As filed with the Securities and Exchange Commission December 13, 1996
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CHARTWELL RE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 41-1652573
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Four Stamford Plaza, P. O. Box 120043
Stamford, Connecticut 06912-0043
(Address of registrant's principal executive offices)
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CHARTWELL RE CORPORATION 401(k)
PROFIT SHARING PLAN
(Full title of the plan)
KATHLEEN M. CARROLL
Vice President and General Counsel
CHARTWELL RE CORPORATION
Four Stamford Plaza, P. O. Box 120043
Stamford, Connecticut 06912-0043
(Name and address of agent for service)
(203) 705-2530
(Telephone number, including area code,
of agent for service) Copies
to:
PETER R. O'FLINN, ESQ.
LEBOEUF, LAMB, GREENE & MACRAE, L.L.P.
125 West 55th Street
New York, New York 10019
(212) 424-8000
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CALCULATION OF REGISTRATION FEE
Title of Proposed maximum Proposed maximum Amount of
securities to Amount to be offering price aggregate offering registration
be registered* registered per unit** price** fee
- --------------------------------------------------------------------------------
Common Stock, 100,000 shares $26.125 $2,612,500 $900.86
par value
$0.01 per share
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*In addition, pursuant to Rule 416(C) under the Securities Act of 1933, this
registration statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the employee benefit plan described herein.
**Determined on the basis of the average of the reported high and low sales
prices on December 9, 1996 in accordance with Rule 457(c) under the Securities
Act of 1933 solely for the purpose of calculating the registration fee pursuant
to Rule 457(h).
================================================================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents, which have heretofore been filed by Chartwell
Re Corporation (the "Company" or "Chartwell") with the Commission pursuant to
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are hereby
incorporated by reference in this Registration Statement:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995.
2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1996, June 30, 1996 and September 30, 1996.
3. The Company's Current Reports on Form 8-K dated October 18, 1996
and November 20, 1996.
4. The description of the Company's common stock, par value $0.01 per
share (the "Common Stock"), contained in the Company's Registration Statement on
Form S-1, Registration No. 333-678, filed with the Commission on January 26,
1996, as amended on February 5, 1996, February 29, 1996 and March 4, 1996, and
as updated by pertinent information furnished in subsequent reports filed
pursuant to Section 13 of the Exchange Act.
An Annual Report on Form 11-K for the Chartwell Re Corporation 401(k)
Profit Sharing Plan (the "Plan") for its fiscal year ended December 31, 1995 is
being filed pursuant to Section 15(d) of the Exchange Act concurrently with the
filing of this Registration Statement.
All documents filed by the Company and the Plan with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the
filing of a post-effective amendment that indicates that all securities offered
hereby have been sold or that deregisters all securities then remaining unsold,
shall be deemed to be incorporated by reference in this Registration Statement
and to be a part hereof from the date of 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 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.
The Company hereby undertakes to provide without charge to each
participant in the Plan, on the written or oral request of any such person, a
copy of any or all of the documents referred to above which have been or may be
incorporated in this Registration Statement by reference, other than exhibits to
such documents (unless such exhibits are specifically incorporated by reference
in such documents). Requests for such copies should be directed to Kathleen M.
Carroll, Vice President and General Counsel, Chartwell Re Corporation, Four
Stamford Plaza, P. O. Box 120043, Stamford, Connecticut 06912-0043, telephone
number: (203) 705-2530.
Item 4. Description of Securities.
Not applicable.
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<PAGE>
Item 5. Interests of Named Experts and Counsel.
The financial statements and schedules of the Company, which are
incorporated herein by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1995, have been audited by Deloitte & Touche
LLP, independent public accountants, as indicated in their reports with respect
thereto. Such financial statements and schedules are included herein in reliance
upon the authority of said firm as experts in accounting and auditing in giving
said reports. Said firm is not employed by the Company on a contingent fee basis
and has no ownership or other interest in the Company or a subsidiary of the
Company.
Item 6. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of Delaware
grants each corporation thereunder, such as the Company, the power to indemnify
directors and officers under certain circumstances. The Company's Amended and
Restated By-Laws (as currently in effect) provide for indemnification of
directors and officers to the fullest extent permitted by law.
Section 145 of the General Corporation Law of the State of Delaware
provides that under certain circumstances a corporation may indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, 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
its request in such capacity in another corporation or business association,
against expenses (including attorney's 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.
The Amended and Restated By-Laws of the Company provides that (I) the
Company shall indemnify any person made, or threatened to be made, a party to
any action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director or officer of
the Company or is or was a director or officer of the Company serving at its
request as a director, officer, employee or agent of another enterprise and (ii)
the Company shall pay the expenses, including attorneys' fees, reasonably
incurred by a director or officer in connection with such action, suit or
proceeding if such director or officer acted in good faith and in a manner such
director or officer reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
Company shall pay such expenses incurred by a director or officer in defending
or investigating a threatened or pending action, suit or proceeding, in advance
of the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it is ultimately determined that the director or officer is not entitled to be
indemnified with respect to such amount by the Company. No indemnification shall
be made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the Company, unless and only to the extent
that the Court of Chancery of the State of Delaware, or the court in which such
action or suit was brought, shall determine upon application that, despite the
adjudication of liability, but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.
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<PAGE>
Policies of insurance are maintained under which the Company's
directors and officers are insured, within the limits and subject to the
limitations of the policies, against certain expenses in connection with the
defense of actions, suits or proceedings, and certain liabilities which might be
imposed as a result of such actions, suits or proceedings, to which they are
parties by reason of being or having been such directors or officers.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit No.
4(a) Restated Certificate of Incorporation of the Company, as amended
(incorporated by reference to Exhibit 3.1 to the Company's
Registration Statement on Form S-1(File No. 333-678))
4(b) Amended and Restated By-laws of the Company, as amended
(incorporated by reference to Exhibit 3.2 to the Company's
Registration Statement on Form S-1 File No. 333-678))
4(c) Chartwell Re Corporation 401(k) Profit Sharing Plan, as amended
23 Consent of Deloitte & Touche LLP
24 Powers of Attorney (see signature pages)
The Company undertakes that it will submit or has submitted the Plan
and any amendment thereto to the Internal Revenue Service (the "IRS") in a
timely manner and has made or will make all changes required by the IRS in order
to qualify the Plan under Section 401 of the Internal Revenue Code.
Item 9. Undertakings.
The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(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;
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<PAGE>
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs (1)(I) and (1)(ii) do not apply if the
Registration Statement is on Form S-3 or Form S-8 and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Company pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new Registration Statement 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 that remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Company's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and each
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Company pursuant to the provisions described under Item 6 above, or
otherwise, the Company has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in said Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in said Act and will
be governed by the final adjudication of such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Stamford, State of Connecticut, on the 10th day
of December, 1996.
CHARTWELL RE CORPORATION
By: /s/ Richard E. Cole
-----------------------
Richard E. Cole
Chairman of the Board of Directors
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each officer and director of
Chartwell Re Corporation whose signature follows constitutes and appoints each
of RICHARD E. COLE, STEVEN J. BENSINGER, CHARLES E. MEYERS and KATHLEEN M.
CARROLL as such person's true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for such person and in such person's
name, place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) of and supplements to this Registration
Statement on Form S-8, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto each such attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises to all intents and purposes and as fully as
such person might or could do in person, hereby ratifying and confirming all
that each such attorney-in-fact and agent, or a substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date or dates indicated.
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<PAGE>
Signature Date
- --------- ----
/s/ Richard E. Cole December 10, 1996
- -------------------------------
Richard E. Cole
Chairman of the Board and CEO
(principal executive officer)
/s/ Steven J. Bensinger December 10, 1996
- -------------------------------
Steven J. Bensinger
Director
/s/ Jacques Q. Bonneau December 10, 1996
- -------------------------------
Jacques Q. Bonneau
Director
/s/ David J. Callard December 10, 1996
- -------------------------------
David J. Callard
Director
/s/ Robert M. DeMichele December 10, 1996
- -------------------------------
Robert M. DeMichele
Director
/s/ Greg S. Feldman December 10, 1996
- -------------------------------
Greg S. Feldman
Director
/s/ Stephen L. Green December 10, 1996
- -------------------------------
Stephen L. Green
Director
/s/ Frank E. Grzelecki December 10, 1996
- -------------------------------
Frank E. Grzelecki
Director
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<PAGE>
Signature Date
- --------- ----
/s/ Charles E. Meyers December 10, 1996
- -------------------------------
Charles E. Meyers
Senior Vice President and
Chief Financial Officer
(principal financial officer)
/s/ William R. Miller December 10, 1996
- -------------------------------
William R. Miller
Director
/s/ Lunsford S. Richardson December 10, 1996
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Lunsford Richardson, Jr.
Director
/s/ Richard B. Primerano December 10, 1996
- -------------------------------
Richard B. Primerano
Vice President and Controller
(principal accounting officer)
/s/ Stuart S. Richardson December 10, 1996
- -------------------------------
Stuart S. Richardson
Director
/s/ John Sagan December 10, 1996
- -------------------------------
John Sagan
Director
/s/ Bruce W. Schnitzer December 10, 1996
- -------------------------------
Bruce W. Schnitzer
Director
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<PAGE>
Signature Date
- --------- ----
/s/ Bryan Kellett December 10, 1996
- ------------------------------
Bryan Kellett
Director
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<PAGE>
Pursuant to the requirements of the Securities Act of 1933, the
Chartwell Re Corporation 401(k) Profit Sharing Plan has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Stamford, State of Connecticut on this 10th
day of December, 1996.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the Chartwell Re Corporation
401(k) Profit Sharing Plan, and each of the undersigned persons, hereby
constitutes and appoints each of RICHARD E. COLE and STEVEN J. BENSINGER, as
its/his/her true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution for it/him/her and in its/his/her name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) of and supplements to this Registration Statement on
Form S-8 and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
each such attorney-in-fact and agent full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about the
premises to all intents and purposes and as fully as the said Plan itself and
each said person might or could do in person, hereby ratifying and confirming
all that each such attorney-in-fact and agent, or a substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
CHARTWELL RE CORPORATION
401(k) PROFIT SHARING PLAN
By: /s/ Kathleen M. Carroll ) Members of the Administration
-----------------------------) Committee for the Chartwell Re
Kathleen M. Carroll, Trustee ) Corporation 401(k) Profit Sharing Plan
)
)
By: /s/ Charles E. Meyers )
-----------------------------)
Charles E. Meyers, Trustee )
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<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
Members of the Administration Committee for the Chartwell Re Corporation 401(k
Profit Sharing Plan:
Signature Date
- --------- ----
By: /s/ Kathleen M. Carroll December 10, 1996
------------------------------
Kathleen M. Carroll, Trustee
By: /s/ Charles E. Meyers December 10, 1996
-------------------------------
Charles E. Meyers, Trustee
-10-
<PAGE>
EXHIBIT INDEX
Exhibit
No. Page No.
4(a) Restated Certificate of Incorporation of the Company, as amended
(incorporated by reference to Exhibit 3.1 to the Company's
Registration Statement on Form S-1 (File No. 333-678))
4(b) Amended and Restated By-laws of the Company, as amended (incorporated
by reference to Exhibit 3.2 to the Company's Registration Statement on
Form S-1 (File No. 333-678))
4(c) Chartwell Re Corporation 401(k) Profit Sharing Plan, as amended
23 Consent of Deloitte & Touche LLP
24 Powers of Attorney (see signature pages)
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CHARTWELL RE CORPORATION
401(k) PROFIT SHARING PLAN
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
TOP HEAVY AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS . . . . . . . . . . . . . . . . . . . .24
2.2 DETERMINATION OF TOP HEAVY STATUS . . . . . . . . . . . . . . . . .24
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER . . . . . . . . . . . .26
2.4 DESIGNATION OD ADMINISTRATIVE AUTHORITY . . . . . . . . . . . . . .27
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES . . . . . . . . . . .27
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR . . . . . . . . . . . . . . 27
2.7 RECORDS AND REPORTS . . . . . . . . . . . . . . . . . . . . . . . .28
2.8 APPOINTMENT OF ADVISORS . . . . . . . . . . . . . . . . . . . . . .28
2.9 INFORMATION FROM EMPLOYER . . . . . . . . . . . . . . . . . . . . 28
2.10 PAYMENT OF EXPENSES . . . . . . . . . . . . . . . . . . . . . . . .28
2.11 MAJORITY ACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.12 CLAIMS PROCEDURE . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.13 CLAIMS REVIEW PROCEDURE . . . . . . . . . . . . . . . . . . . . . .29
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY . .. . . . . . . . . . . . . . . . . . . 29
3.2 APPLICATION FOR PARTICIPATION . . . . . . . . . . . . . . . . . . .29
3.3 EFFECTIVE DATE OF PARTICIPATION . . . . . . . . . . . . . . . . . .29
3.4 DETERMINATION OF ELIGIBILITY . . . . . . . . . . . . . . . . . . . 38
3.5 TERMINATION OF ELIGIBILITY . . . . . . . . . . . . . . . . . . . . 30
3.6 OMISSION OF ELIGIBLE EMPLOYEE . . . . . . . . . . . . . . . . . . .30
3.7 INCLUSION OF INELIGIBLE EMPLOYEE . . . . . . . . . . . . . . . . . 30
3.8 ELECTION NOT TO PARTICIPATE . . . . . . . . . . . . . . . . . . . .30
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION . . . . . . . . . 30
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION . . . . . . . . . . . . . .31
4.3 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION . . . . . . . . . . . .33
4.4 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS. . . . . . . .34
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS. . . . . . . . . . . . . . . . . .37
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS. . . . . . . . . . .38
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS. . . . . . . . . . . . . . . .39
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS. . . . . . . . .41
4.9 MAXIMUM ANNUAL ADDITIONS. . . . . . . . . . . . . . . . . . . . . .43
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS. . . . . . . . . . . . . 45
4.11 TRANSFERS FROM QUALIFIED PLANS. . . . . . . . . . . . . . . . . . .46
4.12 DIRECTED INVESTMENT ACCOUNT. . . . . . . . . . . . . . . . . . . . 47
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND. . . . . . . . . . . . . . . . . . . . 47
5.2 METHOD OF VALUATION. . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT. . . . . . . . . . . . . 48
6.2 DETERMINATION OF BENEFITS UPON DEATH. . . . . . . . . . . . . . . .48
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY. . . . . . . . . .49
6.4 DETERMINATION OF BENEFITS UPON TERMINATION. . . . . . . . . . . . .49
6.5 DISTRIBUTION OF BENEFITS. . . . . . . . . . . . . . . . . . . . . .51
6.6 DISTRIBUTION OF BENEFITS UPON DEATH. . . . . . . . . . . . . . . . 52
6.7 TIME OF SEGREGATION OR DISTRIBUTION. . . . . . . . . . . . . . . . 53
6.8 DISTRIBUTION FOR MINOR BENEFICIARY. . . . . . . . . . . . . . . . .54
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN. . . . . . . . . . .54
6.10 PRE-RETIREMENT DISTRIBUTION. . . . . . . . . . . . . . . . . . . . 54
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP. . . . . . . . . . . . . . . . . 54
6.12 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION. . . . . . . . . . 55
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE. . . . . . . . . . . . . . . 55
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE. . . . . . . . . . . . 56
7.3 OTHER POWERS OF THE TRUSTEES. . . . . . . . . . . . . . . . . . . .56
7.4 LOANS TO PARTICIPANTS. . . . . . . . . . . . . . . . . . . . . . . 58
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS. . . . . . . . . . . . . .58
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES. . . . . . . . . . . 58
7.7 ANNUAL REPORT OF THE TRUSTEE. . . . . . . . . . . . . . . . . . . .59
7.8 AUDIT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE. . . . . . . . . . .59
7.10 TRANSFER OF INTEREST. . . . . . . . . . . . . . . . . . . . . . . .60
7.11 DIRECT ROLLOVER. . . . . . . . . . . . . . . . . . . . . . . . . . 60
7.12 EMPLOYER SECURITIES AND REAL PROPERTY. . . . . . . . . . . . . . . 61
ARTICLE VIII
AMENDMENT, TERMINATION AND MERGERS
8.1 AMENDMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.2 TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
8.3 MERGER OR CONSOLIDATION. . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE IX
MISCELLANEOUS
9.1 PARTICIPANT'S RIGHTS. . . . . . . . . . . . . . . . . . . . . . . .62
9.2 ALIENATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . .62
9.3 CONSTRUCTION OF PLAN. . . . . . . . . . . . . . . . . . . . . . . .63
9.4 GENDER AND NUMBER. . . . . . . . . . . . . . . . . . . . . . . . . 63
9.5 LEGAL ACTION. . . . . . . . . . . . . . . . . . . . . . . . . . . .63
9.6 PROHIBITION AGAINST DIVERSION OF FUNDS. . . . . . . . . . . . . . 63
9.7 BONDING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
9.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE. . . . . . . . . . . . 64
9.9 INSURER'S PROTECTIVE CLAUSE. . . . . . . . . . . . . . . . . . . . 64
9.10 RECEIPT AND RELEASE FOR PAYMENTS. . . . . . . . . . . . . . . . . .64
9.11 ACTION BY THE EMPLOYER. . . . . . . . . . . . . . . . . . . . . . .64
9.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY. . . . . . . . .64
9.13 HEADINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64
9.14 APPROVAL BY INTERNAL REVENUE SERVICE. . . . . . . . . . . . . . . .65
9.15 UNIFORMITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . .65
ARTICLE X
PARTICIPATING EMPLOYERS
10.1 ADOPTION BY OTHER EMPLOYERS. . . . . . . . . . . . . . . . . . . . 65
10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS. . . . . . . . . . . . . . 65
10.3 DESIGNATION OF AGENT. . . . . . . . . . . . . . . . . . . . . . . .66
10.4 EMPLOYEE TRANSFERS. . . . . . . . . . . . . . . . . . . . . . . . .66
10.5 PARTICIPATING EMPLOYER'S CONTRIBUTION. . . . . . . . . . . . . . . 66
10.6 AMENDMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
10.7 DISCONTINUANCE OF PARTICIPATION. . . . . . . . . . . . . . . . . . 66
10.8 ADMINISTRATOR'S AUTHORITY. . . . . . . . . . . . . . . . . . . . . 67
<PAGE>
CHARTWELL RE CORPORATION
401(k) PROFIT SHARING PLAN
THIS AGREEMENT, hereby made and entered into this
1st day of January, 1994, by and between Chartwell Re Corporation (herein
referred to as the "Employer") and Floyd Radach (herein referred to as the
"Trustee").
W I T N E S S E T H:
WHEREAS, the Employer heretofore established a Profit
Sharing Plan and Trust effective March 6, 1992, (hereinafter
called the "Effective Date") known as Chartwell Re Corporation
401(k) Profit Sharing Plan (herein referred to as the "Plan") in
recognition of the contribution made to its successful operation
by its employees and for the exclusive benefit of its eligible
employees; and
WHEREAS, under the terms of the Plan, the Employer has
the ability to amend the Plan, provided the Trustee joins in such
amendment if the provisions of the Plan affecting the Trustee are
amended;
NOW, THEREFORE, effective March 6, 1992, except as
otherwise provided, the Employer and the Trustee in accordance
with the provisions of the Plan pertaining to amendments thereof,
hereby amend the Plan in its entirety and restate the Plan to
provide as follows:
ARTICLE I
DEFINITIONS
1.1 "Act" means the Employee Retirement Income Security Act
of 1974, as it may be amended from time to time.
1.2 "Administrator" means the person or entity designated
by the Employer pursuant to Section 2.4 to administer the Plan on
behalf of the Employer.
1.3 "Affiliated Employer" means any corporation which is a
member of a controlled group of corporations (as defined in Code
Section 414(b)) which includes the Employer; any trade or
business (whether or not incorporated) which is under common
control (as defined in Code Section 414(c)) with the Employer;
any organization (whether or not incorporated) which is a member
of an affiliated service group (as defined in Code Section
414(m)) which includes the Employer; and any other entity
required to be aggregated with the Employer pursuant to
Regulations under Code Section 414(o).
1.4 "Aggregate Account" means, with respect to each
Participant, the value of all accounts maintained on behalf of a
Participant, whether attributable to Employer or Employee
contributions, subject to the provisions of Section 2.2.
1.5 "Anniversary Date" means December 31st.
1.6 "Beneficiary" means the person to whom the share of a
deceased Participant's total account is payable, subject to the
restrictions of Sections 6.2 and 6.6.
1.7 "Code" means the Internal Revenue Code of 1986, as
amended or replaced from time to time.
1.8 "Compensation" with respect to any Participant means
such Participant's wages as defined in Code Section 3401(a) and
all other payments of compensation by the Employer (in the course
of the Employer's trade or business) for a Plan Year for which
the Employer is required to furnish the Participant a written
statement under Code Sections 6041(d), 6051(a)(3) and 6052.
Compensation must be determined without regard to any rules under
Code Section 3401(a) that limit the remuneration included in
wages based on the nature or location of the employment or the
services performed (such as the exception for agricultural labor
in Code Section 3401(a)(2)).
For purposes of this Section, the determination of
Compensation shall be made by:
(a) including amounts which are contributed by
the Employer pursuant to a salary reduction agreement
and which are not includible in the gross income of the
Participant under Code Sections 125, 402(e)(3), 402(h),
403(b) or 457, and Employee contributions described in
Code Section 414(h)(2) that are treated as Employer
contributions.
For a Participant's initial year of participation,
Compensation shall be recognized for the entire Plan Year.
Compensation in excess of $200,000 shall be
disregarded. Such amount shall be adjusted at the same time and
in such manner as permitted under Code Section 415(d), except
that the dollar increase in effect on January 1 of any calendar
year shall be effective for the Plan Year beginning with or
within such calendar year and the first adjustment to the
$200,000 limitation shall be effective on January 1, 1990. For
any short Plan Year the Compensation limit shall be an amount
equal to the Compensation limit for the calendar year in which
the Plan Year begins multiplied by the ratio obtained by dividing
the number of full months in the short Plan Year by twelve (12).
In applying this limitation, the family group of a Highly
Compensated Participant who is subject to the Family Member
aggregation rules of Code Section 414(q)(6) because such
Participant is either a "five percent owner" of the Employer or
one of the ten (10) Highly Compensated Employees paid the
greatest "415 Compensation" during the year, shall be treated as
a single Participant, except that for this purpose Family Members
shall include only the affected Participant's spouse and any
lineal descendants who have not attained age nineteen (19) before
the close of the year. If, as a result of the application of such
rules the adjusted $200,000 limitation is exceeded, then the
limitation shall be prorated among the affected Family Members in
proportion to each such Family Member's Compensation prior to the
application of this limitation, or the limitation shall be
adjusted in accordance with any other method permitted by
Regulation.
If, as a result of such rules, the maximum "annual
addition" limit of Section 4.9(a) would be exceeded for one or
more of the affected Family Members, the prorated Compensation of
all affected Family Members shall be adjusted to avoid or reduce
any excess. The prorated Compensation of any affected Family
Member whose allocation would exceed the limit shall be adjusted
downward to the level needed to provide an allocation equal to
such limit. The prorated Compensation of affected Family Members
not affected by such limit shall then be adjusted upward on a
pro rata basis not to exceed each such affected Family Member's
Compensation as determined prior to application of the Family
Member rule. The resulting allocation shall not exceed such
individual's maximum "annual addition" limit. If, after these
adjustments, an "excess amount" still results, such "excess
amount" shall be disposed of in the manner described in Section
4.10(a) pro rata among all affected Family Members.
For purposes of this Section, if the Plan is a plan
described in Code Section 413(c) or 414(f) (a plan maintained by
more than one Employer), the $200,000 limitation applies
separately with respect to the Compensation of any Participant
from each Employer maintaining the Plan.
If, in connection with the adoption of this amendment
and restatement, the definition of Compensation has been
modified, then, for Plan Years prior to the Plan Year which
includes the adoption date of this amendment and restatement,
Compensation means compensation determined pursuant to the Plan
then in effect.
1.9 "Contract" or "Policy" means any life insurance policy,
retirement income or annuity policy, or annuity contract (group
or individual) issued pursuant to the terms of the Plan.
1.10 "Deferred Compensation" with respect to any Participant
means the amount of the Participant's total Compensation which
has been contributed to the Plan in accordance with the
Participant's deferral election pursuant to Section 4.2 excluding
any such amounts distributed as excess "annual additions"
pursuant to Section 4.10(a).
