SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1993
CYTEC INDUSTRIES INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
22-3268660
(I.R.S. employer identification no.)
Five Garret Mountain Plaza, West Paterson, N.J. 07424
(Address of principal executive office)(Zip Code)
CONAP EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
(Full title of plan)
E. F. Jackman, Esq., Vice President, General Counsel and Secretary
Cytec Industries Inc., Five Garret Mountain Plaza,
West Paterson, N.J. 07424
(Name and address of agent for service)
(201) 357-3100
(Telephone number, including area code, of agent for service)
Approximate date of commencement of proposed public offering: sales are
expected to take place from time to time after the effective date of the
Registration Statement.
CALCULATION OF REGISTRATION FEE
===================================================================
Proposed
Title of Proposed Maximum
Securities Maximum Aggregate Amount of
to be Amount to Offering Price Offering Registration
Registered be Registered Per Share(1) Price(1) Fee(1)
===================================================================
Common Stock,
par value 50,000
$0.01 per share shares $35.125 $1,756,250 $605.60
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.
(1) Estimated solely for the purpose of determining the amount of
the registration fee pursuant to Rule 457(h)(i) promulgated
under the Act, and based upon the average of the high ($35.25)
and low ($35.00) prices of Cytec Industries Inc. Common Stock
on August 26, 1996, as reported on the New York Stock Exchange
Consolidated Tape ($35.125 per share).
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I will be sent or
given to persons participating in the Conap, Inc. Employees' Savings and
Profit Sharing Plan (the "Plan") of Conap, Inc., a wholly-owned subsidiary of
the Registrant as specified by Rule 428(b)(1) of the Act. In accordance with
the instructions to Part I of Form S-8, such documents have not been filed
with the Securities and Exchange Commission (the "Commission") either as part
of this Registration Statement or as prospectuses or as prospectus supplements
pursuant to Rule 424 of the Act.
PART II
INFORMATION NOT REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 3. Incorporation of Certain Documents by Reference
The Registrant and the Plan state that the following
documents filed by the Registrant and the Plan with the
Commission are incorporated by reference.
(a) Annual Report on Form 10-K of the Registrant for the
fiscal year ended December 31, 1995.
(b) All other reports filed by Registrant pursuant to
Section 13 of the Securities Exchange Act of 1934
(the "Exchange Act") since December 31, 1995.
(c) The description of the Common Stock of the
Registrant contained in its Registration Statement
filed under Section 12 of the Exchange Act including
any amendment or report previously or hereafter
filed for the purpose of updating such description.
The Registrant and the Plan state that all documents filed
by the Registrant and the Plan pursuant to Sections 13, 14
or 15(d) of the Exchange Act after the date hereof and prior
to the filing of a post-effective amendment which indicates
that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference herein and to be a
part hereof from the date of filing of such documents.
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Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
General
Officers and directors of the Registrant are covered by
certain provisions of the Delaware General Corporation
Law (GCL), the Certificate of Incorporation, the By-Laws
and insurance policies which serve to limit, and, in
certain instances, to indemnify them against, certain
liabilities which they may incur in such capacities.
None of such provisions would have retroactive effect
for periods prior to December 17, 1993, and the
Registrant is not aware of any claim or proceeding in
the last three years, or any threatened claim, which
would have been or would be covered by these provisions.
These various provisions are described below.
Elimination of Liability in Certain Circumstances
In June 1986, Delaware enacted legislation which
authorizes corporations to limit or eliminate the
personal liability of directors to corporations and
their stockholders for monetary damages for breach of
directors' fiduciary duty of care. The duty of care
requires that, when acting on behalf of the corporation,
directors must exercise an informed business judgment
based on all material information reasonably available
to them. Absent the limitations now authorized by such
legislation, directors are accountable to corporations
and their stockholders for monetary damages for conduct
constituting negligence or gross negligence in the
exercise of their duty of care. Although the statute
does not change directors' duty of care, it enables
corporations to limit available relief to equitable
remedies such as injunction or rescission. The
Certificate of Incorporation limits the liability of
directors to the Registrant or its stockholders (in
their capacity as directors but not in their capacity as
officers) to the fullest extent permitted by such
legislation. Specifically, the directors of the
Registrant will not be personally liable for monetary
damages for breach of director's fiduciary duty as a
director, except for liability (i) for any breach of the
director's duty of loyalty to the Registrant or its
stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a
knowing violation of law, (iii) for unlawful payments of
dividends or unlawful stock repurchases or redemptions
as provided in Section 174 of the Delaware GCL, or (iv)
for any transaction from which the director derived an
improper personal benefit.
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Indemnification and Insurance
As a Delaware corporation, the Registrant has the power,
under specified circumstances generally requiring the
director or officer to act in good faith and in a manner
he reasonably believes to be in or not opposed to the
Registrant's best interests, to indemnify its directors
and officers in connection with actions, suits or
proceedings brought against them by a third party or in
the name of the Registrant, by reason of the fact that
they were or are such directors or officers, against
expenses, judgments, fines and amounts paid in
settlement in connection with any such action, suit or
proceeding. Article VIII of the By-laws generally
provides for mandatory indemnification of the
Registrant's directors and officers to the fullest
extent provided by Delaware corporate law.
The Registrant's By-Laws are incorporated by reference
as Exhibit 3(B) to this Registration Statement.
Directors and officers are also indemnified under a
directors and officers liability insurance policy.
Item 7. Exemption from Registration Claimed
Not applicable
Item 8. Exhibits
3(A) The Certificate of Incorporation of the
Registrant is incorporated by reference to
Exhibit 3.1 of Registrant's Annual Report on
Form 10-K for the year ended December 31, 1993.
3(B) The By-Laws of the Registrant are incorporated
by reference to Exhibit 3.2 of Registrant's
Annual Report on Form 10-K for the year ended
December 31, 1993.
4(A) Conap, Inc. Employees' Savings and Profit
Sharing Plan.
4(B) Amendment No. 1 to CONAP, Inc. Employees'
Savings and Profit Sharing Plan.
21 Trust Agreement dated December 28, 1983,
between Conap, Inc. and Mellon Bank, N.A.,
trustee under the Conap, Inc. Employees'
Savings and Profit Sharing Plan.
24 Consent of KPMG Peat Marwick LLP related to the
consolidated financial statements of Cytec
Industries Inc. and subsidiaries.
25 Powers of Attorney.
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Item 9. Undertakings
The undersigned Registrant and the Plan 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 Act;
(ii) to reflect in the prospectus any facts or
events arising after the effective date of
the Registration Statement (or the most
recent post-effective amendment thereof)
which, individually or in the aggregate,
represent a fundamental change in the
information set forth in the Registration
Statement;
(iii) to include any material information with
respect to the plan of distribution not
previously disclosed in the Registration
Statement or any material change to such
information in the Registration Statement.
Provided, however, that paragraphs (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 registrant
pursuant to Section 13 or 15(d) of the Exchange Act that
are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability
under the Act, each such post-effective amendment
shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the
offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
The undersigned Registrant and the Plan hereby undertake
that, for purposes of determining any liability under
the Act, each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated
by reference in 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.
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Insofar as indemnification for liabilities arising under
the Act may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has
been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in
the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such
liabilities (other than the payment by the Registrant of
expenses incurred or paid by the director, officer, or
controlling person of the Registrant in the successful
defense of any action suit or proceeding) is asserted by
such director, officer or controlling person in
connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against
public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
The Registrant hereby undertakes to submit the Plan and
any amendment thereto to the Internal Revenue Service
for a determination that the Plan is qualified under
Section 401 of the Internal Revenue Code and will make
all changes required by the IRS in order to qualify the
Plan.
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SIGNATURES
The Registrant
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all 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 West Paterson and State of New Jersey, on the 29th
day of August, 1996.
CYTEC INDUSTRIES INC.
By s/D. D. Fry
Chairman of the Board &
Chief Executive Officer
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 dates indicated.
Name Title
/s/D. D. Fry Chairman of the Board &
D. D. Fry Chief Executive Officer
/s/J. P. Cronin Executive Vice President & Chief
J. P. Cronin Financial and Accounting Officer
F. W. Armstrong Director)
G. A. Burns Director) By /s/J. P. Cronin
L. L. Hoynes, Jr. Director) (Attorney-in-Fact)
W. P. Powell Director) August 29, 1996
J. R. Satrum Director)
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The Plan
Pursuant to the requirement of the Securities Act of 1933, the Conap, Inc.
Employees' Savings and Profit Sharing Plan has duly caused this Registration
Statement to be signed on its behalf by the undersigned hereunto duly
authorized.
CONAP, INC. EMPLOYEES' SAVINGS
AND PROFIT SHARING PLAN
Dated August 29, 1996
By /s/T. Wozniak
Administrator
By /s/E. F. Jackman
Administrator
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CONAP, INC. EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
THIS PLAN is hereby adopted by CONAP, INC. (herein referred to as
the "Employer-Sponsor").
W I T N E S S E T H:
WHEREAS, the Employer-Sponsor heretofore established a Profit
Sharing Plan effective January 1, 1984 (hereinafter called the "Effective
Date")known as CONAP, INC. EMPLOYEES' SAVINGS AND 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-Sponsor retained
the right 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 January 1, 1989, except as otherwise
provided, the Employer-Sponsor in accordance with the provisions of the Plan
pertaining to amendments thereof, hereby amends the Plan in its entirety and
restates the Plan to provide as follows:
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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 designated by the Employer-Sponsor
pursuant to Section 2.4 to administer the Plan on behalf of the Employer.
However, with respect to the reporting disclosure and fiduciary requirements
of ERISA, the Employer-Sponsor shall be the Plan Sponsor and Plan
Administrator.
1.3 "Affiliated Employer" means the Employer-Sponsor and any corporation
which is a member of a controlled group of corporations (as defined in Code
Section 414(b)) which includes the Employer-Sponsor; any trade or business
(whether or not incorporated) which is under common control (as defined in
Code Section 414(c)) with the Employer-Sponsor; 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-Sponsor; and any other
entity required to be aggregated with the Employer-Sponsor 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 31.
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 total
compensation which is actually paid to the Participant during the
determination period as calculated for federal income tax purposes for Form
W-2.
For a Participant's initial year of participation,
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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). 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 to the extent required by applicable statute
and regulations, 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.
However, for purposes of Section 4.3(b), the preceding sentence shall not
apply in determining the portion of the Compensation of a Participant which is
below Excess Compensation.
If Compensation is calculated based on the Compensation paid during
the Plan Year, and a short Plan Year is created because of an amendment
changing the Plan Year to a different 12-consecutive month period, the
$200,000 limitation referred to above will not exceed an amount equal to
$200,000 multiplied by a fraction, the numerator of which is the number of
months in the short Plan Year and the denominator of which is twelve.
In addition to other applicable limitations set forth in the Plan,
and notwithstanding any other provision of the Plan to the contrary, for Plan
Years beginning on or after January 1, 1994, the annual Compensation of each
Participant taken into account under the Plan shall not exceed the OBRA '93
annual compensation limit. The OBRA '93 annual compensation limit is
$150,000, as adjusted by the Commissioner of the Internal Revenue Service for
increases in the cost of living in accordance with Code Section 401(a)(17)(B).
The cost-of-living adjustment in effect for a calendar year applies to any
period, not exceeding 12 months, over which Compensation is determined
(determination period) beginning in such calendar year. If a determination
period consists of fewer than 12 months, the OBRA '93 annual
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compensation limit will be multiplied by a fraction, the numerator of which is
the number of months in the determination period, and the denominator of which
is 12.
For Plan Years beginning on or after January 1, 1994, any reference
in this Plan to the limitation under Code Section 401(a)(17) shall mean the
OBRA '93 annual compensation limit set forth in this provision.
If Compensation for any prior determination period is taken into
account in determining a Participant's benefits allocated in the current Plan
Year, the Compensation for that prior determination period is subject to the
OBRA '93 annual compensation limit in effect for that prior determination
period. For this purpose, for determination periods beginning before the first
day of the first Plan Year beginning on or after January 1, 1994, the OBRA '93
annual compensation limit is $150,000.
For Plan Years beginning prior to January 1, 1989, the $200,000
limit (without regard to Family Member aggregation) shall apply only for Top
Heavy Plan Years and shall not be adjusted.
1.9 "Contract" or "Policy" means a life insurance policy or annuity
contract (group or individual) issued by the insurer as elected.
1.10 "Early Retirement Date." This Plan does not provide for a
retirement date prior to Normal Retirement Date.
1.11 "Earned Income" means with respect to a Self-Employed Individual,
the net earnings from self-employment in the trade or business with respect to
which the Plan is established, for which the personal services of the
individual are a material income-producing factor. Net earnings will be
determined without regard to items not included in gross income and the
deductions allocable to such items. Net earnings are reduced by contributions
by the Employer to a qualified Plan to the extent deductible under Code
Section 404. Additionally, for taxable years beginning after December 31,
1989, net earnings shall be determined with regard to the deduction allowed to
the Employer by Code Section 164(f).
1.12 "Eligible Employee" means, except as excluded below by class, any
Employee who has satisfied the provisions of Section 3.1.
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Employees who are Leased Employees within the meaning of Code
Sections 414(n)(2) and 414(o)(2) shall not be eligible to participate in this
Plan.
Employees whose employment is governed by the terms of a collective
bargaining agreement between Employee representatives (within the meaning of
Code Section 7701(a)(46)) and the Employer under which retirement benefits
were the subject of good faith bargaining between the parties, unless such
agreement expressly provides for such coverage in this Plan, will not be
eligible to participate in this Plan.
Employees of Affiliated Employers, unless such Affiliated Employers
have specifically adopted this Plan in writing, shall not be eligible to
participate in this Plan.
1.13 "Employee" means any person who is employed by the Employer or
Affiliated Employer, but excludes any person who is an independent contractor
or is a nonresident alien who does not have earned income (within the meaning
of Code Section 911(d)(2)) from the Employer which constitutes income from
sources within the United States (within the meaning of Code Section
861(a)(3)). 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.
1.14 "Employer" means CONAP, INC., which is also the Employer-Sponsor,
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.
The Employer is a corporation, with principal offices in the State of New
York.
1.15 "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 and any qualified nonelective
contributions or elective deferrals taken into account pursuant to Section 4.7
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.
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1.16 RESERVED
1.17 "Family Member" means, with respect to an affected Participant, such
Participant's spouse, such Participant's lineal descendants and ascendants and
their spouses, all as described in Code Section 414(q)(6)(B).
1.18 "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.
1.19 "Fiscal Year" means the Employer's accounting year.
1.20 "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
Participant's Account, 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. In addition, the term Forfeiture shall also
include amounts deemed to be Forfeitures pursuant to any other provision of
this Plan.
1.21 "Former Participant" means a person who has been a Participant, but
who has ceased to be a Participant for any reason.
1.22 "415 Compensation" with respect to any Participant means
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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)) "415 Compensation" for any Self-Employed Individual shall be equal
to his Earned Income.
If, in connection with the adoption of this document, the definition
of "415 Compensation" has been modified, then, for Plan Years prior to the
Plan Year which includes the adoption date of this document, "415
Compensation" means compensation determined pursuant to the Plan then in
effect.
1.23 "414(s) Compensation" with respect to any Employee means his
Deferred Compensation plus "415 Compensation" paid during a Plan Year. The
amount of "414(s) Compensation" with respect to any Employee shall include
"414(s) Compensation" during the entire twelve (12) month period ending on the
last day of such Plan Year. Notwithstanding anything herein to the contrary,
for purposes of calculating the Actual Deferral Percentage and/or the Actual
Contribution Percentage for an Employee, "414(s) Compensation" may, at the
election of the Employer, only be recognized as of an Employee's effective
date of Participation to the extent permitted by applicable law and
regulations.
