Trust may provide for the investment of all or
any portion of the Trust Fund in the Group Contract.
TRUST FUND means the total funds held under the Trust for the purpose of
providing benefits for Participants. These funds result from Contributions
made under the Plan which are forwarded to the Trustee to be deposited in the
Trust Fund.
TRUSTEE means the trustee or trustees under the Trust. The term Trustee as it
is used in this Plan is deemed to include the plural unless the context clearly
indicates otherwise.
VESTED ACCOUNT means the vested part of a Participant's Account. The
Participant's Vested Account is determined as follows.
If the Participant's Vesting Percentage is 100%, his Vested Account equals his
Account.
If the Participant's Vesting Percentage is less than 100%, his Vested Account
equals the sum of (a) and (b) below:
a) The part of the Participant's Account that results from
Employer Contributions made before a prior Forfeiture Date and
all other Contributions which were 100% vested when made.
b) The balance of the Participant's Account in excess of the
amount in (a) above multiplied by his Vesting Percentage.
If the Participant has withdrawn any part of his Account resulting from
Employer Contributions, other than the vested Employer Contributions included
in (a) above, the amount determined under this subparagraph (b) shall be equal
to P(AB + D) - D as defined below:
P The Participant's Vesting Percentage.
AB The balance of the Participant's Account in excess of the
amount in (a) above.
D The amount of withdrawal resulting from Employer
Contributions, other than the vested Employer Contributions
included in (a) above.
The Participant's Vested Account is nonforfeitable.
VESTING PERCENTAGE means the percentage used to determine the nonforfeitable
portion of a Participant's Account attributable to Employer Contributions which
were not 100% vested when made.
A Participant's Vesting Percentage is shown in the following schedule opposite
the number of whole years of his Vesting Service.
16
<PAGE> 18
<TABLE>
<CAPTION>
VESTING SERVICE VESTING
(whole years) PERCENTAGE
<S> <C>
Less than 1 0
1 20
2 40
3 60
4 80
5 or more 100
</TABLE>
However, the Vesting Percentage for a Participant who is an Employee on or
after the earliest of (i) the date he reaches his Normal Retirement Age, (ii)
the date of his death, (iii) the date he meets the requirements) for an Early
Retirement Date, or (iv) the date he becomes Totally and Permanently Disabled,
shall be 100% on such date.
If the schedule used to determine a Participant's Vesting Percentage is
changed, the new schedule shall not apply to a Participant unless he is
credited with an Hour-of-Service on or after the date of the change and the
Participant's nonforfeitable percentage on the day before the date of the
change is not reduced under this Plan. The amendment provisions of the
AMENDMENT SECTION of Article IX regarding changes in the computation of the
Vesting Percentage shall apply.
VESTING SERVICE means an Employee's Period of Service. If he has more than one
Period of Service or if all or a part of a Period of Service is not counted,
his Vesting Service shall be determined by adjusting his Employment
Commencement Date so that he has one continuous period of Vesting Service equal
to the aggregate of all his countable Periods of Service. This period of
Vesting Service shall be expressed as whole years and fractional parts of a
year (to two decimal places) on the basis that 365 days equal one year.
However, Vesting Service is modified as follows:
Period of Military Duty included:
A Period of Military Duty shall be included as service with the
Employer to the extent it has not already been credited.
Period of Severance included (service spanning rule):
A Period of Severance shall be deemed to be a Period of Service under
either of the following conditions:
a) the Period of Severance immediately follows a period
during which an Employee is not absent from work and
ends within 12 months; or
b) the Period of Severance immediately follows a period
during which an Employee is absent from work for any
reason other than quitting, being discharged or
retiring (such as a leave of absence or layoff) and
ends within 12 months of the date he was first
absent.
17
<PAGE> 19
Controlled Group service included:
An Employee's service with a member firm of a Controlled Group while
both that firm and the Employer were members of the Controlled Group
shall be included as service with the Employer.
YEARLY DATE means January 1, 1995, and the same day of each following year.
YEARS OF SERVICE means an Employee's Vesting Service disregarding any
modifications which exclude service.
18
<PAGE> 20
ARTICLE II
PARTICIPATION
SECTION 2.01--ACTIVE PARTICIPANT.
a) An Employee shall first become an Active Participant (begin
active participation in the Plan) on the earliest Quarterly
Date on or after January 1, 1995, on which he is an Eligible
Employee and has met both of the eligibility requirements set
forth below. This date is his Entry Date.
1. He has completed one year of Eligibility Service
before his Entry Date.
2. He is age 21 or older.
If a person has been an Eligible Employee who has met all the
eligibility requirements above, but is not an Eligible
Employee on the date which would have been his Entry Date, he
shall become an Active Participant on the date he again
becomes an Eligible Employee. This date is his Entry Date.
b) An Inactive Participant shall again become an Active
Participant (resume active participation in the Plan) on the
date he again performs an Hour-of-Service as an Eligible
Employee. This date is his Reentry Date.
Upon again becoming an Active Participant, he shall cease to
be an Inactive Participant.
c) A former Participant shall again become an Active Participant
(resume active participation in the Plan) on the date he again
performs an Hour-of-Service as an Eligible Employee. This
date is his Reentry Date.
There shall be no duplication of benefits for a Participant under this
Plan because of more than one period as an Active Participant.
SECTION 2.02--INACTIVE PARTICIPANT.
An Active Participant shall become an Inactive Participant (stop
accruing benefits under the Plan) on the earlier of the following:
a) The date on which he ceases to be an Eligible Employee (on his
Retirement Date if the date he ceases to be an Eligible
Employee occurs within one month of his Retirement Date).
b) The effective date of complete termination of the Plan.
SECTION 2.03--CESSATION OF PARTICIPATION.
A Participant shall cease to be a Participant on the date he is no
longer an Eligible Employee and his Account is zero.
19
<PAGE> 21
ARTICLE III
CONTRIBUTIONS
SECTION 3.01--EMPLOYER CONTRIBUTIONS.
Employer Contributions are conditioned on initial qualification of the
Plan. If the Plan is denied initial qualification, the provisions of the
QUALIFICATION OF PLAN SECTION of Article IX shall apply.
Employer Contributions for Plan Years which end on or after January 1,
1995, may be made without regard to current or accumulated net income,
earnings, or profits of the Employer. Notwithstanding the foregoing, the Plan
shall continue to be designed to qualify as a profit sharing plan for purposes
of Code Sections 401(a), 402, 412, and 417. Such Contributions will be equal
to the Employer Contributions as described below:
a) The amount of each Elective Deferral Contribution for a
Participant shall be equal to any percentage (not more than
15%) of his Compensation as elected in his elective deferral
agreement. An Employee who is eligible to participate in the
Plan may file an elective deferral agreement with the
Employer. The elective deferral agreement to start Elective
Deferral Contributions may be effective on a Participant's
Entry Date (Reentry Date, if applicable) or any following
Monthly Date. The Participant shall make any change or
terminate the elective deferral agreement by filing a new
elective deferral agreement. A Participant's elective
deferral agreement making a change may be effective on any
date an elective deferral agreement to start Elective Deferral
Contributions could be effective. A Participant's elective
deferral agreement to stop Elective Deferral Contributions may
be effective on any date. The elective deferral agreement
must be in writing and completed before the beginning of the
pay period in which Elective Deferral Contributions are to
start, change or stop.
Elective Deferral Contributions are fully (100%) vested and
nonforfeitable.
b) The amount of each Matching Contribution for a Participant
shall be equal to 50% of the Elective Deferral Contributions
made for him, disregarding any Elective Deferral Contributions
in excess of 6% of his Compensation.
Matching Contributions are subject to the Vesting Percentage.
c) The amount of each Discretionary Contribution shall be
determined by the Employer.
Discretionary Contributions are subject to the Vesting
Percentage.
No Participant shall be permitted to have Elective Deferral
Contributions, as defined in the EXCESS AMOUNTS SECTION of Article III, made
under this Plan, or any other qualified plan maintained by the Employer, during
any taxable year, in excess of the dollar limitation contained in Code Section
402(g) in effect at the beginning of such taxable year.
20
<PAGE> 22
In any Plan Year, the Employer may make all or a part of the following
Contributions for such Plan Year in advance of the last day of the Plan Year:
Discretionary Contributions
Such Contributions shall be allocated when made in a manner which approximates
the allocation which would otherwise have been made as of the last day of the
Plan Year. Succeeding allocations shall take into account amounts previously
allocated for the Plan Year. The percentage of the Employer Contribution
allocated to the Participant for the Plan Year shall be the same percentage
which would have been allocated to him if the entire allocation had been made
as of the last day of the Plan Year. Excess allocations shall be forfeited and
reallocated as necessary to provide the percentage applicable to each
Participant.
The Employer shall pay to the Trustee its Contributions used to
determine the Actual Deferral Percentage, as defined in the EXCESS AMOUNTS
SECTION of Article III, to the Plan for each Plan Year not later than the end
of the twelve-month period immediately following the Plan Year for which they
are deemed to be paid. Any such Contributions accumulated through payroll
deductions shall be paid within 90 days of the date withheld or the date it is
first reasonably practical for the Employer to do so, if earlier.
A portion of the Plan assets resulting from Employer Contributions
(but not more than the original amount of those Contributions) may be returned
if the Employer Contributions are made because of a mistake of fact or are more
than the amount deductible under Code Section 404 (excluding any amount which
is not deductible because the Plan is disqualified). The amount involved must
be returned to the Employer within one year after the date the Employer
Contributions are made by mistake of fact or the date the deduction is
disallowed, whichever applies. Except as provided under this paragraph and
Articles VII and IX, the assets of the Plan shall never be used for the benefit
of the Employer and are held for the exclusive purpose of providing benefits to
Participants and their Beneficiaries and for defraying reasonable expenses of
administering the Plan.
SECTION 3.01A--ROLLOVER CONTRIBUTIONS.
A Rollover Contribution may be made by or for an Eligible Employee if
the following conditions are met:
a) The Contribution is a rollover contribution which the Code
permits to be transferred to a plan that meets the
requirements of Code Section 401(a).
b) If the Contribution is made by the Eligible Employee, it is
made within sixty days after he receives the distribution.
c) The Eligible Employee furnishes evidence satisfactory to the
Plan Administrator that the proposed transfer is in fact a
rollover contribution that meets conditions (a) and (b) above.
The Rollover Contribution may be made by the Eligible Employee or the
Eligible Employee may direct the trustee or named fiduciary of another plan to
transfer the funds which would otherwise be a Rollover Contribution directly to
this Plan. Such transferred funds shall be called a Rollover Contribution.
The Contribution shall be made according to procedures set up by the Plan
Administrator.
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If the Eligible Employee is not an Active Participant at the time the
Rollover Contribution is made, he shall be deemed to be a Participant only for
the purposes of investment and distribution of the Rollover Contribution. He
shall not share in the allocation of Employer Contributions or Forfeitures
until the time he meets all the requirements to become an Active Participant.
Rollover Contributions made by or for an Eligible Employee shall be
credited to his Account. The part of the Participant's Account resulting from
Rollover Contributions is fully (100%) vested and nonforfeitable at all times.
A separate accounting record shall be maintained for that part of his Rollover
Contribution which consists of voluntary contributions that were deducted from
the Participant's gross income for Federal income tax purposes.
SECTION 3.02--FORFEITURES.
The Nonvested Account of a Participant shall be forfeited as of the
earlier of the following: the date of the Participant's death, if prior to such
date he had ceased to be an Employee; or his Forfeiture Date. All or a part of
a Participant's Nonvested Account will be forfeited if, after he ceases to be
an Employee, he receives a distribution of his entire Vested Account or a
distribution of his Vested Account derived from Employer Contributions which
were not 100% vested when made according to the provisions of the VESTED
BENEFITS SECTION of Article V or the SMALL AMOUNTS SECTION of Article IX. If a
Participant's Vested Account is zero on the date he ceases to be an Employee,
he shall be deemed to have received a distribution of his entire Vested Account
on such date. The forfeiture will occur as of the date he receives the
distribution or on the date such provision became effective, if later. If he
receives a distribution of his entire Vested Account, his entire Nonvested
Account will be forfeited. If he receives a distribution of his Vested Account
from Employer Contributions which were not 100% vested when made, but less than
his entire Vested Account, the amount to be forfeited will be determined by
multiplying his Nonvested Account by a fraction. The numerator of the fraction
is the amount of the distribution derived from Employer Contributions which
were not 100% vested when made and the denominator of the fraction is his
entire Vested Account derived from such Employer Contributions on the date of
distribution.
A Forfeiture shall also occur as described in the EXCESS AMOUNTS
SECTION of Article III.
Forfeitures may first be applied to pay administrative expenses under
the Plan which would otherwise be paid by the Employer.
Forfeitures not used to pay administrative expenses shall be allocated
as described in the ALLOCATION SECTION of Article III as of the last day of the
Plan Year in which they arise. Upon such allocation, Forfeitures shall be
deemed to be Discretionary Contributions.
Forfeitures of Matching Contributions which relate to excess amounts
shall be applied as provided in the EXCESS AMOUNTS SECTION of Article III.
If a Participant again becomes an Eligible Employee after receiving a
distribution which caused his Nonvested Account to be forfeited, he shall have
the right to repay to the Plan the entire amount of the distribution he
received (excluding any amount of such distribution resulting from
Contributions which were 100% vested when made). The repayment must be made
before the earlier of the date five years after the date he again becomes an
Eligible Employee or the end of the first period of five consecutive one-year
Periods of Severance which begin after the date of the distribution.
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<PAGE> 24
If the Participant makes the repayment provided above, the Plan
Administrator shall restore to his Account an amount equal to his Nonvested
Account which was forfeited on the date of distribution, unadjusted for any
investment gains or losses. If the amount of the repayment is zero dollars
because the Participant was deemed to have received a distribution or the plan
did not have repayment provisions in effect on the date the distribution was
made and he again performs an Hour-of-Service as an Eligible Employee within
the repayment period, the Plan Administrator shall restore the Participant's
Account as if he had made a required repayment on the date he performed such
Hour-of- Service. Restoration of the Participant's Account shall include
restoration of all Code Section 411(d)(6) protected benefits with respect to
that restored Account, according to applicable Treasury regulations. Provided,
however, the Plan Administrator shall not restore the Nonvested Account if a
Forfeiture Date has occurred after the date of the distribution and on or
before the date of repayment and that Forfeiture Date would result in a
complete forfeiture of the amount the Plan Administrator would otherwise
restore.
The Plan Administrator shall restore the Participant's Account by the
close of the Plan Year following the Plan Year in which repayment is made.
Permissible sources for restoration are Forfeitures or Employer Contributions.
The Employer shall contribute, without regard to any requirement or condition
of the EMPLOYER CONTRIBUTIONS SECTION of Article III, such additional amount
needed to make the required restoration. The repaid and restored amounts are
not included in the Participant's Annual Addition, as defined in the
CONTRIBUTION LIMITATION SECTION of Article III.
SECTION 3.03--ALLOCATION.
The following Contributions for the Plan Year, plus any Forfeitures
released for allocation for the Plan Year, shall be allocated among all
eligible persons:
Discretionary Contributions
The eligible persons are all Participants who are Active Participants on the
last day of the Plan Year. The amount allocated to such a person shall be
determined below and under Article X.
The following Contributions for each Plan Year shall be allocated to
each Participant for whom such Contributions were made under the EMPLOYER
CONTRIBUTIONS SECTION of Article III:
Elective Deferral Contributions
Matching Contributions
These Contributions shall be allocated when made and credited to the
Participant's Account.
Discretionary Contributions plus any Forfeitures are allocated as of
the last day of each Plan Year. The amount allocated to each eligible person
for the Plan Year shall be equal to the Discretionary Contributions plus any
Forfeitures for the Plan Year, multiplied by the ratio of (a) his Annual
Compensation as of the last day of the Plan Year to (b) the total of such
compensation for all eligible persons. This amount is credited to his Account.
In determining the amount of Employer Contributions to be allocated to
a Participant who is a Leased Employee, contributions and benefits provided by
the leasing organization which are attributable to services such Leased
Employee performs for the Employer shall be treated as provided by the Employer
and there shall be no duplication of those contributions or benefits under this
Plan.
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<PAGE> 25
SECTION 3.04--CONTRIBUTION LIMITATION.
a) For the purpose of determining the contribution limitation set
forth in this section, the following terms are defined:
Aggregate Annual Addition means, for a Participant with
respect to any Limitation Year, the sum of his Annual
Additions under all defined contribution plans of the
Employer, as defined in this section, for such Limitation
Year. The nondeductible participant contributions which the
Participant makes to a defined benefit plan shall be treated
as Annual Additions to a defined contribution plan. The
Contributions the Employer, as defined in this section, made
for the Participant for a Plan Year beginning on or after
March 31, 1984, to an individual medical benefit account, as
defined in Code Section 415(I)(2), under a pension or annuity
plan of the Employer, as defined in this section, shall be
treated as Annual Additions to a defined contribution plan.
Also, amounts derived from contributions paid or accrued after
December 31, 1985, in Fiscal Years ending after such date,
which are attributable to post-retirement medical benefits
allocated to the separate account of a key employee, as
defined in Code Section 419A(d)(3), under a welfare benefit
fund, as defined in Code Section 419(e), maintained by the
Employer, as defined in this section, are treated as Annual
Additions to a defined contribution plan. The 25% of
Compensation limit under Maximum Permissible Amount does not
apply to Annual Additions resulting from contributions made to
an individual medical account, as defined in Code Section
415(I)(2), or to Annual Additions resulting from contributions
for medical benefits, within the meaning of Code Section 419A,
after separation from service.
Annual Addition means the amount added to a Participant's
account for any Limitation Year which may not exceed the
Maximum Permissible Amount. The Annual Addition under any
plan for a Participant with respect to any Limitation Year,
shall be equal to the sum of (1) and (2) below:
1. Employer contributions and forfeitures credited to
his account for the Limitation Year.
2. Participant contributions made by him for the
Limitation Year.
Before the first Limitation Year beginning after December 31,
1986, the amount under (2) above is the lesser of (i) 1/2 of
his nondeductible participant contributions made for the
Limitation Year, or (ii) the amount, if any, of his
nondeductible participant contributions made for the
Limitation Year which is in excess of six percent of his
Compensation, as defined in this section, for such Limitation
Year.
