As filed with the Securities and Exchange Commission on June 30, 1999
File No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
--------------
Smithfield Foods, Inc.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
VIRGINIA 52-0845861
<S> <C>
(State or other jurisdiction of Incorporation (I.R.S. Employer Identification No.)
or organization)
</TABLE>
200 Commerce Street, Smithfield Virginia 23430
(757)-365-3000
(Address of principal executive office, including zip code)
PATRICK CUDAHY INCORPORATED
HOURLY 401(K) RETIREMENT PLAN
(Full Title of the Plan)
Aaron D. Trub
Vice President, Chief Financial Officer
and Secretary
Smithfield Foods, Inc.
200 Commerce Street
Smithfield, Virginia 23430
(757) 365-3000
(Name and Address of Agent for Service)
Copies of all communications, including communications sent to agent for
service, should be sent to:
Michael H. Cole, Esq. Sam Young Garrett, Esq.
Corporate Counsel McGuire, Woods, Battle & Boothe LLP
Smithfield Foods, Inc. One James Center
200 Commerce Street 901 East Cary Street
Smithfield, Virginia 23430 Richmond, Virginia 23219
(757) 365-3000 (804) 775-1000
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================
Proposed Proposed
Amount Maximum Maximum
to be Offering Aggregate Amount of
Title of Each Class of Securities Registered Price Per Offering Registration
to be Registered (1) (2) Share Price (1) Fee
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common stock, par value $0.50 per
share ........ 30,888 shs. $ 32.375 $ 1,000,000 $ 278
- --------------------------------------------------------------------------------------------------------------------
Rights to Purchase Series A Junior
Participating Preferred Stock, par
value $1.00 per share(3) N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) Computed in accordance with Rule 457(h) under the Securities Act of 1933, as
amended (the Securities Act), solely for the purpose of calculating the
registration fee.
(2) In addition, pursuant to Rule 416(c) under the Securities Act, this
registration statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the Patrick Cudahy Incorporated Hourly 401(K)
Retirement Plan.
(3) The Rights are to be attached to and trade with the shares of Common Stock.
Value attributable to the Rights, if any, will be reflected in the market price
of the shares of Common Stock.
<PAGE>
PART 1
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION
Not required to be filed.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL
INFORMATION
Not required to be filed.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by Smithfield Foods, Inc. (the
"Company", "Smithfield" or "Smithfield Foods") with the Securities and Exchange
Commission (the "Commission") are incorporated herein by reference and made a
part hereof: (i) Annual Report on Form 10-K for the fiscal year ended May 3,
1998; (ii) Quarterly Reports on Form 10-Q for the periods ended August 2, 1998,
November 1, 1998 and January 31, 1999; and (iii) Current Reports on Form 8-K
filed on September 2, 1997 (as to the "Description of the Company's Capital
Stock" included therein), November 20, 1998, November 24, 1998, December 2,
1998, February 26, 1999 and May 12, 1999.
In addition, all documents filed by Smithfield Foods pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as
amended (the Exchange Act), after the date of the Prospectus and prior to the
filing of a post-effective amendment that indicates that all securities offered
hereby have been sold or that deregisters all such securities then remaining
unsold, shall be deemed to be incorporated by reference into this registration
statement and to be a part hereof from the date of filing such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
Not applicable.
1
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under its Articles of Incorporation, as amended (the
"Smithfield Articles"), the liability of officers and directors to Smithfield is
eliminated to the fullest extent permitted by Virginia law. Under Virginia law,
the liability of an officer or director cannot be limited or eliminated if the
officer or director engages in willful misconduct or a knowing violation of the
criminal law or of any federal or state securities law, including, without
limitation, any claim of unlawful insider trading or manipulation of the market
for any security.
To the fullest extent permitted by Virginia law, the
Smithfield Articles require Smithfield to indemnify any director or officer who
is made party to any proceeding because he or she was or is a director or
officer of Smithfield against any liability, including reasonable expenses and
legal fees, incurred in the proceeding. Under the Smithfield Articles,
"proceeding" is broadly defined to include pending, threatened or completed
actions of all types, including actions by or in the right of Smithfield.
Similarly, "liability" is defined to include not only judgments, but also
settlements, penalties, fines and certain excise taxes. The Smithfield Articles
also provide that it may, but is not obligated to, indemnify its other employees
or agents. Smithfield must indemnify any person who is or was serving at the
written request of Smithfield as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise, to
the full extent provided by Virginia law. The indemnification provisions also
require Smithfield to pay reasonable expenses incurred by a director or officer
of Smithfield in a proceeding in advance of the final disposition of any such
proceeding, provided that the indemnified person undertakes to repay Smithfield
if it is ultimately determined that such person was not entitled to
indemnification. Virginia law does not permit indemnification against willful
misconduct or a knowing violation of the criminal law.
The rights of indemnification provided in the Smithfield
Articles are not exclusive of any other rights which may be available under any
insurance or other agreement, by vote of stockholders or disinterested directors
or otherwise. In addition, the Smithfield Articles authorize Smithfield to
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of Smithfield, whether or not Smithfield
would have the power to provide indemnification to such person, to protect any
such person against any liability arising from his or her service to the
corporation or any other legal entity at the request of the corporation.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
Smithfield pursuant to the foregoing provisions, Smithfield has been informed
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
2
<PAGE>
ITEM 8. EXHIBITS
4.1 Articles of Incorporation of the Company, as amended to date
(incorporated by reference to Exhibit 2 to the Company's
Current Report on Form 8-K filed with the Commission on
September 5, 1997).
4.2 By-Laws of the Company, as amended to date (incorporated by
reference to Exhibit 3 to the Company's Current Report on Form
8-K filed with the Commission on September 5, 1997).
4.3 Form of Certificate representing the Company's Common Stock,
par value $.50 per share (including Rights legend)
(incorporated by reference to Exhibit 6 to the Company's
Current Report on Form 8-K filed with the Commission on
September 5, 1997).
4.4 Form of Certificate representing Rights (incorporated by
reference to Exhibit 5 to the Company's Current Report on Form
8-K filed with the Commission on September 5, 1997).
4.5 Rights Agreement dated as of May 1, 1998, by and between the
Company and Harris Trust and Savings Bank, Rights Agent
(incorporated by reference to Exhibit 4.4 to the Company's
Annual Report on Form 10-K for the fiscal year ended May 3,
1998).
23 Consent of Arthur Andersen LLP (filed herewith).
24 Powers of Attorney (included herein).
99 Patrick Cudahy Incorporated Hourly 401(K) Retirement Plan
(filed herewith).
The undersigned registrant hereby undertakes to submit the
plan and any amendment thereto to the Internal Revenue Service
("IRS") in a timely manner and will make all changes required
by the IRS to qualify the plan.
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
3
<PAGE>
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in the registration statement or any
material change to such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
section 13 or section 15(d) of the Exchange Act that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of this offer.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act of (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 13(d) of the Exchange Act) that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(h) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
4
<PAGE>
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
5
<PAGE>
POWERS OF ATTORNEY
Each person whose signature appears below hereby authorizes each of
Joseph W. Luter, III, Aaron D. Trub and C. Larry Pope as attorney-in-fact, to
sign on his or her behalf individually and in each capacity stated below and to
file all amendments and post-effective amendments to the registration statement,
and the registrant hereby confers like authority to sign and file on its behalf,
with respect to the proposed registration, offer and sale or issuance of its
Common Stock, par value $.50 per share, in connection with the Patrick Cudahy
Incorporated Hourly 401(K) Retirement Plan.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the County of Isle of Wight, Commonwealth of Virginia, on the
29th day of June, 1999.
SMITHFIELD FOODS, INC.
By: /s/Aaron D. Trub
-----------------------------------
Aaron D. Trub
Vice President, Chief Financial Officer
and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/Joseph W. Luter, III Chairman of the Board and Chief June 29,1999
- ----------------------------- Executive Officer
Joseph W. Luter, III
Vice President, Chief Financial June 29,1999
/s/Aaron D. Trub Officer, Secretary and Director
- ------------------------------ (principal financial officer)
Aaron D. Trub
/s/C. Larry Pope Vice President, Finance June 29,1999
- ----------------------------- (principal accounting officer)
C. Larry Pope
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
/s/Robert L. Burrus, Jr.
- -----------------------------
Robert L. Burrus, Jr. Director June 29, 1999
/s/Douglas D. Dodds
- -----------------------------
Douglas D. Dodds Director June 29, 1999
/s/F. J. Faison, Jr.
- -----------------------------
F. J. Faison, Jr. Director June 29, 1999
- -----------------------------
Robert G. Hofmann Director
- -----------------------------
Joel W. Greenberg Director
- -----------------------------
George E. Hamilton, Jr. Director
/s/Richard J. Holland
- -----------------------------
Richard J. Holland Director June 29, 1999
- -----------------------------
Roger R. Kapella Director
/s/Lewis R. Little
- ----------------------------- President, Chief Operating
Lewis R. Little Officer and Director June 29, 1999
/s/William H. Prestage
- -----------------------------
William H. Prestage Director June 29, 1999
- -----------------------------
Joseph B. Sebring Director
/s/Timothy A. Seely
- -----------------------------
Timothy A. Seely Director June 29, 1999
</TABLE>
7
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, the
Company, as plan administrator, has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
County of Isle of Wight, Commonwealth of Virginia, on the 29th day of June,
1999.
PATRICK CUDAHY INCORPORATED
HOURLY 401(K) RETIREMENT PLAN
By: /s/ Aaron D. Trub
------------------------------
Aaron D. Trub
Vice President, Chief Financial
Officer & Secretary
8
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit
- ---------- -------
4.1 Articles of Incorporation of the Company, as amended to date
(incorporated by reference to Exhibit 2 to the Company's Current Report
on Form 8-K filed with the Commission on September 5, 1997).
4.2 By-Laws of the Company, as amended to date (incorporated by reference
to Exhibit 3 to the Company's Current Report on Form 8-K filed with the
Commission on September 5, 1997).
4.3 Form of Certificate representing the Company's Common Stock, par value
$.50 per share (including Rights legend) (incorporated by reference to
Exhibit 6 to the Company's Current Report on Form 8-K filed with the
Commission on September 5, 1997).
4.4 Form of Certificate representing Rights (incorporated by reference to
Exhibit 5 to the Company's Current Report on Form 8-K filed with the
Commission on September 5, 1997).
4.5 Rights Agreement dated as of May 1, 1998, by and between the Company
and Harris Trust and Savings Bank, Rights Agent (incorporated by
reference to Exhibit 4.4 to the Company's Annual Report on Form 10-K
for the fiscal year ended May 3, 1998).
23 Consent of Arthur Andersen LLP (filed herewith).
24 Powers of Attorney (included herein).
99 Patrick Cudahy Incorporated Hourly 401(K) Retirement Plan
(filed herewith).
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated June 10, 1998
included in Smithfield Foods, Inc.'s Form 10-K for the fiscal year ended
May 3, 1998 and to all references to our Firm included in this registration
statement.
Richmond, Virginia ARTHUR ANDERSON LLP
June 28, 1999
PATRICK CUDAHY INCORPORATED
HOURLY 401K RETIREMENT PLAN
Defined Contribution Plan 7.7
<PAGE>
TABLE OF CONTENTS
INTRODUCTION
ARTICLE I FORMAT AND DEFINITIONS
Section 1.01 ----- Format
Section 1.02 ----- Definitions
ARTICLE II PARTICIPATION
Section 2.01 ----- Active Participant
Section 2.02 ----- Inactive Participant
Section 2.03 ----- Cessation of Participation
ARTICLE III CONTRIBUTIONS
Section 3.01 ----- Employer Contributions
Section 3.01A ----- Rollover Contributions
Section 3.02 ----- Allocation
Section 3.03 ----- Contribution Limitation
Section 3.04 ----- Excess Amounts
ARTICLE IV INVESTMENT OF CONTRIBUTIONS
Section 4.01 ----- Investment of Contributions
Section 4.01A ----- Investment in Qualifying Employer Securities
ARTICLE V BENEFITS
Section 5.01 ----- Retirement Benefits
Section 5.02 ----- Death Benefits
Section 5.03 ----- Vested Benefits
Section 5.04 ----- When Benefits Start
Section 5.05 ----- Withdrawal Privileges
Section 5.06 ----- Loans to Participants
ARTICLE VI DISTRIBUTION OF BENEFITS
Section 6.01 ----- Automatic Forms of Distribution
Section 6.02 ----- Optional Forms of Distribution and Distribution
Requirements
Section 6.02A ----- Distributions in Qualifying Employer Securities
Section 6.03 ----- Election Procedures
Section 6.04 ----- Notice Requirements
ARTICLE VII TERMINATION OF PLAN
3
<PAGE>
ARTICLE VIII ADMINISTRATION OF PLAN
Section 8.01 ----- Administration
Section 8.02 ----- Records
Section 8.03 ----- Information Available
Section 8.04 ----- Claim and Appeal Procedures
Section 8.05 ----- Unclaimed Vested Account Procedure
Section 8.06 ----- Delegation of Authority
ARTICLE IX GENERAL PROVISIONS
Section 9.01 ----- Amendments
Section 9.02 ----- Direct Rollovers
Section 9.03 ----- Mergers and Direct Transfers
Section 9.04 ----- Provisions Relating to the Insurer and Other
Parties
Section 9.05 ----- Employment Status
Section 9.06 ----- Rights to Plan Assets
Section 9.07 ----- Beneficiary
Section 9.08 ----- Nonalienation of Benefits
Section 9.09 ----- Construction
Section 9.10 ----- Legal Actions
Section 9.11 ----- Small Amounts
Section 9.12 ----- Word Usage
Section 9.13 ----- Transfers Between Plans
Section 9.14 ----- Qualification of Plan
PLAN EXECUTION
4
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INTRODUCTION
The Primary Employer is establishing a defined contribution 401(k)
savings plan for the exclusive benefit of certain of its employees.
It is intended that the plan qualify as a profit sharing plan under the
Internal Revenue Code of 1986, including any later amendments to the Code. The
Employer agrees to operate the plan according to the terms, provisions and
conditions set forth in this document.
5
<PAGE>
ARTICLE I
FORMAT AND DEFINITIONS
SECTION 1.01--FORMAT.
Words and phrases defined in the DEFINITIONS SECTION of Article I shall
have that defined meaning when used in this Plan, unless the context clearly
indicates otherwise.
These words and phrases have an initial capital letter to aid in
identifying them as defined terms.
SECTION 1.02--DEFINITIONS.
ACCOUNT means, for a Participant, his share of the Investment Fund and
Qualifying Employer Securities Fund. Separate accounting records are
kept for those parts of his Account that result from:
(a) Elective Deferral Contributions
(b) Rollover Contributions
A Participant's Account shall be reduced by any distribution of his
Vested Account. A Participant's Account will participate in the earnings
credited, expenses charged and any appreciation or depreciation of the
Investment Fund. His Account is subject to any minimum guarantees
applicable under the Group Contract or other investment arrangement.
ACTIVE PARTICIPANT means an Eligible Employee who is actively
participating in the Plan according to the provisions in the ACTIVE
PARTICIPANT SECTION of Article II.
AFFILIATED SERVICE GROUP means any group of corporations, partnerships
or other organizations of which the Employer is a part and which is
affiliated within the meaning of Code Section 414(m) and regulations
thereunder. Such a group includes at least two organizations one of
which is either a service organization (that is, an organization the
principal business of which is performing services), or an organization
the principal business of which is performing management functions on a
regular and continuing basis. Such service is of a type historically
performed by employees. In the case of a management organization, the
Affiliated Service Group shall include organizations related, within the
meaning of Code Section 144(a)(3), to either the management organization
or the organization for which it performs management functions. The term
Controlled Group, as it is used in this Plan, shall include the term
Affiliated Service Group.
ANNUAL COMPENSATION means, on any given date, the Employee's
Compensation for the latest Compensation Year ending on or before the
given date.
ANNUITY STARTING DATE means, for a Participant, the first day of the
first period for which an amount is payable as an annuity or any other
form.
BENEFICIARY means the person or persons named by a Participant to
receive any benefits under this Plan upon the Participant's death. See
the BENEFICIARY SECTION of Article IX.
CLAIMANT means any person who has made a claim for benefits under this
Plan. See the CLAIM AND APPEAL PROCEDURES SECTION of Article VIII.
6
<PAGE>
CODE means the Internal Revenue Code of 1986, as amended.
COMPENSATION means, except as modified in this definition, the total
earnings paid or made available to an Employee by the Employer during
any specified period.
"Earnings" in this definition means Compensation as defined in the
CONTRIBUTION LIMITATION SECTION of Article III.
Compensation shall exclude reimbursements or other expense allowances,
fringe benefits (cash and noncash), moving expenses, deferred
compensation and welfare benefits. Compensation shall also include
elective contributions. Elective contributions are amounts excludable
from the Employee's gross income under Code Sections 125, 402(e)(3),
402(h) or 403(b), and contributed by the Employer, at the Employee's
election, to a Code Section 401(k) arrangement, a simplified employee
pension, cafeteria plan or tax-sheltered annuity. Elective contributions
also include Compensation deferred under a Code Section 457 plan
maintained by the Employer and Employee contributions "picked up" by a
governmental entity and, pursuant to Code Section 414(h)(2), treated as
Employer contributions.
For purposes of the EXCESS AMOUNTS SECTION of Article III, the Employer
may elect to use an alternative nondiscriminatory definition of
Compensation in accordance with the regulations under Code Section
414(s).
For purposes of determining the amount of Elective Deferral
Contributions, Compensation shall exclude reimbursements or other
expense allowances, fringe benefits (cash and noncash), moving expenses,
deferred compensation and welfare benefits.
For Plan Years beginning after December 31, 1988, and before January 1,
1994, the annual Compensation of each Participant taken into account for
determining all benefits provided under the Plan for any year shall not
exceed $200,000. For Plan Years beginning on or after January 1, 1994,
the annual Compensation of each Participant taken into account for
determining all benefits provided under the Plan for any year shall not
exceed $150,000.
The $200,000 limit shall be adjusted by the Secretary at the same time
and in the same manner as under Code Section 415(d). The $150,000 limit
shall be adjusted by the Commissioner for increases in the cost of
living in accordance with Code Section 401(a)(17)(B). The cost of living
adjustment in effect for a calendar year applies to any period, not
exceeding 12 months, over which pay is determined (determination period)
beginning in such calendar year. If a determination period consists of
fewer than 12 months, the annual compensation limit will be multiplied
by a fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is 12.
