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FIRST FEDERAL SAVINGS BANK OF LAKE COUNTY
EMPLOYEE STOCK OWNERSHIP AND 401(K) PLAN
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
ADMINISTRATION
2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER.............................14
2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY.................................15
2.3 ALLOCATION AND DELEGATION OF RESPONSIBILITIES...........................15
2.4 POWERS AND DUTIES OF THE ADMINISTRATOR..................................15
2.5 RECORDS AND REPORTS.....................................................16
2.6 APPOINTMENT OF ADVISERS.................................................17
2.7 PAYMENT OF EXPENSES.....................................................17
2.8 CLAIMS PROCEDURE........................................................17
2.9 CLAIMS REVIEW PROCEDURE.................................................17
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY...............................................18
3.2 EFFECTIVE DATE OF PARTICIPATION.........................................18
3.3 DETERMINATION OF ELIGIBILITY............................................18
3.4 TERMINATION OF ELIGIBILITY..............................................18
3.5 OMISSION OF ELIGIBLE EMPLOYEE...........................................19
3.6 INCLUSION OF INELIGIBLE EMPLOYEE........................................19
3.7 ELECTION NOT TO PARTICIPATE.............................................19
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION...........................19
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION.................................21
4.3 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION................................25
4.4 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS....................25
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS........................................28
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS..........................31
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4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS....................................32
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS......................35
4.9 MAXIMUM ANNUAL ADDITIONS................................................37
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS...............................39
4.11 TRANSFERS FROM QUALIFIED PLANS..........................................40
4.12 DIRECTED INVESTMENT ACCOUNT.............................................41
4.13 TREATMENT OF QUALIFIED MILITARY SERVICE.................................43
ARTICLE V
FUNDING AND INVESTMENT POLICY
5.1 INVESTMENT POLICY.......................................................43
5.2 TRANSACTIONS INVOLVING COMPANY STOCK....................................43
ARTICLE VI
VALUATIONS
6.1 VALUATION OF THE TRUST FUND.............................................44
6.2 METHOD OF VALUATION.....................................................45
ARTICLE VII
DETERMINATION AND DISTRIBUTION OF BENEFITS
7.1 DETERMINATION OF BENEFITS UPON RETIREMENT...............................45
7.2 DETERMINATION OF BENEFITS UPON DEATH....................................45
7.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY........................46
7.4 DETERMINATION OF BENEFITS UPON TERMINATION..............................47
7.5 DISTRIBUTION OF BENEFITS................................................50
7.6 HOW PLAN BENEFIT WILL BE DISTRIBUTED....................................54
7.7 DISTRIBUTION FOR MINOR BENEFICIARY......................................55
7.8 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN..........................55
7.9 PUT OPTION..............................................................55
7.10 PRE-RETIREMENT DISTRIBUTION.............................................56
7.11 ADVANCE DISTRIBUTION FOR HARDSHIP.......................................57
7.12 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION.........................58
7.13 DIRECT ROLLOVER.........................................................58
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ARTICLE VIII
AMENDMENT, TERMINATION, MERGERS AND LOANS
8.1 AMENDMENT...............................................................59
8.2 TERMINATION.............................................................60
8.3 MERGER OR CONSOLIDATION.................................................60
8.4 LOANS TO PARTICIPANTS...................................................61
ARTICLE IX
TOP HEAVY
9.1 TOP HEAVY PLAN REQUIREMENTS.............................................62
9.2 DETERMINATION OF TOP HEAVY STATUS.......................................62
ARTICLE X
MISCELLANEOUS
10.1 PARTICIPANT'S RIGHTS....................................................65
10.2 ALIENATION..............................................................65
10.3 CONSTRUCTION OF PLAN....................................................66
10.4 GENDER AND NUMBER.......................................................66
10.5 LEGAL ACTION............................................................66
10.6 PROHIBITION AGAINST DIVERSION OF FUNDS..................................67
10.7 BONDING.................................................................67
10.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE..............................67
10.9 INSURER'S PROTECTIVE CLAUSE.............................................68
10.10 RECEIPT AND RELEASE FOR PAYMENTS........................................68
10.11 ACTION BY THE EMPLOYER..................................................68
10.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY......................68
10.13 HEADINGS................................................................69
10.14 APPROVAL BY INTERNAL REVENUE SERVICE....................................69
10.15 UNIFORMITY..............................................................69
10.16 SECURITIES AND EXCHANGE COMMISSION APPROVAL.............................70
10.17 VOTING COMPANY STOCK....................................................70
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ARTICLE XI
PARTICIPATING EMPLOYERS
11.1 ADOPTION BY OTHER EMPLOYERS.............................................71
11.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS.................................71
11.3 DESIGNATION OF AGENT....................................................72
11.4 EMPLOYEE TRANSFERS......................................................72
11.5 PARTICIPATING EMPLOYER CONTRIBUTION.....................................72
11.6 AMENDMENT...............................................................72
11.7 DISCONTINUANCE OF PARTICIPATION.........................................72
11.8 ADMINISTRATOR'S AUTHORITY...............................................73
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FIRST FEDERAL SAVINGS BANK OF LAKE COUNTY
EMPLOYEE STOCK OWNERSHIP AND 401(K) PLAN
THIS PLAN, hereby adopted this __________ day of __________________,
by First Federal Savings Bank of Lake County (herein referred to as the
"Employer").
W I T N E S S E T H:
WHEREAS, the Employer heretofore established an Employee Stock
Ownership Plan effective January 4, 1994, (hereinafter called the "Effective
Date") known as First Federal Savings Bank of Lake County Employee Stock
Ownership Plan and which plan shall hereinafter be known as First Federal
Savings Bank of Lake County Employee Stock Ownership and 401(k) Plan (herein
referred to as the "Plan") in recognition of the contribution made to its
successful operation by its employees and for the exclusive benefit of its
eligible employees; and
WHEREAS, under the terms of the Plan, the Employer has the ability
to amend the Plan, provided the Trustee joins in such amendment if the
provisions of the Plan affecting the Trustee are amended;
WHEREAS, contributions to the Plan will be made by the Employer and
such contributions made to the trust will be invested primarily in the capital
stock of the Employer;
NOW, THEREFORE, effective January 1, 2001, except as otherwise
provided, the Employer 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:
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 Employer unless another person or entity has
been designated by the Employer pursuant to Section 2.2 to administer the Plan
on behalf of the Employer.
1.3 "Affiliated Employer" means any corporation which is a member of a
controlled group of corporations (as defined in Code Section 414(b)) which
includes the Employer; any trade or business (whether or not incorporated) which
is under common control (as defined in Code Section 414(c)) with the Employer;
any organization (whether or not incorporated) which is a member of an
affiliated service group (as defined in Code Section 414(m)) which includes the
Employer; and any other entity required to be aggregated with the Employer
pursuant to Regulations under Code Section 414(o).
1.4 "Aggregate Account" means, with respect to each Participant, the value
of all accounts maintained on behalf of a Participant, whether attributable to
Employer or Employee contributions, subject to the provisions of Section 9.2.
1.5 "Anniversary Date" means December 31.
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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
7.2 and 7.5.
1.7 "Code" means the Internal Revenue Code of 1986, as amended or replaced
from time to time.
1.8 "Company Stock" means common stock issued by the Employer (or by a
corporation which is a member of the controlled group of corporations of which
the Employer is a member) which is readily tradeable on an established
securities market. If there is no common stock which meets the foregoing
requirement, the term "Company Stock" means common stock issued by the Employer
(or by a corporation which is a member of the same controlled group) having a
combination of voting power and dividend rights equal to or in excess of:
(A) that class of common stock of the Employer (or of any other such
corporation) having the greatest voting power, and (B) that class of common
stock of the Employer (or of any other such corporation) having the greatest
dividend rights. Noncallable preferred stock shall be deemed to be "Company
Stock" if such stock is convertible at any time into stock which constitutes
"Company Stock" hereunder and if such conversion is at a conversion price which
(as of the date of the acquisition by the Trust) is reasonable. For purposes of
the preceding sentence, pursuant to Regulations, preferred stock shall be
treated as noncallable if after the call there will be a reasonable opportunity
for a conversion which meets the requirements of the preceding sentence.
1.9 "Company Stock Account" means the account of a Participant which is
credited with the shares of Company Stock purchased and paid for by the Trust
Fund or contributed to the Trust Fund.
A separate accounting shall be maintained with respect to that
portion of the Company Stock Account attributable to Elective Contributions and
Non-Elective Contributions.
1.10 "Compensation" with respect to any Participant means such
Participant's wages as defined in Code Section 3401(a) and all other payments of
compensation by the Employer (in the course of the Employer's trade or business)
for a Plan Year for which the Employer is required to furnish the Participant a
written statement under Code Sections 6041(d), 6051(a)(3) and 6052. Compensation
must be determined without regard to any rules under Code Section 3401(a) that
limit the remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for agricultural
labor in Code Section 3401(a)(2)).
For purposes of this Section, the determination of Compensation
shall be made by:
(a) including amounts which are contributed by the Employer
pursuant to a salary reduction agreement and which are not
includible in the gross income of the Participant under Code
Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and
Employee contributions described in Code Section 414(h)(2) that are
treated as Employer contributions.
For a Participant's initial year of participation, Compensation
shall be recognized as of such Employee's effective date of participation
pursuant to Section 3.2.
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Compensation in excess of $160,000 shall be disregarded. Such amount
shall be adjusted for increases in the cost of living in accordance with Code
Section 407(a)(17), 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. For any short Plan Year the Compensation limit shall be an
amount equal to the Compensation limit for the calendar year in which the Plan
Year begins multiplied by the ratio obtained by dividing the number of full
months in the short Plan Year by twelve (12).
For Plan Years beginning after December 31, 1996, for purposes of
determining Compensation, the family member aggregation rules of Code Section
414(q)(6) (as in effect prior to the Small Business Job Protection Act of 1996)
are eliminated.
For purposes of this Section, if the Plan is a plan described in
Code Section 413(c) or 414(f) (a plan maintained by more than one Employer), the
limitation applies separately with respect to the Compensation of any
Participant from each Employer maintaining the Plan.
1.11 "Contract" or "Policy" means any life insurance policy, retirement
income or annuity policy or annuity contract (group or individual) issued
pursuant to the terms of the Plan.
1.12 "Deferred Compensation" with respect to any Participant means the
amount of the Participant's total Compensation which has been contributed to the
Plan in accordance with the Participant's deferral election pursuant to Section
4.2 excluding any such amounts distributed as excess "annual additions" pursuant
to Section 4.10(a).
1.13 "Early Retirement Date" means the first day of the month (prior to
the Normal Retirement Date) coinciding with or following the date on which a
Participant or Former Participant attains age 55, and has completed at least 15
Years of Service with the Employer (Early Retirement Age). A Participant shall
become fully Vested upon satisfying this requirement if still employed at his
Early Retirement Age.
A Former Participant who terminates employment after satisfying the
service requirement for Early Retirement and who thereafter reaches the age
requirement contained herein shall be entitled to receive his benefits under
this Plan.
1.14 "Elective Contribution" means the Employer contributions to the Plan
of Deferred Compensation excluding any such amounts distributed as excess
"annual additions" pursuant to Section 4.10(a). In addition, the Employer
contribution made pursuant to Section 4.1(b) which is used to satisfy the safe
harbor methods permitted by Code Sections 401(k)(12) and 401(m)(11) and any
Employer Qualified NonElective Contribution made pursuant to Section 4.1(d) and
Section 4.6(b) which is used to satisfy the "Actual Deferral Percentage" tests
shall be considered an Elective Contribution for purposes of the Plan. Any
contributions deemed to be Elective Contributions (whether or not used to
satisfy the "Actual Deferral Percentage" tests) shall be subject to the
requirements of Sections 4.2(b) and 4.2(c) and shall further be required to
satisfy the nondiscrimination requirements of Regulation 1.401(k)-1(b)(5), the
provisions of which are specifically incorporated herein by reference.
1.15 "Eligible Employee" means any Employee.
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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 will not
be eligible to participate in this Plan unless such agreement expressly provides
for coverage in this Plan.
Employees who are nonresident aliens (within the meaning of Code
Section 7701(b)(1)(B)) and who receive no 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)) shall not be eligible to participate in this Plan.
Employees of Affiliated Employers shall not be eligible to
participate in this Plan unless such Affiliated Employers have specifically
adopted this Plan in writing.
1.16 "Employee" means any person who is employed by the Employer or
Affiliated Employer. 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 nonhighly
compensated work force.
1.17 "Employer" means First Federal Savings Bank of Lake County and any
successor which shall maintain this Plan; and any predecessor which has
maintained this Plan. The Employer is a corporation with principal offices in
the State of Florida. In addition, where appropriate, the term Employer shall
include any Participating Employer (as defined in Section 11.1) which shall
adopt this Plan.
1.18 "Excess Aggregate Contributions" means, with respect to any Plan
Year, the excess of the aggregate amount of the Employer matching contributions
made pursuant to Section 4.1(b) (to the extent such matching contributions are
not used to satisfy the safe harbor methods permitted by Code Sections
401(k)(12) and 401(m)(11)), Employer matching contributions made pursuant to
Section 4.1(c) and any qualified nonelective contributions or elective deferrals
taken into account pursuant to Section 4.7(c) on behalf of Highly Compensated
Participants for such Plan Year, over the maximum amount of such contributions
permitted under the limitations of Section 4.7(a) (determined by reducing
contributions made on behalf of Highly Compensated Participants in order of the
actual contribution ratios beginning with the highest of such ratios).
1.19 "Excess Contributions" means, with respect to a Plan Year, the excess
of Elective Contributions used to satisfy the "Actual Deferral Percentage" tests
made on behalf of Highly Compensated Participants for the Plan Year over the
maximum amount of such contributions permitted under Section 4.5(a) (determined
by reducing contributions made on behalf of Highly Compensated Participants in
order of the actual deferral ratios beginning with the highest of such ratios).
Excess Contributions shall be treated as an "annual addition" pursuant to
Section 4.9(b).
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1.20 "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(e)
actually made on behalf of such Participant for such taxable year, over the
dollar limitation provided for in Code Section 402(g), which is
incorporated herein by reference. Excess Deferred Compensation shall be treated
as an "annual addition" pursuant to Section 4.9(b) when contributed to the Plan
unless distributed to the affected Participant not later than the first April
15th following the close of the Participant's taxable year. Additionally, for
purposes of Sections 9.2 and 4.4(g), Excess Deferred Compensation shall continue
to be treated as Employer contributions even if distributed pursuant to Section
4.2(e). However, Excess Deferred Compensation of NonHighly Compensated
Participants is not taken into account for purposes of Section 4.5(a) to the
extent such Excess Deferred Compensation occurs pursuant to Section 4.2(d).
1.21 "ESOP" means an employee stock ownership plan that meets the
requirements of Code Section 4975(e)(7) and Regulation 54.4975-11.
1.22 "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.
1.23 "Fiscal Year" means the Employer's accounting year of 12 months
commencing on January 1 of each year and ending the following December 31.
1.24 "Forfeiture" means that portion of a Participant's Account that is
not Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion of a
Terminated Participant'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 7.4(g)(2). In addition, the term Forfeiture shall also include amounts
deemed to be Forfeitures pursuant to any other provision of this Plan.
1.25 "Former Participant" means a person who has been a Participant, but
who has ceased to be a Participant for any reason.
1.26 "415 Compensation" with respect to any Participant means such
Participant's wages as defined in Code Section 3401(a) and all other
payments of compensation by the Employer (in the course of the Employer's trade
or business) for a Plan Year for which the
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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)).
For Plan Years beginning after December 31, 1997, for purposes of
this Section, the determination of "415 Compensation" shall include any elective
deferral (as defined in Code Section 401(g)(3)), and any amount which is
contributed or deferred by the Employer at the election of the Participant and
which is not includible in the gross income of the Participant by reason of Code
Sections 125 and 457.
1.27 "414(s) Compensation" with respect to any Participant means such
Participant's "415 Compensation" paid during a Plan Year. The amount of "414(s)
Compensation" with respect to any Participant shall include "414(s)
Compensation" for the entire twelve (12) month period ending on the last day of
such Plan Year, except that "414(s) Compensation" shall only be recognized for
that portion of the Plan Year during which an Employee was a Participant in the
Plan.
For purposes of this Section, the determination of "414(s)
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125,
402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and Employee contributions described
in Code Section 414(h)(2) that are treated as Employer contributions.
"414(s) Compensation" in excess of $160,000 shall be disregarded.
Such amount shall be adjusted for increases in the cost of living in accordance
with Code Section 401(a)(17), 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. 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).
For Plan Years beginning after December 31, 1996, for purposes of
this Section, the family member aggregation rules of Code Section 414(q)(6) (as
in effect prior to the Small Business Job Protection Act of 1996) are
eliminated.
1.28 "Highly Compensated Employee" means, for Plan Years beginning after
December 31, 1996, 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 "lookback year" were "five percent owners" as defined in Section
1.34(c).
(b) Employees who received "415 Compensation" during the
"look-back year" from the Employer in excess of $80,000 and were in
the Top Paid Group of Employees for the Plan Year.