1.11 "Early Retirement Date" means, effective January 1,
1994, the first day of the month (prior to the Normal Retirement
Date) coinciding with or following the date on which a
Participant or Former Participant attains age 62. A Participant
shall become full Vested upon satisfying this requirement if
still employed at his Early Retirement Age.
A Former Participant who terminates employment and who
thereafter reaches the age requirement contained herein shall be
entitled to receive his benefits under this Plan.
1.12 "Elective Contribution" means the Employer's
contributions to the Plan of Deferred Compensation excluding any
such amounts distributed as excess "annual additions" pursuant to
Section 4.10(a). In addition, any Employer Qualified Non-Elective
Contribution made pursuant to Section 4.6 shall be considered an
Elective Contribution for purposes of the Plan. Any such
contributions deemed to be Elective Contributions shall be
subject to the requirements of Sections 4.2(b) and 4.2(c) and
shall further be required to satisfy the discrimination
requirements of Regulation 1.401(k)-1(b)(5), the provisions of
which are specifically incorporated herein by reference.
1.13 "Eligible Employee" means any Employee.
Employees of Affiliated Employers shall not be eligible
to participate in this Plan unless such Affiliated Employers have
specifically adopted this Plan in writing.
1.14 "Employee" means any person who is employed by the
Employer or Affiliated Employer, but excludes any person who is
an independent contractor. Employee shall include Leased
Employees within the meaning of Code Sections 414(n)(2) and
414(o)(2) unless such Leased Employees are covered by a plan
described in Code Section 414(n)(5) and such Leased Employees do
not constitute more than 20% of the recipient's non-highly
compensated work force.
1.15 "Employer" means Chartwell Re Corporation and any
Participating Employer (as defined in Section 10.1) which shall
adopt this Plan; any successor which shall maintain this Plan;
and any predecessor which has maintained this Plan. The Employer
is a Delaware corporation with principal offices in the State of
Connecticut.
1.16 "Excess Aggregate Contributions" means, with respect to
any Plan Year, the excess of the aggregate amount of the Employer
matching contributions made pursuant to Section 4.1(b) and any
qualified non-elective contributions or elective deferrals taken
into account pursuant to Section 4.7(c) on behalf of Highly
Compensated Participants for such Plan Year, over the maximum
amount of such contributions permitted under the limitations of
Section 4.7(a).
1.17 "Excess Contributions" means, with respect to a Plan
Year, the excess of Elective Contributions made on behalf of
Highly Compensated Participants for the Plan Year over the
maximum amount of such contributions permitted under Section
4.5(a). Excess Contributions shall be treated as an "annual
addition" pursuant to Section 4.9(b).
1.18 "Excess Deferred Compensation" means, with respect to
any taxable year of a Participant, the excess of the aggregate
amount of such Participant's Deferred Compensation and the
elective deferrals pursuant to Section 4.2(f) actually made on
behalf of such Participant for such taxable year, over the dollar
limitation provided for in Code Section 402(g), which is
incorporated herein by reference. Excess Deferred Compensation
shall be treated as an "annual addition" pursuant to Section
4.9(b) when contributed to the Plan unless distributed to the
affected Participant not later than the first April 15th
following the close of the Participant's taxable year.
Additionally, for purposes of Sections 2.2 and 4.4(g), Excess
Deferred Compensation shall continue to be treated as Employer
contributions even if distributed pursuant to Section 4.2(f).
However, Excess Deferred Compensation of Non-Highly Compensated
Participants is not taken into account for purposes of Section
4.5(a) to the extent such Excess Deferred Compensation occurs
pursuant to Section 4.2(d).
1.19 "Family Member" means, with respect to an affected
Participant, such Participant's spouse and such Participant's
lineal descendants and ascendants and their spouses, all as
described in Code Section 414(q)(6)(B).
1.20 "Fiduciary" means any person who (a) exercises any
discretionary authority or discretionary control respecting
management of the Plan or exercises any authority or control
respecting management or disposition of its assets, (b) renders
investment advice for a fee or other compensation, direct or
indirect, with respect to any monies or other property of the
Plan or has any authority or responsibility to do so, or (c) has
any discretionary authority or discretionary responsibility in
the administration of the Plan, including, but not limited to,
the Trustee, the Employer and its representative body, and the
Administrator.
1.21 "Fiscal Year" means the Employer's accounting year of
12 months commencing on January 1st of each year and ending the
following December 31st.
1.22 "Forfeiture" means that portion of a Participant's
Account that is not Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion
of a Terminated Participant, or
(b) the last day of the Plan Year in which the
Participant incurs five (5) consecutive 1-Year Breaks
in Service.
Furthermore, for purposes of paragraph (a) above, in
the case of a Terminated Participant whose Vested benefit is
zero, such Terminated Participant shall be deemed to have
received a distribution of his Vested benefit upon his
termination of employment. Restoration of such amounts shall
occur pursuant to Section 6.4(f)(2). In addition, the term
Forfeiture shall also include amounts deemed to be Forfeitures
pursuant to any other provision of this Plan.
1.23 "Former Participant" means a person who has been a
Participant, but who has ceased to be a Participant for any
reason.
1.24 "415 Compensation" with respect to any Participant
means such Participant's wages as defined in Code Section 3401(a)
and all other payments of compensation by the Employer (in the
course of the Employer's trade or business) for a Plan Year for
which the Employer is required to furnish the Participant a
written statement under Code Sections 6041(d), 6051(a)(3) and
6052. "415 Compensation" must be determined without regard to any
rules under Code Section 3401(a) that limit the remuneration
included in wages based on the nature or location of the
employment or the services performed (such as the exception for
agricultural labor in Code Section 3401(a)(2)).
If, in connection with the adoption of this amendment
and restatement, the definition of "415" Compensation" has been
modified, then, for Plan Years prior to the Plan Year which
includes the adoption date of this amendment and restatement,
"415 Compensation" means compensation determined pursuant to the
Plan then in effect.
1.25 "414(s) Compensation" with respect to any Participant
means such Participant's "415 Compensation" paid during a Plan
Year. The amount of "414(s) Compensation" with respect to any
Participant shall include "414(s) Compensation" for the entire
twelve (12) month period ending on the last day of such Plan
Year.
For purposes of this Section, the determination of
"414(s) Compensation" shall be made by including amounts which
are contributed by the Employer pursuant to a salary reduction
agreement and which are not includible in the gross income of the
Participant under Code Sections 125, 402(e)(3), 402(h), 403(b) or
457, and Employee contributions described in Code Section
414(h)(2) that are treated as Employer contributions.
"414(s) Compensation" in excess of $200,000 shall be
disregarded. Such amount shall be adjusted at the same time and
in such manner as permitted under Code Section 415(d), except
that the dollar increase in effect on January 1 of any calendar
year shall be effective for the Plan Year beginning with or
within such calendar year and the first adjustment to the
$200,000 imitation shall be effective on January 1, 1990. For
any short Plan Year the "414(s) Compensation" limit shall be an
amount equal to the "414(s) Compensation" limit for the calendar
year in which the Plan year begins multiplied by the ratio
obtained by dividing the number of full months in the short Plan
Year by twelve (12). In applying this limitation, the family
group of a Highly Compensated Participant who is subject to the
Family Member aggregation rules of Code Section 414(q)(6) because
such Participant is either a "five percent owner" of the Employer
or one of the ten (10) Highly Compensated Employees paid the
greatest "415 Compensation" during the year, shall be treated as
a single Participant, except that for this purpose Family Member
shall include only the affected Participant's spouse and any
lineal descendants who have not attained age nineteen (19) before
the close of the year.
If, in connection with the adoption of this amendment
and restatement, the definition of "414(s) Compensation" has been
modified, then, for Plan Years prior to the Plan Year which
includes the adoption date of this amendment and restatement,
"414(s) Compensation" means compensation determined pursuant to
the Plan then in effect.
1.26 "Highly Compensated Employee" means an Employee
described in Code Section 414(q) and the Regulations thereunder,
and generally means an Employee who performed services for the
Employer during the "determination year" and is in one or more of
the following groups:
(a) Employees who at any time during the
"determination year" or "look-back year" were "five
percent owners" as defined in Section 1.32(c)
(b) Employees who received "415 Compensation"
during the "look-back year" from the Employer in excess
of $75,000.
(c) Employees who received "415 Compensation"
during the "look-back year" from the Employer in excess
of $50,000 and were in the Top Paid Group of Employees
for the Plan Year.
(d) Employees who during the "look-back year"
were officers of the Employer (as that term is defined
within the meaning of the Regulations under Code
Section 416) and received "415 Compensation" during the
"look-back year" from the Employer greater than 50
percent of the limit in effect under Code Section
415(b)(1)(A) for any such Plan Year. The number of
officers shall be limited to the lesser of (i) 50
employees; or (ii) the greater of 3 employees or 10
percent of all employees. For the purpose of
determining the number of officers, Employees described
in Section 1.55(a), (b), (c) and (d) shall be excluded,
but such Employees shall still be considered for the
purpose of identifying the particular Employees who are
officers. If the Employer does not have at least one
officer whose annual "415 Compensation" is in excess of
50 percent of the Code Section 415(b)(1)(A) limit, then
the highest paid officer of the Employer will be
treated as a Highly Compensated Employee.
(e) Employees who are in the group consisting of
the 100 Employees paid the greatest "415 Compensation"
during the "determination year" and are also described
in (b), (c) or (d) above when these paragraphs are
modified to substitute "determination year" for "look-
back year".
The "look-back year" shall be the calendar year ending
with or within the Plan Year for which testing is being
performed, and the "determination year" (if applicable) shall be
the period of time, if any, which extends beyond the "look-back
year" and ends on the last day of the Plan Year for which testing
is being performed (the "lag period"). If the "lag period" is
less than twelve months long, the dollar threshold amounts
specified in (b), (c) and (d) above shall be prorated based upon
the number of months in the "lag period".
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts which are
contributed by the Employer pursuant to a salary reduction
agreement and which are not includible in the gross income of the
Participant under Code Sections 125, 402(e)(3), 402(h), 403(b) or
457, and Employee contributions described in Code Section
414(h)(2) that are treated as Employer contributions.
Additionally, the dollar threshold amounts specified in (b) and
(c) above shall be adjusted at such time and in such manner as is
provided in Regulations. In the case of such an adjustment, the
dollar limits which shall be applied are those for the calendar
year in which the "determination year" or "look-back year"
begins.
In determining who is a Highly Compensated Employee,
Employees who are non-resident aliens and who received no earned
income (within the meaning the Code Section 911(d)(2)) from the
Employer constituting United States source income within the
meaning of Code Section 861(a)(3) shall not be treated s
Employees. Additionally, all Affiliated Employers shall be taken
into account as a single employer and Leased Employees within the
meaning of Code Sections 414(n)(2) and 414(o)(2) shall be
considered Employees unless such Leased Employees are covered by
a plan described in Code Section 414(n)(5) and are not covered in
any qualified plan maintained by the Employer. The exclusion of
Leased Employees for this purpose shall be applied on a uniform
and consistent basis for all of the Employer's retirement plans.
Highly Compensated Former Employees shall be treated as Highly
Compensated Employees without regard to whether they performed
services during the "determination year".
1.27 "Highly Compensated Former Employee" means a former
Employee who had a separation year prior to the "determination
year" and was a Highly Compensated Employee in the year of
separation from service or in any "determination year" after
attaining age 55. Notwithstanding the foregoing, an Employee who
separated from service prior to 1987 will be treated as a Highly
Compensated Former Employee only if during the separation year
(or year preceding the separation year) or any year after the
Employee attains age 55 (or the last year ending before the
Employee's 55th birthday), the Employee either received "415
Compensation" in excess of $50,000 or was a "five percent owner".
For purposes of this Section, "determination year", "415
Compensation" and "five percent owner" shall be determined in
accordance with Section 1.26. Highly Compensated Former Employees
shall be treated as Highly Compensated Employees. The method set
forth in this Section for determining who is a "Highly
Compensated Former Employee" shall be applied on a uniform and
consistent basis for all purposes for which the Code Section
414(q) definition is applicable.
1.28 "Highly Compensated Participant" means any Highly
Compensated Employee who is eligible to participate in the Plan.
1.29 "Hour of Service" means (1) each hour for which an
Employee is directly or indirectly compensated or entitled to
compensation by the Employer for the performance of duties during
the applicable computation period; (2) each hour for which an
Employee is directly or indirectly compensated or entitled to
compensation by the Employer (irrespective of whether the
employment relationship has terminated) for reasons other than
performance of duties (such as vacation, holidays, sickness, jury
duty, disability, lay-off, military duty or leave of absence)
during the applicable computation period; (3) each hour for which
back pay is awarded or agreed to by the Employer without regard
to mitigation of damages. These hours will be credited to the
Employee for the computation period or periods to which the award
or agreement pertains rather than the computation period in which
the award, agreement or payment is made. The same Hours of
Service shall not be credited both under (1) or (2), as the case
may be, and under (3).
Notwithstanding the above, (i) no more than 501 Hours
of Service are required to be credited to an Employee on account
of a single continuous period during which the Employee performs
no duties (whether or not such period occurs in a single
computation period); (ii) an hour for which an Employee is
directly or indirectly paid, or entitled to payment, on account
of a period during which no duties are performed is not required
to be credited to the Employee if such payment is made or due
under a plan maintained solely for the purpose of complying with
applicable worker's compensation, or unemployment compensation or
disability insurance laws; and (iii) Hours of Service are not
required to be credited for a payment which solely reimburses an
Employee for medical or medically related expenses incurred by
the Employee.
For purposes of this Section, 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.
An Hour of Service must be counted for the purpose of
determining a Year of Service, a year of participation for
purposes of accrued benefits, a 1-Year Break in Service, and
employment commencement date (or reemployment commencement date).
In addition, Hours of Service will be credited for employment
with other Affiliated Employers. The provisions of Department of
Labor regulations 2530.200b-2(b) and (c) are incorporated herein
by reference.
1.30 "Income" means the income or losses allocable to Excess
Deferred Compensation which amount shall be allocated in the same
manner as income or losses are allocated pursuant to Section
4.4(f).
1.31 "Investment Manager" means an entity that (a) has the
power to manage, acquire, or dispose of Plan assets and (b)
acknowledges fiduciary responsibility to the Plan in writing.
Such entity must be a person, firm, or corporation registered as
an investment adviser under the Investment Advisers Act of 1940,
a bank, or an insurance company.
1.32 "Key Employee" means an Employee as defined in Code
Section 416(I) and the Regulations thereunder. Generally, any
Employee or former Employee (as well as each of his
Beneficiaries) is considered a Key Employee if he, at any time
during the Plan Year that contains the "determination Date" or
any of the preceding four (4) Plan Years, has been included in
one of the following categories:
(a) an officer of the Employer (as the term is
defined within the meaning of the Regulations under
Code Section 416) having annual "415 Compensation"
greater than 50 percent of the amount in effect under
Code Section 415(b)(1)(A) for any such Plan Year.
(b) one of the ten employees having annual "415
Compensation" from the Employer for a Plan Year greater
than the dollar limitation in effect under Code Section
415(c)(1)(A) for the calendar year in which such Plan
Year ends and owning (or considered as owning within
the meaning of Code Section 318) both more than one-
half percent interest and the largest interests in the
Employer.
(c) a "five percent owner" of the Employer. "Five
percent owner" means any person who owns (or is
considered as owning within the meaning of Code Section
318) more than five percent (5%) of the outstanding
stock of the Employer or stock possessing more than
five percent (5%) of the total combined voting power of
all stock of the Employer or, in the case of an
unincorporated business, any person who owns more than
five percent (5%) of the capital or profits interest in
the Employer. In determining percentage ownership
hereunder, employers that would otherwise be aggregated
under Code Sections 414(b), (c), (m) and (o) shall be
treated as separate employers.
(d) a "one percent owner" of the Employer having
an annual "415 Compensation" from the Employer of more
than $150,000. "One percent owner" means any person who
owns (or is considered as owning within the meaning of
Code Section 318) more than one percent (1%) of the
outstanding stock of the Employer or stock possessing
more than one percent (1%) of the total combined voting
power of all stock of the Employer or, in the case of
an unincorporated business, any person who owns more
than one percent (1%) of the capital or profits
interest in the Employer. In determining percentage
ownership hereunder, employers that would otherwise be
aggregated under Code Sections 414(b), (c), (m) and (o)
shall be treated as separate employers. However, in
determining whether an individual has "415
Compensation" of more than $150,000, "415 Compensation"
from each employer required to be aggregated under Code
Sections 414(b), (c), (m) and (o) shall be taken into
account.
For purposes of this Section, the determination of
"415 Compensation" shall be made by including amounts which are
contributed by the Employer pursuant to a salary reduction
agreement and which are not includible in the gross income of the
Participant under Code Sections 125, 402(e)(3), 402(h), 403(b) or
457, and Employee contributions described in Code Section
414(h)(2) that are treated as Employer contributions.
1.33 "Late Retirement Date" means the first day of the month
coinciding with or next following a Participant's actual
Retirement Date after having reached his Normal Retirement Date.
1.34 "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 services
performed for the recipient employer shall be treated as provided
by the recipient employer. A Leased Employee shall not be
considered an Employee of the recipient.
(a) if such employee is covered by a money
purchase pension plan providing:
(1) a non-integrated employer contribution rate
of at least 10% of compensation, as defined in
Code Section 415(c)(3), but including amounts
which are contributed by the Employer pursuant to
a salary reduction agreement and which are not
includible in the gross income of the Participant
under Code Sections 125, 402(3)(3), 402(h), 403(b)
or 457, and Employee contributions described in
Code Section 414(h)(2) that are treated as
Employer contributions.
(2) immediate participation; and
(3) full and immediate vesting; and
(b) if Leased Employees do not constitute more
than 20% of the recipient's non-highly compensated work force.
1.35 "Non-Elective Contribution" means the Employer's
contributions to the Plan excluding, however, contributions made
pursuant to the Participant's deferral election provided for in
Section 4.2 and any Qualified Non-Elective Contribution.
1.36 "Non-Highly Compensated Participant" means any
Participant who is neither a Highly Compensated Employee nor a
Family Member.
1.37 "Non-Key Employee" means any Employee or former
Employee (and his Beneficiaries) who is not a Key Employee.
1.38 "Normal Retirement Age" means the Participant's 65th
birthday. A Participant shall become full Vested in his
Participant's Account upon attaining his Normal Retirement Age.
1.39 "Normal Retirement Date" means the first day of the
month coinciding with or next following the Participant's Normal
Retirement Age.
1.40 "1-Year Break in Service" means the applicable
computation period during which an Employee has not completed
more than 500 Hours of Service with the Employer. Further, solely
for the purpose of determining whether a Participant has incurred
a 1-Year Break in Service, Hours of Service shall be recognized
for "authorized leaves of absence" and "maternity and paternity
leaves of absence". Years of Service and 1-Year Breaks in Service
shall be measured on the same computation period.
"Authorized leave of absence" means an unpaid,
temporary cessation from active employment with the employer
pursuant to an established nondiscriminatory policy, whether
occasioned by illness, military service, or any other reason.
A "maternity or paternity leave of absence" means, for
Plan Years beginning after December 31, 1984, an absence from
work for any period by reason of the Employee's pregnancy, birth
of the Employee's child, placement of a child with the Employee
in connection with the adoption of such child, or any absence for
the purpose of caring for such child for a period immediately
following such birth or placement. For this purpose, Hours of
Service shall be credited for the computation period in which the
absence from work begins, only if credit therefore is necessary
to prevent the Employee from incurring a 1-Year Break in Service,
or, in any other case, in the immediately following computation
period. The Hours of Service credited for a "maternity or
paternity leave of absence" shall be those which would normally
have been credited but for such absence, or, in any case in which
the Administrator is unable to determine such hours normally
credited, eight (8) Hours of Service per day. The total Hours of
Service required to be credited for a "maternity or paternity
leave of absence" shall not exceed 501.
1.41 "Participant" means any Eligible Employee who
participates in th4 Plan as provided in Sections 3.2 and 3.3, and
has not for any reason become ineligible to participate further
in the Plan.
1.42 "Participant's Account" means the account established
and maintained by the Administrator for each Participant with
respect to his total interest in the Plan and Trust resulting
from the Employer's Non-Elective Contributions.
A separate accounting shall be maintained with respect
to that portion of the Participant's Account attributable to
Employer matching contributions made pursuant to Section 4.1(b)
and Employer discretionary contributions made pursuant to Section
4.1(c).
1.43 "Participant's Combined Account" means the total
aggregate amount of each Participant's Elective Account and
Participant's Account.
1.44 "Participant's Elective Account" means the account
established and maintained by the Administrator for each
Participant with respect to his total interest in the Plan and
Trust resulting from the Employer's Elective Contributions. A
separate accounting shall be maintained with respect to that
portion of the Participant's Elective Account attributable to
Elective Contributions pursuant to Section 4.2 and any Employer
Qualified Non-Elective Contributions.
1.45 "Plan" means this instrument, including all amendments
thereto.
1.46 "Plan Year" means the Plan's accounting year of twelve
(12) months commencing on January 1st of each year and ending the
following December 31st.
1.47 "Qualified Non-Elective Contribution" means the
Employer's contribution to the Plan that are made pursuant to
Section 4.6. Such contributions shall be considered an Elective
Contribution for the purposes of the Plan and used to satisfy the
"Actual Deferral Percentage" tests.
In addition, the Employer's contributions to the Plan
that are made pursuant to Section 4.8(h) which are used to
satisfy the "Actual Contribution Percentage" tests shall be
considered Qualified Non-Elective Contributions and be subject to
the provisions of Sections 4.2(b) and 4.2(c).
1.48 "Regulation" means the Income Tax Regulations as
promulgated by the Secretary of the Treasury or his delegate, and
as amended from time to time.
1.49 "Retired Participant" means a person who has been a
Participant, but who has become entitled to retirement benefits
under the Plan.
1.50 "Retirement Date" means the date as of which a
Participant retires for reasons other than Total and Permanent
Disability, whether such retirement occurs on a Participant's
Normal Retirement Date, Early or Late Retirement Date (see
Section 6.1).
1.51 "Super Top Heavy Plan" means a plan described in
Section 2.2(b).
1.52 "Terminated Participant" means a person who has been a
Participant, but whose employment has been terminated other than
by death, Total and Permanent Disability or retirement.
1.53 "Top Heavy Plan" means a plan described in Section
2.2(a).
1.54 "Top Heavy Plan Year" means a Plan Year during which
the Plan is a Top Heavy Plan.
1.55 "Top Paid Group" means the top 20 percent of Employees
who performed services for the Employer during the applicable
year, ranked according to the amount of "415 Compensation"
(determined for this purpose in accordance with Section 1.26)
received from the Employer during such year. All Affiliated
Employers shall be taken into account as a single employer, and
Leased Employees within the meaning of Code Sections 414(n)(2)
and 414(o)(2) shall be considered Employees unless such Leased
Employees are covered by a plan described in Code Section
414(n)(5) and are not covered in any qualified plan maintained by
the Employer. Employees who are non-resident aliens and who
received no earned income (within the meaning of Code Section
911(d)(2)) from the Employer constituting United States source
income within the meaning of Code Section 861(a)(3) shall not be
treated as Employees. Additionally, for the purpose of
determining the number of active Employees in any year, the
following additional Employees shall also be excluded; however,
such Employees shall still be considered for the purpose of
identifying the particular Employees in the Top Paid Group:
(a) Employees with less than six (6) months of service;
(b) Employees who normally work less than 17 1/2 hours per week;
(c) Employees who normally work less than six (6) months during a year; and
(d) Employees who have not yet attained age 21.
In addition, if 90 percent or more of the Employees of
the Employer are covered under agreements the Secretary of Labor
finds to be collective bargaining agreements between Employee
representatives and the Employer, and the Plan covers only
Employees who are not covered under such agreements, then
Employees covered by such agreements shall be excluded from both
the total number of active Employees as well as from the
identification of particular Employees in the Top Paid Group.
The foregoing exclusions set forth in this Section
shall be applied on a uniform and consistent basis for all
purposes for which the Code Section 414(q) definition is
applicable.
1.56 "Total and Permanent Disability" means a physical or
mental condition of a Participant resulting from bodily injury,
disease, or mental disorder which renders him incapable of
continuing any gainful occupation and which condition constitutes
total disability under the federal Social Security Acts.
1.57 "Trustee" means the person or entity named as trustee
herein or in any separate trust forming a part of this Plan, and
any successors.