In determining the Compensation of a Participant for purposes of the
annual compensation limit, the rules of Code Section 414(q)(6) shall
apply, except that in applying such rules, the term "family" shall
include only the spouse of the Participant and any lineal descendants of
the Participant who have not attained age 19 before the close of the
year. If, as a result of the application of such rules the adjusted
annual compensation limit is exceeded, then (except for purposes of
determining the portion of Compensation up to the integration level if
this Plan provides for permitted disparity) the limitation shall be
prorated among the affected individuals in proportion to each such
individual's Compensation as determined under this definition prior to
the application of this limitation.
If Compensation for any prior determination period is taken into account
in determining a Participant's benefits accruing in the current Plan
Year, the Compensation for that prior determination period is subject to
the annual compensation limit in effect for that prior determination
period. For this purpose, for determination periods
7
<PAGE>
beginning before the first day of the first Plan Year beginning on or
after January 1, 1989, which are used to determine benefits in Plan
Years beginning after December 31, 1988 and before January 1, 1994, the
annual compensation limit is $200,000. For this purpose, for
determination periods beginning before the first day of the first Plan
Year beginning on or after January 1, 1994, which are used to determine
benefits in Plan Years beginning on or after January 1, 1994, the annual
compensation limit is $150,000.
Compensation means, for an Employee who is a Leased Employee, the
Employee's Compensation for the services he performs for the Employer,
determined in the same manner as the Compensation of Employees who are
not Leased Employees, regardless of whether such Compensation would be
received directly from the Employer or from the leasing organization.
COMPENSATION YEAR means each one-year period ending on the last day of
the Plan Year, including corresponding periods before July 1, 1999.
CONTINGENT ANNUITANT means an individual named by the Participant to
receive a lifetime benefit after the Participant's death in accordance
with a survivorship life annuity.
CONTRIBUTIONS means Elective Deferral Contributions as set out in
Article III.
Elective Deferral Contributions
Rollover Contributions
as set out in Article III, unless the context clearly indicates
otherwise.
CONTROLLED GROUP means any group of corporations, trades or businesses
of which the Employer is a part that are under common control. A
Controlled Group includes any group of corporations, trades or
businesses, whether or not incorporated, which is either a
parent-subsidiary group, a brother-sister group, or a combined group
within the meaning of Code Section 414(b), Code Section 414(c) and
regulations thereunder and, for purposes of determining contribution
limitations under the CONTRIBUTION LIMITATION SECTION of Article III, as
modified by Code Section 415(h) and, for the purpose of identifying
Leased Employees, as modified by Code Section 144(a)(3). The term
Controlled Group, as it is used in this Plan, shall include the term
Affiliated Service Group and any other employer required to be
aggregated with the Employer under Code Section 414(o) and the
regulations thereunder.
DIRECT ROLLOVER means a payment by the Plan to the Eligible Retirement
Plan specified by the Distributee.
DISTRIBUTEE means an Employee or former Employee. In addition, the
Employee's or former Employee's surviving spouse and the Employee's or
former Employee's spouse or former spouse who is the alternate payee
under a qualified domestic relations order, as defined in Code Section
414(p), are Distributees with regard to the interest of the spouse or
former spouse.
ELECTIVE DEFERRAL CONTRIBUTIONS means Contributions made
by the Employer to fund this Plan in accordance with a qualified cash or
deferred arrangement as described in Code Section 401(k). See the
EMPLOYER CONTRIBUTIONS SECTION of Article III.
ELIGIBILITY BREAK IN SERVICE means an Eligibility Computation Period in
which an Employee is credited with 500 or fewer Hours-of-Service. An
Employee incurs an Eligibility Break in Service on the last day of an
Eligibility Computation Period in which he has an Eligibility Break in
Service.
8
<PAGE>
ELIGIBILITY COMPUTATION PERIOD means a 12-consecutive month period. The
first Eligibility Computation Period begins on an Employee's Employment
Commencement Date. Later Eligibility Computation Periods begin on
anniversaries of his Employment Commencement Date.
To determine an Eligibility Computation Period after an Eligibility
Break in Service, the Plan shall use the 12-consecutive month period
beginning on an Employee's Reemployment Commencement Date as if his
Reemployment Commencement Date were his Employment Commencement Date.
ELIGIBILITY SERVICE means one year of service for each Eligibility
Computation Period that has ended and in which an Employee is credited
with at least 1,000 Hours-of-Service.
However, Eligibility Service is modified as follows:
Period of Military Duty included:
A Period of Military Duty shall be included as service with the
Employer to the extent it has not already been credited. For
purposes of crediting Hours-of-Service during the Period of
Military Duty, an Hour-of-Service shall be credited (without
regard to the 501 Hour-of-Service limitation) for each hour an
Employee would normally have been scheduled to work for the
Employer during such period.
Controlled Group service included:
An Employee's service with a member firm of a Controlled Group
while both that firm and the Employer were members of the
Controlled Group shall be included as service with the Employer.
ELIGIBLE EMPLOYEE means any Employee of the Employer who meets the
following requirement. His employment classification with the Employer
is the following:
Represented for collective bargaining purposes by UFC Local 73A.
ELIGIBLE RETIREMENT PLAN means an individual retirement account
described in Code Section 408(a), an individual retirement annuity
described in Code Section 408(b), an annuity plan described in Code
Section 403(a) or a qualified trust described in Code Section 401(a),
that accepts the Distributee's Eligible Rollover Distribution.
However, in the case of an Eligible Rollover Distribution to the
surviving spouse, an Eligible Retirement Plan is an individual
retirement account or individual retirement annuity.
ELIGIBLE ROLLOVER DISTRIBUTION means any distribution of all or any
portion of the balance to the credit of the Distributee, except that an
Eligible Rollover Distribution does not include:
(a) Any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the Distributee or the joint
lives (or joint life expectancies) of the Distributee and the
Distributee's designated Beneficiary, or for a specified period
of ten years or more.
(b) Any distribution to the extent such distribution is required
under Code Section 401(a)(9).
(c) The portion of any distribution that is not includible in gross
income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities).
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EMPLOYEE means an individual who is employed by the Employer or any
other employer required to be aggregated with the Employer under Code
Sections 414(b), (c), (m) or (o). A Controlled Group member is required
to be aggregated with the Employer.
The term Employee shall also include any Leased Employee deemed to be an
employee of any employer described in the preceding paragraph as
provided in Code Sections 414(n) or 414(o).
EMPLOYER means the Primary Employer. This will also include any
successor corporation or firm of the Employer which shall, by written
agreement, assume the obligations of this Plan or any predecessor
corporation or firm of the Employer (absorbed by the Employer, or of
which the Employer was once a part) which became a predecessor because
of a change of name, merger, purchase of stock or purchase of assets and
which maintained this Plan.
EMPLOYER CONTRIBUTIONS means Elective Deferral Contributions as set out
in Article III.
EMPLOYMENT COMMENCEMENT DATE means the date an Employee first performs
an Hour-of-Service.
ENTRY DATE means the date an Employee first enters the Plan as an Active
Participant. See the ACTIVE PARTICIPANT SECTION of Article II.
FISCAL YEAR means the Primary Employer's taxable year. The last day of
the Fiscal Year is April 30.
GROUP CONTRACT means the group annuity contract or contracts into which
the Primary Employer enters with the Insurer for the investment of
Contributions and the payment of benefits under this Plan. The term
Group Contract as it is used in this Plan is deemed to include the
plural unless the context clearly indicates otherwise.
HIGHLY COMPENSATED EMPLOYEE means a highly compensated active Employee
or a highly compensated former Employee.
A highly compensated active Employee means any Employee who performs
service for the Employer during the determination year and who, during
the look-back year is:
(a) An Employee who is a 5% owner, as defined in Section
416(i)(1)(B)(i), at any time during the determination year or the
look-back year.
(b) An Employee who receives compensation in excess of $75,000
(indexed in accordance with Section 415(d) during
the look-back year.
(c) An Employee who receives compensation in excess of $50,000
(indexed in accordance with Section 415(d) during the look-back
year and is a member of the top-paid group for the look-back
year.
(d) An Employee who is an officer, within the meaning of Section
416(i), during the look-back year and who receives compensation
in the look-back year greater than 50% of the dollar limitation
in effect under Section 415(b)(1)(A) for the calendar year in
which the look-back year begins. The number of officers is
limited to 50 (or, if lesser, the greater of 3 employees or 10%
of employees) excluding those employees who may be excluded in
determining the top-paid group.
(e) An Employee who is both described in paragraph b, c or d above
when these paragraphs are modified to substitute the
determination year for the look-back year and one of the 100
Employees who receive the most compensation from the Employer
during the determination year.
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If no officer has satisfied the compensation requirement of (c) above
during either a determination year or look-back year, the highest paid
officer for such year shall be treated as a Highly Compensated Employee.
For this purpose, the determination year shall be the Plan Year. The
look-back year shall be the twelve-month period immediately preceding
the determination year.
A highly compensated former Employee means any Employee who separated
from service (or was deemed to have separated) prior to the
determination year, performs no service for the Employer during the
determination year, and was a highly compensated active Employee for
either the separation year or any determination year ending on or after
the Employee's 55th birthday.
If an Employee is, during a determination year or look-back year, a
family member of either a 5 percent owner who is an active or former
Employee or a Highly Compensated Employee who is one of the 10 most
highly compensated Employees ranked on the basis of compensation paid by
the Employer during such year, then the family member and the 5 percent
owner or top-ten highly compensated Employee shall be aggregated. In
such case, the family member and 5 percent owner or top-ten highly
compensated Employee shall be treated as a single Employee receiving
compensation and Plan contributions or benefits equal to the sum of such
compensation and contributions or benefits of the family member and 5
percent owner or top-ten highly compensated Employee. For purposes of
this definition, family member includes the spouse, lineal ascendants
and descendants of the Employee or former Employee and the spouses of
such lineal ascendants and descendants.
Compensation is compensation within the meaning of Code Section
415(c)(3), including elective or salary reduction contributions to a
cafeteria plan, cash or deferred arrangement or tax-sheltered annuity.
The top-paid group consists of the top 20% of employees ranked on the
basis of compensation received during the year.
Employers aggregated under Section 414(b), (c), (m) or (o) are treated
as a single Employer.
HOUR-OF-SERVICE means the following:
(a) Each hour for which an Employee is paid, or entitled to payment,
for performing duties for the Employer during the applicable
computation period.
(b) Each hour for which an Employee is paid, or entitled to payment,
by the Employer because of a period of time in which no duties
are performed (irrespective of whether the employment
relationship has terminated) due to vacation, holiday, illness,
incapacity (including disability), layoff, jury duty, military
duty or leave of absence. Notwithstanding the preceding
provisions of this subparagraph (b), no credit will be given to
the Employee
(1) for more than 501 Hours-of-Service under this subparagraph
(b) because of any single continuous period in which the
Employee performs no duties (whether or not such period
occurs in a single computation period); or
(2) for an Hour-of-Service for which the Employee is directly
or indirectly paid, or entitled to payment, because of a
period in which no duties are performed if such payment is
made or due under a plan maintained solely for the purpose
of complying with applicable worker's or workmen's
compensation, or unemployment compensation or disability
insurance laws; or
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(3) for an Hour-of-Service for a payment which solely
reimburses the Employee for medical or medically related
expenses incurred by him.
For purposes of this subparagraph (b), a payment shall be deemed
to be made by, or due from the Employer, regardless of whether
such payment is made by, or due from the Employer, directly or
indirectly through, among others, a trust fund or insurer, to
which the Employer contributes or pays premiums and regardless of
whether contributions made or due to the trust fund, insurer or
other entity are for the benefit of particular employees or are
on behalf of a group of employees in the aggregate.
(c) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The same
Hours-of-Service shall not be credited both under subparagraph
(a) or subparagraph (b) above (as the case may be) and under this
subparagraph (c). Crediting of Hours-of-Service for back pay
awarded or agreed to with respect to periods described in
subparagraph (b) above will be subject to the limitations set
forth in that subparagraph.
The crediting of Hours-of-Service above shall be applied under the rules
of paragraphs (b) and (c) of the Department of Labor Regulation
2530.200b-2 (including any interpretations or opinions implementing said
rules); which rules, by this reference, are specifically incorporated in
full within this Plan. The reference to paragraph (b) applies to the
special rule for determining hours of service for reasons other than the
performance of duties such as payments calculated (or not calculated) on
the basis of units of time and the rule against double credit. The
reference to paragraph (c) applies to the crediting of hours of service
to computation periods.
Hours-of-Service shall be credited for employment with any other
employer required to be aggregated with the Employer under Code Sections
414(b), (c), (m) or (o) and the regulations thereunder for purposes of
eligibility and vesting. Hours-of-Service shall also be credited for any
individual who is considered an employee for purposes of this Plan
pursuant to Code Section 414(n) or Code Section 414(o) and the
regulations thereunder. Solely for purposes of determining whether a
one-year break in service has occurred for eligibility or vesting
purposes, during a Parental Absence an Employee shall be credited with
the Hours-of-Service which otherwise would normally have been credited
to the Employee but for such absence, or in any case in which such hours
cannot be determined, eight Hours-of-Service per day of such absence.
The Hours-of-Service credited under this paragraph shall be credited in
the computation period in which the absence begins if the crediting is
necessary to prevent a break in service in that period; or in all other
cases, in the following computation period.
INACTIVE PARTICIPANT means a former Active Participant who has an
Account. See the INACTIVE PARTICIPANT SECTION of Article II.
INSURER means Principal Life Insurance Company and any other insurance
company or companies named by the Primary Employer.
INVESTMENT FUND means the assets held for the purpose of providing
benefits for Participants. These funds result from Contributions made
under the Plan.
INVESTMENT MANAGER means any fiduciary (other than a trustee or Named
Fiduciary)
(a) who has the power to manage, acquire, or dispose of any assets
of the Plan; and
(b) who (1) is registered as an investment adviser under the
Investment Advisers Act of 1940, or (2) is a bank, as defined in
the Investment Advisers Act of 1940, or (3) is an insurance
company qualified to perform services described in subparagraph
(a) above under the laws of more than one state; and
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<PAGE>
(c) who has acknowledged in writing being a fiduciary with respect to
the Plan.
LATE RETIREMENT DATE means the first day of any month which is after a
Participant's Normal Retirement Date and on which retirement benefits
begin. If a Participant continues to work for the Employer after his
Normal Retirement Date, his Late Retirement Date shall be the earliest
first day of the month on or after he ceases to be an Employee. An
earlier or a later Retirement Date may apply if the Participant so
elects. An earlier Retirement Date may apply if the Participant is age
70 1/2. See the WHEN BENEFITS START SECTION of Article V.
LEASED EMPLOYEE means any person (other than an employee of the
recipient) who pursuant to an agreement between the recipient and any
other person ("leasing organization") has performed services for the
recipient (or for the recipient and related persons determined in
accordance with Code Section 414(n)(6)) on a substantially full time
basis for a period of at least one year, and such services are of a type
historically performed by employees in the business field of the
recipient employer. Contributions or benefits provided a Leased Employee
by the leasing organization which are attributable to service performed
for the recipient employer shall be treated as provided by the recipient
employer.
A Leased Employee shall not be considered an employee of the recipient
if:
(a) such employee is covered by a money purchase pension plan
providing (1) a nonintegrated employer contribution rate of at
least 10 percent of compensation, as defined in Code Section
415(c)(3), but including amounts contributed pursuant to a salary
reduction agreement which are excludable from the employee's
gross income under Code Sections 125, 402(e)(3), 402(h) or
403(b), (2) immediate participation, and (3) full and immediate
vesting and
(b) Leased Employees do not constitute more than 20 percent of the
recipient's nonhighly compensated workforce.
LOAN ADMINISTRATOR means the person or positions authorized to
administer the Participant loan program.
The Loan Administrator is Vice President - Human Resources.
NAMED FIDUCIARY means the person or persons who have authority to
control and manage the operation and administration of the Plan.
The Named Fiduciary is the Employer.
NET PROFITS means the Employer's net income or profits for the Fiscal
Year, determined in accordance with generally accepted accounting
practices, before any contribution made by the Employer under this Plan
and before any deduction for Federal or state income tax, dividends on
the Employer's stock and capital gains or losses.
NONHIGHLY COMPENSATED EMPLOYEE means an Employee of the Employer who is
neither a Highly Compensated Employee nor a family member.
NORMAL FORM means a single life annuity with installment refund.
NORMAL RETIREMENT AGE means the age at which the Participant's normal
retirement benefit becomes nonforfeitable. A Participant's Normal
Retirement Age is 65.
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NORMAL RETIREMENT DATE means the earliest first day of the month on or
after the date the Participant reaches his Normal Retirement Age. Unless
otherwise provided in this Plan, a Participant's retirement benefits
shall begin on a Participant's Normal Retirement Date if he has ceased
to be an Employee on such date and has a Vested Account. Even if the
Participant is an Employee on his Normal Retirement Date, he may choose
to have his retirement benefit begin on such date. An earlier Retirement
Date may apply if the Participant is age 70 1/2. See the WHEN BENEFITS
START SECTION of Article V.
PARENTAL ABSENCE means an Employee's absence from work which begins on
or after the first Yearly Date after December 31, 1984,
(a) by reason of pregnancy of the Employee,
(b) by reason of birth of a child of the Employee,
(c) by reason of the placement of a child with the Employee in
connection with adoption of such child by such Employee, or
(d) for purposes of caring for such child for a period beginning
immediately following such birth or placement.
PARTICIPANT means either an Active Participant or an Inactive
Participant.
PERIOD OF MILITARY DUTY means, for an Employee
(a) who served as a member of the armed forces of the United States,
and
(b) who was reemployed by the Employer at a time when the Employee
had a right to reemployment in accordance with seniority rights
as protected under Section 2021 through 2026 of Title 38 of the
U. S. Code,
the period of time from the date the Employee was first absent from
active work for the Employer because of such military duty to the date
the Employee was reemployed.
PLAN means the 401(k) savings plan of the Employer set forth in this
document, including any later amendments to it.
PLAN ADMINISTRATOR means the person or persons who administer the Plan.
The Plan Administrator is the Employer.