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 includable
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
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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 "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" (determined for this purpose in
accordance with section 1.25) 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, in connection with the adoption of this document 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 document, "414(s)
Compensation" means compensation determined pursuant to the Plan then in
effect.
1.24 "Fund" means the assets of the Plan as the same shall exist from
time to time.
1.25 "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" of the Employer.
(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.
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(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 1.56(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 "determination year" shall be the Plan Year for which testing is
being performed, and the "look-back year" shall be the immediately
preceding twelve-month period.
For purposes of this section, the determination of "415
Compensation" shall be made by including amounts that would otherwise be
excluded from a Participant's gross income by reason of the application
of Code Sections 125, 402(e)(3), 402(h)(1)(B) and, in the case of
Employer contributions made pursuant to a salary reduction agreement, by
including amounts that would otherwise be excluded from a Participant's
gross income by reason of the application of Code Section 403(b).
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.
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<PAGE>
In determining who is a Highly Compensated Employee, Employees who
are nonresident aliens and who receive 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, 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."
1.26 "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 1.25.
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.
1.27 "Highly Compensated Participant" means any Highly Compensated
Employee who is eligible to participate in the Plan.
1.28 "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
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<PAGE>
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, layoff, 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). With respect to any Plan Year for which an
Employee's Hours of Service cannot be accurately determined from the
Employer's records, he may be credited with (1) ten (10) Hours of Service for
each day; (2)forty-five (45) Hours of Service for each week; or (3) one
hundred ninety (190)Hours of Service for each month for which he would be
required to be credited with one Hour of Service in accordance with the
preceding subsections. The particular equivalency selected for an individual
or group of employees shall be that equivalency considered most appropriate
with respect to the individual's or group's regular employment arrangement.
Notwithstanding the above, (i) no more than 501 Hours of Service
are required to be credited to an Employee on account of any 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
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<PAGE>
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.
1.29 "Income" means the income allocable to "excess amounts" which shall
equal the sum of the allocable gain or loss for the "applicable computation
period" and the allocable gain or loss for the period between the end of the
"applicable computation period" and the date of distribution ("gap period").
The income allocable to "excess amounts" for the "applicable computation
period" and the "gap period" is calculated separately and is determined by
multiplying the income for the "applicable computation period" or the "gap
period" by a fraction. The numerator of the fraction is the "excess amount"
for the "applicable computation period." The denominator of the fraction is
the total "account balance" attributable to "Employer contributions" as of the
end of the "applicable computation period" or the "gap period," reduced by the
gain allocable to such total amount for the "applicable computation period" or
the "gap period" and increased by the loss allocable to such total amount for
the "applicable computation period" or the "gap period." The provisions of
this Section shall be applied:
(a) For purposes of Section 4.2, by substituting:
(1) "Excess Deferred Compensation" for "excess amounts";
(2) "taxable year of the Participant" for "applicable
computation period";
(3) "Deferred Compensation" for "Employer contributions"; and
(4) "Participant's Elective Account" for "account balance."
(b) For purposes of Section 4.6, by substituting:
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<PAGE>
(1) "Excess Contributions" for "excess amounts";
(2) "Plan Year" for "applicable computation period";
(3) "Elective Contributions" for "Employer contributions";
and
(4) "Participant's Elective Account" for "account balance."
(c) For purposes of Section 4.8, by substituting:
(1) "Excess Aggregate Contributions" for "excess amounts";
(2) "Plan Year" for "applicable computation period";
(3) "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"
for "Employer contributions"; and
(4) "Participant's Account" for "account balance".
In lieu of the "fractional method" described above, a "safe harbor
method" may be used to calculate the allocable Income for the "gap period."
Under such "safe harbor method," allocable Income for the "gap period" shall
be deemed to equal ten percent (10%) of the Income allocable to "excess
amounts" for the "applicable computation period" multiplied by the number of
calendar months in the "gap period." For purposes of determining the number
of calendar months in the "gap period," a distribution occurring on or before
the fifteenth day of the month shall be treated as having been made on the
last day of the preceding month and a distribution occurring after such
fifteenth day shall be treated as having been made on the first day of the
next subsequent month.
Income allocable to any distribution of Excess Deferred Compensation
on or before the last day of the taxable year of the Participant shall be
calculated from the first day of the taxable
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<PAGE>
year of the Participant to the date on which the distribution is made pursuant
to either the "fractional method" or the "safe harbor method."
Notwithstanding the above, for "applicable computation periods"
which began in 1987, Income during the "gap period" shall not be taken into
account.
1.30 "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.
1.31 "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 that 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
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<PAGE>
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 based only on "415 Compensation" which is actually paid
and shall be made by including amounts that would otherwise be excluded from a
Participant's gross income by reason of the application of Code Sections 125,
402(e)(3), 402(h)(1)(B) and, in the case of Employer contributions made
pursuant to a salary reduction agreement, by including amounts that would
otherwise be excluded from a Participant's gross income by reason of the
application of Code Section 403(b).
1.32 "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.
1.33 "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
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<PAGE>
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 if:
(a) such employee is covered by a money purchase pension plan
providing:
(1) a nonintegrated employer contribution rate of at least 10%
of compensation, as defined in Code Section 415(c)(3), but
including amounts contributed pursuant to a salary reduction
agreement which are excludable from the employee's gross
income under Code Sections 125, 402(e)(3), 402(h) or 403(b);
(2) immediate participation; and
(3) full and immediate vesting.
(b) Leased Employees do not constitute more than 20% of the
recipient's non-highly compensated work force.
1.34 RESERVED
1.35 "Net Profit" means with respect to any Fiscal Year the Employer's
net income or profit for such Fiscal Year determined upon the basis of the
Employer's books of account in accordance with generally accepted accounting
principles, without any reduction for taxes based upon income, or for
contributions made by the Employer to this Plan.
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.
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<PAGE>
1.38 "Normal Retirement Date" means the first day of the month coinciding
with or next following the Participant's Normal Retirement Age (65th
birthday). A Participant shall become fully Vested in his Account upon
attaining his Normal Retirement Age. In no event shall the Normal Retirement
Age exceed the later of the Participant's attainment of age 65 or the fifth
anniversary of his commencement of participation.
1.39 "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."
"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.
1.40 RESERVED
1.41 "Participant" means any Eligible Employee who participates in the
Plan as provided in Sections 3.3, and has not for any reason become ineligible
to participate further in the Plan.
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<PAGE>
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 contributions.
1.43 "Plan" means this instrument, including all amendments thereto.
1.44 "Plan Year" means the Plan's accounting year of twelve (12) months
commencing on the January 1 of each year and ending the following December 31.
1.45 RESERVED
1.45A "Pre-Retirement Survivor Annuity" is an immediate annuity for the
life of the Participant's Spouse.
1.45B "Spouse" shall mean the person to whom the Participant has been
married throughout the one-year period ending on the earlier of (1) the
Participant's annuity starting date or (2) the date of the Participant's
death. The Plan Administrator may rely on the Participant's written statement
regarding such Participant's marital status.
1.46 "Regulation" means the Income Tax Regulations as promulgated by the
Secretary of the Treasury or his delegate, and as amended from time to time.
1.47 "Retired Participant" means a person who has been a Participant, but
who has become entitled to retirement benefits under the Plan.
1.48 "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).
1.49 RESERVED
1.50 RESERVED
1.51 "Super Top Heavy Plan" means a plan described in Section 2.2(b).
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<PAGE>
1.52 RESERVED
1.53 "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.
1.54 "Top Heavy Plan" means a plan described in Section 2.2(a).
1.55 "Top Heavy Plan Year" means a Plan Year commencing after December
31, 1983, during which the Plan is a Top Heavy Plan.
1.56 "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 1.25) 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 nonresident aliens and who
receive 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;
(d) Employees who have not yet attained age 21.
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<PAGE>
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.
1.57 "Total and Permanent Disability" means a physical or mental
condition of a Participant resulting from bodily injury, disease, or mental
disorder which renders him permanently incapable of continuing his usual and
customary employment with the Employer. The disability of a Participant shall
be determined by a licensed physician chosen by the Administrator. The
determination shall be applied uniformly to all Participants. No determination
of Total Disability shall be made if the Participant fails to provide such
evidence as is required by the Plan Administrator and/or fails to submit to
examination by the medical practitioner(s) selected by the Plan Administrator.
1.58 "Trustee" means the person or entity named as trustee herein or in
any separate trust forming a part of this Plan, and any successors.
1.59 "Trust Fund" means the assets of the Plan and Trust as the same
shall exist from time to time.
1.60 "Vested" means the nonforfeitable portion of any account maintained
on behalf of a Participant.
1.61 "Voluntary Contribution Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan resulting from the Participant's nondeductible voluntary
contributions made pursuant to Section 4.8.
1.62 "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. In connection with eligibility to participate, a Year
of
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<PAGE>
Service shall not be credited until the last day of the applicable computation
period.
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 during which an
Employee completed 1000 Hours of Service.
A Year of Service shall be credited to an Employee with respect to a
Plan Year with fewer than 12 months (a "short Plan Year") if he was credited
with at least 1000 Hours of Service during either the 12-month period ending
on the last day of the short Plan Year or the 12-month period commencing on
the first day of such short Plan Year. An Employee who is credited with 1000
Hours of Service in both vesting computation periods will be credited with two
Years of Service for those periods. Thereafter his Years of Service shall be
determined in accordance with the Plan and the then applicable Plan Year. A
Break-in-Service shall be disregarded if it occurs during a short Plan Year.
For all other purposes, the computation period shall be the Plan
Year.
Years of Service with any Affiliated Employer shall be recognized,
but only during the period of affiliation.
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PAGE
<PAGE>
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 4.3 of the Plan.
However, for Plan Years beginning prior to January 1, 1989, the Plan
shall provide the special Compensation and "415 Compensation" limitations of
Code Section 416(d).
2.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan Year
commencing after December 31, 1983, 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, for Plan Years beginning after December
31, 1984, 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.
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<PAGE>
(b) This Plan shall be a Super Top Heavy Plan for any Plan
Year commencing after December 31, 1983, 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 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 on 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
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<PAGE>
(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 accepted
after December 31, 1983, as part of the Participant's
Aggregate Account balance. However, rollovers or plan-to-plan
transfers accepted prior to January 1, 1984, shall be
considered as part of the Participant's Aggregate Account
balance.
(6) with respect to related rollovers and plan-to-plan
transfers (ones either not 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.
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<PAGE>
(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
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<PAGE>
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.
(h) For purposes of determining the 60% and 90% ratio
described above (hereinafter referred to as the "Top Heavy Ratio")
the following shall apply:
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(1) If the Employer maintains one or more defined
contribution plans (including any Simplified Employee Pension
Plan) and the Employer has not maintained any defined benefit
plan which during the 5-year period ending on the
Determination Date(s) has or has had accrued benefits, the Top
Heavy Ratio for this Plan alone or for the Required or
Permissive Aggregation Group as appropriate is a fraction, the
numerator of which is the sum of the account balances of all
Key Employees as of the Determination Date(s) (including any
part of any account balance distributed in the 5-year period
ending on the Determination Date(s)), and the denominator of
which is the sum of all account balances (including any part
of any account balance distributed in the 5-year period ending
on the Determination Date(s), both computed in accordance with
Section 416 of the Code and the regulations thereunder. Both
the numerator and denominator of the Top Heavy Ratio are
increased to reflect any contribution not actually made as of
the Determination Date, but which is required to be taken into
account on that date under Section 416 of the Code and the
regulations thereunder.
(2) If the Employer maintains one or more defined contribution
plans (including any Simplified Employee Pension Plan) and the
Employer maintains or has maintained one or more defined
benefit plans which during the 5-year period ending on the
Determination Date(s) has or has had any accrued benefits, the
Top Heavy Ratio for any Required or Permissive Aggregation
Group, as appropriate, is a fraction, the numerator of which
is the sum of account balances under the aggregated defined
contribution plan or plans for all Key Employees, determined
in accordance with (1) above and the Present Value of Accrued
Benefits under the aggregated defined benefit plan or plans
for all Key Employees as of the Determination Date(s) and the
denominator of which is the sum of the account balances under
the aggregated defined contribution plan or plans for all
Participants, determined in accordance with (1) above and the
Present Value of
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Accrued Benefits under the defined benefit plan or plans for
all Participants as of the Determination Date(s), all determined
in accordance with Section 416 of the Code and the regulations
thereunder. The accrued benefits under a defined benefit plan
in both the numerator and denominator of the Top Heavy Ratio are
increased for any distribution of an accrued benefit made in
the five-year period ending on the Determination Date.
(3) For purposes of (1) and (2) above the value of account
balances and the Present Value of Accrued Benefits will be
determined as of the most recent Anniversary Date that falls
within or ends with the 12-month period ending on the
Determination Date, except as provided in Section 416 of the
Code and the regulations thereunder for the first and second
plan years of a defined benefit plan. The account balances
and accrued benefits of a Participant (1) who is not a Key
Employee but who was a Key Employee in a prior year, or (2)
who has not been credited with at least one Hour of Service
with any Employer maintaining the Plan at any time during the
5-year period ending on the Determination Date will be
disregarded. The calculations of the Top Heavy Ratio, and the
extent to which distributions, rollovers, and transfers are
taken into account will be made in accordance with Section 416
of the Code and the regulations thereunder. Deductible
employee contributions will not be taken into account for
purposes of computing the Top Heavy Ratio. When aggregating
plans the value of account balances and accrued benefits will
be calculated with reference to the Determination Dates that
fall within the same calendar year.
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
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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.
(d) The Employer shall establish a procedure by which
mandatory Employee Contributions are to be made to the Trustee
pursuant to the Plan. Such procedure may be by payroll deduction or
such other method as determined by the Employer.
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer-Sponsor shall appoint one or more Administrators. 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- Sponsor. An
Administrator may resign by delivering his written resignation to the
Employer-Sponsor or be removed by the Employer-Sponsor by delivery of
written notice of removal, to take effect at a date specified therein,
or upon delivery to the
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Administrator if no date is specified. If more than one individual is
appointed as the Administrator, the Administrator shall also be called the
"Administrative Committee" or "Committee."
The Employer, upon the 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
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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
purchased from any insurer, and to designate the insurer from which
such Contract shall be purchased;
(g) to advise the Employer and the Trustee from time to time
of 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;
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(i) to assist any Participant regarding his rights, benefits,
or elections available under the Plan.
(j) 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;
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 others 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, 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
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accountants, 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. Any administration expense paid
to the Trust Fund as a reimbursement shall not be considered an Employer
contribution, unless required by the Code.
2.11 MAJORITY ACTIONS
Except where there 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 with the
Administrator on forms supplied by the Employer. 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
can perfect the claim will be provided. In addition, 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 why 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 any other
representative of his choosing and at which the claimant
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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.
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PAGE
<PAGE>
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee shall be eligible to participate hereunder on
the date of his employment with the Employer. 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. In no event shall the
Plan provide for a minimum service requirement of more than one Year of
Service, or a minimum age requirement of over 21 years; provided, however,
that the Plan may require 2 Years of Service if participants are 100% vested
after attainment of 2 Years of Service. In no event, however, may the service
requirement to participate in the salary deferral feature of the Plan exceed
one Year of Service.
3.2 APPLICATION FOR PARTICIPATION
No formal application shall be necessary to participate herein.
3.3 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee shall become a Participant effective as of the
earlier of the first day of the Plan Year or the first day of the seventh
month of such Plan Year coinciding with or next following the date 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.
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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 1-Year Break in Service
rules of the Plan.
(c) In the event an Employee who is not a member of an
eligible class of Employees becomes a member of an eligible class,
such Employee will participate immediately if such Employee has
satisfied the minimum age and service requirements and would have
otherwise previously become a Participant.