1.58 "Trust Fund" means the assets of the Plan and Trust as
the same shall exist from time to time.
1.59 "Vested" means the nonforfeitable portion of any
account maintained on behalf of a Participant.
1.60 "Year of Service" means the computation period of
twelve (12) consecutive months, herein set forth, during which an
Employee has at least 1000 Hours of Service.
For purposes of eligibility for participation, the
initial computation period shall begin with the date on which the
Employee first performs an Hour of Service. The participation
computation period beginning after a 1-Year Break in Service
shall be measured from the date on which an Employee again
performs an Hour of Service. The participation computation period
shall shift to the Plan Year which includes the anniversary of
the date on which the Employee first performed an Hour of
Service. An Employee who is credited with the required Hours of
Service in both the initial computation period (or the
computation period beginning after a 1-Year Break in Service) and
the Plan Year which includes the anniversary of the date on which
the Employee first performed an Hour of Service, shall be
credited with two (2) Years of Service for purposes of
eligibility to participate.
For vesting purposes, the computation period shall be
the plan Year, including periods prior to the Effective Date of
the Plan.
For all other purposes, the computation period shall be
the Plan Year.
Notwithstanding the foregoing, for any short Plan Year,
the determination of whether an Employee has completed a Year of
Service shall be made in accordance with Department of Labor
regulation 2530.203-2(c). However, in determining whether an
Employee has completed a Year of Service for benefit accrual
purposes in the short Plan Year, the number of the Hours of
Service required shall be proportionately reduced based on the
number of full months in the short Plan Year.
Years of Service with any Affiliated Employer shall be
recognized.
ARTICLE II
TOP HEAVY AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the plan shall provide the
special vesting requirements of Code Section 416(b) pursuant to
Section 6.4 of the Plan and the special minimum allocation
requirements of Code Section 416(c) pursuant to Section 4.4 of
the Plan.
2.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any
Plan Year in which, as of the Determination Date, (1)
the Present Value of Accrued Benefits of Key Employees
and (2) the sum of the Aggregate Accounts of Key
Employees under this Plan and all plans of an
Aggregation Group, exceeds sixty percent (60%) of the
Present Value of Accrued Benefits and the Aggregate
Accounts of all Key and Non-Key Employees under this
Plan and all plans of an Aggregation Group.
If any Participant is a Non-Key Employee for
any Plan Year, but such Participant was a Key Employee
for any prior Plan Year, such Participant's Present
Value of Accrued Benefit and/or Aggregate Account
balance shall not be taken into account for purposes of
determining whether this Plan is a Top Heavy or Super
Top Heavy Plan (or whether any Aggregation Group which
includes this Plan is a Top Heavy Group). In addition,
if a Participant or Former Participant has not
performed any services for any Employer maintaining the
Plan at any time during the five year period ending on
the Determination Date, any accrued benefit for such
Participant or Former Participant shall not be taken
into account for the purposes of determining whether
this Plan is a Top Heavy or Super Top Heavy Plan.
(b) This Plan shall be a Super Top Heavy Plan for
any Plan Year in which, as of the Determination Date,
(1) the Present Value of Accrued benefits of Key
Employees and (2) the sum of the Aggregate Accounts of
Key Employees under this Plan and all plans of an
Aggregation Group, exceeds ninety percent (90%) of the
Present Value of Accrued Benefits and the Aggregate
Accounts of all Key and Non-Key Employees under this
Plan and all plans of an Aggregation Group.
(c) Aggregate Account: A Participant's Aggregate
Account as of the Determination Date is the sum of:
(1) his Participant's Combined Account balance as
of the most recent valuation occurring within a
twelve (12) month period ending on the
Determination Date;
(2) an adjustment for any contributions due as of
the Determination Date. Such adjustment shall be
the amount of any contributions actually made
after the valuation date but due ton or before the
Determination Date, except for the first Plan Year
when such adjustment shall also reflect the amount
of any contributions made after the Determination
Date that are allocated as of a date in that first
Plan Year.
(3) any Plan distributions made within the Plan
Year that includes the Determination Date or
within the four (4) preceding Plan Years.
However, in the case of distributions made after
the valuation date and prior to the Determination
Date, such distributions are not included as
distributions for top heavy purposes to the extent
that such distributions are already included in
the Participant's Aggregate Account balance as of
the valuation date. Notwithstanding anything
herein to the contrary, all distributions,
including distributions made prior to January 1,
1984, and distributions under a terminated plan
which if it had not been terminated would have
been required to be included in an Aggregation
Group, will be counted. Further, distributions
from the Plan (including the cash value of life
insurance policies) of a Participant's account
balance because of death shall be treated as a
distribution for the purposes of this paragraph.
(4) any Employee contributions, whether voluntary
or mandatory. However, amounts attributable to tax
deductible qualified voluntary employee
contributions shall not be considered to be a part
of the Participant's Aggregate Account balance.
(5) with respect to unrelated rollovers and plan-
to-plan transfers (ones which are both initiated
by the Employee and made from a plan maintained by
one employer to a plan maintained by another
employer), if this Plan provides the rollovers or
plan-to-plan transfers, it shall always consider
such rollovers or plan-to-plan transfers as a
distribution for the purposes of this Section. If
this Plan is the plan accepting such rollovers or
plan-to-plan transfers, it shall not consider such
rollovers or plan to-plan transfers as part of the
Participant's Aggregate Account balance.
(6) with respect to related rollovers and plan-
to-plan transfers (ones either initiated by the
Employee or made to a plan maintained by the same
employer), if this Plan provides the rollover or
plan-to-plan transfer, it shall not be counted as
a distribution for purposes of this Section. If
this Plan is the plan accepting such rollover or
plan-to-plan transfer, it shall consider such
rollover or plan-to-plan transfer as part of the
Participant's Aggregate Account balance,
irrespective of the date on which such rollover or
plan-to-plan transfer is accepted.
(7) For the purposes of determining whether two
employers are to be treated as the same employer
in (5) and (6) above, all employers aggregated
under Code Section 414(b), (c), (m) and (o) are
treated as the same employer.
(d) "Aggregation Group" means either a Required
Aggregation Group or a Permissive Aggregation Group as
hereinafter determined.
(1) Required Aggregation Group: In determining a
Required Aggregation Group hereunder, each plan of
the Employer in which a Key Employee is a
participant in the Plan Year containing the
Determination Date or any of the four preceding
Plan Years, and each other plan of the Employer
which enables any plan in which a Key Employee
participates to meet the requirements of Code
Sections 401(a)(4) or 410, will be required to be
aggregated. Such group shall be known as a
Required Aggregation Group.
In the case of a Required Aggregation Group, each
plan in the group will be considered a Top Heavy
Plan if the Required Aggregation Group is a Top
Heavy Group. No plan in the Required Aggregation
Group will be considered a Top Heavy Plan if the
Required Aggregation Group is not a Top Heavy
Group.
(2) Permissive Aggregation Group: The Employer
may also include any other plan not required to be
included in the Required Aggregation Group,
provided the resulting group, taken as a whole,
would continue to satisfy the provisions of Code
Sections 401(a)(4) and 410. Such group shall be
known as a Permissive Aggregation Group.
In the case of a Permissive Aggregation Group,
only a plan that is part of the Required
Aggregation Group will be considered a Top Heavy
Plan if the Permissive Aggregation Group is a Top
Heavy Group. No plan in the Permissive Aggregation
Group will be considered a Top Heavy Plan if the
Permissive Aggregation Group is not a Top Heavy
Group.
(3) Only those plans of the Employer in which the
Determination Dates fall within the same calendar
year shall be aggregated in order to determine
whether such plans are Top Heavy Plans.
(4) An Aggregation Group shall include any
terminated plan of the Employer if it was
maintained within the last five (5) years ending
on the determination Date.
(e) "Determination Date" means (a) the last day
of the preceding Plan Year, or (b) in the case of the
first Plan Year, the last day of such Plan Year.
(f) Present Value of Accrued Benefit: In the case
of a defined benefit plan, the Present Value of Accrued
Benefit for a Participant other than a Key Employee,
shall be as determined using the single accrual method
used for all plans of the Employer and Affiliated
Employers, or if no such single method exists, using a
method which results in benefits accruing not more
rapidly than the slowest accrual rate permitted under
Code Section 411(b)(1)(C). The determination of the
Present Value of Accrued Benefit shall 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.
(g) "Top Heavy Group" means an Aggregation Group
in which, as of the Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key
Employees under all defined benefit plans included
in the group, and
(2) the Aggregate Accounts of Key Employees under
all defined contribution plans included in the
group,
exceeds sixty percent (60%) of a similar sum
determined for all Participants.
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) The Employer shall be empowered to appoint
and remove the Trustee and the Administrator from time
to time as it deems necessary for the proper
administration of the Plan to assure that the Plan is
being operated for the exclusive benefit of the
Participants and their Beneficiaries in accordance with
the terms of the Plan, the Code, and the Act.
(b) The Employer shall establish a "funding
policy and method, "i.e., it shall determine whether
the Plan has a short run need for liquidity (e.g., to
pay benefits) or whether liquidity is a long run goal
and investment growth (and stability of same) is a more
current need, or shall appoint a qualified person to do
so. The Employer or its delegate shall communicate such
needs and goals to the Trustee, who shall coordinate
such Plan needs with its investment policy. The
communication of such a "funding policy and method"
shall not, however, constitute a directive to the
Trustee as to investment of the Trust Funds. Such
"funding policy and method" shall be consistent with
the objectives of this Plan and with the requirements
of Title I of the Act.
(c) The Employer shall periodically review the
performance of any Fiduciary or other person to whom
duties have been delegated or allocated by it under the
provisions of this Plan or pursuant to procedures
established hereunder. This requirement may be
satisfied by formal periodic review by the Employer or
by a qualified person specifically designated by the
Employer, through day-to-day conduct and evaluation, or
through other appropriate ways.
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall appoint one or more Administrator.
Any person, including, but not limited to, the Employees of the
Employer, shall be eligible to serve as an Administrator. Any
person so appointed shall signify his acceptance by filing
written acceptance with the Employer. An Administrator may resign
by delivering his written resignation to the Employer or be
removed by the Employer by delivery of written notice of removal,
to take effect a date specified therein, or upon delivery to the
Administrator if no date is specified.
The Employer, upon resignation or removal of an
Administrator, shall promptly designate in writing a successor to
this position. If the Employer does not appoint an Administrator,
the Employer will function as the Administrator.
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES
If more than one person is appointed as Administrator,
the responsibilities of each Administrator may be specified by
the Employer and accepted in writing by each Administrator. In
the event that no such delegation is made by the Employer, the
Administrators may allocate the responsibilities among
themselves, in which event the Administrators shall notify the
Employer and the trustee in writing of such action and specify
the responsibilities of each Administrator. The Trustee
thereafter shall accept and rely upon any documents executed by
the appropriate Administrator until such time as the Employer or
the Administrators file with the Trustee a written revocation of
such designation.
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to
administer the Plan for the exclusive benefit of the Participants
and their Beneficiaries, subject to the specific terms of the
Plan. The Administrator shall administer the Plan in accordance
with its terms and shall have the power and discretion to
construe the terms of the Plan and to determine all questions
arising in connection with the administration, interpretation,
and application of the Plan. Any such determination by the
Administrator shall be conclusive and binding upon all persons.
The Administrator may establish procedures, correct any defect,
supply any information, or reconcile any inconsistency in such
manner and to such extent as shall be deemed necessary or
advisable to carry out the purpose of the Plan; provided,
however, that any procedure, discretionary act, interpretation or
construction shall be done in a nondiscriminatory manner based
upon uniform principles consistently applied and shall be
consistent with the intent that the Plan shall continue to be
deemed a qualified plan under the terms of Code Section 401(a),
and shall comply with the terms of the Act and all regulations
issued pursuant thereto. The Administrator shall have all powers
necessary or appropriate to accomplish his duties under this
Plan.
The Administrator shall be charged with the duties of
the general administration of the Plan, including, but not
limited to, the following:
(a) the discretion to determine all questions
relating to the eligibility of Employees to participate
or remain a Participant hereunder and to receive
benefits under the Plan;
(b) to compute, certify, and direct the Trustee
with respect to the amount and the kind of benefits to
which any Participant shall be entitled hereunder;
(c) to authorize and direct the Trustee with
respect to all nondiscretionary or otherwise directed
disbursements from the Trust;
(d) to maintain all necessary records for the
administration of the Plan;
(e) to interpret the provisions of the Plan and
to make and publish such rules for regulation of the
Plan as are consistent with the terms hereof;
(f) to determine the size and type of any
Contract to be purchase from any insurer, and to
designate the insurer from which such Contract shall be
purchased;
(g) to compute and certify to the Employer and to
the Trustee from time to time the sums of money
necessary or desirable to be contributed to the Plan;
(h) to consult with the Employer and the Trustee
regarding the short and long-term liquidity needs of
the Plan in order that the Trustee can exercise any
investment discretion in a manner designed to
accomplish specific objectives;
(i) to prepare and implement a procedure to
notify Eligible Employees that they may elect to have a
portion of their Compensation deferred or paid to them
in cash;
(j) to assist any Participant regarding his
rights, benefits, or elections available under the
Plan.
2.7 RECORDS AND REPORTS
The Administrator shall keep a record of all actions
taken and shall keep all other books of account, records, and
other data that may be necessary for proper administration of the
Plan and shall be responsible for supplying all information and
reports to the Internal Revenue Service, Department of Labor,
Participants, Beneficiaries and other as required by law.
2.8 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of
the Administrator, may appoint counsel, specialists, advisers,
and other persons as the Administrator or the Trustee deems
necessary or desirable in connection with the administration of
this Plan.
2.9 INFORMATION FROM EMPLOYER
To enable the Administrator to perform his functions,
the Employer shall supply full and timely information to the
Administrator on all matters relating to the Compensation of all
Participants, their Hours of Service, their Years of Service, and
their retirement, death, disability, or termination of
employment, and such other pertinent facts as the Administrator
may require; and the Administrator shall advise the Trustee of
such of the foregoing facts as may be pertinent to the Trustee's
duties under the Plan. The Administrator may rely upon such
information as is supplied by the Employer and shall have no duty
or responsibility to verify such information.
2.10 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the
Trust Fund unless paid by the Employer. Such expenses shall
include any expenses incident to the functioning of the
Administrator, including, but not limited to, fees of accounts,
counsel, and other specialists and their agents, and other costs
of administering the Plan. Until paid, the expenses shall
constitute a liability of the Trust Fund. However, the Employer
may reimburse the Trust Fund for any administration expense
incurred.
2.11 MAJORITY ACTIONS
Except where has been an allocation and delegation of
administrative authority pursuant to Section 2.5, if there shall
be more than one Administrator, they shall act by a majority of
their number, but may authorize one or more of them to sign all
papers on their behalf.
2.12 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in
writing with the Administrator. Written notice of the disposition
of a claim shall be furnished to the claimant within 90 days
after the application is filed. In the event the claim is denied,
the reasons for the denial shall be specifically set forth in the
notice in language calculated to be understood by the claimant,
pertinent provisions of the Plan shall be cited, and where
appropriate, an explanation as to how the claimant shall be
furnished with an explanation of the Plan's claims review
procedure.
2.13 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of
either, who has been denied a benefit by a decision of the
Administrator pursuant to Section 2.12 shall be entitled to
request the Administrator to give further consideration to his
claim by filing with the Administrator (on a form which may be
obtained from the Administrator) a request for a hearing. Such
request, together with a written statement of the reasons by the
claimant believes his claim should be allowed, shall be filed
with the Administrator no later than 60 days after receipt of the
written notification provided for in Section 2.12. The
Administrator shall then conduct a hearing within the next 60
days, at which the claimant may be represented by an attorney or
claimant shall have an opportunity to submit written and oral
evidence and arguments in support of his claim. At the hearing
(or prior thereto upon 5 business days written notice to the
Administrator) the claimant or his representative shall have an
opportunity to review all documents in the possession of the
Administrator which are pertinent to the claim at issue and its
disallowance. Either the claimant or the Administrator may cause
a court reporter to attend the hearing and record the
proceedings. In such event, a complete written transcript of the
proceedings shall be furnished to both parties by the court
reporter. The full expense of any such court reporter and such
transcripts shall be borne by the party causing the court
reporter to attend the hearing. A final decision as to the
allowance of the claim shall be made by the Administrator within
60 days of receipt of the appeal (unless there has been an
extension of 60 days due to special circumstances, provided the
delay and the special circumstances occasioning it are
communicated to the claimant within the 60 day period). Such
communication shall be written in a manner calculated to be
understood by the claimant and shall include specific reasons for
the decision and specific references to the pertinent Plan
provisions on which the decision is based.
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Prior to January 1, 1994, any Eligible Employee who was
employed on March 6, 1992, shall be eligible to participate and
shall enter the Plan as of the first day of such Plan Year. Any
other Eligible Employee who has completed one (1) Year of Service
and has attained age 21 shall be eligible to participate
hereunder as of the date he has satisfied such requirements.
However, any Employee who was a Participant in the Plan prior to
the effective date of this amendment and restatement shall
continue to participate in the Plan. The Employer shall give each
prospective Eligible Employee written notice of his eligibility
to participate in the Plan prior to the close of the Plan Year in
which he first becomes an Eligible Employee.
Effective January 1, 1994, any Eligible Employee who
has completed six (6) Months of Service and has attained age 21
shall be eligible to participate hereunder as of the date he has
satisfied such requirements.
3.2 APPLICATION FOR PARTICIPATION
In order to become a Participant hereunder, each
Eligible Employee shall make application to the Employer for
participation in the Plan and agree to the terms hereof. Upon the
acceptance of any benefits under this Plan, such Employee shall
automatically be deemed to have made application and shall be
bound by the terms and conditions of the Plan and all amendments
hereto.
3.3 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee shall become a Participant
effective as of the first day of the month coinciding with or
next following the date on which such Employee met the
eligibility requirements of Section 3.1, provided said Employee
was still employed as of such date (or if not employed on such
date, as of the date of rehire if a 1-Year Break in Service has
not occurred).
3.4 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of
each Employee for participation in the Plan based upon
information furnished by the Employer. Such determination shall
be conclusive and binding upon all persons, as long as the same
is made pursuant to the Plan and the Act. Such determination
shall be subject to review per Section 2.13.
3.5 TERMINATION OF ELIGIBILITY
(a) In the event a Participant shall go from a
classification of an Eligible Employee to an ineligible
Employee, such Former Participant shall continue to
vest in his interest in the Plan for each Year of
Service completed while a noneligible Employee, until
such time as his Participant's Account shall be
forfeited or distributed pursuant to the terms of the
Plan. Additionally, his interest in the Plan shall
continue to share in the earnings of the Trust Fund.
(b) In the event a Participant is no longer a
member of an eligible class of Employees and becomes
ineligible to participate but has not incurred a 1-Year
Break in Service, such Employee will participate
immediately upon returning to an eligible class of
Employees. If such Participant incurs a 1-Year Break in
Service, eligibility will be determined under the break
in service rules of the Plan.
3.6 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be
included as a Participant in the Plan is erroneously omitted and
discovery of such omission is not made until after a contribution
by his Employer for the year has been made, the Employer shall
make a subsequent contribution with respect to the omitted
Employee in the amount which the said Employer would have
contributed with respect to him had he not been omitted. Such
contribution shall be made regardless of whether or not it is
deductible in whole or in part in any taxable year under
applicable provisions of the Code.
3.7 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have
been included as a Participant in the Plan is erroneously
included and discovery of such incorrect inclusion is not made
until after a contribution for the year has been made, the
Employer shall not be entitled to recover the contribution mad
with respect to the ineligible person regardless of whether or
not a deduction is allowable with respect to such contribution.
In such event, the amount contributed with respect to the
ineligible person shall constitute a Forfeiture (except for
Deferred Compensation which shall be distributed to the
ineligible person) for the Plan Year in which the discovery is
made.
3.8 ELECTION NOT TO PARTICIPATE
An Employee may, subject to the approval of the
Employer, elect voluntarily not to participate in the Plan. The
election not to participate must be communicated to the Employer,
in writing, at least thirty (30) days before the beginning of a
Plan Year.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
For each Plan Year, the Employer shall contribute to
the Plan:
(a) The amount of the total salary reduction
elections of all Participants made pursuant to Section
4.2(a), which amount shall be deemed an Employer's
Elective Contribution.
(b) On behalf of each Participant who is eligible
to share in matching contributions for the Plan Year, a
matching contribution equal to 50% of each such
Participant's Deferred Compensation, which amount shall
be deemed an Employer's Non-Elective Contribution.
Except, however, in applying the matching
percentage specified above, only salary reductions up
to 6% of Compensation shall be considered.
(c) A discretionary amount, which amount shall be
deemed an Employer's Non-Elective Contribution.
(d) Notwithstanding the foregoing, however, the
Employer's contributions for any Plan Year shall not
exceed the maximum amount allowable as a deduction to
the Employer under the provisions of Code Section 404.
All contributions by the Employer shall be made in cash
or in such property as is acceptable to the Trustee.
(e) Except, however, to the extent necessary to
provide the top heavy minimum allocations, the Employer
shall make a contribution even if it exceeds the amount
which is deductible under Code Section 404.
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION
(a) Effective for Plan Years beginning prior to
January 1, 1994, each Participant may elect to defer
from 2% to 10% of his Compensation which would have
been received in the Plan Year, but for the deferral
election. Effective for Plan Years beginning on or
after January 1, 1994, each Participant may elect to
defer up to 15% of his Compensation. A deferral
election (or modification of an earlier election) may
not be made with respect to Compensation which is
currently available on or before the date the
Participant executed such election.
Additionally, each Participant may elect to
defer and have allocated for a Plan Year al or a
portion of any cash bonus attributable to services
performed by the Participant for the Employer during
such Plan Year and which would have been received by
the Participant on or before two and one-half months
following the end of the Plan Year but for the deferral
election. A deferral election may not be made with
respect to cash bonuses which are currently available
on or before the date the Participant executed such
election. Notwithstanding the foregoing, cash bonuses
attributable to services performed by the Participant
during a Plan Year but which are to be paid to the
Participant later than two and one-half months after
the close of such Plan Year will be subjected to
whatever deferral election is in effect at the time
such cash bonus would have otherwise been received.
The amount by which Compensation and/or cash
bonuses are reduced shall be that Participant's
Deferred Compensation and be treated as an Employer
Elective Contribution and allocated to that
Participant's Elective Account.
(b) The balance in each Participant's Elective
Account shall be fully Vested at all times and shall
not be subject to Forfeiture for any reason.
(c) Amounts held in the Participant's Elective
Account may not be distributable earlier than:
(1) a Participant's termination of employment,
Total and Permanent Disability, or death;
(2) a Participant's attainment of age 59 1/2;
(3) the termination of the Plan without the
establishment or existence of a "successor plan",
as that term is described in Regulation 1.401(k)-
1(d)(3);
(4) the date of disposition by the Employer to an
entity that is not an Affiliated Employer of
substantially all of the assets (within the
meaning of Code Section 409(d)(2)) used in a trade
or business of such corporation if such
corporation continues to maintain this Plan after
the disposition with respect to a Participant who
continues employment with the corporation
acquiring such assets;
(5) the date of disposition by the Employer or an
Affiliated Employer who maintains the Plan of its
interest in a subsidiary (within the meaning of
Code Section 409(d)(3)) to an entity which is not
an Affiliated Employer but only with respect to a
Participant who continues employment with such
subsidiary; or
(6) the proven financial hardship of a
Participant, subject to the limitations of Section
6.11.
(d) For each Plan Year, a Participant's Deferred
Compensation made under this Plan and all other plans,
contracts or arrangements of the Employer maintaining
this Plan shall not exceed, during any taxable year of
the Participant, the limitation imposed by Code Section
402(g), as in effect at the beginning of such taxable
year. If such dollar limitation is exceeded, a
Participant will be deemed to have notified the
Administrator of such excess amount which shall be
distributed in a manner consistent with 4.2(f). The
dollar limitation shall be adjusted annually pursuant
to the method provided in Code Section 415(d) in
accordance with Regulations.
(e) In the event a Participant has received a
hardship distribution from his Participant's Elective
Account pursuant to Section 6.11 or pursuant to
Regulation 1.401(k)-1(d)(2)(iv)(B) from any other plan
maintained by the Employer, then such Participant shall
not be permitted to elect to have Deferred Compensation
contributed to the Plan on his behalf for a period of
twelve (12) months following the receipt of the
distribution. Furthermore, the dollar limitation under
Code Section 402(g) shall be reduced, with respect to
the Participant's taxable year following the taxable
year in which the hardship distribution was made, by
the amount of such Participant's Deferred Compensation,
if any, pursuant to this Plan (and any other plan
maintained by the Employer) for the taxable year of the
hardship distribution.