PLAN YEAR means a period beginning on a Yearly Date and ending on the
day before the next Yearly Date.
PRIMARY EMPLOYER means Patrick Cudahy Incorporated.
QUALIFIED JOINT AND SURVIVOR FORM means, for a Participant who has a
spouse, an immediate survivorship life annuity with installment refund,
where the survivorship percentage is 50% and the Contingent Annuitant is
the Participant's spouse. A former spouse will be treated as the spouse
to the extent provided under a qualified domestic relations order as
described in Code Section 414(p). If a Participant does not have a
spouse, the Qualified Joint and Survivor Form means the Normal Form.
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The amount of benefit payable under the Qualified Joint and Survivor
Form shall be the amount of benefit which may be provided by the
Participant's Vested Account.
QUALIFIED PRERETIREMENT SURVIVOR ANNUITY means a single life annuity
with installment refund payable to the surviving spouse of a Participant
who dies before his Annuity Starting Date. A former spouse will be
treated as the surviving spouse to the extent provided under a qualified
domestic relations order as described in Code Section 414(p).
QUALIFYING EMPLOYER SECURITIES means any instrument issued by the
Employer and meeting the requirements of Section 4975(e)(8) of the Code
and Section 407(d)(5) of the Employee Retirement Income Securities Act
of 1974, as amended (`ERISA').
QUALIFYING EMPLOYER SECURITIES FUND means the assets held in Qualifying
Employer Securities for the purpose of providing benefits for
Participants. This fund results from Contributions made under the Plan.
QUARTERLY DATE means each Yearly Date and the third, sixth and ninth
Monthly Date after each Yearly Date which is within the same Plan Year.
REEMPLOYMENT COMMENCEMENT DATE means the date an Employee first performs
an Hour-of-Service following an Eligibility Break in Service.
REENTRY DATE means the date a former Active Participant reenters the
Plan. See the ACTIVE PARTICIPANT SECTION of Article II.
RETIREMENT DATE means the date a retirement benefit will begin and is a
Participant's Normal or Late Retirement Date, as the case may be.
ROLLOVER CONTRIBUTIONS means the Rollover Contributions which are made
by or for a Participant according to the provisions of the ROLLOVER
CONTRIBUTIONS SECTION of Article III.
TEFRA means the Tax Equity and Fiscal Responsibility Act of 1982.
TEFRA COMPLIANCE DATE means the date a plan is to comply with the
provisions of TEFRA. The TEFRA Compliance Date as used in this Plan is,
(a) for purposes of contribution limitations, Code Section 415,
(1) if the plan was in effect on July 1, 1982, the first day
of the first limitation year which begins after
December 31, 1982, or
(2) if the plan was not in effect on July 1, 1982, the
first day of the first limitation year which ends
after July 1, 1982.
(b) for all other purposes, the first Yearly Date after December 31,
1983.
TOTALLY AND PERMANENTLY DISABLED means that a Participant is disabled,
as a result of sickness or injury, to the extent that he is prevented
from engaging in any substantial gainful activity, and is eligible for
and receives a disability benefit under Title II of the Federal Social
Security Act.
TRUST means an agreement of trust between the Primary Employer and
Trustee established for the purpose of holding and distributing the
Trust Fund under the provisions of the Plan. The Trust may provide for
the investment of all or any portion of the Trust Fund in the Group
Contract.
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TRUST FUND means the total funds held under the Trust for the purpose of
providing benefits for Participants. These funds result from
Contributions made under the Plan which are forwarded to the Trustee to
be deposited in the Trust Fund.
TRUSTEE means the trustee or trustees under the Trust. The term Trustee
as it is used in this Plan is deemed to include the plural unless the
context clearly indicates otherwise.
VESTED ACCOUNT means the vested part of a Participant's Account.
The Participant's Vested Account is equal to his Account.
The Participant's Vested Account is nonforfeitable. The percentage used
to determine that portion of a Participant's Account attributable to
Employer Contributions which is nonforfeitable is 100%.
VALUATION DATE means the date on which the value of the assets of the
Trust is determined. The value of each Account which is maintained under
this Plan shall be determined on the Valuation Date. In each Plan Year,
the Valuation Date shall be the last day of the Plan Year. In addition,
the Plan Administrator may designate from time to time, so long as the
Trustee agrees, that another date or dates shall be Valuation Dates with
respect to a specific Plan Year.
YEARLY DATE means July 1, 1999, and the same day of each following year.
YEARS OF SERVICE means an Employee's Period of Service. If he has more
than one Period of Service or if all or a part of a Period of Service is
not counted, his Years of Service shall be determined by adjusting his
Employment Commencement Date so that he has one continuous period of
Years of Service equal to the aggregate of all his countable Periods of
Service. This period of Years of Service shall be expressed as whole
years and fractional parts of a year (to two decimal places) on the
basis that 365 days equal one year.
However, Years of Service is modified as follows:
Period of Military Duty included:
A Period of Military Duty shall be included as service with the
Employer to the extent it has not already been credited.
Period of Severance included (service spanning rule):
A Period of Severance shall be deemed to be a Period of Service
under either of the following conditions:
(a) the Period of Severance immediately follows a period
during which an Employee is not absent from work and ends
within 12 months; or
(b) the Period of Severance immediately follows a period
during which an Employee is absent from work for any
reason other than quitting, being discharged or retiring
(such as a leave of absence or layoff) and ends within 12
months of the date he was first absent.
Controlled Group service included:
An Employee's service with a member firm of a Controlled Group
while both that firm and the Employer were members of the
Controlled Group shall be included as service with the Employer.
16
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17
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ARTICLE II
PARTICIPATION
SECTION 2.01--ACTIVE PARTICIPANT.
(a) An Employee shall first become an Active Participant (begin active
participation in the Plan) on the earliest Quarterly Date on or after
July 1, 1999, on which he is an Eligible Employee and has met both of
the eligibility requirements set forth below. This date is his Entry
Date.
(1) He has completed one year of Eligibility Service before his
Entry Date.
(2) He is age 21 or older.
If a person has been an Eligible Employee who has met all the
eligibility requirements above, but is not an Eligible Employee
on the date which would have been his Entry Date, he shall become
an Active Participant on the date he again becomes an Eligible
Employee. This date is his Entry Date.
(b) An Inactive Participant shall again become an Active Participant
(resume active participation in the Plan) on the date he again
performs an Hour-of-Service as an Eligible Employee. This date is
his Reentry Date.
Upon again becoming an Active Participant, he shall cease to be
an Inactive Participant.
(c) A former Participant shall again become an Active Participant
(resume active participation in the Plan) on the date he again
performs an Hour-of-Service as an Eligible Employee. This date is
his Reentry Date.
There shall be no duplication of benefits for a Participant under this
Plan because of more than one period as an Active Participant.
SECTION 2.02--INACTIVE PARTICIPANT.
An Active Participant shall become an Inactive Participant (stop
accruing benefits under the Plan) on the earlier of the following:
(a) The date on which he ceases to be an Eligible Employee (on his
Retirement Date if the date he ceases to be an Eligible Employee
occurs within one month of his Retirement Date).
(b) The effective date of complete termination of the Plan.
SECTION 2.03--CESSATION OF PARTICIPATION.
A Participant shall cease to be a Participant on the date he is no
longer an Eligible Employee and his Account is zero.
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ARTICLE III
CONTRIBUTIONS
SECTION 3.01--EMPLOYER CONTRIBUTIONS.
Employer Contributions are conditioned on initial qualification of the
Plan. If the Plan is denied initial qualification, the provisions of the
QUALIFICATION OF PLAN SECTION of Article IX shall apply.
Employer Contributions for Plan Years which end on or after July 1,
1999, may be made without regard to current or accumulated net income, earnings,
or profits of the Employer. Notwithstanding the foregoing, the Plan shall
continue to be designed to qualify as a profit sharing plan for purposes of Code
Sections 401(a), 402, 412, and 417. Such Contributions will be equal to the
Employer Contributions as described below:
(a) The amount of each Elective Deferral Contribution for a
Participant shall be equal to any whole percentage (not more than
20%) of his Compensation for the pay period as elected in his
elective deferral agreement. An Employee who is eligible to
participate in the Plan may file an elective deferral agreement
with the Employer. The elective deferral agreement to start
Elective Deferral Contributions may be effective on a
Participant's Entry Date (Reentry Date, if applicable) or any
following Quarterly Date. The Participant shall make any change
or terminate the elective deferral agreement by filing a new
elective deferral agreement. A Participant's elective deferral
agreement making a change may be effective on any date an
elective deferral agreement to start Elective Deferral
Contributions could be effective. A Participant's elective
deferral agreement to stop Elective Deferral Contributions may be
effective on any date. The elective deferral agreement must be in
writing and completed before the beginning of the pay period in
which Elective Deferral Contributions are to start, change or
stop.
Elective Deferral Contributions are fully (100%) vested and
nonforfeitable.
No Participant shall be permitted to have Elective Deferral
Contributions, as defined in the EXCESS AMOUNTS SECTION of Article III, made
under this Plan, or any other qualified plan maintained by the Employer, during
any taxable year, in excess of the dollar limitation contained in Code Section
402(g) in effect at the beginning of such taxable year.
The Employer shall pay to the Insurer its Contributions used to
determine the Actual Deferral Percentage, as defined in the EXCESS AMOUNTS
SECTION of Article III, to the Plan for each Plan Year not later than the end of
the twelve-month period immediately following the Plan Year for which they are
deemed to be paid. Any such Contributions accumulated through payroll deductions
shall be paid within 90 days of the date withheld or the date it is first
reasonably practical for the Employer to do so, if earlier.
A portion of the Plan assets resulting from Employer Contributions (but
not more than the original amount of those Contributions and reduced
proportionately for losses, if applicable) may be returned if the Employer
Contributions are made because of a mistake of fact or are more than the amount
deductible under Code Section 404 (excluding any amount which is not deductible
because the Plan is disqualified). The amount involved must be returned to the
Employer within one year after the date the Employer Contributions are made by
mistake of fact or the date the deduction is disallowed, whichever applies.
Except as provided under this paragraph and Articles VII and IX, the assets of
the Plan shall never be used for the benefit of the Employer and are held for
the exclusive purpose of providing benefits to Participants and their
Beneficiaries and for defraying reasonable expenses of administering the Plan.
SECTION 3.01A--ROLLOVER CONTRIBUTIONS.
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A Rollover Contribution may be made by or for an Eligible Employee if
the following conditions are met:
(a) The Contribution is a rollover contribution which the Code
permits to be transferred to a plan that meets the requirements
of Code Section 401(a).
(b) If the Contribution is made by the Eligible Employee, it is made
within sixty days after he receives the distribution.
(c) The Eligible Employee furnishes evidence satisfactory to the Plan
Administrator that the proposed transfer is in fact a rollover
contribution that meets conditions (a) and (b) above.
The Rollover Contribution may be made by the Eligible Employee or the
Eligible Employee may direct the trustee or named fiduciary of another plan to
transfer the funds which would otherwise be a Rollover Contribution directly to
this Plan. Such transferred funds shall be called a Rollover Contribution. The
Contribution shall be made according to procedures set up by the Plan
Administrator.
If the Eligible Employee is not an Active Participant at the time the
Rollover Contribution is made, he shall be deemed to be a Participant only for
the purposes of investment and distribution of the Rollover Contribution. He
shall not share in the allocation of Employer Contributions No Employer
Contributions shall be made for him until the time he meets all the requirements
to become an Active Participant.
Rollover Contributions made by or for an Eligible Employee shall be
credited to his Account. The part of the Participant's Account resulting from
Rollover Contributions is fully (100%) vested and nonforfeitable at all times. A
separate accounting record shall be maintained for that part of his Rollover
Contribution which consists of voluntary contributions that were deducted from
the Participant's gross income for Federal income tax purposes.
SECTION 3.02--ALLOCATION.
The following Contributions for each Plan Year shall be allocated to
each Participant for whom such Contributions were made under the EMPLOYER
CONTRIBUTIONS SECTION of Article III:
Elective Deferral Contributions
These Contributions shall be allocated when made and credited to the
Participant's Account.
In determining the amount of Employer Contributions to be allocated to a
Participant who is a Leased Employee, contributions and benefits provided by the
leasing organization which are attributable to services such Leased Employee
performs for the Employer shall be treated as provided by the Employer and there
shall be no duplication of those contributions or benefits under this Plan.
SECTION 3.03--CONTRIBUTION LIMITATION.
(a) For the purpose of determining the contribution limitation set
forth in this section, the following terms are defined:
Aggregate Annual Addition means, for a Participant with respect
to any Limitation Year, the sum of his Annual Additions under all
defined contribution plans of the Employer, as defined in this
section, for such Limitation Year. The nondeductible participant
contributions which the Participant makes to a defined benefit
plan shall be treated as Annual Additions to a defined
contribution plan. The Contributions the Employer, as defined in
this section, made for the Participant for a Plan Year
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beginning on or after March 31, 1984, to an individual medical
benefit account, as defined in Code Section 415(l)(2), under a
pension or annuity plan of the Employer, as defined in this
section, shall be treated as Annual Additions to a defined
contribution plan. Also, amounts derived from contributions paid
or accrued after December 31, 1985, in Fiscal Years ending after
such date, which are attributable to post-retirement medical
benefits allocated to the separate account of a key employee, as
defined in Code Section 419A(d)(3), under a welfare benefit fund,
as defined in Code Section 419(e), maintained by the Employer, as
defined in this section, are treated as Annual Additions to a
defined contribution plan. The 25% of Compensation limit under
Maximum Permissible Amount does not apply to Annual Additions
resulting from contributions made to an individual medical
account, as defined in Code Section 415(l)(2), or to Annual
Additions resulting from contributions for medical benefits,
within the meaning of Code Section 419A, after separation from
service.
Annual Addition means the amount added to a Participant's account
for any Limitation Year which may not exceed the Maximum
Permissible Amount. The Annual Addition under any plan for a
Participant with respect to any Limitation Year, shall be equal
to the sum of (1) and (2) below:
(1) Employer contributions and forfeitures credited to his
account for the Limitation Year.
(2) Participant contributions made by him for the Limitation
Year.
Before the first Limitation Year beginning after December 31,
1986, the amount under (2) above is the lesser of (i) 1/2 of his
nondeductible participant contributions made for the Limitation
Year, or (ii) the amount, if any, of his nondeductible
participant contributions made for the Limitation Year which is
in excess of six percent of his Compensation, as defined in this
section, for such Limitation Year.
Compensation means all wages for Federal income tax withholding
purposes, as defined under Code Section 3401(a) (for purposes of
income tax withholding at the source), disregarding any rules
limiting the remuneration included as wages based on the nature
or location of the employment or the services performed.
Compensation also includes all other payments to an Employee in
the course of the Employer's trade or business, for which the
Employer must furnish the Employee a written statement under Code
Sections 6041(d) and 6051(a)(3). The "Wages, Tips and Other
Compensation" box on Form W-2 satisfies this definition.
For any self-employed individual Compensation will mean earned
income.
For purposes of applying the limitations of this section,
Compensation for a Limitation Year is the Compensation actually
paid or made available during such Limitation Year. Defined
Benefit Plan Fraction means, with respect to a Limitation Year
for a Participant who is or has been a participant in a defined
benefit plan ever maintained by the Employer, as defined in this
section, the quotient, expressed as a decimal, of
(1) the Participant's Projected Annual Benefit under all
such plans as of the close of such Limitation Year,
divided by
(2) on and after the TEFRA Compliance Date, the lesser of (i)
or (ii) below:
(i) 1.25 multiplied by the maximum dollar limitation
which applies to defined benefit plans determined
for the Limitation Year under Code Sections 415(b)
or (d) or
(ii) 1.4 multiplied by the Participant's highest
average compensation as defined in the defined
benefit plan(s),
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including any adjustments under Code Section 415(b).
Before the TEFRA Compliance Date, this denominator is the
Participant's Projected Annual Benefit as of the close of
the Limitation Year if the plan(s) provided the maximum
benefit allowable.
The Defined Benefit Plan Fraction shall be modified as follows:
If the Participant was a participant as of the first day of the
first Limitation Year beginning after December 31, 1986, in one
or more defined benefit plans maintained by the Employer, as
defined in this section, which were in existence on May 6, 1986,
the denominator of this fraction will not be less than 125
percent of the sum of the annual benefits under such plans which
the Participant had accrued as of the close of the last
Limitation Year beginning before January 1, 1987, disregarding
any changes in the terms and conditions of the plan after May 5,
1986. The preceding sentence applies only if the defined benefit
plans individually and in the aggregate satisfied the
requirements of Code Section 415 for all Limitation Years
beginning before January 1, 1987.
Defined Contribution Plan Fraction means, for a Participant with
respect to a Limitation Year, the quotient, expressed as a
decimal, of
(1) the Participant's Aggregate Annual Additions for such
Limitation Year and all prior Limitation Years, under all
defined contribution plans (including the Aggregate Annual
Additions attributable to nondeductible accounts under
defined benefit plans and attributable to all welfare
benefit funds, as defined in Code Section 419(e) and
attributable to individual medical accounts, as defined in
Code Section 415(l)(2)) ever maintained by the Employer,
as defined in this section, divided by
(2) on and after the TEFRA Compliance Date, the sum of the
amount determined for the Limitation Year under (i) or
(ii) below, whichever is less, and the amounts determined
in the same manner for all prior Limitation Years during
which he has been an Employee or an employee of a
predecessor employer:
(i) 1.25 multiplied by the maximum permissible dollar
amount for each such Limitation Year, or
(ii) 1.4 multiplied by the maximum permissible
percentage of the Participant's Compensation, as
defined in this section, for each such Limitation
Year.
Before the TEFRA Compliance Date, this denominator is the
sum of the maximum allowable amount of Annual Addition to
his account(s) under all the plan(s) of the Employer, as
defined in this section, for each such Limitation Year.
The Defined Contribution Plan Fraction shall be modified as
follows:
If the Participant was a participant as of the first day of the
first Limitation Year beginning after December 31, 1986, in one
or more defined contribution plans maintained by the Employer, as
defined in this section, which were in existence on May 6, 1986,
the numerator of this fraction shall be adjusted if the sum of
the Defined Contribution Plan Fraction and Defined Benefit Plan
Fraction would otherwise exceed 1.0 under the terms of this Plan.