3.6 OMISSION OF ELIGIBLE EMPLOYEE
(a) If prior to the end of a Plan Year it is discovered and
called to the attention of the Committee that one or more
Participants received credits under this Article in an amount more
or less than they were entitled to, either by miscalculation or the
receipt of incorrect data, a corrective allocation shall be
performed on the next Anniversary Date, prior to any other
allocation under Article IV.
(b) The Account of such a Participant shall be adjusted to
reflect the aggregate amount which should have been credited to the
Account for all past Plan Years (but was in fact not correctly
credited). Corrective allocations as to omitted contributions and
forfeitures shall be made from the following sources:
(1) Allocable forfeitures for the current Plan Year;
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(2) Employer's Contribution for the current Plan Year; and
(3) Employer's Contributions for subsequent Plan Years, until
such corrective allocations have been completed.
Amounts debited and released thereby shall be regarded
as forfeitures.
(c) However, all corrective allocations are subject to the
limitations described in Code Section 415 as they apply to the
limitation year for which the corrective allocation is deemed made,
and not the limitation year as of which such allocation is made.
Therefore, when the above limit has been reached with respect to all
Participants for whom corrective allocations are required, it shall
be permissible for the regular allocations to take place as required
under Article 4.
(d) Corrective allocations with respect to investment
experience shall be made with respect to funds which were actually
part of the Participant's Account, including funds which should have
been credited (or debited) to his Account for the Plan Year. Such
corrective allocations of investment experience shall be made only
from positive investment experience, prior to the regular allocation
thereof, on any Anniversary Date.
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 made
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 for the Plan Year in which the discovery is made.
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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 discretionary matching
contribution equal to a percentage of each such Participant's
Deferred Compensation, the exact percentage to be determined each
year by the Employer, which amount shall be deemed an Employer's
Non-Elective Contribution. Except, however, the Employer retains
the discretion to limit, on an annual basis, the amount of Deferred
Compensation that will be matched.
(c) On behalf of each Participant a discretionary Qualified
Non-Elective Contribution equal to a percentage of each eligible
individual's Compensation, the exact percentage to be determined
each year by the Employer. The Employer's Qualified Non-Elective
Contribution shall be deemed an Employer's Elective Contribution.
However, the Employer may designate that part or all of its
Qualified Non-Elective Contribution be allocated on behalf of each
eligible Participant described herein in such a manner as to result
in a uniform minimum allocation for each Participant. The minimum
dollar amount will be a function of the amount contributed by the
Employer for allocation under this paragraph. The Employer may
designate with respect to a Plan Year of reference that Qualified
Non-Elective Contributions will be made only on behalf of Non-Highly
Compensated Employees and/or Non-Key Employees.
(d) A discretionary amount, which amount shall be deemed an
Employer's Non-Elective Contribution.
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(e) All contributions by the Employer shall be made in cash
or in such property as is acceptable to the Trustee.
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION
(a) Each Participant may elect to defer his Compensation
which would have been received in the Plan Year, but for the
deferral election, by up to 6%. 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.
The amount by which a Participant's Compensation is 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) Except as provided for in this Subsection and Section
4.6, the balance in each Participant's Elective Account shall be
fully Vested at all times and shall not be subject to forfeiture.
(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) 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);
(3) 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;
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(4) 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
(5) the proven financial hardship of a Participant, subject
to the limitations of Article VI.
(d) For each Plan Year beginning after December 31, 1987, 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 this Section. 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 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
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(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 April 15th following the close of
the Participant's taxable year. Distributions in accordance with this
paragraph may be made for any taxable year of the Participant which
begins after December 31, 1986. 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.
Matching contributions which relate to Excess Deferred
Compensation which is distributed
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pursuant to this Subsection shall be forfeited.
(g) Notwithstanding the Subsection 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 Participant 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 any form of investment 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 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 arrangement with the Employer and
filing such agreement with the Administrator. Such election
shall initially be effective following
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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 semiannually during election periods
established by the Administrator prior to the to the first day
of the first month and seventh month of a Plan Year. However,
notwithstanding the foregoing, a Participant may make an
election, to be effective for the succeeding pay cycle, if the
Administrator accepts the modified election and the election
is not performed in a manner that operates in a discriminatory
manner. Any modification shall not have retroactive effect
and shall remain in force until revoked.
(3) A Participant may elect to prospectively revoke his
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 salary 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 pay to the Trustee its contribution to the Plan
for each Plan Year within the time prescribed by law.
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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 one or
more accounts in the name of each Participant, to which the
Administrator shall credit as of each Anniversary Date or other
valuation date (if a valuation date has occurred since the last
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 described below. All such allocations shall
not be final until the due date, including extensions for filing of
the Employer's federal income tax return for the Fiscal Year.
(1) With respect to the Employer's Elective Contribution made
pursuant to Section 4.1(a), an amount shall be allocated to
each Participant's Elective Account in an amount equal to each
such Participant's Deferred Compensation for the year.
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.
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(2) With respect to the Employer's Non-Elective Contribution
made pursuant to Section 4.1(b), an amount shall be allocated
to each Participant's Non-Elective Account in accordance with
Section 4.1(b); in no event, however, shall the amount
allocated under Section 4.1(b) exceed the amount allowable
under the applicable nondiscrimination requirements.
Notwithstanding anything herein to the contrary,
Participants who terminated employment for any reason during
the Plan Year shall share in the matching contributions made
by the Employer for the year of termination without regard to
the Hours of Service credited.
(3) With respect to the Employer's Qualified Non-Elective
Contribution made pursuant to Section 4.1(c), an amount shall
be allocated to each Participant's Elective Account in
accordance with Section 4.1(c).
Only Participants who have completed a Year of Service
during the Plan Year and are actively employed on the last day
of the Plan Year shall be eligible to share in the Qualified
Non-Elective Contribution for the year.
(4) With respect to the Employer's Non-Elective Contribution
made pursuant to Section 4.1(d), an amount shall be allocated
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 a Year of Service
during the Plan Year and are actively employed on the last day
of the Plan Year shall be eligible to share in the allocation
of discretionary contributions and Forfeitures for the year.
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(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. The
remaining Forfeitures, if any, shall be added to the Employer's
contribution made pursuant to Section 4.1 and allocated among the
Participants' Accounts in the same manner as the Employer's
discretionary contribution for the Plan Year in which such
Forfeitures occur. In the event the allocation of Forfeitures
provided herein shall cause the "annual addition" (as defined in
this Subsection) 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) Forfeitures attributable to the Employer matching
contributions made pursuant to Section 4.1(b) shall be used to
reduce the Employer's contribution for the Plan Year in which such
Forfeitures occur.
(e) For any Top Heavy Plan Year, Employees not otherwise
eligible to share in the allocation of contributions as provided
above, shall receive the minimum allocation provided for in this
Section if eligible pursuant to the provisions of this Section.
(f) Notwithstanding the foregoing, Participants who failed to
complete a Year of Service and/or be employed on the last day of the
Plan Year due to (i) Early, Normal or Late Retirement, (ii) Total
and Permanent Disability, or (iii) death, shall be eligible to share
in the allocation of contributions and Forfeitures for that Plan
Year, if it would be reasonable to assume they would otherwise have
been eligible but for the occurrence of said event.
(g) As of each Anniversary Date, any increase or decrease in
the value of the Trust Fund with respect to the preceding
Anniversary Date shall be allocated in the same proportion that each
Participant's and Former Participant's nonsegregated accounts bear
to the total of all Participants' and Former Participants'
nonsegregated accounts as of such date, after posting credits and
adjustments deemed made as of the preceding
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Anniversary Date and after deducting payments and distributions made
prior to the current Anniversary Date. For purposes of this paragraph,
Contract cash values shall be disregarded. Notwithstanding anything
in this Section to the contrary, such earnings or losses shall be
allocated with respect to the Participant's and Former Participant's
Account and transfers from other qualified plans in accordance with
procedures adopted by the Committee. However, each segregated account
maintained on behalf of a Participant shall be credited or charged
with its separate earnings and losses. For purposes of this paragraph
only, the term valuation date shall be substituted for Anniversary
Date, as applicable, if a valuation date has occurred since the last
Anniversary Date.
(h) Minimum Allocations Required for Top Heavy Plan Years:
Notwithstanding the foregoing, for any top Heavy Plan Year, the sum
of the Employer's contributions 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 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
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 a 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 Deferral
Percentage" tests pursuant to Section 4.5 shall not be taken into
account.
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However, no such minimum allocation shall be required in
this Plan for any Employee who participates in another defined
contribution plan subject to Code Section 412, providing such
benefits are included with this Plan in a Required Aggregation
Group.
(i) For purposes of the minimum allocations set forth above,
the percentage allocated to the Participant's 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.
(j) For any Top Heavy Plan Year, the minimum allocations set
forth above shall be allocated to the Participant's Account of all
Non-Key Employees who are Participants and who are employed by the
Employer on the last day of the Plan Year, including Non-Key
Employees who have (1) failed to complete a Year of Service; (2)
declined to make mandatory contributions (if required) to the Plan
or, in the case of a cash or deferred arrangement, elective
contributions to the Plan.
(k) In lieu of the above, in any Plan Year in which a Non-Key
Employee is a Participant in both this Plan and a defined benefit
pension plan included in a Required Aggregation Group which is top
heavy, the Employer shall not be required to provide such Non-Key
Employee with both the full separate defined benefit plan minimum
benefit and the full separate defined contribution plan minimum
allocation.
Therefore, for any Plan Year when the Plan is a Top
Heavy Plan, a Non-Key Employee who is participating in this Plan and
a defined benefit plan maintained by the Employer shall receive a
minimum monthly accrued benefit in the defined benefit plan equal to
the product of (1) one-twelfth (1/12th) of "415 Compensation"
averaged over the five (5) consecutive "limitation years" (or actual
"limitation years," if less) which produce the highest average and
(2) the lesser of (i) two percent (2%) multiplied by Years of
Service when the plan is top heavy or (ii)
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twenty percent (20%). Further, the extra minimum allocation (required
by Section 4.4 to provide higher limitations) shall not be provided.
Furthermore, the minimum benefit required to be provided by the
defined benefit plan under this Section shall be reduced to the
extent it has been determined that all or part of such benefit can
be provided by the value of such Participant's accrued benefit or
account under this Plan and any other defined contribution plan
sponsored by the Employer, using the actuarial assumptions set forth
in such defined benefit plan.
(l) 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).
However, for Plan Years beginning prior to January 1, 1989, the
$200,000 limit shall apply only for Top Heavy Plan Years and shall
not be adjusted.
(m) 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.
(n) Notwithstanding anything to the contrary, for Plan Years
beginning after December 31, 1988, if this is a Plan that would
otherwise fail to meet the requirements of Code Sections 401(a)(4),
401(a)(26), 410(b)(1) or 410(b)(2)(A)(i) and the Regulations
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<PAGE>
thereunder because Employer contributions have not been 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 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 specified 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
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.
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<PAGE>
(4) Notwithstanding the foregoing, for any Top Heavy Plan
Year beginning after December 31, 1994, 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
Subsection, 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 beginning
after December 31, 1986, 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.
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<PAGE>
However, for Plan Years beginning after December 31, 1988, 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 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, 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 for Plan Years beginning
after December 31, 1988. 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 and any matching contributions which relate to such Excess
Deferred Compensation.
(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
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<PAGE>
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," for Plan Years
beginning after December 31, 1988, 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. Notwithstanding
the foregoing, with respect to Plan Years beginning prior to January 1,
1990, compliance with the Regulations then in effect shall be deemed to
be in compliance with this paragraph.
(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 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) as in effect for Plan Years beginning after
December 31, 1988), the cash or deferred arrangements included in
such plans shall be treated as
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<PAGE>
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 included in such plans and the plans including such
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) only if they have
the
same plan year.
Notwithstanding the above, for Plan Years beginning
after December 31, 1988, 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 for Plan Years beginning after December 31, 1988)
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, for Plan
Years beginning after December 31, 1988, 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 for Plan Years beginning after December 31, 1986, the
Administrator shall adjust Excess Contributions pursuant to the options set
forth below:
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(a) Within the applicable time required by law with respect
to a Plan Year of reference, the Highly Compensated Participant
having the highest actual deferral ratio shall have his portion of
Excess Contributions distributed to him until one of the tests set
forth in Section 4.5 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 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 cause matching contributions which relate to
such Deferred Compensation to be forfeited;
(iii) shall be made from Qualified Non-Elective
Contributions only to the extent that Excess
Contributions exceed the balance in the Participant's
Elective Account attributable to Deferred Compensation
and
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Employer matching contributions made pursuant to
Section 4.1(b);
(iv) shall be adjusted for Income; and
(v) 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. Notwithstanding the foregoing, with respect to Plan
Years beginning prior to January 1, 1990, compliance with the
Regulations then in effect shall be deemed to be compliance
with this paragraph.
(b) Within the applicable time required by law with respect
to a Plan Year of reference, the Employer shall 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. 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.
However, the Employer may designate that part or all of such
contribution be allocated to such Participants in such a manner as
to result in a uniform minimum allocation for each Participant.
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(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 cause the Plan to fail such tests, then the
Administrator may automatically reduce proportionately or, in the
order provided in this Section, 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.
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) The "Actual Contribution Percentage" for Plan Years
beginning after December 31, 1986 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, for Plan Years beginning after December 31,
1988, 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
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Participant group and Non-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, only Employer matching contributions
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)(2) which is incorporated herein
by reference. However, for Plan Years beginning after December 31,
1988, 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
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Highly Compensated Participant) shall be the ratio determined by
aggregating Employer matching contributions mad e 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" for Plan
Years beginning after December 31, 1988, 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) as in effect for Plan Years beginning after
December 31, 1988), 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.
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Notwithstanding the above, for Plan Years beginning after December
31, 1988, an employee stock ownership plan described in Code Section
4975(e)(7) 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) for Plan Years beginning after
December 31, 1988) 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, for Plan Years beginning after
December 1, 1988, 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 Article IV, 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) or allocated to his account for
the Plan Year.
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event that, for Plan Years beginning after
December 31, 1986, 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, 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
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portion of Excess Aggregate Contributions (and Income allocable to such
contributions) or, 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 is satisfied, or until his actual
contribution ratio equals the 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 is satisfied. The distribution and/or Forfeiture
of Excess Aggregate Contributions shall be made from Employer
matching contributions. 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
contributions, then the Vested portion of the Participant's Account
attributable to Employer matching contributions after the correction
shall be subject to Section 6.5.
(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.
(c) Excess Aggregate Contributions attributable to forfeited
matching contributions, shall be treated as Employer contributions
for purposes of Code Sections 404 and 415 even if distributed from
the Plan.
(d) For each Highly Compensated Participant, the amount of
Excess Aggregate Contributions is equal to the total 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 on behalf of the Highly
Compensated Participant (determined prior to the application of this
paragraph) minus the amount
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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 for Plan Years
beginning after December 31, 1988. 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 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) The determination and correction of Excess Aggregate
Contributions of a Highly Compensated Participant whose actual
contribution ratio is determined under the family aggregation rules
shall be the actual contribution ratio for the Highly Compensated
Participant as determined in accordance with Section 4.7, and 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 of each Family Member that were combined to
determine the group actual contribution ratio.
(g) 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
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in Section 4.7. 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.
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." If a short
limitation year is created because of an amendment changing the
limitation year to a different 12-consecutive month period, the
maximum permissible amount will not exceed the amount referred to in
(1) in the first sentence of this paragraph multiplied by a
fraction, the numerator of which is the number of months in the
short limitation year, and the denominator of which is twelve.