Compensation means all wages for Federal income tax
withholding purposes, as defined under Code Section 3401(a)
(for purposes of income tax withholding at the source),
disregarding any rules limiting the remuneration included as
wages based on the nature or location of the employment or the
services performed. Compensation also includes all other
payments to an Employee in the course of the Employer's trade
or business, for which the Employer must furnish the Employee
a written statement under Code Sections 6041(d) and
6051(a)(3). The amount reported in the "Wages, Tips and Other
Compensation" box on Form W-2 satisfies this definition.
For any self-employed individual Compensation will mean earned
income.
For purposes of applying the limitations of this section,
Compensation for a Limitation Year is the Compensation
actually paid or made available during such Limitation Year.
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<PAGE> 26
Defined Benefit Plan Fraction means, with respect to a Limitation Year
for a Participant who is or has been a participant in a defined
benefit plan ever maintained by the Employer, as defined in this
section, the quotient, expressed as a decimal, of
1. the Participant's Projected Annual Benefit under all such
plans as of the close of such Limitation Year, divided by
2. on and after the TEFRA Compliance Date, the lesser of (i) or
(ii) below:
i. 1.25 multiplied by the maximum dollar limitation
which applies to defined benefit plans determined for
the Limitation Year under Code Sections 415(b) or (d)
or
ii. 1.4 multiplied by the Participant's highest average
compensation as defined in the defined benefit
plan(s),
including any adjustments under Code Section 415(b).
Before the TEFRA Compliance Date, this denominator is the
Participant's Projected Annual Benefit as of the close of the
Limitation Year if the plan(s) provided the maximum benefit
allowable.
The Defined Benefit Plan Fraction shall be modified as follows:
If the Participant was a participant as of the first day of the first
Limitation Year beginning after December 31,1986, in one or more
defined benefit plans maintained by the Employer, as defined in this
section, which were in existence on May 6, 1986, the denominator of
this fraction will not be less than 125 percent of the sum of the
annual benefits under such plans which the Participant had accrued as
of the close of the last Limitation Year beginning before January 1,
1987, disregarding any changes in the terms and conditions of the plan
after May 5, 1986. The preceding sentence applies only if the defined
benefit plans individually and in the aggregate satisfied the
requirements of Code Section 415 for all Limitation Years beginning
before January 1, 1987.
Defined Contribution Plan Fraction means, for a Participant with
respect to a Limitation Year, the quotient, expressed as a decimal, of
1. the Participant's Aggregate Annual Additions for such
Limitation Year and all prior Limitation Years, under all
defined contribution plans (including the Aggregate Annual
Additions attributable to nondeductible accounts under defined
benefit plans and attributable to all welfare benefit funds,
as defined in Code Section 419(e) and attributable to
individual medical accounts, as defined in Code Section 415
(1) (2)) ever maintained by the Employer, as defined in this
section, divided by
2. on and after the TEFRA Compliance Date, the sum of the amount
determined for the Limitation Year under (i) or (ii) below,
whichever is less, and the amounts determined in the same
manner for all prior Limitation Years during which he has been
an Employee or an employee of a predecessor employer:
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<PAGE> 27
i. 1.25 multiplied by the maximum permissible dollar
amount for each such Limitation Year, or
ii. 1.4 multiplied by the maximum permissible percentage
of the Participant's Compensation, as defined in this
section, for each such Limitation Year.
Before the TEFRA Compliance Date. this denominator is the sum
of the maximum allowable amount of Annual Addition to his
account(s) under all the plan(s) of the Employer, as defined
in this section, for each such Limitation Year.
The Defined Contribution Plan Fraction shall be modified as follows:
If the Participant was a participant as of the first day of the first
Limitation Year beginning after December 31, 1986, in one or more
defined contribution plans maintained by the Employer, as defined in
this section, which were in existence on May 6, 1986, the numerator of
this fraction shall be adjusted if the sum of the Defined Contribution
Plan Fraction and Defined Benefit Plan Fraction would otherwise exceed
1.0 under the terms of this Plan. Under the adjustment, the dollar
amount determined below shall be permanently subtracted from the
numerator of this fraction. The dollar amount is equal to the excess
of the sum of the two fractions, before adjustment, over 1.0
multiplied by the denominator of his Defined Contribution Plan
Fraction. The adjustment is calculated using his Defined Contribution
Plan Fraction and Defined Benefit Plan Fraction as they would be
computed as of the end of the last Limitation Year beginning before
January 1, 1987, and disregarding any changes in the terms and
conditions of the plan made after May 5, 1986, but using the Code
Section 415 limitations applicable to the first Limitation Year
beginning on or after January 1, 1987.
The Annual Addition for any Limitation Year beginning before January
1, 1987, shall not be recomputed to treat all employee contributions
as Annual Additions.
For a plan that was in existence on July 1, 1982, for purposes of
determining the Defined Contribution Plan Fraction for any Limitation
Year ending after December 31, 1982, the Plan Administrator may elect,
in accordance with the provisions of Code Section 415, that the
denominator for mach Participant for all Limitation Years ending
before January 1, 1983, will be equal to
1. the Defined Contribution Plan Fraction denominator which would
apply for the last Limitation Year ending in 1982 if an
election under this paragraph were not made, multiplied by
2. a fraction, equal to (i) over (ii) below:
i. the lesser of (A) $51,875, or (B) 1.4, multiplied by
25% of the Participant's Compensation, as defined in
this section, for the Limitation Year ending in 1981;
ii. the lesser of (A) $41,500, or (B) 25% of the
Participant's Compensation, as defined in this
section, for the Limitation Year ending in 1981.
The election described above is applicable only if the plan
administrators under all defined contribution plans of the Employer,
as defined in this section, also elect to use the modified fraction.
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Employer means any employer that adopts this Plan and all Controlled
Group members and any other entity required to be aggregated with the
employer pursuant to regulations under Code Section 414(o).
Limitation Year means the 12-consecutive month period within which it
is determined whether or not the limitations of Code Section 415 are
exceeded. Limitation Year means each 12-consecutive month period
ending on December 31. If the Limitation Year is other than the
calendar year, execution of this Plan (or any amendment to this Plan
changing the Limitation Year) constitutes the Employer's adoption of a
written resolution electing the Limitation Year. If the Limitation
Year is changed, the new Limitation Year shall begin within the
current Limitation Year, creating a short Limitation Year.
Maximum Permissible Amount means, for a Participant with respect to
any Limitation Year, the lesser of (1) or (2) below:
1. The greater of $30,000 or one-fourth of the maximum dollar
limitation which applies to defined benefit plans set forth in
Code Section 415(b)(1) as in effect for the Limitation Year.
(Before the TEFRA Compliance Date, $25,000 multiplied by the
cost on living adjustment factor permitted by Federal
regulations.)
2. 25% of his Compensation, as defined in this section, for such
Limitation Year.
The compensation limitation referred to in (2) shall not apply to any
contribution for medical benefits (within the meaning of Code Section
401(h) or Code Section 419A(f)(2)) which is otherwise treated as an
annual addition under Code Section 415(i)(1) or Code Section
419A(d)(2).
If there is a short Limitation Year because of a change in Limitation
Year, the Maximum Permissible Amount will not exceed the maximum
dollar limitation which would otherwise apply multiplied by the
following fraction:
Number of months in the short Limitation Year
---------------------------------------------
12
Projected Annual Benefit means a Participant's expected annual benefit
under all defined benefit plan(s) ever maintained by the Employer, as
defined in this section. The Projected Annual Benefit shall be
determined assuming that the Participant will continue employment
until the later of current age or normal retirement age under such
plan(s), and that the Participant's compensation for the current
Limitation Year and all other relevant factors used to determine
benefits under such plan(s) will remain constant for all future
Limitation Years. Such expected annual benefit shall be adjusted to
the actuarial equivalent of a straight life annuity if expressed in a
form other than a straight life or qualified joint and survivor
annuity.
b) The Annual Addition under this Plan for a Participant during a
Limitation Year shall not be more than the Maximum Permissible
Amount.
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c) Contributions and Forfeitures which would otherwise be
credited to the Participant's Account shall be limited or
reallocated to the extent necessary to meet the restrictions
of subparagraph (b) above for any Limitation Year in the
following order. Forfeitures shall be reallocated in the same
manner as described in the ALLOCATION SECTION of Article III
to the. remaining Participants to whom the limitations do not
apply for the Limitation Year. Discretionary Contributions
shall be reallocated in the same manner as described in the
ALLOCATION SECTION of Article III to the remaining
Participants to whom the limitations do not apply for the
Limitation Year. The Discretionary Contributions shall be
limited if there are no such remaining Participants. Elective
Deferral Contributions that are not the basis for Matching
Contributions shall be limited. Matching Contributions shall
be limited to the extent necessary to limit the Participant's
Annual Addition under this Plan to his maximum amount. If
Matching Contributions are limited because of this limit,
Elective Deferral Contributions that are the basis for
Matching Contributions shall be reduced in proportion.
If, due to (i) an error in estimating a Participant's
Compensation as defined in this section, (ii) because
Forfeitures cannot be reallocated to remaining Participants
due to the limits of this section, (iii) as a result of a
reasonable error in determining the amount of elective
deferrals (within the meaning of Code Section 402(g)(3)) that
may be made with respect to any individual under the limits of
Code Section 415, or (iv) other limited facts and
circumstances, a Participant's Annual Addition is greater than
the amount permitted in (b) above, such excess amount shall be
applied as follows. Elective Deferral Contributions will be
returned to the Participant. Matching Contributions based on
Elective Deferral Contributions which are returned shall be
forfeited. If after the return of Elective Deferral
Contributions, an excess amount still exists, and the
Participant is an Active Participant as of the end of the
Limitation Year, the excess amount shall be used to offset
Employer Contributions for him in the next Limitation Year.
If after the return of Elective Deferral Contributions, an
excess amount still exists, and the Participant is not an
Active Participant as of the end of the Limitation Year, the
excess amount will be held in a suspense account which will be
used to offset Employer Contributions for all Participants in
the next Limitation Year. No Employer Contributions that
would be included in the next Limitation Year's Annual
Addition may be made before the total suspense account has
been used.
d) A Participant's Aggregate Annual Addition for a Limitation
Year shall not exceed the Maximum Permissible Amount.
If, for the Limitation Year, the Participant has an Annual
Addition under more than one defined contribution plan or a
welfare benefit fund, as defined in Code Section 419(e), or an
individual medical account, as defined in Code Section
415(i)(2), maintained by the Employer, as defined in this
section. and such plans and welfare benefit funds and
individual medical accounts do not otherwise limit the
Aggregate Annual Addition to the Maximum Permissible Amount,
any reduction necessary shall be made first to the profit
sharing plans, then to all other such plans and welfare
benefit funds and individual medical accounts and, if
necessary, by reducing first those that were most recently
allocated. Welfare benefit funds and individual medical
accounts shall be deemed to be allocated first. However,
elective deferral contributions shall be the last
contributions reduced before the welfare benefit fund or
individual medical account is reduced.
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<PAGE> 30
If some of the Employer's defined contribution plans were not
in existence on July 1, 1982, and some were in existence on
that date, the Maximum Permissible Amount which is based on a
dollar amount may differ for a Limitation Year. The Aggregate
Annual Addition for the Limitation Year in which the dollar
limit differs shall not exceed the lesser of (1) 25% of
Compensation as defined in this section, (2) $45,475, or (3)
the greater of $30,000 or the sum of the Annual Additions for
such Limitation Year under all the plan(s) to which the
$45,475 amount applies.
e) If a Participant is or has been a participant in both defined
benefit and defined contribution plans (including a welfare
benefit fund or individual medical account) ever maintained by
the Employer, as defined in this section, the sum of the
Defined Benefit Plan Fraction and the Defined Contribution
Plan Fraction for any Limitation Year shall not exceed 1.0
(1.4 before the TEFRA Compliance Date).
After all other limitations set out in the plans and funds
have been applied, the following limitations shall apply so
that the sum of the Participant's Defined Benefit Plan
Fraction and Defined Contribution Plan Fraction shall not
exceed 1.0 (1.4 before the TEFRA Compliance Date). The
Projected Annual Benefit shall be limited first. If the
Participant's annual benefit(s) equal his Projected Annual
Benefit, as limited, then Annual Additions to the defined
contribution plan(s) shall be limited to the extent needed to
reduce the sum to 1.0 (1.4). First, the voluntary
contributions the Participant may make for the Limitation Year
shall be limited. Next, in the case of a profit sharing plan,
any forfeitures allocated to the Participant shall be
reallocated to remaining participants to the extent necessary
to reduce the decimal to 1.0 (1.4). Last, to the extent
necessary, employer contributions for the Limitation Year
shall be reallocated or limited, and any required and optional
employee contributions to which such employer contributions
were geared shall be reduced in proportion.
If, for the Limitation Year, the Participant has an Annual
Addition under more than one defined contribution plan or
welfare benefit fund or individual medical account maintained
by the Employer, as defined in this section, any deduction
above shall be made first to the profit sharing plans, then to
all other such plans and welfare benefit plans and individual
medical accounts and, if necessary, by reducing first those
that were most recently allocated. However, elective deferral
contributions shall be the last contributions reduced before
the welfare benefit fund or individual medical account is
reduced. The annual addition to the welfare benefit fund and
individual medical account shall be limited last.
SECTION 3.05--EXCESS AMOUNTS.
a) For the purposes of this section, the following terms are
defined:
Actual Deferral Percentage means the ratio (expressed as a
percentage) of Elective Deferral Contributions under this Plan
on behalf of the Eligible Participant for the Plan Year to the
Eligible Participant's Compensation for the Plan Year. The
Elective Deferral Contributions used to determine the Actual
Deferral Percentage shall include Excess Elective Deferrals
(other than Excess Elective Deferrals of Nonhighly Compensated
Employees that arise solely from Elective Deferral
Contributions made under this Plan or any other plans of the
Employer or a Controlled Group Member), but shall exclude
Elective Deferral Contributions that are used in computing the
Contribution Percentage (provided the Average Actual Deferral
Percentage test is satisfied both with and without exclusion
of these Elective Deferral Contributions). Under such rules
as the Secretary of the Treasury shall prescribe in Code
Section 401(k)(3)(D), the Employer may elect to include
Qualified Nonelective Contributions and Qualified Matching
Contributions under this Plan in
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<PAGE> 31
computing the Actual Deferral Percentage. For an Eligible
Participant for whom such Contributions on his behalf for the
Plan Year are zero, the percentage is zero.
Aggregate Limit means the greater of (1) or (2) below:
1. The sum of
i. 125 percent of the greater of the Average Actual
Deferral Percentage of the Nonhighly Compensated
Employees for the Plan Year or the Average
Contribution Percentage of Nonhighly Compensated
Employees under the Plan subject to Code Section
401(m) for the Plan Year beginning with or within the
Plan Year of the cash or deferred arrangement and
ii. the lesser of 200% or two plus the lesser of such
Average Actual Deferral Percentage or Average
Contribution Percentage.
2. The sum of
i. 125 percent of the lesser of the Average Actual
Deferral Percentage of the Nonhighly Compensated
Employees for the Plan Year or the Average
Contribution Percentage of Nonhighly Compensated
Employees under the Plan subject to Code Section
401(m) for the Plan Year beginning with or within the
Plan Year of the cash or deferred arrangement and
ii. the lesser of 200% or two plus the greater of such
Average Actual Deferral Percentage or Average
Contribution Percentage.
Average Actual Deferral Percentage means the average (expressed as a
percentage) of the Actual Deferral Percentages of the Eligible
Participants in a group.
Average Contribution Percentage means the average (expressed as a
percentage) of the Contribution Percentages of the Eligible
Participants in a group.
Contribution Percentage means the ratio (expressed as a percentage) of
the Eligible Participant's Contribution Percentage Amounts to the
Eligible Participant's Compensation for the Plan Year. For an
Eligible Participant for whom such Contribution Percentage Amounts for
the Plan Year are zero, the percentage is zero.
Contribution Percentage Amounts means the sum of the Participant
Contributions and Matching Contributions (that are not Qualified
Matching Contributions) under this Plan on behalf of the Eligible
Participant for the Plan Year. Such Contribution Percentage Amounts
shall not include Matching Contributions that are forfeited either to
correct Excess Aggregate Contributions or because the Contributions to
which they relate are Excess Elective Deferrals, Excess Contributions
or Excess Aggregate Contributions. Under such rules as the Secretary
of the Treasury shall prescribe in Code Section 401(k)(3)(D), the
Employer may elect to include Qualified Nonelective Contributions and
Qualified Matching Contributions under this Plan which were not used
in computing the Actual Deferral Percentage in computing the
Contribution Percentage. The Employer may also elect to use Elective
Deferral Contributions in computing the Contribution Percentage so
long as the Average Actual Deferral Percentage test is met before the
Elective Deferral Contributions are used in the Average Contribution
Percentage test and continues to be met following the exclusion of
those
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<PAGE> 32
Elective Deferral Contributions that are used to meet the Average
Contribution Percentage test.
Elective Deferral Contributions means employer contributions made on
behalf of a participant pursuant to an election to defer under any
qualified cash or deferred arrangement as described in Code Section
401(k), any simplified employee pension cash or deferred arrangement
as described in Code Section 402(h)(1)(B), any eligible deferred
compensation plan under Code Section 457, any plan as described under
Code Section 501(c)(18), and any employer contributions made on behalf
of a participant for the purchase of an annuity contract under Code
Section 403(b) pursuant to a salary reduction agreement. Elective
Deferral Contributions shall not include any deferrals properly
distributed as excess Annual Additions.
Eligible Participant means, for purposes of determining the Actual
Deferral Percentage, any Employee who is otherwise authorized under
the terms of the Plan to have Elective Deferral Contributions made on
his behalf for the Plan Year. Eligible Participant means, for
purposes of determining the Average Contribution Percentage, any
Employee who is otherwise authorized under the terms of the Plan to
have Participant Contributions or Matching Contributions made on his
behalf for the Plan Year.
Excess Aggregate Contributions means, with respect to any Plan Year,
the excess of:
1. The aggregate Contributions taken into account in computing
the numerator of the Contribution Percentage actually made on
behalf of Highly Compensated Employees for such Plan Year,
over
2. The maximum amount of such Contributions permitted by the
Average Contribution Percentage test (determined by reducing
Contributions made on behalf of Highly Compensated Employees
in order of their Contribution Percentages beginning with the
highest of such percentages).