Under the adjustment, the dollar amount determined below shall be
permanently subtracted from the numerator of this fraction. The
dollar amount is equal to the
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excess of the sum of the two fractions, before adjustment, over
1.0 multiplied by the denominator of his Defined Contribution
Plan Fraction. The adjustment is calculated using his Defined
Contribution Plan Fraction and Defined Benefit Plan Fraction as
they would be computed as of the end of the last Limitation Year
beginning before January 1, 1987, and disregarding any changes in
the terms and conditions of the plan made after May 5, 1986, but
using the Code Section 415 limitations applicable to the first
Limitation Year beginning on or after January 1, 1987.
The Annual Addition for any Limitation Year beginning before
January 1, 1987, shall not be recomputed to treat all employee
contributions as Annual Additions.
For a plan that was in existence on July 1, 1982, for purposes of
determining the Defined Contribution Plan Fraction for any
Limitation Year ending after December 31, 1982, the Plan
Administrator may elect, in accordance with the provisions of
Code Section 415, that the denominator for each Participant for
all Limitation Years ending before January 1, 1983, will be equal
to
(1) the Defined Contribution Plan Fraction denominator which
would apply for the last Limitation Year ending in 1982 if
an election under this paragraph were not made, multiplied
by.
(2) a fraction, equal to (i) over (ii) below:
(i) the lesser of (A) $51,875, or (B) 1.4, multiplied
by 25% of the Participant's Compensation, as
defined in this section, for the Limitation Year
ending in 1981;
(ii) the lesser of (A) $41,500, or (B) 25% of the
Participant's Compensation, as defined in this
section, for the Limitation Year ending in 1981.
The election described above is applicable only if the plan
administrators under all defined contribution plans of the
Employer, as defined in this section, also elect to use the
modified fraction.
Employer means any employer that adopts this Plan and all
Controlled Group members and any other entity required to be
aggregated with the employer pursuant to regulations under Code
Section 414(o).
Limitation Year means the 12-consecutive month period within
which it is determined whether or not the limitations of Code
Section 415 are exceeded. Limitation Year means each
12-consecutive month period ending on June 30. If the Limitation
Year is other than the calendar year, execution of this Plan (or
any amendment to this Plan changing the Limitation Year)
constitutes the Employer's adoption of a written resolution
electing the Limitation Year. If the Limitation Year is changed,
the new Limitation Year shall begin within the current Limitation
Year, creating a short Limitation Year.
Maximum Permissible Amount means, for a Participant with respect
to any Limitation Year, the lesser of (1) or (2) below:
(1) The greater of $30,000 or one-fourth of the maximum dollar
limitation which applies to defined benefit plans set
forth in Code Section 415(b)(1)(A) as in effect for the
Limitation Year. (Before the TEFRA Compliance Date,
$25,000 multiplied by the cost of living adjustment factor
permitted by Federal regulations.)
(2) 25% of his Compensation, as defined in this section, for
such Limitation Year.
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The compensation limitation referred to in (2) shall not apply to
any contribution for medical benefits (within the meaning of Code
Section 401(h) or Code Section 419A(f)(2)) which is otherwise
treated as an annual addition under Code Section 415(l)(1) or
Code Section 419A(d)(2).
If there is a short Limitation Year because of a change in
Limitation Year, the Maximum Permissible Amount will not exceed
the maximum dollar limitation which would otherwise apply
multiplied by the following fraction:
Number of months in the short Limitation Year
---------------------------------------------
12
Projected Annual Benefit means a Participant's expected annual
benefit under all defined benefit plan(s) ever maintained by the
Employer, as defined in this section. The Projected Annual
Benefit shall be determined assuming that the Participant will
continue employment until the later of current age or normal
retirement age under such plan(s), and that the Participant's
compensation for the current Limitation Year and all other
relevant factors used to determine benefits under such plan(s)
will remain constant for all future Limitation Years. Such
expected annual benefit shall be adjusted to the actuarial
equivalent of a straight life annuity if expressed in a form
other than a straight life or qualified joint and survivor
annuity.
(b) The Annual Addition under this Plan for a Participant during a
Limitation Year shall not be more than the Maximum Permissible
Amount.
(c) Contributions which would otherwise be credited to the
Participant's Account shall be limited or reallocated to the
extent necessary to meet the restrictions of subparagraph (b)
above for any Limitation Year in the following order. Elective
Deferral Contributions shall be limited.
If, due to (i) an error in estimating a Participant's
Compensation as defined in this section, (ii) as a result of a
reasonable error in determining the amount of elective deferrals
(within the meaning of Code Section 402(g)(3)) that may be made
with respect to any individual under the limits of Code Section
415, or (iii) other limited facts and circumstances, a
Participant's Annual Addition is greater than the amount
permitted in (b) above, such excess amount shall be applied as
follows. Elective Deferral Contributions will be returned to the
Participant. If after the return of Elective Deferral
Contributions, an excess amount still exists, and the Participant
is an Active Participant as of the end of the Limitation Year,
the excess amount shall be used to offset Employer Contributions
for him in the next Limitation Year. If after the return of
Elective Deferral Contributions, an excess amount still exists,
and the Participant is not an Active Participant as of the end of
the Limitation Year, the excess amount will be held in a suspense
account which will be used to offset Employer Contributions for
all Participants in the next Limitation Year. No Employer
Contributions that would be included in the next Limitation
Year's Annual Addition may be made before the total suspense
account has been used.
(d) A Participant's Aggregate Annual Addition for a Limitation Year
shall not exceed the Maximum Permissible Amount.
If, for the Limitation Year, the Participant has an Annual
Addition under more than one defined contribution plan or a
welfare benefit fund, as defined in Code Section 419(e), or an
individual medical account, as defined in Code Section 415(l)(2),
maintained by the Employer, as defined in this section, and such
plans and welfare benefit funds and individual medical accounts
do not otherwise limit the Aggregate Annual Addition to the
Maximum Permissible Amount, any reduction necessary shall be made
first to the profit sharing plans, then to all other such plans
and welfare benefit funds and individual medical accounts and, if
necessary, by reducing first those that were most recently
allocated.
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Welfare benefit funds and individual medical accounts shall be
deemed to be allocated first. However, elective deferral
contributions shall be the last contributions reduced before the
welfare benefit fund or individual medical account is reduced.
If some of the Employer's defined contribution plans were not in
existence on July 1, 1982, and some were in existence on that
date, the Maximum Permissible Amount which is based on a dollar
amount may differ for a Limitation Year. The Aggregate Annual
Addition for the Limitation Year in which the dollar limit
differs shall not exceed the lesser of (1) 25% of Compensation as
defined in this section, (2) $45,475, or (3) the greater of
$30,000 or the sum of the Annual Additions for such Limitation
Year under all the plan(s) to which the $45,475 amount applies.
(e) If a Participant is or has been a participant in both defined
benefit and defined contribution plans (including a welfare
benefit fund or individual medical account) ever maintained by
the Employer, as defined in this section, the sum of the Defined
Benefit Plan Fraction and the Defined Contribution Plan Fraction
for any Limitation Year shall not exceed 1.0 (1.4 before the
TEFRA Compliance Date).
After all other limitations set out in the plans and funds have
been applied, the following limitations shall apply so that the
sum of the Participant's Defined Benefit Plan Fraction and
Defined Contribution Plan Fraction shall not exceed 1.0 (1.4
before the TEFRA Compliance Date). The Projected Annual Benefit
shall be limited first. If the Participant's annual benefit(s)
equal his Projected Annual Benefit, as limited, then Annual
Additions to the defined contribution plan(s) shall be limited to
the extent needed to reduce the sum to 1.0 (1.4). First, the
voluntary contributions the Participant may make for the
Limitation Year shall be limited. Next, in the case of a profit
sharing plan, any forfeitures allocated to the Participant shall
be reallocated to remaining participants to the extent necessary
to reduce the decimal to 1.0 (1.4). Last, to the extent
necessary, employer contributions for the Limitation Year shall
be reallocated or limited, and any required and optional employee
contributions to which such employer contributions were geared
shall be reduced in proportion.
If, for the Limitation Year, the Participant has an Annual
Addition under more than one defined contribution plan or welfare
benefit fund or individual medical account maintained by the
Employer, as defined in this section, any reduction above shall
be made first to the profit sharing plans, then to all other such
plans and welfare benefit plans and individual medical accounts
and, if necessary, by reducing first those that were most
recently allocated. However, elective deferral contributions
shall be the last contributions reduced before the welfare
benefit fund or individual medical account is reduced. The annual
addition to the welfare benefit fund and individual medical
account shall be limited last.
SECTION 3.04--EXCESS AMOUNTS.
(a) For the purposes of this section, the following terms are
defined:
Actual Deferral Percentage means the ratio (expressed as a
percentage) of Elective Deferral Contributions under this Plan on
behalf of the Eligible Participant for the Plan Year to the
Eligible Participant's Compensation for the Plan Year. In
modification of the foregoing, Compensation shall be limited to
the Compensation received while an Active Participant. The
Elective Deferral Contributions used to determine the Actual
Deferral Percentage shall include Excess Elective Deferrals
(other than Excess Elective Deferrals of Nonhighly Compensated
Employees that arise solely from Elective Deferral Contributions
made under this Plan or any other plans of the Employer or a
Controlled Group member). Under such rules as the Secretary of
the Treasury shall prescribe, the Employer may elect to include
Qualified Nonelective Contributions and Qualified Matching
Contributions under this Plan in computing the Actual Deferral
Percentage. For an Eligible Participant for whom such
Contributions on his behalf for the Plan Year are zero, the
percentage is zero.
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Aggregate Limit means the greater of (1) or (2) below:
(1) The sum of
(i) 125 percent of the greater of the Average Actual
Deferral Percentage of the Nonhighly Compensated
Employees for the Plan Year or the Average
Contribution Percentage of Nonhighly Compensated
Employees under the Plan subject to Code Section
401(m) for the Plan Year beginning with or within
the Plan Year of the cash or deferred arrangement
and
(ii) the lesser of 200% or two plus the lesser of such
Average Actual Deferral Percentage or Average
Contribution Percentage.
(2) The sum of
(i) 125 percent of the lesser of the Average Actual
Deferral Percentage of the Nonhighly Compensated
Employees for the Plan Year or the Average
Contribution Percentage of Nonhighly Compensated
Employees under the Plan subject to Code Section
401(m) for the Plan Year beginning with or within
the Plan Year of the cash or deferred arrangement
and
(ii) the lesser of 200% or two plus the greater of such
Average Actual Deferral Percentage or average
contribution percentage as defined in Code Section
401(m).
Average Actual Deferral Percentage means the average (expressed
as a percentage) of the Actual Deferral Percentages of the
Eligible Participants in a group.
Elective Deferral Contributions means employer contributions made
on behalf of a participant pursuant to an election to defer under
any qualified cash or deferred arrangement as described in Code
Section 401(k), any simplified employee pension cash or deferred
arrangement as described in Code Section 402(h)(1)(B), any
eligible deferred compensation plan under Code Section 457, any
plan as described under Code Section 501(c)(18), and any employer
contributions made on behalf of a participant for the purchase of
an annuity contract under Code Section 403(b) pursuant to a
salary reduction agreement. Elective Deferral Contributions shall
not include any deferrals properly distributed as excess Annual
Additions.
Eligible Participant means, for purposes of the Actual Deferral
Percentage, any Employee who is eligible to make an Elective
Deferral Contribution, and shall include the following: any
Employee who would be a plan participant if he chose to make
required contributions; any Employee who can make Elective
Deferral Contributions but who has changed the amount of his
Elective Deferral Contribution to 0%, or whose eligibility to
make an Elective Deferral Contribution is suspended because of a
loan, distribution or hardship withdrawal; and, any Employee who
is not able to make an Elective Deferral Contribution because of
Code Section 415(c)(1) - Annual Additions limits. The Actual
Deferral Percentage for any such included Employee is zero.
Excess Contributions means, with respect to any Plan Year, the
excess of:
(1) The aggregate amount of Contributions actually taken into
account in computing the Actual Deferral Percentage of
Highly Compensated Employees for such Plan Year, over
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<PAGE>
(2) The maximum amount of such Contributions permitted by the
Actual Deferral Percentage test (determined by reducing
Contributions made on behalf of Highly Compensated
Employees in order of the Actual Deferral Percentages,
beginning with the highest of such percentages).
A Participant's Excess Contributions for a Plan Year will be
reduced by the amount of Excess Elective Deferrals, if any,
previously distributed to the Participant for the taxable year
ending in that Plan Year.
Excess Elective Deferrals means those Elective Deferral
Contributions that are includible in a Participant's gross income
under Code Section 402(g) to the extent such Participant's
Elective Deferral Contributions for a taxable year exceed the
dollar limitation under such Code section. Excess Elective
Deferrals shall be treated as Annual Additions, as defined in the
CONTRIBUTION LIMITATION SECTION of Article III, under the Plan,
unless such amounts are distributed no later than the first April
15 following the close of the Participant's taxable year.
Family Member means an Employee, or former employee; the spouse
of the Employee or former employee, and the lineal ascendants or
descendants and the spouse of such lineal ascendants or
descendants of any such Employee or former employee. In
determining if an individual is a family member as to an Employee
or former employee, legal adoptions are taken into account.
Matching Contributions means employer contributions made to this
or any other defined contribution plan, or to a contract
described in Code Section 403(b), on behalf of a participant on
account of a Participant Contribution made by such participant,
or on account of a participant's Elective Deferral Contributions,
under a plan maintained by the employer.
Participant Contributions means contributions made to any plan by
or on behalf of a participant that are included in the
participant's gross income in the year in which made and that are
maintained under a separate account to which earnings and losses
are allocated.
Qualified Matching Contributions means Matching Contributions
which are subject to the distribution and nonforfeitability
requirements under Code Section 401(k) when made.
Qualified Nonelective Contributions means any employer
contributions (other than Matching Contributions) which an
employee may not elect to have paid to him in cash instead of
being contributed to the plan and which are subject to the
distribution and nonforfeitability requirements under Code
Section 401(k) when made.
(b) A Participant may assign to this Plan any Excess Elective
Deferrals made during a taxable year by notifying the Plan
Administrator in writing on or before the first following March 1
of the amount of the Excess Elective Deferrals to be assigned to
the Plan. A Participant is deemed to notify the Plan
Administrator of any Excess Elective Deferrals that arise by
taking into account only those Elective Deferral Contributions
made to this Plan and any other plans of the Employer or a
Controlled Group member and reducing such Excess Elective
Deferrals by the amount of Excess Contributions, if any,
previously distributed for the Plan Year beginning in that
taxable year. The Participant's claim for Excess Elective
Deferrals shall be accompanied by the Participant's written
statement that if such amounts are not distributed, such Excess
Elective Deferrals, when added to amounts deferred under other
plans or arrangements described in Code Sections 401(k), 408(k)
or 403(b), will exceed the limit imposed on the Participant by
Code Section 402(g) for the year in which the deferral occurred.
The Excess Elective Deferrals assigned to this Plan can not
exceed the Elective Deferral Contributions allocated under this
Plan for such taxable year.
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<PAGE>
Notwithstanding any other provisions of the Plan, Elective
Deferral Contributions in an amount equal to the Excess Elective
Deferrals assigned to this Plan, plus any income and minus any
loss allocable thereto, shall be distributed no later than April
15 to any Participant to whose Account Excess Elective Deferrals
were assigned for the preceding year and who claims Excess
Elective Deferrals for such taxable year.
The income or loss allocable to such Excess Elective Deferrals
shall be equal to the income or loss allocable to the
Participant's Elective Deferral Contributions for the taxable
year in which the excess occurred multiplied by a fraction. The
numerator of the fraction is the Excess Elective Deferrals. The
denominator of the fraction is the closing balance without regard
to any income or loss occurring during such taxable year (as of
the end of such taxable year) of the Participant's Account
resulting from Elective Deferral Contributions.
(c) As of the end of each Plan Year after Excess Elective Deferrals
have been determined, one of the following tests must be met:
(1) The Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for the
Plan Year is not more than the Average Actual Deferral
Percentage for Eligible Participants who are Nonhighly
Compensated Employees for the Plan Year multiplied by
1.25.
(2) The Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for the
Plan Year is not more than the Average Actual Deferral
Percentage for Eligible Participants who are Nonhighly
Compensated Employees for the Plan Year multiplied by 2
and the difference between the Average Actual Deferral
Percentages is not more than 2.
If one or more Highly Compensated Employees participate in both a
cash or deferred arrangement and a plan subject to the average
contribution percentage test, as defined in Code Section 401(m),
maintained by the Employer or a Controlled Group member and the
sum of the Average Actual Deferral Percentage and average
contribution percentage, as defined in Code Section 401(m), of
those Highly Compensated Employees subject to either or both
tests exceeds the Aggregate Limit, then the contribution
percentage, as defined in Code Section 401(m), of those Highly
Compensated Employees who also participate in a cash or deferred
arrangement will be reduced (beginning with such Highly
Compensated Employees whose contribution percentage, as defined
in Code Section 401(m), is the highest) so that the limit is not
exceeded. The amount by which each Highly Compensated Employee's
contribution percentage, as defined in Code Section 401(m), is
reduced shall be treated as an excess aggregate contribution, as
defined in Code Section 401(m). The Average Actual Deferral
Percentage and average contribution percentage, as defined in
Code Section 401(m), of the Highly Compensated Employees are
determined after any corrections required to meet the Average
Actual Deferral Percentage and average contribution percentage,
as defined in Code Section 401(m), tests. Multiple use does not
occur if either the Average Actual Deferral Percentage or average
contribution percentage, as defined in Code Section 401(m), of
the Highly Compensated Employees does not exceed 1.25 multiplied
by the Average Actual Deferral Percentage and average
contribution percentage, as defined in Code Section 401(m), of
the Nonhighly Compensated Employees.
The Actual Deferral Percentage for any Eligible Participant who
is a Highly Compensated Employee for the Plan Year and who is
eligible to have Elective Deferral Contributions (and Qualified
Nonelective Contributions or Qualified Matching Contributions, or
both, if used in computing the Actual Deferral Percentage)
allocated to his account under two or more plans or arrangements
described in Code Section 401(k) that are maintained by the
Employer or a Controlled Group member shall be determined as if
all such Elective Deferral Contributions (and, if applicable,
such Qualified Nonelective Contributions
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<PAGE>
or Qualified Matching Contributions, or both) were made under a
single arrangement. If a Highly Compensated Employee participates
in two or more cash or deferred arrangements that have different
Plan Years, all cash or deferred arrangements ending with or
within the same calendar year shall be treated as a single
arrangement. Notwithstanding the foregoing, certain plans shall
be treated as separate if mandatorily disaggregated under the
regulations under Code Section 401(k) or permissibly
disaggregated as provided.