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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.
Notwithstanding the above, for the first Plan Year beginning after
December 31, 1996, the "look-back year" shall be the calendar year ending with
or within the Plan Year for which testing is being performed, and the
"determination year" (if applicable) shall be the period of time, if any, which
extends beyond the "look-back year" and ends on the last day of the Plan Year
for which testing is being performed (the "lag period").
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125,
402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and Employee contributions described
in Code Section 414(h)(2) that are treated as Employer contributions.
Additionally, the dollar threshold amount specified in (b) above shall be
adjusted at such time and in the same manner as under Code Section 415(d),
except that the base period shall be the calendar quarter ending September 30,
1996. In the case of such an adjustment, the dollar limit which shall be applied
is the limit for the calendar year in which the "look back year" begins.
In determining who is a Highly Compensated Employee, Employees who
are nonresident aliens and who received no earned income (within the meaning of
Code Section 911(d)(2)) from the Employer constituting United States
source income within the meaning of Code Section 861(a)(3) shall not be
treated as Employees. Additionally, 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."
1.29 "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 1.28. 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.
1.30 "Highly Compensated Participant" means any Highly Compensated
Employee who is eligible to participate in the Plan.
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1.31 "Hour of Service" means, for purposes of vesting and benefit accrual,
(1) each hour for which an Employee is directly or indirectly compensated
or entitled to compensation by the Employer for the performance of duties (these
hours will be credited to the Employee for the computation period in which the
duties are performed); (2) each hour for which an Employee is directly or
indirectly compensated or entitled to compensation by the Employer (irrespective
of whether the employment relationship has terminated) for reasons other than
performance of duties (such as vacation, holidays, sickness, jury duty,
disability, layoff, military duty or leave of absence) during the applicable
computation period (these hours will be calculated and credited pursuant to
Department of Labor regulation 2530.200b-2 which is incorporated herein by
reference); (3) each hour for which back pay is awarded or agreed to by
the Employer without regard to mitigation of damages (these hours will be
credited to the Employee for the computation period or periods to which the
award or agreement pertains rather than the computation period in which the
award, agreement or payment is made). The same Hours of Service shall not be
credited both under (1) or (2), as the case may be, and under (3).
Notwithstanding the above, (i) no more than 501 Hours of
Service are required to be credited to an Employee on account of 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 on behalf of a group of
Employees in the aggregate.
For purposes of this Section, 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.
1.32 "Income" means the income or losses allocable to Excess Deferred
Compensation, Excess Contributions or Excess Aggregate Contributions which
amount shall be allocated in the same manner as income or losses are allocated
pursuant to Section 4.4(c).
1.33 "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.
1.34 "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
<PAGE> 14
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 unincorporated business,
any person who owns more than five percent (5%) of the capital or
profits interest in the Employer. In determining percentage
ownership hereunder, employers that would otherwise be aggregated
under Code Sections 414(b), (c), (m) and (o) shall be
treated as separate employers.
(d) a "one percent owner" of the Employer having an annual
"415 Compensation" from the Employer of more than $150,000. "One
percent owner" means any person who owns (or is considered as owning
within the meaning of Code Section 318) more than one percent
(1%) of the outstanding stock of the Employer or stock possessing
more than one percent (1%) of the total combined voting power of all
stock of the Employer or, in the case of an unincorporated business,
any person who owns more than one percent (1%) of the capital or
profits interest in the Employer. In determining percentage
ownership hereunder, employers that would otherwise be aggregated
under Code Sections 414(b), (c), (m) and (o) shall be
treated as separate employers. However, in determining whether an
individual has "415 Compensation" of more than $150,000, "415
Compensation" from each employer required to be aggregated under
Code Sections 414(b), (c), (m) and (o) shall be taken
into account.
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125,
402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and Employee contributions described
in Code Section 414(h)(2) that are treated as Employer contributions.
1.35 "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.
<PAGE> 15
1.36 "Leased Employee" means, for Plan Years beginning after December 31,
1996, any person (other than an Employee of the recipient) who pursuant to an
agreement between the recipient and any other person ("leasing organization")
has performed services for the recipient (or for the recipient and related
persons determined in accordance with Code Section 414(n)(6)) on a
substantially full time basis for a period of at least one year, and such
services are performed under primary direction or control by the recipient
employer. Contributions or benefits provided a Leased Employee by the leasing
organization which are attributable to services performed for the recipient
employer shall be treated as provided by the recipient employer. A Leased
Employee shall not be considered an Employee of the recipient:
(a) if such employee is covered by a money purchase pension
plan providing:
(1) a nonintegrated employer contribution rate of at least 10%
of compensation, as defined in Code Section 415(c)(3),
but including amounts which are contributed by the Employer
pursuant to a salary reduction agreement and which are not
includible in the gross income of the Participant under Code
Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or
457(b), and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer
contributions.
(2) immediate participation; and
(3) full and immediate vesting; and
(b) if Leased Employees do not constitute more than 20% of
the recipient's non-highly compensated work force.
1.37 "Non-Elective Contribution" means the Employer contributions to the
Plan excluding, however, contributions made pursuant to the Participant's
deferral election provided for in Section 4.2, matching contributions or
nonelective contributions (which are used to satisfy the safe harbor methods
permitted by Code Sections 401(k)(12) and 401(m)(11)) made pursuant to Section
4.1(b) and any Qualified NonElective Contribution used in the "Actual Deferral
Percentage" tests.
1.38 "Non-Highly Compensated Participant" means, for Plan Years beginning
after December 31, 1996, any Participant who is not a Highly Compensated
Employee. However, for purposes of Section 4.5 and Section 4.7, if the prior
year testing method is used, a Non-Highly Compensated Participant shall be
determined using the definition of Highly Compensated Employee in effect for the
preceding Plan Year.
1.39 "Non-Key Employee" means any Employee or former Employee (and his
Beneficiaries) who is not a Key Employee.
1.40 "Normal Retirement Age" means the Participant's 65 birthday. A
Participant shall become fully Vested in his Participant's Account upon
attaining his Normal Retirement Age.
1.41 "Normal Retirement Date" means the first day of the month coinciding
with or next following the Participant's Normal Retirement Age.
<PAGE> 16
1.42 "1-Year Break in Service" means, for purposes of vesting, the
applicable computation period during which an Employee has not completed more
than 500 Hours of Service with the Employer. Further, solely for the purpose of
determining whether a Participant has incurred a 1-Year Break in Service, Hours
of Service shall be recognized for "authorized leaves of absence" and "maternity
and paternity leaves of absence." Years of Service and 1-Year Breaks in Service
shall be measured on the same computation period.
"Authorized leave of absence" means an unpaid, temporary cessation
from active employment with the Employer pursuant to an established
nondiscriminatory policy, whether occasioned by illness, military service, or
any other reason.
A "maternity or paternity leave of absence" means, for Plan Years
beginning after December 31, 1984, an absence from work for any
period by reason of the Employee's pregnancy, birth of the Employee's child,
placement of a child with the Employee in connection with the adoption of such
child, or any absence for the purpose of caring for such child for a period
immediately following such birth or placement. For this purpose, Hours of
Service shall be credited for the computation period in which the absence from
work begins, only if credit therefore is necessary to prevent the Employee from
incurring a 1-Year Break in Service, or, in any other case, in the immediately
following computation period. The Hours of Service credited for a "maternity or
paternity leave of absence" shall be those which would normally have been
credited but for such absence, or, in any case in which the Administrator is
unable to determine such hours normally credited, eight (8) Hours of Service per
day. The total Hours of Service required to be credited for a "maternity or
paternity leave of absence" shall not exceed 501.
1.43 "Other Investments Account" means the account of a Participant which
is credited with his share of the net gain (or loss) of the Plan, Forfeitures
and Employer contributions in other than Company Stock and which is debited with
payments made to pay for Company Stock.
A separate accounting shall be maintained with respect to that
portion of the Other Investments Account attributable to Elective Contributions
and Non-Elective Contributions.
1.44 "Participant" means any Eligible Employee who participates in the
Plan and has not for any reason become ineligible to participate further in the
Plan.
1.45 "Participant Direction Procedures" means such instructions,
guidelines or policies, the terms of which are incorporated herein, as shall be
established pursuant to Section 4.12 and observed by the Administrator and
applied to Participants who have Participant Directed Accounts.
1.46 "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 Non-Elective Contributions.
A separate accounting shall be maintained with respect to that
portion of the Participant's Account attributable to Employer matching
contributions and nonelective contributions made pursuant to Section 4.1(b),
Employer matching contributions made pursuant to Section 4.1(c), Employer
discretionary contributions made pursuant to Section 4.1(e) and any Employer
Qualified Non-Elective Contributions.
<PAGE> 17
1.47 "Participant's Combined Account" means the total aggregate amount of
each Participant's Elective Account and Participant's Account.
1.48 "Participant's Directed Account" means that portion of a
Participant's interest in the Plan with respect to which the Participant has
directed the investment in accordance with the Participant Direction Procedure.
1.49 "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 Elective
Contributions used to satisfy the "Actual Deferral Percentage" tests. A separate
accounting shall be maintained with respect to that portion of the Participant's
Elective Account attributable to such Elective Contributions pursuant to Section
4.2, Employer matching contributions and nonelective contributions made pursuant
to Section 4.1(b) and any Employer Qualified Non-Elective Contributions.
1.50 "Plan" means this instrument, including all amendments thereto.
1.51 "Plan Year" means the Plan's accounting year of twelve (12) months
commencing on January 1 of each year and ending the following December 31.
1.52 "Qualified Non-Elective Contribution" means any Employer
contributions made pursuant to Section 4.1(d) and Section 4.6(b) and Section
4.8(f). Such contributions shall be considered an Elective Contribution for the
purposes of the Plan and may be used to satisfy the "Actual Deferral Percentage"
tests or the "Actual Contribution Percentage" tests.
1.53 "Regulation" means the Income Tax Regulations as promulgated by the
Secretary of the Treasury or his delegate, and as amended from time to time.
1.54 "Retired Participant" means a person who has been a Participant, but
who has become entitled to retirement benefits under the Plan.
1.55 "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 7.1).
1.56 "Super Top Heavy Plan" means a plan described in Section 9.2(b).
1.57 "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.
1.58 "Top Heavy Plan" means a plan described in Section 9.2(a).
1.59 "Top Heavy Plan Year" means a Plan Year during which the Plan is a
Top Heavy Plan.
<PAGE> 18
1.60 "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 1.28 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 received no earned
income (within the meaning of Code Section 911(d)(2)) from the Employer
constituting United States source income within the meaning of Code Section 861
(a)(3) shall not be treated as Employees. Additionally, for the purpose of
determining the number of active Employees in any year, the following additional
Employees shall also be excluded; however, such Employees shall still be
considered for the purpose of identifying the particular Employees in the Top
Paid Group:
(a) Employees with less than six (6) months of service;
(b) Employees who normally work less than 17 1/2 hours per
week;
(c) Employees who normally work less than six (6) months
during a year; and
(d) Employees who have not yet attained age 21.
In addition, if 90 percent or more of the Employees of the Employer
are covered under agreements the Secretary of Labor finds to be collective
bargaining agreements between Employee representatives and the Employer, and the
Plan covers only Employees who are not covered under such agreements, then
Employees covered by such agreements shall be excluded from both the total
number of active Employees as well as from the identification of particular
Employees in the Top Paid Group.
The foregoing exclusions set forth in this Section shall be applied
on a uniform and consistent basis for all purposes for which the Code
Section 414(q) definition is applicable.
1.61 "Total and Permanent Disability" means a physical or mental condition
of a Participant resulting from bodily injury, disease, or mental disorder which
renders him incapable of continuing any gainful occupation and which condition
constitutes total disability under the federal Social Security Acts.
1.62 "Trustee" means the person or entity named as trustee herein or in
any separate trust forming a part of this Plan, and any successors.
1.63 "Trust Fund" means the assets of the Plan and Trust as the same shall
exist from time to time.
1.64 "Valuation Date" means the Anniversary Date and such other date or
dates deemed necessary by the Administrator. The Valuation Date may include any
day during the Plan Year that the Trustee, any transfer agent appointed by the
Trustee or the Employer and any stock exchange used by such agent are open for
business.
<PAGE> 19
1.65 "Vested" means the nonforfeitable portion of any account maintained
on behalf of a Participant.
1.66 "Year of Service" means the computation period of twelve (12)
consecutive months, herein set forth, during which an Employee has at least 1000
Hours of Service.
For vesting purposes, the computation periods shall be measured from
the date on which the Employee first performs an Hour of Service and
anniversaries thereof, excluding periods prior to the Effective Date of the
Plan.
The computation period shall be the Plan Year if not otherwise set
forth herein.
Notwithstanding the foregoing, for any short Plan Year, the
determination of whether an Employee has completed a Year of Service shall be
made in accordance with Department of Labor regulation 2530.203-2(c).
Years of Service with any Affiliated Employer shall be recognized.
ARTICLE II
ADMINISTRATION
2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) In addition to the general powers and responsibilities
otherwise provided for in this Plan, 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 ensure that the Plan is being operated for the exclusive benefit
of the Participants and their Beneficiaries in accordance with the
terms of the Plan, the Code, and the Act. The Employer may appoint
counsel, specialists, advisers, agents (including any nonfiduciary
agent) and other persons as the Employer deems necessary or
desirable in connection with the exercise of its fiduciary duties
under this Plan. The Employer may compensate such agents or advisers
from the assets of the Plan as fiduciary expenses (but not including
any business (settlor) expenses of the Employer), to the extent not
paid by the Employer.
(b) The Employer may, by written agreement or designation,
appoint at its option an Investment Manager (qualified under the
Investment Company Act of 1940 as amended), investment adviser, or
other agent to provide direction to the Trustee with respect to any
or all of the Plan assets. Such appointment shall be given by the
Employer in writing in a form acceptable to the Trustee and shall
specifically identify the Plan assets with respect to which the
Investment Manager or other agent shall have authority to direct the
investment.
(c) 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
<PAGE> 20
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.
(d) The Employer shall periodically review the performance of
any Fiduciary or other person to whom duties have been delegated or
allocated by it under the provisions of this Plan or pursuant to
procedures established hereunder. This requirement may be satisfied
by formal periodic review by the Employer or by a qualified person
specifically designated by the Employer, through day-to-day conduct
and evaluation, or through other appropriate ways.
2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall be the Administrator. The Employer may appoint
any person, including, but not limited to, the Employees of the Employer, to
perform the duties of the Administrator. Any person so appointed shall signify
his acceptance by filing written acceptance with the Employer. Upon the
resignation or removal of any individual performing the duties of the
Administrator, the Employer may designate a successor.
2.3 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.
2.4 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
<PAGE> 21
principles consistently applied and shall be consistent with the intent that the
Plan shall continue to be deemed a qualified plan under the terms of Code
Section 401(a), and shall comply with the terms of the Act and all
regulations issued pursuant thereto. The Administrator shall have all powers
necessary or appropriate to accomplish his duties under this Plan.
The Administrator shall be charged with the duties of the general
administration of the Plan, including, but not limited to, the following:
(a) the discretion to determine all questions relating to the
eligibility of Employees to participate or remain a Participant
hereunder and to receive benefits under the Plan;
(b) to compute, certify, and direct the Trustee with respect
to the amount and the kind of benefits to which any Participant
shall be entitled hereunder;
(c) to authorize and direct the Trustee with respect to all
nondiscretionary or otherwise directed disbursements from the Trust;
(d) to maintain all necessary records for the administration
of the Plan;
(e) to interpret the provisions of the Plan and to make and
publish such rules for regulation of the Plan as are consistent with
the terms hereof;
(f) to determine the size and type of any Contract to be
purchased from any insurer, and to designate the insurer from which
such Contract shall be purchased;
(g) to compute and certify to the Employer and to the
Trustee from time to time the sums of money necessary or desirable
to be contributed to the Plan;
(h) to consult with the Employer and the Trustee regarding the
short and long-term liquidity needs of the Plan in order that the
Trustee can exercise any investment discretion in a manner designed
to accomplish specific objectives;
(i) to prepare and implement a procedure to notify Eligible
Employees that they may elect to have a portion of their
Compensation deferred or paid to them in cash;
(j) to establish and communicate to Participants a procedure,
which includes at least three (3) investment options pursuant to
Regulations, for allowing each Participant to direct the Trustee as
to the investment of his Company Stock Account pursuant to Section
4.12;
(k) to assist any Participant regarding his rights, benefits,
or elections available under the Plan.
<PAGE> 22
2.5 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken and shall
keep all other books of account, records, policies, 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.
2.6 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the
Administrator, may appoint counsel, specialists, advisers, agents (including
nonfiduciary agents) and other persons as the Administrator or the Trustee deems
necessary or desirable in connection with the administration of this Plan,
including but not limited to agents and advisers to assist with the
administration and management of the Plan, and thereby to provide, among such
other duties as the Administrator may appoint, assistance with maintaining Plan
records and the providing of investment information to the Plan's investment
fiduciaries and to Plan Participants.