(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 for "limitation years" beginning after
December 31, 1986, (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))
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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 purposes of Section 4.7: (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
that 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.
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(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"
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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 a fraction, the numerator of which is the sum of the
Participant's projected annual benefits under all the defined
benefit plans (whether or not terminated) maintained by the
Employer, and the denominator of which is the lesser of 125 percent
of the dollar 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
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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.
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(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 4.7(k) and 4.7(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) If the sum of the defined benefit plan fraction and the
defined contribution plan fraction shall exceed 1.0 in any
"limitation year" for any Participant in this Plan, the
Administrator shall adjust the numerator of the defined benefit plan
fraction so that the sum of both fractions shall not exceed 1.0 in
any "limitation year" for such Participant.
(o) 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 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 individual under the
limits of Code Section 415, 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) return any voluntary Employee contributions or elective
deferrals (within the meaning of Code Section 402(g)(3)) 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 such contributions
in a "Section 415
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suspense account" (3) allocate 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.
(d) The Plan may not distribute "excess amounts," other than
voluntary Employee contributions, or elective deferrals (within the
meaning of Code Section 402(g)(3)), to Participants or Former
Participants.
4.11 TRANSFERS FROM QUALIFIED PLANS
(a) With the consent of the Administrator, amounts may be
transferred from other qualified plans by Participants, 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.
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(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 Sections 417 and 411(a)(11) and the Regulations thereunder.
Furthermore, such amount 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, short term debt security or other form of investment
acceptable to the Trustee until the first day of the following Plan
Year, at which time they shall be invested as determined by the
Administrator.
(f) For purposes of this Section, the term "qualified plan"
shall mean any tax qualified plan
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under Code Section 401(a). The term "amounts transferred from other
qualified plans" shall mean: (i) amounts transfer red to this Plan
directly from another qualified plan; (ii) lump-sum distributions
received by an Employee from another qualified plan which are eligible
for tax-free rollover to a qualified plan and which are transferred by
the Employee to this Plan within sixty (60) days following his receipt
thereof; (iii) amounts transferred to this Plan from a conduit
individual retirement account provided that the conduit individual
retirement account has no assets 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.
(g) 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.
(h) 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.
(i) All amounts allocated to a Participant's Rollover Account
may be treated as a Directed Investment Account pursuant to Section
4.12.
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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.
4.13 DEFINITIONS
"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 4.9.
"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 4.9. In addition, the Employer's
Qualified Non-Elective Contributions made pursuant to Section 4.1(c) shall be
considered an Elective Contribution for purposes of the Plan. Any such
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contributions deemed to be Elective Contributions shall be subject to the
requirements of Section 4.2 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.
"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 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 4.7 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, Excess Deferred
Compensation shall continue to be treated as Employer contributions even if
distributed pursuant to Section 4.2. However, Excess Deferred Compensation of
Non-Highly Compensated Participants is not taken into account for purposes of
Section 4.5 to the extent such Excess Deferred Compensation occurs pursuant to
Section 4.2.
"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.
"Participant's Combined Account" means the total aggregate amount of
each Participant's Elective Account and Participant's Account.
"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.
"Qualified Non-Elective Contribution" means the Employer's
contributions to the Plan that are made pursuant to Sections 4.1(c), 4.6, and
4.7. Such contributions shall be
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considered an Elective Contribution for the purposes of the Plan and used to
satisfy the "Actual Deferral Percentage" test or a Non-Elective Contribution
for the purposes of the Plan and used to satisfy the "Actual Contribution
Percentage" test.
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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" prior to taking
into consideration any contribution to be allocated for that Plan Year. 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.
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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. 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 actual
Retirement Date, or as soon thereafter as is practicable, the Trustee shall
distribute all amounts credited to such Participant's 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.
The undistributed balance of his Vested Account shall include the
cash value or proceeds attributable to any Contracts owned by the
Trust on his behalf and shall become payable.
(b) Upon the death of a Former Participant, the Administrator
shall direct the Trustee, in accordance with the provisions of
Section 6.6 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) 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.
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(d) 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.
(e) 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 waiver, 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
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Disability prior to his Retirement Date or other termination of his
employment, all amounts credited to such Participant's 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
Account as though he had retired.
6.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) Within a reasonable period after the Anniversary Date (or
valuation 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,
deferred annuity, or other form of investment deemed appropriate by
the Administrator. The value of the Account shall be deemed to be
the value ascertained as of the respective Anniversary Date (or
valuation date). 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, 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 on or after the valuation for the Anniversary Date or
valuation date coinciding with or next following termination of
employment. Any distribution under this paragraph shall be made in
a manner which is consistent
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with and satisfies the provisions of this Article, including, but not limited
to, all notice and consequent requirements of Code Sections 417 and 411(a)(11)
and the Regulations thereunder. Notwithstanding anything herein to the
contrary, the Participant's Account shall not be credited with earnings of the
Plan with respect to the period between any Anniversary Date or valuation date
and the date of actual distribution. For purposes of this paragraph only, the
term valuation date shall be substituted for Anniversary Date, as applicable,
if a valuation date has occurred since the last Anniversary Date.
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.
If a distribution is one to which Sections 401(a)(11)
and 417 of the Internal Revenue Code do not apply, such distribution
may commence less than 30 days after the notice required under Code
Section 1.411(a)-11(c) is given, provided that:
(1) the Plan Administrator clearly informs the Participant
that the Participant has a right to a period of at least 30
days after receiving the notice to consider the decision of
whether or not to elect a distribution (and, if applicable, a
particular distribution option), and
(2) the Participant, after receiving the notice,
affirmatively elects a distribution.
For purposes of this Section, if the value of a
Terminated Participant's Vested benefit is zero, the Terminated
Participant shall be deemed to have received a distribution of such
Vested benefit.
(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
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basis of the Participant's number of Years of Service according to
the following schedule:
Vesting Schedule
Years of Service Percentage
1 20%
2 40%
3 60%
4 80%
5 100%
(c) For any Top Heavy Plan Year, the Vested portion of the
Participant's Account of any Participant who has an Hour of Service
after the Plan becomes top heavy 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
schedule in paragraph (b) above.
If in any subsequent Plan Year, the Plan ceases to be a
Top Heavy Plan, the Administrator shall revert to the vesting
schedule in effect before this Plan became a Top Heavy Plan. Any
such reversion shall be treated as a Plan amendment pursuant to the
terms of the Plan.
(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) Upon the adoption of an amendment which affects the
vesting percentage with respect to a Participant with at least three
Years of Service (determined at the later of the effective date or
adoption date thereof), such Participant will be deemed to have
elected that his vested benefit be computed without regard to such
amendment if a larger benefit results thereby. Notwithstanding the
foregoing, for
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Plan Years beginning before January 1, 1989, or with respect to
Employees who fail to complete at least one (1) Hour of Service in a
Plan Year beginning after December 31, 1988, five (5) shall be
substituted for three (3) in the preceding sentence.
(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, or was deemed to
have 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 5 consecutive 1-Year
Breaks in Service commencing after the distribution, or
in the event of a deemed distribution, upon the reemployment
of such Former Participant. If a distribution occurs for any
reason other than a separation from service, the time for
repayment may not end earlier than five (5) years after the
date of separation. In the event the Former Participant does
repay the full amount distributed to him, or in the event of a
deemed distribution, 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 preceding his termination. The
source for such reinstatement shall first be any Forfeitures
occurring during the year. If such source is insufficient,
then the Employer shall contribute an amount which is
sufficient to restore any forfeited Accounts provided,
however, that if a discretionary contribution is made for such
year, such contribution shall first be applied to restore any
such Accounts and the
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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 as of the first day on which he is
credited with an Hour of Service following 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 prior to his
termination of employment 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 as of his
date of reemployment;
(v) If a Former Participant who has not had his Years of
Service before a 1-Year Break in
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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)(1) Unless otherwise elected as provided below, a
Participant who is married on the "annuity starting date" and who
does not die before the "annuity starting date" shall receive the
value of all of his benefits in the form of a joint and survivor
annuity. The joint and survivor annuity is an annuity that
commences immediately and shall be equal in value to a single life
annuity. Such joint and survivor benefits following the
Participant's death shall continue to the spouse during the spouse's
lifetime at a rate equal to 50% of the rate at which such benefits
were payable to the Participant. This joint and 50% survivor
annuity shall be considered the designated qualified joint and
survivor annuity and automatic form of payment for the purposes of
this Plan. However, the Participant may elect to receive a smaller
annuity benefit with continuation of payments to the spouse at a
rate of seventy-five percent (75%) or one hundred percent (100%) of
the rate payable to a Participant during his lifetime, which
alternative joint and survivor annuity shall be equal in value to
the automatic joint and 50% survivor annuity. An unmarried
Participant shall receive the value of his benefit in the form of a
life annuity. Such unmarried Participant, however, may elect in
writing to waive the life annuity. The election must comply with
the provisions of this Section as if it were an election to waive
the joint and survivor annuity by a married Participant, but without
the spousal consent requirement. The Participant may elect to have
any annuity provided for in this Section distributed upon the
attainment of the "earliest retirement age" under the Plan. The
"earliest retirement age" is the earliest date on which, under the
Plan, the Participant could elect to receive retirement benefits.
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(2) Any election to waive the joint and survivor annuity must
be made by the Participant in writing during the election
period and be consented to by the Participant's spouse. If
the spouse is legally incompetent to give consent, the
spouse's legal guardian, even if such guardian is the
Participant, may give consent. Such election shall designate
a Beneficiary (or a form of benefits) that may not be changed
without spousal consent (unless the consent of the spouse
expressly permits designations by the Participant without the
requirement of further consent by the spouse). Such spouse's
consent shall be irrevocable and must acknowledge the effect
of such election and be witnessed by a Plan representative or
a notary public. Such consent shall not be required if it is
established to the satisfaction of the Administrator that the
required consent cannot be obtained because there is no
spouse, the spouse cannot be located, or other circumstances
that may be prescribed by Regulations. The election made by
the Participant and consented to by his spouse may be revoked
by the Participant in writing without the consent of the
spouse at any time during the election period. The number of
revocations shall not be limited. Any new election must
comply with the requirements of this paragraph. A former
spouse's waiver shall not be binding on a new spouse.
(3) The election period to waive the joint and survivor
annuity shall be the 90-day period ending on the "annuity
starting date."
(4) For purposes of this Section, the "annuity starting date"
means the first day of the first period for which an amount is
paid as an annuity, or, in the case of a benefit not payable
in the form of an annuity, the first day on which all events
have occurred which entitle the Participant to such benefit.
(5) With regard to the election, the
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Administrator shall provide to the Participant no less than
30 days and no more than 90 days before the "annuity starting
date" a written explanation of:
(i) the terms and conditions of the joint and survivor
annuity, and
(ii) the Participant's right to make, and the effect
of, an election to waive the joint and survivor annuity,
and
(iii) the right of the Participant's spouse to consent
to any election to waive the joint and survivor annuity,
and
(iv) the right of the Participant to revoke such
election, and the effect of such revocation.
(b) In the event a married Participant duly elects pursuant
to paragraph (a)(2) above not to receive his benefit in the form of
a joint and survivor annuity, or if such Participant is not married,
in the form of a life annuity, 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;
(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
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Participant's life expectancy (or the life expectancy of the
Participant and his designated Beneficiary).
(3) Purchase of or providing an annuity. However, such
annuity may not be in any form that will provide for payments
over a period extending beyond either the life of the
Participant (or the lives of the Participant and his
designated Beneficiary) or the life expectancy of the
Participant (or the life expectancy of the Participant and his
designated Beneficiary).
(c) The present value of a Participant's joint and survivor
annuity derived from Employer and Employee contributions may not be
paid without his written consent if the value exceeds, or has ever
exceeded, $3,500 at the time of any prior distribution. Further, the
spouse of a Participant must consent in writing to any immediate
distribution. If the value of the Participant's 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 may immediately distribute such benefit without such
Participant's consent. No distribution may be made under the
preceding sentence after the "annuity starting date" unless the
Participant and his spouse consent in writing to such distribution.
Any written consent required under this paragraph must be obtained
not more than 90 days before commencement of the distribution and
shall be made in a manner consistent with this Section.
(d) 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) No consent shall be valid unless the Participant has
received a general description of the material features and an
explanation of the relative values of the optional forms of
benefit
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available under the Plan that would satisfy the notice requirements
of Code Section 417.
(2) 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 this Section.
(3) Notice of the rights specified under this paragraph shall
be provided no less than 30 days and no more than 90 days
before the "annuity starting date."
(4) 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 "annuity
starting date."
(5) No consent shall be valid if a significant detriment is
imposed under the Plan on any Participant who does not consent
to the distribution.
(e) Notwithstanding any provision in the Plan to the
contrary, the distribution of a Participant's benefits made on or
after January 1, 1985, whether under the Plan or through the
purchase of an annuity contract, 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
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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
the life or a period certain measured by the life expectancy of the
Participant (or the lives of the Participant and the Participant's
designated Beneficiary) in accordance with Regulations.
Notwithstanding the foregoing, clause (ii) above shall not apply to
any 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.
Additionally, for calendar years beginning before 1989,
distributions may also be made under an alternative method
which provides that the then present value of the payments to
be made over the period of the Participant's life expectancy
exceeds fifty percent (50%) of the then present value of the
total payments to be made to the Participant and his
Beneficiaries.
(f) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse (other than in the case of a
life annuity) shall be redetermined annually in accordance with
Regulations. However, a Participant may elect prior to the time
distributions must commence that such determination
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shall not be recalculated. Such election, once made, shall be
irrevocable. Life expectancy and joint and last survivor expectancy
shall be computed using the return multiples in Tables V and VI of
Regulation Section 1.72-9.
(g) Subject to the spouse's right of consent afforded under
the Plan, the restrictions imposed by this Section shall not apply
if a Participant has, prior to January 1, 1984, made a written
designation to have his retirement benefit paid in an alternative
method acceptable under Code Section 401(a) as in effect prior to
the enactment of the Tax Equity and Fiscal Responsibility Act of
1982.
(h) All annuity Contracts under this Plan shall be
nontransferable 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 this Plan.
(i) If a distribution is made at a time when a Participant is
not fully Vested in his Participant's Account 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 time to the account balance after
distribution.
6.6 DISTRIBUTION OF BENEFITS UPON DEATH
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(a) Unless otherwise elected as provided below, a Vested
Participant who dies before the annuity starting date and who has a
surviving Spouse shall have a death benefit equal to 50% of his
Participant's Account paid to his surviving Spouse in the form of a
Pre-Retirement Survivor Annuity. However, this section shall not
apply to any Plan which prior to this did not permit distribution in
the form of an annuity.
(b) Any election to waive the Pre-Retirement Survivor Annuity
before the Participant's death must be made by the Participant in
writing during the election period and shall require the spouse's
irrevocable consent in the same manner provided for in Section 6.5.
Further, the spouse's consent must acknowledge the specific
nonspouse Beneficiary. Notwithstanding the foregoing, the nonspouse
Beneficiary need not be acknowledged, provided the consent of the
spouse acknowledges that the spouse has the right to limit consent
only to a specific Beneficiary and that the spouse voluntarily
elects to relinquish such right.
(c) The election period to waive the Pre-Retirement Survivor
Annuity shall begin on the first day of the Plan Year in which the
Participant attains age 35 and end on the date of the Participant's
death. An earlier waiver (with spousal consent) may be made
provided a written explanation of the Pre-Retirement Survivor
Annuity is given to the Participant and such waiver becomes invalid
at the beginning of the Plan Year in which the Participant turns age
35. In the event a Vested Participant separates from service prior
to the beginning of the election period, the election period shall
begin on the date of such separation from service.