Such determination shall be made after first determining Excess
Elective Deferrals and then determining Excess Contributions.
Excess Contributions means, with respect to any Plan Year, the excess
of:
1. The aggregate amount of Contributions actually taken into
account in computing the Actual Deferral Percentage of Highly
Compensated Employees for such Plan Year, over
2. The maximum amount of such Contributions permitted by the
Actual Deferral Percentage test (determined by reducing
Contributions made on behalf of Highly Compensated Employees
in order of the Actual Deferral Percentages, beginning with
the highest of such percentages).
A Participant's Excess Contributions for a Plan Year will be reduced
by the amount of Excess Elective Deferrals, if any, previously
distributed to the Participant for the taxable year ending in that
Plan Year.
Excess Elective Deferrals means those Elective Deferral Contributions
that are includable in a Participant's gross income under Code Section
402(g) to the extent such Participant's Elective Deferral
Contributions for a taxable year exceed the dollar limitation under
such Code section. Excess Elective Deferrals shall be treated as
Annual Additions. as defined in the CONTRIBUTION LIMITATION SECTION of
Article III, under the Plan, unless such amounts are distributed no
later than
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the first April 15 following the close of the Participant's taxable
year.
Participant Contributions means contributions made to any plan by or
on behalf of a participant that are included in the participant's
gross income in the year in which made and that are maintained under a
separate account to which earnings and losses are allocated.
Matching Contributions means employer contributions made to this or
any other defined contribution plan, or to a contract described in
Code Section 403(b), on behalf of a participant on account of a
Participant Contribution made by such participant, or on account of a
participant's Elective Deferral Contributions, under a plan maintained
by the employer.
Qualified Matching Contributions means Matching Contributions which
are subject to the distribution and nonforfeitability requirements
under Code Section 401(k) when made.
Qualified Nonelective Contributions means any employer contributions
(other than Matching Contributions) which an employee may not elect to
have paid to him in cash instead of being contributed to the plan and
which are subject to the distribution and nonforfeitability
requirements under Code Section 401(k).
b) A Participant may assign to this Plan any Excess Elective Deferrals
made during a taxable year by notifying the Plan Administrator in
writing on or before the first following March 1 of the amount of the
Excess Elective Deferrals to be assigned to the Plan. A Participant
is deemed to notify the Plan Administrator of any Excess Elective
Deferrals that arise by taking into account only those Elective
Deferral Contributions made to this Plan and any other plans of the
Employer or a Controlled Group member and reducing such Excess
Elective Deferrals by the amount of Excess Contributions, if any,
previously distributed for the Plan Year beginning in that taxable
year. The Participant's claim for Excess Elective Deferrals shall be
accompanied by the Participant's written statement that if such
amounts are not distributed, such Excess Elective Deferrals, when
added to amounts deferred under other plans or arrangements described
in Code Sections 401(k), 408(k) or 403(b), will exceed the limit
imposed on the Participant by Code Section 402(g) for the year in
which the deferral occurred. The Excess Elective Deferrals assigned
to this Plan can not exceed the Elective Deferral Contributions
allocated under this Plan for such taxable year.
Notwithstanding any other provisions of the Plan, Elective Deferral
Contributions in an amount equal to the Excess Elective Deferrals
assigned to this Plan, plus any income and minus any loss allocable
thereto, shall be distributed no later than April 15 to any
Participant to whose Account Excess Elective Deferrals were assigned
for the preceding year and who claims Excess Elective Deferrals for
such taxable year.
The income or loss allocable to such Excess Elective Deferrals shall
be equal to the income or loss allocable to the Participant's Elective
Deferral Contributions for the taxable year in which the excess
occurred multiplied by a fraction. The numerator of the fraction is
the Excess Elective Deferrals. The denominator of the fraction is the
closing balance without regard to any income or loss occurring during
such taxable year (as of the end of such taxable year) of the
Participant's Account resulting from Elective Deferral Contributions.
Any Matching Contributions which were based on the Elective Deferral
Contributions which are distributed as Excess Elective Deferrals, plus
any income and minus any loss allocable thereto, shall be forfeited.
These Forfeitures shall be used to offset the earliest Employer
Contribution due after the Forfeiture arises.
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c) As of the end of each Plan Year after Excess Elective Deferrals have
been determined, one of the following tests must be met:
1. The Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan
Year is not more than the Average Actual Deferral Percentage
for Eligible Participants who are Nonhighly Compensated
Employees for the Plan Year multiplied by 1.25.
2. The Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan
Year is not more than the Average Actual Deferral Percentage
for Eligible Participants who are Nonhighly Compensated
Employees for the Plan Year multiplied by 2 and the difference
between the Average Actual Deferral Percentages is not more
than 2.
The Actual Deferral Percentage for any Eligible Participant who is a
Highly Compensated Employee for the Plan Year and who is eligible to
have Elective Deferral Contributions (and Qualified Nonelective
Contributions or Qualified Matching Contributions. or both, if used in
computing the Actual Deferral Percentage) allocated to his account
under two or more plans or arrangements described in Code Section
401(k) that are maintained by the Employer or a Controlled Group
member shall be determined as if all such Elective Deferral
Contributions (and, if applicable, such Qualified Nonelective
Contributions or Qualified Matching Contributions, or both) were made
under a single arrangement. If a Highly Compensated Employee
participates in two or more cash or deferred arrangements that have
different Plan Years, all cash or deferred arrangements ending with or
within the same calendar year shall be treated as a single
arrangement. Notwithstanding the foregoing, certain plans shall be
treated as separate if mandatorily disaggregated under the regulations
under Code Section 401(k).
In the event that this Plan satisfies the requirements of Code
Sections 401(k), 401(a)(4), or 410(b) only if aggregated with one or
more other plans, or if one or more other plans satisfy the
requirements of such Code sections only if aggregated with this Plan,
then this section shall be applied by determining the Actual Deferral
Percentage of employees as if all such plans were a single plan.
Plans may be aggregated in order to satisfy Code Section 401(k) only
if they have the same Plan Year.
For purposes of determining the Actual Deferral Percentage of an
Eligible Participant who is a five-percent owner or one of the ten
most highly-paid Highly Compensated Employees, the Elective Deferral
Contributions (and Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, if used in computing the Actual
Deferral Percentage) and Compensation of such Eligible P Participant
include the Elective Deferral Contributions (and, if applicable,
Qualified Nonelective Contributions or Qualified Matching
Contributions, or both) and Compensation for the Plan Year of Family
Members. Family Members, with respect to such Highly Compensated
Employees, shall be disregarded as separate employees in determining
the Actual Deferral Percentage both for Participants who are Nonhighly
Compensated Employees and for Participants who are Highly Compensated
Employees.
For purposes of determining the Actual Deferral Percentage, Elective
Deferral Contributions, Qualified Nonelective Contributions and
Qualified Matching Contributions must be made before the last day of
the 12-month period immediately following the Plan Year to which
contributions relate.
The Employer shall maintain records sufficient to demonstrate
satisfaction of the Average Actual Deferral Percentage test and the
amount of Qualified Nonelective Contributions or Qualified
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Matching Contributions, or both, used in such test.
The determination and treatment of the Contributions used in computing the
Actual Deferral Percentage shall satisfy such other requirements as may be,
prescribed by the Secretary of the Treasury.
If the Plan Administrator should determine during the Plan Year that neither of
the above tests is being met, the Plan Administrator may adjust the amount of
future Elective Deferral Contributions of the Highly Compensated Employees.
Notwithstanding any other provisions of this Plan, Excess Contributions, plus
any income and minus any loss allocable thereto, shall be distributed no later
than the last day of each Plan Year to Participants to whose Accounts such
Excess Contributions were allocated for the preceding Plan Year. If such
excess amounts are distributed more than 2 1/2 months after the last day of the
Plan Year in which such excess amounts arose, a ten (10) percent excise tax
will be imposed on the employer maintaining the plan with respect to such
amounts. Such distributions shall be made to Highly Compensated Employees on
the basis of the respective portions of the Excess Contributions attributable
to each of such employees. Excess Contributions of Participants who are
subject to the family member aggregation rules shall be allocated among the
Family Members in proportion to the Elective Deferral Contributions (and
amounts treated as Elective Deferral Contributions) of each Family Member that
is combined to determine the combined Actual Deferral Percentage.
Excess Contributions shall be treated as Annual Additions, as defined in the
CONTRIBUTION LIMITATION SECTION of Article III, under the Plan.
The Excess Contributions shall be adjusted for income or loss. The income or
loss allocable to such Excess Contributions shall be equal to the income or
loss allocable to the Participant's Elective Deferral Contributions (and, if
applicable, Qualified Nonelective Contributions or Qualified Matching
Contributions, or both) for the Plan Year in which the excess occurred
multiplied by a fraction. The numerator of the fraction is the Excess
Contributions. The denominator of the fraction is the closing balance without
regard to any income or loss occurring during such Plan Year (as of the end of
such Plan Year) of the Participant's Account resulting from Elective Deferral
Contributions (and Qualified Nonelective Contributions or Qualified Matching
Contributions, or both, if used in computing the Actual Deferral Percentage).
Excess Contributions shall be distributed from the Participant's Account
resulting from Elective Deferral Contributions. If such Excess Contributions
exceed the balance in the Participant's Account resulting from Elective
Deferral Contributions, the balance shall be distributed from the Participant's
Account resulting from Qualified Matching Contributions (if applicable) and
Qualified Nonelective Contributions, respectively.
Any Matching Contributions which were based on the Elective Deferral
Contributions which are distributed as Excess Contributions, plus any income
and minus any loss allocable thereto, shall be forfeited. These Forfeitures
shall be used to offset the earliest Employer Contribution due after the
Forfeiture arises.
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d) As of the end of each Plan Year, one of the following tests must be
met:
1. The Average Contribution Percentage for Eligible Participants
who are Highly Compensated Employees for the Plan Year is not
more than the Average Contribution Percentage for Eligible
Participants who are Nonhighly Compensated Employees for the
Plan Year multiplied by 1.25.
2. The Average Contribution Percentage for Eligible Participants
who are Highly Compensated Employees for the Plan Year is not
more than the Average Contribution Percentage for Eligible
Participants who are Nonhighly Compensated Employees for the
Plan Year multiplied by 2 and the difference between the
Average Contribution Percentages is not more than 2.
If one or more Highly Compensated Employees participate in both a cash
or deferred arrangement and a plan subject to the Average Contribution
Percentage test maintained by the Employer or a Controlled Group
member and the sum of the Average Actual Deferral Percentage and
Average Contribution Percentage of those Highly Compensated Employees
subject to either or both tests exceeds the Aggregate Limit, then the
Contribution Percentage of those Highly Compensated Employees who also
participate in a cash or deferred arrangement will be reduced
(beginning with such Highly Compensated Employees whose Contribution
Percentage is the highest) so that the limit is not exceeded. The
amount by which each Highly Compensated Employee's Contribution
Percentage is reduced shall be treated as an Excess Aggregate
Contribution. The Average Actual Deferral Percentage and Average
Contribution Percentage of the Highly Compensated Employees are
determined after any corrections required to meet the Average Actual
Deferral Percentage and Average Contribution Percentage tests.
Multiple use does not occur if both the Average Actual Deferral
Percentage and Average Contribution Percentage of the Highly
Compensated Employees does not exceed 1.25 multiplied by the Average
Actual Deferral Percentage and Average Contribution Percentage of the
Nonhighly Compensated Employees.
The Contribution Percentage for any Eligible Participant who is a
Highly Compensated Employee for the Plan Year and who is eligible to
have Contribution Percentage Amounts allocated to his account under
two or more plans described in Code Section 401(a) or arrangements
described in Code Section 401(k) that are maintained by the Employer
or a Controlled Group member shall be determined as if the total of
such Contribution Percentage Amounts was made under each plan. If a
Highly Compensated Employee participates in two or more cash or
deferred arrangements that have different Plan Years, all cash or
deferred arrangements ending with or within the same calendar year
shall be treated as a single arrangement. Notwithstanding the
foregoing, certain plans shall be treated as separate if mandatorily
disaggregated under regulations under Code Section 401(m).
In the event that this Plan satisfies the requirements of Code
Sections 401(m), 401(a)(4), or 410(b) only if aggregated with one or
more other plans, or if one or more other plans satisfy the
requirements of such Code sections only if aggregated with this Plan,
then this section shall be applied by determining the Contribution
Percentages of Eligible Participants as if all such plans were a
single plan. Plans may be aggregated in order to satisfy Code Section
401(m) only if they have the same Plan Year.
For purposes of determining the Contribution Percentage of an Eligible
Participant who is a five-percent owner or one of the ten most
highly-paid Highly Compensated Employees, the Contribution Percentage
Amounts and Compensation of such Participant shall include
Contribution Percentage Amounts and Compensation for the Plan Year of
Family Members. Family Members, with respect to Highly Compensated
Employees, shall be disregarded as separate employees in determining
the Contribution Percentage both for employees who are Nonhighly
Compensated
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Employees and for employees who are Highly Compensated Employees.
For purposes of determining the Contribution Percentage, Participant
Contributions are considered to have been made in the Plan Year in which
contributed to the Plan. Matching Contributions and Qualified Nonelective
Contributions will be considered made for a Plan Year if made no later than the
end of the 12-month period beginning on the day after the close of the Plan
Year.
The Employer shall maintain records sufficient to demonstrate satisfaction of
the Average Contribution Percentage test and the amount of Qualified
Nonelective Contributions or Qualified Matching Contributions, or both, used in
such test.
The determination and treatment of the Contribution Percentage of any
Participant shall satisfy such other requirements as may be prescribed by the
Secretary of the Treasury.
Notwithstanding any other provisions of this Plan, Excess Aggregate
Contributions, plus any income and minus any loss allocable thereto, shall be
forfeited, if not vested, or distributed. if vested, no later than the last day
of each Plan Year to Participants to whose Accounts such Excess Aggregate
Contributions were allocated for the preceding Plan Year. Excess Aggregate
Contributions of Participants who are subject to the family member aggregation
rules shall be allocated among the Family Members in proportion to the Employee
and Matching Contributions (or amounts treated as Matching Contributions) of
each Family Member that is combined to determine the combined Contribution
Percentage. If such Excess Aggregate Contributions are distributed more than 2
1/2 months after the last day of the Plan Year in which such excess amounts
arose, a ten (1 0) percent excise tax will be imposed on the employer
maintaining the plan with respect to those amounts. Excess Aggregate
Contributions shall be treated as Annual Additions, as defined in the
CONTRIBUTION LIMITATION SECTION of Article III, under the Plan.
The Excess Aggregate Contributions shall be adjusted for income or loss. The
income or loss allocable to such Excess Aggregate Contributions shall be equal
to the income or loss allocable to the Participant's Contribution Percentage
Amounts for the Plan Year in which the excess occurred multiplied by a
fraction. The numerator of the fraction is the Excess Aggregate Contributions.
The denominator of the fraction is the closing balance without regard to any
income or loss occurring during such Plan Year (as of the end of such Plan
Year) of the Participant's Account resulting from Contribution Percentage
Amounts.
Excess Aggregate Contributions shall be distributed from the Participant's
Account resulting from Participant Contributions that are not required as a
condition of employment or participation or for obtaining additional benefits
from Employer Contributions. If such Excess Aggregate Contributions exceed the
balance in the Participant's Account resulting from such Participant
Contributions, the balance shall be forfeited, if not vested, or distributed,
if vested, on a pro-rata basis from the Participant's Account resulting from
Contribution Percentage Amounts. These Forfeitures shall be used to offset the
earliest Employer Contribution due after the Forfeiture arises.
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ARTICLE IV
INVESTMENT OF CONTRIBUTIONS
SECTION 4.01 --INVESTMENT OF CONTRIBUTIONS.
All Contributions are forwarded by the Employer to the Trustee to be
deposited in the Trust Fund.
Investment of Contributions is governed by the provisions of the
Trust, the Group Contract and any other funding arrangement in which the Trust
Fund is or may be invested. To the extent permitted by the Trust, Group
Contract or other funding arrangement, the parties named below shall direct the
Contributions to any of the accounts available under the Trust or Group
Contract and may request the transfer of assets resulting from those
Contributions between such accounts. A Participant may not direct the Trustee
to invest the Participant's Account in collectibles. Collectibles means any
work of art, rug or antique, metal or gem, stamp or coin, alcoholic beverage or
other tangible personal property specified by the Secretary of Treasury. To
the extent that a Participant does not direct the investment of his Account,
such Account shall be invested ratably in the accounts available under the
Trust or Group Contract in the same manner as the undirected Accounts of all
other Participants. The Vested Accounts of all Inactive Participants may be
segregated and invested separately from the Accounts of all other Participants.
The Trust Fund shall be valued at current fair market value as of the
last day of the last calendar month ending in the Plan Year and, at the
discretion of the Trustee, may be valued more frequently. The valuation shall
take into consideration investment earnings credited, expenses charged,
payments made and changes in the value of the assets held in the Trust Fund.
The Account of a Participant shall be credited with its share of the gains and
losses of the Trust Fund. That part of a Participant's Account invested in a
funding arrangement which establishes an account or accounts for such
Participant thereunder shall be credited with the gain or loss from such
account or accounts. That part of a Participant's Account which is invested in
other funding arrangements shall be credited with a proportionate share of the
gain or loss of such investments. The share shall be determined by multiplying
the gain or loss of the investment by the ratio of the part of the
Participant's Account invested in such funding arrangement to the total of the
Trust Fund invested in such funding arrangement.
At least annually, the Named Fiduciary shall review all pertinent
Employee information and Plan data in order to establish the funding policy of
the Plan and to determine appropriate methods of carrying out the Plan's
objectives. The Named Fiduciary shall inform the Trustee and any Investment
Manager of the Plan's short-term and long-term financial needs so the
investment policy can be coordinated with the Plan's financial requirements.
a) Employer Contributions other than Elective Deferral
Contributions: The Participant shall direct the investment of
such Employer Contributions and transfer of assets resulting
from those Contributions.
b) Elective Deferral Contributions: The Participant shall direct
the investment of Elective Deferral Contributions and transfer
of assets resulting from those Contributions.
c) Rollover Contributions: The Participant shall direct the
investment of Rollover Contributions and transfer of assets
resulting from those Contributions.
However, the Named Fiduciary may delegate to the Investment Manager
investment discretion for Contributions and Plan assets which are not subject
to Participant direction.