2.7 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, or any person or persons retained or
appointed by any Named Fiduciary incident to the exercise of their duties under
the Plan, including, but not limited to, fees of accountants, counsel,
Investment Managers, agents (including nonfiduciary agents) appointed for the
purpose of assisting the Administrator or the Trustee in carrying out the
instructions of Participants as to the directed investment of their accounts 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.
2.8 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing with the
Administrator. Written notice of the disposition of a claim shall be furnished
to the claimant within 90 days after the application is filed. In the event the
claim is denied, the reasons for the denial shall be specifically set forth in
the notice in language calculated to be understood by the claimant, pertinent
provisions of the Plan shall be cited, and, where appropriate, an explanation as
to how the claimant can perfect the claim will be provided. In addition, the
claimant shall be furnished with an explanation of the Plan's claims review
procedure.
2.9 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 2.8
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 2.8. 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 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
<PAGE> 23
cause a court reporter to attend the hearing and record the proceedings. In such
event, a complete written transcript of the proceedings shall be furnished to
both parties by the court reporter. The full expense of any such court reporter
and such transcripts shall be borne by the party causing the court reporter to
attend the hearing. A final decision as to the allowance of the claim shall be
made by the Administrator within 60 days of receipt of the appeal (unless there
has been an extension of 60 days due to special circumstances, provided the
delay and the special circumstances occasioning it are communicated to the
claimant within the 60 day period). Such communication shall be written in a
manner calculated to be understood by the claimant and shall include specific
reasons for the decision and specific references to the pertinent Plan
provisions on which the decision is based.
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
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.
For purposes of contributions made pursuant to Sections 4.1(b),
4.1(c), and 4.1(e), an Eligible Employee who has completed a Year of Service
shall be eligible to receive contributions as of the first day of the month
coinciding with or next following the date on which he satisfied such
requirements.
3.2 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee shall become a Participant effective as of the
first day of the month coinciding with or next following the date on which such
Employee met the eligibility requirements of Section 3.1, provided said Employee
was still employed as of such date (or if not employed on such date, as of the
date of rehire if a 1-Year Break in Service has not occurred).
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 would have otherwise previously become a
Participant.
3.3 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 2.9.
3.4 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.
<PAGE> 24
(b) In the event a Participant is no longer a member of an
eligible class of Employees and becomes ineligible to participate,
such Employee will participate immediately upon returning to an
eligible class of Employees.
3.5 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be included as a
Participant in the Plan is erroneously omitted and discovery of such omission is
not made until after a contribution by his Employer for the year has been made,
the Employer shall make a subsequent contribution with respect to the omitted
Employee in the amount which the said Employer would have contributed with
respect to him had he not been omitted. Such contribution shall be made
regardless of whether or not it is deductible in whole or in part in any taxable
year under applicable provisions of the Code.
3.6 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
(except for Deferred Compensation which shall be distributed to the ineligible
person) for the Plan Year in which the discovery is made.
3.7 ELECTION NOT TO PARTICIPATE
An Employee may, subject to the approval of the Employer, elect
voluntarily not to participate in the Plan. The election not to participate must
be communicated to the Employer, in writing, at least thirty (30) days before
the beginning of a Plan Year.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION
For each Plan Year, the Employer shall contribute to the Plan,
except as otherwise provided:
(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 Elective Contribution.
(b) Effective January 1, 2001, on behalf of each Participant,
at the election of the Employer, either (1), (2), (3) or (4) below:
<PAGE> 25
(1) Basic Matching Contributions: An amount equal to the
Participant's Deferred Compensation up to 3% of his
Compensation plus one-half of the Participant's Deferred
Compensation in excess of 3% of his Compensation (but not in
excess of 5%), which amount shall be deemed an Employer
Elective Contribution.
(2) Enhanced Matching Contribution: An amount, at any rate of
Deferred Compensation, equal to at least the aggregate amount
of matching contribution that would have been provided under
the Basic Matching Contribution formula. In addition, the rate
of matching contribution may not increase as a Participant's
rate of Deferred Compensation increases. The amount of any
Enhanced Matching Contribution shall be deemed an Employer
Elective Contribution.
(3) Nonelective Contribution: An amount equal to at least 3%
of the Participant's Compensation, which amount shall be
deemed an Employer Elective Contribution.
(4) A contribution to another plan maintained by the Employer,
which amount shall be deemed an Employer Elective
Contribution.
Contributions made to the Plan pursuant to this Section
4.1(b) are intended to comply with Sections 4.5(a) and 4.7(a)
pursuant to the safe harbor methods permitted by Code Sections
401(k)(12) and 401(m)(11). However, if matching contributions are
made to this Plan or any other plan maintained by the Employer, and
(i) such matching contributions are made with respect to Deferred
Compensation or voluntary Employee contributions that in the
aggregate exceed 6% of the Employee's Compensation, (ii) the rate of
matching contributions increases as the rate of Deferred
Compensation or voluntary Employee contributions increases, (iii) at
any rate of Deferred Compensation or voluntary Employee
contributions, the rate of matching contributions that would apply
with respect to any Highly Compensated Employee is greater than the
rate of matching contributions that would apply with respect to a
Non-Highly Compensated Participant and who has the same rate of
Deferred Compensation or voluntary Employee contributions, (iv) for
Plan Years beginning after December 31, 1999, any discretionary
matching contribution made to this Plan and any other plan
maintained by the Employer, in the aggregate, exceed 4% of the
Participant's Compensation, then such matching contributions in the
aggregate must satisfy the "Actual Contribution Percentage" test of
Section 4.7(a). In this regard, the Employer may elect to disregard,
with respect to all Eligible Employees, all matching contributions
with respect to a Participant's Deferred Compensation up to 6% of
each Participant's Compensation, or, for Plan Years beginning after
December 31, 1999, matching contributions up to 4% of each
Participant's Compensation. In applying the "Actual Contribution
Percentage" tests, match contributions or nonelective contributions
made pursuant to this Section 4.1(b) that satisfy the safe harbor
methods permitted by Code Section 401(k)(12) may not be treated as
matching contributions under Code 401(m)(3).
<PAGE> 26
The rules that apply for purposes of aggregating and
disaggregating cash or deferred arrangements and plans under Code
Section 401(k) and 401(m) also apply for purposes of Code Sections
401(k)(12) and 401(m)(11).
(c) On behalf of each Participant who is eligible to share in
matching contributions for the Plan Year, a matching contribution
equal to 100% of each such Participant's Deferred Compensation,
which amount shall be deemed an Employer Non-Elective Contribution.
Except, however, in applying the matching percentage
specified above, only salary reductions up to 3% of payroll period
Compensation shall be considered.
(d) On behalf of each Non-Highly Compensated Participant who
is eligible to share in the Qualified Non-Elective Contribution for
the Plan Year, a discretionary Qualified Non-Elective Contribution
equal to a uniform percentage of each eligible individual's
Compensation, the exact percentage, if any, to be determined each
year by the Employer. Any Employer Qualified Non-Elective
Contribution shall be deemed an Employer Elective Contribution.
Notwithstanding the above, a Qualified Non-Election
Contribution shall not be made for any Plan Year for which the
Employer elects to make a contribution pursuant to Section 4.1(b).
(e) A discretionary amount, which amount, if any, shall be
deemed an Employer Non-Elective Contribution.
(f) Additionally, to the extent necessary, the Employer shall
contribute to the Plan the amount necessary to provide the top heavy
minimum contribution. 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 from 1% to 20% of his
Compensation which would have been received in the Plan Year, but
for the deferral election. 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. For purposes of this Section, Compensation
shall be determined prior to any reductions made pursuant to Code
Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and
Employee contributions described in Code Section 414(h)(2) that are
treated as Employer contributions.
The amount by which 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.
<PAGE> 27
(b) The balance in each Participant's Elective Account shall
be fully Vested at all times and shall not be subject to Forfeiture
for any reason.
(c) Notwithstanding anything in the Plan to the contrary,
amounts held in the Participant's Elective Account may not be
distributable (including any offset of loans) earlier than:
(1) a Participant's separation from service, Total and
Permanent Disability, or death;
(2) a Participant's attainment of age 59 1/2;
(3) the termination of the Plan without the establishment or
existence of a "successor plan," as that term is described in
Regulation 1.401(k)-1(d)(3);
(4) the date of disposition by the Employer to an entity that
is not an Affiliated Employer of substantially all of the
assets (within the meaning of Code Section 409(d)(2))
used in a trade or business of such corporation if such
corporation continues to maintain this Plan after the
disposition with respect to a Participant who continues
employment with the corporation acquiring such assets;
(5) the date of disposition by the Employer or an Affiliated
Employer who maintains the Plan of its interest in a
subsidiary (within the meaning of Code Section 409(d)(3)) to
an entity which is not an Affiliated Employer but only with
respect to a Participant who continues employment with such
subsidiary; or
(6) the proven financial hardship of a Participant, subject
to the limitations of Section 7.11.
(d) For each Plan Year, a Participant's Deferred Compensation
made under this Plan and all other plans, contracts or arrangements
of the Employer maintaining this Plan shall not exceed, during any
taxable year of the Participant, the limitation imposed by Code
Section 402(g), as in effect at the beginning of such taxable
year. If such dollar limitation is exceeded, a Participant will be
deemed to have notified the Administrator of such excess amount
which shall be distributed in a manner consistent with Section
4.2(e). The dollar limitation shall be adjusted annually pursuant to
the method provided in Code Section 415(d) in accordance with
Regulations.
(e) If a Participant's Deferred Compensation under this Plan
together with any elective deferrals (as defined in Regulation
1.402(g)-1(b)) under another qualified cash or deferred arrangement
(as defined in Code Section 401(k)), a simplified employee pension
(as defined in Code Section 408(k)), a salary reduction arrangement
(within the meaning of Code Section 3121(a) (5)(D)), a deferred
compensation plan under Code Section 457(b), or a trust described in
Code Section 501(c)(18) cumulatively exceed the limitation imposed
by Code
<PAGE> 28
Section 402(g) (as adjusted annually in accordance with the
method provided in Code Section 415(d) pursuant to
Regulations) for such Participant's taxable year, the Participant
may, not later than March 1 following the close of the
Participant's taxable year, notify the Administrator in writing of
such excess and request that his Deferred Compensation under this
Plan be reduced by an amount specified by the Participant. In such
event, the Administrator may direct the Trustee to distribute such
excess amount (and any Income allocable to such excess amount) to
the Participant not later than the first April 15th following
the close of the Participant's taxable year. Any distribution of
less than the entire amount of Excess Deferred Compensation and
Income shall be treated as a pro rata distribution of Excess
Deferred Compensation and Income. The amount distributed shall not
exceed the Participant's Deferred Compensation under the Plan for
the taxable year (and any Income allocable to such excess amount).
Any distribution on or before the last day of the Participant's
taxable year must satisfy each of the following conditions:
(1) the distribution must be made after the date on which the
Plan received the Excess Deferred Compensation;
(2) the Participant shall designate the distribution as Excess
Deferred Compensation; and
(3) the Plan must designate the distribution as a distribution
of Excess Deferred Compensation.
Any distribution made pursuant to this Section 4.2(e)
shall be made first from unmatched Deferred Compensation and,
thereafter, from Deferred Compensation which is matched. Matching
contributions which relate to such Deferred Compensation shall be
forfeited.
(f) Notwithstanding Section 4.2(e) 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.
(g) 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.
(h) Employer Elective Contributions made pursuant to this
Section may be segregated into a separate account for each
Participant in a federally insured savings account, certificate of
deposit in a bank or savings and loan association, money market
certificate, or other short-term debt security acceptable to the
Trustee until such time as the allocations pursuant to Section 4.4
have been made.
(i) The Employer and the Administrator shall implement the
salary reduction elections provided for herein in accordance with
the following:
<PAGE> 29
(1) A 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 3.2. If the
Participant fails to make an initial salary deferral election
within such time, then such Participant may thereafter make an
election in accordance with the rules governing modifications.
The Participant shall make such an election by entering into a
written salary reduction agreement with the Employer and
filing such agreement with the Administrator. Such election
shall initially be effective beginning with the pay period
following the acceptance of the salary reduction agreement by
the Administrator, shall not have retroactive effect and shall
remain in force until revoked.
(2) A Participant may modify a prior election at any time
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. Any modification shall not
have retroactive effect and shall remain in force until
revoked.
(3) A Participant may elect to prospectively revoke his salary
reduction agreement in its entirety at any time during the
Plan Year by providing the Administrator with thirty (30) days
written notice of such revocation (or upon such shorter notice
period as may be acceptable to the Administrator). Such
revocation shall become effective as of the beginning of the
first pay period coincident with or next following the
expiration of the notice period. Furthermore, the termination
of the Participant's employment, or the cessation of
participation for any reason, shall be deemed to revoke any
salary reduction agreement then in effect, effective
immediately following the close of the pay period within which
such termination or cessation occurs.
(4) If the Employer elects to make a contribution pursuant to
Section 4.1(b), the Employer, at least 30 days, but not more
than 90 days, before the beginning of the Plan Year, will
provide each eligible Employee a comprehensive notice of the
Employee's rights and obligations under the Plan, written in a
manner calculated to be understood by the average Employee. If
an Employee becomes eligible after the 90th day before the
beginning of the Plan Year and does not receive the notice for
that reason, the notice must be provided no more than 90 days
before the Employee becomes eligible but not later than the
date the Employee becomes eligible. In addition to any other
election periods provided under this Section 4.2, each
eligible Employee may make or modify a salary reduction
election during the 30-day period immediately following
receipt of the notice described above.
<PAGE> 30
4.3 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION
Employer contributions will be paid in cash, Company Stock or other
property as the Employer may from time to time determine. Company Stock and
other property will be valued at their then fair market value. The Employer
shall generally pay to the Trustee its contribution to the Plan for each Plan
Year, within the time prescribed by law, including extensions of time, for the
filing of the Employer federal income tax return for the Fiscal Year.
However, Employer Elective Contributions accumulated through payroll
deductions shall be paid to the Trustee as of the earliest date on which such
contributions can reasonably be segregated from the Employer general assets, but
in any event within ninety (90) days from the date on which such amounts would
otherwise have been payable to the Participant in cash. The provisions of
Department of Labor regulations 2510.3-102 are incorporated herein by reference.
Furthermore, any additional Employer contributions which are allocable to the
Participant's Elective Account for a Plan Year shall be paid to the Plan no
later than the twelve-month period immediately following the close of such Plan
Year.
4.4 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and maintain an account
in the name of each Participant to which the Administrator shall
credit as of each Anniversary Date all amounts allocated to each
such Participant as set forth herein.
(1) With respect to the Employer Elective Contribution made
pursuant to Section 4.1(a), to each Participant's Elective
Account in an amount equal to each such Participant's Deferred
Compensation for the year.
(2) With respect to the Employer Elective Contribution made
pursuant to Section 4.1(b), to each Participant's Elective
Account when used to satisfy the "Actual Deferral Percentage"
tests, otherwise to each Participant's Account.
(3) With respect to the Employer Non-Elective Contribution
made pursuant to Section 4.1(c), to each Participant's Account
in accordance with Section 4.1(c).
Any Participant who satisfies the requirements to receive
Employer matching contributions and who is actively employed
during the Plan Year shall be eligible to share in the
matching contribution for the Plan Year.
(4) With respect to the Employer Qualified Non-Elective
Contribution made pursuant to Section 4.1(d), to each
Participant's Elective Account when used to satisfy the
"Actual Deferral Percentage" tests or Participant's Account in
accordance with Section 4.1(d).
Any Non-Highly Compensated Participant actively employed
during the Plan Year shall be eligible to share in the
Qualified Non-Elective Contribution for the Plan Year.
<PAGE> 31
(5) With respect to the Employer Non-Elective Contribution
made pursuant to Section 4.1(e), to each Participant's Account
in the same proportion that each such Participant's
Compensation for the year (or quarter, if the Employer elects
to make contributions on a quarterly basis) bears to the total
Compensation of all Participants for such year (or quarter, if
the Employer elects to make contributions on a quarterly
basis).
Any Participant who satisfies the requirements to receive
Employer discretionary contributions and who is actively
employed during the Plan Year shall be eligible to share in
the discretionary contributions for the year.
(b) The Company Stock Account of each Participant shall be
credited as of each Anniversary Date with Forfeitures of Company
Stock and his allocable share of Company Stock (including fractional
shares) purchased and paid for by the Plan or contributed in kind by
the Employer. Dividends on Company Stock held in his Company Stock
Account shall be credited to his Company Stock Account when paid.
(c) As of each Valuation Date, before the current valuation
period allocation of Employer contributions and Forfeitures, any
earnings or losses (net appreciation or net depreciation) of the
Trust Fund shall be allocated in the same proportion that each
Participant's and Former Participant's nonsegregated accounts (other
than each Participant's Company Stock Account) bear to the total of
all Participants' and Former Participants' nonsegregated accounts
(other than each Participant's Company Stock Account) as of such
date. Earnings or losses with respect to a Participant's Directed
Account shall be allocated in accordance with Section 4.12.
Participants' transfers from other qualified plans
deposited in the general Trust Fund shall share in any earnings and
losses (net appreciation or net depreciation) of the Trust Fund in
the same manner provided above. Each segregated account maintained
on behalf of a Participant shall be credited or charged with its
separate earnings and losses.