(f) If a Participant's Deferred Compensation
under this Plan together with any elective deferrals
(as defined in Regulation 1.402(g)-1(b)) under another
qualified cash or deferred arrangement (as defined in
Code Section 401(k)), a simplified employee pension (as
defined in Code Section 408(k)), a salary reduction
arrangement (within the meaning of Code Section
3121(a)(5)(D)), a deferred compensation plan under Code
Section 457, or a trust described in Code Section
501(c)(18) cumulatively exceed the limitation imposed
by Code Section 402(g) (as adjusted annually in
accordance with the method provided in Code Section
415(d) pursuant to Regulations) for such Participant's
taxable year, the Participant may, not later than
March 1 following the close of the Participant's
taxable year, notify the Administrator in writing of
such excess and request that his Deferred Compensation
under this Plan be reduced by an amount specified by
the Participant. In such event, the Administrator may
direct the Trustee to distribute such excess amount
(and any Income allocable to such excess amount) to the
Participant not later than the first April 15th
following the close of the Participant's taxable year.
Any distribution of less than the entire amount of
Excess Deferred Compensation and Income shall be
treated as a pro rata distribution of Excess Deferred
Compensation and Income. The amount distributed shall
not exceed the Participant's Deferred Compensation
under the plan for the taxable year. Any distribution
on or before the last day of the Participant's taxable
year must satisfy each of the following conditions:
(1) the distribution must be made after the date
on which the Plan received the Excess Deferred
Compensation;
(2) the Participant shall designate the
distribution as Excess Deferred Compensation; and
(3) The plan must designate the distribution as a
distribution of Excess Deferred Compensation.
Any distribution made pursuant to this
Section 4.2(f) shall be mad first from unmatched
Deferred Compensation and, thereafter, simultaneously
from Deferred Compensation which is matched and
matching contributions which relate to such Deferred
Compensation. However, any such matching contributions
which are not Vested shall be forfeited in lieu of
being distributed.
(g) Notwithstanding Section 4.2(f) above, a
Participant's Excess Deferred Compensation shall be
reduced, but not below zero, by any distribution of
Excess Contributions pursuant to Section 4.6(a) for the
Plan Year beginning with or within the taxable year of
the Participant.
(h) At Normal Retirement Date, or such other date
when the Participant shall be entitled to receive
benefits, the fair market value of the Participant's
Elective Account shall be used to provide additional
benefits to the Participants or his Beneficiary.
(i) All amounts allocated to a Participant's
Elective Account may be treated as a Directed
Investment Account pursuant to Section 4.12.
(j) Employer Elective Contributions made
pursuant to this Section may be segregated into a
separate account for each Participant in a federally
insured savings account, certificate of deposit in a
bank or savings and loan association, money market
certificate, or other short-term debt security
acceptable to the Trustee until such time as the
allocations pursuant to Section 4.4 have been made.
(k) The Employer and the Administrator shall
implement the salary reduction elections provided for
herein in accordance with the following:
(1) A Participant may commence making elective
deferrals to the Plan only after first satisfying
the eligibility and participation requirements
specified in Article III. However, the
Participant must make his initial salary deferral
election within a reasonable time, not to exceed
thirty (30) days, after entering the Plan
pursuant to Section 3.3. If the Participant fails
to make an initial salary deferral election within
such time, then such Participant may thereafter
make an election in accordance with the rules
governing modifications. The Participant shall
make such an election by entering into a written
salary reduction agreement with the Employer and
filing such agreement with the Administrator. Such
election shall initially be effective beginning
with the pay period following the acceptance of
the salary reduction agreement by the
Administrator, shall not have retroactive effect
and shall remain in force until revoked.
(2) A Participant may modify a prior election
during the Plan Year and concurrently make a new
election by filing a written notice with the
Administrator within a reasonable time before the
pay period for which such modification is to be
effective. However, modifications to a salary
deferral election shall only be permitted
quarterly, during election periods established by
the Administrator prior to the first day of each
Plan Year quarter. Any modification shall not
have retroactive effect and shall remain in force
until revoke.
(3) A Participant may elect to prospectively
revoke his salary reduction agreement in its
entirety at any time during the Plan Year by
providing the Administrator with thirty (30) days
written notice of such revocation (or upon such
shorter notice period as may be acceptable to the
Administrator). Such revocation shall become
effective as of the beginning of the first pay
period coincident with or next following the
expiration of the notice period. Furthermore, the
termination of the Participant's employment, or
the cessation of participation for any reason,
shall be deemed to revoke any slurry reduction
agreement then in effect, effective immediately
following the close of the pay period within
which such termination or cessation occurs.
4.3 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION
The Employer shall generally pay to the Trustee its
contribution to the Plan for each Plan Year within the time
prescribed by law, including extensions of time, for the filing
of the Employer's federal income tax return for the Fiscal Year.
However, Employer Elective Contributions accumulated
through payroll deductions shall be paid to the Trustee as of the
earliest date on which such contributions can reasonably be
segregated from the Employer's general assets, but in any event
within ninety (90) days from the date on which such amounts would
otherwise have been payable to the Participant in cash. The
provisions of Department of Labor regulations 2510.3-102 are
incorporated herein by reference. Furthermore, any additional
Employer contributions which are allocable to the Participant's
Elective Account for a Plan Year shall be paid to the Plan no
later than the twelve-month period immediately following the
close of such Plan Year.
4.4 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and
maintain an account in the name of each Participant to
which the Administrator shall credit as of each
Anniversary Date all amounts allocated to each such
Participant as set forth herein:
(b) The Employer shall provide the Administrator
with all information required by the Administrator to
make a proper allocation of the Employer's
contributions for each Plan Year. Within a reasonable
period of time after the date of receipt by the
Administrator of such information, the Administrator
shall allocate such contribution as follows:
(1) With respect to the Employer's Elective
Contribution made pursuant to Section 4.1(a), to
each Participant's Elective Account in an amount
equal to each such Participant's Deferred
Compensation for the year.
(2) With respect to the Employer's Non-Elective
Contribution made pursuant to Section 4.1(b), to
each Participant's Account in accordance with
Section 4.1(b).
Any Participant actively employed during the Plan
Year shall be eligible to share in the matching
contribution for the Plan Year.
(3) With respect to the Employer's Non-Elective
Contribution made pursuant to Section 4.1(c), to
each Participant's Account in the same proportion
that each such Participant's Compensation for the
year bears to the total Compensation of all
Participants for such year.
Only Participants who have completed 500 Hours of
Service during the Plan Year shall be eligible to share
in the discretionary contribution for the year.
(c) As of each Anniversary Date any amounts
which became Forfeitures since the last Anniversary
Date shall first be made available to reinstate
previously forfeited account balances of Former
Participants, if any, in accordance with Section
6.4(f)(2). The remaining Forfeitures, if any, shall be
allocated to Participant's Accounts in the following
manner:
(1) Forfeitures attributable to Employer matching
contributions made pursuant to Section 4.1(b)
shall be allocated among the Participants'
Accounts in the same proportion that each such
Participant's Compensation for the year bears to
the total Compensation of all Participants for the
year.
Except, however, Participants who are not
eligible to share in matching contributions
(whether or not a deferral election was made or
suspended pursuant to Section 4.2(e)) for a Plan
Year shall not share in Plan Forfeitures
attributable to Employer matching contributions
for that year.
(2) Forfeitures attributable to Employer
discretionary contributions made pursuant to
Section 4.1(c) shall be allocated among the
Participants' Accounts of Participants otherwise
eligible to share in the allocation of
discretionary contributions for the year in the
same proportion that each such Participant's
Compensation for the year bears to the total
Compensation of all such Participants for the
year.
Provided, however, that in the event the
allocation of Forfeitures provided herein shall cause
the "annual addition" (as defined in Section 4.9) to
any Participant's Account to exceed the amount
allowable by the Code, the excess shall be reallocated
in accordance with Section 4.10.
(d) For any Top Heavy Plan Year, Employees not
otherwise eligible to share in the allocation of
contributions and Forfeitures as provided above, shall
receive the minimum allocation provided for in Section
4.4(g) if eligible pursuant to the provisions of
Section 4.4(I).
(e) Participants who are not actively employed on
the last day of the Plan Year due to Retirement (Early,
Normal or Late), Total and Permanent Disability or
death shall share in the allocation of contributions
and Forfeitures for that Plan Year only if otherwise
eligible in accordance with this Section.
(f) As of each Anniversary Date or other
valuation date, any earnings or losses (net
appreciation or net depreciation) of the trust Fund
shall be allocated in the same proportion that each
Participant's and Former Participant's time weighted
average (based on beginning year base) nonsegregated
accounts bear to the total of all Participants' and
Former Participants' time weighted average (based on
beginning year base) nonsegregated accounts as of such
date.
Participants' transfers from other qualified
plans deposited in the general Trust Fund shall share
in any earnings and losses (net appreciation or net
depreciation) of the Trust Fund in the same manner
provided above. Each segregated account maintained on
behalf of a Participant shall be credited or charged
with its separate earnings and losses.
(g) Minimum Allocations Required for Top Heavy
Plan Years: Notwithstanding the foregoing, for any Top
Heavy Plan Year, the sum of the Employer's
contributions and Forfeitures allocated to the
Participant's Combined Account of each Employee shall
be equal to at least three percent (3%) of such
Employee's "415 Compensation" (reduced by contributions
and forfeitures, if any, allocated to each Employee in
any defined contribution plan included with this plan
in a Required Aggregation Group). However, if (1) the
sum of the Employer's contributions and Forfeitures
allocated to the Participant's Combined Account of each
Key Employee for such Top Heavy Plan Year is less than
three percent (3%) of each Key Employee's "415
Compensation" and (2) this Plan is not required to be
included in an Aggregation Group to enable a defined
benefit plan to meet the requirements of Code Section
401(a)(4) or 410, the sum of the Employer's
contributions and forfeitures allocated to the
Participant's Combined Account of each Employee shall
be equal to the largest percentage allocated to the
Participant's Combined Account of any Key Employee.
However, in determining whether a Non-Key Employee has
received the required minimum allocation, such Non-Key
Employee's Deferred Compensation and matching
contributions needed to satisfy the "actual
Contribution Percentage" tests pursuant to Section
4.7(a) shall not be taken into account.
However, no such minimum allocation shall be
required in this Plan for any Employee who participates
in another defined contribution plan subject to the
Code Section 415 providing such benefits included with
this Plan in a Required Aggregation Group.
(h) For purposes of the minimum allocations set
forth above, the percentage allocated to the
Participant's Combined Account of any Key Employee
shall be equal to the ratio of the sum of the
Employer's contributions and Forfeitures allocated on
behalf of such Key Employee divided by the "415
Compensation" for such Key Employee.
(i) For any Top Heavy Plan Year, the minimum
allocations set forth above shall be allocated to the
Participant's Combined Account of all Employees who are
Participants and who are employed by the Employer on
the last day of the Plan Year, including Employees who
have (1) failed to complete a Year of Service; and (2)
declined to make mandatory contributions (if required)
or, in the case of a cash or deferred arrangement,
elective contributions to the plan.
(j) For the purposes of this Section, "415
Compensation" shall be limited to $200,000. Such amount
shall be adjusted at the same time and in the same
manner as permitted under Code Section 415(d), except
that the dollar increase in effect on January 1 of any
calendar year shall be effective for the Plan Year
beginning with or within such calendar year and the
first adjustment to the $200,000 limitation shall be
effective on January 1, 1990. For any short Plan Year
the "415 Compensation" limit shall be an amount equal
to the "415 Compensation" limit for the calendar year
in which the Plan Year begins multiplied by the ratio
obtained by dividing the number of full months in the
short Plan Year by twelve (12).
(k) Notwithstanding anything herein to the
contrary, Participants who terminated employment for
any reason during the Plan Year shall share in the
salary reduction contributions made by the Employer for
the year of termination without regard to the Hours of
Service credited.
(l) If a Former Participant is reemployed after
five (5) consecutive 1-Year Breaks in Service, then
separate accounts shall be maintained as follows:
(1) one account for nonforfeitable benefits
attributable to pre-break service; and
(2) one account representing his status in the
Plan attributable to post-break service.
(m) Notwithstanding anything to the contrary, if
this is a Plan that would otherwise fail to meet the
requirements of Code Sections 401(a)(26), 410(b)(1) or
410(b)(2)(A)(i) and the Regulations thereunder because
Employer contributions would not be allocated to a
sufficient number or percentage of Participants for a
Plan Year, then the following rules shall apply:
(1) The group of Participants eligible to share
in the Employer's contribution and Forfeitures for
the Plan Year shall be expanded to include the
minimum number of Participants who would not
otherwise be eligible as are necessary to satisfy
the applicable test specified above. The specific
Participants who shall become eligible under the
terms of this paragraph shall be those who are
actively employed on the last day of the Plan Year
and, when compared to similarly situated
Participants, have completed the greatest number
of Hours of Service in the Plan Year.
(2) If after application of paragraph (1) above,
the applicable test is still not satisfied, then
the group of Participants eligible to share in the
Employer's contribution and Forfeitures for the
Plan Year shall be further expanded to include the
minimum number of Participants who are not
actively employed on the last day of the Plan Year
as are necessary to satisfy the applicable test.
The specific Participants who shall become
eligible to share shall be those Participants,
when compared to similarly situated Participants,
who have completed the greatest number of Hours of
Service in the Plan Year before terminating employment.
(3) Nothing in this Section shall permit the
reduction of a Participant's accrued benefit.
Therefore any amounts that have previously been
allocated to Participants may not be reallocated
to satisfy these requirements. In such event, the
Employer shall make an additional contribution
equal to the amount such affected Participants
would have received had they been included in the
allocations, even if it exceeds the amount which
would be deductible under Code Section 404. Any
adjustment to the allocations pursuant to this
paragraph shall be considered a retroactive
amendment adopted by the last day of the Plan
Year.
(4) Notwithstanding the foregoing, for any Top
Heavy Plan Year beginning after December 31, 1992,
if the portion of the Plan which is not a Code
Section 401(k) or 401(m) plan would fail to
satisfy Code Section 410(b) if the coverage tests
were applied by treating those Participants whose
only allocation (under such portion of the Plan)
would otherwise be provided under the top heavy
formula as if they were not currently benefiting
under the plan, then, for purposes of this Section
4.4(m), such Participants shall be treated as not
benefiting and shall therefore be eligible to be
included in the expanded class of Participants who
will share in the allocation provided under the
Plan's non top heavy formula.
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS
(a) Maximum Annual Allocation: For each Plan
Year, the annual allocation derived from Employer
Elective Contributions to a Participant's Elective
Account shall satisfy one of the following tests:
(1) The "Actual Deferral Percentage" for the
Highly Compensated Participant group shall not be
more than the "actual Deferral Percentage" of the
Non-Highly Compensated Participant group
multiplied by 1.25, or
(2) The excess of the "Actual Deferral
Percentage" for the Highly Compensated Participant
group over the "actual Deferral Percentage" for
the Non-Highly Compensated Participant group shall
not be more than two percentage points.
Additionally, the "actual Deferral Percentage" for
the Highly Compensated Participant group shall not
exceed the "actual Deferral Percentage" for the
Non-Highly Compensated Participant group
multiplied by 2. The provisions of Code Section
401(k)(3) and Regulation 1.401(k)-1(b) are
incorporated herein by reference.
However, in order to prevent the multiple use of
the alternative method described in (2) above and
in Code Section 401(m)(9)(A), any Highly
Compensated Participant eligible to make elective
deferrals pursuant to Section 4.2 and to make
Employee contributions or to receive matching
contributions under this Plan or under any other
plan maintained by the Employer or an Affiliated
Employer shall have his actual contribution ratio
reduced pursuant to Regulation 1.401(m)-2, the
provisions of which are incorporated herein by
reference.
(b) For the purposes of this Section "Actual
Deferral Percentage" means, with respect to the Highly
Compensated Participant group and Non-Highly
Compensated Participant group for a Plan Year, the
average of the ratios, calculated separately for each
Participant in such group, of the amount of Employer
Elective Contributions allocated to each Participant's
Elective Account for such Plan Year (including all or
any portion of cash bonuses which may be deferred
pursuant to Section 4.2(a)), to such Participant's
"414(s) Compensation" for such Plan Year. The actual
deferral ratio for each Participant and the "actual
Deferral Percentage" for each group shall be calculated
to the nearest one-hundredth of one percent. Employer
Elective Contributions allocated to each Non-Highly
Compensated Participant's Elective Account shall be
reduced by Excess Deferred Compensation to the extent
such excess amounts are made under this Plan or any
other plan maintained by the Employer.
(c) For the purpose of determining the actual
deferral ratio of a Highly Compensated Employee who is
subject to the Family Member aggregation rules of Code
Section 414(q)(6) because such Participant is either a
"five percent owner" of the Employer or one of the ten
(10) Highly Compensated Employees paid the greatest
"415 Compensation" during the year, the following shall
apply:
(1) The combined actual deferral ratio for the
family group (which shall be treated as one
Highly Compensated Participant) shall be
determined by aggregating Employer Elective
Contributions and "414(s) Compensation" of all
eligible Family Members (including Highly
Compensated Participants). However, in applying
the $200,000 limit to "414(s) Compensation",
Family Members shall include only the affected
Employee's spouse and any lineal descendants who
have not attained age 19 before the close of the
Plan Year.
(2) The Employer Elective Contributions and
"414(s) Compensation" of all Family Members shall
be disregarded for purposes of determining the
"Actual Deferral Percentage of the Non-Highly
Compensated Participant group except to the extent
taken into account in paragraph (1) above.
(3) If a Participant is required to be
aggregated as a member of more than one family
group in a plan, all Participants who are members
of those family groups that include the
Participant are aggregated as one family group in
accordance with paragraphs (1) and (2) above.
(d) For the purposes of Sections 4.5(a) and 4.6,
a Highly Compensated Participant and a Non-Highly
Compensated Participant shall include any Employee
eligible to make a deferral election pursuant to
Section 4.2, whether or not such deferral election was
made or suspended pursuant to Section 4.2.
(e) For the purposes of this Section and Code
Sections 401(a)(4), 410(b) and 401(k), if two or more
plans which include cash or deferred arrangements are
considered one plan for the purposes of Code Section
401(a)(4) or 410(b) (other than Code Section
410(b)(2)(A)(ii)), the cash or deferred arrangements
included in such plans shall be treated as one
arrangement. In addition, two or more cash or deferred
arrangements may be considered as a single arrangement
for purposes of determining whether or not such
arrangements satisfy Code Sections 401(a)(4), 410(b)
and 401(k). In such a case, the cash or deferred
arrangements shall be treated as one arrangement and as
one plan for purposes of this Section and Code Sections
401(a)(4), 410(b) and 401(k). Plans may be aggregated
under this paragraph (e) 40 for Plan Years beginning
after December 31, 1988 only if they have the same plan
year.
Notwithstanding the above, an employee stock
ownership plan described in Code Section 4975(e)(7) or
409 may not be combined with this Plan for purposes of
determining whether the employee stock ownership plan
or this Plan satisfies this Section and Code Sections
401(a)(4), 410(b) and 401(k).
(f) For the purposes of this Section, if a
Highly Compensated Participant is a Participant under
two or more cash or deferred arrangements (other than a
cash or deferred arrangement which is part of an
employee stock ownership plan as defined in Code
Section 4975(e)(7) or 409) of the Employer or an
Affiliated Employer, all such cash or deferred
arrangements shall be treated as one cash or deferred
arrangement for the purpose of determining the actual
deferral ratio with respect to such Highly Compensated
Participant. However, if the cash or deferred
arrangements have different plan years, this paragraph
shall be applied by treating all cash or deferred
arrangements ending with or within the same calendar
year as a single arrangement.
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
In the event that the initial allocations of the
Employer's Elective Contributions made pursuant to Section 4.4 do
not satisfy one of the tests set forth in Section 4.5(a), the
Administrator shall adjust Excess Contributions pursuant to the
options set forth below:
(a) On or before the fifteenth day of the third
month following the end of each Plan Year, the Highly
Compensated Participant having the highest actual
deferral ratio shall have this portion of Excess
Contributions distributed to him until one of the tests
set forth in Section 4.5(a) is satisfied, or until his
actual deferral ratio equals the actual deferral ratio
of the Highly Compensated Participant having the second
highest actual deferral ratio. This process shall
continue until one of the tests set forth in Section
4.5(a) is satisfied. For each Highly Compensated
Participant, the amount of Excess Contributions is
equal to the Elective Contributions on behalf of such
Highly Compensated Participant (determined prior to the
application of this paragraph) minus the amount
determined by multiplying the Highly Compensated
Participant's actual deferral ratio (determined after
application of this paragraph) by his "414(s)
Compensation". However, in determining the amount of
Excess Contributions to be distributed with respect to
an affected Highly Compensated Participant as
determined herein, such amount shall be reduced by any
Excess Deferred Compensation previously distributed to
such affected Highly Compensated Participant for his
taxable year ending with or within such Plan Year.
(1) With respect to the distribution of Excess
Contributions pursuant to (a) above, such
distribution:
(i) may be postponed but not later than the
close of the plan Year following the Plan
Year to which they are allocable;
(ii) shall be made first from unmatched
Deferred Compensation and, thereafter,
simultaneously from Deferred Compensation
which is matched and matching contributions
which relate to such Deferred Compensation.
However, any such matching contributions
which are not Vested shall be forfeited in
lieu of being distributed;
(iii) shall be adjusted for Income; and
(iv) shall be designated by the Employer as a
distribution of Excess Contributions (and Income).
(2) Any distribution of less than the entire
amount of Excess Contributions shall be treated as
a pro rata distribution of Excess Contributions
and Income.
(3) The determination and correction of Excess
Contributions of a Highly Compensated Participant
whose actual deferral ratio is determined under
the family aggregation rules shall be accomplished
by reducing the actual deferral ratio as required
herein, and the Excess Contributions for the
family unit shall then be allocated among the
Family Members in proportion to the Elective
Contributions of each Family Member that were
combined to determine the group actual deferral
ratio.
(b) Within twelve (12) months after the end of
the Plan Year, the Employer may make a special
Qualified Non-elective Contribution on behalf of Non-
Highly Compensated Participants in an amount sufficient
to satisfy one of the tests set forth in Section
4.5(a). Such contribution shall be allocated to the
Participant's Elective Account of each Non-Highly
Compensated Participant in the same proportion that
each Non-Highly Compensated Participant's Compensation
for the year bears to the total Compensation of all
Non-Highly Compensated Participants.
(c) If during a Plan Year the projected aggregate
amount of Elective Contributions to be allocated to all
Highly Compensated Participants under this Plan would,
by virtue of the tests set forth in Section 4.5(a),
cause the Plan to fail such test, then the
Administrator may automatically reduce proportionately
or in the order provided in Section 4.6(a) each
affected Highly Compensated Participant's deferral
election made pursuant to Section 4.2 by an amount
necessary to satisfy one of the tests set forth in
Section 4.5(a).
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) The "Actual Contribution Percentage" for the
Highly Compensated Participant group shall not exceed
the greater of:
(1) 125 percent of such percentage for the Non-
Highly Compensated Participant group; or
(2) the lesser of 200 percent of such percentage
for the Non-Highly Compensated Participant group,
or such percentage for the Non-Highly Compensated
Participant group plus 2 percentage points.
However, to prevent the multiple use of the
alternative method described in this paragraph and
Code Section 401(m)(9)(A), any Highly Compensated
Participant eligible to make elective deferrals
pursuant to Section 4.2 or any other cash or
deferred arrangement maintained by the Employer or
an Affiliated Employer and to make Employee
contributions or to receive matching contributions
under this Plan or under any other plan maintained
by the Employer or an Affiliated Employer shall
have his actual contribution ratio reduced
pursuant to Regulation 1.401(m)-2. The provisions
of Code Section 401(m) and Regulations 1.401(m)-
1(b) and 1.401(m)-2 are incorporated herein by
reference.
(b) For the purposes of this Section and Section
4.8, "Actual Contribution Percentage" for a Plan Year
means, with respect to the Highly Compensated
Participant group, the average of the ratios
(calculated separately for each Participant in each
group) of:
(1) the sum of Employer matching contributions
made pursuant to Section 4.1(b) on behalf of each
such Participant for such Plan Year; to
(2) the Participant's 414(s) Compensation" for
such Plan Year.