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ARTICLE V
BENEFITS
SECTION 5.01--RETIREMENT BENEFITS.
On a Participant's Retirement Date, his Vested Account shall be
distributed to him according to the distribution of benefits provisions of
Article VI and the provisions of the SMALL AMOUNTS SECTION of Article IX.
SECTION 5.02--DEATH BENEFITS.
If a Participant dies before his Annuity Starting Date, his Vested
Account shall be distributed according to the distribution of benefits
provisions of Article VI and the provisions of the SMALL AMOUNTS SECTION of
Article IX
SECTION 5.03--VESTED BENEFITS.
A Participant may receive a distribution of his Vested Account at any
time after he ceases to be an Employee, provided he has not again become an
Employee. If such amount is not payable under the provisions of the SMALL
AMOUNTS SECTION of Article IX, it will be distributed only if the Participant
so elects. The Participant's election shall be subject to the requirements in
the ELECTION PROCEDURES SECTION of Article VI for a qualified election of a
retirement benefit.
If a Participant does not receive an earlier distribution according to
the provisions of this section or the SMALL AMOUNTS SECTION of Article IX, upon
his Retirement Date or death, his Vested Account shall be applied according to
the provisions of the RETIREMENT BENEFITS SECTION or the DEATH BENEFITS SECTION
of Article V.
The Nonvested Account of a Participant who has ceased to be an
Employee shall remain a part of his Account until it becomes a Forfeiture;
provided, however, if the Participant again becomes an Employee so that his
Vesting Percentage can increase, the Nonvested Account may become a part of his
Vested Account.
SECTION 5.04--WHEN BENEFITS START.
Benefits under the Plan begin when a Participant retires, dies or
ceases to be an Employee, whichever applies, as provided in the preceding
sections of this article. Benefits which begin before Normal Retirement Date
for a Participant who became Totally and Permanently Disabled when he was an
Employee shall be deemed to begin because he is Totally and Permanently
Disabled. The start of benefits is subject to the qualified election
procedures of Article VI.
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Unless otherwise elected, benefits shall begin before the sixtieth day
following the close of the Plan Year in which the latest date below occurs:
a) The date the Participant attains age 65 or (Normal Retirement
Age, if earlier).
b) The tenth anniversary of the Participant's Entry Date.
c) The date the Participant ceases to be an Employee.
Notwithstanding the foregoing, the failure of a Participant and spouse
to consent to a distribution while a benefit is immediately distributable,
within the meaning of the ELECTION PROCEDURES SECTION of Article VI, shall be
deemed to be an election to defer commencement of payment of any benefit
sufficient to satisfy this section.
The Participant may elect to have his benefits begin after the latest
date for beginning benefits described above, subject to the provisions of this
section. The Participant shall make the election in writing and deliver the
signed statement of election to the Plan Administrator before Normal Retirement
Date or the date he ceases to be an Employee, if later. The election must
describe the form of distribution and the date the benefits will begin. The
Participant shall not elect a date for beginning benefits or a form of
distribution that would result in a benefit payable when he dies which would be
more than incidental within the meaning of governmental regulations.
Benefits shall begin by the Participant's Required Beginning Date, as
defined in the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION REQUIREMENTS
SECTION of Article VI.
Contributions which are used to compute the Actual Deferral
Percentage, as defined in the EXCESS AMOUNTS SECTION of Article III, may be
distributed upon disposition by the Employer of substantially all of the assets
(within the meaning of Code Section 409(d)(2)) used by the Employer in a trade
or business or disposition by the Employer of the Employer's interest in a
subsidiary (within the meaning of Code Section 409(d)(3)) if the transferee
corporation is not a Controlled Group member, the Employee continues employment
with the transferee corporation and the transferor corporation continues to
maintain the Plan. Such distributions made after March 31, 1988, must be made
in a single sum.
SECTION 5.05--WITHDRAWAL PRIVILEGES.
A Participant may withdraw all or any portion of his Vested Account
which results from the following Contributions
Elective Deferral Contributions
Matching Contributions
Discretionary Contributions
Rollover Contributions
in the event of hardship due to an immediate and heavy financial need.
Withdrawals from the Participant's Account resulting from Elective Deferral
Contributions shall be limited to the amount of the Participant's Elective
Deferral Contributions. Immediate and heavy financial need shall be limited
to: (i) expenses incurred or necessary for medical care, described in Code
Section 213(d), of the Participant, the Participant's spouse, or any dependents
of the Participant (as defined in Code Section 152); (ii) purchase (excluding
mortgage payments) of a principal residence for the Participant; NO payment of
tuition and related educational fees for the next 12 months of post-secondary
education for the Participant, his spouse, children or dependents; (iv) the
need to prevent the
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eviction of the Participant from his principal residence or foreclosure on the
mortgage of the Participant's principal residence; or (v) any other
distribution which is deemed by the Commissioner of Internal Revenue to be made
on account of immediate and heavy financial need as provided in Treasury
regulations. The Participant's request for a withdrawal shall include his
written statement that an immediate and heavy financial need exists and explain
its nature.
No withdrawal shall be allowed which is not necessary to satisfy such
immediate and heavy financial need. Such withdrawal shall be deemed necessary
only if all of the following requirements are met: (i) the distribution is not
in excess of the amount of the immediate and heavy financial need of the
Participant (including amounts necessary to pay any Federal, state or local
income taxes or penalties reasonably anticipated to result from the
distribution); (ii) the Participant has obtained all distributions, other than
hardship distributions, and all nontaxable loans currently available under all
plans maintained by the Employer; (iii) the Plan, and all other plans
maintained by the Employer, provide that the Participant's elective
contributions and employee contributions will be suspended for at least 12
months after receipt of the hardship distributions, and (iv) the Plan, and all
other plans maintained by the Employer, provide that the Participant may not
make elective contributions for the Participant's taxable year immediately
following the taxable year of the hardship distribution in excess of the
applicable limit under Code Section 402(g) for such next taxable year less the
amount of such Participant's elective contributions for the taxable year of the
hardship distribution. The Plan will suspend elective contributions and
employee contributions for 12 months and limit elective deferrals as provided
in the preceding sentence. A Participant shall not cease to be an Eligible
Participant, as defined in the EXCESS AMOUNTS SECTION of Article III, merely
because his elective contributions or employee contributions are suspended,
A request for withdrawal shall be in writing on a form furnished for
that purpose and delivered to the Plan Administrator before the withdrawal is
to occur. The Participant's request shall be subject to the requirements in
the ELECTION PROCEDURES SECTION of Article VI for a qualified election of a
retirement benefit payable in a form other than a Qualified Joint and Survivor
Form.
A forfeiture shall not occur solely as a result of a withdrawal.
SECTION 5.06--LOANS TO PARTICIPANTS.
Loans shall be made available to all Participants on a reasonably
equivalent basis. For purposes of this section, Participant means any
Participant or Beneficiary who is a party-in-interest, within the meaning of
Section 3(14) of the Employee Retirement Income Security Act of 1974. Loans
shall not be made to highly compensated employees, as defined in Code Section
414(q), in an amount greater than the amount made available to other
Participants.
No loans will be made to any shareholder-employee or owner-employee.
For purposes of this requirement, a shareholder-employee means an employee or
officer of an electing small business (Subchapter S) corporation who owns (or
is considered as owning within the meaning of Code Section 318(a)(1)), on any
day during the taxable year of such corporation, more than 5% of the
outstanding stock of the corporation.
A loan to a Participant shall be a Participant-directed investment of
his Account. No Account other than the borrowing Participant's Account shall
share in the interest paid on the loan or bear any expense or loss because of
the loan.
The number of outstanding loans shall be limited to one. No more than
one loan will be approved for any Participant in any 12-month period. The
minimum amount of any loan shall be $1,000.
Loans must be adequately secured and bear a reasonable rate of
interest.
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The amount of the loan shall not exceed the maximum amount that may be
treated as a loan under Code Section 72(p) (rather than a distribution) to the
Participant and shall be equal to the lesser of (a) or (b) below:
a) $50,000 reduced by the highest outstanding loan balance of
loans during the one-year period ending on the day before the
new loan is made.
b) The greater of (1) or (2), reduced by (3) below:
1. One-half of the Participant's Vested Account.
2. $10,000.
3. Any outstanding loan balance on the date the new loan
is made.
For purposes of this maximum, a Participant's Vested Account does not include
any accumulated deductible employee contributions, as defined in Code Section
72(o)(5)(B), and all qualified employer plans, as defined in Code Section
72(p)(4), of the Employer and any Controlled Group member shall be treated as
one plan.
The foregoing notwithstanding, the amount of such loan shall not
exceed 50% of the amount of the Participant's Vested Account. For purposes of
this maximum, a Participant's Vested Account does not include any accumulated
deductible employee contributions. as defined in Code Section 72(o)(5)(B). No
collateral other than a portion of the Participant's Vested Account (as limited
above) shall be accepted. The Loan Administrator shall determine if the
collateral is adequate for the amount of the loan requested.
A Participant must obtain the consent of the Participant's spouse, if
any, to the use of the Vested Account as security for the loan. Spousal
consent shall be obtained no earlier than the beginning of the 90-day period
that ends on the date on which the loan to be so secured is made. The consent
must be in writing, must acknowledge the effect of the loan, and must be
witnessed by a plan representative or a notary public. Such consent shall
thereafter be binding with respect to that loan. A new consent shall be
required if the Vested Account is used for collateral upon renegotiation,
extension, renewal, or other revision of the loan.
If a valid spousal consent has been obtained in accordance with the
above, then, notwithstanding any other provision of this Plan, the portion of
the Participant's Vested Account used as a security interest held by the Plan
by reason of a loan outstanding to the Participant shall be taken into account
for purposes of determining the amount of the Vested Account payable at the
time of death or distribution, but only if the reduction is used as repayment
of the loan. If less than 100% of the Participant's Vested Account (determined
without regard to the preceding sentence) is payable to the surviving spouse,
then the Vested Account shall be adjusted by first reducing the Vested Account
by the amount of the security used as repayment of the loan, and then
determining the benefit payable to the surviving spouse.
Each loan shall bear a reasonable fixed rate of interest to be
determined by the Loan Administrator. In determining the interest rate, the
Loan Administrator shall take into consideration fixed interest rates currently
being charged by commercial lenders for loans of comparable risk on similar
terms and for similar durations, so that the interest will provide for a return
commensurate with rates currently charged by commercial lenders for loans made
under similar circumstances. The Loan Administrator shall not discriminate
among the Participants in the matter of interest rates in accordance with the
current appropriate standards.
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The loan shall by its terms require that repayment (principal and
interest) be amortized in level payments, not less frequently than quarterly,
over a period not extending beyond five years from the date of the loan. The
period of repayment for any loan shall be arrived at by mutual agreement
between the Loan Administrator and the Participant.
The Participant shall make a written application for a loan from the
Plan on forms provided by the Loan Administrator. The application must specify
the amount and duration requested. No loan will be approved unless the
Participant is creditworthy. The Participant must grant authority to the Loan
Administrator to investigate the Participant's creditworthiness so that the
loan application may be properly considered.
Information contained in the application for the loan concerning the
income, liabilities, and assets of the Participant will be evaluated to
determine whether there is a reasonable expectation that the Participant will
be able to satisfy payments on the loan as due. Additionally, the Loan
Administrator will pursue any appropriate further investigations concerning the
creditworthiness and/or credit history of the Participant to determine whether
a loan should be approved.
Each loan shall be fully documented in the form of a promissory note
signed by the Participant for the face amount of the loan, together with
interest determined as specified above.
There will be an assignment of collateral to the Plan executed at the
time the loan is made.
In those cases where repayment through payroll deduction by the
Employer is available, installments are so payable, and a payroll deduction
agreement will be executed by the Participant at the time of making the loan.
Where payroll deduction is not available, payments are to be timely
made.
Any payment that is not by payroll deduction shall be made payable to
the Employer or Trustee, as specified in the promissory note, and delivered to
the Loan Administrator, including prepayments and penalties, if any, and other
amounts due under the note.
The promissory note may provide for reasonable late payment penalties
and/or service fees. Any penalties or service fees shall be applied to all
Participants in a nondiscriminatory manner. If the promissory note so
provides, such amounts may be assessed and collected from the Account of the
Participant as part of the loan balance.
Each loan may be paid prior to maturity, in part or in full, without
penalty or service fee, except as may be set out in the promissory note.
If any amount remains unpaid for more than 31 lays after due, a
default is deemed to occur.
Upon default, the Plan has the right to pursue any remedy available by
law to satisfy the amount due, along with accrued interest, including the right
to enforce its claim against the security pledged and execute upon the
collateral as allowed by law.
If any payment of principal or interest or penalty, or any portion
thereof, is not made for a period of 90 days after due, the entire principal
balance whether or not otherwise then due, shall become immediately due and
payable without demand or notice, and subject to collection or satisfaction by
any lawful means, including specifically but not limited to the right to
enforce the claim against the security pledged and to execute upon the
collateral as allowed by law.
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In the event of default, foreclosure on the note and attachment of
security or use of amounts pledged to satisfy the amount then due, will not
occur until a distributable event occurs in accordance with the Plan, and will
not occur to an extent greater than the amount then available upon any
distributable event which has occurred under the Plan.
All reasonable costs and expenses, including but not limited to
attorney's fees, incurred by the Plan in connection with any default or in any
proceeding to enforce any provision of a promissory note or instrument by which
a promissory note nor a Participant loan is secured, shall be assessed and
collected from the Account of the Participant as part of the loan balance.
If payroll deduction is being utilized, in the event that a
Participant's available payroll deduction amounts in any given month are
insufficient to satisfy the total amount due, there will be an increase in the
amount taken subsequently, sufficient to make up the amount that is then due.
If the subsequent deduction is also insufficient to satisfy the amount due
within 31 days, a default is deemed to occur as above. If any amount remains
past due more than 90 days, the entire principal amount, whether or not
otherwise then due, along with interest then accrued and any penalty amount
then due, shall become due and payable, as above.
If the Participant ceases to be a party-in-interest (as defined in
this section), the balance of the outstanding loan becomes due and payable, and
the Participant's Vested Account will be used as available for distributions)
to pay the outstanding loan. The Participant's Vested Account will not be used
to pay any amount due under the outstanding loan before the date which is 31
days after the date he ceased to be an Employee, and the Participant may elect
to repay the outstanding loan with interest on the day of repayment. If no
distributable event has occurred under the Plan at the time that the
Participant's Vested Account would otherwise be used under this provision to
pay any amount due under the outstanding loan, this will not occur until the
time, or in excess of the extent to which, a distributable event occurs under
the Plan.
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ARTICLE VI
DISTRIBUTION OF BENEFITS
SECTION 6.01--AUTOMATIC FORMS OF DISTRIBUTION.
Unless a qualified election of an optional form of benefit has been
made within the election period (see the ELECTION PROCEDURES SECTION of Article
VI), the automatic form of benefit payable to or on behalf of a Participant is
determined as follows:
a) The automatic form of retirement benefit for a Participant who
does not die before his Annuity Starting Date shall be the
Qualified Joint and Survivor Form.
b) The automatic form of death benefit for a Participant who dies
before his Annuity Starting Date shall be:
1. A Qualified Preretirement Survivor Annuity for a
Participant who has a spouse to whom he has been
continuously married throughout the one-year period
ending on the date of his death. The spouse may
elect to start receiving the death benefit on any
first day of the month on or after the Participant
dies and before the date the Participant would have
been age 70 1/2. If the spouse dies before benefits
start, the Participant's Vested Account, determined
as of the date of the spouse's death, shall be paid
to the spouse's Beneficiary.
2. A single-sum payment to the Participant's Beneficiary
for a Participant who does not have a spouse who is
entitled to a Qualified Preretirement Survivor
Annuity.
Before a death benefit will be paid on account of the death of
a Participant who does not have a spouse who is entitled to a
Qualified Preretirement Survivor Annuity, it must be
established to the satisfaction of a plan representative that
the Participant does not have such a spouse.
SECTION 6.02--OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION REQUIREMENTS.
a) For purposes of this section, the following terms are defined:
Applicable Life Expectancy means Life Expectancy (or Joint and
Last Survivor Expectancy) calculated using the attained age of
the Participant (or Designated Beneficiary) as of the
Participant's (or Designated Beneficiary's) birthday in the
applicable calendar year reduced by one for each calendar year
which has elapsed since the date Life Expectancy was first
calculated. If Life Expectancy is being recalculated, the
Applicable Life Expectancy shall be the Life Expectancy so
recalculated. The applicable calendar year shall be the first
Distribution Calendar Year, and if Life Expectancy is being
recalculated such succeeding calendar year.
Designated Beneficiary means the individual who is designated
as the beneficiary under the Plan in accordance with Code
Section 40 1 (a)(9) and the regulations thereunder.
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Distribution Calendar Year means a calendar year for which a minimum
distribution is required. For distributions beginning before the Participant's
death, the first Distribution Calendar Year is the calendar year immediately
preceding the calendar year which contains the Participant's Required Beginning
Date. For distributions beginning after the Participant's death, the first
Distribution Calendar Year is the calendar year in which distributions are
required to begin pursuant to (e) below.
Joint and Last Survivor Expectancy means joint and last survivor expectancy
computed by use of the expected return multiples in Table VI of section 1.72-9
of the Income Tax Regulations.
Unless otherwise elected by the Participant (or spouse, in the case of
distributions described in (e)(2)(ii) below) by the time distributions are
required to begin, life expectancies shall be recalculated annually. Such
election shall be irrevocable as to the Participant (or spouse) and shall apply
to all subsequent years. The life expectancy of a nonspouse Beneficiary may
not be recalculated.
Life Expectancy means life expectancy computed by use of the expected return
multiples in Tables V of section 1.72-9 of the Income Tax Regulations.
Unless otherwise elected by the Participant (or spouse, in the case of
distributions described in (e)(2)(ii) below) by the time distributions are
required to begin, life expectancies shall be recalculated annually. Such
election shall be irrevocable as to the Participant (or spouse) and shall apply
to all subsequent years. The life expectancy of a nonspouse Beneficiary may
not be recalculated.
Participant's Benefit means
1. The Account Balance as of the last valuation date in the
calendar year immediately preceding the Distribution Calendar
Year (valuation calendar year) increased by the amount of any
contributions or forfeitures allocated to the Account balance
as of the dates in the valuation calendar year after the
valuation date and decreased by distributions made in the
valuation calendar year after the valuation date.