(d) With regard to the election, the Administrator shall
provide each Participant within the applicable period, with respect
to such Participant (and consistent with Regulations), a written
explanation of the Pre-Retirement Survivor Annuity containing
comparable information to that required pursuant to Section 6.5.
For the purposes of this paragraph, the term "applicable period"
means, with respect to a Participant, whichever of the following
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periods ends last:
(1) The period beginning with the first day of the Plan Year
in which the Participant attains age 32 and ending with the
close of the Plan Year preceding the Plan Year in which the
Participant attains age 35;
(2) A reasonable period after the individual becomes a
Participant. For this purpose, in the case of an individual
who becomes a Participant after age 32, the explanation must
be provided by the end of the three-year period beginning with
the first day of the first Plan Year for which the individual
is a Participant;
(3) A reasonable period ending after the Plan no longer fully
subsidizes the cost of the Pre-Retirement Survivor Annuity
with respect to the Participant;
(4) A reasonable period ending after Code Section 401(a)(11)
applies to the Participant; or
(5) A reasonable period after separation from service in the
case of a Participant who separates before attaining age 35.
For this purpose, the Administrator must provide the
explanation beginning one year before the separation from
service and ending one year after such separation.
(e) If the value of the Pre-Retirement Survivor Annuity
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 immediate
distribution of such amount to the Participant's spouse. No
distribution may be made under the preceding sentence after the
annuity starting date unless the spouse consents in writing. If the
value exceeds, or has ever exceeded, $3,500 at the time of any prior
distribution, an immediate distribution of the entire amount may be
made to the surviving spouse, provided such surviving spouse
consents in writing to such distribution. Any written consent
required under
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this paragraph must be obtained not more than 90 days before
commencement of the distribution and shall be made in a manner
consistent with Section 6.5.
(f)(1) In the event the death benefit is not paid in the form
of a Pre-Retirement Survivor Annuity, it shall be paid to the
Participant's Beneficiary 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 to the rules
specified in this Section:
(i) One lump-sum payment in cash;
(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.
(2) In the event the death benefit payable pursuant to
Section 6.2 is payable in installments, then, upon the death
of the Participant, the Administrator may direct the Trustee
to segregate the death benefit into a separate account, and
the Trustee shall invest such segregated account separately,
and the funds accumulated in such account shall be used for
the payment of the installments.
(g) Notwithstanding any provision in the Plan to the
contrary, distributions upon the death of a Participant made on or
after January 1, 1985, shall be made in accordance with the
following requirements and shall otherwise comply with Code Section
401(a)(9) and the Regulations thereunder. If the death benefit is
paid in the form of a Pre-Retirement Survivor Annuity, then
distributions to the Participant's surviving Spouse must commence on
or before the later of: (1) December 31st of the calendar year
immediately
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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 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 and
distributions are not to be made in the form of a Pre-Retirement
Survivor Annuity, 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 the life of such designated
Beneficiary (or 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.
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For purposes of this Section, 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.
6.7 TIME OF SEGREGATION OR DISTRIBUTION
Except as limited by Sections 6.5 and 6.6, whenever the Trustee is
to make a distribution on or as of an Anniversary Date or valuation date, the
distribution may be made on such date or as soon thereafter as is practicable.
Except, 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 occur 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
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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 after it is payable 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 account balance of such participant shall be treated
as a 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 RESERVED
6.11 ADVANCE 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 Vested Participant's
Elective Account valued as of the last Anniversary Date or 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) Medical expenses described in Code Section 213(d)
incurred by the Participant, his spouse, or any of his
dependents (as defined in Code Section 152);
(2) The purchase (excluding mortgage payments) of
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a principal residence for the Participant;
(3) Payment of tuition for the next semester or quarter of
post-secondary education for the Participant, his spouse,
children, or dependents; or
(4) The need to prevent the eviction of the Participant from
his principal residence or foreclosure on the mortgage of the
Participant's principal residence.
(b) No such distribution shall be made from the Participant's
Account until such Account has become fully Vested.
(c) 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
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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.
(d) Notwithstanding the above, for Plan Years beginning after
December 31, 1988, 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.
(e) 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 Sections 417 and 411(a)(11) and the
Regulations thereunder.
6.12 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS
All rights and benefits, including elections, provided to a
Participant in this Plan shall be subject to the rights afforded to any
"alternative 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 reached the "earliest retirement age" under
the Plan. For the purposes of this Section, "alternate payee," "qualified
domestic relations order" and "earliest retirement age" shall have the meaning
set forth under Code Section 414(p).
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6.13 DISTRIBUTION OF ELIGIBLE ROLLOVERS
(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 Article, a "Distributee" may elect, at the time and in the
manner prescribed by the 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) Definitions.
(1) Eligible Rollover Distribution: An "Eligible Rollover
Distribution" is any distribution of all or any portion of the
balance to the credit of the Distributee, except that an
Eligible Rollover Distribution does not include: any
distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the Distributee or the joint
lives (or joint life expectancies) of the Distributee and the
Distributee's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent
such distribution is required under Section 401(a)(9) of the
Code; and the portion of any distribution that is not
includable in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to
employer securities).
(2) Eligible Retirement Plan: An "Eligible Retirement Plan"
is an individual retirement account described in Section
408(a) of the Code, an individual retirement annuity described
in Section 408(b) of the Code, an annuity plan described in
Section 403(a) of the Code, or a qualified trust described in
Section 401(a) of the Code, 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.
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(3) Distributee: A "Distributee" may be 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
Section 414(p) of the Code, are Distributees with regard to
the interest of the spouse or former spouse.
(4) Direct Rollover: A "Direct Rollover" is a payment by the
Plan to the Eligible Retirement Plan specified by the
Distributee.
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ARTICLE VII
RESERVED
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ARTICLE VIII
AMENDMENT, TERMINATION AND MERGERS
8.1 AMENDMENT
(a) The Employer-Sponsor shall have the right at any time to
amend the Plan, subject to the limitations of this Section and
applicable statutes and regulations. 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 Participants 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 or 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 benefit.
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8.2 TERMINATION
(a) The Employer-Sponsor 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'
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-Sponsor
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).
8.4 AMENDMENT PROCEDURES
In accordance with Act Section 402(b)(3), the procedure for
amending, terminating, merging or consolidating the Plan shall be that such an
amendment shall be set forth in writing and be authorized and adopted by the
Board of Directors. The Board
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of Directors may authorize any officer of the Employer to act on its behalf in
signing and implementing any such amendment.
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PAGE
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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, and 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 Account.
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If the Participant or Beneficiary does not agree that the loan
indebtedness is a valid claim against his Vested Participant's 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 New York, 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.
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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 of 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,
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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 any 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.
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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 are
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 or in part, the Plan. The
Administrator shall have the sole responsibility for the administration of the
Plan, which responsibility is specifically described in the Plan. The Trustee
shall have the 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 or 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
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(a) Notwithstanding anything herein to the 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 to provide the top-heavy minimum, 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 of 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 any 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 the event of any conflict between the
terms of the Plan and any Contract purchased hereunder, the Plan provisions
shall control.
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ARTICLE X
PARTICIPATING EMPLOYERS
10.1 ADOPTION BY OTHER EMPLOYERS
Notwithstanding anything herein to the contrary, with the consent of
the Employer and Trustee but only where the duties of the Trustee are
affected, 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.
Compensation and Years of Service with a Participating Employer shall only be
recognized during the time a Participating Employer participated in this Plan,
unless otherwise provided herein.
The following entity or entities have adopted this Plan and all the
provisions thereof and shall participate herein effective as of the date(s)
indicated, and are known as Participating Employer(s): January 1, 1989 to
December 31, 1991 D AIRCRAFT PRODUCTS COMPANY
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 Account as well as his accumulated service time
with the transferor or predecessor, and his length of
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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 be allocated to the Participants employed by the
Employer or Participating 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 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 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 part of 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
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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 among all Participants of all Participating 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 Employees of each Participating Employer.
The Trustee may, but need not, register Contracts so as to evidence that a
particular Participating Employer i 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.
Notwithstanding the foregoing, the Employer-Sponsor may elect that all
contributions and Forfeitures made with respect to Employees of a respective
Participating Employer or a designated combination of Participating Employers,
be paid to and held by the Trustee for the exclusive benefit of the Employees
of such Participating Employers and the Beneficiaries of such Employees,
subject to all the terms and conditions of this Plan.
10.6 AMENDMENT
Amendment of this Plan by the Employer-Sponsor at any time when
there shall be a Participating Employer hereunder shall not require the
consent of any Participating Employer.
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 thereof and of any applicable conditions
imposed shall be
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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 or Insurer 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.
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 such event shall any part of the corpus or income of the
Trust as it relates to such Participating Employer be used for or diverted for
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.
10.9 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE
If any Participating Employer is prevented in whole or in part from
making a contribution to the Trust Fund which it would otherwise have made
under the Plan by reason of having no current or accumulated earnings or
profits, or because such earnings or profits are less than the contribution
which it would otherwise have made, then, pursuant to Code Section
404(a)(3)(B), so much of the contribution which such Participating Employer
was so prevented from making may be made, for the benefit of the participating
employees of such Participating Employer, by the other Participating Employers
who are members of the same affiliated group within the meaning of Code
Section 1504 to the extent of their current or accumulated earnings or
profits, except that such contribution by each such other Participating
Employer shall be limited to the proportion of its total current and
accumulated earnings or profits remaining after adjustment for its
contribution to the Plan made without regard to this paragraph which the
total prevented contribution bears to the total current and accumulated
earnings or profits of all the Participating Employers remaining after
adjustment for all contributions made to the Plan without regard to this
paragraph.
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A Participating Employer on behalf of whose employees a contribution
is made under this paragraph shall not reimburse the contributing
Participating Employers.
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PAGE
<PAGE>
SIGNATURE PAGE
IN WITNESS WHEREOF, the following hereby adopt this Plan and consent to their
appointments and responsibilities as described herein.
ATTEST: CONAP, INC.
/s/ E.F. Jackman By: /s/ T. P.Wozniak
Employer
( S E A L )
DATE: December 27, 1994
CONAP, INC. EMPLOYEES'
SAVINGS AND PROFIT SHARING PLAN
PLAN ADMINISTRATIVE COMMITTEE:
H. D. Weeks
PRESIDENT
E. F. Jackman
SECRETARY
T. P. Wozniak
TREASURER
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CONAP, INC.
EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
AMENDMENT NO. 1
PURSUANT to the authority granted in Article VIII, the Employer-Sponsor hereby
adopts the following changes to the above-named Plan, effective as of
January 1, 1996, except as otherwise provided herein as follows:
1. The definition of Compensation in Section 1.8 shall be amended by adding
the following to the end of the first paragraph thereof:
"The determination period shall be the Plan Year, unless the Employer elects
otherwise. Amounts contributed by the Employer under the within Plan shall
not be considered as compensation, except compensation shall include any
amount which is contributed by the Employer pursuant to a salary reduction
agreement and which is not includable in the gross income of the employee
under Sections 402(e)(3), 402(h), 403(b) or 125 of the Code."
2. The definition of Compensation in Section 1.8 shall be amended by
deleting the second paragraph and restating it in its entirety as follows:
"For a Participant's initial year of participation, Compensation shall be
recognized as of an Employee's effective date of participation pursuant to
Section 3.3."
3. Section 3.3 shall be deleted in its entirety and restated as follows,
effective September 1, 1996:
"An Eligible Employee shall become a Participant effective as of the January
1st, April 1st, July 1st, or October 1st coinciding with or next following the
date 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 one-year Break in Service has not
occurred.)"
4. Subsection 4.1(b) shall be deleted in its entirety and restated as
follows effective September 1, 1996:
"4.1(b)(1) On behalf of each Participant who is eligible to share in
matching contributions for the Plan Year, a discretionary matching
contribution equal to a percentage of each such Participant's Deferred
Compensation, the exact
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percentage to be determined each year by the Employer, which amount shall
be deemed an Employer's Non-Elective Contribution. Except, however, the
Employer retains the discretion to limit, on an annual basis, the amount of
Deferred Compensation that will be matched. "4.1(b)(2) On behalf of each
Participant who is eligible to share in the matching contribution for the
Plan Year, a matching contribution equal to 75% of each such Participant's
Deferred Compensation, which amount shall be deemed an Employer's
Non-Elective Contribution. However, a Participant's Deferred Compensation in
excess of 4% of his Compensation shall not be eligible for a matching
contribution. The Employer retains the discretion to change, on an annual
basis, the matching contribution percentage or the amount of Deferred
Compensation that will be matched."
5. Subsection 4.1(d) shall be deleted in its entirety and restated as
follows effective September 1, 1996:
"4.1(d)(1) On behalf of each Participant eligible to share in the allocations
under this paragraph a discretionary amount, which amount shall be deemed an
Employer's Non-elective Contribution.
"4.1(d)(2) On behalf of each Participant eligible to share in the
allocations under this paragraph, a contribution equal to 1% of his
Compensation, which shall be deemed an Employer's Non-Elective
Contribution."
6. The first sentence of Subsection 4.2(a) shall be deleted in its entirety
and restated as follows:
"Each Participant may elect to defer his Compensation which would have
been received in the Plan Year, but for the deferral election."
7. Subsection 4.2(k)(2) shall be deleted in its entirety and restated as
follows:
"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 once a month. Any modification
shall not have retroactive effect and shall remain in force until
revoked."
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<PAGE>
8. Subsection 4.4(b)(4) shall be deleted in its entirety and restated as
follows:
"With respect to the Employer's Non-Elective Contribution made pursuant
to Subsection 4.1(d)(2), 1% of each eligible Participant's Compensation
shall be allocated to such Participant's Account in accordance with such
Subsection. Notwithstanding the foregoing, for the Plan Year beginning
in 1996, only Compensation paid on or after September 1, 1996, shall be
recognized for purposes of allocating the discretionary contribution
under this Subsection.
"In the event the Employer makes an additional discretionary Employer's
Non-Elective Contribution pursuant to Subsection 4.1(d)(1), such amount
shall be allocated to each eligible 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 a Year of Service during the Plan
Year and are actively employed on the last day of the Plan Year shall be
eligible to share in the allocation of discretionary contributions and
Forfeitures for the year."
9. Paragraph (c) of Section 4.4 is hereby deleted in its entirety and
restated as follows:
"(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. The remaining Forfeitures, if any, shall be used
to reduce the contribution of the Employer hereunder for the Plan Year in
which such Forfeitures occur. 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."
10. The following new Section 6.14 is added to conform with Department of
Labor loan regulations:
"6.14 LOANS TO PARTICIPANTS
I. DEFINITIONS
For purpose of this amendment only, the following definitions shall
apply:
(a) "Code" shall mean the Internal Revenue Code of 1986 and amendments
thereto.
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<PAGE>
(b) "Company shall mean CONAP, INC.
(c) "Employer" shall mean the Company and any corporation which is a
member of a controlled group of corporations (as defined in Section
414(b) of the Code) which includes the Company; any trade or business
(whether or not incorporated) which is under common control (as defined
in Section 414(c) of the Code) with the Company; any organization
(whether or not incorporated) which is a member of an affiliated service
group (as defined in Section 414(m) of the Code) which includes the
Company; and, any other entity required to be aggregated with the
Company pursuant to regulations under Section 414(o) of the Code.
(d) "Hour of Service" shall have the meaning otherwise specified in the
Plan.
(e) "Participant" shall mean and include any person who is
participating in the Plan pursuant to the provisions thereof.
(f) "Plan" shall mean the CONAP, INC. EMPLOYEES' SAVINGS AND PROFIT
SHARING PLAN which has been assigned plan number 001.
(g) "Plan Year" shall mean the period specified as such in the
provisions of this Plan other than this amendment.