(d) 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 7.4(g)(2).
The remaining Forfeitures, if any, shall be used at the option of
the Employer to (i) reduce administrative expenses, (ii) be
allocated to all eligible Participants deemed to be employed as of
the last day of the Plan Year, or (iii) be used to reduce the
contribution of the Employer hereunder for the Plan Year in which
such Forfeitures occur.
Provided, however, that in the event the allocation of
Forfeitures provided herein shall cause the "annual addition" (as
defined in Section 4.9) to any Participant's Account to exceed the
amount allowable by the Code, the excess shall be reallocated in
accordance with Section 4.10.
<PAGE> 32
(e) For any Top Heavy Plan Year, Employees not otherwise
eligible to share in the allocation of contributions and Forfeitures
as provided above, shall receive the minimum allocation provided for
in Section 4.4(g) if eligible pursuant to the provisions of Section
4.4(i).
(f) Notwithstanding the foregoing, Participants who are not
actively employed on the last day of the Plan Year due to Retirement
(Early, Normal or Late), Total and Permanent Disability or death
shall share in the allocation of contributions and Forfeitures for
that Plan Year.
(g) Minimum Allocations Required for Top Heavy Plan Years:
Notwithstanding the foregoing, for any Top Heavy Plan Year, the sum
of the Employer contributions and Forfeitures allocated to the
Participant's Combined Account of each Employee shall be equal to at
least three percent (3%) of such Employee's "415 Compensation"
(reduced by contributions and forfeitures, if any, allocated to each
Employee in any defined contribution plan included with this plan in
a Required Aggregation Group). However, if (1) the sum of the
Employer contributions and Forfeitures allocated to the
Participant's Combined Account of each Key Employee for such Top
Heavy Plan Year is less than three percent (3%) of each Key
Employee's "415 Compensation" and (2) this Plan is not required to
be included in an Aggregation Group to enable a defined benefit plan
to meet the requirements of Code Section 401(a)(4) or 410, the sum
of the Employer contributions and Forfeitures allocated to the
Participant's Combined Account of each Employee shall be equal to
the largest percentage allocated to the Participant's Combined
Account of any Key Employee. However, in determining whether a
Non-Key Employee has received the required minimum allocation, such
Non-Key Employee's Deferred Compensation and matching contributions
needed to satisfy the "Actual Deferral Percentage" tests pursuant to
Section 4.5(a) or the "Actual Contribution Percentage" tests
pursuant to Section 4.7(a) shall not be taken into account.
However, no such minimum allocation shall be required in
this Plan for any Employee who participates in another defined
contribution plan subject to Code Section 412 included with
this Plan in a Required Aggregation Group.
(h) For purposes of the minimum allocations set forth above,
the percentage allocated to the Participant's Combined Account of
any Key Employee shall be equal to the ratio of the sum of the
Employer contributions and Forfeitures allocated on behalf of such
Key Employee divided by the "415 Compensation" for such Key
Employee.
(i) For any Top Heavy Plan Year, the minimum allocations set
forth above shall be allocated to the Participant's Combined Account
of all Employees who are Participants and who are employed by the
Employer on the last day of the Plan Year, including Employees who
have (1) failed to complete a Year of Service; and (2) declined to
make mandatory contributions (if required) or, in the case of a cash
or deferred arrangement, elective contributions to the Plan.
<PAGE> 33
(j) For the purposes of this Section, "415 Compensation" shall
be limited to $150,000. Such amount shall be adjusted for increases
in the cost of living in accordance with Code Section 401(a)(17),
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. For any short Plan Year the "415
Compensation" limit shall be an amount equal to the "415
Compensation" limit for the calendar year in which the Plan Year
begins multiplied by the ratio obtained by dividing the number of
full months in the short Plan Year by twelve (12).
(k) Notwithstanding anything herein to the contrary,
Participants who terminated employment for any reason during the
Plan Year shall share in the salary reduction contributions made by
the Employer for the year of termination without regard to the Hours
of Service credited.
(l) If a Former Participant is reemployed after five (5)
consecutive 1-Year Breaks in Service, then separate accounts shall
be maintained as follows:
(1) one account for nonforfeitable benefits attributable to
pre-break service; and
(2) one account representing his status in the Plan
attributable to post-break service.
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS
(a) Maximum Annual Allocation: For each Plan Year beginning
after December 31, 1996, the annual allocation derived from Employer
Elective Contributions to a Highly Compensated 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 (for the preceding Plan Year if the prior
year testing method is used to calculate the "Actual Deferral
Percentage" for 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
(for the preceding Plan Year if the prior year testing method
is used to calculate 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 (for the preceding Plan Year if
the prior year testing method is used to calculate 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.
<PAGE> 34
However, in order to prevent the multiple use of the
alternative method described in (2) above and in Code
Section 401(m)(9)(A), any Highly Compensated
Participant eligible to make elective deferrals pursuant to
Section 4.2 and to make Employee contributions or to receive
matching contributions under this Plan or under any other plan
maintained by the Employer or an Affiliated Employer shall
have a combination of his Elective Contributions and Employer
matching contributions 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. 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.
Notwithstanding the above, if the prior year testing
method is used to calculate the "Actual Deferral Percentage" for the
Non-Highly Compensated Participant group for the first Plan Year of
this amendment and restatement, the "Actual Deferral Percentage" for
the Non-Highly Compensated Participant group for the preceding Plan
Year shall be calculated pursuant to the provisions of the Plan then
in effect.
(c) For the purposes of Sections 4.5(a) and 4.6, a Highly
Compensated Participant and a Non-Highly Compensated Participant
shall include any Employee eligible to make a deferral election
pursuant to Section 4.2, whether or not such deferral election was
made or suspended pursuant to Section 4.2.
Notwithstanding the above, if the prior year testing
method is used to calculate the "Actual Deferral Percentage" for the
Non-Highly Compensated Participant group for the first Plan Year of
this amendment and restatement, for purposes of Section 4.5(a) and
4.6, a Non-Highly Compensated Participant shall include any such
Employee eligible to make a deferral election, whether or not such
deferral election was made or suspended, pursuant to the provisions
of the Plan in effect for the preceding Plan Year.
(d) If the Plan uses the prior year testing method, the
"Actual Deferral Percentage" for the Non-Highly Compensated
Participant group is determined without regard to changes in the
<PAGE> 35
group of Non-Highly Compensated Participants who are eligible under
the Plan in the testing year. However, if the Plan results from, or
is otherwise affected by, a "Plan Coverage Change" that becomes
effective during the testing year, then the "Actual Deferral
Percentage" for the Non-Highly Compensated Participant group for the
prior year is the "Weighted Average Of The Actual Deferral
Percentages For The Prior Year Subgroups." Notwithstanding the
above, if ninety (90) percent or more of the total number of
Non-Highly Compensated Participants from all "Prior Year Subgroups"
are from a single "Prior Year Subgroup," then in determining the
"Actual Deferral Percentage" for the Non-Highly Compensated
Participants for the prior year, the Employer may elect to use the
"Actual Deferral Percentage" for Non-Highly Compensated Participants
for the prior year under which that single "Prior Year Subgroup" was
eligible, in lieu of using the weighted averages. For purposes of
this Section the following definitions shall apply:
(1) "Plan Coverage Change" means a change in the group or
groups of eligible Participants on account of (i) the
establishment or amendment of a plan, (ii) a plan merger,
consolidation, or spinoff under Code Section 414(l), (iii) a
change in the way plans within the meaning of Code Section
414(l) are combined or separated for purposes of Regulation
1.401(k)-1(g)(11), or (iv) a combination of any of the
foregoing.
(2) "Prior Year Subgroup" means all Non-Highly Compensated
Participants for the prior year who, in the prior year, were
eligible Participants under a specific Code Section 401(k)
plan maintained by the Employer and who would have been
eligible Participants in the prior year under the plan tested
if the plan coverage change had first been effective as of the
first day of the prior year instead of first being effective
during the testing year.
(3) "Weighted Average Of The Actual Deferral Percentages For
The Prior Year Subgroups" means the sum, for all prior year
subgroups, of the "Adjusted Actual Deferral Percentages."
(4) "Adjusted Actual Deferral Percentage" with respect to a
prior year subgroup means the Actual Deferral Percentage for
Non-Highly Compensated Participants for the prior year of the
specific plan under which the members of the prior year
subgroup were eligible Participants, multiplied by a fraction,
the numerator of which is the number of Non-Highly Compensated
Participants in the prior year subgroup and the denominator of
which is the total number of Non-Highly Compensated
Participants in all prior year subgroups.
(e) For purposes of this Section and Code Sections 401(a)(4),
410(b) and 401(k), this Plan may not be combined with any other
plan.
(f) For the purpose of this Section, when calculating the
"Actual Deferral Percentage" for the Non-Highly Compensated
Participant group, the prior year testing method shall be used. Any
change from the current year testing method to the prior year
testing method shall be made pursuant to Internal Revenue Service
Notice 98-1, Section VII (or superseding guidance), the provisions
of which are incorporated herein by reference.
<PAGE> 36
(g) Notwithstanding the above, contributions made pursuant to
Section 4.1(b) are intended to comply with this Section 4.5
pursuant to the alternative methods permitted by Code Section
401(k)(12).
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
In the event (or if it is anticipated) that the initial allocations
of the Employer Elective Contributions made pursuant to Section 4.4 do (or
might) not satisfy one of the tests set forth in Section 4.5(a) for Plan Years
beginning after December 31, 1996, the Administrator shall adjust Excess
Contributions pursuant to the options set forth below:
(a) On or before the fifteenth day of the third month
following the end of each Plan Year, the Highly Compensated
Participant having the largest amount of Elective Contributions
shall have a portion of his Elective Contributions distributed to
him until the total amount of Excess Contributions has been
distributed, or until the amount of his Elective Contributions
equals the Elective Contributions of the Highly Compensated
Participant having the second largest amount of Elective
Contributions. This process shall continue until the total amount of
Excess Contributions has been distributed. 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 pursuant to Section 4.2(e) by any Excess
Deferred Compensation previously distributed to such affected Highly
Compensated Participant for his taxable year ending with or within
such Plan Year.
(1) With respect to the distribution of Excess Contributions
pursuant to (a) above, such distribution:
(i) may be postponed but not later than the close of
the Plan Year following the Plan Year to which they are
allocable;
(ii) shall be adjusted for Income; and
(iii) 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) Matching contributions which relate to Excess
Contributions shall be forfeited unless the related matching
contribution is distributed as an Excess Aggregate
Contribution pursuant to Section 4.8.
<PAGE> 37
(b) Within twelve (12) months after the end of the Plan Year,
the Employer may make a special Qualified Non-Elective Contribution
on behalf of Non-Highly Compensated Participants electing salary
reductions pursuant to Section 4.2 in an amount sufficient to
satisfy (or to prevent an anticipated failure of) one of the tests
set forth in Section 4.5(a). Such contribution shall be allocated to
the Participant's Elective Account of each Non-Highly Compensated
Participant electing salary reductions pursuant to Section 4.2 in
the same proportion that each such Non-Highly Compensated
Participant's Deferred Compensation for the year bears to the total
Deferred Compensation of all such Non-Highly Compensated
Participants.
However, if the prior year testing method is used, the special
Qualified Non-Elective Contribution shall be allocated in the prior
Plan Year to the Participant's Elective Account on behalf of each
Non-Highly Compensated Participant who was employed by the Employer
on the last day of the prior Plan Year in the same proportion that
each such Non-Highly Compensated Participant's Deferred Compensation
for the prior Plan Year bears to the total Deferred Compensation of
all such Non-Highly Compensated Participants for the prior Plan
Year. Such contribution shall be made by the Employer prior to the
end of the current Plan Year.
Notwithstanding the above, for Plan Years beginning after
December 31, 1998, if the testing method changes from the current
year testing method to the prior year testing method, then for
purposes of preventing the double counting of Qualified Non-Elective
Contributions for the first testing year for which the change is
effective, any special Qualified Non-Elective Contribution on behalf
of Non-Highly Compensated Participants used to satisfy the "Actual
Deferral Percentage" or "Actual Contribution Percentage" test under
the current year testing method for the prior year testing year
shall be disregarded.
(c) If during a Plan Year the projected aggregate amount of
Elective Contributions to be allocated to all Highly Compensated
Participants under this Plan would, by virtue of the tests set forth
in Section 4.5(a), cause the Plan to fail such tests, then the
Administrator may automatically reduce proportionately or in the
order provided in Section 4.6(a) each affected Highly Compensated
Participant's deferral election made pursuant to Section 4.2 by an
amount necessary to satisfy one of the tests set forth in Section
4.5(a).
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) The "Actual Contribution Percentage" for Plan Years
beginning after December 31, 1996 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 (for the preceding Plan Year if
the prior year testing method is used to calculate the "Actual
Deferral Percentage" for the Non-Highly Compensated
Participant group); or
<PAGE> 38
(2) the lesser of 200 percent of such percentage for the
Non-Highly Compensated Participant group (for the preceding
Plan Year if the prior year testing method is used to
calculate the "Actual Deferral Percentage" for the Non-Highly
Compensated Participant group), or such percentage for the
Non-Highly Compensated Participant group (for the preceding
Plan Year if the prior year testing method is used to
calculate the "Actual Deferral Percentage" for the Non-Highly
Compensated Participant group) plus 2 percentage points.
However, to prevent the multiple use of the alternative method
described in this paragraph and Code Section 401(m)(9)(A), any
Highly Compensated Participant eligible to make elective
deferrals pursuant to Section 4.2 or any other cash or
deferred arrangement maintained by the Employer or an
Affiliated Employer and to make Employee contributions or to
receive matching contributions under this Plan or under any
plan maintained by the Employer or an Affiliated Employer
shall have a combination of his Elective Contributions and
Employer matching contributions reduced pursuant to Regulation
1.401(m)-2 and Section 4.8(a). The provisions of Code Section
401(m) and Regulations 1.401(m)-1(b) and 1.401(m)-2 are
incorporated herein by reference.
(b) For the purposes of this Section and Section 4.8,
"Actual Contribution Percentage" for a Plan Year means, with respect
to the Highly Compensated Participant group and Non-Highly
Compensated Participant group (for the preceding Plan Year if the
prior year testing method is used to calculate the "Actual Deferral
Percentage" for the Non-Highly Compensated Participant group), the
average of the ratios (calculated separately for each Participant
in each group rounded to the nearest one-hundredth of one percent)
of:
(1) the sum of Employer matching contributions pursuant to
Section 4.1(b) (to the extent such matching contributions are
not used to satisfy the safe harbor methods permitted by Code
Sections 401(k)(12) and 401(m)(11)) and Employer matching
contributions made pursuant to Section 4.1(c) on behalf of
each such Participant for such Plan Year; to
(2) the Participant's "414(s) Compensation" for such Plan
Year.
Notwithstanding the above, if the prior year testing
method is used to calculate the "Actual Contribution Percentage" for
the Non-Highly Compensated Participant group for the first Plan Year
of this amendment and restatement, for purposes of Section 4.7(a),
the "Actual Contribution Percentage" for the Non-Highly Compensated
Participant group for the preceding Plan Year shall be determined
pursuant to the provisions of the Plan then in effect.
(c) For purposes of determining the "Actual Contribution
Percentage", 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) (to the extent
such matching contributions are not used to satisfy the safe harbor
methods permitted by Code
<PAGE> 39
Sections 401(k)(12) and 401(m)(11)) and Employer matching
contributions pursuant to Section 4.1(c) allocated to their
accounts, nonelective contributions (as described in Code Section
401(k)(12)(C)) (to the extent such nonelective contributions are not
used to satisfy the safe harbor methods permitted by Code Sections
401(k)(12) and 401(m)), elective deferrals (as defined in Regulation
1.402(g)-1(b)) and qualified nonelective contributions (as defined
in Code Section 401(m)(4)(C)) contributed to any plan maintained by
the Employer. Such nonelective contributions, elective deferrals and
qualified non-elective contributions shall be treated as Employer
matching contributions subject to Regulation 1.401(m)-1(b)(5) which
is incorporated herein by reference. However, the Plan Year must be
the same as the plan year of the plan to which the non-elective
contributions, elective deferrals and the qualified non-elective
contributions are made.
(d) For purposes of this Section and Code Sections 401(a)(4),
410(b) and 401(m), this Plan may not be combined with any other
plan.
(e) For purposes of Sections 4.7(a) and 4.8, a Highly
Compensated Participant and Non-Highly Compensated Participant shall
include any Employee eligible to have Employer matching
contributions (whether or not a deferral election was made or
suspended) allocated to his account for the Plan Year.
Notwithstanding the above, if the prior year testing
method is used to calculate the "Actual Contribution Percentage" for
the Non-Highly Compensated Participant group for the first Plan Year
of this amendment and restatement, for the purposes of Section
4.7(a), a Non-Highly Compensated Participant shall include any such
Employee eligible to have Employer matching contributions (whether
or not a deferral election was made or suspended) allocated to his
account for the preceding Plan Year pursuant to the provisions of
the Plan then in effect.