In the event that this Plan satisfies the requirements of Code
Section 401(k), 401(a)(4), or 410(b) only if aggregated with one
or more other plans, or if one or more other plans satisfy the
requirements of such Code sections only if aggregated with this
Plan, then this section shall be applied by determining the
Actual Deferral Percentage of employees as if all such plans were
a single plan. Plans may be aggregated in order to satisfy Code
Section 401(k) only if they have the same Plan Year.
For purposes of determining the Actual Deferral Percentage of an
Eligible Participant who is a five-percent owner or one of the
ten most highly-paid Highly Compensated Employees, the Elective
Deferral Contributions (and Qualified Nonelective Contributions
or Qualified Matching Contributions, or both, if used in
computing the Actual Deferral Percentage) and Compensation of
such Eligible Participant include the Elective Deferral
Contributions (and, if applicable, Qualified Nonelective
Contributions or Qualified Matching Contributions, or both) and
Compensation for the Plan Year of Family Members. Family Members,
with respect to such Highly Compensated Employees, shall be
disregarded as separate employees in determining the Actual
Deferral Percentage both for Participants who are Nonhighly
Compensated Employees and for Participants who are Highly
Compensated Employees.
For purposes of determining the Actual Deferral Percentage,
Elective Deferral Contributions, Qualified Nonelective
Contributions and Qualified Matching Contributions must be made
before the last day of the 12-month period immediately following
the Plan Year to which contributions relate.
The Employer shall maintain records sufficient to demonstrate
satisfaction of the Average Actual Deferral Percentage test and
the amount of Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, used in each test.
The determination and treatment of the Contributions used in
computing the Actual Deferral Percentage shall satisfy such other
requirements as may be prescribed by the Secretary of the
Treasury.
If the Plan Administrator should determine during the Plan Year
that neither of the above tests is being met, the Plan
Administrator may adjust the amount of future Elective Deferral
Contributions of the Highly Compensated Employees.
Notwithstanding any other provisions of this Plan, Excess
Contributions, plus any income and minus any loss allocable
thereto, shall be distributed no later than the last day of each
Plan Year to Participants to whose Accounts such Excess
Contributions were allocated for the preceding Plan Year. If such
excess amounts are distributed more than 2 1/2 months after the
last day of the Plan Year in which such excess amounts arose, a
ten (10) percent excise tax will be imposed on the employer
maintaining the plan with respect to such amounts. Such
distributions shall be made beginning with the Highly Compensated
Employee(s) who has the greatest Actual Deferral Percentage,
reducing his Actual Deferral Percentage to the next highest
Actual Deferral Percentage level. Then, if necessary, reducing
the Actual Deferral Percentage of the Highly Compensated
Employees at the next highest level, and continuing in this
manner until the average Actual Deferral Percentage of the Highly
Compensated Group satisfies the Actual Deferral Percentage test.
Excess Contributions of Participants who are subject to the
family member aggregation rules shall be allocated among the
Family Members in proportion to the Elective
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<PAGE>
Deferral Contributions (and amounts treated as Elective Deferral
Contributions) of each Family Member that is combined to
determine the combined Actual Deferral Percentage.
Excess Contributions shall be treated as Annual Additions, as
defined in the CONTRIBUTION LIMITATION SECTION of Article III,
under the Plan.
The Excess Contributions shall be adjusted for income or loss.
The income or loss allocable to such Excess Contributions shall
be equal to the income or loss allocable to the Participant's
Elective Deferral Contributions (and, if applicable, Qualified
Nonelective Contributions or Qualified Matching Contributions, or
both) for the Plan Year in which the excess occurred multiplied
by a fraction. The numerator of the fraction is the Excess
Contributions. The denominator of the fraction is the closing
balance without regard to any income or loss occurring during
such Plan Year (as of the end of such Plan Year) of the
Participant's Account resulting from Elective Deferral
Contributions (and Qualified Nonelective Contributions or
Qualified Matching Contributions, or both, if used in computing
the Actual Deferral Percentage).
Excess Contributions shall be distributed from the Participant's
Account resulting from Elective Deferral Contributions. If such
Excess Contributions exceed the balance in the Participant's
Account resulting from Elective Deferral Contributions, the
balance shall be distributed from the Participant's Account
resulting from Qualified Matching Contributions (if applicable)
and Qualified Nonelective Contributions, respectively.
Excess Contributions shall be distributed from the Participant's
Account resulting from Elective Deferral Contributions. If such
Excess Contributions exceed the balance in the Participant's
Account resulting from Elective Deferral Contributions, the
balance shall be distributed from the Participant's Account
resulting from Qualified Matching Contributions (if applicable)
and Qualified Nonelective Contributions, respectively.
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ARTICLE IV
INVESTMENT OF CONTRIBUTIONS
SECTION 4.01--INVESTMENT OF CONTRIBUTIONS.
All Contributions are forwarded by the Employer to the Insurer to be
deposited under the Group Contract or forwarded to the Trustee to be deposited
in the Trust Fund.
Investment of Contributions is governed by the provisions of the Trust,
the Group Contract and any other funding arrangement in which the Trust Fund is
or may be invested. To the extent permitted by the Trust, Group Contract or
other funding arrangement, the parties named below shall direct the
Contributions to any of the accounts available under the Trust or Group Contract
and may request the transfer of assets resulting from those Contributions
between such accounts. A Participant may not direct the Trustee to invest the
Participant's Account in collectibles. Collectibles means any work of art, rug
or antique, metal or gem, stamp or coin, alcoholic beverage or other tangible
personal property specified by the Secretary of Treasury. To the extent that a
Participant does not direct the investment of his Account, such Account shall be
invested ratably in the accounts available under the Trust or Group Contract in
the same manner as the undirected Accounts of all other Participants. The Vested
Accounts of all Inactive Participants may be segregated and invested separately
from the Accounts of all other Participants.
The Trust Fund shall be valued at current fair market value as of the
last day of the last calendar month ending in the Plan Year and, at the
discretion of the Trustee, may be valued more frequently. The valuation shall
take into consideration investment earnings credited, expenses charged, payments
made and changes in the value of the assets held in the Trust Fund. The Account
of a Participant shall be credited with its share of the gains and losses of the
Trust Fund. That part of a Participant's Account invested in a funding
arrangement which establishes an account or accounts for such Participant
thereunder shall be credited with the gain or loss from such account or
accounts. That part of a Participant's Account which is invested in other
funding arrangements shall be credited with a proportionate share of the gain or
loss of such investments. The share shall be determined by multiplying the gain
or loss of the investment by the ratio of the part of the Participant's Account
invested in such funding arrangement to the total of the Trust Fund invested in
such funding arrangement.
At least annually, the Named Fiduciary shall review all pertinent
Employee information and Plan data in order to establish the funding policy of
the Plan and to determine appropriate methods of carrying out the Plan's
objectives. The Named Fiduciary shall inform the Trustee and any Investment
Manager of the Plan's short-term and long-term financial needs so the investment
policy can be coordinated with the Plan's financial requirements.
(a) Elective Deferral Contributions: The Participant shall direct the
investment of Elective Deferral Contributions and transfer of
assets resulting from those Contributions.
(b) Rollover Contributions: The Participant shall direct the
investment of Rollover Contributions and transfer of assets
resulting from those Contributions.
However, the Named Fiduciary may delegate to the Investment Manager
investment discretion for Contributions and Plan assets which are not subject to
Participant direction.
SECTION 4.01A--INVESTMENT IN QUALIFYING EMPLOYER SECURITIES.
Participants in the Plan may elect to invest all or any portion of their
Account in the Qualifying Employer Securities Fund. In the absence of such
election, such Eligible Employees shall be deemed to have elected to have their
Accounts invested wholly in other investment options of the Investment Funds.
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Notwithstanding the preceding sentence, no portion of the Participant's Account
resulting from Elective Deferral Contributions shall be invested in the
Qualifying Employer Securities Fund unless such investment would be in
compliance with applicable Federal and state securities laws (including any
necessary filings under such Federal and state securities laws) and the
requirements of the Plan.
The Plan Administrator will allocate any cash or stock dividends the
Employer pays with respect to amounts held in the Qualifying Employer Securities
Fund to the Account of a Participant according to the shares of Qualifying
Employer Securities held by the Participant, determined on the dividend
declaration date. Any dividends payable on the Qualifying Employer Securities
shall (unless otherwise directed by the Participant) be invested in additional
shares of Qualifying Employer Securities hereunder.
If there is a public market for Qualifying Employer Securities of the
type held by the Plan, then the Plan Administrator may use as the value of the
shares the price at which such shares traded in such market, provided that such
value is representative of the fair market value of such shares in the opinion
of the Plan Administrator. If the Qualifying Employer Securities do not trade on
the Valuation Date or if the market is very thin on such date, then the Plan
Administrator may use the average of trade prices for a period of time ending on
such date, provided that such value is representative of the fair market value
of such shares in the opinion of the Plan Administrator. The value of a
Participant's Account held in the Qualifying Employer Securities Fund may be
expressed in units.
The fair market value of Qualifying Employer Securities shall be
determined on our Valuation Date. The final closing price of Qualifying Employer
Securities as of the date of the transaction shall apply for purposes of valuing
distributions and other transactions of the Plan to the extent such value is
representative of the fair market value of such shares in the opinion of the
Plan Administrator.
All purchases of Qualifying Employer Securities shall be made at a
price, or prices, which, in the judgment of the Plan Administrator, do not
exceed the fair market value of such Qualifying Employer Securities.
In the event that the Trustee acquires shares of Qualifying Employer
Securities by purchase from a "disqualified person" as defined in Code Section
4975(e)(2) or from a "party in interest" as defined in ERISA Section 3(14), in
exchange for cash or other assets of the Trust, the terms of such purchase shall
contain the provision that in the event that there is a final determination by
the Internal Revenue Service, the Department of Labor, or court of competent
jurisdiction that a fair market value of such shares of Qualifying Employer
Securities, as of the date of purchase was less than the purchase price paid by
the Trustee, then the seller shall pay or transfer, as the case may be, to the
Trustee, an amount of cash, shares of Qualifying Employer Securities, or any
combination thereof equal in value to the difference between the purchase price
and said fair market value for all such shares. In the event that cash and/or
shares of Qualifying Employer Securities are paid and/or transferred to the
Trustee under this provision, shares of Qualifying Employer Securities shall be
valued at their fair market value as of the date of said purchase, and interest
at a reasonable rate from the date of purchase to the date of payment shall be
paid by the seller on the amount of cash paid.
The Plan Administrator may direct the Trustee to sell, resell or
otherwise dispose of Qualifying Employer Securities to any person, including the
Employer, provided that any such sales to any disqualified person or a party in
interest, including the Employer, will be made at not less than the fair market
value and no commission is charged. Any such sale shall be made in conformance
with Section 408(e) of ERISA.
In the event the Plan Administrator directs the Trustee to dispose of
any Qualifying Employer Securities held as Trust assets under circumstances
which require registration and/or qualification of the securities under
applicable Federal or state securities laws, then the Employer, at its own
expense, will take or cause to be taken any and all such action as may be
necessary or appropriate to effect such registration and/or qualification.
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If a Security Exchange Commission (SEC) filing is required, investments
in Qualifying Employer Securities Fund will not be made available to
Participants until the later of the effective date of the Plan or the effective
date of registration of the Plan with the SEC by the Employer.
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ARTICLE V
BENEFITS
SECTION 5.01--RETIREMENT BENEFITS.
On a Participant's Retirement Date, his Vested Account shall be
distributed to him according to the distribution of benefits provisions of
Article VI and the provisions of the SMALL AMOUNTS SECTION of Article IX.
SECTION 5.02--DEATH BENEFITS.
If a Participant dies before his Annuity Starting Date, his Vested
Account shall be distributed according to the distribution of benefits
provisions of Article VI and the provisions of the SMALL AMOUNTS SECTION of
Article IX.
SECTION 5.03--VESTED BENEFITS.
A Participant may receive in a single sum that part of his Vested
Account which results from Participant Contributions at any time after he ceases
to be an Employee, provided he has not again become an Employee. If such amount
is not payable under the provisions of the SMALL AMOUNTS SECTION of Article IX,
it will be distributed only if the Participant so elects. The Participant's
election shall be subject to the requirements in the ELECTION PROCEDURES SECTION
of Article VI for a qualified election of a retirement benefit payable in a form
other than a Qualified Joint and Survivor Form.
A Participant who is Totally and Permanently Disabled may receive a
distribution of his Vested Account at any time after he ceases to be an
Employee, provided he has not again become an Employee. If such amount is not
payable under the provisions of the SMALL AMOUNTS SECTION of Article IX, it will
be distributed only if the Participant so elects. The Participant's election
shall be subject to the requirements in the ELECTION PROCEDURES SECTION of
Article VI for a qualified election of a retirement benefit.
If a Participant does not receive an earlier distribution according to
the provisions of this section or the SMALL AMOUNTS SECTION of Article IX, upon
his Retirement Date or death, his Vested Account shall be applied according to
the provisions of the RETIREMENT BENEFITS SECTION or the DEATH BENEFITS SECTION
of Article V.
SECTION 5.04--WHEN BENEFITS START.
Benefits under the Plan begin when a Participant retires, dies or ceases
to be an Employee, whichever applies, as provided in the preceding sections of
this article. Benefits which begin before Normal Retirement Date for a
Participant who became Totally and Permanently Disabled when he was an Employee
shall be deemed to begin because he is Totally and Permanently Disabled. The
start of benefits is subject to the qualified election procedures of Article VI.
Unless otherwise elected, benefits shall begin before the sixtieth day
following the close of the Plan Year in which the latest date below occurs:
(a) The date the Participant attains age 65 (Normal Retirement Age, if
earlier).
(b) The tenth anniversary of the Participant's Entry Date.
(c) The date the Participant ceases to be an Employee.
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Notwithstanding the foregoing, the failure of a Participant and spouse
to consent to a distribution while a benefit is immediately distributable,
within the meaning of the ELECTION PROCEDURES SECTION of Article VI, shall be
deemed to be an election to defer commencement of payment of any benefit
sufficient to satisfy this section.
The Participant may elect to have his benefits begin after the latest
date for beginning benefits described above, subject to the provisions of this
section. The Participant shall make the election in writing and deliver the
signed statement of election to the Plan Administrator before Normal Retirement
Date or the date he ceases to be an Employee, if later. The election must
describe the form of distribution and the date the benefits will begin. The
Participant shall not elect a date for beginning benefits or a form of
distribution that would result in a benefit payable when he dies which would be
more than incidental within the meaning of governmental regulations.
Benefits shall begin by the Participant's Required Beginning Date, as
defined in the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION REQUIREMENTS
SECTION of Article VI.
Contributions which are used to compute the Actual Deferral Percentage,
as defined in the EXCESS AMOUNTS SECTION of Article III, may be distributed upon
disposition by the Employer of substantially all of the assets (within the
meaning of Code Section 409(d)(2)) used by the Employer in a trade or business
or disposition by the Employer of the Employer's interest in a subsidiary
(within the meaning of Code Section 409(d)(3)) if the transferee corporation is
not a Controlled Group member, the Employee continues employment with the
transferee corporation and the transferor corporation continues to maintain the
Plan. Such distributions made after March 31, 1988, must be made in a single
sum.
SECTION 5.05--WITHDRAWAL PRIVILEGES.
A Participant may withdraw all or any portion of his Vested Account
which results from the following Contributions
Elective Deferral Contributions
in the event of hardship due to an immediate and heavy financial need.
Withdrawals from the Participant's Account resulting from Elective Deferral
Contributions shall be limited to the amount of the Participant's Elective
Deferral Contributions. Immediate and heavy financial need shall be limited to:
(i) expenses incurred or necessary for medical care, described in Code Section
213(d), of the Participant, the Participant's spouse, or any dependents of the
Participant (as defined in Code Section 152); (ii) purchase (excluding mortgage
payments) of a principal residence for the Participant; (iii) payment of tuition
and related educational fees and the payment of room and board expenses for the
next 12 months of post-secondary education for the Participant, his spouse,
children or dependents; (iv) the need to prevent the eviction of the Participant
from his principal residence or foreclosure on the mortgage of the Participant's
principal residence; or (v) any other distribution which is deemed by the
Commissioner of Internal Revenue to be made on account of immediate and heavy
financial need as provided in Treasury regulations. The Participant's request
for a withdrawal shall include his written statement that an immediate and heavy
financial need exists and explain its nature.
No withdrawal shall be allowed which is not necessary to satisfy such
immediate and heavy financial need. Such withdrawal shall be deemed necessary
only if all of the following requirements are met: (i) the distribution is not
in excess of the amount of the immediate and heavy financial need of the
Participant (including amounts necessary to pay any Federal, state or local
income taxes or penalties reasonably anticipated to result from the
distribution); (ii) the Participant has obtained all distributions, other than
hardship distributions, and all nontaxable loans currently available under all
plans maintained by the Employer; (iii) the Plan, and all other plans maintained
by the Employer, provide that the Participant's elective contributions and
employee contributions will be suspended for at least 12 months after receipt of
the hardship distribution; and (iv) the Plan, and all other plans maintained by
the Employer, provide that the Participant may not make elective contributions
for the Participant's taxable year immediately following the taxable
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year of the hardship distribution in excess of the applicable limit under Code
Section 402(g) for such next taxable year less the amount of such Participant's
elective contributions for the taxable year of the hardship distribution. The
Plan will suspend elective contributions and employee contributions for 12
months and limit elective deferrals as provided in the preceding sentence. A
Participant shall not cease to be an Eligible Participant, as defined in the
EXCESS AMOUNTS SECTION of Article III, merely because his elective contributions
or employee contributions are suspended.
A request for withdrawal shall be in writing on a form furnished for
that purpose and delivered to the Plan Administrator before the withdrawal is to
occur. The Participant's request shall be subject to the requirements in the
ELECTION PROCEDURES SECTION of Article VI for a qualified election of a
retirement benefit payable in a form other than a Qualified Joint and Survivor
Form.