(c) For purposes of determining the "actual
Contribution Percentage" and the amount of Excess
Aggregate Contributions pursuant to Section 4.8(d),
only Employer matching contributions (excluding
Employer matching contributions forfeited or
distributed pursuant to Sections 4.2(f) and 4.6(a)(1)
or forfeited pursuant to Section 4.8(a)) contributed to
the Plan prior to the end of the succeeding Plan Year
shall be considered. In addition, the Administrator
may elect to take into account, with respect to
Employees eligible to have Employer matching
contributions pursuant to Section 4.1(b) allocated to
their accounts, elective deferrals (as defined in
Regulation 1.402(g)-1(b)) and qualified non-elective
contributions (as defined in Code Section 401(m)(4)(C))
contributed to any plan maintained by the Employer.
Such elective deferrals and qualified non-elective
contributions shall be treated as Employer matching
contributions subject to Regulation 1.401(m)-1(b)(5)
which is incorporated herein by reference. However, the
Plan Year must be the same as the plan year of the plan
to which the elective deferrals and the qualified non-
elective contributions are made.
(d) For the purpose of determining the actual
contribution ratio of a Highly Compensated Employee who
is subject to the Family Member aggregation rules of
Code Section 414(q)(6) because such Employee is either
a "five percent owner" of the Employer or one of the
ten (10) Highly Compensated Employees paid the greatest
"415 Compensation" during the year, the following shall
apply:
(1) The combined actual contribution ratio for
the family group (which shall be treated as one
Highly Compensated Participant) shall be
determined by aggregating Employer matching
contributions made pursuant to Section 4.1(b) and
"414(s) Compensation" of all eligible Family
Members (including Highly Compensated
Participants). However, in applying the $200,000
limit to "414(s) Compensation", Family Members
shall include only the affected Employee's spouse
and any lineal descendants who have not attained
age 19 before the close of the Plan Year.
(2) The Employer matching contributions made
pursuant to Section 4.1(b) and "414(s)
Compensation" of all Family Members shall be
disregarded for purposes of determining the
"Actual Contribution Percentage" of the Non-Highly
Compensated Participant group except to the extent
taken into account in paragraph (1) above.
(3) If a Participant is required to be
aggregated as a member of more than one family
group in a plan, all Participants who are members
of those family groups that include the
Participant are aggregated as one family group in
accordance with paragraphs (1) and (2) above.
(e) For purposes of this Section and Code
Sections 401(a)(4), 410(b) and 401(m), if two or more
plans of the Employer to which matching contributions,
Employee contributions, or both, are made are treated
as one plan for purposes of Code Sections 401(a)(4) or
410(b) (other than the average benefits test under Code
Section 410(b)(2)(A)(ii)), such plans shall be treated
as one plan. In addition, two or more plans of the
Employer to which matching contributions, Employee
contributions, or both, are made may be considered as a
single plan for purposes of determining whether or not
such plans satisfy Code Sections 401(a)(4), 410(b) and
401(m). In such a case, the aggregated plans must
satisfy this Section and Code Sections 401(a)(4),
410(b) and 401(m) as though such aggregated plans were
a single plan. Plans may be aggregated under this
paragraph (e) only if they have the same plan year.
Notwithstanding the above, an employee stock
ownership plan described in Code Section 4975(e)(7) or
409 may not be aggregated with this Plan for purposes
of determining whether the employee stock ownership
plan or this Plan satisfies this Section and Code
Sections 401(a)(4), 410(b) and 401(m).
(f) If a Highly Compensated Participant is a
Participant under two or more plans (other than an
employee stock ownership plan as defined in Code
Section 4975(e)(7) or 409) which are maintained by the
Employer or an Affiliated Employer to which matching
contributions, Employee contributions, or both, are
made, all such contributions on behalf of such Highly
Compensated Participant shall be aggregated for
purposes of determining such Highly Compensated
Participant's actual contribution ratio. However, if
the plans have different plan years, this paragraph
shall be applied by treating all plans ending with or
within the same calendar year as a single plan.
(g) For purposes of Sections 4.7(a) and 4.8, a
Highly Compensated Participant and Non-Highly
Compensated Participant shall include any Employee
eligible to have Employer matching contributions
pursuant to Section 4.1(b)(whether or not a deferral
election was made or suspended pursuant to Section
4.2(e)) allocated to his account for the Plan Year.
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event that the "Actual Contribution
Percentage" for the Highly Compensated Participant
group exceeds the "Actual Contribution Percentage" for
the Non-Highly Compensated Participant group pursuant
to Section 4.7(a), the Administrator (on or before the
fifteenth day of the third month following the end of
the Plan Year, but in no event later than the close of
the following Plan year) shall direct the Trustee to
distribute to the Highly Compensated Participant having
the highest actual contribution ratio, his Vested
portion of Excess Aggregate Contributions (and Income
allocable to such contributions) and, if forfeitable,
forfeit such non-Vested Excess Aggregate Contributions
attributable to Employer matching contributions (and
Income allocable to such forfeitures) until either one
of the tests set forth in Section 4.7(a) is satisfied,
or until his actual contribution ratio of the Highly
Compensated Participant having the second highest
actual contribution ratio. This process shall continue
until one of the tests set forth in Section 4.7(a) is
satisfied.
If the correction of Excess Aggregate
Contributions attributable to Employer matching
contributions is not in proportion to the Vested and
non-Vested portion of such contribution, then the
Vested portion of the Participant's Account
attributable to Employer matching contributions after
the correction shall be subject to Section 6.5(f).
(b) Any distribution and/or forfeiture of less
than the entire amount of Excess Aggregate
Contributions (and Income) shall be treated as a pro
rata distribution and/or forfeiture of Excess Aggregate
Contributions and Income. Distribution of Excess
Aggregate Contributions shall be designated by the
Employer as a distribution of Excess Aggregate
Contributions (and Income). Forfeitures of Excess
Aggregate Contributions shall be treated in accordance
with Section 4.4. However, no such forfeiture may be
allocated to a Highly Compensated Participant whose
contributions are reduced pursuant to this Section.
(c) Excess Aggregate Contributions, including
forfeited matching contributions, shall be treated as
Employer contributions for purposes of Code Sections
404 and 415 even if distributed from the Plan.
Forfeited matching contributions that are
reallocated to Participants' Accounts for the Plan Year
in which the forfeiture occurs shall be treated as an
"annual addition" pursuant to Section 4.9(b) for the
Participants to whose Accounts they are reallocated and
for the Participants from whose Accounts they are
forfeited.
(d) For each Highly Compensated Participant, the
amount of Excess Aggregate Contributions is equal to
the Employer matching contributions made pursuant to
Section 4.1(b) and any qualified non-elective
contributions or elective deferrals taken into account
pursuant to Section 4.7(c) on behalf of the Highly
Compensated Participant (determined prior to the
application of this paragraph) minus the amount
determined by multiplying the Highly Compensated
Participant's actual contribution ratio (determined
after application of this paragraph) by his "414(s)
Compensation". The actual contribution ratio must be
rounded to the nearest one-hundredth of one percent. In
no case shall the amount of Excess Aggregate
Contribution with respect to any Highly Compensated
Participant exceed the amount of Employer matching
contributions made pursuant to Section 4.1(b) and any
qualified non-elective contributions or elective
deferrals taken into account pursuant to Section 4.7(c)
on behalf of such Highly Compensated Participant for
such Plan Year.
(e) The determination of the amount of Excess
Aggregate Contributions with respect to any Plan Year
shall be made after first determining the Excess
Contributions, if any, to be treated as voluntary
Employee contributions due to recharacterization for
the plan year of any other qualified cash or deferred
arrangement (as defined in Code Section 401(k))
maintained by the Employer that ends with or within the
Plan Year.
(f) If the determination and correction of Excess
Aggregate Contributions of a Highly Compensated
Participant whose actual contribution ratio is
determined under the family aggregation rules, then the
actual contribution ratio shall be reduced and the
Excess Aggregate Contributions for the family unit
shall be allocated among the Family Members in
proportion to the sum of Employer matching
contributions made pursuant to Section 4.1(b) and any
qualified non-elective contributions or elective
deferrals taken into account pursuant to Section 4.7(c)
of each Family Member that were combined to determine
the group actual contribution ratio.
(g) If during a Plan Year the projected aggregate
amount of Employer matching contributions to be
allocated to all Highly Compensated Participants under
this Plan would, by virtue of the tests set forth in
Section 4.7(a), cause the plan to fail such tests, then
the Administrator may automatically reduce
proportionately or in the order provided in Section
4.8(a) each affected Highly Compensated Participant's
projected share of such contributions by an amount
necessary to satisfy one of the tests set forth in
Section 4.7(a).
(h) Notwithstanding the above, within twelve
(12) months after the end of the Plan Year, the
Employer may make a special Qualified Non-Elective
Contribution on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy one of
the tests set forth in Section 4.7(a). Such
contribution shall be allocated to the Participant's
Elective Account of each Non-Highly Compensated
Participant in the same proportion that each Non-Highly
Compensated Participant's Compensation for the year
bears to the total Compensation of all Non-Highly
Compensated Participants. A separate accounting shall
be maintained for the purpose of excluding such
contributions from the "Actual Deferral Percentage"
tests pursuant to Section 4.5(a).
4.9 MAXIMUM ANNUAL ADDITIONS
(a) Notwithstanding the foregoing, the maximum
"annual additions" credited to a Participant's accounts
for any "limitation year" shall equal the lesser of:
(1) $30,000 (or, if greater, one-fourth of the dollar
limitation in effect under Code Section 415(b)(1)(A))
or (2) twenty-five percent (25%) of the Participant's
"415 Compensation" for such "limitation year". For any
short "limitation year", the dollar limitation in (1)
above shall be reduced by a fraction, the numerator of
which is the number of full months in the short
"limitation year" and the denominator of which is
twelve (12).
(b) For purposes of applying the limitations of
Code Section 415, "annual additions" means the sum
credited to a Participant's accounts for any
"limitation year" of (1) Employer contributions, (2)
Employee contributions, (3) forfeitures, (4) amounts
allocated, after March 31, 1984, to an individual
medical account, as defined in Code Section 415(1)(2)
which is part of a pension or annuity plan maintained
by the Employer and (5) amounts derived from
contributions paid or accrued after December 31, 1985,
in taxable years ending after such date, which are
attributable to post-retirement medical benefits
allocated to the separate account of a key employee (as
defined in Code Section 419A(d)(3)) under a welfare
benefit plan (as defined in Code Section 419(e))
maintained by the Employer. Except, however, the "415
Compensation" percentage limitation referred to in
paragraph (a)(2) above shall not apply to: (1) any
contribution for medical benefits (within the meaning
of Code Section 419A(f)(2)) after separation from
service which is otherwise treated as an "annual
addition", or (2) any amount otherwise treated as an
"annual addition" under Code Section 415(l)(1).
(c) For purposes of applying the limitations of
Code Section 415, the transfer of funds from one
qualified plan to another is not an "annual addition."
In addition, the following are not Employee
contributions for the purpose of Section 4.9(b)(2): (1)
rollover contributions (as defined in Code Sections
402(a)(5), 403(a)(4), 403(b)(8) and 408(d)(3)); (2)
repayments of loans made to a Participant from the
Plan; (3) repayments of distributions received by an
Employee pursuant to Code Section 411(a)(7)(B) (cash-
outs); (4) repayments of distributions received by an
Employee pursuant to code Section
411(a)(3)(D)(mandatory contributions); and (5) Employee
contributions to a simplified employee pension
excludable from gross income under Code Section
408(k)(6).
(d) For purposes of applying the limitations of
Code Section 415, the "limitation year" shall be the
Plan Year.
(e) The dollar limitation under Code Section
415(b)(1)(A) stated in paragraph (a)(1) above shall be
adjusted annually as provided in Code Section
415(d)pursuant to the Regulations. The adjusted
limitation is effective as of January 1st of each
calendar year and is applicable to "limitation years"
ending with or within the calendar year.
(f) For the purpose of this Section, all
qualified defined benefit plans (whether terminated or
not) ever maintained by the Employer shall be treated
as one defined benefit plan, and all qualified defined
contribution plans (whether terminated or not) ever
maintained by the Employer shall be treated as one
defined contribution plan.
(g) For the purpose of this Section, if the
Employer is a member of a controlled group of
corporations, trades or businesses under common control
(as defined by Code Section 1563(a) or Code Section
414(b) and (c) as modified by Code Section 415(h)), is
a member of an affiliated service group (as defined by
Code Section 414(m)), or is a member of a group of
entities required to be aggregated pursuant to
Regulations under Code Section 414(o), all Employees of
such Employers shall be considered to be employed by a
single Employer.
(h) For the purpose of this Section, if this Plan
is a Code Section 413(c) plan, all Employers of a
Participant who maintain this Plan will be considered
to be a single Employer.
(i)(1) If a Participant participates in
more than one defined contribution plan maintained
by the Employer which have different Anniversary
Dates, the maximum "annual additions" under this
Plan shall equal the maximum "annual additions"
for the "limitation year" minus any "annual
additions" previously credited to such
Participant's accounts during the "limitation
year".
(2) If a Participant participates in both a
defined contribution plan subject to Code Section
412 and a defined contribution plan not subject to
Code Section 412 maintained by the Employer which
have the same Anniversary Date, "annual additions"
will be credited to the Participant's accounts
under the defined contribution plan subject to
Code Section 412 prior to crediting "annual
additions" to the Participant's accounts under the
defined contribution plan not subject to Code
Section 412.
(3) If a Participant participates in more than
one defined contribution plan not subject to Code
Section 412 maintained by the Employer which have
the same Anniversary Date, the maximum "annual
additions" under this Plan shall equal the product
of (A) the maximum "annual additions" for the
"limitation year" minus any "annual additions"
previously credited under subparagraphs (1) or (2)
above, multiplied by (B) a fraction (i) the
numerator of which is the "annual additions" which
would be credited to such Participant's accounts
under this Plan without regard to the limitations
of Code Section 415 and (ii) the denominator of
which is such "annual additions" for all plans
described in this subparagraph.
(j) If an Employee is (or has been) a Participant
in one or more defined benefit plans and one or more
defined contribution plans maintained by the Employer,
the sum of the defined benefit plan fraction and the
defined contribution plan fraction for any "limitation
year" may not exceed 1.0.
(k) The defined benefit plan fraction for any
"limitation year" is fraction, the numerator of which
is the sum of the Participant's projected annual
benefits under all the defined benefit plans (whether
or not terminated) maintained by the Employer, and the
denominator of which is the lesser of 125 percent of
the dollar limitation determined for the "limitation
year" under Code Sections 415(b) and (d) or 140 percent
of the highest average compensation, including any
adjustments under Code Section 415(b).
Notwithstanding the above, if the Participant
was a Participant as of the first day of the first
"limitation year" beginning after December 31, 1986, in
one or more defined benefit plans maintained by the
Employer which were in existence on May 6, 1986, the
denominator of this fraction will not be less than 125
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.
(l) The defined contribution plan fraction for
any "limitation year" is a fraction, the numerator of
which is the sum of the annual additions to the
Participant's Account under all the defined
contribution plans (whether or not terminated)
maintained by the Employer for the current and all
prior "limitation years" (including the annual
additions attributable to the Participant's
nondeductible Employee contributions to all defined
benefit plans, whether or not terminated, maintained by
the Employer, and the annual additions attributable to
all welfare benefit funds, as defined in Code Section
419(e), and individual medical accounts, as defined in
Code Section 415(l)(2), maintained by the Employer),
and the denominator of which is the sum of the maximum
aggregate amounts for the current and all prior
"limitation years" of service with the Employer
(regardless of whether a defined contribution plan was
maintained by the Employer). The maximum aggregate
amount in any "limitation year" is the lesser of 125
percent of the dollar limitation determined under Code
Sections 415(b) and (d) in effect under Code Section
415(c)(1)(A) or 35 percent of the Participant's
Compensation for such year.
If the Employee was a Participant as of the
end of the first day of the first "limitation year"
beginning after December 31, 1986, in one or more
defined contribution plans maintained by the Employer
which were in existence on May 6, 1986, the numerator
of this fraction will be adjusted if the sum of this
fraction and the defined benefit fraction would
otherwise exceed 1.0 under the terms of this Plan.
Under the adjustment, an amount equal to the product of
(1) the excess of the sum of the fractions over 1.0
times (2) the denominator of this fraction, will be
permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the
fractions as they would be computed as of the end of
the last "limitation year" beginning before January 1,
1987, and disregarding any changes in the terms and
conditions of the Plan made after May 5, 1986, but
using the Code Section 415 limitation applicable to the
first "limitation year" beginning on or after January
1, 1987. The annual addition for any "limitation year"
beginning before January 1, 1987 shall not be
recomputed to treat all Employee contributions as
annual additions.
(m) Notwithstanding the foregoing, for any
"limitation year" in which the Plan is a Top Heavy
Plan, 100 percent shall be substituted for 125 percent
in Sections 4.9(k) and 4.9(l) unless the extra minimum
allocation is being provided pursuant to Section 4.4.
However, for any "limitation year" in which the Plan is
a Super Top Heavy Plan, 100 percent shall be
substituted for 125 percent in any event.
(n) Notwithstanding anything contained in this
Section to the contrary, the limitations, adjustments
and other requirements prescribed in this Section shall
at all times comply with the provisions of Code Section
415 and the Regulations thereunder, the terms of which
are specifically incorporated herein by reference.
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If, as a result of the allocation of
Forfeitures, a reasonable error in estimating a
Participant's Compensation, 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 Participant under the limits of
Section 4.9 or other facts and circumstances to which
Regulation 1.415-6(b)(6) shall be applicable, the
"annual additions" under this Plan would cause the
maximum "annual additions" to be exceeded for any
Participant, the Administrator shall (1) distribute any
elective deferrals (within the meaning of Code Section
402(g)(3)) or return any voluntary Employee
contributions credited for the "limitation year" to the
extent that the return would reduce the "excess amount"
in the Participant's accounts (2) hold any "excess
amount" remaining after the return of any elective
deferrals or voluntary Employee contributions in a
"Section 415 suspense account" (3) use the "Section 415
suspense account" in the next "limitation year" (and
succeeding "limitation years" if necessary) to reduce
Employer contributions for that Participant if that
Participant is covered by the Plan as of the end of the
"limitation year", or if the Participant is not so
covered, allocate and reallocate the "Section 415
suspense account" in the next "limitation year" (and
succeeding "limitation years" if necessary) to all
Participants in the Plan before any Employer or
Employee contributions which would constitute "annual
additions" are made to the Plan for such "limitation
year" (4) reduce Employer contributions to the Plan for
such "limitation year" by the amount of the "Section
415 suspense account" allocated and reallocated during
such "limitation year".
(b) For purposes of this Article, "excess amount"
for any Participant for a "limitation year" shall mean
the excess, if any, of (1) the "annual additions" which
would be credited to his account under the terms of the
Plan without regard to the limitations of Code Section
415 over (2) the maximum "annual additions" determined
pursuant to Section 4.9.
(c) For purposes of this Section, "Section 415
suspense account" shall mean an unallocated account
equal to the sum of "excess amounts" for all
Participants in the Plan during the "limitation year".
The "Section 415 suspense account" shall not share in
any earnings or losses of the Trust Fund.
4.11 TRANSFERS FROM QUALIFIED PLANS
(a) With the consent of the Administrator,
amounts may be transferred from other qualified plans
by Employees, provided that the trust from which such
funds are transferred permits the transfer to be made
and the transfer will not jeopardize the tax exempt
status of the Plan or Trust or create adverse tax
consequences for the Employer. The amounts transferred
shall be set up in a separate account herein referred
to as a "Participant's Rollover Account". Such account
shall be fully Vested at all times and shall not be
subject to Forfeiture for any reason.
(b) Amounts in a Participant's Rollover Account
shall be held by the Trustee pursuant to the provisions
of this Plan and may not be withdrawn by, or
distributed to the Participant, in whole or in part,
except as provided in paragraphs (c) and (d) of this
Section.
(c) Except as permitted by Regulations (including
Regulation 1.411(d)-4), amounts attributable to
elective contributions (as defined in Regulation
1.401(k)-1(g)(3)), including amounts treated as
elective contributions, which are transferred from
another qualified plan in a plan-to-plan transfer shall
be subject to the distribution limitations provided for
in Regulation 1.401(k)-1(d).
(d) At Normal Retirement Date, or such other date
when the Participant or his Beneficiary shall be
entitled to receive benefits, the fair market value of
the Participant's Rollover Account shall be used to
provide additional benefits to the participant or his
Beneficiary. Any distributions of amounts held in a
Participant's Rollover Account shall be made in a
manner which is consistent with and satisfies the
provisions of Section 6.5, including, but not limited
to, all notice and consent requirements of Code Section
411(a)(11) and the Regulations thereunder. Furthermore,
such amounts shall be considered as part of a
Participant's benefit in determining whether an
involuntary cash-out of benefits without Participant
consent may be made.
(e) The Administrator may direct that employee
transfers made after a valuation date be segregated
into a separate account for each Participant in a
federally insured savings account, certificate of
deposit in a bank or savings and loan association,
money market certificate, or other short term debt
security acceptable to the Trustee until such time as
the allocations pursuant to this Plan have been made,
at which time they may remain segregated or be invested
as part of the general Trust Fund, to be determined by
the Administrator.
(f) All amounts allocated to a Participant's
Rollover Account may be treated as a Directed
Investment Account pursuant to Section 4.12.
(g) For purposes of this Section, the term
"qualified plan" shall mean any tax qualified plan
under Code Section 401(a). The term "amounts
transferred from other qualified plans" shall mean: (i)
amounts transferred to this Plan directly from another
qualified plan; (ii) distributions from another
qualified plan which are eligible rollover
distributions and which are either transferred by the
Employee to this Plan within sixty (60) days following
his receipt thereof or are transferred pursuant to a
direct rollover; (iii) amounts transferred to this Plan
from a conduit individual retirement account provided
that the conduit individual retirement account has no
asses other than assets which (A) were previously
distributed to the Employee by another qualified plan
as a lump-sum distribution (B) were eligible for tax-
free rollover to a qualified plan and (C) were
deposited in such conduit individual retirement account
within sixty (60) days of receipt thereof and other
than earnings on said assets; and (iv) amounts
distributed to the Employee from a conduit individual
retirement account meeting the requirements of clause
(iii) above, and transferred by the Employee to this
Plan within sixty (60) days of his receipt thereof from
such conduit individual retirement account.
(h) Prior to accepting any transfers to which
this Section applies, the Administrator may require the
Employee to establish that the amounts to be
transferred to this Plan meet the requirements of this
Section and may also require the Employee to provide an
opinion of counsel satisfactory to the Employer that
the amounts to be transferred meet the requirements of
this Section.
(i) This Plan shall not accept any direct or
indirect transfers (as that term is defined and
interpreted under Code Section 401(a)(11) and the
Regulations thereunder) from a defined benefit plan,
money purchase plan (including a target benefit plan),
stock bonus or profit sharing plan which would
otherwise have provided for a life annuity form of
payment to the Participant.
(j) Notwithstanding anything herein to the
contrary, a transfer directly to this Plan from another
qualified plan (or a transaction having the effect of
such a transfer) shall only be permitted if it will not
result in the elimination or reduction of any "Section
411(d)(6) protected benefit" as described in Section
8.1.
4.12 DIRECTED INVESTMENT ACCOUNT
(a) The Administrator, in his sole discretion,
may determine that all Participants be permitted to
direct the Trustee as to the investment of all or a
portion of the interest in any one or more of their
individual account balances. If such authorization is
given, Participants may, subject to a procedure
established by the Administrator and applied in a
uniform nondiscriminatory manner, direct the Trustee in
writing to invest any portion of their account in
specific assets, specific funds or other investments
permitted under the Plan and the directed investment
procedure. That portion of the account of any
Participant so directing will thereupon be considered a
Directed Investment Account, which shall not share in
Trust Fund earnings.
(b) A separate Directed Investment Account shall
be established for each Participant who has directed an
investment. Transfers between the Participant's regular
account and his Directed Investment Account shall be
charged and credited as the case may be to each
account. The Directed Investment Account shall not
share in Trust Fund earnings, but it shall be charged
or credited as appropriate with the net earnings,
gains, losses and expenses as well as any appreciation
or depreciation in market value during each Plan Year
attributable to such account.