2. For purposes of (1) above, if any portion of the minimum
distribution for the first Distribution Calendar Year is made
in the second Distribution Calendar Year on or before the
Required Beginning Date, the amount of the minimum
distribution made in the second Distribution Calendar Year
shall be treated as if it had been made in the immediately
preceding Distribution Calendar Year.
Required Beginning Date means, for a Participant. the first day of
April of the calendar year following the calendar year in which the
Participant attains age 70 1/2, unless otherwise provided in (1), (2)
or (3) below:
1 . The Required Beginning Date for a Participant who attains age
70 1/2 before January 1, 1988, and who is not a 5-percent
owner is the first day of April of the calendar year following
the calendar year in which the later of retirement or
attainment of age 70 1/2 occurs.
2. The Required Beginning Date for a Participant who attains age
70 1/2 before January 1, 1988, and who is a 5-percent owner is
the first day of April of the calendar year following the
later of
i. the calendar year in which the Participant attains age
70 1/2, or
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ii. the earlier of the calendar year with or within which
ends the Plan Year in which the Participant becomes a
5-percent owner, or the calendar year in which the
Participant retires.
3. The Required Beginning Date of a Participant who is not a
5-percent owner and who attains age 70 1/2 during 1988 and who
has not retired as of January 1, 1989, is April 1, 1990.
A Participant is treated as a 5-percent owner for purposes of this
section if such Participant is a 5-percent owner as defined in Code
Section 416(i) (determined in accordance with Code Section 416 but
without regard to whether the Plan is top-heavy) at any time during
the Plan Year ending with or within the calendar year in which such
owner attains age 66 1/2 or any subsequent Plan Year.
Once distributions have begun to a 5-percent owner under this section,
they must continue to be distributed, even if the Participant ceases
to be a 5-percent owner in a subsequent year.
b) The optional forms of retirement benefit shall be the
following: a straight life annuity; single life annuities with
certain periods of five, ten or fifteen years; a single life
annuity with installment refund; survivorship life annuities
with installment refund and survivorship percentages of 50, 66
2/3 or 100; fixed period annuities for any period of whole
months which is not less than 60 and does not exceed the Life
Expectancy of the Participant and the named Beneficiary as
provided in (d) below where the Life Expectancy is not
recalculated; and a series of installments chosen by the
Participant with a minimum payment each year beginning with the
year the Participant turns age 70 l/2. The payment for the
first year in which a minimum payment is required will be made
by April 1 of the following calendar year. The payment for the
second year and each successive year will be made by December
31 of that year. The minimum payment will be based on a period
equal to the Joint and Last Survivor Expectancy of the
Participant and the Participant's spouse, if any, as provided
in (d) below where the Joint and Last Survivor Expectancy is
recalculated. The balance of the Participant's Vested Account,
if any, will be payable on the Participant's death to his
Beneficiary in a single sum. The Participant may also elect to
receive his Vested Account in a single-sum payment.
Election of an optional form is subject to the qualified
election provisions of Article VI.
Any annuity contract distributed shall be nontransferable. The
terms of any annuity contract purchased and distributed by the
Plan to a Participant or spouse shall comply with the
requirements of this Plan.
c) The optional forms of death benefit are a single-sum payment
and any annuity that is an optional form of retirement
benefit. However, a series of installments shall not be
available if the Beneficiary is not the spouse of the deceased
Participant.
d) Subject to the AUTOMATIC FORMS OF DISTRIBUTION SECTION of
Article VI, joint and survivor annuity requirements, the
requirements of this section shall apply to any distribution
of a Participant's interest and will take precedence over any
inconsistent provisions of this Plan. Unless otherwise
specified, the provisions of this section apply to calendar
years beginning after December 31, 1984.
All distributions required under this section shall be
determined and made in accordance with the proposed
regulations under Code Section 401(a)(9), including the
minimum distribution incidental benefit requirement of section
1.401(a)(9)-2 of the proposed regulations.
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<PAGE> 48
The entire interest of a Participant must be distributed or begin to be
distributed no later than the Participant's Required Beginning Date.
As of the first Distribution Calendar Year, distributions, if not made in a
single sum, may only be made over one of the following periods (or combination
thereof):
1. the life of the Participant,
2. the life of the Participant and a Designated Beneficiary,
3. a period certain not extending beyond the Life Expectancy
of the Participant, or
4. a period certain not extending beyond the Joint and Last
Survivor Expectancy of the Participant and a Designated
Beneficiary.
If the Participant's interest is to be distributed in other than a
single sum, the following minimum distribution rules shall apply on or
after the Required Beginning Date:
5. Individual account:
i. If a Participant's Benefit is to be distributed over
a) a period not extending beyond the Life
Expectancy of the Participant or the Joint
Life and Last Survivor Expectancy of the
Participant and the Participant's Designated
Beneficiary or
b) a period not extending beyond the Life
Expectancy of the Designated Beneficiary,
the amount required to be distributed for each
calendar year beginning with the distributions for
the first Distribution Calendar Year, must be at
least equal to the quotient obtained by dividing the
Participant's Benefit by the Applicable Life
Expectancy.
ii. For calendar years beginning before January 1, 1989,
if the Participant's spouse is not the Designated
Beneficiary, the method of distribution selected must
assure that at least 50% of the present value of the
amount available for distribution is paid within the
Life Expectancy of the Participant.
iii. For calendar years beginning after December 31, 1988,
the amount to be distributed each year, beginning
with distributions for the first Distribution
Calendar Year shall not be less than the quotient
obtained by dividing the Participant's Benefit by the
lesser of
a) the Applicable Life Expectancy or
b) if the Participant's spouse is not the
Designated Beneficiary, the applicable
divisor determined from the table set forth
in Q&A-4 of section 1.401(a)(9)-2 of the
proposed regulations.
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Distributions after the death of the Participant
shall be distributed using the Applicable Life
Expectancy in (5)(i) above as the relevant divisor
without regard to proposed regulations section 1.401
(a)(9)-2.
iv. The minimum distribution required for the
Participant's first Distribution Calendar Year must
be male on or before the Participant's Required
Beginning Date. The minimum distribution for the
Distribution Calendar Year for other calendar years,
including the minimum distribution for the
Distribution Calendar Year in which the Participant's
Required Beginning Date occurs, must be made on or
before December 31 of that Distribution Calendar
Year.
6. Other forms:
i. If the Participant's Benefit is distributed in the
form of an annuity purchased from an insurance
company, distributions thereunder shall be made in
accordance with the requirements of Code Section
401(a)(9) and the proposed regulations thereunder.
e) Death distribution provisions:
1. Distribution beginning before death. If the Participant dies
after distribution of his interest has begun, the remaining
portion of such interest will continue to be distributed at
least as rapidly as under the method of distribution being
used prior to the Participant's death.
2. Distribution beginning after death. If the Participant dies
before distribution of his interest begins, distribution of
the Participant's entire interest shall be completed by
December 31 of the calendar year containing the fifth
anniversary of the Participant's death except to the extent
that an election is made to receive distributions in
accordance with (i) or (ii) below:
i. if any portion of the Participant's interest is
payable to a Designated Beneficiary, distributions
may be made over the life or over a period certain
not greater than the Life Expectancy of the
Designated Beneficiary commencing on or before
December 31 of the calendar year immediately
following the calendar year in which the Participant
died;
ii. if the Designated Beneficiary is the Participant's
surviving spouse, the date distributions are required
to begin in accordance with (i) above shall not be
earlier than the later of
a) December 31 of the calendar year immediately
following the calendar year in which the
Participant died and
b) December 31 of the calendar year in which the
Participant would have attained age 70 1/2.
If the Participant has not made an election pursuant to this
(e)(2) by the time of his death, the Participant's Designated
Beneficiary must elect the method of distribution no later
than the earlier of
iii. December 31 of the calendar year in which
distributions would be required to begin under this
subparagraph, or
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iv. December 31 of the calendar year which contains the
fifth anniversary of the date of death of the
Participant.
If the Participant has no Designated Beneficiary, or if the
Designated Beneficiary does not elect a method of
distribution, distribution of the Participant's entire
interest must be completed by December 31 of the calendar year
containing the fifth anniversary of the Participant's death.
3. For purposes of (e)(2) above, if the surviving spouse dies
after the Participant, but before payments to such spouse
begin, the provisions of (e)(2) above, with the exception of
(e)(2)(ii) therein, shall be applied as if the surviving
spouse were the Participant.
4. For purposes of this (e), any amount paid to a child of the
Participant will be treated as if it had been paid to the
surviving spouse if the amount becomes payable to the
surviving spouse when the child reaches the age of majority.
5. For purposes of this (e), distribution of a Participant's
interest is considered to begin on the Participant's Required
Beginning Date (or if (e)(3) above is applicable, the date
distribution is required to begin to the surviving spouse
pursuant to (e)(2) above). If distribution in the form of an
annuity irrevocably commences to the Participant before the
Required Beginning Date, the date distribution is considered
to begin is the date distribution actually commences.
SECTION 6.03--ELECTION PROCEDURES.
The Participant, Beneficiary, or spouse shall make any election under
this section in writing. The Plan Administrator may require such individual to
complete and sign any necessary documents as to the provisions to be made. Any
election permitted under (a) and (b) below shall be subject to the qualified
election provisions of (c) below.
a) Retirement Benefits. A Participant may elect his Beneficiary
or Contingent Annuitant and may elect to have retirement
benefits distributed under any of the optional forms of
retirement benefit described in the OPTIONAL FORMS OF
DISTRIBUTION AND DISTRIBUTION REQUIREMENTS SECTION of Article
VI.
b) Death Benefits. A Participant may elect his Beneficiary and
may elect to have death benefits distributed under any of the
optional forms of death benefit described in the OPTIONAL
FORMS OF DISTRIBUTION AND DISTRIBUTION REQUIREMENTS SECTION of
Article VI.
If the Participant has not elected an optional form of
distribution for the death benefit payable to his Beneficiary,
the Beneficiary may, for his own benefit, elect the form of
distribution, in like manner as a Participant.
The Participant may waive the Qualified Preretirement Survivor
Annuity by naming someone other than his spouse as
Beneficiary.
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<PAGE> 51
In lieu of the Qualified Preretirement Survivor Annuity described in
the AUTOMATIC FORMS OF DISTRIBUTION SECTION of Article VI, the spouse
may, for his own benefit, waive the Qualified Preretirement Survivor
Annuity by electing to have the benefit distributed under any of the
optional forms of death benefit described in the OPTIONAL FORMS OF
DISTRIBUTION AND DISTRIBUTION REQUIREMENTS SECTION of Article VI.
c) Qualified Election. The Participant, Beneficiary or spouse may make
an election at any time during the election period. The Participant,
Beneficiary, or spouse may revoke the election made (or make a new
election) at any time and any number of times during the election
period. An election is effective only if it meets the consent
requirements below.
The election period as to retirement benefits is the 90-day period
ending on the Annuity Starting Date. An election to waive the
Qualified Joint and Survivor Form may not be made before the date he
is provided with the notice of the ability to waive the Qualified
Joint and Survivor Form. If the Participant elects the series of
installments, he may elect on any later date to have the balance of
his Vested Account paid under any of the optional forms of retirement
benefit available under the Plan. His election period for this
election is the 90-day period ending on the Annuity Starting Date for
the optional form of retirement benefit elected.
A Participant may make an election as to death benefits at any time
before he dies. The spouse's election period begins on the date the
Participant dies and ends on the date benefits begin. The
Beneficiary's election period begins on the date the Participant dies
and ends on the date benefits begin. An election to waive the
Qualified Preretirement Survivor Annuity may not be made by the
Participant before the date he is provided with the notice of the
ability to waive the Qualified Preretirement Survivor Annuity. A
Participant's election to waive the Qualified Preretirement Survivor
Annuity which is made before the first day of the Plan Year in which
he reaches age 35 shall become invalid on such date. An election made
by a Participant after he ceases to be an Employee will not become
invalid on the first day of the Plan Year in which he reaches age 35
with respect to death benefits from that part of his Account resulting
from Contributions made before he ceased to be an Employee.
If the Participant's Vested Account has at any time exceeded $3,500,
any benefit which is (1) immediately distributable or (2) payable in a
form other than a Qualified Joint and Survivor Form or a Qualified
Preretirement Survivor Annuity requires the consent of the Participant
and the Participant's spouse (or where either the Participant or
spouse has died, the survivor). The consent of the Participant or
spouse to a benefit which is immediately distributable must not be
made before the date the Participant or spouse is provided with the
notice of the ability to defer the distribution. Such consent shall be
made in writing. The consent shall not be made more than 90 days
before the Annuity Starting Date. Spousal consent is not required for
a benefit which is immediately distributable in a Qualified Joint and
Survivor Form. Furthermore, if spousal consent is not required
because the Participant is electing an optional form of retirement
benefit that is not a life annuity pursuant to (d) below, only the
Participant need consent to the distribution of a benefit payable in a
form that is not a life annuity and which is immediately
distributable. Neither the consent of the Participant nor the
Participant's spouse shall be required to the extent that a
distribution is required to satisfy Code Section 401(a)(9) or Code
Section 415. In addition, upon termination of this Plan if the Plan
does not offer an annuity option (purchased from a commercial
provider), the Participant's Account balance may, without the
Participant's consent, be distributed to the Participant or
transferred to another defined contribution plan (other than an
employee stock ownership plan as defined in Code Section 4975(e)(7))
within the same Controlled Group. A benefit is immediately
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<PAGE> 52
distributable if any part of the benefit could be distributed to the
Participant (or surviving spouse) before the Participant attains (or
would have attained if not deceased) the older of Normal Retirement
Age or age 62. If the Qualified Joint and Survivor Form is waived,
the spouse has the right to consent only to a specific Beneficiary or
a specific form of benefit. The spouse can relinquish one or both
such rights. Such consent shall be made in writing. The consent
shall not be made more than 90 days before the Annuity Starting Date.
If the Qualified Preretirement Survivor Annuity is waived, the spouse
has the right to limit consent only to a specific Beneficiary. Such
consent shall be in writing. The spouse's consent shall be witnessed
by a plan representative or notary public. The spouse's consent must
acknowledge the effect of the election, including that the spouse had
the right to limit consent only to a specific Beneficiary or a
specific form of benefit, if applicable, and that the relinquishment
of one or both such rights was voluntary. Unless the consent of the
spouse expressly permits designations by the Participant without a
requirement of further consent by the spouse, the spouse's consent
must be limited to the form of benefit, if applicable, and the
Beneficiary (including any Contingent Annuitant), class of
Beneficiaries, or contingent Beneficiary named in the election.
Spousal consent is not required, however, if the Participant
establishes to the satisfaction of the plan representative that the
consent of the spouse cannot be obtained because there is no spouse or
the spouse cannot be located. A spouse's consent under this paragraph
shall not be valid with respect to any other spouse. A Participant
may revoke a prior election without the consent of the spouse. Any
new election will require a new spousal consent, unless the consent of
the spouse expressly permits such election by the Participant without
further consent by the spouse. A spouse's consent may be revoked at
any time within the Participant's election period.
d) Special Rule for Profit Sharing Plan. As provided in the preceding
provisions of the Plan, if a Participant has a spouse to whom he has
been continuously married throughout the one-year period ending on the
date of his death, the Participant's Vested Account shall be paid to
such spouse. However, if there is no such spouse or if the surviving
spouse has already consented in a manner conforming to the qualified
election requirements in (c) above, the Vested Account shall be
payable to the Participant's Beneficiary in the event of the
Participant's death.
The Participant may waive the spousal death benefit described above at
any time provided that no such waiver shall be effective unless it
satisfies the conditions of (c) above (other than the notification
requirement referred to therein) that would apply to the Participant's
waiver of the Qualified Preretirement Survivor Annuity.
Because this is a profit sharing plan which pays death benefits as
described above, this subsection (d) applies if the following
condition is met: with respect to the Participant, this Plan is not a
direct or indirect transferee after December 31, 1984, of a defined
benefit plan, money purchase plan (including a target plan), stock
bonus plan or profit sharing plan which is subject to the survivor
annuity requirements of Code Section 401(a)(11) and Code Section 417.
If the above condition is met, spousal consent is not required for
electing a benefit payable in a form that is not a life annuity. If
the above condition is not met, the consent requirements of this
article shall be operative.
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SECTION 6.04--NOTICE REQUIREMENTS.
a) Optional forms of retirement benefit. The Plan Administrator
shall furnish to the Participant and the Participant's spouse
a written explanation of the optional forms of retirement
benefit in the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION
REQUIREMENTS SECTION of Article VI, including the material
features and relative values of these options, in a manner
that would satisfy the notice requirements of Code Section
417(a)(3) and the right of the Participant and the
Participant's spouse to defer distribution until the benefit
is no longer immediately distributable. The Plan
Administrator shall furnish the written explanation by a
method reasonably calculated to reach the attention of the
Participant and the Participant's spouse no less than 30 days
and no more than 90 days before the Annuity Starting Date.
b) Qualified Joint and Survivor Form. The Plan Administrator
shall furnish to the Participant a written explanation of the
following: the terms and conditions of the Qualified Joint and
Survivor Form; the Participant's right to make, and the effect
of, an election to waive the Qualified Joint and Survivor
Form; the rights of the Participant's spouse; and the right to
revoke an election and the effect of such a revocation. The
Plan Administrator shall furnish the written explanation by a
method reasonably calculated to reach the attention of the
Participant no less than 30 days and no more than 90 days
before the Annuity Starting Date.
After the written explanation is given, a Participant or
spouse may make written request for additional information.
The written explanation must be personally delivered or mailed
(first class mail, postage prepaid) to the Participant or
spouse within 30 days from the date of the written request.
The Plan Administrator does not need to comply with more than
one such request by a Participant or spouse.