(f) If the Plan uses the prior year testing method, the
"Actual Contribution Percentage" for the Non-Highly Compensated
Participant group is determined without regard to changes in the
group of Non-Highly Compensated Participants who are eligible under
the Plan in the testing year. However, if the Plan results from, or
is otherwise affected by, a "Plan Coverage Change" that becomes
effective during the testing year, then the "Actual Contribution
Percentage" for the Non-Highly Compensated Participant group for the
prior year is the "Weighted Average Of The Actual Contribution
Percentages For The Prior Year Subgroups." Notwithstanding the
above, if ninety (90) percent or more of the total number of
Non-Highly Compensated Participants from all "Prior Year Subgroups"
are from a single "Prior Year Subgroup," then in determining the
"Actual Contribution Percentage" for the Non-Highly Compensated
Participants for the prior year, the Employer may elect to use the
"Actual Contribution Percentage" for Non-Highly Compensated
Participants for the prior year under which that single "Prior Year
Subgroup" was eligible, in lieu of using the weighted averages. For
purposes of this Section the following definitions shall apply:
<PAGE> 40
(1) "Plan Coverage Change" means a change in the group
or groups of eligible Participants on account of (i) the
establishment or amendment of a plan, (ii) a plan
merger, consolidation, or spinoff under Code Section
414(l), (iii) a change in the way plans within the
meaning of Code Section 414(l) are combined or separated
for purposes of Regulation 1.401(k)-1(g)(11), or (iv) a
combination of any of the foregoing.
(2) "Prior Year Subgroup" means all Non-Highly
Compensated Participants for the prior year who, in the
prior year, were eligible Participants under a specific
Code Section 401(m) plan maintained by the Employer and
who would have been eligible Participants in the prior
year under the plan tested if the plan coverage change
had first been effective as of the first day of the
prior year instead of first being effective during the
testing year.
(3) "Weighted Average Of The Actual Contribution
Percentages For The Prior Year Subgroups" means the sum,
for all prior year subgroups, of the "Adjusted Actual
Contribution Percentages."
(g) For the purpose of this Section, when calculating the
"Actual Contribution Percentage" for the Non-Highly Compensated
Participant group, the prior year testing method shall be used. Any
change from the current year testing method to the prior year
testing method shall be made pursuant to Internal Revenue Service
Notice 98-1, Section VII (or superseding guidance), the provisions
of which are incorporated herein by reference.
(h) Notwithstanding the above, contributions made pursuant to
Section 4.1(b) are intended to comply with this Section 4.4 pursuant
to the alternative methods permitted by Code Section 401(m)(11).
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event (or if it is anticipated) that, for Plan
Years beginning after December 31, 1996, the "Actual Contribution
Percentage" for the Highly Compensated Participant group exceeds (or
might exceed) the "Actual Contribution Percentage" for the
Non-Highly Compensated Participant group pursuant to Section 4.7(a),
the Administrator (on or before the fifteenth day of the third month
following the end of the Plan Year, but in no event later than the
close of the following Plan Year) shall direct the Trustee to
distribute to the Highly Compensated Participant having the largest
amount of contributions determined pursuant to Section 4.7(b)(1),
his Vested portion of such contributions (and Income allocable to
such contributions) and, if forfeitable, forfeit such non-Vested
Excess Aggregate Contributions attributable to Employer matching
contributions (and Income allocable to such forfeitures) until the
total amount of Excess Aggregate Contributions has been distributed,
or until his remaining amount equals the amount of contributions
determined pursuant to Section 4.7(b)(1) of the Highly Compensated
Participant having the second largest amount of contributions. This
process shall continue until the total amount of Excess Aggregate
Contributions has been distributed.
<PAGE> 41
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 7.5(k).
(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, including forfeited
matching contributions, shall be treated as Employer contributions
for purposes of Code Sections 404 and 415 even if distributed from
the Plan.
Forfeited matching contributions that are reallocated to
Participants' Accounts for the Plan Year in which the forfeiture
occurs shall be treated as an "annual addition" pursuant to Section
4.9(b) for the Participants to whose Accounts they are reallocated
and for the Participants from whose Accounts they are forfeited.
(d) 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.
(e) If during a Plan Year the projected aggregate amount of
Employer matching contributions to be allocated to all Highly
Compensated Participants under this Plan would, by virtue of the
tests set forth in Section 4.7(a), cause the Plan to fail such
tests, then the Administrator may automatically reduce
proportionately or in the order provided in Section 4.8(a) each
affected Highly Compensated Participant's projected share of such
contributions by an amount necessary to satisfy one of the tests set
forth in Section 4.7(a).
(f) 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 (or to prevent an
anticipated failure of) one of the tests set forth in Section
4.7(a). Such contribution shall be allocated to the Participant's
Account of Non-Highly Compensated Participant in the same proportion
that each Non-Highly Compensated Participant's Compensation for the
Plan Year bears to the total Compensation of all Non-Highly
Compensated Participants for the Plan Year. A separate accounting of
any special Qualified Non-Elective Contribution shall be maintained
in the Participant's Account.
<PAGE> 42
However, if the prior year testing method is used, the
special Qualified Non-Elective Contribution shall be allocated in
the prior Plan Year to the Participant's Account on behalf of each
Non-Highly Compensated Participant who was employed by the Employer
on the last day of the prior Plan Year in the same proportion that
each such Non-Highly Compensated Participant's Compensation for the
prior Plan Year bears to the total Compensation of all such
Non-Highly Compensated Participants for the prior Plan Year. Such
contribution shall be made by the Employer prior to the end of the
current Plan Year. A separate accounting of any special Qualified
Non-Elective Contributions shall be maintained in the Participant's
Account.
Notwithstanding the above, for Plan Years beginning
after December 31, 1998, if the testing method changes from the
current year testing method to the prior year testing method, then
for purposes of preventing the double counting of Qualified
Non-Elective Contributions for the first testing year for which the
change is effective, any special Qualified Non-Elective Contribution
on behalf of Non-Highly Compensated Participants used to satisfy the
"Actual Deferral Percentage" or "Actual Contribution Percentage"
test under the current year testing method for the prior year
testing year shall be disregarded.
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 adjusted annually as
provided in Code Section 415(d) pursuant to the Regulations, or (2)
twenty-five percent (25%) of the Participant's "415 Compensation"
for such "limitation year." For any short "limitation year," the
dollar limitation in (1) above shall be reduced by a fraction, the
numerator of which is the number of full months in the short
"limitation year" and the denominator of which is twelve (12).
(b) For purposes of applying the limitations of Code
Section 415, "annual additions" means the sum credited to a
Participant's accounts for any "limitation year" of (1) Employer
contributions, (2) Employee contributions, (3) forfeitures, (4)
amounts allocated, after March 31, 1984, to an individual medical
account, as defined in Code Section 415(l)(2) which is part of a
pension or annuity plan maintained by the Employer and (5) amounts
derived from contributions paid or accrued after December 31, 1985,
in taxable years ending after such date, which are attributable to
post-retirement medical benefits allocated to the separate account
of a key employee (as defined in Code Section 419A(d)(3)) under a
welfare benefit plan (as defined in Code Section 419(e)) maintained
by the Employer. Except, however, the "415 Compensation" percentage
limitation referred to in paragraph (a)(2) above shall not apply to:
(1) any contribution for medical benefits (within the meaning of
Code Section 419A(f)(2)) after separation from service which is
otherwise treated as an "annual addition," or (2) any amount
otherwise treated as an "annual addition" under Code Section
415(l)(1).
<PAGE> 43
(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 4.9(b): (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) For the purpose of this Section, all qualified defined
contribution plans (whether terminated or not) ever maintained by
the Employer shall be treated as one defined contribution plan.
(f) 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.
(g) For the purpose of this Section, if this Plan is a Code
Section 413(c) plan, each Employer who maintains this Plan will be
considered to be a separate Employer.
(h)(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
<PAGE> 44
have the same Anniversary Date, the maximum "annual additions"
under this Plan shall equal the product of (A) the maximum
"annual additions" for the "limitation year" minus any "annual
additions" previously credited under subparagraphs (1) or (2)
above, multiplied by (B) a fraction (i) the numerator of which
is the "annual additions" which would be credited to such
Participant's accounts under this Plan without regard to the
limitations of Code Section 415 and (ii) the denominator of
which is such "annual additions" for all plans described in
this subparagraph.
(i) Notwithstanding anything contained in this Section to the
contrary, the limitations, adjustments and other requirements
prescribed in this Section shall at all times comply with the
provisions of Code Section 415 and the Regulations thereunder, the
terms of which are specifically incorporated herein by reference.
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If, as a result of the allocation of Forfeitures, a
reasonable error in estimating a Participant's Compensation, a
reasonable error in determining the amount of elective deferrals
(within the meaning of Code Section 402(g)(3)) that may be
made with respect to any Participant under the limits of Section 4.9
or other facts and circumstances to which Regulation 1.415-6(b)(6)
shall be applicable, the "annual additions" under this Plan would
cause the maximum "annual additions" to be exceeded for any
Participant, the Administrator shall (1) distribute any elective
deferrals (within the meaning of Code Section 402(g)(3)) or
return any Employee contributions (whether voluntary or mandatory),
and for the distribution of gains attributable to those elective
deferrals and Employee contributions, to the extent that the
distribution or return would reduce the "excess amount" in the
Participant's accounts (2) hold any "excess amount" remaining after
the return of any elective deferrals or voluntary Employee
contributions in a "Section 415 suspense account" (3) use the
"Section 415 suspense account" in the next "limitation year" (and
succeeding "limitation years" if necessary) to reduce Employer
contributions for that Participant if that Participant is covered by
the Plan as of the end of the "limitation year," or if the
Participant is not so covered, allocate and reallocate the "Section
415 suspense account" in the next "limitation year" (and succeeding
"limitation years" if necessary) to all Participants in the Plan
before any Employer or Employee contributions which would constitute
"annual additions" are made to the Plan for such "limitation year"
(4) reduce Employer contributions to the Plan for such "limitation
year" by the amount of the "Section 415 suspense account" allocated
and reallocated during such "limitation year."
(b) For purposes of this Article, "excess amount" for any
Participant for a "limitation year" shall mean the excess, if any,
of (1) the "annual additions" which would be credited to his account
under the terms of the Plan without regard to the limitations of
Code Section 415 over (2) the maximum "annual additions"
determined pursuant to Section 4.9.
<PAGE> 45
(c) For purposes of this Section, "Section 415 suspense
account" shall mean an unallocated account equal to the sum of
"excess amounts" for all Participants in the Plan during the
"limitation year." The "Section 415 suspense account" shall not
share in any earnings or losses of the Trust Fund.
4.11 TRANSFERS FROM QUALIFIED PLANS
(a) With the consent of the Administrator, amounts may be
transferred from other qualified plans by Eligible Employees,
provided that the trust from which such funds are transferred
permits the transfer to be made and the transfer will not jeopardize
the tax exempt status of the Plan or Trust or create adverse tax
consequences for the Employer. The amounts transferred shall be set
up in a separate account herein referred to as a "Participant's
Rollover Account." Such account shall be fully Vested at all times
and shall not be subject to Forfeiture for any reason.
(b) Amounts in a Participant's Rollover Account shall be held
by the Trustee pursuant to the provisions of this Plan and may not
be withdrawn by, or distributed to the Participant, in whole or in
part, except as provided in paragraphs (c) and (d) of this Section.
(c) Except as permitted by Regulations (including Regulation
1.411(d)-4), amounts attributable to elective contributions (as
defined in Regulation 1.401(k)-1(g)(3)), including amounts treated
as elective contributions, which are transferred from another
qualified plan in a plan-to-plan transfer shall be subject to the
distribution limitations provided for in Regulation 1.401(k)-1(d).
(d) The Administrator, at the election of the Participant,
shall direct the Trustee to distribute all or a portion of the
amount credited to the Participant's Rollover Account. 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 7.5, including, but not limited to, all notice
and consent requirements of Code Section 411(a)(11) and the
Regulations thereunder. Furthermore, such amounts shall be
considered as part of a Participant's benefit in determining whether
an involuntary cash-out of benefits without Participant consent may
be made.
(e) The Administrator may direct that employee transfers made
after a Valuation Date be segregated into a separate account for
each Participant in a federally insured savings account, certificate
of deposit in a bank or savings and loan association, money market
certificate, or other short term debt security acceptable to the
Trustee until such time as the allocations pursuant to this Plan
have been made, at which time they may remain segregated or be
invested as part of the general Trust Fund, to be determined by the
Administrator.
(f) For purposes of this Section, the term "qualified plan"
shall mean any tax qualified plan under Code Section 401(a).
The term "amounts transferred from other qualified plans" shall
mean: (i) amounts transferred to this Plan directly from
another qualified plan; (ii) distributions from another
qualified plan
<PAGE> 46
which are eligible rollover distributions and which
are either transferred by the Employee to this Plan within sixty
(60) days following his receipt thereof or are transferred pursuant
to a direct rollover; (iii) amounts transferred to this Plan
from a conduit individual retirement account provided that the
conduit individual retirement account has no 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) This Plan shall not accept any direct or indirect
transfers (as that term is defined and interpreted under Code
Section 401(a)(11) and the Regulations thereunder) from a defined
benefit plan, money purchase plan (including a target benefit plan),
stock bonus or profit sharing plan which would otherwise have
provided for a life annuity form of payment to the Participant.
(i) Notwithstanding anything herein to the contrary, a
transfer directly to this Plan from another qualified plan (or a
transaction having the effect of such a transfer) shall only be
permitted if it will not result in the elimination or reduction of
any "Section 411(d)(6) protected benefit" as described in Section
8.1.
4.12 DIRECTED INVESTMENT ACCOUNT
(a) Participants may, subject to Section 4.12(c) and a
procedure established by the Administrator (the Participant
Direction Procedures) and applied in a uniform nondiscriminatory
manner, direct the Trustee to invest all or a portion of their
individual account balances in specific assets, specific funds or
other investments permitted under the Plan and the Participant
Direction Procedures. That portion of the interest of any
Participant so directing will thereupon be considered a
Participant's Directed Account. A Participant may not direct the
investment of account balances attributable to contributions made
under Section 4.1(e) of the Plan and the earnings thereon except as
required under Section 4.12(c) below.
(b) As of each Valuation Date, all Participant Directed
Accounts shall be charged or credited with the net earnings, gains,
losses and expenses as well as any appreciation or depreciation in
the market value using publicly listed fair market values when
available or appropriate.
<PAGE> 47
(1) To the extent that the assets in a Participant's Directed
Account are accounted for as pooled assets or investments, the
allocation of earnings, gains and losses of each Participant's
Directed Account shall be based upon the total amount of funds
so invested, in a manner proportionate to the Participant's
share of such pooled investment.
(2) To the extent that the assets in the Participant's
Directed Account are accounted for as segregated assets, the
allocation of earnings, gains and losses from such assets
shall be made on a separate and distinct basis.
(c) Each "Qualified Participant" may elect within ninety (90)
days after the close of each Plan Year during the "Qualified
Election Period" to direct the Trustee in writing as to the
investment of 25 percent of the total number of shares of Company
Stock acquired by or contributed to the Plan that have ever been
allocated to such "Qualified Participant's" Company Stock Account
(reduced by the number of shares of Company Stock previously
invested pursuant to a prior election). In the case of the election
year in which the Participant can make his last election, the
preceding sentence shall be applied by substituting "50 percent" for
"25 percent." If the "Qualified Participant" elects to direct the
Trustee as to the investment of his Company Stock Account, such
direction shall be effective no later than 180 days after the close
of the Plan Year to which such direction applies. Furthermore, the
Participant must be given a choice of at least three distinct
investment options.
Notwithstanding the above, if the fair market value
(determined pursuant to Section 6.1 at the Plan Valuation Date
immediately preceding the first day on which a "Qualified
Participant" is eligible to make an election) of Company Stock
acquired by or contributed to the Plan and allocated to a "Qualified
Participant's" Company Stock Account is $500 or less, then such
Company Stock shall not be subject to this paragraph. For purposes
of determining whether the fair market value exceeds $500, Company
Stock held in accounts of all employee stock ownership plans (as
defined in Code Section 4975(e)(7)) and tax credit employee
stock ownership plans (as defined in Code Section 409(a))
maintained by the Employer or any Affiliated Employer shall be
considered as held by the Plan.
(d) For the purposes of this Section the following definitions
shall apply:
(1) "Qualified Participant" means any Participant or Former
Participant who has completed ten (10) Years of Service as a
Participant and has attained age 55.
(2) "Qualified Election Period" means the six (6) Plan Year
period beginning with the later of (i) the first Plan Year in
which the Participant first became a "Qualified Participant,"
or (ii) the first Plan Year beginning after December 31, 1986.
<PAGE> 48
4.13 TREATMENT OF QUALIFIED MILITARY SERVICE
Notwithstanding any provision of this Plan to the contrary,
effective December 12, 1994, contributions, benefits and service will be
provided in accordance with Code Section 414(u).
ARTICLE V
FUNDING AND INVESTMENT POLICY
5.1 INVESTMENT POLICY
(a) The Plan is designed to invest primarily in Company Stock.