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each
Anniversary Date, and at such other date or dates deemed
necessary by the Administrator, herein called "valuation date",
to determine the net worth of the assets comprising the Trust
Fund as it exists on the "valuation date". In determining such
net worth, the Trustee shall value the assets comprising the
Trust Fund at their fair market value as of the "valuation date"
and shall deduct all expenses for which the Trustee has not yet
obtained reimbursement from the Employer or the Trust Fund.
5.2 METHOD OF VALUATION
In determining the fair market value of securities held
in the Trust Fund which are listed on a registered stock
exchange, the Administrator shall direct the Trustee to value the
same at the prices they were last traded on such exchange
preceding the close of business on the "valuation date". If such
securities were not traded on the "valuation date" or if the
exchange on which they are traded was not open for business on
the "valuation date" then the securities shall be valued at the
prices at which they were last traded prior to the "valuation
date". Any unlisted security held in the Trust Fund shall be
valued at its bid price next preceding the close of business on
the "valuation date", which bid price shall be obtained from a
registered broker or an investment banker. In determining the
fair market value of assets other than securities for which
trading or bid prices can be obtained, the Trustee may appraise
such assets itself, or in its discretion, employ one or more
appraisers for that purpose and rely on the values established by
such appraiser or appraisers.
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate his employment with the
Employer and retire for the purposes hereof on his Normal
Retirement Date or Early Retirement Date. However, a Participant
may postpone the termination of his employment with the Employer
to a later date, in which event the participation of such
Participant in the plan, including the right to receive
allocations pursuant to Section 4.4, shall continue until his
Late Retirement Date. Upon a Participant's Retirement Date or
attainment of his Normal Retirement Date without termination of
employment with the Employer, or as soon thereafter as is
practicable, the Trustee shall distribute all amounts credited to
such Participant's Combined Account in accordance with Section
6.5.
6.2 DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before his
Retirement Date or other termination of his employment,
all amounts credited to such Participant's Combined
Account shall become fully Vested. The Administrator
shall direct the Trustee, in accordance with the
provisions of Sections 6.6 and 6.7, to distribute the
value of the deceased Participant's accounts to the
Participant's Beneficiary.
(b) Upon the death of a Former Participant, the
Administrator shall direct the Trustee, in accordance
with the provisions of Sections 6.67 and 6.7, to
distribute any remaining Vested amounts credited to the
accounts of a deceased Former Participant to such
Former Participant's Beneficiary.
(c) Any security interest held by the Plan by
reason of an outstanding loan to the Participant or
Former Participant shall be taken into account in
determining the amount of the death benefit.
(d) The administrator may require such proper
proof of death and such evidence of the right of any
person to receive payment of the value of the account
of a deceased Participant or Former Participant as the
Administrator may deem desirable. The Administrator's
determination of death and of the right of any person
to receive payment shall be conclusive.
(e) The Beneficiary of the death benefit payable
pursuant to this Section shall be the Participant's
spouse. Except, however, the Participant may designate
a Beneficiary other than his spouse if:
(1) the spouse has waived the right to be the
Participant's Beneficiary, or
(2) the Participant is legally separated or has
been abandoned (within the meaning of local law)
and the Participant has a court order to such
effect (and there is no "qualified domestic
relations order" as defined in Code Section
414(p) which provides otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a
Beneficiary shall be made on a form satisfactory to the
Administrator. A Participant may at any time revoke his
designation of a Beneficiary or change his Beneficiary
by filing written notice of such revocation or change
with the Administrator. However, the Participant's
spouse must again consent in writing to any change in
Beneficiary unless the original consent acknowledged
that the spouse had the right to limit consent only to
a specific Beneficiary and that the spouse voluntarily
elected to relinquish such right. In the event no valid
designation of Beneficiary exists at the time of the
Participant's death, the death benefit shall be payable
to his estate.
(f) Any consent by the Participant's spouse to
waive any rights to the death benefit must be in
writing, must acknowledge the effect of such wavier,
and be witnessed by a Plan representative or a notary
public. Further, the spouse's consent must be
irrevocable and must acknowledge the specific nonspouse
Beneficiary.
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
In the event of a Participant's Total and Permanent
Disability prior to his Retirement Date or other termination of
his employment, all amounts credited to such Participant's
Combined Account shall become fully vested. In the event of a
Participant's Total and Permanent Disability, the Trustee, in
accordance with the provisions of Section 6.5 and 6.7, shall
distribute to such Participant all amounts credited to such
Participant's Combined Account as though he had retired.
6.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) On or before the Anniversary Date
coinciding with or subsequent to the termination of a
Participant's employment for any reason other than
death, Total and Permanent Disability or retirement,
the Administrator may direct the Trustee to segregate
the amount of the Vested portion of such Terminated
Participant's Combined Account and invest the aggregate
amount thereof in a separate, federally insured savings
account, certificate of deposit, common or collective
trust fund of a bank or a deferred annuity. In the
event the Vested portion of a Participant's Combined
Account is not segregated, the amount shall remain in a
separate account for the Terminated Participant and
share in allocations pursuant to Section 4.4 until such
time as a distribution is made to the Terminated
Participant.
Distribution of the funds due to a Terminated
Participant shall be made on the occurrence of an event
which would result in the distribution had the
Terminated Participant remained in the employ of the
Employer (upon the Participant's death, Total and
Permanent Disability, Early or Normal Retirement).
However, at the election of the Participant, the
Administrator shall direct the Trustee to cause the
entire Vested portion of the Terminated Participant's
Combined Account to be payable to such Terminated
Participant upon the completion of the daily valuation
following termination of employment. Any distribution
under this paragraph shall be made in a manner which is
consistent with and satisfies the provisions of Section
6.5, including, but not limited to, all notice and
consent requirements of Code Section 411(a)(11) and the
Regulations thereunder.
If the value of a Terminated Participant's
Vested benefit derived from Employer and Employee
contributions does not exceed $3,500 and has never
exceeded $3,500 at the time of any prior distribution,
the Administrator shall direct the Trustee to cause the
entire Vested benefit to be paid to such Participant in
a single lump sum.
(b) The Vested portion of any Participant's
Account shall be a percentage of the total amount
credited to his Participant's Account determined on the
basis of the Participant's number of Years of Service
according to the following schedule:
Vesting Schedule
Years of Service Percentage
1 25 %
2 50 %
3 75 %
4 100 %
(c) Notwithstanding the vesting schedule above,
the Vested percentage of a Participant's Account shall
not be less than the Vested percentage attained as of
the later of the effective date or adoption date of
this amendment and restatement.
(d) Notwithstanding the vesting schedule above,
upon the complete discontinuance of the Employer's
contributions to the Plan or upon any full or partial
termination of the Plan, all amounts credited to the
account of any affected Participant shall become 100%
Vested and shall not thereafter be subject to Forfeiture.
(e) The computation of a Participant's
nonforfeitable percentage of his interest in the Plan
shall not be reduced as the result of any direct or
indirect amendment to this Plan. For this purpose, the
Plan shall be treated as having been amended if the
Plan provides for an automatic change in vesting due to
a change in top heavy status. In the event that the
Plan is amended to change or modify any vesting
schedule, a Participant with at least three (3) Years
of Service as of the expiration date of the election
period may elect to have his nonforfeitable percentage
computed under the Plan without regard to such
amendment. If a participant fails to make such
election, then such Participant shall be subject to the
new vesting schedule. The Participant's election
period shall commence on the adoption date of the
amendment and shall end 60 days after the latest of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives
written notice of the amendment from the
Employer or Administrator.
(f) (1) If any Former Participant shall be
reemployed by the Employer before a 1-Year Break in
Service occurs, he shall continue to participate in the
Plan in the same manner as if such termination had not occurred.
(2) If any Former Participant shall be
reemployed by the Employer before five(5)consecutive 1-Year Breaks
in Service, and such Former Participant had received a distribution
of his entire Vested interest prior to his reemployment, his forfeited
account shall be reinstated only if he repays the full amount
distributed to him before the earlier of five (5) years after the first
date on which the Participant is subsequently reemployed by the
Employer or the close of the first period of five (5) consecutive
1-Year Breaks in Service commencing after the distribution. In the
event the Former Participant does repay the full amount distributed to
him, the undistributed portion of the Participant's Account must be
restored in full, unadjusted by any gains or losses occurring
subsequent to the Anniversary Date or other valuation date coinciding
with or preceding his termination. The source for such reinstatement
shall first be any Forfeiture occurring during the year. If such source
is insufficient, then the Employer shall contribute an amount which is
sufficient to restore any such forfeited Accounts provided, however,
that if a discretionary contribution is made for such year pursuant to
Section 4.1(c), such contribution shall first be applied to restore any
such Accounts and the remainder shall be allocated in accordance
with Section 4.4.
(3) If any Former Participant is reemployed
after a 1-Year Break in Service has occurred, Years of Service shall
include Years of Service prior to his 1-Year Break in Service subject
to the following rules:
(i) If a Former Participant has a 1-Year
Break in Service, his pre-break and post-break service shall be used
for computing Years of Service for eligibility and for vesting purposes
only after he has been employed for one (1) Year of Service following
the date of his reemployment with the Employer;
(ii) Any Former Participant who under the
Plan does not have a nonforfeitable right to any interest in the Plan
resulting from Employer contributions shall lose credits otherwise
allowable under (i) above if his consecutive 1-Year Breaks in Service
equal or exceed the greater of (A) five (5) or (B) the aggregate number
of his pre-break Years of Service;
(iii) After five (5) consecutive 1-Year
Breaks in Service, a former Participant's Vested Account balance
attributable to pre-break service shall not be increased as a result of
post-break service;
(iv) If a Former Participant who has not
had his Years of Service before a 1-Year Break in Service disregarded
pursuant to (ii) above completes one (1) Year of Service for eligibility
purposes following his reemployment with the Employer, he shall
participate in the Plan retroactively from his date of reemployment;
(v) If a Former Participant who has not
has his Years of Service before a 1-Year Break in Service disregarded
pursuant to (ii) above completes a Year of Service (a 1-Year Break in
Service previously occurred, but employment had not terminated), he
shall participate in the Plan retroactively from the first day of the
Plan Year during which he completes one (1) Year of Service.
6.5 DISTRIBUTION OF BENEFITS
(a) The Administrator, pursuant to the election of the
Participant, shall direct the Trustee to distribute to a
Participant or his Beneficiary any amount to which he is entitled
under the Plan in one or more of the following methods:
(1) One lump-sum payment in cash or in property;
(2) Payments over a period certain in monthly,
quarterly, semiannual, or annual cash installments. In
order to provide such installment payments, the
Administrator may (A) segregate the aggregate amount
thereof in a separate, federally insured savings
account, certificate of deposit in a bank or savings
and loan association, money market certificate or other
liquid short-term security or (B) purchase a
nontransferable annuity contract for a term certain
(with no life contingencies) providing for such
payment. The period over which such payment is to be
made shall not extend beyond the Participant's life
expectancy (or the life expectancy of the Participant
and his designated Beneficiary).
(b) Any distribution to a Participant who has a
benefit which exceeds, or has ever exceeded, $3,500 at the time
of any prior distribution shall require such Participant's
consent if such distribution commences prior to the later of his
Normal Retirement Age or age 62. With regard to this required
consent:
(1) The Participant must be informed of his right to
defer receipt of the distribution. If a Participant
fails to consent, it shall be deemed an election to
defer the commencement of payment of any benefit.
However, any election to defer the receipt of benefits
shall not apply with respect to distributions which are
required under Section 6.5(c).
(2) Notice of the rights specified under this
paragraph shall be provided no less than 30 days and no
more than 90 days before the first day on which all
events have occurred which entitle the Participant to
such benefit.
(3) Written consent of the Participant to the
distribution must not be made before the Participant
receives the notice and must not be made more than 90
days before the first day on which all events have
occurred which entitle the Participant to such benefit.
(4) No consent shall be valid if a significant
detriment is imposed under the Plan on any Participant
who does not consent to the distribution.
(c) Notwithstanding any provision in the Plan to the
contrary, the distribution of a Participant's benefits shall be
made in accordance with the following requirements and shall
otherwise comply with Code Section 401(a)(9) and the Regulations
thereunder (including Regulation 1.401(a)(9)-2), the provisions
of which are incorporated herein by reference:
(1) A Participant's benefits shall be distributed to
him not later than April 1st of the calendar year
following the later of (i) the calendar year in which
the Participant attains age 70 1/2 or (ii) the calendar
year in which the Participant retires, provided,
however, that this clause (ii) shall not apply in the
case of a Participant who is a "five (5) percent owner"
at any time during the five (5) Plan Year period ending
in the calendar year in which he attains age 70 1/2 or,
in the case of a Participant who becomes a "five (5)
percent owner" during any subsequent Plan Year, clause
(ii) shall no longer apply and the required beginning
date shall be the April 1st of the calendar year
following the calendar year in which such subsequent
Plan Year ends. Alternatively, distributions to a
Participant must begin no later than the applicable
April 1st as determined under the preceding sentence
and must be made over a period certain measured by the
life expectancy of the Participant (or the life
expectancies of the Participant and his designated
Beneficiary) in accordance with Regulations.
Notwithstanding the foregoing, clause (ii) above shall
not apply to any Participant unless the Participant
unless the Participant had attained age 70 1/2 before
January 1, 1988 and was not a "five (5) percent owner"
at any time during the Plan Year ending with or within
the calendar year in which the Participant attained age
66 1/2 or any subsequent Plan Year.
(2) Distributions to a Participant and his
Beneficiaries shall only be made in accordance with the
incidental death benefit requirements of Code Section
401(a)(9)(G) and the Regulations thereunder.
(d) For purposes of this Section, the life expectancy
of a Participant and a Participant's spouse may, at the election
of the Participant or the Participant's spouse, be redetermined
in accordance with Regulations. The election, once made, shall
be irrevocable. If no election is made by the time distributions
must commence, then the life expectancy of the Participant and
the Participant's spouse shall not be subject to recalculation.
Life expectancy and joint and last survivor expectancy shall be
computed using the return multiples in Tables V and VI of
Regulation 1.72-9.
(e) All annuity Contracts under this Plan shall be
non-transferable when distributed. Furthermore, the terms of any
annuity Contract purchased and distributed to a Participant or
spouse shall comply with all of the requirements of the Plan.
(f) If a distribution is made at a time when a
Participant is not fully Vested in his Participant's Account
(employment has not terminated) and the Participant may increase
the Vested percentage in such account:
(1) a separate account shall be established for the
Participant's interest in the Plan as of the time of
the distribution; and
(2) at any relevant time, the Participant's Vested
portion of the separate account shall be equal to an
amount ("X") determined by the formula:
X equals P(AB plus (R x D)) - (R x D)
For purposes of applying the formula: p is the Vested
percentage at the relevant time, AB is the account
balance at the relevant time, D is the amount of
distribution, and R is the ratio of the account balance
at the relevant item to the account balance after
distribution.
6.6 DISTRIBUTION OF BENEFITS UPON DEATH
(a)(1) The death benefit payable pursuant to Section 6.2
shall be paid to the Participant's Beneficiary within a
reasonable time after the Participant's death by either of the
following methods, as elected by the Participant (or if no
election has been made prior to the Participant's death, by his
Beneficiary) subject, however, to the rules specified in Section
6.6(b):
(i) One lump-sum payment in cash or in property;
(ii) Payment in monthly, quarterly, semi-annual, or
annual cash installments over a period to be determined
by the Participant or his Beneficiary. After periodic
installments commence, the Beneficiary shall have the
right to direct the Trustee to reduce the period over
which such periodic installments shall be made, and the
Trustee shall adjust the cash amount of such periodic
installments accordingly.
(b) Notwithstanding any provision in the Plan to the
contrary, distributions upon the death of a Participant shall be
made in accordance with the following requirements and shall
otherwise comply with Code Section 401(a)(9) and the Regulations
thereunder. If it is determined pursuant to Regulations that
the distribution of a Participant's interest has begun and the
Participant dies before his entire interest has been distributed
to him, the remaining portion of such interest shall be
distributed at least as rapidly as under the method of
distribution selected pursuant to Section 6.5 as of his date of
death. If a Participant dies before he has begun to receive any
distributions of his interest under the Plan or before
distributions are deemed to have begun pursuant to Regulations,
then his death benefit shall be distributed to his Beneficiaries
by December 31st of the calendar year in which the fifth
anniversary of his date of death occurs.
However, the 5-year distribution requirement of the
preceding paragraph shall not apply to any portion of the
deceased Participant's interest which is payable to or for the
benefit of a designated Beneficiary. In such event, such portion
may, at the election of the Participant (or the Participant's
designated Beneficiary), be distributed over a period not
extending beyond the life expectancy of such designated
Beneficiary provided such distribution begins not later than
December 31st of the calendar year immediately following the
calendar year in which the Participant died. However, in the
event the Participant's spouse (determined as of the date of the
Participant's death) is his Beneficiary, the requirement that
distributions commence within one year of a Participant's death
shall not apply. In lieu thereof, distributions must commence on
or before the later of : (1) December 31st of the calendar year
immediately following the calendar year in which the Participant
died; or (2) December 31st of the calendar year in which the
Participant would have attained age 70 1/2. If the surviving
spouse dies before distributions to such spouse begin, then the
5-year distribution requirement of this Section shall apply as if
the spouse was the Participant.
(c) For purposes of Section 6.6(b), the election by a
designated Beneficiary to be excepted from the 5-year
distribution requirement must be made no later than December 31st
of the calendar year following the calendar year of the
Participant's death. Except, however, with respect to a
designated Beneficiary who is the Participant's surviving spouse,
the election must be made by the earlier of: (1) December 31st of
the calendar year immediately following the calendar year in
which the Participant died or, if later, the calendar year in
which the Participant would have attained age 70 1/2; or (2)
December 31st of the calendar year which contains the fifth
anniversary of the date of the Participant's death. An election
by a designated Beneficiary must be in writing and shall be
irrevocable as of the last day of the election period stated
herein. In the absence of an election by the Participant or a
designated Beneficiary, the 5-year distribution requirement shall
apply.
(d) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse may, at the election of
the Participant or the participant's spouse, be redetermined in
accordance with Regulations. The election, once made, shall be
irrevocable. If no election is made by the time distributions
must commence, then the life expectancy of the Participant and
the Participant's spouse shall not be subject to recalculation.
Life expectancy and joint and last survivor expectancy shall be
computed using the return multiples in Tables V and VI of
Regulation 1.72-9.
6.7 TIME OF SEGREGATION OF DISTRIBUTION
Except as limited by Sections 6.5 and 6.6, whenever the
Trustee is to make a distribution or to commence a series of
payments on or as of an Anniversary Date, the distribution or
series of payments may be made or begun on such date or as soon
thereafter as is practicable. However, unless a Former
Participant elects in writing to defer the receipt of benefits
(such election may not result in a death benefit that is more
than incidental), the payment of benefits shall begin not later
than the 60th day after the close of the Plan Year in which the
latest of the following events occurs: (a) the date on which the
Participant attains the earlier of age 65 or the Normal
Retirement Age specified herein; (b) the 10th anniversary of the
year in which the Participant commenced participation in the
Plan; or (c) the date the Participant terminates his service with
the Employer.
6.8 DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor, then
the Administrator may direct that such distribution be paid to
the legal guardian, or if none, to a parent of such Beneficiary
or a responsible adult with whom the Beneficiary maintains his
residence, or to the custodian for such Beneficiary under the
Uniform Gift to Minors Act or Gift to Minors Act, if such is
permitted by the laws of the state in which said Beneficiary
resides. Such a payment to the legal guardian, custodian or
parent of a minor Beneficiary shall fully discharge the Trustee,
Employer, and Plan from further liability on account thereof.
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution
payable to a Participant or his Beneficiary hereunder shall, at
the later of the Participant's attainment of age 62 or his Normal
Retirement Age, remain unpaid solely by reason of the inability
of the Administrator, after sending a registered letter, return
receipt requested, to the last known address, and after further
diligent effort, to ascertain the whereabouts of such Participant
or his Beneficiary, the amount so distributable shall be treated
as Forfeiture pursuant to the Plan. In the event a Participant
or Beneficiary is located subsequent to his benefit being
reallocated, such benefit shall be restored.
6.10 PRE-RETIREMENT DISTRIBUTION
At such time as a Participant shall have attained the age of
59 1/2 years, the Administrator, at the election of the
Participant, shall direct the Trustee to distribute all or a
portion of the amount then credited to the accounts maintained on
behalf of the Participant. Such distributions shall be
distributed in minimum amounts of $500. However, no distribution
from the Participant's Account shall occur prior to 100% vesting.
In the event that the Administrator makes such a distribution,
the Participant shall continue to be eligible to participate in
the Plan on the same basis as any other Employee. Any
distribution made pursuant to this Section shall be made in a
manner consistent with Section 6.5, including, but not limited
to, all notice and consent requirements of Code Section
411(a)(11) and the Regulations thereunder.
Notwithstanding the above, pre-retirement distributions from
a Participant's Elective Account shall not be permitted prior to
the Participant attaining age 59 1/2 except as otherwise
permitted under the terms of the Plan.
6.11 ADVANCED DISTRIBUTION FOR HARDSHIP
(a) The Administrator, at the election of the
participant, shall direct the Trustee to distribute to any
Participant in any one Plan Year up to the lesser of 100% of
his Participant's Elective Account valued as of the last
Anniversary Date or other valuation date or the amount
necessary to satisfy the immediate and heavy financial need
of the Participant. Any distribution made pursuant to this
Section shall be deemed to be made as of the first day of
the Plan Year or, if later, the valuation date immediately
preceding the date of distribution, and the Participant's
Elective Account shall be reduced accordingly. Withdrawal
under this Section shall be authorized only if the
distribution is on account of:
(1) Expenses for medical care described in Code
Section 213(d)previously incurred by the Participant,
his spouse, or any of his dependents (as defined in
Code Section 152) or necessary for these persons to
obtain medical care;
(2) The costs directly related to the purchase of a
principal residence for the participant (excluding
mortgage payments);
(3) Payment of tuition and related educational fees
for the next twelve (12) months of post-secondary
education for the Participant, his spouse, children, or
dependents; or
(4) Payments necessary to prevent the eviction of the
Participant from his principal residence or
foreclosure on the mortgage of the Participant's
principal residence.
(b) No distribution shall be made pursuant to this
Section unless the Administrator, based upon the
Participant's representation and such other facts as are
known to the Administrator, determines that all of the
following conditions are satisfied:
(1) The distribution is not in excess of the amount of
the immediate and heavy financial need of the
Participant. The amount of the immediate and heavy
financial need may include any amounts necessary to pay
any federal, state, or local income taxes or penalties
reasonably anticipated to result from the distribution;
(2) The Participant has obtained all distributions,
other than hardship distributions, and all nontaxable
(at the time of the loan)
loans currently available under all plans maintained by
the Employer;
(3) The Plan, and all other plans maintained by the
Employer, provide that the Participant's elective
deferrals and voluntary Employee contributions will be
suspended for at least twelve (12) months after receipt
of the hardship distribution or, the Participant,
pursuant to a legally enforceable agreement, will
suspend his elective deferrals and voluntary Employee
contributions to the Plan and all other plans
maintained by the Employer for at least twelve (12)
months after receipt of the hardship distribution; and
(4) The Plan, and all other plans maintained by the
Employer, provide that the Participant may not make
elective deferrals 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 deferrals for the
taxable year of the hardship distribution.
(c) Notwithstanding the above, distributions from the
Participant's Elective Account pursuant to this Section
shall be limited, as of the date of distribution, to the
Participant's Elective Account as of the end of the last
Plan Year ending before July 1, 1989, plus the total
Participant's Deferred Compensation after such date, reduced
by the amount of any previous distributions pursuant to this
Section and Section 6.10.
(d) Any distribution made pursuant to this Section
shall be made in a manner which is consistent with and
satisfies the provisions of Section 6.5, including, but not
limited to, all notice and consent requirements of Code
Section 411(a)(11) and the Regulations thereunder.
6.12 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION
All rights and benefits, including elections, provided
to a Participant in this Plan shall be subject to the rights
afforded to any "alternate payee" under a "qualified domestic
relations order." Furthermore, a distribution to an "alternate
payee" shall be permitted if such distribution is authorized by a
"qualified domestic relations order," even if the affected
Participant has not separated from service and has not reached
the "earliest retirement age" under the Plan. For purposes of
the Section, "alternate payee," "qualified domestic relations
order" and "earliest retirement age" shall have the meaning set
forth under Code Section 414(p).