The Plan Administrator's explanation shall be written in
nontechnical language and will explain the terms and
conditions of the Qualified Joint and Survivor Form and the
financial effect upon the Participant's benefit (in terms of
dollars per benefit payment) of electing not to have benefits
distributed in accordance with the Qualified Joint and
Survivor Form.
c) Qualified Preretirement Survivor Annuity. As required by the
Code and Federal regulation, the Plan Administrator shall
furnish to the Participant a written explanation of the
following: the terms and conditions of the Qualified
Preretirement Survivor Annuity; the Participant's right to
make, and the effect of, an election to waive the Qualified
Preretirement Survivor Annuity; the rights of the
Participant's spouse; and the right to revoke an election and
the effect of such a revocation. The Plan Administrator shall
furnish the written explanation by a method reasonably
calculated to reach the attention of the Participant within
the applicable period. The applicable period for a
Participant is whichever of the following periods ends last:
1. the period beginning one year before the date the
individual becomes a Participant and ending one year
after such date; or
2. the period beginning one year before the date the
Participant's spouse is first entitled to a Qualified
Preretirement Survivor Annuity and ending one year
after such date.
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If such notice is given before the period beginning with the first day of the
Plan Year in which the Participant attains age 32 and ending with the close of
the Plan Year preceding the Plan Year in which the Participant attains age 35,
an additional notice shall be given within such period. If a Participant
ceases to be an Employee before attaining age 35, an additional notice shall be
given within the period beginning one year before the date he ceases to be an
Employee and ending one year after such date.
After the written explanation is given, a Participant or spouse may make
written request for additional information. The written explanation must be
personally delivered or mailed (first class mail, postage prepaid) to the
Participant or spouse within 30 days from the date of the written request. The
Plan Administrator does not need to comply with more than one such request by a
Participant or spouse.
The Plan Administrator's explanation shall be written in nontechnical language
and will explain the terms and conditions of the Qualified Preretirement
Survivor Annuity and the financial effect upon the spouse's benefit (in terms
of dollars per benefit payment) of electing not to have benefits distributed in
accordance with the Qualified Preretirement Survivor Annuity.
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ARTICLE VII
TERMINATION OF PLAN
The Employer expects to continue the Plan indefinitely but reserves
the right to terminate the Plan in whole or in part at any time upon giving
written notice to all parties concerned. Complete discontinuance of
Contributions under the Plan constitutes complete termination of Plan.
The Account of each Participant shall be fully (100%) vested and
nonforfeitable as of the effective date of complete termination of Plan. The
Account of each Participant who is included in the group of Participants deemed
to be affected by the partial termination of the Plan shall be fully (100%)
vested and nonforfeitable as of the effective date of the partial Plan
termination. The Participant's Account shall continue to participate in the
earnings credited, expenses charged and any appreciation or depreciation of the
Investment Fund until the Vested Account is distributed. A distribution under
this article will be a retirement benefit and shall be distributed to the
Participant according to the provisions of Article VI.
A Participant's Account which does not result from Contributions which
are used to compute the Actual Deferral Percentage, as defined in the EXCESS
AMOUNTS SECTION of Article III, may be distributed to the Participant after the
effective date of the complete or partial Plan termination. A Participant's
Account resulting from Contributions which are used to compute such percentage
may be distributed upon termination of the Plan without the establishment or
maintenance of another defined contribution plan, other than an employee stock
ownership plan (as defined in Code Section 4975(e) or Code Section 409) or a
simplified employee pension plan (as defined in Code Section 408(k)). Such a
distribution made after March 31, 1988, must be in a single sum.
Upon complete termination of Plan, no more Employees shall become
Participants and no more Contributions shall be made.
The assets of this Plan shall not be paid to the Employer at any time,
except that, after the satisfaction of all liabilities under the Plan, any
assets remaining may be paid to the Employer. The payment may not be made if
it would contravene any provision of law.
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ARTICLE VIII
ADMINISTRATION OF PLAN
SECTION 8.01--ADMINISTRATION.
Subject to the provisions of this article, the Plan Administrator has
complete control of the administration of the Plan. The Plan Administrator has
all the powers necessary for it to properly carry out its administrative
duties. Not in limitation, but in amplification of the foregoing, the Plan
Administrator has the power to construe the Plan, including ambiguous
provisions, and to determine all questions that may arise under the Plan,
including all questions relating to the eligibility of Employees to participate
in the Plan and the amount of benefit to which any Participant, Beneficiary,
spouse or Contingent Annuitant may become entitled. The Plan Administrator's
decisions upon all matters within the scope of its authority shall be final.
Unless otherwise set out in the Plan or Group Contract, the Plan
Administrator may delegate recordkeeping and other duties which are necessary
for the administration of the Plan to any person or firm which agrees to accept
such duties. The Plan Administrator shall be entitled to rely upon all tables,
valuations. certificates and reports furnished by the consultant or actuary
appointed by the Plan Administrator and upon all opinions given by any counsel
selected or approved by the Plan Administrator.
The Plan Administrator shall receive all claims for benefits by
Participants, former Participants, Beneficiaries, spouses, and Contingent
Annuitants. The Plan Administrator shall determine all facts necessary to
establish the right of any Claimant to benefits and the amount of those
benefits under the provisions of the Plan. The Plan Administrator may
establish rules and procedures to be followed by Claimants in filing claims for
benefits, in furnishing and verifying proofs necessary to determine age, and in
any other matters required to administer the Plan.
SECTION 8.02--RECORDS.
All acts and determinations of the Plan Administrator shall be duly
recorded. All these records, together with other documents necessary for the
administration of the Plan, shall be preserved in the Plan Administrator's
custody.
Writing (handwriting, typing, printing), photostating, photographing,
microfilming, magnetic impulse, mechanical or electrical recording or other
forms of data compilation shall be acceptable means of keeping records.
SECTION 8.03--INFORMATION AVAILABLE.
Any Participant in the Plan or any Beneficiary may examine copies of
the Plan description, latest annual report, any bargaining agreement, this
Plan, the Group Contract or any other instrument under which the Plan was
established or is operated. The Plan Administrator shall maintain all of the
items listed in this section in its office, or in such other place or places as
it may designate in order to comply with governmental regulations. These items
may be examined during reasonable business hours. Upon the written request of
a Participant or Beneficiary receiving benefits under the Plan, the Plan
Administrator will furnish him with a copy of any of these items. The Plan
Administrator may make a reasonable charge to the requesting person for the
copy.
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SECTION 8.04--CLAIM AND APPEAL PROCEDURES.
A Claimant must submit any required forms and pertinent information
when making a claim for benefits under the Plan.
If a claim for benefits under the Plan is denied, the Plan
Administrator shall provide adequate written notice to the Claimant whose claim
for benefits under the Plan has been denied. The notice must be furnished
within 90 days of the date that the claim is received by the Plan
Administrator. The Claimant shall be notified in writing within this initial
90-day period if special circumstances require an extension of time needed to
process the claim and the date by which the Plan Administrator's decision is
expected to be rendered. The written notice shall be furnished no later than
180 days after the date the claim was received by the Plan Administrator.
The Plan Administrator's notice to the Claimant shall specify the
reason for the denial; specify references to pertinent Plan provisions on which
denial is based; describe any additional material and information needed for
the Claimant to perfect his claim for benefits; explain why the material and
information is needed; inform the Claimant that any appeal he wishes to make
must be made in writing to the Plan Administrator within 60 days after receipt
of the Plan Administrator's notice of denial of benefits and that failure to
make the written appeal within such 60-day period shall render the Plan
Administrator's determination of such denial final, binding and conclusive.
If the Claimant appeals to the Plan Administrator, the Claimant, or
his authorized representative, may submit in writing whatever issues and
comments the Claimant, or his representative, feels are pertinent. The
Claimant, or his authorized representative may review pertinent Plan documents.
The Plan Administrator shall reexamine all facts related to the appeal and make
a final determination as to whether the denial of benefits is justified under
the circumstances. The Plan Administrator shall advise the Claimant of its
decision within 60 days of his written request for review, unless special
circumstances (such as a hearing) would make rendering a decision within the
60-day limit unfeasible. The Claimant must be notified within the 60-day limit
if an extension is necessary. The Plan Administrator shall render a decision
on a claim for benefits no later than 120 days after the request for review is
received.
SECTION 8.05--UNCLAIMED VESTED ACCOUNT PROCEDURE.
At the time the Participant's Vested Account is distributable to the
Participant, spouse or Beneficiary without his consent according to the
provisions of Article VI or Article IX, the Plan Administrator, by certified or
registered mail addressed to his last known address and in accordance with the
notice requirements of Article VI, will notify him of his entitlement to a
benefit. If the Participant, spouse or Beneficiary fails to claim the Vested
Account or make his whereabouts known in writing within six months from the
date of mailing the notice, the Plan Administrator may treat such unclaimed
Vested Account as a forfeiture and apply it according to the forfeiture
provisions of Article III. If Article III contains no forfeiture provisions,
such amount will be applied to reduce the earliest Employer Contributions due
after the forfeiture arises.
If a Participant's Vested Account is forfeited according to the
provisions of the above paragraph and the Participant, his spouse or his
Beneficiary at any time make a claim for benefits, the forfeited Vested Account
shall be reinstated, unadjusted for any gains or losses occurring after the
date it was forfeited. The reinstated Vested Account shall then be distributed
to the Participant, spouse or Beneficiary according to the preceding provisions
of the Plan.
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SECTION 8.06--DELEGATION OF AUTHORITY.
All or any part of the administrative duties and responsibilities
under this article may be delegated by the Plan Administrator to a retirement
committee. The duties and responsibilities of the retirement committee shall
be set out in a separate written agreement.
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ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01--AMENDMENTS.
The Employer may amend this Plan at any time, including any remedial
retroactive changes (within the specified period of time as may be determined
by Internal Revenue Service regulations) to comply with the requirements of any
law or regulation issued by any governmental agency to which the Employer is
subject. An amendment may not diminish or adversely affect any accrued
interest or benefit of Participants or their Beneficiaries or eliminate an
optional form of distribution with respect to benefits attributable to service
before the amendment nor allow reversion or diversion of Plan assets to the
Employer at any time, except as may be necessary to comply with the
requirements of any law or regulation issued by any governmental agency to
which the Employer is subject. No amendment to this Plan shall be effective to
the extent that it has the effect of decreasing a Participant's accrued
benefit. However, a Participant's Account may be reduced to the extent
permitted under Code Section 412(c)(8). For purposes of this paragraph, a Plan
amendment which has the effect of decreasing a Participant's Account or
eliminating an optional form of benefit, with respect to benefits attributable
to service before the amendment shall be treated as reducing an accrued
benefit. Furthermore, if the vesting schedule of the Plan is amended, in the
case of an Employee who is a Participant as of the later of the date such
amendment is adopted or the date it becomes effective, the nonforfeitable
percentage (determined as of such date) of such Employee's employer-derived
accrued benefit will not be less than his percentage computed under the Plan
without regard to such amendment.
An amendment shall not decrease a Participant's vested interest in the
Plan. If an amendment to the Plan, or a deemed amendment in the case of a
change in top-heavy status of the Plan as provided in the MODIFICATION OF
VESTING REQUIREMENTS SECTION of Article X, changes the computation of the
percentage used to determine that portion of a Participant's Account
attributable to Employer Contributions which is nonforfeitable (whether
directly or indirectly), each Participant or former Participant
a) who has completed at least three Years of Service on the date
the election period described below ends (five Years of
Service if the Participant does not have at least one
Hour-of-Service in a Plan Year beginning after December 31,
1988) and
b) whose nonforfeitable percentage will be determined on any date
after the date of the change
may elect, during the election period, to have the nonforfeitable percentage of
his Account that results from Employer Contributions determined without regard
to the amendment. This election may not be revoked. An election does "not
need to be provided for any Participant or former Participant whose
nonforfeitable percentage, determined according to the Plan provisions as
changed, cannot at any time be less than the percentage determined without
regard to such change. The election period shall begin no later than the date
the Plan amendment is adopted, or deemed adopted in the case of a change in the
top-heavy status of the Plan, and end no earlier than the sixtieth day after
the latest of the date the amendment is adopted (deemed adopted) or becomes
effective, or the date the Participant is issued written notice of the
amendment (deemed amendment) by the Employer or the Plan Administrator.
SECTION 9.02--DIRECT ROLLOVERS.
This section applies to distributions made on or after January 1,
1993. Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a Distributee's election under this section, a Distributee may
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elect, at the time and in the manner prescribed by the Plan Administrator, to
have any portion of an Eligible Rollover Distribution paid directly to an
Eligible Retirement Plan, specified by the Distributee, in a Direct Rollover.
SECTION 9.03--MERGERS AND DIRECT TRANSFERS.
The Plan may not be merged or consolidated with, nor have its assets
or liabilities transferred to, any other retirement plan, unless each
Participant in the plan would (if the plan then terminated) receive a benefit
immediately after the merger, consolidation or transfer which is equal to or
greater than the benefit the Participant would have been entitled to receive
immediately before the merger, consolidation or transfer (if this Plan had then
terminated). The Employer may enter into merger agreements or direct transfer
of assets agreements with the employers under other retirement plans which are
qualifiable under Code Section 401(a), including an elective transfer, and may
accept the direct transfer of plan assets, or may transfer plan assets, as a
party to any such agreement. The Employer shall not consent to, or be a party
to a merger, consolidation or transfer of assets with a defined benefit plan if
such action would result in a defined benefit feature being maintained under
this Plan.
The Plan may accept a direct transfer of plan assets on behalf of an
Eligible Employee. If the Eligible Employee is not an Active Participant when
the transfer is made, the Eligible Employee shall be deemed to be an Active
Participant only for the purpose of investment and distribution of the
transferred assets. Employer Contributions shall not be made for or allocated
to the Eligible Employee, until the time he meets all of the requirements to
become an Active Participant.
The Plan shall hold, administer and distribute the transferred assets
as a part of the Plan. The Plan shall maintain a separate account for the
benefit of the Employee on whose behalf the Plan accepted the transfer in order
to reflect the value of the transferred assets. Unless a transfer of assets to
the Plan is an elective transfer, the Plan shall apply the optional forms of
benefit protections described in the AMENDMENTS SECTION of Article IX to all
transferred assets. A transfer is elective if: (1) the transfer is voluntary,
under a fully informed election by the Participant; (2) the Participant has an
alternative that retains his Code Section 411(d)(6) protected benefits
(including an option to leave his benefit in the transferor plan, if that plan
is not terminating); (3) if the transferor plan is subject to Code Sections
401(a)(11) and 417, the transfer satisfies the applicable spousal consent
requirements of the Code; (4) the notice requirements under Code Section 417,
requiring a written explanation with respect to an election not to receive
benefits in the form of a qualified joint and survivor annuity, are met with
respect to the Participant and spousal transfer election; (5) the Participant
has a right to immediate distribution from the transferor plan under provisions
in the plan not inconsistent with Code Section 401(a); (6) the transferred
benefit is equal to the Participant's entire nonforfeitable accrued benefit
under the transferor plan, calculated to be at least the greater of the single
sum distribution provided by the transferor plan (if any) or the present value
of the Participant's accrued benefit under the transferor plan payable at the
plan's normal retirement age and calculated using an interest rate subject to
the restrictions of Code Section 417(e) and subject to the overall limitations
of Code Section 415; (7) the Participant has a 100% nonforfeitable interest in
the transferred benefit; and (8) the transfer otherwise satisfies applicable
Treasury regulations.
SECTION 9.04--PROVISIONS RELATING TO THE INSURER AND OTHER PARTIES.
The obligations of an Insurer shall be governed solely by the
provisions of the Group Contract. The Insurer shall not be required to perform
any act not provided in or contrary to the provisions of the Group Contract.
See the CONSTRUCTION SECTION of this article.
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Any issuer or distributor of investment contracts or securities is
governed solely by the terms of its policies, written investment contract,
prospectuses, security instruments, and any other written agreements entered
into with the Trustee.
Such Insurer, issuer or distributor is not a party to the Plan, nor
bound in any way by the Plan provisions. Such parties shall not be required to
look to the terms of this Plan, nor to determine whether the Employer, the Plan
Administrator, the Trustee, or the Named Fiduciary have the authority to act in
any particular manner or to make any contract or agreement.
Until notice of any amendment or termination of this Plan or a change
in Trustee has been received by the Insurer at its home office or an issuer or
distributor at their principal address, they are and shall be fully protected
in assuming that the Plan has not been amended or terminated and in dealing
with any party acting as Trustee according to the latest information which they
have received at their home office or principal address.
SECTION 9.05--EMPLOYMENT STATUS.
Nothing contained in this Plan gives an Employee the right to be
retained in the Employer's employ or to interfere with the Employer's right to
discharge any Employee.
SECTION 9.06--RIGHTS TO PLAN ASSETS.
No Employee shall have any right to or interest in any assets of the
Plan upon termination of his employment or otherwise except as specifically
provided under this Plan, and then only to the extent of the benefits payable
to such Employee in accordance with Plan provisions.
Any final payment or distribution to a Participant or his legal
representative or to any Beneficiaries, spouse or Contingent Annuitant of such
Participant under the Plan provisions shall be in full satisfaction of all
claims against the Plan, the Named Fiduciary, the Plan Administrator, the
Trustee, the Insurer, and the Employer arising under or by virtue of the Plan.
SECTION 9.07--BENEFICIARY.
Each Participant may name a Beneficiary to receive any death benefit
(other than any income payable to a Contingent Annuitant) that may arise out of
his participation in the Plan. The Participant may change his Beneficiary from
time to time. Unless a qualified election has been made, for purposes of
distributing any death benefits before Retirement Date, the Beneficiary of a
Participant who has a spouse who is entitled to a Qualified Preretirement
Survivor Annuity shall be the Participant's spouse. The Participant's
Beneficiary designation and any change of Beneficiary shall be subject to the
provisions of the ELECTION PROCEDURES SECTION of Article VI. It is the
responsibility of the Participant to give written notice to the Insurer of the
name of the Beneficiary on a form furnished for that purpose.
With the Employer's consent, the Plan Administrator may maintain
records of Beneficiary designations for Participants before their Retirement
Dates. In that event, the written designations made by Participants shall be
filed with the Plan Administrator, If a Participant dies before his Retirement
Date, the Plan Administrator shall certify to the Insurer the Beneficiary
designation on its records for the Participant.
If, at the death of a Participant, there is no Beneficiary named or
surviving, any death benefit under the Group Contract shall be paid under the
applicable provisions of the Group Contract.
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SECTION 9.08--NONALIENATION OF BENEFITS.