II. FORCE
These amendments shall override and supersede any conflicting provisions of
the Plan. This document shall serve as the required written loan program and
set forth the rules and guidelines for making Participant loans.
III. LOANS TO PARTICIPANTS
(a) The Trustee may 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.
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<PAGE>
(b) Loans shall not be granted to any Participant or his Beneficiary
that provide for a repayment period extending beyond such Participant's
Normal Retirement Date.
(c) 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. Additionally, with respect to any loan made prior
to January 1, 1987, the $50,000 limit specified in (1) above shall be
unreduced.
(d) Loans shall provide for level amortization with payments 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. Notwithstanding the foregoing, loans made prior to January 1,
1987, which are used to acquire, construct, reconstruct or substantially
rehabilitate any dwelling unit which, within a reasonable period of time
is to be used (determined at the time the loan is made) as a principal
residence of the Participant or a member of his family (within the
meaning of Code Section 267(c)(4) may provide for periodic repayment
over a reasonable period of time that may exceed five (5) years.
Additionally, loans made prior to January 1, 1987, may provide for
periodic payments which are made less frequently than quarterly and
which do not necessarily result in level amortization.
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<PAGE>
(e) Any loans granted or renewed on or after the last day of the first
Plan Year beginning after December 31, 1988, 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; and
(8) the method for crediting loan interest to Participant
Accounts.
Such Participant loan program shall be contained in the Summary Plan
Description, which 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 the Plan.
(f) the minimum loan amount that may be borrowed by a Participant under
this plan is $1,000.00."
11. The following new Subsection 6.2(f) is added as follows:
"(f) 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."
12. The following new Subsection 6.4(g) is added as follows:
"(g) 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 benefit."
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<PAGE>
13. The following new Section 5.3, entitled EMPLOYER SECURITIES shall be
added as follows:
"5.3 EMPLOYER SECURITIES
The Trustee shall be empowered to acquire and hold 'qualifying Employer
securities' as this term is defined in the Act, provided, however, that the
Trustee shall not be permitted to acquire any qualifying Employer securities
if, immediately after the acquisition of such securities or property, the
fair market value of all qualifying Employer securities held by the Trustee
hereunder should amount to more than 10% of the fair market value of all the
assets in the Trust Fund."
IN WITNESS WHEREOF, the following individual has caused this Amendment No. 1
to be executed.
CONAP, INC.
By:__________________
Corporate Secretary
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AGREEMENT OF TRUST
THIS TRUST AGREEMENT made and entered into on the 28th day
of December, 1983, between CONAP, INC. (hereinafter referred
to as the "Company"), and MELLON BANK, N.A. (hereinafter)
referred to as the "Trustee".
WITNESSETH:
WHEREAS, the Company has adopted the Conap, Inc. Employees'
Savings and Profit Sharing Plan (hereinafter referred to
as the "Plan"); and
WHEREAS, it is the express intent of the Company that this
Agreement of Trust and the Plan be considered one for the
purpose of compliance with any Federal statute, regulation or
rule; and
WHEREAS, the Company is desirous of establishing a trust fund
to hold and administer the assets to be contributed to fund the
benefits provided by the Plan;
NOW, THEREFORE, the Company and the Trustee, each intending to
be legally bound hereby, agree as follows:
SECTION 1
1.1 The Trust hereinafter established is intended to comply
with the Employee Retirement Income Security Act of 1974
(hereinafter referred to as the "Act") and to be a "qualified
trust" as such term is used in Sections 401 and Sol of the
Internal Revenue Code of 1954, as amended.
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PAGE
<PAGE>
1.2 The terms used herein shall have the meanings ascribed to
them by the Act or, where defined by the Plan, the Plan, unless
the context clearly indicates an intended different meaning.
SECTION 2
2.1 The Company hereby establishes with the Trustee a trust
consisting of such sums of money and such property acceptable
to the Trustee as shall from time to time be paid or delivered
to the Trustee.
2.2 The Trustee shall have no duty to determine or collect any
Plan contributions and shall be solely accountable for monies
or properties actually received by it. The Company shall have
the sole duty and responsibility for the determination of the
accuracy or sufficiency of the contributions to be made under
the Plan, the transmittal of the same to the Trustee and
compliance with any statute, regulation or rule applicable to
contributions.
2.3 Except as, otherwise provided herein, the Trustee shall not
have any duty nor shall the Trustee have any responsibility to
determine the type and form of investment which may be selected
by any Participant. Except as otherwise provided herein, the
Trustee shall solely be liable for placement of monies or other
property received by it in such funds or accounts as the
Trustee shall be directed from time to time by the
Administrator.
2.4 The Trustee shall not have any duty nor shall it take any
affirmative action in order to acquire any monies or properties
held by a prior trustee for the benefit of the Plan and shall
only be responsible for monies or properties actually received
by it; nor shall the Trustee have any duty to inquire into the
administration of the Plan or actions taken under the Plan by
any such prior trustee. In- no manner shall the actions of any
predecessor trustee establish any precedents OF liabilities
hereunder as to the Trustee.
2.5 All monies and properties which become subject to this
Agreement, all investments and reinvestments made therewith and
proceeds thereof and all earnings and profits thereon ' less the
payments which at the time of reference shall have been made by
the Trustee 'as authorized herein and any losses hereto, are
referred to herein as the "Fund".
2.6 The Fund shall be held by the Trustee in trust and dealt
within accordance with the provisions of this Agreement and
the Act.
2.7 Except as may be provided by law for the purpose of
returning the Company's contributions or in case the Plan of
which this Trust forms a part provides for the return of
Company contributions in the event the Plan fails to qualify
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PAGE
<PAGE>
under the applicable provisions of the Internal Revenue Code,
at no time prior to the satisfaction of all liabilities for
benefits under the Plan shall any part of the Fund be used for
or diverted to purposes other than for the exclusive benefit of
participants, or retired participants under the Plan, or their
beneficiaries and for the payment of the expenses of the Plan.
2.8 The Trustee may commingle the assets attributable to the
plans for which contributions are made under this Agreement if
this Agreement is applicable to core than one plan, and may
commingle the Fund with funds of other trusts of similar nature
created by the Company for the exclusive benefit of its
employees. Where commingling is effected with other trusts
maintained by the Company, the combined trust, to the extent
that assets are attributable to contributions made under this
Agreement, shall be the Fund referred to herein. By agreement
the Trustee may maintain such records as the Trustee deems
necessary in order to separate the Fund from the funds of the
other trusts maintained by the Company and, if applicable, to
separate the assets attributable to each of the plans for which,
contributions are made under this Agreement. should separation
be required, either of the Fund from other trusts maintained by
the Company or of any plan 'for which contribution; are made
under this Agreement from the Fund, the Trustee shall make such
separation in accordance with generally accepted accounting
principles and, where applicable, upon the certification of an
Enrolled Actuary.
SECTION 3
3.1 The Plan shall be administered by the person or persons,
board, committee or other entity designated by the terms of the
Plan to administer the Plan or, in the absence of such
designation, the Plan shall be administered by the Company
(hereinafter referred to as the -"Administrator") and said
Administrator shall have the sole Fiduciary duty-as to such
Plan administration and the Trustee shall not be responsible in
any respect for such administration.
3.2 The Company shall notify the Trustee in writing of all
persons or entities who will function as Administrator under
the terms of this Agreement and the rights, powers and duties
of each such person or entity and in the absence of such
notice, the Trustee shall rely solely upon the Company.
3.3 The Trustee shall be entitled to deal with any person or
entity identified by the Company as an Administrator until
notified otherwise by the Company, in writing.
3.4 The Company shall fully indemnify and save harmless the
Trustee from liability and expense incident to any act or
failure to act by reason of the Trustee's reliance upon or
compliance with instructions issued by the Administrator or the
Company which are on their face proper under the Plan or plans,
this Agreement of Trust, and applicable law.
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<PAGE>
SECTION 4
4.1 The Trustee shall make such payments out of the Fund as
the Administrator may from time to time in writing direct,
including payment of any expenses of the Fund. In the
discretion of the Administrator, such payments may either be
made directly to the person specified by the Administrator or
deposited in a checking account maintained by the Administrator
for the purpose of making payments to the person or persons
entitled to such payments under the Plan.
4.2 To the extent monies are held in the account designated by
the Administrator, the Administrator shall hold such monies in
trust and in such a manner that the same shall be secure from
the claims of all creditors of the Company or Affiliate,
Administrator or any participant or beneficiary covered by the
Plan.
4.3 Any direction given to the Trustee in accordance with this
Section need not specify the specific application of the
payment to be made, but shall specify that the payment is for
the purposes of the Plan or the payment of Plan expenses. The
Trustee shall be fully protected in making such payments from
time to time and shall be charged with no responsibility
whatsoever respecting the application of such monies.
4.4 The Trustee is specifically authorized to appoint other
fiduciaries with the consent of the Company as to part or all
of the Fund and functions incident thereto where, in the sole
discretion of the Trustee, such delegation is necessary in
order to facilitate the operations of the Trust and such
delegation is not inconsistent with the purposes of the Trust
or in contravention of any law. In the delegation of such
fiduciary duties, the Trustee may appoint as Fiduciary any
person or entity including but not limited to the Administrator
or the Company, notwithstanding the fact that such@ person or
entity is then considered a Fiduciary, a Party in Interest or a
Disqualified Person. Upon such delegation, the Trustee may
require such reports, bonds or written agreements as it deems
necessary to properly monitor the actions of its delegates
SECTION 5
5.1 The Administrator shall direct the Trustee to establish on
its books and records the same number of accounts as there are
investment options available to the employees or are specified
by the Plan. The Administrator shall establish an investment
purpose for each account, either by separate written
designation or through an agreement between the Administrator
and the Trustee that shall incorporate therein the investment
purposes and, if applicable, the investment restrictions which
the Plan provides as to investment options. The accounts so
established shall, until changed by the Administrator, operate
in the manner and form established.
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PAGE
<PAGE>
5.2 The Administrator shall, upon the making of any
contribution to this Trust by the Company, or, if applicable* a
Participant, or both, instruct the Trustee in writing of the
manner that such contribution is to be allocated between the
accounts previously established.
5.3 The Trustee shall not be responsible nor liable to
establish or maintain a record or account in the name of any
individual Participant. The Trustee shall not be required to
establish the value of any Participant's individual interest in
the Fund or any account established hereunder. Should the
Trustee and the Administrator or Company agree that the Trustee
shall maintain individual account records, such agreement shall
be separate and apart from the terms of this Trust. Such an
agreement shall not be construed as implying any duty upon the
Trustee hereunder even though the Trustee, in its corporate
capacity as record keeper for the accounts of individual
Participants, shall have the right, power or duty to issue
instructions or directions as to the disposition or
distribution of 'any assets held hereunder.
5.4 For the purposes of application of this Agreement of
Trust, each account created hereunder shall be considered a
separate trust insofar as the application of powers granted the
Trustee. Notwithstanding the provisions of this agreement of
Trust which established powers and duties with regard to the
Trust as a whole, the Trustee shall exercise such of those
powers as are consistent with the investment purposes of each
account. Where applicable or required, the Trustee with the
Company's consent may subdivide any account as may be required
to fulfill either its duties hereunder or the instructions of
the Administrator.
SECTION 6
6.0
(a) The Plan of which this Trust forms a part has therein
designated, either by name or through a procedure contained
therein, a Fiduciary who has been invested with the power to
manage and control the assets of the Plan. Such power includes
the authority for Fiduciary to appoint an Investment Manager.
To the extent that such Fiduciary shall exercise the power
to manage or control the Plants assets held as part of the
Fund, the Trustee, as to those assets, shall be released and
relieved of all investment duties, responsibilities and
liabilities normally or statutorialy incident to a trustee and
thereafter act in the capacity of custodian of such assets-
The Trustee, in its capacity of custodian, shall retain only
those powers and duties set forth in Section 6 as are necessary
to its functions as custodian. The other powers shall only be
exercised upon the written directions of the Fiduciary.
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PAGE
<PAGE>
Should the Fiduciary at any time direct the Trustee to
utilize the services of any broker, dealer, employee or
representative of either, or any other person to render service
to the Fund, the Fiduciary shall be solely responsible for the
acts of such persons. The Trustee shall fully comply with the
written instructions, if of a continuing nature, until revoked,
unless the Trustee has actual knowledge that the instructions
of the Fiduciary are in contravention of the Act or the Plan.
(b) Should the Fiduciary appoint an Investment Manager, the
Fiduciary shall so notify the Trustee and instruct the Trustee
in writing to separate into a separate account those assets as
to which the Investment Manager has discretion and control.
The Fiduciary shall designate in writing the person or persons
who are to represent the Investment Manager in dealings with
the Trustee. Upon the separation of the assets in accordance
with the instructions of the Fiduciary, the Trustee shall
thereupon be relieved and released of all investment duties,
responsibilities and liabilities normally and statutorialy
incident to a trustee as to such separate account, and, as to
such separate account, the Trustee shall act as custodian. The
Trustee shall take no action with respect to the duties or
powers provided in Section 7 without receipt of written
directions of the Investment Manager. Unless specifically
denied in writing, the Trustee, as custodian, may hold the
assets of such separate account in the name of its nominee or
nominees.
Should the Investment Manager at any time elect to place
security transactions directly with a broker or dealer, the
Trustee shall not recognize such transaction unless and until
it has received instructions or confirmation of such fact from
the Investment Manager. Should the Investment Manager direct
the Trustee to utilize the services of any person with regard
to the assets under its management or control, such
instructions shall be in writing and shall specifically set
forth the actions to be taken by the Trustee as to such
services.
In the event that an Investment Manager places security
transactions directly or directs the utilization of service,
the Investment Manager shall be solely responsible for the acts
of such persons. The sole duty of the Trustee as to such
transactions shall be incident to its practices as custodian.
6.1 The Trustee shall discharge all its investment duties as
provided under Sections 6 and 7 hereof in a manner consistent
with the investment purposes of each account and with the care,
skill, prudence and diligence under the circumstances then
prevailing that a prudent man acting in like capacity and
familiar with such matters would use in the conduct of an
enterprise of a like character with like aims, and, if not
restricted by the specific investment purposes of any account,
by diversifying the investments of each account held hereunder
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<PAGE>
<PAGE>
so as to minimize the risk of large losses unless under the
Plan or circumstances it would be clearly not prudent to
diversify. The duty of the Trustee to . diversify shall pertain
solely to each account separately and shall not pertain to the
allocation of any contribution among accounts, which allocation
shall be determined solely by the Plan or the Participants, and
which is communicated to the Trustee by the Administrator.
6.2 Subject to the foregoing, the Trustee shall from time to
time invest and reinvest the Fund and keep it invested, without
distinction between Principal and income, as it in its sole
discretion deems advisable.
6.3 Such investment and reinvestment shall not be restricted
to securities or property of the character authorized for
investments by trustees under any statute or other laws of any
state, district or territory.
6.4 The Trustee shall be the sole judge as to the use of any
security or form of security in the fulfilling of the
investment purposes of each account established under this
Agreement. Notwithstanding the investment purpose of any
account, the Trustee is authorized to use any form of
short-term investment pending permanent investment or
disposition.