A forfeiture shall not occur solely as a result of a withdrawal.
SECTION 5.06--LOANS TO PARTICIPANTS.
Loans shall be made available to all Participants on a reasonably
equivalent basis. For purposes of this section, Participant means any
Participant or Beneficiary who is a party-in-interest, within the meaning of
Section 3(14) of the Employee Retirement Income Security Act of 1974 (ERISA).
Loans shall not be made to highly compensated employees, as defined in Code
Section 414(q), in an amount greater than the amount made available to other
Participants.
No loans will be made to any shareholder-employee or owner-employee. For
purposes of this requirement, a shareholder-employee means an employee or
officer of an electing small business (Subchapter S) corporation who owns (or is
considered as owning within the meaning of Code Section 318(a)(1)), on any day
during the taxable year of such corporation, more than 5% of the outstanding
stock of the corporation.
A loan to a Participant shall be a Participant-directed investment of
his Account. No Account other than the borrowing Participant's Account shall
share in the interest paid on the loan or bear any expense or loss incurred
because of the loan.
The number of outstanding loans shall be limited to one. The minimum
amount of any loan shall be $1,000.
The portion of the Participant's Account held in the Qualifying Employer
Securities Fund may be redeemed for purposes of a loan only after the amount
held in the Participant's other instrument options have been depleted.
Loans must be adequately secured and bear a reasonable rate of interest.
The amount of the loan shall not exceed the maximum amount that may be
treated as a loan under Code Section 72(p) (rather than a distribution) to the
Participant and shall be equal to the lesser of (a) or (b) below:
(a) $50,000 reduced by the highest outstanding loan balance of loans
during the one-year period ending on the day before the new loan
is made.
(b) The greater of (1) or (2), reduced by (3) below:
(1) One-half of the Participant's Vested Account.
(2) $10,000.
(3) Any outstanding loan balance on the date the new loan is
made.
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For purposes of this maximum, a Participant's Vested Account does not include
any accumulated deductible employee contributions, as defined in Code Section
72(o)(5)(B), and all qualified employer plans, as defined in Code Section
72(p)(4), of the Employer and any Controlled Group member shall be treated as
one plan.
The foregoing notwithstanding, the amount of such loan shall not exceed
50% of the amount of the Participant's Vested Account. No collateral other than
a portion of the Participant's Vested Account (as limited above) shall be
accepted. The Loan Administrator shall determine if the collateral is adequate
for the amount of the loan requested.
A Participant must obtain the consent of the Participant's spouse, if
any, to the use of the Vested Account as security for the loan. Spousal consent
shall be obtained no earlier than the beginning of the 90-day period that ends
on the date on which the loan to be so secured is made. The consent must be in
writing, must acknowledge the effect of the loan, and must be witnessed by a
plan representative or a notary public. Such consent shall thereafter be binding
with respect to the consenting spouse or any subsequent spouse with respect to
that loan. A new consent shall be required if the Vested Account is used for
collateral upon renegotiation, extension, renewal, or other revision of the
loan.
If a valid spousal consent has been obtained in accordance with the
above, then, notwithstanding any other provision of this Plan, the portion of
the Participant's Vested Account used as a security interest held by the Plan by
reason of a loan outstanding to the Participant shall be taken into account for
purposes of determining the amount of the Vested Account payable at the time of
death or distribution, but only if the reduction is used as repayment of the
loan. If less than 100% of the Participant's Vested Account (determined without
regard to the preceding sentence) is payable to the surviving spouse, then the
Vested Account shall be adjusted by first reducing the Vested Account by the
amount of the security used as repayment of the loan, and then determining the
benefit payable to the surviving spouse.
Each loan shall bear a reasonable fixed rate of interest to be
determined by the Loan Administrator. In determining the interest rate, the Loan
Administrator shall take into consideration fixed interest rates currently being
charged by commercial lenders for loans of comparable risk on similar terms and
for similar durations, so that the interest will provide for a return
commensurate with rates currently charged by commercial lenders for loans made
under similar circumstances. The Loan Administrator shall not discriminate among
Participants in the matter of interest rates; but loans granted at different
times may bear different interest rates in accordance with the current
appropriate standards.
The loan shall by its terms require that repayment (principal and
interest) be amortized in level payments, not less frequently than quarterly,
over a period not extending beyond five years from the date of the loan. The
period of repayment for any loan shall be arrived at by mutual agreement between
the Loan Administrator and the Participant.
The Participant shall make a written application for a loan from the
Plan on forms provided by the Loan Administrator. The application must specify
the amount and duration requested. No loan will be approved unless the
Participant is creditworthy. The Participant must grant authority to the Loan
Administrator to investigate the Participant's creditworthiness so that the loan
application may be properly considered.
Information contained in the application for the loan concerning the
income, liabilities, and assets of the Participant will be evaluated to
determine whether there is a reasonable expectation that the Participant will be
able to satisfy payments on the loan as due. Additionally, the Loan
Administrator will pursue any appropriate further investigations concerning the
creditworthiness and/or credit history of the Participant to determine whether a
loan should be approved.
Each loan shall be fully documented in the form of a promissory note
signed by the Participant for the face amount of the loan, together with
interest determined as specified above.
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There will be an assignment of collateral to the Plan executed at the
time the loan is made.
In those cases where repayment through payroll deduction by the Employer
is available, installments are so payable, and a payroll deduction agreement
will be executed by the Participant at the time of making the loan.
Where payroll deduction is not available, payments are to be timely
made.
Any payment that is not by payroll deduction shall be made payable to
the Employer or Trustee, as specified in the promissory note, and delivered to
the Loan Administrator, including prepayments, service fees and penalties, if
any, and other amounts due under the note.
The promissory note may provide for reasonable late payment penalties
and/or service fees. Any penalties or service fees shall be applied to all
Participants in a nondiscriminatory manner. If the promissory note so provides,
such amounts may be assessed and collected from the Account of the Participant
as part of the loan balance.
Each loan may be paid prior to maturity, in part or in full, without
penalty or service fee, except as may be set out in the promissory note.
If any amount remains unpaid for more than 31 days after due, a default
is deemed to occur.
Upon default, the Plan has the right to pursue any remedy available by
law to satisfy the amount due, along with accrued interest, including the right
to enforce its claim against the security pledged and execute upon the
collateral as allowed by law.
If any payment of principal or interest or any other amount due under
the promissory note, or any portion thereof, is not made for a period of 90 days
after due, the entire principal balance whether or not otherwise then due, shall
become immediately due and payable without demand or notice, and subject to
collection or satisfaction by any lawful means, including specifically but not
limited to the right to enforce the claim against the security pledged and to
execute upon the collateral as allowed by law.
In the event of default, foreclosure on the note and attachment of
security or use of amounts pledged to satisfy the amount then due, will not
occur until a distributable event occurs in accordance with the Plan, and will
not occur to an extent greater than the amount then available upon any
distributable event which has occurred under the Plan.
All reasonable costs and expenses, including but not limited to
attorney's fees, incurred by the Plan in connection with any default or in any
proceeding to enforce any provision of a promissory note or instrument by which
a promissory note for a Participant loan is secured, shall be assessed and
collected from the Account of the Participant as part of the loan balance.
If payroll deduction is being utilized, in the event that a
Participant's available payroll deduction amounts in any given month are
insufficient to satisfy the total amount due, there will be an increase in the
amount taken subsequently, sufficient to make up the amount that is then due. If
the subsequent deduction is also insufficient to satisfy the amount due within
31 days, a default is deemed to occur as above. If any amount remains past due
more than 90 days, the entire principal amount, whether or not otherwise then
due, along with interest then accrued and any other amount then due under the
promissory note, shall become due and payable, as above.
If the Participant ceases to be a party-in-interest (as defined in this
section) the balance of the outstanding loan becomes due and payable, and the
Participant's Vested Account will be used as available for distribution(s) to
pay the outstanding loan. The Participant's Vested Account will not be used to
pay any amount due under the outstanding loan before the date which is 31 days
after the date he ceased to be an Employee, and the Participant may elect to
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repay the outstanding loan with interest on the day of repayment. If no
distributable event has occurred under the Plan at the time that the
Participant's Vested Account would otherwise be used under this provision to pay
any amount due under the outstanding loan, this will not occur until the time,
or in excess of the extent to which, a distributable event occurs under the
Plan.
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ARTICLE VI
DISTRIBUTION OF BENEFITS
SECTION 6.01--AUTOMATIC FORMS OF DISTRIBUTION.
Unless a qualified election of an optional form of benefit has been made
within the election period (see the ELECTION PROCEDURES SECTION of Article VI),
the automatic form of benefit payable to or on behalf of a Participant is
determined as follows:
(a) The automatic form of retirement benefit for a Participant who
does not die before his Annuity Starting Date shall be the
Qualified Joint and Survivor Form.
(b) The automatic form of death benefit for a Participant who dies
before his Annuity Starting Date shall be:
(1) A Qualified Preretirement Survivor Annuity for a
Participant who has a spouse to whom he has been
continuously married throughout the one-year period ending
on the date of his death. The spouse may elect to start
receiving the death benefit on any first day of the month
on or after the Participant dies and before the date the
Participant would have been age 70 1/2. If the spouse dies
before benefits start, the Participant's Vested Account,
determined as of the date of the spouse's death, shall be
paid to the spouse's Beneficiary.
(2) A single-sum payment to the Participant's Beneficiary for
a Participant who does not have a spouse who is entitled
to a Qualified Preretirement Survivor Annuity.
Before a death benefit will be paid on account of the death of a
Participant who does not have a spouse who is entitled to a
Qualified Preretirement Survivor Annuity, it must be established
to the satisfaction of a plan representative that the Participant
does not have such a spouse.
SECTION 6.02--OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION
REQUIREMENTS.
(a) For purposes of this section, the following terms are defined:
Applicable Life Expectancy means Life Expectancy (or Joint and
Last Survivor Expectancy) calculated using the attained age of
the Participant (or Designated Beneficiary) as of the
Participant's (or Designated Beneficiary's) birthday in the
applicable calendar year reduced by one for each calendar year
which has elapsed since the date Life Expectancy was first
calculated. If Life Expectancy is being recalculated, the
Applicable Life Expectancy shall be the Life Expectancy so
recalculated. The applicable calendar year shall be the first
Distribution Calendar Year, and if Life Expectancy is being
recalculated such succeeding calendar year.
Designated Beneficiary means the individual who is designated as
the beneficiary under the Plan in accordance with Code Section
401(a)(9) and the regulations thereunder.
Distribution Calendar Year means a calendar year for which a
minimum distribution is required. For distributions beginning
before the Participant's death, the first Distribution Calendar
Year is the calendar year immediately preceding the calendar year
which contains the Participant's Required Beginning Date. For
distributions beginning after the Participant's death, the first
Distribution Calendar Year is the calendar year in which
distributions are required to begin pursuant to (e) below.
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Joint and Last Survivor Expectancy means joint and last survivor
expectancy computed by use of the expected return multiples in
Table VI of section 1.72-9 of the Income Tax Regulations.
Unless otherwise elected by the Participant (or spouse, in the
case of distributions described in (e)(2)(ii) below) by the time
distributions are required to begin, life expectancies shall be
recalculated annually. Such election shall be irrevocable as to
the Participant (or spouse) and shall apply to all subsequent
years. The life expectancy of a nonspouse Beneficiary may not be
recalculated.
Life Expectancy means life expectancy computed by use of the
expected return multiples in Table V of section 1.72-9 of the
Income Tax Regulations.
Unless otherwise elected by the Participant (or spouse, in the
case of distributions described in (e)(2)(ii) below) by the time
distributions are required to begin, life expectancies shall be
recalculated annually. Such election shall be irrevocable as to
the Participant (or spouse) and shall apply to all subsequent
years. The life expectancy of a nonspouse Beneficiary may not be
recalculated.
Participant's Benefit means
(1) The Account balance as of the last valuation date in the
calendar year immediately preceding the Distribution
Calendar Year (valuation calendar year) increased by the
amount of any contributions or forfeitures allocated to
the Account balance as of the dates in the valuation
calendar year after the valuation date and decreased by
distributions made in the valuation calendar year after
the valuation date.
(2) For purposes of (1) above, if any portion of the minimum
distribution for the first Distribution Calendar Year is
made in the second Distribution Calendar Year on or before
the Required Beginning Date, the amount of the minimum
distribution made in the second Distribution Calendar Year
shall be treated as if it had been made in the immediately
preceding Distribution Calendar Year.
Required Beginning Date means, for a Participant, the first day
of April of the calendar year following the calendar year in
which the Participant attains age 70 1/2, unless otherwise
provided in (1), (2) or (3) below:
(1) The Required Beginning Date for a Participant who attains
age 70 1/2 before January 1, 1988, and who is not a
5-percent owner is the first day of April of the calendar
year following the calendar year in which the later of
retirement or attainment of age 70 1/2 occurs.
(2) The Required Beginning Date for a Participant who attains
age 70 1/2 before January 1, 1988, and who is a 5-percent
owner is the first day of April of the calendar year
following the later of
(i) the calendar year in which the Participant attains
age 70 1/2, or
(ii) the earlier of the calendar year with or within
which ends the Plan Year in which the Participant
becomes a 5-percent owner, or the calendar year in
which the Participant retires.
(3) The Required Beginning Date of a Participant who is not a
5-percent owner and who attains age 70 1/2 during 1988
and who has not retired as of January 1, 1989, is
April 1, 1990.
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A Participant is treated as a 5-percent owner for purposes of
this section if such Participant is a 5-percent owner as defined
in Code Section 416(i) (determined in accordance with Code
Section 416 but without regard to whether the Plan is top-heavy)
at any time during the Plan Year ending with or within the
calendar year in which such owner attains age 66 1/2 or any
subsequent Plan Year.
Once distributions have begun to a 5-percent owner under this
section, they must continue to be distributed, even if the
Participant ceases to be a 5-percent owner in a subsequent year.
(b) The optional forms of retirement benefit shall be the following:
a straight life annuity; single life annuities with certain
periods of five, ten or fifteen years; a single life annuity with
installment refund; survivorship life annuities with installment
refund and survivorship percentages of 50, 66 2/3 or 100; fixed
period annuities for any period of whole months which is not less
than 60 and does not exceed the Life Expectancy of the
Participant and the named Beneficiary as provided in (d) below
where the Life Expectancy is not recalculated; and a series of
installments chosen by the Participant with a minimum payment
each year beginning with the year the Participant turns age 70
1/2. The payment for the first year in which a minimum payment is
required will be made by April 1 of the following calendar year.
The payment for the second year and each successive year will be
made by December 31 of that year. The minimum payment will be
based on a period equal to the Joint and Last Survivor Expectancy
of the Participant and the Participant's spouse, if any, as
provided in (d) below where the Joint and Last Survivor
Expectancy is recalculated. The balance of the Participant's
Vested Account, if any, will be payable on the Participant's
death to his Beneficiary in a single sum. The Participant may
also elect to receive his Vested Account in a single-sum payment.
Election of an optional form is subject to the qualified election
provisions of Article VI.
Any annuity contract distributed shall be nontransferable. The
terms of any annuity contract purchased and distributed by the
Plan to a Participant or spouse shall comply with the
requirements of this Plan.
(c) The optional forms of death benefit are a single-sum payment and
any annuity that is an optional form of retirement benefit.
However, a series of installments shall not be available if the
Beneficiary is not the spouse of the deceased Participant.
(d) Subject to the AUTOMATIC FORMS OF DISTRIBUTION SECTION of Article
VI, joint and survivor annuity requirements, the requirements of
this section shall apply to any distribution of a Participant's
interest and will take precedence over any inconsistent
provisions of this Plan. Unless otherwise specified, the
provisions of this section apply to calendar years beginning
after December 31, 1984.
All distributions required under this section shall be determined
and made in accordance with the proposed regulations under Code
Section 401(a)(9), including the minimum distribution incidental
benefit requirement of section 1.401(a)(9)-2 of the proposed
regulations.
The entire interest of a Participant must be distributed or begin
to be distributed no later than the Participant's Required
Beginning Date.
As of the first Distribution Calendar Year, distributions, if not
made in a single sum, may only be made over one of the following
periods (or combination thereof):
(1) the life of the Participant,
(2) the life of the Participant and a Designated Beneficiary,
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(3) a period certain not extending beyond the Life Expectancy
of the Participant, or
(4) a period certain not extending beyond the Joint and Last
Survivor Expectancy of the Participant and a Designated
Beneficiary.
If the Participant's interest is to be distributed in other than
a single sum, the following minimum distribution rules shall
apply on or after the Required Beginning Date:
(5) Individual account:
(i) If a Participant's Benefit is to be distributed
over
(a) a period not extending beyond the Life
Expectancy of the Participant or the Joint
Life and Last Survivor Expectancy of the
Participant and the Participant's
Designated Beneficiary or
(b) a period not extending beyond the Life
Expectancy of the Designated Beneficiary,
the amount required to be distributed for each
calendar year beginning with the distributions for
the first Distribution Calendar Year, must be at
least equal to the quotient obtained by dividing
the Participant's Benefit by the Applicable Life
Expectancy.
(ii) For calendar years beginning before January 1,
1989, if the Participant's spouse is not the
Designated Beneficiary, the method of distribution
selected must assure that at least 50% of the
present value of the amount available for
distribution is paid within the Life Expectancy of
the Participant.
(iii) For calendar years beginning after December 31,
1988, the amount to be distributed each year,
beginning with distributions for the first
Distribution Calendar Year shall not be less than
the quotient obtained by dividing the
Participant's Benefit by the lesser of
(a) the Applicable Life Expectancy or
(b) if the Participant's spouse is not the
Designated Beneficiary, the applicable
divisor determined from the table set forth
in Q&A-4 of section 1.401(a)(9)-2 of the
proposed regulations.
Distributions after the death of the Participant
shall be distributed using the Applicable Life
Expectancy in (5)(i) above as the relevant divisor
without regard to Proposed Regulations section
1.401(a)(9)-2.
(iv) The minimum distribution required for the
Participant's first Distribution Calendar Year
must be made on or before the Participant's
Required Beginning Date. The minimum distribution
for the Distribution Calendar Year for other
calendar years, including the minimum distribution
for the Distribution Calendar Year in which the
Participant's Required Beginning Date occurs, must
be made on or before December 31 of that
Distribution Calendar Year.