(b) With due regard to subparagraph (a) above, the
Administrator may also direct the Trustee to invest funds under the
Plan in other property described in the Trust or in life insurance
policies to the extent permitted by subparagraph (c) below, or the
Trustee may hold such funds in cash or cash equivalents.
(c) With due regard to subparagraph (a) above, the
Administrator may also direct the Trustee to invest funds under the
Plan in insurance policies on the life of any "keyman" Employee. The
proceeds of a "keyman" insurance policy may not be used for the
repayment of any indebtedness owed by the Plan which is secured by
Company Stock. In the event any "keyman" insurance is purchased by
the Trustee, the premiums paid thereon during any Plan Year, net of
any policy dividends and increases in cash surrender values, shall
be treated as the cost of Plan investment and any death benefit or
cash surrender value received shall be treated as proceeds from an
investment of the Plan.
(d) The Plan may not obligate itself to acquire Company Stock
from a particular holder thereof at an indefinite time determined
upon the happening of an event such as the death of the holder.
(e) The Plan may not obligate itself to acquire Company Stock
under a put option binding upon the Plan. However, at the time a put
option is exercised, the Plan may be given an option to assume the
rights and obligations of the Employer under a put option binding
upon the Employer.
(f) All purchases of Company Stock shall be made at a price
which, in the judgment of the Administrator, does not exceed the
fair market value thereof. All sales of Company Stock shall be made
at a price which, in the judgment of the Administrator, is not less
than the fair market value thereof. The valuation rules set forth in
Article VI shall be applicable.
5.2 TRANSACTIONS INVOLVING COMPANY STOCK
(a) No portion of the Trust Fund attributable to (or allocable
in lieu of) Company Stock acquired by the Plan in a sale to which
Code Section 1042 applies may accrue or be allocated directly or
indirectly under any plan maintained by the Employer meeting the
requirements of Code Section 401(a):
<PAGE> 49
(1) during the "Nonallocation Period," for the benefit of
(i) any taxpayer who makes an election under Code
Section 1042(a) with respect to Company Stock,
(ii) any individual who is related to the taxpayer
(within the meaning of Code Section 267(b)), or
(2) for the benefit of any other person who owns (after
application of Code Section 318(a) applied without regard to
the employee trust exception in Code Section 318(a)(2)(B)(i))
more than 25 percent of
(i) any class of outstanding stock of the Employer or
Affiliated Employer which issued such Company Stock, or
(ii) the total value of any class of outstanding stock
of the Employer or Affiliated Employer.
(b) Except, however, subparagraph (a)(1)(ii) above shall not
apply to lineal descendants of the taxpayer, provided that the
aggregate amount allocated to the benefit of all such lineal
descendants during the "Nonallocation Period" does not exceed more
than five (5) percent of the Company Stock (or amounts allocated in
lieu thereof) held by the Plan which are attributable to a sale to
the Plan by any person related to such descendants (within the
meaning of Code Section 267(c)(4)) in a transaction to which Code
Section 1042 is applied.
(c) A person shall be treated as failing to meet the stock
ownership limitation under paragraph (a)(2) above if such person
fails such limitation:
(1) at any time during the one (1) year period ending on the
date of sale of Company Stock to the Plan, or
(2) on the date as of which Company Stock is allocated to
Participants in the Plan.
(d) For purposes of this Section, "Nonallocation Period" means
the period beginning on the date of the sale of the Company Stock
and ending on the date which is ten (10) years after the date of
sale.
ARTICLE VI
VALUATIONS
6.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each Valuation
Date, to determine the net worth of the assets comprising the Trust Fund as it
exists on the Valuation Date. In determining such net worth, the Trustee shall
value the assets comprising the Trust Fund at their fair market value as of the
<PAGE> 50
Valuation Date and shall deduct all expenses for which the Trustee has not yet
obtained reimbursement from the Employer or the Trust Fund. The Trustee may
update the value of any shares held in the Participant Directed Account by
reference to the number of shares held by that Participant, priced at the market
value as of the Valuation Date.
6.2 METHOD OF VALUATION
Valuations must be made in good faith and based on all relevant
factors for determining the fair market value of securities. In the case of a
transaction between a Plan and a disqualified person, value must be determined
as of the date of the transaction. For all other Plan purposes, value must be
determined as of the most recent Valuation Date under the Plan. An independent
appraisal will not in itself be a good faith determination of value in the case
of a transaction between the Plan and a disqualified person. However, in other
cases, a determination of fair market value based on at least an annual
appraisal independently arrived at by a person who customarily makes such
appraisals and who is independent of any party to the transaction will be deemed
to be a good faith determination of value. Company Stock not readily tradeable
on an established securities market shall be valued by an independent appraiser
meeting requirements similar to the requirements of the Regulations prescribed
under Code Section 170(a)(1).
ARTICLE VII
DETERMINATION AND DISTRIBUTION OF BENEFITS
7.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate his employment with the Employer and
retire for the purposes hereof on his Normal Retirement Date or Early Retirement
Date. However, a Participant may postpone the termination of his employment with
the Employer to a later date, in which event the participation of such
Participant in the Plan, including the right to receive allocations pursuant to
Section 4.4, shall continue until his Late Retirement Date. Upon a
Participant's Retirement Date or attainment of his Normal Retirement Date
without termination of employment with the Employer, or as soon thereafter as is
practicable, the Trustee shall distribute, at the election of the Participant,
all amounts credited to such Participant's Combined Account in accordance with
Sections 7.5 and 7.6.
7.2 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. If
elected, distribution of the Participant's Combined Account shall
commence not later than one (1) year after the close of the Plan
Year in which such Participant's death occurs. The Administrator
shall direct the Trustee, in accordance with the provisions of
Sections 7.5 and 7.6, to distribute the value of the deceased
Participant's accounts to the Participant's Beneficiary.
(b) Upon the death of a Former Participant, the Administrator
shall direct the Trustee, in accordance with the provisions of
Sections 7.5 and 7.6, to distribute any remaining Vested amounts
credited to the accounts of a deceased Former Participant to such
Former Participant's Beneficiary.
<PAGE> 51
(c) Any security interest held by the Plan by reason of an
outstanding loan to the Participant or Former Participant shall be
taken into account in determining the amount of the death benefit.
(d) The Administrator may require such proper proof of death
and such evidence of the right of any person to receive payment of
the value of the account of a deceased Participant or Former
Participant as the Administrator may deem desirable. The
Administrator's determination of death and of the right of any
person to receive payment shall be conclusive.
(e) The Beneficiary of the death benefit payable pursuant to
this Section shall be the Participant's spouse. Except, however, the
Participant may designate a Beneficiary other than his spouse if:
(1) the spouse has waived the right to be the Participant's
Beneficiary, or
(2) the Participant is legally separated or has been abandoned
(within the meaning of local law) and the Participant has a
court order to such effect (and there is no "qualified
domestic relations order" as defined in Code Section 414(p)
which provides otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a Beneficiary shall be
made on a form satisfactory to the Administrator. A Participant may
at any time revoke his designation of a Beneficiary or change his
Beneficiary by filing written notice of such revocation or change
with the Administrator. However, the Participant's spouse must again
consent in writing to any change in Beneficiary unless the original
consent acknowledged that the spouse had the right to limit consent
only to a specific Beneficiary and that the spouse voluntarily
elected to relinquish such right. In the event no valid designation
of Beneficiary exists at the time of the Participant's death, the
death benefit shall be payable to his estate.
(f) Any consent by the Participant's spouse to waive any
rights to the death benefit must be in writing, must acknowledge the
effect of such 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.
7.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
In the event of a Participant's Total and Permanent Disability prior
to his Retirement Date or other termination of his employment, all amounts
credited to such Participant's Combined Account shall become fully Vested. In
the event of a Participant's Total and Permanent Disability, the Trustee, in
accordance with the provisions of Sections 7.5 and 7.6,
<PAGE> 52
shall distribute to such Participant all amounts credited to such Participant's
Combined Account as though he had retired. If such Participant elects,
distribution shall commence not later than one (1) year after the close of the
Plan Year in which Total and Permanent Disability occurs.
7.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) If a Participant's employment with the Employer is
terminated for any reason other than death, Total and Permanent
Disability or retirement, such Participant shall be entitled to such
benefits as are provided hereinafter pursuant to this Section 7.4.
If a portion of a Participant's Account is forfeited,
Company Stock allocated to the Participant's Company Stock Account
must be forfeited only after the Participant's Other Investments
Account has been depleted. If interest in more than one class of
Company Stock has been allocated to a Participant's Account, the
Participant must be treated as forfeiting the same proportion of
each such class.
Distribution of the funds due to a Terminated
Participant shall be made on the occurrence of an event which would
result in the distribution had the Terminated Participant remained
in the employ of the Employer (upon the Participant's death, Total
and Permanent Disability, Early or Normal Retirement). However, at
the election of the Participant, the Administrator shall direct the
Trustee to cause the entire Vested portion of the Terminated
Participant's Combined Account to be payable to such Terminated
Participant. Any distribution under this paragraph shall be made in
a manner which is consistent with and satisfies the provisions of
Section 7.5 and 7.6, including, but not limited to, all notice and
consent requirements of Code Section 411(a)(11) and the Regulations
thereunder.
If the value of a Terminated Participant's Vested
benefit derived from Employer and Employee contributions does not
exceed $3,500, and has never exceeded $3,500 at the time of any
distribution prior to March 22, 1999, the Administrator shall direct
the Trustee to cause the entire Vested benefit to be paid to such
Participant in a single lump sum.
For purposes of this Section 7.4, 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
attributable to Employer contributions other than contributions made
pursuant to Section 4.1(b) shall be a percentage of the total amount
credited to his Participant's Account determined on the basis of the
Participant's number of Years of Service according to the following
schedule:
<PAGE> 53
Vesting Schedule
Years of Service Percentage
Less than 5 0 %
5 100 %
(c) Notwithstanding the vesting schedule provided for in
paragraph (b) above, 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 following schedule:
Vesting Schedule
Years of Service Percentage
Less than 3 0 %
3 100 %
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, the Vested
percentage of a Participant's Account shall not be less than the
Vested percentage attained as of the later of the effective date or
adoption date of this amendment and restatement.
(e) Notwithstanding the vesting schedule above, upon the
complete discontinuance of the Employer 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.
(f) The computation of a Participant's nonforfeitable
percentage of his interest in the Plan shall not be reduced as the
result of any direct or indirect amendment to this Plan. For this
purpose, the Plan shall be treated as having been amended if the
Plan provides for an automatic change in vesting due to a change in
top heavy status. In the event that the Plan is amended to change or
modify any vesting schedule, a Participant with at least three (3)
Years of Service as of the expiration date of the election period
may elect to have his nonforfeitable percentage computed under the
Plan without regard to such amendment. If a Participant fails to
make such election, then such Participant shall be subject to the
new vesting schedule. The Participant's election period shall
commence on the adoption date of the amendment and shall end 60 days
after the latest of:
(1) the adoption date of the amendment,
<PAGE> 54
(2) the effective date of the amendment, or
(3) the date the Participant receives written notice of the
amendment from the Employer or Administrator.
(g)(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 five (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. 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 Valuation Date coinciding with or 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 such forfeited Accounts
provided, however, that if a discretionary contribution is
made for such year pursuant to Section 4.1(e), such
contribution shall first be applied to restore any such
Accounts and the remainder shall be allocated in accordance
with Section 4.4.
(3) If any Former Participant is reemployed after a 1-Year
Break in Service has occurred, Years of Service shall include
Years of Service prior to his 1-Year Break in Service subject
to the following rules:
(i) If a Former Participant has a 1-Year Break in
Service, his prebreak and postbreak service shall be
used for computing Years of Service for vesting purposes
only after he has been employed for one (1) Year of
Service following the date of his reemployment with the
Employer;
(ii) Any Former Participant who under the Plan does not
have a nonforfeitable right to any interest in the Plan
resulting from Employer contributions shall lose credits
otherwise allowable under (i) above if his consecutive
1-Year Breaks in Service equal or exceed the greater of
(A) five (5) or (B) the aggregate number of his prebreak
Years of Service;
<PAGE> 55
(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 is reemployed by the
Employer, he shall participate in the Plan immediately
on his date of reemployment;
(v) If a Former Participant (a 1-Year Break in Service
previously occurred, but employment had not terminated)
is credited with an Hour of Service after the first
eligibility computation period in which he incurs a
1-Year Break in Service, he shall participate in the
Plan immediately.
(h) In determining Years of Service for purposes of vesting
under the Plan, Years of Service prior to the Effective Date of the
Plan and prior to the vesting computation period in which an
Employee attained his eighteenth birthday shall be excluded.
7.5 DISTRIBUTION OF BENEFITS
(a) The Administrator, pursuant to the election of the
Participant, shall direct the Trustee to distribute to a Participant
or his Beneficiary any amount to which he is entitled under the Plan
in one or more of the following methods:
(1) One lump-sum payment.
(2) Payments over a period certain in monthly, quarterly,
semiannual, or annual installments. The period over which such
payment is to be made shall not extend beyond the earlier of
the Participant's life expectancy (or the life expectancy of
the Participant and his designated Beneficiary) or the limited
distribution period provided for in Section 7.5(b).
(b) Unless the Participant elects in writing a longer
distribution period, distributions to a Participant or his
Beneficiary attributable to Company Stock shall be in
substantially equal monthly, quarterly, semiannual, or annual
installments over a period not longer than five (5) years. In
the case of a Participant with an account balance attributable
to Company Stock in excess of $500,000, the five (5) year
period shall be extended one (1) additional year (but not more
than five (5) additional years) for each $100,000 or fraction
thereof by which such balance exceeds $500,000. The dollar
limits shall be adjusted at the same time and in the same
manner as provided in Code Section 415(d).
(c) Any distribution to a Participant who has a benefit which
exceeds $3,500, or has ever exceeded $3,500 at the time of any
distribution prior to March 22, 1999, shall require such
Participant's consent if such distribution commences prior to
the later of his Normal Retirement Age or age 62. However, if
a Participant has begun to receive distributions pursuant to
an optional form of benefit under which at least one scheduled
periodic distribution has not yet been made, and if the value
of the Participant's benefit, determined at the time of the
first distribution under that optional form of benefit
exceeded $3,500, then the value of the Participant's benefit
is deemed to continue to exceed such amount. With regard to
this required consent:
<PAGE> 56
(1) The Participant must be informed of his right to defer
receipt of the distribution. If a Participant fails to
consent, it shall be deemed an election to defer the
commencement of payment of any benefit. However, any election
to defer the receipt of benefits shall not apply with respect
to distributions which are required under Section 7.5(f).
(2) Notice of the rights specified under this paragraph shall
be provided no less than 30 days and no more than 90 days
before the date the distribution commences.
(3) 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 date the distribution
commences.
(4) No consent shall be valid if a significant detriment is
imposed under the Plan on any Participant who does not consent
to the distribution.
Any such distribution may commence less than 30 days
after the notice required under Regulation 1.411(a)-11(c) is given,
provided that: (1) the 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.
(d) Notwithstanding anything herein to the contrary, the
Administrator, in his sole discretion, may direct that cash
dividends on shares of Company Stock allocable to Participants' or
Former Participants' Company Stock Accounts be distributed to such
Participants or Former Participants within 90 days after the close
of the Plan Year in which the dividends are paid.
(e) Any part of a Participant's benefit which is retained in
the Plan after the Anniversary Date on which his participation ends
will continue to be treated as a Company Stock Account or as an
Other Investments Account (subject to Section 7.4(a)) as provided in
Article IV. However, neither account will be credited with any
further Employer contributions or Forfeitures.
(f) Notwithstanding any provision in the Plan to the contrary,
the distribution of a Participant's benefits made on or after
January 1, 1997 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:
<PAGE> 57
(1) A Participant's benefits shall be distributed or must
begin to be distributed to him not later than the April 1st
of the calendar year following the calendar year in
which the Participant attains age 70 1/2. Such
distribution shall be equal to or greater than any required
distribution. However, any Participant who is not a "five (5)
percent owner" and who attains age 70 1/2 in or after a
calendar year that begins after the later of (i) December 31,
1998, or (ii) the adoption date of an amendment eliminating
the required distribution provided in the first sentence of
this paragraph, provided that the adoption date is no later
than the last day of any remedial amendment period that
applies to the Plan for changes under the Small Business Job
Protection Act of 1996, shall have his benefits distributed or
must begin to be distributed to him not later than the 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.
Alternatively, distributions to a Participant must begin no
later than the applicable April 1st as determined under the
preceding paragraph and must be made over a period certain
measured by the life expectancy of the Participant (or the
life expectancies of the Participant and his designated
Beneficiary) in accordance with Regulations.
(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.
(g) Notwithstanding any provision in the Plan to the contrary,
distributions upon the death of a Participant shall be made in
accordance with the following requirements and shall otherwise
comply with Code Section 401(a)(9) and the Regulations thereunder.
If it is determined pursuant to Regulations that the distribution of
a Participant's interest has begun and the Participant dies before
his entire interest has been distributed to him, the remaining
portion of such interest shall be distributed at least as rapidly as
under the method of distribution selected pursuant to Section 7.5 as
of his date of death. If a Participant dies before he has begun to
receive any distributions of his interest under the Plan or before
distributions are deemed to have begun pursuant to Regulations, then
his death benefit shall be distributed to his Beneficiaries by
December 31st of the calendar year in which the fifth anniversary of
his date of death occurs.