6.5 In addition to any power granted to trustees under any
statute or other laws, such laws ' and statutes if necessary
being incorporated herein by reference, the Trustee's
investment powers shall include, but shall not be limited to,
investment in the following:
(a) domestic or foreign common and preferred stocks, including
warrants, rights and preferred stocks convertible into common
stock, regardless of where or how traded;
(b) corporate bonds and debentures and any such securities
which are convertible into common stock, domestic or foreign;
(c) bonds or other obligations of the United States of America
or any foreign nation, and any agencies thereof, or any bonds
or other obligation which are directly or indirectly guaranteed
by the United States or any foreign nation, or any agency
thereof;
(d) obligations of the states and of municipalities or of any
agencies thereof;
(e) notes of any nature;
(f) mortgages and real estate, wherever situate and whether
developed or undeveloped, including sales and leasebacks,
interest or participations in real estate investment trusts and
non-income producing properties;
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PAGE
<PAGE>
(g) savings accounts, certificates of deposit and other types
of time deposits with any financial institution or
quasi-financial institution, either domestic or foreign,
including any such financial institution operated or maintained
by the Trustee in its corporate capacity;
(h)leaseholds of any duration;
(i) mineral and other natural resources, including, but not
limited to, oil, gas, timber and coal, and any participation
therein in any form, including but not limited to, royalties,
ownership, drilling and exploration;
(j) any collective or common trust fund operated and
maintained by the Trustee, including, but not limited to,
demand notes, short-term notes and cash equivalent funds;
(k) any collective, common or pooled trust fund operated or
maintained by any bank or trust company, including the Trustee,
exclusively for the commingling and collective investment of
monies or other assets held under or as part of a plan which is
established in conformity with and qualities under Section
401(a) of the Internal Revenue Code as the same shall be from
time to time amended, superseded or renumbered.
Notwithstanding the provisions of this Trust Agreement which
place restrictions upon the actions of the Trustee, to the
extent monies or other assets are transferred to such
collective trust in exchange for an interest in such collective
trust, the terms and conditions of the plan of such collective
trust shall solely govern the investment duties,
responsibilities and powers of the trustee of such collective
trust, and to the extent required by law, such terms,
responsibilities and powers shall be incorporated herein by
reference and shall be part of this Agreement of Trust. For
the purposes of valuation of any interest under the Plan of
which this Trust forms a part, the value of the interest
maintained by the Fund in such collective trust shall be the
fair market value of the collective fund units held determined
in accordance with generally recognized valuation
(1) open-end and closed-end investment companies, regardless
of the purposes for which such fund or funds were created, and
any partnership, limited or unlimited, joint venture and other
forms of joint enterprise created for any lawful purpose;
(m) individual or group insurance policies and contracts
including, but not limited to, life insurance, annuity (fixed
or variable) and investment policies and contracts, but only if
directed by the Administrator to purchase or retain such
policies and contracts.
6.6 The Trustee shall not maintain indicia of ownership of any
asset held in this Trust outside the jurisdiction of the
District Courts of the United States unless such holding is
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approved through ruling or regulation promulgated under the Act
by the Secretary of Labor.
6.7 The Trustee may, in its discretion, keep such portion of
the Fund in cash or cash balances as deemed advisable from time
to time, and shall keep such portion of the Fund in cash or
cash balances as may be specified from time to time in a
written request of the Company to meet contemplated payments
from the Fund. The Trustee shall not be liable for any
interest on any cash balances so maintained.
6.8 Should the Trustee exercise the powers granted under
Subsections 6.5(1) and (m) above, the Trustee shall be liable
for the actions of the investment company or the insurance
company only if:
(a) it participates knowingly in or knowingly undertakes to
conceal an act or omission of such party, knowing that such act
or omission is a breach of fiduciary duty established by the
Act;
(b) by its failure to exercise prudence in the selection of or
continued association with either the investment company or
insurance company, it has enabled either to commit a breach of
fiduciary duty;
(c) having knowledge of a breach of fiduciary duty it fails
to make reasonable efforts under the circumstances to remedy
such breach of fiduciary duty.
6.9 The Trustee may retain for a reasonable time, for the
purpose of evaluation, any property contributed to the Fund in
the same form in which contributed. The Trustee shall
determine the fair value of such property and such value shall
be at all times binding on the Trustee.
6.10 As provided in the Plan, all amounts received by the
Trustee which are directed by the Administrator to be placed in
the account which has as its investment purpose investment in
Qualifying Employer Securities or any amount received by the
Trustee as a result of holding such Qualifying Employer
Securities shall be invested and reinvested in Qualifying
Employer Securities. The entire account so established shall
be invested one hundred percent (100%) in such. Qualifying
Employer Securities. In the operation of this account, the
Trustee shall have no investment discretion, except as
hereinafter provided, and no duty or responsibility to
determine the investment quality or prudence of such
investment. The Company, its Board of Directors or the
Fiduciary shall have the duty and responsibility to determine
whether or not the investment in the Qualifying Employer
Securities is prudent.
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6.11 The Trustee may, but shall not be required to, place
amounts received by it for the purpose of investment in
temporary investments if in the opinion of the Trustee market
conditions are such that investment in Qualifying Employer
Securities would be disruptive or could not be accomplished.
6.12 The Fiduciary shall have the right to direct the Trustee
as to the source of any acquisition or disposition or any
Qualifying Employer Securities. In such case, the Trustee may
require the Fiduciary to furnish the Trustee evidence,
satisfactory to the Trustee, that such proposed action has been
approved by all appropriate Federal agencies which have
jurisdiction over such transactions.
6.13 The Trustee shall acquire or dispose of all Qualifying
Employer Securities in the open market or through the method of
purchase and sales which is used by the Trustee ii the normal
course of its security transactions. The Trustee shall be
permitted to net all purchases and sales for the account
limited in investment purposes to Qualifying Employer
Securities, provided, however, both sales and purchases will be
at market value and the books and records of the Trustee shall
clearly reflect such fact. Should the Trustee for any reason
be unable to acquire or dispose of the Qualifying employer
Securities in the manner provided by this Section 6.13, it
shall notify the Fiduciary of such fact and shall thereafter
make no purchases or sales of securities until instructions are
received from the Fiduciary.
6.14 The Trustee shall value the Qualifying Employer
Securities, utilizing the same techniques and sources used by
it in valuing other assets which comprise this and other
trusts. Should the Trustee be unable to establish a value
under such methods for any Qualifying Employer Security, the
Trustee shall so notify the Fiduciary. Thereafter, and
including the period for which notice was issued, and
continuing until the Trustee can establish value, it shall be
the duty and obligation of the fiduciary to establish and
communicate the values to be placed on the Qualifying Employer
Securities which cannot be valued. During any period in which
the Fiduciary is determining value, the Trustee shall have no
duty or responsibility as to valuation of such securities.
SECTION 7
7.1 Where there is established an account under which the
investment purpose is to invest in Qualifying Employer
Securities and the right to vote or the exercise of other
rights concerning such Securities are vested either in whole or
in part in the Participants, the Trustee shall act only in
accordance with the instructions received from the
Administrator or any agent of the Administrator who has been
appointed by the Administrator to determine the method and mode
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by which the Participants are to exercise such rights. In
compliance with this subsection, 'the Trustee and the
Administrator may, by separate agreement, establish the Trustee
as the agent of the Administrator for such purpose.
7.2 As to all assets other than Qualifying Employer Securities
and as to those rights incident to Qualifying Employer
Securities which are not vested in the Participants under the
Plan, the Trustee is authorized and empowered, in addition to
powers granted under the Decedent's, Estates and Fiduciaries
Code of the Commonwealth of Pennsylvania, as amended, which
statute, to the extent of its granting of powers applicable to
trusts of a similar nature to this Trust, is incorporated
herein by reference:
(a) to sell, exchange, convey, transfer or otherwise dispose
of any property held in the Fund and to make any sale by
private contract or public auction; and 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;
(b) to vote in person or by proxy any stocks, bonds or other
securities to this Trust, is incorporated herein by reference:
(c) to exercise any rights appurtenant to any such stocks,
bonds or other securities for the conversion thereof into other
stocks, bonds or securities, or to exercise rights or options
to subscribe for or purchase additional stocks, bonds or other
securities, and to make any and all necessary payments with
respect to any such conversions or exercise;
(d) to join in, dissent from or oppose the reorganization,
recapitalization, consolidation, sale or merger of
corporations, or properties of which the Fund may hold stocks,
bonds or other securities or in which it may b-e interested,
upon such terms and conditions as deemed wise, to pay any
expenses, assessments or subscriptions in connection therewith,
and to accept any securities or property, whether or not
trustees would be authorized to invest in such securities or
property, which may be issued upon any such reorganization,
recapitalization, consolidation, sale or merger and thereafter
to hold the same, without any duty to sell;
(e) to make, execute, acknowledge and deliver any and all
deeds, leases, mortgages, assignments, documents of transfer
and conveyance and any and all other instruments that may be
necessary or appropriate to carry out the powers herein
granted;
(f) to borrow or raise monies from any lender, including the
Trustee in its corporate Capacity, if permitted by law, for the
benefit of the Fund and in conjunction with its duties under
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this Agreement of Trust in such amount and upon such terms and
conditions as in the Trustee's absolute discretion may be
advisable; and for any sums so borrowed to issue promissory
notes as Trustee and to secure the repayments thereof by
mortgaging or pledging all or any part of the Fund except
collective or pooled trust units which are held in the Fund,
the pledge of which shall be forbidden; and no person lending
money to the Trustee shall be bound to see to the application
of the money loaned or to inquire into the validity, expediency
or propriety of any such borrowing;
(g) to cause any investments in the Fund to be registered in,
or transferred into, the Trustee's name or the names of a
nominee or nominees, including but not limited to that of the
Trustee, a clearing corporation, or a depository, or in book
entry form, or to cause any such investments to be retained
unregistered or in a form permitting transfer by delivery,
provided that the books and records, of the Trustee shall at
all times show that such investments are a part of the Fund;
and the Trustee may cause any such investment, or the evidence
thereof, to be, held by the Trustee, in a depository, in a
clearing corporation, in book entry form, or by any other
entity or in any other manner permitted by law;
(h) to manage, administer, operate or lease for any number of
years, regardless of any restrictions or leases made by
fiduciaries, develop, improve, repair, alter, demolish,
mortgage, pledge, grant options with respect to, or otherwise
deal with any real property or interest therein at any time
held by it, all upon such terms and conditions as may be deemed
advisable, to renew or extend or participate in the renewal or
extension of any mortgage upon such terms as may be deemed
advisable, and to agree to a reduction in the rate of interest
on any mortgage or any other modification or change in the
terms of any mortgage or of any guarantee pertaining thereto in
any manner and to any extent that may be deemed advisable for
the protection of the Fund or the preservation of the value of
the investment; to waive any default, whether in the
performance of any covenant or condition of any mortgage or in
the performance of any guarantee, or to enforce any default in
such manner and to such extent as may be deemed advisable; to
exercise and enforce any and all rights of foreclosure, to bid
in the property on foreclosure, to take a deed in lieu of
foreclosure, with or without paying a consideration therefor,
and in connection therewith to release the obligation on the
bonds or notes secured by such mortgage, and to exercise and
enforce in any action, suit or proceeding at law or in equity
any right or remedy in respect of any such mortgage or
guarantee;
(i) to form corporations and to create trusts, to hold title
to any security or other property, to enter into agreements
creating partnerships or joint ventures for any purpose or
purposes determined by the Trustee to be held in the best
interests of the Fund;
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(j) to explore for and to develop mineral interests and to
acquire land, either by lease or purchase, for such purchase,
and to enter into any type of contract or agreement incident
thereto, and to sell any product produced by reason of such
development or exploration to any person or persons on such
terms and conditions as the Trustee deems advisable, to enter
into agreements and contracts for transportation of the same;
(k) to insure against any contingency in any property held in
the Fund for any amount and to pay any premiums required for
such coverage;
(1) to purchase or otherwise acquire and make payment therefor
from the Fund any bond or other form of guarantee or surety
required by any authority having jurisdiction over this Trust
and its operation, or believed by the Trustee to be in the best
interests of the Fund, except the Trustee may not obtain any
insurance whose premium obligation extends to the Fund which
would protect the Trustee against its liability for breach of
fiduciary duty;
(m) to defend' against or participate in any legal actions
involving the Fund or the Trustee in the manner and to the
extent it deems advisable, the costs of any such defense or
participation to be borne by the Company, as provided for below;
(n) to enter into any type of contract with any insurance
company or companies, either for the purposes of investment or
otherwise; provided that no insurance company dealing with the
Trustee shall be considered to be a party to this Agreement and
shall only be bound by and held accountable to the extent of
its contract with the Trustee. The insurance company need only
look to the Trustee with regard to any instructions issued and
shall make disbursements or payments to any person, including
the Trustee, as shall be directed by the Trustee. Where
applicable, the Trustee shall be the sole owner of and all
insurance policies or contracts issued. Such Contracts or
policies, unless otherwise determined, shall be held as an
asset of the Fund for safekeeping or custodian purposes, only.
(o) to establish and maintain such separate accounts in
accordance with the instructions of the Administrator as the
Administrator deems necessary for the proper administration of
the Plan. Such accounts may or may not be subject to the
general terms of this Agreement.
7.3 In addition, and not by way of limitation, the Trustee
shall have any and all powers and duties concerning the
investment, retention or sale of property held in trust as if
it were absolute owner of the property, and no restrictions
with regard to the property so held shall be implied, warranted
or sustained by reason of this Agreement.
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SECTION 8
8.1 The Trustee shall not engage in or cause the Trust to
engage in any transaction if it knows or should know, through
normal business sources excepting information received by any
department other than the Trust and Investment Department of
the Trustee, which shall not be imputed to the Trustee, that
such transaction constitutes a direct or indirect:
(a) sale or exchange or leasing of any property between the
Plan and Party in interest;
(b) lending of money or extension of credit between the Trust
and a Party. in Interest;
(c) furnishing of goods, services or facilities between the
Trust and a Party in Interest;
(d) transfer to or use by or for the benefit of a Party in
Interest of any assets of the Trust.
8.2 Notwithstanding the prohibitions contained in Section 8.1,
the Trustee, in acquiring and disposing of Qualifying Employer
Securities but as to no other assets held under this Agreement
of Trust, may deal directly or indirectly with persons or
entities who would constitute Parties in Interest or
Disqualified Persons if, and then only to the extent, directed
by the Administrator or Fiduciary if;
(a) such acquisition or sale is for adequate consideration or
at a price not less favorable than that established on the open
market and such facts are certified to by the Administrator of
Fiduciary, and
(b) no commission or compensation is charged with respect
thereto.
8.3 Notwithstanding the foregoing, the Trustee may, in
addition to the services rendered in conjunction with its
duties and responsibilities as Trustee under the Terms of this
Agreement, provide such Ancillary Services as meet the
following standards:
(a) there have been adopted by the Trustee internal safeguards
which assure that such Ancillary Services are consistent with
sound banking and financial practices as determined by the
appropriate banking authority;
(b) the Ancillary Services are provided in accordance with
guidelines which are intended to meet the standards established
by the appropriate banking authority;
(c) the compensation received by the Trustee for such services
is reasonable and established in an arm's-length manner.
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SECTION 9
9.1 The Trustee shall be entitled to such reasonable
compensation for services rendered by it in accordance with its
schedule of compensation in effect when such services are
performed, together with all reasonable expenses incurred by
the Trustee as a result of the execution of its duties
hereunder, including, but not limited to, legal and accounting
expenses, expenses incurred as a result of disbursements and
payments made by the Trustee, and reasonable compensation for
agents, counsel or other services rendered to the Trustee by
third parties and expenses incident thereto. Expenses for
which the Company may reimburse the Trustee also include taxes
of any kind whatsoever that may be levied or assessed under
existing or future laws of any jurisdiction upon or in respect
of the Fund.
9.2 All compensation, expenses, taxes and assessments
specified herein, to the extent that they are not paid by the
Company, shall constitute a charge upon the Fund and be paid to
the Trustee from the Fund upon written notice from the Trustee
to the Company.