(6) Other forms:
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(i) If the Participant's Benefit is distributed in the
form of an annuity purchased from an insurance
company, distributions thereunder shall be made in
accordance with the requirements of Code Section
401(a)(9) and the proposed regulations thereunder.
(e) Death distribution provisions:
(1) Distribution beginning before death. If the Participant
dies after distribution of his interest has begun, the
remaining portion of such interest will continue to be
distributed at least as rapidly as under the method of
distribution being used prior to the Participant's death.
(2) Distribution beginning after death. If the Participant
dies before distribution of his interest begins,
distribution of the Participant's entire interest shall be
completed by December 31 of the calendar year containing
the fifth anniversary of the Participant's death except to
the extent that an election is made to receive
distributions in accordance with (i) or (ii) below:
(i) if any portion of the Participant's interest is
payable to a Designated Beneficiary, distributions
may be made over the life or over a period certain
not greater than the Life Expectancy of the
Designated Beneficiary commencing on or before
December 31 of the calendar year immediately
following the calendar year in which the
Participant died;
(ii) if the Designated Beneficiary is the Participant's
surviving spouse, the date distributions are
required to begin in accordance with (i) above
shall not be earlier than the later of
(a) December 31 of the calendar year
immediately following the calendar year in
which the Participant died and
(b) December 31 of the calendar year in which
the Participant would have attained age 70
1/2.
If the Participant has not made an election pursuant to
this (e)(2) by the time of his death, the Participant's
Designated Beneficiary must elect the method of
distribution no later than the earlier of
(iii) December 31 of the calendar year in which
distributions would be required to begin under
this subparagraph, or
(iv) December 31 of the calendar year which contains
the fifth anniversary of the date of death of the
Participant.
If the Participant has no Designated Beneficiary, or if
the Designated Beneficiary does not elect a method of
distribution, distribution of the Participant's entire
interest must be completed by December 31 of the calendar
year containing the fifth anniversary of the Participant's
death.
(3) For purposes of (e)(2) above, if the surviving spouse dies
after the Participant, but before payments to such spouse
begin, the provisions of (e)(2) above, with the exception
of (e)(2)(ii) therein, shall be applied as if the
surviving spouse were the Participant.
(4) For purposes of this (e), any amount paid to a child of
the Participant will be treated as if it had been paid to
the surviving spouse if the amount becomes payable to the
surviving spouse when the child reaches the age of
majority.
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(5) For purposes of this (e), distribution of a Participant's
interest is considered to begin on the Participant's
Required Beginning Date (or if (e)(3) above is applicable,
the date distribution is required to begin to the
surviving spouse pursuant to (e)(2) above). If
distribution in the form of an annuity irrevocably
commences to the Participant before the Required Beginning
Date, the date distribution is considered to begin is the
date distribution actually commences.
SECTION 6.02A--DISTRIBUTIONS IN QUALIFYING EMPLOYER SECURITIES.
In lieu of the cash distributions permitted under Section 6.02 above,
any portion of the Participant's Vested Account held in the Qualifying Employer
Securities Fund may be distributed in kind upon the election of the Participant.
Fractional shares valued as of the most recent Valuation Date shall be paid in
cash. The distribution shall include any dividends (cash or stock) on such whole
shares or any additional shares received as a result of a stock split or any
other adjustment to such whole shares since the Valuation Date preceding the
date of distribution.
Election of such distribution is subject to the qualified election
provisions of Article VI.
SECTION 6.03--ELECTION PROCEDURES.
The Participant, Beneficiary, or spouse shall make any election under
this section in writing. The Plan Administrator may require such individual to
complete and sign any necessary documents as to the provisions to be made. Any
election permitted under (a) and (b) below shall be subject to the qualified
election provisions of (c) below.
(a) Retirement Benefits. A Participant may elect his Beneficiary or
Contingent Annuitant and may elect to have retirement benefits
distributed under any of the optional forms of retirement benefit
described in the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION
REQUIREMENTS SECTION of Article VI.
(b) Death Benefits. A Participant may elect his Beneficiary and may
elect to have death benefits distributed under any of the
optional forms of death benefit described in the OPTIONAL FORMS
OF DISTRIBUTION AND DISTRIBUTION REQUIREMENTS SECTION of Article
VI.
If the Participant has not elected an optional form of
distribution for the death benefit payable to his Beneficiary,
the Beneficiary may, for his own benefit, elect the form of
distribution, in like manner as a Participant.
The Participant may waive the Qualified Preretirement Survivor
Annuity by naming someone other than his spouse as Beneficiary.
In lieu of the Qualified Preretirement Survivor Annuity described
in the AUTOMATIC FORMS OF DISTRIBUTION SECTION of Article VI, the
spouse may, for his own benefit, waive the Qualified
Preretirement Survivor Annuity by electing to have the benefit
distributed under any of the optional forms of death benefit
described in the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION
REQUIREMENTS SECTION of Article VI.
(c) Qualified Election. The Participant, Beneficiary or spouse may
make an election at any time during the election period. The
Participant, Beneficiary, or spouse may revoke the election made
(or make a new election) at any time and any number of times
during the election period. An election is effective only if it
meets the consent requirements below.
The election period as to retirement benefits is the 90-day
period ending on the Annuity Starting Date. An election to waive
the Qualified Joint and Survivor Form may not be made before the
date he is
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provided with the notice of the ability to waive the Qualified
Joint and Survivor Form. If the Participant elects the series of
installments, he may elect on any later date to have the balance
of his Vested Account paid under any of the optional forms of
retirement benefit available under the Plan. His election period
for this election is the 90-day period ending on the Annuity
Starting Date for the optional form of retirement benefit
elected.
A Participant may make an election as to death benefits at any
time before he dies. The spouse's election period begins on the
date the Participant dies and ends on the date benefits begin.
The Beneficiary's election period begins on the date the
Participant dies and ends on the date benefits begin. An election
to waive the Qualified Preretirement Survivor Annuity may not be
made by the Participant before the date he is provided with the
notice of the ability to waive the Qualified Preretirement
Survivor Annuity. A Participant's election to waive the Qualified
Preretirement Survivor Annuity which is made before the first day
of the Plan Year in which he reaches age 35 shall become invalid
on such date. An election made by a Participant after he ceases
to be an Employee will not become invalid on the first day of the
Plan Year in which he reaches age 35 with respect to death
benefits from that part of his Account resulting from
Contributions made before he ceased to be an Employee.
If the Participant's Vested Account has at any time exceeded
$3,500, any benefit which is (1) immediately distributable or (2)
payable in a form other than a Qualified Joint and Survivor Form
or a Qualified Preretirement Survivor Annuity requires the
consent of the Participant and the Participant's spouse (or where
either the Participant or the spouse has died, the survivor). The
consent of the Participant or spouse to a benefit which is
immediately distributable must not be made before the date the
Participant or spouse is provided with the notice of the ability
to defer the distribution. Such consent shall be made in writing.
The consent shall not be made more than 90 days before the
Annuity Starting Date. Spousal consent is not required for a
benefit which is immediately distributable in a Qualified Joint
and Survivor Form. Furthermore, if spousal consent is not
required because the Participant is electing an optional form of
retirement benefit that is not a life annuity pursuant to (d)
below, only the Participant need consent to the distribution of a
benefit payable in a form that is not a life annuity and which is
immediately distributable. Neither the consent of the Participant
nor the Participant's spouse shall be required to the extent that
a distribution is required to satisfy Code Section 401(a)(9) or
Code Section 415. In addition, upon termination of this Plan if
the Plan does not offer an annuity option (purchased from a
commercial provider), the Participant's Account balance may,
without the Participant's consent, be distributed to the
Participant or transferred to another defined contribution plan
(other than an employee stock ownership plan as defined in Code
Section 4975(e)(7)) within the same Controlled Group. A benefit
is immediately distributable if any part of the benefit could be
distributed to the Participant (or surviving spouse) before the
Participant attains (or would have attained if not deceased) the
older of Normal Retirement Age or age 62. If the Qualified Joint
and Survivor Form is waived, the spouse has the right to limit
consent only to a specific Beneficiary or a specific form of
benefit. The spouse can relinquish one or both such rights. Such
consent shall be made in writing. The consent shall not be made
more than 90 days before the Annuity Starting Date. If the
Qualified Preretirement Survivor Annuity is waived, the spouse
has the right to limit consent only to a specific Beneficiary.
Such consent shall be in writing. The spouse's consent shall be
witnessed by a plan representative or notary public. The spouse's
consent must acknowledge the effect of the election, including
that the spouse had the right to limit consent only to a specific
Beneficiary or a specific form of benefit, if applicable, and
that the relinquishment of one or both such rights was voluntary.
Unless the consent of the spouse expressly permits designations
by the Participant without a requirement of further consent by
the spouse, the spouse's consent must be limited to the form of
benefit, if applicable, and the Beneficiary (including any
Contingent Annuitant), class of Beneficiaries, or contingent
Beneficiary named in the election. Spousal consent is not
required, however, if the Participant establishes to the
satisfaction of the plan representative that the consent of the
spouse cannot be obtained because there is no spouse
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<PAGE>
or the spouse cannot be located. A spouse's consent under this
paragraph shall not be valid with respect to any other spouse. A
Participant may revoke a prior election without the consent of
the spouse. Any new election will require a new spousal consent,
unless the consent of the spouse expressly permits such election
by the Participant without further consent by the spouse. A
spouse's consent may be revoked at any time within the
Participant's election period.
(d) Special Rule for Profit Sharing Plan. As provided in the
preceding provisions of the Plan, if a Participant has a spouse
to whom he has been continuously married throughout the one-year
period ending on the date of his death, the Participant's Vested
Account shall be paid to such spouse. However, if there is no
such spouse or if the surviving spouse has already consented in a
manner conforming to the qualified election requirements in (c)
above, the Vested Account shall be payable to the Participant's
Beneficiary in the event of the Participant's death.
The Participant may waive the spousal death benefit described
above at any time provided that no such waiver shall be effective
unless it satisfies the conditions of (c) above (other than the
notification requirement referred to therein) that would apply to
the Participant's waiver of the Qualified Preretirement Survivor
Annuity.
Because this is a profit sharing plan which pays death benefits
as described above, this subsection (d) applies if the following
condition is met: with respect to the Participant, this Plan is
not a direct or indirect transferee after December 31, 1984, of a
defined benefit plan, money purchase plan (including a target
plan), stock bonus plan or profit sharing plan which is subject
to the survivor annuity requirements of Code Section 401(a)(11)
and Code Section 417. If the above condition is met, spousal
consent is not required for electing a benefit payable in a form
that is not a life annuity. If the above condition is not met,
the consent requirements of this article shall be operative.
SECTION 6.04--NOTICE REQUIREMENTS.
(a) Optional forms of retirement benefit. The Plan Administrator
shall furnish to the Participant and the Participant's spouse a
written explanation of the optional forms of retirement benefit
in the OPTIONAL FORMS OF DISTRIBUTION AND DISTRIBUTION
REQUIREMENTS SECTION of Article VI, including the material
features and relative values of these options, in a manner that
would satisfy the notice requirements of Code Section 417(a)(3)
and the right of the Participant and the Participant's spouse to
defer distribution until the benefit is no longer immediately
distributable. The Plan Administrator shall furnish the written
explanation by a method reasonably calculated to reach the
attention of the Participant and the Participant's spouse no less
than 30 days and no more than 90 days before the Annuity Starting
Date.
(b) Qualified Joint and Survivor Form. The Plan Administrator shall
furnish to the Participant a written explanation of the
following: the terms and conditions of the Qualified Joint and
Survivor Form; the Participant's right to make, and the effect
of, an election to waive the Qualified Joint and Survivor Form;
the rights of the Participant's spouse; and the right to revoke
an election and the effect of such a revocation. The Plan
Administrator shall furnish the written explanation by a method
reasonably calculated to reach the attention of the Participant
no less than 30 days and no more than 90 days before the Annuity
Starting Date.
After the written explanation is given, a Participant or spouse
may make written request for additional information. The written
explanation must be personally delivered or mailed (first class
mail, postage prepaid) to the Participant or spouse within 30
days from the date of the written request. The Plan Administrator
does not need to comply with more than one such request by a
Participant or spouse.
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The Plan Administrator's explanation shall be written in
nontechnical language and will explain the terms and conditions
of the Qualified Joint and Survivor Form and the financial effect
upon the Participant's benefit (in terms of dollars per benefit
payment) of electing not to have benefits distributed in
accordance with the Qualified Joint and Survivor Form.
(c) Qualified Preretirement Survivor Annuity. As required by the Code
and Federal regulation, the Plan Administrator shall furnish to
the Participant a written explanation of the following: the terms
and conditions of the Qualified Preretirement Survivor Annuity;
the Participant's right to make, and the effect of, an election
to waive the Qualified Preretirement Survivor Annuity; the rights
of the Participant's spouse; and the right to revoke an election
and the effect of such a revocation. The Plan Administrator shall
furnish the written explanation by a method reasonably calculated
to reach the attention of the Participant within the applicable
period. The applicable period for a Participant is whichever of
the following periods ends last:
(1) the period beginning one year before the date the
individual becomes a Participant and ending one year after
such date; or
(2) the period beginning one year before the date the
Participant's spouse is first entitled to a Qualified
Preretirement Survivor Annuity and ending one year after
such date.
If such notice is given before the period beginning with the
first day of the Plan Year in which the Participant attains age
32 and ending with the close of the Plan Year preceding the Plan
Year in which the Participant attains age 35, an additional
notice shall be given within such period. If a Participant ceases
to be an Employee before attaining age 35, an additional notice
shall be given within the period beginning one year before the
date he ceases to be an Employee and ending one year after such
date.
After the written explanation is given, a Participant or spouse
may make written request for additional information. The written
explanation must be personally delivered or mailed (first class
mail, postage prepaid) to the Participant or spouse within 30
days from the date of the written request. The Plan Administrator
does not need to comply with more than one such request by a
Participant or spouse.
The Plan Administrator's explanation shall be written in
nontechnical language and will explain the terms and conditions
of the Qualified Preretirement Survivor Annuity and the financial
effect upon the spouse's benefit (in terms of dollars per benefit
payment) of electing not to have benefits distributed in
accordance with the Qualified Preretirement Survivor Annuity.
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ARTICLE VII
TERMINATION OF PLAN
The Employer expects to continue the Plan indefinitely but reserves the
right to terminate the Plan in whole or in part at any time upon giving written
notice to all parties concerned. Complete discontinuance of Contributions under
the Plan constitutes complete termination of Plan.
The Account of each Participant shall be fully (100%) vested and
nonforfeitable as of the effective date of complete termination of Plan. The
Account of each Participant who is included in the group of Participants deemed
to be affected by the partial termination of the Plan shall be fully (100%)
vested and nonforfeitable as of the effective date of the partial Plan
termination. The Participant's Account shall continue to participate in the
earnings credited, expenses charged and any appreciation or depreciation of the
Investment Fund until the Vested Account is distributed. A distribution under
this article will be a retirement benefit and shall be distributed to the
Participant according to the provisions of Article VI.
A Participant's Account which does not result from Contributions which
are used to compute the Actual Deferral Percentage, as defined in the EXCESS
AMOUNTS SECTION of Article III, may be distributed to the Participant after the
effective date of the complete or partial Plan termination. A Participant's
Account resulting from Contributions which are used to compute such percentage
may be distributed upon termination of the Plan without the establishment or
maintenance of another defined contribution plan, other than an employee stock
ownership plan (as defined in Code Section 4975(e) or Code Section 409) or a
simplified employee pension plan (as defined in Code Section 408(k)). Such a
distribution made after March 31, 1988, must be in a single sum.
Upon complete termination of Plan, no more Employees shall become
Participants and no more Contributions shall be made.
The assets of this Plan shall not be paid to the Employer at any time,
except that, after the satisfaction of all liabilities under the Plan, any
assets remaining may be paid to the Employer. The payment may not be made if it
would contravene any provision of law.
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ARTICLE VIII
ADMINISTRATION OF PLAN
SECTION 8.01--ADMINISTRATION.
Subject to the provisions of this article, the Plan Administrator has
complete control of the administration of the Plan. The Plan Administrator has
all the powers necessary for it to properly carry out its administrative duties.
Not in limitation, but in amplification of the foregoing, the Plan Administrator
has the power to construe the Plan, including ambiguous provisions, and to
determine all questions that may arise under the Plan, including all questions
relating to the eligibility of Employees to participate in the Plan and the
amount of benefit to which any Participant, Beneficiary, spouse or Contingent
Annuitant may become entitled. The Plan Administrator's decisions upon all
matters within the scope of its authority shall be final.
Unless otherwise set out in the Plan or Group Contract, the Plan
Administrator may delegate recordkeeping and other duties which are necessary
for the administration of the Plan to any person or firm which agrees to accept
such duties. The Plan Administrator shall be entitled to rely upon all tables,
valuations, certificates and reports furnished by the consultant or actuary
appointed by the Plan Administrator and upon all opinions given by any counsel
selected or approved by the Plan Administrator.
The Plan Administrator shall receive all claims for benefits by
Participants, former Participants, Beneficiaries, spouses, and Contingent
Annuitants. The Plan Administrator shall determine all facts necessary to
establish the right of any Claimant to benefits and the amount of those benefits
under the provisions of the Plan. The Plan Administrator may establish rules and
procedures to be followed by Claimants in filing claims for benefits, in
furnishing and verifying proofs necessary to determine age, and in any other
matters required to administer the Plan.
The Plan Administrator shall direct the Trustee as to the exercise of
all voting and tendering powers over any shares of Qualifying Employer
Securities.
SECTION 8.02--RECORDS.
All acts and determinations of the Plan Administrator shall be duly
recorded. All these records, together with other documents necessary for the
administration of the Plan, shall be preserved in the Plan Administrator's
custody.
Writing (handwriting, typing, printing), photostating, photographing,
microfilming, magnetic impulse, mechanical or electrical recording or other
forms of data compilation shall be acceptable means of keeping records.
SECTION 8.03--INFORMATION AVAILABLE.