However, the 5-year distribution requirement of the
preceding paragraph shall not apply to any portion of the deceased
Participant's interest which is payable to or for the benefit of a
designated Beneficiary. In such event, such portion may, at the
election of the Participant (or the Participant's designated
Beneficiary), be distributed over a period not extending beyond the
life expectancy of such designated Beneficiary provided such
distribution begins not later than December 31st of the
calendar year immediately following the calendar year in which the
Participant died. However, in the event the Participant's spouse
(determined as of the date of the Participant's death) is his
Beneficiary, the requirement that distributions commence within one
year of a Participant's death shall not apply. In lieu thereof,
<PAGE> 58
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.
(h) For purposes of Section 7.5(g), 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.
(i) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse may, at the election of the
Participant or the Participant's spouse, be redetermined in
accordance with Regulations. The election, once made, shall be
irrevocable. If no election is made by the time distributions must
commence, then the life expectancy of the Participant and the
Participant's spouse shall not be subject to recalculation. Life
expectancy and joint and last survivor expectancy shall be computed
using the return multiples in Tables V and VI of Regulation 1.72-9.
(j) Except as limited by Sections 7.5 and 7.6, whenever the
Trustee is to make a distribution or to commence a series of
payments, the distribution or series of payments may be made or
begun as soon as is practicable. However, unless a Former
Participant elects in writing to defer the receipt of benefits (such
election may not result in a death benefit that is more than
incidental), the payment of benefits shall begin not later than the
60th day after the close of the Plan Year in which the latest of the
following events occurs:
(1) the date on which the Participant attains the earlier of
age 65 or the Normal Retirement Age specified herein;
(2) the 10th anniversary of the year in which the Participant
commenced participation in the Plan; or
(3) the date the Participant terminates his service with the
Employer.
(k) 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:
<PAGE> 59
(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.
7.6 HOW PLAN BENEFIT WILL BE DISTRIBUTED
(a) Distribution of a Participant's benefit may be made in
cash or Company Stock or both, provided, however, that if a
Participant or Beneficiary so demands, such benefit (other than
Company Stock reinvested pursuant to Section 4.12(c)) shall be
distributed only in the form of Company Stock. Prior to making a
distribution of benefits, the Administrator shall advise the
Participant or his Beneficiary, in writing, of the right to demand
that benefits be distributed solely in Company Stock.
(b) If a Participant or Beneficiary demands that benefits be
distributed solely in Company Stock, distribution of a Participant's
benefit will be made entirely in whole shares or other units of
Company Stock. Any balance in a Participant's Other Investments
Account will be applied to acquire for distribution the maximum
number of whole shares or other units of Company Stock at the then
fair market value. Any fractional unit value unexpended will be
distributed in cash. If Company Stock is not available for purchase
by the Trustee, then the Trustee shall hold such balance until
Company Stock is acquired and then make such distribution, subject
to Sections 7.5(j) and 7.5(f).
(c) The Trustee will make distribution from the Trust only on
instructions from the Administrator.
(d) Notwithstanding anything contained herein to the contrary,
if the Employer charter or bylaws restrict ownership of
substantially all shares of Company Stock to Employees and the Trust
Fund, as described in Code Section 409(h)(2)(B)(ii)(I), the
Administrator shall distribute a Participant's Combined Account
entirely in cash without granting the Participant the right to
demand distribution in shares of Company Stock.
(e) Except as otherwise provided herein, Company Stock
distributed by the Trustee may be restricted as to sale or transfer
by the bylaws or articles of incorporation of the Employer, provided
restrictions are applicable to all Company Stock of the same class.
If a Participant is required to offer the sale of his Company Stock
to the Employer before offering to sell his Company Stock to a third
party, in no event may the Employer pay a price less than that
offered to the distributee by another potential buyer making a bona
fide offer and in no event shall the Trustee pay a price less than
the fair market value of the Company Stock.
<PAGE> 60
7.7 DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor, then the
Administrator may direct that such distribution be paid to the legal guardian,
or if none, to a parent of such Beneficiary or a responsible adult with whom the
Beneficiary maintains his residence, or to the custodian for such Beneficiary
under the Uniform Gift to Minors Act or Gift to Minors Act, if such is permitted
by the laws of the state in which said Beneficiary resides. Such a payment to
the legal guardian, custodian or parent of a minor Beneficiary shall fully
discharge the Trustee, Employer, and Plan from further liability on account
thereof.
7.8 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution payable
to a Participant or his Beneficiary hereunder shall, at the later of the
Participant's attainment of age 62 or his Normal Retirement Age, remain unpaid
solely by reason of the inability of the Administrator, after sending a
registered letter, return receipt requested, to the last known address, and
after further diligent effort, to ascertain the whereabouts of such Participant
or his Beneficiary, the amount so distributable shall be treated as 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
unadjusted for earnings or losses.
7.9 PUT OPTION
(a) If Company Stock is distributed to a Participant and such
Company Stock is not readily tradeable on an established securities
market, a Participant has a right to require the Employer to
repurchase the Company Stock distributed to such Participant under a
fair valuation formula. Such Stock shall be subject to the
provisions of Section 7.9(b).
(b) The put option must be exercisable only by a Participant,
by the Participant's donees, or by a person (including an estate or
its distributee) to whom the Company Stock passes by reason of a
Participant's death. (Under this paragraph Participant or Former
Participant means a Participant or Former Participant and the
beneficiaries of the Participant or Former Participant under the
Plan.) The put option must permit a Participant to put the Company
Stock to the Employer. Under no circumstances may the put option
bind the Plan. However, it shall grant the Plan an option to assume
the rights and obligations of the Employer at the time that the put
option is exercised. If it is known at the time a loan is made that
Federal or State law will be violated by the Employer honoring such
put option, the put option must permit the Company Stock to be put,
in a manner consistent with such law, to a third party (e.g., an
affiliate of the Employer or a shareholder other than the Plan) that
has substantial net worth at the time the loan is made and whose net
worth is reasonably expected to remain substantial.
<PAGE> 61
The put option shall commence as of the day following
the date the Company Stock is distributed to the Former Participant
and end 60 days thereafter and if not exercised within such 60-day
period, an additional 60-day option shall commence on the first day
of the fifth month of the Plan Year next following the date the
stock was distributed to the Former Participant (or such other
60-day period as provided in Regulations). However, in the case of
Company Stock that is publicly traded without restrictions when
distributed but ceases to be so traded within either of the 60-day
periods described herein after distribution, the Employer must
notify each holder of such Company Stock in writing on or before the
tenth day after the date the Company Stock ceases to be so traded
that for the remainder of the applicable 60-day period the Company
Stock is subject to the put option. The number of days between the
tenth day and the date on which notice is actually given, if later
than the tenth day, must be added to the duration of the put option.
The notice must inform distributees of the term of the put options
that they are to hold. The terms must satisfy the requirements of
this paragraph.
The put option is exercised by the holder notifying the
Employer in writing that the put option is being exercised; the
notice shall state the name and address of the holder and the number
of shares to be sold. The period during which a put option is
exercisable does not include any time when a distributee is unable
to exercise it because the party bound by the put option is
prohibited from honoring it by applicable Federal or State law. The
price at which a put option must be exercisable is the value of the
Company Stock determined in accordance with Section 6.2. Payment
under the put option involving a "Total Distribution" shall be paid
in substantially equal monthly, quarterly, semiannual or annual
installments over a period certain beginning not later than thirty
(30) days after the exercise of the put option and not extending
beyond (5) years. The deferral of payment is reasonable if adequate
security and a reasonable interest rate on the unpaid amounts are
provided. The amount to be paid under the put option involving
installment distributions must be paid not later than thirty (30)
days after the exercise of the put option. Payment under a put
option must not be restricted by the provisions of a loan or any
other arrangement, including the terms of the Employer articles of
incorporation, unless so required by applicable state law.
For purposes of this Section, "Total Distribution" means
a distribution to a Participant or his Beneficiary within one
taxable year of the entire Vested Participant's Combined Account.
(c) An arrangement involving the Plan that creates a put
option must not provide for the issuance of put options other than
as provided under this Section. The Plan (and the Trust Fund) must
not otherwise obligate itself to acquire Company Stock from a
particular holder thereof at an indefinite time determined upon the
happening of an event such as the death of the holder.
7.10 PRERETIREMENT DISTRIBUTION
The Administrator, at the election of the Participant, shall direct
the Trustee to distribute all or a portion of the Vested amount then credited to
the accounts maintained on behalf of the Participant, except that contributions
<PAGE> 62
made pursuant to Section 4.1(e) and the earnings thereon may not be distributed
until the Participant terminates employment. In the event that the Administrator
makes a pre-retirement distribution, the Participant shall continue to be
eligible to participate in the Plan on the same basis as any other Employee. Any
distribution made pursuant to this Section shall be made in a manner consistent
with Sections 7.5 and 7.6, including, but not limited to, all notice and consent
requirements of Code Section 411(a)(11) and the Regulations thereunder. Only one
pre-retirement distribution may be made in any Plan Year from a Participant's
account.
Notwithstanding the above, preretirement distributions from a
Participant's Elective Account shall not be permitted prior to the Participant
attaining age 59 1/2 except as otherwise permitted under the terms of the
Plan.
7.11 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 and Participant's Account (excluding amounts
attributable to the Employer contribution made pursuant to Sections
4.1(b) and 4.1(e)) and Participant's Rollover Account valued as of
the last 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 and Participant's Account and
Participant's Rollover Account shall be reduced accordingly.
Withdrawal under this Section shall be authorized if the
distribution is on account of:
(1) Expenses for medical care described in Code Section 213(d)
previously incurred by the Participant, his spouse, or any of
his dependents (as defined in Code Section 152) or necessary
for these persons to obtain medical care;
(2) The costs directly related to the purchase of a principal
residence for the Participant (excluding mortgage payments);
(3) Payment of tuition, related educational fees, and room and
board expenses for the next twelve (12) months of
postsecondary education for the Participant, his spouse,
children, or dependents;
(4) Payments necessary to prevent the eviction of the
Participant from his principal residence or foreclosure on the
mortgage of the Participant's principal residence; or
(b) No distribution shall be made pursuant to this Section
unless the Administrator determines, based upon all relevant facts
and circumstances, that the amount to be distributed is not in
excess of the amount required to relieve the financial need and that
such need cannot be satisfied from other resources reasonably
<PAGE> 63
available to the Participant. For this purpose, the Participant's
resources shall be deemed to include those assets of his spouse and
minor children that are reasonably available to 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. A
distribution may be treated as necessary to satisfy a financial need
if the Administrator relies upon the Participant's representation
that the need cannot be relieved:
(1) Through reimbursement or compensation by insurance or
otherwise;
(2) By reasonable liquidation of the Participant's assets, to
the extent such liquidation would not itself increase the
amount of the need;
(3) By cessation of elective deferrals under the Plan; or
(4) By other distributions or loans from the Plan or any other
qualified retirement plan, or by borrowing from commercial
sources on reasonable commercial terms, to the extent such
amounts would not themselves increase the amount of the need.
(c) Notwithstanding the above, distributions from the
Participant's Elective Account pursuant to this Section shall be
limited solely to the Participant's total Deferred Compensation as
of the date of distribution, reduced by the amount of any previous
distributions pursuant to this Section and Section 7.10.
(d) Any distribution made pursuant to this Section shall be
made in a manner which is consistent with and satisfies the
provisions of Sections 7.5 and 7.6, including, but not limited to,
all notice and consent requirements of Code Section 411(a)(11) and
the Regulations thereunder.
7.12 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION
All rights and benefits, including elections, provided to a
Participant in this Plan shall be subject to the rights afforded to any
"alternate payee" under a "qualified domestic relations order." Furthermore, a
distribution to an "alternate payee" shall be permitted if such distribution is
authorized by a "qualified domestic relations order," even if the affected
Participant has not separated from service and has not reached the "earliest
retirement age" under the Plan. For 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).
7.13 DIRECT ROLLOVER
(a) Notwithstanding any provision of the Plan to the contrary
that would otherwise limit a distributee's election under this
Section, a distributee may elect, at the time and in the manner
prescribed by the Administrator, to have any portion of an eligible
rollover distribution that is equal to at least $500 paid directly
to an eligible retirement plan specified by the distributee in a
direct rollover.
<PAGE> 64
(b) For purposes of this Section the following definitions
shall apply:
(1) An eligible rollover distribution is any distribution of
all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution
does not include: any distribution that is one of a series of
substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of
the distributee and the distributee's designated beneficiary,
or for a specified period of ten years or more; any
distribution to the extent such distribution is required under
Code Section 401(a)(9); the portion of any other distribution
that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with
respect to employer securities); any hardship distribution
described in Code Section 401(k)(2)(B)(i)(IV); and any other
distribution that is reasonably expected to total less than
$200 during a year.
(2) An eligible retirement plan is an individual retirement
account described in Code Section 408(a), an individual
retirement annuity described in Code Section 408(b), an
annuity plan described in Code Section 403(a), or a qualified
trust described in Code Section 401(a), that accepts the
distributee's eligible rollover distribution. However, in the
case of an eligible rollover distribution to the surviving
spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
(3) A distributee includes an Employee or former Employee. In
addition, the Employee's or former Employee's surviving spouse
and the Employee's or former Employee's spouse or former
spouse who is the alternate payee under a qualified domestic
relations order, as defined in Code Section 414(p), are
distributees with regard to the interest of the spouse or
former spouse.
(4) A direct rollover is a payment by the Plan to the eligible
retirement plan specified by the distributee.
ARTICLE VIII
AMENDMENT, TERMINATION, MERGERS AND LOANS
8.1 AMENDMENT
(a) The Employer shall have the right at any time to amend the
Plan, subject to the limitations of this Section. However, any
amendment which affects the rights, duties or responsibilities of
the Trustee and Administrator, other than an amendment to remove the
Trustee or 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.
<PAGE> 65
(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.
8.2 TERMINATION
(a) The Employer shall have the right at any time to terminate
the Plan by delivering to the Trustee and Administrator written
notice of such termination. Upon any full or partial termination,
all amounts credited to the affected Participants' Combined Accounts
shall become 100% Vested as provided in Section 7.4 and shall not
thereafter be subject to forfeiture, and all unallocated amounts
shall be allocated to the accounts of all Participants in accordance
with the provisions hereof.
(b) Upon the full termination of the Plan, the Employer shall
direct the distribution of the assets of the Trust Fund to
Participants in a manner which is consistent with and satisfies the
provisions of Sections 7.5 and 7.6. 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).
<PAGE> 66
8.4 LOANS TO PARTICIPANTS
(a) The Trustee may, in the Trustee's discretion, make loans
to Participants and Beneficiaries under the following circumstances:
(1) loans shall be made available to all Participants and
Beneficiaries on a reasonably equivalent basis; (2) loans shall not
be made available to Highly Compensated Employees in an amount
greater than the amount made available to other Participants and
Beneficiaries; (3) loans shall bear a reasonable rate of interest;
(4) loans shall be adequately secured; and (5) shall provide for
repayment over a reasonable period of time.
(b) Loans made pursuant to this Section (when added to the
outstanding balance of all other loans made by the Plan to the
Participant) shall be limited to the lesser of:
(1) $50,000 reduced by the excess (if any) of the highest
outstanding balance of loans from the Plan to the Participant
during the one year period ending on the day before the date
on which such loan is made, over the outstanding balance of
loans from the Plan to the Participant on the date on which
such loan was made, or
(2) one-half (1/2) of the present value of the non-forfeitable
accrued benefit of the Participant under the Plan.
For purposes of this limit, all plans of the Employer
shall be considered one plan.
(c) Loans shall provide for level amortization with 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. For this purpose, a
principal residence has the same meaning as a principal residence
under Code Section 1034. Loan repayments will be suspended under
this Plan as permitted under Code Section 414(u)(4).
(d) Any loans granted or renewed shall be made pursuant to a
Participant loan program. Such loan program shall be established in
writing and must include, but need not be limited to, the following:
(1) the identity of the person or positions authorized to
administer the Participant loan program;
(2) a procedure for applying for loans;
<PAGE> 67
(3) the basis on which loans will be approved or denied;
(4) limitations, if any, on the types and amounts of loans
offered;
(5) the procedure under the program for determining a
reasonable rate of interest;
(6) the types of collateral which may secure a Participant
loan; and
(7) the events constituting default and the steps that will be
taken to preserve Plan assets.
Such Participant loan program shall be contained in a
separate written document which, when properly executed, is hereby
incorporated by reference and made a part of the Plan. Furthermore,
such Participant loan program may be modified or amended in writing
from time to time without the necessity of amending this Section.
ARTICLE IX
TOP HEAVY
9.1 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 7.4 of
the Plan and the special minimum allocation requirements of Code Section 416(c)
pursuant to Section 4.4 of the Plan.