Benefits payable under the Plan are not subject to the claims of any
creditor of any Participant, Beneficiary, spouse or Contingent Annuitant. A
Participant, Beneficiary, spouse or Contingent Annuitant does not have any
rights to alienate, anticipate, commute, pledge, encumber or assign any of such
benefits, except in the case of a loan as provided in the LOANS TO PARTICIPANTS
SECTION of Article V. The preceding sentences shall also apply to the creation,
assignment, or recognition of a right to any benefit payable with respect to a
Participant according to a domestic relations order, unless such order is
determined by the Plan Administrator to be a qualified domestic relations
order, as defined in Code Section 414(p), or any domestic relations order
entered before January 1, 1985.
SECTION 9.09--CONSTRUCTION.
The validity of the Plan or any of its provisions is determined under
and construed according to Federal law and, to the extent permissible, according
to the laws of the state in which the Employer has its principal office. In
case any provision of this Plan is held illegal or invalid for any reason, such
determination shall not affect the remaining provisions of this Plan, and the
Plan shall be construed and enforced as if the illegal or invalid provision had
never been included.
In the event of any conflict between the provisions of the Plan and
the terms of any contract or policy issued hereunder, the provisions of the
Plan control the operation and administration of the Plan.
SECTION 9.10--LEGAL ACTIONS.
The Plan, the Plan Administrator, the Trustee and the Named Fiduciary
are the necessary parties to any action or proceeding involving the assets held
with respect to the Plan or administration of the Plan or Trust. No person
employed by the Employer, no Participant, former Participant or their
Beneficiaries or any other person having or claiming to have an interest in the
Plan is entitled to any notice of process. A final judgement entered in any
such action or proceeding shall be binding and conclusive on all persons having
or claiming to have an interest in the Plan.
SECTION 9.11--SMALL AMOUNTS.
If the Vested Account of a Participant has never exceeded $3,500, the
entire Vested Account shall be payable in a single sum as of the earliest of
his Retirement Date, the date he dies, or the date he ceases to be an Employee
for any other reason. This is a small amounts payment. If a small amount is
payable as of the date the Participant dies, the small amounts payment shall be
made to the Participant's Beneficiary (spouse if the death benefit is payable
to the spouse). If a small amounts payment is payable while the Participant is
living, the small amounts payment shall be made to the Participant. The small
amounts payment is in full settlement of all benefits otherwise payable.
No other small amounts payments shall be made.
SECTION 9.12--WORD USAGE.
The masculine gender, where used in this Plan, shall include the
feminine gender and the singular words as used in this Plan may include the
plural, unless the context indicates otherwise.
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SECTION 9.13--TRANSFERS BETWEEN PLANS.
If an Employee previously participated in another plan of the Employer
which credited service under the elapsed time method for any purpose which
under this Plan is determined using the hours method, then the Employee's
service shall be equal to the sum of (a), (b) and (c) below:
a) The number of whole years of service credited to him under the
other plan as of the date he became an Eligible Employee under
this Plan.
b) One year or a part of a year of service for the applicable
service period in which he became an Eligible Employee if he
is credited with the required number of Hours-of-Service. If
the Employer does not have sufficient records to determine the
Employee's actual Hours-of-Service in that part of the service
period before the date he became an Eligible Employee, the
Hours-of-Service shall be determined using an equivalency.
For any month in which he would be required to be credited
with one Hour-of-Service, the Employee shall be deemed for
purposes of this section to be credited with 190
Hours-of-Service.
c) The Employee's service determined under this Plan using the
hours method after the end of the applicable service period in
which he became an Eligible Employee.
If an Employee previously participated in another plan of the Employer
which credited service under the hours method for any purpose which under this
Plan is determined using the elapsed time method, then the Employee's service
shall be equal to the sum of (d), (e) and (f) below:
d) The number of whole years of service credited to him under the
other plan as of the beginning of the applicable service
period under that plan in which he became an Eligible Employee
under this Plan.
e) The greater of (1) the service that would be credited to him
for that entire service period using the elapsed time method
or (2) the service credited to him under the other plan as of
the date he became an Eligible Employee under this Plan.
f) The Employee's service determined under this Plan using the
elapsed time method after the end of the applicable service
period under the other plan in which he became an Eligible
Employee.
Any modification of service contained in this Plan shall be applicable
to the service determined pursuant to this section.
If the Employee previously participated in the plan of a Controlled
Group member which credited service under a different method than is used in
this Plan, for purposes of determining eligibility and vesting the provisions
above shall apply as though the plan of the Controlled Group member were a plan
of the Employer.
SECTION 9.14--QUALIFICATION OF PLAN.
The Employer intends to apply for an advance determination letter from
the Internal Revenue Service for the initial qualification of the Plan, and the
determination of exempt status of the Trust.
If this Plan is denied initial qualification, it will terminate. The
Employer shall give written notice to the Trustee of the denial in sufficient
time so the assets resulting from Contributions which were conditioned on
initial qualification of the Plan may be returned within one year after the
date of denial, but only if the application for the
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qualification is made by the time prescribed by law for filing the Employer's
return for the taxable year in which the Plan is adopted, or such later date as
the Secretary of the Treasury may prescribe. The Trustee shall notify the
Insurer that the Group Contract is to be terminated. The Plan assets which
result from Employer Contributions shall be returned to the Employer. The
Trustee, the Plan Administrator and the Named Fiduciary shall then be
discharged from all obligations under the Plan and the Insurer shall be
discharged from all obligations under the Group Contract. A Participant or
Beneficiary shall not have any right or claim to the assets or to any benefit
under this Plan before the Internal Revenue Service determines that the Plan
and Trust qualify under the provisions of Code Section 401(a).
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ARTICLE X
TOP-HEAVY PLAN REQUIREMENTS
SECTION 10.01--APPLICATION.
The provisions of this article shall supersede all other provisions in
the Plan to the contrary.
For the purpose of applying the Top-heavy Plan requirements of this
article, all members of the Controlled Group shall be treated as one Employer.
The term Employer as used in this article shall be deemed to include all
members of the Controlled Group unless the term as used clearly indicates only
the Employer is meant.
The accrued benefit or account of a participant which results from
deductible voluntary contributions shall not be included for any purpose under
this article.
The minimum vesting and contribution provisions of the MODIFICATION OF
VESTING REQUIREMENTS and MODIFICATION OF CONTRIBUTIONS SECTIONS of Article X
shall not apply to any Employee who is included in a group of Employees covered
by a collective bargaining agreement which the Secretary of Labor finds to be a
collective bargaining agreement between employee representatives and one or
more employers, including the Employer, if there is evidence that retirement
benefits were the subject of good faith bargaining between such
representatives. For this purpose, the term "employee representatives" does
not include any organization more than half of whose members are employees who
are owners, officers, or executives.
SECTION 10.02--DEFINITIONS.
The following terms are defined for purposes of this article.
Aggregation Group means
a) each of the Employer's retirement plans in which a
Key Employee is a participant during the Year
containing the Determination Date or one of the four
preceding Years,
b) each of the Employer's other retirement plans which
allows the plan(s) described in (a) above to meet the
nondiscrimination requirement of Code Section
401(a)(4) or the minimum coverage requirement of Code
Section 410, and
c) any of the Employer's other retirement plans not
included in (a) or (b) above which the Employer
desires to include as part of the Aggregation Group.
Such a retirement plan shall be included only if the
Aggregation Group would continue to satisfy the
requirements of Code Section 401(a)(4) and Code
Section 410.
The plans in (a) and (b) above constitute the "required" Aggregation
Group. The plans in (a), (b) and (c) above constitute the
"permissive" Aggregation Group.
Compensation means, as to an Employee for any period, compensation as
defined in the CONTRIBUTION LIMITATION SECTION of Article III. For
purposes of determining who is a Key Employee, Compensation shall
include, in addition to compensation as defined in the CONTRIBUTION
LIMITATION SECTION of Article III, elective contributions. Elective
contributions are amounts which are excludible from the Employee's
gross income under Code Sections 125, 402(e)(3), 402(h) or 403(b), and
contributed by the Employer, at the
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Employee's election, to a Code Section 401(k) arrangement, a simplified
employee pension, cafeteria plan or tax-sheltered annuity.
For purposes of Compensation as defined in this section, Compensation shall be
limited in the same manner and in the same time as the Compensation defined in
the DEFINITION SECTION of Article I.
Determination Date means as to this Plan for any Year, the last day of the
preceding Year. However, if there is no preceding Year, the Determination Date
is the last day of such Year.
Key Employee means any Employee or former Employee (including Beneficiaries of
deceased Employees) who at any time during the determination period was
a) one of the Employer's officers (subject to the maximum below)
whose Compensation (as defined in this section) for the Year
exceeds 50 percent of the dollar limitation under Code Section
415(b)(1)(A),
b) one of the ten Employees who owns (or is considered to own,
under Code Section 318) more than a half percent ownership
interest and one of the largest interests in the Employer
during any Year of the determination period if such person's
Compensation (as defined in this section) for the Year exceeds
the dollar limitation under Code Section 415(c)(1)(A),
c) a five-percent owner of the Employer, or
d) a one-percent owner of the Employer whose Compensation (as
defined in this section) for the Year is more than $150,000.
Each member of the Controlled Group shall be treated as a separate employer for
purposes of determining ownership in the Employer.
The determination period is the Year containing the Determination Date and the
four preceding Years. If the Employer has fewer than 30 Employees, no more
than three Employees shall be treated as Key Employees because they are
officers. If the Employer has between 30 and 500 Employees, no more than ten
percent of the Employer's Employees (if not an integer, increased to the next
integer) shall be treated as Key Employees because they are officers. In no
event will more than 50 Employees be treated as Key Employees because they are
officers if the Employer has 500 or more Employees. The number of Employees
for any Plan Year is the greatest number of Employees during the determination
period. Officers who are employees described in Code Section 414(q)(8) shall
be excluded. If the Employer has more than the maximum number of officers to
be treated as Key Employees, the officers shall be ranked by amount of annual
Compensation (as defined in this section), and those with the greater amount of
annual Compensation during the determination period shall be treated as Key
Employees. To determine the ten Employees owning the largest interests in the
Employer, if more than one Employee has the same ownership interest, the
Employee(s) having the greater annual Compensation shall be treated as owning
the larger interests). The determination of who is a Key Employee shall be
made according to Code Section 416(i)(1) and the regulations thereunder.
Non-key Employee means a person who is a non-key employee within the meaning of
Code Section 416 and regulations thereunder.
Present Value means the present value of a participant's accrued benefit under
a defined benefit plan as of his normal retirement age (attained age if later)
or, if the plan provides non-proportional subsidies, the
65
<PAGE> 67
age at which the benefit is most valuable. The accrued benefit of any Employee
(other than a Key Employee) shall be determined under the method which is used
for accrual purposes for all plans of the Employer or if there is no one method
which is used for accrual purposes for all plans of the Employer, as if such
benefit accrued not more rapidly than the slowest accrual rate permitted under
Code Section 411(b)(1)(C). For purposes of establishing Present Value, any
benefit shall be discounted only for 7.5% interest and mortality according to
the 1971 Group Annuity Table (Male) without the 7% margin but with projection
by Scale E from 1971 to the later of (a) 1974, or (b) the year determined by
adding the age to 1920, and wherein for females the male age six years younger
is used. If the Present Value of accrued benefits is determined for a
participant under more than one defined benefit plan included in the
Aggregation Group, all such plans shall use the same actuarial assumptions to
determine the Present Value.
Top-heavy Plan means a plan which is a top-heavy plan for any plan year
beginning after December 31, 1983. This Plan shall be a Top-heavy Plan if
a) the Top-heavy Ratio for this Plan alone exceeds 60 percent and
this Plan is not part of any required Aggregation Group or
permissive Aggregation Group.
b) this Plan is a part of a required Aggregation Group, but not
part of a permissive Aggregation Group, and the Top-heavy
Ratio for the required Aggregation Group exceeds 60 percent.
c) this Plan is a part of a required Aggregation Group and part
of a permissive Aggregation Group and the Top-heavy Ratio for
the permissive Aggregation Group exceeds 60 percent.
Top-heavy Ratio means the ratio calculated below for this Plan or for the
Aggregation Group.
a) If the Employer maintains one or more defined contribution
plans (including any simplified employee pension plan) and the
Employer has not maintained any defined benefit plan which
during the five-year period ending on the determination date
has or has had accrued benefits, the Top-heavy Ratio for this
Plan alone or for the required or permissive Aggregation Group
as appropriate is a fraction, the numerator of which is the
sum of the account balances of all Key Employees as of the
determination date and the denominator of which is the sum of
all account balances of all employees as of the determination
date. Both the numerator and denominator of the Top-heavy
Ratio are adjusted for any distribution of an account balance
(including those made from terminated plan(s) of the Employer
which would have been part of the required Aggregation Group
had such plan(s) not been terminated) made in the five-year
period ending on the determination date. Both the numerator
and denominator of the Top-heavy Ratio are increased to
reflect any contribution not actually made as of the
Determination Date, but which is required to be taken into
account on that date under Code Section 416 and the
regulations thereunder.
66
<PAGE> 68
b) If the Employer maintains one or more defined contribution
plans (including any simplified employee pension plan) and the
Employer maintains or has maintained one or more defined
benefit plans which during the five-year period ending on the
determination date has or has had accrued benefits, the
Top-heavy Ratio for any required or permissive Aggregation
Group as appropriate is a fraction, the numerator of which is
the sum of the account balances under the defined contribution
plan(s) of all Key Employees and the Present Value of accrued
benefits under the defined benefit plan(s) for all Key
Employees, and the denominator of which is the sum of the
account balances under the defined contribution plan(s) for
all employees and the Present Value of accrued benefits under
the defined benefit plans for all employees. Both the
numerator and denominator of the Top-heavy Ratio are adjusted
for any distribution of an account balance or an accrued
benefit (including those made from terminated plan(s) of the
Employer which would have been part of the required
Aggregation Group had such plan(s) not been terminated) made
in the five-year period ending on the determination date.
c) For purposes of (a) and (b) above, the value of account
balances and the Present Value of accrued benefits will be
determined as of the most recent valuation date that falls
within or ends with the 12-month period ending on the
determination date, except as provided in Code Section 416 and
the regulations thereunder for the first and second plan years
of a defined benefit plan. The account balances and accrued
benefits of an employee who is not a Key Employee but who was a
Key Employee in a prior year will be disregarded. The
calculation of the Top-heavy Ratio and the extent to which
distributions, rollovers and transfers during the five-year
period ending on the determination date are to be taken into
account, shall be determined according to the provisions of
Code Section 416 and regulations thereunder. The account
balances and accrued benefits of an individual who has
performed no service for the Employer during the five-year
period ending on the determination date shall be excluded from
the Top-heavy Ratio until the time the individual again
performs service for the Employer. Deductible employee
contributions will not be taken into account for purposes of
computing the Top-heavy Ratio. When aggregating plans, the
value of account balances and accrued benefits will be
calculated with reference to the determination dates that fall
within the same calendar year.
Account, as used in this definition, means the value of an employee's account
under one of the Employer's retirement plans on the latest valuation date. In
the case of a money purchase plan or target benefit plan, such value shall be
adjusted to include any contributions made for or by the employee after the
valuation date and on or before such determination date or due to be made as of
such determination date but not yet forwarded to the insurer or trustee. In
the case of a profit sharing plan, such value shall be adjusted to include any
contributions made for or by the employee after the valuation date and on or
before such determination date. During the first Year of any profit sharing
plan such adjustment in value shall include contributions made after such
determination date that are allocated as of a date in such Year. The
nondeductible employee contributions which an employee makes under a defined
benefit plan of the Employer shall be treated as if they were contributions
under a separate defined contribution plan.
Valuation Date means, as to this Plan, the last day of the last calendar month
ending in a Year.
Year means the Plan Year unless another year is specified by the Employer in a
separate written resolution in accordance with regulations issued by the
Secretary of the Treasury or his delegate.
67
<PAGE> 69
SECTION 10.03--MODIFICATION OF VESTING REQUIREMENTS.
If a Participant's Vesting Percentage determined under Article I is
not at least as great as his Vesting Percentage would be if it were determined
under a schedule permitted in Code Section 416, the following shall apply.
During any Year in which the Plan is a Top-heavy Plan, the Participant's
Vesting Percentage shall be the greater of the Vesting Percentage determined
under Article I or the schedule below.
<TABLE>
<CAPTION>
VESTING SERVICE NONFORFEITABLE
(whole years) PERCENTAGE
<S> <C>
Less than 2 0
2 20
3 40
4 60
5 80
6 or more 100
</TABLE>
The schedule above shall not apply to Participants who are not
credited with an Hour-of-Service after the Plan first becomes a Top-heavy
Plan. The Vesting Percentage determined above applies to all of the
Participant's Account resulting from Employer Contributions, including
Contributions the Employer makes before the TEFRA Compliance Date or when the
Plan is not a Top-heavy Plan.
If, in a later Year, this Plan is not a Top-heavy Plan, a
Participant's Vesting Percentage shall be determined under Article I. A
Participant's Vesting Percentage determined under either Article I or the
schedule above shall never be reduced and the election procedures of the
AMENDMENTS SECTION of Article IX shall apply when changing to or from the
schedule as though the automatic change were the result of an amendment.
The part of the Participant's Vested Account resulting from the
minimum contributions required pursuant to the MODIFICATION OF CONTRIBUTIONS
SECTION of Article X shall not be forfeited because of a period of reemployment
after benefit payments have begun.
SECTION 10.04--MODIFICATION OF CONTRIBUTIONS.
During any Year in which this Plan is a Top-heavy Plan, the Employer
shall make a minimum contribution or allocation on the last day of the Year for
each person who is a Non-key Employee on that day and who either was or could
have been an Active Participant during the Year. A Non-key Employee is not
required to have a minimum number of hours-of-service or minimum amount of
Compensation, or to have had any Elective Deferral Contributions made for him
in order to be entitled to this minimum. The minimum contribution or
allocation for such person shall be equal to the lesser of (a) or (b) below:
a) Three percent of such person's Compensation (as defined in
this article).
b) The "highest percentage" of Compensation (as defined in this
article) for such Year at which the Employer's contributions
are made for or allocated to any Key Employee. The highest
percentage shall be determined by dividing the Employer
Contributions made for or allocated to each Key Employee
during such Year by the amount of his Compensation (as defined
in this article), which is not more than the maximum set out
above, and selecting the greatest quotient (expressed as a
percentage). To determine the highest percentage, all of the
Employer's defined contribution plans within the Aggregation
Group shall be treated as one plan. The provisions of this
paragraph shall not
68
<PAGE> 70
apply if this Plan and a defined benefit plan of the Employer
are required to be included in the Aggregation Group and this
Plan enables the defined benefit plan to meet the requirements
of Code Section 401(a)(4) or Code Section 410.