9.3 The Trustee shall notify the Company with regard to any
tax assessments which it receives on any income or property
maintained in the Fund and, unless notified to the contrary-by
the Company within ninety (90) days, shall pay any such
assessments. If the Company notifies the Trustee within said
period that it is its opinion or the opinion of counsel that
such assessments are invalid or that they should be contested,
then the Trustee shall take whatever action is indicated in the
notice received from the Company or counsel, including
contesting the assessment or litigating any claims.
SECTION 10
10.1 The Trustee shall keep accurate and detailed accounts of
all investments, receipts and disbursements and other
transactions hereunder, and all accounts, books and records
relating thereto shall be open at all reasonable times to
inspection and audit by any person designated by the
Administrator.
10.2 Within one hundred twenty (120) days following the close
of each fiscal year of the Fund, or following the close such
other period as may be agreed upon between the Trustee and the
Administrator, and within one hundred twenty (120) days, or
such other agreed upon period, unless such period be waived,
after the removal or resignation of the Trustee as provided for
in this Agreement, the Trustee shall file with the
Administrator and/or the Company a certified written report
setting forth all investments, receipts and disbursements, and
other transactions effected during such fiscal year or other
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annual period or during the period from the close of the
preceding fiscal year or other preceding period to the date of
such removal or resignation, including a description of all
securities and investment purchases and sales with the cost or
net proceeds of such purchases or sales and showing all cash,
securities and other property held at the close of such fiscal
year or other period, valued currently, and such other
information as may be required of the Trustee under any
applicable law.
10.3 Upon the expiration of sixty (60) days from the date of
filing such annual- or other account, the Trustee shall, to the
extent permitted by law, be forever released and discharged
from any liability or accountability to anyone as respects the
propriety of all matters - and transactions shown or clearly
reflected therein, and to the extent not so released and
discharged, the Company shall indemnify and save harmless the
Trustee from any liability on account of any clerical
miscalculations or other inaccuracies of a similar nature which
can be ascertained from a review of such statement, except as
to those matters to which the Company files written objections
with the Trustee-within such sixty (60) day period.
10.4 Neither the company nor the Administrator shall- have the
right to demand-or be entitled to any further or different
accounting by the trustee and no participant or his beneficiary
or any other person shall have the right to demand or be
entitled to any accounting by the Trustee, other than those to
which they may be entitled under the law.
10.5 Nothing contained herein will be construed or interpreted
to deny the Trustee the right to have its account judicially
determined.
10.6 Notwithstanding any other provision of the Plan or this
Agreement, the Trustee shall not be subject to any liability
for any' act or omission, regardless of its nature, after the
expiration of three years commencing with the day next
following the date that any report is due to be filed with the
Secretary of Labor which discloses such error or omission, or,
if earlier, three years after the date a party plaintiff did of
should have had knowledge of such act or omission.
10.7 For the purposes of this Section, the Trustee shall
conclusively presume that the Administrator has made all
Federal filings as of the date required. Should the Trustee
incur any liability by reason of the Administrator's failure to
timely file, the Company shall fully reimburse the Trustee for
any and all obligations, including penalties, interest or
expenses, so incurred by the Trustee.
10.8 The Trustee shall determine the fair market value of the
Fund at such times as may be required to carry out the
provisions of the Plan or the Trust, but shall do so at least
annually.
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10.9 All records and accounts maintained by the Trustee with
respect to the Fund shall be preserved. for such period as may
be required under any applicable law. Upon the expiration of
any such required retention period, the Trustee shall have the
right to destroy such records and accounts after first
notifying the Company in writing of its intention and
transferring to the Company any such records and accounts
requested. The Trustee shall have the right to preserve all
records and accounts in original form, or on microfilm,
magnetic tape, or any other similar process.
SECTION 11
11.1 The Trustee acknowledges that it assumes the fiduciary
duties established by this Agreement.
11.2 The Trustee shall not, however, be liable for any loss to
or diminution of the Fund except to the extent that any such
loss or diminution results from action or inaction on the part
of the Trustee which is judicially determined to the be a breach of
its fiduciary duties.
SECTION 12
12.1 The Trustee may be removed by the Company, upon written
notice to the Trustee to that effect. The Trustee may resign
as Trustee hereunder, upon written notice to that effect
delivered to the Company.
12.2 Such removal or resignation shall become effective as of
the last day of the month which coincides with or next follows
the expiration of thirty (30) days from the date of the
delivery of such written notice, unless an earlier or later
date is agreed upon by the Company and the Trustee.
12.3 In the event of such removal or resignation, a successor
Trustee shall be appointed by the Company to become Trustee as
of the time such removal or resignation becomes effective.
Such successor Trustee shall accept such appointment by an
instrument in writing delivered to the Company and the Trustee
and upon becoming successor Trustee shall be vested with all
the rights, powers, duties, privileges and immunities as
successor Trustee hereunder as if originally designated as
Trustee in this Agreement.
12.4 Upon such appointment and acceptance, the retiring Trustee
shall endorse, transfer, assign, convey and deliver to the
successor Trustee all of the funds, securities and other
property then held by it in the Fund, except such amount as it
may consider necessary to cover its compensation and its
expenses in connection with the settlement of its accounts and
the delivery of the Fund to the successor Trustee, and the
balance remaining of any amount so reserved shall be
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transferred and paid over to the successor Trustee promptly upon
settlement of its accounts, subject. to the right of the
retiring Trustee to retain any property deemed unsuitable by it
for transfer until such time as transfer can be made.
12.5 If the retiring Trustee holds any property unsuitable for
transfer, it shall retain such property, and as to such
property alone it shall be a co-trustee with the successor
Trustee, its duties and obligations being solely limited to any
such property, and it shall not have fiduciary duties of any
nature as to assets transferred. Should the successor Trustee
accept fiduciary responsibility as to such property, the
Trustee shall retain only custodian duties as to such property.
12.6 In the event of the removal or resignation of the Trustee
hereunder, the Trustee shall file with the Company a statement
and report of its accounts and proceedings covering the period
from its last annual statement and report, and its liability
and accountability to anyone with respect to the Propriety of
its acts and transactions shown in such written statement and
report shall be, governed by the terms of this Agreement.
SECTION 13
13.1 Any action by the Company pursuant to this Agreement shall
be evidenced or empowered in a written manner acceptable to the
Trustee, and the Trustee shall be fully protected in acting in
accordance with such writing.
13.2 Any action by any person or entity duly empowered to act
as Administrator with respect to any right, power or duty
specified in this Agreement shall be in writing, signed by such
person or by the person designated by such entity and the
Trustee shall act and shall be fully protected in acting in
accordance with such writing.
13.3 The Company shall furnish the Trustee from time to time
with certified copies of resolutions of its Board of Directors
evidencing the appointment, identity and termination of office
of any persons acting as or constituting the members of any
entity acting as Administrator with respect to any right, power
or duty specified in this Agreement.
SECTION 14
14.1 The Company reserves the right at any time and from time
to time by appropriate action acceptable to the Trustee:
(a) to modify or amend in whole or in part any or all of the
provisions of this Agreement upon sixty (60) days' prior notice
in writing to the Trustee; provided, however, that no
modification or amendment which affects the rights, duties or
responsibilities of the Trustee may be made without the
Trustee's consent, or
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(b) to terminate the Plan and this Agreement upon sixty (60)
days, prior notice in writing delivered, to the Trustee;
provided, further, that no termination, modification or
amendment prior to the satisfaction of all liabilities with
respect to participants, retired participants and their
beneficiaries under the Plan shall permit any part of the
corpus or income of the Fund to be used for or diverted to
purposes other than for the exclusive benefit of such
participants, retired participants and their beneficiaries.
14.2 Should this Trust form a part of a plan subject to the
jurisdiction of the Pension Benefit Guaranty Corporation as
provided in the Act, and should the Company notify the Trustee
of the termination of the Plan and this Trust, the Trustee
shall take no action as to the termination of this Trust until
it has received notice from the Administrator or the Company
that such termination has been approved by the Pension Benefit
Guaranty Corporation. Thereafter and in the event that this
Trust does not form a part of a plan subject to the
jurisdiction of the Pension Benefit Guaranty Corporation, the
Trustee shall distribute all cash, securities and other
property then constituting the Fund, less any amounts
constituting charges and expenses payable from the Fund, on the
date or dates specified by the Administrator to such persons
and in such manner as the Administrator shall direct. In
making such distributions, the Trustee shall be entitled to
assume that such distributions are in full compliance with and
are not in violation of any applicable law regulating the
termination of retirement plans such as the Plan and the
Trustee may require the Company or the Administrator to furnish
it with evidence that such distributions do not violate any
such applicable law. The Company assumes all liability of any
kind whatsoever arising from any distribution made by the
Trustee at the direction of the Administrator as a result of the
termination of this Agreement and shall indemnify-and save the
Trustee harmless from any attempt to impose any liability on
the Trustee with respect to any such distribution.
14.3 The Trustee reserves the right to retain such property as
is not, in the sole discretion of the Trustee, suitable for
distribution at the time of termination of this Agreement and
shall hold such property as custodian for those persons or
other entities entitled to such property until such time as the
Trustee is able to make distribution. The Trustee's duties and
obligations with respect to any. property held in accordance
with the above shall be purely custodial in nature and the
Trustee shall only be obligated to see to the safekeeping of
such property prior to its distribution. Upon complete
distribution of all property constituting the Fund, this
Agreement shall be deemed terminated.
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14.4 In the event no direction is provided by the Administrator
with respect to the distribution of the Fund upon termination
of this Agreement, the Trustee shall make such distributions as
are specified by the Plan. In the event the Plan is silent as
to the distributions to be made upon termination of the Plan or
the terms of the Plan are inconsistent with the then applicable
law, the Trustee shall distribute the Fund to participants and
their beneficiaries under the Plan in an equitable manner that
will not adversely affect the qualified status of the Plan
under Section 401(a) of the Internal Revenue Code or any other
statute of similar import and that will comply with any
applicable provisions of the Act regulating the allocation of
assets upon termination of plans such as the Plan. The Trustee
reserves the right to seek a judicial and administrative
determination as to the proper method of distribution of the
Fund upon termination of this Agreement.
14.5 If the Company teases to exist as a result of liquidation,
dissolution or acquisition in some manner, the Fund shall be
distributed as provided above upon termination of the Plan
unless a successor company elects to continue the Plan and this
Agreement as provided in this Agreement.
SECTION 15
15.1 Any corporation into which the Trustee may be merged or
with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Trustee is a
party, or any corporation succeeding to the trust business of
the Trustee, shall become the successor of the Trustee
hereunder, without the execution or filing of any instrument or
the performance of any further act on the part of the parties
hereto.
15.2 Any corporation into which the Company may be merged or
with which it may be consolidated, or an-y corporation
succeeding to all or a substantial part of the business
interest of the Company may become the Company hereunder if it
elects to continue the Plan and this Agreement and files a
notice in writing to that effect with the Trustee.
15.3 In the event that either the Administrator or the Company
authorizes and directs that the assets of another plan be
merged or consolidated with or transferred to this Trust, the
Trustee shall take no action with regard to such merger,
consolidation or transfer until it has been notified in writing
that each participant covered under the plan the assets of
which are to be merged consolidated or transferred will
immediately after such merger, consolidation or transfer be
entitled to a benefit either equal to or then greater than the
benefit he would have been entitled to had the Plan been
terminated.
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SECTION 16
16.1 The Trustee accepts the Trust crest ed hereunder and agrees
to be bound by all the terms of this Agreement.
SECTION 17
17.1 Except as heretofore provided, no company, participant or
beneficiary of the Plan or any plan to which the Trust applies
shall have any interest in or right to the assets of this
Trust, and to the full extent of all applicable laws, the
assets of this Trust shall not be subject to any form of
attachment, garnishment, sequestration or other actions of
collection afforded creditors of the Company, participants or
beneficiaries. The Trustee shall take cognizance of no
assignment or alienation of benefits unless, and then only to
the extent, written notices are received from the Administrator
or the Company.
SECTION 18
18.1 This Agreement shall be construed and enforced, to the
extent possible, according to the laws of the Commonwealth of
Pennsylvania, and all provisions hereof shall be administered
according to the laws of said Commonwealth and any federal
laws, regulations or rules which may from time to time be
applicable.
SECTION 19
19.1 To the extent permitted by law, only the Trustee and the
Company shall be necessary parties in any application to the
courts for an interpretation of this Agreement or for an
accounting by the Trustee, and no participant under the Plan or
other person having an interest in 'the Fund shall be entitled
to any notice or service of process. Any final judgment
entered in such an action or preceding shall, to the extent
permitted by law, be conclusive upon all persons claiming under
this agreement or the Plan.
SECTION 20
20.1 Any Company which is a subsidiary of the Company or which
may be affiliated with the Company in any way and which is now
or may hereafter be organized under the laws of the United
States of America, or of any State or Territory thereof may,
with the approval of the Board of Directors of the Company, by
resolution of its own Board of Directors, adopt this Agreement
if such subsidiary or affiliate shall have adopted this Plan;
provided that a separate trust shall be deemed to have been
created with respect to such subsidiary or affiliate.
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20.2 Any such subsidiary or affiliate may at any time segregate
its trust from further participation in this Agreement.
In such event, such subsidiary or affiliate shall file with the
Trustee a document evidencing its segregation from the Fund and
its continuance of a separate trust in accordance with the
provisions of this Agreement as though such subsidiary or
affiliate were the sole creator thereof. In such event, the
Trustee shall deliver to itself as Trustee of such separate
trust such share of the Fund as may be determined by the
Trustee to constitute the appropriate share of the Fund then
held in respect of the participating employees of such
subsidiary or affiliate. Such subsidiary or affiliate may
thereafter exercise, in respect of such separate trust, all of
the - rights and powers reserved to the Company under the
provisions of this Agreement.
SECTION 21
21.1 This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and,
said counterparts shall constitute but one and the same
instrument and may be sufficiently evidenced by any one
counterpart.
WITNESS the due execution hereof on the date first above
written:
CONAP, INC.
By/s/[Illegible]
Secretary
WITNESS:
[Illegible]
MELLON BANK, N.A.
By/s/[Illegible]
Vice President
WITNESS:
[Illegible]
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ACCOUNTANTS' CONSENT
The Board of Directors
Cytec Industries Inc.:
We consent to the use of our reports relating to the consolidated financial
statements of Cytec Industries Inc. And subsidiaries incorporated herein
by reference.
Our reports refer to changes in the methods of accounting for income taxes
and post retirement benefits other than pensions.
/s/ KPMG Peat Marwick LLP
---------------------
KPMG Peat Marwick LLP
Short Hills, New Jersey
August 28, 1996
- 153 -
POWER OF ATTORNEY
Know All Men by These Presents that the undersigned, a Director of Cytec
Industries Inc., a Delaware corporation, does hereby constitute and
appoint D.D. Fry, J.P. Cronin and E.F. Jackman, and each of them with
full power to act without the others, and with full power of substitution,
my true and lawful attorney-in-fact to sign on my behalf the Registration
Statement on Form S-8 for the registration with the United States
Securities and Exchange Commission of shares of Common Stock, par value
$.01 per share, of Cytec Industries Inc. to be offered and sold from
time to time pursuant to the Conap Employees' Savings and Profit Sharing
Plan, and any amendments and post-effective amendments to said
Registration Statement.
In Witness Whereof, I have hereunto set my hand and seal this 29 day of
August, 1996.
/s/Frederick W. Armstrong /s/ Gene A. Burns
- --------------------------- ------------------------
Frederick W. Armstrong Gene A. Burns
/s/Darryl D. Fry /s/Louis L. Hoynes, Jr.
- --------------------------- ------------------------
Darryl D. Fry Louis L. Hoynes, Jr.
/s/William P. Powell /s/Jerry R. Satrum
- --------------------------- ------------------------
William P. Powell Jerry R. Satrum
- 154 -