9.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan Year in
which, as of the Determination Date, (1) the Present Value of
Accrued Benefits of Key Employees and (2) the sum of the Aggregate
Accounts of Key Employees under this Plan and all plans of an
Aggregation Group, exceeds sixty percent (60%) of the Present Value
of Accrued Benefits and the Aggregate Accounts of all Key and
Non-Key Employees under this Plan and all plans of an Aggregation
Group.
If any Participant is a Non-Key Employee for any Plan
Year, but such Participant was a Key Employee for any prior Plan
Year, such Participant's Present Value of Accrued Benefit and/or
Aggregate Account balance shall not be taken into account for
purposes of determining whether this Plan is a Top Heavy or Super
Top Heavy Plan (or whether any Aggregation Group which includes this
Plan is a Top Heavy Group). In addition, if a Participant or Former
Participant has not performed any services for any Employer
maintaining the Plan at any time during the five year period ending
on the Determination Date, any accrued benefit for such Participant
or Former Participant shall not be taken into account for the
purposes of determining whether this Plan is a Top Heavy or Super
Top Heavy Plan.
<PAGE> 68
(b) This Plan shall be a Super Top Heavy Plan for any Plan
Year in which, as of the Determination Date, (1) the Present Value
of Accrued Benefits of Key Employees and (2) the sum of the
Aggregate Accounts of Key Employees under this Plan and all plans of
an Aggregation Group, exceeds ninety percent (90%) of the Present
Value of Accrued Benefits and the Aggregate Accounts of all Key and
Non-Key Employees under this Plan and all plans of an Aggregation
Group.
(c) Aggregate Account: A Participant's Aggregate Account as of
the Determination Date is the sum of:
(1) his Participant's Combined Account balance as of the most
recent valuation occurring within a twelve (12) month period
ending on the Determination Date;
(2) an adjustment for any contributions due as of the
Determination Date. Such adjustment shall be the amount of any
contributions actually made after the Valuation Date but due
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 under a terminated plan which if it had not been
terminated would have been required to be included in an
Aggregation Group, will be counted. Further, distributions
from the Plan (including the cash value of life insurance
policies) of a Participant's account balance because of death
shall be treated as a distribution for the purposes of this
paragraph.
(4) any Employee contributions, whether voluntary or
mandatory. However, amounts attributable to tax deductible
qualified voluntary employee contributions shall not be
considered to be a part of the Participant's Aggregate Account
balance.
(5) with respect to unrelated rollovers and plan-to-plan
transfers (ones which are both initiated by the Employee and
made from a plan maintained by one employer to a plan
maintained by another employer), if this Plan provides the
rollovers or plan-to-plan transfers, it shall always consider
such rollovers or plan-to-plan transfers as a distribution for
the purposes of this Section. If this Plan is the plan
accepting such rollovers or plan-to-plan transfers, it shall
not consider such rollovers or plan-to-plan transfers as part
of the Participant's Aggregate Account balance.
<PAGE> 69
(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.
(d) "Aggregation Group" means either a Required Aggregation
Group or a Permissive Aggregation Group as hereinafter determined.
(1) Required Aggregation Group: In determining a Required
Aggregation Group hereunder, each plan of the Employer in
which a Key Employee is a participant in the Plan Year
containing the Determination Date or any of the four preceding
Plan Years, and each other plan of the Employer which enables
any plan in which a Key Employee participates to meet the
requirements of Code Sections 401(a)(4) or 410, will be
required to be aggregated. Such group shall be known as a
Required Aggregation Group.
In the case of a Required Aggregation Group, each plan in the
group will be considered a Top Heavy Plan if the Required
Aggregation Group is a Top Heavy Group. No plan in the
Required Aggregation Group will be considered a Top Heavy Plan
if the Required Aggregation Group is not a Top Heavy Group.
(2) Permissive Aggregation Group: The Employer may also
include any other plan not required to be included in the
Required Aggregation Group, provided the resulting group,
taken as a whole, would continue to satisfy the provisions of
Code Sections 401(a)(4) and 410. Such group shall be known as
a Permissive Aggregation Group.
In the case of a Permissive Aggregation Group, only a plan
that is part of the Required Aggregation Group will be
considered a Top Heavy Plan if the Permissive Aggregation
Group is a Top Heavy Group. No plan in the Permissive
Aggregation Group will be considered a Top Heavy Plan if the
Permissive Aggregation Group is not a Top Heavy Group.
(3) Only those plans of the Employer in which the
Determination Dates fall within the same calendar year shall
be aggregated in order to determine whether such plans are Top
Heavy Plans.
<PAGE> 70
(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 12month 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.
ARTICLE X
MISCELLANEOUS
10.1 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.
10.2 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.
<PAGE> 71
(b) This provision shall not apply to the extent a Participant
or Beneficiary is indebted to the Plan, as a result of a loan from
the Plan. At the time a distribution is to be made to or for a
Participant's or Beneficiary's benefit, such proportion of the
amount distributed as shall equal such loan indebtedness shall be
paid by the Trustee to the Trustee or the Administrator, at the
direction of the Administrator, to apply against or discharge such
loan indebtedness. Prior to making a payment, however, the
Participant or Beneficiary must be given written notice by the
Administrator that such loan indebtedness is to be so paid in whole
or part from his Participant's Combined Account. If the Participant
or Beneficiary does not agree that the loan indebtedness is a valid
claim against his Vested Participant's Combined Account, he shall be
entitled to a review of the validity of the claim in accordance with
procedures provided in Sections 2.8 and 2.9.
(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.
10.3 CONSTRUCTION OF PLAN
This Plan and Trust shall be construed and enforced according to the
Act and the laws of the State of Florida, other than its laws respecting choice
of law, to the extent not preempted by the Act.
10.4 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.
10.5 LEGAL ACTION
In the event any claim, suit, or proceeding is brought regarding the
Trust and/or Plan established hereunder to which the Trustee, the Employer or
the Administrator may be a party, and such claim, suit, or proceeding is
resolved in favor of the Trustee, the Employer or the 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.
<PAGE> 72
10.6 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.
10.7 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, at the election
of the Administrator, be paid from the Trust Fund or by the Employer.
10.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
Neither the Employer, the Administrator, 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.
<PAGE> 73
10.9 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.
10.10 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.
10.11 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.
10.12 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 or as accepted by or assigned to
them pursuant to any procedure provided under the Plan, including but not
limited to any agreement allocating or delegating their responsibilities, the
terms of which are incorporated herein by reference. In general, unless
otherwise indicated herein or pursuant to such agreements, the Employer shall
have the duties specified in Article II hereof, as the same may be allocated or
delegated thereunder, including but not limited to the responsibility for making
the contributions provided for under Section 4.1; and shall have the 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 responsibility for the administration of
the Plan, including but not limited to the items specified in Article II of the
Plan, as the same may be allocated or delegated thereunder. The Trustee shall
have the responsibility of management and control of the assets held under the
Trust, except to the extent directed pursuant to Article II or with respect to
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 and any agreement with
the Trustee. 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 as specified or
allocated herein. 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.
<PAGE> 74
10.13 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.
10.14 APPROVAL BY INTERNAL REVENUE SERVICE
(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 3.5, 3.6, and 4.1(f), 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.
10.15 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 this Plan and any Contract purchased hereunder, the Plan provisions
shall control.
<PAGE> 75
10.16 SECURITIES AND EXCHANGE COMMISSION APPROVAL
The Employer may request an interpretative letter from the
Securities and Exchange Commission stating that the transfers of Company Stock
contemplated hereunder do not involve transactions requiring a registration of
such Company Stock under the Securities Act of 1933. In the event that a
favorable interpretative letter is not obtained, the Employer reserves the right
to amend the Plan and Trust retroactively to their Effective Dates in order to
obtain a favorable interpretative letter or to terminate the Plan.
10.17 VOTING COMPANY STOCK
The Trustee shall vote all Company Stock held by it as part of the
Plan assets at such time and in such manner as the Administrator shall direct.
Provided, however, that if any agreement entered into by the Trust provides for
voting of any shares of Company Stock pledged as security for any obligation of
the Plan, then such shares of Company Stock shall be voted in accordance with
such agreement. If the Administrator fails or refuses to give the Trustee timely
instructions as to how to vote any Company Stock as to which the Trustee
otherwise has the right to vote, the Trustee shall not exercise its power to
vote such Company Stock and shall consider the Administrator's failure or
refusal to give timely instructions as an exercise of the Administrator's rights
and a directive to the Trustee not to vote said Company Stock.
Notwithstanding the foregoing, if the Employer has a
registration-type class of securities each Participant or Beneficiary shall be
entitled to direct the Trustee as to the manner in which the Company Stock which
is entitled to vote and which is allocated to the Company Stock Account of such
Participant or Beneficiary is to be voted. If the Employer does not have a
registration-type class of securities, each Participant or Beneficiary in the
Plan shall be entitled to direct the Trustee as to the manner in which voting
rights on shares of Company Stock which are allocated to the Company Stock
Account of such Participant or Beneficiary are to be exercised with respect to
any corporate matter which involves the voting of such shares with respect to
the approval or disapproval of any corporate merger or consolidation,
recapitalization, reclassification, liquidation, dissolution, sale of
substantially all assets of a trade or business, or such similar transaction as
prescribed in Regulations. For purposes of this Section the term
"registration-type class of securities" means: (A) a class of securities
required to be registered under Section 12 of the Securities Exchange Act of
1934; and (B) a class of securities which would be required to be so
registered except for the exemption from registration provided in subsection
(g)(2)(H) of such Section 12.
If the Employer does not have a registration-type class of
securities and the by-laws of the Employer require the Plan to vote an issue in
a manner that reflects a one-man, one-vote philosophy, each Participant or
Beneficiary shall be entitled to cast one vote on an issue and the Trustee shall
vote the shares held by the Plan in proportion to the results of the votes cast
on the issue by the Participants and Beneficiaries.
<PAGE> 76
ARTICLE XI
PARTICIPATING EMPLOYERS
11.1 ADOPTION BY OTHER EMPLOYERS
Notwithstanding anything herein to the contrary, with the consent of
the Employer and Trustee, any other corporation or entity, whether an affiliate
or subsidiary or not, may adopt this Plan and all of the provisions hereof, and
participate herein and be known as a Participating Employer, by a properly
executed document evidencing said intent and will of such Participating
Employer.
11.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS
(a) Each such Participating Employer shall be required to use
the same Trustee as provided in this Plan.
(b) The Trustee may, but shall not be required to, commingle,
hold and invest as one Trust Fund all contributions made by
Participating Employers, as well as all increments thereof. However,
the assets of the Plan shall, on an ongoing basis, be available to
pay benefits to all Participants and Beneficiaries under the Plan
without regard to the Employer or Participating Employer who
contributed such assets.
(c) The transfer of any Participant from or to an Employer
participating in this Plan, whether he be an Employee of the
Employer or a Participating Employer, shall not affect such
Participant's rights under the Plan, and all amounts credited to
such Participant's Combined Account as well as his accumulated
service time with the transferor or predecessor, and his length of
participation in the Plan, shall continue to his credit.
(d) All rights and values forfeited by termination of
employment shall inure only to the benefit of the Participants of
the Employer or Participating Employer by which the forfeiting
Participant was employed, except if the Forfeiture is for an
Employee whose Employer is an Affiliated Employer, then said
Forfeiture shall inure to the benefit of the Participants of those
Employers who are Affiliated Employers. Should an Employee of one
("First") Employer be transferred to an associated ("Second")
Employer which is an Affiliated Employer, such transfer shall not
cause his account balance (generated while an Employee of "First"
Employer) in any manner, or by any amount to be forfeited. Such
Employee's Participant Combined Account balance for all purposes of
the Plan, including length of service, shall be considered as though
he had always been employed by the "Second" Employer and as such had
received contributions, forfeitures, earnings or losses, and
appreciation or depreciation in value o assets totaling the amount
so transferred.
(e) Any expenses of the Trust which are to be paid by the
Employer or borne by the Trust Fund shall be paid by each
Participating Employer in the same proportion that the total amount
standing to the credit of all Participants employed by such Employer
bears to the total standing to the credit of all Participants.
<PAGE> 77
11.3 DESIGNATION OF AGENT
Each Participating Employer shall be deemed to be a party to this
Plan; provided, however, that with respect to all of its relations with the
Trustee and Administrator for the purpose of this Plan, each Participating
Employer shall be deemed to have designated irrevocably the Employer as its
agent. Unless the context of the Plan clearly indicates the contrary, the word
"Employer" shall be deemed to include each Participating Employer as related to
its adoption of the Plan.
11.4 EMPLOYEE TRANSFERS
It is anticipated that an Employee may be transferred between
Participating Employers, and in the event of any such transfer, the Employee
involved shall carry with him his accumulated service and eligibility. No such
transfer shall effect a termination of employment hereunder, and the
Participating Employer to which the Employee is transferred shall thereupon
become obligated hereunder with respect to such Employee in the same manner as
was the Participating Employer from whom the Employee was transferred.
11.5 PARTICIPATING EMPLOYER CONTRIBUTION
Any contribution subject to allocation during each Plan Year shall
be allocated only among those Participants of the Employer or Participating
Employer making the contribution, except if the contribution is made by an
Affiliated Employer, in which event such contribution shall be allocated among
all Participants of all Participating Employers who are Affiliated Employers in
accordance with the provisions of this Plan. On the basis of the information
furnished by the Administrator, the Trustee shall keep separate books and
records concerning the affairs of each Participating Employer hereunder and as
to the accounts and credits of the Employees of each Participating Employer. The
Trustee may, but need not, register Contracts so as to evidence that a
particular Participating Employer is the interested Employer hereunder, but in
the event of an Employee transfer from one Participating Employer to another,
the employing Employer shall immediately notify the Trustee thereof.
11.6 AMENDMENT
Amendment of this Plan by the Employer at any time when there shall
be a Participating Employer hereunder shall only be by the written action of
each and every Participating Employer and with the consent of the Trustee where
such consent is necessary in accordance with the terms of this Plan.
11.7 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 delivered to the Trustee. The Trustee shall thereafter
transfer, deliver and assign Contracts and other Trust Fund assets allocable to
the Participants of such Participating Employer to such new Trustee as shall
have been designated by such Participating Employer, in the event that it has
established a separate pension plan for its Employees, provided however, that no
such transfer shall be made if the result is the elimination or reduction of any
"Section 411(d)(6) protected benefits" in accordance with Section 8.1(c). If no
<PAGE> 78
successor is designated, the Trustee shall retain such assets for the Employees
of said Participating Employer pursuant to the provisions of the Trust. 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 to purposes other than for
the exclusive benefit of the Employees of such Participating Employer.
11.8 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.
<PAGE> 79
IN WITNESS WHEREOF, this Plan has been executed the day and year
first above written.
First Federal Savings Bank of Lake County
By _________________________________
EMPLOYER
ATTEST______________________________
<PAGE> 80
CERTIFICATE OF CORPORATE RESOLUTION
The undersigned Secretary of First Federal Savings Bank of Lake
County (the Corporation) hereby certifies that the following resolutions were
duly adopted by the board of directors of the Corporation on
______________________, and that such resolutions have not been modified or
rescinded as of the date hereof:
RESOLVED, that for purposes of the limitations on contributions and
benefits under the Plan, prescribed by Section 415 of the Internal Revenue Code,
the "limitation year" shall be the Plan Year.
RESOLVED, that not later than the due date (including extensions
hereof) of the Corporation's federal income tax return for each of its fiscal
years hereafter, the Corporation shall contribute to the Plan for each such
fiscal year such amount as shall be determined by the board of directors of the
Corporation and that the Treasurer of the Corporation is authorized and directed
to pay such contribution to the Trustee of the Plan in cash or property and to
designate to the Trustee the year for which such contribution is made.
RESOLVED, that the proper officers of the Corporation shall act as
soon as possible to notify the employees of the Corporation of the adoption of
the Employee Stock Ownership Plan by delivering to each employee a copy of the
summary description of the Plan in the form of the Summary Plan Description
presented to this meeting, which form is hereby approved.
The undersigned further certifies that attached hereto as Exhibits
A, B and C, respectively, are true copies of First Federal Savings Bank of Lake
County Employee Stock Ownership and 401(k) Plan as amended and restated, Summary
Plan Description and Funding Policy and Method approved and adopted in the
foregoing resolutions.
---------------------------
Secretary
---------------------------
Date
<PAGE> 81
FIRST FEDERAL SAVINGS BANK OF LAKE COUNTY
EMPLOYEE STOCK OWNERSHIP AND 401(K) PLAN
FUNDING POLICY AND METHOD
A pension benefit plan (as defined in the Employee Retirement Income
Security Act of 1974) has been adopted by the company for the purpose of
rewarding long and loyal service to the company by providing to employees
additional financial security at retirement. Incidental benefits are provided in
the case of disability, death or other termination of employment.
Since the principal purpose of the plan is to provide benefits at
normal retirement age, the principal goal of the investment of the funds in the
plan should be both security and long-term stability with moderate growth
commensurate with the anticipated retirement dates of participants. Investments,
other than "fixed dollar" investments, should be included among the plan's
investments to prevent erosion by inflation. However, investments should be
sufficiently liquid to enable the plan, on short notice, to make some
distributions in the event of the death or disability of a participant.