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE
The Trustee shall have the following categories of
responsibilities:
(a) Consistent with the "funding policy and
method" determined by the Employer, to invest, manage,
and control the Plan assets subject, however, to the
direction of an Investment Manager if the Trustee
should appoint such manager as to all or a portion of
the assets of the Plan;
(b) At the direction of the Administrator, to pay
benefits required under the Plan to be paid to
Participants, or, in the event of their death, to their
Beneficiaries;
(c) To maintain records of receipts and
disbursements and furnish to the Employer and/or
Administrator for each Plan Year a written annual
report per Section 7.7; and
(d) If there shall be more than one Trustee, they
shall act by a majority of their number, but may
authorize one or more of them to sign papers on their
behalf.
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE
(a) The Trustee shall invest and reinvest the
Trust Fund to keep the Trust Fund invested without
distinction between principal and income and in such
securities or property, real or personal, wherever
situated, as the Trustee shall deem advisable,
including, but not limited to, stocks, common or
preferred, bonds and other evidences of indebtedness or
ownership, and real estate or any interest therein.
The Trustee shall at all times in making investments of
the Trust Fund consider, among other factors, the short
and long-term financial needs of the Plan on the basis
of information furnished by the Employer. In making
such investments, the Trustee shall not be restricted
to securities or other property of the character
expressly authorized by the applicable law for trust
investments; however, the Trustee shall give due
regard to any limitations imposed by the Code or the
Act so that at all times the Plan may qualify as a
qualified Profit Sharing Plan and Trust.
(b) The Trustee may employ a bank or trust company
pursuant to the terms of its usual and customary bank agency
agreement, under which the duties of such bank or trust
company shall be of a custodial, clerical and record-keeping
nature.
7.3 OTHER POWERS OF THE TRUSTEE
The Trustee, in addition to all powers and authorities
under common law, statutory authority, including the Act, and other
provisions of the Plan, shall have the following powers and
authorities, to be exercised in the Trustee's sole discretion:
(a) To purchase, or subscribe for, any securities or
other property and to retain the same;
(b) To sell, exchange, convey, transfer, grant options
to purchase, or otherwise dispose of any securities or other
property held by the Trustee, by private contract or at
public auction. No person dealing with the Trustee shall be
bound to see to the application of the purchase money or to
inquire into the validity, expediency, or propriety of any
such sale or other disposition, with or without
advertisement;
(c) To vote upon any stocks, bonds, or other
securities; to give general or special proxies or powers of
attorney with or without power of substitution,; to exercise
any conversion privileges, subscription rights or other
options, and to make any payments incidental thereto; to
oppose, or to consent to, or otherwise participate in,
corporate reorganizations or other changes affecting
corporate securities, and to delegate discretionary powers,
and to pay any assessments or charges in connection
therewith; and generally to exercise any of the powers of an
owner with respect to stocks, bonds, securities, or other
property;
(d) To cause any securities or other property to be
registered in the Trustee's own name or in the name of one
or more of the Trustee's nominees, and to hold any
investments in bearer form, but the books and records of the
Trustee shall at all times show that all such investments
are part of the Trust Fund;
(e) To borrow or raise money for the purposes of the
Plan in such amount, and upon such terms and conditions, as
the Trustee shall deem advisable; and for any sum so
borrowed, to issue a promissory note as Trustee, and to
secure the repayment thereof by pledging all, or any part,
of the Trust Fund; and no person lending money to the
Trustee shall be bound to see to the application of the
money lent or to inquire into the validity, expediency, or
propriety of any borrowing;
(f) To accept and retain for such time as the Trustee
may deem advisable any securities or other property received
or acquired as Trustee hereunder, whether or not such
securities or other property would normally be purchased as
investments hereunder;
(g) To make, execute, acknowledge, and deliver any and
all documents of transfer and conveyance and any and all
other instruments that may be necessary or appropriate to
carry out the powers herein granted;
(h) To settle, compromise, or submit to arbitration
any claims, debts, or damages due or owing to or from the
Plan, to commence or defend suits or legal or administrative
proceedings, and to represent the Plan in all suits and
legal and administrative proceedings;
(i) To employ suitable agents and counsel and to pay
their reasonable expenses and compensation, and such agent
or counsel may or may not be agent or counsel for the
Employer
(j) To apply for and procure from responsible
insurance companies, to be selected by the Administrator, as
an investment of the Trust fund such annuity, or other
Contracts (on the life of any Participant) as the
Administrator shall deem proper; to exercise, at any time or
from time to time, whatever rights and privileges may be
granted under such annuity, or other Contracts; to collect,
receive, and settle for the proceeds of all such annuity or
other Contracts as and when entitled to do so under the
provisions thereof;
(k) To invest funds of the Trust in time deposits or
savings accounts bearing a reasonable rate of interest in
the Trustee's bank;
(l) To invest in Treasury Bills and other forms of
United States government obligations;
(m) To invest in shares of investment companies
registered under the Investment Company Act of 1940;
(n) To sell, purchase and acquire put or call options
if the options are traded on and purchased through a
national securities exchange registered under the Securities
Exchange act of 1934, an amended, or, if the options are not
traded on a national securities exchange, are guaranteed by
a member firm of the New York Stock Exchange;
(o) To deposit monies in federally insured savings
accounts or certificates of deposit in banks or savings and
loan associations;
(p) To pool all or any of the Trust Fund, from time to
time, with assets belonging to any other qualified employee
pension benefit trust created by the employer or an
affiliated company of the Employer, and to commingle such
assets and make joint or common investments and carry joint
accounts on behalf of this Plan and such other trust or
trusts, allocating undivided shares or interests in such
investments or accounts or any pooled assets of the two or
more trusts in accordance with their respective interests;
(q) To do all such acts and exercise all such rights
an privileges, although not specifically mentioned herein,
as the Trustee may deem necessary out carry out the purposes
of the Plan.
(r) Directed Investment Account. The powers granted
to the Trustee shall be exercised in the sole fiduciary
discretion of the Trustee. However, if Participants are so
empowered by the Administrator, each Participant my direct
the Trustee to separate and keep separate all or a portion
of his account; and further each Participant is authorized
and empowered, in his sole and absolute discretion, to give
directions to the Trustee pursuant to the procedure
established by the Administrator and in such form as the
Trustee may require concerning the investment of the
Participant's Directed Investment Account. The Trustee
shall comply as promptly as practicable with directions
given by the Participant hereunder. The Trustee may refuse
to comply with any direction from the Participant in the
event the Trustee, in its sole and absolute discretion,
deems such directions improper by virtue of applicable law.
The Trustee shall not be responsible or liable for any loss
or expense which may result form the Trustee's refusal or
failure to comply with any directions from the Participant.
Any costs and expenses related to compliance with the
Participant's directions shall be borne by the Participant's
Directed Investment Account.
7.4 LOANS TO PARTICIPANTS
(a) The Trustee may, effective January 1, 1994, in the
Trustee's discretion, make loans to Participants and
Beneficiaries under the following circumstances: (1) loans
shall be made available to all Participants and
Beneficiaries on a reasonably equivalent basis; (2) loans
shall not be made available to Highly Compensated Employees
in an amount greater than the amount made available to other
Participants and Beneficiaries; (3) loans shall bear a
reasonable rate of interest; (4) loans shall be adequately
secured; and (5) shall provide for repayment over a
reasonable period of time.
(b) Loans made pursuant to this Section (when added to
the outstanding balance of all other loans made by the Plan
to the Participant) shall be limited to the lesser of:
(1) $50,000 reduced by the excess (if any) of the
highest outstanding balance of loans from the Plan to
the Participant during the one year period ending on
the day before the date on which such loan is made,
over the outstanding balance of loans from the Plan to
the Participant on the date on which such loan was
made, or
(2) one-half (1/2) of the present value of the non-
forfeitable accrued benefit of the Participant under
the Plan.
For purposes of this limit, all plans of the
Employer shall be considered one plan.
(c) Loans shall provide for level amortization with
repayments to be made not less frequently than quarterly
over a period not to exceed five (5) years. However, loans
used to acquire any dwelling unit which, within a reasonable
time, is to be used (determined at the time the loan is
made) as a principal residence of the Participant shall
provide for periodic repayment over a reasonable period of
time that may exceed five (5) years.
(d) Any loans granted or renewed shall be made
pursuant to a Participant loan program. Such loan program
shall be established in writing and must include, but need
not be limited to, the following:
(1) the identity of the person or positions authorized
to administer the Participant loan program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or
denied;
(4) limitations, if any, on the types and amounts of
loans offered;
(5) the procedure under the program for determining a
reasonable rate of interest;
(6) the types of collateral which may secure a
Participant loan; and
(7) the events constituting default and the steps that
will be taken to preserve Plan assets.
Such Participant loan program shall be contained
in a separate written document which, when properly
executed, is hereby incorporated by reference and made a
part of the Plan. Furthermore, such Participant loan
program may be modified or amended in writing from time to
time without the necessity of amending this Section.
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS
At the direction of the Administrator, the Trustee shall,
from time to time, in accordance with the terms of the Plan, make
payments out of the Trust Fund. The Trustee shall not be responsible
in any way for the application of such payments.
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES
The Trustee shall be paid such reasonable compensation as
shall from time to time be agreed upon in writing by the Employer and
the Trustee. An individual serving as Trustee who already receives
full-time pay from the Employer shall not receive compensation from
the Plan. In addition, the Trustee shall be reimbursed for any
reasonable expenses, including reasonable counsel fees incurred by it
as Trustee. Such compensation and expenses shall be paid from the
Trust Fund unless paid or advanced by the Employer. All taxes of any
kind and all kinds whatsoever that my be levied or assessed under
existing or future laws upon, or in respect of, the Trust fund or the
income thereof, shall be paid from the Trust fund.
7.7 ANNUAL REPORT OF THE TRUSTEE
Within a reasonable period of time after the later of the
Anniversary Date or receipt of the Employer's contribution for each
Plan Year, the Trustee shall furnish to the Employer and Administrator
a written statement of account with respect to the Plan Year for which
such contribution was made setting forth:
(a) the net income, or loss, of the Trust Fund;
(b) the gains, or losses, realized by the Trust Fund
upon sales or other disposition of the assets;
(c) the increase, or decrease, in the value of the
Trust Fund;
(d) all payments and distributions made from the Trust
Fund; and
(e) such further information as the Trustee and/or
Administrator deems appropriate. The Employer, forthwith
upon its receipt of each such statement of account, shall
acknowledge receipt thereof in writing and advise the
Trustee and/or Administrator of its approval or disapproval
thereof. Failure by the Employer to disapprove any such
statement of account within ninety (90) days after its
receipt thereof shall be deemed an approval thereof. The
approval by the Employer of any statement of account shall
be binding as to all matters embraced therein as between the
Employer and the Trustee to the same extent as if the
account of the Trustee had been settled by judgment or
decree in an action for a judicial settlement of its account
in a court of competent jurisdiction in which the Trustee,
the Employer and all persons having or claiming an interest
in the Plan were parties; provided, however, that nothing
herein contained shall deprive the Trustee of its right to
have its accounts judicially settled if the Trustee so
desires.
7.8 AUDIT
(a) If an audit of the Plan's records shall be
required by the Act and the regulations thereunder for any
Plan Year, the Administrator shall direct the Trustee to
engage on behalf of all Participants an independent
qualified public accountant for that purpose. Such
accountant shall, after an audit of the books and records of
the Plan in accordance with generally accepted auditing
standards, within a reasonable period after the close of the
Plan Year, furnish to the Administrator and the Trustee a
report of his audit setting forth is opinion as to whether
any statements, schedules or lists that are required by Act
Section 103 or the Secretary of Labor to be filed with the
Plan's annual report, are presented fairly in conformity
with generally accepted accounting principles applied
consistently. All auditing and accounting fees shall be an
expense of and may, at the election of the Administrator, be
paid from the Trust Fund.
(b) If some or all of the information necessary to
enable the Administrator to comply with Act Section 103 is
maintained by a bank, insurance company, or similar
institution, regulated and supervised and subject to
periodic examination by a state or federal agency, it shall
transmit and certify the accuracy of that information to
the Administrator as provided in Act Section 103(b) within
one hundred twenty (120) days after the end of the Plan Year
or by such other date as may be prescribed under regulations
of the Secretary of Labor.
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE
(a) The Trustee may resign at any time by
delivering to the Employer, at least thirty (30) days before
its effective date, a written notice of his resignation.
(b) The Employer may remove the Trustee by
mailing by registered or certified mail, addressed to such Trustee
at his last known address, at least thirty (30) days before its
effective date, a written notice of his removal.
(c) Upon death, resignation, incapacity, or
removal of any Trustee, a successor may be appointed by
the Employer; and such successor, upon accepting such
appointment in writing and delivering same to the
Employer, shall, without further act, become vested
with all the estate, rights, powers, discretions, and
duties of the predessor with like respect as if he were
originally named as a Trustee herein. Until such a
successor is appointed, the remaining Trustee or
Trustees shall have full authority to act under the
terms of the Plan.
(d) The Employer may designate one or more
successors prior to the death, resignation, incapacity,
or removal of a Trustee. In the event a successor is
so designated by the Employer and accepts such
designation, the successor shall, without further act,
become vested with all the estate, rights, powers,
discretions, and duties of his predecessor with the
like effect as it he were originally named as Trustee
herein immediately upon the death, resignation,
incapacity, or removal of his predecessor.
(e) Whenever any Trustee hereunder ceases to
serve as such, he shall furnish to the Employer and
Administrator a written statement of account with
respect to the portion of the Plan Year during which
he served as Trustee. This statement shall be either
(i) included as part of the annual statement of account
for the Plan Year required under Section 7.7 or
(ii) set forth in a special statement. Any such special
statement of account should be rendered to the Employer
no later than the due date of the annual statement of
account for the Plan Year. The procedures set forth in
Section 7.7 for the approval by the Employer of annual
statements of account shall apply to any special
statement of account rendered hereunder and approval by
the Employer of any such special statement in the
manner provided in Section 7.7 shall have the same
effect upon the statement as the Employer's approval of
an annual statement of account. No successor to the
Trustee shall have any duty or responsibility to
investigate the acts or transactions of any predecessor
who has rendered all statements of account required by
Section 7.7 and this subparagraph.
7.10 TRANSFER OF INTEREST
Notwithstanding any other provision contained in this
Plan, the Trustee at the direction of the Administrator shall
transfer the Vested interest, if any, of such Participant in his
account to another trust forming part of a pension, profit
sharing or stock bonus plan maintained by such Participant's new
employer and represented by said employer in writing as meeting
the requirements of Code Section 401(a), provided that the trust
to which such transfers are made permits the transfer to be made.
7.11 DIRECT ROLLOVER
(a) This section applies to distributions made
on or after January 1, 1993. Notwithstanding any provision of the
Plan to the contrary that would otherwise limit a distributee's election
under this Section, a distributee may elect, at the time and in the manner
prescribed by the Plan Administrator, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement plan specified
by the distributee in a direct rollover.
(b) For purposes of this Section the following definitions
shall apply:
(1) An eligible rollover distribution is any
distribution of all or any portion of the balance
to the credit of the distributee, except that an
eligible rollover distribution does not include:
any distribution that is one of a series of
substantially equal periodic payments (not less
frequently than annually) made for the life(or
life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the
distributee and the distributee's designated
beneficiary, or for a specified period of ten
years or more; any distribution to the extent
such distribution is required under Code Section
401(a)(9); and the portion of any distribution
that is not includible in gross income
(determined without regard to the exclusion for
net unrealized appreciation with respect to
employer securities).
(2) An eligible retirement plan is an
individual retirement account described in Code Section
408(a),an individual retirement annuity
described in Code Section 408(b), an annuity plan
described in code Section 403(a), or a qualified
trust described in Code Section 401(a), that
accepts the distributee's eligible rollover
distribution. However, in the case of an eligible
rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement
account or individual retirement annuity.
(3) A distributee includes an Employee or
former Employee. In addition, the Employee's or former
Employee's surviving spouse and the Employee's or
former Employee's spouse or former spouse who is the
alternate payee under a qualified domestic
relations order, as defined in Code Section
414(p), are distributees with regard to the
interest of the spouse or former spouse.
(4) A direct rollover is a payment by the Plan
to the eligible retirement plan specified by the distributee.
7.12 TRUSTEE INDEMNIFICATION
The Trustee shall be indemnified and saved harmless by the
Employer from and against any and all liability to which the
Trustee shall be subject by reason of carrying out any
direction of the Employer or its agent; provided, however, that
the Trustee shall not be indemnified to the extent that such
liability arises as a consequence of the Trustee's own willful
misconduct. The Trustee's indemnification shall include all
expenses, reasonably incurred in it defense, if the Employer
fails to provide such defense. The cost and expense of
enforcing the right of indemnification, shall be paid by the
Employer.
7.13 EMPLOYER SECURITIES AND REAL PROPERTY
The Trustee shall be empowered to acquire and hold
"qualifying Employer securities" and "qualifying Employer real
property," as those terms are defined in the Act, provided,
however, that the Trustee shall not be permitted to acquire
any qualifying Employer securities or qualifying Employer real
property if, immediately after the acquisition of such
securities or property, the fair market value of all qualifying
Employer securities and qualifying Employer real property
held by the Trustee hereunder should amount to more than 100%
of the fair market value of all the assets in the Trust Fund.
ARTICLE VIII
AMENDMENT, TERMINATION AND MERGERS
8.1 AMENDMENT
(a) The Employer shall have the right at any
time to amend the Plan, subject to the limitations
of this Section. However, any amendment which affects
the rights, duties, or responsibilities of the Trustee
and Administrator may only be made with the Trustee's
and Administrator's written consent. Any such amendment
shall become effective as provided therein upon its
execution. The Trustee shall not be required to execute
any such amendment unless the Trust provisions
contained herein are a part of the Plan and the
amendment affects the duties of the Trustee hereunder.
(b) No amendment to the Plan shall be effective if it
authorizes or permits any part of the Trust Fund
(other than such part as is required to pay taxes and
administration expenses) to be used for or diverted
to any purpose other than for the exclusive benefit of
the Participant's or their Beneficiaries or estates; or
causes any reduction in the amount credited to the
account of any Participant; or causes or permits any
portion of the Trust fund to revert to or become
property of the Employer.
(c) Except as permitted by Regulations, no Plan
amendment or transaction having the effect of a Plan
amendment ( such as a merger, plan transfer or similar
transaction) shall be effective to the extent it
eliminates or reduces any "Section 411(d)(6) protected
benefit" or adds of modifies conditions relating to
"Section 411(d)(6) protected benefits" the result of
which is a further restriction on such benefit unless
such protected benefits are preserved with respect to
benefits accrued as of the later of the adoption date
or effective date of the amendment. "Section 411(d)
(6) protected benefits" are benefits described in Code
Section 411(d)(6)(A), early retirement benefits and
retirement-type subsidies, and optional forms of b
benefit.
8.2 TERMINATION
(a) The Employer shall have the right at any
time to terminate the Plan by delivering to the Trustee
and Administrator written notice of such termination.
Upon any full or partial termination, all amounts
credited to the affected Participants' Combined
Accounts shall become 100% Vested as provided in
Section 6.4 and shall not thereafter be subject to
forfeiture, and all unallocated amounts shall be
allocated to the accounts of all participants in
accordance with the provisions hereof.
(b) Upon the full termination of the plan, the
Employer shall direct the distribution of the assets of
the Trust Fund to Participants in a manner which is
consistent with and satisfies the provisions of Section
6.5. Distributions to a Participant shall be made in
cash or in property or through the purchase of
irrevocable nontransferable deferred commitments from
an insurer. Except as permitted by Regulations, the
termination of the plan shall not result in the
reduction of "Section 411(d)(6) protected benefits" in
accordance with Section 8.1(c).
8.3 MERGER OR CONSOLIDATION
This Plan and Trust may be merged or consolidated with,
or its assets and/or liabilities may be transferred to any other
plan and trust only if the benefits which would be received by a
Participant of this plan, in the event of a termination of the
plan immediately after such transfer, merger or consolidation,
are at least equal to the benefits the Participant would have
received if the Plan had terminated immediately before the
transfer, merger or consolidation, and such transfer, merger or
consolidation does not otherwise result in the elimination or
reduction of any "Section 411(d)(6) protected benefits" in
accordance with Section 8.1(c).
ARTICLE IX
MISCELLANEOUS
9.1 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract
between the Employer and any Participant or to be a consideration
or an inducement for the employment of any Participant or
Employee. Nothing contained in this Plan shall be deemed to give
any Participant or Employee the right to be retained in the
service of the Employer or to interfere with the right of the
Employer to discharge any Participant or Employee at any time
regardless of the effect which such discharge shall have upon him
as a Participant of this Plan.
9.2 ALIENATION
(a) Subject to the exceptions provided below, no
benefit which shall be payable out of the Trust Fund to
any person (including a Participant or his Beneficiary)
shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge,
encumbrance, or charge, any any attempt to anticipate,
alienate, sell, transfer, assign, pledge, encumber, or
charge the same shall be void; and no such benefit
shall in any manner be liable for, or subject to, the
debts, contracts, liabilities, engagements, or torts of
any such person, nor shall it be subject to attachment
or legal process for or against such person, and the
same shall not be recognized by the Trustee, except to
such extent as may be required by law.
(b) This provision shall not apply to the extent
a Participant or Beneficiary is indebted to the Plan,
as a result of a loan from the Plan. At the time a
distribution is to be made to or for a Participant's or
Beneficiary's benefit, such proportion of the amount
distributed as shall equal such loan indebtedness shall
be paid by the Trustee to the Trustee or the
Administrator, at the direction of the administrator,
to apply against or discharge such loan indebtedness.
Prior to making a payment, however, the Participant or
Beneficiary must be given written notice by the
Administrator that such loan indebtedness is to be so
paid in whole or part from his Participant's Combined
Account. If the Participant or Beneficiary does not
agree that the loan indebtedness is a valid claim
against his Vested Participant's Combined Account, he
shall be entitled to a review of the validity of the
claim in accordance with procedures provided in
Sections 2.12 and 2.13.
(c) This provision shall not apply to a
"qualified domestic relations order" defined in Code
Section 414(p), and those other domestic relations
orders permitted to be so treated by the Administrator
under the provisions of the Retirement Equity Act of
1984. The Administrator shall establish a written
procedure to determine the qualified status of domestic
relations orders and to administer distributions under
such qualified orders. Further, to the extent provided
under a "qualified domestic relations order," a former
spouse of a Participant shall be treated as the spouse
or surviving spouse for all purposes under the Plan.
9.3 CONSTRUCTION OF PLAN
This Plan and Trust shall be construed and enforced
according to the Act and the laws of the State of Connecticut,
other than its laws respecting choice of law, to the extent not
preempted by the Act.
9.4 GENDER AND NUMBER
Wherever any words are used herein in the masculine,
feminine or neuter gender, they shall be construed as though they
were also used in another gender in all cases where they would so
apply, and whenever any words are used herein in the singular or
plural form, they shall be construed as though they were also
used in the other form in all cases where they would so apply.
9.5 LEGAL ACTION
In the event any claim, suit, or proceeding is brought
regarding the Trust and/or Plan established hereunder to which
the Trustee or the Administrator may be a party, and such claim,
suit, or proceeding is resolved in favor of the Trustee or
Administrator, they shall be entitled to be reimbursed from the
Trust Fund for any and all costs, attorney's fees, and other
expenses pertaining thereto incurred by them for which they shall
have become liable.
9.6 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise
specifically permitted by law, it shall be impossible
by operation of the Plan or of the Trust , by
termination of either, by power of revocation or
amendment, by the happening of any contingency, by
collateral arrangement or by any other means, for any
part of the corpus or income of any trust fund
maintained pursuant to the Plan or any funds
contributed thereto to be used for, or diverted to,
purposes other than the exclusive benefit of
Participants, Retired Participants, or their
Beneficiaries.
(b) In the event the Employer shall make an
excessive contribution under a mistake of fact pursuant
to Act Section 403(c)(2)(A), the Employer may demand
repayment of such excessive contribution at any time
within one (1) year following the time of payment and
the Trustees shall return such amount to the Employer
within the one (1) year period. Earnings of the Plan
attributable to the excess contributions may not be
returned to the Employer but any losses attributable
thereto must reduce the amount so returned.