Any Participant in the Plan or any Beneficiary may examine copies of the
Plan description, latest annual report, any bargaining agreement, this Plan, the
Group Contract or any other instrument under which the Plan was established or
is operated. The Plan Administrator shall maintain all of the items listed in
this section in its office, or in such other place or places as it may designate
in order to comply with governmental regulations. These items may be examined
during reasonable business hours. Upon the written request of a Participant or
Beneficiary receiving benefits under the Plan, the Plan Administrator will
furnish him with a copy of any of these items. The Plan Administrator may make a
reasonable charge to the requesting person for the copy.
SECTION 8.04--CLAIM AND APPEAL PROCEDURES.
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A Claimant must submit any required forms and pertinent information when
making a claim for benefits under the Plan.
If a claim for benefits under the Plan is denied, the Plan Administrator
shall provide adequate written notice to the Claimant whose claim for benefits
under the Plan has been denied. The notice must be furnished within 90 days of
the date that the claim is received by the Plan Administrator. The Claimant
shall be notified in writing within this initial 90-day period if special
circumstances require an extension of time needed to process the claim and the
date by which the Plan Administrator's decision is expected to be rendered. The
written notice shall be furnished no later than 180 days after the date the
claim was received by the Plan Administrator.
The Plan Administrator's notice to the Claimant shall specify the reason
for the denial; specify references to pertinent Plan provisions on which denial
is based; describe any additional material and information needed for the
Claimant to perfect his claim for benefits; explain why the material and
information is needed; inform the Claimant that any appeal he wishes to make
must be in writing to the Plan Administrator within 60 days after receipt of the
Plan Administrator's notice of denial of benefits and that failure to make the
written appeal within such 60-day period shall render the Plan Administrator's
determination of such denial final, binding and conclusive.
If the Claimant appeals to the Plan Administrator, the Claimant, or his
authorized representative, may submit in writing whatever issues and comments
the Claimant, or his representative, feels are pertinent. The Claimant, or his
authorized representative may review pertinent Plan documents. The Plan
Administrator shall reexamine all facts related to the appeal and make a final
determination as to whether the denial of benefits is justified under the
circumstances. The Plan Administrator shall advise the Claimant of its decision
within 60 days of his written request for review, unless special circumstances
(such as a hearing) would make rendering a decision within the 60-day limit
unfeasible. The Claimant must be notified within the 60-day limit if an
extension is necessary. The Plan Administrator shall render a decision on a
claim for benefits no later than 120 days after the request for review is
received.
SECTION 8.05--UNCLAIMED VESTED ACCOUNT PROCEDURE.
At the time the Participant's Vested Account is distributable to the
Participant, spouse or Beneficiary without his consent according to the
provisions of Article VI or Article IX, the Plan Administrator, by certified or
registered mail addressed to his last known address and in accordance with the
notice requirements of Article VI, will notify him of his entitlement to a
benefit. If the Participant, spouse or Beneficiary fails to claim the Vested
Account or make his whereabouts known in writing within six months from the date
of mailing the notice, the Plan Administrator may treat such unclaimed Vested
Account as a forfeiture and apply it according to the forfeiture provisions of
Article III. If Article III contains no forfeiture provisions, such amount will
be applied to reduce the earliest Employer Contributions due after the
forfeiture arises.
If a Participant's Vested Account is forfeited according to the
provisions of the above paragraph and the Participant, his spouse or his
Beneficiary at any time make a claim for benefits, the forfeited Vested Account
shall be reinstated, unadjusted for any gains or losses occurring after the date
it was forfeited. The reinstated Vested Account shall then be distributed to the
Participant, spouse or Beneficiary according to the preceding provisions of the
Plan.
SECTION 8.06--DELEGATION OF AUTHORITY.
All or any part of the administrative duties and responsibilities under
this article may be delegated by the Plan Administrator to a retirement
committee. The duties and responsibilities of the retirement committee shall be
set out in a separate written agreement.
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ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01--AMENDMENTS.
The Employer may amend this Plan at any time, including any remedial
retroactive changes (within the specified period of time as may be determined by
Internal Revenue Service regulations) to comply with the requirements of any law
or regulation issued by any governmental agency to which the Employer is
subject. An amendment may not diminish or adversely affect any accrued interest
or benefit of Participants or their Beneficiaries or eliminate an optional form
of distribution with respect to benefits attributable to service before the
amendment nor allow reversion or diversion of Plan assets to the Employer at any
time, except as may be necessary to comply with the requirements of any law or
regulation issued by any governmental agency to which the Employer is subject.
No amendment to this Plan shall be effective to the extent that it has the
effect of decreasing a Participant's accrued benefit. However, a Participant's
Account may be reduced to the extent permitted under Code Section 412(c)(8). For
purposes of this paragraph, a Plan amendment which has the effect of decreasing
a Participant's Account or eliminating an optional form of benefit, with respect
to benefits attributable to service before the amendment shall be treated as
reducing an accrued benefit. Furthermore, if the vesting schedule of the Plan is
amended, in the case of an Employee who is a Participant as of the later of the
date such amendment is adopted or the date it becomes effective, the
nonforfeitable percentage (determined as of such date) of such Employee's
employer-derived accrued benefit will not be less than his percentage computed
under the Plan without regard to such amendment.
An amendment shall not decrease a Participant's vested interest in the
Plan. If an amendment to the Plan changes the computation of the percentage used
to determine that portion of a Participant's Account attributable to Employer
Contributions which is nonforfeitable (whether directly or indirectly), each
Participant or former Participant
(a) who has completed at least three Years of Service on the date the
election period described below ends (five Years of Service if
the Participant does not have at least one Hour-of-Service in a
Plan Year beginning after December 31, 1988) and
(b) whose nonforfeitable percentage will be determined on any date
after the date of the change
may elect, during the election period, to have the nonforfeitable percentage of
his Account that results from Employer Contributions determined without regard
to the amendment. This election may not be revoked. An election does not need to
be provided for any Participant or former Participant whose nonforfeitable
percentage, determined according to the Plan provisions as changed, cannot at
any time be less than the percentage determined without regard to such change.
The election period shall begin no later than the date the Plan amendment is
adopted and end no earlier than the sixtieth day after the latest of the date
the amendment is adopted or becomes effective, or the date the Participant is
issued written notice of the amendment by the Employer or the Plan
Administrator.
SECTION 9.02--DIRECT ROLLOVERS.
This section applies to distributions made on or after January 1, 1993.
Notwithstanding any provision of the Plan to the contrary that would otherwise
limit a Distributee's election under this section, a Distributee may elect, at
the time and in the manner prescribed by the Plan Administrator, to have any
portion of an Eligible Rollover Distribution paid directly to an Eligible
Retirement Plan, specified by the Distributee, in a Direct Rollover.
SECTION 9.03--MERGERS AND DIRECT TRANSFERS.
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The Plan may not be merged or consolidated with, nor have its assets or
liabilities transferred to, any other retirement plan, unless each Participant
in the plan would (if the plan then terminated) receive a benefit immediately
after the merger, consolidation or transfer which is equal to or greater than
the benefit the Participant would have been entitled to receive immediately
before the merger, consolidation or transfer (if this Plan had then terminated).
The Employer may enter into merger agreements or direct transfer of assets
agreements with the employers under other retirement plans which are qualifiable
under Code Section 401(a), including an elective transfer, and may accept the
direct transfer of plan assets, or may transfer plan assets, as a party to any
such agreement. The Employer shall not consent to, or be a party to a merger,
consolidation or transfer of assets with a defined benefit plan if such action
would result in a defined benefit feature being maintained under this Plan.
The Plan may accept a direct transfer of plan assets on behalf of an
Eligible Employee. If the Eligible Employee is not an Active Participant when
the transfer is made, the Eligible Employee shall be deemed to be an Active
Participant only for the purpose of investment and distribution of the
transferred assets. Employer Contributions shall not be made for or allocated to
the Eligible Employee, until the time he meets all of the requirements to become
an Active Participant.
The Plan shall hold, administer and distribute the transferred assets as
a part of the Plan. The Plan shall maintain a separate account for the benefit
of the Employee on whose behalf the Plan accepted the transfer in order to
reflect the value of the transferred assets. Unless a transfer of assets to the
Plan is an elective transfer, the Plan shall apply the optional forms of benefit
protections described in the AMENDMENTS SECTION of Article IX to all transferred
assets. A transfer is elective if: (1) the transfer is voluntary, under a fully
informed election by the Participant; (2) the Participant has an alternative
that retains his Code Section 411(d)(6) protected benefits (including an option
to leave his benefit in the transferor plan, if that plan is not terminating);
(3) if the transferor plan is subject to Code Sections 401(a)(11) and 417, the
transfer satisfies the applicable spousal consent requirements of the Code; (4)
the notice requirements under Code Section 417, requiring a written explanation
with respect to an election not to receive benefits in the form of a qualified
joint and survivor annuity, are met with respect to the Participant and spousal
transfer election; (5) the Participant has a right to immediate distribution
from the transferor plan under provisions in the plan not inconsistent with Code
Section 401(a); (6) the transferred benefit is equal to the Participant's entire
nonforfeitable accrued benefit under the transferor plan, calculated to be at
least the greater of the single sum distribution provided by the transferor plan
(if any) or the present value of the Participant's accrued benefit under the
transferor plan payable at the plan's normal retirement age and calculated using
an interest rate subject to the restrictions of Code Section 417(e) and subject
to the overall limitations of Code Section 415; (7) the Participant has a 100%
nonforfeitable interest in the transferred benefit; and (8) the transfer
otherwise satisfies applicable Treasury regulations.
SECTION 9.04--PROVISIONS RELATING TO THE INSURER AND OTHER PARTIES.
The obligations of an Insurer shall be governed solely by the provisions
of the Group Contract. The Insurer shall not be required to perform any act not
provided in or contrary to the provisions of the Group Contract. See the
CONSTRUCTION SECTION of this article.
Any issuer or distributor of investment contracts or securities is
governed solely by the terms of its policies, written investment contract,
prospectuses, security instruments, and any other written agreements entered
into with the Trustee.
Such Insurer, issuer or distributor is not a party to the Plan, nor
bound in any way by the Plan provisions. Such parties shall not be required to
look to the terms of this Plan, nor to determine whether the Employer, the Plan
Administrator, the Trustee, or the Named Fiduciary have the authority to act in
any particular manner or to make any contract or agreement.
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Until notice of any amendment or termination of this Plan or a change in
Trustee has been received by the Insurer at its home office or an issuer or
distributor at their principal address, they are and shall be fully protected in
assuming that the Plan has not been amended or terminated and in dealing with
any party acting as Trustee according to the latest information which they have
received at their home office or principal address.
SECTION 9.05--EMPLOYMENT STATUS.
Nothing contained in this Plan gives an Employee the right to be
retained in the Employer's employ or to interfere with the Employer's right to
discharge any Employee.
SECTION 9.06--RIGHTS TO PLAN ASSETS.
No Employee shall have any right to or interest in any assets of the
Plan upon termination of his employment or otherwise except as specifically
provided under this Plan, and then only to the extent of the benefits payable to
such Employee in accordance with Plan provisions.
Any final payment or distribution to a Participant or his legal
representative or to any Beneficiaries, spouse or Contingent Annuitant of such
Participant under the Plan provisions shall be in full satisfaction of all
claims against the Plan, the Named Fiduciary, the Plan Administrator, the
Trustee, the Insurer, and the Employer arising under or by virtue of the Plan.
SECTION 9.07--BENEFICIARY.
Each Participant may name a Beneficiary to receive any death benefit
(other than any income payable to a Contingent Annuitant) that may arise out of
his participation in the Plan. The Participant may change his Beneficiary from
time to time. Unless a qualified election has been made, for purposes of
distributing any death benefits before Retirement Date, the Beneficiary of a
Participant who has a spouse who is entitled to a Qualified Preretirement
Survivor Annuity shall be the Participant's spouse. The Participant's
Beneficiary designation and any change of Beneficiary shall be subject to the
provisions of the ELECTION PROCEDURES SECTION of Article VI. It is the
responsibility of the Participant to give written notice to the Insurer of the
name of the Beneficiary on a form furnished for that purpose.
With the Employer's consent, the Plan Administrator may maintain records
of Beneficiary designations for Participants before their Retirement Dates. In
that event, the written designations made by Participants shall be filed with
the Plan Administrator. If a Participant dies before his Retirement Date, the
Plan Administrator shall certify to the Insurer the Beneficiary designation on
its records for the Participant.
If, at the death of a Participant, there is no Beneficiary named or
surviving, any death benefit under the Group Contract shall be paid under the
applicable provisions of the Group Contract.
SECTION 9.08--NONALIENATION OF BENEFITS.
Benefits payable under the Plan are not subject to the claims of any
creditor of any Participant, Beneficiary, spouse or Contingent Annuitant. A
Participant, Beneficiary, spouse or Contingent Annuitant does not have any
rights to alienate, anticipate, commute, pledge, encumber or assign any of such
benefits, except in the case of a loan as provided in the LOANS TO PARTICIPANTS
SECTION of Article V. The preceding sentences shall also apply to the creation,
assignment, or recognition of a right to any benefit payable with respect to a
Participant according to a domestic relations order, unless such order is
determined by the Plan Administrator to be a qualified domestic relations order,
as defined in Code Section 414(p), or any domestic relations order entered
before January 1, 1985.
SECTION 9.09--CONSTRUCTION.
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The validity of the Plan or any of its provisions is determined under
and construed according to Federal law and, to the extent permissible, according
to the laws of the state in which the Employer has its principal office. In case
any provision of this Plan is held illegal or invalid for any reason, such
determination shall not affect the remaining provisions of this Plan, and the
Plan shall be construed and enforced as if the illegal or invalid provision had
never been included.
In the event of any conflict between the provisions of the Plan and the
terms of any contract or policy issued hereunder, the provisions of the Plan
control the operation and administration of the Plan.
SECTION 9.10--LEGAL ACTIONS.
The Plan, the Plan Administrator, the Trustee and the Named Fiduciary
are the necessary parties to any action or proceeding involving the assets held
with respect to the Plan or administration of the Plan or Trust. No person
employed by the Employer, no Participant, former Participant or their
Beneficiaries or any other person having or claiming to have an interest in the
Plan is entitled to any notice of process. A final judgment entered in any such
action or proceeding shall be binding and conclusive on all persons having or
claiming to have an interest in the Plan.
SECTION 9.11--SMALL AMOUNTS.
If the Vested Account of a Participant has never exceeded $5,000, the
entire Vested Account shall be payable in a single sum as of the earliest of his
Retirement Date, the date he dies, or the date he ceases to be an Employee for
any other reason. This is a small amounts payment. If a small amount is payable
as of the date the Participant dies, the small amounts payment shall be made to
the Participant's Beneficiary (spouse if the death benefit is payable to the
spouse). If a small amount is payable while the Participant is living, the small
amounts payment shall be made to the Participant. The small amounts payment is
in full settlement of all benefits otherwise payable. The service credited to a
Participant who is reemployed by the Employer is not diminished as a result of
receiving a small amounts payment.
No other small amounts payments shall be made.
SECTION 9.12--WORD USAGE.
The masculine gender, where used in this Plan, shall include the
feminine gender and the singular words as used in this Plan may include the
plural, unless the context indicates otherwise.
SECTION 9.13--TRANSFERS BETWEEN PLANS.
If an Employee previously participated in another plan of the Employer
which credited service under the elapsed time method for any purpose which under
this Plan is determined using the hours method, then the Employee's service
shall be equal to the sum of (a), (b) and (c) below:
(a) The number of whole years of service credited to him under the
other plan as of the date he became an Eligible Employee under
this Plan.
(b) One year or a part of a year of service for the applicable
service period in which he became an Eligible Employee if he is
credited with the required number of Hours-of-Service. If the
Employer does not have sufficient records to determine the
Employee's actual Hours-of-Service in that part of the service
period before the date he became an Eligible Employee, the
Hours-of-Service shall be determined using an equivalency. For
any month in which he would be required to be credited with one
Hour-of-Service, the Employee shall be deemed for purposes of
this section to be credited with 190 Hours-of-Service.
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(c) The Employee's service determined under this Plan using the hours
method after the end of the applicable service period in which he
became an Eligible Employee.
If an Employee previously participated in another plan of the Employer
which credited service under the hours method for any purpose which under this
Plan is determined using the elapsed time method, then the Employee's service
shall be equal to the sum of (d), (e) and (f) below:
(d) The number of whole years of service credited to him under the
other plan as of the beginning of the applicable service period
under that plan in which he became an Eligible Employee under
this Plan.
(e) The greater of (1) the service that would be credited to him for
that entire service period using the elapsed time method or (2)
the service credited to him under the other plan as of the date
he became an Eligible Employee under this Plan.
(f) The Employee's service determined under this Plan using the
elapsed time method after the end of the applicable service
period under the other plan in which he became an Eligible
Employee.
Any modification of service contained in this Plan shall be applicable
to the service determined pursuant to this section.
If the Employee previously participated in the plan of a Controlled
Group member which credited service under a different method than is used in
this Plan, for purposes of determining eligibility and vesting the provisions
above shall apply as though the plan of the Controlled Group member were a plan
of the Employer.
SECTION 9.14--QUALIFICATION OF PLAN.
The Employer intends to apply for an advance determination letter from
the Internal Revenue Service for the initial qualification of the Plan, and the
determination of the exempt status of the Trust.
If this Plan is denied initial qualification, it will terminate. The
Employer shall give written notice to the Trustee and Insurer of the denial in
sufficient time so the assets resulting from Contributions which were
conditioned on initial qualification of the Plan may be returned within one year
after the date of denial, but only if the application for the qualification is
made by the time prescribed by law for filing the Employer's return for the
taxable year in which the Plan is adopted, or such later date as the Secretary
of the Treasury may prescribe. The Employer shall notify the Insurer that the
Group Contract is to be terminated. The Plan assets which result from Employer
Contributions shall be returned to the Employer. The Trustee, the Plan
Administrator and the Named Fiduciary shall then be discharged from all
obligations under the Plan and the Insurer shall be discharged from all
obligations under the Group Contract. A Participant or Beneficiary shall not
have any right or claim to the assets or to any benefit under this Plan before
the Internal Revenue Service determines that the Plan and Trust qualify under
the provisions of Code Section 401(a).
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By executing this Plan, the Primary Employer acknowledges having
counseled to the extent necessary with selected legal and tax advisors regarding
the Plan's legal and tax implications.
Executed this __________ day of _______________________________________,
19______.
PATRICK CUDAHY INCORPORATED
By: _________________________________________
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Title
Defined Contribution Plan 7.7
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