If the Employer's contributions and allocations otherwise required
under the defined contribution plan(s) are at least equal to the minimum above,
no additional contribution or reallocation shall be required. If the
Employer's contributions and allocations are less than the minimum above and
Employer Contributions under this Plan are allocated to Participants, any
Employer Contributions (other than those which are allocated on the basis of
the amount made for such person) shall be reallocated to provide the minimum.
The remaining Contributions shall be allocated as provided in the preceding
articles of this Plan taking into account any amount which was reallocated to
provide the minimum. If the Employer's total contributions and allocations are
less than the minimum above after any reallocation provided above, the Employer
shall contribute the difference for the Year.
The minimum contribution or allocation applies to all of the
Employer's defined contribution plans in the aggregate which are Top-heavy
Plans. If an additional contribution or allocation is required to meet the
minimum above, it shall be provided in this Plan.
A minimum allocation under a profit sharing plan shall be made without
regard to whether or not the Employer has profits.
If a person who is otherwise entitled to a minimum contribution or
allocation above is also covered under a defined benefit plan of the Employer's
which is a Top-heavy Plan during that same Year, the minimum benefits for him
shall not be duplicated. The defined benefit plan shall provide an annual
benefit for him on, or adjusted to, a straight life basis of the lesser of (c)
two percent of his average pay multiplied by his years of service or (d) twenty
percent of his average pay. Average pay and years of service shall have the
meaning set forth in such defined benefit plan for this purpose.
For purposes of this section, any employer contribution made according
to a salary reduction or similar arrangement shall not apply before the first
Yearly Date in 1985. On and after the first Yearly Date in 1989, any such
employer contributions and employer contributions which are matching
contributions, as defined in Code Section 401(m), shall not apply in
determining if the minimum contribution requirement has been met, but shall
apply in determining the minimum contribution required. Forfeitures credited
to a Participant's Account are treated as employer contributions.
The requirements of this section shall be met without regard to
contributions under Chapter 2 of the Code (relating to tax on self-
employment), Chapter 21 of the Code (relating to Federal Insurance
Contributions Act), Title 11 of the Social Security Act or any other Federal or
state law.
SECTION 10.05--MODIFICATION OF CONTRIBUTION LIMITATION.
If the provisions of subsection (e) of the CONTRIBUTION LIMITATION
SECTION of Article III are applicable for any Limitation Year during which this
Plan is a Top-heavy Plan, the benefit limitations shall be modified. The
definitions of Defined Benefit Plan Fraction and Defined Contribution Plan
Fraction in the CONTRIBUTION LIMITATION SECTION of Article III shall be
modified by substituting "1.0" in lieu of "1.25." The optional denominator for
determining the Defined Contribution Plan Fraction shall be modified by
substituting "$41,500" in lieu of "$51,875." In addition, an adjustment shall
be made to the numerator of the Defined Contribution Plan Fraction. The
adjustment is a reduction of that numerator similar to the modification of the
Defined Contribution Plan Fraction described in the CONTRIBUTION LIMITATION
SECTION of Article III, and shall be made with respect to the last Plan Year
beginning before January 1, 1984.
69
<PAGE> 71
The modifications in the paragraph above shall not apply with respect
to a Participant so long as employer contributions, forfeitures or
nondeductible employee contributions are not credited to his account under this
or any of the Employer's other defined contribution plans and benefits do not
accrue for such Participant under the Employer's defined benefit plan(s), until
the sum of his Defined Contribution and Defined Benefit Plan Fractions is less
than 1.0.
70
<PAGE> 72
By executing this Plan, the Primary Employer acknowledges having
counseled to the extent necessary with selected legal and tax advisors
regarding the Plan's legal and tax implications.
Executed this 30th day of January, 1995.
OASIS RESIDENTIAL, INC.
By: R. K. GARRAWAY
---------------------------------
VICE PRESIDENT AND CONTROLLER
---------------------------------
Title
71
<PAGE> 73
FIRST AMENDMENT TO
THE OASIS RESIDENTIAL, INC. 401(K) RETIREMENT PLAN
Oasis Residential, Inc. (the "Employer") established the Oasis
Residential, Inc. 401(k) Retirement Plan (the "Plan") for the benefit of its
eligible employees, effective as of January 1, 1995.
In order to amend the Plan in certain respects, this First Amendment was
adopted by the Board of Directors of the Employer on January 29, 1996,
effective as of January 29, 1996.
1. The Introduction at page three of the Plan is hereby amended by
the addition of the following sentence at the end thereof:
The Plan is designed to invest in qualifying employer securities within
the meaning of ERISA Section 407(d)(5) and is intended to comply with the
provisions of Code Sections 401, 402(a), 404(a)(3) and other applicable
provisions of the Code, similar provisions of state law and ERISA, as
amended.
2. The definition of Investment Fund in Section 1.02 is hereby
amended to read in its entirety as follows:
INVESTMENT FUND means the total assets held for the purpose of providing
benefits for Participants including those assets invested in the Employer
Stock Investment Fund. These funds result from Contributions made under the
Plan.
3. Section 1.02 is hereby amended by adding the following
definitions to the end thereof:
EMPLOYER STOCK means any authorized class of capital stock which constitutes
"qualifying employer securities" as that term is defined in ERISA Section
407(d)(5).
EMPLOYER STOCK INVESTMENT FUND means the Investment Fund which is invested
in Employer Stock, as elected by Participants pursuant to Section 4.02.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended.
RULES OF THE PLAN means the rules adopted by the Plan Administrator for the
administration, interpretation or application of the Plan.
4. Section 4.02 is hereby added to the Plan to read in its
entirety as follows:
SECTION 4.02--INVESTMENT OF CONTRIBUTIONS IN EMPLOYER STOCK.
A Participant may elect to have the value of the Contributions to his
Account invested in the Employer Stock Investment Fund as set forth in the
Rules of the Plan.
<PAGE> 74
Employer Stock shall be valued at its fair market value as of
the last day of the last calendar month of the Plan Year and, at the
discretion of the Trustee, may be valued more frequently; provided,
however, that Employer Stock shall be valued on each day on which such
Employer Stock is publicly traded on a stock exchange or NASDAQ (or any
successor quotation system).
5. Sections 4.03, 4.04, 4.05 and 4.06 are hereby added to
the Plan to read in their entirety as follows:
SECTION 4.03--VOTING RIGHTS
Except as otherwise required by ERISA, the Code and applicable
Treasury Regulations, all voting rights of shares of Employer Stock held
in the Trust Fund shall be exercised by the Trustee only as directed by
the Plan Administrator, the Participants or their Beneficiaries in
accordance with the following provisions of this Section 4.03:
(a) With respect to all corporate matters submitted
to the Employer's shareholders, all shares of Employer Stock
attributable to Participants' interests in the Employer Stock
Investment Fund shall be voted in accordance with the directions
of such Participants as given to the Trustee. Each Participant
shall be entitled to direct the voting only of the shares of
Employer Stock (including fractional interests in shares of
Employer Stock) attributable to his interest in the Employer
Stock Investment Fund. If this subsection 4.03(a) applies to
shares of Employer Stock attributable to a deceased
Participant's interest in the Employer Stock Investment Fund,
such Participant's Beneficiary shall be entitled to direct the
voting with respect to such shares as if such Beneficiary were
the Participant.
(b) At least thirty days before each annual or
special shareholders' meeting of the Employer (or, if such
schedule cannot be met, as early as practicable before such
meeting), the Trustee shall furnish to each Participant (and
each Beneficiary in the case of a deceased Participant) a copy
of the proxy solicitation material sent generally to
shareholders, together with a form requesting confidential
instructions on how the shares of Employer Stock attributable to
the Participant's interest (or the Beneficiary's interest in the
case of a deceased Participant) in the Employer Stock Investment
Fund (including fractional shares of Employer Stock to 1/1000th
of a share) are to be voted. Upon timely receipt of such
instructions, the Trustee (after combining votes of fractional
shares of Employer Stock to give effect to the greatest extent
possible to Participants' instructions (and Beneficiaries'
instructions in the case of deceased Participants) shall vote
the shares of Employer Stock as instructed. The instructions
received by the Trustee from Participants (and Beneficiaries in
the case
<PAGE> 75
of deceased Participants) shall be held by the Trustee in strict
confidence and shall not be divulged or released to any person
including officers or Employees of the Employer, or of any other
company. Neither the Plan Administrator, the Trustee nor the
Employer shall make recommendations to Participants (or Beneficiaries
in the case of deceased Participants) on whether to vote or how to vote,
other than recommendations contained in proxy and other materials that
are generally distributed to all shareholders of the Employer with
respect to such vote.
(c) The Trustee shall vote shares of Employer Stock with
respect to which voting instructions are not received only as the Plan
Administrator directs, in its sole discretion, after the Plan
Administrator determines such action to be in the best interest of the
Participants and their Beneficiaries.
SECTION 4.04--TRUSTEE ACTIONS DURING TENDER OFFER
In the event of any transaction involving an offer to purchase
Employer Stock, with respect to which there has been filed with the Securities
and Exchange Commission ("SEC") a Tender Offer Statement pursuant to
Section 14(d)(1) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or an Issuer Tender Offer Statement pursuant to
Section 13(e)(1) of the Exchange Act (or any successor to either of them)
or any other similar transaction (such transaction referred to herein as a
"Tender Offer" and the date of filing with the SEC referred to herein as
the "Filing Date"), paragraphs (a) through (f) shall apply.
(a) The Employer shall promptly, and at its own expense, engage
the services of an Outside Independent Plan Administrator ("OIPA")
experienced in administration of like plans. the OIPA shall, on a
standby basis, perform those functions (and only those functions)
which are set forth in paragraphs (b), (c) and (f) and which are
necessary to preserve the strict confidentiality of (i) the
instructions received from Participants (and Beneficiaries in the
case of deceased participants) by the Trustee and (ii) any other
information which would reveal whether or not shares attributable
to Participants' interests (and Beneficiaries' interests in the
case of deceased Participants) in the Employer Stock Investment
Fund have or have not been tendered.
(b) The Participants (and Beneficiaries in the case of
deceased Participants) shall direct the investment of the proceeds
of the sale of any Employer Stock pursuant to the Tender Offer.
These proceeds shall not be reinvested in Employer Stock except
as to Participants (and Beneficiaries in the case of deceased
Participants) who so elect, acting through the OIPA.
<PAGE> 76
(c) (i) The Trustee shall seek confidential
written instructions from each Participant (and each
Beneficiary in the case of a deceased Participant) as to
whether the Employer Stock attributable to the
Participant's interest (or Beneficiary's interest in the
case of a deceased Participant) in the Employer Stock
Investment Fund should be tendered pursuant to the
Tender Offer.
(ii) the Trustee shall distribute to each
such Participant (and Beneficiary in the case of a
deceased Participant) copies of all relevant material
filed with the SEC with respect to the Tender Offer. The
filing party shall pay the reasonable expenses of the
Trustee in connection therewith. The Trustee shall have
the power to require that payment for such distributions
of materials be made in advance.
(iii) The identities of the Participants (and
Beneficiaries in the case of deceased Participants) and
the amount of Employer Stock attributable to their
interest in the Employer Stock Investment Fund, shall be
determined from the list of Participants (and
Beneficiaries) delivered to the Trustee by the Plan
Administrator or, if an OIPA has previously been
appointed under this Section and if the Plan
Administrator does not have such information because of
the confidentiality rules contained herein, by that
OIPA. The Plan Administrator or OIPA, as applicable,
shall take all such reasonable steps as may be necessary
to provide the Trustee with information which is as
current as possible.
(d) Each participant (and each Beneficiary in the
case of a deceased Participant) shall be entitled to
instruct the Trustee, with respect to the Employer Stock
attributable to his interest in the Employer Stock
Investment Fund, either
(i) to tender all such shares of Employer
Stock, or
(ii) not to tender any shares of such
Employer Stock, and the Trustees shall follow such instructions.
(e) The Trustee shall make such follow-up efforts,
through additional mailings, bulletins to be posed in
areas where notices to Participants are normally posted
by the Employer and otherwise, as it finds to be
reasonable under the time constraints and other
circumstances at hand, to obtain instructions from
Participants (and Beneficiaries in the case of deceased
Participants) not otherwise responding to the Trustee's
request for instructions. The Trustee shall vote shares
of Employer Stock with respect to which voting
instructions are not received only as the Plan
Administrator directs in its sole
<PAGE> 77
discretion, after the Plan Administrator determines such action to be
in the best interests of the Participants and their Beneficiaries.
(f) If some but less than all of the Employer Stock in
the Employer Stock Investment Fund is tendered and sold or exchanged
by the Trustee, the OIPA shall thereafter perform all functions with
respect to all shares of Employer Stock in the Employer Stock
Investment Fund as constituted on or after the Filing Date. Records
and administration for all Participant investments (and all
Beneficiary investments in the case of a deceased Participant) in
the Employer Stock Investment Fund after the Filing Date shall be
maintained by the Plan Administrator unless that duty has also been
delegated to the OIPA. At such time as events (e.g., termination
of the Plan or placement of all Plan assets in investments other than
Employer Stock) occur which obviate the need for the OIPA in order
to preserve confidentiality, the services of the OIPA may be
terminated.
SECTION 4.05 -- TRUSTEES POWERS WITH RESPECT TO TENDER OFFER
The Trustee's functions under Section 4.04 are and shall be solely
custodial and ministerial. The Trustee shall have no powers or duties with
respect to a Tender Offer except as expressly set forth herein and
specifically shall have no power or duty
(a) to manage or to control the assets of the Plan in
connection with any Tender Offer.
(b) to evaluate any Tender Offer.
(c) to advise any Participant (or any Beneficiary in
the case of a deceased Participant) as to the fairness or other
features of a Tender Offer,
(d) to tender or vote any Employer Stock held under
the Plan, or
(e) to monitor or police the activities of the tendering
entity or the Employer in promoting or resisting any Tender Offer;
provided, however, that if the Trustee becomes aware of any such
activity which reasonably appears to the Trustee to be coercive or
misleading in any material way to Participants (and Beneficiaries
in the case of deceased Participants), the Trustee shall promptly
demand that the offending party take appropriate corrective action.
The Trustee shall, in the event of refusal or failure of such party
to take such corrective action as the Trustee reasonably finds
appropriate, communicate with Participants (and Beneficiaries in
the case of deceased Participants) as to the matter.
<PAGE> 78
SECTION 4.06--CONFIDENTIALITY OF PARTICIPANT DIRECTIONS
Information relating to the purchase, holding and sale of Employer Stock
held in the Employer Stock Investment Fund and the exercise of voting,
tender and similar rights with respect to such Employer Stock by
Participants and Beneficiaries, shall be maintained in accordance with
procedures which are designed to safeguard the confidentiality of such
information, except to the extent necessary to comply with applicable law.
The Plan Administrator shall be responsible for ensuring that such
procedures are sufficient to safeguard the confidentiality of such
information and that such procedures are being followed. the Plan
Administrator shall have the authority to appoint an OIPA in such
circumstances which require the appointment of an independent fiduciary as
described in 29 CFR Section 2550.404c-1(d)(2)(ii)(E)(4)(ix).
6. The Plan is hereby amended by the addition of the following
Section 6:
SECTION 6.05--FORM OF DISTRIBUTIONS
Notwithstanding any provisions of the Plan to the contrary, all
distributions and withdrawals under the Plan shall be paid to a Participant,
his spouse or his Beneficiary, as applicable, in cash.
Executed at Henderson, Nevada, this 29th day of January, 1996.
OASIS RESIDENTIAL, INC.
By /s/ Allan O. Hunter
-------------------------------
Officer
6
<PAGE> 1
Exhibit 5.1
HERBERT L. WALDMAN
June 21, 1996
Oasis Residential, Inc.
4041 East Sunset Road
Henderson, NV 89014
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
In connection with the registration of 20,000 shares of Common Stock,
par value $.01 per share (the "Shares"), under the Securities Act of 1933, as
amended (the "Act"), by Oasis Residential, Inc., a Nevada corporation (the
"Company"), on Form S-8 (the "Registration Statement") filed with the Securities
and Exchange Commission (the "Commission"), you have requested my opinion with
respect to the matters set forth below.
In my capacity as your counsel in connection with such registration, I
am familiar with the proceedings taken by the Company in connection with the
authorization, issuance and sale of the Shares. In addition, I have made such
legal and factual examinations and inquiries, including an examination of
originals or copies certified or otherwise identified to my satisfaction of such
documents, corporate records and instruments, as I have deemed necessary or
appropriate for purposes of this opinion.
In my examination, I have assumed the genuineness of all signatures,
the authenticity of all documents submitted to me as originals, and the
conformity to authentic original documents of all documents submitted to me as
copies.
I am opining herein as to the effect on the subject transaction only of
the General Corporation Law of the State of Nevada, and I express no opinion
with respect to the applicability thereto, or the effect thereon, of any other
laws, or as to any matters of municipal law or the laws of any other local
agencies within the state.
Subject to the foregoing, it is my opinion that the Shares have been
duly authorized, and upon issuance pursuant to the terms of the Oasis
Residential, Inc. 401(k) Retirement Plan, will be validly issued, fully paid and
nonassessable.
I consent to your filing this opinion as an exhibit to the Registration
Statement and to the reference to my name contained under the heading "Legal
Matters".
Very truly yours,
/s/ Herbert L. Waldman
------------------------------
HERBERT L. WALDMAN, ESQ.
HLW/pw
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-8 of our report dated January 26, 1996, on our audits of the
consolidated financial statements and financial statement schedule of Oasis
Residential, Inc. as of December 31, 1995 and 1994, and for the years ended
December 31, 1995, 1994, and 1993, which report is included in the Company's
Annual Report on Form 10-K.
COOPERS & LYBRAND L.L.P.
San Francisco, California
June 26, 1996
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Oasis Residential, Inc. on Form S-8 of our report dated June 14, 1996, on our
audit of the financial statements and financial statement schedules of the
Oasis Residential, Inc. 401(k) Retirement Plan as of December 31, 1995 and for
the year then ended, which report is included in this Annual Report on
Form 11-K.
COOPERS & LYBRAND L.L.P.
San Francisco, California
June 26, 1996