9.7 BONDING
Every Fiduciary, except a bank or an insurance company,
unless exempted by the Act and regulations thereunder, shall be
bonded in an amount not less than 10% of the amount of the funds
such Fiduciary handles; provided, however, that the minimum bond
shall be $1,000 and the maximum bond, $500,000. The amount of
funds handled shall be determined at the beginning of each Plan
Year by the amount of funds handled by such person, group, or
class to be covered and their predecessors, if any, during the
preceding Plan Year, or if there is no preceding Plan Year, then
by the amount if the funds to be handled during the then current
year. The bond shall provide protection to the Plan against any
loss by reason of acts of fraud or dishonesty by the Fiduciary
alone or in connivance with others. The surety shall be a
corporate surety company (as such term is used in Act section
412(a)(2)), and the bond shall be in a form approved by the
Secretary of Labor. Notwithstanding anything in the Plan to the
contrary, the cost of such bonds shall be an expense of and may,
at the election of the Administrator, be paid from the Trust Fund
or by the Employer.
9.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
Neither the Employer nor the Trustee, nor their
successors, shall be responsible for the validity of any Contract
issued hereunder or for the failure on the part of the insurer to
make payments provided by any such Contract, or for the action of
any person which may delay payment or render a Contract null and
void or unenforceable in whole or in part.
9.9 INSURER'S PROTECTIVE CLAUSE
Any insurer who shall issue Contracts hereunder shall
not have any responsibility for the validity of this Plan or for
the tax or legal aspects of this Plan. The insurer shall be
protected and held harmless in acting in accordance with any
written direction of the Trustee, and shall have no duty to see
to the application of any funds paid to the Trustee, nor be
required to question any actions directed by the Trustee.
Regardless of any provision of this Plan, the insurer shall not
be required to take or permit any action or allow ant benefit or
privilege contrary to the terms of any Contract which it issues
hereunder, or the rules of the insurer.
9.10 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, his legal
representative, Beneficiary, or to any guardian or committee
appointed for such Participant or Beneficiary in accordance with
the provisions of the Plan, shall, to the extent thereof, be in
full satisfaction of all claims hereunder against the Trustee and
the Employer, either of whom may require such Participant, legal
representative, Beneficiary, guardian or committee, as a
condition precedent to such payment, to execute a receipt and
release thereof in such form as shall be determined by the
Trustee or Employer.
9.11 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is
permitted or required to do or perform any act or matter or
thing, it shall be done and performed by a person duly authorized
by its legally constituted authority.
9.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are (1) the
Employer, (2) the Administrator and (3) the Trustee. The named
Fiduciaries shall have only those specific powers, duties,
responsibilities, and obligations as specifically given them
under the Plan. In general, the Employer shall have the sole
responsibility for making the contributions provided for under
Section 4.1; and shall have the sole authority to appoint and
remove the Trustee and the Administrator; to formulate the Plan's
"funding policy and method"; and to amend or terminate, in whole
responsibility for the administration of the Plan, which
responsibility is specifically described in the Plan. The
Trustee shall have sole responsibility of management of the
assets held under the Trust, except those assets, the management
of which has been assigned to an Investment Manager, who shall
be solely responsible for the management of the assets assigned
to it, all as specifically provided in the Plan. Each named
Fiduciary warrants that any directions given, information
furnished, or action taken by it shall be in accordance with the
provisions of the Plan, authorizing of providing for such
direction, information or action. Furthermore, each named
Fiduciary may rely upon any such direction, information or action
of another named Fiduciary as being proper under the Plan, and is
not required under the Plan to inquire into the propriety of any
such direction, information or action. It is intended under the
Plan that each named Fiduciary shall be responsible for the
proper exercise of its own powers, duties, responsibilities and
obligations under the Plan. No named Fiduciary shall guarantee
the Trust Fund in any manner against investment loss or
depreciation in asset value. Any person or group may serve in
more than one Fiduciary capacity. In the furtherance of their
responsibilities hereunder, the "named Fiduciaries" shall be
empowered to interpret the Plan and Trust and to resolve
ambiguities, inconsistencies and omissions, which findings shall
be binding, final and conclusive.
9.13 HEADINGS
The headings and subheadings of this Plan have been
inserted for convenience of reference and are to be ignored in
any construction of the provisions hereof.
9.14 APPROVAL BY INTERNAL REVENUE SERVICE
(a) Notwithstanding anything herein to the contrary,
contrary, contributions to this Plan are conditioned
upon the initial qualification of the Plan under
Code Section 401. If the Plan receives an adverse
determination with respect to its initial
qualification, then the Plan may return such
contributions to the Employer within one year after
such determination, provided the application for the
determination is made by the time prescribed by law
for filing the Employer's return for the taxable
year in which the Plan was adopted, or such later
date as the Secretary of the Treasury may prescribe.
(b) Notwithstanding any provisions to the contrary,
except Sections 3.6, 3.7 and 4.1(e), any
contribution by the Employer to the Trust Fund is
conditioned upon the deductibility of the
contribution by the Employer under the Code and, to
the extent any such deduction is disallowed, the
Employer may, within one (1) year following the
disallowance if the deduction, demand repayment of
such disallowed contribution and the Trustee shall
return such contribution within one (1) year
following the disallowance. Earnings of the Plan
attributable to the excess contribution may not be
returned to the Employer, but ant losses
attributable thereto must reduce the amount so
returned.
9.15 UNIFORMITY
All provisions of this Plan shall be interpreted and
applied in a uniform, nondiscriminatory manner. In event of any
conflict between the terms of this Plan and any Contract
purchased hereunder, the Plan provisions shall control.
ARTICLE X
PARTICIPATING EMPLOYERS
10.1 ADOPTION BY OTHER EMPLOYERS
Notwithstanding anything herein to the contrary, with
the consent of the Employer and Trustee, any other corporation
or entity, whether an affiliate or subsidiary or not, may adopt
this Plan and all of the provisions hereof, and participate
herein and be known as a Participating Employer, by a properly
executed document evidencing said intent and will of such
Participating Employer.
10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS
(a) Each such Participating Employer shall be required
to use the same Trustee as provided in this Plan.
(b) The Trustee may, but shall not be required to,
commingle, hold and invest as one Trust Fund all
contributions made by Participating Employers, as
well as all increments thereof. However, the assets
of the Plan shall, on an ongoing basis, be available
to pay benefits to all Participants and
Beneficiaries under the Plan without regard to the
Employer or Participating Employer who contributed
such assets.
(c) The transfer of any Participant from or to an
Employer participating in this Plan, whether he be an Employee of
the Employer or a Participating Employer, shall not affect such
Participant's rights under the Plan, and all amounts credited to
such Participant's Combined Account as well as his accumulated
service time with the transferor or predecessor, and his length
of participation in the Plan, shall continue to his credit.
(d) All rights and values forfeited by termination of
employment shall inure only to the benefit of the
Participants of the Employer or Participating
Employer by which the forfeiting Participant was
employed, except if the Forfeiture is for an
Employee whose Employer is an Affiliated Employer,
then said Forfeiture shall inure to the benefit of
the Participants of those Employers who are
Affiliated Employers. Should an Employee of one
("First") Employer be transferred to an associated
("Second") Employer which is an Affiliated Employer
such transfer shall not cause his account balance
(generated while an Employee of "First" Employer) in
any manner, or by any amount to be forfeited. Such
Employee's Participant Combined Account balance for
all purposes of the Plan, including length of
service, shall be considered as though he had always
been employed by the "Second" Employer and as such
had received contributions, forfeitures, earnings or
losses, and appreciation or depreciation in value of
assets totaling the amount so transferred.
(e) Any expenses of the Trust which are to be paid by
the Employer or borne by the trust Fund shall be paid by each
Participating Employer in the same proportion that the total
amount standing to the credit of all Participants employed by
such Employer bears to the total standing to the credit of all
Participants.
10.3 DESIGNATION OF AGENT
Each Participating Employer shall be deemed to be a
party to this Plan; provided, however, that with respect to all
of its relations with the Trustee and Administrator for the
purpose of this Plan, each Participating Employer shall be deemed
to have designated irrevocably the Employer as its agent. Unless
the context of the Plan clearly indicates the contrary, the word
"Employer" shall be deemed to include each Participating Employer
as related to its adoption of the Plan.
10.4 EMPLOYEE TRANSFERS
It is anticipated that an Employee may be transferred
between Participating Employers, and in the event of any such
transfer, the Employee involved shall carry with him his
accumulated service and eligibility. No such transfer shall
effect a termination of employment hereunder, and the
Participating Employer to which the Employee is transferred shall
thereupon become obligated hereunder with respect to such
Employee in the same manner as was the Participating Employer
from whom the Employee was transferred.
10.5 PARTICIPATING EMPLOYER'S CONTRIBUTION
Any contribution subject to allocation during each Plan
Year shall be allocated only among those Participants of the
Employer or Participating Employer making the contribution,
except if the contribution is made by an Affiliated Employer, in
which event such contribution shall be allocated among all
Participants of all Participating Employers who are Affiliated
Employers in accordance with the provisions of this Plan. On the
basis of the information furnished by the Administrator, the
Trustee shall keep separate books and records concerning the
affairs of each Participating Employer hereunder and as to the
accounts and credits of the Employers of each Participating
Employer. The Trustee may, but need not, register Contracts so
as to evidence that a particular Participating Employer is the
interested Employer hereunder, but in the event of an Employee
transfer from one Participating Employer to another, the
employing Employer shall immediately notify the Trustee thereof.
10.6 AMENDMENT
Amendment of this Plan by the Employer at any time when
there shall be a Participating Employer hereunder shall only be
by the written action of each and every Participating Employer
and with the consent of the Trustee where such consent is
necessary in accordance with the terms of this Plan.
10.7 DISCONTINUANCE OF PARTICIPATION
Any Participating Employer shall be permitted to
discontinue or revoke its participation in the Plan. At the time
of any such discontinuance or revocation, satisfactory evidence
and of any applicable conditions imposed shall be delivered to
the Trustee. The Trustee shall thereafter transfer, deliver and
assign Contracts and other Trust Fund assets allocable to the
Participants of such Participating Employer to such new Trustee
as shall have been designated by such Participating Employer, in
the event that it has established a separate pension plan for its
Employees, provided however, that no such transfer shall be made
if the result is the elimination or reduction of any "Section
411(d) (6) protected benefits" in accordance with Section 8.1(c).
If no successor is designated, the Trustee shall retain such
assets for the Employees of said Participating Employer pursuant
to the provisions of Article VII hereof. In no event shall any
part of the corpus or income of the Trust as it relates to such
Participating Employer be used for or diverted to purposes other
than for the exclusive benefit of the Employees of such
Participating Employer.
10.8 ADMINISTRATOR'S AUTHORITY
The Administrator shall have authority to make any and
all necessary rules or regulations, binding upon all
Participating Employers and all Participants, to effectuate the
purpose of this Article.
IN WITNESS WHEREOF, the Plan has been executed the day and year
first above written.
Chartwell Re Corporation
By:/s/ Kathleen M. Carroll
------------------------
Employer
By: /s/ Charles E. Meyers
---------------------
Trustee
<PAGE>
AMENDMENT NO. 1
CHARTWELL RE CORP 401(K) PROFIT SHARING PLAN
Established by
CHARTWELL RE CORPORATION
It is hereby understood and agreed that the above stated plan is amended by
first deleting Exhibit 5, Section 10 of the plan adoption agreement and
substituting therefor the following:
10. LOANS TO PARTICIPANTS (Section 10.17) Loans to participants are (elect
a or b):
(a) [X] permitted and (complete one of the following boxes) [ ]
are considered a general investment of the Trust Fund [X]
are considered an investment of the Participant's Account.
(b) [ ] not permitted
Nothing herein contained shall be held to alter, vary or effect any of the terms
of said plan other than above stated.
This Amendment No. 1 shall be effective January 1, 1993.
CHARTWELL RE CORPORATION
By: /s/ Charles E. Meyers
-------------------------
Date: May 14, 1993. Title: Secretary
<PAGE>
AMENDMENT NO. 1
CHARTWELL RE CORP 401(K) PROFIT SHARING PLAN
Established by
CHARTWELL RE CORPORATION
It is hereby understood and agreed that the above stated plan is amended by
first deleting Exhibit 5, Section 10 of the plan adoption agreement and
substituting therefor the following:
10. LOANS TO PARTICIPANTS (Section 10.17) Loans to participants are (elect
a or b):
(a) [X] permitted and (complete one of the following boxes) [ ]
are considered a general investment of the Trust Fund [X]
are considered an investment of the Participant's Account.
(b) [ ] not permitted
Nothing herein contained shall be held to alter, vary or effect any of the terms
of said plan other than above stated.
This Amendment No. 1 shall be effective January 1, 1993.
CHARTWELL RE CORPORATION
By: /s/ Charles E. Meyers
-------------------------
Date: May 14, 1993. Title: Secretary
<PAGE>
AMENDMENT NO. 2
CHARTWELL RE CORP 401(k) PROFIT SHARING PLAN
Established by
CHARTWELL RE CORPORATION
It is hereby understood and agreed that the above stated plan is amended to
include Charles E. Meyers as Trustee of the Plan.
Nothing herein contained shall be held to alter, vary or effect any of the terms
of said plan other than above stated.
This Amendment No.2 shall be effective October 1, 1993
CHARTWELL RE CORPORATION
By:/s/ Charles E. Meyers
-------------------------
Date: October 20, 1993 Title: Secretary
<PAGE>
AMENDMENT NO. 3
CHARTWELL RE CORPORATION
401(k) PROFIT SHARING PLAN
INSTRUMENT OF AMENDMENT
WHEREAS, Chartwell Re Corporation maintains the Chartwell Re
Corporation 401(k) Profit Sharing Plan (the "Plan"), the trust established as a
part thereof (the "Trust Agreement"), which are intended to qualify as a plan
and trust under Sections 401(a), 401(k) and 501(a), respectively, of the
Internal Revenue Code; and
WHEREAS, it is a desire of the Company that Floyd Radach be removed as
trustee under the Trust Agreement; and
WHEREAS, it is desirable under the terms of the Trust Agreement for the
Company to appoint a successor trustee upon the removal of Floyd Radach; and
WHEREAS, it is the desire of the Company that Kathleen M. Carroll be
named successor trustee; and
WHEREAS, the Company has the authority to remove a trustee under the
Trust Agreement;
NOW, THEREFORE, BE IT
RESOLVED, that Floyd Radach be, and he hereby is, removed as a trustee
under the Trust Agreement, such removal to be effective no later than
thirty (30) days following the date of notice of removal by the Company
to Floyd Radach, or upon such earlier date as may be agreed upon by and
between Floyd Radach and the Company; and it is further
RESOLVED, that Kathleen M. Carroll be, and she hereby is, designated
and appointed as successor trustee and duly authorized agent of the
Company be, and she hereby is, authorized to enter into and execute
trust agreements by and between the Company and Kathleen M. Carroll, as
successor trustee under the Plan; and it is further
RESOLVED that Kathleen M. Carroll be, and she hereby is, authorized and
directed to follow the written instructions of the Company or its
delegate as to the amount of trust assets to be transferred to each of
the investment funds maintained under the Trust Agreements; and it is
further
RESOLVED, that the duly authorized agents of the Company be, and each
of them hereby is, authorized and directed to obtain (i) an
acknowledgment from Floyd Radach respecting his removal as trustee
under the Trust Agreement and (ii) an acceptance from Kathleen M.
Carroll respecting her appointment as successor trustee and an
acknowledgment that she is a fiduciary with respect to the Plan; and it
is further
RESOLVED, that the trustee of the trust established under the Plan and
the proper officers of the Company be and they hereby are, authorized
to take any and all action necessary, desirable or appropriate in order
to effect the purpose and intent of the foregoing resolution.
CHARTWELL RE CORPORATION
By: \s\Charles E. Meyers
-------------------------
Title: Secretary
Date: October 20, 1993
<PAGE>
AMENDMENT NO. 4
CHARTWELL RE CORPORATION
401(K) PROFIT SHARING PLAN
INSTRUMENT OF AMENDMENT
WHEREAS, Chartwell Re Corporation (the "Company" ) has adopted the
Chartwell Re Corporation 401(k) Profit Sharing Plan, effective as of March 6,
1992, to provide retirement benefits for certain of it's employee and their
beneficiaries; and
WHEREAS, the Company reserved the right to amend the Plan upon the
terms and conditions provided therein and now desires to amend, effective
September 1, 1995, the Plan to provide for immediate eligibility of eligible
employees upon attainment of age 21 and thus conform the Plan to the manner
in which it wishes to administer same;
NOW, THEREFORE, the Plan is amended, effective as of September 1, 1995,
to add the following paragraph as the last paragraph in Section 3.1 of Article
III therein:
"Notwithstanding the foregoing, effective September 1, 1995, an
Eligible Employee who has attained age 21 shall be eligible to
participate hereunder as of the date he or she has satisfied such
requirement."
IN WITNESS WHEREOF, the Company has caused this Instrument of Amendment
to be executed this 24th day of August, 1995.
CHARTWELL RE CORPORATION
By: /s/ Kathleen M. Carroll
------------------------
Officer
<PAGE>
AMENDMENT NO. 5
CHARTWELL RE CORPORATION
401(K) PROFIT SHARING PLAN
(THE "PLAN")
INSTRUMENT OF AMENDMENT
WHEREAS, Chartwell Re Corporation (the "Company") has
adopted the Chartwell Re Corporation 401(k) Profit Sharing Plan, effective as
of March 6, 1992, to provide retirement benefits for certain of its employees
and their beneficiaries; and
WHEREAS, the Company reserved the right to amend the Plan
upon terms and conditions provided therein and now desires to amend the
Plan to memorialize the merger, effective as of December 13, 1995, of the
Piedmont Management Company, Inc. Pay Conversion Plan into the Plan and the
recognition by the Plan of Years of Service with Piedmont Management Company,
Inc. for employees of such company and thus conform the Plan to the manner
in which it wishes to administer same;
NOW, THEREFORE, the Plan is amended, effective as of December
13, 1995 as follows:
1. The Preamble of the Plan is amended by adding the
following paragraph as the fourth paragraph therein:
"Whereas, effective as of December 13, 1995, the Piedmont
Management Company, Inc. Pay Conversion Plan was merged into
the Plan, as the successor plan, with prior Years of Service
recognized by the Plan for employees of Piedmont Management
Company, Inc."
2. Section 1.60 of Article I is amended by adding the
following paragraph as the fifth paragraph therein:
"Effective December 13, 1995, for all Plan purposes, Years
of Service with Piedmont Management Company, Inc. shall be
recognized."
IN WITNESS WHEREOF, the company has caused this Instrument of
Amendment to be executed this 21 day of February 1996.
CHARTWELL RE CORPORATION
By:/s/ Charles E. Meyers
----------------------
Officer
<PAGE>
AMENDMENT NO. 6
CHARTWELL RE CORPORATION
401(k) PROFIT SHARING PLAN
INSTRUMENT OF AMENDMENT
WHEREAS, Chartwell Re Corporation (the "Company") has adopted
the Chartwell Re Corporation 401(k) Profit Sharing Plan, effective as of March
6, 1992, to provide retirement benefits for certain of its employees and their
beneficiaries; and
WHEREAS, the Company reserved the right to amend the Plan upon
the terms and conditions provided therein and now desires to amend the Plan,
effective December 1, 1996[or such later date that all governmental approvals
shall have been secured] to permit the purchase of Company stock by the
participants, and the manner in which it wishes to administer same;
NOW, THEREFORE, the Plan is amended as follows:
1. Section 4.12 is amended to read as follows:
"(a) The Administrator, in his sole discretion, may
determine that all Participants be permitted to direct the Trustee as to the
investment of all or a portion of the interest in any one or more of their
individual account balances. If such authorization is given, Participants may,
subject to a procedure established by the Administrator and applied in a uniform
nondiscriminatory manner, direct the Trustee in writing to invest any portion of
their account in specific assets, specific funds or other investments permitted
under the Plan and the directed investment procedure, including such stock of
the Employer as constitutes "qualifying employer securities (`Employer Stock")
within the meaning of Sections 409(I) and 4975(e)(8) of the Internal Revenue
Code. That portion of the account of any Participant so directing will thereupon
be considered a Directed Investment Account, which shall not share in Trust Fund
earnings."
(b) A separate Directed Investment Account shall be
established for each Participant who has directed an investment. Transfers
between the Participant's regular account and his Directed Investment Account
shall be charged and credited as the case may be to each account. The Directed
Investment Account shall not share in Trust Fund earnings, but it shall be
charged or credited as appropriate with the net earnings, but it shall be
charged or credited as appropriate with the net earnings, gains, losses and
expenses as well as any appreciation or depreciation in market value during each
Plan Year attributable to such account.
(c) Notwithstanding the foregoing, with respect
to a Participant's investment in the Directed Investment Account, if it is
determined by the Employer that the sale or purchase of Employer Stock, pursuant
to a Participant's investment direction, would result in a substantial change in
the price of the stock which would be to the detriment of the other
Participants, or if the sale or purchase of Employer Stock is not feasible at
the time in question, the Trustee need not proceed with the purchase or sale of
such stock while the possibility of such detrimental effect exists, or until
market conditions so permit, as the case may be. Any such action by the Trustee
in accordance with written direction by the Employer to defer the purchase or
sale of Employer Stock shall not give rise to liability for any party provided
such action was taken in good faith for reasonable cause.
(D) Employer Stock Provisions.
1. Each Participant who invests in the Directed
Investment Account shall be entitled to direct the Trustee as to the manner in
which employer Stock credited to his Directed Investment Account is to be
voted. In this regard, before each annual or special meeting of the Employer's
stockholders, the Employer shall cause to be sent to each such Participant a
copy of the proxy solicitation material therefore, together with a form
requesting confidential
instructions to the Trustee on how to vote the number of shares of such stock.
Upon receipt of such instructions, the Trustee shall vote the shares of Employer
Stock as instructed. With respect to the shares of Employer Stock for which
voting instructions from Participants shall not have been received, the Trustee
shall vote such shares in the same proportions as the shares for which
instructions have been received by the Trustee from Participants.
2. In the case of a tender offer for shares of
Employer Stock, the Employer shall, as soon as practicable after the
commencement of such tender offer, cause each Participant who has shares of
Employer Stock credited to his Directed Investment Account under the Plan to be
advised in writing, as to the terms of the tender offer, together with a form
requesting confidential instructions to the Trustee on whether to tender the
number of shares of Employer Stock which are credited to his Account under the
Plan. Each such Participant shall be given an opportunity to instruct
individually whether shares credited to his Directed Investment Account shall be
tendered. For purposes of this Section, the number of shares of Employer Stock
as to which a Participant may instruct the Trustee shall be the total number of
such shares credited to his Directed Investment Account as of the most recent
Valuation Date, for which calculations have been completed as of the date of
notice of the tender offer to Participants (the "Recent Valuation Date"). Upon
receipt of such instructions, the Trustee shall act with respect to such
Employer Stock in accordance with Such instructions. Any Employer Stock with
respect to which instructions have been sought but have not been timely received
by the Trustee and any shares of Employer stock held in the Trust Fund in excess
of the aggregate number of such shares credited to Participants' Directed
Investment Account as of the Recent Valuation Date shall be tendered or shall
not be tendered, in the same proportion as the Employer Stock for which
instructions have been timely received by the Trustee from the Participants. In
communicating with Participants for the purpose of securing instructions as to
whether to tender his shares, the Employer may cause to be included a statement
from the Board of Directors of the sponsoring employer setting forth its
position with respect to the tender shares shall not be deemed to constitute a
withdrawal or suspension from the Plan of a forfeiture of any portion of a
Participant's interest in the Plan."
3. The Plan is confirmed in all other respects.
IN WITNESS WHEREOF The Company has caused the Instrument of Amendment to be
executed, this 13th day of December, 1996.
CHARTWELL RE CORPORATION
By /s/ Kathleen M. Carroll
-----------------------
EXHIBIT 23(b)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Chartwell Re Corporation on Form S-8 of our reports dated February 2, 1996
and September 16, 1996, appearing in the Annual Report on Form 10-K of Chartwell
Re Corporation for the year ended December 31, 1995 and in the Annual Report on
Form 11-K of Chartwell Re Corporation 401(k) Profit Sharing Plan for the year
ended December 31, 1995, respectively. We also consent to the reference to us
under the heading "Item 5. Interests of Named Experts and Counsel" appearing
in this Registration Statement.
DELOITTE & TOUCHE LLP
Parsippany, New Jersey
December 10, 1996
